Citrix 2015 Annual Report Download

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Table of contents

  • Page 1

  • Page 2
    ... Cost of net revenues: Cost of product and license revenues Cost of services and maintenance revenues Amortization of product related intangible assets Total cost of net revenues Gross margin Operating expenses: Research and development Sales, marketing and services General and administrative...

  • Page 3
    ... any network, any location or any device. We have built market-leading products for secure and reliable access across all major application types - including Windows, web, mobile and customer line-of-business apps. We've advanced the market to empower our customers to adopt new delivery models such...

  • Page 4
    ...to deliver ongoing growth for our shareholders, customers, employees and partners. Our best in class products and end-to-end solutions differentiate us from other players, both large and small. Helping our customers solve complex business challenges is what drives and inspires us. Through innovation...

  • Page 5
    ... ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2015 or TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to . Commission File Number 0-27084 CITRIX...

  • Page 6
    ... Schedules 58 Directors, Executive Officers and Corporate Governance Executive Compensation Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters Certain Relationships and Related Transactions and Director Independence Principal Accounting Fees and Services...

  • Page 7
    .... ITEM 1. BUSINESS General Citrix develops and sells products and services that enable the secure and reliable delivery of applications and data over public, private or hybrid clouds or networks, to virtually any type of device. We market and license our products directly to customers, over the Web...

  • Page 8
    ...enterprise-class desktop and application delivery services that can meet the needs of everything from basic call center environments to high-powered graphics workstations. In XenDesktop Enterprise and Platinum editions, customers also receive the industry-leading Citrix XenApp to manage and mobilize...

  • Page 9
    ... GoToMeeting is an easy-to-use, secure and cost-effective product for online meetings, sales demonstrations and collaborative gatherings. GoToMeeting users can easily host, or participate in online meetings from a Mac, PC, iPad, iPhone, Windows 8 tablet, Windows Phone or Android device. GoToMeeting...

  • Page 10
    ... We provide a portfolio of professional services to our business partners and customers to manage the quality of implementation, operation and support of our solutions. These services are available for additional fees paid on an annual or transactional basis. • Citrix Consulting helps guide the...

  • Page 11
    ... and mobile networks which work together to provide a high-definition user experience across a wide array of applications, devices and networks. • Citrix SmartAccess technologies provide granular, policy-based control over access and features that enable the best balance of security, compliance...

  • Page 12
    ... on reported license usage. Our Mobility Apps products are accessed over the Internet for usage during the subscription period. Our hardware appliances come pre-loaded with software for which customers can purchase perpetual licenses and annual support and maintenance. Technology Relationships We...

  • Page 13
    ...partners within the Citrix Service Provider program. These partners, consisting of managed service providers, IT hosting companies and Telcos, license Citrix desktop, application, networking and enterprise mobility management products on a monthly subscription basis. With these technologies partners...

  • Page 14
    ... 31, 2015. Segment Revenue Our revenues are derived from our Enterprise and Service Provider products, which primarily include Workspace Services solutions, Delivery Networking products and related license updates and maintenance, support and professional services and from our Mobility Apps business...

  • Page 15
    ... View product and the emergence of virtual applications and desktop delivery from public and private cloud services. We believe XenApp, XenDesktop and Citrix Workspace Suite give Citrix a competitive advantage by providing customers multiple ways to virtualize and deliver desktops and/or apps with...

  • Page 16
    ... individual users, consultants and small businesses, positioning Citrix as the only provider of remote support solutions for all customer segments. In remote support, we compete with Cisco's WebEx, LogMeIn, TeamViewer, Bomgar and Zendesk. In the data sharing segment, our ShareFile product's direct...

  • Page 17
    ...partners and other strategic or technology relationships, financial information and results of operations for future periods, product and price competition, strategy, operational and growth initiatives, seasonal factors, natural disasters, stock-based compensation, licensing and subscription renewal...

  • Page 18
    ...to adapt their strategies and cost structures, which may give them a competitive advantage with our current or prospective customers. We may also experience increased competition from new types of products as the options for workspace services, delivery networking and mobility apps increase. Further...

  • Page 19
    ... We cannot guarantee that our Workspace Services solutions, Delivery Networking products and Mobility Apps products will achieve the broad market acceptance by our channel and strategic partners, customers and prospective customers necessary to generate significant revenue in the future. In addition...

