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Table of Contents
ORACLE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
May 31, 2014
upon termination of the employees pursuant to the original terms of those options and restricted stock-based awards.
Included in acquisition related and other expenses for fiscal 2013 were changes in estimates for contingent consideration payable, which reduced
acquisition related and other expenses by $387 million during fiscal 2013 (see Note 2 for additional information). Acquisition related and other
expenses for fiscal 2013 also included a benefit of $306 million related to certain litigation (see Note 18 for additional information), which
reduced our acquisition related and other expenses in this period.
Non-Operating (Expense) Income, net
Non
-operating (expense) income, 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.
Included in our non-operating (expense) income, net for fiscal 2014 are foreign currency remeasurement losses of $213 million. These
remeasurement losses were related to the remeasurement of certain assets and liabilities of our Venezuelan subsidiary. The Venezuelan economy
has been determined to be “highly inflationary” in accordance with ASC 830, Foreign Currency Matters
. As a result, we report all net monetary
assets related to our Venezuelan subsidiary in U.S. Dollars with the associated impacts of periodic changes of Bolivar Fuerte (“VEF”) to
U.S. Dollar exchange rates in our statements of operations for each respective reporting period. During fiscal 2014, the Venezuelan government
issued new exchange agreements that allow for certain foreign currency transactions, which previously were subject to Venezuela’s official
Bolivar Fuerte (“VEF”) to U.S. Dollar exchange rate (the “Official Rate”), to be subject to conversion at rates established at the Venezuelan
government’s auction-based exchange rate programs, the Complementary System for Foreign Currency Administration (“SICAD”) rates. These
SICAD rates were lower than the Official Rate that we had used historically to report the VEF based transactions and net monetary assets of our
Venezuelan subsidiary. To determine which of the various VEF rates to use during fiscal 2014, we evaluated our individual facts and
circumstances taking into consideration our legal ability to convert VEF at or to settle VEF based transactions using the SICAD rates, amongst
other factors. We concluded that using the SICAD rates was the most
100
Year Ended May 31,
(in millions)
2014
2013
2012
Transitional and other employee related costs
$
27
$
27
$
25
Stock
-
based compensation
10
33
33
Professional fees and other, net
20
(276
)
13
Business combination adjustments, net
(16
)
(388
)
(15
)
Total acquisition related and other expenses
$
41
$
(604
)
$
56
Year Ended May 31,
(in millions)
2014
2013
2012
Interest income
$
263
$
237
$
231
Foreign currency losses, net
(375
)
(162
)
(105
)
Noncontrolling interests in income
(98
)
(112
)
(119
)
Other income, net
69
48
15
Total non
-
operating (expense) income, net
$
(141
)
$
11
$
22