REDWOOD SHORES, CA--(Marketwire - Jun 23, 2011) - Oracle Corporation (NASDAQ: ORCL) today
announced fiscal 2011 Q4 GAAP total revenues were up 13% to $10.8 billion,
while non-GAAP total revenues were up 12% to $10.8 billion. Both GAAP and
non-GAAP new software license revenues were up 19% to $3.7 billion. Both
GAAP and non-GAAP software license updates and product support revenues
were up 15% to $4.0 billion. Both GAAP and non-GAAP hardware systems
products revenues were down 6% to $1.2 billion. GAAP operating income was
up 32% to $4.4 billion, and GAAP operating margin was 40%. Non-GAAP
operating income was up 19% to $5.2 billion, and non-GAAP operating margin
was 48%. GAAP net income was up 36% to $3.2 billion, while non-GAAP net
income was up 27% to $3.9 billion. GAAP earnings per share were $0.62, up
34% compared to last year while non-GAAP earnings per share were up 25% to
$0.75. GAAP operating cash flow on a trailing twelve-month basis was $11.2
billion.
For fiscal year 2011, GAAP total revenues were up 33% to $35.6 billion,
while non-GAAP total revenues were up 33% to $35.9 billion. Both GAAP and
non-GAAP new software license revenues were up 23% to $9.2 billion. GAAP
software license updates and product support revenues were up 13% to $14.8
billion, while non-GAAP software license updates and product support
revenues were up 13% to $14.9 billion. Both GAAP and non-GAAP hardware
systems products revenues were $4.4 billion. GAAP operating income was up
33% to $12.0 billion, and GAAP operating margin was 34%. Non-GAAP operating
income was up 27% to $15.9 billion, and non-GAAP operating margin was 44%.
GAAP net income was up 39% to $8.5 billion, while non-GAAP net income was
up 34% to $11.4 billion. GAAP earnings per share were $1.67, up 38%
compared to last year while non-GAAP earnings per share were up 33% to
$2.22.
"In Q4, we achieved a 19% new software license growth rate with almost no
help from acquisitions," said Oracle President and CFO, Safra Catz. "This
strong organic growth combined with continuously improving operational
efficiencies enabled us to deliver a 48% operating margin in the quarter.
As our results reflect, we clearly exceeded even our own high expectations
for Sun's business."
"In addition to record setting software sales, our Exadata and Exalogic
systems also made a strong contribution to our growth in Q4," said Oracle
President, Mark Hurd. "Today there are more than 1,000 Exadata machines
installed worldwide. Our goal is to triple that number in FY12."
"In FY11 Oracle's database business experienced its fastest growth in a
decade," said Oracle CEO, Larry Ellison. "Over the past few years we added
features to the Oracle database for both cloud computing and in-memory
databases that led to increased database sales this past year. Lately
we've been focused on the big business opportunity presented by Big Data."
In addition, Oracle also announced that its Board of Directors 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 July 13, 2011, with a payment date of August 3, 2011.
Q4 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: 7002523. To access the live webcast
of this event, please visit the Oracle Investor Relations website at
http://www.oracle.com/investor.
About Oracle
Oracle (NASDAQ: ORCL) is the world's most complete, open, and integrated
business software and hardware systems company. For more information about
Oracle, please visit http://www.oracle.com or contact Investor Relations at
investor_us@oracle.com or (650) 506-4073.
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,
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 global economic crisis and the current situation in Japan caused by the
recent earthquake and resulting tsunami, 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, risks relating to
compliance with international and U.S. laws that apply to our international
operations and risks to the sales of our products and services and supply
chain operations caused by the recent earthquake and tsunami in Japan. (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 June 23, 2011. Oracle
undertakes no duty to update any statement in light of new information or
future events.
ORACLE CORPORATION
Q4 FISCAL 2011 FINANCIAL RESULTS
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
($ in millions, except per share data)
% Increase
(Decrease)
Three Months Ended May 31, in
--------------------------------- % Increase Constant
% of % of (Decrease) Currency
2011 Revenues 2010 Revenues in US $ (1)
------ -------- ------ -------- ---------- ---------
REVENUES
New software
licenses $3,736 35% $3,135 33% 19% 12%
Software
license
updates and
product
support 3,961 36% 3,431 36% 15% 10%
------ -------- ------ --------
Software
Revenues 7,697 71% 6,566 69% 17% 11%
------ -------- ------ --------
Hardware
systems
products 1,157 11% 1,233 13% (6%) (11%)
Hardware
systems
support 673 6% 598 6% 12% 6%
------ -------- ------ --------
Hardware
Systems
Revenues 1,830 17% 1,831 19% 0% (5%)
------ -------- ------ --------
Services 1,248 12% 1,108 12% 13% 7%
------ -------- ------ --------
Total
Revenues 10,775 100% 9,505 100% 13% 7%
------ -------- ------ --------
OPERATING EXPENSES
Sales and
marketing 2,098 20% 1,745 18% 20% 15%
Software
license
updates and
product
support 350 3% 292 3% 20% 15%
Hardware
systems
products 511 5% 675 7% (24%) (29%)
Hardware
systems
support 309 3% 306 4% 1% (5%)
Services 1,000 9% 969 10% 3% (2%)
Research and
development 1,170 11% 1,063 11% 10% 8%
General and
administrative 255 2% 293 3% (13%) (15%)
Amortization
of intangible
assets 598 6% 605 6% (1%) (1%)
Acquisition
related and
other 48 0% 103 1% (54%) (59%)
Restructuring 77 1% 154 2% (50%) (56%)
------ -------- ------ --------
Total
Operating
Expenses 6,416 60% 6,205 65% 3% (1%)
------ -------- ------ --------
OPERATING INCOME 4,359 40% 3,300 35% 32% 22%
Interest
expense (195) (1%) (201) (2%) (3%) (3%)
Non-operating
income
(expense), net 6 0% (24) 0% 126% 120%
------ -------- ------ --------
INCOME BEFORE
PROVISION FOR
INCOME TAXES 4,170 39% 3,075 33% 36% 25%
------ -------- ------ --------
Provision for
income taxes 961 9% 711 8% 35% 24%
------ -------- ------ --------
NET INCOME $3,209 30% $2,364 25% 36% 25%
====== ======== ====== ========
EARNINGS PER
SHARE:
Basic $ 0.63 $ 0.47
Diluted $ 0.62 $ 0.46
WEIGHTED
AVERAGE
COMMON SHARES
OUTSTANDING:
Basic 5,065 5,022
Diluted 5,164 5,090
(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, 2010, 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
May 31, 2011 compared with the corresponding prior year period
increased our revenues by 6 percentage points, operating expenses by 4
percentage points and operating income by 10 percentage points.
