Citrix 2014 Annual Report Download - page 57

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51
balance sheets. During the year ended December 31, 2014, two of the early-stage entities in which we held convertible debt
securities were acquired and as a result of such sale transactions we recorded gains of $3.9 million, which were included in
Other (expense) income, net in the accompanying consolidated statements of income.
Assets Measured at Fair Value on a Non-recurring Basis Using Significant Unobservable Inputs (Level 3)
During 2014, certain cost method investments with a combined carrying value of $8.3 million were determined to be
impaired and have been written down to their fair values of zero, resulting in impairment charges of $8.3 million. During 2013,
certain cost method investments with a combined carrying value of $9.3 million were determined to be impaired and have been
written down to their fair values of $5.6 million resulting in impairment charges of $3.7 million. The impairment charges are
included in Other (expense) income, net in the accompanying consolidated financial statements for the years ended
December 31, 2014 and 2013. In determining the fair value of cost method investments, we consider many factors including
but not limited to operating performance of the investee, the amount of cash that the investee has on-hand, the ability to obtain
additional financing and the overall market conditions in which the investee operates. The fair value of the cost method
investment represents a Level 3 valuation as the assumptions used in valuing this investment were not directly or indirectly
observable. See Note 4 to our consolidated financial statements included in this Annual Report on Form 10-K for the year
ended December 31, 2014 for further information regarding cost method investments.
Additional Disclosures Regarding Fair Value Measurements
As of December 31, 2014, the fair value of the Convertible Notes, which was determined based on inputs that are
observable in the market (Level 2) based on the closing trading price per $100 as of the last day of trading for the year ended
December 31, 2014, and carrying value of debt instruments (carrying value excludes the equity component of our Convertible
Notes classified in equity) was as follows (in thousands):
Fair Value Carrying Value
Convertible Senior Notes $ 1,530,938 $ 1,292,953
The carrying value of accounts receivable, accounts payable and accrued expenses and other current liabilities
approximate their fair value due to the short maturity of these items.
Accounts Receivable, Net
December 31, 2014
Compared to
2013
2014 2013
(In thousands)
Accounts receivable $ 680,377 $ 660,175 $ 20,202
Allowance for returns (2,185)(2,062)(123)
Allowance for doubtful accounts (3,791)(3,292)(499)
Accounts receivable, net $ 674,401 $ 654,821 $ 19,580
The increase in accounts receivable at December 31, 2014 compared to December 31, 2013 was primarily due to an
increase in sales, particularly in the last month of 2014 compared to the last month of 2013. The activity in our allowance for
returns was comprised primarily of $5.0 million of provisions for returns recorded during 2014, partially offset by $4.9 million
in credits issued for returns. The activity in our allowance for doubtful accounts was comprised primarily of $2.9 million in
provisions for doubtful accounts, partially offset by $2.4 million of uncollectible accounts written off, net of recoveries.
From time to time, we could maintain individually significant accounts receivable balances from our distributors or
customers, which are comprised of large business enterprises, governments and small and medium-sized businesses. If the
financial condition of our distributors or customers deteriorates, our operating results could be adversely affected. At
December 31, 2014, two distributors, the Arrow Group and Ingram Micro, accounted for 11% and 10% of gross accounts
receivable, respectively. At December 31, 2013, one distributor, Ingram Micro, accounted for 10% of our accounts receivable.
For more information regarding significant customers see Note 11 to our consolidated financial statements included in this
Annual Report on Form 10-K for the year ended December 31, 2014.