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Sybase Reports Solid 2007 First Quarter Results

DUBLIN, Calif., April 26 /PRNewswire-FirstCall/ -- Sybase, Inc. (NYSE: SY), a leading provider of enterprise infrastructure and mobile software, today reported financial results for the first quarter ended March 31, 2007.

DUBLIN, Calif., April 26 /PRNewswire-FirstCall/ — Sybase, Inc. (NYSE: SY), a leading provider of enterprise infrastructure and mobile software, today reported financial results for the first quarter ended March 31, 2007.

Highlights: * Total revenues increased 18% year over year to $230.0 million * Total database license revenues grew 17% year over year * Over 17 billion total messages delivered across the Sybase 365 network * Cash flow from operations of $69.6 million * Pro forma operating income increased 19% year over year; GAAP up 13% * Pro forma fully diluted EPS of $0.27 exceeded First Call consensus estimate of $0.26; GAAP EPS of $0.16

2007 First Quarter Results

Total revenue increased 18% to $230.0 million from $195.0 million in the first quarter of 2006. The company reported total license revenue of $69.4 million, services revenue of $129.7 million, and messaging revenue of $31.0 million.

Pro forma operating income for the quarter increased 19% year over year to $33.9 million, representing a 15% operating margin.

Pro forma net income for the quarter increased 9% to $24.9 million, or earnings per diluted share (EPS) of $0.27. This compares with pro forma net income of $22.7 million, or EPS of $0.25 for the first quarter of 2006.

Operating income calculated in accordance with generally accepted accounting principles (GAAP) for the quarter increased 13% year over year to $21.4 million, representing a 9% operating margin.

GAAP net income was $15.1 million, or GAAP EPS of $0.16, for the quarter. This compares with GAAP net income of $17.3 million, or GAAP EPS of $0.19, for the 2006 first quarter. Included in the 2007 first quarter GAAP-based results is the impact of $2.8 million for the 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 2007 first quarter.

"We are pleased with the ongoing strength of our overall database license revenues, which grew 17% year over year," stated John Chen, chairman, CEO, and president of Sybase. "This represents our fourth consecutive quarter of double-digit growth in our database business and reflects market share gains driven by robust demand for our Adaptive Server Enterprise 15.0 flagship database and our IQ analytics server.

"We are also very encouraged by our first full quarter of mobile messaging revenue, which exceeded our expectations and successfully attracted new, high- profile customers like China Mobile, NTT Docomo, and Virgin Mobile.

"We are confident that our solid balance sheet, compelling product portfolio, and go-to-market strategy position us well to achieve our revenue, earnings, and cash flow targets for the year," concluded Mr. Chen.

Balance Sheet and Other Data

At March 31, 2007, Sybase reported $698.7 million in cash and cash investments, including restricted cash of $6.0 million. In the first quarter, the company generated $69.6 million in cash flow from operations.

Sybase repurchased $18.6 million worth of its stock during the 2007 first quarter. As of March 31, 2007, $231.2 million remained authorized in the company's current share repurchase program.

Days sales outstanding (DSO) for the 2007 first quarter was 75.

Forward Guidance

For the second quarter ending June 30, 2007, management anticipates revenues ranging from $245.0 million to $250.0 million. Pro forma fully diluted EPS for the second quarter is expected to range from $0.32 to $0.36. GAAP EPS for the second quarter is expected to range from $0.23 to $0.27, which includes $2.7 million for the amortization of intangibles related to the acquisition of Mobile 365 in November 2006.

For full-year 2007, management reiterates its most recent guidance for revenue of approximately $1.025 billion and fully diluted pro forma EPS of approximately $1.52. GAAP EPS is anticipated at approximately $1.12, which includes $10.9 million for the amortization of intangibles related to the acquisition of Mobile 365.

Management also reiterates its most recent guidance for full-year 2007 cash flow from operations in the range of $190 million to $200 million.

