Citrix 2009 Annual Report Download - page 101

CITRIX SYSTEMS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
may be required to make additional adjustments to the carrying value of the securities in its investment portfolio
and recognize additional impairment charges for declines in fair value that are determined to be other-than-
temporary.
Unrealized Losses on Available-for-sale Investments
The following table shows the gross unrealized losses and fair value of the Company’s available-for-sale
investments with unrealized losses that are not deemed to be other-than-temporarily impaired, aggregated by
investment category and length of time that the individual securities have been in a continuous unrealized loss
position as of December 31, 2009 (in thousands):
Less than 12 Months 12 Months or Greater Total
(In thousands)
Description of the Securities Fair Value
Unrealized
Losses Fair Value
Unrealized
Losses Fair Value
Unrealized
Losses
Corporate bonds ............... $ 77,320 $160 $47,905 $5,099 $125,225 $5,259
Agency securities .............. 159,878 614 9,548 97 169,426 711
Total ........................ $237,198 $774 $57,453 $5,196 $294,651 $5,970
The Company’s unrealized loss in corporate bonds is primarily comprised of an investment issued by AIG
Matched Funding Corporation (the “AIG Capped Floater”) with a face value of $50.0 million, which matures in
September 2011. American International Group, Inc. (“AIG”), as the issuer’s parent, provided a guarantee of the
security at the time of purchase in September 2006. As of December 31, 2009, the unrealized loss of $4.9
million, which is included in accumulated other comprehensive loss, was primarily caused by AIG experiencing
liquidity challenges which were reportedly precipitated by problems in the capital markets. AIG’s lack of
liquidity triggered a downgrade in the credit ratings for its long-term issues by two rating agencies in 2008. As a
result of AIG’s liquidity challenges, in November 2008, the Federal Reserve Bank of New York (“FRBNY”)
intervened with a five-year credit facility to help stabilize AIG and its effect on the overall market. In addition,
on March 2, 2009, AIG announced that further actions were taken in cooperation with the U.S. Department of
Treasury and the FRBNY to provide AIG with additional financial stability. As of the date of this report, AIG has
not been reported to have defaulted on capital repayments to holders of its recently matured debt and it continues
to pay interest on the Company’s AIG Capped Floater. Because the Company does not intend to sell the AIG
Capped Floater and it is more likely than not that it will not be required to sell the security before the recovery of
its amortized cost basis, which may not occur until maturity, it does not consider the security to be other-than-
temporarily impaired.
If AIG’s financial position deteriorates, the Company may be required to further adjust the carrying value of
the AIG Capped Floater and potentially recognize an impairment charge for an other-than-temporary decline in
the fair value of the investment. Based on the Company’s available cash and other investments, it does not
currently anticipate that the lack of liquidity caused by holding the AIG Capped Floater to recovery will have a
material adverse effect on its financial position.
Trading Investments
As of December 31, 2009, the Company held municipal auction rate securities, the majority of which are
triple-A rated, with an aggregate par value of approximately $44.8 million, whose underlying assets are generally
student loans that are substantially backed by the federal government under the Federal Family Education Loan
Program through investment accounts managed by UBS Financial Services, Inc. (“UBS”). The market for
municipal auction rate securities in the Company’s portfolio began experiencing auction failures in 2008 and
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