10-Q

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

(Mark One)
[X]	Quarterly report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934 for
	the quarterly period ended September 30, 2000 or
[  ]	Transition report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934 for
	the transition period from _________ to ________
	Commission file number1-12989

SunGard ^® Data Systems Inc.

(Exact name of registrant as specified in its charter)

   

Delaware	51-0267091
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)

1285 Drummers Lane, Wayne, Pennsylvania 19087

(Address of principal executive offices, including zip code)

       

(610) 341-8700

(Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X   No __

There were 132,915,326 shares of the registrant's common stock, par value $.01 per share, outstanding at September 30, 2000.

SUNGARD DATA SYSTEMS INC.
AND SUBSIDIARIES

INDEX

PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements:
	Consolidated Balance Sheets as of September 30, 2000 (unaudited)
	and December 31, 1999
	Consolidated Statements of Income for the nine and three months
	ended September 30, 2000 and 1999 (unaudited)
	Consolidated Statements of Cash Flows for the nine months
	ended September 30, 2000 and 1999 (unaudited)
	Notes to Consolidated Financial Statements (unaudited)
Item 2.	Management's Discussion and Analysis of Financial Condition
	and Results of Operations
Item 3.	Quantitative and Qualitative Disclosures about Market Risk
PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings
Item 2.	Changes in Securities and Use of Proceeds
Item 3.	Defaults upon Senior Securities
Item 4.	Submission of Matters to a Vote of Security Holders
Item 5.	Other Information
Item 6.	Exhibits and Reports on Form 8-K
S IGNATURES

Part I. FINANCIAL INFORMATION

Item 1. Financial Statements

SunGard Data Systems Inc.

Consolidated Balance Sheets

(In thousands, except per-share amounts)

			September 30, 2000 (Unaudited)
						December 31, 1999
Assets
Current:
	Cash and equivalents			$   253,237			$   286,990
	Short-term investments			135,602			104,235
	Trade receivables, less allowance for doubtful accounts of $21,786 and $34,141			306,538			278,114
	Earned but unbilled receivables			50,549			56,288
	Prepaid expenses and other current assets			35,081			35,615
	Deferred income taxes			27,330			25,565
		Total current assets		808,337			786,807
Investment in common stock				21,806			49,902
Property and equipment, less accumulated depreciation of $367,138 and $318,405				191,458			182,682
Software products, less accumulated amortization of $169,802 and $146,185				150,242			110,355
Goodwill, less accumulated amortization of $71,490 and $59,840				292,822			211,791
Other tangible and intangible assets, less accumulated amortization of
	$87,654 and $77,740			136,154			93,393
Deferred income taxes				141,060			129,832
				$1,741,879			$1,564,762
Liabilities and Stockholders' Equity
Current:
	Short-term and current portion of long-term debt			$        6,327			$      7,755
	Accounts payable			16,095			14,924
	Accrued compensation and benefits			87,485			84,971
	Other accrued expenses			55,040			61,820
	Accrued income taxes			20,855			13,142
	Deferred revenues			167,966			165,866
		Total current liabilities		353,768			348,478
Long-term debt				6,940			5,517
Commitments
Stockholders' equity:
	Preferred stock, par value $.01 per share; 5,000 shares authorized, of which 3,200 is
	designated as Series A Junior Participating Preferred stock			-			-
	Common stock, par value $.01 per share; 320,000 shares authorized;
	132,915 and 128,505 shares issued			1,329			1,285
	Capital in excess of par value			641,523			591,998
	Restricted stock plans and notes receivable for common stock			(1,100	)		(1,768	)
	Retained earnings			757,624			608,519
	Accumulated other comprehensive income (loss)			(18,205	)		10,733
		Total stockholders' equity		1,381,171			1,210,767
				$1,741,879			$1,564,762
The accompanying notes are an integral part of these financial statements.

SunGard Data Systems Inc.

Consolidated Statements of Income

(In thousands, except per-share amounts)

(Unaudited)

	Nine Months Ended						Three Months Ended
	September 30,						September 30,
		2000			1999				2000			1999
Revenues:
Services	$	1,017,533		$	886,212			$	349,431		$	305,493
License and resale fees		181,437			169,987				63,778			46,186
		1,198,970			1,056,199				413,209			351,679
Costs and expenses:
Cost of sales and direct operating		483,359			444,791				164,665			141,693
Sales, marketing and administration		259,565			227,165				85,021			76,474
Product development		104,089			96,234				34,879			32,996
Depreciation and amortization		65,939			56,546				23,091			19,610
Amortization of acquisition-related intangible assets		41,858			32,589				14,009			11,543
Merger costs, including purchased in-process research    and development of $5,206 in 2000 (see Note 2)		7,962			99,184				5,206			8,738
		962,772			956,509				326,871			291,054
Income from operations		236,198			99,690				86,338			60,625
Interest income		17,132			12,046				6,498			4,376
Interest expense		(1,383	)		(1,746	)			(615	)		(612	)
Income before income taxes and extraordinary items		251,947			109,990				92,221			64,389
Income taxes		101,419			84,830				36,889			29,647
Income before extraordinary items		150,528			25,160				55,332			34,742
Extraordinary items, net of income taxes		-			10,670				-			-
Net income		150,528			35,830				55,332			34,742
Pro forma income tax benefit resulting from    acquired Subchapter S corporation		-			(27,381	)			-			-
Pro forma net income	$	150,528		$	63,211			$	55,332		$	34,742
Pro forma basic net income per common share:
Before extraordinary items	$	1.14		$	0.42			$	0.42		$	0.27
After extraordinary items	$	1.14		$	0.50			$	0.42		$	0.27
Pro forma diluted net income per common share:
Before extraordinary items	$	1.12		$	0.40			$	0.41		$	0.27
After extraordinary items	$	1.12		$	0.49			$	0.41		$	0.27
Shares used to compute pro forma net income per common share:
Basic		131,774			126,519				132,376			127,774
Diluted		134,959			130,182				135,737			130,367
The accompanying notes are an integral part of these financial statements.

SunGard Data Systems Inc.
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
			Nine Months Ended
			September 30,
		2000			1999
Cash flow from operations:
Net income		$	150,528		$	35,830
Reconciliation of net income to cash flow from operations:
Depreciation and amortization			107,797			89,135
Extraordinary gains, net of income taxes			-			(10,670	)
Noncash compensation charge related to the acquisition of ASC			-			71,459
Purchased in-process research and development			5,206			-
Other noncash charges (credits)			(2,963	)		3,843
Deferred income tax benefit			(4,112	)		(11,308	)
Accounts receivable and other current assets			(2,589	)		(4,854	)
Accounts payable and accrued expenses			(14,301	)		(1,496	)
Deferred revenues			(10,061	)		3,396
Cash flow from operations			229,505			175,335
Financing activities:
Cash received under employee stock plans			38,222			36,167
Cash received from borrowings			25			4,648
Pre-acquisition cash distributions to shareholders of acquired corporations, net			-			(3,637	)
Cash paid to repay debt			(7,749	)		(19,914	)
Total financing activities			30,498			17,264
Investment activities:
Cash paid for acquired businesses, net of cash acquired			(169,651	)		(53,964	)
Cash paid for property and equipment			(63,182	)		(62,330	)
Cash paid for software and other assets			(15,767	)		(11,910	)
Cash paid for purchases of short-term investments			(97,853	)		(35,038	)
Cash paid for purchases of long-term investments			(14,087	)		-
Cash received from sale of subsidiaries			-			25,000
Cash received from sales and maturities of short-term investments			66,784			12,498
Total investment activities			(293,756	)		(125,744	)
Increase (decrease) in cash and equivalents			(33,753	)		66,855
Beginning cash and equivalents			286,990			265,011
Ending cash and equivalents		$	253,237		$	331,866
Supplemental information:
Acquired businesses:
Property and equipment		$	2,738		$	2,278
Software products			50,971			30,111
Purchased in-process research and development			5,206			-
Goodwill and tangible and intangible assets			135,559			50,254
Deferred income taxes			(849	)		100,011
Purchase price obligations and debt assumed			(7,800	)		(5,342	)
Net current assets (liabilities) assumed	.		(13,675	)		1,156
Common stock issued and net equity acquired in poolings of interests			(2,499	)		(124,504	)
Cash paid for acquired businesses, net of cash acquired		$	169,651		$	53,964
The accompanying notes are an integral part of these financial statements.

