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SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

Report of Foreign Private Issuer

Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934


For the month of,	September	2008

Commission File Number	000-29898

Research In Motion Limited

(Translation of registrant’s name into English)

295 Phillip Street, Waterloo, Ontario, Canada N2L 3W8

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40F:


Form 20-F o		Form 40-F þ

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): o

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): o

Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.


Yes o		No þ

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-

RESEARCH IN MOTION LIMITED

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS FOR THE THREE MONTHS AND SIX MONTHS ENDED AUGUST 30, 2008

September 29, 2008

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) should be read together with the unaudited interim consolidated financial statements and the accompanying notes (the “Consolidated Financial Statements”) of Research In Motion Limited (“RIM” or the “Company”) for the three months and six months ended August 30, 2008 and the Company’s audited consolidated financial statements and accompanying notes, and MD&A, for the fiscal year ended March 1, 2008. The Consolidated Financial Statements have been prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”).

All financial information herein is presented in United States dollars, except for certain financial information contained in tables which is expressed in thousands of United States dollars, and as otherwise indicated.

RIM has prepared this MD&A with reference to National Instrument 51-102 “Continuous Disclosure Obligations” of the Canadian Securities Administrators. Under the U.S./Canada Multijurisdictional Disclosure System, the Company is permitted to prepare this MD&A in accordance with the disclosure requirements of Canada, which requirements are different from those of the United States. This MD&A provides information for the three months and six months ended August 30, 2008 and up to and including September 29, 2008.

Additional information about the Company, including the Company’s Annual Information Form, which is included in RIM’s Annual Report on Form 40-F, can be found on SEDAR at www.sedar.com and on the U.S. Securities and Exchange Commission’s (“SEC”) website at www.sec.gov.

Special Note Regarding Forward-Looking Statements

This MD&A contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 and applicable Canadian securities laws, including statements relating to:

	•		the Company’s plans and expectations with respect to matters relating to its historical stock option granting practices, including regulatory investigations and litigation in connection therewith;

	•		the Company’s expectations regarding the average selling price (“ASP”) of its BlackBerry devices;

	•		the Company’s estimates regarding revenue sensitivity for the effect of a change in ASP;

	•		the Company’s expectations regarding gross margin and operating expenses;

	•		the Company’s estimates regarding its effective tax rate;

	•		the Company’s estimates of purchase obligations and other contractual commitments; and

	•		the Company’s expectations with respect to the sufficiency of its financial resources.

The words “expect”, “anticipate”, “estimate”, “may”, “will”, “should”, “intend”, “believe”, “plan” and similar expressions are intended to identify forward-looking statements. Forward-looking statements are based on

Research In Motion Limited
Management’s Discussion and Analysis of Financial Condition and Results of Operations

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, the following factors, which are discussed in greater detail in the “Risk Factors” section of RIM’s Annual Information Form, which is included in RIM’s Annual Report on Form 40-F:

	•		risks related to the restatement of RIM’s previously filed financial statements as a result of its internal review of its stock option granting practices, and regulatory investigations or litigation relating to those matters, including possible sanctions or penalties against the Company or its directors or officers;

	•		third-party claims for infringement of intellectual property rights by RIM and the outcome of any litigation with respect thereto;

	•		RIM’s ability to successfully obtain patent or other proprietary or statutory protection for its technologies and products;

	•		RIM’s ability to obtain rights to use software or components supplied by third parties;

	•		RIM’s ability to enhance current products and develop new products;

	•		RIM’s ability to establish new, and to build on existing, relationships with its network carrier partners and distributors;

	•		RIM’s dependence on its carrier partners to grow its BlackBerry subscriber account base;

	•		RIM’s dependence on a limited number of significant customers;

	•		the efficient and uninterrupted operation of RIM’s network operations center and the networks of its carrier partners;

	•		the occurrence or perception of a breach of RIM’s security measures, or an inappropriate disclosure of confidential or personal information;

	•		RIM’s ability to manage production facilities and its reliance on third-party manufacturers for certain products;

	•		RIM’s reliance on its suppliers for functional components and the risk that suppliers will not be able to supply components on a timely basis or in sufficient quantities;

	•		the continued quality and reliability of RIM’s products and services;

	•		risks associated with RIM’s expanding foreign operations;

	•		restrictions on import and use of RIM’s products in certain countries due to encryption of the products and services;

	•		effective management of growth and ongoing development of RIM’s service and support operations;

	•		risks associated with acquisitions, investments and other business initiatives;

	•		reduced spending by customers due to the uncertainty of economic and geopolitical conditions;

	•		intense competition within RIM’s industry, including the possibility that strategic transactions by RIM’s competitors or carrier partners could weaken RIM’s competitive position or that RIM may be required to reduce its prices to compete effectively;

	•		dependence on key personnel and RIM’s ability to attract and retain key personnel;

	•		reliance on third-party network infrastructure developers and software platform vendors;

	•		foreign exchange risks;

	•		changes in interest rates affecting RIM’s investment portfolio and the creditworthiness of its investment portfolio;

	•		government regulation of wireless spectrum and radio frequencies;

Research In Motion Limited
Management’s Discussion and Analysis of Financial Condition and Results of Operations

	•		the costs and burdens of compliance with new government regulations;

	•		continued use and expansion of the Internet;

	•		regulation, certification and health risks, and risks relating to the misuse of RIM’s products;

	•		tax liabilities, resulting from changes in tax laws or otherwise, associated with RIM’s worldwide operations; and

	•		difficulties in forecasting RIM’s quarterly financial results and the growth of its subscriber base.

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, except as required by law.

Overview

RIM 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, short messaging service (SMS), 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 to data. 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 solution, software development tools, and other hardware and software. The Company’s sales and marketing efforts include collaboration with strategic partners and distribution channel relationships to promote the sales of its products and services as well as its own supporting sales and marketing teams.

Sources of Revenue

RIM’s primary revenue stream is its BlackBerry wireless solution, which includes sales of wireless devices, software and service. The BlackBerry wireless solution provides users with a wireless extension of their work and personal email accounts, including Microsoft® Outlook®, Lotus Notes®, Novell® GroupWise®, MSN®/Hotmail, Yahoo! Mail®, POP3/ISP email and others.

RIM generates hardware revenues from sales, primarily to carriers, of BlackBerry wireless devices, which provide users with the ability to send and receive wireless messages and data. RIM’s BlackBerry wireless devices also incorporate a mobile phone, a personal information manager (PIM) including contact, calendar, tasks and memo functionality, which can synchronize with the user’s desktop PIM system, and web-browsing capability. Certain BlackBerry devices also include multimedia capabilities.

RIM generates service revenues from billings to its BlackBerry subscriber account base primarily from a monthly infrastructure access fee to a carrier/distributor where a carrier or other distributor bills the BlackBerry subscriber. The BlackBerry subscriber account base is the total of all subscriber accounts that have an active status at the end of a reporting period. Each carrier instructs RIM to create subscriber accounts and determines whether the subscriber account should have an active status. That carrier is charged a service fee for each subscriber account each month with substantially all service fees having no regard to the amount

Research In Motion Limited
Management’s Discussion and Analysis of Financial Condition and Results of Operations

of data traffic the subscriber account passes over the BlackBerry architecture. If a carrier informs RIM to deactivate the subscriber account, then RIM no longer includes that subscriber account in its BlackBerry subscriber account base and ceases billing from the date of notification of deactivation. On a quarterly basis, RIM may make an estimate of pending deactivations for certain carriers that do not use a fully-integrated provisioning system. It is, however, the carrier’s responsibility to report changes to the subscriber account status on a timely basis to RIM. The number of subscriber accounts is a non-financial metric and is intended to highlight the change in RIM’s subscriber base and should not be relied upon as an indicator of RIM’s financial performance. The number of subscriber accounts does not have any standardized meaning prescribed by U.S. GAAP and may not be comparable to similar metrics presented by other companies.

An important part of RIM’s BlackBerry wireless platform is the software that is installed on corporate servers. Software revenues include fees from (i) licensing RIM’s BlackBerry Enterprise Server™ (“BES”) software; (ii) client access licenses (“CALs”), which are charged for each subscriber using the BlackBerry service via a BES; (iii) maintenance and upgrades to software; and (iv) technical support.

RIM also offers the BlackBerry Connect™ and BlackBerry Built-In™ Licensing Programs, which enable leading device manufacturers to equip their handsets with BlackBerry functionality, in order that users and organizations can connect to BlackBerry wireless services on a broader selection of devices and operating systems. BlackBerry Connect technology enables a variety of leading manufacturers to take advantage of proven BlackBerry architecture to automatically deliver email and other data to a broader choice of wireless devices, operating systems and email applications. BlackBerry Built-In technology enables leading manufacturers to incorporate popular BlackBerry applications into their mobile phones and handheld devices in addition to supporting “push"-based BlackBerry wireless services.

Revenues are also generated from sales of accessories, repair and maintenance programs and non-recurring engineering services (“NRE”).

Critical Accounting Policies and Estimates

General

The preparation of the Consolidated Financial Statements requires management to make estimates and assumptions with respect to the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities. These estimates and assumptions are based upon management’s historical experience and are believed by management to be reasonable under the circumstances. Such estimates and assumptions are evaluated on an ongoing basis and form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ significantly from these estimates.

The Company’s critical accounting policies and estimates have been reviewed and discussed with the Company’s Audit Committee. There have been no material changes to the Company’s critical accounting policies and estimates from those disclosed in the Company’s annual MD&A for the fiscal year ended March 1, 2008 other than the adoption of Statement of Financial Accounting Standards (“SFAS”) No. 157, Fair Value Measurements in the first quarter of fiscal 2009.

Research In Motion Limited
Management’s Discussion and Analysis of Financial Condition and Results of Operations

SFAS 157 clarifies the definition of fair value, establishes a framework for measurement of fair value, and expands disclosure about fair value measurements. SFAS 157 is effective for fiscal years beginning after November 15, 2007, except as amended by Financial Accounting Standards Board (“FASB”) Staff Position (“FSP”) SFAS 157-1 and FSP SFAS 157-2 which is effective for fiscal years beginning after November 15, 2008. FSP SFAS 157-1 and FSP SFAS 157-2 allow partial adoption relating to fair value measurements for non-financial assets and liabilities that are not measured at fair value on a recurring basis. Effective March 2, 2008, the Company adopted SFAS 157, except as it applies to the nonfinancial assets and nonfinancial liabilities subject to FSP SFAS 157-2, with the impact described in note 3 to the Consolidated Financial Statements. The Company will adopt the remaining portion of SFAS 157 in the first quarter of fiscal 2010 and does not expect the adoption to have a material impact on the consolidated financial statements and the accompanying notes.

Restatement of Previously Issued Financial Statements

Overview

As discussed in greater detail under “Explanatory Note Regarding the Restatement of Previously Issued Financial Statements” in the MD&A for the fiscal year ended March 3, 2007 and Note 4 to the audited consolidated financial statements of the Company for the fiscal year ended March 3, 2007, the Company restated its consolidated balance sheet as of March 4, 2006 and its consolidated statements of operations, consolidated statements of cash flows and consolidated statements of shareholders’ equity for the fiscal years ended March 4, 2006 and February 26, 2005, and the related note disclosures (the “Restatement”), to reflect additional non-cash stock compensation expense relating to certain stock-based awards granted prior to the adoption of the Company’s stock option plan on December 4, 1996 (as amended from time to time, the “Stock Option Plan”) and certain stock option grants during the 1997 through 2006 fiscal periods, as well as certain adjustments related to the tax accounting for deductible stock option expenses. The Restatement did not result in a change in the Company’s previously reported revenues, total cash and cash equivalents or net cash provided from operating activities.

The Restatement is the result of a voluntary internal review (the “Review”) by the Company of its stock option granting practices, which was commenced under the direction of the Audit Committee of the Company’s Board of Directors, at the initiative of Dennis Kavelman, the Company’s former Chief Financial Officer (now the Company’s Chief Operating Officer — Administration and Operations), with the support of Jim Balsillie, the Co-Chief Executive Officer of the Company, and the executive management team of the Company. Following the recusal of two Audit Committee members who also served on the Compensation Committee, the Review was completed by the remaining two members of the Audit Committee as a special committee of independent directors of the Board of Directors (the “Special Committee”). The Special Committee was assisted in the Review by outside legal counsel and outside accounting advisors in both Canada and the United States. The Special Committee reviewed the facts and circumstances surrounding the 3,231 grants of stock options to acquire common shares that were made between December 1996 and August 2006 to 2,034 employees and directors of the Company. The Special Committee also reviewed stock based awards granted prior to the adoption of the Stock Option Plan.

The Review identified three significant types of accounting errors being: (1) the misapplication of U.S. GAAP as it relates to a “net settlement” feature contained in the Stock Option Plan until February 27, 2002, which resulted in variable accounting treatment, (2) the misapplication of U.S. GAAP in the accounting for certain

Research In Motion Limited
Management’s Discussion and Analysis of Financial Condition and Results of Operations

share awards granted prior to the adoption of the Stock Option Plan, which also resulted in variable accounting treatment and (3) the misapplication of U.S. GAAP in the determination of an accounting measurement date for options granted after February 27, 2002. The Special Committee determined that the Company failed to maintain adequate internal and accounting controls with respect to the issuance of options in compliance with the Stock Option Plan, both in terms of how options were granted and documented, and the measurement date used to account for certain option grants. The grant process was characterized by informality and a lack of definitive documentation as to when the accounting measurement date for a stock option occurred, and lacked safeguards to ensure compliance with applicable accounting, regulatory and disclosure rules. The Special Committee did not find intentional misconduct on the part of any director, officer or employee responsible for the administration of the Company’s stock option grant program.

Each of the SEC, the Ontario Securities Commission (“OSC”) and the office of the United States Attorney for the Southern District of New York (the “USAO”) has commenced investigations in connection with the Company’s stock option granting practices. The Company intends to continue to cooperate with each of these agencies.

Actions Taken as a Result of the Review

As previously disclosed, the Board of Directors, based on the recommendations of the Special Committee, has implemented, or is in the process of implementing, a number of measures in response to the findings of the Special Committee, including measures that are designed to enhance the oversight and corporate governance of the Company and to strengthen the Company’s control over its stock option granting process in particular. These measures include:

	•		Benefits from Option Grants — All directors and each of RIM’s co-Chief Executive Officers and Chief Operating Officers (“c-level officers”) agreed in respect of options that were incorrectly priced to return any benefit on previously exercised options and to reprice unexercised options that were incorrectly priced. All vice presidents of the Company were asked to agree to similar treatment for their options that have dating issues, where those options were granted after the employee’s commencement of employment and in the employee’s capacity as vice president. All of the stock options held by directors, c-level officers and vice presidents that were subject to such repricing have been repriced, and the Company received $8.7 million, including interest, in restitution payments from its directors, c-level officers and vice presidents in fiscal 2008.

	•		Changes to the Company’s Stock Option Granting Practices — In June 2007, the Board of Directors approved a formal policy on granting equity awards, the details of which are described in the Company’s Management Information Circular, dated May 28, 2008 (the “Management Information Circular”), a copy of which can be found on SEDAR at www.sedar.com and on the SEC’s website at www.sec.gov. In addition, in July 2007, the Board of Directors determined to exclude non-employee directors from future stock option grants.

	•		Changes to the Company’s Board of Directors, Board Committees and Organizational Structure — In accordance with the Special Committee’s recommendations and other considerations, the Board of Directors has established a new Oversight Committee, separated the roles of Chairman and CEO, implemented other changes to the Company’s Board, Audit Committee, Compensation Committee,

Research In Motion Limited
Management’s Discussion and Analysis of Financial Condition and Results of Operations

and Nominating Committee, and has changed various management roles. In addition to Ms. Barbara Stymiest and Mr. John Wetmore, who became directors of the Company in March 2007, Mr. David Kerr and Mr. Roger Martin were elected as directors of the Company at the Annual General Meeting of the Company on July 17, 2007. Each of the new directors is “independent” within the meaning of applicable securities laws and stock exchange rules. As previously disclosed, each of Mr. Douglas Fregin, Mr. Kendall Cork and Dr. Douglas Wright did not stand for re-election at the Annual General Meeting of the Company in 2007. Mr. Cork and Dr. Wright were appointed to the honorary position of Director Emeritus of the Board effective July 17, 2007 in recognition of their substantial contributions to the Company over many years.

Other Changes — The Company has established an internal audit department and an individual commenced employment with the Company in the fourth quarter of fiscal 2008 in the position of Senior Vice President, Internal Audit. This new officer reports directly to the chair of the Audit Committee as well as administratively to the Co-Chief Executive Officer, Jim Balsillie. Additionally, the Company has enhanced its capabilities in U.S. GAAP and in securities disclosure and compliance matters issues by establishing two new permanent full-time positions which have been filled, respectively, by an employee with expertise in U.S. GAAP and an employee with expertise in securities disclosure and compliance. The latter employee will assist in the administration of RIM’s equity awards granting program.

Review Costs

Included in the Company’s selling, marketing and administration expenses in fiscal 2008 and fiscal 2009 are legal, accounting and other professional costs incurred by the Company as well as other costs incurred by the Company under indemnity agreements in favor of certain officers and directors of the Company, in each case in connection with the Review, the Restatement, and the regulatory investigations and litigation related thereto.

