Press Release

June 29, 2005

Research In Motion Reports First Quarter Results

Waterloo, Ontario - Research In Motion Limited (RIM) (Nasdaq: RIMM; TSX: RIM), a world leader in the mobile communications market, today reported first quarter results for the three months ended May 28, 2005 (all figures in U.S. dollars and U.S. GAAP).

Revenue for the first quarter of fiscal 2006 was $453.9 million, up 12% from $404.8 million in the previous quarter and up 68% from $269.6 million in the same quarter of last year. The revenue breakdown for the quarter was approximately 69% for handhelds, 17% for service, 11% for software and 3% for other revenue. 

The total number of BlackBerry® subscribers in the quarter increased by approximately 592,000 to approximately 3.11 million total subscribers.  This represents a 24% increase over the approximately 2.51 million subscribers at the end of the last quarter.

“RIM is reporting another record quarter and we are pleased with the momentum in the business,” said Jim Balsillie, Chairman and Co-CEO at RIM. "BlackBerry demand continued to grow in the first quarter as RIM and its partners continued to execute plans effectively in both enterprise and retail channels."

As previously disclosed, due to an impasse in the process of finalizing a definitive licensing and settlement agreement with NTP, Inc., RIM has taken court action to enforce the binding Term Sheet agreed upon and jointly announced by RIM and NTP on March 16, 2005.  In order to enforce the Term Sheet, RIM has filed a motion to stay the pending appeal in the United States Court of Appeals for the Federal Circuit (CAFC) and to remand the case to the United States District Court for the Eastern District of Virginia (District Court) to enforce the settlement terms.   As a result of this development, RIM has estimated that it will incur additional legal fees and has accrued an incremental litigation expense of $6.5 million in the quarter.

As the result of a recent Canadian tax ruling relating to investment tax credits, RIM has recognized a tax recovery of $27.0 million in the quarter.  This recovery relates to prior periods.

GAAP net income for the quarter was $132.5 million, or $0.67 per share diluted, as compared with a loss of $2.6 million, or $0.01 per share basic and diluted, in the prior quarter. Excluding the net litigation charges of $4.5 million ($6.5 million less an estimated tax provision of 30% or $1.9 million) and excluding the tax recovery of $27.0 million, adjusted net income for the quarter was $110.1 million, or $0.56 per share diluted.  The adjusted net income and earnings per share do not have any standardized meaning prescribed by GAAP and therefore are unlikely to be comparable to similar measures presented by other issuers.   These adjusted measures should be considered in the context of RIM's GAAP results.

    For the three
months ended
May 28, 2005
GAAP net income, as reported   $ 132,520
     
Adjustments:    
     
  Litigation Expense    
     Pre-tax litigation provision $ 6,475  
     Tax provision, estimated at 30% 1,942 4,533
 
 
  Tax recovery   (26,952)
   
Adjusted net income   $ 110,101
   
Adjusted net income per share, diluted   $ 0.56
   

Note: the adjusted net income and adjusted net income per share do not have any standardized meaning prescribed by GAAP and thus are not comparable to similar measures presented by other issuers. Investors are encouraged to consider this adjusted measure in the context of RIM's GAAP results.

RIM is providing revenue and earnings guidance for the second and third quarters of fiscal 2006.  RIM is increasing guidance for the second quarter and now expects that revenue in the second quarter of fiscal 2006 will be in the range of $465-490 million.  Subscriber additions in the second quarter are expected to be in the range of 620,000-650,000.   Revenue for the third quarter of fiscal 2006 is currently expected to be in the range of $525-550 million.  RIM is expecting GAAP earnings per share for the second quarter in the range of 57-63 cents per share diluted.  For the third quarter, RIM is expecting earnings per share to be between 62-68 cents per share diluted.

The total of cash, cash equivalents, short-term and long-term investments was $1.8 billion as at May 28, 2005, compared to $1.7 billion at the end of the previous quarter, an increase of $103 million over the prior quarter. The $450 million resolution amount is currently included in the litigation provision liability on RIM’s balance sheet.  RIM’s cash position net of the resolution amount is approximately $1.47 billion as $135 million of the $450 million liability is already in escrow (recorded as restricted cash), and is not included in RIM’s cash balance.

