##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10-Q
  þ
    
    QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2009
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 FOR THE TRANSITION PERIOD FROM  TO
 COMMISSION FILE NUMBER: 1-16493
 SYBASE, INC.
  Delaware
    
    94-2951005(State of Incorporation)
    
    (I.R.S. Employer Identification No.)
 
 
 þ o
 o o
  Large accelerated filer þ
    
    Accelerated filer o
    

Non-accelerated
filer o
 o þ




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##### 



PageForward-Looking Statements
    
    
    2Part I: Financial InformationItem 1: Financial Statements (Unaudited)Condensed Consolidated Balance Sheets as of September 30, 2009 and December 31, 2008
    
    
    3Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2009 and 2008
    
    
    4Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2009 and 2008
    
    
    5Notes to Condensed Consolidated Financial Statements
    
    
    6Item 2: Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    25Item 3: Quantitative and Qualitative Disclosures of Market Risk
    
    
    39Item 4: Controls and Procedures
    
    
    39Part II: Other InformationItem 1: Legal Proceedings
    
    
    40Item 1 (A): Risk Factors
    
    
    40Item 2: Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    50Item 3: Defaults Upon Senior Securities
    
    
    51Item 4: Submission of Matters to a Vote of Security Holders
    
    
    51Item 5: Other Information
    
    
    51Item 6: Exhibits
    
    
    51Signatures
    
    
    52Exhibit Index
    
    
    53EX-10.1EX-31.1EX-31.2EX-32
  1




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##### Table of Contents



www.sec.gov
 www.sybase.com
  2




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##### Table of Contents



PART I: FINANCIAL INFORMATION
 
 ITEM 1: FINANCIAL STATEMENTS
  
  September 30,2009
    
    
    December 31,(In thousands, except share and per share data)
    
    (Unaudited)
    
    
    2008(1)Current assets:Cash and cash equivalents
    
    $
    906,937
    
    
    $
    611,364Short-term investments
    
    
    198,339
    
    
    
    8,689Total cash, cash equivalents and short-term investments
    
    
    1,105,276
    
    
    
    620,053Restricted cash
    
    
    17,973
    
    
    
    2,773Accounts receivable, net
    
    
    218,662
    
    
    
    270,400Deferred income taxes
    
    
    43,173
    
    
    
    45,524Prepaid income taxes
    
    
    9,610
    
    
    
    4,932Prepaid expenses and other current assets
    
    
    31,205
    
    
    
    34,208Total current assets
    
    
    1,425,899
    
    
    
    977,890Long-term investments
    
    
    77,447
    
    
    
    15,513Property, equipment and improvements, net
    
    
    59,067
    
    
    
    62,263Deferred income taxes
    
    
    3,671
    
    
    
    17,794Capitalized software, net
    
    
    83,973
    
    
    
    82,400Goodwill
    
    
    529,938
    
    
    
    527,151Other purchased intangibles, net
    
    
    93,818
    
    
    
    113,970Other assets
    
    
    39,146
    
    
    
    29,341Total assets
    
    $
    2,312,959
    
    
    $
    1,826,322Current liabilities:Accounts payable
    
    $
    25,966
    
    
    $
    26,300Accrued compensation and related expenses
    
    
    74,819
    
    
    
    80,031Accrued income taxes
    
    
    25,646
    
    
    
    17,562Other accrued liabilities
    
    
    124,253
    
    
    
    124,050Deferred revenue
    
    
    204,976
    
    
    
    211,903Convertible subordinated notes
    
    
    417,961
    
    
    
    Total current liabilities
    
    
    873,621
    
    
    
    459,846Other liabilities
    
    
    43,018
    
    
    
    44,788Deferred income taxes
    
    
    36,525
    
    
    
    11,898Long-term tax liability
    
    
    42,505
    
    
    
    32,082Long-term deferred revenue
    
    
    5,786
    
    
    
    4,535Convertible subordinated notes
    
    
    
    
    
    
    438,299Convertible senior notes
    
    
    326,455
    
    
    
    Commitments and contingent liabilitiesTemporary equity  convertible subordinated notes
    
    
    7,039
    
    
    
    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
and 79,803,211 outstanding (2008-105,337,362 shares issued and 79,571,991 outstanding)
    
    
    105
    
    
    
    105Additional paid-in capital
    
    
    1,153,012
    
    
    
    1,103,685Accumulated earnings
    
    
    437,905
    
    
    
    330,724Accumulated other comprehensive income
    
    
    56,925
    
    
    
    36,912Cost of 25,534,151 shares of treasury stock (2008-25,765,371 shares)
    
    
    (675,068
    )
    
    
    (641,647
    )Total Sybase, Inc. stockholders equity
    
    
    972,879
    
    
    
    829,779Noncontrolling interest
    
    
    5,131
    
    
    
    5,095Total equity
    
    
    978,010
    
    
    
    834,874Total liabilities and stockholders equity
    
    $
    2,312,959
    
    
    $
    1,826,322
 
 (1)
    
    As adjusted to reflect the adoption of Financial Accounting Standards Board
(FASB) amendments to existing guidance on convertible debt and noncontrolling interests. See Note
1  Basis of Presentation and Note 10  Convertible Notes.  3




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##### Table of Contents



Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,(Dollars in thousands, except per share data)
    
    2009
    
    
    2008(1)
    
    
    2009
    
    
    2008(1)Revenues:License fees
    
    $
    96,175
    
    
    $
    92,939
    
    
    $
    279,577
    
    
    $
    261,578Services
    
    
    144,400
    
    
    
    146,295
    
    
    
    418,961
    
    
    
    432,286Messaging
    
    
    52,844
    
    
    
    44,744
    
    
    
    140,351
    
    
    
    132,975Total revenues
    
    
    293,419
    
    
    
    283,978
    
    
    
    838,889
    
    
    
    826,839Costs and expenses:Cost of license fees
    
    
    18,206
    
    
    
    18,151
    
    
    
    44,671
    
    
    
    47,818Cost of services
    
    
    38,078
    
    
    
    40,225
    
    
    
    113,744
    
    
    
    122,185Cost of messaging
    
    
    35,619
    
    
    
    28,107
    
    
    
    90,203
    
    
    
    80,618Sales and marketing
    
    
    60,606
    
    
    
    70,347
    
    
    
    187,098
    
    
    
    212,912Product development and engineering
    
    
    33,508
    
    
    
    37,451
    
    
    
    104,187
    
    
    
    109,059General and administrative
    
    
    32,667
    
    
    
    32,831
    
    
    
    96,621
    
    
    
    102,969Amortization of other purchased intangibles
    
    
    3,804
    
    
    
    3,920
    
    
    
    11,283
    
    
    
    11,009Cost of restructure
    
    
    17
    
    
    
    39
    
    
    
    18
    
    
    
    58Total costs and expenses
    
    
    222,505
    
    
    
    231,071
    
    
    
    647,825
    
    
    
    686,628Operating income
    
    
    70,914
    
    
    
    52,907
    
    
    
    191,064
    
    
    
    140,211Interest income
    
    
    1,678
    
    
    
    5,779
    
    
    
    5,833
    
    
    
    19,856Interest expense and other, net
    
    
    (9,679
    )
    
    
    (7,234
    )
    
    
    (24,622
    )
    
    
    (20,939
    )Total other-than-temporary impairment losses
    
    
    (1,811
    )
    
    
    (3,267
    )
    
    
    (3,609
    )
    
    
    (9,552
    )Losses recognized in (reclassified from) other comprehensive income
    
    
    (1,919
    )
    
    
    
    
    
    
    (2,307
    )
    
    
    Total other-than-temporary impairment losses recognized in earnings
    
    
    (3,730
    )
    
    
    (3,267
    )
    
    
    (5,916
    )
    
    
    (9,552
    )Income before income taxes
    
    
    59,183
    
    
    
    48,185
    
    
    
    166,359
    
    
    
    129,576Provision for income taxes
    
    
    20,686
    
    
    
    16,054
    
    
    
    62,129
    
    
    
    45,986Net income
    
    $
    38,497
    
    
    $
    32,131
    
    
    $
    104,230
    
    
    $
    83,590Less: Net income (loss) attributable to the noncontrolling interest
    
    
    (20
    )
    
    
    21
    
    
    
    36
    
    
    
    (7
    )Net income attributable to Sybase, Inc.
    
