8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported)           March 20, 2006

Oracle Corporation

(Exact name of Registrant as Specified in its Charter)

Delaware	000-51788	54-2185193
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

500 Oracle Parkway, Redwood City, California	94065
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s telephone number, including area code           (650) 506-7000

N/A

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Section 2—Financial Information

Item 2.02 Results of Operations and Financial Condition

On March 20, 2006, Oracle Corporation issued a press release announcing financial results for its fiscal third quarter ended February 28, 2006. A copy of this press release is furnished as Exhibit 99.1 to this report.

Section 9—Financial Statements and Exhibits

Item 9.01 Financial Statements and Exhibits

(d) Exhibits

99.1 Press Release dated March 20, 2006

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

		ORACLE CORPORATION
Date: March 20, 2006	By:	/s/ SAFRA A. CATZ
		Safra A. Catz President and Chief Financial Officer

Exhibit Index

99.1 Press Release dated March 20, 2006

EX-99.1

Exhibit 99.1

News Release

Contacts: Krista Bessinger Oracle Investor Relations (650) 506-4073 Bob Wynne Oracle Corporate Communications (650) 506-5834

ORACLE REPORTS Q3 GAAP EPS UP 40% TO 14 CENTS, NON-GAAP EPS UP 21% TO 19 CENTS

GAAP Applications New License Revenues Up 77%, GAAP Total Revenues Up 18% to $3.5 Billion

REDWOOD SHORES, Calif., March 20, 2006 — Oracle Corporation (NASDAQ: ORCL) today announced that in Q3 fiscal 2006 GAAP earnings per share were $0.14, up 40% compared to the same quarter last year. Third quarter GAAP revenues were up 18% to $3.5 billion, while quarterly GAAP net income was up 42% to $765 million. Total GAAP software revenues were up 20% to $2.8 billion with GAAP database and middleware new license revenues up 5% and GAAP applications new license revenues up 77%. GAAP services revenues were up 9% to $671 million compared to the same quarter last year.

Non-GAAP earnings per share were $0.19 in Q3, up 21% compared to the same quarter last year. Non-GAAP net income was up 23% to $1 billion compared to Q3 last year.

“We reported record revenues for the quarter and delivered non-GAAP EPS of 19 cents,” said Oracle President and CFO, Safra Catz. “Our non-GAAP operating margins reached record levels for the quarter as well, exceeding all previous third quarter results.”

“SAP’s strongest geographical region is Europe,” said Oracle President, Charles Phillips. “So we are especially pleased that in Europe our applications new license revenue grew in excess of 100% year-over-year. It’s very satisfying to be doing well right in SAP’s backyard.”

“Oracle’s product strategy is based on a combination of innovations and acquisitions,” said CEO, Larry Ellison. “Over the last several weeks we announced our internally developed Secure Enterprise Search technology, and the completion of the Siebel acquisition. As a result, Oracle now has strong product offerings in both Search and Software as a Service. These two markets are red hot and will be engines for growth for Oracle and the entire software industry for years to come.”

- more -

Oracle Corporation is the world’s largest enterprise software company. For more information about Oracle, including supplemental financial information, please visit Oracle on the web at www.oracle.com/investor or call Investor Relations at (650) 506-4073.

“Safe Harbor” Statement: Statements in this press release relating to Oracle’s future plans 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 could adversely affect our revenue growth and profitability through reductions in IT budgets and expenditures. (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 new versions of existing products. (4) We have an active acquisition program (including our recent acquisition of Siebel Systems, Inc.), and our acquisitions may not be successful, may involve unanticipated costs or other integration issues, or may disrupt our existing operations. (5) Periodic changes to our pricing model and sales organization could temporarily disrupt operations and cause a decline or delay in sales. (6) Intense competitive forces demand rapid technological advances and frequent new product introductions, and could require us to reduce prices. 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, as amended, and Form 10-Q, particularly under the heading “Factors That May Affect Our Future Results or the Market Price of Our Stock.” 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 release is current as of March 20, 2006. Oracle undertakes no duty to update any statement in light of new information or future events.

