from 38% to 34%. The decline in operating margins is primarily due to costs incurred as a result of the acquisition of PeopleSoft such as amortization of intangible assets, acquisition related costs, restructuring costs and stock-based compensation resulting from the assumption of unvested PeopleSoft stock options.

 

Supplemental Disclosure Related to Acquisition Accounting

 

To supplement our consolidated financial information we believe the following information is helpful to an overall understanding of our past financial performance and prospects for the future. Readers are directed to the introduction under “Results of Operations” for a discussion of the inherent limitations in comparing pre- and post-acquisition information.

 

The results of operations include the following purchase accounting adjustments and significant expenses incurred in connection with acquisitions:

Software

 

Software includes new software licenses and software license updates and product support.

 

New Software Licenses:   New software license revenues represent fees earned from granting customers licenses to use our database, middleware and application software products. We continue to place significant emphasis, both domestically and internationally, on direct sales through our own sales force. We also continue to market our products through indirect channels.

Fiscal 2006 Compared to Fiscal 2005:   Excluding the effect of currency rate fluctuations, new software license revenues increased 21% due to strong sales execution in all product lines. Applications revenues contributed 60% to the increase in new software license revenues, database revenues contributed 26% and middleware revenues contributed 14% in fiscal 2006. Additionally, new software license revenues increased in all geographic regions. Excluding the effect of currency rate fluctuations, the Americas contributed 57%, EMEA contributed 23% and Asia Pacific contributed 20% to the increase in new software license revenues. New software license revenues in the Americas, specifically in the United States, increased at a faster rate than in other regions primarily due to the relative geographical mix of revenues and location of sales personnel from our acquired companies.

 

Excluding the effect of currency rate fluctuations, database and middleware revenues grew 11%. Database revenues increased 8% primarily driven by increased demand for database option products. Middleware revenues grew 36% due to a gain in market share in the application server market as a result of better sales execution and more competitive features and functionality. Middleware revenues also include $34 million of revenues from the licensing of Siebel products in fiscal 2006.

 

Excluding the effect of currency rate fluctuations, applications revenue increased 67% as a result of increased demand for our applications products, including products from acquired companies, better sales execution as a result of segmenting our sales force by product and a strengthening of our competitive position in the applications market, particularly in the United States and EMEA. PeopleSoft products contributed $220 million to the growth