Exhibit 99.1

For Immediate Release

 

Contact:		Ken Bond Oracle Investor Relations 1.650.607.0349 ken.bond@oracle.com		Deborah Hellinger Oracle Corporate Communications 1.212.508.7935 deborah.hellinger@oracle.com

ORACLE REPORTS Q2 GAAP EPS UP 17% TO 43 CENTS; Q2 NON-GAAP EPS UP 6% TO 54 CENTS

Trailing Twelve Month Operating Cash Flow Up 45% to $13.1 billion

REDWOOD SHORES, Calif., Dec. 20, 2011 — Oracle Corporation (NASDAQ: ORCL) today announced fiscal 2012 Q2 GAAP and non-GAAP total revenues were up 2% to $8.8 billion. Both GAAP and non-GAAP new software license revenues were up 2% to $2.0 billion. Both GAAP and non-GAAP software license updates and product support revenues were up 9% to $4.0 billion. Both GAAP and non-GAAP hardware systems products revenues were down 14% to $953 million. GAAP operating income was up 12% to $3.1 billion, and GAAP operating margin was 35%. Non-GAAP operating income was up 3% to $3.9 billion, and non-GAAP operating margin was 45%. GAAP net income was up 17% to $2.2 billion, while non-GAAP net income was up 6% to $2.8 billion. GAAP earnings per share were $0.43, up 17% compared to last year while non-GAAP earnings per share were up 6% to $0.54. GAAP operating cash flow on a trailing twelve-month basis was $13.1 billion.

“Non-GAAP operating margins increased to 45% in Q2,” said Oracle President and CFO, Safra Catz, “and we expect those margins to keep growing. Operating cash flow over the last twelve months grew to $13.1 billion; that’s up a remarkable 45% compared to the preceding twelve month period.”

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“We have expanded our worldwide sales capacity by adding over 1,700 sales professionals in the first half of this fiscal year,” said Oracle President, Mark Hurd. “We believe that this increase in our field organization combined with innovative new products like Fusion Cloud ERP and Cloud CRM will enable solid organic growth in the second half of this year.”

“Sales of our engineered systems accelerated in Q2,” said Oracle CEO, Larry Ellison. “Exadata growth was well over 100% compared to last year, and Exalogic grew more than 100% on a sequential basis. We shipped our first SPARC SuperCluster in Q2 and expect to begin deliveries of our Exalytics system and the Oracle Big Data Appliance in Q3.”

Oracle announced that its Board of Directors authorized the repurchase of up to an additional $5.0 billion of common stock under its existing share repurchase program in future quarters.

The Board of Directors also declared a quarterly cash dividend of $0.06 per share of outstanding common stock. This dividend will be paid to stockholders of record as of the close of business on January 11, 2012, with a payment date of February 1, 2012.

Q2 Earnings Conference Call and Webcast

Oracle will hold a conference call and webcast today to discuss these results at 2:00 p.m. Pacific. You may listen to the call by dialing (913) 312-0945 or (877) 612-6725, Passcode: 289185. To access the live webcast of this event, please visit the Oracle Investor Relations website at http://www.oracle.com/investor. A replay of the conference call will also be available by dialing (719) 457-0820 or (888) 203-1112, Passcode: 5771640.

About Oracle

Oracle engineers hardware and software to work together in the cloud and in your data center. For more information about Oracle (NASDAQ: ORCL), visit www.oracle.com or contact Investor Relations at investor_us@oracle.com or (650) 506-4073.

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Trademarks

Oracle and Java are registered trademarks of Oracle and/or its affiliates. Other names may be trademarks of their respective owners.

“Safe Harbor” Statement: Statements in this press release relating to Oracle’s future plans, expectations, beliefs, intentions and prospects, including statements regarding operating margin growth, organic growth in the second half of fiscal 2012, Exalytics systems and Oracle Big Data Appliance deliveries and our share repurchase program, are “forward-looking statements” and are subject to material risks and uncertainties. Many factors could affect our current expectations and our actual results, and could cause actual results to differ materially. We presently consider the following to be among the important factors that could cause actual results to differ materially from expectations: (1) Economic, political and market conditions, including the recent recession and current European debt crisis, can adversely affect our business, results of operations and financial condition, including our revenue growth and profitability, which in turn could adversely affect our stock price. (2) We may fail to achieve our financial forecasts due to such factors as delays or size reductions in transactions, fewer large transactions in a particular quarter, unanticipated fluctuations in currency exchange rates, delays in delivery of new products or releases or a decline in our renewal rates for software license updates and product support. (3) Our hardware systems business may not be successful, and we may fail to achieve our financial forecasts with respect to this business. (4) We have an active acquisition program and our acquisitions may not be successful, may involve unanticipated costs or other integration issues or may disrupt our existing operations. (5) Our international sales and operations subject us to additional risks that can adversely affect our operating results, including risks relating to foreign currency gains and losses and risks relating to compliance with international and U.S. laws that apply to our international operations. (6) Intense competitive forces demand rapid technological advances and frequent new product introductions and could require us to reduce prices or cause us to lose customers. (7) If we are unable to develop new or sufficiently differentiated products and services, or to enhance and improve our products and support services in a timely manner or to position and/or price our products and services to meet market demand, customers may not buy new software licenses or hardware systems products or purchase or renew support contracts. A detailed discussion of these factors and other risks that affect our business is contained in our SEC filings, including our most recent reports on Form 10-K and Form 10-Q, particularly under the heading “Risk Factors.” Copies of these filings are available online from the SEC or by contacting Oracle Corporation’s Investor Relations Department at (650) 506-4073 or by clicking on SEC Filings on Oracle’s Investor Relations website at http://www.oracle.com/investor. All information set forth in this press release is current as of December 20, 2011. Oracle undertakes no duty to update any statement in light of new information or future events.

