ORCL Inherent Limitations on Effectiveness of Controls

Our management, including our Principal Executive and Financial Officer, believes that our disclosure controls and procedures and internal control over financial reporting are designed to provide reasonable assurance of achieving their objectives and are effective at the reasonable assurance level. However, our management does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent all errors and all fraud. A control system, no matter how well-conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. These inherent limitations include the realities that judgments in decision making can be faulty and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by management override of the controls. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.


ORCL Directors, Executive Officers and Corporate Governance

Pursuant to General Instruction G(3) of Form 10-K, the information required by this item relating to our executive officers is included under the caption “Information About Our Executive Officers” in Part I of this Annual Report.


The other information required by this Item 10 is incorporated herein by reference from the information contained in our Proxy Statement to be filed with the SEC in connection with the solicitation of proxies for our 2024 Annual Meeting of Stockholders (2024 Proxy Statement).


ORCL Executive Compensation

The information required by this Item 11 is incorporated herein by reference from the information to be contained in our 2024 Proxy Statement.


ORCL Executive Compensation

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters


ORCL Executive Compensation

The information required by this Item 12 is incorporated herein by reference from the information to be contained in our 2024 Proxy Statement.


ORCL Certain Relationships and Related Transactions, and Director Independence

The information required by this Item 13 is incorporated herein by reference from the information to be contained in our 2024 Proxy Statement.


ORCL Principal Accountant Fees and Services

The information required by this Item 14 is incorporated herein by reference from the information to be contained in our 2024 Proxy Statement.


ORCL Exhibits and Financial Statement Schedules (a)1. Financial Statements

The following financial statements are filed as a part of this report: ##Page Reports of Independent Registered Public Accounting Firm (PCAOB ID: 42)##62 Consolidated Financial Statements:## Balance Sheets as of May 31, 2024 and 2023##65 Statements of Operations for the years ended May 31, 2024, 2023 and 2022##66 Statements of Comprehensive Income for the years ended May 31, 2024, 2023 and 2022##67 Statements of Stockholders’ Equity (Deficit) for the years ended May 31, 2024, 2023 and 2022##68 Statements of Cash Flows for the years ended May 31, 2024, 2023 and 2022##69


ORCL 2. Financial Statement Schedules (b) Exhibits

All schedules are omitted because the information required to be set forth therein is not applicable or is shown in the financial statements or notes herein or not present in amounts sufficient to require submission of the schedule.


The information required by this Item is set forth in the Index of Exhibits that is after Item 16 of this Annual Report.


ORCL Report of Independent Registered Public Accounting Firm

To the Stockholders and the Board of Directors of Oracle Corporation


ORCL Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Oracle Corporation (the Company) as of May 31, 2024 and 2023, the related consolidated statements of operations, comprehensive income, stockholders’ equity (deficit) and cash flows for each of the three years in the period ended May 31, 2024, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at May 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended May 31, 2024, in conformity with U.S. generally accepted accounting principles.


We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of May 31, 2024, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated June 20, 2024 expressed an unqualified opinion thereon.


ORCL Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.


ORCL Basis for Opinion

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.


ORCL Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.


ORCL Income Tax – Uncertain tax positions

Description of the matter As discussed in Note 13 of the consolidated financial statements, the Company recognizes uncertain tax positions and measures unrecognized tax benefits related to various domestic and foreign matters. The Company uses significant judgment in the accounting for uncertain tax positions related to certain revenue sharing and cost reimbursement arrangements, including the interpretation and application of tax laws and legal rulings in various jurisdictions. Auditing management’s evaluation of whether an uncertain tax position is more likely than not to be sustained and the measurement of the benefit of uncertain tax positions related to certain revenue sharing and cost reimbursement arrangements was complex, involved significant judgment, and was based on interpretations and application of tax laws and legal rulings.


ORCL Index to Financial Statements

How we addressed the matter in our audit We obtained an understanding, evaluated the design, and tested the operating effectiveness of the controls over management’s process for interpretation and application of tax laws and legal rulings, as well as development of the assumptions and estimates used in the measurement of these positions.  To test management’s assessment of these uncertain tax positions, we performed audit procedures that included, among others, evaluating management’s assumptions and analysis which detailed the basis and technical merits of the uncertain tax positions. We involved our tax subject matter professionals in assessing the technical merits of these positions and used our knowledge of relevant tax laws and experience with related taxing authorities. In addition, we also evaluated the Company’s disclosures in relation to these matters included in Note 13 of the consolidated financial statements.


ORCL /s/ Ernst & Young LLP

We have served as the Company’s auditor since 2002.


