##### 









UNITED STATES SECURITIES AND EXCHANGE
COMMISSION

Washington, D.C. 20549


Form 10-K

|  |  |                                                                                             
|- |  | --------------------------------------------------------------------------------------------
|þ |  | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934    
| 
|  |  | For the Fiscal Year Ended June 27,
    2003                                                 
| 
|o |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR
    15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
| 
|  |  | For the transition period
    from:           to                                            

Commission File Number 000-31859

CRYSTAL DECISIONS, INC.

(Exact name of registrant as specified in its
charter)


|                                                                                       |  |                                            
|-------------------------------------------------------------------------------------- |  | -------------------------------------------
|Delaware                                                                               |  | 77-0537234                                 
|(State or other jurisdiction of
    incorporation or organization)                     |  | (I.R.S. Employer
    Identification Number)
|                                                                                      
|895 Emerson St.,
    Palo Alto, California(Address of principal executive
    offices) |  | 94301(Zip Code)                            

Telephone: (650) 838-7410

(Registrants telephone number, including
area code)


|                                                                |  |                                  
|--------------------------------------------------------------- |  | ---------------------------------
|Securities registered pursuant to
    Section 12(b) of the Act: |  | None                             
|Securities registered pursuant to
    Section 12(g) of the Act: |  | Common stock, par value of $0.001

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 þ          No

Indicate by check mark if disclosure of
delinquent filers pursuant to Item 405 of
Regulation S-K is not contained herein, and will not be
contained, to the best of the Registrants knowledge, in
definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment of
this
Form 10-K.     þ

Indicate by check mark whether the registrant is
an accelerated filer (as defined in Rule 12b-2 of the
Act.)     Yes          No þ

There is no public market for the
registrants securities and, therefore, the registrant had
no aggregate market value of securities held by non-affiliates
as of December 27, 2002.

On June 27, 2003, 76,091,581 shares of the
registrants common stock, $0.001 par value per share, were
issued and outstanding.



---






---



##### 



CRYSTAL DECISIONS, INC.

ANNUAL REPORT ON FORM 10-K

For the Fiscal Year Ended June 27,
2003


TABLE OF CONTENTS

|                                           |  |                                                                                          |     |      |    | 
|------------------------------------------ |  | ---------------------------------------------------------------------------------------- | --- | ---- | -- | 
|                                           |  |                                                                                          |     | Page
|                                           |  |                                                                                          |     |     
|PART I                                    
|Item 1.                                    |  | Business                                                                                 |     |      | 2  | 
|Item 2.                                    |  | Properties                                                                               |     |      | 14 | 
|Item 3.                                    |  | Legal Proceedings                                                                        |     |      | 14 | 
|Item 4.                                    |  | Submission of Matters to a Vote of Security
    Holders                                  |     |      | 14 | 
|PART II                                   
|Item 5.                                    |  | Market for Registrants Common Equity and
    Related Stockholder Matters                |     |      | 15 | 
|Item 6.                                    |  | Selected Financial Data                                                                  |     |      | 16 | 
|Item 7.                                    |  | Managements Discussion and Analysis of Financial
    Condition and Results of Operations |     |      | 17 | 
|Item 7A.                                   |  | Quantitative and Qualitative Disclosures About
    Market Risk                           |     |      | 51 | 
|Item 8.                                    |  | Financial Statements and Supplementary Data                                              |     |      | 52 | 
|Item 9.                                    |  | Changes in and Disagreements with Accountants on
    Accounting and Financial Disclosure |     |      | 52 | 
|Item 9A.                                   |  | Controls and Procedures                                                                  |     |      | 52 | 
|PART III                                  
|Item 10.                                   |  | Directors and Executive Officers of the Registrant                                       |     |      | 53 | 
|Item 11.                                   |  | Executive Compensation                                                                   |     |      | 56 | 
|Item 12.                                   |  | Security Ownership of Certain Beneficial Owners
    and Management                       |     |      | 66 | 
|Item 13.                                   |  | Certain Relationships and Related Transactions                                           |     |      | 70 | 
|Item 14.                                   |  | Principal Accountant Fees and Services                                                   |     |      | 76 | 
|PART IV                                   
|Item 15.                                   |  | Exhibits, Financial Statement Schedules, and
    Reports on Form 8-K                     |     |      | 77 | 
|SIGNATURES                                 |  |                                                                                          | 83  |     
|Index to Consolidated Financial Statements |  |                                                                                          | F-1 |     

-1-



---



##### 



PART I

Item 1.     Business

This report contains forward-looking
statements within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934 about Crystal Decisions, Inc.
(Crystal Decisions, we, us
or our company). The words may,
will, should, expects,
intends, plan, anticipate,
believes, estimates,
predicts, potential,
continue or the negative of these terms or other
comparable terminology generally identify forward-looking
statements.

Investors in our common stock are cautioned
not to place undue reliance on forward-looking statements.
Forward-looking statements are not guarantees of future
performance. The forward-looking statements are subject to
substantial risks and uncertainties that could cause our future
business, financial condition or results of operations to differ
materially from our historical results or currently anticipated
results. Investors should carefully review the information
contained under the caption Factors Affecting Our Future
Operating Results contained in Managements
Discussion and Analysis of Financial Condition and Results of
Operations and elsewhere in, or incorporated by reference
into, this document. All forward-looking statements are based on
information available to us on the date hereof, and we assume no
obligation to update forward-looking statements. These
forward-looking statements are made in reliance upon the safe
harbor provision of The Private Securities Litigation Reform Act
of 1995.

Crystal Decisions

We provide business intelligence software and
services that enable the effective use and management of
information within and among organizations. We develop, market
and support products that allow organizations of all sizes to
access data from disparate systems, create useful, interactive
information from that data through analysis and reporting and
reliably deliver that information to the users that need it. Our
products are designed to meet the needs of a wide range of end
users, from non-technical users to sophisticated analysts and
application developers. In addition, our products can be used to
deliver reports to customers and suppliers of the organizations
that use our products. Our products can serve as an information
infrastructure that empowers users to extract more value from
data that has already been captured by existing information
technology systems in order to improve decision-making, lower
overall information technology costs and enhance competitiveness.

Our products are used by organizations of all
sizes across almost all segments of the economy. As of
June 27, 2003, we had delivered more than 15 million
product licenses and had registered users in more than
170 countries. As a result, we have a diverse customer base
that includes software developers, approximately 350 independent
software vendors and numerous well established companies, such
as Aetna, ADP, Citigroup, Coca-Cola, JP Morgan Chase Bank,
Kraft Foods and Northrop Grumman.

In 1984, Crystal Computer Services incorporated
and began providing software and services. Crystal Computer
Services was acquired by Seagate Software Holdings, Inc. in
1994. Seagate Software Holdings was a subsidiary of Seagate
Technology, Inc., or Old Seagate, throughout these transactions.
In June 1999, Seagate Software Holdings sold the shares of
certain of its subsidiaries and the assets of its network
storage and management group business to VERITAS Software
Corporation for approximately 128 million shares of
VERITAS common stock. In November 1999, Seagate Software
Holdings contributed to us the stock of its subsidiaries and a
substantial majority of its assets, other than the shares of
VERITAS common stock. We are the successor to Seagate Software
Holdings business intelligence software business.

-2-



---



##### 



In a series of transactions that took place in
November 2000, New SAC purchased the operating business of Old
Seagate, including the business intelligence software business
that we now operate. New SAC was formed for the purpose of
completing these transactions and its principal stockholders
include affiliates of Silver Lake Partners, Texas Pacific Group,
August Capital, J.P. Morgan Partners, LLC, investment
partnerships of which the general partner, managing general
partner or investment manager is affiliated with Goldman, Sachs
& Co. and the former officers and employees of Old Seagate.
Old Seagates disc drive business was continued by Seagate
Technology, of which New SAC is the majority shareholder, and
other direct and indirect subsidiaries of New SAC acquired Old
Seagates removable tape storage, investment and other
businesses. The November 2000 transaction is described more
fully under the caption Managements Discussion and
Analysis of Financial Condition and Results of
Operations  Change in Control of Crystal
Decisions.

As part of the November 2000 transaction, Seagate
Software (Cayman) Holdings Corporation acquired
75,001,000 shares, or 99.7% of our common stock outstanding
on that date, under the terms of a stock purchase agreement with
Old Seagate and Seagate Software Holdings. Seagate Software
(Cayman) Holdings is a wholly owned subsidiary of New SAC.

In the November 2000 transaction, New SAC
purchased all of the operating assets of Old Seagate for cash
and borrowings of $1.84 billion, including transaction
costs of $25 million. Based on the purchase price
accounting for the November 2000 transaction, $41.5 million
was allocated to the shares of our common stock on
November 22, 2000, for an implicit allocated per share
purchase price of $0.55. The purchase price and the implicit
allocated per share purchase price does not include a subsequent
$9.1 million reduction in the allocated purchase price on
June 28, 2002, resulting from the release of a tax
valuation allowance pushed down to our financial statements from
New SAC.

On July 18, 2003, we entered into an
agreement and plan of merger with Business Objects, S.A.,
several wholly owned subsidiaries of Business Objects and
Seagate Software (Cayman) Holdings pursuant to which we agreed
to be acquired by Business Objects for aggregate consideration,
subject to certain adjustments, of $300 million of cash and
approximately 26.5 million Business Objects American
Depository Shares (ADSs) or ordinary shares. Subject
to approval by Business Objects shareholders and receipt of
various regulatory approvals, we and Business Objects expect the
proposed acquisition to close by the end of calendar 2003.

We changed our name to Crystal Decisions, Inc. in
March 2001. Our principal executive offices are located at 895
Emerson Street, Palo Alto, California 94301. Our telephone
number is (650) 838-7410. You can access our web site at
www.crystaldecisions.com. Information contained on our web site
is not a part of this document.

We currently have several registered trademarks
or applications pending for registration, including Crystal
Decisions, Crystal Enterprise, Crystal Reports and Crystal
Analysis. Our unregistered trademarks include our logo, Crystal
Applications and Crystal Care. Other service marks, trademarks
and trade names referred to in this document are the property of
their respective owners.

Where You Can Find Additional
Information

The reports and other information we file with
the SEC can be read and copied at the SECs Public
Reference Room at 450 Fifth Street, N.W., Washington D.C.
20549. Copies of these materials can be obtained at prescribed
rates from the Public Reference Section of the SEC at the
principal offices of the SEC, 450 Fifth Street, N.W.,
Washington D.C. 20549. You may obtain information regarding the
operation of the public reference room by calling
1(800) SEC-0330. The SEC also maintains a web site
(http://www.sec.gov) that contains reports, proxy and

-3-



---



##### 



information statements and other information
regarding issuers that file electronically with the SEC.


We are subject to the information and periodic
reporting requirements of the Securities Exchange Act and, in
accordance therewith, file periodic reports, proxy statements
and other information with the SEC. These periodic reports,
proxy statements and other information are available for
inspection and copying at the SECs public reference rooms
and the web site of the SEC referred to above. Our Internet
address is http://www.crystaldecisions.com.

We provide our stockholders with annual reports
containing, among other information, financial statements
audited by an independent public accounting firm and we make
available to our stockholders quarterly reports containing
unaudited financial data for the first three quarters of each
fiscal year.

-4-



---



##### 



Industry Background

Organizations of every size need to analyze and
assess their performance quickly and effectively. As a result,
every organization has a fundamental and widespread need for
useful information. The burden on organizations to make more
effective use of information is increasing rapidly in
todays environment, which is characterized by increasing
data volume, uncertain economic trends, increasing competition
and heightened legislative and regulatory requirements for data
collection, reporting and disclosure.

Organizations have spent billions of dollars
implementing software systems to efficiently capture, organize,
store and protect data that measures their performance,
including customer sales, expenses, inventory management and
employee data. However, these transactional software systems
were not primarily designed to facilitate easy access, viewing,
manipulation and broad dissemination of data. Employees and
customers often do not have access to the information within
these systems. If they do, employees and customers do not
typically have the ability to customize the information or
analyze it from multiple perspectives. As a result, there is a
basic need to access, analyze, understand and deliver
information more effectively within and among organizations.

A broad category of software known as business
intelligence has been developed to help organizations address
the need to transform the organizations growing amount of
data into useful information. In 2003, IDC estimated that the
market for business intelligence software would be
$4.5 billion in 2007.

Organizations have typically deployed business
intelligence products that are custom developed or purchased as
stand-alone products in a specific department or for an
individual project. This approach has resulted in a
proliferation of products and systems that are often not
integrated with each other or existing enterprise systems and,
as a result, only provide a fragmented view of the overall
business. Many of these products and systems are costly and
complex to maintain and support. In addition, many business
intelligence products are designed primarily for sophisticated
analytical users and are difficult for the non-technical user to
master. Most non-technical users require intuitive and seamless
access to data as part of their regular work tasks, regardless
of where the data is stored in an organization.

To allow broad user access to data within and
among organizations and to maximize the organizations
return on investment, a business intelligence product should
meet a range of complex needs. A business intelligence product
should integrate data from disparate systems and applications,
scale to support large numbers of users and offer flexible
reporting that is easy to use and provides a full range of
presentation, formatting and interactivity. We believe there is
a significant opportunity to provide organizations with a
different approach to business intelligence software by focusing
on the most common information and reporting needs. In order to
accomplish this objective, we believe business intelligence
products should serve as an underlying information
infrastructure that allows every user to access information in a
form appropriate for the user.

The Crystal Decisions Solution

We develop, market and support products that
enable users to access data, add value to it through analysis
and reporting and reliably manage and deliver the results within
business applications or processes. Our business is driven by a
primary guiding principle: to help organizations bring together
their people and information to improve decision-making and
performance. Our products focus first on solving the most common
business intelligence need, which is for information reporting
and delivery. To achieve our goals, we designed our products as
a core reporting and analysis infrastructure for an
organizations data systems and applications. Our products
allow organizations to maximize the value of the data they have

-5-



---



##### 



without requiring extensive re-engineering or
creation of additional systems that cannot work with the
existing transactional software systems.


Our products offer the following benefits to our
customers:

Lower overall information technology costs
through standardization.Our products
have been designed to access data from, and integrate with, a
wide range of existing transactional software, database and
custom-built systems. Our products facilitate data access,
analysis and reporting in a consistent, standardized manner.
This standardization empowers more users to access more
information in a more usable form and allows organizations to
integrate functions and applications more easily. As a result,
organizations can better use and increase the return on their
existing information technology investments. We also believe
that our products are able to lower the overall information
technology purchase, maintenance and training costs for
organizations by consolidating those data analysis and reporting
systems into our single platform.

Meet essential information management
demands.We believe that information
reporting, analysis and delivery are essential parts of almost
every application in every organization. As organizations
increasingly depend on using their information for most
processes, the business intelligence infrastructure upon which
they rely is subject to increased technological demands. We have
developed our products to meet these demands and to be:



| |   |                                                                                                                    
| | - | -------------------------------------------------------------------------------------------------------------------
| |  | scalable in terms of concurrent user volume,
    capacities, processing, throughput and use of hardware assets;    
|
| |  | reliable by providing high levels of uptime, high
    fault tolerance, disaster recovery and redundancy capability;
|
| |  | high performance in terms of response and
    processing times for users and requests;                             
|
| |  | manageable in terms of ease of deployment and
    cost of maintenance and ownership;                               
|
| |  | flexible enough to be used in any size
    deployment; and                                                         
|
| |  | extensible as organizational needs change over
    time.                                                           

Address the information requirements of all
users and organizations.Our products
can be used by technical and non-technical staff to improve
decision-making and enhance competitiveness. Our products are
flexible enough to provide users with an appropriate level of
interactivity and sophistication. We believe that our products
create a complete and integrated reporting, analysis, query and
information delivery infrastructure to satisfy the requirements
of sophisticated analysts and technical users while also
providing the ease of use necessary to appeal to non-technical
users. To address the specific requirements of customers of all
sizes and their projects, our products are available
individually or together as an integrated suite.

Ease of integration with existing
systems.Our products are designed to
be easy to deploy, customize and integrate into a
customers existing information technology environment and
processes. As the needs of each customer are unique, our
products are open and flexible enough to provide developers and
systems integrators with the means to complete deployments on an
organizational or departmental basis. As a result, our customers
can use our products in the manner that best suits their
requirements and generates value from their systems and software
investments.

-6-



---



##### 



Products

We offer an integrated suite of business
intelligence products that include:

Crystal
Reports

Crystal Reports is an integrated software package
for query, report design, application development and report
publishing functions. Crystal Reports is used to generate data
driven, highly formatted, interactive reports which are stored
in a proprietary file format. Crystal Reports is designed in a
range of versions to meet the needs of report authors, analysts
and application developers. Crystal Reports allows these users
to:



| |   |                                                                                     
| | - | ------------------------------------------------------------------------------------
| |  | access most types of structured data;                                               
|
| |  | format, design and process a variety of reports;
    and                            
|
| |  | integrate these reports into .NET, Java, COM and
    other development environments.

Reports can be published in a variety of formats
including DHTML, RTF, Microsoft Excel, PDF and XML. Crystal
Reports is deployed on the Windows operating system and is
available in Simplified Chinese, English, French, German,
Italian, Japanese, Korean and Spanish.

To build a common business report, such as a
sales report, a technical report author could use Crystal
Reports to access relevant sales and customer databases,
organize and format the appropriate information, such as
customer name, sales amount, product selection and shipping
dates. The report could include tables of information, graphs,
maps and/or images, conditional formatting, advanced business
logic and summarized calculations. The finished report could be
viewed and used by any end user, who could navigate the report
by page or by clicking on charts or summaries for more detail
and could also print or e-mail the report. An application
developer could use one of the reporting components embedded
within Crystal Reports to include this sales report as a
seamless part of another application, such as a sales management
system.

Crystal
Analysis

Crystal Analysis consists of software that
includes functions for user ad hoc analysis, analytic reporting,
analytic application development and online analytical
processing for multi-dimensional data. We provide Crystal
Analysis products in a range of client and server versions for a
variety of users including non-technical users, analysts and
developers. Our client-based analysis product provides powerful
and guided data navigation and enables the creation of
interactive report applications. Our analytic server product can
be used to consolidate large amounts of data with complex
business logic to facilitate sophisticated analysis by the end
user.

All Crystal Analysis components can integrate
with Crystal Enterprise and Crystal Reports. Our client-based
analysis product can be deployed on Windows. Our analytic server
product can be deployed on servers using the Windows, Solaris,
AIX, HP-UX and Linux operating systems. Crystal Analysis is
available in English, French, German and Japanese.

A business analyst could use the client-based
Crystal Analysis product to access a large multidimensional data
warehouse and track key information, such as product sales by
region over time. The business analyst could simultaneously
integrate key variables, such as margin and pipeline, and
interactively explore sales results using different views of the
data to identify trends in the information and forecast the
impact of changes on the sales model or product mix.

Crystal
Enterprise

Crystal Enterprise is infrastructure software
that integrates our products and fosters efficient management
and delivery of report information. It offers a customizable
solution for providing

-7-



---



##### 



interactive information to employees, customers
and suppliers. Crystal Enterprise addresses a range of
information management needs including the need for:




| |   |                                                                                                                                              
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------
| |  | a scalable, reliable platform to manage, process,
    store and deliver information to a large number of internal and
    external users; and
|
| |  | standardized reporting, analysis and information
    delivery across multiple business applications.                                         

Crystal Enterprise can be deployed on servers
using the Windows, Solaris and AIX operating systems. Almost any
web-browser or standards-based application can serve as the
Crystal Enterprise user interface. Crystal Enterprise is
available in English, French, German and Japanese.

A customer could use Crystal Enterprise to build,
deploy and maintain a web-based sales information application or
to deliver specific sales reports as part of a packaged customer
relationship management system. Crystal Enterprise would store
report content from Crystal Reports or Crystal Analysis,
integrate with the customers existing user security
protocols and process reports on demand for any user. The user
interface could be presented as a user-customized summary page
with navigation, scheduling and viewing capabilities to enable
easy use by any type of user.

Crystal
Applications

Crystal Applications are software templates that
provide reports, user interface components and data models to
support common processes, such as performance management, sales
force management, e-commerce and telecommunications billing
analyses. These templates are built using our Crystal Enterprise
platform and are functional examples of how our products can be
combined to address specific issues. We believe that these
templates help accelerate customer adoption and deployment of
our products.

A customer could customize, complete and deploy
our performance management application template with Crystal
Enterprise to provide a management scorecard to help track
corporate performance against key metrics, such as number of new
orders booked by month, days sales outstanding, customer
shipments and sales representative turnover.

Crystal Enterprise
Partner Kits

Our Crystal Enterprise partner kits are a series
of software toolkits and packages that enable customers to
integrate our products with those of other independent software
vendors by providing an interface to the transactional software
systems data structures and security regimes. Most kits
include data access drivers, sample reports and data structures
and may include special documentation, support and services. We
currently offer packages for many transactional software systems
including SAP R/3, SAP BW, Siebel CRM, PeopleSoft and
Baan ERP.

Services

We believe that high quality, real time customer
support is important to the successful marketing, sales and
implementation of our products. Accordingly, in addition to
offering our software products, we offer our customers a broad
range of post-sale support services such as technical support,
training and consulting. These services are designed to help us
to optimize customer satisfaction and influence customers
future purchasing decisions. We are committed to developing and
sustaining long-term relationships with our customers and have
dedicated substantial resources to customer service and support,
including 476 dedicated staff members as of June 27, 2003.

-8-



---



##### 



Maintenance

We offer maintenance programs for most of our
products, which generally consist of product enhancements and
upgrades when and as we make them available. We generally sell
maintenance in 12-month increments.

Professional
Services

To speed end user adoption of our products, our
professional services organization provides consulting and
training to plan and execute their deployment. We have a
dedicated team in North America and England who perform these
services for us alone or in combination with other consultants,
system integrators or value added resellers.

Technical
Support

Our technical support services are designed to
assist our customers to use our products to their full
potential. We believe effective technical support during product
evaluations and implementations benefits our customers and that
post-sales support has been and will continue to be a means to
achieve greater customer satisfaction. We provide a range of
technical support services to match the needs of different
organizations including fee-for-service offerings. We operate
technical support groups that are located at various sites
around the world, including North America and Europe. We also
offer 24 hour, seven-day toll-free telephone services with some
types of technical support packages.

Strategic Relationships

We have developed relationships with a wide range
of technology vendors and service providers including industry
leaders and influencers such as Microsoft and SAP. In many
cases, we have integrated our products with those of the other
party and our products are delivered with theirs. We believe
these relationships generate new sales opportunities, increase
our deployment capacity and enhance our products features.

Microsoft

We began our relationship with Microsoft in 1993.
Microsoft currently integrates our products into its developer
product suite, Visual Studio.NET and Business Solutions
products. We receive advance notice of planned upgrades and
improvements to Microsofts products so that we can
integrate our products before shipment. We have a full time
staff at Microsofts Redmond, Washington facilities. We
also coordinate sales and marketing efforts where possible.
Through its Business Solutions value-added reseller channel,
Microsoft resells our products with its customer relationship
management and enterprise resource planning products.

SAP

We have an original equipment manufacturer and
reseller arrangement with SAP whereby SAP incorporates our
Crystal Enterprise and Crystal Reports products into SAPs
BW 3.0 product, its data warehouse product. We receive advance
notice of planned upgrades and improvements to SAPs
products so that we can integrate our products before shipment.
We have full time staff at a site adjacent to SAPs
Walldorf, Germany facility.

Other Strategic Relationships

We also have original equipment manufacturer
relationships with approximately 350 independent software
vendors. These companies sell and support our products and/or
integrate our products into their applications. As a result of
these relationships, we believe our customers may derive
incremental value from the other applications by using our
integrated reporting and

-9-



---



##### 



analysis products without a separate deployment
or integration cycle. We consider our relationships with these
companies to be of strategic importance to us because they are
generally industry leaders and influence adoption of products
and technologies by customers.


Customers

As of June 27, 2003, we had delivered more
than 15 million product licenses and had registered users
in more than 170 countries. Our products are used by
organizations of all sizes in almost every segment of the
economy. As a result, we have a diverse customer base that
includes a broad community of software developers and a number
of well established companies. The following table lists some of
our top 50 end user customers who purchased products and
services directly from us by revenues we recognized from
July 3, 1999 to June 27, 2003.

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  |                                                                                                                                                                                                                                                                                                                                                                                                               
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|Consumer/RetailThe Coca-Cola Company
    Kraft Foods, Inc.
    Pepsi-Cola Company
    Safeway, Inc.Financial Services/InsuranceAetna Life Insurance Company
    Automatic Data Processing, Inc.
    Bank of America
    Citigroup, Inc.
    Insurance Corporation of British Columbia
    J.P. Morgan Chase Bank
    Morgan Stanley & Co. Inc.
    R+V Allegemeine Versicherung AG
    Suntrust Banks, Inc.Healthcare/PharmaceuticalsGenentech, Inc.
    Johnson & Johnson
    Pfizer Inc.Information and Other TechnologyMicrosoft Corporation
    Seagate Technology |  | Manufacturing/IndustrialsAir Products & Chemicals Inc.
    The Boeing Company
    Ford Motor Company
    International Paper Company
    Northrop Grumman Corporation
    Toyota Motor Manufacturing  North America, Inc.
    Trans-Canada Pipelines LimitedProfessional ServicesKPMG InternationalTelecommunicationsAT&T Corp.
    AT&T Wireless Services, Inc.
    SBC Operations, Inc.
    Verizon Wireless

We derived a substantial portion of our revenues
from one distributor, Ingram Micro, during the last three fiscal
years. As a percentage of our total revenues, Ingram Micro
accounted for 16% in fiscal 2001, 10% in fiscal 2002 and less
than 10% in fiscal 2003. No other customer or distributor
accounted for 10% or more of our total revenues in fiscal 2001,
fiscal 2002 or fiscal 2003. In fiscal 2001, our revenues were
$123.5 million, or 74% of total revenues, from customers in
North America, $31.8 million, or 19% of total revenues,
from customers in Europe, the Middle East and Africa and
$12.5 million, or 7% of total revenues, from customers the
Asia Pacific region. In fiscal 2002, our revenues were
$159.8 million, or 74% of total revenues, from customers in
North America, $41.8 million, or 19% of total revenues,
from customers in Europe, the Middle East and Africa and
$15.6 million, or 7% of total revenues, from customers in
the Asia Pacific region. In fiscal 2003, our revenues were
$212.0 million, or 74% of total revenues, from customers in
North America, $54.6 million, or 19% of total revenues,
from customers in Europe, the Middle East and Africa and
$20.9 million, or 7% of total revenues, from customers in
the Asia Pacific region. See our note 16 to our
consolidated financial statements in this document for more
information.

Our customers often purchase licenses for a
single location, department or division and may later expand
their use of our products to other parts of their organizations.
We believe we can sell additional licenses of our existing
products to our existing customer base and also sell those
customers new products as we expand our product line.

-10-



---



##### 



Customer Case Study

The following case study illustrates how one of
our customers, Aetna, a health insurance and benefits provider,
adopted our products to solve a business problem. Aetnas
management needed to pull financial and operational data from
disparate systems throughout the company, analyze that data
quickly and present the resulting information in a form that
would assist management in making effective business decisions.
Aetna integrated our Crystal Enterprise 8.5 and Crystal Reports
8.5 products into its existing information systems, allowing
Aetna to extract and present a unified view of financial and
operational data from 50 different data sources that feed into
its Microsoft SQL Server and IBM DB2 databases. Previously, in
order for Aetna to tabulate monthly financial information from
dozens of geographically dispersed offices, a full month was
required using a combination of Microsoft Excel spreadsheets and
Microsoft Word documents. With our products in place, Aetna was
able to cut the time it takes to generate such monthly financial
data from a full month to only 12 to 14 days. The reports
created with our products present the information to
Aetnas management in a unified, flexible view that can
break down financial and operational information based on
business units, geography or customer segments. Additionally, by
providing Aetnas management with a one-company view of the
organization, our software provides Aetna with a better view of
the performance and profitability of its various products.

Sales and Marketing

We organize our sales and marketing programs by
geographic regions, including North America, Japan, the Asia
Pacific region and the European region, which includes the
Middle East and Africa. In most cases, we sell our English
language products. In some cases, we adapt certain products for
foreign markets, including translation of documentation and user
interfaces to local languages.

To reach our customers, we utilize a direct sales
force and indirect sales channels, such as our original
equipment manufacturer relationships and a network of resellers
and distributors. Our sales channels are supported by our
pre-sales and technical specialists. Customers can also purchase
some of our products by downloading them over the Internet.



| |             
| | ------------
| | Direct Sales

We sell our products primarily through a direct
sales force that is comprised of field sales personnel, inside
sales personnel, telesales personnel and our eStore staff. Our
field sales force, consisting of customer account managers,
professional service account coordinators and support managers,
focus on mid-sized and large enterprises. Our inside sales
force, consisting of customer account managers, professional
services account coordinators and support managers, focus their
efforts on small and mid-sized enterprises, with most selling
conducted over the telephone. Our inside sales force most often
contacts sales prospects who already use our Crystal Reports
product. Our telesales group serves as a direct telephone link
to customers who call our offices, affording us the opportunity
to address customer issues and make additional sales. Our eStore
provides us with an opportunity to test pricing and promotional
strategies and conduct low-cost sales via the world wide web.
Our direct sales force for North America is managed from our
Vancouver, Canada offices. We also have a direct sales presence
throughout the world managed from our offices in England, Japan
and Singapore.



| |               
| | --------------
| | Indirect Sales

Our indirect revenues include sales to
distributors, other resellers and original equipment
manufacturers and as a percentage of total revenues were 37% in
fiscal 2001, 33% in fiscal 2002 and 34% in fiscal
2003. We have established indirect sales channels through
distributors and resellers, who primarily focus their sales
efforts on small and mid-sized organizations. We sell

-11-



---



##### 



our products through original equipment
manufacturers that bundle our products with theirs. We have a
sales team targeted at developing and maintaining our
relationships with original equipment manufacturers.




| |          
| | ---------
| | Marketing

Our marketing activities consist of several key
components:



| |   |                                                                                                                                                      
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------
| |  | targeted print advertising in trade, technical
    and business publications;                                                                        
|
| |  | online advertising on our web site;                                                                                                                  
|
| |  | cooperative marketing programs with original
    equipment manufacturers, distributors and other resellers;                                          
|
| |  | participation in seminars and tradeshows;                                                                                                            
|
| |  | direct mailings to both prospective and existing
    customers; and                                                                                  
|
| |  | extensive public relations activities and
    programs to build relationships with key information technology
    community analysts and influencers.

Our marketing groups produce, or oversee the
production of, substantially all of our online and print product
literature, brochures, advertising and similar marketing and
promotional material.

Research and Development

Since our inception, we have devoted significant
resources to the development of our products and technology. We
believe that our future success depends in large part on
continued innovation and rapid product development. We conduct a
majority of our research and development operations in
Vancouver, Canada and Ipswich, England. As of June 27,
2003, our research and development team consisted of
450 persons.

We had research and development expenses of
$29.2 million in fiscal 2001, $30.5 million in
fiscal 2002 and $41.9 million in fiscal 2003. Our
customers did not fund any of our research and development
expenses in fiscal 2001, fiscal 2002 or fiscal 2003.
We pursue our product development objectives by developing new
software products and product enhancements internally, but may
from time to time acquire products, technologies and businesses
complementary to ours or form alliances with other companies. We
recently began to outsource some of the final quality assurance
testing for our products and anticipate that we may outsource
other development functions in the future.

Patents and Intellectual Property
Rights

Our success and ability to compete is dependent
in part on our ability to develop and maintain the proprietary
aspects of our technology and operate without infringing upon
the proprietary rights of others. We rely primarily on a
combination of copyright, trade secret and trademark laws,
confidentiality procedures, contractual provisions and other
similar measures to protect our proprietary information. Due to
the rapidly changing nature of applicable technologies, we
believe that the improvement of existing products, reliance upon
trade secrets and unpatented proprietary know-how and
development of new products are generally more important than
patent protection. As of June 27, 2003, we had two United
States issued patents, eight patent applications pending in the
United States and one foreign patent application pending. We
also have an ongoing trademark registration program pursuant to
which we register some of our product names, slogans and logos
in the United States and in some foreign countries.

We also use contractual provisions to protect our
intellectual property rights. We license our software to be
integrated or sold with the products of numerous independent
software vendors,

-12-



---



##### 



as well as licensing directly to end users. These
license agreements, which address our technology, documentation
and other proprietary information, include restrictions intended
to protect and defend our intellectual property. These licenses
are generally non-transferable and are typically perpetual. We
also require all of our employees, contractors and many of those
with whom we have business relationships to sign non-disclosure
and confidentiality agreements.


Our products also include third party software
that we obtain the rights to use through license agreements. We
use this software primarily to add features that we do not
choose to develop internally.

Competition

The market for our products is highly
competitive, rapidly evolving and subject to changing
technology, customer needs and new product introductions. We
compete principally with vendors of integrated query, reporting,
analysis and information delivery software, such as Actuate,
Brio Software, Business Objects, Cognos, Hummingbird,
Information Builders and MicroStrategy. We also face or expect
to face some competition from the SAS Institute and
Informatica and expect increased competition from additional
market entrants, including companies that specialize in the
development, marketing and support of software products that
assist users to access, analyze and interpret data to make
business decisions. We also face competition from database and
application vendors, such as Microsoft, Oracle, SAP and IBM, who
offer reporting and analysis tools with their products.

The competitive factors affecting the market for
our products include:



| |   |                                                                        
| | - | -----------------------------------------------------------------------
| |  | product functionality;                                                 
|
| |  | performance and reliability;                                           
|
| |  | quality of customer support;                                           
|
| |  | ease of use and installation;                                          
|
| |  | availability and quality of consulting and
    implementation services;
|
| |  | vendor reputation;                                                     
|
| |  | demonstrable cost-effective benefits for users;                        
|
| |  | price;                                                                 
|
| |  | sales and marketing capabilities; and                                  
|
| |  | financial stability of the software provider.                          

We believe that we currently compete effectively
with our competitors on the basis of these factors. Our ability
to remain competitive will depend to a great extent upon our
ongoing performance in the areas of product development and
customer support. To be successful in the future, we believe
that we must respond promptly and effectively to the challenges
of technological change and our competitors innovations by
continually enhancing our product offerings. Performance in
these areas will in turn depend upon our ability to attract and
retain highly qualified technical personnel in a competitive
market for experienced and talented software developers.

Employees

As of June 27, 2003, we had
1,769 full-time employees, including 618 in sales and
marketing, 476 in services and support, 450 in
research and development and 225 in general and
administrative functions. None of our employees are represented
by a labor union or are the subject of a collective bargaining
agreement. We have never experienced a work stoppage and believe
that our employee relations are good. We believe our future
success will depend in large part upon our ability to attract
and retain highly skilled managerial, product development, sales
and marketing personnel.

-13-



---



##### 



Item 2.     Properties

Our principal executive offices are located in
Palo Alto, California. Our properties consist of leased
facilities for sales and marketing, research and development,
services and support and administrative personnel. The majority
of our facilities are occupied under leases that expire at
various times through fiscal 2015. At June 27, 2003,
our leased space approximated 362,000 square feet with
approximately 220,000 square feet located in Canada,
61,000 square feet located in the United States,
60,000 square feet located in Europe and 21,000 square
feet located in the Asia Pacific region. These figures exclude
approximately 105,000 square feet of unoccupied space in
Canada and approximately 3,000 square feet leased to others
in the United States. We have continued to lease additional
space in our Vancouver, Canada location and are currently in the
process of building out unoccupied space in this location.

We believe that our facilities are adequate for
our current needs and that suitable additional or substitute
space will be available as needed to accommodate expansion of
our operations.

Item 3.     Legal
Proceedings

In November 1997, Vedatech commenced an action in
the Chancery Division of the High Court of Justice in the United
Kingdom against Crystal Decisions (UK) Limited, our wholly owned
subsidiary. The liability phase of the trial was completed in
March 2002, and we prevailed on all claims except for a quantum
meruit claim. The court ordered the parties to mediate the
amount of that claim and we came to a mediated settlement with
Vedatech in August 2002. The mediated settlement was not
material to our operations and contained no continuing
obligations. In September 2002, however, we received notice that
Vedatech is seeking to set aside the settlement. In April 2003,
we filed an action in the High Court of Justice seeking a
declaration that the mediated settlement agreement is valid and
binding. Although we believe that Vedatechs basis for
seeking to set aside our mediated settlement is meritless, the
outcome cannot be determined at this time. If our mediated
settlement were to be set aside, a negative outcome could
adversely affect our business, results of operations and
financial condition.

In addition to the foregoing, we are subject to
other litigation in the ordinary course of our business. While
we believe that the ultimate outcome of these matters will not
have a material adverse effect on us, the outcome of these
matters is not determinable and negative outcomes may adversely
affect business, results of operations and our financial
condition.

Item 4.     Submission
of Matters to a Vote of Security Holders

On July 18, 2003, Seagate Software (Cayman)
Holdings Corporation, which owned 98.6% of our common stock at
such date, executed an action by written consent of stockholders
approving the proposed acquisition of our company by Business
Objects S.A. and the Agreement and Plan of Merger by and among
Business Objects S.A., Borg Merger Sub I, Inc., Borg Merger Sub
II, Inc., Borg Merger Sub III, Inc., Seagate Software (Cayman)
Holdings Corporation and Crystal Decisions, Inc. We cannot
complete the acquisition by Business Objects until 20 days
after we mail an Information Statement describing the written
consent and complying with the requirements of Schedule 14C
promulgated by the Securities and Exchange Commission to our
stockholders.

-14-



---



##### 



PART II

Item 5.     Market
for Registrants Common Equity and Related Stockholder
Matters

As of June 27, 2003, 76,091,581 shares of
our common stock were outstanding, which were held by 264
stockholders of record. There is no established public trading
market for any class of our securities.

We have never declared or paid any dividends on
our capital stock. We currently expect to retain any future
earnings for use in the operation and expansion of our business
and do not anticipate paying any cash dividends in the
foreseeable future. Subject to limited exceptions, we are
restricted in our ability to pay dividends by the covenants
contained in our revolving loan agreement with Comerica. We are
permitted to repurchase stock and/or pay cash dividends in an
aggregate amount not to exceed $2.0 million during the term
of the agreement, provided that we are not in default under the
agreement and that a default would not occur immediately after
payment of the dividend.

-15-



---



##### 



Item 6.     Selected
Financial Data

The selected financial data set forth below
should be read together with Managements Discussion
and Analysis of Financial Condition and Results of
Operations and our financial statements and related notes.
We have derived the statement of operations data for the fiscal
years ended June 29, 2001, June 28, 2002 and
June 27, 2003 and the balance sheet data as of
June 28, 2002 and June 27, 2003 from the audited
financial statements included elsewhere in this Annual Report on
Form 10-K. The statement of operations data for the fiscal
years ended July 2, 1999 and June 30, 2000 and the
balance sheet data as of July 2, 1999, June 30, 2000
and June 29, 2001 were derived from the audited financial
statements that are not included in this Annual Report on
Form 10-K. Historical results are not necessarily
indicative of results to be expected for future periods.

|                                                                                  |                                                          |                                       |         |          |         |          |          |          |         |          |         |         |         |   |         |         |         |   |         |         |         | 
|--------------------------------------------------------------------------------- | -------------------------------------------------------- | ------------------------------------- | ------- | -------- | ------- | -------- | -------- | -------- | ------- | -------- | ------- | ------- | ------- | - | ------- | ------- | ------- | - | ------- | ------- | ------- | 
|                                                                                  |                                                          |                                      
|                                                                                  |                                                          | Fiscal Years Ended                   
|                                                                                  |                                                          |                                      
|                                                                                  |                                                          | July 2,                               |         | June 30, |         | June 29, |          | June 28, |         | June 27,
|                                                                                  |                                                          | 1999                                  |         | 2000     |         | 2001     |          | 2002     |         | 2003    
|                                                                                  |                                                          |                                       |         |          |         |          |          |          |         |         
|                                                                                  |                                                          |                                      
|                                                                                  |                                                          | (in thousands, except per share data)
|Statement of Operations Data:                                                     |                                                          |                                       |         |          |         |          |          |          |         |          |         |         |         |   |         |         |         |   |         |        
|Revenues:                                                                         |                                                          |                                       |         |          |         |          |          |          |         |          |         |         |         |   |         |         |         |   |         |        
|                                                                                  | Licensing                                                |                                       | $       | 92,013   |         |          | $        | 74,182   |         |          | $       | 107,028 |         |   | $       | 140,009 |         |   | $       | 185,532 |        
|                                                                                  | Maintenance, support and services                        |                                       |         | 50,552   |         |          |          | 52,727   |         |          |         | 60,694  |         |   |         | 77,161  |         |   |         | 101,976 |        
|                                                                                  |                                                          |                                       |         |          |         |          |          |          |         |          |         |         |         |   |         |         |         |   |         |        
|                                                                                  |                                                          | Total revenues                        |         |          | 142,565 |          |          |          | 126,909 |          |         |         | 167,722 |   |         |         | 217,170 |   |         |         | 287,508 | 
|Cost of revenues:                                                                 |                                                          |                                       |         |          |         |          |          |          |         |          |         |         |         |   |         |         |         |   |         |        
|                                                                                  | Licensing                                                |                                       |         | 3,938    |         |          |          | 3,906    |         |          |         | 5,504   |         |   |         | 4,993   |         |   |         | 5,617   |        
|                                                                                  | Maintenance, support and services                        |                                       |         | 37,374   |         |          |          | 41,346   |         |          |         | 41,996  |         |   |         | 46,377  |         |   |         | 56,313  |        
|                                                                                  | Amortization of developed technologies                   |                                       |         | 4,545    |         |          |          | 198      |         |          |         | 3,050   |         |   |         | 5,078   |         |   |         |        |        
|                                                                                  | Write-off of developed technologies                      |                                       |         | 4,700    |         |          |          |         |         |          |         |        |         |   |         |        |         |   |         |        |        
|                                                                                  |                                                          |                                       |         |          |         |          |          |          |         |          |         |         |         |   |         |         |         |   |         |        
|                                                                                  |                                                          | Total cost of revenues                |         |          | 50,557  |          |          |          | 45,450  |          |         |         | 50,550  |   |         |         | 56,448  |   |         |         | 61,930  | 
|                                                                                  |                                                          |                                       |         |          |         |          |          |          |         |          |         |         |         |   |         |         |         |   |         |        
|Gross profit                                                                      |                                                          |                                       | 92,008  |          |         |          | 81,459   |          |         |          | 117,172 |         |         |   | 160,722 |         |         |   | 225,578 |        
|Operating expenses:                                                               |                                                          |                                       |         |          |         |          |          |          |         |          |         |         |         |   |         |         |         |   |         |        
|                                                                                  | Sales and marketing                                      |                                       |         | 65,488   |         |          |          | 65,752   |         |          |         | 73,888  |         |   |         | 94,449  |         |   |         | 108,470 |        
|                                                                                  | Research and development                                 |                                       |         | 23,657   |         |          |          | 27,377   |         |          |         | 29,236  |         |   |         | 30,515  |         |   |         | 41,924  |        
|                                                                                  | General and administrative                               |                                       |         | 10,334   |         |          |          | 17,659   |         |          |         | 15,465  |         |   |         | 18,464  |         |   |         | 29,434  |        
|                                                                                  | Amortization of goodwill and other intangible
    assets |                                       |         | 4,772    |         |          |          | 3,038    |         |          |         | 2,023   |         |   |         | 2,358   |         |   |         |        |        
|                                                                                  | Write-off of in-process research and development         |                                       |         |         |         |          |          |         |         |          |         | 7,073   |         |   |         |        |         |   |         |        |        
|                                                                                  | Unusual items                                            |                                       |         | 86,714   |         |          |          | 242,569  |         |          |         | 1,851   |         |   |         |        |         |   |         |        |        
|                                                                                  | Restructuring costs                                      |                                       |         |         |         |          |          | 1,301    |         |          |         | 573     |         |   |         |        |         |   |         |        |        
|                                                                                  |                                                          |                                       |         |          |         |          |          |          |         |          |         |         |         |   |         |         |         |   |         |        
|                                                                                  |                                                          | Total operating expenses              |         |          | 190,965 |          |          |          | 357,696 |          |         |         | 130,109 |   |         |         | 145,786 |   |         |         | 179,828 | 
|                                                                                  |                                                          |                                       |         |          |         |          |          |          |         |          |         |         |         |   |         |         |         |   |         |        
|Income (loss) from operations                                                     |                                                          |                                       | (98,957 | )        |         |          | (276,237 | )        |         |          | (12,937 | )       |         |   | 14,936  |         |         |   | 45,750  |        
|Interest and other income (expense), net                                          |                                                          |                                       | 56      |          |         |          | 20       |          |         |          | 2,651   |         |         |   | 1,319   |         |         |   | 896     |        
|                                                                                  |                                                          |                                       |         |          |         |          |          |          |         |          |         |         |         |   |         |         |         |   |         |        
|Income (loss) before income taxes                                                 |                                                          |                                       | (98,901 | )        |         |          | (276,217 | )        |         |          | (10,286 | )       |         |   | 16,255  |         |         |   | 46,646  |        
|                                                                                  |                                                          |                                       |         |          |         |          |          |          |         |          |         |         |         |   |         |         |         |   |         |        
|Provision for (benefit from) income taxes                                         |                                                          |                                       | (2,526  | )        |         |          | (55,055  | )        |         |          | 1,183   |         |         |   | 3,300   |         |         |   | 13,191  |        
|                                                                                  |                                                          |                                       |         |          |         |          |          |          |         |          |         |         |         |   |         |         |         |   |         |        
|Net income (loss)                                                                 |                                                          | $                                     | (96,375 | )        |         | $        | (221,162 | )        |         | $        | (11,469 | )       |         | $ | 12,955  |         |         | $ | 33,455  |        
|                                                                                  |                                                          |                                       |         |          |         |          |          |          |         |          |         |         |         |   |         |         |         |   |         |        
|Basic net income (loss) per share                                                 |                                                          | $                                     | (1.28   | )        |         | $        | (2.95    | )        |         | $        | (0.15   | )       |         | $ | 0.17    |         |         | $ | 0.44    |        
|                                                                                  |                                                          |                                       |         |          |         |          |          |          |         |          |         |         |         |   |         |         |         |   |         |        
|Diluted net income (loss) per share                                               |                                                          | $                                     | (1.28   | )        |         | $        | (2.95    | )        |         | $        | (0.15   | )       |         | $ | 0.17    |         |         | $ | 0.42    |        
|                                                                                  |                                                          |                                       |         |          |         |          |          |          |         |          |         |         |         |   |         |         |         |   |         |        
|Weighted average number of shares used in basic
    net income (loss) per share   |                                                          |                                       | 75,001  |          |         |          | 75,001   |          |         |          | 75,253  |         |         |   | 75,601  |         |         |   | 75,978  |        
|Weighted average number of shares used in diluted
    net income (loss) per share |                                                          |                                       | 75,001  |          |         |          | 75,001   |          |         |          | 75,253  |         |         |   | 76,806  |         |         |   | 80,317  |        

|                                                  |  |                |         |          |  |          |        |          |  |          |         |  |  |   |         |  |  |   |         | 
|------------------------------------------------- |  | -------------- | ------- | -------- |  | -------- | ------ | -------- |  | -------- | ------- |  |  | - | ------- |  |  | - | ------- | 
|                                                  |  |               
|                                                  |  | As of         
|                                                  |  |               
|                                                  |  | July 2,        |         | June 30, |  | June 29, |        | June 28, |  | June 27,
|                                                  |  | 1999           |         | 2000     |  | 2001     |        | 2002     |  | 2003    
|                                                  |  |                |         |          |  |          |        |          |  |         
|                                                  |  |               
|                                                  |  | (in thousands)
|Balance Sheet Data:                               |  |                |         |          |  |          |        |          |  |          |         |  |  |   |         |  |  |   |         | 
|Cash, cash equivalents and short-term investments |  | $              | 7,419   |          |  | $        | 3,621  |          |  | $        | 34,379  |  |  | $ | 71,451  |  |  | $ | 104,703 | 
|Restricted cash                                   |  |                |        |          |  |          |       |          |  |          |        |  |  |   |        |  |  |   | 2,019   | 
|Working capital (deficit)                         |  |                | (11,163 | )        |  |          | 8,860  |          |  |          | 10,750  |  |  |   | 26,426  |  |  |   | 49,762  | 
|Total assets                                      |  |                | 79,820  |          |  |          | 72,545 |          |  |          | 105,126 |  |  |   | 136,846 |  |  |   | 208,698 | 
|Long-term liabilities                             |  |                | 459     |          |  |          | 381    |          |  |          | 3,600   |  |  |   | 2,575   |  |  |   | 3,090   | 
|Total stockholders equity                        |  |                | 2,883   |          |  |          | 23,113 |          |  |          | 35,609  |  |  |   | 41,452  |  |  |   | 75,756  | 

-16-



---



##### 





|        |                                                                                          
|------- | -----------------------------------------------------------------------------------------
|Item 7. | Managements Discussion and Analysis of
    Financial Condition and Results of Operations

The following information should be read together
with the audited consolidated financial statements and the notes
thereto and other information included elsewhere in this Annual
Report on Form 10-K.

This Annual Report on Form 10-K, including
the sections entitled Managements Discussion and
Analysis of Financial Condition and Results of Operations
and Business, contains forward-looking statements.
These statements relate to future events or our future financial
performance and involve known and unknown risks, uncertainties
and other factors that may cause our or our industrys
actual results, levels of activity, performance or achievements
to be materially different from any future results, levels of
activity, performance or achievements expressed or implied by
the forward-looking statements. These risks and other factors
include those listed under Managements Discussion
and Analysis of Financial Condition and Results of
Operations  Factors Affecting Future Operating
Results and elsewhere in this Annual Report on
Form 10-K. In some cases, you can identify forward-looking
statements by terminology such as may,
will, should, expects,
intends, plans, anticipates,
believes, estimates,
predicts, potential,
continue or the negative of these terms or other
comparable terminology. These statements are only predictions.
Actual events or results may differ materially. In evaluating
these statements, you should specifically consider various
factors, including the risks outlined under
Managements Discussion and Analysis of Financial
Condition and Results of Operations  Factors
Affecting Future Operating Results. These factors may
cause our actual results to differ materially from any
forward-looking statement.

Although we believe that the expectations
reflected in the forward-looking statements are reasonable, we
cannot guarantee future results, levels of activity, performance
or achievements. Moreover, neither we nor any other person
assumes responsibility for the accuracy and completeness of
these forward-looking statements. We are under no duty to update
any of the forward-looking statements after the date of this
Annual Report on Form 10-K to conform our prior statements
to actual results.

Overview

General

We provide business intelligence software and
services that enable the effective use and management of
information within and among organizations. Our revenues are
derived primarily from licensing fees for software products and,
to a lesser extent, fees for services relating to these
products, including maintenance, technical support, training and
consulting. We sell our software products through two channels:
directly to end user customers through our sales force and
indirectly through resellers, original equipment manufacturers,
systems integrators and distributors, including independent
software vendors. Original equipment manufacturers, which are
independent software vendors and hardware vendors, generally
integrate our products with theirs or resell them with their
products. Our other indirect vendors resell our software
products to end user customers.

We operate and report financial results on a
fiscal year of 52 or 53 weeks ending on the Friday closest
to June 30. Accordingly, fiscal 2001 ended on June 29,
2001, fiscal 2002 ended on June 28, 2002 and fiscal 2003
ended on June 27, 2003. Fiscal 2001, 2002 and 2003 were
each comprised of 52 weeks.

Sources of
Revenues

Licensing revenues.We generate licensing revenues from the sale of licenses to use
our software products. We price our products on a per user,
processor or concurrent user basis. We generally do not sell
licenses for our products on a time or subscription basis.

-17-



---



##### 



We currently operate with virtually no order
backlog because our software products are typically delivered
shortly after orders are received. Licensing revenues in any
quarter are substantially dependent on orders booked and
delivered in that quarter. Historically, we have recognized a
substantial portion of our revenues in the last month of a
quarter. As we sell more large-scale deployments of our
products, orders may become larger and the impact of the longer
sales cycle of these deployments may make our revenues harder to
predict.

Maintenance, support and services
revenues.Our maintenance revenues are
derived from selling rights to existing customers to receive
product upgrades, when and if we make them available. Our
maintenance agreements generally have a term of one year.
Customers may renew their maintenance agreements for additional
consecutive periods.

Our technical support revenues are derived from
fees charged to customers for post-sales efforts. We sell
technical support services under several different programs
generally on a 12-month basis, on a fee for use, fixed price or
a per incident basis.

Our professional services organization generates
revenues for training and consulting to plan and execute the
deployment of our products and accelerate end user adoption. In
addition, we provide training to our customers employees
to enhance their ability to utilize fully the features and
functionality of the product purchased. We provide training and
consulting services related to the use of our products and
receive project- or time-based fees as a result.

Costs of
Revenues

Our cost of licensing revenues consists primarily
of materials, product packaging, distribution costs, related
fulfillment personnel and third-party royalties. Our cost of
maintenance, support and services revenues consists primarily of
personnel and related overhead costs for technical support,
training, consulting and the cost of materials delivered with
product upgrades and enhancements. Prior to the end of fiscal
2002, our total cost of revenues also included the amortization
of the fair value of developed technologies on our balance sheet
that arose as the result of certain transactions described
further under Change in Control of Crystal Decisions.

Operating
Expenses

Sales and marketing expenses include salaries,
benefits, commissions and bonuses earned by sales and marketing
personnel, advertising, product promotional campaigns,
promotional materials, travel, facilities and other overhead
costs. Research and development expenses are expensed as
incurred and consist primarily of personnel and related costs
associated with development of new products, the enhancement and
localization of existing products, quality assurance and
testing, as well as facilities and other overhead costs. General
and administrative expenses consist primarily of personnel costs
for finance, legal and human resources, as well as other
administrative costs.

In May 2003, we pledged $1.0 million to the
Community Foundation of Silicon Valley, which we accrued and
expensed in fiscal 2003 and paid on June 30, 2003. We also
agreed to match employee contributions to the Community
Foundation of Silicon Valley up to 1% of our income before
interest, taxes and amortization for the prior fiscal year. The
maximum amount of our matching contribution in fiscal 2003 was
approximately $220,000, which we accrued and expensed in fiscal
2003 and paid in July 2003. The maximum amount that we could pay
under this matching plan for fiscal 2004 would be approximately
$453,000. The Community Foundation of Silicon Valley is an
independent, public benefit organization that provides grants to
charitable groups in areas such as education, arts and cultural
participation and neighborhoods and civic engagement. The
Community Foundation of Silicon Valley also works with
independent, public benefit organizations to provide grants that
are used in communities outside of the San Francisco bay area.
The Community Foundation of Silicon Valley awards grants equal
to at least 5% of its endowment annually.

-18-



---



##### 



Foreign
Exchange

We conduct the majority of our business and
collect the majority of our revenues in U.S. dollars, which
is the currency in which we report our financial results. We
also earn approximately 20% of our revenues in currencies
other than the U.S. dollar including the Euro, the British
pound and the Canadian dollar. Our total revenues are affected
by changes in the exchange rates for these currencies relative
to the U.S. dollar.

