What changed in this filing

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Item 1. Financial Statements

2021-12-22 compared with 2021-09-23 · 213 added, 164 removed, 626 unchanged (38% of the section changed)

4 unchanged sentences

Consolidated Balance Sheets

August 31, 2021 February 28, 2021

November 30, 2021 February 28, 2021

Cash and cash equivalents (note 3) $ 271 $ 214

18 unchanged sentences

Operating lease liabilities 73 90

Other long-term liabilities (note 4) 4 6

Other long-term liabilities 4 6

Long-term debentures (note 6) 673 720

12 unchanged sentences

On behalf of the Board:

Chen Barbara Stymiest

Chen Lisa Disbrow

Director Director

2 unchanged sentences

Consolidated Statements of Shareholders’ Equity

Three Months Ended August 31, 2021

Three Months Ended November 30, 2021

Capital Stock

2 unchanged sentences

Comprehensive Loss Total

Balance as at May 31, 2021 $ 2,834 $ ( 1,368 ) $ ( 10 ) $ 1,456

Net loss — ( 144 ) — ( 144 )

Balance as at August 31, 2021 $ 2,845 $ ( 1,512 ) $ ( 15 ) $ 1,318

Net income — 74 — 74

Other comprehensive loss — — ( 5 ) ( 5 )

1 unchanged sentence

Shares issued:

Exercise of stock options 1 — — 1

Balance as at August 31, 2021 $ 2,845 $ ( 1,512 ) $ ( 15 ) $ 1,318

Three Months Ended August 31, 2020

Employee share purchase plan 4 — — 4

Balance as at November 30, 2021 $ 2,857 $ ( 1,438 ) $ ( 20 ) $ 1,399

Three Months Ended November 30, 2020

Capital Stock

2 unchanged sentences

Comprehensive Loss Total

Balance as at May 31, 2020 $ 2,777 $ ( 838 ) $ ( 26 ) $ 1,913

Balance as at August 31, 2020 $ 2,788 $ ( 861 ) $ ( 13 ) $ 1,914

Net loss — ( 130 ) — ( 130 )

3 unchanged sentences

Exercise of stock options 1 — — 1

Balance as at August 31, 2020 $ 2,788 $ ( 861 ) $ ( 13 ) $ 1,914

Employee share purchase plan 3 — — 3

Balance as at November 30, 2020 $ 2,803 $ ( 991 ) $ ( 9 ) $ 1,803

See notes to consolidated financial statements.

2 unchanged sentences

Consolidated Statements of Shareholders’ Equity

Six Months Ended August 31, 2021

Nine Months Ended November 30, 2021

Capital Stock

9 unchanged sentences

Employee share purchase plan (note 7) 7 — — 7

Balance as at August 31, 2021 $ 2,845 $ ( 1,512 ) $ ( 15 ) $ 1,318

Six Months Ended August 31, 2020

Balance as at November 30, 2021 $ 2,857 $ ( 1,438 ) $ ( 20 ) $ 1,399

Nine Months Ended November 30, 2020

Capital Stock

10 unchanged sentences

Employee share purchase plan 7 — — 7

Balance as at August 31, 2020 $ 2,788 $ ( 861 ) $ ( 13 ) $ 1,914

Balance as at November 30, 2020 $ 2,803 $ ( 991 ) $ ( 9 ) $ 1,803

See notes to consolidated financial statements.

2 unchanged sentences

Consolidated Statements of Operations

Three Months Ended Six Months Ended

August 31, 2021 August 31, 2020 August 31, 2021 August 31, 2020

Three Months Ended Nine Months Ended

November 30, 2021 November 30, 2020 November 30, 2021 November 30, 2020

Revenue (note 11) $ 184 $ 218 $ 533 $ 683

9 unchanged sentences

66 276 491 1,285

Operating loss ( 141 ) ( 22 ) ( 199 ) ( 667 )

Investment loss, net ( 1 ) ( 5 ) ( 3 ) ( 5 )

Loss before income taxes ( 142 ) ( 27 ) ( 202 ) ( 672 )

Operating income (loss) 51 ( 127 ) ( 148 ) ( 794 )

Investment income (loss), net (note 3 and note 6) 25 ( 1 ) 22 ( 6 )

Income (loss) before income taxes 76 ( 128 ) ( 126 ) ( 800 )

Provision for (recovery of) income taxes (note 5) 2 2 6 ( 11 )

Net loss $ ( 144 ) $ ( 23 ) $ ( 206 ) $ ( 659 )

Loss per share (note 8)

Net income (loss) $ 74 $ ( 130 ) $ ( 132 ) $ ( 789 )

Earnings (loss) per share (note 8)

Basic $ 0.13 $ ( 0.23 ) $ ( 0.23 ) $ ( 1.41 )

3 unchanged sentences

(United States dollars, in millions) (unaudited)

Consolidated Statements of Comprehensive Loss

Three Months Ended Six Months Ended

August 31, 2021 August 31, 2020 August 31, 2021 August 31, 2020

Net loss $ ( 144 ) $ ( 23 ) $ ( 206 ) $ ( 659 )

Consolidated Statements of Comprehensive Income (Loss)

Three Months Ended Nine Months Ended

November 30, 2021 November 30, 2020 November 30, 2021 November 30, 2020

Net income (loss) $ 74 $ ( 130 ) $ ( 132 ) $ ( 789 )

Other comprehensive income (loss)

Net change in fair value and amounts reclassified to net loss from derivatives designated as cash flow hedges during the period, net of income taxes of nil for the three and six months ended August 31, 2021 and August 31, 2020 (note 9) ( 2 ) 4 ( 1 ) 3

Foreign currency translation adjustment, net of income taxes of nil for the three and six months ended August 31, 2021 (net of income taxes of $1 million and $1 million respectively, for the three and six months ended August 31,2020) ( 3 ) 2 ( 2 ) 3

Net change in fair value from instrument-specific credit risk on the Debentures, net of income taxes of nil for the three and six months ended August 31, 2021 (net of income taxes of $1 million and $2 million, respectively, for the three and six months ended August 31, 2020) (note 6) — 7 1 14

Net change in fair value and amounts reclassified to net loss from derivatives designated as cash flow hedges during the period, net of income taxes of nil for the three and nine months ended November 30, 2021 and November 30, 2020 (note 9) — — ( 1 ) 3

Foreign currency translation adjustment, net of income taxes of nil for the three and nine months ended November 30, 2021 (net of income taxes of $1 million and nil, respectively, for the three and nine months ended November 30, 2020) ( 4 ) 1 ( 6 ) 5

Net change in fair value from instrument-specific credit risk on the Debentures, net of income taxes of nil for the three and nine months ended November 30, 2021 (net of income taxes of $2 million and nil, respectively, for the three and nine months ended November 30, 2020) (note 6) ( 1 ) 3 — 16

Other comprehensive income (loss) ( 5 ) 4 ( 7 ) 24

Comprehensive loss $ ( 149 ) $ ( 10 ) $ ( 208 ) $ ( 639 )

Comprehensive income (loss) $ 69 $ ( 126 ) $ ( 139 ) $ ( 765 )

See notes to consolidated financial statements.

