December 17, 2010
COMPANY UPDATE
Research In Motion Ltd. (RIMM)
Sell
Equity Research
Risk profile remains elevated despite EPS beat; remain on sidelines
What's changed
Investment Profile
RIM reported F3Q (Nov) sales of $5.49 bn, exceeding GS/Consensus
estimates by 3%/2%, driven by 1% higher units and 2% higher ASPs. EPS
of $1.74 delivered more impressive upside of 7%/6%, helped by a lower
share count and higher margins. Sales/EPS guidance of $5.5-5.7 bn/ $1.741.80 was above GS at $5.25 bn/$1.49 and Consensus at $5.47bn/$1.61.
Low
High
Growth
Growth
Returns *
Returns *
Multiple
Multiple
Volatility
Volatility
20th
Percentile
40th
60th
80th
100th
Research In Motion Ltd. (RIMM)
Americas Technology Peer Group Average
Implications
We saw both positives and negatives in the quarter. Positives included: (1)
better than expected mix, driving upside to both ASPs and gross margins,
and (2) strong international sales, up 45% qoq and 113% yoy. Negatives
included: (1) lower than expected net sub adds, coming in at 5.1 mn vs.
GS/Consensus at 5.3 mn/5.2 mn; (2) weaker than expected sell-through of
12.3 mn, which missed our expectations by around 1 mn; (3) a channel
inventory build, with shipments exceeding activations by an estimated
23%—the highest level since the November 2008 quarter, when RIM
negatively preannounced; (4) a sales decline in the US of 16% yoy and 16%
qoq despite the exclusive launch of the Torch at AT&T and its recent price
cut from $199 to $99; and (5) rapidly rising opex, with F3Q/F4QE opex
exceeding our estimates by 7%/11%, likely due to the PlayBook launch. We
are raising our FY11/12/13 EPS (FYE Feb) estimates to $6.28/$5.77/$5.65
from $5.93/$5.67/$5.53 on slightly higher sales and a lower share count. On
balance, we continue to view the risk/reward in RIMM as unattractive, and
expect that investors will view the elevated inventory levels and faster
than expected opex ramp as a near-term concern despite the EPS beat.
Valuation
We are raising our 12-month price target to $60 from $57, based on an
unchanged 10X our new CY11 EPS estimate of $6.01.
Key data
Price ($)
12 month price target ($)
RIM.TO Price (C$)
RIM.TO 12 month price target (C$)
Market cap ($ mn)
Key upside risks include attractive product cycles, stabilizing market share
in the US, and stronger international growth.
Current
59.24
60.00
59.61
60.00
31,065.8
EPS ($) New
EPS ($) Old
RIM.TO EPS ($) New
RIM.TO EPS ($) Old
P/E (X)
RIM.TO P/E (X)
2/10
4.37
4.37
4.37
4.37
13.5
13.5
2/11E
6.28
5.93
6.28
5.93
9.4
9.4
2/12E
5.77
5.67
5.77
5.67
10.3
10.3
2/13E
5.65
5.53
5.65
5.53
10.5
10.5
EPS ($)
RIM.TO EPS ($)
8/10
1.46
1.46
11/10E
1.74
1.74
2/11E
1.72
1.72
5/11E
1.44
1.44
Price performance chart
80
1,400
75
1,350
70
1,300
65
1,250
60
1,200
55
1,150
50
1,100
45
1,050
40
Dec-09
Key risks
INVESTMENT LIST MEMBERSHIP
Americas Sell List
* Returns = Return on Capital For a complete description of the
investment profile measures please refer to
the disclosure section of this document.
1,000
Mar-10
Jun-10
Sep-10
Research In Motion Ltd. (L)
Share price performance (%)
Absolute
Rel. to S&P 500
S&P 500 (R)
3 month
27.4
15.3
6 month 12 month
(3.8)
(8.4)
(13.8)
(18.2)
Source: Company data, Goldman Sachs Research estimates, FactSet. Price as of 12/16/2010 close.
Coverage View: Neutral
Simona Jankowski, CFA
(415) 249-7437 simona.jankowski@gs.com Goldman Sachs & Co.
