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Fair Value Measurements, Cash, Cash Equivalents and Investments
 12 Months Ended
Feb. 29, 2024
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.
The Company’s cash and cash equivalents, accounts receivable, other receivables, accounts payable and accrued liabilities are carried at amounts that approximate their fair values (Level 2 measurement) due to their short maturities.
Recurring Fair Value Measurements
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.
For a description of how the fair values of the Extension Debentures and 2020 Debentures were determined, see the “Convertible debentures” accounting policies in Note 1. The Extension Debentures are classified as Level 2 and the 2020 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.
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 fourth quarter of fiscal 2024, as part of its process for setting the annual operating plan for fiscal 2025, the Company updated its estimates of long-term future cash flows to reflect lower revenue and EBITDA growth rate expectations and a reduction in revenue multiples used in the valuation of the BlackBerry Spark reporting unit. These changes in estimates, combined with the continued global economic uncertainty, customer budgetary constraints, and inflation, as well as higher interest rates implemented in response to inflation, and a broad-based stock market decline impacting the Company’s market capitalization, resulted in the recognition of a goodwill impairment charge of $35 million in the BlackBerry Spark reporting unit, which is included within the Company’s Cybersecurity segment as disclosed in Note 12. Based on the results of the annual goodwill impairment test for the BlackBerry Spark reporting unit, based on the income approach using a discounted future cash flow model and market-based approaches, it was concluded that the carrying value exceeded its fair value, necessitating an impairment charge for the amount of excess and reducing the carrying value of goodwill. The estimated fair values of the Company’s other reporting units substantially exceeded their carrying values as at the annual goodwill impairment test date, with the exception of the Intellectual Property reporting unit.
Assumptions and estimates about future cash flows and discount rates are complex and often subjective and require significant judgement. The analysis is dependent on internal forecasts, estimation of the long-term rates of revenue growth for the Company’s reporting units, estimation of the useful life over which cash flows will occur, terminal growth rates, profitability measures, and determination of the discount rates for the reporting units.
During the year ended February 28, 2023, the Company recorded a goodwill impairment charge of $245 million in the BlackBerry Spark reporting unit, which is included within the Company’s Cybersecurity segment as disclosed in Note 12. The estimated fair values of the Company’s other reporting units substantially exceeded their carrying values as at the annual goodwill impairment test date.
During the year ended February 28, 2022, there were no goodwill impairment charges. In its annual goodwill impairment test in the fourth quarter of fiscal 2022, the Company’s estimates indicated the fair values of all its reporting units substantially exceeded their carrying values, such carrying values were expected to be recovered, and there was no goodwill impairment.
Impairment of Long-Lived Assets (“LLA”)
During the year ended February 29, 2024, the Company exited certain leased facilities and recorded a pre-tax and after-tax impairment charge of $7 million, related to the 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 3 inputs. The fair value of the ROU asset was based on the estimated sublease income for certain facilities taking into consideration the estimated time period it will take to obtain a sublessor, the applicable discount rate and the sublease rate, which are considered unobservable inputs. 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. These ROU impaired assets are classified within Level 3 of the fair value hierarchy.
The Company conducts regular reviews of the individual patents, both organically generated and acquired, comprising its patent portfolio. As a result of this review, for the year ended February 29, 2024, the Company determined it had an indicator of impairment, as it had ceased enforcement and abandoned the legal right and title to patents with a cost of $15 million, accumulated amortization of $7 million, and a net book value of $8 million, which is classified as an impairment of long-lived assets on the Company’s consolidated statements of operations.
During the year ended February 28, 2023, the Company recorded a non-cash, pre-tax and after-tax impairment charge of $235 million consisting of $231 million related to the Company’s UES asset group, which is primarily composed of intangible assets recognized on the acquisition of Cylance and is included within the Company’s Cybersecurity segment
as disclosed in Note 12 and $4 million related to operating lease ROU assets for certain leased facilities that were exited during the fiscal year. None of the Company’s other asset groups demonstrated indicators of potential impairment.
During the year ended February 28, 2022, there were no LLA impairment charges.
Cash, Cash Equivalents and Investments
The components of cash, cash equivalents and investments by fair value level as at February 29, 2024 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$96 $— $— $96 $96 $— $— $— 
Other investments30 6 — 36 — — 36 — 
126 6 — 132 96 — 36 — 
Level 1:
Equity securities10 — (10)— — — — — 
Level 2:
Term deposits, and certificates of deposits21 — — 21 — — — 21 
Bearer deposit notes53 — — 53 28 25 — — 
Commercial paper47 — — 47 15 32 — — 
Non-U.S. promissory notes35 — — 35 30 5 — — 
U.S. treasury bills10 — — 10 6 — — 4 
166 — — 166 79 62 — 25 
$302 $6 $(10)$298 $175 $62 $36 $25 
______________________________
(1) Cost basis for other investments includes the effect of returns of capital and impairment.
The components of cash, cash equivalents and investments by fair value level as at February 28, 2023 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$89 $— $— $89 $87 $— $— $2 
Other investments26 2 — 28 — — 28 — 
115 2 — 117 87 — 28 2 
Level 1:
Equity securities10 — (10)— — — — — 
Level 2:
Term deposits, and certificates of deposits33 — — 33 8 — — 25 
Bearer deposit notes82 — — 82 82 — — — 
Commercial paper159 — — 159 108 51 — — 
Non-U.S. promissory notes45 — — 45 — 45 — — 
Non-U.S. government sponsored enterprise notes30 — — 30 10 20 — — 
Corporate notes/bonds15 — — 15 — 15 — — 
364 — — 364 208 131 — 25 
Level 3:
Other investments2 4 — 6 — — 6 — 
$491 $6 $(10)$487 $295 $131 $34 $27 
______________________________
(1) Cost basis for other investments includes the effect of returns of capital and impairment.
As at February 29, 2024, the Company had non-marketable equity investments without readily determinable fair value of $36 million (February 28, 2023 - $34 million). During the year ended February 29, 2024, there was no impairment recognized relating to non-marketable equity investments without readily determinable fair value (February 28, 2023 and February 28, 2022 - nil). As of February 29, 2024, 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, 2023 - $3 million).
During the year ended February 28, 2022, the Company received a distribution from a non-marketable equity investment without readily determinable fair value in the amount of $35 million, which for accounting purposes, consisted of a return of capital of $13 million and a realized gain of $22 million included in investment income, net on the Company’s consolidated statements of operations.
There were no realized gains or losses on available-for-sale securities for the year ended February 29, 2024 (February 28, 2023 and February 28, 2022 - nil).
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 two 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 February 29, 2024, February 28, 2023 and February 28, 2022 from the consolidated balance sheets to the consolidated statements of cash flows:
As at
February 29, 2024February 28, 2023February 28, 2022
Cash and cash equivalents$175 $295 $378 
Restricted cash and cash equivalents25 27 28 
Total cash, cash equivalents, restricted cash, and restricted cash equivalents presented in the consolidated statements of cash flows
$200 $322 $406 
The contractual maturities of available-for-sale investments as at February 29, 2024 and February 28, 2023 were as follows:
As at
February 29, 2024February 28, 2023
Cost BasisFair ValueCost BasisFair Value
Due in one year or less $166 $166 $364 $364 
No fixed maturity 10 — 10 — 
$176 $166 $374 $364 
As at February 29, 2024 and February 28, 2023, the Company had no available-for-sale debt securities with continuous unrealized losses.