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ORACLE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
May 31, 2012
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
We develop, manufacture, market, distribute, host and support database and middleware software; applications
software; and hardware systems, with the latter consisting primarily of computer server and storage products.
Our businesses provide products and services that are built upon industry standards, are engineered to work
together or independently within existing customer information technology (IT) environments, and run securely
on a wide range of customer IT environments, including cloud computing environments.
Database and middleware software is generally used for the secure storage, retrieval and manipulation of all
forms of software-based data and for developing and deploying applications on the internet and on corporate
intranets. Applications software is generally used to manage and automate business processes and to provide
business intelligence. We also offer software license updates and product support contracts that provide our
customers with rights to unspecified product upgrades and maintenance releases issued during the support period,
as well as technical support assistance.
On January 26, 2010, we completed our acquisition of Sun Microsystems, Inc. (Sun), a provider of hardware
systems, software and services, by means of a merger of one of our wholly owned subsidiaries with and into Sun
such that Sun became a wholly owned subsidiary of Oracle. As a result of our acquisition of Sun, we entered into
a new hardware systems business. Our hardware systems business consists of two operating segments:
(1) hardware systems products, which consists primarily of computer server and storage product offerings and
(2) hardware systems support, which provides customers with unspecified software updates for the software
components that are essential to the functionality of our hardware systems and storage products and can include
product repairs, maintenance services and technical support services. In addition, we enhanced our existing
software and services businesses with additional offerings from Sun. Our acquisition of Sun added a significant
amount of revenues and expenses to our results of operations in comparison to our historical operating results.
Basis of Financial Statements
The consolidated financial statements included our accounts and the accounts of our wholly- and majority-owned
subsidiaries. Noncontrolling interest positions of certain of our consolidated entities are reported as a separate
component of consolidated equity from the equity attributable to Oracle’s stockholders for all periods presented.
The noncontrolling interests in our net income were not significant to our consolidated results for the periods
presented and therefore have been included as a component of non-operating income (expense), net in our
consolidated statements of operations. Intercompany transactions and balances have been eliminated. Certain
other prior year balances have been reclassified to conform to the current year presentation. Such
reclassifications did not affect total revenues, operating income or net income. General and administrative
expenses as presented in our consolidated statements of operations for fiscal 2011 included a benefit of $120
million related to the recovery of legal costs that reduced our expenses in that period.
Use of Estimates
Our consolidated financial statements are prepared in accordance with U.S. generally accepted accounting
principles (GAAP) as set forth in the Financial Accounting Standards Board’s (FASB) Accounting Standards
Codification (ASC) and consider the various staff accounting bulletins and other applicable guidance issued by
the U.S. Securities and Exchange Commission (SEC). These accounting principles require us to make certain
estimates, judgments and assumptions. We believe that the estimates, judgments and assumptions upon which we
rely are reasonable based upon information available to us at the time that these estimates, judgments and
assumptions are made. These estimates, judgments and assumptions can affect the reported amounts of assets and
liabilities as of the date of the financial statements as well as the reported amounts of revenues and expenses
during the periods presented. To the extent there are differences between these estimates, judgments or
assumptions and actual results, our consolidated financial statements will be affected. In many cases, the
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