CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | ||
In Millions | May. 31, 2010
| May. 31, 2009
|
Current assets: | ||
Cash and cash equivalents | $9,914 | $8,995 |
Marketable securities | 8,555 | 3,629 |
Trade receivables, net of allowances for doubtful accounts of $305 and $270 as of May 31, 2010 and 2009, respectively | 5,585 | 4,430 |
Inventories | 259 | 0 |
Deferred tax assets | 1,159 | 661 |
Prepaid expenses and other current assets | 1,532 | 866 |
Total current assets | 27,004 | 18,581 |
Non-current assets: | ||
Property, plant and equipment, net | 2,763 | 1,922 |
Intangible assets: software support agreements and related relationships, net | 2,903 | 3,411 |
Intangible assets: other, net | 6,418 | 3,858 |
Goodwill | 20,425 | 18,842 |
Other assets | 2,065 | 802 |
Total non-current assets | 34,574 | 28,835 |
Total assets | 61,578 | 47,416 |
Current liabilities: | ||
Notes payable, current and other current borrowings | 3,145 | 1,001 |
Accounts payable | 775 | 271 |
Accrued compensation and related benefits | 1,895 | 1,409 |
Deferred revenues | 5,900 | 4,592 |
Other current liabilities | 2,976 | 1,876 |
Total current liabilities | 14,691 | 9,149 |
Non-current liabilities: | ||
Notes payable and other non-current borrowings | 11,510 | 9,237 |
Income taxes payable | 2,695 | 2,423 |
Deferred tax liabilities | 424 | 480 |
Other non-current liabilities | 1,059 | 682 |
Total non-current liabilities | 15,688 | 12,822 |
Oracle Corporation stockholders' equity: | ||
Preferred stock, $0.01 par value-authorized: 1.0 shares; outstanding: none | 0 | 0 |
Common stock, $0.01 par value and additional paid in capital-authorized: 11,000 shares; outstanding: 5,026 shares and 5,005 shares as of May 31, 2010 and May 31, 2009, respectively | 14,648 | 12,980 |
Retained earnings | 16,146 | 11,894 |
Accumulated other comprehensive income | 4 | 216 |
Total Oracle Corporation stockholders' equity | 30,798 | 25,090 |
Noncontrolling interests | 401 | 355 |
Total equity | 31,199 | 25,445 |
Total liabilities and equity | $61,578 | $47,416 |
CONSOLIDATED BALANCE SHEETS PAR
CONSOLIDATED BALANCE SHEETS PARENTHETICAL (USD $) | ||
In Millions, except Per Share data | May. 31, 2010
| May. 31, 2009
|
Allowance for doubtful accounts receivable | $305 | $270 |
Preferred stock par or stated value per share | 0.01 | 0.01 |
Preferred stock shares authorized | 1 | 1 |
Preferred stock shares outstanding | 0 | 0 |
Common stock par or stated value per share | 0.01 | 0.01 |
Common stock shares authorized | 11,000 | 11,000 |
Common stock shares outstanding | 5,026 | 5,005 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) | |||
In Millions, except Per Share data | 12 Months Ended
May. 31, 2010 | 12 Months Ended
May. 31, 2009 | 12 Months Ended
May. 31, 2008 |
Software revenues: | |||
New software licenses | $7,533 | $7,123 | $7,515 |
Software license updates and product support revenue | 13,092 | 11,754 | 10,328 |
Software revenues | 20,625 | 18,877 | 17,843 |
Hardware systems revenues: | |||
Hardware systems products revenue | 1,506 | 0 | 0 |
Hardware systems support revenue | 784 | 0 | 0 |
Hardware systems revenues | 2,290 | 0 | 0 |
Services revenues | 3,905 | 4,375 | 4,587 |
Total revenues | 26,820 | 23,252 | 22,430 |
Operating Expenses: | |||
Sales and marketing | 5,080 | 4,638 | 4,679 |
Software license updates and product support costs | 1,063 | 1,088 | 997 |
Hardware systems products costs | 880 | 0 | 0 |
Hardware systems support costs | 423 | 0 | 0 |
Services costs | 3,398 | 3,706 | 3,984 |
Research and development | 3,254 | 2,767 | 2,741 |
General and administrative | 911 | 785 | 808 |
Amortization of intangible assets | 1,973 | 1,713 | 1,212 |
Acquisition related and other | 154 | 117 | 124 |
Restructuring | 622 | 117 | 41 |
Total operating expenses | 17,758 | 14,931 | 14,586 |
Operating income | 9,062 | 8,321 | 7,844 |
Interest expense | (754) | (630) | (394) |
Non-operating income (expense), net | (65) | 143 | 384 |
Income before provision for income taxes | 8,243 | 7,834 | 7,834 |
Provision for income taxes | 2,108 | 2,241 | 2,313 |
Net Income | $6,135 | $5,593 | $5,521 |
Earnings per share: | |||
Earnings per share, basic | 1.22 | 1.1 | 1.08 |
Earnings per share, diluted | 1.21 | 1.09 | 1.06 |
Weighted average common shares outstanding: | |||
Weighted average common shares outstanding, basic | 5,014 | 5,070 | 5,133 |
Weighted average common shares outstanding, diluted | 5,073 | 5,130 | 5,229 |
Dividends declared per common share | 0.2 | 0.05 | $0 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | |||
In Millions | 12 Months Ended
May. 31, 2010 | 12 Months Ended
May. 31, 2009 | 12 Months Ended
May. 31, 2008 |
Cash Flows From Operating Activities: | |||
Net income | $6,135 | $5,593 | $5,521 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation | 298 | 263 | 268 |
Amortization of intangible assets | 1,973 | 1,713 | 1,212 |
Allowances for doubtful accounts receivable | 143 | 118 | 164 |
Deferred income taxes | (511) | (395) | (135) |
Stock-based compensation | 436 | 355 | 369 |
Tax benefits on the exercise of stock options and vesting of restricted stock-based awards | 203 | 252 | 588 |
Excess tax benefits on the exercise of stock options and vesting of restricted stock-based awards in operating activities | (110) | (194) | (454) |
Other, net in operating activities | 13 | 185 | 18 |
Changes in operating assets and liabilities, net of effects from acquisitions: | |||
(Increase) decrease in trade receivables, net | (362) | 336 | (825) |
Decrease in inventories | 73 | 0 | 0 |
Decrease (increase) in prepaid expenses and other assets | 340 | 145 | (191) |
Decrease in accounts payable and other liabilities | (360) | (691) | (153) |
(Decrease) increase in income taxes payable | (79) | 142 | 368 |
Increase in deferred revenues | 489 | 433 | 652 |
Net cash provided by operating activities | 8,681 | 8,255 | 7,402 |
Cash Flows From Investing Activities: | |||
Purchases of marketable securities and other investments | (15,703) | (9,315) | (5,624) |
Proceeds from maturities and sales of marketable securities and other investments | 11,220 | 8,404 | 4,281 |
Acquisitions, net of cash acquired | (5,606) | (1,159) | (7,643) |
Capital expenditures | (230) | (529) | (243) |
Proceeds from sale of property | 0 | 0 | 153 |
Net cash used for investing activities | (10,319) | (2,599) | (9,076) |
Cash Flows From Financing Activities: | |||
Payments for repurchases of common stock | (992) | (3,972) | (2,023) |
Proceeds from issuances of common stock | 874 | 760 | 1,288 |
Payment of dividends to stockholders | (1,004) | (250) | 0 |
Proceeds from borrowings, net of issuance costs | 7,220 | 0 | 6,171 |
Repayments of borrowings | (3,582) | (1,004) | (2,560) |
Excess tax benefits on the exercise of stock options and vesting of restricted stock-based awards in financing activities | 110 | 194 | 454 |
Distributions to noncontrolling interests | (59) | (53) | (49) |
Other, net in financing activities | 97 | (97) | 0 |
Net cash provided by (used for) financing activities | 2,664 | (4,422) | 3,281 |
Effect of exchange rate changes on cash and cash equivalents | (107) | (501) | 437 |
Net increase in cash and cash equivalents | 919 | 733 | 2,044 |
Cash and cash equivalents at beginning of period | 8,995 | 8,262 | 6,218 |
Cash and cash equivalents at end of period | 9,914 | 8,995 | 8,262 |
Non-cash investing and financing transactions: | |||
Fair value of stock options and restricted stock-based awards assumed in connection with acquisitions | 100 | 1 | 240 |
Decrease in unsettled repurchases of common stock | 0 | (12) | (23) |
