Oracle 2010 Annual Report Download - page 70

Table of Contents
further improve efficiencies in our Oracle-based operations. We incurred restructuring expenses of $439 million in connection with the Sun Restructuring Plan in
fiscal 2011. The total estimated remaining restructuring costs associated with the Sun Restructuring Plan are approximately $250 million, and will be recorded to
the restructuring expense line item within our consolidated statements of operations as the costs are incurred. Our estimated costs may be subject to change in
future periods. Restructuring expenses in fiscal 2010 were as noted below.
Fiscal 2010 Compared to Fiscal 2009: During fiscal 2010, we recorded restructuring expenses primarily in connection with our Sun Restructuring Plan and
our Fiscal 2009 Oracle Restructuring Plan (2009 Plan). During fiscal 2009, we primarily incurred restructuring expenses associated with the 2009 Plan.
Interest Expense:
Year Ended May 31,
Percent Change Percent Change
(Dollars in millions) 2011 Actual Constant 2010 Actual Constant 2009
Interest expense $ 808 7% 7% $ 754 20% 20% $ 630
Fiscal 2011 Compared to Fiscal 2010: Interest expense increased in fiscal 2011 due to higher average borrowings resulting primarily from our issuance of
$3.25 billion of senior notes in July 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). This interest expense increase was partially offset by a reduction in interest expense associated with the
maturities and repayments of $2.25 billion of senior notes, which matured in January 2011, and $1.0 billion of floating rate senior notes and related variable to
fixed interest rate swap agreements in May 2010.
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 was outstanding
as of May 31, 2010. These increases were partially offset by a reduction in interest expense associated with the maturities and repayments of $1.0 billion of
floating rate senior notes and related variable to fixed interest rate swap agreements in both May 2009 and May 2010.
Non-Operating Income (Expense), net: Non-operating income (expense), net consists primarily of interest income, net foreign currency exchange gains
(losses), the noncontrolling interests in the net profits of our majority-owned subsidiaries (Oracle Financial Services Software Limited and Oracle Japan), and net
other income (losses) including net realized gains and losses related to all of our investments and net unrealized gains and losses related to the small portion of
our investment portfolio that we classify as trading.
Year Ended May 31,
Percent Change Percent Change
(Dollars in millions) 2011 Actual Constant 2010 Actual Constant 2009
Interest income $ 163 34% 32% $ 122 -56% -57% $ 279
Foreign currency gains (losses), net 11 108% 112% (148) -170% -170% (55)
Noncontrolling interests in income (97) -2% -1% (95) -12% -11% (84)
Other income, net 109 92% 89% 56 1,192% 1,055% 3
Total non-operating income (expense), net $ 186 388% 372% $ (65) -145% -144% $ 143
Fiscal 2011 Compared to Fiscal 2010: We recorded non-operating income, net during fiscal 2011 in comparison to non-operating expense, net in fiscal 2010
primarily due to net foreign currency transaction losses incurred in fiscal 2010, which included a foreign currency remeasurement loss of $81 million resulting
from the designation of our Venezuelan subsidiary as “highly inflationary” in accordance with the FASB’s ASC 830, Foreign Currency Matters, and the
subsequent devaluation of the Venezuelan currency by the Venezuelan government. In addition, our interest income increased in fiscal 2011 due to larger
average cash, cash equivalents and marketable securities balances and other income, net increased in fiscal 2011 as a result of gains recognized on the sale of
certain equity investments.
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Source: ORACLE CORP, 10-K, June 28, 2011 Powered by Morningstar® Document Research℠