    $
    38,517
    
    
    $
    32,110
    
    
    $
    104,194
    
    
    $
    83,597Basic net income per share attributable to Sybase, Inc. common stockholders
    
    $
    0.47
    
    
    $
    0.40
    
    
    $
    1.28
    
    
    $
    0.99Shares used in computing basic net income per share attributable to Sybase, Inc. common stockholders
    
    
    80,047
    
    
    
    79,245
    
    
    
    80,147
    
    
    
    82,868Diluted net income per share attributable to Sybase, Inc. common stockholders
    
    $
    0.43
    
    
    $
    0.37
    
    
    $
    1.19
    
    
    $
    0.93Shares used in computing diluted net income per share attributable to Sybase, Inc. common stockholders
    
    
    87,427
    
    
    
    86,797
    
    
    
    86,144
    
    
    
    88,115
 
 (1)
    
    As adjusted to reflect the adoption of FASB amendments to
existing guidance on convertible debt, noncontrolling interests, earnings per
share computations, and other-than-temporary impairment determinations of
investments. See Note 1  Basis of Presentation and Note 10  Convertible Notes.  4




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SYBASE, INC.
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 Nine Months EndedSeptember 30,(Dollars in thousands)
    
    2009
    
    
    2008(1)Cash flows from operating activities:Net income
    
    $
    104,230
    
    
    $
    83,590Adjustments to reconcile net income to net cash provided by operating activities:Depreciation and amortization
    
    
    75,083
    
    
    
    77,341Loss on disposal of assets
    
    
    53
    
    
    
    5Impairment of investment in auction rate securities
    
    
    5,916
    
    
    
    9,552Deferred income taxes
    
    
    12,436
    
    
    
    (3,876
    )Stock-based compensation  restricted stock
    
    
    9,208
    
    
    
    7,583Stock-based compensation  all other
    
    
    9,538
    
    
    
    9,262Tax benefit from stock-based compensation plans
    
    
    7,999
    
    
    
    9,323Excess tax benefit from stock-based compensation plans
    
    
    (7,568
    )
    
    
    (8,970
    )Imputed interest expense for convertible notes
    
    
    15,786
    
    
    
    13,262Amortization of note issuance costs
    
    
    1,522
    
    
    
    1,204Changes in assets and liabilities:Accounts receivable
    
    
    51,285
    
    
    
    11,003Prepaid income taxes
    
    
    (4,678
    )
    
    
    17,604Other current assets
    
    
    (12,099
    )
    
    
    (3,814
    )Other assets  operating
    
    
    (2,795
    )
    
    
    805Accounts payable
    
    
    (337
    )
    
    
    983Accrued compensation and related expenses
    
    
    (5,213
    )
    
    
    (212
    )Accrued income taxes
    
    
    18,506
    
    
    
    4,012Other accrued liabilities
    
    
    (963
    )
    
    
    (13,290
    )Deferred revenues
    
    
    (5,676
    )
    
    
    (6,276
    )Other liabilities
    
    
    (1,660
    )
    
    
    1,899Net cash provided by operating activities
    
    
    270,573
    
    
    
    210,990Cash flows from investing activities:(Increase) Decrease in restricted cash
    
    
    (159
    )
    
    
    83Purchases of investments
    
    
    (284,756
    )
    
    
    (16,332
    )Maturities of investments
    
    
    29,330
    
    
    
    35,870Sales of investments
    
    
    1,245
    
    
    
    80,982Business combinations, net of cash acquired
    
    
    
    
    
    
    (27,372
    )Purchases of property, equipment and improvements
    
    
    (16,349
    )
    
    
    (26,013
    )Proceeds from sale of property, equipment, and improvements
    
    
    85
    
    
    
    22Capitalized software development costs
    
    
    (33,982
    )
    
    
    (38,885
    )Decrease in other assets  investing
    
    
    18
    
    
    
    91Net cash provided by (used for) investing activities
    
    
    (304,568
    )
    
    
    8,446Cash flows from financing activities:Proceeds from the issuance of convertible senior notes, net of issuance costs
    
    
    389,384
    
    
    
    Extinguishment of convertible subordinated notes
    
    
    (50,120
    )
    
    
    Repayments of long-term obligations
    
    
    (1,043
    )
    
    
    (791
    )Net proceeds from the issuance of common stock and reissuance of treasury stock
    
    
    48,559
    
    
    
    47,711Purchases of treasury stock
    
    
    (85,049
    )
    
    
    (300,737
    )Excess tax benefit from stock-based compensation plans
    
    
    7,568
    
    
    
    8,970Net cash provided by (used for) financing activities
    
    
    309,299
    
    
    
    (244,847
    )Effect of exchange rate changes on cash
    
    
    20,269
    
    
    
    (20,698
    )Net increase (decrease) in cash and cash equivalents
    
    
    295,573
    
    
    
    (46,109
    )Cash and cash equivalents, beginning of year
    
    
    611,364
    
    
    
    604,808Cash and cash equivalents, end of period
    
    $
    906,937
    
    
    $
    558,699
 
 (1)
    
    As adjusted to reflect the adoption of Financial Accounting Standards Board (FASB)
amendments to existing guidance on convertible debt and noncontrolling interests. See Note 1 
Basis of Presentation and Note 10  Convertible Notes.  5




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Notes to Condensed Consolidated Financial Statements
 Basis of Presentation . ,
   1.
    
    Convertible debt2.
    
    Noncontrolling interests3.
    
    Earnings per share computations4.
    
    Business Combinations5.
    
    Assets acquired and liabilities assumed in a business combination that arise from
contingencies6.
    
    The determination of the useful life of intangible assets7.
    
    The effective date for application of fair value accounting standards to non-financial
assets and liabilities8.
    
    Disclosures about derivative instruments and hedging activities
    6




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December 31, 2008
    
    Adjustments
    
    December 31, 2008Consolidated Balance Sheet
    
    Convertible
    
    Noncontrolling
    
    Consolidated Balance Sheet(In thousands)
    
    As Previously Reported
    
    Subordinated Debt
    
    Interests
    
    Retrospectively AdjustedDeferred income taxes
    
    $
    26,474
    
    
    $
    (8,680
    )
    
    
    
    
    
    $
    17,794Other assets
    
    $
    29,715
    
    
    $
    (415
    )
    
    
    
    
    
    $
    29,300Minority interest
    
    $
    5,095
    
    
    
    
    
    
    $
    (5,095
    )
    
    
    Convertible subordinated notes
    
    $
    460,000
    
    
    $
    (21,701
    )
    
    
    
    
    
    $
    438,299Additional paid-in capital
    
    $
    1,054,517
    
    
    $
    49,168
    
    
    
    
    
    
    $
    1,103,685Accumulated earnings
    
    $
    367,286
    
    
    $
    (36,562
    )
    
    
    
    
    
    $
    330,724Noncontrolling interest
    
    
    
    
    
    
    
    
    
    $
    5,095
    
    
    $
    5,095
 December 31, 2008
    
    
    
    
    
    December 31, 2007Effect of
    
    
    
    
    
    
    
    
    
    Effect of(In thousands, except per share amounts)
    
    As Adjusted
    
    As Reported
    
    Change
    
    As Adjusted
    
    As Reported
    
    ChangeInterest expense and other, net and net impairment
losses recognized in earnings
    
    $
    (44,231
    )
    
    $
    (26,768
    )
    
    $
    (17,463
    )
    
    $
    (28,569
    )
    
    $
    (12,144
    )
    
    $
    (16,425
    )Minority interest
    
    
    
    
    
    $
    51
    
    
    $
    (51
    )
    
    
    
    
    
    $
    12
    
    
    $
    (12
    )Income before income taxes
    
    $
    189,638
    
    
    $
    207,152
    
    
    $
    (17,514
    )
    
    $
    173,515
    
    
    $
    189,952
    
    
    $
    (16,437
    )Provision for income taxes
    
    $
    61,452
    
    
    $
    68,581
    
    
    $
    (7,129
    )
    
    $
    34,388
    
    
    $
    41,102
    
    
    $
    (6,714
    )Net income
    
    $
    128,186
    
    
    $
    138,571
    
    
    $
    (10,385
    )
    
    $
    139,127
    
    
    $
    148,850
    
    
    $
    (9,723
    )Net loss attributable to the noncontrolling interest
    
    $
    51
    
    
    
    
    
    
    $
    51
    
    
    $
    12
    
    
    
    
    
    
    $
    12Net income attributable to Sybase, Inc.
    
    $
    128,237
    
    
    
    
    
    
    $
    128,237
    
    
    $
    139,139
    
    
    
    
    
    
    $
    139,139Basic net income per share
    
    
    
    
    
    $
    1.69
    
    
    $
    (1.69
    )
    
    
    
    
    
    $
    1.65
    
    
    $
    (1.65
    )Diluted net income per share
    
    
    
    
    
    $
    1.59
    
    
    $
    (1.59
    )
    
    
    
    
    
    $
    1.61
    
    
    $
    (1.61
    )Basic net income per share attributable to Sybase, Inc.
common stockholders
    
    $
    1.54
    
    
    
    
    
    
    $
    1.54
    
    
    $
    1.52
    
    
    
    
    
    
    $
    1.52Diluted net income per share attributable to Sybase,
Inc. common stockholders
    
    $
    1.46
    
    
    
    
    
    
    $
    1.46
    
    
    $
    1.49
    
    
    
    
    
    
    $
    1.49
 7




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##### Table of Contents



Three Months Ended
    
    
    
    
    
    
    
    
    
    
    
    
    
    Three Months EndeSeptember 30, 2008
    
    Retrospective Adjustments
    
    September 30, 2008Consolidated Statement
    
    Convertible
    
    
    
    
    
    
    
    
    
    Consolidated StatementOf Operations
    
    Subordinated
    
    Noncontrolling
    
    Earnings per
    
    Of Operations(In thousands, except per share data)
    
    As Previously Reported
    
    Debt
    
    Interests
    
    share
    
    Retrospectively AdjustedInterest expense and other, net and net
impairment losses recognized in earnings
    
    $
    (6,064
    )
    
    $
    (4,437
    )
    
    
    
    
    
    
    
    
    
    $
    (10,501
    )Minority interest
    
    $
    (21
    )
    
    
    
    
    
    $
    (21
    )
    
    
    
    
    
    
    Provision for income taxes
    
    $
    17,864
    
    
    $
    (1,810
    )
    
    
    
    
    
    
    
    
    
    $
    16,054Net income
    
    $
    34,737
    
    
    $
    (2,627
    )
    
    $
    21
    
    
    
    
    
    
    $
    32,131Less: Net income attributable to the
noncontrolling interest
    
    
    
    
    
    
    
    
    
    $
    (21
    )
    
    
    
    
    
    $
    (21
    )Net income attributable to Sybase, Inc.
    
