Correspondence 0001193125-23-237790 from ORACLE CORP (ORCL) (CIK 0001341439) (ORCL)
ORACLE CORP (ORCL) (CIK 0001341439)
Date: Sept. 19, 2023 · CIK: 0001341439 · Accession: 0001193125-23-237790
AI Filing Summary & Sentiment
File numbers found in text: 001-35992
Letter
VIA EDGAR Division of Corporation Finance Office of Technology RE: Oracle Corporation Form 10-K for Fiscal Year Ended May 31, 2023 Filed June 20, 2023 File No. 001-35992
Dear Ms. Gibbs-Tabler and Ms. Angelini:
This letter responds to the comments set forth in the letter from the Staff of the Division of Corporation Finance, Office of Technology (the “Staff”) of the Securities and Exchange Commission (the “SEC”) to Safra Catz, Chief Executive Officer of Oracle Corporation (the “Company”) dated August 21, 2023, regarding the Company’s Annual Report on Form 10-K for the fiscal year ended May 31, 2023 (the “2023 Form 10-K”). In this letter, we have recited the comments from the Staff in italicized type and have followed each comment with the Company’s response.
********************************************
Form 10-K filed June 20, 2023
General
1. We note that you provided more expansive disclosure in your Social Impact Report and Social Impact Datasheet than you provided in your SEC filings. Please advise us what consideration you gave to providing the same type of climate-related disclosure in your SEC filings as you provided in these documents.
The Company acknowledges the Staff’s comment and respectfully advises the Staff that its Social Impact Report and Social Impact Datasheet (together, the “Social Impact Disclosures”) address sustainability reporting practices, speak to a wide range of stakeholder interests and provide disclosures beyond those that the Company, in consultation with SEC rules and regulations and other applicable law, considers material for investors in the context of an Annual Report on Form 10-K. The Social Impact Disclosures provide a convenient means of communicating social impact-related information, including climate-related disclosure, that may be of interest to a wide range of stakeholders, including customers, employees, suppliers, business partners and members of the communities in which the Company operates. The Company takes sustainability and climate change-related matters seriously and has voluntarily provided this information to its stakeholders.
Page
However, the information included in the Social Impact Disclosures is substantially more detailed than the information required to be disclosed under existing SEC rules and regulations, and the Company believes such information is not material under the standards applicable to its filings with the SEC.
The Company carefully considers the requirements applicable to each filing under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the rules and regulations promulgated thereunder (the “Applicable Disclosure Requirements”), as well as SEC guidance regarding those requirements, including the SEC’s Guidance Regarding Disclosure Related to Climate Change (SEC Rel. 33-9106, Feb. 2, 2010). In connection with the preparation of the Company’s Annual Reports on Form 10-K, including the 2023 Form 10-K, Quarterly Reports on Form 10-Q and annual proxy statements, including the 2022 Definitive Proxy Statement on Schedule 14A (the “2022 Proxy Statement”) and in consideration of the Applicable Disclosure Requirements, the Company engages in a number of processes to surface potentially material developments, events, trends and risks for consideration for disclosure (collectively, the “Disclosure Reviews”). Among other things, members of the Company’s legal, finance, regulatory, compliance, investor relations, tax, treasury and sustainability teams review portions of the Company’s prior disclosures; propose potential new disclosures as appropriate; meet with each other and with other key business leaders to discuss potentially material developments, events, trends and risks; and seek input from other areas of the business as necessary. In addition, the Company maintains a standing Disclosure Committee, which includes the Company’s Chief Accounting Officer, Chief Legal Officer and other senior business leaders. The Disclosure Committee generally meets on a quarterly basis to review previous and proposed new disclosures and to discuss any changes that may be appropriate as a result of potentially material events, trends and risks identified during the Disclosure Review process. In determining the materiality of information to be included in its disclosures, the Company refers to the standard of materiality set forth in Basic v. Levinson, 485 U.S. 224 (1988).
