ORACLE CORP, 10-K filed on 6/20/2023
Annual Report
v3.23.2
DOCUMENT AND ENTITY INFORMATION - USD ($)
 12 Months Ended
May 31, 2023
Jun. 12, 2023
Nov. 30, 2022
Document Information [Line Items]      
Document Type 10-K    
Amendment Flag false    
Document Period End Date May 31, 2023    
Document Fiscal Period Focus FY    
Document Fiscal Year Focus 2023    
Entity Registrant Name Oracle Corporation    
Entity Central Index Key 0001341439    
Entity Current Reporting Status Yes    
Entity Voluntary Filers No    
Current Fiscal Year End Date --05-31    
Entity Filer Category Large Accelerated Filer    
Entity Well-known Seasoned Issuer Yes    
Entity Small Business false    
Entity Emerging Growth Company false    
Entity Shell Company false    
Entity Common Stock, Shares Outstanding (in shares)   2,714,259,000  
Entity Public Float (in dollars)     $ 129,615,142,000
Entity File Number 001-35992    
Entity Tax Identification Number 54-2185193    
Entity Address, Address Line One 2300 Oracle Way    
Entity Address, City or Town Austin    
Entity Address, State or Province TX    
Entity Address, Postal Zip Code 78741    
City Area Code 737    
Local Phone Number 867-1000    
Entity Interactive Data Current Yes    
ICFR Auditor Attestation Flag true    
Entity Incorporation, State or Country Code DE    
Document Annual Report true    
Document Transition Report false    
Auditor Firm ID 42    
Auditor Name Ernst & Young LLP    
Auditor Location San Jose, California    
Documents Incorporated by Reference

Portions of the registrant's definitive proxy statement relating to its 2023 annual meeting of stockholders are incorporated by reference into Part III of this Annual Report on Form 10-K where indicated. Such proxy statement will be filed with the U.S. Securities and Exchange Commission within 120 days of the registrant’s fiscal year ended May 31, 2023.

    
Common Stock [Member]      
Document Information [Line Items]      
Title of 12(b) Security Common Stock, par value $0.01 per share    
Trading Symbol ORCL    
Security Exchange Name NYSE    
3.125% senior notes due July 2025 [Member]      
Document Information [Line Items]      
Title of 12(b) Security 3.125% senior notes due July 2025    
Security Exchange Name NYSE    
No Trading Symbol Flag true    
v3.23.2
CONSOLIDATED BALANCE SHEETS - USD ($)
$ in Millions
May 31, 2023
May 31, 2022
Current assets:    
Cash and cash equivalents $ 9,765 $ 21,383
Marketable securities 422 519
Trade receivables, net of allowances for credit losses of $428 and $362 as of May 31, 2023 and May 31, 2022, respectively 6,915 5,953
Prepaid expenses and other current assets 3,902 3,778
Total current assets 21,004 31,633
Non-current assets:    
Property, plant and equipment, net 17,069 9,716
Intangible assets, net 9,837 1,440
Goodwill, net 62,261 43,811
Deferred tax assets 12,226 12,782
Other non-current assets 11,987 9,915
Total non-current assets 113,380 77,664
Total assets 134,384 109,297
Current liabilities:    
Notes payable and other borrowings, current 4,061 3,749
Accounts payable 1,204 1,317
Accrued compensation and related benefits 2,053 1,944
Deferred revenues 8,970 8,357
Other current liabilities 6,802 4,144
Total current liabilities 23,090 19,511
Non-current liabilities:    
Notes payable and other borrowings, non-current 86,420 72,110
Income taxes payable 11,077 12,210
Deferred tax liabilities 5,772 6,031
Other non-current liabilities 6,469 5,203
Total non-current liabilities 109,738 95,554
Commitments and contingencies
Preferred stock, $0.01 par value—authorized: 1.0 shares; outstanding: none 0 0
Common stock, $0.01 par value and additional paid in capital authorized: 11,000 shares; outstanding: 2,713 shares and 2,665 shares as of May 31, 2023 and 2022, respectively 30,215 26,808
Accumulated deficit (27,620) (31,336)
Accumulated other comprehensive loss (1,522) (1,692)
Total Oracle Corporation stockholders' equity (deficit) 1,073 (6,220)
Noncontrolling interests 483 452
Total stockholders' equity (deficit) 1,556 (5,768)
Total liabilities and stockholders' equity (deficit) $ 134,384 $ 109,297
v3.23.2
CONSOLIDATED BALANCE SHEETS PARENTHETICAL - USD ($)
shares in Millions, $ in Millions
May 31, 2023
May 31, 2022
Statement Of Financial Position [Abstract]    
Allowance for credit losses $ 428 $ 362
Preferred stock par value per share $ 0.01 $ 0.01
Preferred stock shares authorized 1.0 1.0
Preferred stock shares outstanding 0.0 0.0
Common stock par value per share $ 0.01 $ 0.01
Common stock shares authorized 11,000.0 11,000.0
Common stock shares outstanding 2,713.0 2,665.0
v3.23.2
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)
shares in Millions, $ in Millions
 12 Months Ended
May 31, 2023
May 31, 2022
May 31, 2021
Revenues:      
Cloud services and license support $ 35,307 $ 30,174 $ 28,700
Cloud license and on-premise license 5,779 5,878 5,399
Hardware 3,274 3,183 3,359
Services 5,594 3,205 3,021
Total revenues 49,954 42,440 40,479
Operating expenses:      
Cloud services and license support [1] 7,763 5,213 4,353
Hardware [1] 1,040 972 972
Services [1] 4,761 2,692 2,530
Sales and marketing [1] 8,833 8,047 7,682
Research and development 8,623 7,219 6,527
General and administrative 1,579 1,317 1,254
Amortization of intangible assets 3,582 1,150 1,379
Acquisition related and other 190 4,713 138
Restructuring 490 191 431
Total operating expenses 36,861 31,514 25,266
Operating income 13,093 10,926 15,213
Interest expense (3,505) (2,755) (2,496)
Non-operating (expenses) income, net (462) (522) 282
Income before income taxes 9,126 7,649 12,999
(Provision for) benefit from income taxes (623) (932) 747
Net income $ 8,503 $ 6,717 $ 13,746
Earnings per share:      
Basic $ 3.15 $ 2.49 $ 4.67
Diluted $ 3.07 $ 2.41 $ 4.55
Weighted average common shares outstanding:      
Basic 2,696 2,700 2,945
Diluted 2,766 2,786 3,022
[1] Exclusive of amortization of intangible assets, which is shown separately.
v3.23.2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($)
$ in Millions
 12 Months Ended
May 31, 2023
May 31, 2022
May 31, 2021
Statement Of Income And Comprehensive Income [Abstract]      
Net income $ 8,503 $ 6,717 $ 13,746
Other comprehensive income (loss), net of tax:      
Net foreign currency translation (losses) gains (204) (707) 479
Net unrealized gains on defined benefit plans 271 190 71
Other, net 103 0 (9)
Total other comprehensive income (loss), net 170 (517) 541
Comprehensive income $ 8,673 $ 6,200 $ 14,287
v3.23.2
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) - USD ($)
shares in Millions, $ in Millions
 12 Months Ended
May 31, 2023
May 31, 2022
May 31, 2021
Statement [Line Items]      
Balances $ (5,768) $ 5,952 $ 12,717
Beginning common stock shares outstanding 2,665.0    
Common stock issued under stock-based compensation plans $ 1,019 318 1,658
Common stock issued under stock purchase plans 173 164 128
Assumption of stock-based compensation plan awards in connection with acquisitions $ 55    
Assumption of stock-based compensation plan awards in connection with acquisitions, Shares 0.0    
Stock-based compensation $ 3,547 2,613 1,837
Repurchases of common stock $ (1,286) $ (16,200) $ (21,000)
Repurchases of common stock, Shares (17.0) (185.8) (329.2)
Shares repurchased for tax withholdings upon vesting of restricted stock-based awards $ (1,203) $ (1,093) $ (666)
Cash dividends declared (3,668) (3,457) (3,063)
Other, net $ (115) $ (399) $ (128)
Other, net, Shares 0.0 0.0 0.0
Other comprehensive income (loss), net $ 134 $ (567) $ 543
Net income 8,668 6,901 13,926
Balances $ 1,556 $ (5,768) 5,952
Ending common stock shares outstanding 2,713.0 2,665.0  
Common Stock and Additional Paid in Capital      
Statement [Line Items]      
Balances $ 26,808 $ 26,533 $ 26,486
Beginning common stock shares outstanding 2,665.0 2,814.0 3,067.0
Common stock issued under stock-based compensation plans $ 1,019 $ 318 $ 1,658
Common stock issued under stock-based compensation plans, Shares 79.0 48.0 86.0
Common stock issued under stock purchase plans $ 173 $ 164 $ 128
Common stock issued under stock purchase plans, Shares 2.0 2.0 2.0
Assumption of stock-based compensation plan awards in connection with acquisitions $ 55    
Stock-based compensation 3,547 $ 2,613 $ 1,837
Repurchases of common stock $ (166) $ (1,723) $ (2,893)
Repurchases of common stock, Shares (17.0) (186.0) (329.0)
Shares repurchased for tax withholdings upon vesting of restricted stock-based awards $ (1,203) $ (1,093) $ (666)
Shares repurchased for tax withholdings upon vesting of restricted stock-based awards, Shares (16.0) (13.0) (12.0)
Cash dividends declared $ 0 $ 0 $ 0
Other, net (18) (4) (17)
Net income 0 0 0
Balances $ 30,215 $ 26,808 $ 26,533
Ending common stock shares outstanding 2,713.0 2,665.0 2,814.0
Accumulated Deficit      
Statement [Line Items]      
Balances $ (31,336) $ (20,120) $ (12,696)
Common stock issued under stock-based compensation plans 0 0 0
Common stock issued under stock purchase plans 0 0 0
Assumption of stock-based compensation plan awards in connection with acquisitions 0    
Stock-based compensation 0 0 0
Repurchases of common stock (1,120) (14,477) (18,107)
Shares repurchased for tax withholdings upon vesting of restricted stock-based awards 0 0 0
Cash dividends declared (3,668) (3,457) (3,063)
Other, net 1 1 0
Net income 8,503 6,717 13,746
Balances (27,620) (31,336) (20,120)
Accumulated Other Comprehensive Loss      
Statement [Line Items]      
Balances (1,692) (1,175) (1,716)
Common stock issued under stock-based compensation plans 0 0 0
Common stock issued under stock purchase plans 0 0 0
Assumption of stock-based compensation plan awards in connection with acquisitions 0    
Stock-based compensation 0 0 0
Repurchases of common stock 0 0 0
Shares repurchased for tax withholdings upon vesting of restricted stock-based awards 0 0 0
Cash dividends declared 0 0 0
Other, net 0 0 0
Other comprehensive income (loss), net 170 (517) 541
Net income 0 0 0
Balances (1,522) (1,692) (1,175)
Total Oracle Corporation Stockholders' Equity (Deficit)      
Statement [Line Items]      
Balances (6,220) 5,238 12,074
Common stock issued under stock-based compensation plans 1,019 318 1,658
Common stock issued under stock purchase plans 173 164 128
Assumption of stock-based compensation plan awards in connection with acquisitions 55    
Stock-based compensation 3,547 2,613 1,837
Repurchases of common stock (1,286) (16,200) (21,000)
Shares repurchased for tax withholdings upon vesting of restricted stock-based awards (1,203) (1,093) (666)
Cash dividends declared (3,668) (3,457) (3,063)
Other, net (17) (3) (17)
Other comprehensive income (loss), net 170 (517) 541
Net income 8,503 6,717 13,746
Balances 1,073 (6,220) 5,238
Noncontrolling Interests      
Statement [Line Items]      
Balances 452 714 643
Common stock issued under stock-based compensation plans 0 0 0
Common stock issued under stock purchase plans 0 0 0
Assumption of stock-based compensation plan awards in connection with acquisitions 0    
Stock-based compensation 0 0 0
Repurchases of common stock 0 0 0
Shares repurchased for tax withholdings upon vesting of restricted stock-based awards 0 0 0
Cash dividends declared 0 0 0
Other, net (98) (396) (111)
Other comprehensive income (loss), net (36) (50) 2
Net income 165 184 180
Balances $ 483 $ 452 $ 714
v3.23.2
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) PARENTHETICAL - $ / shares
 12 Months Ended
May 31, 2023
May 31, 2022
May 31, 2021
Increase (Decrease) in Stockholders' Equity [Roll Forward]      
Dividends declared per common share (in dollars per share) $ 1.36 $ 1.28 $ 1.04
v3.23.2
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)
$ in Millions
 12 Months Ended
May 31, 2023
May 31, 2022
May 31, 2021
Cash flows from operating activities:      
Net income $ 8,503 $ 6,717 $ 13,746
Adjustments to reconcile net income to net cash provided by operating activities:      
Depreciation 2,526 1,972 1,537
Amortization of intangible assets 3,582 1,150 1,379
Deferred income taxes (2,167) (1,146) (2,425)
Stock-based compensation 3,547 2,613 1,837
Other, net 661 220 (39)
Changes in operating assets and liabilities, net of effects from acquisitions:      
(Increase) decrease in trade receivables, net (151) (874) 333
Decrease in prepaid expenses and other assets 317 11 622
Decrease in accounts payable and other liabilities (281) (733) (23)
Decrease in income taxes payable (153) (398) (1,485)
Increase in deferred revenues 781 7 405
Net cash provided by operating activities 17,165 9,539 15,887
Cash flows from investing activities:      
Purchases of marketable securities and other investments (1,181) (10,272) (37,982)
Proceeds from sales and maturities of marketable securities and other investments 1,113 26,151 27,060
Acquisitions, net of cash acquired (27,721) (148) (41)
Capital expenditures (8,695) (4,511) (2,135)
Net cash (used for) provided by investing activities (36,484) 11,220 (13,098)
Cash flows from financing activities:      
Payments for repurchases of common stock (1,300) (16,248) (20,934)
Proceeds from issuances of common stock 1,192 482 1,786
Shares repurchased for tax withholdings upon vesting of restricted stock-based awards (1,203) (1,093) (666)
Payments of dividends to stockholders (3,668) (3,457) (3,063)
Proceeds from issuances of commercial paper, net of repayments 500 0 0
Proceeds from issuances of senior notes and other borrowings, net of issuance costs 33,494 0 14,934
Repayments of senior notes and other borrowings (21,050) (8,250) (2,631)
Other, net (55) (560) 196
Net cash provided by (used for) financing activities 7,910 (29,126) (10,378)
Effect of exchange rate changes on cash and cash equivalents (209) (348) 448
Net decrease in cash and cash equivalents (11,618) (8,715) (7,141)
Cash and cash equivalents at beginning of period 21,383 30,098 37,239
Cash and cash equivalents at end of period 9,765 21,383 30,098
Non-cash investing and financing activities:      
Fair values of stock awards assumed in connection with acquisitions 55 0 0
Supplemental schedule of cash flow data:      
Cash paid for income taxes 3,009 2,567 3,189
Cash paid for interest $ 3,250 $ 2,735 $ 2,408
v3.23.2
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
 12 Months Ended
May 31, 2023
Organization Consolidation And Presentation Of Financial Statements [Abstract]  
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
1.
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

Oracle Corporation provides products and services that substantially address all aspects of enterprise information technology (IT) environments, including applications and infrastructure technologies. We deliver our products and services to customers worldwide through a variety of flexible and interoperable IT deployment models. These models include on-premise, cloud-based and hybrid deployments (an approach that combines both on-premise and cloud based deployments). Oracle Cloud Software-as-a-Service and Oracle Cloud Infrastructure (SaaS and OCI, respectively, and collectively, Oracle Cloud Services) offerings provide comprehensive and integrated applications and infrastructure services delivered via various cloud delivery models enabling our customers to choose the best option that meets their specific business needs. Customers may also elect to purchase Oracle software licenses and hardware products and related services to manage their own cloud-based or on-premise IT environments. Customers that purchase our software licenses may elect to purchase license support contracts, which provide our customers with rights to unspecified license upgrades and maintenance releases issued during the support period as well as technical support assistance. Customers that purchase our hardware products may elect to purchase hardware support contracts, which provide customers with software updates and can include product repairs, maintenance services, and technical support services. We also offer customers a broad set of services offerings that are designed to improve customer utilization of their investments in Oracle applications and infrastructure technologies.

Oracle Corporation conducts business globally and was incorporated in 2005 as a Delaware corporation and is the successor to operations originally begun in June 1977.

Basis of Financial Statements

The consolidated financial statements include our accounts and the accounts of our wholly- and majority-owned subsidiaries. Noncontrolling interest positions of certain of our consolidated entities are reported as a separate component of consolidated equity from the equity attributable to Oracle’s stockholders for all periods presented. The noncontrolling interests in our net income were not significant to our consolidated results for the periods presented and therefore have not been presented separately and instead are included as a component of non-operating expenses or income, net in our consolidated statements of operations. Intercompany transactions and balances have been eliminated.

On June 8, 2022, we completed our acquisition of Cerner Corporation (Cerner), a provider of digital information systems used within hospitals and health systems, by means of a merger of one of our wholly owned subsidiaries with and into Cerner such that Cerner became an indirect, wholly owned subsidiary of Oracle. Through our acquisition of Cerner, we enhanced our offerings of each of our three existing businesses, cloud and license, hardware and services. The consolidated financial statements included in this Annual Report include the financial results of Cerner prospectively from the date of acquisition. Refer to Note 2 below for additional details regarding our acquisition of Cerner.

The comparability of our consolidated financial statements as of and for the year ended May 31, 2022 was impacted by $4.7 billion of certain litigation related charges during fiscal 2022. The comparability of our consolidated statements of operations for the year ended May 31, 2021 was impacted by a $2.3 billion net income tax benefit related to the partial realignment of our legal entity structure that resulted in the intra-group transfer of certain intellectual property rights. Refer to Note 13 below for additional information regarding our income taxes.

Use of Estimates

Our consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles (GAAP) as set forth in the Financial Accounting Standards Board’s (FASB) Accounting Standards Codification (ASC), and we consider various staff accounting bulletins and other applicable guidance issued by the SEC. These accounting principles require us to make certain estimates, judgments and assumptions. We believe that the estimates, judgments and assumptions upon which we rely are reasonable based upon information available to us at the time that these estimates, judgments and assumptions are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities as of the date of the financial statements as well as the reported amounts of revenues and expenses during the periods presented. To the extent that there are differences between these estimates, judgments or assumptions and actual results, our consolidated financial statements will be affected. In many cases, the accounting treatment of a particular transaction is specifically dictated by GAAP and does not require management’s judgment in its application. There are also areas in which management’s judgment in selecting among available alternatives would not produce a materially different result.

During the first quarter of fiscal 2023, we completed an assessment of the useful lives of our servers and increased the estimate of the useful lives from four years to five years effective at the beginning of fiscal 2023. Based on the carrying value of our servers as of May 31, 2022, this change in accounting estimate decreased our total operating expenses by $434 million during fiscal 2023.

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 typically represent perpetual software 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 and advanced customer 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 elect to purchase and renew their license support contracts annually.

Cloud services revenues include revenues from Oracle Cloud Services offerings, which deliver applications and infrastructure technologies via cloud-based deployment models that we develop functionality for, provide unspecified updates and enhancements for, deploy, host, manage, upgrade and support and that customers access by entering into a subscription agreement with us for a stated period.

Cloud license and on-premise license revenues primarily represent amounts earned from granting customers perpetual 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 services are offered to customers as standalone arrangements or as a part of arrangements to customers buying other products and services. Our consulting services are designed to help our customers to, among others, deploy, architect, integrate, upgrade and secure their investments in Oracle applications and infrastructure technologies. Our advanced customer services are designed to provide supplemental support services, performance services and higher availability for Oracle products and services.

We apply the provisions of ASC 606, Revenue from Contracts with Customers (ASC 606) as a single standard for revenue recognition that applies to all of our cloud, license, hardware and services arrangements and generally require 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 ASC 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 each performance obligation in the contract; and
•
recognition of revenues when, or as, the contractual performance obligations are satisfied.

Our customers that contract with us for the provision of cloud services, software, hardware or other services include businesses of many sizes, government agencies, educational institutions and our channel partners, which include resellers and system integrators.

The timing of revenue recognition may differ from the timing of invoicing to our customers. We record an unbilled receivable, which is included within accounts receivable on our consolidated balance sheets, when revenue is recognized prior to invoicing. We record deferred revenues on our consolidated balance sheets when revenues are to be 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 and cloud infrastructure 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 Oracle financing division. The transaction price for a contract that is financed through our Oracle financing division is adjusted to reflect the time value of money and interest revenue is recorded as a component of non-operating expenses or income, net within our 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 cloud services are delivered, beginning on the date our service is made available to a customer. We recognize revenue ratably because the customer receives and consumes the benefits of the cloud services throughout the contract period. Revenues from cloud services that are 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, if and when they are available, and hardware product repairs, as applicable. 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 Licenses and On-Premise Licenses

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 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; therefore, our products and services are generally not combined. 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 the SSP based on the observable prices of products or services sold separately in comparable circumstances to similar customers. We typically establish an SSP 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 the vast majority of 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 the 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 generally determined by applying a residual approach whereby all other 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.

Remaining Performance Obligations from Customer Contracts

Trade receivables, net of allowance for credit losses, and deferred revenues are reported net of related uncollected deferred revenues in our consolidated balance sheets as of May 31, 2023 and 2022. The amount of revenues recognized during the year ended May 31, 2023 and 2022 that were included in the opening deferred revenues balance as of May 31, 2022 and 2021, respectively, was approximately $8.3 billion and $8.8 billion. Revenues recognized from performance obligations satisfied in prior periods and impairment losses recognized on our receivables were immaterial during each year ended May 31, 2023, 2022 and 2021.

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 and, combined with foreign exchange rate fluctuations and other factors, influence the amount of remaining performance obligations that we report at a point in time. As of May 31, 2023, our remaining performance obligations were $67.9 billion, approximately 49% of which we expect to recognize as revenues over the next twelve months, 35% over the subsequent month 13 to month 36, and the remainder thereafter.

Sales of Financing Receivables

We offer certain of our customers the option to acquire certain of our cloud and license, hardware 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. During fiscal 2023, 2022 and 2021, $2.0 billion, $1.8 billion and $1.7 billion, respectively, of our financing receivables were sold to financial institutions.

Business Combinations

We apply the provisions of ASC 805, Business Combinations (ASC 805), in accounting for our acquisitions. ASC 805 requires that we evaluate whether a transaction pertains to an acquisition of assets, or to an acquisition of a business. A business is defined as an integrated set of assets and activities that is capable of being conducted and managed for the purpose of providing a return to investors. Asset acquisitions are accounted for by allocating the cost of the acquisition to the individual assets and liabilities assumed on a relative fair value basis; whereas the acquisition of a business requires us to recognize separately from goodwill the assets acquired and the liabilities assumed at the acquisition date fair values. Goodwill as of the business acquisition date is measured as the excess of consideration transferred over the net of the acquisition date fair values of the assets acquired and the liabilities assumed. While we use our best estimates and assumptions to accurately value assets acquired and liabilities assumed at the business acquisition date as well as any contingent consideration, where applicable, our estimates are inherently uncertain and subject to refinement. As a result, during the measurement period, which may be up to one year from the business acquisition date, we record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon the conclusion of a business acquisition’s measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to our consolidated statements of operations. Costs to exit or restructure certain activities of an acquired company or our internal operations are accounted for as termination and exit costs pursuant to ASC 420, Exit or Disposal Cost Obligations, and are accounted for separately from the business combination. A liability for costs associated with an exit or disposal activity is recognized and measured at its fair value in our consolidated statement of operations in the period in which the liability is incurred. Abandoned operating leases related to an acquired company or our internal operations are accounted for as Right-of-Use (ROU) asset impairment charges pursuant to ASC 842, Leases and are accounted for separately from the business combination. In all periods

presented, when estimating the asset impairment charges, assumptions were applied regarding estimated sub-lease payments to be received, which can differ from actual results. This may require us to revise our initial estimates which may affect our results of operations and financial position in the period the revision is made.

For a given business acquisition, we may identify certain pre-acquisition contingencies as of the acquisition date and may extend our review and evaluation of these pre-acquisition contingencies throughout the measurement period in order to obtain sufficient information to assess whether we include these contingencies as a part of the fair value estimates of assets acquired and liabilities assumed and, if so, to determine their estimated amounts. If we cannot reasonably determine the fair value of a non-income tax related pre-acquisition contingency by the end of the measurement period, which is generally the case given the nature of such matters, we will recognize an asset or a liability for such pre-acquisition contingency if: (1) it is probable that an asset existed or a liability had been incurred at the business acquisition date and (2) the amount of the asset or liability can be reasonably estimated. Subsequent to the measurement period or final determination of the net asset values for the business combination, whichever comes first, changes in our estimates of such contingencies will affect earnings and could have a material effect on our results of operations and financial position.

In addition, uncertain tax positions and tax related valuation allowances assumed in a business combination are initially estimated as of the acquisition date. We reevaluate these items quarterly based upon facts and circumstances that existed as of the business acquisition date with any adjustments to our preliminary estimates being recorded to goodwill if identified within the measurement period. Subsequent to the measurement period or our final determination of the tax allowance’s or contingency’s estimated value, whichever comes first, changes to these uncertain tax positions and tax related valuation allowances will affect our provision for income taxes in our consolidated statement of operations and could have a material impact on our results of operations and financial position.

Marketable and Non-Marketable Investments

In accordance with ASC 320, Investments—Debt Securities, and based on our intentions regarding these instruments, we classify substantially all of our marketable debt securities investments as available-for-sale. We carry these securities at fair value, and report the unrealized gains and losses, net of taxes, as a component of stockholders’ equity, except for any unrealized losses determined to be related to credit losses, which we record within non-operating expenses or income, net in the accompanying consolidated statements of operations. We periodically evaluate our investments to determine if impairment charges are required. All of our marketable debt securities investments are classified as current based on the nature of the investments and their availability for use in current operations.

Investments in equity securities, other than any equity method investments, are generally recorded at their fair values, if the fair values are readily determinable. Non-marketable equity securities for which the fair values are not readily determinable and where we do not have control of, nor significant influence in, the investee are recorded at cost, less any impairment, adjusted for observable price changes from orderly transactions for identical or similar investments of the same issuer with any gains or losses recorded as a component of non-operating expenses or income, net as of and for each reporting period. For equity investments through which we have significant influence in, but not control of, the investee, we account for such investments pursuant to the equity method of accounting whereby we record our proportionate share of the investee’s earnings or losses, amortization of differences between our investment basis and underlying equity in net assets of the investee, excluding component representing goodwill, and impairment, if any, as a component of non-operating expenses or income, net for each reporting period.

Our non-marketable debt investments and equity securities and related instruments totaled $1.6 billion and $1.2 billion as of May 31, 2023 and 2022, respectively, are subject to periodic impairment reviews and are classified as a part of non-current assets in the accompanying consolidated balance sheets. The majority of the non-marketable investments held as of these dates were with a related party entity for which we follow the equity method of accounting. We are also a counterparty to certain options to acquire additional equity interests in that entity at various times through June 2025 and we could obtain control of that entity should such options be exercised.

Fair Values of Financial Instruments

We apply the provisions of ASC 820, Fair Value Measurement (ASC 820), to our assets and liabilities that we are required to measure at fair value pursuant to other accounting standards, including our investments in marketable debt and equity securities and our derivative financial instruments.

The additional disclosures regarding our fair value measurements are included in Note 4.

Allowances for Credit Losses

We record allowances for credit losses based upon a specific review of all significant outstanding invoices. For those invoices not specifically reviewed, provisions are provided at differing rates, based upon the age of the receivable, the collection history associated with the geographic region that the receivable was recorded in and current and expected future economic conditions. We write-off a receivable and charge it against its recorded allowance when we have exhausted our collection efforts without success.

Concentrations of Credit Risk

Financial instruments that are potentially subject to concentrations of credit risk consist primarily of cash and cash equivalents, marketable securities, derivatives and trade receivables. Our cash and cash equivalents are generally held with large, diverse financial institutions worldwide to reduce the amount of exposure to any single financial institution. Investment policies have been implemented that limit purchases of marketable debt securities to investment-grade securities. Our derivative contracts are transacted with various financial institutions with high credit standings and any exposure to counterparty credit-related losses in these contracts is largely mitigated with collateral security agreements that provide for collateral to be received or posted when the net fair values of these contracts fluctuate from contractually established thresholds. We generally do not require collateral to secure accounts receivable. The risk with respect to trade receivables is mitigated by credit evaluations we perform on our customers, the short duration of our payment terms for the significant majority of our customer contracts and by the diversification of our customer base. No single customer accounted for 10% or more of our total revenues in fiscal 2023, 2022 or 2021.

We outsource the manufacturing, assembly and delivery of the substantial majority of our hardware products to a variety of companies, many of which are located outside the U.S. Further, we have simplified our supply chain processes by reducing the number of third-party manufacturing partners and the number of locations where these third-party manufacturers build our hardware products. Any inability of these third-party manufacturing partners to deliver the contracted services for our hardware products could adversely impact future operating results of our cloud and license and hardware businesses.

Inventories

Inventories are stated at the lower of cost or net realizable value. Cost is computed using standard cost, which approximates actual cost, on a first-in, first-out basis. We evaluate our ending inventories for estimated excess quantities and obsolescence. This evaluation includes analysis of sales levels by product and projections of future demand within specific time horizons. Inventories in excess of future demand are written down and charged to hardware expenses. In addition, we assess the impact of changing technology to our inventories and we write down inventories that are considered obsolete. At the point of loss recognition, a new, lower-cost basis for that inventory is established, and subsequent changes in facts and circumstances do not result in the restoration or increase in that newly established cost basis. Inventories are included in prepaid expenses and other current assets in our consolidated balance sheets and totaled $298 million and $314 million at May 31, 2023 and 2022, respectively.

Other Receivables

Other receivables represent value-added tax and sales tax receivables associated with the sale of our products and services to third parties. Other receivables are included in prepaid expenses and other current assets in our consolidated balance sheets and totaled $798 million and $791 million at May 31, 2023 and 2022, respectively.

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 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 certain of 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 consolidated statements of operations and asset balances for deferred sales commissions are included in other current assets and other non-current assets in our consolidated balance sheets.

Property, Plant and Equipment

Property, plant and equipment are stated at cost, less accumulated depreciation. Depreciation is computed using the straight-line method based on estimated useful lives of the assets, which range from one to 40 years. Leasehold improvements are amortized over the lesser of the estimated useful lives of the improvements or the lease terms, as appropriate. Property, plant and equipment are periodically reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. We did not recognize any significant property impairment charges in fiscal 2023, 2022 or 2021.

Goodwill, Intangible Assets and Impairment Assessments

Goodwill represents the excess of the purchase price in a business combination over the fair value of net tangible and intangible assets acquired. Intangible assets that are not considered to have an indefinite useful life are itemized in Note 6 below and are amortized over their useful lives, which generally range from one to 10 years. Each period we evaluate the estimated remaining useful lives of purchased intangible assets and whether events or changes in circumstances warrant a revision to the remaining periods of amortization.

The carrying amounts of our goodwill and intangible assets are periodically reviewed for impairment (at least annually for goodwill and indefinite lived intangible assets) and whenever events or changes in circumstances indicate that the carrying value of these assets may not be recoverable. When goodwill is assessed for impairment, we have the option to perform an assessment of qualitative factors of impairment (optional assessment) prior to necessitating a quantitative impairment test. Should the optional assessment be used for any given fiscal year, qualitative factors considered for a reporting unit include: cost factors; financial performance; legal, regulatory, contractual, political, business, or other factors; entity specific factors; industry and market considerations; macroeconomic conditions; and other relevant events and factors affecting the reporting unit. If we determine in the qualitative assessment that it is more likely than not that the fair value of the reporting unit is less than its carrying value, a quantitative test is then performed. Otherwise, no further testing is required. For those reporting units tested using a quantitative approach, we compare the fair value of each reporting unit with the carrying amount of the reporting unit, including goodwill. To determine the fair value of each reporting unit we utilize estimates, judgments and assumptions including estimated future cash flows the reporting unit is expected to generate on a discounted basis; the discount rate used as a part of the discounted cash flow analysis; future economic and market conditions; and market comparables of peer companies, among others. If, as per the quantitative test, the estimated fair value of the reporting unit is less than the carrying amount of the reporting unit, impairment is recognized for the difference, limited to the amount of goodwill recognized for the reporting unit. Our most recent goodwill impairment analysis was performed on March 1, 2023 and did not result in a goodwill impairment charge. We did not recognize impairment charges in fiscal 2022 or 2021.

Recoverability of finite lived intangible assets is measured by comparison of the carrying amount of the asset to the future undiscounted cash flows that are expected to be generated by the lowest level associated asset grouping. Recoverability of indefinite lived intangible assets is measured by comparison of the carrying amount of the asset to its fair value. If the asset is considered to be impaired, the amount of any impairment is measured as the difference between the carrying value and the fair value of the impaired asset. We did not recognize any intangible asset impairment charges in fiscal 2023, 2022 or 2021. At least annually, we assess the useful lives of our finite lived intangible assets and may adjust the period over which these assets are amortized whenever events or changes in circumstances indicate that a shorter amortization period is more reflective of the period in which these assets contribute to our cash flows.

Derivative Financial Instruments

During fiscal 2023, 2022 and 2021, we used derivative financial instruments to manage foreign currency and interest rate risks. We do not use derivative financial instruments for trading purposes. We account for these instruments in accordance with ASC 815, Derivatives and Hedging (ASC 815), which requires that every derivative instrument be recorded on the balance sheet as either an asset or liability measured at its fair value as of each reporting date. ASC 815 also requires that changes in our derivatives’ fair values be recognized in earnings, unless specific hedge accounting and documentation criteria are met (i.e., the instruments are accounted for as hedges).

The accounting for changes in the fair value of a derivative depends on the intended use of the derivative and the resulting designation. For a derivative instrument designated as a fair value hedge, loss or gain attributable to the risk being hedged is recognized in earnings in the period of change with a corresponding earnings offset recorded to the item for which the risk is being hedged. For a derivative instrument designated as a cash flow hedge, during each reporting period, we record the change in fair value of the derivative to accumulated other comprehensive loss (AOCL) in our consolidated balance sheets and the change is reclassified to earnings in the period the hedged item affects earnings.

Leases

We determine if an arrangement is a lease at its inception. Operating lease liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. We generally use our incremental borrowing rate based on the information available at the lease commencement date in determining the present value of future payments, because the implicit rate of the lease is generally not known. ROU assets related to our operating lease liabilities are measured at lease inception based on the initial measurement of the lease liability, plus any prepaid lease payments and less any lease incentives. Our lease terms that are used in determining our operating lease liabilities at lease inception may include options to extend or terminate the leases when it is reasonably certain that we will exercise such options. We amortize our ROU assets as operating lease expense generally on a straight-line basis over the lease term and classify both the lease amortization and imputed interest as operating expenses. We have lease agreements with lease and non-lease components, and in such cases, we generally account for the components as a single lease component. We do not recognize lease assets and lease liabilities for any lease with an original lease term of less than one year.

ROU assets related to our operating leases are included in other non-current assets, short-term operating lease liabilities are included in other current liabilities, and long-term operating lease liabilities are included in other non-current liabilities in our consolidated balance sheets. Cash flow movements related to our lease activities are included in prepaid expenses and other assets and accounts payable and other liabilities as presented in net cash provided by operating activities in our consolidated statements of cash flows for the years ended May 31, 2023 and 2022. Note 10 below provides additional information regarding our leases.