2 unchanged sentences

Consolidated Statements of Cash Flows

Six Months Ended

August 31, 2021 August 31, 2020

Nine Months Ended

November 30, 2021 November 30, 2020

Cash flows from operating activities

Net loss $ ( 132 ) $ ( 789 )

Adjustments to reconcile net loss to net cash used in operating activities:

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

Amortization 142 149

Stock-based compensation 25 33

Impairment of goodwill — 594

Gain on sale of investment (note 3) ( 22 ) —

Impairment of goodwill (note 3) — 594

Impairment of long-lived assets — 21

11 unchanged sentences

Deferred revenue ( 59 ) ( 81 )

Net cash used in operating activities ( 18 ) —

Net cash provided by (used in) operating activities ( 37 ) 30

Cash flows from investing activities

Acquisition of long-term investments ( 1 ) ( 1 )

Distribution from long-term investments 35 —

Acquisition of property, plant and equipment ( 6 ) ( 5 )

7 unchanged sentences

Payment of finance lease liability — ( 1 )

Net cash provided by financing activities 5 5

Effect of foreign exchange gain on cash, cash equivalents, restricted cash, and restricted cash equivalents — 1

Net increase in cash, cash equivalents, restricted cash, and restricted cash equivalents during the period 100 460

Repurchase of 3.75% Debentures — ( 610 )

Issuance of 1.75% Debentures — 365

Net cash provided by (used in) financing activities 9 ( 236 )

Effect of foreign exchange gain (loss) on cash, cash equivalents, restricted cash, and restricted cash equivalents ( 1 ) 1

Net increase (decrease) in cash, cash equivalents, restricted cash, and restricted cash equivalents during the period 82 ( 153 )

Cash, cash equivalents, restricted cash, and restricted cash equivalents, beginning of period 218 426

10 unchanged sentences

In the opinion of management, all normal recurring adjustments considered necessary for fair presentation have been included in these interim consolidated financial statements.

Operating results for the three and six months ended August 31, 2021 are not necessarily indicative of the results that may be expected for the full year ending February 28, 2022.

Operating results for the three and nine months ended November 30, 2021 are not necessarily indicative of the results that may be expected for the full year ending February 28, 2022.

The consolidated balance sheet at February 28, 2021 was derived from the audited Annual Financial Statements but does not contain all of the footnote disclosures from the Annual Financial Statements.

2 unchanged sentences

As a result of the internal reporting reorganization, the Company is now organized and managed as three reportable operating segments:

Cyber Security, IoT (collectively, “Software & Services”), and Licensing and Other, as further discussed in Note 11.

Cybersecurity, IoT (collectively, “Software & Services”), and Licensing and Other, as further discussed in Note 11.

Risks and Uncertainties

31 unchanged sentences

The guidance is effective for interim and annual periods beginning after December 15, 2021.

The Company will adopt this guidance in the first quarter of fiscal 2023 and does not expect the adoption to have a material impact on its results of operations, financial position and disclosures as the accounting model used by the Company was not impacted and the Company already utilizes the if-converted method in its calculation of diluted earnings per share relating to the Debentures (as defined in Note 6).

In October 2021, the FASB issued a new accounting standard on the topic of business combinations, accounting for contract assets and contract liabilities from contracts with customers, ASU 2021-08.

The amendment in this update improves the accounting for acquired revenue contracts with customers in a business combination by addressing diversity in practice and inconsistency.

This update requires entities to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with ASC 606, Revenue from Contracts with Customers.

The guidance is effective for interim and annual periods beginning after December 15, 2022 and requires entities to prospectively apply business combinations occurring on or after the effective date of the amendments.

The Company will adopt this guidance in the first quarter of fiscal 2024.

The Company is currently evaluating the impact the standard will have on its results of operations, financial position and disclosures, but at this time the Company does not expect the adoption to have a material impact on its results of operations, financial position and disclosures for business combinations completed prior to adoption.

Should the Company complete business acquisitions subsequent to adoption, the impact in future periods compared to current accounting standards will depend on the contract assets and contract liabilities acquired.

In November 2021, the FASB issued a new accounting standard on the topic of government assistance, ASU 2021-10.

The standard requires additional disclosures for transactions with a government accounted for by applying a grant or contribution accounting model by analogy, including:

(i) information about the nature of the transactions and related accounting policy used to account for the transactions;

(ii) the line items on the balance sheet and income statement affected by these transactions including amounts applicable to each line;

and (iii) significant terms and conditions of the transactions, including commitments and contingencies.

The update also requires entities that omit any of the information because it is legally prohibited from being disclosed to include a statement to that effect.

The guidance is effective for annual periods beginning after December 15, 2021.

The Company will adopt this guidance in the first quarter of fiscal 2023 and does not expect the adoption to have a material impact on its results of operations, financial position and disclosures.

9 unchanged sentences

The fair value hierarchy also requires the Company to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

BlackBerry Limited

Notes to the Consolidated Financial Statements

In millions of United States dollars, except share and per share data, and except as otherwise indicated (unaudited)

Recurring Fair Value Measurements

5 unchanged sentences

The Company’s investments largely consist of debt securities issued by major corporate and banking organizations, the provincial and federal governments of Canada, international government banking organizations and the United States Department of the Treasury and are all investment grade.

The Company also holds certain private equity investments without readily determinable fair value and a limited amount of public equity securities following the initial public offering by the issuer of a previous private equity investment.

The Company also holds certain private equity investments without readily determinable fair value, as well as certain public equity securities obtained through an initial public offering of a previously held private equity investment.

For a description of how the fair values of the 1.75% Debentures (as defined in Note 6) and 3.75% Debentures (as defined in Note 6) were determined, see the “Convertible debentures” accounting policies in Note 1 to the Annual Financial Statements.

1 unchanged sentence

Non-Recurring Fair Value Measurements

Upon the occurrence of certain events, the Company re-measures the fair value of long-lived assets, including property, plant and equipment, operating lease ROU assets, intangible assets and goodwill.

BlackBerry Limited

Notes to the Consolidated Financial Statements

In millions of United States dollars, except share and per share data, and except as otherwise indicated (unaudited)

Upon the occurrence of certain events, the Company re-measures the fair value of non-marketable equity investments for which it utilizes the measurement alternative, and long-lived assets, including property, plant and equipment, operating lease ROU assets, intangible assets and goodwill if an impairment or observable price adjustment is recognized in the current period.

Non-Marketable Equity Investments Measured Using the Measurement Alternative

Non-marketable equity investments measured using the measurement alternative include investments in privately held companies without readily determinable fair values in which the Company does not own a controlling interest or have significant influence.

