Oracle 2009 Annual Report Download - page 52

Table of Contents
In our discussion of changes in our results of operations from fiscal 2010 compared to fiscal 2009, and fiscal 2009 compared to fiscal 2008, we quantify the
contribution of our acquired products to the growth in new software license revenues, software license updates and product support revenues, hardware systems
products revenues (as applicable) and hardware systems support revenues (as applicable) for the one year period subsequent to the acquisition date. We also are
able to quantify the total incremental expenses associated with our hardware systems products and hardware systems support operating segments. For fiscal 2010,
we include estimates of Sun’s contributions to our total revenues and total operating income. These Sun estimates are based in part on management’s estimates
and allocations of Sun’s direct revenue and expense contributions which cannot be separately identified as a result of our ongoing integration of the Sun and
Oracle businesses. The incremental contributions of our other acquisitions to our other businesses and operating segments’ revenues and expenses are not
provided as they either were not separately identifiable due to the integration of these operating segments into our existing operations and/or were insignificant to
our results of operations during the periods presented.
We caution readers that, while pre- and post-acquisition comparisons as well as the quantified amounts themselves may provide indications of general trends, the
acquisition information that we provide has inherent limitations for the following reasons:
• the quantifications cannot address the substantial effects attributable to changes in business strategies, including our sales force integration efforts.
We believe that if our acquired companies had operated independently and sales forces had not been integrated, the relative mix of products sold
would have been different; and
• although substantially all of our customers, including customers from acquired companies, renew their software license updates and product support
contracts when the contracts are eligible for renewal and we intend to focus our efforts on renewing hardware systems support contracts, the
amounts shown as software license updates and product support deferred revenues and hardware systems support deferred revenues in our
supplemental disclosure related to certain charges and gains (presented below) are not necessarily indicative of revenue improvements we will
achieve upon contract renewal to the extent customers do not renew.
Constant Currency Presentation
Our international operations have provided and will continue to provide a significant portion of our total revenues and expenses. As a result, total revenues and
expenses will continue to be affected by changes in the U.S. Dollar against major international currencies. In order to provide a framework for assessing how our
underlying businesses performed excluding the effect of foreign currency fluctuations, we compare the percent change in the results from one period to another
period in this Annual Report using constant currency disclosure. To present this information, current and comparative prior period results for entities reporting in
currencies other than U.S. Dollars are converted into U.S. Dollars at constant exchange rates (i.e. the rates in effect on May 31, 2009, which was the last day of
our prior fiscal year) rather than the actual exchange rates in effect during the respective periods. For example, if an entity reporting in Euros had revenues of
1.0 million Euros from products sold on May 31, 2010 and May 31, 2009, our financial statements would reflect reported revenues of $1.22 million in fiscal 2010
(using 1.22 as the month-end average exchange rate for the period) and $1.39 million in fiscal 2009 (using 1.39 as the month-end average exchange rate for the
period). The constant currency presentation would translate the fiscal 2010 results using the fiscal 2009 exchange rate and indicate, in this example, no change in
revenues during the period. In each of the tables below, we present the percent change based on actual, unrounded results in reported currency and in constant
currency.
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Source: ORACLE CORP, 10-K, July 01, 2010 Powered by Morningstar® Document Research℠