Sybase 2004 Fourth Quarter License Revenue Up 7 Percent Year-Over-Year

Sybase 2004 Fourth Quarter License Revenue Up 7 Percent Year-Over-Year

Revenues and Earnings Exceed Expectations

Mobile & Wireless Business Grows 48 Percent

DUBLIN, Calif., Jan. 25 /PRNewswire-FirstCall/ -- Sybase, Inc. (NYSE:SY), a leading provider of enterprise infrastructure and wireless software, today reported total license revenues increased 7% for the fourth quarter ended December 31, 2004 compared with the same quarter a year ago. Total revenues for the quarter increased 4% to $218.6 million from total revenues of $210.7 million for the fourth quarter of 2003.

Pro forma net income for the fourth quarter reached $38.5 million, or earnings of $0.40 per share on a diluted basis (EPS). This compares with pro forma net income of $39.2 million, or EPS of $0.39 for the 2003 fourth quarter. Net income for the fourth quarter calculated in accordance with generally accepted accounting principles (GAAP) was $24.1 million, or EPS of $0.25, versus GAAP net income of $37.7 million, or EPS of $0.38 for the 2003 fourth quarter. Pro forma amounts exclude amortization of certain expenses including certain purchased intangibles, unearned stock-based compensation, and restructuring costs. Accompanying this release is a reconciliation of pro forma and GAAP amounts for the fourth quarter and calendar year ended December 31, 2004.

"Our team did an excellent job of executing this quarter, allowing us to achieve outstanding results and exceed expectations," said John Chen, chairman, CEO, and president of Sybase. "Increased demand for mobility and data management solutions, plus strength in our partner channels helped us generate year-over-year license and total revenue growth."

"We're very pleased with our results for the year. We strengthened and enhanced our traditional products, as 2004 emerged as our most prolific product-introduction year ever. Additionally, long-time customers demonstrated their confidence in Sybase with renewed investments in our technology. With strong cash flow and solid profitability, we finished the year on a solid note and are confident about our prospects in the coming year," concluded Mr. Chen.

Balance Sheet and Other Data

At December 31, 2004, Sybase reported $521.6 million in cash and cash investments, including restricted cash of $8.0 million. The company generated $68.1 million in cash flow from operations in the fourth quarter, which brings total 2004 cash flow from operations to $176.2 million.

Sybase repurchased approximately $6.0 million worth of its stock during the 2004 fourth quarter, with $104 million of the company's current share repurchase authorization remaining.

Days sales outstanding for the fourth quarter was 65 days.

Conference Call and Webcast Information


The Sybase 2004 fourth quarter conference call and Webcast is scheduled to begin at 7:30 a.m., Pacific Time/10:30 a.m. Eastern Time, on Tuesday, January 25, 2005. 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 one-week conference call replay will be available. 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 #307348. Additionally, a Webcast replay will be available through April 19, 2005.

About Sybase, Inc.

Celebrating 20 years of innovation, Sybase enables the Unwired Enterprise by delivering enterprise and mobile infrastructure, development and integration software solutions. Organizations can attain maximum value from their data assets by getting the right information to the right people at the right time and place. The world's most critical data in commerce, finance, government, healthcare, and defense runs on Sybase. For more information, visit the Sybase Website: 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; possible disruptive effects of organizational or personnel changes; the success of certain business combinations engaged in by the company or by competitors; political unrest or acts of war; market acceptance of the company's products and services; customer and industry analyst perception of the company and its technology vision and future prospects; and other factors described in Sybase, Inc.'s reports filed with the Securities Exchange Commission, including its Annual Report on Form 10-K for the year ended December 31, 2003 and its Quarterly Report on Form 10-Q for the three months ended September 30, 2004.

Sybase Fourth Quarter 2004 Selected Highlights

To help commemorate its 20th Anniversary, Sybase announcements during the fourth quarter of 2004 expanded upon the company's leadership in the mobile enterprise computing market, while broadening its reach with key strategic partnerships.