    
    
    
    
    
    
    
    
    $
    32,110
    
    
    
    
    
    
    $
    32,110Basic net income per share
    
    $
    0.44
    
    
    
    
    
    
    $
    (0.44
    )
    
    
    
    
    
    
    Diluted net income per share
    
    $
    0.40
    
    
    
    
    
    
    $
    (0.40
    )
    
    
    
    
    
    
    Basic net income per share attributable
to Sybase, Inc. common stockholders
    
    
    
    
    
    $
    (0.03
    )
    
    $
    0.44
    
    
    $
    (0.01
    )
    
    $
    0.40Diluted net income per share
attributable to Sybase, Inc. common
stockholders
    
    
    
    
    
    $
    (0.03
    )
    
    $
    0.40
    
    
    
    
    
    
    $
    0.37
 Nine Months Ended
    
    
    
    
    
    
    
    
    
    
    
    
    
    Nine Months EndedSeptember 30, 2008
    
    Retrospective Adjustments
    
    September 30, 2008Consolidated Statement
    
    Convertible
    
    
    
    
    
    
    
    
    
    Consolidated StatementOf Operations
    
    Subordinated
    
    Noncontrolling
    
    Earnings per
    
    Of Operations(In thousands, except per share data)
    
    As Previously Reported
    
    Debt
    
    interests
    
    share
    
    Retrospectively AdjustedInterest expense and other, net and net
impairment losses recognized in earnings
    
    $
    (17,502
    )
    
    $
    (12,989
    )
    
    
    
    
    
    
    
    
    
    $
    (30,491
    )Minority interest
    
    $
    7
    
    
    
    
    
    
    $
    (7
    )
    
    
    
    
    
    
    Provision for income taxes
    
    $
    51,291
    
    
    $
    (5,305
    )
    
    
    
    
    
    
    
    
    
    $
    45,986Net income
    
    $
    91,281
    
    
    $
    (7,684
    )
    
    $
    (7
    )
    
    
    
    
    
    $
    83,590Add: Net loss attributable to the
noncontrolling interest
    
    
    
    
    
    
    
    
    
    $
    7
    
    
    
    
    
    
    $
    7Net income attributable to Sybase, Inc.
    
    
    
    
    
    
    
    
    
    $
    83,597
    
    
    
    
    
    
    $
    83,597Basic net income per share
    
    $
    1.10
    
    
    
    
    
    
    $
    (1.10
    )
    
    
    
    
    
    
    Diluted net income per share
    
    $
    1.03
    
    
    
    
    
    
    $
    (1.03
    )
    
    
    
    
    
    
    Basic net income per share attributable
to Sybase, Inc. common stockholders
    
    
    
    
    
    $
    (0.09
    )
    
    $
    1.10
    
    
    $
    (0.02
    )
    
    $
    0.99Diluted net income per share
attributable to Sybase, Inc. common
stockholders
    
    
    
    
    
    $
    (0.09
    )
    
    $
    1.03
    
    
    $
    (0.01
    )
    
    $
    0.93
 September 30, 2008
    
    
    
    
    
    
    
    
    
    September 30, 2008Consolidated Statement
    
    Retrospective Adjustments
    
    Consolidated StatementOf Cash Flows
    
    Convertible
    
    Noncontrolling
    
    Of Cash Flows(In thousands)
    
    As Previously Reported
    
    Subordinated Debt
    
    Interests
    
    Retrospectively AdjustedNet income
    
    $
    91,281
    
    
    $
    (7,684
    )
    
    $
    (7
    )
    
    $
    83,590Minority interest
    
    $
    (7
    )
    
    
    
    
    
    $
    7
    
    
    
    Deferred income taxes
    
    $
    1,429
    
    
    $
    (5,305
    )
    
    
    
    
    
    $
    (3,876
    )Imputed interest expense for
convertible notes
    
    
    
    
    
    $
    13,262
    
    
    
    
    
    
    $
    13,262Amortization of note issuance costs
    
    $
    1,477
    
    
    $
    (273
    )
    
    
    
    
    
    $
    1,204
  8




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##### Table of Contents



1.
    
    Determination of fair value when the volume and level of activity for an asset or
liability have significantly decreased and identifying transactions that are not orderly2.
    
    Recognition and presentation of other-than-temporary impairments3.
    
    Disclosures about fair value of financial instruments4.
    
    Subsequent events
   9




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##### Table of Contents



.
  Stock-Based Compensation
  Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,(In thousands, except per share data)
    
    2009
    
    
    2008
    
    
    2009
    
    
    2008Cost of services
    
    $
    383
    
    
    $
    347
    
    
    $
    1,155
    
    
    $
    1,012Cost of messaging
    
    
    152
    
    
    
    132
    
    
    
    443
    
    
    
    350Sales and marketing
    
    
    1,533
    
    
    
    1,429
    
    
    
    4,601
    
    
    
    4,145Product development and engineering
    
    
    786
    
    
    
    746
    
    
    
    2,399
    
    
    
    2,143General and administrative
    
    
    3,463
    
    
    
    3,098
    
    
    
    10,148
    
    
    
    9,195Total stock-based compensation expense included in costs and expenses
    
    
    6,317
    
    
    
    5,752
    
    
    
    18,746
    
    
    
    16,845Tax benefit related to stock-based compensation expense
    
    
    (1,858
    )
    
    
    (1,554
    )
    
    
    (5,336
    )
    
    
    (4,659
    )Stock-based compensation expense included in net income
    
    $
    4,459
    
    
    $
    4,198
    
    
    $
    13,410
    
    
    $
    12,186Reduction of net income per share attributable to Sybase, Inc.
common stockholders:Basic
    
    $
    0.05
    
    
    $
    0.05
    
    
    $
    0.16
    
    
    $
    0.14Diluted
    
    $
    0.05
    
    
    $
    0.05
    
    
    $
    0.15
    
    
    $
    0.14
  Net Income Per Share Attributable to Sybase, Inc Common Stockholders.
  10




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##### Table of Contents



1.
    
    Assume exercise of stock options, vesting of restricted stock, and stock appreciation
rights using the treasury stock method.2.
    
    Assume exercise of stock options and stock appreciation rights using the treasury stock
method but assume unvested restricted stock awards are not vested, and allocate earnings to
common shares and unvested restricted stock awards using the two-class method.
  Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,(In thousands, except per share data)
    
    2009
    
    
    2008 (1)
    
    
    2009
    
    

2008 (1)Basic:Net income attributable to Sybase, Inc.
    
    $
    38,517
    
    
    $
    32,110
    
    
    $
    104,194
    
    
    $
    83,597Less: Net income allocated to participating securities
    
    
    (680
    )
    
    
    (505
    )
    
    
    (1,770
    )
    
    
    (1,299
    )Net income attributable to Sybase, Inc. common stockholders  basic
    
    $
    37,837
    
    
    $
    31,605
    
    
    $
    102,424
    
    
    $
    82,298Basic net income per share attributable to Sybase, Inc. common stockholders
    
    $
    0.47
    
    
    $
    0.40
    
    
    $
    1.28
    
    
    $
    0.99Shares used in computing basic net income per share attributable to Sybase,
Inc. common stockholders
    
    
    80,047
    
    
    
    79,245
    
    
    
    80,147
    
    
    
    82,868Diluted:Net income attributable to Sybase, Inc.
    
    $
    38,517
    
    
    $
    32,110
    
    
    $
    104,194
    
    
    $
    83,597Less: Net income allocated to participating securities
    
    
    (624
    )
    
    
    
    
    
    
    (1,649
    )
    
    
    (1,223
    )Net income attributable to Sybase, Inc. common stockholders  diluted
    
    $
    37,893
    
    
    $
    32,110
    
    
    $
    102,545
    
    
    $
    82,374Diluted net income per share attributable to Sybase, Inc. common stockholders
    
    $
    0.43
    
    
    $
    0.37
    
    
    $
    1.19
    
    
    $
    0.93Shares used in computing basic net income per share attributable to Sybase,
Inc. common stockholders
    
    
    80,047
    
    
    
    79,245
    
    
    
    80,147
    
    
    
    82,868Dilutive effect of stock options, restricted stock and stock appreciation rights
    
    
    2,609
    
    
    
    2,809
    
    
    
    2,415
    
    
    
    2,617Dilutive effect of convertible subordinated debt issued in 2005
    
    
    5,468
    
    
    
    4,743
    
    
    
    4,214
    
    
    
    3,248Shares used in computing diluted net income per share attributable to Sybase,
Inc. common stockholders under treasury stock method
    
    
    88,124
    
    
    
    86,797
    
    
    
    86,776
    
    
    
    88,733Participating securities excluded under two-class method
    
    
    (697
    )
    
    
    N/A
    
    
    
    (632
    )
    
    
    (618
    )Shares used in computing diluted net income per share attributable to Sybase,
Inc. common stockholders under two-class method
    
    
    87,427
    
    
    
    N/A
    
    
    
    86,144
    
    
    
    88,115
 
 (1)
    
    As adjusted to reflect the adoption of FASB amendments to existing guidance on
convertible debt and noncontrolling interests, and earnings per share computations. See Note 1 
Basis of Presentation and Note 10  Convertible Notes.  11




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##### Table of Contents



Comprehensive Income (Loss)
 Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,(In thousands)
    
    2009
    
    

2008 (1)
    
    
    2009
    
    

2008 (1)Net income
    
    $
    38,497
    
    
    $
    32,131
    
    
    $
    104,230
    
    
    $
    83,590Foreign currency translation gains (losses)
    
    
    16,793
    
    
    
    (46,074
    )
    
    
    23,389
    
    
    
    (25,699
    )Decrease in noncredit other-than-temporary impairment losses
    
    
    1
    
    
    
    
    
    
    
    997
    
    
    
    Losses recognized in, or reclassified from, other comprehensive income
    
    
    1,919
    
    
    
    
    
    
    
    2,307
    
    
    
    Change in unrealized gains (losses) on all other marketable securities
    
    
    109
    
    
    
    (35
    )
    
    
    19
    
    
    
    835Comprehensive income (loss)
    
    
    57,319
    
    
    
    (13,978
    )
    
    
    130,942
    
    
    
    58,726Less: Comprehensive income (loss) attributable to noncontrolling interest
    
    
    (20
    )
    
    
    21
    
    
    
    36
    
    
    
    (7
    )Comprehensive income (loss) attributable to Sybase, Inc.
    
