Citrix 2014 Annual Report Download - page 46

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judgments. Changes that impact provision estimates include such items as jurisdictional interpretations on tax filing positions
based on the results of tax audits and general tax authority rulings. 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.
The following discussion relating to the individual financial statement captions, our overall financial performance,
operations and financial position should be read in conjunction with the factors and events described in “— Overview” and Part
1 – Item 1A entitled “Risk Factors,” included in this Annual Report on Form 10-K for the year ended December 31, 2014,
which could impact our future performance and financial position.
Convertible Senior Notes
In April 2014, we completed a private placement of our Convertible Notes due 2019 with a net share settlement
feature, meaning that upon conversion, the principal amount will be settled in cash and the remaining amount, if any, will be
settled in shares of our common stock or a combination of cash and shares of our common stock, at our election. In accordance
with accounting guidance for convertible debt instruments that may be settled in cash or other assets on conversion, we first
determine the carrying amount of the liability component by measuring the fair value of a similar liability that does not have an
associated equity component. Then we determine the carrying amount of the equity component represented by the embedded
conversion option by deducting the fair value of the liability component from the initial proceeds ascribed to the convertible
debt instrument as a whole. Debt discount and debt issuance costs are amortized to interest expense using the effective interest
method.