Cloud services and license support

9,193

9,104

Operating expenses:

^[1]

913

857

Hardware

^[1]

326

372

Services

^[1]

714

699

Sales and marketing

^[1]

2,039

1,989

Research and development

1,564

1,572

General and administrative

321

319

Amortization of intangible assets

434

411

Acquisition related and other

14

12

Restructuring

90

124

Total operating expenses

6,415

6,355

Operating income

2,778

2,749

Interest expense

(529)

(469)

Non-operating income, net

291

220

Income before provision for income taxes

2,540

2,500

Provision for income taxes

275

356

Net income

$ 2,265

$ 2,144

Earnings per share:

Basic

$ 0.58

$ 0.52

Diluted

$ 0.57

$ 0.50

Weighted average common shares outstanding:

Basic

3,904

4,156

Diluted

3,999

4,284

Dividends declared per common share

$ 0.19

[1]	Exclusive of amortization of intangible assets, which is shown separately.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions	3 Months Ended
	Aug. 31, 2018	Aug. 31, 2017
Net income	$ 2,265	$ 2,144
Portion Attributable to Parent [Member]
Net income	2,265	2,144
Other comprehensive (loss) income, net of tax:
Net foreign currency translation (losses) gains	(61)	50
Net unrealized gains on defined benefit plans	6	7
Net unrealized gains on marketable securities	4	64
Net unrealized losses on cash flow hedges	(26)	(22)
Total other comprehensive (loss) income, net	(77)	99
Comprehensive income	$ 2,188	$ 2,243

Organization Consolidation And Presentation Of Financial Statements [Abstract]

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References + Details

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions	3 Months Ended
	Aug. 31, 2018	Aug. 31, 2017
Cash flows from operating activities:
Net income	$ 2,265	$ 2,144
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	286	285
Amortization of intangible assets	434	411
Deferred income taxes	(112)	141
Stock-based compensation	436	403
Other, net	52	48
Changes in operating assets and liabilities, net of effects from acquisitions:
Decrease in trade receivables, net	1,390	1,804
Decrease in prepaid expenses and other assets	309	246
Decrease in accounts payable and other liabilities	(561)	(770)
Increase in income taxes payable	10	32
Increase in deferred revenues	2,213	1,822
Net cash provided by operating activities	6,722	6,566
Cash flows from investing activities:
Purchases of marketable securities and other investments	(739)	(7,671)
Proceeds from maturities and sales of marketable securities and other investments	4,704	6,326
Acquisitions, net of cash acquired	(50)	0
Capital expenditures	(383)	(473)
Net cash provided by (used for) investing activities	3,532	(1,818)
Cash flows from financing activities:
Payments for repurchases of common stock	(9,967)	(502)
Proceeds from issuances of common stock	291	1,014
Shares repurchased for tax withholdings upon vesting of restricted stock-based awards	(379)	(331)
Payments of dividends to stockholders	(742)	(788)
Repayments of borrowings	(2,500)	(4,800)
Distributions to noncontrolling interests	(36)	(34)
Net cash used for financing activities	(13,333)	(5,441)
Effect of exchange rate changes on cash and cash equivalents	(86)	230
Net decrease in cash and cash equivalents	(3,165)	(463)
Cash and cash equivalents at beginning of period	21,620	21,784
Cash and cash equivalents at end of period	18,455	21,321
Non-cash investing and financing transactions:
Fair values of restricted stock-based awards and stock options assumed in connection with acquisitions	8	0
Change in unsettled repurchases of common stock	33	(2)
Change in unsettled investment purchases	$ 0	$ (138)

BASIS OF PRESENTATION AND RECENT ACCOUNTING PRONOUNCEMENTS

3 Months Ended

Aug. 31, 2018

BASIS OF PRESENTATION AND RECENT ACCOUNTING PRONOUNCEMENTS

1.	BASIS OF PRESENTATION AND RECENT ACCOUNTING PRONOUNCEMENTS

Basis of Presentation

We have prepared the condensed consolidated financial statements included herein pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (SEC). Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (GAAP) have been condensed or omitted pursuant to such rules and regulations. However, we believe that the disclosures herein are adequate to ensure the information presented is not misleading. These unaudited condensed consolidated financial statements should be read in conjunction with the audited financial statements and the notes thereto included in our Annual Report on Form 10-K for the fiscal year ended May 31, 2018.

We believe that all necessary adjustments, which consisted only of normal recurring items, have been included in the accompanying financial statements to present fairly the results of the interim periods. The results of operations for the interim periods presented are not necessarily indicative of the operating results to be expected for any subsequent interim period or for our fiscal year ending May 31, 2019.

During the first quarter of fiscal 2019, we adopted the following Accounting Standards Updates:

•

Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers: Topic 606 and subsequent amendments to the initial guidance: ASU 2015-14, ASU 2016-08, ASU 2016-10, ASU 2016-12, ASU 2016-20, ASU 2017-10, ASU 2017-13 and ASU 2017-14 (collectively, Topic 606), utilizing the full retrospective method of transition whereby the results and related disclosures for the comparative fiscal 2018 period presented in this Form 10-Q were recast to be presented as if Topic 606 had been in effect during such fiscal 2018 period. Refer to the Revenue Recognition and Deferred Sales Commission sections below for accounting policy updates upon our adoption of Topic 606.

•

ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities (ASU 2017-12), which amends and simplifies existing guidance in order to allow companies to more accurately present the economic effects of risk management activities in the financial statements. We early adopted this new standard on June 1, 2018 using the modified retrospective method, which requires us to account for ASU 2017-12 as of the date of adoption with any retrospective adjustments applicable to prior periods included as a cumulative-effect adjustment to accumulated other comprehensive loss and retained earnings. The adoption of ASU 2017-12 did not have a material impact on our condensed consolidated financial statements. As a result of the adoption of ASU 2017-12, we have elected to modify certain of our hedge documentation to exclude the fair value of certain components of the related hedging instrument in our assessment of hedge effectiveness. Refer to Note 7 for additional explanations of the impact of adoption.

•

ASU 2017-07, Compensation—Retirement Benefits (Topic 715): Improving the presentation of Net Periodic Pension Costs and Net Periodic Postretirement Benefit Costs (ASU 2017-07), which provides guidance on the capitalization, presentation and disclosure of net benefit costs related to postretirement benefit plans. We adopted ASU 2017-07 on a full retrospective basis, which resulted in the retrospective reclassification of $13 million of non-service net periodic pension cost for the three months ended August 31, 2017 from line items within operating expenses into non-operating income, net.

•

ASU 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory (ASU 2016-16), which requires entities to recognize the income tax consequences of an intra-entity transfer of an asset, other than inventory, when the transfer occurs. We adopted ASU 2016-16 on a modified retrospective basis through a cumulative-effect adjustment that resulted in a $110 million decrease in prepaid assets with the corresponding offset to retained earnings.

•

ASU 2016-01, Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities (ASU 2016-01), which addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. Upon adoption of ASU 2016-01, we have elected to measure the investments we hold in certain non-marketable equity securities in which we do not have a controlling interest or significant influence that have no readily determinable fair values at cost, less impairment, adjusted for observable price changes from orderly transactions for identical or similar investments of the same issuer. We adopted the guidance prospectively effective June 1, 2018, and there was no impact to our condensed consolidated financial statements.

The impacts of adopting Topic 606 and ASU 2017-07 for select historical condensed consolidated statement of operations line items were as follows:

	Three Months Ended August 31, 2017
(in millions, except per share data)	As Previously Reported		Adjustments			As Adjusted
Total revenues	$	9,187	$	(83	)	$	9,104
Total operating expenses	$	6,366	$	(11	)	$	6,355
Non-operating income, net	$	233	$	(13	)	$	220
Provision for income taxes	$	375	$	(19	)	$	356
Net income	$	2,210	$	(66	)	$	2,144
Basic earnings per share	$	0.53	$	(0.01	)	$	0.52
Diluted earnings per share	$	0.52	$	(0.02	)	$	0.50

The impact of adopting Topic 606 for select historical condensed consolidated balance sheet line items was as follows:

	As of May 31, 2018
(in millions, except per share data)	As Previously Reported		Adjustments			As Adjusted
Trade receivables, net of allowances for doubtful accounts	$	5,279	$	(143	)	$	5,136
Prepaid expenses and other current assets	$	3,424	$	338		$	3,762
Deferred tax assets	$	1,491	$	(96	)	$	1,395
Other non-current assets	$	3,487	$	488		$	3,975
Deferred revenues	$	8,429	$	(88	)	$	8,341
Income taxes payable, non-current	$	13,422	$	7		$	13,429
Other non-current liabilities	$	2,295	$	2		$	2,297
Total equity	$	46,224	$	649		$	46,873

There have been no other significant changes in our reported financial position or results of operations and cash flows as a result of the adoption of new accounting pronouncements. Except for the updates to our revenue recognition and deferred sales commission policies noted below, there have been no changes to our significant accounting policies that were disclosed in our Annual Report on Form 10-K for the fiscal year ended May 31, 2018 that have had a significant impact on our condensed consolidated financial statements or notes thereto as of and for the three months ended August 31, 2018.

Impacts of the U.S. Tax Cuts and Jobs Act of 2017

The comparability of our operating results in the first quarter of fiscal 2019 compared to the corresponding prior year period was impacted by the U.S. Tax Cuts and Jobs Act of 2017 (the Tax Act), which was effective for us starting in our third quarter of fiscal 2018. Information regarding our adoption and prospective impacts of the Tax Act on our tax and liquidity profile is included in our Annual Report on Form 10-K for our fiscal year ended May 31, 2018. The net expense related to the enactment of the Tax Act has been accounted for during fiscal 2019 based on provisional estimates pursuant to SEC Staff Accounting Bulletin No. 118 (SAB 118). Subsequent adjustments, if any, related to our enactment of the Tax Act will be accounted for in the period such adjustments are identified. The provisional estimates incorporate, among other factors, assumptions made based on interpretations of the Tax Act and existing tax laws and a range of historical financial and tax-specific facts and information, including among other items, the amount of cash and other specified assets and liabilities of the company and its foreign subsidiaries on relevant dates and estimates of deferred tax balances pending finalization of those balances.

Additionally, we are continuing to evaluate the accounting policy election required with regard to the Tax Act’s Global Intangible Low-Taxed Income (GILTI) provision. The Financial Accounting Standards Board (FASB) allows companies to adopt a policy election to account for GILTI under one of two methods: (i) account for GILTI as a component of tax expense in the period in which a company is subject to the rules (the period cost method), or (ii) account for GILTI in a company’s measurement of deferred taxes (the deferred method). As of August 31, 2018, we have accounted for GILTI in accordance with the period cost method. We have not finalized our policy election, and expect to do so after completion of our analysis of the GILTI provisions within the measurement period in accordance with SAB 118.

Revenue Recognition

Our sources of revenues include:

•

cloud and license revenues, which include the sale of: cloud services and license support; and cloud licenses and on-premise licenses, which represent licenses purchased by customers for use in both cloud and on-premise IT environments;

•

hardware revenues, which include the sale of hardware products including Oracle Engineered Systems, servers, and storage products, and industry-specific hardware; and hardware support revenues; and

•

services revenues, which are earned from providing cloud-, license- and hardware-related services including consulting, advanced customer support and education services.

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. License support contracts provide customers with rights to unspecified software product upgrades, maintenance releases and patches released during the term of the support period and include internet access to technical content, as well as internet and telephone access to technical support personnel. License support contracts are generally priced as a percentage of the net cloud license and on-premise license fees. Substantially all of our customers renew their license support contracts annually.

Cloud services revenues include revenues from Oracle Cloud Software-as-a-Service (SaaS), Platform-as-a-Service (PaaS) and Infrastructure-as-a-Service (IaaS) offerings (collectively, Oracle Cloud Services), which deliver applications, platform and infrastructure technologies, respectively, via cloud-based deployment models that we develop functionality for, provide unspecified updates and enhancements for, host, manage and support and that customers access by entering into a subscription agreement with us for a stated period. Our IaaS offerings also include Oracle Managed Cloud Services, which are designed to provide comprehensive software and hardware management, maintenance and security services for customer cloud-based, on-premise or other IT infrastructure for a fee for a stated term.

Cloud license and on-premise license revenues primarily represent amounts earned from granting customers licenses to use our database, middleware, application and industry-specific software products which our customers use for cloud-based, on-premise and other IT environments. The vast majority of our cloud license and on-premise license arrangements include license support contracts, which are entered into at the customer’s option.

Revenues from the sale of hardware products represent amounts earned primarily from the sale of our Oracle Engineered Systems, computer servers, storage, and industry-specific hardware. Our hardware support offerings generally provide customers with software updates for the software components that are essential to the functionality of the hardware products purchased and can also include product repairs, maintenance services and technical support services. Hardware support contracts are generally priced as a percentage of the net hardware products fees.

Our consulting services are offered as standalone arrangements or as a part of arrangements to customers buying other products and services. Our advanced customer support services are offered as standalone arrangements or as a part of arrangements to customers buying other products and services. We offer these advanced customer support services to Oracle customers to enable increased performance and higher availability of their products and services. Education services include instructor-led, media-based and internet-based training in the use of our cloud, software and hardware products.

Topic 606 is a single standard for revenue recognition that applies to all of our cloud, software, hardware and services arrangements and generally requires revenues to be recognized upon the transfer of control of promised goods or services provided to our customers, reflecting the amount of consideration we expect to receive for those goods or services. Pursuant to Topic 606, revenues are recognized upon the application of the following steps:

•

identification of the contract, or contracts, with a customer;

•

identification of the performance obligations in the contract;

•

determination of the transaction price;

•

allocation of the transaction price to the performance obligations in the contract; and

•

recognition of revenues when, or as, the contractual performance obligations are satisfied.

The timing of revenue recognition may differ from the timing of invoicing our customers. We record an unbilled receivable which is included within accounts receivable on our condensed consolidated balance sheets, when revenue is recognized prior to invoicing. We record deferred revenues on our condensed consolidated balance sheets when revenues are recognized subsequent to cash collection for an invoice. Our standard payment terms are generally net 30 days but may vary. Invoices for cloud license and on-premise licenses and hardware products are generally issued when the license is made available for customer use or upon delivery to the customer of the hardware product. Invoices for license support and hardware support contracts are generally invoiced annually in advance. Cloud SaaS, PaaS and IaaS contracts are generally invoiced annually, quarterly or monthly in advance. Services are generally invoiced in advance or as the services are performed. Most contracts that contain a financing component are contracts financed through our financing division. The transaction price for a contract that is financed through our financing division is adjusted to reflect the time value of money and interest revenue is recorded as a component of non-operating income, net within our condensed consolidated statements of operations based on market rates in the country in which the transaction is being financed.

Our revenue arrangements generally include standard warranty or service level provisions that our arrangements will perform and operate in all material respects as defined in the respective agreements, the financial impacts of which have historically been and are expected to continue to be insignificant. Our arrangements generally do not include a general right of return relative to the delivered products or services. We recognize revenues net of any taxes collected from customers, which are subsequently remitted to governmental authorities.

Revenue Recognition for Cloud Services

Revenues from cloud services provided on a subscription basis are generally recognized ratably over the contractual period that the services are delivered, beginning on the date our service is made available to our customers. We recognize revenue ratably because the customer receives and consumes the benefits of the cloud services evenly throughout the contract period. Revenues from cloud services provided on a consumption basis, such as metered services, are generally recognized based on the utilization of the services by the customer.

Revenue Recognition for License Support and Hardware Support

Oracle’s primary performance obligations with respect to license support contracts and hardware support contracts are to provide customers with technical support as needed and unspecified software product upgrades, maintenance releases and patches during the term of the support period when they are available. Oracle is obligated to make the license and hardware support services available continuously throughout the contract period. Therefore, revenues for license support contracts and hardware support contracts are generally recognized ratably over the contractual periods that the support services are provided.

Revenue Recognition for Cloud License and On-Premise License

Revenues from distinct cloud license and on-premise license performance obligations are generally recognized upfront at the point in time when the software is made available to the customer to download and use. Revenues from usage-based royalty arrangements for distinct cloud licenses and on-premise licenses are recognized at the point in time when the software end user usage occurs. For usage-based royalty arrangements with a fixed minimum guarantee amount, the minimum amount is generally recognized upfront when the software is made available to the royalty customer.

Revenue Recognition for Hardware Products

The hardware product and related software, such as an operating system or firmware, are highly interdependent and interrelated and are accounted for as a combined performance obligation. The revenues for this combined performance obligation are generally recognized at the point in time that the hardware product is delivered to the customer and ownership is transferred to the customer.

