##### 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 JUNE 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.
 (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
 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
    Smaller reporting company o(Do not check if a smaller reporting company)
 o þ




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##### 



PageForward-Looking Statements
    
    
    2Part I: Financial InformationItem 1: Financial Statements (Unaudited)Condensed Consolidated Balance Sheets as of June 30, 2009 and December 31, 2008
    
    
    3Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2009 and 2008
    
    
    4Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2009 and 2008
    
    
    5Notes to Condensed Consolidated Financial Statements
    
    
    6Item 2: Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    23Item 3: Quantitative and Qualitative Disclosures of Market Risk
    
    
    36Item 4: Controls and Procedures
    
    
    36Part II: Other InformationItem 1: Legal Proceedings
    
    
    37Item 1 (A): Risk Factors
    
    
    37Item 2: Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    47Item 3: Defaults Upon Senior Securities
    
    
    48Item 4: Submission of Matters to a Vote of Security Holders
    
    
    48Item 5: Other Information
    
    
    48Item 6: Exhibits
    
    
    48Signatures
    
    
    49Exhibit Index
    
    
    50EX-31.1EX-31.2EX-32
  1




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www.sec.gov
 www.sybase.com
  2




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##### Table of Contents



PART I: FINANCIAL INFORMATION
 
 ITEM 1:
    
    FINANCIAL STATEMENTS
 
 June 30,2009
    
    
    December 31,(In thousands, except share and per share data)
    
    (Unaudited)
    
    
    2008 (1)Current assets:Cash and cash equivalents
    
    $
    662,186
    
    
    $
    611,364Short-term cash investments
    
    
    121,910
    
    
    
    8,689Total cash, cash equivalents and short-term cash investments
    
    
    784,096
    
    
    
    620,053Restricted cash
    
    
    18,014
    
    
    
    2,773Accounts receivable, net
    
    
    235,699
    
    
    
    270,400Deferred income taxes
    
    
    40,977
    
    
    
    45,524Prepaid income taxes
    
    
    9,038
    
    
    
    4,932Prepaid expenses and other current assets
    
    
    14,780
    
    
    
    34,208Total current assets
    
    
    1,102,604
    
    
    
    977,890Long-term cash investments
    
    
    14,711
    
    
    
    15,513Property, equipment and improvements, net
    
    
    58,834
    
    
    
    62,263Deferred income taxes
    
    
    12,299
    
    
    
    17,794Capitalized software, net
    
    
    85,837
    
    
    
    82,400Goodwill
    
    
    528,433
    
    
    
    527,151Other purchased intangibles, net
    
    
    100,042
    
    
    
    113,970Other assets
    
    
    28,952
    
    
    
    29,341Total assets
    
    $
    1,931,712
    
    
    $
    1,826,322Current liabilities:Accounts payable
    
    $
    20,745
    
    
    $
    26,300Accrued compensation and related expenses
    
    
    64,543
    
    
    
    80,031Accrued income taxes
    
    
    19,233
    
    
    
    17,562Other accrued liabilities
    
    
    109,482
    
    
    
    124,050Deferred revenue
    
    
    226,830
    
    
    
    211,903Convertible subordinated notes
    
    
    447,556
    
    
    
    Total current liabilities
    
    
    888,389
    
    
    
    459,846Other liabilities
    
    
    43,222
    
    
    
    44,788Deferred income taxes
    
    
    10,075
    
    
    
    11,898Long-term tax liability
    
    
    39,350
    
    
    
    32,082Long-term deferred revenue
    
    
    4,215
    
    
    
    4,535Convertible subordinated notes
    
    
    
    
    
    
    438,299Commitments and contingent liabilitiesStockholders 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 81,081,591 outstanding (2008-105,337,362 shares issued and 79,571,991 outstanding)
    
    
    105
    
    
    
    105Additional paid-in capital
    
    
    1,121,766
    
    
    
    1,103,685Accumulated earnings
    
    
    399,388
    
    
    
    330,724Accumulated other comprehensive income
    
    
    38,104
    
    
    
    36,912Cost of 24,255,771 shares of treasury stock (2008-25,765,371 shares)
    
    
    (618,053
    )
    
    
    (641,647
    )Total Sybase, Inc. stockholders equity
    
    
    941,310
    
    
    
    829,779Noncontrolling interest
    
    
    5,151
    
    
    
    5,095Total equity
    
    
    946,461
    
    
    
    834,874Total liabilities and stockholders equity
    
    $
    1,931,712
    
    
    $
    1,826,322
 
 (1)
    
    As adjusted due to the implementation of FSP APB 14-1 and FAS 160. See Note 1 
Basis of Presentation and Note 10  Convertible Subordinated Notes.  3




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Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,(Dollars in thousands, except per share data)
    
    2009
    
    

2008 (1)
    
    
    2009
    
    

2008 (1)Revenues:License fees
    
    $
    94,126
    
    
    $
    90,515
    
    
    $
    183,402
    
    
    $
    168,639Services
    
    
    139,587
    
    
    
    146,594
    
    
    
    274,561
    
    
    
    285,991Messaging
    
    
    44,243
    
    
    
    45,604
    
    
    
    87,507
    
    
    
    88,231Total revenues
    
    
    277,956
    
    
    
    282,713
    
    
    
    545,470
    
    
    
    542,861Costs and expenses:Cost of license fees
    
    
    14,184
    
    
    
    15,129
    
    
    
    26,465
    
    
    
    29,666Cost of services
    
    
    38,837
    
    
    
    41,080
    
    
    
    75,666
    
    
    
    81,960Cost of messaging
    
    
    27,611
    
    
    
    27,403
    
    
    
    54,584
    
    
    
    52,511Sales and marketing
    
    
    62,278
    
    
    
    74,272
    
    
    
    126,492
    
    
    
    142,565Product development and engineering
    
    
    35,935
    
    
    
    36,046
    
    
    
    70,679
    
    
    
    71,608General and administrative
    
    
    32,092
    
    
    
    34,077
    
    
    
    63,954
    
    
    
    70,138Amortization of other purchased intangibles
    
    
    3,756
    
    
    
    3,573
    
    
    
    7,479
    
    
    
    7,089Cost (Reversal) of restructure
    
    
    11
    
    
    
    (8
    )
    
    
    1
    
    
    
    19Total costs and expenses
    
    
    214,704
    
    
    
    231,572
    
    
    
    425,320
    
    
    
    455,556Operating income
    
    
    63,252
    
    
    
    51,141
    
    
    
    120,150
    
    
    
    87,305Interest income
    
    
    1,979
    
    
    
    6,165
    
    
    
    4,154
    
    
    
    14,077Interest expense and other, net
    
    
    (5,663
    )
    
    
    (8,360
    )
    
    
    (14,942
    )
    
    
    (13,705
    )Total other-than-temporary impairment losses
    
    
    
    
    
    
    (3,015
    )
    
    
    (1,798
    )
    
    
    (6,285
    )Portion of loss recognized in other comprehensive income (before taxes)
    
    
    (388
    )
    
    
    
    
    
    
    (388
    )
    
    
    Total other-than-temporary impairment losses recognized in earnings
    
    
    (388
    )
    
    
    (3,015
    )
    
    
    (2,186
    )
    
    
    (6,285
    )Income before income taxes
    
    
    59,180
    
    
    
    45,931
    
    
    
    107,176
    
    
    
    81,392Provision for income taxes
    
    
    21,548
    
    
    
    16,177
    
    
    
    41,443
    
    
    
    29,933Net income
    
    $
    37,632
    
    
    $
    29,754
    
    
    $
    65,733
    
    
    $
    51,459Less: Net income (loss) attributable to the noncontrolling interest
    
    
    40
    
    
    
    (37
    )
    
    
    56
    
    
    
    (28
    )Net income attributable to Sybase, Inc.
    
