Press Release

December 20, 2007

Research In Motion Reports Third Quarter Results

Waterloo, ON - Research In Motion Limited (RIM)(NASDAQ:RIMM)(TSX:RIM), a world leader in the mobile communications market, today reported third quarter results for the three months ended December 1, 2007 (all figures in U.S. dollars and U.S. GAAP).

Revenue for the third quarter of fiscal 2008 was $1.67 billion, up 22% from $1.37 billion in the previous quarter and up 100% from $835.1 million in the same quarter of last year. The revenue breakdown for the quarter was approximately 80% for devices, 14% for service, 4% for software and 2% for other revenue. Approximately 1.65 million BlackBerry® subscriber accounts were added in the quarter and over 3.9 million devices were shipped. The total BlackBerry subscriber account base at the end of the third quarter was approximately 12 million.

"RIM's performance in the third quarter was solid with strong adoption of BlackBerry products and services continuing across multiple market sectors, including enterprise, small and medium business and consumer market segments," said Jim Balsillie, Co-CEO at Research In Motion. "RIM and its partners continue to execute our business plans effectively. We are pleased to see continuing growth amongst business and government users, with the BlackBerry platform being deployed for a widening range of applications, and we are also pleased with the excellent consumer sales results achieved so far in the holiday buying season."

Net Income for the quarter was $370.5 million, or $0.65 per share diluted, compared with net income of $287.7 million, or $0.50 per share diluted, in the prior quarter and net income of $175.2 million, or $0.31 per share diluted, in the same quarter last year. The net income for the quarter includes a tax recovery of approximately $10.7 million resulting from the resolution of a tax matter relating to RIM's Investment Tax Credits (ITCs).

Revenue for the fourth quarter of fiscal 2008 ending March 1, 2008 is expected to be in the range of $1.80-$1.87 billion. Net subscriber account additions in the fourth quarter are expected to be approximately 1.82 million. Earnings per share for the fourth quarter are expected to be in the range of $0.66-$0.70 per share diluted.

The total of cash and cash equivalents, short-term investments and investments was $2.13 billion as at December 1, 2007, compared to $1.73 billion at the end of the previous quarter, an increase of $405 million over the prior quarter. Uses of cash in the quarter included capital expenditures of approximately $97 million.

The company will hold a conference call and webcast today, live at 5:00 pm (eastern) and archived at http://www.rim.com/investors/events/index.shtml until midnight January 10, 2008. A replay of the Q3 conference call can also be accessed after 7 pm (eastern), December 20, 2007 until midnight (eastern), January 10, 2008 by dialing 416-640-1917 and entering passcode 21221692#.

About Research In Motion (RIM)
Research In Motion is a leading designer, manufacturer and marketer of innovative wireless solutions for the worldwide mobile communications market. Through the development of integrated hardware, software and services that support multiple wireless network standards, RIM provides platforms and solutions for seamless access to time-sensitive information including email, phone, SMS messaging, Internet and intranet-based applications. RIM technology also enables a broad array of third party developers and manufacturers to enhance their products and services with wireless connectivity. RIM's portfolio of award-winning products, services and embedded technologies are used by thousands of organizations around the world and include the BlackBerry® wireless platform, the RIM Wireless Handheld™ product line, software development tools, radio-modems and software/hardware licensing agreements. Founded in 1984 and based in Waterloo, Ontario, RIM operates offices in North America, Europe and Asia Pacific. RIM is listed on the Nasdaq Stock Market (NASDAQ:RIMM) and the Toronto Stock Exchange (TSX:RIM). For more information, visit www.rim.com or www.blackberry.com.

This news release contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 and Canadian securities laws, including statements relating to RIM's revenue and earnings expectations for the fourth quarter of fiscal 2008 and anticipated growth in subscribers. The terms and phrases, "belief", "will", "continue", "expected", "forecast", "plans" and similar terms and phrases are intended to identify these forward-looking statements. Forward-looking statements are based on estimates and assumptions made by RIM in light of its experience and its perception of historical trends, current conditions and expected future developments, as well as other factors that RIM believes are appropriate in the circumstances. Many factors could cause RIM's actual results, performance or achievements to differ materially from those expressed or implied by the forward-looking statements, including, without limitation: risks relating to the restatement of RIM's previously filed financial statements as a result of the internal review of RIM's historical option granting practices, and regulatory investigations and litigation relating to those matters, including possible sanctions or penalties against the Company or its directors or officers; risks relating to the efficient and uninterrupted operation of RIM's network operations center; restrictions on import and/or use of RIM's products in certain countries due to encryption of the products; risks relating to RIM's intellectual property rights; RIM's ability to enhance current products and develop new products and services; RIM's reliance on carrier partners, third-party manufacturers, third-party network developers and suppliers; and intense competition. These risk factors and others relating to RIM are discussed in greater detail in the "Risk Factors" section of RIM's Annual Information Form, which is included in its Annual Report on Form 40-F and RIM's MD&A (copies of which filings may be obtained at www.sedar.com or www.sec.gov). These factors should be considered carefully, and readers should not place undue reliance on RIM's forward-looking statements. RIM has no intention and undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

The BlackBerry and RIM families of related marks, images and symbols are the exclusive properties and trademarks of Research In Motion Limited. RIM, Research In Motion and BlackBerry are registered with the U.S. Patent and Trademark Office and may be pending or registered in other countries. All other brands, product names, company names, trademarks and service marks are the properties of their respective owners.

