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CITRIX SYSTEMS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. ORGANIZATION
Citrix Systems, Inc. (“Citrix” or the “Company”), is a Delaware corporation founded on April 17, 1989. The
Company designs, develops and markets technology solutions that allow applications to be delivered, supported,
and shared on-demand with high performance, enhanced security, and improved total cost of ownership. The
Company markets and licenses its products through multiple channels such as value-added resellers, channel
distributors, system integrators, independent software vendors, its Websites and original equipment
manufacturers.
Stock Option Investigation
On November 30, 2006, the Company’s Audit Committee commenced a voluntary, independent
investigation of the Company’s historical stock option granting practices and related accounting during the
period from January 1996 through December 2006. In addition to the grants management evaluated as part of the
Audit Committee’s investigation, it also evaluated all grants (consisting of two employee new hire grants) in
December 1995, which was the month the Company completed its initial public offering, and all grants to
non-employee directors. This voluntary investigation was not in response to any governmental investigation,
stockholder lawsuit, whistleblower complaint or inquiries from media organizations. The Company’s Annual
Report on Form 10-K for the year ended December 31, 2006, which was filed on September 7, 2007, contains a
description of the Audit Committee’s investigation, management’s related review, the conclusions of the Audit
Committee and management and the restatement of the Company’s consolidated balance sheet as of
December 31, 2005 and the related consolidated statements of income, stockholders’ equity and comprehensive
income and cash flows for the years ended December 31, 2005 and 2004, and each of the quarters in the 2006
and 2005 fiscal years, to reflect additional stock-based compensation expense and related income tax effects for
stock option awards granted since December 1995.
2. SIGNIFICANT ACCOUNTING POLICIES
Consolidation Policy
The consolidated financial statements of the Company include the accounts of its wholly-owned subsidiaries
in the Americas, Europe, the Middle East and Africa (“EMEA”), Asia-Pacific and the Online Services division.
All significant transactions and balances between the Company and its subsidiaries have been eliminated in
consolidation.
Cash and Cash Equivalents
Cash and cash equivalents at December 31, 2007 and 2006 consist of marketable securities, which are
primarily commercial paper, agency securities, money market funds, corporate securities and municipal
securities with initial or remaining contractual maturities when purchased of three months or less. The Company
minimizes its credit risk associated with cash and cash equivalents by investing primarily in investment grade,
highly liquid instruments.
Restricted Cash Equivalents and Investments
Restricted cash equivalents and investments at December 31, 2007 and 2006 are primarily comprised of
$62.8 million in investment securities and cash equivalents pledged as collateral for specified obligations under
the Company’s synthetic lease arrangement. The Company maintains the ability to manage the composition of
the restricted cash equivalents and investments within certain limits and to withdraw and use excess investment
earnings from the restricted collateral for operating purposes. For further information, see Note 10.
F-9