ORCL Opinion on Internal Control Over Financial Reporting

We have audited Oracle Corporation’s internal control over financial reporting as of May 31, 2024, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Oracle Corporation (the Company) maintained, in all material respects, effective internal control over financial reporting as of May 31, 2024, based on the COSO criteria.


We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of May 31, 2024 and 2023, the related consolidated statements of operations, comprehensive income, stockholders’ equity (deficit) and cash flows for each of the three years in the period ended May 31, 2024, and the related notes and our report dated June 20, 2024 expressed an unqualified opinion thereon.


ORCL Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.


ORCL Basis for Opinion

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.


ORCL Basis for Opinion

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.


ORCL Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.


Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.


ORCL As of May 31, 2024 and 2023

########May 31,###### (in millions, except per share data)####2024########2023## ASSETS############## Current assets:############## Cash and cash equivalents##$##10,454######$##9,765## Marketable securities####207########422## Trade receivables, net of allowances for credit losses of $485 and $428 as of May 31, 2024 and May 31, 2023, respectively####7,874########6,915## Prepaid expenses and other current assets####4,019########3,902## Total current assets####22,554########21,004## Non-current assets:############## Property, plant and equipment, net####21,536########17,069## Intangible assets, net####6,890########9,837## Goodwill, net####62,230########62,261## Deferred tax assets####12,273########12,226## Other non-current assets####15,493########11,987## Total non-current assets####118,422########113,380## Total assets##$##140,976######$##134,384## LIABILITIES AND STOCKHOLDERS’ EQUITY############## Current liabilities:##############


ORCL Notes payable and other borrowings, current##$##10,605######$##4,061##

Accounts payable####2,357########1,204## Accrued compensation and related benefits####1,916########2,053## Deferred revenues####9,313########8,970## Other current liabilities####7,353########6,802## Total current liabilities####31,544########23,090## Non-current liabilities:##############


ORCL Notes payable and other borrowings, non-current####76,264########86,420##

Income taxes payable####10,817########11,077## Deferred tax liabilities####3,692########5,772## Other non-current liabilities####9,420########6,469## Total non-current liabilities####100,193########109,738## Commitments and contingencies############## Oracle Corporation stockholders’ equity:############## Preferred stock, $0.01 par value—authorized: 1.0 shares; outstanding: none####—########—## Common stock, $0.01 par value and additional paid in capital—authorized: 11,000 shares; outstanding: 2,755 shares and 2,713 shares as of May 31, 2024 and 2023, respectively####32,764########30,215## Accumulated deficit####(22,628##)######(27,620##) Accumulated other comprehensive loss####(1,432##)######(1,522##) Total Oracle Corporation stockholders’ equity####8,704########1,073## Noncontrolling interests####535########483## Total stockholders’ equity####9,239########1,556## Total liabilities and stockholders’ equity##$##140,976######$##134,384##


See notes to consolidated financial statements.


ORCL For the Years Ended May 31, 2024, 2023 and 2022

##########Year Ended May 31,######## (in millions, except per share data)####2024######2023######2022## Revenues:################## Cloud services and license support##$##39,383####$##35,307####$##30,174## Cloud license and on-premise license####5,081######5,779######5,878## Hardware####3,066######3,274######3,183## Services####5,431######5,594######3,205## Total revenues####52,961######49,954######42,440## Operating expenses:################## Cloud services and license support(1)####9,427######7,763######5,213## Hardware(1)####891######1,040######972## Services(1)####4,825######4,761######2,692## Sales and marketing(1)####8,274######8,833######8,047## Research and development####8,915######8,623######7,219## General and administrative####1,548######1,579######1,317## Amortization of intangible assets####3,010######3,582######1,150## Acquisition related and other####314######190######4,713## Restructuring####404######490######191## Total operating expenses####37,608######36,861######31,514## Operating income####15,353######13,093######10,926## Interest expense####(3,514##)####(3,505##)####(2,755##) Non-operating expenses, net####(98##)####(462##)####(522##) Income before income taxes####11,741######9,126######7,649## Provision for income taxes####1,274######623######932## Net income##$##10,467####$##8,503####$##6,717## Earnings per share:################## Basic##$##3.82####$##3.15####$##2.49## Diluted##$##3.71####$##3.07####$##2.41## Weighted average common shares outstanding:################## Basic####2,744######2,696######2,700## Diluted####2,823######2,766######2,786##


(1)Exclusive of amortization of intangible assets, which is shown separately.


