XML 24 R29.htm IDEA: XBRL DOCUMENT v2.4.0.6
SEGMENT INFORMATION (Tables)
 6 Months Ended
Nov. 30, 2012
Segment Information [Abstract]  
Summary of Businesses and Operating Segments Results

 

 

Three Months Ended

November 30,

 

Six Months Ended

November 30,

(in millions)

 

 

2012

 

2011

 

2012

 

2011

New software licenses and cloud software subscriptions:

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues(1)

 

 

$

2,398

 

$

2,044

 

$

3,987

 

$

3,537

Sales and distribution expenses

 

 

 

1,263

 

 

1,174

 

 

2,341

 

 

2,318

Margin(2)

 

 

$

1,135

 

$

870

 

$

1,646

 

$

1,219

Software license updates and product support:

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues(1)

 

 

$

4,264

 

$

3,996

 

$

8,408

 

$

8,032

Software license updates and product support expenses

 

 

 

276

 

 

268

 

 

545

 

 

542

Margin(2)

 

 

$

3,988

 

$

3,728

 

$

7,863

 

$

7,490

Total software business:

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues(1)

 

 

$

6,662

 

$

6,040

 

$

12,395

 

$

11,569

Expenses

 

 

 

1,539

 

 

1,442

 

 

2,886

 

 

2,860

Margin(2)

 

 

$

5,123

 

$

4,598

 

$

9,509

 

$

8,709

Hardware systems products:

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

 

$

734

 

$

953

 

$

1,513

 

$

1,981

Hardware systems products expenses

 

 

 

366

 

 

468

 

 

750

 

 

941

Sales and distribution expenses

 

 

 

213

 

 

271

 

 

431

 

 

537

Margin(2)

 

 

$

155

 

$

214

 

$

332

 

$

503

Hardware systems support:

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues(1)

 

 

$

590

 

$

634

 

$

1,169

 

$

1,290

Hardware systems support expenses

 

 

 

222

 

 

248

 

 

435

 

 

520

Margin(2)

 

 

$

368

 

$

386

 

$

734

 

$

770

Total hardware systems business:

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues(1)

 

 

$

1,324

 

$

1,587

 

$

2,682

 

$

3,271

Expenses

 

 

 

801

 

 

987

 

 

1,616

 

 

1,998

Margin(2)

 

 

$

523

 

$

600

 

$

1,066

 

$

1,273

Total services business:

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues(1)

 

 

$

1,127

 

$

1,184

 

$

2,245

 

$

2,369

Services expenses

 

 

 

910

 

 

911

 

 

1,772

 

 

1,824

Margin(2)

 

 

$

217

 

$

273

 

$

473

 

$

545

Totals:

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues(1)

 

 

$

9,113

 

$

8,811

 

$

17,322

 

$

17,209

Expenses

 

 

 

3,250

 

 

3,340

 

 

6,274

 

 

6,682

Margin(2)

 

 

$

5,863

 

$

5,471

 

$

11,048

 

$

10,527

 

 

(1)

Operating segment revenues generally differ from the external reporting classifications due to certain software license products that are classified as service revenues for management reporting purposes. New software licenses and cloud software subscriptions revenues for management reporting included revenues related to cloud software subscriptions contracts that would have otherwise been recorded by the acquired businesses as independent entities but were not recognized in the accompanying condensed consolidated statements of operations in the amounts of $12 million and $31 million for the three and six months ended November 30, 2012, respectively. Software license updates and product support revenues for management reporting included revenues related to software support contracts that would have otherwise been recorded by the acquired businesses as independent entities but were not recognized in the accompanying condensed consolidated statements of operations in the amounts of $4 million and $10 million for the three months ended November 30, 2012 and 2011, respectively, and $8 million and $24 million for the six months ended November 30, 2012 and 2011, respectively. In addition, we did not recognize hardware systems support revenues related to hardware systems support contracts that would have otherwise been recorded by the acquired businesses as independent entities in the amounts of $3 million and $9 million for the three months ended November 30, 2012 and 2011, respectively, and $8 million and $19 million for the six months ended November 30, 2012 and 2011, respectively. See Note 8 for an explanation of these adjustments and the table below for a reconciliation of our total operating segment revenues to our total revenues.

