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Table of Contents
exposure recorded for this lawsuit during the purchase price allocation period and the actual settlement
amount has been included in our consolidated statement of operations for fiscal 2007.
Fiscal 2006 Compared to Fiscal 2005: Acquisition related charges decreased due to lower professional fees,
stock-based compensation charges and lower transitional employee costs, partially offset by higher in-process
research and development charges primarily related to the Siebel acquisition.
Restructuring: Restructuring expenses consist of Oracle employee severance costs and Oracle duplicate
facilities closures which were initiated to improve our cost structure as a result of acquisitions. For additional
information regarding the Oracle restructuring plans, as well as restructuring activities of our acquired
companies, please see Note 3 of Notes to Consolidated Financial Statements.
Year Ended May 31,
(Dollars in millions) 2007 Change 2006 Change 2005
Severance costs $ 19 -78% $ 85 -33% $ 126
Excess facilities — * — -100% 21
Total restructuring charges $ 19 -78% $ 85 -42% $ 147
Fiscal 2007 Compared to Fiscal 2006: Restructuring expenses decreased as our management did not initiate
and communicate any plans to restructure our Oracle-based operations during fiscal 2007. Restructuring
expenses in fiscal 2007 relate to notifications made pursuant to the Fiscal 2006 Oracle Restructuring Plan.
Fiscal 2006 Compared to Fiscal 2005: Restructuring expenses decreased in fiscal 2006 due to lower
headcount terminations and related severance costs. Additionally, the restructuring program in fiscal 2005
included $21 million of facility exit and termination costs.
Interest Expense:
Year Ended May 31,
Percent Change Percent Change
(Dollars in millions) 2007 Actual Constant 2006 Actual Constant 2005
Interest expense $ 343 103% 104% $ 169 25% 26% $ 135
Fiscal 2007 Compared to Fiscal 2006: Interest expense increased in fiscal 2007 due to higher average
borrowings in fiscal 2007 related to our $5.75 billion aggregate principal amount of senior notes issued in
January 2006 (of which $1.5 billion was redeemed by us in May 2007), our $2.1 billion of commercial paper
issuances (of which approximately $1.4 billion remained outstanding as of May 31, 2007) and our $2.0 billion
of senior notes issued in May 2007.
Fiscal 2006 Compared to Fiscal 2005: Interest expense increased in fiscal 2006 compared to fiscal 2005 due
to higher average borrowings related to the $5.75 billion senior notes issued in January 2006 as well as
outstanding balances under our commercial paper program and unsecured loan facility, both of which were
repaid in fiscal 2006.
Non-Operating Income, net: Non-operating income, net consists primarily of interest income, net foreign
currency exchange gains (losses), net investment gains related to marketable securities and other investments
as well as the minority interests’ share in the net profits of i-flex and Oracle Japan.
48
Source: ORACLE CORP, 10-K, June 29, 2007 Powered by Morningstar® Document Research℠