Revenue Recognition for Services

Services revenues are generally recognized over time as the services are performed. Revenues for fixed price services are generally recognized over time applying input methods to estimate progress to completion. Revenues for consumption based services are generally recognized as the services are performed.

Allocation of the Transaction Price for Contracts that have Multiple Performance Obligations

Many of our contracts include multiple performance obligations. Judgment is required in determining whether each performance obligation is distinct. Oracle products and services generally do not require a significant amount of integration or interdependency. We allocate the transaction price for each contract to each performance obligation based on the relative standalone selling price (SSP) for each performance obligation within each contract.

We use judgment in determining the SSP for products and services. For substantially all performance obligations except cloud licenses and on-premise licenses, we are able to establish SSP based on the observable prices of products or services sold separately in comparable circumstances to similar customers. We typically establish a standalone selling price range for our products and services which is reassessed on a periodic basis or when facts and circumstances change. Our cloud licenses and on-premise licenses have not historically been sold on a standalone basis as substantially all customers elect to purchase license support contracts at the time of a cloud license and on-premise license purchase. License support contracts are generally priced as a percentage of the net fees paid by the customer to access the license. We are unable to establish SSP for our cloud licenses and on-premise licenses based on observable prices given the same products are sold for a broad range of amounts (that is, the selling price is highly variable) and a representative SSP is not discernible from past transactions or other observable evidence. As a result, the SSP for a cloud license and an on-premise license included in a contract with multiple performance obligations is determined by applying a residual approach whereby all performance obligations within a contract are first allocated a portion of the transaction price based upon their respective SSPs with any residual amount of transaction price allocated to cloud license and on-premise license revenues.

Deferred Sales Commissions

We defer sales commissions earned by our sales force that are considered to be incremental and recoverable costs of obtaining a cloud, license support and hardware support contract. Initial sales commissions for the majority of these aforementioned contracts are generally deferred and amortized on a straight-line basis over a period of benefit that we estimate to be four to five years. We determine the period of benefit by taking into consideration the historical and expected durations of our customer contracts, the expected useful lives of our technologies, and other factors. Sales commissions for renewal contracts relating to our cloud-based arrangements are generally deferred and then amortized on a straight-line basis over the related contractual renewal period, which is generally one to three years. Amortization of deferred sales commissions is included as a component of sales and marketing expenses in our condensed consolidated statements of operations. Total capitalized costs to obtain a contract and related balances were not material as of or during each of the three months ended August 31, 2018 and 2017.

Contract Balances and Remaining Performance Obligations from Contracts with Customers

Trade receivables, net of allowance for doubtful accounts, and deferred revenues are reported net of related uncollected deferred revenues in our condensed consolidated balance sheets as of August 31, 2018 and May 31, 2018. Trade receivables and contract liabilities (which represent deferred revenues) from contracts with customers were $3.7 billion and $11.0 billion, respectively, as of August 31, 2018 and $5.1 billion and $9.0 billion, respectively, as of May 31, 2018.

The amount of revenues recognized in our first quarter of fiscal 2019 that were included in the opening deferred revenues balance as of May 31, 2018 was approximately $3.5 billion. Revenues recognized from performance obligations satisfied in prior periods were immaterial during each of the three months ended August 31, 2018 and 2017. Impairment losses recognized on our receivables were immaterial in each of the three months ended August 31, 2018 and 2017.

Remaining performance obligations represent contracted revenues that had not yet been recognized, and include deferred revenues, invoices that have been issued to customers but were uncollected and have not been recognized as revenues, and amounts that will be invoiced and recognized as revenues in future periods. The volumes and amounts of customer contracts that we book and total revenues that we recognize are impacted by a variety of seasonal factors. In each fiscal year, the amounts and volumes of contracting activity and our total revenues are typically highest in our fourth fiscal quarter and lowest in our first fiscal quarter. These seasonal impacts influence how our remaining performance obligations change over time. As of August 31, 2018, our remaining performance obligations were $31.3 billion, approximately 64% of which we expect to recognize as revenues over the next 12 months and the remainder thereafter.

Refer to Note 10 for our discussion of revenue disaggregation.

Cash, Cash Equivalents and Restricted Cash

Restricted cash that was included within cash and cash equivalents as presented within our condensed consolidated balance sheets as of August 31, 2018 and May 31, 2018 and our condensed consolidated statements of cash flows for the three months ended August 31, 2018 and 2017 was nominal.

Acquisition Related and Other Expenses

Acquisition related and other expenses consist of personnel related costs and stock-based compensation for transitional and certain other employees, integration related professional services, certain business combination adjustments including certain adjustments after the measurement period has ended and certain other operating items, net.

	Three Months Ended August 31,
(in millions)	2018			2017
Transitional and other employee related costs	$	14		$	9
Stock-based compensation		—			1
Professional fees and other, net		2			3
Business combination adjustments, net		(2	)		(1	)
Total acquisition related and other expenses	$	14		$	12

Non-Operating Income, net

Non-operating income, net consists primarily of interest income, net foreign currency exchange losses, the noncontrolling interests in the net profits of our majority-owned subsidiaries (primarily Oracle Financial Services Software Limited and Oracle Corporation Japan) and net other income, including net realized gains and losses related to all of our investments, net unrealized gains and losses related to the small portion of our investment portfolio related to our deferred compensation plan, and non-service net periodic pension income (losses).

	Three Months Ended August 31,
(in millions)	2018			2017
Interest income	$	348		$	257
Foreign currency losses, net		(34	)		(4	)
Noncontrolling interests in income		(39	)		(46	)
Other income, net		16			13
Total non-operating income, net	$	291		$	220

Sales of Financing Receivables

We offer certain of our customers the option to acquire our software products, hardware products and services offerings through separate long-term payment contracts. We generally sell these contracts that we have financed for our customers on a non-recourse basis to financial institutions within 90 days of the contracts’ dates of execution. We record the transfers of amounts due from customers to financial institutions as sales of financing receivables because we are considered to have surrendered control of these financing receivables. Financing receivables sold to financial institutions were $822 million and $818 million for the three months ended August 31, 2018 and 2017, respectively.

Recent Accounting Pronouncements

Internal-use Software: In August 2018, the FASB issued ASU 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (ASU 2018-15), which clarifies the accounting for implementation costs in cloud computing arrangements. ASU 2018-15 is effective for us in the first quarter of fiscal 2020, and earlier adoption is permitted. We are currently evaluating the impact of our pending adoption of ASU 2018-15 on our consolidated financial statements.

Retirement Benefits: In August 2018, the FASB issued ASU 2018-14, Compensation—Retirement Benefits—Defined Benefit Plans—General (Topic 715-20): Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans (ASU 2018-14), which modifies the disclosure requirements for defined benefit pension plans and other postretirement plans. ASU 2018-14 is effective for us in the first quarter of fiscal 2021, and earlier adoption is permitted. We are currently evaluating the impact of our pending adoption of ASU 2018-14 on our consolidated financial statements.

Fair Value Measurement: In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement (ASU 2018-13), which modifies the disclosure requirements on fair value measurements. ASU 2018-13 is effective for us in the first quarter of fiscal 2020, and earlier adoption is permitted. We are currently evaluating the impact of our pending adoption of ASU 2018-13 on our consolidated financial statements.

Stock-based Compensation: In June 2018, the FASB issued ASU 2018-07 Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting (ASU 2018-07), which simplifies the accounting for share-based payments to nonemployees by aligning it with the accounting for share-based payments to employees, with certain exceptions. ASU 2018-07 is effective for us in the first quarter of fiscal 2020, and earlier adoption is permitted. We are currently evaluating the impact of our pending adoption of ASU 2018-07 on our consolidated financial statements.

Comprehensive Income: In February 2018, the FASB issued ASU 2018-02, Income Statement—Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income (ASU 2018-02), which allows companies to reclassify stranded tax effects resulting from the Tax Act, from accumulated other comprehensive income to retained earnings. The guidance also requires certain new disclosures regardless of the election. ASU 2018-02 is effective for us in the first quarter of fiscal 2020, and earlier adoption is permitted. We are currently evaluating the impact of our pending adoption of ASU 2018-02 on our consolidated financial statements.

Financial Instruments: In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (ASU 2016-13), which requires measurement and recognition of expected credit losses for financial assets held. ASU 2016-13 is effective for us in our first quarter of fiscal 2021, and earlier adoption is permitted beginning in the first quarter of fiscal 2020. We are currently evaluating the impact of our pending adoption of ASU 2016-13 on our consolidated financial statements.

Leases: In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) and subsequent amendments to the initial guidance: ASU 2017-13, ASU 2018-10 and ASU 2018-11 (collectively, Topic 842). Topic 842 requires companies to generally recognize on the balance sheet operating and financing lease liabilities and corresponding right-of-use assets. Topic 842 is effective for us in our first quarter of fiscal 2020, and earlier adoption is permitted. We are currently evaluating the impact of our pending adoption of Topic 842 on our consolidated financial statements. We currently expect that most of our operating lease commitments will be subject to the new standard and recognized as operating lease liabilities and right-of-use assets upon our adoption of Topic 842, which will increase our total assets and total liabilities that we report relative to such amounts prior to adoption.

ACQUISITIONS

3 Months Ended

Aug. 31, 2018

Business Combinations [Abstract]

ACQUISITIONS

2.	ACQUISITIONS

Acquisition of Aconex Limited

On March 28, 2018, we completed our acquisition of Aconex Limited (Aconex), a provider of cloud-based collaboration software for construction projects. We have included the financial results of Aconex in our condensed consolidated financial statements from the date of acquisition. These results were not individually material to our condensed consolidated financial statements. The total preliminary purchase price for Aconex was approximately $1.2 billion, which consisted of approximately $1.2 billion in cash and $7 million for the fair values of stock options and restricted stock-based awards assumed. In connection with the Aconex acquisition, we have preliminarily recorded $16 million of net tangible liabilities and $377 million of identifiable intangible assets based on their estimated fair values, and $863 million of residual goodwill. Goodwill generated from our acquisition of Aconex was primarily attributable to synergies expected to arise after the acquisition and is not expected to be tax deductible.

Other Fiscal 2019 and 2018 Acquisitions

During the first quarter of fiscal 2019 and the full fiscal year of 2018, we acquired certain other companies and purchased certain technology and development assets primarily to expand our products and services offerings. These acquisitions were not significant individually or in the aggregate.

Unaudited Pro Forma Financial Information

The unaudited pro forma financial information in the table below summarizes the combined results of operations for Oracle, Aconex and certain other companies that we acquired since the beginning of fiscal 2018 that were considered relevant for the purposes of unaudited pro forma financial information disclosure as if the companies were combined as of the beginning of fiscal 2018. The unaudited pro forma financial information for all periods presented included the business combination accounting effects resulting from these acquisitions, including amortization charges from acquired intangible assets (certain of which are preliminary), stock-based compensation charges for unvested restricted stock-based awards and stock options assumed, if any, and the related tax effects as though the aforementioned companies were combined as of the beginning of fiscal 2018. The unaudited pro forma financial information as presented below is for informational purposes only and is not necessarily indicative of the results of operations that would have been achieved if the acquisitions had taken place at the beginning of fiscal 2018.

The unaudited pro forma financial information for the three months ended August 31, 2018 presented the historical results of Oracle as we did not complete any material acquisitions during the first three months of fiscal 2019.

The unaudited pro forma financial information for the three months ended August 31, 2017 combined the historical results of Oracle for the three months ended August 31, 2017 and the historical results of Aconex for the six month period ended December 31, 2017 (adjusted due to differences in reporting periods and considering the date we acquired Aconex) and certain other companies that we acquired since the beginning of fiscal 2018 based upon their respective previous reporting periods and the dates these companies were acquired by us, and the effects of the pro forma adjustments listed above. The unaudited pro forma financial information was as follows:

	Three Months Ended August 31,
(in millions, except per share data)	2018		2017
Total revenues	$	9,193	$	9,146
Net income	$	2,265	$	2,119
Basic earnings per share	$	0.58	$	0.51
Diluted earnings per share	$	0.57	$	0.49

FAIR VALUE MEASUREMENTS

3 Months Ended

Aug. 31, 2018

Fair Value Disclosures [Abstract]

FAIR VALUE MEASUREMENTS

3.	FAIR VALUE MEASUREMENTS

We perform fair value measurements in accordance with FASB Accounting Standards Codification (ASC) 820, Fair Value Measurement. ASC 820 defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required to be recorded at their fair values, we consider the principal or most advantageous market in which we would transact and consider assumptions that market participants would use when pricing the assets or liabilities, such as inherent risk, transfer restrictions and risk of nonperformance.

ASC 820 establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. An asset’s or a liability’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 820 establishes three levels of inputs that may be used to measure fair value:

•

Level 1: quoted prices in active markets for identical assets or liabilities;

•

Level 2: inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; or

•

Level 3: unobservable inputs that are supported by little or no market activity and that are significant to the fair values of the assets or liabilities.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

Our assets and liabilities measured at fair value on a recurring basis, excluding accrued interest components, consisted of the following (Level 1 and Level 2 inputs are defined above):

	August 31, 2018						May 31, 2018
	Fair Value Measurements Using Input Types						Fair Value Measurements Using Input Types
(in millions)	Level 1		Level 2		Total		Level 1		Level 2		Total
Assets:
Corporate debt securities and other	$	148	$	41,419	$	41,567	$	223	$	44,079	$	44,302
Commercial paper debt securities		—		1,538		1,538		—		1,647		1,647
Money market funds		3,400		—		3,400		6,500		—		6,500
Derivative financial instruments		—		16		16		—		29		29
Total assets	$	3,548	$	42,973	$	46,521	$	6,723	$	45,755	$	52,478
Liabilities:
Derivative financial instruments	$	—	$	170	$	170	$	—	$	158	$	158

We classify our marketable securities as available-for-sale debt securities at the time of purchase and reevaluate such classification as of each balance sheet date. Our marketable securities investments consist of Tier 1 commercial paper debt securities, corporate debt securities and certain other securities. Marketable securities on the condensed consolidated balance sheets include securities with original maturities at the time of purchase greater than three months and the remainder of the securities is included in cash and cash equivalents. As of August 31, 2018 and May 31, 2018, approximately 23% and 26%, respectively, of our marketable securities investments mature within one year and 77% and 74%, respectively, mature within one to five years. Our valuation techniques used to measure the fair values of our marketable securities that were classified as Level 1 in the table above were derived from quoted market prices and active markets for these instruments that exist. Our valuation techniques used to measure the fair values of Level 2 instruments listed in the table above, the counterparties to which have high credit ratings, were derived from the following: non-binding market consensus prices that were corroborated by observable market data, quoted market prices for similar instruments, or pricing models, such as discounted cash flow techniques, with all significant inputs derived from or corroborated by observable market data including LIBOR-based yield curves, among others.

Based on the trading prices of the $58.0 billion of senior notes and the related fair value hedges that we had outstanding as of each of August 31, 2018 and May 31, 2018, the estimated fair values of the senior notes and the related fair value hedges using Level 2 inputs at August 31, 2018 and May 31, 2018 were $58.7 billion and $59.0 billion, respectively.

Goodwill And Intangible Assets Disclosure [Abstract]

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

INTANGIBLE ASSETS AND GOODWILL

3 Months Ended

Aug. 31, 2018

INTANGIBLE ASSETS AND GOODWILL

4.	INTANGIBLE ASSETS AND GOODWILL

The changes in intangible assets for fiscal 2019 and the net book value of intangible assets as of August 31, 2018 and May 31, 2018 were as follows:

	Intangible Assets, Gross							Accumulated Amortization									Intangible Assets, Net
(Dollars in millions)	May 31, 2018		Additions & Adjustments, net⁽¹⁾			August 31, 2018		May 31, 2018			Expense			August 31, 2018			May 31, 2018		August 31, 2018
Developed technology	$	5,309	$	91		$	5,400	$	(2,814	)	$	(212	)	$	(3,026	)	$	2,495	$	2,374
Cloud services and license support agreements and related relationships		5,999		(29	)		5,970		(2,285	)		(192	)		(2,477	)		3,714		3,493
Other		1,622		(3	)		1,619		(1,161	)		(30	)		(1,191	)		461		428
Total intangible assets, net	$	12,930	$	59		$	12,989	$	(6,260	)	$	(434	)	$	(6,694	)	$	6,670	$	6,295

⁽¹⁾	Amounts also include any changes in intangible asset balances for the periods presented that resulted from foreign currency translations.

