8-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of Report:

April 21, 2004
(Date of earliest event reported)

SYBASE, INC.

(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction of
incorporation or organization) 0-19395
(Commission File Number) 94-2951005
(I.R.S. Employer
Identification Number)

One Sybase Drive
Dublin, CA 94568
(Address of principal executive offices)

Registrant’s telephone number, including area code: (925) 236-5000

TABLE OF CONTENTS

	Item 7. Financial Statements and Exhibits
	Item 12. Results of Operations and Financial Condition
SIGNATURE
EXHIBIT INDEX
Exhibit 99.1

Item 7. Financial Statements and Exhibits

     (c) Exhibits

Exhibit No.	Description
99.1	Press Release of Sybase, Inc. issued April 21, 2004

Item 12. Results of Operations and Financial Condition

     (a) On April 21, 2004, Sybase, Inc. issued a press release announcing its results for the three months ended March 31, 2004 (“Q1 2004 Release “), a copy of which is furnished as Exhibit 99.1 and incorporated herein by reference. As part of the Q1 2004 Release, Sybase presented certain unaudited financial information, including the following:

(1)	Reconciliation to Pro Forma Condensed Consolidated Statements of Operations for the three months ended March 31, 2004 and March 31, 2003
(2)	Reconciliation of GAAP-based EPS to Pro Forma EPS for the twelve months ended December 31, 2004
(3)	Condensed Consolidated Balance Sheets for the three months ended March 31, 2004, and the twelve months ended December 31, 2003
(4)	Condensed Consolidated Statements of Income for the three months ended March 31, 2004 and March 31, 2003
(5)	Condensed Consolidated Statements of Income Pro Forma without purchase accounting, cost of restructure, and stock compensation expense for the three months ended March 31, 2004 and March 31, 2003
(6)	Consolidated Statement of Operations by Segment for the three months ended March 31, 2004
(7)	Consolidated Statement of Operations by Segment Pro Forma without purchase accounting, cost of restructure, and stock compensation expense for the three months ended March 31, 2004
(8)	Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2004 and March 31, 2003

     (b) On the same date, the Company orally disclosed certain of the above-referenced pro forma and GAAP financial guidance for the first quarter and full year 2004 during a webcast and conference call meeting all of the following requirements:

(1)	The information was provided as part of a presentation that was complementary to and occurred within 48 hours of publication of the Q1 2004 Release;
(2)	The presentation was broadly accessible to the public by dial-in conference call and webcast;
(3)	The financial and other statistical information contained in the presentation was available on our external website together with information required under Section 244.100 of Regulation G at the time of the conference call and webcast; and
(4)	The presentation was announced by widely disseminated press release that included instructions as to when and how to access the presentation and the location on our website where the information would be available.

SIGNATURE

     Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	SYBASE, INC.
Date: April 26, 2004	By:	/s/ TERESA D. CHUH
		Name:	Teresa D. Chuh
		Title:	Vice President and Associate General Counsel

EXHIBIT INDEX

Exhibit No.	Description
99.1	Press Release of Sybase, Inc. issued April 21, 2004

EX-99.1

Exhibit 99.1
For Financial Inquiries Contact:
Scott Irey
scott.irey@sybase.com
(925) 236-6751

For Press Inquiries Contact:
Leslie Nakajima
Sybase Public Relations
leslien@sybase.com
(925) 236-8650

SYBASE REPORTS FIRST QUARTER PROFITS;
REAFFIRMS FULL YEAR GUIDANCE

Mobile and Wireless Business Grows 12 Percent Year-Over-Year

DUBLIN, Calif. – April 21, 2004 – Sybase, Inc. (NYSE: SY), a leading enterprise infrastructure and mobile software company, today reported total revenues of $183.2 million for the first quarter of 2004, versus $181.5 million for the same period last year, and reaffirmed its full-year revenue, cash flow and earnings expectations set at the beginning of 2004.

