SOURCE: Oracle Corporation

Oracle Corporation

December 17, 2009 16:01 ET

Oracle Reports Q2 GAAP EPS of 29 Cents Up 15%, Non-GAAP EPS of 39 Cents Up 15%

Total Revenues Up, New Software License Sales Up, Operating Margin Up, Operating Cash Flow Up

REDWOOD SHORES, CA--(Marketwire - December 17, 2009) - Oracle Corporation (NASDAQ: ORCL) today announced fiscal 2010 Q2 GAAP earnings per share of $0.29, up 15% compared to last year. Second quarter GAAP total revenues were up 4% to $5.9 billion, while quarterly GAAP net income was up 12% to $1.5 billion. GAAP new software license revenues were up 2% to $1.7 billion. GAAP software license updates and product support revenues were up 14% to $3.2 billion. GAAP operating income was up 10% to $2.2 billion and GAAP operating margin was up 200 basis points to 37%. GAAP operating cash flow on a trailing twelve-month basis was $8.7 billion, up 7%.

Second quarter non-GAAP earnings per share were up 15% to $0.39. Non-GAAP total revenues were up 3% to $5.9 billion, while non-GAAP net income was up 12% to $2.0 billion, compared to the same quarter last year. Non-GAAP operating income was up 9% to $2.9 billion and non-GAAP operating margin was up 280 basis points to 49%.

"We delivered results which were substantially better than we expected on both the top and bottom line, growing non-GAAP operating margins by 280 basis points to 49%, the highest Q2 non-GAAP operating margin in our history," said Oracle CFO Jeff Epstein. "Our solid top line growth, coupled with disciplined expense management, was key in generating $8.4 billion of free cash flow over the last twelve months."

"We expect the European Commission to unconditionally clear the acquisition of Sun in January," said Oracle President Safra Catz. "I want to thank all of our customers for the overwhelming support they have given us during this process."

"For the fourth consecutive quarter, Oracle took market share from SAP in every region around the world," said Oracle President Charles Phillips. "In constant currency, our applications business grew 1% in the Americas and 2% in Asia Pacific versus a negative 35% and negative 34% respectively for SAP."

"Sun's new SPARC Solaris system and Sun's new Exadata database machine both run the Oracle database faster than IBM's fastest computer," said Oracle CEO Larry Ellison. "We expect Sun to rapidly improve both its market share and margins once this merger closes."

In addition, Oracle's Board of Directors declared a cash dividend of $0.05 per share of outstanding common stock to be paid to stockholders of record as of the close of business on January 19, 2010, with a payment date of February 9, 2010. Future declarations of quarterly dividends and the establishment of future record and payment dates are subject to the final determination of Oracle's Board of Directors.

Q2 Earnings Conference Call and Webcast
Oracle will hold a conference call and web broadcast today to discuss these results at 2:00 p.m. Pacific. You may listen to the call by dialing (866) 423-8620 or (719) 387-4093, Passcode: 983270. To access the live web broadcast of this event, please visit the Oracle Investor Relations website at http://www.oracle.com/investor.

About Oracle
Oracle is the world's largest business software company. For more information about Oracle, please visit our website at http://www.oracle.com or call Investor Relations at (650) 506-4073.

Trademarks
Oracle is a registered trademark of Oracle Corporation 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 or its Board of Directors' future plans, expectations, intentions and prospects 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 global economic and financial crisis, could adversely affect our business, operating results or financial condition, including our revenue growth and profitability, through reductions in customer IT budgets and expenditures and through the general tightening of access to credit. (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) We cannot assure market acceptance of new products or services or new versions of existing or acquired products or services. (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. Also the Sun acquisition may not be cleared by relevant regulatory authorities, may not otherwise close or the closing of the proposed transaction may be further delayed and Oracle or Sun may be adversely affected by other economic, business, and/or competitive factors. No assurances can be given that the European Commission will clear the transaction, that the closing will transpire or occur, or if these events occur, what impact they will have on the results of operations or financial condition of Oracle or Sun. 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 17, 2009. Oracle undertakes no duty to update any statement in light of new information or future events.

                            ORACLE CORPORATION

                     Q2 FISCAL 2010 FINANCIAL RESULTS
              CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                  ($ in millions, except per share data)


                                                                     %
                                                                  Increase
                                                            %    (Decrease)
                     Three Months Ended November 30,     Increase    in
                 -------------------------------------- (Decrease) Constant
                             % of                % of       in     Currency
                   2009    Revenues    2008    Revenues    US $      (1)
                 --------  --------  --------  --------   ------   ------
REVENUES
  New software
   licenses      $  1,653        28% $  1,626        29%       2%      (5%)
  Software
   license
   updates and
   product
   support          3,247        56%    2,850        51%      14%       9%
                 --------  --------  --------  --------
    Software
     Revenues       4,900        84%    4,476        80%       9%       4%
                 --------  --------  --------  --------

  Services            958        16%    1,131        20%     (15%)    (19%)
                 --------  --------  --------  --------

      Total
       Revenues     5,858       100%    5,607       100%       4%       0%
                 --------  --------  --------  --------

OPERATING
 EXPENSES
  Sales and
   marketing        1,133        19%    1,146        20%      (1%)     (5%)
  Software
   license
   updates and
   product
   support            264         5%      257         5%       3%      (1%)
  Cost of
   services           832        14%      939        17%     (11%)    (15%)
  Research and
   development        708        12%      651        12%       9%       7%
  General and
   administrative     183         3%      174         3%       5%       3%
  Amortization
   of
   intangible
   assets             436         8%      427         8%       2%       2%
  Acquisition
   related and
   other               10         0%       21         0%     (52%)    (49%)
  Restructuring       114         2%       17         0%     561%     504%
                 --------  --------  --------  --------