Total amortization expense related to our intangible assets was $434 million and $411 million for the three months ended August 31, 2018 and 2017, respectively. As of August 31, 2018, estimated future amortization expenses related to intangible assets were as follows (in millions):

Remainder of fiscal 2019	$	1,190
Fiscal 2020		1,419
Fiscal 2021		1,198
Fiscal 2022		982
Fiscal 2023		629
Fiscal 2024		388
Thereafter		489
Total intangible assets, net	$	6,295

The changes in the carrying amounts of goodwill, net, which is generally not deductible for tax purposes, for our operating segments for the three months ended August 31, 2018 were as follows:

(in millions)	Cloud and License			Hardware		Services			Total Goodwill, net
Balances as of May 31, 2018	$	39,600		$	2,367	$	1,788		$	43,755
Goodwill adjustments, net⁽¹⁾		(47	)		—		(6	)		(53	)
Balances as of August 31, 2018	$	39,553		$	2,367	$	1,782		$	43,702

⁽¹⁾

Pursuant to our business combinations accounting policy, we recorded goodwill adjustments for the effects on goodwill of changes to net assets acquired during the period that such a change is identified, provided that any such change is within the measurement period (up to one year from the date of the acquisition). Amounts also include any changes in goodwill balances for the period presented that resulted from foreign currency translations.

RESTRUCTURING ACTIVITIES

3 Months Ended

Aug. 31, 2018

Restructuring And Related Activities [Abstract]

RESTRUCTURING ACTIVITIES

5.	RESTRUCTURING ACTIVITIES

Fiscal 2019 Oracle Restructuring Plan

During the first quarter of fiscal 2019, our management approved, committed to and initiated plans to restructure and further improve efficiencies in our operations due to our recent acquisitions and certain other operational activities (2019 Restructuring Plan). The total estimated restructuring costs associated with the 2019 Restructuring Plan are up to $432 million and will be recorded to the restructuring expense line item within our condensed consolidated statements of operations as they are incurred. We recorded $107 million of restructuring expenses in connection with the 2019 Restructuring Plan in the first three months of fiscal 2019 and we expect to incur the majority of the estimated remaining $325 million through the end of fiscal 2020. Any changes to the estimates of executing the 2019 Restructuring Plan will be reflected in our future results of operations.

Summary of All Plans

	Accrued May 31, 2018⁽²⁾		Three Months Ended August 31, 2018										Accrued August 31, 2018⁽²⁾		Total Costs Accrued to Date		Total Expected Program Costs
(in millions)	Accrued May 31, 2018⁽²⁾		Initial Costs⁽³⁾		Adj. to Cost⁽⁴⁾			Cash Payments			Others⁽⁵⁾		Accrued August 31, 2018⁽²⁾		Total Costs Accrued to Date		Total Expected Program Costs
2019 Restructuring Plan⁽¹⁾
Cloud and license	$	—	$	58	$	—		$	(21	)	$	—	$	37	$	58	$	230
Hardware		—		22		—			(14	)		—		8		22		66
Services		—		10		—			(6	)		—		4		10		45
Other⁽⁶⁾		—		17		—			(9	)		1		9		17		91
Total 2019 Restructuring Plan	$	—	$	107	$	—		$	(50	)	$	1	$	58	$	107	$	432
Total other restructuring plans⁽⁷⁾	$	282	$	5	$	(22	)	$	(94	)	$	4	$	175
Total restructuring plans	$	282	$	112	$	(22	)	$	(144	)	$	5	$	233

⁽¹⁾	Restructuring costs recorded for individual line items primarily related to employee severance costs.

⁽²⁾	The balances at August 31, 2018 and May 31, 2018 included $219 million and $257 million, respectively, recorded in other current liabilities, and $14 million and $25 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⁾	Represents employee related severance costs for functions that are not included within our operating segments and certain other restructuring costs.

⁽⁷⁾

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 period presented but for which the periodic impact to our condensed consolidated statements of operations was not significant.

DEFERRED REVENUES

3 Months Ended

Aug. 31, 2018

Deferred Revenue Disclosure [Abstract]

DEFERRED REVENUES

6.	DEFERRED REVENUES

Deferred revenues consisted of the following:

(in millions)	August 31, 2018		May 31, 2018
Cloud services and license support	$	8,924	$	7,265
Hardware		707		645
Services		438		404
Cloud license and on-premise license		280		27
Deferred revenues, current		10,349		8,341
Deferred revenues, non-current (in other non-current liabilities)		670		625
Total deferred revenues	$	11,019	$	8,966

Deferred cloud services and license support revenues and deferred hardware revenues substantially represent customer payments made in advance for cloud or support contracts that are typically billed in advance with corresponding revenues generally being recognized ratably over the contractual periods. Deferred services revenues include prepayments for our services business and revenues for these services are generally recognized as the services are performed. Deferred new cloud license and on-premise license revenues typically resulted from customer payments that relate to undelivered products and services or specified enhancements.

In connection with our acquisitions, we have estimated the fair values of the cloud services and license support performance obligations assumed from our acquired companies. We generally have estimated the fair values of these obligations assumed using a cost build-up approach. The cost build-up approach determines fair value by estimating the costs related to fulfilling the obligations plus a normal profit margin. The sum of the costs and operating profit approximates, in theory, the amount that we would be required to pay a third party to assume these acquired obligations. These aforementioned fair value adjustments recorded for obligations assumed from our acquisitions reduced the cloud services and license support deferred revenues balances that we recorded as liabilities from these acquisitions and also reduced the resulting revenues that we recognized or will recognize over the terms of the acquired obligations during the post-combination periods.

DERIVATIVE FINANCIAL INSTRUMENTS

3 Months Ended

Aug. 31, 2018

Derivative Instruments And Hedging Activities Disclosure [Abstract]

DERIVATIVE FINANCIAL INSTRUMENTS

7.	DERIVATIVE FINANCIAL INSTRUMENTS

We held the following derivative and non-derivative instruments that were accounted for pursuant to ASC 815, Derivatives and Hedging (ASC 815):

•

interest rate swap agreements, which are used to protect us against changes in the fair values of certain of our fixed-rate borrowings attributable to the movements in benchmark interest rates. We have designated these swap agreements as qualifying hedging instruments and are accounting for them as fair value hedges pursuant to ASC 815;

•

cross-currency interest rate swap agreements, which are used to protect us against changes in the fair values of certain of our fixed-rate Euro-denominated borrowings attributable to the movements in benchmark interest rates and foreign currency exchange rates by effectively converting the fixed-rate, Euro-denominated borrowings, including the annual interest payments and the payment of principal at maturity, to variable-rate, U.S. Dollar denominated debt based on LIBOR. We have designated these swap agreements as qualifying hedging instruments and are accounting for them as fair value hedges pursuant to ASC 815. As a result of our adoption of ASU 2017-12, we have elected to exclude the portion of the change in fair value of these swap agreements attributable to the related cross-currency basis spread in our assessment of hedge effectiveness. The change in fair value of these swap agreements attributable to the cross-currency basis spread is included in accumulated other comprehensive loss;

•

cross-currency swap agreements, which are used to manage foreign currency exchange risk by converting certain of our fixed-rate Euro-denominated borrowings to fixed-rate U.S. Dollar denominated debt and are accounted for as cash flow hedges pursuant to ASC 815; and

•

foreign currency borrowings, which were used to reduce the volatility in stockholders’ equity caused by the changes in the foreign currency exchange rates of the Euro with respect to the U.S. Dollar and were accounted for as net investment hedges pursuant to ASC 815 in the first quarter of fiscal 2018. In the fourth quarter of fiscal 2018, we de-designated the foreign currency borrowings as a net investment hedge.

We also held certain foreign currency contracts that were not designated as hedges pursuant to ASC 815. As of August 31, 2018 and May 31, 2018, the notional amounts of such forward contracts we held to purchase U.S. Dollars in exchange for other major international currencies were $2.9 billion and $3.4 billion, respectively, and the notional amount of forward contracts we held to sell U.S. Dollars in exchange for other major international currencies were $1.5 billion and $1.4 billion, respectively. The fair values of our outstanding foreign currency forward contracts were nominal as of August 31, 2018 and May 31, 2018. The cash flows related to these foreign currency contracts are classified as operating activities. Net gains or losses related to these forward contracts are included in non-operating income, net.

The adoption of ASU-2017-12 did not have a material impact on our previously existing hedge designations. See Note 10 of Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended May 31, 2018 for additional information regarding the purpose, accounting and classification of our derivative and non-derivative instruments. None of our derivative instruments are used for trading purposes. The effects of derivative and non-derivative instruments designated as hedges on certain of our condensed consolidated financial statements were as follows as of or for each of the respective periods presented below (amounts presented exclude any income tax effects):

Fair Values of Derivative Instruments Designated as Hedges in Condensed Consolidated Balance Sheets

		Fair Value as of
(in millions)	Balance Sheet Location	August 31, 2018		May 31, 2018
Derivative assets:
Interest rate swap agreements designated as fair value hedges	Other non-current assets	$	15	$	24
Cross-currency interest rate swap agreements designated as fair value hedges	Other non-current assets		1		5
Total derivative assets		$	16	$	29
Derivative liabilities:
Interest rate swap agreements designated as fair value hedges	Other current liabilities	$	4	$	7
Interest rate swap agreements designated as fair value hedges	Other non-current liabilities		49		48
Cross-currency swap agreements designated as cash flow hedges	Other non-current liabilities		117		103
Total derivative liabilities		$	170	$	158

Effects of Fair Value Hedging Relationships on Hedged Items in Condensed Consolidated Balance Sheet

(in millions)	August 31, 2018			May 31, 2018
Notes payable and other borrowings, current:
Carrying amount of hedged item	$	1,495		$	1,492
Cumulative hedging adjustments included in the carrying amount		(4	)		(7	)
Notes payable and other borrowings, non-current:
Carrying amounts of hedged items		5,570			5,584
Cumulative hedging adjustments included in the carrying amount		(34	)		(19	)

Effects of Derivative Instruments Designated as Hedges on Income

	Three Months Ended August 31,
	2018						2017
(in millions)	Non-operating income, net			Interest expense			Non-operating income, net		Interest expense
Condensed consolidated statements of income line amounts in which the hedge effects were recorded	$	291		$	(529	)	$	220	$	(469	)
Gain (loss) on hedges recognized in income:
Interest rate swaps designated as fair value hedges:
Derivative instruments	$	—		$	(7	)	$	—	$	—
Hedged items		—			7			—		—
Cross-currency interest rate swaps designated as fair value hedges:
Derivative instruments		(4	)		—			—		—
Hedged items		5			—			—		—
Cross-currency swap agreements designated as cash flow hedges:
Amount reclassified from accumulated OCI or OCL		12			—			107		—
Total gain (loss) on hedges recognized in income	$	13		$	—		$	107	$	—

Gain (Loss) on Derivative and Non-Derivative Instruments Designated as Hedges included in Other Comprehensive Income (OCI) or Loss (OCL)

	Three Months Ended August 31,
(in millions)	2018			2017
Cross-currency swap agreements designated as cash flow hedges	$	(14	)	$	85
Foreign currency borrowings designated as net investment hedge		—			(64	)

STOCKHOLDERS' EQUITY

3 Months Ended

Aug. 31, 2018

Stockholders Equity Note [Abstract]

STOCKHOLDERS' EQUITY

8.	STOCKHOLDERS’ EQUITY

Common Stock Repurchases

Our Board of Directors has approved a program for us to repurchase shares of our common stock. On September 17, 2018, we announced that our Board of Directors approved an expansion of our stock repurchase program by an additional $12.0 billion. As of August 31, 2018, approximately $7.8 billion remained available for stock repurchases pursuant to our stock repurchase program. We repurchased 212.2 million shares for $10.0 billion during the three months ended August 31, 2018 (including 4.4 million shares for $213 million that were repurchased but not settled) and 10.2 million shares for $500 million during the three months ended August 31, 2017 under the stock repurchase program.

Our stock repurchase authorization does not have an expiration date and the pace of our repurchase activity will depend on factors such as our working capital needs, our cash requirements for acquisitions and dividend payments, our debt repayment obligations or repurchases of our debt, our stock price, and economic and market conditions. Our stock repurchases may be effected from time to time through open market purchases or pursuant to a Rule 10b5-1 plan. Our stock repurchase program may be accelerated, suspended, delayed or discontinued at any time.

Dividends on Common Stock

During the three months ended August 31, 2018, our Board of Directors declared cash dividends of $0.19 per share of our outstanding common stock, which we paid during the same period.

In September 2018, our Board of Directors declared a quarterly cash dividend of $0.19 per share of our outstanding common stock. The dividend is payable on October 30, 2018 to stockholders of record as of the close of business on October 16, 2018. Future declarations of dividends and the establishment of future record and payment dates are subject to the final determination of our Board of Directors.

Fiscal 2019 Stock-Based Awards Activity, Valuation and Compensation Expense

During the first quarter of fiscal 2019, we issued 38 million restricted stock-based units (RSUs) and 7 million stock options (SOs). Substantially all of the awards were issued as a part of our annual stock-based award process and are subject to service-based vesting restrictions. Our fiscal 2019 stock-based awards issuances were partially offset by forfeitures and cancellations of 3 million shares during the first quarter of fiscal 2019.

The RSUs and SOs that were granted during the three months ended August 31, 2018 have vesting restrictions, valuations and contractual lives of a similar nature to those described in Note 13 of Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended May 31, 2018.

Stock-based compensation expense is included in the following operating expense line items in our condensed consolidated statements of operations:

	Three Months Ended August 31,
(in millions)	2018		2017
Cloud services and license support	$	24	$	18
Hardware		3		3
Services		13		14
Sales and marketing		94		89
Research and development		257		234
General and administrative		45		44
Acquisition related and other		—		1
Total stock-based compensation	$	436	$	403

INCOME TAXES

3 Months Ended

Aug. 31, 2018

Income Tax Disclosure [Abstract]

INCOME TAXES

9.	INCOME TAXES

Our effective tax rates for the periods presented are the result of the mix of income earned in various tax jurisdictions that apply a broad range of income tax rates. In fiscal 2018, the Tax Act was signed into law. The more significant provisions of the Tax Act as applicable to us are described in Note 1 under “Impacts of the U.S. Tax Cuts and Jobs Act of 2017” above and in our Annual Report on Form 10-K for the fiscal year ended May 31, 2018. During the first quarter of fiscal 2019, we recorded a benefit of $153 million in accordance with SAB 118 related to adjustments in our estimates of the one-time transition tax on certain foreign subsidiary earnings affected by the Tax Act. Our provision for income taxes for the first three months of fiscal 2019 varied from the 21% U.S. statutory rate imposed by the Tax Act primarily due to earnings in foreign operations, state taxes, the U.S. research and development tax credit, settlements with tax authorities, the tax effects of stock-based compensation, the Foreign Derived Intangible Income deduction, the tax effect of GILTI, and a reduction to our transition tax recorded consistent with the provision of SAB 118. Our provision for income taxes for the first three months of fiscal 2018 differed from the tax computed at the previous U.S. federal statutory income tax rate due primarily to certain earnings considered as indefinitely reinvested in foreign operations, state taxes, the U.S. research and development tax credit, settlements with tax authorities, the tax effects of stock-based compensation and the U.S. domestic production activity deduction. Our effective tax rates were 10.8% and 14.2% for the three months ended August 31, 2018 and 2017, respectively.

Our net deferred tax assets were $1.4 billion and $1.3 billion as of August 31, 2018 and May 31, 2018, respectively. We believe that it is more likely than not that the net deferred tax assets will be realized in the foreseeable future. Realization of our net deferred tax assets is dependent upon our generation of sufficient taxable income in future years in appropriate tax jurisdictions to obtain benefit from the reversal of temporary differences, net operating loss carryforwards and tax credit carryforwards. The amount of net deferred tax assets considered realizable is subject to adjustment in future periods if estimates of future taxable income change.

Domestically, U.S. federal and state taxing authorities are currently examining income tax returns of Oracle and various acquired entities for years through fiscal 2017. Our U.S. federal income tax returns have been examined for all years prior to fiscal 2007, and we are no longer subject to audit for those periods. Our U.S. state income tax returns, with some exceptions, have been examined for all years prior to fiscal 2004, and we are no longer subject to audit for those periods.