##########Year Ended May 31,######## (in millions)####2024######2023######2022## Net income##$##10,467####$##8,503####$##6,717## Other comprehensive income (loss), net of tax:################## Net foreign currency translation losses####(17##)####(204##)####(707##) Net unrealized gains on defined benefit plans####31######271######190## Net unrealized gains on cash flow hedges####77######102######—## Other, net####(1##)####1######—## Total other comprehensive income (loss), net####90######170######(517##) Comprehensive income##$##10,557####$##8,673####$##6,200##


######Common Stock and Additional Paid in Capital################Accumulated Other######Total Oracle Corporation############Total## (in millions, except per share data)##Number of Shares########Amount######Accumulated Deficit######Comprehensive Loss######Stockholders’ Equity (Deficit)######Noncontrolling Interests######Stockholders’ Equity (Deficit)## Balances as of May 31, 2021##2,814######$##26,533####$##(20,120##)##$##(1,175##)##$##5,238####$##714####$##5,952## Common stock issued under stock-based compensation plans##48########318######—######—######318######—######318## Common stock issued under stock purchase plans##2########164######—######—######164######—######164## Stock-based compensation##—########2,613######—######—######2,613######—######2,613## Repurchases of common stock##(186##)######(1,723##)####(14,477##)####—######(16,200##)####—######(16,200##) Shares repurchased for tax withholdings upon vesting of restricted stock-based awards##(13##)######(1,093##)####—######—######(1,093##)####—######(1,093##) Cash dividends declared ($1.28 per share)##—########—######(3,457##)####—######(3,457##)####—######(3,457##) Other, net##—########(4##)####1######—######(3##)####(396##)####(399##) Other comprehensive loss, net##—########—######—######(517##)####(517##)####(50##)####(567##) Net income##—########—######6,717######—######6,717######184######6,901## Balances as of May 31, 2022##2,665########26,808######(31,336##)####(1,692##)####(6,220##)####452######(5,768##) Common stock issued under stock-based compensation plans##79########1,019######—######—######1,019######—######1,019## Common stock issued under stock purchase plans##2########173######—######—######173######—######173## Assumption of stock-based compensation plan awards in connection with acquisitions##—########55######—######—######55######—######55## Stock-based compensation##—########3,547######—######—######3,547######—######3,547## Repurchases of common stock##(17##)######(166##)####(1,120##)####—######(1,286##)####—######(1,286##) Shares repurchased for tax withholdings upon vesting of restricted stock-based awards##(16##)######(1,203##)####—######—######(1,203##)####—######(1,203##) Cash dividends declared ($1.36 per share)##—########—######(3,668##)####—######(3,668##)####—######(3,668##) Other, net##—########(18##)####1######—######(17##)####(98##)####(115##) Other comprehensive income (loss), net##—########—######—######170######170######(36##)####134## Net income##—########—######8,503######—######8,503######165######8,668## Balances as of May 31, 2023##2,713########30,215######(27,620##)####(1,522##)####1,073######483######1,556## Common stock issued under stock-based compensation plans##68########545######—######—######545######—######545## Common stock issued under stock purchase plans##2########197######—######—######197######—######197## Stock-based compensation##—########3,974######—######—######3,974######—######3,974## Repurchases of common stock##(11##)######(117##)####(1,083##)####—######(1,200##)####—######(1,200##) Shares repurchased for tax withholdings upon vesting of restricted stock-based awards##(17##)######(2,040##)####—######—######(2,040##)####—######(2,040##) Cash dividends declared ($1.60 per share)##—########—######(4,391##)####—######(4,391##)####—######(4,391##) Other, net##—########(10##)####(1##)####—######(11##)####(99##)####(110##) Other comprehensive income (loss), net##—########—######—######90######90######(35##)####55## Net income##—########—######10,467######—######10,467######186######10,653## Balances as of May 31, 2024##2,755######$##32,764####$##(22,628##)##$##(1,432##)##$##8,704####$##535####$##9,239##