    $
    57,339
    
    
    $
    (13,999
    )
    
    $
    130,906
    
    
    $
    58,733
 
 (1)
    
    As adjusted to reflect the adoption of FASB amendments to existing guidance on
convertible debt and noncontrolling interests. See Note 1  Basis of Presentation and Note 10
 Convertible Notes.   September 30,
    
    
    December 31,2009
    
    
    2008Noncredit other-than-temporary impairment net of income taxes
    
    $
    (3,396
    )
    
    $
    Net unrealized gains (losses) on other marketable securities, net of income taxes
    
    
    19
    
    
    
    Other
    
    
    (237
    )
    
    
    (237
    )Foreign currency translation
    
    
    60,539
    
    
    
    37,149$
    56,925
    
    
    $
    36,912
 Segment Information
    12




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##### Table of Contents



Consolidated(In thousands)
    
    IPG
    
    
    iAS
    
    
    SY365
    
    
    Elimination
    
    
    TotalRevenues:License feesInfrastructure
    
    $
    69,585
    
    
    $
    9
    
    
    $
    264
    
    
    
    
    
    
    $
    69,858Mobile and Embedded
    
    
    12,373
    
    
    
    13,944
    
    
    
    
    
    
    
    
    
    
    
    26,317Subtotal license fees
    
    
    81,958
    
    
    
    13,953
    
    
    
    264
    
    
    
    
    
    
    
    96,175Intersegment license revenues
    
    
    33
    
    
    
    10,425
    
    
    
    8
    
    
    $
    (10,466
    )
    
    
    Total license fees
    
    
    81,991
    
    
    
    24,378
    
    
    
    272
    
    
    
    (10,466
    )
    
    
    96,175ServicesDirect service revenue
    
    
    134,488
    
    
    
    9,481
    
    
    
    431
    
    
    
    
    
    
    
    144,400Intersegment service revenues
    
    
    
    
    
    
    7,684
    
    
    
    
    
    
    
    (7,684
    )
    
    
    Total services
    
    
    134,488
    
    
    
    17,165
    
    
    
    431
    
    
    
    (7,684
    )
    
    
    144,400Messaging
    
    
    
    
    
    
    
    
    
    
    52,844
    
    
    
    
    
    
    
    52,844Total revenues
    
    
    216,479
    
    
    
    41,543
    
    
    
    53,547
    
    
    
    (18,150
    )
    
    
    293,419Total allocated costs and expenses before amortization of other
purchased intangibles, purchased technology, cost of restructure
and unallocated costs
    
    
    148,616
    
    
    
    28,724
    
    
    
    47,299
    
    
    
    (18,150
    )
    
    
    206,489Operating income before amortization of other purchased
intangibles, purchased technology, cost of restructure and
unallocated costs
    
    
    67,863
    
    
    
    12,819
    
    
    
    6,248
    
    
    
    
    
    
    
    86,930Amortization of other purchased intangibles
    
    
    500
    
    
    
    1,024
    
    
    
    2,280
    
    
    
    
    
    
    
    3,804Amortization of purchased technology
    
    
    1,233
    
    
    
    1,947
    
    
    
    1,180
    
    
    
    
    
    
    
    4,360Operating income before cost of restructure and unallocated costs
    
    
    66,130
    
    
    
    9,848
    
    
    
    2,788
    
    
    
    
    
    
    
    78,766Cost of restructure  2009 Activity
    
    
    17
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    17Operating income before unallocated costs
    
    
    66,113
    
    
    
    9,848
    
    
    
    2,788
    
    
    
    
    
    
    
    78,749Unallocated costs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,835Operating income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    70,914Interest income, interest expense and other, net, and total
other-than-temporary impairment losses recognized in earnings
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (11,731
    )Income before income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    59,183
  Consolidated(In thousands)
    
    IPG
    
    
    iAS
    
    
    SY365
    
    
    Elimination
    
    
    TotalRevenues:License feesInfrastructure
    
    $
    67,432
    
    
    $
    165
    
    
    $
    5
    
    
    
    
    
    
    $
    67,602Mobile and Embedded
    
    
    9,501
    
    
    
    15,836
    
    
    
    
    
    
    
    
    
    
    
    25,337Subtotal license fees
    
    
    76,933
    
    
    
    16,001
    
    
    
    5
    
    
    
    
    
    
    
    92,939Intersegment license revenues
    
    
    154
    
    
    
    7,904
    
    
    
    
    
    
    $
    (8,058
    )
    
    
    Total license fees
    
    
    77,087
    
    
    
    23,905
    
    
    
    5
    
    
    
    (8,058
    )
    
    
    92,939ServicesDirect service revenue
    
    
    135,115
    
    
    
    10,873
    
    
    
    307
    
    
    
    
    
    
    
    146,295Intersegment service revenues
    
    
    121
    
    
    
    8,435
    
    
    
    
    
    
    
    (8,556
    )
    
    
    Total services
    
    
    135,236
    
    
    
    19,308
    
    
    
    307
    
    
    
    (8,556
    )
    
    
    146,295MessagingDirect messaging revenue
    
    
    8
    
    
    
    
    
    
    
    44,736
    
    
    
    
    
    
    
    44,744Intersegment messaging revenues
    
    
    
    
    
    
    
    
    
    
    7
    
    
    
    (7
    )
    
    
    Total messaging
    
    
    8
    
    
    
    
    
    
    
    44,743
    
    
    
    (7
    )
    
    
    44,744Total revenues
    
    
    212,331
    
    
    
    43,213
    
    
    
    45,055
    
    
    
    (16,621
    )
    
    
    283,978Total allocated costs and expenses before amortization of other
purchased intangibles, purchased technology, cost of restructure
and unallocated costs
    
    
    158,548
    
    
    
    33,876
    
    
    
    40,498
    
    
    
    (16,621
    )
    
    
    216,301Operating income before amortization of other purchased
intangibles, purchased technology, cost of restructure and
unallocated costs
    
    
    53,783
    
    
    
    9,337
    
    
    
    4,557
    
    
    
    
    
    
    
    67,677Amortization of other purchased intangibles
    
    
    527
    
    
    
    1,023
    
    
    
    2,370
    
    
    
    
    
    
    
    3,920Amortization of purchased technology
    
    
    403
    
    
    
    3,594
    
    
    
    1,062
    
    
    
    
    
    
    
    5,059Operating income before cost of restructure and unallocated costs
    
    
    52,853
    
    
    
    4,720
    
    
    
    1,125
    
    
    
    
    
    
    
    58,698Cost of restructure  2008 Activity
    
    
    39
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    39Operating income before unallocated costs
    
    
    52,814
    
    
    
    4,720
    
    
    
    1,125
    
    
    
    
    
    
    
    58,659Unallocated costs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,752Operating income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    52,907Interest income, interest expense and other, net, and total
other-than-temporary impairment losses recognized in earnings
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,722
    )Income before income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    48,185
 
 (1)
    
    As adjusted to reflect the adoption of FASB amendments to existing guidance on
convertible debt and noncontrolling interests. See Note 1  Basis of Presentation and Note 10
 Convertible Notes. 13




---



##### Table of Contents



Consolidated(In thousands)
    
    IPG
    
    
    iAS
    
    
    SY365
    
    
    Elimination
    
    
    TotalRevenues:License feesInfrastructure
    
    $
    201,947
    
    
    $
    35
    
    
    $
    663
    
    
    
    
    
    
    $
    202,645Mobile and Embedded
    
    
    31,342
    
    
    
    45,581
    
    
    
    9
    
    
    
    
    
    
    
    76,932Subtotal license fees
    
    
    233,289
    
    
    
    45,616
    
    
    
    672
    
    
    
    
    
    
    
    279,577Intersegment license revenues
    
    
    87
    
    
    
    26,245
    
    
    
    26
    
    
    $
    (26,358
    )
    
    
    Total license fees
    
    
    233,376
    
    
    
    71,861
    
    
    
    698
    
    
    
    (26,358
    )
    
    
    279,577ServicesDirect service revenue
    
    
    389,524
    
    
    
    27,915
    
    
    
    1,522
    
    
    
    
    
    
    
    418,961Intersegment service revenues
    
    
    
    
    
    
    23,075
    
    
    
    
    
    
    
    (23,075
    )
    
    
    Total services
    
    
    389,524
    
    
    
    50,990
    
    
    
    1,522
    
    
    
    (23,075
    )
    
    
    418,961MessagingDirect messaging revenue
    
    
    6
    
    
    
    
    
    
    
    140,345
    
    
    
    
    