  • Page 20
    ... workspace services, delivery networking and mobility apps markets, these companies continue to seek to deliver comprehensive IT solutions to end users and combine enterprise-level hardware and software solutions that may compete with our Workspace Services, Delivery Networking and Mobility Apps...

  • Page 21
    ... the initial results of our operational review and a plan to focus on our strategic solutions for secure and reliable delivery of applications and data, which included, among other things: • • the proposed spinoff of our GoTo family of products into a separate, publicly-traded company; the...

  • Page 22
    ... affect our financial condition and operating results. The increasing user traffic and complexity of our Mobility Apps products, specifically those using Voice over Internet protocol and high-definition video conferencing features, and Delivery Networking products demands more computing power. We...

  • Page 23
    ... licensing fees over a longer period, including offering additional products in a SaaS model. Changes to our licensing programs and subscription renewal programs, including the timing of the release of enhancements, upgrades, maintenance releases, the term of the contract, discounts, promotions...

  • Page 24
    ... in demand for our Workspace Services solutions and our Delivery Networking products. If our customers do not continue to purchase our license updates and maintenance products, our deferred revenue would decrease significantly and our results of operations and financial condition would be adversely...

  • Page 25
    ... and train our sales team and channel partners in order to effectively market offerings in product categories in which we have less experience than our competitors; we may not be able to develop effective pricing strategies for our new products and services; hardware, software and cloud hosting...

  • Page 26
    ... will be completed on the terms or timeline contemplated, if at all. On November 17, 2015, we announced plans to spin off our GoTo family of products into a separate, publicly-traded company following a review of strategic alternatives for those products. As of the date of this report, we expect the...

  • Page 27
    ... of apps and data. These changes may not meet some shareholders' investment strategies, which could cause investors to sell their shares of our common stock. Excessive selling could cause the relative market price of our common stock to decrease following the consummation of the proposed spin-off...

  • Page 28
    ..., we may enter into transition services agreements or other strategic relationships, including long-term research and development arrangements, sales arrangements or agree to provide certain indemnities to the purchaser in any such transaction, which may result in additional expense. Further, if...

  • Page 29
    ..., results of operations or financial condition may be impacted. Our use of "open source" software could negatively impact our ability to sell our products and subject us to possible litigation. The products or technologies acquired, licensed or developed by us may incorporate so-called "open source...

  • Page 30
    ... works under the terms of the particular open source license. In addition to risks related to license requirements, usage of open source software can lead to greater risks than use of third-party commercial software, as open source licensors generally do not provide technology support, maintenance...

  • Page 31
    .... See "Management's Discussion and Analysis of Financial Condition and Results of Operations-Critical Accounting Policies and Estimates" and Notes 12 and 13 to our consolidated financial statements included in this Annual Report on Form 10-K for the year ended December 31, 2015 for information...

  • Page 32
    ... market price of our stock include actual or anticipated variations in operating and financial results; analyst reports or recommendations; rumors, announcements, or press articles regarding our or our competitors' operations, management, organization, financial condition, or financial statements...

  • Page 33
    ... adversely affect the market price of our stock, regardless of operating performance. Changes or modifications in financial accounting standards may have a material adverse impact on our reported results of operations or financial condition. A change or modification in accounting policies can have...

  • Page 34
    ..., Canada and Latin America, EMEA, which is comprised of Europe, the Middle East and Africa, and Asia-Pacific. The following table presents the location and square footage of our leased office space by reporting segment as of December 31, 2015: Enterprise and Service Provider Mobility Apps (square...

  • Page 35
    ...MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Price Range of Common Stock and Dividend Policy Our common stock is currently traded on The NASDAQ Global Select Market under the symbol CTXS. The following table sets forth the high and low sales prices for our common stock as reported on The NASDAQ...

  • Page 36
    ...and with Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations. 2015 Year Ended December 31, 2014 2013 2012 (In thousands, except per share data) 2011 Consolidated Statements of Income Data: Net revenues Cost of net revenues(a) Gross margin Operating expenses...

  • Page 37
    ...Executive Summary We develop and sell products and services that enable the secure and reliable delivery of applications and data over public, private or hybrid clouds or networks, to virtually any type of device. Our technologies mobilize desktops, apps, data, and people to help our customers drive...

  • Page 38
    ...an increase in sales of NetScaler. Our Software as a service revenues increased due to increased sales of our Communications Cloud products, led by GoToMeeting and Grasshopper, and our Workflow Cloud products, primarily ShareFile. The increase in License updates and maintenance revenue was primarily...

