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CITRIX SYSTEMS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
F-26
that arose on the vesting of stock units was $33.7 million, $31.0 million and $20.2 million, for 2014, 2013 and 2012,
respectively. These shares are reflected as treasury stock in the Company's consolidated balance sheets and statements of equity
and the related cash outlays reduce the Company's total stock repurchase authority.
Preferred Stock
The Company is authorized to issue 5,000,000 shares of preferred stock, $0.01 par value per share. No shares of such
preferred stock were issued and outstanding at December 31, 2014 or 2013.
9. COMMITMENTS AND CONTINGENCIES
Leases
The Company leases certain office space and equipment under various operating leases. In addition to rent, the leases
require the Company to pay for taxes, insurance, maintenance and other operating expenses. Certain of these leases contain
stated escalation clauses while others contain renewal options. The Company recognizes rent expense on a straight-line basis
over the term of the lease, excluding renewal periods, unless renewal of the lease is reasonably assured.
Rental expense for the years ended December 31, 2014, 2013 and 2012 totaled approximately $77.1 million, $70.9
million and $65.1 million, respectively. Sublease income for the years ended December 31, 2014, 2013 and 2012 was
approximately $0.3 million, $0.3 million and $0.2 million, respectively. Lease commitments under non-cancelable operating
leases with initial or remaining terms in excess of one year and sublease income associated with non-cancelable subleases, are
as follows:
Operating
Leases
Sublease
Income
(In thousands)
Years ending December 31,
2015 $ 55,678 $ 260
2016 52,420 227
2017 41,361 218
2018 36,262 204
2019 33,664 —
Thereafter 181,795 —
Total $ 401,180 $ 909
Legal Matters
The Company accrues a liability for legal contingencies when it believes that it is both probable that a liability has been
incurred and that it can reasonably estimate the amount of the loss. The Company reviews these accruals and adjusts them to
reflect ongoing negotiations, settlements, rulings, advice of legal counsel and other relevant information. To the extent new
information is obtained and the Company's views on the probable outcomes of claims, suits, assessments, investigations or
legal proceedings change, changes in the Company's accrued liabilities would be recorded in the period in which such
determination is made. For the Other Matters referenced below, the amount of liability is not probable or the amount cannot be
reasonably estimated; and, therefore, accruals have not been made. In addition, in accordance with the relevant authoritative
guidance, for matters in which the likelihood of material loss is at least reasonably possible, the Company provides disclosure
of the possible loss or range of loss. If a reasonable estimate cannot be made, however, the Company will provide disclosure to
that effect.
In April 2014, John Calma, ostensibly on behalf of the Company, filed a shareholder derivative complaint against certain
of the directors of the Company (and the Company as a nominal defendant) in the Court of Chancery of the State of Delaware.
The complaint alleges breach of fiduciary duty, waste of corporate assets and unjust enrichment related to stock awards that
they received under the Company's director compensation program. The complaint seeks the recovery of monetary damages
and other relief for damages allegedly caused to the Company. The Company believes that its directors and the Company have
meritorious defenses to these allegations and that it is not reasonably possible that the ultimate outcome of this suit will
materially and adversely affect the Company's business, financial condition, results of operations or cash flows.
On April 11, 2008, SSL Services, LLC (“SSL Services”) filed a suit for patent infringement against the Company in the
United States District Court for the Eastern District of Texas (the “SSL Matter”). SSL Services alleged that the Company
infringed U.S. Patent Nos. 6,061,796 (the “'796 patent”) and 6,158,011 (the “'011 patent”). The Company denied infringement