Hanzhi (Thomas) Wang

CIBC - Client Company Credit Report

Blackberry Ltd
!ec "#
th
$ #%"&
Abstract
The p'rpose o( this paper is to ser)e Canadian Imperial Bank o( Commerce (CIBC)*s internal 'se
abo't (inancing and in)estment decision making related to Blackberry Ltd*s credit in(ormation
The e)al'ation o( Blackberry is commenced based on Blackberry (BBR+)*s (inancial statements
released in #%"& and #%"#Beca'se a ,-."/% million loan (or constr'ctions o( 0areho'se and
(actories bet0een CIBC and Blackberry Limited might be proposed in the ('t're$ it is cr'cial (or
the relati)e departments to 'nderstand the risk and opport'nity abo't the deal 0ith the help o( this
doc'ment 1s s'ch$ this doc'ment shall not be disclosed to the p'blic or any personnel o'tside o(
CIBC 0itho't (ormal 0ritten permission o( CIBC*s 2inancial -er)ice !epartment
Basic Company Facts
" 3'tlook-Blackberry
2ormerly kno0n as Research in 4otion (RI4) 0as (o'nded at Waterloo$ 3ntario$
Canada by 4ike Lazaridis in "567
i
1 Canadian telecomm'nication and 0ireless e8'ipment company best kno0n (or its
Blackberry series 9W:RT+ smartphones and 7
th
;eneration tablets 0hich once
capt'red 7&<,- market share in #%"%
Blackberry*s international market acco'nts (or appro=imately /7< re)en'e
compared to &>< in #%%5
Ho0e)er$ Blackberry*s global market share had declined to only "/< d'e to
emerging competitors s'ch as 1pple*s I3- smartphones and 1ndroid-based phones
in the &
rd
9'arter o( #%"&
ii
# 4a?or -hareholders
1mong the #6/ shareholders 0ith /#@ million shares$ /&>< o( the shares are held
by instit'tional shareholders 4ichael Lazaridis holds /7 < o( total shares The
three ma?or instit'tional shareholders are listed as (ollo0edA
iii
2ig're" Three 4a?or -hareholders o( Blackberry Ltd$ -ept #%"&
Fairfax Financial
Holding
PrimeCap
Management Co.
Toronto Dominion
Bank
9.3% /"< ##<
& -tock :=change 9'otation
Blackberry 0ent p'blic on the Toronto -tock :=change 0as 3ctober #6
th
$ "55>
RI4 began trading on the B1-!19 on 2ebr'ary 7
th
$ "555
2rom !ecember #
nd
$ #%"" to !ecember #
nd
#%"&$ the closing price o( Blackberry
Limited*s stock price has decreased (rom ."7/% to .@""
i)
7 B'siness 3pport'nities
Claims that 5% percent o( 0orld*s (ort'ne /%% companies 0ere still interested in its
prod'cts
)
Blackberry*s sec'rity (eat'res 0ere )eri(ied by Borth 1tlantic Treaty 3rganization
(B1T3) to allo0 its sta(( to 'se Blackberry smart phones in their o((ices
)i
/ Blackberry*s ma?or operations
Crod'ctsA The Blackberry (eat'red smartphone 0as (amo's (or its sec'rity stat's
and (ast processing o( email and other in(ormation thro'gh Blackberry*s internal
system
C'stomersA s'ch prod'cts target those b'siness pro(essionals and go)ernmental
organizations
Blackberry had sells net0ork in a n'mber o( markets aro'nd the 0orld incl'ding
,nited -tates$ Canada$ Latin 1merica$ and the ,nited Dingdom
2ig're # Total 4arket Breakdo0n$ 4arch&
rd
$ #%"&
)ii
Region/
Fiscal Year
Nort
!merica
"#rope$
Middle "ast %
!frica
&atin
!merica
!sia
Paci'c
Marc (
rd

)*+)
#5/< 7"@< "77< "7/<
Marc (
rd

)*+(
#@#<$ (&&<) 7%><$ (%5<) "5"<$ 7>< "7%< (%/<)
