Price $22.73 September 21, 2011 (from $25.00) … Nortel ETRI TI Ericsson NSN RIM Freescale Huawei NEC page 3 of 12 Peter Misek, CFA, CPA, Equity Analyst , (212) 336-7361 , [email protected]

USD Prev. 2010A Prev. 2011A Prev. 2012E Prev. 2013E

Rev. (MM) -- 14,953.0 -- 19,907.2 -- 18,994.0 -- 20,942.0

EV/Rev 0.7x 0.5x 0.6x 0.5x

Consensus -- 4.37 -- 6.34 5.09 4.75 5.23 4.81

EPS

May -- 0.98 -- 1.38 -- 1.33A -- 0.86

Aug -- 1.03 -- 1.46 -- 0.80A -- 0.78

Nov -- 1.10 -- 1.74 -- 0.92 -- 0.77

Feb -- 1.27 -- 1.78 -- 0.98 -- 0.79

FY Feb -- 4.37 -- 6.34 -- 4.02 -- 3.21

FY P/E 5.2x 3.6x 5.7x 7.1x

Price Performance

SEP-10 JAN-11 MAY-11 SEP-11

80

60

40

20

COMPANY NOTE

Target Change

USA | Technology | Telecom Equipment/Wireless September 21, 2011

Research in Motion (RIMM)Limited Patent Value; Cut Target to SalvageValue of $21 as We Wait for QNX

EQU

ITY R

ESEARC

H A

MERIC

AS

UNDERPERFORMPrice target $21.00

(from $25.00)Price $22.73

Financial SummaryNet Debt (MM): $(1,415.0)

Market Data52 Week Range: $70.54 - $21.60Total Entprs. Value (MM): $10,497.8Market Cap. (MM): $11,912.8Insider Ownership: 11.5%Institutional Ownership: 63.6%Shares Out. (MM): 524.1Float (MM): 465.7Avg. Daily Vol.: 25,111,962

Peter Misek, CFA, CPA *Equity Analyst

(212) 336-7361 [email protected] North *Equity Associate

(212) 323-3944 [email protected] Kim *

Equity Associate(212) 336-7303 [email protected]

* Jefferies & Company, Inc.

Key TakeawayIn consultation with industry experts, we performed a deep dive on 1,400patents to determine the firms with essential LTE patents. We also analyzed thethree required smartphone patent areas (Wireless, OS/Software, Hardware).With an on-going handset business, RIM's patent monetization value is likelyonly $1B, supporting our $21 cash cow salvage valuation (an unlikely scenariobut could provide valuation support as we wait for QNX).

RIM patents relatively weak: we believe most of RIM's patents are in security rather thanin wireless so may have to pay a fair amount in LTE royalties. We believe the liquidation valueof RIM's patents is only ~$2.5B. We believe the security patents are worth approximately$500M, RIM’s wireless patents are worth approximately $1.2B ($400M LTE plus 3G, etc.),and we add the $770M worth of patents acquired from Nortel. Combining the variouspatents, we arrive at the patent portfolio value of approximately $2.5B.

But with an on-going handset business, RIM's patent monetization likely capsout at ~$1B. In valuing the patents we assume RIM sells its patent portfolio but arrangescross-licensing agreement with other wireless patent holders. The main value would bein licensing the patents to the other third of new and upcoming wireless entrants and inlicensing the security patents where RIM is particularly strong and less cross licensing isrequired. Therefore, we estimate RIM’s patents in a take-out could be worth ~$2.5B butlikely only ~$1B if RIM still sells handsets.

Cash cow salvage value of $21: our analysis is of the scenario whereby the boarddecides to maximize the value of the cash cow subscription annuity stream while minimizinghardware losses. We give this scenario a low probability as we believe the board is unlikelyto challenge the co-CEOs. Also, we do not think any buyers are likely to step in; however,we believe the stock is likely to find a bottom around that level. Calculation: net cash ~$1.5B+ patents ~$1B - restructuring ~$700M + subscription business.

Playbook 2.0 and QNX beta handsets would make us more positive: both shouldinclude native email/calendar, indicating that the major hurdle for the transition to QNX hasbeen overcome. Management said both should be available in coming months.

Valuation/RisksOur $21 target is ~7x our FY13 ests (2-year range 7x-18x). Risks: 1) quicker transition to newOS; 2) stronger new products sales; 3) improved execution.

Jefferies does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that Jefferies may have a conflictof interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision.Please see analyst certifications, important disclosure information, and information regarding the status of non-US analysts on pages 10 to 12 of this report.

