Citrix 2009 Annual Report Download - page 114

CITRIX SYSTEMS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The significant components of the Company’s deferred tax assets and liabilities consisted of the following:
December 31,
2009 2008
(In thousands)
Deferred tax assets:
Accruals and reserves .................................................. $ 23,687 $ 15,847
Depreciation and amortization ........................................... (3,316) 696
Deferred revenue ...................................................... 15,694 8,511
Tax credits ........................................................... 29,723 5,272
Net operating losses ................................................... 42,871 54,381
Other ............................................................... 3,794 14,819
Stock option compensation .............................................. 44,517 43,246
Valuation allowance ................................................... (8,680) (14,217)
Total deferred tax assets ............................................ 148,290 128,555
Deferred tax liabilities:
Acquired technology ................................................... (42,579) (67,332)
Prepaid expenses ...................................................... (13,178) (10,495)
Total deferred tax liabilities ......................................... (55,757) (77,827)
Total net deferred tax assets ......................................... $ 92,533 $ 50,728
The authoritative guidance requires a valuation allowance to reduce the deferred tax assets reported if it is
not more likely than not that some portion or all of the deferred tax assets will be realized. At December 31,
2009, the Company determined that a $8.7 million valuation allowance relating to deferred tax assets for net
operating losses from acquired companies and unrealized losses from temporary impairments on
available-for-sale investments was necessary.
The Company does not expect to remit earnings from its foreign subsidiaries. Undistributed earnings of the
Company’s foreign subsidiaries amounted to approximately $866.6 million at December 31, 2009. Those
earnings are considered to be permanently reinvested and, accordingly, no U.S. federal and state income taxes
have been provided thereon. Upon distribution of those earnings in the form of dividends or otherwise, the
Company could be subject to both U.S. income taxes (subject to an adjustment for foreign tax credits) and
withholding taxes payable to various foreign countries.
At December 31, 2009, the Company had $111.0 million of remaining net operating loss carry forwards
from acquisitions. The utilization of these net operating loss carry forwards are limited in any one year pursuant
to Internal Revenue Code Section 382 and begin to expire in 2018.
At December 31, 2009, the Company had research and development tax credit carry forwards of
approximately $29.7 million that begin to expire in 2018.
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