Citrix 2014 Annual Report Download - page 88

Download and view the complete annual report

Please find page 88 of the 2014 Citrix annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 120

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120

CITRIX SYSTEMS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
F-20
As of December 31,
2013
Quoted
Prices In
Active Markets
for Identical
Assets (Level 1)
Significant
Other
Observable
Inputs (Level 2)
Significant
Unobservable
Inputs (Level 3)
(in thousands)
Assets:
Cash and cash equivalents:
Cash $ 227,528 $ 227,528 $ — $ —
Money market funds 52,823 52,823 — —
Corporate securities 389 — 389 —
Available-for-sale securities:
Agency securities 454,750 — 454,750 —
Corporate securities 644,091 — 633,801 10,291
Municipal securities 53,756 — 53,756 —
Government securities 157,079 — 157,079 —
Prepaid expenses and other current assets:
Foreign currency derivatives 4,952 — 4,952 —
Total assets $ 1,595,368 $ 280,351 $ 1,304,727 $ 10,291
Accrued expenses and other current liabilities:
Foreign currency derivatives 1,743 — 1,743 —
Total liabilities $ 1,743 $ — $ 1,743 $ —
The Company’s fixed income available-for-sale security portfolio generally consists of high quality, investment grade
securities from diverse issuers with a minimum credit rating of A-/A3 and a weighted-average credit rating of AA-/Aa3. The
Company values these securities based on pricing from the Service, whose sources may use quoted prices in active markets for
identical assets (Level 1 inputs) or inputs other than quoted prices that are observable either directly or indirectly (Level 2
inputs) in determining fair value, and accordingly, the Company classifies all of its fixed income available-for-sale securities as
Level 2.
The Company measures its cash flow hedges, which are classified as Prepaid expenses and other current assets and
Accrued expenses and other current liabilities, at fair value based on indicative prices in active markets (Level 2 inputs).
Assets Measured at Fair Value on a Recurring Basis Using Significant Unobservable Inputs (Level 3)
The Company has invested in convertible debt securities of certain early-stage entities that are classified as available-for-
sale investments. As quoted prices in active markets or other observable inputs were not available for these investments, in
order to measure them at fair value, the Company utilized a discounted cash flow model using a discount rate reflecting the
market risk inherent in holding securities of an early-stage enterprise, adjusted by the probability-weighted exit possibilities
associated with the convertible debt securities. This methodology required the Company to make assumptions that were not
directly or indirectly observable regarding the fair value of the convertible debt securities; accordingly they are a Level 3
valuation and included in the table below.
Investments
(in thousands)
Balance at December 31, 2013 $ 10,291
Purchases of Level 3 securities 2,050
Proceeds received on Level 3 securities (10,441)
Total net realized gains included in earnings 3,441
Transfers into Level 3 732
Balance at December 31, 2014 $ 6,073
Transfers into Level 3 relate to certain of the Company's investments in convertible debt securities of early-stage entities
that were reclassified from cost method investments, which were previously included in Other assets in the accompanying
consolidated balance sheets. During the year ended December 31, 2014, two of the early-stage entities in which the Company