Blackberry 2012 Annual Report Download

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 40-F
or
Research In Motion Limited
(Exact name of Registrant as specified in its charter)
295 Phillip Street
Waterloo, Ontario
Canada, N2L 3W8
(519) 888-7465
(Address and telephone number of Registrant’s principal executive offices)
Research In Motion Corporation
122 West John Carpenter Parkway, Suite 430
Irving, Texas 75039
(972) 650-6126
(Name, address and telephone number of agent for service in the United States)
Securities registered or to be registered pursuant to Section 12(b) of the Act:
Common Shares, without par value
Securities registered or to be registered pursuant to Section 12(g) of the Act:
None
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:
None
For annual reports, indicate by check mark the information filed with this Form:
Indicate the number of outstanding shares of each of the Registrant’s classes of capital or common stock as of the close of the
period covered by this annual report.
The Registrant had 524,159,844 Common Shares outstanding as at March 3, 2012
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the
Exchange Act during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports) and
(2) has been subject to such filing requirements for the past 90 days.
Yes No
REGISTRATION STATEMENT PURSUANT TO SECTION 12 OF THE SECURITIES
EXCHANGE ACT OF 1934
ANNUAL REPORT PURSUANT TO SECTION 13(a) OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended March 3, 2012
Commission File Number
0
-29898
Ontario
3661
Not Applicable
(Province or other Jurisdiction of
Incorporation or Organization)
(Primary Standard Industrial
Classification Code Number)
(I.R.S. Employer
Identification No.)
Annual information form
Audited annual financial statements
Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate Web site, if any, every
Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during
the preceding 12 months (or for such shorter period that the Registrant was required to submit and post such files).
Yes No

Table of contents

  • Page 1
    ...3661 (Primary Standard Industrial Classification Code Number) Not Applicable (I.R.S. Employer Identification No.) 295 Phillip Street Waterloo, Ontario Canada, N2L 3W8 (519) 888-7465 (Address and telephone number of Registrant's principal executive offices) Research In Motion Corporation 122 West...

  • Page 2
    ... financial statements for the fiscal year ended March 3, 2012, filed as Exhibit 1.2 to this Annual Report. D. Changes in Internal Control Over Financial Reporting See Management's Discussion and Analysis of Financial Condition and Results of Operations for the fiscal year ended March 3, 2012...

  • Page 3
    ...audit review of the Company's financial statements and are not reported above as audit fees were $195,000 and $65,000. Professional services provided included procedures related to the audit of new systems implemented. Tax Fees The aggregate fees billed by EY for the fiscal years ended March 3, 2012...

  • Page 4
    ... of the Nasdaq Stock Market, Inc. ("Nasdaq"). L. Critical Accounting Policies A discussion of the Registrant's critical accounting policies can be found in its Management's Discussion and Analysis of Financial Condition and Results of Operations for the fiscal year ended March 3, 2012, included in...

  • Page 5
    ..., information relating to the securities in relation to which the obligation to file an annual report on Form 40-F arises or transactions in said securities. B. Consent to Service of Process The Registrant has previously filed with the Commission a Form F-X in connection with its Common Shares.

  • Page 6
    ... that it meets all of the requirements for filing on Form 40-F and has duly caused this annual report to be signed on its behalf by the undersigned, thereto duly authorized. RESEARCH IN MOTION LIMITED Date: April 9, 2011 By: /s/ Brian Bidulka Name: Brian Bidulka Title: Chief Financial Officer

  • Page 7
    ... with U.S. generally accepted accounting principles. Management's Discussion and Analysis of Financial Condition and Results of Operations for the fiscal year ended March 3, 2012. Consent of Ernst & Young LLP. Certification of the Chief Executive Officer and Chief Financial Officer pursuant to...

  • Page 8
    Exhibit 1.1 RESEARCH IN MOTION LIMITED 295 Phillip Street Waterloo, Ontario Canada N2L 3W8 Annual Information Form For the fiscal year ended March 3, 2012 Date: April 9, 2012 1

  • Page 9
    ... INTELLECTUAL PROPERTY PRODUCTION REGULATORY MATTERS CORPORATE RESPONSIBILITY ENVIRONMENTAL REGULATIONS AND COSTS EMPLOYEES LEGAL PROCEEDINGS RISK FACTORS DIVIDEND POLICY DESCRIPTION OF SHARE CAPITAL COMMON SHARES CLASS A COMMON SHARES PREFERRED SHARES MARKET FOR SECURITIES OF THE COMPANY DIRECTORS...

  • Page 10
    ... in United States dollars. BlackBerry®, RIM®, Research In Motion®, and related trademarks, names and logos are the property of Research In Motion Limited and are registered and/or used in the United States and countries around the world. All other trademarks are the property of their respective...

  • Page 11
    ... of an ecosystem of applications and services for the BlackBerry 10 smartphones and the BlackBerry PlayBook tablets; RIM's ability to expand and enhance BlackBerry® App World™; RIM's reliance on third-party manufacturers for certain products and its ability to manage its production process; the...

  • Page 12
    ...; effective management of the Company's past growth and its ongoing development of service and support operations; potential charges relating to the impairment of goodwill or other long-lived assets recorded on RIM's balance sheet; risks as a result of actions of activist shareholders; government...

  • Page 13
    ... Research In Motion UK Limited RIM Finance, LLC GENERAL DEVELOPMENT OF THE BUSINESS RIM, a global leader in wireless innovation, revolutionized the mobile industry with the introduction of the BlackBerry® solution in 1999. BlackBerry products and services are currently used by millions of customers...

  • Page 14
    ...BlackBerry Business Cloud Services for Microsoft Office 365; RIM's Board of Directors appointed Thorsten Heins as President and Chief Executive Officer of the Company, and appointed Barbara Stymiest as the independent Chair of the Board as part of governance changes implemented in the fourth quarter...

  • Page 15
    ...™ 3G, BlackBerry® Torch™, and the BlackBerry® Style™; Announced the BlackBerry® PlayBook™ tablet, RIM's first professional-grade tablet, based on the BlackBerry® Tablet OS; Introduced a number of new services, including BlackBerry® Enterprise Server Express, BlackBerry® Mobile Voice...

  • Page 16
    ...offers basic BlackBerry Enterprise Server features free of cost to most Microsoft Exchange users; and BlackBerry® Internet Service customers exceeded BlackBerry Enterprise Server as a percentage of the subscriber base for the first time. NARRATIVE DESCRIPTION OF THE BUSINESS Overview RIM, a global...

  • Page 17
    ... market shift including BlackBerry Enterprise Server Express, BlackBerry Mobile Fusion and BlackBerry Balance, which give IT departments the ability to securely monitor multiple OS platforms as well as securely protect corporate data on an employee's personal smartphone or tablet. Products designed...

  • Page 18
    ... of an integrated hardware, software and service platform that support multiple wireless network standards, RIM provides end-to-end wireless solutions for seamless access to information, including email, voice, instant messaging, short message service ("SMS"), Internet and intranet-based browsing...

  • Page 19
    ... products such as BlackBerry Mobile Fusion and BlackBerry Balance, which give IT departments the ability to securely monitor multiple OS platforms using the existing RIM infrastructure, as well as securely protect corporate data on an employee's personal smartphone or tablet. Intellectual Property...

  • Page 20
    .... Growth of the BlackBerry App Ecosystem and Developer Community. An application-rich ecosystem is critical to succeeding in the mobile smartphone and tablet marketplace, and RIM continues to build a large network of thousands of commercial, independent and corporate software developers focused on...

  • Page 21
    ...PIM, corporate voice PBX and hybrid IP/PBX stores, real-time computing and corporate IM such as IBM SameTime and Microsoft Live Communications Server, Microsoft Office Communications Server and enterprise applications such as customer relationship management ("CRM"), and enterprise social networking...

  • Page 22
    • ROI. The return on investment for the BlackBerry solution provides customers with rapid payback for their purchase. The primary benefits include personal productivity and team workflow enhancements. RIM continues to launch new IT administrator and end user features designed to lower the cost of...

  • Page 23
    ...applications and portal companies, Internet social networking providers, multimedia content providers, gaming platform vendors, consumer electronics retailers, microchip and other manufacturers, and global systems integrators. Grow the BlackBerry App Ecosystem and developer community. An application...

  • Page 24
    ... program, the Company is targeting areas such as product lifecycle management, supply chain management and business support services to achieve best in class operational metrics. Continue to invest in highly qualified personnel. RIM believes that the quality and skills of its employees have been key...

  • Page 25
    ... and tablets, service and software. BlackBerry service is provided through a combination of RIM's global BlackBerry Infrastructure and the wireless networks of RIM's carrier partners. Other revenue includes accessories, non-warranty repairs, BlackBerry App World and gains and losses on revenue hedge...

  • Page 26
    ... BlackBerry smartphone and tablet portfolio for fiscal 2012 included: BlackBerry Bold series BlackBerry Bold 9900 and 9930 The thinnest BlackBerry smartphones to date and the first to offer the union of a high performance keyboard and touch display integrated within the iconic BlackBerry Bold design...

