Sybase 8K Results of Operations and Financial Condition | SEC 23 Oct 06

Exhibit 99.1

For Financial Inquiries:
Sybase Investor Relations
Lynne Farris
(925) 236-8797
lynne.farris@sybase.com
Charlie Chen
(925) 236-6015
charles.chen@sybase.com

For Press Inquiries:
Sybase Public Relations
Lorna Fernandes
(925) 236-4107
lorna.fernandes@sybase.com

SYBASE REPORTS STRONG 2006 THIRD QUARTER OPERATING RESULTS
Mobile and Wireless Business Increases 19% Year over Year
Pro Forma EPS of $0.40 Exceeds First Call Consensus Estimates

DUBLIN, Calif. — October 19, 2006— Sybase, Inc. (NYSE: SY), a leading provider of enterprise infrastructure and mobile software, today reported financial results for the third quarter ended September 30, 2006.

For the 2006 third quarter, total license revenue increased 9% to $76.3 million from $69.7 million in the third quarter of 2005. Total revenue for the 2006 third quarter increased 5% to $209.1 million from $199.3 million in the third quarter of 2005.

Pro forma operating income for the 2006 third quarter increased 13% to $40.9 million, compared with pro forma operating income of $36.2 million in the 2005 third quarter. Pro forma net income for the 2006 third quarter increased 20% to $36.3 million, or earnings per diluted share of $0.40. Included in the third quarter pro forma EPS is a tax benefit of approximately $0.04. This compares with pro forma net income of $30.1 million, or earnings per diluted share (EPS) of $0.33 for the third quarter of 2005.

Operating income calculated in accordance with generally accepted accounting principles (GAAP) for the third quarter of 2006 increased 7% to $32.2 million, compared with GAAP operating income of $30.2 million for the year-ago quarter. The GAAP results for the 2006 third quarter include the impact of $3.1 million associated with implementation of FAS 123R.

The company reported GAAP net income of $25.1 million, or GAAP EPS of $0.27, for the 2006 third quarter. This compares with GAAP net income of $28.0 million, or GAAP EPS of $0.30, for the 2005 third quarter. Included in third quarter 2006 GAAP EPS is an increase in the company’s tax provision of $9.0 million compared with the third quarter of 2005 and the previously stated impact associated with the implementation of FAS 123R.

Pro forma amounts exclude the amortization of certain purchased intangibles, stock-based compensation, and restructuring costs. Accompanying this release is a reconciliation of pro forma and GAAP amounts for the 2006 third quarter.

“We’re pleased with our operating results this quarter,” said John Chen, chairman, CEO, and president of Sybase. “We generated strong cash flow from operations, exceeded EPS consensus estimates, and delivered our ninth consecutive quarter of revenue growth.

“Our strongest vertical segments in the quarter were financial services, technology and computer services,” added Mr. Chen. “We experienced steady demand for our core database platforms, combined with robust growth from our mobile device management solutions and IQ analytics server.

“During the quarter, we entered into a definitive agreement to acquire Mobile 365, the largest provider of mobile messaging and content delivery services. With this acquisition, which is expected to close in the fourth quarter, we will extend our reach to approximately 700 mobile operators, plus global brands and mobile content developers throughout the world. This strategic acquisition will position Sybase as the world’s largest mobile enterprise software and services provider,” concluded Mr. Chen.

Balance Sheet and Other Data

At September 30, 2006, Sybase reported $979.5 million in cash and cash investments, including restricted cash of $5.6 million. The company generated $38.9 million in cash flow from operations in the third quarter.

Days sales outstanding for the 2006 third quarter was 57.

Forward Guidance

For the fourth quarter ending December 31, 2006, management anticipates revenues in the range of $245 million to $250 million, assuming the acquisition of Mobile 365 closes in mid-November and contributes $10 million to $12 million in revenue in the fourth quarter. Pro forma fully diluted EPS for the fourth quarter is expected to be

approximately $0.46. The impact of the acquisition is expected to be immaterial to pro forma EPS in the fourth quarter. GAAP EPS for the fourth quarter is estimated to be approximately $0.34, which includes the impact of expensing options under FAS 123R and a preliminary estimate of $4.0 million for amortization of intangibles related to the acquisition of Mobile 365.

Management is raising its most recent full-year 2006 estimate for fully diluted pro forma EPS to approximately $1.46 from $1.38. Management is also revising full-year 2006 GAAP EPS guidance to approximately $1.09 from $1.12, which includes the impact of expensing options under FAS 123R and a preliminary estimate of $4.0 million for amortization of intangibles related to the acquisition of Mobile 365.

Management is raising its full-year 2006 cash flow target from $170 million to a range of $185 million to $190 million. The impact of the Mobile 365 acquisition is expected to be immaterial to full-year 2006 pro forma EPS and cash flow.

Accompanying this release is a reconciliation of projected pro forma and GAAP amounts for the 2006 fourth quarter and full year.

2006 Third Quarter Company Highlights

w		Launched Sybase® Data Integration Suite, a flexible and scalable solution that combines key data integration techniques including replication, data federation, ETL (extract, transform, and load), real-time events, and data search with integrated development and administration.

w		Delivered Sybase® Unwired Accelerator 8.0, an innovative mobile solution that enables users to access their enterprise applications, data, and business processes from mobile devices.

w		Delivered the next generation of the AvantGo® mobile Internet service, featuring a fully enhanced wireless experience that enables users to have always-available access to Web content, automatically synchronized to their mobile device for Research in Motion (RIM) BlackBerry™ handsets.

w		Delivered Sybase IQ® version 12.7, a highly optimized analytics server that adds enhanced query performance, improved data privacy, and features that support compliance with regulations such as Sarbanes-Oxley.

w		Delivered SQL Anywhere® 10, a market-leading database and data exchange solution for frontline environments.

w		For the fifth consecutive year, Sybase iAnywhere was recognized by IDC as the leader in the mobile device management enterprise software market in its annual Worldwide Mobile Device Management Enterprise 2006-2010 Forecast and 2005 Vendor Shares report.

Announced Gartner Inc. positioned Sybase® IQ as a challenger in its 2006 Data Warehouse DBMS Magic Quadrant report.

Conference Call and Webcast Information

The Sybase 2006 third quarter conference call and simultaneous Webcast is scheduled to begin at 7:30 a.m., Pacific Time/10:30 a.m. Eastern Time on Thursday, October 19, 2006. To access the live Webcast, please visit www.fulldisclosure.com or Sybase’s Website at www.sybase.com at least 20 minutes prior to the call to download any necessary audio or plug-in software. A telephone replay will be available approximately two hours after the conference call ends and will be available until 10:00 p.m. Pacific Time on October 26, 2006. To access the replay, please dial (888) 203-1112 for domestic access and (719) 457-0820 for international callers; the access code for the telephone replay is #3437992. Additionally, the archived Webcast will be available through October 26, 2006 at http://www.sybase.com/about_sybase/investorrelations.

About Sybase, Inc.

Sybase is the largest global enterprise software company exclusively focused on managing and mobilizing information from the data center to the point of action. Sybase provides open, cross-platform solutions that securely deliver information anytime, anywhere, enabling customers to create an information edge. The world’s most critical data in commerce, finance, government, healthcare, and defense runs on Sybase. For more information, visit the Sybase Website at http://www.sybase.com.

Forward-Looking Statements

Certain statements in this release concerning Sybase, Inc. and its prospects and future growth are forward-looking and involve a number of uncertainties and risks. Factors that could cause actual events or results to differ materially from those suggested by these forward-looking statements include, but are not limited to, the performance of the global economy and growth in software industry sales; market acceptance of the company’s products and services; customer and industry analyst perception of the company and its technology vision and future prospects; the success of certain business combinations engaged in by the company or by competitors; political unrest or acts of war; possible disruptive effects of organizational or personnel changes; and other factors described in Sybase, Inc.’s reports filed with the U.S. Securities and Exchange Commission, including its annual report on Form 10-K for the year ended December 31, 2005 and Form 10-Q for the quarters ended March 31, 2006 and June 30, 2006.

Sybase, Adaptive Server Enterprise (ASE), Information Anywhere Suite, Sybase IQ, Sybase Data Integration Suite, Sybase Unwired Accelerator, AvantGo, and SQL Anywhere are trademarks of Sybase, Inc. or its subsidiaries. All other names may be trademarks of the companies with which they are associated.

SYBASE, INC.
RECONCILIATION TO PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (1)
(UNAUDITED)


	Three Months Ended September 30, 2006							Three Months Ended September 30, 2005
			Pro forma							Pro forma
(In thousands, except per share data)	GAAP		Adjustments (2)			Pro forma		GAAP		Adjustments (2)			Pro forma

Revenues:
License fees	$	76,338		—		$	76,338	$	69,739		—		$	69,739
Services		132,794		—			132,794		129,588		—			129,588

Total revenues		209,132		—			209,132		199,327		—			199,327

Costs and expenses:
Cost of license fees		12,160		(2,395	) a		9,765		10,993		(2,046	) a		8,947
Cost of services		37,681		141	b		37,822		37,980		(126	) b		37,854
Sales and marketing		62,019		(1,111	) b		60,908		59,655		17	b		59,672
Product development and engineering		37,327		(693	) b		36,634		34,932		(10	) b		34,922
General and administrative		26,103		(3,031	) b		23,072		23,873		(2,152	) b		21,721
Amortization of other purchased intangibles		1,573		(1,573	) a		—		1,677		(1,677	)a		—
Cost of restructure		39		(39	) c		—		21		(21	) c		—


Total costs and expenses		176,902		(8,701	)		168,201		169,131		(6,015	)		163,116


Operating income		32,230		8,701			40,931		30,196		6,015			36,211

Interest income and expense and other, net		7,936		—			7,936		3,881		—			3,881


Income before income taxes		40,166		8,701			48,867		34,077		6,015			40,092

Provision for income taxes		15,081		(2,534	) d		12,547		6,090		3,856	d		9,946


Net income	$	25,085	$	11,235		$	36,320	$	27,987	$	2,159		$	30,146


Basic net income per share	$	0.28	$	0.13		$	0.41	$	0.31	$	0.03		$	0.34


Shares used in computing basic net income per share		89,056		89,056			89,056		89,634		89,634			89,634


Diluted net income per share	$	0.27	$	0.13		$	0.40	$	0.30	$	0.03		$	0.33


Shares used in computing diluted net income per share		91,498		91,498			91,498		92,431		92,431			92,431


(1)		Use of Pro Forma Financial Information

		To supplement our consolidated financial statements presented in accordance with generally accepted accounting principles (GAAP), Sybase uses pro forma measures of operating results, net income and earnings per share, which are adjusted from GAAP-based results to exclude certain costs and expenses. These pro forma adjustments are provided to enhance an overall understanding of our current financial performance and our prospects for the future, and are one of the primary indicators management uses for planning and forecasting future periods. We have excluded such items, including purchase accounting adjustments in connection with acquisitions, and the cost of restructuring because we do not believe they are indicative of our core business. Even though such items have recurred in the past and may recur in future periods, they are driven by events (such as acquisitions and restructurings) that occur sporadically and are not directly related to our ongoing core business operations. Pro forma financial information is never intended to be considered in isolation from, or as a substitute for, financial results prepared in accordance with GAAP.

(2)		Proforma adjustments

		Proforma adjustments include the following: (a) amortization of purchased intangibles; (b) stock-based compensation expense; (c) cost of restructuring charges; (d) income tax effect of proforma adjustments.

SYBASE, INC.
RECONCILIATION TO PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (1)
(UNAUDITED)


	Nine Months Ended September 30, 2006							Nine Months Ended September 30, 2005
			Pro forma							Pro forma
(In thousands, except per share data)	GAAP		Adjustments (2)			Pro forma		GAAP		Adjustments (2)			Pro forma

Revenues:
License fees	$	226,367		—		$	226,367	$	200,362		—		$	200,362
Services		393,332		—			393,332		395,284		—			395,284

Total revenues		619,699		—			619,699		595,646		—			595,646

Costs and expenses:
Cost of license fees		36,882		(7,145	) a		29,737		36,973		(9,097	) a		27,876
Cost of services		114,371		(1,220	) b		113,151		118,248		(292	) b		117,956
Sales and marketing		191,207		(3,158	) b		188,049		184,593		(207	) b		184,386
Product development and engineering		111,867		(1,965	) b		109,902		102,764		(26	) b		102,738
General and administrative		77,037		(9,338	) b		67,699		69,183		(5,143	) b		64,040
Amortization of other purchased intangibles		4,671		(4,671	) a		—		5,031		(5,031	) a		—
Cost of restructure		139		(139	) c		—		302		(302	) c		—


Total costs and expenses		536,174		(27,636	)		508,538		517,094		(20,098	)		496,996


Operating income		83,525		27,636			111,161		78,552		20,098			98,650

Interest income and expense and other, net		21,211		—			21,211		10,620		—			10,620


Income before income taxes		104,736		27,636			132,372		89,172		20,098			109,270

Provision for income taxes		36,066		4,455	d		40,521		31,984		1,483	d		33,467


Net income	$	68,670	$	23,181		$	91,851	$	57,188	$	18,615		$	75,803


Basic net income per share	$	0.77	$	0.26		$	1.03	$	0.63	$	0.21		$	0.84


Shares used in computing basic net income per share		89,269		89,269			89,269		90,403		90,403			90,403


Diluted net income per share	$	0.75	$	0.25		$	1.00	$	0.62	$	0.20		$	0.82


Shares used in computing diluted net income per share		91,636		91,636			91,636		92,961		92,961			92,961


(1)		Use of Pro Forma Financial Information

		To supplement our consolidated financial statements presented in accordance with generally accepted accounting principles (GAAP), Sybase uses pro forma measures of operating results, net income and earnings per share, which are adjusted from GAAP-based results to exclude certain costs and expenses. These pro forma adjustments are provided to enhance an overall understanding of our current financial performance and our prospects for the future, and are one of the primary indicators management uses for planning and forecasting future periods. We have excluded such items, including purchase accounting adjustments in connection with acquisitions, and the cost of restructuring because we do not believe they are indicative of our core business. Even though such items have recurred in the past and may recur in future periods, they are driven by events (such as acquisitions and restructurings) that occur sporadically and are not directly related to our ongoing core business operations. Pro forma financial information is never intended to be considered in isolation from, or as a substitute for, financial results prepared in accordance with GAAP.

(2)		Proforma adjustments

		Proforma adjustments include the following: (a) amortization of purchased intangibles; (b) stock-based compensation expense; (c) cost of restructuring charges; (d) income tax effect of proforma adjustments.

SYBASE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS


	September 30,			December 31,
	2006			2005
(In thousands, except share and per share data)	(Unaudited)
Current assets:
Cash and cash equivalents	$	590,617		$	398,741
Short-term investments		343,338			342,247

Total cash, cash equivalents and short-term cash investments		933,955			740,988

Restricted cash		5,566			2,773
Accounts receivable, net		131,833			167,790
Deferred income taxes		4,668			5,523
Other current assets		18,936			16,876


Total current assets		1,094,958			933,950

Long-term cash investments		40,011			118,948
Restricted long-term cash investments		—			2,600
Property, equipment and improvements, net		55,050			59,178
Deferred income taxes		36,103			24,879
Capitalized software, net		70,867			65,911
Goodwill, net		242,318			238,864
Other purchased intangibles, net		78,580			87,562
Other assets		39,776			38,722


Total assets	$	1,657,663		$	1,570,614


Current liabilities:
Accounts payable	$	14,164		$	10,353
Accrued compensation and related expenses		50,793			51,983
Accrued income taxes		51,584			31,398
Other accrued liabilities		58,079			78,040
Deferred revenue		186,848			188,929


Total current liabilities		361,468			360,703

Other liabilities		43,233			40,339
Long-term deferred revenue		4,662			5,663
Minority interest		5,079			5,079
Convertible subordinated notes		460,000			460,000

Stockholders’ equity:
Preferred stock, $0.001 par value, 8,000,000 shares authorized; none issued or outstanding		—			—
Common stock, $0.001 par value, 200,000,000 shares authorized; 105,337,362 shares issued (2005 - 105,337,362)		105			105
Additional paid-in capital		956,491			953,771
Accumulated earnings		68,075			16,195
Other comprehensive income		31,874			19,231
Less: Cost of treasury stock (14,602,317 shares and 2005 - 14,806,217)		(273,324	)		(277,510	)
Unearned compensation		—			(12,962	)


Total stockholders’ equity		783,221			698,830


Total liabilities and stockholders’ equity	$	1,657,663		$	1,570,614

SYBASE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
PROFORMA WITHOUT PURCHASE ACCOUNTING, COST OF RESTRUCTURE, AND STOCK COMPENSATION EXPENSE
(UNAUDITED)


	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands, except per share data)	2006		2005		2006		2005
Revenues:
License fees	$	76,338	$	69,739	$	226,367	$	200,362
Services		132,794		129,588		393,332		395,284


Total revenues		209,132		199,327		619,699		595,646

Costs and expenses:
Cost of license fees		9,765		8,947		29,737		27,876
Cost of services		37,822		37,854		113,151		117,956
Sales and marketing		60,908		59,672		188,049		184,386
Product development and engineering		36,634		34,922		109,902		102,738
General and administrative		23,072		21,721		67,699		64,040


Total costs and expenses		168,201		163,116		508,538		496,996


Operating income		40,931		36,211		111,161		98,650

Interest income and expense and other, net		7,936		3,881		21,211		10,620


Income before income taxes		48,867		40,092		132,372		109,270

Provision for income taxes		12,547		9,946		40,521		33,467


Net income	$	36,320	$	30,146	$	91,851	$	75,803


Basic net income per share	$	0.41	$	0.34	$	1.03	$	0.84


Shares used in computing basic net income per share		89,056		89,634		89,269		90,403


Diluted net income per share	$	0.40	$	0.33	$	1.00	$	0.82


Shares used in computing diluted net income per share		91,498		92,431		91,636		92,961

Note: The pro forma statement of operations is intended to present the Company’s operating results excluding purchase accounting adjustments associated with the acquisitions of Home Financial Network, Inc., New Era of Networks, Inc., AvantGo Inc., Dejima, Inc., XcelleNet, Inc., Avaki, Inc., ISDD Ltd., Extended Systems, Inc., and Solonde Solutions AG and other purchased intangibles. Such purchase accounting adjustments would include amortization of developed technology, amortization of intangibles, goodwill impairment loss, in-process research and development costs, and related adjustments for income tax provision. The pro forma statement of operations also excludes stock compensation expense, restructuring costs, and cumulative effect of an accounting change which we do not believe are indicative of our core business. Even though such items have recurred in the past and may recur in future periods, they are driven by events (such as acquisitions and restructurings) that occur sporadically and are not directly related to our ongoing core business operations. Pro forma financial information is never intended to be considered in isolation from, or as a substitute for, financial results prepared in accordance with GAAP.

SYBASE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)


	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands, except per share data)	2006		2005		2006		2005
Revenues:
License fees	$	76,338	$	69,739	$	226,367	$	200,362
Services		132,794		129,588		393,332		395,284


Total revenues		209,132		199,327		619,699		595,646

Costs and expenses:
Cost of license fees		12,160		10,993		36,882		36,973
Cost of services		37,681		37,980		114,371		118,248
Sales and marketing		62,019		59,655		191,207		184,593
Product development and engineering		37,327		34,932		111,867		102,764
General and administrative		26,103		23,873		77,037		69,183
Amortization of other purchased intangibles		1,573		1,677		4,671		5,031
Cost of restructure		39		21		139		302


Total costs and expenses		176,902		169,131		536,174		517,094


Operating income		32,230		30,196		83,525		78,552

Interest income and expense and other, net		7,936		3,881		21,211		10,620


Income before income taxes		40,166		34,077		104,736		89,172

Provision for income taxes		15,081		6,090		36,066		31,984


Net income	$	25,085	$	27,987	$	68,670	$	57,188


Basic net income per share	$	0.28	$	0.31	$	0.77	$	0.63


Shares used in computing basic net income per share		89,056		89,634		89,269		90,403


Diluted net income per share	$	0.27	$	0.30	$	0.75	$	0.62


Shares used in computing diluted net income per share		91,498		92,431		91,636		92,961

SYBASE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS


		Nine Months Ended
		September 30,
(Dollars in thousands)		2006			2005
Cash and cash equivalents, beginning of year		$	398,741		$	321,417
Cash flows from operating activities:
Net income			68,670			57,188
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization			52,258			54,847
Loss on disposal of assets			829			703
Deferred income taxes			(11,377	)		(4,603	)
Stock-based compensation – restricted stock			5,833			5,667
Stock-based compensation – all other			9,849			—
Amortization of note issuance costs			1,477			1,180
Changes in assets and liabilities:
Accounts receivable			38,481			39,628
Other current assets			(2,055	)		(3,968	)
Other assets – operating			(2,600	)		2,050
Accounts payable			3,806			(2,215	)
Accrued compensation and related expenses			(1,203	)		253
Accrued income taxes			20,219			24,636
Other accrued liabilities			(19,043	)		(12,635	)
Deferred revenues			(3,125	)		(32,917	)
Other liabilities			1,863			1,664

Net cash provided by operating activities			163,882			131,478
Cash flows from investing activities:
(Increase) Decrease in restricted cash			(193	)		284
Purchases of available-for-sale cash investments			(364,397	)		(704,001	)
Maturities of available-for-sale cash investments			205,807			307,524
Sales of available-for-sale cash investments			237,255			81,381
Business combinations, net of cash acquired	��		(4,334	)		(6,928	)
Purchases of property, equipment and improvements			(13,162	)		(12,007	)
Proceeds from sale of property, equipment and improvements			4			25
Capitalized software development costs			(29,171	)		(26,336	)
Increase in other assets – investing			(7	)		(5	)

Net cash provided by (used for) investing activities			31,802			(360,063	)
Cash flows from financing activities:
Proceeds from the issuance of convertible subordinated notes, net of issuance costs			—			450,238
Repayments of long-term obligations			(45	)		(997	)
Payments on capital leases			(243	)		(201	)
Net proceeds from the issuance of common stock and reissuance of treasury stock			32,675			40,326
Purchases of treasury stock			(45,280	)		(144,529	)

Net cash provided by (used for) financing activities			(12,893	)		344,837
Effect of exchange rate changes on cash			9,085			(25,206	)

Net increase in cash and cash equivalents			191,876			91,046

Cash and cash equivalents, end of period			590,617			412,463
Cash investments, end of period			383,349			506,386

Total cash, cash equivalents and cash investments, end of period		$	973,966		$	918,849

SYBASE, INC.
CONSOLIDATED STATEMENT OF OPERATIONS BY SEGMENT
PROFORMA WITHOUT PURCHASE ACCOUNTING, COST OF RESTRUCTURE, AND STOCK COMPENSATION EXPENSE
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2006
(UNAUDITED)


	Infrastructure		iAnywhere					Consolidated
(In thousands, except per share data)	Platform Group		Solutions		Eliminations			Total
Revenues:
License fees
Infrastructure	$	53,205	$	86	$	—		$	53,291
Mobile and Embedded		8,256		14,791		—			23,047

Subtotal license fees		61,461		14,877		—			76,338
Intersegment license revenues		22		6,880		(6,902	)		—

Total license fees		61,483		21,757		(6,902	)		76,338

Services
Direct service revenue		120,808		11,986		—			132,794
Intersegment service revenues		109		6,690		(6,799	)		—

Total services		120,917		18,676		(6,799	)		132,794


Total revenues		182,400		40,433		(13,701	)		209,132

Total allocated costs and expenses		148,209		32,934		(13,701	)		167,442


Operating income before unallocated costs	$	34,191	$	7,499	$	—		$	41,690

Other unallocated costs									759


Operating income after unallocated expenses									40,931

Interest income and expense and other, net									7,936


Income before income taxes									48,867

Provision for income taxes									12,547


Net income								$	36,320


Basic net income per share								$	0.41


Shares used in computing basic net income per share									89,056


Diluted net income per share								$	0.40


Shares used in computing diluted net income per share									91,498

SYBASE, INC.
CONSOLIDATED STATEMENT OF OPERATIONS BY SEGMENT
PROFORMA WITHOUT PURCHASE ACCOUNTING, COST OF RESTRUCTURE, AND STOCK COMPENSATION EXPENSE
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2006
(UNAUDITED)


	Infrastructure		iAnywhere					Consolidated
(In thousands, except per share data)	Platform Group		Solutions		Eliminations			Total
Revenues:
License fees
Infrastructure	$	156,486	$	151	$	—		$	156,637
Mobile and Embedded		21,115		48,615		—			69,730

Subtotal license fees		177,601		48,766		—			226,367
Intersegment license revenues		64		17,567		(17,631	)		—

Total license fees		177,665		66,333		(17,631	)		226,367

Services
Direct service revenue		358,827		34,505		—			393,332
Intersegment service revenues		211		18,882		(19,093	)		—

Total services		359,038		53,387		(19,093	)		393,332


Total revenues		536,703		119,720		(36,724	)		619,699

Total allocated costs and expenses		443,169		101,514		(36,724	)		507,959


Operating income before unallocated costs	$	93,534	$	18,206	$	—		$	111,740

Other unallocated costs									579


Operating income after unallocated expenses									111,161

Interest income and expense and other, net									21,211


Income before income taxes									132,372

Provision for income taxes									40,521


Net income								$	91,851


Basic net income per share								$	1.03


Shares used in computing basic net income per share									89,269


Diluted net income per share								$	1.00


Shares used in computing diluted net income per share									91,636

SYBASE, INC.
CONSOLIDATED STATEMENT OF OPERATIONS BY SEGMENT
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2006
(UNAUDITED)


	Infrastructure		iAnywhere					Consolidated
(In thousands, except per share data)	Platform Group		Solutions		Eliminations			Total
Revenues:
License fees
Infrastructure	$	53,205	$	86	$	—		$	53,291
Mobile and Embedded		8,256		14,791		—			23,047

Subtotal license fees		61,461		14,877		—			76,338
Intersegment license revenues		22		6,880		(6,902	)		—

Total license fees		61,483		21,757		(6,902	)		76,338

Services
Direct service revenue		120,808		11,986		—			132,794
Intersegment service revenues		109		6,690		(6,799	)		—

Total services		120,917		18,676		(6,799	)		132,794


Total revenues		182,400		40,433		(13,701	)		209,132

Total allocated costs and expenses before cost of restructure and amortization of customer lists, covenant not to compete and purchased technology		148,209		32,934		(13,701	)		167,442


Operating income before cost of restructure and amortization of customer lists, covenant not to compete, and purchased technology		34,191		7,499		—			41,690

Cost of restructure - 2006 Activity		45		—		—			45
Amortization of customer lists		500		1,046		—			1,546
Amortization of covenant not to compete		27		—		—			27
Amortization of purchased technology		430		1,965		—			2,395


Operating income before unallocated costs	$	33,189	$	4,488	$	—		$	37,677

Other unallocated costs									5,447

Operating income after unallocated expenses									32,230

Interest income and expense and other, net									7,936


Income before income taxes									40,166

Provision for income taxes									15,081


Net income								$	25,085


Basic net income per share								$	0.28


Shares used in computing basic net income per share									89,056


Diluted net income per share								$	0.27


Shares used in computing diluted net income per share									91,498

SYBASE, INC.
CONSOLIDATED STATEMENT OF OPERATIONS BY SEGMENT
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2006
(UNAUDITED)


	Infrastructure		iAnywhere					Consolidated
(In thousands, except per share data)	Platform Group		Solutions		Eliminations			Total
Revenues:
License fees
Infrastructure	$	156,486	$	151	$	—		$	156,637
Mobile and Embedded		21,115		48,615		—			69,730

Subtotal license fees		177,601		48,766		—			226,367
Intersegment license revenues		64		17,567		(17,631	)		—

Total license fees		177,665		66,333		(17,631	)		226,367

Services
Direct service revenue		358,827		34,505		—			393,332
Intersegment service revenues		211		18,882		(19,093	)		—

Total services		359,038		53,387		(19,093	)		393,332


Total revenues		536,703		119,720		(36,724	)		619,699

Total allocated costs and expenses before cost of restructure and amortization of customer lists, covenant not to compete and purchased technology		443,169		101,514		(36,724	)		507,959


Operating income before cost of restructure and amortization of customer lists, covenant not to compete, and purchased technology		93,534		18,206		—			111,740

Cost of restructure - 2006 Activity		145		—		—			145
Amortization of customer lists		1,500		3,138		—			4,638
Amortization of covenant not to compete		33		—		—			33
Amortization of purchased technology		1,252		5,893		—			7,145


Operating income before unallocated costs	$	90,604	$	9,175	$	—		$	99,779

Other unallocated costs									16,254

Operating income after unallocated expenses									83,525

Interest income and expense and other, net									21,211


Income before income taxes									104,736

Provision for income taxes									36,066


Net income								$	68,670


Basic net income per share								$	0.77


Shares used in computing basic net income per share									89,269


Diluted net income per share								$	0.75


Shares used in computing diluted net income per share									91,636

SYBASE, INC.
Reconciliation of GAAP-based EPS to pro forma EPS
for the three months ended December 31, 2006
(unaudited)


Pro forma EPS	$	0.46

Amortization of purchased intangibles		(0.08	)
Amortization of stock compensation expense		(0.06	)
Income tax effect of above adjustments		0.05
Income tax effect primarily from utilization of tax credits		(0.03	)


GAAP — based EPS	$	0.34

Use of Pro Forma Financial Information

To supplement our consolidated financial statements presented in accordance with generally accepted accounting principles (GAAP), Sybase uses pro forma measures of operating results, net income and earnings per share, which are adjusted from GAAP-based results to exclude certain costs and expenses. These pro forma adjustments are provided to enhance an overall understanding of our current financial performance and our prospects for the future, and are one of the primary indicators management uses for planning and forecasting future periods. We have excluded such items, including purchase accounting adjustments in connection with acquisitions because we do not believe they are indicative of our core business. Even though such items have recurred in the past and may recur in future periods, they are driven by events (such as acquisitions) that occur sporadically and are not directly related to our ongoing core business operations. Pro forma financial information is never intended to be considered in isolation from, or as a substitute for, financial results prepared in accordance with GAAP.

SYBASE, INC.
Reconciliation of GAAP-based EPS to pro forma EPS
for the twelve months ended December 31, 2006
(unaudited)


Pro forma EPS	$	1.46

Amortization of purchased intangibles		(0.21	)
Amortization of stock compensation expense		(0.23	)
Income tax effect of above adjustments		0.15
Income tax effect primarily from utilization of tax credits		(0.08	)


GAAP — based EPS	$	1.09

Use of Pro Forma Financial Information

Sybase Inactive 8-KResults of Operations and Financial Condition