Form 10-Q |
x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 75-2275152 | |
(State or other jurisdiction of incorporation or organization) | (IRS Employer Identification No.) | |
851 West Cypress Creek Road Fort Lauderdale, Florida | 33309 | |
(Address of principal executive offices) | (Zip Code) |
x Large accelerated filer | o Accelerated filer | |
o Non-accelerated filer | o Smaller reporting company |
Page Number | ||
PART I: | ||
Item 1. | ||
Item 2. | ||
Item 3. | ||
Item 4. | ||
PART II: | ||
Item 1. | ||
Item 1A. | ||
Item 2. | ||
Item 5. | ||
Item 6. | ||
March 31, 2016 | December 31, 2015 | ||||||
(Unaudited) | (Derived from audited financial statements) | ||||||
(In thousands, except par value) | |||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 513,306 | $ | 368,518 | |||
Short-term investments, available-for-sale | 642,448 | 502,852 | |||||
Accounts receivable, net of allowances of $6,113 and $7,719 at March 31, 2016 and December 31, 2015, respectively | 450,000 | 669,276 | |||||
Inventories, net | 12,194 | 10,521 | |||||
Prepaid expenses and other current assets | 169,622 | 132,784 | |||||
Total current assets | 1,787,570 | 1,683,951 | |||||
Long-term investments, available-for-sale | 849,490 | 891,964 | |||||
Property and equipment, net | 376,012 | 373,817 | |||||
Goodwill | 1,962,232 | 1,962,722 | |||||
Other intangible assets, net | 281,796 | 283,418 | |||||
Deferred tax assets, net | 205,938 | 215,196 | |||||
Other assets | 55,651 | 56,449 | |||||
Total assets | $ | 5,518,689 | $ | 5,467,517 | |||
Liabilities and Stockholders' Equity | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 85,490 | $ | 95,396 | |||
Accrued expenses and other current liabilities | 310,881 | 317,468 | |||||
Income taxes payable | 18,458 | 18,351 | |||||
Current portion of deferred revenues | 1,209,435 | 1,249,754 | |||||
Total current liabilities | 1,624,264 | 1,680,969 | |||||
Long-term portion of deferred revenues | 412,580 | 414,314 | |||||
Convertible notes | 1,320,240 | 1,311,071 | |||||
Other liabilities | 93,525 | 87,717 | |||||
Commitments and contingencies | |||||||
Stockholders' equity: | |||||||
Preferred stock at $.01 par value: 5,000 shares authorized, none issued and outstanding | — | — | |||||
Common stock at $.001 par value: 1,000,000 shares authorized; 300,698 and 299,113 shares issued and outstanding at March 31, 2016 and December 31, 2015, respectively | 301 | 299 | |||||
Additional paid-in capital | 4,632,163 | 4,566,919 | |||||
Retained earnings | 3,558,088 | 3,474,625 | |||||
Accumulated other comprehensive loss | (21,063 | ) | (28,527 | ) | |||
8,169,489 | 8,013,316 | ||||||
Less - common stock in treasury, at cost (146,151 and 145,296 shares at March 31, 2016 and December 31, 2015, respectively) | (6,101,409 | ) | (6,039,870 | ) | |||
Total stockholders' equity | 2,068,080 | 1,973,446 | |||||
Total liabilities and stockholders' equity | $ | 5,518,689 | $ | 5,467,517 |
Three Months Ended March 31, | |||||||
2016 | 2015 | ||||||
(In thousands, except per share information) | |||||||
Revenues: | |||||||
Product and licenses | $ | 202,205 | $ | 183,281 | |||
Software as a service | 197,848 | 169,364 | |||||
License updates and maintenance | 393,018 | 371,297 | |||||
Professional services | 32,607 | 36,860 | |||||
Total net revenues | 825,678 | 760,802 | |||||
Cost of net revenues: | |||||||
Cost of product and license revenues | 31,395 | 24,684 | |||||
Cost of services and maintenance revenues | 92,582 | 89,190 | |||||
Amortization of product related intangible assets | 15,115 | 18,357 | |||||
Impairment of product related intangible assets | — | 375 | |||||
Total cost of net revenues | 139,092 | 132,606 | |||||
Gross margin | 686,586 | 628,196 | |||||
Operating expenses: | |||||||
Research and development | 123,959 | 144,641 | |||||
Sales, marketing and services | 292,748 | 306,405 | |||||
General and administrative | 90,779 | 82,026 | |||||
Amortization of other intangible assets | 7,394 | 9,441 | |||||
Restructuring | 46,065 | 33,951 | |||||
Separation | 14,687 | — | |||||
Total operating expenses | 575,632 | 576,464 | |||||
Income from operations | 110,954 | 51,732 | |||||
Interest income | 3,751 | 2,834 | |||||
Interest expense | 11,155 | 11,120 | |||||
Other expense, net | (1,003 | ) | (7,849 | ) | |||
Income before income taxes | 102,547 | 35,597 | |||||
Income tax expense | 19,084 | 6,710 | |||||
Net income | $ | 83,463 | $ | 28,887 | |||
Earnings per share: | |||||||
Basic | $ | 0.54 | $ | 0.18 | |||
Diluted | $ | 0.54 | $ | 0.18 | |||
Weighted average shares outstanding: | |||||||
Basic | 154,067 | 160,323 | |||||
Diluted | 155,945 | 162,036 |
Three Months Ended March 31, | |||||||
2016 | 2015 | ||||||
(In thousands) | |||||||
Net income | $ | 83,463 | $ | 28,887 | |||
Other comprehensive income: | |||||||
Available for sale securities: | |||||||
Change in net unrealized gains | 4,099 | 2,194 | |||||
Less: reclassification adjustment for net (gains) losses included in net income | (22 | ) | 68 | ||||
Net change (net of tax effect) | 4,077 | 2,262 | |||||
Cash flow hedges: | |||||||
Change in unrealized gains (losses) | 2,222 | (5,691 | ) | ||||
Less: reclassification adjustment for net losses included in net income | 1,165 | 4,247 | |||||
Net change (net of tax effect) | 3,387 | (1,444 | ) | ||||
Other comprehensive income | 7,464 | 818 | |||||
Comprehensive income | $ | 90,927 | $ | 29,705 |
Three Months Ended | |||||||
2016 | 2015 | ||||||
(In thousands) | |||||||
Operating Activities | |||||||
Net income | $ | 83,463 | $ | 28,887 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation, amortization and other | 70,961 | 74,081 | |||||
Stock-based compensation expense | 42,097 | 34,211 | |||||
Excess tax benefit from stock-based compensation | (5,889 | ) | (1,151 | ) | |||
Deferred income tax expense | 4,830 | 19,013 | |||||
Effects of exchange rate changes on monetary assets and liabilities denominated in foreign currencies | (1,454 | ) | 10,007 | ||||
Other non-cash items | 2,641 | 3,490 | |||||
Total adjustments to reconcile net income to net cash provided by operating activities | 113,186 | 139,651 | |||||
Changes in operating assets and liabilities, net of the effects of acquisitions: | |||||||
Accounts receivable | 219,570 | 231,034 | |||||
Inventories | (2,072 | ) | 319 | ||||
Prepaid expenses and other current assets | (29,115 | ) | (7,313 | ) | |||
Other assets | 750 | (9,185 | ) | ||||
Income taxes, net | 1,602 | (18,954 | ) | ||||
Accounts payable | (14,559 | ) | 1,883 | ||||
Accrued expenses and other current liabilities | 2,919 | (34,405 | ) | ||||
Deferred revenues | (37,402 | ) | (41,840 | ) | |||
Other liabilities | 1,623 | 1,794 | |||||
Total changes in operating assets and liabilities, net of the effects of acquisitions | 143,316 | 123,333 | |||||
Net cash provided by operating activities | 339,965 | 291,871 | |||||
Investing Activities | |||||||
Purchases of available-for-sale investments | (466,718 | ) | (556,484 | ) | |||
Proceeds from sales of available-for-sale investments | 234,242 | 432,908 | |||||
Proceeds from maturities of available-for-sale investments | 139,244 | 161,429 | |||||
Purchases of property and equipment | (41,550 | ) | (44,091 | ) | |||
Cash paid for acquisitions, net of cash acquired | — | (89,467 | ) | ||||
Cash paid for licensing agreements and technology | (24,281 | ) | (2,082 | ) | |||
Other | 1,008 | (737 | ) | ||||
Net cash used in investing activities | (158,055 | ) | (98,524 | ) | |||
Financing Activities | |||||||
Proceeds from issuance of common stock under stock-based compensation plans | 6,024 | 8,413 | |||||
Proceeds from credit facility | — | 95,000 | |||||
Repayment of acquired debt | — | (3,175 | ) | ||||
Excess tax benefit from stock-based compensation | 5,889 | 1,151 | |||||
Stock repurchases, net | (28,689 | ) | (124,928 | ) | |||
Cash paid for tax withholding on vested stock awards | (22,428 | ) | (19,394 | ) | |||
Net cash used in financing activities | (39,204 | ) | (42,933 | ) | |||
Effect of exchange rate changes on cash and cash equivalents | 2,082 | (7,630 | ) | ||||
Change in cash and cash equivalents | 144,788 | 142,784 | |||||
Cash and cash equivalents at beginning of period | 368,518 | 260,149 | |||||
Cash and cash equivalents at end of period | $ | 513,306 | $ | 402,933 |
Three Months Ended | |||||||
March 31, | |||||||
2016 | 2015 | ||||||
Numerator: | |||||||
Net income | $ | 83,463 | $ | 28,887 | |||
Denominator: | |||||||
Denominator for basic earnings per share - weighted-average shares outstanding | 154,067 | 160,323 | |||||
Effect of dilutive employee stock awards | 1,878 | 1,713 | |||||
Denominator for diluted earnings per share - weighted-average shares outstanding | 155,945 | 162,036 | |||||
Basic earnings per share | $ | 0.54 | $ | 0.18 | |||
Diluted earnings per share | $ | 0.54 | $ | 0.18 | |||
Anti-dilutive weighted-average shares from stock awards | 1,202 | 3,651 |
March 31, 2016 | December 31, 2015 | ||||||||||||||||||||||||||||||
Description of the Securities | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | |||||||||||||||||||||||
Agency securities | $ | 540,090 | $ | 1,057 | $ | (193 | ) | $ | 540,954 | $ | 530,981 | $ | 757 | $ | (1,216 | ) | $ | 530,522 | |||||||||||||
Corporate securities | 736,440 | 1,048 | (645 | ) | 736,843 | 699,210 | 90 | (1,929 | ) | 697,371 | |||||||||||||||||||||
Municipal securities | 3,889 | 22 | (1 | ) | 3,910 | 14,872 | 14 | (8 | ) | 14,878 | |||||||||||||||||||||
Government securities | 210,065 | 170 | (4 | ) | 210,231 | 152,376 | 9 | (340 | ) | 152,045 | |||||||||||||||||||||
Total | $ | 1,490,484 | $ | 2,297 | $ | (843 | ) | $ | 1,491,938 | $ | 1,397,439 | $ | 870 | $ | (3,493 | ) | $ | 1,394,816 |
• | Level 1. Observable inputs such as quoted prices in active markets for identical assets or liabilities; |
• | Level 2. Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and |
• | Level 3. Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. |
As of March 31, 2016 | Quoted Prices In Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||
(In thousands) | |||||||||||||||
Assets: | |||||||||||||||
Cash and cash equivalents: | |||||||||||||||
Cash | $ | 235,431 | $ | 235,431 | $ | — | $ | — | |||||||
Money market funds | 270,452 | 270,452 | — | — | |||||||||||
Corporate securities | 7,423 | — | 7,423 | — | |||||||||||
Available-for-sale securities: | |||||||||||||||
Agency securities | 540,954 | — | 540,954 | — | |||||||||||
Corporate securities | 736,843 | — | 735,491 | 1,352 | |||||||||||
Municipal securities | 3,910 | — | 3,910 | — | |||||||||||
Government securities | 210,231 | — | 210,231 | — | |||||||||||
Prepaid expenses and other current assets: | |||||||||||||||
Foreign currency derivatives | 3,836 | — | 3,836 | — | |||||||||||
Total assets | $ | 2,009,080 | $ | 505,883 | $ | 1,501,845 | $ | 1,352 | |||||||
Accrued expenses and other current liabilities: | |||||||||||||||
Foreign currency derivatives | 3,279 | — | 3,279 | — | |||||||||||
Total liabilities | $ | 3,279 | $ | — | $ | 3,279 | $ | — |
As of December 31, 2015 | Quoted Prices In Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||
(In thousands) | |||||||||||||||
Assets: | |||||||||||||||
Cash and cash equivalents: | |||||||||||||||
Cash | $ | 261,962 | $ | 261,962 | $ | — | $ | — | |||||||
Money market funds | 102,968 | 102,968 | — | — | |||||||||||
Corporate securities | 3,588 | — | 3,588 | — | |||||||||||
Available-for-sale securities: | |||||||||||||||
Agency securities | 530,522 | — | 530,522 | — | |||||||||||
Corporate securities | 697,371 | — | 695,809 | 1,562 | |||||||||||
Municipal securities | 14,878 | — | 14,878 | — | |||||||||||
Government securities | 152,045 | — | 152,045 | — | |||||||||||
Prepaid expenses and other current assets: | |||||||||||||||
Foreign currency derivatives | 1,063 | — | 1,063 | — | |||||||||||
Total assets | $ | 1,764,397 | $ | 364,930 | $ | 1,397,905 | $ | 1,562 | |||||||
Accrued expenses and other current liabilities: | |||||||||||||||
Foreign currency derivatives | 3,678 | — | 3,678 | — | |||||||||||
Total liabilities | $ | 3,678 | $ | — | $ | 3,678 | $ | — |
Fair Value | Carrying Value | ||||||
Convertible Senior Notes | $ | 1,564,000 | $ | 1,320,240 |
Three Months Ended | ||
March 31, 2016 | ||
Expected volatility factor | 0.41 | |
Risk free interest rate | 0.35 | % |
Expected dividend yield | 0 | % |
Expected life (in years) | 0.5 |
Three Months Ended | Three Months Ended | ||||||
Income Statement Classifications | March 31, 2016 | March 31, 2015 | |||||
Cost of services and maintenance revenues | $ | 770 | $ | 550 | |||
Research and development | 10,076 | 13,257 | |||||
Sales, marketing and services | 12,390 | 10,696 | |||||
General and administrative | 18,861 | 9,708 | |||||
Total | $ | 42,097 | $ | 34,211 |
March 2016 Grant | January 2016 Grant | March 2015 Grant | ||||
Expected volatility factor | 0.29 - 0.39 | 0.29 - 0.37 | 0.14 - 0.29 | |||
Risk free interest rate | 0.91 | % | 1.10 | % | 0.85 | % |
Expected dividend yield | 0 | % | 0 | % | 0 | % |
Balance at January 1, 2016 | Additions | Other | Balance at March 31, 2016 | ||||||||||||||
Enterprise and Service Provider | $ | 1,581,805 | (1) | $ | — | $ | (490 | ) | (2) | $ | 1,581,315 | ||||||
Mobility Apps | 380,917 | (1) | — | — | 380,917 | ||||||||||||
Consolidated | $ | 1,962,722 | $ | — | $ | (490 | ) | $ | 1,962,232 |
(1) | Beginning balance as of January 1, 2016 adjusted to reflect the Company’s re-alignment of its reporting unit structure. The change resulted in a goodwill reallocation of $86.5 million from the Mobility Apps segment into the Enterprise and Service Provider segment. |
(2) | Amount relates to goodwill associated with the sale of the Company’s CloudPlatform and CloudPortal Business Manager products. See Note 4 for more information regarding the Company's acquisitions and divestitures. |
March 31, 2016 | December 31, 2015 | ||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Gross Carrying Amount | Accumulated Amortization | ||||||||||||
Product related intangible assets | $ | 605,301 | $ | 484,842 | $ | 589,847 | $ | 476,141 | |||||||
Other | 445,693 | 284,356 | 447,816 | 278,104 | |||||||||||
Total | $ | 1,050,994 | $ | 769,198 | $ | 1,037,663 | $ | 754,245 |
Year ending December 31, | Amount | ||
2016 (remaining nine months) | $ | 65,900 | |
2017 | 67,796 | ||
2018 | 59,702 | ||
2019 | 37,690 | ||
2020 | 19,111 | ||
Thereafter | 31,597 | ||
Total | $ | 281,796 |
Three Months Ended | |||||||
March 31, | |||||||
2016 | 2015 | ||||||
Net revenues: | |||||||
Enterprise and Service Provider | $ | 658,773 | $ | 613,125 | |||
Mobility Apps | 166,905 | 147,677 | |||||
Consolidated | $ | 825,678 | $ | 760,802 | |||
Segment profit: | |||||||
Enterprise and Service Provider | $ | 200,445 | $ | 118,456 | |||
Mobility Apps | 35,868 | 28,631 | |||||
Unallocated expenses(1): | |||||||
Amortization and impairment of intangible assets | (22,509 | ) | (28,173 | ) | |||
Stock-based compensation | (42,097 | ) | (34,211 | ) | |||
Restructuring | (46,065 | ) | (33,951 | ) | |||
Separation costs | (14,687 | ) | — | ||||
Other | — | 982 | |||||
Net interest and other expense, net | (8,408 | ) | (16,137 | ) | |||
Consolidated income before income taxes | $ | 102,547 | $ | 35,597 |
(1) | Represents expenses presented to management on a consolidated basis only and not allocated to the operating segments. |
Three Months Ended | |||||||
March 31, | |||||||
2016 | 2015 | ||||||
Net revenues: | |||||||
Enterprise and Service Provider | |||||||
Workspace Services revenues(1) | $ | 400,916 | $ | 389,363 | |||
Delivery Networking revenues(2) | 195,470 | 162,969 | |||||
Cloud Services revenues(3) | 29,732 | 21,777 | |||||
Professional services(4) | 32,607 | 36,860 | |||||
Other | 48 | 2,156 | |||||
Total Enterprise and Service Provider revenues | 658,773 | 613,125 | |||||
Mobility Apps revenues | 166,905 | 147,677 | |||||
Total net revenues | $ | 825,678 | $ | 760,802 |
(1) | Workspace Services revenues are primarily comprised of sales from the Company’s windows app delivery products, which include XenDesktop and XenApp, and the Company's mobile app delivery products, which include XenMobile and related license updates and maintenance and support. |
(2) | Delivery Networking revenues primarily include NetScaler, ByteMobile Smart Capacity and CloudBridge products and related license updates and maintenance and support. |
(3) | Cloud Services revenues primarily include ShareFile, Podio and Citrix Workspace Cloud products. |
(4) | Professional services revenues are primarily comprised of revenues from consulting services and product training and certification services. |
Three Months Ended | |||||||
March 31, | |||||||
2016 | 2015 | ||||||
Net revenues: | |||||||
Enterprise and Service Provider | |||||||
Americas | $ | 388,686 | $ | 339,846 | |||
EMEA | 206,931 | 204,682 | |||||
Asia-Pacific | 63,156 | 68,597 | |||||
Total Enterprise and Service Provider revenues | 658,773 | 613,125 | |||||
Mobility Apps | |||||||
Americas | 140,821 | 122,946 | |||||
EMEA | 21,086 | 19,812 | |||||
Asia-Pacific | 4,998 | 4,919 | |||||
Total Mobility Apps revenues | 166,905 | 147,677 | |||||
Total net revenues | $ | 825,678 | $ | 760,802 |
March 31, 2016 | December 31, 2015 | |||||
Liability component | ||||||
Principal | $ | 1,437,500 | $ | 1,437,500 | ||
Less: note discount and issuance costs | (117,260 | ) | (126,429 | ) | ||
Net carrying amount | 1,320,240 | 1,311,071 | ||||
Equity component * | $ | 162,869 | $ | 162,869 |
Three Months Ended | ||||||
March 31, | ||||||
2016 | 2015 | |||||
Contractual interest expense | $ | 1,797 | $ | 1,797 | ||
Amortization of debt issuance costs | 1,009 | 982 | ||||
Amortization of debt discount | 8,161 | 7,920 | ||||
$ | 10,967 | $ | 10,699 |
Asset Derivatives | Liability Derivatives | ||||||||||||||
(In thousands) | |||||||||||||||
March 31, 2016 | December 31, 2015 | March 31, 2016 | December 31, 2015 | ||||||||||||
Derivatives Designated as Hedging Instruments | Balance Sheet Location | Fair Value | Balance Sheet Location | Fair Value | Balance Sheet Location | Fair Value | Balance Sheet Location | Fair Value | |||||||
Foreign currency forward contracts | Prepaid expenses and other current assets | $2,654 | Prepaid expenses and other current assets | $436 | Accrued expenses and other current liabilities | $1,434 | Accrued expenses and other current liabilities | $2,895 | |||||||
Asset Derivatives | Liability Derivatives | ||||||||||||||
(In thousands) | |||||||||||||||
March 31, 2016 | December 31, 2015 | March 31, 2016 | December 31, 2015 | ||||||||||||
Derivatives Not Designated as Hedging Instruments | Balance Sheet Location | Fair Value | Balance Sheet Location | Fair Value | Balance Sheet Location | Fair Value | Balance Sheet Location | Fair Value | |||||||
Foreign currency forward contracts | Prepaid expenses and other current assets | $1,182 | Prepaid expenses and other current assets | $627 | Accrued expenses and other current liabilities | $1,845 | Accrued expenses and other current liabilities | $783 |
For the Three Months Ended March 31, | |||||||||||||||||
(In thousands) | |||||||||||||||||
Derivatives in Cash Flow Hedging Relationships | Amount of Gain (Loss) Recognized in Other Comprehensive Income (Effective Portion) | Location of Loss Reclassified from Accumulated Other Comprehensive Loss into Income (Effective Portion) | Amount of Loss Reclassified from Accumulated Other Comprehensive Loss (Effective Portion) | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||||
Foreign currency forward contracts | $ | 3,387 | $ | (1,444 | ) | Operating expenses | $ | (1,165 | ) | $ | (4,247 | ) |
For the Three Months Ended March 31, | |||||||||
(In thousands) | |||||||||
Derivatives Not Designated as Hedging Instruments | Location of (Loss) Gain Recognized in Income on Derivative | Amount of (Loss)Gain Recognized in Income on Derivative | |||||||
2016 | 2015 | ||||||||
Foreign currency forward contracts | Other expense, net | $ | (1,973 | ) | $ | 1,636 |
Foreign Currency | Currency Denomination |
Australian Dollar | AUD 3,300 |
Brazilian Real | BRL 5,700 |
Pounds Sterling | GBP 8,567 |
Canadian Dollar | CAD 2,175 |
Chinese Yuan Renminbi | CNY 36,400 |
Danish Krone | DKK 55,575 |
Euro | EUR 6,999 |
Hong Kong Dollar | HKD 36,625 |
Indian Rupee | INR 436,247 |
Japanese Yen | JPY 1,432,644 |
Singapore Dollar | SGD 10,394 |
Swiss Franc | CHF 37,500 |
Foreign currency | Unrealized (loss) gain on available-for-sale securities | Unrealized (loss) gain on derivative instruments | Other comprehensive loss on pension liability | Total | |||||||||||||||
(In thousands) | |||||||||||||||||||
Balance at December 31, 2015 | $ | (16,346 | ) | $ | (2,900 | ) | $ | (2,255 | ) | $ | (7,026 | ) | $ | (28,527 | ) | ||||
Other comprehensive income before reclassifications | — | 4,099 | 2,222 | — | 6,321 | ||||||||||||||
Amounts reclassified from accumulated other comprehensive loss | — | (22 | ) | 1,165 | — | 1,143 | |||||||||||||
Net current period other comprehensive income | — | 4,077 | 3,387 | — | 7,464 | ||||||||||||||
Balance at March 31, 2016 | $ | (16,346 | ) | $ | 1,177 | $ | 1,132 | $ | (7,026 | ) | $ | (21,063 | ) |
For the Three Months Ended March 31, 2016 | ||||||
(In thousands) | ||||||
Details about accumulated other comprehensive loss components | Amount reclassified from accumulated other comprehensive loss, net of tax | Affected line item in the Condensed Consolidated Statements of Income | ||||
Unrealized net gains on available-for-sale securities | $ | (22 | ) | Other expense, net | ||
Unrealized net losses on cash flow hedges | 1,165 | Operating expenses * | ||||
$ | 1,143 |
Three Months Ended March 31, | |||||||
2016 | 2015 | ||||||
2014 Restructuring Program | |||||||
Enterprise and Service Provider | $ | — | $ | 834 | |||
Mobility Apps | — | 50 | |||||
2015 Restructuring Program | |||||||
Enterprise and Service Provider | 7,053 | 32,755 | |||||
Mobility Apps | (79 | ) | 312 | ||||
2015 Other Restructuring Program | |||||||
Enterprise and Service Provider | 38,503 | — | |||||
Mobility Apps | 588 | — | |||||
Total restructuring charges | $ | 46,065 | $ | 33,951 |
2014 Restructuring Program | 2015 Restructuring Program | 2015 Other Restructuring Program | Total | ||||||||||||
Balance at January 1, 2016 | $ | 1,121 | $ | 22,694 | $ | 16,581 | $ | 40,396 | |||||||
Employee severance and related costs | — | 73 | 36,379 | 36,452 | |||||||||||
Consolidation of leased facilities | — | 6,980 | 2,712 | 9,692 | |||||||||||
Payments | — | (3,324 | ) | (36,701 | ) | (40,025 | ) | ||||||||
Reversal of previous charges | — | (79 | ) | — | (79 | ) | |||||||||
Balance at March 31, 2016 | $ | 1,121 | $ | 26,344 | $ | 18,971 | $ | 46,436 |
ITEM 2. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
• | Product and licenses revenue increased 10.3% to $202.2 million; |
• | Software as a service revenue increased 16.8% to $197.8 million; |
• | License updates and maintenance revenue increased 5.9% to $393.0 million; |
• | Professional services revenue decreased 11.5% to $32.6 million; |
• | Gross margin as a percentage of revenue increased 0.6% to 83.2%; |
• | Operating income increased 114.5% to $111.0 million; and |
• | Diluted net income per share increased 200.0% to $0.54. |
Three Months Ended | Three Months Ended | |||||||||
March 31, | March 31, 2016 | |||||||||
2016 | 2015 | vs. March 31, 2015 | ||||||||
Revenues: | ||||||||||
Product and licenses | $ | 202,205 | $ | 183,281 | 10.3 | % | ||||
Software as a service | 197,848 | 169,364 | 16.8 | |||||||
License updates and maintenance | 393,018 | 371,297 | 5.9 | |||||||
Professional services | 32,607 | 36,860 | (11.5 | ) | ||||||
Total net revenues | 825,678 | 760,802 | 8.5 | |||||||
Cost of net revenues: | ||||||||||
Cost of product and license revenues | 31,395 | 24,684 | 27.2 | |||||||
Cost of services and maintenance revenues | 92,582 | 89,190 | 3.8 | |||||||
Amortization of product related intangible assets | 15,115 | 18,357 | (17.7 | ) | ||||||
Impairment of product related intangible assets | — | 375 | (100.0 | ) | ||||||
Total cost of net revenues | 139,092 | 132,606 | 4.9 | |||||||
Gross margin | 686,586 | 628,196 | 9.3 | |||||||
