8060504030252015

107.5

Percentsharestraded

302010

Target Price Range2013 2014 2015

ORACLE NDQ-ORCL 24.19 14.3 15.821.0 .82 0.8%

TIMELINESS 2 Raised 12/25/09

SAFETY 1 Raised 5/22/09

TECHNICAL 3 Raised 11/13/09BETA .90 (1.00 = Market)

2013-15 PROJECTIONSAnn’l Total

Price Gain ReturnHigh 45 (+85%) 18%Low 35 (+45%) 11%Insider Decisions

J J A S O N D J Fto Buy 0 2 0 0 0 0 1 0 0Options 1 8 0 2 3 1 9 5 1to Sell 1 8 0 3 4 1 9 5 1Institutional Decisions

2Q2009 3Q2009 4Q2009to Buy 547 563 526to Sell 549 544 605Hld’s(000)299979529989173029233

High: 28.3 46.5 35.0 17.5 14.0 15.5 14.5 19.8 23.3 23.6 25.1 26.6Low: 5.3 21.5 10.2 7.3 10.6 9.8 11.3 12.1 16.0 15.0 13.8 22.2

% TOT. RETURN 4/10THIS VL ARITH.

STOCK INDEX1 yr. 34.9 63.03 yr. 39.2 9.55 yr. 126.3 57.4

CAPITAL STRUCTURE as of 2/28/10Total Debt $15718 mill. Due in 5 Yrs $5500 mill.LT Debt $11498 mill. LT Interest $585.0 mill.

(29% of Cap’l)

Leases, Uncapitalized Annual rentals $388.0 mill.

No defined benefit pension planPfd Stock None

Common Stock 5,019,091,000 shs.as of 3/23/10

MARKET CAP: $121 billion (Large Cap)CURRENT POSITION 2008 2009 2/28/10

($MILL.)Cash Assets 11043 12624 17489Receivables 5799 4430 3898Other 1261 1527 2592Current Assets 18103 18581 23979Accts Payable 383 271 616Debt Due 1001 1001 4220Deferred Revenue 4492 4592 5389Other 4153 3285 4026Current Liab. 10029 9149 14251

ANNUAL RATES Past Past Est’d ’07-’09of change (per sh) 10 Yrs. 5 Yrs. to ’13-’15Sales 13.0% 18.0% 14.0%‘‘Cash Flow’’ 19.0% 21.0% 12.0%Earnings 22.0% 23.0% 12.0%Dividends - - - - NMFBook Value 23.5% 27.0% 20.0%

FiscalYearEnds

FullFiscalYear

QUARTERLY SALES ($ mill.)AAug.31 Nov.30 Feb.28 May 31

2007 3661 4216 4449 5882 182082008 4593 5364 5371 7281 226092009 5422 5687 5504 6882 234952010 5063 5872 6469 9571 269752011 7650 8550 8575 10350 35125FiscalYearEnds

FullFiscalYear

EARNINGS PER SHARE AB

Aug.31 Nov.30 Feb.28 May 312007 .18 .22 .25 .37 1.012008 .22 .31 .30 .47 1.302009 .29 .34 .35 .46 1.442010 .30 .39 .38 .55 1.622011 .37 .45 .46 .62 1.90Cal- Full

endar YearQUARTERLY DIVIDENDS PAID E

Mar.31 Jun.30 Sep.30 Dec.312006 - - - - - - - - - -2007 - - - - - - - - - -2008 - - - - - - - - - -2009 - - .05 .05 .05 .152010 .05 .05

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007.35 .51 .72 .97 1.22 1.54 1.80 1.94 1.78 1.81 1.96 2.36 2.82 3.57.07 .10 .15 .19 .22 .29 .44 .52 .48 .50 .56 .73 .85 1.09.05 .07 .11 .14 .16 .22 .35 .46 .39 .43 .50 .68 .80 1.01- - - - - - - - - - - - - - - - - - - - - - - - - - - -