In connection with its Disclosure Reviews, the Company regularly considers climate-related matters for inclusion in its filings, including in consideration of the requirements of Items 101, 105 and 303 of Regulation S-K. During the Disclosure Review process in connection with the preparation of the 2023 Form 10-K and the 2022 Proxy Statement, the Company considered whether it was required under the Applicable Disclosure Requirements to provide any of the extensive climate-related information that it has included in previous iterations of the Social Impact Disclosures. The Company determined that such information was not required to be included in the 2023 Form 10-K under the Applicable Disclosure Requirements or otherwise material information necessary in order to make the statements in the 2023 Form 10-K or the 2022 Proxy Statement, in light of the circumstances under which they were made, not misleading.
On page 28 of the Company’s 2023 Form 10-K, the Company included disclosure regarding environmental and related laws and regulations that could result in significant liabilities and costs. The Company disclosed that it has an Environmental Steering Committee comprised of senior management that oversees sustainability strategy, including climate risk mitigation, and provided additional information about the committee. The Company also disclosed that failure to implement and oversee controls to comply with mandatory environmental, social and governance-related disclosures may result in liability or harm to the Company’s reputation.
The Company has also evaluated the potential impact of failing to meet the standards and goals that are voluntarily set forth in its Social Impact Report. The Company determined that stockholders could potentially find such failure to be material and has timely disclosed this risk on page 28 of the 2023 Form 10-K, which states that the Company’s failure to meet these standards and goals may “potentially harm [the Company’s] reputation and brand.”
The Company therefore respectfully submits that the type of detailed climate-related disclosure in the Social Impact Disclosures was not required under the Applicable Disclosure Requirements to be included in the 2023 Form 10-K or any other required SEC filings. With respect to future filings, the Company will continue to monitor and evaluate whether inclusion of any specific pending or existing climate-related matters may be warranted in response to the Applicable Disclosure Requirements in accordance with the processes described above.
Page
Management’s Discussion and Analysis of Financial Condition and Results of Operations, page 35
2. To the extent material, discuss the indirect consequences of climate-related regulation or business trends, such as the following:
•
decreased demand for products or services that produce significant greenhouse gas emissions or are related to carbon-based energy sources;
•
increased demand for products or services that result in lower emissions than competing products;
•
increased competition to develop innovative new products that result in lower emissions;
•
increased demand for generation and transmission of energy from alternative energy sources; and
•
any anticipated reputational risks resulting from operations or products that produce material greenhouse gas emissions.
The Company acknowledges the Staff’s comment and respectfully advises the Staff that it has not identified any material indirect consequences of climate-related regulation or business trends that would be required to be disclosed under the Applicable Disclosure Requirements or would otherwise constitute material information necessary in order to make the statements in the 2023 Form 10-K, in light of the circumstances under which they were made, not misleading. As an initial matter, the Company notes that it is in the business of providing products and services that address enterprise information technology (“IT”) environments. In 2023, the Company generated 83% of its revenue from its cloud and license offerings, 6% from its enterprise hardware products and hardware-related software products and 11% from its consulting services and advanced customer services. The Company’s thousands of global customers vary widely by size and geography, and the trends and factors affecting demand for its offerings vary by region and customer.
The Company’s products and services do not directly produce greenhouse gases and only indirectly contribute to greenhouse gas emissions through the energy used to power data centers to deliver the Company’s cloud and license offerings, to manufacture and distribute the Company’ hardware products and to power offices for the Company’s staff. Although the Company has not seen, to date, any material indirect consequences of climate-related regulation or business trends, the Company is nevertheless committed to reducing the environmental footprint of its operations, including through the use of renewable energy sources and circular economy hardware design principles. For example, in calendar year 2022 the Company’s cloud services used 81% renewable energy, and the Company has a goal to reach 100% renewable energy across its commercial portfolio by the end of calendar year 2025. The Company believes its offerings could also support its customers’ achievement of environmental sustainability goals, both through the transition from on-premises infrastructure to the cloud, which is more efficient and can help reduce greenhouse gas emissions, and through various cloud solutions which allow customers to design environmentally friendly products, source materials responsibly, transport goods in more sustainable ways, manage risks and analyze and report on environmental impacts of their business operations.