Long Term Financial Model Drivers

LT Earnings CAGR 0%

Organic Revenue Growth 5%

Acquisition Contribution 0%

Operating Margin Expansion -5%

Other Considerations

Ripple effect of Playbook execution issues:

our checks indicate the issues have led to

a fire drill and resources being pulled off

of other projects. We think this will cause

QNX delays

2-Year Forward P/E

Source: Capital IQ, Jefferies estimates

0.0x

10.0x

20.0x

30.0x

40.0x

Forward P/E Target

Upside Downside

Research in Motion designs, manufactures and markets wireless devices, communications

solutions and applications globally. The Company is an innovator in the area of wireless

technologies and solutions and provides solutions for wireless connectivity to consumers

and enterprises around the world.

Sell-through of BB OS 7 handsets

Timing of QNX handsets

Signs of enterprise demand for Playbook

Catalysts

Target Investment Thesis

Ripple effect of Playbook execution issues

leading to QNX delays

QNX has integration issues

BB OS 7 phones see lackluster sell-through

Carrier support flagging

Risk to subscriber revenues

FY13EPS: $3.21; Target Multiple: 7x; Target

Price $21.

Upside Scenario

BB OS 7 handsets sell better than expected

Better execution leads to improved carrier

relations

QNX phones comes sooner than expected

FY13 EPS: $3.50; Target Multiple: 9x;

Target Price: $30.

Downside Scenario

Competition even fiercer than expected

leading to ASP and margin erosion

QNX phones pushed out

FY13 EPS: $3; Target Multiple: 7x Target

Price: $18.

Long Term Analysis

Scenarios

Group 2-Year Forward P/Es


4.6x

12.7x

8.1x

27.5x

16.8x

4.6x7.6x 8.6x

0x

5x

10x

15x

20x

25x

30x

Earnings Growth vs 2-Year Forward P/E


RIMM

AAPLHTC

MMI

NOK

HPQ

DELLMSFT

-40%

-20%

0%

20%

40%

60%

0x 10x 20x 30x

Recommendation / Price Target

Ticker Rec. PT

RIMM Underperform $21

AAPL Buy $500

HTC NC N/A

MMI Hold $40

NOK Hold €3.91

HPQ Buy $40

DELL Hold $15

MSFT NC N/A

Company Description

THE LO

NG

VIE

W

Peer Group

Research in Motion, Inc.

Underperform: $21 Price Target

page 2 of 12 , Equity Analyst , (212) 336-7361 , [email protected] Misek, CFA, CPA

Please see important disclosure information on pages 10 - 12 of this report.

RIMM

Target Change

September 21, 2011

Proprietary Essential LTE Patent Analysis Please reference our concurrently published industry note “Smartphone Patent Wars Far

From Over: Deep Dive Into Essential LTE Patents” for additional details.

In valuing the essential LTE patent portfolios of major players in the wireless space, we

utilized outside industry experts that included physics PhDs, wireless engineers, patent

legal specialists, and former patent office employees.

Our work began by first screening tens of thousands of patents and then determined a

level of essentiality based on individually examining over 1,400 patents related to LTE.

Patents are difficult to value

Most attempts to value patents focus either on 1) counting the total number of patents a

company has, but the important number is the number of essential patents, 2) counting

the essential patents in the ETSI library, but this data is self-reported. Alternatively, the

essentiality of LTE patents can be determined by lawsuit decisions (none yet), licensing

agreements, or purchases. Of the latter two, there is no public data apart from the $4.5B

purchase of Nortel's patent portfolio.

Our methodology for LTE

Industry experts performed a proprietary analysis comparing each company’s patents to

the LTE standards and determined their essentiality. Then we analyzed Nortel's portfolio

and estimated how much of the purchase price was likely for the LTE patents. Nortel's

patents were in five categories, but we believe about half of the value was in the wireless

patents, and that a majority of the wireless value was in the LTE patents. In our LTE patent

valuation analysis we assume 30% of the $4.5B acquisition price was for the LTE patents.

We note that these values are rough estimates and only for the LTE portion of their

portfolios (3G patents will also determine a significant portion of value).

Exhibit 1: Essential LTE Patents

Source: Jefferies & Co.

0% 5% 10% 15% 20% 25%

LGQualcommInterDigital

MotorolaNokia

SamsungZTE

NortelETRI

TIEricsson

NSNRIM

FreescaleHuawei

NEC



RIMM

Target Change

September 21, 2011

Exhibit 2: Essential LTE Patents: Detail

Source: Jefferies & Co.

