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Fair Value Measurements, Cash, Cash Equivalents and Investments
 3 Months Ended
May 31, 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, and a limited amount of public equity securities following the initial public offering by the issuer of a previous 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 long-lived assets, including property, plant and equipment, operating lease ROU assets, intangible assets and goodwill.
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.
Cash, Cash Equivalents and Investments
The components of cash, cash equivalents and investments by fair value level as at May 31, 2021 were as follows:
Cost BasisUnrealized
Losses		Fair ValueCash and
Cash
Equivalents		Short-term
Investments		Long-term
Investments		Restricted Cash Equivalents
Bank balances$90 $— $90 $90 $— $— $— 
Other investments37 — 37 — — 37 — 
127 — 127 90 — 37 — 
Level 1:
Equity securities10 (8)2 — 2 — — 
Level 2:
Term deposits, certificates of deposits, and GIC's147 — 147 60 58 — 29 
Bankers’ acceptances/bearer deposit notes45 — 45 45 — — — 
Commercial paper198 — 198 58 140 — — 
Non-U.S. promissory notes92 — 92 50 42 — — 
Non-U.S. government sponsored enterprise notes139 — 139 20 119 — — 
Non-U.S. treasury bills/notes16 — 16 16 — — — 
Corporate notes/bonds3 — 3 — 3 — — 
640 — 640 249 362 — 29 
$777 $(8)$769 $339 $364 $37 $29 
The components of cash, cash equivalents and investments by fair value level as at February 28, 2021 were as follows:
Cost BasisUnrealized
Losses		Fair ValueCash and
Cash
Equivalents		Short-term
Investments		Long-term
Investments		Restricted Cash EquivalentsRestricted Short-term Investments
Bank balances$165 $— $165 $165 $— $— $— $— 
Other investments37 — 37 — — 37 — — 
202 — 202 165 — 37 — — 
Level 1:
Equity securities10 (7)3 — 3 — — — 
Level 2:
Term deposits, certificates of deposits, and GICs138 — 138 7 103 — 4 24 
Bearer deposit notes40 — 40 — 40 — — — 
Commercial paper162 — 162 15 147 — — — 
Non-U.S. promissory notes55 — 55 26 29 — — — 
Non-U.S. government sponsored enterprise notes154 — 154 1 153 — — — 
Non-U.S. treasury bills/notes25 — 25 — 25 — — — 
Corporate notes/bonds25 — 25 — 25 — — — 
599 — 599 49 522 — 4 24 
$811 $(7)$804 $214 $525 $37 $4 $24 
As at May 31, 2021, the Company had private equity investments without readily determinable fair value of $37 million (February 28, 2021 - $37 million).
There were no realized gains or losses on available-for-sale securities for the three months ended May 31, 2021 (realized losses of nil for the three months ended May 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. 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 May 31, 2021 and February 28, 2021 from the consolidated balance sheets to the consolidated statements of cash flows:
As at
May 31, 2021February 28, 2021
Cash and cash equivalents$339 $214 
Restricted cash and cash equivalents29 4 
Total cash, cash equivalents, restricted cash, and restricted cash equivalents presented in the consolidated statements of cash flows
$368 $218 
The contractual maturities of available-for-sale investments as at May 31, 2021 and February 28, 2021 were as follows:
As at
May 31, 2021February 28, 2021
Cost BasisFair ValueCost BasisFair Value
Due in one year or less $640 $640 $599 $599 
No fixed maturity 10 2 10 3 
$650 $642 $609 $602 
As at May 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).