Legal and Other Contingencies

We are currently involved in various claims and legal proceedings. Quarterly, we review the status of each significant matter and assess our potential financial exposure. Descriptions of our accounting policies associated with contingencies assumed as a part of a business combination are provided under “Business Combinations” above. For legal and other contingencies that are not a part of a business combination or related to income taxes, we accrue a

liability for an estimated loss if the potential loss from any claim or legal proceeding is considered probable, and the amount can be reasonably estimated. Note 16 below provides additional information regarding certain of our legal contingencies.

Foreign Currency

We transact business in various foreign currencies. In general, the functional currency of a foreign operation is the local country’s currency. Consequently, revenues and expenses of operations outside the U.S. are translated into U.S. Dollars using weighted-average exchange rates while assets and liabilities of operations outside the U.S. are translated into U.S. Dollars using exchange rates at the balance sheet dates. The effects of foreign currency translation adjustments are substantially included in stockholders’ equity as a component of AOCL in the accompanying consolidated balance sheets and related periodic movements are summarized as a line item in our consolidated statements of comprehensive income. Net foreign exchange transaction losses included in non-operating expenses or income, net in the accompanying consolidated statements of operations were $249 million, $199 million and $112 million in fiscal 2023, 2022 and 2021, respectively.

Stock-Based Compensation

We account for share-based payments to employees, including grants of service-based restricted stock unit awards, service-based employee stock options, performance-based stock options (PSOs), and purchases under employee stock purchase plans in accordance with ASC 718, Compensation—Stock Compensation, which requires that share-based payments (to the extent they are compensatory) be recognized in our consolidated statements of operations based on their fair values. We account for forfeitures of stock-based awards as they occur.

For our service-based stock awards, we recognize stock-based compensation expense on a straight-line basis over the service period of the award, which is generally four years.

For our PSOs, we recognize stock-based compensation expense on a straight-line basis related to awards that are probable of achievement over the longer of the (a) estimated implicit service period for performance-metric achievement, or (b) derived service period for market-based metric achievement. During our interim and annual reporting periods, stock-based compensation expense is recorded based on expected attainment of performance targets. Changes in our estimates of the expected attainment of performance targets that result in a change in the number of shares that are expected to vest, or changes in our estimates of implicit service periods, may cause the amount of stock-based compensation expense that we record for each interim reporting period to vary. Any changes in estimates that impact our expectation of the number of shares that are expected to vest are reflected in the amount of stock-based compensation expense that we recognize for each PSO tranche on a cumulative catch up basis during each interim reporting period in which such estimates are altered. Changes in estimates of the implicit service periods are recognized prospectively.

We record deferred tax assets for stock-based compensation awards that result in deductions on certain of our income tax returns based on the amount of stock-based compensation recognized in each reporting period and the fair values attributable to the vested portion of stock awards assumed in connection with a business combination at the statutory tax rates in the jurisdictions that we are able to recognize such tax deductions. The impacts of the actual tax deductions for stock-based awards that are realized in these jurisdictions are generally recognized in the reporting period that a restricted stock-based award vests or a stock option is exercised with any shortfall/windfall relative to the deferred tax asset established, and recorded as a discrete detriment/benefit to our provision for income taxes in such period. Note 12 below provides additional information regarding our stock-based compensation plans and related expenses.

Research and Development Costs and Software Development Costs

All research and development costs are expensed as incurred in accordance with ASC 730, Research and Development. Software development costs required to be capitalized under ASC 985-20, Costs of Software to be Sold, Leased or Marketed, and under ASC 350-40, Internal-Use Software, were not material to our consolidated financial statements in fiscal 2023, 2022 and 2021.

Acquisition Related and Other Expenses

Acquisition related and other expenses primarily consist of personnel related costs for transitional and certain other employees, certain business combination adjustments, including adjustments after the measurement period has ended, and certain other operating items, net. For fiscal 2022, acquisition related and other expenses included certain litigation related charges.

 

 

Year Ended May 31,

 

(in millions)

 

2023

 

 

2022

 

 

2021

 

Transitional and other employee related costs

 

$

77

 

 

$

10

 

 

$

5

 

Business combination adjustments, net

 

 

10

 

 

 

9

 

 

 

4

 

Other, net

 

 

103

 

 

 

4,694

 

 

 

129

 

Total acquisition related and other expenses

 

$

190

 

 

$

4,713

 

 

$

138

 

Non-Operating (Expenses) Income, net

Non-operating (expenses) 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), net gains and losses related to equity investments including losses attributable to equity method investments and net other income and expenses, including net unrealized gains and losses from our investment portfolio related to our deferred compensation plan, and non-service net periodic pension income and losses.

 

 

 

Year Ended May 31,

 

(in millions)

 

2023

 

 

2022

 

 

2021

 

Interest income

 

$

285

 

 

$

94

 

 

$

101

 

Foreign currency losses, net

 

 

(249

)

 

 

(199

)

 

 

(112

)

Noncontrolling interests in income

 

 

(165

)

 

 

(184

)

 

 

(180

)

(Losses) gains from equity investments, net

 

 

(327

)

 

 

(147

)

 

 

262

 

Other (losses) gains, net

 

 

(6

)

 

 

(86

)

 

 

211

 

Total non-operating (expenses) income, net

 

$

(462

)

 

$

(522

)

 

$

282

 

 

Income Taxes

We account for income taxes in accordance with ASC 740, Income Taxes (ASC 740). Deferred income taxes are recorded for the expected tax consequences of temporary differences between the tax bases of assets and liabilities for financial reporting purposes and amounts recognized for income tax purposes. We record a valuation allowance to reduce our deferred tax assets to the amount of future tax benefit that is more likely than not to be realized.

A two-step approach is applied pursuant to ASC 740 in the recognition and measurement of uncertain tax positions taken or expected to be taken in a tax return. The first step is to determine if the weight of available evidence indicates that it is more likely than not that the tax position will be sustained in an audit, including resolution of any related appeals or litigation processes. The second step is to measure the tax benefit as the largest amount that is more than 50% likely to be realized upon ultimate settlement. We recognize interest and penalties related to uncertain tax positions in our provision for income taxes line of our consolidated statements of operations.

A description of our accounting policies associated with tax related contingencies and valuation allowances assumed as a part of a business combination is provided under “Business Combinations” above.

Recent Accounting Pronouncements

Financial Instruments: In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting (ASU 2020-04) and also issued subsequent amendments to the initial guidance (collectively, Topic 848). Topic 848 provides optional guidance for contract modifications and certain hedging relationships associated with the transition from reference rates that are

expected to be discontinued. We will adopt Topic 848 when our relevant contracts are modified upon transition to alternative reference rates. We do not expect our adoption of Topic 848 to have a material impact on our consolidated financial statements.
v3.23.2
ACQUISITIONS
 12 Months Ended
May 31, 2023
Business Combinations [Abstract]  
ACQUISITIONS
2.
ACQUISITIONS

Acquisition of Cerner Corporation

On December 20, 2021, we entered into an Agreement and Plan of Merger (Merger Agreement) with Cerner, a provider of digital information systems used within hospitals and health systems that are designed to enable medical professionals to deliver better healthcare to individual patients and communities.

On January 19, 2022, pursuant to the Merger Agreement, we commenced a tender offer to purchase all of the issued and outstanding shares of common stock of Cerner at a purchase price of $95.00 per share, net to the seller in cash, without interest thereon, based upon the terms and subject to the conditions set forth in the Offer to Purchase dated January 19, 2022, and the related Letter of Transmittal.

On June 8, 2022, pursuant to the terms of the tender offer and applicable Delaware law, we acquired all the outstanding Cerner shares and effectuated the merger of Cerner with and into a wholly-owned subsidiary of Oracle and Cerner became an indirect, wholly-owned subsidiary of Oracle. Vested equity awards outstanding immediately prior to the consummation of the merger were cancelled in exchange for the right to receive an amount in cash based on a formula contained in the Merger Agreement. The unvested equity awards to acquire Cerner common stock that were outstanding immediately prior to the conclusion of the merger were converted into equity awards denominated in shares of Oracle common stock based on formulas contained in the Merger Agreement. We have included the financial results of Cerner in our consolidated financial statements from the date of acquisition. During fiscal 2023, Cerner contributed $5.9 billion to our total revenues.

The total purchase price for Cerner was $28.2 billion, which consisted of $28.2 billion in cash and $55 million for the fair values of restricted stock-based awards and stock options assumed. Pursuant to our business combinations accounting policy, we estimated the fair values of net tangible and intangible assets acquired, and the excess of the consideration transferred over the aggregate of such fair values was recorded as goodwill. The following table summarizes the allocation of the purchase price based on estimated fair values of net tangible and intangible assets acquired from Cerner:

 

(in millions)

 

 

 

Cash and marketable securities

 

$

769

 

Trade receivables, net

 

 

854

 

Property, plant and equipment, net

 

 

1,512

 

Intangible assets

 

 

11,972

 

Goodwill

 

 

18,618

 

Other assets

 

 

520

 

Accounts payable and other liabilities

 

 

(1,691

)

Deferred revenues

 

 

(305

)

Senior notes and other borrowings

 

 

(1,600

)

Deferred tax liabilities, net

 

 

(2,424

)

Total

 

$

28,225

 

All of the $1.6 billion of senior notes and other borrowings assumed through our Cerner acquisition were repaid during fiscal 2023. Refer to Note 7 below for more information. Generally, goodwill recognized as a part of our acquisition is not deductible for income tax purposes.

Other Fiscal 2023, 2022 and 2021 Acquisitions

During fiscal 2023, 2022 and 2021, 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 to our consolidated financial statements.

Unaudited Pro Forma Financial Information

The unaudited pro forma financial information in the table below summarizes the combined results of operations for Oracle and Cerner. The unaudited pro forma financial information for all periods presented includes the business combination accounting effects resulting from this acquisition, including amortization charges from acquired intangible assets, stock-based compensation charges for unvested restricted stock-based awards and stock options assumed and the related tax effects as though Cerner was acquired as of the beginning of fiscal 2022. 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 acquisition had taken place at the beginning of fiscal 2022.

The unaudited pro forma financial information for fiscal 2023 and 2022 combines the historical results of Oracle for fiscal 2023 and 2022, respectively, the historical results of Cerner for the twelve months ended March 31, 2023 and 2022, respectively (adjusted due to differences in reporting periods and considering the date we acquired Cerner), and the effects of the pro forma adjustments listed above. The unaudited pro forma financial information is as follows:

 

 

Year Ended May 31,

 

(in millions, except per share data)

 

2023

 

 

2022

 

Total revenues

 

$

50,065

 

 

$

48,218

 

Net income

 

$

8,456

 

 

$

4,988

 

Basic earnings per share

 

$

3.14

 

 

$

1.85

 

Diluted earnings per share

 

$

3.06

 

 

$

1.79

 
v3.23.2
CASH, CASH EQUIVALENTS AND MARKETABLE SECURITIES
 12 Months Ended
May 31, 2023
Cash Cash Equivalents And Short Term Investments [Abstract]  
CASH, CASH EQUIVALENTS AND MARKETABLE SECURITIES
3.
CASH, CASH EQUIVALENTS AND MARKETABLE SECURITIES

Cash and cash equivalents primarily consist of deposits held at major banks, money market funds and other securities with original maturities of 90 days or less. Marketable securities consist of time deposits, marketable equity securities and certain other securities.

The amortized principal amounts of our cash, cash equivalents and marketable securities approximated their fair values at May 31, 2023 and 2022. We use the specific identification method to determine any realized gains or losses from the sale of our marketable securities classified as available-for-sale. Such realized gains and losses were insignificant for fiscal 2023, 2022 and 2021. The following table summarizes the components of our cash equivalents and marketable securities held, substantially all of which were classified as available-for-sale:

 

 

 

May 31,

 

(in millions)

 

2023

 

 

2022

 

Money market funds

 

$

1,694

 

 

$

12,842

 

Time deposits and other

 

 

468

 

 

 

520

 

Total investments

 

$

2,162

 

 

$

13,362

 

Investments classified as cash equivalents

 

$

1,740

 

 

$

12,843

 

Investments classified as marketable securities

 

$

422

 

 

$

519

 

 

As of May 31, 2023 and 2022, all of our marketable debt securities investments mature within one year. Our investment portfolio is subject to market risk due to changes in interest rates. As described above, we limit purchases of marketable debt securities to investment-grade securities, which have high credit ratings and also limit the amount of credit exposure to any one issuer. As stated in our investment policy, we are averse to principal loss and seek to preserve our invested funds by limiting default risk and market risk.

Restricted cash that was included within cash and cash equivalents as presented within our consolidated balance sheets as of May 31, 2023 and 2022 and our consolidated statements of cash flows for the years ended May 31, 2023, 2022 and 2021 was nominal.
v3.23.2
FAIR VALUE MEASUREMENTS
 12 Months Ended
May 31, 2023
Fair Value Disclosures [Abstract]  
FAIR VALUE MEASUREMENTS
4.
FAIR VALUE MEASUREMENTS

We perform fair value measurements in accordance with ASC 820. 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 consisted of the following (Level 1 and Level 2 inputs are defined above):

 

 

 

May 31, 2023

 

 

May 31, 2022

 

 

 

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:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Money market funds

 

$

1,694

 

 

$

—

 

 

$

1,694

 

 

$

12,842

 

 

$

—

 

 

$

12,842

 

Time deposits and other

 

 

180

 

 

 

288

 

 

 

468

 

 

 

240

 

 

 

280

 

 

 

520

 

Derivative financial instruments

 

 

—

 

 

 

102

 

 

 

102

 

 

 

—

 

 

 

—

 

 

 

—

 

Total assets

 

$

1,874

 

 

$

390

 

 

$

2,264

 

 

$

13,082

 

 

$

280

 

 

$

13,362

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Derivative financial instruments

 

$

—

 

 

$

126

 

 

$

126

 

 

$

—

 

 

$

97

 

 

$

97

 

 

Our marketable securities investments consist of time deposits, marketable equity securities and certain other securities. Marketable securities as presented per our consolidated balance sheets included debt securities with original maturities at the time of purchase greater than three months and the remainder of the debt securities were included in cash and cash equivalents. As of May 31, 2023 and May 31, 2022, all of our marketable debt securities investments mature within one year. Our valuation techniques used to measure the fair values of our instruments 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 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 reference rate yield curves, among others.

Based on the trading prices of the $89.9 billion and $75.9 billion of senior notes and other long-term borrowings and the related fair value hedges (refer to Note 7 for additional information) that we had outstanding as of May 31, 2023 and 2022, respectively, the estimated fair values of the senior notes and other borrowings and the related fair value hedges using Level 2 inputs at May 31, 2023 and 2022 were $79.9 billion and $67.0 billion, respectively.
v3.23.2
PROPERTY, PLANT AND EQUIPMENT
 12 Months Ended
May 31, 2023
Property Plant And Equipment [Abstract]  
PROPERTY, PLANT AND EQUIPMENT
5.
PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment, net consisted of the following:

 

 

 

Estimated

 

May 31,

 

(Dollars in millions)

 

Useful Life

 

2023

 

 

2022

 

Computer, network, machinery and equipment

 

1-5 years

 

$

17,258

 

 

$

12,844

 

Buildings and improvements

 

1-40 years

 

 

5,880

 

 

 

4,729

 

Furniture, fixtures and other

 

5-15 years

 

 

447

 

 

 

423

 

Land

 

—

 

 

1,243

 

 

 

1,166

 

Construction in progress(1)

 

—

 

 

3,846

 

 

 

512

 

Total property, plant and equipment

 

1-40 years

 

 

28,674

 

 

 

19,674

 

Accumulated depreciation

 

 

 

 

(11,605

)

 

 

(9,958

)

Total property, plant and equipment, net

 

 

 

$

17,069

 

 

$

9,716

 

 

(1)
Amounts primarily consist of computer equipment to be built and deployed at our data centers.
v3.23.2
INTANGIBLE ASSETS AND GOODWILL
 12 Months Ended
May 31, 2023
Goodwill And Intangible Assets Disclosure [Abstract]  
INTANGIBLE ASSETS AND GOODWILL
6.
INTANGIBLE ASSETS AND GOODWILL

The changes in intangible assets for fiscal 2023 and the net book value of intangible assets as of May 31, 2023 and 2022 were as follows:

 

 

Intangible Assets, Gross

 

 

Accumulated Amortization

 

 

Intangible Assets, Net

 

 

Weighted
Average

 

(Dollars in millions)

 

May 31,
 2022

 

 

Additions &
Adjustments, net (1)

 

 

Retirements

 

 

May 31,
 2023

 

 

May 31,
 2022

 

 

Expense

 

 

Retirements

 

 

May 31,
 2023

 

 

May 31,
 2022

 

 

May 31,
 2023

 

 

Useful
Life(2)

 

Developed technology

 

$

3,966

 

 

$

2,379

 

 

$

(2,045

)

 

$

4,300

 

 

$

(3,660

)

 

$

(792

)

 

$

2,045

 

 

$

(2,407

)

 

$

306

 

 

$

1,893

 

 

 

4

 

Cloud services and license support agreements and related relationships

 

 

5,260

 

 

 

4,318

 

 

 

(122

)

 

 

9,456

 

 

 

(4,194

)

 

 

(1,507

)

 

 

122

 

 

 

(5,579

)

 

 

1,066

 

 

 

3,877

 

 

 

7

 

Cloud license and on-premise license agreements and related relationships

 

 

356

 

 

 

2,437

 

 

 

(105

)

 

 

2,688

 

 

 

(343

)

 

 

(459

)

 

 

105

 

 

 

(697

)

 

 

13

 

 

 

1,991

 

 

 

7

 

Other

 

 

865

 

 

 

2,845

 

 

 

(128

)

 

 

3,582

 

 

 

(810

)

 

 

(824

)

 

 

128

 

 

 

(1,506

)

 

 

55

 

 

 

2,076

 

 

 

4

 

Total intangible assets, net

 

$

10,447

 

 

$

11,979

 

 

$

(2,400

)

 

$

20,026

 

 

$

(9,007

)

 

$

(3,582

)

 

$

2,400

 

 

$

(10,189

)

 

$

1,440

 

 

$

9,837

 

 

 

 

 

(1)
Amounts also included any changes in intangible asset balances for the periods presented that resulted from foreign currency translations.
(2)
Represents weighted-average useful lives (in years) of intangible assets acquired during fiscal 2023.

As of May 31, 2023, estimated future amortization expenses related to intangible assets were as follows (in millions):

Fiscal 2024

 

$

2,994

 

Fiscal 2025

 

 

2,283

 

Fiscal 2026

 

 

1,620

 

Fiscal 2027

 

 

664

 

Fiscal 2028

 

 

635

 

Thereafter

 

 

1,641

 

Total intangible assets, net

 

$

9,837

 

 

The changes in the carrying amounts of goodwill, net, which is generally not deductible for tax purposes, for our operating segments for fiscal 2023 and 2022 were as follows:

(in millions)

 

Cloud and License

 

 

Hardware

 

 

Services

 

 

Total Goodwill, net

 

Balances as of May 31, 2021

 

$

39,786

 

 

$

2,367

 

 

$

1,782

 

 

$

43,935

 

Goodwill adjustments, net(1)

 

 

152

 

 

 

—

 

 

 

(276

)

 

 

(124

)

Balances as of May 31, 2022

 

 

39,938

 

 

 

2,367

 

 

 

1,506

 

 

 

43,811

 

Goodwill from acquisitions

 

 

17,203

 

 

 

365

 

 

 

1,050

 

 

 

18,618

 

Goodwill adjustments, net(1)

 

 

(81

)

 

 

—

 

 

 

(87

)

 

 

(168

)

Balances as of May 31, 2023

 

$

57,060

 

 

$

2,732

 

 

$

2,469

 

 

$

62,261

 

 

Amounts include any changes in goodwill balances for the period presented that resulted from foreign currency translations and certain other adjustments.
v3.23.2
NOTES PAYABLE AND OTHER BORROWINGS
 12 Months Ended
May 31, 2023
Debt Disclosure [Abstract]  
NOTES PAYABLE AND OTHER BORROWINGS
7.
NOTES PAYABLE AND OTHER BORROWINGS

Notes payable and other borrowings consisted of the following:

 

 

 

 

May 31,

 

 

 

 

2023

 

2022

(Amounts in millions)

 

Date of
Issuance

 

Amount

 

 

Effective
Interest
Rate

 

Amount

 

 

Effective
Interest
Rate

Fixed-rate senior notes:

 

 

 

 

 

 

 

 

 

 

 

 

$2,500, 2.50%, due October 2022

 

October 2012

 

$

—

 

 

N.A

 

$

2,500

 

 

2.51%

$1,250, 2.625%, due February 2023

 

November 2017

 

 

—

 

 

N.A

 

 

1,250

 

 

2.64%

$1,000, 3.625%, due July 2023

 

July 2013

 

 

1,000

 

 

3.73%

 

 

1,000

 

 

3.73%

$2,500, 2.40%, due September 2023

 

July 2016

 

 

2,500

 

 

2.44%

 

 

2,500

 

 

2.40%

$2,000, 3.40%, due July 2024

 

July 2014

 

 

2,000

 

 

3.43%

 

 

2,000

 

 

3.43%

$2,000, 2.95%, due November 2024

 

November 2017

 

 

2,000

 

 

3.01%

 

 

2,000

 

 

2.98%

$3,500, 2.50%, due April 2025

 

April 2020

 

 

3,500

 

 

2.54%

 

 

3,500

 

 

2.51%

$2,500, 2.95%, due May 2025

 

May 2015

 

 

2,500

 

 

3.05%

 

 

2,500

 

 

3.00%

€750, 3.125%, due July 2025(1)(2)

 

July 2013

 

 

800

 

 

3.17%

 

 

803

 

 

3.17%

$1,000, 5.80%, due November 2025(3)

 

November 2022

 

 

1,000

 

 

5.93%

 

 

—

 

 

N.A

$2,750, 1.65%, due March 2026

 

March 2021

 

 

2,750

 

 

1.67%

 

 

2,750

 

 

1.66%

$3,000, 2.65%, due July 2026

 

July 2016

 

 

3,000

 

 

2.73%

 

 

3,000

 

 

2.69%

$2,250, 2.80%, due April 2027

 

April 2020

 

 

2,250

 

 

2.87%

 

 

2,250

 

 

2.83%

$2,750, 3.25%, due November 2027

 

November 2017

 

 

2,750

 

 

3.29%

 

 

2,750

 

 

3.26%

$2,000, 2.30%, due March 2028

 

March 2021

 

 

2,000

 

 

2.36%

 

 

2,000

 

 

2.34%

$750, 4.50%, due May 2028(3)

 

February 2023

 

 

750

 

 

4.60%

 

 

—

 

 

N.A

$1,250, 6.15%, due November 2029(3)

 

November 2022

 

 

1,250

 

 

6.21%

 

 

—

 

 

N.A

$3,250, 2.95%, due April 2030

 

April 2020

 

 

3,250

 

 

3.00%

 

 

3,250

 

 

2.96%

$750, 4.65%, due May 2030(3)

 

February 2023

 

 

750

 

 

4.75%

 

 

—

 

 

N.A

$500, 3.25%, due May 2030

 

May 2015

 

 

500

 

 

3.35%

 

 

500

 

 

3.30%

$3,250, 2.875%, due March 2031

 

March 2021

 

 

3,250

 

 

2.92%

 

 

3,250

 

 

2.89%

$2,250, 6.25%, due November 2032(3)

 

November 2022

 

 

2,250

 

 

6.32%

 

 

—

 

 

N.A

$1,500, 4.90%, due February 2033(3)

 

February 2023

 

 

1,500

 

 

4.95%

 

 

—

 

 

N.A

$1,750, 4.30%, due July 2034

 

July 2014

 

 

1,750

 

 

4.30%

 

 

1,750

 

 

4.30%

$1,250, 3.90%, due May 2035

 

May 2015

 

 

1,250

 

 

4.00%

 

 

1,250

 

 

3.95%

$1,250, 3.85%, due July 2036

 

July 2016

 

 

1,250

 

 

3.89%

 

 

1,250

 

 

3.85%

$1,750, 3.80%, due November 2037

 

November 2017

 

 

1,750

 

 

3.86%

 

 

1,750

 

 

3.83%

$1,250, 6.50%, due April 2038

 

April 2008

 

 

1,250

 

 

6.51%

 

 

1,250

 

 

6.52%

$1,250, 6.125%, due July 2039

 

July 2009

 

 

1,250

 

 

6.17%

 

 

1,250

 

 

6.19%

$3,000, 3.60%, due April 2040

 

April 2020

 

 

3,000

 

 

3.64%

 

 

3,000

 

 

3.62%

$2,250, 5.375%, due July 2040

 

July 2010

 

 

2,250

 

 

5.45%

 

 

2,250

 

 

5.45%

$2,250, 3.65%, due March 2041

 

March 2021

 

 

2,250

 

 

3.72%

 

 

2,250

 

 

3.70%

$1,000, 4.50%, due July 2044

 

July 2014

 

 

1,000

 

 

4.50%

 

 

1,000

 

 

4.50%

$2,000, 4.125%, due May 2045

 

May 2015

 

 

2,000

 

 

4.20%

 

 

2,000

 

 

4.15%

$3,000, 4.00%, due July 2046

 

July 2016

 

 

3,000

 

 

4.03%

 

 

3,000

 

 

4.00%

$2,250, 4.00%, due November 2047

 

November 2017

 

 

2,250

 

 

4.05%

 

 

2,250

 

 

4.03%

$4,500, 3.60%, due April 2050

 

April 2020

 

 

4,500

 

 

3.64%

 

 

4,500

 

 

3.62%

$3,250, 3.95%, due March 2051

 

March 2021

 

 

3,250

 

 

3.98%

 

 

3,250

 

 

3.96%

$2,500, 6.90%, due November 2052(3)

 

November 2022

 

 

2,500

 

 

6.94%

 

 

—

 

 

N.A

$2,250, 5.55%, due February 2053(3)

 

February 2023

 

 

2,250

 

 

5.62%

 

 

—

 

 

N.A

$1,250, 4.375%, due May 2055

 

May 2015

 

 

1,250

 

 

4.44%

 

 

1,250

 

 

4.40%

$3,500, 3.85%, due April 2060

 

April 2020

 

 

3,500

 

 

3.89%

 

 

3,500

 

 

3.87%

$1,500, 4.10%, due March 2061

 

March 2021

 

 

1,500

 

 

4.13%

 

 

1,500

 

 

4.11%

Term loan credit agreement and other borrowings:

 

 

 

 

 

 

 

 

 

 

 

 

$790, SOFR plus 1.70%, due August 2025(4)

 

August 2022

 

 

790

 

 

5.68%

 

 

—

 

 

N.A

$170, SOFR plus 1.70%, due August 2025

 

November 2022

 

 

170

 

 

6.16%

 

 

—

 

 

N.A

$3,570, SOFR plus 1.70%, due August 2027(4)

 

August 2022

 

 

3,570

 

 

5.68%

 

 

—

 

 

N.A

$1,100, SOFR plus 1.70%, due August 2027

 

November 2022

 

 

1,100

 

 

6.16%

 

 

—

 

 

N.A

Commercial paper notes

 

 

 

 

563

 

 

4.89%

 

 

—

 

 

N.A

Other borrowings due August 2025

 

November 2016

 

 

113

 

 

3.53%

 

 

113

 

 

3.53%

Total senior notes and other borrowings

 

 

 

$

90,856

 

 

 

 

$

76,166

 

 

 

Unamortized discount/issuance costs

 

 

 

 

(323

)

 

 

 

 

(284

)

 

 

Hedge accounting fair value adjustments(2)

 

 

 

 

(52

)

 

 

 

 

(23

)

 

 

Total notes payable and other borrowings

 

 

 

$

90,481

 

 

 

 

$

75,859

 

 

 

Notes payable, current

 

 

 

$

4,061

 

 

 

 

$

3,749

 

 

 

Notes payable and other borrowings, non-current

 

 

 

$

86,420

 

 

 

 

$

72,110

 

 

 

 

(1)
In July 2013, we issued €750 million of 3.125% senior notes due July 2025 (July 2025 Notes). Principal and unamortized discount/issuance costs for the July 2025 Notes in the table above were calculated using foreign currency exchange rates, as applicable, as of May 31, 2023 and May 31, 2022, respectively. The July 2025 Notes are registered and trade on the New York Stock Exchange.
(2)
In fiscal 2018 we entered into certain cross-currency interest rate swap agreements that have the economic effect of converting our fixed-rate, Euro-denominated debt, including annual interest payments and the payment of principal at maturity, to a variable-rate, U.S. Dollar-denominated debt of $871 million based on LIBOR. The effective interest rates as of May 31, 2023 and 2022 after consideration of the cross-currency interest rate swap agreements were 8.36% and 4.10%, respectively, for the July 2025 Notes. Refer to Note 1 for a description of our accounting for fair value hedges.
(3)
In fiscal 2023, we issued $12.3 billion of senior notes and used the net proceeds from the issuance of the senior notes to repay the amount of indebtedness outstanding under the Bridge Credit Agreement, to repay $1.3 billion of senior notes due February 2023 and to partially repay our outstanding commercial paper notes. The interest is payable semi-annually. We may redeem some or all of the senior notes of each series prior to their maturity, subject to certain restrictions, and the payment of an applicable make-whole premium in certain instances.
(4)
In fiscal 2023, we entered into certain interest rate swap agreements that have the economic effect of converting our floating-rate borrowings to fixed-rate borrowings with a fixed annual interest rate of 3.07%, plus a margin depending on the credit rating assigned to our long-term senior unsecured debt, as further discussed below.

Future principal payments (adjusted for the effects of the cross-currency interest rate swap agreements associated with the July 2025 Notes) for all of our borrowings at May 31, 2023 were as follows (in millions):

 

Fiscal 2024

 

$

4,063

 

Fiscal 2025

 

 

10,000

 

Fiscal 2026

 

 

5,694

 

Fiscal 2027

 

 

5,250

 

Fiscal 2028

 

 

10,170

 

Thereafter

 

 

55,750

 

Total

 

$

90,927

 

Senior Notes

Interest is payable semi-annually for the senior notes listed in the above table except for the Euro Notes for which interest is payable annually. We may redeem some or all of the senior notes of each series prior to their maturity, subject to certain restrictions, and the payment of an applicable make-whole premium in certain instances.

The senior notes rank pari passu with any other notes we may issue in the future pursuant to our commercial paper program (see additional discussion regarding our commercial paper program below) and all existing and future unsecured senior indebtedness of Oracle Corporation, including the Revolving Credit Agreement and the Term Loan Credit Agreement as described further below. All existing and future liabilities of the subsidiaries of Oracle Corporation are or will be effectively senior to the senior notes, borrowings under the Term Loan Credit Agreement, any future borrowings pursuant to the Revolving Credit Agreement and any future issuances of commercial paper notes. We were in compliance with all debt-related covenants at May 31, 2023.

Delayed Draw Term Loan Credit Agreement

On June 8, 2022, we borrowed $15.7 billion under a delayed draw term loan credit agreement (Bridge Credit Agreement) that we entered into in March 2022 to partly finance our acquisition of Cerner. The Bridge Credit Agreement provided that, subject to certain exceptions, net cash proceeds received by us from certain debt and equity issuances shall result in mandatory prepayments under the Bridge Credit Agreement. Interest was based on either (a) a Term Secured Overnight Financing Rate (SOFR)-based formula plus a margin of 100.0 basis points to 137.5 basis points, depending on the credit rating assigned to our long-term senior unsecured debt, or (b) a Base Rate formula plus a margin of 0.0 basis points to 37.5 basis points, depending on the same such credit rating, each as set forth in the Bridge Credit Agreement. The effective interest rate for fiscal 2023 was 3.57%. We fully repaid the amount borrowed under the Bridge Credit Agreement during fiscal 2023.

Revolving Credit Agreement

Our Revolving Credit Agreement provides for an unsecured $6.0 billion, five-year revolving credit facility (the Revolving Facility) to be used for our working capital purposes and for other general corporate purposes. Subject to certain conditions stated in the Revolving Credit Agreement, we may borrow, prepay and reborrow amounts under the Revolving Facility during the term of the Revolving Credit Agreement. All amounts borrowed under the Revolving Credit Agreement will become due on March 8, 2027, unless the commitments are terminated earlier either at our request or, if an event of default occurs, by the lenders (or automatically in the case of certain bankruptcy-related

events). Interest is based on either (a) a Term SOFR-based formula plus a margin of 87.5 basis points to 150.0 basis points, depending on the credit rating assigned to our long-term senior unsecured debt, or (b) a Base Rate formula plus a margin of 0.0 basis points to 50.0 basis points, depending on the same such credit rating, each as set forth in the Revolving Credit Agreement. As of May 31, 2023 and 2022, we did not have any outstanding borrowing under the Revolving Credit Agreement.

Five-Year Term Loan Credit Agreement

On August 16, 2022, we entered into a $4.4 billion term loan credit agreement (Term Loan Credit Agreement), which provides for a total term loan commitment of $4.4 billion, comprised of a $3.6 billion term loan (Term Loan 1 Facility) and a $790 million term loan (Term Loan 2 Facility and, together with the Term Loan 1 Facility, the Term Loan Facilities). The proceeds of the Term Loan Facilities may only be used to refinance indebtedness incurred under the Bridge Credit Agreement and to pay related fees and expenses.

On November 2, 2022, the total term loan commitment was increased by $1.3 billion, comprised of $1.1 billion under the Term Loan 1 Facility and $170 million under the Term Loan 2 Facility pursuant to the terms of the Term Loan Credit Agreement.

We may request additional commitments under the Term Loan Credit Agreement up to a maximum of $6.0 billion (each, an Incremental Borrowing). The use of proceeds of any Incremental Borrowing will be specified at the time of such borrowing and may include working capital purposes and other general corporate purposes.

We initially borrowed $4.4 billion on August 16, 2022, and we borrowed an incremental $1.3 billion on November 2, 2022, each under the Term Loan Facilities. We used the net proceeds of the borrowings under the Term Loan Credit Agreement to reduce the amount of indebtedness outstanding under the Bridge Credit Agreement. The effective interest rate for these borrowings during fiscal 2023 was 5.76%.

The Term Loan Credit Agreement provides for repayment of borrowings under the Term Loan Facilities as follows:

•
an amount equal to the amount borrowed reduced by any prepayments multiplied by 1.25% on September 30, 2024 and quarterly thereafter until June 30, 2026;
•
an amount equal to the amount borrowed reduced by any prepayments multiplied by 2.50% on September 30, 2026 and quarterly thereafter until June 30, 2027; and
•
any remaining unpaid principal balance under the Term Loan 1 Facility will become fully due and payable on August 16, 2027 and any remaining unpaid principal balance under the Term Loan 2 Facility will become fully due and payable on August 16, 2025 (subject to any extension of the Term Loan 2 Facility termination date, as set out below), unless the outstanding loans are prepaid earlier at the request of Oracle or accelerated by the lenders if an event of default occurs.

The termination date of the Term Loan 2 Facility may be extended at our sole option by up to 2 years. The termination date of each Term Loan Facility may also be further extended at each lender’s option by up to 2 years.

Interest is based on either (a) a Term SOFR-based formula plus a margin of 147.5 basis points to 197.5 basis points, depending on the credit rating assigned to our long-term senior unsecured debt, or (b) a Base Rate formula plus a margin of 47.5 basis points to 97.5 basis points, depending on the same such credit rating, each as set forth in the Term Loan Credit Agreement.

The Term Loan Credit Agreement contains certain customary representations and warranties, covenants and events of default, including the requirement that the ratio of “Consolidated EBITDA” to “Consolidated Net Interest Expense” (each term as defined in the Term Loan Credit Agreement) of Oracle and its subsidiaries shall not be less than 3.0 to 1.0 at the end of any fiscal quarter during the period that the Term Loan Credit Agreement is effective. If an event of default occurs under the Term Loan Credit Agreement and is not cured within the applicable grace period or waived, any unpaid amounts under the Term Loan Credit Agreement may be declared immediately due and payable. We were in compliance with such covenants as of May 31, 2023.

