Oracle 2008 Annual Report Download - page 57

Table of Contents
Amortization of Intangible Assets:
Year Ended May 31,
Percent Change Percent Change
(Dollars in millions) 2009 Actual Constant 2008 Actual Constant 2007
Software support agreements and
related relationships $ 549 37% 37% $ 402 25% 25% $ 321
Developed technology 722 40% 40% 515 45% 45% 355
Core technology 255 43% 44% 178 34% 34% 133
Customer relationships 150 77% 77% 85 93% 93% 44
Trademarks 37 16% 16% 32 28% 28% 25
Total amortization of intangible
assets $ 1,713 41% 42% $ 1,212 38% 38% $ 878
Fiscal 2009 Compared to Fiscal 2008: Amortization of intangible assets increased in fiscal 2009 due to the
amortization of acquired intangibles from BEA and other acquisitions that we consummated since the
beginning of fiscal 2008. See Note 6 of Notes to Consolidated Financial Statements for additional information
regarding our intangible assets (including weighted average useful lives) and related amortization.
Fiscal 2008 Compared to Fiscal 2007: Amortization of intangible assets increased in fiscal 2008 due to the
amortization of acquired intangibles from Hyperion, BEA and other acquisitions that we consummated since
the beginning of fiscal 2007.
Acquisition Related and Other Expenses: Acquisition related and other expenses primarily consist of
in-process research and development expenses, integration related professional services, stock-based
compensation expenses, personnel related costs for transitional and other employees, certain business
combination adjustments after the purchase price allocation period has ended, and certain other expenses
(income), net. Stock-based compensation expenses included in acquisition related and other expenses relate to
unvested options assumed from acquisitions whereby vesting was accelerated upon termination of the
employees pursuant to the original terms of those options.
Year Ended May 31,
Percent Change Percent Change
(Dollars in millions) 2009 Actual Constant 2008 Actual Constant 2007
In-process research and
development $ 10 -58% -58% $ 24 -84% -84% $ 151
Transitional and other
employee related costs 45 41% 34% 32 34% 33% 24
Stock-based compensation 15 -87% -87% 112 1,144% 1,144% 9
Professional fees and other, net 25 257% 257% 7 -13% -13% 8
Business combination
adjustments 22 267% 267% 6 111% 111% (52)
Gain on sale of property — -100% -100% (57) * * —
Total acquisition related and
other expenses $ 117 -6% -4% $ 124 -11% -12% $ 140
*Not meaningful
Fiscal 2009 Compared to Fiscal 2008: On a constant currency basis, acquisition related and other expenses
decreased slightly due to lower stock-based compensation expenses in fiscal 2009 caused primarily by the
timing of stock option accelerations for certain former Hyperion and BEA employees that were incurred in
the first and fourth quarters of fiscal 2008 and lower in-process research and development expenses. These
decreases were almost entirely offset by higher transitional and other employee related expenses resulting
primarily from our acquisition of BEA, an increase in professional fees and an increase in certain acquisition
related adjustments subsequent to the end of the purchase price allocation period. In addition, we also
recognized a gain on property sale (described above) in fiscal 2008, which reduced expenses in that period.
In fiscal 2010, the items that we record to acquisition related and other expenses will change as a result of our
adoption of Statement 141(R), which could materially impact our consolidated financial statements (see
further discussion in “Critical Accounting Policies and Estimates” above and in Note 1 of Notes to
Consolidated Financial Statements).
52
Source: ORACLE CORP, 10-K, June 29, 2009 Powered by Morningstar® Document Research℠