Mr. Jim Balsillie and Mr. Mike Lazaridis, the Company’s Co-Chief Executive Officers, voluntarily offered to assist the Company in defraying costs incurred in connection with the Review and the Restatement by contributing CAD $10.0 million (CAD $5.0 million each) of those costs. The Company received these voluntary payments in the second quarter of fiscal 2008, which were recorded net of income taxes as an increase to paid-in capital. In addition, as part of the Notice of Application that was filed with the Ontario Superior Court of Justice-Commercial List by a pension fund shareholder, seeking various orders against the Company and named directors, the Company and the other defendants entered into an agreement with the shareholder to settle the Application and a proposed derivative action. Under the settlement, among other things, RIM agreed to the payment of CAD $1.1 million on account of the shareholder’s legal costs, and consistent with their earlier voluntary agreement (described above and in RIM’s March 5, 2007 press release summarizing the results of the Review) to contribute CAD $5.0 million each to defray the costs incurred by RIM in connection with the Review, RIM’s Co-CEO’s, Jim Balsillie and Mike Lazaridis, agreed to pay RIM a further CAD $2.5 million each to defray the Review costs incurred by RIM. The Company received these voluntary payments of CAD $2.5 million each in the third quarter of fiscal 2008, which were recorded net of income taxes as an increase to paid-in capital.

Research In Motion Limited
Management’s Discussion and Analysis of Financial Condition and Results of Operations

Risks Related to the Company’s Historical Stock Option Granting Practices

As a result of the events described above, the Company has become subject to the following significant risks, each of which could have a material adverse effect on the Company’s business, financial condition and results of operations:

	•		The Company’s historical stock option granting practices are subject to ongoing investigations by the SEC, the OSC and the USAO. The investigations and requests for information, including interviews with the Company’s management and others, have required significant management attention and resources. The period of time necessary to resolve the investigations or to adequately respond to requests for information is uncertain, and these matters could continue to require significant additional attention and resources that could otherwise be devoted to the operation of the Company’s business. While there can be no assurance as to the outcome of the investigations, the Company anticipates that RIM and certain of its directors or officers could be subject to potential enforcement action, penalties or other remedies. For example, whether as part of a negotiated settlement with the regulators or as part of the resolution of any enforcement proceedings, the Company or its officers could be required to pay substantial damages, fines or other penalties, and the regulators could seek an injunction against the Company and its directors and officers, or seek to ban an officer or director of the Company from acting as such. In addition, if the USAO determines that an intentional violation of securities laws or other laws has occurred, it could commence a prosecution seeking to impose criminal sanctions against the Company or its officers or directors. Any of these actions could have a material adverse effect on the Company. There can be no assurance that other regulatory agencies in the United States, Canada or elsewhere will not make inquiries about, or commence investigations into, matters relating to the Company’s historical stock option practices.

	•		As previously disclosed, the Company was served with an application filed by a pension fund shareholder in Ontario, Canada, which, among other things, sought to commence a shareholder derivative action relating to the Company’s historical option granting practices, and also made certain demands with respect to the conduct and scope of the Review. Such action was settled in the third quarter of fiscal 2008. On November 5, 2007, the Ontario Superior Court of Justice granted an order approving the settlement and issuing a representation order that binds all RIM shareholders to the terms of the agreement, except for those who had opted out. Approximately one hundred shareholders opted out of the settlement. Those who disclosed the number of shares held by them indicated that, combined, the opt-out shareholders hold approximately 27,400 shares (approximately 0.005% of all outstanding shares). However, certain opt-out shareholders did not disclose the number of shares held by them. On December 10, 2007, the Ontario Superior Court of Justice issued an order extending the opt-out deadline to January 22, 2008 for customers of Goldman Sachs Exchange & Clearing L.P., who did not receive notice of the settlement in the initial mailing. As a result of that extension, additional shareholders holding 47,080 shares as at the record date opted out. While that lawsuit has been settled, additional lawsuits, including purported class actions and additional derivative actions, may be filed relating to the Company’s stock option granting practices. The amount of time to resolve any such lawsuits is unpredictable, and defending against such lawsuits could require significant additional attention and resources that could otherwise be devoted to the operation of the Company’s business. In addition, an unfavorable outcome in any such litigation could have a material adverse effect on the Company’s business, financial condition and results of operations.

Research In Motion Limited
Management’s Discussion and Analysis of Financial Condition and Results of Operations

	•		The Company could incur significant liabilities in connection with any litigation relating to its historical stock option granting practices, which liabilities may not be covered by insurance. In addition, the Company has indemnity obligations (including for legal expenses) for former and current directors, officers and employees, which are described in greater detail in the Company’s Management Information Circular dated May 28, 2008.

	•		As noted above, in connection with the Restatement, the Company has applied judgment in choosing whether to revise measurement dates for prior stock option grants. While the Company believes it has made appropriate judgments in determining the correct measurement dates for its stock option grants in connection with the Restatement, the issues surrounding past stock option grants and financial statement restatements are complex and guidance in these areas may continue to evolve. If new guidance imposes additional or different requirements or if the SEC or the OSC disagrees with the manner in which the Company has accounted for and reported the financial impact, there is a risk the Company may have to further restate its prior financial statements, amend its filings with the SEC or the OSC (including the Consolidated Financial Statements and this MD&A), or take other actions not currently contemplated. Additionally, if the SEC or the OSC disagrees with the manner in which the Company has accounted for and reported the financial impact of past option grants, there could be delays in subsequent filings with the SEC or the OSC.

	•		The Company may face challenges in hiring and retaining qualified personnel due to the Restatement, the investigations relating to the Company and any potential tax consequences to employees who received grants of stock options with incorrect accounting measurement dates. In addition, restrictions on the Company’s ability to grant stock options or other equity awards to new employees under its policy on granting equity awards, which provides for quarterly grants of stock options or other equity awards except in limited and exceptional circumstances, may make it more difficult for the Company to attract new employees. The loss of the services of any of the Company’s key employees or challenges in hiring new employees could have a material adverse effect on its business and growth prospects. In addition, the Company may receive claims by employees who may be subject to adverse tax consequences as a result of errors in connection with its historical stock option grants.

Summary Results of Operations — Second Quarter of Fiscal 2009 Compared to the Second Quarter of Fiscal 2008

The following table sets forth certain unaudited consolidated statement of operations data, which is expressed in thousands of dollars and as a percentage of revenue for the interim periods indicated, as well as unaudited consolidated balance sheet data, which is expressed in thousands of dollars, as at August 30, 2008 and September 1, 2007.

Research In Motion Limited
Management’s Discussion and Analysis of Financial Condition and Results of Operations


	As at and for the Three Months Ended
									Change
									Q2 Fiscal
	August 30, 2008				September 1, 2007				2009/2008
	(in thousands, except for per share amounts)

Revenue	$	2,577,330	100.0	%	$	1,372,250	100.0	%	$	1,205,080

Cost of sales		1,270,473	49.3	%		667,833	48.7	%		602,640


Gross margin		1,306,857	50.7	%		704,417	51.3	%		602,440


Expenses

Research and development		181,347	7.0	%		88,171	6.4	%		93,176
Selling, marketing and administration		379,644	14.7	%		197,943	14.4	%		181,701
Amortization		43,633	1.7	%		25,350	1.8	%		18,283


		604,624	23.5	%		311,464	22.7	%		293,160


Income from operations		702,233	27.2	%		392,953	28.6	%		309,280

Investment income		17,168	0.7	%		18,984	1.4	%		(1,816	)


Income before income taxes		719,401	27.9	%		411,937	30.0	%		307,464

Provision for income taxes		223,855	8.7	%		124,252	9.0	%		99,603


Net income	$	495,546	19.2	%	$	287,685	21.0	%	$	207,861


Earnings per share (1)
Basic	$	0.88			$	0.51			$	0.37


Diluted	$	0.86			$	0.50			$	0.36


Weighted-average number of shares outstanding (000’s)
Basic		564,899				558,991
Diluted		574,831				572,165

Total assets	$	6,893,246			$	3,989,379			$	2,903,867
Total liabilities	$	1,944,690			$	920,262			$	1,024,428
Total long-term liabilities	$	95,664			$	77,798			$	17,866
Shareholders’ equity	$	4,948,556			$	3,069,117			$	1,879,439


Notes:

(1)		The Company has not paid any cash dividends during the last two fiscal years.

Executive Summary

Revenue for the second quarter of fiscal 2009 was $2.58 billion, an increase of $1.21 billion, or 87.8%, from $1.37 billion in the second quarter of fiscal 2008. The number of BlackBerry devices sold increased by approximately 3.0 million, or 101.2%, to approximately 6.1 million in the second quarter of fiscal 2009, compared to approximately 3.1 million in the second quarter of fiscal 2008. Device revenue increased by

Research In Motion Limited
Management’s Discussion and Analysis of Financial Condition and Results of Operations

$1.04 billion, or 96.5%, to $2.12 billion, reflecting primarily the higher number of devices sold. Service revenue increased by $132.3 million to $333.7 million, reflecting the Company’s increase in BlackBerry subscriber accounts since the second quarter of fiscal 2008. Software revenue increased by $7.1 million to $64.3 million in the second quarter of fiscal 2009.

The Company’s net income for the second quarter of fiscal 2009 was $495.5 million, an increase of $207.8 million, or 72.3%, in the second quarter of fiscal 2009, compared to net income of $287.7 million in the second quarter of fiscal 2008. Basic earnings per share (“basic EPS”) was $0.88 and diluted earnings per share (“diluted EPS”) was $0.86 in the second quarter of fiscal 2009 compared to $0.51 basic EPS and $0.50 diluted EPS in the second quarter of fiscal 2008, reflecting a 72.0% increase compared to fiscal 2008. The $207.8 million increase in net income in the second quarter of fiscal 2009 primarily reflects an increase in gross margin in the amount of $602.4 million, resulting primarily from the increased number of device shipments, which was partially offset by an increase of $374.5 million in the Company’s research and development expenses, sales and marketing programs and provision for income taxes.

A more comprehensive analysis of these factors is contained in “Results of Operations”.

Selected Quarterly Financial Data

The following table sets forth RIM’s unaudited quarterly consolidated results of operations data for each of the eight most recent quarters, including the quarter ended August 30, 2008. The information in the table below has been derived from RIM’s unaudited interim consolidated financial statements that, in management’s opinion, have been prepared on a basis consistent with the Consolidated Financial Statements of the Company and include all adjustments necessary for a fair presentation of information when read in conjunction with the Consolidated Financial Statements of the Company. RIM’s quarterly operating results have varied substantially in the past and may vary substantially in the future. Accordingly, the information below is not necessarily indicative of results for any future quarter.

Research In Motion Limited
Management’s Discussion and Analysis of Financial Condition and Results of Operations


	Fiscal Year 2009						Fiscal Year 2008												Fiscal Year 2007
	Second			First			Fourth			Third			Second			First				Fourth			Third
	Quarter			Quarter			Quarter			Quarter			Quarter			Quarter				Quarter			Quarter
	(in thousands, except per share data)
Revenue	$	2,577,330		$	2,242,565		$	1,882,705		$	1,672,529		$	1,372,250		$	1,081,911			$	930,393		$	835,053
Gross margin	$	1,306,857		$	1,137,357		$	968,222		$	847,872		$	704,417		$	560,070			$	497,358		$	452,631

Research and development,
Selling, marketing and administration, and Amortization		604,624			490,920			403,768			357,978			311,464			276,212				256,454			228,087
Investment income		(17,168	)		(18,977	)		(20,114	)		(23,816	)		(18,984	)		(16,447	)			(14,794	)		(12,666	)


Income before income taxes		719,401			665,414			584,568			513,710			411,937			300,305				255,698			237,210

Provision for income taxes		223,855			182,899			172,067			143,249			124,252			77,085				68,314			62,018


Net income	$	495,546		$	482,515		$	412,501		$	370,461		$	287,685		$	223,220			$	187,384		$	175,192


Earnings per share (1)

Basic	$	0.88		$	0.86		$	0.73		$	0.66		$	0.51		$	0.40			$	0.34		$	0.32

Diluted	$	0.86		$	0.84		$	0.72		$	0.65		$	0.50		$	0.39			$	0.33		$	0.31


Research and development	$	181,347		$	127,776		$	104,573		$	92,150		$	88,171		$	74,934			$	67,321		$	61,184
Selling, marketing and administration		379,644			326,592			267,881			238,175			197,943			177,483				167,112			146,569
Amortization		43,633			36,552			31,314			27,653			25,350			23,795				22,021			20,334


	$	604,624		$	490,920		$	403,768		$	357,978		$	311,464		$	276,212			$	256,454		$	228,087


Notes:

(1)		The Company has not paid any cash dividends during the last three fiscal years.

Results of Operations

Three months ended August 30, 2008 compared to the three months ended September 1, 2007

Revenue

Revenue for the second quarter of fiscal 2009 was $2.58 billion, an increase of $1.21 billion, or 87.8%, from $1.37 billion in the second quarter of fiscal 2008.

A comparative breakdown of the significant revenue streams is set forth in the following table:

Research In Motion Limited
Management’s Discussion and Analysis of Financial Condition and Results of Operations


									Change - Fiscal
	Q2 Fiscal 2009				Q2 Fiscal 2008				2009/2008
Number of devices sold		6,148,000				3,056,000				3,092,000		101.2	%

Average Selling Price (“ASP”)	$	344			$	353			$	(9	)	(2.5	%)


*Revenues*
Devices	$	2,116,451	82.1	%	$	1,077,165	78.5	%	$	1,039,286		96.5	%
Service		333,687	12.9	%		201,415	14.7	%		132,272		65.7	%
Software		64,290	2.5	%		57,203	4.2	%		7,087		12.4	%
Other		62,902	2.5	%		36,467	2.6	%		26,435		72.5	%

	$	2,577,330	100.0	%	$	1,372,250	100.0	%	$	1,205,080		87.8	%

Device revenue increased by $1.04 billion, or 96.5%, to $2.12 billion, or 82.1% of consolidated revenue, in the second quarter of fiscal 2009 compared to $1.08 billion, or 78.5%, of consolidated revenue in the second quarter of fiscal 2008. This increase in device revenue over the prior year is primarily attributable to a volume increase of approximately 3.0 million units, or 101.2%, to approximately 6.1 million devices in the second quarter of fiscal 2009 compared to approximately 3.1 million devices in the second quarter of fiscal 2008. ASP decreased to $344 in the second quarter of fiscal 2009 from $353 in the second quarter of fiscal 2008 due primarily to a change in the BlackBerry device mix. The Company currently expects ASP to be approximately the same in the third quarter of fiscal 2009 when compared to the second quarter of fiscal 2009, however, as RIM expands its market focus into the consumer market and as the technology continues to mature, the Company expects the ASP to decline. ASP is dependent on projected future sales volumes, device mix, new device introductions for the Company’s enterprise, prosumer and consumer offerings as well as pricing by competitors in the industry.

The Company estimates that a $10, or 2.9%, change in overall ASP would result in a quarterly revenue change of approximately $61 million, based upon the Company’s volume of devices shipped in the second quarter of fiscal 2009.

Service revenue increased $132.3 million, or 65.7%, to $333.7 million and comprised 12.9% of consolidated revenue in the second quarter of fiscal 2009 compared to $201.4 million, or 14.7% of consolidated revenue in the second quarter of fiscal 2008, reflecting the Company’s increase in BlackBerry subscriber accounts since the second quarter of fiscal 2008. BlackBerry subscriber account additions were approximately net 2.6 million for the second quarter of fiscal 2009 compared to approximately net 1.5 million for the comparable period last year. The total BlackBerry subscriber account base at the end of the second quarter of fiscal 2009 was approximately 19 million compared to approximately 10.5 million at the end of the second quarter of fiscal 2008. The percentage of the subscriber account base outside of North America at the end of the second quarter of fiscal 2009 was in the low 30 percent range.

Software revenue includes fees from licensed BES software, CALs, technical support, maintenance and upgrades. Software revenue increased $7.1 million, or 12.4%, to $64.3 million in the second quarter of fiscal 2009 from $57.2 million in the second quarter of fiscal 2008.

Research In Motion Limited
Management’s Discussion and Analysis of Financial Condition and Results of Operations

Other revenue, which includes accessories, non-warranty repairs and NRE, increased by $26.4 million to $62.9 million in the second quarter of fiscal 2009 compared to $36.5 million in the second quarter of fiscal 2008. The majority of the increase was attributable to increases in sales of accessories and non-warranty repair.

Gross Margin

Consolidated gross margin increased by $602.4 million, or 85.5%, to $1.31 billion, or 50.7% of revenue, in the second quarter of fiscal 2009, compared to $704.4 million, or 51.3% of revenue, in the same period of the previous fiscal year. The decrease of 0.6% in consolidated gross margin percentage was primarily due to a higher percentage of device shipments which comprised 82.1% of the total revenue mix in the second quarter of fiscal 2009 compared to 78.5% in the same period of fiscal 2008 and a change in the BlackBerry device mix. Gross margin percentage for devices is generally lower than the Company’s consolidated gross margin percentage. The decrease in gross margin percentage relating to the increase in percentage of device shipments was offset in part by improved service margins resulting from cost efficiencies in RIM’s network operations infrastructure as a result of the increase in BlackBerry subscriber accounts. The Company expects gross margin to be approximately 47% in the third quarter of fiscal 2009, reflecting primarily a decrease in blended handset margins relating to certain new products that are feature rich and designed to operate on new network technologies, offset in part by operating expenses that are 1% – 2% lower as a percentage of revenue than the second quarter of fiscal 2009.