2acilitiesA increased prod'ction capacity (or Blackberry E"% smartphones
-'ppliersA &@ s'ppliers (rom China$ "5 s'ppliers located in the rest o( 1sia$ and the
total o( 6 s'ppliers in (rom :astern :'rope and Latin 1merica
)iii
2o'r ma?or man'(act'res o( Blackberry prod'cts incl'deA :lcote8 -:$ Fabil Circ'it$
Inc$ 4'lti-2ineline :lectroni= Inc$ and 9'alcomm
i=
@ Independent 1'ditor
The Company is :rnst G +o'ng LLC located in Rogers$ 1rkansas$ ,-
=
To e=press an opinion on the company*s (inancial statements based on their a'dits
In their opinion$ the (inancial position has been (airly presented in all material
aspects at 4arch &
rd
$ #%"& and #%"# are in accordance 0ith standards o( the C'blic
Company 1cco'nting 3)ersight Board (,nited -tates)
Industry Report
" ;eneral :n)ironment
2ast-paced$ technology (oc'sed$ and c'stomer ser)ice based Ind'stry
-martphone acco'nts (or 0orld*s //< sales o( mobile phones
-martphone 'sers 0orld0ide are constantly interested in ne0 technology$ th's
0illing to p'rchase ne0 phones to replace the old ones
# Competitors
1pple*s iChone 0as (irst introd'ced to the market on F'ne$ 5
th
$ #%%6 (iChone ")
i The iconic modern design o( its smartphone and laptop prod'cts attracts the
contemporary c'stomer gro'p ("#< o( the global market share)
ii The recently released iChone /- became the top seller o( all smartphones
=i
-ams'ng$ a slightly late entrant o( the smartphone market managed to capt're
appro=imately the same portion o( the market 0ith its 8'ality demonstrated
1ndroid-based To'ch screen smartphone
i -ams'ng has &#< o( the global smartphone market
=ii
ii 1ble to (lood the market 0ith a large )ariety o( prod'cts co)ering (rom high-
end to lo0 end cons'mer gro'ps
& Company Cositioning
!'e to the signi(icant loss on re)en'e and market share$ Blackberry learned that the
era o( keyboard is gone
In its ne0est release$ Blackberry de)eloped the E"% that adopted a complete
to'chscreen (eat're 0hile abandoning the concrete 9W:RT+ keyboard design (or
its pre)io's prod'cts
Blackberry Limited 0ished to re-establish its leadership position by e((ecti)ely
maintaining e=isting c'stomer segments o( pro(essionals and go)ernment 'sers as
0ell as to e=pand to meet the demand o( lo0-end smartphone cons'mers
Executive Team Info
" Interim Chie( :=ec'ti)e 3((ice$ Fohn Chen
=iii
Fohn Chen 0as appointed Interim C:3 and Blackberry*s Board o( !irectors on
Bo)ember 7
th
$ #%"7 He grad'ated (rom Bro0n ,ni)ersity 0ith a bachelor*s degree in
electrical engineering and holds a master degree in the same ma?or (rom Cali(ornia
Instit'te o( Technology He had held e=ec'ti)e positions at -iemens 1;$ Cyramid
Technology Corp$ and B'rro'ghs Corp
4r Chen is acti)ely in)ol)ed in international relations as he 0as appointed by ,-
Cresident ;eorge W B'sh to ser)e on the Cresident*s :=port Co'ncil in #%%/ to ad)ise
abo't policies regarding ,--China trade relations
In "55>$ 4r Chen became president$ chie( operating o((icer and a director o( -ybase
0hich later 'nder his lead achie)ed strong (inancial per(ormance and shareholder
ret'rns and he 0as named Chairman and C:3 in "556 It is 'nder s'ch conte=t$
Blackberry Ltd appointed him as C:3 to reboot the company 0ith 4r Chen*s