    $
    37,592
    
    
    $
    29,791
    
    
    $
    65,677
    
    
    $
    51,487Basic net income per share attributable to Sybase, Inc. common stockholders
    
    $
    0.46
    
    
    $
    0.36
    
    
    $
    0.81
    
    
    $
    0.60Shares used in computing basic net income per share attributable to Sybase, Inc. common
stockholders
    
    
    80,585
    
    
    
    81,688
    
    
    
    80,197
    
    
    
    84,680Diluted net income per share attributable to Sybase, Inc. common stockholders
    
    $
    0.43
    
    
    $
    0.33
    
    
    $
    0.76
    
    
    $
    0.57Shares used in computing diluted net income per share attributable to Sybase, Inc. common
stockholders
    
    
    87,570
    
    
    
    87,753
    
    
    
    86,052
    
    
    
    89,656
 
 (1)
    
    As adjusted due to the implementation of FSP APB 14-1, FAS 160,
FSP EITF 03-6-1, and FSP FAS 115-2 and FAS 124-2. See Note 1  Basis of
Presentation and Note 10  Convertible Subordinated Notes.  4




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Six Months EndedJune 30,(Dollars in thousands)
    
    2009
    
    
    2008 (1)Cash flows from operating activities:Net income
    
    $
    65,733
    
    
    $
    51,459Adjustments to reconcile net income to net cash provided by operating activities:Depreciation and amortization
    
    
    46,381
    
    
    
    48,859(Gain) Loss on disposal of assets
    
    
    33
    
    
    
    (18
    )Impairment of investments recognized in earnings
    
    
    2,186
    
    
    
    6,285Deferred income taxes
    
    
    8,219
    
    
    
    (3,235
    )Stock-based compensation  restricted stock
    
    
    6,014
    
    
    
    4,835Stock-based compensation  all other
    
    
    6,415
    
    
    
    6,258Tax benefit from stock-based compensation plans
    
    
    5,481
    
    
    
    Excess tax benefit from stock-based compensation plans
    
    
    (5,410
    )
    
    
    (6,233
    )Imputed interest expense for convertible notes
    
    
    9,257
    
    
    
    8,737Amortization of note issuance costs
    
    
    797
    
    
    
    800Changes in assets and liabilities:Accounts receivable
    
    
    34,955
    
    
    
    6,315Prepaid income taxes
    
    
    (4,106
    )
    
    
    17,604Other current assets
    
    
    4,326
    
    
    
    (6,960
    )Other assets  operating
    
    
    (474
    )
    
    
    (696
    )Accounts payable
    
    
    (5,558
    )
    
    
    3,657Accrued compensation and related expenses
    
    
    (15,489
    )
    
    
    (5,514
    )Accrued income taxes
    
    
    8,938
    
    
    
    6,429Other accrued liabilities
    
    
    (15,736
    )
    
    
    (5,704
    )Deferred revenues
    
    
    14,607
    
    
    
    21,989Other liabilities
    
    
    (925
    )
    
    
    2,385Net cash provided by operating activities
    
    
    165,644
    
    
    
    157,252Cash flows from investing activities:Increase in restricted cash
    
    
    (200
    )
    
    
    (309
    )Purchases of cash investments
    
    
    (116,533
    )
    
    
    (14,767
    )Maturities of cash investments
    
    
    2,000
    
    
    
    32,027Sales of cash investments
    
    
    1,221
    
    
    
    80,982Purchases of property, equipment and improvements
    
    
    (9,912
    )
    
    
    (16,123
    )Proceeds from sale of property, equipment, and improvements
    
    
    8
    
    
    
    7Capitalized software development costs
    
    
    (22,303
    )
    
    
    (27,219
    )Decrease in other assets  investing
    
    
    12
    
    
    
    75Net cash provided by (used for) investing activities
    
    
    (145,707
    )
    
    
    54,673Cash flows from financing activities:Repayments of long-term obligations
    
    
    (856
    )
    
    
    (598
    )Net proceeds from the issuance of common stock and reissuance of treasury stock
    
    
    35,101
    
    
    
    33,279Purchases of treasury stock
    
    
    (15,049
    )
    
    
    (300,601
    )Excess tax benefit from stock-based compensation plans
    
    
    5,410
    
    
    
    6,233Net cash provided by (used for) financing activities
    
    
    24,606
    
    
    
    (261,687
    )Effect of exchange rate changes on cash
    
    
    6,279
    
    
    
    20,102Net increase (decrease) in cash and cash equivalents
    
    
    50,822
    
    
    
    (29,660
    )Cash and cash equivalents, beginning of year
    
    
    611,364
    
    
    
    604,808Cash and cash equivalents, end of period
    
    $
    662,186
    
    
    $
    575,148
 
 (1)
    
    As adjusted due to the implementation of FSP APB 14-1 and FAS 160. See Note 1 
Basis of Presentation and Note 10  Convertible Subordinated Notes.  5




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Notes to Condensed Consolidated Financial Statements
 Basis of Presentation . NonControlling Interests in
Consolidated Financial Statements, Determining Whether
Instruments Granted in Share-Based Payment Transactions Are Participating Securities ,
   1.
    
    FSP No. APB 14-1, Accounting for Convertible Debt Instruments that May be Settled in
Cash upon Conversion (Including Partial Cash Settlement) (FSP APB 14-1)2.
    
    FAS No. 160, NonControlling Interests in Consolidated Financial Statements(FAS 160)3.
    
    FSP Emerging Issues Task Force 03-6-1, Determining Whether Instruments Granted in
Share-Based Payment Transactions Are Participating Securities(FSP EITF 03-6-1)4.
    
    FAS No. 141 (Revised 2007), Business Combinations(FAS 141(R))5.
    
    FSP FAS No. 141(R)-1, Accounting for Assets Acquired and Liabilities Assumed in a
Business Combination That Arise from Contingencies (FSP FAS 141(R)-16.
    
    FSP FAS 142-3, Determination of Useful Life of Intangible Assets(FSP FAS 142-3)7.
    
    FSP No. FAS 157-2, Effective Date of FASB Statement No. 157 (FSP 157-2)8.
    
    FAS No. 161, Disclosures about Derivative Instruments and Hedging Activities (FAS
161)
     6




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December 31, 2008
    
    
    
    
    
    
    
    
    
    December 31, 2008Consolidated Balance Sheet
    
    Adjustments
    
    Consolidated Balance Sheet(In thousands)
    
    As Previously Reported
    
    FSP APB 14-1
    
    FAS 160
    
    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
    
    Effect of
    
    December 31, 2007
    
    Effect ofAs 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 EndedJune 30, 2008
    
    
    
    
    
    
    
    
    
    
    
    
    
    June 30, 2008Consolidated Statement
    
    
    
    
    
    
    
    
    
    
    
    
    
    Consolidated StatementOf Operations
    
    Retrospective Adjustments
    
    Of Operations(In thousands, except per share data)
    
    As Previously Reported
    
    FSP APB 14-1
    
    FAS 160
    
    FSP EITF 03-6-1
    
    Retrospectively AdjustedInterest expense and other, net and net
impairment losses recognized in earnings
    
    
    (7,041
    )
    
    
    (4,334
    )
    
    
    
    
    
    
    
    
    
    
    (11,375
    )Minority interest
    
    
    37
    
    
    
    
    
    
    
    (37
    )
    
    
    
    
    
    
    Provision for income taxes
    
    
    17,948
    
    
    
    (1,771
    )
    
    
    
    
    
    
    
    
    
    
    16,177Net income
    
    
    32,354
    
    
    
    (2,563
    )
    
    
    (37
    )
    
    
    
    
    
    
    29,754Add: Net loss attributable to the
noncontrolling interest
    
    
    
    
    
    
    
    
    
    
    37
    
    
    
    
    
    
    
    37Net income attributable to Sybase, Inc.
    
