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Table of Contents
ORACLE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
May 31, 2009
16. EARNINGS PER SHARE
Basic earnings per share is computed by dividing net income for the period by the weighted average number
of common shares outstanding during the period. Diluted earnings per share is computed by dividing net
income for the period by the weighted average number of common shares outstanding during the period, plus
the dilutive effect of outstanding stock awards and shares issuable under the employee stock purchase plan
using the treasury stock method. The following table sets forth the computation of basic and diluted earnings
per share:
Year Ended May 31,
(in millions, except per share data) 2009 2008 2007
Net income $ 5,593 $ 5,521 $ 4,274
Weighted average common shares outstanding 5,070 5,133 5,170
Dilutive effect of employee stock plans 60 96 99
Dilutive weighted average common shares outstanding 5,130 5,229 5,269
Basic earnings per share $ 1.10 $ 1.08 $ 0.83
Diluted earnings per share $ 1.09 $ 1.06 $ 0.81
Shares subject to anti-dilutive stock options excluded from
calculation(1) 173 98 76
(1) These weighted shares relate to anti-dilutive stock options as calculated using the treasury stock method (described
above) and could be dilutive in the future. See Note 13 for information regarding the prices of our outstanding,
unexercised options.
17. LEGAL PROCEEDINGS
Securities Class Action
Stockholder class actions were filed in the United States District Court for the Northern District of California
against us and our Chief Executive Officer on and after March 9, 2001. Between March 2002 and March
2003, the court dismissed plaintiffs’ consolidated complaint, first amended complaint and a revised second
amended complaint. The last dismissal was with prejudice. On September 1, 2004, the United States Court of
Appeals for the Ninth Circuit reversed the dismissal order and remanded the case for further proceedings. The
revised second amended complaint named our Chief Executive Officer, our then Chief Financial Officer (who
currently is Chairman of our Board of Directors) and a former Executive Vice President as defendants. This
complaint was brought on behalf of purchasers of our stock during the period from December 14, 2000
through March 1, 2001. Plaintiffs alleged that the defendants made false and misleading statements about our
actual and expected financial performance and the performance of certain of our applications products, while
certain individual defendants were selling Oracle stock in violation of federal securities laws. Plaintiffs
further alleged that certain individual defendants sold Oracle stock while in possession of material non-public
information. Plaintiffs also allege that the defendants engaged in accounting violations. On July 26, 2007,
defendants filed a motion for summary judgment, and plaintiffs filed a motion for partial summary judgment
against all defendants and a motion for summary judgment against our Chief Executive Officer. On August 7,
2007, plaintiffs filed amended versions of these motions. On October 5, 2007, plaintiffs filed a motion
seeking a default judgment against defendants or various other sanctions because of defendants’ alleged
destruction of evidence. A hearing on all these motions was held on December 20, 2007. On April 7, 2008,
the case was reassigned to a new judge. On June 27, 2008, the court ordered supplemental briefing on
plaintiffs’ sanctions motion. On September 2, 2008, the court issued an order denying plaintiffs’ motion for
partial summary judgment against all defendants. The order also denied in part and granted in part plaintiffs’
motion for sanctions. The court denied plaintiffs’ request that judgment be entered in plaintiffs’ favor due to
the alleged destruction of evidence, and the court found that no sanctions were appropriate for several
categories of evidence. The court found that sanctions in the form of adverse inferences were appropriate for
two categories of evidence: e-mails from our Chief Executive Officer’s account, and materials that had been
115
Source: ORACLE CORP, 10-K, June 29, 2009 Powered by Morningstar® Document Research℠