Citrix 2009 Annual Report Download - page 27

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costs and royalties could increase our cost of revenues and operating expenses. However, we cannot currently
quantify the costs for transactions that have not yet occurred. In addition, we may need to use a significant
portion of our cash and investments to fund acquisition costs.
Our investment portfolio has been subject to impairment charges due to the recent financial crisis in the
capital markets and may be adversely impacted by further deterioration of the capital markets.
Our investment portfolio as of December 31, 2009 primarily consisted of agency securities, corporate
securities, money market funds, municipal (including auction rate) securities, government securities and
commercial paper. As a result of recent adverse financial market conditions, investments in some financial
instruments may pose risks arising from liquidity and credit concerns. Although we follow an established
investment policy and seek to minimize the credit risk associated with investments by investing primarily in
investment grade, highly liquid securities and by limiting exposure to any one issuer depending on credit quality,
we cannot give assurances that the assets in our investment portfolio will not lose value, become impaired, or
suffer from illiquidity.
During 2008, we recorded an unrealized loss related to our $50.0 million face value investment issued by
AIG Matched Funding Corporation, or the AIG Capped Floater, which matures in September 2011. This
unrealized loss was caused by the liquidity challenges of American International Group, Inc., or AIG, which
triggered a downgrade in the credit ratings for AIG’s long-term issues by rating agencies in 2008. If AIG’s
financial situation further deteriorates, we may be required to further adjust the carrying value of the AIG Capped
Floater and record an impairment charge for an other-than-temporary decline in the fair market value of this
investment.
We may be required to record additional impairment charges for other-than-temporary declines in fair
market value in our available-for-sale investments, including our investment in the AIG Capped Floater. Future
market conditions could lead to additional impairment charges, which could adversely affect our results of
operations. Moreover, fluctuations in economic and market conditions could adversely affect the market value of
our investments, and we could lose some of the principal value of our investment portfolio. A total loss of an
investment, dependent on an individual security’s par value, or a significant decline in the value of our
investment portfolio could adversely affect our financial condition.
If we lose key personnel or cannot hire enough qualified employees in certain areas of our business, our
ability to manage our business could be adversely affected.
Our success depends, in large part, upon the services of a number of key employees in certain areas of our
business. Except for certain key employees of acquired businesses, we do not have long-term employment
agreements with any of our key personnel. Any officer or employee can terminate his or her relationship with us
at any time. The effective management of our growth, if any, could depend upon our ability to retain our highly-
skilled technical, sales and services managerial, finance and marketing personnel in certain areas of our business.
If any of those employees leave, we will need to attract and retain replacements for them. We also may need to
add key personnel in the future, including in certain key areas of our business. The market for these qualified
employees is competitive. We could find it difficult to successfully attract, assimilate or retain sufficiently
qualified personnel in sufficient numbers. Furthermore, we may hire key personnel in connection with our future
acquisitions; however, any of these employees will be able to terminate his or her relationship with us at any
time. If we cannot retain and add the necessary staff and resources for these acquired businesses, our ability to
develop acquired products, markets and customers could be adversely affected. Also, we may need to hire
additional personnel to develop new products, product enhancements and technologies. If we cannot add the
necessary staff and resources, our ability to develop future enhancements and features to our existing or future
products could be delayed. Any delays could have a material adverse effect on our business, results of operations
and financial condition.
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