Internationally, tax authorities for numerous non-U.S. jurisdictions are also examining returns affecting our unrecognized tax benefits. With some exceptions, we are generally no longer subject to tax examinations in non-U.S. jurisdictions for years prior to fiscal 1997.

On July 27, 2015, in Altera Corp. v. Commissioner, the U.S. Tax Court issued an opinion related to the treatment of stock-based compensation expense in an intercompany cost-sharing arrangement. Currently the U.S. Court of Appeals for the Ninth Circuit is reviewing the case, and a final decision has yet to be issued. At this time, the U.S. Department of the Treasury has not withdrawn the requirement to include stock-based compensation from its regulations. We have reviewed this case and its impact on Oracle and concluded that no adjustment to the consolidated financial statements is appropriate at this time. We will continue to monitor ongoing developments and potential impacts to our consolidated financial statements.

We are under audit by the IRS and various other domestic and foreign tax authorities with regards to income tax and indirect tax matters and are involved in various challenges and litigation in a number of countries, including, in particular, Australia, Brazil, India, Korea, Spain and the United Kingdom, where the amounts under controversy are significant. In some, although not all, cases, we have reserved for potential adjustments to our provision for income taxes and accrual of indirect taxes that may result from examinations by, or any negotiated agreements with, these tax authorities or final outcomes in judicial proceedings, and we believe that the final outcome of these examinations, agreements or judicial proceedings will not have a material effect on our results of operations. If events occur which indicate payment of these amounts is unnecessary, the reversal of the liabilities would result in the recognition of benefits in the period we determine the liabilities are no longer necessary. If our estimates of the federal, state, and foreign income tax liabilities and indirect tax liabilities are less than the ultimate assessment, it could result in a further charge to expense.

We believe that we have adequately provided under GAAP for outcomes related to our tax audits. However, there can be no assurances as to the possible outcomes or any related financial statement effect thereof.

SEGMENT INFORMATION

3 Months Ended

Aug. 31, 2018

Segment Reporting [Abstract]

SEGMENT INFORMATION

10.	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 is comprised of a single operating segment. All three of our businesses market and sell our offerings globally to businesses of many sizes, government agencies, educational institutions and resellers with a worldwide sales force positioned to offer the combinations that best meet customer needs.

Our cloud and license business engages in the sale, marketing and delivery of our applications, platform and infrastructure technologies through cloud and on-premise deployment models including our cloud services and license support offerings; and our cloud license and on-premise license offerings. Cloud services and license support revenues are generated from offerings that are typically contracted with customers directly, billed to customers in advance, delivered to customers over time with our revenue recognition occurring over the contractual terms, and renewed by customers upon completion of the contractual terms. Cloud services and license support contracts provide customers with access to the latest updates to the applications, platform and infrastructure technologies as they become available and for which the customer contracted and related technical support services over the contractual term. 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. We generally recognize revenues at the point in time the software is made available to the customer to download and use, which typically is immediate upon signature of the license contract. In each fiscal year, our cloud and license business’ contractual activities are typically highest in our fourth fiscal quarter and the related cash flows are typically highest in the following quarter (i.e. in the first fiscal quarter of the next fiscal year) as we receive payments from these contracts.

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 offers hardware support, which provides customers with software updates for the software components that are essential to the functionality of their hardware products, such as Oracle Solaris and certain other software, and can also 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:

	Three Months Ended August 31,
(in millions)	2018		2017
Cloud and license:
Revenues⁽¹⁾	$	7,484	$	7,326
Cloud services and license support expenses		867		819
Sales and marketing expenses		1,744		1,677
Margin⁽²⁾	$	4,873	$	4,830
Hardware:
Revenues	$	904	$	943
Hardware products and support expenses		317		365
Sales and marketing expenses		139		174
Margin⁽²⁾	$	448	$	404
Services:
Revenues	$	813	$	860
Services expenses		676		662
Margin⁽²⁾	$	137	$	198
Totals:
Revenues⁽¹⁾	$	9,201	$	9,129
Expenses		3,743		3,697
Margin⁽²⁾	$	5,458	$	5,432

⁽¹⁾

Cloud and license revenues for management reporting included revenues related to cloud and license 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 6 for an explanation of these adjustments and the table below for a reconciliation of our total operating segment revenues to our total consolidated 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, general and administrative and certain other allocable expenses, net. 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.

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:

	Three Months Ended August 31,
(in millions)	2018			2017
Total revenues for operating segments	$	9,201		$	9,129
Cloud and license revenues⁽¹⁾		(8	)		(25	)
Total revenues	$	9,193		$	9,104

Total margin for operating segments	$	5,458		$	5,432
Cloud and license revenues⁽¹⁾		(8	)		(25	)
Research and development		(1,564	)		(1,572	)
General and administrative		(321	)		(319	)
Amortization of intangible assets		(434	)		(411	)
Acquisition related and other		(14	)		(12	)
Restructuring		(90	)		(124	)
Stock-based compensation for operating segments		(134	)		(124	)
Expense allocations and other, net		(115	)		(96	)
Interest expense		(529	)		(469	)
Non-operating income, net		291			220
Income before provision for income taxes	$	2,540		$	2,500

⁽¹⁾

Cloud and license revenues presented for management reporting included revenues related to cloud and license obligations that would have otherwise been recorded by the 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. See Note 6 for an explanation of these adjustments and this table for a reconciliation of our total operating segment revenues to our total consolidated revenues as reported in our condensed consolidated statements of operations.

Disaggregation of Revenues

We have considered information that is regularly reviewed by our chief operating decision makers in evaluating financial performance, and disclosures presented outside of our financial statements in our earnings releases and used in investor presentations to disaggregate revenues to depict how the nature, amount, timing and uncertainty of revenues and cash flows are effected by economic factors. The principal category we use to disaggregate revenues is the nature of our products and services as presented in our condensed consolidated statements of operations.

The following table is a summary of our total revenues by geographic region. The relative proportion of our total revenues between each geographic region as presented in the table below was materially consistent across each of our operating segments’ revenues for the periods presented.

	Three Months Ended August 31,
(in millions)	2018		2017
Americas	$	5,161	$	5,098
EMEA⁽¹⁾		2,576		2,535
Asia Pacific⁽²⁾		1,456		1,471
Total revenues	$	9,193	$	9,104

⁽¹⁾	Comprised of Europe, the Middle East and Africa

⁽²⁾	The Asia Pacific region includes Japan

The following table presents a summary of our cloud and license business revenues by ecosystem. Applications ecosystem revenues represent the sum of applications related cloud services and license support revenues; and applications licenses revenues. Platform and infrastructure revenues represent the sum of platform and infrastructure related cloud services and license support revenues; and platform and infrastructure licenses revenues.

	Three Months Ended August 31,
(in millions)	2018		2017
Applications revenues	$	2,761	$	2,616
Platform and infrastructure revenues		4,715		4,685
Total cloud and license revenues	$	7,476	$	7,301

EARNINGS PER SHARE

3 Months Ended

Aug. 31, 2018

Earnings Per Share [Abstract]

EARNINGS PER SHARE

11.	EARNINGS PER SHARE

Basic earnings per share is computed by dividing net income for the period by the weighted-average number of common shares outstanding during the period. Diluted earnings per share is computed by dividing net income for the period by the weighted-average number of common shares outstanding during the period, plus the dilutive effect of outstanding restricted stock-based awards, stock options, and shares issuable under the employee stock purchase plan as applicable pursuant to the treasury stock method. The following table sets forth the computation of basic and diluted earnings per share:

	Three Months Ended August 31,
(in millions, except per share data)	2018		2017
Net income	$	2,265	$	2,144
Weighted average common shares outstanding		3,904		4,156
Dilutive effect of employee stock plans		95		128
Dilutive weighted average common shares outstanding		3,999		4,284
Basic earnings per share	$	0.58	$	0.52
Diluted earnings per share	$	0.57	$	0.50
Shares subject to anti-dilutive restricted stock-based awards and stock options excluded from calculation⁽¹⁾		81		31

⁽¹⁾	These weighted shares relate to anti-dilutive restricted service based stock-based awards and stock options (as calculated using the treasury stock method) and contingently issuable shares under PSO and PSU arrangements. Such shares could be dilutive in the future.

LEGAL PROCEEDINGS

3 Months Ended

Aug. 31, 2018

Legal Proceedings [Abstract]

LEGAL PROCEEDINGS

12.	LEGAL PROCEEDINGS

Hewlett-Packard Company Litigation

On June 15, 2011, Hewlett-Packard Company, now Hewlett Packard Enterprise Company (HP), filed a complaint in the California Superior Court, County of Santa Clara against Oracle Corporation alleging numerous causes of action including breach of contract, breach of the covenant of good faith and fair dealing, defamation, intentional interference with prospective economic advantage, and violation of the California Unfair Business Practices Act. The complaint alleged that when Oracle announced on March 22 and 23, 2011 that it would no longer develop future versions of its software to run on HP’s Itanium-based servers, it breached a settlement agreement signed on September 20, 2010 between HP and Mark Hurd (the Hurd Settlement Agreement), who is our Chief Executive Officer and was both HP’s former chief executive officer and chairman of HP’s board of directors. HP sought a judicial declaration of the parties’ rights and obligations under the Hurd Settlement Agreement and other equitable and monetary relief.

Oracle answered the complaint and filed a cross-complaint, which was amended on December 2, 2011. The amended cross-complaint alleged claims including violation of the Lanham Act. Oracle alleged that HP had secretly agreed to pay Intel to continue to develop and manufacture the Itanium microprocessor, and had misrepresented to customers that the Itanium microprocessor had a long roadmap, among other claims. Oracle sought equitable rescission of the Hurd Settlement Agreement, and other equitable and monetary relief.

The court bifurcated the trial and tried HP’s causes of action for declaratory relief and promissory estoppel without a jury in June 2012. The court issued a final statement of decision on August 28, 2012, finding that the Hurd Settlement Agreement required Oracle to continue to develop certain of its software products for use on HP’s Itanium-based servers and to port such products at no cost to HP for as long as HP sells those servers (the Phase One Ruling). A jury trial began on May 23, 2016. On June 30, 2016, the jury returned a verdict in favor of HP on its claims for breach of contract and breach of the implied covenant of good faith and fair dealing and against Oracle on its claim for violation of the Lanham Act (the Phase Two Jury Verdict). The jury awarded HP damages in the amount of $3.0 billion, and HP is entitled to post-judgment interest on this award. On August 30, 2016, the court denied HP’s motion for pre-judgment interest. Judgment was entered on October 20, 2016. Oracle posted certain court-mandated surety bonds with the court in order to proceed with its motion for a new trial and entered into related indemnification agreements with each of the surety bond issuing companies. Oracle filed a motion for a new trial on November 14, 2016, which was denied.

Oracle filed its notice of appeal on January 17, 2017, specifying that it was appealing the trial court’s Phase One Ruling and Phase Two Jury Verdict. On February 2, 2017, HP filed a notice of appeal of the trial court’s denial of pre-judgment interest. No amounts have been paid or recorded to our results of operations either prior to or subsequent to the Phase One Ruling or Phase Two Jury Verdict. We continue to believe that we have meritorious defenses against HP’s claims, and we intend to present these defenses to the appellate court. Among the arguments we expect to make on appeal are the following: the trial court misapplied fundamental principles of contract law and misinterpreted the Hurd Settlement Agreement, including by disregarding the context of the Hurd Settlement Agreement and the evidence of the parties’ mutual intentions; that HP’s breach of contract claim should fail as a matter of law because HP does not claim and did not prove that Oracle failed to deliver any software under the trial court’s interpretation of the contract; that awarding HP both damages for breach of the Hurd Settlement Agreement and specific performance of that agreement constitutes an improper double recovery; and that the damages award is excessive, unsupported by the evidence, and contrary to law. We cannot currently estimate a reasonably possible range of loss for this action due to the complexities and uncertainty surrounding the appeal process and the nature of the claims. Litigation is inherently unpredictable, and the outcome of the appeal process related to this action is uncertain. It is possible that the resolution of this action could have a material impact to our future cash flows and results of operations.

Derivative Litigation

On May 3, 2017, a stockholder derivative lawsuit was filed in the Court of Chancery of the State of Delaware. The derivative suit is brought by an alleged stockholder of Oracle, purportedly on Oracle’s behalf, against Oracle, our Chairman of the Board of Directors and Chief Technology Officer in his capacities as a director, officer and an alleged controlling stockholder, one of our Chief Executive Officers (who is also a director), three other directors, and Oracle as a nominal defendant. Plaintiff alleges that the defendants breached their fiduciary duties by causing Oracle to agree to purchase NetSuite Inc. (NetSuite) at an excessive price. Plaintiff seeks declaratory relief, an order rescinding or reforming the NetSuite transaction, unspecified monetary damages (including interest), attorneys’ fees and costs, and disgorgement of various unspecified profits, fees, compensation, and benefits.

On July 18, 2017, a second stockholder derivative lawsuit was filed in the Court of Chancery of the State of Delaware, brought by another alleged stockholder of Oracle, purportedly on Oracle’s behalf. The suit is brought against all current members and one former member of our Board of Directors, and Oracle as a nominal defendant. Plaintiff alleges that the defendants breached their fiduciary duties by causing Oracle to agree to purchase NetSuite at an excessive price. Plaintiff seeks declaratory relief, unspecified monetary damages (including interest), and attorneys’ fees and costs.

On August 9, 2017, the court consolidated the two derivative cases. In a September 7, 2017 order, the court appointed plaintiff’s counsel in the second case as lead plaintiffs’ counsel and designated the July 18, 2017 complaint as the operative complaint. The defendants filed a motion to dismiss on October 27, 2017, and after briefing and argument, the court denied this motion on March 19, 2018. The parties stipulated that all of the individual defendants, except for our Chief Technology Officer and one of our Chief Executive Officers, should be dismissed from this case without prejudice, and on March 28, 2018, the court approved this stipulation. On May 4, 2018, the remaining defendants answered plaintiff’s complaint.

On May 4, 2018, the Board of Directors established a Special Litigation Committee (the SLC) to investigate the allegations in this derivative action. Three outside directors serve on the SLC. On July 24, 2018, the Court entered an order, granting the SLC’s motion to stay this case for six months, and ordering the SLC to provide a status report by November 30, 2018.

While Oracle continues to evaluate these claims, we do not believe this litigation will have a material impact on our financial position or results of operations.

Other Litigation

We are party to various other legal proceedings and claims, either asserted or unasserted, which arise in the ordinary course of business, including proceedings and claims that relate to acquisitions we have completed or to companies we have acquired or are attempting to acquire. While the outcome of these matters cannot be predicted with certainty, we do not believe that the outcome of any of these matters, individually or in the aggregate, will result in losses that are materially in excess of amounts already recognized, if any.

BASIS OF PRESENTATION AND RECENT ACCOUNTING PRONOUNCEMENTS (Policies)

3 Months Ended

Aug. 31, 2018

Accounting Policies [Abstract]

Basis of Presentation

We have prepared the condensed consolidated financial statements included herein pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (SEC). Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (GAAP) have been condensed or omitted pursuant to such rules and regulations. However, we believe that the disclosures herein are adequate to ensure the information presented is not misleading. These unaudited condensed consolidated financial statements should be read in conjunction with the audited financial statements and the notes thereto included in our Annual Report on Form 10-K for the fiscal year ended May 31, 2018.

We believe that all necessary adjustments, which consisted only of normal recurring items, have been included in the accompanying financial statements to present fairly the results of the interim periods. The results of operations for the interim periods presented are not necessarily indicative of the operating results to be expected for any subsequent interim period or for our fiscal year ending May 31, 2019.

During the first quarter of fiscal 2019, we adopted the following Accounting Standards Updates:

•

Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers: Topic 606 and subsequent amendments to the initial guidance: ASU 2015-14, ASU 2016-08, ASU 2016-10, ASU 2016-12, ASU 2016-20, ASU 2017-10, ASU 2017-13 and ASU 2017-14 (collectively, Topic 606), utilizing the full retrospective method of transition whereby the results and related disclosures for the comparative fiscal 2018 period presented in this Form 10-Q were recast to be presented as if Topic 606 had been in effect during such fiscal 2018 period. Refer to the Revenue Recognition and Deferred Sales Commission sections below for accounting policy updates upon our adoption of Topic 606.