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

2007 First Quarter Company Highlights * Announced that the Sybase(R) Adaptive Server(R) Enterprise (ASE) database and the Sybase IQ analytics server were selected by leading financial, federal, telecommunications and retail organizations in Asia, including Samsung Securities, the South Korean Ministry of Government Administration and Home Affairs, China's Guang Dong Telecom, and China's Wang Fujing Department Store Group, to deliver real-time analytics and enterprise data management. * Launched Bridge Concierge Go, a one-stop mobile travel portal covering eight markets in Asia, in conjunction with Bridge Mobile Alliance. Bridge Concierge Go is based on Sybase's AvantGo(R) mobile Internet service. * Expanded the capabilities of Information Anywhere(R) Suite to include instant messaging and presence with the launch of OneBridge(R) Messenger. * Launched a new managed service offering to more than 4.6 million Virgin Mobile USA customers based on the Sybase 365 mfolio(TM) mobile application. * Announced a partnership between Sybase 365 and Belgacom International Carrier Services in a new international SMS peering agreement. * Launched the Wireless Development Center in Techno Park, Singapore to focus on the development of new technologies in the areas of RFID, embedded software and mobile middleware for the enterprise. * Announced that Sybase 365 has been selected by five leading mobile operators in the Pacific Islands to provide domestic and international messaging connectivity in the region. * Launched the Data Tools Platform 1.0, an Eclipse Foundation open source project spearheaded by Sybase, Actuate and IBM for developing data-centric applications in the Eclipse environment. * Delivered SQL Anywhere(R) 10 for Mac OS X on Intel, providing the first data management and synchronization solution for Intel-based Macs.

Conference Call and Webcast Information

The Sybase 2007 first 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, April 26, 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 May 3, 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 #1798432. Additionally, the archived Webcast will be available through July 18, 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, 2006.