    
    
    
    
    
    
    
    
    
    29,791
    
    
    
    
    
    
    
    29,791Basic net income per share
    
    
    0.40
    
    
    
    
    
    
    
    (0.40
    )
    
    
    
    
    
    
    Diluted net income per share
    
    
    0.37
    
    
    
    
    
    
    
    (0.37
    )
    
    
    
    
    
    
    Basic net income per share attributable
to Sybase, Inc. common stockholders
    
    
    
    
    
    
    (0.04
    )
    
    
    0.40
    
    
    
    
    
    
    
    0.36Diluted net income per share
attributable to Sybase, Inc. common
stockholders
    
    
    
    
    
    
    (0.03
    )
    
    
    0.37
    
    
    
    (0.01
    )
    
    
    0.33
 Six Months Ended
    
    
    
    
    
    
    
    
    
    
    
    
    
    Six Months EndedJune 30, 2008
    
    
    
    
    
    
    
    
    
    
    
    
    
    June 30, 2008Consolidated Statement
    
    
    
    
    
    
    
    
    
    
    
    
    
    Consolidated StatementOf Operations
    
    Retrospective Adjustments
    
    Of Operations(In thousands, except per share data)
    
    As Previously Reported
    
    FSP APB 14-1
    
    FAS 160
    
    FSP EITF 03-6-1
    
    Retrospectively AdjustedInterest expense and other, net and net
impairment losses recognized in earnings
    
    
    (11,438
    )
    
    
    (8,552
    )
    
    
    
    
    
    
    
    
    
    
    (19,990
    )Minority interest
    
    
    28
    
    
    
    
    
    
    
    (28
    )
    
    
    
    
    
    
    Provision for income taxes
    
    
    33,427
    
    
    
    (3,494
    )
    
    
    
    
    
    
    
    
    
    
    29,933Net income
    
    
    56,545
    
    
    
    (5,058
    )
    
    
    (28
    )
    
    
    
    
    
    
    51,459Add: Net loss attributable to the
noncontrolling interest
    
    
    
    
    
    
    
    
    
    
    28
    
    
    
    
    
    
    
    28Net income attributable to Sybase, Inc.
    
    
    
    
    
    
    
    
    
    
    51,487
    
    
    
    
    
    
    
    51,487Basic net income per share
    
    
    0.67
    
    
    
    
    
    
    
    (0.67
    )
    
    
    
    
    
    
    Diluted net income per share
    
    
    0.63
    
    
    
    
    
    
    
    (0.63
    )
    
    
    
    
    
    
    Basic net income per share attributable
to Sybase, Inc. common stockholders
    
    
    
    
    
    
    (0.06
    )
    
    
    0.67
    
    
    
    (0.01
    )
    
    
    0.60Diluted net income per share
attributable to Sybase, Inc. common
stockholders
    
    
    
    
    
    
    (0.06
    )
    
    
    0.63
    
    
    
    
    
    
    
    0.57
 June 30, 2008
    
    
    
    
    
    
    
    
    
    June 30, 2008Consolidated Statement
    
    
    
    
    
    
    
    
    
    Consolidated StatementOf Cash Flows
    
    Retrospective Adjustments
    
    Of Cash Flows(In thousands)
    
    As Previously Reported
    
    FSP APB 14-1
    
    FAS 160
    
    Retrospectively AdjustedNet income
    
    
    56,545
    
    
    
    (5,058
    )
    
    
    (28
    )
    
    
    51,459Minority interest
    
    
    (28
    )
    
    
    
    
    
    
    28
    
    
    
    Deferred income taxes
    
    
    259
    
    
    
    (3,494
    )
    
    
    
    
    
    
    (3,235
    )Imputed interest expense for
convertible notes
    
    
    
    
    
    
    8,737
    
    
    
    
    
    
    
    8,737Amortization of note issuance costs
    
    
    985
    
    
    
    (185
    )
    
    
    
    
    
    
    800
 8




---



##### Table of Contents



1.
    
    FSP FAS 157-4, Determining Fair Value When the Volume and Level of Activity for the
Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not
Orderly(FSP FAS 157-4)2.
    
    FSP FAS 115-2 and FAS 124-2 Recognition and Presentation of Other-Than-Temporary
Impairments (FSP FAS 115-2 and FAS 124-2)3.
    
    FSP FAS 107-1 and APB 28-1 Disclosures About Fair Value of Financial Instruments(FSP
FAS 107-1 and APB 28-1)4.
    
    FAS No. 165, Subsequent Events(FAS 165)
    9




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##### Table of Contents



.
 Stock-Based Compensation .
  Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,(In thousands, except per share data)
    
    2009
    
    
    2008
    
    
    2009
    
    
    2008Cost of services
    
    $
    430
    
    
    $
    306
    
    
    $
    772
    
    
    $
    665Cost of messaging
    
    
    153
    
    
    
    127
    
    
    
    291
    
    
    
    218Sales and marketing
    
    
    1,668
    
    
    
    1,360
    
    
    
    3,068
    
    
    
    2,716Product development and engineering
    
    
    895
    
    
    
    733
    
    
    
    1,613
    
    
    
    1,397General and administrative
    
    
    3,533
    
    
    
    2,856
    
    
    
    6,685
    
    
    
    6,097Stock-based compensation expense included in total costs and expenses
    
    
    6,679
    
    
    
    5,382
    
    
    
    12,429
    
    
    
    11,093Tax benefit related to stock-based compensation expense
    
    
    (1,873
    )
    
    
    (1,480
    )
    
    
    (3,478
    )
    
    
    (3,105
    )Stock-based compensation expense included in net income
    
    $
    4,806
    
    
    $
    3,902
    
    
    $
    8,951
    
    
    $
    7,988Reduction of net income per share attributable to Sybase, Inc.
common stockholders:Basic
    
    $
    0.06
    
    
    $
    0.05
    
    
    $
    0.11
    
    
    $
    0.09Diluted
    
    $
    0.05
    
    
    $
    0.04
    
    
    $
    0.10
    
    
    $
    0.09
  Net income per share attributable to Sybase, Inc common stockholders.
  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 participating securities (unvested restricted stock) are not vested and
allocate earnings to common shares and participating securities using the two-class method.
 10




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##### Table of Contents



Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,(In thousands, except per share data)
    
    2009
    
    

2008 (1)
    
    
    2009
    
    

2008 (1)Basic:Net income attributable to Sybase, Inc.
    
    $
    37,592
    
    
    $
    29,791
    
    
    $
    65,677
    
    
    $
    51,487Less: Net income allocated to participating securities
    
    
    (643
    )
    
    
    (458
    )
    
    
    (1,094
    )
    
    
    (795
    )Net income attributable to Sybase, Inc. common stockholders  basic
    
    $
    36,949
    
    
    $
    29,333
    
    
    $
    64,583
    
    
    $
    50,692Basic net income per share attributable to Sybase, Inc. common stockholders
    
    $
    0.46
    
    
    $
    0.36
    
    
    $
    0.81
    
    
    $
    0.60Shares used in computing basic net income per share attributable to Sybase,
Inc. common stockholders
    
    
    80,585
    
    
    
    81,688
    
    
    
    80,197
    
    
    
    84,680Diluted:Net income attributable to Sybase, Inc.
    
