Citrix 2009 Annual Report Download - page 64

included in Level 3 is the Put Option. In order to determine the fair value of the Put Option, we measured the
differential between the aggregate par value of our auction rate securities and their fair value as of the reporting
date and applied a discount rate that considers both the time period between the reporting date and the first date
we will be able to exercise our right to put the auction rate securities to UBS per the terms of the Settlement and
the credit worthiness of UBS.
During 2008, we measured our AIG Capped Floater using indicative pricing for another AIG security with
similar terms, or the Referenced Security, which had regular trading activity, a Level 2 observation. During 2009,
trading activity in the Referenced Security significantly decreased and other floating rate AIG debt securities
with regular trading activity were too close to their maturities to be used to establish a fair value for the AIG
Capped Floater. Therefore, in order to measure the AIG Capped Floater at fair value we used a discounted cash
flow model. We then discounted those cash flows at a rate reflecting the market risk inherent in holding an AIG
security with a similar maturity as evidenced by pricing in the markets. Since utilizing a discounted cash flow
model required us to make assumptions that were not directly or indirectly observable regarding the AIG Capped
Floater’s fair value during 2009, it was transferred to Level 3 and is included in the table below as a transfer to
Level 3.
Assets Measured at Fair Value on a Recurring Basis Using Significant Unobservable Inputs (Level 3)
Put Option
Long-term
Investments Total
(In thousands)
Balance at December 31, 2008 ...................................... $7,378 $37,919 $45,297
Transfers to Level 3 .............................................. — 45,096 45,096
Proceeds received on Level 3 securities ............................... — (700) (700)
Total realized gains (losses) included in earnings ....................... (1,330) 1,470 140
Balance at December 31, 2009 ...................................... $6,048 $83,785 $89,833
Realized gains (losses) included in earnings for the period are reported in other (expense) income, net.
Accounts Receivable, Net
December 31, 2009
Compared to
20082009 2008
(In thousands)
Accounts receivable ............................................ $309,748 $239,998 $69,750
Allowance for returns ........................................... (1,617) (1,641) 24
Allowance for doubtful accounts .................................. (3,219) (7,061) 3,842
Accounts receivable, net ......................................... $304,912 $231,296 $73,616
The increase in accounts receivable at December 31, 2009 compared to December 31, 2008 was primarily
due to an increase in sales, particularly in the last month of 2009 compared to the last month of 2008. Our
allowance for returns remained relatively constant during 2009 as compared to 2008. The activity in our
allowance for returns was comprised of $3.3 million in credits issued for stock balancing rights during 2009
offset by $3.3 million of provisions for returns recorded during 2009. Our allowance for doubtful accounts
decreased by $3.8 million when comparing 2009 to 2008. The activity in our allowance for doubtful accounts
was primarily comprised of $5.5 million of uncollectible accounts written off, net of recoveries, partially offset
by additional provisions for doubtful accounts of $1.7 million recorded during the year. From time to time, we
could maintain individually significant accounts receivable balances from our distributors or customers, which
are comprised of large business enterprises, governments and small and medium-sized businesses. If the financial
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