ORACLE CORPORATION
Q4 FISCAL 2011 FINANCIAL RESULTS
RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES (1)
($ in millions, except per share data)
Three Months Ended May 31,
-------------------------------------------------
2011 2011 2010 2010
GAAP Adj. Non-GAAP GAAP Adj. Non-GAAP
------- ----- ------- ------ ------- -------
TOTAL REVENUES (3) (4) $10,775 $ 31 $10,806 $9,505 $ 126 $ 9,631
TOTAL SOFTWARE
REVENUES (3) $ 7,697 $ 17 $ 7,714 $6,566 $ 36 $ 6,602
New software
licenses 3,736 - 3,736 3,135 - 3,135
Software license
updates and product
support (3) 3,961 17 3,978 3,431 36 3,467
TOTAL HARDWARE SYSTEMS
REVENUES (4) $ 1,830 $ 14 $ 1,844 $1,831 $ 90 $ 1,921
Hardware systems
products 1,157 - 1,157 1,233 - 1,233
Hardware systems
support (4) 673 14 687 598 90 688
TOTAL OPERATING EXPENSES $ 6,416 $(848) $ 5,568 $6,205 $ (989) $ 5,216
Hardware systems
products 511 - 511 675 (6) 669
Stock-based
compensation (5) 125 (125) - 121 (121) -
Amortization of
intangible assets (6) 598 (598) - 605 (605) -
Acquisition related
and other 48 (48) - 103 (103) -
Restructuring 77 (77) - 154 (154) -
OPERATING INCOME $ 4,359 $ 879 $ 5,238 $3,300 $ 1,115 $ 4,415
OPERATING MARGIN % 40% 48% 35% 46%
INCOME TAX EFFECTS (7) $ 961 $ 216 $ 1,177 $ 711 $ 431 $ 1,142
NET INCOME $ 3,209 $ 663 $ 3,872 $2,364 $ 684 $ 3,048
DILUTED EARNINGS PER
SHARE $ 0.62 $ 0.75 $ 0.46 $ 0.60
DILUTED WEIGHTED
AVERAGE COMMON
SHARES OUTSTANDING 5,164 - 5,164 5,090 - 5,090
% Increase
% Increase (Decrease) in
(Decrease) in US $ Constant Currency (2)
-------------------- --------------------
GAAP Non-GAAP GAAP Non-GAAP
--------- --------- --------- ---------
TOTAL REVENUES (3) (4) 13% 12% 7% 6%
TOTAL SOFTWARE
REVENUES (3) 17% 17% 11% 10%
New software licenses 19% 19% 12% 12%
Software license
updates and product
support (3) 15% 15% 10% 9%
TOTAL HARDWARE SYSTEMS
REVENUES (4) 0% (4%) (5%) (9%)
Hardware systems
products (6%) (6%) (11%) (11%)
Hardware systems
support (4) 12% 0% 6% (6%)
TOTAL OPERATING EXPENSES 3% 7% (1%) 2%
Hardware systems
products (24%) (24%) (29%) (28%)
Stock-based
compensation (5) 4% * 4% *
Amortization of
intangible assets (6) (1%) * (1%) *
Acquisition related
and other (54%) * (59%) *
Restructuring (50%) * (56%) *
OPERATING INCOME 32% 19% 22% 11%
OPERATING MARGIN % 574 bp. 264 bp. 477 bp. 197 bp.
INCOME TAX EFFECTS (7) 35% 3% 24% (4%)
NET INCOME 36% 27% 25% 18%
DILUTED EARNINGS PER
SHARE 34% 25% 23% 16%
DILUTED WEIGHTED
AVERAGE COMMON
SHARES OUTSTANDING 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, 2010, 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 May 31, 2011, approximately $29 million, $9 million and $2
million in estimated revenues related to assumed software support
contracts will not be recognized for fiscal 2012, fiscal 2013 and
fiscal 2014, respectively, due to business combination accounting
rules.
(4) As of May 31, 2011, approximately $30 million and $11 million in
estimated revenues related to hardware systems support contracts will
not be recognized for 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
May 31, 2011 May 31, 2010
-------------------- --------------------
GAAP Adj. Non-GAAP GAAP Adj. Non-GAAP
---- ----- -------- ---- ----- --------
Sales and marketing $ 23 $ (23) $ - $ 24 $ (24) $ -
Software license updates and
product support 3 (3) - 5 (5) -
Hardware systems products - - - 1 (1) -
Hardware systems support 1 (1) - 1 (1) -
Services 3 (3) - 4 (4) -
Research and development 60 (60) - 50 (50) -
General and administrative 35 (35) - 36 (36) -
---- ----- -------- ---- ----- --------
Subtotal 125 (125) - 121 (121) -
---- ----- -------- ---- ----- --------
Acquisition related and
other 2 (2) - 5 (5) -
---- ----- -------- ---- ----- --------
Total stock-based
compensation $127 $(127) $ - $126 $(126) $ -
==== ===== ======== ==== ===== ========
(6) Estimated future annual amortization expense related to intangible
assets as of May 31, 2011 was as follows:
Fiscal 2012 $ 2,275
Fiscal 2013 1,902
Fiscal 2014 1,554
Fiscal 2015 1,155
Fiscal 2016 657
Thereafter 267
-------
Total intangible
assets subject to
amortization 7,810
In-process research
and development 50
-------
Total intangible
assets, net $ 7,860
=======
(7) Income tax effects were calculated reflecting an effective GAAP tax
rate of 23.1% and 23.1% in the fourth quarter of fiscal 2011 and 2010,
respectively, and an effective non-GAAP tax rate of 23.3% and 27.3% in
the fourth quarter of fiscal 2011 and 2010, respectively. The
differences between our GAAP and non-GAAP tax rates in the fourth
quarter of fiscal 2011 were primarily due to income tax effects related
to acquired tax exposures and tax benefits attributable to our
restructuring expenses in this period. The differences between our GAAP
and non-GAAP tax rates in the fourth quarter of fiscal 2010 were
primarily due to income tax effects of non-GAAP pretax income
adjustments including differences in jurisdictional tax rates and the
related tax benefits attributable to our restructuring expenses in this
period, and were also due to income tax effects related to acquired tax
exposures.
