Nokia 2013 Annual Report

Annual Report | 2013
United States GAAP
Sierra Wireless is the global leader in

M2M devices and cloud services,
delivering intelligent solutions
that simplify the connected world.
Sierra Wireless, Inc.

Financial Highlights
(Expressed in thousands of United States dollars, except as otherwise stated)

(Prepared in accordance with United States generally accepted accounting principles ("U.S. GAAP"))
Consolidated Statement of Operations Data

Years ended December 31,
GAAP results
Revenue
Gross margin percentage
Total expenses
Loss from operations
Net loss from continuing operations
Net earnings from discontinued operations
Net earnings (loss) attributable to the Company
Basic and diluted net earnings (loss) per share (in dollars)
2013
2012
2011
441,860 $
33.0%
163,305
(17,664)
(15,550)
70,588
55,038
1.79 $
397,321 $
31.5%
147,480
(22,206)
(4,202)
31,401
27,199
0.88 $
333,175
30.5%
155,993
(54,253)
(50,710)
21,338
(29,315)
(0.94)
33.1%
140,994 $
5,053
6,942
4,420
11,362
0.37 $
31.6%
124,680 $
898
(444)
33,796
33,352
1.08 $
30.7%
124,515
(22,390)
(18,656)
22,289
3,633
0.12
382,016
59,844
441,860
346,543
50,778
397,321
290,463
42,712
333,175
Non-GAAP results(1)
Gross margin percentage
Total expenses
Earnings (loss) from operations
Net earnings (loss) from continuing operations
Net earnings attributable to the Company
Basic and diluted net earnings (loss) per share (in dollars)
Revenue by segment
OEM Solutions
Enterprise Solutions
$
$
Revenue by geographical region

Americas
Europe, Middle East and Africa
Asia-Pacific
$
$
$
$
31%
21%
48%
100%
25%
20%
55%
100%
25%
27%
48%
100%
2013
2012
2011
Consolidated Balance Sheet Data

December 31,
Cash and cash equivalents, including short-term investments
Long-term liabilities
Shareholders' equity
Number of common shares outstanding
(1)
$
$
$
177,416
21,677
362,996
31,097,844
$
$
$
63,646
26,826
298,056
30,592,423
$
$
$
110,722
25,379
271,904
31,306,692
Our non-GAAP results exclude the impact of stock-based compensation expense, acquisition amortization, impairment,
acquisition and disposition costs, integration costs, restructuring costs, foreign exchange gains or losses on foreign currency
contracts and translation of balance sheet accounts, and certain tax adjustments. Non-GAAP financial measures do not have
any standardized meaning prescribed by U.S. GAAP and therefore may not be comparable to similar measures presented by
other companies. For further information, refer to "Non-GAAP Financial Measures" on page 24 of the Management's
Discussion and Analysis in this Annual Report.
Report to Shareholders
2013 was a transformational period for Sierra Wireless. In my letter to shareholders last year I discussed the
planned divestiture of our AirCard assets, and how it would unlock shareholder value and provide us with
additional resources to pursue the long-term opportunity in Machine-to-Machine (M2M). We completed the sale
of AirCard in April, 2013 and have begun to put the proceeds to work acquiring additional M2M businesses. In
2013 we acquired AnyDATAs M2M modules and modem assets which has strengthened our position in the
important Korea market and, subsequent to year end, we entered into an agreement to acquire In Motion
Technology Inc., expanding our M2M business in wireless gateways, routers and solutions for Enterprise.
Our financial performance in 2013 was solid. Our revenue grew by 11.2% to a record $441.9 million. Each of our
individual business segments - OEM Solutions and Enterprise Solutions - contributed significantly to our overall
growth. OEM Solutions revenue grew by 10.2% to $382.0 million, while revenue from our Enterprise Solutions
segment was up 17.9% to $59.9 million. Our gross margin percentage also improved as a result of favorable
product mix and product cost reductions. This translated into improved profitability, as adjusted EBITDA increased
by 47.9% to $18.7 million, demonstrating the profit potential in our business model as our revenue increases.
Innovation continues to be a key contributor to our market leadership position. In 2013 we delivered a number of
new products and solutions that we believe will differentiate us in the market and fuel our future growth. Within
our OEM Solutions business segment, we introduced our new family of smart modules that combine a multi-core
architecture, new embedded application framework and pre-integrated AirVantage cloud services. The result is an
entire M2M ecosystem that enables OEM customers to develop and run their application directly on the module,
and to deploy and manage their devices in the cloud, reducing their overall development time and total cost of
ownership. We also continued to stake our claim as the clear 4G LTE technology leader; releasing a number of
new module devices for 4G networks, including the AR7, the worlds first 4G embedded module designed
specifically for the automotive market.
Within Enterprise Solutions, adoption of our next generation AirVantage cloud offering continued to build
momentum. Existing large customers, such as Nespresso, added devices and subscribers at a steady rate, and new
customers such as Veolia Water were commissioned onto the platform and launched in the market. Additionally,
our conversion rate for AirLink gateway customers adopting AirVantage for device management services continued
to improve. We continue to be enthusiastic about the opportunity to grow our AirVantage subscriber and
recurring revenue base and about the differentiation that it brings to our device-to-cloud offering.
Our singular focus on M2M is all about creating shareholder value. We believe we are exceptionally well
positioned to capitalize on the growing M2M market opportunity. According to ABI Research, the market is
expected to grow from 1.4 billion connected devices today to over 12 billion connected devices by 2020. We have
significant scale, a blue-chip customer base, new customer design wins, and differentiated products and solutions
that span the M2M value chain. I believe this collection of assets will enable us to capture this long term growth
opportunity, and to drive margin expansion and defensibility as well.
While we will continue to focus on profitable organic growth, we also plan to put our strong balance sheet to
work, acquiring more great M2M companies that will help us to further expand our position in the value chain,
strengthen our margins and drive revenue growth. I believe that our track record of executing on this plan is solid.
Since 2008, we have grown our M2M business organically and through acquisition from $158 million to $442
million in annual revenues.
To summarize, we are delivering on the plan we established to drive profitable growth and to build on our industry
leadership in M2M, creating value for all stakeholders in 2014 and beyond. I thank you for your continued
confidence and look forward to reporting to you on our achievements in the coming year.
Jason W. Cohenour
President and Chief Executive Officer
Cautionary Note Regarding Forward-Looking Statements
Certain statements in this letter constitute forward-looking statements or forward-looking information and, in this regard, you
should read carefully the "Cautionary Note Regarding Forward-Looking Statements" in the attached Management's Discussion
& Analysis.
Table of Contents
MANAGEMENTS DISCUSSION AND ANALYSIS
CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS
OVERVIEW
Business Overview
Strategy
Annual Overview - Financial Highlights
Outlook
11
Disposition of AirCard Business
12
CONSOLIDATED ANNUAL RESULTS OF OPERATIONS
13
Year ended December 31, 2013 Compared to Year Ended December 31, 2012
13
Year ended December 31, 2012 Compared to Year Ended December 31, 2011
16
SEGMENTED INFORMATION
18
FOURTH QUARTER OVERVIEW
18
CONSOLIDATED FOURTH QUARTER RESULTS OF OPERATIONS
19
SUMMARY OF QUARTERLY RESULTS OF OPERATIONS
20
LIQUIDITY AND CAPITAL RESOURCES
22
NON-GAAP FINANCIAL MEASURES
24
OFF-BALANCE SHEET ARRANGEMENTS
27
TRANSACTIONS BETWEEN RELATED PARTIES
27
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
27
OUTSTANDING SHARE DATA
31
IMPACT OF ACCOUNTING PRONOUNCEMENTS AFFECTING FUTURE PERIODS
31
DISCLOSURE CONTROLS
32
INTERNAL CONTROL OVER FINANCIAL REPORTING
32
LEGAL PROCEEDINGS
33
RISKS AND UNCERTAINTIES
36
CONSOLIDATED FINANCIAL STATEMENTS
45
MANAGEMENTS DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following Managements Discussion and Analysis of Financial Condition and Results of Operations (MD&A)
provides information for the year ended December 31, 2013, and up to and including February 27, 2014. This
MD&A should be read together with our audited consolidated financial statements and the accompanying notes
for the year ended December 31, 2013 (the consolidated financial statements). The consolidated financial
statements have been prepared in accordance with generally accepted accounting principles in the United States
(U.S. GAAP). Except where otherwise specifically indicated, all amounts in this MD&A are expressed in United
States dollars.
We have 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, we are
permitted to prepare this MD&A in accordance with the disclosure requirements of Canada, which requirements
are different than those of the United States.
Certain statements in this MD&A constitute forward-looking statements or forward-looking information within the
meaning of applicable securities laws. You should carefully read the cautionary note in this MD&A regarding
forward-looking statements and should not place undue reliance on any such forward-looking statements. See
Cautionary Note Regarding Forward-Looking Statements.
Throughout this document, references are made to certain non-GAAP financial measures that are not measures of
performance under U.S. GAAP. Management believes that these non-GAAP financial measures provide useful
information to investors regarding the Companys financial condition and results of operations as they provide
additional measures of its performance. These non-GAAP financial measures do not have any standardized
meaning prescribed by U.S. GAAP and are therefore unlikely to be comparable to similar measures presented by
other issuers. These non-GAAP financial measures are defined and reconciled to their nearest GAAP measure in
Non-GAAP Financial Measures.
Additional information about the Company, including our most recent consolidated financial statements and our
Annual Information Form, is available on SEDAR at www.sedar.com and on EDGAR at www.sec.gov.
Cautionary Note Regarding Forward-looking Statements

Certain statements and information in this MD&A are not based on historical facts and constitute forward-looking
statements or forward-looking information within the meaning of the U.S. Private Securities Litigation Reform Act of
1995 and Canadian securities laws (forward-looking statements), including our business outlook for the short and
longer term and our strategy, plans and future operating performance. Forward-looking statements are provided to
help you understand our views of our short and longer term prospects. We caution you that forward-looking statements
may not be appropriate for other purposes. We will not update or revise our forward-looking statements unless we are
required to do so by securities laws. Forward-looking statements:
Typically include words and phrases about the future such as outlook, may, estimates, intends, believes,
plans, anticipates and expects;
Are not promises or guarantees of future performance. They represent our current views and may change
significantly;
Are based on a number of material assumptions, including those listed below, which could prove to be significantly
incorrect:
Our ability to develop, manufacture and sell new products and services that meet the needs of our
customers and gain commercial acceptance;
Our ability to continue to sell our products and services in the expected quantities at the expected prices
and expected times;
Expected cost of goods sold;
Expected component supply constraints;
Our ability to win new business;
Expected deployment of next generation networks by wireless network operators;
Our operations are not adversely disrupted by component shortages or other development, operating
or regulatory risks; and
Expected tax rates and foreign exchange rates.
Are subject to substantial known and unknown material risks and uncertainties. Many factors could cause our
actual results, achievements and developments in our business to differ significantly from those expressed or implied
by our forward-looking statements, including, without limitation, the following factors which are discussed in
greater detail under Risks and Uncertainties and in our other regulatory filings with the U.S. Securities and
Exchange Commission (the SEC) in the United States and the provincial securities commissions in Canada:
Actual sales volumes or prices for our products and services may be lower than we expect for any
reason including, without limitation, continuing uncertain economic conditions, price and product
competition, different product mix, the loss of any of our significant customers, or competition from
new or established wireless communication companies;
The cost of products sold may be higher than planned or necessary component supplies may not be
available, are delayed or are not available on commercially reasonable terms;
We may be unable to enforce our intellectual property rights or may be subject to litigation that has
an adverse outcome;
The development and timing of the introduction of our new products may be later than we expect or
may be indefinitely delayed;
Transition periods associated with the migration to new technologies may be longer than we expect;
Unanticipated costs associated with litigation or settlements associated with intellectual property
matters; and
Higher than anticipated costs; disruption of, and demands on, our ongoing business; and diversion of
managements time and attention in connection with acquisitions or divestitures.
Investors are cautioned not to place undue reliance on these forward-looking statements. No forward-looking statement
is a guarantee of future results.
OVERVIEW
Business Overview
Sierra Wireless Inc. (Sierra Wireless or the Company) is the global leader in machine-to-machine (M2M)
devices and cloud services, delivering intelligent wireless solutions that simplify the connected world. We offer
the industry's most comprehensive portfolio of 2G, 3G, and 4G LTE embedded modules and gateways, seamlessly
integrated with our secure M2M cloud services. Customers worldwide, including OEMs, enterprises and mobile
network operators, trust our innovative solutions to get their connected products and services to market faster.
During 2013 we significantly advanced our strategy to become a leading M2M pure play. On April 2, 2013, we
completed the sale of substantially all of the assets and operations related to our AirCard business for $136.6
million in cash plus assumed liabilities (refer to the section on Disposition of AirCard business for additional
details). During the year we also accelerated our revenue and profitability growth through an active acquisition
strategy focused on M2M opportunities. In October 2013, we completed the acquisition of the M2M modules and
modem assets of AnyDATA Corporation ("AnyDATA") for $5.2 million. The M2M business of AnyDATA includes 3G
and 4G wireless modules and modems which are sold mainly in Korea. This acquisition extends our global
leadership position in the growing M2M market and provides us with a leading position in Korea.
On January 26, 2014 we entered into a definitive agreement to acquire all the shares of In Motion Technology Inc.
("In Motion") for $21 million. The acquisition is expected to close in early March 2014 and is subject to certain
post-closing adjustments. In Motion is a leader in mobile enterprise solutions, providing rugged in-vehicle mobile
routers that are integrated with an advanced mobile-optimized security system and a powerful management and
application platform. In Motion's solutions are used by public safety, transit and utility fleets across the United
States and Canada. This acquisition further strengthens our leadership position in M2M and will broaden our
product portfolio focused on enterprises.
As a result of the sale of the AirCard business, as well as our recent acquisition of the AnyDATA M2M business and
our contemplated acquisition of In Motion, our segments have changed from those reported at December 31,
2012. We are now reporting two segments, OEM Solutions and Enterprise Solutions, and all prior periods have
been retrospectively adjusted to reflect the two segments.
Our OEM Solutions segment includes embedded wireless modules and tools for OEM customers to integrate
wireless connectivity into products and solutions across a broad range of industries, including automotive,
networking, energy, security, sales and payment, industrial control and monitoring, fleet management, field
service, healthcare, and consumer electronics, including leading PC and tablet manufacturers. Within our OEM
Solutions segment, the AirPrime Embedded Wireless Modules product portfolio spans 2G, 3G, and 4G
technologies and includes robust remote device management capability, as well as support for on-board
embedded applications using the OpenAT Application Framework.
Our Enterprise Solutions segment includes intelligent gateways, modems and tools for enterprise customers
including a cloud-based platform for building, deploying and managing M2M applications. These products enable
Enterprise customers to get their M2M applications up and running quickly. Following closing, the acquired In
Motion business will be integrated and reported within our Enterprise Solutions segment.
Within our Enterprise Solutions segment, the AirLink product portfolio includes 2G, 3G and 4G LTE gateways.
AirLink devices are rugged, intelligent wireless gateways that provide plug and play mission-critical connectivity.
They are designed for use where reliability and security are essential, and are sold to public safety, transportation,
field service, energy, industrial, retail and financial enterprises around the world. AirLink gateways can be easily
configured for the customer's application, and also support on-board embedded applications using the ALEOS
Application Framework.
Our Enterprise Solutions segment also includes the AirVantage M2M Cloud which provides a secure, scalable
infrastructure for M2M applications. The AirVantage Enterprise Platform can be used to collect and store machine
data, and process and schedule events from any number of devices, across any network operator around the
world. M2M solution developers can use the latest cloud application programming interface (API) standards to
quickly integrate machine data with their own enterprise applications and back-end systems. The AirVantage
Management Service can be used to centrally deploy and monitor M2M devices, including configuring device
settings, delivering firmware and embedded application updates, and administering airtime subscriptions across
global networks.
Strategy
The cellular M2M embedded module and gateway markets are expected to grow significantly over the next several
years. Adoption of M2M solutions is driven by a number of enablers, such as lower wireless connectivity costs,
higher wireless connection speeds, new devices and tools to simplify application development and increased focus
and investment from many large ecosystem players. Key benefits for customers deploying M2M solutions, such as
the ability to generate new revenue streams, improve cost efficiencies, gather important customer and market
intelligence, as well as regulatory and security requirements, are also driving demand for M2M connectivity.
Management believes these factors create a substantial growth opportunity for the Company. We are the global
leader in M2M embedded cellular devices today, with 34% market share (source: ABI Research, 2012). Going
forward, we plan to build on this leadership position and expand our business across the M2M value chain. We
intend to:
Leverage our M2M leadership position to drive profitable organic growth;

Leverage our innovative device to cloud product offering to capture more of the M2M value chain;
Innovate and execute in order to expand into more M2M segments and geographical markets; and
Accelerate revenue and profitability growth through focused acquisitions.
Annual Overview Financial highlights

Our 2013 revenue increased 11.2% to $441.9 million compared to 2012. This increase was largely driven by
continued growth in both the Enterprise Solutions and OEM Solutions segments, including a full year contribution
from the acquisition of the M2M business of Sagemcom which was completed in August 2012. Gross margin
percentage improved year-over-year due to favorable product mix and product cost reductions. Revenue growth
and stronger gross margin led to adjusted EBITDA growth of 47.9% to $18.7 million compared to 2012.
Financial highlights for year ended December 31, 2013:
GAAP
Record revenue of $441.9 million from our continuing business, up 11.2%, compared to $397.3 million in
2012.
Gross margin improved to 33.0%, compared to 31.5% in 2012.
Operating loss from continuing operations was $17.7 million, compared to an operating loss of $22.2
million in 2012.
Net earnings including discontinued operations were $55.0 million and diluted earnings per share of
$1.79, up 102.4%, compared to $27.2 million and diluted earnings per share of $0.88 in 2012.
Non-GAAP
Gross margin was 33.1%, compared to 31.6% in 2012.
Operating earnings were $5.0 million, up significantly from $0.9 million in 2012.
Adjusted EBITDA was $18.7 million, compared to $12.6 million in 2012.
Net earnings from continuing operations of $6.9 million and diluted earnings per share of $0.23, improved
significantly from a net loss from continuing operations of $0.4 million and loss per share of $0.01 in 2012.
Revenue continuingoperations
($millions)
Grossmargin continuing
operations(%)
33.1
33.0
441.9
397.3
333.2
31.6
31.5
30.7
30.5
2011
2012
2011
2013
GAAP
2012
NONGAAP
2013
GAAP
NONGAAP
Netearnings(loss)
continuingoperations
($millions)
Operatingearnings(loss)
continuingoperations
($millions)
6.9
5.0
0.9
2011
(0.4)
2012
2011
2013
(17.7)
(22.4)
2012
(4.2)
2013
(15.6)
(18.7)
(22.2)
(50.7)
(54.3)
GAAP
NONGAAP
GAAP
GAAP
NONGAAP
NONGAAP
GAAP
NONGAAP
Selected Annual Financial information:

(in thousands of U.S. dollars, except where otherwise stated)
2013
Statement of Operations data:
Revenue
Gross Margin
- GAAP
- Non-GAAP (1)
2012
2011
441,860
397,321
333,175
145,641
146,047
125,274
125,578
101,740
102,125
Gross Margin %
- GAAP
- Non-GAAP (1)
33.0%
33.1%
31.5%
31.6%
30.5%
30.7%
Earnings (loss) from operations

- GAAP
- Non-GAAP (1)
(17,664)
5,053
(22,206)
898
(54,253)
(22,390)

- GAAP
- Non-GAAP (1)
(15,550)
6,942
(4,202)
(444)
(50,710)
(18,681)

- GAAP
- Non-GAAP (1)
70,588
4,420
31,401
33,796
21,338
22,289

- GAAP
- Non-GAAP (1)
55,038
11,362
27,199
33,352
(29,315)
3,633
Adjusted EBITDA
18,702
12,645
Revenue by Segment:
OEM Solutions
382,016
59,844
441,860
346,543
50,778
397,321
(9,629)
$
$
290,463
42,712
333,175
Share and per share data:

Basic and diluted earnings (loss) from continuing operations per share (in dollars)
- GAAP
- Non-GAAP (1)
$
$
(0.50)
0.23
$
$
(0.14)
(0.01)
$
$
(1.62)
(0.60)
Basic and diluted earnings (loss) per share (in dollars)

- GAAP
- Non-GAAP (1)
$
$
1.79
0.37
$
$
0.88
1.08
$
$
(0.94)
0.12
Common shares (in thousands)

At period-end
Weighed average - basic and diluted
31,098
30,771
Balance sheet data:

Cash and cash equivalents and short-term investments
Total assets
Total long-term liabilities
(1)
179,886
512,000
21,677
30,592
30,788
$
63,646
464,763
26,826
31,307
31,275
$
110,722
422,887
25,379
Non-GAAP results exclude the impact of stock-based compensation expense, acquisition amortization, impairment, gain on sale of AirCard business,
acquisition and disposition costs, integration costs, restructuring costs, foreign exchange gains or losses on foreign currency contracts and translation of
balance sheet accounts, and certain tax adjustments. Refer to the section on Non-GAAP financial measures for additional details.
See discussion under Consolidated Annual Results of Operations for factors that have caused period to period
variations.
Other key business highlights for the year ended December 31, 2013 include:
OEM Solutions
We introduced the next generation of AirPrime modules, first in the world to combine a powerful
multicore processor, built-in connectivity to secure cloud services, and an open application framework to
offer an entire M2M ecosystem on a module. This M2M ecosystem on a module is a major step forward in
simplifying the integration of embedded wireless communications, enabling developers to spend more
time developing their core application and business model, and less time on the challenges of integrating
wireless communications.
We introduced the AirPrime AR7550 embedded wireless module, the first in the AirPrime AR7 series of
automotive-grade modules for LTE networks. The module features a next generation multicore
architecture which provides a dedicated application processor, an open-source application framework, and
secure cloud services to simplify wireless integration and help reduce development cost. The AirPrime
AR7550 is specifically developed for the Verizon Wireless 4G LTE network.
We announced that the AirPrime MC7355 embedded wireless module is the first 4G LTE module to be
certified on the Sprint network. Demonstrating technical leadership in the LTE space, the AirPrime
MC7355 joins a wide range of Sierra Wireless modules available for Sprint. For OEM customers, Sierra
Wireless is uniquely positioned to manage and facilitate Sprint certification through its CTA authorized
laboratory, thereby eliminating the need for a third-party lab and significantly reducing time to market.
We announced that our AirPrime EM7305 embedded wireless module had been selected and integrated
into the Toshiba Protg Z10t - a high performance, Windows 8, Ultrabook that is equipped with a
detachable screen. The Toshiba Protg Z10t with the AirPrime EM7305 module launched in June on the
Telstra network in Australia.
We announced the launch of the AirPrime HL Series of embedded wireless modules for M2M
applications. The new AirPrime HL devices are the smallest embedded wireless modules to be completely
scalable across 2G, 3G and 4G technologies. The HL series also offers flexible mounting options and overthe-air firmware upgradability using our AirVantage Cloud.
More recently, we announced the launch of our AirPrime EM7340 and EM7345 embedded wireless
modules for 4G LTE networks. These devices are based on Intel chipsets and designed for integration into
notebook computers and tablets, with a standardized M.2 form factor ideal for small, thin devices.
Also recently, we introduced the Legato platform, an open source embedded platform built on Linux and
designed to simplify the development of M2M applications from the device to the cloud. Legato includes
Wind River Linux, a commercial-grade Linux distribution with a rich set of capabilities based on the latest
open source technologies, along with a fully integrated application framework and feature-rich tools. It
makes M2M application development quicker, easier, and more flexible by providing a tested and validated
solution on an established, well-supported open source foundation with built-in connectivity, security, and
management. Legato provides embedded M2M developers with a head start, significantly reducing the
time and cost to build their solutions. It provides existing customizable components needed for M2M
solutions across a wide range of target markets, including connected cars, smart meters, and industrial
automation. Legato will be pre-integrated in all new smart modules from Sierra Wireless, starting with the
AirPrime WP and AirPrime AR Series shipping later this year.
10
We launched a compact 3G intelligent gateway, the AirLink LS300, an all-in-one successor to the marketleading AirLink Raven line of rugged gateways. The AirLink LS300 is quick to deploy, simple to manage, and
stands up for years in the harshest environments. It provides all the benefits customers have come to rely
on in the AirLink product line, including best-in-class network connectivity, rugged military-spec design and
ALEOS embedded intelligence.
We announced the launch of the Sierra Wireless Solution Partner Program and the Sierra Wireless M2M
Solution Exchange. The Sierra Wireless Solution Partner Program offers a streamlined, functional way for
solution partners to work with Sierra Wireless to promote their solutions powered by Sierra Wireless
technology to the market.
More recently, we announced the launch of the AirLink ES440 4G LTE gateway and terminal server,
providing mission-critical 4G LTE connectivity when primary wireline internet connections are unavailable,
making it ideal for the distributed enterprise market.
We also signed a formal teaming agreement to work collaboratively with Tech Mahindra Ltd. to develop
and deploy end-to-end M2M solutions for customers worldwide. The collaboration leverages our deviceto-cloud offerings and Tech Mahindra's system integration and application development expertise to offer
cost-effective, turnkey solutions tailored for prospective M2M customers in markets such as energy,
transportation, industrial, and healthcare.
Outlook
In the first quarter of 2014, we expect solid year-over-year revenue and earnings growth. We expect gross margin
to decrease slightly from fourth quarter 2013 due to a shift in product mix and we expect operating expenses to
increase as a result of higher new product certification costs, investment in sales and marketing capabilities, and a
full quarter of expenses related to the AnyDATA acquired business.
We believe that the market for wireless M2M solutions has strong long-term growth prospects. We anticipate
strong growth in the number and type of devices being wirelessly connected, driven by a number of enablers, such
as lower wireless connectivity costs, faster wireless connection speeds, new devices and tools to simplify the
development of M2M applications, and increased focus and investment from large ecosystem players. More
importantly, we see strong customer demand emerging in many of our target verticals driven by increasing
recognition of the value created by deploying M2M solutions, such as new revenue streams and cost efficiencies.
Key factors that we expect will affect our results in the near term are:
the strength of our competitive position in the market;
the timely ramp up of sales of our new products recently launched or currently under development;
the level of success our OEM customers achieve with sales of connected solutions to end users;
our ability to secure future design wins with both existing and new customers;
wireless technology transitions and the timing of deployment of new, higher speed networks by wireless
operators;
the availability of components from key suppliers;
general economic conditions in the markets we serve; and
seasonality in demand.
We expect that product and price competition from other wireless device manufacturers will continue to play a
role in the M2M market. As a result of these factors, we may experience volatility in our results on a quarter-toquarter basis. Gross margin percentage may fluctuate from quarter-to-quarter depending on product and
customer mix, competitive selling prices and product costs.
11

