SecProbe.io

<DOCUMENT>
<TYPE>CORRESP
<SEQUENCE>1
<FILENAME>filename1.txt
<TEXT>

                                                                   CONFIDENTIAL
                                                                   ------------

                              [SKADDEN LETTERHEAD]

                                                     July 25, 2005

VIA EDGAR
---------
Craig D. Wilson
Division of Corporate Finance
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549

                 Re:       HYPERION SOLUTIONS CORPORATION
                           Forms 8-K filed on April 21, 2005, January 31, 2005,
                           October 27, 2004 and July 21, 2004; and Form 10-Q
                           for the quarter ended March 31, 2005, filed on
                           May 10, 2005.
                           File No. 0-26934

Dear Mr. Wilson:

         Set forth below are Hyperion Solutions Corporation's (the "Company")
responses to the comments raised in the Securities and Exchange Commission's
(the "Commission") letter to the Company dated June 28, 2005 (the "Comment
Letter"). For your convenience, we have numbered each of the Company's
responses to correspond to the numbered comments in the Comment Letter.
Additionally, the text of each of the numbered comments in the Comment Letter
has been duplicated in bold type to precede each of the Company's responses.

Forms 8-K filed on April 21, 2005, January 31, 2005, October 27, 2004 and
July 21, 2004
------------------------------------------------------------------------------

   1.     With regard to the presentation of a "Reconciliation of GAAP to Pro
          Forma Consolidated Statements of Operations" we have the following
          comments:

          a.   Pro forma terminology has very specific meaning in accounting
               literature. Such terminology applies to certain disclosures
               required by GAAP and by Article 11 of Regulation S-X. In future
               filings, please revise your presentation to omit the pro forma
               terminology when referring to your non-GAAP information or tell
               us why you believe your use of this term is appropriate.

<PAGE>

Mr. Craig D. Wilson
Securities and Exchange Commission
July 25, 2005
Page 2

          b.   The purpose of your non-GAAP statement of operations appears to
               be to reconcile non-GAAP net income to GAAP net income, however,
               your reconciliation presents numerous adjusted line items and
               subtotals, each of which constitutes a separate non-GAAP measure
               that must be justified and individually reconciled to fully
               conform to the requirements of Item 10(e)(1)(i) of Regulation
               S-K. Either delete the non-GAAP statement of operations from all
               future press releases or expand to present detailed and specific
               disclosure of the following for each non-GAAP measure:

               i.   The substantive reasons why management believes the
                    non-GAAP measure provides useful information to investors;
               ii.  The specific manner in which management uses the non-GAAP
                    measure to conduct or evaluate its business;
               iii. The economic substance behind management's decision to use
                    the measure; and
               iv.  The material limitations associated with the use of the
                    non-GAAP measure as compared to the use of the most
                    directly comparable GAAP measure and the manner in which
                    management compensates for these limitations when using the
                    non-GAAP measure.

     Response
     --------

         The Company addressed the Staff's concerns in its press release dated
July 21, 2005, relating to its operating results for the quarter and year ended
June 30, 2005, and the Company will endeavor to do so in future press releases
announcing similar financial information.

Form 10-Q for the quarter ended March 31, 2005
----------------------------------------------

Note 1 - Basis of Presentation, page 5
--------------------------------------

   2.     Related to the reclassification of $192.9 million of auction rate
          securities described here, and on page 21, we have the following
          comments:

          a.   Tell us how you determined that prospective disclosure of these
               changes was appropriate and what consideration you gave to
               characterizing these changes as restatements and amending
               previously filed Exchange Act reports. Your response should

<PAGE>

Mr. Craig D. Wilson
Securities and Exchange Commission
July 25, 2005
Page 3

               demonstrate your consideration of materiality, as described in
               SAB No. 99.

