Citrix 2009 Annual Report Download - page 38

and international authorities may also seek to regulate the products and services we provide or will provide. The
FCC and state regulatory authorities may address regulatory non-compliance with a variety of enforcement
mechanisms, including fines, refund orders, injunctive relief, license conditions, and/or license revocation. The
regulation of the telecommunications industry is changing rapidly, and the regulatory environment varies
substantially from jurisdiction to jurisdiction. There can be no assurance that future regulatory, judicial or
legislative activities will not have a material adverse effect on the business, and results of operations of our
Online Services division.
Natural disasters or other unanticipated catastrophes that result in a disruption of our operations could
negatively impact our results of operations.
Our worldwide operations are dependent on our network infrastructure, internal technology systems and
Website. Significant portions of our computer equipment, intellectual property resources and personnel,
including critical resources dedicated to research and development and administrative support functions are
presently located at our corporate headquarters in Fort Lauderdale, Florida, an area of the country that is
particularly prone to hurricanes, and at our various locations in California, an area of the country that is
particularly prone to earthquakes. We also have operations in various domestic and international locations that
expose us to additional diverse risks. The occurrence of natural disasters, such as hurricanes or earthquakes, or
other unanticipated catastrophes, such as telecommunications failures, cyber-attacks, fires or terrorist attacks, at
any of the locations in which we do business, could cause interruptions in our operations. For example,
hurricanes have passed through southern Florida causing extensive damage to the region. In addition, even in the
absence of direct damage to our operations, large disasters, terrorist attacks or other casualty events could have a
significant impact on our partners’ and customers’ businesses, which in turn could result in a negative impact on
our results of operations. Extensive or multiple disruptions in our operations, or our partners’ or customers’
businesses, due to natural disasters or other unanticipated catastrophes could have a material adverse effect on
our results of operations.
If we do not generate sufficient cash flow from operations in the future, we may not be able to fund our
product development and acquisitions and fulfill our future obligations.
Our ability to generate sufficient cash flow from operations to fund our operations and product
development, including the payment of cash consideration in acquisitions and the payment of our other
obligations, depends on a range of economic, competitive and business factors, many of which are outside our
control. We cannot assure you that our business will generate sufficient cash flow from operations, or that we
will be able to liquidate our investments, repatriate cash and investments held in our overseas subsidiaries, sell
assets or raise equity or debt financings when needed or desirable. An inability to fund our operations or fulfill
outstanding obligations could have a material adverse effect on our business, financial condition and results of
operations. For further information, please refer to “Management’s Discussion and Analysis of Financial
Condition and Results of Operations—Liquidity and Capital Resources.”
If returns or price adjustments exceed our reserves, our operating results could be adversely affected.
We provide most of our distributors with return rights, which generally permit our distributors to return
products to us by the 45th day of a fiscal quarter, subject to ordering an equal dollar amount of our products prior
to the last day of the same fiscal quarter. We also provide price protection rights to most of our distributors. Price
protection rights require that we grant retroactive price adjustments for inventories of our products held by
distributors if we lower our prices for those products within a specified time period. To cover our exposure to
these product returns and price adjustments, we establish reserves based on our evaluation of historical product
trends and current marketing plans. However, we cannot assure you that our reserves will be sufficient to cover
our future product returns and price adjustments. If we inadequately forecast reserves, our operating results could
be adversely affected.
30