    $
    37,592
    
    
    $
    29,791
    
    
    $
    65,677
    
    
    $
    51,487Less: Net income allocated to participating securities
    
    
    
    
    
    
    (427
    )
    
    
    
    
    
    
    Net income attributable to Sybase, Inc. common stockholders  diluted
    
    $
    37,592
    
    
    $
    29,364
    
    
    $
    65,677
    
    
    $
    51,487Diluted net income per share attributable to Sybase, Inc. common stockholders
    
    $
    0.43
    
    
    $
    0.33
    
    
    $
    0.76
    
    
    $
    0.57Shares used in computing basic net income per share attributable to Sybase,
Inc. common stockholders
    
    
    80,585
    
    
    
    81,688
    
    
    
    80,197
    
    
    
    84,680Dilutive effect of stock options, restricted stock and stock appreciation rights
    
    
    2,445
    
    
    
    2,015
    
    
    
    2,268
    
    
    
    2,476Dilutive effect of convertible subordinated debt
    
    
    4,540
    
    
    
    4050
    
    
    
    3,587
    
    
    
    2,500Shares used in computing diluted net income per share attributable to Sybase,
Inc. common stockholders
    
    
    87,570
    
    
    
    87,753
    
    
    
    86,052
    
    
    
    89,656
 
 (1)
    
    As adjusted as noted above and due to the implementation of FSP APB 14-1, and FAS
160, and FSP EITF 03-6-1. See Note 1  Basis of Presentation and Note 10  Convertible
Subordinated Notes.  Comprehensive Income
 Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,(In thousands)
    
    2009
    
    

2008 (1)
    
    
    2009
    
    

2008 (1)Net income
    
    $
    37,632
    
    
    $
    29,754
    
    
    $
    65,733
    
    
    $
    51,459Foreign currency translation gains
    
    
    21,352
    
    
    
    494
    
    
    
    6,597
    
    
    
    20,375Decrease in noncredit other-than-temporary impairment losses
    
    
    996
    
    
    
    
    
    
    
    996
    
    
    
    Portion of loss recognized in other comprehensive income (before taxes)
    
    
    388
    
    
    
    
    
    
    
    388
    
    
    
    Change in unrealized gains/(losses) on all other marketable securities
    
    
    (85
    )
    
    
    1,046
    
    
    
    (90
    )
    
    
    870Comprehensive income
    
    
    60,283
    
    
    
    31,294
    
    
    
    73,624
    
    
    
    72,704Less: Comprehensive income (loss) attributable to noncontrolling interest
    
    
    40
    
    
    
    (37
    )
    
    
    56
    
    
    
    (28
    )Comprehensive income attributable to Sybase, Inc.
    
    $
    60,243
    
    
    $
    31,331
    
    
    $
    73,568
    
    
    $
    72,732
 
 (1)
    
    As adjusted due to the implementation of FSP APB 14-1 and FAS 160. See Note 1 
Basis of Presentation and Note 10  Convertible Subordinated Notes.  11




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##### Table of Contents



June 30,
    
    
    December 31,2009
    
    
    2008Noncredit other-than-temporary impairment 
net of income taxes
    
    $
    (5,315
    )
    
    $
    Net unrealized gains (losses) on other marketable securities, net of income taxes
    
    
    (90
    )
    
    
    FAS 158 unrecognized components
    
    
    (237
    )
    
    
    (237
    )Foreign currency translation
    
    
    43,746
    
    
    
    37,149$
    38,104
    
    
    $
    36,912
 Segment Information
     Consolidated(In thousands)
    
    IPG
    
    
    iAS
    
    
    SY365
    
    
    Elimination
    
    
    TotalRevenues:License feesInfrastructure
    
    $
    66,978
    
    
    $
    13
    
    
    $
    27
    
    
    
    
    
    
    $
    67,018Mobile and Embedded
    
    
    8,663
    
    
    
    18,445
    
    
    
    
    
    
    
    
    
    
    
    27,108Subtotal license fees
    
    
    75,641
    
    
    
    18,458
    
    
    
    27
    
    
    
    
    
    
    
    94,126Intersegment license revenues
    
    
    26
    
    
    
    7,235
    
    
    
    8
    
    
    $
    (7,269
    )
    
    
    Total license fees
    
    
    75,667
    
    
    
    25,693
    
    
    
    35
    
    
    
    (7,269
    )
    
    
    94,126ServicesDirect service revenue
    
    
    129,907
    
    
    
    8,956
    
    
    
    724
    
    
    
    
    
    
    
    139,587Intersegment service revenues
    
    
    
    
    
    
    7,860
    
    
    
    
    
    
    
    (7,860
    )
    
    
    Total services
    
    
    129,907
    
    
    
    16,816
    
    
    
    724
    
    
    
    (7,860
    )
    
    
    139,587MessagingDirect messaging revenue
    
    
    6
    
    
    
    
    
    
    
    44,237
    
    
    
    
    
    
    
    44,243Intersegment messaging revenues
    
    
    
    
    
    
    
    
    
    
    5
    
    
    
    (5
    )
    
    
    Total messaging
    
    
    6
    
    
    
    
    
    
    
    44,242
    
    
    
    (5
    )
    
    
    44,243Total revenues
    
    
    205,580
    
    
    
    42,509
    
    
    
    45,001
    
    
    
    (15,134
    )
    
    
    277,956Total allocated costs and expenses before amortization of other
purchased intangibles, purchased technology, cost of restructure
and unallocated costs
    
    
    145,220
    
    
    
    29,574
    
    
    
    40,046
    
    
    
    (15,134
    )
    
    
    199,706Operating income before amortization of other purchased
intangibles, purchased technology, cost of restructure and
unallocated costs
    
    
    60,360
    
    
    
    12,935
    
    
    
    4,955
    
    
    
    
    
    
    
    78,250Amortization of other purchased intangibles
    
    
    521
    
    
    
    1,024
    
    
    
    2,211
    
    
    
    
    
    
    
    3,756Amortization of purchased technology
    
    
    78
    
    
    
    1,944
    
    
    
    1,139
    
    
    
    
    
    
    
    3,161Operating income before cost of restructure and unallocated costs
    
    
    59,761
    
    
    
    9,967
    
    
    
    1,605
    
    
    
    
    
    
    
    71,333Cost of
restructure - 2009 Activity
    
    
    11
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11Operating income before unallocated costs
    
    
    59,750
    
    
    
    9,967
    
    
    
    1,605
    
    
    
    
    
    
    
    71,322Unallocated costs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,070Operating income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    63,252Interest income, interest expense and other, net, and total
other-than-temporary impairment losses recognized in earnings
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,072
    )Income before income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    59,180
 12




---



##### Table of Contents



Consolidated(In thousands)
    
    IPG
    
    
    iAS
    
    
    SY365
    
    
    Elimination
    
    

Total (1)Revenues:License feesInfrastructure
    
    $
    64,228
    
    
    $
    53
    
    
    $
    54
    
    
    
    
    
    
    $
    64,335Mobile and Embedded
    
    
    7,920
    
    
    
    18,260
    
    
    
    
    
    
    
    
    
    
    
    26,180Subtotal license fees
    
    
    72,148
    
    
    
    18,313
    
    
    
    54
    
    
    
    
    
    
    
    90,515Intersegment license revenues
    
    
    103
    
    
    
    6,600
    
    
    
    
    
    
    $
    (6,703
    )
    
    
    Total license fees
    
    
    72,251
    
    
    
    24,913
    
    
    
    54
    
    
    
    (6,703
    )
    
    
    90,515ServicesDirect service revenue
    
    
    135,469
    
    
    
    10,619
    
    
    
    506
    
    
    
    
    
    
    
    146,594Intersegment service revenues
    
    
    58
    
    
    
    8,600
    
    
    
    
    
    
    
    (8,658
    )
    
    
    Total services
    
    
    135,527
    
    
    
    19,219
    
    
    
    506
    
    
    
    (8,658
    )
    
    
    146,594MessagingDirect messaging revenue
    
    
    6
    
    
    
    
    
    
    
    45,598
    
    
    
    
    
    
    
    45,604Intersegment messaging revenues
    
    
    
    
    
    
    
    
    
    
    12
    
    
    
    (12
    )
    
    
    Total messaging
    
    
    6
    
    
    
    
    
    
    
    45,610
    
    
    
    (12
    )
    
    
    45,604Total revenues
    
    
    207,784
    
    
    