electrical engineering backgro'nd and ab'ndant management e=perience
# Chie( 2inancial 3((icer$ Fames +ersh
=i)
Fames +ersh has more than (i(teen years o( e=perience in technology and
telecomm'nication ind'stries -imilar to Fohn Chen$ he 0as recently promoted to
replace Brian Bid'lka as C23 Be(ore that$ he ser)ed as the -enior Hice Cresident$
Controller and Head o( Compliance (or Blackberry since #%%6
Financial Highlights
" 2ig're&$ #%""$ #%"#$ and #%"&*s general (inancial stat's (Cresented in millions e=cept
(or share and per-share amo'nt)
Fiscal Year )*+( )*+) )*++
Total Re,en#e .""$%>& ."6$7#& ."5$5%>
Total Pro'ts .(@7@) ."$"@7 .&$7""
"arnings per sare
-"P./
.("#&) .### .@&@
Dil#ted "P. .("#&) .### .@&7
-ince the (iscal year o( #%"#$ Blackberry Limited had been e=periencing persistent
decline o( total re)en'e$ total pro(its and earnings per share (:C-) !'ring the (iscal
year o( #%"7$ the company is inc'rring pro(it loss and per(orming a negati)e :C-
# 2or the (iscal year o( #%"# G #%"& (2iscal +ear :nded #%"&I #%"#*s ann'al data)
Largest and -mallest C'rrent 1ssets
C#rrent !sset/Fiscal
Year
)*+( -in millions/ )*+) -in millions/
&argest 1cco'nt Recei)ableA. #$&/& 1cco'nt Recei)ableA .&$%@#
.mallest 1ssets held (or saleA ."7 1ssets held (or saleA ."/
Largest long term assets (or both #%"# and #%"& are JIntangible assetsK 0orth
.&$#6@ and .&$776 millionL
Intangible assets may be re(erred to intellect'al property and other related
certi(ications and rights Blackberry Limited*s intangible asset co'nts #@#< in
#%"&and #&5< in #%"# o( its total assets
Largest C'rrent Liabilities and largest Long-term Liabilities
&ia0ilities/Fiscal
Years
)*+( -in millions/ )*+) -in millions/
C#rrent &ia0ilities 1ccr'ed LiabilitiesA ."$67# 1ccr'ed LiabilitiesA .#$&6#
&ong1term &ia0ilities !e(erred Income Ta=
LiabilitiesA.#7/
!e(erred Income Ta=
LiabilitiesA .#&#
1s s'ch$ Blackberry Limited*s largest c'rrent liabilities$ J1ccr'ed LiabilitiesK$ ha)e
decrease (rom >%< and /&< in #%"# and #%"& In addition to c'rrent liabilities
str'ct'ral change$ the largest long-term liabilities had presented a comparati)ely
smaller distinction in the J!e(erred Income Ta= LiabilitiesK
erformance !easurement"
#i$uidity Ratios
Working Capital and C'rrent Ratio o( Blackberry Limited in 2iscal +ear #%"# G
#%"&
)*+( -in
million/
)*+) -in
million/
)*++ -in
millions/
Total C#rrent
!ssets
.>$"%" .>$%>" .>$766
Total C#rrent
&ia0ilities
.&$776 .&$&65 .&$@&%
2orking Capital .&$@/& .&$@6# .&$6/6
C#rrent Ratio #%@ #%6 #%@
BoteA Working CapitalITotal C'rrent 1ssets-Total C'rrent LiabilitiesL C'rrent
RatioITotal C'rrent 1ssetsMTotal C'rrent Liabilities
Li8'idityA In general$ Blackberry*s ability to handle short-term debt is stable d'ring
the past t0o years The c'rrent asset had almost do'bled the c'rrent liabilities -'ch
res'lt indicates that Blackberry Ltd is in a healthy condition 0hile per(orming
mat'ring obligations
Activity Ratios
In)entory T'rno)er G 1)erage Holding Ceriod (1HC)o( Blackberry Limited in
2iscal +ear #%"# G #%"&
)*+( -in
millions/
)*+) -in
millions/
)*++ -in
millions/
Costs of .ales/
C34.
