Oracle 2011 Annual Report Download - page 72

days of the contracts’ dates of execution. We record the transfers of amounts due from customers to financial
institutions as sales of financial assets because we are considered to have surrendered control of these financial
assets. We financed $1.5 billion, $1.2 billion and $1.4 billion or approximately 16%, 16% and 19%, respectively,
of our new software license revenues in fiscal 2011, 2010 and 2009, respectively, and $117 million, or
approximately 3%, of our hardware systems products revenues in fiscal 2011.
Recent Financing Activities
Revolving Credit Agreements: On May 27, 2011, we entered into two revolving credit agreements with BNP
Paribas, as initial lender and administrative agent; and BNP Paribas Securities Corp., as sole lead arranger and
sole bookrunner (the 2011 Credit Agreements) to borrow $1.15 billion pursuant to these agreements. The 2011
Credit Agreements provided us with short-term borrowings for working capital and other general corporate
purposes. Interest for the 2011 Credit Agreements is based on either (x) a “base rate” calculated as the highest of
(i) BNP Paribas’s prime rate, (ii) the federal funds effective rate plus 0.50% and (iii) the LIBOR for deposits in
U.S. dollars plus 1%, or (y) LIBOR for deposits made in U.S. dollars plus 0.25%, depending on the type of
borrowings made by us. Any amounts borrowed pursuant to the 2011 Credit Agreements are due no later than
June 30, 2011, which is the termination date of the 2011 Credit Agreements. Additional details regarding the
2011 Credit Agreements are included in Note 8 of Notes to Consolidated Financial Statements included
elsewhere in this Annual Report.
On March 14, 2011, our $3.0 billion, five-year Revolving Credit Agreement dated March 15, 2006, among
Oracle; the lenders named therein, Wells Fargo Bank, National Association, as administrative agent, Bank of
America N.A. as syndication agent; the documentation agents named therein, and Wells Fargo Securities, LLC,
and Banc of America Securities LLC, as joint lead arrangers and joint bookrunners (the 2006 Credit Agreement),
expired pursuant to its terms. No debt was outstanding pursuant to the 2006 Credit Agreement as of its date of
expiration.
Senior Notes: As of May 31, 2011, we had $14.8 billion of senior notes outstanding ($13.8 billion outstanding
as of May 31, 2010). In January 2011, our 5.00% fixed rate senior notes for $2.25 billion matured and were
repaid. In July 2010, we issued $3.25 billion of fixed rate senior notes comprised of $1.0 billion of 3.875% notes
due July 2020 and $2.25 billion of 5.375% notes due July 2040. We issued these senior notes in order to repay
indebtedness, including the repayment of our $2.25 billion of senior notes that matured in January 2011, for
general corporate purposes, for future acquisitions and in order to replenish cash used to repay $1.0 billion of the
floating rate senior notes that matured in May 2010. Additional details regarding these senior notes and all other
borrowings are included in Note 8 of Notes to Consolidated Financial Statements included elsewhere in this
Annual Report.
Commercial Paper Notes: During fiscal 2011, we repaid $881 million of commercial paper notes that were
issued in fiscal 2010 pursuant to our commercial paper program, which allows us to issue and sell unsecured
short-term promissory notes pursuant to a private placement exemption from the registration requirements under
federal and state securities laws. As of May 31, 2011, we had no commercial paper notes outstanding ($881
million outstanding as of May 31, 2010).
Our ability to issue commercial paper notes in the future is highly dependent upon our ability to provide a back-
stop by means of a revolving credit facility or other debt facility for amounts equal to or greater than the amounts
of commercial paper notes we intend to issue. While presently we have no such facilities in place that may
provide a back-stop to such commercial paper notes, we currently believe that, if needed, we could put in place
one or more additional revolving credit or similar debt facilities in a timely manner and on commercially
reasonable terms.
Common Stock Repurchases: Our Board of Directors has approved a program for us to repurchase shares of
our common stock. On October 20, 2008, we announced that our Board of Directors expanded our repurchase
program by $8.0 billion and as of May 31, 2011, $4.1 billion was available for share repurchases pursuant to our
stock repurchase program. We repurchased 40.4 million shares for $1.2 billion, 43.3 million shares for $1.0
billion and 225.6 million shares for $4.0 billion in fiscal 2011, 2010 and 2009, respectively. Our stock repurchase
authorization does not have an expiration date and the pace of our repurchase activity will depend on factors such
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