RESTRUCTURING ACTIVITIES

12 Months Ended

May 31, 2011

Notes to Condensed Consolidated Financial Statements

RESTRUCTURING ACTIVITIES

9. RESTRUCTURING ACTIVITIES

Sun Restructuring Plan

During the third quarter of fiscal 2010, our management approved, committed to and initiated a plan to restructure our operations due to our acquisition of Sun (the Sun Restructuring Plan) in order to improve the cost efficiencies in our merged operations. Our management subsequently amended the Sun Restructuring Plan to reflect additional actions that we expect to take to improve the cost efficiencies in our merged operations. The total estimated restructuring costs associated with the Sun Restructuring Plan are $1.0 billion consisting primarily of employee severance expenses, abandoned facilities obligations and contract termination costs. The restructuring costs will be recorded to the restructuring expense line item within our consolidated statements of operations as they are recognized. We recorded $439 million and $342 million of restructuring expenses in connection with the Sun Restructuring Plan in fiscal 2011 and 2010, respectively, and we expect to incur the majority of the approximately $250 million of remaining expenses pursuant to the Sun Restructuring Plan through fiscal 2012. Any changes to the estimates of executing the Sun Restructuring Plan will be reflected in our future results of operations.

Other Restructuring Plans

Included in the other restructuring plans line in the fiscal 2011 and 2010 activity tables, and total restructuring plans line in the fiscal 2009 activity table, below are our Fiscal 2009 Oracle Restructuring Plan (the 2009 Plan) and certain restructuring plans that relate to companies that we acquired prior to our adoption of the revised business combinations accounting guidance contained in ASC 805 as of the beginning of fiscal 2010. The total estimated restructuring costs associated with the 2009 Plan are recorded to the restructuring expense line item within our consolidated statements of operations as they are recognized whereas costs related to acquired companies related restructuring plans were originally recognized as liabilities assumed in each of the respective business combinations and included in the allocation of the cost to acquire these companies and, accordingly, have resulted in an increase to goodwill. Our restructuring expenses may change as our management executes the approved plans. Future decreases to the estimates of executing these acquisition related restructuring plans will be recorded as an adjustment to goodwill indefinitely. Increases to the estimates of the acquisition related restructuring plans will be recorded to operating expenses.

Summary of All Plans

Fiscal 2011 Activity

(in millions)	Accrued May 31, 2010(2)		Year Ended May 31, 2011											Accrued May 31, 2011(2)		Total Costs Accrued to Date		Total Expected Program Costs
			Initial Costs(3)		Adj.  to Cost(4)			Cash Payments			Others(5)
Sun Restructuring Plan(1)
New software licenses	$	5	$	67	$	(4	)	$	(55	)	$	1		$	14	$	69	$	88
Software license updates and product support		3		52		(1	)		(34	)		(1	)		19		57		89
Hardware systems business		42		53		(3	)		(83	)		1			10		111		120
Services		8		49		(4	)		(43	)		(1	)		9		56		74
General and administrative and other		29		226		4			(154	)		(5	)		100		488		660
Total Sun Restructuring	$	87	$	447	$	(8	)	$	(369	)	$	(5	)	$	152	$	781	$	1,031
Total other restructuring plans(6)	$	459	$	57	$	(17	)	$	(223	)	$	21		$	297
Total restructuring plans(7)	$	546	$	504	$	(25	)	$	(592	)	$	16		$	449

Fiscal 2010 Activity

(in millions)	Accrued May 31, 2009		Year Ended May 31, 2010
			Initial Costs(3)		Adj.  to Cost(4)			Cash Payments			Others(5)			Accrued May  31, 2010(2)
Sun Restructuring Plan(1)
New software licenses	$	—	$	6	$	—		$	(1	)	$	—		$	5
Software license updates and product support		—		6		—			(3	)		—			3
Hardware systems business		—		61		—			(19	)		—			42
Services		—		11		—			(3	)		—			8
General and administrative and other		—		258		—			(222	)		(7	)		29
Total Sun Restructuring	$	—	$	342	$	—		$	(248	)	$	(7	)	$	87
Total other restructuring plans(6)	$	389	$	292	$	(84	)	$	(397	)	$	259		$	459
Total restructuring plans(7)	$	389	$	634	$	(84	)	$	(645	)	$	252		$	546

Fiscal 2009 Activity

			Year Ended May 31, 2009
(in millions)	Accrued May 31, 2008		Initial Costs(3)		Adj.  to Cost(4)			Cash Payments			Others(5)			Accrued May 31, 2009
Total restructuring plans(7)	$	568	$	111	$	(12	)	$	(253	)	$	(25	)	$	389

(1)	Restructuring costs recorded for individual line items presented relate to employee severance costs except for general and administrative and other which included $97 million and $44 million recorded during fiscal 2011 and 2010, respectively, for facilities related restructuring and contract termination costs.
(2)	Accrued restructuring for our most significant restructuring plans at May 31, 2011 and May 31, 2010 was $449 million and $546 million, respectively. The balances at May 31, 2011 and 2010 include $244 million and $290 million recorded in other current liabilities, respectively, and $205 million and $256 million recorded in other non-current liabilities, respectively.

(3) Initial costs recorded for the respective restructuring plans.

(4) All plan adjustments are changes in estimates whereby all increases in costs are generally recorded to operating expenses in the period of adjustment with decreases in the costs of our Sun Restructuring Plan and Oracle-based plans (included in the “total other restructuring plans” line in the above table) being recorded to operating expenses and decreases in costs of our acquisition related plans (included in the “total other restructuring plans” line in the above table) adopted prior to fiscal 2010 recorded as adjustments to goodwill.

(5) Represents foreign currency translation and other adjustments. In addition, includes accrued restructuring plan liabilities of $275 million that were assumed from our acquisition of Sun during fiscal 2010.

(6) Other restructuring plans presented in the table above include condensed information for other Oracle-based plans and other plans associated with certain of our acquisitions whereby we continued to make cash outlays to settle obligations under these plans during the periods presented but for which the current impact to our consolidated statements of operations was not significant.

(7) Restructuring plans included in this footnote represent those plans that management has deemed the most significant.