Citrix 2000 Annual Report Download - page 24

22
Purchase Agreement, the Company will purchase zero coupon bonds ("Forward
Bonds") from the investment advisor at certain scheduled dates pursuant to the
Bond Purchase Agreement. The purchase price of the Forward Bonds will equal the
expected future coupon or principal payment amounts received on six underlying
corporate securities. The corporate securities, which have an aggregate
amortized cost of $158.2 million at December 31, 2000, generally provide for
semi−annual interest payments and mature at various dates between December 2003
and March 2004. The Forward Bonds will mature on March 15, 2004 with an
aggregate maturity value of approximately $195 million. The Bond Purchase
Agreement and the underlying corporate securities are classified as
held−to−maturity, therefore, the Company does not recognize changes in the fair
value of these investments unless a decline in the fair value of the investments
is other than temporary, in which case a loss would be recognized in earnings.
The underlying corporate securities have been pledged as security for the
Company's future obligations to purchase the Forward Bonds.
In December 2000, the Company invested $158.1 million in a trust ("Trust")
held by an investment advisor. The Trust primarily consists of assets which in
turn invest in AAA−rated zero−coupon corporate securities that mature on March
22, 2004 with an aggregate maturity value of approximately $195 million. The
investment advisor entered into a credit risk swap agreement with the Trust
which effectively increased the yield on the trust assets and for which value
the Trust assumed the credit risk of ten specific A−rated or better companies.
The Company records the investment as held−to−maturity zero−coupon corporate
securities. The Company does not recognize changes in the fair market value of
these investments unless a decline in the fair value of the Trust assets is
other than temporary, in which case a loss would be recognized in earnings.
At December 31, 2000, the Company had $37.3 million in accounts receivable,
net of allowances, and $94.7 million of deferred revenues, of which the Company
anticipates $80.6 million will be earned over the next 12 months.
On April 15, 1999, the Board of Directors approved a stock repurchase
program authorizing the repurchase of up to $200 million of the Company's Common
Stock. Purchases will be made from time to time in the open market and paid out
of general corporate funds. As of December 31, 2000, the Company purchased
2,750,000 shares of outstanding Common Stock on the open market at an average
price of $21.04 per share. These shares have been recorded as treasury stock.
On August 8, 2000, the Company entered into an agreement, as amended, with
a counterparty in a private transaction to purchase up to approximately 4.8
million shares of the Company's Common Stock at various times through the third
quarter of 2002. Pursuant to the terms of the agreement, $100 million was paid
to the counterparty in the third quarter of 2000. The ultimate number of shares
repurchased will depend on market conditions. As of December 31, 2000, the
Company received 1,067,108 shares under this agreement at an average price of
$17.00 per share. These shares have been recorded as treasury stock.
In connection with the Company's stock repurchase program, in October 2000,
the Board of Directors approved a program authorizing the Company to sell put
warrants that entitle the holder of each warrant to sell to the Company,
generally by physical delivery, one share of the Company's Common Stock at a
specified price. The Company has engaged in various put warrant transactions
that expire on various dates between January and March 2001 and have exercise
prices ranging from $20.89 to $29.64. As of December 31, 2000, the Company sold
1.3 million put warrants at an average strike price of $26.17 and received
proceeds of $4.9 million. As of December 31, 2000, the Company has a total
potential repurchase obligation of approximately $34.0 million associated with
the outstanding put warrants, of which $15.7 million is classified as a put
warrants obligation on the balance sheet.
In October 2000, the Board of Directors approved a program authorizing the
Company to repurchase up to $25 million of the Debentures in open market
purchases. As of December 31, 2000, none of the Company's Debentures had been
repurchased under this program.
In February 2000, the Company completed its acquisition of all of the
operating assets of Innovex Group, Inc. for approximately $47.8 million, of
which $28.7 million was paid in cash at the closing date. The balance is
payable, in equal installments, 18 and 24 months after the closing date,
contingent upon future events.
22