In Q4 2004, Sybase:

Mobile Enterprise Computing



-- Was recognized as mobile middleware leader by IDC for third consecutive year:

http://www.ianywhere.com/press_releases/mobile_middleware_leader.html

-- Debuted next-generation of Pylon Anywhere(TM) 6.0 from Sybase subsidiary iAnywhere Solutions, Inc. and announced customers including Atea, Duke University, Eastman Chemical, Linde Gas and Rockwol:

http://www.ianywhere.com/press_releases/pylon_anywhere6.html

-- Announced one-billionth subscriber sync and celebration of the five-year anniversary of AvantGo(R), a service of iAnywhere Solutions, demonstrating leadership in mobile content delivery and mobile marketing:

http://www.ianywhere.com/press_releases/ag_billionth_sync.html

-- Introduced two complementary new products -- Unwired Accelerator and Unwired Orchestrator -- to rapidly mobilize and extend enterprise applications for burgeoning mobile workforce:

http://www.sybase.com/detail/1,6904,1032624,00.html

-- Celebrated grand opening of new campus facility for iAnywhere Solutions in the University of Waterloo Research + Technology Park:

http://www.ianywhere.com/press_releases/waterloo_openhouse.html

-- Debuted new Answers Anywhere(TM) middleware platform from iAnywhere Solutions, providing advanced natural language and context understanding technology:

http://www.ianywhere.com/press_releases/answers_anywhere.html


Developer Initiatives:



-- Announced Sybase PocketBuilder(TM) 2.0, the latest version of the only true rapid application development tool for mobile and wireless applications:

http://www.sybase.com/detail/1,6904,1032843,00.html

-- Debuted PowerDesigner(R) 11, a unique Enterprise Modeling tool that enables better alignment between business and IT goals and enables flexible adaptation to changes in business conditions:

http://www.sybase.com/detail/1,6904,1033459,00.html

-- Increased Sybase Developer Network over 30 percent in the past year and added a wealth of new education and collaboration opportunities for the developer community, including membership in the Microsoft Visual Studio Industry Partner program:

http://www.sybase.com/detail/1,6904,1033769,00.html


Partnerships:



-- Created largest verified data warehouse in the world with Sun Microsystems:

http://www.sybase.com/detail/1,6904,1032634,00.html

-- Integrated Sybase Adaptive Server(R) Enterprise (ASE) with SAP Business One 2004 -- the latest release of SAP's business management solutions for SMBs -- offering customers leading application functionality on a data management platform that delivers both high performance and low TCO:

http://www.sybase.com/detail/1,6904,1032737,00.html

-- Announced ASE for Linux will run on IBM's eServer OpenPower systems, along with supporting joint sales, marketing and services activities worldwide, with a focus on financial services:

http://www.sybase.com/detail/1,6904,1033623,00.html

-- Introduced, with Midwest Wireless, a pilot launch of a new offering based on Sybase mFolio(TM) to help subscribers access personalized Web content with an enhanced browsing experience on handheld devices:

http://www.sybase.com/detail/1,6904,1032842,00.html


Industry Accolades:



-- Celebrated 20th Anniversary at a New York Stock Exchange event with more than 700 customers and partners:

http://www.sybase.com/detail/1,6904,1033624,00.html

-- Sybase ASE was recognized as Golden Software Award winner in database sector by the China Software Association and the China Center for Information Industry Development:

http://www.sybase.com/detail/1,6904,1033430,00.html

Sybase, Adaptive Server, Answers Anywhere, AvantGo, iAnywhere Solutions, mFolio, PowerDesigner, PocketBuilder, and Pylon Anywhere, and are trademarks of Sybase, Inc. or its subsidiaries. "(R)" indicates registration with the U.S. Patent and Trademark Office. 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 Three Months Ended
December 31, 2004 December 31, 2003
(In thousands, except
per share data) Pro forma Pro forma
Adjustments Pro Adjustments Pro
GAAP (2) forma GAAP (2) forma
Revenues:
License fees $87,160 -- $87,160 $81,564 -- $81,564
Services 131,468 -- 131,468 129,088 -- 129,088
Total revenues 218,628 -- 218,628 210,652 -- 210,652

Costs and expenses:
Cost of license
fees 16,091 (4,710)a 11,381 16,656 (3,831)a 12,825
Cost of services 39,068 -- 39,068 42,140 -- 42,140
Sales and
marketing 63,022 -- 63,022 61,613 -- 61,613
Product
development and
engineering 31,013 -- 31,013 28,578 -- 28,578
General and
administrative 22,515 -- 22,515 19,260 -- 19,260
Amortization of
other purchased
intangibles 1,677 (1,677)a -- 500 (500)a --
Stock compensation
expense 1,127 (1,127)b -- 799 (799)b --
Reversal of
purchase
accounting
accrual -- -- c -- -- -- c --
Cost (Reversal)
of restructure 9,666 (9,666)d -- (1,589) 1,589 d --