SUNGARD DATA SYSTEMS INC.
NOTES TO CONSOLIDATED FINANCIAL S TATEMENTS (UNAUDITED)

1. Basis of Presentation:

     The accompanying consolidated financial statements include the accounts of the Company and its subsidiaries, and have been prepared in accordance with generally accepted accounting principles for interim financial reporting and with the instructions for Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. All significant intercompany transactions and accounts have been eliminated. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included in the accompanying financial statements. Operating results for the nine and three month periods ended September 30, 2000 are not necessarily indicative of the results that may be expected for the year ending December 31, 2000. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company's annual report on Form 10-K for the year ended December 31, 1999.

     During 1999, the Company acquired Automated Securities Clearance, Ltd. (ASC). ASC was a Subchapter S corporation before the Company acquired it; therefore, all income passed through directly to and substantially all income taxes were paid directly by the former shareholder of ASC. Net income and all net income per share amounts prior to the acquisition are presented on a pro forma basis since generally accepted accounting principles require the presentation of pro forma income tax expense for ASC as if ASC had been a Subchapter C corporation for all periods presented.

2.   Acquisitions and Dispositions:

       Acquisitions:

       Pooling-of-Interests Transactions:

     During the nine months ended September 30, 2000, the Company completed the acquisition of Microbank Software, Inc. (Microbank). A total of 2.2 million shares of common stock were issued in connection with this acquisition, and outstanding options to buy shares of Microbank were converted into options to buy 0.3 million shares of the Company’s common stock.

     During the nine months ended September 30, 1999, the Company completed ten acquisitions in its investment support systems business. A total of 18.8 million shares of common stock were issued in connection with these acquisitions, and outstanding options to buy shares of the acquired companies were converted into options to buy 1.6 million shares of the Company's common stock.

     All historical financial information of the Company has been restated to include the historical financial information of ASC, FDP Corp. (FDP), Oshap Technologies Ltd. (Oshap), Pentamation Enterprises, Inc. (PEI) and Sterling Wentworth Corporation (SWC). Historical financial information is not restated for the other acquisitions due to immateriality. Each immaterial acquisition has been recorded as of the beginning of the quarter in which it was completed. Except for the merger costs described below, the

Company does not expect that the immaterial acquisitions, individually or in the aggregate, will have a material effect on its financial condition or results of operations.

Purchase Transactions:

     During the first nine months of 2000, the Company completed eight acquisitions. Total cash paid in connection with the eight acquisitions was $168.3 million, subject to certain adjustments. Also during the first nine months of 2000, the Company paid $0.6 million as additional consideration based upon the performance of a business previously acquired.

     In connection with the acquisition of Global Information Solutions Ltd. (GIS), the Company engaged an independent firm to perform a valuation of the intangible assets acquired to serve as the basis of allocation of the purchase price to the various classes of assets acquired. The allocation of the purchase price includes a charge of $5.2 million, totaling approximately 6% of the purchase price, for purchased in-process research and development. Purchased in-process research and development represents the value of software products still in development and not considered to have reached technological feasibility as of the date of acquisition. Management believes that the purchased in-process research and development has no alternative future uses.

     The Company has also engaged an independent firm to perform a valuation of the intangible assets acquired in connection with the acquisition of the assets of the Risk and Exposure Management Business of GE Information Services, Inc. (RXM). The valuation will serve as the basis of allocation of the purchase price to the various classes of assets acquired, and will include a determination as to whether any purchased in-process research and development exist at the time of acquisition. At September 30, 2000, the allocation of the purchase price is still preliminary, and does not include an allocation to purchased in-process research and development. The allocation to purchased in-process research and development, if any, will be recorded as an acquisition-related expense when the valuation is completed. Cash paid in connection with the acquisition of RXM was $51.4 million, plus up to $23.0 million contingent upon the future performance of RXM.

Merger Costs:

     During the nine months ended September 30, 2000 and 1999, the Company recorded merger costs of $8.0 million and $99.2 million ($5.4 million after tax, or $0.04 per diluted share, and $72.7 million pro forma after tax, or $0.56 per pro forma diluted share), respectively. The merger costs are associated with pooling-of-interests transactions, and, in 2000, include a $5.2 million charge for purchased in-process research and development. The charges associated with poolings of interests principally include investment banking, legal, accounting and printing fees that generally are not deductible for income tax purposes. The 1999 merger costs also include a noncash compensation charge of $71.5 million ($45.0 million pro forma after tax, or $0.35 per pro forma diluted share) in connection with a pre-existing employment agreement with an executive of ASC, which obligated ASC to issue to the executive 25% of the shares issued in the merger. The fair value of those shares and related payroll costs were recorded as one-time costs associated with the merger.

Dispositions and Extraordinary Items:

     On March 31, 1999, the Company sold two wholly owned healthcare information systems (HIS) subsidiaries. Total cash received in connection with the sale of the HIS businesses was $25.0 million, resulting in an after-tax gain of $10.4 million ($0.08 per diluted share). The gain on the sale is reflected on the Consolidated Statements of Income as an extraordinary item in accordance with the reporting requirements for a sale of assets following a recently completed business combination that was accounted for as a pooling of interests. Also during the nine months ended September 30, 1999, an extraordinary gain of $0.3 million (less than $0.01 per diluted share) was recorded as a result of Oshap’s early retirement of debt.

3. Stockholder Rights Plan:

     On July 18, 2000, the Company’s board of directors adopted a Stockholder Rights Plan under which all stockholders of record as of July 20, 2000 received rights to purchase shares of Series A Junior Participating Preferred Stock (“Preferred Stock”). Each right will detach from the common stock and trade separately should any person or group acquire beneficial ownership of 15% or more of the Company’s common stock or announce a tender offer for 15% or more of the Company’s common stock. If a person or group acquires beneficial ownership of 15% or more of the Company’s common stock (“Acquiring Person”), all rights except for those held by the Acquiring Person become rights to purchase one one-hundredth of one share of Preferred Stock for $175, or $175 of the Company’s common stock at a 50% market discount, subject to adjustment by the Company’s board of directors. If the Company merges, consolidates or engages in a similar transaction with an Acquiring Person, each holder has a “flip over” right to buy discounted stock in the acquiring entity.

     These rights were distributed as a dividend at the rate of one right for each share of common stock of the Company held by stockholders of record as of the close of business on July 20, 2000. Until the occurrence of certain events, the rights are represented by and traded in tandem with common stock, and cannot be separately traded. Under certain circumstances, the rights are redeemable at a price of $0.01 per right. Further, upon the occurrence of certain events, the Company’s board of directors has the option to exchange one share of common stock per right. The rights expire on July 20, 2010. The rights have no voting rights.