  • Page 39
    ... the delivery of virtual desktops and applications to mobile devices, was combined with HDX technology in the Citrix XenApp and XenDesktop products to deliver an improved user experience under adverse network conditions. Framehawk became part of our Enterprise and Service Provider segment. The total...

  • Page 40
    ... the products are shipped pursuant to an agreement and purchase order. For SaaS, delivery occurs upon providing the users with their login id and password. For product training and consulting services, we fulfill our obligation when the services are performed. For license updates and maintenance, we...

  • Page 41
    ..., fees related to online service agreements are recognized ratably over the contract term. In addition, SaaS revenues may also include set-up fees, which are recognized ratably over the contract term or the expected customer life, whichever is longer. Generally, our Mobility Apps products are...

  • Page 42
    ... from acquisitions and other third party agreements. We allocate the purchase price of acquired intangible assets acquired through third party agreements based on their estimated relative fair values. We allocate a portion of purchase price of acquired companies to the product related technology...

  • Page 43
    .... Our revenues are derived from sales of our Enterprise and Service Provider business unit's products, which include our Workspace Services solutions, Delivery Networking products and related license updates and maintenance and from sales of our Mobility Apps business unit's Communications Cloud and...

  • Page 44
    ...- Item 1A entitled "Risk Factors," included in this Annual Report on Form 10-K for the year ended December 31, 2015, which could impact our future performance and financial position. Convertible Senior Notes In April 2014, we completed a private placement of our Convertible Notes due 2019 with a net...

  • Page 45
    ... App Delivery products which include XenMobile products and Workspace Suite; and Delivery Networking primarily includes NetScaler, ByteMobile Smart Capacity, and CloudBridge; and Our CSP program provides subscription-based services in which the CSP partners host software services to their end users...

  • Page 46
    ... technical support and hardware and software maintenance, and which are recognized ratably over the contract term. • Professional services revenues are comprised of: • • Fees from consulting services related to implementation of our products, which are recognized as the services are provided...

  • Page 47
    ... Subscription Advantage program as well as maintenance fees, which include software and hardware maintenance and technical support. Deferred revenues also include SaaS revenue from annual service agreements for our online services and Professional services revenue primarily related to our consulting...

  • Page 48
    ... to the increase in product training and certification programs and maintenance and support costs of $16.2 million related to increased sales of our Enterprise and Service Provider business unit's products. We currently are targeting cost of services and maintenance revenues will increase when...

  • Page 49
    ... services expenses consisted primarily of personnel related costs, including sales commissions, presales support, the costs of marketing programs aimed at increasing revenue, such as brand development, advertising, trade shows, public relations and other market development programs and costs related...

  • Page 50
    ... services expense when comparing 2014 to 2013 is a $12.0 million increase in professional fees related to strategic initiatives and a $10.9 million increase in marketing program costs related to various marketing campaigns and events. General and Administrative Expenses Year Ended December 31, 2015...

  • Page 51
    ... of 2015 included higher professional fees in connection with the operational and strategic review of the business, while remaining at consistent levels across the other functional areas. We also expect to incur charges in the first quarter of 2016 related to the planned spinoff of our GoTo business...

  • Page 52
    ... December 31, 2014 was primarily due to a change in the combination of income between our U.S. and foreign operations, the decline in reserve for uncertain tax positions, as well as the impact of discrete tax benefits related to the extension of the 2015 federal research and development tax credit...

  • Page 53
    ... offset by proceeds from the issuance of common stock under our employee stock-based compensation plans of $112.3 million. During 2014, we generated operating cash flows of $846.0 million. These operating cash flows related primarily to net income of $251.7 million, adjusted for, among other things...

  • Page 54
    ... market data, which require the reporting entity to develop its own assumptions. Available-for-sale securities included in Level 2 are valued utilizing inputs obtained from an independent pricing service, or the Service, which uses quoted market prices for identical or comparable instruments rather...

  • Page 55
    .... As quoted prices in active markets or other observable inputs were not available for these investments, in order to measure them at fair value, we utilized a discounted cash flow model using a discount rate reflecting the market risk inherent in holding securities of an early-stage enterprise...

  • Page 56
    ..., net of recoveries. From time to time, we could maintain individually significant accounts receivable balances from our distributors or customers, which are comprised of large business enterprises, governments and small and medium-sized businesses. If the financial condition of our distributors or...