On April 2, 2013, we completed the sale of substantially all of the assets and operations related to our AirCard
business to Netgear, Inc. (Netgear). Proceeds on disposition, after final inventory adjustments, were $136.6
million plus assumed liabilities and comprised of cash proceeds of $122.8 million, funds held in escrow of $13.8
million and assumed liabilities. After transaction costs of $2.8 million, we recorded an after tax gain on disposal of
$70.2 million. We expect to realize net cash proceeds of approximately $114 million from the divestiture after
giving consideration to related taxes, transaction costs and escrow retention for the purposes of indemnification.
Approximately 160 employees, primarily in sales, marketing and research and development, were transferred to
Netgear, as well as certain facilities in Carlsbad, California and Richmond, British Columbia. We intend to use a
substantial portion of the net proceeds from the transaction to accelerate our M2M leadership position through
acquisitions in the M2M market as evidenced by our recent acquisition of the AnyDATA M2M assets and the
pending acquisition of In Motion.
In accordance with U.S. GAAP, the results of operations and the gain on sale of the AirCard business have been
presented as discontinued operations in our consolidated statements of operations for the three years ended
December 31, 2013. The historical consolidated statements of operations and related selected financial
information have been retrospectively adjusted to distinguish between continuing operations and discontinued
operations.
Summarized results from discontinued operations for the years ended December 31 were as follows:
(in thousands of U.S. dollars)
Revenue
Cost of goods sold
Gross margin
Expenses
Earnings from operations
Income tax expense
Earnings from operations, net of taxes
Gain on sale of AirCard business, net of taxes
2013
46,701
32,978
13,723
12,918
805
399
406
70,182
70,588
2012
246,845
177,147
69,698
36,653
33,045
1,644
31,401
31,401
2011
245,010
183,300
61,710
37,369
24,341
3,003
21,338
21,338
During the year ended December 31, 2013, no customer accounted for more than 10% of our aggregated revenue,
from continuing and discontinued operations. During the year ended December 31, 2012, Sprint and AT&T each
accounted for more than 10% of our aggregated revenue, from continuing and discontinued operations, and on a
combined basis, accounted for 25% of the aggregated revenue.
12
CONSOLIDATED ANNUAL RESULTS OF OPERATIONS

2013
% of
Revenue
$
Revenue
Cost of goods sold
Gross margin
Expenses
Sales and marketing
Research and development
Administration
Restructuring
Integration
Acquisition
Impairment of intangible assets
Amortization
Foreign exchange gain (loss)
Other income (expense)
Loss before income taxes
Income tax expense (recovery)
Net earnings from discontinued
operations
Net earnings (loss)
Less: non-controlling interest
Net earnings (loss) attributable to the
Company
Net earnings (loss) per share
attributable to the Company - Basic and
diluted (in dollars)
Continuing operations
Discontinued operations
2012
2011
% of
Revenue
% of
Revenue
441,860
296,219
145,641
100.0 %
67.0 %
33.0 %
397,321
272,047
125,274
100.0 %
68.5 %
31.5 %
333,175
231,435
101,740
100.0 %
69.5 %
30.5 %
42,182
73,112
35,164
171
27
508
12,141
163,305
(17,664)
3,823
(98)
(13,939)
1,611
9.6 %
16.5 %
8.0 %
%
%
0.1 %
%
2.8 %
37.0 %
(4.0)%
37,067
61,785
32,777
2,251
3,182
10,418
147,480
(22,206)
3,326
(196)
(19,076)
(14,874)
9.3 %
15.6 %
8.2 %
0.6 %
%
0.8 %
%
2.6 %
37.1 %
(5.6)%
37,188
60,903
33,716
837
1,426
11,214
10,709
155,993
(54,253)
(460)
35
(54,678)
(3,968)
11.2 %
18.3 %
10.1 %
0.2 %
0.4 %
%
3.4 %
3.2 %
46.8 %
(16.3)%
(15,550)
(4,202)
(50,710)
70,588
55,038
31,401
27,199
21,338
(29,372)
(57)
55,038
27,199
(29,315)
(0.50)
(0.14)
(1.62)
2.29
1.02
0.68
1.79
0.88
(0.94)
Year Ended December 31, 2013 Compared to Year Ended December 31, 2012
Revenue
Revenue for the year ended December 31, 2013 increased by $44.6 million or 11.2% to $441.9 million, compared
to the prior year. The year-over-year revenue increase was driven by continued growth in both our Enterprise
Solutions and OEM Solutions segments, including a full year contribution from the M2M business of Sagemcom
acquired in August 2012.
13
Our geographic revenue mix for the years ended December 31, 2013 and 2012 was as follows:
RevenuebyGeographicRegion 2012 (%)
Americas
25%
Americas
31%
AsiaPacific
48%
AsiaPacific
55%
Europe,
MiddleEast
andAfrica
20%
Europe,
MiddleEast
andAfrica
21%
Gross margin
Gross margin was 33.0% of revenue for the year ended December 31, 2013, compared to gross margin of 31.5% of
revenue in 2012. The increase in gross margin was primarily related to favorable product mix and product cost
reductions. Gross margin included $0.4 million of stock-based compensation expense in 2013, compared to $0.3
million in 2012.
Sales and marketing
Sales and marketing expenses increased $5.1 million, or 13.8%, to $42.2 million in 2013, compared to 2012. The
increase in sales and marketing expenses was primarily due to additional costs following the acquisition of the
M2M business of Sagemcom ("Sagemcom") in August 2012, as well as investment in additional resources to
support our go to market strategy. Sales and marketing expenses included $1.9 million of stock-based
compensation expense in 2013, compared to $1.2 million in 2012.
Research and development (R&D) expenses increased by $11.3 million, or 18.3%, to $73.1 million in 2013,
compared to 2012. The increase in R&D expenses was primarily related to the additional R&D expenses we
incurred following the Sagemcom acquisition, as well as higher certification costs on new products launched
during the year and other net product development costs.
R&D expenses in 2013 included stock-based compensation expense of $1.4 million and acquisition amortization of
$5.5 million. R&D expenses in 2012 included stock-based compensation expense of $1.3 million and acquisition
amortization of $5.6 million.
Administration
Administration expenses increased by $2.4 million, or 7.3%, to $35.2 million in 2013, compared to 2012 due to
higher professional fees, bad debt expense and other personnel related costs. Administration expenses included
stock-based compensation expense of $4.3 million and $3.0 million in 2013 and 2012, respectively.
Acquisition
Acquisition costs of $0.5 million in 2013 related to the acquisition of the M2M business of AnyDATA and In Motion.
Acquisition costs of $3.2 million in 2012 related to the Sagemcom acquisition.
Restructuring
Restructuring costs were $0.2 million in 2013, compared to $2.3 million in 2012. Restructuring costs in 2013 and
2012 related primarily to the closure of our Newark, California facility, effective December 31, 2012.
14
Amortization
Amortization expense increased by $1.7 million, or 16.5%, to $12.1 million in 2013, primarily due to the Sagemcom
acquisition. Amortization expense in 2013 included $8.2 million of acquisition amortization compared to $6.3
million in 2012.
Foreign exchange gain was $3.8 million in 2013 compared to a gain of $3.3 million in 2012. Foreign exchange gain
in 2013 and 2012 included a net foreign exchange gain of $2.7 million on revaluation of an intercompany loan to a
self-sustaining subsidiary. Foreign exchange gain in 2012 was partially offset by a loss of $1.8 million related to the
settlement of foreign currency forward exchange contracts that we entered in connection with the acquisition of
the M2M business of Sagemcom in 2012.
Foreign exchange rate changes also impacted our Euro and Canadian dollar denominated revenue and operating
expenses. We estimate that net changes in exchange rates between 2013 and 2012 positively impacted our 2013
revenues by approximately $1.0 million. We estimate that the negative impact on operating expenses during 2013
was approximately $0.5 million.
Income tax expense increased by $16.5 million to $1.6 million, compared to 2012. This was driven by recognition
of certain tax assets in 2012 that were realizable upon the sale of the AirCard business, resulting in a substantial
income tax recovery in 2012.
Net loss from continuing operations increased by $11.3 million to a net loss of $15.6 million, compared to 2012.
Improved operating earnings, driven by higher revenues and gross margin were more than offset by the absence
of significant tax recoveries in 2013 compared to 2012, associated with the sale of the AirCard business.
Net loss from continuing operations in 2013 included stock-based compensation expense of $8.0 million and
acquisition amortization of $13.7 million. Net loss from continuing operations in 2012 included stock-based
compensation expense of $5.8 million and acquisition amortization of $11.9 million.
Net earnings attributable to the Company increased by $27.8 million to $55.0 million, compared to 2012. The
after-tax gain of $70.2 million on the sale of our AirCard business was partially offset by higher net loss from
continuing operations.
Weighted average number of shares
The weighted average basic and diluted number of shares outstanding was 30.8 million for the years ended
December 31, 2013 and 2012.
The number of shares outstanding was 31.1 million at December 31, 2013, compared to 30.6 million at
December 31, 2012. The increase in number of shares outstanding was primarily due to issuance of common
shares as a result of stock option exercises partially offset by purchases of 510,439 of the Companys common
shares on the Toronto Stock Exchange (TSX) and NASDAQ under our normal course issuer bid approved February
6, 2013.
15
Year Ended December 31, 2012 Compared to Year Ended December 31, 2011
Revenue
In 2012, revenue increased by $64.1 million, or 19.3% to $397.3 million, compared to 2011, driven primarily by
significant growth in our OEM Solutions segment, including a contribution from the acquired M2M business of
Sagemcom.
Our geographic revenue mix for the years ended December 31, 2012 and 2011 was as follows:

Americas
25%
Americas
25%
AsiaPacific
48%
AsiaPacific
55%
Europe,
MiddleEast
andAfrica
20%
Europe,
MiddleEast
andAfrica
27%
Gross margin
Gross margin was 31.5% of revenue for the year ended December 31, 2012, compared to 30.5% of revenue in
2011. The increase in gross margin was primarily related to product cost reductions and favorable product mix.
Gross margin included $0.3 million of stock-based compensation expense in 2012, compared to $0.4 million in
2011.
Sales and marketing
Sales and marketing expenses decreased by $0.1 million, or 0.3%, to $37.1 million in 2012, compared to 2011.
Sales and marketing expenses included $1.2 million of stock-based compensation expense in 2012, compared to
$1.1 million in 2011.
R&D expenses increased by $0.9 million, or 1.4%, to $61.8 million in 2012, compared to 2011. The increase in R&D
expenses was primarily related to the additional R&D expenses we incurred as a result of the Sagemcom
acquisition, partially offset by the positive impact of foreign exchange rates.
R&D expenses for 2012 included stock-based compensation expense of $1.3 million and acquisition amortization
of $5.6 million. R&D expenses in 2011 included stock-based compensation expense of $1.1 million and acquisition
amortization of $6.9 million.
Administration
Administration expenses decreased by $0.9 million, or 2.8%, to $32.8 million in 2012, compared to 2011.
Administration expenses included stock-based compensation expense of $3.0 million and $2.9 million in 2012 and
2011, respectively.
Acquisition
Acquisition costs were $3.2 million during 2012 and $nil in 2011. Acquisition costs in 2012 were related to the
acquisition of the M2M business of Sagemcom.
16
Restructuring
Restructuring costs were $2.3 million in 2012 compared to $0.8 million in 2011. Restructuring costs in 2012
related primarily to the closure of our Newark, California facility. Restructuring costs in 2011 represented costs
incurred for reductions related to the new organizational structure announced in September 2010.
Integration costs
Integration costs were $nil during 2012, compared to $1.4 million in 2011. Integration costs in 2011 were primarily
related to office space optimization in France.
Impairment of intangible asset
Impairment of intangible asset was $nil during 2012 compared to $11.2 million in 2011. The impairment charge in
2011 primarily related to a software development program we acquired through the acquisition of Wavecom, SA
("Wavecom"), which we abandoned in 2011.
Amortization
Amortization expense decreased by $0.3 million, or 2.7%, to $10.4 million in 2012 compared to 2011.
Amortization expense in 2012 included $6.3 million of acquisition amortization compared to $6.0 million in 2011.
Foreign exchange gain was $3.3 million in 2012 compared to foreign exchange loss of $0.5 million in 2011. Foreign
exchange gain in 2012 included a net foreign exchange gain of $2.7 million on revaluation of an intercompany loan
to a self-sustaining subsidiary and a loss of $1.8 million related to the settlement of foreign currency forward
exchange contracts that we had entered into in connection with the acquisition of the M2M business of
Sagemcom.
Foreign exchange rate changes also impacted our Euro and Canadian dollar denominated revenue and operating
expenses. We estimate that changes in exchange rates between 2011 and 2012 negatively impacted our 2012
revenues by approximately $2.4 million. We estimate that the favorable impact on operating expenses during
2012 was approximately $3.6 million.
Income tax recovery
Income tax recovery increased by $10.9 million in 2012 to $14.9 million compared to 2011, primarily driven by the
recognition of certain tax assets that will be realizable as a result of the sale of the AirCard business.
In 2012, net loss from continuing operations was $4.2 million, an improvement of $46.5 million, compared to
2011. This improvement reflects the positive impact of higher revenue and gross margin, combined with lower
operating expenditures, as well as the impact of favorable foreign exchange and tax recoveries in 2012.
Net loss from continuing operations in 2012 included stock-based compensation expense of $5.8 million and
acquisition amortization of $11.9 million. Net loss from continuing operations in 2011 included stock-based
compensation expense of $5.5 million, acquisition amortization of $12.9 million, and an after-tax impairment
charge of $11.2 million.
Net earnings attributable to the Company increased by $56.5 million to net earnings of $27.2 million in 2012,
compared to 2011. This increase reflects the increase in net earnings from continuing operations, combined with
a $10.1 million increase in net earnings from discontinued operations.
Weighted average number of shares
The weighted average basic and diluted number of shares outstanding was 30.8 million for the year ended
December 31, 2012, compared to 31.3 million for the year ended December 31, 2011.
17
The number of shares outstanding was 30.6 million at December 31, 2012, compared to 31.3 million at
December 31, 2011. The reduction in number of shares outstanding was primarily due to purchases of 800,000 of
the Company's common shares on the TSX and NASDAQ under our normal course issuer bid approved December
13, 2011.
Revenue and gross margin by segment for the years ending December 31 were as follows:
2013
OEM Solutions
Revenue
Cost of goods sold
Gross margin
Gross margin %
$ 382,016
266,867
$ 115,149
30.1%
Revenue
Cost of goods sold
Gross margin
Gross margin %
$
$
59,844
29,352
30,492
51.0%
2012
$
$
$
$
346,543
246,284
100,259
28.9%
50,778
25,763
25,015
49.3%
2011
$ 290,463
210,138
$ 80,325
27.7%
$
$
42,712
21,297
21,415
50.1%
Our OEM Solutions revenue increased by $35.5 million, or 10.2%, to $382.0 million in 2013 compared to 2012.
This increase was primarily due to a full year contribution from the M2M business of Sagemcom acquired on
August 1, 2012, along with strong organic sales in certain market segments. Gross margin percentage improved in
2013 as a result of product cost reductions and the addition of higher margin GSMR products acquired from
Sagemcom, partially offset by greater mix of other lower margin embedded modules.
Our Enterprise Solutions revenue increased by $9.1 million, or 17.9%, to $59.9 million in 2013 compared to 2012.
The increase was largely driven by strong sales growth of our new 4G products. Gross margin percentage
improved in 2013, driven primarily by strong growth in new higher margin 3G and 4G products, as well as product
cost reductions.
FOURTH QUARTER OVERVIEW

In the fourth quarter of 2013 our revenue increased sequentially primarily driven by higher sales to certain market
segments. Gross margin percentage was slightly lower than the third quarter of 2013 due to changes in product
mix and stronger revenue contribution from higher volume customers. Operating expenses increased modestly
compared to the third quarter of 2013, reflecting the addition of AnyDATA and targeted investments in sales and
marketing, as well as R&D.
Financial highlights for the fourth quarter of 2013:
GAAP:
Record revenue of $118.6 million from our continuing business, up 5.7%, compared to $112.3 million in
the third quarter of 2013.
Gross margin of 32.4%, compared to 33.3% in the third quarter of 2013.
Operating loss from continuing operations of $3.5 million, in line with the third quarter of 2013.
18
Net loss from continuing operations of $1.9 million or $0.06 per diluted share, compared to net earnings
from continuing operations of $1.1 million or $0.03 per diluted share in the third quarter of 2013.
NON-GAAP:
Gross margin of 32.5%, compared to 33.4% in the third quarter of 2013.
Operating earnings from continuing operations of $2.6 million, compared to $2.4 million in the third
quarter of 2013.
Adjusted EBITDA of $6.2 million, compared to $5.9 million in the third quarter of 2013.
Net earnings from continuing operations of $3.1 million or $0.10 per diluted share, in line with the third
quarter of 2013.
CONSOLIDATED FOURTH QUARTER RESULTS OF OPERATIONS

Revenue
Cost of goods sold
Gross margin
Expenses
Sales and marketing
Administration
Restructuring
Integration
Acquisition
Amortization
Three months ended December 31,

2013
2012
% of
% of
$
Revenue
$
Revenue
118,608
100.0 %
109,405
100.0 %
80,165
67.6 %
73,172
66.9 %
38,443
32.4 %
36,233
33.1 %
10,693
19,074
8,841
14
369
2,999
41,990
(3,547)
1,921
26
(1,600)
345
(1,945)
1,078

Foreign exchange gain
Other income
Earnings (loss) before income taxes
Net earnings (loss)
Net earnings (loss) per share - Basic and diluted (in
dollars)
19
9.0 %
16.1 %
7.5 %
%
%
0.3 %
2.5 %
35.4 %
(3.0)%
10,176
16,294
7,743
42
387
3,107
37,749
(1,516)
1,608
35
127
(15,396)
15,523
4,083
(867)
19,606
(0.06)
0.03
(0.03)
0.50
0.14
0.64
9.3 %
14.9 %
7.1 %
%
%
0.4 %
2.8 %
34.5 %
(1.4)%
SUMMARY OF QUARTERLY RESULTS OF OPERATIONS

The following tables highlight selected financial information for each of the eight most recent quarters that, in
managements opinion, have been prepared on a basis consistent with the audited consolidated financial
statements for the year ended December 31, 2013. The selected financial information presented below reflects all
adjustments, consisting primarily of normal recurring adjustments, which are, in the opinion of management,
necessary for a fair presentation of results for the interim periods. These results are not necessarily indicative of
results for any future period. You should not rely on these results to predict future performance.
2013
2012
Q4
Q3
Q2
Q1
Q4
Q3
Q2
Q1
$ 118,608
$ 112,262
$ 109,589
$ 101,401
$109,405
$100,183
$ 95,398
$ 92,335
Cost of goods sold
80,165
74,916
73,115
68,023
73,172
69,097
65,317
64,461
Gross margin
38,443
37,346
36,474
33,378
36,233
31,086
30,081
27,874
32.4%
33.3%
33.3%
32.9%
33.1%
31.0%
31.5%
30.2%
Sales and marketing
10,693
10,452
10,681
10,356
10,176
8,572
8,998
9,321
19,074
17,806
17,869
18,363
16,294
15,886
14,674
14,931
8,841
9,297
8,903
8,123
7,743
8,013
8,562
8,459
Restructuring costs
14
14
26
117
42
498
1,531
180
Integration costs
27
Acquisition costs
369
139
387
2,196
599
2,999
2,939
2,927
3,276
3,107
2,649
2,275
2,387
41,990
40,647
40,406
40,262
37,749
37,814
36,639
35,278
(3,547)
(3,301)
(3,932)
(6,884)
(1,516)
(6,728)
(6,558)
(7,404)
1,921
2,563
1,709
(2,370)
1,608
1,176
34
(132)
35
(70)
127
(5,622)
(6,212)
(7,369)
(124)
Revenue
Gross margin %
Expenses
Administration
Amortization
Operating income (loss) from
continuing operations
Other income (expense)
26
Earnings (loss) from continuing

operations before income tax
(1,600)
345
Net earnings (loss) from

continuing operations
(1,945)
Net earnings (loss) from

discontinued operations
1,078
Net earnings (loss) attributable

to the Company
(26)
336
206
10
(171)
(764)
(2,189)
(9,386)
(1,839)
4,553
(1,448)
(15,396)
(2,010)
2,656
1,075
(6,742)
(7,938)
15,523
(3,612)
(8,868)
(7,245)
68,152
1,863
4,083
7,279
12,449
7,590
(505)
(867)
570
$ 61,410
$ (6,075)
$ 19,606
3,667
3,581
345
Basic
(0.03)
0.02
2.00
(0.20)
0.64
0.12
0.12
0.01
Diluted
(0.03)
0.02
2.00
(0.20)
0.64
0.12
0.12
0.01
Earnings (loss) per share GAAP in dollars
Weighted average number of

shares (in thousands)
Basic
30,804
30,688
30,768
30,695
30,591
30,573
30,817
31,175
Diluted
30,804
31,176
30,768
30,695
30,774
30,573
30,817
31,175
20
Our quarterly results may fluctuate from quarter-to-quarter, driven by variation in sales volume, product mix and
the combination of variable and fixed operating expenses. The impact of significant items incurred during the first
three interim periods of year ended December 31, 2013 are discussed in more detail and disclosed in our quarterly
reports and managements discussion and analysis. Factors affecting our quarterly results in 2013 were as follows:
In the first quarter of 2013, net earnings from continuing operations decreased $23.5 million, or $0.76 per
common share to a loss of $7.9 million, compared to the fourth quarter of 2012. The decrease was largely related
to lower sequential revenue following an exceptionally strong fourth quarter of 2012, higher operating expenses
as a result of higher new product certification costs and the absence of a large tax recovery related to the
disposition of the AirCard business that was recorded in the fourth quarter of 2012. Net earnings from
discontinued operations were $2.2 million lower than the prior quarter.
In the second quarter of 2013, net earnings from continuing operations improved by $1.2 million, or $0.04 per
common share to a loss of $6.7 million, compared to the first quarter of 2013 driven by sequential revenue growth
and gross margin improvement. Net earnings from discontinued operations were $66.3 million higher than the
prior quarter due to the after-tax gain recorded on the sale of the AirCard business.
In the third quarter of 2013, net earnings from continuing operations improved by $7.8 million, or $0.25 per
common share to $1.1 million, compared to the second quarter of 2013, driven by a combination of higher
revenue and a year-to-date income tax recovery. A portion of the recovery, amounting to $0.5 million, related to
the first half of the year. Net earnings from discontinued operations decreased by $68.7 million from the prior
quarter, reflecting the absence of the after-tax gain on the sale of the AirCard business recorded in the second
quarter of 2013.
In the fourth quarter of 2013, net earnings from continuing operations decreased by $3.0 million, or $0.10 per
common share to a loss of $1.9 million, compared to the third quarter of 2013, primarily due to the absence of the
year-to-date income tax recovery recorded in the prior quarter and a lower foreign exchange gain. The impact of
higher revenues in the fourth quarter was offset by slightly lower percentage gross margin and modestly higher
operating expenses.
21
LIQUIDITY AND CAPITAL RESOURCES