Set forth below are the Company’s detailed responses to each of the items referenced in the Staff’s comment.
•
decreased demand for products or services that produce significant greenhouse gas emissions or are related to carbon-based energy sources
As described above, the Company’s products and services do not directly produce greenhouse gases and only indirectly contribute to greenhouse gas emissions through the energy used to power data centers to deliver the Company’s cloud and license offerings, to manufacture and distribute the Company’s hardware products and to power offices for the Company’s staff. In each of its businesses, the Company believes that its customers
Page
make purchasing decisions based on a variety of reasons, including, among others, cost, performance, scalability, reliability, security, functionality, efficiency, ease of use, speed to production and quality of technical support. To date, the Company does not believe that it has experienced decreased demand for products or services that produce significant greenhouse gas emissions or are related to carbon-based energy sources, and the Company has not identified such emissions in relation to carbon-based energy sources as a driver of demand for its products or services. The Company is not aware of energy efficiency being a primary consideration for its customers, although it may be a related consideration in some cases, and the Company is not able to isolate the extent to which this or any other single factor affects customers’ decisions as to whether or not to utilize those offerings.
•
increased demand for products or services that result in lower emissions than competing products;
As noted above, the Company believes that its customers purchase its products and services for a wide variety of reasons. Although the energy efficiency of the Company’s cloud services is one factor that customers may consider when determining to utilize the Company’s cloud and license offerings, the Company is not able to isolate the extent to which this or any other single factor affects customers’ decisions as to whether or not to utilize those offerings.
•
increased competition to develop innovative new products that result in lower emissions
The Company is not aware of any increased competition to develop new products that result in lower emissions. As noted above, the Company believes that its customers purchase its products and services for a wide variety of reasons. The Company is not aware of lower emissions being a primary consideration for its customers, although it may be a related consideration in some cases. Improvements in energy efficiency and cost to operate, which are factors on which the Company does believe it competes for customers, may have the added benefit of resulting in lower emissions, but the Company does not believe that climate change-related regulations or business trends drive such competition.
•
increased demand for generation and transmission of energy from alternative energy sources
The Company is not aware of any increased demand for generation and transmission of energy from alternative energy sources as it relates to the Company’s products or services. However, as noted above, the Company’s cloud offerings used 81% renewable energy in calendar year 2022, and the Company has a goal to reach 100% renewable energy across its commercial portfolio by the end of calendar year 2025. Consequently, the Company does not expect to experience any material impacts from increased demand for generation and transmission of energy from alternative energy sources with respect to its operations.
•
any anticipated reputational risks resulting from operations or products that produce material greenhouse gas emissions.
As noted above, the Company does not believe its products or services directly produce significant greenhouse gas emissions, and it has taken steps to generally reduce its overall environmental footprint, which it believes have yielded reputational benefits. Consequently, the Company does not anticipate any material reputational risks resulting from its operations or products that produce greenhouse gas emissions.
For the reasons discussed above, the Company has not identified any material indirect consequences of climate-related regulation or business trends. Therefore, the Company does not believe any related disclosure is required under the Applicable Disclosure Standards or is otherwise necessary in order to make the statements in the 2023 Form 10-K, in light of the circumstances under which they were made, not misleading. The Company will continue to consider the material indirect consequences of climate-related regulation or business trends in connection with future Disclosure Reviews, and if they are considered reasonably likely to have a material effect on its business, financial condition, liquidity or results of operations, the Company will include disclosure in its future Exchange Act filings as appropriate.
