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RESTRUCTURING ACTIVITIES

12 Months Ended

May 31, 2013

9. RESTRUCTURING ACTIVITIES

Fiscal 2013 Oracle Restructuring Plan

During the first quarter of fiscal 2013, our management approved, committed to and initiated plans to restructure and further improve efficiencies in our operations (the 2013 Restructuring Plan). Our management subsequently amended the 2013 Restructuring Plan in the third quarter of fiscal 2013 to reflect additional actions that we expect to take. The total estimated restructuring costs associated with the 2013 Restructuring Plan are $420 million and will be recorded to the restructuring expense line item within our consolidated statements of operations as they are incurred. We recorded $325 million of restructuring expenses in connection with the 2013 Restructuring Plan in fiscal 2013 and we expect to incur the majority of the estimated remaining $95 million through fiscal 2014. Any changes to the estimates of executing the 2013 Restructuring Plan will be reflected in our future results of operations.

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. Restructuring costs associated with the Sun Restructuring Plan were recorded to the restructuring expense line item within our consolidated statements of operations as they were recognized. We recorded $215 million and $439 million of net restructuring expenses in connection with the Sun Restructuring Plan in fiscal 2012 and 2011, respectively. The execution of the Sun Restructuring Plan was substantially complete as of the end of fiscal 2012.

Summary of All Plans

Fiscal 2013 Activity

			Year Ended May 31, 2013
(in millions)	Accrued May 31, 2012(2)		Initial Costs(3)		Adj. to Cost(4)		Cash Payments		Others(5)		Accrued May 31, 2013(2)		Total Costs Accrued to Date		Total Expected Program Costs
Fiscal 2013 Oracle Restructuring Plan(1)
New software licenses and cloud software subscriptions	$	—	$	85	$	(8)	$	(60)	$	(1)	$	16	$	77	$	86
Software license updates and product support		—		13		(6)		(11)		5		1		7		17
Hardware systems business		—		99		(5)		(68)		(2)		24		94		133
Services		—		72		(5)		(50)		1		18		67		94
General and administrative and other		—		81		(1)		(52)		(16)		12		80		90
Total Fiscal 2013 Oracle Restructuring Plan	$	—	$	350	$	(25)	$	(241)	$	(13)	$	71	$	325	$	420
Total other restructuring plans(6)	$	337	$	53	$	(26)	$	(185)	$	—	$	179
Total restructuring plans	$	337	$	403	$	(51)	$	(426)	$	(13)	$	250

Fiscal 2012 Activity

			Year Ended May 31, 2012
(in millions)	Accrued May 31, 2011		Initial Costs(3)		Adj. to Cost(4)		Cash Payments		Others(5)		Accrued May 31, 2012(2)
Sun Restructuring Plan(1)
New software licenses and cloud software subscriptions	$	14	$	46	$	(8)	$	(41)	$	(2)	$	9
Software license updates and product support		19		31		(2)		(35)		(1)		12
Hardware systems business		10		34		1		(33)		—		12
Services		9		32		(2)		(25)		(2)		12
General and administrative and other		100		92		(9)		(129)		(1)		53
Total Sun Restructuring	$	152	$	235	$	(20)	$	(263)	$	(6)	$	98
Total other restructuring plans(6)	$	297	$	65	$	15	$	(122)	$	(16)	$	239
Total restructuring plans	$	449	$	300	$	(5)	$	(385)	$	(22)	$	337

Fiscal 2011 Activity

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

__________

(1)	Restructuring costs recorded for individual line items presented related to employee severance costs except for general and administrative and other, which also included $46 million, $23 million and $97 million recorded during fiscal 2013, 2012 and 2011, respectively, for facilities related restructuring, contract termination and other costs.
(2)	The balances at May 31, 2013 and 2012 included $160 million and $178 million, respectively, recorded in other current liabilities, and $90 million and $159 million, respectively, recorded in other non-current liabilities.
(3)	Costs recorded for the respective restructuring plans during the current period presented.
(4)	All plan adjustments were changes in estimates whereby increases and decreases in costs were generally recorded to operating expenses in the period of adjustments.
(5)	Represents foreign currency translation and certain other adjustments.
(6)	Other restructuring plans presented in the table above included 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 periodic impact to our consolidated statements of operations was not significant.

- Definition

The entire disclosure for restructuring and related activities. Description of restructuring activities such as exit and disposal activities, include facts and circumstances leading to the plan, the expected plan completion date, the major types of costs associated with the plan activities, total expected costs, the accrual balance at the end of the period, and the periods over which the remaining accrual will be settled.

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