We incur a significant portion of our expenses in
Canadian dollars. Our total expenses fluctuate according to the
changes in the exchange rate of the Canadian dollar relative to
the U.S. dollar. With the exception of our Canadian dollar
expenses, the impact of fluctuations in foreign exchange rates
on our net operating income is nominal as our foreign
denominated expenses are substantially offset by our foreign
denominated revenues. For fiscal 2003, a 10% increase in
the exchange rate for the Canadian dollar would have increased
our revenues by less than 1% but would have increased our
expenses by approximately 4%. We recently implemented a
partial hedging strategy for these exposures. We may experience
substantial foreign exchange gains or losses due to the
volatility of the Canadian dollar, to the extent our hedging
activities are ineffective, or other currencies compared to the
U.S. dollar.

Critical Accounting Policies and
Estimates

Our financial statements have been prepared in
accordance with accounting principles generally accepted in the
United States and form the basis for the following discussion
and analysis of critical accounting policies and estimates. We
make estimates and assumptions that affect the reported amounts
of assets, liabilities, revenues and expenses and related
disclosure of contingent assets and liabilities during the
course of preparing these financial statements. On a regular
basis, we evaluate our estimates and assumptions including those
related to the recognition of revenues, allowance for doubtful
accounts, contingent liabilities and income taxes. We base our
estimates on historical experience and on various other
assumptions that we believe to be reasonable. These estimates
form the basis of our judgments about the carrying values of
assets and liabilities that are not readily apparent from other
sources. Our actual results may differ from these estimates.

The following critical accounting policies
reflect the more significant estimates and assumptions we have
used in the preparation of our financial statements:

Recognition
of Revenues

We follow specific and detailed guidelines in
measuring revenues; however, certain judgments and estimates
affect the application of the policy. Revenues in any given
period are difficult to predict and any shortfall in revenues or
delay in recognizing revenues could cause our results of
operations to vary significantly from quarter to quarter.

We sell licenses for software products separately
or with services as part of a bundled arrangement. We sell
maintenance and technical support contracts with licenses in a
bundled arrangement or separately as a contract renewal. We
provide training and consulting services as part of a bundled
arrangement or separately based on a project or time and
materials basis.

For each sales transaction, we determine whether
evidence of an arrangement exists, delivery has occurred, the
fee is fixed or determinable and collection is probable. If any
of these criteria are not met, we defer recognition of revenues
until such time as all of the criteria are met.

In bundled software arrangements that include
rights to multiple software products and/or services, we
recognize revenues using the residual method as prescribed by
the Statement of Position 98-9 Modification of SOP
No. 97-2 Software Revenue Recognition with Respect to
Certain Transactions. Under the residual method,
revenues are allocated to the undelivered elements based on
vendor specific objective evidence of fair value of the
undelivered elements and the

-19-



---



##### 



residual amount of revenues are allocated to the
delivered elements. Vendor specific objective evidence of the
fair value of maintenance and technical support contracts is
based on renewal rates as determined by the prices paid by our
customers when maintenance is sold separately. Vendor specific
objective evidence of fair value of training and consulting
services is based upon daily rates as determined by the prices
paid by our customers when these services are sold separately.


For all bundled arrangements, we assess whether
the service elements of the arrangement are essential to the
functionality of the other elements of the arrangement. When
services are considered essential or the arrangement involves
customization or modification of the software, both the license
and service revenues under the arrangement are recognized under
the percentage of completion method of contract accounting,
based on cost of labor inputs. We accrue expected losses, if
any, with respect to consulting services once they become known.

For those arrangements for which we have
concluded that the service elements are not essential to the
other elements of the arrangement, we use vendor specific
objective evidence of fair value for the service elements to
account for the arrangement using the residual method,
regardless of any separate prices stated within the contract for
each element. We recognize revenues allocable to maintenance and
technical support contracts ratably over the term of the
respective contracts, which is typically one year. Maintenance
contracts include rights to unspecified software product
enhancements and upgrades when and as we make them available. We
recognize revenues allocable to training and consulting services
as the services are performed.

For sales to distributors and resellers, we
recognize revenues upon the delivery of our products to these
parties. We reserve an amount equal to our estimate of all
products held by such parties which are subject to rights of
return and resale contingencies. We consider several factors in
determining these estimates including historical experience,
level of inventory in the distribution channels, nature of the
product, fixed or determinable fees and payment terms. We reduce
our revenues and the related receivables by this estimate.

For sales to original equipment manufacturers, we
recognize revenues when the original equipment manufacturer
reports sales that have occurred to an end user customer,
provided that collection is probable. Some original equipment
manufacturer arrangements include the payment of an upfront
arrangement fee which is deferred and recognized either ratably
over the contractual period or when the original equipment
manufacturer reports sales that have occurred to an end user
customer, in accordance with the contractual terms. If we
determine, through royalty audits or other means, that an
original equipment manufacturer did not report revenues
accurately, we attempt to reconcile the discrepancies and, if
appropriate, record additional revenues upon resolution.

Deferred revenues represent amounts under license
and service arrangements for which the earnings process has not
been completed. These amounts relate primarily to provision of
maintenance and technical support services with future
deliverables and arrangements where specified customer
acceptance has not yet occurred. Deferred revenues classified as
long-term in nature represent revenues that will not be realized
for more than 12 months after the date of the balance sheet.

Allowance for Doubtful
Accounts

The allowance for doubtful accounts, which is
netted against our accounts receivable on our balance sheets,
totaled $2.1 million as of June 28, 2002 and
$2.6 million as of June 27, 2003. The allowance for
doubtful accounts represents estimated losses resulting from the
inability of our customers to make required payments. We base
our estimates on specific identification of probable bad debts
based on collection efforts, aging of accounts receivable, our
historical experience including bad write-offs and other
factors. If the financial condition of our customers

-20-



---



##### 



were to deteriorate, resulting in an impairment
of their ability to make payments, we may be required to record
additional allowances. If the data we use to calculate the
allowance does not reflect the future ability to collect
outstanding receivables, we may be required to record additional
allowances and the future results of our operations could be
materially impacted. Our bad debt expenses are reflected in
general and administrative expenses.


Contingencies and
Litigation

We evaluate contingent liabilities including
threatened or pending litigation in accordance with Statement of
Financial Accounting Standards No. 5, Accounting
for Contingencies. We assess the likelihood of any
adverse judgments or outcomes to a potential claim or legal
proceeding, as well as potential ranges of probable losses, when
the outcome of the claims or proceedings are probable and
reasonably estimable. A determination of the amount of accrued
liabilities required, if any, for these contingencies is made
after analysis of each matter. Because of uncertainties related
to these matters, we base our estimates on the information
available at the time. As additional information becomes
available, we reassess the potential liability related to our
pending claims and litigation and may revise our estimates. Any
revisions in the estimates of potential liabilities could have a
material impact on our results of operations and financial
position.

Income
Taxes

We are subject to income taxes in both the United
States and numerous foreign jurisdictions and we use estimates
in determining our worldwide provision for income taxes. This
process involves estimating actual current tax liabilities
together with assessing temporary differences resulting from
differing treatment of items for tax and accounting purposes.
These differences result in deferred tax assets and liabilities
which are recorded on the balance sheet. Our deferred tax assets
consist primarily of net operating losses carried forward. We
assess the likelihood that deferred tax assets will be recovered
from future taxable income, and, a valuation allowance is
recognized if it is more likely than not that some portion of
the deferred tax assets will not be recognized. We provided a
full valuation allowance against all of our deferred tax assets
as of June 29, 2001 and June 28, 2002. During fiscal
2003, we released a portion of our valuation allowance against
our deferred tax assets and have recorded current and long-term
deferred tax assets at June 27, 2003. To the extent we
establish any valuation allowance against our deferred tax
assets or change this valuation allowance in a period, we
reflect the impact in the provision for (benefit from) income
taxes in our statements of operations. Although we believe that
our tax estimates are reasonable, the ultimate tax determination
involves significant judgment that could become subject to audit
by tax authorities in the ordinary course of business.

Stock-Based
Compensation

We measure compensation expense for the majority
of our stock option plans using the intrinsic value method
prescribed by Accounting Principles Board Opinion No. 25
Accounting for Stock Issued to Employees and
related interpretations. The fair market value of our common
stock on the date of grant is determined by the compensation
committee of our board of directors. Because there has been no
public market for our stock, the compensation committee
determined the fair value of our common stock by considering a
number of factors, including, but not limited to,
contemporaneous valuations, our current financial performance
and prospects for future growth and profitability, the status of
product releases and product integration, the absence of a
resale market for our common stock, the control position held by
New SAC and comparisons to certain of our key valuation metrics
with similar metrics for comparable publicly traded companies,
including measures of market capitalization based on revenue
multiples, price-to-earnings ratios and operating margins.

-21-



---



##### 



We have elected not to apply fair value-based
accounting provided under SFAS No. 123 Accounting
for Stock-Based Compensation because it requires the
use of option valuation models, which in our opinion, do not
provide a reliable measure of the fair value of our employee
stock options.

As required by SFAS 123, as modified by SFAS
No. 148 Accounting for Stock Based
Compensation  Transition and Disclosure 
an Amendment of FASB Statement No. 123, we
provide pro forma disclosure of the effect of using the fair
value-based method of measuring compensation expense. For
purposes of the pro forma disclosure, we estimate the fair value
of stock options issued to employees using the Black-Scholes
option valuation model. This model was developed for use in
estimating the fair value of traded options that have no vesting
restrictions and are fully transferable. In addition, option
valuation models require the input of highly subjective
assumptions including the expected life of options and our
expected stock price volatility. Therefore, the estimated fair
value of our employee stock options could vary significantly as
a result of changes in the assumptions used.

Change in Control of Crystal
Decisions

We became an indirect subsidiary of New SAC on
November 22, 2000 when New SAC indirectly acquired
75,001,000 shares, or 99.7% of our common stock outstanding
on that date, under the terms of a stock purchase agreement with
Old Seagate and Seagate Software Holdings. In the acquisition,
New SAC purchased all of the operating assets of Old Seagate and
its consolidated subsidiaries for cash and borrowings of
$1.84 billion, including transaction costs of
$25 million. This included Old Seagates rigid disc
drive, storage area network, removable tape storage solutions
businesses and operations, our common stock, and certain cash
balances, but excluded the approximately 128 million shares
of VERITAS common stock then held by Seagate Software Holdings
and certain of Old Seagates equity investments.

The November 2000 transaction resulted in a
change in control of our company. Under rules and regulations of
the Securities and Exchange Commission, because more than 95% of
our company was acquired and a change of control occurred, we
restated all our assets and liabilities in our financial
statements as of November 22, 2000 on a push down
accounting basis, which involved the application of the purchase
method of accounting to the financial statements of our company
in the business combination. Push down accounting had a
significant impact on our financial statements because the
long-lived tangible and intangible assets and liabilities were
measured at allocated fair values at the date of the transaction.

The table below lists the net purchase price
allocation to our company of the tangible and intangible assets
acquired by New SAC.

|                                    |                                     |                      |        |        |  
|----------------------------------- | ----------------------------------- | -------------------- | ------ | ------ | -
|                                    |                                     | Net Purchase Price  
|                                    |                                     | Allocation          
|Purchase Price Allocation           |                                     | at November 22, 2000
|                                    |                                     |                     
|                                    |                                     | (in thousands)      
|Net current assets acquired         |                                     | $                    | 9,138  |       
|Tangible long-lived assets acquired |                                     |                      | 5,130  |       
|Intangible assets acquired:         |                                     |                      |        |       
|                                    | Developed technologies              |                      |        | 15,234 |  
|                                    | Assembled work force                |                      |        | 7,073  |  
|                                    | In-process research and development |                      |        | 7,073  |  
|                                    | Deferred tax liability              |                      |        | (2,126 | )
|                                    |                                     |                      |        |       
|Total                               |                                     | $                    | 41,522 |       
|                                    |                                     |                      |        |       

The purchase price paid by New SAC under the
stock purchase agreement was fixed and no contingencies were
identified that would have resulted in a change in the overall
purchase price. However, in allocating the purchase price, New
SAC recorded a full valuation allowance

-22-



---



##### 



against deferred tax assets in accordance with
Statement of Financial Accounting Standards No. 109
Accounting for Income Taxes, or
SFAS 109. The deferred tax assets subject to this valuation
allowance were based on the excess of tax bases over the fair
values of acquired property, plant and equipment and liabilities
assumed, for which New SAC expected to receive tax deductions in
U.S. federal and state returns in future periods based on
their ability to generate taxable income in the United States.


As of June 28, 2002, we reduced to zero the
net carrying values of the intangible assets pushed down to our
financial statements in connection with the November 2000
transaction. The reduction in our recorded intangible assets
resulted from an allocation of the tax benefits recognized by
Old Seagate in its U.S. income tax returns attributable to
acquisition related deferred tax assets in accordance with
SFAS 109. There was no impact on our valuation allowance.
Our share of the reduction in intangibles was allocated as
follows:

|                                                                   |                                                                         |                   |        |        | 
|------------------------------------------------------------------ | ----------------------------------------------------------------------- | ----------------- | ------ | ------ | 
|                                                                   |                                                                         | Allocated to     
|                                                                   |                                                                         | Crystal Decisions
|                                                                   |                                                                         | at June 28, 2002 
|                                                                   |                                                                         |                  
|                                                                   |                                                                         | (in thousands)   
|Reduction in the net carrying values of developed
    technologies |                                                                         | $                 | 7,194  |       
|Reduction in the net carrying values of assembled
    workforce    |                                                                         |                   | 3,340  |       
|                                                                   |                                                                         |                   |        |       
|                                                                   | Total reduction in intangible assets                                    |                   |        | 10,534 | 
|                                                                   |                                                                         |                   |        |       
|Less deferred tax liability related to intangible
    assets       |                                                                         |                   | (1,403 | )     
|                                                                   |                                                                         |                   |        |       
|                                                                   | Total reduction in intangible assets, net of
    deferred tax liability |                   | $      | 9,131  | 
|                                                                   |                                                                         |                   |        |       

The following summarizes the impact of push down
accounting on our results:



| |   |                                                                                                                                                                                                                                                                                                                                                                                                          
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Revenues.Deferred
    revenues were reduced by $1.3 million and revenues were
    reduced on a declining basis during the 12 months following
    the November 2000 transaction. Consequently, revenues were
    lower by $1.2 million for fiscal 2001 and $128,000 for
    fiscal 2002 than they would have been had the push down
    adjustments not occurred. There was no impact during fiscal 2003.
|
| |  | Depreciation.Our
    long-lived tangible assets were reduced by $4.3 million on
    November 22, 2000. Consequently, we recorded
    $1.5 million less depreciation expense for each of fiscal
    2001 and fiscal 2002 and $775,000 less for fiscal 2003 than we
    would have recorded had the push down adjustments not been made.                                                                   
|
| |  | Amortization.We
    recorded additional amortization expense of $3.3 million
    for fiscal 2001 and $5.6 million for fiscal 2002 from
    recording the incremental fair value of intangible assets pushed
    down to our financial statements on November 22, 2000.                                                                                                                                   
|
| |  | In-process research and development.We wrote off in-process research and
    development of $7.1 million as an expense in fiscal 2001.
    We did not have any similar expenses in fiscal 2002 or fiscal
    2003.                                                                                                                                                                                       
|
| |  | Elimination of intangible assets, net of
    deferred tax liability.We reduced
    intangible assets, net of deferred tax liability, by
    $9.1 million to zero at June 28, 2002.                                                                                                                                                                                                                       

While we have adopted SFAS No. 142
Goodwill and Other Intangible Assets at the
beginning of fiscal 2003, the non-amortization provisions and
the impairment tests will not be applicable until such time as
we have recorded goodwill and other intangible assets on our
balance sheet.

-23-



---



##### 



Results of Operations

The following table sets forth certain statements
of operations data expressed as a percentage of total revenues
for the periods indicated. In view of our significant growth in
recent years and as a result of the application of pushdown
accounting to our financial statements, we believe that fiscal
year-to-year comparisons of our financial results are not
necessarily meaningful and you should not rely upon them as an
indication of future performance.

|                                  |                                                          |                          |    |          |     |          |    |    |     |  |    |    |     | 
|--------------------------------- | -------------------------------------------------------- | ------------------------ | -- | -------- | --- | -------- | -- | -- | --- |  | -- | -- | --- | 
|                                  |                                                          |                         
|                                  |                                                          | Fiscal Years Ended      
|                                  |                                                          |                         
|                                  |                                                          | June 29,                 |    | June 28, |     | June 27,
|                                  |                                                          | 2001                     |    | 2002     |     | 2003    
|                                  |                                                          |                          |    |          |     |         
|Revenues:                         |                                                          |                          |    |          |     |          |    |    |     |  |    |   
|                                  | Licensing                                                |                          |    | 64       | %   |          |    | 64 | %   |  |    | 65 | %  
|                                  | Maintenance, support and services                        |                          |    | 36       |     |          |    | 36 |     |  |    | 35 |    
|                                  |                                                          |                          |    |          |     |          |    |    |     |  |    |   
|                                  |                                                          | Total revenues           |    |          | 100 |          |    |    | 100 |  |    |    | 100 | 
|                                  |                                                          |                          |    |          |     |          |    |    |     |  |    |   
|Cost of revenues:                 |                                                          |                          |    |          |     |          |    |    |     |  |    |   
|                                  | Licensing                                                |                          |    | 3        |     |          |    | 3  |     |  |    | 2  |    
|                                  | Maintenance, support and services                        |                          |    | 25       |     |          |    | 21 |     |  |    | 20 |    
|                                  | Amortization of developed technologies                   |                          |    | 2        |     |          |    | 2  |     |  |    |   |    
|                                  |                                                          |                          |    |          |     |          |    |    |     |  |    |   
|                                  |                                                          | Total cost of revenues   |    |          | 30  |          |    |    | 26  |  |    |    | 22  | 
|                                  |                                                          |                          |    |          |     |          |    |    |     |  |    |   
|Gross profit                      |                                                          |                          | 70 |          |     |          | 74 |    |     |  | 78 |   
|Operating expenses:               |                                                          |                          |    |          |     |          |    |    |     |  |    |   
|                                  | Sales and marketing                                      |                          |    | 44       |     |          |    | 43 |     |  |    | 38 |    
|                                  | Research and development                                 |                          |    | 17       |     |          |    | 14 |     |  |    | 15 |    
|                                  | General and administrative                               |                          |    | 9        |     |          |    | 9  |     |  |    | 10 |    
|                                  | Amortization of goodwill and other intangible
    assets |                          |    | 1        |     |          |    | 1  |     |  |    |   |    
|                                  | Write-off of in-process research and development         |                          |    | 4        |     |          |    |   |     |  |    |   |    
|                                  | Unusual items                                            |                          |    | 1        |     |          |    |   |     |  |    |   |    
|                                  | Restructuring costs                                      |                          |    |         |     |          |    |   |     |  |    |   |    
|                                  |                                                          |                          |    |          |     |          |    |    |     |  |    |   
|                                  |                                                          | Total operating expenses |    |          | 78  |          |    |    | 67  |  |    |    | 63  | 
|                                  |                                                          |                          |    |          |     |          |    |    |     |  |    |   
|Income (loss) from operations     |                                                          |                          | (8 | )        |     |          | 7  |    |     |  | 16 |   
|Interest and other income, net    |                                                          |                          | 2  |          |     |          | 1  |    |     |  |   |   
|                                  |                                                          |                          |    |          |     |          |    |    |     |  |    |   
|Income (loss) before income taxes |                                                          |                          | (6 | )        |     |          | 8  |    |     |  | 16 |   
|Provision for income taxes        |                                                          |                          | 1  |          |     |          | 2  |    |     |  | 4  |   
|                                  |                                                          |                          |    |          |     |          |    |    |     |  |    |   
|Net income (loss)                 |                                                          |                          | (7 | )%       |     |          | 6  | %  |     |  | 12 | % 
|                                  |                                                          |                          |    |          |     |          |    |    |     |  |    |   

Fiscal Years Ended June 28, 2002 and
June 27, 2003



| |         
| | --------
| | Revenues

The following table sets forth information
regarding the composition of our revenues and fiscal
period-to-period changes (dollars in thousands):

|                                           |                              |                   |         |         |   |          |    |   |  |   |         |    |  
|------------------------------------------ | ---------------------------- | ----------------- | ------- | ------- | - | -------- | -- | - |  | - | ------- | -- | -
|                                           |                              |                  
|                                           |                              | Fiscal Year Ended
|                                           |                              |                  
|                                           |                              | June 28,          |         | Percent |   | June 27,
|                                           |                              | 2002              |         | Change  |   | 2003    
|                                           |                              |                   |         |         |   |         
|Licensing revenues                         |                              | $                 | 140,009 |         |   |          | 33 | % |  | $ | 185,532 |   
|                                           | Percentage of total revenues |                   |         | 64      | % |          |    |   |  |   |         | 65 | %
|Maintenance, support and services revenues |                              | $                 | 77,161  |         |   |          | 32 | % |  | $ | 101,976 |   
|                                           | Percentage of total revenues |                   |         | 36      | % |          |    |   |  |   |         | 35 | %
|Total revenues                             |                              | $                 | 217,170 |         |   |          | 32 | % |  | $ | 287,508 |   

The majority of our revenues were derived from
licensing fees for our products and we anticipate that licensing
fees will continue to represent the majority of our revenues for
the foreseeable future. Our revenues have increased as a result
of the continued delivery of new products, better sales
training, the increased size and productivity of our sales force
and our targeted marketing campaigns. Additionally, we continued
to add new customers with our Crystal 8 and 9 product
offerings, which included the release of Crystal
Enterprise 8.5 in May 2002, Crystal Analysis 8.5 in
June 2002, Crystal Reports 9.0 in August 2002 and Crystal
Enterprise 9 in January 2003.

-24-



---



##### 



During fiscal 2002, revenues from a distributor,
Ingram Micro, accounted for $21.0 million, or approximately
10% of total revenues. Revenues from Ingram Micro represented
less than 10% of total revenues during fiscal 2003. No other
customer or distributor accounted for 10% or more of our total
revenues during these periods.

In fiscal 2002, our revenues were
$159.8 million, or 74% of total revenues, from customers in
North America, $41.8 million, or 19% of total revenues,
from customers in Europe, the Middle East and Africa and
$15.6 million, or 7% of total revenues, from customers in
the Asia Pacific region. In fiscal 2003, our revenues were
$212.0 million, or 74% of total revenues, from customers in
North America, $54.6 million, or 19% of total revenues,
from customers in Europe, the Middle East and Africa and
$20.9 million, or 7% of total revenues, from customers in
the Asia Pacific region.

Licensing revenues.The increase in licensing revenues
occurred across most sales channels and all regions, and was
primarily the result of the increased size and productivity of
our sales force and the addition of new customers purchasing
through our direct channel.

Maintenance, support and services revenues.The increase in maintenance, support
and services revenues was primarily attributable to increased
maintenance fees associated with sales of new licenses of our
products and to increased technical support revenues. Because
many of our customers renew maintenance agreements each year,
increased maintenance revenues are generated from the cumulative
growth in our customer base.



| |                 
| | ----------------
| | Cost of Revenues

The following table sets forth information
regarding the composition of our cost of revenues and fiscal
period-to-period changes (dollars in thousands):

|                                                   |                                                              |                   |        |         |   |          |      |    |  |   |        |    |  
|-------------------------------------------------- | ------------------------------------------------------------ | ----------------- | ------ | ------- | - | -------- | ---- | -- |  | - | ------ | -- | -
|                                                   |                                                              |                  
|                                                   |                                                              | Fiscal Year Ended
|                                                   |                                                              |                  
|                                                   |                                                              | June 28,          |        | Percent |   | June 27,
|                                                   |                                                              | 2002              |        | Change  |   | 2003    
|                                                   |                                                              |                   |        |         |   |         
|Cost of licensing revenues                         |                                                              | $                 | 4,993  |         |   |          | 12   | %  |  | $ | 5,617  |   
|                                                   | Percentage of licensing revenues                             |                   |        | 4       | % |          |      |    |  |   |        | 3  | %
|Cost of maintenance, support and services revenues |                                                              | $                 | 46,377 |         |   |          | 21   | %  |  | $ | 56,313 |   
|                                                   | Percentage of maintenance, support and services
    revenues |                   |        | 60      | % |          |      |    |  |   |        | 55 | %
|Amortization of developed technologies             |                                                              | $                 | 5,078  |         |   |          | (100 | )% |  | $ |       |   
|                                                   | Percentage of total revenues                                 |                   |        | 2       | % |          |      |    |  |   |        |   |  
|Total cost of revenues                             |                                                              | $                 | 56,448 |         |   |          | 10   | %  |  | $ | 61,930 |   
|                                                   | Percentage of total revenues                                 |                   |        | 26      | % |          |      |    |  |   |        | 22 | %

The absolute dollar increase in cost of licensing
revenues was equally due to increased license volume and cost
associated with new product releases. Cost of licensing revenues
vary depending on the volume, distribution method and mix of
software licenses shipped. Cost of maintenance, support and
services revenues increased as we continued to expand our
customer support and professional services organizations to meet
the demands of our growing customer base. These costs included
increases in salary and benefit costs of $7.4 million,
additional overhead cost allocations associated with increased
headcount of $4.0 million, a decrease in outside service
costs of $933,000 and cost savings of $857,000 associated with
travel and entertainment. Our overheads, which increased as the
result of additional facilities and information technology
costs, are generally allocated across departments based on
headcount. Amortization of developed technologies for fiscal
2002 related to the fair value of developed technologies of
$15.2 million pushed down to our financial statements as a
result of the November 2000 transaction. There was no
amortization during fiscal 2003 as a result of the reduction in
June 2002 in the net carrying values of the developed
technologies that were pushed down to our financial statements.

-25-



---



##### 





| |             
| | ------------
| | Gross Margin

Our gross profit as a percentage of total
revenues, or gross margin, increased from 74% for fiscal 2002 to
78% for fiscal 2003. The increase was primarily attributable to
the elimination of amortization of developed technologies in
fiscal 2003. Our gross margin from licensing revenues increased
from 96% for fiscal 2002 to 97% for fiscal 2003. Our gross
margin from maintenance, support and services revenues increased
from 40% for fiscal 2002 to 45% for fiscal 2003. The increase
was primarily the result of improved margins in maintenance and
technical support, which was partially offset by decreased
margins in our professional services organization. Our
maintenance, support and services margins are impacted by the
rate of utilization of our personnel and personnel costs
relating to the use of our employees versus outside contractors,
who are generally more expensive than our personnel.



| |                   
| | ------------------
| | Operating Expenses

The following table sets forth information
regarding the composition of our operating expenses and fiscal
period-to-period changes (dollars in thousands):

|                                        |                              |                   |         |         |   |          |      |    |  |   |         |    |  
|--------------------------------------- | ---------------------------- | ----------------- | ------- | ------- | - | -------- | ---- | -- |  | - | ------- | -- | -
|                                        |                              |                  
|                                        |                              | Fiscal Year Ended
|                                        |                              |                  
|                                        |                              | June 28,          |         | Percent |   | June 27,
|                                        |                              | 2002              |         | Change  |   | 2003    
|                                        |                              |                   |         |         |   |         
|Sales and marketing                     |                              | $                 | 94,449  |         |   |          | 15   | %  |  | $ | 108,470 |   
|                                        | Percentage of total revenues |                   |         | 43      | % |          |      |    |  |   |         | 38 | %
|Research and development                |                              | $                 | 30,515  |         |   |          | 37   | %  |  | $ | 41,924  |   
|                                        | Percentage of total revenues |                   |         | 14      | % |          |      |    |  |   |         | 15 | %
|General and administrative              |                              | $                 | 18,464  |         |   |          | 59   | %  |  | $ | 29,434  |   
|                                        | Percentage of total revenues |                   |         | 9       | % |          |      |    |  |   |         | 10 | %
|Amortization of other intangible assets |                              | $                 | 2,358   |         |   |          | (100 | )% |  | $ |        |   
|                                        | Percentage of total revenues |                   |         | 1       | % |          |      |    |  |   |         |   |  
|Total operating expenses                |                              | $                 | 145,786 |         |   |          | 23   | %  |  | $ | 179,828 |   
|                                        | Percentage of total revenues |                   |         | 67      | % |          |      |    |  |   |         | 63 | %

Sales and marketing.The increase in sales expenses in absolute dollars was primarily
associated with increased salary and benefits expense of
$8.7 million related to an overall increase in our sales
force of approximately 60 people and the resultant higher
total commissions. In addition, ancillary costs such as travel
and entertainment increased by $2.1 million. Marketing
expenses increased in absolute dollars of $1.1 million as
the result of additional headcount in the department and the
related costs associated with increased marketing campaigns and
promotional material associated with major releases. The
decrease in our sales and marketing expenses as a percentage of
total revenues resulted primarily from increased productivity in
our direct sales force in addition to a higher total percentage
of sales through our indirect channels.

Research and
development.The increase in research
and development expenses in absolute dollars primarily resulted
from increased salary and benefits costs of $5.6 million
associated with increased headcount. Expenses also increased by
$945,000 as a result of incremental outsourcing costs for
research and development related to final quality assurance
testing for our products. In addition, as research and
development headcount comprises approximately 25% of our
headcount, allocations for increases in facilities and overhead
costs accounted for $5.0 million of the increase. We expect
research and development costs to increase in absolute dollars
in future periods as we invest in new products and improvements
to our existing products.

General and
administrative.The increase in
general and administrative expenses in absolute dollars and as a
percentage of total revenues were primarily due to increases in
salary and benefits expense of $5.4 million relating to
increased staffing to support our growth and our enterprise
resource planning system implementation. Expenses also increased
by $2.8 million as

-26-



---



##### 



a result of increased professional service fees,
a non-recurring termination fee of $625,000 paid to Seagate
Technology for the benefit of New SAC related to a previous
consulting and advisory contract and recruiting fees and
relocation fees of $781,000 associated with the hiring of
several strategic positions. In addition, we accrued and
expensed a charitable contribution to the Community Foundation
of Silicon Valley of $1.2 million.


Amortization of other intangible
assets.Amortization of other
intangible assets for fiscal 2002 related to the fair value of
assembled workforce of $7.1 million pushed down to our
financial statements as a result of the November 2000
transaction. There was no amortization during fiscal 2003 as a
result of the reduction in June 2002 in the net carrying values
of the intangible assets that were pushed down to our financial
statements.

Interest and Other Income
(Expense), Net

Interest and other income (expense), net was
comprised of the following (dollars in thousands):

|                       |                                |                   |       |         |  |          |     |     |    |   |       |     | 
|---------------------- | ------------------------------ | ----------------- | ----- | ------- |  | -------- | --- | --- | -- | - | ----- | --- | 
|                       |                                |                  
|                       |                                | Fiscal Year Ended
|                       |                                |                  
|                       |                                | June 28,          |       | Percent |  | June 27,
|                       |                                | 2002              |       | Change  |  | 2003    
|                       |                                |                   |       |         |  |         
|Net interest income    |                                | $                 | 1,723 |         |  |          | (21 | )%  |    | $ | 1,354 |    
|Other income (expense) |                                |                   | (404  | )       |  |          | 13  | %   |    |   | (458  | )  
|                       | Interest and other income, net |                   | $     | 1,319   |  |          |     | (32 | )% |   | $     | 896 | 

Net interest income for fiscal 2002 included
$301,000 of interest received on the net receivable balance from
Seagate Technology and $450,000 of non-recurring interest
received on tax refunds. Since October 2001, we have earned the
majority of our net interest income from our cash and cash
equivalents at interest rates that were generally lower than
those earned from Seagate Technology, which managed our cash
prior to October 2001. Net interest income fluctuates depending
on movements in the general level of interest rates, our average
cash and available-for-sale securities balances, and,
previously, our net position under the revolving loan agreement
we had with Seagate Technology and the interest rates applied
thereon.

Other income (expense) was largely comprised
of net foreign exchange gains and losses, which represent the
impact of foreign exchange rate fluctuations on the translation
of foreign exchange transactions and balances into
U.S. dollars and varies depending upon movements in
currency exchange rates. During fiscal 2003, we incurred a net
foreign exchange loss of $503,000, which was the result of an
$1.2 million loss primarily as the result of the
translation of Canadian dollar payables at quarter end, offset
by a $660,000 gain as a result of the change in functional
currency of certain foreign subsidiaries from their respective
local currency to the U.S. dollar. We recently implemented
a partial hedging strategy for the Canadian exposures.

Income
Taxes

|                           |                    |                        |       |          |   |   |        |    |  
|-------------------------- | ------------------ | ---------------------- | ----- | -------- | - | - | ------ | -- | -
|                           |                    |                       
|                           |                    | Fiscal Year Ended     
|                           |                    |                       
|                           |                    | June 28,               |       | June 27,
|                           |                    | 2002                   |       | 2003    
|                           |                    |                        |       |         
|                           |                    |                       
|                           |                    | (dollars in thousands)
|Provision for income taxes |                    | $                      | 3,300 |          |   | $ | 13,191 |   
|                           | Effective tax rate |                        |       | 20       | % |   |        | 28 | %

The change in effective tax rate was due
primarily to the effect of continuing growth in profitability, a
decrease in available foreign research and development tax
credits and utilization of U.S. net operating losses in
fiscal 2002 that had previously been subject to a valuation
allowance.

-27-



---



##### 



Fiscal Years Ended June 29, 2001 and
June 28, 2002

Revenues

The following table sets forth information
regarding the composition of our revenues and fiscal
year-to-year changes (dollars in thousands):

|                                           |                              |                   |         |         |   |          |    |   |  |   |         |    |  
|------------------------------------------ | ---------------------------- | ----------------- | ------- | ------- | - | -------- | -- | - |  | - | ------- | -- | -
|                                           |                              |                  
|                                           |                              | Fiscal Year Ended
|                                           |                              |                  
|                                           |                              | June 29,          |         | Percent |   | June 28,
|                                           |                              | 2001              |         | Change  |   | 2002    
|                                           |                              |                   |         |         |   |         
|Licensing revenues                         |                              | $                 | 107,028 |         |   |          | 31 | % |  | $ | 140,009 |   
|                                           | Percentage of total revenues |                   |         | 64      | % |          |    |   |  |   |         | 64 | %
|Maintenance, support and services revenues |                              | $                 | 60,694  |         |   |          | 27 | % |  | $ | 77,161  |   
|                                           | Percentage of total revenues |                   |         | 36      | % |          |    |   |  |   |         | 36 | %
|Total revenues                             |                              | $                 | 167,722 |         |   |          | 29 | % |  | $ | 217,170 |   

Revenues from Ingram Micro accounted for
$27.7 million, or 16% of total revenues, for fiscal 2001
and $21.0 million, or 10% of total revenues, for fiscal
2002. The primary reason for the decrease during fiscal 2002 was
the transition of one of our products from the distributor
channel to direct sales. No other customer accounted for 10% or
more of our total revenues during fiscal 2001 or fiscal 2002.

In fiscal 2001, our revenues were
$123.5 million, or 74% of total revenues, from customers in
North America, $31.8 million, or 19% of total revenues,
from customers in Europe, the Middle East and Africa and
$12.5 million, or 7% of total revenues, from customers in
the Asia Pacific region. In fiscal 2002, our revenues were
$159.8 million, or 74% of total revenues, from customers in
North America, $41.8 million, or 19% of total revenues,
from customers in Europe, the Middle East and Africa and
$15.6 million, or 7% of total revenues, from customers in
the Asia Pacific region.

Licensing revenues.The increase in licensing revenues was
primarily attributable to an increase in the size and
productivity of our direct sales force. Our direct sales force
continued to add new customers, while continuing to make
additional sales to our existing customers. In addition, we
increased revenues from indirect sales, primarily from original
equipment manufacturers. All of our channels benefited from the
releases of our Crystal 8 product suite throughout fiscal 2001
and fiscal 2002.

Maintenance, support and services revenues.The absolute dollar increase in
maintenance, support and services revenues was attributable to a
higher cumulative installed customer base receiving maintenance.
In addition, both consulting and technical support revenues
increased as a result of new and existing agreements with our
customers and the initiation of new pricing arrangements for
these services.



| |                 
| | ----------------
| | Cost of Revenues

The following table sets forth information
regarding the composition of our cost of revenues and fiscal
year-to-year changes (dollars in thousands):

|                                          |                                                              |                   |        |         |   |          |    |    |  |   |        |    |  
|----------------------------------------- | ------------------------------------------------------------ | ----------------- | ------ | ------- | - | -------- | -- | -- |  | - | ------ | -- | -
|                                          |                                                              |                  
|                                          |                                                              | Fiscal Year Ended
|                                          |                                                              |                  
|                                          |                                                              | June 29,          |        | Percent |   | June 28,
|                                          |                                                              | 2001              |        | Change  |   | 2002    
|                                          |                                                              |                   |        |         |   |         
|Cost of licensing revenues                |                                                              | $                 | 5,504  |         |   |          | (9 | )% |  | $ | 4,993  |   
|                                          | Percentage of licensing revenues                             |                   |        | 5       | % |          |    |    |  |   |        | 4  | %
|Cost of maintenance, support and services |                                                              | $                 | 41,996 |         |   |          | 10 | %  |  | $ | 46,377 |   
|                                          | Percentage of maintenance, support and services
    revenues |                   |        | 69      | % |          |    |    |  |   |        | 60 | %
|Amortization of developed technologies    |                                                              | $                 | 3,050  |         |   |          | 66 | %  |  | $ | 5,078  |   
|                                          | Percentage of total revenues                                 |                   |        | 2       | % |          |    |    |  |   |        | 2  | %
|Total cost of revenues                    |                                                              | $                 | 50,550 |         |   |          | 12 | %  |  | $ | 56,448 |   
|                                          | Percentage of total revenues                                 |                   |        | 30      | % |          |    |    |  |   |        | 26 | %

-28-



---



##### 



We realized cost savings in cost of licensing
revenues due to initiatives to reduce our production,
fulfillment and shipping costs as a percentage of revenues. The
absolute dollar increase in cost of maintenance, support and
services revenues was the result of costs associated with
increased headcount of $2.8 million and an increase in the
use of external services to support our professional services
organization of $2.1 million. The decline in cost of
maintenance, support and services as a percentage of
maintenance, support and services revenues was primarily
attributable to the continued increase in maintenance revenues
which had nominal associated costs, increased pricing for our
technical support and cost control initiatives. At
November 22, 2000, existing developed technologies were
revalued and effective November 23, 2000, we began
amortizing over 36 months the $15.2 million of
developed technologies pushed down to our financial statements.
The absolute dollar increase for fiscal 2002 was the result of
amortization for fiscal 2001 being charged on a different and
smaller intangible asset base up to and including the five
months ended November 22, 2000.



| |             
| | ------------
| | Gross Margin

Our gross margin increased from 70% for fiscal
2001 to 74% for fiscal 2002. The increase in our gross margin
was primarily attributable to an increase in the margins for
maintenance, services and support from 31% in fiscal 2001 to 40%
in fiscal 2002.

Operating
Expenses

The following table sets forth information
regarding the composition of our operating expenses and fiscal
year-to-year changes (dollars in thousands):

|                                                         |                              |                   |         |         |   |          |      |    |  |   |         |    |  
|-------------------------------------------------------- | ---------------------------- | ----------------- | ------- | ------- | - | -------- | ---- | -- |  | - | ------- | -- | -
|                                                         |                              |                  
|                                                         |                              | Fiscal Year Ended
|                                                         |                              |                  
|                                                         |                              | June 29,          |         | Percent |   | June 28,
|                                                         |                              | 2001              |         | Change  |   | 2002    
|                                                         |                              |                   |         |         |   |         
|Sales and marketing                                      |                              | $                 | 73,888  |         |   |          | 28   | %  |  | $ | 94,449  |   
|                                                         | Percentage of total revenues |                   |         | 44      | % |          |      |    |  |   |         | 43 | %
|Research and development                                 |                              | $                 | 29,236  |         |   |          | 4    | %  |  | $ | 30,515  |   
|                                                         | Percentage of total revenues |                   |         | 17      | % |          |      |    |  |   |         | 14 | %
|General and administrative                               |                              | $                 | 15,465  |         |   |          | 19   | %  |  | $ | 18,464  |   
|                                                         | Percentage of total revenues |                   |         | 9       | % |          |      |    |  |   |         | 9  | %
|Amortization of goodwill and other intangible
    assets |                              | $                 | 2,023   |         |   |          | 17   | %  |  | $ | 2,358   |   
|                                                         | Percentage of total revenues |                   |         | 1       | % |          |      |    |  |   |         | 1  | %
|Write-off of in-process research and development         |                              | $                 | 7,073   |         |   |          | (100 | )% |  | $ |        |   
|                                                         | Percentage of total revenues |                   |         | 4       | % |          |      |    |  |   |         |   |  
|Unusual items                                            |                              | $                 | 1,851   |         |   |          | (100 | )% |  | $ |        |   
|                                                         | Percentage of total revenues |                   |         | 1       | % |          |      |    |  |   |         |   |  
|Restructuring costs                                      |                              | $                 | 573     |         |   |          | (100 | )% |  | $ |        |   
|                                                         | Percentage of total revenues |                   |         |        |   |          |      |    |  |   |         |   |  
|Total operating expenses                                 |                              | $                 | 130,109 |         |   |          | 12   | %  |  | $ | 145,786 |   
|                                                         | Percentage of total revenues |                   |         | 78      | % |          |      |    |  |   |         | 67 | %

Sales and marketing.The absolute dollar increase in sales and marketing expenses was
primarily associated with increased salary and benefits expense
of $11.3 million related to an overall increase in our
sales force headcount and $7.1 million related to higher
total commissions associated with increased revenues. In support
of our sales efforts, travel and entertainment costs increased
by $1.1 million. The decrease as a percentage of revenues
resulted from increased productivity of our sales force.

Research and
development.The absolute dollar
increase was primarily associated with costs associated with
increased headcount of $1.4 million, offset by targeted
reductions in discretionary spending of $355,000. The decrease
in research and development costs as a percentage of total
revenues was the result of revenues increasing at a greater rate
than research and development costs due to cost control measures.

-29-



---



##### 



General and
administrative.The increase in
absolute dollars was primarily attributable to higher salary
expense associated with our headcount growth of $755,000 and
increased outside service costs of $1.9 million, which was
offset in part by cost management initiatives.

Amortization of goodwill and other intangible
assets.At November 22, 2000,
existing goodwill and other intangible assets were revalued and
effective November 23, 2000, we began amortizing over
36 months the $7.1 million of assembled workforce
pushed down to our financial statements. The absolute dollar
increase was the result of amortization for fiscal 2001 being
charged on a different and smaller intangible asset base up to
and including the five months ended November 22, 2000.

Write-off of in-process research and
development.As part of the push down
of the purchase price allocation of the November 2000
transaction, $7.1 million of in-process research and
development was recorded. This amount, which was 4% of total
revenues for fiscal 2001, was written off in its entirety in
fiscal 2001 because the acquired technologies had not yet
reached technological feasibility and there were no future
alternative uses. We had no write-off of in-process research and
development for fiscal 2002.

Unusual items.Unusual items were comprised of non-cash compensation expense
arising from the acceleration and net exercise of Old Seagate
options to purchase 51,500 shares of Old Seagate common stock
held by our employees on November 22, 2000. We had no
unusual items for fiscal 2002.

Restructuring costs.The restructuring costs for fiscal 2001 related to the closure
of eight offices in Europe and were part of a restructuring plan
announced in September 2000 to consolidate our European sales
organization. The restructuring costs were primarily comprised
of costs related to the termination of office leases and other
related office closure costs, as well as severance and benefits
for nine sales and marketing employees who were terminated in
September 2000. As of June 28, 2002, no material amount
remained outstanding. We had no restructuring charges during
fiscal 2002.

Interest and Other Income
(Expense), Net

Interest and other income (expense), net was
comprised of the following (dollars in thousands):

|                       |                                          |                   |       |         |  |          |      |     |    |   |       |       | 
|---------------------- | ---------------------------------------- | ----------------- | ----- | ------- |  | -------- | ---- | --- | -- | - | ----- | ----- | 
|                       |                                          |                  
|                       |                                          | Fiscal Year Ended
|                       |                                          |                  
|                       |                                          | June 29,          |       | Percent |  | June 28,
|                       |                                          | 2001              |       | Change  |  | 2002    
|                       |                                          |                   |       |         |  |         
|Net interest income    |                                          | $                 | 1,950 |         |  |          | (12  | )%  |    | $ | 1,723 |      
|Other income (expense) |                                          |                   | 701   |         |  |          | (158 | )%  |    |   | (404  | )    
|                       | Interest and other income (expense), net |                   | $     | 2,651   |  |          |      | (50 | )% |   | $     | 1,319 | 

Interest income earned on the net receivable
balance under our agreements with Old Seagate and its successor,
Seagate Technology, was approximately $1.8 million for
fiscal 2001 and $301,000 for fiscal 2002. Since October 2001, we
have earned the majority of our net interest income from our
cash and cash equivalent balances. While our cash and cash
equivalents balances increased, the average interest rate was
lower, which resulted in a decrease in net interest income for
fiscal 2002.

Other income (expense) was largely comprised of
net foreign exchange gains and losses, which represented the
impact of foreign exchange rate fluctuations on the translation
of foreign exchange transactions into U.S. dollars and
varied depending upon movements in currency exchange rates.
During fiscal 2002, we had a net foreign exchange loss of
$434,000 primarily as the result of the strengthening of the
Canadian dollar relative to the U.S. dollar.

-30-



---



##### 



Income
Taxes

|                           |                    |                        |       |          |  |   |       |    |  
|-------------------------- | ------------------ | ---------------------- | ----- | -------- |  | - | ----- | -- | -
|                           |                    |                       
|                           |                    | Fiscal Year Ended     
|                           |                    |                       
|                           |                    | June 29,               |       | June 28,
|                           |                    | 2001                   |       | 2002    
|                           |                    |                        |       |         
|                           |                    |                       
|                           |                    | (dollars in thousands)
|Provision for income taxes |                    | $                      | 1,183 |          |  | $ | 3,300 |   
|                           | Effective tax rate |                        |       |         |  |   |       | 20 | %

The change in the effective tax rate was due
primarily to our achievement of profitability and the absence of
certain non-cash charges associated with the November 2000
transaction. In addition, the income tax provision for fiscal
2001 included benefits recorded during the period from
July 1, 2000 to November 22, 2000 under the tax
allocation agreement we had with Old Seagate. We provided a
valuation allowance for fiscal 2001 and fiscal 2002 against the
deferred tax assets arising primarily from temporary differences
and net operating losses carried forward due to the uncertainty
of their realizability.

The effective rate used to record the income tax
provision differed from the 35% U.S. federal statutory rate
in fiscal 2001 due primarily to the fact that we operate in
various foreign jurisdictions, as well as an increase in the
valuation allowance for U.S. deferred tax assets arising
subsequent to the termination of the tax allocation agreement on
November 22, 2000 and non-deductible charges arising from
push down accounting. Other significant items impacted by the
above were the recognition of previously deferred revenues and
an adjustment to the acquisition related intangible assets.

The effective rate used to record the income tax
provision differed from the 35% U.S. federal statutory rate
in fiscal 2002 due primarily to the benefits of operating in
various foreign jurisdictions, including the availability of
research and development investment tax credits in Canada, an
increase in the valuation allowance and the inclusion of a
reconstituted net operating loss. The increase in the valuation
allowance and the inclusion of a reconstituted net operating
loss are the results of filing the U.S. federal and state
income tax returns for the year ended June 29, 2001 and
reflecting a final revised purchase price allocation schedule
regarding the November 2000 transaction.

Selected Quarterly Financial Data

The table below shows our unaudited quarterly
statements of operations data for each of the eight quarters in
the period ended June 27, 2003. This information has been
derived from our unaudited financial statements, which, in our
opinion, have been prepared on the same basis as our audited
financial statements and include all adjustments, consisting
only of normal recurring adjustments, necessary for the fair
presentation of the information for the quarters presented. The
results of operations for any quarter are not necessarily
indicative of the results of operations for any future period.

-31-



---



##### 



|                                                                           |                                                          |                                       |        |          |        |           |        |          |        |           |        |          |        |           |        |          |        |   |        |        |        |   |        |        |        |   |        |        |        |   |        |        |        | 
|-------------------------------------------------------------------------- | -------------------------------------------------------- | ------------------------------------- | ------ | -------- | ------ | --------- | ------ | -------- | ------ | --------- | ------ | -------- | ------ | --------- | ------ | -------- | ------ | - | ------ | ------ | ------ | - | ------ | ------ | ------ | - | ------ | ------ | ------ | - | ------ | ------ | ------ | 
|                                                                           |                                                          |                                      
|                                                                           |                                                          | Quarters Ended                       
|                                                                           |                                                          |                                      
|                                                                           |                                                          | Sept. 28,                             |        | Dec. 28, |        | March 29, |        | June 28, |        | Sept. 27, |        | Dec. 27, |        | March 28, |        | June 27,
|                                                                           |                                                          | 2001                                  |        | 2001     |        | 2002      |        | 2002     |        | 2002      |        | 2002     |        | 2003      |        | 2003    
|                                                                           |                                                          |                                       |        |          |        |           |        |          |        |           |        |          |        |           |        |         
|                                                                           |                                                          |                                      
|                                                                           |                                                          | (in thousands, except per share data)
|Revenues:                                                                  |                                                          |                                       |        |          |        |           |        |          |        |           |        |          |        |           |        |          |        |   |        |        |        |   |        |        |        |   |        |        |        |   |        |       
|                                                                           | Licensing                                                |                                       | $      | 30,855   |        |           | $      | 32,916   |        |           | $      | 36,737   |        |           | $      | 39,501   |        |   | $      | 41,787 |        |   | $      | 46,966 |        |   | $      | 46,309 |        |   | $      | 50,470 |       
|                                                                           | Maintenance, support and services                        |                                       |        | 17,196   |        |           |        | 18,654   |        |           |        | 19,438   |        |           |        | 21,873   |        |   |        | 23,261 |        |   |        | 24,206 |        |   |        | 26,737 |        |   |        | 27,772 |       
|                                                                           |                                                          |                                       |        |          |        |           |        |          |        |           |        |          |        |           |        |          |        |   |        |        |        |   |        |        |        |   |        |        |        |   |        |       
|                                                                           |                                                          | Total revenues                        |        |          | 48,051 |           |        |          | 51,570 |           |        |          | 56,175 |           |        |          | 61,374 |   |        |        | 65,048 |   |        |        | 71,172 |   |        |        | 73,046 |   |        |        | 78,242 | 
|Cost of revenues:                                                          |                                                          |                                       |        |          |        |           |        |          |        |           |        |          |        |           |        |          |        |   |        |        |        |   |        |        |        |   |        |        |        |   |        |       
|                                                                           | Licensing                                                |                                       |        | 1,469    |        |           |        | 1,063    |        |           |        | 1,296    |        |           |        | 1,165    |        |   |        | 1,732  |        |   |        | 1,379  |        |   |        | 1,334  |        |   |        | 1,172  |       
|                                                                           | Maintenance, support and services                        |                                       |        | 10,153   |        |           |        | 11,092   |        |           |        | 11,903   |        |           |        | 13,229   |        |   |        | 13,907 |        |   |        | 13,249 |        |   |        | 14,196 |        |   |        | 14,961 |       
|                                                                           | Amortization of developed technologies                   |                                       |        | 1,269    |        |           |        | 1,270    |        |           |        | 1,270    |        |           |        | 1,269    |        |   |        |       |        |   |        |       |        |   |        |       |        |   |        |       |       
|                                                                           |                                                          |                                       |        |          |        |           |        |          |        |           |        |          |        |           |        |          |        |   |        |        |        |   |        |        |        |   |        |        |        |   |        |       
|                                                                           |                                                          | Total cost of revenues                |        |          | 12,891 |           |        |          | 13,425 |           |        |          | 14,469 |           |        |          | 15,663 |   |        |        | 15,639 |   |        |        | 14,628 |   |        |        | 15,530 |   |        |        | 16,133 | 
|                                                                           |                                                          |                                       |        |          |        |           |        |          |        |           |        |          |        |           |        |          |        |   |        |        |        |   |        |        |        |   |        |        |        |   |        |       
|Gross profit                                                               |                                                          |                                       | 35,160 |          |        |           | 38,145 |          |        |           | 41,706 |          |        |           | 45,711 |          |        |   | 49,409 |        |        |   | 56,544 |        |        |   | 57,516 |        |        |   | 62,109 |       
|Operating expenses:                                                        |                                                          |                                       |        |          |        |           |        |          |        |           |        |          |        |           |        |          |        |   |        |        |        |   |        |        |        |   |        |        |        |   |        |       
|                                                                           | Sales and marketing                                      |                                       |        | 21,373   |        |           |        | 23,101   |        |           |        | 23,996   |        |           |        | 25,979   |        |   |        | 23,900 |        |   |        | 27,501 |        |   |        | 29,007 |        |   |        | 28,062 |       
|                                                                           | Research and development                                 |                                       |        | 6,945    |        |           |        | 7,217    |        |           |        | 7,527    |        |           |        | 8,826    |        |   |        | 9,403  |        |   |        | 10,095 |        |   |        | 10,360 |        |   |        | 12,066 |       
|                                                                           | General and administrative                               |                                       |        | 4,059    |        |           |        | 4,213    |        |           |        | 5,270    |        |           |        | 4,922    |        |   |        | 6,580  |        |   |        | 7,589  |        |   |        | 6,564  |        |   |        | 8,701  |       
|                                                                           | Amortization of goodwill and other intangible
    assets |                                       |        | 589      |        |           |        | 589      |        |           |        | 589      |        |           |        | 591      |        |   |        |       |        |   |        |       |        |   |        |       |        |   |        |       |       
|                                                                           |                                                          |                                       |        |          |        |           |        |          |        |           |        |          |        |           |        |          |        |   |        |        |        |   |        |        |        |   |        |        |        |   |        |       
|                                                                           |                                                          | Total operating expenses              |        |          | 32,966 |           |        |          | 35,120 |           |        |          | 37,382 |           |        |          | 40,318 |   |        |        | 39,883 |   |        |        | 45,185 |   |        |        | 45,931 |   |        |        | 48,829 | 
|                                                                           |                                                          |                                       |        |          |        |           |        |          |        |           |        |          |        |           |        |          |        |   |        |        |        |   |        |        |        |   |        |        |        |   |        |       
|Income from operations                                                     |                                                          |                                       | 2,194  |          |        |           | 3,025  |          |        |           | 4,324  |          |        |           | 5,393  |          |        |   | 9,526  |        |        |   | 11,359 |        |        |   | 11,585 |        |        |   | 13,280 |       
|Interest and other income (expense), net                                   |                                                          |                                       | 729    |          |        |           | 116    |          |        |           | 359    |          |        |           | 115    |          |        |   | 452    |        |        |   | 252    |        |        |   | (518   | )      |        |   | 710    |       
|                                                                           |                                                          |                                       |        |          |        |           |        |          |        |           |        |          |        |           |        |          |        |   |        |        |        |   |        |        |        |   |        |        |        |   |        |       
|Income before income taxes                                                 |                                                          |                                       | 2,923  |          |        |           | 3,141  |          |        |           | 4,683  |          |        |           | 5,508  |          |        |   | 9,978  |        |        |   | 11,611 |        |        |   | 11,067 |        |        |   | 13,990 |       
|Provision for income taxes                                                 |                                                          |                                       | 502    |          |        |           | 501    |          |        |           | 660    |          |        |           | 1,637  |          |        |   | 2,895  |        |        |   | 3,273  |        |        |   | 2,942  |        |        |   | 4,081  |       
|                                                                           |                                                          |                                       |        |          |        |           |        |          |        |           |        |          |        |           |        |          |        |   |        |        |        |   |        |        |        |   |        |        |        |   |        |       
|Net income                                                                 |                                                          | $                                     | 2,421  |          |        | $         | 2,640  |          |        | $         | 4,023  |          |        | $         | 3,871  |          |        | $ | 7,083  |        |        | $ | 8,338  |        |        | $ | 8,125  |        |        | $ | 9,909  |       
|                                                                           |                                                          |                                       |        |          |        |           |        |          |        |           |        |          |        |           |        |          |        |   |        |        |        |   |        |        |        |   |        |        |        |   |        |       
|Basic net income per share                                                 |                                                          | $                                     | 0.03   |          |        | $         | 0.03   |          |        | $         | 0.05   |          |        | $         | 0.05   |          |        | $ | 0.09   |        |        | $ | 0.11   |        |        | $ | 0.11   |        |        | $ | 0.13   |       
|                                                                           |                                                          |                                       |        |          |        |           |        |          |        |           |        |          |        |           |        |          |        |   |        |        |        |   |        |        |        |   |        |        |        |   |        |       
|Diluted net income per share                                               |                                                          | $                                     | 0.03   |          |        | $         | 0.03   |          |        | $         | 0.05   |          |        | $         | 0.05   |          |        | $ | 0.09   |        |        | $ | 0.11   |        |        | $ | 0.10   |        |        | $ | 0.12   |       
|                                                                           |                                                          |                                       |        |          |        |           |        |          |        |           |        |          |        |           |        |          |        |   |        |        |        |   |        |        |        |   |        |        |        |   |        |       
|Weighted average number of shares used in basic
    net income per share   |                                                          |                                       | 75,445 |          |        |           | 75,490 |          |        |           | 75,620 |          |        |           | 75,848 |          |        |   | 75,895 |        |        |   | 75,950 |        |        |   | 76,008 |        |        |   | 76,061 |       
|Weighted average number of shares used in diluted
    net income per share |                                                          |                                       | 75,445 |          |        |           | 75,817 |          |        |           | 76,739 |          |        |           | 78,947 |          |        |   | 79,677 |        |        |   | 79,194 |        |        |   | 79,823 |        |        |   | 82,258 |       

-32-



---



##### 



Our total revenues and gross profit increased in
each of the eight quarters ended June 27, 2003,
reflecting the growth of our business and increased customer
base. Sales and marketing expenses generally increased each
quarter as we steadily invested in our sales and marketing
personnel and resources to address market opportunities. Sales
and marketing expenses decreased in the quarter ended
September 27, 2002 due to reduced marketing expenses in the
quarters, following the release of products in the prior two
quarters, a reduction in sales and marketing systems development
expenses and reduced sales expenses. Sales expense decreased in
the three months ended June 27, 2003, due to reduced
commission expense in the quarter. Research and development
expenses have increased in each of the quarters ending
June 27, 2003, reflecting our commitment to continuing
investment in product development and technology advancement.
The quarterly fluctuation in general and administrative expenses
was due to a variety of factors. In the three months ended
March 29, 2002, general and administrative expenses
increased due primarily to increased salary expenses, legal fees
and other outside services expenses. In the three months ended
September 27, 2002, general and administrative expenses
increased due primarily to recruiting and relocation expenses
for our senior executives, an additional bonus awarded by our
board of directors to a senior executive officer and increased
outside services costs, including consulting and legal fees. In
the three months ended December 27, 2002, general and
administrative expenses increased due primarily to increased
personnel costs and consulting fees related to the
implementation of our new enterprise resource planning system, a
one-time payment of $625,000 to Seagate Technology for the
benefit of New SAC relating to the termination of a
consulting and advisory arrangement and increased outside
services expenses, including legal fees. In the three months
ended March 28, 2003, we had $801,000 of foreign exchange
expense due to the strengthening of the Canadian dollar relative
to the U.S. dollar. In the three months ended June 27,
2003, $1.2 million of donation expense was accrued which
was related to our donation commitment to the Community
Foundation of Silicon Valley.

