Citrix 2007 Annual Report Download - page 65

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2007 market rates, the fair value of our foreign currency forward contracts would decrease the asset by $21.2
million, resulting in a net liability position. Conversely, a hypothetical 10% depreciation of the U.S. dollar from
December 31, 2007 market rates would increase the fair value of our foreign currency forward contracts by $21.1
million. In these hypothetical movements, foreign operating costs would move in the opposite direction. This
calculation assumes that each exchange rate would change in the same direction relative to the U.S. dollar. In
addition to the direct effects of changes in exchange rates quantified above, changes in exchange rates could also
change the dollar value of sales and affect the volume of sales as our competitors’ products become more or less
attractive. We do not anticipate any material adverse impact to our consolidated financial position, results of
operations, or cash flows as a result of these foreign exchange forward contracts.
Exposure to Interest Rates
We have interest rate exposures resulting from our interest-based available-for-sale securities. We maintain
available-for-sale investments in debt securities and we limit the amount of credit exposure to any one issuer or
type of instrument. The securities in our investment portfolio are not leveraged. The securities classified as
available-for-sale are subject to interest rate risk. The modeling technique used measures the change in fair
values arising from an immediate hypothetical shift in market interest rates and assumes that ending fair values
include principal plus accrued interest and reinvestment income. If market interest rates were to increase by 100
basis points from December 31, 2007 and 2006 levels, the fair value of the available-for-sale portfolio would
decline by approximately $3.2 million and $1.8 million, respectively. If market interest rates were to decrease by
100 basis points from December 31, 2007 and 2006 levels, the fair value of the available-for-sale portfolio would
increase by approximately $3.2 million and $1.8 million, respectively. These amounts are determined by
considering the impact of the hypothetical interest rate movements on our available-for-sale investment
portfolios. This analysis does not consider the effect of credit risk as a result of the reduced level of overall
economic activity that could exist in such an environment.
During 2005, we entered into the Credit Facility, as amended in 2006, or the Amended Credit Facility.
Accordingly, we could be exposed to market risk from changes in interest rates on our long-term debt. This
exposure relates to our $100.0 million Amended Credit Facility. Borrowings under the Amended Credit Facility
currently bear interest at variable rates based on LIBOR plus 0.32% and adjusts in the future in the range of
0.32% to 0.80% above LIBOR based on our level of total debt and our adjusted earnings before interest, taxes,
depreciation and amortization, or EBITDA. A hypothetical 1% interest rate change would not have any current
impact on our results of operations as we had no amounts outstanding under the Amended Credit Facility as of
December 31, 2007.
In April 2002, we entered into a synthetic lease with a substantive lessor totaling approximately $61.0
million related to office space utilized for our corporate headquarters in Fort Lauderdale, Florida. Payments
under this synthetic lease are indexed to a variable interest rate (LIBOR plus a margin). Based upon our interest
rate exposure under this synthetic lease at December 31, 2007, a 100 basis point change in the current interest
rate would have an immaterial effect on our financial position and results of operations. In addition to interest
rate exposure, if the fair value of our headquarters property, under this synthetic lease, were to significantly
decline, there could be a material adverse effect on our results of operations and financial condition.
ITEM 8. FINANCIAL STATEMENTS AND SCHEDULES
Our consolidated financial statements and related financial statement schedule, together with the reports of
independent registered public accounting firm, appear at pages F-1 through F-47 of this Annual Report on Form
10-K for the year ended December 31, 2007.
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