Selected Financial Information:
2013
Cash flows provided before changes in non-cash working capital:
Changes in non-cash working capital
Accounts receivable
Inventories
Prepaid expense and other
Accounts payable and accrued liabilities
Deferred revenue and credits
Cash flows provided by (used in):
Operating activities
14,307
2012
$
10,897
11,908
(7,254)
(13,139)
1,147
3,559
$
17,866
46,656
2011
$
(616)
(4,019)
(14,543)
10,997
(422)
(8,603)
$
38,053
17,814
9,067
5,664
4,248
(13,783)
733
5,929
23,743
Investing activities
Net proceeds from sale of AirCard business
Acquisition of M2M business of AnyDATA
Acquisition of M2M business of Sagemcom
Capital expenditures and increase in intangible assets
Net change in short-term investments
Purchase of Wavecom S.A. shares
98,754 $
119,958
(5,196)
(13,570)
(2,470)
(64,184) $
(55,218)
(18,452)
9,347
(2,706)
(18,008)
17,058
(1,787)
Financing activities
Issue of common shares
Repurchase of common shares for cancellation
Purchase of treasury shares for RSU distribution
(1,975) $
8,106
(5,772)
(3,433)
(9,365) $
436
(6,312)
(2,489)
(4,858)
519
(4,472)
Operating Activities
Cash provided by operating activities decreased $20.2 million to $17.9 million during the year ended
December 31, 2013, compared to the same period of 2012. The decrease in cash provided was due to lower
earnings from our discontinued operations partially offset by lower working capital requirements.
Investing Activities
Cash provided by investing activities increased $162.9 million to $98.8 million during the year ended December 31,
2013, compared to the same period of 2012. The increase in cash provided by investing activities was mainly due
to the sale of the AirCard business partially offset by the purchase of the M2M modules and modem business of
AnyDATA, the impact of the acquisition of the M2M business of Sagemcom in the prior year, and net change in
short-term investments.
Cash used for the purchase of capital equipment was primarily for production and tooling equipment, research
and development equipment, and computer equipment and software, while cash used for intangible assets was
driven primarily by patent registration costs and software licensing costs.
Financing Activities
Cash used for financing activities decreased $7.4 million to $2.0 million during the year ended December 31, 2013,
compared to 2012. The decrease was primarily due to proceeds received on the issuance of common shares
resulting from a higher number of stock option exercises.
22
In the year ended December 31, 2013, we purchased 510,439 common shares under our normal course issuer bid
and purchased 270,265 of our common shares to satisfy obligations under our restricted share unit plan, in the
amounts of $5.8 million and $3.4 million, respectively. In 2012, we purchased 800,000 common shares under our
normal course issuer bid and purchased 336,638 of our common shares to satisfy obligations under our restricted
share unit plan, in the amounts of $6.3 million and $2.5 million, respectively.
Cash Requirements
Our near-term cash requirements are primarily related to funding our operations, capital expenditures, intellectual
property (IP) licenses, and other obligations discussed below. On October 16, 2013, we completed the
acquisition of the M2M modules and modem business of AnyDATA, a transaction that was funded by $5.2 million
in cash. We expect to utilize approximately $21 million plus ordinary course working capital, for the acquisition of
In Motion. We continue to believe our cash, cash equivalents and short term investments balance of $179.9
million at December 31, 2013 and cash generated from continuing operations will be sufficient to fund our
expected working capital requirements for at least the next twelve months based on current business plans. Our
capital expenditures during the first quarter of 2014 are expected to be primarily for research and development
equipment, tooling, leasehold improvements, software licenses and patents. However, we cannot be certain that
our actual cash requirements will not be greater than we currently expect.
The following table presents the aggregate amount of future cash outflows for contractual obligations as of
December 31, 2013.
Payments due by period
(In thousands of dollars)
2014
Operating lease obligations
Capital lease obligations

Purchase obligations
(1)
Other long-term liabilities
(2)
Total
2015
5,032
2016
4,164
2017
3,970
2018
3,782
Thereafter
3,672
7,298
381
240
83
12
77,708
19,073
1,896
83,121
23,477
4,053
3,794
3,672
9,194
(1)
Purchase obligations represent obligations with certain contract manufacturers to buy minimum amount of designated products between
January 2014 and March 2014. In certain of these arrangements, we may be required to acquire and pay for such products up to the
prescribed minimum or forecasted purchases.
(2)
Other long-term liabilities include the long-term portions of accrued royalties.
Capital Resources
(In thousands of dollars)
Cash and cash equivalents
Short-term investments
Dec 31
2013
Sept 30
June 30
Mar 31
Dec 31
2012
Sept 30
June 30
Mar 31
Unused credit facilities
$177,416
2,470
179,886
10,000
$183,220
5,221
188,441
10,000
$166,573
10,000
176,573
10,000
$ 55,923
55,923
50,000
$ 63,646
63,646
50,000
$ 59,528
59,528
10,000
$123,159
2,153
125,312
10,000
$106,773
106,773
10,000
Total
$189,886
$198,441
$186,573
$105,923
$113,646
$ 69,528
$135,312
$116,773
Credit Facilities
On October 31, 2013, we renewed our $10 million revolving term credit facility ("Revolving Facility") for a two year
term expiring on October 31, 2015. The Revolving Facility with Toronto Dominion Bank and the Canadian Imperial
Bank of Commerce is for working capital requirements, is secured by a pledge against all of our assets and is
subject to borrowing base limitations. Other terms of the Revolving Facility remain substantially unchanged. As at
December 31, 2013, there were no borrowings under the Revolving Facility.
23
Letters of Credit
We have entered into a standby letter of credit facility agreement under which we have issued two performance
bonds to third party customers in accordance with specified terms and conditions. At December 31, 2013, we had
two Euro denominated performance bonds amounting to 50 thousand expiring in June 2014 (December 2012 50 thousand). The carrying value of these instruments approximates their fair market value.
Normal Course Issuer Bid
On February 6, 2013, we received approval from the TSX of our Notice of Intention to make a Normal Course Issuer
Bid (the 2013 Bid). Pursuant to the 2013 Bid, we can purchase for cancellation up to 1,529,687 of our common
shares, or approximately 5% of the common shares outstanding as of the date of the announcement. The 2013
Bid commenced on February 14, 2013 and terminated on February 13, 2014. During 2013, we purchased and
canceled 510,439 common shares for an average price of $11.31 per share.
NON-GAAP FINANCIAL MEASURES

Our consolidated financial statements are prepared in accordance with U.S. GAAP on a basis consistent for all
periods presented. In addition to results reported in accordance with U.S. GAAP, we use non-GAAP financial
measures as supplemental indicators of our operating performance. The term non-GAAP financial measure is
used to refer to a numerical measure of a companys historical or future financial performance, financial position
or cash flows that: (i) excludes amounts, or is subject to adjustments that have the effect of excluding amounts,
that are included in the most directly comparable measure calculated and presented in accordance with U.S. GAAP
in a companys statement of earnings, balance sheet or statement of cash flows; or (ii) includes amounts, or is
subject to adjustments that have the effect of including amounts, that are excluded from the most directly
comparable measure so calculated and presented.
Our non-GAAP financial measures include non-GAAP gross margin, non-GAAP earnings (loss) from operations,
Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) and non-GAAP diluted earnings
(loss) per share, respectively. We disclose non-GAAP amounts as we believe that these measures provide useful
information on actual operating results and assist in comparisons from one period to another. Readers are
cautioned that non-GAAP financial measures do not have any standardized meaning prescribed by U.S. GAAP and
therefore may not be comparable to similar measures presented by other companies. Non-GAAP results exclude
the impact of stock-based compensation expense, amortization related to acquisitions, acquisition and disposition
costs, restructuring costs, integration costs, impairment, foreign exchange gains or losses on foreign currency
contracts and translation of balance sheet accounts and certain tax adjustments.
Adjusted EBITDA as defined equates earnings (loss) from operations plus stock-based compensation, acquisition,
restructuring, integration, transaction costs, amortization and impairment. Adjusted EBITDA can also be calculated
as non-GAAP earnings (loss) from operations plus amortization excluding acquisition related amortization.
24
The following table provides a reconciliation of the non-GAAP financial measures to our U.S. GAAP results for years
ended December 31:
2013
Gross margin - GAAP
Stock-based compensation
Gross margin - Non-GAAP
Loss from operations - GAAP

Acquisition
Restructuring
Integration
Acquisition related amortization
Earnings (loss) from operations - Non-GAAP
Amortization (excluding acquisition related amortization)
Adjusted EBITDA
$
$
125,274
304
125,578
$
$
101,740
385
102,125
(22,206) $
5,781
3,182
2,251
11,890
898 $
11,747
12,645 $
(54,253)
5,498
837
1,426
11,214
12,888
(22,390)
12,761
(9,629)
(15,550) $
(4,202) $
(50,653)
22,620
(3,912)
3,784
Net earnings from discontinued operations - GAAP

Stock-based compensation and disposition costs
Gain on sale of AirCard business
Net earnings from discontinued operations - Non-GAAP
Net earnings (loss) - GAAP

Net earnings (loss) - Non-GAAP
Diluted earnings (loss) from continuing operations per share

GAAP - (in dollars)
Non-GAAP - (in dollars)
$
$
Net earnings (loss) per share attributable to the Company - diluted

GAAP - (in dollars)
$
$
25
145,641
406
146,047
2011
(17,664) $
7,990
508
171
27
280
13,741
5,053 $
13,649
18,702 $
Net loss from continuing operations attributable to the Company - GAAP

Stock-based compensation, restructuring and other, integration, and
acquisition related amortization, net of tax
Unrealized foreign exchange loss (gain)
Income tax adjustments
Non-controlling interest
Net earnings (loss) from continuing operations attributable to the
Company - Non-GAAP
2012
6,942
22,241
(3,139)
(15,344)
70,588 $
4,014
(70,182)
4,420 $
55,038
11,362
(0.50) $
0.23 $
1.79
0.37
$
$
31,762
267
(32)
(444) $
(18,656)
31,401
2,395
33,796
27,199
33,352
(29,315)
3,633
(0.14) $
(0.01) $
(1.62)
(0.60)
0.88
1.08
$
$
21,338
951
22,289
(0.94)
0.12
The following table provides a quarterly reconciliation of the non-GAAP financial measures to our U.S. GAAP
results:
2013
Gross margin - GAAP
2012
Q4
Q3
Q2
Q1
Q4
Q3
Q2
Q1
$38,443
$37,346
$ 36,474
$33,378
$36,233
$31,086
$30,081
$ 27,874
119
117
95
75
61
82
78
83
Gross margin - Non-GAAP
$38,562
$37,463
$ 36,569
$33,453
$36,294
$31,168
$30,159
$ 27,957
Loss from operations - GAAP
$ (3,547) $ (3,301) $ (3,932) $ (6,884)
Acquisition
Restructuring
2,177
2,145
369
139
14
14
2,013
$ (1,516) $ (6,728) $ (6,558) $ (7,404)
1,655
1,470
1,462
1,403
1,446
387
2,196
599
26
117
42
498
1,531
180
Integration
27
280
3,580
3,405
3,363
3,393
3,338
2,906
2,665
2,981
$ 2,593
$ 2,402
$ 1,470
Acquisition related amortization

Earnings (loss) from operations - NonGAAP
$ (1,412)
$ 3,721
334
$ (360) $ (2,797)
Amortization (excluding acquisition

related amortization)
Adjusted EBITDA
3,566
3,468
3,403
3,212
3,293
$ 2,904
$ 2,717
$ 2,833
$ 6,159
$ 5,870
$ 4,873
$ 1,800
$ 7,014
$ 3,238
$ 2,357
Net earnings (loss) from continuing

operations - GAAP
$ (1,945) $ 1,075
$15,523
$ (3,612) $ (8,868) $ (7,245)
$ (6,742) $ (7,938)
Stock-based compensation, restructuring

and other, integration, and acquisition
related amortization, net of tax
6,112
5,760
5,393
5,355
Unrealized foreign exchange loss (gain)
(1,970)
(2,457)
(1,359)
Income tax adjustments
925
(895)
Net earnings (loss) from continuing

operations - Non-GAAP
$ 3,122
$ 3,483

operations - GAAP
$ 1,078
Stock-based compensation and

disposition costs
(1,056)

operations - Non-GAAP
Net earnings (loss) - GAAP
$ (867) $
Net earnings (loss) - Non-GAAP
25
3,147
3,754
$ 1,046
(505) $ 68,152
5,162
6,885
1,874
(1,655)
(1,218)
(14,540)
(804)
36
5,658
4,536
(165)
(101)
$ (709)
$ 4,490
$ 1,251
$ (3,375) $ (2,810)
$ 1,863
$ 4,083
$ 7,279
$12,449
$ 7,590
1,402
876
1,733
1,696
233
233
233
(49)
(69,077)
(49) $ 3,596
$ 5,779
$ 7,512
$12,682
$ 7,823
$19,606
$ 3,667
$ 3,581
10,269
8,763
9,307
848
570
$ 61,410
4,331
997
$ (6,075)
2,887
345
5,013
Diluted earnings (loss) from continuing

operations per share
GAAP - (in dollars)
$ (0.06) $
0.03
$ (0.22) $ (0.26)
0.50
$ (0.12) $ (0.29) $ (0.23)
$ 0.10
0.11
0.03
$ (0.02)
0.15
0.04
$ (0.11) $ (0.09)
GAAP - (in dollars)
$ (0.03) $
0.02
2.00
$ (0.20)
0.64
0.12
$ 0.12
0.01
$ 0.10
0.14
0.03
$ 0.09
0.33
0.29
$ 0.30
0.16
Net earnings (loss) per share

attributable to the Company - diluted
$
26
OFF-BALANCE SHEET ARRANGEMENTS

We did not have any off-balance sheet arrangements during the years ended December 31, 2013 and 2012.
TRANSACTIONS BETWEEN RELATED PARTIES

We did not undertake any transactions with related parties during the year ended December 31, 2013 and 2012.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES

We prepare our consolidated financial statements in accordance with U.S. GAAP and we make certain estimates
and assumptions that affect the reported amounts of assets, liabilities, revenue, expenses and the related
disclosure of contingent liabilities. Note 2, Summary of significant accounting policies, in the December 31, 2013
consolidated financial statements includes a summary of the significant accounting policies used in the
preparation of our consolidated financial statements. While all of the significant accounting policies are important
to the annual consolidated financial statements, some of these policies may be viewed as involving a high degree
of judgment.
On an ongoing basis, we evaluate our estimates and judgments, including those related to business combinations,
revenue recognition, adequacy of allowance for doubtful accounts, adequacy of inventory reserve, valuation of
goodwill and intangible assets, income taxes, useful lives of assets, adequacy of warranty reserve, royalty
obligations, contingencies, stock-based compensation, and fair value measurement. We base our estimates on
historical experience, anticipated results and trends and on various other assumptions that we believe are
reasonable under the circumstances. By their nature, estimates are subject to an inherent degree of uncertainty.
Actual results could differ from our estimates.
The following critical accounting policies require managements most difficult, subjective and complex judgments,
and are subject to measurement uncertainty.
Business combinations
We account for our business combinations using the acquisition method. Under this method, estimates we make
to determine the fair values of acquired assets and liabilities assumed include judgments in our determinations of
acquired intangible assets and assessment of the fair value of existing property and equipment. Assumed
liabilities can include litigation and other contingency reserves existing at the time of the acquisition. Goodwill is
recognized as of the acquisition date as the excess of the purchase price over the estimated fair values of net
identifiable assets acquired and liabilities assumed at their acquisition date. Acquisition related expenses are
separately recognized from business combination and are expensed as incurred.
When establishing fair values, we make significant estimates and assumptions, especially with respect to
intangible assets. Intangible assets acquired and recorded by us may include patents, intellectual property,
customer relationships, backlog and in-process research and development. Estimates include but are not limited
to the forecasting of future cash flows and discount rates. From time to time, we may engage third-party firms to
assist us in determining the fair value of assets and liabilities assumed. Our estimates of fair values are based
upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable. As a result,
actual results may differ from estimates impacting our earnings.
Revenue recognition
We recognize revenue from sales of products and services upon the later of transfer of title or upon shipment of
the product to the customer or rendering of the service, so long as persuasive evidence of an arrangement exists,
27
delivery has occurred, price is fixed or determinable, and collection is reasonably assured. Customers include
resellers, original equipment manufacturers and mobile network operators. We record deferred revenue when we
receive cash in advance of the revenue recognition criteria being met. A significant portion of our revenue is
generated from sales to resellers. We recognize revenue on the portion of sales to certain resellers that are
subject to contract provisions allowing various rights of return and stock rotation, upon the earlier of when the
rights have expired or the products have been reported as sold by the resellers. Revenues from contracts with
multiple-element arrangements, such as those including technical support services, are recognized as each
element is earned based on the relative fair value of each element and only when there are no undelivered
elements that are essential to the functionality of the delivered elements. Revenue from licensed software is
recognized at the inception of the license term. Revenue from software maintenance, unspecified upgrades and
technical support contracts is recognized over the period such items are delivered or services are provided.
Technical support contracts extending beyond the current period are recorded as deferred revenue.
Funding from certain research and development agreements is recognized as revenue when certain criteria
stipulated under the terms of those funding agreements have been met and when there is reasonable assurance
the funding will be received. Certain research and development funding will be repayable only on the occurrence
of specified future events. We recognize the liability to repay research and development funding in the period in
which conditions arise that would cause research and development funding to be repayable. Government research
and development arrangements are recognized as a reduction of the related expense when the criteria stipulated
under the terms of the agreements have been met and when there is reasonable assurance the funding will be
received.
Allowance for doubtful accounts
We maintain an allowance for doubtful accounts for estimated losses that may arise if any of our customers are
unable to make required payments. We consider the following factors when determining whether collection is
reasonably assured: customer credit-worthiness, past transaction history with the customer, insured amounts, if
any, current economic industry trends and changes in customer payment terms. If we have no previous
experience with the customer, we typically obtain reports from credit organizations to ensure that the customer
has a history of paying its creditors. We may also request financial information, including financial statements, to
ensure that the customer has the means of making payment. If these factors indicate collection is not reasonably
assured, revenue is deferred until collection becomes reasonably assured, which is generally upon receipt of cash.
If the financial condition of any of our customers deteriorates, we may increase our allowance.
As at December 31, 2013, Accounts receivable comprised 22.0% of total assets. Included in this balance was a
provision of $2.3 million for doubtful accounts, or 2.0% of accounts receivable (as at December 31, 2012 - $2.4
million for doubtful accounts, or 2.2% of accounts receivable). We believe our allowance for doubtful accounts as
at December 31, 2013 is adequate to provide for probable losses existing in accounts receivable.
Inventory
We value our inventory at the lower of cost, determined on a first-in-first-out basis, and estimated net realizable
value. We assess the need for an inventory write-down and/or an accrual for estimated losses on inventory
purchase commitments based on our assessment of estimated market value using assumptions about future
demand and market conditions. Our reserve requirements generally increase as our projected demand
requirements decrease, due to market conditions, technological and product life cycle changes and longer than
previously expected usage periods. If market conditions are worse than our projections, we may further writedown the value of our inventory or increase the accrual for estimated losses on inventory purchase commitments.
Goodwill and intangible assets
Goodwill and intangible assets are assessed for impairment on an annual basis and between annual tests
whenever circumstances indicate that the carrying value of the goodwill and intangible assets might be impaired.
28
Circumstances may include an adverse change in business climate or a more likely than not expectation that a
reporting unit will be sold or disposed. On at least a quarterly basis, we assess whether such circumstances exist.
An evaluation of recoverability of goodwill requires judgment, including the identification of reporting units,
assigning assets and liabilities to reporting units, assigning goodwill to reporting units, and determining the
estimated fair value of each reporting unit. Significant judgments that are required on our part to estimate the fair
value of reporting units include estimating future cash flows, determining appropriate discount rates,
consideration of appropriate control premium, market conditions, and other assumptions. Changes in these
estimates and assumptions could materially affect the determination of fair value for each reporting unit and may
result in impairment charges in future periods.
We implemented a new organization structure during the fourth quarter of 2010 and effective January 1, 2011 we
had three reporting units for the purposes of goodwill determination, until we disposed of our AirCard business
reporting unit in the second quarter of 2013. Effective December 31, 2013, we have two reporting units for the
purpose of goodwill determination. As the fair value in each reporting unit exceeded the respective carrying
amounts, the second step of the impairment test that measures the amount of an impairment loss by comparing
the implied fair market value of the reporting unit with the carrying amount of the goodwill of the reporting unit
was not required. No impairment of goodwill was recorded during the years ended December 31, 2013 and 2012.
At December 31, 2013, our goodwill balance was $102.7 million. We determined that there was no impairment as
the fair values of each of our two reporting units exceeded their respective carrying values. Our analysis took into
consideration an income valuation approach using the expected discounted cash flows for each reporting unit. The
principal factors used in the discounted cash flow analysis were the projected results of operations, the discount
rate based on our estimated weighted average cost of capital, and terminal value assumptions for each reporting
unit. The discounted cash flow model used was based on our business plan, as approved by our Board of
Directors. For years subsequent to those contained in our business plan, we analyzed third party forecasts and
other macro-economic indicators that impact our reporting units to provide a reasonable estimate of revenue
growth in future periods. Our gross margins and operating expense estimates were consistent with those
generated in recent historical periods. We also developed assumptions for the amount of working capital and
capital expenditures needed to support each reporting unit.
In addition to the income valuation approach noted above, we also considered the current market capitalization of
the Company which was approximately $751.6 million at December 31, 2013 and exceeds the Companys book
value of $363.0 million.
Income taxes
We recognize and measure each tax position related to income tax positions taken or expected to be taken in a tax
return. We have reviewed our tax positions to determine which should be recognized and measured according to
the more likely than not threshold requirement. The tax benefits recognized in the financial statements are
measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon
ultimate resolution. If the realization of a tax position is not considered more likely than not, we provide for a
valuation allowance. The ultimate realization of our deferred tax assets is dependent upon the generation of
future taxable income during the periods in which temporary differences become deductible. We consider
projected future taxable income from continuing operations, tax planning strategies, and transactions, including
the pending disposition of the AirCard business, in making our assessment. If our assessment of our ability to
realize our deferred tax assets changes, we may make an adjustment to our deferred tax assets that would be
charged to income (loss).
We do not provide for taxes on foreign earnings as it is our intention to indefinitely reinvest undistributed earnings
of our foreign subsidiaries. It is not practical to estimate the income tax liability that might be incurred if there is a
change in managements intention in the event that a remittance of such earnings occurs in the future.
29
The ultimate amount of future income taxes and income tax provision could be materially different from those
recorded, as it is influenced by our future operating results and our tax interpretations.
Amortization
Amortization of property and equipment and intangible assets incorporates estimates of useful lives and residual
values. These estimates may change as more experience is obtained or as general market conditions change
impacting the operation of plant and equipment and intangible assets.
Warranty costs
We accrue product warranty costs in accrued liabilities to provide for the repair or replacement of defective
products. Our accrual is based on an assessment of historical experience and managements estimates. If there is
a change in the quality of our products, we adjust our accrual accordingly.
Royalty obligations
Under certain license agreements we are committed to royalty payments based on the sales of products using
certain technologies. We recognize royalty obligations as determinable in accordance with agreement terms.
Where agreements are not finalized, we have recognized our current best estimate of the obligation in accrued
liabilities and other long-term liabilities. When the agreements are finalized, the estimates are revised accordingly.
Contingencies
We are from time to time involved in litigation, certain other claims and arbitration matters arising in the ordinary
course of our business. We accrue for a liability when it is both probable that a liability has been incurred and the
amount of the loss can be reasonably estimated. Significant judgment is required in both the determination of
probability and the determination as to whether a loss is reasonably estimable. These accruals are reviewed at
least quarterly and adjusted to reflect the impacts of negotiations, settlements, rulings, advice of legal counsel and
technical experts and other information and events pertaining to a particular matter. To the extent there is a
reasonable possibility (within the meaning of ASC 450, Contingencies) that the losses could exceed the amounts
already accrued for those cases for which an estimate can be made, management believes that the amount of any
such additional loss would not be material to our results of operations or financial condition.
In some instances, we are unable to reasonably estimate any potential loss or range of loss. The nature and
progression of litigation can make it difficult to predict the impact a particular lawsuit will have on the company.
There are many reasons why we cannot make these assessments, including, among others, one or more of the
following: in the early stage of a proceeding, the claimant is not required to specifically identify the patent that has
allegedly been infringed; damages sought that are unspecified, unsupportable, unexplained or uncertain;
discovery not having been started or being incomplete; the complexity of the facts that are in dispute (e.g., once a
patent is identified, the analysis of the patent and a comparison to the activities of the Company is a labourintensive and highly technical process); the difficulty of assessing novel claims; the parties not having engaged in
any meaningful settlement discussions; the possibility that other parties may share in any ultimate liability; and
the often slow pace of patent litigation.
We are required to apply judgment with respect to any potential loss or range of loss in connection with litigation.
While we believe we have meritorious defenses to the claims asserted against us in our currently outstanding
litigation, and intend to defend ourselves vigorously in all cases, in light of the inherent uncertainties in litigation
there can be no assurance that the ultimate resolution of these matters will not significantly exceed the reserves
currently accrued by us for those cases for which an estimate can be made. Losses in connection with any
litigation for which we are not presently able to reasonable estimate any potential loss or range of loss could be
material to our results of operations and financial condition.
30
We recognize stock-based compensation expense for all stock-based compensation awards based on the fair value
at grant date. We recognize stock-based compensation expense for those shares expected to vest on a straight-line
basis over the requisite service period of the award.
Determining the appropriate fair value model and calculating the fair value of share-based payment awards
requires subjective assumptions. The assumptions used in calculating the fair value of share-based payment
awards represent managements best estimates, but these estimates involve inherent uncertainties and the
application of managements judgment. As a result, if factors change and we use different assumptions, our stockbased compensation expense could be materially different in the future.
Fair value measurement
We measure our short-term investments at fair value, defined as the price that would be received from selling an
asset or that would be paid to transfer a liability in an orderly transaction between market participants at the
measurement date. When determining fair value measurements, we consider the principal or most advantageous
market in which it would transact and consider assumptions that market participants would use when pricing the
asset or liability, such as inherent risk, transfer restrictions and risk of non-performance.
An established fair value hierarchy requires the company to maximize the use of observable inputs and minimize
the use of unobservable inputs when measuring fair value. A financial instruments categorization within the fair
value hierarchy is based upon the lowest level of input that is both available and significant to the fair value
measurement. Three levels of inputs may be used to measure fair value:
Level 1 - Quoted prices in active markets for identical assets or liabilities.
Level 2 - Observable inputs other than quoted prices in active markets for identical assets and liabilities, such as
quoted prices for identical or similar assets or liabilities in markets that are not active, or other
inputs that are observable or can be corroborated by observable market data for substantially the full term of the
assets or liabilities.
Level 3 - Inputs that are generally unobservable and are supported by little or no market activity and that are
significant to the fair value determination of the assets or liabilities.
The determination of fair value requires judgments, assumptions and estimates and may change over time.
OUTSTANDING SHARE DATA

