Oracle 2009 Annual Report Download - page 81

Table of Contents
If overall foreign currency exchange rates in comparison to the U.S. Dollar weakened by 10%, the amount of cash, cash equivalents and marketable securities we
would report in U.S. Dollars would increase by approximately $695 million, assuming constant foreign currency cash, cash equivalent and marketable securities
balances.
Foreign Currency Net Investment Risk
Periodically, we hedge net assets of certain of our international subsidiaries using foreign currency forward contracts to offset the translation and economic
exposures related to our foreign currency-based investments in these subsidiaries. These contracts have been designated as net investment hedges pursuant to
ASC 815. We entered into these net investment hedges for all of fiscal 2009 and the majority of fiscal 2010. We suspended this program during our fourth
quarter of fiscal 2010 and, as of May 31, 2010, we have no contracts outstanding.
We used the spot method to measure the effectiveness of our net investment hedges. Under this method for each reporting period, the change in fair value of the
forward contracts attributable to the changes in spot exchange rates (the effective portion) was reported in accumulated other comprehensive income on our
consolidated balance sheet and the remaining change in fair value of the forward contract (the ineffective portion, if any) was recognized in non-operating
income (expense), net, in our consolidated statement of operations. We recorded settlements under these forward contracts in a similar manner. The fair values of
both the effective and ineffective portions were recorded to our consolidated balance sheet as prepaid expenses and other current assets for amounts receivable
from the counterparties or other current liabilities for amounts payable to the counterparties.
Net gains (losses) on our net investment hedges reported in stockholders’ equity, net of tax effects, were $(131) million, $(41) million and $(53) million in fiscal
2010, 2009 and 2008, respectively. Net gains on our net investment hedges reported in non-operating income (expense), net were $1 million, $10 million and $23
million in fiscal 2010, 2009 and 2008, respectively.
Item 8. Financial Statements and Supplementary Data
The response to this item is submitted as a separate section of this Annual Report. See Part IV, Item 15.
Item 9. Changes In and Disagreements with Accountants on Accounting and Financial Disclosure
None.
Item 9A. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
As of the end of the period covered by this Annual Report on Form 10-K, we carried out an evaluation under the supervision and with the participation of our
Disclosure Committee and our management, including the Chief Executive Officer and the Chief Financial Officer, of the effectiveness of the design and
operation of our disclosure controls and procedures pursuant to Exchange Act Rules 13a-15(e) and 15d-15(e). Disclosure controls are procedures that are
designed to ensure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934, or the Exchange Act, such as this
Annual Report on Form 10-K, is recorded, processed, summarized and reported within the time periods specified by the U.S. Securities and Exchange
Commission. Disclosure controls are also designed to ensure that such information is accumulated and communicated to our management, including our Chief
Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. Our quarterly evaluation of disclosure
controls includes an evaluation of some components of our internal control over financial reporting. We also perform a separate annual evaluation of internal
control over financial reporting for the purpose of providing the management report below.
The evaluation of our disclosure controls included a review of their objectives and design, our implementation of the controls and the effect of the controls on the
information generated for use in this Annual Report on Form 10-K. In the course of the controls evaluation, we reviewed data errors or control problems
identified and
77
Source: ORACLE CORP, 10-K, July 01, 2010 Powered by Morningstar® Document Research℠