    
    
    140,351Intersegment messaging revenues
    
    
    
    
    
    
    
    
    
    
    5
    
    
    
    (5
    )
    
    
    Total messaging
    
    
    6
    
    
    
    
    
    
    
    140,350
    
    
    
    (5
    )
    
    
    140,351Total revenues
    
    
    622,906
    
    
    
    122,851
    
    
    
    142,570
    
    
    
    (49,438
    )
    
    
    838,889Total allocated costs and expenses before amortization of other
purchased intangibles, purchased technology, cost of restructure
and unallocated costs
    
    
    438,052
    
    
    
    88,734
    
    
    
    127,499
    
    
    
    (49,438
    )
    
    
    604,847Operating income before amortization of other purchased
intangibles, purchased technology, cost of restructure and
unallocated costs
    
    
    184,854
    
    
    
    34,117
    
    
    
    15,071
    
    
    
    
    
    
    
    234,042Amortization of other purchased intangibles
    
    
    1,548
    
    
    
    3,071
    
    
    
    6,664
    
    
    
    
    
    
    
    11,283Amortization of purchased technology
    
    
    1,389
    
    
    
    5,901
    
    
    
    3,432
    
    
    
    
    
    
    
    10,722Operating income before cost of restructure and unallocated costs
    
    
    181,917
    
    
    
    25,145
    
    
    
    4,975
    
    
    
    
    
    
    
    212,037Cost of restructure  2009 Activity
    
    
    18
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    18Operating income before unallocated costs
    
    
    181,899
    
    
    
    25,145
    
    
    
    4,975
    
    
    
    
    
    
    
    212,019Unallocated costs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    20,955Operating income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    191,064Interest income, interest expense and other, net, and total
other-than-temporary impairment losses recognized in earnings
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (24,705
    )Income before income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    166,359
  Consolidated(In thousands)
    
    IPG
    
    
    iAS
    
    
    SY365
    
    
    Elimination
    
    
    TotalRevenues:License feesInfrastructure
    
    $
    188,038
    
    
    $
    276
    
    
    $
    72
    
    
    
    
    
    
    $
    188,386Mobile and Embedded
    
    
    23,659
    
    
    
    49,533
    
    
    
    
    
    
    
    
    
    
    
    73,192Subtotal license fees
    
    
    211,697
    
    
    
    49,809
    
    
    
    72
    
    
    
    
    
    
    
    261,578Intersegment license revenues
    
    
    319
    
    
    
    19,703
    
    
    
    
    
    
    $
    (20,022
    )
    
    
    Total license fees
    
    
    212,016
    
    
    
    69,512
    
    
    
    72
    
    
    
    (20,022
    )
    
    
    261,578ServicesDirect service revenue
    
    
    398,717
    
    
    
    32,185
    
    
    
    1,384
    
    
    
    
    
    
    
    432,286Intersegment service revenues
    
    
    185
    
    
    
    25,160
    
    
    
    
    
    
    
    (25,345
    )
    
    
    Total services
    
    
    398,902
    
    
    
    57,345
    
    
    
    1,384
    
    
    
    (25,345
    )
    
    
    432,286MessagingDirect messaging revenue
    
    
    22
    
    
    
    
    
    
    
    132,953
    
    
    
    
    
    
    
    132,975Intersegment messaging revenues
    
    
    
    
    
    
    
    
    
    
    19
    
    
    
    (19
    )
    
    
    Total messaging
    
    
    22
    
    
    
    
    
    
    
    132,972
    
    
    
    (19
    )
    
    
    132,975Total revenues
    
    
    610,940
    
    
    
    126,857
    
    
    
    134,428
    
    
    
    (45,386
    )
    
    
    826,839Total allocated costs and expenses before amortization of other
purchased intangibles, purchased technology, cost of restructure
and unallocated costs
    
    
    467,841
    
    
    
    103,158
    
    
    
    120,908
    
    
    
    (45,386
    )
    
    
    646,521Operating income before amortization of other purchased
intangibles, purchased technology, cost of restructure and
unallocated costs
    
    
    143,099
    
    
    
    23,699
    
    
    
    13,520
    
    
    
    
    
    
    
    180,318Amortization of other purchased intangibles
    
    
    1,581
    
    
    
    3,069
    
    
    
    6,359
    
    
    
    
    
    
    
    11,009Amortization of purchased technology
    
    
    1,209
    
    
    
    7,904
    
    
    
    3,082
    
    
    
    
    
    
    
    12,195Operating income before cost of restructure and unallocated costs
    
    
    140,309
    
    
    
    12,726
    
    
    
    4,079
    
    
    
    
    
    
    
    157,114Cost of restructure  2008 Activity
    
    
    99
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    99Operating income before unallocated costs
    
    
    140,210
    
    
    
    12,726
    
    
    
    4,079
    
    
    
    
    
    
    
    157,015Unallocated costs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    16,804Operating income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    140,211Interest income, interest expense and other, net, and total
other-than-temporary impairment losses recognized in earnings
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (10,635
    )Income before income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    129,576
 
 (1)
    
    As adjusted to reflect the adoption of FASB amendments to existing guidance on
convertible debt and noncontrolling interests. See Note 1  Basis of Presentation and Note 10
 Convertible Notes. 14




---



##### Table of Contents



Goodwill and Intangible Assets
  Consolidated(In thousands)
    
    IPG
    
    
    iAS
    
    
    SY365
    
    
    TotalBalance at January 1, 2009
    
    $
    73,885
    
    
    $
    102,788
    
    
    $
    350,478
    
    
    $
    527,151Addition to goodwill recorded on Cable & Wireless acquisition
    
    
    
    
    
    
    
    
    
    
    840
    
    
    
    840Foreign currency translation adjustments & other
    
    
    702
    
    
    
    177
    
    
    
    1,068
    
    
    
    1,947Balance at September 30, 2009
    
    $
    74,587
    
    
    $
    102,965
    
    
    $
    352,386
    
    
    $
    529,938
  September 30, 2009
    
    
    December 31, 2008Gross
    
    
    
    
    
    
    Net
    
    
    Gross
    
    
    
    
    
    
    NetCarrying
    
    
    Accumulated
    
    
    Carrying
    
    
    Carrying
    
    
    Accumulated
    
    
    Carrying(In thousands)
    
    Amount
    
    
    Amortization
    
    
    Amount
    
    
    Amount
    
    
    Amortization
    
    
    AmountPurchased technology
    
    $
    170,813
    
    
    $
    (136,443
    )
    
    $
    34,370
    
    
    $
    169,758
    
    
    $
    (125,265
    )
    
    $
    44,493AvantGo tradenames
    
    
    3,100
    
    
    
    
    
    
    
    3,100
    
    
    
    3,100
    
    
    
    
    
    
    
    3,100XcelleNet tradenames
    
    
    4,000
    
    
    
    
    
    
    
    4,000
    
    
    
    4,000
    
    
    
    
    
    
    
    4,000Covenant not to compete
    
    
    319
    
    
    
    (319
    )
    
    
    
    
    
    
    319
    
    
    
    (271
    )
    
    
    48Customer lists
    
    
    116,627
    
    
    
    (64,279
    )
    
    
    52,348
    
    
    
    114,632
    
    
    
    (52,303
    )
    
    
    62,329Totals
    
    $
    294,859
    
    
    $
    (201,041
    )
    
    $
    93,818
    
    
    $
    291,809
    
    
    $
    (177,839
    )
    
    $
    113,970
  2010
    
    $
    25,2252011
    
    
    19,9152012
    
    
    13,3472013
    
    
    11,5442014
    
    
    1,519
  Litigation
  15




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##### Table of Contents



16




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##### Table of Contents



. Stock and Convertible Debt Repurchases .
 Restructuring
   (Dollars in thousands)
    
    2004
    
    
    2002
    
    
    2001Restructuring planAccrued liabilities at December 31, 2008
    
    $
    2,254
    
    
    $
    3,391
    
    
    $
    713Amounts paid and other
    
    
    (880
    )
    
    
    (1,897
    )
    
    
    (354
    )Accrued liabilities at September 30, 2009
    
    $
    1,374
    
    
    $
    1,494
    
    
    $
    359
 Convertible Notes
 Convertible Senior Notes Issued in 2009
    Conversion Events and Conversion Value
  17




---



##### Table of Contents



September 30,2009(In millions)Gross equity component of 2009 Notes
    
    $
    75.5Deferred tax asset reduction
    
    
    (29.0
    )Equity issuance costs
    
    
    (2.0
    )Equity component of 2009 Notes
    
    $
    44.5Principal amount of 2009 Notes
    
    $
    400.0Unamortized discount of 2009 Notes
    
    
    (73.5
    )Long term liability component of 2009 Notes
    
    $
    326.5
 Convertible Subordinated Notes Issued in 2005
    Conversion Events and Conversion Value
  18




---



##### Table of Contents



Partial Extinguishment
  September 30,
    
    
    December 31,2009
    
    

2008 (1)(In millions)Gross equity component of 2005 Notes
    
    $
    85.0
    
    
    $
    85.0Early extinguishment
    
    
    (15.8
    )
    
    
    Temporary equity
    
    
    (7.0
    )
    
    
    Deferred tax asset reduction
    
    
    (33.7
    )
    
    
    (34.0
    )Equity issuance costs
    
    
    (1.8
    )
    
    
    (1.8
    )Equity component of Notes
    
    $
    26.7
    
    
    $
    49.2Principal amount of 2005 Notes
    
    $
    425.0
    
    
    $
    460.0Unamortized discount of 2005 Notes
    
    
    (7.0
    )
    
    
    (21.7
    )Liability component of 2005 Notes
    
    $
    418.0
    
    
    $
    438.3
 
 (1)
    
    As adjusted to reflect the adoption of FASB amendments to existing guidance on
convertible debt. See Note 1  Basis of Presentation and Note 10  Convertible Notes.  Income Taxes
   19




---



##### Table of Contents



Cash, Cash Equivalents, and Short and Long-term Investments.
 Cash and Cash Equivalents
  Short and Long-Term Investments
    (1)
    
    Temporary;(2)
    
    Credit related other-than-temporary impairments (OTTI); or(3)
    
    Noncredit related OTTI.
 Temporary Changes in Fair Value
  Credit and Noncredit OTTI
  
    
    If a debt securitys market value is below amortized cost and the Company either intends
to sell the security or it is more likely than not that the Company will be required to
sell the security before its anticipated recovery, the Company records an OTTI charge to
earnings for the entire amount of the impairment.
    