The summary above does not purport to be complete and is qualified in its entirety by reference to the full text of the Term Loan Credit Agreement.

Cash Flow Hedge—Interest Rate Swap Agreements

In August 2022, we entered into certain interest rate swap agreements to manage the related interest rate risk of $4.4 billion borrowings under the Term Loan Credit Agreement by effectively converting the floating-rate to fixed-rate. The economic effect of the swap agreements was to eliminate the uncertainty of the cash flows associated with floating-rate interest payments of the Term Loan Credit Agreement by a fixed annual interest rate of 3.07%, plus a margin depending on the credit rating assigned to our long-term senior unsecured debt as mentioned above. We have designated these interest rate swap agreements as qualifying hedging instruments and are accounting for these as cash flow hedges pursuant to ASC 815, Derivatives and Hedging.

The fair values of these interest rate swap agreements are recognized either as non-current assets or non-current liabilities in our consolidated balance sheets. Changes in the fair values of these interest rate swap agreements are reported in accumulated other comprehensive loss in our consolidated balance sheets and an amount is reclassified out of accumulated other comprehensive loss into non-operating income or expense, net in the same period that corresponding interest expense is recognized.

We do not use any interest rate swap agreements for trading purposes.

Cerner Senior Notes and Other Borrowings

In connection with our acquisition of Cerner, we assumed:

•
$1.0 billion par value of legacy Cerner senior notes. The acquisition triggered a mandatory offer to prepay such senior notes in accordance with the terms of the underlying note purchase agreements. Holders of $931 million par value of senior notes exercised the option for prepayment, and accordingly, such notes together with accrued interest were redeemed on June 8, 2022, and the remaining outstanding senior notes together with accrued interest were redeemed during the second quarter of fiscal 2023; and
•
$600 million of principal amount of revolving credit loans. The entire loan along with accrued interest was settled and the credit facility was terminated on June 8, 2022.

Commercial Paper Program and Commercial Paper Notes

During the first quarter of fiscal 2023, our commercial paper program was increased to $6.0 billion. Our commercial paper program allows us to issue and sell unsecured short-term promissory notes pursuant to a private placement exemption from the registration requirements under federal and state securities laws pursuant to dealer agreements with various banks and an Issuing and Paying Agency Agreement with Deutsche Bank Trust Company Americas.

There were $563 million of outstanding commercial paper notes as of May 31, 2023 (none outstanding as of May 31, 2022) that mature at various dates through June 2023. The effective interest rate including issuance costs was 4.89% for fiscal 2023. We use the net proceeds from the issuance of commercial paper for general corporate purposes.
v3.23.2
RESTRUCTURING ACTIVITIES
 12 Months Ended
May 31, 2023
Restructuring And Related Activities [Abstract]  
RESTRUCTURING ACTIVITIES
8.
RESTRUCTURING ACTIVITIES

Fiscal 2022 Oracle Restructuring Plan

During fiscal 2022, our management approved, committed to and initiated plans to restructure and further improve efficiencies in our operations due to our acquisitions and certain other operational activities (2022 Restructuring Plan). In fiscal 2023, our management supplemented the 2022 Restructuring Plan to reflect additional actions that we expected to take. Restructuring costs associated with the 2022 Restructuring Plan were recorded to the restructuring expense line item within our consolidated statements of operations as they were incurred. We recorded $493 million and $223 million of restructuring expenses in connection with the 2022 Restructuring Plan in

fiscal 2023 and 2022, respectively. The total costs recorded to date in our consolidated statements of operations in connection with the 2022 Restructuring Plan were $716 million. Actions pursuant to the 2022 Restructuring Plan were substantially complete as of May 31, 2023.

Fiscal 2019 Oracle Restructuring Plan

During fiscal 2019, our management approved, committed to and initiated plans to restructure and further improve efficiencies in our operations due to our acquisitions and certain other operational activities (2019 Restructuring Plan). In fiscal 2021, our management supplemented the 2019 Restructuring Plan to reflect additional actions that we expected to take. Restructuring costs associated with the 2019 Restructuring Plan were recorded to the restructuring expense line item within our consolidated statements of operations as they were incurred. We recorded $430 million of restructuring expenses in connection with the 2019 Restructuring Plan in fiscal 2021. The total costs recorded in our consolidated statements of operations in connection with the 2019 Restructuring Plan were $1.2 billion. Actions pursuant to the 2019 Restructuring Plan were substantially complete as of May 31, 2021.

Summary of All Plans

Fiscal 2023 Activity

 

 

 

Accrued

 

 

Year Ended May 31, 2023

 

 

Accrued

 

(in millions)

 

May 31,
2022(2)

 

 

Initial
Costs(3)

 

 

Adj. to
Cost(4)

 

 

Cash
Payments

 

 

Others(5)

 

 

May 31,
2023(2)

 

Fiscal 2022 Oracle Restructuring Plan(1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cloud and license

 

$

34

 

 

$

288

 

 

$

(6

)

 

$

(218

)

 

$

1

 

 

$

99

 

Hardware

 

 

7

 

 

 

18

 

 

 

—

 

 

 

(18

)

 

 

(1

)

 

 

6

 

Services

 

 

9

 

 

 

28

 

 

 

—

 

 

 

(19

)

 

 

(1

)

 

 

17

 

Other

 

 

10

 

 

 

162

 

 

 

3

 

 

 

(141

)

 

 

1

 

 

 

35

 

Total Fiscal 2022 Oracle Restructuring Plan

 

$

60

 

 

$

496

 

 

$

(3

)

 

$

(396

)

 

$

—

 

 

$

157

 

Total other restructuring plans(6)

 

$

71

 

 

$

1

 

 

$

(4

)

 

$

(22

)

 

$

(4

)

 

$

42

 

Total restructuring plans

 

$

131

 

 

$

497

 

 

$

(7

)

 

$

(418

)

 

$

(4

)

 

$

199

 

 

Fiscal 2022 Activity

 

 

 

Accrued

 

 

Year Ended May 31, 2022

 

 

Accrued

 

(in millions)

 

May 31,
2021

 

 

Initial
Costs(3)

 

 

Adj. to
Cost(4)

 

 

Cash
Payments

 

 

Others(5)

 

 

May 31,
2022(2)

 

Fiscal 2022 Oracle Restructuring Plan(1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cloud and license

 

$

—

 

 

$

90

 

 

$

(2

)

 

$

(52

)

 

$

(2

)

 

$

34

 

Hardware

 

 

—

 

 

 

11

 

 

 

—

 

 

 

(4

)

 

 

—

 

 

 

7

 

Services

 

 

—

 

 

 

16

 

 

 

—

 

 

 

(7

)

 

 

—

 

 

 

9

 

Other

 

 

—

 

 

 

105

 

 

 

3

 

 

 

(29

)

 

 

(69

)

 

 

10

 

Total Fiscal 2022 Oracle Restructuring Plan

 

$

—

 

 

$

222

 

 

$

1

 

 

$

(92

)

 

$

(71

)

 

$

60

 

Total other restructuring plans(6)

 

$

225

 

 

$

—

 

 

$

(32

)

 

$

(109

)

 

$

(13

)

 

$

71

 

Total restructuring plans

 

$

225

 

 

$

222

 

 

$

(31

)

 

$

(201

)

 

$

(84

)

 

$

131

 

 

Fiscal 2021 Activity

 

 

 

Accrued

 

 

Year Ended May 31, 2021

 

 

Accrued

 

(in millions)

 

May 31,
2020

 

 

Initial
Costs(3)

 

 

Adj. to
Cost(4)

 

 

Cash
Payments

 

 

Others(5)

 

 

May 31,
2021

 

Fiscal 2019 Oracle Restructuring Plan(1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cloud and license

 

$

75

 

 

$

225

 

 

$

(22

)

 

$

(171

)

 

$

12

 

 

$

119

 

Hardware

 

 

14

 

 

 

39

 

 

 

(2

)

 

 

(34

)

 

 

(1

)

 

 

16

 

Services

 

 

27

 

 

 

54

 

 

 

(4

)

 

 

(56

)

 

 

3

 

 

 

24

 

Other

 

 

22

 

 

 

137

 

 

 

3

 

 

 

(110

)

 

 

5

 

 

 

57

 

Total Fiscal 2019 Oracle Restructuring Plan

 

$

138

 

 

$

455

 

 

$

(25

)

 

$

(371

)

 

$

19

 

 

$

216

 

Total other restructuring plans(6)

 

$

13

 

 

$

2

 

 

$

(1

)

 

$

(5

)

 

$

—

 

 

$

9

 

Total restructuring plans

 

$

151

 

 

$

457

 

 

$

(26

)

 

$

(376

)

 

$

19

 

 

$

225

 

 

(1)
Restructuring costs recorded to each of the operating segments presented primarily related to employee severance costs. Other restructuring costs represented employee severance costs not related to our operating segments and certain other restructuring plan costs.
(2)
As of May 31, 2023 and 2022, substantially all restructuring liabilities have been recorded in other current liabilities within our consolidated balance sheets.
(3)
Costs recorded for the respective restructuring plans during the 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 non-cash adjustments.
(6)
Other restructuring plans presented in the tables above included condensed information for other Oracle based plans and other plans associated with certain of our acquisitions whereby we continued to make cash outlays to settle obligations under these plans during the periods presented but for which the periodic impact to our consolidated statements of operations was not significant.
v3.23.2
DEFERRED REVENUES
 12 Months Ended
May 31, 2023
Deferred Revenue Disclosure [Abstract]  
DEFERRED REVENUES
9.
DEFERRED REVENUES

Deferred revenues consisted of the following:

 

 

May 31,

 

(in millions)

 

2023

 

 

2022

 

Cloud services and license support

 

$

7,983

 

 

$

7,406

 

Hardware

 

 

535

 

 

 

555

 

Services

 

 

400

 

 

 

360

 

Cloud license and on-premise license

 

 

52

 

 

 

36

 

Deferred revenues, current

 

 

8,970

 

 

 

8,357

 

Deferred revenues, non-current (in other non-current liabilities)

 

 

968

 

 

 

753

 

Total deferred revenues

 

$

9,938

 

 

$

9,110

 

 

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 or based upon customer usage over the respective 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 cloud license and on-premise license revenues typically resulted from customer payments that related to undelivered products and services or specified enhancements.
v3.23.2
LEASES, OTHER COMMITMENTS AND CERTAIN CONTINGENCIES
 12 Months Ended
May 31, 2023
Leases Other Commitments And Certain Contingencies Disclosure [Abstract]  
LEASES, OTHER COMMITMENTS AND CERTAIN CONTINGENCIES
10.
LEASES, OTHER COMMITMENTS AND CERTAIN CONTINGENCIES

Leases

We have operating leases that primarily relate to certain of our facilities, data centers and vehicles. As of May 31, 2023, our operating leases substantially have remaining terms of one year to fifteen years, some of which include options to extend and/or terminate the leases.

Operating lease expenses totaled $873 million, net of sublease income of $11 million in fiscal 2023 and $766 million, net of sublease income of $12 million in fiscal 2022. At May 31, 2023, ROU assets, current lease liabilities and non-current lease liabilities for our operating leases were $4.6 billion, $865 million and $4.0 billion, respectively. We

recorded ROU assets of $2.0 billion in exchange for operating lease obligations during the year ended May 31, 2023. Cash paid for amounts included in the measurement of operating lease liabilities was $894 million and $808 million for the year ended May 31, 2023 and 2022, respectively. As of May 31, 2023, the weighted average remaining lease term for operating leases was approximately eight years and the weighted average discount rate used for calculating operating lease obligations was 4.0%. As of May 31, 2023, we have $9.1 billion of additional operating lease commitments, primarily for data centers, that are expected to commence in fiscal 2024 generally for terms of three to fifteen years that were not reflected on our consolidated balance sheet as of May 31, 2023 or in the maturities table below.

Maturities of operating lease liabilities were as follows as of May 31, 2023 (in millions):

 

Fiscal 2024

 

$

906

 

Fiscal 2025

 

 

832

 

Fiscal 2026

 

 

783

 

Fiscal 2027

 

 

683

 

Fiscal 2028

 

 

593

 

Thereafter

 

 

1,889

 

Total operating lease payments

 

 

5,686

 

Less: imputed interest

 

 

(837

)

Total operating lease liability

 

$

4,849

 

 

Unconditional Obligations

In the ordinary course of business, we enter into certain unconditional purchase obligations with our suppliers, which are agreements that are enforceable and legally binding and specify terms, including: fixed or minimum quantities to be purchased; fixed, minimum or variable price provisions; and the approximate timing of the payment. We utilize several external manufacturers to manufacture sub-assemblies, perform final assemblies and perform testing of our hardware products. We also obtain individual components for our hardware products from a variety of individual suppliers based on projected demand information. Such purchase commitments are based on our forecasted component and manufacturing requirements and typically provide for fulfillment within agreed upon lead-times and/or commercially standard lead-times for the particular part or product and have been included in the amounts disclosed below. Certain routine arrangements for other materials and goods that are not related to our external manufacturers and certain other suppliers and that are entered into in the ordinary course of business are not included in the amounts below, as they are generally entered into in order to secure pricing or other negotiated terms and are difficult to quantify in a meaningful way.

As of May 31, 2023, our unconditional purchase and certain other obligations were as follows (in millions):

 

Fiscal 2024

 

$

1,732

 

Fiscal 2025

 

 

294

 

Fiscal 2026

 

 

174

 

Fiscal 2027

 

 

134

 

Fiscal 2028

 

 

77

 

Thereafter

 

 

360

 

Total

 

$

2,771

 

 

As described in Note 7 above, as of May 31, 2023 we have senior notes and other borrowings that mature at various future dates and derivative financial instruments outstanding that we leverage to manage certain risks and exposures.

Guarantees

Our cloud, license and hardware sales agreements generally include certain provisions for indemnifying customers against liabilities if our products infringe a third party’s intellectual property rights. To date, we have not incurred

any material costs as a result of such indemnifications and have not accrued any material liabilities related to such obligations in our consolidated financial statements. Certain of our sales agreements also include provisions indemnifying customers against liabilities in the event we breach confidentiality or service level requirements. It is not possible to determine the maximum potential amount under these indemnification agreements due to our limited and infrequent history of prior indemnification claims and the unique facts and circumstances involved in each particular agreement.

Our Oracle Cloud Services agreements generally include a warranty that the cloud services will be performed in all material respects as defined in the agreement during the service period. Our license and hardware agreements also generally include a warranty that our products will substantially operate as described in the applicable program documentation for a period of one year after delivery. We also warrant that services we perform will be provided in a manner consistent with industry standards for a period of 90 days from performance of the services.

We occasionally are required, for various reasons, to enter into financial guarantees with third parties in the ordinary course of our business including, among others, guarantees related to taxes, import licenses and letters of credit on behalf of parties with whom we conduct business. Such agreements have not had a material effect on our results of operations, financial position or cash flows.
v3.23.2
STOCKHOLDERS' EQUITY (DEFICIT)
 12 Months Ended
May 31, 2023
Stockholders Equity Note [Abstract]  
STOCKHOLDERS' EQUITY(DEFICIT)
11.
STOCKHOLDERS’ EQUITY (DEFICIT)

Common Stock Repurchases

Our Board of Directors has approved a program for us to repurchase shares of our common stock. As of May 31, 2023, approximately $8.2 billion remained available for stock repurchases pursuant to our stock repurchase program. We repurchased 17.0 million shares for $1.3 billion, 185.8 million shares for $16.2 billion, and 329.2 million shares for $21.0 billion in fiscal 2023, 2022 and 2021, respectively, 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 trading plan. Our stock repurchase program may be accelerated, suspended, delayed or discontinued at any time.

Dividends on Common Stock

During fiscal 2023, 2022 and 2021, our Board of Directors declared cash dividends of $1.36, $1.28 and $1.04 per share of our outstanding common stock, respectively, which we paid during the same period.

In June 2023, our Board of Directors declared a quarterly cash dividend of $0.40 per share of our outstanding common stock. The dividend is payable on July 26, 2023 to stockholders of record as of the close of business on July 12, 2023. Future declarations of dividends and the establishment of future record and payment dates are subject to the final determination of our Board of Directors.

Accumulated Other Comprehensive Loss

The following table summarizes, as of each balance sheet date, the components of our AOCL, net of income taxes:

 

 

 

May 31,

 

(in millions)

 

2023

 

 

2022

 

Foreign currency translation losses

 

$

(1,686

)

 

$

(1,482

)

Unrealized gains on marketable securities, net

 

 

1

 

 

 

—

 

Unrealized gains (losses) on defined benefit plans, net

 

 

61

 

 

 

(210

)

Unrealized gains on cash flow hedges, net

 

 

102

 

 

 

—

 

Total accumulated other comprehensive loss

 

$

(1,522

)

 

$

(1,692

)
v3.23.2
EMPLOYEE BENEFIT PLANS
 12 Months Ended
May 31, 2023
Compensation Related Costs [Abstract]  
EMPLOYEE BENEFIT PLANS
12.
EMPLOYEE BENEFIT PLANS

Stock-Based Compensation Plans

Stock Plans

In fiscal 2021, we adopted the 2020 Equity Incentive Plan to replace the Amended and Restated 2000 Long-Term Equity Incentive Plan (the 2000 Plan) which provides for the issuance of long-term performance awards, including restricted stock-based awards, non-qualified stock options and incentive stock options, as well as stock purchase rights and stock appreciation rights, to our eligible employees, officers and directors who are also employees or consultants, independent consultants and advisers. In fiscal 2022, our stockholders, upon the recommendation of our Board of Directors (the Board), approved the adoption of the Amended and Restated 2020 Equity Incentive Plan (the 2020 Plan and, together with the 2000 Plan, the Plans), which increased the number of authorized shares of stock that may be issued under the 2020 Plan by 300 million shares.

The total number of shares authorized under the 2020 Plan is (i) 390,000,000 shares, plus (ii) 132,921,827 shares, which were the number of shares that were unissued and available for grant under the 2000 Plan as of the date that the 2020 Plan was originally adopted, plus (iii) the number of shares granted and outstanding as of the date that the 2020 Plan was originally adopted which would have been available again for issuance under the terms of the 2000 Plan had the 2020 Plan not been adopted. Under the 2020 Plan, for each share granted as a full value award in the form of a restricted stock unit (RSU) or a performance-based restricted stock award (PSU), an equivalent of 2.5 shares is deducted from our pool of shares available for grant.

As of May 31, 2023, 146 million unvested RSUs, 36 million performance-based stock options (PSOs), of which 6 million shares were vested, and service-based stock options (SOs) to purchase 28 million shares of common stock, substantially all of which were vested, were outstanding under the Plans. Approximately 208 million shares of common stock were available for future awards under the 2020 Plan as of May 31, 2023. To date, we have not issued any stock options under the 2020 Plan or any stock purchase rights or stock appreciation rights under either of the Plans.

The vesting schedule for all awards granted under the Plans is established by the Compensation Committee of the Board. RSUs generally require service-based vesting of 25% annually over four years. SOs were previously granted under the 2000 Plan at not less than fair market value, become exercisable generally 25% annually over four years of service, and generally expire 10 years from the date of grant.

PSOs granted under the 2000 Plan to our Chief Executive Officer and Chief Technology Officer in fiscal 2018 consisted of seven numerically equivalent vesting tranches that potentially could vest. One tranche, which was based solely on the attainment of a market-based metric, was achieved and vested in fiscal 2022. Each of the remaining six tranches requires the attainment of both a performance metric and a market capitalization metric by May 31, 2022, which was subsequently extended by three additional fiscal years to May 31, 2025 via an amendment approved by the Compensation Committee of the Board during fiscal 2022. If any of the remaining operational and market capitalization performance goals are achieved before May 31, 2025 additional tranches may vest, assuming continued employment and service through the date the Compensation Committee of the Board certifies that performance has been achieved. Upon amendment of the PSOs in fiscal 2022, we estimated the revised fair values of the six unvested tranches of the PSOs using a Monte Carlo simulation approach. We are recognizing incremental stock-based compensation expense related to these amended awards for any of the remaining unvested tranches that are probable of achievement over the longer of the (a) estimated implicit service period for performance-metric achievement, or (b) derived service period for market-based metric achievement. Stock-based compensation associated with a vesting tranche where vesting is no longer determined to be probable is reversed on a cumulative basis and is no longer prospectively recognized in the period when such a determination is made. We have estimated remaining service periods for those tranches that have been deemed probable of achievement as of May 31, 2023 to be approximately one to two years.

In connection with certain of our acquisitions, we assumed certain outstanding restricted stock-based awards and stock options under each acquired company’s respective stock plans, or we substituted substantially similar awards under the Plans. These restricted stock-based awards and stock options assumed or substituted generally retained

all of the rights, terms and conditions of the respective plans under which they were originally granted. As of May 31, 2023, 3 million unvested RSUs and stock options to purchase approximately 459,000 shares of common stock, substantially all of which were vested, were outstanding under acquired company stock plans that Oracle assumed.

In fiscal 1993, the Board adopted the 1993 Directors’ Stock Plan (the Directors’ Plan), which provides for the issuance of RSUs and other stock-based awards, including non-qualified stock options, to non-employee directors. The Directors’ Plan has from time to time been amended and restated. Under the terms of the Directors’ Plan, 10 million shares of common stock are reserved for issuance (including a fiscal 2013 amendment to increase the number of shares of our common stock reserved for issuance by 2 million shares). In prior years, we granted stock options at not less than fair market value, that vest over four years, and expire no more than 10 years from the date of grant. Currently, we only grant RSUs that vest fully on the one-year anniversary of the date of grant. The Directors’ Plan was most recently amended on April 29, 2016 and permits the Compensation Committee of the Board to determine the amount and form of automatic grants of stock awards, if any, to each non-employee director upon first becoming a director and thereafter on an annual basis, as well as automatic grants for chairing certain Board committees, subject to certain stockholder approved limitations set forth in the Directors’ Plan. In April 2020, the Compensation Committee reduced the maximum value of the annual automatic RSU grants to each non-employee director from $400,000 to $350,000 and eliminated all equity grants for chairing board committees. As of May 31, 2023, approximately 40,000 unvested RSUs and stock options to purchase approximately 339,000 shares of common stock (all of which were vested) were outstanding under the Directors’ Plan. As of May 31, 2023, approximately 1 million shares were available for future stock awards under this plan.

The following table summarizes restricted stock-based award activity granted pursuant to Oracle-based stock plans for our last three fiscal years ended May 31, 2023:

 

 

Restricted Stock-Based Awards Outstanding

 

(in millions, except fair value)

 

Number of
Shares

 

 

Weighted-Average
Grant Date Fair Value

 

Balance, May 31, 2020

 

 

101

 

 

$

48.36

 

Granted

 

 

54

 

 

$

54.95

 

Vested and issued

 

 

(34

)

 

$

46.88

 

Canceled

 

 

(11

)

 

$

50.40

 

Balance, May 31, 2021

 

 

110

 

 

$

51.87

 

Granted

 

 

65

 

 

$

85.07

 

Vested and issued

 

 

(38

)

 

$

50.52

 

Canceled

 

 

(9

)

 

$

63.25

 

Balance, May 31, 2022

 

 

128

 

 

$

68.34

 

Granted

 

 

76

 

 

$

66.67

 

Assumed

 

 

5

 

 

$

69.02

 

Vested and issued

 

 

(46

)

 

$

62.97

 

Canceled

 

 

(11

)

 

$

69.25

 

Balance, May 31, 2023

 

 

152

 

 

$

69.09

 

 

The total grant date fair values of restricted stock-based awards that were vested and issued in fiscal 2023, 2022 and 2021 were $2.9 billion, $1.9 billion and $1.6 billion, respectively. As of May 31, 2023, total unrecognized stock-based compensation expense related to non-vested restricted stock-based awards was $7.2 billion and is expected to be recognized over the remaining weighted-average vesting period of 2.76 years.

The following table summarizes stock option activity, including SOs and PSOs, and includes awards granted pursuant to the Plans and stock plans assumed from our acquisitions for our last three fiscal years ended May 31, 2023:

 

 

Options Outstanding

 

(in millions, except exercise price)

 

Shares Under
Stock Option

 

 

Weighted-Average
Exercise Price

 

Balance, May 31, 2020

 

 

176

 

 

$

38.86

 

Granted and assumed

 

 

—

 

 

$

—

 

Exercised

 

 

(52

)

 

$

32.05

 

Canceled

 

 

(17

)

 

$

51.02

 

Balance, May 31, 2021

 

 

107

 

 

$

40.14

 

Granted and assumed

 

 

—

 

 

$

—

 

Exercised

 

 

(10

)

 

$

34.34

 

Canceled

 

 

—

 

 

$

—

 

Balance, May 31, 2022

 

 

97

 

 

$

40.70

 

Granted and assumed

 

 

—

 

 

$

—

 

Exercised

 

 

(33

)

 

$

31.37

 

Canceled

 

 

—

 

 

$

—

 

Balance, May 31, 2023

 

 

64

 

 

$

45.42

 

Stock options outstanding that have vested and that are expected to vest as of May 31, 2023 were as follows:

 

 

Outstanding
Stock Options
(in millions)

 

 

Weighted-Average
Exercise Price

 

 

Weighted-Average
Remaining Contract Term
(in years)

 

 

Aggregate
Intrinsic Value(1) 
(in millions)

 

Vested

 

 

34

 

 

$

40.41

 

 

 

1.87

 

 

$

2,254

 

Expected to vest(2)

 

 

15

 

 

$

51.10

 

 

 

2.29

 

 

 

837

 

Total

 

 

49

 

 

$

43.69

 

 

 

2.00

 

 

$

3,091

 

 

(1)
The aggregate intrinsic value was calculated based on the gross difference between our closing stock price on the last trading day of fiscal 2023 of $105.94 and the exercise prices for all “in-the-money” options outstanding, excluding tax effects.
(2)
The unrecognized compensation expense calculated under the fair value method for shares expected to vest (unvested shares net of expected forfeitures) as of May 31, 2023 was approximately $134 million and is expected to be recognized over a weighted-average period of 1.57 years. Approximately 15 million shares outstanding as of May 31, 2023 were not expected to vest.

Stock-Based Compensation Expense and Valuations of Restricted Stock-Based Awards

We estimated the fair values of our restricted stock-based awards that are solely subject to service-based vesting requirements based upon their market values as of the grant dates, discounted for the present values of expected dividends.

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

 

 

Year Ended May 31,

 

(in millions)

 

2023

 

 

2022

 

 

2021

 

Cloud services and license support

 

$

435

 

 

$

205

 

 

$

134

 

Hardware

 

 

18

 

 

 

15

 

 

 

11

 

Services

 

 

137

 

 

 

67

 

 

 

55

 

Sales and marketing

 

 

611

 

 

 

448

 

 

 

313

 

Research and development

 

 

1,983

 

 

 

1,633

 

 

 

1,188

 

General and administrative

 

 

363

 

 

 

245

 

 

 

136

 

Total stock-based compensation

 

 

3,547

 

 

 

2,613

 

 

 

1,837

 

Estimated income tax benefit included in provision for income taxes

 

 

(802

)

 

 

(593

)

 

 

(413

)

Total stock-based compensation, net of estimated income tax benefit

 

$

2,745

 

 

$

2,020

 

 

$

1,424

 

 

Tax Benefits from Exercises of Stock Options and Vesting of Restricted Stock-Based Awards

Total cash received as a result of stock option exercises was approximately $1.0 billion, $319 million and $1.7 billion for fiscal 2023, 2022 and 2021, respectively. The total aggregate intrinsic value of restricted stock-based awards that vested and were issued and stock options that were exercised was $5.1 billion for fiscal 2023 and $3.7 billion for each of fiscal 2022 and 2021. In connection with the vesting and issuance of restricted stock-based awards and stock options that were exercised, the tax benefits realized by us were $1.2 billion, $843 million and $842 million for fiscal 2023, 2022 and 2021, respectively.

Employee Stock Purchase Plan

We have an Employee Stock Purchase Plan (Purchase Plan) that allows employees to purchase shares of common stock at a price per share that is 95% of the fair market value of Oracle stock as of the end of the semi-annual option period. As of May 31, 2023, 37 million shares were reserved for future issuances under the Purchase Plan. We issued approximately 2 million shares in each of fiscal 2023, 2022 and 2021 under the Purchase Plan.

Defined Contribution and Other Postretirement Plans

We offer various defined contribution plans for our U.S. and non-U.S. employees. Total defined contribution plan expense was $470 million, $412 million and $380 million for fiscal 2023, 2022 and 2021, respectively.

In the U.S., regular employees can participate in the Oracle Corporation 401(k) Savings and Investment Plan (Oracle 401(k) Plan). Participants can generally contribute up to 40% of their eligible compensation on a per-pay-period basis as defined by the Oracle 401(k) Plan document or by the section 402(g) limit as defined by the U.S. Internal Revenue Service (IRS). We match a portion of employee contributions, currently 50% up to 6% of compensation each pay period, subject to maximum aggregate matching amounts. Our contributions to the Oracle 401(k) Plan, net of forfeitures, were $198 million, $164 million and $150 million in fiscal 2023, 2022 and 2021, respectively.

We also offer non-qualified deferred compensation plans to certain employees whereby they may defer a portion of their annual base and/or variable compensation until retirement or a date specified by the employee in accordance with the plans. Deferred compensation plan assets and liabilities were each approximately $792 million and approximately $756 million as of May 31, 2023 and 2022, respectively, and were presented in other non-current assets and other non-current liabilities in the accompanying consolidated balance sheets.

We sponsor certain defined benefit pension plans that are offered primarily by certain of our foreign subsidiaries. Many of these plans were assumed through our acquisitions or are required by local regulatory requirements. We may deposit funds for these plans with insurance companies, third-party trustees, or into government-managed accounts consistent with local regulatory requirements, as applicable. Our total defined benefit plan pension expenses were $78 million, $67 million and $105 million for fiscal 2023, 2022 and 2021, respectively. The aggregate projected benefit obligation and aggregate net liability (funded status, which is substantially included in other non-current liabilities in our consolidated balance sheets) of our defined benefit plans as of May 31, 2023 were $939 million and $322 million, respectively, and as of May 31, 2022 were $1.1 billion and $580 million, respectively.
v3.23.2
INCOME TAXES
 12 Months Ended
May 31, 2023
Income Tax Disclosure [Abstract]  
INCOME TAXES
13.
INCOME TAXES

Our effective tax rates for each of the periods presented are the result of the mix of income and losses earned in various tax jurisdictions that apply a broad range of income tax rates. Our (provision for) benefit from income taxes varied from the tax computed at the U.S. federal statutory income tax rate for fiscal 2023, 2022 and 2021 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 and the tax effect of Global Intangible Low-Taxed Income. In addition, for fiscal 2021, our benefit from income taxes varied from the tax computed at the U.S. federal statutory income tax rate primarily due to a total net deferred tax benefit of $2.3 billion as a result of a partial realignment of our legal entity structure that resulted in the intra-group transfer of certain intellectual property rights.

The following is a geographical breakdown of income before income taxes:

 

 

 

Year Ended May 31,

 

(in millions)

 

2023

 

 

2022

 

 

2021

 

Domestic

 

$

1,492

 

 

$

(629

)

 

$

4,375

 

Foreign

 

 

7,634

 

 

 

8,278

 

 

 

8,624

 

Income before income taxes

 

$

9,126

 

 

$

7,649

 

 

$

12,999

 

 

The (provision for) benefit from income taxes consisted of the following:

 

 

 

Year Ended May 31,

 

(Dollars in millions)

 

2023

 

 

2022

 

 

2021

 

Current provision:

 

 

 

 

 

 

 

 

 

Federal

 

$

(625

)

 

$

(709

)

 

$

(516

)

State

 

 

(398

)

 

 

(186

)

 

 

(233

)

Foreign

 

 

(1,767

)

 

 

(1,183

)

 

 

(929

)

Total current provision

 

$

(2,790

)

 

$

(2,078

)

 

$

(1,678

)

Deferred benefit:

 

 

 

 

 

 

 

 

 

Federal

 

$

2,193

 

 

$

1,661

 

 

$

(8,631

)

State

 

 

398

 

 

 

139

 

 

 

77

 

Foreign

 

 

(424

)

 

 

(654

)

 

 

10,979

 

Total deferred benefit

 

$

2,167

 

 

$

1,146

 

 

$

2,425

 

Total (provision for) benefit from income taxes

 

$

(623

)

 

$

(932

)

 

$

747

 

Effective income tax expense (benefit) rate

 

6.8%

 

 

12.2%

 

 

(5.7%)

 

 

The (provision for) benefit from income taxes differed from the amount computed by applying the federal statutory rate to our income before income taxes as follows:

 

 

 

Year Ended May 31,

 

(Dollars in millions)

 

2023

 

 

2022

 

 

2021

 

U.S. federal statutory tax rate

 

21.0%

 

 

21.0%

 

 

21.0%

 

Tax provision at statutory rate

 

$

(1,917

)

 

$

(1,606

)

 

$

(2,730

)

Foreign earnings at other than United States rates

 

 

357

 

 

 

536

 

 

 

580

 

Net impact of intra-entity IP transfer

 

 

—

 

 

 

—

 

 

 

2,266

 

State tax expense, net of federal benefit

 

 

(41

)

 

 

(132

)

 

 

(206

)

Settlements and releases from judicial decisions and statute expirations, net

 

 

552

 

 

 

263

 

 

 

582

 

Tax contingency interest accrual, net

 

 

(101

)

 

 

(44

)

 

 

(55

)

Domestic tax contingency, net

 

 

(28

)

 

 

(441

)

 

 

(282

)

Federal research and development credit

 

 

280

 

 

 

222

 

 

 

169

 

Stock-based compensation

 

 

322

 

 

 

263

 

 

 

300

 

Other, net

 

 

(47

)

 

 

7

 

 

 

123

 

Total (provision for) benefit from income taxes

 

$

(623

)

 

$

(932

)

 

$

747

 

 

The components of our deferred tax assets and liabilities were as follows:

 

 

 

May 31,

 

(in millions)

 

2023

 

 

2022

 

Deferred tax assets:

 

 

 

 

 

 

Accruals and allowances

 

$

928

 

 

$

493

 

Employee compensation and benefits

 

 

811

 

 

 

818

 

Differences in timing of revenue recognition

 

 

662

 

 

 

623

 

Lease liabilities

 

 

1,036

 

 

 

688

 

Basis of property, plant and equipment and intangible assets

 

 

9,989

 

 

 

11,362

 

Capitalized research and development

 

 

1,421

 

 

 

—

 

Tax credit and net operating loss carryforwards

 

 

4,941

 

 

 

4,409

 

Other

 

 

189

 

 

 

141

 

Total deferred tax assets

 

 

19,977

 

 

 

18,534

 

Valuation allowance

 

 

(1,940

)

 

 

(1,742

)

Total deferred tax assets, net

 

 

18,037

 

 

 

16,792

 

Deferred tax liabilities:

 

 

 

 

 

 

Unrealized gain on stock

 

 

(79

)

 

 

(78

)

Acquired intangible assets

 

 

(2,124

)

 

 

(126

)

GILTI deferred

 

 

(8,124

)

 

 

(8,937

)

ROU assets

 

 

(1,000

)

 

 

(668

)

Withholding taxes on foreign earnings

 

 

(256

)

 

 

(232

)

Total deferred tax liabilities

 

 

(11,583

)

 

 

(10,041

)

Net deferred tax assets

 

$

6,454

 

 

$

6,751

 

Recorded as:

 

 

 

 

 

 

Non-current deferred tax assets

 

$

12,226

 

 

$

12,782

 

Non-current deferred tax liabilities

 

 

(5,772

)

 

 

(6,031

)

Net deferred tax assets

 

$

6,454

 

 

$

6,751

 

 

We provide for United States income taxes on the undistributed earnings and the other outside basis temporary differences of foreign subsidiaries unless they are considered indefinitely reinvested outside the United States. At May 31, 2023, the amount of temporary differences related to undistributed earnings and other outside basis temporary differences of investments in foreign subsidiaries upon which U.S. income taxes have not been provided was approximately $11.0 billion. If the undistributed earnings and other outside basis differences were recognized in a taxable transaction, they would generate foreign tax credits that would reduce the federal tax liability associated

with the foreign dividend or the otherwise taxable transaction. At May 31, 2023, assuming a full utilization of the foreign tax credits, the potential net deferred tax liability associated with these other outside basis temporary differences would be approximately $2.0 billion.