Thomas D. Lee
(212) 902-2066 thomas.d.lee@gs.com Goldman Sachs & Co.
Erin Riley
(415) 249-7453 erin.riley@gs.com Goldman Sachs & Co.
The Goldman Sachs Group, Inc.
The Goldman Sachs Group, Inc. does and seeks to do business with
companies covered in its research reports. As a result, investors should
be aware that the firm may have a conflict of interest that could affect
the objectivity of this report. Investors should consider this report as
only a single factor in making their investment decision. For Reg AC
certification, see the end of the text. Other important disclosures follow
the Reg AC certification, or go to www.gs.com/research/hedge.html.
Analysts employed by non-US affiliates are not registered/qualified as
research analysts with FINRA in the U.S.
Global Investment Research
December 17, 2010
Research In Motion Ltd. (RIMM)
Research In Motion Ltd.: Summary Financials
Profit model ($ mn)
2/10
2/11E
2/12E
2/13E
14,953.2
(8,369.0)
(1,811.0)
(964.8)
(310.4)
(54.0)
3,808.5
(310.4)
3,498.1
28.6
0.0
0.0
3,526.7
(1,035.4)
0.0
2,491.3
0.0
2,491.3
(34.2)
2,457.1
19,985.4
(11,162.6)
(2,382.4)
(1,376.4)
(433.0)
(64.3)
5,469.7
(433.0)
4,631.1
11.3
0.0
0.0
4,642.4
(1,259.5)
0.0
3,382.9
0.0
3,382.9
0.0
3,382.9
22,259.0
(13,130.4)
(2,819.2)
(1,679.5)
(528.6)
(65.5)
4,989.7
(528.6)
4,101.3
30.0
0.0
0.0
4,131.3
(1,094.8)
0.0
3,036.5
0.0
3,036.5
0.0
3,036.5
22,803.5
(13,629.3)
(2,833.0)
(1,701.3)
(606.6)
(66.9)
4,921.7
(606.6)
4,033.2
37.4
0.0
0.0
4,070.6
(1,078.7)
0.0
2,991.9
0.0
2,991.9
0.0
2,991.9
EPS (basic, pre-except) ($)
EPS (diluted, pre-except) ($)
EPS (basic, post-except) ($)
EPS (diluted, post-except) ($)
Common dividends paid
DPS ($)
Dividend payout ratio (%)
4.41
4.37
4.35
4.31
-0.00
0.0
6.31
6.28
6.31
6.28
-0.00
0.0
5.79
5.77
5.79
5.77
-0.00
0.0
5.67
5.65
5.67
5.65
-0.00
0.0
Growth & margins (%)
Sales growth
EBITDA growth
EBIT growth
Net income (pre-except) growth
EPS growth
Gross margin
EBITDA margin
EBIT margin
2/10
35.1
30.6
28.5
26.2
26.4
44.0
25.5
23.4
2/11E
33.7
43.6
32.4
35.8
42.9
44.1
27.4
23.2
2/12E
11.4
(8.8)
(11.4)
(10.2)
(8.2)
41.0
22.4
18.4
2/13E
2.4
(1.4)
(1.7)
(1.5)
(2.0)
40.2
21.6
17.7
2/10
2,457.1
615.6
0.0
(160.7)
116.8
3,028.8
2/11E
3,382.9
838.6
0.0
(181.7)
110.5
4,150.3
2/12E
3,036.5
888.5
0.0
33.4
65.5
4,023.9
2/13E
2,991.9
888.5
0.0
36.3
66.9
3,983.6
(1,009.4)
(1,904.7)
473.5
970.5
(1,470.1)
(1,035.2)
(2,034.3)
948.3
776.8
(1,344.3)
(1,050.0)
(1,600.0)
1,000.0
400.0
(1,250.0)
(1,000.0)
(1,600.0)
1,000.0
400.0
(1,200.0)
0.0
(6.1)
(837.3)
(843.4)
715.3
0.0
0.0
(2,214.8)
(2,214.8)
591.2
0.0
0.0
(79.9)
(79.9)
2,694.0
0.0
0.0
20.1
20.1
2,803.7
Total revenue
Cost of goods sold
SG&A
R&D
Other operating profit/(expense)
ESO expense
EBITDA
Depreciation & amortization
EBIT
Net interest income/(expense)
Income/(loss) from associates
Others
Pretax profits
Provision for taxes
Minority interest
Net income pre-preferred dividends
Preferred dividends
Net income (pre-exceptionals)
Post tax exceptionals
Net income (post-exceptionals)
Cash flow statement ($ mn)