Research and Development, Selling, Marketing and Administration, and Amortization Expense

The table below presents a comparison of research and development, selling, marketing and administration, and amortization expenses for the quarter ended August 30, 2008, compared to the quarter ended May 31, 2008 and the quarter ended September 1, 2007. The Company believes it is meaningful to provide a comparison between the second quarter of fiscal 2009 and the first quarter of fiscal 2009 given the quarterly increases in revenue realized by the Company during fiscal 2009.


	Three Month Fiscal Periods Ended
	August 30, 2008					May 31, 2008					September 1, 2007
			% of					% of					% of
			Revenue					Revenue					Revenue

Revenue	$	2,577,330				$	2,242,565				$	1,372,250


Research and development	$	181,347		7.0	%	$	127,776		5.7	%	$	88,171		6.4	%
Selling, marketing and administration		379,644		14.7	%		326,592		14.6	%		197,943		14.4	%
Amortization		43,633		1.7	%		36,552		1.6	%		25,350		1.8	%


	$	604,624		23.5	%	$	490,920		21.9	%	$	311,464		22.7	%

Research In Motion Limited
Management’s Discussion and Analysis of Financial Condition and Results of Operations

Research and Development

Research and development expenditures consist primarily of salaries and benefits for technical personnel, new product development costs, travel, office and related infrastructure costs and recruiting.

Research and development expenditures increased by $93.1 million to $181.3 million, or 7.0% of revenue, in the second quarter of fiscal 2009, compared to $88.2 million, or 6.4% of revenue, in the second quarter of fiscal 2008. The majority of the increases during the second quarter of fiscal 2009 compared to the second quarter of fiscal 2008 were attributable to salaries and benefits due to an increase in the average headcount associated with research and development activities, new product development costs, travel and office and related staffing infrastructure costs.

Selling, Marketing and Administration Expenses

Selling, marketing and administration expenses consist primarily of, marketing, advertising and promotion, salaries and benefits, external advisory fees, office and related staffing infrastructure costs and travel expenses.

Selling, marketing and administration expenses increased by $181.7 million to $379.6 million for the second quarter of fiscal 2009 compared to $197.9 million for the comparable period in fiscal 2008. As a percentage of revenue, selling, marketing and administration expenses increased to 14.7% in the second quarter of fiscal 2009 compared to 14.4% in the second quarter of fiscal 2008. The net increase of $181.7 million was primarily attributable to increased expenditures for marketing, advertising and promotion expenses including additional programs to support new product launches, salary and benefits expenses primarily as a result of increased personnel, external advisory fees, office and related staffing infrastructure costs and travel expenses.

Amortization

Amortization expense relating to certain capital and all intangible assets other than licenses increased by $18.2 million to $43.6 million for the second quarter of fiscal 2009 compared to $25.4 million for the comparable period in fiscal 2008. The increased amortization expense primarily reflects the impact of amortization expense with respect to capital and certain intangible asset expenditures incurred primarily during the last two quarters of fiscal 2008 and also incremental amortization with respect to capital and certain intangible asset expenditures incurred during the first half of fiscal 2009.

Cost of sales

Amortization expense with respect to capital assets employed in the Company’s manufacturing operations and BlackBerry service operations increased to $18.2 million in the second quarter of fiscal 2009 compared to $10.5 million in the second quarter of fiscal 2008 and is charged to Cost of sales in the Consolidated Statements of Operations. The increased amortization expense in the second quarter of fiscal 2009 primarily reflects the impact of amortization expense with respect to these capital asset expenditures incurred during the last two quarters of fiscal 2008 and also incremental amortization with respect to capital asset expenditures incurred during the first half of fiscal 2009.

Amortization expense with respect to licenses (a component of Intangible assets) is charged to Cost of sales and was $7.5 million in the second quarter of fiscal 2009 compared to $5.4 million in the second quarter of fiscal 2008.

Research In Motion Limited
Management’s Discussion and Analysis of Financial Condition and Results of Operations

Total amortization expense with respect to Intangible assets was $24.1 million in the second quarter of fiscal 2009 compared to $9.9 million in the second quarter of fiscal 2008. See also Note 6 to the Consolidated Financial Statements.

Investment Income

Investment income decreased by $1.8 million to $17.2 million in the second quarter of fiscal 2009 from $19.0 million in the second quarter of fiscal 2008. The decrease primarily reflects the decrease in yields due to lower interest rates, offset by an increase in cash and cash equivalents, short-term investments and long-term investments when compared to the prior year. See also “Liquidity and Capital Resources”.

Income Taxes

For the second quarter of fiscal 2009, the Company’s income tax expense was $223.9 million, resulting in an effective tax rate of 31.1% compared to income tax expense of $124.3 million or an effective tax rate of 30.2% for the same period last year. The Company’s effective tax rate reflects the geographic mix of earnings in jurisdictions with different tax rates. The Company’s effective tax rate for the second quarter of fiscal 2009 was approximately 1% higher than management’s estimate for the quarter primarily due to the unfavorable impact of the appreciation of the U.S. dollar relative to the Canadian dollar in the second quarter of fiscal 2009. The foreign exchange impact was a result of U.S. dollar denominated assets and liabilities held by Canadian entities that are subject to tax in Canadian dollars and the related timing of transactions. Management anticipates the Company’s effective tax rate for the remainder of fiscal 2009 to be approximately 29% to 30%. The Company’s effective tax rate could move outside this range depending on, among other things, foreign exchange rate fluctuations.

The Company has not provided for Canadian income taxes or foreign withholding taxes that would apply on the distribution of the earnings of its non-Canadian subsidiaries, as these earnings are intended to be reinvested indefinitely by these subsidiaries.

Net Income

Net income was $495.5 million, or $0.88 basic EPS and $0.86 diluted EPS, in the second quarter of fiscal 2009 compared to net income of $287.7 million, or $0.51 basic EPS and $0.50 diluted EPS, in the second quarter of fiscal 2008.

The $207.8 million increase in net income in the second quarter of fiscal 2009 reflects primarily an increase in gross margin in the amount of $602.4 million, which was offset in part by an increase of $374.5 million in the Company’s investments in research and development expenses and sales and marketing programs and the Company’s provision for income taxes.

Research In Motion Limited
Management’s Discussion and Analysis of Financial Condition and Results of Operations


	For the Six Months Ended
									Change
									- Fiscal
	August 30, 2008				September 1, 2007				2009/2008
	(in thousands, except for per share amounts)

Revenue	$	4,819,895	100.0	%	$	2,454,161	100.0	%	$	2,365,734

Cost of sales		2,375,681	49.3	%		1,189,674	48.5	%		1,186,007


Gross margin		2,444,214	50.7	%		1,264,487	51.5	%		1,179,727


Expenses

Research and development		309,123	6.4	%		163,105	6.6	%		146,018
Selling, marketing and administration		706,236	14.6	%		375,426	15.3	%		330,810
Amortization		80,185	1.7	%		49,145	2.0	%		31,040


		1,095,544	22.7	%		587,676	23.9	%		507,868


Income from operations		1,348,670	28.0	%		676,811	27.6	%		671,859

Investment income		36,145	0.7	%		35,431	1.4	%		714


Income before income taxes		1,384,815	28.7	%		712,242	29.0	%		672,573

Provision for income taxes		406,754	8.4	%		201,337	8.2	%		205,417


Net income	$	978,061	20.3	%	$	510,905	20.8	%	$	467,156


Earnings per share
Basic	$	1.73			$	0.91			$	0.82


Diluted	$	1.70			$	0.89			$	0.81


Weighted-average number of shares outstanding (000’s)
Basic		564,222				558,422
Diluted		574,738				571,379

Revenue

Revenue for the first half of fiscal 2009 was $4.82 billion, an increase of $2.37 billion, or 96.4%, from $2.45 billion in the first six months of fiscal 2008.

A comparative breakdown of the significant revenue streams is set forth in the following table:

Research In Motion Limited
Management’s Discussion and Analysis of Financial Condition and Results of Operations


	For the Six Month Periods								Change - Fiscal
	Q2 YTD Fiscal 2009				Q2 YTD Fiscal 2008				2009/2008
Number of devices sold		11,546,000				5,472,000				6,074,000		111.0	%

Average Selling Price (“ASP”)	$	343			$	347			$	(4	)	(1.2	%)


*Revenues*
Devices	$	3,954,788	82.1	%	$	1,901,218	77.5	%	$	2,053,570		108.0	%
Service		626,063	13.0	%		375,000	15.3	%		251,063		67.0	%
Software		130,831	2.7	%		111,670	4.6	%		19,161		17.2	%
Other		108,213	2.2	%		66,273	2.6	%		41,940		63.3	%

	$	4,819,895	100.0	%	$	2,454,161	100.0	%	$	2,365,734		96.4	%

Device revenue increased by $2.1 billion, or 108.0%, to $4.0 billion, or 82.1% of consolidated revenue, in the first six months of fiscal 2009 compared to $1.9 billion, or 77.5%, of consolidated revenue in the first half of fiscal 2008. This increase in device revenue over the prior year is primarily attributable to a volume increase of approximately 6.0 million units, or 111.0%, to approximately 11.5 million devices in the first six months of fiscal 2009 compared to approximately 5.5 million devices in the first half of fiscal 2008, partially offset by a decrease of $4 or 1.2% in ASP to $343 in the current six month fiscal period from $347 in the first six months of fiscal 2008.

Service revenue increased $251.1 million, or 67.0%, to $626.1 million and comprised 13.0% of consolidated revenue in the first six months of fiscal 2009 compared to $375.0 million, or 15.3% of consolidated revenue in the first six months of fiscal 2008, reflecting the Company’s increase in BlackBerry subscriber accounts since the second quarter of fiscal 2008.

Software revenue increased $19.1 million, or 17.2%, to $130.8 million in the first six months of fiscal 2009 from $111.7 million in the first six months of fiscal 2008.

Other revenue increased by $41.9 million to $108.2 million in the first six months of fiscal 2009 compared to $66.3 million in the first six months of fiscal 2008. The majority of the increase was attributable to increases in sales of accessories and non-warranty repair.

Gross Margin

Consolidated gross margin increased by $1.18 billion, or 93.3%, to $2.44 billion, or 50.7% of revenue, in the first six months of fiscal 2009, compared to $1.26 billion, or 51.5% of revenue, in the same period of the previous fiscal year. The decrease of 0.8% in consolidated gross margin percentage was primarily due to a higher percentage of device shipments which comprised 82.1% of the total revenue mix in the first six months of fiscal 2009 compared to 77.5% in the same period of fiscal 2008 and a change in the BlackBerry device mix. Gross margin percentage for devices is generally lower than the Company’s consolidated gross margin

Research In Motion Limited
Management’s Discussion and Analysis of Financial Condition and Results of Operations

percentage. The decrease in gross margin percentage relating to the increase in percentage of device shipments was offset in part by improved service margins resulting from cost efficiencies in RIM’s network operations infrastructure as a result of the increase in BlackBerry subscriber accounts and a decline in certain fixed costs as a percentage of consolidated revenue as the Company continues to realize economies of scale in its manufacturing operations.

Research and Development, Selling, Marketing and Administration, and Amortization Expense

The table below presents a comparison of research and development, selling, marketing and administration, and amortization expenses for the six months ended August 30, 2008, compared to the six months ended September 1, 2007.


	For the Six Months Ended
											Change - Fiscal
	August 30, 2008					September 1, 2007					2009/2008
			% of					% of
			Revenue					Revenue					% of Change

Revenue	$	4,819,895				$	2,454,161				$	2,365,734		96.4	%


Research and development	$	309,123		6.4	%	$	163,105		6.6	%	$	146,018		89.5	%
Selling, marketing and administration		706,236		14.7	%		375,426		15.3	%		330,810		88.1	%
Amortization		80,185		1.7	%		49,145		2.0	%		31,040		63.2	%


	$	1,095,544		22.7	%	$	587,676		23.9	%	$	507,868		86.4	%

Research and Development

Research and development expenditures increased by $146.0 million to $309.1 million, or 6.4% of revenue, in the six months ended August 30, 2008, compared to $163.1 million, or 6.6% of revenue, in the first six months of fiscal 2008. The majority of the increases during the first six months of fiscal 2009, compared to fiscal 2008, were attributable to salaries and benefits due to an increase in the average headcount associated with research and development activities, new product development costs, travel and office and related staffing infrastructure costs.

Selling, Marketing and Administration Expenses

Selling, marketing and administration expenses increased by $330.8 million to $706.2 million for the first six months of fiscal 2009 compared to $375.4 million for the comparable period in fiscal 2008. As a percentage of revenue, selling, marketing and administration expenses decreased to 14.7% in the current fiscal period versus 15.3% in the comparable preceding fiscal period. The net increase of $330.8 million was primarily attributable to increased expenditures for marketing, advertising and promotion expenses including additional programs to

Research In Motion Limited
Management’s Discussion and Analysis of Financial Condition and Results of Operations

support new product launches, salary and benefits expenses primarily as a result of increased personnel, external advisory fees, office and related staffing infrastructure costs and travel expenses.

Amortization

Amortization expense relating to certain capital and all intangible assets other than licenses increased by $31.1 million to $80.2 million for the first half of fiscal 2009 compared to $49.1 million for the comparable period in fiscal 2008. The increased amortization expense for the six months ended August 30, 2008 primarily reflects the impact of six months of amortization expense with respect to capital and certain intangible asset expenditures incurred primarily during the last two quarters of fiscal 2008 and also incremental amortization with respect to capital and certain intangible asset expenditures incurred during the first six months of fiscal 2009.

Cost of sales

Amortization expense with respect to capital assets employed in the Company’s manufacturing operations and BlackBerry service operations increased to $33.1 million in the first six months of fiscal 2009 compared to $20.8 million in the comparable period of fiscal 2008 and is charged to Cost of sales in the Consolidated Statements of Operations. The increased amortization expense in the first six months of fiscal 2009 primarily reflects the impact of amortization expense with respect to these capital asset expenditures incurred during the last two quarters of fiscal 2008 and also incremental amortization with respect to capital asset expenditures incurred during the first half of fiscal 2009.

Amortization expense with respect to licenses (a component of Intangible assets) is charged to Cost of sales and was $12.7 million in the first six months of fiscal 2009 compared to $9.0 million in the comparable period of fiscal 2008.

Total amortization expense with respect to Intangible assets was $40.6 million in the first six months of fiscal 2009 compared to $18.1 million in the first six months of fiscal 2008. See also Note 6 to the Consolidated Financial Statements.

Investment Income

Investment income increased by $0.7 million to $36.1 million in the first six months of fiscal 2009 from $35.4 million in the comparable period of fiscal 2008. The increase primarily reflects the increase in cash and cash equivalents, short-term investments and long-term investments when compared to the prior year, offset by decreases in yields due to lower interest rates. See also “Liquidity and Capital Resources”.

Income Taxes

For the first six months of fiscal 2009, the Company’s income tax expense was $406.8 million, resulting in an effective tax rate of 29.4% compared to income tax expense of $201.3 million or an effective tax rate of 28.3% for the same period last year. The Company’s effective tax rate reflects the geographic mix of earnings in jurisdictions with different tax rates. The lower effective tax rate in the first six months of fiscal 2008 was

Research In Motion Limited
Management’s Discussion and Analysis of Financial Condition and Results of Operations

primarily due to the favorable impact of the depreciation of the U.S. dollar relative to the Canadian dollar during the first six months of fiscal 2008. For the first six months of fiscal 2009, the unfavorable impact of the appreciation of the U.S. dollar relative to the Canadian dollar in the second quarter of fiscal 2009 was offset by favourable foreign exchange related to certain balance sheet items in the first quarter of fiscal 2009.

Net Income

Net income was $978.1 million, or $1.73 basic EPS and $1.70 diluted EPS, in the first six months of fiscal 2009 compared to net income of $510.9 million, or $0.91 basic EPS and $0.89 diluted EPS, in the prior year’s comparable period.

The $467.2 million increase in net income in the first six months of fiscal 2009 reflects primarily an increase in gross margin in the amount of $1.18 billion, which was offset in part by an increase of $682.2 million in the Company’s investments in research and development expenses and sales and marketing programs and the Company’s provision for income taxes.

The weighted average number of shares outstanding was 564.2 million common shares for basic EPS and 574.7 million common shares for diluted EPS for the six months ended August 30, 2008 compared to 558.4 million common shares for basic EPS and 571.4 million common shares for diluted EPS for the same period last year.

Financial Condition

Liquidity and Capital Resources

Cash and cash equivalents, short-term investments and long-term investments increased by $163.1 million to $2.24 billion as at August 30, 2008 from $2.08 billion as at May 31, 2008. The majority of the Company’s cash and cash equivalents, short-term investments and long-term investments are denominated in U.S. dollars as at August 30, 2008.

A comparative summary of cash and cash equivalents, short-term investments and long-term investments is set out below.

