SEC Comment Letter for BLACKBERRY Ltd (BB) (CIK 0001070235) (BB) — Jun 13, 2012
BLACKBERRY Ltd (BB) (CIK 0001070235)
Date: June 13, 2012 · CIK: 0001070235 · Accession: 0000000000-12-030763
AI Filing Summary & Sentiment
Reasoning
Letter
June 13, 2012 Via E -mail Mr. Brian Bidulka Chief Financial Officer Research In Motion Limited 295 Phillip Street Waterloo, Ontario Canada, N2L 3W8
Re: Research In Motion Limited Form 40-F for the fiscal year ended March 3 , 201 2 Filed April 9, 2012 File No. 0-29898
Dear Mr. Bidulka:
We have reviewed your filing and have the following comments. In some of our comments, we may ask you to provide us with information so we may better understand your disclosure.
Please respond to this letter within ten business days by amending your filing, by providing the requested information, or by advising us when you will provide the requested response. If you do not believe our comments apply to your facts and circumstances or do not believe an amendment is appropriate, please tell us why in your response.
After reviewing any amendment to your filing and the information you provide in response to these comments, we may have additional comments.
Form 40-F for the Year Ended March 3 , 201 2
Exhibit 1.2
Note 6. Intangible assets, net, page 20
1. Regarding your purchase of the Nortel patents, we note that the majority of the purchase price was allocated to intangible assets. Please tell us the amount and the nature of the account recognized for the balance of the purchase price. Refer to your basis in the accounting literature.
Mr. Brian Bidulka Research In Motion Limited June 13, 2012 Page 2
Exhibit 1.3
Results of Operations – Fiscal 2012 Compared to Fiscal 2011 and Fiscal 2010 Fiscal year ended March 3, 2012 compared to fiscal year ended February 26, 2011
Overview, page 4
2. Please expand the discussion to address the following comments.
Refer to the second sentence in the third paragraph. Disclose your current worldwide market share as compared to the prior year. Discuss how the “bring -your-own device” strategies of your customers impacted your current operations and how it will impact your future operations. In addition, discuss how you plan to address such strategies of your customers. We understand the both Halliburton and the U.S. military have recently decided to use your competitors’ smartphones instead of their Blackberry smartp hones. In your earnings call, you discuss your plans to refocus on your enterprise business and to significantly change your services business. Expand your discussion to discuss such plans and their expected impact on your future results of operations. I n addition, discuss the impact the availability of Apps has on your operations. Refer to the last sentence in the last paragraph. Discuss in detail how you expect to utilize the Nortel patent portfolio and its expected impact on your future results of operations.
Revenue, page 22
3. Please expand the discussion to address the following comments.
Discuss in more detail the underlying reasons for the significant decrease in revenue attributable to sales in the United States and whether you expect this tren d to continue or change and the reasons why. We note that your market share decreased 41% to 23% in the current year and revenues from the United States decreased 46% from the prior year. We note your discussion on pages 24 and 39. Discuss the significan ce of having BlackBerry handheld devices in the market for over a year without the timely introduction of the next generation of BlackBerry handheld devices. Discuss what hardware and software upgrades were necessary to compete in the smartphone market an d why such upgrades were not identified sooner. In addition, discuss how you corrected this issue to be more competitive in the smartphone market. Discuss your BlackBerry 7 incentive plan and how such plan will impact your future revenues. Tell us and exp lain why 300,000 BlackBerry PlayBook tablets shipped were not recognized as revenues. It is unclear from the Critical Accounting and Estimates section of the MD&A what revenue recognition criteria were not met. In addition,
Mr. Brian Bidulka Research In Motion Limited June 13, 2012 Page 3
tell us in detail the nature o f your sell -through to end users and how you are accounting for such sales. Refer to service revenue discussion. Quantify the decrease in service revenues related to the United States subscriber base. In addition, discuss the reasons for such decrease an d whether you expect this trend to continue or change and the reasons why. Refer to the last paragraph. Quantify the decrease in your United States smartphone market share. In addition, expand to discuss in detail whether you expect the factors that cont ributed to such decrease will continue or change and the reasons why. We note your discussion on page 39.
Gross Margin, page 24
4. Since the Blackberry 7 is a new model, please tell us why no provision was recognized for the Blackberry 6.
Cost of Sales, p age 41
5. Please expand to discuss the reasons for purchasing the patent and patent application and how such purchases will impact your future revenues and results of operations.
* * * *
Please file all correspondence over EDGAR. We urge all persons who are responsible for the accuracy and adequacy of the disclosure in the filing to be certain that the filing includes the information the Securities Exchange Act of 1934 and all applicable Exchange Act rules require. Since the compa ny and its management are in possession of all facts relating to a company’s disclosure, they are responsible for the accuracy and adequacy of the disclosures they have made.
In responding to our comments, please provide a written statement from the company acknowledging that:
the company is responsible for the adequacy and accuracy of the disclosure in the filing;
staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action wi th respect to the filing; and
the company may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.
You may contact Dean Suehiro, Senior Staff Accountant , at (202) 551 -3384 or Robert S. Littlepage, Accountant Branch Chief, at (202) 551 -3361 if you have questions regarding
Mr. Brian Bidulka Research In Motion Limited June 13, 2012 Page 4
comments on the financial statements and related matters. Please contact Greg Dundas, Staff Attorney at (202) 551 -3436 or me at (202) 551 -3810 with any other questions.
