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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 ________________________
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended August 31, 2022

OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from     to

Commission file number 001-38232
 ______________________________________________________
BlackBerry Limited
(Exact name of registrant as specified in its charter)
Canada
98-0164408
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)
2200 University Ave East
WaterlooOntarioCanada
N2K 0A7
(Address of Principal Executive Offices)
(Zip Code)
(519) 888-7465
(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common SharesBBNew York Stock Exchange
Common SharesBBToronto Stock Exchange

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  o 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes  x   No  o 

1



Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
x
Accelerated filer
Non-accelerated filer  
o
Smaller reporting company
Emerging growth company
                
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes ☐   No  x

The registrant had 577,416,687 common shares issued and outstanding as of September 23, 2022.
 

2




BLACKBERRY LIMITED
TABLE OF CONTENTS
Page No.
PART I FINANCIAL INFORMATION
Item 1Financial Statements
Consolidated Balance Sheets as of August 31, 2022 (unaudited) and February 28, 2022
Consolidated Statements of Shareholders' Equity - Three and Six Months Ended August 31, 2022 and 2021 (unaudited)
Consolidated Statements of Operations - Three and Six Months Ended August 31, 2022 and 2021 (unaudited)
Consolidated Statements of Comprehensive Loss - Three and Six Months Ended August 31, 2022 and 2021 (unaudited)
Consolidated Statements of Cash Flows - Six Months Ended August 31, 2022 and 2021 (unaudited)
Notes to the Consolidated Financial Statements
Item 2Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3Quantitative and Qualitative Disclosures about Market Risk
Item 4Controls and Procedures
PART IIOTHER INFORMATION
Item 1Legal Proceedings
Item 6Exhibits
Signatures

3




Unless the context otherwise requires, all references to the “Company” and “BlackBerry” include BlackBerry Limited and its subsidiaries.

PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
4


BlackBerry Limited
Incorporated under the Laws of Ontario
(United States dollars, in millions) (unaudited)
Consolidated Balance Sheets
 As at
 August 31, 2022February 28, 2022
Assets
Current
Cash and cash equivalents (note 2)$431 $378 
Short-term investments (note 2)212 334 
Accounts receivable, net of allowance of $4 and $4, respectively (note 3)
100 138 
Other receivables (note 3)15 25 
Income taxes receivable 9 9 
Other current assets (note 3)173 159 
940 1,043 
Restricted cash and cash equivalents (note 2)27 28 
Long-term investments (note 2)29 30 
Other long-term assets (note 3)8 9 
Operating lease right-of-use assets, net40 50 
Property, plant and equipment, net (note 3)27 41 
Goodwill (note 3)837 844 
Intangible assets, net (note 3)473 522 
$2,381 $2,567 
Liabilities
Current
Accounts payable $20 $22 
Accrued liabilities (note 3 and note 9)300 157 
Income taxes payable (note 4)17 11 
Deferred revenue, current (note 10)179 207 
516 397 
Deferred revenue, non-current (note 10)30 37 
Operating lease liabilities54 66 
Other long-term liabilities2 4 
Long-term debentures (note 5)449 507 
1,051 1,011 
Commitments and contingencies (note 9)
Shareholders’ equity
Capital stock and additional paid-in capital
Preferred shares: authorized unlimited number of non-voting, cumulative, redeemable and retractable  
Common shares: authorized unlimited number of non-voting, redeemable, retractable Class A common shares and unlimited number of voting common shares
Issued - 577,415,891 voting common shares (February 28, 2022 - 576,227,898)
2,887 2,869 
Deficit(1,529)(1,294)
Accumulated other comprehensive loss (note 8)(28)(19)
1,330 1,556 
$2,381 $2,567 
See notes to consolidated financial statements.