  • Page 57
    ... the principal balance to be repaid. See Note 12 to our consolidated financial statements included in this Annual Report on Form 10-K for the year ended December 31, 2015 for detailed information on the Convertible Notes offering and the transactions related thereto. Purchase obligations represent...

  • Page 58
    ... STATEMENTS AND SUPPLEMENTARY DATA Our consolidated financial statements and related financial statement schedule, together with the report of independent registered public accounting firm, appear at pages F-1 through F-42 of this Annual Report on Form 10-K for the year ended December 31, 2015. 54

  • Page 59
    ... public accountants on accounting or financial disclosure matters during our two most recent fiscal years. ITEM 9A. CONTROLS AND PROCEDURES Evaluation of Disclosure Controls and Procedures As of December 31, 2015, our management, with the participation of our President and Chief Executive Officer...

  • Page 60
    ... financial reporting as of December 31, 2015, based on the COSO criteria. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Citrix Systems, Inc. as of December 31, 2015 and 2014, and the related...

  • Page 61
    ... to the Company's definitive proxy statement pursuant to Regulation 14A, which proxy statement will be filed with the Securities and Exchange Commission not later than 120 days after the close of the Company's fiscal year ended December 31, 2015. ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES The...

  • Page 62
    ... the Company's Current Report on Form 8-K filed on July 31, 2015) Specimen certificate representing Common Stock (incorporated herein by reference to Exhibit 4.1 to the Company's Registration Statement on Form S-1 (File No. 33-98542), as amended) Indenture, dated as of April 30, 2014, between Citrix...

  • Page 63
    ... reference to Exhibit 10.3 to the Company's Current Report on Form 8-K filed on April 30, 2014) Credit Agreement, dated as of January 7, 2015, by and among Citrix Systems, Inc., the initial lenders named therein and Bank of America, N.A., as Administrative Agent (incorporated herein by reference to...

  • Page 64
    ... 10.7 to the Company's Quarterly Report on Form 10-Q filed on November 4, 2015) List of Subsidiaries Consent of Independent Registered Public Accounting Firm Power of Attorney (included in signature page) Rule 13a-14(a) / 15d-14(a) Certification of Principal Executive Officer Description 31.2†32...

  • Page 65
    ..., IL 60604 and 3 World Financial Center, Suite 400, New York, NY 10281-1022. (c) Financial Statement Schedule. The Company hereby files as part of this Annual Report on Form 10-K for the year ended December 31, 2015 the consolidated financial statement schedule listed in Item 15(a)(2) above, which...

  • Page 66
    ... Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, in Fort Lauderdale, Florida on the 18th day of February, 2016. CITRIX SYSTEMS, INC. By: /s/ KIRILL TATARINOV Kirill Tatarinov President and Chief Executive Officer 62

  • Page 67
    ..., Chief Executive Officer and Director (Principal Executive Officer) /S/ DAVID J. HENSHALL David J. Henshall Executive Vice President, Chief Operating Officer and Chief Financial Officer (Principal Financial Officer) /S/ DAVID ZALEWSKI David Zalewski Vice President, Chief Accounting Officer...

  • Page 68

  • Page 69
    ...Statements and Financial Statement Schedule The following consolidated financial statements of Citrix Systems, Inc. are included in Item 8: Report of Independent Registered Public Accounting Firm Consolidated Balance Sheets - December 31, 2015 and 2014 Consolidated Statements of Income - Years ended...

  • Page 70
    Report of Independent Registered Public Accounting Firm The Board of Directors and Stockholders of Citrix Systems, Inc. We have audited the accompanying consolidated balance sheets of Citrix Systems, Inc. as of December 31, 2015 and 2014, and the related consolidated statements of income, ...

  • Page 71
    CITRIX SYSTEMS, INC. CONSOLIDATED BALANCE SHEETS December 31, 2015 December 31, 2014 (In thousands, except par value) Assets Current assets: Cash and cash equivalents Short-term investments, available-for-sale Accounts receivable, net of allowances of $7,719 and $5,976 at December 31, 2015 and ...

  • Page 72
    ... net revenues: Cost of product and license revenues Cost of services and maintenance revenues Amortization and impairment of product related intangible assets Total cost of net revenues Gross margin Operating expenses: Research and development Sales, marketing and services General and administrative...