The estimation of fair value used in the fair value measurements required the use of significant unobservable inputs, and as a result, the fair value measurements were classified as Level 3.

Goodwill Impairment

6 unchanged sentences

For further discussion of the Goodwill Impairment Charge in fiscal 2021, see Note 3 to the Annual Financial Statements.

In its annual goodwill impairment test in the fourth quarter of fiscal 2021, the Company’s estimate of cash flows indicated that such carrying values were expected to be recovered for all reporting units.

Nonetheless, it is reasonably possible that future judgements, assumptions and estimates of cash flows may change resulting in the need to write down those assets to fair value.

Reductions in the Company’s estimates of long-term revenue growth rates could potentially result in impacts that would be material to the consolidated financial statements, including the fair value of the Company’s goodwill, particularly in relation to its BlackBerry Spark reporting unit.

BlackBerry Limited

Notes to the Consolidated Financial Statements

In millions of United States dollars, except share and per share data, and except as otherwise indicated (unaudited)

Cash, Cash Equivalents and Investments

The components of cash, cash equivalents and investments by fair value level as at August 31, 2021 were as follows:

Cost Basis Unrealized

The components of cash, cash equivalents and investments by fair value level as at November 30, 2021 were as follows:

Cost Basis (1)

Gains Unrealized

Losses Fair Value Cash and

12 unchanged sentences

treasury bills/notes 24 — — 24 12 12 — —

Corporate notes/bonds 4 — 4 — 4 — —

632 — — 632 163 441 — 28

Other investments 17 5 — 22 — — 22 —

$ 776 $ 5 $ ( 9 ) $ 772 $ 271 $ 442 $ 30 $ 29

______________________________

(1) Cost basis for other investments includes the effect of returns of capital.

BlackBerry Limited

20 unchanged sentences

$ 811 $ ( 7 ) $ 804 $ 214 $ 525 $ 37 $ 4 $ 24

As at August 31, 2021, the Company had private equity investments without readily determinable fair value of $ 38 million (February 28, 2021 - $ 37 million).

There were no realized gains or losses on available-for-sale securities for the three and six months ended August 31, 2021 (realized losses of nil for the three and six months ended August 31, 2020).

The Company has restricted cash and cash equivalents, consisting of cash and securities pledged as collateral to major banking partners in support of the Company’s requirements for letters of credit.

As at November 30, 2021, the Company had private non-marketable equity investments without readily determinable fair value of $ 30 million (February 28, 2021 - $ 37 million).

During the three and nine months ended November 30, 2021, the Company recorded an upward adjustment to the carrying value of certain non-marketable equity investments without readily determinable fair value of $ 5 million resulting from observable price changes in orderly transactions for identical or similar securities which have been included in investment income (loss), net on the Company’s consolidated statements of operations.

The Company also received a distribution from a non-marketable equity investment without readily determinable fair value in the amount of $ 35 million, consisting of a return of capital of $ 13 million and a realized gain of $ 22 million included in investment income (loss), net on the Company’s consolidated statements of operations.

There were no realized gains or losses on available-for-sale securities for the three and nine months ended November 30, 2021 (realized losses of nil for the three and nine months ended November 30, 2020).

The Company has restricted cash and cash equivalents and restricted short-term investments, consisting of cash and securities pledged as collateral to major banking partners in support of the Company’s requirements for letters of credit.

These letters of credit support certain leasing arrangements entered into in the ordinary course of business.

2 unchanged sentences

however, the Company can continue to invest the funds and receive investment income thereon.

The following table provides a reconciliation of cash, cash equivalents, restricted cash, and restricted cash equivalents as at August 31, 2021 and February 28, 2021 from the consolidated balance sheets to the consolidated statements of cash flows:

August 31, 2021 February 28, 2021

The following table provides a reconciliation of cash, cash equivalents, restricted cash, and restricted cash equivalents as at November 30, 2021 and February 28, 2021 from the consolidated balance sheets to the consolidated statements of cash flows:

November 30, 2021 February 28, 2021

Cash and cash equivalents $ 271 $ 214

4 unchanged sentences

In millions of United States dollars, except share and per share data, and except as otherwise indicated (unaudited)

The contractual maturities of available-for-sale investments as at August 31, 2021 and February 28, 2021 were as follows:

August 31, 2021 February 28, 2021

The contractual maturities of available-for-sale investments as at November 30, 2021 and February 28, 2021 were as follows:

November 30, 2021 February 28, 2021

Cost Basis Fair Value Cost Basis Fair Value

2 unchanged sentences

$ 642 $ 633 $ 609 $ 602

As at August 31, 2021, the Company had investments with continuous unrealized losses totaling $ 8 million, consisting of unrealized losses on equity securities (February 28, 2021 - continuous unrealized losses totaling $ 7 million).

As at November 30, 2021 and February 28, 2021, the Company had no available-for-sale debt securities with continuous unrealized losses .

CONSOLIDATED BALANCE SHEET DETAILS

Accounts Receivable, Net of Allowance

The allowance for credit losses as at August 31, 2021 was $ 9 million (February 28, 2021 - $ 10 million).

The allowance for credit losses as at November 30, 2021 was $ 5 million (February 28, 2021 - $ 10 million).

The Company recognizes current estimated credit losses for accounts receivable, net of allowance.

7 unchanged sentences

The following table sets forth the activity in the Company’s allowance for credit losses:

August 31, 2021

November 30, 2021

Beginning balance as of February 29, 2020 $ 9

3 unchanged sentences

Current period recovery for expected credit losses ( 1 )

Ending balance of the allowance for credit loss as at August 31, 2021 $ 9

The allowance for credit losses as at August 31, 2021 consists of $ 2 million (February 28, 2021 - $ 3 million) relating to CECL estimated based on days past due and region and $ 7 million (February 28, 2021 - $ 7 million) relating to specific customers that were evaluated separately.

There was one customer that comprised more than 10% of accounts receivable as at August 31, 2021 (February 28, 2021 - one customer comprised more than 10%).

Other Current Assets

As at August 31, 2021 and February 28, 2021, other current assets included items such as the current portion of deferred commissions and prepaid expenses, among other items, none of which were greater than 5% of the current assets balance in all periods presented.

Write-offs charged against the allowance ( 4 )

Ending balance of the allowance for credit loss as at November 30, 2021 $ 5

The allowance for credit losses as at November 30, 2021 consists of $ 2 million (February 28, 2021 - $ 3 million) relating to CECL estimated based on days past due and region and $ 3 million (February 28, 2021 - $ 7 million) relating to specific customers that were evaluated separately.

There was one customer that comprised more than 10% of accounts receivable as at November 30, 2021 (February 28, 2021 - one customer comprised more than 10%).