Net income
D&A add-back (incl. ESO)
Minority interest add-back
Net (inc)/dec working capital
Other operating cash flow
Cash flow from operations
Capital expenditures
Acquisitions
Divestitures
Others
Cash flow from investing
Dividends paid (common & pref)
Inc/(dec) in debt
Other financing cash flows
Cash flow from financing
Total cash flow
Balance sheet ($ mn)
2/10
2/11E
2/12E
2/13E
1,550.9
2,800.1
621.6
840.1
5,812.7
1,956.6
1,476.9
958.2
0.0
10,204.4
2,142.1
3,651.0
909.7
844.3
7,547.0
2,420.9
1,797.7
695.7
0.0
12,461.3
4,836.1
3,719.9
970.9
844.3
10,371.1
2,582.4
1,997.7
695.7
0.0
15,647.0
7,639.7
3,791.3
989.3
844.3
13,264.6
2,694.0
2,197.7
695.7
0.0
18,852.0
Accounts payable
Short-term debt
Other current liabilities
Total current liabilities
Long-term debt
Other long-term liabilities
Total long-term liabilities
Total liabilities
615.6
0.0
1,816.2
2,431.8
0.0
170.0
170.0
2,601.7
796.0
0.0
1,816.2
3,383.0
0.0
246.6
246.6
3,629.6
849.5
0.0
1,816.2
3,546.5
0.0
246.6
246.6
3,793.1
865.6
0.0
1,816.2
3,672.6
0.0
246.6
246.6
3,919.2
Preferred shares
Total common equity
Minority interest
0.0
7,602.7
0.0
0.0
8,831.7
0.0
0.0
11,853.9
0.0
0.0
14,932.7
0.0
10,204.4
12,461.3
15,647.0
18,852.0
2/10
(20.4)
NM
28.4
61.9
13.34
2/11E
(24.3)
NM
25.0
58.9
16.39
2/12E
(40.8)
NM
26.1
60.4
22.51
2/13E
(51.2)
NM
26.2
60.1
28.20
ROA (%)
CROCI (%)
27.2
45.9
29.9
53.4
21.6
45.0
17.3
42.1
Dupont ROE (%)
Margin (%)
Turnover (X)
Leverage (X)
32.8
16.7
1.5
1.3
38.3
16.9
1.6
1.4
25.6
13.6
1.4
1.3
20.0
13.1
1.2
1.3
Free cash flow per share ($)
Free cash flow yield (%)
3.58
5.3
5.81
9.8
5.67
9.6
5.66
9.5
Cash & equivalents
Accounts receivable
Inventory
Other current assets
Total current assets
Net PP&E
Net intangibles
Total investments
Other long-term assets
Total assets
Total liabilities & equity
Additional financials
Net debt/equity (%)
Interest cover (X)
Inventory days
Receivable days
BVPS ($)
Note: Last actual year may include reported and estimated data.
Source: Company data, Goldman Sachs Research estimates.
Analyst Contributors
Simona Jankowski, CFA
simona.jankowski@gs.com
Thomas D. Lee
thomas.d.lee@gs.com
Erin Riley
erin.riley@gs.com
Goldman Sachs Global Investment Research
2
December 17, 2010
Research In Motion Ltd. (RIMM)
Risk profile remains elevated despite EPS beat; remain on the
sidelines
Unit beat driven by channel fill; sell-through and net adds missed. Relative to our
estimates, the unit beat (14.2 mn devices vs. GS/Consensus of 13.9 mn/14.0 mn) was
driven by shipments of phone-only devices and an inventory fill, as device shipments
exceeded activations by an estimated 23% (Exhibit 1). This is the highest level since the
November 2008 quarter, when RIM had a significant negative preannouncement. Sellthrough of 12.3 mn in the November quarter missed our expectation by roughly 1 mn. As
a result, we believe RIM is entering the seasonally slow February quarter with excess
channel inventories—a view consistent with the recent Asia channel checks from our
semiconductor team.