  • Page 73
    CITRIX SYSTEMS, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME Year Ended December 31, 2015 2014 (In thousands) 2013 Net income Other comprehensive income (loss): Change in foreign currency translation adjustment Available for sale securities: Change in net unrealized losses Less: ...

  • Page 74
    ... plans Stock-based compensation expense Common stock issued under employee stock purchase plan Tax deficiency from employer stock plans, net Stock repurchases, net Restricted shares turned in for tax withholding Other Other comprehensive income, net of tax Net income Balance at December 31, 2015...

  • Page 75
    ... Income taxes, net Accounts payable Accrued expenses and other current liabilities Deferred revenues Other liabilities Total changes in operating assets and liabilities, net of the effects of acquisitions Net cash provided by operating activities Investing Activities Purchases of available-for-sale...

  • Page 76
    ... "Company"), is a Delaware corporation founded on April 17, 1989. Citrix develops and sells products and services that enable the secure and reliable delivery of applications and data over public, private or hybrid clouds or networks, to virtually any type of device. Citrix markets and licenses its...

  • Page 77
    ... at the lower of carrying amount or fair value less costs to sell. For the years ended December 31, 2015 and 2014, the Company identified certain intangible assets that were impaired within our Enterprise and Service Provider segment and recorded non-cash impairment charges of $123.0 million and...

  • Page 78
    ... to the Company's reportable segments during 2015 and 2014 (in thousands): Balance at January 1, 2015 Balance at December 31, 2015 (2) Additions Other Balance at January 1, 2014 Additions Other Balance at December 31, 2014 (4) (3) Enterprise and Service Provider $ 1,434,369 Mobility Apps 362...

  • Page 79
    ... contract term or the expected customer life, whichever is longer. License updates and maintenance revenues consist of fees related to the Subscription Advantage program and maintenance fees, which include technical support and hardware and software maintenance. Subscription Advantage is a renewable...

  • Page 80
    ... technical support, immediate access to software upgrades, enhancements and maintenance releases when and if they become available during the term of the contract. Professional services revenues are comprised of fees from consulting services related to the implementation of the Company's products...

  • Page 81
    ... other costs related to these agreements are included in cost of net revenues. Cost of services and maintenance revenue consists primarily of compensation and other personnel-related costs of providing technical support and consulting, as well as costs of hosting the Company's Mobility Apps products...

  • Page 82
    ... reseller or provider provides substantiation of qualified expenses. The Company estimates the impact of these expenses and recognizes them at the time of product sales as a reduction of net revenue in the accompanying consolidated statements of income. The total costs the Company recognized related...

  • Page 83
    ... XenDesktop, XenApp, and XenMobile products, would enable it to develop a range of differentiated solutions that would have reduced the complexity of Microsoft Windows application delivery and desktop virtualization deployments. Sanbolic became part of the Company's Enterprise and Service Provider...

  • Page 84
    ... in the Enterprise and Service Provider segment and revenue from the Grasshopper acquisition and the other 2015 acquisition is included in the Mobility Apps segment. The Company has included the effect of the 2015 Acquisitions in its results of operations prospectively from the respective dates of...

  • Page 85
    ... delivery of virtual desktops and applications to mobile devices, was combined with HDX technology in the Citrix XenApp and XenDesktop products to deliver an improved user experience under adverse network conditions. Framehawk became part of the Company's Enterprise and Service Provider segment. The...

  • Page 86
    .... The acquisition provides a monitoring solution for Citrix's products as it relates to Microsoft Windows applications and desktop delivery. In connection with this transaction, the Company entered into a three-year contract for outsourced development for the maintenance and roadmap updates of the...

  • Page 87
    ... market data, which require the reporting entity to develop its own assumptions. Available-for-sale securities included in Level 2 are valued utilizing inputs obtained from an independent pricing service (the "Service") which uses quoted market prices for identical or comparable instruments rather...

  • Page 88
    ...A3 and a weighted-average credit rating of AA-/Aa3. The Company values these securities based on pricing from the Service, whose sources may use quoted prices in active markets for identical assets (Level 1 inputs) or inputs other than quoted prices that are observable either directly or indirectly...

  • Page 89
    ... quoted prices in active markets or other observable inputs were not available for these investments, in order to measure them at fair value, the Company utilized a discounted cash flow model using a discount rate reflecting the market risk inherent in holding securities of an early-stage enterprise...

