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Table of Contents
ORACLE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
May 31, 2015
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 recorded 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 a net unrealized gain position and other current liabilities for a net
unrealized loss position. 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, 2015 and 2014, respectively, the notional amounts of the forward contracts we held to purchase U.S. Dollars in exchange for
other major international currencies were $2.2 billion and $3.6 billion, respectively, and the notional amounts of forward contracts we held to
sell U.S. Dollars in exchange for other major international currencies were $1.2 billion and $2.0 billion, respectively. The fair values of our
outstanding foreign currency forward contracts were nominal at May 31, 2015 and 2014.
Included in our non-operating income (expense), net were $60 million, $(69) million and $(64) million of net gains (losses) related to these
forward contracts for the years ended May 31, 2015, 2014 and 2013, respectively. The cash flows related to these foreign currency contracts are
classified as operating activities.
The effects of derivative and non-
derivative instruments designated as hedges on certain of our consolidated financial statements were as follows
as of or for each of the respective periods presented below (amounts presented exclude any income tax effects):
Fair Values of Derivative and Non-Derivative Instruments Designated as Hedges in Consolidated Balance Sheets
Effects of Derivative and Non-Derivative Instruments Designated as Hedges on Income and Other Comprehensive Income (OCI) or
Loss (OCL)
120
May 31, 2015
May 31, 2014
(in millions)
Balance Sheet Location
Fair Value
Balance Sheet Location
Fair Value
Interest rate swap agreements designated as fair value hedges
Other assets
$
74
Other assets
$
15
Interest rate swap agreements designated as fair value hedges
Not applicable
$
—
Prepaid expenses and other current assets
$
8
Cross
-
currency swap agreements designated as cash flow hedges
Other non-current
liabilities
$
(244
)
Other assets
$
74
Foreign currency borrowings designated as net investment hedge
Notes payable, non
-
current
$
(981
)
Notes payable, non
-
current
$
(1,116
)
Amount of (Loss) Gain Recognized in
Accumulated OCI or OCL (Effective Portion)
Location and Amount of (Loss) Gain Reclassified from
Accumulated OCI or OCL into Income (Effective Portion)
Year Ended May 31,
Year Ended May 31,
(in millions)
2015
2014
2015
2014
Cross-currency swap agreements
designated as cash flow hedges
$
(318
)
$
74
Non
-
operating income (expense), net
$
(348
)
$
69
Foreign currency borrowings
designated as net investment
hedge
$
208
$
(34
)
Not applicable
$
—
$
—