The elevated risk profile around heightened inventory levels is further magnified given
weak subscriber trends, which were below the mid-point of RIM’s guidance for the third
consecutive quarter (Exhibit 2).
Exhibit 1: Shipments exceeded activations by over 2.5mn
vs. quarterly run-rate of ~700k
Actual sub adds vs. company guidance
3,000
16,000
14,000
6,000,000
2,000
10,000
1,500
8,000
6,000
1,000
4,000
25%
5,000,000
20%
4,000,000
Sub Adds
12,000
30%
25%
2,500
Difference (thousands of devices)
Shipments/activations (thousands of devices)
Exhibit 2: Sub adds missed guidance by 2%
15%
10%
8%
3,000,000
5%
2,000,000
0%
0%
500
2,000
0%
0%
-2%
-3%
-4%
-5%
Shipments
Activations
Difference
3Q11
2Q11
1Q11
4Q10
3Q10
2Q10
1Q10
4Q09
3Q09
2Q09
1Q09
4Q08
3Q08
2Q08
1Q08
4Q07
0
3Q07
1,000,000
0
-11%
-15%
0
3Q09
4Q09
1Q10
Actual Sub Adds
Source: Company data and Goldman Sachs Research estimates.
-10%
2Q10
3Q10
4Q10
Guided Sub Adds
1Q11
2Q11
3Q11
% Difference
Source: Company data and Goldman Sachs Research estimates.
Weak North America results, driven by competitive pressures in the US. North America
sub adds remained very weak, down over 70% vs. our estimates, the fourth consecutive
quarter of yoy declines. We attribute this weakness to increasing competitive pressures in
the US, where revenues were down 16% qoq, perhaps in part driven by incremental
pricing pressure from aggressive promotions such as the $99 Torch promotion at AT&T
and continued market share declines. We do not see competitive pressures in the US
abating anytime soon, especially with the likely launch of the iPhone at Verizon in C1Q.
Goldman Sachs Global Investment Research
3
December 17, 2010
Research In Motion Ltd. (RIMM)
Exhibit 3: NA sub adds remained weak, down ~70% yoy
YoY sub add growth by geography
Exhibit 4: NA revs deteriorated in F3Q (-4% qoq) driven
by weak US trends (-16% qoq)
QoQ rev growth by geography
350%
140%
120%
300%
100%
250%
80%
60%
200%
40%
150%
20%
0%
100%
-20%
50%
1Q08 2Q083Q084Q081Q092Q093Q094Q09 1Q102Q103Q104Q10 1Q11 2Q11 3Q11
-40%
-60%
0%
1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11
North America
-50%
International
-100%
North America
International
Total
Source: Company data and Goldman Sachs Research estimates.
Goldman Sachs Global Investment Research
Source: Company data and Goldman Sachs Research estimates.
4
December 17, 2010
Research In Motion Ltd. (RIMM)
Actual results vs. our estimates
Exhibit 5: Actual results vs. GS estimates
Research in Motion
$US million
Income Statement
FQ3A
FQ3E
Sales
YoY
QoQ
5,494.5
40.0%
18.9%
5,334.2
35.9%
15.4%
160.3
3.0%
Cost of sales
% Gross Margin
3,100.9
43.6%
3,093.9
42.0%
7.0
0.2%
R&D
% of Sales
SG&A
% of Sales
357.3
6.5%
666.1
12.1%
357.4
6.7%
602.8
11.3%
(0.1)
(0.0%)
63.3
10.5%
Amortization
% of Sales
114.7
2.1%
110.0
2.1%
4.7
4.2%
Operating Income
% Operating Margin
1,255.6
22.9%
1,170.1
21.9%
85.5
7.3%
Other Income/(Expenses)
Earnings (Loss) Before Taxes
-10.8
1,244.8
6.8
1,176.9
(17.6)
67.9
(258.5%)
5.8%
Tax
Tax rate
333.7
26.8%
317.8
27.0%
15.9
5.0%
Net income - recurring (incl ESOs)
% Net income margin
911.1
16.6%
859.1
16.1%
52.0
6.1%
EPS - recurring (incl ESO/amort)
YoY
QoQ
Diluted Shares - GAAP
$1.74
57.9%
19.2%
524.4
$1.62
46.9%
10.9%
531.4
$0.12
7.5%
FQ3A
4,478.0
835.0
78.0
103.5
FQ3A
5.1
14.2
$315
Hardware
Services
Software
Other
Subscriber Additions
Device Units
Device ASPs
Balance sheet ratios
Days sales outstanding
Inventory days
Abs. Chg.