4. Authorization for Stock Buy-Back:

     On August 22, 2000, the Company announced that its board of directors authorized the Company to purchase up to 2,000,000 shares of its common stock through August 18, 2001. The repurchases will be made from time to time in the open market, at the discretion of management. Shares purchased under this plan will be used for the Company's employee stock option and stock purchase plans and other general corporate purposes. There were no purchases of shares of the Company’s common stock through September 30, 2000.

5. Shares Used in Computing Pro Forma Net Income Per Common Share:

     The computation of shares used in computing pro forma basic and diluted net income per common share for each of the nine and three months ended September 30, 2000 and 1999 follows (in thousands):

	Nine Months		Three Months
	Ended		Ended
	Sept. 30,		Sept. 30,
	2000	1999	2000	1999
Weighted average common shares
outstanding	131,705	126,376	132,376	127,774
Contingent shares	69	143	-	-
Total shares used for calculation of pro forma
basic net income per common share	131,774	126,519	132,376	127,774
Employee stock options	3,185	3,663	3,361	2,593
Total shares used for calculation of pro forma
diluted net income per common share	134,959	130,182	135,737	130,367

6. Comprehensive Income:

    Comprehensive income consists of net income, adjusted for other increases and decreases affecting stockholders' equity that are excluded from the determination of net income. The calculation of comprehensive income for the nine and three months ended September 30, 2000 and 1999 follows (in thousands):

	Nine Months				Three Months
	Ended				Ended
	Sept. 30,				Sept. 30,
	2000		1999		2000		1999
Net income	$150,528		$35,830		$55,332		$34,742
Foreign currency translation gain (loss)	(10,869	)	5		(5,679	)	4,093
Unrealized losses on marketable
securities	(27,799	)	(40	)	(1,263	)	(65	)
Income tax benefit	9,730		-		443		-
Comprehensive net income	$121,590		$35,795		$48,833		$38,770

     The unrealized losses on marketable securities during 2000 result primarily from the Company’s investment in approximately 16.7% of the common stock in Tecnomatix Technologies Ltd. (NASDAQ: TCNO), which was acquired in connection with the 1999 pooling-of-interests transaction with Oshap.

Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

     Statements about the outlook of SunGard Data Systems Inc. (the Company) and all other statements in this quarterly report on Form 10-Q other than historical facts are forward-looking statements that are subject to risks and uncertainties that may change at any time and differ materially from actual results. Forward-looking statements include information about possible or assumed future financial results of the Company and usually contain words such as “believes,” “intends,” “expects,” “anticipates,” or similar expressions. The Company derives most of its forward-looking statements from its operating budgets and forecasts, which are based upon many detailed assumptions. While the Company believes that its assumptions are reasonable, it cautions that there are inherent difficulties in predicting certain important factors, such as the timing and magnitude of software sales, the effect of year 2000 issues on software and services buying decisions, the timing and scope of technological advances, the integration and performance of acquired businesses, the prospects for future acquisitions, the ability to attract and retain key personnel, and the overall condition of the financial services industry. These factors, as and when applicable, are discussed in the Company's filings with the Securities and Exchange Commission, including its most recent Form 10-K, a copy of which may be obtained from the Company without charge.

     During 2000 and 1999, the Company completed certain acquisitions accounted for as poolings of interests. Five acquisitions completed in 1999 required restatement of prior-period results. Also during 2000 and 1999, the Company recorded merger costs associated with acquired companies, and, on March 31,

1999, the Company sold two wholly owned healthcare information systems (HIS) businesses, resulting in an extraordinary gain. See Note 2 of Notes to Unaudited Consolidated Financial Statements.

The following supplemental unaudited income statement information should be read along with the unaudited consolidated financial statements and notes thereto included in this report.

SunGard Data Systems Inc.
Supplemental Income Statement Information
(In thousands)
(Unaudited)
		Nine Months								Three Months
		Ended								Ended
		Sept. 30,								Sept. 30,
		2000				1999				2000				1999
Revenues:
Investment support systems	$	873,747			$	768,764			$	300,828			$	255,002
Business continuity and Internet services		300,643		261,663				103,701						88,963
Other businesses		24,580				25,772				8,680				7,714
	$	1,198,970			$	1,056,199			$	413,209			$	351,679
Operating income:
Investment support systems	$	170,225			$	141,274			$	64,055			$	45,378
Business continuity and Internet services		82,943				65,027				30,537				24,579
Other businesses		7,420				3,699				2,866				2,376
Corporate administration		(16,428	)	(11,126			)	(5,914			)	(2,970			)
		244,160		198,874						91,544				69,363
Merger costs, including purchased in-process
research and development of $5,206
in 2000		(7,962	)			(99,184	)			(5,206	)			(8,738	)
	$	236,198			$	99,690			$	86,338			$	60,625
Operating margins, excluding merger costs:
Investment support systems		19.5%				18.4%				21.3%				17.8%
Business continuity and Internet services		27.6%				24.9%				29.4%				27.6%
Other businesses		30.2%				14.4%				33.0%				30.8%
Total		20.4%				18.8%				22.2%				19.7%

INCOME FROM OPERATIONS:

     The Company sells a significant portion of its products and services to the financial services industry and could be affected directly by the overall condition of that industry. The Company expects that the consolidation trend in that industry will continue, but it is unable to predict what effect, if any, this trend may have on the Company.

     Certain of the Company’s investment support systems (ISS) businesses derive a significant portion of revenues from software license sales. Since there are inherent difficulties in predicting the timing and magnitude of software sales, there is the potential for fluctuations in quarterly revenues and income.

     Investment Support Systems (ISS):

     The Company's ISS business is comprised of groups of related businesses that sell software and related services to the financial services industry. Historically, these groups in the aggregate have met or exceeded expectations. During 1999, however, overall results were below expectations due primarily to a 36% decrease in revenues from license and resale fees in four of the Company’s risk and derivatives systems businesses. The Company’s other ISS units performed well overall, but their results did not fully offset the decrease within the four affected businesses. The Company believes that much of the decrease was due to a slowdown in new system purchases by both large and medium-size financial institutions resulting from the industry’s focus on Y2K testing and preparation during 1999.

     The ISS operating margin was 19.5% and 21.3% for the nine and three month periods ended September 30, 2000, respectively, as compared with 18.4% and 17.8% for the comparable periods in 1999. The increase in the operating margin during the nine month period is due primarily to an increase in revenues in the brokerage and execution systems businesses, cost reductions in the risk and derivatives systems businesses, and a contract cancellation fee, partially offset by an $8.0 million, or 15%, decrease in license and resale fees in the risk and derivatives systems businesses. The increase in the operating margin during the three month period is due primarily to a $10.0 million, or 119%, increase in license and resale fees in the risk and derivatives systems businesses, an increase in revenues in the brokerage and execution systems businesses, and cost reductions in the risk and derivatives systems businesses.

     The Company expects that the full-year 2000 ISS operating margin could increase from the full-year 1999 operating margin of 18.0%. The most important factors affecting the ISS operating margin continue to be the timing and magnitude of software license sales, the operating margins of recently acquired businesses and the level of product development spending.

     Business Continuity and Internet Services (BCIS):

     The BCIS operating margin was 27.6% and 29.4% during the nine and three month periods ended September 30, 2000, as compared with 24.9% and 27.6% for the comparable periods in 1999. The increases in the operating margins are due primarily to increases in revenues, lower costs associated with

equipment upgrades and facilities expenditures, and lower compensation expenses associated with severance costs and the Company’s long-term incentive plan.