Supplemental schedule of cash flow data: | |||
Cash paid for income taxes | 2,488 | 2,170 | 1,687 |
Cash paid for interest | $652 | $627 | $347 |
CONSOLIDATED STATEMENTS OF EQUI
CONSOLIDATED STATEMENTS OF EQUITY (USD $) | |||||||
In Millions | Comprehensive Income
| Common Stock and Additional Paid in Capital
| Retained Earnings
| Accumulated Other Comprehensive Income
| Total Oracle Corporation Stockholders' Equity
| Noncontrolling Interests
| Total
|
Beginning balances at May. 31, 2007 | $0 | $10,293 | $6,223 | $403 | $16,919 | $316 | $17,235 |
Common stock issued under stock-based compensation plans | 0 | 1,229 | 0 | 0 | 1,229 | 0 | 1,229 |
Common stock issued under stock purchase plans | 0 | 59 | 0 | 0 | 59 | 0 | 59 |
Assumption of stock-based compensation plan awards in connection with acquisitions | 0 | 240 | 0 | 0 | 240 | 0 | 240 |
Stock-based compensation in consolidated statements of equity | 0 | 367 | 0 | 0 | 367 | 0 | 367 |
Repurchase of common stock | 0 | (214) | (1,786) | 0 | (2,000) | 0 | (2,000) |
Tax benefit from stock plans | 0 | 472 | 0 | 0 | 472 | 0 | 472 |
Adjustment to retained earnings upon adoption of revised guidance for income taxes | 0 | 0 | 3 | 0 | 3 | 0 | 3 |
Other, net in consolidated statements of equity | 0 | 0 | 0 | 0 | 0 | 7 | 7 |
Distributions to noncontrolling interests in consolidated statements of equity | 0 | 0 | 0 | 0 | 0 | (49) | (49) |
Net unrealized loss on defined benefit plans, net of tax | (9) | 0 | 0 | (9) | (9) | 0 | (9) |
Foreign currency translation | 300 | 0 | 0 | 300 | 300 | 35 | 335 |
Net unrealized losses on derivative financial instruments, net of tax | (77) | 0 | 0 | (77) | (77) | 0 | (77) |
Net unrealized gain on marketable securities, net of tax | 1 | 0 | 0 | 1 | 1 | 0 | 1 |
Net income in consolidated statements of equity | 5,521 | 0 | 5,521 | 0 | 5,521 | 60 | 5,581 |
Comprehensive income | 5,736 | 0 | 0 | 0 | 0 | 0 | 0 |
Ending balances at May. 31, 2008 | 0 | 12,446 | 9,961 | 618 | 23,025 | 369 | 23,394 |
Common stock issued under stock-based compensation plans | 0 | 696 | 0 | 0 | 696 | 0 | 696 |
Common stock issued under stock purchase plans | 0 | 64 | 0 | 0 | 64 | 0 | 64 |
Assumption of stock-based compensation plan awards in connection with acquisitions | 0 | 1 | 0 | 0 | 1 | 0 | 1 |
Stock-based compensation in consolidated statements of equity | 0 | 348 | 0 | 0 | 348 | 0 | 348 |
Repurchase of common stock | 0 | (550) | (3,410) | 0 | (3,960) | 0 | (3,960) |
Cash dividends declared | 0 | 0 | (250) | 0 | (250) | 0 | (250) |
Tax benefit from stock plans | 0 | 56 | 0 | 0 | 56 | 0 | 56 |
Other, net in consolidated statements of equity | 0 | (81) | 0 | 0 | (81) | (37) | (118) |
Distributions to noncontrolling interests in consolidated statements of equity | 0 | 0 | 0 | 0 | 0 | (53) | (53) |
Net unrealized loss on defined benefit plans, net of tax | (14) | 0 | 0 | (14) | (14) | 0 | (14) |
Foreign currency translation | (350) | 0 | 0 | (350) | (350) | (8) | (358) |
Net unrealized losses on derivative financial instruments, net of tax | (39) | 0 | 0 | (39) | (39) | 0 | (39) |
Net unrealized gain on marketable securities, net of tax | 1 | 0 | 0 | 1 | 1 | 0 | 1 |
Net income in consolidated statements of equity | 5,593 | 0 | 5,593 | 0 | 5,593 | 84 | 5,677 |
Comprehensive income | 5,191 | 0 | 0 | 0 | 0 | 0 | 0 |
Ending balances at May. 31, 2009 | 0 | 12,980 | 11,894 | 216 | 25,090 | 355 | 25,445 |
Common stock issued under stock-based compensation plans | 0 | 812 | 0 | 0 | 812 | 0 | 812 |
Common stock issued under stock purchase plans | 0 | 62 | 0 | 0 | 62 | 0 | 62 |
Assumption of stock-based compensation plan awards in connection with acquisitions | 0 | 100 | 0 | 0 | 100 | 0 | 100 |
Stock-based compensation in consolidated statements of equity | 0 | 440 | 0 | 0 | 440 | 0 | 440 |
Repurchase of common stock | 0 | (112) | (880) | 0 | (992) | 0 | (992) |
Cash dividends declared | 0 | 0 | (1,004) | 0 | (1,004) | 0 | (1,004) |
Tax benefit from stock plans | 0 | 268 | 0 | 0 | 268 | 0 | 268 |
Other, net in consolidated statements of equity | 0 | 98 | 1 | 0 | 99 | 1 | 100 |
Distributions to noncontrolling interests in consolidated statements of equity | 0 | 0 | 0 | 0 | 0 | (59) | (59) |
Net unrealized loss on defined benefit plans, net of tax | (35) | 0 | 0 | (35) | (35) | 0 | (35) |
Foreign currency translation | (171) | 0 | 0 | (171) | (171) | 9 | (162) |
Net unrealized losses on derivative financial instruments, net of tax | (6) | 0 | 0 | (6) | (6) | 0 | (6) |
Net income in consolidated statements of equity | 6,135 | 0 | 6,135 | 0 | 6,135 | 95 | 6,230 |
Comprehensive income | 5,923 | 0 | 0 | 0 | 0 | 0 | 0 |
Ending balances at May. 31, 2010 | $0 | $14,648 | $16,146 | $4 | $30,798 | $401 | $31,199 |
1_CONSOLIDATED STATEMENTS OF EQ
CONSOLIDATED STATEMENTS OF EQUITY PARENTHETICAL( Common Stock and Additional Paid in Capital) | |||
Share data in Millions | 12 Months Ended
May. 31, 2010 | 12 Months Ended
May. 31, 2009 | 12 Months Ended
May. 31, 2008 |
Beginning common stock shares outstanding | 5,005 | 5,150 | 5,107 |
Common stock issued under stock-based compensation plans (shares) | 60 | 76 | 137 |
Common stock issued under stock purchase plans (shares) | 3 | 3 | 3 |
Repurchase of common stock (shares) | (43) | (226) | (97) |
Other, net (shares) | 1 | 2 | 0 |
Ending common stock shares outstanding | 5,026 | 5,005 | 5,150 |
ORGANIZATION AND SIGNIFICANT AC
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES | |
12 Months Ended
May. 31, 2010 | |
Notes to Consolidated Financials Statements | |
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES | 1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES We develop, manufacture, market, distribute and service database and middleware software as well as applications software designed to help our customers manage and grow their business operations. Database and middleware software is used for the secure storage, retrieval and manipulation of all forms of software-based data, and for developing and deploying applications on the internet and on corporate intranets. Applications software is used to automate business processes and to provide business intelligence. We also offer software license updates and product support contracts that provide our customers with rights to unspecified product upgrades and maintenance releases issued during the support period, as well as technical support assistance. On January26, 2010, we completed our acquisition of Sun Microsystems, Inc. (Sun), a provider of hardware systems, software and services, for $7.3 billion. As a result of our acquisition of Sun, we entered into a new hardware systems business. Our hardware systems business consists of two operating segments: (1)hardware systems products, which consists primarily of computer server and storage product offerings, and (2)hardware systems support, which provides customers with unspecified software updates for the software components that are essential to the functionality of our hardware systems and storage products and can include product repairs, maintenance services and technical support services. We also offer software and non-software related services including consulting, On Demand, and education. Basis of Financial Statements The consolidated financial statements include our accounts and the accounts of our wholly- and majority-owned subsidiaries. As a result of our adoption of the Financial Accounting Standards Board's (FASB) new accounting guidance for noncontrolling interests as contained in ASC 810, Consolidation, as of the beginning of fiscal 2010, we