Oracle 2008 Annual Report Download - page 23

Table of Contents
recorded. Where circumstances warrant, we provide information and report our findings to government
authorities, but no assurance can be given that action will not be taken by such authorities.
We are also subject to a variety of other risks and challenges in managing an organization operating in various
countries, including those related to:
• general economic conditions in each country or region;
• fluctuations in currency exchange rates;
• regulatory changes;
• political unrest, terrorism and the potential for other hostilities;
• public health risks, particularly in areas in which we have significant operations;
• longer payment cycles and difficulties in collecting accounts receivable;
• overlapping tax regimes;
• our ability to repatriate funds held by our foreign subsidiaries to the United States at favorable tax
rates;
• difficulties in transferring funds from certain countries; and
• reduced protection for intellectual property rights in some countries.
As the majority shareholder of Oracle Financial Services Software Limited (formerly i-flex solutions limited),
a publicly traded Indian software company focused on the banking industry, we are faced with several
additional risks, including being subject to local securities regulations and being unable to exert full control or
obtain financial and other information on a timely basis.
We may experience foreign currency gains and losses. We conduct a significant number of transactions in
currencies other than the U.S. Dollar. Changes in the value of major foreign currencies, particularly the Euro,
Japanese Yen and British Pound relative to the U.S. Dollar can significantly affect revenues and our operating
results. Our revenues and operating results are adversely affected when the dollar strengthens relative to other
currencies and are positively affected when the dollar weakens. Our revenues and operating results in fiscal
2009 have been unfavorably affected by the recent strengthening U.S. Dollar relative to other major foreign
currencies.
Our foreign currency transaction gains and losses, primarily related to sublicense fees and other agreements
among us and our subsidiaries and distributors, are charged against earnings in the period incurred. We enter
into foreign exchange forward contracts to hedge certain transaction and translation exposures in major
currencies, but we will continue to experience foreign currency gains and losses in certain instances where it
is not possible or cost effective to hedge our foreign currency exposures.
We may not be able to protect our intellectual property rights. We rely on copyright, trademark, patent and
trade secret laws, confidentiality procedures, controls and contractual commitments to protect our intellectual
property rights. Despite our efforts, these protections may be limited. Unauthorized third parties may try to
copy or reverse engineer portions of our products or otherwise obtain and use our intellectual property. Any
patents owned by us may be invalidated, circumvented or challenged. Any of our pending or future patent
applications, whether or not being currently challenged, may not be issued with the scope of the claims we
seek, if at all. In addition, the laws of some countries do not provide the same level of protection of our
intellectual property rights as do the laws and courts of the United States. If we cannot protect our intellectual
property rights against unauthorized copying or use, or other misappropriation, we may not remain
competitive.
Third parties have claimed and, in the future, may claim infringement or misuse of intellectual property
rights and/or breach of license agreement provisions. We periodically receive notices from, or have
lawsuits filed against us by, others claiming infringement or other misuse of their intellectual property rights
and/or breach of our agreements with them. We expect the number of such claims will increase as:
• we continue to acquire companies;
• the number of products and competitors in our industry segments grows;
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Source: ORACLE CORP, 10-K, June 29, 2009 Powered by Morningstar® Document Research℠