     The Company expects that the full-year 2000 BCIS operating margin will be approximately 27% to 29%, as compared with the full-year 1999 BCIS operating margin of 26.4%. The most important factors affecting the BCIS operating margin are the rate of new contract signings and contract renewals, and the timing and magnitude of equipment and facilities expenditures. The Company plans to make additional investments in its new Web-hosting and co-location services during the fourth quarter of 2000.

REVENUES:

     Total revenues for the nine and three month periods ended September 30, 2000 increased $142.8 million, or 14%, and $61.5 million, or 17%, as compared with the corresponding periods in 1999. Excluding acquired businesses, revenues increased approximately 10% and 14% during the nine and three month periods ended September 30, 2000, as compared with 11% and 7% during the corresponding periods in the previous year. The lower revenue growth rate during the nine month period is due primarily to a $25.0 million decline in revenues from the Company’s risk and derivatives systems businesses, partially offset by higher revenues from brokerage and execution systems businesses. The higher revenue growth rate during the three month period is due primarily to an increase in revenues from the Company’s brokerage and execution systems businesses, as well as a $2.3 million increase in revenues from the Company’s risk and derivatives systems businesses as compared with the corresponding period in 1999. The Company believes that Y2K concerns caused some decline in software buying and conversion activity during the last half of 1999 and during the first half of 2000 and this has been a significant cause for the slower revenue growth during the first half of 2000.

     During the nine and three month periods ended September 30, 2000, recurring revenues derived from processing services, business continuity services, professional services, software maintenance, and software and hardware rentals increased 15% and 14%, respectively, to $1,017.5 million, or 85% of total revenues, and $349.4 million, or 85% of total revenues, respectively, as compared with $886.2 million, or 84% of total revenues, and $305.5 million, or 87% of total revenues, during the comparable periods in 1999.

     Professional services revenues are $204.9 million and $70.2 million during the nine and three month periods ended September 30, 2000, respectively, as compared with $210.4 million and $74.9 million during the comparable periods in 1999. The decreases are due primarily to lower risk and derivatives systems professional services and to conversion work on large shareholder accounting system projects in 1999. These decreases are partially offset by increases in professional services revenues from acquired businesses.

     During the nine and three month periods ended September 30, 2000, nonrecurring revenues derived from software license fees and resales of third-party hardware and software are $181.4 million and $63.8 million, respectively, as compared with $170.0 million and $46.2 million during the comparable periods in 1999. Software license fees totaled $157.6 million and $56.6 million during the nine and three month periods ended September 30, 2000, respectively, as compared with $147.3 million and $40.8 million during

the comparable periods in 1999. Higher nonrecurring revenues during the nine month period are due primarily to acquired businesses and a contract cancellation fee, partially offset by an $8.0 million decline in nonrecurring revenues from risk and derivatives systems and lower nonrecurring revenues from the Company’s public sector businesses. Higher nonrecurring revenues during the three month period are due primarily to a $10.0 million increase in nonrecurring revenues from risk and derivatives systems and from acquired businesses.

      Investment Support Systems:

     ISS revenues for the nine and three month periods ended September 30, 2000 increased $105.0 million, or 14%, and $45.8 million, or 18%, respectively, as compared with the corresponding periods in 1999. During the nine month period, recurring ISS revenues increased $92.0 million, or 15%, while nonrecurring ISS revenues increased $13.0 million, or 8%. The increase in recurring ISS revenues is due primarily to growth in the Company’s brokerage and execution systems businesses and to acquired businesses. These increases are partially offset by lower recurring revenues from risk and derivatives systems and lower professional services revenues from shareholder accounting systems. The increase in nonrecurring revenues in the nine month period is due primarily to revenues from acquired businesses, an increase in license fees from shareholder accounting systems due to a contract cancellation fee relating to industry consolidation and an increase in resale fees from brokerage and execution systems businesses, partially offset by lower revenues from risk and derivatives systems and to a decline in license and resale fees in the Company’s public sector businesses.

     During the three month period ended September 30, 2000, recurring ISS revenues increased $28.8 million, or 14%, while nonrecurring ISS revenues increased $17.0 million, or 41%, as compared with the comparable period in 1999. The increase in recurring ISS revenues is due primarily to higher recurring revenues from brokerage and execution systems and to acquired businesses, partially offset by lower recurring revenues from risk and derivatives systems and lower professional services revenues from shareholder accounting systems. The increase in nonrecurring revenues is due primarily to a $10.0 million increase in license and resale fees from the Company’s risk and derivatives systems businesses and to acquired businesses.

      Business Continuity and Internet Services:

     BCIS revenues for the nine and three month periods ended September 30, 2000 increased $39.0 million, or 15%, and $14.7 million, or 17%, as compared with the corresponding periods in 1999. The increases are due primarily to increases in revenues resulting from new contract signings and contract renewals, continued growth in demand for midrange platforms, network services and work-group recovery, partially offset by a decrease in revenues related to Y2K testing.

      Recent Accounting Pronouncement:

     In December 1999, the Securities and Exchange Commission (SEC) issued Staff Accounting Bulletin Number 101, “Revenue Recognition in Financial Statements” (SAB 101). Further, the SEC issued interpretations to SAB 101 during October 2000. Implementation of SAB 101 is required no later than the fourth quarter of 2000. The Company does not believe that implementation of SAB 101 will have any material effect on its financial position or results of operations.

COSTS AND EXPENSES:

     Cost of sales and direct operating expenses for the nine and three month periods ended September 30, 2000 increased $38.6 million, or 9%, and $23.0 million, or 16%, respectively, as compared with the corresponding periods in 1999. The increases are due primarily to acquired businesses and equipment upgrades, partially offset by cost reductions in risk and derivatives systems and shareholder accounting systems businesses.

     Sales, marketing and administration expenses for the nine and three month periods ended September 30, 2000 increased $32.4 million, or 14%, and $8.5 million, or 11%, respectively, as compared with the corresponding periods in 1999. The increases are due primarily to acquired businesses and the Company’s new global account management and corporate marketing programs, partially offset by cost reductions in the Company’s risk and derivatives systems businesses.

     Product development expenses for the nine and three month periods ended September 30, 2000 increased $7.9 million, or 8%, and $1.9 million, or 6%, as compared with the corresponding periods in 1999. The increases are due primarily to acquired businesses and various ISS product development initiatives. Development costs capitalized during the nine and three month periods ended September 30, 2000 are $7.2 million and $3.1 million, respectively, as compared with $3.7 million and $1.7 million in the comparable periods in 1999.

     Depreciation and amortization for the nine and three month periods ended September 30, 2000 increased $9.4 million, or 17%, and $3.5 million, or 18%, respectively, as compared with the corresponding periods in 1999. The increases are due primarily to equipment purchases and to acquired businesses.

     Amortization of acquisition-related intangible assets for the nine and three month periods ended September 30, 2000 increased $9.3 million, or 28%, and $2.5 million, or 21%, as compared with the corresponding periods in 1999. The increases are due to recently acquired businesses.

     Interest income for the nine and three month periods ended September 30, 2000 increased $5.1 million, or 42%, and $2.1 million, or 48%, respectively, as compared with the corresponding periods in 1999. The increases are due to higher average cash and short-term investment balances, and, to a lesser extent, an increase in interest rates.

     Excluding the effect of merger costs and extraordinary gains resulting from the sale of the HIS businesses and early extinguishment of debt, the Company's effective income tax rate was 40.0% for the nine and three month periods ended September 30, 2000, as compared with 40.5% during the year ended December 31, 1999.