     Pro forma net income for the first quarter was $18.2 million, or earnings per share of $0.18 on a diluted basis (EPS) compared to net income of $16.1 million, or EPS of $0.17 for the first quarter of 2003. Net income for the same period calculated in accordance with generally accepted accounting principles (GAAP) was $13.2 million, or EPS of $0.13, versus GAAP net income of $13.0 million, or EPS of $0.13 for Q1 2003. Pro forma amounts exclude amortization of certain expenses, including certain purchased intangibles, unearned stock-based compensation and restructuring costs. Reconciliations of pro forma and GAAP EPS for the quarter ended March 31, 2004, and for the full year accompany this release.

     “We are very pleased with our 12% year-over-year growth in mobile and wireless, and the enthusiasm surrounding our Unwired Enterprise initiative,” said John Chen, chairman, CEO and president of Sybase, Inc. “Looking ahead, we believe our momentum in mobile and wireless, which will be further enhanced by the completion of our

acquisition of XcelleNet, the release of our new real-time database, increased traction in Asia Pacific, all signal positive growth for Sybase in the second half of the year.”

Balance Sheet and Other Data

     For the period ended March 31, 2004, Sybase reported $595.0 million in cash and cash investments, including restricted cash of $8.3 million, and generated $66.2 million in cash flow from operations. Sybase repurchased $53.9 million of its stock during the first quarter, with approximately $165.3 million of its current share repurchase authorization remaining at March 31, 2004.

     Days sales outstanding for the three months ended March 31, 2004 was 53 days, compared with 60 days for the same period last year.

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

# # # #

Forward-looking Statements: Statements in this release concerning Sybase, Inc., its subsidiaries and their respective prospects, planned acquisitions and future growth are forward-looking statements that involve a number of uncertainties and risks. Factors that could cause actual events or results to differ materially from those suggested by such forward-looking statements include general business conditions; sales productivity; the possibility that anticipated acquisitions will not close; possible disruptive effects of organizational or personnel changes; 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; rapid technological changes; competitive factors; unanticipated delays in scheduled product availability dates; interoperability of the company’s products with other leading software application products; volatility of the stock markets generally; market growth rates in the client/server and Internet software markets; and other factors discussed 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.

Sybase First Quarter 2004 Selected Highlights

     Sybase announcements during the first quarter of 2004 expanded upon the company’s leadership in the mobile enterprise computing market, while positioning it for growth in the core information management market. Additionally, Sybase broadened its reach with key strategic partnerships, and deepened its influence in the financial services and international markets.

In Q1 2004, Sybase:

Mobile Enterprise Computing

• Announced it has signed an agreement to purchase privately held XcelleNet, Inc., a leader in frontline device management software, and plans to integrate it into Sybase’s iAnywhere Solutions™ subsidiary: http://www.ianywhere.com/press_releases/xcellenet_acquisition.html

• Introduced a new version of the M-Business Anywhere mobile application platform from iAnywhere Solutions, featuring the industry’s broadest device support, new usage tracking capabilities and support for global deployments: http://www.ianywhere.com/press_releases/syncngo_tabletpc.html

• Announced that iAnywhere Solutions helps streamline and improve patient care for BeyondNow Technologies, Cogon Systems, HealthWyse and Microsys Computing: http://www.ianywhere.com/press_releases/hea lthcare_partners.html

• Debuted the next generation of Pylon Anywhere™ from iAnywhere Solutions, making mobile email more convenient and secure: http://www.ianywhere.com/press_releases/pyl on_next_generation.html

Information Management and Enterprise Applications:

• Introduced Sybase® Mach Desktop, an OEM-ready “user experience” server that enables ISVs to easily deliver Web content, enterprise applications, voice-activated services and corporate data to a wide variety of computing devices including PCs, laptops, kiosks, PDAs and mobile phones: http://www.sybase.com/detail/1,6904,1029080,00.html

• Sybase subsidiary, Financial Fusion, Inc., licensed Financial Fusion® Corporate Banking Solution, a web-based cash management and global payments system, to six of the top banks in the U.S.: http://www.sybase.com/detail/1,6904,1028700 ,00.html