##########Year Ended May 31,######## (in millions)####2024######2023######2022## Cash flows from operating activities:################## Net income##$##10,467####$##8,503####$##6,717## Adjustments to reconcile net income to net cash provided by operating activities:################## Depreciation####3,129######2,526######1,972## Amortization of intangible assets####3,010######3,582######1,150## Deferred income taxes####(2,139##)####(2,167##)####(1,146##) Stock-based compensation####3,974######3,547######2,613## Other, net####720######661######220## Changes in operating assets and liabilities, net of effects from acquisitions:################## Increase in trade receivables, net####(965##)####(151##)####(874##) Decrease in prepaid expenses and other assets####542######317######11## Decrease in accounts payable and other liabilities####(594##)####(281##)####(733##) Decrease in income taxes payable####(127##)####(153##)####(398##) Increase in deferred revenues####656######781######7## Net cash provided by operating activities####18,673######17,165######9,539## Cash flows from investing activities:################## Purchases of marketable securities and other investments####(1,003##)####(1,181##)####(10,272##) Proceeds from sales and maturities of marketable securities and other investments####572######1,113######26,151## Acquisitions, net of cash acquired####(63##)####(27,721##)####(148##) Capital expenditures####(6,866##)####(8,695##)####(4,511##) Net cash (used for) provided by investing activities####(7,360##)####(36,484##)####11,220## Cash flows from financing activities:################## Payments for repurchases of common stock####(1,202##)####(1,300##)####(16,248##) Proceeds from issuances of common stock####742######1,192######482## Shares repurchased for tax withholdings upon vesting of restricted stock-based awards####(2,040##)####(1,203##)####(1,093##) Payments of dividends to stockholders####(4,391##)####(3,668##)####(3,457##) (Repayments of) proceeds from issuances of commercial paper, net####(167##)####500######—## Proceeds from issuances of senior notes and other borrowings, net of issuance costs####—######33,494######—## Repayments of senior notes and other borrowings####(3,500##)####(21,050##)####(8,250##) Other, net####4######(55##)####(560##) Net cash (used for) provided by financing activities####(10,554##)####7,910######(29,126##) Effect of exchange rate changes on cash and cash equivalents####(70##)####(209##)####(348##) Net increase (decrease) in cash and cash equivalents####689######(11,618##)####(8,715##) Cash and cash equivalents at beginning of period####9,765######21,383######30,098## Cash and cash equivalents at end of period##$##10,454####$##9,765####$##21,383## Non-cash investing activities:################## Unpaid capital expenditures##$##1,637####$##588####$##731## Supplemental schedule of cash flow data:################## Cash paid for income taxes##$##3,560####$##3,009####$##2,567## Cash paid for interest##$##3,655####$##3,250####$##2,735##


ORCL 1.ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

Oracle Corporation provides products and services that substantially address all aspects of enterprise information technology (IT) needs, 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 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.


ORCL 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, net in our consolidated statements of operations. Intercompany transactions and balances have been eliminated. 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.


ORCL Basis of Financial Statements

During the first quarter of fiscal 2024, we finalized our adoption of Accounting Standards Update (ASU) 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting and subsequent amendments to the initial guidance, which had no material impact to our consolidated financial statements or notes thereto for the year ended May 31, 2024.


ORCL Use of Estimates

Our consolidated financial statements are prepared in accordance with United States (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


ORCL Index to Financial Statements

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.


ORCL Index to Financial Statements

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.


ORCL Revenue Recognition

Our sources of revenues include: •cloud and license revenues, which include: cloud services revenues; cloud license and on-premise license revenues; and license support revenues, 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.


ORCL Revenue Recognition

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.


ORCL Revenue Recognition

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.


ORCL Revenue Recognition

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.


ORCL Revenue Recognition

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.


ORCL Revenue Recognition

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.


ORCL Index to Financial Statements

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.


ORCL Index to Financial Statements

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.


ORCL Index to Financial Statements

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, net within our consolidated statements of operations based on market rates in the country in which the transaction is being financed.


ORCL Index to Financial Statements

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.


ORCL 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.


ORCL 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.


ORCL 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.


ORCL 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.


ORCL 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.


ORCL Revenue Recognition for Services

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


ORCL Revenue Recognition for Services

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.


ORCL Revenue Recognition for Services

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.


ORCL Remaining Performance Obligations from Contracts with Customers

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, 2024 and 2023. The amount of revenues recognized during the year ended May 31, 2024 and 2023 that were included in the opening deferred revenues balance as of May 31, 2023 and 2022, respectively, was approximately $9.0 billion and $8.3 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, 2024, 2023 and 2022.


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, 2024, our remaining performance obligations were $97.9 billion, of which we expect to recognize approximately 39% as revenues over the next twelve months, 36% over the subsequent month 13 to month 36, 19% over the subsequent month 37 to month 60 and the remainder thereafter.


ORCL 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 2024, 2023 and 2022, $1.4 billion, $2.0 billion and $1.8 billion, respectively, of our financing receivables were sold to financial institutions.


ORCL 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.


ORCL Index to Financial Statements

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.


ORCL Index to Financial Statements

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.


ORCL 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, 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, 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, net for each reporting period.


Our investments in non-marketable debt instruments are recorded at cost plus accrued interest, adjusted for any provision for expected credit losses.


Our investments in marketable debt and equity securities totaled $207 million and $422 million as of May 31, 2024 and 2023, respectively, and are included in current assets in the accompanying consolidated balance sheets.