Operating expenses: | ||||||||||
Research and development | 123,959 | 144,641 | (14.3 | ) | ||||||
Sales, marketing and services | 292,748 | 306,405 | (4.5 | ) | ||||||
General and administrative | 90,779 | 82,026 | 10.7 | |||||||
Amortization of other intangible assets | 7,394 | 9,441 | (21.7 | ) | ||||||
Restructuring | 46,065 | 33,951 | 35.7 | |||||||
Separation | 14,687 | — | * | |||||||
Total operating expenses | 575,632 | 576,464 | (0.1 | ) | ||||||
Income from operations | 110,954 | 51,732 | 114.5 | |||||||
Interest income | 3,751 | 2,834 | 32.4 | |||||||
Interest expense | 11,155 | 11,120 | 0.3 | |||||||
Other expense, net | (1,003 | ) | (7,849 | ) | (87.2 | ) | ||||
Income before income taxes | 102,547 | 35,597 | 188.1 | |||||||
Income tax expense | 19,084 | 6,710 | 184.4 | |||||||
Net income | $ | 83,463 | $ | 28,887 | 188.9 |
* | not meaningful |
• | Workspace Services is primarily comprised of our Windows App Delivery products which include XenDesktop and XenApp, our Mobile 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. The fees from the CSP program are recognized based on usage and as the CSP services are provided to their end users. |
• | Our Subscription Advantage program, an annual renewable program that provides subscribers with automatic delivery of unspecified software upgrades, enhancements and maintenance releases when and if they become available during the term of the subscription, for which fees are recognized ratably over the term of the contract, which is typically 12 to 24 months; and |
• | Our maintenance fees, which include technical support and hardware and software maintenance, and which are recognized ratably over the contract term; and |
• | Fees from consulting services related to implementation of our products, which are recognized as the services are provided; and |
• | Fees from product training and certification, which are recognized as the services are provided. |
• | Communications Cloud products, which primarily include GoToMeeting, GoToWebinar, GoToTraining and Grasshopper; and |
• | Workflow Cloud products, which primarily include GoToMyPC and GoToAssist; and |
• | Cloud Services products, which primarily include ShareFile. |
Three Months Ended | Three Months Ended | ||||||||||
March 31, | March 31, 2016 | ||||||||||
2016 | 2015 | vs. March 31, 2015 | |||||||||
(In thousands) | |||||||||||
Product and licenses | $ | 202,205 | $ | 183,281 | $ | 18,924 | |||||
Software as a service | 197,848 | 169,364 | 28,484 | ||||||||
License updates and maintenance | 393,018 | 371,297 | 21,721 | ||||||||
Professional services | 32,607 | 36,860 | (4,253 | ) | |||||||
Total net revenues | $ | 825,678 | $ | 760,802 | $ | 64,876 |
Three Months Ended | Three Months Ended | |||||||||
March 31, | March 31, 2016 | |||||||||
2016 | 2015 | vs. March 31, 2015 | ||||||||
Enterprise and Service Provider | $ | 658,773 | $ | 613,125 | 7.4 | % | ||||
Mobility Apps | 166,905 | 147,677 | 13.0 | % | ||||||
Net revenues | $ | 825,678 | $ | 760,802 | 8.5 | % |
Three Months Ended | Three Months Ended | ||||||||||
March 31, | March 31, 2016 | ||||||||||
2016 | 2015 | vs. March 31, 2015 | |||||||||
(In thousands) | |||||||||||
Cost of product and license revenues | $ | 31,395 | $ | 24,684 | $ | 6,711 | |||||
Cost of services and maintenance revenues | 92,582 | 89,190 | 3,392 | ||||||||
Amortization of product related intangible assets | 15,115 | 18,357 | (3,242 | ) | |||||||
Impairment of product related intangible assets | — | 375 | (375 | ) | |||||||
Total cost of net revenues | $ | 139,092 | $ | 132,606 | $ | 6,486 |
Three Months Ended | Three Months Ended | ||||||||||
March 31, | March 31, 2016 | ||||||||||
2016 | 2015 | vs. March 31, 2015 | |||||||||
(In thousands) | |||||||||||
Research and development | $ | 123,959 | $ | 144,641 | $ | (20,682 | ) |
Three Months Ended | Three Months Ended | ||||||||||
March 31, | March 31, 2016 | ||||||||||
2016 | 2015 | vs. March 31, 2015 | |||||||||
(In thousands) | |||||||||||
Sales, marketing and services | $ | 292,748 | $ | 306,405 | $ | (13,657 | ) |
Three Months Ended | Three Months Ended | ||||||||||
March 31, | March 31, 2016 | ||||||||||
2016 | 2015 | vs. March 31, 2015 | |||||||||
(In thousands) | |||||||||||
General and administrative | $ | 90,779 | $ | 82,026 | $ | 8,753 |
Three Months Ended | Three Months Ended | ||||||||||
March 31, | March 31, 2016 | ||||||||||
2016 | 2015 | vs. March 31, 2015 | |||||||||
(In thousands) | |||||||||||
Amortization of Other Intangible Assets | $ | 7,394 | $ | 9,441 | $ | (2,047 | ) |
Three Months Ended | Three Months Ended | ||||||||||
March 31, | March 31, 2016 | ||||||||||
2016 | 2015 | vs. March 31, 2015 | |||||||||
(In thousands) | |||||||||||
Restructuring | $ | 46,065 | $ | 33,951 | $ | 12,114 |
Three Months Ended | Three Months Ended | ||||||||||
March 31, | March 31, 2016 | ||||||||||
2016 | 2015 | vs. March 31, 2015 | |||||||||
(In thousands) | |||||||||||
Separation | $ | 14,687 | $ | — | $ | 14,687 |
Three Months Ended | Three Months Ended | |||||||||||
March 31, | March 31, 2016 | |||||||||||
2016 | 2015 | vs. March 31, 2015 | ||||||||||
(In thousands) | ||||||||||||
Other expense, net | $ | (1,003 | ) | $ | (7,849 | ) | $ | 6,846 |
March 31, 2016 | December 31, 2015 | 2016 Compared to 2015 | |||||||||
(In thousands) | |||||||||||
Cash, cash equivalents and investments | $ | 2,005,244 | $ | 1,763,334 | $ | 241,910 |
• | Level 1. Observable inputs such as quoted prices in active markets for identical assets or liabilities; |
• | Level 2. Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and |
• | Level 3. Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. |
March 31, 2016 | December 31, 2015 | 2016 Compared to 2015 | |||||||||
(In thousands) | |||||||||||
Accounts receivable | $ | 456,113 | $ | 676,995 | $ | (220,882 | ) | ||||
Allowance for returns | (1,031 | ) | (1,438 | ) | 407 | ||||||
Allowance for doubtful accounts | (5,082 | ) | (6,281 | ) | 1,199 | ||||||
Accounts receivable, net | $ | 450,000 | $ | 669,276 | $ | (219,276 | ) |
ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
ITEM 4. | CONTROLS AND PROCEDURES |
ITEM 1. | LEGAL PROCEEDINGS |
ITEM 1A. | RISK FACTORS |
ITEM 2. | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS |
Total Number of Shares (or Units) Purchased (1) | Average Price Paid per Share (or Unit) | Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs | Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs (In thousands) (2) | ||||||||||
January 1, 2016 through January 31, 2016 | 15,583 | $ | 72.79 | — | $ | 432,695 | |||||||
February 1, 2016 through February 29, 2016 | 447,825 | 67.49 | 426,300 | 404,006 | |||||||||
March 1, 2016 through March 31, 2016 | 391,730 | 77.05 | — | 404,006 | |||||||||
Total | 855,138 | 426,300 | 404,006 |
(1) | Represents shares acquired in open market purchases and 428,838 shares withheld from stock units that vested in the first quarter of 2016 to satisfy minimum tax withholding obligations that arose on the vesting of stock units. We expended approximately $28.7 million during the quarter ended March 31, 2016 for repurchases of our common stock. For more information see Note 15 to our condensed consolidated financial statements. |
(2) | Shares withheld from stock units that vested to satisfy minimum tax withholding obligations that arose on the vesting of stock units do not deplete the dollar amount available for purchases under the repurchase program. |
ITEM 5. | OTHER INFORMATION |
ITEM 6. | EXHIBITS |
(a) | List of exhibits |
Exhibit No. | Description | |
10.1* | Employment Agreement, dated January 19, 2016, by and between Citrix Systems, Inc. and Kirill Tatarinov (incorporated herein by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed January 20, 2016) | |
10.2* | Employment Agreement, dated February 16, 2016, by and between Citrix Systems, Inc. and Christopher Hylen | |
10.3* | Amended and Restated Incentive Agreement, dated February 16, 2016, by and between Citrix Systems, Inc. and Christopher Hylen | |
10.4* | Restricted Stock Award Agreement under the Citrix Systems, Inc. 2014 Equity Incentive Plan for Robert M. Calderoni | |
10.5* | Restricted Stock Award Agreement under the Citrix Systems, Inc. 2014 Equity Incentive Plan for Kirill Tatarinov | |
10.6* | Restricted Stock Unit Agreement under the Citrix Systems, Inc. 2014 Equity Incentive Plan for Kirill Tatarinov (2016 Performance-Based Awards) | |
10.7* | Form of Restricted Stock Unit Agreement under the Citrix Systems, Inc. 2014 Equity Incentive Plan (2016 Performance-Based Awards) | |
31.1 | Rule 13a-14(a) / 15d-14(a) Certification of Principal Executive Officer | |
31.2 | Rule 13a-14(a) / 15d-14(a) Certification of Principal Financial Officer | |
32.1† | Section 1350 Certification of Principal Executive Officer and Principal Financial Officer | |
101.INS | XBRL Instance Document | |
101.SCH | XBRL Taxonomy Extension Schema Document | |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | |
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | |
101.LAB | XBRL Taxonomy Extension Label Linkbase Document | |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document | |
* | Indicates a management contract or a compensatory plan, contract or arrangement. |
† | Furnished herewith. |
CITRIX SYSTEMS, INC. | ||
By: | /s/ DAVID J. HENSHALL | |
David J. Henshall | ||
Executive Vice President, Chief Operating Officer and Chief Financial Officer | ||
(Authorized Officer and Principal Financial Officer) |
Exhibit No. | Description | |
10.1* | Employment Agreement, dated January 19, 2016, by and between Citrix Systems, Inc. and Kirill Tatarinov (incorporated herein by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed January 20, 2016) | |
10.2* | Employment Agreement, dated February 16, 2016, by and between Citrix Systems, Inc. and Christopher Hylen | |
10.3* | Amended and Restated Incentive Agreement, dated February 16, 2016, by and between Citrix Systems, Inc. and Christopher Hylen | |
10.4* | Restricted Stock Award Agreement under the Citrix Systems, Inc. 2014 Equity Incentive Plan for Robert M. Calderoni | |
10.5* | Restricted Stock Award Agreement under the Citrix Systems, Inc. 2014 Equity Incentive Plan for Kirill Tatarinov | |
10.6* | Restricted Stock Unit Agreement under the Citrix Systems, Inc. 2014 Equity Incentive Plan for Kirill Tatarinov (2016 Performance-Based Awards) | |
10.7* | Form of Restricted Stock Unit Agreement under the Citrix Systems, Inc. 2014 Equity Incentive Plan (2016 Performance-Based Awards) | |
31.2 | Rule 13a-14(a) / 15d-14(a) Certification of Principal Financial Officer | |
32.1† | Section 1350 Certification of Principal Executive Officer and Principal Financial Officer | |
101.INS | XBRL Instance Document | |
101.SCH | XBRL Taxonomy Extension Schema Document | |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | |
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | |
101.LAB | XBRL Taxonomy Extension Label Linkbase Document | |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document | |
* | Indicates a management contract or a compensatory plan, contract or arrangement. |
† | Furnished herewith. |
• | relating to my employment by the Company and my separation from employment; |
• | of wrongful discharge; |
• | of breach of contract; |
• | of retaliation or discrimination under federal, state or local law (including, without limitation, Claims of age discrimination or retaliation under the Age Discrimination in Employment Act, Claims of disability discrimination or retaliation under the Americans with Disabilities Act, Claims of discrimination or retaliation under Title VII of the Civil Rights Act of 1964 and Claims of any form of discrimination or retaliation that is prohibited by the California Unruh Act or the law of any other state); |
• | under any other federal or state statute; |
• | of defamation or other torts; |
• | of violation of public policy; |
• | for wages, bonuses, incentive compensation, vacation pay or any other compensation or benefits; and |
• | for damages or other remedies of any sort, including, without limitation, compensatory damages, punitive damages, injunctive relief and attorney’s fees; |
By: | ||
Christopher Hylen | Name: | |
Title: |
Date: | ||||
Christopher Hylen |
Date: | By: | |||
Title | ||||
By: | /s/ Robert Calderoni | |
Robert Calderoni | ||
Executive Chairman | ||
/s/ Christopher Hylen | ||
Executive | ||
• | Number of Time-Based RSUs: 20,000 (grant date of Sept. 1, 2015) |
• | Vesting of Time-Based RSUs: Subject to the terms of the applicable award agreement, the Executive shall become vested in the time-based RSUs included in the Special Equity Grant if the Executive remains employed with the Company in a full‑time capacity on each of the following dates: |
◦ | 50% of the time-based RSUs shall vest on April 1, 2016; and |
◦ | 50% of the time-based RSUs shall vest on October 1, 2016. |
• | Number of Performance-Based RSUs: 20,000 (grant date of Oct. 1, 2015) |
• | Vesting of Performance-Based RSUs: Subject to the terms of the applicable award agreement, the Executive shall become vested in the performance-based RSUs included in the Special Equity Grant based on the Company, business unit, function and/or the Executive’s individual performance during the Performance Period identified below, and conditioned upon the Executive remaining employed with the Company in a full‑time capacity through the end of the Performance Period: |
◦ | Performance Metrics: One or more performance metrics of either the Company as a whole or any business unit or function or individual performance objectives to be determined by the Committee following the Board of Directors’ review of the recommendation of the Operations Committee of the Board |
◦ |
◦ | Performance Period: The measurement period approved by the Committee when it establishes the performance metrics referenced above |
• | relating to my employment by the Company and my separation from employment; |
• | of wrongful discharge; |
• | of breach of contract; |
• | of retaliation or discrimination under federal, state or local law (including, without limitation, Claims of age discrimination or retaliation under the Age Discrimination in Employment Act, Claims of disability discrimination or retaliation under the Americans with Disabilities Act, Claims of discrimination or retaliation under Title VII of the Civil Rights Act of 1964 and Claims of any form of discrimination or retaliation that is prohibited by the California Unruh Act or the law of any other state); |
• | under any other federal or state statute; |
• | of defamation or other torts; |
• | of violation of public policy; |
• | for wages, bonuses, incentive compensation, vacation pay or any other compensation or benefits; and |
• | for damages or other remedies of any sort, including, without limitation, compensatory damages, punitive damages, injunctive relief and attorney’s fees; |
i) | the Restricted Shares and any other shares of Stock acquired under the Plan, and the income and value of same, are not intended to replace any pension rights or compensation; |
ii) | Restricted Shares, and the related income and value of same, are extraordinary items that do not constitute compensation of any kind for services of any kind rendered to the Company or to the Employer and are outside the scope of Awardee’s employment contract, if any; |
iii) | no claim or entitlement to compensation or damages shall arise from forfeiture of the Restricted Shares resulting from termination of Awardee’s employment or service by the Company or the Employer (whether or not in breach of local labor laws) and in consideration of the grant of the Restricted Shares to which Awardee is otherwise not entitled, Awardee irrevocably agrees never to institute any claim against the Company or any Affiliate, waives his or her ability, if any, to bring any such claim and releases the Company and any Affiliate from any such claim, if, notwithstanding the foregoing, any such claim is allowed by a court of competent jurisdiction, then, by participating in the Plan, Awardee shall be deemed to have agreed not to pursue such claim and agrees to execute any and all documents necessary to request dismissal or withdrawal of such claims; and |
iv) | neither the Employer, the Company nor its Affiliates shall be liable for any foreign exchange rate fluctuation between Awardee’s local currency and the United States Dollar that may affect the value of the Award or any amounts received upon the sale of any shares of Stock acquired under the Plan or the receipt of any dividends or dividend equivalents. |
Annualized TSR Percentage | |||||||
Negative | 0-4.99% | 5% | 10% | 20% | 30% | ||
Relative TSR Percentile | Less than 60th Percentile | 0% | 0% | 50% | 100% | 150% | 200% |
60th to 74.9th Percentile | 25% | 50% | 75% | 100% | 150% | 200% | |
75th to 84.9th Percentile | 50% | 75% | 100% | 100% | 150% | 200% | |
85th Percentile or higher | 75% | 100% | 100% | 100% | 150% | 200% |
where: | “P” represents the percentile performance calculated to the first decimal. |
Annualized TSR Percentage | |||||||
Negative | 0-4.99% | 5% | 10% | 20% | 30% | ||
Relative TSR Percentile | Less than 60th Percentile | 0% | 0% | 50% | 100% | 150% | 200% |
60th to 74.9th Percentile | 25% | 50% | 75% | 100% | 150% | 200% | |
75th to 84.9th Percentile | 50% | 75% | 100% | 100% | 150% | 200% | |
85th Percentile or higher | 75% | 100% | 100% | 100% | 150% | 200% |
where: | “P” represents the percentile performance calculated to the first decimal. |
ARBEJDSGIVERERKLÆRING Såfremt § 3, stk. 1, i lov om brug af køberet eller tegningsret m.v. i ansættelsesforhold (“Aktieoptionsloven”) omfatter din tildeling, er du berettiget til i en særskilt skriftlig erklæring at modtage følgende oplysninger om Citrix Systems, Inc.’s (“Selskabets”) aktieoptionsordning. Denne erklæring indeholder kun de oplysninger, der er nævnt i Aktieoptionsloven, mens de øvrige vilkår og betingelser for din tildeling er nærmere beskrevet i 2014 Equity Incentive Plan (“Ordningen”) og i Global Restricted Stock Unit Agreement (på dansk “Betinget Aktieoptionsaftale for deltagere uden for USA”) (“Aftalen”), som du har fået udleveret. 1.Tidspunkt for tildeling af retten til at købe aktier. Tidspunktet for tildelingen er den dato, hvor Selskabets bestyrelses Vederlagsudvalg (“Udvalget”) godkendte tildelingen til dig og besluttede, at tildelingen skulle træde i kraft. 2. Kriterier og betingelser for tildeling af retten til senere at købe aktier Tildelingen af betingede aktieoptioner sker efter Udvalgets eget skøn. Ordningen samt de under Ordningen tildelte betingede aktieoptioner har til formål at hjælpe Selskabet og dets datterselskabet med at tiltrække samt fastholde det bedst mulige personale til stillinger, der indebærer betydeligt ansvar, for derved at give yderligere incitament til sådanne personer samt styrke Selskabets forretningsmæssige fremgang. Udvalget kan frit vælge ikke at tildele dig betingede aktieoptioner fremover. I henhold til bestemmelserne i Ordningen og Aftalen har du ikke nogen ret til eller noget krav på fremover at få tildelt betingede optioner. 3. Modningstidspunkt eller -periode Dine betingede aktieoptioner modnes over en periode, forudsat at du fortsat er ansat i eller arbejder for Selskabet eller en tilknyttet virksomhed, medmindre optionen er modnet eller bortfaldet på et tidligere tidspunkt af de i Ordningen anførte årsager og med forbehold for pkt. 5 i denne erklæring. 4.Udnyttelseskurs Der skal ikke betales nogen udnyttelseskurs ved modning af tildelingen og udstedelsen af aktier til dig. | EMPLOYER STATEMENT If Section 3(1) of the Act on Stock Options in employment relations (the “Stock Option Act”) applies to your award, you are entitled to receive the following information regarding Citrix Systems, Inc.’s (the “Company”) stock option program in a separate written statement. This statement contains only the information mentioned in the Act while the other terms and conditions of your award are described in detail in the 2014 Equity Incentive Plan (the “Plan”) and the Global Restricted Stock Unit Agreement (the “Agreement”), which have been given to you. . 1. Grant of right to purchase stock The grant date for your award is the date that the Compensation Committee of the Board of Directors (the “Committee”) approved a grant for you and determined it would be effective. 2. Terms or conditions for grant of rights to purchase of stock The awards will be at the sole discretion of the Committee. The Plan and the award granted under the Plan are intended to help the Company and its affiliates attract and retain the best available personnel for positions of substantial responsibility, to provide additional incentive to such individuals and to promote the success of the Company’s business. The Committee may decide, in its sole discretion, not to make any award to you in the future. Under the terms of the Plan and the Agreement, you have no entitlement or claim to receive future awards. 3. Vesting date or period Your award shall vest over a period time, provided you remain employed by or in the service of the Company or an affiliate, unless your award has vested or has terminated earlier for the reasons set forth in the Plan and subject to Section 5 of this statement. 4. Exercise price No exercise price is payable upon the vesting of the award and the issuance of shares of stock to you. |
5. Din retsstilling i forbindelse med ansættelsesforholdets ophør Såfremt din tildeling af betingede aktier er omfattet af bestemmelserne i Aktieoptionsloven, vil din tildeling i tilfælde af din fratræden blive behandlet i overensstemmelse med Aktieoptionslovens §§ 4 og 5, medmindre bestemmelserne i Aftalen er mere fordelagtige for dig end Aktieoptionslovens §§ 4 og 5. Såfremt vilkårene i Aftalen er mere fordelagtige for dig, vil det være disse vilkår, der er gældende for, hvordan din tildeling behandles i forbindelse med din fratræden. 6. Økonomiske aspekter ved at deltage i Ordningen Tildelingen af betingede aktieoptioner har ingen umiddelbare økonomiske konsekvenser for dig. Værdien af tildelingen indgår ikke i beregningen af feriepenge, pensionsbidrag eller andre lovpligtige, vederlagsafhængige ydelser. Aktier er finansielle instrumenter, og investering i aktier vil altid være forbundet med en finansiel risiko. Muligheden for at opnå en gevinst på modningstidspunktet afhænger ikke alene af Selskabets økonomiske udvikling, men også af, blandt andet, den generelle udvikling på aktiemarkedet. CITRIX SYSTEMS, INC. U.S.A. | 5. Your rights upon Termination of Employment If the terms of the Stock Option Act are applicable to the award, the treatment of the award upon termination of employment will be determined under Sections 4 and 5 of the Stock Option Act unless the terms contained in the Agreement are more favorable to you than Sections 4 and 5 of the Stock Option Act. If the terms contained the Agreement are more favorable to you, then such terms will govern the treatment of the award upon termination of employment. 6. Financial aspects of participating in the Plan The award has no immediate financial consequences for you. The value of the award is not taken into account when calculating holiday allowances, pension contributions or other statutory consideration calculated on the basis of salary. Shares of stock are financial instruments and investing in stocks will always have financial risk. The possibility of profit at the time of vesting will not only be dependent on the Company’s financial development, but also on the general development on the stock market, inter alia. CITRIX SYSTEMS, INC. U.S.A. |