• Announced availability of Pocket PowerBuilder ™1.5, the company’s integrated application development environment designed to simplify and speed the creation of mobile and wireless enterprise applications: http://www.sybase.com/detail/1,6904,1028503 ,00.html

• Launched the latest release of Sybase EAServer, based on open standards that powers business critical applications providing the lowest total cost of ownership: http://www.sybase.com/detail/1,6904,1028502 ,00.html

• Announced availability of PowerDesigner® 10.0, an enterprise modeling tool that combines business- and technology-centric modeling techniques to foster greater collaboration between business and IT users:http://www.sybase.com/detail/1,6904,1 028504,00.html

• Announced availability of the company’s highly-scalable analytical engine, Sybase IQ 12.5, on Linux: http://www.sybase.com/detail/1,6904,1028041 ,00.html

• Announced availability of Sybase Adaptive Server® Enterprise on Mac OS X “Panther” server, which allows Apple users to deploy database-driven applications : http://www.sybase.com/detail/1,6904,1027808,00.html

Partnerships:

• Previewed SAP Business One running on Sybase, and demonstrated a prototype mobile extension for SAP Business One developed by Sybase: http://www.sybase.com/detail/1,6904,1029032,00.html

• Announced a global agreement to provide customers with Diogenes Suite, a rapidly deployable, cost-effective, secure, solution, combined of programs that package, encrypt, and deliver transaction data: http://www.sybase.com/detail/1,6904,1029032,00.h tml

• iAnywhere Solutions teamed up with Epic Solutions, Legal Files, Profit Tools and VCI to provide solutions to small to medium sized businesses (SMBs): http://www.ianywhere.com/press_releases/smb_part ners.html

• Extended Partnership with LifeBoat to provide more than 6,000 resellers with Sybase application development products: http://www.sybase.com/detail/1,6904,1028505,00.h tml

Global Reach and Accolades:

• Appointed Raymond Teh as senior vice president of Sybase’s Asia Pacific Operations, and formed the new Asia Development Office, led by Willie Jow, vice president of Business Operations: http://www.sybase.com/detail/1,6904,1029007,00.h tml

• Announced that Taiwan’s provincial government selected Sybase subsidiary iAnywhere Solutions Manage Anywhere Studio™: http://www.ianywhere.com/press_releases/taiwan_g overnment.html

• iAnywhere Solutions and Eli Lilly completed a pilot project in Italy to provide a PDA-based sales force automation solution: http://www.ianywhere.com/press_releases/eli_lill y.html

• Announced that 17 Sybase customers received the prestigious Computerworld Honors Medal of Achievement, recognizing organizations that are leading the global information technology revolution: http://www.sybase.com/detail/1,6904,1029284,00.h tml

• Announced Sybase was recognized as one of the “Top Ten Information Technology Enterprises in Telecommunications” by Beijing Communications World Newspaper, a leading publication in the Communications industry in China: http://www.sybase.com/detail/1,6904,1029109,00.h tml

• Announced that Sybase ASE was recognized with Readers’ Choice and Editor’s Choice Awards by LinuxWorld Magazine and Open Source World Magazine. http://www.sybase.com/detail/1,6904,1028661,00.html