Our net deferred tax assets were $6.5 billion and $6.8 billion as of May 31, 2023 and 2022, 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.

The valuation allowance was $1.9 billion and $1.7 billion as of May 31, 2023 and 2022, respectively. A majority of the valuation allowances as of May 31, 2023 and 2022 related to tax assets established in purchase accounting and other tax credits. Any subsequent reduction of that portion of the valuation allowance and the recognition of the associated tax benefits associated with our acquisitions will be recorded to our provision for income taxes subsequent to our final determination of the valuation allowance or the conclusion of the measurement period (as defined above), whichever comes first.

At May 31, 2023, we had federal net operating loss carryforwards of approximately $380 million, which are subject to limitation on their utilization. Approximately $304 million of these federal net operating losses expire in various years between fiscal 2024 and fiscal 2038. Approximately $76 million of these federal net operating losses are not currently subject to expiration dates. We had state net operating loss carryforwards of approximately $2.2 billion at May 31, 2023, which expire between fiscal 2024 and fiscal 2043 and are subject to limitations on their utilization. We had total foreign net operating loss carryforwards of approximately $1.9 billion at May 31, 2023, which are subject to limitations on their utilization. Approximately $1.8 billion of these foreign net operating losses are not currently subject to expiration dates. The remainder of the foreign net operating losses, approximately $61 million, expire between fiscal 2024 and fiscal 2039. At May 31, 2023, we had federal capital loss carryforwards of approximately $141 million, which expire in fiscal 2026. We had state capital loss carryforwards of approximately $314 million, which expire between fiscal 2026 and fiscal 2036. We had tax credit carryforwards of approximately $1.4 billion at May 31, 2023, which are subject to limitations on their utilization. Approximately $933 million of these tax credit carryforwards are not currently subject to expiration dates. The remainder of the tax credit carryforwards, approximately $438 million, expire in various years between fiscal 2024 and fiscal 2043.

We classify our unrecognized tax benefits as either current or non-current income taxes payable in the accompanying consolidated balance sheets. The aggregate changes in the balance of our gross unrecognized tax benefits, including acquisitions, were as follows:

 

 

 

Year Ended May 31,

 

(in millions)

 

2023

 

 

2022

 

 

2021

 

Gross unrecognized tax benefits as of June 1

 

$

7,284

 

 

$

6,912

 

 

$

6,972

 

Increases related to tax positions from prior fiscal years

 

 

709

 

 

 

66

 

 

 

225

 

Decreases related to tax positions from prior fiscal years

 

 

(45

)

 

 

(24

)

 

 

(836

)

Increases related to tax positions taken during current fiscal year

 

 

669

 

 

 

919

 

 

 

531

 

Settlements with tax authorities

 

 

(212

)

 

 

(117

)

 

 

(51

)

Lapses of statutes of limitation

 

 

(631

)

 

 

(333

)

 

 

(66

)

Cumulative translation adjustments and other, net

 

 

(59

)

 

 

(139

)

 

 

137

 

Total gross unrecognized tax benefits as of May 31

 

$

7,715

 

 

$

7,284

 

 

$

6,912

 

 

As of May 31, 2023, 2022 and 2021, $3.9 billion, $4.3 billion and $4.4 billion, respectively, of unrecognized tax benefits would affect our effective tax rate if recognized. We recognized interest and penalties related to uncertain tax positions in our (provision for) benefit from income taxes line of our consolidated statements of operations of $111 million, $93 million and $166 million during fiscal 2023, 2022 and 2021, respectively. Interest and penalties accrued as of May 31, 2023 and 2022 were $1.7 billion and $1.6 billion, respectively.

Domestically, U.S. federal and state taxing authorities are currently examining income tax returns of Oracle and various acquired entities for years through fiscal 2021. Many issues are at an advanced stage in the examination process, the most significant of which include issues related to transfer pricing, domestic production activity, one-time transition tax, foreign tax credits, research and development credits and state economic nexus. With respect to all of these domestic audit issues considered in the aggregate, we believe that it was reasonably possible that, as of May 31, 2023, our gross unrecognized tax benefits could decrease (whether by payment, release, or a combination of both) in the next 12 months by as much as $538 million ($442 million net of offsetting tax benefits). Our U.S. federal income tax returns have been examined for all years prior to fiscal 2013 and, with some exceptions, 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 2007, and we are no longer subject to audit for those periods.

Internationally, tax authorities for numerous non-U.S. jurisdictions are also examining or have examined returns of Oracle and various acquired entities for years through fiscal 2023. Many of the relevant tax years are at an advanced stage in examination or subsequent controversy resolution processes, the most significant of which include issues related to transfer pricing and withholding tax. The manner in which those issues are resolved and the timing thereof could potentially result in a range of decreases or increases in our unrecognized tax benefits over the next 12 months. We believe it was reasonably possible that, as of May 31, 2023, the gross unrecognized tax benefits could decrease (whether by payment, release, or a combination of both) in the next 12 months by as much as $767 million ($262 million net of offsetting tax benefits). We also believe it was reasonably possible that, as of May 31, 2023, the gross unrecognized tax benefits could increase in the next 12 months by as much as $637 million ($111 million net of offsetting US tax benefits). With some exceptions, we are generally no longer subject to tax examinations in non-U.S. jurisdictions for years prior to fiscal 2001.

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, Canada, Germany, India, Indonesia, Israel, Italy, Mexico, New Zealand, Pakistan, Saudi Arabia, South Korea and Spain, 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.
v3.23.2
SEGMENT INFORMATION
 12 Months Ended
May 31, 2023
Segment Reporting [Abstract]  
SEGMENT INFORMATION
14.
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 Officer 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 tabular information below presents financial

information that is 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 enterprise applications 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 and infrastructure technologies as they become available and for which the customer contracted and also include 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 infrastructure technologies including 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 and can also include product repairs, maintenance services and technical support services that are typically delivered and recognized ratably over the contractual term.

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

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

The following table presents summary results for each of our three businesses for each of fiscal 2023, 2022 and 2021:

 

 

 

Year Ended May 31,

 

(in millions)

 

2023

 

 

2022

 

 

2021

 

Cloud and license:

 

 

 

 

 

 

 

 

 

Revenues(1)

 

$

41,086

 

 

$

36,052

 

 

$

34,101

 

Cloud services and license support expenses

 

 

7,222

 

 

 

4,915

 

 

 

4,133

 

Sales and marketing expenses

 

 

7,738

 

 

 

7,054

 

 

 

6,799

 

Margin(2)

 

$

26,126

 

 

$

24,083

 

 

$

23,169

 

Hardware:

 

 

 

 

 

 

 

 

 

Revenues

 

$

3,274

 

 

$

3,183

 

 

$

3,359

 

Hardware products and support expenses

 

 

1,011

 

 

 

944

 

 

 

945

 

Sales and marketing expenses

 

 

331

 

 

 

361

 

 

 

388

 

Margin(2)

 

$

1,932

 

 

$

1,878

 

 

$

2,026

 

Services:

 

 

 

 

 

 

 

 

 

Revenues

 

$

5,594

 

 

$

3,205

 

 

$

3,021

 

Services expenses

 

 

4,490

 

 

 

2,539

 

 

 

2,393

 

Margin(2)

 

$

1,104

 

 

$

666

 

 

$

628

 

Totals:

 

 

 

 

 

 

 

 

 

Revenues(1)

 

$

49,954

 

 

$

42,440

 

 

$

40,481

 

Expenses

 

 

20,792

 

 

 

15,813

 

 

 

14,658

 

Margin(2)

 

$

29,162

 

 

$

26,627

 

 

$

25,823

 

 

(1)
Cloud and license revenues and total revenues presented for management reporting for fiscal 2021 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 due to business combination accounting rules that were applicable to acquisitions closed prior to fiscal 2022. The table below provides a reconciliation of our total operating segment revenues to our total revenues as reported in our consolidated statements of operations for all periods presented.
(2)
The margins reported reflect only the direct controllable costs of each line of business and do not include allocations of research and 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 expenses or income, net. Refer to the table below for a reconciliation of our total margin for operating segments to our income before income taxes as reported per our consolidated statements of operations.

 

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

 

 

 

Year Ended May 31,

 

(in millions)

 

2023

 

 

2022

 

 

2021

 

Total revenues for operating segments

 

$

49,954

 

 

$

42,440

 

 

$

40,481

 

Cloud and license revenues(1)

 

 

—

 

 

 

—

 

 

 

(2

)

Total revenues

 

$

49,954

 

 

$

42,440

 

 

$

40,479

 

Total margin for operating segments

 

$

29,162

 

 

$

26,627

 

 

$

25,823

 

Cloud and license revenues(1)

 

 

—

 

 

 

—

 

 

 

(2

)

Research and development

 

 

(8,623

)

 

 

(7,219

)

 

 

(6,527

)

General and administrative

 

 

(1,579

)

 

 

(1,317

)

 

 

(1,254

)

Amortization of intangible assets

 

 

(3,582

)

 

 

(1,150

)

 

 

(1,379

)

Acquisition related and other

 

 

(190

)

 

 

(4,713

)

 

 

(138

)

Restructuring

 

 

(490

)

 

 

(191

)

 

 

(431

)

Stock-based compensation for operating segments

 

 

(1,201

)

 

 

(735

)

 

 

(513

)

Expense allocations and other, net

 

 

(404

)

 

 

(376

)

 

 

(366

)

Interest expense

 

 

(3,505

)

 

 

(2,755

)

 

 

(2,496

)

Non-operating (expenses) income, net

 

 

(462

)

 

 

(522

)

 

 

282

 

Income before income taxes

 

$

9,126

 

 

$

7,649

 

 

$

12,999

 

 

 

(1)
Cloud and license revenues presented for management reporting for fiscal 2021 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 due to business combination accounting rules that were applicable to acquisitions closed prior to fiscal 2022. This table includes a reconciliation of our total operating segment revenues to our total revenues as reported in our consolidated statements of operations for all periods presented.

Disaggregation of Revenues

We have considered information that is regularly reviewed by our CODMs 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 affected by economic factors. The principal category we use to disaggregate revenues is the nature of our products and services as presented in our consolidated statements of operations, the total of which is reconciled to revenues from our reportable segments as per the preceding tables of this footnote.

The following table is a summary of our total revenues by geographic region:

 

 

Year Ended May 31,

 

(in millions)

 

2023

 

 

2022

 

 

2021

 

Americas

 

$

31,226

 

 

$

23,679

 

 

$

21,828

 

EMEA(1)

 

 

12,109

 

 

 

12,011

 

 

 

11,894

 

Asia Pacific

 

 

6,619

 

 

 

6,750

 

 

 

6,757

 

Total revenues

 

$

49,954

 

 

$

42,440

 

 

$

40,479

 

 

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

The following table presents our cloud services and license support revenues by offerings:

 

 

Year Ended May 31,

 

(in millions)

 

2023

 

 

2022

 

 

2021

 

Cloud services

 

$

15,881

 

 

$

10,809

 

 

$

8,921

 

License support

 

 

19,426

 

 

 

19,365

 

 

 

19,779

 

Total cloud services and license support revenues

 

$

35,307

 

 

$

30,174

 

 

$

28,700

 

The following table presents our cloud services and license support revenues by applications and infrastructure ecosystems:

 

 

Year Ended May 31,

 

(in millions)

 

2023

 

 

2022

 

 

2021

 

Applications cloud services and license support

 

$

16,651

 

 

$

12,612

 

 

$

11,712

 

Infrastructure cloud services and license support

 

 

18,656

 

 

 

17,562

 

 

 

16,988

 

Total cloud services and license support revenues

 

$

35,307

 

 

$

30,174

 

 

$

28,700

 

 

Geographic Information

Disclosed in the table below is geographic information for each country that comprised greater than three percent of our total revenues for any of fiscal 2023, 2022 or 2021:

 

 

 

As of and for the Year Ended May 31,

 

 

 

2023

 

 

2022

 

 

2021

 

(in millions)

 

Revenues

 

 

Long-Lived
Assets(1)

 

 

Revenues

 

 

Long-Lived
Assets(1)

 

 

Revenues

 

 

Long-Lived
Assets(1)

 

United States

 

$

27,535

 

 

$

19,322

 

 

$

20,246

 

 

$

10,300

 

 

$

18,734

 

 

$

6,826

 

United Kingdom

 

 

2,159

 

 

 

905

 

 

 

2,335

 

 

 

805

 

 

 

2,110

 

 

 

685

 

Germany

 

 

1,755

 

 

 

940

 

 

 

1,799

 

 

 

813

 

 

 

1,744

 

 

 

561

 

Japan

 

 

1,681

 

 

 

770

 

 

 

1,847

 

 

 

788

 

 

 

1,988

 

 

 

650

 

Other countries

 

 

16,824

 

 

 

3,626

 

 

 

16,213

 

 

 

3,438

 

 

 

15,903

 

 

 

2,663

 

Total

 

$

49,954

 

 

$

25,563

 

 

$

42,440

 

 

$

16,144

 

 

$

40,479

 

 

$

11,385

 

 

(1)
Long-lived assets exclude goodwill, intangible assets, equity investments and deferred taxes, which are not allocated to specific geographic locations as it is impracticable to do so.
v3.23.2
EARNINGS PER SHARE
 12 Months Ended
May 31, 2023
Earnings Per Share [Abstract]  
EARNINGS PER SHARE
15.
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:

 

 

 

Year Ended May 31,

 

(in millions, except per share data)

 

2023

 

 

2022

 

 

2021

 

Net income

 

$

8,503

 

 

$

6,717

 

 

$

13,746

 

Weighted average common shares outstanding

 

 

2,696

 

 

 

2,700

 

 

 

2,945

 

Dilutive effect of employee stock plans

 

 

70

 

 

 

86

 

 

 

77

 

Dilutive weighted average common shares outstanding

 

 

2,766

 

 

 

2,786

 

 

 

3,022

 

Basic earnings per share

 

$

3.15

 

 

$

2.49

 

 

$

4.67

 

Diluted earnings per share

 

$

3.07

 

 

$

2.41

 

 

$

4.55

 

Shares subject to anti-dilutive restricted stock-based awards and stock options excluded from calculation(1)

 

 

50

 

 

 

34

 

 

 

36

 

 

(1)
These weighted shares relate to anti-dilutive restricted service based stock-based awards as calculated using the treasury stock method and contingently issuable shares pursuant to PSOs arrangements. Such shares could be dilutive in the future. See Note 12 for information regarding the exercise prices of our outstanding, unexercised stock options.
v3.23.2
LEGAL PROCEEDINGS
 12 Months Ended
May 31, 2023
Legal Proceedings [Abstract]  
LEGAL PROCEEDINGS
16.
LEGAL PROCEEDINGS

Derivative Litigation Concerning Oracle’s NetSuite Acquisition

On May 3 and July 18, 2017, two alleged stockholders filed separate derivative lawsuits in the Court of Chancery of the State of Delaware, purportedly on Oracle’s behalf. Thereafter, the court consolidated the two derivative cases and designated the July 18, 2017 complaint as the operative complaint. The consolidated lawsuit was brought against all the then-current members and one former member of our Board of Directors, and Oracle as a nominal defendant.

Plaintiff alleged that the defendants breached their fiduciary duties by causing Oracle to agree to purchase NetSuite Inc. (NetSuite) at an excessive price. The complaint sought (and the operative complaint continues to seek) declaratory relief, unspecified monetary damages (including interest), and attorneys’ fees and costs. The defendants filed a motion to dismiss, which the court denied on March 19, 2018.

On May 4, 2018, our Board of Directors established a Special Litigation Committee (SLC) to investigate the allegations in this derivative action. Three non-employee directors served on the SLC. On August 15, 2019, the SLC filed a letter with the court, stating that the SLC believed that plaintiff should be allowed to proceed with the derivative litigation on behalf of Oracle. After the SLC advised the Board that it had fulfilled its duties and obligations, the Board withdrew the SLC’s authority, except that the SLC maintained certain authority to respond to discovery requests in the litigation.

After plaintiff filed the July 18, 2017 complaint, an additional plaintiff joined the case. Plaintiffs filed several amended complaints, and filed their most recent amended complaint on December 11, 2020. The operative complaint asserts claims for breach of fiduciary duty against our Chief Executive Officer, our Chief Technology Officer, the estate of Mark Hurd (our former Chief Executive Officer who passed away on October 18, 2019), and two other members of our Board of Directors. Oracle is named as a nominal defendant. On December 11, 2020, the estate of Mark Hurd and the two other members of our Board of Directors moved to dismiss this complaint. On June 21, 2021, the court granted this motion as to the estate of Mark Hurd and one Board member and denied the motion as to the other Board member, who filed an answer to the complaint on August 9, 2021. On December 28, 2020, our Chief Executive Officer, our Chief Technology Officer, and Oracle as a nominal defendant filed answers to the operative complaint.

Trial commenced on July 18, 2022, and has concluded. On November 18, 2022, the court held a final hearing on the parties’ post-trial briefing. On December 27, 2022, the court “so ordered” a stipulation, dismissing the Board member from this action. On May 12, 2023, the court issued its trial ruling, finding for defendants and rejecting plaintiffs’ claims. On May 22, 2023, plaintiffs filed a motion for attorneys’ fees, claiming that this lawsuit had conferred a benefit on Oracle. On May 31, 2023, defendants filed a bill of costs, as the prevailing party.

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.

Derivative Litigation Concerning Oracle’s Cloud Business

On February 12 and May 6, 2019, two stockholder derivative lawsuits were filed in the United States District Court for the Northern District of California. The cases were consolidated, and on July 8, 2019, a single plaintiff filed a consolidated complaint. The consolidated complaint brought various claims relating to a Rule 10b-5 class action that was filed in the same court on August 10, 2018, and which was settled for a payment by the Company of $17,500,000. That matter is now concluded. In the Rule 10b-5 class action, plaintiff alleged Oracle and certain Oracle officers made or were responsible for false and misleading statements regarding Oracle’s cloud business.

Plaintiff in the derivative action filed an amended complaint on June 4, 2021. The derivative suit is brought by an alleged stockholder of Oracle, purportedly on Oracle’s behalf, against our Chief Technology Officer, our Chief Executive Officer, and the estate of Mark Hurd. Plaintiff claims that the alleged actions described in the 10b-5 class action caused harm to Oracle, including harming Oracle because Oracle allegedly repurchased its own stock at an inflated price. Plaintiff also claims that defendants violated their fiduciary duties of candor, good faith, loyalty, and due care by failing to prevent this alleged harm. Plaintiff also brings derivative claims for violations of federal securities laws. Plaintiff seeks a ruling that this case may proceed as a derivative action, a finding that defendants are liable for breaching their fiduciary duties, an award of damages to Oracle, an order directing defendants to enact corporate reforms, attorneys’ fees and costs, and unspecified relief. On June 14, 2021, the court “so ordered” a stipulation from the parties, staying this case pending resolution of the 10b-5 action, and the court “so ordered” two additional stipulations, staying the case until January 31, 2023. Defendants are scheduled to file their motion to dismiss by June 29, 2023.

While Oracle continues to evaluate these claims, we do not believe these matters 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.
v3.23.2
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (Policies)
 12 Months Ended
May 31, 2023
Organization Consolidation And Presentation Of Financial Statements [Abstract]  
Nature of Operations

Oracle Corporation provides products and services that substantially address all aspects of enterprise information technology (IT) environments, including applications and infrastructure technologies. We deliver our products and services to customers worldwide through a variety of flexible and interoperable IT deployment models. These models include on-premise, cloud-based and hybrid deployments (an approach that combines both on-premise and cloud based deployments). Oracle Cloud Software-as-a-Service and Oracle Cloud Infrastructure (SaaS and OCI, respectively, and collectively, Oracle Cloud Services) offerings provide comprehensive and integrated applications and infrastructure services delivered via various cloud delivery models enabling our customers to choose the best option that meets their specific business needs. Customers may also elect to purchase Oracle software licenses and hardware products and related services to manage their own cloud-based or on-premise IT environments. Customers that purchase our software licenses may elect to purchase license support contracts, which provide our customers with rights to unspecified license upgrades and maintenance releases issued during the support period as well as technical support assistance. Customers that purchase our hardware products may elect to purchase hardware support contracts, which provide customers with software updates and can include product repairs, maintenance services, and technical support services. We also offer customers a broad set of services offerings that are designed to improve customer utilization of their investments in Oracle applications and infrastructure technologies.

Oracle Corporation conducts business globally and was incorporated in 2005 as a Delaware corporation and is the successor to operations originally begun in June 1977.
Basis of Financial Statements

Basis of Financial Statements

The consolidated financial statements include our accounts and the accounts of our wholly- and majority-owned subsidiaries. Noncontrolling interest positions of certain of our consolidated entities are reported as a separate component of consolidated equity from the equity attributable to Oracle’s stockholders for all periods presented. The noncontrolling interests in our net income were not significant to our consolidated results for the periods presented and therefore have not been presented separately and instead are included as a component of non-operating expenses or income, net in our consolidated statements of operations. Intercompany transactions and balances have been eliminated.

On June 8, 2022, we completed our acquisition of Cerner Corporation (Cerner), a provider of digital information systems used within hospitals and health systems, by means of a merger of one of our wholly owned subsidiaries with and into Cerner such that Cerner became an indirect, wholly owned subsidiary of Oracle. Through our acquisition of Cerner, we enhanced our offerings of each of our three existing businesses, cloud and license, hardware and services. The consolidated financial statements included in this Annual Report include the financial results of Cerner prospectively from the date of acquisition. Refer to Note 2 below for additional details regarding our acquisition of Cerner.

The comparability of our consolidated financial statements as of and for the year ended May 31, 2022 was impacted by $4.7 billion of certain litigation related charges during fiscal 2022. The comparability of our consolidated statements of operations for the year ended May 31, 2021 was impacted by a $2.3 billion net income tax benefit related to the partial realignment of our legal entity structure that resulted in the intra-group transfer of certain intellectual property rights. Refer to Note 13 below for additional information regarding our income taxes.
Use of Estimates

Use of Estimates

Our consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles (GAAP) as set forth in the Financial Accounting Standards Board’s (FASB) Accounting Standards Codification (ASC), and we consider various staff accounting bulletins and other applicable guidance issued by the SEC. These accounting principles require us to make certain estimates, judgments and assumptions. We believe that the estimates, judgments and assumptions upon which we rely are reasonable based upon information available to us at the time that these estimates, judgments and assumptions are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities as of the date of the financial statements as well as the reported amounts of revenues and expenses during the periods presented. To the extent that there are differences between these estimates, judgments or assumptions and actual results, our consolidated financial statements will be affected. In many cases, the accounting treatment of a particular transaction is specifically dictated by GAAP and does not require management’s judgment in its application. There are also areas in which management’s judgment in selecting among available alternatives would not produce a materially different result.

During the first quarter of fiscal 2023, we completed an assessment of the useful lives of our servers and increased the estimate of the useful lives from four years to five years effective at the beginning of fiscal 2023. Based on the carrying value of our servers as of May 31, 2022, this change in accounting estimate decreased our total operating expenses by $434 million during fiscal 2023.
Revenue Recognition

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 typically represent perpetual software 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 and advanced customer 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 elect to purchase and renew their license support contracts annually.

Cloud services revenues include revenues from Oracle Cloud Services offerings, which deliver applications and infrastructure technologies via cloud-based deployment models that we develop functionality for, provide unspecified updates and enhancements for, deploy, host, manage, upgrade and support and that customers access by entering into a subscription agreement with us for a stated period.

Cloud license and on-premise license revenues primarily represent amounts earned from granting customers perpetual 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 services are offered to customers as standalone arrangements or as a part of arrangements to customers buying other products and services. Our consulting services are designed to help our customers to, among others, deploy, architect, integrate, upgrade and secure their investments in Oracle applications and infrastructure technologies. Our advanced customer services are designed to provide supplemental support services, performance services and higher availability for Oracle products and services.

We apply the provisions of ASC 606, Revenue from Contracts with Customers (ASC 606) as a single standard for revenue recognition that applies to all of our cloud, license, hardware and services arrangements and generally require 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 ASC 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 each performance obligation in the contract; and
•
recognition of revenues when, or as, the contractual performance obligations are satisfied.

Our customers that contract with us for the provision of cloud services, software, hardware or other services include businesses of many sizes, government agencies, educational institutions and our channel partners, which include resellers and system integrators.

The timing of revenue recognition may differ from the timing of invoicing to our customers. We record an unbilled receivable, which is included within accounts receivable on our consolidated balance sheets, when revenue is recognized prior to invoicing. We record deferred revenues on our consolidated balance sheets when revenues are to be 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 and cloud infrastructure 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 Oracle financing division. The transaction price for a contract that is financed through our Oracle financing division is adjusted to reflect the time value of money and interest revenue is recorded as a component of non-operating expenses or income, net within our 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 cloud services are delivered, beginning on the date our service is made available to a customer. We recognize revenue ratably because the customer receives and consumes the benefits of the cloud services throughout the contract period. Revenues from cloud services that are 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, if and when they are available, and hardware product repairs, as applicable. 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 Licenses and On-Premise Licenses

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 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; therefore, our products and services are generally not combined. 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 the SSP based on the observable prices of products or services sold separately in comparable circumstances to similar customers. We typically establish an SSP 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 the vast majority of 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 the 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 generally determined by applying a residual approach whereby all other 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.

Remaining Performance Obligations from Customer Contracts

Trade receivables, net of allowance for credit losses, and deferred revenues are reported net of related uncollected deferred revenues in our consolidated balance sheets as of May 31, 2023 and 2022. The amount of revenues recognized during the year ended May 31, 2023 and 2022 that were included in the opening deferred revenues balance as of May 31, 2022 and 2021, respectively, was approximately $8.3 billion and $8.8 billion. Revenues recognized from performance obligations satisfied in prior periods and impairment losses recognized on our receivables were immaterial during each year ended May 31, 2023, 2022 and 2021.

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 and, combined with foreign exchange rate fluctuations and other factors, influence the amount of remaining performance obligations that we report at a point in time. As of May 31, 2023, our remaining performance obligations were $67.9 billion, approximately 49% of which we expect to recognize as revenues over the next twelve months, 35% over the subsequent month 13 to month 36, and the remainder thereafter.
Sales of Financing Receivables

Sales of Financing Receivables

We offer certain of our customers the option to acquire certain of our cloud and license, hardware 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. During fiscal 2023, 2022 and 2021, $2.0 billion, $1.8 billion and $1.7 billion, respectively, of our financing receivables were sold to financial institutions.
Business Combinations

Business Combinations

We apply the provisions of ASC 805, Business Combinations (ASC 805), in accounting for our acquisitions. ASC 805 requires that we evaluate whether a transaction pertains to an acquisition of assets, or to an acquisition of a business. A business is defined as an integrated set of assets and activities that is capable of being conducted and managed for the purpose of providing a return to investors. Asset acquisitions are accounted for by allocating the cost of the acquisition to the individual assets and liabilities assumed on a relative fair value basis; whereas the acquisition of a business requires us to recognize separately from goodwill the assets acquired and the liabilities assumed at the acquisition date fair values. Goodwill as of the business acquisition date is measured as the excess of consideration transferred over the net of the acquisition date fair values of the assets acquired and the liabilities assumed. While we use our best estimates and assumptions to accurately value assets acquired and liabilities assumed at the business acquisition date as well as any contingent consideration, where applicable, our estimates are inherently uncertain and subject to refinement. As a result, during the measurement period, which may be up to one year from the business acquisition date, we record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon the conclusion of a business acquisition’s measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to our consolidated statements of operations. Costs to exit or restructure certain activities of an acquired company or our internal operations are accounted for as termination and exit costs pursuant to ASC 420, Exit or Disposal Cost Obligations, and are accounted for separately from the business combination. A liability for costs associated with an exit or disposal activity is recognized and measured at its fair value in our consolidated statement of operations in the period in which the liability is incurred. Abandoned operating leases related to an acquired company or our internal operations are accounted for as Right-of-Use (ROU) asset impairment charges pursuant to ASC 842, Leases and are accounted for separately from the business combination. In all periods

presented, when estimating the asset impairment charges, assumptions were applied regarding estimated sub-lease payments to be received, which can differ from actual results. This may require us to revise our initial estimates which may affect our results of operations and financial position in the period the revision is made.

For a given business acquisition, we may identify certain pre-acquisition contingencies as of the acquisition date and may extend our review and evaluation of these pre-acquisition contingencies throughout the measurement period in order to obtain sufficient information to assess whether we include these contingencies as a part of the fair value estimates of assets acquired and liabilities assumed and, if so, to determine their estimated amounts. If we cannot reasonably determine the fair value of a non-income tax related pre-acquisition contingency by the end of the measurement period, which is generally the case given the nature of such matters, we will recognize an asset or a liability for such pre-acquisition contingency if: (1) it is probable that an asset existed or a liability had been incurred at the business acquisition date and (2) the amount of the asset or liability can be reasonably estimated. Subsequent to the measurement period or final determination of the net asset values for the business combination, whichever comes first, changes in our estimates of such contingencies will affect earnings and could have a material effect on our results of operations and financial position.

In addition, uncertain tax positions and tax related valuation allowances assumed in a business combination are initially estimated as of the acquisition date. We reevaluate these items quarterly based upon facts and circumstances that existed as of the business acquisition date with any adjustments to our preliminary estimates being recorded to goodwill if identified within the measurement period. Subsequent to the measurement period or our final determination of the tax allowance’s or contingency’s estimated value, whichever comes first, changes to these uncertain tax positions and tax related valuation allowances will affect our provision for income taxes in our consolidated statement of operations and could have a material impact on our results of operations and financial position.
Marketable and Non-Marketable Investments

Marketable and Non-Marketable Investments

In accordance with ASC 320, Investments—Debt Securities, and based on our intentions regarding these instruments, we classify substantially all of our marketable debt securities investments as available-for-sale. We carry these securities at fair value, and report the unrealized gains and losses, net of taxes, as a component of stockholders’ equity, except for any unrealized losses determined to be related to credit losses, which we record within non-operating expenses or income, net in the accompanying consolidated statements of operations. We periodically evaluate our investments to determine if impairment charges are required. All of our marketable debt securities investments are classified as current based on the nature of the investments and their availability for use in current operations.

Investments in equity securities, other than any equity method investments, are generally recorded at their fair values, if the fair values are readily determinable. Non-marketable equity securities for which the fair values are not readily determinable and where we do not have control of, nor significant influence in, the investee are recorded at cost, less any impairment, adjusted for observable price changes from orderly transactions for identical or similar investments of the same issuer with any gains or losses recorded as a component of non-operating expenses or income, net as of and for each reporting period. For equity investments through which we have significant influence in, but not control of, the investee, we account for such investments pursuant to the equity method of accounting whereby we record our proportionate share of the investee’s earnings or losses, amortization of differences between our investment basis and underlying equity in net assets of the investee, excluding component representing goodwill, and impairment, if any, as a component of non-operating expenses or income, net for each reporting period.

Our non-marketable debt investments and equity securities and related instruments totaled $1.6 billion and $1.2 billion as of May 31, 2023 and 2022, respectively, are subject to periodic impairment reviews and are classified as a part of non-current assets in the accompanying consolidated balance sheets. The majority of the non-marketable investments held as of these dates were with a related party entity for which we follow the equity method of accounting. We are also a counterparty to certain options to acquire additional equity interests in that entity at various times through June 2025 and we could obtain control of that entity should such options be exercised.
Fair Value of Financial Instruments

Fair Values of Financial Instruments

We apply the provisions of ASC 820, Fair Value Measurement (ASC 820), to our assets and liabilities that we are required to measure at fair value pursuant to other accounting standards, including our investments in marketable debt and equity securities and our derivative financial instruments.

The additional disclosures regarding our fair value measurements are included in Note 4.

Allowances for Credit Losses

Allowances for Credit Losses

We record allowances for credit losses based upon a specific review of all significant outstanding invoices. For those invoices not specifically reviewed, provisions are provided at differing rates, based upon the age of the receivable, the collection history associated with the geographic region that the receivable was recorded in and current and expected future economic conditions. We write-off a receivable and charge it against its recorded allowance when we have exhausted our collection efforts without success.
Concentrations of Credit Risk

Concentrations of Credit Risk

Financial instruments that are potentially subject to concentrations of credit risk consist primarily of cash and cash equivalents, marketable securities, derivatives and trade receivables. Our cash and cash equivalents are generally held with large, diverse financial institutions worldwide to reduce the amount of exposure to any single financial institution. Investment policies have been implemented that limit purchases of marketable debt securities to investment-grade securities. Our derivative contracts are transacted with various financial institutions with high credit standings and any exposure to counterparty credit-related losses in these contracts is largely mitigated with collateral security agreements that provide for collateral to be received or posted when the net fair values of these contracts fluctuate from contractually established thresholds. We generally do not require collateral to secure accounts receivable. The risk with respect to trade receivables is mitigated by credit evaluations we perform on our customers, the short duration of our payment terms for the significant majority of our customer contracts and by the diversification of our customer base. No single customer accounted for 10% or more of our total revenues in fiscal 2023, 2022 or 2021.

We outsource the manufacturing, assembly and delivery of the substantial majority of our hardware products to a variety of companies, many of which are located outside the U.S. Further, we have simplified our supply chain processes by reducing the number of third-party manufacturing partners and the number of locations where these third-party manufacturers build our hardware products. Any inability of these third-party manufacturing partners to deliver the contracted services for our hardware products could adversely impact future operating results of our cloud and license and hardware businesses.

Inventories

Inventories

Inventories are stated at the lower of cost or net realizable value. Cost is computed using standard cost, which approximates actual cost, on a first-in, first-out basis. We evaluate our ending inventories for estimated excess quantities and obsolescence. This evaluation includes analysis of sales levels by product and projections of future demand within specific time horizons. Inventories in excess of future demand are written down and charged to hardware expenses. In addition, we assess the impact of changing technology to our inventories and we write down inventories that are considered obsolete. At the point of loss recognition, a new, lower-cost basis for that inventory is established, and subsequent changes in facts and circumstances do not result in the restoration or increase in that newly established cost basis. Inventories are included in prepaid expenses and other current assets in our consolidated balance sheets and totaled $298 million and $314 million at May 31, 2023 and 2022, respectively.
Other Receivables

Other Receivables

Other receivables represent value-added tax and sales tax receivables associated with the sale of our products and services to third parties. Other receivables are included in prepaid expenses and other current assets in our consolidated balance sheets and totaled $798 million and $791 million at May 31, 2023 and 2022, respectively.
Deferred Sales Commissions

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 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 certain of 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 consolidated statements of operations and asset balances for deferred sales commissions are included in other current assets and other non-current assets in our consolidated balance sheets.