* Not meaningful
ORACLE CORPORATION
FISCAL 2011 YEAR TO DATE FINANCIAL RESULTS
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
($ in millions, except per share data)
% Increase
(Decrease)
Year Ended May 31, in
---------------------------------- % Increase Constant
% of % of (Decrease) Currency
2011 Revenues 2010 Revenues in US $ (1)
------ -------- ------ -------- --------- --------
REVENUES
New software
licenses $9,235 26% $7,533 28% 23% 19%
Software license
updates and
product
support 14,796 42% 13,092 49% 13% 12%
------ -------- ------ --------
Software
Revenues 24,031 68% 20,625 77% 17% 15%
------ -------- ------ --------
Hardware
systems
products 4,382 12% 1,506 6% 191% 184%
Hardware
systems
support 2,562 7% 784 3% 227% 218%
------ -------- ------ --------
Hardware
Systems
Revenues 6,944 19% 2,290 9% 203% 195%
------ -------- ------ --------
Services 4,647 13% 3,905 14% 19% 17%
------ -------- ------ --------
Total
Revenues 35,622 100% 26,820 100% 33% 30%
------ -------- ------ --------
OPERATING EXPENSES
Sales and
marketing 6,579 18% 5,080 19% 30% 28%
Software license
updates and
product
support 1,264 3% 1,063 4% 19% 17%
Hardware
systems
products 2,057 6% 880 3% 134% 126%
Hardware
systems
support 1,259 3% 423 2% 198% 189%
Services 3,818 11% 3,398 13% 12% 11%
Research and
development 4,519 13% 3,254 12% 39% 38%
General and
administrative
(2) 970 3% 911 3% 6% 5%
Amortization
of intangible
assets 2,428 7% 1,973 7% 23% 23%
Acquisition
related and
other 208 1% 154 1% 35% 27%
Restructuring 487 1% 622 2% (22%) (23%)
------ -------- ------ --------
Total
Operating
Expenses 23,589 66% 17,758 66% 33% 31%
------ -------- ------ --------
OPERATING INCOME 12,033 34% 9,062 34% 33% 29%
Interest
expense (808) (3%) (754) (3%) 7% 7%
Non-operating
income
(expense), net 186 1% (65) 0% 388% 372%
------ -------- ------ --------
INCOME BEFORE
PROVISION FOR
INCOME TAXES 11,411 32% 8,243 31% 38% 35%
------ -------- ------ --------
Provision for
income taxes 2,864 8% 2,108 8% 36% 32%
------ -------- ------ --------
NET INCOME $8,547 24% $6,135 23% 39% 36%
====== ======== ====== ========
EARNINGS PER
SHARE:
Basic $ 1.69 $ 1.22
Diluted $ 1.67 $ 1.21
WEIGHTED AVERAGE
COMMON SHARES
OUTSTANDING:
Basic 5,048 5,014
Diluted 5,128 5,073
(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, 2010, 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 year ended May 31, 2011
compared with the corresponding prior year increased our revenues by 3
percentage points, operating expenses by 2 percentage points and
operating income by 4 percentage points.
(2) General and administrative expenses for the year ended May 31, 2011
included a benefit of $120 million related to the recovery of legal
costs.
ORACLE CORPORATION
FISCAL 2011 YEAR TO DATE FINANCIAL RESULTS
RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES (1)
($ in millions, except per share data)
Year Ended May 31,
----------------------------------------------------
2011 2011 2010 2010
GAAP Adj. Non-GAAP GAAP Adj. Non-GAAP
------- ------- ------- ------- ------- -------
TOTAL REVENUES (3)(4) $35,622 $ 228 $35,850 $26,820 $ 214 $27,034
TOTAL SOFTWARE
REVENUES (3) $24,031 $ 80 $24,111 $20,625 $ 86 $20,711
New software
licenses 9,235 - 9,235 7,533 - 7,533
Software license
updates and product
support (3) 14,796 80 14,876 13,092 86 13,178
TOTAL HARDWARE
SYSTEMS REVENUES (4) $ 6,944 $ 148 $ 7,092 $ 2,290 $ 128 $ 2,418
Hardware systems
products 4,382 - 4,382 1,506 - 1,506
Hardware systems
support (4) 2,562 148 2,710 784 128 912
TOTAL OPERATING
EXPENSES $23,589 $(3,623) $19,966 $17,758 $(3,199) $14,559
Hardware systems
products 2,057 (2) 2,055 880 (29) 851
Stock-based
compensation (5) 498 (498) - 421 (421) -
Amortization of
intangible
assets (6) 2,428 (2,428) - 1,973 (1,973) -
Acquisition
related and
other 208 (208) - 154 (154) -
Restructuring 487 (487) - 622 (622) -
OPERATING INCOME $12,033 $ 3,851 $15,884 $ 9,062 $ 3,413 $12,475
OPERATING MARGIN % 34% 44% 34% 46%
INCOME TAX
EFFECTS (7) $ 2,864 $ 1,003 $ 3,867 $ 2,108 $ 1,054 $ 3,162
NET INCOME $ 8,547 $ 2,848 $11,395 $ 6,135 $ 2,359 $ 8,494
DILUTED EARNINGS PER
SHARE $ 1.67 $ 2.22 $ 1.21 $ 1.67
DILUTED WEIGHTED
AVERAGE COMMON
SHARES OUTSTANDING 5,128 - 5,128 5,073 - 5,073
% Increase
% Increase (Decrease) in
(Decrease) in US $ Constant Currency (2)
-------------------- --------------------
GAAP Non-GAAP GAAP Non-GAAP
--------- --------- --------- ---------
TOTAL REVENUES (3) (4) 33% 33% 30% 30%
TOTAL SOFTWARE
REVENUES (3) 17% 16% 15% 14%
New software
licenses 23% 23% 19% 19%
Software license
updates and
product
support (3) 13% 13% 12% 12%
TOTAL HARDWARE
SYSTEMS REVENUES (4) 203% 193% 195% 186%
Hardware systems
products 191% 191% 184% 184%
Hardware systems
support (4) 227% 197% 218% 189%
TOTAL OPERATING
EXPENSES 33% 37% 31% 35%
Hardware systems
products 134% 142% 126% 134%
Stock-based
compensation (5) 19% * 19% *
Amortization of
intangible
assets (6) 23% * 23% *
Acquisition
related and
other 35% * 27% *
Restructuring (22%) * (23%) *
OPERATING INCOME 33% 27% 29% 24%
OPERATING MARGIN % (1) bp. (184) bp. (37) bp. (208) bp.