BlackBerry Limited

1 unchanged sentence

In millions of United States dollars, except share and per share data, and except as otherwise indicated (unaudited)

Other Current Assets

As at November 30, 2021 and February 28, 2021, other current assets included items such as the current portion of deferred commissions and prepaid expenses, among other items, none of which were greater than 5% of the current assets balance in any of the periods presented.

Property, Plant and Equipment, Net

Property, plant and equipment comprised the following:

August 31, 2021 February 28, 2021

November 30, 2021 February 28, 2021

Buildings, leasehold improvements and other $ 53 $ 67

6 unchanged sentences

Intangible assets comprised the following:

As at August 31, 2021

As at November 30, 2021

Cost Accumulated

11 unchanged sentences

$ 2,015 $ 1,244 $ 771

For the six months ended August 31, 2021, amortization expense related to intangible assets amounted to $ 89 million (six months ended August 31, 2020 - $ 89 million)

Total additions to intangible assets for six months ended August 31, 2021 amounted to $ 14 million (six months ended August 31, 2020 - $ 16 million).

During the six months ended August 31, 2021, additions to intangible assets primarily consisted of payments for intellectual property relating to patent maintenance, registration and license fees.

Based on the carrying value of the identified intangible assets as at August 31, 2021, and assuming no subsequent impairment of the underlying assets, the annual amortization expense for the remainder of fiscal 2022 and each of the five succeeding years is expected to be as follows:

For the nine months ended November 30, 2021, amortization expense related to intangible assets amounted to $ 130 million (nine months ended November 30, 2020 - $ 133 million).

Total additions to intangible assets for the nine months ended November 30, 2021 amounted to $ 22 million (nine months ended November 30, 2020 - $ 23 million).

During the nine months ended November 30, 2021, additions to intangible assets primarily consisted of payments for intellectual property relating to patent maintenance, registration and license fees.

Based on the carrying value of the identified intangible assets as at November 30, 2021, and assuming no subsequent impairment of the underlying assets, the annual amortization expense for the remainder of fiscal 2022 and each of the five succeeding years is expected to be as follows:

fiscal 2022 - $ 34 million;

6 unchanged sentences

In millions of United States dollars, except share and per share data, and except as otherwise indicated (unaudited)

Changes to the carrying amount of goodwill during the six months ended August 31, 2021 were as follows:

Changes to the carrying amount of goodwill during the nine months ended November 30, 2021 were as follows:

Carrying Amount

6 unchanged sentences

dollar denominated goodwill ( 4 )

Carrying amount as at August 31, 2021 $ 848

Carrying amount as at November 30, 2021 $ 845

Other Long-term Assets

As at August 31, 2021 and February 28, 2021, other long-term assets included long-term portion of deferred commission and long-term receivables, among other items, none of which were greater than 5% of total assets in any of the periods presented.

As at November 30, 2021 and February 28, 2021, other long-term assets included long-term portion of deferred commission and long-term receivables, among other items, none of which were greater than 5% of total assets in any of the periods presented.

Accrued Liabilities

Accrued liabilities comprised the following:

August 31, 2021 February 28, 2021

November 30, 2021 February 28, 2021

Operating lease liabilities, current $ 29 $ 33

1 unchanged sentence

Other accrued liabilities include accrued royalties, accrued director fees, accrued vendor liabilities, accrued carrier liabilities, variable incentive accrual and payroll withholding taxes, among other items, none of which were greater than 5% of the current liabilities balance.

Other Long-term Liabilities

Other long-term liabilities consist of the long-term portion of finance lease liabilities and non-lease component liabilities related to the Company’s previous Resource Allocation Program entered into in order to transition the Company from a legacy hardware manufacturer to a licensing driven software business.

For the six months ended August 31, 2021, the Company’s net effective income tax expense rate was approximately 2 % compared to a net effective income tax recovery rate of 2 % for the six months ended August 31, 2020.

For the nine months ended November 30, 2021, the Company’s net effective income tax expense rate was approximately 5 % compared to a net effective income tax recovery rate of 1 % for the nine months ended November 30, 2020.

The Company’s income tax rate reflects the change in unrecognized income tax benefit, if any, and the fact that the Company has a significant valuation allowance against its deferred income tax assets, and in particular, the change in fair value of the Debentures (as defined in Note 6), amongst other items, is offset by a corresponding adjustment of the valuation allowance.

The Company’s net effective income tax rate also reflects the geographic mix of earnings in jurisdictions with different income tax rates.

The Company’s total unrecognized income tax benefits as at August 31, 2021 were $ 19 million (February 28, 2021 - $ 24 million).

As at August 31, 2021, $ 19 million of the unrecognized income tax benefits have been netted against deferred income tax assets and nil has been recorded within income taxes payable on the Company’s consolidated balance sheets.

The Company’s total unrecognized income tax benefits as at November 30, 2021 were $ 19 million (February 28, 2021 - $ 24 million).

As at November 30, 2021, $ 19 million of the unrecognized income tax benefits have been netted against deferred income tax assets and nil has been recorded within income taxes payable on the Company’s consolidated balance sheets.

The Company is subject to ongoing examination by tax authorities in certain jurisdictions in which it operates.

1 unchanged sentence

While the final resolution of audits is uncertain, the Company believes the ultimate resolution of these audits will not have a material adverse effect on its consolidated financial position, liquidity or results of operations.

1.75% Convertible Debentures

BlackBerry Limited

1 unchanged sentence

In millions of United States dollars, except share and per share data, and except as otherwise indicated (unaudited)

1.75% Convertible Debentures

On September 1, 2020, Hamblin Watsa Investment Counsel Ltd., in its capacity as investment manager of Fairfax Financial Holdings Limited ("Fairfax"), and another institutional investor invested in the Company through a $ 365 million private placement of new debentures (the “1.75% Debentures”), which replaced $ 605 million of debentures issued in a private placement on September 7, 2016 (the “3.75% Debentures”) as described below (collectively, the “Debentures”).

private placement of new debentures (the “1.75% Debentures”), which replaced $ 605 million of debentures issued in a private placement on September 7, 2016 (the “3.75% Debentures”) as described below (collectively, the “Debentures”).

Due to the conversion option and other embedded derivatives within the 1.75% Debentures, and consistent with the Company’s accounting for the 3.75% Debentures, the Company has elected to record the 1.75% Debentures, including the debt itself and all embedded derivatives, at fair value and present the 1.75% Debentures as a single hybrid financial instrument.

3 unchanged sentences

The Company originally determined its credit spread by calibrating to observable trades of the 3.75% Debentures and trending the calibrated spread to valuation dates utilizing an appropriate credit index.

The Company’s credit spread was determined to be 7.90 % as of the issuance date of the 1.75% Debentures and 6.46 % as of August 31, 2021.

The Company’s credit spread was determined to be 7.90 % as of the issuance date of the 1.75% Debentures and 6.27 % as of November 30, 2021.