As of the date of this MD&A, the Company had 31,358,264 common shares issued and outstanding, stock options
exercisable into 1,582,138 common shares and 595,825 restricted treasury share units outstanding.
IMPACT OF ACCOUNTING PRONOUNCEMENTS AFFECTING FUTURE PERIODS

In July 2013, the FASB issued ASU 2013-11, Income Taxes (ASC 740) Presentation of an Unrecognized Tax Benefit
When a Net Operating Loss Carry forward, a Similar Tax Loss, or a Tax Credit Carry forward Exists (Update). The
update is intended to eliminate the diversity in practice of the presentation of an unrecognized tax benefit when a
net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. The update is effective for
annual and interim financial statements for fiscal years beginning after December 15, 2013. The amendments
should be applied prospectively to all unrecognized tax benefits that exist at the effective date. Retrospective
application is permitted.
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DISCLOSURE CONTROLS
Our management is responsible for establishing and maintaining adequate disclosure controls and procedures for
the Company. Our disclosure controls and procedures are designed to ensure that information required to be
disclosed in our reports filed with securities regulatory authorities is recorded, processed, summarized and
reported within time periods specified in applicable securities regulations, and is accumulated and communicated
to our management, including our Chief Executive Officer and our Chief Financial Officer, as appropriate, to allow
timely decisions regarding required disclosure.
We conducted an evaluation of the effectiveness of our disclosure controls and procedures, which was carried out
under the supervision of, and with the participation of, our management, including our Chief Executive Officer and
our Chief Financial Officer, as of December 31, 2013. Based on that evaluation, our Chief Executive Officer and our
Chief Financial Officer have concluded that our disclosure controls and procedures were effective as of
December 31, 2013 to ensure that information required to be disclosed by us in the reports we file or submit
under applicable securities laws and regulations is recorded, processed, summarized, and reported within the time
periods specified thereby.
We do not expect that our disclosure controls and procedures will prevent all errors and all fraud. Control
procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance
that the objectives of the control procedures are met. Because of the inherent limitations in all control procedures,
no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any,
within our company have been detected. These inherent limitations include the realities that judgments in
decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally,
controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by
management override of the control. We considered these limitations during the development of our disclosure
controls and procedures and will periodically re-evaluate them to ensure they provide reasonable assurance that
such controls and procedures are effective.
INTERNAL CONTROL OVER FINANCIAL REPORTING

Managements Annual Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial
reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the U.S. Securities Exchange Act of 1934
and has designed such internal control over financial reporting to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in accordance
with U.S. GAAP.
Our internal control over financial reporting includes those policies and procedures that: (1) pertain to the
maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of
our assets; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of
financial statements in accordance with U.S. GAAP, and that our receipts and expenditures are being made only in
accordance with authorizations of our management and directors; and (3) provide reasonable assurance regarding
prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a
material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect
misstatements on a timely basis. Also, projections of any evaluation of effectiveness of internal control over
financial reporting to future periods are subject to the risk that controls may become inadequate because of
changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
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Under the supervision and with the participation of our Chief Executive Officer and our Chief Financial Officer,
management conducted an evaluation of the effectiveness of our internal control over financial reporting, as of
December 31, 2013, based on the framework set forth in Internal Control-Integrated Framework (1992) issued by
the Committee of Sponsoring Organizations of the Treadway Commission ("COSO"). Based on its evaluation under
this framework, management concluded that our internal control over financial reporting was effective as of that
date.
KPMG LLP (KPMG), an independent registered public accounting firm, who audited and reported on our
consolidated financial statements as at and for the year ended December 31, 2013, has issued an attestation
report on our internal control over financial reporting as of December 31, 2013. The attestation report is included
in our consolidated financial statements.
There were no changes in our internal control over financial reporting during the year ended December 31, 2013
that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
The design of any system of controls and procedures is based in part upon certain assumptions about the
likelihood of certain events. There can be no assurance that any design will succeed in achieving its stated goals
under all potential future conditions, regardless of how remote.
LEGAL PROCEEDINGS
In November 2013, we filed a complaint against Nokia Corporation in the EU Commission for breach of Article 102
of the European Union Treaty. The complaint alleges that Nokia Corporation abuses a dominant position,
discriminates, applies unfair royalties and wrongfully refuses to grant a license to Sierra Wireless in the context of
Nokia's essential patents licensing program. We also believe that Nokia Corporation violates section 5 of the FTC
Act (United States) and have sent a notice to the Federal Trade Commission ("FTC") setting out these violations.
The EU Commission and FTC are each currently reviewing the materials we have submitted to them. On January 6
2014, we received notice from the International Chamber of Commerce of arbitration proceedings launched by
Nokia Corporation against Sierra Wireless, for alleged unpaid royalties of approximately $29 million. We believe
Nokia's arbitration claims are without legal merit, and we will defend ourselves vigorously. Nonetheless, an
unfavorable outcome could have a material adverse effect on our operating results, liquidity or financial position.
In December 2012, Concinnitas LLC filed a patent infringement lawsuit in the United States District Court for the
Eastern District of Texas asserting patent infringement by us. The lawsuit makes allegations concerning AirCard
products. In September 2013, a mutually agreeable confidential settlement was entered into by the parties which
will not have a material adverse effect on our operating results. The lawsuit was subsequently dismissed with
prejudice.
In April 2012, a patent holding company, Cell and Network Selection, LLC (CNS), filed a patent infringement
lawsuit in the United States District Court for the District of Texas asserting patent infringement by us and our
customer. In May 2013, this lawsuit was dismissed upon motion of CNS and a new lawsuit was filed by CNS in the
same court. The lawsuit makes certain allegations concerning the LTE products sold by us, including the mobile
hotspots and USB modems sold by us to AT&T prior to the transfer of the AirCard business to Netgear. In
September 2013, a mutually agreeable confidential settlement was entered into by the parties which will not have
a material adverse effect on our operating results. The lawsuit was subsequently dismissed with prejudice.
In January 2012, a patent holding company, M2M Solutions LLC ("M2M"), filed a patent infringement lawsuit in the
United States District Court for the District of Delaware asserting patent infringement by us and our competitors.
The lawsuit makes certain allegations concerning the AirPrime embedded wireless module products, related
AirLink products and related services sold by us for use in M2M communication applications. The lawsuit is in the
discovery stage. The claim construction order has determined one of the two patents-in-suit to be indefinite and
therefore invalid. Trial is anticipated to occur in September 2014. In February 2014, we filed a declaratory
judgment action in the same court seeking a declaration of non-infringement with respect to a recently issued
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patent held by M2M, which patent is a continuation of the patents-in-suit in the original lawsuit filed against us by
M2M.
In September 2011, a patent holding company, Wi-Lan, Inc. ("Wi-Lan"), filed a patent infringement lawsuit in the
United States District Court for the Eastern District of Texas asserting patent infringement by a number of parties,
including us. The lawsuit makes certain allegations concerning the wireless communication products sold by us. In
September 2012, the lawsuit was consolidated with another lawsuit commenced by Wi-Lan in the Eastern District
of Texas concerning the same patents. In December 2012, Wi-Lan filed additional patent litigation lawsuits in the
United States District Court for each of the Eastern District of Texas and the Southern District of Florida asserting
patent infringement by us of additional patents not included in the first Wi-Lan suit. The lawsuit in the Southern
District of Florida was transferred to the Southern District of California. The second lawsuit in the Eastern District
of Texas had not yet been scheduled for trial; however certain claims in the patent-in-suit (US Patent No.
6,381,211) were recently found to be invalid, as well as not infringed, by a jury in a similar case in this district
involving Wi-Lan as plaintiff and Ericsson Inc., Alcatel-Lucent USA Inc., HTC Corporation and Sony Mobile
Communications as defendants. In October 2013, a mutually agreeable confidential settlement was entered into
by the parties to resolve all pending lawsuits, which will not have a material adverse effect on our operating
results.
In May 2010 and in February 2011, a patent holding company, Golden Bridge Technology Inc. (GBT), filed patent
infringement lawsuits in the United States District Court for the District of Delaware asserting patent infringement
of the same two patents by a number of parties, including us and certain of our customers. In both cases, the
litigation makes certain allegations concerning the wireless modems sold by us and our competitors. Both lawsuits
have been stayed against all defendants except Apple Inc. ("Apple"), pending the outcome of the first case against
Apple in Delaware. In April 2013, the Court of Delaware issued its claim construction order, as well as an order
granting Apple's motion for summary judgment on non-infringement and denying Apple's motion for summary
judgment on invalidity. These orders have been appealed by GBT to the United States Court of Appeals for the
Federal Circuit. In May 2012, GBT filed a patent infringement lawsuit in the United States District Court for the
Central District of California asserting patent infringement by us of a different patent from the other two lawsuits,
but concerning essentially the same products. In September 2012, this lawsuit was dismissed in the Central
District of California and re-filed in the District of Delaware. This Delaware lawsuit has been stayed against us
pending the outcome of the case against Apple with respect to the same patent, which is set for trial in the Central
District of California in May 2014. A claim construction order was issued in this case in June 2013.
In July 2009, a patent holding company, SPH America, LLC, filed a patent infringement lawsuit in the United States
District Court for the Eastern District of Virginia asserting patent infringement by a number of device
manufacturers, including us, and computer manufacturers, including certain of our customers. In January 2013, a
mutually agreeable confidential settlement was entered into by the parties which will not have a material adverse
effect on our operating results. The lawsuit was subsequently dismissed with prejudice.
Although there can be no assurance that an unfavorable outcome would not have a material adverse effect on our
operating results, liquidity or financial position, we believe the claims made in the foregoing legal proceedings are
without merit and intend to defend ourselves and our products vigorously in all cases.
IP Indemnification Claims
We have been notified by one or more of our customers in each of the following matters that we may have an
obligation to indemnify them in respect of the products we supply to them:
In May 2013, a patent holding company, Adaptix, Inc., filed a patent infringement lawsuit in the United States
District Court for the Eastern District of Texas against one of our customers asserting patent infringement in
relation to our customers products, which may include certain LTE products which utilize modules sold to them by
us. The lawsuit is in the early stages.
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In January 2013, a patent holding company, Steelhead Licensing LLC, filed a patent infringement lawsuit in the
United States District Court for the District of Delaware against one of our customers asserting patent infringement
in relation to our customer's products and services, including the mobile hotspot devices sold to them by us prior
to the transfer of the AirCard business to Netgear. In March 2013, we advised our customer that we had been
granted a license with respect to the patents-in-suit, which license covers any of our products sold by our
customers (including this customer). We believe this outcome will not have a material adverse effect on our
operating results.
In February 2012, a patent holding company, Intellectual Ventures (comprised of Intellectual Ventures I LLC and
Intellectual Ventures II LLC), filed a patent infringement lawsuit in the United States District Court for the District of
Delaware against two of our customers asserting patent infringement in relation to several of our customer's
products and services, including the mobile hotspots sold to them by us prior to the transfer of the AirCard
business to Netgear. The lawsuit was split into several separate lawsuits and amended complaints were filed in
October 2013. The lawsuits are in the early stages, and we are negotiating a stipulation of intervention in two
cases with the plaintiff.
In September 2011, a patent holding company, Mayfair Wireless, LLC, filed a patent infringement lawsuit in the
United States District Court for the District of Delaware against two of our customers asserting patent
infringement in relation to the wireless hotspots sold to them by us prior to the transfer of the AirCard business to
Netgear. In October 2013, the plaintiff objected to the Magistrates report and recommendation that the Court
grant the defense motion to dismiss for lack of subject matter jurisdiction; therefore, the matter is currently being
reviewed by the District Court Judge.
In June 2011, Barnes and Noble, Inc. filed a declaratory judgment action in the United States District Court for the
Northern District of California against LSI Corporation (and later added Agere Systems, Inc.), (collectively, LSI),
seeking a declaration that certain patents were not infringed by their products, including the 3G Nook e-reader
which incorporates wireless modules sold to them by us. LSI counterclaimed for patent infringement. There are
currently 9 patents-in-suit, two of which relate to the 3G products which incorporate our modules. The lawsuit is
currently in the discovery phase and the claim construction hearing is anticipated to occur in March 2014.
A patent holding company, Eon Corp. IP Holdings, LLC ("Eon"), filed a patent infringement lawsuit against one of
our customers in October 2010 in the United States District Court for the Eastern District of Texas, which was
subsequently transferred to the United States District Court for the Northern District of California. A claim
construction order was issued in July 2013, and this case is scheduled for trial in October 2014. Eon filed a patent
litigation lawsuit against another of our customers in January 2012 in the United States District Court for the
District of Puerto Rico, which has been transferred in part to the District of Delaware with respect to claims related
to one of the three patents-in-suit. A claim construction hearing was held in the Puerto Rico case in November
2013 and in the Delaware case in January 2014. In all the above Eon cases, assertions of patent infringement are
being made in relation to the wireless modems sold to our customers by us prior to the transfer of the AirCard
business to Netgear.
Although there can be no assurance that an unfavorable outcome would not have a material adverse effect on our
operating results, liquidity or financial position, we believe the claims made in the foregoing legal proceedings are
without merit and intend to defend ourselves and our products vigorously in all cases.
We are engaged in certain other claims, legal actions and arbitration matters, all in the ordinary course of
business, and believe that the ultimate outcome of these claims, legal actions and arbitration matters will not have
a material adverse effect on our operating results, liquidity or financial position.
35
RISKS AND UNCERTAINTIES

Our business is subject to significant risks and uncertainties and past performance is no guarantee of future
performance. The risks and uncertainties described below are those which we currently believe to be material,
and do not represent all of the risks that we face. Additional risks and uncertainties, not presently known to us,
may become material in the future or those risks that we currently believe to be immaterial may become material
in the future. If any of the following risks actually occur, alone or in combination, our business, financial condition
and results of operations, as well as the market price of our common shares, could be materially adversely
affected.
Our financial results are subject to fluctuations that could have a material adverse effect on our business and
that could affect the market price of our common shares.
Our revenue, gross margin, operating earnings and net earnings may vary from quarter-to-quarter and could be
significantly impacted by a number of factors, including but not limited to the following:
Price and product competition which may result in lower selling prices for some of our products or lost
market share;
Price and demand pressure on our products from our customers as they experience pressure in their
businesses;
Demand fluctuation based on the success of our customers in selling their products and solutions which
incorporate our wireless products and software;
Development and timing of the introduction of our new products including the timing of sales orders,
OEM and distributor customer sell through and design win cycles in our embedded wireless module
business;
Transition periods associated with the migration to new technologies;
Potential commoditization and saturation in certain markets;
Our ability to accurately forecast demand in order to properly align the purchase of components and the
appropriate level of manufacturing capability;
Product mix of our sales. Our products have different gross margins for example the embedded
wireless module product line has lower gross margins than the higher margin rugged mobile product line;
Possible delays or shortages in component supplies;
Possible delays in the manufacture or shipment of current or new products;
Possible product quality or factory yield issues that may increase our cost of goods sold;
Concentration in our customer base;
Seasonality in demand;
Amount of inventory held by our channel partners;
Possible fluctuations in certain foreign currencies relative to the U.S. dollar that may affect foreign
denominated revenue, cost of goods sold and operating expenses;
Achievement of milestones related to our professional services contracts; and
Operating expenses that are generally fixed in the short-term and therefore difficult to rapidly adjust to
different levels of business.
Any of the factors listed above could cause significant variations in our revenues, gross margin and earnings in any
given quarter. Therefore, our quarterly results are not necessarily indicative of our overall business, results of
operations, and financial condition.
Quarterly variations in operating results or any of the other factors listed above, changes in financial estimates by
securities analysts, or other events or factors may result in wide fluctuations in the market price of our common
shares. Broad market fluctuations or any failure of the Companys operating results in a particular quarter to meet
market expectations may adversely affect the market price of our common shares.
36
Competition from new or established wireless communication companies or from those with greater resources
may prevent us from increasing or maintaining our market share and could result in price reductions and/or loss
of business with resulting reduced revenues and gross margins.
The wireless communications industry is highly competitive and we have experienced and expect to continue to
experience intense competition. More established and larger companies with strong brands and greater financial,
technical and marketing resources, or companies with different business models sell products that compete with
ours and we expect this competition to intensify. Business combinations or strategic alliances by our competitors
could weaken our competitive position. We may also introduce new products that will put us in direct competition
with major new competitors. Existing or future competitors may be able to respond more quickly to technological
developments and changes and introduce new products before we do or may independently develop and patent
technologies and products that are superior to ours or achieve greater acceptance due to factors such as more
favorable pricing, more desired or better quality features or more efficient sales channels. If we are unable to
compete effectively with our competitors' pricing strategies, technological advances and other initiatives, we may
lose customer orders and market share and we may need to reduce the price of our products, resulting in reduced
revenue and reduced gross margins.
The loss of any of our significant customers could adversely affect our revenue and profitability, and therefore
shareholder value.
We sell our products to OEMs, enterprises, distributors, resellers and network operators, and we are occasionally
party to sales agreements with customers comprising a significant portion of our revenue. Accordingly, our
business and future success depends on our ability to maintain and build on existing relationships and develop
new relationships with OEMs, enterprises, distributors, resellers and network operators. If certain of our
significant customers, for any reason, discontinues their relationship with us or reduces or postpones current or
expected purchase orders for products, or suffers from business failure, our revenues and profitability could
decline, perhaps materially. In the year ended December 31, 2013, no customer individually accounted for more
than 10% of our aggregated revenue, from continuing and discontinued operations. In the year ended December
31, 2012, two customers accounted for more than 10% of our aggregated revenue from continuing and
discontinued operations, and on a combined basis, represented 25% of our aggregated revenue from continuing
and discontinued operations.
In addition, our current customers purchase our products under purchase orders. Our customers have no
contractual obligation to continue to purchase our products following our fulfillment of current purchase orders
and if they do not continue to make purchases, our revenue and our profitability could decline, perhaps materially.
We may be found to infringe on the intellectual property rights of others.
Our industry has many participants that own, or claim to own, proprietary intellectual property. In the past we
have received, and in the future we may continue to receive, assertions or claims from third parties alleging that
our products violate or infringe their intellectual property rights. We may be subject to these claims directly or
through indemnities against these claims which we have provided to certain customers and other third parties.
Our component suppliers and technology licensors do not typically indemnify us against these claims and
therefore we do not have recourse against them in the event a claim is asserted against us or a customer we have
indemnified. This potential liability, if realized, could materially adversely affect our business operating results and
financial condition.
Activity in this area by third parties, particularly those with tenuous claims, is increasing, resulting in us taking a
more aggressive defensive approach, which may result in increased litigation. In the last few years, patent claims
have been brought against us by third parties whose primary (or sole) business purpose is to acquire patents and
other intellectual property rights, and not to manufacture and sell products and services. These entities
aggressively pursue patent litigation, resulting in increased litigation costs for us. We expect that this recent
development will continue for the foreseeable future. Infringement on intellectual property can be difficult to
verify and litigation may be necessary to establish whether or not we have infringed the intellectual property
37
rights of others. In many cases, these third parties are companies with substantially greater resources than us, and
they may be able to, and may choose to, pursue complex litigation to a greater degree than we could. Regardless
of whether these infringement claims have merit or not, we may be subject to the following:
We may be found to be liable for potentially substantial damages, liabilities and litigation costs, including
attorneys' fees;
We may be prohibited from further use of intellectual property as a result of an injunction and may be
required to cease selling our products that are subject to the claim;
We may have to license third party intellectual property, incurring royalty fees that may or may not be on
commercially reasonable terms. In addition, there is no assurance that we will be able to successfully
negotiate and obtain such a license from the third party;
We may have to develop a non-infringing alternative, which could be costly and delay or result in the loss
of sales. In addition, there is no assurance that we will be able to develop such a non-infringing
alternative;
Management attention and resources may be diverted;
Our relationships with customers may be adversely affected; and
We may be required to indemnify our customers for certain costs and damages they incur in such a claim.
In addition to potentially being found to be liable for substantial damages in the event of an unfavorable outcome
in such a claim and our inability to either obtain a license from the third party on commercial terms or develop a
non-infringing alternative, our business, operating results and financial condition may be materially adversely
affected and we may have to cease the sale of certain products and restructure our business.
We may be unable to continue to license necessary third party technology on commercially reasonable terms, if
at all.
We license technology, intellectual property and software from third parties for use in our products and from time
to time may be required to license additional intellectual property. In some cases, these licenses provide us with
certain pass-through rights for the use of other third party intellectual property. There is no assurance that we will
be able to maintain our third party licenses or obtain new licenses when required and this inability could
materially adversely affect our business and operating results and the quality and functionality of our products.
We depend on single source suppliers for some components used in our products and if these suppliers are
unable to meet our demand the availability of our products may be materially adversely affected.
Our products are comprised of components some of which are procured from single source suppliers, including
where we have licensed certain software embedded in a component. From time to time, certain components
used in our products have been, and may continue to be in short supply worldwide and shortages in allocation of
components may result in a delay in filling orders from our customers, which may adversely affect our business. In
addition, our single source suppliers may experience damage or interruption in their operations due to unforeseen
events, become insolvent or bankrupt, or experience claims of infringement, all of which could delay or stop their
shipment of components to us, which may adversely affect our business, operating results and financial condition.
If there is a shortage of any such components and we cannot obtain an appropriate substitute from an alternate
supplier of components, we may not be able to deliver sufficient quantities of our products, we may lose business
or customers and our operating results and financial condition may be materially adversely affected.
We may have difficulty responding to changing technology, industry standards and customer requirements, and
therefore be unable to develop new products in a timely manner which meet the needs of our customers.
The wireless communications industry is subject to rapid technological change. Our business and future success
will depend, in part, on our ability to accurately predict and anticipate evolving wireless technology standards and
develop products that keep pace with the continuing changes in technology, evolving industry standards and
changing customer and end-user preferences and requirements. Our products embody complex technology that
38
may not meet those standards, preferences and requirements. Our ability to design, develop and commercially
launch new products depends on a number of factors, including but not limited to the following:
Our ability to attract and retain skilled technical employees;