ORACLE CORPORATION

Q3 FISCAL 2006 QUARTER TO DATE FINANCIAL RESULTS

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in millions, except per share data)

	Three Months Ended February 28,					Three Months Ended February 28,					% Increase (Decrease) in US $		% Increase (Decrease) in Constant Currency (1)
	2006			% of Revenues		2005			% of Revenues
REVENUES
New software licenses	$	1,096		32%		$	947		32%		16%		20%
Software license updates and product support		1,703		49%			1,389		47%		23%		27%
Software Revenues		2,799		81%			2,336		79%		20%		24%
Services		671		19%			614		21%		9%		13%
Total Revenues		3,470		100%			2,950		100%		18%		22%
OPERATING EXPENSES
Sales and marketing		756		22%			668		22%		13%		17%
Software license updates and product support		178		5%			161		5%		11%		15%
Cost of services		612		18%			555		19%		10%		14%
Research and development		467		14%			411		14%		13%		14%
General and administrative		146		4%			146		5%		0%		3%
Amortization of intangible assets		148		4%			81		3%		83%		83%
Acquisition related		84		2%			51		2%		63%		63%
Restructuring		27		1%			107		4%		(75%	)	(75%	)
Total Operating Expenses		2,418		70%			2,180		74%		11%		14%
OPERATING INCOME		1,052		30%			770		26%		37%		45%
Interest expense		(49	)	(1%	)		(58	)	(2%	)	(15%	)	(15%	)
Non-operating income, net		75		2%			59		2%		27%		28%
INCOME BEFORE PROVISION FOR INCOME TAXES		1,078		31%			771		26%		40%		48%
Provision for income taxes		313		9%			231		8%		35%		38%
NET INCOME	$	765		22%		$	540		18%		42%		53%
EARNINGS PER SHARE:
Basic	$	0.15				$	0.11				39%
Diluted	$	0.14				$	0.10				40%
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Basic		5,207					5,122				2%
Diluted		5,304					5,230				1%

(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, 2005, 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 strengthened relative to major international currencies in the three months ended February 28, 2006 compared with the corresponding prior year period, reducing revenue growth by 4 percentage points, operating expense growth by 3 percentage points and operating income growth by 8 percentage points.

ORACLE CORPORATION

Q3 FISCAL 2006 QUARTER TO DATE

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

(in millions, except per share data)

	Three Months Ended February 28,														% Increase (Decrease) in US $
	2006     GAAP		Adj.			2006 Non-GAAP		2005     GAAP		Adj.			2005 Non-GAAP		GAAP		Non-GAAP
TOTAL REVENUES (2)	$	3,470	$	64		$	3,534	$	2,950	$	143		$	3,093	18%		14%
TOTAL SOFTWARE REVENUES (2)	$	2,799	$	64		$	2,863	$	2,336	$	143		$	2,479	20%		16%
New software licenses		1,096		—			1,096		947		—			947	16%		16%
Software license updates and product support (2)		1,703		64			1,767		1,389		143			1,532	23%		15%
TOTAL OPERATING EXPENSES	$	2,418	$	(267	)	$	2,151	$	2,180	$	(249	)	$	1,931	11%		11%
Stock-based compensation (3)		8		(8	)		—		10		(10	)		—	*		*
Amortization of intangible assets (4)		148		(148	)		—		81		(81	)		—	83%		0%
Acquisition related		84		(84	)		—		51		(51	)		—	63%		0%
Restructuring		27		(27	)		—		107		(107	)		—	(75%	)	0%
OPERATING INCOME	$	1,052	$	331		$	1,383	$	770	$	392		$	1,162	37%		19%
OPERATING MARGIN %		30%					39%		26%					38%	16%		4%
INCOME BEFORE PROVISION FOR INCOME TAXES	$	1,078	$	331		$	1,409	$	771	$	392		$	1,163	40%		21%
Income tax effect on above adjustments (5)		313		96			409		231		118			349	35%		17%
NET INCOME	$	765	$	235		$	1,000	$	540	$	274		$	814	42%		23%
DILUTED EARNINGS PER SHARE	$	0.14				$	0.19	$	0.10				$	0.16	40%		21%
* not meaningful

(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) Estimated revenues related to assumed support contracts, as of February 28, 2006, that will not be recognized in future periods due to business combination accounting rules are as follows:

	Year Ended May 31,
2006	$	87
2007		137
2008		9
Total	$	233

(3) As of February 28, 2006, the portion of the intrinsic value of unvested options assumed from acquired companies related to future service, which is approximately $42, is recorded as deferred stock-based compensation on our consolidated balance sheet and will be amortized using the accelerated expense attribution method over the remaining vesting period.

