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.
03-28-14 03:23 PM