Citrix 2009 Annual Report Download - page 113

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CITRIX SYSTEMS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
the authoritative guidance, the Company must continue to monitor the conditions that are subject to the
guarantees and indemnifications, as required under existing generally accepted accounting principles, to identify
if a loss has been incurred. If the Company determines that it is probable that a loss has been incurred, any such
estimable loss would be recognized. The initial recognition and measurement requirements do not apply to the
provisions contained in the majority of the Company’s software license agreements that indemnify licensees of
the Company’s software from damages and costs resulting from claims alleging that the Company’s software
infringes the intellectual property rights of a third party. The Company has not made payments pursuant to these
provisions. The Company has not identified any losses that are probable under these provisions and, accordingly,
the Company has not recorded a liability related to these indemnification provisions.
Purchase Obligations
The Company has agreements with suppliers to purchase inventory and estimates its non-cancelable
obligations under these agreements for the fiscal year ended December 31, 2010 to be approximately $5.8
million.
Liabilities Related to Payroll Taxes
In 2008, the Company recorded a reduction to operating expenses of approximately $6.4 million related to
an adjustment of payroll taxes initially recorded in conjunction with the Audit Committee’s voluntary,
independent investigation of the Company’s historical stock option granting practices which was concluded in
2007. These payroll tax liabilities were reduced upon agreement with the Internal Revenue Service.
11. INCOME TAXES
The United States and foreign components of income before income taxes are as follows:
2009 2008 2007
(In thousands)
United States ............................................ $ 16,434 $ (13,997) $ 46,475
Foreign ................................................. 177,458 210,920 204,433
Total ............................................... $193,892 $196,923 $250,908
The components of the provision for income taxes are as follows:
2009 2008 2007
(In thousands)
Current:
Federal ............................................. $ 25,065 $ 6,315 $ 7,692
Foreign ............................................. 21,747 19,175 28,512
State ............................................... 6,913 — 855
Total current ..................................... 53,725 25,490 37,059
Deferred ................................................ (50,850) (6,843) (634)
Total provision ................................... $ 2,875 $ 18,647 $ 36,425
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