INCOME TAX
EFFECTS (7) 36% 22% 32% 20%
NET INCOME 39% 34% 36% 31%
DILUTED EARNINGS PER
SHARE 38% 33% 34% 30%
DILUTED WEIGHTED
AVERAGE COMMON
SHARES OUTSTANDING 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, 2010, 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 May 31, 2011, approximately $29 million, $9 million and $2
million in estimated revenues related to assumed software support
contracts will not be recognized for fiscal 2012, fiscal 2013 and
fiscal 2014, respectively, due to business combination accounting
rules.
(4) As of May 31, 2011, approximately $30 million and $11 million in
estimated revenues related to hardware systems support contracts will
not be recognized for 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:
Year Ended Year Ended
May 31, 2011 May 31, 2010
---------------------- ----------------------
GAAP Adj. Non-GAAP GAAP Adj. Non-GAAP
------ ----- -------- ------ ----- --------
Sales and marketing $ 87 $ (87) $ - $ 81 $ (81) $ -
Software license updates
and product support 14 (14) - 17 (17) -
Hardware systems
products 2 (2) - 3 (3) -
Hardware systems support 5 (5) - 2 (2) -
Services 16 (16) - 14 (14) -
Research and development 231 (231) - 172 (172) -
General and
administrative 145 (145) - 132 (132) -
------ ----- -------- ------ ----- --------
Subtotal 500 (500) - 421 (421) -
------ ----- -------- ------ ----- --------
Acquisition related and
other 10 (10) - 15 (15) -
------ ----- -------- ------ ----- --------
Total stock-based
compensation $ 510 $(510) $ - $ 436 $(436) $ -
====== ===== ======== ====== ===== ========
(6) Estimated future annual amortization expense related to intangible
assets as of May 31, 2011 was as follows:
Fiscal 2012 $2,275
Fiscal 2013 1,902
Fiscal 2014 1,554
Fiscal 2015 1,155
Fiscal 2016 657
Thereafter 267
------
Total intangible assets
subject to
amortization 7,810
In-process research and
development 50
------
Total intangible
assets, net $7,860
======
(7) Income tax effects were calculated reflecting an effective GAAP tax
rate of 25.1% and 25.6% in fiscal 2011 and 2010, respectively, and an
effective non-GAAP tax rate of 25.3% and 27.1% in fiscal 2011 and 2010,
respectively. The differences between our GAAP and non-GAAP tax rates
in both fiscal 2011 and fiscal 2010 were primarily due to differences
in jurisdictional tax rates and the related tax benefits attributable
to our restructuring expenses in these periods, and were also due to
income tax effects related to acquired tax exposures.
* Not meaningful
ORACLE CORPORATION
FISCAL 2011 FINANCIAL RESULTS
CONDENSED CONSOLIDATED BALANCE SHEETS
($ in millions)
May 31, May 31,
2011 2010
--------- ---------
ASSETS
Current Assets:
Cash and cash equivalents $ 16,163 $ 9,914
Marketable securities 12,685 8,555
Trade receivables, net 6,628 5,585
Inventories 303 259
Deferred tax assets 1,189 1,159
Prepaid expenses and other current assets 2,206 1,532
--------- ---------
Total Current Assets 39,174 27,004
Non-Current Assets:
Property, plant and equipment, net 2,857 2,763
Intangible assets, net 7,860 9,321
Goodwill 21,553 20,425
Deferred tax assets 1,076 1,267
Other assets 1,015 798
--------- ---------
Total Non-Current Assets 34,361 34,574
--------- ---------
TOTAL ASSETS $ 73,535 $ 61,578
========= =========
LIABILITIES AND EQUITY
Current Liabilities:
Notes payable, current and other current borrowings $ 1,150 $ 3,145
Accounts payable 701 775
Accrued compensation and related benefits 2,320 1,895
Deferred revenues 6,802 5,900
Other current liabilities 3,219 2,976
--------- ---------
Total Current Liabilities 14,192 14,691
Non-Current Liabilities:
Notes payable and other non-current borrowings 14,772 11,510
Income taxes payable 3,169 2,695
Deferred tax liabilities 59 424
Other non-current liabilities 1,098 1,059
--------- ---------
Total Non-Current Liabilities 19,098 15,688
Equity 40,245 31,199
--------- ---------
TOTAL LIABILITIES AND EQUITY $ 73,535 $ 61,578
========= =========
ORACLE CORPORATION
FISCAL 2011 FINANCIAL RESULTS
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
($ in millions)
Year Ended May 31,
------------------
2011 2010
-------- --------
Cash Flows From Operating Activities:
Net income $ 8,547 $ 6,135
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 368 298
Amortization of intangible assets 2,428 1,973
Deferred income taxes (253) (511)
Stock-based compensation 510 436
Tax benefits on the exercise of stock options and
vesting of restricted stock-based awards 325 203
Excess tax benefits on the exercise of stock options
and vesting of restricted stock-based awards (215) (110)
Other, net 68 13
Changes in operating assets and liabilities, net of
effects from acquisitions:
Increase in trade receivables, net (565) (219)
(Increase) decrease in inventories (28) 73
Decrease in prepaid expenses and other assets 14 340
Decrease in accounts payable and other liabilities (120) (360)
Decrease in income taxes payable (96) (79)
Increase in deferred revenues 231 489
-------- --------
Net cash provided by operating activities 11,214 8,681
-------- --------