      Total
       Operating
       Expenses     3,680        63%    3,632        65%       1%      (2%)
                 --------  --------  --------  --------

OPERATING INCOME    2,178        37%    1,975        35%      10%       2%
  Interest
   expense           (188)       (3%)    (157)       (3%)     20%      20%
  Non-operating
   income, net         33         1%        8         0%     315%     264%
                 --------  --------  --------  --------

INCOME BEFORE
 PROVISION FOR
 INCOME TAXES       2,023        35%    1,826        32%      11%       2%
                 --------  --------  --------  --------
  Provision for
   income taxes       565        10%      530         9%       7%      (2%)
                 --------  --------  --------  --------

NET INCOME       $  1,458        25% $  1,296        23%      12%       3%
                 ========  ========  ========  ========
EARNINGS PER
 SHARE:
  Basic          $   0.29            $   0.25
  Diluted        $   0.29            $   0.25
WEIGHTED AVERAGE
 COMMON SHARES
 OUTSTANDING:
  Basic             5,010               5,127
  Diluted           5,064               5,187


(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 rate in effect on May 31, 2009, which was the last day of our
    prior fiscal year, rather than the actual exchange rates in effect
    during the respective periods. The United States dollar weakened
    relative to most major international currencies in the three months
    ended November 30, 2009 compared with the corresponding prior year
    period, increasing revenues by 4 percentage points, operating expenses
    by 3 percentage points and operating income by 8 percentage points.




                            ORACLE  CORPORATION

                     Q2 FISCAL 2010 FINANCIAL RESULTS
    RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES (1)
                  ($ in millions, except per share data)


                                Three Months Ended November 30,
                    ------------------------------------------------------
                      2009              2009      2008              2008
                      GAAP     Adj.   Non-GAAP    GAAP     Adj.   Non-GAAP
                    -------  -------  --------  -------  -------  --------

 TOTAL REVENUES (3) $ 5,858  $    14  $  5,872  $ 5,607  $    80  $  5,687

 TOTAL SOFTWARE
  REVENUES (3)      $ 4,900  $    14  $  4,914  $ 4,476  $    80  $  4,556
     New software
      licenses        1,653        -     1,653    1,626        -     1,626
     Software
      license
      updates and
      product
      support (3)     3,247       14     3,261    2,850       80     2,930

TOTAL OPERATING
  EXPENSES          $ 3,680  $  (664) $  3,016  $ 3,632  $  (554) $  3,078
     Stock-based
      compensation
      (4)               104     (104)        -       89      (89)        -
     Amortization
      of intangible
      assets (5)        436     (436)        -      427     (427)        -
     Acquisition
      related and
      other              10      (10)        -       21      (21)        -
     Restructuring      114     (114)        -       17      (17)        -

 OPERATING INCOME   $ 2,178  $   678  $  2,856  $ 1,975  $   634  $  2,609

 OPERATING MARGIN %      37%                49%      35%                46%

 INCOME TAX EFFECTS
  (6)               $   565  $   175  $    740  $   530  $   184  $    714

 NET INCOME         $ 1,458  $   503  $  1,961  $ 1,296  $   450  $  1,746

 DILUTED EARNINGS
  PER SHARE         $  0.29           $   0.39  $  0.25           $   0.34

 DILUTED WEIGHTED
  AVERAGE COMMON
  SHARES
  OUTSTANDING         5,064        -     5,064    5,187        -     5,187




                                            % Increase
                                          (Decrease) in
                        % Increase      Constant Currency
                    (Decrease) in US $          (2)
                    ------------------  ------------------
                      GAAP    Non-GAAP    GAAP    Non-GAAP
                    --------  --------  --------  --------

 TOTAL REVENUES (3)        4%        3%        0%       (2%)

 TOTAL SOFTWARE
  REVENUES (3)             9%        8%        4%        3%
     New software
      licenses             2%        2%       (5%)      (5%)
     Software
      license
      updates and
      product
      support (3)         14%       11%        9%        7%

 TOTAL OPERATING
  EXPENSES                 1%       (2%)      (2%)      (6%)
     Stock-based
      compensation
      (4)                 17%        *        17%        *
     Amortization
      of intangible
      assets (5)           2%        *         2%        *
     Acquisition
      related and
      other              (52%)       *       (49%)       *
     Restructuring       561%        *       504%        *

 OPERATING INCOME         10%        9%        2%        3%

 OPERATING MARGIN %   197 bp    277 bp     90 bp    214 bp

 INCOME TAX EFFECTS
  (6)                      7%        4%       (2%)      (3%)

 NET INCOME               12%       12%        3%        5%

 DILUTED EARNINGS
  PER SHARE               15%       15%        6%        8%

 DILUTED WEIGHTED
  AVERAGE COMMON
  SHARES
  OUTSTANDING             (2%)      (2%)      (2%)      (2%)


(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 rate in effect on May 31, 2009, 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, 2009, approximately $18 million and $14 million
    in estimated revenues related to assumed support contracts will not
    be recognized for the remainder of fiscal 2010 and fiscal 2011,
    respectively, due to business combination accounting rules.