  • Page 27
    ... application and gaming High productivity, pre-loaded collaboration software (BlackBerry Balance, BlackBerry Protect, Docs-to-Go Premium) HD video recording 1.2GHz Processor BlackBerry Curve series BlackBerry Curve 9350/9360/9370 Designed to address a large segment of the global mobile phone market...

  • Page 28
    ...video store and enhanced web browsing) • BlackBerry Enterprise Solution • BlackBerry Enterprise Server - BlackBerry Enterprise Server is robust software that acts as the centralized link between BlackBerry smartphones, enterprise systems, business applications and wireless networks. BlackBerry...

  • Page 29
    ... Client, BlackBerry® MVS Services, and BlackBerry® MVS Server. It unifies fixed and mobile voice communications so users can be reached at a single business phone number and access enterprise voice features with an intuitive and integrated approach. BlackBerry MVS offers advanced security features...

  • Page 30
    ...® ES support, Adobe® Flash® and Adobe® AIR®. BlackBerry PlayBook OS 2.0 will run most Android 2.3 applications without any code changes. RIM expects to release BlackBerry 10 SDKs in fiscal 2013 building on open standards and open source wherever possible in order to provide developers with...

  • Page 31
    ... tablet and over 70,000 applications in total. BlackBerry App World provides BlackBerry smartphone and BlackBerry PlayBook users with a way to discover and download/purchase of applications directly from their BlackBerry smartphone or BlackBerry PlayBook. Users can purchase applications using...

  • Page 32
    ...support and technical support teams consisted of approximately 4,800 full time employees. Customers RIM is dependent on a number of significant global carrier partner customers with respect to the sales of its products both in terms of the numbers of devices sold and the aggregate value of its sales...

  • Page 33
    ...resources and applications. However, trends towards BYOD deployments, wherein some companies are allowing employees to connect their own smartphones to corporate networks, have increased competitive pressure on RIM in the enterprise market. New products and services such as BlackBerry Balance, which...

  • Page 34
    ... infrastructure manufacturers, network operators, content providers and other businesses within the industry may currently be customers of, suppliers to, strategic partners with, or investors in other businesses. The Company is currently working with a number of businesses, some of which are direct...

  • Page 35
    ... wireless data communications market, supporting its position as a primary supplier of wireless and related hardware and software products. RIM has developed its own radio code stack and incorporates this radio code stack into the processors that are deployed in BlackBerry smartphones. Additionally...

  • Page 36
    ... wireless solution and BlackBerry smartphones and tablets; building device software including operating systems, radio code, graphics and media frameworks, application runtimes, networking technologies, and BlackBerry applications; developing server and desktop software for enterprise and consumer...

  • Page 37
    ... be used with BlackBerry smartphones and tablets. The Company also engages in longer term fundamental research both directly and by selective funding of university research projects. The Company endeavors to take advantage of specific government and academic financial assistance programs to support...

  • Page 38
    ...and sell products into the wireless industry. RIM may also license its technology and intellectual property to third parties through various licensing agreements. Production RIM outsources the majority of its manufacturing to specialized global Electronic Manufacturing Services ("EMS") companies who...

  • Page 39
    ... respects the environment, RIM employees, the communities in which the Company operates and RIM's business partners around the world. Product sustainability efforts include implementing design for environment principles, material selection processes, energy efficiency and packaging assessments as...

  • Page 40
    ... in sales and marketing; approximately 1,300 in customer care and technical support; approximately 1,950 in manufacturing and supply chain; and approximately 5,650 in administration and business professional functions, which includes information technology, BlackBerry network operations and service...

  • Page 41
    ... of RIM are composed of a campus-style complex of five buildings totaling 242,582 square feet outside Dallas, Texas, housing certain sales, marketing, legal, research and development, customer service operations and administrative activities. Operations in Raleigh, North Carolina have increased to...

  • Page 42
    ..., purported class actions and other claims in the normal course of business) and may be subject to additional claims either directly or through indemnities against these claims that it provides to certain of its partners and customers. In particular, the industry in which the Company competes has...

  • Page 43
    ... patents are generally directed to image processing in digital cameras. On October 31, 2011, the Court held a hearing to address summary judgment motions filed by both sides. Proceedings are ongoing. On November 16, 2010, St. Clair filed a second complaint against the Company and other defendants...

  • Page 44
    ... generally directed to flash memory chips. The complaint did not seek monetary damages, but requested that the ITC issue orders prohibiting certain RIM products containing Samsung flash memory chips from being imported into the U.S. and sold in the U.S. The ALJ had set a trial date of June 20, 2011...

  • Page 45
    ...and data networking, displaying Internet content, and synchronization. The complaint sought an injunction and monetary damages. During a scheduling conference held on September 7, 2010, the Markman hearing was scheduled for September 8, 2011 and the jury selection for trial was set for March 5, 2012...

  • Page 46
    ... against the Company and 16 other defendants alleging infringement of U.S. Patent No. 5,663,757. This patent is generally directed to software controlled multi-mode interactive TV. The complaint seeks an injunction and money damages. The claim construction hearing is scheduled for May 3, 2013, and...

  • Page 47
    ...in Israel, Pelephone Communications Limited and Partner Communications Company Limited. Luzzatto accused various BlackBerry handsets of infringing Israeli Patent No. 121 225 that is generally directed to use of customized ringtones. Pursuant to Master Supply Agreement indemnification provisions, the...

  • Page 48
    ... generally directed to web-based messaging service technology. The complaint sought monetary damages and further relief as the Court may deem just and appropriate. The Company and Unified Messaging Solutions settled on August 2, 2011 for an amount immaterial to the Consolidated Financial Statements...

  • Page 49
    ... to technologies involving converging data and voice services. The complaint seeks an injunction and money damages. The Company and H-W settled all outstanding litigation on February 16, 2012 for an amount immaterial to the Consolidated Financial Statements. On April 19, 2011, Hybrid Audio LLC filed...

  • Page 50
    ... directed towards navigating media playlists. The complaint sought an injunction and money damages. The Company and Personal Audio, LLC settled all outstanding litigation with an agreement having an effective date of December 9, 2011 for an amount immaterial to the Consolidated Financial Statements...

  • Page 51
    ... node and a packet radio mesh network. The complaint seeks an injunction and money damages. The Company answered the complaint on October 27, 2011. The claim construction hearing was scheduled for September 20, 2012, and trial was scheduled to begin September 23, 2013. Proceedings are ongoing. On...

  • Page 52
    ... injunction and money damages. On February 21, 2012, WILAN USA, Inc. and WI-LAN, Inc. filed an amendment to the complaint, alleging infringement of U.S. Patent No. 6,240,088. The patent is generally directed to a message review feature. The Company's answer is due on March 19, 2012. Proceedings are...

  • Page 53
    financial condition and business prospects, and seek unspecified damages. The Company believes that the allegations are without merit and intends to vigorously defend itself. As of October 2011, several purported class action lawsuits were filed against the Company in various jurisdictions alleging ...

  • Page 54
    ...Company's business, results of operations and financial condition or could result in its products and services not achieving market acceptance or becoming obsolete. In addition, if the Company fails to accurately predict emerging technological trends and the changing needs of customers and end-users...

  • Page 55
    ... and related hardware or software products and services that the Company develops will be brought to market by it or network operators as quickly as anticipated or that they will achieve broad customer acceptance among operators or end-users. The Company's ability to compete successfully will depend...

  • Page 56
    ...PDA and tablet vendors, Internet application vendors, key network operators, content providers and others may seek to provide integrated wireless solutions that compete with the Company's products and services. The impact of competition could result in fewer customer orders, loss of market share and...

  • Page 57
    ... enable other device manufacturers or software developers to equip their products with BlackBerry functionality, including RIM's push technology, or use the Company's network infrastructure, such action may have the effect of impacting demand for RIM's products and services, and the benefits of such...

  • Page 58
    ... an effort to capture or maintain market share, to reduce inventory levels or to sell other products and services. As demonstrated by promotional activities the Company undertook in fiscal 2012 to drive sell-through of the BlackBerry PlayBook tablet to end customers, the Company has been, and in the...

  • Page 59
    ...largely within the control of network carriers and distributors, that are important to the success of the BlackBerry wireless solution, future product and service revenue and the growth of the Company's subscriber base, include the quality and coverage area of voice and data services offered by the...

  • Page 60
    ... current or expected purchase commitments for the Company's products and services, it could have a material adverse effect on the Company's business, results of operations and financial condition. One customer comprised 13% of accounts receivable as at March 3, 2012 (February 26, 2011 - one customer...

  • Page 61
    ... of the BlackBerry service, could have a material adverse effect on the Company's business, results of operations and financial condition, and could adversely affect the Company's longstanding reputation for reliability, thereby resulting in end users purchasing products offered by its competitors...