Awardee hereby explicitly, voluntarily and unambiguously consents to the collection, use and transfer, in electronic or other form, of his or her personal data as described in this Award Agreement and any other Plan participation materials by and among, as applicable, the Employer, the Company and any Affiliates or any third parties authorized by same in assisting in the implementation, administration and management of Awardee’s participation in the Plan. Awardee may have previously provided the Company and the Employer with, and the Company and the Employer may hold, certain personal information about Awardee, including, but not limited to, his or her name, home address and telephone number, date of birth, social insurance number or other identification number, salary, nationality, job title, any shares of stock or directorships held in the Company, the fact and conditions of Awardee’s participation in the Plan, details of all Restricted Stock Units or any other entitlement to shares of stock awarded, cancelled, exercised, vested, unvested or outstanding in Awardee’s favor (“Data”), for the exclusive purpose of implementing, administering and managing the Plan. Awardee also authorizes any transfer of Data, as may be required, to Fidelity Stock Plan Services, LLC or such other stock plan service provider as may be selected by the Company from time to time, which is assisting the Company with the implementation, administration and management of the Plan and/or with whom any shares of Stock acquired upon vesting and settlement of the Restricted Stock Units are deposited. Awardee acknowledges that these recipients may be located in Awardee’s country or elsewhere, and that the recipient’s country (e.g., the United States) may have different data privacy laws and protections to Awardee’s country, which may not give the same level of protection to Data. Awardee understands that he or she may request a list with the names and addresses of any potential recipients of Data by contacting his or her local human resources representative. Awardee authorizes the Company, the stock plan service provider and any other possible recipients which may assist the Company (presently or in the future) with implementing, administering and managing Awardee’s participation in the Plan to receive, possess, use, retain and transfer Data, in electronic or other form, for the sole purpose of implementing, administering and managing Awardee’s participation in the Plan. Awardee understands that Data will be held only as long as is necessary to implement, administer and manage his or her participation in the Plan. | Penerima Anugerah dengan ini secara eksplicit, secara sukarela dan tanpa sebarang keraguan mengizinkan pengumpulan, penggunaan dan pemindahan, dalam bentuk elektronik atau lain-lain, data peribadinya seperti yang dinyatakan dalam Perjanjian Penganugerahan ini dan apa-apa bahan penyertaan Pelan oleh dan di antara, sebagaimana yang berkenaan, Majikan, Syarikat dan Syarikat Sekutu atau mana-mana pihak ketiga yang diberi kuasa oleh yang sama untuk membantu dalam pelaksanaan, pentadbiran dan pengurusan penyertaan Penerima Anugerah dalam Pelan tersebut. Sebelum ini, Penerima Anugerah mungkin telah membekalkan Syarikat dan Majikan dengan, dan Syarikat dan Majikan mungkin memegang, maklumat peribadi tertentu tentang Penerima Anugerah, termasuk, tetapi tidak terhad kepada, namanya, alamat rumah dan nombor telefon, tarikh lahir, nombor insurans sosial atau nombor pengenalan lain, gaji, kewarganegaraan, jawatan, apa-apa syer dalam saham atau jawatan pengarah yang dipegang dalam Syarikat, fakta dan syarat-syarat penyertaan Penerima Anugerah dalam Pelan tersebut, butir-butir semua Unit Saham Terbatas atau apa-apa hak lain untuk syer dalam saham yang dianugerahkan, dibatalkan, dilaksanakan, terletak hak, tidak diletak hak ataupun bagi faedah Penerima Anugerah (“Data”), untuk tujuan yang eksklusif bagi melaksanakan, mentadbir dan menguruskan Pelan tersebut. Penerima Anugerah juga memberi kuasa untuk membuat apa-apa pemindahan Data, sebagaimana yang diperlukan, kepada Fidelity Stock Plan Services, LLC atau pembekal perkhidmatan pelan saham yang lain sebagaimana yang dipilih oleh Syarikat dari semasa ke semasa, yang membantu Syarikat dalam pelaksanaan, pentadbiran dan pengurusan Pelan tersebut dan/atau dengan sesiapa yang mendepositkan syer-syer Saham yang diperolehi melalui pemberian hak dan penyelesaian Unit-unit Saham Terbatas. Penerima Anugerah mengakui bahawa penerima-penerima ini mungkin berada di negara Penerima Anugerah atau di tempat lain, dan bahawa negara penerima (contohnya, Amerika Syarikat) mungkin mempunyai undang-undang privasi data dan perlindungan yang berbeza daripada negara Penerima Anugerah, yang mungkin tidak boleh memberi tahap perlindungan yang sama kepada Data. Penerima Anugerah faham bahawa dia boleh meminta senarai nama dan alamat mana-mana penerima Data dengan menghubungi wakil sumber manusia tempatannya. Penerima Anugerah memberi kuasa kepada Syarikat, pembekal perkhidmatan pelan saham dan mana-mana penerima lain yang mungkin membantu Syarikat (masa sekarang atau pada masa depan) untuk melaksanakan, mentadbir dan menguruskan penyertaan Penerima Anugerah dalam Pelan tersebut untuk menerima, memiliki, menggunakan, mengekalkan dan memindahkan Data, dalam bentuk elektronik atau lain-lain, semata-mata dengan tujuan untuk melaksanakan, mentadbir dan menguruskan penyertaannyadalam Pelan tersebut. Penerima Anugerah faham bahawa Data akan dipegang hanya untuk tempoh yang diperlukan untuk melaksanakan, mentadbir dan menguruskan penyertaannya dalam Pelan tersebut. |
Awardee understands that Data will be held only as long as is necessary to implement, administer and manage his or her participation in the Plan. Awardee understands that he or she may, at any time, view Data, request additional information about the storage and processing of Data, require any necessary amendments to Data or refuse or withdraw the consents herein, in any case, without cost, by contacting in writing his or her local human resources representative, whose contact details are Peh Soo Lin, soolin.peh@citrix.com, tel number : +65 67255310. Further, Awardee understands that he or she is providing the consents herein on a purely voluntary basis. If Awardee does not consent, or if Awardee later seeks to revoke the consent, his or her employment status or service and career with the Employer will not be adversely affected; the only adverse consequence of refusing or withdrawing the consent is that the Company would not be able to grant future Restricted Stock Units or other equity awards to Awardee or administer or maintain such awards. Therefore, Awardee understands that refusing or withdrawing his or her consent may affect his or her ability to participate in the Plan. For more information on the consequences of the refusal to consent or withdrawal of consent, Awardee understands that he or she may contact his or her local human resources representative. | Penerima Anugerah faham bahawa Data akan dipegang hanya untuk tempoh yang diperlukan untuk melaksanakan, mentadbir dan menguruskan penyertaannya dalam Pelan tersebut. Penerima Anugerah faham bahawa dia boleh, pada bila-bila masa, melihat data, meminta maklumat tambahan mengenai penyimpanan dan pemprosesan Data, meminta bahawa pindaan-pindaan dilaksanakan ke atas Data atau menolak atau menarik balik persetujuan dalam ini, dalam mana-mana kes, tanpa kos, dengan menghubungi secara bertulis wakil sumber manusia tempatannya , di mana butir-butir hubungannya adalah Peh Soo Lin, soolin.peh@citrix.com, tel number +65 67255310. Selanjutnya, Penerima Anugerah memahami bahawa dia memberikan persetujuan di sini secara sukarela. Jika Penerima Anugerah tidak bersetuju, atau jika Penerima Anugerah kemudian membatalkan persetujuannya , status pekerjaan atau perkhidmatan dan kerjayanya dengan Majikan tidak akan terjejas; satunya akibat buruk jika dia tidak bersetuju atau menarik balik persetujuannya adalah bahawa Syarikat tidak akan dapat memberikanUnit-unit Saham Terbatas pada masa depan atau anugerah ekuiti lain kepada Penerima Anugerah atau mentadbir atau mengekalkan anugerah tersebut. Oleh itu, Penerima Anugerah faham bahawa keengganan atau penarikan balik persetujuannya boleh menjejaskan keupayaannya untuk mengambil bahagian dalam Pelan tersebut. Untuk maklumat lanjut mengenai akibat keengganannya untuk memberikan keizinan atau penarikan balik keizinan, Penerima Anugerah fahami bahawa dia boleh menghubungi wakil sumber manusia tempatannya . |
1. | I have reviewed this quarterly report on Form 10-Q of Citrix Systems, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
By: | /s/ KIRILL TATARINOV | |
Kirill Tatarinov | ||
President and Chief Executive Officer | ||
(Principal Executive Officer) |
1. | I have reviewed this quarterly report on Form 10-Q of Citrix Systems, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
By: | /s/ DAVID J. HENSHALL | |
David J. Henshall | ||
Executive Vice President, Chief Operating | ||
Officer and Chief Financial Officer | ||
(Principal Financial Officer) |
(1) | The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
By: | /s/ KIRILL TATARINOV | |
Kirill Tatarinov | ||
President and Chief Executive Officer | ||
(Principal Executive Officer) | ||
By: | /s/ DAVID J. HENSHALL | |
David J. Henshall | ||
Executive Vice President, Chief Operating Officer and Chief Financial Officer | ||
(Principal Financial Officer) | ||
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Document And Entity Information - shares |
3 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Apr. 29, 2016 |
|
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2016 | |
Document Fiscal Year Focus | 2016 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | CTXS | |
Entity Registrant Name | CITRIX SYSTEMS INC | |
Entity Central Index Key | 0000877890 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 155,102,006 |
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands |
Mar. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance | $ 6,113 | $ 7,719 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, issued | 0 | 0 |
Preferred stock, outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 1,000,000,000 | 1,000,000,000 |
Common stock, shares issued | 300,698,000 | 299,113,000 |
Common stock, shares outstanding | 300,698,000 | 299,113,000 |
Common stock in treasury, shares | 146,151,000 | 145,296,000 |
Condensed Consolidated Statements of Comprehensive Income (Unuaudited) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 83,463 | $ 28,887 |
Available for sale securities: | ||
Change in net unrealized gains | 4,099 | 2,194 |
Less: reclassification adjustment for net (gains) losses included in net income | (22) | 68 |
Net change (net of tax effect) | 4,077 | 2,262 |
Cash flow hedges: | ||
Change in unrealized gains (losses) | 2,222 | (5,691) |
Less: reclassification adjustment for net losses included in net income | 1,165 | 4,247 |
Net change (net of tax effect) | 3,387 | (1,444) |
Other comprehensive income | 7,464 | 818 |
Comprehensive income | $ 90,927 | $ 29,705 |
Basis Of Presentation |
3 Months Ended |
---|---|
Mar. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | BASIS OF PRESENTATION The accompanying unaudited condensed consolidated financial statements of Citrix Systems, Inc. (the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and notes required by accounting principles generally accepted in the United States for complete financial statements. All adjustments, which, in the opinion of management, are considered necessary for a fair presentation of the results of operations for the periods shown, are of a normal recurring nature and have been reflected in the condensed consolidated financial statements and accompanying notes. The results of operations for the periods presented are not necessarily indicative of the results expected for the full year or for any future period partially because of the seasonality of the Company’s business. Historically, the Company’s revenue for the fourth quarter of any year is typically higher than the revenue for the first quarter of the subsequent year. The information included in these condensed consolidated financial statements should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained in this report and the consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015. The condensed consolidated financial statements of the Company include the accounts of its wholly-owned subsidiaries in the Americas, Europe, the Middle East and Africa (“EMEA”), and Asia-Pacific. All significant transactions and balances between the Company and its subsidiaries have been eliminated in consolidation. As part of its continued transformation, effective January 1, 2016, the Company reorganized a part of its business by creating a new Cloud Services business unit that primarily includes the ShareFile product line. Prior to 2016, the ShareFile product line was included within the Company's Workflow Cloud products under the Mobility Apps segment. The Company's management has changed how it views the business primarily due to operational initiatives announced in 2015, which include increased emphasis and investments in core enterprise products for secure and reliable application and data delivery. As a result, the Company realigned its Cloud Services products and services to be included in the Enterprise and Service Provider segment effective January 1, 2016 in contemplation of the strategic shift and the proposed spin-off of the GoTo family of products. See Note 18 for more information on the Company's proposed spin-off. The Company’s revenues are derived from its Enterprise and Service Provider products, which primarily include its Workspace Services, Delivery Networking and Cloud Services products and related license updates and maintenance and professional services, and from its Mobility Apps products, which primarily include Communications Cloud and Workflow Cloud products. Enterprise and Service Provider and Mobility Apps business units constitute the Company's two reportable segments. See Note 9 for more information on the Company's segments. |
Significant Accounting Policies |
3 Months Ended |
---|---|
Mar. 31, 2016 | |
Accounting Policies [Abstract] | |
SIGNIFICANT ACCOUNTING POLICIES | SIGNIFICANT ACCOUNTING POLICIES Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Significant estimates made by management include the provision for doubtful accounts receivable, the provision to reduce obsolete or excess inventory to market, the provision for estimated returns, as well as sales allowances, the assumptions used in the valuation of stock-based awards, the assumptions used in the discounted cash flows to mark certain of its investments to market, the valuation of the Company’s goodwill, net realizable value of product related and other intangible assets, the fair value of convertible senior notes, the provision for lease losses, 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 condensed consolidated financial position and results of operations taken as a whole, the actual amounts of such items, when known, will vary from these estimates. Available-for-sale Investments Short-term and long-term available-for-sale investments as of March 31, 2016 and December 31, 2015 primarily consist of agency securities, corporate securities, municipal securities and government securities. Investments classified as available-for-sale are stated at fair value with unrealized gains and losses, net of taxes, reported in Accumulated other comprehensive loss. The Company classifies its available-for-sale investments as current and non-current based on their actual remaining time to maturity. The Company does not recognize changes in the fair value of its available-for-sale investments in income unless a decline in value is considered other-than-temporary in accordance with the authoritative guidance. The Company’s investment policy is designed to limit exposure to any one issuer depending on credit quality. The Company uses information provided by third parties to adjust the carrying value of certain of its investments to fair value at the end of each period. Fair values are based on a variety of inputs and may include interest rates, known historical trades, yield curve information, benchmark data, prepayment speeds, credit quality and broker/dealer quotes. See Note 5 for investment information. Revenue Recognition Net revenues include the following categories: Product and licenses, SaaS, License updates and maintenance and Professional services. Product and licenses revenues primarily represent fees related to the licensing of the Company’s software and hardware appliances. These revenues are reflected net of sales allowances, cooperative advertising agreements, partner incentive programs and provisions for returns. SaaS revenues consist primarily of fees related to online service agreements, which are recognized ratably over the contract term, which is typically 12 months. 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. 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 program that provides subscribers with immediate access to software upgrades, enhancements and maintenance releases when and if they become available during the term of the contract. Subscription Advantage and maintenance fees are recognized ratably over the term of the contract, which is typically 12 to 24 months. The Company capitalizes certain third-party commissions related to Subscription Advantage, maintenance and support renewals. The capitalized commissions are amortized to Sales, marketing and services expense at the time the related deferred revenue is recognized as revenue. Hardware and software maintenance and support contracts are typically sold separately. Hardware maintenance includes technical support, the latest software upgrades when and if they become available, and replacement of malfunctioning appliances. Dedicated account management is available as an add-on to the program for a higher level of service. Software maintenance includes unlimited technical support, immediate access to software upgrades, enhancements and maintenance releases when and if they become available during the term of the contract 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 and fees from product training and certification, which are recognized as the services are provided. The Company recognizes revenue when it is earned and when all of the following criteria are met: persuasive evidence of the arrangement exists; delivery has occurred or the service has been provided and the Company has no remaining obligations; the fee is fixed or determinable; and collectability is probable. The majority of the Company’s product and license revenue consists of revenue from the sale of software products. Software sales generally include a perpetual license to the Company’s software and is subject to the industry specific software revenue recognition guidance. In accordance with this guidance, the Company allocates revenue to license updates related to its stand-alone software and any other undelivered elements of the arrangement based on vendor specific objective evidence (“VSOE”) of fair value of each element and such amounts are deferred until the applicable delivery criteria and other revenue recognition criteria described above have been met. The balance of the revenues, net of any discounts inherent in the arrangement, is recognized at the outset of the arrangement using the residual method as the product licenses are delivered. If management cannot objectively determine the fair value of each undelivered element based on VSOE of fair value, revenue recognition is deferred until all elements are delivered, all services have been performed, or until fair value can be objectively determined. For hardware appliance and software transactions, the arrangement consideration is allocated to stand-alone software deliverables as a group and the non-software deliverables based on the relative selling prices using the selling price hierarchy in the revenue recognition guidance. The selling price hierarchy for a deliverable is based on its VSOE if available, third-party evidence of selling price ("TPE") if VSOE is not available, or estimated selling price ("ESP") if neither VSOE nor TPE is available. The Company then recognizes revenue on each deliverable in accordance with its policies for product and service revenue recognition. VSOE of selling price is based on the price charged when the element is sold separately. In determining VSOE, the Company requires that a substantial majority of the selling prices fall within a reasonable range based on historical discounting trends for specific products and services. TPE of selling price is established by evaluating competitor products or services in stand-alone sales to similarly situated customers. However, as the Company’s products contain a significant element of proprietary technology and its solutions offer substantially different features and functionality, the comparable pricing of products with similar functionality typically cannot be obtained. Additionally, as the Company is unable to reliably determine what competitors products’ selling prices are on a stand-alone basis, the Company is not typically able to determine TPE. The estimate of selling price is established considering multiple factors including, but not limited to, pricing practices in different geographies and through different sales channels and competitor pricing strategies. The Citrix Service Provider ("CSP") program provides subscription-based services in which the CSP partners host software services to their end users. The fees from the CSP program are recognized based on usage and as the CSP services are provided to their end users. For the Company’s non-software transactions, it allocates the arrangement consideration based on the relative selling price of the deliverables. For the Company’s hardware appliances, it uses ESP as its selling price. For the Company’s support and services, it generally uses VSOE as its selling price. When the Company is unable to establish selling price using VSOE for its support and services, the Company uses ESP in its allocation of arrangement consideration. The Company’s Mobility Apps products and a majority of Cloud Services are considered hosted service arrangements per the authoritative guidance, or SaaS. Generally, the Company’s Mobility Apps products are sold separately and not bundled with the Enterprise and Service Provider business unit’s products and services. In the normal course of business, the Company is not obligated to accept product returns from its distributors under any conditions, unless the product item is defective in manufacture. The Company establishes provisions for estimated returns, as well as other sales allowances, concurrently with the recognition of revenue. The provisions are established based upon consideration of a variety of factors, including, among other things, recent and historical return rates for both specific products and distributors and the impact of any new product releases and projected economic conditions. Product returns are provided for in the condensed consolidated financial statements and have historically been within management’s expectations. Allowances for estimated product returns amounted to approximately $1.0 million and $1.4 million at March 31, 2016 and December 31, 2015, respectively. The Company also records estimated reductions to revenue for customer programs and incentive offerings, including volume-based incentives. The Company could take actions to increase its customer incentive offerings, which could result in an incremental reduction to revenue at the time the incentive is offered. Foreign Currency The functional currency for all of the Company’s wholly-owned foreign subsidiaries is the U.S. dollar. Monetary assets and liabilities of such subsidiaries are remeasured into U.S. dollars at exchange rates in effect at the balance sheet date, and revenues and expenses are remeasured at average rates prevailing during the year. Effective January 1, 2015, the functional currency of the Company’s wholly-owned foreign subsidiaries of its Mobility Apps business unit became the U.S. dollar as a result of a reorganization in the foreign subsidiaries' operations. Prior to January 1, 2015, the functional currency of the Company’s wholly-owned foreign subsidiaries of its Mobility Apps business unit was the currency of the country in which each subsidiary is located. The Company translated assets and liabilities of these foreign subsidiaries at exchange rates in effect at the balance sheet date and included accumulated net translation adjustments in equity as a component of Accumulated other comprehensive loss. The change in functional currency is applied on a prospective basis, therefore any gains and losses that were previously recorded in Accumulated other comprehensive loss remain unchanged from January 1, 2015. Foreign currency transaction gains and losses are the result of exchange rate changes on transactions denominated in currencies other than the functional currency, including U.S. dollars. The remeasurement of those foreign currency transactions is included in determining net income or loss for the period of exchange. See Note 9 for information on the Company's Enterprise and Service Provider and Mobility Apps business units. Accounting for Stock-Based Compensation Plans The Company has various stock-based compensation plans for its employees and outside directors and accounts for stock-based compensation arrangements in accordance with the authoritative guidance, which requires the Company to measure and record compensation expense in its condensed consolidated financial statements using a fair value method. See Note 7 for further information regarding the Company’s stock-based compensation plans. |
