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Oracle Reports Q3 GAAP EPS Up 20% to 49 Cents; Q3 Non-GAAP EPS Up 15% to 62 Cents

Trailing Twelve Month Operating Cash Flow Up 35% to $13.5 Billion (March 20, 2012)

REDWOOD SHORES, CA -- (Marketwire) -- 03/20/12 -- Oracle Corporation (NASDAQ: ORCL) today announced fiscal 2012 Q3 GAAP total revenues were up 3% to $9.0 billion, and non-GAAP total revenues were up 3% to $9.1 billion. Both GAAP and non-GAAP new software license revenues were up 7% to $2.4 billion. Both GAAP and non-GAAP software license updates and product support revenues were up 8% to $4.1 billion. Both GAAP and non-GAAP hardware systems products revenues were down 16% to $869 million. GAAP operating income was up 11% to $3.3 billion, and GAAP operating margin was 37%. Non-GAAP operating income was up 8% to $4.2 billion, and non-GAAP operating margin was 46%. GAAP net income was up 18% to $2.5 billion, while non-GAAP net income was up 13% to $3.1 billion. GAAP earnings per share were $0.49, up 20% compared to last year while non-GAAP earnings per share were up 15% to $0.62. GAAP operating cash flow on a trailing twelve-month basis was $13.5 billion.

"Oracle is on track to deliver the highest operating margins in our history this year," said Oracle President and CFO, Safra Catz. "Oracle can achieve these record margins as an integrated hardware and software company because we are focusing on high margin systems where hardware and software are engineered to work together."

"Hardware revenue for our engineered systems grew 139% this quarter and going into Q4, we have a record pipeline," said Oracle President, Mark Hurd. "In applications, Fusion in the Cloud is winning with great success against niche HCM cloud vendors in the US and worldwide. Our modular, integrated platform of 100 apps available in the cloud or on-premise is a key differentiator."

"This past quarter Oracle delivered the hardware and software for our new extreme-performance Exalytics In-Memory Machine," said Oracle CEO, Larry Ellison. "At the core of Exalytics is our new in-memory database technology capable of instantaneous big data analysis; questions are answered at the speed of thought. And unlike SAP's Hana in-memory appliance, Exalytics runs your existing applications. Simply plug-in Exalytics and your existing Oracle Business Intelligence applications and Hyperion Enterprise Performance Management applications run much, much faster."


The Board of Directors also declared a quarterly cash dividend of $0.06 per share of outstanding common stock. This dividend will be paid to stockholders of record as of the close of business on April 11, 2012, with a payment date of May 2, 2012.

Q3 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 (719) 325-2433, Passcode: 110382. To access the live webcast of this event, please visit the Oracle Investor Relations website at http://www.oracle.com/investor. A replay of the conference call will also be available by dialing (719) 457-0820 or (888) 203-1112, Passcode: 6577274.

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

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

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

ORACLE CORPORATION Q3 FISCAL 2012 FINANCIAL RESULTS CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS ($ in millions, except per share data) Three Months Ended ----------------------------------- % Increase (Decrease) in % Increase Constant February % of February % of (Decrease) Currency 29, 2012 Revenues 28, 2011 Revenues in US $ (1) -------- -------- -------- -------- ---------- ---------- REVENUES New software licenses $ 2,374 26% $ 2,214 25% 7% 8% Software license updates and product support 4,051 45% 3,740 43% 8% 9% -------- -------- -------- -------- Software Revenues 6,425 71% 5,954 68% 8% 9% -------- -------- -------- -------- Hardware systems products 869 10% 1,035 12% (16%) (16%) Hardware systems support 604 6% 629 7% (4%) (3%) -------- -------- -------- -------- Hardware Systems Revenues 1,473 16% 1,664 