.>$@&5 .""$767 .""$%6#
5n,entor6 .@%& ."$%#> .@"6
5n,entor6
T#rno,er
"#> ""# ">5
!,erage Holding
period -!HP/
#5 && #"
BoteA In)entory T'rno)erIC3;-MIn)entoryL 1HCI&@/MIn)entory T'rno)er
1ccording to the data and calc'lations$ a high in)entory t'rno)er rate demonstrates
an increasing t'rno)er rate 0ith the possibility o( red'cing holding cost 1t the same
time$ it costs Blackberry shorter time to hold in)entory be(ore sale It*s
appro=imately 7 days shorten compared to 2iscal +ear #%"#
Ho0e)er$ the high t'rno)er ratio may also occ'r 0hen there is a high anticipation o(
rapidly rising prices or e=pected market shortage
Bet 2i=ed 1ssets T'rno)er G Total 1ssets T'rno)er o( Blackberry Limited in 2iscal
+ear #%"# G #%"&
)*+( -in
millions/
)*+) -in
millions/
)*++ -in
millions/
Net .ales .""$%>& ."6$7#/ ."5$5%>
Net Fixed !ssets .@$%@7 .@$@@% ./$&6>
Total !ssets ."&$"@/ ."&$>&" ."#$6>/
Net Fixed !sset
T#rno,er
"6 #6 &>
Total !sset
T#rno,er
%6 "& "/
BoteA Bet 2i=ed 1sset T'rno)erIBet -alesMBet 2i=ed 1ssetsL Total 1sset T'rno)erI
Bet -alesMTotal 1ssets
1(ter e=amining the t'rno)er ratio on JBet 2i=ed 1ssetsK and JTotal 1ssetsK$ it is
clear that Blackberry Limited in not making eno'gh re)en'e to keep a high ret'rn
on its assets as asset t'rno)er rate has dropped signi(icantly (rom &> to "6 This
problem may be a res'lt (rom decreased prod'ct price and n'mber o( prod'cts sold
1ltho'gh Blackberry Limited had presented a promising ability in red'cing
in)entory holding cost$ its concerning ability to generate re)en'e (rom its assets
o)er0eighs Blackberry*s pro(iciency in in)entory management
#everage % Coverage
!ebt to :8'ity Ratio o( Blackberry Limited$ 2iscal +ear #%"# G #%"&
)*+( -in
millions/
)*+) -in
millions/
)*++ -in
millions/
Total lia0ilities .&$>%/ .&$@&" .&$5&>
.areolder7s
"8#it6
.5$7@% ."%$"%% .6$5&6
D/" Ratio %&5 %&@ %77
BoteA !M: RatioITotal LiabilitiesM-hareholder*s :8'ity
1 )al'e higher than "%% means that more assets are (inanced thro'gh e=ternal debt
In that case$ higher !M: ratio also means the company is e=periencing so)ereignty
iss'e beca'se o( the debt o0ing to e=ternal lenders rather than its o0n shareholders
1ltho'gh Blackberry*s !M: ratio increased by %%& d'ring the 2iscal +ear o( #%"&$
the company is still per(orming 0ell in (inancing acti)ities Th's$ Blackberry still
possess dominant sol)ency o( itsel(
rofitability Ratios
;ross Cro(it 4argin$ 3perating Cro(it 4argin$ and Bet 4argin o( Blackberry in the
2iscal +ear o( #%"# and #%"&
)*+( -in
millions/
)*+) -in
millions/
)*++ -in
millions/
Re,en#e .""$%>& ."6$7#& ."5$5%>
Cost of 4oods .old
-C34./
.>$@&5 .""$676 .""$%6#
3perating 5ncome (."$##%) ."$75> .7$@&@
Net 5ncome (.@7%) ."$"@7 .&$7""
4ross Pro't Margin
-4M/
%&" %&/ %77
3perating Pro't Margin
-3M/
BM1 %%5 %#&
Net Margin -NM/ BM1 %%@ %">
BoteA ;4I (Re)en'e-C3;-)MRe)en'eL 34I3perating IncomeMRe)en'eL B4IBet
IncomeM Re)en'e
2rankly speaking$ d'ring the past three years$ Blackberry is inc'rring persistent loss
on pro(its Its J;ross Cro(it 4arginK decreased "&< -ince the 2iscal year o( #%"&
only presents loss$ 34 and B4 cannot be calc'lated 2rom 2iscal +ear #%"" to
#%"#$ the J3perating Cro(it 4arginK decreased abo't "7< and JBet 4arginK
decreased (rom ">< to only @<
The ma?or reason (or 2iscal +ear #%"& to inc'r pro(it loss is that the net sales drop