Earnings Per Share |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
EARNINGS PER SHARE | 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 or settlement of stock awards (calculated using the treasury stock method) during the period they were outstanding. The following table sets forth the computation of basic and diluted net income per share (in thousands, except per share information):
The weighted-average number of shares outstanding used in the computation of basic and diluted earnings per share does not include the effect of the potential outstanding common stock from the Company's Convertible Senior Notes (the "Convertible Notes") and warrants. The effects of these potentially outstanding shares were not included in the calculation of diluted earnings per share because the effect would have been anti-dilutive. The Company uses the treasury stock method for calculating any potential dilutive effect of the conversion spread on its Convertible Notes on diluted earnings per share, if applicable, as upon conversion, the Company will pay cash up to the aggregate principal amount of the Convertible Notes to be converted and pay or deliver, as the case may be, cash, shares of common stock or a combination of cash and shares of common stock, at the Company’s election, in respect of the remainder, if any, of the Company’s conversion obligation in excess of the aggregate principal amount of the Convertible Notes being converted. The conversion spread will have a dilutive impact on diluted earnings per share when the average market price of the Company’s common shares for a given period exceeds the conversion price of $90.00 per share. For the three months ended March 31, 2016 and 2015, the Convertible Notes have been excluded from the computation of diluted earnings per share as the effect would be anti-dilutive since the conversion price of the Convertible Notes exceeded the average market price of the Company’s common stock. In addition, the Company uses the treasury stock method for calculating any potential dilutive effect related to the warrants. See Note 10 to the Company's condensed consolidated financial statements for detailed information on the Convertible Notes offering. Common shares potentially issuable of 1,104,819 from stock options for the three months ended March 31, 2016 are excluded from the calculation of diluted earnings per share because the weighted average exercise price of $79.72 was greater than the average market price of common stock for the period. |
Acquisitions and Divestitures |
3 Months Ended |
---|---|
Mar. 31, 2016 | |
Business Combinations [Abstract] | |
ACQUISITIONS AND DIVESTITURES | ACQUISITIONS AND DIVESTITURES 2016 Asset Acquisition On January 8, 2016, the Company acquired certain monitoring technology assets from a privately-held company for total cash consideration of $23.6 million ("2016 Asset Acquisition"). The acquisition provides a monitoring solution for Citrix's products as it relates to Microsoft Windows applications and desktop delivery. The identifiable intangible assets acquired related primarily to product technologies. 2016 Divestiture Effective February 29, 2016, the Company sold its CloudPlatform and CloudPortal Business Manager products to Persistent Telecom Solutions, Inc. The agreement included contingent consideration in the form of an earnout provision based on revenue for a period of five years following the closing date. Any income associated with the contingent consideration will be recognized if the earnout provisions are met. 2015 Acquisitions Sanbolic On January 8, 2015, the Company acquired all of the issued and outstanding securities of Sanbolic, Inc. (“Sanbolic”). The Company expected the Sanbolic technology would reduce the complexity of Microsoft Windows application delivery and desktop virtualization deployments. Sanbolic became part of the Company's Enterprise and Service Provider segment. The total cash consideration for this transaction was approximately $89.4 million, net of $0.2 million cash acquired. Transaction costs associated with the acquisition were $0.5 million, of which the Company expensed $0.2 million during the three months ended March 31, 2015, and are included in General and administrative expense in the accompanying condensed consolidated statements of income. In addition, in connection with the acquisition, the Company assumed non-vested stock units which were converted into the right to receive, in the aggregate, up to 37,057 shares of the Company's common stock, for which the vesting period began on the closing of the transaction. During the fourth quarter of 2015, management performed a comprehensive operational review which included an evaluation of all of the Company's products. In connection with this review, management determined that the Sanbolic technology was a non-core solution and that the related product offerings will no longer be developed. As a result, the Company impaired the remaining carrying value of the intangible assets related to this acquisition in the fourth quarter of 2015. Grasshopper On May 18, 2015, the Company acquired all of the membership interests of Grasshopper Group, LLC (“Grasshopper”), a leading provider of cloud-based phone solutions for small businesses. With the acquisition, the Company will expand its breadth of communication and collaboration solutions for small businesses, including GoToMeeting, GoToTraining, GoToWebinar and OpenVoice. Grasshopper became part of the Mobility Apps segment. Total cash consideration for this transaction was approximately $161.5 million, net of $3.6 million cash acquired. Transaction costs associated with the acquisition were $0.3 million, all of which the Company expensed during the three months ended March 31, 2015, and are included in General and administrative expense in the accompanying condensed consolidated statements of income. In addition, in connection with the acquisition, the Company assumed non-vested stock units which were converted into the right to receive, in the aggregate, up to 105,765 shares of the Company's common stock, for which the vesting period commenced on the closing of the transaction. |
Investments |
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Investments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INVESTMENTS | INVESTMENTS Available-for-sale Investments Investments in available-for-sale securities at fair value were as follows for the periods ended (in thousands):
The change in net unrealized gains (losses) on available-for-sale securities recorded in Other comprehensive income includes unrealized gains (losses) that arose from changes in market value of specifically identified securities that were held during the period, gains (losses) that were previously unrealized, but have been recognized in current period net income due to sales, as well as prepayments of available-for-sale investments purchased at a premium. This reclassification has no effect on total comprehensive income or equity and was not material for all periods presented. See Note 13 for more information related to comprehensive income. The average remaining maturities of the Company’s short-term and long-term available-for-sale investments at March 31, 2016 were approximately seven months and three years, respectively. Realized Gains and Losses on Available-for-sale Investments For the three months ended March 31, 2016 and 2015, the Company received proceeds from the sales of available-for-sale investments of $234.2 million and $432.9 million, respectively. The Company had realized gains on the sales of available-for-sale investments during the three months ended March 31, 2016 and 2015, of $0.2 million and $0.1 million, respectively. For the three months ended March 31, 2016 and 2015, the Company had realized losses on available-for-sale investments of $0.2 million and $0.2 million, respectively, primarily related to prepayments at par of securities purchased at a premium. All realized gains and losses related to the sales of available-for-sale investments are included in Other expense, net, in the accompanying condensed consolidated statements of income. Unrealized Losses on Available-for-Sale Investments The gross unrealized losses on the Company’s available-for-sale investments that are not deemed to be other-than-temporarily impaired as of March 31, 2016 and December 31, 2015 were $0.8 million and $3.5 million, respectively. Because the Company does not intend to sell any of its investments in an unrealized loss position and it is more likely than not that it will not be required to sell the securities before the recovery of its amortized cost basis, which may not occur until maturity, it does not consider the securities to be other-than-temporarily impaired. Cost Method Investments The Company held direct investments in privately-held companies of approximately $19.9 million as of March 31, 2016 and December 31, 2015, which are accounted for based on the cost method and are included in Other assets in the accompanying condensed consolidated balance sheets. The Company periodically reviews these investments for impairment. If the Company determines that an other-than-temporary impairment has occurred, it will write-down the investment to its fair value. For the three months ended March 31, 2016, certain cost method investments with a combined carrying value of $1.0 million were determined to be impaired and written down to their estimated fair value of $0.7 million. The $0.3 million impairment charge is included in Other expense, net in the accompanying condensed consolidated financial statements. For the three months ended March 31, 2015, the Company determined that certain cost method investments were impaired and recorded a charge of $0.5 million, which was included in Other expense, net in the accompanying condensed consolidated statements of income. |
Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS The authoritative guidance defines fair value as an exit price, representing the amount that would either be received to sell an asset or be paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, the guidance establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:
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 than direct observations of quoted prices in active markets. The Service applies a four level hierarchical pricing methodology to all of the Company’s fixed income securities based on the circumstances. The hierarchy starts with the highest priority pricing source, then subsequently uses inputs obtained from other third-party sources and large custodial institutions. The Service’s providers utilize a variety of inputs to determine their quoted prices. These inputs may include interest rates, known historical trades, yield curve information, benchmark data, prepayment speeds, credit quality and broker/dealer quotes. Substantially all of the Company’s available-for-sale investments are valued utilizing inputs obtained from the Service and accordingly are categorized as Level 2 in the table below. The Company periodically independently assesses the pricing obtained from the Service and historically has not adjusted the Service's pricing as a result of this assessment. Available-for-sale securities are included in Level 3 when relevant observable inputs for a security are not available. The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the classification of assets and liabilities within the fair value hierarchy. In certain instances, the inputs used to measure fair value may meet the definition of more than one level of the fair value hierarchy. The input with the lowest level priority is used to determine the applicable level in the fair value hierarchy. Assets and Liabilities Measured at Fair Value on a Recurring Basis
The Company’s fixed income available-for-sale security portfolio generally consists of investment grade securities from diverse issuers with a minimum credit rating of A-/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 (Level 2 inputs) in determining fair value, and accordingly, the Company classifies all of its fixed income available-for-sale securities as Level 2. The Company measures its cash flow hedges, which are classified as Prepaid expenses and other current assets and Accrued expenses and other current liabilities, at fair value based on indicative prices in active markets (Level 2 inputs). Assets Measured at Fair Value on a Non-recurring Basis Using Significant Unobservable Inputs (Level 3) During the three months ended March 31, 2016, certain cost method investments with a combined carrying value of $1.0 million were determined to be impaired and written down to their estimated fair value of $0.7 million. The $0.3 million impairment charge is included in Other expense, net in the accompanying condensed consolidated financial statements. For the three months ended March 31, 2015, the Company determined that certain cost method investments were impaired and recorded a charge of $0.5 million which was included in Other expense, net in the accompanying condensed consolidated financial statements. In determining the fair value of cost method investments, the Company considers many factors including but not limited to operating performance of the investee, the amount of cash that the investee has on-hand, the ability to obtain additional financing and the overall market conditions in which the investee operates. The fair value of the cost method investments represent a Level 3 valuation as the assumptions used in valuing these investments were not directly or indirectly observable. For certain intangible assets where the unamortized balances exceeded the undiscounted future net cash flows, the Company measures the amount of the impairment by calculating the amount by which the carrying values exceed the estimated fair values, which are based on projected discounted future net cash flows. These non-recurring fair value measurements are categorized as Level 3 significant unobservable inputs. See Note 8 to the Company's condensed consolidated financial statements for detailed information related to Goodwill and Other Intangible Assets. In connection with the change in segment composition, during the first quarter of 2016, the Company performed an assessment of its goodwill reporting units and determined that the recent Cloud Services reorganization resulted in the identification of three goodwill reporting units. The identification of these reporting units triggered a reallocation of goodwill as of January 1, 2016 based on the relative fair value approach. The fair value of each reporting unit was determined using a combination of the market approach and the income approach. Under the market approach, fair value is based on revenue and earnings multiples for guideline public companies and guideline transactions in the reporting unit's peer group. Specific to the income approach, key assumptions used include forecasts of revenue and expenses over an extended period of time, tax rates, long term growth rates and estimated costs of debt and equity capital to discount the projected cash flows. This non-recurring fair value measurement was categorized as Level 3, as significant unobservable inputs were used in the valuation analysis. Certain of these assumptions involve significant judgment, are based on management’s estimate of current and forecasted market conditions and are sensitive and susceptible to change. For Level 3 measurements, significant increases or decreases in long-term growth rates or discount rates in isolation or in combination could result in a significantly lower or higher fair value measurement. See Note 8 to the Company's condensed consolidated financial statements for detailed information related to Goodwill and Other Intangible Assets. Additional Disclosures Regarding Fair Value Measurements The carrying value of accounts receivable, accounts payable and accrued expenses approximate their fair value due to the short maturity of these items. As of March 31, 2016, the fair value of the Convertible Notes, which was determined based on inputs that are observable in the market (Level 2) based on the closing trading price per $100 as of the last day of trading for the quarter ended March 31, 2016, and carrying value of debt instruments (carrying value excludes the equity component of the Company’s Convertible Notes classified in equity) was as follows (in thousands):
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Stock-Based Compensation |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION The Company’s stock-based compensation program is a long-term retention program that is intended to attract and reward talented employees and align stockholder and employee interests. As of March 31, 2016, the Company had one stock-based compensation plan under which it was granting equity awards. The Company is currently granting stock-based awards from its 2014 Equity Incentive Plan (the "2014 Plan"). In December 2014, the Company's Board of Directors approved the 2015 Employee Stock Purchase Plan (the “2015 ESPP”), which was approved by stockholders at the Company's Annual Meeting of Stockholders held on May 28, 2015. The 2015 ESPP has replaced the Company's Amended and Restated 2005 Employee Stock Purchase Plan (as amended, the "2005 ESPP"). In connection with certain of the Company’s acquisitions, the Company has assumed certain plans from acquired companies. The Company’s Board of Directors has provided that no new awards will be granted under the Company’s acquired stock plans. Awards previously granted under the Company's superseded and expired stock plans that are still outstanding typically expire between five and ten years from the date of grant and will continue to be subject to all the terms and conditions of such plans, as applicable. The Company’s superseded and expired stock plans include the Amended and Restated 2005 Equity Incentive Plan and the 2005 ESPP. Under the terms of the 2014 Plan, the Company is authorized to grant incentive stock options (“ISOs”), non-qualified stock options (“NSOs”), non-vested stock, non-vested stock units, stock appreciation rights (“SARs”), and performance units and to make stock-based awards to full and part-time employees of the Company and its subsidiaries or affiliates, where legally eligible to participate, as well as to consultants and non-employee directors of the Company. SARs and ISOs are not currently being granted. Currently, the 2014 Plan provides for the issuance of 29,000,000 shares of common stock. In addition, shares of common stock underlying any awards granted under the Company’s Amended and Restated 2005 Equity Incentive Plan, as amended, that are forfeited, canceled or otherwise terminated (other than by exercise) are added to its shares of common stock available for issuance under the 2014 Plan. Under the 2014 Plan, NSOs must be granted at exercise prices no less than fair market value on the date of grant. Non-vested stock awards may be granted for such consideration in cash, other property or services, or a combination thereof, as determined by the Company’s Compensation Committee of its Board of Directors. Stock-based awards are generally exercisable or issuable upon vesting. The Company’s policy is to recognize compensation cost for awards with only service conditions and a graded vesting schedule on a straight-line basis over the requisite service period for the entire award. As of March 31, 2016, there were 22,786,674 shares of common stock reserved for issuance pursuant to the Company’s stock-based compensation plans including authorization under its 2014 Plan to grant stock-based awards covering 16,119,469 shares of common stock. Under the 2015 ESPP, all full-time and certain part-time employees of the Company are eligible to purchase common stock of the Company twice per year at the end of a six-month payment period (a “Payment Period”). During each Payment Period, eligible employees who so elect may authorize payroll deductions in an amount no less than 1% nor greater than 10% of his or her base pay for each payroll period in the Payment Period. At the end of each Payment Period, the accumulated deductions are used to purchase shares of common stock from the Company up to a maximum of 12,000 shares for any one employee during a Payment Period. Shares are purchased at a price equal to 85% of the fair market value of the Company's common stock, on either the first business day of the Payment Period or the last business day of the Payment Period, whichever is lower. Employees who, after exercising their rights to purchase shares of common stock in the 2015 ESPP, would own shares representing 5% or more of the voting power of the Company’s common stock, are ineligible to continue to participate under the 2015 ESPP. The 2015 ESPP provides for the issuance of a maximum of 16,000,000 shares of common stock. As of March 31, 2016, 3,872,661 shares had been issued under the 2005 ESPP. As of March 31, 2016, 527,367 shares have been issued under the 2015 ESPP. The Company recorded stock-based compensation costs related to its employee stock purchase plans of $2.7 million and $1.6 million for the three months ended March 31, 2016 and 2015, respectively. The Company used the Black-Scholes model to estimate the fair value of its Employee Stock Purchase Plan awards with the following weighted-average assumptions:
The Company determined the expected volatility factor by considering the implied volatility in six-month market-traded options of the Company's common stock based on third party volatility quotes. The Company's decision to use implied volatility was based upon the availability of actively traded options on the Company's common stock and its assessment that implied volatility is more representative of future stock price trends than historical volatility. The risk-free interest rate was based on a U.S. Treasury instrument whose term is consistent with the expected term of the stock options. The Company's expected dividend yield input was zero as it has not historically paid, nor expects in the future to pay, cash dividends on its common stock. The expected term is based on the term of the purchase period for grants made under the ESPP. Stock-Based Compensation The detail of the total stock-based compensation recognized by income statement classification is as follows (in thousands):