    44,132
    
    
    
    46,170
    
    
    
    (15,373
    )
    
    
    282,713Total allocated costs and expenses before amortization of other
purchased intangibles, purchased technology, cost of restructure
and unallocated costs
    
    
    158,429
    
    
    
    34,634
    
    
    
    41,346
    
    
    
    (15,373
    )
    
    
    219,036Operating income before amortization of other purchased
intangibles, purchased technology, cost of restructure and
unallocated costs
    
    
    49,355
    
    
    
    9,498
    
    
    
    4,824
    
    
    
    
    
    
    
    63,677Amortization of other purchased intangibles
    
    
    527
    
    
    
    1,023
    
    
    
    2,023
    
    
    
    
    
    
    
    3,573Amortization of purchased technology
    
    
    403
    
    
    
    2,159
    
    
    
    1,027
    
    
    
    
    
    
    
    3,589Operating income before cost of restructure and unallocated costs
    
    
    48,425
    
    
    
    6,316
    
    
    
    1,774
    
    
    
    
    
    
    
    56,515Cost of
restructure - 2008 Activity
    
    
    33
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    33Operating income before unallocated costs
    
    
    48,392
    
    
    
    6,316
    
    
    
    1,774
    
    
    
    
    
    
    
    56,482Unallocated costs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,341Operating income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    51,141Interest income, interest expense and other, net, and total
other-than-temporary impairment losses recognized in earnings
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,210
    )Income before income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    45,931
 
 (1)
    
    As adjusted due to the implementation of FSP APB 14-1 and FAS 160. See Note 1 
Basis of Presentation and Note 10  Convertible Subordinated Notes.  Consolidated(In thousands)
    
    IPG
    
    
    iAS
    
    
    SY365
    
    
    Elimination
    
    
    TotalRevenues:License feesInfrastructure
    
    $
    132,362
    
    
    $
    26
    
    
    $
    399
    
    
    
    
    
    
    $
    132,787Mobile and Embedded
    
    
    18,968
    
    
    
    31,637
    
    
    
    10
    
    
    
    
    
    
    
    50,615Subtotal license fees
    
    
    151,330
    
    
    
    31,663
    
    
    
    409
    
    
    
    
    
    
    
    183,402Intersegment license revenues
    
    
    55
    
    
    
    15,820
    
    
    
    17
    
    
    $
    (15,892
    )
    
    
    Total license fees
    
    
    151,385
    
    
    
    47,483
    
    
    
    426
    
    
    
    (15,892
    )
    
    
    183,402ServicesDirect service revenue
    
    
    255,036
    
    
    
    18,434
    
    
    
    1,091
    
    
    
    
    
    
    
    274,561Intersegment service revenues
    
    
    
    
    
    
    15,391
    
    
    
    
    
    
    
    (15,391
    )
    
    
    Total services
    
    
    255,036
    
    
    
    33,825
    
    
    
    1,091
    
    
    
    (15,391
    )
    
    
    274,561MessagingDirect messaging revenue
    
    
    6
    
    
    
    
    
    
    
    87,501
    
    
    
    
    
    
    
    87,507Intersegment messaging revenues
    
    
    
    
    
    
    
    
    
    
    5
    
    
    
    (5
    )
    
    
    Total messaging
    
    
    6
    
    
    
    
    
    
    
    87,506
    
    
    
    (5
    )
    
    
    87,507Total revenues
    
    
    406,427
    
    
    
    81,308
    
    
    
    89,023
    
    
    
    (31,288
    )
    
    
    545,470Total allocated costs and expenses before amortization of other
purchased intangibles, purchased technology, cost of restructure
and unallocated costs
    
    
    289,436
    
    
    
    60,011
    
    
    
    80,199
    
    
    
    (31,288
    )
    
    
    398,358Operating income before amortization of other purchased
intangibles, purchased technology, cost of restructure and
unallocated costs
    
    
    116,991
    
    
    
    21,297
    
    
    
    8,824
    
    
    
    
    
    
    
    147,112Amortization of other purchased intangibles
    
    
    1,048
    
    
    
    2,047
    
    
    
    4,384
    
    
    
    
    
    
    
    7,479Amortization of purchased technology
    
    
    156
    
    
    
    3,954
    
    
    
    2,252
    
    
    
    
    
    
    
    6,362Operating income before cost of restructure and unallocated costs
    
    
    115,787
    
    
    
    15,296
    
    
    
    2,188
    
    
    
    
    
    
    
    133,271Cost of
restructure - 2009 Activity
    
    
    1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1Operating income before unallocated costs
    
    
    115,786
    
    
    
    15,296
    
    
    
    2,188
    
    
    
    
    
    
    
    133,270Unallocated costs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    13,120Operating income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    120,150Interest income, interest expense and other, net, and total
other-than-temporary impairment losses recognized in earnings
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (12,974
    )Income before income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    107,176
 13




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##### Table of Contents



Consolidated(In thousands)
    
    IPG
    
    
    iAS
    
    
    SY365
    
    
    Elimination
    
    

Total (1)Revenues:License feesInfrastructure
    
    $
    120,606
    
    
    $
    111
    
    
    $
    67
    
    
    
    
    
    
    $
    120,784Mobile and Embedded
    
    
    14,158
    
    
    
    33,697
    
    
    
    
    
    
    
    
    
    
    
    47,855Subtotal license fees
    
    
    134,764
    
    
    
    33,808
    
    
    
    67
    
    
    
    
    
    
    
    168,639Intersegment license revenues
    
    
    165
    
    
    
    11,799
    
    
    
    
    
    
    $
    (11,964
    )
    
    
    Total license fees
    
    
    134,929
    
    
    
    45,607
    
    
    
    67
    
    
    
    (11,964
    )
    
    
    168,639ServicesDirect service revenue
    
    
    263,602
    
    
    
    21,312
    
    
    
    1,077
    
    
    
    
    
    
    
    285,991Intersegment service revenues
    
    
    64
    
    
    
    16,725
    
    
    
    
    
    
    
    (16,789
    )
    
    
    Total services
    
    
    263,666
    
    
    
    38,037
    
    
    
    1,077
    
    
    
    (16,789
    )
    
    
    285,991MessagingDirect messaging revenue
    
    
    14
    
    
    
    
    
    
    
    88,217
    
    
    
    
    
    
    
    88,231Intersegment messaging revenues
    
    
    
    
    
    
    
    
    
    
    12
    
    
    
    (12
    )
    
    
    Total messaging
    
    
    14
    
    
    
    
    
    
    
    88,229
    
    
    
    (12
    )
    
    
    88,231Total revenues
    
    
    398,609
    
    
    
    83,644
    
    
    
    89,373
    
    
    
    (28,765
    )
    
    
    542,861Total allocated costs and expenses before amortization of other
purchased intangibles, purchased technology, cost of restructure
and unallocated costs
    
    
    309,293
    
    
    
    69,281
    
    
    
    80,410
    
    
    
    (28,765
    )
    
    
    430,219Operating income before amortization of other purchased
intangibles, purchased technology, cost of restructure and
unallocated costs
    
    
    89,316
    
    
    
    14,363
    
    
    
    8,963
    
    
    
    
    
    
    
    112,642Amortization of other purchased intangibles
    
    
    1,054
    
    
    
    2,046
    
    
    
    3,989
    
    
    
    
    
    
    
    7,089Amortization of purchased technology
    
    
    806
    
    
    
    4,310
    
    
    
    2,020
    
    
    
    
    
    
    
    7,136Operating income before cost of restructure and unallocated costs
    
    
    87,456
    
    
    
    8,007
    
    
    
    2,954
    
    
    
    
    
    
    
    98,417Cost of
restructure - 2008 Activity
    
    
    60
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    60Operating income before unallocated costs
    
    
    87,396
    
    
    
    8,007
    
    
    