Stock-based compensation is included in the following GAAP operating expenses in the third quarter of fiscal 2006 and 2005:

	Three Months Ended February 28, 2006						Three Months Ended February 28, 2005
	GAAP		Adj.		Non-GAAP		GAAP		Adj.		Non-GAAP
Sales and marketing	$	2	$	(2)	$	—	$	2	$	(2)	$	—
Software license updates and product support		1		(1)		—		1		(1)		—
Cost of services		2		(2)		—		3		(3)		—
Research and development		3		(3)		—		3		(3)		—
General and administrative		—		—		—		1		(1)		—
Total stock-based compensation	$	8	$	(8)	$	—	$	10	$	(10)	$	—

(4) Estimated future amortization expense related to intangible assets as of February 28, 2006 is as follows:

	Year Ended May 31,
2006	$	183
2007		734
2008		724
2009		719
2010		613
Thereafter		1,730
Total	$	4,703

(5) The income tax provision was calculated reflecting a tax rate of 29.0% and 30.0% in the third quarter of fiscal 2006 and 2005, respectively.

ORACLE CORPORATION

Q3 FISCAL 2006 YEAR TO DATE FINANCIAL RESULTS

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in millions, except per share data)

	Nine Months Ended February 28,					Nine Months Ended February 28,					% Increase (Decrease) in US $		% Increase (Decrease) in Constant Currency (1)
	2006			% of Revenues		2005			% of Revenues
REVENUES
New software licenses	$	2,783		29%		$	2,481		31%		12%		15%
Software license updates and product support		4,764		50%			3,816		48%		25%		27%
Software Revenues		7,547		79%			6,297		79%		20%		22%
Services		1,982		21%			1,624		21%		22%		24%
Total Revenues		9,529		100%			7,921		100%		20%		22%
OPERATING EXPENSES
Sales and marketing		2,076		22%			1,703		22%		22%		24%
Software license updates and product support		514		6%			438		6%		17%		19%
Cost of services		1,757		19%			1,423		18%		24%		25%
Research and development		1,335		14%			1,034		13%		29%		29%
General and administrative		410		4%			401		5%		2%		3%
Amortization of intangible assets		398		4%			97		1%		308%		308%
Acquisition related		122		1%			103		1%		18%		18%
Restructuring		38		0%			107		1%		(65%	)	(64%	)
Total Operating Expenses		6,650		70%			5,306		67%		25%		27%
OPERATING INCOME		2,879		30%			2,615		33%		10%		13%
Interest expense		(86	)	(1%	)		(69	)	(1%	)	25%		26%
Non-operating income, net		138		2%			117		2%		18%		19%
INCOME BEFORE PROVISION FOR INCOME TAXES		2,931		31%			2,663		34%		10%		13%
Provision for income taxes		850		9%			799		10%		6%		8%
NET INCOME	$	2,081		22%		$	1,864		24%		12%		16%
EARNINGS PER SHARE:
Basic	$	0.40				$	0.36				11%
Diluted	$	0.40				$	0.36				11%
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Basic		5,169					5,133				1%
Diluted		5,262					5,229				1%

(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, 2005, 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 strengthened relative to major international currencies in the nine months ended February 28, 2006 compared with the corresponding prior year period, reducing revenue growth by 2 percentage points, operating expense growth by 2 percentage points and operating income growth by 3 percentage points.

ORACLE CORPORATION

Q3 FISCAL 2006 YEAR TO DATE

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

(in millions, except per share data)

