Citrix 2007 Annual Report Download - page 92

CITRIX SYSTEMS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
assumptions used in the valuation of stock-based awards, the valuation of the Company’s goodwill, net realizable
value of core and product technology, the provision for vacant facility costs, the provision for income taxes and
the amortization and depreciation periods for intangible and long-lived assets. While the Company believes that
such estimates are fair when considered in conjunction with the consolidated financial position and results of
operations taken as a whole, the actual amounts of such estimates, when known, will vary from these estimates.
Accounting for Stock-Based Compensation
The Company has various stock-based compensation plans for its employees and outside directors. Effective
January 1, 2006, the Company adopted the fair value recognition provisions of SFAS No. 123R, Share-Based
Payment, and related interpretations using the modified-prospective transition method. Under that method,
compensation cost recognized in 2006 includes (a) compensation cost for all stock-based awards granted prior to,
but not yet vested as of January 1, 2006 based on the grant date fair value estimated in accordance with the
original provisions of SFAS No. 123 and (b) compensation cost for all stock-based awards granted on or
subsequent to January 1, 2006, based on the grant-date fair value estimated in accordance with the provisions of
SFAS No. 123R. Results for prior periods have not been restated due to the adoption of SFAS No. 123R. Prior to
January 1, 2006, the Company accounted for its stock-based compensation plans under the recognition and
measurement provisions of Accounting Principles Board (“APB”) Opinion No. 25, Accounting for Stock Issued
to Employees, and related interpretations, as permitted by SFAS No. 123, Accounting for Stock-Based
Compensation. The Company did not recognize compensation cost related to stock options granted to its
employees and non-employee directors that had an exercise price equal to or above the market value of the
underlying common stock on the date of grant in its consolidated statements of income prior to January 1, 2006.
See Note 6 for further information regarding the Company’s stock-based compensation plans.
Earnings per Share
Basic earnings per share is calculated by dividing income available to stockholders by the weighted-average
number of common shares outstanding during each period. Diluted earnings per share is computed using the
weighted average number of common and dilutive common share equivalents outstanding during the period.
Dilutive common share equivalents consist of shares issuable upon the exercise of certain stock options
(calculated using the treasury stock method). Certain shares under the Company’s stock-based compensation
programs were excluded from the computation of diluted earnings per share due to their anti-dilutive effect for
the respective periods in which they were outstanding. The reconciliation of the numerator and denominator of
the earnings per share calculation is presented in Note 14.
Reclassifications
Certain reclassifications of the prior years’ financial statements have been made to conform to the current
year’s presentation.
3. ACQUISITIONS
2007 Acquisitions
Ardence Delaware Inc.
On January 5, 2007, the Company acquired all of the issued and outstanding capital stock of Ardence
Delaware Inc. (the “Ardence Acquisition” or “Ardence”), a leading provider of solutions that allow information
technology administrators to set up and configure PCs, servers, and Web servers in real time from a centrally
managed source. The Ardence Acquisition strengthens the Company’s application delivery capabilities with
more robust streaming and provisioning technologies and increased security and reliability. The total
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