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SEGMENT INFORMATION (Tables)
 3 Months Ended
Aug. 31, 2016
Segment Reporting [Abstract]  
Summary of Businesses and Operating Segments Results

 

 

 

Three Months Ended

August 31,

 

(in millions)

 

2016

 

 

2015

 

Cloud software and on-premise software:

 

 

 

 

 

 

 

 

Revenues(1)

 

$

1,845

 

 

$

1,603

 

Cloud software as a service and platform as a service expenses

 

 

308

 

 

 

268

 

Sales and distribution expenses

 

 

1,580

 

 

 

1,395

 

Margin(2)

 

$

(43

)

 

$

(60

)

Cloud infrastructure as a service:

 

 

 

 

 

 

 

 

Revenues

 

$

171

 

 

$

160

 

Cloud infrastructure as a service expenses

 

 

93

 

 

 

85

 

Sales and distribution expenses

 

 

16

 

 

 

22

 

Margin(2)

 

$

62

 

 

$

53

 

Software license updates and product support:

 

 

 

 

 

 

 

 

Revenues(1)

 

$

4,793

 

 

$

4,697

 

Software license updates and product support expenses

 

 

257

 

 

 

271

 

Margin(2)

 

$

4,536

 

 

$

4,426

 

Total cloud and on-premise software business:

 

 

 

 

 

 

 

 

Revenues(1)

 

$

6,809

 

 

$

6,460

 

Expenses

 

 

2,254

 

 

 

2,041

 

Margin(2)

 

$

4,555

 

 

$

4,419

 

Hardware products:

 

 

 

 

 

 

 

 

Revenues

 

$

462

 

 

$

570

 

Hardware products expenses

 

 

240

 

 

 

301

 

Sales and distribution expenses

 

 

203

 

 

 

204

 

Margin(2)

 

$

19

 

 

$

65

 

Hardware support:

 

 

 

 

 

 

 

 

Revenues(1)

 

$

534

 

 

$

559

 

Hardware support expenses

 

 

141

 

 

 

172

 

Margin(2)

 

$

393

 

 

$

387

 

Total hardware business:

 

 

 

 

 

 

 

 

Revenues(1)

 

$

996

 

 

$

1,129

 

Expenses

 

 

584

 

 

 

677

 

Margin(2)

 

$

412

 

 

$

452

 

Total services business:

 

 

 

 

 

 

 

 

Revenues

 

$

808

 

 

$

862

 

Services expenses

 

 

665

 

 

 

678

 

Margin(2)

 

$

143

 

 

$

184

 

Totals:

 

 

 

 

 

 

 

 

Revenues(1)

 

$

8,613

 

 

$

8,451

 

Expenses

 

 

3,503

 

 

 

3,396

 

Margin(2)

 

$

5,110

 

 

$

5,055

 

 

(1)

Cloud software and on-premise software, software license updates and product support and hardware support revenues for management reporting included revenues related to cloud SaaS and PaaS, software support and hardware support contracts that would have otherwise been recorded by the acquired businesses as independent entities but were not recognized in our consolidated statements of operations for the periods presented. 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 as reported in our condensed consolidated statements of operations.

(2)

The margins reported reflect only the direct controllable costs of each line of business and do not include allocations of product development, corporate, general and administrative and IT expenses. Additionally, the margins reported do not reflect amortization of intangible assets, acquisition related and other expenses, restructuring expenses, stock-based compensation, interest expense or certain other non-operating income, net.
Reconciliation of Total Operating Segment Revenues to Total Revenues

 

 

 

Three Months Ended

August 31,

 

(in millions)

 

2016

 

 

2015

 

Total revenues for operating segments

 

$

8,613

 

 

$

8,451

 

Cloud software as a service and platform as a service revenues(1)

 

 

(17

)

 

 

(1

)

Software license updates and product support revenues(1)

 

 

(1

)

 

 

(1

)

Hardware support revenues(1)

 

 

—

 

 

 

(1

)

Total revenues

 

$

8,595

 

 

$

8,448

 

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

Total margin for operating segments

 

$

5,110

 

 

$

5,055

 

Cloud software as a service and platform as a service revenues(1)

 

 

(17

)

 

 

(1

)

Software license updates and product support revenues(1)

 

 

(1

)

 

 

(1

)

Hardware support revenues(1)

 

 

—

 

 

 

(1

)

Product development

 

 

(1,276

)

 

 

(1,188

)

Corporate, general and administrative and information technology expenses

 

 

(432

)

 

 

(394

)

Amortization of intangible assets

 

 

(311

)

 

 

(452

)

Acquisition related and other

 

 

(14

)

 

 

(31

)

Restructuring

 

 

(99

)

 

 

(83

)

Stock-based compensation

 

 

(319

)

 

 

(250

)

Interest expense

 

 

(416

)

 

 

(374

)

Non-operating income, net

 

 

148

 

 

 

30

 

Income before provision for income taxes

 

$

2,373

 

 

$

2,310

 

 

(1)

Cloud SaaS and PaaS revenues, software license updates and product support revenues and hardware support revenues for management reporting included revenues that would have otherwise been recorded by our acquired businesses as independent entities but were not recognized in our condensed consolidated statements of operations for the periods presented due to business combination accounting requirements.