Citrix 2013 Annual Report Download - page 27

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• our ongoing business may be disrupted and our management's attention may be diverted by acquisition, transition
or integration activities;
• the need to implement controls, procedures and policies appropriate for a larger public company at companies that
prior to acquisition had lacked such controls, procedures and policies;
• difficulties managing or integrating an acquired company's technologies or lines of business;
• potential difficulties in completing projects associated with purchased in-process research and development;
• entry into markets in which we have no or limited direct prior experience and where competitors have stronger
market positions and which are highly competitive;
• the potential loss of key employees of the acquired company;
• potential difficulties integrating the acquired products and services into our sales channel;
• assuming pre-existing contractual relationships of an acquired company that we would not have otherwise entered
into, the termination or modification of which may be costly or disruptive to our business;
• being subject to unfavorable revenue recognition or other accounting treatment as a result of an acquired company's
practices; and
• intellectual property claims or disputes.
Our failure to manage growth effectively and successfully integrate acquired companies due to these or other factors
could have a material adverse effect on our business, results of operations and financial condition. Further, our 2014 operating
plan assumes a significant level of financial performance from our acquisitions that were completed during 2012 and 2013 and
if these acquired companies or technologies do not perform as we expect, our operating results could be materially and
adversely affected.
In addition, we may not have the opportunity to make suitable acquisitions on favorable terms in the future, which could
negatively impact the growth of our business. We expect that other companies in our industry will compete with us to acquire
compatible businesses. This competition could increase prices for businesses and technologies that we would likely pursue, and
our competitors may have greater resources than we do to complete these acquisitions.
If we determine that any of our goodwill or intangible assets, including technology purchased in acquisitions, are impaired,
we would be required to take a charge to earnings, which could have a material adverse effect on our results of operations.
We have a significant amount of goodwill and other intangible assets, such as product related intangible assets, from our
acquisitions. We do not amortize goodwill and intangible assets that are deemed to have indefinite lives. However, we do
amortize certain product related technologies, trademarks, patents and other intangibles and we periodically evaluate them for
impairment. We review goodwill for impairment annually, or sooner if events or changes in circumstances indicate that the
carrying amount could exceed fair value, at the reporting unit level, which for us, also represents our operating segments.
Significant judgments are required to estimate the fair value of our goodwill and intangible assets, including estimating future
cash flows, determining appropriate discount rates, estimating the applicable tax rates, foreign exchange rates and interest rates,
projecting the future industry trends and market conditions, and making other assumptions. Although we believe the
assumptions, judgments and estimates we have made have been reasonable and appropriate, different assumptions, judgments
and estimates, materially affect our results of operations. Changes in these estimates and assumptions, including changes in our
reporting structure, could materially affect our determinations of fair value. In addition, due to uncertain market conditions and
potential changes in our strategy and product portfolio, it is possible that the forecasts we use to support our goodwill and other
intangible assets could change in the future, which could result in non-cash charges that would adversely affect our results of
operations and financial condition. If we determine that any of the goodwill or other intangible assets associated with our
acquisitions is impaired, then we would be required to reduce the value of those assets or to write them off completely by
taking a charge to current earnings. If we are required to write down or write off all or a portion of those assets, or if financial
analysts or investors believe we may need to take such action in the future, our stock price and operating results could be
materially and adversely affected.
Our inability to maintain or develop our strategic and technology relationships could adversely affect our business.
We have several strategic and technology relationships with large and complex organizations, such as Microsoft and
Cisco, and other companies with which we work to offer complementary products and services. We depend on the companies
with which we have strategic relationships to successfully test our products, to incorporate our technology into their products
and to market and sell those products. There can be no assurance we will realize the expected benefits from these strategic
relationships or that they will continue in the future. If successful, these relationships may be mutually beneficial and result in
industry growth. However, such relationships carry an element of risk because, in most cases, we must compete in some
business areas with a company with which we have a strategic relationship and, at the same time, cooperate with that company
in other business areas. Also, if these companies fail to perform or if these relationships fail to materialize as expected, we