On behalf of the Board: 
John S. ChenLisa Disbrow
DirectorDirector
5


BlackBerry Limited
(United States dollars, in millions) (unaudited)
Consolidated Statements of Shareholders’ Equity

Three Months Ended August 31, 2022
Capital Stock
and Additional
Paid-in Capital
DeficitAccumulated
Other
Comprehensive Loss
Total
Balance as at May 31, 2022$2,880 $(1,475)$(20)$1,385 
Net loss— (54)— (54)
Other comprehensive loss— — (8)(8)
Stock-based compensation7 — — 7 
Balance as at August 31, 2022$2,887 $(1,529)$(28)$1,330 

Three Months Ended August 31, 2021
Capital Stock
and Additional
Paid-in Capital
DeficitAccumulated
Other
Comprehensive Loss
Total
Balance as at May 31, 2021$2,834 $(1,368)$(10)$1,456 
Net loss— (144)— (144)
Other comprehensive loss— — (5)(5)
Stock-based compensation10 — — 10 
Shares issued:
Exercise of stock options 1 — — 1 
Balance as at August 31, 2021$2,845 $(1,512)$(15)$1,318 

See notes to consolidated financial statements.

6


BlackBerry Limited
(United States dollars, in millions) (unaudited)
Consolidated Statements of Shareholders’ Equity

Six Months Ended August 31, 2022
Capital Stock
and Additional
Paid-in Capital
DeficitAccumulated
Other
Comprehensive Loss
Total
Balance as at February 28, 2022$2,869 $(1,294)$(19)$1,556 
Net loss— (235)— (235)
Other comprehensive loss— — (9)(9)
Stock-based compensation (note 6)15 — — 15 
Shares issued:
Employee share purchase plan (note 6)3 — — 3 
Balance as at August 31, 2022$2,887 $(1,529)$(28)$1,330 

Six Months Ended August 31, 2021
Capital Stock
and Additional
Paid-in Capital
DeficitAccumulated
Other
Comprehensive Loss
Total
Balance as at February 28, 2021$2,823 $(1,306)$(13)$1,504 
Net loss— (206)— (206)
Other comprehensive loss— — (2)(2)
Stock-based compensation17 — — 17 
Shares issued:
Exercise of stock options2 — — 2 
Employee share purchase plan3 — — 3 
Balance as at August 31, 2021$2,845 $(1,512)$(15)$1,318 

See notes to consolidated financial statements.

7


BlackBerry Limited
(United States dollars, in millions, except per share data) (unaudited)
Consolidated Statements of Operations
 
 Three Months EndedSix Months Ended
 August 31, 2022August 31, 2021August 31, 2022August 31, 2021
Revenue (note 10)$168 $175 $336 $349 
Cost of sales62 63 126 123 
Gross margin106 112 210 226 
Operating expenses
Research and development54 58 107 115 
Selling, marketing and administration86 83 168 156 
Amortization25 45 52 91 
Impairment of long-lived assets (note 2)4  4  
Gain on sale of property, plant and equipment, net (note 3)(6) (6) 
Debentures fair value adjustment (note 5)(10)67 (56)63 
Litigation settlement (note 9)  165  
153 253 434 425 
Operating loss(47)(141)(224)(199)
Investment loss, net(2)(1)(3)(3)
Loss before income taxes(49)(142)(227)(202)
Provision for income taxes (note 4)5 2 8 4 
Net loss$(54)$(144)$(235)$(206)
Loss per share (note 7)
Basic$(0.09)$(0.25)$(0.41)$(0.36)
Diluted$(0.10)$(0.25)$(0.45)$(0.36)
See notes to consolidated financial statements.

8


BlackBerry Limited
(United States dollars, in millions) (unaudited)
Consolidated Statements of Comprehensive Loss
 
 Three Months Ended Six Months Ended
 August 31, 2022August 31, 2021August 31, 2022August 31, 2021
Net loss$(54)$(144)$(235)$(206)
Other comprehensive 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, 2022 and August 31, 2021 (note 8)(2)(2)(1)(1)
Foreign currency translation adjustment(6)(3)(10)(2)
Net change in fair value from instrument-specific credit risk on the 1.75% Debentures, net of income taxes of nil for the three and six months ended August 31, 2022 and August 31, 2021 (note 5)  2 1 
Other comprehensive loss(8)(5)(9)(2)
Comprehensive loss$(62)$(149)$(244)$(208)
See notes to consolidated financial statements.

