[atrclpv]

The BBC are reporting a annual loss of $5.9bn for the whole year. Now, my basic accounting knowledge is that Blackberry's outgoings were $5.9bn more than the income?? Is this correct? And I assume these are not paper losses but actual losses. This being the case, how can they still have $ 2.7bn in cash? Doesn't the $5.9bn have to be paid to some-one eventually? Can some-one please explain in plain English?

[slade632]

Losses are for accounting purposes. The cash flow represents actual cash that was paid out in the period.

Much of last quarters losses were a result of the Z10 write down which is not an actual payment but a reflection of the future earning ability of the Zed10 inventory.

Posted via CB10

[DenverRalphy]

By making huge cutbacks, selling assets, and acquiring a debenture.

[Troy Tiscareno]

The $5.9B is TOTAL losses, which combines actual cash losses PLUS the losses to the value of properties already owned and valued. For example, the value of BB's existing inventory of phones was reduced, because it was acknowledged that they weren't going to be able to get the money from those phones they were originally hoping to get. They had previously paid for the design, development, parts, and assembly of these phones based on being able to get, say, $500/phone from the carriers, and now they're only going to get, say, $200/phone, so that wipes out much of the value of their inventory. They also wrote down the values of other properties: QNX, BBM, BIS & BES revenues, etc. to match the real-world performance of those properties at the time, as compared to the previous values from a year or two before, which were higher.

They've been able to retain cash by selling off most of their buildings, vastly reducing staff and projects, and by borrowing $1.25B in cash. The question then becomes: next quarter, when they won't have these extra revenues (no more money to borrow, no more buildings to sell), will they have lowered their operating expenses enough to bring them in line with revenues, or will they still be losing money and/or have to continue down-sizing? We won't know that for another 90 days at least.