Oracle 2005 Annual Report Download - page 38

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Table of Contents
(2) Represents the amortization of intangible assets acquired in connection with acquisitions, primarily PeopleSoft and Siebel. Estimated future amortization
expense related to intangible assets is as follows:
Year Ended
May 31,
2007 $ 738
2008 727
2009 722
2010 615
2011 431
Thereafter 1,295
Total $ 4,528
(3) Acquisition related charges primarily consist of in-process research and development expenses, integration-related professional services, stock-based
compensation expenses and personnel related costs for transitional employees, as well as costs associated with our tender offer for PeopleSoft prior to the
agreement date.
(4) Restructuring costs relate to Oracle employee severance and facility closures in connection with restructuring plans initiated in the third quarter of fiscal 2006
and 2005.
(5) Stock-based compensation is included in the following operating expense line items of our consolidated statements of operations:
Year Ended May 31,
2006 2005 2004
Sales and marketing $ 8 $ 6 $ —
Software license updates and product support 3 2 —
Cost of services 7 7 —
Research and development 13 10 —
Acquisition related charges 18 47 —
Total $ 49 $ 72 $ —
Stock-based compensation included in acquisition related charges resulted from unvested options assumed from acquisitions whose vesting was fully
accelerated upon termination of the employees pursuant to the terms of these options.
We adopted Statement 123(R) in the first quarter of fiscal 2007. Statement 123(R) requires us to record the fair value amortization of all stock-based
compensation awards. See Note 1 of Notes to Consolidated Financial Statements for additional information regarding our adoption of Statement 123(R).
(6) The income tax effect on purchase accounting adjustments and other significant expenses incurred in connection with acquisitions was calculated based on
our effective tax rate of 29.7%, 28.8% and 32.0% in fiscal 2006, 2005 and 2004, respectively.
35
Source: ORACLE CORP, 10-K, July 21, 2006 Powered by Morningstar® Document Research℠