This excerpt taken from the VRSN 10-Q filed Nov 9, 2005.
Note 19. Foreign Currency and Hedging Instruments
VeriSign conducts business throughout the world and transacts in multiple currencies and as a result, the Company is exposed to foreign currency risks. VeriSign has a foreign currency risk management program designed to mitigate foreign exchange risks associated with the monetary assets and liabilities of its operations that are denominated in non-functional currencies. The primary objective of this hedging program is to minimize the gains and losses resulting from fluctuations in exchange rates. The Company does not enter into foreign currency transactions for trading or speculative purposes, nor does it hedge foreign currency exposures in a manner that entirely offsets the effects of changes in exchange rates. The program may entail the use of forward or option contracts, and in each case, these contracts are limited to a duration of less than 12 months.
At September 30, 2005, VeriSign held forward contracts in notional amounts totaling approximately $189.8 million to mitigate the impact of exchange rate fluctuations associated with certain foreign currencies. All forward contracts were recorded at fair market value on the balance sheet and in earnings at year end 2004 and for the first nine months of 2005. The Company attempts to limit its exposure to credit risk by executing foreign exchange contracts with high-quality financial institutions.