Citrix 2012 Annual Report Download - page 29

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develop and enhance these technologies with our own resources. Additionally, the CloudStack IaaS software platform is still an
emerging technology, making it difficult for us to predict the level of its adoption in the market. In any event, our development
expenses could be increased and our product release and upgrade schedules could be delayed. Delays in developing,
completing or shipping new or enhanced products could result in delayed or reduced revenue for those products and could also
adversely affect customer acceptance of those offerings.
Our business depends on maintaining and protecting our strong collection of brands.
The Citrix product and service brands that we have developed has significantly contributed to the success of our business.
Maintaining and enhancing the Citrix product and service brands is critical to expanding our base of customers and partners.
We may be subject to reputational risks if others adopt similar marks in an effort to misappropriate and profit on our brand
name and do not provide the same level of quality as is delivered by our products and services. In order to maintain, enhance
and protect our brands, we may be required to make substantial investments that may not be successful. If we fail to maintain,
enhance and protect the Citrix brands, if we incur excessive expenses in this effort or if customers or potential customers are
confused by others' trademarks, our business, operating results, and financial condition may be materially and adversely
affected.
If we lose access to third-party licenses, releases of our products could be delayed.
We believe that we will continue to rely, in part, on third-party licenses to enhance and differentiate our products. Third-
party licensing arrangements are subject to a number of risks and uncertainties, including:
• undetected errors or unauthorized use of another person's code in the third party's software;
• disagreement over the scope of the license and other key terms, such as royalties payable;
• infringement actions brought by third-party licensees;
• that third parties will create solutions that directly compete with our products; and
• termination or expiration of the license.
If we lose or are unable to maintain any of these third-party licenses or are required to modify software obtained under
third-party licenses, it could delay the release of our products. Any delays could have a material adverse effect on our business,
results of operations and financial condition.
RISKS RELATED TO OUR COMMON STOCK AND EXTERNAL FACTORS
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, floods
or earthquakes, or other unanticipated catastrophes, such as telecommunications failures, cyber-attacks, fires or terrorist attacks,
at any of the locations in which we or our key partners, suppliers and customers 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', suppliers' 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', suppliers' or customers' businesses,
due to natural disasters or other unanticipated catastrophes could have a material adverse effect on our results of operations.
Our investment portfolio has been subject to impairment charges due to adverse capital market conditions, financing
challenges encountered by private companies we have invested in and may be further adversely impacted by volatility in the
capital markets.
Our investment portfolio as of December 31, 2012 primarily consisted of agency securities, corporate securities,
government securities, commercial paper and municipal securities. As a result of adverse financial market conditions in recent
years, investments in some financial instruments posed risks arising from liquidity and credit concerns. Future adverse market
conditions and volatility could create similar risks for investments in financial instruments. Although we follow an established
investment policy and seek to minimize the credit risk associated with investments by investing primarily in investment grade,