Oracle 2014 Annual Report Download - page 135

Table of Contents
ORACLE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
May 31, 2015
Internationally, tax authorities for numerous non-U.S. jurisdictions are also examining returns affecting our unrecognized tax benefits. We
believe it was reasonably possible that, as of May 31, 2015, the gross unrecognized tax benefits, could decrease (whether by payment, release, or
a combination of both) by as much as $172 million ($86 million net of offsetting tax benefits) in the next 12 months, related primarily to transfer
pricing. Other issues are related to years with expiring statutes of limitation. With some exceptions, we are generally no longer subject to tax
examinations in non-U.S. jurisdictions for years prior to fiscal 1997.
We believe that we have adequately provided under U.S. GAAP for outcomes related to our tax audits. However, there can be no assurances as
to the possible outcomes or any attendant financial statement effect thereof.
ASC 280, Segment Reporting , establishes standards for reporting information about operating segments. Operating segments are defined as
components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision
maker, or decision making group, in deciding how to allocate resources and in assessing performance. Our chief operating decision makers are
our Chief Executive Officers. We are organized geographically and by line of business. While our Chief Executive Officers evaluate results in a
number of different ways, the line of business management structure is the primary basis for which the allocation of resources and financial
results are assessed.
We have three businesses—software and cloud, hardware systems and services—which are further divided into certain operating segments. Our
software and cloud business is comprised of three operating segments: (1) new software licenses and cloud software subscriptions, which
includes our cloud SaaS and PaaS offerings, (2) cloud infrastructure as a service and (3) software license updates and product support. Our
hardware systems business is comprised of two operating segments: (1) hardware systems products and (2) hardware systems support. All other
operating segments are combined under our services business.
Our new software licenses and cloud software subscriptions line of business markets, sells and delivers our application and platform
technologies, including our SaaS and PaaS offerings (our SaaS and PaaS offerings are collectively referred to as cloud software subscriptions),
which provide customers a choice of software applications and platforms that are delivered via a cloud-based IT environment that we host,
manage and support, and the licensing of our software products including Oracle Applications, Oracle Database, Oracle Fusion Middleware and
Java, among others.
The cloud infrastructure as a service line of business provides comprehensive software and hardware management and maintenance services for
customer IT infrastructure for a fee for a stated term that is hosted at our Oracle data center facilities, select partner data centers or physically on-
premises at customer facilities; deployment and management offerings for our software and hardware and related IT infrastructure including
virtual machine instances that are subscription-based and designed for computing and reliable and secure object storage; and certain of our
Oracle Engineered Systems and related support offerings that are deployed in our customers’ data centers for a monthly fee.
The software license updates and product support line of business provides customers with rights to software product upgrades and maintenance
releases, patches released, internet access to technical content, as well as internet and telephone access to technical support personnel during the
support period.
The hardware systems products line of business provides Oracle Engineered Systems, servers, storage, networking, industry specific hardware,
virtualization software, operating systems including the Oracle Solaris Operating System and management software to support diverse IT
environments, including cloud computing environments.
Our hardware systems support line of business provides customers with software updates for the software components that are essential to the
functionality of our hardware products, such as Oracle Solaris and certain other software products, and can include product repairs, maintenance
services and technical support services.
131
16.
SEGMENT INFORMATION