19% (11%) (11%) -------- -------- -------- -------- Services 1,141 13% 1,146 13% 0% 1% -------- -------- -------- -------- Total Revenues 9,039 100% 8,764 100% 3% 4% -------- -------- -------- -------- OPERATING EXPENSES Sales and marketing 1,700 19% 1,618 19% 5% 6% Software license updates and product support 305 3% 299 3% 2% 3% Hardware systems products 424 5% 465 6% (9%) (8%) Hardware systems support 257 3% 294 3% (13%) (12%) Services 922 10% 954 11% (3%) (2%) Research and development 1,145 13% 1,127 13% 2% 3% General and administrative 261 3% 286 3% (9%) (8%) Amortization of intangible assets 606 7% 612 7% (1%) (1%) Acquisition related and other 38 0% 30 0% 28% 27% Restructuring 64 0% 92 1% (31%) (31%) -------- -------- -------- -------- Total Operating Expenses 5,722 63% 5,777 66% (1%) 0% -------- -------- -------- -------- OPERATING INCOME 3,317 37% 2,987 34% 11% 11% Interest expense (190) (2%) (204) (2%) (7%) (7%) Non-operating income, net 21 0% 16 0% 33% 31% -------- -------- -------- -------- INCOME BEFORE PROVISION FOR INCOME TAXES 3,148 35% 2,799 32% 12% 13% -------- -------- -------- -------- Provision for income taxes 650 7% 683 8% (5%) (4%) -------- -------- -------- -------- NET INCOME $ 2,498 28% $ 2,116 24% 18% 19% ======== ======== ======== ======== EARNINGS PER SHARE: Basic $ 0.50 $ 0.42 Diluted $ 0.49 $ 0.41 WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: Basic 5,007 5,057 Diluted 5,080 5,149 (1) We compare the percent change in the results from one period to another period using constant currency disclosure. We present constant currency information to provide a framework for assessing how our underlying businesses performed excluding the effect of foreign currency rate fluctuations. To present this information, current and comparative prior period results for entities reporting in currencies other than United States dollars are converted into United States dollars at the exchange rates in effect on May 31, 2011, which was the last day of our prior fiscal year, rather than the actual exchange rates in effect during the respective periods. Movements in international currencies relative to the United States dollar during the three months ended February 29, 2012 compared with the corresponding prior year period decreased our revenues by 1 percentage point, operating expenses by 1 percentage point and had no impact on our operating income. ORACLE CORPORATION Q3 FISCAL 2012 FINANCIAL RESULTS RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES (1) ($ in millions, except per share data) Three Months Ended ------------------------------------------------- February February February February 29, 2012 29, 2012 28, 2011 28, 2011 GAAP Adj. Non-GAAP GAAP Adj. Non-GAAP -------- ------ -------- -------- ------ -------- TOTAL REVENUES (3) (4) $ 9,039 $ 23 $ 9,062 $ 8,764 $ 43 $ 8,807 TOTAL SOFTWARE REVENUES (3) $ 6,425 $ 17 $ 6,442 $ 5,954 $ 16 $ 5,970 New software licenses 2,374 - 2,374 2,214 - 2,214 Software license updates and product support (3) 4,051 17 4,068 3,740 16 3,756 TOTAL HARDWARE SYSTEMS REVENUES (4) $ 1,473 $ 6 $ 1,479 $ 1,664 $ 27 $ 1,691 Hardware systems products 869 - 869 1,035 - 1,035 Hardware systems support (4) 604 6 610 629 27 656 TOTAL OPERATING EXPENSES $ 5,722 $(865) $ 4,857 $ 5,777 $(862) $ 4,915 Stock-based compensation (5) 157 (157) - 128 (128) - Amortization of intangible assets (6) 606 (606) - 612 (612) - Acquisition related and other 38 (38) - 30 (30) - Restructuring 64 (64) - 92 (92) - OPERATING INCOME $ 3,317 $ 888 $ 4,205 $ 2,987 $ 905 $ 3,892 OPERATING MARGIN % 37% 46% 34% 44% INCOME TAX EFFECTS (7) $ 650 $ 258 $ 908 $ 683 $ 258 $ 941 NET INCOME $ 2,498 $ 630 $ 3,128 $ 2,116 $ 647 $ 2,763 DILUTED EARNINGS PER SHARE $ 0.49 $ 0.62 $ 0.41 $ 0.54 DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 5,080 - 5,080 5,149 - 5,149 ORACLE CORPORATION Q3 FISCAL 2012 FINANCIAL RESULTS RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES (1) ($ in millions, except per share data) % Increase % Increase (Decrease) in (Decrease) in Constant US $ Currency (2) --------------- --------------- Non- Non- GAAP