    2,954
    
    
    
    
    
    
    
    98,357Unallocated costs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11,052Operating income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    87,305Interest income, interest expense and other, net, and total
other-than-temporary impairment losses recognized in earnings
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,913
    )Income before income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    81,392
 
 (1)
    
    As adjusted due to the implementation of FSP APB 14-1 and FAS 160. See Note 1 
Basis of Presentation and Note 10  Convertible Subordinated Notes. 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
    
    
    321
    
    
    
    6
    
    
    
    115
    
    
    
    442Balance at June 30, 2009
    
    $
    74,206
    
    
    $
    102,794
    
    
    $
    351,433
    
    
    $
    528,433
 14




---



##### Table of Contents



June 30, 2009
    
    
    December 31, 2008Gross
    
    
    
    
    
    
    Net
    
    
    Gross
    
    
    
    
    
    
    NetCarrying
    
    
    Accumulated
    
    
    Carrying
    
    
    Carrying
    
    
    Accumulated
    
    
    Carrying(In thousands)
    
    Amount
    
    
    Amortization
    
    
    Amount
    
    
    Amount
    
    
    Amortization
    
    
    AmountPurchased technology
    
    $
    169,815
    
    
    $
    (131,729
    )
    
    $
    38,086
    
    
    $
    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
    
    
    114,751
    
    
    
    (59,895
    )
    
    
    54,856
    
    
    
    114,632
    
    
    
    (52,303
    )
    
    
    62,329Totals
    
    $
    291,985
    
    
    $
    (191,943
    )
    
    $
    100,042
    
    
    $
    291,809
    
    
    $
    (177,839
    )
    
    $
    113,970
  2009
    
    $
    27,5532010
    
    
    25,5372011
    
    
    20,2272012
    
    
    13,6592013
    
    
    11,683
  Litigation .
   15




---



##### Table of Contents



. Stock Repurchases .
 Restructuring
   (Dollars in thousands)
    
    2004
    
    2002
    
    2001Restructuring planAccrued liabilities at December 31, 2008
    
    $
    2,254
    
    
    $
    3,391
    
    
    $
    713Amounts paid and other
    
    
    (601
    )
    
    
    (1,230
    )
    
    
    (239
    )Accrued liabilities at June 30., 2009
    
    $
    1,653
    
    
    $
    2,161
    
    
    $
    474
 Convertible Subordinated Notes
   16




---



##### Table of Contents



As ofJune 30,
    
    
    December 31,2009
    
    
    2008 (1)(In millions)Gross equity component of Notes
    
    $
    85.0
    
    
    $
    85.0Deferred tax asset reduction
    
    
    (34.0
    )
    
    
    (34.0
    )Equity issuance costs
    
    
    (1.8
    )
    
    
    (1.8
    )Equity component of Notes
    
    $
    49.2
    
    
    $
    49.2Principal amount of Notes
    
    $
    460.0
    
    
    $
    460.0Unamortized discount of Notes
    
    
    (12.4
    )
    
    
    (21.7
    )Liability component of Notes
    
    $
    447.6
    
    
    $
    438.3
 
 (1)
    
    As adjusted due to the implementation of FSP APB 14-1. See Note 1  Basis of
Presentation and Note 10  Convertible Subordinated Notes.   Income Taxes
  17




---



##### Table of Contents



Cash, Cash Equivalents, and Short and Long-term Cash Investments.
 Cash and Cash Equivalents
  Short and Long-Term Cash Investments
    (1)
    
    Temporary;(2)
    
    Credit related other-than-temporary impairments; or(3)
    
    Noncredit related other-than-temporary impairments.
 Temporary Changes in Fair Value
  Credit and Noncredit Other-Than-Temporary Impairments
  
    
    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
other-than-temporary impairment charge to earnings for the entire amount of the impairment.
 18




---



##### Table of Contents




    
    For the remaining debt securities, if an other-than-temporary impairment exists, the
Company separates the other-than-temporary impairment into two portions:
 o
    
    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.o
    
    NonCredit Loss Portion: The noncredit loss portion is the residual amount
of the other-than-temporary impairment, 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
    
    ValueJune 30, 2009:Cash and cash equivalents
    
    $
    662,185
    
    
    $
    2
    
    
    $
    (1
    )
    
    $
    
    
    
    $
    662,186Short-term bank deposits
    
    
    28,234
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    28,234(maturities of one year or less)Short-term corporate notes and bonds
    
    
    84,038
    
    
    
    64
    
    
    
    (155
    )
    
    
    
    
    
    
    83,947(maturities of one year or less)Trading securities
    
    
    9,729
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,729Long-term corporate notes and bonds
    
    
    19,923
    
    
    
    
    
    
    
    
    
    
    
    (5,315
    )
    
    
    14,608(maturities over one year)Long-term equity security
    
    
    103
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    103$
    804,212
    
    
    $
    66
    
    
    $
    (156
    )
    
    $
    (5,315
    )
    
    $
    798,807December 31, 2008:Cash and cash equivalents
    
    $
    611,364
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    611,364Short-term bank deposits
    
    
    51
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    51(maturities of one year or less)Trading securities
    
    
    8,638
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,638Long-term corporate notes and bonds
    
    
    15,513
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    15,513(maturities over one year)$
    635,566
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    635,566
  19




---



##### 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
    
    $
    43,449
    
    
    $
    (156
    )
    
    $
    14,608
    
    
    $
    5,315
 
 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 FSP FAS 115-2 and FAS 124-2, 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
    
    
    
    
    
    
    
    
    
    
    TotalAmortized
    
    OTTI in
    
    
    Unrealized
    
    OTTI loss
    
    accumulated(In thousands)
    
    Cost
    
    earnings
    
    
    gain/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
    
    
    
    5,315
 Fair Value Measurements
  20




---



##### Table of Contents




    
    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.
    Determining Fair Value When the Volume
and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying
Transactions That Are Not Orderly
  Level 1
    
    
    Level 2
    
    
    Level 3
    
    
    TotalMoney market funds
    
    $
    498,414
    
    
    
    
    
    
    
    
    
    
    $
    498,414Trading securities
    
    
    9,729
    
    
    
    
    
    
    
    
    
    
    
    9,729Available-for-sale cash investments
    
    
    168,028
    
    
    
    
    
    
    $
    14,711
    
    
    
    182,739Total
    
    $
    676,171
    
    
    
    
    
    
    $
    14,711
    
    
    $
    690,882
   Auction RateSecuritiesBalance at December 31, 2008
    
    $
    15,513Impairment loss included in net impairment losses recognized in earnings
    
    
    (2,186
    )Change in
total other-than-temporary impairment recognized in accumulated other comprehensive income
    
    
    1,384Balance at June 30, 2009
    
    $
    14,711
  21




---



##### Table of Contents



Recent Accounting Pronouncements
 FAS No. 168, TheFASB Accounting Standards CodificationTMand the Hierarchy of
Generally Accepted Accounting Principlesa replacement of FASB Statement No. 162(FAS 168)
  EITF 09-1, Accounting for Own-Share Lending Arrangements in Contemplation of Convertible Debt
Issuance (EITF 09-1)
  Subsequent Events
      22




---



##### 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.
   Accounting for Convertible Debt Instruments
that May be Settled in Cash upon Conversion (Including Partial Cash Settlement)
 Executive Overview
 Our Business
    Our Results
  23




---



##### Table of Contents



®
    Business Trends
       24




---



##### Table of Contents



Critical Accounting Policies and Estimates
   Recent Accounting Pronouncements
 FAS No. 168, TheFASB Accounting Standards CodificationTMand the Hierarchy of
Generally Accepted Accounting Principlesa replacement of FASB Statement No. 162(FAS 168)
  EITF 09-1, Accounting for Own-Share Lending Arrangements in Contemplation of Convertible Debt
Issuance (EITF 09-1)
  25