LIQUIDITY AND CAPITAL RESOURCES:

     Cash and short-term investments are $388.8 million at September 30, 2000, a decrease of $2.4 million from December 31, 1999. The decrease is due primarily to net cash paid of $183.7 million in

connection with acquisitions and minority interest investments, partially offset by an increase in net income and strong cash flow from operations. The allowance for doubtful accounts declined from $34.1 million at December 31, 1999 to $21.8 million at September 30, 2000. The decline is due primarily to the write-off of old receivables deemed to be uncollectable. Because these receivables had previously been reserved and expensed, the write-off has no effect on the statement of operations or financial position of the Company.

     The Company expects that its existing cash resources and cash generated from operations will be sufficient to meet its operating requirements, contingent payment obligations related to business acquisitions, and ordinary capital spending needs for at least the next twelve months. Furthermore, the Company has a $150.0 million credit agreement and believes it has the capacity to secure additional credit or issue equity to finance additional capital needs.

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     The Company has not recently used derivative financial instruments to manage risk exposures or for trading or speculative purposes. The Company invests available cash in short-term, highly liquid financial instruments, with a substantial portion of such investments having initial maturities of three months or less. While changes in interest rates could decrease the Company's interest income, the Company does not consider the interest rate risk for these investments to be material. As of September 30, 2000, the Company continues to hold an equity investment equal to approximately 16.7% of the common stock in Tecnomatix Technologies Ltd. (NASDAQ: TCNO), which was acquired in connection with the 1999 pooling-of-interests transaction with Oshap. The risks associated with this investment include risks associated with the technology sector of the public finance markets, which has recently been volatile, foreign currency risk, and technology risk. The Company does not believe that it has a material exposure to the risks associated with this investment.

     While approximately 20% of the Company's revenues come from sales to customers located outside of the United States, approximately one-half of those revenues are U.S. dollar-denominated sales by the Company's U.S.-based operations. For the Company's foreign operations, the Company generally matches local currency revenues with local currency costs. For these reasons, the Company does not believe that it has a material exposure to changes in foreign currency exchange rates.

Part II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS: None.

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

(a) On July 18, 2000, the Company's board of directors adopted a Stockholder Rights Plan under which all stockholders of record as of July 20, 2000 received rights to purchase shares of Series A Junior Participating Preferred Stock ("Preferred Stock").

Each right will detach from the common stock and trade separately should any person or group acquire beneficial ownership of 15% or more of the Company's common stock or announce a tender offer for 15% or more of the Company's common stock. If a person or group acquires beneficial ownership of 15% or more of the Company's common stock (an "Acquiring Person"), all rights except for those held by the Acquiring Person become rights to purchase one one-hundredth of one share of Preferred Stock for $175, or $175 of the Company's common stock at a 50% market discount, subject to adjustment by the Company's board of directors. If the Company merges, consolidates or engages in a similar transaction with an Acquiring Person, each holder has a "flip over" right to buy discounted stock in the acquiring entity.

These rights were distributed as a dividend at the rate of one right for each share of common stock of the Company held by stockholders of record as of the close of business on July 20, 2000. Until the occurrence of certain events, the rights are represented by and traded in tandem with common stock, and cannot be separately traded. Under certain circumstances, the rights are redeemable at a price of $0.01 per right. Further, upon the occurrence of certain events, the Company's board of directors has the option to exchange one share of common stock per right. The rights expire on July 20, 2010. The rights have no voting rights.

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 AND REPORTS ON FORM 8-K

(a)Exhibits:

3.2 Amended and Restated Bylaws of the Company.

27.1 Financial Data Schedule for the nine months ended September 30, 2000.

99.1 Press Release, dated as of July 20, 2000 entitled “SunGard Announces Second Quarter 2000 Results and Adoption of Stockholder Rights Plan" (incorporated by reference to the Company's Current Report on Form 8-K filed with the Commission on July 21, 2000).

99.2 Rights Agreement dated as of July 18, 2000 between SunGard Data Systems Inc. and Wells Fargo Bank Minnesota, N.A. (incorporated by reference to the Company's Current Report on Form 8-K filed with the Commission on July 21, 2000) .

99.3 Registrant’s Certificate of Designation of Series A Junior Participating Preferred Stock (incorporated by reference to the Company's Current Report on Form 8-K filed with the Commission on July 21, 2000).

99.4 Form of Rights Certificate (incorporated by reference to the Company's Current Report on Form 8-K filed with the Commission on July 21, 2000).

(b) Reports on Form 8-K:

Form 8-K filed on July 21, 2000 relating to the Company's adoption of a Stockholder Rights Plan on July 18, 2000.

SIGNATURES

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

		SUNGARD DATA S YSTEMS INC.
Date:	November 14, 2000	By:	s/ Michael J. Ruane
			Michael J. Ruane
		Vice President-Finance and Chief Financial Officer
			(Principal Financial Officer)

LIST OF EXHIBITS
NUMBER	EXHIBIT
3.2	Amended and Restated Bylaws of the Company.
27.1	Financial Data Schedule for the nine months ended September 30, 2000.
99.1	Press Release, dated as of July 20, 2000 entitled “SunGard Announces Second
	Quarter 2000 Results and Adoption of Stockholder Rights Plan" (incorporated by
	reference to the Company's Current Report on Form 8-K filed with the Commission
	on July 21, 2000).
99.2	Rights Agreement dated as of July 18, 2000 between SunGard Data Systems Inc.
	and Wells Fargo Bank Minnesota, N.A. (incorporated by reference to the
	Company's Current Report on Form 8-K filed with the Commission on July 21,
	2000).
99.3	Registrant’s Certificate of Designation of Series A Junior Participating Preferred
	Stock (incorporated by reference to the Company's Current Report on Form 8-K
	filed with the Commission on July 21, 2000).
99.4	Form of Rights Certificate (incorporated by reference to the Company's Current
	Report on Form 8-K filed with the Commission on July 21, 2000).

EX-3.2

EXHIBIT 3.2

AMENDED AND RESTATED BY-LAWS
OF
SUNGARD DATA SYSTEMS INC.
(a Delaware Corporation)

ARTICLE I

OFFICES

The registered office of the Corporation in the State of Delaware shall be located in the City of Wilmington, County of New Castle. The Corporation may establish or discontinue, from time to time, such other offices, within or without the State of Delaware, as the Board of Directors may designate.

ARTICLE II

MEETINGS OF STOCKHOLDERS

     Section 1. Place of the Meetings. All meetings of stockholders shall be held at such place or places, within or without the State of Delaware, as may from time to time be fixed by the Board of Directors, or as shall be specified in the respective notices, or waivers of notice, thereof.

     Section 2. Annual Meeting. The annual meeting of Stockholders for the election of Directors and the transaction of other business shall be held on such date and at such place as may be designated by the Board of Directors. At each annual meeting, the stockholders entitled to vote shall elect a Board of Directors and may transact such other proper business as may come before the meeting, irrespective of whether the notice of said meeting contains any reference thereto, except as otherwise provided by applicable law.

     Section 3. Special Meetings. A special meeting of the stockholders, or of any class thereof entitled to vote, for any other purpose or purposes, may be called at any time by the Board of Directors, the Chairman of the Board or the President and shall be called by the Chairman of the Board, the President or the Secretary upon the written request of stockholders holding of record at least 50% of the outstanding shares of stock of the Corporation entitled to vote at such meeting. Such written request shall state the purpose or purposes for which such meeting is to be called.