  • Page 62
    ...liquidation of inventory, supplier commitments and customer expectations. If the Company is unable to manage properly the discontinuation of these products and services, it could have a material adverse effect on the Company's business, results of operations and financial condition. The Company must...

  • Page 63
    ... its business will be undertaken with the objective of improving the Company's operations. This includes, among other things, a review of product management and the number of stock keeping units offered, the realization of supply chain efficiencies and bill of material cost reductions, marketing and...

  • Page 64
    ... of sales, returns on the Company's investment portfolio, timing of deliveries and collection of receivables, inventory levels, capital expenditures, operating expenses, and customer and supplier terms and conditions. The Company's ability to maintain or increase its cash flow and working capital...

  • Page 65
    ... the number of web-based products and services that it offers, increases the number of countries where the Company operates, and expands its ecosystem to offer third party products and services in conjunction with its own. The collection, storage, transmission, use and disclosure of user data and...

  • Page 66
    ... BlackBerry wireless solution or its existing security procedures for the personal information that it transmits and stores, its business, results of operations and financial condition may be adversely affected. The Company's network carriers or other customers, partners or members of its ecosystem...

  • Page 67
    ... increase efficiency through its CORE program), the recent governance changes, the challenges faced by the Company over the past fiscal year relating to delays in new product introductions, loss of market share, the substantial decline in the Company's share price (particularly for those employees...

  • Page 68
    ..., semiconductors, batteries, printed circuit boards, plastics, tooling equipment and memory, on a timely basis. The Company purchases components and licenses certain software used in the manufacture and operation of its products from a variety of sources. Some components, including custom components...

  • Page 69
    ... and services could negatively impact future pricing from suppliers. Any of these outcomes may result in the Company's products being more costly to manufacture and less competitive, which could have a material adverse effect on the Company's business, results of operations and financial condition...

  • Page 70
    ...of users, customers and partners. The Company believes that the importance of brand recognition will increase due to the relatively low barriers to entry in the wireless communications industry. The "BlackBerry" brand may be negatively impacted by a number of factors, including service interruptions...

  • Page 71
    ... have a material adverse effect on the Company's business, results of operations and financial condition. The Company is subject to government laws, regulations, orders, policies and restrictions, including on the sale of products and services that use encryption technology. Various countries have...

  • Page 72
    .... In addition, governments are increasingly imposing requirements on entities like RIM to facilitate controls over the content that users have access to on their mobile devices. Examples include content filtering laws or laws designed to prevent a company's products or services from being used to...

  • Page 73
    ...on their sales of products and services that use the Company's products. Market acceptance of the Company's products also depends on support from third-party software developers and the marketing efforts of value added resellers, Internet service providers and computer manufacturers and distributors...

  • Page 74
    ... third-party interfaces are not available to support the applications, the Company may lose market share, and its business, results of operations and financial condition may be adversely affected. The Company relies upon third parties to manufacture and repair its products and it is exposed to the...

  • Page 75
    ...party applications and are used to deliver confidential or personal information, the sale and support of these products and services may entail the risk of liability due to product liability, warranty or other claims tied to the security of data. In addition, the failure of the Company's products or...

  • Page 76
    ...or regulatory actions against the Company or its employees could also have a material adverse effect on the Company's business, BlackBerry brand, results of operations and financial condition. Risk associated with litigation claims against the Company arising from the Company's practice of providing...

  • Page 77
    ...be faced with significant monetary damages that could have a material adverse effect on the Company's business, results of operations and financial condition. Administrative or regulatory actions against the Company or its employees could also have a material adverse effect on the Company's business...

  • Page 78
    ... effect on the Company's business, results of operations and financial condition as well as its reputation. Although sales of BlackBerry smartphones to network operators, strategic partners and corporate partners continue to generate significant revenue streams, the Company's historical and current...

  • Page 79
    ...BlackBerry wireless solution are directly affected by the current economic and geopolitical conditions affecting the broader market. Current and future conditions in the domestic and global economies remain uncertain. A slowdown in capital spending by end-users of the Company's products and services...

  • Page 80
    ... of operations and financial condition. Acquisitions, divestitures, investments and other business initiatives may negatively affect the Company's results of operations. The Company has acquired, and continues to seek out opportunities to acquire or invest in, businesses, assets, products, services...

  • Page 81
    ... the Company's products and solutions are designed to meet relevant safety standards and recommendations globally, when used as directed, any perceived risk of adverse health effects of wireless communication devices could materially adversely affect the Company through a reduction in sales. The...

  • Page 82
    ... or other adverse health effects. In addition, users of the Company's products who disregard the Company's warnings about using the products while operating a motor vehicle or who use after-market accessories, such as batteries, that are not subject to the Company's quality control procedures may...

  • Page 83
    ... investment policies will reduce or eliminate market or credit risks. See "Financial Condition" in Management's Discussion and Analysis of Financial Condition and Results of Operations for fiscal 2012 for a discussion of certain liquidity issues relating to the Company's investments in auction rate...

  • Page 84
    ... of third-party intellectual property rights will be successful or that a supplier's indemnity will cover all damages and losses suffered by the Company and its customers, partners and other suppliers due to infringing products, or that the Company can secure a license, modification or replacement...

  • Page 85
    ... its business to focus on continuing operations in other markets. In addition, the Company includes and promotes certain third-party applications and content with its products. The Company's support and promotion of thirdparty applications and content increase the risk of intellectual property...

  • Page 86
    ... the Company's technology or designs; disputes will arise with the Company's strategic partners, customers or others concerning the ownership of intellectual property; unauthorized disclosure or use of the Company's intellectual property, including source code, know-how or trade secrets...

  • Page 87
    .../or use of the Company's products or services. Risks Related to the Company's Common Shares The market price of the Company's common shares is volatile. The market price of the Company's outstanding common shares has been and continues to be volatile due in part to highly volatile markets generally...

  • Page 88
    ... by current economic factors which more significantly impact other specific industry sectors, such as the financial, government and legal services sectors and increased adoption in those sectors of products of the Company's competitors. These sectors have represented the Company's largest end user...

  • Page 89
    ... number of class A common shares and an unlimited number of preferred shares, issuable in one or more series. The Company's Board of Directors has the authority to issue preferred shares and determine the price, designation, rights, preferences, privileges, restrictions and conditions, including...

  • Page 90
    ... to the common shares and the class A common shares. The Company's board of directors has the authority to issue series of preferred shares and determine the price, number, designation, rights, privileges, restrictions and conditions, including dividend rights, of each series without any further...

  • Page 91
    MARKET FOR SECURITIES OF THE COMPANY The Company's common shares are listed and posted for trading on The Toronto Stock Exchange under the symbol "RIM" and are listed on the NASDAQ Global Select Market under the symbol "RIMM". The volume of trading and price ranges of the Company's common shares on ...

  • Page 92
    ..., Ontario Corporate Director Brian Bidulka Burlington, Ontario Chief Financial Officer, RIM Robin Bienfait Norcross, Georgia Chief Information Officer, RIM David Yach(6) Waterloo, Ontario Chief Technology Officer, Software, RIM Jim Rowan(6) Toronto, Ontario Chief Operating Officer, Global Operations...

  • Page 93
    ..., Software of the Company; Mr. Jim Rowan who prior to July 2011 was Chief Operating Officer, Manufacturing & Global Supply Chain and formerly was Senior Vice President, Global Manufacturing & Supply Chain of the Company, previous to that he was Executive Vice President of World Wide Operations for...

  • Page 94
    ... as a director, chief executive officer, or chief financial officer. b) None of the directors, executive officers or a shareholder holding a sufficient number of securities of the Company to affect materially the control of the Company, a) is, at the date of this Annual Information Form, or...

  • Page 95
    ... Inc.) and prior to that he was President and Chief Executive Officer of Falconbridge Limited. Mr. Kerr is a director of Brookfield Asset Management Inc.; Sustainable Developments Technology Canada; Sun Life Financial Corporation; the Toronto Rehabilitation Hospital Foundation; and the Special...

  • Page 96
    ... Business, University of Western Ontario and FCA from the Institute of Chartered Accountants of Ontario. From 2004 to 2011, Ms. Stymiest held various senior management positions in the Royal Bank of Canada and served as a member of the Group Executive responsible for the overall strategic direction...

  • Page 97
    ... performance of the audit review of the Company's financial statements and are not reported above as audit fees were $195,000 and $65,000. Tax Fees The aggregate fees billed by EY for the fiscal years ended March 3, 2012 and February 26, 2011, respectively, for professional services rendered by EY...

  • Page 98
    ...provided in the Company's audited consolidated financial statements and the Company's Management's Discussion and Analysis of Financial Condition and Results of Operations for the year ended March 3, 2012, which can be found at www.sedar.com. Additional information, including directors' and officers...