RIM Cash Cow Salvage Valuation JEF: cash cow salvage value for RIM of $21; patents likely only worth ~$1B

Our analysis is of the scenario whereby the board decides to maximize the value of the

cash cow subscription annuity stream while minimizing hardware losses. We give this

scenario a low probability as we believe the board is unlikely to challenge the co-CEOs.

Also, we do not think any buyers are likely to step in.

We assume the hardware business will be run at breakeven and the subscription business

will be run as a cash cow.

In order to calculate a liquidation value for RIMM, we assume the following

Net cash ~$1.5B.

Patents monetized for $1B: RIMM has ~2,000 patents in the U.S., ~3,200 in

Europe, and ~3,000 in Canada though its share of essential patents is unclear

and estimates of RIMM's share of essential LTE patents ranges from 0% to 10%.

Overall, we believe RIMM has a solid patent position that is big enough to defray

some royalty costs but not all (e.g., RIMM settled with MMI for an upfront

payment and on-going fees) and that many of RIMM’s stronger patents are in

security rather than in wireless. We assume RIMM sells its patent portfolio but

arranges cross-licensing agreement with other wireless patent holders. The main

value would be in licensing the patents to the other ~33% of new and

upcoming wireless entrants. We estimate RIMM’s patents in a take-out could be

worth ~$2.5B but likely only ~$1B if RIMM still sells handsets.

Breakeven hardware business: RIMM aims to run the hardware business at

breakeven by gutting R&D and SG&A, ditching QNX, and exiting tablets.

Basically, RIMM continue to offer the same messaging-focused handsets at the

lowest price possible while remaining cash flow breakeven in the segment.

Patent Holder

% Ownership of

Essential LTE Patents Estimated Value ($M)

LG 23% 7,907

Qualcomm 21% 7,329

InterDigital 9% 3,279

Motorola 9% 3,279

Nokia 9% 3,086

Samsung 9% 3,086

ZTE 6% 2,121

Nortel 4% 1,350

ETRI 2% 771

TI 2% 771

Ericsson 2% 579

NSN 2% 579

RIM 1% 386

Freescale 1% 193

Huawei 1% 193

NEC 1% 193



RIMM

Target Change

September 21, 2011

Restructuring cash charge of $700M: in this scenario we assume layoffs of

80% of the workforce and severance payments of $50K/person.

Subscription business as a cash cow: we assume 80% GM and 54% initial

OM for the segment. We run a sensitivity analysis with various churn and ASP

decline assumptions to calculate an NPV for the segment. We assume that opex

declines in line with subscriber deterioration.

Table 1: NPV of Cash Flow from Cash Cow Subscription Business

Source: Jefferies

The share price calculation then is $1.5B net cash + $1B (patents) - $700M restructuring

charge + subscription NPV all divided by 524M shares outstanding.

Table 2: Share Price based on Cash Cow Subscription Business

Source: Jefferies

Conclusion

A 2.5% annual rate decline and 2% annual subscriber decline implies a $21 stock price.

Again, we believe this scenario is unlikely but likely provides some type of floor for the

stock.