retrospectively classified noncontrolling interest positions of certain of our consolidated entities as a separate component of consolidated equity from the equity attributable to Oracle's stockholders for all periods presented. The noncontrolling interests in our net income were not significant to our consolidated results for the periods presented and therefore have been included as a component of non-operating income (expense), net in our consolidated statements of operations. Intercompany transactions and balances have been eliminated. Certain other prior year balances have been reclassified to conform to the current year presentation. Such reclassifications did not affect total revenues, operating income or net income. Use of Estimates Our consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles (GAAP) as set forth in the FASB's Accounting Standards Codification (ASC) and consider the various staff accounting bulletins and other applicable guidance issued by the U.S. Securities and Exchange Commission (SEC). These accounting principles require us to make certain estimates, judgments and assumptions. We believe th |
ACQUISITIONS
ACQUISITIONS | |
12 Months Ended
May. 31, 2010 | |
Notes to Consolidated Financials Statements | |
ACQUISITIONS | 2. ACQUISITIONS Acquisition of Sun Microsystems, Inc. On January26, 2010 we completed our acquisition of Sun Microsystems, Inc., a provider of hardware systems, software and services, by means of a merger of one of our wholly owned subsidiaries with and into Sun such that Sun became a wholly owned subsidiary of Oracle. We acquired Sun to, among other things, expand our product offerings by adding Sun's existing hardware systems business and broadening our software and services offerings. We have included the financial results of Sun in our consolidated financial statements from the date of acquisition. For fiscal 2010, we estimate that Sun's contribution to our total revenues was $2.8 billion, which included allocations of revenues from our software and services businesses that were not separately identifiable due to our integration activities. For fiscal 2010, Sun reduced our operating income by $620 million, which included management's allocations and estimates of revenues and expenses that were not separately identifiable due to our integration activities, intangible asset amortization, restructuring expenses and stock-based compensation expenses. The total purchase price for Sun was approximately $7.3 billion and was comprised of: (in millions, except per share amounts) Acquisition of approximately 757million shares of outstanding common stock of Sun at $9.50 per share in cash $ 7,196 Fair values of stock options and restricted stock-based awards assumed 99 Total purchase price $ 7,295 The fair values of stock options assumed were estimated using a Black-Scholes-Merton option-pricing model. The fair values of unvested Sun stock options and restricted stock-based awards as they relate to post combination services will be recorded as operating expense over the remaining service periods, while the fair values of vested stock options and restricted stock-based awards, as they relate to pre combination services, are included in the total purchase price. Preliminary Purchase Price Allocation Pursuant to our business combinations accounting policy, the total purchase price for Sun was allocated to the preliminary net tangible and intangible assets based upon their preliminary fair values as of January26, 2010 as set forth below. The excess of the purchase price over the preliminary net tangible assets and intangible assets was recorded as goodwill. The preliminary allocation of the purchase price was based upon a preliminary valuation and our estimates and assumptions are subject to change within the measurement period (up to one year from the acquisition date). The primary areas of the preliminary purchase price allocation that are not yet finalized relate to the fair values of certain tangible assets and liabilities acquired, certain legal matters, income and non-income based taxes and residual goodwill. We expect to continue to obtain information to assist us in determining the fair values of the net assets acquired at the acquisition date during the measurement period. Our preliminary purchase price allocation for Sun is as follows: (in millions) Cash, cash equivalents and |
CASH, CASH EQUIVALENTS AND MARK
CASH, CASH EQUIVALENTS AND MARKETABLE SECURITIES | |
12 Months Ended
May. 31, 2010 | |
Notes to Consolidated Financials Statements | |
CASH, CASH EQUIVALENTS AND MARKETABLE SECURITIES | 3. CASH, CASH EQUIVALENTS AND MARKETABLE SECURITIES Cash and cash equivalents primarily consist of deposits held at major banks, money market funds, Tier-1 commercial paper, U.S. Treasury obligations, U.S. government agency and government sponsored enterprise obligations, and other securities with original maturities of 90 days or less. Marketable securities primarily consist of time deposits held at major banks, Tier-1 commercial paper, corporate notes, U.S. Treasury obligations and U.S. government agency and government sponsored enterprise debt obligations and certain other securities. The amortized principal amounts of our cash, cash equivalents and marketable securities approximated their fair values at May31, 2010 and 2009. We use the specific identification method to determine any realized gains or losses from the sale of our marketable securities classified as available-for-sale. Such realized gains and losses were insignificant for fiscal 2010, 2009 and 2008. The following table summarizes the components of our cash equivalents and marketable securities held, substantially all of which were classified as available-for-sale: May31, (in millions) 2010 2009 Money market funds $ 2,423 $ 467 U.S. Treasury, U.S. government and U.S. government agency debt securities 3,010 4,078 Commercial paper, corporate debt securities and other 5,634 2,700 Total investments $ 11,067 $ 7,245 Investments classified as cash equivalents $ 2,512 $ 3,616 Investments classified as marketable securities $ 8,555 $ 3,629 Substantially all of our marketable security investments held as of May31, 2010 mature within one year. Our investment portfolio is subject to market risk due to changes in interest rates. We place our investments with high credit quality issuers as described above and, by policy, limit the amount of credit exposure to any one issuer. As stated in our investment policy, we are averse to principal loss and seek to preserve our invested funds by limiting default risk, market risk and reinvestment risk. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | |
12 Months Ended
May. 31, 2010 | |
Notes to Consolidated Financials Statements | |