9


BlackBerry Limited
(United States dollars, in millions) (unaudited)
Consolidated Statements of Cash Flows
 Six Months Ended
  August 31, 2022August 31, 2021
Cash flows from operating activities
Net loss$(235)$(206)
Adjustments to reconcile net loss to net cash used in operating activities:
Amortization57 97 
Stock-based compensation15 17 
Impairment of long-lived assets (note 2)4  
Gain on sale of property, plant and equipment, net (note 3)(6) 
Debentures fair value adjustment (note 5)(56)63 
Operating leases(9)(8)
Other3 (2)
Net changes in working capital items
Accounts receivable, net of allowance38 61 
Other receivables10 2 
Income taxes receivable 1 
Other assets(1)4 
Accounts payable(2)2 
Accrued liabilities145 (2)
Income taxes payable6 3 
Deferred revenue(35)(50)
Net cash used in operating activities(66)(18)
Cash flows from investing activities
Acquisition of long-term investments(2)(1)
Acquisition of property, plant and equipment(4)(4)
Proceeds on sale of property, plant and equipment (note 3)17  
Acquisition of intangible assets(16)(14)
Acquisition of short-term investments(273)(429)
Proceeds on sale or maturity of restricted short-term investments 24 
Proceeds on sale or maturity of short-term investments395 537 
Net cash provided by investing activities117 113 
Cash flows from financing activities
Issuance of common shares3 5 
Net cash provided by financing activities3 5 
Effect of foreign exchange loss on cash, cash equivalents, restricted cash, and restricted cash equivalents(2) 
Net increase in cash, cash equivalents, restricted cash, and restricted cash equivalents during the period52 100 
Cash, cash equivalents, restricted cash, and restricted cash equivalents, beginning of period406 218 
Cash, cash equivalents, restricted cash, and restricted cash equivalents, end of period$458 $318 
See notes to consolidated financial statements.
10

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)





1.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND CRITICAL ACCOUNTING ESTIMATES
Basis of Presentation and Preparation
These interim consolidated financial statements have been prepared by management in accordance with United States generally accepted accounting principles (“U.S. GAAP”). They do not include all of the disclosures required by U.S. GAAP for annual financial statements and should be read in conjunction with the audited consolidated financial statements of BlackBerry Limited (the “Company”) for the year ended February 28, 2022 (the “Annual Financial Statements”), which have been prepared in accordance with U.S. GAAP. 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, 2022 are not necessarily indicative of the results that may be expected for the full year ending February 28, 2023. The consolidated balance sheet at February 28, 2022 was derived from the audited Annual Financial Statements but does not contain all of the footnote disclosures from the Annual Financial Statements.
The preparation of the consolidated financial statements requires management to make estimates and assumptions with respect to the reported amounts of assets, liabilities, revenue and expenses and the disclosure of contingent assets and liabilities. Actual results could differ from these estimates and any such differences may be material to the Company’s consolidated financial statements.
Certain of the comparative figures have been reclassified to conform to the current period’s presentation.
The Company is organized and managed as three reportable operating segments: Cybersecurity, IoT (collectively, “Software & Services”), and Licensing and Other, as further discussed in Note 10.
Significant Accounting Policies and Critical Accounting Estimates
There have been no material changes to the Company’s accounting policies or critical accounting estimates from those described in the Annual Financial Statements.
Accounting Standards Adopted During Fiscal 2023
ASU 2020-06, Debt with Conversion and Other Options
In August 2020, the Financial Standards Accounting Board (“FASB”) issued a new accounting standard on the topic of debt with conversion and other options, accounting standards update (“ASU”) 2020-06. The amendment in this update simplifies the accounting for convertible instruments by reducing the number of accounting models available for convertible debt instruments and convertible preferred stock. This update also amends the guidance for the derivatives scope exception for contracts in an entity’s own equity to reduce form-over-substance-based accounting conclusions and requires the application of the if-converted method for calculating diluted earnings per share. The update also requires entities to provide expanded disclosures about the terms and features of convertible instruments, how the instruments have been reported in the entity’s financial statements, and information about events, conditions, and circumstances that can affect how to assess the amount or timing of an entity’s future cash flows related to those instruments. The guidance is effective for interim and annual periods beginning after December 15, 2021. The Company adopted this guidance in the first quarter of fiscal 2023 and it did not have a material impact on its results of operations, financial position and disclosures as the fair value option accounting model used by the Company is not impacted by this ASU and the Company already utilizes the if-converted method in its calculation of diluted earnings per share relating to the 1.75% Debentures (as defined in Note 5).
ASU 2021-08, Business Combinations
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 early adopted this guidance in the first quarter of fiscal 2023, and will apply it prospectively to any business acquisitions subsequent to the date of adoption.
11

