Citrix 2009 Annual Report Download - page 67

Off-Balance Sheet Arrangements
The Company does not have any special purpose entities or off-balance sheet financing arrangements.
Commitments
Capital expenditures were $76.2 million during 2009, $181.0 million during 2008 and $85.9 million during
2007. During 2009, capital expenditures were primarily related to application and infrastructure delivery to
enable growth and enhance management reporting capabilities and leasehold improvements. During 2008, capital
expenditures were primarily related to application and infrastructure delivery to enable growth and enhance
management reporting capabilities, the purchase of our corporate headquarters buildings and leasehold
improvements.
We have an operating lease obligation related to a property that is not fully utilized that continues to 2018
with a total remaining obligation at December 31, 2009 of approximately $4.9 million, of which $1.0 million was
accrued as of December 31, 2009, and is reflected in accrued expenses and other liabilities in our consolidated
financial statements. In calculating this accrual, we made estimates, based on market information, including the
estimated vacancy periods and sublease rates and opportunities. We periodically re-evaluate our estimates and if
actual circumstances prove to be materially worse than we estimated, the total charges for these vacant facilities
could be significantly higher.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The following discussion about our market risk includes “forward-looking statements” that involve risks
and uncertainties. Actual results could differ materially from those projected in the forward-looking statements.
The analysis methods we used to assess and mitigate risk discussed below should not be considered projections
of future events, gains or losses.
We are exposed to financial market risks, including changes in foreign currency exchange rates and interest
rates that could adversely affect our results of operations or financial condition. To mitigate foreign currency
risk, we utilize derivative financial instruments. The counterparties to our derivative instruments are major
financial institutions. All of the potential changes noted below are based on sensitivity analyses performed on our
financial position as of December 31, 2009. Actual results could differ materially.
Discussions of our accounting policies for derivatives and hedging activities are included in Notes 2 and 14
to our consolidated financial statements included in this Annual Report on Form 10-K for the year ended
December 31, 2009.
Exposure to Exchange Rates
A substantial majority of our overseas expense and capital purchasing activities are transacted in local
currencies, including Euros, British pounds sterling, Japanese yen, Australian dollars, Indian rupees, Swiss
francs, Hong Kong dollars, Singapore dollars, Canadian dollars and Danish krone. To reduce our exposure to a
reduction in U.S. dollar value and the volatility of future cash flows caused by changes in currency exchange
rates, we have established a hedging program. We use foreign currency forward contracts to hedge certain
forecasted foreign currency expenditures. Our hedging program significantly reduces, but does not entirely
eliminate, the impact of currency exchange rate movements.
At December 31, 2009 and 2008, we had in place foreign currency forward sale contracts with a notional
amount of $33.6 million and $124.2 million, respectively, and foreign currency forward purchase contracts with a
notional amount of $224.7 million and $339.6 million, respectively. At December 31, 2009, these contracts had
an aggregate fair asset value of $4.8 million and at December 31, 2008, these contracts had an aggregate fair
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