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/ ------- Profile: International Entertainment