Our non-marketable debt investments and equity securities and related instruments totaled $2.0 billion and $1.6 billion as of May 31, 2024 and 2023, respectively, and are included in other non-current assets in the accompanying consolidated balance sheets and are subject to periodic impairment reviews. The majority of the non-marketable investments held as of these dates were with Ampere Computing Holdings LLC (Ampere), a related party entity in which we had an ownership interest of approximately 29% as of May 31, 2024 and 2023. We follow the equity method of accounting for our investment in Ampere and our share of loss under the equity method of accounting is recorded in the non-operating expenses, net line item in our consolidated statements of operations. We also have


ORCL Index to Financial Statements

convertible debt investments in Ampere which, under the terms of an agreement with Ampere and other co-investors, will mature in June 2026 and are convertible into equity securities at the holder’s option under certain circumstances. During the fiscal year ended May 31, 2024, we invested an aggregate of $600 million in convertible debt instruments issued by Ampere. The total carrying value of our investments in Ampere after accounting for losses under the equity method of accounting was $1.5 billion and $1.2 billion as of May 31, 2024 and 2023, respectively. In accordance with the terms of an agreement with other co-investors, we are also a counterparty to certain put (exercisable by a co-investor) and call (exercisable by Oracle) options at prices of approximately $400 million to $1.5 billion, respectively, to acquire additional equity interests in Ampere from our co-investors through January 2027. If either of such options is exercised by us or our co-investors, we would obtain control of Ampere and consolidate its results with our results of operations. Ampere has historically generated net losses.


ORCL 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.


ORCL 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.


ORCL 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, trade receivables and non-marketable investments. 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 2024, 2023 or 2022. Refer to “Marketable and Non-Marketable Investments” above for additional information on our non-marketable investments.


ORCL Concentrations of Credit Risk

We outsource the manufacturing, assembly and delivery of the substantial majority of our hardware products that we sell to our customers as well as use internally to deliver our cloud services 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.


ORCL Inventories

Inventories are stated at the lower of cost or net realizable value. We evaluate our ending inventories for estimated excess quantities and obsolescence. This evaluation includes analysis of sales levels by product and projections of


ORCL Index to Financial Statements

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 $334 million and $298 million as of May 31, 2024 and 2023, respectively.


ORCL 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 $821 million and $798 million as of May 31, 2024 and 2023, respectively.


ORCL 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.


ORCL 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 at an appropriate asset or asset group level. We did not recognize any significant property impairment charges in fiscal 2024, 2023 or 2022.


ORCL 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. 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.


The carrying amounts of our goodwill and intangible assets are reviewed for impairment annually 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


ORCL Index to Financial Statements

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, 2024 and did not result in a goodwill impairment charge. We did not recognize impairment charges in fiscal 2023 or 2022.


ORCL Index to Financial Statements

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 2024, 2023 or 2022.


ORCL Derivative Financial Instruments

During fiscal 2024, 2023 and 2022, 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 certain types of hedges).


ORCL Derivative Financial Instruments

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.


ORCL Leases

We apply the provisions of ASC 842, Leases (ASC 842), in accounting for our leases. Accordingly, 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. Right-of-Use (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. Abandoned operating leases are accounted for as ROU asset impairment charges pursuant to ASC 842.


ORCL Leases

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


ORCL Index to Financial Statements

provided by operating activities in our consolidated statements of cash flows for the years ended May 31, 2024 and 2023. Note 10 below provides additional information regarding our leases.


ORCL 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.


ORCL 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 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, net in the accompanying consolidated statements of operations were $228 million, $249 million and $199 million in fiscal 2024, 2023 and 2022, respectively.


ORCL Stock-Based Compensation

We account for share-based payments to employees, including grants of service-based restricted stock unit (RSU) 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.


ORCL Stock-Based Compensation

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.


ORCL Stock-Based Compensation

For our PSOs, we recognize stock-based compensation expense on a straight-line basis for 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 applicable for each tranche. 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.


ORCL Stock-Based Compensation

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


ORCL Index to Financial Statements

income taxes in such period. Note 12 below provides additional information regarding our stock-based compensation plans and related expenses.


ORCL Research and Development Costs and Software Development Costs

Research and development costs are generally 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 2024, 2023 and 2022.


ORCL 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)####2024######2023####2022 Transitional and other employee related costs##$##19####$##77##$##10 Business combination adjustments, net####(12##)####10####9 Other, net####307######103####4,694 Total acquisition related and other expenses##$##314####$##190##$##4,713


ORCL Non-Operating Expenses, net

Non-operating expenses, 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 losses related to equity investments, including losses attributable to equity method investments (primarily Ampere) 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)####2024######2023######2022## Interest income##$##451####$##285####$##94## Foreign currency losses, net####(228##)####(249##)####(199##) Noncontrolling interests in income####(186##)####(165##)####(184##) Losses from equity investments, net####(303##)####(327##)####(147##) Other income (expenses), net####168######(6##)####(86##) Total non-operating expenses, net##$##(98##)##$##(462##)##$##(522##)


ORCL 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.