Sincerely,
/s/ Robert S. Littlepage for
Show Raw Text
June 13, 2012
Via E -mail
Mr. Brian Bidulka
Chief Financial Officer
Research In Motion Limited
295 Phillip Street
Waterloo, Ontario
Canada, N2L 3W8
Re: Research In Motion Limited
Form 40-F for the fiscal year ended March 3 , 201 2
Filed April 9, 2012
File No. 0-29898
Dear Mr. Bidulka:
We have reviewed your filing and have the following comments. In some of our
comments, we may ask you to provide us with information so we may better understand your
disclosure.
Please respond to this letter within ten business days by amending your filing, by
providing the requested information, or by advising us when you will provide the requested
response. If you do not believe our comments apply to your facts and circumstances or do not
believe an amendment is appropriate, please tell us why in your response.
After reviewing any amendment to your filing and the information you provide in
response to these comments, we may have additional comments.
Form 40-F for the Year Ended March 3 , 201 2
Exhibit 1.2
Note 6. Intangible assets, net, page 20
1. Regarding your purchase of the Nortel patents, we note that the majority of the purchase
price was allocated to intangible assets. Please tell us the amount and the nature of the
account recognized for the balance of the purchase price. Refer to your basis in the
accounting literature.
Mr. Brian Bidulka
Research In Motion Limited
June 13, 2012
Page 2
Exhibit 1.3
Results of Operations – Fiscal 2012 Compared to Fiscal 2011 and Fiscal 2010
Fiscal year ended March 3, 2012 compared to fiscal year ended February 26, 2011
Overview, page 4
2. Please expand the discussion to address the following comments.
Refer to the second sentence in the third paragraph. Disclose your current worldwide
market share as compared to the prior year. Discuss how the “bring -your-own
device” strategies of your customers impacted your current operations and how it will
impact your future operations. In addition, discuss how you plan to address such
strategies of your customers. We understand the both Halliburton and the U.S.
military have recently decided to use your competitors’ smartphones instead of their
Blackberry smartp hones.
In your earnings call, you discuss your plans to refocus on your enterprise business
and to significantly change your services business. Expand your discussion to discuss
such plans and their expected impact on your future results of operations. I n addition,
discuss the impact the availability of Apps has on your operations.
Refer to the last sentence in the last paragraph. Discuss in detail how you expect to
utilize the Nortel patent portfolio and its expected impact on your future results of
operations.
Revenue, page 22
3. Please expand the discussion to address the following comments.
Discuss in more detail the underlying reasons for the significant decrease in revenue
attributable to sales in the United States and whether you expect this tren d to continue
or change and the reasons why. We note that your market share decreased 41% to
23% in the current year and revenues from the United States decreased 46% from the
prior year. We note your discussion on pages 24 and 39.
Discuss the significan ce of having BlackBerry handheld devices in the market for
over a year without the timely introduction of the next generation of BlackBerry
handheld devices. Discuss what hardware and software upgrades were necessary to
compete in the smartphone market an d why such upgrades were not identified sooner.
In addition, discuss how you corrected this issue to be more competitive in the
smartphone market.
Discuss your BlackBerry 7 incentive plan and how such plan will impact your future
revenues.
Tell us and exp lain why 300,000 BlackBerry PlayBook tablets shipped were not
recognized as revenues. It is unclear from the Critical Accounting and Estimates
section of the MD&A what revenue recognition criteria were not met. In addition,
Mr. Brian Bidulka
Research In Motion Limited
June 13, 2012
Page 3
tell us in detail the nature o f your sell -through to end users and how you are
accounting for such sales.
Refer to service revenue discussion. Quantify the decrease in service revenues
related to the United States subscriber base. In addition, discuss the reasons for such
decrease an d whether you expect this trend to continue or change and the reasons
why.
Refer to the last paragraph. Quantify the decrease in your United States smartphone
market share. In addition, expand to discuss in detail whether you expect the factors
that cont ributed to such decrease will continue or change and the reasons why. We
note your discussion on page 39.
Gross Margin, page 24
4. Since the Blackberry 7 is a new model, please tell us why no provision was recognized
for the Blackberry 6.
Cost of Sales, p age 41
5. Please expand to discuss the reasons for purchasing the patent and patent application and
how such purchases will impact your future revenues and results of operations.
* * * *
Please file all correspondence over EDGAR. We urge all persons who are responsible
for the accuracy and adequacy of the disclosure in the filing to be certain that the filing includes
the information the Securities Exchange Act of 1934 and all applicable Exchange Act rules
require. Since the compa ny and its management are in possession of all facts relating to a
company’s disclosure, they are responsible for the accuracy and adequacy of the disclosures they
have made.
In responding to our comments, please provide a written statement from the company
acknowledging that:
the company is responsible for the adequacy and accuracy of the disclosure in the filing;
staff comments or changes to disclosure in response to staff comments do not foreclose
the Commission from taking any action wi th respect to the filing; and
the company may not assert staff comments as a defense in any proceeding initiated by
the Commission or any person under the federal securities laws of the United States.
You may contact Dean Suehiro, Senior Staff Accountant , at (202) 551 -3384 or Robert S.
Littlepage, Accountant Branch Chief, at (202) 551 -3361 if you have questions regarding
Mr. Brian Bidulka
Research In Motion Limited
June 13, 2012
Page 4
comments on the financial statements and related matters. Please contact Greg Dundas, Staff
Attorney at (202) 551 -3436 or me at (202) 551 -3810 with any other questions.
Sincerely,
/s/ Robert S. Littlepage for
Larry Spirgel
Assistant Director