Oracle 2011 Annual Report Download - page 118

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ORACLE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
May 31, 2011
to mitigate the risks and volatility associated with our foreign currency transactions. We may suspend this
program from time to time and did so during the fourth quarter of fiscal 2010 until resuming the program in the
second quarter of fiscal 2011. Our foreign currency exposures typically arise from intercompany sublicense fees,
intercompany loans and other intercompany transactions that are expected to be cash settled in the near term. Our
foreign currency forward contracts are generally short-term in duration. Our ultimate realized gain or loss with
respect to currency fluctuations will generally depend on the size and type of cross-currency exposures that we
enter into, the currency exchange rates associated with these exposures and changes in those rates, the net
realized and unrealized gains or losses on foreign currency forward contracts to offset these exposures and other
factors.
We neither use these foreign currency forward contracts for trading purposes nor do we designate these forward
contracts as hedging instruments pursuant to ASC 815. Accordingly, we record the fair values of these contracts
as of the end of our reporting period to our consolidated balance sheet with changes in fair values recorded to our
consolidated statement of operations. The balance sheet classification for the fair values of these forward
contracts is prepaid expenses and other current assets for unrealized gains and other current liabilities for
unrealized losses. The statement of operations classification for changes in fair values of these forward contracts
is non-operating income (expense), net, for both realized and unrealized gains and losses.
As of May 31, 2011, the notional amounts of the forward contracts we held to purchase U.S. Dollars in exchange
for other major international currencies were $2.5 billion and the notional amounts of forward contracts we held
to sell U.S. Dollars in exchange for other major international currencies were $1.6 billion. The net unrealized
losses of our outstanding foreign currency forward contracts were nominal at May 31, 2011. As of May 31, 2010,
we had a nominal amount of foreign currency forward contracts outstanding.
Included in our non-operating income (expense), net were $(39) million, $(35) million and $3 million of net
(losses) gains related to these forward contracts for the years ended May 31, 2011, 2010 and 2009, respectively.
12. COMMITMENTS AND CONTINGENCIES
Lease Commitments
We lease certain facilities, furniture and equipment under operating leases. As of May 31, 2011, future minimum
annual operating lease payments and future minimum payments to be received from non-cancelable subleases
were as follows:
(in millions)
Fiscal 2012 ........................................................................ $ 458
Fiscal 2013 ........................................................................ 341
Fiscal 2014 ........................................................................ 226
Fiscal 2015 ........................................................................ 159
Fiscal 2016 ........................................................................ 121
Thereafter ......................................................................... 265
Future minimum operating lease payments ........................................... 1,570
Less: minimum payments to be received from non-cancelable subleases .................... (238)
Total future minimum operating lease payments, net ............................... $ 1,332
Lease commitments include future minimum rent payments for facilities that we have vacated pursuant to our
restructuring and merger integration activities, as discussed in Note 9. We have approximately $320 million in
facility obligations, net of estimated sublease income and other costs, in accrued restructuring for these locations
in our consolidated balance sheet at May 31, 2011.
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