ORCL Income Taxes

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


ORCL Index to Financial Statements

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.


ORCL Index to Financial Statements

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.


ORCL Recent Accounting Pronouncements

Segment Reporting: In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (ASU 2023-07), which enhances the disclosures required for operating segments in our annual and interim consolidated financial statements. ASU 2023-07 is effective for us for our annual reporting for fiscal 2025 and for interim period reporting beginning in fiscal 2026 on a retrospective basis. Early adoption is permitted. We are currently evaluating the impact of our pending adoption of ASU 2023-07 on our consolidated financial statements.


ORCL Recent Accounting Pronouncements

Income Taxes: In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (ASU 2023-09), which enhances the disclosures required for income taxes in our annual consolidated financial statements. ASU 2023-09 is effective for us for our annual reporting for fiscal 2026 on a prospective basis. Both early adoption and retrospective application are permitted. We are currently evaluating the impact of our pending adoption of ASU 2023-09 on our consolidated financial statements.


ORCL Fiscal 2023 Acquisition of Cerner Corporation

On June 8, 2022, we completed our acquisition of Cerner Corporation (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.


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. In allocating the purchase price based on estimated fair values, we recorded approximately $18.6 billion of goodwill, $12.0 billion of identifiable intangible assets and $2.4 billion of net tangible liabilities. Goodwill recognized as a part of our acquisition of Cerner was not deductible for income tax purposes.


ORCL Other Fiscal 2024, 2023 and 2022 Acquisitions

During fiscal 2024, 2023 and 2022, 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.


ORCL 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 with original maturities at the time of purchase greater than 90 days.


The amortized principal amounts of our cash, cash equivalents and marketable securities approximated their fair values at May 31, 2024 and 2023. 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


ORCL Index to Financial Statements

insignificant for fiscal 2024, 2023 and 2022. 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)####2024######2023 Money market funds##$##2,620####$##1,694 Time deposits and other####310######468 Total investments##$##2,930####$##2,162 Investments classified as cash equivalents##$##2,723####$##1,740 Investments classified as marketable securities##$##207####$##422


ORCL Index to Financial Statements

As of May 31, 2024 and 2023, 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.


ORCL Index to Financial Statements

Restricted cash that was included within cash and cash equivalents as presented within our consolidated balance sheets as of May 31, 2024 and 2023 and our consolidated statements of cash flows for the years ended May 31, 2024, 2023 and 2022 was immaterial.


ORCL 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.


ORCL 4.FAIR VALUE MEASUREMENTS

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.


ORCL Index to Financial Statements

Assets and Liabilities Measured at Fair Value on a Recurring Basis


ORCL Index to Financial Statements

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, 2024##############May 31, 2023#### ######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##$##2,620####$##—##$##2,620##$##1,694####$##—##$##1,694 Time deposits and other####48######262####310####180######288####468 Derivative financial instruments####—######179####179####—######102####102 Total assets##$##2,668####$##441##$##3,109##$##1,874####$##390##$##2,264 Liabilities:############################ Derivative financial instruments##$##—####$##96##$##96##$##—####$##126##$##126


ORCL Index to Financial Statements

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.


ORCL Index to Financial Statements

Based on the trading prices of the $86.5 billion and $89.9 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, 2024 and 2023, respectively, the estimated fair values of the senior notes and other long-term borrowings and the related fair value hedges using Level 2 inputs at May 31, 2024 and 2023 were $77.2 billion and $79.9 billion, respectively.


ORCL 5.PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment, net consisted of the following: ##Estimated########May 31,###### (Dollars in millions)##Useful Life####2024########2023## Computer, network, machinery and equipment##1-5 years##$##20,989######$##17,258## Buildings and improvements##1-40 years####6,493########5,880## Furniture, fixtures and other##5-15 years####463########447## Land##—####1,239########1,243## Construction in progress(1)##—####5,634########3,846## Total property, plant and equipment##1-40 years####34,818########28,674## Accumulated depreciation######(13,282##)######(11,605##) Total property, plant and equipment, net####$##21,536######$##17,069##


ORCL 5.PROPERTY, PLANT AND EQUIPMENT

(1)Amounts primarily consist of computer equipment to be built and deployed at our data centers.


