Oracle 2008 Annual Report Download - page 56

Table of Contents
Research and Development Expenses: Research and development expenses consist primarily of personnel
related expenditures. We intend to continue to invest significantly in our research and development efforts
because, in our judgment, they are essential to maintaining our competitive position.
Year Ended May 31,
Percent Change Percent Change
(Dollars in millions) 2009 Actual Constant 2008 Actual Constant 2007
Research and development(1) $ 2,612 -1% 2% $ 2,627 24% 22% $ 2,110
Stock-based compensation 155 36% 36% 114 35% 35% 85
Total expenses $ 2,767 1% 4% $ 2,741 25% 22% $ 2,195
% of Total Revenues 12% 12% 12%
(1) Excluding stock-based compensation
Fiscal 2009 Compared to Fiscal 2008: Total research and development expenses were favorably affected by
3 percentage points of currency variations during fiscal 2009. On a constant currency basis, total research and
development expenses increased as salary expenses from higher headcount and increased stock-based
compensation expenses were partially offset by a decrease in bonus expenses. The increase in our headcount
was the combined result of our recent acquisitions, primarily BEA, and our hiring of additional personnel to
develop new functionality for our existing products. Research and development headcount as of the end of
fiscal 2009 increased by approximately 1,500 employees, or 7%, in comparison to the end of fiscal 2008.
Fiscal 2008 Compared to Fiscal 2007: Excluding the effect of currency rate fluctuations, research and
development expenses increased in fiscal 2008 due to higher employee related expenses associated with
higher headcount levels, including higher stock-based compensation expenses, and $46 million of expenses
pertaining to certain legal-related matters. The increase in our headcount was the combined result of
acquisitions, primarily BEA, and hiring of additional resources to develop new functionality for our existing
products. Research and development headcount as of the end of fiscal 2008 increased by approximately
2,550 employees in comparison to the end of fiscal 2007.
General and Administrative Expenses: General and administrative expenses primarily consist of personnel
related expenditures for information technology, finance, legal and human resources support functions.
Year Ended May 31,
Percent Change Percent Change
(Dollars in millions) 2009 Actual Constant 2008 Actual Constant 2007
General and administrative(1) $ 692 -6% -2% $ 739 15% 10% $ 643
Stock-based compensation 93 35% 35% 69 40% 40% 49
Total expenses $ 785 -3% 1% $ 808 17% 12% $ 692
% of Total Revenues 3% 4% 4%
(1) Excluding stock-based compensation
Fiscal 2009 Compared to Fiscal 2008: Total general and administrative expenses were affected by
4 percentage points of favorable currency variations during fiscal 2009. Excluding the effect of currency rate
fluctuations, general and administrative expenses increased slightly during fiscal 2009 as a result of increased
professional services fees and increased stock-based compensation expenses, which were almost entirely
offset by decreases in bonuses expenses and certain of our benefits expenses, including a reduction in our
deferred compensation expenses (see discussion under “Non-Operating Income, net” below).
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.
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Source: ORACLE CORP, 10-K, June 29, 2009 Powered by Morningstar® Document Research℠