Property, Plant and Equipment

Property, Plant and Equipment

Property, plant and equipment are stated at cost, less accumulated depreciation. Depreciation is computed using the straight-line method based on estimated useful lives of the assets, which range from one to 40 years. Leasehold improvements are amortized over the lesser of the estimated useful lives of the improvements or the lease terms, as appropriate. Property, plant and equipment are periodically reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. We did not recognize any significant property impairment charges in fiscal 2023, 2022 or 2021.
Goodwill, Intangible Assets and Impairment Assessments

Goodwill, Intangible Assets and Impairment Assessments

Goodwill represents the excess of the purchase price in a business combination over the fair value of net tangible and intangible assets acquired. Intangible assets that are not considered to have an indefinite useful life are itemized in Note 6 below and are amortized over their useful lives, which generally range from one to 10 years. Each period we evaluate the estimated remaining useful lives of purchased intangible assets and whether events or changes in circumstances warrant a revision to the remaining periods of amortization.

The carrying amounts of our goodwill and intangible assets are periodically reviewed for impairment (at least annually for goodwill and indefinite lived intangible assets) and whenever events or changes in circumstances indicate that the carrying value of these assets may not be recoverable. When goodwill is assessed for impairment, we have the option to perform an assessment of qualitative factors of impairment (optional assessment) prior to necessitating a quantitative impairment test. Should the optional assessment be used for any given fiscal year, qualitative factors considered for a reporting unit include: cost factors; financial performance; legal, regulatory, contractual, political, business, or other factors; entity specific factors; industry and market considerations; macroeconomic conditions; and other relevant events and factors affecting the reporting unit. If we determine in the qualitative assessment that it is more likely than not that the fair value of the reporting unit is less than its carrying value, a quantitative test is then performed. Otherwise, no further testing is required. For those reporting units tested using a quantitative approach, we compare the fair value of each reporting unit with the carrying amount of the reporting unit, including goodwill. To determine the fair value of each reporting unit we utilize estimates, judgments and assumptions including estimated future cash flows the reporting unit is expected to generate on a discounted basis; the discount rate used as a part of the discounted cash flow analysis; future economic and market conditions; and market comparables of peer companies, among others. If, as per the quantitative test, the estimated fair value of the reporting unit is less than the carrying amount of the reporting unit, impairment is recognized for the difference, limited to the amount of goodwill recognized for the reporting unit. Our most recent goodwill impairment analysis was performed on March 1, 2023 and did not result in a goodwill impairment charge. We did not recognize impairment charges in fiscal 2022 or 2021.

Recoverability of finite lived intangible assets is measured by comparison of the carrying amount of the asset to the future undiscounted cash flows that are expected to be generated by the lowest level associated asset grouping. Recoverability of indefinite lived intangible assets is measured by comparison of the carrying amount of the asset to its fair value. If the asset is considered to be impaired, the amount of any impairment is measured as the difference between the carrying value and the fair value of the impaired asset. We did not recognize any intangible asset impairment charges in fiscal 2023, 2022 or 2021. At least annually, we assess the useful lives of our finite lived intangible assets and may adjust the period over which these assets are amortized whenever events or changes in circumstances indicate that a shorter amortization period is more reflective of the period in which these assets contribute to our cash flows.

Derivative Financial Instruments

Derivative Financial Instruments

During fiscal 2023, 2022 and 2021, we used derivative financial instruments to manage foreign currency and interest rate risks. We do not use derivative financial instruments for trading purposes. We account for these instruments in accordance with ASC 815, Derivatives and Hedging (ASC 815), which requires that every derivative instrument be recorded on the balance sheet as either an asset or liability measured at its fair value as of each reporting date. ASC 815 also requires that changes in our derivatives’ fair values be recognized in earnings, unless specific hedge accounting and documentation criteria are met (i.e., the instruments are accounted for as hedges).

The accounting for changes in the fair value of a derivative depends on the intended use of the derivative and the resulting designation. For a derivative instrument designated as a fair value hedge, loss or gain attributable to the risk being hedged is recognized in earnings in the period of change with a corresponding earnings offset recorded to the item for which the risk is being hedged. For a derivative instrument designated as a cash flow hedge, during each reporting period, we record the change in fair value of the derivative to accumulated other comprehensive loss (AOCL) in our consolidated balance sheets and the change is reclassified to earnings in the period the hedged item affects earnings.
Leases

Leases

We determine if an arrangement is a lease at its inception. Operating lease liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. We generally use our incremental borrowing rate based on the information available at the lease commencement date in determining the present value of future payments, because the implicit rate of the lease is generally not known. ROU assets related to our operating lease liabilities are measured at lease inception based on the initial measurement of the lease liability, plus any prepaid lease payments and less any lease incentives. Our lease terms that are used in determining our operating lease liabilities at lease inception may include options to extend or terminate the leases when it is reasonably certain that we will exercise such options. We amortize our ROU assets as operating lease expense generally on a straight-line basis over the lease term and classify both the lease amortization and imputed interest as operating expenses. We have lease agreements with lease and non-lease components, and in such cases, we generally account for the components as a single lease component. We do not recognize lease assets and lease liabilities for any lease with an original lease term of less than one year.

ROU assets related to our operating leases are included in other non-current assets, short-term operating lease liabilities are included in other current liabilities, and long-term operating lease liabilities are included in other non-current liabilities in our consolidated balance sheets. Cash flow movements related to our lease activities are included in prepaid expenses and other assets and accounts payable and other liabilities as presented in net cash provided by operating activities in our consolidated statements of cash flows for the years ended May 31, 2023 and 2022. Note 10 below provides additional information regarding our leases.
Legal and Other Contingencies

Legal and Other Contingencies

We are currently involved in various claims and legal proceedings. Quarterly, we review the status of each significant matter and assess our potential financial exposure. Descriptions of our accounting policies associated with contingencies assumed as a part of a business combination are provided under “Business Combinations” above. For legal and other contingencies that are not a part of a business combination or related to income taxes, we accrue a

liability for an estimated loss if the potential loss from any claim or legal proceeding is considered probable, and the amount can be reasonably estimated. Note 16 below provides additional information regarding certain of our legal contingencies.
Foreign Currency

Foreign Currency

We transact business in various foreign currencies. In general, the functional currency of a foreign operation is the local country’s currency. Consequently, revenues and expenses of operations outside the U.S. are translated into U.S. Dollars using weighted-average exchange rates while assets and liabilities of operations outside the U.S. are translated into U.S. Dollars using exchange rates at the balance sheet dates. The effects of foreign currency translation adjustments are substantially included in stockholders’ equity as a component of AOCL in the accompanying consolidated balance sheets and related periodic movements are summarized as a line item in our consolidated statements of comprehensive income. Net foreign exchange transaction losses included in non-operating expenses or income, net in the accompanying consolidated statements of operations were $249 million, $199 million and $112 million in fiscal 2023, 2022 and 2021, respectively.
Stock-Based Compensation

Stock-Based Compensation

We account for share-based payments to employees, including grants of service-based restricted stock unit awards, service-based employee stock options, performance-based stock options (PSOs), and purchases under employee stock purchase plans in accordance with ASC 718, Compensation—Stock Compensation, which requires that share-based payments (to the extent they are compensatory) be recognized in our consolidated statements of operations based on their fair values. We account for forfeitures of stock-based awards as they occur.

For our service-based stock awards, we recognize stock-based compensation expense on a straight-line basis over the service period of the award, which is generally four years.

For our PSOs, we recognize stock-based compensation expense on a straight-line basis related to awards that are probable of achievement over the longer of the (a) estimated implicit service period for performance-metric achievement, or (b) derived service period for market-based metric achievement. During our interim and annual reporting periods, stock-based compensation expense is recorded based on expected attainment of performance targets. Changes in our estimates of the expected attainment of performance targets that result in a change in the number of shares that are expected to vest, or changes in our estimates of implicit service periods, may cause the amount of stock-based compensation expense that we record for each interim reporting period to vary. Any changes in estimates that impact our expectation of the number of shares that are expected to vest are reflected in the amount of stock-based compensation expense that we recognize for each PSO tranche on a cumulative catch up basis during each interim reporting period in which such estimates are altered. Changes in estimates of the implicit service periods are recognized prospectively.

We record deferred tax assets for stock-based compensation awards that result in deductions on certain of our income tax returns based on the amount of stock-based compensation recognized in each reporting period and the fair values attributable to the vested portion of stock awards assumed in connection with a business combination at the statutory tax rates in the jurisdictions that we are able to recognize such tax deductions. The impacts of the actual tax deductions for stock-based awards that are realized in these jurisdictions are generally recognized in the reporting period that a restricted stock-based award vests or a stock option is exercised with any shortfall/windfall relative to the deferred tax asset established, and recorded as a discrete detriment/benefit to our provision for income taxes in such period. Note 12 below provides additional information regarding our stock-based compensation plans and related expenses.

Research and Development Costs and Software Development Costs

Research and Development Costs and Software Development Costs

All research and development costs are expensed as incurred in accordance with ASC 730, Research and Development. Software development costs required to be capitalized under ASC 985-20, Costs of Software to be Sold, Leased or Marketed, and under ASC 350-40, Internal-Use Software, were not material to our consolidated financial statements in fiscal 2023, 2022 and 2021.
Acquisition Related and Other Expenses

Acquisition Related and Other Expenses

Acquisition related and other expenses primarily consist of personnel related costs for transitional and certain other employees, certain business combination adjustments, including adjustments after the measurement period has ended, and certain other operating items, net. For fiscal 2022, acquisition related and other expenses included certain litigation related charges.

 

 

Year Ended May 31,

 

(in millions)

 

2023

 

 

2022

 

 

2021

 

Transitional and other employee related costs

 

$

77

 

 

$

10

 

 

$

5

 

Business combination adjustments, net

 

 

10

 

 

 

9

 

 

 

4

 

Other, net

 

 

103

 

 

 

4,694

 

 

 

129

 

Total acquisition related and other expenses

 

$

190

 

 

$

4,713

 

 

$

138

 
Non-Operating (Expenses) Income, net

Non-Operating (Expenses) Income, net

Non-operating (expenses) 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), net gains and losses related to equity investments including losses attributable to equity method investments and net other income and expenses, including net unrealized gains and losses from our investment portfolio related to our deferred compensation plan, and non-service net periodic pension income and losses.

 

 

 

Year Ended May 31,

 

(in millions)

 

2023

 

 

2022

 

 

2021

 

Interest income

 

$

285

 

 

$

94

 

 

$

101

 

Foreign currency losses, net

 

 

(249

)

 

 

(199

)

 

 

(112

)

Noncontrolling interests in income

 

 

(165

)

 

 

(184

)

 

 

(180

)

(Losses) gains from equity investments, net

 

 

(327

)

 

 

(147

)

 

 

262

 

Other (losses) gains, net

 

 

(6

)

 

 

(86

)

 

 

211

 

Total non-operating (expenses) income, net

 

$

(462

)

 

$

(522

)

 

$

282

 
Income Taxes

Income Taxes

We account for income taxes in accordance with ASC 740, Income Taxes (ASC 740). Deferred income taxes are recorded for the expected tax consequences of temporary differences between the tax bases of assets and liabilities for financial reporting purposes and amounts recognized for income tax purposes. We record a valuation allowance to reduce our deferred tax assets to the amount of future tax benefit that is more likely than not to be realized.

A two-step approach is applied pursuant to ASC 740 in the recognition and measurement of uncertain tax positions taken or expected to be taken in a tax return. The first step is to determine if the weight of available evidence indicates that it is more likely than not that the tax position will be sustained in an audit, including resolution of any related appeals or litigation processes. The second step is to measure the tax benefit as the largest amount that is more than 50% likely to be realized upon ultimate settlement. We recognize interest and penalties related to uncertain tax positions in our provision for income taxes line of our consolidated statements of operations.

A description of our accounting policies associated with tax related contingencies and valuation allowances assumed as a part of a business combination is provided under “Business Combinations” above.
Recent Accounting Pronouncements

Recent Accounting Pronouncements

Financial Instruments: In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting (ASU 2020-04) and also issued subsequent amendments to the initial guidance (collectively, Topic 848). Topic 848 provides optional guidance for contract modifications and certain hedging relationships associated with the transition from reference rates that are

expected to be discontinued. We will adopt Topic 848 when our relevant contracts are modified upon transition to alternative reference rates. We do not expect our adoption of Topic 848 to have a material impact on our consolidated financial statements.
Fair Value Measurements

We perform fair value measurements in accordance with ASC 820. 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.
Stock-Based Compensation Expense and Valuations of Stock Awards

We estimated the fair values of our restricted stock-based awards that are solely subject to service-based vesting requirements based upon their market values as of the grant dates, discounted for the present values of expected dividends.

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.
v3.23.2
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (Tables)
 12 Months Ended
May 31, 2023
Organization Consolidation And Presentation Of Financial Statements [Abstract]  
Acquisition Related and Other Expenses

 

 

Year Ended May 31,

 

(in millions)

 

2023

 

 

2022

 

 

2021

 

Transitional and other employee related costs

 

$

77

 

 

$

10

 

 

$

5

 

Business combination adjustments, net

 

 

10

 

 

 

9

 

 

 

4

 

Other, net

 

 

103

 

 

 

4,694

 

 

 

129

 

Total acquisition related and other expenses

 

$

190

 

 

$

4,713

 

 

$

138

 
Non-Operating (Expenses) Income, net

 

 

Year Ended May 31,

 

(in millions)

 

2023

 

 

2022

 

 

2021

 

Interest income

 

$

285

 

 

$

94

 

 

$

101

 

Foreign currency losses, net

 

 

(249

)

 

 

(199

)

 

 

(112

)

Noncontrolling interests in income

 

 

(165

)

 

 

(184

)

 

 

(180

)

(Losses) gains from equity investments, net

 

 

(327

)

 

 

(147

)

 

 

262

 

Other (losses) gains, net

 

 

(6

)

 

 

(86

)

 

 

211

 

Total non-operating (expenses) income, net

 

$

(462

)

 

$

(522

)

 

$

282

 
v3.23.2
ACQUISITIONS (Tables)
 12 Months Ended
May 31, 2023
Business Combinations [Abstract]  
Fair Values of Net Assets Acquired from Cerner

(in millions)

 

 

 

Cash and marketable securities

 

$

769

 

Trade receivables, net

 

 

854

 

Property, plant and equipment, net

 

 

1,512

 

Intangible assets

 

 

11,972

 

Goodwill

 

 

18,618

 

Other assets

 

 

520

 

Accounts payable and other liabilities

 

 

(1,691

)

Deferred revenues

 

 

(305

)

Senior notes and other borrowings

 

 

(1,600

)

Deferred tax liabilities, net

 

 

(2,424

)

Total

 

$

28,225

 
Unaudited Pro Forma Financial Information

 

 

Year Ended May 31,

 

(in millions, except per share data)

 

2023

 

 

2022

 

Total revenues

 

$

50,065

 

 

$

48,218

 

Net income

 

$

8,456

 

 

$

4,988

 

Basic earnings per share

 

$

3.14

 

 

$

1.85

 

Diluted earnings per share

 

$

3.06

 

 

$

1.79

 
v3.23.2
CASH, CASH EQUIVALENTS AND MARKETABLE SECURITIES (Tables)
 12 Months Ended
May 31, 2023
Cash Cash Equivalents And Short Term Investments [Abstract]  
Cash, Cash Equivalents and Marketable Securities

 

 

May 31,

 

(in millions)

 

2023

 

 

2022

 

Money market funds

 

$

1,694

 

 

$

12,842

 

Time deposits and other

 

 

468

 

 

 

520

 

Total investments

 

$

2,162

 

 

$

13,362

 

Investments classified as cash equivalents

 

$

1,740

 

 

$

12,843

 

Investments classified as marketable securities

 

$

422

 

 

$

519

 
v3.23.2
FAIR VALUE MEASUREMENTS (Tables)
 12 Months Ended
May 31, 2023
Fair Value Disclosures [Abstract]  
Assets and Liabilities Measured at Fair Value on a Recurring Basis

 

 

May 31, 2023

 

 

May 31, 2022

 

 

 

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:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Money market funds

 

$

1,694

 

 

$

—

 

 

$

1,694

 

 

$

12,842

 

 

$

—

 

 

$

12,842

 

Time deposits and other

 

 

180

 

 

 

288

 

 

 

468

 

 

 

240

 

 

 

280

 

 

 

520

 

Derivative financial instruments

 

 

—

 

 

 

102

 

 

 

102

 

 

 

—

 

 

 

—

 

 

 

—

 

Total assets

 

$

1,874

 

 

$

390

 

 

$

2,264

 

 

$

13,082

 

 

$

280

 

 

$

13,362

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Derivative financial instruments

 

$

—

 

 

$

126

 

 

$

126

 

 

$

—

 

 

$

97

 

 

$

97

 
v3.23.2
PROPERTY, PLANT AND EQUIPMENT (Tables)
 12 Months Ended
May 31, 2023
Property Plant And Equipment [Abstract]  
Property, Plant and Equipment

 

 

Estimated

 

May 31,

 

(Dollars in millions)

 

Useful Life

 

2023

 

 

2022

 

Computer, network, machinery and equipment

 

1-5 years

 

$

17,258

 

 

$

12,844

 

Buildings and improvements

 

1-40 years

 

 

5,880

 

 

 

4,729

 

Furniture, fixtures and other

 

5-15 years

 

 

447

 

 

 

423

 

Land

 

—

 

 

1,243

 

 

 

1,166

 

Construction in progress(1)

 

—

 

 

3,846

 

 

 

512

 

Total property, plant and equipment

 

1-40 years

 

 

28,674

 

 

 

19,674

 

Accumulated depreciation

 

 

 

 

(11,605

)

 

 

(9,958

)

Total property, plant and equipment, net

 

 

 

$

17,069

 

 

$

9,716

 

 

(1)
Amounts primarily consist of computer equipment to be built and deployed at our data centers.
v3.23.2
INTANGIBLE ASSETS AND GOODWILL (Tables)
 12 Months Ended
May 31, 2023
Goodwill And Intangible Assets Disclosure [Abstract]  
Intangible Assets

 

 

Intangible Assets, Gross

 

 

Accumulated Amortization

 

 

Intangible Assets, Net

 

 

Weighted
Average

 

(Dollars in millions)

 

May 31,
 2022

 

 

Additions &
Adjustments, net (1)

 

 

Retirements

 

 

May 31,
 2023

 

 

May 31,
 2022

 

 

Expense

 

 

Retirements

 

 

May 31,
 2023

 

 

May 31,
 2022

 

 

May 31,
 2023

 

 

Useful
Life(2)

 

Developed technology

 

$

3,966

 

 

$

2,379

 

 

$

(2,045

)

 

$

4,300

 

 

$

(3,660

)

 

$

(792

)

 

$

2,045

 

 

$

(2,407

)

 

$

306

 

 

$

1,893

 

 

 

4

 

Cloud services and license support agreements and related relationships

 

 

5,260

 

 

 

4,318

 

 

 

(122

)

 

 

9,456

 

 

 

(4,194

)

 

 

(1,507

)

 

 

122

 

 

 

(5,579

)

 

 

1,066

 

 

 

3,877

 

 

 

7

 

Cloud license and on-premise license agreements and related relationships

 

 

356

 

 

 

2,437

 

 

 

(105

)

 

 

2,688

 

 

 

(343

)

 

 

(459

)

 

 

105

 

 

 

(697

)

 

 

13

 

 

 

1,991

 

 

 

7

 

Other

 

 

865

 

 

 

2,845

 

 

 

(128

)

 

 

3,582

 

 

 

(810

)

 

 

(824

)

 

 

128

 

 

 

(1,506

)

 

 

55

 

 

 

2,076

 

 

 

4

 

Total intangible assets, net

 

$

10,447

 

 

$

11,979

 

 

$

(2,400

)

 

$

20,026

 

 

$

(9,007

)

 

$

(3,582

)

 

$

2,400

 

 

$

(10,189

)

 

$

1,440

 

 

$

9,837

 

 

 

 

 

(1)
Amounts also included any changes in intangible asset balances for the periods presented that resulted from foreign currency translations.
(2)
Represents weighted-average useful lives (in years) of intangible assets acquired during fiscal 2023.
Estimated Future Amortization Expenses Related to Intangible Assets

Fiscal 2024

 

$

2,994

 

Fiscal 2025

 

 

2,283

 

Fiscal 2026

 

 

1,620

 

Fiscal 2027

 

 

664

 

Fiscal 2028

 

 

635

 

Thereafter

 

 

1,641

 

Total intangible assets, net

 

$

9,837

 
Goodwill

(in millions)

 

Cloud and License

 

 

Hardware

 

 

Services

 

 

Total Goodwill, net

 

Balances as of May 31, 2021

 

$

39,786

 

 

$

2,367

 

 

$

1,782

 

 

$

43,935

 

Goodwill adjustments, net(1)

 

 

152

 

 

 

—

 

 

 

(276

)

 

 

(124

)

Balances as of May 31, 2022

 

 

39,938

 

 

 

2,367

 

 

 

1,506

 

 

 

43,811

 

Goodwill from acquisitions

 

 

17,203

 

 

 

365

 

 

 

1,050

 

 

 

18,618

 

Goodwill adjustments, net(1)

 

 

(81

)

 

 

—

 

 

 

(87

)

 

 

(168

)

Balances as of May 31, 2023

 

$

57,060

 

 

$

2,732

 

 

$

2,469

 

 

$

62,261

 

 

Amounts include any changes in goodwill balances for the period presented that resulted from foreign currency translations and certain other adjustments.
v3.23.2
NOTES PAYABLE AND OTHER BORROWINGS (Tables)
 12 Months Ended
May 31, 2023
Debt Disclosure [Abstract]  
Notes Payable and Other Borrowings

 

 

 

 

May 31,

 

 

 

 

2023

 

2022

(Amounts in millions)

 

Date of
Issuance

 

Amount

 

 

Effective
Interest
Rate

 

Amount

 

 

Effective
Interest
Rate

Fixed-rate senior notes:

 

 

 

 

 

 

 

 

 

 

 

 

$2,500, 2.50%, due October 2022

 

October 2012

 

$

—

 

 

N.A

 

$

2,500

 

 

2.51%

$1,250, 2.625%, due February 2023

 

November 2017

 

 

—

 

 

N.A

 

 

1,250

 

 

2.64%

$1,000, 3.625%, due July 2023

 

July 2013

 

 

1,000

 

 

3.73%

 

 

1,000

 

 

3.73%

$2,500, 2.40%, due September 2023

 

July 2016

 

 

2,500

 

 

2.44%

 

 

2,500

 

 

2.40%

$2,000, 3.40%, due July 2024

 

July 2014

 

 

2,000

 

 

3.43%

 

 

2,000

 

 

3.43%

$2,000, 2.95%, due November 2024

 

November 2017

 

 

2,000

 

 

3.01%

 

 

2,000

 

 

2.98%

$3,500, 2.50%, due April 2025

 

April 2020

 

 

3,500

 

 

2.54%

 

 

3,500

 

 

2.51%

$2,500, 2.95%, due May 2025

 

May 2015

 

 

2,500

 

 

3.05%

 

 

2,500

 

 

3.00%

€750, 3.125%, due July 2025(1)(2)

 

July 2013

 

 

800

 

 

3.17%

 

 

803

 

 

3.17%

$1,000, 5.80%, due November 2025(3)

 

November 2022

 

 

1,000

 

 

5.93%

 

 

—

 

 

N.A

$2,750, 1.65%, due March 2026

 

March 2021

 

 

2,750

 

 

1.67%

 

 

2,750

 

 

1.66%

$3,000, 2.65%, due July 2026

 

July 2016

 

 

3,000

 

 

2.73%

 

 

3,000

 

 

2.69%

$2,250, 2.80%, due April 2027

 

April 2020

 

 

2,250

 

 

2.87%

 

 

2,250

 

 

2.83%

$2,750, 3.25%, due November 2027

 

November 2017

 

 

2,750

 

 

3.29%

 

 

2,750

 

 

3.26%

$2,000, 2.30%, due March 2028

 

March 2021

 

 

2,000

 

 

2.36%

 

 

2,000

 

 

2.34%

$750, 4.50%, due May 2028(3)

 

February 2023

 

 

750

 

 

4.60%

 

 

—

 

 

N.A

$1,250, 6.15%, due November 2029(3)

 

November 2022

 

 

1,250

 

 

6.21%

 

 

—

 

 

N.A

$3,250, 2.95%, due April 2030

 

April 2020

 

 

3,250

 

 

3.00%

 

 

3,250

 

 

2.96%

$750, 4.65%, due May 2030(3)

 

February 2023

 

 

750

 

 

4.75%

 

 

—

 

 

N.A

$500, 3.25%, due May 2030

 

May 2015

 

 

500

 

 

3.35%

 

 

500

 

 

3.30%

$3,250, 2.875%, due March 2031

 

March 2021

 

 

3,250

 

 

2.92%

 

 

3,250

 

 

2.89%

$2,250, 6.25%, due November 2032(3)

 

November 2022

 

 

2,250

 

 

6.32%

 

 

—

 

 

N.A

$1,500, 4.90%, due February 2033(3)

 

February 2023

 

 

1,500

 

 

4.95%

 

 

—

 

 

N.A

$1,750, 4.30%, due July 2034

 

July 2014

 

 

1,750

 

 

4.30%

 

 

1,750

 

 

4.30%

$1,250, 3.90%, due May 2035

 

May 2015

 

 

1,250

 

 

4.00%

 

 

1,250

 

 

3.95%

$1,250, 3.85%, due July 2036

 

July 2016

 

 

1,250

 

 

3.89%

 

 

1,250

 

 

3.85%

$1,750, 3.80%, due November 2037

 

November 2017

 

 

1,750

 

 

3.86%

 

 

1,750

 

 

3.83%

$1,250, 6.50%, due April 2038

 

April 2008

 

 

1,250

 

 

6.51%

 

 

1,250

 

 

6.52%

$1,250, 6.125%, due July 2039

 

July 2009

 

 

1,250

 

 

6.17%

 

 

1,250

 

 

6.19%

$3,000, 3.60%, due April 2040

 

April 2020

 

 

3,000

 

 

3.64%

 

 

3,000

 

 

3.62%

$2,250, 5.375%, due July 2040

 

July 2010

 

 

2,250

 

 

5.45%

 

 

2,250

 

 

5.45%

$2,250, 3.65%, due March 2041

 

March 2021

 

 

2,250

 

 

3.72%

 

 

2,250

 

 

3.70%

$1,000, 4.50%, due July 2044

 

July 2014

 

 

1,000

 

 

4.50%

 

 

1,000

 

 

4.50%

$2,000, 4.125%, due May 2045

 

May 2015

 

 

2,000

 

 

4.20%

 

 

2,000

 

 

4.15%

$3,000, 4.00%, due July 2046

 

July 2016

 

 

3,000

 

 

4.03%

 

 

3,000

 

 

4.00%

$2,250, 4.00%, due November 2047

 

November 2017

 

 

2,250

 

 

4.05%

 

 

2,250

 

 

4.03%

$4,500, 3.60%, due April 2050

 

April 2020

 

 

4,500

 

 

3.64%

 

 

4,500

 

 

3.62%

$3,250, 3.95%, due March 2051

 

March 2021

 

 

3,250

 

 

3.98%

 

 

3,250

 

 

3.96%

$2,500, 6.90%, due November 2052(3)

 

November 2022

 

 

2,500

 

 

6.94%

 

 

—

 

 

N.A

$2,250, 5.55%, due February 2053(3)

 

February 2023

 

 

2,250

 

 

5.62%

 

 

—

 

 

N.A

$1,250, 4.375%, due May 2055

 

May 2015

 

 

1,250

 

 

4.44%

 

 

1,250

 

 

4.40%

$3,500, 3.85%, due April 2060

 

April 2020

 

 

3,500

 

 

3.89%

 

 

3,500

 

 

3.87%

$1,500, 4.10%, due March 2061

 

March 2021

 

 

1,500

 

 

4.13%

 

 

1,500

 

 

4.11%

Term loan credit agreement and other borrowings:

 

 

 

 

 

 

 

 

 

 

 

 

$790, SOFR plus 1.70%, due August 2025(4)

 

August 2022

 

 

790

 

 

5.68%

 

 

—

 

 

N.A

$170, SOFR plus 1.70%, due August 2025

 

November 2022

 

 

170

 

 

6.16%

 

 

—

 

 

N.A

$3,570, SOFR plus 1.70%, due August 2027(4)

 

August 2022

 

 

3,570

 

 

5.68%

 

 

—

 

 

N.A

$1,100, SOFR plus 1.70%, due August 2027

 

November 2022

 

 

1,100

 

 

6.16%

 

 

—

 

 

N.A

Commercial paper notes

 

 

 

 

563

 

 

4.89%

 

 

—

 

 

N.A

Other borrowings due August 2025

 

November 2016

 

 

113

 

 

3.53%

 

 

113

 

 

3.53%

Total senior notes and other borrowings

 

 

 

$

90,856

 

 

 

 

$

76,166

 

 

 

Unamortized discount/issuance costs

 

 

 

 

(323

)

 

 

 

 

(284

)

 

 

Hedge accounting fair value adjustments(2)

 

 

 

 

(52

)

 

 

 

 

(23

)

 

 

Total notes payable and other borrowings

 

 

 

$

90,481

 

 

 

 

$

75,859

 

 

 

Notes payable, current

 

 

 

$

4,061

 

 

 

 

$

3,749

 

 

 

Notes payable and other borrowings, non-current

 

 

 

$

86,420

 

 

 

 

$

72,110

 

 

 

 

(1)
In July 2013, we issued €750 million of 3.125% senior notes due July 2025 (July 2025 Notes). Principal and unamortized discount/issuance costs for the July 2025 Notes in the table above were calculated using foreign currency exchange rates, as applicable, as of May 31, 2023 and May 31, 2022, respectively. The July 2025 Notes are registered and trade on the New York Stock Exchange.
(2)
In fiscal 2018 we entered into certain cross-currency interest rate swap agreements that have the economic effect of converting our fixed-rate, Euro-denominated debt, including annual interest payments and the payment of principal at maturity, to a variable-rate, U.S. Dollar-denominated debt of $871 million based on LIBOR. The effective interest rates as of May 31, 2023 and 2022 after consideration of the cross-currency interest rate swap agreements were 8.36% and 4.10%, respectively, for the July 2025 Notes. Refer to Note 1 for a description of our accounting for fair value hedges.
(3)
In fiscal 2023, we issued $12.3 billion of senior notes and used the net proceeds from the issuance of the senior notes to repay the amount of indebtedness outstanding under the Bridge Credit Agreement, to repay $1.3 billion of senior notes due February 2023 and to partially repay our outstanding commercial paper notes. The interest is payable semi-annually. We may redeem some or all of the senior notes of each series prior to their maturity, subject to certain restrictions, and the payment of an applicable make-whole premium in certain instances.
(4)
In fiscal 2023, we entered into certain interest rate swap agreements that have the economic effect of converting our floating-rate borrowings to fixed-rate borrowings with a fixed annual interest rate of 3.07%, plus a margin depending on the credit rating assigned to our long-term senior unsecured debt, as further discussed below.
Future Principal Payments for all Borrowings

Fiscal 2024

 

$

4,063

 

Fiscal 2025

 

 

10,000

 

Fiscal 2026

 

 

5,694

 

Fiscal 2027

 

 

5,250

 

Fiscal 2028

 

 

10,170

 

Thereafter

 

 

55,750

 

Total

 

$

90,927

 
v3.23.2
RESTRUCTURING ACTIVITIES (Tables)
 12 Months Ended
May 31, 2023
Restructuring And Related Activities [Abstract]  
Summary of All Plans

Fiscal 2023 Activity

 

 

 

Accrued

 

 

Year Ended May 31, 2023

 

 

Accrued

 

(in millions)

 

May 31,
2022(2)

 

 

Initial
Costs(3)

 

 

Adj. to
Cost(4)

 

 

Cash
Payments

 

 

Others(5)

 

 

May 31,
2023(2)

 

Fiscal 2022 Oracle Restructuring Plan(1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cloud and license

 

$

34

 

 

$

288

 

 

$

(6

)

 

$

(218

)

 

$

1

 

 

$

99

 

Hardware

 

 

7

 

 

 

18

 

 

 

—

 

 

 

(18

)

 

 

(1

)

 

 

6

 

Services

 

 

9

 

 

 

28

 

 

 

—

 

 

 

(19

)

 

 

(1

)

 

 

17

 

Other

 

 

10

 

 

 

162

 

 

 

3

 

 

 

(141

)

 

 

1

 

 

 

35

 

Total Fiscal 2022 Oracle Restructuring Plan

 

$

60

 

 

$

496

 

 

$

(3

)

 

$

(396

)

 

$

—

 

 

$

157

 

Total other restructuring plans(6)

 

$

71

 

 

$

1

 

 

$

(4

)

 

$

(22

)

 

$

(4

)

 

$

42

 

Total restructuring plans

 

$

131

 

 

$

497

 

 

$

(7

)

 

$

(418

)

 

$

(4

)

 

$

199

 

 

Fiscal 2022 Activity

 

 

 

Accrued

 

 

Year Ended May 31, 2022

 

 

Accrued

 

(in millions)

 

May 31,
2021

 

 

Initial
Costs(3)

 

 

Adj. to
Cost(4)

 

 

Cash
Payments

 

 

Others(5)

 

 

May 31,
2022(2)

 

Fiscal 2022 Oracle Restructuring Plan(1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cloud and license

 

$

—

 

 

$

90

 

 

$

(2

)

 

$

(52

)

 

$

(2

)

 

$

34

 

Hardware

 

 

—

 

 

 

11

 

 

 

—

 

 

 

(4

)

 

 

—

 

 

 

7

 

Services

 

 

—

 

 

 

16

 

 

 

—

 

 

 

(7

)

 

 

—

 

 

 

9

 

Other

 

 

—

 

 

 

105

 

 

 

3

 

 

 

(29

)

 

 

(69

)

 

 

10

 

Total Fiscal 2022 Oracle Restructuring Plan

 

$

—

 

 

$

222

 

 

$

1

 

 

$

(92

)

 

$

(71

)

 

$

60

 

Total other restructuring plans(6)

 

$

225

 

 

$

—

 

 

$

(32

)

 

$

(109

)

 

$

(13

)

 

$

71

 

Total restructuring plans

 

$

225

 

 

$

222

 

 

$

(31

)

 

$

(201

)

 

$

(84

)

 

$

131

 

 

Fiscal 2021 Activity

 

 

 

Accrued

 

 

Year Ended May 31, 2021

 

 

Accrued

 

(in millions)

 

May 31,
2020

 

 

Initial
Costs(3)

 

 

Adj. to
Cost(4)

 

 

Cash
Payments

 

 

Others(5)

 

 

May 31,
2021

 

Fiscal 2019 Oracle Restructuring Plan(1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cloud and license

 

$

75

 

 

$

225

 

 

$

(22

)

 

$

(171

)

 

$

12

 

 

$

119

 

Hardware

 

 

14

 

 

 

39

 

 

 

(2

)

 

 

(34

)

 

 

(1

)

 

 

16

 

Services

 

 

27

 

 

 

54

 

 

 

(4

)

 

 

(56

)

 

 

3

 

 

 

24

 

Other

 

 

22

 

 

 

137

 

 

 

3

 

 

 

(110

)

 

 

5

 

 

 

57

 

Total Fiscal 2019 Oracle Restructuring Plan

 

$

138

 

 

$

455

 

 

$

(25

)

 

$

(371

)

 

$

19

 

 

$

216

 

Total other restructuring plans(6)

 

$

13

 

 

$

2

 

 

$

(1

)

 

$

(5

)

 

$

—

 

 

$

9

 

Total restructuring plans

 

$

151

 

 

$

457

 

 

$

(26

)

 

$

(376

)

 

$

19

 

 

$

225

 

 

