shareholder meeting-2013-slides

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Annual Stockholder MeetingOctober 31, 2013

Jeff Henley Ch i f th B dChairman of the Board

Safe Harbor Statement "Safe Harbor" Statement: Statements made during Oracle’s Annual Stockholders Meeting relating to Oracle's future plans,

intentions and are "forward looking statements and are to risks andexpectations expectations, beliefsbeliefs, intentions and prospects prospects are forward-looking statements" and are subject subject to material material risks and uncertainties. Many factors could affect our current expectations and our actual results, and could cause actual results to differmaterially. We presently consider the following to be among the important factors that could cause actual results to differmaterially from expectations: (1) Economic, political and market conditions, including the current European economic crisis andslowing economic conditions in other parts of the world, can adversely affect our business, results of operations and financialcondition, including our revenue growth and profitability, which in turn could adversely affect our stock price. (2) We may fail toachieve our financial forecasts due to such factors as delayys or size reductions in transactions, fewer largge transactions in a particular quarter, unanticipated fluctuations in currency exchange rates, delays in delivery of new products or releases or adecline in our renewal rates for support contracts. (3) Our hardware systems revenues and profitability could decline further, andwe may fail to achieve our financial forecasts with respect to this business. (4) We have an active acquisition program and ouracquisitions may not be successful, may involve unanticipated costs or other integration issues or may disrupt our existingoperations. (5) Our international sales and operations subject us to additional risks that can adversely affect our operatingresults, including risks relating to foreign currency gains and losses. (6) Our periodic workforce restructurings, including reorganizations reorganizations ofof ourour sales force, cancan be disruptive. ((77)) IfIf we are unable unable toto develop develop new oror sufficiently sufficiently differentiateddifferentiated products products sales force be disruptive we are new and services, or to enhance and improve our products and support services in a timely manner or to position and/or price ourproducts and services to meet market demand, customers may not buy new software licenses, cloud software subscriptions orhardware systems products or purchase or renew support contracts. A detailed discussion of these factors and other risks thataffect our business is contained in our SEC filings, including our most recent reports on Form 10-K and Form 10-Q, particularlyunder the heading "Risk Factors." Copies of these filings are available online from the SEC or by contacting Oracle Corporation'sInvestor Relations Department at ((650)) 506-4073 or byy clickingg on SEC Filinggs on Oracle’s Investor Relations website at http://www.oracle.com/investor. All information set forth in this presentation is current as of October 31, 2013. Oracle undertakes no duty to update any statement in light of new information or future events.

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http://www.oracle.com/investor

d scuss o c udes ce a o G a c a easu e c

Non-GAAP Financial Measures

To supplement our financial results presented on a GAAP basis weTo supplement our financial results presented on a GAAP basis, we use non-GAAP measures, 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 andisolation or as a substitute for comparable GAAP measures and should be considered only in conjunction with our consolidated financial statements prepared in accordance with GAAP. Today’s discussion includes certain non-GAAP financial measures, whichs, were included in our earnings releases.

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Oracle Strategy

Complete Stack

• Best-of-Breed • Open • Vertical Integration • Extreme Performance • Engineered Systems Engineered Systems

Complete Customer Choice

• On-Premise

• Private Cloud

• Public Cloud

•• Hybrid Cloud Hybrid Cloud

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Best-in-Class Leader • Database • Database on Solaris &

Linux • Data Warehousing • Embedded Database • Middleware • Application Servers • Identity and Access

Management • Enterprise Performance

Management

• Human Capital Management

• Customer Relationship Management

• Project Portfolio Project Portfolio Management

• Communications • Retail • Financial Services Financial Services • Banking • Insurance • Public Sector • Professional Services

6

Company Profile

Scale • $37B FY13 • #1 in 50 product or industry categories • 400,000 customers in 145 countries • 25,000 partners • 120,000 employees • 15 million developers in Oracle on-line communities

Innovation and InvestmentInnovation and Investment • 35,000 developers and engineers • 18,000 customer support specialists, speaking 29 languages • 18,000 implementation consultants • 2 5 million students supported annually • 2.5 million students supported annually

Headcount current as of Q1 FY2014. 7

Current Financial Performance Year over Year Growth

FY13 Q1 FY14

Software Revenue +7% +8%

Hardware Revenue -14% -5%

Services Revenue -5% -6%

Total Revenue +2% +4%

Operating Income +4% +6%

Operating Margin (as reported) 47% 45%

Earnings per Share +11% +14%

Share Repurchases $11B $3B

Free Cash Flow $14B $6B

Unless stated otherwise, year-over-year growth rates are non-GAAP and presented in constant currency. GAAP to Non-GAAP reconciliations are available at www.oracle.com/investor.

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www.oracle.com/investor

Revenue FY2013 Geographic Distribution

Asia Pacific 17% of Total Revenue

Americas 53% f T t l R 53% of Total Revenue

EMEA 30% of Total Revenue

Source: GAAP Results. 9

Revenue FY2013 Line of Business Distribution

Hardware Systems Support 6% of Total Revenue

Hardware Systems Products 8% of Total Revenue 8% of Total Revenue

Services Revenues Software License Updates & Support 12% of Total Revenue

46% of Total Revenue 46% of Total Revenue

New Software Licenses 28% of Total Revenue


Software Revenue Grew 14% CAGR

$27.5B $

$17.8B $18.9B

$20.6B

$24.0B $26.1B

$7 2B $8.1B $9.4B

$11.5B

$14.2B

26% +6%

+9%

+17% +9% +5%

$7.2B

+2% +12% +17% +23%

+23% +26%

FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13

Source: GAAP Results. Compounded Annual Growth Rate from FY03 to FY13, or 10 years 11