Research In Motion Limited
Management’s Discussion and Analysis of Financial Condition and Results of Operations

As at

Change -

August 30, 2008

May 31, 2008

Q2/Q1

Cash and cash equivalents

1,131,074

984,217

146,857

Short-term investments

422,121

391,939

30,182

Long-term investments

686,457

700,400

(13,943

)

Cash and cash equivalents, short-term investments and long-term investments

2,239,652

2,076,556

163,096

Three months ended August 30, 2008 compared to the three months ended September 1, 2007

Operating Activities

Cash flow provided by operating activities was $591.7 million in the second quarter of fiscal 2009 compared to cash flow provided by operating activities of $227.1 million in the preceding fiscal year, representing an increase of $364.6 million primarily reflecting the increase in accounts payable and accrued liabilities of approximately $324.7 million due to timing of payments, partially offset by an increase of trade receivables of $205.5 million in the second quarter of fiscal 2009. The table below summarizes the key components of this net decrease.

Three Months Ended

Change - Fiscal

August 30, 2008

September 1, 2007

2009/2008

Net income

495,546

287,685

207,861

Amortization

69,316

41,277

28,039

Deferred income taxes

24,073

(13,356

)

37,429

Stock-based compensation

9,700

9,000

700

Changes in:

Trade receivables

(339,673

)

(134,211

)

(205,462

)

Other receivables

(20,046

)

(50,772

)

30,726

Inventory

(51,336

)

(42,738

)

(8,598

)

Accounts payable

225,274

(8,085

)

233,359

Accrued liabilities

136,489

45,134

91,355

Income taxes payable

19,829

106,433

(86,604

)

All other

22,531

(13,269

)

35,800

Cash provided from operating activities

591,703

227,098

364,605

Research In Motion Limited
Management’s Discussion and Analysis of Financial Condition and Results of Operations

Financing Activities

Cash flow provided by financing activities was $8.3 million for the second quarter of fiscal 2009 and was primarily provided by the proceeds from the exercise of stock options and tax benefits from the exercise of stock options. The cash flow provided by financing activities in the second quarter of fiscal 2008 in the amount of $28.7 million was primarily attributable to proceeds from the exercise of stock options as well as the voluntary payments of CAD $5.0 million each made by the Co-CEOs. See “Restatement of Previously Issued Financial Statements – Review Costs”.

Investing Activities

During the three months ended August 30, 2008, cash flow used in investing activities was $441.4 million and included capital asset additions of $190.4 million, intangible asset additions of $234.1 million, as well as transactions involving the proceeds on sale or maturity of short-term investments and long-term investments, net of the costs of acquisitions in the amount of $16.9 million. For the same period of the prior fiscal year, cash flow used in investing activities was $120.1 million and included capital asset additions of $79.0 million, intangible asset additions of $13.7 million, as well as transactions involving the proceeds on sale or maturity of short-term investments and long-term investments, net of the costs of acquisition, amounting to $24.2 million. The increase in capital asset spending was primarily due to increased investment in land and building purchases, renovations to existing facilities, expansion and enhancement of the BlackBerry infrastructure and computer equipment purchases. The increase in intangible asset spending was primarily associated with a patent assignment and license agreement to acquire a portfolio of patents for a total of $202.0 million. All acquired patents were recorded as Intangible assets and are being amortized over their estimated useful lives.

Six months ended August 30, 2008 compared to the six months ended September 1, 2007

Operating Activities

Cash flow provided by operating activities was $599.1 million in the first six months of fiscal 2009 compared to cash flow provided by operating activities of $450.1 million in the first six months of the preceding fiscal year, representing an increase of $149.0 million and includes the payment, in the first quarter of fiscal 2009, of approximately $460 million for income taxes relating to fiscal 2008. The table below summarizes the key components of this net increase.

Research In Motion Limited
Management’s Discussion and Analysis of Financial Condition and Results of Operations

Six Months Ended

Change-Fiscal

August 30, 2008

September 1, 2007

2009/2008

Net income

978,061

510,905

467,156

Amortization

125,995

78,993

47,002

Deferred income taxes

(18,678

)

(62,151

)

43,473

Stock-based compensation

19,600

14,300

5,300

Changes in:

Trade receivables

(592,082

)

(279,931

)

(312,151

)

Other receivables

(43,848

)

(68,158

)

24,310

Inventory

(116,637

)

(45,486

)

(71,151

)

Accounts payable

256,724

51,590

205,134

Accrued liabilities

294,238

121,898

172,340

Income taxes payable

(320,775

)

141,573

(462,348

)

All other

16,481

(13,388

)

29,869

Cash provided from operating activities

599,079

450,145

148,934

Financing Activities

Cash flow provided by financing activities was $33.9 million for the first six months of fiscal 2009 and was primarily provided by the proceeds from the exercise of stock options and tax benefits from the exercise of stock options. The cash flow provided by financing activities in the first six months of fiscal 2008 in the amount of $33.8 million was primarily provided by the proceeds from the exercise of stock options in the amount of $23.2 million, as well as the voluntary payments of CAD $5.0 million each made by the Co-CEOs. See “Restatement of Previously Issued Financial Statements – Review Costs”.

Investing Activities

During the six months ended August 30, 2008, cash flow of $674.6 million was used primarily to fund $386.0 million of capital asset purchases and $331.0 million for the acquisition of intangible assets, offset by cash flow provided by transactions involving the proceeds on sale or maturity of short-term investments and investments, net of the costs of acquisitions in the amount of $42.4 million. For the first six months of the prior fiscal year, cash flow used in investing activities was $313.1 million and included capital asset additions of $145.7 million, intangible asset additions of $23.5 million, as well as transactions involving the proceeds on sale or maturity of short-term investments and long-term investments, net of the costs of acquisition, amounting to $140.7 million.

Auction Rate Securities

Auction rate securities are debt instruments with long-term nominal maturity dates for which the interest rates are reset through a dutch auction process, typically every 7, 28 or 35 days. Interest is paid at the end of each auction period, and the auction normally serves as the mechanism for securities holders to sell their existing positions to interested buyers. As at August 30, 2008, the Company held $40.5 million in face value of investment grade auction rate securities which are experiencing failed auctions as a result of more sell orders than buy orders, and

Research In Motion Limited
Management’s Discussion and Analysis of Financial Condition and Results of Operations

these auctions have not yet returned to normal operations. The interest rate for these securities has been set at the maximum rate specified in the program documents (a predetermined basis points spread over LIBOR), and interest continues to be paid every 28 days as scheduled. As a result of the lack of continuing liquidity in these securities, the Company has adjusted the reported value to reflect an unrealized loss of $3.2 million, which the Company considers temporary and is reflected in other comprehensive income. In valuing these securities, the Company used a multi-year investment horizon and considered the underlying risk of the securities and the current market interest rate environment. The Company has the ability and intent to hold these securities until such time that market liquidity returns to normal levels, and does not consider the principal or interest amounts on these securities to be materially at risk at this time. As there is uncertainty as to when market liquidity for auction rate securities will return to normal, the Company has classified the failing auction rate securities as long-term investments on the balance sheet. As at August 30, 2008, the Company does not consider these investments to be other-than-temporarily impaired.

Structured Investment Vehicle

A Structured Investment Vehicle (“SIV”) is a fund that seeks to generate investment returns by purchasing high grade long-term fixed income instruments and funding those purchases by issuing short-term debt instruments. In late 2007, widespread illiquidity in the market has prevented many SIVs from accessing necessary funding for ongoing operations. As at August 30, 2008, the Company held $25.0 million face value of SIV securities that were negatively impacted by the changes in market conditions. In fiscal 2008, the Company recorded an other-than-temporary impairment charge of $3.8 million on these investment securities. During the first six months of fiscal 2009, the Company did not record any additional other-than-temporary impairment charges associated with these investments.

In determining the value for these securities, the Company has considered available evidence including changes in general market conditions, specific industry and individual company data, the length of time and the extent to which the fair value has been less than cost, the financial condition, the near-term prospects of the individual investment and the Company’s intent and ability to hold the debt securities.

The SIV holdings have been placed with an enforcement manager to be restructured or sold at the election of each senior note holder. The Company has elected to participate in the restructuring of the securities. The Company believes that the anticipated restructuring will likely result in extended maturities and/or a pro-rata distribution of proceeds from the income and principal payments on the assets underlying the securities. Given the uncertainty of the restructuring at this time, the Company cannot determine the potential impact that a restructuring will have on the value of these securities and has classified these securities as long-term investments. The Company may recognize additional impairment charges on these securities if the restructuring is unsuccessful or there is an other-than temporary deterioration in the value of the underlying assets.

Aggregate Contractual Obligations

The following table sets out aggregate information about the Company’s contractual obligations and the periods in which payments are due as at August 30, 2008:

Research In Motion Limited
Management’s Discussion and Analysis of Financial Condition and Results of Operations


					One to				Greater
			Less than One		Three		Four to		than Five
	Total		Year		Years		Five Years		Years

Current portion of long-term debt	$	6,906	$	6,906	$	—	$	—	$	—
Operating lease obligations		157,040		18,901		54,590		29,065		54,484
Purchase obligations and commitments		3,295,475		3,295,475		—		—		—

Total	$	3,459,421	$	3,321,282	$	54,590	$	29,065	$	54,484

Purchase obligations and commitments amounted to approximately $3.3 billion as of August 30, 2008, with purchase orders with contract manufacturers representing approximately $2.4 billion of the total. The Company also has commitments on account of capital expenditures of approximately $101.3 million included in this total, primarily for manufacturing, facilities and information technology, including service operations. The remaining balance consists of purchase orders or contracts with suppliers of raw materials, as well as other goods and services utilized in the operations of the Company. The expected timing of payment of these purchase obligations and commitments is estimated based upon current information. The timing of payments and actual amounts paid may be different depending upon the time of receipt of goods and services, changes to agreed-upon amounts for some obligations or payment terms.

The Company has not paid any cash dividends in the last two fiscal years.

Cash and cash equivalents, short-term investments and long-term investments were $2.24 billion as at August 30, 2008. The Company believes its financial resources, together with expected future earnings, are sufficient to meet funding requirements for current financial commitments, for future operating and capital expenditures not yet committed, and also provide the necessary financial capacity to meet current and future growth expectations.

The Company has a $100 million Demand Credit Facility (the “Facility”) to support and secure operating and financing requirements. As at August 30, 2008, the Company has utilized $18.0 million of the Facility for outstanding Letters of Credit and $82.0 million of the Facility is unused. The Company has pledged specific investments as security for this Facility.

The Company has an additional $2.4 million Demand Credit Facility (the “Additional Facility”). The Additional Facility is used to support and secure other operating and financing requirements. As at August 30, 2008, the Company has utilized $1.4 million of the Additional Facility for outstanding letters of credit and $1.0 million of the Additional Facility is unused.

The Company’s long-term debt of $6.9 million as at August 30, 2008 consisted of mortgages with interest rates ranging between 6.88% and 7.90%, against which certain land and building are pledged as collateral. All mortgage loans are denominated in Canadian dollars and mature on March 1, 2009.

The Company does not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K under the Exchange Act and under applicable Canadian securities laws.

Research In Motion Limited
Management’s Discussion and Analysis of Financial Condition and Results of Operations

Market Risk of Financial Instruments

The Company is engaged in operating and financing activities that generate risk in three primary areas:

Foreign Exchange

The Company is exposed to foreign exchange risk as a result of transactions in currencies other than its functional currency, the U.S. dollar. The majority of the Company’s revenues in fiscal 2009 are transacted in U.S. dollars. Portions of the revenues are denominated in British Pounds, Canadian dollars and Euros. Purchases of raw materials are primarily transacted in U.S. dollars. Other expenses, consisting of the majority of salaries and income taxes, certain operating costs and manufacturing overhead are incurred primarily in Canadian dollars. At August 30, 2008, approximately 22% of cash and cash equivalents, 23% of trade receivables and 26% of accounts payable are denominated in foreign currencies (September 1, 2007 – 18%, 30% and 10%, respectively). These foreign currencies primarily include the British Pound, Canadian dollar, and Euro. As part of its risk management strategy, the Company maintains net monetary asset and/or liability balances in foreign currencies and engages in foreign currency hedging activities using derivative financial instruments, including currency forward contracts and currency options. The Company does not use derivative instruments for speculative purposes. The principal currencies hedged include the British Pound, Canadian dollar and Euro.

The Company has entered into forward contracts to hedge exposures relating to foreign currency anticipated transactions and these contracts have been designated as cash flow hedges. For a derivative instrument designated as a cash flow hedge, the effective portion of the derivative’s gain or loss is initially reported as a component of other comprehensive income and is subsequently recognized in earnings when the hedged exposure affects earnings. The ineffective portion of the gain or loss is recognized in earnings. The cash flow hedges were fully effective at August 30, 2008. As at August 30, 2008, the net unrealized gain on these forward contracts was approximately $20.8 million (September 1, 2007 – net unrealized gain of $26.5 million). Unrealized gains associated with these contracts were recorded in Other current assets and Accumulated other comprehensive income. Unrealized losses were recorded in Accrued liabilities and Accumulated other comprehensive income.

The Company has entered into forward contracts to hedge certain monetary assets and liabilities that are exposed to foreign currency risk. These contracts are considered economic hedges that are not subject to hedge accounting, with gains and losses on the hedge instruments being recognized in earnings each period, offsetting the change in the U.S. dollar value of the hedged asset or liability. As at August 30, 2008, a net unrealized gain of $0.4 million was recorded in respect of this amount (September 1, 2007 – net unrealized loss of $0.6 million). Unrealized gains associated with these contracts were recorded in Other current assets and Selling, marketing and administration. Unrealized losses were recorded in Accrued liabilities and Selling, marketing and administration.

Interest Rate

Cash, cash equivalents and investments are invested in certain instruments of varying maturities. Consequently, the Company is exposed to interest rate risk as a result of holding investments of varying maturities. The fair value of investments, as well as the investment income derived from the investment portfolio, will fluctuate with changes in prevailing interest rates. The Company does not currently use interest rate derivative financial instruments in its investment portfolio.

Research In Motion Limited
Management’s Discussion and Analysis of Financial Condition and Results of Operations

Credit and Customer Concentration

The Company has historically been dependent on an increasing number of significant telecommunication carriers and on larger more complex contracts with respect to sales of the majority of its products and services. The Company is experiencing significant sales growth in North America and internationally, resulting in the growth in its carrier customer base in terms of numbers, sales and trade receivables volumes and in some instances new or significantly increased credit limits. The Company, in the normal course of business, monitors the financial condition of its customers and reviews the credit history of each new customer. The Company establishes an allowance for doubtful accounts that corresponds to the specific credit risk of its customers, historical trends, and economic circumstances. The Company also places insurance coverage for a portion of its foreign trade receivables. The allowance as at August 30, 2008 is $2.0 million (September 1, 2007 — $1.9 million). While the Company sells to a variety of customers, three customers comprised 27%, 11% and 10% of trade receivables as at August 30, 2008 (March 1, 2008 – three customers comprised 19% and 14% and 10%). Additionally, four customers comprised 25%, 16%, 11% and 10% of the Company’s second quarter of fiscal 2009 sales (second quarter fiscal 2008 sales – two customers comprised 21% and 16%).

The Company is exposed to credit risk on derivative financial instruments arising from the potential for counterparties to default on their contractual obligations. The Company mitigates this risk by limiting counterparties to highly rated financial institutions and by continuously monitoring their creditworthiness. The Company’s exposure to credit loss and market risk will vary over time as a function of currency exchange rates. The Company measures its counterparty credit exposure as a percentage of the total fair value of the applicable derivative instruments. Where the net fair value of derivative instruments with any counterparty is negative, the Company deems the credit exposure to that counterparty to be nil. As at August 30, 2008, the maximum credit exposure to a single counterparty, measured as a percentage of the total fair value of derivative instruments with net unrealized gains was 49% (September 1, 2007 – 41%).

The Company is exposed to market and credit risk on its investment portfolio. The Company reduces this risk by investing in liquid, investment grade securities and by limiting exposure to any one entity or group of related entities. As at August 30, 2008, no single issuer represented more than 11% of the total cash, cash equivalents and investments (September 1, 2007 – no single issuer represented more than 9% of the total cash, cash equivalents and investments).

Market values are determined for each individual security in the investment portfolio. The Company assesses declines in the value of individual investments for impairment to determine whether the decline is other-than-temporary. The Company makes this assessment by considering available evidence, including changes in general market conditions, specific industry and individual company data, the length of time and the extent to which the fair value has been less than cost, the financial condition, the near-term prospects of the individual investment and the Company’s ability and intent to hold the debt securities to maturity. During the second quarter of fiscal 2009, the Company did not record an other-than-temporary impairment charge. See “Liquidity and Capital Resources – Structured Investment Vehicle”.

Research In Motion Limited
Management’s Discussion and Analysis of Financial Condition and Results of Operations

Impact of Accounting Pronouncements Not Yet Implemented

Business Combinations

In December 2007, the FASB issued SFAS 141(R) Business Combinations. SFAS 141(R) replaces SFAS 141 Business Combinations. SFAS 141(R) is broader in scope than SFAS 141 which applied only to business combinations in which control was obtained by transferring consideration. SFAS 141(R) applies to all transactions and other events in which one entity obtains control over one or more other businesses. SFAS 141(R) is effective for fiscal years beginning after December 15, 2008 and the Company will adopt the standard in the first quarter of fiscal 2010 and its effects on future periods will depend on the nature and significance of any business combinations subject to this statement.

