Citrix 2014 Annual Report Download - page 55

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privately negotiated transactions concurrently with the closing of the offering, and the remaining $1.4 billion to purchase
additional shares of our common stock through an accelerated share repurchase transaction, or the ASR, which we entered into
with Citibank, N.A., or Citibank, on April 25, 2014, and which is discussed in further detail in Note 8 to our consolidated
financial statements. We intend to use the remaining net proceeds resulting from the exercise of the Over-Allotment Option for
working capital and general corporate purposes.
Credit Facility
Subsequent Event
On January 7, 2015, we entered into a credit agreement, or Credit Agreement with Bank of America, N.A., as
Administrative Agent, and the other lenders party thereto from time to time collectively, the Lenders. The Credit Agreement
provides for a $250 million unsecured revolving credit facility for a term of five years, of which we have drawn $95 million to
date. We may elect to increase the revolving credit facility by up to $250 million if existing or new lenders provide additional
revolving commitments in accordance with the terms of the Credit Agreement. The proceeds of borrowings under the Credit
Agreement may be used for working capital and general corporate purposes, including acquisitions. Borrowings under the
Credit Agreement will bear interest at a rate equal to either (a) a customary London interbank offered rate formula or (b) a
customary base rate formula, plus the applicable margin with respect thereto, in each case as set forth in the Credit Agreement.
The Credit Agreement requires us to maintain a consolidated leverage ratio of not more than 3.5:1.0 and a consolidated
interest coverage ratio of not less than 3.0:1.0. The Credit Agreement includes customary events of default, with corresponding
grace periods in certain circumstances, including, without limitation, payment defaults, cross-defaults, the occurrence of a
change of control and bankruptcy-related defaults. The Lenders are entitled to accelerate repayment of the loans under the
Credit Agreement upon the occurrence of any of the events of default. In addition, the Credit Agreement contains customary
affirmative and negative covenants, including covenants that limit or restrict our ability to grant liens, merge or consolidate,
dispose of all or substantially all of its assets, change its business and incur subsidiary indebtedness, in each case subject to
customary exceptions for a credit facility of this size and type. In addition, the Credit Agreement contains customary
representations and warranties. Please see Note 13 to our consolidated financial statements included in this Annual Report on
Form 10-K for the year ended December 31, 2014 for additional details on our Credit Agreement.
Historically, significant portions of our cash inflows were generated by our operations. We currently expect this trend to
continue throughout 2015. We believe that our existing cash and investments together with cash flows expected from
operations will be sufficient to meet expected operating and capital expenditure requirements for the next 12 months. We
continue to search for suitable acquisition candidates and could acquire or make investments in companies we believe are
related to our strategic objectives. In January 2015, we drew $95 million under our $250 million credit facility. We could from
time to time continue to seek to raise additional funds through the issuance of debt or equity securities for larger acquisitions.
Cash, Cash Equivalents and Investments
December 31, 2014
Compared to
2013
2014 2013
(In thousands)
Cash, cash equivalents and investments $ 1,862,519 $ 1,590,416 $ 272,103
The increase in cash, cash equivalents and investments at December 31, 2014 as compared to December 31, 2013, is
primarily due to proceeds from the issuance of convertible senior notes of $1.42 billion, cash provided by our operating
activities of $846.0 million, and proceeds from the issuance of warrants of $101.8 million, partially offset by expenditures
made on stock repurchases of $1.6 billion, the purchase of hedges on the convertible senior notes of $184.3 million, purchases
of property and equipment of $165.4 million, and cash paid for acquisitions, net of cash acquired, of $101.1 million. As of
December 31, 2014, $1.38 billion of the $1.86 billion of cash, cash equivalents and investments was held by our foreign
subsidiaries. If these funds are needed for our operations in the United States, we would be required to accrue and pay U.S.
taxes to repatriate these funds. Our current plans are not expected to require repatriation of cash and investments to fund our
U.S. operations and, as a result, we intend to permanently reinvest our foreign earnings. See “– Liquidity and Capital
Resources.” We generally invest our cash and cash equivalents in investment grade, highly liquid securities to allow for
flexibility in the event of immediate cash needs. Our short-term and long-term investments primarily consist of interest-bearing
securities.
Fair Value Measurements
The authoritative guidance defines fair value as an exit price, representing the amount that would either be received to
sell an asset or be paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a
market-based measurement that should be determined based on assumptions that market participants would use in pricing an