Liquidity and Capital Resources

|                                        |  |                |        |          |  |          |        |  |  |   |         | 
|--------------------------------------- |  | -------------- | ------ | -------- |  | -------- | ------ |  |  | - | ------- | 
|                                        |  |               
|                                        |  | As of         
|                                        |  |               
|                                        |  | June 29,       |        | June 28, |  | June 27,
|                                        |  | 2001           |        | 2002     |  | 2003    
|                                        |  |                |        |          |  |         
|                                        |  |               
|                                        |  | (in thousands)
|Cash and available-for-sale securities* |  | $              | 34,379 |          |  | $        | 71,451 |  |  | $ | 107,918 | 
|Working capital                         |  |                | 10,750 |          |  |          | 26,426 |  |  |   | 49,762  | 



---



|  |                                                                                                                                                     
|- | ----------------------------------------------------------------------------------------------------------------------------------------------------
|* | Includes cash equivalents and short and long-term
    investments, and for June 27, 2003 excludes restricted cash
    of approximately $2.0 million.

The majority of our cash and available-for-sale
securities are held in U.S. dollar denominated bank
deposits or highly liquid investments in accordance with our
investment policy. The remaining portion of our cash balances is
denominated in the local currencies of our foreign operations,
including Canadian dollars, British pounds, Japanese yen, Euros
and other currencies. All of our cash is maintained in accounts
with high credit quality financial institutions and our
available-for-sale securities are maintained in highly rated
instruments.

|                                                        |  |                    |        |          |  |          |        |   |  |   |         |  
|------------------------------------------------------- |  | ------------------ | ------ | -------- |  | -------- | ------ | - |  | - | ------- | -
|                                                        |  |                   
|                                                        |  | Fiscal Years Ended
|                                                        |  |                   
|                                                        |  | June 29,           |        | June 28, |  | June 27,
|                                                        |  | 2001               |        | 2002     |  | 2003    
|                                                        |  |                    |        |          |  |         
|                                                        |  |                   
|                                                        |  | (in thousands)    
|Net cash provided by operating activities               |  | $                  | 13,037 |          |  | $        | 41,069 |   |  | $ | 57,028  |  
|Net cash (used) in investing activities                 |  |                    | (9,594 | )        |  |          | (9,877 | ) |  |   | (27,538 | )
|Net cash provided by (used in) financing
    activities |  |                    | 27,810 |          |  |          | 5,294  |   |  |   | (1,103  | )

-33-



---



##### 





| |                     
| | --------------------
| | Operating Activities

Our principal source of liquidity is our cash and
available-for-sale securities, as well as the cash we generate
from operations. For fiscal 2001, fiscal 2002 and fiscal 2003,
we have generated more cash from our operating activities than
we used. We earned more revenues year-over-year, including
deferred revenues, and improved cash collections to
65 average days sales outstanding for fiscal 2003 from
68 days for fiscal 2002. In addition, we increased our
gross margins and reduced our overall operating costs as a
percentage of total revenues.

In fiscal 2003, we began a extensive
implementation of an enterprise resource planning system for our
North America and Asia Pacific regions. The system included
modules for use by our financial and administrative functional
departments including human resources, payroll, project
management, budgeting, order management, accounts receivable,
accounts payable, general ledger and other financial functions.
To date, we have incurred approximately $6.6 million of
expenditures in connection with the implementation of our
enterprise resource planning system. The implementation of the
enterprise resource planning system and the adjustment of our
procedures to adapt to the new system has been slower and more
costly than we anticipated. We expect to implement the system in
Europe in the first half of fiscal 2004 and expect to have the
entire implementation completed by the end of calendar 2003.



| |                     
| | --------------------
| | Investing Activities

Prior to fiscal 2003, our investing activities
consisted solely of the purchase of property and equipment to
support the growth of our business. In fiscal 2001, investing
activities were primarily for the purchase of leaseholds
improvements, computers, furniture and office equipment. During
fiscal 2002, investing activities were primarily for the
purchase of computer equipment and costs related to the purchase
and implementation of a global enterprise resource planning
system. Our investing activities in fiscal 2003 included costs
related to implementation of new systems, including our
enterprise resource planning system, leasehold improvements and
furniture related to the expansion of existing leased space and
other computer purchases.

We anticipate that our capital expenditures will
be approximately $22 million for fiscal 2004. The majority
of our capital expenditures are denominated in Canadian dollars.
The amount we spend on capital expenditures will vary
significantly depending on a number of factors including the
timing of our facilities expansion, our information technology
and telecommunications systems upgrades and build outs and our
completion of our enterprise resource planning system
implementation.

Prior to fiscal 2003, we did not invest in
securities with maturities of 90 days or more. In addition,
prior to October 2001, the majority of our cash balances
were managed for us by Old Seagate and Seagate Technology, and
represented a net receivable balance on the consolidated
financial statements, on which we earned interest. During fiscal
2003, we purchased $14.2 million of short-term investments
and received $9.3 million on maturity of some of these
investments. In addition, we purchased $3.3 million of
long-term investments, which had not matured as of June 27,
2003.



| |                     
| | --------------------
| | Financing Activities

Prior to fiscal 2001, some of our working capital
requirements were financed by borrowings from Old Seagate
available under a revolving loan agreement that was subsequently
amended on July 4, 2001 and renewed with Seagate
Technology. The revolving loan agreement originally provided for
maximum outstanding borrowings of up to $60.0 million, with
the amount being reduced to $15.0 million on renewal. The
revolving loan agreement expired on July 4, 2002 and was
not renewed. There was no outstanding receivable or payable
balance under this agreement upon its expiration.

-34-



---



##### 



We borrowed $24.0 million from Old Seagate
in fiscal 2000 under the revolving loan agreement to fund our
operations. During fiscal 2001, we repaid $4.8 million to
Old Seagate under the revolving loan agreement. As a result of
the receivable that arose in conjunction with the tax allocation
agreement with Old Seagate, we received $31.0 million.
During fiscal 2002, in conjunction with the expiration of the
revolving loan agreement, Old Seagate repaid the remaining
balance of $4.3 million on the receivable balance, which
was offset by nominal borrowing of $871,000 during fiscal 2002.

We receive cash payments on the issuance of
common stock on the exercise of stock options by our employees
and directors. Cash received from this source was
$1.6 million in fiscal 2001, $1.9 million in fiscal
2002 and $916,000 in fiscal 2003. We cannot predict when our
employees or directors will exercise their stock options and as
such this source of cash is expected to vary.

During fiscal 2003, our Canadian subsidiary
deposited $2.0 million into a guaranteed investment
certificate to secure an overdraft credit facility and foreign
exchange forward trading line. The balance and interest earned
thereon is classified as restricted cash.

The following table summarizes our facilities
operating lease commitments as of June 27, 2003 (in
thousands):

|                 |  |         |  |              |       |           |  |           |        |           |  |   |       |  |  |   |        | 
|---------------- |  | ------- |  | ------------ | ----- | --------- |  | --------- | ------ | --------- |  | - | ----- |  |  | - | ------ | 
|                 |  |         |  |             
|                 |  |         |  | Fiscal Years
|                 |  |         |  |             
|                 |  | Total   |  | 2004         |       | 2005-2006 |  | 2007-2008 |        | 2009-2015
|                 |  |         |  |              |       |           |  |           |        |          
|Operating leases |  | $48,009 |  | $            | 8,361 |           |  | $         | 11,275 |           |  | $ | 8,141 |  |  | $ | 20,232 | 

In May 2003, we agreed to pledge
$1.0 million to the Community Foundation of Silicon Valley,
which we accrued and expensed in fiscal 2003 and paid on
June 30, 2003. We also agreed to match employee
contributions to the Community Foundation of Silicon Valley up
to 1% of our income before interest, taxes and amortization for
the prior fiscal year. The amount accrued for our matching
contribution in fiscal 2003 was approximately $220,000. We
accrued and expensed in fiscal 2003 and paid this amount in July
2003. The maximum amount that we could pay under this matching
plan for fiscal 2004 would be approximately $453,000.

Certain shares issued and option grants made
under our 1999 stock option plan to residents of California,
Maryland and New York may not have complied with all applicable
securities laws of those states. Accordingly, we are planning to
make a rescission offer to these stockholders and optionees
which will allow the holders to elect, during a limited period
of time, to return their shares or options to us in return for a
payment equal to their purchase price or 20% of their aggregate
exercise price, plus any applicable interest. As of
June 27, 2003 approximately 291,010 outstanding shares of
our common stock and approximately 1,361,928 shares subject
to outstanding options will be subject to the rescission offer.
The shares and options had purchase and exercise prices ranging
from $4.00 to $8.00 per share. We do not believe that the
holders of these shares of our common stock and options to
purchase our common stock will accept our offer because the
prices at which we will offer to repurchase them are less than
the estimated fair market value of the Business Objects ADSs and
cash that our stockholders will receive and estimated fair
market value of the options to acquire Business Objects ADSs our
optionees will receive if Business Objects proposed
acquisition of our company is completed. However, in the
unlikely event that all of these persons accepted our offer, we
would make total payments of approximately $2.9 million,
which we would fund from our existing cash balances.

Financing
Agreements

In October 2002, we executed an agreement with
Comerica for a $15.0 million revolving line of credit. The
revolving line provides for interest to be calculated at
U.S. prime rate or LIBOR plus 2.5% per annum. Borrowings
under the revolving line are limited to 80% of eligible accounts

-35-



---



##### 



receivable, with an additional $2.0 million
available in any month in which we maintain $15.0 million
in our investment accounts with Comerica or some of its
affiliates. On September 30, 2004, any outstanding
principal and interest under the line of credit will be
immediately due and payable. Upon notice to Comerica and without
penalty, Crystal Decisions may terminate the agreement at any
time provided that all obligations have been paid in full. The
revolving line is collateralized by substantially all of our
personal property, excluding our intellectual property. The
agreement also required our U.S. and Canadian subsidiaries to
pledge all of their assets in support of our obligations under
the agreement. We pledged shares of most of our subsidiaries.


The terms of the revolving line require us, among
other things, to maintain the following quarterly financial
covenants on a consolidated basis:



| |   |                                                                                                                                                                                                                                  
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | a ratio of unrestricted cash and cash equivalents
    plus 80% of eligible accounts receivable to current
    liabilities less deferred revenue of at least 1.25 to 1.0;                                                         
|
| |  | a tangible net worth of at least
    $28.0 million plus 50% of the net income for each
    quarter ending after October 1, 2002 plus 75% of the
    gross proceeds received by us from the sale of our equity
    securities; and
|
| |  | positive free cash flow for the four quarter
    period then ended and positive free cash flow for at least two
    of the four quarters in such period.                                                                         

We are restricted from selling, leasing or
otherwise disposing of any part of our business or property
under most circumstances. In addition, the agreement places
restrictions on entering into arrangements that will result in a
change of control, places restrictions on our ability to pay
dividends and restricts our ability to incur other forms of
indebtedness. We are also restricted from making some types of
distributions or investments. We are also required to maintain
at least an aggregate of $10 million in investment accounts
with Comerica and some of its affiliates. No amounts were
outstanding under the revolving line at June 27, 2003 or as
of the date of this document. As of June 27, 2003, we
maintained $57.1 million of our cash equivalents balance
with Comerica.

Our Canadian subsidiary entered into a overdraft
credit facility with The Bank of Nova Scotia during fiscal 2002
whereby The Bank of Nova Scotia will provide up to Canadian
$2.0 million credit for certain overdrafts plus a foreign
exchange forward trading line generally supporting notional
contracts in the range of $4.0 million to
$6.0 million. Any overdraft balances are subject to
interest computed at the banks prime lending rate payable
monthly. During fiscal 2003, there were no balances outstanding
under this agreement. On September 26, 2002, our Canadian
subsidiary placed $2.0 million on deposit with The Bank of
Nova Scotia as a general hypothecation to the overdraft credit
facility and the foreign exchange line. The funds held and the
interest earned thereon are classified as restricted cash on our
balance sheet.

Our future liquidity and capital requirements
will depend on numerous factors, including:



| |   |                                                                                                                           
| | - | --------------------------------------------------------------------------------------------------------------------------
| |  | the amount and timing of our revenues;                                                                                    
|
| |  | the extent to which our existing and new products
    gain market acceptance;                                             
|
| |  | the extent to which customers continue to renew
    maintenance agreements;                                               
|
| |  | the extent of required and planned capital
    expenditures required to support our current operations and
    growth; and
|
| |  | available borrowings under future credit
    arrangements, if any.                                                        

We believe that our current cash, cash
equivalents, short-term investments and the cash generated from
our operations, the overdraft agreement with The Bank of Nova
Scotia, and the available borrowings under the line of credit
with Comerica will be sufficient to meet our operating and
capital requirements for at least the next 12 months. We
anticipate that our capital

-36-



---



##### 



expenditures will be approximately
$22.0 million in fiscal 2004. We have no current plans, and
we are not currently negotiating, to obtain additional
financing. The factors described above will affect our future
capital requirements and the adequacy of our available funds. If
we need to raise funds in the future, we may be required to
raise those funds through public or private financings,
strategic relationships or other arrangements. We cannot assure
you that the funding, if needed, will be available on terms
attractive to us, or at all. Furthermore, any additional equity
financing may be dilutive to stockholders and debt financing, if
available, may involve restrictive covenants. Our failure to
raise capital as and when needed could have a negative impact on
our ability to pursue our business strategy and maintain
profitability.


Factors Affecting our Future Operating
Results



| |                                              
| | ---------------------------------------------
| | Risks Related to the Proposed
    Acquisition

The fair market value of the consideration
will fluctuate and is not subject to adjustment.

Upon completion of the acquisition, each share of
our common stock, other than those held by persons who exercise
appraisal rights, will receive a combination of cash and
Business Objects ADSs or ordinary shares. The market price of
Business Objects ADSs may fluctuate substantially both
prior to and following completion of the acquisition, which
could impact the aggregate value of the proposed acquisition.
For example, on July 18, 2003, the date of announcement of
the agreement, the value of the proposed acquisition was
approximately $820 million. As of August 18, 2003, the
value of the proposed acquisition was approximately
$968.0 million, due to the change in the price of Business
Objects ADSs. The terms of the merger agreement do not provide
for any adjustment in the number of Business Objects shares to
be issued in the acquisition as a result of such fluctuations.
In addition, we are not permitted to withdraw from the
acquisition or resolicit the vote of our stockholders solely
because of changes in the market price of Business Objects ADSs.
The price of Business Objects ADSs is subject to general price
fluctuations in the market for publicly traded equity
securities, and the price of Business Objects ADSs has
experienced significant volatility in the past. We cannot
predict or give any assurances as to the respective market
prices of Business Objects ADSs at any time before or after the
closing of the acquisition.

The announcement of the acquisition may have a
negative impact on our relationships with customers and our
earnings.

The public announcement of the acquisition may
have a material and adverse effect on our revenues and
profitability in the short term. In particular, prospective
customers could be reluctant to purchase licenses for our
products or our services if they are uncertain about the
strategic direction of the combined company, the continuation of
our product offerings or the willingness of the combined company
to support and maintain existing products. Uncertainty created
by the announcement of the acquisition may cause one large
customer, or a large number of smaller customers, to delay their
purchase decisions until the completion of the acquisition,
which could cause our quarterly financial results to be
significantly below the expectations of market analysts, which
could cause a reduction in their expectations of the results of
operations of the combined company and the market price of
Business Objects shares.

The announcement of the acquisition may cause
other relationships to be impaired.

Some of our customers, original equipment
manufacturers, distributors and other strategic partners could
decide to terminate or cancel their existing arrangements, or
fail to renew those arrangements as a result of the pending
acquisition. In addition, key employees may decide to terminate
their employment due to the pending acquisition or other
employees may experience

-37-



---



##### 



uncertainty about their future role with the
combined company, which could adversely affect our ability to
retain key management, marketing, sales and technical personnel.


Regardless of whether the acquisition occurs,
we will incur costs that affect our profitability.

We will incur direct transaction costs in
connection with the proposed acquisition, which will be expensed
in the quarters in which they are incurred, and which will
reduce our earnings for that period. A substantial amount of
these costs will be incurred whether or not the acquisition is
completed. In addition, because we have elected to proceed with
the proposed acquisition in lieu of our previously announced
initial public offering, we will be required to expense
approximately $2.8 million of legal, accounting and
investment banking fees associated with the previously proposed
initial public offering that would not have otherwise been
recorded as current expenses.

In the quarter in which the acquisition is
completed or in the following quarters, we believe that the
combined company may incur charges to operations, such as costs
associated with combining the businesses of the two companies,
which currently cannot be estimated reasonably to reflect costs
associated with integrating our company with Business Objects.
We cannot assure you that the combined company will not incur
additional material charges in subsequent quarters to reflect
additional costs associated with the acquisition. In addition, a
portion of the acquisition related costs may be included in the
purchase price and capitalized as an element of goodwill.
Goodwill is required to be tested for impairment at least
annually and the combined company will be required to record a
charge to earnings in any period that impairment of goodwill is
determined.

Business Objects business is different
than ours and, as a result, the market prices of Business
Objects ADSs may fluctuate in unexpected ways.

When the acquisition is completed, our
stockholders will become holders of Business Objects ADSs.
Business Objects business differs from ours and Business
Objects results of operations, as well as the price of
Business Objects ADSs, may be affected by factors different from
those affecting our results of operations.

We and Business Objects must obtain regulatory
and other approvals to close the acquisition.

As a condition to the obligations of our company
and Business Objects to complete the acquisition, the Securities
and Exchange Commission must have declared effective a
registration statement relating to the proposed issuance of
shares by Business Objects, Business Objects shareholders
must approve the proposed acquisition and we must provide an
information statement to our stockholders describing the action
by written consent to approve the proposed transaction delivered
by Seagate Software (Cayman) Holdings. In addition, Business
Objects must file a prospectus with the Commission des
Opérations de Bourse, an agency which regulates the French
stock market, Euronext Paris S.A. We cannot provide any
assurance that the Securities and Exchange Commission will
declare Business Objects registration statement effective
in a timely manner or that Business Objects will obtain the
required approvals from the Commission des
Opérations de Bourse. In addition, we and Business
Objects must make certain filings with the U.S. Department
of Justice and Federal Trade Commission regarding the proposed
acquisition. Even if regulatory approvals are obtained, any
federal, state or foreign governmental entity or any private
person may challenge the acquisition at any time before or after
its completion.

-38-



---



##### 



We may face negative consequences if the
acquisition is not completed.

If the proposed acquisition is not completed, we
may be subject to the following material risks, among others:



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | upon the occurrence of certain events, we may be
    required to pay Business Objects a termination fee equal to
    $21 million;                                                                                                                                                                                                                                                                                                                                                  
|
| |  | we may not be able to undertake our proposed
    initial public offering in the short-term and our stockholders
    and holders of options to acquire our common stock may not have
    a public trading market in which to sell our common stock;                                                                                                                                                                                                                                 
|
| |  | market analysts estimates of our valuation
    may decline due to uncertainty regarding our stand-alone
    prospects;                                                                                                                                                                                                                                                                                                                                                            
|
| |  | some costs related to the proposed acquisition,
    such as legal, accounting, financial printing and a portion of
    the fees of our financial advisor, must be paid even if the
    acquisition is not completed; and                                                                                                                                                                                                                                                           
|
| |  | the diversion of managements attention from
    our day to day business, the uncertainty for employees and the
    unavoidable disruption to relationships with current and
    potential customers, original equipment manufacturers,
    distributors and other strategic partners during the period
    before the closing of the proposed acquisition may make it
    difficult for us to regain our financial and competitive
    position if the acquisition does not occur.

Further, if the acquisition agreement is
terminated and our board of directors determines to seek another
acquisition or business combination, we may not be able to find
a partner willing to pay an equivalent or more attractive price
than that which would be paid in the proposed acquisition by
Business Objects.

In addition, while the acquisition agreement is
in effect and subject to certain limited exceptions, we are
generally prohibited from initiating, soliciting, knowingly
encouraging or knowingly inducing or participating in any
discussions regarding a proposal to enter into any business
combination with any party other than Business Objects.



| |                              
| | -----------------------------
| | Risks Related to Our Business

We experience quarterly fluctuations in our
results of operations due to a number of factors, including
changes in demand for our products and changes in the mix of our
revenues, which could decrease our profitability.

Our revenues have been and in the future may
continue to be subject to significant quarterly fluctuations as
a result of a number of factors including:



| |   |                                                                                                                                                                           
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | the size and timing of orders from and delivery
    of products to major customers;                                                                                       
|
| |  | the mix of products and services of, and the
    amount of customization required for, our customer orders, which
    may delay the timing of our recognition of revenues;
|
| |  | delay in customer purchasing decisions due to
    anticipated product upgrades or new products;                                                                           
|
| |  | smaller than anticipated increases in revenues
    from the introduction of new products;                                                                                 
|
| |  | general weakening of the economy resulting in a
    decrease in the overall demand for computer software and
    services;                                                
|
| |  | effect of competitors on our market, including
    Microsoft Corporations recent announcement that it intends
    to release a competing reporting product;              

-39-



---



##### 





| |   |                                                                                                                                                             
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | seasonal factors, potentially resulting in slower
    sales in our first and third fiscal quarters; and                                                     
|
| |  | disruption and delay of business due to man-made
    or natural disasters, including health concerns such as Severe
    Acute Respiratory Syndrome, or SARS.

In addition, our expenses have been and, in the
future, may continue to be subject to significant quarterly
fluctuations as a result of a number of factors including:



| |   |                                                                                                                                                   
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------
| |  | the impact of changes in foreign exchange rates
    on our expenses and the cost of our products;                                                 
|
| |  | the degree of utilization of our consulting
    personnel and third party consulting services;                                                    
|
| |  | the timing and amount of our capital expenditures;                                                                                                
|
| |  | the cost of improving or maintaining our systems;                                                                                                 
|
| |  | the use of outside professional services, such as
    for internal improvement initiatives, litigation and expansion
    into new foreign markets;
|
| |  | timing of product development and new product
    initiatives;                                                                                    
|
| |  | accruals for any litigation settlement amounts;
    and                                                                                           
|
| |  | the timing of recruiting and relocation costs,
    especially those for senior officers.                                                          

Fluctuations in our revenues and expenses may
cause our quarterly results to be unpredictable, which may cause
our stock price to decline.

We cannot assure you that we will sustain or
increase our profitability.

While we achieved profitability in fiscal 2002,
we cannot assure you that we will be able to sustain or increase
profitability on a quarterly or annual basis. We incurred a net
loss of $11.5 million for fiscal 2001. However, we achieved
net income of $13.0 million for fiscal 2002 and net income
of $33.5 million for fiscal 2003. We expect our operating
expenses to increase as our business grows and we anticipate
that we will continue to make investments in our business.
Therefore, our results of operations will be harmed if our
revenues do not increase at a rate equal to or greater than
increases in our expenses or are insufficient for us to sustain
profitability.

Our sales forecasts are only estimates and if
we overestimate revenues, we may be unable to reduce our
expenses to avoid or minimize a negative impact on our quarterly
results of operations.

Our revenues, particularly our licensing revenues
which represent a majority of our revenues, are difficult to
forecast and may fluctuate significantly from quarter to
quarter. Our licensing revenues represented 64% of our
total revenues in fiscal 2001, 64% of our total revenues in
fiscal 2002 and 65% of our total revenues in fiscal 2003. While
analysis of anticipated sales trends provides us with guidance
in business planning and budgeting, our estimates may not
correlate with actual revenues in a particular quarter or over a
longer period of time. Variations in the rate and timing of
conversion of our sales prospects into actual licensing revenues
could cause us to plan or budget inaccurately and those
variations could adversely affect our financial results. In
particular, delays, reductions in amount or cancellation of
customers purchases would adversely affect the overall
level and timing of our revenues, and our business, results of
operations and financial condition could be harmed.

In addition, because our costs are relatively
fixed in the short term, we may be unable to reduce our expenses
to avoid or minimize the negative impact on our quarterly
results of operations if anticipated revenues are not realized.
As a result, our quarterly results of operations could be worse
than anticipated.

-40-



---



##### 



We have a long sales cycle for large-scale
deployments of our products, which could make it difficult for
us to plan our expenses and forecast our revenues.

Although we are not currently dependent on
large-scale deployments of our products for a substantial
portion of our revenues, we expect large-scale deployments to
increase in number in the future. To date, potential customers
who are contemplating significant deployments of our products
have typically invested substantial time, money and other
resources and involved many people in the decision to license
our software products. As a result, we may experience a six to
12 month delay between the first contact with a potential
customer and the placement of an order while the potential
customer completes a product evaluation and seeks internal
approval for the purchase. During this long sales cycle, events
may occur that could affect the size, timing or completion of
the order. For example, the potential customers budget and
purchasing priorities may change, the economy may experience a
further downturn or new competing technology may enter the
marketplace. We may lose significant sales or experience reduced
sales as the result of our long sales cycle, which would reduce
our revenues.

We use our distributors and other resellers to
market and distribute our products and, if we fail to maintain
and expand these sales channels, we may not be able to maintain
or increase our revenues.

Sales to a small number of distributors and other
resellers generate a significant amount of our revenues. Our
indirect sales accounted for 37% of our total revenues in fiscal
2001, 33% of our total revenues in fiscal 2002 and 34% of our
total revenues in fiscal 2003. Our sales to Ingram Micro, Inc.,
a distributor, accounted for 16% of our total revenues in fiscal
2001, 10% of our total revenues in fiscal 2002 and less than 10%
of our total revenues in fiscal 2003. If Ingram Micro or our
other distributors were to materially reduce their purchases
from us, our business, financial condition and results of
operations would suffer unless we substantially increase sales
to other distributors or other resellers or through other sales
channels.

Our distributors and other resellers decide
whether to include our products among those that they sell and
generally carry and sell product lines that are competitive with
ours. Because distributors and other resellers are generally not
required to make a specified level of purchases from us, we
cannot be sure that they will prioritize selling our products.
Thus, our relationships with these distributors and other
resellers depend upon our continued cooperation. We rely on our
distributors and other resellers to sell our products, report
the results of these sales to us and to provide services to
certain of the end user customers of our products. If the
distributors and other resellers do not sell our products,
report sales accurately and in a timely manner and adequately
service those end user customers, our revenues and the adoption
rates of our products could be harmed.



| |                                                                                                                                                                                                   
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Substantially all of our revenues are derived
    from two of our products and a decline in sales for those
    products could substantially reduce our revenues and affect our
    profitability.

We derive substantially all of our revenues from
our Crystal Reports and Crystal Enterprise products and related
services. Revenues from these product lines account for, and are
expected to continue to account for, substantially all of our
revenues for the foreseeable future. We may not be able to
replace revenues from these products and services if they were
to decline. Accordingly, our future results of operations will
depend on maintaining and increasing customer purchases of these
products and services and maintaining or increasing the average
selling prices of these products.

-41-



---



##### 



We face significant exposure to foreign
exchange rate fluctuations and if we were to experience a
substantial fluctuation, our profitability may change in
unpredictable ways outside of our control.

Because we have substantial research and
development, sales operations and administration in Canada and
the United Kingdom, we pay a substantial portion of our expenses
in the Canadian dollar and the British pound but receive a
substantial majority of our revenues in U.S. dollars.
Approximately 80% of our revenues were denominated in
U.S. dollars, 6% in British pounds and less than 5% in
Canadian dollars for fiscal 2003. Approximately 34% of our total
expenses were denominated in U.S. dollars, 15% in British
pounds and 40% in Canadian dollars in fiscal 2003. These
percentages fluctuate with exchange rates, business operating
changes and cash flow versus expense patterns. Even a relatively
minor change in exchange rates could have a material impact on
our expenses and results of operations. For fiscal 2003, a
10% increase in the exchange rate of the Canadian dollar
relative to the U.S. dollar would have increased our
revenues by less than 1% but would have increased our expenses
by approximately 4%. We recently implemented a partial
hedging strategy for these exposures. Although we recently began
hedging, we cannot be certain that our efforts to minimize this
risk will be effective. We may also experience substantial
foreign exchange gains or losses due to the volatility of other
currencies compared to the U.S. dollar.

We may have difficulties providing and
managing the increased technical performance and support
requirements for large-scale deployments, which could cause a
decline in or delay in recognition of our revenues and an
increase of our expenses.

Large, enterprise-wide deployments of our
products require greater technical stability, performance and
support than we have typically had to provide in the past. We
may have difficulty managing the timeliness of these deployments
and our internal allocation of personnel and resources. Any
difficulty could cause us to lose existing customers, face
potential customer disputes or limit the number of new customers
who purchase our products, which could cause a decline in or
delay in recognition of revenues or rate of growth, and could
cause us to increase our research and development and technical
support costs, either of which could impact our profitability.

If our products are not compatible with
various operating systems, we may not be able to sell products
to potential customers.

Our products are used in combination with various
operating systems. Our future success depends on our ability to
continue to support widely-used operating systems. Our
applications run primarily on the Microsoft operating systems.
Therefore, our ability to increase sales currently depends on
the continued acceptance of Microsofts operating system
products. In addition, we have increased our product development
efforts for the Unix platform. We also expect to develop
additional versions of our products for HP-UX, Linux and other
non-Microsoft-based operating systems. If we are unable to
develop and market products that support non-Microsoft platforms
on a timely and cost-effective basis, our sales will decrease
and our results of operations will be harmed.

We have strategic relationships with Microsoft
and SAP AG which, if terminated, would reduce our revenues and
operating results.

We have strategic relationships with Microsoft
and SAP that enable us to bundle our products with those of
Microsoft and SAP, and we are also developing certain utilities
and products to be a part of Microsofts and SAPs
products. We have limited control, if any, as to whether these
companies will devote adequate resources to promoting and
selling our products. If either Microsoft or SAP reduces its
efforts on our behalf or discontinues its relationship with us
and instead develops a relationship with one of our competitors
or designs its own competing business intelligence software, our
revenues and operating results may be reduced.

-42-



---



##### 



We will not be able to maintain our sales
growth if we do not attract, retain and motivate qualified sales
personnel.

We depend on our direct sales force for a
majority of our sales and have made significant expenditures in
recent years to expand our sales force. Our future success will
depend in part upon the expansion and productivity of our sales
personnel. We continue to experience voluntary and involuntary
attrition in our direct sales force and need to hire
replacements. As a result, our ability to continue to attract,
integrate, train, motivate and retain new sales personnel will
also affect our success. We face intense competition for sales
personnel in the software industry, and we cannot be sure that
we will be successful in hiring and retaining these personnel in
accordance with our plans. We cannot assure you that sales force
turnover will not be significant in the future. Even if we hire
and train a sufficient number of sales personnel, we cannot be
sure that we will generate enough additional revenues to exceed
the cost of the new personnel.



| |                                                                                                                                                   
| | --------------------------------------------------------------------------------------------------------------------------------------------------
| | Undetected product errors or defects could
    result in the loss of revenues, delayed market acceptance of our
    products or claims against us.

Software products as complex as those we offer
frequently contain undetected errors, defects, failures or
viruses especially when first introduced or when new versions or
enhancements are released or are configured to individual
customer systems. Despite product testing, our products, or
third party products that we incorporate into ours, may contain
undetected errors, defects or viruses that could:



| |   |                                                                                                                         
| | - | ------------------------------------------------------------------------------------------------------------------------
| |  | require us to make extensive changes to our
    products which could increase our research and development
    expenses;
|
| |  | expose us to claims for damages;                                                                                        
|
| |  | require us to incur additional technical support
    costs;                                                             
|
| |  | cause a negative customer reaction that could
    reduce future sales;                                                  
|
| |  | generate negative publicity regarding us and our
    products; or                                                       
|
| |  | result in customers delaying their purchase
    until the errors or defects have been remedied.                        

Any of these occurrences could have a material
adverse effect upon our business, results of operations or
financial condition.



| |                                                  
| | -------------------------------------------------
| | Risks Related to Our Industry and
    Competition



| |                                                                                                                                 
| | --------------------------------------------------------------------------------------------------------------------------------
| | If the market in which we sell business
    intelligence software does not grow as we anticipate, our
    revenues may not grow.

Our market is still emerging, and our success
depends upon its growth. Our potential customers may:



| |   |                                                                                               
| | - | ----------------------------------------------------------------------------------------------
| |  | not fully value the benefits of using business
    intelligence products;                     
|
| |  | not achieve favorable results using business
    intelligence products;                       
|
| |  | experience technical difficulty in implementing
    business intelligence products; or        
|
| |  | use alternative methods to solve the problems
    addressed by business intelligence software.

These factors may cause the market for business
intelligence software not to grow as quickly or become as large
as we anticipate, which may reduce the growth of our revenues.

-43-



---



##### 





| |                                                                                                                                             
| | --------------------------------------------------------------------------------------------------------------------------------------------
| | If we do not compete effectively with
    companies selling business intelligence products, our revenues
    may not grow and could decline.

We have experienced, and expect to continue to
experience, intense competition from a number of business
intelligence software companies. We compete principally with
vendors of integrated query, reporting, analysis and information
delivery software such as Actuate Corporation, Brio Software,
Inc., Business Objects, Cognos Incorporated, Hummingbird Ltd.,
Information Builders, Inc. and MicroStrategy Incorporated. Our
competitors may announce new products, services or enhancements
that better meet the needs of customers or changing industry
standards. Increased competition may cause price reductions and
reduce gross margins and loss of market share, any of which
could have a material adverse effect on our business, results of
operations and financial condition.

Additionally, we face competition from many
companies with whom we have strategic relationships, including
Baan Company N.V., Hyperion Solutions Corporation, International
Business Machines Corporation, Lawson Software, Inc., Microsoft,
PeopleSoft, Inc. and SAP, all of whom offer business
intelligence products that compete with ours. For example, in
February 2003, Microsoft announced that it intends to extend its
SQL Server business intelligence platform to include reporting
capabilities which may compete with both our Crystal Reports and
Crystal Enterprise products. Microsoft has announced that it
anticipates releasing a beta test version of this software in
the first half of calendar 2003. These companies could bundle
their business intelligence software with their other products
at little or no cost, giving them a potential competitive
advantage over us. Some of the companies that bundle our
products with theirs could elect not to do so in the future,
which could have a material adverse effect on our business,
results of operations and financial condition. These other
companies could also invest additional resources in existing
products or develop and market additional business intelligence
products that compete directly with ours, which could harm our
business, results of operations and financial condition.

Mergers of or other strategic transactions by
our competitors could weaken our competitive position or reduce
our revenues.

If one or more of our competitors were to merge
or partner with another of our competitors, the change in the
competitive landscape could adversely affect our ability to
compete effectively. Our competitors may also establish or
strengthen cooperative relationships with our current or future
distributors, resellers, original equipment manufacturers or
other parties with whom we have relationships, thereby limiting
our ability to sell through these channels and reducing
promotion of our products. Disruptions in our business caused by
these events could reduce our revenues.

Because some of our competitors have
significantly greater financial, technical, sales and marketing
resources than we have and pre-existing relationships with many
of our potential customers, we might not be able to sustain
profitability or gain additional market share.

Some of our competitors have significantly
greater financial, technical, sales and marketing resources and
greater name recognition than we do. These competitors may be
able to respond more quickly to new or emerging technologies and
changes in customer requirements or devote greater resources to
the development, promotion, sale and support of their products.
In addition, some of our competitors may be more successful than
we are in attracting and retaining customers. This competition
could harm our ability to sell products and services, which may
lead to lower prices for our products, reduced revenues and
reduced gross margins.

-44-



---



##### 



If the current economic slowdown continues and
our customers reduce, delay or cancel purchases of our products
and services, our results of operations will be
harmed.

We cannot predict what impact the current
economic slowdown will have on the business intelligence
software market or our business, but it may result in fewer
purchases of licenses of our software, extended sales cycles,
downward pricing pressures or lengthening of payment terms. Our
customers may also discontinue their annual renewals of our
maintenance and technical support services due to shrinking
budgets. If our customers reduce, delay or cancel purchases of
our products and services, our results of operations will be
harmed.

Technological advances and evolving industry
standards could reduce our future product sales, which could
cause our revenues to grow more slowly or decline.

The markets for our products are characterized by
rapidly changing technology, changing customer needs, evolving
industry standards and frequent new product introductions and
enhancements. The emergence of new industry standards in related
fields may adversely affect the demand for our products. This
could happen, for example, if new standards and technologies
emerged that were incompatible with customer deployments of our
applications. We cannot assure you that we will succeed in
developing and marketing product enhancements or new products
that respond to technological change, new industry standards,
changed customer requirements or competitive products on a
timely and cost-effective basis. Additionally, even if we are
able to develop new products and product enhancements, we cannot
assure you that they will achieve market acceptance.

Due to the length of our product development
cycle, we may fail to react rapidly to market forces, which
would hinder our ability to meet market demands.

Business intelligence software is inherently
complex, and it generally takes a long time to develop and test
major new products and product enhancements. Our future success
will depend on our ability to design, develop, test and support
new software products and enhancements on a timely and
cost-effective basis. If we are unable to identify a shift in
market demand quickly enough, we may not be able to develop
products to meet the new demand in a timely manner, or at all.
Our failure to respond successfully to changing market
conditions could have a negative effect on our business, results
of operations and financial condition.



| |                                               
| | ----------------------------------------------
| | Risks Related to Our Intellectual
    Property

If we fail to protect our intellectual
property rights, our customers or competitors might be able to
use our technologies to develop their own products, which could
weaken our competitive position or reduce our
revenues.

Our success is heavily dependent on our
proprietary technology, primarily software. It is difficult to
protect and enforce our intellectual property rights and protect
third parties from infringing on our products for a number of
reasons, including:



| |   |                                                                                                                                                                                 
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | applicable laws and our contracts and procedures
    provide only limited protection to our intellectual property
    rights;                                                   
|
| |  | third parties may develop similar technology
    independently;                                                                                                                 
|
| |  | policing unauthorized copying or use of our
    products is difficult and expensive;                                                                                            
|
| |  | software piracy is a persistent problem in the
    software industry and for us;                                                                                                
|
| |  | our patents may be challenged, invalidated or
    circumvented, and, therefore, the rights granted under these
    patents might not provide us with competitive advantages; and
|
| |  | our shrink-wrap licenses may be unenforceable
    under the laws of certain jurisdictions.                                                                                      

-45-



---



##### 



In addition, the laws of many countries do not
protect our proprietary rights to as great an extent as those of
the United States. We believe that effective protection of
intellectual property rights is unavailable or limited in
certain foreign countries, creating an increased risk of
potential loss of proprietary information due to piracy and
misappropriation. For example, we recently began to conduct
business in the Peoples Republic of China and intend to
outsource some of our operations to India where we believe there
is an increased risk that we may not be able to enforce our
contractual and intellectual property rights. If we fail to
protect our intellectual property rights, our business may be
harmed.

Our results of operations may decline if we
were subject to a protracted infringement claim or one that
results in a significant damage award.

From time to time, companies in our industry
receive claims that their products or business infringe the
intellectual property of third parties. Our competitors or other
third parties may challenge the validity or scope of our
patents, copyrights and trademarks. We believe that software
product developers will be increasingly subject to claims of
infringement as the functionality of products in our market
overlaps. A claim may also be made relating to technology that
we acquired from our predecessors or third parties. If we were
subject to a claim of infringement, regardless of the merit of
the claim or our defenses, the claim could:



| |   |                                                                                                                     
| | - | --------------------------------------------------------------------------------------------------------------------
| |  | require costly litigation to resolve;                                                                               
|
| |  | absorb significant management time;                                                                                 
|
| |  | cause us to enter into unfavorable royalty or
    license agreements;                                               
|
| |  | cause us to cease selling our products;                                                                             
|
| |  | require us to indemnify our customers,
    distributors, original equipment manufacturers or other
    resellers; or
|
| |  | require us to expend additional development
    resources to redesign our products.                                 

We may also be required to indemnify customers,
distributors, original equipment manufacturers and other
resellers for third-party products that are incorporated in our
products and that infringe the intellectual property rights of
others. Although many of these third parties are obligated to
indemnify us if their products infringe the rights of others,
the indemnification may not be adequate.

In addition, from time to time there have been
claims challenging the ownership of open source software against
companies that incorporate open source software into their
products. We use a limited amount of open source software in our
products and may use more open source software in the future. As
a result, we could be subject to suits by parties claiming
ownership of what we believe to be open source software. Any of
this litigation could be costly for us to defend, have a
negative effect on our results of operations and financial
condition or require us to devote additional research and
development resources to change our products.

The inability to obtain third-party licenses
required to develop our products could require us to obtain
substitute technology of inferior quality or performance
standards or at a greater cost, which could reduce our revenues
or increase our cost of revenues.

We license certain technologies from third
parties to be used in our products, generally on a nonexclusive
basis. For example, we have obtained rights from third parties
that allow us to market software tool kits that are designed
specifically to assist our products to be compatible with
products made by the third parties. If these agreements are
terminated or are not renewed, then we may lose the right to
distribute the tool kits or otherwise use them. In addition, the
termination of third party licenses or the failure of third
party licensors adequately to maintain or update their products
could delay our ability to deliver some of our products while we
seek to

-46-



---



##### 



implement alternative technology. Alternative
technology may be of inferior quality or performance standards
or may not be available on commercially reasonable terms or at
all. If we are unable to obtain necessary or desirable third
party technology licenses, our revenues could be reduced, our
cost of revenues could increase and our business could suffer.




| |                                    
| | -----------------------------------
| | Other Risks Related to Our Business

We are in the process of implementing an
enterprise resource planning system, which may result in a
short-term increase in our operating expenses and capital
expenditures, particularly if the implementation takes longer
than we expect.

In May 2002, we began to implement a global
enterprise resource planning system in North America and the
Asia Pacific region. The implementation of an enterprise
resource planning system is a complex and labor-intensive
process that requires the investment of a substantial amount of
time, money and other resources. We have experienced significant
difficulties in this implementation. The implementation process
to date has involved greater than anticipated expenditures of
technical, financial and management resources. While we
initially anticipated that the remaining regional implementation
would be completed by the end of fiscal 2003, we now believe
that implementation may not be completed until the end of
calendar 2003. Further difficulties may delay completion of the
implementation even longer. We also anticipate that we will need
to expend greater time, money and resources than we originally
expected. If we continue to experience further difficulties in
the implementation, this could:



| |   |                                                                                                                                                                                                                                                               
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | result in significant and unexpected increases in
    our operating expenses;                                                                                                                                                                                 
|
| |  | complicate and prolong our internal data
    gathering and analysis processes;                                                                                                                                                                                
|
| |  | require us to restructure or develop our internal
    processes to adapt to the new system;                                                                                                                                                                   
|
| |  | result in extended work hours for our employees
    and the temporary use of outside resources, with a resulting
    increase in expenses, to resolve any software configuration
    issues or to process transactions manually until issues are
    resolved;
|
| |  | result in the loss of management focus as
    attention paid to implementation is diverted from other issues;
    and                                                                                                                                         
|
| |  | cause disruption of our operations if the
    transition to the new enterprise resource planning system
    creates new or unexpected difficulties or if this system does
    not perform as expected.                                                        

We may not be able to operate our business
successfully as it grows, if we are unable to improve our
internal systems, processes and controls.

In order to operate our business successfully as
it grows, we need to improve our internal systems, processes and
controls. In order to achieve this, we are increasingly relying
on technical systems such as sales prospects management systems,
technical support systems, scheduling systems and order entry
systems. If we have difficulty providing and managing our
internal systems, processes and controls, these difficulties
could disrupt existing customer relationships, causing us to
lose customers, limit us to smaller deployments of our products
or increase our technical support costs.

We derive a material portion of our revenues
from customers outside of North America, and our failure to
address the difficulties associated with marketing, selling and
supporting our products outside North America could cause our
sales to decline.

We have significant international operations
including development facilities, sales personnel and customer
support operations. Our primary product development facilities
are located in Vancouver, Canada and Ipswich, England. We
derived 26% of our total revenues in fiscal 2001,

-47-



---



##### 



2002 and 2003 from sales outside of North
America. Our international operations are subject to certain
inherent risks including:




| |   |                                                                                                                                                                                                                                   
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | exchange rate fluctuations and the impact on
    pricing of our products and our expenses;                                                                                                                                        
|
| |  | increases in tariffs, duties, price controls,
    restrictions on foreign currencies or trade barriers imposed by
    foreign countries such as import and export restrictions;                                                   
|
| |  | technical difficulties associated with product
    localization;                                                                                                                                                                  
|
| |  | lack of experience in certain geographic markets;                                                                                                                                                                                 
|
| |  | longer payment cycles for sales in certain
    foreign countries;                                                                                                                                                                 
|
| |  | seasonal reductions in business activity in the
    summer months in Europe and certain other countries;                                                                                                                          
|
| |  | the significant presence of some of our
    competitors in some international markets;                                                                                                                                            
|
| |  | potentially adverse tax consequences;                                                                                                                                                                                             
|
| |  | management, staffing, legal and other costs of
    operating an enterprise spread over various countries;                                                                                                                         
|
| |  | political instability in the countries where we
    are doing business; and                                                                                                                                                       
|
| |  | fears concerning SARS or other travel or health
    risks that may adversely affect our ability to sell our products
    and services in any country in which the business sales culture
    encourages face-to-face interactions.

These factors could have an adverse effect on our
business, results of operations and financial condition.

In addition, we intend to continue to invest
resources to expand our sales and support operations into
strategic international locations such as the Peoples
Republic of China. If the revenues generated by these operations
are not adequate to offset the expense of establishing these
foreign operations, our business, results of operations and
financial condition could be materially harmed.

Our ability to pay dividends and engage in
other transactions may be limited if we do not receive Comerica
Bank  Californias consent because we are
subject to limitations under our revolving line of
credit.

In October 2002, we executed an agreement with
Comerica Bank  California for a
$15.0 million revolving line of credit. As of June 27,
2003 and the date of this document, we did not have any
outstanding borrowings under the revolving line. Subject to
limited exceptions, we are restricted in our ability to pay
dividends by the covenants contained in our revolving loan
agreement with Comerica. We are permitted to repurchase stock
and/or pay cash dividends in an aggregate amount not to exceed
$2.0 million during the term of the agreement, provided
that we are not in default under the agreement and that a
default would not occur immediately after payment of the
dividend. We may be unable to repurchase stock or pay dividends
in excess of those amounts if Comerica does not agree.

The terms of the revolving line also require us,
among other things, to maintain quarterly financial covenants
related to liquidity, minimum tangible net worth and quarterly
free cash flow. We are restricted from selling, leasing or
otherwise disposing of any part of our business or property
under most circumstances. In addition, the agreement places
restrictions on entering into arrangements that will result in a
change of control and restricts our ability to incur specified
forms of indebtedness. We are also restricted from making some
types of distributions or investments. We are also required to
maintain at least an aggregate of $10 million in investment

-48-



---



##### 



accounts with Comerica and some of its
affiliates. We may not be able to engage in these types of
transactions, such as the sale of debt securities, unless we
obtain Comericas consent. A potential acquirer, lender or
other strategic party may be reluctant to enter into an
arrangement with us that contemplates any of these transactions
unless we obtain Comericas consent. If we are unable to
obtain consent or cannot obtain consent in a timely manner, the
other party may not elect to proceed with a transaction that we
believe to be in our stockholders best interests.


We may be obligated to indemnify our customers
if they are subject to third party claims and any
indemnification obligation could hurt our results of operations
and harm our reputation.

Our license agreements with our customers
typically contain provisions designed to limit our exposure to
potential product liability claims. Existing or future United
States federal or state laws, foreign laws or unfavorable
judicial decisions may make these provisions ineffective.
Because our products are used with enterprise software systems
and databases, our liability could be substantial if we receive
an unfavorable judgment. In addition, our insurance against
product liability may not be adequate to cover a potential claim.

We are a party to litigation, including an
action commenced by Vedatech Corporation in the United Kingdom,
which could cause us to incur expenses to defend ourselves, and
in the event of an adverse judgment against us in any
litigation, we may have to pay damages, which could affect our
liquidity.

In November 1997, Vedatech commenced an action in
the Chancery Division of the High Court of Justice in the United
Kingdom against Crystal Decisions (UK) Limited, our wholly owned
subsidiary. The liability phase of the trial was completed in
March 2002, and we prevailed on all claims except for a
quantum meruit claim. The court ordered the parties to mediate
the amount of that claim and we came to a mediated settlement
with Vedatech in August 2002. The mediated settlement was
not material to our operations and contained no continuing
obligations. In September 2002, however, we received notice
that Vedatech is seeking to set aside the settlement. In
April 2003, we filed an action in the High Court of Justice
seeking a declaration that the mediated settlement agreement is
valid and binding. Although we believe that Vedatechs
basis for seeking to set aside our mediated settlement is
meritless, the outcome cannot be determined at this time. If our
mediated settlement were to be set aside, a negative outcome
could adversely affect our business, results of operations and
financial condition.

In addition to the foregoing, we are subject to
other litigation in the ordinary course of our business. While
we believe that the ultimate outcome of these matters will not
have a material adverse effect on us, the outcome of these
matters is not determinable and negative outcomes may adversely
affect our business, results of operations and financial
condition.



| |                                                                          
| | -------------------------------------------------------------------------
| | Risks Related to our Relationship with New SAC
    and Seagate Technology

If we are compelled to pay any indemnity
claims by VERITAS, our assets could be depleted
substantially.

In a series of transactions that took place in
November 2000, New SAC purchased the operating business of Old
Seagate, including the business intelligence software business
that we now operate. In a concurrent transaction, Old Seagate
and Seagate Software Holdings, our former parent, were sold to
VERITAS.

In connection with these transactions, New SAC
and certain of its affiliates, including us, agreed to indemnify
VERITAS, Old Seagate and some of their affiliates for
substantially all liabilities arising in connection with our
operating assets. Although we have agreed with Seagate
Technology and several of its affiliates on a methodology to
allocate liability, our liability, like Seagate
Technologys, is not capped. As a result, we continue to
face possible liability for

-49-



---



##### 



actions, events or circumstances arising or
occurring both before and after the November 2000 transactions.
Some areas of potential liability include:




| |   |                                                                                          
| | - | -----------------------------------------------------------------------------------------
| |  | tax liabilities;                                                                         
|
| |  | obligations under federal, state and foreign
    pension and retirement benefit laws; and
|
| |  | existing and future litigation.                                                          

In the event that our indemnity obligations are
triggered, we could experience a material adverse effect on our
business and financial condition.



| |                                                                                                                                                                                          
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Our directors may have conflicts of interest
    because of their ownership of capital stock of, and their board
    membership or employment with, New SAC and its other
    affiliates.

Many of our directors own interests in our
majority stockholder, New SAC, and some of them hold shares and
options to purchase the capital stock of Seagate Technology.
Ownership of New SAC or Seagate Technology could create, or
appear to create, potential conflicts of interest when our
directors are faced with decisions that could have different
implications for us and for New SAC or its other affiliates.

Some of our directors also serve on the boards of
directors of New SAC, Certance Holdings, a removable tape
storage company and an affiliate of New SAC, and Seagate
Technology. Several of our directors also serve as officers of
those entities, as well as other affiliates of New SAC. We
expect that some of our directors will continue to spend a
substantial portion of their time on the affairs of New SAC and
Seagate Technology, for which those entities may pay our
directors director fees or other compensation. In view of these
overlapping relationships, conflicts of interest may exist or
arise with respect to existing and future business dealings,
including the relative commitment of time and energy by our
directors to us and New SAC and Seagate Technology, potential
acquisitions of businesses or properties and other business
opportunities, the issuance of additional capital stock, the
election of new or additional directors or the payment of
dividends by us. We cannot assure you that any conflicts of
interest will be resolved in our favor.



| |                                                                                                                                                                                          
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Because New SAC controls our board of
    directors and owned 98.6% of our outstanding stock as of
    June 27, 2003, your ability to influence corporate matters
    is greatly limited.

