Oracle 2009 Annual Report Download - page 122

Table of Contents
ORACLE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
May 31, 2010
12. COMMITMENTS AND CONTINGENCIES
Lease Commitments
We lease certain facilities, furniture and equipment under operating leases. As of May 31, 2010, future minimum annual operating lease payments and future
minimum payments to be received from non-cancelable subleases were as follows:
(in millions)
Fiscal 2011 $ 511
Fiscal 2012 376
Fiscal 2013 257
Fiscal 2014 157
Fiscal 2015 103
Thereafter 293
Future minimum operating lease payments 1,697
Less: minimum payments to be received from non-cancelable subleases (214)
Total future minimum operating lease payments, net $ 1,483
Lease commitments include future minimum rent payments for facilities that we have vacated pursuant to our restructuring and merger integration activities, as
discussed in Note 9. We have approximately $386 million in facility obligations, net of estimated sublease income and other costs, in accrued restructuring for
these locations in our consolidated balance sheet at May 31, 2010.
Rent expense was $318 million, $293 million and $276 million for fiscal 2010, 2009 and 2008, respectively, net of sublease income of approximately $73
million, $69 million and $57 million, respectively. Certain lease agreements contain renewal options providing for an extension of the lease term.
Unconditional Purchase Obligations
In the ordinary course of business, we enter into certain unconditional purchase obligations with our suppliers, which are agreements that are enforceable, legally
binding and specify terms, including: fixed or minimum quantities to be purchased; fixed, minimum or variable price provisions; and the approximate timing of
the payment. As a result of our acquisition of Sun, we utilize several external manufacturers to manufacture sub-assemblies for our products and to perform final
assembly and testing of finished products. We also obtain individual components for our products from a variety of individual suppliers based on projected
demand information. Such purchase commitments are based on our forecasted component and manufacturing requirements and typically provide for fulfillment
within agreed upon lead-times and/or commercially standard lead-times for the particular part or product and have been included in this amount. Routine
arrangements for other materials and goods that are not related to our external manufacturers and certain other suppliers and that are entered into in the ordinary
course of business are not included in the amounts below as they are generally entered into in order to secure pricing or other negotiated terms and are difficult to
quantify in a meaningful way.
As of May 31, 2010, our unconditional purchase obligations approximate to $684 million for fiscal 2011, $27 million for fiscal 2012, $19 million for fiscal 2013,
$6 million for fiscal 2014, $3 million for fiscal 2015 and $3 million thereafter.
As described in Note 2, we also have a commitment to acquire certain companies for cash consideration that we expect to pay upon the closing of these
acquisitions. As described in Note 8, we have notes payable and other borrowings outstanding of $14.7 billion that mature at various future dates.
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Source: ORACLE CORP, 10-K, July 01, 2010 Powered by Morningstar® Document Research℠