GAAP GAAP GAAP ------- ------- ------- ------- TOTAL REVENUES (3) (4) 3% 3% 4% 4% TOTAL SOFTWARE REVENUES (3) 8% 8% 9% 9% New software licenses 7% 7% 8% 8% Software license updates and product support (3) 8% 8% 9% 9% TOTAL HARDWARE SYSTEMS REVENUES (4) (11%) (12%) (11%) (12%) Hardware systems products (16%) (16%) (16%) (16%) Hardware systems support (4) (4%) (7%) (3%) (6%) TOTAL OPERATING EXPENSES (1%) (1%) 0% 0% Stock-based compensation (5) 23% * 23% * Amortization of intangible assets (6) (1%) * (1%) * Acquisition related and other 28% * 27% * Restructuring (31%) * (31%) * OPERATING INCOME 11% 8% 11% 8% OPERATING MARGIN % 261 bp. 221 bp. 253 bp. 205 bp. INCOME TAX EFFECTS (7) (5%) (4%) (4%) (3%) NET INCOME 18% 13% 19% 14% DILUTED EARNINGS PER SHARE 20% 15% 20% 15% 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, 2011, which was the last day of our prior fiscal year, rather than the actual exchange rates in effect during the respective periods. (3) As of February 29, 2012, approximately $20 million, $25 million and $2 million in estimated revenues primarily related to assumed software support contracts will not be recognized for the remainder of fiscal 2012, fiscal 2013 and fiscal 2014, respectively, due to business combination accounting rules. (4) As of February 29, 2012, approximately $4 million and $11 million in estimated revenues primarily related to hardware systems support contracts will not be recognized for the remainder of fiscal 2012 and fiscal 2013, respectively, due to business combination accounting rules. (5) Stock-based compensation was included in the following GAAP operating expense categories: Three Months Ended Three Months Ended February 29, 2012 February 28, 2011 -------------------- -------------------- Non- Non- GAAP Adj. GAAP GAAP Adj. GAAP ------ ----- ------ ------ ----- ------ Sales and marketing $ 30 $ (30) $ - $ 22 $ (22) $ - Software license updates and product support 5 (5) - 4 (4) - Hardware systems products - - - 1 (1) - Hardware systems support 1 (1) - 1 (1) - Services 6 (6) - 5 (5) - Research and development 74 (74) - 58 (58) - General and administrative 41 (41) - 37 (37) - ------ ----- ------ ------ ----- ------ Subtotal 157 (157) - 128 (128) - ------ ----- ------ ------ ----- ------ Acquisition related and other 18 (18) - 1 (1) - ------ ----- ------ ------ ----- ------ Total stock-based compensation $ 175 $(175) $ - $ 129 $(129) $ - ====== ===== ====== ====== ===== ====== (6) Estimated future annual amortization expense related to intangible assets as of February 29, 2012 was as follows: Remainder of Fiscal 2012 $ 614 Fiscal 2013 2,163 Fiscal 2014 1,787 Fiscal 2015 1,345 Fiscal 2016 843 Fiscal 2017 286 Thereafter 406 ---------- Total intangible assets subject to amortization 7,444 In-process research and development 11 ---------- Total intangible assets, net $ 7,455 ========== (7) Income tax effects were calculated reflecting an effective GAAP tax rate of 20.7% and 24.4% in the third quarter of fiscal 2012 and 2011, respectively, and an effective non-GAAP tax rate of 22.5% and 25.4% in the third quarter of fiscal 2012 and 2011, respectively. The difference between our GAAP and non-GAAP tax rates in the third quarter of fiscal 2012 was primarily due to income tax effects related to acquired tax exposures, the differences in jurisdictional tax rates and related tax benefits attributable to our restructuring expenses, and the disproportionate rate impact of discrete items for the quarter. The difference between our GAAP and non-GAAP tax rates in the third quarter of fiscal 2011 was primarily due to income tax effects related to acquired tax exposures and the disproportionate tax rate impact of the retroactive extension of U.S. research and development tax credits. * Not meaningful ORACLE CORPORATION Q3 FISCAL 2012 YEAR TO DATE FINANCIAL RESULTS CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS ($ in millions, except per share data) Nine Months Ended ----------------------------------- % Increase (Decrease) in % Increase Constant