     Sybase, iAnywhere Solutions, PowerDesigner, Pylon Anywhere, Financial Fusion, Pocket PowerBuilder, Manage Anywhere Studio and Adaptive Server are trademarks of Sybase, Inc. or its subsidiaries. “®” 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 March 31, 2004							Three Months Ended March 31, 2003
			Pro forma								Pro forma
(In thousands, except per share data)	GAAP		Adjustments (2)			Pro forma		GAAP			Adjustments (2)			Pro forma
Revenues:
License fees	$	57,905		—		$	57,905	$	60,875			—		$	60,875
Services		125,254		—			125,254		120,672			—			120,672
Total revenues		183,159		—			183,159		181,547			—			181,547
Costs and expenses:
Cost of license fees		13,580		(3,831	) a		9,749		13,928			(3,764	) a		10,164
Cost of services		41,584		—			41,584		39,232			—			39,232
Sales and marketing		58,172		—			58,172		58,496			—			58,496
Product development and engineering		30,648		—			30,648		29,918			—			29,918
General and administrative		19,773		—			19,773		22,100			—			22,100
Amortization of other purchased intangibles		500		(500	) a		—		500			(500	) a		—
Stock compensation expense		1,302		(1,302	) b		—		661			(661	) b		—
Cost (Reversal) of restructure		125		(125	) c		—		(209	)		209	c		—
Total costs and expenses		165,684		(5,758	)		159,926		164,626			(4,716	)		159,910
Operating income		17,475		5,758			23,233		16,921			4,716			21,637
Interest income and expense and other, net		3,589		—			3,589		2,443			—			2,443
Income before income taxes		21,064		5,758			26,822		19,364			4,716			24,080
Provision for income taxes		7,879		704	d		8,583		6,390			1,556	d		7,946
Net income	$	13,185	$	5,054		$	18,239	$	12,974		$	3,160		$	16,134
Basic net income per share	$	0.14	$	0.05		$	0.19	$	0.14		$	0.03		$	0.17
Shares used in computing basic net income per share		97,291		97,291			97,291		94,357			94,357			94,357
Diluted net income per share	$	0.13	$	0.05		$	0.18	$	0.13		$	0.04		$	0.17
Shares used in computing diluted net income per share		101,054		101,054			101,054		97,275			97,275			97,275

(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 from prior restructuring activities because we do not believe they are indicative of our core business. For the sake of consistency and clarity in our financial reporting, we will continue to include the costs associated with restructuring activity committed to prior to Q3 2003 as a pro forma adjustment in our financial statements until the related charges and liabilities are completely settled. 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) cost of restructuring charges; (d) income tax effect of proforma adjustments.

SYBASE, INC.
Reconciliation of GAAP-based EPS to pro forma EPS
for the twelve months ended December 31, 2004
(unaudited)

	Low end			High end
	of range			of range
GAAP - based EPS	$	0.92		$	0.94
Amortization of purchased intangibles		0.17			0.17
Amortization of unearned stock compensation		0.06			0.06
Cost of restructuring		0.01			0.01
Income tax effect of above adjustments		(0.08	)		(0.08	)
Pro forma EPS	$	1.08		$	1.10

     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 from prior restructuring activities because we do not believe they are indicative of our core business. For the sake of consistency and clarity in our financial reporting, we will continue to include the costs associated with restructuring activity committed to prior to Q3 2003 as a pro forma adjustment in our financial statements until the related charges and liabilities are completely settled. 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 BALANCE SHEETS

	March 31,			December 31,
(In thousands, except share and per share data)	2004			2003
	(Unaudited)
Current assets:
Cash and cash equivalents	$	370,456		$	315,404
Short-term investments		137,901			155,093
Total cash, cash equivalents and short-term cash investments		508,357			470,497
Restricted cash		4,912			4,747
Accounts receivable, net		107,033			140,332
Deferred income taxes		12,791			12,739
Other current assets		19,295			16,167
Total current assets		652,388			644,482
Long-term cash investments		78,301			103,296
Restricted long-term cash investments		3,400			3,400
Property, equipment and improvements, net		75,260			67,462
Deferred income taxes		59,778			58,506
Capitalized software, net		58,846			58,947
Goodwill, net		140,759			140,875
Other purchased intangibles, net		34,384			38,715
Other assets		35,476			35,673
Total assets	$	1,138,592		$	1,151,356
Current liabilities:
Accounts payable	$	16,435		$	15,425
Accrued compensation and related expenses		29,899			39,134
Accrued income taxes		32,463			33,677
Other accrued liabilities		81,570			94,611
Deferred revenue		231,586			206,881
Total current liabilities		391,953			389,728
Other liabilities		24,774			15,129
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		940,567			933,657
Accumulated deficit		(111,523	)		(126,385	)
Other comprehensive income/(loss)		24,725			26,849
Less: Cost of treasury stock (7,981,820 shares and 2003 - 6,811,898)		(126,346	)		(87,672	)
Unearned compensation		(10,693	)		(5,085	)
Total stockholders’ equity		716,835			741,469
Total liabilities and stockholders’ equity	$	1,138,592		$	1,151,356