•

ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities (ASU 2017-12), which amends and simplifies existing guidance in order to allow companies to more accurately present the economic effects of risk management activities in the financial statements. We early adopted this new standard on June 1, 2018 using the modified retrospective method, which requires us to account for ASU 2017-12 as of the date of adoption with any retrospective adjustments applicable to prior periods included as a cumulative-effect adjustment to accumulated other comprehensive loss and retained earnings. The adoption of ASU 2017-12 did not have a material impact on our condensed consolidated financial statements. As a result of the adoption of ASU 2017-12, we have elected to modify certain of our hedge documentation to exclude the fair value of certain components of the related hedging instrument in our assessment of hedge effectiveness. Refer to Note 7 for additional explanations of the impact of adoption.

•

ASU 2017-07, Compensation—Retirement Benefits (Topic 715): Improving the presentation of Net Periodic Pension Costs and Net Periodic Postretirement Benefit Costs (ASU 2017-07), which provides guidance on the capitalization, presentation and disclosure of net benefit costs related to postretirement benefit plans. We adopted ASU 2017-07 on a full retrospective basis, which resulted in the retrospective reclassification of $13 million of non-service net periodic pension cost for the three months ended August 31, 2017 from line items within operating expenses into non-operating income, net.

•

ASU 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory (ASU 2016-16), which requires entities to recognize the income tax consequences of an intra-entity transfer of an asset, other than inventory, when the transfer occurs. We adopted ASU 2016-16 on a modified retrospective basis through a cumulative-effect adjustment that resulted in a $110 million decrease in prepaid assets with the corresponding offset to retained earnings.

•

ASU 2016-01, Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities (ASU 2016-01), which addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. Upon adoption of ASU 2016-01, we have elected to measure the investments we hold in certain non-marketable equity securities in which we do not have a controlling interest or significant influence that have no readily determinable fair values at cost, less impairment, adjusted for observable price changes from orderly transactions for identical or similar investments of the same issuer. We adopted the guidance prospectively effective June 1, 2018, and there was no impact to our condensed consolidated financial statements.

The impacts of adopting Topic 606 and ASU 2017-07 for select historical condensed consolidated statement of operations line items were as follows:

	Three Months Ended August 31, 2017
(in millions, except per share data)	As Previously Reported		Adjustments			As Adjusted
Total revenues	$	9,187	$	(83	)	$	9,104
Total operating expenses	$	6,366	$	(11	)	$	6,355
Non-operating income, net	$	233	$	(13	)	$	220
Provision for income taxes	$	375	$	(19	)	$	356
Net income	$	2,210	$	(66	)	$	2,144
Basic earnings per share	$	0.53	$	(0.01	)	$	0.52
Diluted earnings per share	$	0.52	$	(0.02	)	$	0.50

The impact of adopting Topic 606 for select historical condensed consolidated balance sheet line items was as follows:

	As of May 31, 2018
(in millions, except per share data)	As Previously Reported		Adjustments			As Adjusted
Trade receivables, net of allowances for doubtful accounts	$	5,279	$	(143	)	$	5,136
Prepaid expenses and other current assets	$	3,424	$	338		$	3,762
Deferred tax assets	$	1,491	$	(96	)	$	1,395
Other non-current assets	$	3,487	$	488		$	3,975
Deferred revenues	$	8,429	$	(88	)	$	8,341
Income taxes payable, non-current	$	13,422	$	7		$	13,429
Other non-current liabilities	$	2,295	$	2		$	2,297
Total equity	$	46,224	$	649		$	46,873

There have been no other significant changes in our reported financial position or results of operations and cash flows as a result of the adoption of new accounting pronouncements. Except for the updates to our revenue recognition and deferred sales commission policies noted below, there have been no changes to our significant accounting policies that were disclosed in our Annual Report on Form 10-K for the fiscal year ended May 31, 2018 that have had a significant impact on our condensed consolidated financial statements or notes thereto as of and for the three months ended August 31, 2018.

Impacts of the U.S. Tax Cuts and Jobs Act of 2017

The comparability of our operating results in the first quarter of fiscal 2019 compared to the corresponding prior year period was impacted by the U.S. Tax Cuts and Jobs Act of 2017 (the Tax Act), which was effective for us starting in our third quarter of fiscal 2018. Information regarding our adoption and prospective impacts of the Tax Act on our tax and liquidity profile is included in our Annual Report on Form 10-K for our fiscal year ended May 31, 2018. The net expense related to the enactment of the Tax Act has been accounted for during fiscal 2019 based on provisional estimates pursuant to SEC Staff Accounting Bulletin No. 118 (SAB 118). Subsequent adjustments, if any, related to our enactment of the Tax Act will be accounted for in the period such adjustments are identified. The provisional estimates incorporate, among other factors, assumptions made based on interpretations of the Tax Act and existing tax laws and a range of historical financial and tax-specific facts and information, including among other items, the amount of cash and other specified assets and liabilities of the company and its foreign subsidiaries on relevant dates and estimates of deferred tax balances pending finalization of those balances.

Additionally, we are continuing to evaluate the accounting policy election required with regard to the Tax Act’s Global Intangible Low-Taxed Income (GILTI) provision. The Financial Accounting Standards Board (FASB) allows companies to adopt a policy election to account for GILTI under one of two methods: (i) account for GILTI as a component of tax expense in the period in which a company is subject to the rules (the period cost method), or (ii) account for GILTI in a company’s measurement of deferred taxes (the deferred method). As of August 31, 2018, we have accounted for GILTI in accordance with the period cost method. We have not finalized our policy election, and expect to do so after completion of our analysis of the GILTI provisions within the measurement period in accordance with SAB 118.

Revenue Recognition

Our sources of revenues include:

•

cloud and license revenues, which include the sale of: cloud services and license support; and cloud licenses and on-premise licenses, which represent licenses purchased by customers for use in both cloud and on-premise IT environments;

•

hardware revenues, which include the sale of hardware products including Oracle Engineered Systems, servers, and storage products, and industry-specific hardware; and hardware support revenues; and

•

services revenues, which are earned from providing cloud-, license- and hardware-related services including consulting, advanced customer support and education services.

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. License support contracts provide customers with rights to unspecified software product upgrades, maintenance releases and patches released during the term of the support period and include internet access to technical content, as well as internet and telephone access to technical support personnel. License support contracts are generally priced as a percentage of the net cloud license and on-premise license fees. Substantially all of our customers renew their license support contracts annually.

Cloud services revenues include revenues from Oracle Cloud Software-as-a-Service (SaaS), Platform-as-a-Service (PaaS) and Infrastructure-as-a-Service (IaaS) offerings (collectively, Oracle Cloud Services), which deliver applications, platform and infrastructure technologies, respectively, via cloud-based deployment models that we develop functionality for, provide unspecified updates and enhancements for, host, manage and support and that customers access by entering into a subscription agreement with us for a stated period. Our IaaS offerings also include Oracle Managed Cloud Services, which are designed to provide comprehensive software and hardware management, maintenance and security services for customer cloud-based, on-premise or other IT infrastructure for a fee for a stated term.

Cloud license and on-premise license revenues primarily represent amounts earned from granting customers licenses to use our database, middleware, application and industry-specific software products which our customers use for cloud-based, on-premise and other IT environments. The vast majority of our cloud license and on-premise license arrangements include license support contracts, which are entered into at the customer’s option.

Revenues from the sale of hardware products represent amounts earned primarily from the sale of our Oracle Engineered Systems, computer servers, storage, and industry-specific hardware. Our hardware support offerings generally provide customers with software updates for the software components that are essential to the functionality of the hardware products purchased and can also include product repairs, maintenance services and technical support services. Hardware support contracts are generally priced as a percentage of the net hardware products fees.

Our consulting services are offered as standalone arrangements or as a part of arrangements to customers buying other products and services. Our advanced customer support services are offered as standalone arrangements or as a part of arrangements to customers buying other products and services. We offer these advanced customer support services to Oracle customers to enable increased performance and higher availability of their products and services. Education services include instructor-led, media-based and internet-based training in the use of our cloud, software and hardware products.

Topic 606 is a single standard for revenue recognition that applies to all of our cloud, software, hardware and services arrangements and generally requires revenues to be recognized upon the transfer of control of promised goods or services provided to our customers, reflecting the amount of consideration we expect to receive for those goods or services. Pursuant to Topic 606, revenues are recognized upon the application of the following steps:

•

identification of the contract, or contracts, with a customer;

•

identification of the performance obligations in the contract;

•

determination of the transaction price;

•

allocation of the transaction price to the performance obligations in the contract; and

•

recognition of revenues when, or as, the contractual performance obligations are satisfied.

The timing of revenue recognition may differ from the timing of invoicing our customers. We record an unbilled receivable which is included within accounts receivable on our condensed consolidated balance sheets, when revenue is recognized prior to invoicing. We record deferred revenues on our condensed consolidated balance sheets when revenues are recognized subsequent to cash collection for an invoice. Our standard payment terms are generally net 30 days but may vary. Invoices for cloud license and on-premise licenses and hardware products are generally issued when the license is made available for customer use or upon delivery to the customer of the hardware product. Invoices for license support and hardware support contracts are generally invoiced annually in advance. Cloud SaaS, PaaS and IaaS contracts are generally invoiced annually, quarterly or monthly in advance. Services are generally invoiced in advance or as the services are performed. Most contracts that contain a financing component are contracts financed through our financing division. The transaction price for a contract that is financed through our financing division is adjusted to reflect the time value of money and interest revenue is recorded as a component of non-operating income, net within our condensed consolidated statements of operations based on market rates in the country in which the transaction is being financed.

Our revenue arrangements generally include standard warranty or service level provisions that our arrangements will perform and operate in all material respects as defined in the respective agreements, the financial impacts of which have historically been and are expected to continue to be insignificant. Our arrangements generally do not include a general right of return relative to the delivered products or services. We recognize revenues net of any taxes collected from customers, which are subsequently remitted to governmental authorities.

Revenue Recognition for Cloud Services

Revenues from cloud services provided on a subscription basis are generally recognized ratably over the contractual period that the services are delivered, beginning on the date our service is made available to our customers. We recognize revenue ratably because the customer receives and consumes the benefits of the cloud services evenly throughout the contract period. Revenues from cloud services provided on a consumption basis, such as metered services, are generally recognized based on the utilization of the services by the customer.

Revenue Recognition for License Support and Hardware Support

Oracle’s primary performance obligations with respect to license support contracts and hardware support contracts are to provide customers with technical support as needed and unspecified software product upgrades, maintenance releases and patches during the term of the support period when they are available. Oracle is obligated to make the license and hardware support services available continuously throughout the contract period. Therefore, revenues for license support contracts and hardware support contracts are generally recognized ratably over the contractual periods that the support services are provided.

Revenue Recognition for Cloud License and On-Premise License

Revenues from distinct cloud license and on-premise license performance obligations are generally recognized upfront at the point in time when the software is made available to the customer to download and use. Revenues from usage-based royalty arrangements for distinct cloud licenses and on-premise licenses are recognized at the point in time when the software end user usage occurs. For usage-based royalty arrangements with a fixed minimum guarantee amount, the minimum amount is generally recognized upfront when the software is made available to the royalty customer.

Revenue Recognition for Hardware Products

The hardware product and related software, such as an operating system or firmware, are highly interdependent and interrelated and are accounted for as a combined performance obligation. The revenues for this combined performance obligation are generally recognized at the point in time that the hardware product is delivered to the customer and ownership is transferred to the customer.

Revenue Recognition for Services

Services revenues are generally recognized over time as the services are performed. Revenues for fixed price services are generally recognized over time applying input methods to estimate progress to completion. Revenues for consumption based services are generally recognized as the services are performed.

Allocation of the Transaction Price for Contracts that have Multiple Performance Obligations

Many of our contracts include multiple performance obligations. Judgment is required in determining whether each performance obligation is distinct. Oracle products and services generally do not require a significant amount of integration or interdependency. We allocate the transaction price for each contract to each performance obligation based on the relative standalone selling price (SSP) for each performance obligation within each contract.

We use judgment in determining the SSP for products and services. For substantially all performance obligations except cloud licenses and on-premise licenses, we are able to establish SSP based on the observable prices of products or services sold separately in comparable circumstances to similar customers. We typically establish a standalone selling price range for our products and services which is reassessed on a periodic basis or when facts and circumstances change. Our cloud licenses and on-premise licenses have not historically been sold on a standalone basis as substantially all customers elect to purchase license support contracts at the time of a cloud license and on-premise license purchase. License support contracts are generally priced as a percentage of the net fees paid by the customer to access the license. We are unable to establish SSP for our cloud licenses and on-premise licenses based on observable prices given the same products are sold for a broad range of amounts (that is, the selling price is highly variable) and a representative SSP is not discernible from past transactions or other observable evidence. As a result, the SSP for a cloud license and an on-premise license included in a contract with multiple performance obligations is determined by applying a residual approach whereby all performance obligations within a contract are first allocated a portion of the transaction price based upon their respective SSPs with any residual amount of transaction price allocated to cloud license and on-premise license revenues.

Deferred Sales Commissions

We defer sales commissions earned by our sales force that are considered to be incremental and recoverable costs of obtaining a cloud, license support and hardware support contract. Initial sales commissions for the majority of these aforementioned contracts are generally deferred and amortized on a straight-line basis over a period of benefit that we estimate to be four to five years. We determine the period of benefit by taking into consideration the historical and expected durations of our customer contracts, the expected useful lives of our technologies, and other factors. Sales commissions for renewal contracts relating to our cloud-based arrangements are generally deferred and then amortized on a straight-line basis over the related contractual renewal period, which is generally one to three years. Amortization of deferred sales commissions is included as a component of sales and marketing expenses in our condensed consolidated statements of operations. Total capitalized costs to obtain a contract and related balances were not material as of or during each of the three months ended August 31, 2018 and 2017.

Contract Balances and Remaining Performance Obligations from Contracts with Customers

Trade receivables, net of allowance for doubtful accounts, and deferred revenues are reported net of related uncollected deferred revenues in our condensed consolidated balance sheets as of August 31, 2018 and May 31, 2018. Trade receivables and contract liabilities (which represent deferred revenues) from contracts with customers were $3.7 billion and $11.0 billion, respectively, as of August 31, 2018 and $5.1 billion and $9.0 billion, respectively, as of May 31, 2018.

The amount of revenues recognized in our first quarter of fiscal 2019 that were included in the opening deferred revenues balance as of May 31, 2018 was approximately $3.5 billion. Revenues recognized from performance obligations satisfied in prior periods were immaterial during each of the three months ended August 31, 2018 and 2017. Impairment losses recognized on our receivables were immaterial in each of the three months ended August 31, 2018 and 2017.

Remaining performance obligations represent contracted revenues that had not yet been recognized, and include deferred revenues, invoices that have been issued to customers but were uncollected and have not been recognized as revenues, and amounts that will be invoiced and recognized as revenues in future periods. The volumes and amounts of customer contracts that we book and total revenues that we recognize are impacted by a variety of seasonal factors. In each fiscal year, the amounts and volumes of contracting activity and our total revenues are typically highest in our fourth fiscal quarter and lowest in our first fiscal quarter. These seasonal impacts influence how our remaining performance obligations change over time. As of August 31, 2018, our remaining performance obligations were $31.3 billion, approximately 64% of which we expect to recognize as revenues over the next 12 months and the remainder thereafter.

Refer to Note 10 for our discussion of revenue disaggregation.

Cash, Cash Equivalents and Restricted Cash

Restricted cash that was included within cash and cash equivalents as presented within our condensed consolidated balance sheets as of August 31, 2018 and May 31, 2018 and our condensed consolidated statements of cash flows for the three months ended August 31, 2018 and 2017 was nominal.

Acquisition Related and Other Expenses

Acquisition related and other expenses consist of personnel related costs and stock-based compensation for transitional and certain other employees, integration related professional services, certain business combination adjustments including certain adjustments after the measurement period has ended and certain other operating items, net.

	Three Months Ended August 31,
(in millions)	2018			2017
Transitional and other employee related costs	$	14		$	9
Stock-based compensation		—			1
Professional fees and other, net		2			3
Business combination adjustments, net		(2	)		(1	)
Total acquisition related and other expenses	$	14		$	12

Non-Operating Income, net

Non-operating income, net consists primarily of interest income, net foreign currency exchange losses, the noncontrolling interests in the net profits of our majority-owned subsidiaries (primarily Oracle Financial Services Software Limited and Oracle Corporation Japan) and net other income, including net realized gains and losses related to all of our investments, net unrealized gains and losses related to the small portion of our investment portfolio related to our deferred compensation plan, and non-service net periodic pension income (losses).