almost 7%< compared to #%"# 3ther (ig'res 0ere relati)ely steady e=cept (or cost
o( goods sold 0hich also decreased &/<
BoteA ("67#&-""%>&)M"67#&N"%%<I7%<L (""676->@&5)M""676N"%%<I&/<
Th's$ Blackberry*s o)erall ability to earn ret'rn is not satis(ying
Ris& 'ummary
Financial Ris&
1ccording to the (inancial in(ormation abo't Blackberry Limited listed earlier$ (o'r ma?or
concl'sions co'ld be dra0n
1 Blackberry*s per(ormance on pro(it making is 0orsening
B The company itsel( is so)ereign gi)en that the e=ternal debt is not the main so'rce o(
(inancing acti)ity
C 1ltho'gh the in)entory t'rno)er speed is slo0ly reco)ering$ the t'rno)er ratio on assets
has been interr'pted negati)ely by the loss o( re)en'e
! The (ormation o( Blackberry*s C'rrent 1ssets and C'rrent Liabilities is still solid to
maintain a stable li8'idity ratio
CommentA
In this case$ the risk e=ists in Blackberry*s inability to capt're market share and to sell
more o( its prod'cts By obser)ing the trend o( its gross margin$ the ass'mption o( a lo0er
pro(it is likely to become tr'e -ince the payment o( the loan 0ill probably come (rom net
sales on a t0o or three years* term$ Blackberry Limited m'st be able to generate a positi)e net
income (or a lasting period o( time be(ore loaning (rom CIBC to pro)e its (inancial strength
Recent (e)s Relate to Blac&berry #td*s
1 Ho0 Blackberry Ble0 it (-ept$ #%"&)
JThey 0ere al0ays slo0 to market$ and there 0ere al0ays delays in la'nchingK
4r Lazaridis opposed the la'nch plan (or the Blackberry "% phones and arg'ed
strongly in (a)o'r o( emphasizing keyboard de)ices B't 4r Heins and his
e=ec'ti)es did not take the ad)ice and la'nched the to'ch screen E"%$ 0ith
disastro's res'lts
B Blackberry Co'ld ;et 1 Bid 1s High 1s ."# 1 -hare (-ept$ #%"&)
=)
Blackberry signed a pro)isional agreement to be ac8'ired by 2air(a= (or ,-.7>
billion
Blackberry*s special committee remains open to alternati)e bids
C Blackberry Hit With -hareholder*s La0s'it (3ct$ #%"&)
=)i
1cc'sed on misleading in)estors on (inancial -trength
1 shareholder named 4ar)in Cearlstein claims that Blackberry said that the
company J0as progressing on its (inancial and operational commitmentsK
In reality$ the ne0 Blackberry E"% 0as not 0ell-percei)ed by the market$ and the
company J0as (orced to lay o(( appro=imately 7$/%% employees totalling 7%< o( its
total 0ork (orceK
! Blackberry*s C33 and C43 1re 3't (Bo)$ #%"&)
Dristan Tear 0as Blackberry*s C33 2rank Bo'lben 0as the C43
Fames +ersh replaced (ormer C23 Brian Bid'lka
Fohn Chen 0as appointed as the ne0 C:3 a(ter Heins le(t the company
: BlackberryA Fohn Chen Can ,se -ybase :=perience To Increase :nterprise -ales
=)ii
Blackberry can repeat Chen*s s'ccess at -ybase
Fohn Chen*s Jincredible management that t'rned -ybase (orm a money losing
lemon into a mobile data management behemothK
CommentA
-tarting (rom the (ail're o( the Blackberry E"%*s la'nch$ Blackberry is in)ol)ed in legal
iss'es (or tricking its shareholders The decision that had lay-o(( appro=imately 7%< o( its
total 0ork(orce is 8'ite astonishing Blackberry*s e=ec'ti)e team had replaced m'ltiple
members a(ter0ardsL ho0e)er$ Fohn Chen*s e((ect is e=aggerated by Blackberry*s press
1nyho0$ the company 0ill probably end 'p ac8'ired by 2air(a= 2inancial Holding Ltd 0hich
