Oracle 2008 Annual Report Download - page 116

Table of Contents
ORACLE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
May 31, 2009
Tax Benefits from Option Exercises
Total cash received as a result of option exercises was approximately $696 million, $1.2 billion and
$873 million for fiscal 2009, 2008 and 2007, respectively. The aggregate intrinsic value of options exercised
was $807 million, $2.0 billion and $986 million for fiscal 2009, 2008 and 2007, respectively. In connection
with these exercises, the tax benefits realized by us were $252 million, $588 million and $338 million for
fiscal 2009, 2008 and 2007, respectively. Of the total tax benefits received, we classified excess tax benefits
from stock-based compensation of $97 million, $454 million and $259 million as cash flows from financing
activities rather than cash flows from operating activities for fiscal 2009, 2008, and 2007 respectively. To
calculate the excess tax benefits available for use in offsetting future tax shortfalls as of our Statement 123(R)
adoption date, which also affects the excess tax benefits from stock-based compensation that we reclassify as
cash flows from financing activities, we adopted the alternative transition method as prescribed under FASB
Staff Position FAS 123R-3, Transition Election to Accounting for the Tax Effects of Share-Based Payment
Awards.
Employee Stock Purchase Plan
We have an Employee Stock Purchase Plan (Purchase Plan) and have amended the Purchase Plan such that
employees can purchase shares of common stock at a price per share that is 95% of the fair value of Oracle
stock as of the end of the semi-annual option period. As of May 31, 2009, 78 million shares were reserved for
future issuances under the Purchase Plan. We issued 3 million shares under the Purchase Plan in each of fiscal
2009, 2008 and 2007.
Defined Contribution and Other Postretirement Plans
We offer various defined contribution plans for our U.S. and non-U.S. employees. Total defined contribution
plan expense was $258 million, $234 million and $198 million for fiscal 2009, 2008 and 2007, respectively.
The number of plan participants in our defined contribution plans has generally increased in recent years
primarily as a result of additional eligible employees from our acquisitions.
In the United States, regular employees can participate in the Oracle Corporation 401(k) Savings and
Investment Plan (Oracle 401(k) Plan). Participants can generally contribute up to 40% of their eligible
compensation on a per-pay-period basis as defined by the plan document or by the section 402(g) limit as
defined by the United States Internal Revenue Service (IRS). We match a portion of employee contributions,
currently 50% up to 6% of compensation each pay period, subject to maximum aggregate matching amounts.
Our contributions to the plan, net of forfeitures, were $78 million, $80 million and $67 million in fiscal 2009,
2008 and 2007, respectively.
We also offer non-qualified deferred compensation plans to certain key employees whereby they may defer a
portion of their annual base and/or variable compensation until retirement or a date specified by the employee
in accordance with the plans. Deferred compensation plan assets and liabilities were approximately
$176 million and $210 million as of May 31, 2009 and 2008, respectively, and are presented in other assets
and other non-current liabilities in the accompanying consolidated balance sheets.
14. INCOME TAXES
The following is a geographical breakdown of income before the provision for income taxes:
Year Ended May 31,
(in millions) 2009 2008 2007
Domestic $ 3,745 $ 3,930 $ 3,302
Foreign 4,089 3,904 2,684
Total income before provision for income taxes $ 7,834 $ 7,834 $ 5,986
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Source: ORACLE CORP, 10-K, June 29, 2009 Powered by Morningstar® Document Research℠