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 (Loss) income from discontinued operations, net of income tax expense in the 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 (Loss) Income from discontinued operations related to the GoTo Business:



	Year Ended December 31,
	2017			2016		2015
	(in thousands)
Net revenues	$	58,215		$	682,185	$	629,440
Cost of net revenues	15,456			154,652		140,324
Gross margin	42,759			527,533		489,116
Operating expenses:
Research and development	9,108			93,892		83,018
Sales, marketing and services	20,881			209,475		189,560
General and administrative	7,636			63,270		50,068
Amortization of other intangible assets	1,176			14,097		11,254
Restructuring	3,189			3,721		1,750
Separation	40,573			54,084		6,173
Total operating expenses	82,563			438,539		341,823
(Loss) income from discontinued operations before income taxes	(39,804		)	88,994		147,293
Income tax expense	2,900			22,737		43,065
(Loss) income from discontinued operations, net of income tax	$	(42,704	)	$	66,257	$	104,228

The Company incurred significant costs in connection with the separation of its GoTo Business, which were primarily included in discontinued operations. 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 years ended December 31, 2017, 2016 and 2015, the Company incurred $0.5 million, $2.5 million and $0.2 million of separation costs in continuing operations, which are included in General and administrative expense in the accompanying consolidated statements of income.

The assets and liabilities of the GoTo Business have been 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 $475.2 million reduction in retained earnings which included net assets of $461.8 million as of January 31, 2017. Of this amount, $28.5 million represents cash transferred to the GoTo Business, with the remainder considered a non-cash activity in the consolidated statements of cash flows. 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 terminated on February 1, 2018. Billings by Citrix under the TSA were not material during the year ended December 31, 2017.