(4) Stock-based compensation is included in the following GAAP operating
    expense categories:




                          Three Months Ended        Three Months Ended
                          November 30, 2009          November 30, 2008
                     --------------------------  --------------------------
                      GAAP      Adj.   Non-GAAP   GAAP      Adj.   Non-GAAP
                     -------  -------  --------  -------  -------  --------
    Sales and
     marketing       $    20  $   (20) $      -  $    16  $   (16) $      -
    Software
     license
     updates and
     product
     support              4       (4)        -        3       (3)        -
    Cost of
     services             3       (3)        -        3       (3)        -
    Research and
     development         44      (44)        -       45      (45)        -
    General and
     administrative      33      (33)        -       22      (22)        -
                    -------  -------  --------  -------  -------  --------
      Subtotal          104     (104)        -       89      (89)        -
                    -------  -------  --------  -------  -------  --------
    Acquisition
     related and
     other                -        -         -        6       (6)        -
                    -------  -------  --------  -------  -------  --------
      Total
       stock-based
       compensation $   104  $  (104) $      -  $    95  $   (95) $      -
                    =======  =======  ========  =======  =======  ========


(5) Estimated future annual amortization expense related to intangible
    assets as of November 30, 2009 is as follows:

       Remainder of Fiscal 2010   $   796
       Fiscal 2011                  1,416
       Fiscal 2012                  1,268
       Fiscal 2013                  1,117
       Fiscal 2014                    900
       Fiscal 2015                    706
       Thereafter                     381
                                  -------
         Total                    $ 6,584
                                  =======

(6) Income tax effects were calculated reflecting an effective GAAP tax
    rate of 27.9% and 29.0% in the second quarter of fiscal 2010 and 2009,
    respectively, and an effective non-GAAP tax rate of 27.4% and 29.0% in
    the second quarter of fiscal 2010 and 2009, respectively. The
    differences between our GAAP and non-GAAP tax rates in the second
    quarter of fiscal 2010 were due to differences in jurisdictional tax
    rates and the related tax benefits attributable to our restructuring
    expenses in this period.

* Not meaningful




                          ORACLE  CORPORATION

               Q2 FISCAL 2010 YEAR TO DATE FINANCIAL RESULTS
              CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                ($ in millions, except per share data)

                                                                     %
                                                                  Increase
                                                                 (Decrease)
                      Six Months Ended November 30,         %        in
                  ------------------------------------   Increase  Constant
                             % of               % of    (Decrease) Currency
                    2009   Revenues    2008   Revenues   in US $    (1)
                  -------  --------  -------  --------  --------  --------
 REVENUES
    New software
     licenses     $ 2,681        25% $ 2,863        26%      (6%)      (9%)
    Software
     license
     updates and
     product
     support        6,364        58%   5,785        53%      10%       10%
                  -------  --------  -------  --------

     Software
      Revenues      9,045        83%   8,648        79%       5%        4%
                  -------  --------  -------  --------

    Services        1,866        17%   2,290        21%     (19%)     (18%)
                  -------  --------  -------  --------

       Total
        Revenues   10,911       100%  10,938       100%       0%       (1%)
                  -------  --------  -------  --------

 OPERATING
  EXPENSES
    Sales and
     marketing      2,093        19%   2,258        21%      (7%)      (7%)
    Software
     license
     updates and
     product
     support          490         4%     539         5%      (9%)      (9%)
    Cost of
     services       1,614        15%   1,965        18%     (18%)     (17%)
    Research and
     development    1,368        13%   1,360        12%       1%        1%
    General and
     administrative   383         4%     379         3%       1%        2%
    Amortization
     of intangible
     assets           867         8%     839         8%       3%        3%
    Acquisition
     related and
     other             16         0%      71         1%     (77%)     (75%)
    Restructuring     162         1%      31         0%     426%      414%
                  -------  --------  -------  --------

      Total
       Operating
       Expenses     6,993        64%   7,442        68%      (6%)      (6%)
                  -------  --------  -------  --------

 OPERATING INCOME   3,918        36%   3,496        32%      12%       10%
    Interest
     expense         (368)       (3%)   (317)       (3%)     16%       16%
    Non-operating
     income, net       35         0%      90         1%     (62%)     (60%)
                  -------  --------  -------  --------

 INCOME BEFORE
  PROVISION FOR
  INCOME TAXES      3,585        33%   3,269        30%      10%        7%
                  -------  --------  -------  --------
    Provision for
     income taxes   1,003         9%     896         8%      12%       10%
                  -------  --------  -------  --------

 NET INCOME       $ 2,582        24% $ 2,373        22%       9%        7%
                  =======  ========  =======  ========

 EARNINGS PER
  SHARE:
    Basic         $  0.52            $  0.46
    Diluted       $  0.51            $  0.46
 WEIGHTED AVERAGE
  COMMON SHARES
   OUTSTANDING:
    Basic           5,010              5,140
    Diluted         5,063              5,211


(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 rate in effect on May 31, 2009, which was the last day of our
    prior fiscal year, rather than the actual exchange rates in effect
    during the respective periods. The United States dollar slightly
    weakened relative to most major international currencies in the six
    months ended November 30, 2009 compared with the corresponding prior
    year period, increasing revenues by 1 percentage point and operating
    income by 2 percentage points.





                            ORACLE  CORPORATION

              Q2 FISCAL 2010 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,
                ----------------------------------------------------------
                  2009                2009      2008                2008
                  GAAP      Adj.    Non-GAAP    GAAP      Adj.    Non-GAAP
                --------  --------  --------  --------  --------  --------

 TOTAL REVENUES
  (3)           $ 10,911  $     23  $ 10,934  $ 10,938  $    171  $ 11,109

 TOTAL SOFTWARE
  REVENUES (3)  $  9,045  $     23  $  9,068  $  8,648  $    171  $  8,819
   New software
    licenses       2,681         -     2,681     2,863         -     2,863
   Software
    license
    updates and
    product
    support (3)    6,364        23     6,387     5,785       171     5,956

 TOTAL OPERATING
  EXPENSES      $  6,993  $ (1,233) $  5,760  $  7,442  $ (1,116) $  6,326
   Stock-based
    compensation
    (4)              188      (188)        -       175      (175)        -
   Amortization
    of intangible
    assets (5)       867      (867)        -       839      (839)        -
   Acquisition
    related and
    other             16       (16)        -        71       (71)        -
   Restructuring     162      (162)        -        31       (31)        -

