Citrix 2014 Annual Report Download - page 97

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CITRIX SYSTEMS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
F-29
The significant components of the Company’s deferred tax assets and liabilities consisted of the following:
December 31,
2014 2013
(In thousands)
Deferred tax assets:
Accruals and reserves $ 27,105 $ 25,556
Deferred revenue 65,541 55,688
Tax credits 43,211 60,519
Net operating losses 75,318 103,329
Other 12,878 10,537
Stock based compensation 63,993 72,074
Depreciation and amortization — 1,675
Valuation allowance (15,167)(26,465)
Total deferred tax assets 272,879 302,913
Deferred tax liabilities:
Depreciation and amortization (16,835)—
Acquired technology (82,357)(136,258)
Prepaid expenses (9,372)(16,258)
Total deferred tax liabilities (108,564)(152,516)
Total net deferred tax assets $ 164,315 $ 150,397
The authoritative guidance requires a valuation allowance to reduce the deferred tax assets reported if it is not more likely
than not that some portion or all of the deferred tax assets will be realized. At December 31, 2014, the Company determined
that a $15.2 million valuation allowance relating to deferred tax assets for net operating losses and tax credits was necessary.
The Company does not expect to remit earnings from its foreign subsidiaries. Undistributed earnings of the Company’s
foreign subsidiaries amounted to approximately $2.09 billion at December 31, 2014. Those earnings are considered to be
permanently reinvested and, accordingly, no U.S. federal and state income taxes have been provided thereon. Upon distribution
of those earnings in the form of dividends or otherwise, the Company could be subject to both U.S. income taxes (subject to an
adjustment for foreign tax credits) and withholding taxes payable to various foreign countries. The Company maintains certain
strategic management and operational activities in overseas subsidiaries and its foreign earnings are taxed at rates that are
generally lower than in the United States.
At December 31, 2014, the Company had $162.5 million of remaining net operating loss carry forwards in the United
States from acquisitions. The utilization of these net operating loss carry forwards are limited in any one year pursuant to
Internal Revenue Code Section 382 and begin to expire in 2019. At December 31, 2014, the Company had $37.7 million of
remaining net operating loss carry forwards in foreign jurisdictions that do not expire.
At December 31, 2014, the Company had research and development tax credit carry forwards of $65.3 million that begin
to expire in 2018.