Oracle 2014 Annual Report Download - page 77

Table of Contents
Interest Rate Swap Agreements : In July 2014, we entered into certain interest rate swap agreements that have the economic effect of
modifying the fixed interest obligations associated with our 2019 Notes and 2021 Notes so that the interest payable on these notes effectively
became variable based on LIBOR. As of May 31, 2015, our 2019 Notes and 2021 Notes had effective interest rates of 0.76% and 0.91%,
respectively, after considering the effects of the aforementioned interest rate swap arrangements. We are accounting for these interest rate swap
agreements as fair value hedges pursuant to ASC 815, Derivatives and Hedging . Additional details regarding our Senior Notes and related
interest rate swap agreements are included in Notes 8 and 11 of Notes to Consolidated Financial Statements included elsewhere in this Annual
Report.
Cash Dividends
: In fiscal 2015, we declared and paid cash dividends of $0.51 per share that totaled $2.3 billion, an increase of $0.03 per share
over the cash dividends declared and paid in fiscal 2014. In June 2015, our Board of Directors declared a quarterly cash dividend of $0.15 per
share of outstanding common stock payable on July 29, 2015 to stockholders of record as of the close of business on July 8, 2015. Future
declarations of dividends and the establishment of future record and payment dates are subject to the final determination of our Board of
Directors.
Common Stock Repurchases : Our Board of Directors has approved a program for us to repurchase shares of our common stock. On
September 18, 2014, we announced that our Board of Directors approved an expansion of our stock repurchase program by an additional $13.0
billion. As of May 31, 2015, approximately $9.2 billion remained available for stock repurchases under the stock repurchase program. We
repurchased 193.7 million shares for $8.1 billion, 280.4 million shares for $9.8 billion, and 346.1 million shares for $11.0 billion in fiscal 2015,
2014 and 2013, respectively. Our stock repurchase authorization does not have an expiration date and the pace of our repurchase activity will
depend on factors such as our working capital needs, our cash requirements for acquisitions and dividend payments, our debt repayment
obligations (described further below), our stock price and economic and market conditions. Our stock repurchases may be effected from time to
time through open market purchases or pursuant to a Rule 10b5-
1 plan. Our stock repurchase program may be accelerated, suspended, delayed or
discontinued at any time.
Contractual Obligations: The contractual obligations presented in the table below represent our estimates of future payments under fixed
contractual obligations and commitments. Changes in our business needs, cancellation provisions, changing interest rates and other factors may
result in actual payments differing from these estimates. We cannot provide certainty regarding the timing and amounts of payments. We have
presented below a summary of the most significant assumptions used in preparing this information within the context of our consolidated
financial position, results of operations and cash flows. The following is a summary of certain of our contractual obligations as of May 31, 2015:
73
Year Ending May 31,
(Dollars in millions)
Total
2016
2017
2018
2019
2020
Thereafter
Principal payments on borrowings
$
42,466
$
2,000
$
—
$
6,000
$
2,000
$
4,500
$
27,966
Interest payments on borrowings
20,166
1,439
1,334
1,315
1,154
1,083
13,841
Operating leases
1,247
330
270
209
156
107
175
Purchase obligations and other
1,181
713
195
124
85
64
—
Total contractual obligations
$
65,060
$
4,482
$
1,799
$
7,648
$
3,395
$
5,754
$
41,982
Represents the principal balances and interest payments to be paid in connection with our senior notes outstanding as of May 31, 2015. Refer to Note 8 of Notes to Consolidated Financial
Statements included elsewhere in this Annual Report for additional information related to our notes payable.
We have entered into certain interest rate swap agreements related to our 2.375% senior notes due January 2019 (January 2019 Notes), our 2019 Notes and our 2021 Notes that have the
economic effect of modifying the fixed interest obligations associated with these senior notes so that the interest obligations effectively became variable pursuant to a LIBOR-based
index. Interest payments on the January 2019 Notes, 2019 Notes and 2021 Notes presented in the contractual obligations table above have been estimated using interest rates of 0.93%,
0.76% and 0.91%, respectively, which represented our effective interest rates for these senior notes as of May 31, 2015 after consideration of these fixed to variable interest rate swap
agreements, and are subject to change in future periods.
Our 2017 Notes, our floating rate senior notes due January 2019 and our 2019 Floating Rate Notes bore interest at a rate of 0.47%, 0.86% and 0.78%, respectively, as of May 31, 2015
and interest payments on these notes presented in the contractual obligations table above have been estimated using this rate.
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