Non-vested Stock Units Performance, Market Performance and Service Condition Stock Units In January 2016, the Company granted its Chief Executive Officer 220,235 non-vested stock units that vest based on certain target performance conditions; and in March 2016, the Company granted senior level employees 234,816 non-vested stock units that vest based on certain target performance conditions. The attainment level under the awards will be based on the Company's compound annualized total return to stockholders over a three-year performance period, with 100% of such stock units earned if the Company achieves total shareholder return of 10% over the performance period. Further, if the Company achieves annualized total shareholder return of less than 10% during the performance period, the awardees may earn all or a portion of the target award, but not in excess of 100% of such stock units, depending upon the Company’s relative total shareholder return compared to companies listed in the S&P Computer Software Select Index. If the Company's compound annualized total shareholder return is 5% or above, the number of non-vested stock units earned will be based on interpolation, with the maximum number of non-vested stock units earned capped at 200% of the target number of non-vested stock units for a compound annualized total return to stockholders of 30% over a three-year performance period as set forth in the award agreement. Within sixty days following an interim measurement period of 18 months, the Compensation Committee will determine the number of restricted stock units that would be deemed earned based on performance to date, and up to 33% of the target award may be earned based on such performance; however, any stock units that are deemed earned will remain subject to continued service vesting until the end of the three-year performance period, or a change in control, if earlier. Within sixty days following the conclusion of the performance period, the Company’s Compensation Committee will determine the number of restricted stock units that would vest upon the final day of the performance period based on the Company’s performance during the period and in accordance with the terms of the award. On the vesting date, the greater of the full period restricted stock units, or the interim earned restricted stock units, will vest in one installment. In March 2015, the Company granted senior level employees non-vested stock unit awards representing, in the aggregate, 393,464 non-vested stock units that vest based on certain target market performance and service conditions. The number of non-vested stock units underlying the award will be determined within sixty days of the calendar year following the end of a three-year performance period ending December 31, 2017. The attainment level under the award will be based on the Company's total return to stockholders over the performance period compared to the return on the Nasdaq Composite Total Return Index (the "XCMP"). If the Company's return is positive and meets or exceeds the indexed return, the number of non-vested stock units earned will be based on interpolation, with the maximum number of non-vested stock units earned pursuant to the award capped at 200% of the target number of non-vested stock units set forth in the award agreement if the Company's return exceeds the indexed return by 40% or more. If the Company's return over the performance period is positive but underperforms the index, a number of non-vested stock units will be issued, below the target award, based on interpolation; however, no non-vested stock units will be issued if the Company's return underperforms the index by more than 20% over the performance period. In the event the Company's return to stockholders is negative but still meets or exceeds the indexed return, only 75% of the target award shall be issued. If the awardee is not employed by the Company at the end of the performance period; the extent to which the awardee will vest in the award, if at all, is dependent upon the timing and character of the termination as provided in the award agreement. Each non-vested stock unit, upon vesting, represents the right to receive one share of the Company's common stock. The market condition requirements are reflected in the grant date fair value of the award, and the compensation expense for the award will be recognized assuming that the requisite service is rendered regardless of whether the market conditions are achieved. The grant date fair value of the non-vested performance stock unit awards was determined through the use of a Monte Carlo simulation model, which utilized multiple input variables that determined the probability of satisfying the market condition requirements applicable to each award as follows:
For the March 2016 and January 2016 grants, the range of expected volatilities utilized was based on the historical volatilities of the Company's common stock and the average of its peer group. The Company chose to use historical volatility to value these awards because historical stock prices were used to develop the correlation coefficients between the Company and its peer group in order to model the stock price movements. The volatilities used were calculated over a 3.00 year period, which is commensurate with the awards’ performance period at the date of grant. The risk free interest rate was based on the implied yield available on U.S. Treasury zero-coupon issues with remaining terms equivalent to the performance period. The Company does not intend to pay dividends on its common stock in the foreseeable future. Accordingly, the Company used a dividend yield of zero in its model. The estimated fair value of each award as of the date of grant was $66.18 for the March 2016 grant and $49.68 for the January 2016 grant. For the March 2015 grant, the range of expected volatilities utilized was based on the historical volatilities of the Company's common stock and the XCMP. The Company chose to use historical volatility to value these awards because historical stock prices were used to develop the correlation coefficients between the Company and the XCMP in order to model the stock price movements. The volatilities used were calculated over a 2.76 year period, which was the remaining term of the performance period at the date of grant. The risk free interest rate was based on the implied yield available on U.S. Treasury zero-coupon issues with remaining terms equivalent to the remaining performance period. The Company does not intend to pay dividends on its common stock in the foreseeable future. Accordingly, the Company used a dividend yield of zero in its model. The estimated fair value of the award as of the date of grant was $61.01. Service Based Stock Units The Company also awards senior level employees, certain other employees and new non-employee directors non-vested stock units granted under the 2014 Plan that vest based on service. The majority of these non-vested stock unit awards generally vest 33.33% on each anniversary subsequent to the date of the award. The Company also assumes non-vested stock units in connection with certain of its acquisitions. The assumed awards have the same three year vesting schedule. Each non-vested stock unit, upon vesting, represents the right to receive one share of the Company’s common stock. In addition, the Company awards non-vested stock units to all of its continuing non-employee directors. These awards vest monthly in 12 equal installments 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-vested stock units underlying each award will be determined within sixty days of the calendar year following completion of the one-year performance period ending December 31, 2016 and will be based on achievement of a specific corporate financial performance goal determined at the time of the award. The number of non-vested stock units issued will be based on a graduated slope, with the maximum number of non-vested stock units issuable pursuant to the award capped at 100% of the base number of non-vested stock units set forth in the award agreement. The Company is required to estimate the attainment expected to be achieved related to the defined performance goals and the number of non-vested stock units that will ultimately be awarded in order to recognize compensation expense over the vesting period. Each non-vested stock unit, upon vesting, represents the right to receive one share of the Company’s common stock. If the performance goals are not met, no compensation cost will be recognized and any previously recognized compensation cost will be reversed. Unrecognized Compensation Related to Stock Units As of March 31, 2016, the number of all non-vested stock units outstanding, including market performance and service condition awards and service-based awards, including service-based awards assumed in connection with acquisitions, were 5,295,739. As of March 31, 2016, there was $311.6 million of total unrecognized compensation cost related to non-vested stock units. The unrecognized cost is expected to be recognized over a weighted-average period of 2.41 years. See Note 4 for more information regarding the Company's acquisitions. Non-vested Stock During the three months ended March 31, 2016, the Company granted non-vested stock awards of 118,588 shares to certain executive officers which typically vest between one to three years from the date of grant, subject to the holder’s continued employment with the Company. Non-vested stock is issued and outstanding upon grant; however, award holders are restricted from selling the shares until they vest. If the vesting conditions are not met, the award will be forfeited. Compensation expense is measured based on the closing market price of the Company’s common stock at the date of grant and is recognized on a straight-line basis over the vesting period. For the three months ended March 31, 2016, the Company recognized $2.6 million of stock-based compensation expense related to non-vested stock awards. At March 31, 2016, there was approximately $12.3 million of total unrecognized compensation expense related to these awards, which is expected to be recognized over a weighted average period of 1.88 years. |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
GOODWILL AND OTHER INTANGIBLE ASSETS | GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill The Company accounts for goodwill in accordance with the authoritative guidance, which requires that goodwill and certain intangible assets are not amortized, but are subject to an annual impairment test. There was no impairment of goodwill or indefinite lived intangible assets as a result of the annual impairment test analysis completed during the fourth quarter of 2015. There were no indicators of impairment during the three months ended March 31, 2016. See Note 4 for more information regarding the Company's acquisitions and Note 9 for more information regarding the Company's segments. As part of its continued transformation, effective January 1, 2016, the Company reorganized a part of its business by creating a new Cloud Services business unit, which resulted in a change in segment composition. In connection with this change, during the first quarter of 2016, the Company performed an assessment of its goodwill reporting units and determined that the recent Cloud Services reorganization resulted in the identification of three goodwill reporting units (Enterprise and Service Provider excluding Cloud Services, Cloud Services and Mobility Apps). The identification of these reporting units triggered a reallocation of goodwill as of January 1, 2016 based on the relative fair value approach. The Company’s reportable segments remain unchanged. The following table presents the change in goodwill allocated to the Company’s reportable segments during the three months ended March 31, 2016 (in thousands):
Intangible Assets The Company has intangible assets which were primarily acquired in conjunction with business combinations and technology purchases. Intangible assets with finite lives are recorded at cost, less accumulated amortization. Amortization is computed over the estimated useful lives of the respective assets, generally three to seven years, except for patents, which are amortized over the lesser of their remaining life or ten years. In-process R&D is initially capitalized at fair value as an intangible asset with an indefinite life and assessed for impairment thereafter. When in-process R&D projects are completed, the corresponding amount is reclassified as an amortizable intangible asset and is amortized over the asset's estimated useful life. Intangible assets consist of the following (in thousands):
Amortization of product-related intangible assets, which consists primarily of product-related technologies and patents, was $15.1 million and $18.4 million for the three months ended March 31, 2016 and 2015, respectively, and is classified as a component of Cost of net revenues in the accompanying condensed consolidated statements of income. Amortization of other intangible assets, which consist primarily of customer relationships, trade names and covenants not to compete was $7.4 million and $9.4 million for the three months ended March 31, 2016 and 2015, respectively, and is classified as a component of Operating expenses in the accompanying condensed consolidated statements of income. The Company monitors its intangible assets for indicators of impairment. If the Company determines that an impairment has occurred, it will write-down the intangible asset to its fair value. For certain intangible assets where the unamortized balances exceeded the undiscounted future net cash flows, the Company measures the amount of the impairment by calculating the amount by which the carrying values exceed the estimated fair values, which are based on projected discounted future net cash flows. Estimated future amortization expense of intangible assets with finite lives as of March 31, 2016 is as follows (in thousands):
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Segment Information |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SEGMENT INFORMATION | SEGMENT INFORMATION The Enterprise and Service Provider and the Mobility Apps business units constitute the Company’s two reportable segments. The Company does not engage in intercompany revenue transfers between segments. The Company’s chief operating decision maker (“CODM”) evaluates the Company’s performance based primarily on profitability from its Enterprise and Service Provider and Mobility Apps products. The Company's CEO is the CODM. Segment profit for each segment includes certain research and development, sales, marketing and services and general and administrative expenses directly attributable to the segment as well as other corporate costs allocated to the segment and excludes certain expenses that are managed outside of the reportable segments. Costs excluded from segment profit primarily consist of certain restructuring charges, stock-based compensation costs, charges or benefits related to significant litigation that are not anticipated to be ongoing costs, amortization of product related intangible assets, impairment of product related intangible assets, amortization of other intangible assets, net interest and other expense, net and separation costs. Accounting policies of the Company’s segments are the same as its consolidated accounting policies. As part of its continued transformation, effective January 1, 2016, the Company reorganized a part of its business by creating a new Cloud Services business unit that primarily includes the ShareFile product line. Prior to 2016, the ShareFile product line was included within the Company's Workflow Cloud products under the Mobility Apps segment. The Company's CODM has changed how it views the business primarily due to operational initiatives announced in 2015, which include increased emphasis and investments in core enterprise products for secure and reliable application and data delivery. As a result, the Company realigned its Cloud Services products and services to the Enterprise and Service Provider segment effective January 1, 2016 in contemplation of the strategic shift and the proposed spin-off of the GoTo family of products. See Note 18 for more information on the Company's proposed spin-off. In addition, previously reported segment results have been recast to conform to the 2016 presentation. Net revenues and segment profit, classified by the Company’s two reportable segments were as follows (in thousands):
Revenues by Product Grouping Revenues by product grouping for the Company’s Enterprise and Service Provider and Mobility Apps business units were as follows (in thousands):
Revenues by Geographic Location The following table presents revenues by segment and geographic location, for the following periods (in thousands):
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Convertible Senior Notes |
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Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
CONVERTIBLE SENIOR NOTES | CONVERTIBLE SENIOR NOTES Convertible Notes Offering During 2014, the Company completed a private placement of approximately $1.44 billion principal amount of 0.500% Convertible Notes due 2019. The net proceeds from this offering were approximately $1.42 billion, after deducting the initial purchasers’ discounts and commissions and the estimated offering expenses payable by the Company. The Company used approximately $82.6 million of the net proceeds to pay the cost of the Bond Hedges described below (after such cost was partially offset by the proceeds to the Company from the Warrant Transactions described below). The Company used the remainder of the net proceeds from the offering and a portion of its existing cash and investments to purchase an aggregate of approximately $1.5 billion of its common stock, as authorized under its share repurchase program. The Company used approximately $101.0 million to purchase shares of common stock from certain purchasers of the Convertible Notes in privately negotiated transactions concurrently with the closing of the offering, and the remaining $1.4 billion to purchase additional shares of common stock through an Accelerated Share Repurchase ("ASR") which the Company entered into with Citibank, N.A. (the “ASR Counterparty”) on April 25, 2014 (the “ASR Agreement”). The Convertible Notes are governed by the terms of an indenture, dated as of April 30, 2014 (the “Indenture”), between the Company and Wilmington Trust, National Association, as trustee (the “Trustee”). The Convertible Notes are the senior unsecured obligations of the Company and bear interest at a rate of 0.500% per annum, payable semi-annually in arrears on April 15 and October 15 of each year. The Convertible Notes will mature on April 15, 2019, unless earlier repurchased or converted. Upon conversion, the Company will pay cash up to the aggregate principal amount of the Convertible Notes to be converted and pay or deliver, as the case may be, cash, shares of common stock or a combination of cash and shares of common stock, at the Company’s election, in respect of the remainder, if any, of the Company’s conversion obligation in excess of the aggregate principal amount of the Convertible Notes being converted. As of March 31, 2016, none of the conditions allowing holders of the Notes to convert had been met. The conversion rate for the Convertible Notes is 11.1111 shares of common stock per $1,000 principal amount of Convertible Notes, which corresponds to a conversion price of approximately $90.00 per share of common stock. The conversion rate is subject to adjustment from time to time upon the occurrence of certain events, including, but not limited to, the issuance of certain stock dividends on common stock, the issuance of certain rights or warrants, subdivisions, combinations, distributions of capital stock, indebtedness, or assets, the payment of cash dividends and certain issuer tender or exchange offers. The Company may not redeem the Convertible Notes prior to the maturity date and no “sinking fund” is provided for the Convertible Notes, which means that the Company is not required to periodically redeem or retire the Convertible Notes. Upon the occurrence of certain fundamental changes involving the Company, holders of the Convertible Notes may require the Company to repurchase for cash all or part of their Convertible Notes in principal amounts of $1,000 or an integral multiple thereof at a repurchase price equal to 100% of the principal amount of the Convertible Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date. In accounting for the issuance of the Convertible Notes, the Company separated the Convertible Notes into liability and equity components. The carrying amount of the liability component was calculated by measuring the estimated fair value of a similar liability that does not have an associated convertible feature. The carrying amount of the equity component representing the conversion option was determined by deducting the fair value of the liability component from the face value of the Convertible Notes as a whole. The excess of the principal amount of the liability component over its carrying amount ("debt discount") is amortized to interest expense over the term of the Convertible Notes using the effective interest method with an effective interest rate of 3.0 percent per 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 their relative values. Issuance costs attributable to the $1.3 billion liability component are being amortized to expense over the term of the Convertible Notes, and issuance costs attributable to the $162.9 million equity component are included along with the equity component in stockholders' equity. Additionally, a deferred tax liability of $8.2 million related to a portion of the equity component transaction costs which are deductible for tax purposes is included in Other liabilities in the accompanying condensed consolidated balance sheets. The Convertible Notes consist of the following (in thousands):
* Recorded in the condensed consolidated balance sheet within additional paid-in capital. The following table includes total interest expense recognized related to the Convertible Notes (in thousands):
See Note 6 to the Company's condensed consolidated financial statements for fair value disclosures related to the Company's Convertible Notes. Convertible Note Hedge and Warrant Transactions In connection with the pricing of the Convertible Notes, the Company entered into convertible note hedge transactions relating to approximately 16.0 million shares of common stock (the "Bond Hedges"), with JPMorgan Chase Bank, National Association, London Branch; Goldman, Sachs & Co.; Bank of America, N.A.; and Royal Bank of Canada (the “Option Counterparties”) and also entered into separate warrant transactions (the "Initial Warrant Transactions") with each of the Option Counterparties relating to approximately 16.0 million shares of common stock. The Bond Hedges are generally expected to reduce the potential dilution upon conversion of the Convertible Notes and/or offset any payments in cash, shares of common stock or a combination of cash and shares of common stock, at the Company’s election, that the Company is required to make in excess of the principal amount of the Convertible Notes upon conversion of any Convertible Notes, as the case may be, in the event that the market price per share of common stock, as measured under the terms of the Bond Hedges, is greater than the strike price of the Bond Hedges, which initially corresponds to the conversion price of the Convertible Notes and is subject to anti-dilution adjustments substantially similar to those applicable to the conversion rate of the Convertible Notes. The Warrant Transactions will separately have a dilutive effect to the extent that the market value per share of common stock, as measured under the terms of the Warrant Transactions, exceeds the applicable strike price of the warrants issued pursuant to the Warrant Transactions (the “Warrants”). The initial strike price of the Warrants is $120.00 per share. The Warrants will expire in ratable portions on a series of expiration dates commencing after the maturity of the Convertible Notes. The Bond Hedges and Warrants are not marked to market. The value of the Bond Hedges and Warrants were initially recorded in stockholders' equity and continue to be classified within stockholders' equity. As of March 31, 2016, no warrants have been exercised. Aside from the initial payment of a premium to the Option Counterparties under the Bond Hedges, which amount is partially offset by the receipt of a premium under the Warrant Transactions, the Company is not required to make any cash payments to the Option Counterparties under the Bond Hedges and will not receive any proceeds if the Warrants are exercised. |
