Oracle 2007 Annual Report Download - page 52

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Table of Contents
Year Ended May 31,
Percent Change Percent Change
(Dollars in millions) 2008 Actual Constant 2007 Actual Constant 2006
General and Administrative(1) $ 739 15% 10% $ 643 16% 13% $ 555
Stock-based compensation 69 40% 40% 49 * * —
Total expenses $ 808 17% 12% $ 692 25% 22% $ 555
% of Total Revenues 4% 4% 4%
(1) Excluding stock-based compensation
* Not meaningful
Fiscal 2008 Compared to Fiscal 2007: Excluding the effect of currency rate fluctuations, general and
administrative expenses increased during fiscal 2008 as a result of higher personnel related costs associated
with increased headcount to support our expanding operations and increased stock-based compensation
expenses. General and administrative expenses include $4 million of expenses from BEA in fiscal 2008.
Fiscal 2007 Compared to Fiscal 2006: Excluding the effect of currency rate fluctuations, general and
administrative expenses increased during fiscal 2007 as a result of higher personnel related costs associated
with increased headcount to support our expanding operations, the recognition of stock-based compensation
expenses due to the adoption of Statement 123(R) at the beginning of fiscal 2007 and increased professional
services fees, primarily litigation related expenses. General and administrative expenses included incremental
expenses of $25 million from i-flex and $10 million from Hyperion in fiscal 2007.
Amortization of Intangible Assets Expenses:
Year Ended May 31,
Percent Change Percent Change
(Dollars in millions) 2008 Actual Constant 2007 Actual Constant 2006
Software support agreements and
related relationships $ 402 25% 25% $ 321 33% 33% $ 241
Developed technology 515 45% 45% 355 72% 72% 206
Core technology 178 34% 34% 133 46% 46% 91
Customer contracts 85 93% 93% 44 47% 47% 30
Trademarks 32 28% 28% 25 67% 67% 15
Total amortization of intangible
assets $ 1,212 38% 38% $ 878 51% 51% $ 583
Fiscal 2008 Compared to Fiscal 2007: Amortization of intangible assets increased in fiscal 2008 due to the
amortization of acquired intangibles from Agile, Hyperion, BEA and other acquisitions that we consummated
since the fourth quarter of fiscal 2007. See Note 5 of Notes to Consolidated Financial Statements for
additional information regarding our intangible assets (including weighted average useful lives) and related
amortization expenses.
Fiscal 2007 Compared to Fiscal 2006: Amortization of intangible assets increased in fiscal 2007 due to the
amortization of purchased intangibles from Hyperion, Siebel (a full year of amortization in fiscal 2007 in
comparison to four months in fiscal 2006), i-flex and other acquisitions that we consummated since the fourth
quarter of fiscal 2006.
Acquisition Related and Other Expenses: Acquisition related and other expenses primarily consist of
in-process research and development expenses, integration related professional services, stock-based
compensation expenses, personnel related costs for transitional employees, certain business combination
contingency adjustments after the purchase price allocation period has ended, and certain other expenses
(income), net. Stock-based compensation expenses included in acquisition related and other expenses relate to
unvested options assumed from acquisitions whereby vesting was accelerated upon termination of the
employees pursuant to the original terms of those options.
47
Source: ORACLE CORP, 10-K, July 02, 2008 Powered by Morningstar® Document Research℠