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ORACLE CORPORATION

Q2 FISCAL 2012 FINANCIAL RESULTS

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

($ in millions, except per share data)

 

		Three Months Ended November 30,																% Increase				% Increase (Decrease)
		2011				% of Revenues				2010				% of Revenues				(Decrease) in US $				in Constant Currency (1)
REVENUES
New software licenses		$	2,048				23%			$	1,999				23%				2%				3%
Software license updates and product support			3,986				46%				3,645				43%				9%				9%
Software Revenues			6,034				69%				5,644				66%				7%				7%
Hardware systems products			953				11%				1,112				13%				(14%	)			(14%	)
Hardware systems support			625				7%				641				7%				(2%	)			(3%	)
Hardware Systems Revenues			1,578				18%				1,753				20%				(10%	)			(10%	)
Services			1,180				13%				1,185				14%				0%				0%
Total Revenues			8,792				100%				8,582				100%				2%				2%
OPERATING EXPENSES
Sales and marketing			1,697				19%				1,530				18%				11%				11%
Software license updates and product support			298				3%				307				4%				(3%	)			(3%	)
Hardware systems products			471				5%				525				6%				(10%	)			(10%	)
Hardware systems support			258				3%				356				4%				(27%	)			(28%	)
Services			929				11%				969				11%				(4%	)			(3%	)
Research and development			1,102				13%				1,119				13%				(2%	)			(1%	)
General and administrative (2)			277				3%				156				2%				77%				77%
Amortization of intangible assets			592				7%				614				7%				(4%	)			(4%	)
Acquisition related and other			5				0%				47				1%				(89%	)			(92%	)
Restructuring			52				1%				189				2%				(72%	)			(72%	)
Total Operating Expenses			5,681				65%				5,812				68%				(2%	)			(2%	)
OPERATING INCOME			3,111				35%				2,770				32%				12%				12%
Interest expense			(192	)			(2%	)			(214	)			(2%	)			(11%	)			(11%	)
Non-operating income, net			41				1%				90				1%				(55%	)			(49%	)
INCOME BEFORE PROVISION FOR INCOME TAXES			2,960				34%				2,646				31%				12%				11%
Provision for income taxes			768				9%				776				9%				(1%	)			(2%	)
NET INCOME		$	2,192				25%			$	1,870				22%				17%				17%
EARNINGS PER SHARE:
Basic		$	0.43							$	0.37
Diluted		$	0.43							$	0.37
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Basic			5,041								5,044
Diluted			5,123								5,117

(1)

We compare the percent change in the results from one period to another period using constant currency disclosure. We present constant currency information to provide a framework for assessing how our underlying businesses performed excluding the effect of foreign currency rate fluctuations. To present this information, current and comparative prior period results for entities reporting in currencies other than United States dollars are converted into United States dollars at the exchange rates in effect on May 31, 2011, which was the last day of our prior fiscal year, rather than the actual exchange rates in effect during the respective periods. Movements in international currencies relative to the United States dollar during the three months ended November 30, 2011 compared with the corresponding prior year period had no impact on our revenues, operating expenses and operating income.

 

(2)	General and administrative expenses for the three months ended November 30, 2010 included a benefit of $120 million related to the recovery of legal costs.

 

1

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ORACLE CORPORATION

Q2 FISCAL 2012 FINANCIAL RESULTS

RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES (1)

($ in millions, except per share data)

 

		Three Months Ended November 30,																								% Increase (Decrease) in US $								% Increase (Decrease) in Constant Currency (2)
		2011 GAAP				Adj.				2011 Non-GAAP				2010 GAAP				Adj.				2010 Non-GAAP				GAAP				Non-GAAP				GAAP				Non-GAAP
TOTAL REVENUES (3) (4)		$	8,792			$	19			$	8,811			$	8,582			$	67			$	8,649				2%				2%				2%				2%
TOTAL SOFTWARE REVENUES (3)		$	6,034			$	10			$	6,044			$	5,644			$	22			$	5,666				7%				7%				7%				7%
New software licenses			2,048				—				2,048				1,999				—				1,999				2%				2%				3%				3%
Software license updates and product support (3)			3,986				10				3,996				3,645				22				3,667				9%				9%				9%				9%
TOTAL HARDWARE SYSTEMS REVENUES (4)		$	1,578			$	9			$	1,587			$	1,753			$	45			$	1,798				(10%)				(12%)				(10%)				(12%)
Hardware systems products			953				—				953				1,112				—				1,112				(14%)				(14%)				(14%)				(14%)
Hardware systems support (4)			625				9				634				641				45				686				(2%)				(8%)				(3%)				(8%)
TOTAL OPERATING EXPENSES		$	5,681			$	(799)			$	4,882			$	5,812			$	(969)			$	4,843				(2%)				1%				(2%)				1%
Stock-based compensation (5)			150				(150)				—				119				(119)				—				26%				*				26%				*
Amortization of intangible assets (6)			592				(592)				—				614				(614)				—				(4%)				*				(4%)				*
Acquisition related and other			5				(5)				—				47				(47)				—				(89%)				*				(92%)				*
Restructuring			52				(52)				—				189				(189)				—				(72%)				*				(72%)				*
OPERATING INCOME		$	3,111			$	818			$	3,929			$	2,770			$	1,036			$	3,806				12%				3%				12%				3%
OPERATING MARGIN %			35%								45%				32%								44%				310 bp.				59 bp.				291 bp.				42 bp.
INCOME TAX EFFECTS (7)		$	768			$	226			$	994			$	776			$	274			$	1,050				(1%)				(5%)				(2%)				(6%)
NET INCOME		$	2,192			$	592			$	2,784			$	1,870			$	762			$	2,632				17%				6%				17%				5%
DILUTED EARNINGS PER SHARE		$	0.43							$	0.54			$	0.37							$	0.51				17%				6%				16%				5%
DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING			5,123				—				5,123				5,117				—				5,117				0%				0%				0%				0%

(1)

This presentation includes non-GAAP measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP. For a detailed explanation of the adjustments made to comparable GAAP measures, the reasons why management uses these measures, the usefulness of these measures and the material limitations on the usefulness of these measures, please see Appendix A.