Page
3. We note on page 31 of the Form 10-K that your critical business operations are concentrated in a few geographic areas and that major natural disasters or the effects of climate change, such as increased storm severity or drought, are risks to your business. Please discuss the physical effects of climate change on your operations and results. This disclosure may include the following:
•
severity
Show Raw Text
CORRESP 1 filename1.htm CORRESP Oracle Corporation 2300 Oracle Way phone (737) 867-1000 Austin, Texas 78741 VIA EDGAR U.S. Securities and Exchange Commission Division of Corporation Finance Office of Technology 100 F Street, N.E. Washington, D.C. 20549 Attn: Charli Gibbs-Tabler and Jennifer Angelini September 19, 2023 RE: Oracle Corporation Form 10-K for Fiscal Year Ended May 31, 2023 Filed June 20, 2023 File No. 001-35992 Dear Ms. Gibbs-Tabler and Ms. Angelini: This letter responds to the comments set forth in the letter from the Staff of the Division of Corporation Finance, Office of Technology (the “Staff”) of the Securities and Exchange Commission (the “SEC”) to Safra Catz, Chief Executive Officer of Oracle Corporation (the “Company”) dated August 21, 2023, regarding the Company’s Annual Report on Form 10-K for the fiscal year ended May 31, 2023 (the “2023 Form 10-K”). In this letter, we have recited the comments from the Staff in italicized type and have followed each comment with the Company’s response. ******************************************** Form 10-K filed June 20, 2023 General 1. We note that you provided more expansive disclosure in your Social Impact Report and Social Impact Datasheet than you provided in your SEC filings. Please advise us what consideration you gave to providing the same type of climate-related disclosure in your SEC filings as you provided in these documents. The Company acknowledges the Staff’s comment and respectfully advises the Staff that its Social Impact Report and Social Impact Datasheet (together, the “Social Impact Disclosures”) address sustainability reporting practices, speak to a wide range of stakeholder interests and provide disclosures beyond those that the Company, in consultation with SEC rules and regulations and other applicable law, considers material for investors in the context of an Annual Report on Form 10-K. The Social Impact Disclosures provide a convenient means of communicating social impact-related information, including climate-related disclosure, that may be of interest to a wide range of stakeholders, including customers, employees, suppliers, business partners and members of the communities in which the Company operates. The Company takes sustainability and climate change-related matters seriously and has voluntarily provided this information to its stakeholders. Page 2 However, the information included in the Social Impact Disclosures is substantially more detailed than the information required to be disclosed under existing SEC rules and regulations, and the Company believes such information is not material under the standards applicable to its filings with the SEC. The Company carefully considers the requirements applicable to each filing under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the rules and regulations promulgated thereunder (the “Applicable Disclosure Requirements”), as well as SEC guidance regarding those requirements, including the SEC’s Guidance Regarding Disclosure Related to Climate Change (SEC Rel. 33-9106, Feb. 2, 2010). In connection with the preparation of the Company’s Annual Reports on Form 10-K, including the 2023 Form 10-K, Quarterly Reports on Form 10-Q and annual proxy statements, including the 2022 Definitive Proxy Statement on Schedule 14A (the “2022 Proxy Statement”) and in consideration of the Applicable Disclosure Requirements, the Company engages in a number of processes to surface potentially material developments, events, trends and risks for consideration for disclosure (collectively, the “Disclosure Reviews”). Among other things, members of the Company’s legal, finance, regulatory, compliance, investor relations, tax, treasury and sustainability teams review portions of the Company’s prior disclosures; propose potential new disclosures as appropriate; meet with each other and with other key business leaders to discuss potentially material developments, events, trends and risks; and seek input from other areas of the business as necessary. In addition, the Company maintains a standing Disclosure Committee, which includes the Company’s Chief Accounting Officer, Chief Legal Officer and other senior business leaders. The Disclosure Committee generally meets on a quarterly basis to review previous and proposed new disclosures and to discuss any changes that may be appropriate as a result of potentially material events, trends and risks identified during the Disclosure Review process. In determining the materiality of information to be included in its disclosures, the Company refers to the standard of materiality set forth in Basic v. Levinson, 485 U.S. 224 (1988). In connection with its Disclosure Reviews, the Company regularly considers climate-related matters for inclusion in its filings, including in consideration of the requirements of Items 101, 105 and 303 of Regulation S-K. During the Disclosure Review process in connection with the preparation of the 2023 Form 10-K and the 2022 Proxy Statement, the