Citrix 2009 Annual Report Download - page 26

We have received a Revenue Agent’s Report from the Internal Revenue Service asserting tax deficiencies in
certain of our tax returns. An adverse outcome of this tax examination, or any future tax examinations
involving similar assertions, could have a material adverse effect on our results of operations and financial
condition.
In connection with a current IRS examination of our tax returns, the IRS has asserted income tax
deficiencies related to transfer pricing and consequential adjustments of approximately $81.3 million for tax
years 2004 and 2005 (excluding interest) relating to valuation matters associated with the intercompany transfer
of certain intellectual property in earlier tax years. We disagree with the adjustments and have filed a protest with
the IRS, which caused the matter to be referred to the Appeals Division of the IRS. We are contesting the
adjustments through the IRS appeals process and the courts, if necessary. There can be no assurance, however,
that this matter will be resolved in our favor, and an adverse outcome of this matter, or any future tax
examinations involving similar assertions, could have a material effect on our results of operations and financial
condition. Regardless of whether this matter is resolved in our favor, this matter could be expensive and time-
consuming to defend.
If we do not develop new products and services or enhancements to our existing products and services, our
business, results of operations and financial condition could be adversely affected.
The markets for our products and services are characterized by:
• rapid technological change;
• evolving industry standards;
• fluctuations in customer demand;
• changes in customer requirements; and
• frequent new product and service introductions and enhancements.
Our future success depends on our ability to continually enhance our current products and services and
develop and introduce new products and services that our customers choose to buy. If we are unable to keep pace
with technological developments and customer demands by introducing new products and services and
enhancements, our business, results of operations and financial condition could be adversely affected. Our future
success could be hindered by:
• delays in our introduction of new products and services;
• delays in market acceptance of new products and services or new releases of our current products and
services; and
• our, or a competitor’s, announcement of new product or service enhancements or technologies that
could replace or shorten the life cycle of our existing product and service offerings.
In order for a number of our products to succeed in the future, we believe the demand for technology will need
to shift from the types of products and services we and our competitors have sold in the past to a new generation of
products we now offer. For example, we cannot guarantee that our Desktop Solutions, Online Services and
Datacenter and Cloud Solutions will achieve the broad market acceptance by our channel partners and entities with
which we have a technology relationship, customers and prospective customers necessary to generate significant
revenue. In addition, we cannot guarantee that we will be able to respond effectively to technological changes or
new product announcements by others. If we experience material delays or sales shortfalls with respect to our new
products and services or new releases of our current products and services, those delays or shortfalls could have a
material adverse effect on our business, results of operations and financial condition.
We believe that we could incur additional development costs, acquisition costs and royalties and as we
develop, buy or license new technologies or enhancements to our existing products and services. These added
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