XML 21 R11.htm IDEA: XBRL DOCUMENT
v3.21.4

Fair Value Measurements, Cash, Cash Equivalents and Investments | 9 Months Ended
--- | ---
Nov. 30, 2021
Cash and Cash Equivalents [Abstract] |
Fair Value Measurements, Cash, Cash Equivalents and Investments | FAIR VALUE MEASUREMENTS, CASH, CASH EQUIVALENTS AND INVESTMENTS Fair Value The Company defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and considers assumptions that market participants would use in pricing the asset or liability, such as inherent risk, non-performance risk and credit risk. The Company applies the following fair value hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value into three levels: •Level 1 - Unadjusted quoted prices at the measurement date for identical assets or liabilities in active markets. •Level 2 - Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data. •Level 3 - Significant unobservable inputs that are supported by little or no market activity. 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. Recurring Fair Value Measurements The Company’s cash and cash equivalents, accounts receivable, other receivables, accounts payable and accrued liabilities are measured at an amount that approximates their fair values (Level 2 measurement) due to their short maturities. In determining the fair value of investments held, the Company primarily relies on an independent third-party valuator for the fair valuation of securities. The Company also reviews the inputs used in the valuation process and assesses the pricing of the securities for reasonableness after conducting its own internal collection of quoted prices from brokers. Fair values for all investment categories provided by the independent third-party valuator that are in excess of 0.5% from the fair values determined by the Company are communicated to the independent third-party valuator for consideration of reasonableness. The independent third-party valuator considers the information provided by the Company before determining whether a change in their original pricing is warranted. 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, 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. The 1.75% Debentures are classified as Level 3 and the 3.75% Debentures were classified as Level 2. Non-Recurring Fair Value Measurements 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 During the first quarter of fiscal 2021, as a result of the deterioration in economic conditions caused by the global COVID-19 pandemic and its impact on the Company’s reporting units, and the decline of the trading value of the Company’s capital stock below the Company’s consolidated carrying value, the Company determined that it was more likely than not that the fair value of at least one of its reporting units was lower than its carrying value after including goodwill. As a result, the Company completed an analysis of the fair value of its reporting units to compare against their respective carrying values as of May 31, 2020. Based on the results of the goodwill impairment test, it was concluded that the carrying value of one reporting unit exceeded its fair value, necessitating an impairment charge for the amount of excess and reducing the carrying value of goodwill. Consequently, the Company recorded total non-cash goodwill impairment charges of $594 million in the BlackBerry Spark reporting unit (the “Goodwill Impairment Charge”). The estimated fair values of the Company’s other reporting units substantially exceeded their carrying values at May 31, 2020. The Company did not identify any goodwill impairment during its annual impairment test in the fourth quarter of fiscal 2021, and all reporting units substantially exceeded their carrying values. 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. Cash, Cash Equivalents and Investments The components of cash, cash equivalents and investments by fair value level as at November 30, 2021 were as follows:
| Cost Basis (1) |  | Unrealized Gains |  | Unrealized Losses |  |  |  | Fair Value |  | Cash and Cash Equivalents |  | Short-term Investments |  | Long-term Investments |  | Restricted Cash Equivalents |  |
Bank balances | $ | 109 |  |  | $ | — |  |  | $ | — |  |  |  |  | $ | 109 |  |  | $ | 108 |  |  | $ | — |  |  | $ | — |  |  | $ | 1 |  |  |
Other investments | 8 |  |  | — |  |  | — |  |  |  |  | 8 |  |  | — |  |  | — |  |  | 8 |  |  | — |  |  |
| 117 |  |  | — |  |  | — |  |  |  |  | 117 |  |  | 108 |  |  | — |  |  | 8 |  |  | 1 |  |  |
Level 1: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Equity securities | 10 |  |  | — |  |  | (9) |  |  |  |  | 1 |  |  | — |  |  | 1 |  |  | — |  |  | — |  |  |
Level 2: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Term deposits, certificates of deposits, and GIC's | 140 |  |  | — |  |  | — |  |  |  |  | 140 |  |  | 53 |  |  | 59 |  |  | — |  |  | 28 |  |  |