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)





ASU 2021-10, Government Assistance
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 adopted this guidance in the first quarter of fiscal 2023 and does not expect the adoption to have a material impact on its annual disclosures.
2.    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 public equity securities obtained through an initial public offering by the issuer of a previously held non-marketable equity investment.
For a description of how the fair value of the 1.75% Debentures (as defined in Note 5) was determined, see the “Convertible debentures” accounting policies in Note 1 to the Annual Financial Statements. The 1.75% Debentures are classified as Level 3.
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.
12

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)





Impairment of Long-Lived Assets
During the second quarter of fiscal 2023, the Company decided to exit and seek subleases for certain leased facilities. The Company recorded a non-cash, pre-tax and after-tax impairment charge of $4 million related to the operating lease right-of-use (“ROU”) assets for those facilities. The impairment was determined by comparing the fair value of the impacted ROU asset to the carrying value of the asset as of the impairment measurement date, as required under ASC Topic 360, Property, Plant, and Equipment, using Level 2 inputs. The fair value of the ROU asset was based on the estimated sublease income for certain facilities taking into consideration the time period it will take to obtain a sublessor, the applicable discount rate and the sublease rate. The Company conducts an evaluation of the related liabilities and expenses and revises its assumptions and estimates as appropriate as new or updated information becomes available.
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.
Cash, Cash Equivalents and Investments
The components of cash, cash equivalents and investments by fair value level as at August 31, 2022 were as follows:
Cost Basis (1)
Unrealized
Gains
Unrealized
Losses
Fair ValueCash and
Cash
Equivalents
Short-term
Investments
Long-term
Investments
Restricted Cash and Cash Equivalents
Bank balances$114 $ $ $114 $112 $ $ $2 
Other investments27 2  29   29  
141 2  143 112  29 2 
Level 1:
Equity securities10  (10)     
Level 2:
Term deposits and certificates of deposits35   35 10   25 
Bearer deposit notes126   126 126    
Commercial paper198   198 83 115   
Non-U.S. promissory notes79   79 44 35   
Non-U.S. treasury bills/notes25   25 25    
Non-U.S. government sponsored enterprise notes75   75 13 62   
U.S. treasury bills/notes18   18 18    
556   556 319 212  25 
$707 $2 $(10)$699 $431 $212 $29 $27 
______________________________
(1) Cost basis for other investments includes the effect of returns of capital and impairment.
13

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)