Total costs and
expenses 184,179 (17,180) 166,999 167,957 (3,541) 164,416

Operating income 34,449 17,180 51,629 42,695 3,541 46,236

Interest income
and expense and
other, net 3,079 -- 3,079 1,529 -- 1,529

Income before
income taxes 37,528 17,180 54,708 44,224 3,541 47,765

Provision for income
taxes 13,417 2,742 e 16,159 6,502 2,072 e 8,574

Net income $24,111 $14,438 $38,549 $37,722 $1,469 $39,191

Basic net income
per share $0.26 $0.15 $0.41 $0.39 $0.02 $0.41

Shares used in
computing basic net
income per share 94,280 94,280 94,280 96,662 96,662 96,662

Diluted net income
per share $0.25 $0.15 $0.40 $0.38 $0.01 $0.39

Shares used in
computing diluted
net income per
share 96,466 96,466 96,466 100,253 100,253 100,253

(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) amortization of unearned stock compensation; (c) reversal of purchase accounting accrual; (d) cost of restructuring charges; (e) income tax effect of proforma adjustments.

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

Twelve Months Ended Twelve Months Ended
December 31, 2004 December 31, 2003
(In thousands, except
per share data) Pro forma Pro forma
Adjustments Pro Adjustments Pro
GAAP (2) forma GAAP (2) forma
Revenues:
License fees $275,872 -- $275,872 $274,817 -- $274,817
Services 512,664 -- 512,664 503,245 -- 503,245
Total revenues 788,536 -- 788,536 778,062 -- 778,062

Costs and expenses:
Cost of license
fees 60,795 (17,818)a 42,977 60,711 (15,257)a 45,454
Cost of services 161,848 -- 161,848 162,666 -- 162,666
Sales and
marketing 242,431 -- 242,431 239,045 -- 239,045
Product
development and
engineering 119,877 -- 119,877 116,889 -- 116,889
General and
administrative 87,115 -- 87,115 82,111 -- 82,111
Amortization of
other purchased
intangibles 5,139 (5,139)a -- 2,000 (2,000)a --
Stock compensation
expense 4,599 (4,599)b -- 2,882 (2,882)b --
Reversal of
purchase
accounting
accrual (2,677) 2,677 c -- -- -- c --
Cost of
restructure 20,017 (20,017)d -- 7,429 (7,429)d --

Total costs and
expenses 699,144 (44,896) 654,248 673,733 (27,568) 646,165

Operating income 89,392 44,896 134,288 104,329 27,568 131,897

Interest income
and expense and
other, net 11,574 -- 11,574 13,766 -- 13,766

Income before
income taxes 100,966 44,896 145,862 118,095 27,568 145,663

Provision for
income taxes 33,016 11,268 e 44,284 30,829 9,072 e 39,901

Net income $67,950 $33,628 $101,578 $87,266 $18,496 $105,762

Basic net income
per share $0.71 $0.35 $1.06 $0.92 $0.20 $1.12

Shares used in
computing basic
net income per
share 95,550 95,550 95,550 94,833 94,833 94,833

Diluted net income
per share $0.69 $0.35 $1.04 $0.89 $0.19 $1.08

Shares used in
computing diluted
net income per
share 98,001 98,001 98,001 97,582 97,582 97,582

(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) amortization of unearned stock compensation; (c) reversal of purchase accounting accrual; (d) cost of restructuring charges; (e) income tax effect of proforma adjustments.

SYBASE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS

December 31, December 31,
(In thousands, except share and 2004 2003
per share data) (Unaudited)

Current assets:
Cash and cash equivalents $321,417 $315,404
Short-term investments 158,217 155,093
Total cash, cash equivalents and
short-term cash investments 479,634 470,497

Restricted cash 5,356 4,747
Accounts receivable, net 157,897 140,332
Deferred income taxes 11,205 12,739
Other current assets 14,790 16,167

Total current assets 668,882 644,482

Long-term cash investments 33,998 103,296
Restricted long-term cash investments 2,600 3,400
Property, equipment and improvements, net 64,371 67,462
Deferred income taxes 39,440 58,506
Capitalized software, net 61,771 58,947
Goodwill, net 214,110 140,875
Other purchased intangibles, net 67,208 38,715
Other assets 31,142 35,673

