Oracle 2005 Annual Report Download - page 22

Table of Contents
to additional audits in the future. We previously negotiated three unilateral Advance Pricing Agreements with the IRS that cover many of our intercompany
transfer pricing issues and preclude the IRS from making a transfer pricing adjustment within the scope of these agreements. However, these agreements, which
are effective for fiscal years through May 31, 2006, do not cover all elements of our transfer pricing and do not bind tax authorities outside the United States. We
have finalized one bilateral Advance Pricing Agreement and currently are negotiating an additional bilateral agreement to cover the period from June 1, 2001
through May 31, 2008. There can be no guarantee that such negotiations will result in an agreement.
Although we believe that our tax estimates are reasonable, we cannot assure you that the final determination of tax audits or tax disputes will not be different
from what is reflected in our historical income tax provisions and accruals.
We are also subject to non-income taxes, such as payroll, sales, use, value-added, net worth, property and goods and services taxes, in both the United States and
various foreign jurisdictions. We are regularly under audit by tax authorities with respect to these non-income taxes and may have exposure to additional
non-income tax liabilities. Our acquisition activities have increased our non-income tax exposures.
Our stock price could become more volatile and your investment could lose value. All of the factors discussed in this section could affect our stock price. The
timing of announcements in the public market regarding new products, product enhancements or technological advances by our competitors or us, and any
announcements by us of acquisitions, major transactions, or management changes could also affect our stock price. Our stock price is subject to speculation in the
press and the analyst community, changes in recommendations or earnings estimates by financial analysts, changes in investors’ or analysts’ valuation measures
for our stock, our credit ratings and market trends unrelated to our performance. A significant drop in our stock price could also expose us to the risk of securities
class actions lawsuits, which could result in substantial costs and divert management’s attention and resources, which could adversely affect our business.
Item 1B. Unresolved Staff Comments
None.
Item 2. Properties
Our properties consist of owned and leased office facilities for sales, support, research and development, consulting and administrative personnel. Our
headquarters facility consists of approximately 2.5 million square feet in Redwood City, California. We also own or lease office facilities for current use
consisting of approximately 12.2 million square feet in various other locations in the United States and abroad. Due to our restructuring and merger integration
activities in fiscal 2005 and 2006, we have vacated approximately 4.4 million square feet or 28% of total owned and leased space. This additional space is sublet
or being actively marketed for sublease or disposition.
Item 3. Legal Proceedings
The material set forth in Note 21 of Notes to Consolidated Financial Statements in Item 15 of this Annual Report on Form 10-K is incorporated herein by
reference.
Item 4. Submission of Matters to a Vote of Security Holders
None.
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Source: ORACLE CORP, 10-K, July 21, 2006 Powered by Morningstar® Document Research℠