An increase in credit spread will result in a decrease in the fair value of 1.75% Debentures and vice versa.

1 unchanged sentence

The Company determined the implied discount on the 1.75% Debentures by calculating the fair value of the 1.75% Debentures on September 1, 2020 utilizing the above credit spread and other inputs described above.

The following table summarizes the change in fair value of the 1.75% Debentures for the six months ended August 31, 2021, which also represents the total changes through earnings of items classified as Level 3 in the fair value hierarchy:

August 31, 2021

The following table summarizes the change in fair value of the 1.75% Debentures for the nine months ended November 30, 2021, which also represents the total changes through earnings of items classified as Level 3 in the fair value hierarchy:

November 30, 2021

Balance as at February 28, 2021 $ 720

Change in fair value of the Debentures ( 47 )

Balance as at August 31, 2021 $ 782

Balance as at November 30, 2021 $ 673

The difference between the fair value of the 1.75% Debentures and the unpaid principal balance of $ 365 million is $ 308 million.

The following table shows the impact of the changes in fair value of the 1.75% Debentures for the three and six months ended August 31, 2021 and August 31, 2020:

Three Months Ended Six Months Ended

August 31, 2021 August 31, 2020 August 31, 2021 August 31, 2020

Charge associated with the change in fair value from non-credit components recorded in the consolidated statements of operations $ ( 67 ) $ — $ ( 63 ) $ —

Income associated with the change in fair value from instrument-specific credit components recorded in AOCL — — 1 —

Total increase in the fair value of the 1.75% Debentures $ ( 67 ) $ — $ ( 62 ) $ —

For the three and six months ended August 31, 2021, the Company recorded interest expense related to the Debentures of $ 2 million and $ 3 million, respectively, which has been included in investment loss, net on the Company’s consolidated statements of operations (three and six months ended August 31, 2020 - $ 6 million and $ 11 million).

The following table shows the impact of the changes in fair value of the 1.75% Debentures for the three and nine months ended November 30, 2021 and November 30, 2020:

Three Months Ended Nine Months Ended

November 30, 2021 November 30, 2020 November 30, 2021 November 30, 2020

Income (charge) associated with the change in fair value from non-credit components recorded in the consolidated statements of operations $ 110 $ ( 89 ) $ 47 $ ( 89 )

Charge associated with the change in fair value from instrument-specific credit components recorded in AOCL ( 1 ) ( 5 ) — ( 5 )

Total decrease (increase) in the fair value of the 1.75% Debentures $ 109 $ ( 94 ) $ 47 $ ( 94 )

For the three and nine months ended November 30, 2021, the Company recorded interest expense related to the Debentures of $ 2 million and $ 5 million, respectively, which has been included in investment income (loss), net on the Company’s consolidated statements of operations (three and nine months ended November 30, 2020 - $ 2 million and $ 13 million).

BlackBerry Limited

10 unchanged sentences

As the Redemption Amount represented fair value at August 31, 2020 and the Company elected the fair value option for the 3.75% Debentures, the impact to the consolidated statements of operations of the redemption on the fair value was recorded in the second quarter of fiscal 2021.

The following table shows the impact of the changes in fair value of the 3.75% Debentures for the three and six months ended August 31, 2021 and August 31, 2020:

Three Months Ended Six Months Ended

August 31, 2021 August 31, 2020 August 31, 2021 August 31, 2020

The following table shows the impact of the changes in fair value of the 3.75% Debentures for the three and nine months ended November 30, 2021 and November 30, 2020:

Three Months Ended Nine Months Ended

November 30, 2021 November 30, 2020 November 30, 2021 November 30, 2020

Charge associated with the change in fair value from non-credit components recorded in the consolidated statements of operations $ — $ — $ — $ ( 19 )

Income associated with the change in fair value from instrument-specific credit components recorded in AOCL — — — 15

Total decrease in the fair value of the 3.75% Debentures $ — $ ( 11 ) $ — $ ( 4 )

Realized charges associated with the change in fair value from credit components recorded in the consolidated statements of operations on redemption — ( 6 ) — ( 6 )

Realized charges associated with the change in fair value from credit components released from AOCL on redemption — 6 — 6

Total increase in the fair value of the 3.75% Debentures $ — $ — $ — $ ( 4 )

CAPITAL STOCK

The following details the changes in issued and outstanding common shares for the six months ended August 31, 2021:

The following details the changes in issued and outstanding common shares for the nine months ended November 30, 2021:

Capital Stock and

6 unchanged sentences

Common shares issued for employee share purchase plan 735 7

Common shares outstanding as at August 31, 2021 566,995 $ 2,845

The Company had 567 million voting common shares outstanding, 1 million options to purchase voting common shares, 20 million RSUs and 1 million DSUs outstanding as at September 20, 2021.

Common shares outstanding as at November 30, 2021 573,667 $ 2,857

The Company had 574 million voting common shares outstanding, 1 million options to purchase voting common shares, 12 million RSUs and 2 million DSUs outstanding as at December 17, 2021.

In addition, 60.8 million common shares are issuable upon conversion in full of the 1.75% Debentures as described in Note 6.

2 unchanged sentences

In millions of United States dollars, except share and per share data, and except as otherwise indicated (unaudited)

LOSS PER SHARE

The following table sets forth the computation of basic and diluted loss per share:

Three Months Ended Six Months Ended

August 31, 2021 August 31, 2020 August 31, 2021 August 31, 2020

Net loss for basic and diluted loss per share available to common shareholders (1)

EARNINGS (LOSS) PER SHARE

The following table sets forth the computation of basic and diluted earnings (loss) per share:

Three Months Ended Nine Months Ended

November 30, 2021 November 30, 2020 November 30, 2021 November 30, 2020

Net income (loss) for basic earnings (loss) per share available to common shareholders $ 74 $ ( 130 ) $ ( 132 ) $ ( 789 )

Debentures fair value adjustment (1) (2)

( 110 ) — ( 47 ) —

Weighted average number of shares outstanding (000’s) - basic and diluted (1) (2) (3)

interest expense on Debentures (1) (2)

Net loss for diluted loss per share available to common shareholders $ ( 34 ) $ ( 130 ) $ ( 174 ) $ ( 789 )

Weighted average number of shares outstanding (000’s) - basic (3) (4)

571,138 562,443 568,877 559,732

Loss per share - reported

Effect of dilutive securities (000’s)

Conversion of Debentures (1) (2)

60,833 — 60,833 —

Weighted average number of shares and assumed conversions (000’s) diluted 631,971 562,443 629,710 559,732

Earnings (loss) per share - reported

$ 0.13 $ ( 0.23 ) $ ( 0.23 ) $ ( 1.41 )

$ ( 0.05 ) $ ( 0.23 ) $ ( 0.28 ) $ ( 1.41 )

(1) The Company has not presented the dilutive effect of the Debentures using the if-converted method in the calculation of diluted loss per share for the three and six months ended August 31, 2021 and August 31, 2020, as to do so would be antidilutive.