    For the remaining debt securities, if an OTTI exists, the Company separates the OTTI
into two portions:
 20




---



##### Table of Contents




    
    Credit Loss Portion: The credit loss portion is the amount that the
Companys best estimate of the present value of cash flows expected to be collected
from the security falls below the amortized cost of the security. The credit loss
portion is recorded as a charge to earnings.
    
    NonCredit Loss Portion: The noncredit loss portion is the residual amount
of the OTTI, and is recorded as a separate component of other comprehensive income
(loss).
     Amortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    OTTI
    
    
    Fair Market(In thousands)
    
    Cost
    
    
    Gains
    
    
    Losses
    
    
    In OCI
    
    
    ValueSeptember 30, 2009:Cash and cash equivalents
    
    $
    906,934
    
    
    $
    3
    
    
    $
    
    
    
    $
    
    
    
    $
    906,937Short-term bank deposits
(maturities of one year or less)
    
    
    29,470
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    29,470Short-term corporate notes and bonds
(maturities of one year or less)
    
    
    108,748
    
    
    
    94
    
    
    
    (108
    )
    
    
    
    
    
    
    108,734Short-term U.S. government obligations
(maturities of one year or less)
    
    
    48,725
    
    
    
    23
    
    
    
    (13
    )
    
    
    
    
    
    
    48,735Trading securities
    
    
    11,400
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11,400Long-term corporate notes and bonds
(maturities over one year)
    
    
    20,323
    
    
    
    1
    
    
    
    (17
    )
    
    
    (3,396
    )
    
    
    16,911Long-term U.S. government obligations
(maturities over one year)
    
    
    60,398
    
    
    
    38
    
    
    
    (3
    )
    
    
    
    
    
    
    60,433Long-term equity security
    
    
    103
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    103$
    1,186,101
    
    
    $
    159
    
    
    $
    (141
    )
    
    $
    (3,396
    )
    
    $
    1,182,723December 31, 2008:Cash and cash equivalents
    
    $
    611,364
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    611,364Short-term bank deposits
(maturities of one year or less)
    
    
    51
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    51Trading securities
    
    
    8,638
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,638Long-term corporate notes and bonds
(maturities over one year)
    
    
    15,513
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    15,513$
    635,566
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    635,566
 21




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##### Table of Contents



In a Loss Position for
    
    
    In a Loss Position forLess Than 12 Months
    
    
    Greater Than 12 MonthsGross Unrealized
    
    
    
    
    
    
    Gross Unrealized(In thousands)
    
    Fair Value
    
    
    Losses
    
    
    Fair Value
    
    
    LossesCorporate notes and
bonds 1
    
    $
    49,982
    
    
    $
    (125
    )
    
    $
    12,797
    
    
    $
    (3,396
    )U.S government
obligations
    
    
    28,877
    
    
    
    (16
    )
    
    
    
    
    
    
    Totals
    
    $
    78,859
    
    
    $
    (141
    )
    
    $
    12,797
    
    
    $
    (3,396
    )
 
 1
    
    The unrealized losses shown in the Greater-than-12-Months column were recognized in
earnings in prior periods. Upon the April 1, 2009 adoption of the FASB amendments to
other-than-temporary impairment guidance, the Company reclassified the noncredit related
other-than-temporary impairment charges from retained earnings to other comprehensive income. See
Note 1  Basis of Presentation.     Cumulative OTTI in
    
    
    Unrealized (gain)
    
    
    
    
    
    
    Total accumulated(In thousands)
    
    Amortized Cost
    
    

earnings
    
    

loss
    
    
OTTI
loss in OCI
    
    
OCIBalance at April 1, 2009
    
    
    20,311
    
    
    
    3,589
    
    
    
    
    
    
    
    6,699
    
    
    
    6,699Unrealized gain
    
    
    
    
    
    
    
    
    
    
    (996
    )
    
    
    
    
    
    
    (996
    )Reclassification to earnings
    
    
    (388
    )
    
    
    388
    
    
    
    
    
    
    
    (388
    )
    
    
    (388
    )Balance at June 30, 2009
    
    
    19,923
    
    
    
    3,977
    
    
    
    (996
    )
    
    
    6,311
    
    
    
    5,315Unrealized gain
    
    
    
    
    
    
    
    
    
    
    (1
    )
    
    
    
    
    
    
    (1
    )OTTI recognized
    
    
    (1,441
    )
    
    
    1,441
    
    
    
    
    
    
    
    371
    
    
    
    371Reclassification to earnings
    
    
    (2,289
    )
    
    
    2,289
    
    
    
    
    
    
    
    (2,289
    )
    
    
    (2,289
    )Balance at September 30, 2009
    
    
    16,193
    
    
    
    7,707
    
    
    
    (997
    )
    
    
    4,393
    
    
    
    3,396
 22




---



##### Table of Contents



Fair Value Measurements
  
    
    Level 1  Quoted prices in active markets for identical assets or liabilities.
    
    Level 2  Inputs other than Level 1 that are
observable, either directly or indirectly, such as quoted
prices for similar assets or liabilities; quoted prices in
markets that are not active; or other inputs that are
observable or can be corroborated by observable market
data for substantially the full term of the assets or
liabilities.
    
    Level 3  Unobservable inputs that are supported
by little or no market activity and that are
significant to the fair value of the assets or
liabilities.
     Level 1
    
    
    Level 2
    
    
    Level 3
    
    
    TotalMoney market funds
    
    $
    645,305
    
    
    
    
    
    
    
    
    
    
    $
    645,305Trading securities
    
    
    11,400
    
    
    
    
    
    
    
    
    
    
    
    11,400Available-for-sale investments
    
    
    296,886
    
    
    
    
    
    
    $
    12,900
    
    
    
    309,786Total
    
    $
    953,591
    
    
    
    
    
    
    $
    12,900
    
    
    $
    966,491
  23




---



##### Table of Contents



Auction RateSecuritiesBalance at December 31, 2008
    
    $
    15,513Impairment loss included in net impairment losses recognized in earnings
    
    
    (5,916
    )Change in total other-than-temporary impairment recognized in accumulated other comprehensive income
    
    
    3,303Balance at September 30, 2009
    
    $
    12,900
  Recent Accounting Pronouncements
  Subsequent Events
 24




---



##### Table of Contents



ITEM 2: MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
  
    
    Executive Overview that discusses at a high level our operating results and some of the trends that affect our business.
    
    Significant changes since our most recent Annual Report on Form 10-K in the Critical Accounting Policies and Estimates
as we believe it is important to understanding the assumptions and judgments underlying our financial statements.
    
    Results of Operations that begins with an overview followed by a more detailed discussion of our revenue and expenses.
    
    Liquidity and Capital Resources which discusses key aspects of our statements of cash flows, changes in our balance
sheets and our financial commitments.
    Executive Overview
 Our Business
    Our Results
  25




---



##### Table of Contents



®
    Business Trends
       26




---



##### Table of Contents



Critical Accounting Policies and Estimates
   Recent Accounting Pronouncements
  Results of Operations
 Revenues
(Dollars in millions)
 Three Months ended September 30,
    
    Nine Months ended September 30,Percent
    
    
    
    
    
    
    
    
    
    Percent2009
    
    2008
    
    Change
    
    2009
    
    2008
    
    ChangeLicense fees by segment:IPG
    
    $
    82.0
    
    
    $
    77.1
    
    
    
    6
    %
    
    $
    233.4
    
    
    $
    212.0
    
    
    
    10
    %IAS
    
    
    24.4
    
    
    
    23.9
    
    
    
    2
    %
    
    
    71.9
    
    
    
    69.4
    
    
    
    4
    %SY365
    
    
    0.3
    
    
    
    0.0
    
    
    
    *
    
    
    
    0.7
    
    
    
    0.1
    
    
    
    600
    %Eliminations
    
    
    (10.5
    )
    
    
    (8.1
    )
    
    
    30
    %
    
    
    (26.4
    )
    
    
    (20.0
    )
    
    
    32
    %Total license fees
    
    $
    96.2
    
    
    $
    92.9
    
    
    
    3
    %
    
    $
    279.6
    
    
    $
    261.5
    
    
    
    7
    %Percentage of total revenues
    
    
    33
    %
    
    
    33
    %
    
    
    
    
    
    
    33
    %
    
    
    32
    %Services by segment:IPG
    
    $
    134.5
    
    
    $
    135.2
    
    
    
    (1
    %)
    
    $
    389.5
    
    
    $
    398.9
    
    
    
    (2
    %)IAS
    
    
    17.2
    
    
    