 OPERATING
  INCOME        $  3,918  $  1,256  $  5,174  $  3,496  $  1,287  $  4,783

 OPERATING
  MARGIN %            36%                 47%       32%                 43%

 INCOME TAX
  EFFECTS (6)   $  1,003  $    337  $  1,340  $    896  $    353  $  1,249

 NET INCOME     $  2,582  $    919  $  3,501  $  2,373  $    934  $  3,307

 DILUTED
  EARNINGS PER
  SHARE         $   0.51            $   0.69  $   0.46            $   0.63

 DILUTED
  WEIGHTED
  AVERAGE
  COMMON SHARES
  OUTSTANDING      5,063         -     5,063     5,211         -     5,211




                                        % Increase
                                      (Decrease) in
                    % Increase      Constant Currency
                (Decrease) in US $          (2)
                ------------------  ------------------
                  GAAP    Non-GAAP    GAAP    Non-GAAP
                --------  --------  --------  --------

 TOTAL REVENUES
  (3)                  0%       (2%)      (1%)      (2%)

 TOTAL SOFTWARE
  REVENUES (3)         5%        3%        4%        2%
   New software
    licenses          (6%)      (6%)      (9%)      (9%)
   Software
    license
    updates and
    product support
    (3)               10%        7%       10%        7%

 TOTAL
  OPERATING
  EXPENSES            (6%)      (9%)      (6%)      (9%)
   Stock-based
    compensation
    (4)                7%        *         7%        *
   Amortization of
    intangible
    assets (5)         3%        *         3%        *
   Acquisition
    related and
    other            (77%)       *       (75%)       *
   Restructuring     426%        *       414%        *

OPERATING
  INCOME              12%        8%       10%        6%

 OPERATING
  MARGIN %        395 bp    426 bp    341 bp    377 bp
 INCOME TAX
  EFFECTS (6)         12%        7%       10%        6%

 NET INCOME            9%        6%        7%        4%

 DILUTED
  EARNINGS PER
  SHARE               12%        9%        9%        7%

 DILUTED
  WEIGHTED
  AVERAGE
  COMMON
  SHARES
  OUTSTANDING         (3%)      (3%)      (3%)      (3%)


(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 rate in effect on May 31, 2009, 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, 2009, approximately $18 million and $14 million in
    estimated revenues related to assumed support contracts will not be
    recognized for the remainder of fiscal 2010 and fiscal 2011,
    respectively, due to business combination accounting rules.

(4) Stock-based compensation is included in the following GAAP operating
    expense categories:




                         Six Months Ended            Six Months Ended
                        November 30, 2009            November 30, 2008
                 ----------------------------  ----------------------------
                   GAAP       Adj.   Non-GAAP    GAAP       Adj.   Non-GAAP
                 --------  --------  --------  --------  --------  --------
  Sales and
   marketing     $     36  $    (36) $      -  $     35  $    (35) $      -
  Software
   license
   updates and
   product
   support              8        (8)        -         6        (6)        -
  Cost of
   services             6        (6)        -         6        (6)        -
  Research and
   development         76       (76)        -        82       (82)        -
  General and
   administrative      62       (62)        -        46       (46)        -
                 --------  --------  --------  --------  --------  --------
    Subtotal          188      (188)        -       175      (175)        -
                 --------  --------  --------  --------  --------  --------
  Acquisition
   related and
   other                -         -         -        11       (11)        -
                 --------  --------  --------  --------  --------  --------
    Total
     stock-based
     compensa-
     tion        $    188  $   (188) $      -  $    186  $   (186) $      -
                 ========  ========  ========  ========  ========  ========


(5) Estimated future annual amortization expense related to intangible
    assets as of November 30, 2009 is as follows:

       Remainder of Fiscal 2010   $   796
       Fiscal 2011                  1,416
       Fiscal 2012                  1,268
       Fiscal 2013                  1,117
       Fiscal 2014                    900
       Fiscal 2015                    706
       Thereafter                     381
                                  -------
         Total                    $ 6,584
                                  =======


(6) Income tax effects were calculated reflecting an effective GAAP tax
    rate of 28.0% and 27.4% in the first half of fiscal 2010 and 2009,
    respectively, and an effective non-GAAP tax rate of 27.7% and 27.4%
    in the first half of fiscal 2010 and 2009, respectively. The
    differences between our GAAP and non-GAAP tax rates in the first
    half of fiscal 2010 were due to differences in jurisdictional tax
    rates and the related tax benefits attributable to our restructuring
    expenses in this period.

* Not meaningful




                           ORACLE  CORPORATION

                     Q2 FISCAL 2010 FINANCIAL RESULTS
                  CONDENSED CONSOLIDATED BALANCE SHEETS
                              ($ in millions)


                                                 November 30,    May 31,
                                                     2009          2009
                                                 ------------  ------------
ASSETS

  Current Assets:
    Cash and cash equivalents                    $     14,919  $      8,995
    Marketable securities                               5,865         3,629
    Trade receivables, net                              3,086         4,430
    Deferred tax assets                                   703           661
    Prepaid expenses and other current assets             662           866
                                                 ------------  ------------
      Total Current Assets                             25,235        18,581

  Non-Current Assets:
    Property, net                                       1,956         1,922
    Intangible assets, net                              6,584         7,269
    Goodwill                                           19,098        18,842
    Other assets                                          960           802
                                                 ------------  ------------
      Total Non-Current Assets                         28,598        28,835
                                                 ------------  ------------
TOTAL ASSETS                                     $     53,833  $     47,416
                                                 ============  ============
LIABILITIES AND STOCKHOLDERS' EQUITY

