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¨
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REGISTRATION STATEMENT PURSUANT TO SECTION 12 OF THE SECURITIES EXCHANGE ACT OF 1934
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x
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ANNUAL REPORT PURSUANT TO SECTION 13(a) OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the fiscal year ended February 28, 2019
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Commission File Number 1-38232
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Ontario
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7372
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Not Applicable
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(Province or other Jurisdiction
of Incorporation or Organization)
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(Primary Standard Industrial
Classification Code Number)
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(I.R.S. Employer
Identification No)
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Title of each class
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Name of each exchange where registered
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Common Shares, without par value
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Toronto Stock Exchange
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Common Shares, without par value
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New York Stock Exchange
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x
Annual information form
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x
Audited annual financial statements
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A.
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Disclosure Controls and Procedures
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B.
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Management’s Annual Report on Internal Control Over Financial Reporting
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C.
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Attestation Report of the Registered Public Accounting Firm
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D.
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Changes in Internal Control Over Financial Reporting
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E.
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Notice of Pension Fund Blackout Period
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F.
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Audit Committee Financial Expert
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G.
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Code of Ethics
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H.
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Principal Accountant Fees and Services
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I.
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Off-Balance Sheet Arrangements
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J.
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Tabular Disclosure of Contractual Obligations
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K.
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Identification of Audit Committee
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L.
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Critical Accounting Estimates
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M.
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Interactive Data File
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N.
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Mine Safety
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A.
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Undertaking
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B.
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Consent to Service of Process
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BLACKBERRY LIMITED
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||
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Date: April 5, 2019
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By:
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/s/ Steven Capelli
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Name:
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Steven Capelli
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Title:
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Chief Financial Officer
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Exhibit
No.
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Document
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1.1
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1.2
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1.3
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23.1
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31.1
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32.1
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101
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Interactive Data File.
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•
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the Company’s plans, strategies and objectives, including the anticipated benefits of its strategic initiatives and its intentions to grow revenue and increase and enhance its product and service offerings;
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•
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the Company’s expectations regarding the generation of revenue and margin from its software, services and other technologies, including its intellectual property and brand assets;
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•
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the Company’s intention to maintain its leadership position and increase its market share in the enterprise endpoint security and communications market; and
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•
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the Company’s intention to pursue growth in select international markets.
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Name of Subsidiary
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Jurisdiction of Incorporation or Organization
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BlackBerry Corporation
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Delaware, U.S.A.
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BlackBerry UK Limited
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England and Wales
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Cylance Inc.
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Delaware, U.S.A.
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Good Technology Corporation
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Delaware, U.S.A.
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QNX Software Systems Limited
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Ontario, Canada
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•
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Completed the acquisition of Cylance Inc. (“Cylance”), an artificial intelligence and cybersecurity leader, for $1.4 billion in cash, plus the assumption of unvested employee incentive awards. The acquisition of Cylance was considered a “significant acquisition”. The Company will file a business acquisition report in respect of the acquisition, as required.
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•
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Announced the development of BlackBerry Spark, the Company’s new Enterprise of Things platform integrating the Company’s endpoint management and embedded software technology to enable secure communication and collaboration between smart endpoints;
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•
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Recognized for #1 Global Automotive Infotainment OS marketshare by Strategy Analytics;
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•
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Recognized as a leader for the second year in a row in the IDC MarketScape: Worldwide Enterprise Mobility Management Software 2018 Vendor Assessment;
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•
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Launched three new automotive software products certified to ISO 26262, the automotive industry’s functional safety standard: BlackBerry’s QNX Hypervisor for Safety, QNX Platform for ADAS 2.0, and QNX OS for Safety 2.0, enabling automakers to accelerate development timelines and reduce cost;
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•
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Announced that BlackBerry QNX software is embedded in the advanced driver assistance system, digital instrument clusters, connectivity modules, handsfree systems or infotainment systems of more than 120 million cars on the road;
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•
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Launched a new ransomware recovery capability within BlackBerry Workspaces that allows organizations to quickly recover from cyberattacks;
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•
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Launched QNX OS Medical 2.0, a real-time operating system for use in the development of secure medical devices;
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•
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Launched a quantum-resistant code signing server to allow software to be digitally signed using a scheme that will be difficult to breach with a quantum computer;
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•
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Announced a new Security Credential Management System service based on BlackBerry’s Certicom technology to help the private and public sectors come together to accelerate the development of Smart Cities and Intelligent Transportation Systems;
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•
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Became a HIMSS Analytics Certified Consultant to help guide healthcare organizations through the new HIMSS Infrastructure Adoption Model maturity model;
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•
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Launched QNX Platform for Digital Cockpits, the world’s first digital cockpit solution to allow automakers to combine customer experience with safety;
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•
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Launched BlackBerry Secure feature packs for Enterprise of Things device manufacturers to securely build smart products; and
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•
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Recognized for BlackBerry Cylance’s leadership in five categories of the 2019 Cybersecurity Excellence Awards: Best Cybersecurity Company, Most Innovative Cybersecurity Company, Endpoint Detection and Response, Endpoint Security, and Best Cybersecurity Podcast.
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•
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Entered into a partnership with Microsoft Corp. to offer enterprises BlackBerry Enterprise Bridge, a solution that integrates BlackBerry’s expertise in mobility and security with Microsoft’s cloud and productivity products;
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•
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Entered into a multi-year agreement with Jaguar Land Rover to collaborate and develop technology for the automotive manufacturer’s next-generation vehicles;
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•
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Collaborated with the Government of Canada to modernize their operations centers with BlackBerry AtHoc during G7 ministerial meetings and the 2018 G7 Summit;
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•
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Joined the OmniAir Consortium as an executive member to help advance the testing, certification, and deployment of technologies for connected vehicles and intelligent transportation systems;
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•
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Signed a BlackBerry Secure technology and brand licensing deal with Swiss consumer electronics maker Punkt Tronics AG;
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•
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Entered into a licensing agreement with Bullitt Group to embed BlackBerry cybersecurity technology into a range of highly-secure, rugged Caterpillar- and Land Rover-branded connected devices to be certified as “BlackBerry Secure”;
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•
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Entered into an arrangement with electric vehicle maker BYTON to use BlackBerry QNX technologies for the in-car experience within its first series of production vehicles;
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•
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Entered into a partnership agreement with DMC Insurance to develop insurance-based products and services using near real-time data from BlackBerry Radar to help trucking companies improve operations, increase safety and better manage the total cost of risk;
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•
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Entered into a multi-year strategic relationship with Samsung Electronics Co. Ltd. to collaborate on integrated solutions to accelerate the digital transformation of their shared business customers;
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•
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Entered into a global independent software vendor partnership with Check Point Software Technologies Ltd. to mitigate cybersecurity threats;
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•
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Entered into a partnership with L-SPARK to help small and medium-sized technology enterprises grow their businesses and bring new products to market using BlackBerry QNX technology;
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•
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Entered into a partnership with ONEBIO to use BlackBerry’s renowned carrier-grade network operation center to power a blockchain digital ledger provided by ONEBIO in order to create an ultra-secure global ecosystem for the storing and sharing of medical data;
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•
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Entered into a partnership with Mackenzie Innovation Institute to explore security and connectivity between the BlackBerry Spark platform and its ‘smart’ healthcare technology vision;
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•
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Melanoma Institute Australia selected BlackBerry Workspaces to enable researchers to securely share critical research data and patient records;
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•
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Expanded its partnerships with Android and PLDT Enterprise, through Smart Communications Inc. to provide MiCab, an online taxi-hailing platform, with an integrated, secure enterprise cloud solution that maintains data privacy, meets compliance and accelerates service delivery;
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•
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Entered into a partnership with Virginia Tech to help advance the Department of Mechanical Engineering’s connected and autonomous vehicle research and provide hands-on training with BlackBerry QNX software;
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•
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Expanded a partnership with Renesas to offer an integrated virtualization, functional safety and secure development environment for the Renesas R-Car system-on-chip devices;
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•
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Expanded its partner ecosystem by growing enterprise ISV partners by 25 percent in the last year, signing on 140 new channel partners to the BlackBerry Enterprise Partner Program in the fiscal second quarter, signing four new channel partners to the BlackBerry QNX Distributor & Value-Added Integrator programs, and adding AWS as a cloud partner; and
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•
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Announced a commitment by the Government of Canada to invest up to CAD$40 Million to support the Company’s investment in the development of BlackBerry QNX software for autonomous cars.
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•
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Achieved non-GAAP total Company software and services revenue of $857 million for the year, and U.S. GAAP total Company software and services revenue of $845 million for the year;
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•
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Achieved non-GAAP EPS of $0.24 per basic and diluted share in fiscal 2019, and U.S. GAAP EPS of $0.17 per basic share and $0.00 per diluted share in fiscal 2019; and
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•
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Achieved positive free cash flow for fiscal 2019, before considering the impact of restructuring and the impact of legal proceedings.
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•
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Ranked as a leader in the
Forrester Wave: EMM
report by Forrester Research, Inc., for the third consecutive year;
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•
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Launched QNX Hypervisor 2.0, a real-time Type 1 hypervisor solution that enables automotive platform developers to partition and isolate safety-critical environments from non-safety critical environments;
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•
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Launched BlackBerry Jarvis, a cloud-based static binary code-scanning tool that identifies cybersecurity vulnerabilities in software used in automobiles;
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•
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Expanded its asset tracking portfolio with the launch of Radar-L, a solution for flatbeds, chassis, containers, heavy machinery and other valuable transportation or non-powered assets;
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•
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Partnered with TCL Communication (“TCL”) and PT BB Merah Putih to introduce the BlackBerry-branded KEYone, Motion, and Aurora smartphones, offering the most secure Android smartphone experience;
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•
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Announced that the BlackBerry AtHoc cloud service for crisis communication received U.S. Federal Risk and Authorization Management Program (“FedRAMP”) authorization;
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•
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Launched AtHoc Account, a FedRAMP-authorized solution that automates personnel accountability and crisis communication processes by providing safety and availability status updates of people before, during and after a critical event;
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•
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Expanded SecuSUITE for Government availability to include the Canadian and U.S. governments; and
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•
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Introduced new cybersecurity consulting services aimed at enabling enterprise General Data Protection Regulation compliance and mitigating security risks in connected automobiles that threaten personal and public safety.
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•
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Entered into a strategic licensing agreement with Teletry, under which Teletry may sublicense a broad range of the Company’s patents to a majority of global smartphone manufacturers;
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•
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Entered into an agreement with Qualcomm Technologies, Inc. (“Qualcomm”), to optimize select Qualcomm hardware platforms with software from its wholly-owned subsidiary QNX Software Systems Limited (“BlackBerry QNX”) for use in virtual cockpit controllers, telematics, electronic control gateways, digital instrument clusters and infotainment systems, and to optimize the Company’s over-the-air (“OTA”) software and secure credential management services for use with select Qualcomm modems;
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•
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Announced a commercial partnership agreement with Delphi Automotive PLC (now Aptiv) to provide the operating system for its autonomous driving system;
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•
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Selected by Baidu to power Baidu’s Apollo autonomous driving open platform, CarLife infotainment platform and DuerOS artificial intelligence system;
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•
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Announced that NVIDIA Corporation selected BlackBerry QNX to be the software foundation for its functionally safe self-driving development platform;
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•
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Announced that, in partnership with DENSO Corporation, the Company has developed the world’s first integrated Human Machine Interface platform for automobiles;
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•
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Added numerous Gold-level partners to the BlackBerry Enterprise Partner Program, furthering the Company’s commitment to establishing and growing its global ecosystem of enterprise software partners and developers;
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•
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Entered into a reselling partnership with Fleet Complete for BlackBerry Radar and announced that Fleet Complete has chosen BlackBerry Radar for its BigRoad Freight program;
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•
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Announced a new partnership with Pana-Pacific to make BlackBerry Radar available to more than 2,800 commercial vehicle dealers in North America;
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•
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Signed its first white label licensing deal with Yangzhou New Telecom Science and Technology Company Ltd. (“NTD”), under which handsets developed by NTD and branded by original equipment manufacturers (“OEMs”), carriers and local smartphone brands will use BlackBerry’s device software and be marketed as “BlackBerry Secure”; and
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•
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Expanded its distribution channels through a new initiative with Allied World Assurance Company Holdings, AG, whereby Allied World will provide its cyber policyholders with direct access to the Company’s cybersecurity expertise through the BlackBerry SHIELD online self-assessment tool that will identify areas of weakness, after which the Company will work to improve the policyholders’ security posture by providing its cybersecurity products and services.
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•
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Achieved non-GAAP total Company software and services revenue of $782 million for the year, and U.S. GAAP total Company software and services revenue of $747 million for the year;
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•
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Achieved non-GAAP EPS of $0.14 per basic and diluted share in fiscal 2018, and U.S. GAAP EPS of $0.76 per basic share and $0.74 per diluted share in fiscal 2018;
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•
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Achieved positive free cash flow for fiscal 2018, before considering the costs of restructuring and transition from the hardware business as well as the net impact of arbitration awards and damages;
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•
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Resolved all amounts payable in connection with an arbitration with Qualcomm and received payment of $940 million from Qualcomm including interest and attorneys' fees, net of certain royalties due from the Company;
and
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•
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Commenced a normal course issuer bid to repurchase up to 31 million common shares of the Company (see also “Normal Course Issuer Bid”).
|
•
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Appointed Steven Capelli as Chief Operating Officer (in addition to Chief Financial Officer);
and
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•
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Appointed Mark Wilson as Chief Marketing Officer
.
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•
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Launched the Company’s comprehensive and fully integrated software platform to secure the Enterprise of Things;
|
•
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Partnered with TCL in its introduction of the BlackBerry-branded KEYone smartphone;
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•
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Launched DTEK60 and DTEK50 secure Android smartphones;
|
•
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Launched BlackBerry Radar, an end-to-end asset tracking system for trucking companies and private fleet operators to optimize asset utilization, reduce theft and reduce operational costs;
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•
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Announced plans to launch the BlackBerry Autonomous Vehicle Innovation Center (“AVIC”) to focus on developing secure software for connected cars and autonomous driving, while launching the BlackBerry QNX Software Development Platform for autonomous drive and connected cars;
|
•
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Introduced the Enterprise Partner Program to stimulate growth and drive profit for solutions providers, developers and training partners working with BlackBerry solutions;
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•
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Achieved common criteria National Information Assurance Partnership (“NIAP”) certification for BB 10.3.3;
|
•
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Announced plans to launch a Federal Cybersecurity Operations Center to support FedRAMP and other government security certification initiatives, led by former U.S. Coast Guard CIO, Rear Admiral Bob Day Jr. (retired); and
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•
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Entered the Communications Platform as a Service (“CPaaS”) market with the launch of the BlackBerry Messenger (“BBM”) Enterprise Software Development Kit (“SDK”), which will enable developers to integrate secure messaging, voice and video capabilities into applications and services.
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•
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Entered into agreements with TCL, Optiemus Infracom Ltd. (“Optiemus”) and PT BB Merah Putih under which the Company licensed its security software and service suite, as well as related brand assets, to enable these licensees to design, manufacture, sell and provide customer support for BlackBerry-branded handsets featuring the Company’s secure Android software;
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•
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Entered into a strategic alliance and licensing agreement with PT Elang Mahkota Teknologi Tbk (“Emtek”) to provide cross-platform consumer BBM users with access to enriched content and services; and
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•
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Entered into a non-exclusive agreement with Ford Motor Company for expanded use of the BlackBerry QNX OS, hypervisor and audio processing software as well as Certicom and other security software.
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•
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Reduced leverage through the redemption of the Company’s outstanding 6% convertible debentures (the “6% Debentures”) through the issuance of $605 million aggregate principal amount of 3.75% convertible debentures of the Company (the “3.75% Debentures”) (the “Debenture Refinancing”);
|
•
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Completed a normal course issuer bid under which the Company repurchased for cancellation approximately 12.6 million common shares;
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•
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Achieved positive adjusted EBITDA in each quarter of fiscal 2017; and
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•
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Achieved non-GAAP total Company software and services revenues of $687 million for the year, and U.S. GAAP total Company software and services revenues of $622 million for the year.
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•
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Appointed Steven Capelli as Chief Financial Officer.
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•
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Product Platform.
The Company’s core software and services offering is its end-to-end Enterprise of Things platform that comprises endpoint management capabilities, enterprise communication and collaboration software and safety-
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•
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Substantial Target Markets.
The Company leverages its expertise in endpoint security and management to capitalize on opportunities in growing segments of the Internet of Things, cybersecurity, connected transportation, healthcare, financial services and government markets. Through its products, the Company intends to provide enterprises, OEMs, Tier 1s and governments with the highest standard of safety and security.
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•
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Efficient Go-To-Market.
The Company’s sales strategy focuses solely on enterprise software, services and licensing. The Company continues to build its developer and channel partner programs to bolster the Company’s direct sales and marketing efforts and promote the growth of an Enterprise of Things ecosystem. The Company also licenses its brand and secure handset software and applications to select third-party manufacturers and others seeking the Company’s software expertise. See also “Sales, Marketing, Distribution and Customers”.
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•
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Operational Efficiency.
The Company optimizes its operations on an ongoing basis to enhance the efficiency of its software and services business and accelerate bringing new offerings to market.
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•
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Growth and Profitability.
The Company intends to drive revenue growth through its software and services portfolio and to achieve margins that are consistent with those of other enterprise software companies.
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•
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promote effective corporate governance and decision-making by enabling the consistent identification and evaluation of risk on a consolidated basis;
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•
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ensure that risks are managed proactively and appropriately in the context of the Company’s strategy and objectives;
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•
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support the development of internal controls;
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•
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facilitate the reliability and transparency of financial and operational reporting;
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•
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assist in compliance with laws, regulations, policies, and contracts; and
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•
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reduce harm to financial performance and safeguard the Company’s assets.
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•
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The first line of defense for managing risks resides with the management of each business unit. Risk exposures are identified and mitigated at a granular level through various ongoing management activities including business planning, operations management, reporting, and process improvement projects.
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•
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Oversight of business unit management is provided by the second line of defense, the Security Risk and Compliance Committee (“SRCC”), which meets at least quarterly and is supported by various compliance, security and control functions. The SRCC is composed of manager representatives from each major business group and provides strategic direction by defining key policies, identifying emerging risk trends, and sponsoring training.