Total assets $1,183,522 $1,151,356

Current liabilities:
Accounts payable $11,962 $15,425
Accrued compensation and related expenses 43,632 39,134
Accrued income taxes 32,595 33,677
Other accrued liabilities 81,715 94,611
Deferred revenue 208,741 200,612

Total current liabilities 378,645 383,459

Other liabilities 33,121 15,129
Long-term deferred revenue 10,170 6,269
Minority interest 5,030 5,030

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
(2003 - 105,337,362) 105 105
Additional paid-in capital 940,806 933,657
Accumulated deficit (66,690) (126,385)
Other comprehensive income 49,356 26,849
Less: Cost of treasury stock (9,818,385
shares and 2003 - 6,811,898) (159,617) (87,672)
Unearned compensation (7,404) (5,085)

Total stockholders' equity 756,556 741,469

Total liabilities and stockholders'
equity $1,183,522 $1,151,356


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

Three Months Ended Twelve Months Ended
(In thousands, except December 31, December 31,
per share data) 2004 2003 2004 2003

Revenues:
License fees $87,160 $81,564 $275,872 $274,817
Services 131,468 129,088 512,664 503,245

Total revenues 218,628 210,652 788,536 778,062

Costs and expenses:
Cost of license fees 11,381 12,825 42,977 45,454
Cost of services 39,068 42,140 161,848 162,666
Sales and marketing 63,022 61,613 242,431 239,045
Product development
and engineering 31,013 28,578 119,877 116,889
General and
administrative 22,515 19,260 87,115 82,111

Total costs and
expenses 166,999 164,416 654,248 646,165

Operating income 51,629 46,236 134,288 131,897

Interest income and
expense and other, net 3,079 1,529 11,574 13,766

Income before income
taxes 54,708 47,765 145,862 145,663

Provision for income
taxes 16,159 8,574 44,284 39,901

Net income $38,549 $39,191 $101,578 $105,762

Basic net income per
share $0.41 $0.41 $1.06 $1.12

Shares used in computing
basic net income
per share 94,280 96,662 95,550 94,833

Diluted net income
per share $0.40 $0.39 $1.04 $1.08

Shares used in computing
diluted net income
per share 96,466 100,253 98,001 97,582



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., and XcelleNet, 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 Twelve Months Ended
(In thousands, except December 31, December 31,
per share data) 2004 2003 2004 2003

Revenues:
License fees $87,160 $81,564 $275,872 $274,817
Services 131,468 129,088 512,664 503,245

Total revenues 218,628 210,652 788,536 778,062

Costs and expenses:
Cost of license fees 16,091 16,656 60,795 60,711
Cost of services 39,068 42,140 161,848 162,666
Sales and marketing 63,022 61,613 242,431 239,045
Product development
and engineering 31,013 28,578 119,877 116,889
General and
administrative 22,515 19,260 87,115 82,111
Amortization of other
purchased intangibles 1,677 500 5,139 2,000
Stock compensation
expense 1,127 799 4,599 2,882
Reversal of purchase
accounting accrual -- -- (2,677) --
Cost (Reversal) of
restructure 9,666 (1,589) 20,017 7,429

Total costs and
expenses 184,179 167,957 699,144 673,733

Operating income 34,449 42,695 89,392 104,329

Interest income and
expense and other, net 3,079 1,529 11,574 13,766

Income before income
taxes 37,528 44,224 100,966 118,095

Provision for income
taxes 13,417 6,502 33,016 30,829

Net income $24,111 $37,722 $67,950 $87,266

Basic net income
per share $0.26 $0.39 $0.71 $ 0.92

Shares used in
computing basic net
income per share 94,280 96,662 95,550 94,833

Diluted net income
per share $0.25 $0.38 $0.69 $ 0.89

Shares used in
computing diluted
net income per share 96,466 100,253 98,001 97,582