	Three Months Ended August 31,
(in millions)	2018			2017
Interest income	$	348		$	257
Foreign currency losses, net		(34	)		(4	)
Noncontrolling interests in income		(39	)		(46	)
Other income, net		16			13
Total non-operating income, net	$	291		$	220

Sales of Financing Receivables

We offer certain of our customers the option to acquire our software products, hardware products and services offerings through separate long-term payment contracts. We generally sell these contracts that we have financed for our customers on a non-recourse basis to financial institutions within 90 days of the contracts’ dates of execution. We record the transfers of amounts due from customers to financial institutions as sales of financing receivables because we are considered to have surrendered control of these financing receivables. Financing receivables sold to financial institutions were $822 million and $818 million for the three months ended August 31, 2018 and 2017, respectively.

Recent Accounting Pronouncements

Internal-use Software: In August 2018, the FASB issued ASU 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (ASU 2018-15), which clarifies the accounting for implementation costs in cloud computing arrangements. ASU 2018-15 is effective for us in the first quarter of fiscal 2020, and earlier adoption is permitted. We are currently evaluating the impact of our pending adoption of ASU 2018-15 on our consolidated financial statements.

Retirement Benefits: In August 2018, the FASB issued ASU 2018-14, Compensation—Retirement Benefits—Defined Benefit Plans—General (Topic 715-20): Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans (ASU 2018-14), which modifies the disclosure requirements for defined benefit pension plans and other postretirement plans. ASU 2018-14 is effective for us in the first quarter of fiscal 2021, and earlier adoption is permitted. We are currently evaluating the impact of our pending adoption of ASU 2018-14 on our consolidated financial statements.

Fair Value Measurement: In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement (ASU 2018-13), which modifies the disclosure requirements on fair value measurements. ASU 2018-13 is effective for us in the first quarter of fiscal 2020, and earlier adoption is permitted. We are currently evaluating the impact of our pending adoption of ASU 2018-13 on our consolidated financial statements.

Stock-based Compensation: In June 2018, the FASB issued ASU 2018-07 Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting (ASU 2018-07), which simplifies the accounting for share-based payments to nonemployees by aligning it with the accounting for share-based payments to employees, with certain exceptions. ASU 2018-07 is effective for us in the first quarter of fiscal 2020, and earlier adoption is permitted. We are currently evaluating the impact of our pending adoption of ASU 2018-07 on our consolidated financial statements.

Comprehensive Income: In February 2018, the FASB issued ASU 2018-02, Income Statement—Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income (ASU 2018-02), which allows companies to reclassify stranded tax effects resulting from the Tax Act, from accumulated other comprehensive income to retained earnings. The guidance also requires certain new disclosures regardless of the election. ASU 2018-02 is effective for us in the first quarter of fiscal 2020, and earlier adoption is permitted. We are currently evaluating the impact of our pending adoption of ASU 2018-02 on our consolidated financial statements.

Financial Instruments: In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (ASU 2016-13), which requires measurement and recognition of expected credit losses for financial assets held. ASU 2016-13 is effective for us in our first quarter of fiscal 2021, and earlier adoption is permitted beginning in the first quarter of fiscal 2020. We are currently evaluating the impact of our pending adoption of ASU 2016-13 on our consolidated financial statements.

Leases: In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) and subsequent amendments to the initial guidance: ASU 2017-13, ASU 2018-10 and ASU 2018-11 (collectively, Topic 842). Topic 842 requires companies to generally recognize on the balance sheet operating and financing lease liabilities and corresponding right-of-use assets. Topic 842 is effective for us in our first quarter of fiscal 2020, and earlier adoption is permitted. We are currently evaluating the impact of our pending adoption of Topic 842 on our consolidated financial statements. We currently expect that most of our operating lease commitments will be subject to the new standard and recognized as operating lease liabilities and right-of-use assets upon our adoption of Topic 842, which will increase our total assets and total liabilities that we report relative to such amounts prior to adoption.

BASIS OF PRESENTATION AND RECENT ACCOUNTING PRONOUNCEMENTS (Tables)

3 Months Ended

Aug. 31, 2018

Organization Consolidation And Presentation Of Financial Statements [Abstract]

Adoption of Accounting Standard Updates

	Three Months Ended August 31, 2017
(in millions, except per share data)	As Previously Reported		Adjustments			As Adjusted
Total revenues	$	9,187	$	(83	)	$	9,104
Total operating expenses	$	6,366	$	(11	)	$	6,355
Non-operating income, net	$	233	$	(13	)	$	220
Provision for income taxes	$	375	$	(19	)	$	356
Net income	$	2,210	$	(66	)	$	2,144
Basic earnings per share	$	0.53	$	(0.01	)	$	0.52
Diluted earnings per share	$	0.52	$	(0.02	)	$	0.50

	As of May 31, 2018
(in millions, except per share data)	As Previously Reported		Adjustments			As Adjusted
Trade receivables, net of allowances for doubtful accounts	$	5,279	$	(143	)	$	5,136
Prepaid expenses and other current assets	$	3,424	$	338		$	3,762
Deferred tax assets	$	1,491	$	(96	)	$	1,395
Other non-current assets	$	3,487	$	488		$	3,975
Deferred revenues	$	8,429	$	(88	)	$	8,341
Income taxes payable, non-current	$	13,422	$	7		$	13,429
Other non-current liabilities	$	2,295	$	2		$	2,297
Total equity	$	46,224	$	649		$	46,873

Acquisition Related and Other Expenses

	Three Months Ended August 31,
(in millions)	2018			2017
Transitional and other employee related costs	$	14		$	9
Stock-based compensation		—			1
Professional fees and other, net		2			3
Business combination adjustments, net		(2	)		(1	)
Total acquisition related and other expenses	$	14		$	12

Non-Operating Income, net

	Three Months Ended August 31,
(in millions)	2018			2017
Interest income	$	348		$	257
Foreign currency losses, net		(34	)		(4	)
Noncontrolling interests in income		(39	)		(46	)
Other income, net		16			13
Total non-operating income, net	$	291		$	220

ACQUISITIONS (Tables)

3 Months Ended

Aug. 31, 2018

Business Combinations [Abstract]

Unaudited Pro Forma Financial Information

	Three Months Ended August 31,
(in millions, except per share data)	2018		2017
Total revenues	$	9,193	$	9,146
Net income	$	2,265	$	2,119
Basic earnings per share	$	0.58	$	0.51
Diluted earnings per share	$	0.57	$	0.49

FAIR VALUE MEASUREMENTS (Tables)

3 Months Ended

Aug. 31, 2018

Fair Value Disclosures [Abstract]

Assets and Liabilities Measured at Fair Value on a Recurring Basis

	August 31, 2018						May 31, 2018
	Fair Value Measurements Using Input Types						Fair Value Measurements Using Input Types
(in millions)	Level 1		Level 2		Total		Level 1		Level 2		Total
Assets:
Corporate debt securities and other	$	148	$	41,419	$	41,567	$	223	$	44,079	$	44,302
Commercial paper debt securities		—		1,538		1,538		—		1,647		1,647
Money market funds		3,400		—		3,400		6,500		—		6,500
Derivative financial instruments		—		16		16		—		29		29
Total assets	$	3,548	$	42,973	$	46,521	$	6,723	$	45,755	$	52,478
Liabilities:
Derivative financial instruments	$	—	$	170	$	170	$	—	$	158	$	158

INTANGIBLE ASSETS AND GOODWILL (Tables)

3 Months Ended

Aug. 31, 2018

Goodwill And Intangible Assets Disclosure [Abstract]

Intangible Assets

	Intangible Assets, Gross							Accumulated Amortization									Intangible Assets, Net
(Dollars in millions)	May 31, 2018		Additions & Adjustments, net⁽¹⁾			August 31, 2018		May 31, 2018			Expense			August 31, 2018			May 31, 2018		August 31, 2018
Developed technology	$	5,309	$	91		$	5,400	$	(2,814	)	$	(212	)	$	(3,026	)	$	2,495	$	2,374
Cloud services and license support agreements and related relationships		5,999		(29	)		5,970		(2,285	)		(192	)		(2,477	)		3,714		3,493
Other		1,622		(3	)		1,619		(1,161	)		(30	)		(1,191	)		461		428
Total intangible assets, net	$	12,930	$	59		$	12,989	$	(6,260	)	$	(434	)	$	(6,694	)	$	6,670	$	6,295

⁽¹⁾	Amounts also include any changes in intangible asset balances for the periods presented that resulted from foreign currency translations.

Estimated Future Amortization Expenses Related to Intangible Assets

Remainder of fiscal 2019	$	1,190
Fiscal 2020		1,419
Fiscal 2021		1,198
Fiscal 2022		982
Fiscal 2023		629
Fiscal 2024		388
Thereafter		489
Total intangible assets, net	$	6,295

Goodwill

(in millions)	Cloud and License			Hardware		Services			Total Goodwill, net
Balances as of May 31, 2018	$	39,600		$	2,367	$	1,788		$	43,755
Goodwill adjustments, net⁽¹⁾		(47	)		—		(6	)		(53	)
Balances as of August 31, 2018	$	39,553		$	2,367	$	1,782		$	43,702

⁽¹⁾

Pursuant to our business combinations accounting policy, we recorded goodwill adjustments for the effects on goodwill of changes to net assets acquired during the period that such a change is identified, provided that any such change is within the measurement period (up to one year from the date of the acquisition). Amounts also include any changes in goodwill balances for the period presented that resulted from foreign currency translations.

RESTRUCTURING ACTIVITIES (Tables)

3 Months Ended

Aug. 31, 2018

Restructuring And Related Activities [Abstract]

Summary of All Plans

	Accrued May 31, 2018⁽²⁾		Three Months Ended August 31, 2018										Accrued August 31, 2018⁽²⁾		Total Costs Accrued to Date		Total Expected Program Costs
(in millions)	Accrued May 31, 2018⁽²⁾		Initial Costs⁽³⁾		Adj. to Cost⁽⁴⁾			Cash Payments			Others⁽⁵⁾		Accrued August 31, 2018⁽²⁾		Total Costs Accrued to Date		Total Expected Program Costs
2019 Restructuring Plan⁽¹⁾
Cloud and license	$	—	$	58	$	—		$	(21	)	$	—	$	37	$	58	$	230
Hardware		—		22		—			(14	)		—		8		22		66
Services		—		10		—			(6	)		—		4		10		45
Other⁽⁶⁾		—		17		—			(9	)		1		9		17		91
Total 2019 Restructuring Plan	$	—	$	107	$	—		$	(50	)	$	1	$	58	$	107	$	432
Total other restructuring plans⁽⁷⁾	$	282	$	5	$	(22	)	$	(94	)	$	4	$	175
Total restructuring plans	$	282	$	112	$	(22	)	$	(144	)	$	5	$	233

⁽¹⁾	Restructuring costs recorded for individual line items primarily related to employee severance costs.

⁽²⁾	The balances at August 31, 2018 and May 31, 2018 included $219 million and $257 million, respectively, recorded in other current liabilities, and $14 million and $25 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⁾	Represents employee related severance costs for functions that are not included within our operating segments and certain other restructuring costs.

⁽⁷⁾

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 period presented but for which the periodic impact to our condensed consolidated statements of operations was not significant.

DEFERRED REVENUES (Tables)

3 Months Ended

Aug. 31, 2018

Deferred Revenue Disclosure [Abstract]

Deferred Revenues

(in millions)	August 31, 2018		May 31, 2018
Cloud services and license support	$	8,924	$	7,265
Hardware		707		645
Services		438		404
Cloud license and on-premise license		280		27
Deferred revenues, current		10,349		8,341
Deferred revenues, non-current (in other non-current liabilities)		670		625
Total deferred revenues	$	11,019	$	8,966

DERIVATIVE FINANCIAL INSTRUMENTS (Tables)

3 Months Ended

Aug. 31, 2018

Derivative Instrument Detail [Abstract]

Fair Values of Derivative and Non-Derivative Instruments Designated as Hedges in Consolidated Balance Sheets

		Fair Value as of
(in millions)	Balance Sheet Location	August 31, 2018		May 31, 2018
Derivative assets:
Interest rate swap agreements designated as fair value hedges	Other non-current assets	$	15	$	24
Cross-currency interest rate swap agreements designated as fair value hedges	Other non-current assets		1		5
Total derivative assets		$	16	$	29
Derivative liabilities:
Interest rate swap agreements designated as fair value hedges	Other current liabilities	$	4	$	7
Interest rate swap agreements designated as fair value hedges	Other non-current liabilities		49		48
Cross-currency swap agreements designated as cash flow hedges	Other non-current liabilities		117		103
Total derivative liabilities		$	170	$	158

Effects of Fair Value Hedging Relationships on Hedged Items in Condensed Consolidated Balance Sheet

(in millions)	August 31, 2018			May 31, 2018
Notes payable and other borrowings, current:
Carrying amount of hedged item	$	1,495		$	1,492
Cumulative hedging adjustments included in the carrying amount		(4	)		(7	)
Notes payable and other borrowings, non-current:
Carrying amounts of hedged items		5,570			5,584
Cumulative hedging adjustments included in the carrying amount		(34	)		(19	)

Effects of Derivative and Non-Derivative Instruments Designated as Hedges on Income

	Three Months Ended August 31,
	2018						2017
(in millions)	Non-operating income, net			Interest expense			Non-operating income, net		Interest expense
Condensed consolidated statements of income line amounts in which the hedge effects were recorded	$	291		$	(529	)	$	220	$	(469	)
Gain (loss) on hedges recognized in income:
Interest rate swaps designated as fair value hedges:
Derivative instruments	$	—		$	(7	)	$	—	$	—
Hedged items		—			7			—		—
Cross-currency interest rate swaps designated as fair value hedges:
Derivative instruments		(4	)		—			—		—
Hedged items		5			—			—		—
Cross-currency swap agreements designated as cash flow hedges:
Amount reclassified from accumulated OCI or OCL		12			—			107		—
Total gain (loss) on hedges recognized in income	$	13		$	—		$	107	$	—

Effects of Derivative and Non-Derivative Instruments Designated as Hedges on Other Comprehensive Income (OCI) or Loss (OCL)

	Three Months Ended August 31,
(in millions)	2018			2017
Cross-currency swap agreements designated as cash flow hedges	$	(14	)	$	85
Foreign currency borrowings designated as net investment hedge		—			(64	)

STOCKHOLDERS' EQUITY (Tables)

3 Months Ended

Aug. 31, 2018

Stockholders Equity Note [Abstract]

Stock-Based Compensation Expense

	Three Months Ended August 31,
(in millions)	2018		2017
Cloud services and license support	$	24	$	18
Hardware		3		3
Services		13		14
Sales and marketing		94		89
Research and development		257		234
General and administrative		45		44
Acquisition related and other		—		1
Total stock-based compensation	$	436	$	403

SEGMENT INFORMATION (Tables)

3 Months Ended

Aug. 31, 2018

Segment Reporting [Abstract]

Summary of Businesses Results

	Three Months Ended August 31,
(in millions)	2018		2017
Cloud and license:
Revenues⁽¹⁾	$	7,484	$	7,326
Cloud services and license support expenses		867		819
Sales and marketing expenses		1,744		1,677
Margin⁽²⁾	$	4,873	$	4,830
Hardware:
Revenues	$	904	$	943
Hardware products and support expenses		317		365
Sales and marketing expenses		139		174
Margin⁽²⁾	$	448	$	404
Services:
Revenues	$	813	$	860
Services expenses		676		662
Margin⁽²⁾	$	137	$	198
Totals:
Revenues⁽¹⁾	$	9,201	$	9,129
Expenses		3,743		3,697
Margin⁽²⁾	$	5,458	$	5,432

⁽¹⁾

Cloud and license revenues for management reporting included revenues related to cloud and license 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 6 for an explanation of these adjustments and the table below for a reconciliation of our total operating segment revenues to our total consolidated 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, general and administrative and certain other allocable expenses, net. 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.

Reconciliation of Total Operating Segment Revenues to Total Revenues

	Three Months Ended August 31,
(in millions)	2018			2017
Total revenues for operating segments	$	9,201		$	9,129
Cloud and license revenues⁽¹⁾		(8	)		(25	)
Total revenues	$	9,193		$	9,104

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

Total margin for operating segments	$	5,458		$	5,432
Cloud and license revenues⁽¹⁾		(8	)		(25	)
Research and development		(1,564	)		(1,572	)
General and administrative		(321	)		(319	)
Amortization of intangible assets		(434	)		(411	)
Acquisition related and other		(14	)		(12	)
Restructuring		(90	)		(124	)
Stock-based compensation for operating segments		(134	)		(124	)
Expense allocations and other, net		(115	)		(96	)
Interest expense		(529	)		(469	)
Non-operating income, net		291			220
Income before provision for income taxes	$	2,540		$	2,500

⁽¹⁾

Cloud and license revenues presented for management reporting included revenues related to cloud and license obligations that would have otherwise been recorded by the 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. See Note 6 for an explanation of these adjustments and this table for a reconciliation of our total operating segment revenues to our total consolidated revenues as reported in our condensed consolidated statements of operations.