## 0% 2.5% 5.0% 7.5% 10.0%

0% 13,148 10,250 8,130 6,612 5,514

1% 12,260 9,732 7,835 6,439 5,407

2% 11,333 9,177 7,513 6,248 5,289

3% 10,415 8,611 7,175 6,045 5,162

4% 9,569 8,067 6,835 5,835 5,031

5% 8,820 7,563 6,506 5,623 4,894

6% 8,169 7,106 6,193 5,415 4,757

7% 7,604 6,698 5,904 5,214 4,618

8% 7,116 6,330 5,637 5,024 4,486

9% 6,690 6,003 5,393 4,843 4,352

10% 6,317 5,710 5,169 4,672 4,231

Annual Rate Decline

An

nu

al S

ub

scri

be

r D

ecl

ine

0% 2.5% 5.0% 7.5% 10.0%

0% $28.53 $23.00 $18.95 $16.05 $13.96

1% $26.83 $22.01 $18.39 $15.72 $13.75

2% $25.06 $20.95 $17.77 $15.36 $13.53

3% $23.31 $19.87 $17.13 $14.97 $13.29

4% $21.70 $18.83 $16.48 $14.57 $13.04

5% $20.27 $17.87 $15.85 $14.17 $12.77

6% $19.02 $17.00 $15.25 $13.77 $12.51

7% $17.95 $16.22 $14.70 $13.39 $12.25

8% $17.02 $15.51 $14.19 $13.02 $12.00

9% $16.20 $14.89 $13.73 $12.68 $11.74

10% $15.49 $14.33 $13.30 $12.35 $11.51

Annual Rate Decline

An

nu

al S

ub

scri

be

r D

ecl

ine



RIMM

Target Change

September 21, 2011

Exhibit 3: Quarterly Estimates

Source: company filings, Jefferies estimates

Exhibit 4: Annual Estimates

Source: company filings, Jefferies estimates

(Feb FY; $B) (Non-GAAP) FY11A Est Street Est Street

Revenue 19.9 4.8 5.6 5.1 5.2

Gross Profit 8.8 1.8 2.2 1.9 2.0

GM 44.3% 37.0% 38.6% 36.9% 38.7%

SG&A 2.4 0.7 0.7

R&D 1.4 0.4 0.4

EBITDA 5.1 0.8 1.2 0.8 1.1

EBITDA Margin 25.5% 15.8% 21.7% 15.8% 21.0%

EBIT 4.6 0.6 1.0 0.7 0.9

OM 23.3% 12.8% 17.7% 12.9% 16.3%

EPS (fd) 6.34 0.92 1.51 0.98 1.24

(Feb FY; M) FY11A Est Street Est Street

Playbooks 0.0 0.4 0.4

Phones 52.3 13.0 14.0

ASP (Handset) 305 279 274

ASP (Tablet) 300 300

Net Adds 19.8 3.1 3.9

FQ3E (Nov)

FQ3E (Nov) FQ4E (Feb)

FQ4E (Feb)

(Feb FY; $B) (Non-GAAP) FY11A Est Street Est Street

Revenue 19.9 19.0 20.1 20.9 21.7

Gross Profit 8.8 7.4 8.0 7.8 8.3

GM 44.3% 39.2% 39.6% 37.1% 38.4%

SG&A 2.4 2.7 3.2

R&D 1.4 1.5 1.7

EBITDA 5.1 3.2 4.3 2.8 4.6

EBITDA Margin 25.5% 17.1% 21.4% 13.6% 21.1%

EBIT 4.6 2.5 3.2 2.2 3.4

OM 23.3% 14.1% 15.7% 10.3% 15.7%

EPS (fd) 6.34 4.02 4.78 3.21 4.89

(Feb FY; M) FY11A Est Street Est Street

Playbooks 0.0 1.5 1.8

Phones 52.3 50.8 58.5

ASP (Handset) 305 277 271

ASP (Tablet) 347 295

Net Adds 19.8 16.1 (4.0)

FY12E

FY13EFY12E

FY13E



RIMM

Target Change

September 21, 2011

Research in Motion Q1 Q2 Q3 Q4 Q1 Q2 Q3E Q4E Q1E Q2E Q3E Q4E FY FY11 FY12E FY13E

Income Statement May-10 Aug-10 Nov-10 Feb-11 May-11 Aug-11 Nov-11 Feb-12 May-12 Aug-12 Nov-12 Feb-13 Feb-10 Feb-11 Feb-12 Feb-13

Services and Softw are 757 843 913 979 1,030 1,075 1,030 1,081 1,152 1,066 1,077 1,085 2,417 3,492 4,216 4,380

Devices and Other 3,478 3,779 4,582 4,577 3,878 3,093 3,797 4,011 3,707 3,929 4,278 4,648 12,536 16,416 14,779 16,562

Total Revenue 4,235 4,621 5,495 5,556 4,908 4,168 4,827 5,092 4,859 4,995 5,355 5,733 14,953 19,907 18,994 20,942

Cost Of Goods Sold

Services and Softw are 110 123 133 143 152 158 152 160 225 208 207 209 350 509 621 849

Devices and Other 2,202 2,443 2,968 2,960 2,600 2,398 2,891 3,052 2,733 2,888 3,189 3,512 8,019 10,573 10,941 12,321

Cost Of Goods Sold 2,312 2,566 3,101 3,103 2,752 2,556 3,043 3,211 2,958 3,096 3,396 3,720 8,369 11,082 11,563 13,171

Gross Profit 1,923 2,056 2,394 2,453 2,156 1,612 1,783 1,880 1,901 1,899 1,959 2,012 6,584 8,826 7,432 7,771

Selling General & Admin Exp. 483 546 666 705 704 683 683 697 749 792 838 863 1,811 2,400 2,767 3,243

R & D Exp. 288 323 357 383 423 381 375 381 400 420 426 439 965 1,351 1,560 1,686

Amort. of Goodw ill and Intangibles 94 104 115 125 132 141 141 148 157 166 176 187 310 438 562 687