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

	Three Months Ended March 31,
(In thousands, except per share data)	2004		2003
Revenues:
License fees	$	57,905	$	60,875
Services		125,254		120,672
Total revenues		183,159		181,547
Costs and expenses:
Cost of license fees		13,580		13,928
Cost of services		41,584		39,232
Sales and marketing		58,172		58,496
Product development and engineering		30,648		29,918
General and administrative		19,773		22,100
Amortization of other purchased intangibles		500		500
Stock compensation expense		1,302		661
Cost (Reversal) of restructure		125		(209	)
Total costs and expenses		165,684		164,626
Operating income		17,475		16,921
Interest income and expense and other, net		3,589		2,443
Income before income taxes		21,064		19,364
Provision for income taxes		7,879		6,390
Net income	$	13,185	$	12,974
Basic net income per share	$	0.14	$	0.14
Shares used in computing basic net income per share		97,291		94,357
Diluted net income per share	$	0.13	$	0.13
Shares used in computing diluted net income per share		101,054		97,275

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

	Three Months Ended March 31,
(In thousands, except per share data)	2004		2003
Revenues:
License fees	$	57,905	$	60,875
Services		125,254		120,672
Total revenues		183,159		181,547
Costs and expenses:
Cost of license fees		9,749		10,164
Cost of services		41,584		39,232
Sales and marketing		58,172		58,496
Product development and engineering		30,648		29,918
General and administrative		19,773		22,100
Total costs and expenses		159,926		159,910
Operating income		23,233		21,637
Interest income and expense and other, net		3,589		2,443
Income before income taxes		26,822		24,080
Provision for income taxes		8,583		7,946
Net income	$	18,239	$	16,134
Basic net income per share	$	0.19	$	0.17
Shares used in computing basic net income per share		97,291		94,357
Diluted net income per share	$	0.18	$	0.17
Shares used in computing diluted net income per share		101,054		97,275

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., and AvantGo 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.

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

(In thousands, except per share data)

	Infrastructure		iAnywhere		Financial						Consolidated
	Platform Group		Solutions, Inc.		Fusion, Inc.			Eliminations			Total
Revenues:
License fees
Infrastructure	$	43,380	$	40	$	—		$	—		$	43,420
Mobile and Embedded		5,052		8,340		—			—			13,392
E-Finance		102		—		991			—			1,093
Subtotal license fees		48,534		8,380		991			—			57,905
Intersegment license revenues		53		4,223		104			(4,380	)		—
Total license fees		48,587		12,603		1,095			(4,380	)		57,905
Services		119,069		2,626		3,559						125,254
Intersegment service revenues		—		6,533		1,235			(7,768	)		—
Total services		119,069		9,159		4,794			(7,768	)		125,254
Total revenues		167,656		21,762		5,889			(12,148	)		183,159
Total allocated costs and expenses before cost of restructure and amortization of customer lists and purchased technology		146,233		20,386		6,693			(12,148	)		161,164
Operating income (loss) before cost of restructure and amortization of customer lists and purchased technology		21,423		1,376		(804	)		—			21,995
Cost of restructure - 2004 Activity		125		—		—			—			125
Amortization of customer lists		—		—		500			—			500
Amortization of purchased technology		2,920		100		811			—			3,831
Operating income (loss) before unallocated costs	$	18,378	$	1,276	$	(2,115	)	$	—		$	17,539
Other unallocated expenses												64
Operating income after unallocated expenses												17,475
Interest income and expense and other, net												3,589
Income before income taxes												21,064
Provision for income taxes												7,879
Net income											$	13,185
Basic net income per share											$	0.14
Shares used in computing basic net income per share												97,291
Diluted net income per share											$	0.13
Shares used in computing diluted net income per share												101,054

\

SYBASE, INC.
CONSOLIDATED STATEMENT OF OPERATIONS BY SEGMENT
PROFORMA WITHOUT PURCHASE ACCOUNTING, COST OF RESTRUCTURE, AND STOCK COMPENSATION EXPENSE
FOR THE THREE MONTHS ENDED MARCH 31, 2004
(UNAUDITED)