Research In Motion Limited
Incorporated under the Laws of Ontario
(United States dollars, in thousands except per share data) (unaudited)

Consolidated Statements of Operations

  For the three months ended
  December 1, 2007 September 1, 2007 December 2, 2006
Revenue $ 1,672,529 $ 1,372,250 $ 835,053
Cost of sales 824,657 667,833 382,422
 
Gross margin 847,872 704,417 452,631
 
Gross Margin % 50.7% 51.3% 54.2%
       
Expenses      
   Research and development 92,150 88,171 61,184
   Selling, marketing and administration 238,175 197,943 146,569
   Amortization 27,653 25,350 20,334
 
  357,978 311,464 228,087
 
Income from operations 489,894 392,953 224,544
       
   Investment income 23,816 18,984 12,666
 
Income before income taxes 513,710 411,937 237,210
 
Provision for income taxes      
   Current 141,457 137,643 50,456
   Deferred 1,792 (13,391) 11,562
 
  143,249 124,252 62,018
 
Net Income $ 370,461 $ 287,685 $ 175,192
 
       
Earnings per share      
 
   Basic $ 0.66 $ 0.51 $ 0.32
 
   Diluted $ 0.65 $ 0.50 $ 0.31
 
       
Weighted average number of common shares outstanding (000’s)      
   Basic 560,400 558,991 552,963
   Diluted 573,700 572,165 569,463
       
Total common shares outstanding (000's) 561,003 559,820 556,803

 

Research In Motion Limited
Incorporated under the Laws of Ontario
(United States dollars, in thousands except per share data) (unaudited)

Consolidated Balance Sheets

As at December 1, 2007 March 3, 2007
Assets    
Current    
   Cash and cash equivalents $ 1,189,995 $ 677,144
   Short-term investments 407,173 310,082
   Trade receivables 1,037,326 572,637
   Other receivables 78,262 40,174
   Inventory 339,999 255,907
   Other current assets 127,780 41,697
   Deferred income tax asset 66,832 21,624
 
  3,247,367 1,919,265
     
     
Investments 536,127 425,652
Capital assets 634,027 487,579
Intangible assets 173,370 138,182
Goodwill 114,455 109,932
Deferred income tax asset 4,499 8,339
 
  $ 4,709,845 $ 3,088,949
 
     
Liabilities    
   Current    
   Accounts payable $ 229,649 $ 130,270
   Accrued liabilities 545,196 287,629
   Income taxes payable 323,672 99,958
   Deferred revenue 36,038 28,447
   Current portion of long-term debt 336 271
 
  1,134,891 546,575
 
     
Long-term debt 7,209 6,342
Deferred income tax liability 48,729 52,532
Income Taxes Payable 30,285 -
 
  1,221,114 605,449
     
Shareholders’ equity    
   Capital stock 2,150,770 2,099,696
   Retained earnings 1,240,593 359,227
   Paid-in capital 72,854 36,093
   Accumulated other comprehensive income (loss) 24,514 (11,516)
 
  3,488,731 2,483,500
 
  $ 4,709,845 $ 3,088,949
 

 

Research In Motion Limited
Incorporated under the Laws of Ontario
(United States dollars, in thousands except per share data) (unaudited)

Consolidated Statements of Cash Flows

  For the three months ended December 1, 2007 For the nine months ended December 1, 2007
Cash flows from operating activities    
Net income $ 370,461 $ 881,366
     
Items not requiring an outlay of cash:    
   Amortization 47,861 126,854
   Deferred income taxes 1,564 (60,587)
   Income taxes payable 1,677 30,285
   Stock-based compensation 9,100 23,400
   Other 10,122 11,111
Net changes in working capital items 79,784 (41,745)
 
Net cash provided by operating activities 520,569 970,684
 
Cash flows from financing activities    
Issuance of share capital 23,268 46,451
Other paid-in capital 3,353 9,626
Excess tax benefits from stock-based compensation 3,885 8,358
Repayment of long-term debt (81) (221)
 
Net cash provided by financing activities 30,425 64,214
 
     
Cash flows from investing activities    
Acquisition of investments (177,320) (359,818)
Proceeds on sale or maturity of investments 18,102 101,197
Acquisition of capital assets (96,522) (242,270)
Acquisition of intangible assets (41,027) (64,484)
Business acquisitions (3,000) (6,200)
Acquisition of short-term investments (426,475) (1,049,961)
Proceeds on sale and maturity of short-term investments 527,038 1,109,187
 
Net cash used in investing activities (199,204) (512,349)
 
     
Effect of foreign exchange gain on cash and cash equivalents (9,698) (9,698)
 
Net increase in cash and cash equivalents for the period 342,092 512,851
Cash and cash equivalents, beginning of period 847,903 677,144
 
Cash and cash equivalents, end of period $ 1,189,995 $ 1,189,995
 
     
     
     
As at December 1, 2007 September 1, 2007
Cash and cash equivalents $ 1,189,995 $ 847,903
Short-term investments 407,173 493,941
Investments 536,127 386,489
 
  $ 2,133,295 $ 1,728,333