	Nine Months Ended February 28,														% Increase (Decrease) in US $
	2006     GAAP		Adj.			2006 Non-GAAP		2005     GAAP		Adj.			2005 Non-GAAP		GAAP		Non-GAAP
TOTAL REVENUES (2)	$	9,529	$	305		$	9,834	$	7,921	$	143		$	8,064	20%		22%
TOTAL SOFTWARE REVENUES (2)	$	7,547	$	305		$	7,852	$	6,297	$	143		$	6,440	20%		22%
New software licenses		2,783		—			2,783		2,481		—			2,481	12%		12%
Software license updates and product support (2)		4,764		305			5,069		3,816		143			3,959	25%		28%
TOTAL OPERATING EXPENSES	$	6,650	$	(582	)	$	6,068	$	5,306	$	(317	)	$	4,989	25%		22%
Stock-based compensation (3)		24		(24	)		—		10		(10	)		—	*		*
Amortization of intangible assets (4)		398		(398	)		—		97		(97	)		—	308%		0%
Acquisition related		122		(122	)		—		103		(103	)		—	18%		0%
Restructuring		38		(38	)		—		107		(107	)		—	(65%	)	0%
OPERATING INCOME	$	2,879	$	887		$	3,766	$	2,615	$	460		$	3,075	10%		22%
OPERATING MARGIN %		30%					38%		33%					38%	(8%	)	0%
INCOME BEFORE PROVISION FOR INCOME TAXES	$	2,931	$	887		$	3,818	$	2,663	$	460		$	3,123	10%		22%
Income tax effect on above adjustments (5)		850		257			1,107		799		138			937	6%		18%
NET INCOME	$	2,081	$	630		$	2,711	$	1,864	$	322		$	2,186	12%		24%
DILUTED EARNINGS PER SHARE	$	0.40				$	0.52	$	0.36				$	0.42	11%		23%
* not meaningful

(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) Estimated revenues related to assumed support contracts, as of February 28, 2006, that will not be recognized in future periods due to business combination accounting rules are as follows:

	Year Ended May 31,
2006	$	87
2007		137
2008		9
Total	$	233

(3) As of February 28, 2006, the portion of the intrinsic value of unvested options assumed from acquired companies related to future service, which is approximately $42, is recorded as deferred stock-based compensation on our consolidated balance sheet and will be amortized using the accelerated expense attribution method over the remaining vesting period.

Stock-based compensation is included in the following GAAP operating expenses in the first nine months of fiscal 2006 and 2005:

	Nine Months Ended February 28, 2006						Nine Months Ended February 28, 2005
	GAAP		Adj.		Non-GAAP		GAAP		Adj.		Non-GAAP
Sales and marketing	$	5	$	(5)	$	—	$	2	$	(2)	$	—
Software license updates and product support		2		(2)		—		1		(1)		—
Cost of services		6		(6)		—		3		(3)		—
Research and development		11		(11)		—		3		(3)		—
General and administrative		—		—		—		1		(1)		—
Total stock-based compensation	$	24	$	(24)	$	—	$	10	$	(10)	$	—

(4) Estimated future amortization expense related to intangible assets as of February 28, 2006 is as follows:

	Year Ended May 31,
2006	$	183
2007		734
2008		724
2009		719
2010		613
Thereafter		1,730
Total	$	4,703

(5) The income tax provision was calculated reflecting a tax rate of 29.0% and 30.0% in the first nine months of fiscal 2006 and 2005, respectively.

ORACLE CORPORATION

Q3 FISCAL 2006 FINANCIAL RESULTS

CONDENSED CONSOLIDATED BALANCE SHEETS (1)

($ in millions)

	February 28, 2006		May 31,     2005
ASSETS
Current Assets:
Cash and cash equivalents	$	6,921	$	3,894
Marketable securities		843		877
Trade receivables, net		2,201		2,570
Deferred tax assets		738		486
Other current assets		496		621
Total Current Assets		11,199		8,448
Non-Current Assets:
Property, net		1,375		1,442
Intangible assets, net		4,703		3,373
Goodwill		10,075		7,003
Other assets		1,112		421
Total Non-Current Assets		17,265		12,239
TOTAL ASSETS	$	28,464	$	20,687
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Short-term borrowings and current portion of long-term debt	$	341	$	2,693
Accounts payable		233		230
Income taxes payable		678		904
Accrued compensation and related benefits		858		923
Accrued restructuring		247		156
Deferred revenues		2,467		2,289
Other current liabilities		1,042		868
Total Current Liabilities		5,866		8,063
Non-Current Liabilities:
Long-term debt		5,741		159
Deferred tax liabilities		799		1,010
Accrued restructuring		521		120
Deferred revenues		111		126
Other long-term liabilities		383		372
Total Non-Current Liabilities		7,555		1,787
Stockholders’ Equity		15,043		10,837
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	28,464	$	20,687

(1) Certain prior period balances have been reclassified to conform to the current period presentation.