(In thousands, except per share data)

	Infrastructure		iAnywhere		Financial						Consolidated
	Platform Group		Solutions, Inc.		Fusion, Inc.			Eliminations			Total
Revenues:
License fees
Infrastructure	$	43,380	$	40	$	—		$	—		$	43,420
Mobile and Embedded		5,052		8,340		—			—			13,392
E-Finance		102		—		991			—			1,093
Subtotal license fees		48,534		8,380		991			—			57,905
Intersegment license revenues		53		4,223		104			(4,380	)		—
Total license fees		48,587		12,603		1,095			(4,380	)		57,905
Services		119,069		2,626		3,559						125,254
Intersegment service revenues		—		6,533		1,235			(7,768	)		—
Total services		119,069		9,159		4,794			(7,768	)		125,254
Total revenues		167,656		21,762		5,889			(12,148	)		183,159
Total allocated costs and expenses before cost of restructure and amortization of customer lists and purchased technology		146,233		20,386		6,693			(12,148	)		161,164
Operating income (loss) before cost of restructure and amortization of customer lists and purchased technology		21,423		1,376		(804	)		—			21,995
Cost of restructure - 2004 Activity		125		—		—			—			125
Amortization of customer lists		—		—		500			—			500
Amortization of purchased technology		2,920		100		811			—			3,831
Operating income (loss) before unallocated costs	$	18,378	$	1,276	$	(2,115	)	$	—		$	17,539
Other unallocated expenses												64
Operating income after unallocated expenses												17,475
Interest income and expense and other, net												3,589
Income before income taxes												21,064
Provision for income taxes												7,879
Net income											$	13,185
Basic net income per share											$	0.14
Shares used in computing basic net income per share												97,291
Diluted net income per share											$	0.13
Shares used in computing diluted net income per share												101,054

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., and AvantGo 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.

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

	Three Months Ended
	March 31,
(Dollars in thousands)	2004			2003
Cash and cash equivalents, beginning of year	$	315,404		$	231,267
Cash flows from operating activities:
Net income		13,185			12,974
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		19,892			20,409
(Gain) Loss on disposal of assets		341			(267	)
Deferred income taxes		(1,324	)		(1,216	)
Amortization of deferred stock-based compensation		1,302			661
Changes in assets and liabilities:
Accounts receivable		31,864			52,519
Other current assets		(3,128	)		(412	)
Accounts payable		2,010			3,959
Accrued compensation and related expenses		(9,235	)		(7,980	)
Accrued income taxes		(1,321	)		(714	)
Other accrued liabilities		(13,235	)		(15,110	)
Deferred revenues		24,705			29,570
Other liabilities		1,126			1,116
Net cash provided by operating activities		66,182			95,509
Cash flows from investing activities:
(Increase) Decrease in restricted cash		(165	)		84
Purchases of available-for-sale cash investments		(25,336	)		(17,637	)
Maturities of available-for-sale cash investments		22,286			1,267
Sales of available-for-sale cash investments		45,561			36,014
Business combinations, net of cash acquired		—			(13,903	)
Purchases of property, equipment and improvements		(7,764	)		(10,482	)
Proceeds from sale of fixed assets		68			9
Capitalized software development costs		(8,157	)		(6,562	)
(Increase) Decrease in other assets		190			(2,541	)
Net cash provided by (used for) investing activities		26,683			(13,751	)
Cash flows from financing activities:
Net proceeds from the issuance of common stock and reissuance of treasury stock		16,950			10,077
Purchases of treasury stock		(53,946	)		(9,535	)
Net cash provided by (used for) financing activities		(36,996	)		542
Effect of exchange rate changes on cash		(817	)		5,538
Net increase in cash and cash equivalents		55,052			87,838
Cash and cash equivalents, end of period		370,456			319,105
Cash investments, end of period		216,202			136,383
Total cash, cash equivalents and cash investments, end of period	$	586,658		$	455,488