The availability of critical components from third parties;
Our ability to successfully complete the development of products in a timely manner;
The ability of third parties to complete and deliver on outsourced product development engagements;
and
Our ability to design and manufacture products at an acceptable cost and quality.
A failure by us, or our suppliers in any of these areas, or a failure of new products to obtain commercial
acceptance, could mean we receive less revenue than we anticipate and we may be unable to recover our research
and development expenses.
We develop products to meet our customers' requirements. OEM customers award design wins for the integration
of wide area embedded wireless modules on a platform by platform basis. Current design wins do not guarantee
future design wins. If we are unable or choose not to meet our customers' future needs, we may not win their
future business and our revenue and profitability may decrease.
In addition, wireless communications service providers require that wireless data systems deployed on their
networks comply with their own standards, which may differ from the standards of other providers. We may be
unable to successfully address these developments on a timely basis or at all. Our failure to respond quickly and
cost-effectively to new developments through the development of new products or enhancements to existing
products could cause us to be unable to recover significant research and development expenses and reduce our
revenues.
We depend on a limited number of third parties to manufacture our products. If they do not manufacture our
products properly or cannot meet our needs in a timely manner, we may be unable to fulfill our product delivery
obligations and our costs may increase, and our revenue and margins could decrease.
We outsource the manufacturing of our products to several contract manufacturers and depend on these
manufacturers to meet our needs in a timely and satisfactory manner at a reasonable cost. Our reliance on third
party manufacturers subjects us to a number of risks, including but not limited to the following:
Potential business interruption due to unexpected events such as natural disasters, labor unrest or
geopolitical events;
The absence of guaranteed or adequate manufacturing capacity:
Potential violations of laws and regulations by our manufacturers that may subject us to additional
costs for duties, monetary penalties, seizure and loss of our products or loss of our import privileges,
and damage to our reputation;
Reduced control over delivery schedules, production levels, manufacturing yields, costs and product
quality;
The inability of our contract manufacturers to secure adequate volumes of components in a timely
manner at a reasonable cost; and
Unexpected increases in manufacturing costs.
If we are unable to successfully manage any of these risks or to locate alternative or additional manufacturers or
suppliers in a timely and cost-effective manner, we may not be able to deliver products in a timely manner. In
addition, our results of operations could be harmed by increased costs, reduced revenues and reduced margins.
Under our manufacturing agreements, in many cases we are required to place binding purchase orders with our
manufacturers well in advance of our receipt of binding purchase orders from our customers. In this situation, we
consider our customers' good faith, non-binding forecasts of demand for our products. As a result, if the number
of actual products ordered by our customers is materially different from the number of products we have
39
instructed our manufacturer to build (and to purchase components in respect of), then, if too many components
have been purchased by our manufacturer, we may be required to purchase such excess component inventory, or,
if an insufficient number of components have been purchased by our manufacturer, we may not be in a position to
meet all of our customers' requirements. If we are unable to successfully manage our inventory levels and
respond to our customers' purchase orders based on their forecasted quantities, our business, operating results
and financial condition could be adversely affected.
Failures of our products or services due to quality issues, design flaws, errors or other defects that result in
product liability claims and product recalls could lead to unanticipated costs or otherwise harm our business.
Our products comprise hardware and software that is technologically complex. In order to compete in the
technologically advanced and rapidly changing wireless communication market, we must develop and introduce
our products quickly. Despite the sophisticated testing and certification processes for our products, it is possible
that our products may contain undetected errors or defects, especially when introduced or when new versions are
released. As a result, our products may be rejected by our customers leading to loss of business, loss of revenue,
additional development and customer service costs, unanticipated warranty claims, payment of monetary
damages under contractual provisions and damage to our reputation.
The Company may experience adverse effects relating to the divestiture of the assets and operations of the
AirCard business.
Difficulties associated with the divestiture of the assets and operations of the AirCard business could have a
material adverse effect on the Company's business, operating results, financial condition and the price of the
Company's common shares.
Divestiture execution is a difficult and complex undertaking that requires different skills than those required for
day-to-day operations. As a result, we may experience adverse effects relating to the divestiture of the assets and
operations of the AirCard business, including but not limited to:
The carve-out of the AirCard business from the ongoing business may be disruptive to our ongoing
business, place additional demands on our ongoing business and divert management attention from the
ongoing business thereby diminishing the ability to maintain focus on the Company's key strategic and
financial goals;
The inability to restructure our existing business operations and/or grow the ongoing business without
encountering difficulties and delays;
The inability to perform those transition services required by the divested business in a timely and
efficient manner and/or exit in prompt manner;
Unanticipated costs and unforeseen liabilities; and
Loss of key employees.
Continued difficult or uncertain global economic conditions could adversely affect our revenue and profitability.
A significant portion of our business is in the United States, Europe and the Asia-Pacific region and we are
particularly exposed to the downturns and current uncertainties that impact the wireless communications industry
in those economies. Economic uncertainty may cause an increased level of commercial and consumer
delinquencies, lack of consumer confidence resulting in delayed purchases or reduced volumes by our customers,
increased market volatility and widespread reduction of business activity generally. To the extent that we
experience further economic uncertainty, or deterioration in one of our large markets in the United States, Europe
or the Asia-Pacific region, the resulting economic pressure on our customers may cause them to end their
relationship with us, reduce or postpone current or expected orders for our products or services, or suffer from
business failure, resulting in a material adverse impact to our revenues, profitability, cash flow and bad debt
expense.
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It is difficult to estimate or project the level of economic activity, including economic growth, in the markets we
serve. As our budgeting and forecasting is based on the demand for our products and services, these economic
uncertainties result in it being difficult for us to estimate future revenue and expenses.
Fluctuations in exchange rates between the U.S. dollar and other currencies, including the Canadian dollar, and
the Euro may affect our operating results.
We are exposed to currency fluctuations and exchange rate risk on all operations conducted in currencies other
than the United States dollar. We cannot accurately predict the future effects of foreign currency fluctuations on
our financial condition or results of operations.
The majority of our revenues are denominated in U.S. dollars while a significant amount of our research and
development, marketing and administration costs are denominated in currencies other than the U.S. dollar;
primarily the Canadian dollar and the Euro. To the extent that exchange rates between the U.S. dollar and the
Canadian dollar and Euro fluctuate, we will experience an impact on our earnings.
As our business expands internationally, we will be exposed to additional risks relating to international
operations.
We intend to continue to grow our international business operations. Our international operations expose us to
additional risks unique to such international markets, including but not limited to the following:
Increased credit management risks and greater difficulties in collecting accounts receivable;
Unexpected changes in regulatory requirements, wireless communications standards, exchange rates,
trading policies, tariffs and other barriers;
Uncertainties of international laws and enforcement relating to the protection of intellectual property;
Economic or political instability;
Potential adverse tax consequences;
Difficulty in managing a worldwide workforce in compliance with business practices and local laws, that
vary from country to country; and
Consumer protection laws that impose additional requirements on us or restrict our ability to provide
limited warranty protection.
We may be unable to attract or retain key personnel which may harm our ability to compete effectively.
Our success depends in large part on the abilities and experience of our executive officers and other key
employees. Competition for highly skilled management, technical, research and development and other key
employees is intense in the wireless communications industry. We may not be able to retain our current executive
officers or key employees and may not be able to hire and transition in a timely manner experienced and highly
qualified additional executive officers and key employees as needed to achieve our business objectives. We do not
have fixed-term employment agreements with our key personnel. The loss of executive officers and key
employees could disrupt our operations and our ability to compete effectively could be adversely affected.
Furthermore, loss of key employees or deterioration in overall employee morale and engagement as a result of
organizational change could have an adverse impact on our growth, business and profitability.
We rely on certain internal processes, infrastructure and information technology systems to efficiently operate
and report on our business.
The inability to continue to enhance or prevent a failure of certain internal processes, infrastructure or information
technology systems could negatively impact our ability to operate or accurately report on our business.
41
Acquisitions and divestitures of businesses or technologies may result in disruptions to our business or may not
achieve the anticipated benefits.
The growth of our Company through the successful acquisition and integration of complementary businesses is an
important component of our business strategy. We continue to seek opportunities to acquire or invest in
businesses, products and technologies that expand, complement or otherwise relate to our business. For
example, on August 1, 2012, we acquired Sagemcom's M2M business, on October 16, 2013 we completed the
acquisition of AnyDATA's M2M modules and modem business and on January 26, 2014 we entered into a
definitive agreement to acquire In Motion. Any acquisitions, investments or business combinations by us may be
accompanied by risks commonly encountered including but not limited to the following:
Exposure to unknown liabilities or risks of the acquired companies, including unknown litigation related
to acts or omissions of an acquired company and/or its directors and officers prior to the acquisition,
deficiencies in disclosure controls and procedures of our acquired company and deficiencies in internal
controls over financial reporting of our acquired Company;
Higher than anticipated acquisition and integration costs and expenses;
The difficulty and expense of integrating the operations and personnel of the acquired companies;
Possible use of cash to support the operations of an acquired business;
Possible increase in foreign exchange translation risk depending on the currency denomination of the
revenue and expenses of the acquired business;
Disruption of, and demands on, our ongoing business as a result of integration activities including
diversion of management's time and attention from the ongoing business;
Failure to maximize our financial and strategic position by the successful incorporation of acquired
technology;
The inability to implement uniform standards, disclosure controls and procedures, internal controls
over financial reporting and other procedures and policies in a timely manner;
The potential loss of key employees and customers;
A possible decrease in our share price, if, as a result of the growth of the Company, we decide to raise
additional capital through an offering of common shares, preference shares or debt; and
Possible dilution to our shareholders if the purchase price is paid in common shares or securities
convertible into common shares.
In addition, geographic distances may make integration of businesses more difficult. We may not be successful in
overcoming these risks or any other problems encountered in connection with any acquisitions. If realized, these
risks could reduce shareholder value.
As business circumstances dictate, the Company may also decide to divest assets, technologies or businesses. For
example, on April 2, 2013 we completed the sale of our AirCard business. In doing so, the Company may not be
successful in identifying or managing the risks commonly encountered, including: higher than anticipated costs;
disruption of, and demands on, our ongoing business; diversion of management's time and attention; adverse
effects on existing business relationships with suppliers and customers and employee issues. We may not be
successful in overcoming these risks or any other problems encountered in connection with a divestiture of assets,
technologies or businesses which, if realized, could reduce shareholder value.
In addition, we may be unsuccessful at bringing to conclusion proposed transactions. Negotiations and closing
activities of transactions are complex functions subject to numerous unforeseen events that may impede the
speed at which a transaction is closed or even prevent a transaction from closing. Failure to conclude transactions
in an efficient manner may prevent us from advancing other opportunities or introduce unanticipated transition
costs.
Misappropriation of our intellectual property could place us at a competitive disadvantage.
Our intellectual property is important to our success. We rely on a combination of patent protection, copyrights,
trademarks, trade secrets, licenses, non-disclosure agreements and other contractual agreements to protect our
42
intellectual property. Third parties may attempt to copy aspects of our products and technology or obtain
information we regard as proprietary without our authorization. If we are unable to protect our intellectual
property against unauthorized use by others it could have an adverse effect on our competitive position.
Our strategies to deter misappropriation could be inadequate due to the following risks:
Non-recognition of the proprietary nature or inadequate protection of our methodologies in the United
States, Canada, France or other foreign countries;
Undetected misappropriation of our intellectual property;
The substantial legal and other costs of protecting and enforcing our rights in our intellectual property;
and
Development of similar technologies by our competitors.
In addition, we could be required to spend significant funds and management resources could be diverted in order
to defend our rights, which could disrupt our operations.
We have been subject to, and may in the future be subject to, certain class action lawsuits, which if decided
against us, could require us to pay substantial judgments, settlements or other penalties.
In addition to being subject to litigation in the ordinary course of business, in the future, we may be subject to
class actions and other securities litigation and investigations. We expect that this type of litigation will be time
consuming, expensive and distracting from the conduct of our daily business. It is possible that we will be required
to pay substantial judgments, settlements or other penalties and incur expenses that could have a material
adverse effect on our operating results, liquidity or financial position. Expenses incurred in connection with these
lawsuits, which include substantial fees of lawyers and other professional advisors and our obligations to
indemnify officers and directors who may be parties to such actions, could materially adversely affect our
operating results, liquidity or financial position. Although we have certain insurance policies in place to transfer
risk, we do not know with certainty if any of this type of litigation and resulting expenses will be fully or even
partially covered by insurance. In addition, these lawsuits may cause our insurance premiums to increase in future
periods.
We depend on wireless network carriers to promote and offer acceptable wireless data and voice
communications services for our products to operate.
Our products can only be used over wireless data and voice networks operated by third parties. Our business and
future growth depends, in part, on the successful deployment by network carriers of next generation wireless data
and voice networks and the network carriers' ability to grow their subscriber base. If these network carriers delay
the deployment or expansion of next generation networks, fail to offer effective and reliable service, or fail to price
and market their services effectively, sales of our products will decline and our revenues will decrease.
Government regulations could result in increased costs and inability to sell our products.
Our products are subject to certain mandatory regulatory approvals in the United States, Canada, the European
Union, the Asia-Pacific region and other regions in which we operate. For example, in the United States, the
Federal Communications Commission regulates many aspects of communications devices. In Canada, similar
regulations are administered by the Ministry of Industry, through Industry Canada. European Union directives
provide comparable regulatory guidance in Europe. Although we have obtained all the necessary Federal
Communications Commission, Industry Canada and other required approvals for the products we currently sell, we
may not receive approvals for future products on a timely basis, or at all. In addition, regulatory requirements may
change or we may not be able to receive regulatory approvals from countries in which we may desire to sell
products in the future.
We may also incur additional expenses or experience difficulties selling our products associated with complying
with the SEC rules and reporting requirements related to conflict minerals. In August 2012, the SEC adopted new
43
disclosure requirements implementing Section 1502 of the Dodd-Frank Wall Street Reform and Consumer
Protection Act of 2010 for manufacturers of products containing certain minerals that may originate from the
Democratic Republic of Congo and adjoining countries. As a result, the Company is required to conduct certain
country of origin and due diligence procedures in order to meet the reporting requirements for 2013 and future
years. The impact of the regulations may limit the sourcing and availability, or may increase the costs, of some of
the metals used in the manufacture of the Company's products. Also, since the Company's supply chain is
complex, the Company may be unable to sufficiently verify the origins for all metals used in the Company's
products through its supplier due diligence procedures.
44
MANAGEMENTS STATEMENT OF RESPONSIBILITIES
The accompanying consolidated financial statements have been prepared by management and approved by the
Board of Directors of Sierra Wireless, Inc. The consolidated financial statements were prepared in accordance with
accounting principles generally accepted in the United States and, where appropriate, reflect managements best
estimates and judgments. Where alternative accounting methods exist, management has chosen those methods
deemed most appropriate in the circumstances. Management is responsible for the accuracy, integrity and
objectivity of the consolidated financial statements within reasonable limits of materiality. Financial information
provided elsewhere in the Annual Report is consistent with that in the consolidated financial statements.
To assist management in the discharge of these responsibilities, the Company maintains a system of internal
controls over financial reporting as described in Managements Annual Report on Internal Control Over Financial
Reporting on page 32 of Managements Discussion and Analysis.
The Companys Audit Committee is appointed by the Board of Directors annually and is comprised exclusively of
outside, independent directors. The Audit Committee meets with management as well as with the independent
auditors to satisfy itself that management is properly discharging its financial reporting responsibilities and to
review the consolidated financial statements and the independent auditors report. The Audit Committee reports
its findings to the Board of Directors for consideration in approving the consolidated financial statements for
presentation to the shareholders. The Audit Committee considers, for review by the Board of Directors and
approval by the shareholders, the engagement or reappointment of the independent auditors. KPMG LLP has
direct access to the Audit Committee of the Board of Directors.
The consolidated financial statements have been independently audited by KPMG LLP, Chartered Accountants, on
behalf of the shareholders, in accordance with the standards of the Public Company Accounting Oversight Board
(United States) with respect to the consolidated financial statements for the year ended December 31, 2013. Their
report outlines the nature of their audit and expresses their opinion on the consolidated financial statements of
the Company.
Jason W. Cohenour
President and
Chief Executive Officer
David G. McLennan
Chief Financial Officer
Vancouver, Canada
February 27, 2014
45
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and Board of Directors of Sierra Wireless, Inc.
We have audited the accompanying consolidated balance sheets of Sierra Wireless, Inc. as of December 31, 2013
and 2012 and the related consolidated statements of operations, comprehensive earnings (loss), equity and cash
flows for each of the years in the three-year period ended December 31, 2013. These consolidated financial
statements are the responsibility of Sierra Wireless, Inc.s management. Our responsibility is to express an opinion
on these consolidated financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board
(United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the
consolidated financial position of Sierra Wireless, Inc. as of December 31, 2013 and 2012 and its consolidated
results of operations and its consolidated cash flows for each of the years in the three-year period ended
December 31, 2013 in conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board
(United States), Sierra Wireless, Inc.s internal control over financial reporting as of December 31, 2013, based on
the criteria established in Internal Control Integrated Framework (1992) issued by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO), and our report dated February 27, 2014 expressed an
unqualified opinion on the effectiveness of the Companys internal control over financial reporting.
Chartered Accountants
Vancouver, Canada
February 27, 2014
46
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and Board of Directors of Sierra Wireless, Inc.
We have audited Sierra Wireless, Inc.s internal control over financial reporting as of December 31, 2013, based on
the criteria established in Internal ControlIntegrated Framework (1992) issued by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO). Sierra Wireless, Inc.s management is responsible for
maintaining effective internal control over financial reporting and for its assessment of the effectiveness of
internal control over financial reporting included in the accompanying Managements Annual Report on Internal
Control Over Financial Reporting. Our responsibility is to express an opinion on Sierra Wireless, Inc.s internal
control over financial reporting based on our audit.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board
(United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about
whether effective internal control over financial reporting was maintained in all material respects. Our audit
included obtaining an understanding of internal control over financial reporting, assessing the risk that a material
weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the
assessed risk. Our audit also included performing such other procedures as we considered necessary in the
circumstances. We believe that our audit provides a reasonable basis for our opinion.
A companys internal control over financial reporting is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles. A companys internal control over financial reporting
includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable
assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance
with generally accepted accounting principles, and that receipts and expenditures of the company are being made
only in accordance with authorizations of management and directors of the company; and (3) provide reasonable
assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the
companys assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect
misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that
controls may become inadequate because of changes in conditions, or that the degree of compliance with the
policies or procedures may deteriorate.
In our opinion, Sierra Wireless, Inc. maintained, in all material respects, effective internal control over financial
reporting as of December 31, 2013, based on the criteria established in Internal ControlIntegrated Framework
(1992) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board
(United States), the consolidated balance sheets of Sierra Wireless, Inc. as of December 31, 2013 and 2012, and
the related consolidated statements of operations, comprehensive earnings (loss), equity and cash flows for each
of the years in the three-year period ended December 31, 2013, and our report dated February 27, 2014
expressed an unqualified opinion on those consolidated financial statements.
Chartered Accountants
Vancouver, Canada
February 27, 2014
47
SIERRA WIRELESS, INC.

CONSOLIDATED BALANCE SHEETS
(In thousands of U.S. dollars)
As at December 31,
2013
2012
Assets
Current assets
Short-term investments (note 8)
Accounts receivable (note 9)
Inventories (note 10)
Deferred income taxes (note 17)
Prepaids and other (note 11)
Assets held for sale (note 7)
Property and equipment (note 12)

Intangible assets (note 13)
Goodwill (note 14)
Other assets
$
Liabilities
Current liabilities
Accounts payable and accrued liabilities (note 15)
Liabilities held for sale (note 7)
Long-term obligations (note 16)

Equity
Shareholders equity
Common stock: no par value; unlimited shares authorized; issued and outstanding:
31,097,844 shares (December 31, 2012 30,592,423 shares)
Preferred stock: no par value; unlimited shares authorized; issued and outstanding: nil
shares
Treasury stock: at cost; 507,147 shares (December 31, 2012 716,313 shares)
Additional paid-in capital
Retained earnings (deficit)
Accumulated other comprehensive loss (note 18)
$
Commitments and contingencies (note 28)
Subsequent event (note 30)
The accompanying notes are an integral part of the consolidated financial statements.
On behalf of the Board:
Jason W. Cohenour
Director
Robin A. Abrams
Director
48
177,416
2,470
112,490
8,253
2,391
28,741
331,761
21,982
43,631
102,718
7,176
4,732
512,000
124,846
2,481
127,327
21,550
127
149,004
63,646
108,624
12,675
22,199
24,252
54,340
285,736
20,039
56,357
97,961
3,880
790
464,763
128,216
1,312
10,353
139,881
26,526
300
166,707
329,628
322,770
(5,137)
25,996
19,367
(6,858)
362,996
512,000 $
(5,172)
23,203
(35,283)
(7,462)
298,056
464,763

CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands of U.S. dollars, except where otherwise stated)
Revenue
Cost of goods sold
Gross margin
Expenses
Sales and marketing
Research and development (note 19)
Administration
Acquisition costs (note 5, 6 and 30)
Restructuring (note 20)
Integration
Amortization
Other income (expense) (note 21)
Loss before income taxes
Income tax expense (recovery) (note 17)
Net earnings from discontinued operations (note 7)
Net earnings (loss)
Net loss attributable to non-controlling interest (note 25)
Basic and diluted net earnings (loss) per share attributable to the
Companys common shareholders (in dollars) (note 22)

2013
2012
2011
441,860 $
397,321 $
333,175
296,219
272,047
231,435
145,641
125,274
101,740
42,182
73,112
35,164
508
171
27
12,141
163,305
(17,664)
3,823
(98)
(13,939)
1,611
(15,550)
70,588
55,038
55,038 $
37,067
61,785
32,777
3,182
2,251
10,418
147,480
(22,206)
3,326
(196)
(19,076)
(14,874)
(4,202)
31,401
27,199
27,199 $
37,188
60,903
33,716
837
1,426
11,214
10,709
155,993
(54,253)
(460)
35
(54,678)
(3,968)
(50,710)
21,338
(29,372)
(57)
(29,315)
(0.50) $
2.29
1.79 $
(0.14) $
1.02
0.88 $
(1.62)
0.68
(0.94)
$
$
Weighted average number of shares outstanding (in thousands) (note 22)

Basic
Diluted
30,771
30,771
49
30,788
30,788
31,275
31,275

CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS (LOSS)
Net earnings (loss)

Other comprehensive income (loss), net of taxes:
Release of foreign currency translation relating to acquisition of noncontrolling interest, net of taxes of $nil
Foreign currency translation adjustments, net of taxes of $nil
Total comprehensive earnings (loss)
Comprehensive loss attributable to non-controlling interest:
Net loss
Foreign currency translation adjustments, net of taxes of $nil
Comprehensive earnings (loss) attributable to the Company

2013
2012
55,038 $
27,199 $
2011
(29,372)
604
55,642
538
27,737
42
(2,571)
(31,901)
55,642
27,737
(57)
(49)
(31,795)
50

CONSOLIDATED STATEMENTS OF EQUITY
Equity attributable to the Company
Common Stock
Treasury Shares
# of shares
Balance as at December 31, 2010
31,222,786
$ 327,668
643,042
Stock option exercises (note 24)
# of shares
Additional
paid-in
capital
$
$
(3,908) $
83,906
772
Stock-based compensation (note 24)
Purchase of treasury shares for RSU

distribution
613,638
(4,472)
(379,121)
2,239
16,926
(253)
519
6,449
(4,472)
(57)
(29,372)
(49)
(2,620)
$ 271,904
(6,312)
Foreign currency translation

adjustments, net of tax
31,306,692
$ 328,440
877,559
(6,312)
637

distribution
336,638
(2,489)
(497,884)
3,458
Distribution of vested RSUs
(2,239)
20,087
85,051
(1,787)
$ 303,187
1,139
(1,033)
(6,141) $
42
(5,471)
Total
(800,000)
Noncontrolling
interest
(deficit)
6,449
Net loss
Common share cancellation (note 23)
Accumulated
other
comprehensive
income (loss)
$ (33,167) $
(796)
Retained
earnings
(deficit)
(29,315)
(2,571)
$ (62,482) $
(201)
(8,000)
436
6,713
6,713
(2,489)
680
(4)
Tax benefit from equity awards
71
71
Net earnings
27,199
27,199

538
538
30,592,423
$ 322,770
716,313
$ 298,056

Common share cancellation (note 23)
(510,439)
(5,384)
(5,172) $
(3,467)
23,203
$ (35,283) $
(388)
(7,462)
(5,772)
965,228
11,853
(3,747 )
8,106
9,347
9,347

distribution
270,265
(3,433)
(3,433)
(479,431)
3,468
50,632
389
(4,265 )
1,458
1,458
Net earnings
55,038
55,038

31,097,844
$ 329,628
507,147
(5,137) $
25,996
51
19,367
604
$
(6,858)
(408)
604
$ 362,996

CONSOLIDATED STATEMENTS OF CASH FLOWS
Cash flows provided by (used in):

Operating activities
Net earnings (loss)
Items not requiring (providing) cash
Amortization
Stock-based compensation (note 24(a))
Gain on sale of AirCard business (note 7)
Deferred income taxes
Loss (gain) on disposal of property, equipment, and intangibles
Impairment of intangible assets
Impairment of assets related to discontinued operations
Other (note 2(w))
Taxes paid related to net settlement of equity awards
Changes in non-cash working capital
Accounts receivable
Inventories
Prepaid expenses and other
Cash flows provided by operating activities
Investing activities
Purchase of M2M business of Sagemcom (note 5)
Purchase of M2M business of AnyDATA (note 6)
Additions to property and equipment
Proceeds from sale of property, equipment, and intangibles
Increase in intangible assets
Proceeds from sale of AirCard Business (note 7)
Net change in short-term investments
Cash flows provided by (used in) investing activities
Financing activities
Issuance of common shares, net of share issue costs
Repurchase of common shares for cancellation
Purchase of treasury shares for RSU distribution
Decrease in other long-term obligations
Cash flows used in financing activities
Effect of foreign exchange rate changes on cash and cash equivalents
(note 2(w))
Cash and cash equivalents, increase (decrease) in the year
Cash and cash equivalents, beginning of year
Cash and cash equivalents, end of year
Supplemental disclosures:
Net income taxes paid (received)
Interest paid
Non-cash purchase of property and equipment (funded by obligation
under capital lease)

2013
2012
$
$
55,038
27,199
(29,372)
28,296
9,347
(94,078)
16,339
(10)
1,012
1,458
(2,687)
(408)
28,590
6,713
(13,606)
107
71
(2,414)
(4)
32,386
6,449
(2,903)
40
11,214
10,897
11,908
(7,254)
(13,139)
1,147
17,866
(616)
(4,019)
(14,543)
10,997
(422)
38,053
9,067
5,664
4,248
(13,783)
733
23,743
(5,196)
(11,359)
32
(2,211)
119,958
(2,470)
98,754
(55,218)
(15,845)
139
(2,607)
9,347
(64,184)
(1,787)
(14,268)
31
(3,740)
17,058
(2,706)
8,106
(5,772)
(3,433)
(876)
(1,975)
436
(6,312)
(2,489)
(1,000)
(9,365)
519
(4,472)
(905)
(4,858)
(875)
113,770
63,646
177,416 $
(2,233)
(37,729)
101,375
63,646 $
5,746
130
2,022
144
243
52
2011
335
(247)
15,932
85,443
101,375
(1,926)
135
148

