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Table of Contents
recent acquisitions. These hardware support revenues increases were partially offset by certain hardware support revenues decreases that were
generally caused by the reductions in sales volumes of certain of our legacy hardware systems product lines for which we offer hardware
systems support. In constant currency, hardware systems support revenues growth in the Americas and Asia Pacific region was partially offset
by a decline in revenues in the EMEA region.
As a result of our acquisitions, we recorded adjustments to reduce assumed hardware systems support obligations to their estimated fair values at
the acquisition dates. Due to our application of business combination accounting rules, hardware systems support revenues related to hardware
systems support contracts in the amounts of $11 million, $14 million and $30 million that would have been otherwise reported by our acquired
businesses as independent entities were not recognized in fiscal 2014, 2013 and 2012, respectively. To the extent these underlying hardware
systems support contracts are renewed, we will recognize the revenues for the full values of these contracts over the future support periods.
Total hardware systems support expenses decreased in fiscal 2014 primarily due to a reduction in employee related expenses attributable to
decreased headcount and reduced service delivery costs due to operational initiatives, partially offset by an increase in amortization of intangible
assets.
Excluding the effect of currency rate fluctuations, total hardware systems support margin and margin as a percentage of total revenues increased
in fiscal 2014 as our total revenues for this segment increased while our total expenses for this segment decreased.
Fiscal 2013 Compared to Fiscal 2012: Excluding the impact of currency rate fluctuations, hardware systems support revenues decreased in
fiscal 2013 primarily due to reductions in sales volumes of certain of our legacy hardware systems product lines for which we offer hardware
systems support. As described above, the amounts of hardware systems support revenues that we recognized in fiscal 2013 and fiscal 2012 were
affected by business combination accounting rules.
Excluding the effect of currency rate fluctuations, total hardware systems support expenses decreased in fiscal 2013 primarily due to a reduction
in employee related expenses attributable to decreased headcount, reduced service delivery costs due to operational initiatives, lower bad debt
expenses, and lower amortization of intangible assets.
Excluding the effect of currency rate fluctuations, total hardware systems support margin and margin as a percentage of total revenues increased
in fiscal 2013 due to the reduction in our total hardware systems support expenses.
Services Business
Our services business consists of consulting, advanced customer support services and education services. Consulting revenues are earned by
providing services to customers in business and IT strategy alignment, enterprise architecture planning and design, initial product
implementation and integration, and ongoing product enhancements and upgrades. Advanced customer support services are provided on-
premise
and remotely to our customers to enable increased performance and higher availability of their Oracle products and services. Education revenues
are earned by providing instructor-led, media-based, internet-based and custom training in the use of our software and hardware offerings. The
cost of providing our services consists primarily of personnel related expenses, technology infrastructure expenditures, facilities expenses and
external contractor expenses.
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