 

(2)

We compare the percent change in the results from one period to another period using constant currency disclosure. We present constant currency information to provide a framework for assessing how our underlying businesses performed excluding the effect of foreign currency rate fluctuations. To present this information, current and comparative prior period results for entities reporting in currencies other than United States dollars are converted into United States dollars at the exchange rates in effect on May 31, 2011, which was the last day of our prior fiscal year, rather than the actual exchange rates in effect during the respective periods.

 

(3)	As of November 30, 2011, approximately $11 million, $9 million and $2 million in estimated revenues related to assumed software support contracts will not be recognized for the remainder of fiscal 2012, fiscal 2013 and fiscal 2014, respectively, due to business combination accounting rules.

 

(4)	As of November 30, 2011, approximately $10 million and $11 million in estimated revenues related to hardware systems support contracts will not be recognized for the remainder of fiscal 2012 and fiscal 2013, respectively, due to business combination accounting rules.

 

(5)	Stock-based compensation was included in the following GAAP operating expense categories:

 

		Three Months Ended												Three Months Ended
		November 30, 2011												November 30, 2010
		GAAP				Adj.				Non-GAAP				GAAP				Adj.				Non-GAAP
Sales and marketing		$	29			$	(29	)		$	—			$	19			$	(19	)		$	—
Software license updates and product support			5				(5	)			—				3				(3	)			—
Hardware systems products			—				—				—				1				(1	)			—
Hardware systems support			2				(2	)			—				1				(1	)			—
Services			6				(6	)			—				4				(4	)			—
Research and development			68				(68	)			—				55				(55	)			—
General and administrative			40				(40	)			—				36				(36	)			—
Subtotal			150				(150	)			—				119				(119	)			—
Acquisition related and other			2				(2	)			—				5				(5	)			—
Total stock-based compensation		$	152			$	(152	)		$	—			$	124			$	(124	)		$	—

 

(6)	Estimated future annual amortization expense related to intangible assets as of November 30, 2011 was as follows:

 

Remainder of Fiscal 2012		$	1,162
Fiscal 2013			1,991
Fiscal 2014			1,644
Fiscal 2015			1,244
Fiscal 2016			737
Fiscal 2017			183
Thereafter			180
Total intangible assets subject to amortization			7,141
In-process research and development			11
Total intangible assets, net		$	7,152

 

(7)

Income tax effects were calculated reflecting an effective GAAP tax rate of 25.9% and 29.3% in the second quarter of fiscal 2012 and 2011, respectively, and an effective non-GAAP tax rate of 26.3% and 28.5% in the second quarter of fiscal 2012 and 2011, respectively. The differences between our GAAP and non-GAAP tax rates in the second quarter of fiscal 2012 and fiscal 2011 were primarily due to differences in jurisdictional tax rates and the related tax benefits attributable to our restructuring expenses in these periods.

 

*	Not meaningful

 

2

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ORACLE CORPORATION

Q2 FISCAL 2012 YEAR TO DATE FINANCIAL RESULTS

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

($ in millions, except per share data)

 

		Six Months Ended November 30,																% Increase				% Increase (Decrease)
		2011				% of Revenues				2010				% of Revenues				(Decrease) in US $				in Constant Currency (1)
REVENUES
New software licenses		$	3,546				21%			$	3,284				21%				8%				6%
Software license updates and product support			8,008				46%				7,096				44%				13%				10%
Software Revenues			11,554				67%				10,380				65%				11%				8%
Hardware systems products			1,981				12%				2,190				13%				(10%)				(13%)
Hardware systems support			1,271				7%				1,261				8%				1%				(3%)
Hardware Systems Revenues			3,252				19%				3,451				21%				(6%)				(9%)
Services			2,360				14%				2,253				14%				5%				2%
Total Revenues			17,166				100%				16,084				100%				7%				4%
OPERATING EXPENSES
Sales and marketing			3,327				19%				2,864				18%				16%				13%
Software license updates and product support			594				3%				615				4%				(3%)				(5%)
Hardware systems products			943				6%				1,082				7%				(13%)				(14%)
Hardware systems support			541				3%				656				4%				(17%)				(20%)
Services			1,865				11%				1,865				11%				0%				(2%)
Research and development			2,152				13%				2,222				14%				(3%)				(4%)
General and administrative (2)			587				3%				428				3%				37%				34%
Amortization of intangible assets			1,184				7%				1,217				7%				(3%)				(3%)
Acquisition related and other			25				0%				130				1%				(81%)				(83%)
Restructuring			154				1%				318				2%				(52%)				(53%)
Total Operating Expenses			11,372				66%				11,397				71%				0%				(2%)
OPERATING INCOME			5,794				34%				4,687				29%				24%				17%
Interest expense			(384)				(2%)				(410)				(2%)				(6%)				(6%)
Non-operating income, net			21				0%				165				1%				(87%)				(84%)
INCOME BEFORE PROVISION FOR INCOME TAXES			5,431				32%				4,442				28%				22%				16%
Provision for income taxes			1,399				9%				1,219				8%				15%				9%
NET INCOME		$	4,032				23%			$	3,223				20%				25%				19%
EARNINGS PER SHARE:
Basic		$	0.80							$	0.64
Diluted		$	0.78							$	0.63
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Basic			5,052								5,035
Diluted			5,137								5,100

(1)

We compare the percent change in the results from one period to another period using constant currency disclosure. We present constant currency information to provide a framework for assessing how our underlying businesses performed excluding the effect of foreign currency rate fluctuations. To present this information, current and comparative prior period results for entities reporting in currencies other than United States dollars are converted into United States dollars at the exchange rates in effect on May 31, 2011, which was the last day of our prior fiscal year, rather than the actual exchange rates in effect during the respective periods. Movements in international currencies relative to the United States dollar during the six months ended November 30, 2011 compared with the corresponding prior year period increased our revenues by 3 percentage points, operating expenses by 2 percentage points and operating income by 7 percentage points.