FAIR VALUE MEASUREMENTS | 4. FAIR VALUE MEASUREMENTS We perform fair value measurements in accordance with the guidance provided by ASC 820, Fair Value Measurements and Disclosures. ASC 820 defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required to be recorded at fair value, we consider the principal or most advantageous market in which we would transact and consider assumptions that market participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of nonperformance. ASC 820 establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. An asset's or liability's categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 820 establishes three levels of inputs that may be used to measure fair value: Level 1:quoted prices in active markets for identical assets or liabilities; Level 2:inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; or Level 3:unobservable inputs that are supported by little or no market activity and that are significant to the fair values of the assets or liabilities. Assets and Liabilities Measured at Fair Value on a Recurring Basis Our assets and liabilities 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): May31, 2010 May31, 2009 Fair Value Measurements UsingInput Types Fair Value Measurements UsingInput Types (in millions) Level1 Level2 Total Level1 Level2 Total Assets: Money market funds $ 2,423 $ $ 2,423 $ 467 $ $ 467 U.S. Treasury, U.S. government and U.S. government agency debt securities 3,010 3,010 4,078 4,078 Commercial paper debt securities 3,378 3,378 1,365 1,365 Corporate debt securities and other 2,256 2,256 1,335 1,335 Derivative financial instruments 33 33 Total assets $ 5,433 $ 5,667 $ 11,100 $ 4,545 $ 2,700 $ 7,245 Liabilities: Derivative financial instruments $ $ $ $ $ 35 $ 35 Total liabilities $ $ $ $ $ 35 $ 35 Our valuation techniques used to measure the fair values of our money market funds and U.S. Treasury, U.S. government and U.S. government agency debt securities, that were classified as Level 1 in t |
INVENTORIES
INVENTORIES | |
12 Months Ended
May. 31, 2010 | |
Notes to Consolidated Financials Statements | |
INVENTORIES | 5. INVENTORIES Inventories consisted of the following as of May31, 2010 (insignificant as of May31, 2009): (in millions) May31, 2010 Raw materials $ 95 Work-in-process 43 Finished goods 121 Total $ 259 |
PROPERTY, PLANT AND EQUIPMENT
PROPERTY, PLANT AND EQUIPMENT | |
12 Months Ended
May. 31, 2010 | |
Notes to Consolidated Financials Statements | |
PROPERTY, PLANT AND EQUIPMENT | 6. PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment, net consisted of the following: Estimated Useful Lives May31, (Dollars in millions) 2010 2009 Computer, network, machinery and equipment 1-5years $ 1,400 $ 1,213 Buildings and improvements 1-50years 1,995 1,579 Furniture and fixtures 3-10 years 406 388 Land 757 515 Automobiles 5 years 3 5 Construction in progress 87 126 Total property, plant and equipment 1-50 years 4,648 3,826 Accumulated depreciation (1,885 ) (1,904 ) Total property, plant and equipment, net $ 2,763 $ 1,922 |
INTANGIBLE ASSETS AND GOODWILL
INTANGIBLE ASSETS AND GOODWILL | |
12 Months Ended
May. 31, 2010 | |
Notes to Consolidated Financials Statements | |
INTANGIBLE ASSETS AND GOODWILL | 7. INTANGIBLE ASSETS AND GOODWILL The changes in intangible assets for fiscal 2010 and the net book value of intangible assets at May31, 2010 and 2009 were as follows: (Dollars in millions) Intangible Assets, Gross Accumulated Amortization IntangibleAssets,Net Weighted Average UsefulLife May31, 2009 Additions May31, 2010 May31, 2009 Expense May31, 2010 May31, 2009 May31, 2010 Software support agreements and related relationships $ 5,012 $ 66 $ 5,078 $ (1,601 ) $ (574 ) $ (2,175 ) $ 3,411 $ 2,903 9years Hardware systems support agreements and related relationships 759 759 (29 ) (29 ) 730 7 years Developed technology 3,844 1,494 5,338 (1,925 ) (811 ) (2,736 ) 1,919 2,602 5 years Core technology 1,502 609 2,111 (687 ) (277 ) (964 ) 815 1,147 5 years Customer relationships 1,284 481 1,765 (320 ) (234 ) (554 ) 964 1,211 7 years Trademarks 273 231 504 (113 ) (48 ) (161 ) 160 343 7 years Total intangible assets subject to amortization 11,915 3,640 15,555 (4,646 ) (1,973 ) (6,619 ) 7,269 8,936 In-process research and development 385 385 385 N.A. Total $ 11,915 $ 4,025 $ 15,940 $ (4,646 ) $ (1,973 ) $ (6,619 ) $ 7,269 $ 9,321 Total amortization expense related to our intangible assets was $2.0 billion, $1.7 billion and $1.2 billion in fiscal 2010, 2009 and 2008, respectively. As of May31, 2010, estimated future amortization expense related to our intangible assets subject to amortization was $2.3 billion in fiscal 2011, $2.0 billion in fiscal 2012, $1.6 billion in fiscal 2013, $1.4 billion in fiscal 2014, $1.0 billion in fiscal 2015 and $638 million thereafter. The changes in the carrying amounts of goodwill, which is generally not deductible for tax purposes, by operating segment for fiscal 2010 and 2009 were as follows: (in millions) New Software Licenses Software License Updatesand Product Support Hardware Systems Support Services Other(1) Total Balances as of May31, 2008 $ 4,058 $ 8,028 $ $ 1,550 $ 4,355 $ 17,991 Allocation of goodwill(1) 1,258 2,907 190 (4,355 ) Goodwill from acquisitions 373 283 56 712 Goodwill adjustments(2) 27 116 (4 ) 139 Balances as of May31, 2009 5,716 11,334 1,792 18,842 Goodwill from acquisitions 217 490 891 2 1,600 Goodwill adjustments for acquisitions consummated since the beginning of fiscal 2010(2) 7 17 32 56 Goodwill adjustments for acquisitions consummated prior to fiscal 2010(2) 55 (39 ) (89 ) (73 ) Balances as of May31, 2010 $ 5,995 $ 11,802 $ 923 $ 1,705 $ $ 20,425 (1) |
NOTES PAYABLE AND OTHER BORROWI
NOTES PAYABLE AND OTHER BORROWINGS | |
12 Months Ended
May. 31, 2010 | |
Notes to Consolidated Financials Statements | |
NOTES PAYABLE AND OTHER BORROWINGS | 8. NOTES PAYABLE AND OTHER BORROWINGS Notes payable and other borrowings consisted of the following: (Dollars in millions) May31, 2010 May31, 2009 Floating rate senior notes due May 2010 $ $ 1,000 Commercial paper notes (effective interest rate of 0.28%) 881 5.00% senior notes due January 2011, net of discount of $1 and $3 as of May31, 2010 and 2009, respectively 2,249 2,247 4.95% senior notes due April 2013 1,250 1,250 3.75% senior notes due July 2014, net of fair value adjustment of $33(1) 1,533 5.25% senior notes due January 2016, net of discount of $6 and $7 as of May31, 2010 and 2009, respectively 1,994 1,993 5.75% senior notes due April 2018, net of discount of $1 as of May31, 2010 and 2009 2,499 2,499 5.00% senior notes due July 2019, net of discount of $6 as of May31, 2010 1,744 6.50% senior notes due April 2038, net of discount of $2 as of May31, 2010 and 2009 1,248 1,248 6.125% senior notes due July 2039, net of discount of $8 as of May31, 2010 1,242 Capital leases 15 1 Total borrowings $ 14,655 $ 10,238 Notes payable, current and other current borrowings $ 3,145 $ 1,001 Notes payable, non-current and other non-current borrowings $ 11,510 $ 9,237 (1) Refer to Note 11 for a description of our accounting for fair value hedges Senior Notes and Other In July 2009, we issued $4.5 billion of fixed rate senior notes comprised of $1.5 billion of 3.75% notes due July 2014 (2014 Notes), $1.75 billion of 5.00% notes due July 2019 (2019 Notes) and $1.25 billion of 6.125% notes due July 2039 (2039 Notes). We issued these senior notes for general corporate purposes and for our acquisition of Sun and acquisition related expenses. In April 2008, we issued $5.0 billion of fixed rate senior notes, of which $1.25 billion of 4.95% senior notes is due April 2013 (2013 Notes), $2.5 billion of 5.75% senior notes is due April 2018 (2018 Notes), and $1.25 billion of 6.50% senior notes is due April 2038 (2038 Notes). We issued these senior notes to finance the acquisition of BEA and for general corporate purposes. In May 2007, we issued $2.0 billion of floating rate senior notes, of which $1.0 billion was due and paid in May 2009 and $1.0 billion was due and paid in May 2010. We had also entered into certain variable to fixed interest rate swap agreements related to these senior notes, which settled as of the same dates the notes were repaid (see Note 11). In January 2006, we issued $5.75 billion of senior notes, of which $2.25 billion of 5.00% senior notes due 2011 (2011 Notes) and $2.0 billion of 5.25% senior notes due 2016 (2016 Notes and together with the 2011 Notes, Original Senior Notes) remained outstanding as of May31, 2010 and 2009. In June 2006, we completed a registered exchange offer with substantially identical terms to the Original Senior Notes. The effective interest yields of the 2011 Notes, 2013 Notes, 2014 Notes, 2016 Notes, 2018 Notes, 2019 Notes, 2038 Notes and 2039 Notes (collectively, the Senior Notes) at May31, 2010 were 5.08% |
