Oracle 2010 Annual Report Download - page 186

RESTRUCTURING ACTIVITIES
RESTRUCTURING ACTIVITIES
(USD $)
12 Months Ended
05/31/2011
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 $1.0 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 $439 million and $342 million of
restructuring expenses in connection with the Sun Restructuring Plan in fiscal 2011 and 2010, respectively, and we expect to
incur the majority of the approximately $250 million of remaining expenses pursuant to the Sun Restructuring Plan through
fiscal 2012. Any changes to the estimates of executing the Sun Restructuring Plan will be reflected in our future results of
operations.
Other Restructuring Plans
Included in the other restructuring plans line in the fiscal 2011 and 2010 activity tables, and total restructuring plans line in
the fiscal 2009 activity table, below are our Fiscal 2009 Oracle Restructuring Plan (the 2009 Plan) and 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. The total estimated restructuring costs associated with
the 2009 Plan are recorded to the restructuring expense line item within our consolidated statements of operations as they
are recognized whereas costs related to acquired companies related 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 acquisition 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 2011 Activity
(in millions) Accrued
May 31,
2010(2)
Year Ended May 31, 2011 Accrued
May 31,
2011(2)
Total
Costs
Accrued
to Date
Total
Expected
Program
Costs
Initial
Costs(3)
Adj.
to
Cost(4)
Cash
Payments
Others(5)
Sun Restructuring
Plan(1)
New software
licenses
$ 5 $ 67 $ (4 ) $ (55 ) $ 1 $ 14 $ 69 $ 88
Software license
updates and product
support
3 52 (1 ) (34 ) (1 ) 19 57 89
Hardware systems
business
42 53 (3 ) (83 ) 1 10 111 120
Services 8 49 (4 ) (43 ) (1 ) 9 56 74
General and
administrative and
other
29 226 4 (154 ) (5 ) 100 488 660
Total Sun
Restructuring
$ 87 $ 447 $ (8 ) $ (369 ) $ (5 ) $ 152 $ 781 $ 1,031
Total other
restructuring plans(6)
$ 459 $ 57 $ (17 ) $ (223 ) $ 21 $ 297
Total restructuring
plans(7)
$ 546 $ 504 $ (25 ) $ (592 ) $ 16 $ 449
Fiscal 2010 Activity
Source: ORACLE CORP, 10-K, June 28, 2011 Powered by Morningstar® Document Research℠