     Section 4. Notice of Meetings. Except as otherwise provided by law, written notice of each meeting of stockholders, whether annual or special, stating the place, date and hour of the meeting, and in the case of a special meeting, stating the purpose or purposes for which the meeting is called, shall be given not less than ten days nor more than sixty days before the date on which the meeting is to be held to each stockholder of record entitled to vote thereat by delivering a notice thereof to him personally or by mailing such notice in a postage prepaid envelope directed to him at his address as it appears on the records of the Corporation, unless he shall have filed with the Secretary of the Corporation a written request that notices intended for him be directed to another address, in which case such notice shall be directed to him at the address designated in such request. Notice shall not be required to be given to any stockholder who shall waive such notice in writing, whether prior to or after such meeting, or who shall attend such meeting in person or by proxy unless such attendance is for the express purpose of objecting, at the beginning of such meeting, to the transaction of any business because the meeting is not lawfully called or convened. Every notice of a special meeting of the stockholders shall state, in addition to the place, date and hour of the meeting, the purpose or purposes thereof.

     Section 5. List of Stockholders. It shall be the duty of the Secretary or other officer of the Corporation who shall have charge of the stock ledger to prepare and make, at least ten days before every meeting of the stockholders, a complete list of the stockholders entitled to vote thereat, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in his name. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting or, if not so specified, at the place where the meeting is to be held. The list shall be kept and produced at the time and place of the meeting during the whole time thereof and subject to inspection of any stockholder who may be present. The original or duplicate ledger shall be the only evidence as to who are the stockholders entitled to examine such list or books of the Corporation or to vote in person or by proxy at such meeting.

     Section 6. Quorum. At each meeting of the stockholders, the holders of record of a majority of the issued and outstanding stock of the Corporation entitled to vote at such meeting, present in person or by proxy, shall constitute a quorum for the transaction of business, except where otherwise provided by law, the Certificate of Incorporation or these By-laws. In the absence of a quorum, any officer entitled to preside at, or act as secretary of, such meeting shall have the power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be constituted, and thereupon, any business may be transacted at the adjourned meeting that might have been transacted at the meeting as originally called.

     Section 7. Conduct of the Meetings. The Chairman of the Board shall preside at all meetings. In the absence of the Chairman of the Board, the President shall preside or, in his absence, any officer designated by the Board of Directors. The officer presiding over the meeting of stockholders may establish such rules and regulations for the conduct of the meeting as he may deem to be reasonably necessary or desirable for the orderly and expeditious conduct of the meeting.

     Section 8. Voting. Every stockholder of record who is entitled to vote shall at every meeting of the stockholders be entitled to one vote for each share of stock held by him on the record date; except, however, that shares of its own stock belonging to the Corporation or to another corporation, if a majority of the shares entitled to vote in the election of the directors of such other corporation is held by the Corporation, shall neither be entitled to vote nor counted for the quorum purposes. Nothing in this Section shall be construed as limiting the right of the Corporation to vote its own stock held by it in a fiduciary capacity. At all meetings of the stockholders at which a quorum is present, all matters shall be decided by majority vote of the shares of the stock present in person or by proxy and entitled to vote thereon, except as otherwise required by law or the Certificate of Incorporation. The vote on all elections of Directors shall be by written ballot, and upon demand of any stockholder, the vote on any other question before the meeting shall be by ballot or otherwise as determined by the chairman of the meeting. On a vote by written ballot, each ballot shall be signed by the stockholder voting, or in his name by his proxy, if there be such proxy, and shall state the number of shares voted by him and the number of votes to which each share is entitled.

     Section 9. Proxies. Each stockholder entitled to vote at a meeting of stockholders or to express consent to corporate action in writing without a meeting shall have the right to do so either in person or by an agent or agents authorized by a proxy granted in accordance with Delaware law. An agent so appointed need not be a stockholder. No proxy shall be valid after the expiration of three years from the date thereof unless the proxy provides for a longer period.

     Section 10. Action without a Meeting. No action shall be taken by the stockholders except at an annual or special meeting of stockholders called in accordance with these By-laws, and no action shall be taken by the stockholders by written consent.

ARTICLE III

BOARD OF DIRECTORS

     Section 1. Powers. The business and affairs of the Corporation shall be managed under the direction of the Board of Directors.

     Section 2. Nomination. Beginning with the annual meeting of the stockholders to be held in 1987, nominations for directors to be elected at an annual meeting of the stockholders must be submitted to the Secretary of the Corporation in writing not later than the close of business on the thirtieth calendar day immediately preceding the date of the meeting. All late nominations shall be rejected. Notwithstanding the forgoing, at any time prior to the election of directors at a meeting of stockholders, the Board of Directors may designate a substitute nominee to replace any bona fide nominee who was nominated as set forth above and who, for any reason, becomes unavailable for election as a director.

     Section 3. Election and Term. Except as otherwise provided by law, Directors shall be elected at the annual meeting of stockholders and shall hold office until the next annual meeting of stockholders and until their successors are elected and qualify, or until they sooner die, resign or are removed. At each annual meeting of stockholders at which a quorum is present, the persons receiving a plurality of the votes cast shall be the Directors .

     Section 4. Number. The number of Directors shall be such number as shall be determined from time to time by the Board of Directors.

     Section 5. Quorum and Manner of Acting. Unless otherwise provided by law, the presence of 50% of the whole Board of Directors shall be necessary to constitute a quorum for the transaction of business. In the absence of a quorum, a majority of the Directors present may adjourn the meeting from time to time until the quorum shall be present. Notice of any adjourned meeting need not be given. At all meetings of Directors at which a quorum is present, all matters shall be decided by the affirmative vote of the majority of the Directors present, except as otherwise required by law. The Board of Directors may hold its meetings at such place or places within or without the State of Delaware as the Board of Directors may from time to time determine or as shall be specified in the respective notices, or waivers of notice, thereof.

     Section 6. Organization Meeting. Immediately after each annual meeting of stockholders for the election of the Directors, the Board of Directors shall meet at the place of the annual meeting of the stockholders for the purpose of organization, the election of officers and the transaction of other business. Notice of such meeting need not be given. If such meeting is held at any other time or place, notice thereof must be given as hereinafter provided for special meetings of the Board of Directors, subject to the execution of a waiver of the notice thereof signed by, or the attendance at such meeting of, all Directors who may not have received such notice.

     Section 7. Regular Meetings. Regular meetings of the Board of Directors may be held, without notice, at such time and place, within or without the State of Delaware, as shall from time to time be determined by resolution of the Board of Directors. At such meetings, the Board of Directors may transact such business as may be brought before the meeting.

     Section 8. Special Meetings. Special meetings of the Board of Directors shall be held whenever called by the Chairman of the Board or the President or by a majority of the Directors. Notice of each such meeting shall be given orally or in writing, by telephone, including a voice messaging system or other system or technology designed to record and communicate messages, facsimile, telegraph or telex, or by electronic mail or other electronic means, at least twenty-four (24) hours before the date and time of the meeting, or sent in writing to each Director either by first class mail, charges prepaid, at least three days before the date of the meeting or by a reputable overnight delivery service, at least two days before the date of the meeting. Each such notice shall state the time and place of the meeting and, as may be required, the purposes thereof. Notice of any meeting of the Board of Directors need not be given to any Director if he shall sign a written waiver thereof either before or after the time stated therein for such meeting, or if he shall be present at the meeting. Unless limited by law, the Certificate of Incorporation, these By-laws or terms of the notice thereof, any and all business may be transacted at any meeting even though no notice shall have been given.