Noncontrolling Interests in Consolidated Financial Statements – an amendment of ARB 51

In December 2007, the FASB issued SFAS 160 Noncontrolling Interests in Consolidated Financial Statements – an amendment of ARB 51. SFAS 160 requires that the noncontrolling interest in the equity of a subsidiary be accounted for and reported as equity, provides revised guidance on the treatment of net income and losses attributable to the noncontrolling interest and changes in ownership interests in a subsidiary and requires additional disclosures that identify and distinguish between the interests of the controlling and noncontrolling owners. Pursuant to the transition provisions of SFAS 160, the Company will adopt the standard in the first quarter of fiscal 2010 via retrospective application of the presentation and disclosure requirements. The Company does not expect the adoption of SFAS 160 to have a material effect on the consolidated financial statements; however, the effects on future periods will depend on the nature and significance of any purchase of noncontrolling interests subject to this statement.

Disclosures about Derivative Instruments and Hedging Activities – an amendment of FASB Statement No. 133

In March 2008, the FASB issued SFAS 161 Disclosures about Derivative Instruments and Hedging Activities – an amendment of FASB Statement No. 133. SFAS 161 enhances the current disclosure framework in SFAS 133 and requires enhanced disclosures about why an entity uses derivative instruments, how derivative instruments are accounted for under SFAS 133 and how derivative instruments and related hedged items affect an entity’s financial position, financial performance and cash flows. SFAS 161 is effective for fiscal years beginning after November 15, 2008 and the Company is required to adopt the standard in the first quarter of fiscal 2010. As a result, the Company will change its disclosure, but does not expect the adoption to have a material effect on the Company’s financial condition or operating results once implemented in fiscal 2010.

Determination of the Useful Life of Intangible Assets

In April 2008, the FASB issued FSP SFAS 142-3 Determination of the Useful Life of Intangible Assets. FSP SFAS 142-3 amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of the recognized intangible asset under SFAS 142 Goodwill and Other Intangible Assets. The intent of the guidance is to improve the consistency between the useful life of a recognized intangible asset under SFAS 142 and the period of expected cash flows used to measure the fair value of the asset under SFAS 141(R). For a recognized intangible asset, an entity will be required to disclose information that enables users of the financial statements to assess the extent to which expected future cash flows associated with the asset are affected by the entity’s intent and/or ability to renew or extend the arrangement. FSP SFAS 142-3 is effective for fiscal years beginning after December 15, 2008.

Research In Motion Limited
Management’s Discussion and Analysis of Financial Condition and Results of Operations

The Company will adopt the standard in the first quarter of fiscal 2010 and is currently evaluating the impact this adoption will have on its consolidated financial statements.

The Hierarchy of Generally Accepted Principles

In May 2008, the FASB issued SFAS 162 The Hierarchy of Generally Accepted Principles. SFAS 162 outlines the order of authority for the sources of accounting principles. SFAS 162 is effective 60 days following the SEC’s approval of the Public Company Accounting Oversight Board amendments to AU Section 411, The Meaning of Present Fairly in Conformity With Generally Accepted Accounting Principles. The Company does not expect SFAS 162 to have an impact on the consolidated financial statements and the accompanying notes.

Changes in Internal Control Over Financial Reporting

During the three months ended August 30, 2008, no changes were made to the Company’s internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Research In Motion Limited
Incorporated under the Laws of Ontario
(United States dollars, in thousands)(unaudited)

Consolidated Balance Sheets


	As at
	August 30,		March 1,
	2008		2008
Assets
Current

Cash and cash equivalents (note 3)	$	1,131,074	$	1,184,398
Short-term investments (note 3)		422,121		420,709
Trade receivables		1,766,774		1,174,692
Other receivables		118,537		74,689
Inventory (note 4)		512,904		396,267
Other current assets (note 13)		136,628		135,849
Deferred income tax asset (note 9)		126,223		90,750

		4,214,261		3,477,354

Long-term investments (note 3)		686,457		738,889

Capital assets (note 5)		1,005,658		705,955

Intangible assets (note 6)		869,773		469,988

Goodwill		114,455		114,455

Deferred income tax asset (note 9)		2,642		4,546

	$	6,893,246	$	5,511,187


Liabilities
Current

Accounts payable	$	640,154	$	271,076
Accrued liabilities (notes 8 and 13)		977,827		690,442
Income taxes payable (note 9)		156,757		475,328
Deferred revenue		60,186		37,236
Current portion of long-term debt (note 15)		6,906		349
Deferred income tax liability (note 9)		7,196		—

		1,849,026		1,474,431

Long-term debt		—		7,259

Deferred income tax liability (note 9)		66,995		65,058

Income taxes payable (note 9)		28,669		30,873

		1,944,690		1,577,621

Shareholders’ Equity
Capital stock (note 11)

Authorized — unlimited number of non-voting, cumulative, redeemable, retractable preferred shares; unlimited number of non-voting, redeemable, retractable Class A common shares and unlimited number of voting common shares
Issued — 565,370,047 voting common shares (March 1, 2008 — 562,652,461)		2,199,813		2,169,856

Retained earnings		2,631,155		1,653,094
Paid-in capital		104,049		80,333
Accumulated other comprehensive income (note 13)		13,539		30,283

		4,948,556		3,933,566

	$	6,893,246	$	5,511,187

Commitments and contingencies (notes 8 and 15)
See notes to the consolidated financial statements.

On behalf of the Board:


Jim Balsillie Director		Mike Lazaridis Director

Research In Motion Limited
(United States dollars, in thousands)(unaudited)

Consolidated Statement of Shareholders’ Equity


								Accumulated
								Other
	Capital		Paid-In			Retained		Comprehensive
	Stock		Capital			Earnings		Income			Total

Balance as at March 1, 2008	$	2,169,856	$	80,333		$	1,653,094	$	30,283		$	3,933,566

Comprehensive income
Net income		—		—			978,061		—			978,061
Net change in unrealized gains on investments available-for-sale		—		—			—		(8,742	)		(8,742	)
Net change in derivative fair value during the period		—		—			—		(9,933	)		(9,933	)
Amounts reclassified to earnings during the period		—		—			—		1,931			1,931

Shares issued:
Exercise of stock options (note 11)		21,927		—			—		—			21,927
Transfers to capital stock resulting from stock option exercises		8,030		(8,030	)		—		—			—
Stock-based compensation (note 10)		—		19,600			—		—			19,600
Excess tax benefits from stock-based compensation (note 10)		—		12,146			—		—			12,146


Balance as at August 30, 2008	$	2,199,813	$	104,049		$	2,631,155	$	13,539		$	4,948,556

See notes to the consolidated financial statements.

Research In Motion Limited
(United States dollars, in thousands, except per share data)(unaudited)

Consolidated Statements of Operations


	For the Three Months Ended					For the Six Months Ended
	August 30,		September 1,			August 30,			September 1,
	2008		2007			2008			2007
Revenue	$	2,577,330	$	1,372,250		$	4,819,895		$	2,454,161

Cost of sales		1,270,473		667,833			2,375,681			1,189,674


Gross margin		1,306,857		704,417			2,444,214			1,264,487


Expenses

Research and development		181,347		88,171			309,123			163,105
Selling, marketing and administration (note 14)		379,644		197,943			706,236			375,426
Amortization		43,633		25,350			80,185			49,145

		604,624		311,464			1,095,544			587,676

Income from operations		702,233		392,953			1,348,670			676,811

Investment income		17,168		18,984			36,145			35,431


Income before income taxes		719,401		411,937			1,384,815			712,242

Provision for income taxes (note 9)
Current		200,918		137,643			426,576			267,809
Deferred		22,937		(13,391	)		(19,822	)		(66,472	)

		223,855		124,252			406,754			201,337

Net income	$	495,546	$	287,685		$	978,061		$	510,905


Earnings per share (note 12)

Basic	$	0.88	$	0.51		$	1.73		$	0.91


Diluted	$	0.86	$	0.50		$	1.70		$	0.89

See notes to the consolidated financial statements.

Research In Motion Limited
(United States dollars, in thousands)(unaudited)

Consolidated Statements of Cash Flows


	For the Three Months Ended						For the Six Months Ended
	August 30,			September 1,			August 30,			September 1,
	2008			2007			2008			2007
Cash flows from operating activities

Net income	$	495,546		$	287,685		$	978,061		$	510,905

Items not requiring an outlay of cash:

Amortization		69,316			41,277			125,995			78,993
Deferred income taxes		24,073			(13,356	)		(18,678	)		(62,151	)
Income taxes payable		(1,779	)		311			(2,204	)		28,608
Stock-based compensation (note 10)		9,700			9,000			19,600			14,300
Other		12,089			223			12,080			1,019
Net changes in working capital items (note 17)		(17,242	)		(98,042	)		(515,775	)		(121,529	)

Net cash provided by operating activities		591,703			227,098			599,079			450,145


Cash flows from financing activities

Issuance of common shares (note 11)		6,883			19,446			21,927			23,183
Other paid-in capital (note 10)		—			6,273			—			6,273
Excess tax benefits from stock-based compensation (note 10)		1,453			3,073			12,146			4,473
Repayment of long-term debt		(83	)		(74	)		(166	)		(140	)

Net cash provided by financing activities		8,253			28,718			33,907			33,789


Cash flows from investing activities

Acquisition of long-term investments		(59,946	)		(67,691	)		(173,642	)		(182,498	)
Proceeds on sale or maturity of long-term investments		48,591			57,774			143,674			83,095
Acquisition of capital assets		(190,389	)		(78,995	)		(386,039	)		(145,748	)
Acquisition of intangible assets		(234,135	)		(13,718	)		(331,027	)		(23,457	)
Business acquisitions (note 7)		—			(3,200	)		—			(3,200	)
Acquisition of short-term investments		(161,863	)		(335,728	)		(335,768	)		(623,486	)
Proceeds on sale and maturity of short-term investments		156,322			321,431			408,171			582,149

Net cash used in investing activities		(441,420	)		(120,127	)		(674,631	)		(313,145	)

Effect of foreign exchange loss on cash and cash equivalents		(11,679	)		(30	)		(11,679	)		(30	)

Net increase (decrease) in cash and cash equivalents for the period		146,857			135,659			(53,324	)		170,759
Cash and cash equivalents, beginning of period		984,217			712,244			1,184,398			677,144

Cash and cash equivalents, end of period	$	1,131,074		$	847,903		$	1,131,074		$	847,903

See notes to the consolidated financial statements.

Research In Motion Limited
Notes to the Consolidated Financial Statements
(unaudited)
In thousands of United States dollars, except share and per share data and except as otherwise indicated

1.		BASIS OF PRESENTATION

		These interim consolidated financial statements have been prepared by management in accordance with United States generally accepted accounting principles (“U.S. GAAP”). They do not include all of the disclosures required by U.S. GAAP for annual financial statements and should be read in conjunction with Research In Motion’s (“RIM” or the “Company”) audited consolidated financial statements (the “financial statements”) for the year ended March 1, 2008, which have been prepared in accordance with U.S. GAAP. In the opinion of management, all normal recurring adjustments considered necessary for fair presentation have been included in these financial statements. Operating results for the three and six months ended August 30, 2008 are not necessarily indicative of the results that may be expected for the full year ending February 28, 2009.

		The Company’s fiscal year end date is the 52 or 53 weeks ending on the last Saturday of February, or the first Saturday of March. The fiscal years ending February 28, 2009 and March 1, 2008 comprise 52 weeks.

2.		ACCOUNTING PRONOUNCEMENTS

(a)		Adoption of Accounting Pronouncements

		The Fair Value Option for Financial Assets and Financial Liabilities — Including an amendment of SFAS 115

		In February 2007, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards (“SFAS”) 159 The Fair Value Option for Financial Assets and Financial Liabilities — Including an amendment of SFAS 115. SFAS 159 permits entities to measure many financial instruments and certain other items at fair value that currently are not required to be measured at fair value. If elected, unrealized gains or losses on certain items will be reported in earnings at each subsequent reporting period. SFAS 159 is effective for the Company as of the beginning of its 2009 fiscal year. The Company did not adopt the fair value measurement provisions of this statement.

		Fair Value Measurements

		In September 2006, the FASB issued SFAS 157 Fair Value Measurements. SFAS 157 clarifies the definition of fair value, establishes a framework for measurement of fair value and expands disclosure about fair value measurements. SFAS 157 is effective for fiscal years beginning after November 15, 2007 except as amended by FSP SFAS 157-1 and FSP SFAS 157-2 which is effective for fiscal years beginning after November 15, 2008. FSP SFAS 157-1 and FSP SFAS 157-2 allows partial adoption relating to fair value measurements for non-financial assets and liabilities that are not measured at fair value on a recurring basis. Effective March 2, 2008, the Company adopted SFAS 157, except as it applies to the non-financial assets and non-financial liabilities subject to FSP SFAS 157-2 with the impact described in note 3. The Company will adopt the remaining portion of SFAS 157 in the first quarter of fiscal 2010 and does not expect the adoption to have material impact on the consolidated financial statements and the accompanying notes.

(b)		RECENTLY ISSUED PRONOUNCEMENTS

		Business Combinations

		In December 2007, the FASB issued SFAS 141(R) Business Combinations. SFAS 141(R) replaces SFAS 141 Business Combinations. SFAS 141(R) is broader in scope than SFAS 141 which applied only to business combinations in which control was obtained by transferring consideration. SFAS 141(R) applies to all transactions and other events in which one entity obtains control over one or more other businesses. SFAS 141(R) is effective for fiscal years beginning after December 15, 2008 and the Company will adopt the standard

Research In Motion Limited
Notes to the Consolidated Financial Statements
(unaudited)
In thousands of United States dollars, except share and per share data and except as otherwise indicated

		in the first quarter of fiscal 2010 and its effects on future periods will depend on the nature and significance of any business combinations subject to this statement.

		Noncontrolling Interests in Consolidated Financial Statements — an amendment of ARB 51

		In December 2007, the FASB issued SFAS 160 Noncontrolling Interests in Consolidated Financial Statements — an amendment of ARB 51. SFAS 160 requires that the noncontrolling interest in the equity of a subsidiary be accounted for and reported as equity, provides revised guidance on the treatment of net income and losses attributable to the noncontrolling interest and changes in ownership interests in a subsidiary and requires additional disclosures that identify and distinguish between the interests of the controlling and noncontrolling owners. Pursuant to the transition provisions of SFAS 160, the Company will adopt the standard in the first quarter of fiscal 2010 via retrospective application of the presentation and disclosure requirements. The Company does not expect the adoption of SFAS 160 to have a material effect on the consolidated financial statements; however, the effects on future periods will depend on the nature and significance of any noncontrolling interests subject to this statement.

		Disclosures about Derivative Instruments and Hedging Activities — an amendment of FASB Statement No. 133

		In March 2008, the FASB issued SFAS 161 Disclosures about Derivative Instruments and Hedging Activities — an amendment of FASB Statement No. 133. SFAS 161 enhances the current disclosure framework in SFAS 133 and requires enhanced disclosures about why an entity uses derivative instruments, how derivative instruments are accounted for under SFAS 133 and how derivative instruments and related hedged items affect an entity’s financial position, financial performance and cash flows. SFAS 161 is effective for fiscal years beginning after November 15, 2008 and the Company is required to adopt the standard in the first quarter of fiscal 2010. As a result of the implementation of SFAS 161 in the first quarter of fiscal 2010, the Company will change its disclosure, but does not expect the adoption to have a material effect on the Company’s financial condition or operating results.

		Determination of the Useful Life of Intangible Assets

		In April 2008, the FASB issued FSP SFAS 142-3 Determination of the Useful Life of Intangible Assets. FSP SFAS 142-3 amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of the recognized intangible asset under SFAS 142, Goodwill and Other Intangible Assets. The intent of the guidance is to improve the consistency between the useful life of a recognized intangible asset under SFAS 142 and the period of expected cash flows used to measure the fair value of the asset under SFAS 141(R). For a recognized intangible asset, an entity will be required to disclose information that enables users of the financial statements to assess the extent to which expected future cash flows associated with the asset are affected by the entity’s intent and/or ability to renew or extend the arrangement. FSP SFAS 142-3 is effective for fiscal years beginning after December 15, 2008. The Company will adopt the standard in the first quarter of fiscal 2010 and is currently evaluating the impact this adoption will have on its consolidated financial statements.

		The Hierarchy of Generally Accepted Principles

		In May 2008, the FASB issued SFAS 162 The Hierarchy of Generally Accepted Principles. SFAS 162 outlines the order of authority for the sources of accounting principles. SFAS 162 is effective 60 days following the SEC’s approval of the Public Company Accounting Oversight Board amendments to AU Section 411, The Meaning of Present Fairly in Conformity With Generally Accepted Accounting Principles. The Company does not expect SFAS 162 to have an impact on the consolidated financial statements and the accompanying notes.

Research In Motion Limited
Notes to the Consolidated Financial Statements
(unaudited)
In thousands of United States dollars, except share and per share data and except as otherwise indicated

3.		CASH AND CASH EQUIVALENTS, SHORT-TERM INVESTMENTS AND LONG-TERM INVESTMENTS

		Cash consists of demand deposits held at various financial institutions. Cash equivalents are highly liquid investments with maturities of three months or less at the date of acquisition. Short-term investments consist of liquid investments with remaining maturities of less than one year and any longer-maturity securities the Company expects to hold for less than one year. Investments with maturities in excess of one year are classified as long-term investments.

		All cash equivalents and investments, other than cost method investments of $10.5 million and $0.5 million accounted for under the equity method, are categorized as available-for-sale and are carried at fair value with unrealized gains and losses recorded through other comprehensive income. In the event of a decline in value which is other than temporary, the investment is written down to fair value with a charge to earnings.