 

(2)	General and administrative expenses for the six months ended November 30, 2010 included a benefit of $120 million related to the recovery of legal costs.

 

3

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ORACLE CORPORATION

Q2 FISCAL 2012 YEAR TO DATE FINANCIAL RESULTS

RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES (1)

($ in millions, except per share data)

 

		Six Months Ended November 30,																								% Increase (Decrease) in US $								% Increase (Decrease)  in Constant Currency (2)
		2011 GAAP				Adj.				2011 Non-GAAP				2010 GAAP				Adj.				2010 Non-GAAP				GAAP				Non-GAAP				GAAP				Non-GAAP
TOTAL REVENUES (3) (4)		$	17,166			$	43			$	17,209			$	16,084			$	153			$	16,237				7%				6%				4%				3%
TOTAL SOFTWARE REVENUES (3)		$	11,554			$	24			$	11,578			$	10,380			$	47			$	10,427				11%				11%				8%				8%
New software licenses			3,546				—				3,546				3,284				—				3,284				8%				8%				6%				6%
Software license updates and product support (3)			8,008				24				8,032				7,096				47				7,143				13%				12%				10%				9%
TOTAL HARDWARE SYSTEMS REVENUES (4)		$	3,252			$	19			$	3,271			$	3,451			$	106			$	3,557				(6%	)			(8%	)			(9%	)			(11%	)
Hardware systems products			1,981				—				1,981				2,190				—				2,190				(10%	)			(10%	)			(13%	)			(13%	)
Hardware systems support (4)			1,271				19				1,290				1,261				106				1,367				1%				(6%	)			(3%	)			(9%	)
TOTAL OPERATING EXPENSES		$	11,372			$	(1,658	)		$	9,714			$	11,397			$	(1,913	)		$	9,484				0%				2%				(2%	)			0%
Stock-based compensation (5)			295				(295	)			—				248				(248	)			—				20%				*				20%				*
Amortization of intangible assets (6)			1,184				(1,184	)			—				1,217				(1,217	)			—				(3%	)			*				(3%	)			*
Acquisition related and other			25				(25	)			—				130				(130	)			—				(81%	)			*				(83%	)			*
Restructuring			154				(154	)			—				318				(318	)			—				(52%	)			*				(53%	)			*
OPERATING INCOME		$	5,794			$	1,701			$	7,495			$	4,687			$	2,066			$	6,753				24%				11%				17%				7%
OPERATING MARGIN %			34%								44%				29%								42%				461 bp.				196 bp.				393 bp.				154 bp.
INCOME TAX EFFECTS (7)		$	1,399			$	483			$	1,882			$	1,219			$	528			$	1,747				15%				8%				9%				4%
NET INCOME		$	4,032			$	1,218			$	5,250			$	3,223			$	1,538			$	4,761				25%				10%				19%				6%
DILUTED EARNINGS PER SHARE		$	0.78							$	1.02			$	0.63							$	0.93				24%				9%				18%				5%
DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING			5,137				—				5,137				5,100				—				5,100				1%				1%				1%				1%

(1)

This presentation includes non-GAAP measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP. For a detailed explanation of the adjustments made to comparable GAAP measures, the reasons why management uses these measures, the usefulness of these measures and the material limitations on the usefulness of these measures, please see Appendix A.

 

(2)

We compare the percent change in the results from one period to another period using constant currency disclosure. We present constant currency information to provide a framework for assessing how our underlying businesses performed excluding the effect of foreign currency rate fluctuations. To present this information, current and comparative prior period results for entities reporting in currencies other than United States dollars are converted into United States dollars at the exchange rates in effect on May 31, 2011, which was the last day of our prior fiscal year, rather than the actual exchange rates in effect during the respective periods.

 

(3)	As of November 30, 2011, approximately $11 million, $9 million and $2 million in estimated revenues related to assumed software support contracts will not be recognized for the remainder of fiscal 2012, fiscal 2013 and fiscal 2014, respectively, due to business combination accounting rules.

 

(4)	As of November 30, 2011, approximately $10 million and $11 million in estimated revenues related to hardware systems support contracts will not be recognized for the remainder of fiscal 2012 and fiscal 2013, respectively, due to business combination accounting rules.

 

(5)	Stock-based compensation was included in the following GAAP operating expense categories:

 

		Six Months Ended November 30, 2011												Six Months Ended November 30, 2010
		GAAP				Adj.				Non-GAAP				GAAP				Adj.				Non-GAAP
Sales and marketing		$	55			$	(55	)		$	—			$	42			$	(42	)		$	—
Software license updates and product support			8				(8	)			—				8				(8	)			—
Hardware systems products			1				(1	)			—				2				(2	)			—
Hardware systems support			3				(3	)			—				2				(2	)			—
Services			10				(10	)			—				8				(8	)			—
Research and development			139				(139	)			—				114				(114	)			—
General and administrative			79				(79	)			—				72				(72	)			—
Subtotal			295				(295	)			—				248				(248	)			—
Acquisition related and other			3				(3	)			—				6				(6	)			—
Total stock-based compensation		$	298			$	(298	)		$	—			$	254			$	(254	)		$	—

 

(6)	Estimated future annual amortization expense related to intangible assets as of November 30, 2011 was as follows:

 

Remainder of Fiscal 2012		$	1,162
Fiscal 2013			1,991
Fiscal 2014			1,644
Fiscal 2015			1,244
Fiscal 2016			737
Fiscal 2017			183
Thereafter			180
Total intangible assets subject to amortization			7,141
In-process research and development			11
Total intangible assets, net		$	7,152

 

(7)

Income tax effects were calculated reflecting an effective GAAP tax rate of 25.8% and 27.4% in the first half of fiscal 2012 and 2011, respectively, and an effective non-GAAP tax rate of 26.4% and 26.8% in the first half of fiscal 2012 and 2011, respectively. The differences between our GAAP and non-GAAP tax rates in the first half of fiscal 2012 were primarily due to income tax effects related to our acquired tax exposures and the differences in jurisdictional tax rates and the related tax benefits attributable to our restructuring expenses. The differences between our GAAP and non-GAAP tax rates in the first half of fiscal 2011 were primarily due to differences in jurisdictional tax rates and the related tax benefits attributable to our restructuring expenses.

