Oracle 2006 Annual Report Download - page 113

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Table of Contents
ORACLE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
May 31, 2007
and infrequent history of prior indemnification claims and the unique facts and circumstances involved in
each particular agreement. Historically, payments made by us under these agreements have not had a material
effect on our results of operations, financial position, or cash flows.
Our software license agreements also generally include a warranty that our software products will
substantially operate as described in the applicable program documentation for a period of one year after
delivery. We also warrant that services we perform will be provided in a manner consistent with industry
standards for a period of 90 days from performance of the service. Warranty expense was not significant in
fiscal 2007, fiscal 2006 or fiscal 2005.
We occasionally are required, for various reasons, to enter into agreements with financial institutions that
provide letters of credit on our behalf to parties we conduct business with in ordinary course. Such
agreements have not had a material effect on our results of operations, financial position or cash flows.
18. COMMITMENTS
Lease Commitments
We lease certain facilities and furniture and equipment under operating leases. As of May 31, 2007, future
minimum annual operating lease payments and future minimum payments to be received from non-cancelable
subleases were as follows:
Year Ended
(in millions) May 31,
2008 $ 339
2009 301
2010 242
2011 162
2012 124
Thereafter 280
Future minimum operating lease payments 1,448
Less: Minimum payments to be received from non-cancelable subleases (190)
Total, net $ 1,258
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 3. We have approximately $364 million
in facility obligations, net of estimated sublease income and other costs, in accrued restructuring for these
locations in our consolidated balance sheet at May 31, 2007.
Rent expense was $224 million, $175 million and $174 million for fiscal years 2007, 2006 and 2005,
respectively, net of sublease income of approximately $32 million, $23 million and $10 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 certain minimum quantity
and pricing terms. As of May 31, 2007, our unconditional purchase obligations total $73 million for fiscal
2008, $196 million for fiscal 2009, $3 million for fiscal 2010, $3 million for fiscal 2011, $3 million for fiscal
2012 and $14 million thereafter.
106
Source: ORACLE CORP, 10-K, June 29, 2007 Powered by Morningstar® Document Research℠