Cash Flows From Investing Activities:
Purchases of marketable securities and other
investments (31,009) (15,703)
Proceeds from maturities and sales of marketable
securities and other investments 27,120 11,220
Acquisitions, net of cash acquired (1,847) (5,606)
Capital expenditures (450) (230)
Proceeds from sale of property 105 -
-------- --------
Net cash used for investing activities (6,081) (10,319)
-------- --------
Cash Flows From Financing Activities:
Payments for repurchases of common stock (1,160) (992)
Proceeds from issuances of common stock 1,376 874
Payments of dividends to stockholders (1,061) (1,004)
Proceeds from borrowings, net of issuance costs 4,354 7,220
Repayments of borrowings (3,143) (3,582)
Excess tax benefits on the exercise of stock options
and vesting of restricted stock-based awards 215 110
Distributions to noncontrolling interests (65) (59)
Other, net - 97
-------- --------
Net cash provided by financing activities 516 2,664
-------- --------
Effect of exchange rate changes on cash and cash
equivalents 600 (107)
-------- --------
Net increase in cash and cash equivalents 6,249 919
-------- --------
Cash and cash equivalents at beginning of period 9,914 8,995
-------- --------
Cash and cash equivalents at end of period $ 16,163 $ 9,914
======== ========
ORACLE CORPORATION
FISCAL 2011 FINANCIAL RESULTS
FREE CASH FLOW - TRAILING 4-QUARTERS (1)
($ in millions)
Fiscal 2010 Fiscal 2011
------------------------------ -------------------------------
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
------ ------ ------ ------ ------ ------ ------ -------
GAAP
Operating
Cash Flow $8,753 $8,654 $8,178 $8,681 $8,760 $9,053 $9,948 $11,214
Capital
Expenditures
(2) (261) (230) (199) (230) (293) (369) (441) (450)
------ ------ ------ ------ ------ ------ ------ -------
Free Cash
Flow $8,492 $8,424 $7,979 $8,451 $8,467 $8,684 $9,507 $10,764
====== ====== ====== ====== ====== ====== ====== =======
% Growth
over prior
year 14% 11% 0% 9% 0% 3% 19% 27%
------ ------ ------ ------ ------ ------ ------ -------
GAAP Net
Income $5,640 $5,802 $5,663 $6,135 $6,363 $6,776 $7,701 $ 8,547
Free Cash
Flow as a
% of Net
Income 151% 145% 141% 138% 133% 128% 123% 126%
====== ====== ====== ====== ====== ====== ====== =======
(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
FISCAL 2011 FINANCIAL RESULTS
SUPPLEMENTAL ANALYSIS OF GAAP REVENUES AND HEADCOUNT (1)
($ in millions)
Fiscal 2010
-------------------------------------------
Q1 Q2 Q3 Q4 TOTAL
------- ------- ------- ------- -------
REVENUES
New software licenses $ 1,028 $ 1,653 $ 1,718 $ 3,135 $ 7,533
Software license updates and
product support 3,117 3,247 3,297 3,431 13,092
------- ------- ------- ------- -------
Software Revenues 4,145 4,900 5,015 6,566 20,625
Hardware systems products - - 273 1,233 1,506
Hardware systems support - - 185 598 784
------- ------- ------- ------- -------
Hardware Systems Revenues - - 458 1,831 2,290
Consulting 663 692 651 713 2,720
Cloud Services 180 188 211 295 874
Education 66 78 69 100 311
------- ------- ------- ------- -------
Services Revenues 909 958 931 1,108 3,905
------- ------- ------- ------- -------
Total Revenues $ 5,054 $ 5,858 $ 6,404 $ 9,505 $26,820
======= ======= ======= ======= =======
AS REPORTED REVENUE GROWTH
RATES
New software licenses (17%) 2% 13% 14% 6%
Software license updates and
product support 6% 14% 13% 12% 11%
Software Revenues (1%) 9% 13% 13% 9%
Hardware systems products * * * * *
Hardware systems support * * * * *
Hardware Systems Revenues * * * * *
Consulting (23%) (18%) (14%) (9%) (16%)
Cloud Services (8%) (1%) 10% 45% 12%
Education (34%) (22%) (4%) 26% (11%)
Services Revenues (22%) (15%) (9%) 4% (11%)
Total Revenues (5%) 4% 17% 39% 15%
CONSTANT CURRENCY GROWTH
RATES (2)
New software licenses (14%) (5%) 8% 15% 4%
Software license updates and
product support 11% 9% 8% 11% 10%
Software Revenues 4% 4% 8% 13% 8%
Hardware systems products * * * * *
Hardware systems support * * * * *
Hardware Systems Revenues * * * * *
Consulting (19%) (22%) (18%) (10%) (17%)
Cloud Services (3%) (4%) 6% 44% 11%
Education (30%) (26%) (8%) 24% (12%)
Services Revenues (18%) (19%) (13%) 3% (12%)
Total Revenues (1%) 0% 12% 38% 14%
======= ======= ======= ======= =======
GEOGRAPHIC REVENUES
REVENUES
Americas $ 2,671 $ 2,979 $ 3,284 $ 4,886 $13,819
Europe, Middle East & Africa 1,642 1,976 2,167 3,153 8,938
Asia Pacific 741 903 953 1,466 4,063
------- ------- ------- ------- -------
Total Revenues $ 5,054 $ 5,858 $ 6,404 $ 9,505 $26,820
======= ======= ======= ======= =======
HEADCOUNT
GEOGRAPHIC AREA
Americas 32,034 31,849 44,554 43,968
Europe, Middle East & Africa 16,839 16,491 23,566 23,040
Asia Pacific 35,766 35,026 38,372 37,561
------- ------- ------- ------- -------
Total Company 84,639 83,366 106,492 104,569
======= ======= ======= ======= =======
Fiscal 2011
-------------------------------------------
Q1 Q2 Q3 Q4 TOTAL
------- ------- ------- ------- -------
REVENUES
New software licenses $ 1,286 $ 1,999 $ 2,214 $ 3,736 $ 9,235
Software license updates and
product support 3,450 3,645 3,740 3,961 14,796