  Current Liabilities:
    Notes payable, current and other current
     borrowings                                  $      1,001  $      1,001
    Accounts payable                                      255           271
    Accrued compensation and related benefits           1,129         1,409
    Deferred revenues                                   4,395         4,592
    Other current liabilities                           1,754         1,876
                                                 ------------  ------------
      Total Current Liabilities                         8,534         9,149

  Non-Current Liabilities:
    Notes payable and other non-current
     borrowings                                        13,751         9,237
    Income taxes payable                                2,592         2,423
    Deferred tax liabilities                              351           480
    Other non-current liabilities                         690           682
                                                 ------------  ------------
      Total Non-Current Liabilities                    17,384        12,822

  Stockholders' Equity                                 27,915        25,445
                                                 ------------  ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY       $     53,833  $     47,416
                                                 ============  ============




                           ORACLE  CORPORATION

                     Q2 FISCAL 2010 FINANCIAL RESULTS
              CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                              ($ in millions)


                                                       Six Months Ended
                                                         November 30,
                                                     ---------------------
                                                       2009        2008
                                                     ---------   ---------
Cash Flows From Operating Activities:
  Net income                                         $   2,582   $   2,373
  Adjustments to reconcile net income to net cash
   provided by operating activities:
    Depreciation                                           123         134
    Amortization of intangible assets                      867         839
    Deferred income taxes                                 (216)       (151)
    Stock-based compensation                               188         186
    Tax benefits on the exercise of stock options           71         121
    Excess tax benefits on the exercise of stock
     options                                               (42)        (79)
    Other, net                                              56          39
    Changes in operating assets and liabilities, net
     of effects from acquisitions:
      Decrease in trade receivables, net                 1,437       1,642
      Decrease in prepaid expenses and other assets        235         388
      Decrease in accounts payable and other
       liabilities                                        (523)     (1,022)
      Increase (decrease) in income taxes payable           59        (273)
      Decrease in deferred revenues                       (448)       (207)
                                                     ---------   ---------

        Net cash provided by operating activities        4,389       3,990
                                                     ---------   ---------

Cash Flows From Investing Activities:
  Purchases of marketable securities and other
   investments                                          (6,185)     (5,105)
  Proceeds from maturities and sales of marketable
   securities and other investments                      4,088       4,362
  Acquisitions, net of cash acquired                      (392)     (1,065)
  Capital expenditures                                    (100)       (399)
                                                     ---------   ---------

        Net cash used for investing activities          (2,589)     (2,207)
                                                     ---------   ---------

Cash Flows From Financing Activities:
  Payments for repurchases of common stock                (496)     (2,344)
  Proceeds from issuances of common stock                  371         371
  Payment of dividends to stockholders                    (501)          -
  Proceeds from borrowings, net of issuance costs        4,461           -
  Repayments of borrowings                                   -          (4)
  Excess tax benefits on the exercise of stock
   options                                                  42          79
  Distributions to noncontrolling interests                (34)        (30)
                                                     ---------   ---------

        Net cash provided by (used for) financing
         activities                                      3,843      (1,928)
                                                     ---------   ---------

Effect of exchange rate changes on cash and cash
 equivalents                                               281        (764)
                                                     ---------   ---------

Net increase (decrease) in cash and cash
 equivalents                                             5,924        (909)
                                                     ---------   ---------

Cash and cash equivalents at beginning of period         8,995       8,262
                                                     ---------   ---------

Cash and cash equivalents at end of period           $  14,919   $   7,353
                                                     =========   =========




                           ORACLE  CORPORATION
                     Q2 FISCAL 2010 FINANCIAL RESULTS
                 FREE CASH FLOW - TRAILING 4-QUARTERS (1)
                              ($ in millions)

                                      Fiscal 2009
                           ----------------------------------
                              Q1       Q2       Q3       Q4
                           -------  -------  -------  -------

 GAAP Operating Cash Flow  $ 7,941  $ 8,089  $ 8,542  $ 8,255

 Capital Expenditures (2)     (479)    (486)    (539)    (529)
                           -------  -------  -------  -------

 Free Cash Flow            $ 7,462  $ 7,603  $ 8,003  $ 7,726
                           =======  =======  =======  =======

 % Growth over prior year       20%      15%      14%       8%

                           -------  -------  -------  -------

 GAAP Net Income           $ 5,758  $ 5,750  $ 5,739  $ 5,593

 Free Cash Flow as a % of
  Net Income                   130%     132%     139%     138%




                                      Fiscal 2010
                           ----------------------------------
                              Q1       Q2       Q3       Q4
                           -------  -------  -------  -------

 GAAP Operating Cash Flow  $ 8,753  $ 8,654

 Capital Expenditures (2)     (261)    (230)
                           -------  -------  -------  -------

 Free Cash Flow            $ 8,492  $ 8,424
                           =======  =======  =======  =======

 % Growth over prior year       14%      11%

                           -------  -------  -------  -------

 GAAP Net Income           $ 5,640  $ 5,802

 Free Cash Flow as a % of
  Net Income                   151%     145%


(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.