     Response
     --------

         In connection with the preparation of the Company's operating results
for the quarter and nine months ended March 31, 2005, the Company performed a
thorough analysis to determine the materiality of the changes, based on the
guidance given in SAB No. 99. The Company noted that SAB No. 99 instructs
registrants to "consider both `quantitative' and `qualitative' factors in
assessing an item's materiality." As a result of the SAB No. 99 analysis
performed by the Company, the Company concluded that the prospective disclosure
of the changes would be adequate and appropriate.

         The Company first calculated the quantitative nature of the change. As
of June 30, 2004 the Company's auction rate securities were $192.9 million, or
24% of the Company's total assets. The Company noted from SAB No. 99 that,
"(t)he FASB rejected a formulaic approach to discharging `the onerous duty of
making materiality decisions' in favor of an approach that takes into account
all the relevant considerations. In so doing, the FASB made clear that -
(M)agnitude by itself, without regard to the nature of the item and the
circumstances in which the judgment has to be made, will not generally be a
sufficient basis for a materiality judgment." The following table reflects the
historical impact of the reclassification as it relates to the balance sheet
and statement of cash flow presentation that was reviewed as part of the
quantitative analysis:

                                              As of June, 2004
                                                ($ millions)

                                 As reported     Reclassification     As revised
Cash and cash equivalents          $365.2            ($192.9)          $172.3
Short term investments                3.0              192.9            195.9
Current assets                      532.4                  -            532.4
  Net cash provided by
operating activities                 86.5                  -             86.5

                                              As of June, 2003
                                                ($ millions)

                                 As reported     Reclassification     As revised
Cash and cash equivalents          $398.0            ($230.7)          $167.3
Short term investments               18.5              230.7            249.2
Current assets                      546.7                  -            546.7
  Net cash provided by
operating activities                 88.1                  -             88.1

<PAGE>

Mr. Craig D. Wilson
Securities and Exchange Commission
July 25, 2005
Page 4

         The Company reviewed the reclassification relative to several key
financial metrics and determined the reclassification did not impact key
metrics, such as working capital ratios or net cash provided by operating
activities.

         The Company also examined and considered the qualitative factors
related to the change and noted the following:

           o   The change did not affect the Company's Statements of
               Operations;
           o   The change did not affect the Company's total current assets,
               total shareholders' equity or cash flow from operations;
           o   The change did not affect whether or not the Company met
               analyst's expectations of revenue or earnings;
           o   The change did not affect the Company's compliance with loan
               covenants or other contractual requirements;
           o   The change did not affect management's compensation; and
           o   The change did not affect the Company's compliance with
               regulatory requirements.

         However, with a view to ensuring full disclosure was made, the Company
nonetheless added a footnote to the Consolidated Balance Sheet included on the
Form 8-K filed and the press release issued April 21, 2005 that described the
reclassification of the auction rate securities. The footnote reads as follows:

               "Certain Amounts in fiscal 2004 as reported on the condensed
               Consolidated Balance Sheet and the condensed Consolidated
               Statements of Cash Flows have been reclassified to conform to
               the current year presentation. We reclassified $193 million
               in auction rate securities from cash and cash equivalents to
               short-term investments on the June 30, 2004 consolidated
               balance sheet. The reclassification to short-term investments
               is based on the latest interpretation of cash equivalents
               pursuant to Statement of Financial Accounting Standards No.
               95 ("SFAS 95"), `Statement of Cash Flows.'"

         In addition, David Odell, Chief Financial Officer, specifically
identified the classification change in his April 21, 2005 earnings call
script. The statement read as follows:

               "I would also like to point out that we have reclassified our
               investments in auction rate notes. These were previously included

<PAGE>

Mr. Craig D. Wilson
Securities and Exchange Commission
July 25, 2005
Page 5

               in cash and cash equivalents but are now included in short-term
               investments. This has been done as a result of a clarification
               of accounting classification and has no impact on total current
               assets or cash flow from operations."

