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CITRIX SYSTEMS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
F-21
held convertible debt securities were acquired and as a result of such sale transactions the Company 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 and 2013, certain cost method investments with a combined carrying value of $8.3 million and $9.3 million,
respectively, were determined to be impaired and have been written down to their fair values of zero and $5.6 million,
respectively, resulting in impairment charges of $8.3 million and $3.7 million, respectively. 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, the Company considers 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 for more information regarding cost method investments.
For certain intangible assets where the unamortized balances exceeded the undiscounted future net cash flows, the
Company measures the amount of the impairment by calculating the amount by which the carrying values exceed the estimated
fair values. The estimated fair values of those intangible assets are based on projected discounted future net cash flows using
the relief-from-royalty and excess earnings methods. Key assumptions used in the valuations include forecasts of revenue and
expenses over an extended period of time, royalty rate percentages, tax rates, and estimated costs of debt and equity capital to
discount the projected cash flows. These non-recurring fair value measurements are categorized as Level 3 significant
unobservable inputs. See Note 2 to the Company's consolidated financial statements for detailed information related to
Goodwill and Other Intangible Assets.
Additional Disclosures Regarding Fair Value Measurements
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.
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 the Company’s
Convertible Notes classified in equity) was as follows:
Fair Value Carrying Value
Convertible Senior Notes $ 1,530,938 $ 1,292,953
See Note 12 for more information on the Convertible Notes.
6. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
Accrued expenses consist of the following:
December 31,
2014 2013
(In thousands)
Accrued compensation and employee benefits $ 158,142 $ 141,065
Other accrued expenses 139,937 116,541
Total $ 298,079 $ 257,606
7. EMPLOYEE STOCK-BASED COMPENSATION AND BENEFIT PLANS
Plans
The Company’s stock-based compensation program is a long-term retention program that is intended to attract and
reward talented employees and align stockholder and employee interests. As of December 31, 2014, the Company had two
stock-based compensation plans under which it was granting stock options and non-vested stock units. The Company is
currently granting stock-based awards from its 2014 Equity Incentive Plan (the "2014 Plan"). During 2014, the Company
granted certain stock-based awards from its Amended and Restated 2005 Employee Stock Purchase Plan (as amended, the
“2005 ESPP”). In December 2014, the Company's Board of Directors approved the 2015 Employee Stock Purchase Plan,
which is subject to stockholder approval at the Company Annual Meeting of Stockholders on May 28, 2015. In connection with