is c'rrently possessing 5&< o( Blackberry Ltd*s stock
The risk e=ists in (re8'ent changes o( e=ec'ti)e team members In addition$ 'ncertainty
abo't 0hat e((ects 0ill be bro'ght to Blackberry beca'se the ac8'isition sho'ld also be
considered 2'rthermore$ the la0s'it is a (atal hit to Blackberry*s rep'tation and res'lt in
negati)e ratings abo't its credits e)en a(ter the resignations o( the responsible e=ec'ti)e
members Th's$ it 0o'ld be risky to lend money to a company that lie abo't their real
(inancial sit'ations
+ther Ris&s
1 Ind'stry Concentration
1s mentioned earlier$ Blackberry only holds "/< o( the 0orld*s smartphone
market It is e=tremely small compared to 1pple or -ams'ng
-ince Blackberry ?'st changed its marketing strategy (rom keyboard based
smartphones to to'chscreen smartphones$ loss o( loyal c'stomers and inability to
create ne0 ones is destr'cti)e to the company*s gro0th
B 1mo'nt o( Loan
1ccording to the calc'lations presented earlier$ Blackberry*s liability section is
composed o( mostly c'rrent liabilities$ long-term liabilities is only aro'nd >< o(
its total liabilities
In addition$ Blackberry*s long-term liabilities had seldom e=ceeded ,-.&%%
million d'ring the past t0o years Th's$ ,-."/% million loan is probably more
than /%< o( its total long-term liabilities This action is 8'ite abnormal
C Corporate -ocial Responsibility (C-R)
1ccording to ;ood ;'ide*s rating abo't the Blackberry prod'cts$ the a)erage
prod'ct rating is only 7& o't o( "% Crod'cts* en)ironment rating is poorer$ listed as
&7 o't o( "% Blackberry*s lack o( social policies ga)e its prod'ct a rating o( /" o't
o( "%
=)iii
-ams'ng$ 0ith an a)erage score o( @%$ de)eloped en)ironmental (riendly prod'cts
rated (or @>
=i=
In 1pple*s case$ iChone achie)ed a high rating o( >@ in
en)ironments (riendly sol'tions and /# o( society
==
CommentA
!'e to the (ierce competition in the international smartphone marketL the chance (or
Blackberry to catch 'p 0ith 1pple and -ams'ng is small It 0o'ld be risky to ass'me
Blackberry 0ill be s'ccess('l 0ithin a short period o( time In the meantime$ risk also e=ists
in the lending to a company 0hose liabilities* (ormation is 8'estionable The ,-."/% million
('nds is said to be 'sed (or constr'cting ne0 0areho'ses and (actories aro'nd the 0orld to
(acilitate a (aster la'nch o( ne0 prod'cts
Ho0e)er$ the (ail're o( E"% may repeat The 8'estion remains 0hether those 0areho'ses
and (actories 0ill (inish constr'cting be(ore the ac8'isition take place 4ore importantly$
since 2air(a= is not directly in)ol)ed in signing borro0ing contracts 0ith CIBC$ i( 2air(a=
re('se to recognize the deal it 0o'ld be CIBC*s loss Th's$ the amo'nt o( the loan shall be re-
considered
4ore importantly$ 0ith a lo0 C-R rating abo't its prod'cts$ c'stomers 0ho are more
a0are o( en)ironmental and social protection may boycott the prod'cts and go)ernments may
s'e Blackberry (or en)ironmental poll'tion and (orce the company to pay (ines despite the
(act that Blackberry is already generating negati)e income There(ore$ s'ch condition m'st be
0ell considered be(ore entering the deal 0ith Blackberry Limited The simplest 0ay to a)oid
s'ch risk is to ask Blackberry to become more responsible in its prod'ction and selling
