Oracle 2009 Annual Report Download - page 105

Table of Contents
ORACLE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
May 31, 2010
method as defined within ASC 718 to calculate the excess tax benefits available for use in offsetting future tax shortfalls and to determine the excess tax benefits
from stock-based compensation that we reclassify as cash flows from financing activities.
Advertising
All advertising costs are expensed as incurred. Advertising expenses, which are included within sales and marketing expenses, were $75 million, $71 million and
$81 million in fiscal 2010, 2009 and 2008, respectively.
Research and Development
All research and development costs are expensed as incurred. Costs eligible for capitalization under ASC 985-20, Software-Costs of Software to be Sold, Leased
or Marketed, were not material to our consolidated financial statements in fiscal 2010, 2009 or 2008.
Acquisition Related and Other Expenses
Acquisition related and other expenses consist of personnel related costs for transitional and certain other employees, stock-based compensation expenses,
integration related professional services, certain business combination adjustments after the measurement period or purchase price allocation period has ended,
and certain other operating expenses (income), net. Stock-based compensation included in acquisition related and other expenses resulted from unvested options
or restricted stock-based awards assumed from acquisitions whereby vesting was accelerated upon termination of the employees pursuant to the original terms of
those options or restricted stock-based awards. As a result of our adoption of the FASB’s revised accounting guidance for business combinations as of the
beginning of fiscal 2010, certain acquisition related and other expenses are now recorded as expenses in our statements of operations that would previously have
been included as a part of the consideration transferred and capitalized as a part of the accounting for our acquisitions pursuant to previous accounting rules,
primarily direct transaction costs such as professional services fees.
Year Ended May 31,
(in millions) 2010 2009 2008
Transitional and other employee related costs $ 66 $ 45 $ 32
Stock-based compensation 15 15 112
Professional fees and other, net 68 35 31
Business combination adjustments, net 5 22 6
Gain on sale of property — — (57)
Total acquisition related and other expenses $ 154 $ 117 $ 124
In fiscal 2008, we sold certain of our land and buildings for $153 million in cash. Concurrent with the sale, we leased the property back from the buyer for a
period of up to three years. We have accounted for this transaction in accordance with ASC 840, Leases and ASC 360, Property, Plant and Equipment. We
deferred $19 million of the gain on the sale representing the present value of the operating lease commitment and recognized a gain of approximately $57 million
for fiscal 2008. The deferred portion of the gain was recognized as a reduction of rent expense over the operating lease term.
Non-Operating Income (Expense), net
Non-operating income (expense), net consists primarily of interest income, net foreign currency exchange gains (losses), the noncontrolling interests in the net
profits of our majority-owned subsidiaries (Oracle Financial Services Software Limited and Oracle Japan), and net other income (losses), including net realized
gains and
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Source: ORACLE CORP, 10-K, July 01, 2010 Powered by Morningstar® Document Research℠