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•
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The internal audit function comprises the third line of defense, providing independent assurance of the effectiveness of the Company’s risk management activities and internal controls related to (i) financial reporting and integrity and (ii) other areas of risk as assigned by the Audit and Risk Management Committee from time to time, including cybersecurity risk. The internal audit function may also review the governance structures and mandates of the first two lines of defense.
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•
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some or all of its confidentiality agreements will not be honoured;
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•
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third parties will independently develop equivalent technology or misappropriate the Company’s technology or designs;
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•
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disputes will arise with the Company’s strategic partners, customers or others concerning the ownership of intellectual property;
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•
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unauthorized disclosure or use of the Company’s intellectual property, including source code, know-how or trade secrets will occur; or
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•
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contractual provisions may not be enforceable.
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•
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adversely affect the Company’s relationships with its customers;
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•
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be time-consuming and expensive to evaluate and defend, including in litigation or other proceedings;
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•
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result in negative publicity for the Company;
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•
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divert management’s attention and resources;
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•
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cause product delays or stoppages;
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•
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subject the Company to significant liabilities;
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•
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require the Company to develop possible workaround solutions that may be costly and disruptive to implement; and
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•
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require the Company to cease certain activities or to cease selling its products and services in certain markets.
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•
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the Company’s ability to obtain additional debt financing may be limited;
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•
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a portion of the Company’s cash flow from operations or other capital resources will be dedicated to the payment of the principal of, and/or interest on, indebtedness, thereby reducing funds available for working capital, capital expenditures, strategic initiatives or other business purposes; and
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•
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the Company’s earnings under U.S. GAAP may be negatively affected to the extent that any indebtedness, such as the 3.75% Debentures, are accounted for by the Company at fair value and include embedded derivatives which fluctuate in value from period to period.
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•
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compliance with the laws of the United States, Canada and other countries that apply to the Company’s international operations, including import and export legislation, lawful access, and privacy, anti-corruption and consumer protection laws;
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•
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unexpected changes in foreign regulatory requirements;
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•
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reliance on third parties to establish and maintain foreign operations;
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•
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instability in economic or political conditions;
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•
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foreign exchange controls and cash repatriation restrictions;
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•
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tariffs and other trade barriers;
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•
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increased credit risk and difficulties in collecting accounts receivable;
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•
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potential adverse tax consequences;
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•
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uncertainties of laws and enforcement relating to the protection of intellectual property or secured technology;
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•
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litigation in foreign court systems;
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•
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cultural and language differences; and
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•
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difficulty in managing a geographically dispersed workforce.
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•
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failure to satisfy the Company’s requirements on a timely basis;
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•
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reduced ability to ensure product quality and reliability, and to monitor and manage quality controls;
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•
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reduced control over costs as third parties procure inventory to build or repair the Company’s products;
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•
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reduced control over the Company’s intellectual property; and
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•
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risk of bankruptcy or business interruption on the part of the manufacturer or repair partner.
|
(a)
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the 3.75% Debentures and the Guarantees;
|
(b)
|
Specified Senior Indebtedness in an aggregate principal amount at any one time outstanding not to exceed $550,000,000;
|
(c)
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Indebtedness in an aggregate principal amount at any one time outstanding not to exceed $450,000,000, comprising:
|
(i)
|
Indebtedness secured by a Purchase Money Security Interest including Capital Leases (as defined below);
|
(ii)
|
Indebtedness incurred in connection with a sale and leaseback of real property;
|
(iii)
|
Indebtedness incurred under a securitization or factoring of receivables;
|
(iv)
|
Indebtedness of any subsidiary acquired by the Company or its subsidiaries that existed prior to such acquisition and not incurred in contemplation of such acquisition;
|
(v)
|
Indebtedness incurred to finance insurance premiums;
|
(vi)
|
other Indebtedness (other than Specified Senior Indebtedness) provided that such Indebtedness shall be unsecured; or
|
(vii)
|
Indebtedness incurred to refinance any Indebtedness referred to in clauses (i) through (iv) above.
|
(a)
|
indebtedness of such person for monies borrowed or raised, including any indebtedness represented by a note, bond, debenture or other similar instrument of such person;
|
(b)
|
reimbursement obligations of such person arising from bankers’ acceptance, letters of credit or letters of guarantee or similar instruments;
|
(c)
|
indebtedness of such person for the deferred purchase price of property or services, other than for consumable non-capital goods and services purchased in the ordinary course of business, including arising under any conditional sale or title retention agreement, but excluding for greater certainty ordinary course accounts payable;
|
(d)
|
obligations of such person under or in respect of Capital Leases, synthetic leases, Purchase Money Security Interests or sale and leaseback transactions;
|
(e)
|
the aggregate amount at which shares in the capital of such person that are redeemable at fixed dates or intervals or at the option of the holder thereof may be redeemed; and
|
(f)
|
guarantees or liens granted by such person in respect of Indebtedness of another person;
|
(a)
|
Indebtedness referred to in paragraphs (a) and (b) of the definition of Indebtedness above;
|
(b)
|
renewals, extensions, restructurings, refinancings and refundings of any such Indebtedness; and
|
(c)
|
guarantees of any of the foregoing.
|
|
Common Shares – NYSE
|
|
Common Shares – TSX
|
||||||
Month
|
Price Range
(USD $)
|
|
Average Daily
Volume
|
|
Price Range
(CAD $)
|
|
Average Daily
Volume
|
||
March 2018
|
$11.48-$13.38
|
|
5,894,076
|
|
|
$14.79-$17.48
|
|
2,545,717
|
|
April 2018
|
$10.05-$11.42
|
|
4,445,478
|
|
|
$12.85-$14.70
|
|
1,794,662
|
|
May 2018
|
$10.32-$12.03
|
|
2,904,298
|
|
|
$13.32-$15.58
|
|
1,301,511
|
|
June 2018
|
$9.52-$12.55
|
|
5,244,615
|
|
|
$12.63-$16.27
|
|
2,115,305
|
|
July 2018
|
$9.46-$10.63
|
|
4,266,586
|
|
|
$12.34-$13.95
|
|
1,464,554
|
|
August 2018
|
$9.64-$11.04
|
|
3,615,299
|
|
|
$12.55-$14.30
|
|
1,480,374
|
|
September 2018
|
$9.67-$12.00
|
|
4,605,973
|
|
|
$12.73-$15.50
|
|
1,802,652
|
|
October 2018
|
$8.63-$11.75
|
|
4,939,302
|
|
|
$11.35-$15.04
|
|
2,054,440
|
|
November 2018
|
$8.23-$9.75
|
|
3,869,238
|
|
|
$10.88-$12.76
|
|
1,327,308
|
|
December 2018
|
$6.57-$9.00
|
|
5,711,596
|
|
|
$8.94-$11.85
|
|
2,237,269
|
|
January 2019
|
$6.87-$8.18
|
|
2,852,718
|
|
|
$9.28-$10.75
|
|
1,199,834
|
|
February 2019
|
$8.02-$8.81
|
|
2,513,881
|
|
|
$10.49-$11.65
|
|
1,169,003
|
|
Name and Residence
|
|
Current Position with Company
|
|
Principal Occupation During the Last Five Years (other than Current Position with Company)
|
John S. Chen
California, USA
|
|
Chief Executive Officer; Executive Chair/Director (since 2013)
|
|
|
Michael Daniels
(1)
Colorado, USA
|
|
Director (since 2014)
|
|
Chairman, TwoSix Labs, Inc. (2017 to present); Chairman, Logistics Management Institute (2011 to 2018); and Chairman, Invincea (2011 to 2017)
|
Timothy Dattels
California, USA
|
|
Director (since 2012)
|
|
Senior Partner, TPG Capital (current)
|
Richard Lynch
(1)
Pennsylvania, USA
|
|
Director (since 2013)
|
|
President, FB Associates, LLC (current)
|
Laurie Smaldone Alsup
(2)
New Jersey, USA
|
|
Director (since 2015)
|
|
Chief Scientific Officer and Chief Medical Officer, NDA Group (2016 to present); President and Chief Scientific Officer, PharmApprove (2011 to 2016
)
|
Barbara Stymiest, FCPA, FCA
(1)(2)
Ontario, Canada
|
|
Director (since 2007)
|
|
Corporate Director (current)
|
V. Prem Watsa
(1)
Ontario, Canada
|
|
Lead Director (since 2013)
(3)
|
|
Chief Executive Officer, Fairfax (current)
|
Wayne Wouters
(2)
Ontario, Canada
|
|
Director (since 2015)
|
|
Strategic and Policy Advisor, McCarthy Tétrault LLP (2015 to present); Clerk of the Privy Council of Canada (2009 to 2014)
|
Steven Capelli
California, USA
|
|
Chief Financial Officer
|
|
Chief Financial Officer and Chief Operating Officer, BlackBerry Limited (2017 to 2019); Corporate Director (2013 to 2016)
|
Randall Cook
California, USA
|
|
Chief Legal Officer and Corporate Secretary
|
|
General Counsel, Calypso Technology (2017 to 2018); Senior Vice President, General Counsel & Corporate Secretary, Advent Software (2002 to 2015)
|
Sai Yuen (Billy) Ho
California, USA
|
|
Executive Vice
President, Enterprise
Products and Value
Added Solutions
|
|
|
Stuart McClure
California, USA
|
|
President, BlackBerry Cylance
|
|
Co-founder, Chairman and Chief Executive Officer of Cylance Inc. (2012 to 2019)
|
Bryan Palma
California, USA
|
|
President and Chief Operating Officer
|
|
Senior Vice President and General Manager, Cisco Systems (2013 to 2019)
|
Nita White-Ivy California, USA
|
|
Executive Vice President, Human Resources
|
|
Chief People Officer, SAP SuccessFactors (2012 to 2013)
|
Mark Wilson
California, USA
|
|
Chief Marketing Officer
|
|
Senior Vice President, Marketing, BlackBerry Limited (2014 to 2017)
|
1
|
Member of the Compensation, Nomination and Governance Committee (Chair - V. Prem Watsa).
|
2
|
Member of the Audit and Risk Management Committee (Chair - Barbara Stymiest).
|
3
|
Mr. Watsa first joined the Company as a director in January 2012, but then resigned on August 13, 2013 in connection with the formation of the Special Committee to explore strategic alternatives and rejoined the Company as a director in November 2013.
|
a)
|
was subject to an order (as defined in National Instrument 51-102F2 of the Canadian Securities Administrators) that was issued while the director or executive officer was acting in the capacity as director, chief executive officer or chief financial officer; or
|
b)
|
was subject to an order that was issued after the director or executive officer ceased to be a director, chief executive officer, or chief financial officer, and which resulted from an event that occurred while that person was acting in the capacity as a director, chief executive officer, or chief financial officer.
|
a)
|
is, at the date of this AIF, or has been within 10 years before the date of this AIF, a director or executive officer of any company (including the Company) that, while that person was acting in that capacity, or within a year of that person ceasing to act in that capacity, became bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or was subject to or instituted any proceedings, arrangement or compromise with creditors or had a receiver, receiver manager or trustee appointed to hold its assets; or
|
b)
|
has, within the 10 years before this AIF, become bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency, or become subject to or instituted any proceedings, arrangement or compromise with creditors, or had a receiver, receiver manager or trustee appointed to hold the assets of the director, executive officer or shareholder.
|
•
|
the Agreement and Plan of Merger among BlackBerry Limited, BlackBerry Corporation, Cylance, Modena Merger Corp. and Fortis Advisors LLC dated November 16, 2018, providing for the acquisition of Cylance by the Company for a purchase price of $1.4 billion in cash plus the assumption of unvested employee equity awards. The Agreement and Plan of Merger is summarized in the Company’s material change report filed on SEDAR on November 26, 2018, which is incorporated by reference in this AIF; and
|
•
|
the Indenture providing for the issuance and conversion of the 3.75% Debentures, dated as of September 7, 2016, which has been filed on SEDAR, and the terms of which are summarized under “Description of Capital Structure - Convertible Debentures”.
|
|
1.
|
AUTHORITY
|
(1)
|
Make recommendations to the Board as to the selection of the firm of independent public accountants to audit the books and accounts of the Corporation and its subsidiaries for each fiscal year;
|
(2)
|
Review and approve the Corporation’s independent auditors’ annual engagement letter, including the proposed fees contained therein;
|
(3)
|
Review the performance of the Corporation’s independent auditors, including the lead partner, discuss the timing and process for implementing the rotation of the lead partner, and make recommendations to the Board regarding the replacement or termination of the independent auditors when circumstances warrant;
|
(4)
|
Oversee the independence of the Corporation’s independent auditors by, among other things:
|
(i)
|
requiring the independent auditors to deliver to the Committee on a periodic basis a formal written statement delineating all relationships between the independent auditors and the Corporation;
|
(ii)
|
reviewing and approving hiring policies concerning partners, employees and former partners and employees of the present and former independent auditors; and
|
(iii)
|
actively engaging in a dialogue with the independent auditors with respect to any disclosed relationships or services that may impact the objectivity and independence of the independent auditors and taking appropriate action to satisfy itself of the auditors’ independence;
|
(5)
|
Instruct the Corporation’s independent auditors that:
|
(i)
|
they are ultimately accountable to the Committee;
|
(ii)
|
they must report directly to the Committee; and
|
(iii)
|
the Committee is responsible for the appointment (subject to Board and shareholder approval), compensation, retention, evaluation and oversight of the Corporation’s independent auditors;
|
(6)
|
Review and pre-approve all audit and permitted non-audit services to be provided by the independent auditors to the Corporation, including tax services;
|
(1)
|
Review and accept, if appropriate, the annual audit plan of the Corporation’s independent auditors, including the scope of audit activities, and monitor such plan’s progress and results during the year;
|
(2)
|
Confirm through private discussions with the Corporation’s independent auditors and the Corporation’s management that no management restrictions are being placed on the scope of the independent auditors’ work;
|
(3)
|
Review the results of the year-end audit of the Corporation, including (as applicable):
|
(i)
|
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 representation letter, the “Memorandum Regarding Accounting Procedures and Internal Control” or similar memorandum prepared by the Corporation’s independent auditors, any other pertinent reports and management’s responses concerning such memorandum;
|
(ii)
|
the qualitative judgments of the independent auditors about the appropriateness, not just the acceptability, of accounting principles and financial disclosure practices used or proposed to be adopted by the Corporation and, particularly, about the degree of aggressiveness or conservatism of its accounting principles and underlying estimates;
|
(iii)
|
the selection and application of the Corporation’s critical accounting policies;
|
(iv)
|
the methods used to account for significant unusual transactions;
|
(v)
|
the effect of significant accounting policies in controversial or emerging areas for which there is a lack of authoritative guidance or consensus;
|
(vi)
|
management’s process for formulating sensitive accounting estimates and the reasonableness of these estimates;
|
(vii)
|
significant recorded and unrecorded audit adjustments;
|
(viii)
|
any material accounting issues among management, the internal audit function and the independent auditors; and
|
(ix)
|
other matters required to be communicated to the Committee under applicable auditing standards by the independent auditors;
|
(4)
|
Review the Corporation’s quarterly earnings press releases before they are disclosed to the public;
|
(5)
|
Review the Corporation’s interim financial statements and report thereon to the Board before they are approved by the Board and disclosed to the public;
|
(6)
|
Review with management and the Corporation’s independent auditors such accounting policies (and changes therein) of the Corporation, including any financial reporting issues which could have a material impact on the Corporation’s financial statements, as are deemed appropriate for review by the Committee prior to any year-end or quarterly filings with the SEC, the OSC or other regulatory body;
|
(1)
|
Require the members of the Corporation’s senior leadership team to identify and provide the Committee with a portfolio view of the major areas of risk facing the Corporation and management’s strategies to manage those risks, including (without limitation) risks related to cybersecurity and data privacy;
|
(2)
|
At least annually, review management’s risk appetite and evaluate the extent to which the Corporation’s risk profile and business planning are aligned with the risk appetite;
|
(3)
|
At least annually, review in light of the risk appetite, the Corporation’s enterprise risk management processes, including key policies and procedures for the effective identification, assessment, reporting, monitoring and control of the Corporation’s principal risks and the Corporation’s compliance with such policies and procedures;
|
(4)
|
Require, at least quarterly, management to update the Committee on any material or noteworthy changes relating to (1)-(3), immediately above, and the activities of the Corporation’s Risk Management Council;
|
(5)
|
Consult periodically with the Compensation, Nomination and Governance Committee on risk management matters within its purview;
|
(6)
|
Encourage an open and constructive risk dialogue between the Board and management on areas relating to risk management, and seek assurances from management on the effectiveness of risk management practices and controls;
|
(7)
|
Consider emerging industry and regulatory risk management issues and the possible impact on the Corporation;
|
(1)
|
Review the Committee’s level of involvement and interaction with the Corporation’s internal audit function, including the Committee’s line of authority over the internal audit function;
|
(2)
|
Review and advise on the appointment, replacement, reassignment, or dismissal of the leader of the internal audit function;
|
(3)
|
Review and approve the engagement of any firm of external advisors to support the internal audit function, including the fees thereof;
|
(4)
|
Review the resources, performance, effectiveness, degree of independence and objectivity of the internal audit function and the adequacy of its audit process, and approve changes to its charter;
|
(5)
|
Review internal audit reports, as well as management’s response to such reports, and review and approve the annual internal audit plan, including the proposed audit universe, priorities, resourcing, and, on a quarterly basis, the status of the audit plan and the then current assessment and management of risks subject to internal audit review;
|
(6)
|
Review the effectiveness of the internal audit function’s methodology relating to its assessment of risks subject to internal audit purview, including the factors considered and the relative weighting of such factors, and consider changes in management’s assessment of such risks;
|
(7)
|
Review with management the progress and results of all internal audit projects, approve procedures for implementing accepted recommendations, and, when deemed necessary or appropriate by the Committee,
direct the Corporation’s Chief Executive Officer to assign additional audit projects to the leader of the internal audit function;
|
(8)
|
Meet privately with the leader of the internal audit function
to discuss any areas of concern, and to confirm that (i) significant issues, including any material disagreements with the senior leadership team, are brought to the Committee’s attention and (ii) the integrity of the Company’s internal control and management information systems are satisfactory;
|
(1)
|
Review the adequacy and effectiveness of the Corporation’s accounting and internal control policies and procedures through inquiry and discussions with the Corporation’s independent auditors and management of the Corporation;
|
(2)
|
Review with management the Corporation’s administrative, operational and accounting internal controls and internal control over financial reporting, including the controls, security and functionality of the financial information technology systems, and evaluate whether the Corporation is operating in accordance with its prescribed policies, procedures and codes of conduct;
|
(3)
|
Review with management and the independent auditors any reportable conditions and material weaknesses affecting the Corporation’s internal control and financial reporting;
|
(4)
|
Receive periodic reports from the Corporation’s independent auditors and management of the Corporation to assess the impact on the Corporation of significant accounting or financial reporting developments proposed by the Chartered Professional Accountants Canada, the American Institute of Certified Public Accountants, the Financial Accounting Standards Board, the SEC, the OSC or other regulatory body, or any other significant accounting or financial reporting related matters that may have a bearing on the Corporation;
|
(5)
|
Establish and maintain free and open means of communication between and among the Board, the Committee, the Corporation’s independent auditors, the internal audit function and management;
|
(1)
|
In addition to meeting regularly with the general counsel, meet as needed with outside counsel to review legal and regulatory matters, including inquiries from governmental and regulatory authorities and any matters that may have a material impact on the financial statements of the Corporation;
|
(2)
|
Review the Corporation’s policies relating to the avoidance of conflicts of interest and review and approve related party transactions as required by the Corporation’s Code of Business Standards and Principles and applicable laws and listing rules, as well as policies and procedures with respect to officers’ expense accounts and perquisites. The Committee shall consider the results of any review of these policies and procedures by the Corporation’s independent auditors;
|
(3)
|
Oversee, review, and periodically update the Corporation’s Code of Business Standards and Principles and the Corporation’s system to monitor compliance with and enforcement of the Code of Business Standards and Principles;
|
(4)
|
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;
|
(5)
|
Oversee areas under the responsibility of management, including the examination of securities trading by insiders;
|
(6)
|
Conduct or authorize investigations into any matters within the Committee's scope of responsibilities, including retaining outside counsel or other consultants or experts for this purpose;
|
(7)
|
Establish procedures for the receipt, retention and treatment of complaints received by the Corporation regarding accounting, internal controls or auditing matters and the confidential, anonymous submission by employees of the Corporation of concerns regarding questionable accounting or auditing matters; and
|
(8)
|
Perform such additional activities, and consider such other matters, within the scope of its responsibilities, as the Committee or the Board deems necessary or appropriate.