ORACLE CORPORATION

Q3 FISCAL 2006 YEAR TO DATE FINANCIAL RESULTS

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (1)

($ in millions)

	Nine Months Ended February 28,
	2006			2005
Cash Flows From Operating Activities:
Net income	$	2,081		$	1,864
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		160			142
Amortization of intangible assets		398			97
Deferred income taxes		(115	)		(117	)
Minority interests in income		27			27
Amortization of stock-based compensation		33			10
Non-cash restructuring		—			33
In-process research and development		86			34
Changes in operating assets and liabilities, net of effects from acquisitions:
Decrease in trade receivables		670			824
Decrease in prepaid expenses and other assets		123			195
Decrease in accounts payable and other liabilities		(382	)		(455	)
Decrease in income taxes payable		(201	)		(121	)
(Decrease) Increase in deferred revenues		(18	)		24
Net cash provided by operating activities		2,862			2,557
Cash Flows From Investing Activities:
Purchases of marketable securities		(1,473	)		(6,545	)
Proceeds from maturities and sale of marketable securities		3,083			10,537
Acquisitions, net of cash acquired		(3,932	)		(9,892	)
Purchase of equity investment		(605	)		—
Capital expenditures		(161	)		(150	)
Proceeds from sales of property		140			—
Increase in other assets		(4	)		(5	)
Net cash used for investing activities		(2,952	)		(6,055	)
Cash Flows From Financing Activities:
Payments for repurchase of common stock		(324	)		(1,095	)
Proceeds from issuance of common stock		333			360
Proceeds from borrowings, net of financing costs		12,636			9,200
Payments of debt		(9,446	)		(2,000	)
Distributions to minority interests		(39	)		(44	)
Net cash provided by financing activities		3,160			6,421
Effect of exchange rate changes on cash and cash equivalents		(43	)		160
Net increase in cash and cash equivalents		3,027			3,083
Cash and cash equivalents at beginning of period		3,894			4,138
Cash and cash equivalents at end of period	$	6,921		$	7,221

(1) Certain prior period balances have been reclassified to conform to the current period presentation.

ORACLE CORPORATION

Q3 FISCAL 2006 FINANCIAL RESULTS

FREE CASH FLOW—TRAILING 4-QUARTERS (1)

($ in millions)

	Fiscal 2005												Fiscal 2006
	Q1			Q2			Q3			Q4			Q1			Q2			Q3 (2)			Q4
GAAP Operating Cash Flow	$	3,350		$	3,386		$	3,575		$	3,552		$	3,596		$	3,509		$	3,857
Capital Expenditures (3)		(147	)		(178	)		(195	)		(188	)		(206	)		(182	)		(199	)
Free Cash Flow	$	3,203		$	3,208		$	3,380		$	3,364		$	3,390		$	3,327		$	3,658
% Growth		16%			12%			27%			12%			6%			4%			8%
GAAP Net Income	$	2,749		$	2,948		$	2,854		$	2,886		$	2,896		$	2,878		$	3,103
Free Cash Flow as a % of Net Income		117%			109%			118%			117%			117%			116%			118%

(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) Free cash flow and free cash flow as a percent of GAAP net income for the first nine months of fiscal 2006 and first nine months of fiscal 2005:

	First Nine Months of Fiscal 2005			First Nine Months of Fiscal 2006
GAAP Operating Cash Flow	$	2,557		$	2,862
Capital Expenditures		(150	)		(161	)
Free Cash Flow	$	2,407		$	2,701
% Growth		18%			12%
GAAP Net Income	$	1,864		$	2,081
Free Cash Flow as a % of Net Income		129%			130%

(3) Represents capital expenditures as reported in cash flows from investing activities of our cash flow statements presented in accordance with U.S. generally accepted accounting principles.