(1)
Restructuring costs recorded to each of the operating segments presented primarily related to employee severance costs. Other restructuring costs represented employee severance costs not related to our operating segments and certain other restructuring plan costs.
(2)
As of May 31, 2023 and 2022, substantially all restructuring liabilities have been recorded in other current liabilities within our consolidated balance sheets.
(3)
Costs recorded for the respective restructuring plans during the 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 non-cash adjustments.
(6)
Other restructuring plans presented in the tables above included condensed information for other Oracle based plans and other plans associated with certain of our acquisitions whereby we continued to make cash outlays to settle obligations under these plans during the periods presented but for which the periodic impact to our consolidated statements of operations was not significant.
v3.23.2
DEFERRED REVENUES (Tables)
 12 Months Ended
May 31, 2023
Deferred Revenue Disclosure [Abstract]  
Deferred Revenues

 

 

May 31,

 

(in millions)

 

2023

 

 

2022

 

Cloud services and license support

 

$

7,983

 

 

$

7,406

 

Hardware

 

 

535

 

 

 

555

 

Services

 

 

400

 

 

 

360

 

Cloud license and on-premise license

 

 

52

 

 

 

36

 

Deferred revenues, current

 

 

8,970

 

 

 

8,357

 

Deferred revenues, non-current (in other non-current liabilities)

 

 

968

 

 

 

753

 

Total deferred revenues

 

$

9,938

 

 

$

9,110

 
v3.23.2
LEASES, OTHER COMMITMENTS AND CERTAIN CONTINGENCIES (Tables)
 12 Months Ended
May 31, 2023
Leases Other Commitments And Certain Contingencies Disclosure [Abstract]  
Schedule of Maturities of Operating Lease Liabilities

Maturities of operating lease liabilities were as follows as of May 31, 2023 (in millions):

Fiscal 2024

 

$

906

 

Fiscal 2025

 

 

832

 

Fiscal 2026

 

 

783

 

Fiscal 2027

 

 

683

 

Fiscal 2028

 

 

593

 

Thereafter

 

 

1,889

 

Total operating lease payments

 

 

5,686

 

Less: imputed interest

 

 

(837

)

Total operating lease liability

 

$

4,849

 
Unconditional Purchase and Certain Other Obligations

Fiscal 2024

 

$

1,732

 

Fiscal 2025

 

 

294

 

Fiscal 2026

 

 

174

 

Fiscal 2027

 

 

134

 

Fiscal 2028

 

 

77

 

Thereafter

 

 

360

 

Total

 

$

2,771

 
v3.23.2
STOCKHOLDERS' EQUITY (DEFICIT) (Tables)
 12 Months Ended
May 31, 2023
Stockholders Equity Note [Abstract]  
Accumulated Other Comprehensive Loss

The following table summarizes, as of each balance sheet date, the components of our AOCL, net of income taxes:

 

 

 

May 31,

 

(in millions)

 

2023

 

 

2022

 

Foreign currency translation losses

 

$

(1,686

)

 

$

(1,482

)

Unrealized gains on marketable securities, net

 

 

1

 

 

 

—

 

Unrealized gains (losses) on defined benefit plans, net

 

 

61

 

 

 

(210

)

Unrealized gains on cash flow hedges, net

 

 

102

 

 

 

—

 

Total accumulated other comprehensive loss

 

$

(1,522

)

 

$

(1,692

)
v3.23.2
EMPLOYEE BENEFIT PLANS (Tables)
 12 Months Ended
May 31, 2023
Employee Benefits And Share Based Compensation [Abstract]  
Summary of Restricted Stock Based Award Activity

 

 

Restricted Stock-Based Awards Outstanding

 

(in millions, except fair value)

 

Number of
Shares

 

 

Weighted-Average
Grant Date Fair Value

 

Balance, May 31, 2020

 

 

101

 

 

$

48.36

 

Granted

 

 

54

 

 

$

54.95

 

Vested and issued

 

 

(34

)

 

$

46.88

 

Canceled

 

 

(11

)

 

$

50.40

 

Balance, May 31, 2021

 

 

110

 

 

$

51.87

 

Granted

 

 

65

 

 

$

85.07

 

Vested and issued

 

 

(38

)

 

$

50.52

 

Canceled

 

 

(9

)

 

$

63.25

 

Balance, May 31, 2022

 

 

128

 

 

$

68.34

 

Granted

 

 

76

 

 

$

66.67

 

Assumed

 

 

5

 

 

$

69.02

 

Vested and issued

 

 

(46

)

 

$

62.97

 

Canceled

 

 

(11

)

 

$

69.25

 

Balance, May 31, 2023

 

 

152

 

 

$

69.09

 
Summary of Stock Option Activity

 

 

Options Outstanding

 

(in millions, except exercise price)

 

Shares Under
Stock Option

 

 

Weighted-Average
Exercise Price

 

Balance, May 31, 2020

 

 

176

 

 

$

38.86

 

Granted and assumed

 

 

—

 

 

$

—

 

Exercised

 

 

(52

)

 

$

32.05

 

Canceled

 

 

(17

)

 

$

51.02

 

Balance, May 31, 2021

 

 

107

 

 

$

40.14

 

Granted and assumed

 

 

—

 

 

$

—

 

Exercised

 

 

(10

)

 

$

34.34

 

Canceled

 

 

—

 

 

$

—

 

Balance, May 31, 2022

 

 

97

 

 

$

40.70

 

Granted and assumed

 

 

—

 

 

$

—

 

Exercised

 

 

(33

)

 

$

31.37

 

Canceled

 

 

—

 

 

$

—

 

Balance, May 31, 2023

 

 

64

 

 

$

45.42

 

 

 

Outstanding
Stock Options
(in millions)

 

 

Weighted-Average
Exercise Price

 

 

Weighted-Average
Remaining Contract Term
(in years)

 

 

Aggregate
Intrinsic Value(1) 
(in millions)

 

Vested

 

 

34

 

 

$

40.41

 

 

 

1.87

 

 

$

2,254

 

Expected to vest(2)

 

 

15

 

 

$

51.10

 

 

 

2.29

 

 

 

837

 

Total

 

 

49

 

 

$

43.69

 

 

 

2.00

 

 

$

3,091

 

 

(1)
The aggregate intrinsic value was calculated based on the gross difference between our closing stock price on the last trading day of fiscal 2023 of $105.94 and the exercise prices for all “in-the-money” options outstanding, excluding tax effects.
(2)
The unrecognized compensation expense calculated under the fair value method for shares expected to vest (unvested shares net of expected forfeitures) as of May 31, 2023 was approximately $134 million and is expected to be recognized over a weighted-average period of 1.57 years. Approximately 15 million shares outstanding as of May 31, 2023 were not expected to vest.
Stock-Based Compensation Expense

 

 

Year Ended May 31,

 

(in millions)

 

2023

 

 

2022

 

 

2021

 

Cloud services and license support

 

$

435

 

 

$

205

 

 

$

134

 

Hardware

 

 

18

 

 

 

15

 

 

 

11

 

Services

 

 

137

 

 

 

67

 

 

 

55

 

Sales and marketing

 

 

611

 

 

 

448

 

 

 

313

 

Research and development

 

 

1,983

 

 

 

1,633

 

 

 

1,188

 

General and administrative

 

 

363

 

 

 

245

 

 

 

136

 

Total stock-based compensation

 

 

3,547

 

 

 

2,613

 

 

 

1,837

 

Estimated income tax benefit included in provision for income taxes

 

 

(802

)

 

 

(593

)

 

 

(413

)

Total stock-based compensation, net of estimated income tax benefit

 

$

2,745

 

 

$

2,020

 

 

$

1,424

 
v3.23.2
INCOME TAXES (Tables)
 12 Months Ended
May 31, 2023
Income Tax Disclosure [Abstract]  
Geographical Breakdown of Income Before Income Taxes

 

 

Year Ended May 31,

 

(in millions)

 

2023

 

 

2022

 

 

2021

 

Domestic

 

$

1,492

 

 

$

(629

)

 

$

4,375

 

Foreign

 

 

7,634

 

 

 

8,278

 

 

 

8,624

 

Income before income taxes

 

$

9,126

 

 

$

7,649

 

 

$

12,999

 
Components of (Provision for) Benefit from Income Taxes

 

 

Year Ended May 31,

 

(Dollars in millions)

 

2023

 

 

2022

 

 

2021

 

Current provision:

 

 

 

 

 

 

 

 

 

Federal

 

$

(625

)

 

$

(709

)

 

$

(516

)

State

 

 

(398

)

 

 

(186

)

 

 

(233

)

Foreign

 

 

(1,767

)

 

 

(1,183

)

 

 

(929

)

Total current provision

 

$

(2,790

)

 

$

(2,078

)

 

$

(1,678

)

Deferred benefit:

 

 

 

 

 

 

 

 

 

Federal

 

$

2,193

 

 

$

1,661

 

 

$

(8,631

)

State

 

 

398

 

 

 

139

 

 

 

77

 

Foreign

 

 

(424

)

 

 

(654

)

 

 

10,979

 

Total deferred benefit

 

$

2,167

 

 

$

1,146

 

 

$

2,425

 

Total (provision for) benefit from income taxes

 

$

(623

)

 

$

(932

)

 

$

747

 

Effective income tax expense (benefit) rate

 

6.8%

 

 

12.2%

 

 

(5.7%)

 
Reconciliation of Differences Between Federal Statutory Tax Rate and Effective Tax Rate

 

 

Year Ended May 31,

 

(Dollars in millions)

 

2023

 

 

2022

 

 

2021

 

U.S. federal statutory tax rate

 

21.0%

 

 

21.0%

 

 

21.0%

 

Tax provision at statutory rate

 

$

(1,917

)

 

$

(1,606

)

 

$

(2,730

)

Foreign earnings at other than United States rates

 

 

357

 

 

 

536

 

 

 

580

 

Net impact of intra-entity IP transfer

 

 

—

 

 

 

—

 

 

 

2,266

 

State tax expense, net of federal benefit

 

 

(41

)

 

 

(132

)

 

 

(206

)

Settlements and releases from judicial decisions and statute expirations, net

 

 

552

 

 

 

263

 

 

 

582

 

Tax contingency interest accrual, net

 

 

(101

)

 

 

(44

)

 

 

(55

)

Domestic tax contingency, net

 

 

(28

)

 

 

(441

)

 

 

(282

)

Federal research and development credit

 

 

280

 

 

 

222

 

 

 

169

 

Stock-based compensation

 

 

322

 

 

 

263

 

 

 

300

 

Other, net

 

 

(47

)

 

 

7

 

 

 

123

 

Total (provision for) benefit from income taxes

 

$

(623

)

 

$

(932

)

 

$

747

 
Components of Deferred Tax Liabilities and Assets

 

 

May 31,

 

(in millions)

 

2023

 

 

2022

 

Deferred tax assets:

 

 

 

 

 

 

Accruals and allowances

 

$

928

 

 

$

493

 

Employee compensation and benefits

 

 

811

 

 

 

818

 

Differences in timing of revenue recognition

 

 

662

 

 

 

623

 

Lease liabilities

 

 

1,036

 

 

 

688

 

Basis of property, plant and equipment and intangible assets

 

 

9,989

 

 

 

11,362

 

Capitalized research and development

 

 

1,421

 

 

 

—

 

Tax credit and net operating loss carryforwards

 

 

4,941

 

 

 

4,409

 

Other

 

 

189

 

 

 

141

 

Total deferred tax assets

 

 

19,977

 

 

 

18,534

 

Valuation allowance

 

 

(1,940

)

 

 

(1,742

)

Total deferred tax assets, net

 

 

18,037

 

 

 

16,792

 

Deferred tax liabilities:

 

 

 

 

 

 

Unrealized gain on stock

 

 

(79

)

 

 

(78

)

Acquired intangible assets

 

 

(2,124

)

 

 

(126

)

GILTI deferred

 

 

(8,124

)

 

 

(8,937

)

ROU assets

 

 

(1,000

)

 

 

(668

)

Withholding taxes on foreign earnings

 

 

(256

)

 

 

(232

)

Total deferred tax liabilities

 

 

(11,583

)

 

 

(10,041

)

Net deferred tax assets

 

$

6,454

 

 

$

6,751

 

Recorded as:

 

 

 

 

 

 

Non-current deferred tax assets

 

$

12,226

 

 

$

12,782

 

Non-current deferred tax liabilities

 

 

(5,772

)

 

 

(6,031

)

Net deferred tax assets

 

$

6,454

 

 

$

6,751

 
Gross Unrecognized Tax Benefits, Including Acquisitions

 

 

Year Ended May 31,

 

(in millions)

 

2023

 

 

2022

 

 

2021

 

Gross unrecognized tax benefits as of June 1

 

$

7,284

 

 

$

6,912

 

 

$

6,972

 

Increases related to tax positions from prior fiscal years

 

 

709

 

 

 

66

 

 

 

225

 

Decreases related to tax positions from prior fiscal years

 

 

(45

)

 

 

(24

)

 

 

(836

)

Increases related to tax positions taken during current fiscal year

 

 

669

 

 

 

919

 

 

 

531

 

Settlements with tax authorities

 

 

(212

)

 

 

(117

)

 

 

(51

)

Lapses of statutes of limitation

 

 

(631

)

 

 

(333

)

 

 

(66

)

Cumulative translation adjustments and other, net

 

 

(59

)

 

 

(139

)

 

 

137

 

Total gross unrecognized tax benefits as of May 31

 

$

7,715

 

 

$

7,284

 

 

$

6,912

 
v3.23.2
SEGMENT INFORMATION (Tables)
 12 Months Ended
May 31, 2023
Segment Reporting [Abstract]  
Summary of Businesses Results

 

 

Year Ended May 31,

 

(in millions)

 

2023

 

 

2022

 

 

2021

 

Cloud and license:

 

 

 

 

 

 

 

 

 

Revenues(1)

 

$

41,086

 

 

$

36,052

 

 

$

34,101

 

Cloud services and license support expenses

 

 

7,222

 

 

 

4,915

 

 

 

4,133

 

Sales and marketing expenses

 

 

7,738

 

 

 

7,054

 

 

 

6,799

 

Margin(2)

 

$

26,126

 

 

$

24,083

 

 

$

23,169

 

Hardware:

 

 

 

 

 

 

 

 

 

Revenues

 

$

3,274

 

 

$

3,183

 

 

$

3,359

 

Hardware products and support expenses

 

 

1,011

 

 

 

944

 

 

 

945

 

Sales and marketing expenses

 

 

331

 

 

 

361

 

 

 

388

 

Margin(2)

 

$

1,932

 

 

$

1,878

 

 

$

2,026

 

Services:

 

 

 

 

 

 

 

 

 

Revenues

 

$

5,594

 

 

$

3,205

 

 

$

3,021

 

Services expenses

 

 

4,490

 

 

 

2,539

 

 

 

2,393

 

Margin(2)

 

$

1,104

 

 

$

666

 

 

$

628

 

Totals:

 

 

 

 

 

 

 

 

 

Revenues(1)

 

$

49,954

 

 

$

42,440

 

 

$

40,481

 

Expenses

 

 

20,792

 

 

 

15,813

 

 

 

14,658

 

Margin(2)

 

$

29,162

 

 

$

26,627

 

 

$

25,823

 

 

(1)
Cloud and license revenues and total revenues presented for management reporting for fiscal 2021 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 due to business combination accounting rules that were applicable to acquisitions closed prior to fiscal 2022. The table below provides a reconciliation of our total operating segment revenues to our total revenues as reported in our consolidated statements of operations for all periods presented.
(2)
The margins reported reflect only the direct controllable costs of each line of business and do not include allocations of research and 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 expenses or income, net. Refer to the table below for a reconciliation of our total margin for operating segments to our income before income taxes as reported per our consolidated statements of operations.
Reconciliation of Total Operating Segment Revenues to Total Revenues and Margin to Income before Income Taxes

 

 

Year Ended May 31,

 

(in millions)

 

2023

 

 

2022

 

 

2021

 

Total revenues for operating segments

 

$

49,954

 

 

$

42,440

 

 

$

40,481

 

Cloud and license revenues(1)

 

 

—

 

 

 

—

 

 

 

(2

)

Total revenues

 

$

49,954

 

 

$

42,440

 

 

$

40,479

 

Total margin for operating segments

 

$

29,162

 

 

$

26,627

 

 

$

25,823

 

Cloud and license revenues(1)

 

 

—

 

 

 

—

 

 

 

(2

)

Research and development

 

 

(8,623

)

 

 

(7,219

)

 

 

(6,527

)

General and administrative

 

 

(1,579

)

 

 

(1,317

)

 

 

(1,254

)

Amortization of intangible assets

 

 

(3,582

)

 

 

(1,150

)

 

 

(1,379

)

Acquisition related and other

 

 

(190

)

 

 

(4,713

)

 

 

(138

)

Restructuring

 

 

(490

)

 

 

(191

)

 

 

(431

)

Stock-based compensation for operating segments

 

 

(1,201

)

 

 

(735

)

 

 

(513

)

Expense allocations and other, net

 

 

(404

)

 

 

(376

)

 

 

(366

)

Interest expense

 

 

(3,505

)

 

 

(2,755

)

 

 

(2,496

)

Non-operating (expenses) income, net

 

 

(462

)

 

 

(522

)

 

 

282

 

Income before income taxes

 

$

9,126

 

 

$

7,649

 

 

$

12,999

 

 

 

(1)
Cloud and license revenues presented for management reporting for fiscal 2021 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 due to business combination accounting rules that were applicable to acquisitions closed prior to fiscal 2022. This table includes a reconciliation of our total operating segment revenues to our total revenues as reported in our consolidated statements of operations for all periods presented.
Disaggregation of Revenue by Geography and Ecosystem

 

 

Year Ended May 31,

 

(in millions)

 

2023

 

 

2022

 

 

2021

 

Americas

 

$

31,226

 

 

$

23,679

 

 

$

21,828

 

EMEA(1)

 

 

12,109

 

 

 

12,011

 

 

 

11,894

 

Asia Pacific

 

 

6,619

 

 

 

6,750

 

 

 

6,757

 

Total revenues

 

$

49,954

 

 

$

42,440

 

 

$

40,479

 

 

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

 

 

Year Ended May 31,

 

(in millions)

 

2023

 

 

2022

 

 

2021

 

Cloud services

 

$

15,881

 

 

$

10,809

 

 

$

8,921

 

License support

 

 

19,426

 

 

 

19,365

 

 

 

19,779

 

Total cloud services and license support revenues

 

$

35,307

 

 

$

30,174

 

 

$

28,700

 

 

 

Year Ended May 31,

 

(in millions)

 

2023

 

 

2022

 

 

2021

 

Applications cloud services and license support

 

$

16,651

 

 

$

12,612

 

 

$

11,712

 

Infrastructure cloud services and license support

 

 

18,656

 

 

 

17,562

 

 

 

16,988

 

Total cloud services and license support revenues

 

$

35,307

 

 

$

30,174

 

 

$

28,700

 
Geographic Information

 

 

As of and for the Year Ended May 31,

 

 

 

2023

 

 

2022

 

 

2021

 

(in millions)

 

Revenues

 

 

Long-Lived
Assets(1)

 

 

Revenues

 

 

Long-Lived
Assets(1)

 

 

Revenues

 

 

Long-Lived
Assets(1)

 

United States

 

$

27,535

 

 

$

19,322

 

 

$

20,246

 

 

$

10,300

 

 

$

18,734

 

 

$

6,826

 

United Kingdom

 

 

2,159

 

 

 

905

 

 

 

2,335

 

 

 

805

 

 

 

2,110

 

 

 

685

 

Germany

 

 

1,755

 

 

 

940

 

 

 

1,799

 

 

 

813

 

 

 

1,744

 

 

 

561

 

Japan

 

 

1,681

 

 

 

770

 

 

 

1,847

 

 

 

788

 

 

 

1,988

 

 

 

650

 

Other countries

 

 

16,824

 

 

 

3,626

 

 

 

16,213

 

 

 

3,438

 

 

 

15,903

 

 

 

2,663

 

Total

 

$

49,954

 

 

$

25,563

 

 

$

42,440

 

 

$

16,144

 

 

$

40,479

 

 

$

11,385

 

 

(1)
Long-lived assets exclude goodwill, intangible assets, equity investments and deferred taxes, which are not allocated to specific geographic locations as it is impracticable to do so.
v3.23.2
EARNINGS PER SHARE (Tables)
 12 Months Ended
May 31, 2023
Earnings Per Share [Abstract]  
Earnings Per Share

 

 

Year Ended May 31,

 

(in millions, except per share data)

 

2023

 

 

2022

 

 

2021

 

Net income

 

$

8,503

 

 

$

6,717

 

 

$

13,746

 

Weighted average common shares outstanding

 

 

2,696

 

 

 

2,700

 

 

 

2,945

 

Dilutive effect of employee stock plans

 

 

70

 

 

 

86

 

 

 

77

 

Dilutive weighted average common shares outstanding

 

 

2,766

 

 

 

2,786

 

 

 

3,022

 

Basic earnings per share

 

$

3.15

 

 

$

2.49

 

 

$

4.67

 

Diluted earnings per share

 

$

3.07

 

 

$

2.41

 

 

$

4.55

 

Shares subject to anti-dilutive restricted stock-based awards and stock options excluded from calculation(1)

 

 

50

 

 

 

34

 

 

 

36

 

 

