| Summary of Businesses and Operating Segments Results |
| | Year Ended May 31, | (in millions) | | 2015 | | 2014 | | 2013 | New software licenses and cloud software subscriptions: | | | | | | | | | | Revenues(1) | | $ | 10,025 | | $ | 10,542 | | $ | 10,350 | Cloud software as a service and platform as a service expenses | | | 742 | | | 437 | | | 313 | Sales and distribution expenses | | | 5,812 | | | 5,666 | | | 5,227 | Margin(2) | | $ | 3,471 | | $ | 4,439 | | $ | 4,810 | Cloud infrastructure as a service: | | | | | | | | | | Revenues | | $ | 608 | | $ | 456 | | $ | 457 | Cloud infrastructure as a service expenses | | | 329 | | | 304 | | | 296 | Sales and distribution expenses | | | 89 | | | 61 | | | 61 | Margin(2) | | $ | 190 | | $ | 91 | | $ | 100 | Software license updates and product support: | | | | | | | | | | Revenues(1) | | $ | 18,858 | | $ | 18,209 | | $ | 17,156 | Software license updates and product support expenses | | | 1,130 | | | 1,111 | | | 1,120 | Margin(2) | | $ | 17,728 | | $ | 17,098 | | $ | 16,036 | Total software and cloud business: | | | | | | | | | | Revenues(1) | | $ | 29,491 | | $ | 29,207 | | $ | 27,963 | Expenses | | | 8,102 | | | 7,579 | | | 7,017 | Margin(2) | | $ | 21,389 | | $ | 21,628 | | $ | 20,946 | Hardware systems products: | | | | | | | | | | Revenues | | $ | 2,825 | | $ | 2,976 | | $ | 3,033 | Hardware systems products expenses | | | 1,465 | | | 1,516 | | | 1,498 | Sales and distribution expenses | | | 864 | | | 940 | | | 885 | Margin(2) | | $ | 496 | | $ | 520 | | $ | 650 | Hardware systems support: | | | | | | | | | | Revenues(1) | | $ | 2,384 | | $ | 2,407 | | $ | 2,327 | Hardware systems support expenses | | | 783 | | | 802 | | | 857 | Margin(2) | | $ | 1,601 | | $ | 1,605 | | $ | 1,470 | Total hardware systems business: | | | | | | | | | | Revenues(1) | | $ | 5,209 | | $ | 5,383 | | $ | 5,360 | Expenses | | | 3,112 | | | 3,258 | | | 3,240 | Margin(2) | | $ | 2,097 | | $ | 2,125 | | $ | 2,120 | Total services business: | | | | | | | | | | Revenues(1) | | $ | 3,553 | | $ | 3,716 | | $ | 3,930 | Services expenses | | | 2,818 | | | 2,822 | | | 3,051 | Margin(2) | | $ | 735 | | $ | 894 | | $ | 879 | Totals: | | | | | | | | | | Revenues(1) | $ | 38,253 | | $ | 38,306 | | $ | 37,253 | Expenses | | | 14,032 | | | 13,659 | | | 13,308 | Margin(2) | $ | 24,221 | | $ | 24,647 | | $ | 23,945 | | | | | | | | | | | | | | | | | | | | |
__________ (1) | New software licenses and cloud software subscriptions revenues for management reporting included revenues related to cloud SaaS and PaaS contracts that would have otherwise been recorded by the acquired businesses as independent entities but were not recognized in the accompanying consolidated statements of operations in the amounts of $12 million, $17 million and $45 million for fiscal 2015, 2014 and 2013, respectively. Software license updates and product support revenues for management reporting included revenues related to software support contracts that would have otherwise been recorded by the acquired businesses as independent entities but were not recognized in the accompanying consolidated statements of operations in the amounts of $11 million, $3 million and $14 million for fiscal 2015, 2014 and 2013, respectively. In addition, we did not recognize hardware systems support revenues related to hardware systems support contracts that would have otherwise been recorded by the acquired businesses as independent entities in the amounts of $4 million, $11 million and $14 million for fiscal 2015, 2014 and 2013, respectively. See Note 10 for an explanation of these adjustments and the table below for a reconciliation of our total operating segment revenues to our total revenues. Our new software license and services revenues for management reporting also differ from amounts reported per our consolidated statements of operations for the periods presented due to certain insignificant reclassifications between these lines for management reporting purposes. | (2) | The margins reported reflect only the direct controllable costs of each line of business and do not include allocations of product development, marketing and partner programs, and corporate, general and administrative and information technology expenses. Additionally, the margins reported do not reflect amortization of intangible assets, acquisition related and other expenses, restructuring expenses, stock-based compensation, interest expense or certain other income (expense), net. | | |
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| Reconciliation of Total Operating Segment Margin to Income before Provision for Income Taxes |
Total margin for operating segments | | $ | 24,221 | | $ | 24,647 | | $ | 23,945 | Cloud software as a service and platform as a service revenues (1) | | | (12) | | | (17) | | | (45) | Software license updates and product support revenues(1) | | | (11) | | | (3) | | | (14) | Hardware systems support revenues(1) | | | (4) | | | (11) | | | (14) | Product development | | | (4,812) | | | (4,590) | | | (4,321) | Marketing and partner program expenses | | | (520) | | | (564) | | | (591) | Corporate, general and administrative and information technology expenses | | | (1,496) | | | (1,384) | | | (1,421) | Amortization of intangible assets | | | (2,149) | | | (2,300) | | | (2,385) | Acquisition related and other | | | (211) | | | (41) | | | 604 | Restructuring | | | (207) | | | (183) | | | (352) | Stock-based compensation | | | (928) | | | (795) | | | (722) | Interest expense | | | (1,143) | | | (914) | | | (797) | Non-operating income (expense), net | | | 106 | | | (141) | | | 11 | Income before provision for income taxes | | $ | 12,834 | | $ | 13,704 | | $ | 13,898 | | | | | | | | | | |
__________ (1) | New software licenses and cloud software subscriptions revenues, software license updates and product support revenues and hardware systems support revenues for management reporting included revenues that would have otherwise been recorded by our acquired businesses as independent entities but were not recognized in the accompanying consolidated statements of operations for the periods presented due to business combination accounting requirements. Refer to footnote one to our business and operating segments summary results table above in this Note 16 for additional information. | | |
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| Geographic Information |
| | As of and for the Year Ended May 31, | | | 2015 | | 2014 | | 2013 | (in millions) | | Revenues | | Long Lived Assets(1) | | Revenues | | Long Lived Assets(1) | | Revenues | | Long Lived Assets(1) | United States | | $ | 17,325 | | $ | 3,341 | | $ | 16,809 | | $ | 2,993 | | $ | 16,003 | | $ | 2,921 | United Kingdom | | | 2,388 | | | 309 | | | 2,309 | | | 236 | | | 2,165 | | | 203 | Germany | | | 1,466 | | | 33 | | | 1,483 | | | 35 | | | 1,308 | | | 44 | Japan | | | 1,433 | | | 338 | | | 1,558 | | | 414 | | | 1,770 | | | 428 | Canada | | | 1,286 | | | 58 | | | 1,190 | | | 31 | | | 1,232 | | | 34 | France | | | 1,044 | | | 33 | | | 1,148 | | | 28 | | | 1,054 | | | 17 | Other countries | | | 13,284 | | | 1,007 | | | 13,778 | | | 879 | | | 13,648 | | | 868 | Total | | $ | 38,226 | | $ | 5,119 | | $ | 38,275 | | $ | 4,616 | | $ | 37,180 | | $ | 4,515 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
__________ (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. | | |
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