RESTRUCTURING ACTIVITIES
RESTRUCTURING ACTIVITIES | |
12 Months Ended
May. 31, 2010 | |
Notes to Consolidated Financials Statements | |
RESTRUCTURING ACTIVITIES | 9. RESTRUCTURING ACTIVITIES Sun Restructuring Plan During the third quarter of fiscal 2010, our management approved, committed to and initiated a plan to restructure our operations due to our acquisition of Sun (the Sun Restructuring Plan) in order to improve the cost efficiencies in our merged operations. Our management subsequently amended the Sun Restructuring Plan to reflect additional actions that we expect to take to improve the cost efficiencies in our merged operations. The total estimated restructuring costs associated with the Sun Restructuring Plan are $1.1 billion consisting primarily of employee severance expenses, abandoned facilities obligations and contract termination costs. The restructuring costs will be recorded to the restructuring expense line item within our consolidated statements of operations as they are recognized. We recorded $342 million of restructuring expenses in connection with the Sun Restructuring Plan during fiscal 2010 and we expect to incur the majority of the approximately $755 million of remaining expenses pursuant to the Sun Restructuring Plan through the calendar year 2011. Any changes to the estimates of executing the Sun Restructuring Plan will be reflected in our future results of operations. Fiscal 2009 Oracle Restructuring Plan During the third quarter of fiscal 2009, our management approved, committed to and initiated plans to restructure and further improve efficiencies in our operations (the 2009 Plan). Our management subsequently amended the 2009 Plan to reflect additional actions that we implemented over the course of fiscal 2010. The total estimated restructuring costs associated with the 2009 Plan are $453 million and will be recorded to the restructuring expense line item within our consolidated statements of operations as they are recognized. In fiscal 2010, we recorded $286 million of restructuring expenses and in fiscal 2009 we recorded $85 million of restructuring expenses in connection with the 2009 Plan. We expect to incur the remaining $82 million during our fiscal 2011. Any changes to the estimates of executing the 2009 Plan will be reflected in our future results of operations. Acquisition Related Restructuring Plans Adopted Prior to Fiscal 2010 Included in the other restructuring plans line in the fiscal 2010 and 2009 activity tables below and in the total restructuring plans line for the fiscal 2008 activity table below are certain restructuring plans that relate to companies that we acquired prior to our adoption of the revised business combinations accounting guidance contained in ASC 805 as of the beginning of fiscal 2010. Costs related to these restructuring plans were originally recognized as liabilities assumed in each of the respective business combinations and included in the allocation of the cost to acquire these companies and, accordingly, have resulted in an increase to goodwill. Our restructuring expenses may change as our management executes the approved plans. Future decreases to the estimates of executing these acquisitions related restructuring plans will be recorded as an adjustment to goodwill indefinitely. Increases to the estimates |
DEFERRED REVENUES
DEFERRED REVENUES | |
12 Months Ended
May. 31, 2010 | |
Notes to Consolidated Financials Statements | |
DEFERRED REVENUES | 10. DEFERRED REVENUES Deferred revenues consisted of the following: May31, (in millions) 2010 2009 Software license updates and product support $ 4,618 $ 4,158 Hardware systems support 537 Services 376 243 New software licenses 330 191 Hardware systems products 39 Deferred revenues, current 5,900 4,592 Deferred revenues, non-current (in other non-current liabilities) 388 204 Total deferred revenues $ 6,288 $ 4,796 Deferred software license updates and product support revenues and deferred hardware systems support revenues represent customer payments made in advance for annual support contracts. Software license updates and product support contracts and hardware systems support contracts are typically billed on a per annum basis in advance and revenues are recognized ratably over the support periods. Deferred services revenues include prepayments for consulting, On Demand and education services. Revenue for these services is recognized as the services are performed. Deferred new software license revenues typically result from undelivered products or specified enhancements, customer specific acceptance provisions, software license transactions that cannot be segmented from consulting services, amongst other reasons. Deferred hardware systems product revenues typically result from sales to customers, including channel partners and resellers, where revenue recognition criteria have not been met, transactions involving customer specific acceptance provisions or transactions that cannot be segmented from consulting services. In connection with the purchase price allocations related to our acquisitions, we have estimated the fair values of the support obligations assumed. The estimated fair values of the support obligations assumed were determined using a cost build-up approach. The cost build-up approach determines fair value by estimating the costs relating to fulfilling the obligations plus a normal profit margin. The sum of the costs and operating profit approximates, in theory, the amount that we would be required to pay a third party to assume the support obligations. These fair value adjustments reduce the revenues recognized over the support contract term of our acquired contracts. |
DERIVATIVE FINANCIAL INSTRUMENT
DERIVATIVE FINANCIAL INSTRUMENTS | |
12 Months Ended
May. 31, 2010 | |
Notes to Consolidated Financials Statements | |
DERIVATIVE FINANCIAL INSTRUMENTS | 11. DERIVATIVE FINANCIAL INSTRUMENTS We adopted the disclosure requirements of ASC 815 during fiscal 2009 and have provided these disclosures prospectively from the year of adoption. Interest Rate Swap Agreements Fair Value Hedges In September 2009, we entered into interest rate swap agreements that have the economic effect of modifying the fixed interest obligations associated with the 2014 Notes (as defined in Note 8) so that the interest payable on these notes effectively became variable based on LIBOR. The critical terms of the interest rate swap agreements and the 2014 Notes match, including the notional amounts and maturity dates. Accordingly, we have designated these swap agreements as qualifying hedging instruments and are accounting for them as fair value hedges pursuant to ASC 815. These transactions are characterized as fair value hedges for financial accounting purposes because they protect us against changes in the fair value of our fixed rate borrowings due to benchmark interest rate movements. The changes in fair values of these interest rate swap agreements are recognized as interest expense in our consolidated statements of operations with the corresponding amounts included in other assets or other non-current liabilities