SYBASE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

Twelve Months Ended
December 31,
(Dollars in thousands) 2004 2003

Cash and cash equivalents, beginning of year $315,404 $231,267
Cash flows from operating activities:
Net income 67,950 87,266
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 84,912 84,885
Write-off of assets in restructuring 6,908 258
(Gain) Loss on disposal of assets 2,680 (435)
Reversal of purchase accounting accrual (2,677) --
Deferred income taxes 504 729
Amortization of deferred stock-based
compensation 4,599 2,882
Changes in assets and liabilities:
Accounts receivable (5,342) 40,738
Other current assets 2,070 1,646
Other assets - operating 4,623 --
Accounts payable 2,323 (4,591)
Accrued compensation and related expenses 3,397 1,495
Accrued income taxes 791 6,598
Other accrued liabilities (14,792) (29,598)
Deferred revenues 8,887 5,622
Other liabilities 9,318 4,650
Net cash provided by operating activities 176,151 202,145
Cash flows from investing activities:
Decrease in restricted cash 191 906
Purchases of available-for-sale cash
investments (201,417) (325,725)
Maturities of available-for-sale cash
investments 149,923 153,805
Sales of available-for-sale cash
investments 116,462 69,064
Business combinations, net of cash acquired (81,255) (13,900)
Purchases of property, equipment and
improvements (30,445) (35,325)
Proceeds from sale of fixed assets 205 159
Capitalized software development costs (36,484) (27,964)
Decrease in other assets - investing 2 288
Net cash used for investing activities (82,818) (178,692)
Cash flows from financing activities:
Repayments of long-term obligations (22,173) --
Payments on capital lease (63) --
Minority interest -- 1
Net proceeds from the issuance of common
stock and reissuance of treasury stock 35,592 55,914
Purchases of treasury stock (115,563) (30,883)
Net cash provided by (used for) financing
activities (102,207) 25,032
Effect of exchange rate changes on cash 14,887 35,652
Net increase in cash and cash equivalents 6,013 84,137
Cash and cash equivalents, end of period 321,417 315,404
Cash investments, end of period 192,215 258,389
Total cash, cash equivalents and cash
investments, end of period $513,632 $573,793


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, 2004
(UNAUDITED)

(In thousands, except per share data)

Infrastructure Consoli-
Platform iAnywhere Financial dated
Revenues: Group Solutions Fusion Eliminations Total
License fees
Infrastructure $58,622 $31 $-- $-- $58,653
Mobile and
Embedded 11,927 13,226 -- -- 25,153
E-Finance 715 -- 2,639 -- 3,354
Subtotal
license
fees 71,264 13,257 2,639 -- 87,160
Intersegment
license revenues 21 9,929 596 (10,546) --
Total license
fees 71,285 23,186 3,235 (10,546) 87,160
Services 119,293 7,821 4,354 -- 131,468
Intersegment
service revenues -- 7,074 1,170 (8,244) --
Total services 119,293 14,895 5,524 (8,244) 131,468

Total revenues 190,578 38,081 8,759 (18,790) 218,628

Total allocated
costs and
expenses 148,716 27,402 7,834 (18,790) 165,162

Operating income
before unallocated
expenses $41,862 $10,679 $925 $-- $53,466

Other unallocated
expenses 1,837

Operating income
after unallocated
expenses 51,629

Interest income and
expense and other,
net 3,079

Income before
income taxes 54,708

Provision for
income taxes 16,159

Net income $38,549

Basic net income
per share $0.41

Shares used in
computing basic
net income per
share 94,280

Diluted net
income per share $0.40

Shares used in
computing diluted
net income per
share 96,466



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., and XcelleNet, 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, 2004
(UNAUDITED)

(In thousands, except per share data)

Infrastructure Consoli-
Platform iAnywhere Financial dated
Revenues: Group Solutions Fusion Eliminations Total
License fees
Infrastructure $192,588 $87 $-- $-- $192,675
Mobile and
Embedded 31,152 44,536 -- -- 75,688
E-Finance 1,405 -- 6,104 -- 7,509
Subtotal
license
fees 225,145 44,623 6,104 -- 275,872
Intersegment
license
revenues 117 26,063 1,190 (27,370) --
Total license
fees 225,262 70,686 7,294 (27,370) 275,872

Services 475,502 21,631 15,531 -- 512,664
Intersegment
service revenues 11 27,007 4,709 (31,727) --
Total
services 475,513 48,638 20,240 (31,727) 512,664

Total revenues 700,775 119,324 27,534 (59,097) 788,536

Total allocated
costs and expenses 586,606 100,428 29,302 (59,097) 657,239

Operating income
(loss) before
unallocated
expenses $114,169 $18,896 $(1,768) $-- $131,297

Other unallocated
expenses (2,991)

Operating income
after unallocated
expenses 134,288

Interest income
and expense and
other, net 11,574

Income before
income taxes 145,862

Provision for
income taxes 44,284

Net income $101,578

Basic net income
per share $1.06

Shares used in
computing basic
net income per
share 95,550

Diluted net
income per share $1.04

Shares used in
computing diluted
net income per
share 98,001



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., and XcelleNet, 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, 2004
(UNAUDITED)

