Oracle 2007 Annual Report Download - page 98

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Table of Contents
ORACLE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
May 31, 2008
9. COMMITMENTS AND CONTINGENCIES
Lease Commitments
We lease certain facilities and furniture and equipment under operating leases. As of May 31, 2008, future
minimum annual operating lease payments and future minimum payments to be received from non-cancelable
subleases were as follows:
(in millions)
Fiscal 2009 $ 432
Fiscal 2010 370
Fiscal 2011 259
Fiscal 2012 187
Fiscal 2013 124
Thereafter 341
Future minimum operating lease payments 1,713
Less: minimum payments to be received from non-cancelable subleases (210)
Total future minimum operating lease payments, net $ 1,503
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 7. We have approximately $355 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, 2008.
Rent expense was $276 million, $224 million and $175 million for fiscal 2008, 2007 and 2006, respectively,
net of sublease income of approximately $57 million, $32 million and $23 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, 2008, our unconditional purchase obligations total $395 million for fiscal
2009, $17 million for fiscal 2010, $4 million for fiscal 2011, $3 million for fiscal 2012, $3 million for fiscal
2013 and $10 million thereafter.
We also have commitments for approximately $407 million of cash consideration that we expect to pay in the
first quarter of fiscal 2009 in connection with certain companies that we agreed to acquire.
Guarantees
Our software license agreements generally include certain provisions for indemnifying customers against
liabilities if our software products infringe a third party’s intellectual property rights. To date, we have not
incurred any material costs as a result of such indemnifications and have not accrued any liabilities related to
such obligations in our consolidated financial statements. Certain of our software license agreements also
include provisions indemnifying customers against liabilities in the event we breach confidentiality or service
level requirements. It is not possible to determine the maximum potential amount under these indemnification
agreements due to our limited 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.
93
Source: ORACLE CORP, 10-K, July 02, 2008 Powered by Morningstar® Document Research℠