|
(1)
|
exercise reasonable diligence in gathering and considering all material information;
|
(2)
|
remain flexible, so that it may be in a position to best react or respond to changing circumstances or conditions;
|
(3)
|
understand and weigh alternative courses of conduct that may be available;
|
(4)
|
focus on weighing the benefit versus harm to the Corporation and its shareholders when considering alternative recommendations or courses of action;
|
(5)
|
if the Committee deems it appropriate, secure independent expert advice and understand the expert’s findings and the basis for such findings, including retaining independent counsel, accountants or others to assist the Committee in fulfilling its duties and responsibilities; and
|
(6)
|
provide management, the Corporation’s independent auditors and the leader of the internal audit function with appropriate opportunities to meet privately with the Committee.
|
1.
|
Provide overall leadership to enhance the effectiveness of the Committee, including:
|
a.
|
Recommend and oversee the appropriate structure, composition, membership, and activities delegated to the Committee;
|
b.
|
Chair all meetings of the Committee at which the Chair is in attendance and manage the meeting agenda so that appropriate time and consideration can be given to the agenda items;
|
c.
|
Lead discussions, foster candor among meeting participants and encourage Committee members to ask questions of senior management, its advisors and advisors of the Committee, and express viewpoints during meetings;
|
d.
|
Schedule and set the agenda for Committee meetings with input from other Committee members, the Committee’s advisors, the Executive Chair and the Lead Director of the Board of Directors, the CEO, the Corporate Secretary and senior management as appropriate and consider, on a proactive basis, emerging matters that should be addressed by the Committee;
|
e.
|
Facilitate the timely, accurate and proper flow of information to and from the Committee and, with input from Committee members, maintain an open dialogue with the Corporate Secretary regarding the timeliness, quantity, quality and completeness of information provided by senior management and advisors to the Committee;
|
f.
|
Arrange for management, internal personnel, external advisors, and others to attend and present at Committee meetings as appropriate;
|
g.
|
Arrange sufficient time during Committee meetings to fully discuss agenda items and, as appropriate, defer matters that require more information or time for discussion to a subsequent meeting;
|
h.
|
In cooperation with the Corporate Secretary and/or the Assistant Corporate Secretary, identify, monitor and report back to the Committee on the status of matters requiring action by senior management or the Committee following the meeting with a view to ensuring that matters are acted upon in a timely manner;
|
i.
|
Review draft minutes of Committee meetings prior to their presentation to the Committee for approval and ensure that minutes are reviewed and approved by the Committee in accordance with this Charter;
|
j.
|
Carry out the responsibilities and duties of the Committee, as outlined in this Charter, and
|
k.
|
Review this Charter and duties and responsibilities with Committee members at least annually.
|
2.
|
Foster responsible decision-making by the Committee and its individual members.
|
3.
|
Provide for in-camera sessions at all scheduled meetings of the Committee without management present and, as appropriate, without the Corporate Secretary present.
|
4.
|
Following each meeting of the Committee, report to the Board of Directors on the activities, findings and any recommendations of the Committee.
|
5.
|
Perform such other duties, within the scope of the Committee’s duties and responsibilities, as may be assigned by the Board of Directors.
|
|
/s/ John S. Chen
|
Waterloo, Ontario
|
John S. Chen
|
April 5, 2019
|
President & CEO
|
|
As at
|
||||||
|
February 28, 2019
|
|
February 28, 2018
|
||||
Assets
|
|
|
|
||||
Current
|
|
|
|
||||
Cash and cash equivalents
|
$
|
548
|
|
|
$
|
816
|
|
Short-term investments
|
368
|
|
|
1,443
|
|
||
Accounts receivable, net
|
194
|
|
|
151
|
|
||
Other receivables
|
19
|
|
|
71
|
|
||
Income taxes receivable
|
9
|
|
|
26
|
|
||
Other current assets
|
56
|
|
|
38
|
|
||
|
1,194
|
|
|
2,545
|
|
||
Restricted cash and cash equivalents
|
34
|
|
|
39
|
|
||
Long-term investments
|
55
|
|
|
55
|
|
||
Other long-term assets
|
28
|
|
|
28
|
|
||
Deferred income tax assets
|
2
|
|
|
3
|
|
||
Property, plant and equipment, net
|
85
|
|
|
64
|
|
||
Goodwill
|
1,463
|
|
|
569
|
|
||
Intangible assets, net
|
1,068
|
|
|
477
|
|
||
|
$
|
3,929
|
|
|
$
|
3,780
|
|
Liabilities
|
|
|
|
||||
Current
|
|
|
|
||||
Accounts payable
|
$
|
48
|
|
|
$
|
46
|
|
Accrued liabilities
|
192
|
|
|
205
|
|
||
Income taxes payable
|
17
|
|
|
18
|
|
||
Deferred revenue, current
|
214
|
|
|
142
|
|
||
|
471
|
|
|
411
|
|
||
Deferred revenue, non-current
|
136
|
|
|
53
|
|
||
Other long-term liabilities
|
19
|
|
|
23
|
|
||
Long-term debt
|
665
|
|
|
782
|
|
||
Deferred income tax liabilities
|
2
|
|
|
6
|
|
||
|
1,293
|
|
|
1,275
|
|
||
Shareholders’ equity
|
|
|
|
||||
Capital stock and additional paid-in capital
|
|
|
|
||||
Preferred shares: authorized unlimited number of non-voting, cumulative, redeemable and retractable
|
|
|
|
|
|
||
Common shares: authorized unlimited number of non-voting, redeemable, retractable Class A common shares and unlimited number of voting common shares
|
|
|
|
||||
Issued - 547,357,972 voting common shares (February 28, 2018 - 536,733,733)
|
2,688
|
|
|
2,560
|
|
||
Deficit
|
(32
|
)
|
|
(45
|
)
|
||
Accumulated other comprehensive loss
|
(20
|
)
|
|
(10
|
)
|
||
|
2,636
|
|
|
2,505
|
|
||
|
$
|
3,929
|
|
|
$
|
3,780
|
|
|
Capital Stock
and Additional Paid-in Capital |
|
Retained
Earnings (Deficit) |
|
Accumulated
Other Comprehensive Loss |
|
Total
|
||||||||
Balance as at February 29, 2016
|
$
|
2,448
|
|
|
$
|
768
|
|
|
$
|
(8
|
)
|
|
$
|
3,208
|
|
Net loss
|
—
|
|
|
(1,206
|
)
|
|
—
|
|
|
(1,206
|
)
|
||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
(9
|
)
|
|
(9
|
)
|
||||
Shares issued:
|
|
|
|
|
|
|
|
||||||||
Exercise of stock options
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||
Stock-based compensation
|
60
|
|
|
—
|
|
|
—
|
|
|
60
|
|
||||
Tax deficiencies related to stock-based compensation
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
||||
Employee share purchase plan
|
4
|
|
|
—
|
|
|
—
|
|
|
4
|
|
||||
Balance as at February 28, 2017
|
2,512
|
|
|
(438
|
)
|
|
(17
|
)
|
|
2,057
|
|
||||
Net income
|
—
|
|
|
405
|
|
|
—
|
|
|
405
|
|
||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
7
|
|
|
7
|
|
||||
Shares issued:
|
|
|
|
|
|
|
|
||||||||
Exercise of stock options
|
4
|
|
|
—
|
|
|
—
|
|
|
4
|
|
||||
Stock-based compensation
|
49
|
|
|
—
|
|
|
—
|
|
|
49
|
|
||||
Cumulative impact of adoption of ASU 2016-16
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
(3
|
)
|
||||
Share repurchase
|
(9
|
)
|
|
(9
|
)
|
|
—
|
|
|
(18
|
)
|
||||
Employee share purchase plan
|
4
|
|
|
—
|
|
|
—
|
|
|
4
|
|
||||
Balance as at February 28, 2018
|
2,560
|
|
|
(45
|
)
|
|
(10
|
)
|
|
2,505
|
|
||||
Net income
|
—
|
|
|
93
|
|
|
—
|
|
|
93
|
|
||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
(4
|
)
|
||||
Shares issued:
|
|
|
|
|
|
|
|
||||||||
Exercise of stock options
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||
Stock-based compensation
|
67
|
|
|
—
|
|
|
—
|
|
|
67
|
|
||||
Cumulative impact of adoption of ASU 606
|
—
|
|
|
(86
|
)
|
|
—
|
|
|
(86
|
)
|
||||
Cumulative impact of adoption of ASU 2016-01
|
—
|
|
|
6
|
|
|
(6
|
)
|
|
—
|
|
||||
Exchange shares related to Cylance acquisition
|
35
|
|
|
—
|
|
|
—
|
|
|
35
|
|
||||
Value of pre-combination service related to Replacement Awards included in purchase consideration
|
21
|
|
|
—
|
|
|
—
|
|
|
21
|
|
||||
Employee share purchase plan
|
4
|
|
|
—
|
|
|
—
|
|
|
4
|
|
||||
Balance as at February 28, 2019
|
$
|
2,688
|
|
|
$
|
(32
|
)
|
|
$
|
(20
|
)
|
|
$
|
2,636
|
|
|
For the Years Ended
|
||||||||||
|
February 28, 2019
|
|
February 28, 2018
|
|
February 28, 2017
|
||||||
Revenue
|
$
|
904
|
|
|
$
|
932
|
|
|
$
|
1,309
|
|
Cost of sales
|
|
|
|
|
|
||||||
Cost of sales
|
206
|
|
|
262
|
|
|
542
|
|
|||
Inventory write-down
|
—
|
|
|
—
|
|
|
150
|
|
|||
|
206
|
|
|
262
|
|
|
692
|
|
|||
Gross margin
|
698
|
|
|
670
|
|
|
617
|
|
|||
|
|
|
|
|
|
||||||
Operating expenses
|
|
|
|
|
|
||||||
Research and development
|
219
|
|
|
239
|
|
|
306
|
|
|||
Selling, marketing and administration
|
406
|
|
|
467
|
|
|
553
|
|
|||
Amortization
|
136
|
|
|
153
|
|
|
186
|
|
|||
Impairment of goodwill
|
—
|
|
|
—
|
|
|
57
|
|
|||
Impairment of long-lived assets
|
—
|
|
|
11
|
|
|
501
|
|
|||
Loss on sale, disposal and abandonment of long-lived assets
|
3
|
|
|
9
|
|
|
171
|
|
|||
Debentures fair value adjustment
|
(117
|
)
|
|
191
|
|
|
24
|
|
|||
Arbitration awards and settlements, net
|
(9
|
)
|
|
(683
|
)
|
|
—
|
|
|||
|
638
|
|
|
387
|
|
|
1,798
|
|
|||
Operating income (loss)
|
60
|
|
|
283
|
|
|
(1,181
|
)
|
|||
Investment income (loss), net
|
17
|
|
|
123
|
|
|
(27
|
)
|
|||
Income (loss) before income taxes
|
77
|
|
|
406
|
|
|
(1,208
|
)
|
|||
Provision for (recovery of) income taxes
|
(16
|
)
|
|
1
|
|
|
(2
|
)
|
|||
Net income (loss)
|
$
|
93
|
|
|
$
|
405
|
|
|
$
|
(1,206
|
)
|
Earnings (loss) per share
|
|
|
|
|
|
||||||
Basic
|
$
|
0.17
|
|
|
$
|
0.76
|
|
|
$
|
(2.30
|
)
|
Diluted
|
$
|
0.00
|
|
|
$
|
0.74
|
|
|
$
|
(2.30
|
)
|
|
For the Years Ended
|
||||||||||
|
February 28, 2019
|
|
February 28, 2018
|
|
February 28, 2017
|
||||||
Net income (loss)
|
$
|
93
|
|
|
$
|
405
|
|
|
$
|
(1,206
|
)
|
Other comprehensive income (loss)
|
|
|
|
|
|
||||||
Net change in unrealized gains (losses) on available-for-sale investments
|
1
|
|
|
(3
|
)
|
|
(7
|
)
|
|||
Net change in fair value of derivatives designated as cash flow hedges during the year, net of income taxes of nil (February 28, 2018 and February 28, 2017 - income taxes of nil)
|
(2
|
)
|
|
1
|
|
|
2
|
|
|||
Amounts reclassified to net income (loss) during the year, net of income taxes of nil (February 28, 2018 and February 28, 2017 - income taxes of nil)
|
3
|
|
|
(2
|
)
|
|
(1
|
)
|
|||
Foreign currency translation adjustment
|
(6
|
)
|
|
12
|
|
|
(3
|
)
|
|||
Actuarial losses associated with other post-employment benefit obligations
|
—
|
|
|
(1
|
)
|
|
—
|
|
|||
Other comprehensive income (loss)
|
(4
|
)
|
|
7
|
|
|
(9
|
)
|
|||
Comprehensive income (loss)
|
$
|
89
|
|
|
$
|
412
|
|
|
$
|
(1,215
|
)
|
|
For the Years Ended
|
||||||||||
|
February 28, 2019
|
|
February 28, 2018
|
|
February 28, 2017
|
||||||
Cash flows from operating activities
|
|
|
|
|
|
||||||
Net income (loss)
|
$
|
93
|
|
|
$
|
405
|
|
|
$
|
(1,206
|
)
|
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
|
|
|
|
|
|
||||||
Amortization
|
149
|
|
|
177
|
|
|
239
|
|
|||
Deferred income taxes
|
(25
|
)
|
|
(7
|
)
|
|
33
|
|
|||
Stock-based compensation
|
67
|
|
|
49
|
|
|
60
|
|
|||
Impairment of goodwill
|
—
|
|
|
—
|
|
|
57
|
|
|||
Impairment of long-lived assets
|
—
|
|
|
11
|
|
|
501
|
|
|||
Non-cash consideration received from contracts with customers
|
(46
|
)
|
|
—
|
|
|
—
|
|
|||
Loss on sale, disposal and abandonment of long-lived assets
|
3
|
|
|
9
|
|
|
171
|
|
|||
Debentures fair value adjustment
|
(117
|
)
|
|
191
|
|
|
24
|
|
|||
Other long-term assets
|
—
|
|
|
(18
|
)
|
|
—
|
|
|||
Other long-term liabilities
|
(12
|
)
|
|
5
|
|
|
(5
|
)
|
|||
Other
|
3
|
|
|
(6
|
)
|
|
—
|
|
|||
Net changes in working capital items
|
|
|
|
|
|
||||||
Accounts receivable, net
|
(9
|
)
|
|
49
|
|
|
166
|
|
|||
Other receivables
|
52
|
|
|
(44
|
)
|
|
17
|
|
|||
Inventories
|
—
|
|
|
23
|
|
|
117
|
|
|||
Income tax receivable
|
17
|
|
|
2
|
|
|
2
|
|
|||
Other assets
|
(1
|
)
|
|
16
|
|
|
45
|
|
|||
Accounts payable
|
(15
|
)
|
|
(82
|
)
|
|
(179
|
)
|
|||
Accrued liabilities
|
(21
|
)
|
|
(36
|
)
|
|
(94
|
)
|
|||
Income taxes payable
|
(2
|
)
|
|
4
|
|
|
(28
|
)
|
|||
Deferred revenue
|
(36
|
)
|
|
(44
|
)
|
|
(144
|
)
|
|||
Net cash provided by (used in) operating activities
|
100
|
|
|
704
|
|
|
(224
|
)
|
|||
Cash flows from investing activities
|
|
|
|
|
|
||||||
Acquisition of long-term investments
|
(2
|
)
|
|
(27
|
)
|
|
(430
|
)
|
|||
Proceeds on sale or maturity of long-term investments
|
2
|
|
|
77
|
|
|
228
|
|
|||
Acquisition of property, plant and equipment
|
(17
|
)
|
|
(15
|
)
|
|
(17
|
)
|
|||
Proceeds on sale of property, plant and equipment
|
1
|
|
|
3
|
|
|
95
|
|
|||
Acquisition of intangible assets
|
(32
|
)
|
|
(30
|
)
|
|
(52
|
)
|
|||
Business acquisitions, net of cash acquired
|
(1,402
|
)
|
|
—
|
|
|
(5
|
)
|
|||
Acquisition of short-term investments
|
(2,895
|
)
|
|
(3,499
|
)
|
|
(1,366
|
)
|
|||
Proceeds on sale or maturity of short-term investments
|
3,970
|
|
|
2,861
|
|
|
2,271
|
|
|||
Net cash provided by (used in) investing activities
|
(375
|
)
|
|
(630
|
)
|
|
724
|
|
|||
Cash flows from financing activities
|
|
|
|
|
|
||||||
Issuance of common shares
|
5
|
|
|
8
|
|
|
5
|
|
|||
Payment of contingent consideration from business acquisitions
|
—
|
|
|
—
|
|
|
(15
|
)
|
|||
Excess deficiency related to stock-based compensation
|
—
|
|
|
—
|
|
|
(1
|
)
|
|||
Common shares repurchased
|
—
|
|
|
(18
|
)
|
|
—
|
|
|||
Repurchase of 6% Debentures
|
—
|
|
|
—
|
|
|
(1,315
|
)
|
|||
Issuance of 3.75% Debentures
|
—
|
|
|
—
|
|
|
605
|
|
|||
Net cash provided by (used in) financing activities
|
5
|
|
|
(10
|
)
|
|
(721
|
)
|
|||
Effect of foreign exchange gain (loss) on cash, cash equivalents, restricted cash, and restricted cash equivalents
|
(3
|
)
|
|
6
|
|
|
(1
|
)
|
|||
Net increase (decrease) in cash, cash equivalents, restricted cash, and restricted cash equivalents during the year
|
(273
|
)
|
|
70
|
|
|
(222
|
)
|
|||
Cash, cash equivalents, restricted cash, and restricted cash equivalents, beginning of year
|
855
|
|
|
785
|
|
|
1,007
|
|
|||
Cash, cash equivalents, restricted cash, and restricted cash equivalents, end of year
|
$
|
582
|
|
|
$
|
855
|
|
|
$
|
785
|
|
|
|
|
|
|
|
||||||
As at
|
February 28, 2019
|
|
February 28, 2018
|
|
February 28, 2017
|
||||||
Cash and cash equivalents
|
$
|
548
|
|
|
$
|
816
|
|
|
$
|
734
|
|
Restricted cash and cash equivalents
|
34
|
|
|
39
|
|
|
51
|
|
|||
|
$
|
582
|
|
|
$
|
855
|
|
|
$
|
785
|
|
1.