New SAC owned approximately 98.6% of our
outstanding common stock as of June 27, 2003, and we expect
New SAC to continue to own a substantial number of shares of the
combined company after the acquisition. In addition, the
shareholders of New SAC are parties to a shareholders agreement
governing the ownership of New SACs stock. These
arrangements result in New SAC and the New SAC shareholders
acting together with respect to matters submitted to our
stockholders. Through its influence on our board of directors
and as a majority stockholder, New SAC has the ability to
determine the direction of our business, our operating budget,
whether to pursue possible acquisitions, whether to pursue a
sale of our company and other matters, including all matters
submitted to our stockholders. For example, New SAC and its
wholly owned subsidiary, Seagate Software (Cayman) Holdings,
have delivered actions by written consent to Business Objects
for the purpose of effecting the proposed acquisition, and the
number of shares represented by those consents are sufficient to
approve the proposed acquisition. Stockholders who are opposed
to the merger would have appraisal rights as their remedy. New
SAC and the shareholders of New SAC may be the largest single
stockholder of the combined company after the acquisition is
completed and for the foreseeable future and may decide not to
enter into a transaction in which you would receive
consideration for your Business Objects shares that is much
higher than the cost to you or the then-current market price of
those shares. In addition, New SAC and New SACs
shareholders could elect to sell a controlling interest in us
and you may not have a right to participate in the sale. Any
decision regarding their

-50-



---



##### 



ownership of us or Business Objects that New SAC
and its shareholders may make at some future time will be in
their absolute discretion.




|         |                                                               
|-------- | --------------------------------------------------------------
|Item 7A. | Quantitative and Qualitative Disclosures About
    Market Risk

Market risk represents the risk of loss that may
impact our financial position due to adverse changes in
financial market prices and rates. Our market risk exposure is
primarily a result of fluctuations in interest rates and foreign
exchange rates. We do not hold or issue financial instruments
for trading purposes.



| |                   
| | ------------------
| | Interest Rate Risk

Our exposure to market rate risk for changes in
interest rates relates primarily to our investment portfolio.
The investment of cash is regulated by our investment policy of
which the primary objective is the safety and preservation of
our invested funds by limiting default risk, market risk and
reinvestment risk. Among other selection criteria, our current
investment policy states that all investments, with the
exception of up to 20% of cash and cash equivalents, must be
maintained in U.S. dollar denominated investment grade
securities, with no maturities exceeding two years. We may hold
up to 20% of cash and cash equivalents in investment grade
non-U.S. denominated securities. In addition, our
investment policy does not allow for investment in technology
companies.

We mitigate the effect of default risk by
investing in only high credit quality securities and by using a
portfolio manager to respond appropriately to a significant
reduction in credit rating of any investment issuer, guarantor
or depository. The portfolio includes only diversified
marketable securities with active secondary or resale markets to
ensure portfolio liquidity.

Our investments in debt securities include money
market funds, investment grade commercial paper, corporate
bonds, government agency securities and other debt securities.
The diversity of our portfolio helps us to achieve our
investment objective. As of June 27, 2003, all of our cash,
cash equivalents, short-term and long-term investments were
classified as available-for-sale.

While we are exposed to interest rate
fluctuations in many countries, our interest income is most
sensitive to fluctuations in the general level of
U.S. interest rates. Declines in interest rates over time
will reduce our interest income and we do not attempt to reduce
or eliminate our exposure to interest rate risk through the use
of derivative financial instruments due to the short-term nature
of the investments. For fiscal 2002 and fiscal 2003,
fluctuations in the U.S. interest rate did not have a
material impact on our net interest income.



| |                      
| | ---------------------
| | Foreign Exchange Risk

We conduct business on a global basis in
international currencies. As such, we are exposed to adverse or
beneficial movements in foreign exchange rates. The majority of
our sales are denominated in U.S. dollars, the currency in
which we report our financial statements; however, we do conduct
a portion of our sales in currencies other than the
U.S. dollar, including the British pound, Euro, Canadian
dollar and Japanese yen.

We are also exposed to foreign exchange rate
fluctuations as the financial results of our foreign
subsidiaries are translated into U.S. dollars on
consolidation. Commencing on March 29, 2003, all
translation gains and losses will be included in the
determination of net income and will no longer be recorded as an
adjustment to accumulated other comprehensive income in
stockholders equity. As exchange rates vary, these
results, when translated, may vary from expectations and
adversely or beneficially impact overall expected profitability.
We also have exposure to foreign exchange rate fluctuations when
we translate cash from one currency into another to fund
operational requirements. In addition, we have exposure to the
change in rates

-51-



---



##### 



as the result of timing differences between
expenses being incurred and paid. As exchange rates vary, we may
experience a negative impact on financial results.


We incur the majority of our research and
development, customer support costs and administrative expenses
in Canadian dollars and British pounds. For example,
approximately 80% of our revenues were denominated in
U.S. dollars, 6% in British pounds and less than 5% in
Canadian dollars for fiscal 2003. Approximately 34% of our
total expenses were denominated in U.S. dollars, 15% in
British pounds and 40% in Canadian dollars in fiscal 2003. These
percentages fluctuate with exchange rates, business operating
changes and cash flow versus expense patterns. We have evaluated
our exposure to these risks and have determined that our only
significant operating exposure to foreign currencies at this
time is to the Canadian dollar. The strengthening of the
Canadian dollar has negatively affected and may continue to
negatively affect our operating expenses and net income and we
continue to have foreign currency risk from this source. For
fiscal 2003, a 10% increase in the Canadian dollar relative
to the U.S. dollar would have increased our revenues by
less than 1% but would have increased our expenses by
approximately 4%.

We cannot predict the effect of exchange rate
fluctuations upon our future results. We recently implemented a
partial hedging strategy for exposure to fluctuations in the
exchange rate of the Canadian dollar relative to the
U.S. dollar. Although we recently have begun hedging, we
cannot be sure that any hedging techniques we may implement will
be successful or that our business, results of operations,
financial condition and cash flows will not be adversely
affected by exchange rate fluctuations.



|        |                                                
|------- | -----------------------------------------------
|Item 8. | Financial Statements and Supplementary
    Data

Our consolidated financial statements and the
related independent auditors report appear on page F-1
through F-43 of this Annual Report on Form 10-K.

Our unaudited quarterly data appears in
Item 7 of this Annual Report on Form 10-K.

Item 9.     Changes
in and Disagreements with Accountants and Accounting and
Financial Disclosure.

None.

Item 9A.     Controls
and Procedures

Evaluation of disclosure controls and
procedures.Our management, with the
participation of our Chief Executive Officer and Chief Financial
Officer, evaluated the effectiveness of our disclosure controls
and procedures (as defined in Rule 13a-15(e) of the
Exchange Act) as of the end of the period covered by this
report. Based on that evaluation, our Chief Executive Officer
and Chief Financial Officer concluded that our disclosure
controls and procedures as of the end of the period covered by
this report were effective in ensuring that information required
to be disclosed by us in reports that we file or submit under
the Exchange Act of 1934 is recorded, processed, summarized and
reported within the time periods specified in the Securities and
Exchange Commissions rules and forms.

Changes in internal control over financial
reporting.There was no change in our
internal control over financial reporting (as defined in
Rule 13a-15(f) of the Exchange Act) that occurred during
the period covered by this report that has materially affected,
or is reasonably likely to materially affect, our internal
control over financial reporting.

-52-



---



##### 



PART III

Item
10.     Directors and Executive
Officers of the Registrant

Our directors and executive officers and certain
information about them as of June 27, 2003 are as follows:

|                   |  |     |    |          |  |                                                             |  |  |      | 
|------------------ |  | --- | -- | -------- |  | ----------------------------------------------------------- |  |  | ---- | 
|                   |  |     |    |          |  | Director or                                                
|                   |  |     |    |          |  | Executive                                                  
|                   |  |     |    |          |  | Officer                                                    
|Name               |  | Age |    | Position |  | Since                                                      
|                   |  |     |    |          |  |                                                            
|Jonathan J. Judge  |  |     | 49 |          |  | President, Chief Executive Officer and Director             |  |  | 2002 | 
|William G. Gibson  |  |     | 54 |          |  | Chief Operating Officer                                     |  |  | 2000 | 
|Eric Patel         |  |     | 46 |          |  | Chief Financial Officer                                     |  |  | 1999 | 
|Anthony L. Wind    |  |     | 41 |          |  | Chief Technology Officer                                    |  |  | 2001 | 
|Andrew L. Handford |  |     | 36 |          |  | Vice President of Products and Research and
    Development |  |  | 2001 | 
|Gregory B. Kerfoot |  |     | 43 |          |  | Chairman of the Board of Directors                          |  |  | 1999 | 
|Fred D. Anderson   |  |     | 59 |          |  | Director                                                    |  |  | 2002 | 
|Robert L. Bailey   |  |     | 46 |          |  | Director                                                    |  |  | 2003 | 
|Justin T. Chang    |  |     | 36 |          |  | Director                                                    |  |  | 2001 | 
|Stephen J. Luczo   |  |     | 46 |          |  | Director                                                    |  |  | 1999 | 
|David J. Roux      |  |     | 46 |          |  | Director                                                    |  |  | 2001 | 
|John W. Thompson   |  |     | 54 |          |  | Director                                                    |  |  | 2001 | 
|Donald L. Waite    |  |     | 70 |          |  | Director                                                    |  |  | 1999 | 

Jonathan J.
Judgehas served as our president
and chief executive officer since October 2002 and a director
since November 2002. From 1976 until he joined our company,
Mr. Judge held various management positions with IBM, most
recently as general manager of IBMs personal computing
division.

William G.
Gibsonhas served as our chief
operating officer since September 2000. From April 1998 to
September 2000, Mr. Gibson served as the president, western
region, of Rogers Wireless, Inc. From August 1997 to March 1998,
Mr. Gibson served as vice president-business units at
Lucent Technologies, Inc. Mr. Gibson served as vice
president and general manager at Sprint PCS from April 1997 to
August 1997. Mr. Gibson served as vice president and
general manager of Ameritech Cellular and Paging from June 1993
to April 1997.

Eric Patelhas served as our chief financial officer since November 1999.
From February 1997 to November 1999, Mr. Patel served in
various capacities at University Games, a board game
manufacturing company, the most recent of which was chief
financial officer and vice president of operations and
international sales and marketing. From May 1993 to November
1996, Mr. Patel served as director of strategy for Dreyers
Ice Cream.

Anthony L. Windhas served as our chief technology
officer since July 2001. From December 1999 to July 2001,
Mr. Wind served as our vice president of products and
research and development. From February 1998 to December 1999,
Mr. Wind served as our predecessors vice president of
products. Mr. Wind served as director of research and
development for our predecessors from September 1994 to February
1998.

Andrew L. Handfordhas served as our vice president
of products and research and development since July 2001. From
June 1999 to July 2001, Mr. Handford served as our director
of product management. From July 1995 to June 1999, Mr. Handford
held a series of management roles in our company and its
predecessors.

Gregory B.
Kerfoothas served as a director
since August 1999 and has served as the chairman of our board of
directors since July 2002. Mr. Kerfoot served as our chief
executive

-53-



---



##### 



officer from August 2000 until October 2002, and
as president from August 1999 to October 2002. Mr. Kerfoot
also served as our chief operating officer from August 1999
until August 2000. Mr. Kerfoot joined Old Seagate in May
1994 when Old Seagate acquired Crystal Computer Services. He
continued as director of research and development for Crystal
Computer Services. In May 1996, he was appointed president of
Crystal Computer Services and later in 1996 was named executive
vice president and general manager of Crystal Computer Services.
From September 1997 to September 1999, Mr. Kerfoot served
as the chief strategic officer for Seagate Software Holdings, as
well as executive vice president and general manager of Seagate
Software Holdings.


Fred D.
Andersonhas served as a member of
our board of directors since August 2002. Mr. Anderson is
executive vice president and chief financial officer of Apple
Computer, Inc., which he joined in April 1996. Mr. Anderson
is also a member of the board of directors of 3Com Corporation.

Robert L.
Baileyhas served as a member of
our board of directors since April 2003. Mr. Bailey is the
president and chief executive officer of PMC-Sierra, Inc. in
which capacity he has served since July 1997. Mr. Bailey
has served as a director for PMC-Sierra since October 1996 and
as chairman of PMC-Sierras board of directors from
February 2000 to February 2003.

Justin T.
Changhas served as a member of
our board of directors since February 2001. Mr. Chang is a
partner of Texas Pacific Group and has been an executive of
Texas Pacific Group since 1993. Prior to joining Texas Pacific
Group, Mr. Chang was a financial analyst in the Merchant Banking
Group and the Mergers and Acquisitions Group of Wasserstein
Perella & Co., Inc. Mr. Chang is also a member of
the board of directors of ON Semiconductor.

Stephen J.
Luczohas served as a member of
our board of directors since August 1999. Mr. Luczo served
as the chairman of our board of directors from August 1999 to
July 2002 and served as our chief executive officer from August
1999 to November 2000. Mr. Luczo became the chief executive
officer and a director of Seagate Technology and New SAC in
November 2000. From July 1998 to May 2000, he served as
president and chief executive officer of Old Seagate and was a
director of Old Seagate from July 1998 to November 2000. He
joined Old Seagate in October 1993 as senior vice president,
corporate development. In March 1995, he became Old
Seagates executive vice president, corporate development
and chief operating officer of the software group.
Mr. Luczo is a member of the Listed Company Advisory
Committee of the New York Stock Exchange.

David J. Rouxhas served as a member of our board of directors since February
2001. Mr. Roux is a managing member of Silver Lake
Partners, a private equity firm he co-founded in January 1999.
Since November 2000, Mr. Roux has served as chairman of New
SAC and as a director of Seagate Technology. From November 2000
until June 2002, Mr. Roux also served as chairman of
Seagate Technology. From February 1998 to November 1998, he
served as the chief executive officer and president of Liberate
Technologies. From September 1994 until December 1998,
Mr. Roux held various management positions with Oracle
Corporation, most recently as executive vice president of
corporate development. Before joining Oracle, Mr. Roux
served as senior vice president, marketing and business
development at Central Point Software from April 1992 to July
1994. Mr. Roux is a member of the boards of directors of
Gartner, Inc. and VERITAS.

John W.
Thompsonhas served as a member of
our board of directors since February 2001. Mr. Thompson
has served as a director of Seagate Technology since November
2000. Mr. Thompson is chairman of the board of directors
and chief executive officer of Symantec Corporation, which he
joined in April 1999. From 1971 to April 1999, Mr. Thompson
held various executive and management positions with IBM.
Mr. Thompson is a member of the boards of directors of
NiSource Inc. and United Parcel Service, Inc.

-54-



---



##### 



Donald L. Waitehas served as a member of our board of directors since August
1999. Since November 2000, Mr. Waite has served as
executive vice president and chief administrative officer of New
SAC and Seagate Technology. Mr. Waite also serves as
officer and/or director of several subsidiaries and affiliates
of Seagate Technology. From March 1995 to November 2000,
Mr. Waite served as executive vice president and chief
administrative officer of Old Seagate. Mr. Waite also
served as chief financial officer of Old Seagate from October
1983 to February 1998. Mr. Waite joined Old Seagate in
1983. Mr. Waite also serves as a member of the board of
directors of California Micro Devices Corporation.

Board Composition

Our board of directors consists of nine members,
each of whom is currently subject to election at our annual
meeting of stockholders.

Executive officers are elected by the board of
directors on an annual basis and serve until their successors
have been duly elected and qualified. There are no family
relationships among any of our directors or executive officers.

Committees of the Board of Directors

Our board of directors has a nominating and
corporate governance committee, an audit committee and a
compensation committee. Each of our committees will have the
composition and responsibilities described below:

Nominating and Corporate
Governance Committee

Our nominating and corporate governance committee
is comprised of Messrs. Chang, Kerfoot and Roux, each of
whom is a non-management member of our board of directors. The
nominating and corporate governance committee is responsible
for, among other things:



| |   |                                                                                                                                                                                                                                               
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | recommending to our board of directors a slate of
    directors for nominating;                                                                                                                                                               
|
| |  | developing and recommending to our board of
    directors a set of corporate governance principles applicable to
    our company;                                                                                                             
|
| |  | overseeing the process for evaluating our board
    of directors and management;                                                                                                                                                              
|
| |  | evaluating the current composition, organization
    and governance of our board of directors and its committees,
    determining future requirements and making recommendations to
    our board of directors for approval; and              
|
| |  | reviewing and evaluating, at least annually, the
    performance of the nominating and corporate governance committee
    and its members, including the compliance of the nominating and
    corporate governance committee with its charter.

Audit
Committee

Our audit committee is comprised of
Messrs. Anderson, Bailey, Thompson and Waite, each of whom
is a non-management member of our board of directors.
Messrs. Anderson, Bailey and Thompson are independent
directors.

Compensation
Committee

Our compensation committee is comprised of
Messrs. Anderson, Luczo, Roux and Thompson, each of whom is
a nonmanagement member of our board of directors. In accordance
with our compensation committee charter, at least two members of
the compensation committee are outside directors as that term is
defined in Section 162(m) of the Internal Revenue Code of
1986, as amended, and at least two members are nonemployee
directors within the meaning of

-55-



---



##### 



Rule 16b-3 of the rules promulgated under
the Securities Exchange Act of 1934, as amended. The
compensation committee is responsible for, among other things:




| |   |                                                                                                                                                                                                                    
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | reviewing and making recommendations to our board
    of directors relating to the compensation policy for our
    employees, officers, directors and consultants;                                                 
|
| |  | reviewing and making recommendations to our board
    of directors regarding all forms of compensation to be provided
    to our chief executive officer and all equity compensation
    grants to our officers;   
|
| |  | reviewing and making recommendations to our board
    of directors regarding general compensation goals and guidelines
    for our employees and the criteria by which bonuses to our
    employees are determined;
|
| |  | making recommendations to our board of directors
    with respect to amendments to our benefit plans and changes to
    the number of shares reserved for issuance under our benefit
    plans; and                
|
| |  | producing an annual report on executive
    compensation for inclusion in our annual proxy statement.                                                                                                              

Compensation Committee Interlocks and Insider
Participation

Our board of directors established its
compensation committee in November 1999. Prior to establishing
the compensation committee, our board of directors as a whole
performed the functions delegated to the compensation committee.
Mr. Luczo, a member of our board and compensation
committee, is an executive officer of Seagate Technology.
Mr. Luczo is also a former officer of our company.
Mr. Roux, a member of our board and compensation committee,
is a principal of Silver Lake Partners. In addition, we
previously paid New SAC, of which Mr. Roux is a director
and Mr. Luczo is a director and chairman and chief
executive officer, management fees. These fees were discontinued
in December 2002. Seagate Technology, of which Mr. Roux is
a director and Mr. Luczo is a director and chairman and
chief executive officer, provided various administrative
services to us under several service agreements. In addition, we
have licensed Seagate Technology some of our products. See
Our Relationships and Arrangements with New SAC, Seagate
Technology, our Officers and our Directors for more
information about transactions between us and Mr. Luczo and
Mr. Roux.

Item 11.     Executive
Compensation

Summary Compensation Table

The following table sets forth all compensation
awarded, earned or paid for services rendered in all capacities
to us during fiscal 2001, 2002 and 2003, to our chief executive
officer and our four next most highly compensated executive
officers, to whom we refer to collectively as the named
executive officers in this document, each of whose compensation
exceeded

-56-



---



##### 



$100,000 in fiscal 2003. Our former chief
executive officer, Gregory B. Kerfoot, is also included in the
following table.


|                            |                                          |        |      |                     |  |              |         |            |  |            |        |         |     |   |        |        |     |  |           |         | 
|--------------------------- | ---------------------------------------- | ------ | ---- | ------------------- |  | ------------ | ------- | ---------- |  | ---------- | ------ | ------- | --- | - | ------ | ------ | --- |  | --------- | ------- | 
|                            |                                          |        |      |                     |  |              |         |            |  | Long-Term 
|                            |                                          |        |      |                     |  | Compensation
|                            |                                          |        |      | Annual Compensation |  | Awards      
|                            |                                          |        |      |                     |  |             
|                            |                                          |        |      |                     |  | Other Annual |         | Securities
|                            |                                          | Fiscal |      |                     |  | Compensation |         | Underlying
|Name and Principal Position |                                          | Year   |      | Salary($)           |  | Bonus($)(1)  |         | ($)        |  | Options(2)
|                            |                                          |        |      |                     |  |              |         |            |  |           
|Jonathan J. Judge           |                                          |        | 2003 |                     |  | $            | 301,533 |            |  |            |       |         |     | $ | 56,457 | (4)    |     |  | 2,000,000 |        
|                            | President and Chief Executive Officer(3) |        |      | 2002                |  |              |         |           |  |            |        |        |     |   |        |       |     |  |           |        | 
|                            |                                          |        |      | 2001                |  |              |         |           |  |            |        |        |     |   |        |       |     |  |           |        | 
|Gregory B. Kerfoot          |                                          |        | 2003 |                     |  |              | 69,095  |            |  |            |       |         |     |   |       |        |     |  |          |        
|                            | Chairman of the Board(5)                 |        |      | 2002                |  |              |         | 262,500    |  |            | $      | 500,000 |     |   |        |       |     |  |           | 500,000 | 
|                            |                                          |        |      | 2001                |  |              |         | 235,386    |  |            |        | 231,800 | (6) |   |        |       |     |  |           |        | 
|William G. Gibson           |                                          |        | 2003 |                     |  |              | 257,229 |            |  |            | 88,440 |         |     |   |       |        |     |  | 90,000    |        
|                            | Chief Operating Officer(7)               |        |      | 2002                |  |              |         | 245,223    |  |            |        | 97,580  |     |   |        |       |     |  |           | 200,000 | 
|                            |                                          |        |      | 2001                |  |              |         | 218,259    |  |            |        | 120,620 |     |   |        |       |     |  |           | 400,000 | 
|Eric Patel                  |                                          |        | 2003 |                     |  |              | 207,627 |            |  |            | 78,477 |         |     |   | 1,645  |        |     |  | 56,250    |        
|                            | Chief Financial Officer(8)               |        |      | 2002                |  |              |         | 189,172    |  |            |        | 97,853  |     |   |        | 2,017  |     |  |           | 100,000 | 
|                            |                                          |        |      | 2001                |  |              |         | 188,024    |  |            |        | 102,976 |     |   |        | 82,690 | (9) |  |           | 100,000 | 
|Anthony L. Wind             |                                          |        | 2003 |                     |  |              | 199,092 |            |  |            | 48,128 |         |     |   | 1,655  |        |     |  | 56,250    |        
|                            | Chief Technology Officer(10)             |        |      | 2002                |  |              |         | 180,467    |  |            |        | 52,548  |     |   |        | 1,592  |     |  |           | 57,000  | 
|                            |                                          |        |      | 2001                |  |              |         | 167,001    |  |            |        | 55,050  |     |   |        | 1,670  |     |  |           | 50,000  | 
|Andrew L. Handford          |                                          |        | 2003 |                     |  |              | 174,301 |            |  |            | 43,441 |         |     |   | 1,666  |        |     |  | 100,000   |        
|                            | Vice President of Products and Research  |        |      | 2002                |  |              |         | 131,900    |  |            |        | 49,013  |     |   |        | 1,592  |     |  |           | 28,125  | 
|                            | and Development(11)                      |        |      | 2001                |  |              |         | 115,787    |  |            |        | 22,144  |     |   |        | 1,617  |     |  |           | 27,000  | 



---



| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (1) | Does not include annual bonus to Jonathan J.
    Judge and fourth quarter bonuses for the other executives.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|
| | (2) | The stock options listed in the table represent
    options to purchase our common stock. See Option Grants in
    Fiscal 2003 for additional information regarding options
    to purchase our stock granted during fiscal 2003.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|
| | (3) | Mr. Judge became our president and chief
    executive officer in October 2002 and is paid an annual base
    salary of $400,000 with a maximum bonus payout of $800,000.
    Mr. Judges compensation for fiscal 2003 included
    amounts since joining us in October 2002. Mr. Judges
    compensation includes amounts contributed by Mr. Judge to
    the group registered retirement savings plan in the amount of
    $3,387 for fiscal 2003. Included in Mr. Judges Other
    Annual Compensation is the employer match made by us under the
    group registered retirement savings plan, which was $1,693. See
    Employment Contracts, Change-of-Control Arrangements and
    Separation Agreements for additional information regarding
    Mr. Judges agreement.
|
| | (4) | Includes $46,795 of cost of living allowances
    paid to Mr. Judge under his agreement. See Employment
    Contracts, Change-of-Control Arrangements and Separation
    Agreements for additional information regarding
    Mr. Judges agreement.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|
| | (5) | Mr. Kerfoot was our chief executive officer
    from August 2000 to October 2002, our president from August 1999
    to October 2002 and our chief operating officer from August 1999
    to August 2000.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|
| | (6) | Mr. Kerfoot donated his bonus to the Crystal
    Decisions Foundation, a non-profit charitable foundation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|
| | (7) | Mr. Gibsons compensation for fiscal
    2001 included amounts since joining us in September 2000 as our
    chief operating officer.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|
| | (8) | Mr. Patels compensation includes
    amounts contributed by Mr. Patel to the group registered
    retirement savings plan in the amounts of $2,449 for fiscal
    2001, $9,342 for fiscal 2002 and $9,635 for fiscal 2003.
    Included in Other Annual Compensation is the employer match made
    by us under the group registered retirement savings plan, of
    $1,225 for fiscal 2001, $2,017 for fiscal 2002 and $1,645 for
    fiscal 2003.                                                                                                                                                                                                                                                                                                                               
|
| | (9) | Fiscal 2001 Other Annual Compensation included
    approximately $76,900 related to a one-time net tax equalization
    amount that was paid by us on Mr. Patels behalf after
    his repayment of certain advances for Canadian tax liabilities.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 



|     |                                                                                                                                                                                                                                                                                                                                                                                                                                          
|---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(10) | Mr. Winds compensation includes
    amounts contributed by Mr. Wind to the group registered
    retirement savings plan in the amounts of $3,817 for fiscal
    2001, $3,640 fiscal 2002 and $3,780 for fiscal 2003. Included in
    Other Annual Compensation is the employer match made by us under
    the group registered retirement savings plan of $1,670 for
    fiscal 2001, $1,592 for fiscal 2002 and $1,655 for fiscal 2003.

-57-



---



##### 





|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(11) | Mr. Handfords compensation includes
    amounts contributed by Mr. Handford to the group registered
    retirement savings plan in the amounts of $3,367 for fiscal
    2001, $3,210 for fiscal 2002 and $3,358 for fiscal 2003.
    Included in Other Annual Compensation is the employer match made
    by us under the group registered retirement savings plan, of
    $1,617 for fiscal 2001, $1,592 for fiscal 2002 and $1,666 for
    fiscal 2003.

All named executive officers are employed in
Canada and paid in Canadian dollars. The amounts shown in the
above table are expressed in U.S. dollars converted from
Canadian dollars using the weighted average annual exchange rate
for the relevant fiscal year.

Option Grants in Fiscal 2003

The following table sets forth certain
information concerning grants of stock options to each of our
named executive officers during fiscal 2003. All stock options
to the named executive officers were granted at the fair market
value of our common stock at November 19, 2002, which was
$5.50 per share.

|                   |  |            |           |            |  |             |        |            |  |                            |      |     |  |  |          |  |  |   |           |  |  |   |            | 
|------------------ |  | ---------- | --------- | ---------- |  | ----------- | ------ | ---------- |  | -------------------------- | ---- | --- |  |  | -------- |  |  | - | --------- |  |  | - | ---------- | 
|                   |  |            |           |            |  |             |        |            |  |                           
|                   |  |            |           |            |  |             |        |            |  | Potential Realizable Value
|                   |  |            |           | % of Total |  |             |        |            |  | at Assumed Annual         
|                   |  | Number of  |           | Options    |  |             |        |            |  | Rates of Stock            
|                   |  | Securities |           | Granted to |  |             |        |            |  | Price Appreciation        
|                   |  | Underlying |           | Employees  |  | Exercise or |        |            |  | for Option Term           
|                   |  | Options    |           | in Fiscal  |  | Base Price  |        | Expiration |  |                           
|Name               |  | Granted    |           | Year       |  | Per Share   |        | Date       |  | 5%                         |      | 10%
|                   |  |            |           |            |  |             |        |            |  |                            |      |    
|Jonathan J. Judge  |  |            | 2,000,000 |            |  |             | 35.62, | %          |  | $                          | 5.50 |     |  |  | 11/19/12 |  |  | $ | 6,917,841 |  |  | $ | 17,531,167 | 
|Gregory B. Kerfoot |  |            |          |            |  |             |       |            |  |                            |     |     |  |  |         |  |  |   |          |  |  |   |           | 
|William G. Gibson  |  |            | 90,000    |            |  |             | 1.60   | %          |  |                            | 5.50 |     |  |  | 11/19/12 |  |  |   | 311,303   |  |  |   | 788,903    | 
|Eric Patel         |  |            | 56,250    |            |  |             | 1.00   | %          |  |                            | 5.50 |     |  |  | 11/19/12 |  |  |   | 194,564   |  |  |   | 493,064    | 
|Anthony L. Wind    |  |            | 56,250    |            |  |             | 1.00   | %          |  |                            | 5.50 |     |  |  | 11/19/12 |  |  |   | 194,564   |  |  |   | 493,064    | 
|Andrew L. Handford |  |            | 100,000   |            |  |             | 1.78   | %          |  |                            | 5.50 |     |  |  | 11/19/12 |  |  |   | 345,892   |  |  |   | 876,558    | 

All stock options granted to named executive
officers in fiscal 2003 vest as to 25% of the shares subject to
the option on the first anniversary of the vesting commencement
date and as to 1/48th per month thereafter. Under our 1999 stock
option plan, our board retains discretion to modify the terms of
outstanding options. The percentage of total options granted was
based on aggregate grants of options to purchase
5,614,225 shares of common stock to our employees,
non-employee directors and named executive officers in fiscal
2003.

The foregoing options were granted to our named
executive officers at an exercise price equal to the fair market
value of our common stock on the grant date, as determined by
the compensation committee of our board of directors. Because
there is no public market for our stock, the compensation
committee determined the fair market value of our common stock
by considering a number of factors, including, but not limited
to, contemporaneous valuations, our current financial
performance and prospects for future growth and profitability,
the status of product releases and product integration, the
absence of a resale market for our common stock, the control
position held by New SAC and comparisons of certain of our key
metrics with similar metrics for comparable publicly traded
companies, including measures of market capitalization based on
revenue multiples, price-to-earnings ratios and operating
margins.

The table sets forth the hypothetical gains or
option spreads that would exist for the options at the end of
their respective 10-year terms based on assumed annualized rates
of compound stock price appreciation of 5% and 10% from the
dates the options were granted until the expiration of the
10-year option term. The disclosure of 5% and 10% assumed rates
is required by the rules of the Securities and Exchange
Commission and does not represent our estimate or projection of
future common stock prices or stock price growth.

-58-



---



##### 



Aggregated Option Exercises in Last Fiscal
Year and Fiscal Year End Option Values

The following table sets forth certain
information regarding the exercise of stock options in fiscal
2003 by the named executive officers and the value of options
held by these individuals at June 27, 2003.

|                   |  |             |   |          |  |                          |   |                          |  |             |           |               |  |  |           |  |  |   |            |  |  |   |           | 
|------------------ |  | ----------- | - | -------- |  | ------------------------ | - | ------------------------ |  | ----------- | --------- | ------------- |  |  | --------- |  |  | - | ---------- |  |  | - | --------- | 
|                   |  |             |   |          |  |                          |   |                         
|                   |  |             |   |          |  | Number of Securities     |   | Value of Unexercised in-
|                   |  | Number of   |   |          |  | Underlying Unexercised   |   | the-Money Options at    
|                   |  | Shares      |   |          |  | Options at June 27, 2003 |   | June 27, 2003           
|                   |  | Acquired on |   | Value    |  |                          |   |                         
|Name               |  | Exercise    |   | Received |  | Exercisable              |   | Unexercisable            |  | Exercisable |           | Unexercisable
|                   |  |             |   |          |  |                          |   |                          |  |             |           |              
|Jonathan J. Judge  |  |             |  |          |  |                          |  |                          |  |             |          |               |  |  | 2,000,000 |  |  | $ |           |  |  | $ | 5,000,000 | 
|Gregory B. Kerfoot |  |             |  |          |  |                          |  |                          |  |             | 2,758,332 |               |  |  | 541,668   |  |  |   | 10,981,245 |  |  |   | 2,093,755 | 
|William G. Gibson  |  |             |  |          |  |                          |  |                          |  |             | 358,332   |               |  |  | 331,668   |  |  |   | 1,412,495  |  |  |   | 1,162,505 | 
|Eric Patel         |  |             |  |          |  |                          |  |                          |  |             | 332,289   |               |  |  | 173,961   |  |  |   | 1,318,740  |  |  |   | 596,886   | 
|Anthony L. Wind    |  |             |  |          |  |                          |  |                          |  |             | 286,249   |               |  |  | 127,001   |  |  |   | 1,139,059  |  |  |   | 415,317   | 
|Andrew L. Handford |  |             |  |          |  |                          |  |                          |  |             | 121,384   |               |  |  | 133,741   |  |  |   | 482,607    |  |  |   | 380,862   | 

The value received is calculated as the market
value of our common stock at the exercise date minus the
exercise price. The value of unexercised in-the-money options is
deemed to be the fair market value of our common stock at fiscal
year end minus the exercise price. The fair market value of our
common stock on June 27, 2003, as determined by the
compensation committee of our board of directors, was $8.00 per
share.

The foregoing options were granted to our named
executive officers at an exercise price equal to the fair market
value of our common stock on the grant date, as determined by
the compensation committee of our board of directors. Because
there is no public market for our stock, the compensation
committee determined the fair market value of our common stock
by considering a number of factors, including, but not limited
to, contemporaneous valuations, our current financial
performance and prospects for future growth and profitability,
the status of product releases and product integration, the
absence of a resale market for our common stock, the control
position held by New SAC and comparisons of certain of our key
metrics with similar metrics for comparable publicly traded
companies, including measures of market capitalization based on
revenue multiples, price-to-earnings ratios and operating
margins.

Director Compensation

Beginning in June 2003, we began paying our
directors cash compensation of $25,000 per year for their
service as members of our board of directors. We began also
paying the chairperson of our audit committee an additional
$10,000 per year and the other members of that committee an
additional $5,000 per year. We reimburse our directors for
reasonable travel expenses in connection with attendance at
board and committee meetings. Prior to June 2003, we did not pay
any cash compensation to our directors, except for reimbursement
for reasonable travel expenses in connection with attendance at
board and committee meetings.

Under our 1999 stock option plan, nonemployee
directors are eligible to receive stock option grants at the
discretion of the board of directors. In May 2003, we granted
each of Messrs. Anderson, Chang, Luczo, Roux, Thompson and Waite
an option to acquire 20,000 shares of our common stock at
$8.00 per share. In May 2003, we granted Mr. Bailey an
option to purchase 50,000 shares of our common stock at
$8.00 per share. In August 2002, we granted
Mr. Anderson an option to purchase 50,000 shares of
our common stock at $5.50 per share. In May 2001, we
granted each of Messrs. Chang, Roux and Thompson an option
to purchase 50,000 shares of our common stock at $4.00 per
share. In November 1999, we granted Mr. Luczo an option to
purchase 275,000 shares and granted Mr. Waite an
option to purchase 50,000 shares of our common stock at an
exercise price of $4.00 per share. Each of the grants vest as to
25% of the shares at the first anniversary of grant and as to
1/48th of the shares monthly thereafter.

-59-



---



##### 



Employment Contracts, Change-of-Control
Arrangements and Separation Agreements

In September 2002, we entered into an agreement
with Mr. Judge in connection with Mr. Judges
employment as our president and chief executive officer. We
agreed to pay Mr. Judge a base salary of $400,000 with
additional performance-based bonus compensation of up to a
maximum of $800,000 per year. Mr. Judge also received an
option grant of 2,000,000 shares at a per share exercise
price of $5.50 in November 2002. Mr. Judges initial
option vests as to 25% of the shares on the first anniversary of
his employment with us and as to 1/48th of the total number of
shares monthly thereafter. In addition, we agreed to recommend
to our board of directors that the board grant Mr. Judge an
option to purchase 250,000 shares of our stock upon
successful completion of an initial public offering, as well as
an option to purchase an additional 250,000 shares of stock
upon completion of four successive quarters of attaining 100% of
our revenues and profitability targets after completion of an
initial public offering. These additional options will be
granted at a fair market value to be determined by the board of
directors on the date of grant and will be subject to four-year
vesting from the date of grant.

Mr. Judge also is entitled to health
benefits as well as reimbursement for reasonable premium costs
for a $1 million term life insurance policy, up to a
maximum annual premium of $20,000. We agreed to provide
Mr. Judge with coverage for typical relocation expenses,
reasonable attorneys fees in connection with the
negotiation of his letter agreement and reasonable annual tax
and financial planning expenses.

We have agreed to pay Mr. Judge a severance
payment of $400,000 upon termination of his employment for any
reason after five years as our employee. We have also agreed to
assist Mr. Judge in establishing a Canadian immigrant
trust. Mr. Judge agreed to place his Georgia residence in
the trust during his employment with us for up to one day less
than five years. In return, we agreed to pay or reimburse
Mr. Judge for any Canadian departure taxes arising from his
residence relating to the employment period of up to one day
less than five years. If Mr. Judge is employed by us for at
least five years, we have agreed to pay or reimburse him for any
Canadian departure taxes related to his residence whenever the
departure tax liability may arise, including following
termination of his employment for any reason. However, if we
terminate his employment without cause prior to his five-year
employment anniversary, we will not be obligated to cover his
Canadian departure taxes related to his residence. We refer to
these payments as the residence tax payments.

In the event that we terminate Mr. Judge for
any reason other than cause or if he resigns as a result of
involuntary termination on or before his one-year anniversary of
employment with us, we have agreed to pay Mr. Judge, in
lieu of any other severance other than the severance payment or
the residence tax payments, if due, 1.5 times his base
salary and target bonus for the year and to cover his COBRA
premiums for the full period provided by law or provide up to
$2,500 per month for the same period in reimbursement for
healthcare premiums if COBRA is not available. In the event that
this termination occurs after his one-year anniversary of his
employment with us, we have agreed to pay him the sum of his
base salary and target bonus for the year in addition to the
coverage for the COBRA premiums discussed above. In the event
that we terminate Mr. Judge for cause or if he voluntarily
resigns other than pursuant to involuntary termination, we may
elect, in our sole discretion, to provide him with the benefits
described in this paragraph so that he will be subject to a
non-compete agreement and so that he will sign a release of all
claims against us, our directors and our employees.

In the event of a change of control, we have
agreed to provide Mr. Judge with immediate vesting of 50%
of his then unvested shares with respect to his initial option
grant of 2,000,000 shares and his pending grant of
250,000 options to be granted upon the successful
completion of an initial public offering, as well as one
additional year of vesting on any of his other options. In the
event that he resigns within three months following a
change of control in

-60-



---



##### 



which he is not made the chief executive officer
of the surviving entity, we have agreed to pay Mr. Judge,
in lieu of any other severance other than the accelerated
vesting described above and the severance and residence tax
payments, if due, and a lump sum cash payment equal to two times
the sum of his base salary and target bonus. In the event of an
involuntary termination or termination by us without cause
within 12 months following a change of control, we have
agreed to pay Mr. Judge, in lieu of any other severance
other than the accelerated vesting and the severance and
residence tax payments, if due, a lump sum cash payment equal to
two times the sum of his base salary and target bonus for the
year, as well as providing full acceleration of his initial
option grant of 2,000,000 shares and his pending grant of
250,000 shares and acceleration of one year of vesting for
all of his other options, if any.


In July 2000, we entered into an agreement with
Mr. Gibson in connection with Mr. Gibsons
employment as our chief operating officer. We agreed that if we
terminated Mr. Gibsons employment without just cause
for which we have agreed to provide him written notice, we would
pay him his then current base salary for one year, an amount
equal to his bonus for the calendar year immediately preceding
his termination and an allowance of 10% of his annual base
salary in lieu of all other benefits. We would be required to
pay these amounts to Mr. Gibson monthly over a one year
period.

Other than our agreements with Messrs. Judge
and Gibson, we currently do not have change-of-control or
separation agreements with any of the named executive officers
nor do we have any employment agreements that require our named
executive officers to provide services to us for any specific
term.

Incentive Plans



| |                       
| | ----------------------
| | 1999 Stock Option Plan

Our board of directors adopted our 1999 stock
option plan in August 1999 and reserved 22,500,000 shares
of common stock for issuance under the 1999 plan. The 1999 plan
was approved by our stockholders in August 1999.

The 1999 plan provides for grants of incentive
stock options to employees, including officers and employee
directors and nonstatutory stock options to employees,
consultants and nonemployee directors of our company, our parent
and our respective subsidiaries. The purposes of our 1999 plan
are to attract and retain the best available personnel for
positions of substantial responsibility, to provide additional
incentive to our employees and consultants to perform future
services and to promote the success of our business. At the
direction of the board of directors, the compensation committee
administers our 1999 plan and determines, among other things,
the optionees and the terms of options granted, including the
exercise price, number of shares subject to the option and the
exercisability thereof.

The term of the options granted under the 1999
plan is set forth in the option agreement. The term of an option
may not exceed 10 years and, in the case of an incentive stock
option granted to an optionee who owns more than 10% of the
voting power of all the classes of stock of our company, parent
or subsidiaries at the time of grant, the term of an option may
not exceed five years. The exercise price for options granted
under the 1999 plan is determined in the option agreement.
However, in the case of options granted to an employee who owns
stock representing more than 10% of the voting power of all
classes of voting stock of our company, parent or subsidiaries,
the exercise price may be no less than 110% of the fair market
value of a share of our common stock at the time of the grant.
For all other employees, the exercise price may not be less than
fair market value of our common stock for an incentive stock
option and may not be less than 85% of the fair market value for
a nonstatutory stock option. Generally, options granted under
the 1999 plan vest as to 25% of the shares subject to the option
on the first anniversary of the vesting commencement date and as
to 1/48th per month thereafter of the shares subject to the
option.

-61-



---



##### 



No incentive stock options may be granted to an
optionee, which, when combined with all other incentive stock
options becoming exercisable in any calendar year that are held
by that person, would have an aggregate fair market value in
excess of $100,000. In any fiscal year, we may not grant any
employee options to purchase more than 5,000,000 shares.
However, in connection with his or her initial employment, an
employee may be granted options to purchase up to an additional
3,000,000 shares that will not count against the
5,000,000 share limit.

In the event of a merger of our company or a sale
of substantially all of our assets, any option which is not
assumed or substituted by a successor will fully vest and then
terminate after 15 days from the completion date of the
notice sent to the optionee informing the optionee of such
vesting acceleration.

The 1999 plan will terminate in August 2009,
unless our board of directors terminates it sooner. Other than
options held by nonemployee members of our board of directors or
outstanding under the United Kingdom sub-plan of the 1999 plan,
at the effective time of the proposed acquisition options then
outstanding under the 1999 plan will become options to acquire
Business Objects ADSs pursuant to an exchange ratio and
adjustment to the per share exercise price determined at the
effective time. Options held by nonemployee members of our board
of directors or granted under the United Kingdom sub-plan will
become fully exercisable prior to our proposed acquisition by
Business Objects. Any of those options not exercised prior to
the effective time of the proposed acquisition will terminate
and will no longer be exercisable or represent the right to
purchase Business Objects ADSs.

As of June 27, 2003, we had issued
1,090,581 shares of common stock upon the exercise of
options under the 1999 plan. In addition, there were
17,725,377 options to purchase shares of our common stock
outstanding and 3,684,042 shares available for grant under
the 1999 plan as of June 27, 2003.



| |                       
| | ----------------------
| | 2000 Stock Option Plan

Our board of directors adopted our
2000 stock option plan in June 2000 and reserved
200,000 shares of common stock for issuance under the
2000 plan. Our stockholders approved the 2000 plan in
June 2000.

The 2000 plan provides for grants of
incentive stock options to employees, including officers and
employee directors, of our company, parent or subsidiaries and
nonstatutory stock options to employees, consultants and
non-employee directors of our company, our parent and our
respective subsidiaries. The purposes of our 2000 plan are
to attract and retain the best available personnel for positions
of substantial responsibility, to provide additional incentive
to our employees, consultants and non-employee directors and to
promote the success of our business. At the request of the board
of directors, the compensation committee administers our
2000 plan and determines, among other things, the optionees
and the terms of options granted, including the exercise price,
number of shares subject to the option and the exercisability
thereof.

The term of the options granted under the
2000 plan is set forth in the option agreement. The term of
an option may not exceed 10 years and, in the case of an
incentive stock option granted to an optionee who owns more than
10% of the voting power of all of the classes of stock of our
company, parents or subsidiaries at the time of grant, the term
of an option may not exceed five years. The exercise price for
options granted under the 2000 plan is determined in the
option agreement. However, in the case of options granted to an
employee who owns stock representing more than 10% of the voting
power of all classes of voting stock of our company, parent or
subsidiaries, the exercise price may be no less than 110% of the
fair market value of a share of our common stock at the time of
the grant. For all other employees, the exercise price may not
be less than fair market value of our common stock for an
incentive stock option and may not be less than 85% of the fair
market value for a nonstatutory stock option. Under the terms of
the stock option agreements under which the outstanding stock
options were granted,

-62-



---



##### 



the options were granted at fair market value and
become fully vested and exercisable immediately prior to a
merger or sale of substantially all of our assets, or on the
date upon which a registration statement related to an initial
public offering is declared effective by the Securities and
Exchange Commission. We expect to record a non-cash dividend
upon vesting of these options at some time prior to the proposed
acquisition, as all of the options under this plan have been
granted to employees of our parent or a company under common
control.


The 2000 plan will terminate in June 2010,
unless our board of directors terminates it sooner. Prior to our
proposed acquisition by Business Objects, options outstanding
under the 2000 plan will become fully exercisable. Any options
not exercised at the effective time of the proposed acquisition
will terminate and will no longer be exercisable or represent
the right to receive an option to purchase Business Objects ADSs.

As of June 27, 2003, we had granted options
to purchase 161,450 shares of our common stock under the
2000 plan of which 103,450 options were outstanding;
however, no shares have been issued upon the exercise of options
under the 2000 plan. As of June 27, 2003,
96,550 shares remained available for grant under the
2000 plan.



| |                       
| | ----------------------
| | 2002 Stock Option Plan

Our board of directors adopted our
2002 stock option plan in May 2002 and amended it in May
2003. A total of 5,000,000 shares of common stock have been
reserved for issuance under our 2002 plan, together with an
annual increase in the number of shares of common stock reserved
under the plan beginning on the first day of our fiscal year,
commencing July 3, 2004, in an amount equal to the lesser
of:



| |   |                                                                                                
| | - | -----------------------------------------------------------------------------------------------
| |  | 7,500,000 shares of common stock;                                                              
|
| |  | 5.0% of our outstanding shares of common stock on
    the last day of the prior fiscal year; or
|
| |  | an amount determined by our board of directors.                                                

The 2002 plan provides for grants of
incentive stock options to our employees including officers and
employee directors of our company, parent or subsidiaries and
nonstatutory stock options to employees, consultants and
nonemployee directors. The purposes of our 2002 plan are to
attract and retain the best available personnel, to provide
additional incentive to our employees, consultants and
nonemployee directors and to promote the success of our
business. At the request of the board of directors, the
compensation committee administers our 2002 plan and
determines, among other things, the optionees and the terms of
options granted, including the exercise price, number of shares
subject to the option and the exercisability thereof.

The term of the options granted under the
2002 plan is set forth in the option agreement. However,
the term of an incentive stock option may not exceed
10 years and, in the case of an option granted to an
optionee who owns more than 10% of the total combined voting
power of all classes of stock of our company, parent or
subsidiaries at the time of grant, the term of an option may not
exceed five years. Options granted under the 2002 plan vest and
become exercisable as set forth in each option agreement.

With respect to any optionee who owns more than
10% of the total combined voting power of all classes of stock
of our company, parent or subsidiaries, the exercise price of
any stock option granted must be at least 110% of the fair
market value of our common stock on the grant date. For all
other employees, the exercise price may not be less than fair
market value. However, for all employees, options may be granted
with an exercise price of less than fair market value on the
date of grant pursuant to a merger or other corporate
transaction.

No incentive stock options may be granted to an
optionee, which, when combined with all other incentive stock
options becoming exercisable in any calendar year that are held
by that person, would have an aggregate fair market value in
excess of $100,000. In any fiscal year, we

-63-



---



##### 



may not grant any employee options to purchase
more than 1,000,000 shares or 4,000,000 shares in the
case of an employees initial employment.


In the event of a merger of our company or a sale
of substantially all of the assets of our company, any option
that is not assumed or substituted by a successor will fully
vest and will terminate upon completion of the transaction.

The 2002 stock option plan will terminate in May
2013, unless our board of directors terminates it sooner.

As of June 27, 2003, we had not granted any
options nor issued any shares of common stock upon the exercise
of options granted under our 2002 plan and 5,000,000 shares
remain available for grant under our 2002 plan.

The 2002 Stock Option Plan will become
effective only upon the effective date of a registration
statement of a firm commitment underwritten initial public
offering. Assuming the proposed acquisition of Crystal Decisions
by Business Objects is completed, it is currently expected that
the 2002 Stock Option Plan will not become effective.

2002 Director Option
Plan

Our board of directors adopted our 2002 director
option plan in May 2002 and amended it in May 2003. We have
reserved a total of 250,000 shares of common stock for
issuance under the 2002 director option plan, together with an
annual increase in the number of shares of common stock reserved
under the plan beginning on the first day of our fiscal year
commencing July 3, 2004 equal to the lesser of:



| |   |                                                                                                    
| | - | ---------------------------------------------------------------------------------------------------
| |  | 300,000 shares of common stock;                                                                    
|
| |  | 0.2% of the outstanding shares of our common
    stock on the last day of the prior fiscal year; or
|
| |  | an amount determined by the board of directors.                                                    

The option grants under the 2002 director option
plan are automatic and nondiscretionary, and the exercise price
of the options is 100% of the fair market value of our common
stock on the grant date.

Only nonemployee directors are eligible for
grants under our 2002 director option plan. The 2002 director
option plan provides for an initial grant to a new nonemployee
director of an option to purchase 50,000 shares of common
stock. Subsequent to the initial grants, each nonemployee
director will be automatically granted an option to purchase
20,000 shares of common stock on the first meeting of our
board of directors after our annual meeting of stockholders. So
long as that director has been a member of our board of
directors for six months or more at the time of our annual
meeting.

The term of the options granted under the 2002
director option plan is 10 years, but the options expire
three months following the termination of the optionees
status as a director or 12 months if the termination is due
to death or disability. The grants will become exercisable at a
rate of 25% of the shares subject to the grant after the first
anniversary of the date of grant and 1/48th of such shares per
month commencing thereafter.

In the event of a merger of the company or a sale
of substantially all of the assets of the company, any option
which is not assumed or substituted will fully vest and will
terminate upon completion of the transaction.

The 2002 director option plan will terminate in
May 2013, unless our board of directors terminates it sooner.

-64-



---



##### 



As of June 27, 2003, we had not granted any
options nor issued any shares of common stock upon the exercise
of options under our 2002 director option plan and
250,000 shares remain available for grant under our 2002
director option plan.

The 2002 Director Option Plan will become
effective only upon the effective date of a registration
statement of a firm commitment underwritten initial public
offering. Assuming the proposed acquisition of Crystal Decisions
by Business Objects is completed, it is currently expected that
the 2002 Director Option Plan will not become
effective.

Registered Retirement
Savings Plan

Our regular full- and part-time employees in
Canada are entitled to participate in a group registered
retirement savings plan that we sponsor. This plan is
established by contractual arrangement between participating
employees and the Royal Bank of Canada, who operates the plan.
The plan is registered under Section 146 of the Income Tax
Act (Canada) and provides that employees may contribute, on a
pre-tax basis, funds for investment on their behalf by Royal
Bank of Canada. We contribute, on behalf of each participating
employee, fifty cents for every dollar that the employee
contributes to his or her plan account, up to an annual maximum
of Canadian $2,500 or 6% of the employees annual salary,
whichever is less. Employee participation in the plan is
voluntary. We made matching contributions to the plan of an
aggregate of Canadian $1.3 million in fiscal 2001, Canadian
$1.5 million in fiscal 2002 and Canadian $1.7 million
in fiscal 2003.

401(k) Plan

Our employees in the United States are eligible
to participate in the Seagate Technology 401(k) plan, if
they have attained the age of 21 and have completed one month of
service with us. The Seagate Technology 401(k) plan
excludes from participation employees of affiliated employers,
employees subject to collective bargaining agreements and
nonresident alien employees. The Seagate Technology
401(k) plan is intended to qualify under
Sections 401(a), 401(m) and 401(k) of the Internal Revenue
Code of 1986, as amended, and the Seagate Technology
401(k) plan trust is intended to qualify under
Section 501(a) of the Internal Revenue Code. All
contributions to the Seagate Technology 401(k) plan by
eligible employees, and the investment earnings thereon, are not
taxable to these employees until withdrawn and are 100% vested
immediately. Our eligible employees may elect to reduce their
current compensation up to the maximum statutorily prescribed
annual limit, and to have these salary reductions contributed on
their behalf to the Seagate Technology 401(k) plan. In
connection with the proposed acquisition, our employees who
participated in Seagate Technologys 401(k) plan will
be provided the opportunity to roll their Seagate Technology
401(k) plan interests into the Business Objects 401(k) plan, to
the extent that the rollover is available under the terms of the
Business Objects 401(k) plan and applicable law. After the
closing of the proposed acquisition our employees will no longer
be eligible to make new contributions to Seagate
Technologys 401(k) plan but generally may maintain their
existing balances in the Seagate Technology 401(k) plan if they
so choose. We made matching contributions to the Seagate
Technology 401(k) plan of an aggregate of $295,000 in
fiscal 2001, $367,000 in fiscal 2002 and $426,000 in fiscal 2003.



| |                                                         
| | --------------------------------------------------------
| | Limitations on Liability and Indemnification
    Matters

We have adopted provisions in our certificate of
incorporation that limit the liability of our directors and
executive officers for monetary damages for breach of their
fiduciary duties to the maximum extent permitted by Delaware
law. Under Delaware law, a certificate of incorporation

-65-



---



##### 



may provide that directors of a corporation will
not be personally liable for monetary damages for breach of
their fiduciary duties as directors except liability for:




| |   |                                                                                                                                                           
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | any breach of their duty of loyalty to our
    company or our stockholders;                                                                               
|
| |  | acts or omissions not in good faith or which
    involve intentional misconduct or a knowing violation of law;                                            
|
| |  | unlawful payments of dividends or unlawful stock
    repurchases or redemptions as provided in Section 174 of
    the Delaware General Corporation Law; or
|
| |  | any transaction from which the director derived
    an improper personal benefit.                                                                         

The limits on a director or officers
liability in our certificate of incorporation do not apply to
liabilities arising under the federal securities laws and will
not affect the availability of equitable remedies such as
injunctive relief or rescission.