Disaggregation of Revenue by Geography and Ecosystem

	Three Months Ended August 31,
(in millions)	2018		2017
Americas	$	5,161	$	5,098
EMEA⁽¹⁾		2,576		2,535
Asia Pacific⁽²⁾		1,456		1,471
Total revenues	$	9,193	$	9,104

⁽¹⁾	Comprised of Europe, the Middle East and Africa

⁽²⁾	The Asia Pacific region includes Japan

	Three Months Ended August 31,
(in millions)	2018		2017
Applications revenues	$	2,761	$	2,616
Platform and infrastructure revenues		4,715		4,685
Total cloud and license revenues	$	7,476	$	7,301

EARNINGS PER SHARE (Tables)

3 Months Ended

Aug. 31, 2018

Earnings Per Share [Abstract]

Earnings Per Share

	Three Months Ended August 31,
(in millions, except per share data)	2018		2017
Net income	$	2,265	$	2,144
Weighted average common shares outstanding		3,904		4,156
Dilutive effect of employee stock plans		95		128
Dilutive weighted average common shares outstanding		3,999		4,284
Basic earnings per share	$	0.58	$	0.52
Diluted earnings per share	$	0.57	$	0.50
Shares subject to anti-dilutive restricted stock-based awards and stock options excluded from calculation⁽¹⁾		81		31

⁽¹⁾	These weighted shares relate to anti-dilutive restricted service based stock-based awards and stock options (as calculated using the treasury stock method) and contingently issuable shares under PSO and PSU arrangements. Such shares could be dilutive in the future.

BASIS OF PRESENTATION AND RECENT ACCOUNTING PRONOUNCEMENTS Narrative (Details) - USD ($) $ in Millions	3 Months Ended
	Aug. 31, 2018	Aug. 31, 2017	May 31, 2018
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Operating expense	$ 6,415	$ 6,355
Non-operating income, net	291	220
Retained earnings	12,022		$ 19,111
Contract with Customer, Asset and Liability [Abstract]
Trade receivables	3,729		5,136
Contract liability (deferred revenues)	11,019		8,966
Revenues recognized included in opening deferred revenue balance	3,500
Revenue, Performance Obligation [Abstract]
Remaining Performance Obligation, Amount, Total	$ 31,300
Remaining Performance Obligation, Percentage, to be recognized in the next 12 months	64.00%
Restricted Cash Equivalents [Abstract]
Restricted cash and cash equivalent item, description	Restricted cash that was included within cash and cash equivalents as presented within our condensed consolidated balance sheets as of August 31, 2018 and May 31, 2018 and our condensed consolidated statements of cash flows for the three months ended August 31, 2018 and 2017 was nominal.
Sales of Financing Receivables [Abstract]
Sales of financing receivables	$ 822	818
ASU 2017-07 [Member]
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Operating expense		(13)
Non-operating income, net		$ (13)
ASU 2016-16 [Member]
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Prepaid assets			(110)
Retained earnings			$ (110)

BASIS OF PRESENTATION AND RECENT ACCOUNTING PRONOUNCEMENTS (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended
	Aug. 31, 2018	Aug. 31, 2017	May 31, 2018
Condensed Consolidated Statement of Operations [Abstract]
Total revenues	$ 9,193	$ 9,104
Total operating expenses	6,415	6,355
Non-operating income, net	291	220
Provision for income taxes	275	356
Net income	$ 2,265	$ 2,144
Basic earnings per share	$ 0.58	$ 0.52
Diluted earnings per share	$ 0.57	$ 0.50
Condensed Consolidated Balance Sheet [Abstract]
Trade receivables, net of allowances for doubtful accounts	$ 3,729		$ 5,136
Prepaid expenses and other current assets	3,186		3,762
Deferred tax assets	1,433		1,395
Other non-current assets	4,001		3,975
Deferred revenues	10,349		8,341
Income taxes payable, non-current	13,513		13,429
Other non-current liabilities	2,333		2,297
Total equity	38,564		46,873
Acquisition Related and Other Expenses [Abstract]
Transitional and other employee related costs	14	$ 9
Stock-based compensation	0	1
Professional fees and other, net	2	3
Business combination adjustments, net	(2)	(1)
Total acquisition related and other expenses	14	12
Non-Operating Income, net [Abstract]
Interest income	348	257
Foreign currency losses, net	(34)	(4)
Noncontrolling interests in income	(39)	(46)
Other income, net	16	13
Total non-operating income, net	$ 291	220
Adoption of Topic 606 and ASU 2017-07 [Member]
Condensed Consolidated Statement of Operations [Abstract]
Total revenues		9,104
Total operating expenses		6,355
Non-operating income, net		220
Provision for income taxes		356
Net income		$ 2,144
Basic earnings per share		$ 0.52
Diluted earnings per share		$ 0.50
Condensed Consolidated Balance Sheet [Abstract]
Trade receivables, net of allowances for doubtful accounts			5,136
Prepaid expenses and other current assets			3,762
Deferred tax assets			1,395
Other non-current assets			3,975
Deferred revenues			8,341
Income taxes payable, non-current			13,429
Other non-current liabilities			2,297
Total equity			46,873
Adoption of Topic 606 and ASU 2017-07 [Member] \| As Previously Reported [Member]
Condensed Consolidated Statement of Operations [Abstract]
Total revenues		$ 9,187
Total operating expenses		6,366
Non-operating income, net		233
Provision for income taxes		375
Net income		$ 2,210
Basic earnings per share		$ 0.53
Diluted earnings per share		$ 0.52
Condensed Consolidated Balance Sheet [Abstract]
Trade receivables, net of allowances for doubtful accounts			5,279
Prepaid expenses and other current assets			3,424
Deferred tax assets			1,491
Other non-current assets			3,487
Deferred revenues			8,429
Income taxes payable, non-current			13,422
Other non-current liabilities			2,295
Total equity			46,224
Adoption of Topic 606 and ASU 2017-07 [Member] \| Adjustments [Member]
Condensed Consolidated Statement of Operations [Abstract]
Total revenues		$ (83)
Total operating expenses		(11)
Non-operating income, net		(13)
Provision for income taxes		(19)
Net income		$ (66)
Basic earnings per share		$ (0.01)
Diluted earnings per share		$ (0.02)
Condensed Consolidated Balance Sheet [Abstract]
Trade receivables, net of allowances for doubtful accounts			(143)
Prepaid expenses and other current assets			338
Deferred tax assets			(96)
Other non-current assets			488
Deferred revenues			(88)
Income taxes payable, non-current			7
Other non-current liabilities			2
Total equity			$ 649

ACQUISITIONS Narrative (Details) - USD ($) $ in Millions		3 Months Ended
ACQUISITIONS Narrative (Details) - USD ($) $ in Millions	Mar. 28, 2018	Aug. 31, 2018	Aug. 31, 2017	May 31, 2018
Acquisition [Line Items]
Fair values of restricted stock-based awards and stock options assumed in connection with acquisitions		$ 8	$ 0
Goodwill, net		$ 43,702		$ 43,755
Aconex Limited [Member]
Acquisition [Line Items]
Acquisition completion date	Mar. 28, 2018
Total purchase price	$ 1,200
Cash portion of purchase price	1,200
Fair values of restricted stock-based awards and stock options assumed in connection with acquisitions	7
Net tangible assets (liabilities)	(16)
Intangible assets	377
Goodwill, net	$ 863
Other Fiscal 2019 and 2018 Acquisitions [Member]
Acquisition [Line Items]
Materiality of acquisition individually or in the aggregate		These acquisitions were not significant individually or in the aggregate.

ACQUISITIONS - UNAUDITED PRO FORMA FINANCIAL INFORMATION (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended
	Aug. 31, 2018	Aug. 31, 2017
Acquisitions Proforma [Abstract]
Total revenues	$ 9,193	$ 9,146
Net income	$ 2,265	$ 2,119
Basic earnings per share	$ 0.58	$ 0.51
Diluted earnings per share	$ 0.57	$ 0.49

FAIR VALUE MEASUREMENTS (Details) - USD ($) $ in Millions	Aug. 31, 2018	May 31, 2018
Assets [Abstract]
Derivative financial instruments	$ 16	$ 29
Total assets	46,521	52,478
Liabilities [Abstract]
Derivative financial instruments	170	158
Commercial Paper Debt Securities [Member]
Assets [Abstract]
Investments and cash and cash equivalents	1,538	1,647
Money Market Funds [Member]
Assets [Abstract]
Investments and cash and cash equivalents	3,400	6,500
Corporate Debt Securities and Other [Member]
Assets [Abstract]
Investments and cash and cash equivalents	41,567	44,302
Fair Value Measurements Using Input Types Level 1 [Member]
Assets [Abstract]
Derivative financial instruments	0	0
Total assets	3,548	6,723
Liabilities [Abstract]
Derivative financial instruments	0	0
Fair Value Measurements Using Input Types Level 1 [Member] \| Commercial Paper Debt Securities [Member]
Assets [Abstract]
Investments and cash and cash equivalents	0	0
Fair Value Measurements Using Input Types Level 1 [Member] \| Money Market Funds [Member]
Assets [Abstract]
Investments and cash and cash equivalents	3,400	6,500
Fair Value Measurements Using Input Types Level 1 [Member] \| Corporate Debt Securities and Other [Member]
Assets [Abstract]
Investments and cash and cash equivalents	148	223
Fair Value Measurements Using Input Types Level 2 [Member]
Assets [Abstract]
Derivative financial instruments	16	29
Total assets	42,973	45,755
Liabilities [Abstract]
Derivative financial instruments	170	158
Fair Value Measurements Using Input Types Level 2 [Member] \| Commercial Paper Debt Securities [Member]
Assets [Abstract]
Investments and cash and cash equivalents	1,538	1,647
Fair Value Measurements Using Input Types Level 2 [Member] \| Money Market Funds [Member]
Assets [Abstract]
Investments and cash and cash equivalents	0	0
Fair Value Measurements Using Input Types Level 2 [Member] \| Corporate Debt Securities and Other [Member]
Assets [Abstract]
Investments and cash and cash equivalents	$ 41,419	$ 44,079

FAIR VALUE MEASUREMENTS Narrative (Details) - USD ($) $ in Billions	3 Months Ended
	Aug. 31, 2018	May 31, 2018
Marketable security investments maturity information [Abstract]
Maturity of marketable security investments	As of August 31, 2018 and May 31, 2018, approximately 23% and 26%, respectively, of our marketable securities investments mature within one year and 77% and 74%, respectively, mature within one to five years.
Percentage of marketable securities investments mature within one year	23.00%	26.00%
Percentage of marketable securities investments mature within one to five years	77.00%	74.00%
Senior notes [Member]
Marketable security investments maturity information [Abstract]
Total debt, carrying value	$ 58.0	$ 58.0
Fair Value Measurements Using Input Types Level 2 [Member] \| Senior notes [Member]
Marketable security investments maturity information [Abstract]
Total debt, fair value	$ 58.7	$ 59.0

INTANGIBLE ASSETS (Details) - USD ($)
$ in Millions

3 Months Ended

Aug. 31, 2018

Aug. 31, 2017

May 31, 2018

Acquired Finite-Lived Intangible Assets [Line Items]

$ 12,989

$ 12,930

^[1]

59

(6,694)

(6,260)

(434)

$ (411)

Developed technology [Member]

6,295

6,670

Acquired Finite-Lived Intangible Assets [Line Items]

5,400

5,309

^[1]

91

(3,026)

(2,814)

(212)

Cloud services and license support agreements and related relationships [Member]

2,374

2,495

Acquired Finite-Lived Intangible Assets [Line Items]

5,970

5,999

^[1]

(29)

(2,477)

(2,285)

(192)

Acquired Finite-Lived Intangible Assets [Line Items]

3,493

3,714

Other [Member]

1,619

1,622

^[1]

(3)

(1,191)

(1,161)

(30)

$ 428

$ 461

[1]	Amounts also include any changes in intangible asset balances for the periods presented that resulted from foreign currency translations.

INTANGIBLE ASSETS AND GOODWILL Narrative (Details) - USD ($) $ in Millions	3 Months Ended
	Aug. 31, 2018	Aug. 31, 2017
Goodwill And Intangible Assets Disclosure [Abstract]
Amortization of intangible assets	$ 434	$ 411

INTANGIBLE ASSETS AMORTIZATION (Details) - USD ($) $ in Millions	Aug. 31, 2018	May 31, 2018
Finite lived intangible assets future amortization expense [Abstract]
Remainder of fiscal 2019	$ 1,190
Fiscal 2020	1,419
Fiscal 2021	1,198
Fiscal 2022	982
Fiscal 2023	629
Fiscal 2024	388
Thereafter	489
Intangible Assets, Net	$ 6,295	$ 6,670

GOODWILL (Details)
$ in Millions

3 Months Ended

Aug. 31, 2018

USD ($)

$ 43,755

(53)

^[1]

Cloud and License [Member]

43,702

39,600

(47)

^[1]

39,553

Hardware [Member]

2,367

0

^[1]

2,367

Services [Member]

1,788

(6)

^[1]

$ 1,782

[1]

Pursuant to our business combinations accounting policy, we recorded goodwill adjustments for the effects on goodwill of changes to net assets acquired during the period that such a change is identified, provided that any such change is within the measurement period (up to one year from the date of the acquisition). Amounts also include any changes in goodwill balances for the period presented that resulted from foreign currency translations.

RESTRUCTURING ACTIVITIES (Details) - USD ($)
$ in Millions

3 Months Ended

Aug. 31, 2018

Aug. 31, 2017

Restructuring expenses

$ 90

$ 124

^[1],[2]

282

^[1],[3]

112

^[1],[4]

(22)

^[1]

(144)

^[1],[5]

5

Fiscal 2019 Oracle Restructuring [Member]

^[1],[2]

233

Remaining expenses to incur

^[1]

432

Restructuring expenses

107

$ 325

Expected completion date

May 31, 2020

^[1],[2]

$ 0

^[1],[3]

107

^[1],[4]

0

^[1]

(50)

^[1],[5]

1

^[1],[2]

58

Fiscal 2019 Oracle Restructuring [Member] | Other [Member]

^[1]

107

^[1],[6]

91

^[1],[2],[6]

0

^[1],[3],[6]

17

^[1],[4],[6]

0

^[1],[6]

(9)

^[1],[5],[6]

1

^[1],[2],[6]

9

Fiscal 2019 Oracle Restructuring [Member] | Cloud and license [Member] | Operating Segments [Member]

^[1],[6]

17

^[1]

230

^[1],[2]

0

^[1],[3]

58

^[1],[4]

0

^[1]

(21)

^[1],[5]

0

^[1],[2]

37

Fiscal 2019 Oracle Restructuring [Member] | Hardware [Member] | Operating Segments [Member]

^[1]

58

^[1]

66

^[1],[2]

0

^[1],[3]

22

^[1],[4]

0

^[1]

(14)

^[1],[5]

0

^[1],[2]

8

Fiscal 2019 Oracle Restructuring [Member] | Services [Member] | Operating Segments [Member]

^[1]

22

^[1]

45

^[1],[2]

0

^[1],[3]

10

^[1],[4]

0

^[1]

(6)

^[1],[5]

0

^[1],[2]

4

Other Restructuring Plans [Member]

^[1]

10

^[1],[2],[7]

282

^[1],[3],[7]

5

^[1],[4],[7]

(22)

^[1],[7]

(94)

^[1],[5],[7]

4

^[1],[2],[7]

$ 175

[1]	Restructuring costs recorded for individual line items primarily related to employee severance costs.
[2]	The balances at August 31, 2018 and May 31, 2018 included $219 million and $257 million, respectively, recorded in other current liabilities, and $14 million and $25 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]	Represents employee related severance costs for functions that are not included within our operating segments and certain other restructuring costs.
[7]	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 period presented but for which the periodic impact to our condensed consolidated statements of operations was not significant