 

*	Not meaningful

 

4

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ORACLE CORPORATION

Q2 FISCAL 2012 FINANCIAL RESULTS

CONDENSED CONSOLIDATED BALANCE SHEETS

($ in millions)

 

		November 30, 2011				May 31,      2011
ASSETS
Current Assets:
Cash and cash equivalents		$	13,286			$	16,163
Marketable securities			17,726				12,685
Trade receivables, net			4,434				6,628
Inventories			218				303
Deferred tax assets			1,239				1,189
Prepaid expenses and other current assets			1,579				2,206
Total Current Assets			38,482				39,174
Non-Current Assets:
Property, plant and equipment, net			2,900				2,857
Intangible assets, net			7,152				7,860
Goodwill			21,994				21,553
Deferred tax assets			1,122				1,076
Other assets			1,260				1,015
Total Non-Current Assets			34,428				34,361
TOTAL ASSETS		$	72,910			$	73,535
LIABILITIES AND EQUITY
Current Liabilities:
Notes payable, current and other current borrowings		$	—			$	1,150
Accounts payable			445				494
Accrued compensation and related benefits			1,582				2,320
Deferred revenues			6,091				6,802
Other current liabilities			2,954				3,426
Total Current Liabilities			11,072				14,192
Non-Current Liabilities:
Notes payable and other non-current borrowings			14,778				14,772
Income taxes payable			3,383				3,169
Other non-current liabilities			1,410				1,157
Total Non-Current Liabilities			19,571				19,098
Equity			42,267				40,245
TOTAL LIABILITIES AND EQUITY		$	72,910			$	73,535

 

5

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ORACLE CORPORATION

Q2 FISCAL 2012 FINANCIAL RESULTS

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

($ in millions)

 

		Six Months Ended November 30,
		2011				2010
Cash Flows From Operating Activities:
Net income		$	4,032			$	3,223
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation			226				194
Amortization of intangible assets			1,184				1,217
Deferred income taxes			(137	)			(76	)
Stock-based compensation			298				254
Tax benefits on the exercise of stock options and vesting of restricted stock-based awards			94				142
Excess tax benefits on the exercise of stock options and vesting of restricted stock-based awards			(53	)			(86	)
Other, net			53				24
Changes in operating assets and liabilities, net of effects from acquisitions:
Decrease in trade receivables, net			2,128				1,343
Decrease in inventories			93				25
Decrease in prepaid expenses and other assets			424				280
Decrease in accounts payable and other liabilities			(1,306	)			(620	)
Increase (decrease) in income taxes payable			184				(613	)
Decrease in deferred revenues			(544	)			(546	)
Net cash provided by operating activities			6,676				4,761
Cash Flows From Investing Activities:
Purchases of marketable securities and other investments			(21,422	)			(16,802	)
Proceeds from maturities and sales of marketable securities and other investments			16,335				11,153
Acquisitions, net of cash acquired			(571	)			(806	)
Capital expenditures			(289	)			(239	)
Net cash used for investing activities			(5,947	)			(6,694	)
Cash Flows From Financing Activities:
Payments for repurchases of common stock			(1,798	)			(504	)
Proceeds from issuances of common stock			434				734
Payments of dividends to stockholders			(607	)			(504	)
Proceeds from borrowings, net of issuance costs			—				3,204
Repayments of borrowings			(1,150	)			(890	)
Excess tax benefits on the exercise of stock options and vesting of restricted stock-based awards			53				86
Distributions to noncontrolling interests			(163	)			(38	)
Net cash (used for) provided by financing activities			(3,231	)			2,088
Effect of exchange rate changes on cash and cash equivalents			(375	)			351
Net (decrease) increase in cash and cash equivalents			(2,877	)			506
Cash and cash equivalents at beginning of period			16,163				9,914
Cash and cash equivalents at end of period		$	13,286			$	10,420

 

6

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ORACLE CORPORATION

Q2 FISCAL 2012 FINANCIAL RESULTS

FREE CASH FLOW—TRAILING 4-QUARTERS (1)

($ in millions)

 

		Fiscal 2011																Fiscal 2012
		Q1				Q2				Q3				Q4				Q1				Q2				Q3		Q4
GAAP Operating Cash Flow		$	8,760			$	9,053			$	9,948			$	11,214			$	12,818			$	13,129
Capital Expenditures (2)			(293	)			(369	)			(441	)			(450	)			(492	)			(500	)
Free Cash Flow		$	8,467			$	8,684			$	9,507			$	10,764			$	12,326			$	12,629
% Growth over prior year			0%				3%				19%				27%				46%				45%
GAAP Net Income		$	6,363			$	6,776			$	7,701			$	8,547			$	9,035			$	9,356
Free Cash Flow as a % of Net Income			133%				128%				123%				126%				136%				135%

 

(1)

To supplement our statements of cash flows presented on a GAAP basis, we use non-GAAP measures of cash flows on a trailing 4-quarter basis to analyze cash flow generated from operations. We believe free cash flow is also useful as one of the bases for comparing our performance with our competitors. The presentation of non-GAAP free cash flow is not meant to be considered in isolation or as an alternative to net income as an indicator of our performance, or as an alternative to cash flows from operating activities as a measure of liquidity.