                            ORACLE  CORPORATION
                     Q2 FISCAL 2010 FINANCIAL RESULTS
         SUPPLEMENTAL ANALYSIS OF GAAP REVENUES AND HEADCOUNT (1)
                              ($ in millions)


                                           Fiscal 2009
                         ------------------------------------------------
                            Q1        Q2        Q3        Q4       TOTAL
                         --------  --------  --------  --------  --------
REVENUES
  New software licenses  $  1,237  $  1,626  $  1,516  $  2,744  $  7,123
  Software license
   updates and product
   support                  2,935     2,850     2,917     3,052    11,754
                         --------  --------  --------  --------  --------
    Software Revenues       4,172     4,476     4,433     5,796    18,877

  Consulting                  865       842       758       782     3,247
  On Demand                   195       189       191       204       779
  Education                    99       100        71        79       349
                         --------  --------  --------  --------  --------
    Services Revenues       1,159     1,131     1,020     1,065     4,375

                         --------  --------  --------  --------  --------
      Total Revenues     $  5,331  $  5,607  $  5,453  $  6,861  $ 23,252
                         ========  ========  ========  ========  ========

AS REPORTED REVENUE
 GROWTH RATES
  New software licenses        14%       (3%)      (6%)     (13%)      (5%)
  Software license
   updates and product
   support                     23%       14%       11%        8%       14%
    Software Revenues          20%        8%        5%       (3%)       6%

  Consulting                    8%       (4%)     (10%)     (18%)      (7%)
  On Demand                    23%       13%       10%        5%       12%
  Education                    (2%)      (9%)     (23%)     (30%)     (16%)
    Services Revenues           9%       (2%)      (8%)     (16%)      (5%)

      Total Revenues           18%        6%        2%       (5%)       4%

CONSTANT CURRENCY GROWTH
 RATES (2)
  New software licenses        10%        5%        3%       (4%)       1%
  Software license
   updates and product
   support                     18%       20%       20%       18%       19%
    Software Revenues          16%       14%       14%        6%       12%

  Consulting                    5%        4%        0%      (10%)      (1%)
  On Demand                    19%       19%       19%       15%       18%
  Education                    (6%)      (3%)     (16%)     (23%)     (12%)
    Services Revenues           6%        5%        2%       (7%)       1%

      Total Revenues           14%       12%       11%        4%       10%


GEOGRAPHIC REVENUES

REVENUES
  Americas               $  2,687  $  2,904  $  2,846  $  3,463  $ 11,900
  Europe, Middle East &
   Africa                   1,830     1,881     1,824     2,413     7,948
  Asia Pacific                814       822       783       985     3,404
                         --------  --------  --------  --------  --------
      Total Revenues     $  5,331  $  5,607  $  5,453  $  6,861  $ 23,252
                         ========  ========  ========  ========  ========

HEADCOUNT

GEOGRAPHIC AREA
  Americas                 32,993    33,526    32,919    32,347
  Europe, Middle East &
   Africa                  17,096    17,184    17,348    17,129
  Asia Pacific             35,099    35,947    36,321    36,086
                         --------  --------  --------  --------  --------
      Total Company        85,188    86,657    86,588    85,562
                         ========  ========  ========  ========  ========




                                           Fiscal 2010
                         ------------------------------------------------
                            Q1        Q2        Q3        Q4       TOTAL
                         --------  --------  --------- --------- --------
REVENUES
  New software licenses  $  1,028  $  1,653                      $  2,681
  Software license
   updates and product
   support                  3,117     3,247                         6,364
                         --------  --------  --------- --------- --------
    Software Revenues       4,145     4,900                         9,045

  Consulting                  663       692                         1,355
  On Demand                   180       188                           368
  Education                    66        78                           143
                         --------  --------  --------- --------- --------
    Services Revenues         909       958                         1,866

                         --------  --------  --------- --------- --------
      Total Revenues     $  5,054  $  5,858                      $ 10,911
                         ========  ========  ========= ========= ========

AS REPORTED REVENUE
 GROWTH RATES
  New software licenses       (17%)       2%                           (6%)
  Software license
   updates and product
   support                      6%       14%                           10%
    Software Revenues          (1%)       9%                            5%

  Consulting                  (23%)     (18%)                         (21%)
  On Demand                    (8%)      (1%)                          (4%)
  Education                   (34%)     (22%)                         (28%)
    Services Revenues         (22%)     (15%)                         (19%)

      Total Revenues           (5%)       4%                            0%

CONSTANT CURRENCY GROWTH
 RATES (2)
  New software licenses       (14%)      (5%)                          (9%)
  Software license
   updates and product
   support                     11%        9%                           10%
    Software Revenues           4%        4%                            4%

  Consulting                  (19%)     (22%)                         (21%)
  On Demand                    (3%)      (4%)                          (4%)
  Education                   (30%)     (26%)                         (28%)
    Services Revenues         (18%)     (19%)                         (18%)

      Total Revenues           (1%)       0%                           (1%)


GEOGRAPHIC REVENUES

REVENUES
  Americas               $  2,671  $  2,979                      $  5,650
  Europe, Middle East &
   Africa                   1,642     1,976                         3,618
  Asia Pacific                741       903                         1,643
                         --------  --------  --------- --------- --------
      Total Revenues     $  5,054  $  5,858                      $ 10,911
                         ========  ========  ========= ========= ========

HEADCOUNT

GEOGRAPHIC AREA
  Americas                 32,034    31,849
  Europe, Middle East &
   Africa                  16,839    16,491
  Asia Pacific             35,766    35,026
                         --------  --------  --------- --------- --------
      Total Company        84,639    83,366
                         ========  ========  ========= ========= ========


(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, 2009
     and 2008 for the fiscal 2010 and fiscal 2009 constant currency growth
     rate calculations presented, respectively, rather than the actual
     exchange rates in effect during the respective periods.




