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SEGMENT INFORMATION (Tables)
 6 Months Ended
Nov. 30, 2016
Segment Reporting [Abstract]  
Summary of Businesses and Operating Segments Results

 

 

 

Three Months Ended

November 30,

 

 

Six Months Ended

November 30,

 

(in millions)

 

2016

 

 

2015

 

 

2016

 

 

2015

 

Cloud software and on-premise software:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues(1)

 

$

2,259

 

 

$

2,164

 

 

$

4,104

 

 

$

3,767

 

Cloud software as a service and platform as a service expenses

 

 

350

 

 

 

270

 

 

 

658

 

 

 

537

 

Sales and distribution expenses

 

 

1,617

 

 

 

1,602

 

 

 

3,197

 

 

 

2,995

 

Margin(2)

 

$

292

 

 

$

292

 

 

$

249

 

 

$

235

 

Cloud infrastructure as a service:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

$

175

 

 

$

165

 

 

$

346

 

 

$

325

 

Cloud infrastructure as a service expenses

 

 

107

 

 

 

88

 

 

 

201

 

 

 

172

 

Sales and distribution expenses

 

 

16

 

 

 

15

 

 

 

32

 

 

 

37

 

Margin(2)

 

$

52

 

 

$

62

 

 

$

113

 

 

$

116

 

Software license updates and product support:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues(1)

 

$

4,778

 

 

$

4,683

 

 

$

9,571

 

 

$

9,380

 

Software license updates and product support expenses

 

 

225

 

 

 

275

 

 

 

481

 

 

 

546

 

Margin(2)

 

$

4,553

 

 

$

4,408

 

 

$

9,090

 

 

$

8,834

 

Total cloud and on-premise software business:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues(1)

 

$

7,212

 

 

$

7,012

 

 

$

14,021

 

 

$

13,472

 

Expenses

 

 

2,315

 

 

 

2,250

 

 

 

4,569

 

 

 

4,287

 

Margin(2)

 

$

4,897

 

 

$

4,762

 

 

$

9,452

 

 

$

9,185

 

Hardware products:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

$

497

 

 

$

573

 

 

$

959

 

 

$

1,142

 

Hardware products expenses

 

 

240

 

 

 

323

 

 

 

480

 

 

 

625

 

Sales and distribution expenses

 

 

202

 

 

 

218

 

 

 

404

 

 

 

424

 

Margin(2)

 

$

55

 

 

$

32

 

 

$

75

 

 

$

93

 

Hardware support:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues(1)

 

$

517

 

 

$

550

 

 

$

1,051

 

 

$

1,109

 

Hardware support expenses

 

 

138

 

 

 

167

 

 

 

279

 

 

 

339

 

Margin(2)

 

$

379

 

 

$

383

 

 

$

772

 

 

$

770

 

Total hardware business:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues(1)

 

$

1,014

 

 

$

1,123

 

 

$

2,010

 

 

$

2,251

 

Expenses

 

 

580

 

 

 

708

 

 

 

1,163

 

 

 

1,388

 

Margin(2)

 

$

434

 

 

$

415

 

 

$

847

 

 

$

863

 

Total services business:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

$

844

 

 

$

861

 

 

$

1,652

 

 

$

1,724

 

Services expenses

 

 

667

 

 

 

665

 

 

 

1,333

 

 

 

1,341

 

Margin(2)

 

$

177

 

 

$

196

 

 

$

319

 

 

$

383

 

Totals:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues(1)

 

$

9,070

 

 

$

8,996

 

 

$

17,683

 

 

$

17,447

 

Expenses

 

 

3,562

 

 

 

3,623

 

 

 

7,065

 

 

 

7,016

 

Margin(2)

 

$

5,508

 

 

$

5,373

 

 

$

10,618

 

 

$

10,431

 

 

(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, respectively, 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. Certain fiscal 2016 balances have been reclassified to conform to the current year presentation.  Such reclassifications did not affect consolidated revenues or operating income.
Reconciliation of Total Operating Segment Revenues to Total Revenues

 

 

 

Three Months Ended

November 30,

 

 

Six Months Ended

November 30,

 

(in millions)

 

2016

 

 

2015

 

 

2016

 

 

2015

 

Total revenues for operating segments

 

$

9,070

 

 

$

8,996

 

 

$

17,683

 

 

$

17,447

 

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

 

 

(34

)

 

 

(3

)

 

 

(52

)

 

 

(4

)

Software license updates and product support revenues(1)

 

 

(1

)

 

 

—

 

 

 

(1

)

 

 

(1

)

Hardware support revenues(1)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(1

)

Total revenues

 

$

9,035

 

 

$

8,993

 

 

$

17,630

 

 

$

17,441

 

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

Total margin for operating segments

 

$

5,508

 

 

$

5,373

 

 

$

10,618

 

 

$

10,431

 

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

 

 

(34

)

 

 

(3

)

 

 

(52

)

 

 

(4

)

Software license updates and product support revenues(1)

 

 

(1

)

 

 

—

 

 

 

(1

)

 

 

(1

)

Hardware support revenues(1)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(1

)

Research and development

 

 

(1,273

)

 

 

(1,249

)

 

 

(2,550

)

 

 

(2,439

)

Corporate, general and administrative and information technology expenses

 

 

(419

)

 

 

(401

)

 

 

(850

)

 

 

(795

)

Amortization of intangible assets

 

 

(302

)

 

 

(423

)

 

 

(613

)

 

 

(875

)

Acquisition related and other

 

 

(40

)

 

 

7

 

 

 

(54

)

 

 

(25

)

Restructuring

 

 

(86

)

 

 

(95

)

 

 

(185

)

 

 

(178

)

Stock-based compensation

 

 

(316

)

 

 

(254

)

 

 

(635

)

 

 

(504

)

Interest expense

 

 

(451

)

 

 

(371

)

 

 

(867

)

 

 

(745

)

Non-operating income, net

 

 

99

 

 

 

84

 

 

 

247

 

 

 

114

 

Income before provision for income taxes

 

$

2,685

 

 

$

2,668

 

 

$

5,058

 

 

$

4,978

 

 

(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.