Oracle 2009 Annual Report Download - page 204

RESTRUCTURING ACTIVITIES
RESTRUCTURING ACTIVITIES
(USD $)
12 Months Ended
05/31/2010
RESTRUCTURING ACTIVITIES 9. RESTRUCTURING ACTIVITIES
Sun Restructuring Plan
During the third quarter of fiscal 2010, our management approved, committed to and initiated a plan to restructure our
operations due to our acquisition of Sun (the Sun Restructuring Plan) in order to improve the cost efficiencies in our merged
operations. Our management subsequently amended the Sun Restructuring Plan to reflect additional actions that we expect
to take to improve the cost efficiencies in our merged operations. The total estimated restructuring costs associated with the
Sun Restructuring Plan are $1.1 billion consisting primarily of employee severance expenses, abandoned facilities
obligations and contract termination costs. The restructuring costs will be recorded to the restructuring expense line item
within our consolidated statements of operations as they are recognized. We recorded $342 million of restructuring
expenses in connection with the Sun Restructuring Plan during fiscal 2010 and we expect to incur the majority of the
approximately $755 million of remaining expenses pursuant to the Sun Restructuring Plan through the calendar year 2011.
Any changes to the estimates of executing the Sun Restructuring Plan will be reflected in our future results of operations.
Fiscal 2009 Oracle Restructuring Plan
During the third quarter of fiscal 2009, our management approved, committed to and initiated plans to restructure and
further improve efficiencies in our operations (the 2009 Plan). Our management subsequently amended the 2009 Plan to
reflect additional actions that we implemented over the course of fiscal 2010. The total estimated restructuring costs
associated with the 2009 Plan are $453 million and will be recorded to the restructuring expense line item within our
consolidated statements of operations as they are recognized. In fiscal 2010, we recorded $286 million of restructuring
expenses and in fiscal 2009 we recorded $85 million of restructuring expenses in connection with the 2009 Plan. We expect
to incur the remaining $82 million during our fiscal 2011. Any changes to the estimates of executing the 2009 Plan will be
reflected in our future results of operations.
Acquisition Related Restructuring Plans Adopted Prior to Fiscal 2010
Included in the other restructuring plans line in the fiscal 2010 and 2009 activity tables below and in the total restructuring
plans line for the fiscal 2008 activity table below are certain restructuring plans that relate to companies that we acquired
prior to our adoption of the revised business combinations accounting guidance contained in ASC 805 as of the beginning of
fiscal 2010. Costs related to these restructuring plans were originally recognized as liabilities assumed in each of the
respective business combinations and included in the allocation of the cost to acquire these companies and, accordingly,
have resulted in an increase to goodwill. Our restructuring expenses may change as our management executes the approved
plans. Future decreases to the estimates of executing these acquisitions related restructuring plans will be recorded as an
adjustment to goodwill indefinitely. Increases to the estimates of the acquisition related restructuring plans will be recorded
to operating expenses.
Summary of All Plans
Fiscal 2010 Activity
(in millions) Accrued
May 31,
2009(2)
Year Ended May 31, 2010 Accrued
May 31,
2010(2)
Total
Costs
Accrued
to Date
Total
Expected
Program
Costs
Initial
Costs(3) Adj. to Cost(4) Cash Payments
Others(5)
Sun Restructuring Plan
New software licenses $ — $ 6 $ — $ (1) $ — $ 5 $ 6 $ 88
Software license updates and
product support
— 6 — (3) — 3 6 89
Hardware systems business — 61 — (19) — 42 61 98
Services — 11 — (3) — 8 11 152
General and administrative and
other(1) — 258 — (222) (7) 29 258 670
Total Sun Restructuring $ — $ 342 $ — $ (248) $ (7) $ 87 $ 342 $ 1,097
Fiscal 2009 Oracle
Restructuring Plan
New software licenses $ 12 $ 106 $ 4 $ (98) $ (4) $ 20 $ 140 $ 162
Software license updates and
product support
— 3 (2) (4) 3 — 2 21
Services 22 128 2 (104) (15) 33 165 206
Other(1) 13 49 (4) (34) — 24 64 64
Total Fiscal 2009 Oracle
Restructuring
$ 47 $ 286 $ — $ (240) $ (16) $ 77 $ 371 $ 453
Total other restructuring plans $ 342 $ 6 $ (84) $ (157) $ 275 $ 382
Total restructuring plans(6) $ 389 $ 634 $ (84) $ (645) $ 252 $ 546
Fiscal 2009 Activity
(in millions) Accrued
May 31,
2008(2)
Year Ended May 31, 2009 Accrued
May 31,
2009(2)
Initial
Costs(3 ) Adj. To Cost(4) Cash Payments
Other(5 )
Fiscal 2009 Oracle Restructuring Plan
New software licenses $ — $ 30 $ — $ (18) $ — $ 12
Software license updates and product support — 1 — (1) — —
Services — 35 — (13) — 22
Other(1) — 19 — (6) — 13
Total Fiscal 2009 Oracle Restructuring $ — $ 85 $ — $ (38) $ — $ 47
Total other restructuring plans $ 568 $ 26 $ (12) $ (215) $ (25) $ 342
Total restructuring plans(6) $ 568 $ 111 $ (12) $ (253) $ (25) $ 389
Fiscal 2008 Activity
(in millions) Accrued
May 31,
Year Ended May 31, 2008 Accrued
May 31,Initial Adj. To Cash Others(5)
Source: ORACLE CORP, 10-K, July 01, 2010 Powered by Morningstar® Document Research℠