in our consolidated balance sheets. The amount of net gain (loss) attributable to the risk being hedged is recognized as interest expense in our consolidated statement of operations with the corresponding amount included in notes payable and other non-current borrowings. The periodic interest settlements, which occur at the same interval as the 2014 Notes, are recorded as interest expense. We do not use any interest rate swap agreements for trading purposes. Cash Flow Hedges In relation to the variable interest obligations associated with our senior notes that were due and paid in May 2010 and May 2009 (Floating Rate Notes), we entered into certain variable to fixed interest rate swap agreements to manage the economic effects of the variable interest obligations and designated these agreements as qualifying cash flow hedges. Upon payment of the Floating Rate Notes in May 2010 and May 2009, we also settled the interest rate swap agreements associated with these notes and no arrangements were outstanding as of May31, 2010. The unrealized losses on these interest rate swap agreements were included in accumulated other comprehensive income and the corresponding fair value payables were included in other current liabilities in our consolidated balance sheet. The periodic interest settlements, which occurred at the same interval as the Floating Rate Notes were recorded as interest expense. Net Investment Hedges Periodically, we hedge net assets of certain of our international subsidiaries using foreign currency forward contracts to offset the translation and economic exposures related to our foreign currency-based investments in these subsidiaries. These contracts have been designated as net investment hedges pursuant to ASC 815. We entered into these net investment hedges for all of fiscal 2009 and the majority of fiscal 2010. We suspended this program during our fourth quarter |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | |
12 Months Ended
May. 31, 2010 | |
Notes to Consolidated Financials Statements | |
COMMITMENTS AND CONTINGENCIES | 12. COMMITMENTS AND CONTINGENCIES Lease Commitments We lease certain facilities, furniture and equipment under operating leases. As of May31, 2010, future minimum annual operating lease payments and future minimum payments to be received from non-cancelable subleases were as follows: (in millions) Fiscal 2011 $ 511 Fiscal 2012 376 Fiscal 2013 257 Fiscal 2014 157 Fiscal 2015 103 Thereafter 293 Future minimum operating lease payments 1,697 Less: minimum payments to be received from non-cancelable subleases (214 ) Total future minimum operating lease payments, net $ 1,483 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 $386 million in facility obligations, net of estimated sublease income and other costs, in accrued restructuring for these locations in our consolidated balance sheet at May31, 2010. Rent expense was $318 million, $293 million and $276 million for fiscal 2010, 2009 and 2008, respectively, net of sublease income of approximately $73 million, $69 million and $57 million, respectively. Certain lease agreements contain renewal options providing for an extension of the lease term. Unconditional Purchase Obligations In the ordinary course of business, we enter into certain unconditional purchase obligations with our suppliers, which are agreements that are enforceable, legally binding and specify terms, including: fixed or minimum quantities to be purchased; fixed, minimum or variable price provisions; and the approximate timing of the payment. As a result of our acquisition of Sun, we utilize several external manufacturers to manufacture sub-assemblies for our products and to perform final assembly and testing of finished products. We also obtain individual components for our products from a variety of individual suppliers based on projected demand information. Such purchase commitments are based on our forecasted component and manufacturing requirements and typically provide for fulfillment within agreed upon lead-times and/or commercially standard lead-times for the particular part or product and have been included in this amount. Routine arrangements for other materials and goods that are not related to our external manufacturers and certain other suppliers and that are entered into in the ordinary course of business are not included in the amounts below as they are generally entered into in order to secure pricing or other negotiated terms and are difficult to quantify in a meaningful way. As of May31, 2010, our unconditional purchase obligations approximate to $684 million for fiscal 2011, $27 million for fiscal 2012, $19 million for fiscal 2013, $6 million for fiscal 2014, $3 million for fiscal 2015 and $3 million thereafter. As described in Note 2, we also have a commitment to acquire certain companies for cash consideration that we expect to pay upon the closing of these acquisitions. As described in Note 8, we have notes payable and other borrowings outstanding of $14.7 bill |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | |
12 Months Ended
May. 31, 2010 | |
Notes to Consolidated Financials Statements | |
STOCKHOLDERS' EQUITY | 13. STOCKHOLDERS' EQUITY Stock Repurchases Our Board of Directors has approved a program for us to repurchase shares of our common stock. On October20, 2008, we announced that our Board of Directors approved the expansion of our repurchase program by $8.0 billion and as of May31, 2010, approximately $5.3 billion was available for share repurchases pursuant to our stock repurchase program. We repurchased 43.3million shares for $1.0 billion (including 0.5million shares for $12 million that were repurchased but not settled), 225.6million shares for $4.0 billion and 97.3million shares for $2.0 billion in fiscal 2010, 2009 and 2008, respectively under the applicable repurchase programs authorized. Our stock repurchase authorization does not have an expiration date and the pace of our repurchase activity will depend on factors such as our working capital needs, our cash requirements for acquisitions and dividend payments, our debt repayment obligations or repurchase of our debt, our stock price, and economic and market conditions. Our stock repurchases may be effected from time to time through open market purchases or pursuant to a Rule 10b5-1 plan. Our stock repurchase program may be accelerated, suspended, delayed or discontinued at any time. Dividends on Common Stock During fiscal 2010, our Board of Directors declared cash dividends of $0.20 per share of our outstanding common stock, which we paid during the same period. In June 2010, our Board of Directors declared a quarterly cash dividend of $0.05 per share of outstanding common stock payable on August4, 2010 to stockholders of record as of the close of business on July14, 2010. Future declarations of dividends and the establishment of future record and payment dates are subject to the final determination of our Board of Directors. Accumulated Other Comprehensive Income The following table summarizes, as of each balance sheet date, the components of our accumulated other comprehensive income, net of income taxes (income tax effects were insignificant for all periods presented): May31, (in millions) 2010 2009 Foreign currency translation gains, net $ 169 $ 340 Unrealized losses on derivative financial instruments, net (131 ) (125 ) Unrealized gains on marketable securities, net 4 4 Unrealized losses on defined benefit plan, net (38 ) (3 ) Total accumulated other comprehensive income $ 4 $ 216 |
EMPLOYEE BENEFIT PLANS