The components of cash, cash equivalents and investments by fair value level as at February 28, 2022 were as follows:
Cost Basis (1)
Unrealized
Gains
Unrealized
Losses
Fair ValueCash and
Cash
Equivalents
Short-term
Investments
Long-term
Investments
Restricted Cash and Cash Equivalents
Bank balances$105 $ $ $105 $104 $ $ $1 
Other investments8   8   8  
113   113 104  8 1 
Level 1:
Equity securities10  (9)1  1   
Level 2:
Term deposits, certificates of deposits, and GICs157   157 65 65  27 
Bankers’ acceptances/bearer deposit notes58   58 58    
Commercial paper247   247 62 185   
Non-U.S. promissory notes71   71 46 25   
Non-U.S. government sponsored enterprise notes58   58  58   
Non-U.S. treasury bills/notes43   43 43    
634   634 274 333  27 
Level 3:
Other investments17 5  22   22  
$774 $5 $(9)$770 $378 $334 $30 $28 
______________________________
(1) Cost basis for other investments includes the effect of returns of capital and impairment.
As at August 31, 2022, the Company had private non-marketable equity investments without readily determinable fair value of $29 million (February 28, 2022 - $30 million). As of August 31, 2022, the Company has recorded a cumulative impairment of $3 million to the carrying value of certain other non-marketable equity investments without readily determinable fair value (February 28, 2022 - $3 million).
There were no realized gains or losses on available-for-sale securities for the three and six months ended August 31, 2022 and August 31, 2021.
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. 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 three 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 August 31, 2022 and February 28, 2022 from the consolidated balance sheets to the consolidated statements of cash flows:
As at
August 31, 2022February 28, 2022
Cash and cash equivalents$431 $378 
Restricted cash and cash equivalents27 28 
Total cash, cash equivalents, restricted cash, and restricted cash equivalents presented in the consolidated statements of cash flows
$458 $406 
14

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)





The contractual maturities of available-for-sale investments as at August 31, 2022 and February 28, 2022 were as follows:
As at
August 31, 2022February 28, 2022
Cost BasisFair ValueCost BasisFair Value
Due in one year or less $556 $556 $634 $634 
No fixed maturity 10  10 1 
$566 $556 $644 $635 
As at August 31, 2022 and February 28, 2022, the Company had no available-for-sale debt securities with continuous unrealized losses.
3.    CONSOLIDATED BALANCE SHEET DETAILS
Accounts Receivable, Net of Allowance
The allowance for credit losses as at August 31, 2022 was $4 million (February 28, 2022 - $4 million).
The Company recognizes current estimated credit losses (“CECL”) for accounts receivable. The CECL for accounts receivable are estimated based on days past due and region for each customer in relation to a representative pool of assets consisting of a large number of customers with similar risk characteristics that operate under similar economic environments. The Company determined the CECL by estimating historical credit loss experience based on the past due status and region of the customers, adjusted as appropriate to reflect current conditions and estimates of future economic conditions. When specific customers are identified as no longer sharing the same risk profile as their current pool, they are removed from the pool and evaluated separately. 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:
As at
August 31, 2022
Beginning balance as of February 28, 2021$10 
Prior period recovery for expected credit losses(2)
Write-offs charged against the allowance(4)
Ending balance of the allowance for credit loss as at February 28, 20224 
Current period recovery for expected credit losses  
Ending balance of the allowance for credit loss as at August 31, 2022$4 
The allowance for credit losses as at August 31, 2022 consists of $1 million (February 28, 2022 - $2 million) relating to CECL estimated based on days past due and region and $3 million (February 28, 2022 - $2 million) relating to specific customers that were evaluated separately.
There was no customer that comprised more than 10% of accounts receivable as at August 31, 2022 (February 28, 2022 - no customer comprised more than 10%).
Other Receivables
As at August 31, 2022, other receivables included items such as an intellectual property licensing receivable, among other items, none of which were greater than 5% of the current assets balance.
As at February 28, 2022, other receivables included items such as receivables from the Government of Canada’s Hardest-Hit Business Recovery Program (“HHBRP”) and an intellectual property licensing receivable, among other items, none of which were greater than 5% of the current assets balance.
15

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)