TABLE OF CONTENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Page
Note 1
Nature of Operations
54
Note 2
Summary of Significant Accounting Policies
54
Note 3
Recently Implemented Accounting Standards
61
Note 4
Changes in Future Accounting Standards
61
Note 5
Acquisition of M2M Business of Sagemcom
62
Note 6
Acquisition of M2M Business of AnyDATA
63
Note 7
65
Note 8
Short-term Investments
66
Note 9
Accounts Receivable
66
Note 10
Inventories
67
Note 11
Prepaids and Other
67
Note 12
Property and Equipment
68
Note 13
Intangible Assets
69
Note 14
Goodwill
70
Note 15
Accounts Payable and Accrued Liabilities
70
Note 16
Long-term Obligations
71
Note 17
Income Taxes
71
Note 18
Accumulated Other Comprehensive Loss
74
Note 19
Research and Development
75
Note 20
Restructuring
75
Note 21
Other Income (Expense)
77
Note 22
Earnings (Loss) Per Share
77
Note 23
Share Capital
77
Note 24
Stock-based Compensation Plans
78
Note 25
Non-controlling Interest
81
Note 26
Fair Value Measurement
82
Note 27
Financial Instruments
83
Note 28
Commitments and Contingencies
84
Note 29
Segmented Information
89
Note 30
Subsequent Event
91
53

1.
NATURE OF OPERATIONS
Sierra Wireless, Inc., together with its subsidiaries (collectively, the company, we, our) was incorporated
under the Canada Business Corporations Act on May 31, 1993. We are a global leader in providing cellular
wireless solutions to the Machine-to-Machine (M2M) and connected device markets. We develop and
market a range of wireless products that include embedded modules and embedded software for original
equipment manufacturers (OEMs), intelligent gateways and routers for industrial, commercial and
public safety applications, and an innovative cloud-based platform for delivering device management and
enabling end-to-end applications. Our products, services and solutions connect people, their mobile
computers and machines to wireless voice and data networks around the world. We have sales,
engineering, and research and development teams located in offices around the world.
The company sold substantially all of the assets and operations related to its AirCard business on April 2,
2013 (note 7). During the fourth quarter of 2013, we acquired substantially all of the M2M embedded
module and modem business of AnyDATA Corporation (note 6) and recently announced that we have
entered into an agreement to acquire all of the shares of In Motion Technology Inc. (note 30). We have
reevaluated our segmentation and determined that we have two reportable segments:
OEM Solutions
- includes AirPrime embedded wireless modules (including embedded wireless

modules for PC OEM customers).
- includes Airlink Intelligent Gateways, AirVantage M2M Cloud. Effective August

1, 2012, also includes rugged terminals for railway applications (note 5).
The primary markets for our products are North America, Europe and Asia Pacific.
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Our consolidated financial statements are prepared in accordance with U.S. GAAP.
(a)
Basis of consolidation
Our consolidated financial statements include the accounts of the company and its wholly-owned
subsidiaries from their respective dates of acquisition of control. All inter-company transactions
and balances have been eliminated on consolidation. The ownership of the other non-controlling
interest holders of consolidated subsidiaries is reflected as non-controlling interest and is not
significant.
(b)
Use of estimates
The consolidated financial statements have been prepared in conformity with U.S. GAAP, which
requires management to make estimates and assumptions that affect the reported amounts of
assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial
statements, and the reported amounts of revenues and expenses during the year. On an ongoing
basis, management reviews its estimates, including those related to inventory obsolescence,
estimated useful lives of assets, valuation of intangible assets, goodwill, royalty and warranty
accruals, lease provisions, other liabilities, stock-based compensation, bad debt and doubtful
54

accounts, income taxes, restructuring costs, and commitments and contingencies, based on
currently available information. Actual amounts could differ from estimates.
(c)
Translation of foreign currencies

Our functional or primary operating currency is the U.S. dollar.
Revenue and expense items denominated in foreign currencies are translated at exchange rates
prevailing during the period. Monetary assets and liabilities denominated in foreign currencies are
translated at the period-end exchange rates. Non-monetary assets and liabilities are translated at
exchange rates in effect when the assets are acquired or the obligations are incurred. Foreign
exchange gains and losses are reflected in net earnings (loss) for the period.
We have foreign subsidiaries that are considered to be self-contained and integrated within their
foreign jurisdiction, and accordingly, use the Euro as their functional currency. The assets and
liabilities of the foreign subsidiaries, including goodwill and fair value adjustments arising on
acquisition, are translated at exchange rates at the balance sheet dates, equity is translated at
historical rates, and revenue and expenses are translated at exchange rates prevailing during the
period. The foreign exchange gains and losses arising from the translation are reported as a
component of other comprehensive income (loss), as presented in note 18, Accumulated Other
Comprehensive Loss.
(d)

Cash and cash equivalents include cash and short-term deposits with original maturities of less
than three months. Short-term deposits are valued at amortized cost. The carrying amounts
approximate fair value due to the short-term maturities of these instruments.
(e)
Short-term investments
Short-term investments, categorized as available-for-sale, are carried at fair value. Unrealized
holding gains (losses) related to available-for-sale investments, after deducting amounts allocable
to income taxes, are recorded as a component of accumulated other comprehensive income (loss).
These gains (losses) are removed from comprehensive income (loss) when the investments mature
or are sold on an item-by-item basis.
We regularly evaluate the realizable value of short-term investments, and if circumstances indicate
that a decline in value is other-than-temporary, we recognize an impairment charge. To determine
whether to recognize an impairment charge, we consider various factors, such as the significance
of the decline in value, the length of time the investment has been below market value, changes
that would impact the financial condition of the investee, and the likelihood that the investment
will recover its value before it matures or is disposed of.
(f)
Allowance for doubtful accounts receivable

We maintain an allowance for our accounts receivable for estimated losses that may result from
our customers inability to pay. We determine the amount of the allowance by analyzing known
uncollectible accounts, aged receivables, economic conditions, historical losses, insured amounts,
55

if any, and changes in customer payment cycles and credit-worthiness. Amounts later determined
and specifically identified to be uncollectible are charged against this allowance.
If the financial condition of any of our customers deteriorates resulting in an impairment of their
ability to make payments, we may increase our allowance.
(g)
Inventories
Inventories consist of electronic components and finished goods and are valued at the lower of
cost or estimable realizable value, determined on a first-in-first-out basis. Cost is defined as all
costs that relate to bringing the inventory to its present condition and location under normal
operating conditions.
We review the components of our inventory and our inventory purchase commitments on a
regular basis for excess and obsolete inventory based on estimated future usage and sales. Writedowns in inventory value or losses on inventory purchase commitments depend on various items,
including factors related to customer demand, economic and competitive conditions, technological
advances and new product introductions that vary from current expectations. We believe that the
estimates used in calculating the inventory provision are reasonable and properly reflect the risk of
excess and obsolete inventory. If customer demands for our inventory are substantially less than
our estimates, additional inventory write-downs may be required.
(h)
Property and equipment

Property and equipment are stated at cost, less accumulated depreciation and amortization. We
amortize our property and equipment on a straight-line basis over the following estimated
economic lives:
Furniture and fixtures
Research and development equipment
Production equipment
Tooling
Computer equipment
Software
Office equipment
3-5 years
3-10 years
3-5 years
1.5-3 years
1-5 years
1-5 years
3-5 years
Research and development equipment related amortization is included in research and

development expense. Tooling and production equipment related amortization is included in cost
of goods sold. All other amortization is included in amortization expense.
Leasehold improvements and leased vehicles are amortized on a straight-line basis over the lesser
of their expected average service life or term of the initial lease.
When we sell property and equipment, we net the historical cost less accumulated depreciation
and amortization against the sale proceeds and include the difference in Other income (expense).
56

(i)
Intangible assets
The estimated useful life of intangible assets with definite life is the period over which the assets
are expected to contribute to our future cash flows. When determining the useful life, we
consider the expected use of the asset, useful life of a related intangible asset, any legal,
regulatory or contractual provisions that limit the useful life, any legal, regulatory, or contractual
renewal or extension provisions without substantial costs or modifications to the existing terms
and conditions, the effects of obsolescence, demand, competition and other economic factors,
and the expected level of maintenance expenditures relative to the cost of the asset required to
obtain future cash flows from the asset.
We amortize our intangible assets on a straight-line basis over the following specific periods:
Patents and trademarks
3-5 years
Licenses
over the shorter of the term of the license or an

estimate of their useful life, ranging from three
to ten years
Intellectual property and customer

relationships
3-13 years
Backlog
1-2 years
In-process research and

development
over the estimated life
Non-compete covenants
over the term of the agreement
Research and development related amortization is included in research and development expense.
All other amortization is included in amortization expense.
In-process research and development (IPRD) are intangible assets acquired as part of business
combinations. IPRD are intangible assets with indefinite life prior to their completion and they are
not amortized and subject to impairment test on an annual basis.
(j)
Goodwill
Goodwill represents the excess of the purchase price of an acquired enterprise over the fair value
assigned to assets acquired and liabilities assumed in a business combination. Goodwill has an
indefinite life, is not amortized, and is subject to a two-step impairment test on an annual basis.
The first step compares the fair value of the reporting unit to its carrying amount, which includes
the goodwill. When the fair value of a reporting unit exceeds its carrying amount, goodwill of the
reporting unit is considered not to be impaired and the second step of the impairment test is
unnecessary. If the carrying amount exceeds the implied fair value of the goodwill, the second step
measures the amount of the impairment loss. If the carrying amount exceeds the fair value of the
goodwill, an impairment loss is recognized equal to that excess.
57

(k)
Impairment of long-lived assets

Long-lived assets, including property and equipment, and intangible assets other than goodwill,
are assessed for potential impairment when there is evidence that events or changes in
circumstances indicate that the carrying amount of an asset may not be recovered. An impairment
loss is recognized when the carrying amount of the long-lived asset is not recoverable and exceeds
its fair value. The carrying amount of a long-lived asset is not recoverable if it exceeds the sum of
the undiscounted cash flows expected to result from the use and eventual disposition of the asset.
Any required impairment loss is measured as the amount by which the carrying amount of a longlived asset exceeds its fair value and is recorded as a reduction in the carrying value of the related
asset and a charge to operating results. Intangible assets with indefinite lives are tested annually
for impairment and in interim periods if certain events occur indicating that the carrying value of
the intangible assets may be impaired.
(l)
Research and Development costs

Research and development costs are expensed as they are incurred. Certain software
development costs for costs associated with the development of computer software to be sold,
leased or marketed are capitalized once technological feasibility is reached.
We follow the cost reduction method of accounting for certain agreements, including government
research and development funding, whereby the benefit of the funding is recognized as a
reduction in the cost of the related expenditure when certain criteria stipulated under the terms of
those funding agreements have been met, and there is reasonable assurance the research and
development funding will be received. Certain research and development funding is repayable on
the occurrence of specified future events. We recognize the liability to repay research and
development funding in the period in which conditions arise that will cause research and
development funding to be repayable.
(m)
Warranty costs
Warranty costs are accrued upon the recognition of related revenue, based on our best estimates,
with reference to past and expected future experience. Warranty obligations are included in
accounts payable and accrued liabilities in our consolidated balance sheet.
(n)
Royalty costs
We have intellectual property license agreements which generally require us to make royalty
payments based on a percentage of the revenue generated by sales of products incorporating the
licensed technology. We recognize royalty obligations in accordance with the terms of the
respective royalty agreements. Royalty costs are recorded as a component of cost of goods sold in
the period when incurred.
(o)
Market development costs

Market development costs are charged to sales and marketing expense to the extent that the
benefit is separable from the revenue transaction and the fair value of that benefit is
determinable. To the extent that such costs either do not provide a separable benefit, or the fair
58

value of the benefit cannot be reliably estimated, such amounts are recorded as a reduction of
revenue.
(p)
Revenue recognition
Revenue from sales of products and services is recognized upon the later of transfer of title or
upon shipment of the product to the customer or rendering of the service, so long as persuasive
evidence of an arrangement exists, delivery has occurred, price is fixed or determinable, and
collection is reasonably assured.
Cash received in advance of the revenue recognition criteria being met is recorded as deferred
revenue.
Revenues from contracts with multiple-element arrangements are recognized as each element is
earned based on the relative fair value of each element and only when there are no undelivered
elements that are essential to the functionality of the delivered elements.
Revenue from licensed software is recognized at the inception of the license term. Revenue from
software maintenance, unspecified upgrades and technical support contracts is recognized over
the period such items are delivered or services are provided. Technical support contracts
extending beyond the current period are recorded as deferred revenue.
Funding from certain research and development agreements is recognized as revenue when
certain criteria stipulated under the terms of those funding agreements have been met, and when
there is reasonable assurance the funding will be received. Certain research and development
funding will be repayable on the occurrence of specified future events. We recognize the liability
to repay research and development funding in the period in which conditions arise that would
cause research and development funding to be repayable.
(q)
Stock-based compensation and other stock-based payments

Stock options and restricted share units granted to the companys key officers, directors and
employees are accounted for using the fair value-based method. Under this method,
compensation cost for stock options is measured at fair value at the date of grant using the BlackScholes valuation model, and is expensed over the awards vesting period using the straight-line
method. Any consideration paid by plan participants on the exercise of stock options or the
purchase of shares is credited to Common stock together with any related stock-based
compensation expense. Compensation cost for restricted share units is measured at fair value at
the date of grant which is the market price of the underlying security, and is expensed over the
awards vesting period using the straight-line method. Stock-based compensation is described
further in note 24.
(r)
Income taxes
Income taxes are accounted for using the asset and liability method. Future income tax assets and
liabilities are based on temporary differences (differences between the accounting basis and the
tax basis of the assets and liabilities) and non-capital loss, capital loss, and tax credits carryforwards are measured using the enacted tax rates and laws expected to apply when these
59

differences reverse. Future tax benefits, including non-capital loss, capital loss, and tax credits
carry-forwards, are recognized to the extent that realization of such benefits is considered more
likely than not. The effect on future tax assets and liabilities of a change in tax rates is recognized
in earnings in the period that enactment occurs.
We include interest and penalties related to income taxes, including unrecognized tax benefits, in
income tax expense (recovery).
Liabilities for uncertain tax positions are recorded based on a two-step process. The first step is to
evaluate the tax position for recognition by determining if the weight of available evidence
indicates that it is more likely than not that the position will be sustained on audit, including
resolution of related appeals or litigation processes, if any. The second step is to measure the tax
benefit as the largest amount that is more than 50% likely of being realized upon settlement. We
regularly assess the potential outcomes of examinations by tax authorities in determining the
adequacy of our provision for income taxes. We continually assess the likelihood and amount of
potential adjustments and adjust the income tax provision, income taxes payable and deferred
taxes in the period in which the facts that give rise to a revision become known.
We recognize the windfall tax benefits associated with the exercise of stock options and release of
restricted share units to additional paid-in capital (APIC) when realized. This tax benefit is not
recognized until the deduction reduces taxes payable and all other available loss carryforwards
and tax credits have been utilized.
(s)
Derivatives
Derivatives, such as foreign currency forward and option contracts, are occasionally used to hedge
the foreign exchange risk on cash flows from commitments denominated in a foreign currency.
Derivatives that are not designated as hedging instruments are measured at fair value at each
balance sheet date and any resulting gains and losses from changes in the fair value are recorded
in other income (expense). Gains and losses from the effective portion of foreign currency forward
and option contracts that are designated as cash flow hedges are recorded in other comprehensive
income (loss). As at December 31, 2013 and 2012, we had no material derivative contracts in
place.
(t)
Earnings (loss) per common share

Basic earnings (loss) per share is computed by dividing net earnings (loss) attributable to the
company for the period by the weighted average number of company common shares outstanding
during the reporting period. Diluted earnings (loss) per share is computed using the treasury stock
method. When the effect of options and other securities convertible into common shares is antidilutive, including when the company has incurred a loss for the period, basic and diluted loss per
share are the same.
Under the treasury stock method, the number of dilutive shares, if any, is determined by dividing
the average market price of shares for the period into the net proceeds of in-the-money options.
60

(u)
Comprehensive income (loss)

Comprehensive income (loss) includes net earnings (loss) as well as changes in equity from other
non-owner sources. The other changes in equity included in comprehensive income (loss) are
comprised of foreign currency cumulative translation adjustments and unrealized gains or losses
on available-for-sale investments. The reclassification adjustment for other-than-temporary losses
on marketable securities included in net earnings (loss) results from the recognition of the
unrealized losses in the statements of operations when they are no longer viewed as temporary.
Comprehensive income (loss) is presented in the consolidated statements of shareholders equity.
(v)
Investment tax credits

Investment tax credits are accounted for using the flow-through method whereby such credits are
accounted for as a reduction of income tax expense in the period in which the credit arises.
(w)
Comparative figures
Certain figures presented in the consolidated financial statements have been reclassified to
conform to the presentation adopted for the current year. The company reclassified $2,414 from
effect on foreign exchange rate changes on cash and cash equivalents to other non-cash operating
item for the year ended December 31, 2012 related to the unrealized foreign exchange gain on an
intercompany loan.
3.
RECENTLY IMPLEMENTED ACCOUNTING STANDARDS

In July 2012, the FASB issued ASU 2012-02, Testing Indefinite-Lived Intangible Assets for Impairment (the
revised standard). The revised standard is intended to reduce the cost and complexity of testing indefinitelived intangible assets other than goodwill for impairment by providing entities with an option to perform
a qualitative assessment to determine whether further impairment testing is necessary. The revised
standard is effective for annual and interim impairment tests performed for fiscal years beginning after
September 15, 2012. The standard did not have a material impact on our consolidated financial
statements.
4.
CHANGES IN FUTURE ACCOUNTING STANDARDS

In July 2013, the FASB issued ASU 2013-11, Income Taxes (ASC 740) Presentation of an Unrecognized Tax
Benefit When a Net Operating Loss Carry forward, a Similar Tax Loss, or a Tax Credit Carry forward Exists
(Update). The update is intended to eliminate the diversity in practice of the presentation of an
unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit
carryforward exists. The update is effective for annual and interim financial statements for fiscal years
beginning after December 15, 2013. The amendments should be applied prospectively to all unrecognized
tax benefits that exist at the effective date. Retrospective application is permitted.
61

5.
ACQUISITION OF M2M BUSINESS OF SAGEMCOM

On August 1, 2012, we completed the acquisition of the M2M business of Sagemcom. Sagemcom, based
in France, is a leading technology company active in broadband, telecom, energy, and document
management. Its M2M business included 2G and 3G wireless modules, as well as industry-leading rugged
terminals for railway applications. The acquisition extended our leadership position in the growing M2M
market and offered a significantly enhanced market position for us in key segments, including payment,
transportation, and railways, as well as new geographical expansion into Brazil.
The acquisition included substantially all of the assets of the M2M business of Sagemcom for cash
consideration of 44.9 million ($55.2 million) plus assumed liabilities of 3.9 million ($4.8 million).
Sagemcoms results of operations and estimated fair value of assets acquired and liabilities assumed are
included in our consolidated financial statements from the date of acquisition.
We accounted for the transaction using the acquisition method and accordingly, the consideration has
been allocated to the tangible and intangible assets acquired and liabilities assumed on the basis of their
respective estimated fair values as at August 1, 2012. The excess of the purchase price over the final value
assigned to the net assets acquired was recorded as goodwill.
The following table summarizes the final amounts of the assets acquired and liabilities assumed recognized
at the acquisition date:
Assets acquired
Inventory
Machinery and equipment
Identifiable intangible assets
Goodwill
Liabilities assumed
Accrued liabilities
Long-term obligations
Fair value of net assets acquired
786
1,454
21,272
25,295
48,807
967
1,788
26,160
31,107
60,022
2,439
1,468
44,900
2,999
1,805
55,218
The goodwill of 25.3 million ($31.1 million) resulting from the acquisition consisted largely of the
expectation that the acquisition will extend our leadership position in the growing M2M market and offer
us a significantly enhanced market position. Goodwill was assigned to the OEM Solutions segment and it is
not deductible for tax purposes.
62

The following table provides the components of the identifiable intangible assets acquired that are subject
to amortization:
Estimated
useful life
(in years)
Patents
Customer relationships
Backlog
In-process research and development
5,259
13,887
1,382
744
21,272
8
8-13
1-2
5
$
6,468
17,078
1,699
915
26,160
The following table presents the unaudited pro forma results for the years ended 2012 and 2011. The pro
forma financial information combines the results of operations of Sierra Wireless, Inc. and the M2M
business of Sagemcom as though the businesses had been combined as of the beginning of fiscal 2011.
The pro forma financial information is presented for informational purposes only and is not indicative of
the results of operations that would have been achieved if the acquisition had taken place at the beginning
of fiscal 2011. The pro forma financial information presented includes amortization charges for acquired
tangible and intangible assets, and related tax effects, based on the values assigned in purchase price
allocation.
2012
Pro Forma information

Revenue
Net loss
Basic loss per share (in dollars)
Diluted loss per share (in dollars)
6.
$
$
423,653 $
(21,462)
(3,458)
(0.11) $
(0.11) $
2011
385,049
(48,406)
(44,806)
(1.43)
(1.43)
ACQUISITION OF M2M BUSINESS OF ANYDATA

On October 16, 2013, we completed the acquisition of substantially all of the M2M embedded module and
modem related assets of AnyDATA Corporation ("AnyDATA"). Its M2M business includes 3G and 4G
wireless modules and modems which are sold mainly in Korea. The acquisition extends our global
leadership position in the growing M2M market and offers a significantly enhanced market position for us
in key segments, as well as new geographical expansion into Korea.
The acquisition included substantially all of the assets of the M2M embedded module and modem related
assets of AnyDATA for cash consideration of $5.2 million plus minimal assumed liabilities.
AnyDATAs results of operations and fair value of assets acquired and liabilities assumed are included in our
consolidated financial statements from the date of acquisition.
We accounted for the transaction using the acquisition method and accordingly, the consideration has
been allocated to the tangible and intangible assets acquired and liabilities assumed on the basis of their
respective fair values, as at October 16, 2013. The excess of the purchase price over the final value
assigned to the net assets acquired was recorded as goodwill.
63

The following table summarizes the amounts of the assets acquired and liabilities assumed recognized at
the acquisition date:
$
Assets acquired
Inventory
Machinery and equipment
Identifiable intangible assets
Goodwill
1,296
68
1,793
2,061
5,218
Liabilities assumed
Accrued liabilities
Fair value of net assets acquired
22
5,196
The goodwill of $2.1 million resulting from the acquisition consists largely of the expectation that the
acquisition will extend our leadership position in the growing M2M market and offer us a significantly
enhanced market position. Goodwill was assigned to the OEM Solutions segment and it is not deductible
for tax purposes.
The following table provides the components of the identifiable intangible assets acquired that are subject
to amortization:
Estimated
useful life
(in years)
Existing technology
5
3
2
1,284
385
124
1,793
The amounts of revenue and net earnings of AnyDATAs M2M business included in our consolidated
statements of operations from the acquisition date, through the period ended December 31, 2013, was as
follows:
October 16, 2013 to
December 31, 2013
Revenue
Earnings
64
1,653
23

7.
DISPOSITION OF AIRCARD BUSINESS

On April 2, 2013, we completed the sale of substantially all of the assets and operations related to our
AirCard business to Netgear, Inc. ("Netgear") for total proceeds of $136.6 million (including $13.8 million of
proceeds held in escrow due April 2, 2014) after final inventory adjustments plus assumed liabilities. After
transaction costs of $2.8 million, we recorded an after tax gain on disposal of $70.2 million. We expect to
realize net cash proceeds of approximately $114 million from the divestiture after giving consideration to
related taxes, transaction costs and escrow retention for the purposes of indemnification. On the
disposition, 160 employees, primarily in sales, marketing and research and development, were transferred
to Netgear, as well as certain facilities in Carlsbad, California and Richmond, British Columbia.
The gain on sale of the AirCard business consisted of:
Cash proceeds received
Proceeds held in escrow
Total proceeds
Transaction costs
Net proceeds
Assets and liabilities held for sale
$
$
$
Gross gain on disposal

Income tax expense
Gain on disposal, net of taxes
122,807
13,800
136,607
(2,849)
133,758
(39,680)
94,078
(23,896)
70,182
The company utilized $14.4 million of deferred income tax assets on the gain on sale of the AirCard
business.
The assets and liabilities held for sale related to the AirCard disposition were as follows:
Inventories
Prepaids
Intangible assets
Goodwill
Assets held for sale
April 2, 2013
2,636
9,030
7,511
1,305
25,956
46,438
Liabilities held for sale
6,758
65
December 31, 2012