 

(2)	Represents capital expenditures as reported in cash flows from investing activities on our cash flow statements presented in accordance with GAAP.

 

7

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ORACLE CORPORATION

Q2 FISCAL 2012 FINANCIAL RESULTS

SUPPLEMENTAL ANALYSIS OF GAAP REVENUES AND HEADCOUNT (1)

($ in millions)

 

		Fiscal 2011																				Fiscal 2012
		Q1				Q2				Q3				Q4				TOTAL				Q1				Q2				Q3		Q4		TOTAL
REVENUES
New software licenses		$	1,286			$	1,999			$	2,214			$	3,736			$	9,235			$	1,498			$	2,048							$	3,546
Software license updates and product support			3,450				3,645				3,740				3,961				14,796				4,022				3,986								8,008
Software Revenues			4,736				5,644				5,954				7,697				24,031				5,520				6,034								11,554
Hardware systems products			1,079				1,112				1,035				1,157				4,382				1,029				953								1,981
Hardware systems support			619				641				629				673				2,562				645				625								1,271
Hardware Systems Revenues			1,698				1,753				1,664				1,830				6,944				1,674				1,578								3,252
Services Revenues			1,068				1,185				1,146				1,248				4,647				1,180				1,180								2,360
Total Revenues		$	7,502			$	8,582			$	8,764			$	10,775			$	35,622			$	8,374			$	8,792							$	17,166
AS REPORTED REVENUE GROWTH RATES
New software licenses			25%				21%				29%				19%				23%				17%				2%								8%
Software license updates and product support			11%				12%				13%				15%				13%				17%				9%								13%
Software Revenues			14%				15%				19%				17%				17%				17%				7%								11%
Hardware systems products			*				*				279%				(6%	)			191%				(5%	)			(14%	)							(10%	)
Hardware systems support			*				*				239%				12%				227%				4%				(2%	)							1%
Hardware Systems Revenues			*				*				263%				0%				203%				(1%	)			(10%	)							(6%	)
Services Revenues			18%				24%				23%				13%				19%				10%				0%								5%
Total Revenues			48%				47%				37%				13%				33%				12%				2%								7%
CONSTANT CURRENCY GROWTH RATES (2)
New software licenses			25%				23%				27%				12%				19%				11%				3%								6%
Software license updates and product support			12%				13%				12%				10%				12%				10%				9%								10%
Software Revenues			15%				17%				17%				11%				15%				11%				7%								8%
Hardware systems products			*				*				274%				(11%	)			184%				(11%	)			(14%	)							(13%	)
Hardware systems support			*				*				234%				6%				218%				(3%	)			(3%	)							(3%	)
Hardware Systems Revenues			*				*				258%				(5%	)			195%				(8%	)			(10%	)							(9%	)
Services Revenues			18%				25%				21%				7%				17%				5%				0%								2%
Total Revenues			49%				48%				35%				7%				30%				5%				2%								4%
GEOGRAPHIC REVENUES
REVENUES
Americas		$	3,904			$	4,452			$	4,509			$	5,487			$	18,352			$	4,226			$	4,532							$	8,758
Europe, Middle East & Africa			2,381				2,738				2,815				3,564				11,497				2,704				2,756								5,460
Asia Pacific			1,217				1,392				1,440				1,724				5,773				1,444				1,504								2,948
Total Revenues		$	7,502			$	8,582			$	8,764			$	10,775			$	35,622			$	8,374			$	8,792							$	17,166
HEADCOUNT
GEOGRAPHIC AREA
Americas			44,494				44,815				45,825				45,887								46,338				46,672
Europe, Middle East & Africa			22,886				22,690				22,705				22,394								22,210				22,725
Asia Pacific			37,856				38,225				39,340				40,148								40,840				41,901
Total Company			105,236				105,730				107,870				108,429								109,388				111,298

 

 

(1)	The sum of the quarterly financial information may vary from year-to-date financial information due to rounding.

 

(2)

We compare the percent change in the results from one period to another period using constant currency disclosure. We present constant currency information to provide a framework for assessing how our underlying businesses performed excluding the effect of foreign currency rate fluctuations. To present this information, current and comparative prior period results for entities reporting in currencies other than United States dollars are converted into United States dollars at the exchange rates in effect on May 31, 2011 and 2010 for the fiscal 2012 and fiscal 2011 constant currency growth rate calculations presented, respectively, rather than the actual exchange rates in effect during the respective periods.

 

*	Not meaningful

 

8

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ORACLE CORPORATION

Q2 FISCAL 2012 FINANCIAL RESULTS

SUPPLEMENTAL TOTAL SOFTWARE PRODUCT REVENUE ANALYSIS (1)

($ in millions)

 