  • Page 99
    ... by multi-media support (3G) and now 4G, which refers to all IP packet-switched networks and increases in data speeds. Analog transmission uses energy waves to transmit information. In the case of wireless voice transmission, the sound waves of a human voice are converted directly to specific...

  • Page 100
    ..., but also those for marketing, customer service, and technical support. An attack designed to flood a network with unnecessary traffic in order to prevent legitimate users of a system from having access. A way of processing information by storing it as binary numbers. A digital circuit is either on...

  • Page 101
    ... like streaming audio and video. Hybrid PBXs support both traditional Time Division Multiplexed (TDM) phones to VoIP, easing the transition from TDM to VoIP. Integrated Digital Enhanced Network. A wireless communications technology from Motorola that provides support for voice, data, short messages...

  • Page 102
    ... into close proximity. Network Operations Centre. A central location for network management. It functions as a control centre for network monitoring, analysis and accounting. Private Branch Exchange. A private telephone network used within an enterprise. Users share a fixed number of outside lines...

  • Page 103
    ... later supported by all other digital-based mobile communications systems. Secure Sockets Layer. Protocols that provide security to Internet communications by encrypting the segments of network connections. See 3G wireless. An icon or program sent wirelessly to a user's device without the end user...

  • Page 104
    ... of the Committee to maintain free and open means of communication among the Board, the independent auditors and the financial and senior management of the Corporation. 3. COMPOSITION OF THE COMMITTEE Each member of the Committee shall be an "independent" director within the meaning of Section 301...

  • Page 105
    ...to review the Corporation's financial statements, MD&A, annual and interim earnings press releases and related filings prior to their public release and filing with the Ontario Securities Commission ("OSC"), the SEC or any other regulatory body. The Chair should work with the Chief Financial Officer...

  • Page 106
    ...Minutes relating to in camera sessions may be provided to Board members with the consent of the Chair. 5. DUTIES AND RESPONSIBILITIES OF THE COMMITTEE The Committee is responsible for the oversight of the Corporation's accounting, financial reporting and risk management processes, including (i) the...

  • Page 107
    ... auditors' work; (iii) Review the results of the year-end audit of the Corporation, including (as applicable): • the audit reports on the Corporation's financial statements and management's assessment of internal control over financial reporting, the published financial statements, the management...

  • Page 108
    ... applicable auditing standards by the independent auditors; (iv) Review the Corporation's interim financial statements and quarterly earnings press releases and report thereon to the Board before such documents are approved by the Board and disclosed to the public; (v) Review with management...

  • Page 109
    ... changes in management's assessment of risks; (vi) Review with management the progress and results of all RPA Group projects, approve procedures for implementing accepted recommendations, and, when deemed necessary or appropriate by the Committee, direct the Corporation's Co-Chief Executive Officer...

  • Page 110
    ... internal controls and internal control over financial reporting, including controls and security of the computerized information systems, and evaluate whether the Corporation is operating in accordance with its prescribed policies, procedures and codes of conduct; (iii) Review with management and...

  • Page 111
    ... Code of Business Standards and Principles; (iv) Review and approve capital and operating expenditure limits on an annual basis and review and approval of any exceptions to such limits proposed by the Corporation from time to time; (v) Oversee areas under the responsibility of management, including...

  • Page 112
    ... work or performing other audit, review or attest services for the Corporation, and (2) to any independent counsel or other advisors employed by the Committee. 7. DISCLOSURE AND REVIEW OF CHARTER The Charter shall be (1) published in the Corporation's annual report, information circular or annual...

  • Page 113
    ... advisors, the Lead Director of the Board of Directors, the Co-CEOs, the Corporate Secretary and senior management as appropriate and consider, on a proactive basis, emerging matters that should be addressed by the Committee; Facilitate the timely, accurate and proper flow of information to and from...

  • Page 114
    3. 4. 5. Provide for in-camera sessions at all scheduled meetings of the Committee without management present and, as appropriate, without the Corporate Secretary present. Following each meeting of the Committee, report to the Board of Directors on the activities, findings and any recommendations ...

  • Page 115
    ... OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ON INTERNAL CONTROL OVER FINANCIAL REPORTING The Board of Directors and Shareholders of Research In Motion Limited We have audited Research In Motion Limited's [the "Company"] internal control over financial reporting as of March 3, 2012, based on...

  • Page 116
    INDEPENDENT AUDITORS' REPORT OF REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Shareholders of Research In Motion Limited We have audited the accompanying consolidated financial statements of Research In Motion Limited [the "Company"], which are comprised of the consolidated balance...

  • Page 117
    .... The financial information appearing throughout this Annual Report is consistent with the Consolidated Financial Statements. The Consolidated Financial Statements have been reviewed by the Audit and Risk Management Committee and approved by the Board of Directors of Research In Motion Limited. In...

  • Page 118
    Research In Motion Limited Incorporated under the Laws of Ontario (United States dollars, in millions) Consolidated Balance Sheets As at March 3, 2012 February 26, 2011 Assets Current Cash and cash equivalents Short-term investments Accounts receivable, net Other receivables Inventories Income ...

  • Page 119
    ...available-for-sale investments Net change in fair value of derivatives designated as cash flow hedges during the year Amounts reclassified to income during the year Shares issued: Exercise of stock options Stock-based compensation Tax benefits related to stock-based compensation Purchase of treasury...

  • Page 120
    Research In Motion Limited (United States dollars, in millions, except per share data) Consolidated Statements of Operations March 3, 2012 For the Year Ended February 26, February 27, 2011 2010 Revenue Hardware and other Service and software Cost of sales Hardware and other (includes a fiscal 2012 ...

  • Page 121
    ... Other Net changes in working capital items Net cash provided by operating activities Cash flows from investing activities Acquisition of long-term investments Proceeds on sale or maturity of long-term investments Acquisition of property, plant and equipment Acquisition of intangible assets Business...

  • Page 122
    ... communications market. Through the development of integrated hardware, software and services that support multiple wireless network standards, RIM provides platforms and solutions for seamless access to information, including email, voice, instant messaging, short message service (SMS), Internet...

  • Page 123
    ... the Company sells its products and services to a variety of customers, there were no customers that comprised more than 10% of the Company's revenue in fiscal 2012 (February 26, 2011 - two customers comprised 11% each; February 27, 2010 three customers comprised 20%, 13% and 10% each). Investments...

  • Page 124
    ...specific industry and individual company data, the length of time and the extent to which the fair value has been less than cost, the financial condition, the near-term prospects of the individual investment and the Company's intent and ability to hold the investments. In the event that a decline in...

  • Page 125
    ...Work in process and finished goods inventories are stated at the lower of cost and net realizable value. Cost includes the cost of materials plus direct labour applied to the product and the applicable share of manufacturing overhead. Cost is determined on a first-in-first-out basis. Property, plant...

  • Page 126
    .... The Company is currently amortizing its intangible assets with definite lives over periods generally ranging between two to ten years. Impairment of long-lived assets The Company reviews long-lived assets such as property, plant and equipment and intangible assets with finite useful lives for...

  • Page 127
    ..., the Company uses the residual method to recognize revenue if the fair value of undelivered elements is determinable. Revenue from software maintenance, unspecified upgrades and technical support contracts is recognized over the period that such items are delivered or those services are provided. 6

  • Page 128
    ... essential software operating system are recognized at the time of sale provided that the four revenue recognition criteria have been met. The consideration allocated to the unspecified software upgrade rights is deferred and recognized rateably over the 24-month estimated life of the tablets. For...

  • Page 129
    ...Motion Limited Notes to the Consolidated Financial Statements In millions of United States dollars, except share and per share data, and except as otherwise indicated The Company determines BESP for a product or service by considering multiple factors including, but not limited to, market conditions...

  • Page 130
    ...a quarterly basis. These awards are measured at their fair value on the date of issuance, and remeasured at each reporting period, until settlement. Warranty The Company provides for the estimated costs of product warranties at the time revenue is recognized. BlackBerry devices are generally covered...

  • Page 131
    ... in the first quarter of fiscal 2013 and is currently evaluating the impact that the adoption of this guidance will have on its results of operations, financial condition and disclosures. In May 2011, the FASB, as a result of work performed with the International Accounting Standards Board ("IASB...

  • Page 132
    ... well as the application of premiums and discounts in a fair value measurement. The new authoritative guidance is effective for interim and annual periods beginning after December 15, 2011. The Company will adopt the guidance in the first quarter of fiscal 2013 and is currently evaluating the impact...

  • Page 133
    ... bills/notes U.S. treasury bills/notes U.S. government sponsored enterprise notes Non-U.S. government sponsored enterprise notes Corporate notes/bonds Asset-backed securities Auction rate securities Other investments As at February 26, 2011 Bank balances Money market funds Bankers acceptances...

  • Page 134
    .... In valuing these securities, the Company used a multi-year investment horizon and considered the underlying risk of the securities and the current market interest rate environment. The Company has the ability and intent to hold these securities until such time that market liquidity returns to...

