Citrix 2012 Annual Report Download - page 97

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CITRIX SYSTEMS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
F-31
Operating
Leases
Sublease
Income
(In thousands)
Years ending December 31,
2013 $ 66,554 $ 193
2014 58,549 —
2015 47,065 —
2016 37,859 —
2017 19,063 —
Thereafter 32,305 —
Total $ 261,395 $ 193
The Company has an operating lease obligation through 2017 related to one property that is not utilized. At December 31,
2012, the total remaining obligation on this lease was approximately $1.4 million, all of which was accrued as of December 31,
2012, and is reflected in accrued expenses and other current liabilities and other liabilities in the accompanying consolidated
balance sheets.
Legal Matters
Due to the nature of the Company’s business, it is subject to patent infringement claims, including current suits against it
or one or more of its wholly-owned subsidiaries alleging infringement by various Company products and services. The
Company believes that it has meritorious defenses to the allegations made in its pending cases and intends to vigorously defend
these lawsuits; however, it is unable currently to determine the ultimate outcome of these or similar matters or the potential
exposure to loss, if any.
In addition, the Company is a defendant in various litigation matters generally arising out of the normal course of
business. Although it is difficult to predict the ultimate outcomes of these cases, the Company believes that the ultimate
outcomes will not materially affect its business, financial position, results of operations or cash flows.
The Company accrues a liability for legal contingencies when it believes that it is both probable that a liability has been
incurred and that it can reasonably estimate the amount of the loss. The Company reviews these accruals and adjusts them to
reflect ongoing negotiations, settlements, rulings, advice of legal counsel and other relevant information. To the extent new
information is obtained and the Company's views on the probable outcomes of claims, suits, assessments, investigations or legal
proceedings change, changes in the Company's accrued liabilities would be recorded in the period in which such determination
is made. For the Other Matters referenced below, the amount of liability is not probable or the amount cannot be reasonably
estimated; and, therefore, accruals have not been made. In addition, in accordance with the relevant authoritative guidance, for
matters in which the likelihood of material loss is at least reasonably possible, the Company provides disclosure of the possible
loss or range of loss. If a reasonable estimate cannot be made, however, the Company will provide disclosure to that effect.
On April 11, 2008, SSL Services, LLC (“SSL Services”) filed a suit for patent infringement against the Company in the
United States District Court for the Eastern District of Texas (the “SSL Matter”). SSL Services alleged that the Company
infringed U.S. Patent Nos. 6,061,796 (the “'796 patent”) and 6,158,011 (the “'011 patent”). The Company denied infringement
and asserted that the patents-in-suit were invalid. A jury trial was held on SSL Services' claims, and on June 18, 2012, the jury
found that the Company does not infringe the '796 patent and found that the Company willfully infringes the '011 patent
through the sale and use of certain products. The jury awarded SSL Services $10.0 million. On September 17, 2012, the court
issued a final judgment confirming the jury award of $10.0 million in damages and added $5.0 million in enhanced damages
and approximately $5.0 million in prejudgment interest on the damages award. The Company does not believe that any of its
products infringe the '011 patent, and the Company believes that the '011 patent is invalid. Accordingly, no accrual has been
made related to this matter. The Company intends to vigorously appeal the district court's judgment on the '011 patent.
In addition to the SSL Matter and due to the nature of the Company's business, the Company is subject to patent
infringement claims, including current suits against it or one or more of its wholly-owned subsidiaries alleging infringement by
various Company products and services (the "Other Matters"). The Company believes that it has meritorious defenses to the
allegations made in its pending cases and intends to vigorously defend these lawsuits; however, it is unable currently to
determine the ultimate outcome of these or similar matters. In addition, the Company is a defendant in various litigation matters
generally arising out of the normal course of business. Although it is difficult to predict the ultimate outcomes of these cases,
the Company believes that it is not reasonably possible that the ultimate outcomes will materially and adversely affect its
business, financial position, results of operations or cash flows.