Our certificate of incorporation, together with
our bylaws, provide that we must indemnify our directors and
officers and may indemnify our other employees and agents to the
fullest extent permitted by law. Our bylaws also permit us to
secure insurance on behalf of any officer, director, employee or
other agent for any liability arising out of his or her actions
in that capacity, regardless of whether our bylaws would
otherwise permit indemnification. We believe that the
indemnification provisions of our certificate of incorporation
and bylaws are necessary to attract and retain qualified persons
as directors and officers. We also maintain directors and
officers liability insurance.

We have entered and expect to continue to enter
into agreements to indemnify our directors, executive officers
and other employees as determined by the board of directors.
These agreements provide for indemnification for related
expenses including attorneys fees, judgments, fines and
settlement amounts incurred by any of these individuals in any
action or proceeding. We believe that these provisions and
agreements are necessary to attract and retain qualified persons
as our directors and executive officers. Messrs. Luczo,
Roux, Thompson and Waite have entered into indemnification
agreements with New SAC. In addition, Mr. Roux, one of our
directors, has entered into an indemnification agreement with an
affiliate of Silver Lake Partners. An affiliate of Silver Lake
Partners also maintains directors and officers
liability insurance that covers Mr. Rouxs membership
on our board.

At present we are not aware of any pending
litigation or proceeding involving any director, officer,
employee or agent of our company in such persons capacity
with our company where indemnification will be required or
permitted. We are also not aware of any threatened litigation or
proceeding that might result in a claim for indemnification.

Item 12.     Security
Ownership of Certain Beneficial Owners and Management

The following table sets forth information known
to us with respect to the beneficial ownership of our common
stock as of June 27, 2003 by the following:



| |   |                                                                                       
| | - | --------------------------------------------------------------------------------------
| |  | each stockholder known by us to own beneficially
    more than 5% of our common stock;
|
| |  | each of our named executive officers;                                                 
|
| |  | each of our directors; and                                                            
|
| |  | all directors and named executive officers as a
    group.                            

Except as otherwise noted below, the address of
the beneficial owners is c/o Crystal Decisions, Inc.,
895 Emerson Street, Palo Alto, California 94301.

We have determined beneficial ownership in
accordance with the rules of the Securities and Exchange
Commission. Except as otherwise indicated, we believe that the
beneficial owners of

-66-



---



##### 



the common stock listed below, based on the
information furnished by these owners, have sole voting power
and investment power with respect to these shares, subject to
applicable community property laws. New SAC, affiliates of
Silver Lake Partners, affiliates of Texas Pacific Group and
affiliates of August Capital are parties to a shareholders
agreement and other arrangements that result in these persons
acting as a group with respect to all matters submitted to our
stockholders. We have based our calculation of the percentage of
beneficial ownership of 76,091,581 shares of common stock
outstanding as of June 27, 2003.


In computing the number of shares of common stock
beneficially owned by a person and the percent ownership of that
person, we deemed outstanding shares of common stock subject to
options held by that person that are currently exercisable or
exercisable within 60 days of June 27, 2003. We did
not deem these shares outstanding for purposes of computing the
percent ownership of any other person.

|                                                                     |                                                                                                                                              |                    |            |            |  |  |       |  | 
|-------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------- | ------------------ | ---------- | ---------- |  |  | ----- |  | 
|                                                                     |                                                                                                                                              |                   
|                                                                     |                                                                                                                                              | Shares of         
|                                                                     |                                                                                                                                              | Common Stock      
|                                                                     |                                                                                                                                              | Beneficially Owned
|                                                                     |                                                                                                                                              |                   
|Name and Address of Beneficial Owner                                 |                                                                                                                                              | Number             |            | Percentage
|                                                                     |                                                                                                                                              |                    |            |           
|New SAC(1)                                                           |                                                                                                                                              |                    | 75,001,000 |            |  |  | 98.6% | 
|                                                                     | c/o M&C Corporate Services Limited
    P.O. Box 309GT, Ugland House
    South Church Street
    George Town
    Grand Cayman, Cayman Islands |                    |            |            |  |  |       |  | 
|Affiliates of Silver Lake Partners, L.P.(2)                          |                                                                                                                                              |                    | 75,001,000 |            |  |  | 98.6  | 
|                                                                     | c/o Silver Lake Partners, L.P.
    2725 Sand Hill Road, Suite 150
    Menlo Park, California 94025                                           |                    |            |            |  |  |       |  | 
|TPG SAC Advisors III Corp.(3)                                        |                                                                                                                                              |                    | 75,001,000 |            |  |  | 98.6  | 
|                                                                     | c/o Texas Pacific Group
    301 Commerce Street, Suite 3300
    Fort Worth, Texas 76102                                                      |                    |            |            |  |  |       |  | 
|Affiliates of August Capital III, L.P.(4)                            |                                                                                                                                              |                    | 75,001,000 |            |  |  | 98.6  | 
|                                                                     | c/o August Capital
    2480 Sand Hill Road, Suite 101
    Menlo Park, California 94025                                                       |                    |            |            |  |  |       |  | 
|Named Executive Officers and
    Directors:                          |                                                                                                                                              |                    |            |            |  |  |       | 
|Jonathan J. Judge                                                    |                                                                                                                                              |                    |           |            |  |  | *     | 
|Eric Patel(5)                                                        |                                                                                                                                              |                    | 351,040    |            |  |  | *     | 
|Anthony L. Wind(6)                                                   |                                                                                                                                              |                    | 301,123    |            |  |  | *     | 
|Andrew L. Handford(7)                                                |                                                                                                                                              |                    | 127,847    |            |  |  | *     | 
|William G. Gibson(8)                                                 |                                                                                                                                              |                    | 383,332    |            |  |  | *     | 
|Fred D. Anderson(9)                                                  |                                                                                                                                              |                    | 12,500     |            |  |  | *     | 
|Robert L. Bailey                                                     |                                                                                                                                              |                    |           |            |  |  | *     | 
|Justin T. Chang(10)                                                  |                                                                                                                                              |                    | 75,032,249 |            |  |  | 98.6  | 
|Gregory B. Kerfoot(11)                                               |                                                                                                                                              |                    | 3,104,165  |            |  |  | 3.9   | 
|Stephen J. Luczo(12)                                                 |                                                                                                                                              |                    | 75,271,000 |            |  |  | 98.8  | 
|David J. Roux(13)                                                    |                                                                                                                                              |                    | 75,032,249 |            |  |  | 98.6  | 
|John W. Thompson(14)                                                 |                                                                                                                                              |                    | 31,249     |            |  |  | *     | 
|Donald L. Waite(15)                                                  |                                                                                                                                              |                    | 75,051,000 |            |  |  | 98.6  | 
|All directors and executive officers as a group
    (13 persons)(16) |                                                                                                                                              |                    | 79,667,671 |            |  |  | 99.2  | 



---



| |   |                       
| | - | ----------------------
| | * | Less than one percent.



| |     |                                                                                                                                                                                                                         
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (1) | A wholly owned subsidiary of New SAC acquired
    75,001,000 shares of our outstanding common stock in November
    2000. Messrs. Luczo and Roux, in their capacities as
    directors of New SAC, and Mr. Waite, in his

-67-



---



##### 



| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     | capacity as an officer of New SAC, may be deemed
    to have shared voting or dispositive power over these shares.
    Each of them disclaims this beneficial ownership.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|
| | (2) | Includes 75,001,000 shares of our common
    stock beneficially owned by New SAC, over which affiliates of
    Silver Lake Partners, L.P. may be deemed, as a result of their
    ownership of approximately 31.8% of New SACs total
    outstanding shares, to have shared voting or dispositive power.
    The affiliates of Silver Lake Partners, L.P. are Silver Lake
    Partners Cayman, L.P., Silver Lake Investors Cayman, L.P. and
    Silver Lake Technology Investors Cayman, L.P. The sole general
    partner of each of Silver Lake Partners Cayman, L.P. and Silver
    Lake Investors Cayman, L.P. is Silver Lake Technology Associates
    Cayman, L.P. and the sole general partners of each of Silver
    Lake Technology Associates Cayman, L.P. and Silver Lake
    Technology Investors Cayman, L.P. is Silver Lake (Offshore)
    AIV GP LTD. The shareholders of Silver Lake (Offshore)
    AIV GP LTD are James A. Davidson, Glenn H.
    Hutchins, David J. Roux, Integral Capital Partners SLP LLC,
    Yolande Jun and Karl Schade. Ms. Jun and Mr. Schade
    are employees of an affiliate of Silver Lake Partners, L.P. All
    persons identified above disclaim beneficial ownership of these
    shares.
|
| | (3) | Includes 75,001,000 shares of our common
    stock beneficially owned by New SAC, over which affiliates of
    TPG SAC Advisors III Corp. may be deemed, as a result of
    their ownership of approximately 22.1% of New SACs total
    outstanding shares, to have shared voting or dispositive power.
    TPG SAC Advisors III Corp. is the sole general partner of TPG
    SAC GenPar, L.P., which is the sole general partner of SAC
    Investments, L.P. The shareholders of TPG SAC Advisors III
    Corp. are David Bonderman, James G. Coulter,
    William S. Price, Justin T. Chang and John Marren.
    Each of them, however, disclaims beneficial ownership of these
    shares, except to extent of his pecuniary interest therein.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|
| | (4) | Includes 75,001,000 shares of our common
    stock beneficially owned by New SAC, over which affiliates of
    August Capital III, L.P., may be deemed, as a result of their
    ownership of 11.4% of New SACs outstanding shares, to have
    shared voting or dispositive power. The members of August
    Capital Management III, L.L.C. may be deemed to have shared
    voting or dispositive power over those shares. August Capital
    Management III, L.L.C. is the general partner of August
    Capital III, L.P. The members of August Capital
    Management III, L.L.C. are Andrew S. Rapaport, John
    Johnston, David F. Marquardt and Andrew Anker. Each of
    them, however, disclaims beneficial ownership of these shares,
    except to the extent of his pecuniary interest therein.                                                                                                                                                                                                                                                                                                                                                                                                                             
|
| | (5) | Includes 351,040 shares of common stock that
    may be acquired upon the exercise of stock options exercisable
    within 60 days after June 27, 2003.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|
| | (6) | Includes 301,123 shares of common stock that may
    be acquired upon the exercise of stock options exercisable
    within 60 days after June 27, 2003.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|
| | (7) | Includes 127,847 shares of common stock that
    may be acquired upon the exercise of stock options exercisable
    within 60 days after June 27, 2003.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|
| | (8) | Includes 383,332 shares of common stock that
    may be acquired upon the exercise of stock options exercisable
    within 60 days after June 27, 2003.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|
| | (9) | Includes 12,500 shares of common stock that may
    be acquired upon the exercise of stock options exercisable
    within 60 days after June 27, 2003.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     



|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(10) | Represents 75,001,000 shares of common stock
    beneficially owned by New SAC to which Mr. Chang may be
    deemed, in his capacity as a principal of Texas Pacific Group,
    to have shared voting or dispositive power. Includes 31,249
    shares of common stock that may be acquired upon the exercise of
    stock options exercisable within 60 days after
    June 27, 2003. TPG SAC Advisors III Corp., which
    owns approximately 22.1% of New SACs total outstanding
    shares, is the sole general partner of TPG SAC
    GenPar, L.P., which is the sole general partner of SAC
    Investments, L.P. Mr. Chang is also a shareholder of
    TPG SAC Advisors III Corp., which is the sole general partner of
    TPG SAC GenPar, L.P., which is the sole general partner of SAC
    Investments, L.P., which owns approximately 22.1% of New
    SACs total outstanding shares. Mr. Chang disclaims
    beneficial ownership of these shares, except to the extent of
    his pecuniary interest therein.
|    
|(11) | Includes 2,904,165 shares of common stock
    that may be acquired upon the exercise of stock options
    exercisable within 60 days after June 27, 2003.
    Mr. Kerfoot also owns 170,000 shares of New SAC,
    representing 1.5% of New SACs total outstanding shares.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    
|(12) | At June 27, 2003, we held repurchase rights
    on 12,917 shares. Also, includes 95,000 shares of common
    stock that may be acquired upon the exercise of stock options
    exercisable within 60 days after June 27, 2003.
    Includes 75,001,000 shares of common stock beneficially
    owned by New SAC to which Mr. Luczo may be deemed, in his
    capacity as the chief executive officer and director of New SAC,
    to have shared voting or dispositive power. Mr. Luczo
    disclaims beneficial ownership of these shares, except to the
    extent of his pecuniary interest therein. Mr. Luczo owns
    556,904 shares of New SAC, representing 4.9% of New
    SACs total outstanding shares.                                                                                                                                                                                                                                                                                                            
|    
|(13) | Represents 75,001,000 shares of common stock
    beneficially owned by New SAC to which Mr. Roux may be
    deemed, in his capacity as a director of New SAC, to have shared
    voting or dispositive power. Mr. Roux disclaims beneficial
    ownership of these shares, except to the extent of his pecuniary
    interest therein. Includes 31,249 shares                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

-68-



---



##### 



|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     | of common stock that may be acquired upon the
    exercise of stock options exercisable within 60 days after
    June 27, 2003.                                                                                                                                                                                                                                                                                                                                                                                        
|    
|(14) | Includes 4,166 shares of common stock that may be
    acquired upon the exercise of stock options exercisable within
    60 days after June 27, 2003. Mr. Thompson owns
    13,000 shares of New SAC, representing 0.1% of New
    SACs total outstanding shares.                                                                                                                                                                                                                                                     
|    
|(15) | At June 27, 2003, we held repurchase rights
    on 4,168 shares. Also includes 75,001,000 shares of common stock
    beneficially owned by New SAC to which Mr. Waite may be
    deemed, in his capacity as an officer of New SAC, to have shared
    voting or dispositive power. Mr. Waite disclaims beneficial
    ownership of these shares, except to the extent of his pecuniary
    interest therein. Mr. Waite owns 124,738 shares of New
    SAC, representing 1.1% of New SACs total outstanding
    shares.
|    
|(16) | See notes 2 through 15.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

-69-



---



##### 



Item 13.     Certain
Relationships and Related Transactions

Transactions with Seagate Technology

In December 2000, we signed a software license
agreement with Old Seagate, whose obligations were assigned to
Seagate Technology. Under the terms of the license agreement, we
granted Seagate Technology a non-exclusive, non-transferable,
perpetual license to use certain business intelligence products
and receive related maintenance and support services for one
year. The total value of the license agreement was
$1.6 million. The license agreement was priced at an
approximate 50% discount to our established list price. We
recognized $1.5 million of the revenues from the license
agreement in fiscal 2001 and the remaining $151,000 in fiscal
2002. We also earned consulting revenues of $327,000 in fiscal
2001 and $30,000 in fiscal 2002.

The maintenance and support services related to
the license agreement were renewed for one year during the three
months ended December 28, 2001 and for an additional year
in the three months ended March 28, 2003. Revenues from
maintenance and support services are being recognized ratably
over the term of the contract, which is one year. We recognized
$282,000 in fiscal 2002 and $455,000 in fiscal 2003 in
connection with these maintenance and support services. At
June 27, 2003, there were no amounts in accounts receivable
due from Seagate Technology as a result of the renewal of
maintenance and support services.

Historically, Old Seagate and Seagate Technology,
either directly or indirectly, provided substantial
administrative and financial services to us under a general
services agreement between Seagate Software Holdings and Old
Seagate dated June 28, 1997. During fiscal 2001, the
general services agreement was replaced by the following
agreements between us and Seagate Technology and its affiliates:
a corporate services agreement, a payroll services agreement and
a management services agreement. Under substantially the same
terms as the general services agreement, Seagate Technology and
its affiliates continued to provide various cash management,
taxation, administrative, accounting and similar corporate and
managerial services as requested by us. Seagate Software
Holdings contributed its rights, and we assumed Seagate Software
Holdings obligations under the general services agreement
in connection with the asset contribution in fiscal 2000.
Seagate Technology assumed Old Seagates rights and
obligations under the general services agreement in connection
with the closing of the November 2000 transactions.

For various corporate services performed on our
behalf, Old Seagate and Seagate Technology charged us an
aggregate of $1.2 million in fiscal 2001 and Seagate
Technology charged us an aggregate of $865,000 in fiscal 2002
and an aggregate of $348,000 in fiscal 2003. The amounts we paid
to Old Seagate and Seagate Technology represented a reasonable
estimate of Old Seagate or Seagate Technologys direct and
indirect costs incurred in performing services for us. The cost
allocated to us was intended to be on a basis no less favorable
than what we could obtain from an unaffiliated third party. We
have audit rights with respect to the computation and analysis
of service fees pursuant to the general services agreement and
the agreements that replaced the general services agreement in
fiscal 2001.

In December 2002, we paid a non-recurring
termination fee of $625,000 to Seagate Technology for the
benefit of New SAC related to a previous consulting and advisory
contract.

Additionally, on July 4, 2000, we signed a
revolving loan agreement with Seagate Technology on
substantially the same terms and conditions as the prior
agreement, which was dated July 4, 1998, between Seagate
Software Holdings and Seagate Technology. In connection with the
asset contribution, Seagate Software Holdings rights and
obligations under the 1998 intercompany revolving loan agreement
were contributed to and assumed by us. Under the revolving loan
agreement, Seagate Technology financed some of our working
capital requirements. The revolving loan agreement provided for
maximum borrowings of up to $60.0 million and expired on
July 4, 2001. On July 4, 2001, we renewed this
revolving loan

-70-



---



##### 



agreement with Seagate Technology. The
July 4, 2001 revolving loan agreement provided for maximum
borrowings of up to $15.0 million and expired on
July 4, 2002. We did not renew the revolving loan agreement
and it expired on July 4, 2002.


We had no receivables from Seagate Technology as
of June 28, 2002 or June 27, 2003 under the revolving
loan agreement. Borrowings from Old Seagate and Seagate
Technology were used primarily to fund our operating activities.
During fiscal 2001, there were $4.8 million of net
repayments under the revolving loan agreement. In addition
during fiscal 2001, Seagate Technology repaid $31.0 million
of the loan receivable under the revolving loan agreement.
During fiscal 2002, Seagate Technology made $3.4 million of
net repayments under the revolving loan agreement. There were no
borrowings from Seagate Technology or repayments to Seagate
Technology during fiscal 2003.

We were included in the consolidated federal and
certain combined and consolidated foreign and state income tax
returns of Old Seagate until November 22, 2000. Old Seagate
and Seagate Software Holdings entered into a tax allocation
agreement dated April 4, 1996 pursuant to which we computed
hypothetical tax returns as if we were not joined in
consolidated or combined returns with Old Seagate and assuming
the maximum marginal federal corporate income tax rate.
Generally, we were required to pay Old Seagate the positive
amount of any hypothetical taxes. If the hypothetical tax
returns showed entitlement to refunds, including any refunds
attributable to a carryback, then Old Seagate would pay us the
amount of any refunds. The amounts relating to the tax
allocation agreement were included in the net intercompany
revolving loan balance. The tax allocation agreement terminated
upon the closing of the November 2000 transactions.

We entered into a state tax allocation agreement
with several New SAC affiliates effective as of
November 23, 2000. Under the terms of the state tax
allocation agreement, each entity that is included in any state
unitary and combined return with the other New SAC affiliates
must compute hypothetical tax returns, with certain
modifications, as if the entity were not included in combined
returns with the other New SAC affiliates. Each entity must pay
the positive amount of any such hypothetical taxes. If the
hypothetical tax returns show entitlement to refunds, including
any refunds attributable to carrybacks, then the other New SAC
affiliates will pay the entitled entities the amount of such
refunds within 30 days of the close of the fiscal year in
which the entitled entities otherwise would have been able to
utilize the net operating losses or tax credits on a separate
return filing basis. We have not been included in any state
unitary and combined return with the other New SAC affiliates
since June 30, 2001. As of June 27, 2003, there were
no tax-related receivables due to us from certain New SAC
affiliates.

We occupy two facilities leased by Seagate
Technology for which we pay Seagate Technology fair value rent
and related costs in aggregate of approximately $340,000 per
year. One of the subleases is expected to end in September 2003.

Transactions with VERITAS

VERITAS and a subsidiary of VERITAS Software
Corporation entered into a three-year cross license and original
equipment manufacturer agreement with Crystal Decisions, Corp.,
a wholly owned subsidiary, on May 28, 1999.
Messrs. Luczo and Kerfoot were members of the board of
directors of VERITAS at that time. The cross license agreement
provided for the licensing of certain products between the
parties. We recognized no revenues from VERITAS in fiscal 2001,
fiscal 2002 or fiscal 2003.

On June 21, 2002, the cross license
agreement was terminated and we entered into two software
license and services agreements with VERITAS Software Global
Corporation. Messrs. Luczo and Roux were members of the
board of directors of VERITAS at that time. Under one of the
agreements, VERITAS granted us a perpetual, irrevocable,
non-exclusive, non-transferable worldwide license to use given
products in specified amounts, solely in support of our internal
business operations. The software license agreement provided for
the purchase of

-71-



---



##### 



annual maintenance and support, which was
calculated as a percentage of the actual list price of the
licensed software. In July 2002, we recorded approximately
$622,000 as a prepaid expense related to the annual maintenance
and support contract, which was being expensed ratably in fiscal
2003. In July 2003, the maintenance and support agreement was
renewed for selected products of the software and we recorded
approximately $111,000 as a prepaid expense, which is being
expensed ratably in fiscal 2004. In a separate agreement, we
granted VERITAS a perpetual software license to use given
products in specified amounts and 18 months of maintenance
and support services for no consideration. The fair value of the
license and maintenance and support services was approximately
$126,000. We recognized no revenues under this agreement.


Sale of Seagate Technology

Our majority stockholder is New SAC, an exempted
limited liability company organized under the laws of the Cayman
Islands. New SAC was formed by affiliates of Silver Lake
Partners, Texas Pacific Group, August Capital, J.P. Morgan
Partners LLC, investment partnerships of which the general
partner, managing general partner or investment manager is
affiliated with Goldman, Sachs & Co. and other
investors.

Prior to November 22, 2000, we were a
majority owned subsidiary of Seagate Software Holdings, a
Delaware corporation and wholly owned subsidiary of Old Seagate.

We became an indirect subsidiary of New SAC on
November 22, 2000 when Seagate Software (Cayman) Holdings
acquired 75,001,000 shares, or 99.7% of our common stock
outstanding on that date, under the terms of a stock purchase
agreement with Old Seagate and Seagate Software Holdings. Upon
completion of the transaction, New SAC purchased all of the
operating assets of Old Seagate and its consolidated
subsidiaries for cash and borrowings of $1.84 billion,
including transaction costs of $25 million. This included
Old Seagates rigid disc drive, storage area network,
removable tape storage solutions businesses and operations, our
common stock, and certain cash balances, but excluded the
approximately 128 million shares of VERITAS common stock
then held by Seagate Software Holdings and certain of Old
Seagates equity investments, which were subsequently
transferred to VERITAS through a merger of a wholly owned
subsidiary of VERITAS into Old Seagate.

Messrs. Luczo, Kerfoot and Waite, who are
members of our board of directors, each invested in the equity
component of the financing for the November 2000 transaction
with New SAC and each is a shareholder of New SAC.
Mr. Luczo and Mr. Waite also participated in the
financing of the transaction through the roll-over of a portion
of their outstanding stock and options in Old Seagate to equity
interests in New SAC and deferred compensation in a subsidiary
of New SAC.

In addition, Mr. Luczo and Mr. Waite
entered into employment agreements with Seagate Technology (US)
Holdings, Inc. Each employment agreement has a three-year term,
subject to automatic successive one-year renewals thereafter.
Under the employment agreements, Mr. Luczo was appointed
and serves as chief executive officer of New SAC and Seagate
Technology, and Mr. Waite was appointed and serves as
executive vice president and chief administrative officer of New
SAC, Seagate Technology and Seagate Software (Cayman) Holdings,
as well as the president and chief operating officer of Certance
Holdings. Mr. Luczo also became a director of New SAC and
Seagate Technology and Certance Holdings and chief executive
officer, president and chief operating officer of Seagate
Software (Cayman) Holdings.

Messrs. Luczo, Kerfoot and Waite also
received shares of VERITAS common stock and cash to the extent
of their outstanding common stock and options in Old Seagate,
net of any amounts rolled over into equity and deferred
compensation in New SAC and its affiliates. The per share
amounts paid to these board members were the same as the amounts
paid to other holders of Old Seagate common stock.

-72-



---



##### 



In connection with the November 2000
transactions, New SAC and its affiliates, including us, agreed
to assume and indemnify VERITAS and its affiliates for
substantially all liabilities arising in connection with Old
Seagates and our operating assets and for selected tax
liabilities. In return, VERITAS, Old Seagate and their
affiliates agreed to indemnify New SAC and its affiliates,
including us, for certain liabilities, including all taxes of
Old Seagate for which New SAC and its affiliates are not
obligated to indemnify VERITAS and its affiliates. VERITAS
deposited $150 million in an escrow account. This amount
will reduce these tax liabilities, including those of our
company and our subsidiaries. To the extent any part of the
$150 million is not utilized to satisfy these tax
liabilities, it will be paid to the former stockholders of Old
Seagate.

In July 2002, we entered into a reimbursement
agreement with Seagate Technology and its affiliates which
allocates the respective liabilities and obligations of the
parties under the indemnification agreement. Under the
reimbursement agreement, if we and Seagate Technology became
obligated to indemnify VERITAS or Old Seagate under the
indemnification agreement, a subsidiary of Seagate Technology
will be responsible for the first $125 million of the tax
liabilities. Any amount in excess of the first $125 million
will be allocated pro rata in accordance with the portion of the
purchase price allocated to each entity in connection with the
November 2000 transaction among various subsidiaries and
affiliates Seagate Technology and us. For indemnification
obligations other than tax liabilities, the parties agreed that
the responsible entity will reimburse any entity that satisfies
the obligation on its behalf.

In connection with the agreement and plan of
merger that we entered into on July 18, 2003 with Business
Objects, we agreed to use our reasonable efforts to obtain from
VERITAS a written release from our obligations to indemnify
VERITAS for matters arising prior to the November 2000
transaction.

In addition, on July 18, 2003, New SAC
entered into a letter agreement with us whereby New SAC agreed
to reimburse us for any claims arising prior to March 31,
2006 and related to tax matters under the reimbursement
agreement or the indemnification agreement. The letter agreement
will become effective only upon the closing of the proposed
acquisition of our company by Business Objects and will not be
of any force or effect if the proposed acquisition is not
completed.

New SAC Shareholders Agreement

As of the date of the closing of the November
2000 transactions, our parent company, New SAC, entered into a
shareholders agreement with its shareholders, certain members of
our board of directors and specified members of Seagate
Technologys management. The New SAC shareholders agreement
will terminate in the event that 50% or more of New SACs
shares are sold or distributed to the public or are actively
traded on a national securities exchange.



| |                     
| | --------------------
| | Corporate Governance

New SACs board of directors consists of
nine members, three of whom are designated by Silver Lake
Partners, two of whom are designated by Texas Pacific Group, one
of whom is an executive officer of New SAC whose appointment is
reasonably acceptable to a majority of the directors, one of
whom is an independent director proposed by Silver Lake
Partners, approved by Texas Pacific Group and reasonably
acceptable to a majority of the directors, one of whom is the
chief executive officer of New SAC and one of whom is a director
elected pursuant to the provisions of New SACs governing
documents. The consent of at least seven members of New
SACs board of directors is required before New SAC may
voluntarily commence a bankruptcy proceeding, enter into a
material business combination, sell a material amount of assets,
enter into a material transaction with some of the shareholders
of New SAC or any of its affiliates, authorize, issue or sell
equity securities or options or warrants to purchase equity
securities, pay dividends or redeem equity securities or amend
its memorandum and articles of association. Accordingly, our
ability to engage in some transactions requiring shareholder
approval will

-73-



---



##### 



effectively be limited without the consent of New
SAC shareholders. In addition, the consent of eight directors is
required to increase or decrease the size of New SACs
board, and the consent of seven directors is required for the
exercise of the drag-along rights described below, and the
consent of at least five directors, with no Seagate Technology
management directors participating, is required to terminate the
chief executive officer of New SAC or appoint his successor.


Preemptive
Rights

The parties to the New SAC shareholders agreement
have preemptive rights allowing them to acquire for cash, in
proportion to their respective shareholdings in New SAC,
additional securities proposed to be issued and sold by New SAC,
excluding shares issued upon the exercise of outstanding options
granted under employee benefit plans or similar arrangements. If
a New SAC shareholder fails to exercise that shareholders
preemptive rights, New SAC has the right to sell these
additional securities.

Transfer Restrictions;
Tag-Along Rights; Drag-Along Rights

No party to the New SAC shareholders agreement is
permitted to sell, transfer or otherwise dispose of any of New
SACs shares until the earlier of November 22, 2003 or
180 days after New SACs initial public offering
without the prior consent of both Silver Lake Partners and Texas
Pacific Group, subject to specific exceptions. After the earlier
of November 22, 2003 or 180 days after New SACs
initial public offering, each New SAC shareholder subject to the
agreement will have a right of first offer to acquire any New
SAC shares that another New SAC shareholder to the agreement
proposes to sell or otherwise transfer, and any third-party
buyer will be subject to approval of New SACs board of
directors, excluding those directors affiliated with the
transferring shareholder. In addition, each New SAC shareholder
and member of Seagate Technology management who is a party to
the New SAC shareholders agreement has tag-along rights,
which are the rights to include a proportionate number of
shares, on the same terms and conditions, in any sale by another
party to the agreement to a third party. Beginning after the
earlier of November 22, 2003 or 180 days after New
SACs initial public offering, any New SAC shareholder
holding a majority of the outstanding shares of New SAC will
also have drag-along rights, meaning that if the shareholder
receives an offer from a third party to purchase a majority of
New SACs outstanding shares or enter into a business
combination, the shareholder will have the right to cause New
SACs other shareholders to join in the sale or business
combination on the same terms and conditions.

Registration
Rights

Subject to limitations specified in the New SAC
shareholders agreement, New SAC agreed to include New SAC shares
held by the New SAC shareholders in any public offering, other
than New SACs initial public offering by granting:



| |   |                                                                                                                                                       
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | to each shareholder to the agreement unlimited
    rights to participate in an offering initiated by New SAC;                                         
|
| |  | to all shareholders holding at least 20% of New
    SACs outstanding shares three demand registrations; and                                          
|
| |  | to any single shareholder holding at least 10% of
    New SACs outstanding shares one demand registration right
    with respect to that shareholder.

In addition, subject to certain conditions, all
New SAC shareholders may require New SAC to register New SAC
shares they hold on Form S-3 without limits to the number
of those registrations. New SAC agreed to pay all registration
expenses relating to these registrations and to indemnify the
selling shareholders.

-74-



---



##### 



Distribution Upon Initial
Public Offering of Certain Subsidiaries; New Shareholders
Agreement

At any time 190 days after the initial
public offering of the shares of designated subsidiaries of New
SAC, Silver Lake Partners or Texas Pacific Group, or both, can
require that New SAC distribute to its shareholders the
remaining shares New SAC holds of the newly public
subsidiarys stock. Upon the distribution of a newly public
subsidiarys shares, the newly public subsidiary is
required to enter into a new agreement with the New SAC
shareholders, on substantially the same terms as the New SAC
shareholders agreement. In connection with our proposed
acquisition by Business Objects, Silver Lake Partners and Texas
Pacific Group have agreed not to exercise this right in the
future with respect to the combined company. Instead, New SAC,
New SACs shareholders, certain Seagate Technology officers
and some of our directors have entered into a new agreement with
Business Objects that will only be effective upon the closing of
the proposed acquisition.

-75-



---



##### 



Item 14.     Principal
Accountant Fees and Services

Pursuant to SEC Release No. 33-8183 (as
corrected by Release No. 33-8183A), the disclosure
requirements of this Item are not effective until the Annual
Report on Form 10-K for the first fiscal year ending after
December 15, 2003.

-76-



---



##### 



PART IV

Item 15.     Exhibits,
Financial Statement Schedules, and Reports on
Form 8-K

(a)     Consolidated
Financial Statements

This Annual Report on Form 10-K contains the
following consolidated financial statements which appear on the
pages noted below:

|                                                                                                                                  |  |      |     | 
|--------------------------------------------------------------------------------------------------------------------------------- |  | ---- | --- | 
|                                                                                                                                  |  | Page
|                                                                                                                                  |  |     
|Report of Ernst & Young LLP, Independent
    Auditors                                                                             |  |      | F-2 | 
|Consolidated Balance Sheets as at June 28,
    2002 and June 27, 2003                                                             |  |      | F-3 | 
|Consolidated Statement of Operations for the
    fiscal years ended June 29, 2001, June 28, 2002 and
    June 27, 2003            |  |      | F-4 | 
|Consolidated Statements of Stockholders
    Equity for the fiscal years ended June 29, 2001,
    June 28, 2002 and June 27, 2003 |  |      | F-5 | 
|Consolidated Statements of Cash Flows for the
    fiscal years ended June 29, 2001, June 28, 2002 and
    June 27, 2003           |  |      | F-6 | 
|Notes to Consolidated Financial Statements                                                                                        |  |      | F-7 | 

(a)(2)     Financial
Statement Schedules



| |                                                  
| | -------------------------------------------------
| | Schedule II Valuation and Qualifying
    Accounts

REPORT OF INDEPENDENT AUDITORS ON FINANCIAL
STATEMENT SCHEDULES

To the Board of Directors and Stockholders of

Crystal Decisions, Inc.:


We have audited the consolidated balance sheets
of Crystal Decisions, Inc., as of June 28, 2002 and
June 27, 2003 and the related consolidated statements of
operations, stockholders equity and cash flows for each of
the three years in the period ended June 27, 2003 and have
issued our report thereon dated July 18, 2003 included
elsewhere in this document. Our audits also included the
financial statement schedules listed in Item 15(a)(2) of
this document. These schedules are the responsibility of the
Companys management. Our responsibility is to express an
opinion based on our audits.

In our opinion, the financial statement schedules
referred to above, when considered in relation to the
consolidated financial statements taken as a whole, present
fairly in all material respects the information set forth
therein.



| |                      
| | ---------------------
| | /S/ ERNST & YOUNG LLP

Vancouver, Canada

July 18, 2003


-77-



---



##### 



Schedule II  Valuation
and Qualifying Accounts.

|                   |  |                |       |            |  |             |       |                |  |   |       |  |  |   |       | 
|------------------ |  | -------------- | ----- | ---------- |  | ----------- | ----- | -------------- |  | - | ----- |  |  | - | ----- | 
|                   |  |                |       | Additions  |  |             |       |               
|                   |  | Balance at     |       | Charged to |  | Reductions  |       |               
|                   |  | Beginning of   |       | Return     |  | from Return |       | Balance at End
|Description        |  | Period         |       | Reserves   |  | Reserves    |       | of Period     
|                   |  |                |       |            |  |             |       |               
|                   |  |               
|                   |  | (in thousands)
|Return Reserves:   |  |                |       |            |  |             |       |                |  |   |       |  |  |   |       | 
|Fiscal Years Ended |  |                |       |            |  |             |       |                |  |   |       |  |  |   |       | 
|June 27, 2003      |  | $              | 475   |            |  | $           | 1,913 |                |  | $ | 1,754 |  |  | $ | 634   | 
|                   |  |                |       |            |  |             |       |                |  |   |       |  |  |   |       | 
|June 28, 2002      |  | $              | 1,097 |            |  | $           | 1,551 |                |  | $ | 2,173 |  |  | $ | 475   | 
|                   |  |                |       |            |  |             |       |                |  |   |       |  |  |   |       | 
|June 29, 2001      |  | $              | 1,015 |            |  | $           | 1,730 |                |  | $ | 1,648 |  |  | $ | 1,097 | 
|                   |  |                |       |            |  |             |       |                |  |   |       |  |  |   |       | 

|                                 |  |                |       |               |  |                 |     |                |  |   |     |  |  |   |       | 
|-------------------------------- |  | -------------- | ----- | ------------- |  | --------------- | --- | -------------- |  | - | --- |  |  | - | ----- | 
|                                 |  |                |       | Additions     |  |                 |     |               
|                                 |  |                |       | Charged to    |  | Reductions from |     |               
|                                 |  | Balance at     |       | Allowance for |  | Allowance for   |     |               
|                                 |  | Beginning of   |       | Doubtful      |  | Doubtful        |     | Balance at End
|Description                      |  | Period         |       | Accounts      |  | Accounts        |     | of Period     
|                                 |  |                |       |               |  |                 |     |               
|                                 |  |               
|                                 |  | (in thousands)
|Allowance for Doubtful Accounts: |  |                |       |               |  |                 |     |                |  |   |     |  |  |   |       | 
|Fiscal Years Ended               |  |                |       |               |  |                 |     |                |  |   |     |  |  |   |       | 
|June 27, 2003                    |  | $              | 2,148 |               |  | $               | 647 |                |  | $ | 235 |  |  | $ | 2,560 | 
|                                 |  |                |       |               |  |                 |     |                |  |   |     |  |  |   |       | 
|June 28, 2002                    |  | $              | 1,779 |               |  | $               | 644 |                |  | $ | 275 |  |  | $ | 2,148 | 
|                                 |  |                |       |               |  |                 |     |                |  |   |     |  |  |   |       | 
|June 29, 2001                    |  | $              | 1,679 |               |  | $               | 801 |                |  | $ | 701 |  |  | $ | 1,779 | 
|                                 |  |                |       |               |  |                 |     |                |  |   |     |  |  |   |       | 

|                                             |  |                |        |            |  |                 |        |                |  |   |        |  |  |   |        | 
|-------------------------------------------- |  | -------------- | ------ | ---------- |  | --------------- | ------ | -------------- |  | - | ------ |  |  | - | ------ | 
|                                             |  |                |        | Additions  |  |                 |        |               
|                                             |  | Balance at     |        | Charged to |  | Reductions from |        |               
|                                             |  | Beginning of   |        | Valuation  |  | Valuation       |        | Balance at End
|Description                                  |  | Period         |        | Allowance  |  | Allowance       |        | of Period     
|                                             |  |                |        |            |  |                 |        |               
|                                             |  |               
|                                             |  | (in thousands)
|Deferred Tax Asset, Valuation
    Allowance: |  |                |        |            |  |                 |        |                |  |   |        |  |  |   |        | 
|Fiscal Years Ended                           |  |                |        |            |  |                 |        |                |  |   |        |  |  |   |        | 
|June 27, 2003                                |  | $              | 68,929 |            |  | $               | 2,036  |                |  | $ | 21,282 |  |  | $ | 49,683 | 
|                                             |  |                |        |            |  |                 |        |                |  |   |        |  |  |   |        | 
|June 28, 2002                                |  | $              | 15,605 |            |  | $               | 56,564 |                |  | $ | 3,240  |  |  | $ | 68,929 | 
|                                             |  |                |        |            |  |                 |        |                |  |   |        |  |  |   |        | 
|June 29, 2001                                |  | $              | 38,301 |            |  | $               | 15,605 |                |  | $ | 38,301 |  |  | $ | 15,605 | 
|                                             |  |                |        |            |  |                 |        |                |  |   |        |  |  |   |        | 

Schedules not listed above have been omitted
because the information required to be set forth therein is not
applicable or is shown in the financial statements or notes
thereto.

(b)     Reports on
Form 8-K.

On April 16, 2003, we filed a Current Report
on Form 8-K announcing the appointment of Robert L. Bailey
to our board of directors.

On April 29, 2003, we filed a Current Report
on Form 8-K regarding our financial results for our third
fiscal quarter ended March 28, 2003.

-78-



---



##### 



(c)     Exhibits.

The following exhibits are included herein or
incorporated herein by reference:

|          |  |                                                                                                                                                                                                                                                          
|--------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit   |  |                                                                                                                                                                                                                                                          
|Number    |  |                                                                                                                                                                                                                                                          
|          |  |                                                                                                                                                                                                                                                          
|2.1(17)   |  | Agreement and Plan of Merger dated as of
    July 18, 2003, by and among Business Objects, S.A., Borg
    Merger Sub I, Inc., Borg Merger Sub II, Inc., Borg
    Merger Sub III, Inc., Crystal Decisions, Inc. and Seagate
    Software (Cayman) Holdings
|2.2(17)   |  | Stockholders Agreement dated as of July 18,
    2003, by and among Business Objects, S.A., New SAC and certain
    other stockholders                                                                                                                    
|2.3(17)   |  | Support Agreement dated as of July 18, 2003,
    by and among Business Objects, S.A., Borg Merger Sub I,
    Inc., Borg Merger Sub II, Inc., Borg Merger Sub III,
    Inc. and New SAC                                                                   
|2.4(17)   |  | Company Support Agreement dated as of
    July 18, 2003, by and among Business Objects, S.A., Borg
    Merger Sub I, Inc., Borg Merger Sub II, Inc., Borg
    Merger Sub III, Inc. and Seagate Software (Cayman) Holdings                                
|2.5(17)   |  | Form of Voting Agreement by and among Business
    Objects, S.A., Crystal Decisions, Inc. and certain stockholders
    of Business Objects, S.A.                                                                                                         
|3.1(1)    |  | Certificate of Incorporation of Registrant                                                                                                                                                                                                               
|3.2(1)    |  | Bylaws of Registrant, as amended and restated                                                                                                                                                                                                            
|10.1(1)   |  | 1999 Stock Option Plan and form of Stock Option
    Agreement, as amended and restated                                                                                                                                                                   
|10.1.1(1) |  | 1999 Stock Option Plan  Canadian Stock
    Option Agreement                                                                                                                                                                                             
|10.1.2(1) |  | 1999 Stock Option Plan  United Kingdom
    Sub-Plan, as amended and restated                                                                                                                                                                            
|10.1.3(7) |  | 1999 Stock Option Plan, as Amended
    August 13, 2001                                                                                                                                                                                                   
|10.1.4(4) |  | 1999 Stock Option Plan  French
    Sub-Plan.                                                                                                                                                                                                            
|10.2(1)   |  | 2000 Stock Option Plan and form of Stock Option
    Agreement, as amended and restated                                                                                                                                                                   
|10.3(1)   |  | Seagate Technology, Inc. Employee Stock Purchase
    Plan, as amended and restated                                                                                                                                                                       
|10.4(1)   |  | Intercompany Revolving Loan Agreement dated
    July 4, 2000 between the Registrant and Seagate Technology
    LLC                                                                                                                                       
|10.4.1(5) |  | Intercompany Revolving Loan Agreement dated
    July 4, 2001 between Crystal Decisions, Inc. and Seagate
    Technology LLC                                                                                                                              
|10.5(1)   |  | Form of Indemnification Agreement entered into
    between the Registrant, its affiliates and its directors and
    officers                                                                                                                             
|10.6(1)   |  | General Services Agreement dated June 28,
    1997 between Seagate Software Holdings, Inc. and Seagate
    Technology, Inc.                                                                                                                              
|10.6.1(2) |  | Management Services Agreement dated
    November 20, 2000 between Seagate Software Information
    Management Group Holdings, Inc. and Seagate Technology
    (US) Holdings, Inc.                                                                        
|10.6.2(2) |  | Corporate Services Agreement dated July 1,
    2000 between Seagate Software Information Management Group
    Holdings, Inc. and Seagate Technology LLC                                                                                                  
|10.6.3(2) |  | Payroll Services Agreement dated July 14,
    2000 between Seagate Software Information Management Group
    Holdings, Inc. and Seagate US LLC                                                                                                           
|10.7(1)   |  | Tax Allocation Agreement dated April 4, 1996
    between Seagate Software Holdings and Seagate Technology, Inc.                                                                                                                                          
|10.8(5)   |  | Cross License and Original Equipment
    Manufacturing Agreement effective October 5, 1998 by and
    among Seagate Software Information Management Group, Inc.,
    VERITAS Software Corporation and VERITAS Operating Corporation                      
|10.8.1(1) |  | Amendment No. 1 to Cross License and OEM
    Agreement dated April 16, 1999                                                                                                                                                                              

-79-



---



##### 



|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|----------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|Number      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|10.9(1)     |  | Lease Agreement dated November 1, 1997
    between No. 163 Cathedral Ventures Limited, Seagate
    Software Information Management Group, Inc. and Seagate
    Technology, Inc., as Guarantor                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|10.9.1(1)   |  | Amendment to Lease agreement dated
    January 27, 1999                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|10.10(1)    |  | Lease Agreement dated September 27, 1999
    between Laurelton Investments Ltd., Seagate Software Information
    Management Group (Canada) Ltd. and Seagate Software, Inc.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|10.10.1(5)  |  | Amendment to Lease agreement dated June 22,
    2000 between Laurelton Investments Ltd., Seagate Software
    Information Management Group (Canada) Ltd. and Seagate Software,
    Inc.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|10.10.2(4)  |  | Amended and Restated Lease Agreement dated
    February 28, 2002 between Laurelton Investments Ltd.,
    Crystal Decisions, Corp. and Crystal Decisions, Inc.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|10.11(1)    |  | Lease agreement dated October 18, 1996
    between Ravenseft Properties Limited and Holistic Systems Limited                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|10.11.1(1)  |  | License to Underlet dated May 16, 2000
    between Ravenseft Properties Limited, Blackwell Healthcare
    Communications Limited and Seagate Information Management Group
    Limited                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|10.11.2(16) |  | Under lease agreement dated May 23, 2000
    between Seagate Information Management Group Limited and
    Blackwell Healthcare Communications Limited                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|10.12(1)    |  | Lease agreement dated June 22, 1998 between
    Allstate Insurance Company and Seagate Software, Inc.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|10.13(1)    |  | Sublease agreement dated June 18, 1999
    between Bellsouth Mobility Inc. and Seagate Software Inc.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|10.14(3)    |  | Seagate Software Information Management Group
    (US), Inc. Software License Agreement between Seagate Software
    Information Management Group, Inc. and Seagate Technology                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|10.14.1(8)  |  | Amendment No. 1 to the Software License
    Agreement, dated as of September 20, 2000, between Seagate
    Technology LLC and Crystal Decisions, Inc.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|10.15(5)    |  | Offer Letter dated as of July 20, 2000 by
    and between Seagate Software Information Management Group, Inc.
    and William G. Gibson                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|10.16(6)    |  | Loan and Security agreement dated October 1,
    2002 between Crystal Decisions, Inc. and Comerica Bank-California                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|10.16.1(6)  |  | Addendum to Loan and Security Agreement entered
    into as of October 1, 2002 between Crystal Decisions, Inc.
    and Comerica Bank-California                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|10.17(6)    |  | Offer Letter dated as of September 25, 2002
    between Crystal Decisions, Inc. and Jonathan Judge                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|10.20(9)    |  | Shareholders Agreement, dated as of
    November 22, 2000, by and among New SAC, Silver Lake
    Technology Investors Cayman, L.P., Silver Lake Investors Cayman,
    L.P., Silver Lake Partners Cayman, L.P., SAC Investments, L.P.,
    August Capital III, L.P., Chase Equity Associates, L.P.,
    GS Capital Partners III, L.P., GS Capital
    Partners III Offshore, L.P., Goldman, Sachs & Co.
    Verwaltungs GmbH, Stone Street Fund 2000 L.P., Bridge Street
    Special Opportunities Fund 2000, L.P., Staenberg Venture
    Partners II, L.P., Staenberg Seagate Partners, LLC,
    Integral Capital Partners V, L.P., Integral Capital
    Partners V Side Fund, L.P. and the individuals listed
    therein
|10.21(10)   |  | Management Shareholders Agreement, dated as of
    November 22, 2000, by and among New SAC and the Management
    Shareholders listed therein                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

-80-



---



##### 



|            |  |                                                                                                                                                                                                                                                                                                                                                                                           
|----------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit     |  |                                                                                                                                                                                                                                                                                                                                                                                           
|Number      |  |                                                                                                                                                                                                                                                                                                                                                                                           
|            |  |                                                                                                                                                                                                                                                                                                                                                                                           
|10.22(11)   |  | Indemnification Agreement, dated as of
    March 29, 2000, by and among VERITAS Software Corporation,
    Seagate Technology, Inc. and Suez Acquisition Company (Cayman)
    Limited                                                                                                                                                                                                      
|10.22.1(12) |  | Joinder Agreement to the Indemnification
    Agreement, dated as of November 22, 2000, by and among
    VERITAS Software Corporation, Seagate Technology, Inc. and the
    SAC Indemnitors listed therein, including Seagate Software
    Information Management Group Holdings, Inc.                                                                                                     
|10.22.2(13) |  | Consolidated Amendment to the Stock Purchase
    Agreement, Agreement and Plan of Merger and Reorganization, and
    Indemnification Agreement, and Consent, dated as of
    August 29, 2000, by and among Suez Acquisition Company
    (Cayman) Limited, Seagate Technology, Inc., Seagate Software
    Holdings, Inc., VERITAS Software Corporation and Victory Merger
    Sub, Inc.    
|10.22.3(14) |  | Consolidated Amendment No. 2 to Stock
    Purchase Agreement, Agreement and Plan of Merger and
    Reorganization, and Indemnification Agreement, and Consent,
    dated, as of October 18, 2000, by and among Suez
    Acquisition Company (Cayman) Limited, Seagate Technology, Inc.,
    Seagate Software Holdings, Inc., VERITAS Software Corporation
    and Victory Merger Sub, Inc.
|10.22.4(15) |  | Reimbursement Agreement, dated as of July 1,
    2002, by and among New SAC and its subsidiaries party thereto,
    including Crystal Decisions, Inc.                                                                                                                                                                                                                                     
|10.22.5     |  | Indemnification Letter Agreement between the
    Registrant and New SAC dated July 18, 2003.                                                                                                                                                                                                                                                                                              
|10.23       |  | Tenancy dated July 2, 2002 between Crystal
    Decisions (UK) Limited and Ealing Broadway (No. 1) Limited
    and Ealing Broadway (No. 2) Limited.                                                                                                                                                                                                                                        
|10.23.1     |  | Deed dated July 2, 2002 between Crystal
    Decisions (UK) Limited and Ealing Broadway (No. 1) Limited
    and Ealing Broadway (No. 2) Limited.                                                                                                                                                                                                                                           
|10.24(18)   |  | Lease agreement dated December 27, 1994 and
    lease agreement for additional premises dated December 13,
    1995 between Clover Investments, Inc., Crystal Computer
    Services, Inc. and Seagate Technology, Inc.                                                                                                                                                                    
|10.24.1     |  | Amendment to Lease Agreement dated
    December 30, 1999 between the Manufacturer Life Insurance
    Company and Seagate Software Information Management Group
    (Canada) Inc.                                                                                                                                                                                                          
|10.24.2     |  | Amendment to Lease Agreement dated July 17, 2000
    between the Manufacturer Life Insurance Company and Seagate
    Software Information Management Group (Canada) Inc.                                                                                                                                                                                                                  
|10.24.3     |  | Amendment to Lease Agreement dated April 2,
    2002 between the Manufacturer Life Insurance Company and Crystal
    Decisions, Corp.                                                                                                                                                                                                                                                     
|21.1(19)    |  | Subsidiaries of the Registrant                                                                                                                                                                                                                                                                                                                                                            
|23.1        |  | Consent of Ernst & Young LLP,
    Independent Auditors                                                                                                                                                                                                                                                                                                                                    
|24.1        |  | Power of Attorney (see page 84)                                                                                                                                                                                                                                                                                                                                                           
|31.1        |  | Certification of President and Chief Executive
    Officer pursuant to Section 302 of the Sarbanes-Oxley Act
    of 2002.                                                                                                                                                                                                                                                                 
|31.2        |  | Certification of Chief Financial Officer pursuant
    to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                                   
|32.1        |  | Certifications of President and Chief Executive
    Officer and Chief Financial Officer pursuant to Section 906
    of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                    



---



| |     |                                                                                                                                        
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------
| | (1) | Incorporated by reference to the
    registrants Registration Statement on Form 10 filed
    on October 27, 2000 (File No. 000-31859).
|
| | (2) | Incorporated by reference to the
    registrants Quarterly Report on Form 10-Q for the
    period ended March 30, 2001.               

-81-



---



##### 





| |     |                                                                                                                                                                                
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (3) | Incorporated by reference to the
    registrants Quarterly Report on Form 10-Q for the
    period ended December 29, 2000.                                                    
|
| | (4) | Incorporated by Reference to the
    registrants Annual Report on Form 10-K for the period
    ended June 28, 2002.                                                           
|
| | (5) | Incorporated by reference to the
    registrants Annual Report on Form 10-K for the period
    ended June 29, 2001.                                                           
|
| | (6) | Incorporated by reference to the
    registrants Quarterly Report on Form 10-Q for the
    period ended September 27, 2002.                                                   
|
| | (7) | Incorporated by reference to the
    registrants Quarterly Report on Form 10-Q for the
    period ended September 28, 2001.                                                   
|
| | (8) | Incorporated by reference to the
    registrants Quarterly Report on Form 10-Q for the
    period ended March 28, 2003.                                                       
|
| | (9) | Incorporated by reference to Exhibit 10.10
    to the registration statement on Form S-4 (reg.
    no. 333-88388) of Seagate Technology filed with the SEC on
    May 16, 2002.



|     |                                                                                                                                                                                                         
|---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(10) | Incorporated by reference to Exhibit 10.11
    to the registration statement on Form S-4 (reg. no.
    333-88388) of Seagate Technology filed with the SEC on
    May 16, 2002.                         
|    
|(11) | Incorporated by reference to Exhibit 2.3 to
    the registration statement on Form S-4 (reg.
    no. 333-88388) of Seagate Technology filed with the SEC on
    May 16, 2002.                           
|    
|(12) | Incorporated by reference to Exhibit 2.4 to
    the registration statement on Form S-4 (reg.
    no. 333-88388) of Seagate Technology filed with the SEC on
    May 16, 2002.                           
|    
|(13) | Incorporated by reference to Exhibit 2.5 to
    the registration statement on Form S-4 (reg.
    no. 333-88388) of Seagate Technology filed with the SEC on
    May 16, 2002.                           
|    
|(14) | Incorporated by reference to Exhibit 2.6 to
    the registration statement on Form S-4 (reg.
    no. 333-88388) of Seagate Technology filed with the SEC on
    May 16, 2002.                           
|    
|(15) | Incorporated by reference to Exhibit 10.18
    to amendment no. 10 to the registration statement on
    Form S-4 (reg. no. 333-88388) of Seagate Technology
    filed with the SEC on December 17, 2002.
|    
|(16) | Incorporated by reference to exhibit 10.11.2
    to the registrants Registration Statement on Form S-1
    (reg. no. 333-105559) filed with the SEC on May 23, 2003.                                   
|    
|(17) | Incorporated by reference to exhibits to the
    Current Report on Form 8-K filed by the registration with
    the SEC on July 25, 2003.                                                                
|    
|(18) | Incorporated by reference to Exhibit 10.3 to
    the Registration Statement on Form 10 (reg.
    no. 000-23169) of Seagate Software, Inc. filed with the SEC
    on October 3, 1997.                    
|    
|(19) | Incorporated by reference to Exhibit 21.1 to
    the registrants Registration Statement on Form S-1
    (reg. no. 333-105559) filed with the SEC on May 23,
    2003.                                  

(d)     Financial
Statement Schedule.

We hereby file as part of this Form 10-K the
schedule listed in Item 15(a)2, as set forth above.