  • Page 135
    .... The Company also reviews and understands the inputs used in the valuation process and assesses the pricing of the securities for reasonableness. The fair values of money market funds were derived from quoted prices in active markets for identical assets or liabilities. For bankers acceptances, non...

  • Page 136
    ... from vendors for identical securities, or the market prices of similar securities adjusted for observable inputs such as differences in maturity dates, interest rates and credit ratings. The non-U.S. government sponsored enterprise notes held by the Company are primarily issued by investment banks...

  • Page 137
    ... fair values determined by the Company utilizing quoted prices from vendors for identical securities, or the market prices of similar securities adjusted for different observable inputs such as differences in swap rates and spreads, credit ratings, pricing changes relative to asset class, priority...

  • Page 138
    ... value on a recurring basis: As at March 3, 2012 Level 1 Level 2 Level 3 Total Assets Available-for-sale investments Money market funds Bankers acceptances Term deposits/certificates Commercial paper Non-U.S. treasury bills/notes U.S. treasury bills/notes U.S. government sponsored enterprise notes...

  • Page 139
    Research In Motion Limited Notes to the Consolidated Financial Statements In millions of United States dollars, except share and per share data, and except as otherwise indicated As at February 26, 2011 Level 1 Level 2 Level 3 Total Assets Available-for-sale investments Money market funds Bankers ...

  • Page 140
    ... 94 (250) 618 Property, plant and equipment, net Property, plant and equipment were comprised of the following: As at March 3, 2012 February 26, 2011 Cost Land Buildings, leaseholds and other BlackBerry operations and other information technology Manufacturing equipment, research and development...

  • Page 141
    ... than 6,000 patents and patent applications spanning wireless, wireless 4G, data networking, voice, internet and other patents. The majority of the Company's portion of the purchase consideration was recorded as intangible assets as at March 3, 2012. For the year ended March 3, 2012, amortization...

  • Page 142
    ...the determination of fair value of the Company. The Company's market capitalization was determined by multiplying the number of shares outstanding as at March 3, 2012 by the average closing market price of the Company's common shares over the preceding 5-day period. The Company used this duration in...

  • Page 143
    Research In Motion Limited Notes to the Consolidated Financial Statements In millions of United States dollars, except share and per share data, and except as otherwise indicated share price below book value. The result of this analysis concluded that the carrying value of the Company exceeded its ...

  • Page 144
    ... offers cloud-based services for storing, sharing, accessing and organizing digital content on mobile devices. During fiscal 2012, the Company purchased for cash consideration 100% of the shares of a company whose technology is being incorporated into an application on the BlackBerry PlayBook tablet...

  • Page 145
    ... CAD $131 million. The transaction closed on March 23, 2009. Certicom is a leading provider of cryptography required by software vendors and device manufacturers looking to protect the value of content, applications and devices with government approved security using Elliptic Curve Cryptography. The...

  • Page 146
    ... prior year's acquisition allocations: March 3, 2012 For the year ended February 26, 2011 February 27, 2010 Assets purchased Current assets Property, plant and equipment Other assets Customer relationship intangible Acquired technology In-process research and development Patents Deferred income tax...

  • Page 147
    Research In Motion Limited Notes to the Consolidated Financial Statements In millions of United States dollars, except share and per share data, and except as otherwise indicated (3) The Company has agreed to additional consideration contingent upon the achievement of certain agreed upon technology ...

  • Page 148
    Research In Motion Limited Notes to the Consolidated Financial Statements In millions of United States dollars, except share and per share data, and except as otherwise indicated March 3, 2012 For the year ended February 26, 2011 February 27, 2010 Income before income taxes: Canadian Foreign $1,...

  • Page 149
    ... temporary differences: As at March 3, 2012 February 26, 2011 Assets Non-deductible reserves Tax loss carryforwards Unrealized losses on financial instruments Other tax carryforwards Deferred income tax assets Liabilities Property, plant and equipment Research and development Unrealized gains on...

  • Page 150
    Research In Motion Limited Notes to the Consolidated Financial Statements In millions of United States dollars, except share and per share data, and except as otherwise indicated The Company determined that it is more likely than not that it can realize its deferred income tax assets. Accordingly, ...

  • Page 151
    ... Financial Statements In millions of United States dollars, except share and per share data, and except as otherwise indicated The Company recognizes interest and penalties related to unrecognized income tax benefits as interest expense that is netted and reported within investment income...

  • Page 152
    ...On June 16, 2011, RIM's Board of Directors approved a share repurchase program to commence any time after July 10, 2011 to purchase for cancellation through the facilities of the NASDAQ Stock Market or, subject to regulatory approval, by way of private agreement up to 5% of RIM's outstanding common...

  • Page 153
    ..., subject to certain exceptions for block purchases, based on the average daily trading volumes of the Company's shares on NASDAQ. Any purchases made by way of private agreement may be at a discount to the prevailing market price at the time of purchase, and would be subject to regulatory approval...

  • Page 154
    ... between the closing stock price of the Company's common shares on March 3, 2012 and the exercise price for in-the-money options) that would have been received by the option holders if all in-the-money options had been exercised on March 3, 2012. The intrinsic value of stock options exercised...

  • Page 155
    ... Consolidated Financial Statements In millions of United States dollars, except share and per share data, and except as otherwise indicated A summary of unvested stock options since February 26, 2011 is shown below: Options Outstanding Weighted Average Grant Date Fair Number Value (000's) Balance...

  • Page 156
    Research In Motion Limited Notes to the Consolidated Financial Statements In millions of United States dollars, except share and per share data, and except as otherwise indicated Treasury security for an equivalent period. In addition, the Company estimated the volatility of its common shares at the...

  • Page 157
    Research In Motion Limited Notes to the Consolidated Financial Statements In millions of United States dollars, except share and per share data, and except as otherwise indicated 10. COMMITMENTS AND CONTINGENCIES (a) Credit Facility On September 8, 2011, the Company has entered into a new $500 ...

  • Page 158
    ... Annual Information Form for additional unaudited information regarding the Company's legal proceedings, which is included in RIM's Annual Report on Form 40-F and "Legal Proceedings" in the Management's Discussion and Analysis ("MD&A") of financial condition and results of operations for fiscal 2012...

  • Page 159
    Research In Motion Limited Notes to the Consolidated Financial Statements In millions of United States dollars, except share and per share data, and except as otherwise indicated 11. COST OPTIMIZATION PROGRAM On June 16, 2011, the Company announced a cost optimization program (the "Cost Optimization...

  • Page 160
    Research In Motion Limited Notes to the Consolidated Financial Statements In millions of United States dollars, except share and per share data, and except as otherwise indicated 12. PRODUCT WARRANTY The Company estimates its warranty costs at the time of revenue recognition based on historical ...

  • Page 161
    ... and diluted earnings per share: March 3, 2012 For the year ended February 26, 2011 February 27, 2010 Net income for basic and diluted earnings per share available to common shareholders Weighted-average number of shares outstanding (000's) basic Effect of dilutive securities (000's) - stock-based...

  • Page 162
    ... share data, and except as otherwise indicated 14. COMPREHENSIVE INCOME The components of comprehensive income are shown in the following table: March 3, 2012 For the year ended February 26, 2011 February 27, 2010 Net income Net change in unrealized gains (losses) on available-for-sale investments...

  • Page 163
    ...Financial Statements In millions of United States dollars, except share and per share data, and except as otherwise indicated The components of unrealized gains (losses) on derivative instruments are as follows: As at March 3, 2012 February 26, 2011 Unrealized gains included in other current assets...

  • Page 164
    Research In Motion Limited Notes to the Consolidated Financial Statements In millions of United States dollars, except share and per share data, and except as otherwise indicated option contracts to hedge portions of these anticipated transactions to reduce the volatility on income associated with ...

  • Page 165
    ... Currency Option Contracts Currency Forward Contracts Currency Option Contracts $ $ $ $ $ $ 16 8 5 1 6 2 10 3 Revenue Revenue Cost of sales Cost of sales Selling, marketing and administration Selling, marketing and administration Research and development Research and development Location of Loss...

  • Page 166
    ... OCI into Income (Effective Portion) Currency Forward Contracts Currency Option Contracts Currency Forward Contracts Currency Forward Contracts Currency Forward Contracts $ $ $ $ $ (73) (1) 13 17 23 Revenue Revenue Cost of sales Selling, marketing and administration Research and development...

  • Page 167
    ... statement of operations for the year ended February 26, 2011: Location of Gain (Loss) Recognized in Income on Derivative Instruments Amount of Gain (Loss) in Income on Derivative Instruments Currency Forward Contracts Currency Option Contracts Credit Selling, marketing and administration Selling...

  • Page 168
    ... as a single reportable business segment. The Company's operations are substantially all related to the research, design, manufacture and sales of wireless communications products, services and software. Revenue, classified by major geographic segments in which our customers are located, was as...