Sybase, Adaptive Server Enterprise (ASE), AvantGo, Information Anywhere, mfolio, OneBridge, SQL Anywhere, and Sybase 365 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) (In thousands, Three Months Ended Three Months Ended except per March 31, 2007 March 31, 2006 share data) ————————– ————————– Pro forma Pro forma Adjustments Pro Adjustments Pro GAAP (2) forma GAAP (2) forma ————————– ————————– Revenues: License fees $69,365 — $69,365 $66,888 — $66,888 Services 129,651 — 129,651 128,120 — 128,120 Messaging 31,021 — 31,021 — — — —————- ——– —————- ——— Total revenues 230,037 — 230,037 195,008 — 195,008 Costs and expenses: Cost of license fees 12,753 (2,405)a 10,348 12,792 (2,447)a 10,345 Cost of services 38,742 (339)b 38,403 38,352 (680)b 37,672 Cost of messaging 18,889 (1,102)a,b 17,787 — — — Sales and marketing 64,575 (1,266)b 63,309 61,355 (996)b 60,359 Product development and engineering 38,753 (686)b 38,067 36,997 (593)b 36,404 General and administrative 31,496 (3,273)b 28,223 24,987 (3,156)b 21,831 Amortization of other purchased intangibles 3,410 (3,410)a — 1,546 (1,546)a — Cost of restructure 4 (4)c — 34 (34)c — —————- ——– —————- ——— Total costs and expenses 208,622 (12,485) 196,137 176,063 (9,452) 166,611 —————- ——– —————- ——— Operating income 21,415 12,485 33,900 18,945 9,452 28,397 Interest income and expense and other, net 5,005 — 5,005 6,058 — 6,058 Minority interest (20) — (20) — — — —————- ——– —————- ——— Income before income taxes 26,400 12,485 38,885 25,003 9,452 34,455 Provision for income taxes 11,252 2,747 d 13,999 7,751 3,964 d 11,715 —————- ——– —————- ——— Net income $15,148 $9,738 $24,886 $17,252 $5,488 $22,740 ================ ======== ================ ========= Basic net income per share $0.17 $0.10 $0.27 $0.19 $0.06 $0.25 ================ ======== ================ ========= Shares used in computing basic net income per share 91,149 91,149 89,637 89,637 ================ ======== ================ ========= Diluted net income per share $0.16 $0.11 $0.27 $0.19 $0.06 $0.25 ================ ======== ================ ========= Shares used in computing diluted net income per share 93,609 93,609 92,041 92,041 ================ ======== ================ ========= (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 (In thousands, except share and March 31, December 31, per share data) 2007 2006 ———— ———— (Unaudited) Current assets: Cash and cash equivalents $413,664 $355,303 Short-term investments 247,768 269,612 ———— ———— Total cash, cash equivalents and short-term cash investments 661,432 624,915 Restricted cash 5,958 6,014 Accounts receivable, net 191,145 218,016 Deferred income taxes 6,231 6,224 Other current assets 24,828 16,392 ———— ———— Total current assets 889,594 871,561 Long-term cash investments 31,338 12,781 Property, equipment and improvements, net 64,143 66,458 Deferred income taxes 37,865 36,069 Capitalized software, net 71,394 71,179 Goodwill, net 539,680 540,303 Other purchased intangibles, net 144,820 149,648 Other assets 39,995 39,551 ———— ———— Total assets $1,818,829 $1,787,550 ============ ============ Current liabilities: Accounts payable $24,651 $23,439 Accrued compensation and related expenses 44,730 59,748 Accrued income taxes 7,846 31,364 Other accrued liabilities 94,714 108,436 Deferred revenue 230,751 193,431 ———— ———— Total current liabilities 402,692 416,418 Other liabilities 43,769 44,428 Deferred income taxes 14,569 14,448 Long-term tax liability 25,797 — Long-term deferred revenue 5,444 3,965 Minority interest 5,179 5,160 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 (2006 – 105,337,362) 105 105 Additional paid-in capital 983,422 977,672 Accumulated earnings 107,628 92,817 Other comprehensive income 44,071 40,850 Less: Cost of treasury stock (13,966,698 shares and 2005 – 14,055,557) (273,847) (268,313) ———— ———— Total stockholders' equity 861,379 843,131 ———— ———— Total liabilities and stockholders' equity $1,818,829 $1,787,550 ============ ============ SYBASE, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME PROFORMA WITHOUT PURCHASE ACCOUNTING, COST OF RESTRUCTURE, STOCK COMPENSATION EXPENSE, AND ASSOCIATED INCOME TAX EFFECT (UNAUDITED) Three Months Ended March 31, —————————– (In thousands, except per share data) 2007 2006 ———— ———— Revenues: License fees $69,365 $66,888 Services 129,651 128,120 Messaging 31,021 — ———— ———— Total revenues 230,037 195,008 Costs and expenses: Cost of license fees 10,348 