| Summary of Businesses and Operating Segments Results |
| | Year Ended May 31, | (in millions) | | 2016 | | 2015 | | 2014 | Cloud software and on-premise software: | | | | | | | | | | Revenues(1) | | $ | 9,488 | | $ | 10,025 | | $ | 10,542 | Cloud software as a service and platform as a service expenses | | | 1,116 | | | 742 | | | 437 | Sales and distribution expenses | | | 6,010 | | | 5,812 | | | 5,666 | Margin(2) | | $ | 2,362 | | $ | 3,471 | | $ | 4,439 | Cloud infrastructure as a service: | | | | | | | | | | Revenues | | $ | 646 | | $ | 608 | | $ | 456 | Cloud infrastructure as a service expenses | | | 352 | | | 329 | | | 304 | Sales and distribution expenses | | | 74 | | | 89 | | | 61 | Margin(2) | | $ | 220 | | $ | 190 | | $ | 91 | Software license updates and product support: | | | | | | | | | | Revenues(1) | | $ | 18,863 | | $ | 18,858 | | $ | 18,209 | Software license updates and product support expenses | | | 1,077 | | | 1,130 | | | 1,111 | Margin(2) | | $ | 17,786 | | $ | 17,728 | | $ | 17,098 | Total cloud and on-premise software business: | | | | | | | | | | Revenues(1) | | $ | 28,997 | | $ | 29,491 | | $ | 29,207 | Expenses | | | 8,629 | | | 8,102 | | | 7,579 | Margin(2) | | $ | 20,368 | | $ | 21,389 | | $ | 21,628 | Hardware products: | | | | | | | | | | Revenues | | $ | 2,471 | | $ | 2,825 | | $ | 2,976 | Hardware products expenses | | | 1,364 | | | 1,465 | | | 1,516 | Sales and distribution expenses | | | 850 | | | 864 | | | 940 | Margin(2) | | $ | 257 | | $ | 496 | | $ | 520 | Hardware support: | | | | | | | | | | Revenues(1) | | $ | 2,198 | | $ | 2,384 | | $ | 2,407 | Hardware support expenses | | | 665 | | | 783 | | | 802 | Margin(2) | | $ | 1,533 | | $ | 1,601 | | $ | 1,605 | Total hardware business: | | | | | | | | | | Revenues(1) | | $ | 4,669 | | $ | 5,209 | | $ | 5,383 | Expenses | | | 2,879 | | | 3,112 | | | 3,258 | Margin(2) | | $ | 1,790 | | $ | 2,097 | | $ | 2,125 | Total services business: | | | | | | | | | | Revenues(1) | | $ | 3,391 | | $ | 3,553 | | $ | 3,716 | Services expenses | | | 2,645 | | | 2,818 | | | 2,822 | Margin(2) | | $ | 746 | | $ | 735 | | $ | 894 | Totals: | | | | | | | | | | Revenues(1) | $ | 37,057 | | $ | 38,253 | | $ | 38,306 | Expenses | | $ | 14,153 | | | 14,032 | | | 13,659 | Margin(2) | $ | 22,904 | | $ | 24,221 | | $ | 24,647 | | | | | | | | | | | | | | | | | | | | |
__________ (1) | | Cloud software and on-premise software, software license updates and product support and hardware support revenues for management reporting included revenues related to cloud SaaS and PaaS, software support and hardware support contracts that would have otherwise been recorded by the acquired businesses as independent entities but were not recognized in our consolidated statements of operations for the periods presented. See Note 10 for an explanation of these adjustments and the table below for a reconciliation of our total operating segment revenues to our total revenues as reported in our consolidated statements of operations. Our cloud software and on-premise software and services revenues for management reporting also differ from amounts reported per our consolidated statements of operations for the periods presented due to certain insignificant reclassifications between these lines for management reporting purposes. | | | | (2) | | The margins reported reflect only the direct controllable costs of each line of business and do not include allocations of product development, marketing and partner programs, and corporate, general and administrative and IT expenses. Additionally, the margins reported do not reflect amortization of intangible assets, acquisition related and other expenses, restructuring expenses, stock-based compensation, interest expense or certain other income (expense), net. | | | |
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| Reconciliation of Total Operating Segment Margin to Income before Provision for Income Taxes |
Total margin for operating segments | | $ | 22,904 | | $ | 24,221 | | $ | 24,647 | Cloud software as a service and platform as a service revenues (1) | | | (7) | | | (12) | | | (17) | Software license updates and product support revenues(1) | | | (2) | | | (11) | | | (3) | Hardware support revenues(1) | | | (1) | | | (4) | | | (11) | Product development | | | (4,978) | | | (4,812) | | | (4,590) | Marketing and partner program expenses | | | (505) | | | (520) | | | (564) | Corporate, general and administrative and information technology expenses | | | (1,635) | | | (1,496) | | | (1,384) | Amortization of intangible assets | | | (1,638) | | | (2,149) | | | (2,300) | Acquisition related and other | | | (42) | | | (211) | | | (41) | Restructuring | | | (458) | | | (207) | | | (183) | Stock-based compensation | | | (1,034) | | | (928) | | | (795) | Interest expense | | | (1,467) | | | (1,143) | | | (914) | Non-operating income (expense), net | | | 305 | | | 106 | | | (141) | Income before provision for income taxes | | $ | 11,442 | | $ | 12,834 | | $ | 13,704 | | | | | | | | | | |
__________ (1) | Cloud SaaS and PaaS revenues, software license updates and product support revenues and hardware support revenues for management reporting included revenues that would have otherwise been recorded by our acquired businesses as independent entities but were not recognized in our consolidated statements of operations for the periods presented due to business combination accounting requirements. | | |
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| Geographic Information |
| | As of and for the Year Ended May 31, | | | 2016 | | 2015 | | 2014 | (in millions) | | Revenues | | Long Lived Assets(1) | | Revenues | | Long Lived Assets(1) | | Revenues | | Long Lived Assets(1) | United States | | $ | 17,264 | | $ | 3,646 | | $ | 17,325 | | $ | 3,341 | | $ | 16,809 | | $ | 2,993 | United Kingdom | | | 2,349 | | | 334 | | | 2,388 | | | 309 | | | 2,309 | | | 236 | Japan | | | 1,465 | | | 375 | | | 1,433 | | | 338 | | | 1,558 | | | 414 | Germany | | | 1,438 | | | 40 | | | 1,466 | | | 33 | | | 1,483 | | | 35 | Canada | | | 1,096 | | | 44 | | | 1,286 | | | 58 | | | 1,190 | | | 31 | France | | | 1,039 | | | 26 | | | 1,044 | | | 33 | | | 1,148 | | | 28 | Other countries | | | 12,396 | | | 963 | | | 13,284 | | | 1,007 | | | 13,778 | | | 879 | Total | | $ | 37,047 | | $ | 5,428 | | $ | 38,226 | | $ | 5,119 | | $ | 38,275 | | $ | 4,616 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
__________ (1) | Long-lived assets exclude goodwill, intangible assets, equity investments and deferred taxes, which are not allocated to specific geographic locations as it is impracticable to do so. | | |
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