% Chg.
(7.0)
(1.3%)
FQ3E
4,313.0
816.5
64.7
139.9
FQ3E
5.3
13.9
$310
Abs. Chg.
165.0
18.5
13.3
(36.5)
Abs. Chg.
(0.2)
0.3
$5
% Chg.
3.8%
2.3%
20.6%
(26.0%)
% Chg.
(3.8%)
2.1%
1.7%
Sequential Change
FQ2A
FQ3A
63
68
Abs. Chg.
5
% Chg.
7.2%
-3
(12.9%)
23
20
Source: Company data and Goldman Sachs Research estimates.
Goldman Sachs Global Investment Research
5
December 17, 2010
Research In Motion Ltd. (RIMM)
Exhibit 6: Summary of February quarter guidance
Guidance
Revenue
EPS
Device shipments
Gross margin
F4Q (Feb)
$5.50bn-$5.70bn
$1.74-$1.80
14.5-15.0 mn
similar to F3Q (43.6%)
Opex
up 6-7% qoq
R&D
up 13-15% qoq
S&M
up 3% qoq
D&A
$120 mn
Capex
$300 mn
Tax rate
27%
Source: Company data and Goldman Sachs Research estimates.
Goldman Sachs Global Investment Research
6
December 17, 2010
Research In Motion Ltd. (RIMM)
Summary of estimate changes
Exhibit 7: GS estimates vs. the Street and company guidance
FY ends in February
Feb-11E
May-11E
FY2011E
FY2012E
FY2013E
Revenue ($ mn)
GS - previous
$5,250
$5,309
$19,441
$21,560
$22,255
GS - current
$5,634
$5,422
$19,985
$22,259
$22,803
$5,460
$5,398
$19,705
$22,790
$24,048
Consensus
Target
$5,500-$5,700
EPS
GS (GAAP) - previous
$1.49
$1.45
$5.93
$5.67
$5.53
GS (GAAP) - current
$1.72
$1.44
$6.28
$5.77
$5.65
$1.61
$1.55
$6.06
$6.35
$5.91
Consensus
Target
Tablets
Units (000s) - previous
Units (000s) - current
ASP - previous
ASP - current
$1.74-$1.80
200
0
$450
$0
350
250
$450
$450
200
0
$450
$0
1,950
1,900
$443
$443
2,350
2,350
$406
$406
GS - previous
14.2mn
15.0mn
51.5mn
63.7mn
73.9mn
GS - current
14.6mn
14.4mn
52.1mn
62.3mn
71.8mn
Consensus
14.0mn
Devices (units)
Guidance
14.5-15.0
Net Subscribers Adds
GS - previous
5.6mn
5.4mn
20.3mn
22.0mn
22.4mn
GS - current
5.6mn
5.4mn
20.1mn
21.3mn
20.7mn
Consensus
5.3mn
ASPs
GS - previous
$294
$281
$301
$266
$232
GS - current
$312
$299
$308
$284
$248
Consensus
$307
Margins
GM - previous
GM - current
Consensus
Guidance
41.8%
43.5%
42.1%
43.6%
41.2%
41.8%
43.3%
44.1%
40.9%
41.0%
40.6%
40.2%
OM - previous
OM - current
Consensus
20.8%
21.9%
21.3%
20.0%
18.9%
22.6%
23.2%
19.3%
18.4%
18.3%
17.7%
Source: Company data, Goldman Sachs Research estimates.