		Fair Value Measurements

		SFAS 157 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. SFAS 157 establishes a three-tier value hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value:

	•		Level 1 — Unadjusted quoted prices at the measurement date for identical assets or liabilities in active markets.

	•		Level 2 — Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

	•		Level 3 — Significant unobservable inputs which are supported by little or no market activity.

		The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

		The following table presents our assets and liabilities that are measured at fair value on a recurring basis:

As at August 30, 2008

Level 1

Level 2

Level 3

Total

Assets

Available-for-sale investments

—

2,108,548

60,181

2,168,729

Derivative instruments

—

37,178

—

37,178

Total Assets

—

2,145,726

60,181

2,205,907

Liabilities

Derivative instruments

—

15,940

—

15,940

Mortgages

—

7,031

—

7,031

Total Liabilities

—

22,971

—

22,971

Research In Motion Limited
Notes to the Consolidated Financial Statements
(unaudited)
In thousands of United States dollars, except share and per share data and except as otherwise indicated

CAPITAL ASSETS

Capital assets are comprised of the following:

As at August 30, 2008

Accumulated

Net book

Cost

amortization

value

Land

71,036

—

71,036

Buildings, leaseholds and other

474,043

56,228

417,815

BlackBerry operations and other information technology

609,141

268,685

340,456

Manufacturing equipment

185,911

112,281

73,630

Furniture and fixtures

179,035

76,314

102,721

1,519,166

513,508

1,005,658


	As at March 1, 2008
			Accumulated		Net book
	Cost		amortization		value

Land	$	54,085	$	—	$	54,085
Buildings, leaseholds and other		327,645		46,708		280,937
BlackBerry operations and other information technology		436,681		225,061		211,620
Manufacturing equipment		167,618		95,448		72,170
Furniture and fixtures		150,911		63,768		87,143


	$	1,136,940	$	430,985	$	705,955

INTANGIBLE ASSETS

Intangible assets comprise the following:

As at August 30, 2008

Accumulated

Net book

Cost

amortization

value

Acquired technology

59,674

34,745

24,929

Licenses

207,162

24,741

182,421

Patents

706,410

43,987

662,423

973,246

103,473

869,773

Research In Motion Limited
Notes to the Consolidated Financial Statements
(unaudited)

In thousands of United States dollars, except share and per share data and except as otherwise indicated


	As at March 1, 2008
			Accumulated		Net book
	Cost		amortization		value

Acquired technology	$	59,674	$	29,749	$	29,925
Licenses		94,444		32,410		62,034
Patents		399,232		21,203		378,029

	$	553,350	$	83,362	$	469,988

		During the three months ended August 30, 2008, the additions to intangible assets primarily consisted of agreements reached during the quarter. The Company acquired patents for 130 million Euros, or $202 million. In addition, during the three months ended August 30, 2008, the Company entered into agreements with third parties totalling approximately $130 million for the use of intellectual property, software, messaging services and other BlackBerry related features.

		During the first quarter of fiscal 2009, the additions to intangible assets primarily consisted of 2 separate patent assignment and license transactions that were entered into on March 31, 2008. One agreement was to acquire a portfolio of patents for GSM technologies for a purchase price of 35 million Euros, or $55 million. The other agreement was to acquire a portfolio of patents relating to wireless communication technologies for a purchase price of $12 million.

		The Intangible Assets are amortized over their estimated useful lives.

7.		BUSINESS ACQUISITIONS

		During the second quarter of fiscal 2008, the Company purchased 100% of the common shares of a company whose proprietary software will be incorporated into the Company’s software. The transaction closed on August 22, 2007. The operating results were not material to the Company’s consolidated operating results in the second quarter of fiscal 2008. The following table summarizes the prior year’s fair value allocations of the purchase price of the assets acquired and liabilities assumed:


	For the three months ended				For the six months ended

	August 30,		September 1,		August 30,		September 1,
	2008		2007		2008		2007

Assets purchased
Acquired technology	$	—	$	1,035	$	—	$	1,035
Goodwill		—		2,506		—		2,506

		—		3,541		—		3,541
Deferred income tax liability		—		341		—		341

Net non-cash assets acquired		—		3,200		—		3,200
Cash acquired		—		1		—		1

Net assets acquired	$	—	$	3,201	$	—	$	3,201

Research In Motion Limited
Notes to the Consolidated Financial Statements
(unaudited)

In thousands of United States dollars, except share and per share data and except as otherwise indicated

		The acquisition was accounted for using the purchase method whereby identifiable assets acquired and liabilities assumed were recorded at their estimated fair value as of the date of acquisition. The excess of the purchase price over such fair value was recorded as goodwill. Acquired technology includes current and core technology, and is amortized over periods ranging from two to five years.

8.		PRODUCT WARRANTY

		The Company estimates its warranty costs at the time of revenue recognition based on historical warranty claims experience, expectations of future return rates and unit warranty repair costs. The expense is recorded in Cost of sales. The warranty accrual balance is reviewed quarterly to establish that it materially reflects the remaining obligation, based on the anticipated future expenditures over the balance of the obligation period. Adjustments are made when the actual warranty claim experience differs from these estimates.

		The change in the Company’s warranty expense and actual warranty experience for the six months ended August 30, 2008 as well as the accrued warranty obligations as at August 30, 2008 are set forth in the following table:


Accrued warranty obligations as at March 1, 2008	$	84,548
Warranty costs incurred for the six months ended August 30, 2008		(52,938	)
Warranty provision for the six months ended August 30, 2008		96,995
Adjustments for changes in estimate for the six months ended August 30, 2008		(12,799	)

Accrued warranty obligations as at August 30, 2008	$	115,806

9.		INCOME TAXES

		For the first six months of fiscal 2009, the Company’s net income tax expense was $406.8 million or a net effective income tax rate of 29.4% compared to a net income tax expense of $201.3 million or a net effective income tax rate of 28.3% in the first six months of fiscal 2008.

		The Company has not recorded a valuation allowance (September 1, 2007 — $nil) against its deferred income tax assets.

		The Company has not provided for Canadian income taxes or foreign withholding taxes that would apply on the distribution of the earnings of its non-Canadian subsidiaries, as these earnings are intended to be reinvested indefinitely by these subsidiaries.

		The Company’s total unrecognized tax benefits and the amount that, if recognized, would affect the Company’s effective tax rate were $175.4 million and $165.5 million as at March 1, 2008 and August 30, 2008 respectively. The decrease in unrecognized tax benefits is primarily due to changes in measurement of existing uncertain tax positions related to the depreciation of the Canadian dollar versus the U.S. dollar.

		A summary of open tax years by major jurisdiction is presented below:

Research In Motion Limited
Notes to the Consolidated Financial Statements
(unaudited)

In thousands of United States dollars, except share and per share data and except as otherwise indicated


Jurisdiction
Canada (1)		Fiscal 2001 - 2008
United States (1)		Fiscal 2003 - 2008
United Kingdom		Fiscal 2002 - 2008


(1)		Includes federal as well as provincial and state jurisdictions, as applicable.

		The Company is subject to ongoing examination by tax authorities in the jurisdictions in which it operates. The Company regularly assesses the status of these examinations and the potential for adverse outcomes to determine the adequacy of the provision for income taxes. Specifically, the Canada Revenue Agency (“CRA”) is currently examining the Company’s fiscal 2001-2005 Canadian corporate tax filings. The Company expects the CRA to conclude its examination in fiscal 2009. The CRA has also given the Company notice that it will begin examining the Company’s fiscal 2006, fiscal 2007 and fiscal 2008 Canadian corporate tax filings in fiscal 2009.

		The Company has other non-Canadian income tax audits pending. While the final resolution of these audits is uncertain, the Company believes the ultimate resolution of these audits will not have a material adverse effect on its consolidated financial position, liquidity or results of operations. The Company believes it is reasonably possible that approximately $8.3 million of its gross unrecognized tax benefits will decrease within twelve months of August 30, 2008.

		The Company recognizes interest and penalties related to unrecognized tax benefits as interest expense that is netted and reported within Investment income. The amount of interest and penalties accrued as at August 30, 2008 and March 1, 2008 is approximately $5.6 million and $4.4 million, respectively.

10.		STOCK-BASED COMPENSATION

		Stock Option Plan

		The Company has an incentive stock option plan for directors, officers and employees of the Company and its subsidiaries. Options granted under the plan generally vest over a period of five years and are generally exercisable over a period of six years to a maximum of ten years from the grant date. The Company issues new shares to satisfy stock option exercises. There are 8.3 million stock options vested and not exercised as at August 30, 2008. There are 13.1 million stock options available for future grants under the stock option plan.

		The Company records stock compensation expense under SFAS 123(R) resulting in a charge to earnings and a credit to paid-in capital of $19.6 million in the first six months of fiscal 2009 ($14.3 million – first six months of fiscal 2008).

		As a result of measures implemented by the Company’s Board of Directors following the Company’s Review (as more fully discussed in note 15(c)), certain outstanding stock options held by employees, directors and officers of the Company have been repriced to reflect a higher exercise price. Repriced options in fiscal 2009 include 10 stock option grants to 9 individuals in respect of options to acquire 428,100 common shares (fiscal 2008 — 87 stock option grants to 62 individuals in respect of options to acquire 9,426,000 common shares). In addition, during fiscal 2008, the Company received $8.7 million in restitution, inclusive of interest, related to incorrectly priced options that were exercised prior to fiscal 2008. As the repricing of options reflects an increase in the exercise price of the option, there is no incremental stock compensation expense related to these repricing events.

		As previously disclosed, the Company’s Co-Chief Executive Officers voluntarily offered to assist the Company in defraying costs incurred in connection with the Review and the Restatement by contributing CAD $10.0 million

Research In Motion Limited
Notes to the Consolidated Financial Statements
(unaudited)

In thousands of United States dollars, except share and per share data and except as otherwise indicated

(CAD $5.0 million by each Co-CEO) of those costs. As part of a settlement agreement reached with a pension fund, an additional CAD $5.0 million (CAD $2.5 million by each Co-CEO) was received in the third quarter of fiscal 2008. The Company received these voluntary payments in the second and third quarters of fiscal 2008 and were recorded net of income taxes as increases to paid-in capital.

A summary of option activity since March 1, 2008 is shown below.

Options Outstanding

Weighted

Average

Remaining

Aggregate

Number

Exercise Price

Contractual

Intrinsic

(in 000’s)

per Option

Life in Years

Value

Balance as at March 1, 2008

16,466

28.66

Granted during the period

—

Exercised during the period

(2,718

)

8.13

Forfeited during the period

(39

)

99.02

Balance as at August 30, 2008

13,709

30.54

2.99

1,248,357

Vested and expected to vest at August 30, 2008

13,349

29.75

2.95

1,226,061

Exercisable at August 30, 2008

8,293

11.47

1.96

913,268

The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the aggregate difference between the closing stock price of the Company’s common stock on August 30, 2008 and the exercise price for in-the-money options) that would have been received by the option holders if all in-the-money options had been exercised on August 30, 2008. The intrinsic value of stock options exercised during the first six months of fiscal 2009, calculated using the average market price during the period, was approximately $117 per share.

Research In Motion Limited
Notes to the Consolidated Financial Statements
(unaudited)

In thousands of United States dollars, except share and per share data and except as otherwise indicated

A summary of unvested stock options since March 1, 2008 is shown below:


	Options Outstanding
				Weighted
				Average Grant
				Date Fair
	Number			Value Per
	(in 000’s)			Option

Balance as at March 1, 2008		7,257		$	22.89

Granted during the period		—			—
Vested during the period		(1,802	)		5.61
Forfeited during the period		(39	)		48.61


Balance as at August 30, 2008		5,416		$	28.45

As of August 30, 2008, there was $113.9 million of unrecognized stock-based compensation expense related to unvested stock options which will be expensed over the vesting period, which, on a weighted-average basis, results in a period of approximately 2.3 years. The total fair value of stock options vested during the six months ended August 30, 2008 was $10.1 million.

Cash received from stock option exercises for the six months ended August 30, 2008 was $21.9 million (September 1, 2007 — $23.2 million). Tax benefits realized by the Company related to these exercises were $12.1 million and $4.5 million for the six months ended August 30, 2008 and September 1, 2007 respectively.

There were no stock option grants in the first two quarters of fiscal 2009. In the first two quarters of fiscal 2008 there were 678,000 stock options granted and the weighted average fair value of these grants was calculated using the Black-Scholes Merton (“BSM”) option-pricing model with the following assumptions:


	For the three			For the six
	months ended			months ended

	September 1,			September 1,
	2007			2007

Weighted average grant date fair value of stock options granted during the periods	$	30.48		$	23.13

Assumptions:
Risk free interest rates		4.7	%		4.7	%
Expected life in years		4.4			4.4
Expected dividend yield		0	%		0	%
Volatility		47	%		41% - 47	%

The Company has not paid a dividend in the previous eleven fiscal years and has no current expectation of paying cash dividends on its common shares. The risk-free interest rates utilized during the life of the stock options are based on a U.S. Treasury security for an equivalent period. The Company estimates the volatility of its common

Research In Motion Limited
Notes to the Consolidated Financial Statements
(unaudited)

In thousands of United States dollars, except share and per share data and except as otherwise indicated

		shares at the date of grant based on a combination of the implied volatility of publicly traded options on its common shares, and historical volatility, as the Company believes that this is a better indicator of expected volatility going forward. The expected life of stock options granted under the plan is based on historical exercise patterns, which the Company believes are representative of future exercise patterns.

		Restricted Share Unit Plan (the “RSU Plan”)

		The Company has a RSU Plan under which eligible participants include any officer or employee of the Company or its subsidiaries. Restricted Share Units (“RSUs”) are redeemed for either common shares issued by the Company, common shares purchased on the open market or the cash equivalent on the vesting dates established by the Company. The Company has classified the RSUs as equity instruments as the Company has the ability and intent on settling the awards in shares. The compensation expense is calculated based on the fair value of the award as defined in SFAS 123(R) and the amount is recognized over the vesting period of the RSU.

		The Company recorded compensation expense with respect to RSUs in the six months ended August 30, 2008 in the amount of $0.1 million (September 1, 2007 — $nil). The Company did not issue any RSUs in the three month period ended August 30, 2008 and there were 5,000 RSUs outstanding as at August 30, 2008 (March 1, 2008 — 5,000).

		Deferred Share Unit Plan (the “DSU Plan”)

		The Company has a DSU Plan under which each independent director will be credited with Deferred Share Units (“DSUs”) in satisfaction of all or a portion of the cash fees otherwise payable to them for serving as a director of the Company. Grants under the DSU plan replace the stock option awards that were historically granted to independent members of the Board of Directors. At a minimum, 50% of each independent director’s annual retainer will be satisfied in the form of DSUs. The director can elect to receive the remaining 50% in any combination of cash and DSUs. Within a specified period after such a director ceases to be a director, DSUs will be redeemed for cash with the redemption value of each DSU equal to the weighted average trading price of the Company’s shares over the five trading days preceding the redemption date. Alternatively, subject to receipt of shareholder approval, the Company may elect to redeem DSUs by way of shares purchased on the open market or issued by the Company.

		DSUs are accounted for as liability-classified awards under the provisions of SFAS 123(R). These awards are measured at their fair value on the date of issuance, and remeasured at each reporting period, until settlement. DSUs are awarded on a quarterly basis.

		The Company issued 1,645 DSUs in the three month period ended August 30, 2008. There are 12,119 DSUs outstanding at August 30, 2008 (March 1, 2008 – 8,926). The Company had a liability of $1.6 million in relation to issued DSUs as at August 30, 2008 (March 1, 2008 — $1.0 million).

11.		CAPITAL STOCK

		The Company declared a 3-for-1 stock split of the Company’s outstanding common shares on June 28, 2007. The stock split was implemented by way of a stock dividend. Shareholders received two common shares of the Company for each common share held. The stock dividend was paid on August 20, 2007 to common shareholders of record at the close of business on August 17, 2007.

Research In Motion Limited
Notes to the Consolidated Financial Statements
(unaudited)

In thousands of United States dollars, except share and per share data and except as otherwise indicated


	Shares
	Outstanding		Amount

	(000’s)
Common shares outstanding as at March 1, 2008		562,652	$	2,169,856

Exercise of stock options		2,718		21,927
Transfers to capital stock resulting from stock option exercises		—		8,030

Common shares outstanding as at August 30, 2008		565,370	$	2,199,813

		The Company had 565.5 million voting common shares outstanding, 13.6 million stock options to purchase voting common shares outstanding, 5,000 restricted share units outstanding and 12,119 deferred share units outstanding as at September 24, 2008.

12.		EARNINGS PER SHARE

		As described in note 11, a three-for-one stock split was implemented by way of a stock dividend to shareholders of record at the close of business on August 17, 2007.