|
BLACKBERRY LIMITED AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND CRITICAL ACCOUNTING ESTIMATES
|
Buildings, leasehold improvements and other
|
|
Straight-line over terms between 5 and 40 years
|
BlackBerry operations and other information technology
|
|
Straight-line over terms between 3 and 5 years
|
Manufacturing, repair and research and development equipment
|
|
Straight-line over terms between 1 and 5 years
|
Furniture and fixtures
|
|
Declining balance at 20% per annum
|
Acquired technology
|
|
Between 3 and 10 years
|
Intellectual property
|
|
Between 1 and 17 years
|
Other acquired intangibles
|
|
Between 2 and 10 years
|
2.
|
ADOPTION OF ACCOUNTING POLICIES
|
Consolidated Balance Sheets
|
Balance as at February 28, 2018
|
|
ASC 606 Adjustments
|
|
Balance as at March 1, 2018
|
||||||
Assets
|
|
|
|
|
|
||||||
Other assets
|
$
|
66
|
|
|
$
|
11
|
|
|
$
|
77
|
|
|
|
|
|
|
|
||||||
Liabilities
|
|
|
|
|
|
||||||
Deferred revenue
|
$
|
195
|
|
|
$
|
97
|
|
|
$
|
292
|
|
|
|
|
|
|
|
||||||
Shareholders’ equity
|
|
|
|
|
|
||||||
Deficit
|
$
|
(45
|
)
|
|
$
|
(86
|
)
|
|
$
|
(131
|
)
|
|
As at February 28, 2019
|
||||||||||
Consolidated Balance Sheets
|
Balances Without Adoption of ASC 606
|
|
ASC 606 Adjustments
|
|
As Reported
|
||||||
Assets
|
|
|
|
|
|
||||||
Other assets
|
$
|
67
|
|
|
$
|
17
|
|
|
$
|
84
|
|
|
|
|
|
|
|
||||||
Liabilities
|
|
|
|
|
|
||||||
Deferred revenue
|
$
|
310
|
|
|
$
|
40
|
|
|
$
|
350
|
|
|
|
|
|
|
|
||||||
Shareholders’ equity
|
|
|
|
|
|
||||||
Deficit
|
$
|
(9
|
)
|
|
$
|
(23
|
)
|
|
$
|
(32
|
)
|
|
For the Year Ended February 28, 2019
|
||||||||||
Consolidated Statements of Operations
|
Balances Without Adoption of ASC 606
|
|
ASC 606 Adjustments
|
|
As Reported
|
||||||
Revenue
|
$
|
864
|
|
|
$
|
40
|
|
|
$
|
904
|
|
|
|
|
|
|
|
||||||
Operating expenses
|
|
|
|
|
|
||||||
Selling, marketing and administration
|
$
|
410
|
|
|
$
|
(4
|
)
|
|
$
|
406
|
|
|
|
|
|
|
|
||||||
Net income
|
$
|
49
|
|
|
$
|
44
|
|
|
$
|
93
|
|
Earnings (loss) per share
|
|
|
|
|
|
||||||
Basic
|
$
|
0.09
|
|
|
$
|
0.08
|
|
|
$
|
0.17
|
|
Diluted
|
$
|
(0.07
|
)
|
|
$
|
0.07
|
|
|
$
|
0.00
|
|
3
.
|
CASH, CASH EQUIVALENTS AND INVESTMENTS
|
•
|
Level 1 - Unadjusted quoted prices at the measurement date for identical assets or liabilities in active markets.
|
•
|
Level 2 - Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.
|
•
|
Level 3 - Significant unobservable inputs that are supported by little or no market activity.
|
|
Cost Basis
|
|
Unrealized
Gains
|
|
Unrealized
Losses
|
|
Other-than-
temporary
Impairment
|
|
Fair Value
|
|
Cash and
Cash
Equivalents
|
|
Short-term
Investments
|
|
Long-term
Investments
|
|
Restricted Cash
|
||||||||||||||||||
Bank balances
|
$
|
326
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
326
|
|
|
$
|
322
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4
|
|
Other investments
|
36
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
36
|
|
|
—
|
|
|
—
|
|
|
36
|
|
|
—
|
|
|||||||||
|
362
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
362
|
|
|
322
|
|
|
—
|
|
|
36
|
|
|
4
|
|
|||||||||
Level 1:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Equity securities
|
10
|
|
|
—
|
|
|
(10
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Level 2:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Term deposits, certificates of deposits, and GICs
|
85
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
85
|
|
|
—
|
|
|
55
|
|
|
—
|
|
|
30
|
|
|||||||||
Bankers’ acceptances
|
39
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
39
|
|
|
4
|
|
|
35
|
|
|
—
|
|
|
—
|
|
|||||||||
Commercial paper
|
264
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
264
|
|
|
177
|
|
|
87
|
|
|
—
|
|
|
—
|
|
|||||||||
Non-U.S. promissory notes
|
20
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
20
|
|
|
20
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Non-U.S. government sponsored enterprise notes
|
139
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
139
|
|
|
25
|
|
|
114
|
|
|
—
|
|
|
—
|
|
|||||||||
Non-U.S. treasury bills/notes
|
35
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
35
|
|
|
—
|
|
|
35
|
|
|
—
|
|
|
—
|
|
|||||||||
U.S. treasury bills/notes
|
42
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
42
|
|
|
—
|
|
|
42
|
|
|
—
|
|
|
—
|
|
|||||||||
|
624
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
624
|
|
|
226
|
|
|
368
|
|
|
—
|
|
|
30
|
|
|||||||||
Level 3:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Auction rate securities
|
20
|
|
|
2
|
|
|
—
|
|
|
(3
|
)
|
|
19
|
|
|
—
|
|
|
—
|
|
|
19
|
|
|
—
|
|
|||||||||
|
20
|
|
|
2
|
|
|
—
|
|
|
(3
|
)
|
|
19
|
|
|
—
|
|
|
—
|
|
|
19
|
|
|
—
|
|
|||||||||
|
$
|
1,016
|
|
|
$
|
2
|
|
|
$
|
(10
|
)
|
|
$
|
(3
|
)
|
|
$
|
1,005
|
|
|
$
|
548
|
|
|
$
|
368
|
|
|
$
|
55
|
|
|
$
|
34
|
|
|
Cost Basis
|
|
Unrealized
Gains
|
|
Unrealized
Losses
|
|
Other-than-
temporary
Impairment
|
|
Fair Value
|
|
Cash and
Cash
Equivalents
|
|
Short-term
Investments
|
|
Long-term
Investments
|
|
Restricted Cash and Cash Equivalents
|
||||||||||||||||||
Bank balances
|
$
|
169
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
169
|
|
|
$
|
169
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Other investments
|
35
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
35
|
|
|
—
|
|
|
—
|
|
|
35
|
|
|
—
|
|
|||||||||
|
204
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
204
|
|
|
169
|
|
|
—
|
|
|
35
|
|
|
—
|
|
|||||||||
Level 1:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Equity securities
|
10
|
|
|
—
|
|
|
(8
|
)
|
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Level 2:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Term deposits, certificates of deposits, and GICs
|
332
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
332
|
|
|
—
|
|
|
293
|
|
|
—
|
|
|
39
|
|
|||||||||
Bankers’ acceptances
|
211
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
211
|
|
|
211
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Commercial paper
|
426
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
426
|
|
|
231
|
|
|
195
|
|
|
—
|
|
|
—
|
|
|||||||||
Non-U.S. promissory notes
|
227
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
227
|
|
|
102
|
|
|
125
|
|
|
—
|
|
|
—
|
|
|||||||||
Non-U.S. government sponsored enterprise notes
|
200
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
200
|
|
|
15
|
|
|
185
|
|
|
—
|
|
|
—
|
|
|||||||||
Non-U.S. treasury bills/notes
|
284
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
284
|
|
|
50
|
|
|
234
|
|
|
—
|
|
|
—
|
|
|||||||||
U.S. treasury bills/notes
|
448
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
447
|
|
|
38
|
|
|
409
|
|
|
—
|
|
|
—
|
|
|||||||||
|
2,128
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
2,127
|
|
|
647
|
|
|
1,441
|
|
|
—
|
|
|
39
|
|
|||||||||
Level 3:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Corporate notes/bonds
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|||||||||
Auction rate securities
|
20
|
|
|
2
|
|
|
—
|
|
|
(3
|
)
|
|
19
|
|
|
—
|
|
|
—
|
|
|
19
|
|
|
—
|
|
|||||||||
|
21
|
|
|
2
|
|
|
—
|
|
|
(3
|
)
|
|
20
|
|
|
—
|
|
|
—
|
|
|
20
|
|
|
—
|
|
|||||||||
|
$
|
2,363
|
|
|
$
|
2
|
|
|
$
|
(9
|
)
|
|
$
|
(3
|
)
|
|
$
|
2,353
|
|
|
$
|
816
|
|
|
$
|
1,443
|
|
|
$
|
55
|
|
|
$
|
39
|
|
|
Cost Basis
|
|
Fair Value
|
||||
Due in one year or less
|
$
|
624
|
|
|
$
|
624
|
|
Due after five years
|
17
|
|
|
19
|
|
||
No fixed maturity
|
10
|
|
|
—
|
|
||
|
$
|
651
|
|
|
$
|
643
|
|
4
.
|
FAIR VALUE MEASUREMENTS
|
|
Level 3
|
||
Balance at February 28, 2017
|
$
|
20
|
|
Principal repayments
|
—
|
|
|
Balance at February 28, 2018
|
20
|
|
|
Principal repayments
|
(1
|
)
|
|
Balance at February 28, 2019
|
$
|
19
|
|
5
.
|
DERIVATIVE FINANCIAL INSTRUMENTS
|
|
Derivative Assets
(1)(2)
|
|
Derivative Liabilities
(1)(3)
|
||||||||||||
|
As at February 28, 2019
|
|
As at February 28, 2018
|
|
As at February 28, 2019
|
|
As at February 28, 2018
|
||||||||
Foreign exchange contracts
|
|
|
|
|
|
|
|
||||||||
Fair value of derivatives designated as cash flow hedges
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
$
|
(1
|
)
|
Fair value of derivatives not subject to hedge accounting
|
—
|
|
|
1
|
|
|
—
|
|
|
(1
|
)
|
||||
Total estimated fair value
|
1
|
|
|
1
|
|
|
(1
|
)
|
|
(2
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Notional amount
|
$
|
93
|
|
|
$
|
123
|
|
|
$
|
91
|
|
|
$
|
161
|
|
|
Amount of Gain (Loss)
Recognized in Other Comprehensive Income (Loss) on
Derivative Instruments
(Effective Portion)
|
|
Location of Gain (Loss) Reclassified from AOCI into Income
(Effective Portion)
|
|
Amount of Gain (Loss)
Reclassified from
AOCI into Income
(Effective Portion)
|
||||||||||||
|
For the Years Ended
|
|
|
|
For the Years Ended
|
||||||||||||
|
February 28, 2019
|
|
February 28, 2018
|
|
|
|
February 28, 2019
|
|
February 28, 2018
|
||||||||
Foreign exchange contracts
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
Selling, marketing and administration
|
|
$
|
(3
|
)
|
|
$
|
2
|
|
Total
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
|
|
$
|
(3
|
)
|
|
$
|
2
|
|
|
|
|
Amount of Gain (Loss) in
Income on Derivative Instruments
|
||||||
|
|
|
For the Years Ended
|
||||||
|
Location of Gain (Loss) Recognized in
Income on Derivative Instruments
|
|
February 28, 2019
|
|
February 28, 2018
|
||||
Foreign exchange contracts
|
Selling, marketing and administration
|
|
$
|
4
|
|
|
$
|
(9
|
)
|
6
.
|
CONSOLIDATED BALANCE SHEET DETAILS
|
|
As at
|
||||||
|
February 28, 2019
|
|
February 28, 2018
|
||||
Cost
|
|
|
|
||||
Buildings, leasehold improvements and other
|
$
|
68
|
|
|
$
|
60
|
|
BlackBerry operations and other information technology
|
85
|
|
|
71
|
|
||
Manufacturing, repair and research and development equipment
|
73
|
|
|
73
|
|
||
Furniture and fixtures
|
14
|
|
|
9
|
|
||
|
240
|
|
|
213
|
|
||
Accumulated amortization
|
155
|
|
|
149
|
|
||
Net book value
|
$
|
85
|
|
|
$
|
64
|
|
|
As at February 28, 2019
|
||||||||||
|
Cost
|
|
Accumulated
Amortization
|
|
Net Book
Value
|
||||||
Acquired technology
|
$
|
1,020
|
|
|
$
|
557
|
|
|
$
|
463
|
|
Intellectual property
|
466
|
|
|
239
|
|
|
227
|
|
|||
Other acquired intangibles
|
494
|
|
|
116
|
|
|
378
|
|
|||
|
$
|
1,980
|
|
|
$
|
912
|
|
|
$
|
1,068
|
|
|
As at February 28, 2018
|
||||||||||
|
Cost
|
|
Accumulated
Amortization
|
|
Net Book
Value
|
||||||
Acquired technology
|
$
|
682
|
|
|
$
|
512
|
|
|
$
|
170
|
|
Intellectual property
|
411
|
|
|
212
|
|
|
199
|
|
|||
Other acquired intangibles
|
197
|
|
|
89
|
|
|
108
|
|
|||
|
$
|
1,290
|
|
|
$
|
813
|
|
|
$
|
477
|
|
|
As at
|
||
|
February 28, 2019
|
|
February 28, 2018
|
Acquired technology
|
5.5 years
|
|
3.2 years
|
Intellectual property
|
7.3 years
|
|
7.0 years
|
Other acquired intangibles
|
5.8 years
|
|
4.4 years
|
|
Carrying Amount
|
||
Carrying amount as at February 29, 2016
|
$
|
618
|
|
Goodwill Impairment Charge
|
(57
|
)
|
|
Effect of foreign exchange on non-U.S. dollar denominated goodwill
|
(2
|
)
|
|
Carrying amount as at February 28, 2017
|
559
|
|
|
Effect of foreign exchange on non-U.S. dollar denominated goodwill
|
10
|
|
|
Carrying amount as at February 28, 2018
|
569
|
|
|
Effect of foreign exchange on non-U.S. dollar denominated goodwill
|
(5
|
)
|
|
Goodwill acquired through business combination completed during the year
|
899
|
|
|
Carrying amount as at February 28, 2019
|
$
|
1,463
|
|
|
As at
|
||||||
|
February 28, 2019
|
|
February 28, 2018
|
||||
Long-term intellectual property licensing receivable
|
$
|
19
|
|
|
$
|
25
|
|
Deferred contract acquisition costs, non-current
|
9
|
|
|
3
|
|
||
|
$
|
28
|
|
|
$
|
28
|
|
|
As at
|
||||||
|
February 28, 2019
|
|
February 28, 2018
|
||||
Variable incentive accrual
|
$
|
36
|
|
|
$
|
40
|
|
Other
|
156
|
|
|
165
|
|
||
|
$
|
192
|
|
|
$
|
205
|
|
|
As at
|
||||||
|
February 28, 2019
|
|
February 28, 2018
|
||||
Lease incentive obligations
|
$
|
8
|
|
|
$
|
—
|
|
RAP
(1)
|
11
|
|
|
23
|
|
||
|
$
|
19
|
|
|
$
|
23
|
|
7.