Credit Facility |
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Mar. 31, 2016 | |
Debt Disclosure [Abstract] | |
CREDIT FACILITY | CREDIT FACILITY Effective January 7, 2015, the Company entered into a Credit Facility with a group of financial institutions (the “Lenders”). The Credit Facility provides for a five year revolving line of credit in the aggregate amount of $250.0 million, subject to continued covenant compliance. The Company may elect to increase the revolving credit facility by up to $250.0 million if existing or new lenders provide additional revolving commitments in accordance with the terms of the Credit Agreement. A portion of the revolving line of credit (i) in the aggregate amount of $25.0 million may be available for issuances of letters of credit and (ii) in the aggregate amount of $10.0 million may be available for swing line loans, as part of, not in addition to, the aggregate revolving commitments. The Credit Facility bears interest at LIBOR plus 1.10% and adjusts in the range of 1.00% to 1.30% above LIBOR based on the ratio of the Company’s total debt to its adjusted earnings before interest, taxes, depreciation, amortization and certain other items (“EBITDA”) as defined in the agreement. In addition, the Company is required to pay a quarterly facility fee ranging from 0.125% to 0.20% of the aggregate revolving commitments under the Credit Facility and based on the ratio of the Company’s total debt to the Company’s consolidated EBITDA. As of March 31, 2015, there was $95 million outstanding under the Credit Facility and the weighted average interest rate for the amounts outstanding under the Credit Facility was 1.71%. In April 2015, the Company repaid all amounts outstanding under the Credit Facility. As such, the amount outstanding was classified as Short-term debt in the accompanying condensed consolidated balance sheet. As of March 31, 2016, there were no amounts outstanding under the Credit Facility. The Credit Agreement contains certain financial covenants that require the Company to maintain a consolidated leverage ratio of not more than 3.5:1.0 and a consolidated interest coverage ratio of not less than 3.0:1.0. In addition, the Credit Agreement contains customary affirmative and negative covenants, including covenants that limit or restrict the ability of the Company to grant liens, merge, dissolve or consolidate, dispose of all or substantially all of its assets, pay dividends during the existence of a default under the Credit Agreement, change its business and incur subsidiary indebtedness, in each case subject to customary exceptions for a credit facility of this size and type. The Company was in compliance with these covenants as of March 31, 2016. |
Derivative Financial Instruments |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DERIVATIVE FINANCIAL INSTRUMENTS | DERIVATIVE FINANCIAL INSTRUMENTS Derivatives Designated as Hedging Instruments As of March 31, 2016, the Company’s derivative assets and liabilities primarily resulted from cash flow hedges related to its forecasted operating expenses transacted in local currencies. A substantial portion of the Company’s overseas expenses are and will continue to be transacted in local currencies. To protect against fluctuations in operating expenses and the volatility of future cash flows caused by changes in currency exchange rates, the Company has established a program that uses foreign exchange forward contracts to hedge its exposure to these potential changes. The terms of these instruments, and the hedged transactions to which they relate, generally do not exceed 12 months. Generally, when the dollar is weak, foreign currency denominated expenses will be higher, and these higher expenses will be partially offset by the gains realized from the Company’s hedging contracts. Conversely, if the dollar is strong, foreign currency denominated expenses will be lower. These lower expenses will in turn be partially offset by the losses incurred from the Company’s hedging contracts. The change in the derivative component in Accumulated other comprehensive loss includes unrealized gains or losses that arose from changes in market value of the effective portion of derivatives that were held during the period, and gains or losses that were previously unrealized but have been recognized in the same line item as the forecasted transaction in current period net income due to termination or maturities of derivative contracts. This reclassification has no effect on total comprehensive income or equity. The total cumulative unrealized gain on cash flow derivative instruments was $1.1 million at March 31, 2016 and the total cumulative unrealized loss on cash flow derivative instruments was $2.3 million at December 31, 2015, and is included in Accumulated other comprehensive loss in the accompanying condensed consolidated balance sheets. See Note 13 for more information related to comprehensive income. The net unrealized gain as of March 31, 2016 is expected to be recognized in income over the next 12 months at the same time the hedged items are recognized in income. Derivatives not Designated as Hedging Instruments A substantial portion of the Company’s overseas assets and liabilities are and will continue to be denominated in local currencies. To protect against fluctuations in earnings caused by changes in currency 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 of these contracts are recorded in Other expense, net. Fair Values of Derivative Instruments
The Effect of Derivative Instruments on Financial Performance
There was no material ineffectiveness in the Company’s foreign currency hedging program in the periods presented.
Outstanding Foreign Currency Forward Contracts As of March 31, 2016, the Company had the following net notional foreign currency forward contracts outstanding (in thousands):
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Comprehensive Income |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
COMPREHENSIVE INCOME | COMPREHENSIVE INCOME The changes in Accumulated other comprehensive loss by component, net of tax, are as follows:
Income tax expense or benefit allocated to each component of other comprehensive loss is not material. Reclassifications out of Accumulated other comprehensive loss are as follows:
* Operating expenses amounts allocated to Research and development, Sales, marketing and services, and General and administrative are not individually significant. |
Income Taxes |
3 Months Ended |
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Mar. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The Company’s net unrecognized tax benefits totaled approximately $56.3 million and $54.6 million as of March 31, 2016 and December 31, 2015, respectively. All amounts included in the balance at March 31, 2016 for tax positions would affect the annual effective tax rate if recognized. The Company has $1.2 million accrued for the payment of interest and penalties as of March 31, 2016. The Company and one or more of its subsidiaries are subject to federal income taxes in the United States, as well as income taxes of multiple state and foreign jurisdictions. With few exceptions, the Company is no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations by tax authorities for years prior to 2012. In the ordinary course of global business, there are transactions for which the ultimate tax outcome is uncertain; thus, judgment is required in determining the worldwide provision for income taxes. The Company provides for income taxes on transactions based on its estimate of the probable liability. The Company adjusts its provision as appropriate for changes that impact its underlying judgments. Changes that impact provision estimates include such items as jurisdictional interpretations on tax filing positions based on the results of tax audits and general tax authority rulings. Due to the evolving nature of tax rules combined with the large number of jurisdictions in which the Company operates, it is possible that the Company’s estimates of its tax liability and the realizability of its deferred tax assets could change in the future, which may result in additional tax liabilities and adversely affect the Company’s results of operations, financial condition and cash flows. At March 31, 2016, the Company had approximately $202.9 million in net deferred tax assets. The authoritative guidance requires a valuation allowance to reduce the deferred tax assets reported if, based on the weight of the evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. The Company reviews deferred tax assets periodically for recoverability and makes estimates and judgments regarding the expected geographic sources of taxable income and gains from investments, as well as tax planning strategies in assessing the need for a valuation allowance. During the quarter ended March 31, 2016, the Company did not record a change in the Company's valuation allowance. The Company is required to estimate its income taxes in each of the jurisdictions in which it operates as part of the process of preparing its condensed consolidated financial statements. The Company maintains certain strategic management and operational activities in overseas subsidiaries and its foreign earnings are taxed at rates that are generally lower than in the United States. The Company does not expect to remit earnings from its foreign subsidiaries. The Company’s effective tax rate was approximately 18.6% and 18.9% for the three months ended March 31, 2016 and 2015, respectively. The decrease in effective tax rate was not significant. The Company’s effective tax rate generally differs from the U.S. federal statutory rate of 35% due primarily to lower tax rates on earnings generated by the Company’s foreign operations that are taxed primarily in Switzerland. The Company has not provided for U.S. taxes for those earnings because it plans to reinvest all of those earnings indefinitely outside the United States. From time to time, there may be other items that impact the Company's effective tax rate, such as the items specific to the current period discussed above. |
Treasury Stock |
3 Months Ended |
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Mar. 31, 2016 | |
Equity [Abstract] | |
TREASURY STOCK | TREASURY STOCK Stock Repurchase Program The Company’s Board of Directors authorized an ongoing stock repurchase program with a total repurchase authority granted to the Company of $6.3 billion, of which $400.0 million was approved in January 2016. The Company may use the approved dollar authority to repurchase stock at any time until the approved amount is exhausted. The objective of the Company’s stock repurchase program is to improve stockholders’ returns. At March 31, 2016, approximately $404.0 million was available to repurchase common stock pursuant to the stock repurchase program. All shares repurchased are recorded as treasury stock. A portion of the funds used to repurchase stock 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 open market purchases, pursuant to a Rule 10b5-1 plan or in privately negotiated transactions. During the three months ended March 31, 2016, the Company expended approximately $28.7 million on open market purchases under the stock repurchase program, repurchasing 426,300 shares of outstanding common stock at an average price of $67.30. During the three months ended March 31, 2015, the Company expended approximately $124.9 million on open market purchases under the stock repurchase program, repurchasing 1,982,115 shares of outstanding common stock at an average price of $63.03. Shares for Tax Withholding During the three months ended March 31, 2016, the Company withheld 428,838 shares from stock units that vested, totaling $32.9 million, to satisfy minimum tax withholding obligations that arose on the vesting of stock units. During the three months ended March 31, 2015, the Company withheld 412,466 shares from stock units that vested, totaling $26.2 million, to satisfy minimum tax withholding obligations that arose on the vesting of stock units. These shares are reflected as treasury stock in the Company’s condensed consolidated balance sheets and the related cash outlays do not reduce the Company’s total stock repurchase authority. |
Commitments And Contingencies |
3 Months Ended |
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Mar. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Leases The Company leases certain office space and equipment under various operating leases. In addition to rent, the leases require the Company to pay for taxes, insurance, maintenance and other operating expenses. Certain of these leases contain stated escalation clauses while others contain renewal options. The Company recognizes rent expense on a straight-line basis over the term of the lease, excluding renewal periods, unless renewal of the lease is reasonably assured. Legal Matters The Company accrues a liability for legal contingencies when it believes that it is both probable that a liability has been incurred and that it can reasonably estimate the amount of the loss. The Company reviews these accruals and adjusts them to reflect ongoing negotiations, settlements, rulings, advice of legal counsel and other relevant information. To the extent new information is obtained and the Company's views on the probable outcomes of claims, suits, assessments, investigations or legal proceedings change, changes in the Company's accrued liabilities would be recorded in the period in which such determination is made. For the Other Matters referenced below, the amount of liability is not probable or the amount cannot be reasonably estimated; and, therefore, accruals have not been made. In addition, in accordance with the relevant authoritative guidance, for matters in which the likelihood of material loss is at least reasonably possible, the Company provides disclosure of the possible loss or range of loss. If a reasonable estimate cannot be made, however, the Company will provide disclosure to that effect. In April 2014, John Calma, ostensibly on behalf of the Company, filed a shareholder derivative complaint against certain of the directors of the Company (and the Company as a nominal defendant) in the Court of Chancery of the State of Delaware. The complaint alleges breach of fiduciary duty, waste of corporate assets and unjust enrichment related to stock awards that they received under the Company's director compensation program. The complaint seeks the recovery of monetary damages and other relief for damages allegedly caused to the Company. The Company believes that its directors and the Company have meritorious defenses to these allegations and that it is not reasonably possible that the ultimate outcome of this suit will materially and adversely affect the Company's business, 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 services. The Company believes that it has meritorious defenses to the allegations made in its pending cases and intends to vigorously defend these lawsuits; however, it is unable currently to determine the ultimate outcome of these or similar matters or the potential exposure to loss, if any. In addition, the Company is a defendant in various litigation matters generally arising out of the normal course of business. Although it is difficult to predict the ultimate outcomes of these cases, the Company believes that it is not reasonably possible that the ultimate outcomes will materially and adversely affect its business, financial position, results of operations or cash flows. Guarantees The authoritative guidance requires certain guarantees to be recorded at fair value and requires a guarantor to make disclosures, even when the likelihood of making any payments under the guarantee is remote. For those guarantees and indemnifications that do not fall within the initial recognition and measurement requirements of the authoritative guidance, the Company must continue to monitor the conditions that are subject to the guarantees and indemnifications, as required under existing generally accepted accounting principles, to identify if a loss has been incurred. If the Company determines that it is probable that a loss has been incurred, any such estimable loss would be recognized. The initial recognition and measurement requirements do not apply to the provisions contained in the majority of the Company’s software license agreements that indemnify licensees of the Company’s software from damages and costs resulting from claims alleging that the Company’s software infringes the intellectual property rights of a third party. The Company has not made payments pursuant to these provisions. The Company has not identified any losses that are probable under these provisions and, accordingly, the Company has not recorded a liability related to these indemnification provisions. |
Restructuring |
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
RESTRUCTURING | RESTRUCTURING 2015 Other Restructuring Program On November 17, 2015, the Company announced the implementation of a restructuring program designed to simplify the Company’s enterprise go-to-market motion and roles while improving coverage, reflect changes in the Company’s product focus, and balance resources with demand across the Company’s marketing, general and administration areas. The 2015 Other Restructuring Program eliminated approximately 700 full-time positions, of which 350 were communicated in 2015 and 350 in the first quarter of 2016. During the three months ended March 31, 2016, the Company incurred costs of $39.1 million associated with the program. The majority of these charges are related to employee severance, outplacement, professional service fees, and facility closing costs. The majority of the activities related to the 2015 Other Restructuring Program were substantially completed as of the end of the first quarter of 2016. As of March 31, 2016, total charges related to the 2015 Other Restructuring Program incurred since inception were $68.8 million. 2015 Restructuring Program On January 28, 2015, the Company announced the implementation of a restructuring program designed to increase strategic focus and operational efficiency and began to execute against the program in February 2015. As a result, the Company eliminated approximately 700 full-time positions in the first half of 2015. During the three months ended March 31, 2016, the Company incurred $7.0 million primarily related to employee severance arrangements and the consolidation of leased facilities. The majority of the activities related to the 2015 Restructuring Program were substantially completed by the end of 2015. As of March 31, 2016, total charges related to the 2015 Restructuring Program incurred since inception were $75.9 million. 2014 Restructuring Program During the first quarter of 2014, the Company announced the implementation of the 2014 Restructuring Program to better align resources to strategic initiatives. As a result, the Company reduced its headcount by approximately 325 full-time positions since inception. The pre-tax charges incurred were primarily related to severance and other costs directly related to the reduction of the Company's workforce. The activities under the 2014 Restructuring Program were substantially completed as of the end of the first quarter of 2015. As of March 31, 2016, total charges related to the 2014 Restructuring Program incurred since inception were $22.2 million, primarily related to employee severance and related costs. Restructuring Charges by Segment Restructuring charges by segment consists of the following (in thousands):
Restructuring accruals The activity in the Company’s restructuring accruals for the three months ended March 31, 2016 is summarized as follows (in thousands):
As of March 31, 2016, the $46.4 million in outstanding restructuring accruals primarily relates to the Enterprise and Service Provider segment. |
Proposed Spin-off Transaction |
3 Months Ended |
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Mar. 31, 2016 | |
Restructuring and Related Activities [Abstract] | |
Proposed Spin-off Transaction | PROPOSED SPIN-OFF TRANSACTION As announced in November 2015, the Company is pursuing a plan to spinoff its GoTo family of products into a separate, publicly traded company. The company established as a result of the spinoff will be made up of the following products and services: GoToAssist, GoToMeeting, GoToMyPC, GoToTraining, GoToWebinar, Grasshopper and OpenVoice. The proposed separation, which is intended to be a tax-free spinoff to the Company's stockholders, is expected to be completed in the second half of 2016. Upon completion of the separation, Chris Hylen, who currently serves as the Company's Senior Vice President and General Manager of the Mobility Apps business unit, will serve as Chief Executive Officer of the new spinoff company. The proposed spinoff is subject to certain conditions, including, among others, obtaining final approval from the Company's Board of Directors, receipt of a favorable opinion and/or rulings with respect to the tax-free nature of the transaction for federal income tax purposes and the effectiveness of a Form 10 filing with the SEC. The Company expects to incur significant costs in connection with the planned separation of its GoTo business. These costs relate primarily to third-party advisory and consulting services, retention payments to certain employees, incremental stock-based compensation and other costs directly related to the separation. Costs related to employee retention or stock-based compensation are classified on a basis consistent with their regular compensation charges and included within Cost of net revenues, Research and development, Sales, marketing and services, or General and administrative expense in the condensed consolidated statements of income as applicable. Costs other than those related to employees are included within Separation expense in the condensed consolidated statements of income. During the quarter ended March 31, 2016, the Company incurred approximately $14.7 million related to separation costs. The Company expects to incur additional separation costs in 2016 until it completes the separation of the GoTo business. The Company currently expects to incur, in the aggregate, approximately $100.0 million to $110.0 million in separation costs, although that estimate is subject to a number of assumptions and uncertainties and the actual amount of separation costs could differ materially from this estimate. These estimates do not include potential tax related charges or potential capital expenditures which may be incurred related to the proposed transaction. These additional costs could be significant. |
Recent Accounting Pronouncements |
3 Months Ended |
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Mar. 31, 2016 | |
Accounting Policies [Abstract] | |