Goldman Sachs Global Investment Research
7
December 17, 2010
Research In Motion Ltd. (RIMM)
Reg AC
We, Simona Jankowski, CFA and Thomas D. Lee, hereby certify that all of the views expressed in this report accurately reflect our personal views
about the subject company or companies and its or their securities. We also certify that no part of our compensation was, is or will be, directly or
indirectly, related to the specific recommendations or views expressed in this report.
Investment Profile
The Goldman Sachs Investment Profile provides investment context for a security by comparing key attributes of that security to its peer group and
market. The four key attributes depicted are: growth, returns, multiple and volatility. Growth, returns and multiple are indexed based on composites
of several methodologies to determine the stocks percentile ranking within the region's coverage universe.
The precise calculation of each metric may vary depending on the fiscal year, industry and region but the standard approach is as follows:
Growth is a composite of next year's estimate over current year's estimate, e.g. EPS, EBITDA, Revenue. Return is a year one prospective aggregate
of various return on capital measures, e.g. CROCI, ROACE, and ROE. Multiple is a composite of one-year forward valuation ratios, e.g. P/E, dividend
yield, EV/FCF, EV/EBITDA, EV/DACF, Price/Book. Volatility is measured as trailing twelve-month volatility adjusted for dividends.
Quantum
Quantum is Goldman Sachs' proprietary database providing access to detailed financial statement histories, forecasts and ratios. It can be used for
in-depth analysis of a single company, or to make comparisons between companies in different sectors and markets.
Disclosures
Coverage group(s) of stocks by primary analyst(s)
Simona Jankowski, CFA: America-Communications Technology. Thomas D. Lee: America-Communications Technology.
America-Communications Technology: Acme Packet, Inc., ADTRAN, Inc., Aruba Networks, Inc., Broadsoft, Inc., Brocade Communications Systems,
Calix, Inc., Cisco Systems, Inc., Corning Inc., F5 Networks, Inc., Garmin Ltd., Infinera Corp., Juniper Networks, Inc., Motorola, Inc., Netgear, Inc.,
QUALCOMM, Inc., Research In Motion Ltd., Research In Motion Ltd., Riverbed Technology, Inc., Tellabs, Inc..
Company-specific regulatory disclosures
The following disclosures relate to relationships between The Goldman Sachs Group, Inc. (with its affiliates, "Goldman Sachs") and companies
covered by the Global Investment Research Division of Goldman Sachs and referred to in this research.
Goldman Sachs expects to receive or intends to seek compensation for investment banking services in the next 3 months: Research In Motion Ltd.
(C$59.61)
Goldman Sachs had a non-investment banking securities-related services client relationship during the past 12 months with: Research In Motion
Ltd. (C$59.61)
Goldman Sachs had a non-securities services client relationship during the past 12 months with: Research In Motion Ltd. (C$59.61)
Goldman Sachs makes a market in the securities or derivatives thereof: Research In Motion Ltd. (C$59.61)
Distribution of ratings/investment banking relationships
Goldman Sachs Investment Research global coverage universe
Rating Distribution
Buy
Hold
Investment Banking Relationships
Sell
Buy
Hold
Sell
Global
30%
54%
16%
50%
43%
37%
As of October 1, 2010, Goldman Sachs Global Investment Research had investment ratings on 2,845 equity securities. Goldman Sachs assigns
stocks as Buys and Sells on various regional Investment Lists; stocks not so assigned are deemed Neutral. Such assignments equate to Buy, Hold
and Sell for the purposes of the above disclosure required by NASD/NYSE rules. See 'Ratings, Coverage groups and views and related definitions'
below.
Goldman Sachs Global Investment Research
8
December 17, 2010
Research In Motion Ltd. (RIMM)
Price target and rating history chart(s)
Stock Pric e Currency : U.S. Dollar
Re s e ar ch In M otion Ltd. (RIM .TO)
Goldman Sachs rating and s tock price target history
163
100
147
50
156
125
68
112
96
62
57
64
85
82
65
1,400
56
50
73
45
70.68
150
Sep 25
A pr 1
B
N
S
N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S
2007
2008
2009
2010
163.17
50
0
16,000
50
56
82
79
70
60
45
127.68
71.3
14,000
12,000
10,000
105.6
106.25
8,000
102.5
Sep 25
A pr 1
B
N
S
N D J F M A M J J A S O N D J F MA M J J A S O N D J F M A M J J A S
2007
2008
2009
2010
6,000
Source: Goldman Sachs Investment Res earc h for ratings and pric e targets ; Fac tSet clos ing prices as of 9/30/2010.