(1)
These weighted shares relate to anti-dilutive restricted service based stock-based awards as calculated using the treasury stock method and contingently issuable shares pursuant to PSOs arrangements. Such shares could be dilutive in the future. See Note 12 for information regarding the exercise prices of our outstanding, unexercised stock options.
v3.23.2
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES Narrative (Details)
 3 Months Ended 12 Months Ended
Jun. 08, 2022
Subsidiary
Aug. 31, 2022
May 31, 2023
USD ($)
Business
May 31, 2022
USD ($)
May 31, 2021
USD ($)
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]          
Litigation related charges       $ 4,700,000,000  
Number of owned wholly subsidiaries | Subsidiary 1        
Total net tax benefit         $ 2,300,000,000
Number of businesses | Business     3    
Decrease in total operating expense due to change in accounting estimate     $ 434,000,000    
Contract with Customer, Asset and Liability [Abstract]          
Revenues recognized included in opening deferred revenues balance     8,300,000,000 8,800,000,000  
Revenue, Performance Obligation [Abstract]          
Remaining performance obligation, amount     67,900,000,000    
Sales of Financing Receivables [Abstract]          
Sales of financing receivables     2,000,000,000.0 1,800,000,000 1,700,000,000
Equity Securities, FV-NI and without Readily Determinable Fair Value [Abstract]          
Non-marketable debt instrument investments and equity securities and related instruments     1,600,000,000 1,200,000,000  
Inventory Net [Abstract]          
Total inventories     298,000,000 314,000,000  
Other Receivables [Narrative] [Abstract]          
Other receivables included in prepaid expenses and other current assets     798,000,000 791,000,000  
Goodwill, Intangible Assets and Impairment Assessments [Abstract]          
Goodwill impairment loss     0 0 0
Foreign Currency [Abstract]          
Net foreign exchange transaction losses included in non-operating expenses or income, net     $ 249,000,000 $ 199,000,000 $ 112,000,000
Stock-Based Compensation [Abstract]          
Service period of award     4 years    
Minimum [Member]          
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]          
Useful life of asset     1 year    
Property, Plant and Equipment [Abstract]          
Property, plant and equipment, estimated useful lives     1 year    
Minimum [Member] | Servers [Member]          
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]          
Useful life of asset   4 years      
Maximum [Member]          
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]          
Useful life of asset     10 years    
Property, Plant and Equipment [Abstract]          
Property, plant and equipment, estimated useful lives     40 years    
Maximum [Member] | Servers [Member]          
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]          
Useful life of asset   5 years      
v3.23.2
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES Narrative (Details1)
May 31, 2023
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2023-06-01  
Revenue, Performance Obligation [Abstract]  
Remaining performance obligation, percentage 49.00%
Revenue, remaining performance obligation, expected timing of satisfaction, period 12 months
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2024-06-01  
Revenue, Performance Obligation [Abstract]  
Remaining performance obligation, percentage 35.00%
Revenue, remaining performance obligation, expected timing of satisfaction, period 2 years
v3.23.2
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($)
$ in Millions
 12 Months Ended
May 31, 2023
May 31, 2022
May 31, 2021
Acquisition Related and Other Expenses [Abstract]      
Transitional and other employee related costs $ 77 $ 10 $ 5
Business combination adjustments, net 10 9 4
Other, net 103 4,694 129
Total acquisition related and other expenses 190 4,713 138
Non-Operating (Expenses) Income, net [Abstract]      
Interest income 285 94 101
Foreign currency losses, net (249) (199) (112)
Noncontrolling interests in income (165) (184) (180)
(Losses) gains from equity investments, net (327) (147) 262
Other (losses) gains, net (6) (86) 211
Total non-operating (expenses) income, net $ (462) $ (522) $ 282
v3.23.2
ACQUISITIONS Narrative (Details) - USD ($)
$ / shares in Units, $ in Millions
 12 Months Ended
Jun. 08, 2022
Jan. 19, 2022
May 31, 2023
May 31, 2022
May 31, 2021
Business Acquisition [Line Items]          
Total revenues     $ 49,954 $ 42,440 $ 40,479
Fair values of restricted stock-based awards and stock options assumed     55 $ 0 $ 0
Cerner Corporation [Member]          
Business Acquisition [Line Items]          
Merger agreement date   Jan. 19, 2022      
Total revenues     5,900    
Total preliminary purchase price $ 28,225        
Preliminary purchase price, in cash 28,200        
Fair values of restricted stock-based awards and stock options assumed 55        
Business combination, senior notes and other borrowings assumed $ 1,600        
Business combination, assumed senior notes and other borrowings, repaid     $ 1,600    
Common Stock [Member] | Cerner Corporation [Member]          
Business Acquisition [Line Items]          
Tender offer purchase share price   $ 95.00      
v3.23.2
FAIR VALUES OF NET ASSETS ACQUIRED FROM CERNER (Details) - USD ($)
$ in Millions
Jun. 08, 2022
May 31, 2023
May 31, 2022
May 31, 2021
Business Acquisition [Line Items]        
Goodwill   $ 62,261 $ 43,811 $ 43,935
Cerner Corporation [Member]        
Business Acquisition [Line Items]        
Cash and marketable securities $ 769      
Trade receivables, net 854      
Property, plant and equipment, net 1,512      
Intangible assets 11,972      
Goodwill 18,618      
Other assets 520      
Accounts payable and other liabilities (1,691)      
Deferred revenues (305)      
Senior notes and other borrowings (1,600)      
Deferred tax liabilities, net (2,424)      
Total preliminary purchase price $ 28,225      
v3.23.2
ACQUISITIONS - UNAUDITED PRO FORMA FINANCIAL INFORMATION (Details) - USD ($)
$ / shares in Units, $ in Millions
 12 Months Ended
May 31, 2023
May 31, 2022
Business Acquisition, Pro Forma Information [Abstract]    
Total revenues $ 50,065 $ 48,218
Net income $ 8,456 $ 4,988
Basic earnings per share $ 3.14 $ 1.85
Diluted earnings per share $ 3.06 $ 1.79
v3.23.2
CASH, CASH EQUIVALENTS AND MARKETABLE SECURITIES (Details) - USD ($)
$ in Millions
May 31, 2023
May 31, 2022
Cash Cash Equivalents And Short Term Investments [Abstract]    
Money market funds $ 1,694 $ 12,842
Time deposits and other 468 520
Total investments 2,162 13,362
Investments classified as cash equivalents 1,740 12,843
Investments classified as marketable securities $ 422 $ 519
v3.23.2
FAIR VALUE MEASUREMENTS (Details) - USD ($)
$ in Millions
May 31, 2023
May 31, 2022
Assets [Abstract]    
Derivative financial instruments $ 102 $ 0
Total assets 2,264 13,362
Liabilities [Abstract]    
Derivative financial instruments 126 97
Money Market Funds [Member]    
Assets [Abstract]    
Investments and cash and cash equivalents 1,694 12,842
Time Deposits and Other [Member]    
Assets [Abstract]    
Investments and cash and cash equivalents 468 520
Fair Value Measurements Using Input Types Level 1 [Member]    
Assets [Abstract]    
Derivative financial instruments 0 0
Total assets 1,874 13,082
Liabilities [Abstract]    
Derivative financial instruments 0 0
Fair Value Measurements Using Input Types Level 1 [Member] | Money Market Funds [Member]    
Assets [Abstract]    
Investments and cash and cash equivalents 1,694 12,842
Fair Value Measurements Using Input Types Level 1 [Member] | Time Deposits and Other [Member]    
Assets [Abstract]    
Investments and cash and cash equivalents 180 240
Fair Value Measurements Using Input Types Level 2 [Member]    
Assets [Abstract]    
Derivative financial instruments 102 0
Total assets 390 280
Liabilities [Abstract]    
Derivative financial instruments 126 97
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] | Time Deposits and Other [Member]    
Assets [Abstract]    
Investments and cash and cash equivalents $ 288 $ 280
v3.23.2
FAIR VALUE MEASUREMENTS Narrative (Details) - USD ($)
$ in Millions
May 31, 2023
May 31, 2022
Marketable security investments maturity information [Abstract]    
Total debt, carrying value $ 90,856 $ 76,166
Senior Notes and Other Long Term Borrowings [Member]    
Marketable security investments maturity information [Abstract]    
Total debt, carrying value 89,900 75,900
Fair Value Measurements Using Input Types Level 2 [Member] | Senior Notes and Other Borrowings [Member]    
Marketable security investments maturity information [Abstract]    
Total debt, fair value $ 79,900 $ 67,000
v3.23.2
PROPERTY, PLANT AND EQUIPMENT (Details) - USD ($)
$ in Millions
 12 Months Ended
May 31, 2023
May 31, 2022
Property, Plant And Equipment [Line Items]    
Computer, network, machinery and equipment $ 17,258 $ 12,844
Buildings and improvements 5,880 4,729
Furniture, fixtures and other 447 423
Land 1,243 1,166
Construction in progress [1] 3,846 512
Total property, plant and equipment 28,674 19,674
Accumulated depreciation (11,605) (9,958)
Total property, plant and equipment, net $ 17,069 $ 9,716
Minimum    
Property, Plant And Equipment [Line Items]    
Estimated Useful Lives 1 year  
Maximum    
Property, Plant And Equipment [Line Items]    
Estimated Useful Lives 40 years  
Computer, network, machinery and equipment | Minimum    
Property, Plant And Equipment [Line Items]    
Estimated Useful Lives 1 year  
Computer, network, machinery and equipment | Maximum    
Property, Plant And Equipment [Line Items]    
Estimated Useful Lives 5 years  
Buildings and improvements | Minimum    
Property, Plant And Equipment [Line Items]    
Estimated Useful Lives 1 year  
Buildings and improvements | Maximum    
Property, Plant And Equipment [Line Items]    
Estimated Useful Lives 40 years  
Furniture, fixtures and other | Minimum    
Property, Plant And Equipment [Line Items]    
Estimated Useful Lives 5 years  
Furniture, fixtures and other | Maximum    
Property, Plant And Equipment [Line Items]    
Estimated Useful Lives 15 years  
[1] Amounts primarily consist of computer equipment to be built and deployed at our data centers.
v3.23.2
INTANGIBLE ASSETS (Details) - USD ($)
$ in Millions
 12 Months Ended
May 31, 2023
May 31, 2022
May 31, 2021
Acquired Finite-Lived Intangible Assets [Line Items]      
Intangible Assets, Gross, Beginning of the period $ 10,447    
Additions & Adjustments, net [1] 11,979    
Retirements (2,400)    
Intangible Assets, Gross, Ending of the period 20,026 $ 10,447  
Accumulated Amortization, Beginning of the period (9,007)    
Expense (3,582) (1,150) $ (1,379)
Retirements 2,400    
Accumulated Amortization, Ending of the period (10,189) (9,007)  
Intangible Assets, Net 9,837 1,440  
Developed technology [Member]      
Acquired Finite-Lived Intangible Assets [Line Items]      
Intangible Assets, Gross, Beginning of the period 3,966    
Additions & Adjustments, net [1] 2,379    
Retirements (2,045)    
Intangible Assets, Gross, Ending of the period 4,300 3,966  
Accumulated Amortization, Beginning of the period (3,660)    
Expense (792)    
Retirements 2,045    
Accumulated Amortization, Ending of the period (2,407) (3,660)  
Intangible Assets, Net $ 1,893 306  
Weighted Average Useful Life [2] 4 years    
Cloud services and license support agreements and related relationships [Member]      
Acquired Finite-Lived Intangible Assets [Line Items]      
Intangible Assets, Gross, Beginning of the period $ 5,260    
Additions & Adjustments, net [1] 4,318    
Retirements (122)    
Intangible Assets, Gross, Ending of the period 9,456 5,260  
Accumulated Amortization, Beginning of the period (4,194)    
Expense (1,507)    
Retirements 122    
Accumulated Amortization, Ending of the period (5,579) (4,194)  
Intangible Assets, Net $ 3,877 1,066  
Weighted Average Useful Life [2] 7 years    
Cloud license and on-premise license agreements and related relationships [Member]      
Acquired Finite-Lived Intangible Assets [Line Items]      
Intangible Assets, Gross, Beginning of the period $ 356    
Additions & Adjustments, net [1] 2,437    
Retirements (105)    
Intangible Assets, Gross, Ending of the period 2,688 356  
Accumulated Amortization, Beginning of the period (343)    
Expense (459)    
Retirements 105    
Accumulated Amortization, Ending of the period (697) (343)  
Intangible Assets, Net $ 1,991 13  
Weighted Average Useful Life [2] 7 years    
Other [Member]      
Acquired Finite-Lived Intangible Assets [Line Items]      
Intangible Assets, Gross, Beginning of the period $ 865    
Additions & Adjustments, net [1] 2,845    
Retirements (128)    
Intangible Assets, Gross, Ending of the period 3,582 865  
Accumulated Amortization, Beginning of the period (810)    
Expense (824)    
Retirements 128    
Accumulated Amortization, Ending of the period (1,506) (810)  
Intangible Assets, Net $ 2,076 $ 55  
Weighted Average Useful Life [2] 4 years    
[1] Amounts also included any changes in intangible asset balances for the periods presented that resulted from foreign currency translations.
[2] Represents weighted-average useful lives (in years) of intangible assets acquired during fiscal 2023.
v3.23.2
INTANGIBLE ASSETS AMORTIZATION (Details) - USD ($)
$ in Millions
May 31, 2023
May 31, 2022
Finite lived intangible assets future amortization expense [Abstract]    
Fiscal 2024 $ 2,994  
Fiscal 2025 2,283  
Fiscal 2026 1,620  
Fiscal 2027 664  
Fiscal 2028 635  
Thereafter 1,641  
Intangible Assets, Net $ 9,837 $ 1,440
v3.23.2
GOODWILL (Details) - USD ($)
$ in Millions
 12 Months Ended
May 31, 2023
May 31, 2022
Goodwill [Line Items]    
Balances at period start $ 43,811 $ 43,935
Goodwill from acquisitions 18,618  
Goodwill adjustments, net [1] (168) (124)
Balances at period end 62,261 43,811
Cloud and License [Member]    
Goodwill [Line Items]    
Balances at period start 39,938 39,786
Goodwill from acquisitions 17,203  
Goodwill adjustments, net [1] (81) 152
Balances at period end 57,060 39,938
Hardware [Member]    
Goodwill [Line Items]    
Balances at period start 2,367 2,367
Goodwill from acquisitions 365  
Goodwill adjustments, net [1] 0 0
Balances at period end 2,732 2,367
Services [Member]    
Goodwill [Line Items]    
Balances at period start 1,506 1,782
Goodwill from acquisitions 1,050  
Goodwill adjustments, net [1] (87) (276)
Balances at period end $ 2,469 $ 1,506
[1] Amounts include any changes in goodwill balances for the period presented that resulted from foreign currency translations and certain other adjustments.
v3.23.2
NOTES PAYABLE AND OTHER BORROWINGS (Details)
€ in Millions, $ in Millions
 12 Months Ended
May 31, 2023
USD ($)
May 31, 2023
EUR (€)
May 31, 2022
USD ($)
Jul. 10, 2013
EUR (€)
Debt Instrument [Line Items]        
Senior notes and other borrowings, par value $ 90,927      
Notes payable and other borrowings 90,856   $ 76,166  
Unamortized discount/issuance costs (323)   (284)  
Hedge accounting fair value adjustments [1] 52   (23)  
Total notes payable and other borrowings 90,481   75,859  
Notes payable, current 4,061   3,749  
Notes payable and other borrowings, non-current 86,420   72,110  
2.50% senior notes due October 2022 [Member]        
Debt Instrument [Line Items]        
Senior notes and other borrowings, par value $ 2,500      
Stated interest rate percentage 2.50% 2.50%    
Maturity date Oct. 15, 2022      
Date of issuance Oct. 25, 2012      
Notes payable and other borrowings $ 0   $ 2,500  
Effective interest rate     2.51%  
2.625% senior notes due February 2023 [Member]        
Debt Instrument [Line Items]        
Senior notes and other borrowings, par value $ 1,250      
Stated interest rate percentage 2.625% 2.625%    
Maturity date Feb. 15, 2023      
Date of issuance Nov. 09, 2017      
Notes payable and other borrowings $ 0   $ 1,250  
Effective interest rate     2.64%  
3.625% senior notes due July 2023 [Member]        
Debt Instrument [Line Items]        
Senior notes and other borrowings, par value $ 1,000      
Stated interest rate percentage 3.625% 3.625%    
Maturity date Jul. 23, 2023      
Date of issuance Jul. 16, 2013      
Notes payable and other borrowings $ 1,000   $ 1,000  
Effective interest rate 3.73% 3.73% 3.73%  
2.40% senior notes due September 2023 [Member]        
Debt Instrument [Line Items]        
Senior notes and other borrowings, par value $ 2,500      
Stated interest rate percentage 2.40% 2.40%    
Maturity date Sep. 15, 2023      
Date of issuance Jul. 07, 2016      
Notes payable and other borrowings $ 2,500   $ 2,500  
Effective interest rate 2.44% 2.44% 2.40%  
3.40% senior notes due July 2024 [Member]        
Debt Instrument [Line Items]        
Senior notes and other borrowings, par value $ 2,000      
Stated interest rate percentage 3.40% 3.40%    
Maturity date Jul. 08, 2024      
Date of issuance Jul. 08, 2014      
Notes payable and other borrowings $ 2,000   $ 2,000  
Effective interest rate 3.43% 3.43% 3.43%  
2.50% senior notes due April 2025 [Member]        
Debt Instrument [Line Items]        
Senior notes and other borrowings, par value $ 3,500      
Stated interest rate percentage 2.50% 2.50%    
Maturity date Apr. 01, 2025      
Date of issuance Apr. 01, 2020      
Notes payable and other borrowings $ 3,500   $ 3,500  
Effective interest rate 2.54% 2.54% 2.51%  
2.95% senior notes due May 2025 [Member]        
Debt Instrument [Line Items]        
Senior notes and other borrowings, par value $ 2,500      
Stated interest rate percentage 2.95% 2.95%    
Maturity date May 15, 2025      
Date of issuance May 05, 2015      
Notes payable and other borrowings $ 2,500   $ 2,500  
Effective interest rate 3.05% 3.05% 3.00%  
1.65% senior notes due March 2026 [Member]        
Debt Instrument [Line Items]        
Senior notes and other borrowings, par value $ 2,750      
Stated interest rate percentage 1.65% 1.65%    
Maturity date Mar. 25, 2026      
Date of issuance Mar. 31, 2021      
Notes payable and other borrowings $ 2,750   $ 2,750  
Effective interest rate 1.67% 1.67% 1.66%  
2.95% senior notes due November 2024 [Member]        
Debt Instrument [Line Items]        
Senior notes and other borrowings, par value $ 2,000      
Stated interest rate percentage 2.95% 2.95%    
Maturity date Nov. 15, 2024      
Date of issuance Nov. 09, 2017      
Notes payable and other borrowings $ 2,000   $ 2,000  
Effective interest rate 3.01% 3.01% 2.98%  
3.125% senior notes due July 2025 [Member]        
Debt Instrument [Line Items]        
Senior notes and other borrowings, par value | €   € 750 [1],[2]   € 750
Stated interest rate percentage [1],[2] 3.125% 3.125%    
Maturity date [1],[2] Jul. 10, 2025      
Date of issuance [1],[2] Jul. 10, 2013      
Notes payable and other borrowings [1],[2] $ 800   $ 803  
Effective interest rate [1],[2] 3.17% 3.17% 3.17%  
5.80% senior notes due November 2025 [Member]        
Debt Instrument [Line Items]        
Senior notes and other borrowings, par value [3] $ 1,000      
Stated interest rate percentage [3] 5.80% 5.80%    
Maturity date Nov. 10, 2025      
Date of issuance Nov. 09, 2022      
Notes payable and other borrowings [3] $ 1,000   $ 0  
Effective interest rate [3] 5.93% 5.93%    
2.65% senior notes due July 2026 [Member]        
Debt Instrument [Line Items]        
Senior notes and other borrowings, par value $ 3,000      
Stated interest rate percentage 2.65% 2.65%    
Maturity date Jul. 15, 2026      
Date of issuance Jul. 07, 2016      
Notes payable and other borrowings $ 3,000   $ 3,000  
Effective interest rate 2.73% 2.73% 2.69%  
2.80% senior notes due April 2027 [Member]        
Debt Instrument [Line Items]        
Senior notes and other borrowings, par value $ 2,250      
Stated interest rate percentage 2.80% 2.80%    
Maturity date Apr. 01, 2027      
Date of issuance Apr. 01, 2020      
Notes payable and other borrowings $ 2,250   $ 2,250  
Effective interest rate 2.87% 2.87% 2.83%  
4.65% senior notes due May 2030 [Member]        
Debt Instrument [Line Items]        
Senior notes and other borrowings, par value [3] $ 750      
Stated interest rate percentage [3] 4.65% 4.65%    
Maturity date May 31, 2030      
Date of issuance Feb. 06, 2023      
Notes payable and other borrowings [3] $ 750   $ 0  
Effective interest rate [3] 4.75% 4.75%    
3.25% senior notes due May 2030 [Member]        
Debt Instrument [Line Items]        
Senior notes and other borrowings, par value $ 500      
Stated interest rate percentage 3.25% 3.25%    
Maturity date May 15, 2030      
Date of issuance May 05, 2015      
Notes payable and other borrowings $ 500   $ 500  
Effective interest rate 3.35% 3.35% 3.30%  
2.30% senior notes due March 2028 [Member]        
Debt Instrument [Line Items]        
Senior notes and other borrowings, par value $ 2,000      
Stated interest rate percentage 2.30% 2.30%    
Maturity date Mar. 25, 2028      
Date of issuance Mar. 31, 2021      
Notes payable and other borrowings $ 2,000   $ 2,000  
Effective interest rate 2.36% 2.36% 2.34%  
4.50% senior notes due May 2028 [Member]        
Debt Instrument [Line Items]        
Senior notes and other borrowings, par value [3] $ 750      
Stated interest rate percentage [3] 4.50% 4.50%    
Maturity date May 31, 2028      
Date of issuance Feb. 06, 2023      
Notes payable and other borrowings [3] $ 750   $ 0  
Effective interest rate [3] 4.60% 4.60%    
6.15% senior notes due November 2029 [Member]        
Debt Instrument [Line Items]        
Senior notes and other borrowings, par value [3] $ 1,250      
Stated interest rate percentage [3] 6.15% 6.15%    
Maturity date Nov. 09, 2029      
Date of issuance Nov. 09, 2022      
Notes payable and other borrowings [3] $ 1,250   0  
Effective interest rate [3] 6.21% 6.21%    
6.25% senior notes due November 2032 [Member]        
Debt Instrument [Line Items]        
Senior notes and other borrowings, par value [3] $ 2,250      
Stated interest rate percentage [3] 6.25% 6.25%    
Maturity date Nov. 09, 2032      
Date of issuance Nov. 09, 2022      
Notes payable and other borrowings [3] $ 2,250   0  
Effective interest rate [3] 6.32% 6.32%    
4.90% senior notes due February 2033 [Member]        
Debt Instrument [Line Items]        
Senior notes and other borrowings, par value [3] $ 1,500      
Stated interest rate percentage [3] 4.90% 4.90%    
Maturity date Feb. 28, 2033      
Date of issuance Feb. 06, 2023      
Notes payable and other borrowings [3] $ 1,500   0  
Effective interest rate [3] 4.95% 4.95%    
4.30% senior notes due July 2034 [Member]        
Debt Instrument [Line Items]        
Senior notes and other borrowings, par value $ 1,750      
Stated interest rate percentage 4.30% 4.30%    
Maturity date Jul. 08, 2034      
Date of issuance Jul. 08, 2014      
Notes payable and other borrowings $ 1,750   $ 1,750  
Effective interest rate 4.30% 4.30% 4.30%  
3.25% senior notes due November 2027 [Member]        
Debt Instrument [Line Items]        
Senior notes and other borrowings, par value $ 2,750      
Stated interest rate percentage 3.25% 3.25%    
Maturity date Nov. 15, 2027      
Date of issuance Nov. 09, 2017      
Notes payable and other borrowings $ 2,750   $ 2,750  
Effective interest rate 3.29% 3.29% 3.26%  
2.95% senior notes due April 2030 [Member]        
Debt Instrument [Line Items]        
Senior notes and other borrowings, par value $ 3,250      
Stated interest rate percentage 2.95% 2.95%    
Maturity date Apr. 01, 2030      
Date of issuance Apr. 01, 2020      
Notes payable and other borrowings $ 3,250   $ 3,250  
Effective interest rate 3.00% 3.00% 2.96%  
3.90% senior notes due May 2035 [Member]        
Debt Instrument [Line Items]        
Senior notes and other borrowings, par value $ 1,250      
Stated interest rate percentage 3.90% 3.90%    
Maturity date May 15, 2035      
Date of issuance May 05, 2015      
Notes payable and other borrowings $ 1,250   $ 1,250  
Effective interest rate 4.00% 4.00% 3.95%  
3.85% senior notes due July 2036 [Member]        
Debt Instrument [Line Items]        
Senior notes and other borrowings, par value $ 1,250      
Stated interest rate percentage 3.85% 3.85%    
Maturity date Jul. 15, 2036      
Date of issuance Jul. 07, 2016      
Notes payable and other borrowings $ 1,250   $ 1,250  
Effective interest rate 3.89% 3.89% 3.85%  
2.875% senior notes due March 2031 [Member]        
Debt Instrument [Line Items]        
Senior notes and other borrowings, par value $ 3,250      
Stated interest rate percentage 2.875% 2.875%    
Maturity date Mar. 31, 2031      
Date of issuance Mar. 31, 2021      
Notes payable and other borrowings $ 3,250   $ 3,250  
Effective interest rate 2.92% 2.92% 2.89%  
6.50% senior notes due April 2038 [Member]        
Debt Instrument [Line Items]        
Senior notes and other borrowings, par value $ 1,250      
Stated interest rate percentage 6.50% 6.50%    
Maturity date Apr. 15, 2038      
Date of issuance Apr. 09, 2008      
Notes payable and other borrowings $ 1,250   $ 1,250  
Effective interest rate 6.51% 6.51% 6.52%  
6.125% senior notes due July 2039 [Member]        
Debt Instrument [Line Items]        
Senior notes and other borrowings, par value $ 1,250      
Stated interest rate percentage 6.125% 6.125%    
Maturity date Jul. 08, 2039      
Date of issuance Jul. 08, 2009      
Notes payable and other borrowings $ 1,250   $ 1,250  
Effective interest rate 6.17% 6.17% 6.19%  
5.375% senior notes due July 2040 [Member]        
Debt Instrument [Line Items]        
Senior notes and other borrowings, par value $ 2,250      
Stated interest rate percentage 5.375% 5.375%    
Maturity date Jul. 15, 2040      
Date of issuance Jul. 12, 2010      
Notes payable and other borrowings $ 2,250   $ 2,250  
Effective interest rate 5.45% 5.45% 5.45%  
3.80% senior notes due November 2037 [Member]        
Debt Instrument [Line Items]        
Senior notes and other borrowings, par value $ 1,750      
Stated interest rate percentage 3.80% 3.80%    
Maturity date Nov. 15, 2037      
Date of issuance Nov. 09, 2017      
Notes payable and other borrowings $ 1,750   $ 1,750  
Effective interest rate 3.86% 3.86% 3.83%  
4.50% senior notes due July 2044 [Member]        
Debt Instrument [Line Items]        
Senior notes and other borrowings, par value $ 1,000      
Stated interest rate percentage 4.50% 4.50%    
Maturity date Jul. 08, 2044      
Date of issuance Jul. 08, 2014      
Notes payable and other borrowings $ 1,000   $ 1,000  
Effective interest rate 4.50% 4.50% 4.50%  
4.125% senior notes due May 2045 [Member]        
Debt Instrument [Line Items]        
Senior notes and other borrowings, par value $ 2,000      
Stated interest rate percentage 4.125% 4.125%    
Maturity date May 15, 2045      
Date of issuance May 05, 2015      
Notes payable and other borrowings $ 2,000   $ 2,000  
Effective interest rate 4.20% 4.20% 4.15%  
4.00% senior notes due July 2046 [Member]        
Debt Instrument [Line Items]        
Senior notes and other borrowings, par value $ 3,000      
Stated interest rate percentage 4.00% 4.00%    
Maturity date Jul. 15, 2046      
Date of issuance Jul. 07, 2016      
Notes payable and other borrowings $ 3,000   $ 3,000  
Effective interest rate 4.03% 4.03% 4.00%  
3.60% senior notes due April 2040 [Member]        
Debt Instrument [Line Items]        
Senior notes and other borrowings, par value $ 3,000      
Stated interest rate percentage 3.60% 3.60%    
Maturity date Apr. 01, 2040      
Date of issuance Apr. 01, 2020      
Notes payable and other borrowings $ 3,000   $ 3,000  
Effective interest rate 3.64% 3.64% 3.62%  
4.375% senior notes due May 2055 [Member]        
Debt Instrument [Line Items]        
Senior notes and other borrowings, par value $ 1,250      
Stated interest rate percentage 4.375% 4.375%    
Maturity date May 15, 2055      
Date of issuance May 05, 2015      
Notes payable and other borrowings $ 1,250   $ 1,250  
Effective interest rate 4.44% 4.44% 4.40%  
3.65% senior notes due March 2041 [Member]        
Debt Instrument [Line Items]        
Senior notes and other borrowings, par value $ 2,250      
Stated interest rate percentage 3.65% 3.65%    
Maturity date Mar. 25, 2041      
Date of issuance Mar. 31, 2021      
Notes payable and other borrowings $ 2,250   $ 2,250  
Effective interest rate 3.72% 3.72% 3.70%  
4.00% senior notes due November 2047 [Member]        
Debt Instrument [Line Items]        
Senior notes and other borrowings, par value $ 2,250      
Stated interest rate percentage 4.00% 4.00%    
Maturity date Nov. 15, 2047      
Date of issuance Nov. 09, 2017      
Notes payable and other borrowings $ 2,250   $ 2,250  
Effective interest rate 4.05% 4.05% 4.03%  
3.60% senior notes due April 2050 [Member]        
Debt Instrument [Line Items]        
Senior notes and other borrowings, par value $ 4,500      
Stated interest rate percentage 3.60% 3.60%    
Maturity date Apr. 01, 2050      
Date of issuance Apr. 01, 2020      
Notes payable and other borrowings $ 4,500   $ 4,500  
Effective interest rate 3.64% 3.64% 3.62%  
3.85% senior notes due April 2060 [Member]        
Debt Instrument [Line Items]        
Senior notes and other borrowings, par value $ 3,500      
Stated interest rate percentage 3.85% 3.85%    
Maturity date Apr. 01, 2060      
Date of issuance Apr. 01, 2020      
Notes payable and other borrowings $ 3,500   $ 3,500  
Effective interest rate 3.89% 3.89% 3.87%  
3.95% senior notes due March 2051 [Member]        
Debt Instrument [Line Items]        
Senior notes and other borrowings, par value $ 3,250      
Stated interest rate percentage 3.95% 3.95%    
Maturity date Mar. 25, 2051      
Date of issuance Mar. 31, 2021      
Notes payable and other borrowings $ 3,250   $ 3,250  
Effective interest rate 3.98% 3.98% 3.96%  
6.90% senior notes due November 2052 [Member]        
Debt Instrument [Line Items]        
Senior notes and other borrowings, par value [3] $ 2,500      
Stated interest rate percentage [3] 6.90% 6.90%    
Maturity date Nov. 09, 2052      
Date of issuance Nov. 09, 2022      
Notes payable and other borrowings [3] $ 2,500   $ 0  
Effective interest rate [3] 6.94% 6.94%    
5.55% senior notes due February 2053 [Member]        
Debt Instrument [Line Items]        
Senior notes and other borrowings, par value [3] $ 2,250      
Stated interest rate percentage [3] 5.55% 5.55%    
Maturity date Feb. 28, 2053      
Date of issuance Feb. 06, 2023      
Notes payable and other borrowings [3] $ 2,250   0  
Effective interest rate [3] 5.62% 5.62%    
4.10% senior notes due March 2061 [Member]        
Debt Instrument [Line Items]        
Senior notes and other borrowings, par value $ 1,500      
Stated interest rate percentage 4.10% 4.10%    
Maturity date Mar. 25, 2061      
Date of issuance Mar. 31, 2021      
Notes payable and other borrowings $ 1,500   $ 1,500  
Effective interest rate 4.13% 4.13% 4.11%  
Other borrowings due August 2025 [Member]        
Debt Instrument [Line Items]        
Maturity date Aug. 31, 2025      
Date of issuance Nov. 07, 2016      
Notes payable and other borrowings $ 113   $ 113  
Effective interest rate 3.53% 3.53% 3.53%  
$790, SOFR plus 1.70%, due August 2025 [Member]        
Debt Instrument [Line Items]        
Senior notes and other borrowings, par value [4] $ 790      
Maturity date Aug. 16, 2025      
Date of issuance Aug. 16, 2022      
Notes payable and other borrowings [4] $ 790   $ 0  
Effective interest rate [4] 5.68% 5.68%    
$790, SOFR plus 1.70%, due August 2025 [Member] | SOFR [Member]        
Debt Instrument [Line Items]        
Stated interest rate percentage [4] 1.70% 1.70%    
$170, SOFR plus 1.70%, due August 2025 [Member]        
Debt Instrument [Line Items]        
Senior notes and other borrowings, par value $ 170      
Maturity date Aug. 16, 2025      
Date of issuance Nov. 02, 2022      
Notes payable and other borrowings $ 170   0  
Effective interest rate 6.16% 6.16%    
$170, SOFR plus 1.70%, due August 2025 [Member] | SOFR [Member]        
Debt Instrument [Line Items]        
Stated interest rate percentage 1.70% 1.70%    
$3,570, SOFR plus 1.70%, due August 2027 [Member]        
Debt Instrument [Line Items]        
Senior notes and other borrowings, par value [4] $ 3,570      
Maturity date Aug. 16, 2027      
Date of issuance Aug. 16, 2022      
Notes payable and other borrowings [4] $ 3,570   0  
Effective interest rate [4] 5.68% 5.68%    
$3,570, SOFR plus 1.70%, due August 2027 [Member] | SOFR [Member]        
Debt Instrument [Line Items]        
Stated interest rate percentage [4] 1.70% 1.70%    
$1,100, SOFR plus 1.70%, due August 2027 [Member]        
Debt Instrument [Line Items]        
Senior notes and other borrowings, par value $ 1,100      
Maturity date Aug. 16, 2027      
Date of issuance Nov. 02, 2022      
Notes payable and other borrowings $ 1,100   0  
Effective interest rate 6.16% 6.16%    
$1,100, SOFR plus 1.70%, due August 2027 [Member] | SOFR [Member]        
Debt Instrument [Line Items]        
Stated interest rate percentage 1.70% 1.70%    
Commercial Paper Notes [Member]        
Debt Instrument [Line Items]        
Notes payable and other borrowings $ 563   $ 0  
Effective interest rate 4.89% 4.89%    
[1] In fiscal 2018 we entered into certain cross-currency interest rate swap agreements that have the economic effect of converting our fixed-rate, Euro-denominated debt, including annual interest payments and the payment of principal at maturity, to a variable-rate, U.S. Dollar-denominated debt of $871 million based on LIBOR. The effective interest rates as of May 31, 2023 and 2022 after consideration of the cross-currency interest rate swap agreements were 8.36% and 4.10%, respectively, for the July 2025 Notes. Refer to Note 1 for a description of our accounting for fair value hedges.
[2] In July 2013, we issued €750 million of 3.125% senior notes due July 2025 (July 2025 Notes). Principal and unamortized discount/issuance costs for the July 2025 Notes in the table above were calculated using foreign currency exchange rates, as applicable, as of May 31, 2023 and May 31, 2022, respectively. The July 2025 Notes are registered and trade on the New York Stock Exchange.
[3] In fiscal 2023, we issued $12.3 billion of senior notes and used the net proceeds from the issuance of the senior notes to repay the amount of indebtedness outstanding under the Bridge Credit Agreement, to repay $1.3 billion of senior notes due February 2023 and to partially repay our outstanding commercial paper notes. The interest is payable semi-annually. We may redeem some or all of the senior notes of each series prior to their maturity, subject to certain restrictions, and the payment of an applicable make-whole premium in certain instances.
[4] In fiscal 2023, we entered into certain interest rate swap agreements that have the economic effect of converting our floating-rate borrowings to fixed-rate borrowings with a fixed annual interest rate of 3.07%, plus a margin depending on the credit rating assigned to our long-term senior unsecured debt, as further discussed below.
v3.23.2
NOTES PAYABLE AND OTHER BORROWINGS Narrative (Details)
€ in Millions
 12 Months Ended
Aug. 16, 2022
USD ($)
Jun. 08, 2022
USD ($)
Mar. 08, 2022
USD ($)
May 31, 2023
USD ($)
May 31, 2023
EUR (€)
Nov. 02, 2022
USD ($)
May 31, 2022
USD ($)
May 31, 2018
USD ($)
Jul. 10, 2013
EUR (€)
Debt Instrument [Line Items]                  
Senior notes and other borrowings, par value       $ 90,927,000,000          
Revolving Credit Loans [Member]                  
Debt Instrument [Line Items]                  
Revolving credit facility     $ 6,000,000,000.0            
Revolving credit facility term     5 years            
Revolving credit facility, expiration date     Mar. 08, 2027            
Outstanding Revolving credit facility       0     $ 0    
Cerner Corporation [Member]                  
Debt Instrument [Line Items]                  
Business combination, senior notes and other borrowings assumed, repaid   $ 1,600,000,000              
Business combination, assumed senior notes and other borrowings, repaid       $ 1,600,000,000          
Cerner Corporation [Member] | Senior Notes [Member]                  
Debt Instrument [Line Items]                  
Business combination, senior notes and other borrowings assumed, repaid   1,000,000,000.0              
Business combination, assumed senior notes and other borrowings, repaid   931,000,000              
Cerner Corporation [Member] | Revolving Credit Loans [Member]                  
Debt Instrument [Line Items]                  
Business combination, assumed senior notes and other borrowings, repaid   600,000,000              
3.125% senior notes due July 2025 [Member]                  
Debt Instrument [Line Items]                  
Effective interest rate [1],[2]       3.17% 3.17%   3.17%    
Senior notes and other borrowings, par value | €         € 750 [1],[2]       € 750
3.125% senior notes due July 2025 [Member] | Cross-currency interest rate swap agreements [Member]                  
Debt Instrument [Line Items]                  
Effective interest rate       8.36% 8.36%   4.10%    
Senior notes fixed principal amount               $ 871,000,000  
Minimum [Member] | SOFR [Member] | Revolving Credit Loans [Member]                  
Debt Instrument [Line Items]                  
Revolving credit facility, basis spread on variable rate     0.875%            
Minimum [Member] | Base Rate [Member] | Revolving Credit Loans [Member]                  
Debt Instrument [Line Items]                  
Revolving credit facility, basis spread on variable rate     0.00%            
Maximum [Member] | SOFR [Member] | Revolving Credit Loans [Member]                  
Debt Instrument [Line Items]                  
Revolving credit facility, basis spread on variable rate     1.50%            
Maximum [Member] | Base Rate [Member] | Revolving Credit Loans [Member]                  
Debt Instrument [Line Items]                  
Revolving credit facility, basis spread on variable rate     0.50%            
Bridge Credit Agreement [Member]                  
Debt Instrument [Line Items]                  
Revolving credit facility   $ 15,700,000,000              
Repayment of senior notes       $ 1,300,000,000          
Maturity date       2023-02          
Bridge Credit Agreement [Member] | Senior Notes [Member]                  
Debt Instrument [Line Items]                  
Senior notes and other borrowings, par value       $ 12,300,000,000          
Bridge Credit Agreement [Member] | Minimum [Member] | SOFR [Member]                  
Debt Instrument [Line Items]                  
Revolving credit facility, basis spread on variable rate   1.00%              
Bridge Credit Agreement [Member] | Minimum [Member] | Base Rate [Member]                  
Debt Instrument [Line Items]                  
Revolving credit facility, basis spread on variable rate   0.00%              
Bridge Credit Agreement [Member] | Maximum [Member] | SOFR [Member]                  
Debt Instrument [Line Items]                  
Revolving credit facility, basis spread on variable rate   1.375%              
Bridge Credit Agreement [Member] | Maximum [Member] | Base Rate [Member]                  
Debt Instrument [Line Items]                  
Revolving credit facility, basis spread on variable rate   0.375%              
Term Loan Credit Agreement [Member]                  
Debt Instrument [Line Items]                  
Revolving credit facility $ 4,400,000,000         $ 1,300,000,000      
Line of credit facility, additional borrowing capacity $ 6,000,000,000.0                
Effective interest rate       5.76%          
Term Loan Credit Agreement [Member] | Prepayments Multiplied By 1.25% [Member]                  
Debt Instrument [Line Items]                  
Percentage of borrowed reduced by prepayments 1.25%                
Line of credit facility, prepayment date Sep. 30, 2024                
Line of credit facility, prepayment, quarterly thereafter date Jun. 30, 2026                
Term Loan Credit Agreement [Member] | Prepayments Multiplied By 2.50% [Member]                  
Debt Instrument [Line Items]                  
Percentage of borrowed reduced by prepayments 2.50%                
Line of credit facility, prepayment date Sep. 30, 2026                
Line of credit facility, prepayment, quarterly thereafter date Jun. 30, 2027                
Term Loan Credit Agreement [Member] | Minimum [Member]                  
Debt Instrument [Line Items]                  
Debt instrument covenant ratio 1.0                
Term Loan Credit Agreement [Member] | Minimum [Member] | SOFR [Member]                  
Debt Instrument [Line Items]                  
Revolving credit facility, basis spread on variable rate 1.475%                
Term Loan Credit Agreement [Member] | Minimum [Member] | Base Rate [Member]                  
Debt Instrument [Line Items]                  
Revolving credit facility, basis spread on variable rate 0.475%                
Term Loan Credit Agreement [Member] | Maximum [Member]                  
Debt Instrument [Line Items]                  
Line of credit facility termination term 2 years                
Debt instrument covenant ratio 3.0                
Term Loan Credit Agreement [Member] | Maximum [Member] | SOFR [Member]                  
Debt Instrument [Line Items]                  
Revolving credit facility, basis spread on variable rate 1.975%                
Term Loan Credit Agreement [Member] | Maximum [Member] | Base Rate [Member]                  
Debt Instrument [Line Items]                  
Revolving credit facility, basis spread on variable rate 0.975%                
Term Loan 1 Facility [Member]                  
Debt Instrument [Line Items]                  
Revolving credit facility $ 3,600,000,000         1,100,000,000      
Line of credit facility, fully due and payable Aug. 16, 2027                
Term Loan 2 Facility [Member]                  
Debt Instrument [Line Items]                  
Revolving credit facility $ 790,000,000         $ 170,000,000      