______________________________

(1) The Company has presented the dilutive effect of the Debentures using the if-converted method, assuming conversion at the beginning of the quarter for the three and nine months ended November 30, 2021.

Accordingly, to calculate diluted loss per share, the Company adjusted net income (loss) by eliminating the fair value adjustment made to the Debentures and interest expense incurred on the Debentures for the three and nine months ended November 30, 2021, and added the number of shares that would have been issued upon conversion to the diluted weighted average number of shares outstanding.

See Note 6 for details on the Debentures.

(2) The three and six months ended August 31, 2021, includes approximately 1,421,945 common shares (Exchange Shares) remaining to be issued on the third anniversary date of the Cylance acquisition completed on February 21, 2019, in consideration for the acquisition.

The three and six months ended August 31, 2020, includes approximately 2,802,067 common shares to be issued in equal installments on the two anniversary dates of the Cylance acquisition thereafter, in consideration for the acquisition.

(2) The Company has not presented the dilutive effect of the Debentures using the if-converted method in the calculation of diluted loss per share for the three and nine months ended November 30, 2020, as to do so would be antidilutive.

See Note 6 for details on the Debentures.

(3) The three and nine months ended November 30, 2021, includes approximately 1,421,945 common shares (Exchange Shares) remaining to be issued on the third anniversary date of the Cylance acquisition completed on February 21, 2019, in consideration for the acquisition.

The three and nine months ended November 30, 2020, includes approximately 2,802,067 common shares to be issued in equal installments on the two anniversary dates of the Cylance acquisition thereafter, in consideration for the acquisition.

There are no service or other requirements associated with the issuance of these shares.

(3) The Company has not presented the dilutive effect of in-the-money options and RSUs that will be settled upon vesting by the issuance of new common shares in the calculation of diluted loss per share for the three and six months ended August 31, 2021 and August 31, 2020, as to do so would be antidilutive.

(4) The Company has not presented the dilutive effect of in-the-money options and RSUs that will be settled upon vesting by the issuance of new common shares in the calculation of diluted loss per share for the three and nine months ended November 30, 2021 and November 30, 2020, as to do so would be antidilutive.

BlackBerry Limited

2 unchanged sentences

ACCUMULATED OTHER COMPREHENSIVE LOSS

The changes in AOCL by component net of tax, for the three and six months ended August 31, 2021 and August 31, 2020 were as follows:

Three Months Ended Six Months Ended

August 31, 2021 August 31, 2020 August 31, 2021 August 31, 2020

The changes in AOCL by component net of tax, for the three and nine months ended November 30, 2021 and November 30, 2020 were as follows:

Three Months Ended Nine Months Ended

November 30, 2021 November 30, 2020 November 30, 2021 November 30, 2020

Cash Flow Hedges

Balance, beginning of period $ — $ 2 $ 1 $ ( 1 )

Other comprehensive income (loss) before reclassification ( 2 ) 3 — 1

Amounts reclassified from AOCL into net loss — 1 ( 1 ) 2

Accumulated net unrealized gains (losses) on derivative instruments designated as cash flow hedges $ — $ 2 $ — $ 2

Other comprehensive income before reclassification — 1 — 2

Amounts reclassified from AOCL into net income (loss) — ( 1 ) ( 1 ) 1

Accumulated net unrealized gains on derivative instruments designated as cash flow hedges $ — $ 2 $ — $ 2

Foreign Currency Cumulative Translation Adjustment

Balance, beginning of period $ ( 6 ) $ ( 6 ) $ ( 4 ) $ ( 9 )

Other comprehensive income (loss) before reclassification ( 3 ) 2 ( 2 ) 3

Other comprehensive income (loss) ( 4 ) 2 ( 6 ) 5

Foreign currency cumulative translation adjustment $ ( 10 ) $ ( 4 ) $ ( 10 ) $ ( 4 )

1 unchanged sentence

Balance, beginning of period $ ( 8 ) $ ( 8 ) $ ( 9 ) $ ( 22 )

Other comprehensive income before reclassification — 7 1 14

Other comprehensive income (loss) before reclassification ( 1 ) ( 5 ) — 10

Amounts reclassified from AOCL into net income (loss) — 7 — 6

Change in fair value from instruments-specific credit risk on Debentures $ ( 9 ) $ ( 6 ) $ ( 9 ) $ ( 6 )

4 unchanged sentences

(a) Letters of Credit

The Company had $ 27 million in collateralized outstanding letters of credit in support of certain leasing arrangements entered into in the ordinary course of business as of August 31, 2021.

The Company had $ 27 million in collateralized outstanding letters of credit in support of certain leasing arrangements entered into in the ordinary course of business as of November 30, 2021.

See the discussion of restricted cash in Note 3.

6 unchanged sentences

Regardless of whether claims against the Company have merit, those claims could be time-consuming to evaluate and defend, result in costly litigation, divert management’s attention and resources and subject the Company to significant liabilities.

Management reviews all of the relevant facts for each claim and applies judgment in evaluating the likelihood and, if applicable, the amount of any potential loss.

Where a potential loss is considered probable and the amount is reasonably

BlackBerry Limited

1 unchanged sentence

In millions of United States dollars, except share and per share data, and except as otherwise indicated (unaudited)

estimable, provisions for loss are made based on management’s assessment of the likely outcome.

Management reviews all of the relevant facts for each claim and applies judgment in evaluating the likelihood and, if applicable, the amount of any potential loss.

Where a potential loss is considered probable and the amount is reasonably estimable, provisions for loss are made based on management’s assessment of the likely outcome.

Where a range of loss can be reasonably estimated with no best estimate in the range, the Company records the minimum amount in the range.

1 unchanged sentence

Any settlements or awards under such claims are provided for when reasonably determinable.

As of August 31, 2021, there are no material claims outstanding for which the Company has assessed the potential loss as both probable to result and reasonably estimable;

As of November 30, 2021, there are no material claims outstanding for which the Company has assessed the potential loss as both probable to result and reasonably estimable;

therefore, no accrual has been made.

38 unchanged sentences

Both sides filed oppositions to these motions on June 21, 2021.

Defendants filed a reply in support of their summary judgment motion and a motion to strike Plaintiffs’ response to Defendants’ separate statement of undisputed facts on July 22, 2021.

Plaintiffs filed an opposition to the motion to strike

BlackBerry Limited

1 unchanged sentence

In millions of United States dollars, except share and per share data, and except as otherwise indicated (unaudited)

on August 5, 2021, and Defendants filed a reply in support on August 10, 2021.

Defendants filed a reply in support of their summary judgment motion and a motion to strike Plaintiffs’ response to Defendants’ separate statement of undisputed facts on July 22, 2021.

Plaintiffs filed an opposition to the motion to strike on August 5, 2021, and Defendants filed a reply in support on August 10, 2021.

