Citrix 2007 Annual Report Download - page 57

Our efforts with respect to the acquired technologies currently consist of design and development that may
be required to support the release of the technologies into updated versions of existing service offerings and
potentially new product and service offerings related to the products acquired in our XenSource, Ardence, and
NetScaler Acquisitions. We currently expect that we will successfully develop new products or services utilizing
the acquired in-process technology, but there can be no assurance that commercial viability of future product or
service offerings will be achieved. Furthermore, future developments in the software industry, changes in
technology, changes in other products and offerings or other developments may cause us to alter or abandon
product plans. Failure to complete the development of projects in their entirety, or in a timely manner, could have
a material adverse impact on our financial condition and results of operations.
The fair value assigned to IPR&D was based on valuations prepared using methodologies and valuation
techniques consistent with those used by independent appraisers. All fair values were determined using the
income approach, which includes estimating the revenue and expenses associated with a project’s sales cycle and
by estimating the amount of after-tax cash flows attributable to the projects. The future cash flows were
discounted to present value utilizing an appropriate risk-adjusted rate of return, which ranged from 19% to 36%.
The rate of return included a factor that takes into account the uncertainty surrounding the successful
development of the IPR&D.
Interest Income
Year Ended December 31, 2007
Compared to
2006
2006
Compared to
20052007 2006 2005
(In thousands)
Interest income ............................... $49,704 $41,210 $23,614 $8,494 $17,596
Interest income increased during 2007 as compared to 2006 primarily due to overall higher average cash,
cash equivalent and investment balances that resulted primarily from an increase in cash from operations and
proceeds received from employee stock-based compensation plans, partially offset by an increase in cash paid
for acquisitions and capital expenditures. Interest income increased during 2006 as compared to 2005 due to
higher interest rates earned on overall higher average cash, cash equivalent and investment balances that
resulted primarily from increased proceeds received from employee stock-based compensation plans, a
decrease in cash spent for acquisitions and an increase in cash from operations, partially offset by increased
spending on stock repurchases, an increase in net payments made on our debt and an increase in capital
expenditures. For more information see “Management’s Discussion and Analysis of Financial Condition and
Results of Operations—Overview” and “—Liquidity and Capital Resources” and Note 3 to our consolidated
financial statements included in this Annual Report on Form 10-K for the year ended December 31, 2007.
Interest Expense
Year Ended December 31, 2007
Compared to
2006
2006
Compared to
20052007 2006 2005
(In thousands)
Interest expense .............................. $ (737) $ (927) $ (2,426) $ 190 $ 1,499
The decrease in interest expense during 2007 compared to 2006 is not significant. Interest expense
decreased during 2006 compared to 2005 primarily due to the repayment of our term loan facility, or the Term
Loan, in February 2006. For more information see “Management’s Discussion and Analysis of Financial
Condition and Results of Operations—Liquidity and Capital Resources” and Note 8 to our consolidated financial
statements included in this Annual Report on Form 10-K for the year ended December 31, 2007.
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