RECENT ACCOUNTING PRONOUNCEMENTS | RECENT ACCOUNTING PRONOUNCEMENTS In March 2016, the Financial Accounting Standards Board issued an accounting standard update on the accounting of stock-based compensation. The guidance requires the recognition of the income tax effects of awards in the income statement when the awards vest or are settled, thus eliminating additional paid in capital pools. The guidance also allows for the employer to repurchase more of an employee’s shares for tax withholding purposes without triggering liability accounting. In addition, the guidance allows for a policy election to account for forfeitures as they occur rather than on an estimated basis. The new guidance is effective for annual reporting periods beginning after December 15, 2016. Early adoption is permitted. The Company is currently evaluating the potential impact of this standard on its financial position and results of operations. In February 2016, the Financial Accounting Standards Board issued an accounting standard update on the accounting of leases. The new guidance requires that lessees in a leasing arrangement recognize a right-of-use asset and a lease liability for most leases (other than leases that meet the definition of a short-term lease). The liability will be equal to the present value of lease payments. The asset will be based on the liability, subject to adjustment, such as for initial direct costs. The new guidance is effective for annual reporting periods beginning after December 15, 2018. Early adoption is permitted. The new standard must be adopted using a modified retrospective transition, and provides for certain practical expedients. Transition will require application of the new guidance at the beginning of the earliest comparative period presented. The Company is currently evaluating the potential impact of this standard on its financial position and results of operations. 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 as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The Company adopted this standard effective January 1, 2016. As of March 31, 2016, the Company classified deferred financing costs as a direct deduction from the carrying value of the long-term debt liability on the condensed consolidated balance sheets. Additionally, the Company retroactively adjusted the long-term debt liability presented as of December 31, 2015 by reducing the long-term debt liability by the amount of the deferred financing costs of $13.9 million and reducing the deferred financing costs asset included in other assets on the on the condensed consolidated balance sheets by a corresponding amount. The adoption of this standard did not have a material impact on the Company's consolidated financial position, results of operations and cash flows. In April 2015, Financial Accounting Standards Board issued an accounting standard update on customer's accounting for fees paid in a cloud computing arrangement. The amendments in this update provide guidance about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, the customer should account for the software license element of the arrangement consistent with other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. The Company adopted this standard effective January 1, 2016 on a prospective basis. Adoption of this standard did not have a material impact on the Company's financial position and results of operations. In May 2014, the Financial Accounting Standards Board issued an accounting standard update on revenue recognition. The new guidance creates a single, principle-based model for revenue recognition and expands and improves disclosures about revenue. In July 2015, the Financial Accounting Standards Board issued an accounting standard update that defers the effective date of the new revenue recognition standard by one year. The new guidance is effective for annual reporting periods beginning on or after December 15, 2017, and must be adopted using either a full retrospective approach for all periods presented in the period of adoption or a modified retrospective approach. The Company has initiated an assessment of its systems, data and processes related to the implementation of this accounting standard, which is expected to be completed during 2016. The Company is currently evaluating the potential impact of this standard on its financial position and results of operations. |
Significant Accounting Policies (Policy) |
3 Months Ended |
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Mar. 31, 2016 | |
Accounting Policies [Abstract] | |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Significant estimates made by management include the provision for doubtful accounts receivable, the provision to reduce obsolete or excess inventory to market, the provision for estimated returns, as well as sales allowances, the assumptions used in the valuation of stock-based awards, the assumptions used in the discounted cash flows to mark certain of its investments to market, the valuation of the Company’s goodwill, net realizable value of product related and other intangible assets, the fair value of convertible senior notes, the provision for lease losses, 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 condensed consolidated financial position and results of operations taken as a whole, the actual amounts of such items, when known, will vary from these estimates. |
Available-for-sale Investments | Available-for-sale Investments Short-term and long-term available-for-sale investments as of March 31, 2016 and December 31, 2015 primarily consist of agency securities, corporate securities, municipal securities and government securities. Investments classified as available-for-sale are stated at fair value with unrealized gains and losses, net of taxes, reported in Accumulated other comprehensive loss. The Company classifies its available-for-sale investments as current and non-current based on their actual remaining time to maturity. The Company does not recognize changes in the fair value of its available-for-sale investments in income unless a decline in value is considered other-than-temporary in accordance with the authoritative guidance. The Company’s investment policy is designed to limit exposure to any one issuer depending on credit quality. The Company uses information provided by third parties to adjust the carrying value of certain of its investments to fair value at the end of each period. Fair values are based on a variety of inputs and may include interest rates, known historical trades, yield curve information, benchmark data, prepayment speeds, credit quality and broker/dealer quotes. See Note 5 for investment information. |
Revenue Recognition | Revenue Recognition Net revenues include the following categories: Product and licenses, SaaS, License updates and maintenance and Professional services. Product and licenses revenues primarily represent fees related to the licensing of the Company’s software and hardware appliances. These revenues are reflected net of sales allowances, cooperative advertising agreements, partner incentive programs and provisions for returns. SaaS revenues consist primarily of fees related to online service agreements, which are recognized ratably over the contract term, which is typically 12 months. 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. 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 program that provides subscribers with immediate access to software upgrades, enhancements and maintenance releases when and if they become available during the term of the contract. Subscription Advantage and maintenance fees are recognized ratably over the term of the contract, which is typically 12 to 24 months. The Company capitalizes certain third-party commissions related to Subscription Advantage, maintenance and support renewals. The capitalized commissions are amortized to Sales, marketing and services expense at the time the related deferred revenue is recognized as revenue. Hardware and software maintenance and support contracts are typically sold separately. Hardware maintenance includes technical support, the latest software upgrades when and if they become available, and replacement of malfunctioning appliances. Dedicated account management is available as an add-on to the program for a higher level of service. Software maintenance includes unlimited technical support, immediate access to software upgrades, enhancements and maintenance releases when and if they become available during the term of the contract 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 and fees from product training and certification, which are recognized as the services are provided. The Company recognizes revenue when it is earned and when all of the following criteria are met: persuasive evidence of the arrangement exists; delivery has occurred or the service has been provided and the Company has no remaining obligations; the fee is fixed or determinable; and collectability is probable. The majority of the Company’s product and license revenue consists of revenue from the sale of software products. Software sales generally include a perpetual license to the Company’s software and is subject to the industry specific software revenue recognition guidance. In accordance with this guidance, the Company allocates revenue to license updates related to its stand-alone software and any other undelivered elements of the arrangement based on vendor specific objective evidence (“VSOE”) of fair value of each element and such amounts are deferred until the applicable delivery criteria and other revenue recognition criteria described above have been met. The balance of the revenues, net of any discounts inherent in the arrangement, is recognized at the outset of the arrangement using the residual method as the product licenses are delivered. If management cannot objectively determine the fair value of each undelivered element based on VSOE of fair value, revenue recognition is deferred until all elements are delivered, all services have been performed, or until fair value can be objectively determined. For hardware appliance and software transactions, the arrangement consideration is allocated to stand-alone software deliverables as a group and the non-software deliverables based on the relative selling prices using the selling price hierarchy in the revenue recognition guidance. The selling price hierarchy for a deliverable is based on its VSOE if available, third-party evidence of selling price ("TPE") if VSOE is not available, or estimated selling price ("ESP") if neither VSOE nor TPE is available. The Company then recognizes revenue on each deliverable in accordance with its policies for product and service revenue recognition. VSOE of selling price is based on the price charged when the element is sold separately. In determining VSOE, the Company requires that a substantial majority of the selling prices fall within a reasonable range based on historical discounting trends for specific products and services. TPE of selling price is established by evaluating competitor products or services in stand-alone sales to similarly situated customers. However, as the Company’s products contain a significant element of proprietary technology and its solutions offer substantially different features and functionality, the comparable pricing of products with similar functionality typically cannot be obtained. Additionally, as the Company is unable to reliably determine what competitors products’ selling prices are on a stand-alone basis, the Company is not typically able to determine TPE. The estimate of selling price is established considering multiple factors including, but not limited to, pricing practices in different geographies and through different sales channels and competitor pricing strategies. The Citrix Service Provider ("CSP") program provides subscription-based services in which the CSP partners host software services to their end users. The fees from the CSP program are recognized based on usage and as the CSP services are provided to their end users. For the Company’s non-software transactions, it allocates the arrangement consideration based on the relative selling price of the deliverables. For the Company’s hardware appliances, it uses ESP as its selling price. For the Company’s support and services, it generally uses VSOE as its selling price. When the Company is unable to establish selling price using VSOE for its support and services, the Company uses ESP in its allocation of arrangement consideration. The Company’s Mobility Apps products and a majority of Cloud Services are considered hosted service arrangements per the authoritative guidance, or SaaS. Generally, the Company’s Mobility Apps products are sold separately and not bundled with the Enterprise and Service Provider business unit’s products and services. In the normal course of business, the Company is not obligated to accept product returns from its distributors under any conditions, unless the product item is defective in manufacture. The Company establishes provisions for estimated returns, as well as other sales allowances, concurrently with the recognition of revenue. The provisions are established based upon consideration of a variety of factors, including, among other things, recent and historical return rates for both specific products and distributors and the impact of any new product releases and projected economic conditions. Product returns are provided for in the condensed consolidated financial statements and have historically been within management’s expectations. Allowances for estimated product returns amounted to approximately $1.0 million and $1.4 million at March 31, 2016 and December 31, 2015, respectively. The Company also records estimated reductions to revenue for customer programs and incentive offerings, including volume-based incentives. The Company could take actions to increase its customer incentive offerings, which could result in an incremental reduction to revenue at the time the incentive is offered. |
Foreign Currency | Foreign Currency The functional currency for all of the Company’s wholly-owned foreign subsidiaries is the U.S. dollar. Monetary assets and liabilities of such subsidiaries are remeasured into U.S. dollars at exchange rates in effect at the balance sheet date, and revenues and expenses are remeasured at average rates prevailing during the year. Effective January 1, 2015, the functional currency of the Company’s wholly-owned foreign subsidiaries of its Mobility Apps business unit became the U.S. dollar as a result of a reorganization in the foreign subsidiaries' operations. Prior to January 1, 2015, the functional currency of the Company’s wholly-owned foreign subsidiaries of its Mobility Apps business unit was the currency of the country in which each subsidiary is located. The Company translated assets and liabilities of these foreign subsidiaries at exchange rates in effect at the balance sheet date and included accumulated net translation adjustments in equity as a component of Accumulated other comprehensive loss. The change in functional currency is applied on a prospective basis, therefore any gains and losses that were previously recorded in Accumulated other comprehensive loss remain unchanged from January 1, 2015. Foreign currency transaction gains and losses are the result of exchange rate changes on transactions denominated in currencies other than the functional currency, including U.S. dollars. The remeasurement of those foreign currency transactions is included in determining net income or loss for the period of exchange. See Note 9 for information on the Company's Enterprise and Service Provider and Mobility Apps business units. |
Accounting for Stock-Based Compensation Plans | Accounting for Stock-Based Compensation Plans The Company has various stock-based compensation plans for its employees and outside directors and accounts for stock-based compensation arrangements in accordance with the authoritative guidance, which requires the Company to measure and record compensation expense in its condensed consolidated financial statements using a fair value method. See Note 7 for further information regarding the Company’s stock-based compensation plans. |
Earnings Per Share (Tables) |
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Net Income Per Share Basic And Diluted | The following table sets forth the computation of basic and diluted net income per share (in thousands, except per share information):
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Investments (Tables) |
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Investments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of investments in available-for-sale securities at fair values | Investments in available-for-sale securities at fair value were as follows for the periods ended (in thousands):
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Fair Value Measurements (Tables) |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Assets And Liabilities Measured At Fair Value On A Recurring Basis | Assets and Liabilities Measured at Fair Value on a Recurring Basis
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Fair Value, by Balance Sheet Grouping | As of March 31, 2016, the fair value of the Convertible Notes, which was determined based on inputs that are observable in the market (Level 2) based on the closing trading price per $100 as of the last day of trading for the quarter ended March 31, 2016, and carrying value of debt instruments (carrying value excludes the equity component of the Company’s Convertible Notes classified in equity) was as follows (in thousands):
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Stock-Based Compensation (Tables) |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Share-based Payment Award, Employee Stock Purchase Plan, Valuation Assumptions | The Company used the Black-Scholes model to estimate the fair value of its Employee Stock Purchase Plan awards with the following weighted-average assumptions:
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Schedule of Total Stock-based Compensation Recognized by Income Statement Classification | The detail of the total stock-based compensation recognized by income statement classification is as follows (in thousands):
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Schedule of Assumptions Used to Value Nonvested Share Grants | The grant date fair value of the non-vested performance stock unit awards was determined through the use of a Monte Carlo simulation model, which utilized multiple input variables that determined the probability of satisfying the market condition requirements applicable to each award as follows:
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Goodwill And Other Intangible Assets (Tables) |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of The Change In Goodwill | The following table presents the change in goodwill allocated to the Company’s reportable segments during the three months ended March 31, 2016 (in thousands):
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Schedule Of Intangible Assets | Intangible assets consist of the following (in thousands):
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Schedule Of Estimated Future Amortization Expense | Estimated future amortization expense of intangible assets with finite lives as of March 31, 2016 is as follows (in thousands):
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Segment Information (Tables) |
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Net Revenues And Profit By Segment | Net revenues and segment profit, classified by the Company’s two reportable segments were as follows (in thousands):
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Revenue by Product Grouping | Revenues by product grouping for the Company’s Enterprise and Service Provider and Mobility Apps business units were as follows (in thousands):
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Revenue by Geographic Location | The following table presents revenues by segment and geographic location, for the following periods (in thousands):
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Convertible Senior Notes (Tables) |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Convertible Debt | The Convertible Notes consist of the following (in thousands):
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Schedule of Interest Expense Recognized Related to Convertible Notes | The following table includes total interest expense recognized related to the Convertible Notes (in thousands):
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Derivative Financial Instruments (Tables) |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of The Fair Values Of Derivative Instruments | Fair Values of Derivative Instruments
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Schedule of Derivative Instruments, Effect on Other Comprehensive Income (Loss) | The Effect of Derivative Instruments on Financial Performance
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Schedule Of Effect Of Derivative Instruments On Financial Performance |
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Schedule Of Net Notional Foreign Currency Forward Contracts Outstanding | As of March 31, 2016, the Company had the following net notional foreign currency forward contracts outstanding (in thousands):
|
Comprehensive Income (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of changes in accumulated other comprehensive income by component | The changes in Accumulated other comprehensive loss by component, net of tax, are as follows:
|
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Schedule of reclassification out of accumulated other comprehensive income | Reclassifications out of Accumulated other comprehensive loss are as follows:
* Operating expenses amounts allocated to Research and development, Sales, marketing and services, and General and administrative are not individually significant. |
Restructuring (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Restructuring Charges by Segment | Restructuring charges by segment consists of the following (in thousands):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Restructuring Accruals | The activity in the Company’s restructuring accruals for the three months ended March 31, 2016 is summarized as follows (in thousands):
|
Basis Of Presentation (Details) |
3 Months Ended |
---|---|
Mar. 31, 2016
segment
| |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of Reportable Segments | 2 |
Significant Accounting Policies (Narrative) (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Dec. 31, 2015 |
|
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | ||
Allowance for estimated product returns | $ 1.0 | $ 1.4 |
Weighted Average [Member] | Online Service Agreements [Member] | ||
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | ||
Revenue recognition, period for recognition | 12 months | |
Minimum [Member] | License Update [Member] | ||
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | ||
Revenue recognition, period for recognition | 12 months | |
Maximum [Member] | License Update [Member] | ||
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | ||
Revenue recognition, period for recognition | 24 months |
Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Numerator: | ||
Net income | $ 83,463 | $ 28,887 |
Denominator: | ||
Denominator for basic earnings per share - weighted-average shares outstanding | 154,067,000 | 160,323,000 |
Effect of dilutive employee stock awards | 1,878,000 | 1,713,000 |
Denominator for diluted earnings per share - weighted-average shares outstanding | 155,945,000 | 162,036,000 |
Basic earnings per share (in dollars per share) | $ 0.54 | $ 0.18 |
Diluted earnings per share (in dollars per share) | $ 0.54 | $ 0.18 |
Anti-dilutive weighted-average shares from stock awards | 1,202,000 | 3,651,000 |
Share Based Compensation Arrangements By Share Based Payment Award Options Excluded for Calculation of Diluted EPS Weighted Average Exercise Price | $ 79.72 | |
Senior Notes Due 2019 [Member] | ||
Denominator: | ||
Convertible debt, conversion price (in dollars per share) | $ 90.00 | |
Equity Option [Member] | ||
Denominator: | ||
Effect of dilutive employee stock awards | 1,104,819 |
Investments (Schedule of Available-for-sale Securities) (Details) - USD ($) $ in Thousands |
Mar. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Investment [Line Items] | ||
Amortized Cost | $ 1,490,484 | $ 1,397,439 |
Gross Unrealized Gains | 2,297 | 870 |
Gross Unrealized Losses | (843) | (3,493) |
Fair Value | 1,491,938 | 1,394,816 |
Agency securities [Member] | ||
Investment [Line Items] | ||
Amortized Cost | 540,090 | 530,981 |
Gross Unrealized Gains | 1,057 | 757 |
Gross Unrealized Losses | (193) | (1,216) |
Fair Value | 540,954 | 530,522 |
Corporate securities [Member] | ||
Investment [Line Items] | ||
Amortized Cost | 736,440 | 699,210 |
Gross Unrealized Gains | 1,048 | 90 |
Gross Unrealized Losses | (645) | (1,929) |