ORACLE CORPORATION

Q3 FISCAL 2006 FINANCIAL RESULTS

SUPPLEMENTAL ANALYSIS OF GAAP REVENUES AND HEADCOUNT (1)

(in millions, except headcount data)

	Fiscal 2005												Fiscal 2006
	Q1			Q2			Q3		Q4		TOTAL		Q1		Q2		Q3		Q4	TOTAL
REVENUES
New software licenses	$	563		$	971		$	947	$	1,609	$	4,091	$	629	$	1,058	$	1,096		$	2,783
Software license updates and product support		1,176			1,252			1,389		1,514		5,330		1,502		1,559		1,703			4,764
Software Revenues		1,739			2,223			2,336		3,123		9,421		2,131		2,617		2,799			7,547
Consulting		355			395			470		589		1,810		481		506		501			1,489
On Demand		71			72			76		80		299		84		87		96			266
Education		50			66			68		86		269		72		82		74			227
Services Revenues		476			533			614		755		2,378		637		675		671			1,982
Total Revenues	$	2,215		$	2,756		$	2,950	$	3,878	$	11,799	$	2,768	$	3,292	$	3,470		$	9,529
AS REPORTED REVENUE GROWTH RATES
New software licenses		7%			14%			12%		23%		16%		12%		9%		16%			12%
Software license updates and product support		14%			12%			18%		26%		18%		28%		25%		23%			25%
Software Revenues		11%			13%			15%		24%		17%		23%		18%		20%			20%
Consulting		(10%	)		0%			26%		40%		14%		36%		28%		7%			22%
On Demand		18%			11%			23%		12%		16%		18%		20%		26%			22%
Education		(11%	)		(4%	)		37%		32%		13%		42%		25%		9%			24%
Services Revenues		(7%	)		1%			27%		35%		14%		34%		26%		9%			22%
Total Revenues		7%			10%			18%		26%		16%		25%		19%		18%			20%
CONSTANT CURRENCY GROWTH RATES
New software licenses		3%			9%			8%		20%		12%		10%		12%		20%			15%
Software license updates and product support		10%			8%			15%		22%		14%		26%		27%		27%			27%
Software Revenues		8%			8%			12%		21%		13%		21%		20%		24%			22%
Consulting		(13%	)		(4%	)		23%		36%		10%		34%		31%		10%			24%
On Demand		14%			7%			20%		9%		12%		17%		22%		29%			23%
Education		(14%	)		(9%	)		33%		28%		8%		40%		27%		13%			26%
Services Revenues		(10%	)		(3%	)		23%		32%		10%		32%		29%		13%			24%
Total Revenues		3%			6%			14%		23%		12%		23%		22%		22%			22%
GEOGRAPHIC REVENUES
REVENUES
Americas	$	1,091		$	1,292		$	1,437	$	1,977	$	5,798	$	1,475	$	1,733	$	1,848		$	5,057
Europe, Middle East & Africa		778			1,062			1,088		1,361		4,288		883		1,090		1,164			3,136
Asia Pacific		346			402			425		540		1,713		410		469		458			1,336
Total Revenues	$	2,215		$	2,756		$	2,950	$	3,878	$	11,799	$	2,768	$	3,292	$	3,470		$	9,529
HEADCOUNT
GEOGRAPHIC AREA
Domestic		16,458			16,347			21,774		21,544				21,198		21,133		23,256
International		25,610			26,233			29,107		28,328				28,318		30,021		32,326
Total Company		42,068			42,580			50,881		49,872				49,516		51,154		55,582

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

ORACLE CORPORATION

Q3 FISCAL 2006 FINANCIAL RESULTS

SUPPLEMENTAL TOTAL SOFTWARE PRODUCT REVENUE ANALYSIS (1)

($ in millions)

	Fiscal 2005											Fiscal 2006
	Q1			Q2		Q3		Q4		Total		Q1		Q2		Q3		Q4	Total
APPLICATIONS REVENUES
New software licenses	$	69		$	215	$	152	$	350	$	785	$	127	$	266	$	269		$	662
Software license updates and product support		238			254		351		445		1,288		466		502		608			1,576
Software Revenues		307			469		503		795		2,073		593		768		877			2,238
AS REPORTED REVENUE GROWTH RATES
New software licenses		(36%	)		57%		9%		52%		28%		84%		24%		77%			52%
Software license updates and product support		8%			7%		48%		86%		38%		96%		98%		73%			87%
Software Revenues		(6%	)		25%		34%		69%		34%		93%		64%		74%			75%
CONSTANT CURRENCY GROWTH RATES
New software licenses		(38%	)		51%		7%		49%		25%		82%		27%		82%			54%
Software license updates and product support		4%			3%		43%		80%		33%		93%		101%		79%			90%
Software Revenues		(9%	)		21%		30%		65%		30%		91%		67%		80%			78%
DATABASE & MIDDLEWARE REVENUES
New software licenses	$	494		$	756	$	795	$	1,259	$	3,306	$	502	$	792	$	827		$	2,121
Software license updates and product support		938			998		1,038		1,070		4,042		1,036		1,057		1,095			3,188
Software Revenues		1,432			1,754		1,833		2,329		7,349		1,538		1,849		1,922			5,309
AS REPORTED REVENUE GROWTH RATES
New software licenses		18%			5%		12%		16%		13%		2%		5%		4%			4%
Software license updates and product support		15%			14%		11%		11%		12%		10%		6%		6%			7%
Software Revenues		16%			10%		11%		14%		13%		7%		5%		5%			6%
CONSTANT CURRENCY GROWTH RATES
New software licenses		14%			1%		9%		13%		9%		0%		8%		8%			6%
Software license updates and product support		11%			10%		7%		7%		9%		9%		8%		9%			9%
Software Revenues		12%			6%		8%		10%		9%		6%		8%		9%			8%