---



##### Table of Contents



Results of Operations
 Revenues
(Dollars in millions)
 Three Months ended June 30,
    
    Six Months ended June 30,Percent
    
    
    
    
    
    
    
    
    
    Percent2009
    
    2008
    
    Change
    
    2009
    
    2008
    
    ChangeLicense fees by segment:IPG
    
    $
    75.7
    
    
    $
    72.3
    
    
    
    5
    %
    
    $
    151.4
    
    
    $
    134.9
    
    
    
    12
    %IAS
    
    
    25.7
    
    
    
    24.9
    
    
    
    3
    %
    
    
    47.5
    
    
    
    45.6
    
    
    
    4
    %SY365
    
    
    0.0
    
    
    
    0.0
    
    
    
    *
    
    
    
    0.4
    
    
    
    0.1
    
    
    
    300
    %Eliminations
    
    
    (7.3
    )
    
    
    (6.7
    )
    
    
    9
    %
    
    
    (15.9
    )
    
    
    (12.0
    )
    
    
    33
    %Total license fees
    
    $
    94.1
    
    
    $
    90.5
    
    
    
    4
    %
    
    $
    183.4
    
    
    $
    168.6
    
    
    
    9
    %Percentage of total revenues
    
    
    34
    %
    
    
    32
    %
    
    
    
    
    
    
    34
    %
    
    
    31
    %Services by segment:IPG
    
    $
    129.9
    
    
    $
    135.5
    
    
    
    (4
    %)
    
    $
    255.0
    
    
    $
    263.7
    
    
    
    (3
    %)IAS
    
    
    16.8
    
    
    
    19.2
    
    
    
    (13
    %)
    
    
    33.8
    
    
    
    38.0
    
    
    
    (11
    %)SY365
    
    
    0.7
    
    
    
    0.5
    
    
    
    40
    %
    
    
    1.1
    
    
    
    1.1
    
    
    
    *Eliminations
    
    
    (7.8
    )
    
    
    (8.6
    )
    
    
    (9
    %)
    
    
    (15.3
    )
    
    
    (16.8
    )
    
    
    (9
    %)Total services
    
    $
    139.6
    
    
    $
    146.6
    
    
    
    (5
    %)
    
    $
    274.6
    
    
    $
    286.0
    
    
    
    (4
    %)Percentage of total revenues
    
    
    50
    %
    
    
    52
    %
    
    
    
    
    
    
    50
    %
    
    
    53
    %SY 365 messaging revenue
    
    $
    44.3
    
    
    $
    45.6
    
    
    
    (3
    %)
    
    $
    87.5
    
    
    $
    88.2
    
    
    
    (1
    %)SY 365 messaging as percentage of total revenues
    
    
    16
    %
    
    
    16
    %
    
    
    
    
    
    
    16
    %
    
    
    16
    %Total revenues
    
    $
    278.0
    
    
    $
    282.7
    
    
    
    (2
    %)
    
    $
    545.5
    
    
    $
    542.8
    
    
    
    *
 
 *
    
    Not meaningful  ®
     26




---



##### Table of Contents



Geographical Revenues
 (Dollars in millions)
 Three Months ended June 30,
    
    Six Months ended June 30,Percent
    
    
    
    
    
    
    
    
    
    Percent2009
    
    2008
    
    Change
    
    2009
    
    2008
    
    ChangeNorth American
    
    $
    147.4
    
    
    $
    135.8
    
    
    
    9
    %
    
    $
    287.2
    
    
    $
    267.7
    
    
    
    7
    %Percentage of total revenues
    
    
    53
    %
    
    
    48
    %
    
    
    
    
    
    
    53
    %
    
    
    49
    %Total Outside North America
    
    $
    130.6
    
    
    $
    146.9
    
    
    
    (11
    %)
    
    $
    258.3
    
    
    $
    275.1
    
    
    
    (6
    %)Percentage of total revenues
    
    
    47
    %
    
    
    52
    %
    
    
    
    
    
    
    47
    %
    
    
    51
    %International: EMEA (Europe, Middle East and Africa)
    
    $
    89.1
    
    
    $
    103.4
    
    
    
    (14
    %)
    
    $
    178.2
    
    
    $
    195.4
    
    
    
    (9
    %)Percentage of total revenues
    
    
    32
    %
    
    
    37
    %
    
    
    
    
    
    
    32
    %
    
    
    36
    %Intercontinental: (Asia Pacific and Latin America)
    
    $
    41.5
    
    
    $
    43.5
    
    
    
    (5
    %)
    
    $
    80.1
    
    
    $
    79.7
    
    
    
    1
    %Percentage of total revenues
    
    
    15
    %
    
    
    15
    %
    
    
    
    
    
    
    15
    %
    
    
    15
    %Total revenues
    
    $
    278.0
    
    
    $
    282.7
    
    
    
    (2
    %)
    
    $
    545.5
    
    
    $
    542.8
    
    
    
    *
 
 *
    
    Not meaningful    27




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##### Table of Contents



28




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##### Table of Contents



Costs and Expenses

(Dollars in millions)
 Three Months ended June 30,
    
    Six Months ended June 30,Percent
    
    
    
    
    
    
    
    
    
    Percent2009
    
    2008
    
    Change
    
    2009
    
    2008
    
    Change_Cost of license fees
    
    $
    14.2
    
    
    $
    15.1
    
    
    
    (6
    %)
    
    $
    26.5
    
    
    $
    29.7
    
    
    
    (11
    %)Percentage of license fees revenues
    
    
    15
    %
    
    
    17
    %
    
    
    
    
    
    
    14
    %
    
    
    18
    %Cost of services
    
    $
    38.8
    
    
    $
    41.1
    
    
    
    (6
    %)
    
    $
    75.7
    
    
    $
    82.0
    
    
    
    (8
    %)Percentage of services revenues
    
    
    28
    %
    
    
    28
    %
    
    
    
    
    
    
    28
    %
    
    
    29
    %Cost of messaging
    
    $
    27.6
    
    
    $
    27.4
    
    
    
    1
    %
    
    $
    54.6
    
    
    $
    52.5
    
    
    
    4
    %Percentage of messaging revenues
    
    
    62
    %
    
    
    60
    %
    
    
    
    
    
    
    62
    %
    
    
    60
    %Sales and marketing
    
    $
    62.3
    
    
    $
    74.3
    
    
    
    (16
    %)
    
    $
    126.5
    
    
    $
    142.6
    
    
    
    (11
    %)Percentage of total revenues
    
    
    22
    %
    
    
    26
    %
    
    
    
    
    
    
    23
    %
    
    
    26
    %Product development and engineering
    
    $
    35.9
    
    
    $
    36.0
    
    
    
    *
    
    
    $
    70.7
    
    
    $
    71.6
    
    
    
    (1
    %)Percentage of total revenues
    
    
    13
    %
    
    
    13
    %
    
    
    
    
    
    
    13
    %
    
    
    13
    %General and administrative
    
    $
    32.1
    
    
    $
    34.1
    
    
    
    (6
    %)
    
    $
    64.0
    
    
    $
    70.1
    
    
    
    (9
    %)Percentage of total revenues
    
    
    12
    %
    
    
    12
    %
    
    
    
    
    
    
    12
    %
    
    
    13
    %Amortization of other purchased intangibles
    
    $
    3.8
    
    
    $
    3.6
    
    
    
    6
    %
    
    $
    7.5
    
    
    $
    7.1
    
    
    
    6
    %Percentage of total revenues
    
    
    1
    %
    
    
    1
    %
    
    
    
    
    
    
    1
    %
    
    
    1
    %
 
 *
    
    Not meaningful Cost of License Fees.
 Cost of Services.
 Cost of Messaging
 Sales and Marketing.
 29