(In thousands, except per share data)

Infrastructure Consoli-
Platform iAnywhere Financial dated
Revenues: Group Solutions Fusion Eliminations Total
License fees
Infrastructure $58,622 $31 $-- $-- $58,653
Mobile and
Embedded 11,927 13,226 -- -- 25,153
E-Finance 715 -- 2,639 -- 3,354
Subtotal license
fees 71,264 13,257 2,639 -- 87,160
Intersegment
license revenues 21 9,929 596 (10,546) --
Total license
fees 71,285 23,186 3,235 (10,546) 87,160

Services 119,293 7,821 4,354 -- 131,468
Intersegment
service revenues -- 7,074 1,170 (8,244) --
Total
services 119,293 14,895 5,524 (8,244) 131,468

Total revenues 190,578 38,081 8,759 (18,790) 218,628

Total allocated
costs and expenses
before cost of
restructure and
amortization of
customer lists,
covenant not to
compete, and
purchased
technology 148,716 27,402 7,834 (18,790) 165,162

Operating income
before cost of
restructure and
amortization of
customer lists,
covenant not to
compete, and
purchased
technology 41,862 10,679 925 -- 53,466

Cost of restructure
- 2004 Activity 7,985 -- -- -- 7,985
Amortization of
customer lists -- 711 500 -- 1,211
Amortization of
covenant not to
compete -- 466 -- -- 466
Amortization of
purchased
technology 2,920 979 811 -- 4,710

Operating income
(loss) before
unallocated costs $30,957 $8,523 $(386) $-- $39,094

Other unallocated
expenses 4,645
Operating income
after unallocated
expenses 34,449

Interest income
and expense and
other, net 3,079

Income before
income taxes 37,528

Provision for
income taxes 13,417

Net income $24,111

Basic net income
per share $0.26

Shares used in
computing basic
net income per
share 94,280

Diluted net income
per share $0.25

Shares used in
computing diluted
net income per
share 96,466


SYBASE, INC.
CONSOLIDATED STATEMENT OF OPERATIONS BY SEGMENT
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 2004
(UNAUDITED)

(In thousands, except per share data)

Infrastructure Consoli-
Platform iAnywhere Financial dated
Revenues: Group Solutions Fusion Eliminations Total
License fees
Infrastructure $192,588 $87 $-- $-- $192,675
Mobile and
Embedded 31,152 44,536 -- -- 75,688
E-Finance 1,405 -- 6,104 -- 7,509
Subtotal
license fees 225,145 44,623 6,104 -- 275,872
Intersegment
license revenues 117 26,063 1,190 (27,370) --
Total license
fees 225,262 70,686 7,294 (27,370) 275,872

Services 475,502 21,631 15,531 -- 512,664
Intersegment
service revenues 11 27,007 4,709 (31,727) --
Total services 475,513 48,638 20,240 (31,727) 512,664

Total revenues 700,775 119,324 27,534 (59,097) 788,536

Total allocated
costs and expenses
before cost of
restructure and
amortization of
customer lists,
covenant not to
compete, and
purchased
technology 586,606 100,428 29,302 (59,097) 657,239

Operating income
(loss) before cost
of restructure and
amortization of
customer lists,
covenant not to
compete, and
purchased
technology 114,169 18,896 (1,768) -- 131,297

Cost of restructure
- 2004 Activity 18,976 140 40 -- 19,156
Amortization of
customer lists -- 1,896 2,000 -- 3,896
Amortization of
covenant not to
compete -- 1,243 -- -- 1,243
Amortization of
purchased
technology 11,680 2,894 3,244 -- 17,818

Operating income
(loss) before
unallocated costs $83,513 $12,723 $(7,052) $-- $89,184

Other unallocated
expenses (208)
Operating income
after unallocated
expenses 89,392

Interest income
and expense and
other, net 11,574

Income before
income taxes 100,966

Provision for
income taxes 33,016

Net income $67,950

Basic net income
per share $0.71

Shares used in
computing basic
net income per
share 95,550

Diluted net income
per share $0.69

Shares used in
computing diluted
net income per
share 98,001



Source: Sybase, Inc.

CONTACT: financial, Lynne Farris, Sybase Investor Relations,
+1-925-236-8797, or lfarris@sybase.com; or media, Heather Peterson, Sybase
Public Relations, +1-925-236-6517, or heatherp@sybase.com

Web site: http://www.sybase.com/


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