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NOTES PAYABLE AND OTHER BORROWINGS | 12 Months Ended
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May 31, 2016
Notes Payable and Other Borrowings [Abstract] |
NOTES PAYABLE AND OTHER BORROWINGS | 8. NOTES PAYABLE AND OTHER BORROWINGS Notes payable and other borrowings consisted of the following:
|  |  | May 31, 2016 |  | May 31, 2015
(Dollars in millions) |  | Date of |  | Amount |  | Effective |  | Amount |  | Effective
Interest |  | Interest
Issuance |  | Rate |  | Rate
Revolving credit agreements: |  |  |  |  |  |  |  |  |  |  |  |
$3,750, LIBOR plus 0.35%, due June 2016 |  | May 2016 |  | $ | 3,750 |  | 0.81% |  | $ | — |  | N.A.
Floating-rate senior notes: |  |  |  |  |  |  |  |  |  |  |  |
$1,000, three-month LIBOR plus 0.20%, due July 2017 |  | July 2014 |  |  | 1,000 |  | 0.83% |  |  | 1,000 |  | 0.47%
$500, three-month LIBOR plus 0.58%, due January 2019 |  | July 2013 |  |  | 500 |  | 1.21% |  |  | 500 |  | 0.86%
$750, three-month LIBOR plus 0.51%, due October 2019 |  | July 2014 |  |  | 750 |  | 1.14% |  |  | 750 |  | 0.78%
Fixed-rate senior notes: |  |  |  |  |  |  |  |  |  |  |  |
$2,000, 5.25%, due January 2016 |  | January 2006 |  |  | — |  | N.A. |  |  | 2,000 |  | 5.32%
$2,500, 1.20%, due October 2017 |  | October 2012 |  |  | 2,500 |  | 1.24% |  |  | 2,500 |  | 1.24%
$2,500, 5.75%, due April 2018 |  | April 2008 |  |  | 2,500 |  | 5.76% |  |  | 2,500 |  | 5.76%
$1,500, 2.375%, due January 2019 | (1) | July 2013 |  |  | 1,500 |  | 2.44% |  |  | 1,500 |  | 2.44%
$1,750, 5.00%, due July 2019 |  | July 2009 |  |  | 1,750 |  | 5.05% |  |  | 1,750 |  | 5.05%
$2,000, 2.25% due October 2019 | (1) | July 2014 |  |  | 2,000 |  | 2.27% |  |  | 2,000 |  | 2.27%
$1,000, 3.875%, due July 2020 |  | July 2010 |  |  | 1,000 |  | 3.93% |  |  | 1,000 |  | 3.93%
€1,250, 2.25%, due January 2021 | (2) (3) | July 2013 |  |  | 1,394 |  | 2.33% |  |  | 1,352 |  | 2.33%
$1,500, 2.80%, due July 2021 | (1) | July 2014 |  |  | 1,500 |  | 2.82% |  |  | 1,500 |  | 2.82%
$2,500, 2.50%, due May 2022 |  | May 2015 |  |  | 2,500 |  | 2.56% |  |  | 2,500 |  | 2.56%
$2,500, 2.50%, due October 2022 |  | October 2012 |  |  | 2,500 |  | 2.51% |  |  | 2,500 |  | 2.51%
$1,000, 3.625%, due July 2023 |  | July 2013 |  |  | 1,000 |  | 3.73% |  |  | 1,000 |  | 3.73%
$2,000, 3.40% due July 2024 |  | July 2014 |  |  | 2,000 |  | 3.43% |  |  | 2,000 |  | 3.43%
$2,500, 2.95%, due May 2025 |  | May 2015 |  |  | 2,500 |  | 3.00% |  |  | 2,500 |  | 3.00%
€750, 3.125%, due July 2025 | (2) (4) | July 2013 |  |  | 836 |  | 3.17% |  |  | 810 |  | 3.17%
$500, 3.25%, due May 2030 |  | May 2015 |  |  | 500 |  | 3.30% |  |  | 500 |  | 3.30%
$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 |  | 3.95% |  |  | 1,250 |  | 3.95%
$1,250, 6.50%, due April 2038 |  | April 2008 |  |  | 1,250 |  | 6.52% |  |  | 1,250 |  | 6.52%
$1,250, 6.125%, due July 2039 |  | July 2009 |  |  | 1,250 |  | 6.19% |  |  | 1,250 |  | 6.19%
$2,250, 5.375%, due July 2040 |  | July 2010 |  |  | 2,250 |  | 5.45% |  |  | 2,250 |  | 5.45%
$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 |  | 4.15% |  |  | 2,000 |  | 4.15%
$1,250, 4.375%, due May 2055 |  | May 2015 |  |  | 1,250 |  | 4.40% |  |  | 1,250 |  | 4.40%
Total senior notes and other borrowings |  |  |  | $ | 43,980 |  |  |  | $ | 42,162 |  |
Unamortized discount/issuance costs |  |  |  |  | (247) |  |  |  |  | (278) |  |
Hedge accounting fair value adjustments | (1) |  |  |  | 122 |  |  |  |  | 74 |  |
Total notes payable and other borrowings |  |  |  | $ | 43,855 |  |  |  | $ | 41,958 |  |
Notes payable and other borrowings, current |  |  |  | $ | 3,750 |  |  |  | $ | 1,999 |  |
Notes payable, non-current |  |  |  | $ | 40,105 |  |  |  | $ | 39,959 |  |
__________
(1) | We have entered into certain interest rate swap agreements that have the economic effects of modifying the fixed-interest obligations associated with the 2.375% senior notes due January 2019 (January 2019 Notes), the 2.25% senior notes due October 2019 (October 2019 Notes) and the 2.80% senior notes due July 2021 (July 2021 Notes) so that the interest payable on these notes effectively became variable based on LIBOR. The effective interest rates after consideration of these fixed to variable interest rate swap agreements were 1.28% and 0.93% for the January 2019 Notes, 1.11% and 0.76% for the October 2019 Notes, and 1.26% and 0.91% for the July 2021 Notes as of May 31, 2016 and 2015, respectively. Refer to Notes 1 and 11 for a description of our accounting for fair value hedges.
