Oracle 2013 Annual Report Download - page 44

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Table of Contents
Acquisitions
An active acquisition program is another important element of our corporate strategy. In recent years, we have invested billions of dollars to
acquire a number of complementary companies, products, services and technologies including Responsys, Inc. (Responsys) and Tekelec Global,
Inc. (Tekelec) in fiscal 2014, and Acme Packet, Inc. (Acme Packet) in fiscal 2013, amongst others.
On June 22, 2014, we entered into an Agreement and Plan of Merger (Merger Agreement) with MICROS Systems, Inc. (MICROS), a provider
of integrated software, hardware and services solutions to the hospitality and retail industries. Pursuant to the Merger Agreement, we will
commence a tender offer for the outstanding shares and shares generally representing vested equity incentive awards of MICROS (collectively,
MICROS Shares). MICROS shareholders will have the right to tender their MICROS Shares to Oracle in exchange for $68.00 per share in cash
upon consummation of the tender offer. The tender offer will commence no later than ten business days from June 22, 2014. After completion of
the tender offer and subject to certain limited conditions, MICROS will merge with and into a wholly-owned subsidiary of Oracle. In addition,
unvested equity awards to acquire MICROS common stock that are outstanding immediately prior to the conclusion of the merger will generally
be converted into equity awards denominated in shares of our common stock based on formulas contained in the Merger Agreement. The
estimated total purchase price for MICROS is approximately $5.3 billion. This transaction is conditioned upon (i) at least a majority of the
MICROS Shares being validly tendered to Oracle, (ii) regulatory clearance under the Hart-Scott-Rodino Antitrust Improvements Act of 1976,
(iii) the applicable merger control laws of the European Commission and other jurisdictions, and (iv) certain other customary closing conditions.
We believe our acquisition program strengthens our competitive position, enhances the products and services that we can offer to customers,
expands our customer base, provides greater scale to accelerate innovation, grows our revenues and earnings and increases stockholder value.
We expect to continue to acquire companies, products, services and technologies in furtherance of our corporate strategy. Note 2 of Notes to
Consolidated Financial Statements included elsewhere in this Annual Report provides additional information related to our pending and recent
acquisitions.
We believe we can fund our pending and future acquisitions with our internally available cash, cash equivalents and marketable securities, cash
generated from operations, additional borrowings or from the issuance of additional securities. We estimate the financial impact of any potential
acquisition with regard to earnings, operating margin, cash flow and return on invested capital targets before deciding to move forward with an
acquisition.
Critical Accounting Policies and 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 United States Securities and Exchange Commission (SEC). GAAP, as set forth within the ASC,
requires 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 financial statements will be affected. The accounting policies that reflect our more significant
estimates, judgments and assumptions and which we believe are the most critical to aid in fully understanding and evaluating our reported
financial results include the following:
40
•
Revenue Recognition
•
Business Combinations
•
Goodwill and Intangible Assets
—
Impairment Assessments
•
Accounting for Income Taxes
•
Legal and Other Contingencies
•
Stock
-
Based Compensation