Fair Value | 736,843 | 697,371 |
Municipal securities [Member] | ||
Investment [Line Items] | ||
Amortized Cost | 3,889 | 14,872 |
Gross Unrealized Gains | 22 | 14 |
Gross Unrealized Losses | (1) | (8) |
Fair Value | 3,910 | 14,878 |
Government securities [Member] | ||
Investment [Line Items] | ||
Amortized Cost | 210,065 | 152,376 |
Gross Unrealized Gains | 170 | 9 |
Gross Unrealized Losses | (4) | (340) |
Fair Value | $ 210,231 | $ 152,045 |
Fair Value Measurements (Assets and Liabilities on a Nonrecurring Basis) (Details) - Nonrecurring [Member] - Level 3 [Member] - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cost-method investments, carrying amount, evaluated for impairment | $ 1.0 | |
Cost method investments, fair value after impairment | 0.7 | |
Other Income (Expense) [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cost method investment, impairment charge included other income | $ 0.3 | $ 0.5 |
Fair Value Measurements (Additional Information Regarding Fair Value Measurements) (Details) - USD ($) |
Mar. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Convertible Senior Notes | $ 1,320,240,000 | $ 1,311,071,000 |
Level 2 [Member] | Fair Value [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Closing trading price per $100 as of the last day of trading for the quarter | 100 | |
Convertible Senior Notes | 1,564,000,000 | |
Senior Notes Due 2019 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Convertible Senior Notes | 1,320,240,000 | $ 1,311,071,000 |
Senior Notes Due 2019 [Member] | Level 2 [Member] | Carrying Value [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Convertible Senior Notes | $ 1,320,240,000 |
Goodwill And Other Intangible Assets (Schedule Of Change In Goodwill) (Details) - USD ($) $ in Thousands |
3 Months Ended | ||||||
---|---|---|---|---|---|---|---|
Mar. 31, 2016 |
Jan. 01, 2016 |
||||||
Statement [Line Items] | |||||||
Reallocation of goodwill resulting from realignment within reportable segments | $ 86,500 | ||||||
Goodwill [Roll Forward] | |||||||
Balance at January 1, 2016 | $ 1,962,722 | ||||||
Additions | [1] | 0 | |||||
Other | (490) | ||||||
Balance at March 31, 2016 | 1,962,232 | ||||||
Enterprise and Service Provider [Member] | |||||||
Goodwill [Roll Forward] | |||||||
Balance at January 1, 2016 | 1,581,805 | ||||||
Additions | 0 | ||||||
Other | [2] | (490) | |||||
Balance at March 31, 2016 | 1,581,315 | ||||||
Mobility Apps [Member] | |||||||
Goodwill [Roll Forward] | |||||||
Balance at January 1, 2016 | 380,917 | ||||||
Additions | 0 | ||||||
Other | 0 | ||||||
Balance at March 31, 2016 | $ 380,917 | ||||||
|
Goodwill And Other Intangible Assets (Schedule Of Estimated Future Amortization Expense) (Details) $ in Thousands |
Mar. 31, 2016
USD ($)
|
---|---|
Finite-Lived Intangible Assets, Amortization Expense, Maturity Schedule [Abstract] | |
2016 (remaining nine months) | $ 65,900 |
2017 | 67,796 |
2018 | 59,702 |
2019 | 37,690 |
2020 | 19,111 |
Thereafter | 31,597 |
Total | $ 281,796 |
Segment Information (Revenues By Product Grouping) (Details) - USD ($) $ in Thousands |
3 Months Ended | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net revenues | $ 825,678 | $ 760,802 | |||||||||
Operating Segments [Member] | Enterprise and Service Provider Division [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net revenues | 658,773 | 613,125 | |||||||||
Operating Segments [Member] | Mobility Apps [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net revenues | 166,905 | 147,677 | |||||||||
Operating Segments [Member] | Workspace Services revenues [Member] | Enterprise and Service Provider Division [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net revenues | [1] | 400,916 | 389,363 | ||||||||
Operating Segments [Member] | Delivery Networking revenues [Member] | Enterprise and Service Provider Division [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net revenues | [2] | 195,470 | 162,969 | ||||||||
Operating Segments [Member] | Cloud Services revenues [Member] | Enterprise and Service Provider Division [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net revenues | [3] | 29,732 | 21,777 | ||||||||
Operating Segments [Member] | Professional Services [Member] | Enterprise and Service Provider Division [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net revenues | [4] | 32,607 | 36,860 | ||||||||
Other Income [Member] | Operating Segments [Member] | Enterprise and Service Provider Division [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net revenues | $ 48 | $ 2,156 | |||||||||
|
Segment Information (Revenues By Geographic Location) (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Net revenues | $ 825,678 | $ 760,802 |
Operating Segments [Member] | Enterprise and Service Provider Division [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Net revenues | 658,773 | 613,125 |
Operating Segments [Member] | Enterprise and Service Provider Division [Member] | Americas [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Net revenues | 388,686 | 339,846 |
Operating Segments [Member] | Enterprise and Service Provider Division [Member] | EMEA [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Net revenues | 206,931 | 204,682 |
Operating Segments [Member] | Enterprise and Service Provider Division [Member] | Asia-Pacific [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Net revenues | 63,156 | 68,597 |
Operating Segments [Member] | Mobility Apps [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Net revenues | 166,905 | 147,677 |
Operating Segments [Member] | Mobility Apps [Member] | Americas [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Net revenues | 140,821 | 122,946 |
Operating Segments [Member] | Mobility Apps [Member] | EMEA [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Net revenues | 21,086 | 19,812 |
Operating Segments [Member] | Mobility Apps [Member] | Asia-Pacific [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Net revenues | $ 4,998 | $ 4,919 |
Convertible Senior Notes (Narrative) (Details) - USD ($) |
3 Months Ended | 12 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|
Apr. 30, 2014 |
Mar. 31, 2016 |
Mar. 31, 2015 |
Jun. 30, 2014 |
Dec. 31, 2014 |
Dec. 31, 2015 |
|||
Debt Instrument [Line Items] | ||||||||
Amount used to repurchase stock | $ 28,689,000 | $ 124,928,000 | ||||||
Convertible notes | $ 1,320,240,000 | $ 1,311,071,000 | ||||||
Purchase From Accelerated Share Repurchase [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Stock repurchased during period, value | $ 1,400,000,000 | |||||||
Senior Notes Due 2019 [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Convertible debt | $ 1,440,000,000 | |||||||
Stated interest rate percentage | 0.50% | |||||||
Proceeds from convertible debt | $ 1,420,000,000 | |||||||
Payments for (proceeds from) hedge, investing activities | $ 82,600,000 | |||||||
Stock repurchased during period, value | 1,500,000,000 | |||||||
Convertible debt, conversion ratio | 0.0111111 | |||||||
Debt instrument, face amount | $ 1,000 | |||||||
Convertible debt, conversion price (in dollars per share) | $ 90.00 | |||||||
Repurchase price as a percent of principal amount | 100.00% | |||||||
Amortization of debt discount, effective interest method, percent | 3.00% | |||||||
Convertible notes | $ 1,320,240,000 | 1,311,071,000 | ||||||
Equity component | [1] | 162,869,000 | $ 162,869,000 | |||||
Deferred tax liability, equity component | $ 8,200,000 | |||||||
Shares Of Common Stock Covered By Note Hedges | 16,000,000 | |||||||
Warrant transaction | 16,000,000 | |||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 120.0 | |||||||
Warrants exercised (shares) | 0 | |||||||
Privately Negotiated Transaction [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Amount used to repurchase stock | $ 101,000,000 | |||||||
|
Convertible Senior Notes (Details) - USD ($) $ in Thousands |
Mar. 31, 2016 |
Dec. 31, 2015 |
||
---|---|---|---|---|
Debt Instrument [Line Items] | ||||
Net carrying amount | $ 1,320,240 | $ 1,311,071 | ||
Senior Notes Due 2019 [Member] | ||||
Debt Instrument [Line Items] | ||||
Principal | 1,437,500 | 1,437,500 | ||
Less: note discount and issuance costs | (117,260) | (126,429) | ||
Net carrying amount | 1,320,240 | 1,311,071 | ||
Equity component | [1] | $ 162,869 | $ 162,869 | |
|
Convertible Notes - Schedule of Interest Expense (Details) - Senior Notes Due 2019 [Member] - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Debt Instrument [Line Items] | ||
Contractual interest expense | $ 1,797 | $ 1,797 |
Amortization of debt issuance costs | 1,009 | 982 |
Amortization of debt discount | 8,161 | 7,920 |
Debt Instrument, Interest Expense, Total | $ 10,967 | $ 10,699 |
Credit Facility (Details) - Line of Credit [Member] |
3 Months Ended | ||
---|---|---|---|
Jan. 07, 2015
USD ($)
|
Mar. 31, 2016
USD ($)
|
Mar. 31, 2015
USD ($)
|
|
Line of Credit Facility [Line Items] | |||
Term of credit facility | 5 years | ||
Aggregate amount | $ 250,000,000 | ||
Additional borrowing capacity | $ 250,000,000 | ||
Weighted average interest rate (percent) | 1.71% | ||
Amount outstanding | $ 0 | $ 95,000,000 | |
Consolidated leverage ratio | 3.5 | ||
Consolidated interest coverage ratio | 3.0 | ||
Letter of Credit [Member] | |||
Line of Credit Facility [Line Items] | |||
Aggregate amount | $ 25,000,000 | ||
Swing Line Loans [Member] | |||
Line of Credit Facility [Line Items] | |||
Aggregate amount | $ 10,000,000 | ||
LIBOR [Member] | |||
Line of Credit Facility [Line Items] | |||
Basis spread on LIBOR (percent) | 1.10% | ||
Minimum [Member] | |||
Line of Credit Facility [Line Items] | |||
Quarterly facility fee (percent) | 0.125% | ||
Minimum [Member] | LIBOR [Member] | |||
Line of Credit Facility [Line Items] | |||
Basis spread on LIBOR (percent) | 1.00% | ||
Maximum [Member] | |||
Line of Credit Facility [Line Items] | |||
Quarterly facility fee (percent) | 0.20% | ||
Maximum [Member] | LIBOR [Member] | |||
Line of Credit Facility [Line Items] | |||
Basis spread on LIBOR (percent) | 1.30% |
Derivative Financial Instruments (Narrative) (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Dec. 31, 2015 |
|
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Cash flow hedge instrument term, maximum | 12 months | |
Cumulative unrealized gain (loss) on cash flow derivative instruments in accumulated other comprehensive loss | $ 1.1 | $ (2.3) |
Derivative Financial Instruments (Schedule Of The Fair Values Of Derivative Instruments) (Details) - Cash Flow Hedging [Member] - Foreign Exchange Contract [Member] - Forward Contracts [Member] - USD ($) $ in Thousands |
Mar. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Designated as Hedging Instrument [Member] | Prepaid Expenses and Other Current Assets [Member] | ||
Asset Derivatives | ||
Asset derivatives | $ 2,654 | $ 436 |
Designated as Hedging Instrument [Member] | Accrued Expenses and Other Current Liabilities [Member] | ||
Liability Derivatives | ||
Liability derivatives | 1,434 | 2,895 |
Not Designated as Hedging Instrument [Member] | Prepaid Expenses and Other Current Assets [Member] | ||
Asset Derivatives | ||
Asset derivatives | 1,182 | 627 |
Not Designated as Hedging Instrument [Member] | Accrued Expenses and Other Current Liabilities [Member] | ||
Liability Derivatives | ||
Liability derivatives | $ 1,845 | $ 783 |
Derivative Financial Instruments (Schedule Of Effect Of Derivative Instruments On Financial Performance) (Details) - Foreign Exchange Contract [Member] - Forward Contracts [Member] - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Not Designated as Hedging Instrument [Member] | Other Expense, Net [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of Gain Recognized in Income on Derivative | $ (1,973) | $ 1,636 |
Cash Flow Hedging [Member] | Designated as Hedging Instrument [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of Gain (Loss) Recognized in Other Comprehensive Income (Effective Portion) | 3,387 | (1,444) |
Cash Flow Hedging [Member] | Designated as Hedging Instrument [Member] | Operating Expense [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of Loss Reclassified from Accumulated Other Comprehensive Loss (Effective Portion) | $ (1,165) | $ (4,247) |
Derivative Financial Instruments (Schedule Of Net Notional Foreign Currency Forward Contracts Outstanding) (Details) - Mar. 31, 2016 € in Thousands, ₨ in Thousands, ¥ in Thousands, ¥ in Thousands, £ in Thousands, SGD in Thousands, SFr in Thousands, HKD in Thousands, DKK in Thousands, CAD in Thousands, BRL in Thousands, AUD in Thousands |
SGD |
INR (₨) |
DKK |
GBP (£) |
JPY (¥) |
CHF (SFr) |
AUD |
HKD |
BRL |
EUR (€) |
CAD |
CNY (¥) |
---|---|---|---|---|---|---|---|---|---|---|---|---|
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||
Net notional foreign currency forward contracts outstanding | SGD 10,394 | ₨ 436,247 | DKK 55,575 | £ 8,567 | ¥ 1,432,644 | SFr 37,500 | AUD 3,300 | HKD 36,625 | BRL 5,700 | € 6,999 | CAD 2,175 | ¥ 36,400 |
Comprehensive Income (Changes in Accumulated Other Comprehensive Loss by Component) (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Balance at December 31, 2015 | $ (28,527) | |
Other comprehensive income before reclassifications | 6,321 | |
Amounts reclassified from accumulated other comprehensive loss | 1,143 | |
Other comprehensive income | 7,464 | $ 818 |
Balance at March 31, 2016 | (21,063) | |
Foreign Currency [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Balance at December 31, 2015 | (16,346) | |
Other comprehensive income before reclassifications | 0 | |
Amounts reclassified from accumulated other comprehensive loss | 0 | |
Other comprehensive income | 0 | |
Balance at March 31, 2016 | (16,346) | |
Unrealized Gain (Loss) on Available-for-sale Securities [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Balance at December 31, 2015 | (2,900) | |
Other comprehensive income before reclassifications | 4,099 | |
Amounts reclassified from accumulated other comprehensive loss | (22) | |
Other comprehensive income | 4,077 | |
Balance at March 31, 2016 | 1,177 | |
Unrealized (Loss) Gain on Derivative Instruments [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Balance at December 31, 2015 | (2,255) | |
Other comprehensive income before reclassifications | 2,222 | |
Amounts reclassified from accumulated other comprehensive loss | 1,165 | |
Other comprehensive income | 3,387 | |
Balance at March 31, 2016 | 1,132 | |
Other Comprehensive Loss on Pension Liability [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Balance at December 31, 2015 | (7,026) | |
Other comprehensive income before reclassifications | 0 | |
Amounts reclassified from accumulated other comprehensive loss | 0 | |
Other comprehensive income | 0 | |
Balance at March 31, 2016 | $ (7,026) |
Comprehensive Income (Reclassifications out of Accumulated Other Comprehensive Loss) (Details) - USD ($) $ in Thousands |
3 Months Ended | |||
---|---|---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Unrealized net gains on available-for-sale securities | $ 1,003 | $ 7,849 | ||
Unrealized net losses on cash flow hedges | 575,632 | 576,464 | ||
Net income | (83,463) | $ (28,887) | ||
Reclassification out of Accumulated Other Comprehensive Income [Member] | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Net income | 1,143 | |||
Unrealized Gain on Available-for-sale Securities [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member] | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Unrealized net gains on available-for-sale securities | (22) | |||
Unrealized Gain on Derivative Instruments [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member] | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Unrealized net losses on cash flow hedges | [1] | $ 1,165 | ||
|
Income Taxes (Details) - USD ($) $ in Millions |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
Dec. 31, 2015 |
|
Income Tax Disclosure [Abstract] | |||
Net unrecognized tax benefit | $ 56.3 | $ 54.6 | |
Income tax interest and penalties accrued | 1.2 | ||
Deferred tax assets | $ 202.9 | ||
Effective tax rate | 18.60% | 18.90% | |
U.S. federal statutory rate | 35.00% |
Treasury Stock (Details) - USD ($) |
3 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Equity, Class of Treasury Stock [Line Items] | ||
Stock repurchase program, authorized amount | $ 6,300,000,000 | |
Available to repurchase common stock | 404,000,000 | |
Amount expended on share repurchases in open market transactions | $ 28,700,000 | $ 124,900,000 |
Number of shares repurchased | 426,300 | 1,982,115 |
Average per share price on share repurchases in open market transactions (in dollars per share) | $ 67.30 | $ 63.03 |
Number of shares withheld to satisfy minimum tax withholding obligations | 428,838 | 412,466 |
Payment for tax withholding related to vested stock units | $ 32,900,000 | $ 26,200,000 |
Amount Authorized in January 2016 [Member] | ||
Equity, Class of Treasury Stock [Line Items] | ||
Stock repurchase program, authorized amount | $ 400,000,000 |
Restructuring (Narrative) (Details) $ in Thousands |
1 Months Ended | 3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|---|
Nov. 17, 2015
position
|
Dec. 31, 2015
USD ($)
position
|
Mar. 31, 2016
USD ($)
position
|
Mar. 31, 2015
USD ($)
|
Jun. 30, 2015
position
|
|
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring | $ 46,065 | $ 33,951 | |||
Restructuring Reserve | $ 40,396 | 46,436 | |||
Employee Severance and Related Costs [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring | 36,452 | ||||
Consolidation of Leased Facilities [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring | $ 9,692 | ||||
2015 Other Restructuring Program [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Number of full-time positions eliminated | position | 700 | 350 | 350 | ||
Restructuring | $ 39,091 | ||||
Restructuring costs incurred since inception | 68,800 | ||||
Restructuring Reserve | $ 16,581 | 18,971 | |||
2015 Other Restructuring Program [Member] | Employee Severance and Related Costs [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring | 36,379 | ||||
2015 Other Restructuring Program [Member] | Consolidation of Leased Facilities [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring | $ 2,712 | ||||
2014 Restructuring Program [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Number of full-time positions eliminated | position | 325 | ||||
Restructuring costs incurred since inception | $ 22,200 | ||||
Restructuring Reserve | 1,121 | 1,121 | |||
2014 Restructuring Program [Member] | Employee Severance and Related Costs [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring | 0 | ||||
2014 Restructuring Program [Member] | Consolidation of Leased Facilities [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring | 0 | ||||
2015 Restructuring Program [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Number of full-time positions eliminated | position | 700 | ||||
Restructuring | 6,974 | ||||
Restructuring costs incurred since inception | 75,875 | ||||
Restructuring Reserve | $ 22,694 | 26,344 | |||
2015 Restructuring Program [Member] | Employee Severance and Related Costs [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring | 73 | ||||
2015 Restructuring Program [Member] | Consolidation of Leased Facilities [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring | 6,980 | ||||
Enterprise and Service Provider Division [Member] | 2015 Other Restructuring Program [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring | 38,503 | 0 | |||
Enterprise and Service Provider Division [Member] | 2014 Restructuring Program [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring | 0 | 834 | |||
Enterprise and Service Provider Division [Member] | 2015 Restructuring Program [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring | $ 7,053 | $ 32,755 |
Restructuring (Restructuring Charges by Segment) (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Restructuring Cost and Reserve [Line Items] | ||
Restructuring | $ 46,065 | $ 33,951 |
2014 Restructuring Program [Member] | Enterprise and Service Provider Division [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring | 0 | 834 |
2014 Restructuring Program [Member] | Mobility Apps [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring | 0 | 50 |
2015 Restructuring Program [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring | 6,974 | |
2015 Restructuring Program [Member] | Enterprise and Service Provider Division [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring | 7,053 | 32,755 |
2015 Restructuring Program [Member] | Mobility Apps [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring | (79) | 312 |
2015 Other Restructuring Program [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring | 39,091 | |
2015 Other Restructuring Program [Member] | Enterprise and Service Provider Division [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring | 38,503 | 0 |
2015 Other Restructuring Program [Member] | Mobility Apps [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring | $ 588 | $ 0 |
Restructuring (Activity in Restructuring Accruals) (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Restructuring Reserve [Roll Forward] | ||
Balance at January 1, 2016 | $ 40,396 | |
Employee severance and related costs | 46,065 | $ 33,951 |
Payments | (40,025) | |
Reversal of previous charges | 79 | |
Balance at March 31, 2016 | 46,436 | |
Employee Severance and Related Costs [Member] | ||
Restructuring Reserve [Roll Forward] | ||
Employee severance and related costs | 36,452 | |
Consolidation of Leased Facilities [Member] | ||
Restructuring Reserve [Roll Forward] | ||
Employee severance and related costs | 9,692 | |
2014 Restructuring Program [Member] | ||
Restructuring Reserve [Roll Forward] | ||
Balance at January 1, 2016 | 1,121 | |
Payments | 0 | |
Reversal of previous charges | 0 | |
Balance at March 31, 2016 | 1,121 | |
2014 Restructuring Program [Member] | Employee Severance and Related Costs [Member] | ||
Restructuring Reserve [Roll Forward] | ||
Employee severance and related costs | 0 | |
2014 Restructuring Program [Member] | Consolidation of Leased Facilities [Member] | ||
Restructuring Reserve [Roll Forward] | ||
Employee severance and related costs | 0 | |
2015 Restructuring Program [Member] | ||
Restructuring Reserve [Roll Forward] | ||
Balance at January 1, 2016 | 22,694 | |
Employee severance and related costs | 6,974 | |
Payments | (3,324) | |
Reversal of previous charges | (79) | |
Balance at March 31, 2016 | 26,344 | |
2015 Restructuring Program [Member] | Employee Severance and Related Costs [Member] | ||
Restructuring Reserve [Roll Forward] | ||
Employee severance and related costs | 73 | |
2015 Restructuring Program [Member] | Consolidation of Leased Facilities [Member] | ||
Restructuring Reserve [Roll Forward] | ||
Employee severance and related costs | 6,980 | |
2015 Other Restructuring Program [Member] | ||
Restructuring Reserve [Roll Forward] | ||
Balance at January 1, 2016 | 16,581 | |
Employee severance and related costs | 39,091 | |
Payments | (36,701) | |
Reversal of previous charges | 0 | |
Balance at March 31, 2016 | 18,971 | |
2015 Other Restructuring Program [Member] | Employee Severance and Related Costs [Member] | ||
Restructuring Reserve [Roll Forward] | ||
Employee severance and related costs | 36,379 | |
2015 Other Restructuring Program [Member] | Consolidation of Leased Facilities [Member] | ||
Restructuring Reserve [Roll Forward] | ||
Employee severance and related costs | $ 2,712 |
Proposed Spin-off Transaction (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Restructuring Cost and Reserve [Line Items] | ||
Separation costs | $ 14,687 | $ 0 |
Minimum [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Expected separation costs | 100,000 | |
Maximum [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Expected separation costs | $ 110,000 |
Recent Accounting Pronouncements Recent Accounting Pronouncements (Details) - Accounting Standards Update 2015-03 [Member] $ in Millions |
Dec. 31, 2015
USD ($)
|
---|---|
Debt Instrument [Line Items] | |
Long-term Debt | $ 13.9 |
Deferred financing costs | $ 13.9 |
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