$
8,731
10,847
7,489
1,317
25,956
$
54,340
$
10,353

The results related to the AirCard business have been presented as discontinued operations in the
statement of earnings for the three years ended December 31 and were as follows:
Revenue
Cost of goods sold
Gross margin
Expenses
Earnings before income taxes
Income tax expense
$
$
$
$
2013
46,701
32,978
13,723
(12,918)
94,078
94,883
(24,295)
70,588
$
$
$
$
2012
246,845
177,147
69,698
(36,653)
33,045
(1,644)
31,401
$
$
$
$
2011
245,010
183,300
61,710
(37,369)
24,341
(3,003)
21,338
We had no significant customers related to discontinued operations during the year ended December 31,
2013 that accounted for more than 10% of our aggregated revenue from continuing and discontinued
operations (year ended December 31, 2012 - two significant customers comprising sales of $88,689 and
$73,091; year ended December 31, 2011 - three significant customers comprising sales of $77,216,
$68,361 and $66,001).
8.
SHORT-TERM INVESTMENTS
Short-term investments, all of which are classified as available-for-sale, are comprised of government
treasury bills and securities. As at December 31, 2013, we had $2,470 (December 31, 2012 - $nil) in
outstanding short-term investments.
9.
ACCOUNTS RECEIVABLE
The components of accounts receivable at December 31 were as follows:
Trade receivables
Less: allowance for doubtful accounts
Sales taxes receivable

Proceeds from Aircard sale held in escrow
Other receivables
$
66
2013
82,086 $
(2,279)
79,807
3,598
13,800
15,285
112,490 $
2012
96,779
(2,435)
94,344
2,594
11,686
108,624

The movement in the allowance for doubtful accounts during the years ended December 31 were as
follows:
Balance, beginning of year
Bad debt expense
Write-offs and settlements
Foreign exchange
10.
2013
2,435 $
1,077
(1,242)
9
2,279 $
2012
3,642
386
(1,608)
15
2,435
INVENTORIES
The components of inventories at December 31 were as follows:
Electronic components
Finished goods
11.
2013
2,930
5,323
2012
7,206
5,469
8,253
12,675
PREPAIDS AND OTHER

The components of prepaids and other at December 31 were as follows:
Inventory advances
Insurance and licenses
Other
67
2013
21,382
4,735
2,624
28,741
2012
17,613
2,374
4,265
24,252

12.
PROPERTY AND EQUIPMENT

The components of property and equipment at December 31 were as follows:
2013

Tooling
Computer equipment
Software
Leasehold improvements
Leased vehicles
Office equipment

Tooling
Computer equipment
Software
Leasehold improvements
Leased vehicles
Office equipment
Accumulated
Cost
amortization
1,595 $
928
28,264
21,966
36,307
28,269
5,253
3,862
5,641
3,591
3,156
865
1,332
796
3,013
2,302
84,561
62,579
2012
Accumulated
Cost
amortization
4,557 $
3,755
21,875
16,504
25,000
17,577
7,614
6,048
9,358
7,863
4,973
3,070
1,206
587
3,144
2,284
77,727
57,688
Net book
value
667
6,298
8,038
1,391
2,050
2,291
536
711
21,982
Net book
value
802
5,371
7,423
1,566
1,495
1,903
619
860
20,039
Amortization expense relating to property and equipment, including those related to discontinued
operations, was $10,057, $12,583, and $14,528 for the years ended December 31, 2013, 2012, and 2011,
respectively.
68

13.
INTANGIBLE ASSETS
The components of intangible assets at December 31 were as follows:
2013

Licenses
Intellectual property
Backlog
Non-compete

Licenses
Intellectual property
Backlog
Non-compete
Accumulated
Cost
amortization
16,465 $
7,638
64,494
51,831
7,130
7,019
47,539
29,229
1,906
1,906
2,955
2,955
7,205
3,485
147,694
104,063
2012
Accumulated
Cost
amortization
15,466 $
5,317
61,660
42,134
7,006
6,995
45,065
23,474
1,823
538
2,827
2,827
6,524
2,729
140,371
84,014
Net book
value
8,827
12,663
111
18,310
3,720
43,631
Net book
value
10,149
19,526
11
21,591
1,285
3,795
56,357
Estimated annual amortization expense for the next 5 years ended December 31 are as follows:
2014
2015
2016
2017
2018
13,016
6,791
4,912
4,592
3,511
During the fourth quarter of 2011, we recorded an impairment charge of $11,214, primarily related to a
software development program we decided not to complete. This asset was acquired through the
acquisition of Wavecom. We did not record an impairment charge for the years ended December 31,
2013 and 2012.
69

Amortization expense relating to intangible assets, including those related to discontinued operations, was
$18,239, $16,007, and $17,858 for the years ended December 31, 2013, 2012, and 2011, respectively.
At December 31, 2013, a net carrying amount of $1,175 included in intangible assets was not subject to
amortization.
14.
GOODWILL
We assessed the realizability of goodwill during the fourth quarter of 2013 and determined that the fair
value of each reporting unit exceeded its carrying value. Therefore, the second step of the impairment
test that measures the amount of an impairment loss by comparing the implied fair market value with the
carrying amount of goodwill for each reporting unit was not required. There was no impairment of
goodwill during the years ended December 31, 2013, 2012 and 2011.
The changes in the carrying amount of goodwill for the years ended December 31 were as follows:
Balance at beginning of year
Goodwill acquired during year (note 5 and 6)
Goodwill allocated to discontinued operations (note 7)
Foreign currency translation adjustments
2013
97,961
2,061
2,696
102,718
87,356
15,362
102,718
OEM Solutions
15.
2012
89,961
31,107
(25,956)
2,849
97,961
82,885
15,076
97,961
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

The components of accounts payable and accrued liabilities at December 31 were as follows:
Trade payables
Inventory commitment reserve
Accrued royalties
Accrued payroll and related liabilities
Taxes payable (including sales taxes)
Product warranties
Marketing development funds
Other
70
2013
60,568
1,797
22,960
11,087
11,861
5,861
302
10,410
124,846
2012
64,351
1,465
22,450
12,662
9,181
4,169
38
13,900
128,216

16.
LONG-TERM OBLIGATIONS
The components of long-term obligations at December 31 were as follows:
Accrued royalties
Other
2013
17,605
3,945
21,550
$
$
17.
2012
23,566
2,960
26,526
$
$
INCOME TAXES
The components of earnings (loss) before income taxes consist of the following:
Continuing operations:
Canadian
Foreign
Discontinued operations:
Canadian
Foreign
Earnings (loss) before income taxes
2013
2012
6,497 $
(20,436)
(13,939)
24,802 $
(43,878)
(19,076)
80,395
14,488
94,883
80,944
15,617
17,428
33,045
13,969
2011
(22,099)
(32,579)
(54,678)
5,898
18,443
24,341
(30,337)
The income tax expense (recovery) consists of:

2013
Canadian:
Current
Deferred
Foreign:
Current
Deferred
64
10,614
10,678
9,646
5,582
15,228
Total:
Current
Deferred
$
9,710
16,196
25,906
1,611
24,295
25,906
Classification:
Income tax expense (recovery) continuing operations
Income tax expense discontinued operations
71
2012
2011
(106) $
(14,268)
(14,374)
123
1,981
2,104
219
925
1,144
1,815
(4,884)
(3,069)
113
(13,343)
(13,230) $
1,938
(2,903)
(965)
(14,874)
1,644
(13,230) $
(3,968)
3,003
(965)

The reconciliation of income taxes calculated at the statutory rate to the actual income tax provision for
the years ended December 31 was as follows:
2013
Income tax expense (recovery) at Canadian statutory income
tax rates
Increase (decrease) in income taxes for:
Permanent and other differences
Change in statutory/foreign tax rates
Change in valuation allowance
Stock-based compensation expense
Adjustment to prior years
2012
20,872
(2,339)
(1,210)
8,875
(150)
(142)
25,906 $
3,499
2011
$
(8,023)
(5,279)
(2,762)
(10,358)
1,603
67
(13,230) $
6,335
(1,973)
1,805
891
(965)
Future tax assets and liabilities

The tax effects of temporary differences that give rise to significant future tax assets and future tax
liabilities were as follows at December 31:
2013
Future income tax assets
Non capital loss carry-forwards
Capital loss carry-forwards
Scientific research and development expenses and credits
Reserves and other
Acquired Intangibles
Future income tax liabilities

Acquired intangibles
Valuation allowance
$
3,664
76,780
2,416
28,081
14,201
1,178
126,320
126,320
116,880
9,440
2012
$
2013
Classification:
Assets
Current
Non-current
Liabilities
Non-current
72
2,391
7,176
4,165
70,824
2,655
36,961
8,974
123,579
2,920
120,659
94,880
25,779
2012
(127)
9,440 $
22,199
3,880
(300)
25,779

At December 31, 2013, we have provided for a valuation allowance on our future tax assets of $116,880
(2012 -$94,880).
At December 31, 2013, we have Canadian allowable capital loss carry-forwards of $11,287 that are
available, indefinitely, to be deducted against future Canadian taxable capital gains. In addition, we have
investment tax credits of $22,352 and $9,984 available to offset future Canadian federal and provincial
income taxes payable, respectively. Of these amounts, $216 and $147, respectively, are associated with
windfall tax benefits and will be recorded as additional paid-in-capital when realized. The investment tax
credits expire between 2014 and 2033. At December 31, 2013, our U.S. subsidiary has $6,445 of California
research & development tax credits which may be carried forward indefinitely. The amounts are after the
estimated utilization from the sale of AirCard business described below.
At December 31, 2013, net operating loss carry-forwards for our foreign subsidiaries were $10,363 for U.S.
income tax purposes that expire between 2020 and 2032, $79 for Hong Kong income tax purposes, $233
for Korea income tax purposes, $448 for Luxembourg income tax purposes, and $210,912 for French
income tax purposes. Our foreign subsidiaries may be limited in their ability to use foreign net operating
losses in any single year depending on their ability to generate significant taxable income. In addition, the
utilization of the U.S. net operating losses is also subject to ownership change limitations provided by U.S.
federal and specific state income tax legislation. The amount of French net operating losses deducted each
year is limited to 1,000 plus 50% of French taxable income in excess of 1,000. Our French net operating
losses carry-forward is subject to the continuity of business requirement. Our French subsidiaries also
have research tax credit carried forward of $10,544 as at December 31, 2013. The French research tax
credit may be used to offset against corporate income tax and if any credit is not fully utilized within a
three year period following the year the research tax credit is earned, it may be refunded by the French tax
authorities. Tax loss and research tax credit carry-forwards are denominated in the currency of the
countries in which the respective subsidiaries are located and operate. Fluctuations in currency exchange
rates could reduce the U.S. dollar equivalent value of these tax loss and research tax credit carry forwards
in future years.
In assessing the realizability of our future tax assets, management considers whether it is more likely than
not that some portion or all of the future tax assets will not be realized. The ultimate realization of future
tax assets is dependent upon the generation of future taxable income during periods in which temporary
differences become deductible and the loss carry-forwards or tax credits can be utilized. Management
considers projected future taxable income and tax planning strategies in making our assessment.
On the disposition of the AirCard assets to Netgear (note 7), we expect to utilize approximately $20,946 of
Canadian scientific research and development expenditures, approximately $44 of Canadian allowable
capital loss, approximately $4,310 of Canadian Federal and Provincial investment tax credits,
approximately $4,401 of U.S. net operating loss, and approximately $2,439 of U.S. Federal and California
research & development tax credit. The estimated utilization is subject to change.
No provision for taxes have been provided on undistributed foreign earnings, as it is the companys
intention to indefinitely reinvest undistributed earnings of its foreign subsidiaries. It is not practical to
estimate the income tax liability that might be incurred if there is a change in managements intention in
the event that a remittance of such earnings occurs in the future.
73

Accounting for uncertainty in income taxes

At December 31, 2013, we had gross unrecognized tax benefits of $8,304 (2012 $8,227). Of this total,
$5,336 (2012 $5,349) represents the amount of unrecognized tax benefits that, if recognized, would
favorably impact our effective tax rate.
Below is a reconciliation of the total amounts of unrecognized tax benefits for the years ended
December 31:
Unrecognized tax benefits, beginning of year
Increases tax positions taken in prior periods
Increases (decreases) tax positions taken in current period
Settlements and lapse of statute of limitations
Unrecognized tax benefits, end of year
2013
8,227 $
252
138
(313)
8,304 $
2012
9,464
55
(238)
(1,054)
8,227
We recognize interest expense and penalties related to unrecognized tax benefits within the provision for
income tax expense on the consolidated statement of operations. At December 31, 2013, we had accrued
$1,590 (2012 -$1,488) for interest and penalties.
In the normal course of business, we are subject to audit by the Canadian federal and provincial taxing
authorities, by the U.S. federal and various state taxing authorities and by the taxing authorities in various
foreign jurisdictions. Tax years ranging from 2004 to 2013 remain subject to examination in Canada, the
United States, the United Kingdom, France, Germany, Australia, China, Hong Kong, Brazil, South Africa,
Japan, Korea, Taiwan, Italy, and Luxembourg.
The Company regularly engages in discussions and negotiations with tax authorities regarding tax matters
in various jurisdictions. The Company believes it is reasonably possible that certain tax matters may be
concluded in the next 12 months. The Company estimates that the unrecognized tax benefits at December
31, 2013 could be reduced by approximately $2,059 in the next 12 months.
18.
ACCUMULATED OTHER COMPREHENSIVE LOSS

The components of accumulated other comprehensive loss at December 31, net of taxes, were as follows:
2013
Release of foreign currency translation relating to acquisition of non-controlling
interest
Translation adjustment related to change in functional currency
Foreign currency translation adjustments
74
178 $
(728)
(6,308)
(6,858) $
2012
178
(728)
(6,912)
(7,462)

19.
RESEARCH AND DEVELOPMENT

The components of research and development costs consist of the following:
Gross research and development
Government tax credits
20.
2013
75,980 $
(2,868)
2012
64,346 $
(2,561)
2011
63,424
(2,521)
73,112
61,785
60,903
RESTRUCTURING
The following table provides the activity in the restructuring liability:

Expensed in year
Disbursements
Foreign exchange
Balance, end of year
Classification:
41
41
41
By restructuring initiative:
May 2009
Wavecom S.A. and prior
75
Workforce
Reduction
472 $
115
(548)
2
41 $
2013
Facilities
182 $
56
(191)
47 $
47
47
47
Total
654
171
(739)
2
88
88
47
41
88

Balance, beginning of period

Expensed in year
Disbursements
Adjustments
Foreign exchange
Balance, end of period
Classification:
Other long term obligations
$
$
By restructuring initiative:
September 2010
May 2009
Wavecom S.A. and prior
Workforce
Reduction
625 $
2,167
(2,340)
(21)
41
472 $
472
472
433
39
472
2012
Facilities
562 $
84
(464)
182 $
149
33
182
182
182
Total
1,187
2,251
(2,804)
(21)
41
654
621
33
654
433
182
39
654
April 2012
In April 2012, we announced the closure of our Newark, California facility, effective December 31, 2012, to
drive greater efficiency and leverage. Subsequently, our AirLink marketing, research and development,
and customer support activities primarily transferred to the Richmond, British Columbia, facilities, and
manufacturing operations transferred to our manufacturing partner in Suzhou, China. For the year ended
December 31, 2013, we recorded $115 (December 31, 2012 - $1,980) in restructuring costs related to this
initiative. The outstanding restructuring obligation was fully paid by July 31, 2013.
September 2010
In September 2010, we implemented a new business unit structure that resulted in a reduction of our
workforce by 60 employees. These reductions were substantially completed during the fourth quarter of
2010. For the year ended December 31, 2010, we recorded restructuring costs of $4,420 primarily related
to severance and benefits associated with the terminated employees. The restructuring obligation was
fully paid by December 31, 2012.
76

21.
OTHER INCOME (EXPENSE)

The components of other income (expense) for the years ended December 31 were as follows:
Gain (loss) on disposal of property, equipment, and
intangibles
Interest income
Interest expense
22.
2013
2012
2011
10 $
237
(345)
(107) $
108
(197)
(40)
199
(124)
(98) $
(196) $
35
EARNINGS (LOSS) PER SHARE

The following table provides the reconciliation between basic and diluted earnings (loss) per share:
Net loss attributable to non-controlling interest
Net earnings (loss) attributable to the company
2013
(15,550) $
70,588
55,038 $
2012
(4,202) $
31,401
27,199 $
2011
(50,710)
21,338
(57)
(29,315)
Weighted average shares used in computation of:

Basic
Assumed conversion
Diluted
30,771
30,771
30,788
30,788
31,275
31,275
Basic and dilutive earnings (loss) per share attributable to the

companys common shareholders (in dollars):
$
(0.50)
2.29
1.79 $
(0.14)
1.02
0.88 $
(1.62)
0.68
(0.94)
As the Company incurred a loss, all equity awards were anti-dilutive and are excluded from the diluted
weighted average shares.
23.
SHARE CAPITAL
On February 6, 2013, we received regulatory approval allowing us to purchase for cancellation up to
1,529,687 of our common shares by a normal course issuer bid (the Bid) on the Toronto Stock Exchange
and NASDAQ Global Market. The Bid commenced on February 14, 2013 and terminated on February 13,
2014. During the year ended December 31, 2013, we purchased 510,439 common shares (year ended
December 31, 2012 - 800,000 common shares) in the open market at an average price of $11.31 per share
(year ended December 31, 2012 - $7.89 per share). The amount paid to acquire the shares over and above
the average carrying value has been charged to retained earnings.
77

24.
STOCK-BASED COMPENSATION PLANS

(a)
Stock-based compensation expense:

2013
Cost of goods sold

Sales and marketing
Administration
406
1,862
1,433
4,289
7,990
1,357
9,347
2,548
6,799
9,347
Stock option plan

Restricted stock plan
(b)
2012
$
304
1,149
1,341
2,987
5,781
932
6,713
2,121
4,592
6,713
2011
$
385
1,075
1,110
2,928
5,498
951
6,449
2,844
3,605
6,449
Stock option plan
Under the terms of our Stock Option Plan (the Plan), our Board of Directors may grant options to
employees, officers and directors. The maximum number of shares available for issue under the Plan is
the lesser of 10% of the number of issued and outstanding common shares from time to time or 7,000,000
common shares. Based on the number of shares outstanding as at December 31, 2013, stock options
exercisable into 1,572,198 common shares are available for future allocation under the Plan.
The Plan provides that the exercise price of an option will be determined on the date of grant and will not
be less than the closing market price of our stock at that date. Options generally vest over four years, with
the first 25% vesting at the first anniversary date of the grant and the balance vesting in equal amounts at
the end of each month thereafter. We determine the expiry date of each option at the time it is granted,
which cannot be more than five years after the date of the grant.
The fair value of share options was estimated on the date of grant using the Black-Scholes option-pricing
model with the following assumptions:
Risk-free interest rate
Annual dividends per share
Expected stock price volatility
Expected option life (in years)
Estimated forfeiture rate
Average fair value of options granted (in dollars)
2013
0.89%
Nil
50%
4.0
3.5%
4.42
2012
0.85%
Nil
57%
4.0
3.5%
3.42
2011
2.07%
Nil
60%
4.0
3.5%
5.11
There is no dividend yield because we do not pay, and do not plan to pay, cash dividends on our common
shares. The expected stock price volatility is based on the historical volatility of our average monthly stock
closing prices over a period equal to the expected life of each option grant. The risk-free interest rate is
based on yields from risk-free instruments with a term equal to the expected term of the options being
78

valued. The expected life of options represents the period of time that the options are expected to be
outstanding based on historical data of option holder exercise and termination behavior. We estimate
forfeitures at the time of grant and, if necessary, revise that estimate if actual forfeitures differ and adjust
stock-based compensation expense accordingly.
The following table presents stock option activity for the years ended December 31:
Weighted Average
Exercise Price
Number of
Options
Outstanding, December 31, 2010

Granted
Exercised
Forfeited
Granted
Exercised
Forfeited
Granted
Exercised
Forfeited
Cdn.$
2,259,728
658,452
(83,906)
(536,399)
2,297,875
636,963
(85,051)
(493,910)
2,355,877
642,025
(965,228)
(495,088)
1,537,586
U.S.$
12.51
10.88
6.06
13.91
12.11
7.85
5.16
17.58
9.89
11.92
8.81
15.14
10.37
Weighted
Average
Remaining
Contractual Life
Aggregate
Intrinsic Value
In Years
U.S.$
12.54
10.89
6.19
13.97
11.86
7.82
5.12
17.42
9.96
11.22
8.29
14.25
9.76
2.4
7,878
417
2.5
705
297
2.5
735
5,425
3.1
22,164
The intrinsic value of outstanding stock options is calculated as the quoted market price of the stock at the
balance sheet date, or date of exercise, less the exercise price of the option.
The following table summarizes the stock options outstanding and exercisable at December 31, 2013:
Range of
Number
of
Exercise Prices
Options
$3.98 $7.99 U.S.

$4.23 $8.48 Cdn
$8.00 $10.51 U.S.
$8.49 $11.17 Cdn
$10.52 $11.05 U.S.
$11.18 $11.74 Cdn
$11.06 $11.87 U.S.
$11.75 $12.61 Cdn
Options Outstanding
Weighted
Weighted
Average
Average
Remaining
Exercise Price
Option Life
(years)
Cdn.$
U.S.$
Options Exercisable
Number
Of options
Exercisable
Weighted
Average
Exercise Price
Cdn.$
U.S.$
424,697
3.0
8.00
7.53
137,209
7.75
7.30
378,070
1.7
10.08
9.49
276,615
9.89
9.31
360,858
4.1
11.61
10.93
12,165
11.20
10.55
373,961
1,537,586
3.6
3.1
12.15
10.37
11.44
9.76
44,649
470,638
11.83
9.48
11.14
8.93
The options outstanding at December 31, 2013 expire between February 14, 2014 and May 16, 2018.
79

As at December 31, 2013, the unrecognized stock-based compensation cost related to the non-vested
stock options was $3,641 (2012 $3,836; 2011 $3,969), which is expected to be recognized over a
weighted average period of 2.5 years (2012 2.4 years; 2011 2.6 years).
(c)
Restricted share plans
We have two market based restricted share unit plans: one for U.S. employees and one for all non-U.S.
employees, and a treasury based restricted share unit plan (collectively, the RSPs). The RSPs further our
growth and profitability objectives by providing long-term incentives to certain executives and other key
employees and also encourage our objective of employee share ownership through the granting of
restricted share units (RSUs). There is no exercise price or monetary payment required from the
employees upon the grant of an RSU or upon the subsequent delivery of our common shares (or, in certain
jurisdictions, cash in lieu at the option of the Company) to settle vested RSUs. The form and timing of
settlement is subject to local laws. With respect to the treasury based RSP, the maximum number of
common shares which the Company may issue from treasury is 1,000,000 common shares. With respect
to the two market based RSPs, independent trustees purchase Sierra Wireless common shares over the
facilities of the TSX and Nasdaq, which are used to settle vested RSUs. The existing trust funds are variable
interest entities and are included in these consolidated financial statements as treasury shares held for
RSU distribution.
Generally, RSUs vest over three years, in equal one-third amounts on each anniversary date of the date of
the grant. RSU grants to employees who are resident in France for French tax purposes will not vest before
the second anniversary from the date of grant, and any shares issued are subject to an additional two year
tax hold period. There were 1,415,922 unvested RSUs and 26,193 vested and not settled RSUs outstanding
as at December 31, 2013.
The intrinsic value of outstanding RSUs is calculated as the quoted market price of the stock at the balance
sheet date, or date of vesting.
80

The following table summarizes the RSU activity for the years ended December 31:
Number of
RSUs
Weighted Average
Grant Date Fair Value
Cdn.$
U.S.$
Weighted
Average
Remaining
Contractual Life
Aggregate
Intrinsic
Value
In years
U.S.$

Granted
Vested
Forfeited
827,991
486,343
(379,121)
(31,184)
6.81
10.83
11.10
8.54
6.83
10.84
11.11
8.43
1.3

Granted
Vested
Forfeited
904,029
856,784
(499,038)
(36,780)
8.94
7.89
7.67
9.09
8.43
7.89
7.67
9.00
1.3
1,224,995
843,592
(573,613)
(52,859)
1,442,115
26,193
1,415,922
1,442,115
8.71
12.09
9.54
9.74
10.59
8.68
11.38
8.98
9.17
9.98
1.9

Granted
Vested
Forfeited
Outstanding vested and not settled
Outstanding unvested
12,346
4,170
6,346
3,835
9,746
6,456
1.8
34,867
As at December 31, 2013, the total remaining unrecognized compensation cost associated with the RSUs
totaled $8,058 (2012 $5,950; 2011 $4,176), which is expected to be recognized over a weighted
average period of 1.8 years (2012 1.6 years; 2011 1.9 years).
RSUs are valued at the market price of the underlying securities on the grant date and the compensation
expense, based on the estimated number of awards expected to vest, is recognized on a straight-line basis
over the three-year vesting period. Grants to French employees are expensed over a two-year vesting
period.
25.
NON-CONTROLLING INTEREST
The non-controlling interest represents shares held by former Wavecom employees under their long-term
incentive plan. The shares had vested, but were subject to a hold period for tax purposes. We had
entered into a put/call agreement with these employees to purchase back the shares at 8.50 per share
upon expiry of the tax hold period. Until that time, the shares were considered non-controlling interest.
On June 8, 2011, the tax hold period expired on these vested shares. During the year ended December 31,
2013, no shares were acquired (year ended December 31, 2012 - 4,250 shares). The obligation for the
remaining 500 shares at 8.50 per share has been recorded as at December 31, 2013 and is classified
under accrued liabilities.
81

