Citrix 2007 Annual Report Download - page 114

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CITRIX SYSTEMS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The Company does not engage in intercompany revenue transfers between segments. The Company’s chief
operating decision maker (“CODM”) evaluates the Company’s performance based primarily on profitability in
the geographic locations in which the Company operates and separately evaluates the performance of its Online
Services 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 Online Services
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 44.5%, 47.4% and
50.0% of the Company’s net revenues for the year ended December 31, 2007, 2006, and 2005, respectively. Net
revenues and segment profit for 2007, 2006 and 2005 classified by the Company’s reportable segments, are
presented below.
2007 2006 2005
(In thousands)
Net revenues:
Americas(1) ............................................. $ 614,181 $ 499,278 $ 397,233
EMEA(2) ............................................... 447,201 391,650 334,900
Asia-Pacific ............................................. 116,816 94,596 77,492
Online Services division ................................... 213,744 148,795 99,097
Consolidated ............................................ $1,391,942 $1,134,319 $ 908,722
Segment profit (loss):
Americas ............................................... $ 295,213 $ 252,996 $ 208,946
EMEA ................................................. 289,590 253,956 201,712
Asia-Pacific ............................................. 30,543 31,887 22,295
Online Services division ................................... 65,032 36,084 19,641
Unallocated expenses(3):
Amortization of intangibles ............................ (46,983) (36,136) (28,388)
In-process research and development ..................... (9,800) (1,000) (7,000)
Research and development ............................. (183,816) (140,570) (97,355)
Net interest and other income ........................... 48,501 39,737 20,682
Other corporate expenses .............................. (237,372) (193,873) (116,179)
Consolidated income before income taxes ............. $ 250,908 $ 243,081 $ 224,354
(1) The Americas segment is comprised of the United States, Canada and Latin America.
(2) Defined as Europe, the Middle East and Africa.
(3) Represents expenses presented to management only on a consolidated basis and not allocated to the
geographic operating segments.
F-40