Highlights of the first quarter:

• BlackBerry surpassed the three million wireless subscribers milestone.
• RIM previewed its next generation of BlackBerry MDS™ technology.
• RIM hosted the fourth annual Wireless Enterprise Symposium in Orlando, Florida.
• The Defence Signals Directorate (DSD) of the Australian Government approved the deployment of the BlackBerry platform.
• Microsoft Corp. and RIM announced a product collaboration and joint marketing agreement focused on extending enterprise instant messaging and presence to BlackBerry subscribers.
• IBM and RIM previewed Lotus Instant Messaging for BlackBerry.
• Novell and RIM announced plans to bring Novell GroupWise Messenger instant messaging to BlackBerry users.
• AOL and RIM announced plans to support mobile AOL Instant Messenger (AIM) and ICQ services on the BlackBerry wireless platform.
• Yahoo! Inc. and RIM announced plans to provide Yahoo! Messenger to BlackBerry users.
• ALLTEL launched the BlackBerry 7250™, BlackBerry Enterprise Server™ and BlackBerry Internet Service™ in the U.S.
• EarthLink introduced the BlackBerry 7250 in the U.S.
• TeleCommunication Systems (TCS) launched the BlackBerry 7250 in the U.S.
• T-Mobile introduced the BlackBerry 7290™ in the U.S.
• TELUS Mobility announced the availability of the BlackBerry 7250 and the BlackBerry 7520™ in Canada.
• Cable & Wireless Ltd. announced plans to offer BlackBerry to customers in the Eastern Caribbean islands.
• Proximus launched the BlackBerry 7100v™ and BlackBerry Enterprise Server v4.0 in Belgium.
• TDC Mobile introduced the BlackBerry 7290 in Denmark.
• Avea launched the BlackBerry 7290 and the BlackBerry 7100g™ in Turkey.
• Orascom Telecom announced plans to offer BlackBerry to mobile customers in the Middle East, Africa and South Asia.
• Mobile TeleSystems (MTS) announced plans to offer BlackBerry in Russia.
• Vodafone launched BlackBerry Enterprise Server v4.0, the BlackBerry 7290 and the BlackBerry 7730™ in Spain.
• Connex announced plans to offer BlackBerry in Romania.
• Orange announced plans to introduce BlackBerry in Romania.
• Orange introduced the BlackBerry 7290 and BlackBerry Enterprise Server v4.0 in Switzerland.
• Cellcom Israel Ltd. announced plans to offer BlackBerry in Israel.
• Polska Telefonica Cyfrowa (PTC) launched BlackBerry in Poland.
• T-Mobile introduced the BlackBerry 7290 and BlackBerry Enterprise Server v4.0 in Hungary and The Czech Republic.
• KPN introduced BlackBerry Internet Service in the Netherlands and Belgium.
• M1 launched BlackBerry in Singapore.
• 3 Hong Kong and Partner Communications Company Ltd. announced plans to bring BlackBerry to Israel.
• Indosat introduced BlackBerry Internet Service in Indonesia.
• Telstra launched BlackBerry 7250 in Australia.
• HTC announced plans to provide global distribution of BlackBerry Connect™ on Windows Mobile-based devices to carriers around the world.
• Globe announced availability of BlackBerry Connect for the Sony Ericsson P910i in the Philippines.
• SingTel launched the Sony Ericsson P910i with BlackBerry Connect in Singapore.
• 3 Hong Kong introduced the Siemens SK65 handset with BlackBerry Built-In™ in Hong Kong.
• BlackBerry ISV Alliance members continued to build upon the BlackBerry platform with a range of new products and services that help customers extend their wireless data strategies beyond wireless email.

Highlights subsequent to quarter end:

• RIM announced the security-enhanced BlackBerry Smart Card Reader
• Avaya and RIM announced plans to extend Avaya secure enterprise communications applications to the BlackBerry platform over WLAN. 
• EADS and RIM formed a strategic alliance focused on delivering localized wireless data solutions to government organizations across Europe.
• Sprint launched the BlackBerry 7250 in the U.S.
• Tango announced plans to introduce BlackBerry in Luxembourg.
• Airtel introduced the BlackBerry 7100g in India.

The replay of the company’s Q1 conference call can be accessed after 7 p.m. (eastern), June 29, 2005 until midnight (eastern), July 13, 2005.  It can be accessed by dialing 416-640-1907 and entering passcode 21117892#.   The conference will also appear on the RIM web site, live at 5:00 pm (eastern) and archived at http://www.rim.com/investors/events/index.shtml until midnight July 13, 2005.