process to promote en)ironment and social per(ormance
Recommendations % Conclusion"
By e=amining Blackberry*s (inancial stat's$ smartphone ind'stry*s stat's$ and recent re)ie0s
abo't the company$ re0ards and risks abo't lending money to Blackberry Limited are listed
as (ollo0ingA
" Re0ards
Large amo'nt loan J,-. "/%millionK
Cotentials o( negotiating a higher interest and (ee income
I( Blackberry is s'ccess('l$ CIBC 0ill b'ild a tr'st0orthy rep'tation among its
clients
-trengthening bond 0ith Blackberry and likelihood o( long-term b'siness relation
# Risks
2inancial tro'bles may ca'se Blackberry to delay the payment
-ams'ng and 1pple are still dominant in the market o( smartphone It 0o'ld be
di((ic'lt (or Blackberry to e=pand its market share
2re8'ent :=ec'ti)e members* replacements$ resignations$ and shareholder*s la0s'it
also means changes o( the company*s original strategies It is 'nkno0n i( the ne0
strategy promise a ('t're payment o( the loan
Blackberry made an ambitio's proposal o( ,-."/% millionL ho0e)er$ the total long
term debt section is m'ch smaller in the past years
R'mor o( ac8'isition may become tr'e be(ore the loan is ('lly paid a(ter three years
C-R iss'e is ob)io's and may res'lt in ('rther red'ction o( sales (or Blackberry*s
ne0ly released prod'cts
1ltho'gh there are some tempting re0ards (rom lending the ,- ."/% million to
Blackberry$ se)ere concerns abo't risks m'st not be neglected 1ll o( those re0ards 0ill be
realized based on the con(irmation o( payment$ b't Blackberry*s ('t're ability to pay back
s'ch large amo'nt o( loans is 8'estionable While (acing the dilemma$ the rational thing to do
is to pay an 'nsched'led )isit to Blackberry*s RG! department$ 4arketing and -ale
!epartment$ and look at the daily operations in Blackberry*s man'(act'ring (acilities In
addition$ it is important to pay close attention to Blackberry*s :=ec'ti)e team and be prepared
(or large-scale H'man Reso'rce disaster 1(ter a thro'gho't st'dy abo't its present company
stat's$ then combine 0ith the in(ormation pro)ided in this report to make (inal decision abo't
0hether CIBC sho'ld engage in a deal 0ith Blackberry
In Blackberry*s 0orst (inancial sit'ation$ the company 0ill probably go bankr'pted I(
that happens$ it is generally 'nlikely (or CIBC to collect the payment as agreed -ince its
shareholders 0ill possess the direct o0nership o( its most property$ o'r bank may recei)e the
less )al'able property or e)en nothing 1ltho'gh ,- ."/% million is not an 'ltra-size loan$ a
loss o( the amo'nt 0ill de(initely ca'se CIBC*s stock price to drop 1s 0ell$ the (ail're o(
s'ch deal 0ill ca'se o'r e=isting clients to 0orry abo't o'r (inancing abilityThere(ore$ this
report recommends CIBC to deny the lending proposal to Blackberry i( the company proposes
s'ch a deal in the ('t're Bo matter ho0 attracti)e the re0ard is$ o'r bank shall not lend to a
corporation that is (alling not only beca'se o( its inability to catch 'p 0ith ind'strial trend b't
also place little )al'e in credits e)en (or its o0n shareholder 2rankly$ the pro(it loss o( ,- .
@7% million and the la0s'it (rom Blackberry*s shareholder are (atal to its company*s credits
Attachment"
:=hibit " Balance sheet :nded 2iscal +ear #%"&
==i
Research In 4otions
Incorporated 'nder the La0s o( 3ntario
