Citrix 2014 Annual Report Download - page 34

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A significant portion of our cash and cash equivalents are held overseas. If we are not able to generate sufficient cash
domestically in order to fund our U.S. operations, stock repurchases and strategic opportunities, and to service our debt, we
may incur a significant tax liability in order to repatriate the overseas cash balances, or we may need to raise additional
capital in the future.
As of December 31, 2014, $1.38 billion of cash, cash equivalents and short-term investments were held in foreign
countries. These amounts are not freely available for dividend repatriation to the U.S. without triggering significant adverse tax
consequences in the U.S. As a result, if the cash generated by our domestic operations is not sufficient to fund our domestic
operations, our broader corporate initiatives such as stock repurchases, acquisitions, and other strategic opportunities, and to
service our outstanding indebtedness, we may need to raise additional funds through public or private debt or equity financings,
or we may need to obtain new credit facilities to the extent we choose not to repatriate our overseas cash. Such additional
financing may not be available on terms favorable to us, or at all, and any new equity financings or offerings would dilute our
current stockholders’ ownership. Furthermore, lenders may not agree to extend us new, additional or continuing credit. If
adequate funds are not available, or are not available on acceptable terms, we may be forced to repatriate our foreign sources of
liquidity and incur a significant tax expense or we may not be able to take advantage of strategic opportunities, develop new
products, respond to competitive pressures, repurchase outstanding stock or repay our outstanding indebtedness. In any such
case, our business, operating results or financial condition could be adversely impacted.
Our portfolios of liquid securities and strategic investments may lose value or become impaired.
Our investment portfolio consists of agency securities, corporate securities, money market funds, municipal (including
auction rate) securities, government securities and commercial paper. Although we follow an established investment policy and
seek to minimize the credit risk associated with investments by investing primarily in investment grade, highly liquid securities
and by limiting exposure to any one issuer depending on credit quality, we cannot give assurances that the assets in our
investment portfolio will not lose value, become impaired, or suffer from illiquidity.
In addition, we invest in private companies to further our strategic objectives and support our key business initiatives.
Such investments include equity or debt instruments, and many of these instruments are non-marketable at the time of our
initial investment. The companies in which we invest may fail or lose value because they may not be able to secure additional
funding, obtain favorable investment terms for future financings, or participate in liquidity events such as public offerings,
mergers, and private sales. If any of these private companies fail or lose value, we could be required to impair or write-off all or
part of our investment in that company.
Changes in our tax rates or our exposure to additional income tax liabilities could affect our operating results and financial
condition.
Our future effective tax rates could be favorably or unfavorably affected by changes in the valuation of our deferred tax
assets and liabilities, the geographic mix of our revenue, or by changes in tax laws or their interpretation. Significant judgment
is required in determining our worldwide provision for income taxes. In addition, we are subject to the continuous examination
of our income tax returns by tax authorities, including the Internal Revenue Service, or the IRS. We regularly assess the
likelihood of adverse outcomes resulting from these examinations to determine the adequacy of our provision for income taxes.
There can be no assurance, however, that the outcomes from these continuous examinations will not have an adverse effect on
our operating results and financial condition. Additionally, due to the evolving nature of tax rules combined with the large
number of jurisdictions in which we operate, it is possible that our estimates of our tax liability and the realizability of our
deferred tax assets could change in the future, which may result in additional tax liabilities and adversely affect our results of
operations, financial condition and cash flows.
Our results of operations, financial condition and cash flows could be further affected by lapses in or expiration of the
availability of tax credits, including the federal research and development tax credit. This tax credit expired on December 31,
2014, and may not be renewed or extended, or if renewed or extended, may be renewed or extended on terms significantly less
favorable to us or on terms resulting in our disqualification from the benefits of the tax credit.