		The following table sets forth the computation of basic and diluted earnings per share:


	For the three months ended				For the six months ended

	August 30,		September 1,		August 30,		September 1,
	2008		2007		2008		2007

Net income for basic and diluted earnings per share available to common stockholders	$	495,546	$	287,685	$	978,061	$	510,905


Weighted-average number of shares outstanding (000’s) — basic		564,899		558,991		564,222		558,422

Effect of dilutive securities:
Stock options (000’s)		9,932		13,174		10,516		12,957


Weighted-average number of shares and assumed conversions (000’s) — diluted		574,831		572,165		574,738		571,379


Earnings per share — reported
Basic	$	0.88	$	0.51	$	1.73	$	0.91
Diluted	$	0.86	$	0.50	$	1.70	$	0.89

Research In Motion Limited
Notes to the Consolidated Financial Statements
(unaudited)

In thousands of United States dollars, except share and per share data and except as otherwise indicated

13.		COMPREHENSIVE INCOME

		The components of comprehensive income are shown in the following tables:


	For the three months ended
	August 30,			September 1,
	2008			2007

Net income	$	495,546		$	287,685
Net change in unrealized gains (losses) on available-for-sale investments		(701	)		5,740
Net change in derivative fair value during the period, net of income tax recovery of $2,767 (September 1, 2007 - income tax expense of $542)		(2,023	)		1,077
Amounts reclassified to earnings during the period, net of income tax recovery of $655 (September 1, 2007 - income tax expense of $1,388)		1,345			(2,757	)

Comprehensive income	$	494,167		$	291,745


	For the six months ended
	August 30,			September 1,
	2008			2007

Net income	$	978,061		$	510,905
Net change in unrealized gains (losses) on available-for-sale investments		(8,742	)		3,984
Net change in derivative fair value during the period, net of income tax recovery of $6,701 (September 1, 2007 - income tax expense of $13,379)		(9,933	)		25,525
Amounts reclassified to earnings during the period, net of income tax recovery of $943 (September 1, 2007 - income tax expense of $1,529)		1,931			(3,026	)

Comprehensive income	$	961,317		$	537,388

Research In Motion Limited
Notes to the Consolidated Financial Statements
(unaudited)

In thousands of United States dollars, except share and per share data and except as otherwise indicated

The components of accumulated other comprehensive income are as follows:


	As at
	August 30,			March 1,
	2008			2008

Accumulated net unrealized gains (losses) on available-for-sale investments	$	(1,669	)	$	7,073
Accumulated net unrealized gains on derivative instruments		15,208			23,210

Total accumulated other comprehensive income	$	13,539		$	30,283

		The fair value of derivative instruments of $21.3 million (March 1, 2008 – $27.7 million) is included in Other current assets $37.2 million (March 1, 2008 — $47.5 million) and Accrued liabilities $15.9 million (March 1, 2008 — $19.8 million) on the Consolidated Balance Sheets.

14.		FOREIGN EXCHANGE GAINS AND LOSSES

		Selling, marketing and administration expense for the first six months of fiscal 2009 includes $5.7 million with respect to a foreign exchange loss (fiscal 2008 — foreign exchange loss of $0.3 million). The Company is exposed to foreign exchange fluctuations as a result of transactions in currencies other than its U.S. dollar functional currency.

15.		COMMITMENTS AND CONTINGENCIES

(a)		Credit Facility

		The Company has a $100 million Demand Credit Facility (the “Facility”) to support and secure operating and financing requirements. As at August 30, 2008, the Company has utilized $18.0 million of the Facility for outstanding letters of credit and $82.0 million of the Facility is unused. The Company has pledged specific investments as security for this Facility.

		The Company has an additional $2.4 million Demand Credit Facility (the “Additional Facility”). The Additional Facility is used to support and secure other operating and financing requirements. As at August 30, 2008, the Company has utilized $1.4 million of the Additional Facility for outstanding letters of credit and $1.0 million of this facility is unused.

		The Company’s long-term debt of $6.9 million as at August 30, 2008 consisted of mortgages with interest rates ranging between 6.88% and 7.90%, against which certain land and building are pledged as collateral. All mortgage loans are denominated in Canadian dollars and mature on March 1, 2009.

(b)		Litigation

		By letter dated February 3, 2005 (the “Letter”), TMO-DG delivered to RIM-UK a notice of a claim for indemnity in relation to litigation in Düsseldorf, Germany in which the plaintiff, Inpro, brought action against TMO-DG (the “Litigation”) for infringement of the B1 Patent. The Company joined the Litigation as an intervening party in support of the defendant TMO-DG. The Company also filed an invalidity action in the patent court in Munich Germany. On January 27, 2006, the Munich court declared the B1 Patent invalid. Inpro has appealed the Munich

Research In Motion Limited
Notes to the Consolidated Financial Statements
(unaudited)

In thousands of United States dollars, except share and per share data and except as otherwise indicated

court’s decision and an appeal will not be heard until some time in 2009. On March 21, 2006, the Düsseldorf court stayed the infringement action until a final decision on validity has been made. At this time, the likelihood of damages or recoveries and the ultimate amounts, if any, with respect to the Litigation (or any related litigation) is not determinable. Accordingly, no amount has been recorded in these consolidated financial statements as at August 30, 2008.

On May 1, 2006, Visto Corporation (“Visto”) filed a complaint in the United States District Court for the Eastern District of Texas, Marshall Division (the “Marshall District Court”), against the Company alleging infringement of four patents (United States Patent No. 6,023,708, 6,085,192, 6,151,606 and 6,708,221) and seeking an injunction and monetary damages. On May 1, 2006, RIM filed a declaratory judgment complaint against Visto in the United States District Court for the Northern District of Texas (Dallas Division) (the “Dallas District Court”) alleging that the Visto 6,085,192, 6,151,606, and 6,708,221 patents are invalid and/or not infringed. RIM filed an amended declaratory judgment complaint in the Dallas District Court on May 12, 2006 adding claims against Visto for infringement of United States Patent No. 6,389,457 and 6,219,694, which are owned by RIM. Visto responded to RIM’s amended complaint on July 5, 2006 by filing declaratory judgment claims in the Dallas District Court that the RIM 6,389,457 and 6,219,694 patents are invalid and/or not infringed. On June 16, 2006, RIM filed a declaratory judgment complaint against Visto in the Dallas District Court alleging that Patent No. 7,039,679 is invalid and/or not infringed. The declaratory judgment filed by RIM in the Dallas District Court against Visto’s United States Patents No. 6,085,192, 6,151,606 and 6,708,221 has been dismissed. This will proceed as part of the Visto suit in the Eastern District of Texas. The RIM complaint filed in the Dallas District Court against Visto for infringement of RIM’s United States Patent No. 6,389,457 and 6,219,694 was consolidated with the declaratory judgment action filed by RIM against Visto’s patent No. 7,039,679 into one case. RIM’s complaint filed against Visto for infringement of RIM’s United States Patent No. 6,389,457 and 6,219,694 (consolidated with the declaratory judgment filed by RIM against Visto patent No, 7,039,679) was dismissed to allow RIM to re-file those complaints in the Marshall District Court. RIM’s motion to amend its response to add an infringement claim under the RIM 6,389,457 and 6,219,694 patents, along with a declaratory judgment complaint against Visto patent 7,039,679, to the Marshall District Court action was granted on March 6, 2007. RIM’s motion to transfer Visto’s declaratory judgment counterclaims filed on July 5, 2006 (against the RIM Patents, US 6,389,457 and 6,219,694) from the Northern District of Texas Court to the Eastern District of Texas Court was granted on May 17, 2007. All of RIM’s and Visto’s claims and counterclaims filed in the Northern District of Texas will now be heard in the Eastern District of Texas case. As of September 21, 2007, the United States Patent & Trademark Office (“USPTO”) has issued office actions in re-examination proceedings, rejecting all claims of each of the five patents asserted against RIM in the patent infringement action filed by Visto in the Eastern District of Texas against RIM on April 28, 2006. On March 14, 2008, the USPTO issued final office actions rejecting all the claims of the 7,039,679, 6,151,606 patents and the majority of the claims of the 6,085,192 patent. A claim construction hearing was held on November 1, 2007, in the Eastern District of Texas action. The Magistrate assigned to handle the claim construction hearing granted leave to both RIM and Visto to file supplemental briefs based on Visto’s response to the re-examination proceedings before the USPTO. On April 4, 2008, RIM filed a motion to stay the case pending final disposition of the re-examination proceedings. On July 2, 2008, the Court granted RIM’s motion to stay the entire case pending final disposition of the re-examination proceedings involving Visto’s patents-in-suit. The USPTO issued Notices of Intent to Issue Ex Parte Re-examination Certificates in the Visto ‘679 and ‘606 re-examinations on August 28, 2008 indicating intent to issue some claims in these two re-examination proceedings. Final office actions were issued in the ‘708 and ‘221 re-examinations on July 28, 2008 and August 21, 2008 respectively, rejecting all claims in their original format and indicating that some amended claims and some newly added claims may be patentable. On September 24, 2008 a final office action was issued in the ‘192 re-examination rejecting all claims in their original format and indicating that some amended claims and some newly added claims may be patentable. At this time, the likelihood of damages or recoveries and the ultimate amounts, if any, with respect to the litigation (or any related litigation) is not determinable. Accordingly, no amount has been recorded in these consolidated financial statements as at August 30, 2008.

Research In Motion Limited
Notes to the Consolidated Financial Statements
(unaudited)

In thousands of United States dollars, except share and per share data and except as otherwise indicated

On August 28, 2007, Visto filed a new complaint in the United States Court for the Eastern District of Texas, Marshall Division, against the Company alleging infringement of two United States Patents (United States Patent No. 5,857,201 and 6,324,542). On October 18, 2007, RIM filed its answer to Visto’s complaint in the Eastern District of Texas. On January 8, 2008, Visto filed an amended complaint adding United States Patent No. 5,968,131. On January 29, 2008, RIM filed an answer to the amended complaint. On June 16, 2008, Visto filed a motion to further amend its complaint to include two new United States Patents No. 7,363,349 and 7,373,571, and RIM filed an opposition to this motion. Proceedings are ongoing with jury selection set for August 2, 2010. At this time, the likelihood of damages or recoveries and the ultimate amounts, if any, with respect to the litigation (or any related litigation) is not determinable. Accordingly, no amount has been recorded in these consolidated financial statements as at August 30, 2008.

On June 15, 2007, RIM filed in the United States District Court for the Northern District of California a complaint against Visto for infringement of U.S. Patent No. 5,889,839, which is owned by RIM. On July 9, 2007, Visto filed its answer to RIM’s complaint asserting defences based on non-infringement, invalidity and unenforceability. On August 29, 2007, Visto filed a motion to amend Visto’s answer and add counterclaims of infringement by RIM of United States patents No. 7,255,231 and 7,228,383 in the Northern District of California case. On February 28, 2008, the California Court granted RIM’s request to stay Visto’s counterclaims of infringement of the 7,255,231 and 7,228,383 patents pending their re-examination by the USPTO. On June 9, 2008, the California Court granted Visto’s request to stay RIM’s claims of infringement of the 5,889,839 patent pending their re-examination by the USPTO. At this time, the likelihood of damages or recoveries and the ultimate amounts, if any, with respect to the litigation (or any related litigation) is not determinable. Accordingly, no amount has been recorded in these consolidated financial statements as at August 30, 2008.

On July 5, 2006, RIM commenced an action in the Federal Court of Canada against Visto for infringement of RIM’s Canadian Patent No. 2,245,157, 2,356,073 and 2,356,046. On June 1, 2007, RIM commenced an action in the Ontario Superior Court of Justice against Visto Corporation and two of its executive officers. The action seeks damages for conspiracy, for false and misleading statements in contravention of the Competition Act, for contravention of the Trade-marks Act, for injurious falsehood and for unlawful interference with RIM’s economic relations. On May 21, 2008, the Federal Court issued a judgment finding Visto to have infringed on the three RIM patents in suit in Canada. Proceedings are currently pending to determine the damages for Visto’s infringement of RIM’s patents.

On October 30, 2006, RIM commenced an action against Visto in the High Court of Justice (Chancery Division, Patents Court) in London, England. The action sought a declaration that Visto’s U.K. patent [EP (UK) 0,996,905] is invalid and should be revoked. On December 5, 2006, RIM requested that the court decide that RIM’s actions in the U.K. do not infringe the same patent. RIM sent to Visto a non-confidential Product and Process Description (“PPD”) providing a technical description of RIM’s products offered in the U.K. On February 2, 2007, Visto acknowledged that RIM’s products described in the non-confidential PPD do not infringe Visto’s U.K. patent [EP (UK) 0,996,905]. However, on February 2, 2007 Visto also filed a defence and counterclaim alleging that another Company product allegedly not in the non-confidential PPD, the Mail Connector product, does infringe Visto’s U.K. patent [EP (UK) 0,996,905]. Visto also alleged that the action filed by the Company in Italy (see below) was filed in bad faith or with gross negligence and that filing the proceedings in Italy amounts to the tort of abuse of process. Visto further has asked the Court to order revocation of the Company’s U.K. patents [EP (UK) 1 096 727] and [EP (UK) 1 126 662]. The Company presented a jurisdictional challenge to Visto’s abuse of process claims related to RIM’s filing of the action in Italy on the basis that the UK Court did not have jurisdiction in the UK for the abuse of process claims. The Court decided in RIM’s favour in a hearing held on April 3, 2007 on RIM’s jurisdictional challenge, and Visto appealed the Court’s decision. On April 13, 2007, in view of the fact that Visto acknowledged that RIM’s products described in the PPD do not infringe the Visto UK patent, RIM served a notice of discontinuance that it was withdrawing its request that the Court decide that the RIM products described in the PPD do not infringe the Visto UK patent. A hearing was held in the UK Court on

Research In Motion Limited
Notes to the Consolidated Financial Statements
(unaudited)

In thousands of United States dollars, except share and per share data and except as otherwise indicated

August 7, 2007 on an application filed by Visto requesting a stay of the litigation. The UK Court denied Visto’s request for a stay. The trial on the invalidity and non-infringement of Visto’s patents proceeded in the UK Court on January 23, 2008. On February 28, 2008, the UK Court rendered a decision wherein it held that Visto’s ‘905 UK patent was invalid for lack of inventive step and not being patentable subject matter. On March 6, 2008, the English Court of Appeal also denied Visto’s appeal in relation to the abuse of process claims. Proceedings are currently pending to determine RIM’s entitlement to costs.

On December 27, 2006, RIM commenced an action in Italy in the Court of Milan, Specialized Division in Industrial and Intellectual Property. RIM is requesting that the court declare the Italian portion of Visto’s patent No. EP0996905 invalid and declare that RIM’s activities in Belgium, France, Italy, Germany, the Netherlands and Spain do not infringe patent EP0996905. On May 28, 2007, Visto filed a request with the Court of Milan that the Court hold a hearing on the issue of whether the Court has jurisdiction to decide that RIM’s activities in Belgium, France, Italy, Germany, the Netherlands and Spain do not infringe patent EP 0996905. On April 18, 2008, the Court of Milan, special division for industrial and intellectual property filed a partial decision (no. 5111/2008) declaring its own lack of jurisdiction over the claims for the assessment of non-infringement of European patent EP 0 996 905 in its national portions, other than the Italian portion. On July 11, 2008, RIM filed an appeal of the decision on jurisdiction. On May 27, 2008, the Court scheduled an oral hearing for December 16, 2008. Proceedings are currently pending.

On May 31, 2006, RIM filed a declaratory judgment action in the United States Court for the Northern District of Texas, Dallas Division, against DataQuill BVI, Ltd. in which RIM seeks a ruling that the United States Patent 6,058,304 (“the ‘304 Patent”) is invalid and not infringed by RIM products. On August 15, 2006, DataQuill filed a motion to dismiss to which RIM filed a response on September 15, 2006. On March 27, 2007, the U.S. District Court for the Northern District of Texas issued an order denying DataQuill’s Motion to Dismiss. On April 13, 2007, RIM filed an amended complaint which added a declaratory judgment counterclaim to the suit seeking a ruling that DataQuill’s continuation patent of the 304 patent, United States Patent 7,139,591 (“the ‘591 Patent”) is invalid and not infringed by RIM products. On April 24, 2007, DataQuill filed its answer to RIM’s declaratory judgment complaint. DataQuill counterclaimed for infringement of the ‘304 and ‘591 Patents and is seeking an injunction and monetary damages. On May 9, 2008, the Northern District of Texas granted the parties’ joint motion to amend the scheduling order and reset the trial date for April 20, 2009. Subsequently, the parties agreed to submit the dispute to binding alternative dispute resolution (“ADR”) proceedings, scheduled for November 5-6, 2008. Based on this agreement, the parties jointly moved to stay the case until January 15, 2009 and to vacate all case deadlines, including the April 20, 2009 trial date. The court granted the parties’ joint motion and further ordered that, if ADR is unsuccessful, then entry of a revised docket control order will be necessary. The Company has recorded an amount that is not material to these consolidated financial statements for this matter as at August 30, 2008.

On June 6, 2007, Minerva Industries (“Minerva”) filed a complaint in the United States District Court for the Eastern District of Texas, Marshall Division (the “Marshall District Court”), against the Company and other defendants alleging infringement of United States Patent No. 6,681,120 and seeking an injunction and monetary damages. On January 22, 2008, Minerva filed a second complaint in the Marshall District Court against the Company alleging infringement of United States Patent No. 7,321,783 and seeking an injunction and monetary damages. RIM answered the first Complaint on January 28, 2008 and the second Complaint on March 14, 2008. A motion is pending to consolidate both actions against RIM with similar actions pending in the Marshall District Court. At this time, the likelihood of damages or recoveries and the ultimate amounts, if any, with respect to this litigation is not determinable. Accordingly, no amount has been recorded in these consolidated financial statements as at August 30, 2008.