Opex 865 974 1,138 1,213 1,259 1,205 1,199 1,226 1,306 1,379 1,441 1,490 3,250 4,189 4,888 5,615

Operating Income 1,059 1,082 1,256 1,240 897 407 585 655 595 520 518 523 3,334 4,636 2,544 2,156

Investment Income 9 6 -11 3 7 7 8 9 8 8 8 9 29 8 31 33

EBT Excl. Unusual Items 1,068 1,088 1,245 1,243 904 414 593 664 603 528 526 532 3,363 4,644 2,575 2,189

Income Tax Expense 299 292 334 309 209 85 136 153 145 120 126 120 984 1,233 583 511

Net Earnings (reported) 769 797 911 934 695 329 457 511 458 409 400 411 2,491 3,411 1,992 1,678

Per Share Items

Basic EPS 1.39 1.46 1.74 1.79 1.33 0.63 0.87 0.98 0.88 0.78 0.77 0.79 4.41 6.36 3.80 3.21

Weighted Avg. Basic Shares Out. 554.7 544.1 522.4 522.8 524.0 524.1 523.7 523.3 523.4 522.8 522.3 521.8 564.5 536.0 523.8 522.6

Diluted EPS 1.38 1.46 1.74 1.78 1.33 0.63 0.87 0.98 0.87 0.78 0.77 0.79 4.37 6.34 3.80 3.21

Diluted EPS (Non-GAAP) 1.38 1.46 1.74 1.78 1.33 0.80 0.92 0.98 0.87 0.78 0.77 0.79 4.37 6.34 4.02 3.21

Weighted Avg. Diluted Shares Out. 558.2 546.4 524.4 525.0 524.5 524.1 523.7 523.3 523.5 523.0 522.5 521.9 569.8 538.3 523.9 522.7

Source: company data; Jefferies & Company, Inc. estimates



RIMM

Target Change

September 21, 2011

Research in Motion Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3E Q4E Q1E Q2E Q3E Q4E

Balance Sheet May-09 Aug-09 Nov-09 Feb-10 May-10 Aug-10 Nov-10 Feb-11 May-11 Aug-11 Nov-11 Feb-12 May-12 Aug-12 Nov-12 Feb-13

ASSETS

Cash And Equivalents 1,135 1,083 1,286 1,551 1,850 1,152 1,435 1,791 1,986 851 784 850 1,221 1,527 1,917 1,747

Short Term Investments 620 581 341 361 498 380 340 330 403 298 313 329 345 362 380 399

Total Cash & ST Investments 1,755 1,664 1,628 1,911 2,348 1,532 1,776 2,121 2,389 1,149 1,097 1,178 1,566 1,889 2,297 2,146

Accounts Receivable 2,338 2,365 2,712 2,594 2,650 3,216 4,101 3,955 3,772 3,571 3,819 3,917 3,738 3,842 4,119 4,410

Other Receivables 217 248 210 206 136 148 240 324 463 627 477 504 481 494 530 567

Total Receivables 2,555 2,613 2,922 2,800 2,786 3,364 4,340 4,279 4,235 4,198 4,297 4,420 4,218 4,336 4,649 4,977

Inventory 634 573 613 622 556 645 679 618 943 1,372 1,070 882 650 680 746 818

Deferred Tax Assets, Curr. 226 176 212 194 228 221 224 229 226 221 221 221 221 221 221 221

Other Current Assets 179 190 199 286 310 217 280 241 307 380 418 460 506 556 612 673

Total Current Assets 5,349 5,215 5,574 5,813 6,228 1,083 1,183 1,088 1,476 1,973 1,709 1,563 1,377 1,458 1,579 1,712

Net Property, Plant & Equipment 1,509 1,737 1,844 1,957 2,075 2,169 2,343 2,504 2,576 2,699 2,858 3,012 3,154 3,302 3,458 3,608

Long-term Investments 664 834 781 958 919 494 696 577 478 266 266 266 266 266 266 266

Goodw ill 141 147 147 151 162 375 375 508 524 606 679 688 697 706 715 724

Other Intangibles 1,172 1,291 1,359 1,326 1,298 1,421 1,372 1,798 2,164 2,307 2,379 2,296 2,208 2,112 2,010 1,900

Total Assets 8,835 9,224 9,704 10,204 10,683 10,439 12,085 12,875 13,842 13,198 13,285 13,424 13,486 14,070 14,974 15,333

LIABILITIES

Accounts Payable & Accrued expenses 2,007 2,002 2,450 2,254 2,308 2,815 3,553 3,343 3,862 3,672 3,478 3,281 3,250 3,401 3,880 3,801