Rating
Cov ered by Simona Jankow s ki, CFA ,
as of Jun 2, 2008
Price target
Not c ov ered by c urrent analys t
Price target at remov al
S&P 500
The price targets show n should be c onsidered in the c ontex t of all prior publis hed Goldman Sachs research, w hich may or
may not have included price targets, as w ell as developments relating to the company , its industry and f inancial markets .
147.68
81.25
104
73.6
120
65.55
156
137.8
600
Source: Goldman Sachs Investment Res earc h for ratings and pric e targets ; Fac tSet clos ing prices as of 9/30/2010.
Rating
Cov ered by Simona Jankow s ki, CFA ,
Price target at remov al
171.6
179.3
100
800
Price target
77.52
1,200
1,000
130
145
148
0
Stock Price
65
200
Stock Price
120
150
Stock Price Currenc y : Canadian Dollar
Goldman Sachs rating and s tock price target history
1,600
Index Price
200
Index Price
Re s e ar ch In M otion Ltd. (RIM M )
as of Jun 2, 2008
Not c ov ered by c urrent analys t
S&P/TSX Composite
Index
The price targets show n should be c onsidered in the c ontex t of all prior publis hed Goldman Sachs research, w hich may or
may not have included price targets, as w ell as developments relating to the company , its industry and f inancial markets .
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Ratings, coverage groups and views and related definitions
Buy (B), Neutral (N), Sell (S) -Analysts recommend stocks as Buys or Sells for inclusion on various regional Investment Lists. Being assigned a Buy
or Sell on an Investment List is determined by a stock's return potential relative to its coverage group as described below. Any stock not assigned
as a Buy or a Sell on an Investment List is deemed Neutral. Each regional Investment Review Committee manages various regional Investment
Lists to a global guideline of 25%-35% of stocks as Buy and 10%-15% of stocks as Sell; however, the distribution of Buys and Sells in any particular
coverage group may vary as determined by the regional Investment Review Committee. Regional Conviction Buy and Sell lists represent
investment recommendations focused on either the size of the potential return or the likelihood of the realization of the return.
Goldman Sachs Global Investment Research
9
December 17, 2010
Research In Motion Ltd. (RIMM)
Return potential represents the price differential between the current share price and the price target expected during the time horizon associated
with the price target. Price targets are required for all covered stocks. The return potential, price target and associated time horizon are stated in
each report adding or reiterating an Investment List membership.
Coverage groups and views: A list of all stocks in each coverage group is available by primary analyst, stock and coverage group at
http://www.gs.com/research/hedge.html. The analyst assigns one of the following coverage views which represents the analyst's investment
outlook on the coverage group relative to the group's historical fundamentals and/or valuation. Attractive (A). The investment outlook over the
following 12 months is favorable relative to the coverage group's historical fundamentals and/or valuation. Neutral (N). The investment outlook
over the following 12 months is neutral relative to the coverage group's historical fundamentals and/or valuation. Cautious (C). The investment
outlook over the following 12 months is unfavorable relative to the coverage group's historical fundamentals and/or valuation.
Not Rated (NR). The investment rating and target price have been removed pursuant to Goldman Sachs policy when Goldman Sachs is acting in
an advisory capacity in a merger or strategic transaction involving this company and in certain other circumstances. Rating Suspended (RS).
Goldman Sachs Research has suspended the investment rating and price target for this stock, because there is not a sufficient fundamental basis
for determining, or there are legal, regulatory or policy constraints around publishing, an investment rating or target. The previous investment
rating and price target, if any, are no longer in effect for this stock and should not be relied upon. Coverage Suspended (CS). Goldman Sachs has
suspended coverage of this company. Not Covered (NC). Goldman Sachs does not cover this company. Not Available or Not Applicable (NA).
The information is not available for display or is not applicable. Not Meaningful (NM). The information is not meaningful and is therefore excluded.
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Goldman Sachs Global Investment Research
10