Citrix 2000 Annual Report Download - page 43

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CITRIX SYSTEMS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. ORGANIZATION
Citrix Systems, Inc. ("Citrix" or the "Company"), a Delaware corporation
founded on April 17, 1989, is a leading supplier of application delivery and
management software and services that enable the effective and efficient
enterprise−wide deployment and management of applications including those
designed for Microsoft Windows(R) operating systems and UNIX(R) operating
systems. The Company's MetaFrame(TM) products, developed under license and
strategic alliance agreements with Microsoft Corporation ("Microsoft"), permit
organizations to deploy and manage applications without regard to location,
network connection, or type of client hardware platforms. The Company markets
its products through multiple indirect channels such as distributors,
value−added resellers and original equipment manufacturers, primarily in the
United States, Europe and Asia−Pacific.
2. SIGNIFICANT ACCOUNTING POLICIES
Consolidation Policy
The consolidated financial statements of the Company include the accounts
of its wholly−owned subsidiaries, primarily in Europe and Asia−Pacific. All
significant transactions and balances between the Company and its subsidiaries
have been eliminated in consolidation.
Cash and Cash Equivalents
For the purposes of the consolidated statements of cash flows, cash and
cash equivalents include marketable securities which are primarily commercial
paper, government securities, money market funds, and corporate securities with
contractual maturities of three months or less. The Company minimizes its credit
risk associated with cash and cash equivalents by investing in high quality,
investment grade instruments and periodically evaluating the credit quality of
its primary financial institutions.
Investments
Short−term investments at December 31, 2000 primarily consist of government
securities, corporate securities, and commercial paper. Long−term investments at
December 31, 2000 primarily consist of corporate securities, government
securities and strategic investments in equity securities. The Company minimizes
its credit risk associated with investments by investing primarily in high
quality investment grade securities. Investments classified as
available−for−sale are stated at fair value with unrealized gains and losses,
net of taxes, reported in other comprehensive income. Investments classified as
held−to−maturity are stated at amortized cost, therefore, the Company does not
recognize changes in the fair value of these items. The Company's short−term
investments have a maturity at December 31, 2000 of 12 months or less and have
an average contractual maturity of less than 19 months. The Company's long−term
investments have a maturity at December 31, 2000 of one year to three years and
three months with an average contractual maturity of approximately two years and
seven months. From time to time, the Company makes strategic equity investments
that are accounted for under the cost or equity method depending on the extent
of the Company's ownership interest. As of December 31, 2000 and 1999, such
investments were recorded at the lower of cost or estimated net realizable
value. The Company periodically evaluates the carrying value of its investments
to determine if there has been any impairment of value that is
other−than−temporary.
The Company maintains short− and long−term investments with various
financial institutions. These financial institutions are located throughout the
country and the Company's policy is designed to limit exposure to any one
institution. The Company performs periodic evaluations of the relative credit
standing of those financial institutions that are considered in the Company's
investment strategy. The Company does not require collateral on these financial
instruments.
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