Curr. Income Taxes Payable 92 - 140 96 78 116 188 179 0 0 0 0 0 0 0 0

Unearned Revenue, Current 64 67 70 68 71 79 90 108 105 106 111 117 123 129 135 142

Def. Tax Liability, Curr. - - - 15 26 8 4 0 0 0 0 0 0 0 0 0

Other Current Liabilities 102 98 92 - 37 0 0 0 0 0 0 1 1 1 1 1

Total Current Liabilities 2,266 2,167 2,752 2,432 2,521 3,018 3,834 3,630 3,967 3,778 3,590 3,399 3,374 3,531 4,016 3,944

Def. Tax Liability, Non-Curr. 54 43 103 141 135 179 217 276 256 270 270 270 270 270 270 270

Other Non-Current Liabilities 27 28 28 29 29 29 30 31 31 11 11 11 11 11 11 11

Total Liabilities 2,347 2,238 2,884 2,602 2,684 208 247 307 287 281 281 281 281 281 281 281

Stock 2,353 2,375 2,350 2,372 2,368 1,989 2,145 2,199 2,202 2,394 2,406 2,418 2,430 2,442 2,454 2,467

Retained Earnings 4,189 4,664 4,564 5,274 5,656 5,027 5,815 6,749 7,444 7,586 7,843 8,154 8,223 8,631 9,031 9,442

Comprehensive Inc. and Other -53 -53 -94 -43 -25 198 44 -10 -58 -63 -57 -49 -43 -37 -31 -23

Total Common Equity 6,488 6,987 6,820 7,603 7,999 7,214 8,004 8,938 9,588 9,917 10,192 10,523 10,610 11,036 11,455 11,886

Total Liabilities And Equity 8,835 9,224 9,704 10,204 10,683 10,439 12,085 12,875 13,842 13,976 14,063 14,202 14,264 14,848 15,752 16,111




RIMM

Target Change

September 21, 2011

Research in Motion Q1 Q2 Q3 Q4 Q1 Q2 Q3E Q4E Q1E Q2E Q3E Q4E FY10 FY11 FY12E FY13E

Cashflow Statement May-10 Aug-10 Nov-10 Feb-11 May-11 Aug-11 Nov-11 Feb-12 May-12 Aug-12 Nov-12 Feb-13 Feb-10 Feb-11 Feb-12 Feb-13

Net Income 768.9 796.7 911.1 934.3 695.0 329.0 456.6 511.0 1,991.6 458.0 408.5 399.7 2,457.1 3,411.0 1,991.6 1,677.7

Depreciation & Amort. 107.1 208.2 222.1 310.5 355.0 354.0 141.0 148.1 998.1 156.9 166.3 176.3 344.5 927.0 998.1 686.5

Stock-Based Compensation 15.9 16.8 19.3 19.9 23.0 15.0 6.5 7.5 52.0 6.0 6.0 6.5 58.0 72.0 52.0 26.0

Other Operating Activities (10.2) 14.0 44.3 46.9 24.0 (24.0) 0 0 0 0 0 0 64.8 95.0 0 0

Change in w orking capital 162.6 (127.5) (224.0) (307.1) (77.0) (723.0) (23.2) (168.3) (991.5) 363.0 (41.5) 51.2 (160.7) (496.0) (991.5) (160.0)

Cash from Ops. 1,123.5 908.2 972.8 1,004.5 1,020.0 (49.0) 580.9 498.2 2,050.1 983.9 539.4 633.8 3,034.9 4,009.0 2,050.1 2,230.2

Capital Expenditure (226.1) (208.0) (301.1) (303.8) (222.0) (287.0) (200.9) (198.9) (908.8) (188.9) (198.4) (208.3) (1,009.4) (1,039.0) (908.8) (801.9)

Cash Acquisitions (14.1) (318.8) 0 (161.1) (27.0) (103.0) 0 0 (130.0) 0 0 0 (143.4) (494.0) (130.0) 0

Sale (Purchase) of Intangible assets (42.4) (104.4) (45.5) (364.7) (560.0) (244.0) (244.0) (30.0) (1,078.0) (30.0) (30.0) (30.0) (421.4) (557.0) (1,078.0) (120.0)

Invest. in Marketable & Equity Securt. (103.2) 542.7 (173.5) 1,559.4 27.0 (463.0) (14.9) (15.6) 310.9 (16.4) (17.2) (18.1) 104.1 1,825.5 310.9 (71.4)