|
BUSINESS ACQUISITIONS
|
Non-cash assets acquired
|
|
|
||
Current assets
|
|
$
|
40
|
|
Property, plant and equipment and other long-term assets
|
|
25
|
|
|
Intangible assets
|
|
|
||
Acquired technology
|
|
283
|
|
|
In-process research and development
|
|
66
|
|
|
Customer relationships
|
|
277
|
|
|
Trade name
|
|
20
|
|
|
Goodwill
(1)
|
|
899
|
|
|
|
|
1,610
|
|
|
Liabilities assumed
|
|
|
||
Current liabilities
|
|
27
|
|
|
Debt
|
|
125
|
|
|
Deferred revenue
(2)
|
|
95
|
|
|
Deferred tax liability
|
|
22
|
|
|
Other long-term liabilities
|
|
8
|
|
|
|
|
277
|
|
|
Net non-cash assets acquired
|
|
1,333
|
|
|
Cash acquired
|
|
10
|
|
|
Restricted cash acquired
|
|
4
|
|
|
Net assets acquired
|
|
1,347
|
|
|
Settlement of acquiree debt
(3)
|
|
125
|
|
|
|
|
$
|
1,472
|
|
|
|
|
||
Consideration
|
|
|
||
Cash consideration
|
|
$
|
1,416
|
|
Replacement Awards issued
(4)
|
|
21
|
|
|
Exchange shares
(5)
|
|
35
|
|
|
Total consideration
|
|
$
|
1,472
|
|
(1)
|
Goodwill represents the excess of the acquisition price over the fair value of net assets acquired, which is not expected to be deductible for tax purposes when goodwill results from share purchases.
|
(2)
|
The fair value of deferred revenue represents the costs to service the assumed obligations, plus a normal profit margin as required under purchase accounting.
|
(3)
|
$125 million
in cash was paid to existing debt holders to settle Cylance debt outstanding at acquisition.
|
(4)
|
Fair value of Replacement Awards (as defined in Note 11(b)) issued in connection with unvested Cylance employee equity awards, related to pre-combination service and considered purchase consideration. See Note 11(b) for details on the Replacement Awards.
|
(5)
|
In lieu of cash, a proportion of consideration owed to certain Cylance shareholders will be paid in BlackBerry shares issued from treasury in equal instalments on the next three anniversary dates of the acquisition. There are no service or other requirements associated with the issuance of these shares.
|
|
Revenue
(1)
|
|
Loss before income taxes
|
||||
Actuals from acquisition date to February 28, 2019
|
$
|
2
|
|
|
$
|
(5
|
)
|
(1)
|
Includes revenue recognized related to deferred revenue, the fair value of which represents the costs to service the assumed obligations, plus a normal margin, as required under purchase accounting.
|
8.
|
RESTRUCTURING AND INTEGRATION
|
|
Employee
Termination
Benefits
|
|
Facilities
Costs
|
|
Other Charges
(1)
|
|
Total
|
||||||||
Balance as at February 28, 2017
|
$
|
9
|
|
|
$
|
27
|
|
|
$
|
—
|
|
|
$
|
36
|
|
Charges incurred
|
12
|
|
|
26
|
|
|
29
|
|
|
67
|
|
||||
Cash payments made
|
(20
|
)
|
|
(14
|
)
|
|
(27
|
)
|
|
(61
|
)
|
||||
Balance as at February 28, 2018
|
1
|
|
|
39
|
|
|
2
|
|
|
42
|
|
||||
Charges incurred
|
8
|
|
|
3
|
|
|
—
|
|
|
11
|
|
||||
Cash payments made
|
(8
|
)
|
|
(20
|
)
|
|
(2
|
)
|
|
(30
|
)
|
||||
Balance as at February 28, 2019
|
$
|
1
|
|
|
$
|
22
|
|
|
$
|
—
|
|
|
$
|
23
|
|
|
|
|
|
|
|
|
|
||||||||
Current portion
|
$
|
1
|
|
|
$
|
11
|
|
|
$
|
—
|
|
|
$
|
12
|
|
Long-term portion
|
—
|
|
|
11
|
|
|
—
|
|
|
11
|
|
||||
|
$
|
1
|
|
|
$
|
22
|
|
|
$
|
—
|
|
|
$
|
23
|
|
(1)
|
Other charges consist of costs associated with redundant systems from acquisitions that are being integrated into a single solution, and the effect of foreign exchange.
|
|
For the Years Ended
|
||||||||||
|
February 28, 2019
|
|
February 28, 2018
|
|
February 28, 2017
|
||||||
Cost of sales
|
$
|
2
|
|
|
$
|
11
|
|
|
$
|
25
|
|
Research and development
|
2
|
|
|
5
|
|
|
4
|
|
|||
Selling, marketing and administration
|
8
|
|
|
62
|
|
|
235
|
|
|||
Total RAP charges
|
$
|
12
|
|
|
$
|
78
|
|
|
$
|
264
|
|
9.
|
INCOME TAXES
|
|
For the Years Ended
|
||||||||||
|
February 28, 2019
|
|
February 28, 2018
|
|
February 28, 2017
|
||||||
Statutory Canadian tax rate
|
26.5
|
%
|
|
26.5
|
%
|
|
26.6
|
%
|
|||
Expected provision for (recovery of) income taxes
|
$
|
20
|
|
|
$
|
108
|
|
|
$
|
(320
|
)
|
Differences in income taxes resulting from:
|
|
|
|
|
|
||||||
Valuation allowance
|
(55
|
)
|
|
(169
|
)
|
|
302
|
|
|||
Investment tax credits
|
(10
|
)
|
|
(3
|
)
|
|
(20
|
)
|
|||
Canadian tax rate differences
|
|
|
|
—
|
|
|
1
|
|
|||
Change in unrecognized income tax benefits
|
9
|
|
|
8
|
|
|
28
|
|
|||
Foreign tax rate differences
|
(1
|
)
|
|
(6
|
)
|
|
6
|
|
|||
Effect of adjustments to deferred tax amounts for enacted changes resulting from U.S. tax reform
|
—
|
|
|
67
|
|
|
—
|
|
|||
Non-deductible permanent differences
|
19
|
|
|
4
|
|
|
3
|
|
|||
Other differences
|
2
|
|
|
(9
|
)
|
|
(2
|
)
|
|||
Withholding tax on unremitted earnings
|
—
|
|
|
1
|
|
|
—
|
|
|||
|
$
|
(16
|
)
|
|
$
|
1
|
|
|
$
|
(2
|
)
|
|
For the Years Ended
|
||||||||||
|
February 28, 2019
|
|
February 28, 2018
|
|
February 28, 2017
|
||||||
Income (loss) before income taxes:
|
|
|
|
|
|
||||||
Canadian
|
$
|
63
|
|
|
$
|
413
|
|
|
$
|
(1,301
|
)
|
Foreign
|
14
|
|
|
(7
|
)
|
|
93
|
|
|||
|
$
|
77
|
|
|
$
|
406
|
|
|
$
|
(1,208
|
)
|
|
For the Years Ended
|
||||||||||
|
February 28, 2019
|
|
February 28, 2018
|
|
February 28, 2017
|
||||||
Current
|
|
|
|
|
|
||||||
Canadian
|
$
|
2
|
|
|
$
|
1
|
|
|
$
|
(3
|
)
|
Foreign
|
7
|
|
|
7
|
|
|
(33
|
)
|
|||
Deferred
|
|
|
|
|
|
||||||
Canadian
|
—
|
|
|
—
|
|
|
—
|
|
|||
Foreign
|
(25
|
)
|
|
(7
|
)
|
|
34
|
|
|||
|
$
|
(16
|
)
|
|
$
|
1
|
|
|
$
|
(2
|
)
|
|
As at
|
||||||
|
February 28, 2019
|
|
February 28, 2018
|
||||
Assets
|
|
|
|
||||
Property, plant, equipment and intangibles
|
$
|
175
|
|
|
$
|
190
|
|
Non-deductible reserves
|
89
|
|
|
48
|
|
||
Minimum taxes
|
264
|
|
|
265
|
|
||
Convertible Debentures (see Note 10)
|
15
|
|
|
47
|
|
||
Research and development
|
304
|
|
|
286
|
|
||
Tax loss carryforwards
|
414
|
|
|
307
|
|
||
Other
|
98
|
|
|
94
|
|
||
Deferred income tax assets
|
1,359
|
|
|
1,237
|
|
||
|
|
|
|
||||
Valuation allowance
|
1,192
|
|
|
1,221
|
|
||
Deferred income tax assets net of valuation allowance
|
167
|
|
|
16
|
|
||
|
|
|
|
||||
Liabilities
|
|
|
|
||||
Property, plant, equipment and intangibles
|
(167
|
)
|
|
(19
|
)
|
||
Deferred income tax liabilities
|
(167
|
)
|
|
(19
|
)
|
||
Net deferred income tax asset (liability)
|
$
|
—
|
|
|
$
|
(3
|
)
|
Deferred income tax asset
|
$
|
2
|
|
|
$
|
3
|
|
Deferred income tax liability
|
(2
|
)
|
|
(6
|
)
|
||
|
$
|
—
|
|
|
$
|
(3
|
)
|
|
For the Years Ended
|
||||||||||
|
February 28, 2019
|
|
February 28, 2018
|
|
February 28, 2017
|
||||||
Unrecognized income tax benefits, opening balance
|
$
|
73
|
|
|
$
|
65
|
|
|
$
|
37
|
|
Increase for income tax positions of prior years
|
10
|
|
|
4
|
|
|
28
|
|
|||
Increase for income tax positions of current year
|
5
|
|
|
4
|
|
|
—
|
|
|||
Settlement of tax positions
|
(4
|
)
|
|
—
|
|
|
—
|
|
|||
Unrecognized income tax benefits, ending balance
|
$
|
84
|
|
|
$
|
73
|
|
|
$
|
65
|
|
Jurisdiction
|
|
Canada
(1)
|
Fiscal 2010 - 2019
|
United States
(2)
|
Fiscal 2016 - 2019
|
United Kingdom
|
Fiscal 2018 - 2019
|
Year of Expiry
|
|
Net Operating Losses
|
|
Capital Losses
|
|
Research and Development Tax Credits
(1)
|
|
Minimum Taxes
|
||||||||
2028
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1
|
|
2029
|
|
10
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
2030
|
|
—
|
|
|
—
|
|
|
5
|
|
|
104
|
|
||||
2031
|
|
—
|
|
|
—
|
|
|
5
|
|
|
128
|
|
||||
2032
|
|
4
|
|
|
—
|
|
|
3
|
|
|
27
|
|
||||
2033
|
|
97
|
|
|
—
|
|
|
106
|
|
|
1
|
|
||||
2034
|
|
94
|
|
|
—
|
|
|
106
|
|
|
1
|
|
||||
2035
|
|
11
|
|
|
—
|
|
|
51
|
|
|
2
|
|
||||
2036
|
|
399
|
|
|
—
|
|
|
40
|
|
|
—
|
|
||||
2037
|
|
472
|
|
|
—
|
|
|
25
|
|
|
—
|
|
||||
2038
|
|
270
|
|
|
—
|
|
|
19
|
|
|
—
|
|
||||
2039
|
|
217
|
|
|
—
|
|
|
17
|
|
|
—
|
|
||||
Indefinite
|
|
—
|
|
|
30
|
|
|
21
|
|
|
—
|
|
||||
|
|
$
|
1,574
|
|
|
$
|
30
|
|
|
$
|
398
|
|
|
$
|
264
|
|
10
.
|
LONG-TERM DEBT
|
|
|
As at
|
||
|
|
February 28, 2019
|
||
Balance as at February 28, 2018
|
|
$
|
782
|
|
Change in fair value of the 3.75% Debentures
|
|
(117
|
)
|
|
Balance as at February 28, 2019
|
|
$
|
665
|
|
|
|
For the Years Ended
|
||||||||||
|
|
February 28, 2019
|
|
February 28, 2018
|
|
February 28, 2017
|
||||||
Income (charge) associated with the change in fair value from non-credit components recorded in the statement of operations
|
|
$
|
117
|
|
|
$
|
(191
|
)
|
|
$
|
(24
|
)
|
Income associated with the change in fair value from instrument-specific credit components recorded in AOCI
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Total decrease (increase) in the fair value of the Debentures
(1)(2)
|
|
$
|
117
|
|
|
$
|
(191
|
)
|
|
$
|
(24
|
)
|
(1)
|
Prior to the adoption of ASU 2016-01 on March 1, 2018, the change in fair value from instrument-specific credit components of the Debentures was recorded in the consolidated statement of operations for the fiscal years ended
February 28, 2018
and
February 28, 2017
.
|
(2)
|
In fiscal 2017, the Company recorded non-cash income associated with the change in the fair value of the 3.75% Debentures of
$14 million
and charges associated with the change in the fair value of the 6% Debentures of
$38 million
, as described below. The Company recorded total charges associated with the change in the Debentures of
$24 million
in fiscal 2017.
|
11.
|
CAPITAL STOCK
|
(a)
|
Capital Stock
|
|
Capital Stock and
Additional Paid-in Capital
|
|||||
|
Stock
Outstanding
(000’s)
|
|
Amount
|
|||
Common shares outstanding as at February 29, 2016
|
521,172
|
|
|
$
|
2,448
|
|
Exercise of stock options
|
131
|
|
|
1
|
|
|
Common shares issued for RSU settlements
|
8,689
|
|
|
—
|
|
|
Stock-based compensation
|
—
|
|
|
60
|
|
|
Tax deficiencies related to stock-based compensation
|
—
|
|
|
(1
|
)
|
|
Common shares issued for employee share purchase plan
|
505
|
|
|
4
|
|
|
Common shares outstanding as at February 28, 2017
|
530,497
|
|
|
2,512
|
|
|
Exercise of stock options
|
536
|
|
|
4
|
|
|
Common shares issued for RSU settlements
|
7,258
|
|
|
—
|
|
|
Stock-based compensation
|
—
|
|
|
49
|
|
|
Share repurchase
|
(1,992
|
)
|
|
(9
|
)
|
|
Common shares issued for employee share purchase plan
|
435
|
|
|
4
|
|
|
Common shares outstanding as at February 28, 2018
|
536,734
|
|
|
2,560
|
|
|
Exercise of stock options
|
105
|
|
|
1
|
|
|
Common shares issued for RSU settlements
|
10,156
|
|
|
—
|
|
|
Stock-based compensation
|
—
|
|
|
67
|
|
|
Exchange shares
|
—
|
|
|
35
|
|
|
Value of pre-combination service related to Replacement Awards included in purchase consideration
|
—
|
|
|
21
|
|
|
Common shares issued for employee share purchase plan
|
363
|
|
|
4
|
|
|
Common shares outstanding as at February 28, 2019
|
547,358
|
|
|
$
|
2,688
|
|
(b)
|
Stock-based Compensation
|
|
Options Outstanding
|
|||||||||||
|
Number
(000’s)
|
|
Weighted
Average
Exercise
Price
|
|
Average
Remaining
Contractual
Life in Years
|
|
Aggregate
Intrinsic
Value
(millions)
|
|||||
Balance as at February 28, 2018
|
862
|
|
|
7.57
|
|
|
|
|
|
|||
Granted during the year
|
8,320
|
|
|
3.93
|
|
|
|
|
|
|||
Exercised during the year
|
(105
|
)
|
|
7.41
|
|
|
|
|
|
|||
Forfeited/canceled/expired during the year
|
(63
|
)
|
|
7.97
|
|
|
|
|
|
|||
Balance as at February 28, 2019
|
9,014
|
|
|
$
|
4.21
|
|
|
7.86
|
|
$
|
41
|
|
Vested and expected to vest as at February 28, 2019
|
7,023
|
|
|
$
|
4.27
|
|
|
7.74
|
|
$
|
31
|
|
Exercisable as at February 28, 2019
|
556
|
|
|
$
|
7.49
|
|
|
1.40
|
|
$
|
1
|
|
|
Options Outstanding
|
|||||
|
Number
(000’s)
|
|
Weighted Average
Grant Date Fair
Value
|
|||
Balance as at February 28, 2018
|
451
|
|
|
$
|
2.40
|
|
Granted during the year
|
8,320
|
|
|
5.50
|
|
|
Vested during the year
|
(273
|
)
|
|
2.42
|
|
|
Forfeited during the year
|
(40
|
)
|
|
2.44
|
|
|
Balance as at February 28, 2019
|
8,458
|
|
|
$
|
5.45
|
|
|
February 28, 2019
|
February 28, 2018
|
February 28, 2017
|
|||||
Weighted average grant date fair value of stock options granted during the period
|
$3.97 to $7.48
|
|
$
|
—
|
|
$
|
2.36
|
|
Assumptions:
|
|
|
|
|||||
Risk-free interest rates
|
2.50% to 2.56%
|
|
—
|
%
|
0.92
|
%
|
||
Expected life in years
|
3.91 to 6.16
|
|
0.00
|
|
3.52
|
|
||
Expected dividend yield
|
—
|
%
|
—
|
%
|
—
|
%
|
||
Volatility
|
37% to 40%
|
|
—
|
%
|
38.86
|
%
|
|
RSUs Outstanding
|
|||||||||||
|
Number
(000’s)
|
|
Weighted
Average
Grant Date
Fair Value
|
|
Average
Remaining
Contractual
Life in Years
|
|
Aggregate
Intrinsic
Value
(millions)
|
|||||
Balance as at February 28, 2018
|
14,932
|
|
|
7.87
|
|
|
|
|
|
|||
Granted during the year
|
14,245
|
|
|
9.45
|
|
|
|
|
|
|||
Vested during the year
|
(10,156
|
)
|
|
7.14
|
|
|
|
|
|
|||
Forfeited/cancelled during the year
|
(1,263
|
)
|
|
8.95
|
|
|
|
|
|
|||
Balance as at February 28, 2019
|
17,758
|
|
|
$
|
9.48
|
|
|
1.74
|
|
$
|
155
|
|
Vested and expected to vest February 28, 2019
|
16,030
|
|
|
$
|
9.40
|
|
|
1.70
|
|
$
|
139
|
|
12.