 

 

(2)

The margins reported reflect only the direct controllable costs of each line of business and do not include allocations of product development, information technology, marketing and partner programs and corporate and general and administrative expenses. Additionally, the margins do not reflect amortization of intangible assets, acquisition related and other expenses, restructuring expenses, stock-based compensation, interest expense or certain other expenses, net.

 
Reconciliation of Total Operating Segment Revenues to Total Revenues

 

 

Three Months Ended

November 30,

 

Six Months Ended

November 30,

(in millions)

 

2012

 

2011

 

2012

 

2011

Total revenues for operating segments

 

$

9,113

 

$

     8,811

 

$

17,322

 

$

     17,209

New software licenses and cloud software subscriptions revenues(1)

 

 

(12)

 

 

—

 

 

(31)

 

 

—

Software license updates and product support revenues(1)

 

 

(4)

 

 

(10)

 

 

(8)

 

 

(24)

Hardware systems support revenues(1)

 

 

(3)

 

 

(9)

 

 

(8)

 

 

(19)

Total revenues

 

$

9,094

 

$

     8,792

 

$

17,275

 

$

     17,166

 
Reconciliation of Total Operating Segment Margin to Income before Provision for Income Taxes

Total margin for operating segments

 

$

5,863

 

$

     5,471

 

$

11,048

 

$

     10,527

New software licenses and cloud software subscriptions revenues(1)

 

 

(12)

 

 

—

 

 

(31)

 

 

—

Software license updates and product support revenues(1)

 

 

(4)

 

 

(10)

 

 

(8)

 

 

(24)

Hardware systems support revenues(1)

 

 

(3)

 

 

(9)

 

 

(8)

 

 

(19)

Product development and information technology expenses

 

 

(1,228)

 

 

(1,134)

 

 

(2,459)

 

 

(2,210)

Marketing and partner program expenses

 

 

(162)

 

 

(156)

 

 

(290)

 

 

(288)

Corporate and general and administrative expenses

 

 

(216)

 

 

(230)

 

 

(442)

 

 

(499)

Amortization of intangible assets

 

 

(584)

 

 

(592)

 

 

(1,203)

 

 

(1,184)

Acquisition related and other

 

 

121

 

 

(5)

 

 

380

 

 

(25)

Restructuring

 

 

(131)

 

 

(52)

 

 

(276)

 

 

(154)

Stock-based compensation

 

 

(188)

 

 

(150)

 

 

(365)

 

 

(295)

Interest expense

 

 

(195)

 

 

(192)

 

 

(382)

 

 

(384)

Other, net

 

 

19

 

 

        19

 

 

18

 

 

        (14)

Income before provision for income taxes

 

$

3,280

 

$

     2,960

 

$

5,982

 

$

     5,431

 

 

(1)

New software licenses and cloud software subscriptions revenues for management reporting included revenues related to cloud software subscriptions contracts that would have otherwise been recorded by the acquired businesses as independent entities but were not recognized in the accompanying condensed consolidated statements of operations in the amounts of $12 million and $31 million for the three and six months ended November 30, 2012, respectively. Software license updates and product support revenues for management reporting included revenues related to software support contracts that would have otherwise been recorded by the acquired businesses as independent entities but were not recognized in the accompanying condensed consolidated statements of operations in the amounts of $4 million and $10 million for the three months ended November 30, 2012 and 2011, respectively, and $8 million and $24 million for the six months ended November 30, 2012 and 2011, respectively. In addition, we did not recognize hardware systems support revenues related to hardware systems support contracts that would have otherwise been recorded by the acquired businesses as independent entities in the amounts of $3 million and $9 million for the three months ended November 30, 2012 and 2011, respectively, and $8 million and $19 million for the six months ended November 30, 2012 and 2011, respectively.