Net (Inc.) Dec. in Loans Originated/Sold - -

Other Investing Activities - -

Cash from Investing (385.8) (88.5) (520.1) 729.8 (782.0) (1,097.0) (459.8) (244.5) (1,805.9) (235.4) (245.6) (256.4) (1,470.1) (264.5) (1,805.9) (993.3)

Long-Term Debt Repaid - - - - - - - - - - - - (6.1) - - -

Total Debt Repaid - - - - - - - - - - - - (6.1) - - -

Issuance of Common Stock 8.4 3.6 5.0 50.0 7.0 1.0 12.0 12.0 32.0 12.1 12.2 12.2 30.2 67.0 32.0 48.7

Repurchase of Common Stock (416.9) (1,548.6) (171.1) (16.5) (26.0) (11.0) (200.0) (200.0) (437.0) (389.0) 0 0 (869.5) (2,153.0) (437.0) (389.0)

Other Financing Activities (0.6) 0.3 0.0 (0.7) (1.0) 0 0 0 0.6 0 0 0 1.9 (0.4) 0.6 0.6

Cash from Financing (409.0) (1,544.7) (166.0) 32.8 (20.0) (10.0) (188.0) (188.0) (404.4) (376.9) 12.2 12.2 (843.4) (2,086.4) (404.4) (339.7)

Foreign Exchange Rate Adj. (29.3) 26.8 (3.3) 21.8 (23.0) 21.0 0 0 (2.0) 0 0 0 (6.1) 16.0 (2.0) 0

Net Change in Cash 299.3 (698.1) 283.4 1,788.9 195.0 (1,135.0) (66.9) 65.7 (162.2) 371.7 305.9 389.6 715.3 1,674.0 (162.2) 897.2




RIMM

Target Change

September 21, 2011

Company DescriptionResearch in Motion designs, manufactures and markets wireless devices, communications solutions and applications globally. The Companyis an innovator in the area of wireless technologies and solutions and provides solutions for wireless connectivity to consumers and enterprisesaround the world.

Analyst CertificationI, Peter Misek, CFA, CPA, certify that all of the views expressed in this research report accurately reflect my personal views about the subjectsecurity(ies) and subject company(ies). I also certify that no part of my compensation was, is, or will be, directly or indirectly, related to the specificrecommendations or views expressed in this research report.I, Jason North, certify that all of the views expressed in this research report accurately reflect my personal views about the subject security(ies) andsubject company(ies). I also certify that no part of my compensation was, is, or will be, directly or indirectly, related to the specific recommendationsor views expressed in this research report.I, Billy Kim, certify that all of the views expressed in this research report accurately reflect my personal views about the subject security(ies) and subjectcompany(ies). I also certify that no part of my compensation was, is, or will be, directly or indirectly, related to the specific recommendations or viewsexpressed in this research report.

As is the case with all Jefferies employees, the analyst(s) responsible for the coverage of the financial instruments discussed in this report receivescompensation based in part on the overall performance of the firm, including investment banking income. We seek to update our research asappropriate, but various regulations may prevent us from doing so. Aside from certain industry reports published on a periodic basis, the large majorityof reports are published at irregular intervals as appropriate in the analyst's judgement.

For Important Disclosure information on companies recommended in this report, please visit our website at https://javatar.bluematrix.com/sellside/Disclosures.action or call 212.284.2300.

Meanings of Jefferies RatingsBuy - Describes stocks that we expect to provide a total return (price appreciation plus yield) of 15% or more within a 12-month period.Hold - Describes stocks that we expect to provide a total return (price appreciation plus yield) of plus 15% or minus 10% within a 12-month period.Underperform - Describes stocks that we expect to provide a total negative return (price appreciation plus yield) of 10% or more within a 12-monthperiod.The expected total return (price appreciation plus yield) for Buy rated stocks with an average stock price consistently below $10 is 20% or more withina 12-month period as these companies are typically more volatile than the overall stock market. For Hold rated stocks with an average stock priceconsistently below $10, the expected total return (price appreciation plus yield) is plus or minus 20% within a 12-month period. For Underperformrated stocks with an average stock price consistently below $10, the expected total return (price appreciation plus yield) is minus 20% within a 12-month period.NR - The investment rating and price target have been temporarily suspended. Such suspensions are in compliance with applicable regulations and/or Jefferies policies.CS - Coverage Suspended. Jefferies has suspended coverage of this company.NC - Not covered. Jefferies does not cover this company.Restricted - Describes issuers where, in conjunction with Jefferies engagement in certain transactions, company policy or applicable securitiesregulations prohibit certain types of communications, including investment recommendations.Monitor - Describes stocks whose company fundamentals and financials are being monitored, and for which no financial projections or opinions onthe investment merits of the company are provided.