|
EARNINGS (LOSS) PER SHARE
|
|
For the Years Ended
|
||||||||||
|
February 28, 2019
|
|
February 28, 2018
|
|
February 28, 2017
|
||||||
Net income (loss) for basic and diluted earnings (loss) per share available to common shareholders
|
$
|
93
|
|
|
$
|
405
|
|
|
$
|
(1,206
|
)
|
Less: Debentures fair value adjustment
(1) (2)
|
(117
|
)
|
|
—
|
|
|
—
|
|
|||
Add: interest expense on Debentures
(1) (2)
|
24
|
|
|
—
|
|
|
—
|
|
|||
Net income (loss) for diluted earnings (loss) per share available to common shareholders
|
$
|
—
|
|
|
$
|
405
|
|
|
$
|
(1,206
|
)
|
|
|
|
|
|
|
||||||
Weighted average number of shares outstanding (000’s) - basic and diluted
|
540,477
|
|
|
532,888
|
|
|
525,265
|
|
|||
Effect of dilutive securities (000’s)
|
|
|
|
|
|
||||||
Stock-based compensation
(3) (4)
|
11,308
|
|
|
12,998
|
|
|
—
|
|
|||
Conversion of Debentures
(1) (2)
|
60,500
|
|
|
—
|
|
|
—
|
|
|||
Exchange shares from Cylance acquisition
(5)
|
4,182
|
|
|
—
|
|
|
—
|
|
|||
Weighted average number of shares and assumed conversions (000’s) - diluted
|
616,467
|
|
|
545,886
|
|
|
525,265
|
|
|||
Earnings (loss) per share - reported
|
|
|
|
|
|
||||||
Basic
|
$
|
0.17
|
|
|
$
|
0.76
|
|
|
$
|
(2.30
|
)
|
Diluted
|
$
|
0.00
|
|
|
$
|
0.74
|
|
|
$
|
(2.30
|
)
|
13
.
|
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
|
|
As at
|
||||||||||
|
February 28, 2019
|
|
February 28, 2018
|
|
February 28, 2017
|
||||||
Accumulated net unrealized gains (losses) on available-for-sale investments
|
$
|
2
|
|
|
$
|
(7
|
)
|
|
$
|
(4
|
)
|
Accumulated net unrealized losses on derivative instruments designated as cash flow hedges, net of tax
|
—
|
|
|
(1
|
)
|
|
—
|
|
|||
Foreign currency cumulative translation adjustment
|
(7
|
)
|
|
(1
|
)
|
|
(13
|
)
|
|||
Change in fair value from instruments-specific credit risk on Debentures
|
(14
|
)
|
|
—
|
|
|
—
|
|
|||
Actuarial losses associated with other post-employment benefit obligations
|
(1
|
)
|
|
(1
|
)
|
|
—
|
|
|||
Accumulated other comprehensive loss
|
$
|
(20
|
)
|
|
$
|
(10
|
)
|
|
$
|
(17
|
)
|
14.
|
COMMITMENTS AND CONTINGENCIES
|
(a)
|
Credit Facility and Letters of Credit
|
(b)
|
Qualcomm Arbitration Award
|
(c)
|
Nokia Arbitration Decision
|
(d)
|
Panasonic Settlement Agreement
|
(e)
|
Lease Commitments
|
(f)
|
Litigation
|
(f)
|
Concentrations in Certain Areas of the Company’s Business
|
(g)
|
Indemnifications
|
15.
|
REVENUE AND SEGMENT DISCLOSURES
|
|
For the Years Ended
|
|||||||||||||||||||
|
February 28, 2019
(1)
|
|
February 28, 2018
(2)
|
|
February 28, 2017
(2)
|
|||||||||||||||
North America
(3)
|
599
|
|
|
66.2
|
%
|
|
540
|
|
|
58.0
|
%
|
|
659
|
|
|
50.3
|
%
|
|||
Europe, Middle East and Africa
|
222
|
|
|
24.6
|
%
|
|
278
|
|
|
29.8
|
%
|
|
461
|
|
|
35.2
|
%
|
|||
Latin America
|
7
|
|
|
0.8
|
%
|
|
15
|
|
|
1.6
|
%
|
|
35
|
|
|
2.7
|
%
|
|||
Asia Pacific
|
76
|
|
|
8.4
|
%
|
|
99
|
|
|
10.6
|
%
|
|
154
|
|
|
11.8
|
%
|
|||
|
$
|
904
|
|
|
100.0
|
%
|
|
$
|
932
|
|
|
100.0
|
%
|
|
$
|
1,309
|
|
|
100.0
|
%
|
|
For the Years Ended
|
||||||||||
|
February 28, 2019
(1)
|
|
February 28, 2018
(2)
|
|
February 28, 2017
(2)
|
||||||
Enterprise software and services
|
$
|
355
|
|
|
$
|
388
|
|
|
$
|
345
|
|
BlackBerry Technology Solutions
|
204
|
|
|
163
|
|
|
151
|
|
|||
Licensing, IP and other
|
286
|
|
|
196
|
|
|
126
|
|
|||
Handheld devices
|
13
|
|
|
64
|
|
|
374
|
|
|||
SAF
|
46
|
|
|
121
|
|
|
313
|
|
|||
|
$
|
904
|
|
|
$
|
932
|
|
|
$
|
1,309
|
|
|
For the Year Ended
|
||
|
February 28, 2019
|
||
Products and services transferred over time
|
$
|
488
|
|
Products and services transferred at a point in time
|
416
|
|
|
Total
|
$
|
904
|
|
|
Accounts Receivable
|
|
Deferred Revenue
|
|
Deferred Commissions
|
||||||
Opening balance as at March 1, 2018 (as adjusted for ASC 606)
|
$
|
151
|
|
|
$
|
292
|
|
|
$
|
21
|
|
Increases due to invoicing of new or existing contracts, associated contract acquisition costs, or other
|
671
|
|
|
563
|
|
|
23
|
|
|||
Increase due to Cylance acquisition
|
33
|
|
|
95
|
|
|
—
|
|
|||
Decreases due to payment, fulfillment of performance obligations, or other
|
(661
|
)
|
|
(600
|
)
|
|
(21
|
)
|
|||
Increase, net
|
43
|
|
|
58
|
|
|
2
|
|
|||
Closing balance as at February 28, 2019
|
$
|
194
|
|
|
$
|
350
|
|
|
$
|
23
|
|
|
As at February 28, 2019
|
||||||||||||||
|
Less than 12 Months
|
|
12 to 24 Months
|
|
Thereafter
|
|
Total
|
||||||||
Remaining performance obligations
|
$
|
336
|
|
|
$
|
143
|
|
|
$
|
101
|
|
|
$
|
580
|
|
|
As at
|
||||||||||||||
|
February 28, 2019
|
|
February 28, 2018
|
||||||||||||
|
Property, Plant and Equipment, Intangible Assets and Goodwill
|
|
Total Assets
|
|
Property, Plant and Equipment, Intangible Assets and Goodwill
|
|
Total Assets
|
||||||||
Canada
|
$
|
396
|
|
|
$
|
654
|
|
|
$
|
425
|
|
|
$
|
640
|
|
United States
|
2,178
|
|
|
3,089
|
|
|
627
|
|
|
2,922
|
|
||||
Other
|
42
|
|
|
186
|
|
|
58
|
|
|
218
|
|
||||
|
$
|
2,616
|
|
|
$
|
3,929
|
|
|
$
|
1,110
|
|
|
$
|
3,780
|
|
16.
|
CASH FLOW AND ADDITIONAL INFORMATION
|
(a)
|
Certain consolidated statements of cash flow information related to interest and income taxes paid is summarized as follows:
|
|
For the Years Ended
|
||||||||||
|
February 28, 2019
|
|
February 28, 2018
|
|
February 28, 2017
|
||||||
Interest paid during the year
|
$
|
24
|
|
|
$
|
39
|
|
|
$
|
48
|
|
Income taxes paid during the year
|
6
|
|
|
6
|
|
|
10
|
|
|||
Income tax refunds received during the year
|
15
|
|
|
7
|
|
|
19
|
|
(b)
|
Additional information
|
•
|
the Company’s plans, strategies and objectives, including the anticipated benefits of its strategic initiatives and its intentions to grow revenue and increase and enhance its product and service offerings;
|
•
|
the Company’s expectations regarding revenue, billings, market share, gross margin and earnings for fiscal 2020;
|
•
|
the Company’s expectations regarding the profitability of BlackBerry Cylance;
|
•
|
the Company’s estimates of purchase obligations and other contractual commitments; and
|
•
|
the Company’s expectations with respect to the sufficiency of its financial resources.
|
•
|
the Company’s ability to enhance, develop, introduce or monetize products and services for the enterprise market in a timely manner with competitive pricing, features and performance;
|
•
|
the Company’s ability to maintain or expand its customer base for its software and services offerings to grow revenue or achieve sustained profitability;
|
•
|
the intense competition faced by the Company;
|
•
|
the occurrence or perception of a breach of the Company’s network or product security measures, or an inappropriate disclosure of confidential or personal information could significantly harm its business;
|
•
|
risks related to the Company’s continuing ability to attract new personnel, retain existing key personnel and manage its staffing effectively;
|
•
|
the Company’s dependence on its relationships with resellers and channel partners;
|
•
|
risks related to acquisitions, divestitures, investments and other business initiatives, which may negatively affect the Company’s results of operations;
|
•
|
risks related to the Company’s products and services being dependent upon interoperability with rapidly changing systems provided by third parties;
|
•
|
the risk that failure to protect the Company’s intellectual property could harm its ability to compete effectively and the Company may not earn the revenues it expects from intellectual property rights;
|
•
|
the risk that the Company could be found to have infringed on the intellectual property rights of others;
|
•
|
the risk that litigation against the Company may result in adverse outcomes;
|
•
|
risks related to the use and management of user data and personal information, which could give rise to liabilities as a result of legal, customer and other third-party requirements;
|
•
|
the Company’s ability to obtain rights to use third-party software;
|
•
|
the risk that network disruptions or other business interruptions could have a material adverse effect on the Company’s business and harm its reputation;
|
•
|
the Company’s ability to generate revenue and profitability through the licensing of security software and services or the BlackBerry brand to device manufacturers;
|
•
|
the substantial asset risk faced by the Company, including the potential for charges related to its long-lived assets and goodwill;
|
•
|
risks related to the Company’s indebtedness, which could adversely affect its operating flexibility and financial condition;
|
•
|
risks related to government regulations applicable to the Company’s products and services, including products containing encryption capabilities, which could negatively impact the Company’s business;
|
•
|
risks related to foreign operations, including fluctuations in foreign currencies;
|
•
|
risks associated with any errors in the Company’s products and services, which can be difficult to remedy and could have a material adverse effect on the Company’s business;
|
•
|
risks related to the failure of the Company’s suppliers, subcontractors, channel partners and representatives to use acceptable ethical business practices or comply with applicable laws;
|
•
|
the Company’s reliance on third parties to manufacture and repair its hardware products;
|
•
|
risks related to fostering an ecosystem of third-party application developers;
|
•
|
risks related to regulations regarding health and safety, hazardous materials usage and conflict minerals, and to product certification risks;
|
•
|
risks related to tax provision changes, the adoption of new tax legislation, or exposure to additional tax liabilities;
|
•
|
risks related to the fluctuation of the Company’s quarterly revenue and operating results;
|
•
|
the volatility of the market price of the Company’s common shares; and
|
•
|
risks related to adverse economic and geopolitical conditions.
|
•
|
Completed the acquisition of Cylance Inc. (“Cylance”), an artificial intelligence and cybersecurity leader, for $1.4 billion in cash, plus the assumption of unvested employee incentive awards;
|
•
|
Announced the development of BlackBerry Spark, the Company’s new Enterprise of Things platform integrating the Company’s endpoint management and embedded software technology to enable secure communication and collaboration between smart endpoints;
|
•
|
Recognized as a leader for the second year in a row in the IDC MarketScape: Worldwide Enterprise Mobility Management Software 2018 Vendor Assessment;
|
•
|
Launched three new automotive software products certified to ISO 26262, the automotive industry’s functional safety standard: BlackBerry’s QNX Hypervisor for Safety, QNX Platform for ADAS 2.0, and QNX OS for Safety 2.0, enabling automakers to accelerate development timelines and reduce cost;
|
•
|
Announced that BlackBerry QNX software is embedded in the advanced driver assistance system, digital instrument clusters, connectivity modules, handsfree systems or infotainment systems of more than 120 million cars on the road;
|
•
|
Entered into a strategic partnership with Microsoft Corp. to offer enterprises BlackBerry Enterprise Bridge, a solution that integrates BlackBerry’s expertise in mobility and security with Microsoft’s cloud and productivity products;
|
•
|
Entered into a multi-year agreement with Jaguar Land Rover to collaborate and develop technology for the automotive manufacturer’s next-generation vehicles;
|
•
|
Collaborated with the Government of Canada to modernize their operations centers with BlackBerry AtHoc during G7 ministerial meetings and the 2018 G7 Summit;
|
•
|
Joined the OmniAir Consortium as an executive member to help advance the testing, certification, and deployment of technologies for connected vehicles and intelligent transportation systems;
|
•
|
Signed a BlackBerry Secure technology and brand licensing deal with Swiss consumer electronics maker Punkt Tronics AG;
|
•
|
Entered into a licensing agreement with Bullitt Group to embed BlackBerry cybersecurity technology into a range of highly-secure, rugged Caterpillar- and Land Rover-branded connected devices to be certified as “BlackBerry Secure”;
|
•
|
Entered into an arrangement with electric vehicle maker BYTON to use BlackBerry QNX technologies for the in-car experience within its first series of production vehicles;
|
•
|
Entered into a multi-year strategic relationship with Samsung Electronics Co. Ltd. to collaborate on integrated solutions to accelerate the digital transformation of their shared business customers;
|
•
|
Launched a new ransomware recovery capability within BlackBerry Workspaces that allows organizations to quickly recover from cyberattacks;
|
•
|
Entered into a global independent software vendor partnership with Check Point Software Technologies Ltd. to mitigate cybersecurity threats;
|
•
|
Entered into a partnership with L-SPARK to help small and medium-sized technology enterprises grow their businesses and bring new products to market using BlackBerry QNX technology;
|
•
|
Entered into a partnership with ONEBIO to use BlackBerry’s renowned carrier-grade network operation center to power a blockchain digital ledger provided by ONEBIO in order to create an ultra-secure global ecosystem for the storing and sharing of medical data;
|
•
|
Launched QNX OS Medical 2.0, a real-time operating system for use in the development of secure medical devices;
|
•
|
Entered into a partnership with Mackenzie Innovation Institute to explore security and connectivity between the BlackBerry Spark platform and its ‘smart’ healthcare technology vision;
|
•
|
Launched a quantum-resistant code signing server to allow software to be digitally signed using a scheme that will be difficult to breach with a quantum computer;
|
•
|
Entered into a partnership with Virginia Tech to help advance the Department of Mechanical Engineering’s connected and autonomous vehicle research and provide hands-on training with BlackBerry QNX software;
|
•
|
Expanded a partnership with Renesas to offer an integrated virtualization, functional safety and secure development environment for the Renesas R-Car system-on-chip devices;
|
•
|
Announced a new Security Credential Management System service based on BlackBerry’s Certicom technology to help the private and public sectors come together to accelerate the development of Smart Cities and Intelligent Transportation Systems;
|
•
|
Launched QNX Platform for Digital Cockpits, the world’s first digital cockpit solution to allow automakers to combine customer experience with safety;
|
•
|
Launched BlackBerry Secure feature packs for Enterprise of Things device manufacturers to securely build smart products;
|
•
|
Expanded its partnerships with Android and PLDT Enterprise, through Smart Communications Inc. to provide MiCab, an online taxi-hailing platform, with an integrated, secure enterprise cloud solution that maintains data privacy, meets compliance and accelerates service delivery;
|
•
|
Expanded its partner ecosystem by growing enterprise ISV partners by 25 percent in the last year, signing on 140 new channel partners to the BlackBerry Enterprise Partner Program in the fiscal second quarter, signing four new channel partners to the BlackBerry QNX Distributor & Value-Added Integrator programs, and adding AWS as a cloud partner;
|
•
|
Announced a commitment by the Government of Canada to invest up to CAD$40 Million to support the Company’s investment in the development of BlackBerry QNX software for autonomous cars;
|
•
|
Entered into a contract with NATO Communications and Information Agency for BlackBerry’s SecuSUITE for Government to encrypt conversations of technology and cyber leaders;
|
•
|
BlackBerry Cylance was recognized as a leader in five distinct categories of the 2019 Cybersecurity Excellence Awards: Best Cybersecurity Company, Most Innovative Cybersecurity Company, Endpoint Detection and Response, Endpoint Security, and Best Cybersecurity Podcast;
|
•
|
Launched CylancePERSONA, the first proactive endpoint behavioral analytics solution;
|
•
|
Announced that Verizon added BlackBerry Cylance’s artificial intelligence driven antivirus security solutions to its industry-leading Managed Security Services portfolio; and
|
•
|
Established a new subsidiary, BlackBerry Government Solutions, a new independent wholly-owned subsidiary that will accelerate the company’s Federal Risk and Authorization Management Program (FedRAMP) initiatives and deepen ties with U.S. federal agencies.
|
•
|
the
Q4 Fiscal 2019 Debentures Fair Value Adjustment
(as defined below under “
Fiscal 2019 Summary Results of Operations
–
Financial Highlights
–
Debentures Fair Value Adjustment
”) of approximately
$6 million
;
|
•
|
restructuring charges from the Resource Allocation Program (“RAP”) consisting of amounts associated with employee termination benefits, facilities, and certain other costs of approximately
$3 million
;
|
•
|
software deferred revenue acquired but not recognized due to business combination accounting rules of approximately
$2 million
;
|
•
|
stock compensation expense of approximately
$14 million
;
|
•
|
amortization of intangible assets acquired through business combinations of approximately
$18 million
;
|
•
|
business acquisition and integration costs incurred through business combinations of approximately
$8 million
;
|
•
|
$9 million
, net of legal costs, recorded from a settlement with Panasonic Corporation relating to previously purchased components utilized by the legacy handheld devices business (the “Panasonic Settlement”); and
|
•
|
income tax recoveries related to the acquisition of Cylance of approximately
$21 million
.
|
•
|
the
Fiscal 2019 Debentures Fair Value Adjustment
(as defined below under “
Fiscal 2019 Summary Results of Operations
–
Financial Highlights
–
Debentures Fair Value Adjustment
”) consisting of charges of approximately
$117 million
;
|
•
|
restructuring charges from RAP and recoveries from the Cost Optimization and Resource Efficiency (“CORE”) program consisting of amounts associated with employee termination benefits, facilities, and certain other costs of approximately
$11 million
on a net basis;
|
•
|
software deferred revenue acquired but not recognized due to business combination accounting rules of approximately
$12 million
;
|
•
|
stock compensation expense of approximately
$68 million
;
|
•
|
amortization of intangible assets acquired through business combinations of approximately
$82 million
;
|
•
|
business acquisition and integration costs incurred through business combinations of approximately
$12 million
;
|
•
|
$9 million
, net of legal costs, recorded from the Panasonic Settlement; and
|
•
|
income tax recoveries related to the acquisition of Cylance of approximately
$21 million
.
