(1) Excluding stock-based compensation
(2) Included as a component of 'Amortization of Intangible Assets' in our
condensed consolidated statements of operations
Excluding the impact of unfavorable currency rate fluctuations of 2 percentage points, hardware systems support revenues increased in the first quarter of fiscal 2014 primarily due to incremental revenues from our acquisitions, partially offset by reductions in sales volumes of certain of our legacy hardware systems product lines for which we offer hardware systems support.
In reported currency, hardware systems support revenues in the first quarter of fiscal 2014 included incremental revenues of
$33 millionfrom our recently acquired companies. As a result of our acquisitions, we recorded adjustments to reduce assumed hardware systems support obligations to their estimated fair values at the acquisition dates. Due to our application of business combination accounting rules, hardware systems support revenues related to hardware systems support contracts in the amounts of $5 millionand $4 millionthat would have been otherwise reported by our acquired businesses as independent entities were not recognized in the first quarters of fiscal 2014 and 2013, respectively. To the extent these underlying hardware systems support contracts are renewed, we will recognize the revenues for the full values of these contracts over the future support periods. Excluding the effect of favorable currency rate fluctuations, total hardware systems support expenses decreased in the first quarter of fiscal 2014 primarily due to a reduction in employee related expenses attributable to decreased headcount, reduced service delivery costs due to operational initiatives and lower amortization of intangible assets. 40
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Excluding the effect of currency rate fluctuations, total hardware systems support margin and margin as a percentage of total revenues increased as our total revenues for this segment increased while our total expenses decreased.
Our services business consists of consulting, managed cloud services and education services. Consulting revenues are earned by providing services to customers in business and IT strategy alignment, enterprise architecture planning and design, initial product implementation and integration, and ongoing product enhancements and upgrades. Managed cloud services revenues are earned by providing comprehensive software and hardware management and maintenance services-including deployment, management, monitoring, patching, security and upgrade services-for customers hosted at our
Oracledata center facilities, select partner data centers or physically on-premise at customer facilities. Additionally, we provide support services, both on-premise and remote, to our customers to enable increased performance and higher availability of their products and services. Education revenues are earned by providing instructor-led, media-based, internet-based and custom training in the use of our software and hardware products. The cost of providing our services consists primarily of personnel related expenses, technology infrastructure expenditures, facilities expenses and external contractor expenses.