Citrix 2012 Annual Report Download - page 53

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Liquidity and Capital Resources
During 2012, we generated operating cash flows of $818.5 million. These operating cash flows related primarily to net
income of $352.5 million, adjusted for, among other things, non-cash charges, including depreciation and amortization
expenses of $214.9 million and stock-based compensation expense of $149.9 million. Also contributing to these cash inflows
was an aggregate increase in operating assets and liabilities of $180.5 million, net of effects of acquisitions. Our investing
activities used $357.9 million of cash consisting primarily of cash paid for acquisitions of $487.2 million, the purchase of
property and equipment of $123.0 million and $34.4 million in cash paid for licensing agreements and product related
intangible assets and other investments. These investing cash outflows were partially offset by net sales of investments of
$258.9 million. Our financing activities used cash of $149.8 million primarily due to stock repurchases of $251.0 million. This
financing cash outflow was partially offset by proceeds received from the issuance of common stock under our employee stock-
based compensation plans of $108.4 million.
During 2011, we generated operating cash flows of $679.1 million. These operating cash flows related primarily to net
income of $355.6 million, adjusted for, among other things, non-cash charges including depreciation and amortization expenses
of $159.3 million and stock-based compensation expense of $92.9 million. Also contributing to these cash inflows was an
aggregate increase in operating assets and liabilities of $73.9 million, net of the effects of acquisitions. Our investing activities
used $451.2 million of cash consisting primarily of cash paid for acquisitions of $455.4 million, the purchase of property and
equipment of $111.9 million and $32.3 million in cash paid for licensing agreements and product related intangible assets and
other investments. These investing cash outflows were partially offset by net sales of investments of $148.4 million. Our
financing activities used cash of $292.6 million primarily due to stock repurchases of $424.8 million. This financing cash
outflow was partially offset by proceeds received from the issuance of common stock under our employee stock-based
compensation plans of $125.6 million.
Historically, significant portions of our cash inflows were generated by our operations. We currently expect this trend to
continue throughout 2013. We believe that our existing cash and investments together with cash flows expected from
operations will be sufficient to meet expected operating and capital expenditure requirements for the next 12 months. We
continue to search for suitable acquisition candidates and could acquire or make investments in companies we believe are
related to our strategic objectives. We could from time to time seek to raise additional funds through the issuance of debt or
equity securities for larger acquisitions.
Cash, Cash Equivalents and Investments
December 31, 2012
Compared to
2011
2012 2011
(In thousands)
Cash, cash equivalents and investments $ 1,523,944 $ 1,477,601 $ 46,343
The increase in cash, cash equivalents and investments at December 31, 2012 as compared to December 31, 2011, is
primarily due to cash provided by our operating activities of $818.5 million and cash received from the issuance of common
stock under our employee stock-based compensation plans of $108.4 million, partially offset by cash paid for acquisitions, net
of cash acquired, of $487.2 million, expenditures made on stock repurchases of $251.0 million, purchases of property and
equipment of $123.0 million and purchases of cost method investments and product-related intangible assets of $34.4 million.
As of December 31, 2012, $779.8 million of the $1,523.9 million of cash, cash equivalents and investments was held by our
foreign subsidiaries. If these funds are needed for our operations in the United States, we would be required to accrue and pay
U.S. taxes to repatriate these funds. Our current plans are not expected to require repatriation of cash and investments to fund
our U.S. operations and, as a result, we intend to permanently reinvest our foreign earnings. See “– Liquidity and Capital
Resources.” We generally invest our cash and cash equivalents in investment grade, highly liquid securities to allow for
flexibility in the event of immediate cash needs. Our short-term and long-term investments primarily consist of interest-bearing
securities.
Fair Value Measurements
The authoritative guidance defines fair value as an exit price, representing the amount that would either be received to
sell an asset or be paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a
market-based measurement that should be determined based on assumptions that market participants would use in pricing an
asset or liability. As a basis for considering such assumptions, the guidance establishes a three-tier fair value hierarchy, which
prioritizes the inputs used in measuring fair value as follows:
• Level 1. Observable inputs such as quoted prices in active markets for identical assets or liabilities;