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

ORACLE CORPORATION

Q3 FISCAL 2006 FINANCIAL RESULTS

SUPPLEMENTAL GEOGRAPHIC NEW SOFTWARE LICENSE REVENUES ANALYSIS (1) (2)

($ in millions)

	Fiscal 2005												Fiscal 2006
	Q1			Q2			Q3		Q4		TOTAL		Q1			Q2			Q3			Q4	TOTAL
AMERICAS
Database & Middleware	$	197		$	285		$	289	$	542	$	1,313	$	194		$	327		$	334			$	856
Applications		30			116			91		229		466		75			163			148				386
New Software License Revenues	$	227		$	401		$	380	$	771	$	1,779	$	269		$	490		$	482			$	1,242
AS REPORTED GROWTH RATES
Database & Middleware		22%			(5%	)		14%		29%		16%		(2%	)		15%			16%				11%
Applications		(27%	)		53%			7%		71%		39%		150%			41%			61%				62%
New Software License Revenues		12%			7%			12%		39%		21%		19%			22%			27%				23%
CONSTANT CURRENCY GROWTH RATES
Database & Middleware		21%			(5%	)		12%		27%		15%		(4%	)		13%			14%				9%
Applications		(27%	)		51%			7%		69%		38%		148%			40%			60%				61%
New Software License Revenues		11%			7%			11%		37%		20%		17%			21%			25%				22%
EUROPE / MIDDLE EAST / AFRICA
Database & Middleware	$	158		$	304		$	325	$	483	$	1,270	$	164		$	282		$	316			$	763
Applications		28			80			44		76		227		38			75			96				208
New Software License Revenues	$	186		$	384		$	369	$	559	$	1,497	$	202		$	357		$	412			$	971
AS REPORTED GROWTH RATES
Database & Middleware		10%			16%			12%		7%		11%		4%			(7%	)		(3%	)			(3%	)
Applications		(49%	)		67%			7%		6%		5%		38%			(6%	)		119%				38%
New Software License Revenues		(6%	)		23%			11%		7%		10%		9%			(7%	)		12%				4%
CONSTANT CURRENCY GROWTH RATES
Database & Middleware		3%			5%			6%		3%		4%		3%			0%			6%				3%
Applications		(53%	)		54%			2%		3%		0%		36%			1%			138%				46%
New Software License Revenues		(12%	)		13%			6%		3%		4%		8%			0%			22%				10%
ASIA PACIFIC
Database & Middleware	$	131		$	160		$	168	$	222	$	682	$	134		$	176		$	170			$	478
Applications		11			19			17		45		92		14			28			25				68
New Software License Revenues	$	142		$	179		$	185	$	267	$	774	$	148		$	203		$	195			$	546
AS REPORTED GROWTH RATES
Database & Middleware		27%			7%			8%		10%		12%		2%			9%			1%				4%
Applications		0%			46%			21%		80%		46%		28%			48%			52%				45%
New Software License Revenues		25%			10%			9%		18%		15%		4%			13%			5%				8%
CONSTANT CURRENCY GROWTH RATES
Database & Middleware		21%			3%			3%		7%		8%		0%			14%			6%				7%
Applications		0%			38%			23%		72%		42%		23%			50%			60%				47%
New Software License Revenues		19%			6%			5%		14%		11%		2%			18%			11%				11%
TOTAL COMPANY
Database & Middleware	$	486		$	749		$	782	$	1,247	$	3,265	$	492		$	785		$	820			$	2,097
Applications		69			215			152		350		785		127			266			269				662
New Software License Revenues	$	555		$	964		$	934	$	1,597	$	4,050	$	619		$	1,051		$	1,089			$	2,759
AS REPORTED GROWTH RATES
Database & Middleware		19%			5%			12%		16%		13%		1%			5%			5%				4%
Applications		(36%	)		57%			9%		52%		28%		84%			24%			77%				52%
New Software License Revenues		8%			14%			11%		22%		15%		12%			9%			17%				13%
CONSTANT CURRENCY GROWTH RATES
Database & Middleware		14%			1%			8%		13%		9%		0%			8%			9%				6%
Applications		(38%	)		51%			7%		49%		25%		82%			27%			82%				54%
New Software License Revenues		4%			9%			8%		20%		12%		10%			12%			21%				15%

