Citrix 2006 Annual Report Download - page 102

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
existing tax positions taken by the Company. As a result of
the adoption of FIN No. 48, the Company believes that its
effective tax rate will be more volatile in future periods.
13. Geographic Information and Significant
Customers
The Company operates in a single industry segment
consisting of the design, development and marketing of
technology solutions that allow applications to be delivered,
supported and shared on-demand. The Company’s
revenues are derived from sales of its Application Delivery
Infrastructure products and related technical services in
the Americas, EMEA and Asia-Pacific regions and from
its online services sold by its Citrix Online Division. These
three geographic regions and the Citrix Online Division
constitute the Company’s four reportable segments.
The Company does not engage in intercompany revenue
transfers between segments. The Company’s chief
operating decision makers (“CODMs”) evaluate the
Company’s performance based primarily on profitability in
the geographic locations in which the Company operates
and separately evaluates the performance of its Citrix
Online Division. Segment profit for each segment includes
certain sales, marketing, general and administrative
expenses directly attributable to the segment, including
research and development costs in the Citrix Online
Division and excludes certain expenses that are managed
outside the reportable segments. Costs excluded from
segment profit primarily consist of certain research and
development costs associated with the Company’s
application delivery infrastructure products, stock-based
compensation costs, amortization of core and product
technology, amortization of other intangible assets, interest,
corporate expenses and income taxes, as well as, charges
for in-process research and development. Corporate
expenses are comprised primarily of corporate marketing
costs, stock-based compensation costs, operations
and certain general and administrative expenses, which
are separately managed. Accounting policies of the
Company’s segments are the same as its consolidated
accounting policies.
International revenues (sales outside of the United States)
accounted for approximately 47.4%, 50.0% and 53.2%
of the Company’s net revenues for the year ended
December 31, 2006, 2005, and 2004, respectively. Net
revenues and segment profit for 2006, 2005 and 2004
classified by the Company’s reportable segments, are
presented below.
(In thousands) 2006 2005 2004
(restated) (restated)
Net revenues:
Americas (1) $ 499,278 $ 397,233 $ 335,436
EMEA (2) 391,650 334,900 293,690
Asia-Pacific 94,596 77,492 67,930
Online Services division 148,795 99,097 44,101
Consolidated $ 1,134,319 $ 908,722 $ 741,157
Segment profit (loss):
Americas $ 252,996 $ 208,946 $ 199,332
EMEA 253,956 201,712 174,277
Asia-Pacific 31,887 22,295 19,587
Online Services division 36,084 19,641 (1,124)
Unallocated expenses (3):
Amortization of intangibles (36,136) (28,388) (12,331)
In-process research and development (1,000) (7,000) (19,100)
Research and development (140,570) (97,355) (81,780)
Net interest and other income 39,737 20,682 5,369
Other corporate expenses (193,873) (116,179) (119,894)
Consolidated income before income taxes $ 243,081 $ 224,354 $ 164,336