Oracle 2014 Annual Report Download - page 83

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not significant. 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.
We expect that we will continue to realize gains or losses with respect to our foreign currency exposures, net of gains or losses from our foreign
currency forward contracts. Our ultimate realized gain or loss with respect to foreign currency exposures will generally depend on the size and
type of cross-
currency transactions that we enter into, the currency exchange rates associated with these exposures and changes in those rates, the
net realized gain or loss on our foreign currency forward contracts and other factors. As of May 31, 2015 and 2014, 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. As of May 31, 2015 and 2014, 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. Net foreign exchange transaction losses included in non-operating income (expense), net in the
accompanying consolidated statements of operations were $157 million, $375 million and $162 million in fiscal 2015, 2014 and 2013,
respectively. Included in the net foreign exchange transaction losses for fiscal 2015, fiscal 2014 and fiscal 2013 were foreign currency
remeasurement losses relating to our Venezuelan subsidiary’s operations of $23 million, $213 million and $64 million, respectively (see Note 1
of Notes to Consolidated Financial Statements included elsewhere in this Annual Report for additional information). As a large portion of our
consolidated operations are international, we could experience additional foreign currency volatility in the future, the amounts and timing of
which are unknown.
Foreign Currency Translation Risk—Impact on Cash, Cash Equivalents and Marketable Securities
Fluctuations in foreign currencies impact the amount of total assets and liabilities that we report for our foreign subsidiaries upon the translation
of these amounts into U.S. Dollars. In particular, the amount of cash, cash equivalents and marketable securities that we report in U.S. Dollars
for a significant portion of the cash held by these subsidiaries is subject to translation variance caused by changes in foreign currency exchange
rates as of the end of each respective reporting period (the offset to which is substantially recorded to accumulated other comprehensive loss on
our consolidated balance sheet and is also presented as a line item in our consolidated statements of comprehensive income included elsewhere
in this Annual Report).
As the U.S. Dollar fluctuated against certain international currencies as of the end of fiscal 2015, the amount of cash, cash equivalents and
marketable securities that we reported in U.S. Dollars for foreign subsidiaries that hold international currencies as of May 31, 2015 decreased
relative to what we would have reported using a constant currency rate as of May 31, 2014. As reported in our consolidated statements of cash
flows, the estimated effects of exchange rate changes on our reported cash and cash equivalents balances in U.S. Dollars for fiscal 2015, 2014
and 2013 were decreases of $1.2 billion, $158 million and $110 million, respectively. The following table includes estimates of the U.S. Dollar
equivalent of cash, cash equivalents and marketable securities denominated in certain major foreign currencies that we held as of May 31, 2015:
79
(in millions)
U.S. Dollar
Equivalent at
May 31, 2015
Euro
$
2,190
Japanese Yen
1,143
Indian Rupee
674
Saudi Arabian Riyal
445
Chinese Renminbi
427
Australian Dollar
397
South African Rand
344
Canadian Dollar
231
Other foreign currencies
1,802
Total cash, cash equivalents and marketable securities denominated in foreign currencies
$
7,653