February % of February % of (Decrease) Currency 29, 2012 Revenues 28, 2011 Revenues in US $ (1) -------- -------- -------- -------- ---------- ---------- REVENUES New software licenses $ 5,921 23% $ 5,498 22% 8% 7% Software license updates and product support 12,058 46% 10,835 44% 11% 9% -------- -------- -------- -------- Software Revenues 17,979 69% 16,333 66% 10% 9% -------- -------- -------- -------- Hardware systems products 2,851 11% 3,225 13% (12%) (14%) Hardware systems support 1,874 7% 1,890 8% (1%) (3%) -------- -------- -------- -------- Hardware Systems Revenues 4,725 18% 5,115 21% (8%) (10%) -------- -------- -------- -------- Services 3,501 13% 3,399 13% 3% 2% -------- -------- -------- -------- Total Revenues 26,205 100% 24,847 100% 5% 4% -------- -------- -------- -------- OPERATING EXPENSES Sales and marketing 5,027 19% 4,482 18% 12% 10% Software license updates and product support 899 3% 914 4% (2%) (2%) Hardware systems products 1,367 5% 1,547 6% (12%) (12%) Hardware systems support 798 3% 950 4% (16%) (18%) Services 2,788 11% 2,818 11% (1%) (2%) Research and development 3,297 13% 3,349 13% (2%) (1%) General and administrative (2) 848 3% 714 3% 19% 18% Amortization of intangible assets 1,790 7% 1,829 7% (2%) (2%) Acquisition related and other 63 0% 160 1% (61%) (63%) Restructuring 217 1% 410 2% (47%) (48%) -------- -------- -------- -------- Total Operating Expenses 17,094 65% 17,173 69% 0% (1%) -------- -------- -------- -------- OPERATING INCOME 9,111 35% 7,674 31% 19% 15% Interest expense (574) (2%) (613) (2%) (7%) (7%) Non-operating income, net 42 0% 180 0% (77%) (73%) INCOME BEFORE PROVISION FOR INCOME TAXES 8,579 33% 7,241 29% 18% 15% -------- -------- -------- -------- Provision for income taxes 2,050 8% 1,903 8% 8% 4% -------- -------- -------- -------- NET INCOME $ 6,529 25% $ 5,338 21% 22% 19% ======== ======== ======== ======== EARNINGS PER SHARE: Basic $ 1.30 $ 1.06 Diluted $ 1.28 $ 1.04 WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: Basic 5,037 5,042 Diluted 5,118 5,117 (1) We compare the percent change in the results from one period to another period using constant currency disclosure. We present constant currency information to provide a framework for assessing how our underlying businesses performed excluding the effect of foreign currency rate fluctuations. To present this information, current and comparative prior period results for entities reporting in currencies other than United States dollars are converted into United States dollars at the exchange rates in effect on May 31, 2011, which was the last day of our prior fiscal year, rather than the actual exchange rates in effect during the respective periods. Movements in international currencies relative to the United States dollar during the nine months ended February 29, 2012 compared with the corresponding prior year period increased our revenues by 1 percentage point, operating expenses by 1 percentage point and operating income by 4 percentage points. (2) General and administrative expenses for the nine months ended February 28, 2011 included a benefit of $120 million related to the recovery of legal costs. ORACLE CORPORATION Q3 FISCAL 2012 YEAR TO DATE FINANCIAL RESULTS RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES (1) ($ in millions, except per share data) Nine Months Ended ----------------------------------------------------- February February February February 29, 2012 29, 2012 28, 2011 28, 2011 GAAP Adj. Non-GAAP GAAP Adj. Non-GAAP -------- -------- -------- -------- -------- -------- TOTAL REVENUES (3) (4) $ 26,205 $ 66 $ 26,271 $ 24,847 $ 197 $ 25,044 TOTAL SOFTWARE REVENUES (3) $ 17,979 $ 40 $ 18,019 $ 16,333 $ 64 $ 16,397 New software licenses 5,921 - 5,921 5,498 - 5,498 Software license updates and product support (3) 12,058 40 12,098 10,835 64 10,899 TOTAL HARDWARE SYSTEMS REVENUES (4) $ 4,725 $ 26 $ 4,751 $ 5,115 $ 133 $ 5,248 Hardware systems products 2,851 - 2,851 3,225 - 3,225 Hardware systems support (4) 1,874 26 1,900 1,890 133 2,023 TOTAL OPERATING EXPENSES $ 17,094 $(2,523) $ 14,571 $ 17,173 $(2,774) $ 14,399 Stock-based compensation (5) 453 (453) - 375 (375) - Amortization of intangible assets (6) 1,790 (1,790) - 1,829 (1,829) - Acquisition related and other 63 (63) - 160 (160) - Restructuring 217 (217) - 410 (410) - OPERATING INCOME $ 9,111 $ 2,589 $ 11,700 $ 7,674 $ 2,971 $ 10,645 OPERATING MARGIN % 35% 45% 31% 43% INCOME TAX EFFECTS (7) $ 2,050 $ 740 $ 2,790 $ 1,903 $ 785 $ 2,688 NET INCOME $ 6,529 $ 1,849 $ 8,378 $ 5,338 $ 2,186 $ 7,524 DILUTED EARNINGS PER SHARE $ 1.28 $ 1.64 $ 1.04 $ 1.47 DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 5,118 - 5,118 5,117 - 5,117 ORACLE CORPORATION Q3 FISCAL 2012 YEAR TO DATE FINANCIAL RESULTS RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES (1) ($ in millions, except per share data) % Increase % Increase (Decrease) in (Decrease) in US Constant Currency $ (2) ----------------- ----------------- GAAP Non-GAAP GAAP Non-GAAP -------- -------- -------- -------- TOTAL REVENUES (3) (4) 5% 5% 4% 3% TOTAL SOFTWARE REVENUES (3) 10% 10% 9% 8% New software licenses 8% 8% 7% 7% Software license updates and product support (3) 11% 11% 9% 9% TOTAL HARDWARE SYSTEMS REVENUES (4) (8%) (9%) (10%) (12%) Hardware systems products (12%) (12%) (14%) (14%) Hardware systems support (4) (1%) (6%) (3%) (8%) TOTAL OPERATING EXPENSES 0% 1% (1%) 0% Stock-based compensation (5) 21% * 21% * Amortization of intangible assets (6) (2%) * (2%) * Acquisition related and other (61%) * (63%) * Restructuring (47%) * (48%) * OPERATING INCOME 19% 10% 15% 7% OPERATING MARGIN % 388 bp. 203 bp. 344 bp. 172 bp. INCOME TAX EFFECTS (7) 8% 4% 4% 1% NET INCOME 22% 11% 19% 9% DILUTED EARNINGS PER SHARE 22% 11% 19% 9% DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 0% 0% 0% 0% (1) This presentation includes non-GAAP measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP. For a detailed explanation of the adjustments made to comparable GAAP measures, the reasons why management uses these measures, the usefulness of these measures and the material limitations on the usefulness of these measures, please see Appendix A. (2) We compare the percent change in the results from one period to another period using constant currency disclosure. We present constant currency information to provide a framework for assessing how our underlying businesses performed excluding the effect of foreign currency rate fluctuations. To present this information, current and comparative prior period results for entities reporting in currencies other than United States dollars are converted into United States dollars at the exchange rates in effect on May 31, 2011, which was the last day of our prior fiscal year, rather than the actual exchange rates in effect during the respective periods. (3) As of February 29, 2012, approximately $20 million, $25 million and $2 million in estimated revenues primarily related to assumed software support contracts will not be recognized for the remainder of fiscal 2012, fiscal 2013 and fiscal 2014, respectively, due to business combination accounting rules. (4) As of February 29, 2012, approximately $4 million and $11 million in estimated revenues primarily related to hardware systems support contracts will not be recognized for the remainder of fiscal 2012 and fiscal 2013, respectively, due to business combination accounting rules. (5) Stock-based compensation was included in the following GAAP operating expense categories: Nine Months Ended Nine Months Ended February 29, 2012 February 28, 2011 -------------------- -------------------- Non- Non- GAAP Adj. GAAP GAAP Adj. GAAP ------ ----- ------ ------ ----- ------ Sales and marketing $ 86 $ (86) $ - $ 64 $ (64) $ - Software license updates and product support 13 (13) - 11 (11) - Hardware systems products 1 (1) - 2 (2) - Hardware systems support 4 (4) - 4 (4) - Services 16 (16) - 13 (13) - Research and development 213 (213) - 171 (171) - General and administrative 120 (120) - 110 (110) - ------ ----- ------ ------ ----- ------ Subtotal 453 (453) - 375 (375) - ------ ----- ------ ------ ----- ------ Acquisition related and other 21 (21) - 8 (8) - ------ ----- ------ ------ ----- ------ Total stock-based compensation $ 474 $(474) $ - $ 383 $(383) $ - ------ ----- ------ ------ ----- ------ (6) Estimated future annual amortization expense related to intangible assets as of February 29, 2012 was as follows: Remainder of Fiscal 2012 $ 614 Fiscal 2013 2,163 Fiscal 2014 1,787 Fiscal 2015 1,345 Fiscal 2016 843 Fiscal 2017 286 Thereafter 406 ---------- Total intangible assets subject to amortization 7,444 In-process research and development 11 ---------- Total intangible assets, net $ 7,455 ========== (7) Income tax effects were calculated reflecting an effective GAAP tax rate of 23.9% and 26.3% in the first nine months of fiscal 2012 and 2011, respectively, and an effective non-GAAP tax rate of 25.0% and 26.3% in the first nine months of fiscal 2012 and 2011, respectively. The differences between our GAAP and non-GAAP tax rates in the first nine months of fiscal 2012 were primarily due to income tax effects related to acquired tax exposures, the differences in jurisdictional tax rates and related tax benefits attributable to our restructuring expenses, and the disproportionate rate impact of discrete items for the first nine months of fiscal 2012. * Not meaningful



ORACLE CORPORATION Q3 FISCAL 2012 FINANCIAL RESULTS CONDENSED CONSOLIDATED BALANCE SHEETS ($ in millions) February 29, May 31, 2012 2011 ------------- ------------- ASSETS Current Assets: Cash and cash equivalents $ 13,781 $ 16,163 Marketable securities 15,961 12,685 Trade receivables, net 4,656 6,628 Inventories 172 303 Deferred tax assets 1,290 1,189 Prepaid expenses and other current assets 1,678 2,206 ------------- ------------- Total Current Assets 37,538 39,174 Non-Current Assets: Property, plant and equipment, net 2,936 2,857 Intangible assets, net 7,455 7,860 Goodwill 23,819 21,553 Deferred tax assets 977 1,076 Other assets 1,636 1,015 ------------- ------------- Total Non-Current Assets 36,823 34,361 ------------- ------------- TOTAL ASSETS $ 74,361 $ 73,535 ============= ============= LIABILITIES AND EQUITY Current Liabilities: Notes payable, current and other current borrowings $ - $ 1,150 Accounts payable 442 494 Accrued compensation and related benefits 1,665 2,320 Deferred revenues 6,285 6,802 Other current liabilities 3,240 3,426 ------------- ------------- Total Current Liabilities 11,632 14,192 Non-Current Liabilities: Notes payable and other non-current borrowings 14,777 14,772 Income taxes payable 3,216 3,169 Other non-current liabilities 1,470 1,157 ------------- ------------- Total Non-Current Liabilities 19,463 19,098 Equity 43,266 40,245 ------------- ------------- TOTAL LIABILITIES AND EQUITY $ 74,361 $ 73,535 ============= =============



ORACLE CORPORATION Q3 FISCAL 2012 FINANCIAL RESULTS CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS ($ in millions) Nine Months Ended ---------------------------- February 29, February 28, 2012 2011 -------------- ------------- Cash Flows From Operating Activities: Net income $ 6,529 $ 5,338 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 350 283 Amortization of intangible assets 1,790 1,829 Deferred income taxes (200) (174) Stock-based compensation 474 383 Tax benefits on the exercise of stock options and vesting of restricted stock- based awards 123 222 Excess tax benefits on the exercise of stock options and vesting of restricted stock-based awards (71) (139) Other, net 67 42 Changes in operating assets and liabilities, net of effects from acquisitions: Decrease in trade receivables, net 2,028 1,377 Decrease (increase) in inventories 139 (9) Decrease in prepaid expenses and other assets 87 261 Decrease in accounts payable and other liabilities (1,353) (821) Increase (decrease) in income taxes payable 259 (591) Decrease in deferred revenues (536) (564) ------------- ------------- Net cash provided by operating activities 9,686 7,437 ------------- ------------- Cash Flows From Investing Activities: Purchases of marketable securities and other investments (29,745) (22,861) Proceeds from maturities and sales of marketable securities and other investments 26,472 19,159 Acquisitions, net of cash acquired (2,833) (1,673) Capital expenditures (431) (372) Proceeds from sale of property - 85 ------------- ------------- Net cash used for investing activities (6,537) (5,662) ------------- ------------- Cash Flows From Financing Activities: Payments for repurchases of common stock (3,457) (749) Proceeds from issuances of common stock 513 1,028 Payments of dividends to stockholders (909) (757) Proceeds from borrowings, net of issuance costs - 3,204 Repayments of borrowings (1,405) (3,143) Excess tax benefits on the exercise of stock options and vesting of restricted stock- based awards 71 139 Distributions to noncontrolling interests (163) (65) ------------- ------------- Net cash used for financing activities (5,350) (343) ------------- ------------- Effect of exchange rate changes on cash and cash equivalents (181) 518 ------------- ------------- Net (decrease) increase in cash and cash equivalents (2,382) 1,950 ------------- ------------- Cash and cash equivalents at beginning of period 16,163 9,914 ------------- ------------- Cash and cash equivalents at end of period $ 13,781 $ 11,864 ============= =============



ORACLE CORPORATION Q3 FISCAL 2012 FINANCIAL RESULTS FREE CASH FLOW - TRAILING 4-QUARTERS (1) ($ in millions) Fiscal 2011 Fiscal 2012 ------------------------------- ------------------------------ Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 ------- ------- ------- ------- ------- ------- ------- ------ GAAP Operating Cash Flow $ 8,760 $ 9,053 $ 9,948 $11,214 $12,818 $13,129 $13,463 Capital Expenditures (2) (293) (369) (441) (450) (492) (500) (509) ------- ------- ------- ------- ------- ------- ------- ------ Free Cash Flow $ 8,467 $ 8,684 $ 9,507 $10,764 $12,326 $12,629 $12,954 ======= ======= ======= ======= ======= ======= ======= ====== % Growth over prior year 0% 3% 19% 27% 46% 45% 36% ------- ------- ------- ------- ------- ------- ------- ------ GAAP Net Income $ 6,363 $ 6,776 $ 7,701 $ 8,547 $ 9,035 $ 9,356 $ 9,738 Free Cash Flow as a % of Net Income 133% 128% 123% 126% 136% 135% 133% (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 Q3 FISCAL 2012 FINANCIAL RESULTS SUPPLEMENTAL ANALYSIS OF GAAP REVENUES AND HEADCOUNT (1) ($in millions) 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 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% 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% 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 ========= ========= ========= ========== ========= Fiscal 2012 --------------------------------------------------- Q1 Q2 Q3 Q4 TOTAL ---------- ---------- ---------- ------- ---------- REVENUES New software licenses $ 1,498 $ 2,048 $ 2,374 $ 5,921 Software license updates and product support 4,022 3,986 4,051 12,058 ---------- ---------- ---------- ------- ---------- Software Revenues 5,520 6,034 6,425 17,979 Hardware systems products 1,029 953 869 2,851 Hardware systems support 645 625 604 1,874 ---------- ---------- ---------- ------- ---------- Hardware Systems Revenues 1,674 1,578 1,473 4,725 Services Revenues 1,180 1,180 1,141 3,501 ---------- ---------- ---------- ------- ---------- Total Revenues $ 8,374 $ 8,792 $ 9,039 $ 26,205 ========== ========== ========== ======= ========== AS REPORTED REVENUE GROWTH RATES New software licenses 17% 2% 7% 8% Software license updates and product support 17% 9% 8% 11% Software Revenues 17% 7% 8% 10% Hardware systems products (5%) (14%) (16%) (12%) Hardware systems support 4% (2%) (4%) (1%) Hardware Systems Revenues (1%) (10%) (11%) (8%) Services Revenues 10% 0% 0% 3% Total Revenues 12% 2% 3% 5% CONSTANT CURRENCY GROWTH RATES (2) New software licenses 11% 3% 8% 7% Software license updates and product support 10% 9% 9% 9% Software Revenues 11% 7% 9% 9% Hardware systems products (11%) (14%) (16%) (14%) Hardware systems support (3%) (3%) (3%) (3%) Hardware Systems Revenues (8%) (10%) (11%) (10%) Services Revenues 5% 0% 1% 2% Total Revenues 5% 2% 