                            ORACLE  CORPORATION
                     Q2 FISCAL 2010 FINANCIAL RESULTS
        SUPPLEMENTAL TOTAL SOFTWARE PRODUCT REVENUE ANALYSIS (1)
                              ($ in millions)


                                           Fiscal 2009
                         ------------------------------------------------
                            Q1        Q2        Q3        Q4       TOTAL
                         --------  --------  --------  --------  --------
DATABASE & MIDDLEWARE
 REVENUES

  New software licenses  $    906  $  1,157  $  1,120  $  1,939  $  5,123
  Software license
   updates and product
   support                  1,892     1,835     1,914     2,008     7,649
                         --------  --------  --------  --------  --------
    Software Revenues    $  2,798  $  2,992  $  3,034  $  3,947  $ 12,772
                         ========  ========  ========  ========  ========

AS REPORTED GROWTH RATES
  New software licenses        27%        4%       (4%)     (10%)       0%
  Software license
   updates and product
   support                     26%       17%       16%       12%       18%
    Software Revenues          27%       12%        8%        0%       10%

CONSTANT CURRENCY GROWTH
 RATES (2)
  New software licenses        23%       12%        6%       (1%)       7%
  Software license
   updates and product
   support                     22%       24%       25%       23%       23%
    Software Revenues          22%       19%       17%       10%       16%

APPLICATIONS REVENUES

  New software licenses  $    331  $    469  $    396  $    805  $  2,000
  Software license
   updates and product
   support                  1,043     1,015     1,003     1,044     4,105
                         --------  --------  --------  --------  --------
    Software Revenues    $  1,374  $  1,484  $  1,399  $  1,849  $  6,105
                         ========  ========  ========  ========  ========

AS REPORTED GROWTH RATES
  New software licenses       (12%)     (15%)     (12%)     (19%)     (16%)
  Software license
   updates and product
   support                     18%        9%        3%        0%        7%
    Software Revenues           9%        0%       (2%)      (9%)      (2%)

CONSTANT CURRENCY GROWTH
 RATES (2)
  New software licenses       (14%)      (9%)      (4%)     (11%)     (10%)
  Software license
   updates and product
   support                     13%       15%       11%        9%       12%
    Software Revenues           5%        6%        7%       (1%)       4%




                                           Fiscal 2010
                         ------------------------------------------------
                            Q1        Q2        Q3        Q4       TOTAL
                         --------  --------  --------- --------- --------
DATABASE & MIDDLEWARE
 REVENUES

  New software licenses  $    711  $  1,175                      $  1,886
  Software license
   updates and product
   support                  2,065     2,131                         4,196
                         --------  --------  --------- --------- --------
    Software Revenues    $  2,776  $  3,306                      $  6,082
                         ========  ========  ========= ========= ========

AS REPORTED GROWTH RATES
  New software licenses       (22%)       1%                           (9%)
  Software license
   updates and product
   support                      9%       16%                           13%
    Software Revenues          (1%)      10%                            5%

CONSTANT CURRENCY GROWTH
 RATES (2)
  New software licenses       (19%)      (5%)                         (11%)
  Software license
   updates and product
   support                     14%       12%                           13%
    Software Revenues           4%        5%                            4%

APPLICATIONS REVENUES

  New software licenses  $    317  $    478                      $    795
  Software license
   updates and product
   support                  1,052     1,116                         2,168
                         --------  --------  --------- --------- --------
    Software Revenues    $  1,369  $  1,594                      $  2,963
                         ========  ========  ========= ========= ========

AS REPORTED GROWTH RATES
  New software licenses        (4%)       2%                           (1%)
  Software license
   updates and product
   support                      1%       10%                            5%
    Software Revenues           0%        7%                            4%

CONSTANT CURRENCY GROWTH
 RATES (2)
  New software licenses         0%       (3%)                          (2%)
  Software license
   updates and product
   support                      6%        6%                            6%
    Software Revenues           4%        3%                            3%


(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, 2009
     and 2008 for the fiscal 2010 and fiscal 2009 constant currency growth
     rate calculations presented, respectively, rather than the actual
     exchange rates in effect during the respective periods.




                            ORACLE CORPORATION
                     Q2 FISCAL 2010 FINANCIAL RESULTS
    SUPPLEMENTAL GEOGRAPHIC NEW SOFTWARE LICENSE REVENUE ANALYSIS (1)
                              ($ in millions)


                                Fiscal 2009
               ------------------------------------------------
                  Q1        Q2        Q3        Q4       TOTAL
               --------  --------  --------  --------  --------

AMERICAS

  Database &
   Middleware  $    354  $    471  $    449  $    840  $  2,114
  Applications      182       280       224       416     1,102
               --------  --------  --------  --------  --------
    New Software
     License
     Revenues  $    536  $    751  $    673  $  1,256  $  3,216
               ========  ========  ========  ========  ========

AS REPORTED
 GROWTH RATES
  Database &
   Middleware        18%        5%       (7%)      (9%)      (2%)
  Applications       (9%)      (9%)     (11%)     (25%)     (16%)
    New Software
     License
     Revenues         7%        0%       (9%)     (15%)      (7%)

CONSTANT
 CURRENCY
 GROWTH RATES
 (2)
  Database &
   Middleware        17%       10%       (1%)      (6%)       2%
  Applications      (10%)      (6%)      (8%)     (22%)     (14%)
    New Software
     License
     Revenues         6%        3%       (4%)     (12%)      (4%)

EUROPE / MIDDLE
 EAST / AFRICA

  Database &
   Middleware  $    326  $    431  $    446  $    759  $  1,962
  Applications       94       126       125       282       627
               --------  --------  --------  --------  --------
    New Software
     License
     Revenues  $    420  $    557  $    571  $  1,041  $  2,589
               ========  ========  ========  ========  ========

AS REPORTED
 GROWTH RATES
  Database &
   Middleware        28%        2%        0%      (14%)      (2%)
  Applications      (23%)     (28%)     (12%)     (11%)     (17%)
    New Software
     License
     Revenues        11%       (7%)      (3%)     (13%)      (6%)

CONSTANT
 CURRENCY
 GROWTH RATES
 (2)
  Database &
   Middleware        20%       16%       15%        1%       10%
  Applications      (26%)     (16%)       2%        5%       (6%)
    New Software
     License
     Revenues         5%        7%       12%        2%        6%

