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Consolidated Balance Sheets Details | 3 Months Ended
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May 31, 2024
Balance Sheet Related Disclosures [Abstract] |
Consolidated Balance Sheet Details | 3. CONSOLIDATED BALANCE SHEET DETAILS Accounts Receivable, Net of Allowance The current estimated credit losses (“CECL”) for accounts receivable as at May 31, 2024 was $5 million (February 29, 2024 - $6 million). The Company also has long-term accounts receivable included in Other Long-term Assets. The CECL for long-term accounts receivable is estimated using the probability of default method and the default exposure due to limited historical information. The exposure of default is represented by the assets’ amortized carrying amount at the reporting date. The following table sets forth the activity in the Company’s allowance for credit losses:
| Carrying Amount |  |
Beginning balance as of February 28, 2023 | $ | 1 |  |  |
Prior period provision for expected credit losses | 5 |  |  |
Ending balance of the allowance for credit loss as at February 29, 2024 | 6 |  |  |
Current period recovery for expected credit losses | (1) |  |  |
Ending balance of the allowance for credit loss as at May 31, 2024 | $ | 5 |  |  |
The allowance for credit losses as at May 31, 2024 consists of $1 million (February 29, 2024 - $1 million) relating to CECL estimated based on days past due and region and $4 million (February 29, 2024 - $5 million) relating to specific customers that were evaluated separately. There was one customer that comprised more than 10% of accounts receivable as at May 31, 2024 (February 29, 2024 - two customers comprised more than 10%). Other Receivables As at May 31, 2024 and February 29, 2024, other receivables included items such as claims filed with the Ministry of Innovation, Science and Economic Development Canada relating to its Strategic Innovation Fund program’s investment in BlackBerry QNX, among other items, none of which were greater than 5% of the current assets balance. Other Current Assets As at May 31, 2024 and February 29, 2024, other current assets included the current portion of deferred commissions and prepaid expenses, among other items, none of which were greater than 5% of the current assets balance as at the balance sheet dates. Property, Plant and Equipment, Net Property, plant and equipment comprised the following:
| As at
| May 31, 2024 |  | February 29, 2024
Cost |  |  |
BlackBerry operations and other information technology | $ | 86 |  |  | $ | 85 |
Leasehold improvements and other | 14 |  |  | 15 |
Furniture and fixtures | 6 |  |  | 6 |
Manufacturing, repair and research and development equipment | 2 |  |  | 3 |
| 108 |  |  | 109 |
Accumulated amortization | 89 |  |  | 88 |
Net book value | $ | 19 |  |  | $ | 21 |
Intangible Assets, Net Intangible assets comprised the following:
| As at May 31, 2024
| Cost |  | Accumulated Amortization |  | Net Book Value
Acquired technology | $ | 900 |  |  | $ | 851 |  |  | $ | 49 |
Other acquired intangibles | 386 |  |  | 337 |  |  | 49 |
Intellectual property | 110 |  |  | 63 |  |  | 47 |
| $ | 1,396 |  |  | $ | 1,251 |  |  | $ | 145 |
| As at February 29, 2024
| Cost |  | Accumulated Amortization |  | Net Book Value
Acquired technology | $ | 900 |  |  | $ | 846 |  |  | $ | 54 |
Other acquired intangibles | 386 |  |  | 334 |  |  | 52 |
Intellectual property | 111 |  |  | 63 |  |  | 48 |
| $ | 1,397 |  |  | $ | 1,243 |  |  | $ | 154 |
For the three months ended May 31, 2024, amortization expense related to intangible assets amounted to $11 million (three months ended May 31, 2023 - $13 million). Total additions to intangible assets for the three months ended May 31, 2024 amounted to $1 million (three months ended May 31, 2023 - $2 million). During the three months ended May 31, 2024, 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 May 31, 2024, and assuming no subsequent impairment of the underlying assets, the annual amortization expense for the remainder of fiscal 2025 and each of the five succeeding years is expected to be as follows: fiscal 2025 - $32 million; fiscal 2026 - $36 million; fiscal 2027 - $32 million; fiscal 2028 - $18 million; fiscal 2029 - $6 million and fiscal 2030 - $3 million Goodwill Changes to the carrying amount of goodwill during the three months ended May 31, 2024 were as follows:
| Carrying Amount
Carrying amount as at February 28, 2023 | $ | 595 |
Goodwill impairment charge | (35) |
Effect of foreign exchange on non-U.S. dollar denominated goodwill | 2 |
Carrying amount as at February 29, 2024 | 562 |
Effect of foreign exchange on non-U.S. dollar denominated goodwill | (1) |
Carrying amount as at May 31, 2024 | $ | 561 |
Other Long-term Assets As at May 31, 2024 and February 29, 2024, other long-term assets included long-term receivables related to intellectual property sold in fiscal 2024, see Note 10 under the heading “Patent Sale”, other long-term receivables, and the long-term portion of deferred commission, among other items, none of which were greater than 5% of the total assets balance. Accrued Liabilities Accrued liabilities is comprised of the following:
| As at
| May 31, 2024 |  | February 29, 2024
Operating lease liabilities, current | 20 |  |  | 20 |
Restructuring program liabilities, current portion | 11 |  |  | 20 |
Other | 81 |  |  | 77 |
| $ | 112 |  |  | $ | 117 |
Other accrued liabilities included current and accrued director fees, accrued vendor liabilities, variable incentive accrual, payroll withholding taxes and accrued royalties, among other items, none of which were greater than 5% of the current liabilities balance in any of the periods presented.
Restructuring and Integration | Restructuring During fiscal 2023 and fiscal 2024, the Company commenced restructuring programs with the objectives of reducing its annual costs and expenses relating to the Cybersecurity business, and later separating and streamlining the Company’s centralized corporate functions into Cybersecurity and IoT specific teams such that the businesses may operate independently and on a profitable and cash flow positive basis. The reduction of overall Company costs will include rationalizing and streamlining existing central administrative functions, right-sizing cost structures within both business units including R&D and outsourced contracting, changes to overall product portfolio offerings and geographies the Company operates in and optimizing related support functions and organizational structure. Other charges and cash costs may occur as programs are implemented or changes are completed. The following table sets forth the activity in the Company’s restructuring program liabilities:
| Employee Termination Benefits |  | Facilities Costs |  |  |  | Total
Balance as at February 28, 2023 | 2 |  |  | 1 |  |  |  |  | 3 |
Charges incurred | 31 |  |  | 6 |  |  |  |  | 37 |
Cash payments made | (16) |  |  | (3) |  |  |  |  | (19) |
Balance as at February 29, 2024 | 17 |  |  | 4 |  |  |  |  | 21 |
Charges incurred | 5 |  |  | 3 |  |  |  |  | 8 |
Cash payments made | (15) |  |  | (2) |  |  |  |  | (17) |
Balance as at May 31, 2024 | $ | 7 |  |  | $ | 5 |  |  |  |  | $ | 12 |
Current portion | $ | 7 |  |  | $ | 4 |  |  |  |  | $ | 11 |
Long-term portion | — |  |  | 1 |  |  |  | 1
| $ | 7 |  |  | $ | 5 |  |  |  |  | $ | 12 |
The long-term portion of the restructuring liabilities is recorded at present value, determined by measuring the remaining payments at present value using an effective interest rate of 5.7%, and the Company recorded interest expense over time to arrive at the total face value of the remaining payments. The restructuring charges included employee termination benefits and facilities costs to better align the Company’s general and administrative and R&D cost profiles to its market competitors, create a more focused sales force and improve profitability and cash flow. Total charges incurred for the three months ended May 31, 2024 and May 31, 2023 were $8 million and $5 million, respectively, recorded within General and administrative on the Consolidated Statements of Operations.

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