RESTRUCTURING ACTIVITIES Narrative (Details) - USD ($) $ in Millions	Aug. 31, 2018	May 31, 2018
Restructuring Reserve [Abstract]
Accrued restructuring liabilities, current (in other current liabilities)	$ 219	$ 257
Accrued restructuring liabilities, non-current (in other non-current liabilities)	$ 14	$ 25

DEFERRED REVENUES (Details) - USD ($) $ in Millions	Aug. 31, 2018	May 31, 2018
Deferred Revenues [Line Items]
Deferred revenues, current	$ 10,349	$ 8,341
Deferred revenues, non-current (in other non-current liabilities)	670	625
Total deferred revenues	11,019	8,966
Cloud services and license support [Member]
Deferred Revenues [Line Items]
Deferred revenues, current	8,924	7,265
Hardware [Member]
Deferred Revenues [Line Items]
Deferred revenues, current	707	645
Services [Member]
Deferred Revenues [Line Items]
Deferred revenues, current	438	404
Cloud license and on-premise license [Member]
Deferred Revenues [Line Items]
Deferred revenues, current	$ 280	$ 27

DERIVATIVE FINANCIAL INSTRUMENTS Narrative (Details) - USD ($) $ in Billions	3 Months Ended
	Aug. 31, 2018	May 31, 2018
Foreign Currency Forward Contracts Not Designated as Hedges [Abstract]
Description of foreign currency forward contracts not designated as hedges	We also held certain foreign currency contracts that were not designated as hedges pursuant to ASC 815. As of August 31, 2018 and May 31, 2018, the notional amounts of such forward contracts we held to purchase U.S. Dollars in exchange for other major international currencies were $2.9 billion and $3.4 billion, respectively, and the notional amount of forward contracts we held to sell U.S. Dollars in exchange for other major international currencies were $1.5 billion and $1.4 billion, respectively. The fair values of our outstanding foreign currency forward contracts were nominal as of August 31, 2018 and May 31, 2018.
Forward contracts held to purchase U.S. Dollars [Member] \| Foreign Currency Forward Contracts Not Designated as Hedges [Member]
Foreign Currency Forward Contracts Not Designated as Hedges (Narrative) [Abstract]
Notional amounts of forward contracts	$ 2.9	$ 3.4
Forward contracts held to sell U.S. Dollars [Member] \| Foreign Currency Forward Contracts Not Designated as Hedges [Member]
Foreign Currency Forward Contracts Not Designated as Hedges (Narrative) [Abstract]
Notional amounts of forward contracts	$ 1.5	$ 1.4

DERIVATIVE FINANCIAL INSTRUMENTS EFFECTS ON BALANCE SHEET (Details) - USD ($) $ in Millions	Aug. 31, 2018	May 31, 2018
Derivative assets:
Total derivative assets	$ 16	$ 29
Derivative liabilities:
Total derivative liabilities	170	158
Fair value hedges [Member] \| Notes payable and other borrowings, current [Member]
Effects of fair value hedging relationship on hedged item in condensed consolidated balance sheet [Abstract]
Carrying amount of hedged item	1,495	1,492
Cumulative hedging adjustments included in the carrying amount	(4)	(7)
Fair value hedges [Member] \| Notes payable and other borrowings, non-current [Member]
Effects of fair value hedging relationship on hedged item in condensed consolidated balance sheet [Abstract]
Carrying amount of hedged item	5,570	5,584
Cumulative hedging adjustments included in the carrying amount	(34)	(19)
Fair value hedges [Member] \| Interest rate swap agreements [Member] \| Other current liabilities [Member]
Derivative assets:
Total derivative assets	15	24
Fair value hedges [Member] \| Interest rate swap agreements [Member] \| Other non-current assets [Member]
Derivative liabilities:
Total derivative liabilities	4	7
Fair value hedges [Member] \| Interest rate swap agreements [Member] \| Other non-current liabilities [Member]
Derivative liabilities:
Total derivative liabilities	49	48
Fair value hedges [Member] \| Cross-Currency Interest Rate Swap [Member] \| Other current liabilities [Member]
Derivative assets:
Total derivative assets	1	5
Cash flow hedges [Member] \| Cross-currency swap agreements [Member] \| Other non-current liabilities [Member]
Derivative liabilities:
Total derivative liabilities	$ 117	$ 103

DERIVATIVE FINANCIAL INSTRUMENTS EFFECTS ON EARNINGS AND AOCL (Details) - USD ($) $ in Millions	3 Months Ended
	Aug. 31, 2018	Aug. 31, 2017
Derivative [Line Items]
Non-operating income, net	$ 291	$ 220
Interest expense	(529)	(469)
Non-Operating Income, Net [Member]
Derivative [Line Items]
Non-operating income, net	291	220
Effects of derivative instruments designated as hedges on income [Abstract]:
Total gain (loss) on hedges recognized in income	13	107
Interest Expense [Member]
Derivative [Line Items]
Interest expense	(529)	(469)
Effects of derivative instruments designated as hedges on income [Abstract]:
Total gain (loss) on hedges recognized in income	0	0
Fair value hedges [Member] \| Non-Operating Income, Net [Member] \| Interest Rate Swaps [Member]
Effects of derivative instruments designated as hedges on income [Abstract]:
Derivative instruments	0	0
Hedged items	0	0
Fair value hedges [Member] \| Non-Operating Income, Net [Member] \| Cross-Currency Interest Rate Swap [Member]
Effects of derivative instruments designated as hedges on income [Abstract]:
Derivative instruments	(4)	0
Hedged items	5	0
Fair value hedges [Member] \| Interest Expense [Member] \| Interest Rate Swaps [Member]
Effects of derivative instruments designated as hedges on income [Abstract]:
Derivative instruments	(7)	0
Hedged items	7	0
Fair value hedges [Member] \| Interest Expense [Member] \| Cross-Currency Interest Rate Swap [Member]
Effects of derivative instruments designated as hedges on income [Abstract]:
Derivative instruments	0	0
Hedged items	0	0
Cash flow hedges [Member] \| Cross-Currency Swap [Member]
Effects of derivative and non-derivative instruments on other comprehensive income (OCI) or loss (OCL) [Abstract]
Cross-currency swap agreements designated as cash flow hedges	(14)	85
Cash flow hedges [Member] \| Non-Operating Income, Net [Member] \| Cross-Currency Swap [Member]
Effects of derivative instruments designated as hedges on income [Abstract]:
Amount reclassified from accumulated OCI or OCL	12	107
Cash flow hedges [Member] \| Interest Expense [Member] \| Cross-Currency Swap [Member]
Effects of derivative instruments designated as hedges on income [Abstract]:
Amount reclassified from accumulated OCI or OCL	0	0
Net Investment Hedge [Member] \| Foreign Currency Borrowings [Member]
Effects of derivative and non-derivative instruments on other comprehensive income (OCI) or loss (OCL) [Abstract]
Foreign currency borrowings designated as net investment hedge	$ 0	$ (64)

STOCKHOLDERS' EQUITY Narrative (Details) - USD ($) $ / shares in Units, shares in Millions		3 Months Ended
	Sep. 14, 2018	Aug. 31, 2018	Aug. 31, 2017	Sep. 17, 2018
Stock Repurchases [Abstract]
Amount available for future repurchases		$ 7,800,000,000
Repurchases of common stock (in shares)		212.2	10.2
Repurchased amount		$ 10,000,000,000	$ 500,000,000
Repurchased shares that were not settled (in shares)		4.4
Repurchased amount that was not settled		$ 213,000,000
Dividends on Common Stock [Abstract]
Dividends per share, declared and paid (in dollars per share)		$ 0.19	$ 0.19
Stock-Based Compensation Expense and Valuations of Stock Awards [Abstract]
Restricted stock-based units granted (in shares)		38.0
Stock options granted (in shares)		7.0
Forfeitures and cancellations (in shares)		3.0
Subsequent Event [Member]
Stock Repurchases [Abstract]
Approved expansion of stock repurchase program, additional authorized amount				$ 12,000,000,000
Dividends on Common Stock [Abstract]
Dividends declared per share of outstanding common stock (in dollars per share)	$ 0.19
Dividend payable date	Oct. 30, 2018
Dividend record date	Oct. 16, 2018

STOCKHOLDERS' EQUITY (Details) - USD ($) $ in Millions	3 Months Ended
STOCKHOLDERS' EQUITY (Details) - USD ($) $ in Millions	Aug. 31, 2018	Aug. 31, 2017
Stock-Based Compensation Expense and Valuations of Stock Awards [Abstract]
Total stock-based compensation	$ 436	$ 403
Cloud services and license support [Member]
Stock-Based Compensation Expense and Valuations of Stock Awards [Abstract]
Total stock-based compensation	24	18
Hardware [Member]
Stock-Based Compensation Expense and Valuations of Stock Awards [Abstract]
Total stock-based compensation	3	3
Services [Member]
Stock-Based Compensation Expense and Valuations of Stock Awards [Abstract]
Total stock-based compensation	13	14
Sales and marketing [Member]
Stock-Based Compensation Expense and Valuations of Stock Awards [Abstract]
Total stock-based compensation	94	89
Research and development [Member]
Stock-Based Compensation Expense and Valuations of Stock Awards [Abstract]
Total stock-based compensation	257	234
General and administrative [Member]
Stock-Based Compensation Expense and Valuations of Stock Awards [Abstract]
Total stock-based compensation	45	44
Acquisition related and other [Member]
Stock-Based Compensation Expense and Valuations of Stock Awards [Abstract]
Total stock-based compensation	$ 0	$ 1

INCOME TAXES (Details) - USD ($) $ in Millions	3 Months Ended
INCOME TAXES (Details) - USD ($) $ in Millions	Aug. 31, 2018	Aug. 31, 2017	May 31, 2018
Income Tax Examination [Line Items]
Effective income tax rate	10.80%	14.20%
Federal statutory income tax rate, percent	21.00%
Income tax benefit, adjustments to estimate of U.S. Tax Cuts and Jobs Act of 2017 one-time transition tax	$ 153
Deferred Tax Assets, Net [Abstract]
Net deferred tax assets	$ 1,400		$ 1,300
Domestic [Member]
Income Tax Examinations [Abstract]
Income tax examinations	Domestically, U.S. federal and state taxing authorities are currently examining income tax returns of Oracle and various acquired entities for years through fiscal 2017. Our U.S. federal income tax returns have been examined for all years prior to fiscal 2007, and we are no longer subject to audit for those periods. Our U.S. state income tax returns, with some exceptions, have been examined for all years prior to fiscal 2004, and we are no longer subject to audit for those periods.
Foreign [Member]
Income Tax Examinations [Abstract]
Income tax examinations	Internationally, tax authorities for numerous non-U.S. jurisdictions are also examining returns affecting our unrecognized tax benefits. With some exceptions, we are generally no longer subject to tax examinations in non-U.S. jurisdictions for years prior to fiscal 1997.

SEGMENT INFORMATION Narrative (Details)	3 Months Ended
SEGMENT INFORMATION Narrative (Details)	Aug. 31, 2018 Business Segment
Segment reporting information [Line Items]
Number of businesses \| Business	3
Cloud and License [Member]
Segment reporting information [Line Items]
Number of operating segments	1
Hardware [Member]
Segment reporting information [Line Items]
Number of operating segments	1
Services [Member]
Segment reporting information [Line Items]
Number of operating segments	1

SEGMENT INFORMATION (Details) - USD ($)
$ in Millions

3 Months Ended

Aug. 31, 2018

Aug. 31, 2017

Cloud services and license support expenses

$ 9,193

$ 9,104

^[1]

913

857

Sales and marketing expenses

^[1]

2,039

1,989

Total for operating segments [Member]

5,458

5,432

^[2]

9,201

9,129

Expenses

3,743

3,697

Total for operating segments [Member] | Cloud and License [Member]

^[3]

5,458

5,432

Cloud services and license support expenses

^[2]

7,484

7,326

867

819

Sales and marketing expenses

1,744

1,677

Total for operating segments [Member] | Hardware [Member]

^[3]

4,873

4,830

Hardware products and support expenses

904

943

317

365

Sales and marketing expenses

139

174

Total for operating segments [Member] | Services [Member]

^[3]

448

404

813

860

Services expenses

676

662

Reconciliation of Operating Segment Revenues to Revenues [Abstract]

^[3]

$ 137

$ 198

[1]	Exclusive of amortization of intangible assets, which is shown separately.
[2]	Cloud and license revenues for management reporting included revenues related to cloud and license 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 6 for an explanation of these adjustments and the table below for a reconciliation of our total operating segment revenues to our total consolidated revenues as reported in our condensed consolidated statements of operations.
[3]	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, net. 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.

SEGMENT INFORMATION RECONCILIATION (Details) - USD ($)
$ in Millions

3 Months Ended

Aug. 31, 2018

Aug. 31, 2017

Reconciliation of Total Operating Segment Margin to Income Before Provision for Income Taxes [Abstract]

$ 9,193

$ 9,104

Total margin for operating segments

5,458

5,432

General and administrative

9,193

9,104

Research and development

(1,564)

(1,572)

(321)

(319)

Amortization of intangible assets

(434)

(411)

Acquisition related and other

(14)

(12)

Restructuring

(90)

(124)

Stock-based compensation for operating segments

(134)

(124)

Expense allocations and other, net

(115)

(96)

Interest expense

(529)

(469)

Non-operating income, net

291

220

Income before provision for income taxes

2,540

2,500

Cloud and License Revenues [Member]

Reconciliation of Operating Segment Revenues to Revenues [Abstract]

Reconciliation of Total Operating Segment Margin to Income Before Provision for Income Taxes [Abstract]

^[1]

(8)

(25)

Total for operating segments [Member]

^[1]

(8)

(25)

Reconciliation of Operating Segment Revenues to Revenues [Abstract]

Reconciliation of Total Operating Segment Margin to Income Before Provision for Income Taxes [Abstract]

9,201

9,129

$ 9,201

$ 9,129

[1]

Cloud and license revenues presented for management reporting included revenues related to cloud and license obligations that would have otherwise been recorded by the 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. See Note 6 for an explanation of these adjustments and this table for a reconciliation of our total operating segment revenues to our total consolidated revenues as reported in our condensed consolidated statements of operations.

SUMMARY OF TOTAL REVENUES BY GEOGRAPHIC REGION (Details) - USD ($)
$ in Millions

3 Months Ended

Aug. 31, 2018

Aug. 31, 2017

$ 9,193

$ 9,104

Americas [Member]

5,161

5,098

EMEA [Member]

^[1]

2,576

2,535

Asia Pacific [Member]

Weighted average common shares outstanding

^[2]

$ 1,456

$ 1,471

[1]	Comprised of Europe, the Middle East and Africa
[2]	The Asia Pacific region includes Japan

SUMMARY OF CLOUD AND LICENSE BUSINESS REVENUES BY ECOSYSTEM (Details) - USD ($) $ in Millions	3 Months Ended
	Aug. 31, 2018	Aug. 31, 2017
Disaggregation of Revenue [Line Items]
Total cloud and license revenues	$ 9,193	$ 9,104
Applications Revenues [Member]
Disaggregation of Revenue [Line Items]
Total cloud and license revenues	2,761	2,616
Platform and infrastructure [Member]
Disaggregation of Revenue [Line Items]
Total cloud and license revenues	4,715	4,685
Ecosystem [Member]
Disaggregation of Revenue [Line Items]
Total cloud and license revenues	$ 7,476	$ 7,301

EARNINGS PER SHARE (Details) - USD ($)
$ / shares in Units, shares in Millions, $ in Millions

3 Months Ended

Aug. 31, 2018

Aug. 31, 2017

Earnings Per Share [Abstract]

Net income

$ 2,265

$ 2,144

3,904

4,156

Dilutive effect of employee stock plans

95

128

Dilutive weighted average common shares outstanding

3,999

4,284

Basic earnings per share

$ 0.58

$ 0.52

Diluted earnings per share

$ 0.57

$ 0.50

Shares subject to anti-dilutive restricted stock-based awards and stock options excluded from calculation

^[1]

81

31

[1]	These weighted shares relate to anti-dilutive restricted service based stock-based awards and stock options (as calculated using the treasury stock method) and contingently issuable shares under PSO and PSU arrangements. Such shares could be dilutive in the future.

The amount of net income (loss) for the period per each share of common stock or unit outstanding during the reporting period.

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The amount of net income (loss) for the period available to each share of common stock or common unit outstanding during the reporting period and to each share or unit that would have been outstanding assuming the issuance of common shares or units for all dilutive potential common shares or units outstanding during the reporting period.

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