		Fiscal 2011																				Fiscal 2012
		Q1				Q2				Q3				Q4				TOTAL				Q1				Q2				Q3		Q4		TOTAL
SOFTWARE REVENUES
DATABASE & MIDDLEWARE REVENUES
New software licenses		$	937			$	1,420			$	1,575			$	2,694			$	6,626			$	1,070			$	1,479							$	2,548
Software license updates and product support			2,316				2,443				2,523				2,663				9,945				2,710				2,707								5,416
Database and Middleware Revenues		$	3,253			$	3,863			$	4,098			$	5,357			$	16,571			$	3,780			$	4,186							$	7,964
AS REPORTED GROWTH RATES
New software licenses			32%				21%				27%				18%				23%				14%				4%								8%
Software license updates and product support			12%				15%				15%				15%				14%				17%				11%								14%
Database and Middleware Revenues			17%				17%				19%				17%				18%				16%				8%								12%
CONSTANT CURRENCY GROWTH RATES (2)
New software licenses			32%				23%				26%				10%				19%				8%				4%								6%
Software license updates and product support			13%				16%				14%				10%				13%				12%				13%								13%
Database and Middleware Revenues			18%				18%				18%				10%				15%				11%				10%								10%
APPLICATIONS REVENUES
New software licenses		$	349			$	579			$	639			$	1,042			$	2,609			$	428			$	569							$	998
Software license updates and product support			1,134				1,202				1,217				1,298				4,851				1,312				1,279								2,592
Applications Revenues		$	1,483			$	1,781			$	1,856			$	2,340			$	7,460			$	1,740			$	1,848							$	3,590
AS REPORTED GROWTH RATES
New software licenses			10%				21%				34%				22%				23%				23%				(2%	)							8%
Software license updates and product support			8%				8%				10%				16%				10%				16%				6%								11%
Applications Revenues			8%				12%				17%				18%				14%				17%				4%								10%
CONSTANT CURRENCY GROWTH RATES (2)
New software licenses			10%				22%				31%				16%				20%				19%				(1%	)							7%
Software license updates and product support			9%				9%				9%				10%				9%				7%				2%								4%
Applications Revenues			9%				13%				16%				12%				13%				10%				1%								5%

 

 

(1)	The sum of the quarterly financial information may vary from year-to-date financial information due to rounding.

 

(2)

We compare the percent change in the results from one period to another period using constant currency disclosure. We present constant currency information to provide a framework for assessing how our underlying businesses performed excluding the effect of foreign currency rate fluctuations. To present this information, current and comparative prior period results for entities reporting in currencies other than United States dollars are converted into United States dollars at the exchange rates in effect on May 31, 2011 and 2010 for the fiscal 2012 and fiscal 2011 constant currency growth rate calculations presented, respectively, rather than the actual exchange rates in effect during the respective periods.

 

9

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ORACLE CORPORATION

Q2 FISCAL 2012 FINANCIAL RESULTS

SUPPLEMENTAL GEOGRAPHIC NEW SOFTWARE LICENSE AND HARDWARE SYSTEMS PRODUCTS REVENUES ANALYSIS (1)

($ in millions)

 

		Fiscal 2011																				Fiscal 2012
		Q1				Q2				Q3				Q4				TOTAL				Q1				Q2				Q3		Q4		TOTAL
AMERICAS
Database & Middleware		$	446			$	671			$	755			$	1,284			$	3,155			$	478			$	669							$	1,146
Applications			212				359				355				580				1,507				249				358								608
New Software License Revenues		$	658			$	1,030			$	1,110			$	1,864			$	4,662			$	727			$	1,027							$	1,754
Hardware Systems Products Revenues		$	543			$	602			$	506			$	599			$	2,248			$	475			$	496							$	971
AS REPORTED GROWTH RATES
Database & Middleware			44%				36%				40%				14%				28%				7%				0%								3%
Applications			14%				26%				26%				20%				22%				18%				0%								6%
New Software License Revenues			33%				32%				35%				16%				26%				10%				0%								4%
Hardware Systems Products Revenues			*				*				287%				(3%	)			201%				(12%	)			(17%	)							(15%	)
CONSTANT CURRENCY GROWTH RATES (2)
Database & Middleware			43%				36%				39%				12%				27%				6%				1%								3%
Applications			14%				26%				24%				18%				20%				16%				1%								7%
New Software License Revenues			32%				32%				34%				14%				24%				9%				1%								4%
Hardware Systems Products Revenues			*				*				285%				(4%	)			199%				(13%	)			(17%	)							(15%	)
EUROPE / MIDDLE EAST / AFRICA
Database & Middleware		$	279			$	426			$	505			$	925			$	2,137			$	322			$	443							$	765
Applications			73				148				197				308				724				118				141								259
New Software License Revenues		$	352			$	574			$	702			$	1,233			$	2,861			$	440			$	584							$	1,024
Hardware Systems Products Revenues		$	338			$	329			$	330			$	341			$	1,337			$	344			$	272							$	615
AS REPORTED GROWTH RATES
Database & Middleware			25%				(1%	)			11%				23%				15%				15%				4%								8%
Applications			(19%	)			23%				47%				18%				20%				63%				(4%	)							18%
New Software License Revenues			12%				5%				19%				22%				16%				25%				2%								11%
Hardware Systems Products Revenues			*				*				246%				(13%	)			176%				2%				(17%	)							(8%	)
CONSTANT CURRENCY GROWTH RATES (2)
Database & Middleware			32%				7%				12%				9%				12%				5%				5%								5%
Applications			(16%	)			31%				46%				7%				16%				55%				(3%	)							16%
New Software License Revenues			18%				12%				20%				9%				13%				15%				3%								7%
Hardware Systems Products Revenues			*				*				246%				(21%	)			165%				(11%	)			(17%	)							(14%	)
ASIA PACIFIC
Database & Middleware		$	212			$	323			$	315			$	485			$	1,334			$	270			$	367							$	637
Applications			64				72				87				154				378				61				70								131
New Software License Revenues		$	276			$	395			$	402			$	639			$	1,712			$	331			$	437							$	768
Hardware Systems Products Revenues		$	198			$	181			$	199			$	217			$	797			$	210			$	185							$	395
AS REPORTED GROWTH RATES
Database & Middleware			19%				27%				28%				20%				23%				28%				14%								19%
Applications			54%				(1%	)			45%				41%				33%				(4%	)			(4%	)							(4%	)
New Software License Revenues			26%				21%				32%				24%				25%				20%				11%								14%
Hardware Systems Products Revenues			*				*				325%				(4%	)			191%				6%				2%								4%
CONSTANT CURRENCY GROWTH RATES (2)
Database & Middleware			13%				22%				20%				8%				15%				15%				12%								13%
Applications			47%				(5%	)			34%				27%				24%				(11%	)			(6%	)							(9%	)
New Software License Revenues			19%				16%				23%				12%				16%				9%				8%								9%
Hardware Systems Products Revenues			*				*				295%				(13%	)			173%				(5%	)			(1%	)							(3%	)
TOTAL COMPANY
Database & Middleware		$	937			$	1,420			$	1,575			$	2,694			$	6,626			$	1,070			$	1,479							$	2,548
Applications			349				579				639				1,042				2,609				428				569								998
New Software License Revenues		$	1,286			$	1,999			$	2,214			$	3,736			$	9,235			$	1,498			$	2,048							$	3,546
Hardware Systems Products Revenues		$	1,079			$	1,112			$	1,035			$	1,157			$	4,382			$	1,029			$	953							$	1,981
AS REPORTED GROWTH RATES
Database & Middleware			32%				21%				27%				18%				23%				14%				4%								8%
Applications			10%				21%				34%				22%				23%				23%				(2%	)							8%
New Software License Revenues			25%				21%				29%				19%				23%				17%				2%								8%
Hardware Systems Products Revenues			*				*				279%				(6%	)			191%				(5%	)			(14%	)							(10%	)
CONSTANT CURRENCY GROWTH RATES (2)
Database & Middleware			32%				23%				26%				10%				19%				8%				4%								6%
Applications			10%				22%				31%				16%				20%				19%				(1%	)							7%
New Software License Revenues			25%				23%				27%				12%				19%				11%				3%								6%
Hardware Systems Products Revenues			*				*				274%				(11%	)			184%				(11%	)			(14%	)							(13%	)

