Oracle 2009 Annual Report Download - page 69

Table of Contents
Fiscal 2010 Compared to Fiscal 2009: On a constant currency basis, acquisition related and other expenses increased in fiscal 2010 primarily due to higher
employee related and professional services expenses resulting from our acquisition of Sun.
Fiscal 2009 Compared to Fiscal 2008: On a constant currency basis, acquisition related and other expenses decreased due to lower stock-based compensation
expenses in fiscal 2009 caused primarily by the timing of stock option accelerations for certain former Hyperion and BEA employees that were incurred in the
first and fourth quarters of fiscal 2008. This decrease was almost entirely offset by higher transitional and other employee related expenses resulting primarily
from our acquisition of BEA and an increase in certain acquisition related adjustments subsequent to the end of the purchase price allocation period. In addition,
we also recognized a gain on property sale in fiscal 2008, which reduced our net expenses in that period.
Restructuring expenses: Restructuring expenses consist of employee severance costs and may also include charges for duplicate facilities and other contract
termination costs to improve our cost structure prospectively. Beginning in fiscal 2010, our adoption of the FASB’s revised accounting standard for business
combinations required that, in connection with any prospective acquisition, we record involuntary employee termination and other exit costs associated with such
acquisition to restructuring expenses in our consolidated financial statements (see further discussion under “Business Combinations” within the “Critical
Accounting Policies and Estimates” section above). For additional information regarding our Oracle-based and acquired company restructuring plans, see Note 9
of Notes to Consolidated Financial Statements included elsewhere in this Annual Report.
Year Ended May 31,
2010
Percent Change
2009
Percent Change
2008
(Dollars in millions) Actual Constant Actual Constant
Restructuring expenses $ 622 432% 423% $ 117 187% 212% $ 41
Fiscal 2010 Compared to Fiscal 2009: Restructuring expenses in fiscal 2010 included expenses associated with the Oracle Fiscal 2009 Restructuring Plan
(2009 Plan), which our management approved, committed to and initiated in order to restructure and further improve efficiencies in our Oracle-based operations.
We also incurred restructuring expenses pursuant to our Sun Restructuring Plan, which our management approved, committed to and initiated in order to better
align our cost structure as a result of our acquisition of Sun. The total estimated restructuring costs associated with the 2009 Plan and Sun Restructuring Plan are
approximately $453 million and $1.1 billion, respectively, and will be recorded to the restructuring expense line item within our consolidated statements of
operations as the costs are recognized. Restructuring expenses in fiscal 2009 were as noted below. Our estimated costs may be subject to change in future
periods.
Fiscal 2009 Compared to Fiscal 2008: During fiscal 2009, we recorded $85 million of restructuring expenses in connection with the 2009 Plan. During the
second quarter of fiscal 2008, our management approved, committed to, initiated, and subsequently amended, a plan to restructure and improve efficiencies in
our Oracle-based operations (the 2008 Plan). We incurred expenses of $39 million and $41 million during fiscal 2009 and fiscal 2008, respectively, pursuant to
the 2008 Plan.
Interest Expense:
Year Ended May 31,
2010
Percent Change
2009
Percent Change
2008
(Dollars in millions) Actual Constant Actual Constant
Interest expense $ 754 20% 20% $ 630 60% 60% $ 394
Fiscal 2010 Compared to Fiscal 2009: Interest expense increased in fiscal 2010 due to higher average borrowings resulting from our issuance of $4.5 billion
of senior notes in July 2009 and, to a lesser extent, our issuance of $2.8 billion of commercial paper notes in fiscal 2010, of which $881 million were outstanding
as of May 31, 2010 (see additional discussion in Liquidity and Capital Resources below and Note 8 of Notes to Consolidated Financial Statements included
elsewhere in this Annual Report). These increases were partially offset by a reduction in interest expense associated with the maturities and repayments of $1.0
billion of senior notes and related variable to fixed interest rate swap agreements in both May 2009 and May 2010.
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Source: ORACLE CORP, 10-K, July 01, 2010 Powered by Morningstar® Document Research℠