Oracle 2009 Annual Report Download - page 77

Table of Contents
Fiscal 2009 Quarter Ended (Unaudited)
(in millions, except per share amounts) August 31 November 30 February 28 May 31
Revenues $ 5,331 $ 5,607 $ 5,453 $ 6,861
Gross profit $ 3,805 $ 4,185 $ 4,119 $ 5,441
Operating income $ 1,521 $ 1,975 $ 1,940 $ 2,884
Net income $ 1,077 $ 1,296 $ 1,329 $ 1,891
Earnings per share—basic $ 0.21 $ 0.25 $ 0.27 $ 0.38
Earnings per share—diluted $ 0.21 $ 0.25 $ 0.26 $ 0.38
Stock Options and Restricted Stock-Based Awards
Our stock-based compensation program is a key component of the compensation package we provide to attract and retain certain of our talented employees and
align their interests with the interests of existing stockholders. We historically have granted only stock options to our employees. The restricted stock-based
awards included in the table presented below were assumed as a result of acquisitions.
We recognize that options and restricted stock-based awards dilute existing stockholders and have sought to control the number of options and restricted
stock-based awards granted while providing competitive compensation packages. Consistent with these dual goals, our cumulative potential dilution since June 1,
2007 has been a weighted average annualized rate of 1.3% per year. The potential dilution percentage is calculated as the average annualized new options or
restricted stock-based awards granted and assumed, net of options and restricted stock-based awards forfeited by employees leaving the company, divided by the
weighted average outstanding shares during the calculation period. This maximum potential dilution will only result if all options are exercised and restricted
stock-based awards vest. Some of the outstanding options, which generally have a 10 year exercise period, have exercise prices higher than the current market
price of our common stock. At May 31, 2010, 7% of our outstanding stock options had exercise prices in excess of the current market price. Consistent with our
historical practices, we do not expect that dilution from future grants before the effect of our stock repurchase program will exceed 2.0% per year for our ongoing
business. In recent years, our stock repurchase program has more than offset the dilutive effect of our stock-based compensation program; however, we may
reduce the level of our stock repurchases in the future as we may use our available cash for acquisitions, to pay dividends, to repay or repurchase indebtedness or
for other purposes. At May 31, 2010, the maximum potential dilution from all outstanding and unexercised stock option and restricted stock-based awards,
regardless of when granted and regardless of whether vested or unvested and including options where the strike price is higher than the current market price, was
7.1%.
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Source: ORACLE CORP, 10-K, July 01, 2010 Powered by Morningstar® Document Research℠