  • Page 90
    ... 2015 ESPP. The Company recorded stock-based compensation costs related to its employee stock purchase plans of $7.6 million, $5.2 million and $4.9 million for the years ended December 31, 2015, 2014 and 2013, respectively. Effective with the Payment Period beginning in July 2015, the purchase price...

  • Page 91
    ... as follows (in thousands): Income Statement Classifications 2015 2014 2013 Cost of services and maintenance revenues Research and development Sales, marketing and services General and administrative Total Non-vested Stock Units Market Performance and Service Condition Stock Units $ 2,940 47,723...

  • Page 92
    ... based on service and, upon vesting, each stock unit represents the right to receive one share of the Company's common stock. Performance Stock Units During 2015, the Company awarded certain senior level employees non-vested performance stock units granted under the 2014 Plan. The number of non...

  • Page 93
    ...compensation cost related to stock options was not material. The total intrinsic value of stock options exercised during 2015, 2014 and 2013 was $23.0 million, $37.1 million and $77.7 million, respectively. Stock Option Valuation Information The Company uses the Black-Scholes option pricing model to...

  • Page 94
    ... over the course of the program was provided by net proceeds from the Convertible Notes offering, as well as proceeds from employee stock option exercises and the related tax benefit. The Company is authorized to make open market purchases of its common stock using general corporate funds through...

  • Page 95
    ... $20.7 million, of which approximately $15.0 million relates to the Company's Santa Clara Office. The calculation of these liabilities requires judgment in estimating the timing of securing subleases for the vacant space, as well as the terms of possible subleases, including the length of the...

  • Page 96
    ..., financial condition, results of operations or cash flows. Due to the nature of the Company's business, the Company is subject to patent infringement claims, including current suits against it or one or more of its wholly-owned subsidiaries alleging infringement by various Company products and...

  • Page 97
    ... 31, 2015, the Company elected to early adopt an accounting standard update on income taxes on a prospective basis. The new authoritative guidance requires deferred tax liabilities and assets along with any related valuation allowance to be classified as noncurrent on the consolidated balance sheet...

  • Page 98
    ... 31, 2014 was primarily due to a change in the combination of income between the Company's U.S. and foreign operations, the decline in reserve for uncertain tax positions, as well as the impact of discrete tax benefits related to the extension of the 2015 federal research and development tax credit...

  • Page 99
    ... paid or incurred after December 31, 2014. Accordingly, the Company recognized $19.2 million of federal research and development credit in the fourth quarter of 2015. 11. SEGMENT INFORMATION The Enterprise and Service Provider the Mobility Apps business units constitute the Company's two reportable...

  • Page 100
    ... FINANCIAL STATEMENTS Net revenues and segment profit for 2015, 2014 and 2013 classified by the Company's reportable segments, are presented below: 2015 2014 (In thousands) 2013 Net revenues: Enterprise and Service Provider Mobility Apps Consolidated Segment profit (1): Enterprise and Services...

  • Page 101
    ... Workspace Services revenues are primarily comprised of sales from the Company's windows app delivery products, which includes XenDesktop and XenApp, and the Company's mobile app delivery products, which include XenMobile and related license updates and maintenance and support. Delivery Networking...

  • Page 102
    ... revenues by segment and geographic location, for the years ended: December 31, 2015 2014 (In thousands) 2013 Net revenues: Enterprise and Service Provider Americas EMEA Asia-Pacific Total Enterprise and Service Provider revenues Mobility Apps Americas EMEA Asia-Pacific Total Mobility Apps revenues...

  • Page 103
    ... annum. The equity component is not remeasured as long as it continues to meet the conditions for equity classification. In accounting for the transaction costs related to the Convertible Note issuance, the Company allocated the total amount incurred to the liability and equity components based on...

  • Page 104
    ...this size and type. The Company was in compliance with these covenants as of December 31, 2015. 14. DERIVATIVE FINANCIAL INSTRUMENTS Derivatives Designated as Hedging Instruments As of December 31, 2015, the Company's derivative assets and liabilities primarily resulted from cash flow hedges related...

  • Page 105
    ... exchange rates when remeasuring the Company's balance sheet, it utilizes foreign exchange forward contracts to hedge its exposure to this potential volatility. These contracts are not designated for hedge accounting treatment under the authoritative guidance. Accordingly, changes in the fair value...