    19.3
    
    
    
    (11
    %)
    
    
    51.0
    
    
    
    57.3
    
    
    
    (11
    %)SY365
    
    
    0.4
    
    
    
    0.3
    
    
    
    33
    %
    
    
    1.5
    
    
    
    1.4
    
    
    
    7
    %Eliminations
    
    
    (7.7
    )
    
    
    (8.5
    )
    
    
    (9
    %)
    
    
    (23.1
    )
    
    
    (25.3
    )
    
    
    (9
    %)Total services
    
    $
    144.4
    
    
    $
    146.3
    
    
    
    (1
    %)
    
    $
    418.9
    
    
    $
    432.3
    
    
    
    (3
    %)Percentage of total revenues
    
    
    49
    %
    
    
    51
    %
    
    
    
    
    
    
    50
    %
    
    
    52
    %SY 365 messaging revenue
    
    $
    52.8
    
    
    $
    44.8
    
    
    
    18
    %
    
    $
    140.4
    
    
    $
    133.0
    
    
    
    6
    %SY 365 messaging as percentage of total revenues
    
    
    18
    %
    
    
    16
    %
    
    
    
    
    
    
    17
    %
    
    
    16
    %Total revenues
    
    $
    293.4
    
    
    $
    284.0
    
    
    
    3
    %
    
    $
    838.9
    
    
    $
    826.8
    
    
    
    1
    %
 
 *
    
    Not meaningful 27




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®
       28




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Geographical Revenues
(Dollars in millions)
 Three Months ended September 30,
    
    Nine Months ended September 30,Percent
    
    
    
    
    
    
    
    
    
    Percent2009
    
    2008
    
    Change
    
    2009
    
    2008
    
    ChangeNorth American
    
    $
    147.5
    
    
    $
    142.8
    
    
    
    3
    %
    
    $
    434.7
    
    
    $
    410.6
    
    
    
    6
    %Percentage of total revenues
    
    
    50
    %
    
    
    50
    %
    
    
    
    
    
    
    52
    %
    
    
    50
    %Total Outside North America
    
    $
    145.9
    
    
    $
    141.2
    
    
    
    3
    %
    
    $
    404.2
    
    
    $
    416.2
    
    
    
    (3
    %)Percentage of total revenues
    
    
    50
    %
    
    
    50
    %
    
    
    
    
    
    
    48
    %
    
    
    50
    %International: EMEA (Europe, Middle East and Africa)
    
    $
    101.5
    
    
    $
    96.8
    
    
    
    5
    %
    
    $
    279.7
    
    
    $
    292.2
    
    
    
    (4
    %)Percentage of total revenues
    
    
    35
    %
    
    
    34
    %
    
    
    
    
    
    
    33
    %
    
    
    35
    %Intercontinental: (Asia Pacific and Latin America)
    
    $
    44.4
    
    
    $
    44.4
    
    
    
    *
    
    
    $
    124.5
    
    
    $
    124.0
    
    
    
    *Percentage of total revenues
    
    
    15
    %
    
    
    16
    %
    
    
    
    
    
    
    15
    %
    
    
    15
    %Total revenues
    
    $
    293.4
    
    
    $
    284.0
    
    
    
    3
    %
    
    $
    838.9
    
    
    $
    826.8
    
    
    
    1
    %
 
 *
    
    Not meaningful     29




---



##### Table of Contents



30




---



##### Table of Contents



Costs and Expenses
(Dollars in millions)
 Three Months ended September 30,
    
    Nine Months ended September 30,Percent
    
    
    
    
    
    
    
    
    
    Percent2009
    
    2008
    
    Change
    
    2009
    
    2008
    
    ChangeCost of license fees
    
    $
    18.2
    
    
    $
    18.2
    
    
    
    *
    
    
    $
    44.7
    
    
    $
    47.8
    
    
    
    (6
    %)Percentage of license fees revenues
    
    
    19
    %
    
    
    20
    %
    
    
    
    
    
    
    16
    %
    
    
    18
    %Cost of services
    
    $
    38.1
    
    
    $
    40.2
    
    
    
    (5
    %)
    
    $
    113.7
    
    
    $
    122.2
    
    
    
    (7
    %)Percentage of services revenues
    
    
    26
    %
    
    
    27
    %
    
    
    
    
    
    
    27
    %
    
    
    28
    %Cost of messaging
    
    $
    35.6
    
    
    $
    28.1
    
    
    
    27
    %
    
    $
    90.2
    
    
    $
    80.6
    
    
    
    12
    %Percentage of messaging revenues
    
    
    67
    %
    
    
    63
    %
    
    
    
    
    
    
    64
    %
    
    
    61
    %Sales and marketing
    
    $
    60.6
    
    
    $
    70.3
    
    
    
    (14
    %)
    
    $
    187.1
    
    
    $
    212.9
    
    
    
    (12
    %)Percentage of total revenues
    
    
    21
    %
    
    
    25
    %
    
    
    
    
    
    
    22
    %
    
    
    26
    %Product development and engineering
    
    $
    33.5
    
    
    $
    37.5
    
    
    
    (11
    %)
    
    $
    104.2
    
    
    $
    109.1
    
    
    
    (4
    %)Percentage of total revenues
    
    
    11
    %
    
    
    13
    %
    
    
    
    
    
    
    12
    %
    
    
    13
    %General and administrative
    
    $
    32.7
    
    
    $
    32.8
    
    
    
    *
    
    
    $
    96.6
    
    
    $
    103.0
    
    
    
    (6
    %)Percentage of total revenues
    
    
    11
    %
    
    
    12
    %
    
    
    
    
    
    
    12
    %
    
    
    12
    %Amortization of other purchased intangibles
    
    $
    3.8
    
    
    $
    3.9
    
    
    
    (3
    %)
    
    $
    11.3
    
    
    $
    11.0
    
    
    
    3
    %Percentage of total revenues
    
    
    1
    %
    
    
    1
    %
    
    
    
    
    
    
    1
    %
    
    
    1
    %
 
 *
    
    Not meaningful Cost of License Fees.
 Cost of Services.
 Cost of Messaging
 Sales and Marketing.
 31




---



##### Table of Contents



Product Development and Engineering.
   General and Administrative.
 Amortization of Other Purchased Intangibles.
 Operating Income
 (Dollars in millions)
 Three Months ended September30,
    
    
    Nine Months ended September 30,Percent
    
    
    
    
    
    
    
    
    
    
    Percent2009
    
    
    2008
    
    
    Change
    
    
    2009
    
    
    2008
    
    
    ChangeOperating income by segment:IPG
    
    $
    66.1
    
    
    $
    52.8
    
    
    
    25
    %
    
    $
    181.9
    
    
    $
    140.2
    
    
    
    30
    %IAS
    
    
    9.8
    
    
    
    4.7
    
    
    
    109
    %
    
    
    25.1
    
    
    
    12.7
    
    
    
    98
    %SY365
    
    
    2.8
    
    
    
    1.1
    
    
    
    155
    %
    
    
    5.0
    
    
    
    4.1
    
    
    
    22
    %Unallocated costs
    
    
    (7.8
    )
    
    
    (5.7
    )
    
    
    37
    %
    
    
    (20.9
    )
    
    
    (16.8
    )
    
    
    24
    %Total operating income:
    
    $
    70.9
    
    
    $
    52.9
    
    
    
    34
    %
    
    $
    191.1
    
    
    $
    140.2
    
    
    
    36
    %Percentage of total revenues
    
    
    24
    %
    
    
    19
    %
    
    
    
    
    
    
    23
    %
    
    
    17
    %
  32




---



##### Table of Contents



Other Income (Expense), Net
 (Dollars in millions)
 Three Months ended September 30,
    
    
    Six Months ended September 30,Percent
    
    
    
    
    
    
    
    
    
    
    Percent2009
    
    
    2008(1)
    
    
    Change
    
    
    2009
    
    
    2008(1)
    
    
    ChangeInterest income
    
    $
    1.7
    
    
    $
    5.8
    
    
    
    (71
    %)
    
    $
    5.8
    
    
    $
    19.9
    
    
    
    (71
    %)Percentage of total revenues
    
    
    1
    %
    
    
    2
    %
    
    
    
    
    
    
    1
    %
    
    
    2
    %Interest expense and other, net
    
    $
    (9.7
    )
    
    $
    (7.2
    )
    
    
    35
    %
    
    $
    (24.6
    )
    
    $
    (20.9
    )
    
    
    18
    %Percentage of total revenues
    
    
    (3
    %)
    
    
    (3
    %)
    
    
    
    
    
    
    (3
    %)
    
    
    (3
    %)Impairment losses recognized in earnings
    
    $
    (3.7
    )
    
    $
    (3.3
    )
    
    
    12
    %
    
    $
    (5.9
    )
    
    $
    (9.6
    )
    
    
    (39
    %)Percentage of total revenues
    
    
    (1
    %)
    
    
    (1
    %)
    
    
    
    
    
    
    (1
    %)
    
    
    (1
    %)
 
 (1)
    
    As adjusted due to the adoption of amendments to existing guidance on
convertible debt, noncontrolling interests, and other-than-temporary impairment determinations of
investments. See Note 1  Basis of Presentation and Note 10  Convertible Notes.*
    
    Not meaningful    33




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##### Table of Contents



Provision for Income Taxes
 (Dollars in millions)
 Three Months ended September 30,
    
    
    Nine Months ended September 30,Percent
    
    
    
    
    
    
    
    
    
    
    Percent2009
    
    
    2008(1)
    
    
    Change
    
    
    2009
    
    
    2008(1)
    
    
    ChangeProvision for income taxes
    
    $
    20.7
    
    
    $
    16.1
    
    
    
    29
    %
    
    $
    62.1
    
    
    $
    46.0
    
    
    
    35
    %
 
 (1)
    
    As adjusted due to the adoption of amendments to existing guidance on
convertible debt. See Note 1  Basis of Presentation and Note 10  Convertible Notes.     34




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##### Table of Contents



Net Income Per Share Attributable to Sybase, Inc. Common Stockholders
 (Dollars and shares in millions, except per share data)
 Three Months ended September 30,

    
    
    Nine Months ended September 30,Percent
    
    
    
    
    
    
    
    
    
    
    Percent2009
    
    
    2008(1)
    
    
    Change
    
    
    2009
    
    
    2008(1)
    
    
    ChangeNet income attributable to Sybase, Inc.
    
