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Table of Contents
ORACLE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
May 31, 2015
Lease Commitments
We lease certain facilities, furniture and equipment under operating leases. As of May 31, 2015, future minimum annual operating lease
payments and future minimum payments to be received from non-cancelable subleases were as follows:
Lease commitments included future minimum rent payments for facilities that we have vacated pursuant to our restructuring and merger
integration activities, as discussed in Note 9. We have approximately $61 million in facility obligations, net of estimated sublease income and
other costs, in accrued restructuring for these locations in our consolidated balance sheet at May 31, 2015.
Rent expense was $290 million, $278 million and $313 million for fiscal 2015, 2014 and 2013, respectively, net of sublease income of
approximately $45 million, $55 million and $69 million, respectively. Certain lease agreements contain renewal options providing for extensions
of the lease terms.
Unconditional Obligations
In the ordinary course of business, we enter into certain unconditional purchase obligations with our suppliers, which are agreements that are
enforceable, legally binding and specify terms, including: fixed or minimum quantities to be purchased; fixed, minimum or variable price
provisions; and the approximate timing of the payment. We utilize several external manufacturers to manufacture sub-assemblies for our
hardware products and to perform final assembly and testing of finished hardware products. We also obtain individual components for our
hardware systems products from a variety of individual suppliers based on projected demand information. Such purchase commitments are based
on our forecasted component and manufacturing requirements and typically provide for fulfillment within agreed upon lead-times and/or
commercially standard lead-times for the particular part or product and have been included in the amounts below. Routine arrangements for
other materials and goods that are not related to our external manufacturers and certain other suppliers and that are entered into in the ordinary
course of business are not included in the amounts below as they are generally entered into in order to secure pricing or other negotiated terms
and are difficult to quantify in a meaningful way.
121
Location and Amount of Gain (Loss)
Recognized in Income on Derivative
Location and Amount of (Loss) Gain on Hedged Item
Recognized in Income Attributable to Risk Being Hedged
Year Ended May 31,
Year Ended May 31,
(in millions)
2015
2014
2015
2014
Interest rate swap agreements designated as fair value hedges
Interest expense
$
51
$
(18
)
Interest expense
$
(51
)
$
18
12.
COMMITMENTS AND CERTAIN CONTINGENCIES
(in millions)
Fiscal 2016
$
330
Fiscal 2017
270
Fiscal 2018
209
Fiscal 2019
156
Fiscal 2020
107
Thereafter
175
Future minimum operating lease payments
1,247
Less: minimum payments to be received from non
-
cancelable subleases
(71
)
Total future minimum operating lease payments, net
$
1,176