|
Q4 Fiscal 2019 Non-GAAP Adjustments
|
|
For the Three Months Ended February 28, 2019
(in millions, except for per share amounts) |
||||||||||||||||||||||
|
Income statement location
|
|
Revenue
|
|
Gross margin (before taxes)
|
|
Gross margin % (before taxes)
|
|
Income before income taxes
|
|
Net income
|
|
Basic earnings per share
|
|||||||||||
As reported
|
|
|
$
|
255
|
|
|
$
|
206
|
|
|
80.8
|
%
|
|
$
|
32
|
|
|
$
|
51
|
|
|
$
|
0.09
|
|
Debentures fair value adjustment
(1)
|
Debentures fair value adjustment
|
|
—
|
|
|
—
|
|
|
—
|
%
|
|
(6
|
)
|
|
(6
|
)
|
|
|
||||||
Restructuring charges
(2)
|
Cost of sales
|
|
—
|
|
|
1
|
|
|
0.4
|
%
|
|
1
|
|
|
1
|
|
|
|
||||||
Restructuring charges
(2)
|
Selling, marketing and administration
|
|
—
|
|
|
—
|
|
|
—
|
%
|
|
2
|
|
|
2
|
|
|
|
||||||
Software deferred revenue acquired
(3)
|
Revenue
(3)
|
|
2
|
|
|
2
|
|
|
0.1
|
%
|
|
2
|
|
|
2
|
|
|
|
||||||
Stock compensation expense
|
Cost of sales
|
|
—
|
|
|
1
|
|
|
0.4
|
%
|
|
1
|
|
|
1
|
|
|
|
||||||
Stock compensation expense
|
Research and development
|
|
—
|
|
|
—
|
|
|
—
|
%
|
|
3
|
|
|
3
|
|
|
|
||||||
Stock compensation expense
|
Selling, marketing and administration
|
|
—
|
|
|
—
|
|
|
—
|
%
|
|
10
|
|
|
10
|
|
|
|
||||||
Acquired intangibles amortization
|
Amortization
|
|
—
|
|
|
—
|
|
|
—
|
%
|
|
18
|
|
|
18
|
|
|
|
||||||
Business acquisition and integration costs
|
Selling, marketing and administration
|
|
—
|
|
|
—
|
|
|
—
|
%
|
|
8
|
|
|
8
|
|
|
|
||||||
Settlements, net
|
Arbitration awards and settlements, net
|
|
—
|
|
|
—
|
|
|
—
|
%
|
|
(9
|
)
|
|
(9
|
)
|
|
|
||||||
Acquisition income tax recoveries
|
Income taxes
|
|
—
|
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
(21
|
)
|
|
|
||||||
|
|
|
$
|
257
|
|
|
$
|
210
|
|
|
81.7
|
%
|
|
$
|
62
|
|
|
$
|
60
|
|
|
$
|
0.11
|
|
Fiscal 2019 Non-GAAP Adjustments
|
|
For the Year Ended February 28, 2019
(in millions, except for per share amounts) |
||||||||||||||||||||||
|
Income statement location
|
|
Revenue
|
|
Gross margin (before taxes)
|
|
Gross margin % (before taxes)
|
|
Net income before income taxes
|
|
Net income
|
|
Basic earnings per share
|
|||||||||||
As reported
|
|
|
$
|
904
|
|
|
$
|
698
|
|
|
77.2
|
%
|
|
$
|
77
|
|
|
$
|
93
|
|
|
$
|
0.17
|
|
Debentures fair value adjustment
(1)
|
Debentures fair value adjustment
|
|
—
|
|
|
—
|
|
|
—
|
%
|
|
(117
|
)
|
|
(117
|
)
|
|
|
||||||
Restructuring charges
(2)
|
Cost of sales
|
|
—
|
|
|
2
|
|
|
0.2
|
%
|
|
2
|
|
|
2
|
|
|
|
||||||
Restructuring charges
(2)
|
Research and development
|
|
—
|
|
|
—
|
|
|
—
|
%
|
|
2
|
|
|
2
|
|
|
|
||||||
Restructuring charges
(2)
|
Selling, marketing and administration
|
|
—
|
|
|
—
|
|
|
—
|
%
|
|
7
|
|
|
7
|
|
|
|
||||||
Software deferred revenue acquired
(3)
|
Revenue
(3)
|
|
12
|
|
|
12
|
|
|
0.3
|
%
|
|
12
|
|
|
12
|
|
|
|
||||||
Stock compensation expense
|
Cost of sales
|
|
—
|
|
|
4
|
|
|
0.5
|
%
|
|
4
|
|
|
4
|
|
|
|
||||||
Stock compensation expense
|
Research and development
|
|
—
|
|
|
—
|
|
|
—
|
%
|
|
12
|
|
|
12
|
|
|
|
||||||
Stock compensation expense
|
Selling, marketing and administration
|
|
—
|
|
|
—
|
|
|
—
|
%
|
|
52
|
|
|
52
|
|
|
|
||||||
Acquired intangibles amortization
|
Amortization
|
|
—
|
|
|
—
|
|
|
—
|
%
|
|
82
|
|
|
82
|
|
|
|
||||||
Business acquisition and integration costs
|
Selling, marketing and administration
|
|
—
|
|
|
—
|
|
|
—
|
%
|
|
12
|
|
|
12
|
|
|
|
||||||
Settlements, net
|
Arbitration awards and settlements, net
|
|
—
|
|
|
—
|
|
|
—
|
%
|
|
(9
|
)
|
|
(9
|
)
|
|
|
||||||
Acquisition income tax recoveries
|
Income taxes
|
|
—
|
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
(21
|
)
|
|
|
||||||
Adjusted
|
|
|
$
|
916
|
|
|
$
|
716
|
|
|
78.2
|
%
|
|
$
|
136
|
|
|
$
|
131
|
|
|
$
|
0.24
|
|
•
|
a fair value adjustment associated with the Company’s convertible debentures of approximately
$34 million
(the “
Q4 Fiscal 2018 Debentures Fair Value Adjustment
”);
|
•
|
selective patent abandonment of approximately
$2 million
;
|
•
|
RAP charges of approximately
$26 million
;
|
•
|
software deferred revenue acquired but not recognized due to business combination accounting rules of approximately
$6 million
;
|
•
|
stock compensation expense of approximately
$13 million
;
|
•
|
amortization of intangible assets acquired through business combinations of approximately
$22 million
;
|
•
|
an interest true-up gain relating to the interest paid under the Nokia arbitration of
$1 million
; and
|
•
|
true-ups relating to legacy royalty arrangements under the handheld devices business of
$1 million
.
|
•
|
a long-lived asset impairment charge associated with the Company’s handheld devices business (the “
Fiscal 2018 LLA Impairment Charge
”), recognized when the carrying value exceeds the fair value of an asset group of
$11 million
;
|
•
|
a fair value adjustment associated with the Company’s convertible debentures of approximately
$191 million
;
|
•
|
selective patent abandonment of approximately
$4 million
;
|
•
|
RAP charges of approximately
$78 million
;
|
•
|
software deferred revenue acquired but not recognized due to business combination accounting rules of approximately
$35 million
;
|
•
|
stock compensation expense of approximately
$49 million
;
|
•
|
amortization of intangible assets acquired through business combinations of approximately
$95 million
;
|
•
|
business acquisition and integration costs incurred through business combinations of approximately
$14 million
;
|
•
|
net arbitration awards related to the Qualcomm and Nokia arbitrations of
$683 million
;
|
•
|
net interest income related to the Qualcomm and Nokia arbitrations of
$123 million
; and
|
•
|
true-ups relating to legacy royalty arrangements under the handheld devices business of
$1 million
.
|
|
|
For the Three Months Ended February 28, 2018
(in millions) |
|
For the Year Ended February 28, 2018
(in millions) |
|||||||||||||||||||||||||||||
|
Income Statement Location
|
|
Revenue
|
|
Gross Margin
|
|
Income (loss) before income taxes
|
|
Net income (loss)
|
|
Revenue
|
|
Gross Margin
|
|
Income before income taxes
|
|
Net income
|
||||||||||||||||
As reported
|
|
|
$
|
233
|
|
|
$
|
177
|
|
|
$
|
(14
|
)
|
|
$
|
(10
|
)
|
|
$
|
932
|
|
|
$
|
670
|
|
|
$
|
406
|
|
|
$
|
405
|
|
LLA Impairment Charge
|
Impairment of long-lived assets
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11
|
|
|
11
|
|
||||||||
Debentures fair value adjustment
|
Debentures fair value adjustment
|
|
—
|
|
|
—
|
|
|
(34
|
)
|
|
(34
|
)
|
|
—
|
|
|
—
|
|
|
191
|
|
|
191
|
|
||||||||
Selective patent abandonment
|
Loss on sale, disposal and abandonment of long-lived assets
|
|
—
|
|
|
—
|
|
|
2
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
4
|
|
||||||||
Restructuring charges
|
Cost of sales
|
|
—
|
|
|
3
|
|
|
3
|
|
|
3
|
|
|
—
|
|
|
11
|
|
|
11
|
|
|
11
|
|
||||||||
Restructuring charges
|
Research and development
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|
5
|
|
||||||||
Restructuring charges
|
Selling, marketing and administration
|
|
—
|
|
|
—
|
|
|
23
|
|
|
23
|
|
|
—
|
|
|
—
|
|
|
62
|
|
|
62
|
|
||||||||
Software deferred revenue acquired
|
Revenue
|
|
6
|
|
|
6
|
|
|
6
|
|
|
6
|
|
|
35
|
|
|
35
|
|
|
35
|
|
|
35
|
|
||||||||
Stock compensation expense
|
Cost of sales
|
|
—
|
|
|
1
|
|
|
1
|
|
|
1
|
|
|
—
|
|
|
4
|
|
|
4
|
|
|
4
|
|
||||||||
Stock compensation expense
|
Research and development
|
|
—
|
|
|
—
|
|
|
3
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
12
|
|
|
12
|
|
||||||||
Stock compensation expense
|
Selling, marketing and administration
|
|
—
|
|
|
—
|
|
|
9
|
|
|
9
|
|
|
—
|
|
|
—
|
|
|
33
|
|
|
33
|
|
||||||||
Acquired intangibles amortization
|
Amortization
|
|
—
|
|
|
—
|
|
|
22
|
|
|
22
|
|
|
—
|
|
|
—
|
|
|
95
|
|
|
95
|
|
||||||||
Arbitration awards, net
|
Arbitration awards and settlement, net
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(683
|
)
|
|
(683
|
)
|
||||||||
Arbitration awards, net
|
Investment Income (loss), net
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
(123
|
)
|
|
(123
|
)
|
||||||||
Legacy royalty adjustments
|
Cost of sales
|
|
—
|
|
|
1
|
|
|
1
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
1
|
|
|
1
|
|
||||||||
Business acquisition and integration costs
|
Selling, marketing and administration
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14
|
|
|
14
|
|
||||||||
Adjusted
|
|
|
$
|
239
|
|
|
$
|
188
|
|
|
$
|
21
|
|
|
$
|
25
|
|
|
$
|
967
|
|
|
$
|
721
|
|
|
$
|
78
|
|
|
$
|
77
|
|
|
|
For the Three Months Ended February 28, 2019
(in millions) |
|
For the Year Ended February 28, 2019
(in millions) |
||||
Operating income
|
|
$
|
28
|
|
|
$
|
60
|
|
Non-GAAP adjustments to operating income
|
|
|
|
|
||||
Debentures fair value adjustment
|
|
(6
|
)
|
|
(117
|
)
|
||
RAP charges
|
|
3
|
|
|
11
|
|
||
Software deferred revenue acquired
|
|
2
|
|
|
12
|
|
||
Stock compensation expense
|
|
14
|
|
|
68
|
|
||
Acquired intangibles amortization
|
|
18
|
|
|
82
|
|
||
Business acquisition and integration costs
|
|
8
|
|
|
12
|
|
||
Arbitration awards and settlement, net
|
|
(9
|
)
|
|
(9
|
)
|
||
Total non-GAAP adjustments to operating income
|
|
30
|
|
|
59
|
|
||
Non-GAAP operating income
|
|
58
|
|
|
119
|
|
||
Amortization
|
|
33
|
|
|
149
|
|
||
Acquired intangibles amortization
|
|
(18
|
)
|
|
(82
|
)
|
||
Adjusted EBITDA
|
|
$
|
73
|
|
|
$
|
186
|
|
Adjusted revenue (per above)
|
|
257
|
|
|
916
|
|
||
Adjusted EBITDA margin %
|
|
28%
|
|
20%
|
|
|
For the Three Months Ended February 28, 2018
(in millions) |
|
For the Year Ended February 28, 2018
(in millions) |
||||
Operating income (loss)
|
|
$
|
(17
|
)
|
|
$
|
283
|
|
Non-GAAP adjustments to operating income (loss)
|
|
|
|
|
||||
LLA Impairment Charge
|
|
—
|
|
|
11
|
|
||
Debentures fair value adjustment
|
|
(34
|
)
|
|
191
|
|
||
Selective patent abandonment
|
|
2
|
|
|
4
|
|
||
RAP charges
|
|
26
|
|
|
78
|
|
||
Software deferred revenue acquired
|
|
6
|
|
|
35
|
|
||
Stock compensation expense
|
|
13
|
|
|
49
|
|
||
Acquired intangibles amortization
|
|
22
|
|
|
95
|
|
||
Business acquisition and integration costs
|
|
—
|
|
|
14
|
|
||
Arbitration awards and settlements, net
|
|
—
|
|
|
(683
|
)
|
||
Legacy royalty adjustments
|
|
1
|
|
|
1
|
|
||
Total non-GAAP adjustments to operating income (loss)
|
|
36
|
|
|
(205
|
)
|
||
Non-GAAP operating income
|
|
19
|
|
|
78
|
|
||
Amortization
|
|
39
|
|
|
177
|
|
||
Acquired intangibles amortization
|
|
(22
|
)
|
|
(95
|
)
|
||
Adjusted EBITDA
|
|
$
|
36
|
|
|
$
|
160
|
|
Adjusted revenue (per above)
|
|
239
|
|
|
967
|
|
||
Adjusted EBITDA margin %
|
|
15%
|
|
17%
|
|
As at and for the Fiscal Years Ended
(in millions, except for share and per share amounts)
|
||||||||||||||||||
|
February 28, 2019
|
|
February 28, 2018
|
|
Change
|
|
February 28, 2017
|
|
Change
|
||||||||||
Revenue
(1)(2)
|
$
|
904
|
|
|
$
|
932
|
|
|
$
|
(28
|
)
|
|
$
|
1,309
|
|
|
$
|
(377
|
)
|
Gross margin
(1)(2)
|
698
|
|
|
670
|
|
|
28
|
|
|
617
|
|
|
53
|
|
|||||
Operating expenses
(1)(2)
|
638
|
|
|
387
|
|
|
251
|
|
|
1,798
|
|
|
(1,411
|
)
|
|||||
Investment income (loss), net
(2)
|
17
|
|
|
123
|
|
|
(106
|
)
|
|
(27
|
)
|
|
150
|
|
|||||
Income (loss) before income taxes
|
77
|
|
|
406
|
|
|
(329
|
)
|
|
(1,208
|
)
|
|
1,614
|
|
|||||
Provision for (recovery of) income taxes
|
(16
|
)
|
|
1
|
|
|
(17
|
)
|
|
(2
|
)
|
|
3
|
|
|||||
Net income (loss)
|
$
|
93
|
|
|
$
|
405
|
|
|
$
|
(312
|
)
|
|
$
|
(1,206
|
)
|
|
$
|
1,611
|
|
Earnings (loss) per share - reported
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
$
|
0.17
|
|
|
$
|
0.76
|
|
|
|
|
$
|
(2.30
|
)
|
|
|
||||
Diluted
|
$
|
0.00
|
|
|
$
|
0.74
|
|
|
|
|
$
|
(2.30
|
)
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Weighted-average number of shares outstanding (000’s)
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
540,477
|
|
|
532,888
|
|
|
|
|
525,265
|
|
|
|
|||||||
Diluted
(3)
|
616,467
|
|
|
546,008
|
|
|
|
|
525,265
|
|
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Total assets
|
$
|
3,929
|
|
|
$
|
3,780
|
|
|
$
|
149
|
|
|
$
|
3,296
|
|
|
$
|
484
|
|
Total long-term financial liabilities
|
$
|
665
|
|
|
$
|
782
|
|
|
$
|
(117
|
)
|
|
$
|
591
|
|
|
$
|
191
|
|
(1)
|
See “
Non-GAAP Financial Measures
” for the impact of the
Fiscal 2019 Non-GAAP Adjustments
on adjusted revenue, adjusted gross margin and adjusted operating expenses in fiscal
2019
.
|
(2)
|
See “
Non-GAAP Financial Measures
” for the impact of the
Fiscal 2018 Non-GAAP Adjustments
on adjusted revenue, adjusted gross margin, adjusted operating expenses and adjusted investment income (loss), net in fiscal
2018
.
|
(3)
|
Diluted earnings (loss) per share on a U.S. GAAP basis for fiscal 2018 and fiscal 2017 does not include the dilutive effect of the Debentures as they would be anti-dilutive. Diluted loss per share on a U.S. GAAP basis for fiscal 2017 does not include the dilutive effect of stock-based compensation as to do so would be anti-dilutive. See Note 12 to the Consolidated Financial Statements for the fiscal year ended
February 28, 2019
for calculation of the diluted weighted average number of shares outstanding.
|
•
|
non-GAAP total Company revenue growth of between 23% and 27%;
|
•
|
double-digit percentage billings growth;
|
•
|
year-over-year total non-GAAP software and services revenue growth of between 8% and 10%, excluding the revenue growth of BlackBerry Cylance;
|
•
|
combined Enterprise software and services and BTS revenue growth of between 12% and 16%, with BTS revenue growing faster than Enterprise software and services revenue, and with increased market share;
|
•
|
BlackBerry Cylance revenue growth of between 25% and 30% over an annualized base of approximately $170 million, with increased market share;
|
•
|
Licensing, IP and other revenue to decline by approximately 5%; and
|
•
|
SAF revenue of between $10 million and $20 million.
