Oracle 2013 Annual Report Download - page 57

Table of Contents
Fiscal 2013 Compared to Fiscal 2012: Excluding the effect of foreign currency rate fluctuations, our total revenues increased in fiscal 2013
due to an increase in our software and cloud business revenues. This constant currency increase was partially offset by reductions in our
hardware systems and services business’ revenues. On a constant currency basis, the Americas region contributed 77% and the Asia Pacific
region contributed 23% to our growth in total revenues during fiscal 2013.
Excluding the effect of foreign currency rate fluctuations, total operating expenses decreased in fiscal 2013 primarily due to a $387 million
acquisition related benefit and a $306 million benefit related to certain litigation (both as noted above), lower hardware systems products costs
associated with lower hardware systems products revenues, and certain other operating expense decreases in most of our other lines of business
primarily due to lower variable compensation expenses, lower external contractor expenses and lower amortization of intangible assets. In
constant currency, these total expense decreases during fiscal 2013 were partially offset by higher salary and benefit expenses due primarily to
additional sales and marketing and research and development headcount added during fiscal 2013.
Excluding the effect of foreign currency rate fluctuations, our total operating margin and our total operating margin as a percentage of total
revenues increased during fiscal 2013 due to the increase in our total revenues and the decrease in our total operating expenses.
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.
Our operating results included the following business combination accounting adjustments and expenses related to acquisitions, as well as
certain other significant expense and income items:
53
Year Ended May 31,
(in millions)
2014
2013
2012
Cloud software
-
as
-
a
-
service and platform
-
as
-
a
-
service deferred revenues
$
17
$
45
$
22
Software license updates and product support deferred revenues
3
14
48
Hardware systems support deferred revenues
11
14
30
Amortization of intangible assets
2,300
2,385
2,430
Acquisition related and other
41
(604
)
56
Restructuring
183
352
295
Stock
-
based compensation
795
722
626
Income tax effects
(1,091
)
(896
)
(967
)
$
2,259
$
2,032
$
2,540
In connection with our acquisitions, we have estimated the fair values of the cloud SaaS and PaaS, software support and hardware systems support obligations assumed. Due to our
application of business combination accounting rules, we did not recognize cloud SaaS and PaaS revenues related to contracts that would have otherwise been recorded by the acquired
businesses as independent entities in the amounts of $17 million, $45 million and $22 million in fiscal 2014, 2013 and 2012, respectively. We also did not recognize software license
updates and product support revenues related to software support contracts that would have otherwise been recorded by the acquired businesses as independent entities in the amounts of
$3 million, $14 million and $48 million in fiscal 2014, 2013 and 2012, respectively. In addition, we did not recognize hardware systems support revenues related to hardware systems
support contracts that would have otherwise been recorded by the acquired businesses as independent entities in the amounts of $11 million, $14 million and $30 million in fiscal 2014,
2013 and 2012, respectively.
Approximately $3 million of estimated cloud SaaS and PaaS revenues related to contracts assumed will not be recognized during fiscal 2015 that would have otherwise been recognized
as revenues by the acquired businesses as independent entities due to the application of the aforementioned business combination accounting rules. Approximately $2 million of estimated
hardware systems support revenues related to hardware systems support contracts assumed will not be recognized during fiscal 2015 that would have otherwise been recognized by
certain acquired companies as independent entities due to the application of the aforementioned business combination accounting rules. To the extent customers renew these contracts
with us, we expect to recognize revenues for the full contracts
’
values over the respective contracts
’
renewal periods.
(1)
(1)
(1)
(2)
(3)(5)
(4)
(5)
(6)
(1)