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

(2) New Software License Revenues presented exclude documentation and miscellaneous revenues.

APPENDIX A

ORACLE CORPORATION

Q3 FISCAL 2006 QUARTER TO DATE AND YEAR TO DATE

EXPLANATION OF NON-GAAP MEASURES

Due to a series of acquisitions, our results of operations have undergone significant change. To supplement our financial results presented on a GAAP basis, we use the non-GAAP measures indicated in the table, which exclude certain business combination accounting entries and expenses related to acquisitions and other significant expenses 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 effect:

• Support deferred revenue: Business combination accounting rules require us to account for the fair value of support contracts assumed in connection with acquisitions. Because these are typically one-year contracts, our GAAP software license updates and support revenues for the one year period subsequent to acquisitions do not reflect the full amount of revenue on assumed contracts that would have otherwise been recorded by the acquired entities. The non-GAAP adjustment is intended to reflect the full amount of such revenue. 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 these contracts although we cannot assure that customers will renew these contracts. For further information on this non-GAAP adjustment, see footnote 2 to our Reconciliation of Selected GAAP Measures to Non-GAAP Measures.

• Stock-based compensation: Certain of our operating expenses include stock-based compensation related to unvested stock options assumed in connection with acquisitions. We believe it is useful to highlight the effect of stock-based compensation related to acquisitions because, in compliance with our historical practices under SFAS 123, we do not otherwise expense Oracle stock-based compensation in the current or in past reporting periods. However, stock-based compensation is a key incentive offered to our employees, and we believe it contributed to the revenue earned during the period and will contribute to our future revenue generation. Stock-based compensation expenses will recur in future periods. For further information on the effect of this non-GAAP adjustment on our operating expense line items, see footnote 3 to our Reconciliation of Selected GAAP Measures to Non-GAAP Measures.

• Amortization of intangible assets: We have excluded the effect of amortization of intangibles from our non-GAAP operating expenses. We believe this is useful because, prior to the PeopleSoft acquisition, we did not incur significant charges of this nature, and the exclusion of this amount helps investors understand a significant reason why our operating expenses increased compared to the prior period. Investors should note that the use of intangible assets contributed to revenue earned during the period and will contribute to future revenue generation and should also note that these amortization expenses are recurring. See footnote 4 to our Reconciliation of Selected GAAP Measures to Non-GAAP Measures for information on our estimated future amortization expense related to intangible assets.

• Acquisition related charges and restructuring costs: We incurred significant expenses in connection with acquisitions, principally PeopleSoft and Siebel, that we would not have otherwise incurred. Acquisition related charges primarily consist of in-process research and development expenses, integration-related professional services, stock-based compensation expenses (in addition to the stock-based compensation expenses described above), personnel related costs for transitional employees as well as costs associated with our tender offer for PeopleSoft prior to the agreement date. Stock-based compensation included in acquisition related charges resulted from unvested options assumed in acquisitions whose vesting was fully accelerated upon termination of the employees pursuant to the terms of the options. Restructuring costs consist of Oracle employee severance and Oracle duplicate facility closures in connection with acquisitions. We believe it is useful for investors to understand the effect of these expenses on our cost structure. Although acquisition related charges and restructuring costs are not recurring with respect to past acquisitions, we will incur these charges in connection with future acquisitions.