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SEGMENT INFORMATION | 12 Months Ended
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May 31, 2016
Segment Information [Abstract] |
SEGMENT INFORMATION | 16. 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 are our Chief Executive Officers. We are organized geographically and by line of business. While our Chief Executive Officers 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. We have three businesses—cloud and on-premise software, hardware and services—which are further divided into certain operating segments. Our cloud and on-premise software business is comprised of three operating segments: (1) cloud software and on-premise software, which includes our cloud SaaS and PaaS offerings, (2) cloud IaaS and (3) software license updates and product support. Our hardware business is comprised of two operating segments: (1) hardware products and (2) hardware support. All other operating segments are combined under our services business. Our cloud software and on-premise software line of business markets, sells and delivers a broad spectrum of application and platform technologies through our SaaS and PaaS offerings, which are certain of our software applications and platforms that are delivered via a cloud-based IT environment that we host, manage and support, and through the licensing of our software products including Oracle Applications, Oracle Database, Oracle Fusion Middleware and Java, among others. The cloud IaaS line of business provides infrastructure cloud services that are enterprise-grade, hosted and supported within the Oracle Cloud to perform elastic compute, storage and networking services on a subscription basis; and Oracle Managed Cloud Services, which are comprehensive software and hardware management and maintenance services for customer IT infrastructure for a fee for a stated term that are hosted at our Oracle data center facilities, select partner data centers or physically on-premise at customer facilities. The software license updates and product support line of business generates revenues through the sale of software support contracts related to new software licenses purchased by our customers. The software license updates and product support line of business provides our on-premise software customers with rights to software product upgrades and maintenance releases, patches released, internet access to technical content, as well as internet and telephone access to technical support personnel during the support period. The hardware products line of business provides Oracle Engineered Systems, servers, storage, networking, industry-specific hardware, virtualization software, operating systems including the Oracle Solaris Operating System and management software to support diverse IT environments, including cloud computing environments. Our hardware support line of business provides customers with software updates for the software components that are essential to the functionality of our hardware products, such as Oracle Solaris and certain other software products, and can include product repairs, maintenance services and technical support services. Our services business is comprised of the remainder of our operating segments and offers consulting, advanced customer support services and education services. Our consulting line of business primarily provides services to customers in business and IT strategy alignment, enterprise architecture planning and design, initial product implementation and integration and ongoing product enhancements and upgrades. Advanced customer support provides support services, both on-premise and remote, to our customers to enable increased performance and higher availability of their products and services and also includes certain other services. Education services provide training to customers, partners and employees as a part of our mission of accelerating the adoption and use of our cloud, on-premise software and hardware offerings. We do not track our assets by operating segments. Consequently, it is not practical to show assets by operating segment. The following table presents summary results for each of our three businesses and for the operating segments of our cloud and on-premise software and hardware businesses:
|  | Year Ended May 31,
(in millions) |  | 2016 |  | 2015 |  | 2014
Cloud software and on-premise software: |  |  |  |  |  |  |  |  |
Revenues(1) |  | $ | 9,488 |  | $ | 10,025 |  | $ | 10,542
Cloud software as a service and platform as a service expenses |  |  | 1,116 |  |  | 742 |  |  | 437
Sales and distribution expenses |  |  | 6,010 |  |  | 5,812 |  |  | 5,666
Margin(2) |  | $ | 2,362 |  | $ | 3,471 |  | $ | 4,439
Cloud infrastructure as a service: |  |  |  |  |  |  |  |  |
Revenues |  | $ | 646 |  | $ | 608 |  | $ | 456
Cloud infrastructure as a service expenses |  |  | 352 |  |  | 329 |  |  | 304