On October 18, 2007, Saxon Innovations, LLC, filed a complaint in the United States District Court for the Eastern District of Texas, Tyler Division, against RIM and thirteen other defendants alleging infringement of

Research In Motion Limited
Notes to the Consolidated Financial Statements
(unaudited)

In thousands of United States dollars, except share and per share data and except as otherwise indicated

United States Patents Nos. 5,592,555, 5,771,394, 5,502,689, and 5,247,621 and seeking an injunction and monetary damages. RIM’s answer to the complaint was originally due January 7, 2008; however, RIM received an extension of time to file answer and the answer was filed on March 5, 2008. A trial date has been set for May 2010. At this time, the likelihood of damages or recoveries and the ultimate amounts, if any, with respect to this litigation is not determinable. Accordingly, no amount has been recorded in these consolidated financial statements as at August 30, 2008.

On December 20, 2007, TeleCommunication Systems, Inc. (“TCS”) filed a complaint in the U.S. District Court for the Eastern District of Virginia, against the Company alleging infringement of United States Patent No. 6,871,215 and seeking monetary damages and an injunction. On March 12, 2008, in response to a joint motion filed by both parties, the Court granted a 30 day extension to RIM’s Answer date so that the parties can pursue settlement negotiations. On April 11, 2008, TCS voluntarily dismissed its lawsuit against RIM in the Eastern District of Virginia pursuant to a standstill agreement that the parties signed earlier the same day. On June 13, 2008, the parties settled the lawsuit for an amount that is not material to these consolidated financial statements. The amount was fully recorded in the consolidated financial statements as of August 30, 2008.

On February 16, 2008, the Company filed a complaint in the United States District Court for the Northern District of Texas (Dallas Division) (the “Dallas District Court”) against Motorola alleging breach of contract, antitrust violations, patent infringement of United States Patent No. 5,664,055; 5,699,485; 6,278,442; 6,452,588; 6,489,950; 6,611,254, 6,661,255; 6,919,879 and 7,227,536 and seeking a declaratory judgment of non-infringement and invalidity against Motorola United States Patent Nos. 5,359,317; 5,074,684; 5,764,899; 5,771,353; 5,958,006; 5,706,211 and 6,101,531. On February 21, 2008, RIM filed a second complaint in the Dallas District Court seeking a declaratory judgment of non-infringement and invalidity of Motorola United States Patent No. 5,157,391; 5,394,140; 5,612,682 and 5,974,447. On April 10, 2008, Motorola filed a motion to dismiss RIM’s antitrust and contract claims or, in the alternative, to bifurcate and stay RIM’s antitrust and contract claims until the resolution of the co-pending patent claims. Motorola also asked the Court to dismiss, stay and or transfer to the Eastern District of Texas RIM’s declaratory judgment claims against Motorola’s patents. Pleadings on this motion closed on June 2, 2008. Proceedings are currently pending.

On February 16, 2008, Motorola filed a complaint against the Company in the Eastern District of Texas, Marshall Division alleging infringement of United States Patent Nos. 5,157,391; 5,359,317; 5,394,140; 5,612,682; 5,764,899; 5,771,353 and 5,974,447. On February 20, 2008, Motorola filed an amended complaint adding United States Patent Nos. 5,074,684; 5,706,211; 5,958,006 and 6,101,531 to the complaint. On March 31, 2008, RIM filed a motion to transfer Motorola’s Eastern District of Texas case involving Motorola’s patents to the Northern District of Texas. Pleadings on this motion closed on May 20, 2008.

On February 16, 2008, Motorola filed another complaint in the District of Delaware against the Company seeking a declaratory judgment of non-infringement and invalidity related to United States Patent No. 5,664,055 and 5,699,485 assigned to RIM as well as United States Patent No. 6,611,254, 6,661,255 and 6,919,879. On February 20, 2008, the complaint was amended to include RIM’s United States Patent No. 6,278,442; 6,452,588; 6,489,950 and 7,227,536. On March 31, 2008, RIM filed a motion to transfer Motorola’s District of Delaware case involving RIM’s patents to the Northern District of Texas. On April 10, 2008, RIM filed its answer and counterclaims to Motorola’s amended complaint. Motorola filed its reply to RIM’s counterclaims on April 30, 2008. On August 26, 2008, the Court granted RIM’s motion to transfer this case to the Dallas District Court. At this time, the likelihood of damages or recoveries and the ultimate amounts, if any, with respect to this litigation (or any related litigation) is not determinable. Accordingly, no amount has been recorded in these consolidated financial statements as at August 30, 2008.

From time to time, the Company is involved in other claims in the normal course of business. The following additional patent suits were filed by the Company or against the Company since the end of fiscal 2008:

Research In Motion Limited
Notes to the Consolidated Financial Statements
(unaudited)

In thousands of United States dollars, except share and per share data and except as otherwise indicated

On March 6, 2008, Aloft Media LLC filed a complaint against the Company and 12 other parties in the Eastern District of Texas Marshall Division alleging infringement of United States Patent No. 7,330,715. This patent generally relates to transferring contact information using a cell phone. On July 29th, 2008, Aloft Media LLC filed a second patent infringement lawsuit against the Company and Research In Motion Corporation in the Eastern District of Texas (Marshall Division). The single patent in suit is U.S. Patent No. 7,305,625 entitled “Data Networking system and Method for Interface a User.”

On March 7, 2008, FlashPoint Technology Inc. filed a patent infringement lawsuit against the Company and Research In Motion Corporation and 14 other parties in the District of Delaware. The patents-in-suit include U.S. Patent Nos. 6,118,480, 6,177,956, 6,222,538, 6,223,190 (“the ‘190 Patent”), 6,249,316, 6,486,914 and 6,504,575. These patents are generally directed to digital camera and imaging technologies. On May 31, 2008, FlashPoint dismissed its complaint as to 6 of the 7 patents-in-suit, leaving only the ‘190 Patent in the litigation against RIM.

On May 20, 2008, the Company filed a lawsuit in Italy against IPCom GmbH for declaratory judgment of invalidity of several IPCom GmbH patents. On May 21, 2008, the Company filed a lawsuit in the U.K. against IPCom GmbH for declaratory judgment of invalidity of several claimed standards-essential IPCom GmbH patents. On May 27, 2008, the Company filed a lawsuit in the U.S. District Court for the Northern District of Texas against IPCom GmbH for declaratory judgment of non-infringement and invalidity of several IPCom GmbH patents. On May 23, 2008, IPCom GmbH filed suit against the Company for infringement of four claimed standards essential German and European patents in the Hamburg, Germany court. On August 8, 2008, the parties agreed to withdraw and terminate their respective European actions.

On June 19, 2008, Wi-LAN, Inc. filed a patent infringement lawsuit against the Company and Research In Motion Corporation in the Eastern District of Texas. The patents-in-suit include U.S. Patent Nos. 5,282,222 and RE37,802. These patents are generally directed to 802.11 (wifi) and cdma2000 wireless communications standards. On August 11, 2008, the parties entered into a license agreement concerning the patents-in-suit and also entered into a settlement agreement concerning this case. The amount of the settlement is not material to these consolidated financial statements.

On June 20, 2008, St. Clair Intellectual Property Consultants, Inc. filed a patent infringement lawsuit against the Company, Research In Motion Corporation and other defendants in the District of Delaware. The patents in suit include U.S. Patent Nos. 5,138,459, 6,094,219, 6,233,010 and 6,323,899. These patents are generally directed to image processing in digital cameras.

On July 29, 2008, Stragent, LLC filed a patent infringement lawsuit against the Company, Research In Motion Corporation and other defendants in the Eastern District of Texas (Marshall Division) alleging infringement of U.S. Patent No. 6,665,722. This patent relates to web browsing.

On July 30, 2008, WIAV Solutions, LLC filed a patent infringement lawsuit against the Company, Research In Motion Corporation and other defendants in the Eastern District of Virginia. The patents-in-suit include: 6256,606; 7,120,578; 6,275,794; 6,507,814; 7,266,493; 6,633,841; 6,104,992; 6,385,573; 6,539,205; 6,680,920. These patents are generally related to speech codecs. On September 26, 2008, WIAV Solutions, LLC dismissed the original lawsuit and filed another patent infringement lawsuit against the Company, Research In Motion Corporation and other defendants naming the same patents.

Additional lawsuits, including purported class actions and derivative actions, may be filed based upon the Company’s historical stock option granting practices. Management assesses such claims and where considered likely to result in a material exposure and, where the amount of the claim is quantifiable, provisions for loss are made based on management’s assessment of the likely outcome. The Company does not provide for claims that are considered unlikely to result in a significant loss, claims for which the outcome is not determinable or claims

Research In Motion Limited
Notes to the Consolidated Financial Statements
(unaudited)

In thousands of United States dollars, except share and per share data and except as otherwise indicated

		where the amount of the loss cannot be reasonably estimated. Any settlements or awards under such claims are provided for when reasonably determinable.

		(c) Other

		In fiscal 2007, the Company restated its consolidated balance sheet as of March 4, 2006 and its consolidated statements of operations, consolidated statements of cash flows, and consolidated statements of shareholders’ equity for the fiscal years ended March 4, 2006 and February 26, 2005, and the related note disclosure (the “Restatement”), to reflect additional non-cash stock compensation expense relating to certain historical stock-based awards. The Restatement did not result in a change in the Company’s previously reported revenues, total cash and cash equivalents or net cash provided by operating activities. The Restatement was the result of a voluntary internal review (the “Review”) by the Company of its historical stock option granting practices. The Review identified three significant types of accounting errors: the misapplication of U.S. GAAP as it relates to a “net settlement” feature contained in the Company’s stock option plan (the “Stock Option Plan”) until February 27, 2002, the misapplication of U.S. GAAP in the accounting for certain share awards granted prior to the adoption of the Stock Option Plan, and the misapplication of U.S. GAAP in the determination of an accounting measurement date for options granted after February 27, 2002. The Review determined that the Company failed to maintain adequate internal and accounting controls with respect to the issuance of options in compliance with the Stock Option Plan, both in terms of how options were granted and documented, and the measurement date used to account for certain awards.

		Each of the Securities and Exchange Commission, the Ontario Securities Commission and the office of the United States Attorney for the Southern District of New York has commenced investigations in connection with the Company’s historical stock option granting practices. The Company continues to cooperate with each of these agencies. While there can be no assurance as to the outcome of the investigations, the Company anticipates that RIM and certain of its directors or officers could be subject to potential enforcement action or prosecution, which if successful, could result in civil or criminal penalties or other remedies. Due to uncertainties related to the potential outcomes of the investigations, the Company is unable to assess what, if any, exposure or loss it may incur as a result of the outcomes of these investigations. As such, no amounts have been accrued in the Company’s financial statements for any potential loss.

16.		SEGMENT DISCLOSURES

		The Company is organized and managed as a single reportable business segment. The Company’s operations are substantially all related to the research, design, manufacture and sales of wireless communications products, services and software.

		Selected financial information is as follows:

Research In Motion Limited
Notes to the Consolidated Financial Statements
(unaudited)

In thousands of United States dollars, except share and per share data and except as otherwise indicated


	For the three months ended						For the six months ended
	August 30,			September 1,			August 30,			September 1,
	2008			2007			2008			2007

Revenue
Canada	$	202,837		$	107,739		$	378,400		$	174,379
United States		1,980,536			790,560			3,375,849			1,398,401
United Kingdom		135,042			107,851			273,445			212,066
Other		258,915			366,100			792,201			669,315

	$	2,577,330		$	1,372,250		$	4,819,895		$	2,454,161


Revenue
Canada		7.9	%		7.9	%		7.9	%		7.1	%
United States		76.8	%		57.6	%		70.0	%		57.0	%
United Kingdom		5.3	%		7.8	%		5.7	%		8.6	%
Other		10.0	%		26.7	%		16.4	%		27.3	%

		100.0	%		100.0	%		100.0	%		100.0	%


	For the three months ended				For the six months ended
	August 30,		September 1,		August 30,		September 1,
	2008		2007		2008		2007

Revenue mix
Devices	$	2,116,451	$	1,077,165	$	3,954,788	$	1,901,218
Service		333,687		201,415		626,063		375,000
Software		64,290		57,203		130,831		111,670
Other		62,902		36,467		108,213		66,273

	$	2,577,330	$	1,372,250	$	4,819,895	$	2,454,161


	As at
	August 30,		March 1,
	2008		2008

Capital assets, intangible assets and goodwill
Canada	$	1,587,775	$	1,166,451
United States		322,100		60,354
United Kingdom		48,077		43,150
Other		31,934		20,443

	$	1,989,886	$	1,290,398


Total assets
Canada	$	2,603,245	$	1,921,202
United States		2,468,238		1,738,508
United Kingdom		1,598,039		1,669,366
Other		223,724		182,111

	$	6,893,246	$	5,511,187

Form 52-109F2

CERTIFICATION OF INTERIM FILINGS

I, James Balsillie, Co-Chief Executive Officer of Research In Motion Limited, certify that:

1.		I have reviewed the interim filings (as this term is defined in Multilateral Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings) of Research In Motion Limited (the “Issuer”) for the interim period ending August 30, 2008;

2.		Based on my knowledge, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings;

3.		Based on my knowledge, the interim financial statements together with the other financial information included in the interim filings fairly present in all material respects the financial condition, results of operations and cash flows of the Issuer, as of the date and for the periods presented in the interim filings;

4.		The Issuer’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures and internal controls over financial reporting for the Issuer, and we have:

	(a)		designed such disclosure controls and procedures, or caused them to be designed under our supervision, to provide reasonable assurance that material information relating to the Issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which the interim filings are being prepared; and

	(b)		designed such internal control over financial reporting, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the Issuer’s GAAP; and

I have caused the Issuer to disclose in the interim MD&A any change in the Issuer’s internal control over financial reporting that occurred during the Issuer’s most recent interim period that has materially affected, or is reasonably likely to materially affect, the Issuer’s internal control over financial reporting.

DATED: September 29, 2008


		/s/ James Balsillie James Balsillie
		Co-Chief Executive Officer

Form 52-109F2

CERTIFICATION OF INTERIM FILINGS

I, Mike Lazaridis, Co-Chief Executive Officer of Research In Motion Limited, certify that:

1.		I have reviewed the interim filings (as this term is defined in Multilateral Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings) of Research In Motion Limited (the “Issuer”) for the interim period ending August 30, 2008;

2.		Based on my knowledge, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings;

3.		Based on my knowledge, the interim financial statements together with the other financial information included in the interim filings fairly present in all material respects the financial condition, results of operations and cash flows of the Issuer, as of the date and for the periods presented in the interim filings;

4.		The Issuer’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures and internal controls over financial reporting for the Issuer, and we have:

	(a)		designed such disclosure controls and procedures, or caused them to be designed under our supervision, to provide reasonable assurance that material information relating to the Issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which the interim filings are being prepared; and

	(b)		designed such internal control over financial reporting, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the Issuer’s GAAP; and

DATED: September 29, 2008


		/s/ Mike Lazaridis Mike Lazaridis
		Co-Chief Executive Officer

Form 52-109F2

CERTIFICATION OF INTERIM FILINGS

I, Brian Bidulka, Chief Accounting Officer of Research In Motion Limited, certify that:

1.		I have reviewed the interim filings (as this term is defined in Multilateral Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings) of Research In Motion Limited (the “Issuer”) for the interim period ending August 30, 2008;

2.		Based on my knowledge, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings;

3.		Based on my knowledge, the interim financial statements together with the other financial information included in the interim filings fairly present in all material respects the financial condition, results of operations and cash flows of the Issuer, as of the date and for the periods presented in the interim filings;

4.		The Issuer’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures and internal controls over financial reporting for the Issuer, and we have:

	(a)		designed such disclosure controls and procedures, or caused them to be designed under our supervision, to provide reasonable assurance that material information relating to the Issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which the interim filings are being prepared; and

	(b)		designed such internal control over financial reporting, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the Issuer’s GAAP; and

DATED: September 29, 2008


		/s/ Brian Bidulka Brian Bidulka Chief Accounting Officer


Three Months Ended August 30, 2008	Level 3

Balance at May 31, 2008	$	59,704
Unrealized changes in fair value included in other comprehensive income		115
Accrued interest		362


Balance at August 30, 2008	$	60,181


Six Months Ended August 30, 2008	Level 3

Balance at March 1, 2008	$	59,418
Unrealized changes in fair value included in other comprehensive income		68
Accrued interest		695


Balance at August 30, 2008	$	60,181


	As at
	August 30,			March 1,
	2008			2008

Raw materials	$	303,612		$	167,185
Work in process		226,054			239,610
Finished goods		12,682			9,233
Provision for excess and obsolete inventory		(29,444	)		(19,761	)

	$	512,904		$	396,267

	1		Management’s Discussion and Analysis of Financial Condition and Results of Operations for the Three Months and Six Months Ended August 30, 2008

	2		Consolidated Financial Statements for the Three Months and Six Months Ended August 30, 2008

	3		Canadian Forms 52-109F2 — Certification of Interim Filings

17.		CASH FLOW INFORMATION

		Cash flows resulting from net changes in working capital items are as follows:


	Research In Motion Limited (Registrant)
Date: September 29, 2008	By:	/s/ Brian Bidulka
		Name:	Brian Bidulka
		Title:	Chief Accounting Officer