Valuation MethodologyJefferies' methodology for assigning ratings may include the following: market capitalization, maturity, growth/value, volatility and expected totalreturn over the next 12 months. The price targets are based on several methodologies, which may include, but are not restricted to, analyses of marketrisk, growth rate, revenue stream, discounted cash flow (DCF), EBITDA, EPS, cash flow (CF), free cash flow (FCF), EV/EBITDA, P/E, PE/growth, P/CF,P/FCF, premium (discount)/average group EV/EBITDA, premium (discount)/average group P/E, sum of the parts, net asset value, dividend returns,and return on equity (ROE) over the next 12 months.

Risk which may impede the achievement of our Price TargetThis report was prepared for general circulation and does not provide investment recommendations specific to individual investors. As such, thefinancial instruments discussed in this report may not be suitable for all investors and investors must make their own investment decisions basedupon their specific investment objectives and financial situation utilizing their own financial advisors as they deem necessary. Past performance ofthe financial instruments recommended in this report should not be taken as an indication or guarantee of future results. The price, value of, andincome from, any of the financial instruments mentioned in this report can rise as well as fall and may be affected by changes in economic, financialand political factors. If a financial instrument is denominated in a currency other than the investor's home currency, a change in exchange rates mayadversely affect the price of, value of, or income derived from the financial instrument described in this report. In addition, investors in securities suchas ADRs, whose values are affected by the currency of the underlying security, effectively assume currency risk.



RIMM

Target Change

September 21, 2011

https://javatar.bluematrix.com/sellside/Disclosures.action


Other Companies Mentioned in This Report• Apple Inc. (AAPL: $413.45, BUY)• Dell (DELL: $14.88, HOLD)• Hewlett-Packard (HPQ: $22.47, BUY)• Motorola Mobility Holdings, Inc. (MMI: $37.82, HOLD)• Nokia (NOK1V FH: €3.89, HOLD)• ZTE Corporation (763 HK: HK$21.20, BUY)

Distribution of RatingsIB Serv./Past 12 Mos.

Rating Count Percent Count Percent

BUY 710 53.70% 32 4.51%HOLD 540 40.90% 31 5.74%UNDERPERFORM 71 5.40% 2 2.82%

Other Important DisclosuresJefferies Equity Research refers to research reports produced by analysts employed by one of the following Jefferies Group, Inc. (“Jefferies”) groupcompanies:United States: Jefferies & Company, Inc., which is an SEC registered firm and a member of FINRA.United Kingdom: Jefferies International Limited, which is authorized and regulated by the Financial Services Authority; registered in England andWales No. 1978621; registered office: Vintners Place, 68 Upper Thames Street, London EC4V 3BJ; telephone +44 (0)20 7029 8000; facsimile +44 (0)207029 8010.Hong Kong: Jefferies Hong Kong Limited, which is licensed by the Securities and Futures Commission of Hong Kong with CE number ATS546; locatedat Suite 2201, 22nd Floor, Cheung Kong Center, 2 Queen’s Road Central, Hong Kong.Singapore: Jefferies Singapore Limited, which is licensed by the Monetary Authority of Singapore; located at 80 Raffles Place #15-20, UOB Plaza 2,Singapore 048624, telephone: +65 6551 3950.Japan: Jefferies (Japan) Limited, Tokyo Branch, which is a securities company registered by the Financial Services Agency of Japan and is a memberof the Japan Securities Dealers Association; located at Hibiya Marine Bldg, 3F, 1-5-1 Yuraku-cho, Chiyoda-ku, Tokyo 100-0006; telephone +813 52516100; facsimile +813 5251 6101.India: Jefferies India Private Limited, which is licensed by the Securities and Exchange Board of India as a Merchant Banker (INM000011443) and a StockBroker with Bombay Stock Exchange Limited (INB011438539) and National Stock Exchange of India Limited (INB231438533) in the Capital MarketSegment; located at 42/43, 2 North Avenue, Maker Maxity, Bandra-Kurla Complex, Bandra (East) Mumbai 400 051, India; Tel +91 22 4356 6000.



RIMM

Target Change

September 21, 2011

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RIMM

Target Change

September 21, 2011


Documents

Price $22.73 September 21, 2011 (from $25.00) … Nortel ETRI TI Ericsson NSN RIM Freescale Huawei NEC page 3 of 12 Peter Misek, CFA, CPA, Equity Analyst , (212) 336-7361 , [email protected]