Sales and distribution expenses |  |  | 74 |  |  | 89 |  |  | 61
Margin(2) |  | $ | 220 |  | $ | 190 |  | $ | 91
Software license updates and product support: |  |  |  |  |  |  |  |  |
Revenues(1) |  | $ | 18,863 |  | $ | 18,858 |  | $ | 18,209
Software license updates and product support expenses |  |  | 1,077 |  |  | 1,130 |  |  | 1,111
Margin(2) |  | $ | 17,786 |  | $ | 17,728 |  | $ | 17,098
Total cloud and on-premise software business: |  |  |  |  |  |  |  |  |
Revenues(1) |  | $ | 28,997 |  | $ | 29,491 |  | $ | 29,207
Expenses |  |  | 8,629 |  |  | 8,102 |  |  | 7,579
Margin(2) |  | $ | 20,368 |  | $ | 21,389 |  | $ | 21,628
Hardware products: |  |  |  |  |  |  |  |  |
Revenues |  | $ | 2,471 |  | $ | 2,825 |  | $ | 2,976
Hardware products expenses |  |  | 1,364 |  |  | 1,465 |  |  | 1,516
Sales and distribution expenses |  |  | 850 |  |  | 864 |  |  | 940
Margin(2) |  | $ | 257 |  | $ | 496 |  | $ | 520
Hardware support: |  |  |  |  |  |  |  |  |
Revenues(1) |  | $ | 2,198 |  | $ | 2,384 |  | $ | 2,407
Hardware support expenses |  |  | 665 |  |  | 783 |  |  | 802
Margin(2) |  | $ | 1,533 |  | $ | 1,601 |  | $ | 1,605
Total hardware business: |  |  |  |  |  |  |  |  |
Revenues(1) |  | $ | 4,669 |  | $ | 5,209 |  | $ | 5,383
Expenses |  |  | 2,879 |  |  | 3,112 |  |  | 3,258
Margin(2) |  | $ | 1,790 |  | $ | 2,097 |  | $ | 2,125
Total services business: |  |  |  |  |  |  |  |  |
Revenues(1) |  | $ | 3,391 |  | $ | 3,553 |  | $ | 3,716
Services expenses |  |  | 2,645 |  |  | 2,818 |  |  | 2,822
Margin(2) |  | $ | 746 |  | $ | 735 |  | $ | 894
Totals: |  |  |  |  |  |  |  |  |
Revenues(1) | $ | 37,057 |  | $ | 38,253 |  | $ | 38,306
Expenses |  | $ | 14,153 |  |  | 14,032 |  |  | 13,659
Margin(2) | $ | 22,904 |  | $ | 24,221 |  | $ | 24,647
__________
(1) |  | Cloud software and on-premise software, software license updates and product support and hardware support revenues for management reporting included revenues related to cloud SaaS and PaaS, s oftware support and hardware support contracts that would have otherwise been recorded by the acquired businesses as independent entities but were not recognized in our consolidated statements of operations for the periods presented. See Note 10 for an explanation of these adjustments and the table below for a reconciliation of our total operating segment revenues to our total revenues as reported in our consolidated statements of operations. Our cloud software and on-premise software 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 IT expenses. Additionally, the margins reported do not reflect amortization of intangible assets, acquisition related and other expenses, restructuring expenses, stock-based compensation, interest expense or certain other income (expense), net.
The following table reconciles total operating segment revenues to total revenues as well as total operating segment margin to income before provision for income taxes:
|  | Year Ended May 31,
(in millions) |  | 2016 |  | 2015 |  | 2014
Total revenues for operating segments |  | $ | 37,057 |  | $ | 38,253 |  | $ | 38,306
Cloud software as a service and platform as a service revenues (1) |  |  | (7) |  |  | (12) |  |  | (17)
Software license updates and product support revenues(1) |  |  | (2) |  |  | (11) |  |  | (3)
Hardware support revenues(1) |  |  | (1) |  |  | (4) |  |  | (11)
Total revenues |  | $ | 37,047 |  | $ | 38,226 |  | $ | 38,275
Total margin for operating segments |  | $ | 22,904 |  | $ | 24,221 |  | $ | 24,647
Cloud software as a service and platform as a service revenues (1) |  |  | (7) |  |  | (12) |  |  | (17)
Software license updates and product support revenues(1) |  |  | (2) |  |  | (11) |  |  | (3)
Hardware support revenues(1) |  |  | (1) |  |  | (4) |  |  | (11)
Product development |  |  | (4,978) |  |  | (4,812) |  |  | (4,590)
Marketing and partner program expenses |  |  | (505) |  |  | (520) |  |  | (564)
Corporate, general and administrative and information technology expenses |  |  | (1,635) |  |  | (1,496) |  |  | (1,384)
Amortization of intangible assets |  |  | (1,638) |  |  | (2,149) |  |  | (2,300)
Acquisition related and other |  |  | (42) |  |  | (211) |  |  | (41)
Restructuring |  |  | (458) |  |  | (207) |  |  | (183)
Stock-based compensation |  |  | (1,034) |  |  | (928) |  |  | (795)
Interest expense |  |  | (1,467) |  |  | (1,143) |  |  | (914)
Non-operating income (expense), net |  |  | 305 |  |  | 106 |  |  | (141)
Income before provision for income taxes |  | $ | 11,442 |  | $ | 12,834 |  | $ | 13,704
__________
(1) | Cloud SaaS and PaaS revenues, software license updates and product support revenues and hardware support revenues for management reporting included revenues that would have otherwise been recorded by our acquired businesses as independent entities but were not recognized in our consolidated statements of operations for the periods presented due to business combination accounting requirements.