Other Current Assets
Other current assets comprised the following:
 As at
 August 31, 2022February 28, 2022
Intellectual property$132 $118 
Other41 41 
$173 $159 
On January 29, 2022, the Company entered into a patent sale agreement with Catapult IP Innovations, Inc. (“Catapult”), pursuant to which the Company agreed to sell substantially all of its non-core patent assets to Catapult for a total transaction price of $600 million. Patents that are essential to the Company’s current core business operations are excluded from the transaction. Pursuant to the patent sale agreement, the Company would receive a license back to the patents being sold, which relate primarily to mobile devices, messaging and wireless networking. Completion of the revenue transaction is subject to the satisfaction of closing conditions. Catapult continues to work on securing its required financing; however, the Company is no longer under exclusivity with Catapult and is continuing to explore alternative options in parallel. For the year ended February 28, 2022, the Company had classified $118 million of intellectual property that would be sold under the patent sale agreement with Catapult as other current assets on the Company’s consolidated balance sheets relating to the patent sale agreement. As at August 31, 2022, the Company continues to classify $132 million of intellectual property, which includes the initial $118 million of intellectual property that would be sold under the patent sale agreement with Catapult with additions related to patent maintenance, as other current assets on the Company’s consolidated balance sheets.
Other current assets also 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:
 As at
 August 31, 2022February 28, 2022
Cost
BlackBerry operations and other information technology$94 $92 
Leasehold improvements and other18 53 
Furniture and fixtures10 10 
Manufacturing, repair and research and development equipment2 1 
124 156 
Accumulated amortization97 115 
Net book value$27 $41 
Sale of Property, Plant and Equipment, Net
During the second quarter of fiscal 2023, the Company completed the sale of its corporate aircraft. As a result, the Company recorded proceeds of approximately $17 million and incurred a gain on disposal of approximately $6 million (cost of $29 million, accumulated amortization of $18 million, and a net book value of approximately $11 million).
16

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)





Intangible Assets, Net
Intangible assets comprised the following:
 As at August 31, 2022
 CostAccumulated
Amortization
Net Book
Value
Acquired technology$1,023 $802 $221 
Other acquired intangibles494 302 192 
Intellectual property120 60 60 
$1,637 $1,164 $473 
As at February 28, 2022
CostAccumulated
Amortization
Net Book
Value
Acquired technology$1,023 $776 $247 
Other acquired intangibles494 283 211 
Intellectual property117 53 64 
$1,634 $1,112 $522 
For the six months ended August 31, 2022, amortization expense related to intangible assets amounted to $50 million (six months ended August 31, 2021 - $89 million).
Total additions to intangible assets for the six months ended August 31, 2022 amounted to $16 million (six months ended August 31, 2021 - $14 million). During the six months ended August 31, 2022, 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, 2022, and assuming no subsequent impairment of the underlying assets, the annual amortization expense for the remainder of fiscal 2023 and each of the five succeeding years is expected to be as follows: fiscal 2023 - $50 million; fiscal 2024 - $95 million; fiscal 2025 - $90 million; fiscal 2026 - $86 million; fiscal 2027 - $79 million and fiscal 2028 - $44 million.
Goodwill
Changes to the carrying amount of goodwill during the six months ended August 31, 2022 were as follows:
Carrying Amount
Carrying amount as at February 28, 2021$849 
Effect of foreign exchange on non-U.S. dollar denominated goodwill(5)
Carrying amount as at February 28, 2022844 
Effect of foreign exchange on non-U.S. dollar denominated goodwill(7)
Carrying amount as at August 31, 2022$837 
In the fourth quarter of fiscal 2022, the Company announced that it had agreed to the sale of a significant amount of patent assets to Catapult subject to the satisfaction of closing conditions. The completion of the sale would accelerate the timing of estimated cash flows for the Intellectual Property reporting unit and, based upon changes in the estimates to future cash flows following the contemplated sale, could potentially result in impacts that would be material to the consolidated financial statements in relation to the recoverability of the carrying value of that reporting unit.
Other Long-term Assets
As at August 31, 2022 and February 28, 2022, 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.
17

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)





Accrued Liabilities
Accrued liabilities comprised the following:
 As at
 August 31, 2022February 28, 2022
Accrued settlement (note 9)
$164 $ 
Accrued royalties20 20