Oracle 2010 Annual Report Download - page 69

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increases were partially offset by a reduction in amortization associated with certain of our intangible assets that became fully amortized in fiscal 2011.
Amortization of intangible assets increased in fiscal 2010 in comparison to fiscal 2009 due to additional amortization from acquired intangible assets that we
acquired since the beginning of fiscal 2009, including from our acquisition of Sun. See Note 7 of Notes to Consolidated Financial Statements included elsewhere
in this Annual Report for additional information regarding our intangible assets (including weighted average useful lives) and related amortization.
Acquisition Related and Other Expenses: Acquisition related and other expenses consist of personnel related costs for transitional and certain other
employees, stock-based compensation expenses, integration related professional services, certain business combination adjustments after the measurement
periods or purchase price allocation periods have ended, and certain other operating expenses, net. Stock-based compensation expenses included in acquisition
related and other expenses resulted from unvested stock options and restricted stock-based awards assumed from acquisitions whereby vesting was accelerated
upon termination of the employees pursuant to the original terms of those stock options and restricted stock-based awards. As a result of our adoption of the
FASB’s revised accounting standard for business combinations as of the beginning of fiscal 2010, certain acquisition related and other expenses were recorded as
expenses in our fiscal 2011 and 2010 statements of operations that had been historically included as a part of the consideration transferred and capitalized as a
part of our accounting for acquisitions pursuant to previous accounting rules, primarily direct transaction costs such as professional services fees.
Year Ended May 31,
Percent Change Percent Change
(Dollars in millions) 2011 Actual Constant 2010 Actual Constant 2009
Transitional and other employee related costs $ 129 94% 86% $ 66 46% 54% $ 45
Stock-based compensation 10 -37% -37% 15 -1% -1% 15
Professional fees and other, net 66 -2% -4% 68 99% 96% 35
Business combination adjustments, net 3 -28% -78% 5 -79% -76% 22
Total acquisition related and other expenses $ 208 35% 27% $ 154 32% 36% $ 117
Fiscal 2011 Compared to Fiscal 2010: On a constant currency basis, acquisition related and other expenses increased primarily due to the full fiscal year
impact of Sun’s expense contributions, including higher transitional employee related expenses.
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.
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. 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,
Percent Change Percent Change
(Dollars in millions) 2011 Actual Constant 2010 Actual Constant 2009
Restructuring expenses $ 487 -22% -23% $ 622 432% 423% $ 117
Fiscal 2011 Compared to Fiscal 2010: Restructuring expenses in fiscal 2011 primarily related 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. To a lesser extent, we also incurred expenses
associated with other Oracle-based plans, which our management approved, committed to and initiated in order to restructure and
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Source: ORACLE CORP, 10-K, June 28, 2011 Powered by Morningstar® Document Research℠