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 relating to RIM's revenue and earnings expectations for the second and third quarters of fiscal 2006, anticipated growth in subscribers, plans relating to RIM and its carrier partners and estimates of additional legal fees that will be incurred by RIM as a result of NTP developments. The terms and phrases "continuing to", "estimated", "expects", "expected", "expecting", "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 RIM's intellectual property rights, including the outcome of RIM’s litigation with NTP, Inc.; RIM's ability to enhance current products and develop new products; RIM's reliance on carrier partners, 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 (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.

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)

Consolidated Statements of Operations

For the three months ended
(unaudited)  May 28,
2005 		 February 26,
2005 		 May 29,
2004
       
Revenue 453,948    $ 404,802 269,611
Cost of sales    203,731    174,878    134,978
 
Gross margin    250,217    229,924    134,633
 
Gross Margin % 55.1% 56.8% 49.9%
       
Expenses      
Research and development      34,534      29,076      20,379
Selling, marketing and administration      62,871      56,595      40,822
Amortization      10,283        9,114        9,048
Litigation        6,475    294,194      15,579
 
     114,163    388,979      85,828
 
       
Income (loss) from operations    136,054  (159,055)      48,805
       
Investment income      13,816      11,926        6,460
 
Income (loss) before income taxes    149,870  (147,129)      55,265
Provision for (recovery of) income taxes      17,350  (144,556)           293
 
Net Income (loss) 132,520    (2,573)   54,972
 
       
Earnings (loss) per share      
 
      Basic       0.70      (0.01)       0.30
 
      Diluted       0.67      (0.01)       0.28
 
       
Weighted average number of common shares outstanding (000’s)      
      Basic    190,098    189,184    185,856
      Diluted    197,872    189,184    196,378

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

Consolidated Balance Sheets

As at
(unaudited)		  May 28,
2005 		 February 26,
2005
Assets    
Current    
Cash and cash equivalents   912,324   610,354
Short-term investments      202,671      315,495
Trade receivables      230,716      210,459
Other receivables        41,101        30,416
Inventory        80,392        92,489
Restricted cash      135,491      111,978
Other current assets        21,070        22,857
Deferred income tax asset      132,472      150,200
 
   1,756,237  1,544,248
     
Investments      667,712      753,868
Capital assets      228,542      210,112
Intangible assets        90,943        83,740
Goodwill        29,026        29,026
 
  2,772,460 2,620,994
 
     
Liabilities    
Current    
Accounts payable and accrued liabilities   163,648   155,597
Accrued litigation and related expenses      458,947      455,610
Income taxes payable          3,596          3,149
Deferred revenue        16,967        16,235
Current portion of long-term debt            225            223
 
       643,383      630,814
     
Long-term debt          6,369          6,504
 
       649,752      637,318
 
     
Shareholders' equity    
Share capital  1,900,506  1,892,266
Retained earnings      226,701        94,181
Accumulated other comprehensive loss         (4,499)         (2,771)
 
Total shareholders’ equity  2,122,708  1,983,676
 
  2,772,460 2,620,994
     

 

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

Consolidated Statements of Cash Flows

   For the three months ended
(unaudited)
May 28, 2005
      May 29, 2004
Cash flows from operating activities    
Net income 132,520   54,972
   
Items not requiring an outlay of cash:    
Amortization      18,226      18,056
Deferred income taxes      17,389    -
Loss on disposal of capital assets  5    -
Loss on foreign currency translation of long-term debt            23            38
   168,163      73,066
   
Net changes in non-cash working capital items     (32,881)     (10,673)
   135,282      62,393
Cash flows from financing activities    
Change in restricted cash    -    -
Issuance of share capital        8,240      19,638
Repayment of debt           (53)           (46)
       8,187      19,592
Cash flows from investing activities    
Acquisition of investments     (12,408)  (350,839)
Proceeds on sale or maturity of investments      21,255        3,651
Acquisition of capital assets     (31,289)     (17,223)
Acquisition of intangible assets, net       (6,352)       (1,397)
Acquisition of subsidiaries       (3,795)    -
Acquisition of short-term investments     (98,193)  (129,775)
Proceeds on sale or maturity of short term investments    289,283    -
   158,501  (495,583)
   
Net increase (decrease) in cash and cash equivalents for the period    301,970  (413,598)
   
Cash and cash equivalents, beginning of period    610,354  1,156,419
Cash and cash equivalents, end of period 912,324 742,821
   
   
   As at          May 28, 2005     Feb. 26, 2005
   
Cash and cash equivalents 912,324 610,354
Short-term investments    202,671    315,495
Investments    667,712    753,868
Cash, cash equivalents, short-term and long-term investments          1,782,707          1,679,717
   Increase 102,990