|
5. |
RESTRUCTURING ACTIVITIES |
Fiscal 2019 Oracle Restructuring Plan
During fiscal 2019, our management approved, committed to and initiated plans to restructure and further improve efficiencies in our operations due to our acquisitions and certain other operational activities (2019 Restructuring Plan). In the fourth quarter of fiscal 2019, our management supplemented the 2019 Restructuring Plan to reflect additional actions that we expect to take. The total estimated restructuring costs associated with the 2019 Restructuring Plan are up to $626 million and will be recorded to the restructuring expense line item within our condensed consolidated statements of operations as they are incurred. We recorded $125 million of restructuring expenses in connection with the 2019 Restructuring Plan in the first half of fiscal 2020 and we expect to incur the majority of the estimated remaining $25 million through the end of fiscal 2020. Any changes to the estimates of executing the 2019 Restructuring Plan will be reflected in our future results of operations.
Summary of All Plans
|
|
|
Accrued
May 31,
2019(2) |
|
|
Six Months Ended November 30, 2019 |
|
|
Accrued
November 30,
2019(2) |
|
|
Total
Costs
Accrued
to Date |
|
|
Total
Expected
Program
Costs |
|
|
(in millions) |
|
|
|
Initial
Costs(3) |
|
|
Adj. to
Cost(4) |
|
|
Cash
Payments |
|
|
Others(5) |
|
|
|
|
|
|
|
|
2019 Restructuring Plan(1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cloud and license |
|
$ |
72 |
|
|
$ |
62 |
|
|
$ |
(8 |
) |
|
$ |
(78 |
) |
|
$ |
— |
|
|
$ |
48 |
|
|
$ |
241 |
|
|
$ |
251 |
|
|
Hardware |
|
|
18 |
|
|
|
18 |
|
|
|
1 |
|
|
|
(22 |
) |
|
|
— |
|
|
|
15 |
|
|
|
72 |
|
|
|
77 |
|
|
Services |
|
|
15 |
|
|
|
15 |
|
|
|
(1 |
) |
|
|
(16 |
) |
|
|
— |
|
|
|
13 |
|
|
|
56 |
|
|
|
59 |
|
|
Other(6) |
|
|
108 |
|
|
|
37 |
|
|
|
1 |
|
|
|
(80 |
) |
|
|
(44 |
) |
|
|
22 |
|
|
|
232 |
|
|
|
239 |
|
|
Total 2019 Restructuring Plan |
|
$ |
213 |
|
|
$ |
132 |
|
|
$ |
(7 |
) |
|
$ |
(196 |
) |
|
$ |
(44 |
) |
|
$ |
98 |
|
|
$ |
601 |
|
|
$ |
626 |
|
|
Total other restructuring plans(7) |
|
$ |
49 |
|
|
$ |
— |
|
|
$ |
(5 |
) |
|
$ |
(6 |
) |
|
$ |
(16 |
) |
|
$ |
22 |
|
|
|
|
|
|
|
|
|
|
Total restructuring plans |
|
$ |
262 |
|
|
$ |
132 |
|
|
$ |
(12 |
) |
|
$ |
(202 |
) |
|
$ |
(60 |
) |
|
$ |
120 |
|
|
|
|
|
|
|
|
|
|
(1) |
Restructuring costs recorded for individual line items primarily related to employee severance costs. |
|
(2) |
The balances at November 30, 2019 and May 31, 2019 included $119 million and $239 million, respectively, recorded in other current liabilities, and $1 million and $23 million, respectively, recorded in other non-current liabilities. |
|
(3) |
Costs recorded for the respective restructuring plans during the current period presented. |
|
(4) |
All plan adjustments were changes in estimates whereby increases and decreases in costs were generally recorded to operating expenses in the period of adjustments. |
|
(5) |
Represents foreign currency translation adjustments and certain other adjustments including those related to our adoption of Topic 842 as of June 1, 2019. |
|
(6) |
Represents employee related severance costs for functions that are not included within our operating segments and certain other restructuring costs. |
|
(7) |
Other restructuring plans presented in the table above included condensed information for other Oracle based plans and other plans associated with certain of our acquisitions whereby we continued to make cash outlays to settle obligations under these plans during the period presented but for which the periodic impact to our condensed consolidated statements of operations was not significant. |
|