  • Page 169
    Research In Motion Limited Notes to the Consolidated Financial Statements In millions of United States dollars, except share and per share data, and except as otherwise indicated March 3, 2012 For the year ended February 26, 2011 February 27, 2010 Revenue mix Devices Service Software Other $13,794...

  • Page 170
    Research In Motion Limited Notes to the Consolidated Financial Statements In millions of United States dollars, except share and per share data, and except as otherwise indicated 17. CASH FLOW INFORMATION (a) Cash flows resulting from net changes in working capital items are as follows: March 3, ...

  • Page 171
    ... Research In Motion Limited ("RIM" or the "Company") for the fiscal year ended March 3, 2012. The Consolidated Financial Statements are presented in U.S. dollars and have been prepared in accordance with United States generally accepted accounting principles ("U.S. GAAP"). All financial information...

  • Page 172
    ..." section of RIM's Annual Information Form, which is included in RIM's Annual Report on Form 40-F: Risks Related to the Company's Business and its Industry RIM's ability to enhance current products and services, or develop new products and services in a timely manner at competitive prices; intense...

  • Page 173
    Research In Motion Limited Management's Discussion and Analysis of Financial Condition and Results of Operations • • restrictions on import and use of RIM's products and services in certain countries due to encryption of the products and services; reliance on strategic alliances and ...

  • Page 174
    ... BlackBerry products and services are currently used by over 77 million customers around the world. Founded in 1984 and based in Waterloo, Ontario, RIM operates offices in North America, Europe, Asia Pacific and Latin America. RIM's common shares are listed on the NASDAQ Global Select Market (NASDAQ...

  • Page 175
    ... services. RIM generates hardware revenues from sales, primarily to carriers and distributors, of BlackBerry handheld wireless devices, which provide users with the ability to send and receive wireless messages and data. RIM's BlackBerry handheld wireless devices also incorporate a mobile phone, web...

  • Page 176
    ... service via a BES; (iii) maintenance and upgrades to software; and (iv) technical support. Revenues are also generated from sales of accessories, non-warranty repairs, BlackBerry App World sales and gains and losses on revenue hedge contracts. Cost Optimization Program and CORE On June 16, 2011...

  • Page 177
    ... by the end of fiscal 2013 based on current run rates and the Company expects initial savings to be driven primarily by optimizing the cost position of the Company's products and services, and improved overall resource effectiveness and organizational efficiency. Non-GAAP Financial Measures As...

  • Page 178
    ... of dollars. March 3, 2012 As at and for the Fiscal Year Ended February 26, Change February 27, 2011 2012/2011 2010 (in millions, except for share and per share amounts) Change 2011/2010 Revenue(1) Cost of sales(2,3,4) Gross margin Operating expenses Research and development(3) Selling, marketing...

  • Page 179
    ... statement of operations data expressed as a percentage of revenue for the periods indicated: March 3, 2012 February 26, 2011 For the Fiscal Year Ended February 27, Change 2010 2012/2011 Change 2011/2010 Revenue Cost of sales Gross margin Operating expenses Research and development Selling...

  • Page 180
    Research In Motion Limited Management's Discussion and Analysis of Financial Condition and Results of Operations Revenue for fiscal 2012 was $18.4 billion, a decrease of $1.5 billion, or 7.4%, from $19.9 billion in fiscal 2011. The number of BlackBerry devices sold decreased by approximately 3.3 ...

  • Page 181
    Research In Motion Limited Management's Discussion and Analysis of Financial Condition and Results of Operations Hardware Revenue from the sale of BlackBerry wireless hardware products (e.g., BlackBerry handheld devices and BlackBerry PlayBook tablets) is recognized when title has transferred to the...

  • Page 182
    Research In Motion Limited Management's Discussion and Analysis of Financial Condition and Results of Operations Other Revenue from the sale of accessories is recognized when title has transferred to the customer and all significant contractual obligations that affect the customer's final acceptance...

  • Page 183
    ...$6 per BlackBerry PlayBook tablet. If the Company's quarterly pricing reviews and internal control procedures indicate market facts and circumstances have changed, the Company's BESP for hardware products, services and unspecified software upgrade rights related to the Company's tablets could change...

  • Page 184
    Research In Motion Limited Management's Discussion and Analysis of Financial Condition and Results of Operations to rapid changes in technology and customer demand. The Company performs an assessment of inventory during each reporting period, which includes a review of, among other factors, demand ...

  • Page 185
    Research In Motion Limited Management's Discussion and Analysis of Financial Condition and Results of Operations Q4 BlackBerry 7 Inventory Provision During the fourth quarter of fiscal 2012, the Company recorded the Q4 BlackBerry 7 Inventory Provision consisting of pre-tax charges of approximately $...

  • Page 186
    Research In Motion Limited Management's Discussion and Analysis of Financial Condition and Results of Operations Intangible Assets Intangible assets with definite lives are stated at cost less accumulated amortization and the Company reviews these assets for impairment when events or changes in ...

  • Page 187
    ...the current average warranty return rate, measured against the device sales volumes currently under warranty as at March 3, 2012, would have resulted in adjustments to warranty expense and pre-tax income of approximately $41 million, or 3.5% of consolidated annual net income. Investments The Company...

  • Page 188
    Research In Motion Limited Management's Discussion and Analysis of Financial Condition and Results of Operations In determining the fair value of investments held, the Company primarily relies on an independent third party valuator for the fair valuation of securities. Pricing inputs used by the ...

  • Page 189
    Research In Motion Limited Management's Discussion and Analysis of Financial Condition and Results of Operations Significant judgment is required in evaluating the Company's uncertain tax positions and provision for income taxes. The Company uses a two-step process in assessing its uncertain tax ...

  • Page 190
    Research In Motion Limited Management's Discussion and Analysis of Financial Condition and Results of Operations In connection with its stock option review and the restatement of prior year financial statements, the Company applied judgment in choosing whether to revise measurement dates for prior ...

  • Page 191
    ...in the first quarter of fiscal 2013 and is currently evaluating the impact that the adoption of this guidance will have on its results of operations, financial condition and disclosures. In May 2012, the FASB, as a result of work performed with the International Accounting and Standards Board ("IASB...

  • Page 192
    Research In Motion Limited Management's Discussion and Analysis of Financial Condition and Results of Operations Results of Operations - Fiscal 2012 Compared to Fiscal 2011 and Fiscal 2010 Fiscal year ended March 3, 2012 compared to fiscal year ended February 26, 2011 Revenue Revenue for fiscal 2012...

  • Page 193
    ... of the market, as well as a delay in the release of BlackBerry PlayBook OS 2.0 software until February 2012. During the second half of fiscal 2012, the Company increased its promotional activity to encourage sell-through of the BlackBerry PlayBook tablets. Service revenue increased by $0.9 billion...

  • Page 194
    Research In Motion Limited Management's Discussion and Analysis of Financial Condition and Results of Operations Other revenue, which includes non-warranty repairs, accessories, BlackBerry App World and gains and losses on revenue hedging instruments, decreased by $223 million to $237 million in ...

  • Page 195
    ...fiscal 2012 as a percentage of revenue increased by 6.5% to 27.6% of revenue compared to fiscal 2011. Research and Development Expenses Research and development expenditures consist primarily of salaries and benefits for technical personnel, new product development costs, travel, office and building...

  • Page 196
    ... 2012. Cost of sales Amortization expense relating to certain property, plant and equipment and intangible assets employed in the Company's manufacturing operations and BlackBerry service operations increased by $463 million to $952 million for fiscal 2012 compared to $489 million for fiscal 2011...

  • Page 197
    ... of these conditions and their potential impact on the Company's share price performance or control premium applicable to the Company. A sustained decline in the Company's performance, the Company's market capitalization and future changes to the Company's assumptions and estimates used in the...

  • Page 198
    Research In Motion Limited Management's Discussion and Analysis of Financial Condition and Results of Operations Investment Income Investment income increased by $13 million to $21 million in fiscal 2012 from $8 million in fiscal 2011. Investment income in fiscal 2011 includes $17 million in ...

  • Page 199
    ... 16, 2011, the Company's Board of Directors approved a share repurchase program to commence any time after July 10, 2011 to purchase for cancellation through the facilities of the NASDAQ Stock Market or, subject to regulatory approval, by way of private agreement up to 5% of RIM's outstanding common...

  • Page 200
    ... the Company's increase in net new BlackBerry subscriber accounts since the end of fiscal 2010. Software revenue includes fees from licensed BES software, CALs, technical support, maintenance and upgrades. Software revenue increased $35 million, or 13.5%, to $294 million in fiscal 2011 from...

  • Page 201
    Research In Motion Limited Management's Discussion and Analysis of Financial Condition and Results of Operations Operating Expenses The table below presents a comparison of research and development, selling, marketing and administration, amortization and litigation expenses for fiscal 2011 compared ...

  • Page 202
    Research In Motion Limited Management's Discussion and Analysis of Financial Condition and Results of Operations Research and Development Expenses Research and development expenditures increased by $386 million to $1.4 billion, or 6.8% of revenue, in fiscal 2011, compared to $965 million, or 6.5% of...