.04 .04 .05 .07 .06 .06 .05 .06 .05 .06 .04 .04 .05 .06

.13 .21 .32 .40 .51 .65 1.15 1.12 1.13 1.21 1.55 2.11 2.87 3.315798.8 5850.3 5902.4 5867.8 5840.0 5724.5 5615.1 5592.4 5431.0 5233.0 5171.0 5145.0 5232.0 5107.0

31.1 28.9 31.3 32.4 31.9 26.9 NMF NMF 36.8 24.6 25.1 17.9 16.3 17.02.04 1.93 1.96 1.87 1.66 1.53 NMF NMF 2.01 1.40 1.33 .95 .88 .90

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

10130 10860 9673.0 9475.0 10156 12119 14771 1820834.3% 38.0% 40.7% 39.8% 40.4% 42.5% 41.9% 42.1%390.9 346.9 363.0 327.0 234.0 206.0 223.0 249.0

2055.3 2561.1 2224.0 2307.0 2681.0 3541.0 4246.0 5295.035.5% 35.5% 34.7% 32.6% 32.0% 28.8% 29.7% 28.6%20.3% 23.6% 23.0% 24.3% 26.4% 29.2% 28.7% 29.1%5021.1 5046.6 4768.0 5069.0 7064.0 416.0 5044.0 3496.0300.8 300.8 298.0 175.0 163.0 159.0 5735.0 6235.0

6461.5 6277.8 6117.0 6320.0 7995.0 10837 15012 1691930.5% 39.1% 34.8% 35.6% 33.0% 32.3% 20.9% 23.6%31.8% 40.8% 36.4% 36.5% 33.5% 32.7% 28.3% 31.3%31.8% 40.8% 36.4% 36.5% 33.5% 32.7% 28.3% 31.3%

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

2008 2009 2010 2011 © VALUE LINE PUB., INC. 13-154.39 4.69 5.35 7.15 Sales per sh A 9.201.37 1.53 1.70 2.00 ‘‘Cash Flow’’ per sh 2.601.30 1.44 1.62 1.90 Earnings per sh B 2.50

- - .05 .20 .20 Div’ds Decl’d per sh E .30.05 .11 .05 .05 Cap’l Spending per sh .05

4.47 5.01 6.10 7.90 Book Value per sh D 12.705150.0 5005.0 5025.0 4925.0 Common Shs Outst’g C 4725.0

15.8 13.1 Bold figures areValue Lineestimates

Avg Ann’l P/E Ratio 16.0.95 .86 Relative P/E Ratio 1.05- - .3% Avg Ann’l Div’d Yield .8%

22609 23495 26975 35125 Sales ($mill) A 4350043.9% 47.3% 46.0% 40.5% Operating Margin 41.0%268.0 263.0 300 350 Depreciation ($mill) 400

6799.0 7393.0 8220 9450 Net Profit ($mill) 1200029.5% 28.7% 28.0% 29.0% Income Tax Rate 29.0%30.1% 31.5% 30.5% 26.9% Net Profit Margin 27.6%8074.0 9432.0 7500 10000 Working Cap’l ($mill) 1250010235 9237.0 11500 11500 Long-Term Debt ($mill) 932523025 25090 30575 39000 Shr. Equity ($mill) 6000021.0% 22.3% 20.5% 19.5% Return on Total Cap’l 17.5%29.5% 29.5% 27.0% 24.0% Return on Shr. Equity 20.0%29.5% 28.5% 23.5% 21.5% Retained to Com Eq 17.5%

- - 3% 12% 11% All Div’ds to Net Prof 12%

Company’s Financial Strength A++Stock’s Price Stability 85Price Growth Persistence 35Earnings Predictability 100

(A) Fiscal year ends May 31st.(B) Primary earnings through ’97, then diluted.Quarters may not add to total. Excludes non-recurring losses: ’93, 1¢; ’98, 2¢; ’05, 13¢; ’06,

12¢; ’07, 20¢; ’08, 24¢; ’09, 35¢; gain: ’00, 70¢.Next earnings report due late June.(C) In millions, adjusted for splits.(D) Includes intangibles. In 2009, $26.1 billion,

$5.22 a share.(E) Initial dividend paid May 8, 2009. Dividendspaid mid-January, April, July, and October.

BUSINESS: Oracle Corporation develops, manufactures, markets,distributes, and services database and middleware software, andapplications software that helps customers manage theirbusinesses. 2009 revenues as a percent of the total: New softwarelicenses, 30%; software license updates and product support, 51%;services, 19%. ’09 dep. rate, 6.9%. Foreign sales were 56%, pretax

profits 52% of total in 2009. Research & Development: 11% of ’09sales. Employed 86,000 at 5/31/09. Lawrence J. Ellison owns23.4% of stock, other Officers & Directors 0.6% (8/09 proxy). Chair-man: Jeffrey O. Henley. CEO: Lawrence J. Ellison. Inc.: DE. Add.:500 Oracle Parkway, Redwood City, CA 94065. Tele.: 650-506-7000. Internet: www.oracle.com.

The integration of Sun Microsystemsinto Oracle’s operating structure ap-pears to be progressing nicely. Interms of the field organization, incentiveshave been realigned and territories ad-justed (as necessary), bringing the Sunsales reps into the fold. We note thatdemand for Sun’s systems seems to berebounding, after waning due to the un-certainties arising in the hiatus betweenthe announcement and the closing of theOracle/Sun deal. In addition to the betterpipeline, corporate IT managers haveshown interest in Oracle’s product stra-tegy of tightly binding Sun’s hardware andoperating systems with its database sys-tems, middleware, and business applica-tions. Although these are early days inthis regard, sales of Exadata systems arequite brisk, indicating the strategy’spotential as it evolves and products aretargeted at a broader spectrum of applica-tions. Oracle’s bottom line should benefitfrom Sun in the May quarter, with pros-pects that the computer maker may con-tribute $1.5 billion and $2.0 billion to oper-ating income (non-GAAP) in fiscal 2011and 2012 (years end May 31st).

Revenue and earnings should ad-vance at a good pace in 2011. True, theaddition of Sun is an important factor.Nonetheless, software sales should contin-ue expanding nicely, now that economicprospects are improving and constraintson IT spending may loosen. Moreover, theFusion Applications should come to mar-ket this calendar year, likely strengthen-ing the company’s position against compe-titors like SAP. Oracle also believes that itcan be effective selling into vertical mar-kets, and has recently upped its ante inthe healthcare arena with the acquisitionof Phase Forward. Finally, expense man-agement will likely remain at the fore-front, helping to support the earningsgrowth we currently envision.Oracle stock is favorably ranked forTimeliness. The shares have taken a stepup since our February review, havinggenerally received good market support inthe wake of the completion of the Sun ac-quisition. Investors with an intermediatehorizon may find interest here, as Oraclemoves forward with service-oriented sys-tems and benefits from Sun materialize.Charles Clark May 21, 2010

LEGENDS15.0 x ″Cash Flow″ p sh. . . . Relative Price Strength

3-for-2 split 8/973-for-2 split 3/992-for-1 split 1/002-for-1 split 10/00Options: YesShaded area: prior recession

Latest recession began 12/07

© 2010, Value Line Publishing, Inc. All rights reserved. Factual material is obtained from sources believed to be reliable and is provided without warranties of any kind.THE PUBLISHER IS NOT RESPONSIBLE FOR ANY ERRORS OR OMISSIONS HEREIN. This publication is strictly for subscriber’s own, non-commercial, internal use. No partof it may be reproduced, resold, stored or transmitted in any printed, electronic or other form, or used for generating or marketing any printed or electronic publication, service or product.

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