Krista Bessinger - Vice President, Investor Relations Larry Ellison - Chief Executive Officer Charles Phillips - President Safra Catz - President, Chief Financial Officer

Kash Rangan – Merrill Lynch John DiFucci - Bear Stearns Tim Klasell - Thomas Weisel Partners Peter Kuper – Morgan Stanley Jason Maynard - Credit Suisse Adam Holt – JP Morgan Heather Bellini – UBS Charles Di Bona - Sanford Bernstein Robert Schwartz - Jefferies & Co David Rudow – Piper Jaffray

Good day ladies and gentlemen and welcome to today’s Oracle Corporation Quarterly conference call. (Operator Instructions). Now as it’s time for opening remarks, I’d like to turn the conference over to the Vice President of Investor Relations for Oracle, Krista Bessinger. Please go ahead, Krista.

Great, thank you. Good afternoon, everyone and welcome to Oracle’s fourth quarter fiscal year 2006 earnings conference call. With me on this call are Oracle’s Chief Executive Officer, Larry Ellison; Oracle’s President, Charles Phillips; and Oracle’s President and Chief Financial Officer, Safra Catz. As usual, our prepared remarks will be followed by Q&A. Before we begin, however, I’d like to remind you that today’s discussion may include predictions, estimates, or other information that might be considered forward looking. While these forward-looking statements represent our current judgment on what the future holds, they are subject to risks and uncertainties that could cause actual results to differ materially. You are cautioned not to place undue reliance on these forward-looking statements which reflect our opinions only as of the date of this presentation. Please keep in mind that we are not obligating ourselves to revise or publicly release the results of any revision to these forward-looking statements in light of new information or future events. Throughout today’s discussion, we will attempt to present some important factors relating to our business that may affect our predictions. You should also review our most recent Form 10-K and Form 10-Q for a more complete discussion of these factors and other risks under the heading, ‘Factors That May Affect our Future Results or the Market Price of our Stock.’ Our PDF copy of our press release and financial tables, which include a GAAP to non-GAAP reconciliation, can be viewed and downloaded on the Oracle Investor Relations website at www.oracle.com/investor. With that, I’ll turn the call over now to Safra Catz, President and Chief Financial Officer.