EMPLOYEE BENEFIT PLANS | |
12 Months Ended
May. 31, 2010 | |
Notes to Consolidated Financials Statements | |
EMPLOYEE BENEFIT PLANS | 14. EMPLOYEE BENEFIT PLANS Stock-based Compensation Plans Stock Option Plans In fiscal 2001, we adopted the 2000 Long-Term Equity Incentive Plan (the 2000 Plan), which replaced the 1991 Long-Term Equity Incentive Plan (the 1991 Plan) and provides for the issuance of non-qualified stock options and incentive stock options, as well as stock purchase rights, stock appreciation rights and long-term performance awards to our eligible employees, officers, and directors who are also employees or consultants, independent consultants and advisers. Under the terms of the 2000 Plan, options to purchase common stock generally are granted at not less than fair market value, become exercisable as established by the Board (generally 25% annually over four years under our current practice), and generally expire no more than ten years from the date of grant. Options granted under the 1991 Plan were granted with similar terms. If options outstanding under the 1991 Plan are forfeited, repurchased, or otherwise terminate without the issuance of stock, the shares underlying such options will also become available for future awards under the 2000 Plan. As of May31, 2010, options to purchase 301million shares of common stock were outstanding under both plans, of which 144million were vested. Approximately 197million shares of common stock were available for future awards under the 2000 Plan. To date, we have not issued any stock purchase rights, stock appreciation rights, restricted stock-based awards or long-term performance awards under the 2000 Plan. In fiscal 1993, the Board adopted the 1993 Directors' Stock Option Plan (the Directors' Plan), which provides for the issuance of non-qualified stock options to non-employee directors. The Director's Plan has from time to time been amended and restated. In fiscal 2010, the Director's Plan was further amended to increase the amounts of annual stock option grants to the Chair of the Compensation Committee of the Board. Under the terms of the Directors' Plan, options to purchase 8million shares of common stock were reserved for issuance, options are granted at not less than fair market value, become exercisable over four years, and expire no more than ten years from the date of grant. The Directors' Plan provides for automatic grants of options to each non-employee director upon first becoming a director and thereafter on an annual basis, as well as automatic nondiscretionary grants for chairing certain Board committees. The Board has the discretion to replace any automatic option grant under the Directors' Plan with awards of restricted stock, restricted stock units or other stock-based awards. The number of shares subject to any such stock award will be no more than the equivalent value of the options, as determined on any reasonable basis by the Board, which would otherwise have been granted under the applicable automatic option grant. The Board will determine the particular terms of any such stock awards at the time of grant, but the terms will be consistent with those of options, as described below, granted under the Directors' Plan with respect to vesting or forfeiture schedules and treatment on te |
INCOME TAXES
INCOME TAXES | |
12 Months Ended
May. 31, 2010 | |
Notes to Consolidated Financials Statements | |
INCOME TAXES | 15. INCOME TAXES The following is a geographical breakdown of income before the provision for income taxes: Year Ended May31, (in millions) 2010 2009 2008 Domestic $ 4,282 $ 3,745 $ 3,930 Foreign 3,961 4,089 3,904 Total income before provision for income taxes $ 8,243 $ 7,834 $ 7,834 The provision for income taxes consisted of the following: Year Ended May31, (Dollars in millions) 2010 2009 2008 Current provision: Federal $ 1,307 $ 1,341 $ 1,325 State 299 361 231 Foreign 1,013 934 892 Total current provision 2,619 2,636 2,448 Deferred benefit: Federal (380 ) (177 ) (96 ) State (76 ) (52 ) (24 ) Foreign (55 ) (166 ) (15 ) Total deferred benefit (511 ) (395 ) (135 ) Total provision for income taxes $ 2,108 $ 2,241 $ 2,313 Effective income tax rate 25.6% 28.6% 29.5% The provision for income taxes differed from the amount computed by applying the federal statutory rate to our income before provision for income taxes as follows: Year Ended May31, (in millions) 2010 2009 2008 Tax provision at statutory rate $ 2,885 $ 2,742 $ 2,742 Foreign earnings at other than United States rates (672 ) (673 ) (569 ) State tax expense, net of federal benefit 161 201 135 Settlements and releases from judicial decisions and statute expirations, net (315 ) 25 (20 ) Other, net 49 (54 ) 25 Total provision for income taxes $ 2,108 $ 2,241 $ 2,313 The components of our deferred tax liabilities and assets were as follows: May31, (in millions) 2010 2009 Deferred tax liabilities: Unrealized gain on stock $ (130 ) $ (130 ) Unremitted earnings of foreign subsidiaries (100 ) (117 ) Acquired intangible assets (1,748 ) (1,831 ) Depreciation and amortization (24 ) Other (1 ) Total deferred tax liabilities $ (2,002 ) $ (2,079 ) Deferred tax assets: Accruals and allowances $ 629 $ 492 Employee compensation and benefits 649 401 Differences in timing of revenue recognition 67 141 Depreciation and amortization 219 Tax credit and net operating loss carryforwards 2,916 1,201 Other 250 44 Total deferred tax assets $ 4,511 $ 2,498 Valuation allowance $ (649 ) $ (137 ) Net deferred tax assets $ 1,860 $ 282 Recorded as: Current deferred tax assets $ 1,159 $ 661 Non-current deferred tax assets (in other assets) 1,267 145 Current deferred tax liabilities (in other current liabilities) (142 ) (44 ) Non-current deferred tax liabilities (424 ) (480 ) Net deferred tax assets $ 1,860 $ 282 We prov |
SEGMENT INFORMATION
SEGMENT INFORMATION | |
12 Months Ended
May. 31, 2010 | |
Notes to Consolidated Financials Statements | |
SEGMENT INFORMATION | 16. SEGMENT INFORMATION ASC 280, Segment Reporting, establishes standards for reporting information about operating segments. Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker, or decision making group, in deciding how to allocate resources and in assessing performance. Our chief operating decision maker is our Chief Executive Officer. We are organized geographically and by line of business. While our Chief Executive Officer evaluates results in a number of different ways, the line of business management structure is the primary basis for which the allocation of resources and financial results are assessed. As a result of our acquisition of Sun, we entered into a new hardware systems business with two operating segments as described further below. We have three businessessoftware, hardware systems and serviceswhich are further divided into seven operating segments. Our software business is comprised of two operating segments: (1)new software licenses and (2)software license updates and product support. Our hardware systems business is comprised of two operating segments: (1)hardware systems products and (2)hardware systems support. Our services business is comprised of three operating segments: (1)consulting, (2)On Demand and (3)education. The new software licenses line of business is engaged in the licensing of database and middleware software as well as our applications software. Database and middleware software includes database management software, application server software, business intelligence software, identification and access management software, content management