  • Page 203
    ... property, plant and equipment and intangible asset additions made during fiscal 2011. Cost of sales Amortization expense relating to certain property, plant and equipment and certain intangible assets employed in the Company's manufacturing operations and BlackBerry service operations increased...

  • Page 204
    ... Motion Limited Management's Discussion and Analysis of Financial Condition and Results of Operations Income Taxes For fiscal 2011, the Company's income tax expense was $1.2 billion, resulting in an effective tax rate of 26.6% compared to income tax expense of $809 million and an effective tax rate...

  • Page 205
    Research In Motion Limited Management's Discussion and Analysis of Financial Condition and Results of Operations On November 4, 2009, the Company's Board of Directors authorized the repurchase of common shares up to an authorized limit of $1.2 billion (the "2010 Repurchase Program"). Pursuant to the...

  • Page 206
    ... three months ended March 3, 2012 and February 26, 2011: For the Three Months Ended Change Q4 Fiscal 2012/2011 March 3, 2012 February 26, 2011 (in millions, except for share and per share amounts) Revenue Cost of sales Gross margin Operating expenses Research and development Selling, marketing and...

  • Page 207
    ...forth in the following table: For the Three Months Ended March 3, 2012 February 26, 2011 Change Q4 Fiscal 2012/2011 Millions of BlackBerry handheld devices sold Millions of BlackBerry PlayBook tablets sold Revenue (in millions) Hardware Service Software Other 11.1 0.5 $2,866 1,142 80 102 $4,190 68...

  • Page 208
    Research In Motion Limited Management's Discussion and Analysis of Financial Condition and Results of Operations Service revenue increased by $244 million, or 27.2%, to $1.1 billion, or 27.3% of consolidated revenue in the fourth quarter of fiscal 2012, compared to $898 million, or 16.2% of ...

  • Page 209
    ... of BlackBerry handheld devices shipped and a shift in the mix of BlackBerry handheld devices sold during the fourth quarter of fiscal 2012, which were weighted towards inlife products with lower average selling prices and gross margins. This decrease is partially offset by higher service revenue as...

  • Page 210
    ... Limited Management's Discussion and Analysis of Financial Condition and Results of Operations For the Three Months Ended (in millions) November 26, 2011 % of Revenue March 3, 2012 % of Revenue February 26, 2011 % of Revenue Revenue Operating expenses Research and development Selling, marketing...

  • Page 211
    ... property, plant and equipment and intangible asset additions made during fiscal 2012. Cost of sales Amortization expense relating to certain property, plant and equipment and certain intangible assets employed in the Company's manufacturing operations and BlackBerry service operations increased...

  • Page 212
    ... of these conditions and their potential impact on the Company's share price performance or control premium applicable to the Company. A sustained decline in the Company's performance, the Company's market capitalization and future changes to the Company's assumptions and estimates used in the...

  • Page 213
    ... gross margin, resulting from a lower volume of BlackBerry handheld devices shipped and a shift in the mix of BlackBerry handheld devices sold during the fourth quarter of fiscal 2012, which were weighted towards in-life products with lower average selling prices and gross margins. The decrease was...

  • Page 214
    ... Company has also commenced the CORE initiative in the fourth quarter of fiscal 2012 which includes, among other things, a comprehensive review of product management and the number of SKUs offered, the realization of supply chain and bill of material efficiencies, marketing and advertising spending...

  • Page 215
    ... In Motion Limited Management's Discussion and Analysis of Financial Condition and Results of Operations Fourth Quarter Fiscal Year 2012 Fiscal Year 2011 Second Third Fourth First Second Third Quarter Quarter Quarter Quarter Quarter Quarter (in millions, except per share data) First Quarter Revenue...

  • Page 216
    ... out below: For the Fiscal Year Ended (in millions) March 3, February 26, 2011 2012 Net cash flows provided by (used in): Operating activities Investing activities Financing activities Effect of foreign exchange gain (loss) on cash and cash equivalents Net increase in cash and cash equivalents 46...

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    ...3, 2012, cash flows used in investing activities were $3.0 billion and included property, plant and equipment additions of $902 million, intangible asset additions of $2.2 billion, and business acquisitions of $226 million, offset by cash flows provided by transactions involving the proceeds on sale...

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    ..., as well as agreements with third parties for the use of intellectual property, software, messaging services and other BlackBerry related features, as well as intangible assets associated with business acquisitions. Business acquisitions during fiscal 2012 related to the purchase of a company whose...

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    Research In Motion Limited Management's Discussion and Analysis of Financial Condition and Results of Operations Lehman Brothers International (Europe) Since March 1, 2005, the Company has maintained an investment account with Lehman Brothers International (Europe) ("LBIE"). As of September 30, 2008...

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    Research In Motion Limited Management's Discussion and Analysis of Financial Condition and Results of Operations Aggregate Contractual Obligations The following table sets out aggregate information about the Company's contractual obligations and the periods in which payments are due as at March 3, ...

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    ..., purported class actions and other claims in the normal course of business) and may be subject to additional claims either directly or through indemnities against claims that it provides to certain of its partners and customers. In particular, the industry in which the Company competes has many...

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    Research In Motion Limited Management's Discussion and Analysis of Financial Condition and Results of Operations On May 13, 2010, FlashPoint filed a complaint with the U.S. International Trade Commission ("ITC") against the Company, as well as three other defendants, alleging infringement of U.S. ...

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    Research In Motion Limited Management's Discussion and Analysis of Financial Condition and Results of Operations On August 6, 2010, Spansion LLC filed a second complaint with the ITC against Samsung and other respondents, including the Company, which use Samsung flash memory, alleging infringement ...

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    Research In Motion Limited Management's Discussion and Analysis of Financial Condition and Results of Operations On May 5, 2009, Fractus, S.A. ("Fractus") filed a lawsuit against the Company and eight other defendants in the U.S. District Court for the Eastern District of Texas alleging infringement...

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    ... against the Company and 16 other defendants alleging infringement of U.S. Patent No. 5,663,757. This patent is generally directed to software controlled multi-mode interactive TV. The complaint seeks an injunction and money damages. The claim construction hearing is scheduled for May 3, 2013, and...

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    ...in Israel, Pelephone Communications Limited and Partner Communications Company Limited. Luzzatto accused various BlackBerry handsets of infringing Israeli Patent No. 121 225 that is generally directed to use of customized ringtones. Pursuant to Master Supply Agreement indemnification provisions, the...

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    Research In Motion Limited Management's Discussion and Analysis of Financial Condition and Results of Operations On March 11, 2011, OGMA, LLC ("OGMA") filed a lawsuit against the Company as well as 13 other defendants in the U.S. District Court for the Eastern District of Texas (Marshall Division). ...

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    Research In Motion Limited Management's Discussion and Analysis of Financial Condition and Results of Operations On March 30, 2011, H-W Technology L.C. ("H-W") filed a lawsuit against the Company as well as nineteen other defendants in the U.S. District Court for the Northern District of Texas (...

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    ... directed towards navigating media playlists. The complaint sought an injunction and money damages. The Company and Personal Audio, LLC settled all outstanding litigation with an agreement having an effective date of December 9, 2011 for an amount immaterial to the Consolidated Financial Statements...

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    Research In Motion Limited Management's Discussion and Analysis of Financial Condition and Results of Operations On September 12, 2011, WiAV Networks, LLC filed a lawsuit against the Company and one other defendant in the U.S. District Court for the Northern District of Texas alleging infringement ...

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    Research In Motion Limited Management's Discussion and Analysis of Financial Condition and Results of Operations On December 2, 2011, Garnet Digital, LLC ("Garnet Digital") filed a lawsuit against the Company in the U.S. District Court for the Eastern District of Texas (Tyler Division) along with 31...

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    ... filed the Consolidated Amended Class Action Complaint, alleging that during the period from December 16, 2010 through June 16, 2011, the Company and certain of its officers made materially false and misleading statements regarding the Company's financial condition and business prospects, and seek...

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    Research In Motion Limited Management's Discussion and Analysis of Financial Condition and Results of Operations In December 2011, the Company was served with four purported class actions relating to third party (Carrier IQ) recording software allegedly installed on smartphones. The Company believes...

  • Page 234
    ... terms of numbers, sales and accounts receivable volumes, and in some instances, new or significantly increased credit limits. The Company, in the normal course of business, monitors the financial condition of its customers and reviews the credit history of each new customer. The Company establishes...

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    Research In Motion Limited Management's Discussion and Analysis of Financial Condition and Results of Operations investment and the Company's ability and intent to hold the debt securities to maturity. During fiscal 2011, the Company recorded an other-than-temporary impairment charge on its auction ...

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    ... Act as a process designed by, or under the supervision of, the Company's principal executive and principal financial officers and effected by the Company's Board of Directors, management and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the...