------- ------- ------- ------- -------
Software Revenues 4,736 5,644 5,954 7,697 24,031
Hardware systems products 1,079 1,112 1,035 1,157 4,382
Hardware systems support 619 641 629 673 2,562
------- ------- ------- ------- -------
Hardware Systems Revenues 1,698 1,753 1,664 1,830 6,944
Consulting 666 738 722 787 2,914
Cloud Services 321 350 341 367 1,378
Education 81 97 83 94 355
------- ------- ------- ------- -------
Services Revenues 1,068 1,185 1,146 1,248 4,647
------- ------- ------- ------- -------
Total Revenues $ 7,502 $ 8,582 $ 8,764 $10,775 $35,622
======= ======= ======= ======= =======
AS REPORTED REVENUE GROWTH
RATES
New software licenses 25% 21% 29% 19% 23%
Software license updates and
product support 11% 12% 13% 15% 13%
Software Revenues 14% 15% 19% 17% 17%
Hardware systems products * * 279% (6%) 191%
Hardware systems support * * 239% 12% 227%
Hardware Systems Revenues * * 263% 0% 203%
Consulting 0% 7% 11% 10% 7%
Cloud Services 78% 86% 61% 24% 58%
Education 24% 25% 20% (6%) 14%
Services Revenues 18% 24% 23% 13% 19%
Total Revenues 48% 47% 37% 13% 33%
CONSTANT CURRENCY GROWTH
RATES (2)
New software licenses 25% 23% 27% 12% 19%
Software license updates and
product support 12% 13% 12% 10% 12%
Software Revenues 15% 17% 17% 11% 15%
Hardware systems products * * 274% (11%) 184%
Hardware systems support * * 234% 6% 218%
Hardware Systems Revenues * * 258% (5%) 195%
Consulting 1% 8% 10% 5% 6%
Cloud Services 80% 86% 58% 16% 54%
Education 24% 26% 19% (11%) 12%
Services Revenues 18% 25% 21% 7% 17%
Total Revenues 49% 48% 35% 7% 30%
======= ======= ======= ======= =======
GEOGRAPHIC REVENUES
REVENUES
Americas $ 3,904 $ 4,452 $ 4,509 $ 5,487 $18,352
Europe, Middle East & Africa 2,381 2,738 2,815 3,564 11,497
Asia Pacific 1,217 1,392 1,440 1,724 5,773
------- ------- ------- ------- -------
Total Revenues $ 7,502 $ 8,582 $ 8,764 $10,775 $35,622
======= ======= ======= ======= =======
HEADCOUNT
GEOGRAPHIC AREA
Americas 44,494 44,815 45,825 45,887
Europe, Middle East & Africa 22,886 22,690 22,705 22,394
Asia Pacific 37,856 38,225 39,340 40,148
------- ------- ------- ------- -------
Total Company 105,236 105,730 107,870 108,429
======= ======= ======= ======= =======
(1) The sum of the quarterly financial information may vary from
year-to-date financial information due to rounding.
(2) We compare the percent change in the results from one period to
another period using constant currency disclosure. We present constant
currency information to provide a framework for assessing how our
underlying businesses performed excluding the effect of foreign
currency rate fluctuations. To present this information, current and
comparative prior period results for entities reporting in currencies
other than United States dollars are converted into United States
dollars at the exchange rates in effect on May 31, 2010 and 2009 for
the fiscal 2011 and fiscal 2010 constant currency growth rate
calculations presented, respectively, rather than the actual exchange
rates in effect during the respective periods.
* Not meaningful
ORACLE CORPORATION
FISCAL 2011 FINANCIAL RESULTS
SUPPLEMENTAL TOTAL SOFTWARE PRODUCT REVENUE ANALYSIS (1)
($ in millions)
Fiscal 2010
-------------------------------------------
Q1 Q2 Q3 Q4 TOTAL
------- ------- ------- ------- -------
SOFTWARE REVENUES
DATABASE & MIDDLEWARE
REVENUES
New software licenses $ 711 $ 1,175 $ 1,241 $ 2,280 $ 5,406
Software license updates
and product support 2,065 2,131 2,191 2,309 8,696
------- ------- ------- ------- -------
Database and Middleware
Revenues $ 2,776 $ 3,306 $ 3,432 $ 4,589 $14,102
======= ======= ======= ======= =======
AS REPORTED GROWTH RATES
New software licenses (22%) 1% 11% 18% 6%
Software license updates
and product support 9% 16% 14% 15% 14%
Database and Middleware
Revenues (1%) 10% 13% 16% 10%
CONSTANT CURRENCY GROWTH
RATES (2)
New software licenses (19%) (5%) 5% 18% 4%
Software license updates
and product support 14% 12% 9% 13% 12%
Database and Middleware
Revenues 4% 5% 8% 16% 9%
======= ======= ======= ======= =======
APPLICATIONS REVENUES
New software licenses $ 317 $ 478 $ 477 $ 855 $ 2,127
Software license updates
and product support 1,052 1,116 1,106 1,122 4,396
------- ------- ------- ------- -------
Applications Revenues $ 1,369 $ 1,594 $ 1,583 $ 1,977 $ 6,523
======= ======= ======= ======= =======
AS REPORTED GROWTH RATES
New software licenses (4%) 2% 21% 6% 6%
Software license updates
and product support 1% 10% 10% 8% 7%
Applications Revenues 0% 7% 13% 7% 7%
CONSTANT CURRENCY GROWTH
RATES (2)
New software licenses 0% (3%) 15% 7% 5%
Software license updates
and product support 6% 6% 5% 6% 6%
Applications Revenues 4% 3% 8% 6% 5%
======= ======= ======= ======= =======
Fiscal 2011
-------------------------------------------
Q1 Q2 Q3 Q4 TOTAL
------- ------- ------- ------- -------
SOFTWARE REVENUES
DATABASE & MIDDLEWARE
REVENUES
New software licenses $ 937 $ 1,420 $ 1,575 $ 2,694 $ 6,626
Software license updates
and product support 2,316 2,443 2,523 2,663 9,945
------- ------- ------- ------- -------
Database and Middleware
