DISCONTINUED OPERATIONS

On January 31, 2017, the Company completed the Spin-off of the GoTo Business. Refer to Note 1 for additional information regarding the Spin-off. The financial results of the GoTo Business are presented as Income (loss) from discontinued operations, net of income taxes in the condensed consolidated statements of income. The following table presents the financial results of the GoTo Business through the date of the Spin-off for the indicated periods and do not include corporate overhead allocations:

Major classes of line items constituting Income (loss) from discontinued operations related to the GoTo Business



	Three Months Ended June 30,		Six Months Ended June 30,
	2016		2017			2016
	(in thousands)
Net revenues	$	168,993	$	58,215		$	335,898
Cost of net revenues	37,131		15,456			76,412
Gross margin	131,862		42,759			259,486
Operating expenses:
Research and development	24,110		9,108			45,837
Sales, marketing and services	52,528		20,881			111,349
General and administrative	18,626		7,636			31,586
Amortization of other intangible assets	3,464		1,176			7,138
Restructuring	436		3,189			945
Separation	13,550		40,573			27,781
Total operating expenses	112,714		82,563			224,636
Income (loss) from discontinued operations before income taxes	19,148		(39,804		)	34,850
Income tax expense	4,539		2,900			10,032
Income (loss) from discontinued operations, net of income tax	$	14,609	$	(42,704	)	$	24,818

The Company incurred significant costs in connection with the 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 of the GoTo Business. During the three months ended June 30, 2016, the Company also incurred an additional $13.6 million of separation costs, which are included in discontinued operations. During the six months ended June 30, 2017 and 2016, the Company incurred $40.6 million and $27.8 million, respectively, of separation costs, which are included in discontinued operations. During the three months ended June 30, 2017 and 2016, the Company incurred $0.2 million and $0.4 million of separation costs, respectively, which are included in continuing operations. During the six months ended June 30, 2017 and 2016, the Company incurred $0.5 million and $0.8 million of separation costs, respectively, which are included in continuing operations.

The assets and liabilities of the GoTo Business were re-classified as discontinued operations as of December 31, 2016.

Carrying amounts of major classes of assets and liabilities included as part of discontinued operations related to the GoTo Business



	December 31, 2016
	(in thousands)
Assets
Current assets:
Cash	$	120,861
Accounts receivable, net	44,734
Prepaid expenses and other current assets	14,094
Total current assets of discontinued operations	179,689
Property and equipment, net	81,866
Goodwill	380,917
Other intangible assets, net	54,312
Deferred tax assets, net	18,496
Other assets	3,340
Long-term assets of discontinued operations	$	538,931
Total major classes of assets of discontinued operations	$	718,620

Liabilities
Current liabilities:
Accounts payable	$	11,333
Accrued expenses and other current liabilities	46,088
Current portion of deferred revenues	115,249
Total current liabilities of discontinued operations	172,670
Long-term portion of deferred revenues	4,224
Other liabilities	3,484
Long-term liabilities of discontinued operations	$	7,708
Total major classes of liabilities of discontinued operations	$	180,378

As a result of the Spin-off, the Company recorded a $478.2 million reduction in retained earnings which included net assets of $464.8 million. Of this amount, $28.5 million represents cash transferred to the GoTo Business, with the remainder considered a non-cash activity in the Condensed Consolidated Statements of Cash Flows. In accordance with the definitive agreements governing the Spin-off, the Company continues to evaluate certain assets and liabilities, which is expected to be finalized in the third quarter of fiscal year 2017. The Spin-off also resulted in a reduction of Accumulated other comprehensive loss associated with foreign currency translation adjustments of $13.4 million, which was reclassified to Retained earnings.

Citrix and GetGo entered into several agreements in connection with the Spin-off, including a transition services agreement ("TSA"), separation and distribution agreement, tax matters agreement, intellectual property matters agreement, and an employee matters agreement. Pursuant to the TSA, Citrix, GetGo and their respective subsidiaries are providing various services to each other on an interim, transitional basis. Services being provided by Citrix include, among others, finance, information technology and certain other administrative services. The services generally commenced on February 1, 2017 and are generally expected to terminate within 12 months of that date. Billings by Citrix under the TSA were not material for the three or six months ended June 30, 2017.