-82-



---



##### 



SIGNATURES

Pursuant to the requirements of Section 13
or 15(d) of the Securities Exchange Act of 1934, the Registrant
has duly caused this annual report on Form 10-K to be
signed on its behalf by the undersigned thereunto duly
authorized in the City of Palo Alto, California, on
August 19, 2003.



| |                        
| | -----------------------
| | CRYSTAL DECISIONS, INC.



| |     |                      
| | --- | ---------------------
| | By: | /s/ JONATHAN J. JUDGE

| |                                          
| | -----------------------------------------
| |                                          
| | Jonathan J. Judge                        
| | President and Chief Executive
    Officer
| | (Principal Executive Officer)            



| |     |               
| | --- | --------------
| | By: | /s/ ERIC PATEL

| |                                                 
| | ------------------------------------------------
| |                                                 
| | Eric Patel                                      
| | Chief Financial Officer                         
| | (Principal Financial and Accounting
    Officer)

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that each
person whose signature appears below hereby constitutes and
appoints Jonathan J. Judge and Eric Patel and each of them
acting individually, as his or her attorney-in-fact, each with
full power of substitution, for him in any and all capacities,
to sign any and all amendments to this Report on Form 10-K,
and to file the same, with all exhibits thereto and other
documents in connection therewith, with the Securities and
Exchange Commission.

Pursuant to the requirements of the Securities
Exchange Act of 1934, this Report on Form 10-K has been
signed on behalf of the Registrant by the following persons and
in the capacities and on the dates indicated:

|                                           |  |                                                                          |  |                 |  | 
|------------------------------------------ |  | ------------------------------------------------------------------------ |  | --------------- |  | 
|                                           |  |                                                                          |  |                
|Signature                                  |  | Title                                                                    |  | Date           
|                                           |  |                                                                          |  |                
|/s/ JONATHAN J. JUDGE(Jonathan J. Judge)   |  | President and Chief Executive Officer (Principal
    Executive Officer)  |  | August 19, 2003
|                                          
|/s/ ERIC PATEL(Eric Patel)                 |  | Chief Financial Officer (Principal Accounting and
    Financial Officer) |  | August 19, 2003
|                                          
|/s/ GREGORY B. KERFOOT(Gregory B. Kerfoot) |  | Chairman of the Board of Directors                                       |  | August 19, 2003
|                                          
|/s/ FRED D. ANDERSON(Fred D. Anderson)     |  | Director                                                                 |  | August 19, 2003
|                                          
|/s/ ROBERT L. BAILEY(Robert L. Bailey)     |  | Director                                                                 |  | August 19, 2003
|                                          
|/s/ JUSTIN T. CHANG(Justin T. Chang)       |  | Director                                                                 |  | August 19, 2003
|                                          
|/s/ STEPHEN J. LUCZO(Stephen J. Luczo)     |  | Director                                                                 |  | August 19, 2003
|                                          
|/s/ DAVID J. ROUX(David J. Roux)           |  | Director                                                                 |  | August 19, 2003
|                                          
|/s/ JOHN W. THOMPSON(John W. Thompson)     |  | Director                                                                 |  | August 19, 2003
|                                          
|/s/ DONALD L. WAITE(Donald L. Waite)       |  | Director                                                                 |  | August 19, 2003

-83-



---



##### 



INDEX TO CONSOLIDATED FINANCIAL
STATEMENTS

|                                                                                                                                  |  |      |     | 
|--------------------------------------------------------------------------------------------------------------------------------- |  | ---- | --- | 
|                                                                                                                                  |  | Page
|                                                                                                                                  |  |     
|Report of Ernst & Young LLP, Independent
    Auditors                                                                             |  |      | F-2 | 
|Consolidated Balance Sheets as at June 28,
    2002 and June 27, 2003                                                             |  |      | F-3 | 
|Consolidated Statement of Operations for the
    fiscal years ended June 29, 2001, June 28, 2002 and
    June 27, 2003            |  |      | F-4 | 
|Consolidated Statements of Stockholders
    Equity for the fiscal years ended June 29, 2001,
    June 28, 2002 and June 27, 2003 |  |      | F-5 | 
|Consolidated Statements of Cash Flows for the
    fiscal years ended June 29, 2001, June 28, 2002 and
    June 27, 2003           |  |      | F-6 | 
|Notes to Consolidated Financial Statements                                                                                        |  |      | F-7 | 

F-1



---



##### 



REPORT OF ERNST & YOUNG LLP, INDEPENDENT
AUDITORS

To the Board of Directors and Stockholders of

Crystal Decisions, Inc.:


We have audited the accompanying consolidated
balance sheets of Crystal Decisions, Inc., as of June 28,
2002 and June 27, 2003 and the related consolidated
statements of operations, stockholders equity and cash
flows for each of the three years in the period ended
June 27, 2003. These consolidated financial statements are
the responsibility of Crystal Decisions, Inc.s management.
Our responsibility is to express an opinion on these
consolidated financial statements based on our audits.

We conducted our audits in accordance with
auditing standards generally accepted in the United States.
Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.

In our opinion, the consolidated financial
statements referred to above present fairly, in all material
respects, the consolidated financial position of Crystal
Decisions, Inc. at June 28, 2002 and June 27, 2003 and
the consolidated results of its operations and its cash flows
for each of the three years in the period ended June 27,
2003, in conformity with accounting principles generally
accepted in the United States.



| |                      
| | ---------------------
| | /s/ ERNST & YOUNG LLP

Vancouver, Canada

July 18, 2003


F-2



---



##### 



CRYSTAL DECISIONS, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share data)


|                                                                                                                                                     |                                                                              |                                            |        |          |         |  |        |        |         | 
|---------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------- | ------------------------------------------ | ------ | -------- | ------- |  | ------ | ------ | ------- | 
|                                                                                                                                                     |                                                                              | June 28,                                   |        | June 27,
|                                                                                                                                                     |                                                                              | 2002                                       |        | 2003    
|                                                                                                                                                     |                                                                              |                                            |        |         
|ASSETS (notes 14 and 15)                                                                                                                             |                                                                              |                                            |        |          |         |  |        |       
|Current assets:                                                                                                                                      |                                                                              |                                            |        |          |         |  |        |       
|                                                                                                                                                     | Cash and cash equivalents (note 4)                                           |                                            | $      | 71,451   |         |  | $      | 99,823 |        
|                                                                                                                                                     | Short-term investments (note 4)                                              |                                            |        |         |         |  |        | 4,880  |        
|                                                                                                                                                     | Restricted cash (note 5)                                                     |                                            |        |         |         |  |        | 2,019  |        
|                                                                                                                                                     | Accounts receivable, net of allowance of $2,148
    and $2,560, respectively |                                            |        | 40,391   |         |  |        | 51,436 |        
|                                                                                                                                                     | Income taxes receivable                                                      |                                            |        | 1,048    |         |  |        | 77     |        
|                                                                                                                                                     | Inventories, net                                                             |                                            |        | 607      |         |  |        | 515    |        
|                                                                                                                                                     | Deferred tax assets (note 11)                                                |                                            |        |         |         |  |        | 10,229 |        
|                                                                                                                                                     | Prepaid and other current assets (notes 3 and 11)                            |                                            |        | 5,748    |         |  |        | 10,635 |        
|                                                                                                                                                     |                                                                              |                                            |        |          |         |  |        |       
|                                                                                                                                                     |                                                                              | Total current assets                       |        |          | 119,245 |  |        |        | 179,614 | 
|Property and equipment, net (note 6)                                                                                                                 |                                                                              |                                            | 15,901 |          |         |  | 24,817 |       
|Deferred tax assets (note 11)                                                                                                                        |                                                                              |                                            |       |          |         |  | 1,052  |       
|Other non-current assets (note 11)                                                                                                                   |                                                                              |                                            | 1,700  |          |         |  |       |       
|Long-term investments (note 4)                                                                                                                       |                                                                              |                                            |       |          |         |  | 3,215  |       
|                                                                                                                                                     |                                                                              |                                            |        |          |         |  |        |       
|                                                                                                                                                     |                                                                              | Total assets                               |        | $        | 136,846 |  |        | $      | 208,698 | 
|                                                                                                                                                     |                                                                              |                                            |        |          |         |  |        |       
|LIABILITIES AND STOCKHOLDERS
    EQUITY                                                                                                             |                                                                              |                                            |        |          |         |  |        |       
|Current liabilities:                                                                                                                                 |                                                                              |                                            |        |          |         |  |        |       
|                                                                                                                                                     | Accounts payable (note 8)                                                    |                                            | $      | 14,518   |         |  | $      | 17,464 |        
|                                                                                                                                                     | Accrued employee compensation                                                |                                            |        | 13,066   |         |  |        | 20,267 |        
|                                                                                                                                                     | Accrued expenses (note 3)                                                    |                                            |        | 11,842   |         |  |        | 15,217 |        
|                                                                                                                                                     | Deferred revenues                                                            |                                            |        | 38,895   |         |  |        | 48,245 |        
|                                                                                                                                                     | Income taxes payable                                                         |                                            |        | 14,498   |         |  |        | 28,659 |        
|                                                                                                                                                     |                                                                              |                                            |        |          |         |  |        |       
|                                                                                                                                                     |                                                                              | Total current liabilities                  |        |          | 92,819  |  |        |        | 129,852 | 
|Deferred tax liabilities (note 11)                                                                                                                   |                                                                              |                                            | 583    |          |         |  | 1,284  |       
|Deferred revenues                                                                                                                                    |                                                                              |                                            | 1,992  |          |         |  | 1,806  |       
|                                                                                                                                                     |                                                                              |                                            |        |          |         |  |        |       
|                                                                                                                                                     |                                                                              | Total liabilities                          |        |          | 95,394  |  |        |        | 132,942 | 
|Commitments and contingencies (notes 2, 3, 8, 14,
    15, 17, 18 and 19)                                                                             |                                                                              |                                            |        |          |         |  |        |       
|                                                                                                                                                    
|Stockholders equity:                                                                                                                                |                                                                              |                                            |        |          |         |  |        |       
|Common stock  150,000,000 shares
    authorized; issued and outstanding  75,863,896 and
    76,091,581 at $0.001 par value per share, respectively |                                                                              |                                            | 76     |          |         |  | 76     |       
|Additional paid-in capital                                                                                                                           |                                                                              |                                            | 34,814 |          |         |  | 35,771 |       
|Retained earnings                                                                                                                                    |                                                                              |                                            | 6,438  |          |         |  | 39,893 |       
|Accumulated other comprehensive income
    (note 3)                                                                                                  |                                                                              |                                            | 124    |          |         |  | 16     |       
|                                                                                                                                                     |                                                                              |                                            |        |          |         |  |        |       
|                                                                                                                                                     |                                                                              | Total stockholders equity                 |        |          | 41,452  |  |        |        | 75,756  | 
|                                                                                                                                                     |                                                                              |                                            |        |          |         |  |        |       
|                                                                                                                                                     |                                                                              | Total liabilities and stockholders equity |        | $        | 136,846 |  |        | $      | 208,698 | 
|                                                                                                                                                     |                                                                              |                                            |        |          |         |  |        |       

See accompanying notes.

F-3



---



##### 



CRYSTAL DECISIONS, INC.

CONSOLIDATED STATEMENTS OF
OPERATIONS

(In thousands, except per share data)


|                                                  |                                                                   |                          |         |          |         |          |         |         |         |   |         |         |         | 
|------------------------------------------------- | ----------------------------------------------------------------- | ------------------------ | ------- | -------- | ------- | -------- | ------- | ------- | ------- | - | ------- | ------- | ------- | 
|                                                  |                                                                   |                         
|                                                  |                                                                   | Fiscal Years Ended      
|                                                  |                                                                   |                         
|                                                  |                                                                   | June 29,                 |         | June 28, |         | June 27,
|                                                  |                                                                   | 2001                     |         | 2002     |         | 2003    
|                                                  |                                                                   |                          |         |          |         |         
|                                                  |                                                                   | (note 2)                 |         |          |         |         
|Revenues:                                         |                                                                   |                          |         |          |         |          |         |         |         |   |         |        
|                                                  | Licensing (note 8)                                                |                          | $       | 107,028  |         |          | $       | 140,009 |         |   | $       | 185,532 |        
|                                                  | Maintenance, support and services (note 8)                        |                          |         | 60,694   |         |          |         | 77,161  |         |   |         | 101,976 |        
|                                                  |                                                                   |                          |         |          |         |          |         |         |         |   |         |        
|                                                  |                                                                   | Total revenues           |         |          | 167,722 |          |         |         | 217,170 |   |         |         | 287,508 | 
|Cost of revenues:                                 |                                                                   |                          |         |          |         |          |         |         |         |   |         |        
|                                                  | Licensing                                                         |                          |         | 5,504    |         |          |         | 4,993   |         |   |         | 5,617   |        
|                                                  | Maintenance, support and services                                 |                          |         | 41,996   |         |          |         | 46,377  |         |   |         | 56,313  |        
|                                                  | Amortization of developed technologies                            |                          |         | 3,050    |         |          |         | 5,078   |         |   |         |        |        
|                                                  |                                                                   |                          |         |          |         |          |         |         |         |   |         |        
|                                                  |                                                                   | Total cost of revenues   |         |          | 50,550  |          |         |         | 56,448  |   |         |         | 61,930  | 
|                                                  |                                                                   |                          |         |          |         |          |         |         |         |   |         |        
|Gross profit                                      |                                                                   |                          | 117,172 |          |         |          | 160,722 |         |         |   | 225,578 |        
|Operating expenses:                               |                                                                   |                          |         |          |         |          |         |         |         |   |         |        
|                                                  | Sales and marketing                                               |                          |         | 73,888   |         |          |         | 94,449  |         |   |         | 108,470 |        
|                                                  | Research and development                                          |                          |         | 29,236   |         |          |         | 30,515  |         |   |         | 41,924  |        
|                                                  | General and administrative (note 8)                               |                          |         | 15,465   |         |          |         | 18,464  |         |   |         | 29,434  |        
|                                                  | Amortization of goodwill and other intangible
    assets (note 2) |                          |         | 2,023    |         |          |         | 2,358   |         |   |         |        |        
|                                                  | Write-off of in-process research and development
    (note 2)     |                          |         | 7,073    |         |          |         |        |         |   |         |        |        
|                                                  | Unusual items (note 9)                                            |                          |         | 1,851    |         |          |         |        |         |   |         |        |        
|                                                  | Restructuring costs (note 10)                                     |                          |         | 573      |         |          |         |        |         |   |         |        |        
|                                                  |                                                                   |                          |         |          |         |          |         |         |         |   |         |        
|                                                  |                                                                   | Total operating expenses |         |          | 130,109 |          |         |         | 145,786 |   |         |         | 179,828 | 
|                                                  |                                                                   |                          |         |          |         |          |         |         |         |   |         |        
|Income (loss) from operations                     |                                                                   |                          | (12,937 | )        |         |          | 14,936  |         |         |   | 45,750  |        
|                                                  | Interest income                                                   |                          |         | 1,970    |         |          |         | 1,780   |         |   |         | 1,378   |        
|                                                  | Interest expense                                                  |                          |         | (20      | )       |          |         | (57     | )       |   |         | (24     | )      
|                                                  | Other income (expense)                                            |                          |         | 701      |         |          |         | (404    | )       |   |         | (458    | )      
|                                                  |                                                                   |                          |         |          |         |          |         |         |         |   |         |        
|Interest and other income (expense), net          |                                                                   |                          | 2,651   |          |         |          | 1,319   |         |         |   | 896     |        
|                                                  |                                                                   |                          |         |          |         |          |         |         |         |   |         |        
|Income (loss) before income taxes                 |                                                                   |                          | (10,286 | )        |         |          | 16,255  |         |         |   | 46,646  |        
|Provision for income taxes (note 11)              |                                                                   |                          | 1,183   |          |         |          | 3,300   |         |         |   | 13,191  |        
|                                                  |                                                                   |                          |         |          |         |          |         |         |         |   |         |        
|Net income (loss)                                 |                                                                   | $                        | (11,469 | )        |         | $        | 12,955  |         |         | $ | 33,455  |        
|                                                  |                                                                   |                          |         |          |         |          |         |         |         |   |         |        
|Basic net income (loss) per share
    (note 12)   |                                                                   | $                        | (0.15   | )        |         | $        | 0.17    |         |         | $ | 0.44    |        
|                                                  |                                                                   |                          |         |          |         |          |         |         |         |   |         |        
|Diluted net income (loss) per share
    (note 12) |                                                                   | $                        | (0.15   | )        |         | $        | 0.17    |         |         | $ | 0.42    |        
|                                                  |                                                                   |                          |         |          |         |          |         |         |         |   |         |        

See accompanying notes.

F-4



---



##### 



CRYSTAL DECISIONS, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS
EQUITY

(In thousands, except per share data)


|                                                                             |                                                         |              |            |            |  |              |    |               |  |               |          |       |  |   |          |         |   |   |      |     |   |   |         |         |  
|---------------------------------------------------------------------------- | ------------------------------------------------------- | ------------ | ---------- | ---------- |  | ------------ | -- | ------------- |  | ------------- | -------- | ----- |  | - | -------- | ------- | - | - | ---- | --- | - | - | ------- | ------- | -
|                                                                             |                                                         |              |            |            |  | Retained     |    | Accumulated   |  |              
|                                                                             |                                                         | Common Stock |            | Additional |  | Earnings     |    | Other         |  |              
|                                                                             |                                                         |              |            | Paid-In    |  | (Accumulated |    | Comprehensive |  |              
|                                                                             |                                                         | Shares       |            | Amount     |  | Capital      |    | Deficit)      |  | Income (Loss) |          | Total
|                                                                             |                                                         |              |            |            |  |              |    |               |  |               |          |      
|Balance at June 30, 2000                                                     |                                                         |              | 75,002,050 |            |  | $            | 75 |               |  | $             | 407,893  |       |  | $ | (384,688 | )       |   | $ | (167 | )   |   | $ | 23,113  |        
|Components of comprehensive loss:                                            |                                                         |              |            |            |  |              |    |               |  |               |          |       |  |   |          |         |   |   |      |     |   |   |         |        
|                                                                             | Foreign currency translation adjustments                |              |            |           |  |              |    |              |  |               |          |      |  |   |          |        |   |   |      | 46  |   |   |         | 46      |  
|                                                                             | Net loss                                                |              |            |           |  |              |    |              |  |               |          |      |  |   |          | (11,469 | ) |   |      |    |   |   |         | (11,469 | )
|                                                                             |                                                         |              |            |            |  |              |    |               |  |               |          |       |  |   |          |         |   |   |      |     |   |   |         |        
|Total comprehensive loss                                                     |                                                         |              |           |            |  |              |   |               |  |               |         |       |  |   |         |         |   |   |     |     |   |   | (11,423 | )      
|Issuance of common stock eligible for repurchase
    (note 13)               |                                                         |              | 225,000    |            |  |              |   |               |  |               | 900      |       |  |   |         |         |   |   |     |     |   |   | 900     |        
|Income tax benefit from Old Seagate stock option
    exercises (note 11)     |                                                         |              |           |            |  |              |   |               |  |               | 33       |       |  |   |         |         |   |   |     |     |   |   | 33      |        
|Compensation expense for Old Seagate Stock
    Options (note 9)              |                                                         |              |           |            |  |              |   |               |  |               | 1,851    |       |  |   |         |         |   |   |     |     |   |   | 1,851   |        
|Elimination of accumulated deficit and other
    comprehensive loss (note 2) |                                                         |              |           |            |  |              |   |               |  |               | (389,731 | )     |  |   | 389,640  |         |   |   | 91   |     |   |   |        |        
|Push down adjustments reflecting new bases of net
    assets (note 2)        |                                                         |              |           |            |  |              |   |               |  |               | 20,452   |       |  |   |         |         |   |   |     |     |   |   | 20,452  |        
|Issuance of common stock upon exercise of
    employee stock options         |                                                         |              | 170,865    |            |  |              |   |               |  |               | 683      |       |  |   |         |         |   |   |     |     |   |   | 683     |        
|                                                                             |                                                         |              |            |            |  |              |    |               |  |               |          |       |  |   |          |         |   |   |      |     |   |   |         |        
|Balance at June 29, 2001(note 2)                                             |                                                         |              | 75,397,915 |            |  | $            | 75 |               |  | $             | 42,081   |       |  | $ | (6,517   | )       |   | $ | (30  | )   |   | $ | 35,609  |        
|Components of comprehensive income:                                          |                                                         |              |            |            |  |              |    |               |  |               |          |       |  |   |          |         |   |   |      |     |   |   |         |        
|                                                                             | Foreign currency translation adjustments                |              |            |           |  |              |    |              |  |               |          |      |  |   |          |        |   |   |      | 154 |   |   |         | 154     |  
|                                                                             | Net income                                              |              |            |           |  |              |    |              |  |               |          |      |  |   |          | 12,955  |   |   |      |    |   |   |         | 12,955  |  
|                                                                             |                                                         |              |            |            |  |              |    |               |  |               |          |       |  |   |          |         |   |   |      |     |   |   |         |        
|Total comprehensive income                                                   |                                                         |              |           |            |  |              |   |               |  |               |         |       |  |   |         |         |   |   |     |     |   |   | 13,109  |        
|Elimination of intangible assets, net of deferred
    tax liability (note 2) |                                                         |              |           |            |  |              |   |               |  |               | (9,131   | )     |  |   |         |         |   |   |     |     |   |   | (9,131  | )      
|Issuance of common stock upon exercise of
    employee stock options         |                                                         |              | 466,231    |            |  |              | 1  |               |  |               | 1,865    |       |  |   |         |         |   |   |     |     |   |   | 1,866   |        
|Repurchase of common stock                                                   |                                                         |              | (250       | )          |  |              |   |               |  |               | (1       | )     |  |   |         |         |   |   |     |     |   |   | (1      | )      
|                                                                             |                                                         |              |            |            |  |              |    |               |  |               |          |       |  |   |          |         |   |   |      |     |   |   |         |        
|Balance at June 28, 2002                                                     |                                                         |              | 75,863,896 |            |  | $            | 76 |               |  | $             | 34,814   |       |  | $ | 6,438    |         |   | $ | 124  |     |   | $ | 41,452  |        
|Components of comprehensive income:                                          |                                                         |              |            |            |  |              |    |               |  |               |          |       |  |   |          |         |   |   |      |     |   |   |         |        
|                                                                             | Foreign currency translation adjustments                |              |            |           |  |              |    |              |  |               |          |      |  |   |          |        |   |   |      | (88 | ) |   |         | (88     | )
|                                                                             | Unrealized loss on derivative financial
    instruments |              |            |           |  |              |    |              |  |               |          |      |  |   |          |        |   |   |      | (20 | ) |   |         | (20     | )
|                                                                             | Net income                                              |              |            |           |  |              |    |              |  |               |          |      |  |   |          | 33,455  |   |   |      |    |   |   |         | 33,455  |  
|                                                                             |                                                         |              |            |            |  |              |    |               |  |               |          |       |  |   |          |         |   |   |      |     |   |   |         |        
|Total comprehensive income                                                   |                                                         |              |           |            |  |              |   |               |  |               |         |       |  |   |         |         |   |   |     |     |   |   | 33,347  |        
|Stock-based compensation                                                     |                                                         |              |           |            |  |              |   |               |  |               | 41       |       |  |   |         |         |   |   |     |     |   |   | 41      |        
|Issuance of common stock upon exercise of
    employee stock options         |                                                         |              | 227,685    |            |  |              |   |               |  |               | 916      |       |  |   |         |         |   |   |     |     |   |   | 916     |        
|                                                                             |                                                         |              |            |            |  |              |    |               |  |               |          |       |  |   |          |         |   |   |      |     |   |   |         |        
|Balance at June 27, 2003                                                     |                                                         |              | 76,091,581 |            |  | $            | 76 |               |  | $             | 35,771   |       |  | $ | 39,893   |         |   | $ | 16   |     |   | $ | 75,756  |        
|                                                                             |                                                         |              |            |            |  |              |    |               |  |               |          |       |  |   |          |         |   |   |      |     |   |   |         |        

See accompanying notes.

F-5



---



##### 



CRYSTAL DECISIONS, INC.

CONSOLIDATED STATEMENTS OF CASH
FLOWS

(In thousands)


|                                                                                                           |                                                                                           |                                                         |         |          |        |          |        |         |        |   |         |         |         |  
|---------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------- | ------------------------------------------------------- | ------- | -------- | ------ | -------- | ------ | ------- | ------ | - | ------- | ------- | ------- | -
|                                                                                                           |                                                                                           |                                                        
|                                                                                                           |                                                                                           | Fiscal Years Ended                                     
|                                                                                                           |                                                                                           |                                                        
|                                                                                                           |                                                                                           | June 29,                                                |         | June 28, |        | June 27,
|                                                                                                           |                                                                                           | 2001                                                    |         | 2002     |        | 2003    
|                                                                                                           |                                                                                           |                                                         |         |          |        |         
|                                                                                                           |                                                                                           | (note                                                   |         |          |        |         
|                                                                                                           |                                                                                           | 2)                                                      |         |          |        |         
|Operating activities                                                                                       |                                                                                           |                                                         |         |          |        |          |        |         |        |   |         |        
|Net income (loss)                                                                                          |                                                                                           | $                                                       | (11,469 | )        |        | $        | 12,955 |         |        | $ | 33,455  |        
|Adjustments to reconcile net income
    (loss) to net cash provided by (used in) operating
    activities: |                                                                                           |                                                         |         |          |        |          |        |         |        |   |         |        
|                                                                                                           | Depreciation and amortization of property and
    equipment                               |                                                         |         | 4,373    |        |          |        | 5,241   |        |   |         | 9,082   |        
|                                                                                                           | Amortization of goodwill and other intangible
    assets including developed technologies |                                                         |         | 5,073    |        |          |        | 7,436   |        |   |         |        |        
|                                                                                                           | Amortization of other non-current assets                                                  |                                                         |         |         |        |          |        |        |        |   |         | 1,700   |        
|                                                                                                           | Bad debt expense and other reserves                                                       |                                                         |         | 773      |        |          |        | 32      |        |   |         | 682     |        
|                                                                                                           | Deferred income taxes expense (recovery)
    (note 11)                                    |                                                         |         | 1,529    |        |          |        | (2,314  | )      |   |         | (9,839  | )      
|                                                                                                           | Stock based compensation expense on Old Seagate
    exchange of shares (note 9)           |                                                         |         | 1,851    |        |          |        |        |        |   |         |        |        
|                                                                                                           | Write-off of in-process research and development
    (note 2)                             |                                                         |         | 7,073    |        |          |        |        |        |   |         |        |        
|Changes in operating assets and liabilities:                                                               |                                                                                           |                                                         |         |          |        |          |        |         |        |   |         |        
|                                                                                                           | Accounts receivable                                                                       |                                                         |         | (13,465  | )      |          |        | (10,948 | )      |   |         | (11,854 | )      
|                                                                                                           | Income taxes receivable                                                                   |                                                         |         | 1,868    |        |          |        | 5,119   |        |   |         | 733     |        
|                                                                                                           | Income taxes receivable from Old Seagate (note 11)                                        |                                                         |         | (3,978   | )      |          |        |        |        |   |         |        |        
|                                                                                                           | Inventories                                                                               |                                                         |         | (51      | )      |          |        | 118     |        |   |         | 92      |        
|                                                                                                           | Prepaid and other current assets                                                          |                                                         |         | 918      |        |          |        | (944    | )      |   |         | (4,684  | )      
|                                                                                                           | Accounts payable                                                                          |                                                         |         | 1,079    |        |          |        | 2,257   |        |   |         | 4,699   |        
|                                                                                                           | Accrued employee compensation                                                             |                                                         |         | 2,674    |        |          |        | 4,408   |        |   |         | 7,146   |        
|                                                                                                           | Accrued expenses                                                                          |                                                         |         | (237     | )      |          |        | (6      | )      |   |         | 3,295   |        
|                                                                                                           | Deferred revenues                                                                         |                                                         |         | 10,110   |        |          |        | 12,653  |        |   |         | 9,101   |        
|                                                                                                           | Income taxes payable                                                                      |                                                         |         | 4,916    |        |          |        | 5,062   |        |   |         | 13,420  |        
|                                                                                                           |                                                                                           |                                                         |         |          |        |          |        |         |        |   |         |        
|                                                                                                           |                                                                                           | Net cash provided by operating activities               |         |          | 13,037 |          |        |         | 41,069 |   |         |         | 57,028  |  
|                                                                                                           |                                                                                           |                                                         |         |          |        |          |        |         |        |   |         |        
|Investing activities                                                                                       |                                                                                           |                                                         |         |          |        |          |        |         |        |   |         |        
|Purchases of property and equipment                                                                        |                                                                                           |                                                         | (9,594  | )        |        |          | (9,877 | )       |        |   | (19,377 | )      
|Purchases of short-term investments                                                                        |                                                                                           |                                                         |        |          |        |          |       |         |        |   | (14,157 | )      
|Maturity of short-term investments                                                                         |                                                                                           |                                                         |        |          |        |          |       |         |        |   | 9,265   |        
|Purchase of long-term investments                                                                          |                                                                                           |                                                         |        |          |        |          |       |         |        |   | (3,269  | )      
|                                                                                                           |                                                                                           |                                                         |         |          |        |          |        |         |        |   |         |        
|                                                                                                           |                                                                                           | Net cash used in investing activities                   |         |          | (9,594 | )        |        |         | (9,877 | ) |         |         | (27,538 | )
|                                                                                                           |                                                                                           |                                                         |         |          |        |          |        |         |        |   |         |        
|Financing activities                                                                                       |                                                                                           |                                                         |         |          |        |          |        |         |        |   |         |        
|Issuance of common stock and common stock subject
    to repurchase                                        |                                                                                           |                                                         | 1,583   |          |        |          | 1,865  |         |        |   | 916     |        
|Deposit to secure overdraft credit facility                                                                |                                                                                           |                                                         |        |          |        |          |       |         |        |   | (2,019  | )      
|Net repayments to Seagate Technology
    (note 14)                                                         |                                                                                           |                                                         | (4,773  | )        |        |          | (871   | )       |        |   |        |        
|Payment from Seagate Technology on intercompany
    revolving loan receivable (note 14)                    |                                                                                           |                                                         | 31,000  |          |        |          | 4,300  |         |        |   |        |        
|                                                                                                           |                                                                                           |                                                         |         |          |        |          |        |         |        |   |         |        
|                                                                                                           |                                                                                           | Net cash provided by (used in) financing
    activities |         |          | 27,810 |          |        |         | 5,294  |   |         |         | (1,103  | )
|Effect of foreign exchange rates on cash and cash
    equivalents                                          |                                                                                           |                                                         | (495    | )        |        |          | 586    |         |        |   | (15     | )      
|                                                                                                           |                                                                                           |                                                         |         |          |        |          |        |         |        |   |         |        
|Net increase in cash and cash equivalents                                                                  |                                                                                           |                                                         | 30,758  |          |        |          | 37,072 |         |        |   | 28,372  |        
|Cash and cash equivalents at the beginning of the
    period                                               |                                                                                           |                                                         | 3,621   |          |        |          | 34,379 |         |        |   | 71,451  |        
|                                                                                                           |                                                                                           |                                                         |         |          |        |          |        |         |        |   |         |        
|Cash and cash equivalents at the end of the period                                                         |                                                                                           | $                                                       | 34,379  |          |        | $        | 71,451 |         |        | $ | 99,823  |        
|                                                                                                           |                                                                                           |                                                         |         |          |        |          |        |         |        |   |         |        
|Supplemental cash flow information:                                                                        |                                                                                           |                                                         |         |          |        |          |        |         |        |   |         |        
|Cash received for interest income                                                                          |                                                                                           | $                                                       | 2,952   |          |        | $        | 1,780  |         |        | $ | 1,235   |        
|Cash paid for interest expense                                                                             |                                                                                           | $                                                       | 1,437   |          |        | $        | 57     |         |        | $ | 24      |        
|Cash paid (received) for income taxes, net
    of refunds                                                  |                                                                                           | $                                                       | (615    | )        |        | $        | (5,374 | )       |        | $ | 7,342   |        

See accompanying notes.

F-6



---



##### 



CRYSTAL DECISIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS



|   |                                                                               
|-- | ------------------------------------------------------------------------------
|1. | Description of Business, Development of
    Business and Basis of Presentation



| |                        
| | -----------------------
| | Description of Business

Crystal Decisions, Inc. (Crystal
Decisions or the Company) provides business
intelligence software and services that enable the effective use
and management of information within and among organizations.
Crystal Decisions develops, markets and supports products that
allow organizations of all sizes to access data from disparate
systems, create useful, interactive information from that data
through analysis and reporting and deliver that information to
users. Crystal Decisions is incorporated in Delaware and
headquartered in Palo Alto, California.

While Crystal Decisions primary market is
North America, the Company has over 30 offices and
operations in 10 countries, through which the Company markets
and distributes its products. The Company has significant
operations and certain administrative functions in Vancouver,
Canada. The Companys products are sold through a direct
sales force and certain indirect sales channels, such as
distributors and original equipment manufacturers
(OEMs).

Crystal Decisions is a majority owned subsidiary
of Seagate Software (Cayman) Holdings Corporation, a Delaware
corporation, which is a wholly owned subsidiary of New SAC, a
Cayman Islands limited corporation (New SAC), which
is also the majority shareholder of Seagate Technology
(Seagate Technology), whose predecessor was Seagate
Technology, Inc. (Old Seagate). Prior to
November 22, 2000, the Company was a majority owned
subsidiary of Seagate Software Holdings, Inc. (Seagate
Software Holdings, formerly known as Seagate Software,
Inc.), a Delaware corporation and wholly owned subsidiary of Old
Seagate.

The minority interests in the Companys
capital stock amounted to approximately 13.0%, 16.1% and 20.1%
on a fully converted basis as of June 29, 2001,
June 28, 2002 and June 27, 2003, respectively. These
minority interests are comprised of the Companys
outstanding common stock held by current and former employees
and nonemployee directors of the Company, as well as the
outstanding unexercised options granted to purchase the
Companys common stock.

New SAC is owned by a group of investors
including affiliates of Silver Lake Partners, Texas Pacific
Group, August Capital, J.P. Morgan Partners, LLC,
investment partnership affiliates of Goldman, Sachs &
Co. and certain individuals, including members of the
Companys Board of Directors.



| |                        
| | -----------------------
| | Development of Business

Seagate Software Holdings commenced operations in
May 1994 when Old Seagate acquired Crystal Computer Services,
Inc., a company engaged in developing and marketing report
writing software.

Prior to May 28, 1999, Seagate Software
Holdings comprised two business units, the Information
Management Group business (IMG business) and the
Network Storage and Management Group business (NSMG
business). The NSMG business developed and marketed
software products and provided related services enabling
information technology professionals to manage distributed
network resources and to secure and protect enterprise data. On
May 28, 1999, Seagate Software Holdings contributed its
NSMG business to VERITAS Software Corporation
(VERITAS) in exchange for VERITAS common stock.

On August 23, 1999, Crystal Decisions
(formerly Seagate Software Information Management Group
Holdings, Inc.) was formed specifically to acquire the operating
assets and

F-7



---



##### 



CRYSTAL DECISIONS, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS

(continued)


assume the liabilities of the IMG business. To
incorporate, Crystal Decisions issued 1,000 shares of its
common stock to Seagate Software Holdings for aggregate
consideration of $1,000.

On October 20, 1999, Old Seagate acquired
all outstanding shares and options of Seagate Software Holdings.
The acquisition was completed through the merger of Seagate
Daylight Merger Corp., a wholly owned subsidiary of Old Seagate,
with and into Seagate Software Holdings. On the closing of the
merger, Seagate Software Holdings became a wholly owned
subsidiary of Old Seagate. On November 16, 1999, Seagate
Software Holdings contributed the operating assets, liabilities
and interests in subsidiaries of its IMG business to Crystal
Decisions. As consideration, Crystal Decisions issued
75,000,000 shares of its common stock to Seagate Software
Holdings. Seagate Software Holdings retained the shares of
VERITAS common stock and other non-operating assets. On
November 22, 2000, 75,001,000 shares, or 99.7% of the
then outstanding common stock, of Crystal Decisions was
purchased by New SAC, through Seagate Software (Cayman) Holdings
and resulted in a change in control of Crystal Decisions as
described in note 2.



| |                      
| | ---------------------
| | Basis of Presentation

The consolidated financial statements of Crystal
Decisions have been prepared by the Company in accordance with
United States generally accepted accounting principles
(GAAP). The accompanying financial statements
present the consolidated financial position of Crystal Decisions
and its wholly owned subsidiaries after elimination of
intercompany transactions and balances. These consolidated
financial statements have been prepared using the historical
cost basis of accounting adjusted for the reorganization of the
IMG business on November 16, 1999 and the application for
push down accounting at November 22, 2000 as the result of
the change in control of Crystal Decisions.

Under rules and regulations of the Securities and
Exchange Commission, because more than 95% of Crystal Decisions
was acquired on November 22, 2000 and a change of control
occurred as described in note 2, Crystal Decisions restated
all its assets and liabilities in the financial statements as of
November 22, 2000 on a push down accounting
basis. Accordingly, results of operations prior to
November 22, 2000 do not reflect these adjustments.

Crystal Decisions operates and reports financial
results on a fiscal year of 52 or 53 weeks ending on the
Friday closest to June 30. Fiscal 2001 ended on
June 29, 2001 (fiscal 2001), fiscal 2002 ended
on June 28, 2002 (fiscal 2002) and fiscal 2003
ended on June 27, 2003 (fiscal 2003). Fiscal
2001, 2002 and 2003 were each comprised of 52 weeks.

Certain comparative period figures have been
reclassified to conform to the current basis of presentation.
Such reclassifications had no effect on net income (loss) as
previously reported.



|   |                                                 
|-- | ------------------------------------------------
|2. | Change in Control of Crystal Decisions,
    Inc.

At November 22, 2000, as the result of the
completion of transactions under a stock purchase agreement (the
Stock Purchase Agreement) Crystal Decisions became a
majority owned subsidiary of New SAC. New SAC indirectly
acquired 75,001,000 shares, or 99.7% of Crystal Decisions
outstanding common stock on November 22, 2000. The Stock
Purchase Agreement was entered into on March 29, 2000 by
Old Seagate, Seagate Software Holdings and Suez Acquisition
Company (Cayman) Limited (Suez Acquisition Company),
an entity affiliated with, among others, Silver Lake Partners
L.P. and Texas Pacific Group. Suez Acquisition Company was a
limited corporation organized under the laws of the Cayman
Islands and was

F-8



---



##### 



CRYSTAL DECISIONS, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS

(continued)


formed solely for the purpose of entering into
the Stock Purchase Agreement and related acquisitions with Old
Seagate and Seagate Software Holdings. Prior to the closing of
the transactions under the Stock Purchase Agreement, Suez
Acquisition Company assigned all of its rights under the Stock
Purchase Agreement to New SAC, an exempted limited liability
company organized under the laws of the Cayman Islands.

Upon closing of the transactions under the Stock
Purchase Agreement, on November 22, 2000, New SAC purchased
substantially all of the operating assets of Old Seagate and its
consolidated subsidiaries for cash and borrowings of
$1.84 billion, including transactions costs of
$25 million. This included Old Seagates rigid disc
drive, storage area network, removable tape storage solutions
businesses and operations, Crystal Decisions common stock
and certain cash balances, but excluded the approximately
128 million shares of VERITAS common stock then held by
Seagate Software Holdings and certain of Old Seagates
equity investments. In addition, the wholly owned subsidiaries
of New SAC assumed substantially all of the operating
liabilities of Old Seagate, Seagate Software Holdings and their
consolidated subsidiaries. New SAC also acquired certain
strategic equity investments in various companies owned by Old
Seagate. This transaction is referred to hereafter as the New
SAC Transaction.



| |                                                                                                              
| | -------------------------------------------------------------------------------------------------------------
| | Allocation of Purchase Price to Crystal
    Decisions Pursuant to the Application of Push Down
    Accounting

The New SAC Transaction constituted a purchase of
Old Seagate and resulted in a change in control of Crystal
Decisions. Under purchase accounting rules, the net purchase
price under this transaction was allocated to the assets and
liabilities of Old Seagate and its subsidiaries, including
Crystal Decisions, based on their fair values at the date of the
closing of the New SAC Transaction. The accounting for the
purchase transaction has been pushed down from New
SAC to Crystal Decisions consolidated financial statements.

The table below summarizes the $41.5 million
net purchase price allocation to Crystal Decisions of the
tangible and intangible assets acquired based on their fair
values. The fair values of the tangible and intangible assets,
including in-process research and development, were determined
based upon independent appraisals provided by New SAC. The net
purchase price allocation to Crystal Decisions exceeded the book
value of the net assets acquired by $20.5 million. This
excess of $20.5 million was recorded as an increase to
additional paid-in capital to reflect the revaluation of the net
tangible and intangible assets acquired.

|                                                |                                        |                  |       |        |        | 
|----------------------------------------------- | -------------------------------------- | ---------------- | ----- | ------ | ------ | 
|                                                |                                        | Net Purchase    
|Purchase Price Allocation for Crystal Decisions |                                        | Price Allocation
|                                                |                                        |                 
|                                                |                                        | (in thousands)  
|Net current assets acquired                     |                                        | $                | 9,138 |       
|Tangible long-lived assets acquired             |                                        |                  | 5,130 |       
|Intangible assets acquired:                     |                                        |                  |       |       
|                                                | Developed technologies(1)              |                  |       | 15,234 |       
|                                                | Assembled work force(2)                |                  |       | 7,073  |       
|                                                | In-process research and development(3) |                  |       | 7,073  |       
|                                                | Deferred tax liability                 |                  |       | (2,126 | )     
|                                                |                                        |                  |       |       
|                                                |                                        | Total            |       | $      | 41,522 | 
|                                                |                                        |                  |       |       



---



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | The value of the developed technologies was
    estimated by discounting the expected future cash flows
    attributable to all existing technology, taking into account
    risks related to the characteristics and applications of the
    technology, existing and future markets and assessments of the
    life cycle stage of the technology. The analysis resulted in a
    valuation for developed technologies, which had reached
    technological feasibility and therefore was capable of

F-9



---



##### 



CRYSTAL DECISIONS, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS

(continued)




|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    | being capitalized. The developed technologies
    were amortized on the straight-line basis over its estimated
    useful life (36 months) and the amortization was included
    in cost of revenues.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   
|(2) | The estimated value of the assembled work force
    was determined by estimating the costs to replace the existing
    employees, including the recruiting, hiring and training costs
    for each category of employee. The assembled workforce was
    amortized on a straight-line basis over its estimated useful
    life (36 months) and the amortization was included in
    amortization of goodwill and other intangible assets.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   
|(3) | As the basis for identifying the in-process
    research and development (IPR&D), Crystal
    Decisions developmental projects were evaluated in the
    context of Financial Accounting Standards Board
    Interpretation 4 and paragraph 11 of Statement of
    Financial Accounting Standards (SFAS) No. 2
    Accounting for Research and Development Costs(SFAS 2) and SFAS No. 86,
    Accounting for the Costs of Computer Software to be
    Sold, Leased, or Otherwise Marketed
    (SFAS 86). At the valuation date, the Company
    was in the process of developing three next generation versions
    of existing technologies which were estimated to be
    approximately 85%, 70% and 75% complete based on total man-hours
    and absolute time. The value of the IPR&D was determined by
    New SAC by (a) obtaining management estimates of future
    revenues and operating profits associated with existing
    development projects (b) projecting the cash flows and
    costs to completion of the underlying technologies and resultant
    future revenues to be earned on commercialization of products
    and (c) discounting these cash flows to their net present
    value. At November 23, 2000, while the Company expected
    that the IPR&D would be successfully developed, the entire
    amount was charged to expense because related technologies had
    not reached technological feasibility and they had no
    alternative future use. The nature of the efforts required to
    develop the IPR&D into commercially viable products
    principally related to the completion of all planning,
    designing, prototyping, verification and testing activities that
    are necessary to establish that the product can be produced to
    meet its design specifications, including functions, features
    and technical performance requirements. The Company completed
    these projects in the fourth quarter of fiscal 2001 with all
    expenses related to the period of development charged to
    research and development expense.

The purchase price paid by New SAC under the
stock purchase agreement was fixed and no contingencies were
identified that would have resulted in a change in the overall
purchase price. However, in allocating the purchase price, New
SAC recorded a full valuation allowance against deferred tax
assets in accordance with Statement of Financial Accounting
Standards No. 109 Accounting for Income
Taxes, or SFAS 109. The deferred tax assets
subject to this valuation allowance were based on the excess of
tax bases over the fair values of acquired property, plant and
equipment and liabilities assumed, for which New SAC expected to
receive tax deductions in U.S. federal and state returns in
future periods based on their ability to generate taxable income
in the United States.

As of June 28, 2002, the Company reduced to
zero the net carrying values of the intangible assets pushed
down to the financial statements in connection with the New SAC
Transaction. The reduction in the recorded intangible assets
resulted from an allocation of the tax benefits recognized by
Old Seagate in its U.S. income tax returns attributable to
acquisition related deferred tax assets in accordance with
SFAS 109. There was no impact on the Companys
valuation allowance. The Companys share of the reduction
in intangibles, net of income taxes, was allocated as follows:

|                                                                   |                                                                         |                   |        |        | 
|------------------------------------------------------------------ | ----------------------------------------------------------------------- | ----------------- | ------ | ------ | 
|                                                                   |                                                                         | Allocated to     
|                                                                   |                                                                         | Crystal Decisions
|                                                                   |                                                                         | at June 28, 2002 
|                                                                   |                                                                         |                  
|                                                                   |                                                                         | (in thousands)   
|Reduction in the net carrying values of developed
    technologies |                                                                         | $                 | 7,194  |       
|Reduction in the net carrying values of assembled
    workforce    |                                                                         |                   | 3,340  |       
|                                                                   |                                                                         |                   |        |       
|                                                                   | Total reduction in intangible assets                                    |                   |        | 10,534 | 
|                                                                   |                                                                         |                   |        |       
|Less deferred tax liability related to intangible
    assets       |                                                                         |                   | (1,403 | )     
|                                                                   |                                                                         |                   |        |       
|                                                                   | Total reduction in intangible assets, net of
    deferred tax liability |                   | $      | 9,131  | 
|                                                                   |                                                                         |                   |        |       

F-10



---



##### 



CRYSTAL DECISIONS, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS

(continued)


As a result of the New SAC Transaction and the
push down accounting, the Companys results of operations
after November 22, 2000, particularly the depreciation and
amortization charges, are not necessarily comparable to the
results of operations prior to that date. The following
summarizes the impact of push down accounting, resulting from
the New SAC Transaction, on the Companys financial
statements for the periods presented:



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Revenues.Deferred
    revenues were reduced by $1.3 million and revenues were
    reduced on a declining basis during the 12 months following
    the New SAC Transaction. Consequently, revenues were lower by
    $1.2 million for fiscal 2001 and $128,000 for fiscal 2002,
    than they would have been had the push down adjustments not
    occurred. There was no impact during fiscal 2003.                                                                                                                                                                               
|
| |  | Depreciation.Long-lived tangible assets were reduced by $4.3 million on
    November 22, 2000. Consequently, depreciation expense
    recorded was $1.5 million less for each of fiscal 2001 and
    2002 and $775,000 less for fiscal 2003, than would have been
    recorded had the push down adjustments not occurred.                                                                                                                                                                                                                                                         
|
| |  | Amortization.Additional amortization expense of $3.3 million and
    $5.6 million for fiscal 2001 and fiscal 2002, respectively,
    was recorded resulting from the incremental fair value of
    intangible assets pushed down to the Companys consolidated
    financial statements on November 22, 2000.                                                                                                                                                                                                                                                                      
|
| |  | Elimination of intangible assets, net of
    deferred taxes.As a result of the
    application of SFAS 109, the net carrying values of the
    intangible assets pushed down to Crystal Decisions
    consolidated financial statements were reduced to zero at
    June 28, 2002 by a charge of $9.1 million against
    additional paid-in capital on the statement of
    stockholders equity. Therefore, commencing in the first
    quarter of fiscal 2003, there was no amortization charged to the
    Companys statement of operations related to intangible
    assets.
|
| |  | In-process research and
    development.During fiscal 2001,
    $7.1 million of in-process research and development costs
    were expensed. There was no similar expense in fiscal 2002 or
    fiscal 2003.                                                                                                                                                                                                                                                                                                                                                                       

F-11



---



##### 



CRYSTAL DECISIONS, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS

(continued)




| |                                                                                      
| | -------------------------------------------------------------------------------------
| | Selected Financial Information for Fiscal
    2001 Pre- and Post- New SAC Transaction

Because the statement of operations, cash flows
and stockholders equity reflect the comprehensive
revaluation of Crystal Decisions assets and liabilities
from November 22, 2000, the following presents the
statement of operations, cash flows and stockholders
equity for the period from July 1, 2000 to
November 22, 2000, which represents the activity before the
New SAC Transaction (Pre-New SAC Transaction), and
the period from November 23, 2000 to June 29, 2001,
which represents that activity after the New SAC Transaction
(Post-New SAC Transaction).

CRYSTAL DECISIONS, INC.

CONDENSED CONSOLIDATED STATEMENT OF
OPERATIONS


FOR THE FISCAL YEAR ENDED JUNE 29, 2001


(In thousands)


|                                          |                                                          |                          |        |              |        |                   |        |        |         |   |         |         |         | 
|----------------------------------------- | -------------------------------------------------------- | ------------------------ | ------ | ------------ | ------ | ----------------- | ------ | ------ | ------- | - | ------- | ------- | ------- | 
|                                          |                                                          | Pre-New SAC              |        | Post-New SAC |        | Fiscal Year Ended
|                                          |                                                          | Transaction              |        | Transaction  |        | June 29, 2001    
|                                          |                                                          |                          |        |              |        |                  
|Revenues:                                 |                                                          |                          |        |              |        |                   |        |        |         |   |         |        
|                                          | Licensing                                                |                          | $      | 34,239       |        |                   | $      | 72,789 |         |   | $       | 107,028 |        
|                                          | Maintenance, support and services                        |                          |        | 23,219       |        |                   |        | 37,475 |         |   |         | 60,694  |        
|                                          |                                                          |                          |        |              |        |                   |        |        |         |   |         |        
|                                          |                                                          | Total revenues           |        |              | 57,458 |                   |        |        | 110,264 |   |         |         | 167,722 | 
|Cost of revenues:                         |                                                          |                          |        |              |        |                   |        |        |         |   |         |        
|                                          | Licensing                                                |                          |        | 1,656        |        |                   |        | 4,084  |         |   |         | 5,740   |        
|                                          | Maintenance, support and services                        |                          |        | 17,048       |        |                   |        | 24,712 |         |   |         | 41,760  |        
|                                          | Amortization of developed technologies                   |                          |        | 88           |        |                   |        | 2,962  |         |   |         | 3,050   |        
|                                          |                                                          |                          |        |              |        |                   |        |        |         |   |         |        
|                                          |                                                          | Total cost of revenues   |        |              | 18,792 |                   |        |        | 31,758  |   |         |         | 50,550  | 
|                                          |                                                          |                          |        |              |        |                   |        |        |         |   |         |        
|Gross profit                              |                                                          |                          | 38,666 |              |        |                   | 78,506 |        |         |   | 117,172 |        
|Operating expenses:                       |                                                          |                          |        |              |        |                   |        |        |         |   |         |        
|                                          | Sales and marketing                                      |                          |        | 28,111       |        |                   |        | 45,777 |         |   |         | 73,888  |        
|                                          | Research and development                                 |                          |        | 11,443       |        |                   |        | 17,793 |         |   |         | 29,236  |        
|                                          | General and administrative                               |                          |        | 5,802        |        |                   |        | 9,663  |         |   |         | 15,465  |        
|                                          | Amortization of goodwill and other intangible
    assets |                          |        | 648          |        |                   |        | 1,375  |         |   |         | 2,023   |        
|                                          | Write-off of in-process research and development         |                          |        |             |        |                   |        | 7,073  |         |   |         | 7,073   |        
|                                          | Unusual items                                            |                          |        | 1,851        |        |                   |        |       |         |   |         | 1,851   |        
|                                          | Restructuring costs                                      |                          |        | 559          |        |                   |        | 14     |         |   |         | 573     |        
|                                          |                                                          |                          |        |              |        |                   |        |        |         |   |         |        
|                                          |                                                          | Total operating expenses |        |              | 48,414 |                   |        |        | 81,695  |   |         |         | 130,109 | 
|                                          |                                                          |                          |        |              |        |                   |        |        |         |   |         |        
|Loss from operations                      |                                                          |                          | (9,748 | )            |        |                   | (3,189 | )      |         |   | (12,937 | )      
|Interest and other income (expense), net  |                                                          |                          | 891    |              |        |                   | 1,760  |        |         |   | 2,651   |        
|                                          |                                                          |                          |        |              |        |                   |        |        |         |   |         |        
|Loss before income taxes                  |                                                          |                          | (8,857 | )            |        |                   | (1,429 | )      |         |   | (10,286 | )      
|Provision for (benefit from) income taxes |                                                          |                          | (3,905 | )            |        |                   | 5,088  |        |         |   | 1,183   |        
|                                          |                                                          |                          |        |              |        |                   |        |        |         |   |         |        
|Net loss                                  |                                                          | $                        | (4,952 | )            |        | $                 | (6,517 | )      |         | $ | (11,469 | )      
|                                          |                                                          |                          |        |              |        |                   |        |        |         |   |         |        

F-12



---



##### 



CRYSTAL DECISIONS, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS

(continued)


CRYSTAL DECISIONS, INC.

CONDENSED CONSOLIDATED STATEMENT OF CASH
FLOWS


FOR THE FISCAL YEAR ENDED JUNE 29, 2001


(In thousands)


|                                                                              |                                           |             |        |              |   |                   |        |        |   |   |        |        |  
|----------------------------------------------------------------------------- | ----------------------------------------- | ----------- | ------ | ------------ | - | ----------------- | ------ | ------ | - | - | ------ | ------ | -
|                                                                              |                                           | Pre-New SAC |        | Post-New SAC |   | Fiscal Year Ended
|                                                                              |                                           | Transaction |        | Transaction  |   | June 29, 2001    
|                                                                              |                                           |             |        |              |   |                  
|Net cash provided by operating
    activities                                 |                                           | $           | 2,820  |              |   | $                 | 10,217 |        |   | $ | 13,037 |       
|Investing activities                                                          |                                           |             |        |              |   |                   |        |        |   |   |        |       
|Purchase of property and equipment                                            |                                           |             | (1,901 | )            |   |                   | (7,693 | )      |   |   | (9,594 | )     
|                                                                              |                                           |             |        |              |   |                   |        |        |   |   |        |       
|                                                                              | Net cash used in investing activities     |             |        | (1,901       | ) |                   |        | (7,693 | ) |   |        | (9,594 | )
|Financing activities                                                          |                                           |             |        |              |   |                   |        |        |   |   |        |       
|Issuance of common stock and common stock subject
    to repurchase           |                                           |             | 949    |              |   |                   | 634    |        |   |   | 1,583  |       
|Net (repayments to) Seagate Technology                                        |                                           |             | (180   | )            |   |                   | (4,593 | )      |   |   | (4,773 | )     
|Payment from Seagate Technology on intercompany
    revolving loan receivable |                                           |             |       |              |   |                   | 31,000 |        |   |   | 31,000 |       
|                                                                              |                                           |             |        |              |   |                   |        |        |   |   |        |       
|                                                                              | Net cash provided by financing activities |             |        | 769          |   |                   |        | 27,041 |   |   |        | 27,810 |  
|Effect of foreign exchange rate changes on cash
    and cash equivalents      |                                           |             | (394   | )            |   |                   | (101   | )      |   |   | (495   | )     
|                                                                              |                                           |             |        |              |   |                   |        |        |   |   |        |       
|Increase in cash and cash equivalents                                         |                                           |             | 1,294  |              |   |                   | 29,464 |        |   |   | 30,758 |       
|Cash and cash equivalents at the beginning of the
    period                  |                                           |             | 3,621  |              |   |                   | 4,915  |        |   |   | 3,621  |       
|                                                                              |                                           |             |        |              |   |                   |        |        |   |   |        |       
|Cash and cash equivalents at the end of the period                            |                                           | $           | 4,915  |              |   | $                 | 34,379 |        |   | $ | 34,379 |       
|                                                                              |                                           |             |        |              |   |                   |        |        |   |   |        |       

F-13



---



##### 



CRYSTAL DECISIONS, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS

(continued)


CRYSTAL DECISIONS, INC.