         The Company also weighed qualitative and quantitative guidance factors
reflected in SAB No. 99 in determining to disclose prospectively. In
particular, the Company had no debt and correspondingly no debt covenants that
would have been impacted by the reclassification of the auction rate
securities. Also, there were no senior management compensation incentives based
around the classification of these assets. The Company communicated its SAB No.
99 conclusions and disclosure actions regarding auction rate securities to its
Audit Committee, as part of the Company's 10-Q review process, and received
their concurrence. The Company also held discussions with its independent
auditors and outside legal counsel to review its decision to disclose this
reclassification on a prospective basis, and received their concurrence. Based
upon the conclusions drawn from the facts mentioned above, the Company
concluded that the prospective disclosure of the changes would be adequate and
appropriate.

         SAB No. 99 states that "a matter is `material' if there is a
substantial likelihood that a reasonable person would consider it important."
However, after disclosing the change in the 8-K filed on April 21, 2005, the
press release issued April 21, 2005 and the discussion in the earnings call,
the Company witnessed no market reaction attributable to the reclassification,
and, since that time, no investor or analyst has ever asked Hyperion management
a question regarding the change. As a result, the Company remains confident
that its assessment as to materiality was accurate.

          b.   We note that it is your policy to classify all marketable
               investments as available-for-sale (page 40 of Form 10-K filed on
               September 13, 2004.) Tell us the basis for your classification
               of the auction rate securities as current and available-for-sale
               by addressing how you determined that you have a reasonable
               expectation of completing a successful auction with the
               subsequent twelve-month period. Refer to paragraph 17 of SFAS
               115 and Chapter 3A of ARB 43 as well as SFAS 95.

     Response
     --------

         SFAS 115 paragraph 17 states that, "(a)n enterprise that presents
a classified statement of financial position shall report individual
held-to- maturity securities, individual available-for-sale securities,
and individual trading securities as either current

<PAGE>

Mr. Craig D. Wilson
Securities and Exchange Commission
July 25, 2005
Page 6

or noncurrent, as appropriate, under the provisions of ARB No. 43, Chapter
3A, Working Capital-Current Assets and Current Liabilities."

           Paragraph 4 of ARB No. 43, Chapter 3A states:

                        "For accounting purposes, the term current assets is
                  used to designate cash and other assets or resources commonly
                  identified as those which are reasonably expected to be
                  realized in cash or sold or consumed during the normal
                  operating cycle of the business. Thus the term comprehends in
                  general such resources as (a) cash available for current
                  operations and items which are the equivalent of cash; (b)
                  inventories of merchandise, raw materials, goods in process,
                  finished goods, operating supplies, and ordinary maintenance
                  material and parts; (c) trade accounts, notes, and
                  acceptances receivable; (d) receivables from officers,
                  employees, affiliates, and others, if collectible in the
                  ordinary course of business within a year; (e) installment or
                  deferred accounts and notes receivable if they conform
                  generally to normal trade practices and terms within the
                  business; (f) marketable securities representing the
                  investment of cash available for current operations; and (g)
                  prepaid expenses such as insurance, interest, rents, taxes,
                  unused royalties, current paid advertising service not yet
                  received, and operating supplies. Prepaid expenses are not
                  current assets in the sense that they will be converted into
                  cash but in the sense that, if not paid in advance, they
                  would require the use of current assets during the operating
                  cycle."

          The Company views all of its marketable securities as "available for
current operations," regardless of the stated maturity dates, and therefore
classifies them as current assets on the consolidated balance sheet. The
Company actively manages its investment portfolio and regularly reviews
investment performance including auction rate securities. More specifically,
the Company actively manages risk by purchasing primarily AAA rated securities.
The auction rate securities that the Company has typically purchased perform an
auction every 28 to 35 days. The Company believes that there is a reasonable
expectation of completing a successful auction within the subsequent
twelve-month period based on its historical experience. The Company has
purchased auction rate securities for several years and the securities that the
Company has purchased have never had an unsuccessful auction. Based upon the
historical industry success of such auctions and the Company's specific
experience with auction rate securities, the Company had determined the risk