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    Research In Motion Limited Management's Discussion and Analysis of Financial Condition and Results of Operations Based on this assessment, management believes that, as of March 3, 2012, the Company's internal control over financial reporting was effective. The Company's independent auditors have ...

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    ... this Annual Report Form 40-F of Research In Motion Limited [the "Company"] for the year ended March 3, 2012 of our reports dated April 9, 2012 with respect to the consolidated financial statements of the Company included herein, and the effectiveness of internal control over financial reporting. We...

  • Page 239
    ..., process, summarize and report financial information; and Any fraud, whether or not material, that involves management or other employees who have a significant role in the issuer's internal control over financial reporting. /s/ Thornsten Heins Name: Thorsten Heins Title: Chief Executive Officer...

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    ...record, process, summarize and report financial information; and Any fraud, whether or not material, that involves management or other employees who have a significant role in the issuer's internal control over financial reporting. /s/ Brian Bidulka Name: Brian Bidulka Title: Chief Financial Officer...

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    ... the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant. /s/ Thornsten Heins Name: Thorsten Heins Title: Chief Executive Officer Date: April 9, 2012 /s/ Brian...

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    Exhibit 99.1 RIM Code of Business Standards and Principles

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    ... conducting business for RIM, members of the board of directors, officers, employees and independent contractors of RIM must not only comply with applicable laws, but must also engage in and promote honest and ethical conduct in all that we do, including following our Code of Business Standards and...

  • Page 244
    ... Retaliation Performing with Integrity for RIM We Work to Protect RIM's Assets and Information We Avoid Conflict of Interest Situations Conducting Global Business with Our Customers and Business Partners with Integrity We Adhere to Competition Laws We Market Our Products with Integrity We Do Not...

  • Page 245
    We Speak with One Clear Voice Committing to Social Responsibility for Our World We Uphold Human Rights We Protect Our Environment We Give Back to Our Communities We Participate in the Political Process Responsibly Waivers of Our Code No Rights Created iii 22 25 25 25 26 26 28 29

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    ... most innovative work, but we also do it with pride and integrity. This makes an impression on our colleagues, our customers, our investors, our business partners and our community. What is the result? SUCCESS. We Live Our Code Whether we are members of the board of directors, officers, employees or...

  • Page 247
    ... from the resources referred to in this Code. RIM Suppliers We seek out partners who share our vision of doing business the right way. This means we expect our suppliers to comply with the applicable laws and regulations of the countries in which they operate. In addition, our suppliers must conduct...

  • Page 248
    ... the information reported and to correct errors. Keep in mind that anonymous reports are more difficult for our Company to investigate, so whenever possible, you are encouraged to share your identity. RIM will investigate all reports promptly, thoroughly and fairly, and will take appropriate action...

  • Page 249
    ...some cases, pose serious security risks for our Company and our fellow employees. RIM assets and information, including connections to the Internet, should only be used for legitimate business purposes. At times, limited personal use of RIM assets, such as BlackBerry® smartphones, company e-mail or...

  • Page 250
    ...RIM Information Classification Directive available at http://go/security. You may also contact the Legal Department at [email protected]. The RIM Employee/Consultant Confidentiality and Intellectual Property Agreement you previously signed or acknowledged defines our shared duty to protect RIM...

  • Page 251
    ... agreements, please visit http://go/nda or contact the Legal Department at [email protected]. Q: Marcella, a Software Architect, travels frequently for her job. While at the airport awaiting her flight, she checks her email and returns phone calls on her pre-released BlackBerry smartphone...

  • Page 252
    ... board of directors. All other employees must obtain approval from the Chief Financial Officer, the Chief Legal Officer, or anyone he or she may designate. You can seek these approvals by disclosing a real or potential conflict of interest, by contacting the Legal Department at legalcompliance@rim...

  • Page 253
    ... to giving gifts to public officials. Q: Claudette works in sales and has regular contact with many RIM customers. She has recently closed a large deal with a new customer after a long contracting process. Since the customer has already agreed to do business with RIM, the customer doesn't see the...

  • Page 254
    ... good about RIM and the work we do here. Our Company understands that some of us may want to engage in outside activities. This includes participating on a board of directors or advisory board, conducting an outside business or engaging in part-time employment while working in our current position...

  • Page 255
    ... this information so that our Company can help us avoid potential conflicts. Corporate Opportunities RIM enables each of us to be successful. In return, it is our responsibility to help RIM be the best it can be. This means, in part, that we never take personal advantage of a business or investment...

  • Page 256
    ... has worked for RIM for many years in its procurement department. His wife, Annabelle, is about to make an investment in a company that is a current supplier to RIM. The investment will use up much of Richard's and Annabelle's savings. Does Richard have a responsibility to disclose this information...

  • Page 257
    ...to purchase quality materials that allow us to develop and distribute premium products. Our products are marketed and sold with honesty and conviction. Together with our valued partners, we promote, offer and deliver innovation on a global scale. We Adhere to Competition Laws RIM competes vigorously...

  • Page 258
    ...marketing, sales or purchasing responsibilities, or if you have contact with competitors, you should be particularly familiar with the applicable laws that pertain to your work. If you need further guidance, contact the Legal Department at [email protected]. Q: Grayson is attending an industry...

  • Page 259
    ... Bribes and Other Improper Payments RIM competes in the marketplace through the quality of our products, the skills of our people and our ability to provide goods and services at competitive prices. We do not "buy" business from public officials or other persons that we deal with in the course of...

  • Page 260
    ...As a global company, RIM has offices around the world that engage in a wide variety of activities including sales, marketing, research and development and manufacturing. In addition, we also deliver hardware, software, services and technical information around the world to our partners and customers...

  • Page 261
    ... nondisclosure agreements that we sign with our business partners or other third parties, just as we expect them to abide by ours. We must also never attempt to obtain confidential information by any improper means. While we value the experience of fellow team members who have previously worked for...

  • Page 262
    ..., partners, investors and suppliers. Our customers-as well as our own high standards-require that we have the best talent working together to innovate, make the right decisions, and deliver superior products and services. At RIM, we recognize that the ever-changing requirements of a diverse market...

  • Page 263
    ... and communities. We must all review this policy on an annual basis, as it forms the foundation of our Company's proactive approach to reducing injury and illness in the workplace, with the goal of optimizing employee health and safety. For more information, please refer to the Healthy@RIM program...

  • Page 264
    ... history Government-issued identification numbers Contact information Marital status Medical history Our Company is committed to protecting this information in accordance with relevant privacy laws. Additionally, if you obtain any personal information about a colleague as part of your work for RIM...

  • Page 265
    ... the financial condition of RIM and our internal controls is available to the RIM Audit and Risk Management Committee of the board of directors. To facilitate this, our Company has adopted the Handling Financial Complaints Guidelines, which informs us about how to make financial complaints, how...

  • Page 266
    ... Department at [email protected] immediately. We Avoid Insider Trading and Tipping Through our work at RIM, we may become aware of inside information about our Company or another company. Such "inside information" is not public, and may affect the value of RIM's or another company's securities...

  • Page 267
    ... responsibility for communicating with the investment community, regulators and the media. The primary spokespersons for our Company are the Co-Chief Executive Officers and other RIM personnel designated in our Corporate Disclosure Policy. From time to time, these individuals may designate others to...

  • Page 268
    ... in such networks it has been reviewed and approved in advance in accordance with the conflict of interest requirements of this Code. In addition, we are not permitted to engage in any other form of external consultation as it relates to RIM, the wireless communications industry or related...

  • Page 269
    ... Disclosure Policy and Social Media Engagement Policy. Q: Lindsay is a market analyst at RIM. A leading expert network has recently approached her to share her insight on the wireless industry. Lindsay thinks this is a great opportunity to make connections and increase her public profile. As part of...

  • Page 270
    ... information, seek guidance from your Organizational Development Business Partner or the Legal Department at [email protected]. We Protect Our Environment We seek to comply with all applicable environmental laws, regulations and permit conditions. We also use environmentally sound practices...

  • Page 271
    ... and work, and supports our proactive volunteering of our time and efforts. RIM also believes in giving back to the local, national and global communities in which we operate. Our Company's primary corporate philanthropy focuses on outreach programs to students in science, engineering and business...

  • Page 272
    ... on expense reports or otherwise seek reimbursement from RIM for political contributions or expenses. If you are involved in making decisions regarding political contributions for RIM or as authorized by RIM, consult our Prevention of Improper Payments Policy for more information on obtaining...

  • Page 273
    ... would like to seek a waiver of this Code, you must make full disclosure of your particular circumstances in writing to the Chief Financial Officer or Chief Legal Officer for approval in advance of any action. Officers or members of the board of directors who believe that a waiver is necessary must...

  • Page 274
    ... Rights Created Please note that our Code is a statement of RIM's fundamental business standards, principles, policies and procedures. It seeks to help us understand the ethical behavior expected of all of us-members of the board of directors, officers, employees and independent contractors alike-in...