  • Page 106
    ... Hedging Instruments Location of Gain Recognized in Income on Derivative Amount of Gain Recognized in Income on Derivative 2015 2014 Foreign currency forward contracts Outstanding Foreign Currency Forward Contracts Other expense, net $ 1,669 $ 3,551 As of December 31, 2015, the Company had...

  • Page 107
    CITRIX SYSTEMS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 15. EARNINGS PER SHARE The following table sets forth the computation of basic and diluted net income per share (in thousands, except per share information): Year Ended December 31, 2015 2014 2013 Numerator: Net income Denominator: ...

  • Page 108
    ... employee severance, outplacement, professional service fees, and facility closing costs. The Company currently anticipates completing the activities related to the 2015 Other Restructuring Program during the first half of fiscal year 2016. 2015 Restructuring Program On January 28, 2015, the Company...

  • Page 109
    ... costs. Restructuring Charges by Segment Restructuring charges related to the reduction of the Company's headcount by segment consists of the following (in thousands): Year ended December 31, 2015 Year ended December 31, 2014 2014 Restructuring Program Enterprise and Service Provider Mobility Apps...

  • Page 110
    ..., results of operations and cash flows. In April 2015, the Financial Accounting Standards Board issued an accounting standard update on the presentation of debt issuance costs. The new guidance requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet...

  • Page 111
    CITRIX SYSTEMS, INC. SUPPLEMENTAL FINANCIAL INFORMATION QUARTERLY FINANCIAL INFORMATION (UNAUDITED) First Quarter Second Quarter Third Quarter Fourth Quarter Total Year (In thousands, except per share amounts) 2015 Net revenues Gross margin Income from operations Net income Earnings per share - ...

  • Page 112
    CITRIX SYSTEMS, INC. SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS Beginning of Period Charged to Expense Charged to Other Accounts (In thousands) Balance at End of Period Deductions 2015 Deducted from asset accounts: Allowance for doubtful accounts $ 3,791 Allowance for returns 2,185 Valuation ...

  • Page 113
    ... Term Incentive Agreement under the Citrix Systems, Inc. Amended and Restated 2005 Equity Incentive Plan (incorporated by reference to Exhibit 10.13 of the Company's Annual Report on Form 10-K for the year ended December 31, 2014) Amended and Restated 2005 Employee Stock Purchase Plan (incorporated...

  • Page 114
    ... reference to Exhibit 10.3 to the Company's Current Report on Form 8-K filed on April 30, 2014) Credit Agreement, dated as of January 7, 2015, by and among Citrix Systems, Inc., the initial lenders named therein and Bank of America, N.A., as Administrative Agent (incorporated herein by reference to...

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    ... 10.7 to the Company's Quarterly Report on Form 10-Q filed on November 4, 2015) List of Subsidiaries Consent of Independent Registered Public Accounting Firm Power of Attorney (included in signature page) Rule 13a-14(a) / 15d-14(a) Certification of Principal Executive Officer Rule 13a-14(a) / 15d...

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    ... December 31, 2015 Twelve Months Ended December 31, 2014 GAAP earnings per share - diluted Add: stock-based compensation Add: amortization of product related intangible assets Add: amortization of other intangible assets Add: amortization of debt discount Add: separation costs Add: restructuring...

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    ... is described below. Management uses these non-GAAP measures for internal reporting and forecasting purposes, when publicly providing its business outlook, to evaluate the Company's performance and to evaluate and compensate the Company's executives. The Company has provided WKHVHQRQ*$$3ĨQDQFLDO...

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    ..., service providers and strategic partners and the company's reliance on and the success of those partners for the marketing and distribution of our products; our ability to maintain and expand our business in small sized and large enterprise accounts; the size, timing and recognition of revenue...

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    Annual Report 2015 Citrix Systems, Inc. Total Return To Shareholders (Includes reinvestment of dividends) ANNUAL RETURN PERCENTAGE Company Name / Index Citrix Systems, Inc. S&P 500 Index Nasdaq Index Peer Group Dec 11 -11.24 2.11 -0.83 -5.92 Dec 12 8.07 16.00 17.45 19.28 Dec ...

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    Annual Report 2015 Citrix Systems, Inc. CORPORATE INFORMATION Citrix (NASDAQ:CTXS) enables the secure and reliable delivery of applications and data over public, private or hybrid clouds or networks, to virtually any type of device. With annual revenue in 2015 of $3.28 billion, Citrix solutions ...

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