 

 

(1)	The sum of the quarterly financial information may vary from year-to-date financial information due to rounding.

 

(2)

We compare the percent change in the results from one period to another period using constant currency disclosure. We present constant currency information to provide a framework for assessing how our underlying businesses performed excluding the effect of foreign currency rate fluctuations. To present this information, current and comparative prior period results for entities reporting in currencies other than United States dollars are converted into United States dollars at the exchange rates in effect on May 31, 2011 and 2010 for the fiscal 2012 and fiscal 2011 constant currency growth rate calculations presented, respectively, rather than the actual exchange rates in effect during the respective periods.

 

*	Not meaningful

 

10

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APPENDIX A

ORACLE CORPORATION

Q2 FISCAL 2012 FINANCIAL RESULTS

EXPLANATION OF NON-GAAP MEASURES

To supplement our financial results presented on a GAAP basis, we use the non-GAAP measures indicated in the tables, which exclude certain business combination accounting entries and expenses related to acquisitions, as well as other significant expenses including stock-based compensation, that we believe are helpful in understanding our past financial performance and our future results. Our non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures and should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP. Our management regularly uses our supplemental non-GAAP financial measures internally to understand, manage and evaluate our business and make operating decisions. These non-GAAP measures are among the primary factors management uses in planning for and forecasting future periods. Compensation of our executives is based in part on the performance of our business based on these non-GAAP measures. Our non-GAAP financial measures reflect adjustments based on the following items, as well as the related income tax effects:

 

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Software license updates and product support and hardware systems support deferred revenues: Business combination accounting rules require us to account for the fair values of software license updates and product support contracts and hardware systems support contracts assumed in connection with our acquisitions. Because these support contracts are typically one year in duration, our GAAP revenues for the one year period subsequent to our acquisition of a business do not reflect the full amount of support revenues on these assumed support contracts that would have otherwise been recorded by the acquired entity. The non-GAAP adjustment to our software license updates and product support revenues and hardware systems support revenues is intended to include, and thus reflect, the full amount of such revenues. We believe the adjustment to these support revenues is useful to investors as a measure of the ongoing performance of our business. We have historically experienced high renewal rates on our software license updates and product support contracts and our objective is to increase the renewal rates on acquired and new hardware systems support contracts; however, we cannot be certain that our customers will renew our software license updates and product support contracts or our hardware systems support contracts.

 

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Stock-based compensation expenses: We have excluded the effect of stock-based compensation expenses from our non-GAAP operating expenses and net income measures. Although stock-based compensation is a key incentive offered to our employees, and we believe such compensation contributed to the revenues earned during the periods presented and also believe it will contribute to the generation of future period revenues, we continue to evaluate our business performance excluding stock-based compensation expenses. Stock-based compensation expenses will recur in future periods.

 

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Amortization of intangible assets: We have excluded the effect of amortization of intangible assets from our non-GAAP operating expenses and net income measures. Amortization of intangible assets is inconsistent in amount and frequency and is significantly affected by the timing and size of our acquisitions. Investors should note that the use of intangible assets contributed to our revenues earned during the periods presented and will contribute to our future period revenues as well. Amortization of intangible assets will recur in future periods.

 

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Acquisition related and other expenses; and restructuring expenses: We have excluded the effect of acquisition related and other expenses and the effect of restructuring expenses from our non-GAAP operating expenses and net income measures. We incurred significant expenses in connection with our acquisitions and also incurred certain other operating expenses or income, which we generally would not have otherwise incurred in the periods presented as a part of our continuing operations. Acquisition related and other expenses consist of personnel related costs for transitional employees, other acquired employee related costs, stock-based compensation expenses (in addition to the stock-based compensation expenses described above), integration related professional services, certain business combination adjustments including adjustments after the measurement period has ended and changes in fair value of contingent consideration payable, and certain other operating expenses, net. Substantially all of the stock-based compensation expenses included in acquisition related and other expenses resulted from unvested options assumed in acquisitions whose vesting was fully accelerated upon termination of the employees pursuant to the original terms of those options. Restructuring expenses consist of employee severance and other exit costs. We believe it is useful for investors to understand the effects of these items on our total operating expenses. Although acquisition related expenses and restructuring expenses generally diminish over time with respect to past acquisitions, we generally will incur these expenses in connection with any future acquisitions.

 

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