Oracle 2008 Annual Report Download - page 111

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Table of Contents
ORACLE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
May 31, 2009
11. COMMITMENTS AND CONTINGENCIES
Lease Commitments
We lease certain facilities, furniture and equipment under operating leases. As of May 31, 2009, future
minimum annual operating lease payments and future minimum payments to be received from non-cancelable
subleases were as follows:
(in millions)
Fiscal 2010 $ 388
Fiscal 2011 287
Fiscal 2012 206
Fiscal 2013 137
Fiscal 2014 116
Thereafter 200
Future minimum operating lease payments 1,334
Less: minimum payments to be received from non-cancelable subleases (171)
Total future minimum operating lease payments, net $ 1,163
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 8. We have approximately $259 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, 2009.
Rent expense was $293 million, $276 million and $224 million for fiscal 2009, 2008 and 2007, respectively,
net of sublease income of approximately $69 million, $57 million and $32 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, 2009, our unconditional purchase obligations total $88 million for fiscal 2010, $21 million for
fiscal 2011, $11 million for fiscal 2012, $3 million for fiscal 2013, $3 million for fiscal 2014 and $39 million
thereafter.
As described in Note 2, we also have a commitment in connection with our proposed acquisition of Sun
Microsystems, Inc. for approximately $7.4 billion of cash consideration that we expect to pay upon closing of
this acquisition and other insignificant commitments to acquire certain other companies. As described in
Note 7, we have notes payable and other borrowings outstanding of $10.2 billion that mature at various future
dates, including $1.0 billion that matures in fiscal 2010.
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
103
Source: ORACLE CORP, 10-K, June 29, 2009 Powered by Morningstar® Document Research℠