$

Our Business Model Drives Recurring Revenue $27.5B

$26.2B $24.1B

$20.7B $19.1B

$18.0B 54%

$14.4B $11.9B

$9.7B $8.1B$7 2B$7.2B

44%


New Software License First Year Support Continuing Support

Source: Non-GAAP Results. GAAP to Non-GAAP reconciliations are available at www.oracle.com/investor. “First Year Support” is an internal estimate and assumes 100% software support attach, 22% pricing and all sales at the end of the quarter. “Continuing Support” is non-GAAP software support, as reported, less “First Year Support” 12


% %

Operating Margin Trends 11% Operating Margin Expansion

47% 47%

41% 41%

43%

46% 45%

44%

46% 47%

~ 4 mos of Sun

included

36%

39% 40%

included

FY03 FY04 FY05 FY06 FY07 FY08 FY09 1H10 2H10 FY11 FY12 FY13

Source: Non-GAAP Results. GAAP to Non-GAAP reconciliations are available at www.oracle.com/investor. 13


Earnings Per Share Grew 20% CAGR $2.68

$1 67

$2.22 $2.46

$0 68 $0.80

$1.01

$1.30 $1.44

$1.67

+33%

+16%

+9% +11%

$0.43 $0.51 $0.68

+10% +33%

+19%

+11%+29%

+26% +18%


Source: Non-GAAP Results. GAAP to Non-GAAP reconciliations are available at www.oracle.com/investor. 14

Free Cash Flow Grew 17% CAGR $13.6B $13 1B

$8 5B

$10.8B

$13.1B

$ $4.3B

$5.2B

$7.2B $7.7B

$8.5B

+8% +9%

+27%

+22% +4%

$2.7B $3.0B $3.4B

-4% +10% +12% +28%

+21%

+38% +8%


Source: Non-GAAP Results. Compounded Annual Growth Rate from FY03 to FY13, or 10 years. 15

Investing for Growth Sales Headcount Growth

9,900

6,400 7,200

8,500

,

2 500 2,800

4,200

5,300 5,800 5,700

800 1,200

1,600

2,500 ,

Q1FY11 Q2FY11 Q3FY11 Q4FY11 Q1FY12 Q2FY12 Q3FY12 Q4FY12 Q1FY13 Q2FY13 Q3FY13 Q4FY13 Q1FY14

Source: Company 16

Investing for Innovation Research & Development Headcount Growth

8,000

5,100 5,400

5,900

6,700

,

2 100 2,600

3,500 4,200

5,100

500 700 1,300

1,600 2,100

Q1FY11 Q2FY11 Q3FY11 Q4FY11 Q1FY12 Q2FY12 Q3FY12 Q4FY12 Q1FY13 Q2FY13 Q3FY13 Q4FY13 Q1FY14

Source: Company 17

Investing for Growth & Innovation

96% of Headcount Additions

since June 1, 2010

have been in Sales and R&D

Source: Company 18

Oracle Acquisitions APPLICATIONS

Identity and AccessManagement

Performance Management

Enterprise ContentManagement

Business Intelligence Middleware Platform and Management

Data Integration

DATABASE

MIDDLEWARE

Virtual Machine Systems Management Operating System

OPERATING SYSTEM AND VIRTUAL MACHINE

SERVERS AND STORAGE

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$82B Proceeds

from Financing Acquisitions

$32B

($39B)

Cash from Operationsand Other

Buybacks & Dividends

Sources and Uses of Cash $83B in M&A and Shareholder Returns

$26B$26B ($44B)($44B)

$7B

FY03 FY13

Source: GAAP results. 20

Capital Allocation $42B in Buybacks and Dividends $12.5B

$7.1B

$4.2B$3.9B

$2.2B$2.0B$2.0B$2.1B $1.3B$1.5B

$2.7B


Buybacks Dividends


A Very Healthy Balance Sheet

•• Return on Equity (TTM) Return on Equity (TTM) 25%25%

• Return on Assets (TTM) 14%

• Cash & Investment (MRQ) $39B

• D bDebt to EEquiity (MRQ) (MRQ) 96

• Net Cash (MRQ)

.96x

$15B

Figures presented above are based on GAAP results for the four most recent quarters including Q1 FY2014. TTM – Trailing Twelve Months; MRQ – Q1 FY2014 22

Comparative Performance

23

How Does Oracle Compare to Tech Peers?

We selected 12 Tech Peers and normalized each to Oracle’s fiscal year and aggregated GAAP results to compare Oracle’s financial performance against the group of our “Tech Peers.” 24

How Does Oracle Compare to The Dow?

We included all Dow Jones 30 companies except financial services companies of American Express, Bank of America, JP Morgan and Traveler’s Insurance. GAAP financial results for each company were normalized to Oracle’s fiscal year and aggregated to compare Oracle’s financial performance against the group. 25

Revenue 400

300

200

100100

0 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13

Oracle Tech Peers Dow 30

FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13

Source: FactSet. GAAP results were indexed to 100 for FY06 (or closest 4 quarter period); subsequent periods were indexed to FY06 to show trend on a common basis. 26

Operating Income 400

300

200

100100





Net Income 400

300

200

100100





Free Cash Flow 400

300

200

100100





Earnings Per Share 400

300

200

100100





Oracle Stock Has Performed Well Compared to Broader Indices – 7 Year

2006 2007 2008 2009 2010 2011 2012 2013

O l NN dasdaq S&P 500 DDow Jones Oracle S&P 500 J

Source: FactSet Research. Prices for the last 7 years were indexed (September 2006 – September 2013) 31