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##### Table of Contents



Product Development and Engineering.
   General and Administrative.
 Amortization of Other Purchased Intangibles.
 Operating Income
(Dollars in millions)
 Three Months ended June 30,
    
    Six Months ended June 30,Percent
    
    
    
    
    
    
    
    
    
    Percent2009
    
    2008
    
    Change
    
    2009
    
    2008
    
    ChangeOperating income by segment:IPG
    
    $
    59.8
    
    
    $
    48.4
    
    
    
    24
    %
    
    $
    115.8
    
    
    $
    87.4
    
    
    
    32
    %IAS
    
    
    10.0
    
    
    
    6.3
    
    
    
    59
    %
    
    
    15.3
    
    
    
    8.0
    
    
    
    91
    %SY365
    
    
    1.6
    
    
    
    1.8
    
    
    
    (11
    %)
    
    
    2.2
    
    
    
    3.0
    
    
    
    (27
    %)Unallocated costs
    
    
    (8.1
    )
    
    
    (5.4
    )
    
    
    50
    %
    
    
    (13.1
    )
    
    
    (11.1
    )
    
    
    18
    %Total operating income:
    
    $
    63.3
    
    
    $
    51.1
    
    
    
    24
    %
    
    $
    120.2
    
    
    $
    87.3
    
    
    
    38
    %Percentage of total revenues
    
    
    23
    %
    
    
    18
    %
    
    
    
    
    
    
    22
    %
    
    
    16
    %
    30




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##### Table of Contents



Other Income (Expense), Net
(Dollars in millions)
 Three Months ended June 30,
    
    Six Months ended June 30,Percent
    
    
    
    
    
    
    
    
    
    Percent2009
    

2008(1)
    
    Change
    
    2009
    

2008 (1)
    
    ChangeInterest income
    
    $
    2.0
    
    
    $
    6.2
    
    
    
    (68
    %)
    
    $
    4.2
    
    
    $
    14.1
    
    
    
    (70
    %)Percentage of total revenues
    
    
    1
    %
    
    
    2
    %
    
    
    
    
    
    
    1
    %
    
    
    3
    %Interest expense and other, net
    
    $
    (5.7
    )
    
    $
    (8.4
    )
    
    
    (32
    %)
    
    $
    (14.9
    )
    
    $
    (13.7
    )
    
    
    9
    %Percentage of total revenues
    
    
    (2
    %)
    
    
    (3
    %)
    
    
    
    
    
    
    (3
    %)
    
    
    (3
    %)Net investment impairment losses recognized in earnings
    
    $
    (0.4
    )
    
    $
    (3.0
    )
    
    
    (87
    %)
    
    $
    (2.2
    )
    
    $
    (6.3
    )
    
    
    (65
    %)Percentage of total revenues
    
    
    *
    
    
    
    (1
    %)
    
    
    
    
    
    
    *
    
    
    
    (1
    %)
 
 (1)
    
    As adjusted due to the implementation of FSP APB 14-1, FAS 160, and FSP FAS 115-2
and FAS 124-2. See Note 1  Basis of Presentation
and Note 10  Convertible Subordinated Notes.*
    
    Not meaningful     Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion
 31




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##### Table of Contents



Provision for Income Taxes
(Dollars in millions)
 Three Months ended June 30,
    
    Six Months ended June 30,Percent
    
    
    
    
    
    
    
    
    
    Percent2009
    

2008 (1)
    
    Change
    
    2009
    

2008 (1)
    
    ChangeProvision for income taxes
    
    $
    21.5
    
    
    $
    16.2
    
    
    
    33
    %
    
    $
    41.4
    
    
    $
    29.9
    
    
    
    38
    %
 
 (1)
    
    As adjusted due to the implementation of FSP APB 14-1. See Note 1  Basis of
Presentation and Note 10  Convertible Subordinated Notes.    Net Income Per Share Attributable to Sybase, Inc. Common Stockholders
(Dollars and shares in millions, except per share data)
 Three Months ended June 30,
    
    Six Months ended June 30,Percent
    
    
    
    
    
    
    
    
    
    Percent2009
    

2008 (1)
    
    Change
    
    2009
    

2008 (1)
    
    ChangeNet income attributable to Sybase, Inc.
    
    $
    37.6
    
    
    $
    29.8
    
    
    
    26
    %
    
    $
    65.7
    
    
    $
    51.5

    
    
    
    28
    %Percentage of total revenues
    
    
    14
    %
    
    
    11
    %
    
    
    
    
    

    
    12
    %
    
    
    9
    %Basic net income per share attributable to
Sybase, Inc. common stockholders
    
    $
    0.46
    
    
    $
    0.36
    
    
    
    28
    %
    
    $
    0.81
    
    

    $
    0.60
    
    
    
    35
    %Diluted net income per share attributable
to Sybase, Inc. common stockholders
    
    $
    0.43
    
    
    $
    0.33
    
    
    
    30
    %
    
    $
    0.76
    
    
    $
    0.57
    
    
    
    33
    %Shares used in computing basic net income
per share attributable to Sybase, Inc.
common stockholders
    
    
    80.6
    
    
    
    81.7
    
    
    
    (1
    %)
    
    
    80.2
    
    
    
    84.7
    
    
    
    (5
    %)Shares used in computing diluted net income
per share attributable to Sybase, Inc.
common stockholders
    
    
    87.6
    
    
    
    87.8
    
    
    
    *
    
    
    
    86.1
    
    
    
    89.7
    
    
    
    (4
    %)
 
 (1)
    
    As adjusted due to the implementation of FSP APB 14-1, FAS 160, and FSP EITF
03-6-1. See Note 1  Basis of Presentation and
Note 10  Convertible Subordinated Notes.*
    
    Not meaningful 32




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##### Table of Contents



Liquidity and Capital Resources
(Dollars in millions)
 Six Months EndedJune 30,
    
    Percent2009
    
    2008
    
    ChangeWorking capital
    
    $
    214.2
    
    
    $
    448.2
    
    
    
    (52
    %)Cash and cash equivalents
    
    $
    662.2
    
    
    $
    575.1
    
    
    
    15
    %Net cash provided by operating activities
    
    $
    165.6
    
    
    $
    157.3
    
    
    
    5
    %Net cash provided by (used for) investing activities
    
    $
    (145.7
    )
    
    $
    54.7
    
    
    
    *Net cash provided by (used for) financing activities
    
    $
    24.6
    
    
    $
    (261.7
    )
    
    
    *
 
 *
    
    Not meaningful  th
 33




---



##### Table of Contents



.
  Working Capital
  Cash Flow
  34




---



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35




---



##### Table of Contents



ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES OF MARKET RISK
        
 ITEM 4: CONTROLS AND PROCEDURES
     36




---



##### 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.
  37




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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.
  38




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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.
  39




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##### 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.
  40




---



##### Table of Contents



Impairments in our investment portfolio may result in temporary and/or realized losses.
     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.
  41




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##### Table of Contents



We are subject to risks arising from our international operations.
  
    
    changes in IT spending;
    
    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.
  42




---



##### Table of Contents



We are subject to risks related to the terms of our 1.75% Convertible Subordinated Notes.
     Unanticipated changes in our tax rates could affect our future financial results.
   43




---



##### 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.
  44




---



##### 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.
  45




---



##### 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.
     46




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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
 (e)
    
    Purchases of Equity Securities by the Issuer and Affiliated Purchasers
  47




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##### Table of Contents



ITEM 3: DEFAULTS UPON SENIOR SECURITIES
 None.
 
 ITEM 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
 None.
 
 ITEM 5: OTHER INFORMATION
 None.
 
 ITEM 6: EXHIBITS
 (a)
    
    Exhibits furnished pursuant to Section 601 of Regulation S-K
  48




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SIGNATURES
  August 7, 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) 49




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EXHIBIT INDEX
 Exhibit No.
    
    Description31.1
    
    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
 50