Segment Information

12 Months Ended

Dec. 31, 2016

Segment Reporting [Abstract]

SEGMENT INFORMATION

SEGMENT INFORMATION

The Enterprise and Service Provider and the GoTo Business segment 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 GoTo Business segment 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 and impairment of product related and other intangible assets, net interest and other expense, 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 product grouping 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 GoTo Business 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 separation of the GoTo Business. See Note 18 for more information on the Company's separation of its GoTo Business. In addition, previously reported segment results have been recasted to conform to current year presentation.

On January 31, 2017, Citrix completed the separation of the GoTo Business. As a result, the Company will reevaluate its operating segments in the first quarter of 2017.

International revenues (sales outside of the United States) accounted for approximately 40.7%, 43.1% and 45.2% of the Company’s net revenues for the year ended December 31, 2016, 2015, and 2014, respectively.

Net revenues and segment profit, classified by the Company’s two reportable segments were as follows:

	2016			2015			2014
	(In thousands)
Net revenues:
Enterprise and Service Provider	$	2,736,080		$	2,646,154		$	2,563,064
GoTo Business	682,185			629,440			579,792
Consolidated	$	3,418,265		$	3,275,594		$	3,142,856
Segment profit:
Enterprise and Services Provider	$	891,187		$	702,229		$	558,069
GoTo Business	160,098			140,920			147,005
Unallocated expenses (1):
Amortization and impairment of intangible assets	(89,592		)	(239,915		)	(192,325		)
Stock-based compensation	(184,788		)	(147,368		)	(169,287		)
Restructuring	(71,122		)	(100,411		)	(20,424		)
Separation costs	(56,624		)	(6,352		)	—
Patent litigation charge	—			—			(20,727		)
Other	—			982			—
Net interest and other expense	(32,395		)	(38,208		)	(26,605		)
Consolidated income before income taxes	$	616,764		$	311,877		$	275,706

⁽¹⁾  Represents expenses presented to management on a consolidated basis only and not allocated to the operating segments.

Identifiable assets classified by the Company’s reportable segments are shown below. Long-lived assets consist of property and equipment, net, and are shown below.

	December 31,
	2016		2015
	(In thousands)
Identifiable assets:
Enterprise and Service Provider	$	5,690,343	$	4,805,902
GoTo Business	699,884		661,615
Total identifiable assets	$	6,390,227	$	5,467,517

	December 31,
	2016		2015
	(In thousands)
Property and equipment, net:
United States	$	267,305	$	294,982
United Kingdom	25,321		28,851
Other countries	51,194		49,984
Total property and equipment, net	$	343,820	$	373,817

The increases in identifiable assets are primarily due to increases in the Company's available for sale investments. See Note 4 for additional information regarding the Company’s investments.

In fiscal years 2016 and 2015, there were no individual customers that accounted for over 10% of the Company's total net revenues. In fiscal year 2014, one distributor, Ingram Micro, accounted for 13% of the Company’s total net revenues. The Company’s distributor arrangements with Ingram Micro consist of several non-exclusive, independently negotiated agreements with its subsidiaries, each of which covers different countries or regions. Each of these agreements is separately negotiated and is independent of any other contract (such as a master distribution agreement), one of which was individually responsible for over 10% of the Company’s total net revenues in fiscal year 2014. Total net revenues associated with Ingram Micro are included in the Company's Enterprise and Service Provider segment.

Revenues by product grouping for the Company’s Enterprise and Service Provider and GoTo Business segments were as follows for the years ended:

	December 31,
	2016		2015		2014
	(In thousands)
Net revenues:
Enterprise and Service Provider
Workspace Services revenues(1)	$	1,690,783	$	1,639,072	$	1,600,581
Delivery Networking revenues(2)	782,875		749,910		702,028
Cloud Services Revenues (3)	130,955		101,403		75,569
Professional services(4)	131,229		147,488		175,541
Other	238		8,281		9,345
Total Enterprise and Service Provider revenues	2,736,080		2,646,154		2,563,064
GoTo Business revenues	682,185		629,440		579,792
Total net revenues	$	3,418,265	$	3,275,594	$	3,142,856

(1) Workspace Services revenues are primarily comprised of sales from XenDesktop, XenApp, XenMobile and related license updates and maintenance and support.

(2) Delivery Networking revenues are primarily comprised of NetScaler ADC and NetScaler SD-WAN, and related license updates and maintenance and support.

(3) Cloud Services revenues primarily include ShareFile, Podio and Citrix Cloud products.

(4) Professional services revenues are primarily comprised of revenues from consulting services and product training and certification services.

Revenues by Geographic Location

The following table presents revenues by segment and geographic location, for the years ended:

	December 31,
	2016		2015		2014
	(In thousands)
Net revenues:
Enterprise and Service Provider
Americas	$	1,598,896	$	1,487,364	$	1,394,112
EMEA	863,517		873,620		863,179
Asia-Pacific	273,667		285,170		305,773
Total Enterprise and Service Provider revenues	2,736,080		2,646,154		2,563,064
GoTo Business
Americas	574,882		524,520		475,884
EMEA	87,331		84,481		83,930
Asia-Pacific	19,972		20,439		19,978
Total GoTo Business revenues	682,185		629,440		579,792
Total net revenues	$	3,418,265	$	3,275,594	$	3,142,856

Export revenue represents shipments of finished goods and services from the United States to international customers, primarily in Latin America and Canada. Shipments from the United States to international customers for 2016, 2015 and 2014 were $166.9 million, $180.2 million and $193.8 million, respectively.