     Section 9. Removal of Directors. Any Director or the entire Board of Directors may be removed, with or without cause, at any time, by action of the holders of record of the majority of the issued and outstanding stock of the Corporation entitled to vote at an election of the directors (a) present in person or by proxy at a meeting of the holder of such stock, or (b) by a consent in writing in the manner contemplated in Section 10 of Article II, and the vacancy or vacancies in the Board of Directors caused by any such removal may be filled by action of such a majority at such meeting or at any subsequent meeting or by consent.

     Section 10. Resignations. Any Director of the Corporation may resign at any time by giving notice to the Chairman of the Board, the President or the Secretary of the Corporation. The resignation of any Director shall take effect upon receipt of notice thereof or at such later time as shall be specified in such notice, and acceptance of such resignation shall not be necessary to make it effective.

     Section 11. Vacancies. Any newly created directorships or vacancies occurring in the Board by reason of death, resignation, retirement, disqualification or removal, with or without cause, may be filled by a majority of the directors then in office though less than a quorum. Any Director so chosen, whether selected to fill a vacancy or elected to a new directorship, shall hold office until the next meeting of stockholders at which an election of directors is in the regular order of business, and until his successor has been elected and qualifies, or until he sooner dies, resigns or is removed.

     Section 12. Compensation of Directors. No Director shall be entitled to any salary as such, but Directors shall be entitled to such compensation for their services, in the form of cash or equity of the Corporation, or a combination thereof, as may be approved by the Board of Directors from time to time, including, if so approved, reasonable annual fees and reasonable fees for attending meetings. Directors may also be reimbursed by the Corporation for all reasonable expenses incurred in travelling to and from meetings of the Board of Directors and meetings of any committee of the Board of Directors. Nothing herein contained shall be construed to preclude any Director from serving the Corporation in any other capacity as an officer, agent, employee, or otherwise and receiving compensation therefor.

     Section 13. Action without a Meeting. Any action required or permitted to be taken at any meeting of the Board of Directors may be taken without a meeting if written consent thereto is signed by all members of the Board, and such written consent is filed with the minutes or proceedings of the Board.

     Section 14. Telephonic Participation in Meetings. Any member of the Board of Directors, or any committee thereof, may participate in a meeting by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and such participation shall constitute presence in person at such meetings.

ARTICLE IV

COMMITTEES

     Section 1. Committees. The Board of Directors may, by resolution passed by a majority of the entire Board, designate one or more committees, each committee to consist of one or more of the Directors of the Corporation, which, to the extent provided in the resolution and permitted by law, shall have and may exercise the powers of the Board of Directors in the management of the business and the affairs of the Corporation and may authorize the seal of the Corporation to be affixed to all papers which may require it. The Board of Directors may designate one or more Directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. Such committee or committees shall have such name or names as may be determined from time to time by resolution adopted by the Board of Directors. Each committee shall keep regular minutes of its meetings and report the same to the Board of Directors when required.

     Section 2. Appointment of Additional Members to Committees. In the absence or disqualification of any member of such committee or committees, the member or members thereof present at any meeting and not disqualified from voting, whether or not he or they constitute a quorum, may unanimously appoint another Director to act at the meeting in the place of any such absent or disqualified members.

ARTICLE V

OFFICERS

     Section 1. Principal Officers. The Board of Directors shall elect, if and when designated by the Board of Directors, a Chairman of the Board, a Chief Executive Officer, a President, a Secretary and a Treasurer, and may in addition elect one or more Vice Presidents and such other officers as it deems fit; the Chairman of the Board, the President, the Secretary, the Treasurer, the Vice Presidents, if any, being the principal officers of the Corporation. One person may hold, and perform the duties of, any two or more of the said offices.

     Section 2. Election and Term of Office. The principal officers of the Corporation shall be elected annually by the Board of Directors at the organization meeting thereof. Each such officer shall hold office until his successor shall have been elected and shall qualify, or until his earlier death, resignation or removal.

     Section 3. Other Officers. In addition, the Board may elect, or the Chairman of the Board or President may appoint, such other officers as they deem fit. Any such other officers chosen by the Board of Directors shall be subordinate officers and shall hold office for such period, have such authority and perform such duties as the Board of Directors, the Chairman of the Board or the President may from time to time determine.

     Section 4. Removal. Any officer may be removed, either with or without cause, at any time, by resolution adopted by the Board of Directors at any regular meeting of the Board, or at any special meeting of the Board called for that purpose, at which a quorum is present.

     Section 5. Resignations. Any officer may resign at any time by giving written notice to the Chairman of the Board, the President, the Secretary or the Board of Directors. Any such resignation shall take effect upon receipt of such notice or at any later time specified therein, and the acceptance of such resignation shall not be necessary to make it effective.

     Section 6. Vacancies. A vacancy in any office may be filled for the unexpired portion of the term in the manner prescribed in these By-laws for election or appointment to such office for such term.

     Section 7. Chairman of the Board. The Chairman of the Board shall have general powers and duties of supervision and management usually vested in the office of the chairmen of the board of a corporation. The Chairman of the Board of Directors shall preside, if present, at all meetings of the Board of Directors and at all meetings of the stockholders. He shall have and perform such other duties as from time to time may be assigned to him by the Board of Directors.

     Section 8. President. Unless some other officer has been elected Chief Executive Officer, the President shall be the chief executive officer of the Corporation and shall have the general powers and duties vested in the office of chief executive officer of a corporation. He shall have general supervision, direction and control of the business of the corporation. He shall, in the absence of the Chairman, preside at all meetings of the shareholders and the Board of Directors.

     Section 9. Vice President. Each Vice President shall have such powers and shall perform such duties as shall be assigned to him by the Board of Directors.

     Section 10. Treasurer. The Treasurer shall have charge and custody of, and be responsible for, all funds and securities of the Corporation. He shall exhibit at all reasonable times his books of account and records to any of the Directors of the Corporation upon application during business hours at the office of the Corporation where such books and records shall be kept; when requested by the Board of Directors, he shall render a statement of the condition of the finances of the Corporation at any meeting of the Board or at the annual meeting of stockholders; he shall receive, and give receipt for, moneys due and payable to the Corporation from any source whatsoever; in general, he shall perform all the duties incident to the office of Treasurer and such other duties as from time to time may be assigned to him by the Chairman of the Board, the President or the Board of Directors. The Treasurer shall give such bond, if any, for the faithful discharge of his duties as the Board of Directors may require.

     Section 11. Secretary. The Secretary, if present, shall act as secretary at all meetings of the Board of Directors and of the stockholders and keep the minutes thereof in a book or books to be provided for that purpose; he shall see that all notices required to be given by the Corporation are duly given and served; he shall have charge of the stock records of the corporation, he shall see that all reports, statements and other documents required by law are properly kept and filed; and in general he shall perform all the duties incident to the office of Secretary and such other duties as from time to time may be assigned to him by the Chairman of the Board, the President or the Board of Directors.

     Section 12. Salaries. The salaries of the principal officers shall be fixed from time to time by the Board of Directors, and the salaries of any other officers may be fixed by the Chairman.

ARTICLE VI

INDEMNIFICATION

     Section 1. Mandatory Indemnification. The Corporation shall, to the full extent permitted by Section 145 of the Delaware General Corporation Law, as amended from time to time, indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he is or was a director, officer or employee of the Corporation or of any of its subsidiaries.

     Section 2. Optional Indemnification. In all situations in which indemnification is not mandatory under Section 1 of this Article VI, the Corporation may, to the full extent permitted by Section 145 of the Delaware General Corporation Law, as amended from time to time, indemnify all persons whom it is empowered to indemnify pursuant thereto.

