Citrix 2013 Annual Report Download - page 107

Annual Report 2013 Citrix Systems, Inc.
Pursuant to the requirements of Regulation G, the Company has provided a reconciliation of each non-GAAP nancial
measure used in this 2013 Annual Report to the most directly comparable GAAP nancial measure. These measures
differ from GAAP in that they exclude amortization primarily related to acquired intangible assets, stock-based
compensation expenses and the related tax effect of those items. The Company’s basis for these adjustments is
described below.
Management uses these non-GAAP measures for internal reporting and forecasting purposes, when publicly
providing its business outlook, to evaluate the Company’s performance and to evaluate and compensate the
Company’s executives. The Company has provided these non-GAAP nancial measures in addition to GAAP nancial
results because it believes that these non-GAAP nancial measures provide useful information to certain investors
and nancial analysts for comparison across accounting periods not inuenced by certain non-cash items that are not
used by management when evaluating the Company’s historical and prospective nancial performance. In addition,
the Company has historically provided this or similar information and understands that some investors and nancial
analysts nd this information helpful in analyzing the Company’s operating margins, operating expenses and net
income and comparing the Company’s nancial performance to that of its peer companies and competitors.
Management typically excludes the amounts described above when evaluating the Company’s operating
performance and believes that the resulting non-GAAP measures are useful to investors and nancial analysts in
assessing the Company’s operating performance due to the following factors:
• The Company does not acquire businesses on a predictable cycle. The Company, therefore, believes that
the presentation of non-GAAP measures that adjust for the impact of amortization and certain stock-
based compensation expenses and the related tax effects that are primarily related to acquisitions, provide
investors and nancial analysts with a consistent basis for comparison across accounting periods and,
therefore, are useful to investors and nancial analysts in helping them to better understand the Company’s
operating results and underlying operational trends.
• Amortization costs and the related tax effects are xed at the time of an acquisition, are then amortized
over a period of several years after the acquisition and generally cannot be changed or inuenced by
management after the acquisition.
• Although stock-based compensation is an important aspect of the compensation of the Company’s
employees and executives, stock-based compensation expense is generally xed at the time of grant, then
amortized over a period of several years after the grant of the stock-based instrument, and generally cannot
be changed or inuenced by management after the grant.
These non-GAAP nancial measures are not prepared in accordance with accounting principles generally accepted
in the United States (“GAAP”) and may differ from the non-GAAP information used by other companies. There are
signicant limitations associated with the use of non-GAAP nancial measures. The additional non-GAAP nancial
information presented here should be considered in conjunction with, and not as a substitute for or superior to, the
nancial information presented in accordance with GAAP (such as net income and earnings per share) and should
not be considered measures of the Company’s liquidity. Furthermore, the Company in the future may exclude
amortization primarily related to newly acquired intangible assets, and the related tax effects from nancial measures
that it releases, and the Company expects to continue to incur stock-based compensation expenses.
Note Regarding Forward-Looking Statements
This Annual Report contains forward-looking statements within the meaning of Section 27A of the Securities Act of
1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Our operating results and
nancial condition have varied in the past and could in the future vary signicantly depending on a number of factors.
From time to time, information provided by us or statements made by our employees contain “forward-looking”
information that involves risks and uncertainties. In particular, statements contained in this Annual Report for the
year ended December 31, 2013, and in the documents incorporated by reference into this Annual Report, that are not
historical facts, including, but not limited to, statements concerning our plans, objectives and strategies, the IT spending
environment, Citrix’s growth, new products, product development and offerings of products and services, addressable
market and market positioning, nancial information, product competition, and strategy and growth initiatives,
constitute forward-looking statements and are made under the safe harbor provisions of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.
These statements are neither promises nor guarantees. Our actual results of operations and nancial condition could
vary materially from those stated in any forward-looking statements. The following factors, among others, could cause
actual results to differ materially from those contained in forward-looking statements made in this Annual Report,
in the documents incorporated by reference into this Annual Report or presented elsewhere by our management
from time to time: the impact of the global economy and uncertainty in the IT spending environment; the success
and growth of our product lines, including transitions in the markets for our desktop virtualization and collaboration
products and services; our ability to develop and commercialize new products and services, including enterprise
mobility and cloud platform products, while growing our established virtualization, networking and collaboration
products and services; disruptions due to changes and transitions in key personnel and succession risks, including
but not limited to risks related to the timing and outcome of our CEO search; the introduction of new products by
competitors or the entry of new competitors into the markets for our products and services; changes in our revenue
mix towards products and services with lower gross margins; seasonal uctuations in our business; failure to execute
our sales and marketing plans; failure to successfully partner with key distributors, resellers, system integrators, service
providers and strategic partners and the company’s reliance on and the success of those partners for the marketing
and distribution of our products; our ability to maintain and expand our business in small sized and large enterprise
accounts; the size, timing and recognition of revenue from signicant orders; the success of investments in our product
groups, foreign operations and vertical and geographic markets; our ability to make suitable acquisitions on favorable
terms in the future; risks associated with acquisitions, including failure to further develop and successfully market the
technology and products of acquired companies, failure to achieve or maintain anticipated revenues and operating
performance contributions from acquisitions, which could dilute earnings, the retention of key employees from
acquired companies, difculties and delays integrating personnel, operations, technologies and products, disruption
to our ongoing business and diversion of management’s attention from our ongoing business; the recruitment and
retention of qualied employees; risks in effectively controlling operating expenses, including failure to manage
untargeted expenses; the effect of new accounting pronouncements on revenue and expense recognition; the risks
associated with securing data and maintaining security of our networks and customer data stored by our services;
failure to comply with federal, state and international regulations; litigation and disputes, including challenges to our
intellectual property rights or allegations of infringement of the intellectual property rights of others; the inability
to further innovate our technology or enter into new businesses due to the intellectual property rights of others;
changes in our pricing and licensing models, promotional programs and product mix, all of which may impact revenue
recognition; charges in the event of the impairment of acquired assets, investments or licenses; international market
readiness, execution and other risks associated with the markets for our products and services; unanticipated changes
in tax rates, non-renewal of tax credits or exposure to additional tax liabilities; risks of political and social turmoil, as
well as other risks detailed in our lings with the Securities and Exchange Commission, including our Annual Report
on Form 10-K for the year ended December 31, 2013, or in the documents incorporated by reference into the Annual
Report on Form 10-K for the year ended December 31, 2013. Such factors, among others, could have a material adverse
effect upon our business, results of operations and nancial condition. We caution readers not to place undue reliance
on any forward-looking statements, which only speak as of the date made. We undertake no obligation to update any
forward-looking statement to reect events or circumstances after the date on which such statement is made.
©2014 Citrix Systems, Inc. All rights reserved. Citrix® is a registered trademark of Citrix Systems, Inc. and/or one or
more of its subsidiaries, and may be registered in the U.S. Patent and Trademark Ofce and in other countries. All other
trademarks and registered trademarks are property of their respective owners.