On August 13, 2021, Plaintiffs filed an unopposed motion for approval of a class notice plan.

On September 10, 2021, the Court (i) granted in part and denied in part the parties’ Daubert motions and (ii) granted the plaintiffs’ unopposed motion for approval of the class notice plan.

Postcard notice was mailed on October 8, 2021;

publication notice was issued starting on October 18, 2021.

On May 5, 2021, the parties participated in a mediation with the Hon.

23 unchanged sentences

As the award is triggered by the Company’s share price, it is considered stock-based compensation and accounted for as a share-based liability award.

As at August 31, 2021, the liability recorded in association with this award is approximately $ 11 million (February 28, 2021 - $ 8 million).

As at August 31, 2021, the Company has recognized $ 17 million (February 28, 2021 - $ 15 million) in funds from claims filed with the Ministry of Innovation, Science and Economic Development Canada relating to its Strategic Innovation Fund program’s investment in BlackBerry QNX.

As at November 30, 2021, the liability recorded in association with this award is approximately $ 8 million (February 28, 2021 - $ 8 million).

As at November 30, 2021, the Company has recognized $ 16 million (February 28, 2021 - $ 15 million) in funds from claims filed with the Ministry of Innovation, Science and Economic Development Canada relating to its Strategic Innovation Fund program’s investment in BlackBerry QNX.

A portion of this amount may be repayable in the future under certain circumstances if certain terms and conditions are not met by the Company, which is not probable at this time.

5 unchanged sentences

Therefore, the Company remains subject to risks of supply shortages.

(d) Indemnifications

The Company enters into certain agreements that contain indemnification provisions under which the Company could be subject to costs and damages, including in the event of an infringement claim against the Company or an indemnified

BlackBerry Limited

1 unchanged sentence

In millions of United States dollars, except share and per share data, and except as otherwise indicated (unaudited)

(d) Indemnifications

Such intellectual property infringement indemnification clauses are generally not subject to any dollar limits and remain in effect for the term of the Company’s agreements.

12 unchanged sentences

The Company is now organized and managed as three operating segments:

Cyber Security, IoT, and Licensing and Other.

Cybersecurity, IoT, and Licensing and Other.

Prior year information has been restated to conform to the current year presentation of the Company’s segment information.

The following table shows information by operating segment for the three and six months ended August 31, 2021 and August 31, 2020:

The following table shows information by operating segment for the three and nine months ended November 30, 2021 and November 30, 2020:

For the Three Months Ended

Cyber Security IoT Licensing and Other Segment Totals

August 31, 2021 August 31, 2020 August 31, 2021 August 31, 2020 August 31, 2021 August 31, 2020 August 31, 2021 August 31, 2020

Cybersecurity IoT Licensing and Other Segment Totals

November 30, November 30, November 30, November 30,

2021 2020 2021 2020 2021 2020 2021 2020

Segment revenue $ 128 $ 130 $ 43 $ 32 $ 13 $ 56 $ 184 $ 218

2 unchanged sentences

$ 76 $ 77 $ 35 $ 26 $ 7 $ 47 $ 118 $ 150

For the Six Months Ended

Cyber Security IoT Licensing and Other Segment Totals

August 31, 2021 August 31, 2020 August 31, 2021 August 31, 2020 August 31, 2021 August 31, 2020 August 31, 2021 August 31, 2020

For the Nine Months Ended

Cybersecurity IoT Licensing and Other Segment Totals

November 30, November 30, November 30, November 30,

2021 2020 2021 2020 2021 2020 2021 2020

Segment revenue $ 355 $ 369 $ 126 $ 92 $ 52 $ 222 $ 533 $ 683

7 unchanged sentences

In millions of United States dollars, except share and per share data, and except as otherwise indicated (unaudited)

Cyber Security consists of the Company’s BlackBerry Spark® software platform, BlackBerry® AtHoc, BlackBerry® Alert and SecuSUITE.

Cybersecurity consists of the Company’s BlackBerry Spark® software platform, BlackBerry® AtHoc, BlackBerry® Alert and SecuSUITE.

The BlackBerry Spark platform is a comprehensive offering of security software products and services, including the BlackBerry Spark® Unified Endpoint Security Suite and the BlackBerry Spark® Unified Endpoint Management (“UEM”) Suite, which are also marketed together as the BlackBerry Spark® Suites, offering the Company’s broadest range of tailored cybersecurity and endpoint management options.

2 unchanged sentences

The BlackBerry Spark UEM Suite includes the Company’s BlackBerry® UEM, BlackBerry® Dynamics™, and BlackBerry® Workspaces solutions.

Cyber Security revenue is generated predominantly through software licenses, commonly bundled with support, maintenance and professional services.

Cybersecurity revenue is generated predominantly through software licenses, commonly bundled with support, maintenance and professional services.

IoT consists of BlackBerry QNX®, BlackBerry Certicom®, BlackBerry Radar®, BlackBerry IVY™ and other IoT applications.

2 unchanged sentences

Other consists of the Company’s legacy service access fees (“SAF”) business.

The following table reconciles total segment gross margin for the three and six months ended August 31, 2021 and August 31, 2020 to the Company’s consolidated totals:

Three Months Ended Six Months Ended

August 31, 2021 August 31, 2020 August 31, 2021 August 31, 2020

The following table reconciles total segment gross margin for the three and nine months ended November 30, 2021 and November 30, 2020 to the Company’s consolidated totals:

Three Months Ended Nine Months Ended

November 30, 2021 November 30, 2020 November 30, 2021 November 30, 2020

Total segment gross margin $ 118 $ 150 346 $ 495

7 unchanged sentences

Debentures fair value adjustment ( 110 ) 95 ( 47 ) 114

Investment loss, net 1 5 3 5

Consolidated loss before income taxes $ ( 142 ) $ ( 27 ) $ ( 202 ) $ ( 672 )

Investment income (loss), net ( 25 ) 1 ( 22 ) 6

Consolidated income (loss) before income taxes $ 76 $ ( 128 ) $ ( 126 ) $ ( 800 )

______________________________

6 unchanged sentences

The Company’s revenue, classified by major geographic region in which the Company’s customers are located, was as follows:

Three Months Ended Six Months Ended

August 31, 2021 August 31, 2020 August 31, 2021 August 31, 2020

Three Months Ended Nine Months Ended

November 30, 2021 November 30, 2020 November 30, 2021 November 30, 2020

North America (1)

11 unchanged sentences

Revenue, classified by timing of recognition, was as follows:

Three Months Ended Six Months Ended

August 31, 2021 August 31, 2020 August 31, 2021 August 31, 2020

Three Months Ended Nine Months Ended

November 30, 2021 November 30, 2020 November 30, 2021 November 30, 2020

Products and services transferred over time $ 111 $ 121 $ 324 $ 362

2 unchanged sentences

Revenue contract balances

The following table sets forth the activity in the Company’s revenue contract balances for the six months ended August 31, 2021:

The following table sets forth the activity in the Company’s revenue contract balances for the nine months ended November 30, 2021:

Accounts Receivable Deferred Revenue Deferred Commissions

3 unchanged sentences

Decrease, net ( 50 ) ( 59 ) ( 4 )

Closing balance as at August 31, 2021 $ 126 $ 244 $ 18

Closing balance as at November 30, 2021 $ 138 $ 235 $ 17

BlackBerry Limited

2 unchanged sentences

Transaction price allocated to the remaining performance obligations

The table below discloses the aggregate amount of the transaction price allocated to performance obligations that are unsatisfied or partially unsatisfied as at August 31, 2021 and the time frame in which the Company expects to recognize this revenue.