Bankers’ acceptances/bearer deposit notes | 20 |  |  | — |  |  | — |  |  |  |  | 20 |  |  | 12 |  |  | 8 |  |  | — |  |  | — |  |  |
Commercial paper | 192 |  |  | — |  |  | — |  |  |  |  | 192 |  |  | 40 |  |  | 152 |  |  | — |  |  | — |  |  |
Non-U.S. promissory notes | 127 |  |  | — |  |  | — |  |  |  |  | 127 |  |  | 46 |  |  | 81 |  |  | — |  |  | — |  |  |
Non-U.S. government sponsored enterprise notes | 129 |  |  | — |  |  | — |  |  |  |  | 129 |  |  | — |  |  | 129 |  |  | — |  |  | — |  |  |
Non-U.S. treasury bills/notes | 24 |  |  | — |  |  | — |  |  |  |  | 24 |  |  | 12 |  |  | 12 |  |  | — |  |  | — |  |  |
| 632 |  |  | — |  |  | — |  |  |  |  | 632 |  |  | 163 |  |  | 441 |  |  | — |  |  | 28 |  |  |
Level 3: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
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. The components of cash, cash equivalents and investments by fair value level as at February 28, 2021 were as follows:
| Cost Basis |  |  |  | Unrealized Losses |  |  |  | Fair Value |  | Cash and Cash Equivalents |  | Short-term Investments |  | Long-term Investments |  | Restricted Cash Equivalents |  | Restricted Short-term Investments
Bank balances | $ | 165 |  |  |  |  | $ | — |  |  |  |  | $ | 165 |  |  | $ | 165 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Other investments | 37 |  |  |  |  | — |  |  |  |  | 37 |  |  | — |  |  | — |  |  | 37 |  |  | — |  |  | — |
| 202 |  |  |  |  | — |  |  |  |  | 202 |  |  | 165 |  |  | — |  |  | 37 |  |  | — |  |  | — |
Level 1: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Equity securities | 10 |  |  |  |  | (7) |  |  |  |  | 3 |  |  | — |  |  | 3 |  |  | — |  |  | — |  |  | — |
Level 2: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Term deposits, certificates of deposits, and GICs | 138 |  |  |  |  | — |  |  |  |  | 138 |  |  | 7 |  |  | 103 |  |  | — |  |  | 4 |  |  | 24 |
Bearer deposit notes | 40 |  |  |  |  | — |  |  |  |  | 40 |  |  | — |  |  | 40 |  |  | — |  |  | — |  |  | — |
Commercial paper | 162 |  |  |  |  | — |  |  |  |  | 162 |  |  | 15 |  |  | 147 |  |  | — |  |  | — |  |  | — |
Non-U.S. promissory notes | 55 |  |  |  |  | — |  |  |  |  | 55 |  |  | 26 |  |  | 29 |  |  | — |  |  | — |  |  | — |
Non-U.S. government sponsored enterprise notes | 154 |  |  |  |  | — |  |  |  |  | 154 |  |  | 1 |  |  | 153 |  |  | — |  |  | — |  |  | — |
Non-U.S. treasury bills/notes | 25 |  |  |  |  | — |  |  |  |  | 25 |  |  | — |  |  | 25 |  |  | — |  |  | — |  |  | — |
Corporate notes/bonds | 25 |  |  |  |  | — |  |  |  |  | 25 |  |  | — |  |  | 25 |  |  | — |  |  | — |  |  | — |
| 599 |  |  |  |  | — |  |  |  |  | 599 |  |  | 49 |  |  | 522 |  |  | — |  |  | 4 |  |  | 24 |
| $ | 811 |  |  |  |  | $ | (7) |  |  |  |  | $ | 804 |  |  | $ | 214 |  |  | $ | 525 |  |  | $ | 37 |  |  | $ | 4 |  |  | $ | 24 |
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. The letters of credit are for terms ranging from one month to four years. The Company is legally restricted from accessing these funds during the term of the leases for which the letters of credit have been issued; 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 November 30, 2021 and February 28, 2021 from the consolidated balance sheets to the consolidated statements of cash flows:
| As at
| November 30, 2021 |  | February 28, 2021
Cash and cash equivalents | $ | 271 |  |  | $ | 214 |
Restricted cash and cash equivalents | 29 |  |  | 4 |
Total cash, cash equivalents, restricted cash, and restricted cash equivalents presented in the consolidated statements of cash flows | $ | 300 |  |  | $ | 218 |
The contractual maturities of available-for-sale investments as at November 30, 2021 and February 28, 2021 were as follows:
| As at |  |
| November 30, 2021 |  |  |  | February 28, 2021 |  |
| Cost Basis |  | Fair Value |  |  |  | Cost Basis |  | Fair Value |  |
Due in one year or less | $ | 632 |  |  | $ | 632 |  |  |  |  | $ | 599 |  |  | $ | 599 |  |  |
No fixed maturity | 10 |  |  | 1 |  |  |  |  | 10 |  |  | 3 |  |  |
| $ | 642 |  |  | $ | 633 |  |  |  |  | $ | 609 |  |  | $ | 602 |  |  |
As at November 30, 2021 and February 28, 2021, the Company had no available-for-sale debt securities with continuous unrealized losses

X
- References No definition available. + Details
Name: | us-gaap_CashAndCashEquivalentsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure of the components of cash, cash equivalents, and short-term investments. Short-term investments may include current marketable securities. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 320 -URI http://asc.fasb.org/topic&trid=2196928 + Details
Name: | us-gaap_CashCashEquivalentsAndShortTermInvestmentsTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration