Oracle 2012 Annual Report Download - page 59

Download and view the complete annual report

Please find page 59 of the 2012 Oracle annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 140

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140

Excluding the effect of foreign currency rate fluctuations, total operating expenses decreased slightly in fiscal
2012 primarily due to a reduction in our hardware systems business’ expenses due to efficiencies gained
through our hardware systems support integration efforts and lower hardware systems products costs
associated with lower hardware systems products revenues; due to decreases in certain variable compensation
expenses; and due to a reduction in restructuring costs and acquisition related costs primarily associated with
expenses incurred in fiscal 2011 related to our acquisition of Sun. These fiscal 2012 expense decreases were
partially offset by fiscal 2012 expense increases in salaries and benefits primarily related to additional sales
and marketing headcount and an increase in general and administrative expenses that was due to a $120
million legal expense recovery in fiscal 2011.
Excluding the effects of foreign currency rate fluctuations, the increase in total operating margin and operating
margin as a percentage of revenues in fiscal 2012 was due to our increase in revenues while our expenses
decreased.
Fiscal 2011 Compared to Fiscal 2010: Our total revenues increased in fiscal 2011 due to $4.7 billion of
incremental revenue contribution from our hardware systems business and significant increases in our software
and services businesses’ revenues. Our total revenues growth across all of our businesses in fiscal 2011 was
favorably affected by a full year of revenue contributions from Sun as compared to our fiscal 2010 operating
results, for which Sun’s revenue contributions were limited to only a portion of the fiscal 2010 period. In
addition, our software business revenues increased as a result of the growth in our new software license revenues
and our software license updates and product support revenues. Excluding the effect of currency rate fluctuations,
the Americas contributed 55%, EMEA contributed 29% and APAC contributed 16% to our total revenues
growth.
Excluding the effect of foreign currency rate fluctuations, the increase in total operating expenses in fiscal 2011
was due to a full year of expense contributions from Sun to our fiscal 2011 operating results, including increased
expenses pertaining to hardware systems products sold and related hardware systems support offerings,
additional employee related expenses and an increase in intangible asset amortization. These increases were
partially offset by a reduction in restructuring expenses relating to our Sun Restructuring Plan and certain other
Oracle-based restructuring plans and were also favorably affected by the recovery of certain legal costs in fiscal
2011 as noted above.
On a constant currency basis, our operating margin increased during fiscal 2011 due to our total revenues growth.
Our operating margin as a percentage of revenues remained flat in fiscal 2011 as our revenues and expenses grew
at approximately the same rates.
Supplemental Disclosure Related to Certain Charges
To supplement our consolidated financial information we believe the following information is helpful to an
overall understanding of our past financial performance and prospects for the future. You should review the
introduction under “Impact of Acquisitions” (above) for a discussion of the inherent limitations in comparing
pre- and post-acquisition information.
55