The table below discloses the aggregate amount of the transaction price allocated to performance obligations that are unsatisfied or partially unsatisfied as at November 30, 2021 and the time frame in which the Company expects to recognize this revenue.

The disclosure includes estimates of variable consideration, except when the variable consideration is a sales-based or usage-based royalty promised in exchange for a license of intellectual property.

As at August 31, 2021

As at November 30, 2021

Less than 12 Months 12 to 24 Months Thereafter Total

1 unchanged sentence

Revenue recognized for performance obligations satisfied in prior periods

For the three and six months ended August 31, 2021, no revenue was recognized for performance obligations satisfied in a prior period (three and six months ended August 31, 2020 - nil and $ 1 million of revenue was recognized relating to performance obligations satisfied in a prior period).

For the three and nine months ended November 30, 2021, $ 1 million of revenue was recognized for performance obligations satisfied in a prior period (three and nine months ended November 30, 2020 - $ 2 million of revenue was recognized relating to performance obligations satisfied in a prior period).

Property, plant and equipment, intangible assets, operating lease ROU assets and goodwill, classified by geographic region in which the Company’s assets are located, were as follows:

August 31, 2021 February 28, 2021

November 30, 2021 February 28, 2021

Property, Plant and Equipment, Intangible Assets, Operating Lease ROU Assets and Goodwill Total Assets Property, Plant and Equipment, Intangible Assets, Operating Lease ROU Assets and Goodwill Total Assets

4 unchanged sentences

Information About Major Customers

There was one customer that comprised 12 % and no other customer that comprised more than 10% of the Company’s revenue in the three and six months ended August 31, 2021, respectively (three and six months ended August 31, 2020 - one customer that comprised 40 % and 34 % of the Company’s revenue, respectively).

There was one customer that comprised 14 % and 11 % of the Company’s revenue in the three and nine months ended November 30, 2021, respectively (three and nine months ended November 30, 2020 - one customer that comprised 13 % and 27 % of the Company’s revenue, respectively).

CASH FLOW AND ADDITIONAL INFORMATION

(a) Certain consolidated statements of cash flow information related to interest and income taxes paid is summarized as follows:

Three Months Ended Six Months Ended

August 31, 2021 August 31, 2020 August 31, 2021 August 31, 2020

Three Months Ended Nine Months Ended

November 30, 2021 November 30, 2020 November 30, 2021 November 30, 2020

Interest paid during the period $ 2 $ 2 $ 5 $ 13

4 unchanged sentences

The Company is exposed to foreign exchange risk as a result of transactions in currencies other than its functional currency, the U.S.

The majority of the Company’s revenue in the second quarter of fiscal 2022 was transacted in U.S.

The majority of the Company’s revenue in the third quarter of fiscal 2022 was transacted in U.S.

Portions of the revenue were denominated in Canadian dollars, euros and British pounds.

1 unchanged sentence

dollars, euros and British pounds.

At August 31, 2021, approximately 31 % of cash and cash equivalents,

At November 30, 2021, approximately 28 % of cash and cash

BlackBerry Limited

1 unchanged sentence

In millions of United States dollars, except share and per share data, and except as otherwise indicated (unaudited)

33 % of accounts receivable and 31 % of accounts payable were denominated in foreign currencies (February 28, 2021 – 20 %, 25 % and 34 %, respectively).

equivalents, 46 % of accounts receivable and 29 % of accounts payable were denominated in foreign currencies (February 28, 2021 – 20 %, 25 % and 34 %, respectively).

These foreign currencies primarily include the Canadian dollar, euro and British pound.

11 unchanged sentences

The Company reduces this risk by investing in liquid, investment-grade securities and by limiting exposure to any one entity or group of related entities.

As at August 31, 2021, no single issuer represented more than 11 % of the total cash, cash equivalents and investments (February 28, 2021 - no single issuer represented more than 13 % of the total cash, cash equivalents and investments), representing cash balances at one of the Company’s banking counterparties.

As at August 31, 2021, the Company had $ 1 million in collateral posted with counterparties (February 28, 2021 - nil in collateral held or posted).

As at November 30, 2021, no single issuer represented more than 10 % of the total cash, cash equivalents and investments (February 28, 2021 - no single issuer represented more than 13 % of the total cash, cash equivalents and investments), representing cash balances at one of the Company’s banking counterparties.

As at November 30, 2021, the Company had nil collateral posted with counterparties (February 28, 2021 - nil in collateral held or posted).

Liquidity risk

Cash, cash equivalents, and investments were approximately $ 772 million as at August 31, 2021.

Cash, cash equivalents, and investments were approximately $ 772 million as at November 30, 2021.

The Company’s management remains focused on efficiently managing working capital balances and managing the liquidity needs of the business.

2 unchanged sentences

During the first quarter of fiscal 2021, the Government of Canada announced the Canada Emergency Wage Subsidy (“CEWS”) for Canadian employers whose businesses were affected by the COVID-19 pandemic, initially running for a thirty-six week period between March and November 2020.

The program was subsequently extended to June 2021 and the Government of Canada has announced an additional extension to October 2021.

The program was subsequently extended to October 2021.

The CEWS provides a subsidy of up to 75 % of eligible employees’ employment insurable remuneration, subject to certain criteria.

The extension also includes a gradual decrease to the subsidy rate.

The Company applied for the CEWS to the extent it met the requirements to receive the subsidy and during the three and six months ended August 31, 2021, recorded $ 11 million and $ 27 million, respectively, in government subsidies as a reduction to operating expenses in the consolidated statement of operations (August 31, 2020 - $ 18 million and $ 27 million, respectively).

The Company applied for the CEWS to the extent it met the requirements to receive the subsidy and during the three and nine months ended November 30, 2021, recorded $ 3 million and $ 30 million, respectively, in government subsidies as a reduction to operating expenses in the consolidated statement of operations (November 30, 2020 - $ 10 million and $ 37 million, respectively).

CEWS received after June 5, 2021 may be repayable in the future under certain circumstances if certain terms and conditions are not met by the Company, which is not probable at this time.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements