Sybase 8K Reports Record Operating Profit In 2006 Fourth Quarter | SEC 29 Jan 07

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 RECORD OPERATING PROFIT IN 2006 FOURTH QUARTER

DUBLIN, Calif. — January 25, 2007— Sybase, Inc. (NYSE: SY), a leading provider of enterprise infrastructure and mobile software, today reported financial results for the fourth quarter and year ended December 31, 2006.

Financial Highlights:


¨		Q406 total revenue increases 15%; license revenue rises 10%

¨		Q406 operating margins reach record highs of 20% (GAAP) and 25% (pro forma)

¨		2006 full-year GAAP EPS increases 12%; pro forma EPS increases 21%

¨		Annual cash flow from operations increases 26% to record high of $214.3 million

2006 Fourth Quarter Results

Total revenue increased 15% year over year to $256.5 million from $223.0 million in the fourth quarter of 2005. Total license revenue increased 10% to $100.4 million, and services revenue grew 5% to $137.8 million. Messaging revenue related to the acquisition of Mobile 365 was $18.2 million, covering the period from November 8, 2006 through December 31, 2006.

Pro forma operating income for the quarter increased 26% to $63.4 million, representing a 25% operating margin. This compares with pro forma operating income of $50.2 million, or a 23% operating margin, in the 2005 fourth quarter.

Pro forma net income for the quarter increased 15% to $48.4 million, or earnings per diluted share (EPS) of $0.52. This compares with pro forma net income of $42.0 million, or EPS of $0.45 for the fourth quarter of 2005.

Operating income calculated in accordance with generally accepted accounting principles (GAAP) for the quarter increased 16% to $50.2 million, representing a 20% operating margin.

GAAP net income was $26.4 million, or GAAP EPS of $0.28, for the quarter. This compares with GAAP net income of $28.4 million, or GAAP EPS of $0.31, for the 2005 fourth quarter. Included in the 2006 fourth quarter GAAP-based results is an increase in the company’s effective tax rate to 53%, up from 40% in the fourth quarter of 2005. The increase in the effective tax rate is associated with acquisition-related, one-time effects from the liquidation of foreign entities and the effect of stock compensation deductions. In addition, 2006 fourth quarter GAAP-based results include the impact of $3.7 million associated with implementation of FAS 123R and $1.6 million for amortization of purchased intangibles related to the acquisition of Mobile 365.

Full-year 2006 Results

Total revenues increased 7% to $876.2 million, and license revenues rose 12% to $326.8 million. Pro forma operating income increased 17% to $174.6 million, representing a 20% operating margin. Pro forma net income increased 19% to $140.3 million, or EPS of $1.52. This compares with pro forma net income of $117.8 million, or EPS of $1.26, for 2005.

GAAP operating income for the year increased 10% to $133.8 million, representing a 15% operating margin.

GAAP net income increased 11% to $95.1 million, or GAAP EPS of $1.03, compared with GAAP net income of $85.6 million, or GAAP EPS of $0.92, for 2005. Included in the 2006 GAAP-based results is an increase in the company’s effective tax rate to 41%, up from 37% in 2005. In addition, 2006 GAAP-based results include the impact of $13.6 million associated with implementation of FAS 123R and $1.6 million for amortization of purchased intangibles related to the acquisition of Mobile 365.

Pro forma amounts exclude the amortization of certain purchased intangibles, stock-based compensation, and restructuring costs, and the tax effect of these and related items. Accompanying this release is a reconciliation of pro forma and GAAP amounts for the 2006 fourth quarter and 12-month period ended December 31, 2006.

“We are pleased to complete our strongest year since I have been at Sybase,” stated John Chen, chairman, CEO, and president of Sybase. “We exceeded our targets for revenue and EPS, reached our highest-ever full-year net income, and achieved record annual cash flow from operations.

“Growth was driven largely by robust demand for our flagship ASE database and IQ analytics server, which grew 30% and 22%, respectively, over the same quarter a year ago.”

Added Mr. Chen, “We released Information Anywhere Suite in December, and early market feedback is extremely positive. This Suite integrates Afaria with OneBridge to deliver the most complete enterprise mobility platform. We are confident the features and functionality of this Suite will enable our mobile segment to grow faster than the overall mobility market.

“With the addition of our newly acquired mobile messaging business, Sybase 365, we are now the world’s largest mobile enterprise software and services provider. Sybase is strongly positioned to exceed our one-billion-dollar revenue target in 2007,” concluded Mr. Chen.

Balance Sheet and Other Data

At December 31, 2006, Sybase reported $643.7 million in cash and cash investments, including restricted cash of $6.0 million. In the fourth quarter, the company generated $50.4 million in cash flow from operations, an increase of 31% compared to the fourth quarter of 2005. Full-year 2006 cash flow from operations increased 26% to $214.3 million, an historical high, compared with $170.0 million in 2005.

Sybase repurchased $14.5 million worth of its stock during the 2006 fourth quarter. Stock repurchased in 2006 totaled $59.8 million. As of December 31, 2006, $249.8 million remained authorized in the company’s current share repurchase program.

Days sales outstanding (DSO) for the 2006 fourth quarter was 77. Excluding the impact of Sybase 365, DSO for the 2006 fourth quarter was 58.

Forward Guidance

For the first quarter ending March 31, 2007, management anticipates revenues ranging from $230.0 million to $235.0 million. Pro forma fully diluted EPS for the first quarter is expected to range from $0.25 to $0.26. GAAP EPS for the first quarter is estimated to range from $0.16 to $0.17, which includes an estimate of $2.7 million for amortization of intangibles related to the acquisition of Mobile 365 in November 2006.

For full-year 2007, management estimates revenues of approximately $1.025 billion. Fully diluted pro forma EPS is estimated at approximately $1.52. GAAP EPS is estimated at approximately $1.12, which includes an estimate of $10.8 million for amortization of intangibles related to the acquisition of Mobile 365.

Management anticipates full-year 2007 cash flow from operations to range from $190 million to $200 million.

Accompanying this release is a reconciliation of projected pro forma and GAAP amounts for the 2007 first quarter and full year.

2006 Fourth Quarter Company Highlights


¨		Completed acquisition of Mobile 365, creating a new subsidiary Sybase 365, now headed by president Marty Beard.

¨		Delivered two new versions of core components of the newly released Information Anywhere Suite: OneBridge 5.5, which extends enterprise email and applications to mobile workers; and Afaria 5.5, interoperable with the OneBridge release, supporting more than 130 mobile devices, simplifying the evaluation process for businesses and providing administrators and users with enhanced security, management and email capabilities.

¨		Acquired iFoundry Systems to enhance Sybase’s mobile leadership in short-range wireless interconnect protocol stacks and providing professional engineering services to mobile device OEMs, ODMs and chipset manufacturers to enable these technologies on their platforms.

¨		Sybase 365 announced deployment of France’s first and largest Multimedia Messaging Service (MMS) loyalty program for Air France, in partnership with BETC EuroRSCG, France’s premier advertising agency, and French mobile marketing agency, MobileTrend.

¨		Announced the general availability of the Data Integration Suite 1.0, a flexible and scalable solution that combines essential data integration techniques.

¨		Delivered Sybase® Risk Analytics Platform 3.0, an enhanced solution for capital markets with an operations console that manages data workflows, synchronizes data and the presentation of the data to users and improves system management, monitoring and performance.

¨		Released Sybase iAnywhere Advantage Database Server 8.1, further strengthening its database portfolio and providing a high-performance embedded client/server data management system.

Conference Call and Webcast Information

The Sybase 2006 fourth 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, January 25, 2007. 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 February 1, 2007. 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 #3335634. Additionally, the archived Webcast will be available through April 25, 2007 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, June 30, 2006, and September 30, 2006.

Sybase, Adaptive Server Enterprise (ASE), Sybase IQ, [Sybase 365], Afaria, OneBridge, Information Anywhere Suite, Sybase Risk Analytics, iAnywhere Advantage Database, and Financial Fusion 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 December 31, 2006									Three Months Ended December 31, 2005
				Pro forma									Pro forma
(In thousands, except per share data)	GAAP			Adjustments (2)			Pro forma			GAAP			Adjustments (2)			Pro forma

Revenues:
License fees	$	100,383			—		$	100,383		$	91,333			—		$	91,333
Services		137,841			—			137,841			131,715			—			131,715
Messaging		18,240			—			18,240			—			—			—

Total revenues		256,464			—			256,464			223,048			—			223,048

Costs and expenses:
Cost of license fees		13,658			(2,935	) a		10,723			14,583			(2,753	) a		11,830
Cost of services		38,591			(409	) b		38,182			38,077			(88	) b		37,989
Cost of messaging		11,097			(124	) b		10,973			—			—	b		—
Sales and marketing		72,074			(1,274	) b		70,800			65,410			(95	) b		65,315
Product development and engineering		37,643			(714	) b		36,929			36,247			(12	) b		36,235
General and administrative		28,988			(3,523	) b		25,465			22,923			(1,443	) b		21,480
Amortization of other purchased intangibles		2,660			(2,660	) a		—			1,608			(1,608	) a		—
Cost of restructure		1,514			(1,514	) c		—			813			(813	) c		—

Total costs and expenses		206,225			(13,153	)		193,072			179,661			(6,812	)		172,849

Operating income		50,239			13,153			63,392			43,387			6,812			50,199
Interest income and expense and other, net		6,423			—			6,423			4,204			—			4,204
Minority interest		(81	)		—			(81	)		(49	)		—			(49	)

Income before income taxes		56,581			13,153			69,734			47,542			6,812			54,354
Provision for income taxes		30,187			(8,864	) d		21,323			19,147			(6,799	) d		12,348

Net income	$	26,394		$	22,017		$	48,411		$	28,395		$	13,611		$	42,006


Basic net income per share	$	0.29		$	0.25		$	0.54		$	0.32		$	0.15		$	0.47

Shares used in computing basic net income per share		90,421			90,421			90,421			90,020			90,020			90,020

Diluted net income per share	$	0.28		$	0.24		$	0.52		$	0.31		$	0.14		$	0.45

Shares used in computing diluted net income per share		93,344			93,344			93,344			93,021			93,021			93,021


(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, stock-based compensation, the cost of restructuring, and the tax effects of these items 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)


	Twelve Months Ended December 31, 2006									Twelve Months Ended December 31, 2005
				Pro forma									Pro forma
(In thousands, except per share data)	GAAP			Adjustments (2)			Pro forma			GAAP			Adjustments (2)			Pro forma

Revenues:
License fees	$	326,751			—		$	326,751		$	291,695			—		$	291,695
Services		531,172			—			531,172			527,000			—			527,000
Messaging		18,240			—			18,240			—			—			—

Total revenues		876,163			—			876,163			818,695			—			818,695

Costs and expenses:
Cost of license fees		50,540			(10,080	)a		40,460			51,556			(11,850	)a		39,706
Cost of services		152,962			(1,629	)b		151,333			156,325			(380	)b		155,945
Cost of messaging		11,097			(124	)b		10,973			—			—	b		—
Sales and marketing		263,281			(4,432	)b		258,849			250,003			(302	)b		249,701
Product development and engineering		149,510			(2,679	)b		146,831			139,011			(38	)b		138,973
General and administrative		106,025			(12,861	)b		93,164			92,106			(6,586	)b		85,520
Amortization of other purchased intangibles		7,331			(7,331	)a		—			6,639			(6,639	)a		—
Cost of restructure		1,653			(1,653	)c		—			1,115			(1,115	)c		—


Total costs and expenses		742,399			(40,789	)		701,610			696,755			(26,910	)		669,845


Operating income		133,764			40,789			174,553			121,940			26,910			148,850

Interest income and expense and other, net		27,634			—			27,634			14,824			—			14,824
Minority interest		(81	)		—			(81	)		(49	)		—			(49	)


Income before income taxes		161,317			40,789			202,106			136,715			26,910			163,625

Provision for income taxes		66,253			(4,409	)d		61,844			51,132			(5,317	)d		45,815


Net income	$	95,064		$	45,198		$	140,262		$	85,583		$	32,227		$	117,810


Basic net income per share	$	1.06		$	0.51		$	1.57		$	0.95		$	0.35		$	1.30


Shares used in computing basic net income per share		89,557			89,557			89,557			90,307			90,307			90,307


Diluted net income per share	$	1.03		$	0.49		$	1.52		$	0.92		$	0.34		$	1.26


Shares used in computing diluted net income per share		92,251			92,251			92,251			93,257			93,257			93,257


(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, stock-based compensation, the cost of restructuring, and the tax effects of these items 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


	December 31,			December 31,
	2006			2005
(In thousands, except share and per share data)	(Unaudited)
Current assets:
Cash and cash equivalents	$	355,303		$	398,741
Short-term investments		269,612			342,247

Total cash, cash equivalents and short-term cash investments		624,915			740,988

Restricted cash		6,014			2,773
Accounts receivable, net		218,274			167,790
Deferred income taxes		6,224			5,523
Other current assets		16,708			16,876


Total current assets		872,135			933,950

Long-term cash investments		12,781			118,948
Restricted long-term cash investments		—			2,600
Property, equipment and improvements, net		66,458			59,178
Deferred income taxes		21,621			24,879
Capitalized software, net		71,179			65,911
Goodwill, net		538,816			238,864
Other purchased intangibles, net		149,648			87,562
Other assets		39,958			38,722


Total assets	$	1,772,596		$	1,570,614


Current liabilities:
Accounts payable	$	23,439		$	10,353
Accrued compensation and related expenses		59,748			51,983
Accrued income taxes		31,364			31,398
Other accrued liabilities		107,930			78,040
Deferred revenue		193,431			188,929


Total current liabilities		415,912			360,703

Other liabilities		44,428			40,339
Long-term deferred revenue		3,965			5,663
Minority interest		5,160			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		977,672			953,771
Accumulated earnings		92,817			16,195
Other comprehensive income		40,850			19,231
Less: Cost of treasury stock (14,055,557 shares and 2005 - 14,806,217)		(268,313	)		(277,510	)
Unearned compensation		—			(12,962	)


Total stockholders’ equity		843,131			698,830


Total liabilities and stockholders’ equity	$	1,772,596		$	1,570,614


NOTE:		Certain balance sheet items associated with our acquisition of Mobile 365 may change pending the finalization of the Company’s purchase accounting analysis.

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


	Three Months Ended December 31,						Twelve Months Ended December 31,
(In thousands, except per share data)	2006			2005			2006			2005
Revenues:
License fees	$	100,383		$	91,333		$	326,751		$	291,695
Services		137,841			131,715			531,172			527,000
Messaging		18,240			—			18,240			—


Total revenues		256,464			223,048			876,163			818,695

Costs and expenses:
Cost of license fees		10,723			11,830			40,460			39,706
Cost of services		38,182			37,989			151,333			155,945
Cost of messaging		10,973			—			10,973			—
Sales and marketing		70,800			65,315			258,849			249,701
Product development and engineering		36,929			36,235			146,831			138,973
General and administrative		25,465			21,480			93,164			85,520


Total costs and expenses		193,072			172,849			701,610			669,845


Operating income		63,392			50,199			174,553			148,850

Interest income and expense and other, net		6,423			4,204			27,634			14,824
Minority interest		(81	)		(49	)		(81	)		(49	)


Income before income taxes		69,734			54,354			202,106			163,625

Provision for income taxes		21,323			12,348			61,844			45,815


Net income	$	48,411		$	42,006		$	140,262		$	117,810


Basic net income per share	$	0.54		$	0.47		$	1.57		$	1.30


Shares used in computing basic net income per share		90,421			90,020			89,557			90,307


Diluted net income per share	$	0.52		$	0.45		$	1.52		$	1.26


Shares used in computing diluted net income per share		93,344			93,021			92,251			93,257


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., Solonde Solutions AG, and Mobile 365, Inc. 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 December 31,						Twelve Months Ended December 31,
(In thousands, except per share data)	2006			2005			2006			. 2005
Revenues:
License fees	$	100,383		$	91,333		$	326,751		$	291,695
Services		137,841			131,715			531,172			527,000
Messaging		18,240			—			18,240			—


Total revenues		256,464			223,048			876,163			818,695

Costs and expenses:
Cost of license fees		13,658			14,583			50,540			51,556
Cost of services		38,591			38,077			152,962			156,325
Cost of messaging		11,097			—			11,097			—
Sales and marketing		72,074			65,410			263,281			250,003
Product development and engineering		37,643			36,247			149,510			139,011
General and administrative		28,988			22,923			106,025			92,106
Amortization of other purchased intangibles		2,660			1,608			7,331			6,639
Cost of restructure		1,514			813			1,653			1,115


Total costs and expenses		206,225			179,661			742,399			696,755


Operating income		50,239			43,387			133,764			121,940
Interest income and expense and other, net		6,423			4,204			27,634			14,824
Minority interest		(81	)		(49	)		(81	)		(49	)


Income before income taxes		56,581			47,542			161,317			136,715

Provision for income taxes		30,187			19,147			66,253			51,132


Net income	$	26,394		$	28,395		$	95,064		$	85,583


Basic net income per share	$	0.29		$	0.32		$	1.06		$	0.95


Shares used in computing basic net income per share		90,421			90,020			89,557			90,307


Diluted net income per share	$	0.28		$	0.31		$	1.03		$	0.92


Shares used in computing diluted net income per share		93,344			93,021			92,251			93,257

SYBASE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS


	Twelve Months Ended
	December 31,
(Dollars in thousands)	2006			2005
Cash and cash equivalents, beginning of year	$	398,741		$	321,417
Cash flows from operating activities:
Net income		95,064			85,583
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		72,803			73,600
Minority interest in income of subsidiaries		81			49
Loss on disposal of assets		811			528
Deferred income taxes		(1,306	)		8,928
Stock-based compensation – restricted stock		8,141			7,306
Stock-based compensation – all other		13,585			—
Tax benefit from stock-based compensation plans		15,137			—
Excess tax benefit from stock-based compensation plans		(9,569	)		—
Amortization of note issuance costs		1,969			1,671
Changes in assets and liabilities:
Accounts receivable		6,005			(1,914	)
Other current assets		3,236			(1,298	)
Other assets — operating		(2,406	)		651
Accounts payable		(7,838	)		(2,410	)
Accrued compensation and related expenses		2,427			7,072
Accrued income taxes		13,237			24,724
Other accrued liabilities		(828	)		(10,570	)
Deferred revenues		928			(26,436	)
Other liabilities		2,817			2,508

Net cash provided by operating activities		214,294			169,992
Cash flows from investing activities:
(Increase) Decrease in restricted cash		(641	)		2,583
Purchases of available-for-sale cash investments		(468,518	)		(837,237	)
Maturities of available-for-sale cash investments		282,403			439,737
Sales of available-for-sale cash investments		365,962			127,648
Business combinations, net of cash acquired		(399,360	)		(71,890	)
Purchases of property, equipment and improvements		(18,356	)		(16,366	)
Proceeds from sale of property, equipment, and improvements		9			25
Capitalized software development costs		(37,531	)		(33,906	)
Decrease in other assets — investing		13			2

Net cash used for investing activities		(276,019	)		(389,404	)
Cash flows from financing activities:
Proceeds from the issuance of convertible subordinated notes, net of issuance costs		—			450,234
Repayments of long-term obligations		(60	)		(1,012	)
Payments on capital lease		(343	)		(274	)
Net proceeds from the issuance of common stock and reissuance of treasury stock		50,570			48,564
Purchases of treasury stock		(59,815	)		(169,053	)
Excess tax benefit from stock-based compensation plans		9,569			—

Net cash provided by (used for) financing activities		(79	)		328,459
Effect of exchange rate changes on cash		18,366			(31,723	)

Net increase (decrease) in cash and cash equivalents		(43,438	)		77,324

Cash and cash equivalents, end of period		355,303			398,741
Cash investments, end of period		282,393			461,195

Total cash, cash equivalents and cash investments, end of period	$	637,696		$	859,936

SYBASE, INC.
CONSOLIDATED STATEMENT OF OPERATIONS BY SEGMENT
PROFORMA WITHOUT PURCHASE ACCOUNTING, COST OF RESTRUCTURE, AND STOCK COMPENSATION EXPENSE
FOR THE THREE MONTHS ENDED DECEMBER 31, 2006
(UNAUDITED)

(In thousands, except per share data)


	Infrastructure		iAnywhere							Consolidated
	Platform Group		Solutions		Sybase 365		Eliminations			Total
Revenues:
License fees
Infrastructure	$	72,890	$	83	$	—	$	—		$	72,973
Mobile and Embedded		10,507		16,903		—		—			27,410

Subtotal license fees		83,397		16,986		—		—			100,383
Intersegment license revenues		21		8,766		—		(8,787	)		—

Total license fees		83,418		25,752		—		(8,787	)		100,383

Services
Direct service revenue		126,189		11,652		—		—			137,841
Intersegment service revenues		156		7,023		—		(7,179	)		—

Total services		126,345		18,675		—		(7,179	)		137,841

Messaging		—		—		18,240					18,240


Total revenues		209,763		44,427		18,240		(15,966	)		256,464

Total allocated costs and expenses		155,695		34,986		17,596		(15,966	)		192,311


Operating income before unallocated costs	$	54,068	$	9,441	$	644	$	—		$	64,153

Other unallocated costs											761


Operating income after unallocated expenses											63,392

Interest income and expense and other, net											6,423
Minority interest											(81	)


Income before income taxes											69,734

Provision for income taxes											21,323


Net income										$	48,411


Basic net income per share										$	0.54


Shares used in computing basic net income per share											90,421


Diluted net income per share										$	0.52

Shares used in computing diluted net income per share											93,344


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., Solonde Solutions AG, and Mobile 365, Inc. 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.
CONSOLIDATED STATEMENT OF OPERATIONS BY SEGMENT
PROFORMA WITHOUT PURCHASE ACCOUNTING, COST OF RESTRUCTURE, AND STOCK COMPENSATION EXPENSE
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 2006
(UNAUDITED)

(In thousands, except per share data)


	Infrastructure		iAnywhere							Consolidated
	Platform Group		Solutions		Sybase 365		Eliminations			Total
Revenues:
License fees
Infrastructure	$	229,376	$	235	$	—	$	—		$	229,611
Mobile and Embedded		31,621		65,519		—		—			97,140

Subtotal license fees		260,997		65,754		—		—			326,751
Intersegment license revenues		86		26,333		—		(26,419	)		—

Total license fees		261,083		92,087		—		(26,419	)		326,751

Services
Direct service revenue		485,016		46,156		—		—			531,172
Intersegment service revenues		367		25,905		—		(26,272	)		—

Total services		485,383		72,061		—		(26,272	)		531,172

Messaging		—		—		18,240		—			18,240


Total revenues		746,466		164,148		18,240		(52,691	)		876,163

Total allocated costs and expenses		598,864		136,500		17,596		(52,691	)		700,269


Operating income before unallocated costs	$	147,602	$	27,648	$	644	$	—		$	175,894

Other unallocated costs											1,341


Operating income after unallocated expenses											174,553

Interest income and expense and other, net											27,634
Minority interest											(81	)


Income before income taxes											202,106

Provision for income taxes											61,844


Net income										$	140,262


Basic net income per share										$	1.57


Shares used in computing basic net income per share											89,557


Diluted net income per share										$	1.52


Shares used in computing diluted net income per share											92,251


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., Solonde Solutions AG, and Mobile 365, Inc. 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.
CONSOLIDATED STATEMENT OF OPERATIONS BY SEGMENT
FOR THE THREE MONTHS ENDED DECEMBER 31, 2006
(UNAUDITED)

(In thousands, except per share data)


	Infrastructure		iAnywhere								Consolidated
	Platform Group		Solutions		Sybase 365			Eliminations			Total
Revenues:
License fees
Infrastructure	$	72,890	$	83	$	—		$	—		$	72,973
Mobile and Embedded		10,507		16,903		—			—			27,410

Subtotal license fees		83,397		16,986		—			—			100,383
Intersegment license revenues		21		8,766		—			(8,787	)		—

Total license fees		83,418		25,752		—			(8,787	)		100,383

Services
Direct service revenue		126,189		11,652		—			—			137,841
Intersegment service revenues		156		7,023		—			(7,179	)		—

Total services		126,345		18,675		—			(7,179	)		137,841

Messaging		—		—		18,240			—			18,240


Total revenues		209,763		44,427		18,240			(15,966	)		256,464

Total allocated costs and expenses before cost of restructure and amortization of customer lists, covenant not to compete and purchased technology		155,695		34,986		17,596			(15,966	)		192,311


Operating income before cost of restructure and amortization of customer lists, covenant not to compete, and purchased technology		54,068		9,441		644			—			64,153

Cost of restructure - 2006 Activity		816		—		—			—			816
Amortization of customer lists		500		1,046		1,087			—			2,633
Amortization of covenant not to compete		27		—		—			—			27
Amortization of purchased technology		402		1,990		543			—			2,935


Operating income (loss) before unallocated costs	$	52,323	$	6,405	$	(986	)	$	—		$	57,742

Other unallocated costs												7,503

Operating income after unallocated expenses												50,239

Interest income and expense and other, net												6,423
Minority interest												(81	)


Income before income taxes												56,581

Provision for income taxes												30,187


Net income											$	26,394


Basic net income per share											$	0.29


Shares used in computing basic net income per share												90,421


Diluted net income per share											$	0.28


Shares used in computing diluted net income per share												93,344

SYBASE, INC.
CONSOLIDATED STATEMENT OF OPERATIONS BY SEGMENT
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 2006
(UNAUDITED)

(In thousands, except per share data)


	Infrastructure		iAnywhere								Consolidated
	Platform Group		Solutions		Sybase 365			Eliminations			Total
Revenues:
License fees
Infrastructure	$	229,376	$	235	$	—		$	—		$	229,611
Mobile and Embedded		31,621		65,519		—			—			97,140

Subtotal license fees		260,997		65,754		—			—			326,751
Intersegment license revenues		86		26,333		—			(26,419	)		—

Total license fees		261,083		92,087		—			(26,419	)		326,751

Services
Direct service revenue		485,016		46,156		—			—			531,172
Intersegment service revenues		367		25,905		—			(26,272	)		—

Total services		485,383		72,061		—			(26,272	)		531,172

Messaging		—		—		18,240			—			18,240


Total revenues		746,466		164,148		18,240			(52,691	)		876,163

Total allocated costs and expenses before cost of restructure and amortization of customer lists, covenant not to compete and purchased technology		598,864		136,500		17,596			(52,691	)		700,269


Operating income before cost of restructure and amortization of customer lists, covenant not to compete, and purchased technology		147,602		27,648		644			—			175,894

Cost of restructure - 2006 Activity		961		—		—			—			961
Amortization of customer lists		2,000		4,184		1,087			—			7,271
Amortization of covenant not to compete		60		—		—			—			60
Amortization of purchased technology		1,654		7,883		543			—	��		10,080


Operating income (loss) before unallocated costs	$	142,927	$	15,581	$	(986	)	$	—		$	157,522

Other unallocated costs												23,758

Operating income after unallocated expenses												133,764

Interest income and expense and other, net												27,634
Minority interest												(81	)


Income before income taxes												161,317

Provision for income taxes												66,253


Net income											$	95,064


Basic net income per share											$	1.06


Shares used in computing basic net income per share												89,557


Diluted net income per share											$	1.03


Shares used in computing diluted net income per share												92,251

SYBASE, INC.
Reconciliation of GAAP-based EPS to pro forma EPS
for the three months ended March 31, 2007
(unaudited)


Pro forma EPS	$	0.25		$	0.26

Amortization of purchased intangibles		(0.07	)		(0.07	)
Amortization of stock compensation expense		(0.06	)		(0.06	)
Income tax effect of above adjustments		0.05			0.05
Income tax effect		(0.01	)		(0.01	)


GAAP — based EPS	$	0.16		$	0.17

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, 2007
(unaudited)


Pro forma EPS	$	1.52

Amortization of purchased intangibles		(0.28	)
Amortization of stock compensation expense		(0.26	)
Income tax effect of above adjustments		0.19
Income tax effect		(0.05	)


GAAP — based EPS	$	1.12

Use of Pro Forma Financial Information

Sybase Inactive 8-KSybase Reports Record Operating Profit In 2006 Fourth Quarter