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 2016, 2015 or 2014.
|  | As of and for the Year Ended May 31,
|  | 2016 |  | 2015 |  | 2014
(in millions) |  | Revenues |  | Long Lived Assets(1) |  | Revenues |  | Long Lived Assets(1) |  | Revenues |  | Long Lived Assets(1)
United States |  | $ | 17,264 |  | $ | 3,646 |  | $ | 17,325 |  | $ | 3,341 |  | $ | 16,809 |  | $ | 2,993
United Kingdom |  |  | 2,349 |  |  | 334 |  |  | 2,388 |  |  | 309 |  |  | 2,309 |  |  | 236
Japan |  |  | 1,465 |  |  | 375 |  |  | 1,433 |  |  | 338 |  |  | 1,558 |  |  | 414
Germany |  |  | 1,438 |  |  | 40 |  |  | 1,466 |  |  | 33 |  |  | 1,483 |  |  | 35
Canada |  |  | 1,096 |  |  | 44 |  |  | 1,286 |  |  | 58 |  |  | 1,190 |  |  | 31
France |  |  | 1,039 |  |  | 26 |  |  | 1,044 |  |  | 33 |  |  | 1,148 |  |  | 28
Other countries |  |  | 12,396 |  |  | 963 |  |  | 13,284 |  |  | 1,007 |  |  | 13,778 |  |  | 879
Total |  | $ | 37,047 |  | $ | 5,428 |  | $ | 38,226 |  | $ | 5,119 |  | $ | 38,275 |  | $ | 4,616
__________
(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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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 34 -URI http://asc.fasb.org/extlink&oid=51669610&loc=d3e8981-108599 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 41 -URI http://asc.fasb.org/extlink&oid=51669610&loc=d3e9038-108599 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 33 -URI http://asc.fasb.org/extlink&oid=51669610&loc=d3e8971-108599 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 12 -URI http://asc.fasb.org/extlink&oid=51669610&loc=d3e8595-108599 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=51669610&loc=d3e8380-108599 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -URI http://asc.fasb.org/extlink&oid=51669610&loc=d3e8933-108599 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 26 -URI http://asc.fasb.org/extlink&oid=51669610&loc=d3e8844-108599 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 35 -URI http://asc.fasb.org/extlink&oid=51669610&loc=d3e8984-108599 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 40 -URI http://asc.fasb.org/extlink&oid=51669610&loc=d3e9031-108599 Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 42 -URI http://asc.fasb.org/extlink&oid=51669610&loc=d3e9054-108599 Reference 11: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 10 -URI http://asc.fasb.org/extlink&oid=51669610&loc=d3e8538-108599 Reference 12: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 29 -URI http://asc.fasb.org/extlink&oid=51669610&loc=d3e8864-108599 Reference 13: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 31 -URI http://asc.fasb.org/extlink&oid=51669610&loc=d3e8924-108599 Reference 14: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 30 -URI http://asc.fasb.org/extlink&oid=51669610&loc=d3e8906-108599 + Details
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