Company considered whether it was required under the Applicable Disclosure Requirements to provide any of the extensive climate-related information that it has included in previous iterations of the Social Impact Disclosures. The Company determined that such information was not required to be included in the 2023 Form 10-K under the Applicable Disclosure Requirements or otherwise material information necessary in order to make the statements in the 2023 Form 10-K or the 2022 Proxy Statement, in light of the circumstances under which they were made, not misleading. On page 28 of the Company’s 2023 Form 10-K, the Company included disclosure regarding environmental and related laws and regulations that could result in significant liabilities and costs. The Company disclosed that it has an Environmental Steering Committee comprised of senior management that oversees sustainability strategy, including climate risk mitigation, and provided additional information about the committee. The Company also disclosed that failure to implement and oversee controls to comply with mandatory environmental, social and governance-related disclosures may result in liability or harm to the Company’s reputation. The Company has also evaluated the potential impact of failing to meet the standards and goals that are voluntarily set forth in its Social Impact Report. The Company determined that stockholders could potentially find such failure to be material and has timely disclosed this risk on page 28 of the 2023 Form 10-K, which states that the Company’s failure to meet these standards and goals may “potentially harm [the Company’s] reputation and brand.” The Company therefore respectfully submits that the type of detailed climate-related disclosure in the Social Impact Disclosures was not required under the Applicable Disclosure Requirements to be included in the 2023 Form 10-K or any other required SEC filings. With respect to future filings, the Company will continue to monitor and evaluate whether inclusion of any specific pending or existing climate-related matters may be warranted in response to the Applicable Disclosure Requirements in accordance with the processes described above. Page 3 Management’s Discussion and Analysis of Financial Condition and Results of Operations, page 35 2. To the extent material, discuss the indirect consequences of climate-related regulation or business trends, such as the following: • decreased demand for products or services that produce significant greenhouse gas emissions or are related to carbon-based energy sources; • increased demand for products or services that result in lower emissions than competing products; • increased competition to develop innovative new products that result in lower emissions; • increased demand for generation and transmission of energy from alternative energy sources; and • any anticipated reputational risks resulting from operations or products that produce material greenhouse gas emissions. The Company acknowledges the Staff’s comment and respectfully advises the Staff that it has not identified any material indirect consequences of climate-related regulation or business trends that would be required to be disclosed under the Applicable Disclosure Requirements or would otherwise constitute material information necessary in order to make the statements in the 2023 Form 10-K, in light of the circumstances under which they were made, not misleading. As an initial matter, the Company notes that it is in the business of providing products and services that address enterprise information technology (“IT”) environments. In 2023, the Company generated 83% of its revenue from its cloud and license offerings, 6% from its enterprise hardware products and hardware-related software products and 11% from its consulting services and advanced customer services. The Company’s thousands of global customers vary widely by size and geography, and the trends and factors affecting demand for its offerings vary by region and customer. The Company’s products and services do not directly produce greenhouse gases and only indirectly contribute to greenhouse gas emissions through the energy used to power data centers to deliver the Company’s cloud and license offerings, to manufacture and distribute the Company’ hardware products and to power offices for the Company’s staff. Although the Company has not seen, to date, any material indirect consequences of climate-related regulation or business trends, the Company is nevertheless committed to reducing the environmental footprint of its operations, including through the use of renewable energy sources and circular economy hardware design principles. For example, in calendar year 2022 the Company’s cloud services used 81% renewable energy, and the Company has a goal to reach 100% renewable energy across its commercial portfolio by the end of calendar year 2025. The Company believes its offerings could also support its customers’ achievement of environmental sustainability goals, both through the transition from on-premises infrastructure to the cloud, which is more efficient and can help reduce greenhouse gas emissions, and through various cloud solutions which allow customers to design environmentally friendly products, source materials responsibly, transport goods in more sustainable ways, manage risks and analyze and report on environmental impacts of