10,345 Cost of services 38,403 37,672 Cost of messaging 17,787 — Sales and marketing 63,309 60,359 Product development and engineering 38,067 36,404 General and administrative 28,223 21,831 ———— ———— Total costs and expenses 196,137 166,611 ———— ———— Operating income 33,900 28,397 Interest income and expense and other, net 5,005 6,058 Minority interest (20) — ———— ———— Income before income taxes 38,885 34,455 Provision for income taxes 13,999 11,715 ———— ———— Net income $24,886 $22,740 ============ ============ Basic net income per share $0.27 $0.25 ============ ============ Shares used in computing basic net income per share 91,149 89,637 ============ ============ Diluted net income per share $0.27 $0.25 ============ ============ Shares used in computing diluted net income per share 93,609 92,041 ============ ============ 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, and related adjustments for income tax provision. The pro forma statement of operations also excludes stock compensation expense and restructuring costs 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 March 31, —————————— (In thousands, except per share data) 2007 2006 ———– ———– Revenues: License fees $69,365 $66,888 Services 129,651 128,120 Messaging 31,021 — ———– ———– Total revenues 230,037 195,008 Costs and expenses: Cost of license fees 12,753 12,792 Cost of services 38,742 38,352 Cost of messaging 18,889 — Sales and marketing 64,575 61,355 Product development and engineering 38,753 36,997 General and administrative 31,496 24,987 Amortization of other purchased intangibles 3,410 1,546 Cost of restructure 4 34 ———– ———– Total costs and expenses 208,622 176,063 ———– ———– Operating income 21,415 18,945 Interest income and expense and other, net 5,005 6,058 Minority interest (20) — ———– ———– Income before income taxes 26,400 25,003 Provision for income taxes 11,252 7,751 ———– ———– Net income $15,148 $17,252 =========== =========== Basic net income per share $0.17 $0.19 =========== =========== Shares used in computing basic net income per share 91,149 89,637 =========== =========== Diluted net income per share $0.16 $0.19 =========== =========== Shares used in computing diluted net income per share 93,609 92,041 =========== =========== SYBASE, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Three Months Ended March 31, ——————— (Dollars in thousands) 2007 2006 ——————————————— ——— ——— Cash and cash equivalents, beginning of year $355,303 $398,741 Cash flows from operating activities: Net income 15,148 17,252 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 21,810 18,012 Minority interest in income of subsidiaries 20 — Gain on disposal of assets (11) (381) Deferred income taxes (1,682) (1,329) Stock-based compensation – restricted stock 2,103 1,956 Stock-based compensation – all other 3,647 3,469 Excess tax benefit from stock-based compensation plans (2,201) — Amortization of note issuance costs 492 492 Changes in assets and liabilities: Accounts receivable 24,331 31,048 Other current assets (7,700) (6,273) Other assets – operating (919) (1,589) Accounts payable 1,212 4 Accrued compensation and related expenses (15,033) (14,427) Accrued income taxes 2,183 (3,678) Other accrued liabilities (12,007) (8,851) Deferred revenues 38,799 37,083 Other liabilities (551) 582 ——— ——— Net cash provided by operating activities 69,641 73,370 Cash flows from investing activities: Decrease in restricted cash 56 66 Purchases of available-for-sale cash investments (120,761) (171,467) Maturities of available-for-sale cash investments 48,400 101,297 Sales of available-for-sale cash investments 75,894 134,618 Business combinations, net of cash acquired (1,501) (23) Purchases of property, equipment and improvements (4,466) (4,622) Proceeds from sale of property, equipment, and improvements 34 2 Capitalized software development costs (8,438) (8,542) (Increase) Decrease in other assets – investing (18) 1 ——— ——— Net cash provided by (used for) investing activities (10,800) 51,330 Cash flows from financing activities: Repayments of long-term obligations (15) (14) Payments on capital lease (392) (77) Net proceeds from the issuance of common stock and reissuance of treasury stock 12,716 5,699 Purchases of treasury stock (18,588) (24,665) Excess tax benefit from stock-based compensation plans 2,201 — ——— ——— Net cash used for financing activities (4,078) (19,057) Effect of exchange rate changes on cash 3,598 1,519 ——— ——— Net increase in cash and cash equivalents 58,361 107,162 ——— ——— Cash and cash equivalents, end of period 413,664 505,903 Cash investments, end of period 279,106 396,562 ——— ——— Total cash, cash equivalents and cash investments, end of period $692,770 $902,465 ========= ========= SYBASE, INC. CONSOLIDATED STATEMENT OF OPERATIONS BY SEGMENT PROFORMA WITHOUT PURCHASE ACCOUNTING, COST OF RESTRUCTURE, STOCK COMPENSATION EXPENSE, AND ASSOCIATED INCOME TAX EFFECT FOR THE THREE MONTHS ENDED MARCH 31, 2007 (UNAUDITED) (In thousands, except Infra- per share data) structure Consoli- Platform iAnywhere Sybase Elimi- dated Group Solutions 365 nations Total ——— ——— ——— ——— ——— Revenues: License fees Infrastructure $48,315 $21 $14 $– $48,350 Mobile and Embedded 6,639 14,376 — — 21,015 ——— ——— ——— ——— ——— Subtotal license fees 54,954 14,397 14 — 69,365 Intersegment license revenues 32 5,536 — (5,568) — ——— ——— ——— ——— ——— Total license fees 54,986 19,933 14 (5,568) 69,365 Services Direct service revenue 118,383 11,268 — — 129,651 Intersegment service revenues 27 6,783 — (6,810) — ——— ——— ——— ——— ——— Total services 118,410 18,051 — (6,810) 129,651 Messaging — — 31,021 31,021 ——— ——— ——— ——— ——— Total revenues 173,396 37,984 31,035 (12,378) 230,037 Total allocated costs and expenses 144,118 34,110 29,977 (12,378) 195,827 ——— ——— ——— ——— ——— Operating income before unallocated costs $29,278 $3,874 $1,058 $– $34,210 Other unallocated costs 310 ——— Operating income after unallocated costs 33,900 Interest income and expense and other, net 5,005 Minority interest (20) ——— Income before income taxes 38,885 Provision for income taxes 13,999 ——— Net income $24,886 ========= Basic net income per share $0.27 ========= Shares used in computing basic net income per share 91,149 ========= Diluted net income per share $0.27 ========= Shares used in computing diluted net income per share 93,609 ========= 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, and related adjustments for income tax provision. The pro forma statement of operations also excludes stock compensation expense and restructuring costs 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 MARCH 31, 2007 (UNAUDITED) (In thousands, except Infra- per share data) structure Consoli- Platform iAnywhere Sybase Elimi- dated Group Solutions 365 nations Total Revenues: ——– ——– ——– ——– ——– License fees Infrastructure $48,315 $21 $14 $– $48,350 Mobile and Embedded 6,639 14,376 — — 21,015 ——– ——– ——– ——– ——– Subtotal license fees 54,954 14,397 14 — 69,365 Intersegment license revenues 32 5,536 — (5,568) — ——– ——– ——– ——– ——– Total license fees 54,986 19,933 14 (5,568) 69,365 Services Direct service revenue 118,383 11,268 — — 129,651 Intersegment service revenues 27 6,783 — (6,810) — ——– ——– ——– ——– ——– Total services 118,410 18,051 — (6,810) 129,651 Messaging — — 31,021 — 31,021 ——– ——– ——– ——– ——– Total revenues 173,396 37,984 31,035 (12,378) 230,037 Total allocated costs and expenses before cost of restructure and amortization of other purchased intangibles and purchased technology 144,118 34,110 29,977 (12,378) 195,827 ——– ——– ——– ——– ——– Operating income before cost of restructure and amortization of other purchased intangibles and purchased technology 29,278 3,874 1,058 — 34,210 Cost of restructure – 2007 Activity 4 — — — 4 Amortization of other purchased intangibles 527 1,046 1,837 — 3,410 Amortization of purchased technology 402 2,003 916 — 3,321 ——– ——– ——– ——– ——– Operating income (loss) before unallocated costs $28,345 $825 $(1,695) $– $27,475 Other unallocated costs 6,060 ——– Operating income after unallocated costs 21,415 Interest income and expense and other, net 5,005 Minority interest (20) ——– Income before income taxes 26,400 Provision for income taxes 11,252 ——– Net income $15,148 ======== Basic net income per share $0.17 ======== Shares used in computing basic net income per share 91,149 ======== Diluted net income per share $0.16 ======== Shares used in computing diluted net income per share 93,609 ======== SYBASE, INC. Reconciliation of GAAP-based EPS to pro forma EPS for the three months ended June 30, 2007 (unaudited) Pro forma EPS $0.32 $0.36 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 $0.23 $0.27 ========= ========= 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 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.

SOURCE Sybase, Inc.

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