Revenues $ 3,253 $ 3,863 $ 4,098 $ 5,357 $16,571
======= ======= ======= ======= =======
AS REPORTED GROWTH RATES
New software licenses 32% 21% 27% 18% 23%
Software license updates
and product support 12% 15% 15% 15% 14%
Database and Middleware
Revenues 17% 17% 19% 17% 18%
CONSTANT CURRENCY GROWTH
RATES (2)
New software licenses 32% 23% 26% 10% 19%
Software license updates
and product support 13% 16% 14% 10% 13%
Database and Middleware
Revenues 18% 18% 18% 10% 15%
======= ======= ======= ======= =======
APPLICATIONS REVENUES
New software licenses $ 349 $ 579 $ 639 $ 1,042 $ 2,609
Software license updates
and product support 1,134 1,202 1,217 1,298 4,851
------- ------- ------- ------- -------
Applications Revenues $ 1,483 $ 1,781 $ 1,856 $ 2,340 $ 7,460
======= ======= ======= ======= =======
AS REPORTED GROWTH RATES
New software licenses 10% 21% 34% 22% 23%
Software license updates
and product support 8% 8% 10% 16% 10%
Applications Revenues 8% 12% 17% 18% 14%
CONSTANT CURRENCY GROWTH
RATES (2)
New software licenses 10% 22% 31% 16% 20%
Software license updates
and product support 9% 9% 9% 10% 9%
Applications Revenues 9% 13% 16% 12% 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, 2010 and 2009 for
the fiscal 2011 and fiscal 2010 constant currency growth rate
calculations presented, respectively, rather than the actual exchange
rates in effect during the respective periods.
ORACLE CORPORATION
FISCAL 2011 FINANCIAL RESULTS
SUPPLEMENTAL GEOGRAPHIC NEW SOFTWARE LICENSE AND HARDWARE SYSTEMS PRODUCTS
REVENUES ANALYSIS (1)
($ in millions)
Fiscal 2010
--------------------------------------
Q1 Q2 Q3 Q4 TOTAL
------ ------ ------ ------ ------
AMERICAS
Database & Middleware $ 310 $ 492 $ 540 $1,123 $2,465
Applications 185 286 283 485 1,239
------ ------ ------ ------ ------
New Software License Revenues $ 495 $ 778 $ 823 $1,608 $3,704
====== ====== ====== ====== ======
Hardware Systems Products
Revenues $ - $ - $ 131 $ 617 $ 747
====== ====== ====== ====== ======
AS REPORTED GROWTH RATES
Database & Middleware (12%) 4% 20% 34% 17%
Applications 2% 2% 26% 16% 12%
New Software License Revenues (7%) 4% 22% 28% 15%
Hardware Systems Products
Revenues * * * * *
CONSTANT CURRENCY GROWTH RATES (2)
Database & Middleware (11%) 2% 16% 32% 15%
Applications 6% 1% 23% 15% 11%
New Software License Revenues (5%) 1% 18% 26% 14%
Hardware Systems Products
Revenues * * * * *
------ ------ ------ ------ ------
EUROPE / MIDDLE EAST / AFRICA
Database & Middleware $ 224 $ 429 $ 456 $ 751 $1,859
Applications 90 119 134 261 604
------ ------ ------ ------ ------
New Software License Revenues $ 314 $ 548 $ 590 $1,012 $2,463
====== ====== ====== ====== ======
Hardware Systems Products
Revenues $ - $ - $ 95 $ 390 $ 485
====== ====== ====== ====== ======
AS REPORTED GROWTH RATES
Database & Middleware (31%) (1%) 2% (1%) (5%)
Applications (5%) (6%) 7% (7%) (4%)
New Software License Revenues (25%) (2%) 3% (3%) (5%)
Hardware Systems Products
Revenues * * * * *
CONSTANT CURRENCY GROWTH RATES (2)
Database & Middleware (26%) (10%) (3%) 6% (5%)
Applications 3% (14%) 1% (2%) (3%)
New Software License Revenues (20%) (11%) (2%) 4% (4%)
Hardware Systems Products
Revenues * * * * *
------ ------ ------ ------ ------
ASIA PACIFIC
Database & Middleware $ 177 $ 254 $ 245 $ 406 $1,082
Applications 42 73 60 109 284
------ ------ ------ ------ ------
New Software License Revenues $ 219 $ 327 $ 305 $ 515 $1,366
====== ====== ====== ====== ======
Hardware Systems Products
Revenues $ - $ - $ 47 $ 226 $ 274
====== ====== ====== ====== ======
AS REPORTED GROWTH RATES
Database & Middleware (22%) 0% 9% 19% 3%
Applications (24%) 17% 29% 2% 5%
New Software License Revenues (22%) 3% 12% 15% 4%
Hardware Systems Products
Revenues * * * * *
CONSTANT CURRENCY GROWTH RATES (2)
Database & Middleware (22%) (10%) 1% 14% (3%)
Applications (23%) 2% 16% (3%) (2%)
New Software License Revenues (22%) (8%) 4% 10% (3%)
Hardware Systems Products
Revenues * * * * *
------ ------ ------ ------ ------
TOTAL COMPANY
Database & Middleware $ 711 $1,175 $1,241 $2,280 $5,406
Applications 317 478 477 855 2,127
------ ------ ------ ------ ------
New Software License Revenues $1,028 $1,653 $1,718 $3,135 $7,533
====== ====== ====== ====== ======
Hardware Systems Products
Revenues $ - $ - $ 273 $1,233 $1,506
====== ====== ====== ====== ======
AS REPORTED GROWTH RATES
Database & Middleware (22%) 1% 11% 18% 6%
Applications (4%) 2% 21% 6% 6%
New Software License Revenues (17%) 2% 13% 14% 6%
Hardware Systems Products
Revenues * * * * *
CONSTANT CURRENCY GROWTH RATES (2)
Database & Middleware (19%) (5%) 5% 18% 4%
Applications 0% (3%) 15% 7% 5%
New Software License Revenues (14%) (5%) 8% 15% 4%
Hardware Systems Products
Revenues * * * * *
====== ====== ====== ====== ======
Fiscal 2011
--------------------------------------
Q1 Q2 Q3 Q4 TOTAL
------ ------ ------ ------ ------
AMERICAS
Database & Middleware $ 446 $ 671 $ 755 $1,284 $3,155
Applications 212 359 355 580 1,507
------ ------ ------ ------ ------
New Software License Revenues $ 658 $1,030 $1,110 $1,864 $4,662