ARTICLE VII

SHARES AND THEIR TRANSFER

     Section 1. Certificate for Stock. Every stockholder of the Corporation shall be entitled to a certificate or certificates, to be in such form as the Board of Directors shall prescribe, certifying the number of shares of the capital stock of the Corporation owned by him. No certificates shall be issued for partly paid shares.

     Section 2. Stock Certificate Signature. The certificates for such stock shall be numbered in the order in which they shall be issued and shall be signed by the Chairman of the Board or the President and the Secretary or Treasurer of the Corporation and its seal shall be affixed thereto. If such certificate is countersigned (1) by a transfer agent other than the Corporation or its employee, or (2) by a registrar other than the Corporation or its employee, the signatures of such officers of the Corporation may be facsimiles. In case any officer of the Corporation who has signed, or whose facsimile signature has been placed upon, any such certificate shall have ceased to be such officer before such certificate is issued, it may be issued by the Corporation with the same effect as if he were such officer at the date of issue.

     Section 3. Stock Ledger. A record shall be kept by the Secretary or by any other officer, employee or agent designated by the Board of Director of the name of each person, firm or corporation holding capital stock of the Corporation, the number of shares represented by, and the respective dates of, each certificate for such capital stock, and in case of cancellation of any such certificate, the respective dates of cancellation.

   Section 4. Registrations of Transfers of Stock. Registrations of transfers of shares of the capital stock of the Corporation shall be made on the books of the Corporation by the registered holder thereof, or by his attorney thereunto authorized by power of attorney duly executed and filed with the Secretary of the Corporation or with a transfer clerk or a transfer agent appointed as provided in Section 5 of this Article VII, and on surrender of the certificate or certificates for such shares properly endorsed, with such proof of authenticity of the signature as the Corporation or its agents may reasonably require, and the payment of all taxes thereon. The person in whose name shares of stock stand on the books of the Corporation shall be deemed the owner thereof for all purposes as regards the Corporation; provided, however, that whenever any transfer of shares shall be made for collateral security, and not absolutely, it shall be so expressed in the entry of the transfer if, when the certificates are presented to the Corporation for transfer, both the transferor and the transferee request the Corporation to do so.

     Section 5. Regulations. The Board of Directors may make such rules and regulations as it may deem expedient, not inconsistent with the Certificate of the Incorporation or these By-laws, concerning the issue, transfer and registration of certificates for shares of the stock of the Corporation. It may appoint, or authorize any principal officer or officers to appoint, one or more transfer clerks or one or more transfer agents and one or more registrars, and may require all certificates of stock to bear the signature or signatures of any of them.

     Section 6. Lost, Stolen, Destroyed or Mutilated Certificates. Before any certificates for stock of the Corporation shall be issued in exchange for certificates which shall become mutilated or shall be lost, stolen, or destroyed, proper evidence of such loss, theft, mutilation or destruction shall be furnished to the Corporation, and if required by the Board of Directors, the owner of the lost, stolen or destroyed certificate, or his legal representatives, shall be required to give the Corporation a bond sufficient to indemnify the Corporation against any claim made against it on account of the alleged loss, theft or destruction of any such certificate.

     Section 7. Record Dates. For the purpose of determining the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect to any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board of Directors may fix, in advance, a date as a record date for any such determination of stockholders. Such record date shall not be more than sixty nor less than ten days before the date of such meeting, nor shall it be more than sixty days prior to any other action.

ARTICLE VIII

MISCELLANEOUS PROVISIONS

     Section 1. Corporate Seal. The Board of Directors shall provide a corporate seal, which shall be in the form of a circle and shall bear the name of the Corporation and words and figures showing that it was incorporated in the State of Delaware in the year 1982. The Secretary shall be the custodian of the seal. The Board of Directors may authorize a duplicate seal to be kept and used by any other officer.

     Section 2. Voting of Stock Owned by the Corporation. The Board of Directors may authorize any person on behalf of the Corporation to attend, vote and grant proxies to be used at any meeting of stockholders of any corporation (except the Corporation) in which the Corporation may hold stock.

     Section 3. Dividends. Subject to the provisions of the Certificate of Incorporation, the Board of Directors may, out of funds legally available therefor, at any regular or special meeting, declare dividends upon the capital stock of the Corporation as and when they deem expedient. Before declaring any dividend, there may be set apart out of any funds of the Corporation available for dividends such sum or sums as the Directors from time to time in their discretion deem proper for working capital or as a reserve fund to meet contingencies or for equalizing dividends or for such other purposes as the Board of Directors shall deem conducive to the interests of the Corporation.

     Section 4. Emergency By-laws. In the event of any emergency resulting from a nuclear attack or similar disaster, and during the continuance of such emergency, the following By-law provisions shall be in effect, notwithstanding any other provisions of these By-laws:

(a)	A meeting of the Board of Directors or of any committee thereof may be called by any officer or director upon one hour's notice to all persons entitled to notice whom, in the sole judgment of the notifier, it is feasible to notify;
(b)	The director or directors in attendance at the meeting of the Board of Directors or of any committee thereof shall constitute a quorum; and

(c) These By-laws may be amended or repealed, in whole or in part, by a majority vote of the directors attending any meeting of the Board of Directors, provided such amendment or repeal shall only be effective for the duration of such emergency.

     Section 5. Severability. If any provision of these By-laws is illegal or unenforceable as such, such illegality or unenforceability shall not affect any other provision of these By-laws and such other provisions shall continue in full force and effect.

ARTICLE IX

AMENDMENTS OR REPEAL

     Section 1. Amendments or Repeal. These By-laws of the Corporation may be altered, amended or repealed, in whole or in part, by the Board of Directors at any regular or special meeting of the Board of Directors or by the affirmative vote of the holders of record of a majority of the issued and outstanding stock of the Corporation (a) present in person or by proxy at a meeting of holders of such stock and entitled to vote thereon, or (b) by a consent in writing in the manner contemplated in Section 10 of Article II; provided, however, that notice of the proposed alteration, amendment or repeal is contained in the notice of such meeting. By-laws, whether made or altered by the stockholders or by the Board of Directors, shall be subject to alteration or repeal by the stockholders as provided in this Section 1 of Article IX.

     Section 2. Recording Amendments and Repeals. The text of all amendments and repeals to these By-laws shall be attached to the By-laws with a notation of the date of each such amendment or repeal and a notation of whether such amendment or repeal was adopted by the Board of Directors or the stockholders.

ARTICLE X

APPROVAL OF AMENDED BY-LAWS AND
RECORD OF AMENDMENTS AND REPEALS

     Section 1. Approval and Effective Date. These By-laws have been approved as the By-laws of the Corporation this 31st day of January, 1986 and shall be effective as of said date.

Section 2. Amendments or Repeals.
Section Involved	Date Amended or Repealed	Approved By
Article II, Section 9	March 30, 1999	Board of Directors
Article III, Section 4	August 11, 1999	Board of Directors
Article III, Section 4	November 15, 1999	Board of Directors

Article II, Section 4	August 18, 2000	Board of Directors
Article II, Section 10	August 18, 2000	Board of Directors
Article III, Section 4	August 18, 2000	Board of Directors
Article III, Section 8	August 18, 2000	Board of Directors
Article III, Section 12	August 18, 2000	Board of Directors
Article III, Section 14	August 18, 2000	Board of Directors
Article V, Section 1	August 18, 2000	Board of Directors
Article V, Section 8	August 18, 2000	Board of Directors

EX-27

 



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<F1>Excludes selling, marketing and administration costs and all items
described in <F2>.
<F2>Merger costs, including purchased in-process research and development of
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<F3>Includes all items described in <F2>, totaling $0.04 per both basic and
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