CONDENSED CONSOLIDATED STATEMENT OF
STOCKHOLDERS EQUITY


FOR THE FISCAL YEAR ENDED JUNE 29, 2001


(In thousands, except share data)


|                                                                     |  |              |            |            |  |             |    |               |  |               |          |       |  |   |          |   |  |   |      |   |  |   |        |  
|-------------------------------------------------------------------- |  | ------------ | ---------- | ---------- |  | ----------- | -- | ------------- |  | ------------- | -------- | ----- |  | - | -------- | - |  | - | ---- | - |  | - | ------ | -
|                                                                     |  |              |            |            |  |             |    | Accumulated   |  |              
|                                                                     |  | Common Stock |            | Additional |  |             |    | Other         |  |              
|                                                                     |  |              |            | Paid-In    |  | Accumulated |    | Comprehensive |  |              
|                                                                     |  | Shares       |            | Amount     |  | Capital     |    | Deficit       |  | Income (Loss) |          | Total
|                                                                     |  |              |            |            |  |             |    |               |  |               |          |      
|Balance at June 30, 2000                                             |  |              | 75,002,050 |            |  | $           | 75 |               |  | $             | 407,893  |       |  | $ | (384,688 | ) |  | $ | (167 | ) |  | $ | 23,113 |  
|Components of comprehensive loss:                                    |  |              |            |            |  |             |    |               |  |               |          |       |  |   |          |   |  |   |      |   |  |   |        |  
|Foreign currency translation adjustments                             |  |              |           |            |  |             |   |               |  |               |         |       |  |   |         |   |  |   | 76   |   |  |   | 76     |  
|Net loss to November 22, 2000                                        |  |              |           |            |  |             |   |               |  |               |         |       |  |   | (4,952   | ) |  |   |     |   |  |   | (4,952 | )
|                                                                     |  |              |            |            |  |             |    |               |  |               |          |       |  |   |          |   |  |   |      |   |  |   |        |  
|Total comprehensive loss                                             |  |              |           |            |  |             |   |               |  |               |         |       |  |   |         |   |  |   |     |   |  |   | (4,876 | )
|Issuance of common stock eligible for repurchase                     |  |              | 225,000    |            |  |             |   |               |  |               | 900      |       |  |   |         |   |  |   |     |   |  |   | 900    |  
|Issuance of common stock upon exercise of
    employee stock options |  |              | 12,241     |            |  |             |   |               |  |               | 49       |       |  |   |         |   |  |   |     |   |  |   | 49     |  
|Income tax benefit from Old Seagate stock option
    exercises       |  |              |           |            |  |             |   |               |  |               | 33       |       |  |   |         |   |  |   |     |   |  |   | 33     |  
|Compensation expense for Old Seagate stock options                   |  |              |           |            |  |             |   |               |  |               | 1,851    |       |  |   |         |   |  |   |     |   |  |   | 1,851  |  
|                                                                     |  |              |            |            |  |             |    |               |  |               |          |       |  |   |          |   |  |   |      |   |  |   |        |  
|Balance at November 22, 2000                                         |  |              | 75,239,291 |            |  | $           | 75 |               |  | $             | 410,726  |       |  | $ | (389,640 | ) |  | $ | (91  | ) |  | $ | 21,070 |  
|Elimination of accumulated deficit and other
    comprehensive loss  |  |              |           |            |  |             |   |               |  |               | (389,731 | )     |  |   | 389,640  |   |  |   | 91   |   |  |   |       |  
|Push down adjustments reflecting new bases of net
    assets         |  |              |           |            |  |             |   |               |  |               | 20,452   |       |  |   |         |   |  |   |     |   |  |   | 20,452 |  
|                                                                     |  |              |            |            |  |             |    |               |  |               |          |       |  |   |          |   |  |   |      |   |  |   |        |  
|Adjusted balance at November 22,
    2000                            |  |              | 75,239,291 |            |  | $           | 75 |               |  | $             | 41,447   |       |  | $ |         |   |  | $ |     |   |  | $ | 41,522 |  
|Components of comprehensive loss:                                    |  |              |            |            |  |             |    |               |  |               |          |       |  |   |          |   |  |   |      |   |  |   |        |  
|Foreign currency translation adjustments                             |  |              |           |            |  |             |   |               |  |               |         |       |  |   |         |   |  |   | (30  | ) |  |   | (30    | )
|Net loss                                                             |  |              |           |            |  |             |   |               |  |               |         |       |  |   | (6,517   | ) |  |   |     |   |  |   | (6,517 | )
|                                                                     |  |              |            |            |  |             |    |               |  |               |          |       |  |   |          |   |  |   |      |   |  |   |        |  
|Total comprehensive loss                                             |  |              |           |            |  |             |   |               |  |               |         |       |  |   |         |   |  |   |     |   |  |   | (6,547 | )
|Issuance of common stock upon exercise of
    employee stock options |  |              | 158,624    |            |  |             |   |               |  |               | 634      |       |  |   |         |   |  |   |     |   |  |   | 634    |  
|                                                                     |  |              |            |            |  |             |    |               |  |               |          |       |  |   |          |   |  |   |      |   |  |   |        |  
|Balance at June 29, 2001                                             |  |              | 75,397,915 |            |  | $           | 75 |               |  | $             | 42,081   |       |  | $ | (6,517   | ) |  | $ | (30  | ) |  | $ | 35,609 |  
|                                                                     |  |              |            |            |  |             |    |               |  |               |          |       |  |   |          |   |  |   |      |   |  |   |        |  



| |                                                 
| | ------------------------------------------------
| | VERITAS Merger and Indemnification
    Agreement

Immediately following the closing of the
transactions under the Stock Purchase Agreement, and under the
terms of the agreement and plan of merger and reorganization,
VERITAS acquired the remainder of Old Seagate by way of the
merger of a wholly owned subsidiary of VERITAS with and into Old
Seagate, with Old Seagate becoming a wholly owned subsidiary of
VERITAS. At the time of the merger, Old Seagates assets
included a specified amount of cash, an investment in VERITAS,
and certain specified investments and liabilities. This
transaction is referred to hereafter as the VERITAS merger.

In connection with the New SAC Transaction, New
SAC and its subsidiaries, including Crystal Decisions, entered
into an Indemnification Agreement on March 29, 2000 with
VERITAS under which the parties agreed to assume and indemnify
VERITAS and its affiliates for substantially all liabilities
arising in connection with Old Seagates and Crystal
Decisions operating assets and for selected tax liabilities
indefinitely. In return, VERITAS, Old Seagate and their
affiliates agreed to indemnify New SAC and its consolidated
subsidiaries, including Crystal Decisions, for certain
liabilities, including all taxes of Old Seagate for which New
SAC and its

F-14



---



##### 



CRYSTAL DECISIONS, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS

(continued)


subsidiaries are not obligated to indemnify
VERITAS and its affiliates. VERITAS deposited $150 million
into an escrow account, of which the full amount remains as of
June 27, 2003. This amount may be withdrawn by New SAC to
satisfy these liabilities indemnified by VERITAS, including
those of Crystal Decisions and its subsidiaries. To the extent
that any part of the $150 million is not utilized to
satisfy these liabilities, the monies will be paid to the former
stockholders of Old Seagate. The terms of the indemnification
provide for no limitation to the maximum potential future
payments, if any. Accordingly, the maximum potential future
payments, if any, cannot be reasonably estimated.

In July 2002, Crystal Decisions entered into a
Reimbursement Agreement with Seagate Technology and its
affiliates, which allocates the respective liabilities and
obligations of New SAC and its affiliates including the Company,
under the Indemnification Agreement. Under the Reimbursement
Agreement, if Old Seagate and its affiliates, including Crystal
Decisions, became obligated to indemnify VERITAS or Old Seagate
under the Indemnification Agreement, Seagate Technology HDD
Holdings will be responsible for the first $125 million of
tax liabilities. Any amount in excess of the first $125 million
will be allocated on a pro rata basis in accordance with the
portion of the purchase price allocated to each entity in
connection with the New SAC Transaction among Seagate Technology
HDD Holdings, Seagate Technology SAN Holdings, Certance Holdings
and the Companys direct majority shareholder, Seagate
Software (Cayman) Holdings. Except for Seagate Software (Cayman)
Holdings, these entities were either directly or indirectly held
subsidiaries of Old Seagate. The portion of the purchase price
allocated to Seagate Software (Cayman) Holdings in connection
with the New SAC Transaction for United States federal income
tax purposes was 7.8%. For indemnification obligations other
than tax liabilities, the agreement provides that the
responsible entity will reimburse any entity that satisfies that
obligation on its behalf.

In connection with the agreement and plan of
merger that Crystal Decisions entered into on July 18, 2003
with Business Objects S.A. (see note 19), Crystal Decisions
agreed to use its reasonable efforts to obtain from VERITAS a
written release from its obligations to indemnify VERITAS for
matters arising prior to the New SAC Transaction.

In addition, on July 18, 2003, New SAC
entered into a letter agreement with Crystal Decisions whereby
New SAC agreed to reimburse Crystal Decisions for any claims
arising prior to March 31, 2006 related to tax matters
under the Reimbursement Agreement or the Indemnification
Agreement. The letter agreement will become effective only upon
the closing of the proposed acquisition of Crystal Decisions by
Business Objects and will not be of any force or effect if the
proposed acquisition is not completed.

3.     Summary of
Significant Accounting Policies



| |                 
| | ----------------
| | Use of Estimates

The preparation of the consolidated financial
statements, in conformity with generally accepted accounting
principles, requires management to make estimates and
assumptions that affect the amounts reported in the consolidated
financial statements and accompanying notes. Estimates are used
for, but are not limited to, allowance for doubtful accounts,
certain reserves, useful lives for equipment and intangible
assets, employee benefits, income taxes and litigation. Actual
results could differ materially from those estimates.

F-15



---



##### 



CRYSTAL DECISIONS, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS

(continued)




| |                        
| | -----------------------
| | Recognition of Revenues

The Company derives revenues from the sale of
licenses for software products and services such as maintenance,
technical support, training and consulting services. Licenses
for software products are sold separately or with services as
part of a bundled arrangement. Maintenance and technical support
contracts are sold with licenses in a bundled arrangement or
sold separately as a contract renewal. Training and consulting
services are provided as part of a bundled arrangement or sold
separately based on a project or time and materials basis.

For each sales transaction, the Company
determines whether evidence of an arrangement exists, delivery
has occurred, the fee is fixed or determinable and collection is
probable. If any of these criteria are not met, recognition of
revenues is deferred until such time as all of the criteria are
met.

In bundled software arrangements that include
rights to multiple software products and/or services, the
Company recognizes revenues using the residual method as
prescribed by the Statement of Position 98-9
Modification of SOP No. 97-2 Software Revenue
Recognition with Respect to Certain Transactions.
Under the residual method, revenues are allocated to the
undelivered elements based on vendor specific objective evidence
of fair value of the undelivered elements and the residual
amount of revenues are allocated to the delivered elements.
Vendor specific objective evidence of the fair value of
maintenance and technical support contracts is based on renewal
rates as determined by the prices paid by the Companys
customers when maintenance is sold separately. Vendor specific
objective evidence of fair value of training and consulting
services is based upon daily rates as determined by the prices
paid by the Companys customers when these services are
sold separately.

For all bundled arrangements, the Company
assesses whether the service elements of the arrangement are
essential to the functionality of the other elements of the
arrangement. When services are considered essential or the
arrangement involves customization or modification of the
software, both the license and service revenues under the
arrangement are recognized under the percentage of completion
method of contract accounting, based on cost of labor inputs.
Expected losses, if any, in respect of consulting services are
accrued once they become known.

For those arrangements for which the Company has
concluded that the service elements are not essential to the
other elements of the arrangement, the Company uses vendor
specific objective evidence of fair value for the service
elements to account for the arrangement using the residual
method, regardless of any separate prices stated within the
contract for each element. Revenues allocable to maintenance and
technical support contracts are recognized ratably over the term
of the respective contracts, which are typically one year.
Maintenance contracts include rights to unspecified software
product enhancements and upgrades when and as the Company makes
them available. Revenues allocable to training and consulting
services are recognized as the services are performed.

For sales to distributors and resellers, revenues
are recognized upon product delivery. The Company reserves an
amount equal to its estimate of all product subject to rights of
return and resale contingencies. Some of the factors that are
considered in determining this estimate include historical
experience, level of inventory in the distribution channels,
nature of the product, fixed or determinable fees and payment
terms. The reserve reduces the revenues and the related
receivables.

For sales to OEMs, revenues are recognized when
the OEM reports sales that have occurred to an end user
customer, provided that collection is probable. Some OEM
arrangements

F-16



---



##### 



CRYSTAL DECISIONS, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS

(continued)


include the payment of an upfront arrangement fee
which is deferred and recognized either ratably over the
contractual period or when the OEM reports sales that have
occurred to an end user customer, in accordance with the
contractual terms. If the Company determines, through royalty
audits or other means, that an OEM did not report revenues
accurately, the Company attempts to reconcile the discrepancies
and, if appropriate, records additional revenues upon resolution.

Deferred revenues represent amounts under license
and service arrangements for which the earnings process has not
been completed. These amounts relate primarily to provision of
maintenance and technical support services with future
deliverables and arrangements where specified customer
acceptance has not yet occurred. Deferred revenues classified as
long-term in nature represent revenues that will not be realized
for more than 12 months after the date of the consolidated
balance sheet.

Effective on the adoption of Emerging Issues Task
Force (EITF) Issue No. 01-14, Income
Statement Characterization of Reimbursements Received for
Out-of-Pocket Expense Incurred
(EITF 01-14), by the Company on
December 29, 2001, the Company began to record
out-of-pocket expense reimbursements as revenues versus a
reduction of costs of revenues incurred. Comparative
consolidated statements of operations have been reclassified.
The adoption of EITF 01-14 has not affected net income
(loss) in any past or current period.



| |                             
| | ----------------------------
| | Foreign Currency Translation

The functional currency of the Company and its
subsidiaries is determined in accordance with
SFAS No. 52, Foreign Currency Translation
(SFAS 52). The Companys reporting
currency is the U.S. dollar. Historically, the functional
currency of a majority of our foreign subsidiaries was
their local currency and, at the end of every period, their
financial statements were translated to the U.S. dollar at
the rates of exchange in effect at the end of the period with
the resulting translation adjustments recorded directly to
accumulated comprehensive income (loss), a separate component of
stockholders equity. Revenues and expenses were translated
at the weighted average monthly rates for the period with any
transaction gains or losses reflected in net income (loss).
Effective March 29, 2003, the Company changed the
functional currency of the remainder of its foreign subsidiaries
from their respective local currency to the U.S. dollar due
to their integration into our U.S. operation. Accordingly,
with the U.S. dollar as the functional currency for the
subsidiaries, foreign currency monetary assets and liabilities
are remeasured into the U.S. dollar at end-of-period
exchange rates with non-monetary assets and liabilities
remeasured at historical exchange rates. Revenue and expenses
are remeasured at average exchange rates in effect during each
period, except for those expenses related to non-monetary assets
and liabilities, which are remeasured at historical exchange
rates. Gains or losses from foreign currency remeasurement are
included in net income or loss. The foreign exchange loss
recorded in income for fiscal 2003 was $503,000.

Due to the number of currencies involved, the
constant change in currency exposures, and the substantial
volatility of currency exchange rates, the effect of exchange
rate fluctuations upon future operating results could be
significant. As of June 27, 2003, the Company had begun
implementing hedging transactions to cover certain currency and
translation exposures.



| |                            
| | ---------------------------
| | Comprehensive Income (Loss)

Accumulated other comprehensive income
(loss) is comprised of foreign currency translation gains
and losses and unrealized gains and losses on derivative
financial instruments

F-17



---



##### 



CRYSTAL DECISIONS, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS

(continued)


qualifying for cash flow hedging relationships.
Crystal Decisions has reported the components of comprehensive
income (loss) on the consolidated statements of
stockholders equity.



| |                                                                                                     
| | ----------------------------------------------------------------------------------------------------
| | Cash and Cash Equivalents, Short-Term
    Investments, Long-Term Investments and Restricted
    Cash

Cash equivalents consist of cash deposited with
banks and highly liquid, high quality debt securities with
original maturities of 90 days or less at the time of
purchase. Investments with maturity dates greater than
90 days but less than one year at the time of purchase are
classified as short-term investments. Investments with maturity
dates of greater than one year at the time of purchase are
classified as long-term investments. In accordance with SFAS
No. 115, Accounting for Certain Investments in
Debt and Equity Securities, and based on the
Companys intention to have the marketable securities
available to support its current operations, the Company
classifies all marketable securities as available-for-sale. All
investments are carried at amortized cost, which approximates
fair market value. Restricted cash consists of amounts held on
deposit that are required as collateral under an overdraft
credit facility.



| |                                     
| | ------------------------------------
| | Derivative Financial
    Instruments

The Company accounts for derivatives in
accordance with SFAS No. 133, Accounting for
Derivative Instruments and Hedging Activities(SFAS 133). SFAS 133, as amended,
requires companies to recognize all derivative instruments as
either assets or liabilities in the statement of financial
position at fair value. The accounting for changes in the fair
value of a derivative instrument depends on whether the
derivative has been designated and qualifies as part of a
hedging relationship and further, on the type of hedging
relationship. For those derivative instruments that are
designated and qualify as hedging instruments, a company must
designate the hedging instrument, based upon the exposure being
hedged, as a fair value hedge, cash flow hedge or a hedge of a
net investment in a foreign operation.

The Company enters into forward exchange
contracts to hedge forecasted Canadian dollar payroll costs
against U.S. and Canadian currency fluctuations. The purpose of
the Companys foreign currency hedging activities is to
protect the Company from the risk that the eventual dollar cash
flows resulting from Canadian dollar expenses will be adversely
affected by changes in the exchange rates. The Company
designates its foreign exchange forward contracts as cash flow
hedges. These contracts generally expire within one year.

For foreign currency forward contracts designated
as cash flow hedges, hedge effectiveness is measured based on
changes in the fair value of the contract attributable to
changes in the forward exchange rate. Changes in the expected
future cash flows on the forecasted transaction and changes in
the fair value of the forward contract are both measured from
the contract rate to the current forward exchange rate
associated with the forward contracts maturity date.

To receive hedge accounting treatment, cash flow
hedges must be highly effective in achieving offsetting changes
to expected future cash flows on hedged transactions. For
derivative instruments that are designated and qualify as cash
flow hedges, the net gain or loss resulting from the effective
portion of the change in fair value of the instrument is
reported as a component of other comprehensive income in
stockholders equity and reclassified into earnings in the
same period or periods during which the hedged transaction
affects earnings and in the same line items as payroll costs.
The ineffective portion of the change in fair value is
recognized in current earnings as a component of other income
(loss). When a cash flow hedge is

F-18



---



##### 



CRYSTAL DECISIONS, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS

(continued)


terminated because it is probable that the
forecasted transaction is no longer likely to occur within the
specified time period, the gain or loss recorded in other
comprehensive income related to this transaction is reclassified
to earnings. When a cash flow hedge is terminated because the
hedging instrument is settled the gain or loss recorded in other
comprehensive income remains until the forecasted transaction
occurs.

Beginning in May 2003, the Company began hedging
the exposure of the foreign currency exchange risk on forecasted
Canadian payroll costs. During fiscal 2003, all hedges were
effective. As a result, no gains or losses related to hedge
ineffectiveness were included in earnings during fiscal 2003. As
of June 27, 2003, a forward contract asset of approximately
$75,000 existed and was classified as part of prepaid and other
current assets. A forward contract liability of approximately
$95,000 existed and was classified as part of accrued expenses.
For fiscal 2003, the Company recognized a net loss of
approximately $20,000 related to these forecasted transactions,
which was included in accumulated other comprehensive income.
There was no transition adjustment related to the implementation
of SFAS 133 during fiscal 2003 and no beginning balance in
accumulated other comprehensive income as a result of hedged
transactions. The net amount of loss that was reclassified into
payroll costs during fiscal 2003 was $174,000.

As of June 27, 2003, the Company held
Canadian dollar foreign exchange forward contracts with a
notional amount of $27.4 million. The forward contracts
have semi-monthly maturities from July 15, 2003 through
January 2, 2004, coinciding with Canadian payroll periods.
Subsequent to June 27, 2003, the Company entered into
additional Canadian dollar forward exchange contracts with a
notional amount of $26.5 million. These forward contracts
have semi-monthly maturities from January 15, 2004 to
July 2, 2004.



| |                             
| | ----------------------------
| | Concentration of Credit Risk

Financial instruments that potentially subject
the Company to credit risk consist primarily of cash,
available-for-sale investments and accounts receivable. Crystal
Decisions places its cash and available-for-sale investments
with high credit quality financial institutions. The Company
invests its excess cash primarily in money market funds,
commercial paper, U.S. government and government sponsored
securities and other debt securities.

The Company sells its products to many companies
in various industries throughout the world, with the majority of
receivables from companies located in North America. The Company
performs ongoing credit evaluations of its customers and
maintains reserves for potential credit losses. The Company
bases its estimated losses on historical experience including
bad debt write-offs, specific identification of probable bad
debts based on collection efforts, aging of accounts receivable
and other factors. Historically, such losses have been within
managements expectations. The Company generally requires
no collateral from its customers. At June 28, 2002 and
June 27, 2003, respectively, receivables due from Ingram
Micro, Inc. (Ingram Micro), a distributor, were
approximately 7% and 6% of the Companys accounts
receivable balance before allowances and reserves.



| |            
| | -----------
| | Inventories

Inventories are stated at the lower of cost
(first in, first out method) or market and consist primarily of
materials used in software products, related supplies and
packaging materials. There were no revaluations of inventory to
the lower of cost or market during fiscal 2001, fiscal 2002 or
fiscal 2003.

F-19



---



##### 



CRYSTAL DECISIONS, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS

(continued)




| |                       
| | ----------------------
| | Property and Equipment

Equipment and leasehold improvements are stated
at cost less accumulated depreciation. Equipment is depreciated
using the straight-line method over the estimated useful lives
of the assets ranging from two to four years. Leasehold
improvements are depreciated using the straight-line method over
the shorter of the estimated useful life of the asset or the
remaining terms of the lease. Where assets are fully depreciated
and are no longer in use, the fully depreciated cost and related
accumulated amortization is written off.



| |                                         
| | ----------------------------------------
| | Goodwill and Other Intangible
    Assets

As described in note 2, all intangible
assets at June 28, 2002 were revalued and reduced to zero
by a charge to additional paid-in capital. Prior to
June 28, 2002, amortization of goodwill and purchased
intangible assets was provided on a straight line basis over the
respective useful lives of the assets, which ranged from three
to five years.



| |                                    
| | -----------------------------------
| | Impairment of Long-Lived
    Assets

In October 2001, the Financial Accounting
Standards Board (FASB) issued SFAS No. 144,
Accounting for the Impairment or Disposal of Long-Lived
Assets (SFAS 144). Crystal Decisions
adopted SFAS 144 effective June 29, 2002. SFAS 144
supercedes SFAS No. 121, Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be
Disposed of (SFAS 121). SFAS 144
retains the requirements of SFAS 121 to (a) recognize
an impairment loss if the carrying amount of a long-lived asset
is not recoverable from its undiscounted cash flows and
(b) measure an impairment loss as the difference between
the carrying amount and the fair value of the asset. The
adoption of SFAS 144 had no impact on the Companys
financial position or results of operations because there were
no impaired long-lived assets as of the date of adoption. There
were no long-lived assets that were considered to be impaired
during the periods presented.



| |                       
| | ----------------------
| | Developed Technologies

Crystal Decisions applies SFAS 86
Accounting for the Costs of Computer Software to Be
Sold, Leased, or Otherwise
Marketed(SFAS 86) to software
technologies developed internally, acquired in business
acquisitions or purchased. SFAS 86 requires the
capitalization of certain internal development costs once
technological feasibility is established, which generally occurs
upon the completion of a working model. Internal development
costs incurred prior to the establishment of technical
feasibility are expensed as incurred and are included as
research and development expense. As the time period between the
completion of a working model and the general availability of
software has been short, costs qualifying for capitalization
were insignificant. Accordingly, there were no capitalized
software development costs at June 28, 2002 or
June 27, 2003.

As described in note 2, all purchased
developed technologies at June 28, 2002 were revalued and
reduced to zero by a charge to additional paid-in capital.
Purchased developed technologies were amortized based on a
straight-line basis over the estimated useful life (three to
four years). The recoverability of the carrying value of
purchased developed technologies was reviewed periodically. The
carrying value of purchased developed technologies was compared
to the estimated future gross revenues from that product
including maintenance revenues and customer support revenues
reduced by the estimated future costs of completing and
disposing of that product, including the costs of performing
maintenance and customer support (net

F-20



---



##### 



CRYSTAL DECISIONS, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS

(continued)


undiscounted cash flows) and to the extent that
the carrying value exceeded the net undiscounted cash flows, the
difference is written off.



| |                    
| | -------------------
| | Advertising Expense

Advertising costs are expensed as incurred.
Advertising costs totaled $13.1 million, $12.1 million
and $12.3 million for fiscal 2001, fiscal 2002 and fiscal
2003, respectively.



| |                      
| | ---------------------
| | Shipping and Handling

Shipping and handling costs for all software
delivered to customers for new licenses and upgrades of existing
licenses are included in cost of licensing revenues.



| |                         
| | ------------------------
| | Stock-Based Compensation

In December 2002, the FASB issued SFAS
No. 148, Accounting for Stock-Based
Compensation  Transition and Disclosure 
an Amendment of FASB Statement No. 123(SFAS 148). This statement amends SFAS
No. 123, Accounting for Stock-Based
Compensation (SFAS 123), to provide
alternative methods of transition for an entity that voluntarily
changes to the fair value based method of accounting for
stock-based compensation under SFAS 123. In addition,
SFAS 148 amends the disclosure requirements of SFAS 123 and
Accounting Principles Board Opinion No. 28,
Interim Financial Reporting
(APB 28) to require prominent disclosure of the
effects of an entitys accounting policy with respect to
stock-based employee compensation on reported net income (loss)
and net income (loss) per share in annual and interim financial
statements.

At June 27, 2003, the Company had two
approved stock-based employee compensation plans, which are
described in note 13. Crystal Decisions measures
compensation expense for its 1999 Stock Option Plan using the
intrinsic value method prescribed by Accounting Principles Board
Opinion No. 25, Accounting for Stock Issued to
Employees(APB 25) and related
interpretations.

F-21



---



##### 



CRYSTAL DECISIONS, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS

(continued)


The following table provides the required pro
forma disclosures of the effect on net income (loss) and net
income (loss) per share as if the fair value-based method had
been applied in measuring compensation expense (in thousands,
except per share amounts):

|                                                                                                                                  |         |                    |         |          |   |          |        |      |  |   |        |      | 
|--------------------------------------------------------------------------------------------------------------------------------- | ------- | ------------------ | ------- | -------- | - | -------- | ------ | ---- |  | - | ------ | ---- | 
|                                                                                                                                  |         |                   
|                                                                                                                                  |         | Fiscal Years Ended
|                                                                                                                                  |         |                   
|                                                                                                                                  |         | June 29,           |         | June 28, |   | June 27,
|                                                                                                                                  |         | 2001               |         | 2002     |   | 2003    
|                                                                                                                                  |         |                    |         |          |   |         
|Net income (loss)  as reported                                                                                                   |         | $                  | (11,469 | )        |   | $        | 12,955 |      |  | $ | 33,455 |     
|Add: Stock-based employee compensation expense
    included in reported net income, net of tax                                    |         |                    |        |          |   |          |       |      |  |   | 41     |     
|Deduct: Stock-based employee compensation expense
    determined under the fair value based method for all awards, net
    of tax |         |                    | (7,184  | )        |   |          | (6,691 | )    |  |   | (8,448 | )   
|                                                                                                                                  |         |                    |         |          |   |          |        |      |  |   |        |     
|Net income (loss)  pro forma                                                                                                     |         | $                  | (18,653 | )        |   | $        | 6,264  |      |  | $ | 25,048 |     
|                                                                                                                                  |         |                    |         |          |   |          |        |      |  |   |        |     
|Net income (loss) per share  as
    reported                                                                                     |         |                    |         |          |   |          |        |      |  |   |        |     
|                                                                                                                                  | Basic   |                    | $       | (0.15    | ) |          | $      | 0.17 |  |   | $      | 0.44 | 
|                                                                                                                                  |         |                    |         |          |   |          |        |      |  |   |        |     
|                                                                                                                                  | Diluted |                    | $       | (0.15    | ) |          | $      | 0.17 |  |   | $      | 0.42 | 
|                                                                                                                                  |         |                    |         |          |   |          |        |      |  |   |        |     
|Net income (loss) per share  pro
    forma                                                                                       |         |                    |         |          |   |          |        |      |  |   |        |     
|                                                                                                                                  | Basic   |                    | $       | (0.25    | ) |          | $      | 0.08 |  |   | $      | 0.33 | 
|                                                                                                                                  |         |                    |         |          |   |          |        |      |  |   |        |     
|                                                                                                                                  | Diluted |                    | $       | (0.25    | ) |          | $      | 0.08 |  |   | $      | 0.31 | 
|                                                                                                                                  |         |                    |         |          |   |          |        |      |  |   |        |     

Aside from a one-time charge of approximately
$41,000 in connection with certain stock options issued to
employees in England, no stock-based employee compensation cost
was reflected in net income for the periods presented as all
other stock options granted under the 1999 Stock Option Plan and
2000 Stock Option Plan (the Plans) had an exercise
price equal to the market value of the underlying common stock
at the date of grant. During fiscal 2001, the reported net loss
included $1.9 million related to compensation expense for
Old Seagate stock options on the sale of Old Seagate
(note 9).

The pro forma effects of applying SFAS 123
for the periods presented are not likely to be representative of
the pro forma effects of future periods as the stock options
usually vest over a period of four years, no stock options were
issued under the Plans prior to November 1999, the number of
stock options awarded varies from one period to another and the
Black-Scholes fair value of each award depends on the
assumptions at the grant date.

See note 13 for discussion of the
assumptions used in the Black-Scholes option pricing model and
the resulting estimated fair value of employee stock options.



| |             
| | ------------
| | Income Taxes

The Company is subject to income taxes in both
the United States and numerous foreign jurisdictions and the use
of estimates is required in determining the Companys
provision for income taxes. The Company accounts for its income
taxes in accordance with SFAS No. 109, Accounting
for Income Taxes (SFAS 109).
SFAS 109 prescribes the liability method. Under this method
deferred tax assets and liabilities are determined based on the
difference between the financial statement carrying amounts and
the tax bases of assets and liabilities, and are measured using
the enacted statutory tax rates that will be in effect for the
year in which the differences are expected to reverse. The
Company records a valuation allowance to reduce its deferred tax
assets when uncertainty regarding their realizability exists.
Although the Company believes its tax estimates are reasonable,
the ultimate tax determination involves significant judgment
that could be subject to audit by tax authorities in the
ordinary course of business.

F-22



---



##### 



CRYSTAL DECISIONS, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS

(continued)


Net Income
(Loss) Per Share

Under the provisions of SFAS No. 128,
Earnings per share, basic net income (loss)
per share is computed using the weighted average number of
shares of common stock outstanding during the period. Diluted
net income (loss) per share is computed using the weighted
average number of shares of common stock outstanding and
dilutive common stock equivalents outstanding during the period
using the treasury stock method. The incremental shares included
as common stock equivalents result from the weighted average
fair market values of stock options being in excess of the
exercise prices for the stock options outstanding. Potential
dilutive securities are excluded from the computation of diluted
net income (loss) per share where their inclusion would not be
dilutive.

Guarantors
Accounting for Guarantees

The Company from time to time enters into certain
types of contracts that contingently require the Company to
indemnify parties against third party claims. These contracts
primarily relate to: (i) certain agreements with the
Companys officers and directors, under which the Company
may be required to indemnify such persons for liabilities
arising out of their duties to the Company; (ii) the pledge
of certain assets and shares in connection with the Revolving
Line agreement with Comerica described in note 14;
(iii) certain real estate leases, under which the Company
may be required to indemnify property owners for environmental
and other liabilities, and other claims arising from the
Companys use of the applicable premises; and
(iv) agreements under which the Company indemnifies
customers and partners for claims arising from intellectual
property infringement. In addition, as described in note 2,
Crystal Decisions entered into certain indemnification and
reimbursement agreements related to the New SAC Transaction.

Because the obligated amounts of these types of
agreements often are not explicitly stated, the overall maximum
amount of the obligations cannot be reasonably estimated.
Historically, the Company has not been obligated to make
significant payments for these obligations, there is no pending
litigation or claims related to these obligations, and no
liabilities have been recorded for these obligations on the
balance sheet as of June 27, 2003.

The Company warrants that its software products
will operate substantially in conformity with product
documentation and that the physical media will be free from
defect. The specific terms and conditions of the warranties vary
depending upon the type of agreement and the product sold,
ranging from 30 to 90 days. The Company provides for the
costs of warranty when specific problems are identified. The
Company has not experienced any significant warranty claims to
date and no liabilities related to warranty costs were recorded
on the balance sheet as of June 27, 2003.

F-23



---



##### 



CRYSTAL DECISIONS, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS

(continued)




|   |                                                                 
|-- | ----------------------------------------------------------------
|4. | Cash, Cash Equivalents, Short-Term and
    Long-Term Investments

The Companys cash, cash equivalents,
short-term and long-term investments are summarized in the table
below. Crystal Decisions classifies its investments in debt
securities as available-for-sale and records these investments
at the amortized cost, which approximates their fair value.
Gains and losses on available-for-sale securities held at
June 28, 2002 and June 27, 2003 and gross realized
gains or losses on sales of available-for-sale securities during
fiscal 2002 and fiscal 2003 were not significant.

|                                                                       |                                                         |                |        |          |  |   |         |        | 
|---------------------------------------------------------------------- | ------------------------------------------------------- | -------------- | ------ | -------- |  | - | ------- | ------ | 
|                                                                       |                                                         | June 28,       |        | June 27,
|                                                                       |                                                         | 2002           |        | 2003    
|                                                                       |                                                         |                |        |         
|                                                                       |                                                         |               
|                                                                       |                                                         | (in thousands)
|Cash                                                                   |                                                         | $              | 2,945  |          |  | $ | 9,852   |       
|Cash equivalents:                                                      |                                                         |                |        |          |  |   |         |       
|                                                                       | Money market funds                                      |                |        | 38,537   |  |   |         | 73,127 | 
|                                                                       | Commercial paper                                        |                |        | 22,957   |  |   |         | 16,844 | 
|                                                                       | Other debt securities                                   |                |        | 7,012    |  |   |         |       | 
|                                                                       |                                                         |                |        |          |  |   |         |       
|                                                                       | Total cash equivalents                                  |                |        | 68,506   |  |   |         | 89,971 | 
|                                                                       |                                                         |                |        |          |  |   |         |       
|                                                                       | Total cash and cash equivalents                         |                |        | 71,451   |  |   |         | 99,823 | 
|                                                                       |                                                         |                |        |          |  |   |         |       
|Short-term investments:                                                |                                                         |                |        |          |  |   |         |       
|                                                                       | Commercial paper                                        |                |        |         |  |   |         | 1,878  | 
|                                                                       | U.S. government and government sponsored
    securities |                |        |         |  |   |         | 3,002  | 
|                                                                       |                                                         |                |        |          |  |   |         |       
|                                                                       | Total short-term investments                            |                |        |         |  |   |         | 4,880  | 
|                                                                       |                                                         |                |        |          |  |   |         |       
|Long-term investments:                                                 |                                                         |                |        |          |  |   |         |       
|                                                                       | U.S. government and government sponsored
    securities |                |        |         |  |   |         | 3,215  | 
|                                                                       |                                                         |                |        |          |  |   |         |       
|                                                                       | Total long-term investments                             |                |        |         |  |   |         | 3,215  | 
|                                                                       |                                                         |                |        |          |  |   |         |       
|Total cash, cash equivalents, short-term and
    long-term investments |                                                         | $              | 71,451 |          |  | $ | 107,918 |       
|                                                                       |                                                         |                |        |          |  |   |         |       

The above figures as of June 27, 2003 did
not include $2.0 million of restricted cash on deposit with
The Bank of Nova Scotia (note 5). Under the Revolving Loan
Agreement with Comerica described in note 14(b), the
Company is required to maintain $10.0 million of its
investments with Comerica or its affiliates. The balances at
Comerica are included in Cash Equivalents above.



|   |                
|-- | ---------------
|5. | Restricted Cash

On September 26, 2002, the Company placed
$2.0 million on deposit with The Bank of Nova Scotia as a
general hypothecation to an overdraft credit facility. The
monies held and the interest earned thereon were classified as
restricted cash as of June 27, 2003. The overdraft credit
facility provides up to Canadian $2.0 million credit for
certain overdrafts plus a foreign exchange forward trading line
supporting notional contracts of between $4.0 million and
$6.0 million. At June 27, 2003, there was no balance
outstanding under this overdraft credit facility and foreign
exchange forward trading line.

F-24



---



##### 



CRYSTAL DECISIONS, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS

(continued)




|   |                       
|-- | ----------------------
|6. | Property and Equipment

Property and equipment consisted of the following
(in thousands):

|                              |                              |          |        |          |  |   |         |        | 
|----------------------------- | ---------------------------- | -------- | ------ | -------- |  | - | ------- | ------ | 
|                              |                              | June 28, |        | June 27,
|                              |                              | 2002     |        | 2003    
|                              |                              |          |        |         
|Equipment                     |                              | $        | 18,766 |          |  | $ | 32,853  |       
|Leasehold improvements        |                              |          | 4,142  |          |  |   | 6,643   |       
|                              |                              |          |        |          |  |   |         |       
|                              |                              |          | 22,908 |          |  |   | 39,496  |       
|Less accumulated depreciation |                              |          | (7,007 | )        |  |   | (14,679 | )     
|                              |                              |          |        |          |  |   |         |       
|                              | Total property and equipment |          | $      | 15,901   |  |   | $       | 24,817 | 
|                              |                              |          |        |          |  |   |         |       

During the fiscal 2003, fully depreciated assets
were written off resulting in a reduction of both cost and
accumulated depreciation of $2.2 million.

Depreciation and amortization expense on property
and equipment was $4.4 million, $5.2 million and
$9.1 million for fiscal 2001, fiscal 2002 and fiscal 2003,
respectively. Depreciation and amortization expense was
$2.2 million for the five-month period ended
November 22, 2000 and $2.2 million for the period from
November 23, 2000 to June 29, 2001.



|   |                  
|-- | -----------------
|7. | Intangible Assets

Intangible assets consisted of the following (in
thousands):

|                                                                                                                   |  |          |         |          |  |   |   | 
|------------------------------------------------------------------------------------------------------------------ |  | -------- | ------- | -------- |  | - | - | 
|                                                                                                                   |  | June 28, |         | June 27,
|                                                                                                                   |  | 2002     |         | 2003    
|                                                                                                                   |  |          |         |         
|Developed technologies                                                                                             |  | $        | 15,234  |          |  | $ |  | 
|Assembled workforce                                                                                                |  |          | 7,073   |          |  |   |  | 
|                                                                                                                   |  |          |         |          |  |   |   | 
|Total intangible assets                                                                                            |  |          | 22,307  |          |  |   |  | 
|Accumulated amortization                                                                                           |  |          | (11,773 | )        |  |   |  | 
|Reduction in the net carrying values of
    intangible assets pursuant to the application of SFAS 109
    (note 2) |  |          | (10,534 | )        |  |   |  | 
|                                                                                                                   |  |          |         |          |  |   |   | 
|                                                                                                                   |  | $        |        |          |  | $ |  | 
|                                                                                                                   |  |          |         |          |  |   |   | 

As described in note 2, Crystal Decisions
revalued its intangible assets as a result of the New SAC
Transaction. Commencing on November 23, 2000, these
intangible assets were amortized on a straight-line basis over
their estimated useful lives (three years). Amortization on
these intangible assets was $4.3 million and
$7.4 million, respectively, for the period from
November 23, 2000 to June 29, 2001 and for fiscal 2002.

In July 2001, the FASB issued
SFAS No. 141 Business Combinations
(SFAS 141) and SFAS No. 142
Goodwill and Other Intangible Assets(SFAS 142). Crystal Decisions adopted
SFAS 141 effective July 1, 2001 and SFAS 142
effective June 29, 2002. Under SFAS 142, goodwill and
indefinite life intangible assets are no longer amortized but
are reviewed for impairment annually or more frequently if
impairment indicators arise. Certain intangible assets, such as
assembled workforce, are no longer considered intangible assets
under SFAS 142 and would instead be classified as goodwill.
Separate intangible assets that are deemed to have definite
lives continue to be amortized over their estimated useful
lives. There was no goodwill or remaining definite or indefinite
life intangible assets on the consolidated balance sheet as of
June 28, 2002 or June 27, 2003.

F-25



---



##### 



CRYSTAL DECISIONS, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS

(continued)


Had the Company been accounting for its
intangible assets under SFAS 142 for all periods presented,
the Companys net income (loss) and net income (loss) per
share would have been as follows (in thousands, except per share
amounts):

|                                                                                    |                                         |                    |         |          |   |          |        |        |  |   |        |        | 
|----------------------------------------------------------------------------------- | --------------------------------------- | ------------------ | ------- | -------- | - | -------- | ------ | ------ |  | - | ------ | ------ | 
|                                                                                    |                                         |                   
|                                                                                    |                                         | Fiscal Years Ended
|                                                                                    |                                         |                   
|                                                                                    |                                         | June 29,           |         | June 28, |   | June 27,
|                                                                                    |                                         | 2001               |         | 2002     |   | 2003    
|                                                                                    |                                         |                    |         |          |   |         
|Reported net income                                                                 |                                         | $                  | (11,469 | )        |   | $        | 12,955 |        |  | $ | 33,455 |       
|Add back assembled workforce amortization, net of
    tax                           |                                         |                    | 1,357   |          |   |          | 2,285  |        |  |   |       |       
|Add back goodwill and indefinite life intangible
    asset amortization, net of tax |                                         |                    | 556     |          |   |          |       |        |  |   |       |       
|                                                                                    |                                         |                    |         |          |   |          |        |        |  |   |        |       
|                                                                                    | Adjusted net income                     |                    | $       | (9,556   | ) |          | $      | 15,240 |  |   | $      | 33,455 | 
|                                                                                    |                                         |                    |         |          |   |          |        |        |  |   |        |       
|Reported net income per share  basic                                               |                                         | $                  | (0.15   | )        |   | $        | 0.17   |        |  | $ | 0.44   |       
|Add back assembled workforce amortization, net of
    tax                           |                                         |                    | 0.02    |          |   |          | 0.03   |        |  |   |       |       
|Add back goodwill and indefinite life intangible
    asset amortization, net of tax |                                         |                    |        |          |   |          |       |        |  |   |       |       
|                                                                                    |                                         |                    |         |          |   |          |        |        |  |   |        |       
|                                                                                    | Adjusted net income per share  basic   |                    | $       | (0.13    | ) |          | $      | 0.20   |  |   | $      | 0.44   | 
|                                                                                    |                                         |                    |         |          |   |          |        |        |  |   |        |       
|Reported net income per share  diluted                                             |                                         | $                  | (0.15   | )        |   | $        | 0.17   |        |  | $ | 0.42   |       
|Add back assembled workforce amortization, net of
    tax                           |                                         |                    | 0.02    |          |   |          | 0.03   |        |  |   |       |       
|Add back goodwill and indefinite life intangible
    asset amortization, net of tax |                                         |                    |        |          |   |          |       |        |  |   |       |       
|                                                                                    |                                         |                    |         |          |   |          |        |        |  |   |        |       
|                                                                                    | Adjusted net income per share  diluted |                    | $       | (0.13    | ) |          | $      | 0.20   |  |   | $      | 0.42   | 
|                                                                                    |                                         |                    |         |          |   |          |        |        |  |   |        |       

The balances amortized to November 22, 2000
related to goodwill and intangible assets, including assembled
workforce and trademarks, related to the June 1999 Old Seagate
exchange offer and the October 1999 Old Seagate exchange of
shares. The amortization expense related to these assets was
$648,000 for the period from July 1, 2000 to
November 22, 2000.



|   |                           
|-- | --------------------------
|8. | Related Party Transactions



| |                                                         
| | --------------------------------------------------------
| | Transactions with Old Seagate and Seagate
    Technology

In December 2000, Crystal Decisions signed a
software license agreement (the License Agreement)
with Old Seagate, whose obligations were assigned to Seagate
Technology. Under the terms of the License Agreement, Crystal
Decisions granted Seagate Technology a non-exclusive,
non-transferable, perpetual license to use certain business
intelligence products and receive related maintenance and
support services for one year. The total value of the License
Agreement was $1.6 million. The License Agreement was
priced at an approximate 50% discount to Crystal Decisions
established list price. During fiscal 2001 and fiscal 2002,
respectively, Crystal Decisions recognized approximately
$1.5 million and $151,000 of revenues from the License
Agreement. The License Agreement also provided for consulting
revenues of which Crystal Decisions earned $327,000 and $30,000
in fiscal 2001 and fiscal 2002, respectively (adjusted for the
application of EITF 01-14).

The maintenance and support services related to
the License Agreement were renewed for one year during the three
months ended December 28, 2001 and for an additional year
in the three months ended March 28, 2003. Revenues from the
maintenance and support services are being recognized ratably
over the term of the contract, which is one year. Crystal
Decisions recognized maintenance and support revenues from
Seagate Technology of $282,000 in fiscal 2002 and $455,000 in
fiscal 2003.

Historically, Old Seagate provided substantial
administrative and financial services to Crystal Decisions under
a General Services Agreement dated June 28, 1997. During
fiscal 2001, the General Services Agreement was replaced by the
following agreements between Crystal Decisions and Seagate
Technology and its affiliates: a Corporate Services Agreement, a
Payroll

F-26



---



##### 



CRYSTAL DECISIONS, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS

(continued)


Services Agreement and a Management Services
Agreement under substantially the same terms as the General
Services Agreement with Old Seagate. The term of the new
agreements are each three years with successive renewal periods
of one year. Seagate Technology provides various services as
requested by Crystal Decisions for which it charges Crystal
Decisions through corporate expense allocations. The amount of
corporate expense charges depends upon the total amount of
allocable costs incurred by Seagate Technology on behalf of
Crystal Decisions less amounts charged as a specific cost or
expense rather than by allocation. Such costs have been
proportionately allocated to Crystal Decisions based on detailed
inquiries and estimates of time incurred by Seagate
Technologys corporate general and administrative
departmental managers. Crystal Decisions management
believes that the allocation methods applied to the costs
provided under the agreements in place are reasonable. Seagate
Technology has charged Crystal Decisions the fair market value
of these services and thus no material additional costs would
have been incurred had Crystal Decisions obtained these services
from a third party.

Amounts charged to Crystal Decisions
general and administrative expense were $1.2 million,
$865,000 and $348,000 for fiscal 2001, fiscal 2002 and fiscal
2003, respectively. Commencing November 23, 2000 up to and
including the three months ended December 27, 2002, these
balances included a quarterly charge of $25,000 for consulting
and advisory fees under an annual monitoring agreement that were
paid on Crystal Decisions behalf by Seagate Technology to
certain New SAC investors. In December 2002, Seagate Technology
discontinued the annual monitoring agreement. In settlement for
the remaining term of the agreement, Crystal Decisions paid
$625,000, which was included in general and administrative
expense on the statement of operations for the three months
ended December 27, 2002. Management believes Seagate
Technology charged Crystal Decisions the fair market value of
these services and thus no material additional costs would have
been incurred had Crystal Decisions obtained these services from
a third party.

Until October 22, 2000, certain employees of
Crystal Decisions also participated in the Old Seagate Employee
Stock Purchase Plan (the Purchase Plan). The
Purchase Plan permitted eligible employees who had completed
thirty days of employment prior to the inception of the offering
period to purchase common stock of Old Seagate through payroll
deductions at the lower of 85% of the fair market value of the
common stock at the beginning or at the end of each six-month
offering period. Under the Purchase Plan, Crystal Decisions
employees purchased 24,181 shares of Old Seagate common
stock in fiscal 2001. The Company did not make matching payments
for such employee stock purchases. The Purchase Plan terminated
prior to the closing of the New SAC Transaction.

As of June 28, 2002 and June 27, 2003,
there were no amounts outstanding from Seagate Technology
included in accounts receivable. As of June 28, 2002 and
June 27, 2003, respectively, there were approximately
$1.3 million and $195,000 due to Seagate Technology
included in accounts payable.



| |                          
| | -------------------------
| | Transactions with VERITAS

VERITAS and a subsidiary of VERITAS Software
Corporation entered into a three-year cross license and original
equipment manufacturer agreement with Crystal Decisions, Corp.,
a wholly owned subsidiary, on May 28, 1999. Two members of
the Companys board of directors were also members of the
board of directors of VERITAS at that time. The cross license
agreement provided for the licensing of certain products between
the parties. The Company recognized no revenues from VERITAS in
fiscal 2001, fiscal 2002 or fiscal 2003.

F-27



---



##### 



CRYSTAL DECISIONS, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS

(continued)


On June 21, 2002, the cross license
agreement was terminated and the Company entered into two
software license and services agreements with VERITAS Software
Global Corporation. Two members of the Companys board of
directors were also members of the board of directors of VERITAS
at that time. Under one of the agreements, VERITAS granted the
Company a perpetual, irrevocable, non-exclusive,
non-transferable worldwide license to use given products in
specified amounts, solely in support of the Companys
internal business operations. The software license agreement
provided for the purchase of annual maintenance and support,
which was calculated as a percentage of the actual list price of
the licensed software. In July 2002, the Company recorded
approximately $622,000 as a prepaid expense related to the
annual maintenance and support contract, which was expensed
ratably in fiscal 2003. In July 2003, the maintenance agreement
was renewed for selected products of the software and the
Company recorded approximately $111,000 as a prepaid expense,
which is being expensed ratably in fiscal 2004. In a separate
agreement, the Company granted VERITAS a perpetual software
license to use given products in specified amounts and
18 months of maintenance and support services for no
consideration. The fair value of the license and maintenance and
support services was approximately $126,000. The Company has not
recognized any revenues under this agreement.

See also notes 2, 9, 11, 14, 15, 17 and 19
for other related party transactions.

9.     Unusual
Items



| |                                                                                            
| | -------------------------------------------------------------------------------------------
| | Compensation Expense for Seagate Technology
    Stock Options on Sale of Seagate Technology

On November 22, 2000, the date of the
closing of the New SAC Transaction, vesting of Seagate
Technology options were accelerated and each share was net
exercised for merger consideration of 0.4465 shares of VERITAS
common stock and $8.55 cash per share of Seagate Technology. The
accelerated vesting and net exercise of these options resulted
in compensation expense to Old Seagate. At November 22,
2000, options to purchase 51,500 shares of Old Seagate
common stock were held by certain Crystal Decisions
employees. As a result, the Company recorded approximately
$1.9 million of non-cash compensation expense attributable
to its employees as a capital contribution from Old Seagate. The
compensation expense was recorded as an unusual item in the
consolidated statement of operations for fiscal 2001.

10.     Restructuring
Costs

During fiscal 2001, Crystal Decisions incurred
$573,000 of restructuring charges. The charges related to the
closure of eight offices in Europe and were part of a
restructuring plan announced in September 2000 to consolidate
the European sales organization into fewer locations. The
charges were primarily comprised of costs related to the
termination of office leases and other related closure costs, as
well as severance and benefits due to nine sales and marketing
employees who were terminated in September 2000. At
June 28, 2002 and June 27, 2003, no amounts remained
outstanding.

F-28



---



##### 



CRYSTAL DECISIONS, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS

(continued)


11.     Income
Taxes

Net income (loss) before provision for
income taxes consisted of the following (in thousands):

|                                                        |         |                    |         |          |  |          |        |        |  |   |        |        | 
|------------------------------------------------------- | ------- | ------------------ | ------- | -------- |  | -------- | ------ | ------ |  | - | ------ | ------ | 
|                                                        |         |                   
|                                                        |         | Fiscal Years Ended
|                                                        |         |                   
|                                                        |         | June 29,           |         | June 28, |  | June 27,
|                                                        |         | 2001               |         | 2002     |  | 2003    
|                                                        |         |                    |         |          |  |         
|U.S.                                                    |         | $                  | (12,110 | )        |  | $        | 4,837  |        |  | $ | 24,843 |       
|Foreign:                                                |         |                    |         |          |  |          |        |        |  |   |        |       
|                                                        | Canada  |                    |         | 331      |  |          |        | 10,952 |  |   |        | 7,625  | 
|                                                        | Ireland |                    |         |         |  |          |        |       |  |   |        | 12,198 | 
|                                                        | Other   |                    |         | 1,493    |  |          |        | 466    |  |   |        | 1,980  | 
|                                                        |         |                    |         |          |  |          |        |        |  |   |        |       
|Net income (loss) before provision for income
    taxes |         | $                  | (10,286 | )        |  | $        | 16,255 |        |  | $ | 46,646 |       
|                                                        |         |                    |         |          |  |          |        |        |  |   |        |       

The provision for income taxes consisted of the
following (in thousands):

|                                |              |                                      |       |          |       |          |       |        |        |   |        |        |        |  
|------------------------------- | ------------ | ------------------------------------ | ----- | -------- | ----- | -------- | ----- | ------ | ------ | - | ------ | ------ | ------ | -
|                                |              |                                     
|                                |              | Fiscal Years Ended                  
|                                |              |                                     
|                                |              | June 29,                             |       | June 28, |       | June 27,
|                                |              | 2001                                 |       | 2002     |       | 2003    
|                                |              |                                      |       |          |       |         
|Current tax expense (benefit):  |              |                                      |       |          |       |          |       |        |        |   |        |       
|                                | U.S. Federal |                                      | $     | (1,418   | )     |          | $     | 803    |        |   | $      | 13,890 |       
|                                | U.S. State   |                                      |       | (1,056   | )     |          |       | 97     |        |   |        | 1,678  |       
|                                | Foreign      |                                      |       | 2,128    |       |          |       | 4,714  |        |   |        | 7,462  |       
|                                |              |                                      |       |          |       |          |       |        |        |   |        |       
|                                |              | Total current tax expense (benefit)  |       |          | (346  | )        |       |        | 5,614  |   |        |        | 23,030 |  
|                                |              |                                      |       |          |       |          |       |        |        |   |        |       
|Deferred tax expense (benefit): |              |                                      |       |          |       |          |       |        |        |   |        |       
|                                | U.S. Federal |                                      |       |         |       |          |       |       |        |   |        | (8,224 | )     
|                                | U.S. State   |                                      |       |         |       |          |       |       |        |   |        | (994   | )     
|                                | Foreign      |                                      |       | 1,529    |       |          |       | (2,314 | )      |   |        | (621   | )     
|                                |              |                                      |       |          |       |          |       |        |        |   |        |       
|                                |              | Total deferred tax expense (benefit) |       |          | 1,529 |          |       |        | (2,314 | ) |        |        | (9,839 | )
|                                |              |                                      |       |          |       |          |       |        |        |   |        |       
|Provision for income taxes      |              | $                                    | 1,183 |          |       | $        | 3,300 |        |        | $ | 13,191 |       
|                                |              |                                      |       |          |       |          |       |        |        |   |        |       

Undistributed earnings of the Companys
foreign subsidiaries are considered to be indefinitely
reinvested and, accordingly, no provision for U.S. federal
and state income taxes was provided thereon. Upon distribution
of those earnings in the form of dividends or otherwise, the
Company would be subject to both U.S. income taxes (subject
to an adjustment for applicable foreign tax credits) and
withholding taxes payable as imposed by the tax authorities of
those foreign countries.