ORCL 6.INTANGIBLE ASSETS AND GOODWILL

The changes in intangible assets for fiscal 2024 and the net book value of intangible assets as of May 31, 2024 and 2023 were as follows: ##########Intangible Assets, Gross########################Accumulated Amortization################Intangible Assets, Net######Weighted Average (Dollars in millions)####May 31, 2023####Additions######Retirements######May 31, 2024####May 31, 2023######Expense########Retirements####May 31, 2024######May 31, 2023######May 31, 2024##Useful Life(1) Developed technology##$##4,300##$##59####$##(124##)##$##4,235##$##(2,407##)##$##(676##)####$##124##$##(2,959##)##$##1,893####$##1,276##3 Cloud services and license support agreements and related relationships####9,456####—######(996##)####8,460####(5,579##)####(1,026##)######996####(5,609##)####3,877######2,851##N.A. Cloud license and on-premise license agreements and related relationships####2,688####—######(125##)####2,563####(697##)####(467##)######125####(1,039##)####1,991######1,524##N.A. Other####3,582####4######(53##)####3,533####(1,506##)####(841##)######53####(2,294##)####2,076######1,239##N.A. Total intangible assets, net##$##20,026##$##63####$##(1,298##)##$##18,791##$##(10,189##)##$##(3,010##)####$##1,298##$##(11,901##)##$##9,837####$##6,890##


ORCL 6.INTANGIBLE ASSETS AND GOODWILL

(1)Represents weighted-average useful lives (in years) of intangible assets acquired during fiscal 2024.


ORCL 6.INTANGIBLE ASSETS AND GOODWILL

As of May 31, 2024, estimated future amortization expenses related to intangible assets were as follows (in millions): Fiscal 2025##$##2,303 Fiscal 2026####1,639 Fiscal 2027####672 Fiscal 2028####635 Fiscal 2029####561 Thereafter####1,080 Total intangible assets, net##$##6,890


ORCL 6.INTANGIBLE ASSETS AND GOODWILL

The changes in the carrying amounts of goodwill, net, which is generally not deductible for tax purposes, for our operating segments for fiscal 2024 and 2023 were as follows: (in millions)####Cloud and License######Hardware####Services######Total Goodwill, net## 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## Goodwill adjustments, net(1)####12######—####(43##)####(31##) Balances as of May 31, 2024##$##57,072####$##2,732##$##2,426####$##62,230##


ORCL 6.INTANGIBLE ASSETS AND GOODWILL

(1)Amounts include any changes in goodwill balances for the period presented that resulted from foreign currency translations and certain other adjustments.


ORCL Notes payable and other borrowings consisted of the following:

############May 31,######## ########2024##########2023## (Amounts in millions)##Date of Issuance####Amount####Effective Interest Rate######Amount####Effective Interest Rate Fixed-rate senior notes:#################### $1,000, 3.625%, due July 2023##July 2013##$##—####N.A.####$##1,000####3.73% $2,500, 2.40%, due September 2023##July 2016####—####N.A.######2,500####2.44% $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####3.01% $3,500, 2.50%, due April 2025##April 2020####3,500####2.54%######3,500####2.54% $2,500, 2.95%, due May 2025##May 2015####2,500####3.05%######2,500####3.05% €750, 3.125%, due July 2025(1)(2)##July 2013####808####3.17%######800####3.17% $1,000, 5.80%, due November 2025##November 2022####1,000####5.93%######1,000####5.93% $2,750, 1.65%, due March 2026##March 2021####2,750####1.67%######2,750####1.67% $3,000, 2.65%, due July 2026##July 2016####3,000####2.73%######3,000####2.73% $2,250, 2.80%, due April 2027##April 2020####2,250####2.87%######2,250####2.87% $2,750, 3.25%, due November 2027##November 2017####2,750####3.29%######2,750####3.29% $2,000, 2.30%, due March 2028##March 2021####2,000####2.36%######2,000####2.36% $750, 4.50%, due May 2028##February 2023####750####4.60%######750####4.60% $1,250, 6.15%, due November 2029##November 2022####1,250####6.21%######1,250####6.21% $3,250, 2.95%, due April 2030##April 2020####3,250####3.00%######3,250####3.00% $750, 4.65%, due May 2030##February 2023####750####4.75%######750####4.75% $500, 3.25%, due May 2030##May 2015####500####3.35%######500####3.35% $3,250, 2.875%, due March 2031##March 2021####3,250####2.92%######3,250####2.92% $2,250, 6.25%, due November 2032##November 2022####2,250####6.32%######2,250####6.32% $1,500, 4.90%, due February 2033##February 2023####1,500####4.95%######1,500####4.95% $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####4.00% $1,250, 3.85%, due July 2036##July 2016####1,250####3.89%######1,250####3.89% $1,750, 3.80%, due November 2037##November 2017####1,750####3.86%######1,750####3.86% $1,250, 6.50%, due April 2038##April 2008####1,250####6.51%######1,250####6.51% $1,250, 6.125%, due July 2039##July 2009####1,250####6.17%######1,250####6.17% $3,000, 3.60%, due April 2040##April 2020####3,000####3.64%######3,000####3.64% $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####3.72% $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####4.20% $3,000, 4.00%, due July 2046##July 2016####3,000####4.03%######3,000####4.03% $2,250, 4.00%, due November 2047##November 2017####2,250####4.05%######2,250####4.05% $4,500, 3.60%, due April 2050##April 2020####4,500####3.64%######4,500####3.64% $3,250, 3.95%, due March 2051##March 2021####3,250####3.98%######3,250####3.98% $2,500, 6.90%, due November 2052##November 2022####2,500####6.94%######2,500####6.94% $2,250, 5.55%, due February 2053##February 2023####2,250####5.62%######2,250####5.62% $1,250, 4.375%, due May 2055##May 2015####1,250####4.44%######1,250####4.44% $3,500, 3.85%, due April 2060##April 2020####3,500####3.89%######3,500####3.89% $1,500, 4.10%, due March 2061##March 2021####1,500####4.13%######1,500####4.13% Term loan credit agreement and other borrowings:#################### $790, SOFR plus 1.70%, due August 2025(3)##August 2022####790####6.99%######790####5.68% $170, SOFR plus 1.70%, due August 2025##November 2022####170####6.98%######170####6.16% $3,570, SOFR plus 1.70%, due August 2027(3)##August 2022####3,570####6.99%######3,570####5.68% $1,100, SOFR plus 1.70%, due August 2027##November 2022####1,100####6.98%######1,100####6.16% Commercial paper notes######401####5.43%######563####4.89% Other borrowings due August 2025##November 2016####113####3.53%######113####3.53% Total senior notes and other borrowings####$##87,202########$##90,856#### Unamortized discount/issuance costs######(302##)########(323##)## Hedge accounting fair value adjustments(2)######(31##)########(52##)## Total notes payable and other borrowings####$##86,869########$##90,481####


ORCL Notes payable and other borrowings, non-current####$##76,264########$##86,420####

(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, 2024 and May 31, 2023, respectively. The July 2025 Notes are registered and trade on the New York Stock Exchange.


ORCL Index to Financial Statements

(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, 2024 and 2023 after consideration of the cross-currency interest rate swap agreements were 8.76% and 8.36%, respectively, for the July 2025 Notes. Refer to Note 1 for a description of our accounting for fair value hedges.


ORCL Index to Financial Statements

(3)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. The effective interest rates after consideration of the interest rate swap agreements were 4.74% for each of fiscal 2024 and 2023. Refer to Note 1 for a description of our accounting for cash flow hedges.


ORCL Index to Financial Statements

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, 2024 were as follows (in millions): Fiscal 2025##$##10,612 Fiscal 2026####5,016 Fiscal 2027####5,743 Fiscal 2028####10,145 Fiscal 2029####— Thereafter####55,750 Total##$##87,266


ORCL 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.


ORCL Senior Notes

The senior notes rank pari passu with all existing and future notes issued 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 each as defined and described further below. All existing and future liabilities of the subsidiaries of Oracle Corporation are or will be effectively senior to the senior notes and Commercial Paper Notes (defined below), borrowings under the Term Loan Credit Agreement and any future borrowings pursuant to the Revolving Credit Agreement. We were in compliance with all debt-related covenants at May 31, 2024.


ORCL 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.


ORCL 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


ORCL Index to Financial Statements

the Revolving Credit Agreement. As of May 31, 2024 and 2023, we did not have any outstanding borrowing under the Revolving Credit Agreement.


ORCL Term Loan Credit Agreements

During fiscal 2023, pursuant to a term loan credit agreement (Term Loan Credit Agreement) providing for an aggregate term loan commitment of $5.6 billion, we borrowed $4.7 billion under term loan 1 facility (Term Loan 1 Facility) and $960 million under term loan 2 facility (Term Loan 2 Facility and, together with the Term Loan 1 Facility, the Term Loan Facilities). 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.


ORCL Term Loan Credit Agreements

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.


ORCL Term Loan Credit Agreements

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.


ORCL Term Loan Credit Agreements

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.


ORCL Term Loan Credit Agreements

We were in compliance with all covenants under the Term Loan Credit Agreement as of May 31, 2024.