ASIA PACIFIC

  Database &
   Middleware  $    226  $    255  $    225  $    340  $  1,047
  Applications       55        63        47       107       271
               --------  --------  --------  --------  --------
    New Software
     License
     Revenues  $    281  $    318  $    272  $    447  $  1,318
               ========  ========  ========  ========  ========

AS REPORTED
 GROWTH RATES
  Database &
   Middleware        45%        4%       (3%)      (1%)       7%
  Applications        1%      (13%)     (18%)     (11%)     (11%)
    New Software
     License
     Revenues        34%        0%       (6%)      (3%)       3%

CONSTANT
 CURRENCY
 GROWTH RATES
 (2)
  Database &
   Middleware        38%        8%        1%        5%       11%
  Applications       (1%)      (2%)      (2%)      (4%)      (3%)
    New Software
     License
     Revenues        28%        5%        1%        3%        7%

TOTAL COMPANY

  Database &
   Middleware  $    906  $  1,157  $  1,120  $  1,939  $  5,123
  Applications      331       469       396       805     2,000
               --------  --------  --------  --------  --------
    New Software
     License
     Revenues  $  1,237  $  1,626  $  1,516  $  2,744  $  7,123
               ========  ========  ========  ========  ========

AS REPORTED
 GROWTH RATES
  Database &
   Middleware        27%        4%       (4%)     (10%)       0%
  Applications      (12%)     (15%)     (12%)     (19%)     (16%)
    New Software
     License
     Revenues        14%       (3%)      (6%)     (13%)      (5%)

CONSTANT
 CURRENCY
 GROWTH RATES
 (2)
  Database &
   Middleware        23%       12%        6%       (1%)       7%
  Applications      (14%)      (9%)      (4%)     (11%)     (10%)
    New Software
     License
     Revenues        10%        5%        3%       (4%)       1%



                                Fiscal 2010
               ------------------------------------------------
                  Q1        Q2        Q3        Q4       TOTAL
               --------  --------  --------- --------  --------

AMERICAS

  Database &
   Middleware  $    310  $    492                      $    802
  Applications      185       286                           472
               --------  --------  --------- --------  --------
    New Software
     License
     Revenues  $    495  $    778                      $  1,274
               ========  ========  ========= ========  ========

AS REPORTED
 GROWTH RATES
  Database &
   Middleware       (12%)       4%                           (3%)
  Applications        2%        2%                            2%
    New Software
     License
     Revenues        (7%)       4%                           (1%)

CONSTANT CURRENCY
 GROWTH RATES
 (2)
  Database &
   Middleware       (11%)       2%                           (3%)
  Applications        6%        1%                            2%
    New Software
     License
     Revenues        (5%)       1%                           (1%)


EUROPE / MIDDLE
 EAST / AFRICA

  Database &
   Middleware  $    224  $    429                      $    653
  Applications       90       119                           209
               --------  --------  --------- --------  --------
    New Software
     License
     Revenues  $    314  $    548                      $    862
               ========  ========  ========= ========  ========

AS REPORTED
 GROWTH RATES
  Database &
   Middleware       (31%)      (1%)                         (14%)
  Applications       (5%)      (6%)                          (5%)
    New Software
     License
     Revenues       (25%)      (2%)                         (12%)

CONSTANT
 CURRENCY
 GROWTH RATES
 (2)
  Database &
   Middleware       (26%)     (10%)                         (16%)
  Applications        3%      (14%)                          (8%)
    New Software
     License
     Revenues       (20%)     (11%)                         (14%)

ASIA PACIFIC

  Database &
   Middleware  $    177  $    254                      $    431
  Applications       42        73                           114
               --------  --------  --------- --------  --------
    New Software
     License
     Revenues  $    219  $    327                      $    545
               ========  ========  ========= ========  ========

AS REPORTED
 GROWTH RATES
  Database &
   Middleware       (22%)       0%                          (10%)
  Applications      (24%)      17%                           (2%)
    New Software
     License
     Revenues       (22%)       3%                           (9%)

CONSTANT
 CURRENCY
 GROWTH RATES
 (2)
  Database &
   Middleware       (22%)     (10%)                         (16%)
  Applications      (23%)       2%                           (9%)
    New Software
     License
     Revenues       (22%)      (8%)                         (15%)

TOTAL COMPANY

  Database &
   Middleware  $    711  $  1,175                      $  1,886
  Applications      317       478                           795
               --------  --------  --------- --------  --------
    New Software
     License
     Revenues  $  1,028  $  1,653                      $  2,681
               ========  ========  ========= ========  ========

AS REPORTED
 GROWTH RATES
  Database &
   Middleware       (22%)       1%                           (9%)
  Applications       (4%)       2%                           (1%)
    New Software
     License
     Revenues       (17%)       2%                           (6%)

CONSTANT
 CURRENCY
 GROWTH RATES
 (2)
  Database &
   Middleware       (19%)      (5%)                         (11%)
  Applications        0%       (3%)                          (2%)
    New Software
     License
     Revenues       (14%)      (5%)                          (9%)


(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, 2009 and 2008 for the fiscal 2010
    and fiscal 2009 constant currency growth rate calculations presented,
    respectively, rather than the actual exchange rates in effect during
    the respective periods.





                                                                APPENDIX A

                                  ORACLE CORPORATION
                           Q2 FISCAL 2010 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:

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

  • 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.

  • 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 revenues earned during the periods presented and will contribute to future period revenues as well. Amortization of intangible assets will recur in future periods.

  • Acquisition related and other expenses, and restructuring expenses: 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 after the measurement period or purchase price allocation period has ended 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 are not recurring with respect to past acquisitions, we generally will incur these expenses in connection with any future acquisitions.

Contact Information

  • Contact:
    Ken Bond
    Oracle Investor Relations
    1.650.607.0349
    Email Contact

    Karen Tillman
    Oracle Corporate Communications
    1.650.607.0326
    Email Contact