(,nited -tates dollars$ in millions)

:=hibit # 4anagement*s !isc'ssion and 1nalysis 2iscal +ear :nded #%"&
==ii
Research In 4otions Limited
4anagement*s !isc'ssion and 1nalysis o( 2inancial Condition and Res'lts o( 3perations
:=hibit & Balance -heet 2iscal +ear :nded #%"#
==iii
Research In 4otions Limited
Incorporated 'nder the La0s o( 3ntario
(,nited -tates dollars$ in millions)
Consolidated Balanced 'heet
Reference"
i
Blackberry (#%"&)$ Corporate-Company httpAMM'sblackberrycomMcompanyhtml$ #%"&
ii
B;Rcom (#%"&)$ Zach Epstein, Blackberry Market Share Falls to just 1.5
httpAMMbgrcomM#%"&M"%M&%Mblackberry-market-share-8&-#%"&M$ #%"&
iii
B1-!19 (#%"&)$ Blackberry !imite" #nstitutional $%nership
httpAMM000nasda8comMsymbolMbbryMinstit'tional-holdings$ #%"&
i)
+ahoo 2inance (#%"&)$ Blackberry !imite" httpAMMca(inanceyahoocomM8MhpO
sIBBR+GaI""GbI7GcI#%""GdI""GeI"6G(I#%"&GgIm$ #%"&
)
Blackberry (#%"&)$ &hy 'artner %ith Blackberry( httpsAMMpartnersblackberrycomM0hy-partner$ #%"&
)i
-ina Be0s (#%"&)$ Blackberry Security system )eri*ie" by +,-$
httpAMMdailyne0ssinacomMbgMne0sM'saM'slocalMsingtaoM#%"&"%%6M"%%%/%77"5%html$#%"&
)ii
Research In 4otions$ (#%"&) P1nn'al In(ormation ReportP$ pp #@
)iii
Blackberry$ (#%"&) -'pply Chain httpAMMcablackberrycomMcompanyMabo't-'sMcorporate-
responsibilityMs'pply-chainhtml$ #%"&
i=
2orbes$ (#%"") !o yo' kno0 0ho man'(act'red BlackberryO
httpAMM000(orbescomMsitesM?e((reycarrM#%""M%"M"&Mdo-yo'-kno0-0ho-man'(act'red-yo'r-blackberryM$ #%"&
=
Research In 4otions$ (#%"&) P1nn'al In(ormation ReportP$ pp 6@
=i
B;Rcom (#%"&)$ i'hone 5S is once a.ain the kin. o* the Smartphone Market
httpAMMbgrcomM#%"&M"#M"#Mapple-iphone-/s-sales-no)emberM$#%"&
=ii
B'siness Insider$ (#%"&)$ -te)e Docach$ -ams'ng Is -till Crashing 1pple In -martphone 4arket -hare
httpAMM000b'sinessinsidercomMsams'ng-apple-smartphone-market-share-#%"&-""$ #%"&
=iii
Blackberry$ (#%"&) Blackberry E/ecuti)e -eam. httpAMM'sblackberrycomMcompanyMne0sroomMe=ec'ti)e-
teamhtml$ #%"&
=i)
B'siness Insider$ (#%"&) Blackberry0s C$$ an" CM$ ,re $ut httpAMM000b'sinessinsidercomMblackberry-
coo-and-cmo-are-o't-#%"&-""$#%"&
=)
2inancial Cost$ (#%"&)Blackberry Coul" 1et , Bi" ,s 2i.h ,s 314 , Share
httpAMMb'siness(inancialpostcomM#%"&M%5M#7Mblackberry-co'ld-get-bid-as-high-as-"#-a-share-cibcM$ #%"&
=)i
CBWcom$ (#%"&) Cana"ian Sharehol"ers !aunch Class ,ction -o"ay ,.ainst Blackberry !imite"
httpAMM000ne0s0irecaMenMstoryM"#7#&>&Mcanadian-shareholders-la'nch-class-action-today-against-
blackberry-limited-ts=-bb-to$ #%"&
=)ii
-eeking 1lpha$ (#%"&) Blackberry5 6ohn Chen Can 7se Sybase E/perience -o #ncrease Enterprise Sales
httpAMMseekingalphacomMarticleM"65&5%"-blackberry-?ohn-chen-can-'se-sybase-e=perience-to-increase-
enterprise-sales$ #%"&
=)iii
;ood ;'ide$ (#%"&) Blackberry Ratings G Re)ie0s httpAMM000goodg'idecomMbrandsM&&##5"-blackberry$
#%"&
=i=
;ood ;'ide$ (#%"&) -ams'ng Ratings G Re)ie0s httpAMM000goodg'idecomMbrandsM#>>/&#-sams'ng$
#%"&
==
;ood ;'ide$ (#%"&) iChone Ratings G Re)ie0s httpAMM000goodg'idecomMprod'ctsM&&">"#-apple-
iphone-7-&#gb$ #%"&
==i
Research In 4otions$ (#%"&) P1nn'al In(ormation ReportP$ pp ""#
==ii
Research In 4otions$ (#%"&) P1nn'al In(ormation ReportP$ pp ">>
==iii
Research In 4otions$ (#%"#) P1nn'al In(ormation ReportP$ pp ""6