Oracle 2008 Annual Report Download - page 66

Table of Contents
The Compensation Committee of the Board of Directors reviews and approves the organization-wide stock
option grants to selected employees, all stock option grants to executive officers and any individual stock
option grants in excess of 100,000 shares. A separate Plan Committee, which is an executive officer
committee, approves individual stock option grants up to 100,000 shares to non-executive officers and
employees. Stock option activity from June 1, 2006 through May 31, 2009 is summarized as follows (shares
in millions):
Options outstanding at May 31, 2006 473
Options granted 191
Options assumed 62
Options exercised (317)
Forfeitures and cancellations (50)
Options outstanding at May 31, 2009 359
Average annualized options granted and assumed, net of forfeitures 68
Average annualized stock repurchases 185
Shares outstanding at May 31, 2009 5,005
Basic weighted average shares outstanding from June 1, 2006 through May 31, 2009 5,124
Options outstanding as a percent of shares outstanding at May 31, 2009 7.2%
In the money options outstanding (based on our May 31, 2009 stock price) as a percent of shares
outstanding at May 31, 2009 3.9%
Weighted average annualized options granted and assumed, net of forfeitures and before stock
repurchases, as a percent of weighted average shares outstanding from June 1, 2006 through
May 31, 2009 1.3%
Weighted average annualized options granted and assumed, net of forfeitures and after stock
repurchases, as a percent of weighted average shares outstanding from June 1, 2006 through
May 31, 2009 -2.3%
Our Compensation Committee approves the annual organization-wide option grants to certain key employees.
These annual option grants are made during the ten business day period following the second trading day after
the announcement of our fiscal fourth quarter earnings report.
Recent Accounting Pronouncements
For information with respect to recent accounting pronouncements and the impact of these pronouncements
on our consolidated financial statements, see Note 1 of Notes to Consolidated Financial Statements.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Cash, Cash Equivalents, Marketable Securities and Interest Income Risk
Our bank deposits and money market investments are generally held with a number of large, diverse financial
institutions worldwide that we believe mitigates some of the exposures associated with our holdings with
these financial institutions. In addition, we purchase high quality debt security investments, substantially all
with relatively short maturities (see a description of our debt securities held in Notes 3 and 4 of Notes to
Consolidated Financial Statements and “Liquidity and Capital Resources” above). Therefore, interest rate
movements generally do not materially affect the valuation of our debt security investments. Substantially all
of our marketable securities are designated as available-for-sale.
Changes in the overall level of interest rates affect the interest income that is generated from our cash, cash
equivalents and marketable securities. For fiscal 2009, total interest income was $279 million with our
investments yielding an average 2.23% on a worldwide basis. This interest rate level was down by 121 basis
points from 3.44% for fiscal 2008. If overall interest rates fell by 100 basis points from our average of 2.23%
during fiscal 2009, our annual interest income would decline by approximately $121 million, assuming
consistent investment levels. The table below presents the cash, cash equivalent and marketable securities
balances and the related weighted average
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Source: ORACLE CORP, 10-K, June 29, 2009 Powered by Morningstar® Document Research℠