====== ====== ====== ====== ======
Hardware Systems Products
Revenues $ 543 $ 602 $ 506 $ 599 $2,248
====== ====== ====== ====== ======
AS REPORTED GROWTH RATES
Database & Middleware 44% 36% 40% 14% 28%
Applications 14% 26% 26% 20% 22%
New Software License Revenues 33% 32% 35% 16% 26%
Hardware Systems Products
Revenues * * 287% (3%) 201%
CONSTANT CURRENCY GROWTH RATES (2)
Database & Middleware 43% 36% 39% 12% 27%
Applications 14% 26% 24% 18% 20%
New Software License Revenues 32% 32% 34% 14% 24%
Hardware Systems Products
Revenues * * 285% (4%) 199%
------ ------ ------ ------ ------
EUROPE / MIDDLE EAST / AFRICA
Database & Middleware $ 279 $ 426 $ 505 $ 925 $2,137
Applications 73 148 197 308 724
------ ------ ------ ------ ------
New Software License Revenues $ 352 $ 574 $ 702 $1,233 $2,861
====== ====== ====== ====== ======
Hardware Systems Products
Revenues $ 338 $ 329 $ 330 $ 341 $1,337
====== ====== ====== ====== ======
AS REPORTED GROWTH RATES
Database & Middleware 25% (1%) 11% 23% 15%
Applications (19%) 23% 47% 18% 20%
New Software License Revenues 12% 5% 19% 22% 16%
Hardware Systems Products
Revenues * * 246% (13%) 176%
CONSTANT CURRENCY GROWTH RATES (2)
Database & Middleware 32% 7% 12% 9% 12%
Applications (16%) 31% 46% 7% 16%
New Software License Revenues 18% 12% 20% 9% 13%
Hardware Systems Products
Revenues * * 246% (21%) 165%
------ ------ ------ ------ ------
ASIA PACIFIC
Database & Middleware $ 212 $ 323 $ 315 $ 485 $1,334
Applications 64 72 87 154 378
------ ------ ------ ------ ------
New Software License Revenues $ 276 $ 395 $ 402 $ 639 $1,712
====== ====== ====== ====== ======
Hardware Systems Products
Revenues $ 198 $ 181 $ 199 $ 217 $ 797
====== ====== ====== ====== ======
AS REPORTED GROWTH RATES
Database & Middleware 19% 27% 28% 20% 23%
Applications 54% (1%) 45% 41% 33%
New Software License Revenues 26% 21% 32% 24% 25%
Hardware Systems Products
Revenues * * 325% (4%) 191%
CONSTANT CURRENCY GROWTH RATES (2)
Database & Middleware 13% 22% 20% 8% 15%
Applications 47% (5%) 34% 27% 24%
New Software License Revenues 19% 16% 23% 12% 16%
Hardware Systems Products
Revenues * * 295% (13%) 173%
------ ------ ------ ------ ------
TOTAL COMPANY
Database & Middleware $ 937 $1,420 $1,575 $2,694 $6,626
Applications 349 579 639 1,042 2,609
------ ------ ------ ------ ------
New Software License Revenues $1,286 $1,999 $2,214 $3,736 $9,235
====== ====== ====== ====== ======
Hardware Systems Products
Revenues $1,079 $1,112 $1,035 $1,157 $4,382
====== ====== ====== ====== ======
AS REPORTED GROWTH RATES
Database & Middleware 32% 21% 27% 18% 23%
Applications 10% 21% 34% 22% 23%
New Software License Revenues 25% 21% 29% 19% 23%
Hardware Systems Products
Revenues * * 279% (6%) 191%
CONSTANT CURRENCY GROWTH RATES (2)
Database & Middleware 32% 23% 26% 10% 19%
Applications 10% 22% 31% 16% 20%
New Software License Revenues 25% 23% 27% 12% 19%
Hardware Systems Products
Revenues * * 274% (11%) 184%
====== ====== ====== ====== ======
(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, 2010 and 2009 for
the fiscal 2011 and fiscal 2010 constant currency growth rate
calculations presented, respectively, rather than the actual exchange
rates in effect during the respective periods.
* Not meaningful
APPENDIX A
ORACLE CORPORATION
FISCAL 2011 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:
- 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.
- Hardware systems products expenses: We have excluded the effects
of the fair value adjustments to our inventories acquired from Sun that
were sold to customers in the periods presented, which resulted in the
exclusion of these adjustments from our hardware systems products expenses
and net income measures. Business combination accounting rules require us
to account for inventories assumed from our acquisitions at their fair
values. The non-GAAP adjustment to our hardware systems products expenses
is intended to reflect the hardware systems products expenses that would
have been otherwise recorded by Sun as a standalone entity upon the sale of
these inventories. We believe this adjustment is useful to investors as a
measure of the ongoing performance of our business because we do not expect
the fair value adjustments to our inventories to recur in future periods
with respect to the Sun acquisition and, therefore, we expect that these
adjustments will not impact our future operating expenses. Investors
should note that other factors may affect the future values of our
inventories and hardware systems products expenses. If we assume
inventories in future acquisitions, we will be required to assess their
fair values, which may result in fair value adjustments to those
inventories.
- 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 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.
- 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 after the measurement
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 generally diminish over time with respect to past
acquisitions, we generally will incur these expenses in connection with any
future acquisitions.