15.	SEGMENT INFORMATION

ASC 280, Segment Reporting, establishes standards for reporting information about operating segments. Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. Our chief operating decision makers (CODMs) are our Chief Executive Officers and Chief Technology Officer. We are organized by line of business and geographically. While our CODMs evaluate results in a number of different ways, the line of business management structure is the primary basis for which the allocation of resources and financial results are assessed. The footnote information below presents the financial information provided to our CODMs for their review and assists our CODMs with evaluating the company’s performance and allocating company resources.

We have three businesses—cloud and license, hardware and services—each of which are comprised of a single operating segment.

Our cloud and license business engages in the sale, marketing and delivery of our applications, platform and infrastructure technologies through various deployment models including license support offerings; Oracle Cloud Services offerings; and cloud license and on-premise license offerings. License support revenues are typically generated through the sale of license support contracts related to cloud license and on-premise licenses purchased by our customers at their option and are generally recognized as revenues ratably over the contractual term. Our Oracle Cloud Services offerings deliver certain of our applications, platform and infrastructure technologies on a subscription basis via cloud-based deployment models that we host, manage and support and revenues generally are recognized over the subscription period. Cloud license and on-premise license revenues represent fees earned from granting customers licenses, generally on a perpetual basis, to use our database and middleware and our applications software products within cloud and on-premise IT environments and are generally recognized as revenues when unrestricted access to the license is granted, provided all other revenue recognition criteria are met.

Our hardware business provides Oracle Engineered Systems, servers, storage, industry-specific hardware, operating systems, virtualization, management and other hardware-related software to support diverse IT environments. Our hardware business also includes hardware support, which provides customers with software updates for the software components that are essential to the functionality of the hardware products, such as Oracle Solaris and certain other software, and can include product repairs, maintenance services and technical support services.

Our services business provides services to customers and partners to help maximize the performance of their investments in Oracle applications, platform and infrastructure technologies.

We do not track our assets for each business. Consequently, it is not practical to show assets by operating segment.

The following table presents summary results for each of our three businesses for each of fiscal 2018, 2017 and 2016:

	Year Ended May 31,
(in millions)	2018		2017		2016
Cloud and license:
Revenues⁽¹⁾	$	32,491	$	30,389	$	28,997
Cloud services and license support expenses		3,447		2,885		2,545
Sales and marketing expenses		7,219		6,886		6,570
Margin⁽²⁾	$	21,825	$	20,618	$	19,882
Hardware:
Revenues⁽¹⁾	$	3,993	$	4,152	$	4,669
Hardware products and support expenses		1,551		1,623		2,031
Sales and marketing expenses		635		820		867
Margin⁽²⁾	$	1,807	$	1,709	$	1,771
Services:
Revenues	$	3,394	$	3,358	$	3,391
Services expenses		2,739		2,668		2,634
Margin⁽²⁾	$	655	$	690	$	757
Totals:
Revenues⁽¹⁾	$	39,878	$	37,899	$	37,057
Expenses		15,591		14,882		14,647
Margin⁽²⁾	$	24,287	$	23,017	$	22,410

⁽¹⁾

Cloud and license revenues and hardware revenues presented for management reporting included revenues related to cloud and license obligations and hardware obligations 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 due to business combination accounting requirements. See Note 9 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 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, general and administrative and certain other allocable expenses. Additionally, the margins reported above 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. Refer to the table below for a reconciliation of our total margin for operating segments to our income before provision for income taxes as reported in our consolidated statements of operations.

The following table reconciles total operating segment revenues to total revenues as well as total operating segment margin to income before provision for income taxes:

	Year Ended May 31,
(in millions)	2018			2017			2016
Total revenues for operating segments	$	39,878		$	37,899		$	37,057
Cloud and license revenues⁽¹⁾		(47	)		(171	)		(9	)
Hardware revenues⁽¹⁾		—			—			(1	)
Total revenues	$	39,831		$	37,728		$	37,047

Total margin for operating segments	$	24,287		$	23,017		$	22,410
Cloud and license revenues⁽¹⁾		(47	)		(171	)		(9	)
Hardware revenues⁽¹⁾		—			—			(1	)
Research and development		(6,091	)		(6,159	)		(5,787	)
General and administrative		(1,289	)		(1,176	)		(1,155	)
Amortization of intangible assets		(1,620	)		(1,451	)		(1,638	)
Acquisition related and other		(52	)		(103	)		(42	)
Restructuring		(588	)		(463	)		(458	)
Stock-based compensation for operating segments		(505	)		(415	)		(305	)
Expense allocations and other, net		(416	)		(369	)		(411	)
Interest expense		(2,025	)		(1,798	)		(1,467	)
Non-operating income, net		1,237			605			305
Income before provision for income taxes	$	12,891		$	11,517		$	11,442

⁽¹⁾

Cloud and license revenues and hardware revenues presented for management reporting included revenues related to cloud and license obligations and hardware obligations 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 due to business combination accounting requirements. See Note 9 for an explanation of these adjustments and this table for a reconciliation of our total operating segment revenues to our total revenues as reported in our consolidated statements of operations.

Geographic Information

Disclosed in the table below is geographic information for each country that comprised greater than three percent of our total revenues for any of fiscal 2018, 2017 or 2016.

	As of and for the Year Ended May 31,
	2018				2017				2016
(in millions)	Revenues		Long-Lived Assets⁽¹⁾		Revenues		Long-Lived Assets⁽¹⁾		Revenues		Long-Lived Assets⁽¹⁾
United States	$	19,077	$	4,976	$	17,770	$	4,680	$	17,264	$	3,646
United Kingdom		2,172		510		1,999		402		2,349		334
Japan		1,693		388		1,618		380		1,465		375
Germany		1,375		179		1,417		116		1,438		40
Canada		1,143		78		1,102		60		1,096		44
Other countries		14,371		1,223		13,822		1,090		13,435		989
Total	$	39,831	$	7,354	$	37,728	$	6,728	$	37,047	$	5,428

⁽¹⁾	Long-lived assets exclude goodwill, intangible assets, equity investments and deferred taxes, which are not allocated to specific geographic locations as it is impracticable to do so.