    $
    38.5
    
    
    $
    32.1
    
    
    
    20
    %
    
    $
    104.2
    
    
    $
    83.6
    
    
    
    25
    %Percentage of total revenues
    
    
    13
    %
    
    
    11
    %
    
    
    
    
    
    
    12
    %
    
    
    10
    %Basic net income per share attributable to
Sybase, Inc. common stockholders
    
    $
    0.47
    
    
    $
    0.40
    
    
    
    18
    %
    
    $
    1.28
    
    
    $
    0.99
    
    
    
    29
    %Diluted net income per share attributable
to Sybase, Inc. common stockholders
    
    $
    0.43
    
    
    $
    0.37
    
    
    
    16
    %
    
    $
    1.19
    
    
    $
    0.93
    
    
    
    28
    %Shares used in computing basic net income
per share attributable to Sybase, Inc.
common stockholders
    
    
    80.0
    
    
    
    79.2
    
    
    
    1
    %
    
    
    80.1
    
    
    
    82.9
    
    
    
    (3
    %)Shares used in computing diluted net income
per share attributable to Sybase, Inc.
common stockholders
    
    
    87.4
    
    
    
    86.8
    
    
    
    1
    %
    
    
    86.1
    
    
    
    88.1
    
    
    
    (2
    %)
 
 (1)
    
    As adjusted due to the adoption of FASB amendments to existing guidance on
convertible debt, noncontrolling interests, and earnings per share computations. See Note 1 
Basis of Presentation and Note 10  Convertible Notes.*
    
    Not meaningful     Liquidity and Capital Resources
 (Dollars in millions)
 Nine Months EndedSeptember 30,
    
    
    Percent2009
    
    
    2008
    
    
    ChangeWorking capital
    
    $
    552.3
    
    
    $
    451.4
    
    
    
    22
    %Cash and cash equivalents
    
    $
    906.9
    
    
    $
    558.7
    
    
    
    62
    %Net cash provided by operating activities
    
    $
    270.6
    
    
    $
    211.0
    
    
    
    28
    %Net cash provided by (used for) investing activities
    
    $
    (304.6
    )
    
    $
    8.4
    
    
    
    *Net cash provided by (used for) financing activities
    
    $
    309.3
    
    
    $
    (244.8
    )
    
    
    *
 
 *
    
    Not meaningful 35




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##### Table of Contents



.
 36




---



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Working Capital
  Cash Flow
        37




---



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38




---



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ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES OF MARKET RISK
        
 ITEM 4: CONTROLS AND PROCEDURES
     39




---



##### Table of Contents



PART II: OTHER INFORMATION
 
 ITEM 1: LEGAL PROCEEDINGS
  
 ITEM 1 (A): RISK FACTORS
 Future Operating Results
  Significant variation in the timing and amount of our revenues may cause fluctuations in our
quarterly operating results and an accurate estimation of our revenues is difficult.
    Economic and credit market conditions in the U.S. and worldwide could adversely affect our
revenues.
  40




---



##### Table of Contents



If we fail to maintain or expand our relationships with strategic partners and indirect
distribution channels our license revenues could decline.
   System failures, delays, insufficient capacity and other problems could harm our reputation and
business, cause us to lose customers and expose us to customer liability.
    Industry consolidation and other competitive pressures could affect prices or demand for our
products and services, and our business may be adversely affected.
  41




---



##### Table of Contents



We may encounter difficulties in completing acquisitions or strategic relationships, and we may
incur acquisition-related charges that could adversely affect our operating results.
        The ability to rapidly develop and bring to market advanced products and services that are
successful is crucial to maintaining our competitive position.
  42




---



##### Table of Contents



If our existing customers cancel or fail to renew their technical support agreements, our technical
support revenues could be adversely affected.
  Pricing pressure in the mobile messaging market could adversely affect our operating results.
  Our mobile messaging customer contracts may not continue to generate revenues and margins at or
near our historical levels of revenues and margins from these customers and we rely on a limited
number of customers for most of our messaging revenue.
  Unanticipated delays or accelerations in our sales cycles could result in significant fluctuations
in our quarterly operating results.
  If we do not adapt to rapid technological change in the telecommunications industry, we could lose
customers or market share.
  Impairments in our investment portfolio may result in temporary and/or realized losses.
  43




---



##### Table of Contents



Restructuring activities and reorganizations in our sales model or business units may not succeed
in increasing revenues and operating results.
   Our results of operations may depend on the compatibility of our products with other software
developed by third parties.
  We are subject to risks arising from our international operations.
  
    
    changes in IT spending;
 44




---



##### Table of Contents




    
    the imposition of government controls;
    
    changes or limitations in trade protection laws;
    
    unfavorable changes in tax treaties or laws;
    
    natural disasters, public health risks, labor unrest, earnings expatriation
restrictions, misappropriation of intellectual property and/or weak intellectual
property protection;
    
    acts of terrorism, continued unrest and war in the Middle East and other factors,
   We may not receive significant revenues from our current research and development efforts for
several years, if at all.
  We might experience significant errors or security flaws in our products and services.
  We are subject to risks related to the terms of our 1.75% Convertible Subordinated Notes and our
3.50% Convertible Senior Notes
  45




---



##### Table of Contents



Unanticipated changes in our tax rates could affect our future financial results.
  46




---



##### Table of Contents



We face exposure to adverse movements in foreign currency exchange rates.
    Growing market acceptance of open source software could cause a decline in our revenues and
operating margins.
  Insufficient protection for our intellectual property rights may have a material adverse effect on
our results of operations or our ability to compete.
  47




---



##### Table of Contents



If third parties claim that we are in violation of their intellectual property rights, it could
have a negative impact on our results of operations or ability to compete.
   Laws and regulations affecting our customers and us and future laws and regulations to which they
or we may become subject may harm our business.
  48




---



##### Table of Contents



Our key personnel are critical to our business, and we cannot assure that they will remain with us.
  Our sales to government clients subject us to risks including early termination, audits,
investigations, sanctions and penalties.
  Changes in accounting and legal standards could adversely affect our future operating results.
    49




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##### Table of Contents



Our operations and financial results could be severely harmed by certain natural disasters.
  Provisions of our corporate documents have anti-takeover effects that could prevent a change in
control.
  
 ITEM 2: UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
   ISSUER PURCHASES OF EQUITY SECURITIES
 (d) Maximum(c) Total
    
    
    Number (orNumber of
    
    
    ApproximateShares (or
    
    
    Dollar Value)Units)
    
    
    of Shares (or(a) Total
    
    
    
    
    
    
    Purchased as
    
    
    Units) that MayNumber of
    
    
    (b) Average
    
    
    Part of Publicly
    
    
    Yet BeShares (or
    
    
    Price Paid per
    
    
    Announced
    
    
    PurchasedPeriod
    
    Units)
    
    
    Share (or Unit)
    
    
    Plans or
    
    
    Under the Plans(2009)
    
    Purchased (#)
    
    
    ($)
    
    
    Programs (#)
    
    
    or Programs ($)July 1  31
    
    
    
    
    
    
    1,973,500
    
    
    $
    35.47
    
    
    
    
    
    
    
    1,973,500
    
    
    $
    92,403,000August 1  31
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    September 1  30
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total
    
    
    
    
    
    
    1,973,500
    
    
    $
    35.47
    
    
    
    
    
    
    
    1,973,500
    
    
    $
    92,403,000
 50




---



##### Table of Contents



ITEM 3: DEFAULTS UPON SENIOR SECURITIES
  
 ITEM 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  
 ITEM 5: OTHER INFORMATION
  
 ITEM 6: EXHIBITS
   51




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##### Table of Contents



SIGNATURES
  November 6, 2009
    
    SYBASE, INC.By
    /s/ JEFFREY G. ROSSJeffrey G. RossSenior Vice President and Chief Financial Officer
(Principal Financial Officer) By
    /s/ KEITH JENSENKeith JensenVice President and Corporate Controller
(Principal Accounting Officer) 52




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EXHIBIT INDEX
 Exhibit No.
    
    Description10.1
    
    Sybase, Inc. Amended and Restated 2003 Stock Plan31.1
    
    Certification of Chief Executive Officer pursuant to
Securities Exchange Act Rule 13a-14 or 15d-14, as adopted
pursuant to Section 302(a) of the Sarbanes-Oxley Act of 200231.2
    
    Certification of Chief Financial Officer pursuant to
Securities Exchange Act Rule 13a-14 or 15d-14, as adopted
pursuant to Section 302(a) of the Sarbanes-Oxley Act of 200232
    
    Certification of Chief Executive Officer and Chief Financial
Officer pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
 53