Citrix 2013 Annual Report Download - page 79

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CITRIX SYSTEMS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
F-15
deferred tax assets will not be realized. The Company reviews deferred tax assets periodically for recoverability and makes
estimates and judgments regarding the expected geographic sources of taxable income and gains from investments, as well as
tax planning strategies in assessing the need for a valuation allowance.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States
requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial
statements and accompanying notes. Significant estimates made by management include the provision for doubtful accounts
receivable, the provision to reduce obsolete or excess inventory to market, the provision for estimated returns, as well as sales
allowances, the assumptions used in the valuation of stock-based awards, the assumptions used in the discounted cash flows to
mark certain of its investments to market, the valuation of the Company’s goodwill, net realizable value of product related and
other intangible assets, the provision for vacant facility costs, the provision for income taxes and the amortization and
depreciation periods for intangible and long-lived assets. While the Company believes that such estimates are fair when
considered in conjunction with the consolidated financial position and results of operations taken as a whole, the actual
amounts of such items, when known, will vary from these estimates.
Accounting for Stock-Based Compensation Plans
The Company has various stock-based compensation plans for its employees and outside directors and accounts for
stock-based compensation arrangements in accordance with the authoritative guidance, which requires the Company to
measure and record compensation expense in its consolidated financial statements using a fair value method. See Note 7 for
further information regarding the Company’s stock-based compensation plans.
Net Income Per Share Attributable to Citrix Systems, Inc. Stockholders
Net income per share attributable to Citrix Systems, Inc. stockholders - basic is calculated by dividing income available
to stockholders by the weighted-average number of common shares outstanding during each period. Net income per share
attributable to Citrix Systems, Inc. stockholders - diluted is computed using the weighted-average number of common and
dilutive common share equivalents outstanding during the period. Dilutive common share equivalents consist of shares issuable
upon the vesting or exercise of stock awards (calculated using the treasury stock method) during the period they were
outstanding. Certain shares under the Company’s stock-based compensation programs were excluded from the computation of
diluted earnings per share due to their anti-dilutive effect for the respective periods in which they were outstanding. The
reconciliation of the numerator and denominator of the earnings per share calculation is presented in Note 13.
Reclassifications
Certain reclassifications of the prior years' amounts have been made to conform to the current year's presentation. In the
Property and Equipment table above, the Company determined it was more practical to present Assets under construction on a
separate line as opposed to including the amounts within each asset class. Therefore, the reclassifications only resulted in
changes to the amounts between asset classes.
3. ACQUISITIONS
2013 Acquisitions
Zenprise
In January 2013, the Company acquired all of the issued and outstanding securities of Zenprise, Inc. ("Zenprise"), a
privately-held leader in mobile device management. Zenprise became part of the Company's Enterprise and Service Provider
division, in which Citrix has integrated the Zenprise offering for mobile device management into its XenMobile Enterprise
edition. The total consideration for this transaction was approximately $324.0 million, net of $2.9 million of cash acquired, and
was paid in cash. Transaction costs associated with the acquisition were approximately $0.6 million, of which the Company
expensed approximately $0.1 million during the year ended December 31, 2013 and are included in General and administrative
expense in the accompanying consolidated statements of income. In addition, in connection with the acquisition, the Company
assumed certain stock options, which are exercisable for up to 285,817 shares of the Company's common stock, for which the
vesting period reset fully upon the closing of the transaction.