Line of credit facility, fully due and payable Aug. 16, 2025                
Term Loan 2 Facility [Member] | Maximum [Member]                  
Debt Instrument [Line Items]                  
Line of credit facility termination term 2 years                
Interest Rate Swap Agreements [Member]                  
Debt Instrument [Line Items]                  
Derivative fixed interest rate       3.07% 3.07%        
Commercial Paper [Member]                  
Debt Instrument [Line Items]                  
Revolving credit facility       $ 6,000,000,000.0          
Effective interest rate       4.89% 4.89%        
Outstanding notes       $ 563,000,000     $ 0    
Effective interest rate       4.89%          
Bridge Credit Agreement [Member]                  
Debt Instrument [Line Items]                  
Effective interest rate       3.57%          
[1] In July 2013, we issued €750 million of 3.125% senior notes due July 2025 (July 2025 Notes). Principal and unamortized discount/issuance costs for the July 2025 Notes in the table above were calculated using foreign currency exchange rates, as applicable, as of May 31, 2023 and May 31, 2022, respectively. The July 2025 Notes are registered and trade on the New York Stock Exchange.
[2] In fiscal 2018 we entered into certain cross-currency interest rate swap agreements that have the economic effect of converting our fixed-rate, Euro-denominated debt, including annual interest payments and the payment of principal at maturity, to a variable-rate, U.S. Dollar-denominated debt of $871 million based on LIBOR. The effective interest rates as of May 31, 2023 and 2022 after consideration of the cross-currency interest rate swap agreements were 8.36% and 4.10%, respectively, for the July 2025 Notes. Refer to Note 1 for a description of our accounting for fair value hedges.
v3.23.2
FUTURE PRINCIPAL PAYMENTS FOR ALL BORROWINGS (Details)
$ in Millions
May 31, 2023
USD ($)
Principal Payments for All Borrowings [Abstract]  
Fiscal 2024 $ 4,063
Fiscal 2025 10,000
Fiscal 2026 5,694
Fiscal 2027 5,250
Fiscal 2028 10,170
Thereafter 55,750
Total $ 90,927
v3.23.2
RESTRUCTURING ACTIVITIES Narrative (Details) - USD ($)
$ in Millions
 12 Months Ended
May 31, 2023
May 31, 2022
May 31, 2021
Restructuring Cost and Reserve [Line Items]      
Restructuring expenses $ 490 $ 191 $ 431
Fiscal2022 Oracle Restructuring [Member]      
Restructuring Cost and Reserve [Line Items]      
Restructuring expenses $ 493 $ 223  
Expected completion date May 31, 2023    
Restructuring and related costs recorded to date $ 716    
Fiscal2019 Oracle Restructuring [Member]      
Restructuring Cost and Reserve [Line Items]      
Restructuring expenses     430
Restructuring and related costs recorded to date     $ 1,200
v3.23.2
RESTRUCTURING ACTIVITIES (Details) - USD ($)
$ in Millions
 12 Months Ended
May 31, 2023
May 31, 2022
May 31, 2021
Restructuring Reserve Disclosures [Abstract]      
Accrued at period start [2] $ 131 [1] $ 225 $ 151
Initial Costs [2],[3] 497 222 457
Adjustments to Cost [2],[4] (7) (31) (26)
Cash Payments [2] (418) (201) (376)
Others [2],[5] (4) (84) 19
Accrued at period end [2] 199 [1] 131 [1] 225
Fiscal 2022 Oracle Restructuring [Member]      
Restructuring Reserve Disclosures [Abstract]      
Total Costs Accrued to Date 716    
Fiscal 2019 Oracle Restructuring [Member]      
Restructuring Reserve Disclosures [Abstract]      
Total Costs Accrued to Date     1,200
Fiscal 2023 Activity [Member] | Fiscal 2022 Oracle Restructuring [Member]      
Restructuring Reserve Disclosures [Abstract]      
Accrued at period start [1],[2] 60    
Initial Costs [2],[3] 496    
Adjustments to Cost [2],[4] (3)    
Cash Payments [2] (396)    
Others [2],[5] 0    
Accrued at period end [1],[2] 157 60  
Fiscal 2023 Activity [Member] | Fiscal 2022 Oracle Restructuring [Member] | Other [Member]      
Restructuring Reserve Disclosures [Abstract]      
Accrued at period start [1],[2] 10    
Initial Costs [2],[3] 162    
Adjustments to Cost [2],[4] 3    
Cash Payments [2] (141)    
Others [2],[5] 1    
Accrued at period end [1],[2] 35 10  
Fiscal 2023 Activity [Member] | Fiscal 2022 Oracle Restructuring [Member] | Cloud and License [Member] | Operating Segments [Member]      
Restructuring Reserve Disclosures [Abstract]      
Accrued at period start [1],[2] 34    
Initial Costs [2],[3] 288    
Adjustments to Cost [2],[4] (6)    
Cash Payments [2] (218)    
Others [2],[5] 1    
Accrued at period end [1],[2] 99 34  
Fiscal 2023 Activity [Member] | Fiscal 2022 Oracle Restructuring [Member] | Hardware [Member] | Operating Segments [Member]      
Restructuring Reserve Disclosures [Abstract]      
Accrued at period start [1],[2] 7    
Initial Costs [2],[3] 18    
Adjustments to Cost [2],[4] 0    
Cash Payments [2] (18)    
Others [2],[5] (1)    
Accrued at period end [1],[2] 6 7  
Fiscal 2023 Activity [Member] | Fiscal 2022 Oracle Restructuring [Member] | Services [Member] | Operating Segments [Member]      
Restructuring Reserve Disclosures [Abstract]      
Accrued at period start [1],[2] 9    
Initial Costs [2],[3] 28    
Adjustments to Cost [2],[4] 0    
Cash Payments [2] (19)    
Others [2],[5] (1)    
Accrued at period end [1],[2] 17 9  
Fiscal 2023 Activity [Member] | Other Restructuring Plans [Member]      
Restructuring Reserve Disclosures [Abstract]      
Accrued at period start [1],[2],[6] 71    
Initial Costs [2],[3],[6] 1    
Adjustments to Cost [2],[4],[6] (4)    
Cash Payments [2] (22)    
Others [2],[5],[6] (4)    
Accrued at period end [1],[2],[6] 42 71  
Fiscal 2022 Activity [Member] | Fiscal 2022 Oracle Restructuring [Member]      
Restructuring Reserve Disclosures [Abstract]      
Accrued at period start [2] 60 [1] 0  
Initial Costs [2],[3]   222  
Adjustments to Cost [2],[4]   1  
Cash Payments [2]   (92)  
Others [2],[5]   (71)  
Accrued at period end [2]   60 [1] 0
Fiscal 2022 Activity [Member] | Fiscal 2022 Oracle Restructuring [Member] | Other [Member]      
Restructuring Reserve Disclosures [Abstract]      
Accrued at period start [2] 10 [1] 0  
Initial Costs [2],[3]   105  
Adjustments to Cost [2],[4]   3  
Cash Payments [2]   (29)  
Others [2],[5]   (69)  
Accrued at period end [2]   10 [1] 0
Fiscal 2022 Activity [Member] | Fiscal 2022 Oracle Restructuring [Member] | Cloud and License [Member] | Operating Segments [Member]      
Restructuring Reserve Disclosures [Abstract]      
Accrued at period start [2] 34 [1] 0  
Initial Costs [2],[3]   90  
Adjustments to Cost [2],[4]   (2)  
Cash Payments [2]   (52)  
Others [2],[5]   (2)  
Accrued at period end [2]   34 [1] 0
Fiscal 2022 Activity [Member] | Fiscal 2022 Oracle Restructuring [Member] | Hardware [Member] | Operating Segments [Member]      
Restructuring Reserve Disclosures [Abstract]      
Accrued at period start [2] 7 [1] 0  
Initial Costs [2],[3]   11  
Adjustments to Cost [2],[4]   0  
Cash Payments [2]   (4)  
Others [2],[5]   0  
Accrued at period end [2]   7 [1] 0
Fiscal 2022 Activity [Member] | Fiscal 2022 Oracle Restructuring [Member] | Services [Member] | Operating Segments [Member]      
Restructuring Reserve Disclosures [Abstract]      
Accrued at period start [2] 9 [1] 0  
Initial Costs [2],[3]   16  
Adjustments to Cost [2],[4]   0  
Cash Payments [2]   (7)  
Others [2],[5]   0  
Accrued at period end [2]   9 [1] 0
Fiscal 2022 Activity [Member] | Other Restructuring Plans [Member]      
Restructuring Reserve Disclosures [Abstract]      
Accrued at period start [2],[6] $ 71 [1] 225  
Initial Costs [2],[3],[6]   0  
Adjustments to Cost [2],[4],[6]   (32)  
Cash Payments [2],[6]   (109)  
Others [2],[5],[6]   (13)  
Accrued at period end [2],[6]   71 [1] 225
Fiscal 2021 Activity [Member] | Other Restructuring Plans [Member]      
Restructuring Reserve Disclosures [Abstract]      
Accrued at period start [2],[6]   9 13
Initial Costs [2],[3],[6]     2
Adjustments to Cost [2],[4],[6]     (1)
Cash Payments [2],[6]     (5)
Others [2],[5],[6]     0
Accrued at period end [2],[6]     9
Fiscal 2021 Activity [Member] | Fiscal 2019 Oracle Restructuring [Member]      
Restructuring Reserve Disclosures [Abstract]      
Accrued at period start [2]   216 138
Initial Costs [2],[3]     455
Adjustments to Cost [2],[4]     (25)
Cash Payments [2]     (371)
Others [2],[5]     19
Accrued at period end [2]     216
Fiscal 2021 Activity [Member] | Fiscal 2019 Oracle Restructuring [Member] | Other [Member]      
Restructuring Reserve Disclosures [Abstract]      
Accrued at period start [2]   57 22
Initial Costs [2],[3]     137
Adjustments to Cost [2],[4]     3
Cash Payments [2]     (110)
Others [2],[5]     5
Accrued at period end [2]     57
Fiscal 2021 Activity [Member] | Fiscal 2019 Oracle Restructuring [Member] | Cloud and License [Member] | Operating Segments [Member]      
Restructuring Reserve Disclosures [Abstract]      
Accrued at period start [2]   119 75
Initial Costs [2],[3]     225
Adjustments to Cost [2],[4]     (22)
Cash Payments [2]     (171)
Others [2],[5]     12
Accrued at period end [2]     119
Fiscal 2021 Activity [Member] | Fiscal 2019 Oracle Restructuring [Member] | Hardware [Member] | Operating Segments [Member]      
Restructuring Reserve Disclosures [Abstract]      
Accrued at period start [2]   16 14
Initial Costs [2],[3]     39
Adjustments to Cost [2],[4]     (2)
Cash Payments [2]     (34)
Others [2],[5]     (1)
Accrued at period end [2]     16
Fiscal 2021 Activity [Member] | Fiscal 2019 Oracle Restructuring [Member] | Services [Member] | Operating Segments [Member]      
Restructuring Reserve Disclosures [Abstract]      
Accrued at period start [2]   $ 24 27
Initial Costs [2],[3]     54
Adjustments to Cost [2],[4]     (4)
Cash Payments [2]     (56)
Others [2],[5]     3
Accrued at period end [2]     $ 24
[1] As of May 31, 2023 and 2022, substantially all restructuring liabilities have been recorded in other current liabilities within our consolidated balance sheets.
[2] Restructuring costs recorded to each of the operating segments presented primarily related to employee severance costs. Other restructuring costs represented employee severance costs not related to our operating segments and certain other restructuring plan costs.
[3] Costs recorded for the respective restructuring plans during the 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 non-cash adjustments.
[6] Other restructuring plans presented in the tables above included condensed information for other Oracle based plans and other plans associated with certain of our acquisitions whereby we continued to make cash outlays to settle obligations under these plans during the periods presented but for which the periodic impact to our consolidated statements of operations was not significant.
v3.23.2
DEFERRED REVENUES (Details) - USD ($)
$ in Millions
May 31, 2023
May 31, 2022
Deferred Revenues [Line Items]    
Deferred revenues, current $ 8,970 $ 8,357
Deferred revenues, non-current (in other non-current liabilities) 968 753
Total deferred revenues 9,938 9,110
Cloud services and license support [Member] | Cloud and License [Member]    
Deferred Revenues [Line Items]    
Deferred revenues, current 7,983 7,406
Hardware [Member] | Hardware [Member]    
Deferred Revenues [Line Items]    
Deferred revenues, current 535 555
Services [Member] | Services [Member]    
Deferred Revenues [Line Items]    
Deferred revenues, current 400 360
Cloud license and on-premise license [Member] | Cloud and License [Member]    
Deferred Revenues [Line Items]    
Deferred revenues, current $ 52 $ 36
v3.23.2
LEASES, OTHER COMMITMENTS AND CERTAIN CONTINGENCIES Narrative (Details) - USD ($)
$ in Millions
 12 Months Ended
May 31, 2023
May 31, 2022
Leases Other Commitments And Certain Contingencies Disclosure [Line Items]    
Operating lease expenses $ 873 $ 766
Sublease income $ 11 12
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] Other non-current assets  
Right of use assets operating leases $ 4,600  
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] Other current liabilities  
Operating lease liabilities, current $ 865  
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] Other non-current liabilities  
Operating lease liabilities, non-current $ 4,000  
Right of use asset in exchange for operating lease obligation 2,000  
Cash paid for operating lease liabilities $ 894 $ 808
Operating leases weighted average remaining lease term 8 years  
Operating lease obligations, weighted average discount rate 4.00%  
Additional operating lease commitments $ 9,100  
Minimum [Member]    
Leases Other Commitments And Certain Contingencies Disclosure [Line Items]    
Operating leases remaining terms 1 year  
Operating leases not yet commenced, terms 3 years  
Maximum [Member]    
Leases Other Commitments And Certain Contingencies Disclosure [Line Items]    
Operating leases remaining terms 15 years  
Operating leases not yet commenced, terms 15 years  
v3.23.2
LEASES, OTHER COMMITMENTS AND CERTAIN CONTINGENCIES - Schedule of Maturities of Operating Lease Liabilities (Details)
$ in Millions
May 31, 2023
USD ($)
Leases Other Commitments And Certain Contingencies Disclosure [Abstract]  
Fiscal 2024 $ 906
Fiscal 2025 832
Fiscal 2026 783
Fiscal 2027 683
Fiscal 2028 593
Thereafter 1,889
Total operating lease payments 5,686
Less: imputed interest (837)
Total operating lease liability $ 4,849
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] Other current liabilities
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] Other non-current liabilities
v3.23.2
LEASES, OTHER COMMITMENTS AND CERTAIN CONTINGENCIES - Schedule of Unconditional Purchase and Certain Other Obligations (Details)
$ in Millions
May 31, 2023
USD ($)
Unconditional Obligations [Abstract]  
Fiscal 2024 $ 1,732
Fiscal 2025 294
Fiscal 2026 174
Fiscal 2027 134
Fiscal 2028 77
Thereafter 360
Total $ 2,771
v3.23.2
STOCKHOLDERS' EQUITY (DEFICIT) Narrative (Details) - USD ($)
$ / shares in Units, shares in Millions, $ in Millions
 12 Months Ended
Jun. 12, 2023
May 31, 2023
May 31, 2022
May 31, 2021
Stock Repurchases [Abstract]        
Amount available for future repurchases   $ 8,200    
Repurchases of common stock (in shares)   17.0 185.8 329.2
Repurchased amount   $ 1,286 $ 16,200 $ 21,000
Dividends on Common Stock [Abstract]        
Dividends per share, declared and paid (in dollars per share)   $ 1.36 $ 1.28 $ 1.04
Subsequent Event        
Dividends on Common Stock [Abstract]        
Dividends declared per share of outstanding common stock (in dollars per share) $ 0.40      
Dividend payable date Jul. 26, 2023      
Dividend record date Jul. 12, 2023      
v3.23.2
STOCKHOLDERS' EQUITY (DEFICIT) (Details) - USD ($)
$ in Millions
May 31, 2023
May 31, 2022
Accumulated Other Comprehensive Loss [Abstract]    
Foreign currency translation losses $ (1,686) $ (1,482)
Unrealized gains on marketable securities, net 1 0
Unrealized gains (losses) on defined benefit plans, net 61 (210)
Unrealized gains on cash flow hedges, net 102 0
Total accumulated other comprehensive loss $ (1,522) $ (1,692)
v3.23.2
EMPLOYEE BENEFIT PLANS Narrative (Details)
 1 Months Ended 12 Months Ended
Apr. 30, 2020
USD ($)
Mar. 31, 2020
USD ($)
May 31, 2023
Tranche
shares
May 31, 2013
shares
May 31, 2022
shares
May 31, 2021
shares
May 31, 2020
shares
Stock-based Payment Award [Line Items]              
Options outstanding     64,000,000   97,000,000 107,000,000 176,000,000
Options outstanding vested     34,000,000        
Restricted stock-based awards outstanding     152,000,000   128,000,000 110,000,000 101,000,000
Stock options outstanding     15,000,000        
Performance-based stock options [Member]              
Stock-based Payment Award [Line Items]              
Number of vesting tranches granted that potentially may vest | Tranche     7        
Number of tranches vests on attainment of market-based metric | Tranche     1        
Number of vesting tranches require attainment of both a performance and a market condition | Tranche     6        
Extended expiration period     3 years        
Performance-based stock options [Member] | Minimum [Member]              
Stock-based Payment Award [Line Items]              
Award service period for market-based metric     1 year        
Performance-based stock options [Member] | Maximum [Member]              
Stock-based Payment Award [Line Items]              
Award service period for market-based metric     2 years        
2020 Plan [Member]              
Stock-based Payment Award [Line Items]              
Number of shares authorized     390,000,000        
Increase in number of authorized shares of stock that may be issued     300,000,000        
Shares of common stock available for future awards     208,000,000        
2020 and 2000 Plan [Member]              
Stock-based Payment Award [Line Items]              
Vesting percentage     25.00%        
Vesting period     4 years        
Expiration period     10 years        
2020 and 2000 Plan [Member] | Service-based stock options [Member]              
Stock-based Payment Award [Line Items]              
Options outstanding     28,000,000        
2020 and 2000 Plan [Member] | Restricted Stock Units [Member]              
Stock-based Payment Award [Line Items]              
Equivalent number of shares deducted against share pool (in actual number of shares)     2.5        
2020 and 2000 Plan [Member] | Performance-based stock options [Member]              
Stock-based Payment Award [Line Items]              
Options outstanding vested     6,000,000        
Restricted stock-based awards outstanding     146,000,000        
Stock options outstanding     36,000,000        
Acquired plans [Member]              
Stock-based Payment Award [Line Items]              
Options outstanding     459,000        
Restricted stock-based awards outstanding     3,000,000        
Directors' Plan [Member]              
Stock-based Payment Award [Line Items]              
Increase in number of authorized shares of stock that may be issued       2,000,000      
Vesting period     4 years        
Expiration period     10 years        
Options outstanding     339,000        
Shares of common stock available for future awards     1,000,000        
Directors' Plan [Member] | Restricted Stock Units [Member]              
Stock-based Payment Award [Line Items]              
Restricted stock-based awards outstanding     40,000        
Maximum value of annual grants | $ $ 350,000 $ 400,000          
Plan 2000 [Member]              
Stock-based Payment Award [Line Items]              
Shares of common stock available for future awards     132,921,827        
v3.23.2
EMPLOYEE BENEFIT PLANS (Details) - USD ($)
$ / shares in Units, shares in Millions, $ in Millions
 12 Months Ended
May 31, 2023
May 31, 2022
May 31, 2021
Shares Under Restricted Stock-based Awards [Abstract]      
Beginning balance 128 110 101
Granted 76 65 54
Assumed 5    
Vested and issued (46) (38) (34)
Canceled (11) (9) (11)
Ending balance 152 128 110
Weighted Average Grant Date Fair Value [Abstract]      
Total grant date fair value of restricted stock-based awards, vested and issued $ 2,900 $ 1,900 $ 1,600
Beginning balance $ 68.34 $ 51.87 $ 48.36
Granted 66.67 85.07 54.95
Assumed 69.02    
Vested and issued 62.97 50.52 46.88
Canceled 69.25 63.25 50.40
Ending balance $ 69.09 $ 68.34 $ 51.87
Unrecognized compensation expense related to non-vested restricted stock-based awards $ 7,200    
Shares Under Stock Option [Abstract]      
Beginning balance 97 107 176
Granted and assumed 0 0 0
Exercised (33) (10) (52)
Canceled 0 0 (17)
Ending balance 64 97 107
Vested 34    
Expected to vest [1] 15    
Total 49    
Weighted Average Exercise Price [Abstract]      
Beginning balance $ 40.70 $ 40.14 $ 38.86
Granted and assumed 0 0 0
Exercised 31.37 34.34 32.05
Canceled 0 0 51.02
Ending balance 45.42 $ 40.70 $ 40.14
Vested 40.41    
Expected to vest [1] 51.10    
Total $ 43.69    
Weighted Average Remaining Contract Term (in years) [Abstract]      
Vested 1 year 10 months 13 days    
Expected to vest [1] 2 years 3 months 14 days    
Total 2 years    
Aggregate Intrinsic Value (in millions) [Abstract]      
Vested [2] $ 2,254    
Expected to vest [1],[2] 837    
Total [2] $ 3,091    
Closing stock price $ 105.94    
Unrecognized compensation expense for shares expected to vest $ 134    
Shares not expected to vest 15    
Stock-based compensation expense and valuations of stock awards [Abstract]      
Total stock-based compensation $ 3,547 $ 2,613 $ 1,837
Estimated income tax benefit included in provision for income taxes (802) (593) (413)
Total stock-based compensation, net of estimated income tax benefit 2,745 2,020 1,424
Other Postretirement Plans [Member]      
Stock-based compensation expense and valuations of stock awards [Abstract]      
Total defined benefit plan pension expense 78 67 $ 105
Aggregate projected benefit obligation 939 1,100  
Aggregate net liability (funded status) $ (322) $ (580)  
Employee Stock Purchase Plan [Member]      
Stock-based compensation expense and valuations of stock awards [Abstract]      
Stock purchase price as a percentage of the fair market value on the purchase date 95.00%    
Shares reserved for future issuances under the purchase plan 37    
Common stock issued under stock purchase plans 2 2 2
Cloud services and license support [Member]      
Stock-based compensation expense and valuations of stock awards [Abstract]      
Total stock-based compensation $ 435 $ 205 $ 134
Hardware [Member]      
Stock-based compensation expense and valuations of stock awards [Abstract]      
Total stock-based compensation 18 15 11
Services [Member]      
Stock-based compensation expense and valuations of stock awards [Abstract]      
Total stock-based compensation 137 67 55
Sales and marketing [Member]      
Stock-based compensation expense and valuations of stock awards [Abstract]      
Total stock-based compensation 611 448 313
Research and development [Member]      
Stock-based compensation expense and valuations of stock awards [Abstract]      
Total stock-based compensation 1,983 1,633 1,188
General and administrative [Member]      
Stock-based compensation expense and valuations of stock awards [Abstract]      
Total stock-based compensation $ 363 $ 245 $ 136
Restricted Stock Units [Member]      
Weighted Average Grant Date Fair Value [Abstract]      
Weighted average recognition period of unrecognized compensation expense for shares expected to vest 2 years 9 months 3 days    
Employee Stock Options [Member]      
Weighted Average Grant Date Fair Value [Abstract]      
Weighted average recognition period of unrecognized compensation expense for shares expected to vest 1 year 6 months 25 days    
[1] The unrecognized compensation expense calculated under the fair value method for shares expected to vest (unvested shares net of expected forfeitures) as of May 31, 2023 was approximately $134 million and is expected to be recognized over a weighted-average period of 1.57 years. Approximately 15 million shares outstanding as of May 31, 2023 were not expected to vest.
[2] The aggregate intrinsic value was calculated based on the gross difference between our closing stock price on the last trading day of fiscal 2023 of $105.94 and the exercise prices for all “in-the-money” options outstanding, excluding tax effects.
v3.23.2
TAX BENEFITS FROM EXERCISES OF STOCK OPTIONS AND VESTING OF RESTRICTED STOCK-BASED AWARDS Narrative (Details) - USD ($)
$ in Millions
 12 Months Ended
May 31, 2023
May 31, 2022
May 31, 2021
Tax Benefits from Exercise of Stock Options and Vesting of Restricted Stock-Based Awards [Abstract]      
Total cash received as a result of stock option exercises $ 1,000 $ 319 $ 1,700
Aggregate intrinsic value of vesting of restricted stock-based awards and options exercised 5,100 3,700 3,700
Tax benefits realized in connection with the vesting of restricted stock-based awards and exercises of stock options $ 1,200 $ 843 $ 842
v3.23.2
DEFERRED CONTRIBUTION PLANS Narrative (Details) - USD ($)
$ in Millions
 12 Months Ended
May 31, 2023
May 31, 2022
May 31, 2021
Defined Contribution Plan Disclosure [Line Items]      
Defined contribution plan expense $ 470 $ 412 $ 380
US [Member]      
Defined Contribution Plan Disclosure [Line Items]      
Oracle 401(K) Plan employee contribution maximum rate 40.00%    
Oracle 401 (K) employer contribution match rate 50.00%    
Oracle 401(K) employer maximum match on employee contribution each pay period 6.00%    
Oracle 401 (K) plan employer contribution $ 198 $ 164 $ 150
v3.23.2
DEFERRED COMPENSATION PLANS Narrative (Details) - Other Postretirement Plans [Member] - USD ($)
$ in Millions
May 31, 2023
May 31, 2022
Deferred Compensation Plan Disclosure [Line Items]    
Deferred compensation plan assets $ 792 $ 756
Deferred compensation plan liabilities $ 792 $ 756
v3.23.2
INCOME TAXES Narrative (Details) - USD ($)
$ in Millions
 12 Months Ended
May 31, 2023
May 31, 2022
May 31, 2021
Income Tax Examination [Line Items]      
Total net tax benefit     $ 2,300
Undistributed earnings and other outside basis temporary differences of investments in foreign subsidiaries $ 11,000    
Potential net deferred tax liability related to other outside basis temporary differences 2,000    
Deferred Tax Assets, Net [Abstract]      
Net deferred tax assets 6,454 $ 6,751  
Valuation allowance 1,940 1,742  
Operating Loss Carryforwards [Abstract]      
Capital loss carryforwards 141    
Tax Credit Carryforwards [Abstract]      
Tax credit carryforwards subject to limitation on utilization 1,400    
Tax credit carryforwards not subject to expiration dates 933    
Tax credit carryforwards subject to expiration dates 438    
Unrecognized Tax Benefits (Narrative) [Abstract]      
Unrecognized tax benefits that would affect our effective tax rate if recognized 3,900 4,300 4,400
Interest and penalties related to uncertain tax positions recognized in our provision for income taxes 111 93 $ 166
Interest and penalties related to uncertain tax positions accrued $ 1,700 $ 1,600  
Earliest Tax Year [Member]      
Tax Credit Carryforwards [Abstract]      
Tax credit carryforward expiration dates May 31, 2024    
Latest Tax Year [Member]      
Tax Credit Carryforwards [Abstract]      
Tax credit carryforward expiration dates May 31, 2043    
Federal [Member]      
Operating Loss Carryforwards [Abstract]      
Net operating loss carryforwards $ 380    
Federal net operating loss carryforwards not subject to expiration 76    
Federal [Member] | Expire in various years between fiscal 2024 and fiscal 2038 [Member]      
Operating Loss Carryforwards [Abstract]      
Net operating loss carryforwards $ 304    
Federal [Member] | Earliest Tax Year [Member]      
Operating Loss Carryforwards [Abstract]      
Operating loss carryforwards expiration date May 31, 2024    
Federal [Member] | Latest Tax Year [Member]      
Operating Loss Carryforwards [Abstract]      
Operating loss carryforwards expiration date May 31, 2038    
State [Member]      
Operating Loss Carryforwards [Abstract]      
Net operating loss carryforwards $ 2,200    
Capital loss carryforwards $ 314    
State [Member] | Earliest Tax Year [Member]      
Operating Loss Carryforwards [Abstract]      
Capital loss carryforwards expiration date May 31, 2026    
Operating loss carryforwards expiration date May 31, 2024    
State [Member] | Latest Tax Year [Member]      
Operating Loss Carryforwards [Abstract]      
Capital loss carryforwards expiration date May 31, 2036    
Operating loss carryforwards expiration date May 31, 2043    
Foreign [Member]      
Operating Loss Carryforwards [Abstract]      
Net operating loss carryforwards $ 1,900    
Foreign net operating loss carryforwards not subject to expiration 1,800    
Foreign net operating loss carryforwards subject to expiration 61    
Unrecognized Tax Benefits (Narrative) [Abstract]      
Reasonably possible decrease in the next 12 months in gross unrecognized, net of offsetting tax benefits 262    
Reasonably possible increase in the next 12 months in gross unrecognized, net of offsetting tax benefits 111    
Reasonably possible decrease in the next 12 months in gross unrecognized tax benefits 767    
Reasonably possible increase in the next 12 months in gross unrecognized tax benefits $ 637    
Foreign [Member] | Earliest Tax Year [Member]      
Operating Loss Carryforwards [Abstract]      
Operating loss carryforwards expiration date May 31, 2024    
Foreign [Member] | Latest Tax Year [Member]      
Operating Loss Carryforwards [Abstract]      
Operating loss carryforwards expiration date May 31, 2039    
Domestic [Member]      
Operating Loss Carryforwards [Abstract]      
Capital loss carryforwards expiration date May 31, 2026    
Unrecognized Tax Benefits (Narrative) [Abstract]      
Reasonably possible decrease in the next 12 months in gross unrecognized, net of offsetting tax benefits $ 442    
Reasonably possible decrease in the next 12 months in gross unrecognized tax benefits $ 538    
v3.23.2
INCOME TAXES - Geographical Breakdown of Income Before Income Taxes (Details) - USD ($)
$ in Millions
 12 Months Ended
May 31, 2023
May 31, 2022
May 31, 2021
Income Tax Disclosure [Abstract]      
Domestic $ 1,492 $ (629) $ 4,375
Foreign 7,634 8,278 8,624
Income before income taxes $ 9,126 $ 7,649 $ 12,999
v3.23.2
INCOME TAXES - Components of (Provision for) Benefit from Income Taxes (Details) - USD ($)
$ in Millions
 12 Months Ended
May 31, 2023
May 31, 2022
May 31, 2021
Provision for Income Taxes [Abstract]      
Federal $ (625) $ (709) $ (516)
State (398) (186) (233)
Foreign (1,767) (1,183) (929)
Total current provision (2,790) (2,078) (1,678)
Federal 2,193 1,661 (8,631)
State 398 139 77
Foreign (424) (654) 10,979
Total deferred benefit 2,167 1,146 2,425
Total (provision for) benefit from income taxes $ (623) $ (932) $ 747
Effective income tax expense (benefit) rate 6.80% 12.20% (5.70%)
v3.23.2
INCOME TAXES - Reconciliation of Differences Between Federal Statutory Tax Rate and Effective Tax Rate (Details) - USD ($)
$ in Millions
 12 Months Ended
May 31, 2023
May 31, 2022
May 31, 2021
Reconciliation of Differences Between Amount Computed by Applying Federal Statutory Rate to our Income Before Provision for Income Taxes and Provision for Income Taxes [Abstract]      
U.S. federal statutory tax rate 21.00% 21.00% 21.00%
Tax provision at statutory rate $ (1,917) $ (1,606) $ (2,730)
Foreign earnings at other than United States rates 357 536 580
Net impact of intra-entity IP transfer 0 0 2,266
State tax expense, net of federal benefit (41) (132) (206)
Settlements and releases from judicial decisions and statute expirations, net 552 263 582
Tax contingency interest accrual, net (101) (44) (55)
Domestic tax contingency, net (28) (441) (282)
Federal research and development credit 280 222 169
Stock-based compensation 322 263 300
Other, net (47) 7 123
Total (provision for) benefit from income taxes $ (623) $ (932) $ 747
v3.23.2
INCOME TAXES - Components of Deferred Tax Liabilities and Assets (Details) - USD ($)
$ in Millions
May 31, 2023
May 31, 2022
Components of Deferred Tax Assets [Abstract]    
Accruals and allowances $ 928 $ 493
Employee compensation and benefits 811 818
Differences in timing of revenue recognition 662 623
Lease liabilities 1,036 688
Basis of property, plant and equipment and intangible assets 9,989 11,362
Capitalized research and development 1,421 0
Tax credit and net operating loss carryforwards 4,941 4,409
Other 189 141
Total deferred tax assets 19,977 18,534
Valuation allowance (1,940) (1,742)
Total deferred tax assets, net 18,037 16,792
Components of Deferred Tax Liabilities [Abstract]    
Unrealized gain on stock (79) (78)
Acquired intangible assets (2,124) (126)
GILTI deferred (8,124) (8,937)
ROU assets (1,000) (668)
Withholding taxes on foreign earnings (256) (232)
Total deferred tax liabilities (11,583) (10,041)
Net deferred tax assets $ 6,454 $ 6,751
v3.23.2
INCOME TAXES - Components of Deferred Tax Liabilities and Assets Continued (Details) - USD ($)
$ in Millions
May 31, 2023
May 31, 2022
Components of Deferred Tax Assets and Liabilities [Abstract]    
Non-current deferred tax assets $ 12,226 $ 12,782
Non-current deferred tax liabilities (5,772) (6,031)
Net deferred tax assets $ 6,454 $ 6,751
v3.23.2
INCOME TAXES - Gross Unrecognized Tax Benefits, Including Acquisitions (Details) - USD ($)
$ in Millions
 12 Months Ended
May 31, 2023
May 31, 2022
May 31, 2021
Gross Unrecognized Tax Benefits Including Acquisitions [Abstract]      
Gross unrecognized tax benefits as of June 1 $ 7,284 $ 6,912 $ 6,972
Increases related to tax positions from prior fiscal years 709 66 225
Decreases related to tax positions from prior fiscal years (45) (24) (836)
Increases related to tax positions taken during current fiscal year 669 919 531
Settlements with tax authorities (212) (117) (51)
Lapses of statutes of limitation (631) (333) (66)
Cumulative translation adjustments and other, net     137
Cumulative translation adjustments and other, net (59) (139)  
Total gross unrecognized tax benefits as of May 31 $ 7,715 $ 7,284 $ 6,912
v3.23.2
SEGMENT INFORMATION Narrative (Details)
 12 Months Ended
May 31, 2023
Segment
Business
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
v3.23.2
SEGMENT INFORMATION (Details) - USD ($)
$ in Millions
 12 Months Ended
May 31, 2023
May 31, 2022
May 31, 2021
Segment Reporting Information [Line Items]      
Revenues $ 49,954 $ 42,440 $ 40,479
Cloud services and license support expenses [1] 7,763 5,213 4,353
Sales and marketing expenses [1] 8,833 8,047 7,682
Margin 13,093 10,926 15,213
Operating Segments [Member]      
Segment Reporting Information [Line Items]      
Revenues [2] 49,954 42,440 40,481
Expenses 20,792 15,813 14,658
Margin [3] 29,162 26,627 25,823
Operating Segments [Member] | Cloud and License [Member]      
Segment Reporting Information [Line Items]      
Revenues [2] 41,086 36,052 34,101
Cloud services and license support expenses 7,222 4,915 4,133
Sales and marketing expenses 7,738 7,054 6,799
Margin [3] 26,126 24,083 23,169
Operating Segments [Member] | Hardware [Member]      
Segment Reporting Information [Line Items]      
Revenues 3,274 3,183 3,359
Hardware products and support expenses 1,011 944 945
Sales and marketing expenses 331 361 388
Margin [3] 1,932 1,878 2,026
Operating Segments [Member] | Services [Member]      
Segment Reporting Information [Line Items]      
Revenues 5,594 3,205 3,021
Services expenses 4,490 2,539 2,393
Margin [3] $ 1,104 $ 666 $ 628
[1] Exclusive of amortization of intangible assets, which is shown separately.
[2] Cloud and license revenues and total revenues presented for management reporting for fiscal 2021 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 due to business combination accounting rules that were applicable to acquisitions closed prior to fiscal 2022. The table below provides a reconciliation of our total operating segment revenues to our total revenues as reported in our consolidated statements of operations for all periods presented.
[3] The margins reported reflect only the direct controllable costs of each line of business and do not include allocations of research and 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 expenses or income, net. Refer to the table below for a reconciliation of our total margin for operating segments to our income before income taxes as reported per our consolidated statements of operations.
v3.23.2
SEGMENT INFORMATION RECONCILIATION (Details) - USD ($)
$ in Millions
 12 Months Ended
May 31, 2023
May 31, 2022
May 31, 2021
Reconciliation of Operating Segment Revenues to Revenues [Abstract]      
Total revenues $ 49,954 $ 42,440 $ 40,479
Reconciliation of Total Operating Segment Margin to Income Before Provision for Income Taxes [Abstract]      
Total margin for operating segments 13,093 10,926 15,213
Total revenues 49,954 42,440 40,479
Research and development (8,623) (7,219) (6,527)
General and administrative (1,579) (1,317) (1,254)
Amortization of intangible assets (3,582) (1,150) (1,379)
Acquisition related and other (190) (4,713) (138)
Restructuring (490) (191) (431)
Stock-based compensation for operating segments (1,201) (735) (513)
Expense allocations and other, net (404) (376) (366)
Interest expense (3,505) (2,755) (2,496)
Non-operating (expenses) income, net (462) (522) 282
Income before income taxes 9,126 7,649 12,999
Operating Segments [Member]      
Reconciliation of Operating Segment Revenues to Revenues [Abstract]      
Total revenues [1] 49,954 42,440 40,481
Reconciliation of Total Operating Segment Margin to Income Before Provision for Income Taxes [Abstract]      
Total margin for operating segments [2] 29,162 26,627 25,823
Total revenues [1] 49,954 42,440 40,481
Cloud and license revenues [Member]      
Reconciliation of Operating Segment Revenues to Revenues [Abstract]      
Total revenues [3] 0 0 (2)
Reconciliation of Total Operating Segment Margin to Income Before Provision for Income Taxes [Abstract]      
Total revenues [3] $ 0 $ 0 $ (2)
[1] Cloud and license revenues and total revenues presented for management reporting for fiscal 2021 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 due to business combination accounting rules that were applicable to acquisitions closed prior to fiscal 2022. The table below provides a reconciliation of our total operating segment revenues to our total revenues as reported in our consolidated statements of operations for all periods presented.
[2] The margins reported reflect only the direct controllable costs of each line of business and do not include allocations of research and 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 expenses or income, net. Refer to the table below for a reconciliation of our total margin for operating segments to our income before income taxes as reported per our consolidated statements of operations.
[3] Cloud and license revenues presented for management reporting for fiscal 2021 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 due to business combination accounting rules that were applicable to acquisitions closed prior to fiscal 2022. This table includes a reconciliation of our total operating segment revenues to our total revenues as reported in our consolidated statements of operations for all periods presented.
v3.23.2
SUMMARY OF TOTAL REVENUES BY GEOGRAPHIC REGION (Details) - USD ($)
$ in Millions
 12 Months Ended
May 31, 2023
May 31, 2022
May 31, 2021
Disaggregation of Revenue [Line Items]      
Total revenues $ 49,954 $ 42,440 $ 40,479
Americas [Member]      
Disaggregation of Revenue [Line Items]      
Total revenues 31,226 23,679 21,828
EMEA [Member]      
Disaggregation of Revenue [Line Items]      
Total revenues [1] 12,109 12,011 11,894
Asia Pacific [Member]      
Disaggregation of Revenue [Line Items]      
Total revenues $ 6,619 $ 6,750 $ 6,757
[1] Comprised of Europe, the Middle East and Africa
v3.23.2
SUMMARY OF CLOUD SERVICES AND LICENSE SUPPORT REVENUES BY ECOSYSTEMS (Details) - USD ($)
$ in Millions
 12 Months Ended
May 31, 2023
May 31, 2022
May 31, 2021
Disaggregation of Revenue [Line Items]      
Total revenues $ 49,954 $ 42,440 $ 40,479
Cloud Services [Member]      
Disaggregation of Revenue [Line Items]      
Total revenues 15,881 10,809 8,921
License Support [Member]      
Disaggregation of Revenue [Line Items]      
Total revenues 19,426 19,365 19,779
Cloud services and license support [Member]      
Disaggregation of Revenue [Line Items]      
Total revenues 35,307 30,174 28,700
Applications Cloud Services and License Support [Member]      
Disaggregation of Revenue [Line Items]      
Total revenues 16,651 12,612 11,712
Infrastructure Cloud Services and License Support [Member]      
Disaggregation of Revenue [Line Items]      
Total revenues $ 18,656 $ 17,562 $ 16,988
v3.23.2
SEGMENT INFORMATION Continued (Details) - USD ($)
$ in Millions
 12 Months Ended
May 31, 2023
May 31, 2022
May 31, 2021
Revenues from external customers and long lived assets [Line Items]      
Revenues $ 49,954 $ 42,440 $ 40,479
Long-Lived Assets [1] 25,563 16,144 11,385
United States [Member]      
Revenues from external customers and long lived assets [Line Items]      
Revenues 27,535 20,246 18,734
Long-Lived Assets [1] 19,322 10,300 6,826
United Kingdom [Member]      
Revenues from external customers and long lived assets [Line Items]      
Revenues 2,159 2,335 2,110
Long-Lived Assets [1] 905 805 685
Germany [Member]      
Revenues from external customers and long lived assets [Line Items]      
Revenues 1,755 1,799 1,744
Long-Lived Assets [1] 940 813 561
Japan [Member]      
Revenues from external customers and long lived assets [Line Items]      
Revenues 1,681 1,847 1,988
Long-Lived Assets [1] 770 788 650
Other countries [Member]      
Revenues from external customers and long lived assets [Line Items]      
Revenues 16,824 16,213 15,903
Long-Lived Assets [1] $ 3,626 $ 3,438 $ 2,663
[1] Long-lived assets exclude goodwill, intangible assets, equity investments and deferred taxes, which are not allocated to specific geographic locations as it is impracticable to do so.
v3.23.2
EARNINGS PER SHARE (Details) - USD ($)
$ / shares in Units, shares in Millions, $ in Millions
 12 Months Ended
May 31, 2023
May 31, 2022
May 31, 2021
Earnings Per Share [Abstract]      
Net income $ 8,503 $ 6,717 $ 13,746
Weighted average common shares outstanding 2,696 2,700 2,945
Dilutive effect of employee stock plans 70 86 77
Dilutive weighted average common shares outstanding 2,766 2,786 3,022
Basic earnings per share $ 3.15 $ 2.49 $ 4.67
Diluted earnings per share $ 3.07 $ 2.41 $ 4.55
Shares subject to anti-dilutive restricted stock-based awards and stock options excluded from calculation [1] 50 34 36
[1] These weighted shares relate to anti-dilutive restricted service based stock-based awards as calculated using the treasury stock method and contingently issuable shares pursuant to PSOs arrangements. Such shares could be dilutive in the future. See Note 12 for information regarding the exercise prices of our outstanding, unexercised stock options.
v3.23.2
LEGAL PROCEEDINGS (Details)
Aug. 10, 2018
USD ($)
Derivative Litigation Concerning Oracle Cloud Business [Member]  
Loss Contingencies [Line Items]  
Payment of legal settlements $ 17,500,000