Oracle 2011 Annual Report Download - page 109

ORACLE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
May 31, 2011
Assets Measured at Fair Value on a Recurring Basis
Our assets measured at fair value on a recurring basis, excluding accrued interest components, consisted of the
following types of instruments (Level 1 and 2 inputs are defined above):
May 31, 2011 May 31, 2010
Fair Value Fair Value
Measurements Measurements
Using Input Types Using Input Types
(in millions) Level 1 Level 2 Total Level 1 Level 2 Total
Assets:
Money market funds ................................................. $ 3,362 $ — $ 3,362 $ 2,423 $ — $ 2,423
U.S. Treasury, U.S. government and U.S. government agency debt securities .... 1,150 — 1,150 3,010 — 3,010
Commercial paper debt securities ....................................... — 11,884 11,884 — 3,378 3,378
Corporate debt securities and other ...................................... 106 1,885 1,991 — 2,256 2,256
Derivative financial instruments ........................................ — 69 69 — 33 33
Total assets .................................................... $ 4,618 $ 13,838 $ 18,456 $ 5,433 $ 5,667 $ 11,100
Our valuation techniques used to measure the fair values of our money market funds, U.S. Treasury, U.S.
government and U.S. government agency debt securities and certain other marketable securities that were
classified as Level 1 in the table above were derived from quoted market prices as substantially all of these
instruments have maturity dates (if any) within one year from our date of purchase and active markets for these
instruments exist. Our valuation techniques used to measure the fair values of all other instruments listed in the
table above, generally all of which mature within one year and the counterparties to which have high credit
ratings, were derived from the following: non-binding market consensus prices that are corroborated by
observable market data, quoted market prices for similar instruments, or pricing models, such as discounted cash
flow techniques, with all significant inputs derived from or corroborated by observable market data. Our
discounted cash flow techniques used observable market inputs such as LIBOR-based yield curves, among
others.
Our cash and cash equivalents, marketable securities and derivative financial instruments are recognized and
measured at fair value in our consolidated financial statements. Based on the trading prices of our $15.9 billion
and $14.6 billion of borrowings, which consisted of short-term borrowings and senior notes that were outstanding
at May 31, 2011 and senior notes and commercial paper notes that were outstanding as of May 31, 2010 and the
interest rates we could obtain for other borrowings with similar terms at those dates, the estimated fair values of
our borrowings at May 31, 2011 and May 31, 2010 were $17.4 billion and $15.9 billion, respectively.
5. INVENTORIES
Inventories consisted of the following:
May 31,
(in millions) 2011 2010
Raw materials ....................................................... $ 94 $ 95
Work-in-process ..................................................... 17 43
Finished goods ....................................................... 192 121
Total .......................................................... $ 303 $ 259
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