their business operations. Set forth below are the Company’s detailed responses to each of the items referenced in the Staff’s comment. • decreased demand for products or services that produce significant greenhouse gas emissions or are related to carbon-based energy sources As described above, the Company’s products and services do not directly produce greenhouse gases and only indirectly contribute to greenhouse gas emissions through the energy used to power data centers to deliver the Company’s cloud and license offerings, to manufacture and distribute the Company’s hardware products and to power offices for the Company’s staff. In each of its businesses, the Company believes that its customers Page 4 make purchasing decisions based on a variety of reasons, including, among others, cost, performance, scalability, reliability, security, functionality, efficiency, ease of use, speed to production and quality of technical support. To date, the Company does not believe that it has experienced decreased demand for products or services that produce significant greenhouse gas emissions or are related to carbon-based energy sources, and the Company has not identified such emissions in relation to carbon-based energy sources as a driver of demand for its products or services. The Company is not aware of energy efficiency being a primary consideration for its customers, although it may be a related consideration in some cases, and the Company is not able to isolate the extent to which this or any other single factor affects customers’ decisions as to whether or not to utilize those offerings. • increased demand for products or services that result in lower emissions than competing products; As noted above, the Company believes that its customers purchase its products and services for a wide variety of reasons. Although the energy efficiency of the Company’s cloud services is one factor that customers may consider when determining to utilize the Company’s cloud and license offerings, the Company is not able to isolate the extent to which this or any other single factor affects customers’ decisions as to whether or not to utilize those offerings. • increased competition to develop innovative new products that result in lower emissions The Company is not aware of any increased competition to develop new products that result in lower emissions. As noted above, the Company believes that its customers purchase its products and services for a wide variety of reasons. The Company is not aware of lower emissions being a primary consideration for its customers, although it may be a related consideration in some cases. Improvements in energy efficiency and cost to operate, which are factors on which the Company does believe it competes for customers, may have the added benefit of resulting in lower emissions, but the Company does not believe that climate change-related regulations or business trends drive such competition. • increased demand for generation and transmission of energy from alternative energy sources The Company is not aware of any increased demand for generation and transmission of energy from alternative energy sources as it relates to the Company’s products or services. However, as noted above, the Company’s cloud offerings used 81% renewable energy in calendar year 2022, and the Company has a goal to reach 100% renewable energy across its commercial portfolio by the end of calendar year 2025. Consequently, the Company does not expect to experience any material impacts from increased demand for generation and transmission of energy from alternative energy sources with respect to its operations. • any anticipated reputational risks resulting from operations or products that produce material greenhouse gas emissions. As noted above, the Company does not believe its products or services directly produce significant greenhouse gas emissions, and it has taken steps to generally reduce its overall environmental footprint, which it believes have yielded reputational benefits. Consequently, the Company does not anticipate any material reputational risks resulting from its operations or products that produce greenhouse gas emissions. For the reasons discussed above, the Company has not identified any material indirect consequences of climate-related regulation or business trends. Therefore, the Company does not believe any related disclosure is required under the Applicable Disclosure Standards or is otherwise necessary in order to make the statements in the 2023 Form 10-K, in light of the circumstances under which they were made, not misleading. The Company will continue to consider the material indirect consequences of climate-related regulation or business trends in connection with future Disclosure Reviews, and if they are considered reasonably likely to have a material effect on its business, financial condition, liquidity or results of operations, the Company will include disclosure in its future Exchange Act filings as appropriate. Page 5 3. We note on page 31 of the Form 10-K that your critical business operations are concentrated in a few geographic areas and that major natural disasters or the effects of climate change, such as increased storm severity or drought, are risks to your business. Please discuss the physical effects of climate change on your operations and results. This disclosure may include the following: • severity