(2) | In July 2013, we issued €2.0 billion of fixed-rate senior notes comprised of €1.25 billion of 2.25% senior notes due January 2021 (January 2021 Notes) and €750 million of 3.125% senior notes due July 2025 (July 2025 Notes, and together with the January 2021 Notes, the Euro Notes). Principal and unamortized discount/issuance costs for the Euro Notes in the table above were calculated using foreign currency exchange rates as of May 31, 2016 and May 31, 2015, respectively. The Euro Notes are registered and trade on the New York Stock Exchange.
(3) | In connection with the issuance of the January 2021 Notes, we entered into certain cross-currency 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 fixed-rate, U.S. Dollar-denominated debt of $1.6 billion with a fixed annual interest rate of 3.53% (see Note 11 for additional information).
(4) | We designated the July 2025 Notes as a net investment hedge of our investments in certain of our international subsidiaries that use the Euro as their functional currency in order to reduce the volatility in stockholders’ equity caused by the changes in foreign currency exchange rates of the Euro with respect to the U.S. Dollar (see Note 11 for additional information).
Senior Notes and Other Borrowings In January 2016, our $2.0 billion of 5.25% senior notes due January 2016 matured and were repaid. In July 2014, our $1.5 billion of 3.75% senior notes due July 2014 (July 2014 Notes) matured and were repaid (we also settled the fixed to variable interest rate swap agreements associated with the July 2014 Notes). Interest is payable semi-annually for the senior notes except for the Euro Notes for which interest is payable annually and the floating-rate senior notes for which interest is payable quarterly. 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 except for the floating-rate senior notes which may not be redeemed prior to their maturity. 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. All existing and future liabilities of the subsidiaries of Oracle Corporation are or will be effectively senior to the senior notes and any future issuances of commercial paper notes. We were in compliance with all debt-related covenants at May 31, 2016. Future principal payments (adjusted for the effects of the cross-currency swap agreements associated with the January 2021 Notes) for all of our borrowings at May 31, 2016 were as follows (in millions):
Fiscal 2017 |  | $ | 3,750
Fiscal 2018 |  |  | 6,000
Fiscal 2019 |  |  | 2,000
Fiscal 2020 |  |  | 4,500
Fiscal 2021 |  |  | 2,655
Thereafter |  |  | 25,336
Total |  | $ | 44,241
Revolving Credit Agreements In May 2016, we entered into three revolving credit agreements with JPMorgan Chase Bank, N.A., as initial lender and administrative agent (the 2016 Credit Agreements) and borrowed $3.8 billion pursuant to these agreements. The 2016 Credit Agreements provided us with short-term borrowings for working capital and other general corporate purposes. Interest for the 2016 Credit Agreements is based on either (1) a LIBOR-based formula or (2) the Base Rate formula, each as set forth in the 2016 Credit Agreements. The borrowings are due and payable on June 27, 2016, which is the termination date of the 2016 Credit Agreements. In April 2013, we entered into a $3.0 billion Revolving Credit Agreement with Wells Fargo Bank, N.A., Bank of America, N.A., BNP Paribas, JPMorgan Chase Bank, N.A. and certain other lenders (the 2013 Credit Agreement). The 2013 Credit Agreement provides for an unsecured 5-year revolving credit facility to be used for general corporate purposes including back-stopping any commercial paper notes that we may issue. Subject to certain conditions stated in the 2013 Credit Agreement, we may borrow, prepay and re-borrow amounts under the 2013 Credit Agreement at any time during the term of the 2013 Credit Agreement. Interest under the 2013 Credit Agreement is based on either (a) a LIBOR-based formula or (b) the Base Rate formula, each as set forth in the 2013 Credit Agreement. Any amounts drawn pursuant to the 2013 Credit Agreement are due on April 20, 2018. No amounts were outstanding pursuant to the 2013 Credit Agreement as of May 31, 2016 and 2015. The 2016 Credit Agreements and the 2013 Credit Agreement contain certain customary representations and warranties, covenants and events of default. If any of the events of default occur and are not cured within applicable grace periods or waived, any unpaid amounts owed under the agreement to which the default relates may be declared immediately due and payable and the relevant agreement may be terminated. We were in compliance with the covenants of the 2016 Credit Agreements and the 2013 Credit Agreement as of May 31, 2016. Commercial Paper Program and Commercial Paper Notes In April 2013, pursuant to our existing $3.0 billion commercial paper program which 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, we entered into new dealer agreements with various banks and a new Issuing and Paying Agency Agreement with JP Morgan Chase Bank, N.A (JP Morgan). Effective on December 22, 2014, Deutsche Bank Trust Companies Americas became the Successor Issuing and Paying Agent replacing JP Morgan. Since that time, we have entered into new dealer agreements with additional banks. As of May 31, 2016 and 2015, we did not have any outstanding commercial paper notes. We intend to back-stop any commercial paper notes that we may issue in the future with the 2013 Credit Agreement.

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- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21475-112644 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02.19,20,22) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 + Details
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