software, portal and user interaction software, Service-Oriented Architecture and business process management software, data integration software and development tools. As a result of our acquisition of Sun, we acquired certain software technologies that expanded and enhanced our existing database and middleware software product offerings, including Java, which is a global software development platform used in a wide range of computers, networks and devices. Applications software provides enterprise information that enables companies to manage their business cycles and provide intelligence in functional areas such as customer relationship management, financials, human resources, maintenance management, manufacturing, marketing, order fulfillment, product lifecycle management, enterprise project portfolio management, enterprise performance management, procurement, sales, services, enterprise resource planning and supply chain planning. The software license updates and product support line of business provides customers with rights to unspecified software product upgrades and maintenance releases, internet access to technical content, as well as internet and telephone access to technical support personnel during the support period. The hardware systems products line of business consists primarily of computer server and storage product offerings. Most of our computer servers are based on our SPARC family of microprocessor |
EARNINGS PER SHARE
EARNINGS PER SHARE | |
12 Months Ended
May. 31, 2010 | |
Notes to Consolidated Financials Statements | |
EARNINGS PER SHARE | 17. EARNINGS PER SHARE Basic earnings per share is computed by dividing net income for the period by the weighted average number of common shares outstanding during the period. Diluted earnings per share is computed by dividing net income for the period by the weighted average number of common shares outstanding during the period, plus the dilutive effect of outstanding stock options and restricted stock-based awards and shares issuable under the employee stock purchase plan using the treasury stock method. The following table sets forth the computation of basic and diluted earnings per share: Year Ended May31, (in millions, except per share data) 2010 2009 2008 Net income $ 6,135 $ 5,593 $ 5,521 Weighted average common shares outstanding 5,014 5,070 5,133 Dilutive effect of employee stock plans 59 60 96 Diluted weighted average common shares outstanding 5,073 5,130 5,229 Basic earnings per share $ 1.22 $ 1.10 $ 1.08 Diluted earnings per share $ 1.21 $ 1.09 $ 1.06 Shares subject to anti-dilutive stock options and restricted stock-based awards excluded from calculation(1) 141 173 98 (1) These weighted shares relate to anti-dilutive stock options and restricted stock-based awards as calculated using the treasury stock method (described above) and could be dilutive in the future. See Note 14 for information regarding the exercise prices of our outstanding, unexercised options. |
LEGAL PROCEEDINGS
LEGAL PROCEEDINGS | |
12 Months Ended
May. 31, 2010 | |
Notes to Consolidated Financials Statements | |
LEGAL PROCEEDINGS | 18. LEGAL PROCEEDINGS Securities Class Action Stockholder class actions were filed in the United States District Court for the Northern District of California against us and our Chief Executive Officer on and after March9, 2001. Between March 2002 and March 2003, the court dismissed plaintiffs' consolidated complaint, first amended complaint and a revised second amended complaint. The last dismissal was with prejudice. On September1, 2004, the United States Court of Appeals for the Ninth Circuit reversed the dismissal order and remanded the case for further proceedings. The revised second amended complaint named our Chief Executive Officer, our then Chief Financial Officer (who currently is Chairman of our Board of Directors) and a former Executive Vice President as defendants. This complaint was brought on behalf of purchasers of our stock during the period from December14, 2000 through March1, 2001. Plaintiffs alleged that the defendants made false and misleading statements about our actual and expected financial performance and the performance of certain of our applications products, while certain individual defendants were selling Oracle stock in violation of federal securities laws. Plaintiffs further alleged that certain individual defendants sold Oracle stock while in possession of material non-public information. Plaintiffs also allege that the defendants engaged in accounting violations. On July26, 2007, defendants filed a motion for summary judgment, and plaintiffs filed a motion for partial summary judgment against all defendants and a motion for summary judgment against our Chief Executive Officer. On August7, 2007, plaintiffs filed amended versions of these motions. On October5, 2007, plaintiffs filed a motion seeking a default judgment against defendants or various other sanctions because of defendants' alleged destruction of evidence. A hearing on all these motions was held on December20, 2007. On April7, 2008, the case was reassigned to a new judge. On June27, 2008, the court ordered supplemental briefing on plaintiffs' sanctions motion. On September2, 2008, the court issued an order denying plaintiffs' motion for partial summary judgment against all defendants. The order also denied in part and granted in part plaintiffs' motion for sanctions. The court denied plaintiffs' request that judgment be entered in plaintiffs' favor due to the alleged destruction of evidence, and the court found that no sanctions were appropriate for several categories of evidence. The court found that sanctions in the form of adverse inferences were appropriate for two categories of evidence: e-mails from our Chief Executive Officer's account, and materials that had been created in connection with a book regarding our Chief Executive Officer. The court then denied defendants' motion for summary judgment and plaintiffs' motion for summary judgment against our Chief Executive Officer and directed the parties to revise and re-file these motions to clearly specify the precise contours of the adverse inferences that should be drawn, and to take these inferences into account with regard to the propriety of summary judgment. The court also dir |
VALUATION AND QUALIFYING ACCOUN
VALUATION AND QUALIFYING ACCOUNTS | |
12 Months Ended
May. 31, 2010 | |
[ValuationAndQualifyingAccountsDisclosureLineItems] | |
VALUATION AND QUALIFYING ACCOUNTS | SCHEDULE II ORACLE CORPORATION VALUATION AND QUALIFYING ACCOUNTS (in millions) Beginning Balance Additions Charged toOperationsor Other Accounts Write-offs Translation Adjustments and Other Ending Balance Trade Receivable Allowances Year Ended: May 31, 2008 $ 306 164 (182 ) 15 $ 303 May 31, 2009 $ 303 118 (128 ) (23 ) $ 270 May 31, 2010 $ 270 143 (92 ) (16 ) $ 305 |
Document Information
Document Information | |
12 Months Ended
May. 31, 2010 | |
Document Information [Line Items] | |
Document Type | 10-K |
Document Period End Date | 2010-05-31 |
Amendment Flag | false |
Amendment Description |
Entity Information
Entity Information (USD $) | |||
In Millions | 12 Months Ended
May. 31, 2010 | Jun. 22, 2010
| Nov. 30, 2009
|
Entity Information [Line Items] | |||
Entity Registrant Name | Oracle Corporation | ||
Entity Central Index Key | 0001341439 | ||
Current Fiscal Year End Date | --05-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $85,417 | ||
Entity Common Stock, Shares Outstanding | 5,026 | ||
Document Fiscal Year Focus | 2,010 | ||
Document Fiscal Period Focus | FY |