Oracle 2005 Annual Report Download - page 54

Table of Contents
The following table sets forth selected unaudited quarterly information for our last eight fiscal quarters. We believe that all necessary adjustments, which
consisted only of normal recurring adjustments, have been included in the amounts stated below to present fairly the results of such periods when read in
conjunction with the consolidated financial statements and related notes included elsewhere in this Annual Report on Form 10-K. The sum of the quarterly
financial information may vary from the annual data due to rounding.
Fiscal 2006 Quarter Ended (Unaudited)
(in millions, except per share amounts) August 31 November 30 February 28 May 31
Revenues $ 2,768 $ 3,292 $ 3,470 $ 4,851
Gross profit $ 1,311 $ 1,705 $ 1,779 $ 2,606
Operating income $ 712 $ 1,116 $ 1,052 $ 1,857
Net income $ 519 $ 798 $ 765 $ 1,300
Earnings per share—basic $ 0.10 $ 0.15 $ 0.15 $ 0.25
Earnings per share—diluted $ 0.10 $ 0.15 $ 0.14 $ 0.24
Fiscal 2005 Quarter Ended (Unaudited)
(in millions, except per share amounts) August 31 November 30 February 28 May 31
Revenues $ 2,215 $ 2,756 $ 2,950 $ 3,878
Gross profit $ 1,180 $ 1,611 $ 1,493 $ 2,165
Operating income $ 715 $ 1,131 $ 770 $ 1,407
Net income $ 509 $ 815 $ 540 $ 1,022
Earnings per share—basic $ 0.10 $ 0.16 $ 0.11 $ 0.20
Earnings per share—diluted $ 0.10 $ 0.16 $ 0.10 $ 0.20
Stock Options
Our stock option program is a key component of the compensation package we provide to attract and retain talented employees and align their interests with the
interests of existing stockholders. We recognize that options dilute existing stockholders and have sought to control the number of options granted while
providing competitive compensation packages. Consistent with these dual goals, our cumulative potential dilution for each of the last three full fiscal years has
been less than 2.0% and has averaged 1.4% per year. The potential dilution percentage is calculated as the new option grants for the year, net of options forfeited
by employees leaving the company, divided by the total outstanding shares at the beginning of the year. This maximum potential dilution will only result if all
options are exercised. Many of these options, which have 10-year exercise periods, have exercise prices substantially higher than the current market price. At
May 31, 2006, 25% of our outstanding stock options had exercise prices in excess of the current market price. Consistent with our historic practices, we do not
expect that dilution from future grants before the effect of our stock repurchase program will exceed 1.5% per year for our ongoing business. Over the last 10
years, our stock repurchase program has more than offset the dilutive effect of our stock option program; however, we may reduce the level of our stock
repurchases in the future as we may use our available cash for acquisitions or to repay indebtedness. At May 31, 2006, the maximum potential dilution from all
outstanding and unexercised option awards, regardless of when granted and regardless of whether vested or unvested and including options where the strike price
is higher than the current market price, was 9.1%.
The Compensation Committee of the Board of Directors reviews and approves the organization-wide stock option grants to selected employees, all stock option
grants to executive officers and any individual stock option grants in excess of 25,000 shares. A separate Plan Committee, which is an executive officer
committee, approves individual stock option grants up to 25,000 shares to non-executive officers and employees.
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Source: ORACLE CORP, 10-K, July 21, 2006 Powered by Morningstar® Document Research℠