Oracle 2011 Annual Report Download - page 73

as our working capital needs, our cash requirements for acquisitions and dividend repayments, our debt
repayment obligations (described further below), our stock price, and economic and market conditions. Our stock
repurchases may be effected from time to time through open market purchases or pursuant to a Rule 10b5-1 plan.
Our stock repurchase program may be accelerated, suspended, delayed or discontinued at any time.
Cash Dividends: In fiscal 2011, we declared and paid cash dividends of $0.21 per share that totaled $1.1
billion. In June 2011, our Board of Directors declared a quarterly cash dividend of $0.06 per share of outstanding
common stock payable on August 3, 2011 to stockholders of record as of the close of business on July 13, 2011.
Future declarations of dividends and the establishment of future record and payment dates are subject to the final
determination of our Board of Directors.
Contractual Obligations: The contractual obligations presented in the table below represent our estimates of
future payments under fixed contractual obligations and commitments. Changes in our business needs,
cancellation provisions, changing interest rates and other factors may result in actual payments differing from
these estimates. We cannot provide certainty regarding the timing and amounts of payments. We have presented
below a summary of the most significant assumptions used in preparing this information within the context of
our consolidated financial position, results of operations and cash flows. The following is a summary of our
contractual obligations as of May 31, 2011:
Year Ending May 31,
(Dollars in millions) Total 2012 2013 2014 2015 2016 Thereafter
Principal payments on short-term and long-term borrowings(1) ..... $ 15,900 $
Interest payments on borrowings(1) ........................... 10,799
Operating leases(2) ........................................ 1,570
Purchase obligations and other(3) ............................ 481
1,150 $
738
458
453
1,250
738
341
15
$ — $
676
226
7
1,500 $
665
159
3
2,000 $
655
121
3
10,000
7,327
265
—
Total contractual obligations ............................ $ 28,750 $ 2,799 $ 2,344 $ 909 $ 2,327 $ 2,779 $ 17,592
(1) Our total borrowings consist of the following as of May 31, 2011 (dollars in millions):
Amount
Short-term borrowings (effective interest rate of 0.44%) ............................................... $ 1,150
4.95% senior notes due April 2013 ................................................................ 1,250
3.75% senior notes due July 2014, including fair value adjustment of $69 ................................. 1,569
5.25% senior notes due January 2016, net of discount of $5 ............................................ 1,995
5.75% senior notes due April 2018, net of discount of $1 .............................................. 2,499
5.00% senior notes due July 2019, net of discount of $5 ............................................... 1,745
3.875% senior notes due July 2020, net of discount of $2 .............................................. 998
6.50% senior notes due April 2038, net of discount of $2 .............................................. 1,248
6.125% senior notes due July 2039, net of discount of $8 .............................................. 1,242
5.375% senior notes due July 2040, net of discount of $25 ............................................. 2,225
Total borrowings .......................................................................... $ 15,921
We have entered into certain interest rate swap agreements related to our July 2014 senior notes that have the economic effect of
modifying the fixed interest obligations associated with these senior notes so that the interest obligations effectively became variable
pursuant to a LIBOR-based index. Interest payments on the July 2014 senior notes presented in the contractual obligations table above
have been estimated using an interest rate of 1.38%, which represented our effective interest rate as of May 31, 2011 after consideration
of these fixed to variable interest rate swap agreements, and are subject to change in future periods. The changes in fair value of our debt
associated with the interest rate risk that we are hedging pursuant to these agreements are included in notes payable and other non-current
borrowings in our consolidated balance sheet and have been included in the above table of borrowings.
(2) Primarily represents leases of facilities and includes future minimum rent payments for facilities that we have vacated pursuant to our
restructuring and merger integration activities. We have approximately $320 million in facility obligations, net of estimated sublease
income, in accrued restructuring for these locations in our consolidated balance sheet at May 31, 2011.
(3) Primarily represents amounts associated with agreements that are enforceable, legally binding and specify terms, including: fixed or
minimum quantities to be purchased; fixed, minimum or variable price provisions; and the approximate timing of the payment. We
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