4% 4% GEOGRAPHIC REVENUES REVENUES Americas $ 4,226 $ 4,532 $ 4,707 $ 13,465 Europe, Middle East & Africa 2,704 2,756 2,787 8,247 Asia Pacific 1,444 1,504 1,545 4,493 ---------- ---------- ---------- ------- ---------- Total Revenues $ 8,374 $ 8,792 $ 9,039 $ 26,205 ========== ========== ========== ======= ========== HEADCOUNT GEOGRAPHIC AREA Americas 46,338 46,672 47,884 Europe, Middle East & Africa 22,210 22,725 22,852 Asia Pacific 40,840 41,901 42,908 ---------- ---------- ---------- ------- ---------- Total Company 109,388 111,298 113,644 ========== ========== ========== ======= ========== (1) The sum of the quarterly financial information may vary from year-to- date financial information due to rounding. (2) We compare the percent change in the results from one period to another period using constant currency disclosure. We present constant currency information to provide a framework for assessing how our underlying businesses performed excluding the effect of foreign currency rate fluctuations. To present this information, current and comparative prior period results for entities reporting in currencies other than United States dollars are converted into United States dollars at the exchange rates in effect on May 31, 2011 and 2010 for the fiscal 2012 and fiscal 2011 constant currency growth rate calculations presented, respectively, rather than the actual exchange rates in effect during the respective periods. * Not meaningful ORACLE CORPORATION Q3 FISCAL 2012 FINANCIAL RESULTS SUPPLEMENTAL TOTAL SOFTWARE PRODUCT REVENUE ANALYSIS (1) ($in millions) 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% Fiscal 2012 ---------------------------------- Q1 Q2 Q3 Q4 TOTAL ------ ------ ------ ----- ------- SOFTWARE REVENUES DATABASE & MIDDLEWARE REVENUES New software licenses $1,070 $1,479 $1,716 $ 4,265 Software license updates and product support 2,710 2,707 2,776 8,191 ------ ------ ------ ----- ------- Database and Middleware Revenues $3,780 $4,186 $4,492 $12,456 ====== ====== ====== ===== ======= AS REPORTED GROWTH RATES New software licenses 14% 4% 9% 8% Software license updates and product support 17% 11% 10% 12% Database and Middleware Revenues 16% 8% 10% 11% CONSTANT CURRENCY GROWTH RATES (2) New software licenses 8% 4% 10% 7% Software license updates and product support 12% 13% 12% 13% Database and Middleware Revenues 11% 10% 11% 11% APPLICATIONS REVENUES New software licenses $ 428 $ 569 $ 658 $ 1,656 Software license updates and product support 1,312 1,279 1,275 3,867 ------ ------ ------ ----- ------- Applications Revenues $1,740 $1,848 $1,933 $ 5,523 ====== ====== ====== ===== ======= AS REPORTED GROWTH RATES New software licenses 23% (2%) 3% 6% Software license updates and product support 16% 6% 5% 9% Applications Revenues 17% 4% 4% 8% CONSTANT CURRENCY GROWTH RATES (2) New software licenses 19% (1%) 3% 5% Software license updates and product support 7% 2% 2% 4% Applications Revenues 10% 1% 3% 4% (1) The sum of the quarterly financial information may vary from year-to- date financial information due to rounding. (2) We compare the percent change in the results from one period to another period using constant currency disclosure. We present constant currency information to provide a framework for assessing how our underlying businesses performed excluding the effect of foreign currency rate fluctuations. To present this information, current and comparative prior period results for entities reporting in currencies other than United States dollars are converted into United States dollars at the exchange rates in effect on May 31, 2011 and 2010 for the fiscal 2012 and fiscal 2011 constant currency growth rate calculations presented, respectively, rather than the actual exchange rates in effect during the respective periods. ORACLE CORPORATION Q3 FISCAL 2012 FINANCIAL RESULTS SUPPLEMENTAL GEOGRAPHIC NEW SOFTWARE LICENSE AND HARDWARE SYSTEMS PRODUCTS REVENUES ANALYSIS (1) ($in millions) 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
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