Citrix 2007 Annual Report Download - page 106

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CITRIX SYSTEMS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
aggregate amount available under the Credit Facility, as amended, and the level of the Company’s total debt and
its adjusted EBITDA. Borrowings under the Credit Facility, as amended, are guaranteed by the Company and
certain of the Company’s United States and foreign subsidiaries, which guarantees are secured by a pledge of
shares of certain foreign subsidiaries. During 2005, the Company borrowed and repaid $75.0 million under the
Credit Facility. As of December 31, 2007, there were no amounts outstanding under the Credit Facility, as
amended.
Term Loan
Effective on August 9, 2005, a subsidiary of the Company entered into a term loan facility (the “Term
Loan”) with the Lenders. The Term Loan provided for an eighteen-month single-draw term loan facility in the
aggregate amount of $100.0 million. The Term Loan bore interest at a rate of LIBOR plus 0.5% and adjusted in
the range of 0.5% to 1.25% above LIBOR based on the level of the subsidiary’s total debt and its adjusted
EBITDA, as defined in the agreement. Borrowings under the Term Loan were guaranteed by the Company and
certain of its United States-domiciled and foreign-domiciled subsidiaries, which guarantees were secured by a
pledge of shares of certain foreign subsidiaries. In addition, the Company was required to pay a quarterly facility
fee ranging from 0.125% to 0.25% based on the aggregate amount of the Term Loan and the level of the
Company’s total debt and its adjusted EBITDA. The Term Loan was paid in full in February 2006.
Interest Expense
Interest expense on the Company’s borrowings in 2007 and 2006 was not material. The Credit Facility, as
amended, contains customary default provisions, and the Company must comply with various financial and
non-financial covenants. The financial covenants consist of a minimum interest coverage ratio and a maximum
consolidated leverage ratio. The primary non-financial covenants limit the Company’s ability to pay dividends
(other than pursuant to the Dividend Reinvestment Plan executed under the American Jobs Creation Act),
conduct certain mergers or acquisitions, make certain investments and loans, incur future indebtedness or liens,
alter the Company’s capital structure or sell stock or assets, subject to certain limits.
9. FAIR VALUES OF FINANCIAL INSTRUMENTS
The carrying value of cash and cash equivalents, accounts receivable, accounts payable and accrued
expenses approximate their fair value due to the short maturity of these items. The Company’s investments
classified as available-for-sale securities, including restricted investments, are carried at fair value on the
accompanying consolidated balance sheets based primarily on quoted market prices for such financial
instruments. The aggregate fair value of the Company’s available-for-sale investments was $598.2 million and
$440.1 million at December 31, 2007 and 2006, respectively.
10. 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.
F-32