26.
FAIR VALUE MEASUREMENT

(a) Fair value presentation
An established fair value hierarchy requires the Company to maximize the use of observable inputs and
minimize the use of unobservable inputs when measuring fair value. A financial instruments
categorization within the fair value hierarchy is based upon the lowest level of input that is available and
significant to the fair value measurement. There are three levels of inputs that may be used to measure
fair value:
Level 1
Quoted prices in active markets for identical assets or liabilities.
Level 2
Observable inputs other than quoted prices in active markets for identical assets and
liabilities, such as quoted prices for identical or similar assets or liabilities in markets that
are not active, or other inputs that are observable or can be corroborated by observable
market data for substantially the full term of the assets or liabilities.
Level 3
Inputs that are generally unobservable and are supported by little or no market activity
and that are significant to the fair value determination of the assets or liabilities.
The carrying value of cash and cash equivalents, accounts receivable, accounts payable and accrued
liabilities, approximate their fair value due to the immediate or short-term maturity of these financial
instruments. Short-term investments are recorded at fair value and their carrying value as at December 31,
2013 was $2,470 (December 31, 2012 $nil). Our short-term investments are classified within Level 1 of
the valuation hierarchy. Based on borrowing rates currently available to us for loans with similar terms,
the carrying values of our obligations under capital leases, long-term obligations and other long-term
liabilities approximate their fair values.
On July 23, 2012, foreign currency forward exchange contracts for a notional US$56.3 million to acquire
45.0 million in connection with the acquisition of the M2M business of Sagemcom settled. For twelve
months ended December 31, 2012, we realized a loss of $1,761, which is classified in Foreign exchange
gain (loss) on these forward contracts.
(b) Credit Facilities
On October 31, 2013 we renewed our $10 million revolving term credit facility ("Revolving Facility") for a
two year term which expires on October 31, 2015. The Revolving Facility with Toronto Dominion Bank and
the Canadian Imperial Bank of Commerce is for working capital requirements, is secured by a pledge
against all of our assets, and is subject to borrowing base limitations. Other terms of the Revolving Facility
remain substantially unchanged. As at December 31, 2013, there were no borrowings under the Revolving
Facility.
(c)
Letters of credit
We have entered into a standby letter of credit facility agreement under which we have issued two
performance bonds to third party customers in accordance with specified terms and conditions. At
December 31, 2013, we had two Euro denominated performance bonds amounting to 50 thousand
expiring in June 2014 (December 31, 2012 - 50 thousand) and no other performance bonds (December
31, 2012 - $176). The carrying value of these instruments approximate their fair market value.
82

27.
FINANCIAL INSTRUMENTS
Financial Risk Management
Financial instruments consist primarily of cash and cash equivalents, accounts receivable, accounts payable
and accrued liabilities.
We have exposure to the following business risks:
We maintain substantially all of our cash and cash equivalents with major financial institutions or invest in
government instruments. Our deposits with banks may exceed the amount of insurance provided on such
deposits.
We outsource manufacturing of our products to third parties and, accordingly, we are dependent upon the
development and deployment by third parties of their manufacturing abilities. The inability of any supplier
or manufacturer to fulfill our supply requirements could impact future results. We have supply
commitments to our contract manufacturers based on our estimates of customer and market demand.
Where actual results vary from our estimates, whether due to execution on our part or market conditions,
we are at risk.
Financial instruments that potentially subject us to concentrations of credit risk are primarily accounts
receivable. We perform on-going credit evaluations of our customers financial condition and require
letters of credit or other guarantees whenever deemed appropriate.
Although a significant portion of our revenues are in U.S. dollars, we incur operating costs and have
obligations related to our facilities restructuring that are denominated in other currencies. Fluctuations in
the exchange rates between these currencies could have a material impact on our business, financial
condition and results of operations.
We are generating and incurring an increasing portion of our revenue and expenses, respectively, outside
of North America including Europe, the Middle East and Asia. To manage our foreign currency risks, we
may enter into foreign currency forward and options contracts should we consider it to be advisable to
reduce our exposure to future foreign exchange fluctuations. As at December 31, 2013 and 2012, we had
no such contracts in place.
We are subject to risks typical of an international business including, but not limited to, differing economic
conditions, changes in political climate, differing tax structures other regulations and restrictions and
foreign exchange rate volatility. Accordingly, our future results could be materially affected by changes in
these or other factors.
83

28.
COMMITMENTS AND CONTINGENCIES

(a) Operating leases
We have entered into operating leases for property and equipment. The minimum future payments under
various operating leases for our continuing operations in each of the years ended December 31 is as
follows:
2014
2015
2016
2017
2018
Subsequent years
5,032
4,164
3,970
3,782
3,672
7,298
27,918
(b) Contingent liability on sale of products

(i)
Under license agreements, we are committed to make royalty payments based on the sales of
products using certain technologies. We recognize royalty obligations as determinable in
accordance with agreement terms. Where agreements are not finalized, we have recognized our
current best estimate of the obligation. When the agreements are finalized, the estimate will be
revised accordingly.
(ii)
We are a party to a variety of agreements in the ordinary course of business under which we may
be obligated to indemnify a third party with respect to certain matters. Typically, these obligations
arise as a result of contracts for sale of our products to customers where we provide
indemnification against losses arising from matters such as potential intellectual property
infringements and product liabilities. The impact on our future financial results is not subject to
reasonable estimation because considerable uncertainty exists as to whether claims will be made
and the final outcome of potential claims. To date, we have not incurred material costs related to
these types of indemnifications.
(iii)
In March 2004, we entered into an agreement with the Government of Canadas Technology
Partnerships Canada (TPC) program, under which we were eligible to receive conditionally
repayable research and development funding up to Cdn. $9,540 to support the development of a
range of third generation wireless technologies. Under the terms of the agreement, all or part of
the contribution was repayable upon the occurrence of certain prescribed events of default. In
March 2009, we signed an amended agreement under which we will repay a total of Cdn. $2,500,
with payments due on March 1 for each of the next five years beginning March 1, 2009, in full and
final satisfaction of all amounts owing, or to be owed, to TPC under this agreement. During the
year ended December 31, 2013, we made the final payment of Cdn. $500.
84

(iv)
We accrue product warranty costs, when we sell the related products, to provide for the repair or
replacement of defective products. Our accrual is based on an assessment of historical experience
and on managements estimates. An analysis of changes in the liability for product warranties
follows:
Provisions
Expenditures
Liability held for sale
Balance, end of year
2013
4,169 $
7,368
(5,676)
5,861 $
2012
4,537
9,399
(8,178)
(1,589)
4,169
(c) Other commitments

We have entered into purchase commitments totaling approximately $77,708 net of related electronic
components inventory of $2,155 (December 31, 2012 $54,850, net of electronic components
inventory of $7,697), with certain contract manufacturers under which we have committed to buy a
minimum amount of designated products between January 2014 and March 2014. In certain of these
agreements, we may be required to acquire and pay for such products up to the prescribed minimum
or forecasted purchases.
(d) Legal proceedings
We are from time to time involved in litigation, certain other claims and arbitration matters arising in
the ordinary course of our business. We accrue for a liability when it is both probable that a liability
has been incurred and the amount of the loss can be reasonably estimated. Significant judgment is
required in both the determination of probability and the determination as to whether a loss is
reasonably estimable. These accruals are reviewed at least quarterly and adjusted to reflect the
impacts of negotiations, settlements, rulings, advice of legal counsel and technical experts and other
information and events pertaining to a particular matter. To the extent there is a reasonable possibility
(within the meaning of ASC 450, Contingencies) that the losses could exceed the amounts already
accrued for those cases for which an estimate can be made, management believes that the amount of
any such additional loss would not be material to our results of operations or financial condition.
In some instances, we are unable to reasonably estimate any potential loss or range of loss. The
nature and progression of litigation can make it difficult to predict the impact a particular lawsuit will
have on the company. There are many reasons why we cannot make these assessments, including,
among others, one or more of the following: in the early stage of a proceeding, the claimant is not
required to specifically identify the patent that has allegedly been infringed; damages sought that are
unspecified, unsupportable, unexplained or uncertain; discovery not having been started or being
incomplete; the complexity of the facts that are in dispute (e.g., once a patent is identified, the
analysis of the patent and a comparison to the activities of the company is a labor-intensive and highly
technical process); the difficulty of assessing novel claims; the parties not having engaged in any
meaningful settlement discussions; the possibility that other parties may share in any ultimate liability;
and the often slow pace of patent litigation.
We are required to apply judgment with respect to any potential loss or range of loss in connection
with litigation. While we believe we have meritorious defenses to the claims asserted against us in our
85

currently outstanding litigations, and intend to defend ourselves vigorously in all cases, in light of the
inherent uncertainties in litigation there can be no assurance that the ultimate resolution of these
matters will not significantly exceed the reserves currently accrued by us for those cases for which an
estimate can be made. Losses in connection with any litigation for which we are not presently able to
reasonable estimate any potential loss or range of loss could be material to our results of operations
and financial condition.
In November 2013, we filed a complaint against Nokia Corporation in the EU Commission for breach of
Article 102 of the European Union Treaty. The complaint alleges that Nokia Corporation abuses a
dominant position, discriminates, applies unfair royalties and wrongfully refuses to grant a license to
Sierra Wireless in the context of Nokia's essential patents licensing program. We also believe that
Nokia Corporation violates section 5 of the FTC Act (United States) and have sent a notice to the
Federal Trade Commission (FTC) setting out these violations. The EU Commission and FTC are each
currently reviewing the materials we have submitted to them. On January 6 2014, we received notice
from the International Chamber of Commerce of arbitration proceedings launched by Nokia
Corporation against Sierra Wireless, for alleged unpaid royalties of approximately $29 million. We
believe Nokia's arbitration claims are without legal merit, and we will defend ourselves vigorously.
Nonetheless, an unfavorable outcome could have a material adverse effect on our operating results,
liquidity or financial position.
In December 2012, Concinnitas LLC filed a patent infringement lawsuit in the United States District
Court for the Eastern District of Texas asserting patent infringement by us. The lawsuit makes
allegations concerning AirCard products. In September 2013, a mutually agreeable confidential
settlement was entered into by the parties which will not have a material adverse effect on our
operating results. The lawsuit was subsequently dismissed with prejudice.
In April 2012, a patent holding company, Cell and Network Selection, LLC (CNS), filed a patent
infringement lawsuit in the United States District Court for the District of Texas asserting patent
infringement by us and our customer. In May 2013, this lawsuit was dismissed upon motion of CNS
and a new lawsuit was filed by CNS in the same court. The lawsuit makes certain allegations
concerning the LTE products sold by us, including the mobile hotspots and USB modems sold by us to
AT&T prior to the transfer of the AirCard business to Netgear. In September 2013, a mutually
agreeable confidential settlement was entered into by the parties which will not have a material
adverse effect on our operating results. The lawsuit was subsequently dismissed with prejudice.
In January 2012, a patent holding company, M2M Solutions LLC ("M2M"), filed a patent infringement
lawsuit in the United States District Court for the District of Delaware asserting patent infringement by
us and our competitors. The lawsuit makes certain allegations concerning the AirPrime embedded
wireless module products, related AirLink products and related services sold by us for use in M2M
communication applications. The lawsuit is in the discovery stage. The claim construction order has
determined one of the two patents-in-suit to be indefinite and therefore invalid. Trial is anticipated to
occur in September 2014. In February 2014, we filed a declaratory judgment action in the same court
seeking a declaration of non-infringement with respect to a recently issued patent held by M2M,
which patent is a continuation of the patents-in-suit in the original lawsuit filed against us by M2M.
In September 2011, a patent holding company, Wi-Lan, Inc., filed a patent infringement lawsuit in the
United States District Court for the Eastern District of Texas asserting patent infringement by a number
of parties, including us. The lawsuit makes certain allegations concerning the wireless communication
86

products sold by us. In September 2012, the lawsuit was consolidated with another lawsuit
commenced by Wi-Lan in the Eastern District of Texas concerning the same patents. In
December 2012, Wi-Lan filed additional patent litigation lawsuits in the United States District Court for
each of the Eastern District of Texas and the Southern District of Florida asserting patent infringement
by us of additional patents not included in the first Wi-Lan suit. The lawsuit in the Southern District of
Florida was transferred to the Southern District of California. The second lawsuit in the Eastern District
of Texas had not yet been scheduled for trial; however certain claims in the patent-in-suit (US Patent
No. 6,381,211) were recently found to be invalid, as well as not infringed, by a jury in a similar case in
this district involving Wi-Lan as plaintiff and Ericsson Inc., Alcatel-Lucent USA Inc., HTC Corporation and
Sony Mobile Communications as defendants. In October 2013, a mutually agreeable confidential
settlement was entered into by the parties to resolve all pending lawsuits, which will not have a
material adverse effect on our operating results.
In May 2010 and in February 2011, a patent holding company, Golden Bridge Technology Inc. (GBT),
filed patent infringement lawsuits in the United States District Court for the District of Delaware
asserting patent infringement of the same two patents by a number of parties, including us and certain
of our customers. In both cases, the litigation makes certain allegations concerning the wireless
modems sold by us and our competitors. Both lawsuits have been stayed against all defendants except
Apple Inc. ("Apple"), pending the outcome of the first case against Apple in Delaware. In April 2013,
the Court of Delaware issued its claim construction order, as well as an order granting Apple's motion
for summary judgment on non-infringement and denying Apple's motion for summary judgment on
invalidity. These orders have been appealed by GBT to the US Court of Appeals for the Federal Circuit.
In May 2012, GBT filed a patent infringement lawsuit in the United States District Court for the Central
District of California asserting patent infringement by us of a different patent from the other two
lawsuits, but concerning essentially the same products. In September 2012, this lawsuit was dismissed
in the Central District of California and re-filed in the District of Delaware. This lawsuit has been stayed
against us pending the outcome of the case against Apple with respect to the same patent, which is set
for trial in the Central District of California in May 2014. A claim construction order was issued in this
case in June 2013.
In July 2009, a patent holding company, SPH America, LLC, filed a patent infringement lawsuit in the
United States District Court for the Eastern District of Virginia asserting patent infringement by a
number of device manufacturers, including us, and computer manufacturers, including certain of our
customers. In January 2013, a mutually agreeable confidential settlement was entered into by the
parties which will not have a material adverse effect on our operating results. The lawsuit was
subsequently dismissed with prejudice.
Although there can be no assurance that an unfavorable outcome would not have a material adverse
effect on our operating results, liquidity or financial position, we believe the claims made in the
foregoing legal proceedings are without merit and intend to defend ourselves and our products
vigorously in all cases.
87

IP Indemnification Claims
We have been notified by one or more of our customers in each of the following matters that we have
an obligation to indemnify them in respect of the products we supply to them:
In May 2013, a patent holding company, Adaptix, Inc., filed a patent infringement lawsuit in the United
States District Court for the Eastern District of Texas against one of our customers asserting patent
infringement in relation to our customers products, which may include certain LTE products which
utilize modules sold to them by us. The lawsuit is in the early stages.
In January 2013, a patent holding company, Steelhead Licensing LLC, filed a patent infringement
lawsuit in the United States District Court for the District of Delaware against one of our customers
asserting patent infringement in relation to our customers products and services, including the mobile
hotspot devices sold to them by us prior to the transfer of the AirCard business to Netgear. In March
2013, we advised our customer that we had been granted a license with respect to the patents-in-suit,
which license covers any of our products sold by our customers (including this customer). We believe
this outcome will not have a material adverse effect on our operating results.
In February 2012, a patent holding company, Intellectual Ventures (comprised of Intellectual Ventures I
LLC and Intellectual Ventures II LLC), filed a patent infringement lawsuit in the United States District
Court for the District of Delaware against two of our customers asserting patent infringement in
relation to several of our customers products and services, including the mobile hotspots sold to them
by us prior to the transfer of the AirCard business to Netgear. The lawsuit was split into several
separate lawsuits and amended complaints were filed in October 2013. The lawsuits are in the early
stages, and we are negotiating a stipulation of intervention in two cases with the plaintiff.
In September 2011, a patent holding company, Mayfair Wireless, LLC, filed a patent infringement
lawsuit in the United States District Court for the District of Delaware against two of our customers
asserting patent infringement in relation to the wireless hotspots sold to them by us prior to the
transfer of the AirCard business to Netgear. In October 2013, the plaintiff objected to the Magistrates
report and recommendation that the Court grant the defense motion to dismiss for lack of subject
matter jurisdiction; therefore, the matter is currently being reviewed by the District Court Judge.
In June 2011, Barnes and Noble, Inc. filed a declaratory judgment action in the United States District
Court for the Northern District of California against LSI Corporation (and later added Agere
Systems, Inc.) (collectively, LSI), seeking a declaration that certain patents were not infringed by their
products, including the 3G Nook e-reader which incorporates wireless modules sold to them by us. LSI
counterclaimed for patent infringement. There are currently 9 patents-in-suit, two of which relate to
the 3G products which incorporate our modules. The lawsuit is currently in the discovery phase and
the claim construction hearing is anticipated to occur in March 2014.
A patent holding company, Eon Corp. IP Holdings, LLC ("Eon"), filed a patent infringement lawsuit
against one of our customers in October 2010 in the United States District Court for the Eastern District
of Texas, which was subsequently transferred to the United States District Court for the Northern
District of California. A claim construction order was issued in July 2013, and this case is scheduled for
trial in October 2014. Eon filed a patent litigation lawsuit against another of our customers in
January 2012 in the United States District Court for the District of Puerto Rico, which has been
transferred in part to the District of Delaware with respect to claims related to one of the three
88

patents-in-suit. A claim construction hearing was held in the Puerto Rico case in November 2013 and
in the Delaware case in January 2014. In all the above Eon cases, assertions of patent infringement are
being made in relation to the wireless modems sold to our customers by us prior to the transfer of the
AIRCard business to Netgear.
Although there can be no assurance that an unfavorable outcome would not have a material adverse
effect on our operating results, liquidity or financial position, we believe the claims made in the
foregoing legal proceedings are without merit and intend to defend ourselves and our products
vigorously in all cases.
We are engaged in certain other claims, legal actions and arbitration matters, all in the ordinary course
of business, and believe that the ultimate outcome of these claims, legal actions and arbitration
matters will not have a material adverse effect on our operating results, liquidity or financial position.
29.
The Company sold substantially all of the assets and operations related to its AirCard business on April 1,
2013 (note 7).
During the fourth quarter of 2013, we acquired substantially all of the M2M embedded module and
modem business of AnyDATA Corporation and recently announced that we have entered into an
agreement to acquire In Motion Technology. We have reevaluated our segmentation and determined that
we have two reportable segments.
OEM Solutions
The segmented information for the years ending December 31, 2012 and December 31, 2011 have been
reclassified to conform to the segments presented in 2013.
As we do not evaluate the performance of our operating segment based on segment assets, management
does not classify asset information on a segmented basis. Despite the absence of discrete financial
information we do measure our revenue based on other forms of categorization such as by the geographic
distribution in which our products are sold.
89

REVENUE BY SEGMENT
Year ended December 31, 2013
Revenue
Cost of goods sold
Gross margin
Gross margin %
Expenses

Total assets
OEM
Solutions
382,016
266,867
115,149
30.1%
Enterprise
Solutions
59,844
29,352
30,492
51.0%
$
$
$
$
Revenue
Cost of goods sold
Gross margin
Gross margin %
Expenses
$
$

Total assets
Revenue
Cost of goods sold
Gross margin
Gross margin %
Expenses
$
$

Total assets
90
Total
441,860
296,219
145,641
33.0%
163,305
(17,664)
512,000

OEM
Enterprise
Total
Solutions
Solutions
346,543 $
50,778 $
397,321
246,284
25,763
272,047
100,259 $
25,015 $
125,274
28.9%
49.3%
31.5%
$
147,480
(22,206)
464,763

OEM
Enterprise
Total
Solutions
Solutions
290,463 $
42,712 $
333,175
210,138
21,297
231,435
80,325 $
21,415 $
101,740
27.7%
50.1%
30.5%
$
155,993
(54,253)
422,887

REVENUE BY GEOGRAPHICAL REGION
Americas
Asia-Pacific
2013
135,560
91,839
214,461
441,860
2012
101,240
79,904
216,177
397,321
2011
83,890
90,724
158,561
333,175
PROPERTY AND EQUIPMENT BY GEOGRAPHICAL REGION
Americas
Asia-Pacific
30.
2013
9,584
8,686
3,712
21,982
2012
8,169
8,580
3,290
20,039
SUBSEQUENT EVENT
On January 26, 2014 we entered into a definitive agreement to acquire all the shares of In Motion
Technology ("In Motion") for $21 million. The acquisition is expected to close in early March 2014 and is
subject to certain post-closing adjustments. In Motion is a leader in mobile enterprise networks that
provide customers with fleets in mission critical environments with a secure, managed end-to-end
communications system. In Motion's solutions are used by public safety, transit and utility fleets across
the US and Canada. This acquisition further strengthens our leadership position in M2M and will broaden
our Enterprise Solutions segment product portfolio.
91
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Executive Officers
Directors
Jason W. Cohenour
Gregory D. Aasen (3)

Corporate Director
David G. McLennan
Chief Financial Officer and Secretary
Robin A. Abrams (1)

Corporate Director
Philippe Guillemette
Chief Technology Officer
Paul G. Cataford (1), (2)

Corporate Director
Bill G. Dodson
Senior Vice President, Operations
Charles E. Levine (1), (2), (3)

Chairman of the Board
A. Daniel Schieler
Senior Vice President and General Manager, OEM Solutions
Thomas Sieber (1)

Corporate Director
Emmanuel Walckenaer
Senior Vice President and General Manager, Enterprise Solutions
Kent Thexton (3)

Corporate Director
Pierre Teyssier
Senior Vice President, Engineering
Jason W. Cohenour
Jason L. Krause
Senior Vice President, Corporate Development and Marketing
(1)
Audit Committee
Governance and Nominating Committee
(3)
Human Resources Committee
(2)
General Counsel
Blake, Cassels & Graydon LLP
Vancouver, BC
Transfer Agent
Computershare Investor Services Inc.
Vancouver, BC
US Counsel
Share Information
The common shares of Sierra Wireless,
Inc. are listed for trading under the
symbol SW on The Toronto Stock
Exchange and under SWIR on The
Nasdaq Global Market.
Skadden, Arps, Slate, Meagher

& Flom LLP
Toronto, Ontario
Intellectual Property Lawyers
Nixon Peabody LLP
Palo Alto, California
Auditors
KPMG LLP
Vancouver, BC
Annual General Meeting

The Annual General Meeting for the
shareholders of Sierra Wireless, Inc. will
be held on May 22, 2014 at 3:00 p.m.
(Pacific) at the Company's head office in
Richmond, British Columbia.
Head Office
13811 Wireless Way
Richmond
British Columbia
Canada V6V 3A4
Telephone :: 604 231 1100
Facsimile :: 604 231 1109
Website :: www.sierrawireless.com

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Annual Report | 2013

United States GAAP

Sierra Wireless is the global leader in

Sierra Wireless, Inc.

(Expressed in thousands of United States dollars, except as otherwise stated)

Consolidated Statement of Operations Data

Revenue by geographical region

Consolidated Balance Sheet Data

CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS

Annual Overview - Financial Highlights

Disposition of AirCard Business

CONSOLIDATED ANNUAL RESULTS OF OPERATIONS

FOURTH QUARTER OVERVIEW

CONSOLIDATED FOURTH QUARTER RESULTS OF OPERATIONS

SUMMARY OF QUARTERLY RESULTS OF OPERATIONS

LIQUIDITY AND CAPITAL RESOURCES

NON-GAAP FINANCIAL MEASURES

OFF-BALANCE SHEET ARRANGEMENTS

TRANSACTIONS BETWEEN RELATED PARTIES

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

OUTSTANDING SHARE DATA

IMPACT OF ACCOUNTING PRONOUNCEMENTS AFFECTING FUTURE PERIODS

INTERNAL CONTROL OVER FINANCIAL REPORTING

RISKS AND UNCERTAINTIES

CONSOLIDATED FINANCIAL STATEMENTS

MANAGEMENTS DISCUSSION AND ANALYSIS OF

Cautionary Note Regarding Forward-looking Statements

Leverage our M2M leadership position to drive profitable organic growth;

Annual Overview Financial highlights

Selected Annual Financial information:

Earnings (loss) from operations

Net earnings (loss) from continuing operations

Net earnings from discontinued operations

Net earnings (loss) attributable to the Company

Share and per share data:

Basic and diluted earnings (loss) per share (in dollars)

Common shares (in thousands)

Balance sheet data:

Disposition of AirCard Business

CONSOLIDATED ANNUAL RESULTS OF OPERATIONS

RevenuebyGeographicRegion 2013 (%)

RevenuebyGeographicRegion 2012 (%)

FOURTH QUARTER OVERVIEW

CONSOLIDATED FOURTH QUARTER RESULTS OF OPERATIONS

Three months ended December 31,

Loss from operations

SUMMARY OF QUARTERLY RESULTS OF OPERATIONS

Cost of goods sold

Sales and marketing

Research and development

Earnings (loss) from continuing

Income tax expense (recovery)

Net earnings (loss) from

Net earnings (loss) from

Net earnings (loss) attributable

Earnings (loss) per share GAAP in dollars