|
|
For the Fiscal Years Ended
(in millions)
|
|||||||||||||||||||
|
February 28, 2019
|
|
February 28, 2018
|
|
Change
|
|||||||||||||||
Revenue by Geography
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
North America
|
$
|
599
|
|
|
66.2
|
%
|
|
$
|
540
|
|
|
58.0
|
%
|
|
$
|
59
|
|
|
10.9
|
%
|
Europe, Middle East and Africa
|
222
|
|
|
24.6
|
%
|
|
278
|
|
|
29.8
|
%
|
|
(56
|
)
|
|
(20.1
|
)%
|
|||
Latin America
|
7
|
|
|
0.8
|
%
|
|
15
|
|
|
1.6
|
%
|
|
(8
|
)
|
|
(53.3
|
)%
|
|||
Asia Pacific
|
76
|
|
|
8.4
|
%
|
|
99
|
|
|
10.6
|
%
|
|
(23
|
)
|
|
(23.2
|
)%
|
|||
|
$
|
904
|
|
|
100.0
|
%
|
|
$
|
932
|
|
|
100.0
|
%
|
|
$
|
(28
|
)
|
|
(3.0
|
)%
|
|
For the Years Ended
(in millions)
|
|||||||||||||||||||
|
February 28, 2019
|
|
February 28, 2018
|
|
Change
|
|||||||||||||||
Revenue by Product and Service
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Enterprise software and services
(1)(2)
|
$
|
367
|
|
|
40.1
|
%
|
|
$
|
423
|
|
|
43.7
|
%
|
|
$
|
(56
|
)
|
|
(13.2
|
)%
|
BTS
|
204
|
|
|
22.3
|
%
|
|
163
|
|
|
16.9
|
%
|
|
41
|
|
|
25.2
|
%
|
|||
Licensing, IP and other
|
286
|
|
|
31.2
|
%
|
|
196
|
|
|
20.3
|
%
|
|
90
|
|
|
45.9
|
%
|
|||
Handheld devices
|
13
|
|
|
1.4
|
%
|
|
64
|
|
|
6.6
|
%
|
|
(51
|
)
|
|
(79.7
|
)%
|
|||
SAF
|
46
|
|
|
5.0
|
%
|
|
121
|
|
|
12.5
|
%
|
|
(75
|
)
|
|
(62.0
|
)%
|
|||
|
$
|
916
|
|
|
100.0
|
%
|
|
$
|
967
|
|
|
100.0
|
%
|
|
$
|
(51
|
)
|
|
(5.3
|
)%
|
(1)
|
See “
Non-GAAP Financial Measures
” for the relevant
Fiscal 2019 Non-GAAP Adjustments
made to enterprise software and services revenue.
|
(2)
|
See “
Non-GAAP Financial Measures
” for the relevant
Fiscal 2018 Non-GAAP Adjustments
made to enterprise software and services revenue.
|
|
For the Fiscal Years Ended
(in millions)
|
|||||||||||||||||||
|
February 28, 2019
|
|
February 28, 2018
|
|
Change
|
|||||||||||||||
|
|
|
% of
Revenue
|
|
|
|
% of
Revenue
|
|
|
|
% of
Change
|
|||||||||
Revenue
(1)(2)
|
$
|
904
|
|
|
|
|
$
|
932
|
|
|
|
|
$
|
(28
|
)
|
|
(3.0
|
)%
|
||
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Research and development
(1)(2)
|
219
|
|
|
24.2
|
%
|
|
239
|
|
|
25.6
|
%
|
|
$
|
(20
|
)
|
|
(8.4
|
)%
|
||
Selling, marketing and administration
(1)(2)
|
406
|
|
|
44.9
|
%
|
|
467
|
|
|
50.1
|
%
|
|
(61
|
)
|
|
(13.1
|
)%
|
|||
Amortization
(1)(2)
|
136
|
|
|
15.0
|
%
|
|
153
|
|
|
16.4
|
%
|
|
(17
|
)
|
|
(11.1
|
)%
|
|||
Impairment of long-lived assets
(2)
|
—
|
|
|
—
|
%
|
|
11
|
|
|
1.2
|
%
|
|
(11
|
)
|
|
(100.0
|
)%
|
|||
Loss on sale, disposal and abandonment of long-lived assets
(2)
|
3
|
|
|
0.3
|
%
|
|
9
|
|
|
1.0
|
%
|
|
(6
|
)
|
|
(66.7
|
)%
|
|||
Debentures fair value adjustment
(1)(2)
|
(117
|
)
|
|
(12.9
|
)%
|
|
191
|
|
|
20.5
|
%
|
|
(308
|
)
|
|
(161.3
|
)%
|
|||
Arbitration awards and settlements, net
(1)(2)
|
(9
|
)
|
|
(1.0
|
)%
|
|
(683
|
)
|
|
(73.3
|
)%
|
|
674
|
|
|
(98.7
|
)%
|
|||
Total
|
$
|
638
|
|
|
70.5
|
%
|
|
$
|
387
|
|
|
41.5
|
%
|
|
$
|
251
|
|
|
64.9
|
%
|
(1)
|
See “
Non-GAAP Financial Measures
” for the impact of the
Fiscal 2019 Non-GAAP Adjustments
on revenue and operating expenses in fiscal
2019
.
|
(2)
|
See “
Non-GAAP Financial Measures
” for the impact of the
Fiscal 2018 Non-GAAP Adjustments
on revenue and operating expenses in fiscal
2018
.
|
|
For the Fiscal Years Ended
(in millions)
|
||||||||||||||||||||||
|
Included in Amortization
|
|
Included in Cost of sales
|
||||||||||||||||||||
|
February 28, 2019
|
|
February 28, 2018
|
|
Change
|
|
February 28, 2019
|
|
February 28, 2018
|
|
Change
|
||||||||||||
Property, plant and equipment
|
$
|
14
|
|
|
$
|
18
|
|
|
$
|
(4
|
)
|
|
$
|
6
|
|
|
$
|
18
|
|
|
$
|
(12
|
)
|
Intangible assets
|
122
|
|
|
135
|
|
|
(13
|
)
|
|
7
|
|
|
6
|
|
|
1
|
|
||||||
Total
|
$
|
136
|
|
|
$
|
153
|
|
|
$
|
(17
|
)
|
|
$
|
13
|
|
|
$
|
24
|
|
|
$
|
(11
|
)
|
|
For the Three Months Ended
(in millions, except for share and per share amounts)
|
||||||||||||||||
|
February 28, 2019
|
|
February 28, 2018
|
|
Change
|
||||||||||||
Revenue
(1)(2)
|
255
|
|
|
100.0
|
%
|
|
233
|
|
|
100.0
|
%
|
|
22
|
|
|||
Gross margin
(1)(2)
|
206
|
|
|
80.8
|
%
|
|
177
|
|
|
76.0
|
%
|
|
29
|
|
|||
Operating expenses
(1)(2)
|
178
|
|
|
69.8
|
%
|
|
194
|
|
|
83.3
|
%
|
|
(16
|
)
|
|||
Investment income, net
(1)
|
4
|
|
|
1.6
|
%
|
|
3
|
|
|
1.3
|
%
|
|
1
|
|
|||
Income (loss) before income taxes
|
32
|
|
|
12.5
|
%
|
|
(14
|
)
|
|
(6.0
|
)%
|
|
46
|
|
|||
Recovery of income taxes
|
(19
|
)
|
|
(7.5
|
)%
|
|
(4
|
)
|
|
(1.7
|
)%
|
|
(15
|
)
|
|||
Net income (loss)
|
$
|
51
|
|
|
20.0
|
%
|
|
$
|
(10
|
)
|
|
(4.3
|
)%
|
|
$
|
61
|
|
Earnings (loss) per share - reported
|
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.09
|
|
|
|
|
$
|
(0.02
|
)
|
|
|
|
$
|
0.11
|
|
||
Diluted
(3)
|
$
|
0.08
|
|
|
|
|
$
|
(0.06
|
)
|
|
|
|
$
|
0.14
|
|
||
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted-average number of shares outstanding (000’s)
|
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
547,272
|
|
|
|
|
536,594
|
|
|
|
|
|
||||||
Diluted
(3)
|
615,593
|
|
|
|
|
597,094
|
|
|
|
|
|
(1)
|
See “
Non-GAAP Financial Measures
” for the impact of the
Q4 Fiscal 2019 Non-GAAP Adjustments
on revenue, gross margin, operating expenses, and investment income (loss), net in the fourth quarter of fiscal
2019
.
|
(2)
|
See “
Non-GAAP Financial Measures
” for the impact of the
Q4 Fiscal 2018 Non-GAAP Adjustments
on revenue, gross margin, operating expenses and investment income, net in the fourth quarter of fiscal
2018
.
|
(3)
|
Diluted loss per share on a U.S. GAAP basis in the fourth quarter of
2018
does not include the dilutive effect of stock-based compensation as to do so would be anti-dilutive.
|
|
For the Three Months Ended
(in millions)
|
|||||||||||||||||||
|
February 28, 2019
|
|
February 28, 2018
|
|
Change
|
|||||||||||||||
Revenue by Geography
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
North America
|
$
|
176
|
|
|
69.0
|
%
|
|
$
|
147
|
|
|
63.1
|
%
|
|
$
|
29
|
|
|
19.7
|
%
|
Europe, Middle East and Africa
|
61
|
|
|
23.9
|
%
|
|
63
|
|
|
27.0
|
%
|
|
(2
|
)
|
|
(3.2
|
)%
|
|||
Latin America
|
1
|
|
|
0.4
|
%
|
|
4
|
|
|
1.7
|
%
|
|
(3
|
)
|
|
(75.0
|
)%
|
|||
Asia Pacific
|
17
|
|
|
6.7
|
%
|
|
19
|
|
|
8.2
|
%
|
|
(2
|
)
|
|
(10.5
|
)%
|
|||
|
$
|
255
|
|
|
100.0
|
%
|
|
$
|
233
|
|
|
100.0
|
%
|
|
$
|
22
|
|
|
9.4
|
%
|
(1)
|
See “
Non-GAAP Financial Measures
” for the relevant
Q4 Fiscal 2019 Non-GAAP Adjustments
made to Enterprise software and services revenue.
|
(2)
|
See “
Non-GAAP Financial Measures
” for the relevant
Q4 Fiscal 2018 Non-GAAP Adjustments
made to Enterprise software and services revenue.
|
|
For the Three Months Ended
(in millions)
|
|||||||||||||||||||
|
February 28, 2019
|
|
November 30, 2018
|
|
February 28, 2018
|
|||||||||||||||
|
|
|
% of
Revenue
|
|
|
|
% of
Revenue
|
|
|
|
% of
Revenue
|
|||||||||
Revenue
(1)(2)(3)
|
$
|
255
|
|
|
|
|
$
|
226
|
|
|
|
|
$
|
233
|
|
|
|
|||
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Research and development
(1)(2)(3)
|
52
|
|
|
20.4
|
%
|
|
55
|
|
|
24.3
|
%
|
|
58
|
|
|
24.9
|
%
|
|||
Selling, marketing and administration
(1)(2)(3)
|
109
|
|
|
42.7
|
%
|
|
91
|
|
|
40.3
|
%
|
|
131
|
|
|
56.2
|
%
|
|||
Amortization
(1)(2)(3)
|
31
|
|
|
12.2
|
%
|
|
33
|
|
|
14.6
|
%
|
|
37
|
|
|
15.9
|
%
|
|||
Loss on sale, disposal and abandonment of long-lived assets
(3)
|
1
|
|
|
0.4
|
%
|
|
2
|
|
|
0.9
|
%
|
|
2
|
|
|
0.9
|
%
|
|||
Debentures fair value adjustment
(1)(2)(3)
|
(6
|
)
|
|
(2.4
|
)%
|
|
(69
|
)
|
|
(30.5
|
)%
|
|
(34
|
)
|
|
(14.6
|
)%
|
|||
Arbitration awards and settlements, net
(1)
|
(9
|
)
|
|
(3.5
|
)%
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
|||
Total
|
$
|
178
|
|
|
69.8
|
%
|
|
$
|
112
|
|
|
49.6
|
%
|
|
$
|
194
|
|
|
83.3
|
%
|
(1)
|
See “
Non-GAAP Financial Measures
” for the impact of the
Q4 Fiscal 2019 Non-GAAP Adjustments
on revenue and operating expenses in the fourth quarter of fiscal
2019
.
|
(2)
|
In the
third quarter
of fiscal
2019
, the Company had software deferred revenue acquired but not recognized due to business combination accounting rules of approximately
$2 million
, and also recorded a non-cash
income
associated with a change in the fair value of the Debentures of approximately
$69 million
(the “
Q3 Fiscal 2019 Debentures Fair Value Adjustment
”); RAP charges of approximately
$1 million
in selling, marketing and administration expenses; stock compensation expense of approximately
$3 million
and
$11 million
in research and development and selling, marketing and administration expenses, respectively; amortization of intangible assets acquired through business combinations of approximately
$20 million
in amortization expense; and business acquisition and integration costs incurred through business combinations of approximately
$5 million
in selling, marketing and administration expense (collectively the “
Q3 Fiscal 2019 Non-GAAP Adjustments
”).
|
(3)
|
See “
Non-GAAP Financial Measures
” for the impact of the
Q4 Fiscal 2018 Non-GAAP Adjustments
on revenue and operating expenses in the fourth quarter of fiscal
2018
.
|
|
For the Three Months Ended
(in millions)
|
||||||||||||||||||||||
|
Included in Amortization
|
|
Included in Cost of sales
|
||||||||||||||||||||
|
February 28,
2019 |
|
February 28,
2018 |
|
Change
|
|
February 28,
2019 |
|
February 28,
2018 |
|
Change
|
||||||||||||
Property, plant and equipment
|
$
|
4
|
|
|
$
|
5
|
|
|
$
|
(1
|
)
|
|
$
|
1
|
|
|
$
|
2
|
|
|
$
|
(1
|
)
|
Intangible assets
|
27
|
|
|
32
|
|
|
(5
|
)
|
|
1
|
|
|
—
|
|
|
1
|
|
||||||
Total
|
$
|
31
|
|
|
$
|
37
|
|
|
$
|
(6
|
)
|
|
$
|
2
|
|
|
$
|
2
|
|
|
$
|
—
|
|
|
As at
(in millions)
|
||||||||||
|
February 28, 2019
|
|
February 28, 2018
|
|
Change
|
||||||
Cash and cash equivalents
|
$
|
548
|
|
|
$
|
816
|
|
|
$
|
(268
|
)
|
Restricted cash
|
34
|
|
|
39
|
|
|
(5
|
)
|
|||
Short-term investments
|
368
|
|
|
1,443
|
|
|
(1,075
|
)
|
|||
Long-term investments
|
55
|
|
|
55
|
|
|
—
|
|
|||
Cash, cash equivalents, and investments
|
$
|
1,005
|
|
|
$
|
2,353
|
|
|
$
|
(1,348
|
)
|
|
As at
(in millions)
|
||||||||||
|
February 28, 2019
|
|
February 28, 2018
|
|
Change
|
||||||
Current assets
|
$
|
1,194
|
|
|
$
|
2,545
|
|
|
$
|
(1,351
|
)
|
Current liabilities
|
471
|
|
|
411
|
|
|
60
|
|
|||
Working capital
|
$
|
723
|
|
|
$
|
2,134
|
|
|
$
|
(1,411
|
)
|
|
For the Fiscal Years Ended
(in millions)
|
||||||||||
|
February 28, 2019
|
|
February 28, 2018
|
|
Change
|
||||||
Net cash flows provided by (used in):
|
|
|
|
|
|
||||||
Operating activities
|
$
|
100
|
|
|
$
|
704
|
|
|
$
|
(604
|
)
|
Investing activities
|
(375
|
)
|
|
(630
|
)
|
|
255
|
|
|||
Financing activities
|
5
|
|
|
(10
|
)
|
|
15
|
|
|||
Effect of foreign exchange gain (loss) on cash and cash equivalents
|
(3
|
)
|
|
6
|
|
|
(9
|
)
|
|||
Net increase (decrease) in cash and cash equivalents
|
$
|
(273
|
)
|
|
$
|
70
|
|
|
$
|
(343
|
)
|
•
|
pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company;
|
•
|
provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and
|
•
|
provide reasonable assurance regarding the prevention or timely detection of unauthorized acquisitions, use or dispositions of the Company’s assets that could have a material effect on the Company’s financial statements.
|
/s/ Ernst & Young LLP
|
|
Waterloo, Canada,
|
|
April 5, 2019
|
|
1.
|
I have reviewed this annual report on Form 40-F of BlackBerry Limited;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the issuer as of, and for, the periods presented in this report;
|
4.
|
The issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the issuer and have:
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a.
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b.
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c.
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Evaluated the effectiveness of the issuer’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d.
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Disclosed in this report any change in the issuer’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the issuer’s internal control over financial reporting; and
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5.
|
The issuer’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the issuer’s auditors and the audit committee of the issuer’s board of directors (or persons performing the equivalent function):
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Date: April 5, 2019
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/s/ John Chen
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|
Name: John Chen
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Title: Chief Executive Officer
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1.
|
I have reviewed this annual report on Form 40-F of BlackBerry Limited;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the issuer as of, and for, the periods presented in this report;
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4.
|
The issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the issuer and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the issuer’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the issuer’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the issuer’s internal control over financial reporting; and
|
5.
|
The issuer’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the issuer’s auditors and the audit committee of the issuer’s board of directors (or persons performing the equivalent function):
|
Date: April 5, 2019
|
/s/ Steven Capelli
|
|
Name: Steven Capelli
|
|
Title: Chief Financial Officer
|
/s/ John Chen
|
|
Name: John Chen
|
|
Title: Chief Executive Officer
|
|
Date: April 5, 2019
|
|
|
|
/s/ Steven Capelli
|
|
Name: Steven Capelli
|
|
Title: Chief Financial Officer
|
|
Date: April 5, 2019
|
|