Thanks, Krista. Good afternoon, everyone and thanks for joining us. I’m going to be particularly brief today, because in many ways the numbers really speak for themselves. I’ll focus on this call on the non-GAAP results for Q4 and for the year. Then I’ll review guidance for Q1, then turn the call over to Larry and to Charles. As I review today’s results, I just want to let you know that currency was basically neutral this quarter. Slightly negative, one percentage point for the entire year, but neutral for Q4. Constant currency and US dollars will be very similar. So with that, let’s talk about Q4. New software license revenue was very strong, up 32% year-over-year, with revenue of $2.1 billion. Database and middleware license revenues were spectacular across all geographies, up 18% year-over-year in Q4, and 9% for the full year. Middleware was up 57% year-over-year for the quarter, growing much faster than BEA. Applications came in very strong across the board, generating license revenues of $641 million, that is 83% up year-over-year, both in US dollars and constant currency. This compares to 14% growth constant currency in SAP’s most recent quarter. Application license revenues for the full year were $1.3 billion, up 66%. Now, I’m going to cut these numbers up a little bit for you, because with the acquisitions they are a little more complicated, so I’ll give you a little bit of detail here. Siebel came in $81 million for applications license. That exceeded our expectations, a little less than double what we were expecting. Organic applications license revenue, which we’ll define as without Siebel and without Retek, which we bought last year, was great. It was $544 million in Q4, which is up 56%. Now our apps license growth rate was strong around the world with 73% growth in the Americas, 94% in APAC, and 108% in EMEA. Our strength in Q4 was also very broad-based in terms of deal size. The volume of license transactions -- meaning the number of actual deals -- greater than $1 million grew 39%, which is a clear indication that Q4 was a strong quarter across the board, versus dominated by any large deals. It was a real volume game. To sum up our new license business, it was clearly a great year for Oracle. As I said before -- and this is becoming a recurrent theme -- we continue to take market share across all our product lines. Growing apps faster than SAP, middleware faster than BEA, and database far faster than IBM. Our product updates and support revenue was up 16% on a non-GAAP basis. These renewal rates are at, again, a very high margin and at an all time high, showing that customers continue to renew; renew every quarter, every year and are very satisfied. Our revenue growth also remains very profitable growth. We intend to grow market share and profitability simultaneously. Q4 income from operations grew 18% to $2.2 billion, resulting in operating margins of 45%. Now operating margins did tick down a bit year-over-year, about 1.5 percentage points, due to some high sales compensation expenses and marketing expenses, which were all basically triggered by very strong Q4 results. We do expect margins to improve in FY ’07 with progress above the 40% margin we’re reporting today. We also grew EPS by 11% in Q4 to $0.29 on a non-GAAP basis. The fiscal year’s EPS was $0.80, up 19% on a non-GAAP basis. I want to point out that this was achieved even though we had interest expense from the debt, a higher weighted shares outstanding due to Siebel, and a one point increase in our effective income tax rate year-over-year. The one point change in the tax rate equals over $0.01 in EPS. It actually had a $0.01 impact on our Q4. In Q4, we bought back 123 million shares, nearly completing our Siebel repurchase. We intend to continue buy backs throughout FY ’07 with the adoption of the 10B51 plan for the whole company and have plans to buy back an additional $1 billion a quarter in FY07. Operating cash flows increased by $1 billion year-over-year while free cash flow increased 28%. DSO was 55 days, down two days from last year, showing folks are paying their bills. In summary, I could only say that a year ago we gave you guidance for the year, and we clearly exceeded it at every level. As for Q1, our guidance is as follows. While we feel very good about our prospects heading into FY07, Q1 is typically our smallest seasonal quarter, being June, July, August. So we’re going to set guidance as follows: New software license revenue for the quarter are expected to be up 18% to 25% year-over-year. Total software revenues are expected to be up 18% to 20% on a non-GAAP basis. Software revenues on a GAAP basis are expected to be up 23% to 25%. Total revenue for Q1 is expected to be up 19% to 20% year-over-year on a non-GAAP basis. On a GAAP basis, it’s expected to be up 22% to 24%. Non-GAAP EPS for the first quarter is expected to be $0.16 per share as compared to $0.14 last year. GAAP EPS for the first quarter is expected to be $0.11 per share, up from $0.10. This translates into a non-GAAP net income growth of 11% to 15% and GAAP net income growth of 9% to 14%. Now, this guidance assumes an annual effective income tax rate of 30%, up from 29.2% in Q1 last year, due to the shift in the mix of earnings from our foreign sub. That alone is a $0.01 for Q1. It also assumes one point of positive currency impact, because that is where we stand right now; but with currency fluctuations, it’s difficult to predict and we’re not trying to predict, we’re just telling you year-over-year where it is right now. It could vary from our current estimate. Now in Q1, we’re going to adopt FAS 123-R. Our Q1 GAAP guidance currently assumes comp expense of approximately $50 million for the option. We expect stock compensation to reduce diluted earnings per share in FY07, about $0.02 to $0.03. With that, I’ll turn the call over to Larry. Larry Ellison: Thank you, Safra. I’m going to be even briefer than Safra. Q4 really was a great story with gains in market share across the board. In round numbers, our sales a year ago were just under $4 billion and this year, just under $5 billion; a growth of almost $1 billion year-over-year -- $900 million to be exact -- year-over-year. Extraordinary growth in the quarter, with as Safra pointed out, gains in the market share in every product line. We're growing our database business faster than dB2, we're growing our middleware business faster than BEA, and we're growing our applications business faster than SAP. Let me focus a bit on the database business, because half the time I read a story about Oracle, people are quoting "Well, Oracle's database business is growing slowly and they are under attack from IBM and by Microsoft." It wasn't long ago where Gartner had Oracle and IBM dB2 neck-in-neck in their market share estimate. Well, it turned out that Gartner did a little bit of rethinking. Gartner's latest report showed Oracle's database business with a 49% share versus IBM at 22%. So, not only are we not close, according to Gartner, our database business is more than double our nearest competitor. IDC has a somewhat more conservative point of view. IDC has our database business with a 44% market share versus dB2's 21%, but still more than twice the scale of IBM's business. So our database business is growing well, and very, very healthy, and very, very profitable. All of our product lines, we're gaining share in all of our product lines, and our top line growth was, again, nearly $1 billion quarter-over-quarter. With that, I'll turn it over to Charles.

Thanks, Larry. We had a really great quarter, and some tough comparisons in Q4 of the last year, but every region really stepped up. I am really proud of the way the field performed in the quarter. Let me give you a few facts around the major parts of our business. The applications business growing 83%, clearly customers are more comfortable with our strategy. What they have seen is continued enhancements on existing products, and I think there is installed base pent-up demand as they're moving past wait-and-see mode into time-to-get-busy mode, and buying and deploying products. We have 30,000 application customers – I think we've just scratched the surface of the up-sell and cross-sell opportunities – and the reason they've changed their mind is we've delivered substantial value around our existing products. So they've got new versions, middleware certifications that are supported in 145 countries, more industry functionality, analytic dashboard, search capability, on and on. So just to give you an idea of what's happened over the last year or so in terms of new product shipment and this sense of improvement, with PeopleSoft we've shipped five functional releases, two operational dashboards, and 36 maintenance packs. That's in the last year. JD Edwards, a major service pack released, two new tools releases, industry enhancements. Siebel, three analytics releases, three CRM on-demand releases, and more and more. Oracle E-Business [inaudible] update. We have also did a lot of integration with G-Log, in fact [inaudible] with our product lines. With G-Log we sold more in Q4 than we did all last year as a separate company for G-Log. The product build is going to continue. We have new versions of the applications to be released this summer and into the fall. So PeopleSoft 9.0 comes mid-summer, JD Edward 8.12 midsummer, Oracle 12 early fall, and then Project Genesis, which is a comprehensive set of integrations across existing applications, that's in the fall as well. So the customers are happy. We do surveys. We had a recent one of about 1,000 customers; less than 1% were considering any sort of migration. So we've done a complete 360 where the customers are happy with what they see. From a competitive standpoint, we had 266 wins in the quarter over SAP in Q4. Organically, we've moved 56% against 15% last quarter. In the fiscal year, we had 585 wins over SAP. Additionally, 127 new SAP [inaudible] joined the SAP program. The total this quarter is just over 2,000. Let me give you a sense of some of the wins in the quarter in terms of names: Kraft, Land o’Lakes, Proctor & Gamble, JDM Smucker -- and that's an important win – and CPG, institutions where SAP historically has been strong in; Sprint, T-Mobile. The Sprint one, with Nextel, was very important. That CIO was publicly fairly negative about the PeopleSoft acquisition in the beginning. Now, he was at our sales force kickoff saying we were his most strategic supplier. He now says he sees the advantage and the value, and encourages us to keep doing what we are doing. And generally in telcos we are doing well. I think the acquisition of Portal and the STP announcements helped us: we won T-Mobile, Cingular, Enbridge and Mobil in the quarter. HP was a big win in the quarter. It used to be an SAP account; we're surrounding them and boxing them off, our largest apps deal in the quarter. Ingersoll-Rand, the State of North Carolina, we have a lot of momentum with state and local governments. We haven’t lost a state in almost two years. Nearly half of all the states are using Oracle products now in their applications area. SunTrust, Starbucks are already existing customers who are buying more, McDonald's, Nike, J.C. Penney, The Southern Company. Utilities is a key vertical for SAP. We beat them head-to-head in that account this quarter. BP International, [CIAT], just a lot of good wins. The same thing is happening in the mid-market, which we don't talk enough about. We have 19,000 mid-market customers. We have a lot of momentum there as well. Switching to middleware, that's been a real success story. We told you about a year ago we thought it would be our next billion dollar business, middleware. We're here to tell you that, with our Q4 performance, we've crossed over $1 billion in middleware product revenue for the trailing four quarters. It's a billion dollar business. We now have over 30,000 application service customers, that's 19% year-to-year growth. We're the fastest growing middleware suite in the world. We continue to do it with innovation. That product line has won over 145 independent awards in the last 12 months, and has 270 patents. Within the middleware suite, I'd like to highlight security as having substantial momentum. Our acquisitions of Thor, OctetString and Oblix has given us the strongest security suite on the market. We've sold more Oblix now in Q4 than in the history of the company. So security is a hot product line, it's a door opener for our entire middleware suite, and that's been the sell strategy here: to use these best-of-breed components that are hot-pluggable, highly standard, and wedge into any account, and start where we can start, and then expand our presence there over time, and replace whatever is there. Some big wins in middleware: Circuit City, Monster Worldwide, State of North Carolina, HP, Department of Defense, Comcast Cable, CTIC, which is the largest state-owned conglomerate in China -- a very important win there -- and several of those are BEA replacements. Lastly, on databases, Larry mentioned we continue to gain market share there, but also have set the bar for performance. We announced a 64-node Linux cluster which is the new record for TPCH benchmark. We now hold the top five performance results of the seven top ten in TPCH benchmarks. Also, on both the [inaudible] in Q1, our pipelines look healthy. In the pipelines, the individual deals above $500,000 is more than double what it was a year ago. The momentum is rising, the work force is extremely motivated and confident after seeing momentum build all year long. They handle the acquisitions extremely well and learn their products [inaudible] over a much larger installed base. I think we are product rich and customer rich, and we are ready to go. With that, I'll turn it back over to Safra.

I think we are ready to take questions, Operator.

(Operator Instructions) We'll take the first question from Heather Bellini, from UBS. There is no response. We'll move on to Kash Rangan, with Merrill Lynch. Kash Rangan – Merrill Lynch: Thank you very much. I'm curious to see what is driving the acceleration in license revenue growth. It is a very healthy trend, it sounds like, Is there a combination of factors that you would attribute the acceleration to? Are you seeing any change in your pipeline, any change in the sense of urgency on the part of customers, just better macro economic conditions? Or is it individual product options on the database set like RAC, BI, really starting to get into the next phase of inflexion, if you will? Charles Phillips: I'll take that one. I'd say it's a combination of factors. One is having best-of-breed products in so many areas. Secondly, the customers are now seeing the value of all those products being inside of Oracle. Now we can integrate them better, certify it with our middleware, better reporting, and owning all those products together is a better account ownership experience. So we're a lot more important to customers now, that's the other thing. When we go see a customer they are eager to meet with us, they want to know our strategy, and we can get one conversation started. Almost any problem they have, we have a product for now. So it always expands way beyond where it first started. So the combination of having so many customers and these key products, I think it just put us in a new zone.

Let me reinforce what Charles just said. A while ago, we decided to really focus on selling suites of products, whether it was the E-Business Suite or our middleware suite. By suite we mean a bunch of products that are really engineered to work together; a single install, a single set of management tools, a single set of patching tools. It makes it much simpler. If you try to get a best of breed from 30 different suppliers, it is very difficult to actually run that environment, very difficult to patch the environment, very difficult to manage the environment. We are winning out of best of breed. The integrated suites are winning, and Charles’ point is, our individual components inside of our suites are offering the best of breed products. So, the components are very highly functional and the components are pre-integrated. The combination of those two things makes it a very attractive buy to the customer. Kash Rangan – Merrill Lynch: Larry, since we have you on, could you elaborate on your comments in the press related to getting into the Linux operating systems business? How should we think about that?

Well, I’m thinking a general comment about Open Source. The interesting thing about Open Source -- and I don’t want to spend a lot of time on it today -- the interesting thing about Open Source is it’s free to everybody, even Oracle. So, Oracle could choose to just take a copy of anyone’s Open Source, and as long as we could support it better than an Open Source company, we could suddenly leap frog them and become the number one distributor. It was just interesting. It is interesting to evaluate Open Source and understand that they don’t own any of their intellectual property. It is free for us to take and support, which we may in fact, do in the future.

We will now move on to John DiFucci - Bear Stearns. John DiFucci - Bear Stearns: Thanks, congratulations. It’s a pretty impressive quarter here. Safra had mentioned sales and marketing costs being a little bit elevated, but can you describe what’s going on in the cost of services line? Oracle seems to have engaged more closely with its partners over the last couple of years; but we were a little surprised here. Not that the services revenue was that much higher than expected, but the cost there was a lot higher than we expected.

Just because we’ve had now three full months of the Siebel On-Demand infrastructure, the infrastructure that we adopted is actually a very expensive infrastructure. We are actually currently working on reducing the cost. Siebel has some agreements with providers that really didn’t benefit from the massive economy to the scale Oracle has. So that’s at least part of it. We’ll be moving that infrastructure. We wanted to do that as appropriate for the customers, but that’s part of it. In addition, we have been continuing the hiring in our consulting organization. We have what could only be referred to as a high class problem. We’ve got too much work and not quite enough folks to fill it. We have been really ramping up the hiring because there are so many new Oracle Peoplesoft, Siebel projects, et cetera. I don’t want to leave anyone out, and so that’s going on, too. I think a lot of this is going to sort of shake out through next year. John DiFucci - Bear Stearns: Okay, just one quick follow up: Obviously, a really strong quarter here across pretty much all geographies and all product areas. I’m just trying to figure out -- everyone’s looking at this now, I’m sure -- to see what is this an indication of? Obviously, Oracle is executing well, but what is the IT spending environment? What’s happening out there? It’s probably some of both?

I think one of the things when we look at Q1, we are also trying to make an estimate on what to expect going forward. What we are seeing is very large volumes. What I mean by that is just massive number of deals. I’m not even commenting on the size of the deals, all of which are getting a little bit bigger we noticed, but just a very, very marked increase in volume. What we can’t tell, is whether that’s an IT spending indication or it’s a direct response to the state of the economy or it’s really an answer to people getting more comfortable with Oracle, buying more products and more customers buying more products. We can’t split it out if it’s the IT spending environment entirely -- it doesn’t seem like it is. It does seem to some extent a little bit more Oracle-specific, but we’ll see as the year plays out.

Our next question comes from Tim Klasell - Thomas Weisel Partners. Tim Klasell - Thomas Weisel Partners: Yes, good afternoon and congratulations on the quarter, as well. The first question has to do with seasonality. You get to bring in a greater bundle to your customers to their much broader product suite. Do you think that this quarter’s out-performance was maybe a little bit due to greater seasonality as you bring a greater product set? What should we expect for Q1? That’s the first question.

The fourth quarter is our biggest quarter of the year every year, and we had a very strong performance a year ago. So it’s nothing new here. I think if you are looking at the trend in the business and the number of transactions as Safra described, I think it’s an indicator of a pretty healthy, broad-based business. So hopefully, this is the trend going forward. Tim Klasell - Thomas Weisel Partners: Okay, great. This is normally the time of the year when you mentioned you had your sales kick off. How are you tracking towards cross-training the acquired sales people in the various products -- where you are going to cross-train them? As far as setting quotas and territories, how are you tracking this year versus maybe this time last year?

Well, a lot of that training got done during the year; that’s partly why you saw the results you saw; that people learned how to sell the new products fairly quickly and they saw the opportunity. That’s part of what’s going on here. The sales force is more competent and they know how to deal with multiple products now, and then the specialization to keep the expertise in house. So all that’s working. The training took place at the sales force kick-off, we did additional training this week. That ends tomorrow, so we’re going to be ready to go going into next week.

Our next question comes from Peter Kuper, Morgan Stanley. Peter Kuper – Morgan Stanley: Thanks very much. Safra, in particular, we spoke a while ago, you mentioned renewals and maintenance contracts were Oracle-installed; they're not going to switch. I'm trying to figure out why there isn't more leverage on sales and marketing in particular, if we had to nitpick on one thing. I hear you are saying you're ramping up more sales force. Charles just mentioned getting more training and you said it is going to take a year, though -- shake it out next year for overall margin leverage. Is sales and marketing a good place to start to focus to see the improvements? Or where should we be looking in the model to get some lift here?

Well, I think first of all, there were a bunch of little anomalies. As I mentioned, marketing was higher than usual; but in many ways, that is upfront spending that will be completely undone in Q1, because OracleWorld actually makes money. So that is a piece of it. Part of it is we have actually recalculated , everyone's sales compensation to our now larger base and larger target. So we won't be paying as much per dollar, because it won't be such a large over-achievement. So I think that is actually going to show up, really, right away. As I mentioned a little earlier, the Siebel cost structure in their On-Demand is going to be rationalized rather quickly. So I think you are going to see it really quite quickly. These are the areas where -- when you over-achieve quite this far in new license, a few people make a lot of money. Peter Kuper – Morgan Stanley: Wouldn't that, though, to that question then, see some spill-over into Q1? Things are going great; that's fine. Wouldn't Q1 be a little bit stronger, given this momentum? Or was it just a big rush year end, typical, like Charles was mentioning, and you're just being conservative here in Q1? Is that a fair assessment?

It is hard to tell because we think we are being realistic for Q1. Q1 is always a tricky quarter for us. It is June/July/August. There is no forcing event for salespeople. August is vacation. We have World Cup this year, so Europe is half-closed as it is. So we are trying to be conservative. Though clearly, that level of guidance for Q1 is not conservative as compared to our guidance in previous years. So it is actually aggressive guidance from just the numbers themselves. But when we look at the pipelines they draw this picture, which is why I felt I could give you an 18% to 25% increase in the Q1 which we think that is where we will come in. Now in Q1, the reps are generally not in their accelerators. So as a result, comp expense is lower for that quarter. So we won't have the Q4 effect we had this quarter.

Our next question comes from Jason Maynard - Credit Suisse. Jason Maynard - Credit Suisse: Congratulations, guys on making the full year revenue number. Larry, a quick question for you on the database business. Can you maybe talk a little bit about what you're seeing in terms of movement to RAC and some of the additions? Because obviously, Database plus 9 is a strong number and you guys are gaining share; but maybe talk about some of the dynamics behind that number?

Well, I think, again, we are still in the early adoption phase of RAC. A lot of our very large customers have moved to RAC because they need the performance. As we get the administration tools down to the point where using RAC is exactly as easy, from the point of view of the data center manager -- exactly as easy as using a single computer – we think virtually everybody in our installed base – well let’s say half of our installed base – will move to RAC because it is just cheaper, more reliable and faster, as long as there is no administrative overhead. So we think RAC adoption has been pretty good. But you ain’t seen nothing yet. I also think that is true on the administration tools; good control and an aggressive enterprise manager, so we think we have a good deal of headroom on various opportunities with the options. Our low-end products are doing very, very well. As you know, we’ve very aggressively priced low-end products to compete with everything from a free version to products that cost substantially less than SQL server but do more. We think the whole database business can continue growing in the high single-digits, maybe even low double-digits in a good year. Jason Maynard – CSFB: How much of the database improvement is predicated just on getting the European sales force on par with North America in terms of selling the options?

Well again, the United States is always the early adopters of new technologies. So it is not that surprising that the Europeans haven't sold the options as aggressively. Again, as we move out of the early adoption phase into the mainstream phase, the European business is as big, if not bigger than our North American business. So we expect a huge amount , it is an even bigger opportunity for RAC in Europe, because it is under-penetrated.

Our next question comes from Adam Holt – JP Morgan. Adam Holt – JP Morgan: Good afternoon. A couple of questions on the guidance. First of all, could you maybe walk through what some of your assumptions are for the first quarter in terms of what we can expect to consolidate from some of the recent acquisitions, in particular i-flex? Secondly, on a going-forward basis, should we expect to get just quarterly guidance, or will you all be in a position to comment on the year, in the near term?

We are going to go back to our historical practice of just giving you one quarter in advance. It will save us the constant reviewing for the year every time we do an acquisition, if we do any more. But we are going to go back to our historical habit of just giving it for the quarter. For i-flex, which is the only one that we don't own 100% of, other than our Japanese publicly traded subsidiaries, we are including very, very little from that. We are still working out the exact consolidation methodology. We will be laying that out. As it is anyway, we would only consolidate it two months in arrears, because that is the way the rules work out with an Indian company and with their fiscal year end. Adam Holt – JP Morgan: Just one quick follow-up, if I could. Obviously terrific growth in options. Could you talk a little bit about what the database business grew ex-options in the quarter?

Yes, maybe we could do that later on another call. Database for the quarter, just Enterprise Edition is up about 9%.

Our next question comes from Heather Bellini - UBS. Heather Bellini – UBS: Safra, I agree with you. Your guidance for Q1, I think some people could be concerned that maybe it is a little bit aggressive. Could you comment, given the difficulties that Oracle has had in its Q1s over the past three years, what makes you feel differently with your guidance for this Q1 and the pipeline you are seeing? Could you contrast that versus this time last year, just to make people more comfortable with that 18% to 25% increase?

Yes, I actually read your report begging us to be as conservative as possible. You know, the thing that weighs is that I have to be realistic. The volumes -- and I mean not only size of deals, which isn't the big driver, it is the number of deals between $0.5 million and $1 million; between $1 million and $5 million; between $5 million and $10 million and under $0.5 million. All of these in the pipeline are markedly so up that applying what we think to be realistic closure rates, we should be within 18% to 25%. Do I think we will be at 17%? No. Do I think it will be much more than 25%? No. So we really gave you the most realistic view, even though we took into account that we always have a very hard time in Q1 because it is a June/July/August quarter. We feel that that is where it's going to come out. Now, the thing we don't know will be closure rates, and we keep getting surprised on the upside on closure rates, including in Siebel. Heather Bellini – UBS: Safra, just a follow-up would be if you could comment a little bit about if there's any sales force reorganizations that are going on versus what we have seen in the past as well?

There is nothing substantial going on. There is always some tweaking and raising quotas and targets, which of course helps in a lot of different ways. The territories have already been set. So it is a minor enhancement.

Our next question comes from Charles Di Bona - Sanford Bernstein. Charles Di Bona - Sanford Bernstein : Safra, I was wondering if we could follow up a little bit on what you were talking about, the large deal pipeline? Looking back at last quarter, you mentioned up 39% on deals over $1 million, which is faster than your new license growth rate. Is that relatively proportional between database and applications? Or is there a bias one way or the other in that?

You know what? I actually don't know that number. I don't think we've even done that analysis. What I see internally is all the deals have gotten chubby. You can laugh at that, but pretty much everything has bulked up. Transactions just in general. I think it is as a result of having a broader product line. So we have a lot of mix database and apps deals. We've got a lot of apps database deals that include middleware. We've got a lot of middleware that includes identity management. The entire pipeline has just gotten bigger. So individual deals are bigger, and just the number of deals is much bigger. Charles Di Bona - Sanford Bernstein : Following up on a couple other questions that were made there earlier, the add-on growth -- you have not broken that out separately. Could you give us color on that and on what RAC in particular has been doing for your numbers?

For the fiscal year -- that is what I actually think I have -- I am getting handed the quarter. For the quarter, it is up 30%. For the fiscal year, it is up 23%. Enterprise Manager was up 42%. Partitioning is up 20%. So the options all around are up 26%. So that's the basic numbers for the quarter. Enterprise Edition, as I said before, is up 9%.

Our next question comes from Robert Schwartz - Jefferies & Co. Robert Schwartz - Jefferies & Co : You talked about your Q1 assumptions being driven largely by growth in the number of deals. I'm wondering what your assumptions are about closure rates historically versus Q1 a year ago or Q4.

We have actually trimmed the closure rate a little. It is basically flat to where it was last year, which is what caused this bump-up in our guidance. So we didn't raise it even though our closure rates seemed to be rising. So we left it where it was last year, which as you know, was not a magnificent quarter. Robert Schwartz - Jefferies & Co : You started to say something, Safra, about Siebel. It got cut off. Could you talk about your assumption for Siebel revenue in the quarter?

I have to look back at what we have for the Siebel guidance. We did the whole thing in its entirety. For this Q4, we thought we would do 40-something and we did about 81 instead. We are being pretty conservative on the Siebel numbers generally because, again, we don't feel we quite have our sea legs on what to expect. We have had two quarters of a lot of success. Again, we don't know if it is a Q4 effect or if it is pent-up buying, even though, of course, Siebel had two wonderful quarters before we bought them. So we are staying pretty conservative on the Siebel numbers.

I think we have time for one more question.

Our final question will come from David Rudow – Piper Jaffray. David Rudow – Piper Jaffray: Nice job on the quarter. Given the increase in volumes, at what point can you tell -- whether it is one or two quarters out from now – if there is an actual increase in IT demand around ERP?

I think for sure what we are seeing is a shift in IT spending towards us. We are getting market share. Whether that is expanding the whole pie or not, I guess is the question. But from everything we’ve seen, we just have more products in more spaces and customers are more comfortable with us. Regardless, it seems like what happens is we are going to gain market share. David Rudow – Piper Jaffray: On the database side, what do you expect growth to be for the year? Are you disclosing that now?

No.

No, we haven’t.

There are no questions at this time. I will turn it back to you, Ms. Bessinger.

Great. Thanks, everyone for participating in today’s call. There is going to be a replay that is going to be available for 24 hours. That replay number is 719-457-0820 with pass code 4257576. You can also access the webcast replay on the Oracle investor relations website. That replay will be available through close of market on June 29th. With that, thank you all for joining us again. I will turn it back to the operator to close.

That does conclude our conference today. On behalf of Oracle, we thank you for your participation. Have a great day.