The Company is subject to income taxes in both
the United States and numerous foreign jurisdictions and the use
of estimates are required in determining the Companys
worldwide provision for income taxes. Although the Company
believes its tax estimates are reasonable, the ultimate tax
determination involves significant judgment that could be
subject to audit by tax authorities in the ordinary course of
business.

F-29



---



##### 



CRYSTAL DECISIONS, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS

(continued)


A reconciliation of income taxes computed at the
U.S. statutory rate to the provision for income taxes is as
follows (in thousands):

|                                                                                       |  |                    |        |          |  |          |         |   |  |   |        |  
|-------------------------------------------------------------------------------------- |  | ------------------ | ------ | -------- |  | -------- | ------- | - |  | - | ------ | -
|                                                                                       |  |                   
|                                                                                       |  | Fiscal Years Ended
|                                                                                       |  |                   
|                                                                                       |  | June 29,           |        | June 28, |  | June 27,
|                                                                                       |  | 2001               |        | 2002     |  | 2003    
|                                                                                       |  |                    |        |          |  |         
|Income tax provision for (benefit from) computed
    at the U.S. statutory rate of 35% |  | $                  | (3,600 | )        |  | $        | 5,689   |   |  | $ | 16,326 |  
|State income taxes (benefits), net                                                     |  |                    | (435   | )        |  |          | 141     |   |  |   | 1,973  |  
|Tax differential related to foreign operations                                         |  |                    | 2,942  |          |  |          | (2,117  | ) |  |   | (1,167 | )
|Write-off of in-process research and development                                       |  |                    | 693    |          |  |          |        |   |  |   |       |  
|Reinstatement of net operating losses                                                  |  |                    |       |          |  |          | (53,492 | ) |  |   |       |  
|Valuation allowance                                                                    |  |                    | 1,913  |          |  |          | 53,324  |   |  |   | (5,094 | )
|Other                                                                                  |  |                    | (330   | )        |  |          | (245    | ) |  |   | 1,153  |  
|                                                                                       |  |                    |        |          |  |          |         |   |  |   |        |  
|                                                                                       |  | $                  | 1,183  |          |  | $        | 3,300   |   |  | $ | 13,191 |  
|                                                                                       |  |                    |        |          |  |          |         |   |  |   |        |  

Prior to the close of the New SAC Transaction,
Crystal Decisions was included in the consolidated federal and
certain combined and consolidated foreign and state income tax
returns of Old Seagate. Old Seagate and Crystal Decisions had
entered into a tax sharing agreement (the Tax Allocation
Agreement) pursuant to which Crystal Decisions computed
hypothetical taxes as if Crystal Decisions was not joined in the
combined or consolidated returns with Old Seagate. Crystal
Decisions paid Old Seagate the positive amount of any such
hypothetical taxes. If the hypothetical taxes showed entitlement
to refunds, including any refunds attributable to a carryback,
then Old Seagate would pay Crystal Decisions the amount of such
refunds. In prior periods, Crystal Decisions generated
substantial cash payments from the Companys tax losses
utilized by Old Seagate, which were used to reduce the
obligation under the revolving loan agreement (Revolving
Loan Agreement) (note 14). As of the end of fiscal
2001 $4.0 million of intercompany tax related balances due
to Crystal Decisions from Old Seagate were offset against
amounts due to Old Seagate under the Revolving Loan Agreement.
On November 22, 2000, the Tax Allocation Agreement was
terminated.

Until October 22, 2000, certain employees of
Crystal Decisions participated in the Old Seagate Employee Stock
Purchase Plan. During fiscal 2001, $33,000 of income tax
benefits relating to the exercise of stock options under this
plan by the Companys employees were credited to additional
paid-in capital. The offsetting entry increased amounts due to
Old Seagate pursuant to the Tax Allocation Agreement.

On November 23, 2000, the Company entered
into a state tax allocation agreement with several New SAC
affiliates. The computation of taxes was similar to that under
the Tax Allocation Agreement. Effective June 30, 2001 the
state tax allocation agreement ceased to apply. As of
June 27, 2003, there were no tax-related receivables due to
Crystal Decisions from certain New SAC affiliates.

During fiscal 2002, the Companys Canadian
subsidiary transferred intellectual property to another foreign
subsidiary. The transaction resulted in current taxes of
$3.4 million, which were classified as assets on the
consolidated balance sheet and are being amortized over the life
of the transferred asset, which the Company has determined to be
two years. As of June 27, 2003, $1.7 million of the
asset remained on the consolidated balance sheet in
Prepaid and other current assets. As of
June 28, 2002, $1.7 million was classified in
Prepaid and other current assets and
$1.7 million was classified in Other non-current
assets.

F-30



---



##### 



CRYSTAL DECISIONS, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS

(continued)


Deferred income taxes reflect the net tax effects
of loss carryforwards and temporary differences between the
carrying amounts of assets and liabilities for financial
reporting purposes and the amounts used for income tax purposes.
The significant components of Crystal Decisions deferred
tax assets and liabilities consisted of the following (in
thousands):

|                                              |                                |          |         |          |  |   |         |        | 
|--------------------------------------------- | ------------------------------ | -------- | ------- | -------- |  | - | ------- | ------ | 
|                                              |                                | June 28, |         | June 27,
|                                              |                                | 2002     |         | 2003    
|                                              |                                |          |         |         
|Deferred tax assets                           |                                |          |         |          |  |   |         |       
|U.S. net operating loss carryforwards         |                                | $        | 56,170  |          |  | $ | 42,017  |       
|Foreign net operating loss carryforwards      |                                |          | 1,440   |          |  |   | 3,684   |       
|Accrued expenses and reserves                 |                                |          | 3,849   |          |  |   | 7,349   |       
|Excess of tax bases over book bases of assets |                                |          | 6,779   |          |  |   | 6,531   |       
|Other                                         |                                |          | 691     |          |  |   | 1,383   |       
|                                              |                                |          |         |          |  |   |         |       
|                                              | Total deferred tax assets      |          |         | 68,929   |  |   |         | 60,964 | 
|Valuation allowance                           |                                |          | (68,929 | )        |  |   | (49,683 | )     
|                                              |                                |          |         |          |  |   |         |       
|                                              | Net deferred tax assets        |          |         |         |  |   |         | 11,281 | 
|                                              |                                |          |         |          |  |   |         |       
|Deferred tax liabilities                      |                                |          |         |          |  |   |         |       
|Excess of book bases over tax bases of assets |                                |          | 583     |          |  |   | 1,284   |       
|                                              |                                |          |         |          |  |   |         |       
|                                              | Total deferred tax liabilities |          | $       | 583      |  |   | $       | 1,284  | 
|                                              |                                |          |         |          |  |   |         |       
|Total deferred tax assets
    (liabilities)   |                                | $        | (583    | )        |  | $ | 9,997   |       
|                                              |                                |          |         |          |  |   |         |       

Net deferred tax assets were comprised of
$10.2 million of current deferred tax assets and
$1.1 million of long-term deferred tax assets as of
June 27, 2003.

During fiscal 2003, the Company reduced its
valuation allowance against deferred tax assets to reflect the
amount of the future tax benefit that is more likely than not to
be realized. A valuation allowance continues to be provided
against those deferred tax assets for which there is uncertainty
of future realization.

The Company had foreign net operating losses of
approximately $12.3 million at June 27, 2003, which
may be used to offset future foreign taxable income. The
$12.3 million of net operating losses, except as may be
provided in the applicable tax laws, may be carried forward into
the future indefinitely.

F-31



---



##### 



CRYSTAL DECISIONS, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS

(continued)


12.     Net Income
(Loss) Per Share

Below is a reconciliation of the numerator and
denominator used to calculate net income (loss) per share (in
thousands, except per share data).

|                                                     |                                                                             |                    |       |          |         |          |      |        |        |   |      |        |        | 
|---------------------------------------------------- | --------------------------------------------------------------------------- | ------------------ | ----- | -------- | ------- | -------- | ---- | ------ | ------ | - | ---- | ------ | ------ | 
|                                                     |                                                                             |                   
|                                                     |                                                                             | Fiscal Years Ended
|                                                     |                                                                             |                   
|                                                     |                                                                             | June 29,           |       | June 28, |         | June 27,
|                                                     |                                                                             | 2001               |       | 2002     |         | 2003    
|                                                     |                                                                             |                    |       |          |         |         
|Basic net income (loss) per share
    computation:   |                                                                             |                    |       |          |         |          |      |        |        |   |      |       
|Numerator:                                           |                                                                             |                    |       |          |         |          |      |        |        |   |      |       
|                                                     |                                                                             | Net income (loss)  |       | $        | (11,469 | )        |      | $      | 12,955 |   |      | $      | 33,455 | 
|                                                     |                                                                             |                    |       |          |         |          |      |        |        |   |      |       
|Denominator:                                         |                                                                             |                    |       |          |         |          |      |        |        |   |      |       
|                                                     | Weighted average number of common shares
    outstanding                    |                    |       | 75,253   |         |          |      | 75,601 |        |   |      | 75,978 |       
|                                                     |                                                                             |                    |       |          |         |          |      |        |        |   |      |       
|Basic net income (loss) per share                    |                                                                             | $                  | (0.15 | )        |         | $        | 0.17 |        |        | $ | 0.44 |       
|                                                     |                                                                             |                    |       |          |         |          |      |        |        |   |      |       
|Diluted net income (loss) per share
    computation: |                                                                             |                    |       |          |         |          |      |        |        |   |      |       
|Numerator:                                           |                                                                             |                    |       |          |         |          |      |        |        |   |      |       
|                                                     | Net income (loss)                                                           |                    | $     | (11,469  | )       |          | $    | 12,955 |        |   | $    | 33,455 |       
|                                                     |                                                                             |                    |       |          |         |          |      |        |        |   |      |       
|Denominator:                                         |                                                                             |                    |       |          |         |          |      |        |        |   |      |       
|                                                     | Weighted average number of common shares
    outstanding                    |                    |       | 75,253   |         |          |      | 75,601 |        |   |      | 75,978 |       
|                                                     | Dilutive effect of stock options under the
    treasury stock method        |                    |       |         |         |          |      | 1,205  |        |   |      | 4,339  |       
|                                                     |                                                                             |                    |       |          |         |          |      |        |        |   |      |       
|                                                     | Weighted average number of common shares
    outstanding on a diluted basis |                    |       | 75,253   |         |          |      | 76,806 |        |   |      | 80,317 |       
|                                                     |                                                                             |                    |       |          |         |          |      |        |        |   |      |       
|Diluted net income (loss) per share                  |                                                                             | $                  | (0.15 | )        |         | $        | 0.17 |        |        | $ | 0.42 |       
|                                                     |                                                                             |                    |       |          |         |          |      |        |        |   |      |       

The number of anti-dilutive stock options
excluded from the net income calculation was 949,850 for fiscal
2002 and 565,978 for fiscal 2003.

13.     Stockholders
Equity

As at June 27, 2003, Crystal Decisions
authorized capital stock consisted of 150,000,000 shares of
common stock at $0.001 par value per share. No dividends have
been declared or paid to date by Crystal Decisions.



| |                                     
| | ------------------------------------
| | 1999 and 2000 Stock Option
    Plans

The Crystal Decisions 1999 and 2000 Stock Option
Plans (the Crystal Decisions Plans) provide for the
issuance of incentive and nonstatutory stock options to
employees, directors and consultants of Crystal Decisions, New
SAC and subsidiaries of the consolidated group.



| |                       
| | ----------------------
| | 1999 Stock Option Plan

Crystal Decisions reserved 22,500,000 shares
under the 1999 Stock Option Plan. Options granted under this
plan are generally granted at fair market value, expire 10 years
from the date of the grant and vest over 48 months, with
the shares subject to the option vesting as to 25% on the first
anniversary of the vesting commencement date and as to 1/48th of
the option per month thereafter. As of June 29, 2001,
June 28, 2002 and June 27, 2003 respectively,
10,680,856, 13,391,242 and 17,725,377 options were outstanding
under the 1999 stock option plan and 11,422,229, 8,245,862 and
3,684,042 options remained available for grant.

F-32



---



##### 



CRYSTAL DECISIONS, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS

(continued)




| |                       
| | ----------------------
| | 2000 Stock Option Plan

Crystal Decisions reserved 200,000 shares
under the 2000 Stock Option Plan. Options granted under this
plan were granted at fair market value, expire 10 years from the
date of grant and become fully vested and exercisable
immediately prior to a merger or asset sale, other than the New
SAC Transaction, or on the date an initial public offering of
Crystal Decisions common stock is declared effective by
the Securities and Exchange Commission. A dividend will be
recorded upon the vesting of these options at fair value under
SFAS 123. All of the options under this plan were granted
to employees of Seagate Technology before the New SAC
Transaction. As of June 29, 2001 and June 28, 2002,
respectively, 106,450 options were outstanding under the
2000 stock option plan and 93,550 options remained
available for grant. As of June 27, 2003,
103,450 options were outstanding under the 2000 stock
option plan and 96,550 options remained available for grant.

Following is a summary of stock option activity
of Crystal Decisions Plans:

|                         |             |               |            |                     |   |          |            |            |   |   |      |      | 
|------------------------ | ----------- | ------------- | ---------- | ------------------- | - | -------- | ---------- | ---------- | - | - | ---- | ---- | 
|                         |             |               |            |                    
|                         |             |               |            | Options Outstanding
|                         |             |               |            |                    
|                         |             |               |            | Number of           |   | Weighted
|                         |             | Shares        |            | Common              |   | Average 
|                         |             | Available for |            | Shares              |   | Exercise
|                         |             | Grant         |            | Issuable            |   | Price   
|                         |             |               |            |                     |   |         
|Balance at June 30, 2000 |             |               | 13,910,621 |                     |   |          | 8,788,329  |            |   | $ | 4.00 |     
|                         |             |               |            |                     |   |          |            |            |   |   |      |     
|                         | Granted     |               |            | (3,305,615          | ) |          |            | 3,305,615  |   |   |      | 4.00 | 
|                         | Exercised   |               |            |                    |   |          |            | (395,865   | ) |   |      | 4.00 | 
|                         | Cancelled   |               |            | 910,773             |   |          |            | (910,773   | ) |   |      | 4.00 | 
|                         |             |               |            |                     |   |          |            |            |   |   |      |     
|Balance at June 29, 2001 |             |               | 11,515,779 |                     |   |          | 10,787,306 |            |   |   | 4.00 |     
|                         |             |               |            |                     |   |          |            |            |   |   |      |     
|                         | Granted     |               |            | (3,820,338          | ) |          |            | 3,820,338  |   |   |      | 4.49 | 
|                         | Exercised   |               |            |                    |   |          |            | (466,231   | ) |   |      | 4.00 | 
|                         | Cancelled   |               |            | 643,721             |   |          |            | (643,721   | ) |   |      | 4.07 | 
|                         | Repurchased |               |            | 250                 |   |          |            |           |   |   |      | 4.00 | 
|                         |             |               |            |                     |   |          |            |            |   |   |      |     
|Balance at June 28, 2002 |             |               | 8,339,412  |                     |   |          | 13,497,692 |            |   |   | 4.14 |     
|                         |             |               |            |                     |   |          |            |            |   |   |      |     
|                         | Granted     |               |            | (5,614,225          | ) |          |            | 5,614,225  |   |   |      | 5.79 | 
|                         | Exercised   |               |            |                    |   |          |            | (227,685   | ) |   |      | 4.03 | 
|                         | Cancelled   |               |            | 1,055,405           |   |          |            | (1,055,405 | ) |   |      | 4.77 | 
|                         |             |               |            |                     |   |          |            |            |   |   |      |     
|Balance at June 27, 2003 |             |               | 3,780,592  |                     |   |          | 17,828,827 |            |   | $ | 4.62 |     
|                         |             |               |            |                     |   |          |            |            |   |   |      |     

F-33



---



##### 



CRYSTAL DECISIONS, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS

(continued)


The following table summarizes the status of the
Companys stock options outstanding and exercisable at
June 27, 2003:

|                    |      |                     |  |            |            |          |  |           |     |          |  |   |      |  |  |  |           |  |  |   |      | 
|------------------- | ---- | ------------------- |  | ---------- | ---------- | -------- |  | --------- | --- | -------- |  | - | ---- |  |  |  | --------- |  |  | - | ---- | 
|                    |      |                    
|Options Outstanding |      | Exercisable Options
|                    |      |                    
|                    |      | Weighted            |  |            |            |         
|                    |      | Average             |  |            |            |         
|                    |      | Remaining           |  | Weighted   |            |          |  | Weighted 
|                    |      | Contractual         |  | Average    |            |          |  | Average  
|                    |      | Number of           |  | Life       |            | Exercise |  | Number    |     | Exercise
|Exercise Price      |      | Shares              |  | (In Years) |            | Price    |  | of Shares |     | Price   
|                    |      |                     |  |            |            |          |  |           |     |         
|$                   | 4.00 |                     |  |            | 9,609,674  |          |  |           | 6.8 |          |  | $ | 4.00 |  |  |  | 7,940,671 |  |  | $ | 4.00 | 
|                    | 4.25 |                     |  |            | 2,260,792  |          |  |           | 8.3 |          |  |   | 4.25 |  |  |  | 952,762   |  |  |   | 4.25 | 
|                    | 5.00 |                     |  |            | 243,309    |          |  |           | 8.5 |          |  |   | 5.00 |  |  |  | 97,049    |  |  |   | 5.00 | 
|                    | 5.50 |                     |  |            | 4,655,687  |          |  |           | 9.4 |          |  |   | 5.50 |  |  |  | 127,168   |  |  |   | 5.50 | 
|                    | 6.00 |                     |  |            | 493,387    |          |  |           | 9.2 |          |  |   | 6.00 |  |  |  | 79,453    |  |  |   | 6.00 | 
|                    | 8.00 |                     |  |            | 565,978    |          |  |           | 9.9 |          |  |   | 8.00 |  |  |  |          |  |  |   |     | 
|                    |      |                     |  |            |            |          |  |           |     |          |  |   |      |  |  |  |           |  |  |   |      | 
|                    |      |                     |  |            | 17,828,827 |          |  |           | 7.9 |          |  | $ | 4.62 |  |  |  | 9,197,103 |  |  | $ | 4.07 | 
|                    |      |                     |  |            |            |          |  |           |     |          |  |   |      |  |  |  |           |  |  |   |      | 

Pro Forma Effect of
Stock-Based Compensation

Crystal Decisions has elected to measure
compensation expense for its 1999 Stock Option Plan using the
intrinsic value method prescribed by APB 25 and related
interpretations.

As required by SFAS 123, as modified by SFAS 148,
the Company is required to present pro forma disclosure of the
effects of using the fair value method and has done so in
note 3 Stock-Based Compensation. For purposes
of the pro forma disclosure, management estimates the fair value
of stock options issued to employees using the Black-Scholes
option valuation model. This model was developed for use in
estimating the fair value of traded options that have no vesting
restrictions and are fully transferable. In addition, option
valuation models require the input of highly subjective
assumptions, including the expected life of options and the
Companys expected stock price volatility. Therefore, the
estimated fair value of the Companys employee stock
options could vary significantly as a result in changes in the
assumptions used.

The weighted average assumptions used and the
resulting estimates of weighted-average fair value of options
granted during the following periods were as follows:

|                                                                     |  |                    |            |          |  |          |         |   |  |   |         |  
|-------------------------------------------------------------------- |  | ------------------ | ---------- | -------- |  | -------- | ------- | - |  | - | ------- | -
|                                                                     |  |                   
|                                                                     |  | Fiscal Years Ended
|                                                                     |  |                   
|                                                                     |  | June 29,           |            | June 28, |  | June 27,
|                                                                     |  | 2001               |            | 2002     |  | 2003    
|                                                                     |  |                    |            |          |  |         
|Volatility factor                                                    |  |                    | 99         | %        |  |          | 101     | % |  |   | 98      | %
|Expected life of stock options                                       |  |                    | 2.82 years |          |  |          | 3 years |   |  |   | 3 years |  
|Risk-free interest rate                                              |  |                    | 5.6        | %        |  |          | 4.0     | % |  |   | 1.7     | %
|Dividend yields                                                      |  |                    | 0.0        | %        |  |          | 0.0     | % |  |   | 0.0     | %
|Weighted-average fair value of options granted
    during the period |  | $                  | 3.06       |          |  | $        | 2.88    |   |  | $ | 3.59    |  

Until October 22, 2000, the employees of
Crystal Decisions were eligible to participate in the Old
Seagate Employee Stock Purchase Plan (Purchase
Plan). The weighted average fair value of shares granted
under Purchase Plan was $11.47 in fiscal 2000. The fair value
was estimated assuming no dividends and the following weighted
average assumptions: an expected life of six months, a risk-free
interest rate of 5.7% and a volatility of 78%. The weighted
average purchase price of shares granted under the Purchase Plan
was $23.38 per share in fiscal 2000. The estimated fair
value of the options was amortized over the six-month purchase
period for stock purchases under the Purchase Plan ending
October 22, 2000.

F-34



---



##### 



CRYSTAL DECISIONS, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS

(continued)


For purposes of pro forma disclosures pursuant to
SFAS 123, the expected volatility assumptions used by the
Company have been based on an average of the Companys
competitors historical volatilities over the expected life
of the stock options.



| |                                       
| | --------------------------------------
| | Common Stock Subject to
    Repurchase

Under the provisions of the 1999 Stock Option
Plan, a former employee and certain non-employee directors have
exercised certain of their options to purchase common stock,
including the unvested portion. At the option of Crystal
Decisions and within 30 days of termination of these
individuals, Crystal Decisions may, but is not obligated to,
repurchase the unvested shares at the original purchase price.
As of June 29, 2001, June 28, 2002 and June 27,
2003, respectively, there were 129,001, 70,834 and 17,085
unvested shares that could become subject to repurchase at an
aggregate repurchase price of $516,004, $283,336 and $68,340,
respectively.

14.     Revolving
Loan Agreements

Seagate
Technology

On July 4, 2001, Crystal Decisions and
Seagate Technology renewed the Revolving Loan Agreement
originally dated June 28, 1996, which was previously with
Old Seagate. The renewed Revolving Loan Agreement provided for
maximum outstanding borrowings of up to $15.0 million,
which was reduced from the amended loan dated July 4, 2000,
which provided for maximum outstanding borrowings of up to
$60.0 million. As explained in note 11, the Company
also had amounts receivable from (or payable to) Old Seagate
under the Tax Allocation Agreement for income tax loss benefits
utilized by Old Seagate relative to Crystal Decisions tax
loss position.

The loan balance due to Old Seagate was offset
against the net receivable pursuant to the Tax Allocation
Agreement in accordance with the terms of the contractual
agreements.

The Revolving Loan Agreement expired on
July 4, 2002 and was not renewed. The net receivable or net
payable balance was presented on the consolidated balance sheets
in accordance with the terms of the Revolving Loan Agreement and
Tax Allocation Agreement.

Prior to fiscal 2001, certain of Crystal
Decisions working capital requirements were financed
through the revolving loan agreements and at July 2, 1999
there was a net payable balance due to Old Seagate. At
June 30, 2000, there was a net receivable balance due from
Old Seagate of $25.7 million, largely as the result of
amounts due from Old Seagate Under the Tax Allocation Agreement
for income tax loss benefits utilized by Old Seagate relative to
Crystal Decisions tax loss position.

During the three months ended June 29, 2001,
Seagate Technology repaid $31.0 million of the net balance
receivable under the Revolving Loan Agreement, thereby
decreasing the receivable balance at June 29, 2001 to
$3.4 million. During the three months ended
September 28, 2001, Seagate Technology repaid the remaining
portion of the receivable balance. At June 28, 2002, or on
the expiration of the Revolving Loan Agreement on July 4,
2002, there was no net balance receivable or payable under the
Revolving Loan Agreement.

During all periods, interest income or expense
was calculated on a monthly basis on the outstanding net
receivable or net payable revolving loan balance. During
fiscal 2001, net interest income of $1.8 million was
earned at an average rate of 6.46%. During fiscal 2002, net
interest income of $301,000 was earned at an average rate of
3.71% for the first fiscal quarter of 2002.

F-35



---



##### 



CRYSTAL DECISIONS, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS

(continued)


During fiscal 2001 and 2002, interest income
was earned at Seagate Technologys in-house portfolio yield
rate.

Comerica
Bank-California

In October 2002, Crystal Decisions executed an
accounts receivable-based revolving facility (the
Revolving Line) with Comerica Bank-California
(Comerica). The Revolving Line provides up to
$15.0 million in borrowings for general working capital
purposes. Interest is calculated, depending on the nature of the
advance, at either the U.S. prime rate or LIBOR plus 2.5% per
annum. On prime rate advances, interest is payable monthly. On
LIBOR advances, interest is payable on a quarterly basis and at
the end of each LIBOR period. Borrowings under the Revolving
Line are limited to 80% of eligible accounts receivable, with an
additional $2.0 million available in any month in which
Crystal Decisions maintains $15.0 million of its investment
accounts with Comerica or its affiliates. The Revolving Line
expires on September 30, 2004 at which time the outstanding
principal and interest payable balances are due immediately.
Upon notice to Comerica and without penalty, Crystal Decisions
may terminate the agreement at any time provided that all
obligations have been paid in full. The Revolving Line is
collateralized by substantially all the Companys personal
property, excluding intellectual property. The agreement also
required the Companys U.S. and Canadian subsidiaries to
pledge their assets in support of Crystal Decisions
obligations under the agreement. The Company was required to
pledge shares of most of its subsidiaries to Comerica.

The terms of the Revolving Line require Crystal
Decisions to maintain certain quarterly financial covenants
related to liquidity, minimum tangible net worth and quarterly
free cash flow. The agreement restricts certain of the
Companys activities. For example, it restricts the Company
from selling, leasing or otherwise disposing of any part of the
business or property under most circumstances. In addition, the
agreement prohibits the Company from entering into arrangements
which will result in a change of control or in which the Company
would incur certain forms of indebtedness without
Comericas consent. The Company is also restricted from
making certain types of distributions and investments. The
Company is required to maintain at least an aggregate of
$10.0 million in investment accounts with Comerica and some
of its affiliates. No amounts were outstanding under the
Revolving Line at June 27, 2003. At June 27, 2003,
Crystal Decisions maintained $57.1 million of its cash
equivalents balance with Comerica. During fiscal 2003, Crystal
Decisions earned interest of $281,000 on its deposits with
Comerica at an average rate of 1.6% for the year.



|    |                                     
|--- | ------------------------------------
|15. | Debt Guarantees and Pledge of Assets

On November 22, 2000, as part of the
financing of the New SAC Transaction, New SAC, through an
indirect subsidiary Seagate Technology (U.S.) Holdings, Inc.,
entered into a credit agreement for senior credit facilities
with a syndicate of banks and other financial institutions (the
Credit Agreement). The senior credit facilities
negotiated under the Credit Agreement provided senior secured
financing of up to $900 million, consisting of
$700 million of term loans and a $200 million
revolving credit facility. In addition, Seagate Technology
International, which is an indirect subsidiary of New SAC,
issued unsecured senior subordinated notes (the
Notes) under an Indenture dated November 22,
2000, at a discount to the aggregate principal amount of
$210 million, for gross proceeds of approximately
$201 million. The Notes had an original maturity date of
November 15, 2007 and incurred interest payable
semi-annually at a rate of 12.5% per annum.

F-36



---



##### 



CRYSTAL DECISIONS, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS

(continued)


Under these agreements, New SAC and certain of
its subsidiaries, including Crystal Decisions and certain of its
subsidiaries, were guarantors on a joint and several, whole and
unconditional basis, of the senior credit facilities and the
Notes. In addition, the majority of New SACs and certain
of its subsidiaries assets, including certain of Crystal
Decisions assets and its capital stock, were pledged
against the term loans under the Credit Agreement. Also, New
SAC, and certain of its subsidiaries, including Crystal
Decisions and certain of its subsidiaries, had agreed to certain
covenants under the Credit Agreement and the Notes, including
restrictions on future equity and borrowing transactions,
business acquisitions and disposals, making certain restricted
payments and dividends, making certain capital expenditures,
incurring guarantee obligations and engaging in mergers or
consolidations.

As New SAC did not require Crystal
Decisions cash flow to be used to service the obligations
pursuant to the Credit Agreement or the Notes, and as the
Company believed that none of the guarantees or pledges of
assets under the term loans or its guarantee obligations under
the Indenture were likely to be invoked, Crystal Decisions
consolidated financial statements did not reflect any of the
proportionate debt and interest charges related to the financing
of the New SAC Transaction.

On May 13, 2002, New SAC and its affiliates
completed a refinancing of the secured credit facilities and a
tender offer for all of the outstanding Notes and repaid the
remaining balance outstanding on the terms loans under the
former senior secured credit facilities. Crystal Decisions and
its subsidiaries were released from all of the guarantees,
pledge of assets and restrictive covenants that existed under
the Credit Agreement and Indenture. Crystal Decisions did not
fund any debt or interest repayments in respect to the Credit
Agreement during the period the credit remained outstanding.



|    |                                                
|--- | -----------------------------------------------
|16. | Business Segment and Geographic
    Information

Crystal Decisions operates in a single business
segment  information management software. Crystal
Decisions markets its products and services in the United
States and in foreign countries through its direct sales force
and indirect distribution channels. Within the segment, the
chief operating decision maker, Crystal Decisions chief
executive officer, evaluates the performance of the business
based upon revenues from product and services, revenues by
geographic regions and revenues by product channels.

Product and services
revenues (in thousands):

|                                  |                |                    |         |          |  |          |         |         |  |   |         |         | 
|--------------------------------- | -------------- | ------------------ | ------- | -------- |  | -------- | ------- | ------- |  | - | ------- | ------- | 
|                                  |                |                   
|                                  |                | Fiscal Years Ended
|                                  |                |                   
|                                  |                | June 29,           |         | June 28, |  | June 27,
|                                  |                | 2001               |         | 2002     |  | 2003    
|                                  |                |                    |         |          |  |         
|Licensing                         |                | $                  | 107,028 |          |  | $        | 140,009 |         |  | $ | 185,532 |        
|Maintenance, support and services |                |                    | 60,694  |          |  |          | 77,161  |         |  |   | 101,976 |        
|                                  |                |                    |         |          |  |          |         |         |  |   |         |        
|                                  | Total revenues |                    | $       | 167,722  |  |          | $       | 217,170 |  |   | $       | 287,508 | 
|                                  |                |                    |         |          |  |          |         |         |  |   |         |        

F-37



---



##### 



CRYSTAL DECISIONS, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS

(continued)


Geographic revenues (in
thousands)(1):

|              |                |                    |         |          |  |          |         |         |  |   |         |         | 
|------------- | -------------- | ------------------ | ------- | -------- |  | -------- | ------- | ------- |  | - | ------- | ------- | 
|              |                |                   
|              |                | Fiscal Years Ended
|              |                |                   
|              |                | June 29,           |         | June 28, |  | June 27,
|              |                | 2001               |         | 2002     |  | 2003    
|              |                |                    |         |          |  |         
|North America |                | $                  | 123,450 |          |  | $        | 159,836 |         |  | $ | 211,944 |        
|Europe(2)     |                |                    | 31,812  |          |  |          | 41,770  |         |  |   | 54,649  |        
|Asia Pacific  |                |                    | 12,460  |          |  |          | 15,564  |         |  |   | 20,915  |        
|              |                |                    |         |          |  |          |         |         |  |   |         |        
|              | Total revenues |                    | $       | 167,722  |  |          | $       | 217,170 |  |   | $       | 287,508 | 
|              |                |                    |         |          |  |          |         |         |  |   |         |        

Channel revenues (in
thousands):

|            |                |                    |         |          |  |          |         |         |  |   |         |         | 
|----------- | -------------- | ------------------ | ------- | -------- |  | -------- | ------- | ------- |  | - | ------- | ------- | 
|            |                |                   
|            |                | Fiscal Years Ended
|            |                |                   
|            |                | June 29,           |         | June 28, |  | June 27,
|            |                | 2001               |         | 2002     |  | 2003    
|            |                |                    |         |          |  |         
|Direct      |                | $                  | 106,104 |          |  | $        | 145,944 |         |  | $ | 191,023 |        
|Indirect(3) |                |                    | 61,618  |          |  |          | 71,226  |         |  |   | 96,485  |        
|            |                |                    |         |          |  |          |         |         |  |   |         |        
|            | Total revenues |                    | $       | 167,722  |  |          | $       | 217,170 |  |   | $       | 287,508 | 
|            |                |                    |         |          |  |          |         |         |  |   |         |        

Long-lived tangible
assets (in thousands):

|              |                                  |          |        |          |  |   |        |        | 
|------------- | -------------------------------- | -------- | ------ | -------- |  | - | ------ | ------ | 
|              |                                  | June 28, |        | June 27,
|              |                                  | 2002     |        | 2003    
|              |                                  |          |        |         
|United States |                                  | $        | 587    |          |  | $ | 416    |       
|Canada        |                                  |          | 14,933 |          |  |   | 21,903 |       
|Other         |                                  |          | 381    |          |  |   | 2,498  |       
|              |                                  |          |        |          |  |   |        |       
|              | Total long-lived tangible assets |          | $      | 15,901   |  |   | $      | 24,817 | 
|              |                                  |          |        |          |  |   |        |       

Reconciliation of total
assets (in thousands):

|                                 |              |          |         |          |  |   |         |         | 
|-------------------------------- | ------------ | -------- | ------- | -------- |  | - | ------- | ------- | 
|                                 |              | June 28, |         | June 27,
|                                 |              | 2002     |         | 2003    
|                                 |              |          |         |         
|Total long-lived tangible assets |              | $        | 15,901  |          |  | $ | 24,817  |        
|Other assets, including current  |              |          | 120,945 |          |  |   | 183,881 |        
|                                 |              |          |         |          |  |   |         |        
|                                 | Total assets |          | $       | 136,846  |  |   | $       | 208,698 | 
|                                 |              |          |         |          |  |   |         |        



---



|    |                                                                                           
|--- | ------------------------------------------------------------------------------------------
|(1) | Revenues are attributed to geographic locations
    based on the location of the customer.
|   
|(2) | Europe includes the Middle East and Africa.                                               
|   
|(3) | Includes distributors, resellers and OEMs.                                                

A third-party customer, Ingram Micro, accounted
for a total of $27.7 million, $21.0 million and
$24.6 million, of total revenues during fiscal 2001, fiscal
2002 and fiscal 2003, respectively. No other customer accounted
for 10% or more of Crystal Decisions total revenues during
fiscal 2001, fiscal 2002 or fiscal 2003.

17.     Commitments



| |       
| | ------
| | Leases

Crystal Decisions leases its facilities under
lease agreements. Rent expense for facilities under operating
leases was $6.4 million, $7.8 million and
$8.4 million for fiscal 2001, fiscal 2002

F-38



---



##### 



CRYSTAL DECISIONS, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS

(continued)


and fiscal 2003, respectively. Facility operating
leases expire at various dates through fiscal 2015 and contain
various provisions for rental adjustments. The leases require
Crystal Decisions to pay property taxes, insurance and normal
maintenance costs. Crystal Decisions also occupies two
facilities leased by Seagate Technology for which fair value
rent and related costs of approximately $340,000 per annum are
charged. One of these subleases is expected to end in September
2003. Approximate minimum lease payments for the Companys
facilities were as follows at June 27, 2003 (in thousands):

|             |                                     |   |        |        | 
|------------ | ----------------------------------- | - | ------ | ------ | 
|Fiscal Years |                                     |   |        |       
|2004         |                                     | $ | 8,361  |       
|2005         |                                     |   | 6,349  |       
|2006         |                                     |   | 4,926  |       
|2007         |                                     |   | 4,236  |       
|2008         |                                     |   | 3,905  |       
|Thereafter   |                                     |   | 20,232 |       
|             |                                     |   |        |       
|             | Total future minimum lease payments |   | $      | 48,009 | 
|             |                                     |   |        |       

Donation of
Cash

On May 12, 2003, the Companys Board of
Directors approved a pledge of $1.0 million in cash as an
endowment to the Community Foundation of Silicon Valley. The
pledge was accrued and expensed at June 27, 2003 and was
paid on June 30, 2003.

In addition, the Companys Board approved
that a charitable matching plan be established pursuant to which
the Company will match employee donations to the charitable
organization described above. The matching of contributions will
be on a dollar for dollar basis subject to a maximum annual
charitable contribution by the Company in any fiscal year of an
amount equal to 1% of the Companys income before interest,
taxes and amortization for the prior fiscal year. This plan
shall continue from fiscal year to fiscal year. The amount
accrued by Crystal Decisions under this matching plan for fiscal
2003 was approximately $220,000 which was paid to the Foundation
in July 2003. The maximum amount that could be paid by Crystal
Decisions under this matching plan for fiscal 2004 is
approximately $453,000.

The Community Foundation of Silicon Valley is an
independent, public benefit organization that provides grants to
charitable groups in areas such as education, arts and cultural
participation and neighborhoods and civic engagement. The
Community Foundation of Silicon Valley also works with
independent, public benefit organizations to provide grants that
are used in communities outside of the San Francisco bay area.
The Community Foundation of Silicon Valley awards grants equal
to at least 5% of its endowment annually.

18.     Litigation

In November 1997, Vedatech Corporation
(Vedatech) commenced an action in the Chancery
Division of the High Court of Justice in the United Kingdom
against Crystal Decisions (UK) Limited, a wholly owned
subsidiary of Crystal Decisions. The liability phase of the
trial was completed in March 2002, with Crystal Decisions
prevailing on all claims except for a quantum meruit claim. The
court ordered the parties to mediate the amount of that claim
and, in August 2002, the parties came to a mediated settlement.
The mediated settlement was not material to Crystal
Decisions operations and contained no continuing
obligations. In September 2002, however, the Company received a
notice that Vedatech is seeking to set aside the settlement. The
mediated settlement and related costs are accrued in the
consolidated financial statements. In April 2003, Crystal
Decisions filed an action in the High Court of Justice seeking a
declaration

F-39



---



##### 



CRYSTAL DECISIONS, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS

(continued)


that the mediated settlement agreement is valid
and binding. In connection with this request for declaratory
relief Crystal Decisions paid the agreed settlement amount into
the court. Although Crystal Decisions believes that
Vedatechs basis for seeking to set aside the mediated
settlement is meritless, the outcome cannot be determined at
this time. If the mediated settlement were to be set aside, a
negative outcome could adversely affect Crystal Decisions
financial position and results of operations.

In addition to the foregoing, Crystal Decisions
is subject to other litigation in the ordinary course of its
business. Where the Company believes a loss is probable and can
be reasonably estimated, the estimated loss is accrued in the
consolidated financial statements. Where the outcome of these
matters is not determinable no provision is made in the
financial statements until the loss, if any, is probable and can
be reasonably estimated or the outcome becomes known.

While Crystal Decisions believes that the
ultimate outcome of these matters will not have a material
adverse effect on the Company, the outcome of these matters is
not determinable and negative outcomes may adversely effect
Crystal Decisions financial position or results of
operations.

19.     Subsequent
Events



| |                                         
| | ----------------------------------------
| | Acquisition by Business Objects
    S.A.

On July 18, 2003, the Company, Business
Objects S.A., a society anonyme organized under the laws
of the Republic of France (Business Objects), Borg
Merger Sub I, Inc., a Delaware corporation and wholly-owned
subsidiary of Business Objects (Merger Sub 1),
Borg Merger Sub II, Inc., a Delaware corporation and
wholly-owned subsidiary of Business Objects (Merger
Sub 2), Borg Merger Sub III, Inc., a Delaware
corporation and wholly-owned subsidiary of Business Objects
(Merger Sub 3), and Seagate Software (Cayman)
Holdings (HoldCo), entered into an Agreement and
Plan of Merger (the Merger Agreement). Subject to
satisfaction or waiver of the conditions in accordance with the
Merger Agreement, (i) Merger Sub 1 will merge with and
into HoldCo (the HoldCo Merger),
(ii) immediately following the HoldCo Merger, the surviving
corporation of the HoldCo Merger will merge with and into Merger
Sub 2 (the Second HoldCo Merger),
(iii) immediately following the Second HoldCo Merger,
Merger Sub 3 will merge with and into the Company (the
Crystal Merger), and (iv) immediately following
the Crystal Merger, the surviving corporation of the Crystal
Merger will merge with and into the surviving corporation of the
Second HoldCo Merger (the Second Crystal Merger and
together with the HoldCo Merger, the Second HoldCo Merger and
Crystal Merger, the Mergers). Upon completion of the
Mergers, Crystal Decisions and HoldCo will be merged with
subsidiaries of Business Objects and the surviving company will
be a wholly owned subsidiary of Business Objects.

Under the terms of the Merger Agreement, upon
consummation of the Mergers, holders of common stock of HoldCo
and holders of the Companys common stock (other than
HoldCo and other than the Companys stockholders who
exercise appraisal rights under Delaware law), in each case
issued and outstanding immediately prior to the consummation of
the Mergers, will receive, subject to certain adjustments,
(i) a number of newly issued Business Objects American
depositary shares (ADSs), each ADS representing one
ordinary share of Business Objects, (or, at the election of any
such stockholder, ordinary shares of Business Objects)
calculated in accordance with the provisions of the Merger
Agreement based on the number of shares of the Companys
common stock issued and outstanding immediately prior to the
consummation of the

F-40



---



##### 



CRYSTAL DECISIONS, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS

(continued)


Mergers, and (ii) a proportionate share of
$300 million in cash, without interest. In addition, other
than as set forth in the next sentence options to acquire the
Companys common stock outstanding immediately prior to the
consummation of the Mergers will, upon consummation of the
Mergers, be converted into options to acquire Business Objects
ADSs. Stock options held by nonemployee members of the
Companys Board of Directors, or that have been granted
under the Companys 1999 Plan  UK sub-plan or
the Companys 2000 Plan will vest in full prior to the
closing of the Mergers and will not be assumed or converted.
Based on the shares of the Companys common stock
outstanding on a fully diluted basis (calculated using the
treasury share method) as of the close of business on
July 18, 2003 and the market price of Business Objects ADSs
as of such date, as a result of the Mergers, Business Objects
would issue approximately 26.5 million ordinary shares
(whether initially in the form of ordinary shares or ADSs).
Holders of the Companys common stock will also receive
cash in lieu of fractional shares of Business Objects ADSs to
which they would otherwise be entitled.

The Mergers are conditioned upon, among other
things, (i) the approval of the stockholders of Business
Objects and the Company, as applicable, (ii) clearance
under the Hart-Scott-Rodino Antitrust Improvements Act of 1976
and the receipt of any other material approvals under applicable
foreign antitrust laws, and (iii) other customary
conditions. In lieu of a meeting of the stockholders of the
Company, on July 18, 2003, HoldCo, which held approximately
98.6% of the outstanding shares of the Companys common
stock on such date, executed an action by written consent
approving and adopting the Merger Agreement and approving the
Crystal Merger and the Second Crystal Merger.

In connection with the execution of the Merger
Agreement, Business Objects, New SAC, the sole stockholder of
HoldCo, and certain stockholders of New SAC, entered into a
stockholders agreement (the Stockholders Agreement),
which will become effective upon the completion of the Mergers.
The Stockholders Agreement sets forth the rights and obligations
of the parties thereto with respect to various corporate matters
of Business Objects following the completion of the Mergers.
Among other things, the Stockholders Agreement contains
provisions that address standstill restrictions, transfer
restrictions, registration rights and board representation.

In connection with the execution of the Merger
Agreement, Business Objects, Merger Sub 1, Merger
Sub 2, Merger Sub 3, and New SAC, entered into a
support agreement (the Support Agreement), pursuant
to which, among other things, New SAC agreed to execute an
action by written consent approving the Merger Agreement and
approving the HoldCo Merger and the Second HoldCo Merger. New
SAC delivered such executed action by written consent to
Business Objects on July 22, 2003.

In connection with the execution of the Merger
Agreement, Business Objects, Merger Sub 1, Merger
Sub 2, Merger Sub 3 and HoldCo, entered into a support
agreement (the Company Support Agreement), pursuant
to which, among other things, HoldCo agreed to execute an action
by written consent approving the Merger Agreement and approving
the Crystal Merger and the Second Crystal Merger. HoldCo
delivered such executed action by written consent to Business
Objects on July 18, 2003.

In connection with the execution of the Merger
Agreement, Business Objects, the Company and certain
stockholders of Business Objects entered into voting agreements
(the Voting Agreements), pursuant to which, among
other things, such Business Objects stockholders agreed to vote
their shares in favor of the Mergers and certain related matters.

F-41



---



##### 



CRYSTAL DECISIONS, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS

(continued)


The parties intend for the merger to be
considered a tax-free reorganization under the Internal Revenue
Code with respect to the Business Objects ADSs, or ordinary
shares, issued to the Companys stockholders. The Merger
Agreement has been approved by the board of directors of both
companies. The Mergers are currently expected to close before
the end of calendar 2003. In the event that the Company fails to
close the proposed merger due to the occurrence of certain
events, the Company may be required to pay Business Objects a
termination fee equal to $21 million.



| |                        
| | -----------------------
| | Initial Public Offering

On May 12, 2003, the Companys Board of
Directors approved an initial public offering of shares of
common stock of Crystal Decisions under the Securities Act of
1933. The Company filed a registration statement on
Form S-1 with the Securities and Exchange Commission on
May 23, 2003. Prior to the proposed initial public
offering, there has been no public market for the common stock
of Crystal Decisions. On July 18, 2003, the Companys
Board of Directors elected to defer the proposed initial public
offering and related matters pending the closing of the proposed
acquisition of the Company by Business Objects.



| |                    
| | -------------------
| | Reverse Stock Split

On May 12, 2003, the Companys Board of
Directors approved a one for two reverse stock split of the
Companys stock subject to the approval by the
Companys stockholders. The reverse split was not to become
effective until approved by the Companys stockholders,
however, the financial statements filed in the Companys
Registration Statement on Form S-1 (file
no. 333-105559), as amended, gave retroactive effect to the
one for two reverse stock split. In connection with the
Companys proposed acquisition by Business Objects, the
Companys Board of Directors determined not to proceed with
the reverse stock split and these consolidated financial
statements are stated on a pre-split basis.



| |                       
| | ----------------------
| | New Stock Option Plans

On May 12, 2003, the Companys Board of
Directors approved, subject to stockholder approval, the
following actions to occur concurrent with the effectiveness of
the Companys planned initial public offering:



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Termination of the 1999 Stock Option Plan and
    2000 Stock Option Plan as to future option grants other than
    pursuant to subplans for certain of the Companys
    subsidiaries outside of the United States until such time as new
    sub-plans for these foreign subsidiaries have received any
    necessary qualification under applicable foreign laws.                                                                                                                                                                                                                     
|
| |  | Adoption of the 2002 Stock Option
    Plan  5,000,000 shares of common stock will be
    reserved for issuance under the 2002 Stock Option Plan. On the
    first day of each fiscal year, starting with July 3, 2004,
    the number of shares in the reserve will increase by the lesser
    of 7,500,000 shares of common stock; 5.0% of outstanding shares
    of common stock on the last day of the previous fiscal year; or
    an amount determined by the Board of Directors. The plan will
    terminate in May 2013, unless the Board of Directors
    terminates it sooner.
|
| |  | Adoption of the 2002 Director Option
    Plan  250,000 shares of common stock will be
    reserved for issuance under the 2002 Director Option Plan. On
    the first day of each fiscal year, starting with July 3,
    2004, the number of shares in the reserve will increase by the
    lesser of 300,000 shares of common stock; 0.2% of
    outstanding shares of                                                                                                                                                                                                                

F-42



---



##### 



CRYSTAL DECISIONS, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS

(continued)




| |  |                                                                                                                                                                                                                  
| |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | common stock on the last day of the previous
    fiscal year; or an amount determined by the Board of Directors.
    The plan will terminate in May 2013, unless the Board of
    Directors terminates it sooner.



| |                 
| | ----------------
| | Rescission Offer

Certain shares issued and option grants made
under the 1999 Stock Option Plan to residents of California,
Maryland and New York may not have complied with all applicable
securities laws of those states. Accordingly, the Company is
planning to make a rescission offer to these stockholders and
optionees which will allow the holders to elect, during a
limited period of time, to return their shares or options to the
Company in return for a payment equal to their purchase price or
20% of their aggregate exercise price, plus any applicable
interest. As of June 27, 2003, approximately
291,010 outstanding shares of the Companys common
stock and approximately 1,361,928 outstanding options will be
subject to the rescission offer. The shares and options had
purchase and exercise prices ranging from $4.00 to $8.00 per
share. The Company does not believe that the holders of these
shares of the Companys common stock and options to
purchase the Companys common stock will accept the
Companys offer because the prices at which the Company is
offering to repurchase them are less than the fair market value
of the Business Objects ADSs and cash that the Companys
stockholders will receive and estimated fair value market value
of the options to acquire Business Objects ADSs the
Companys optionees will receive if Business Objects
proposed acquisition of the Company is completed. However, in
the unlikely event that all of these persons accepted the
Companys offer, the Company would make total payments of
approximately $2.9 million, which the Company would fund
from the Companys existing cash balances.

At the time the rescission offer is mailed to
stockholders and optionees, Crystal Decisions will reclassify
the share capital and related additional paid-in capital
associated with the redeemable stock on the consolidated balance
sheets as Redeemable Common Stock, outside of
stockholders equity. The carrying value of the redeemable
common stock will be equal to the exercise price of the stock
subject to the rescission offer plus applicable interest from
the date of exercise until acceptance by stockholders of the
rescission offer. At the date the rescission offer expires,
which is a period of no longer than 30 days from the offer
date, the eligible common stock that were not redeemed and the
related additional paid-in capital will be reinstated. The
interest paid on the repurchase of shares on acceptance of the
offer, if any, will be charged as additional paid-in capital. In
addition, on the expiration of the offer, the Company will
record compensation cost and a related liability equal to the
purchase price of outstanding options for which the rescission
offer has been accepted.

F-43



---



##### 



EXHIBIT INDEX

|          |  |                                                                                                                                                                                                                                                          
|--------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit   |  |                                                                                                                                                                                                                                                          
|Number    |  | Description                                                                                                                                                                                                                                              
|          |  |                                                                                                                                                                                                                                                          
|2.1(17)   |  | Agreement and Plan of Merger dated as of
    July 18, 2003, by and among Business Objects, S.A., Borg
    Merger Sub I, Inc., Borg Merger Sub II, Inc., Borg
    Merger Sub III, Inc., Crystal Decisions, Inc. and Seagate
    Software (Cayman) Holdings
|2.2(17)   |  | Stockholders Agreement dated as of July 18,
    2003, by and among Business Objects, S.A., New SAC and certain
    other stockholders                                                                                                                    
|2.3(17)   |  | Support Agreement dated as of July 18, 2003,
    by and among Business Objects, S.A., Borg Merger Sub I,
    Inc., Borg Merger Sub II, Inc., Borg Merger Sub III,
    Inc. and New SAC                                                                   
|2.4(17)   |  | Company Support Agreement dated as of
    July 18, 2003, by and among Business Objects, S.A., Borg
    Merger Sub I, Inc., Borg Merger Sub II, Inc., Borg
    Merger Sub III, Inc. and Seagate Software (Cayman) Holdings                                
|2.5(17)   |  | Form of Voting Agreement by and among Business
    Objects, S.A., Crystal Decisions, Inc. and certain stockholders
    of Business Objects, S.A.                                                                                                         
|3.1(1)    |  | Certificate of Incorporation of Registrant                                                                                                                                                                                                               
|3.2(1)    |  | Bylaws of Registrant, as amended and restated                                                                                                                                                                                                            
|10.1(1)   |  | 1999 Stock Option Plan and form of Stock Option
    Agreement, as amended and restated                                                                                                                                                                   
|10.1.1(1) |  | 1999 Stock Option Plan  Canadian Stock
    Option Agreement                                                                                                                                                                                             
|10.1.2(1) |  | 1999 Stock Option Plan  United Kingdom
    Sub-Plan, as amended and restated                                                                                                                                                                            
|10.1.3(7) |  | 1999 Stock Option Plan, as Amended
    August 13, 2001                                                                                                                                                                                                   
|10.1.4(4) |  | 1999 Stock Option Plan  French
    Sub-Plan.                                                                                                                                                                                                            
|10.2(1)   |  | 2000 Stock Option Plan and form of Stock Option
    Agreement, as amended and restated                                                                                                                                                                   
|10.3(1)   |  | Seagate Technology, Inc. Employee Stock Purchase
    Plan, as amended and restated                                                                                                                                                                       
|10.4(1)   |  | Intercompany Revolving Loan Agreement dated
    July 4, 2000 between the Registrant and Seagate Technology
    LLC                                                                                                                                       
|10.4.1(5) |  | Intercompany Revolving Loan Agreement dated
    July 4, 2001 between Crystal Decisions, Inc. and Seagate
    Technology LLC                                                                                                                              
|10.5(1)   |  | Form of Indemnification Agreement entered into
    between the Registrant, its affiliates and its directors and
    officers                                                                                                                             
|10.6(1)   |  | General Services Agreement dated June 28,
    1997 between Seagate Software Holdings, Inc. and Seagate
    Technology, Inc.                                                                                                                              
|10.6.1(2) |  | Management Services Agreement dated
    November 20, 2000 between Seagate Software Information
    Management Group Holdings, Inc. and Seagate Technology
    (US) Holdings, Inc.                                                                        
|10.6.2(2) |  | Corporate Services Agreement dated July 1,
    2000 between Seagate Software Information Management Group
    Holdings, Inc. and Seagate Technology LLC                                                                                                  
|10.6.3(2) |  | Payroll Services Agreement dated July 14,
    2000 between Seagate Software Information Management Group
    Holdings, Inc. and Seagate US LLC                                                                                                           
|10.7(1)   |  | Tax Allocation Agreement dated April 4, 1996
    between Seagate Software Holdings and Seagate Technology, Inc.                                                                                                                                          
|10.8(5)   |  | Cross License and Original Equipment
    Manufacturing Agreement effective October 5, 1998 by and
    among Seagate Software Information Management Group, Inc.,
    VERITAS Software Corporation and VERITAS Operating Corporation                      
|10.8.1(1) |  | Amendment No. 1 to Cross License and OEM
    Agreement dated April 16, 1999                                                                                                                                                                              



---



##### 



|        |             |             |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|------- | ----------- | ----------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |             |            
|Number  |             | Description
|        |             |            
|        | 10.9(1)     |             |  | Lease Agreement dated November 1, 1997
    between No. 163 Cathedral Ventures Limited, Seagate
    Software Information Management Group, Inc. and Seagate
    Technology, Inc., as Guarantor                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|        | 10.9.1(1)   |             |  | Amendment to Lease agreement dated
    January 27, 1999                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|        | 10.10(1)    |             |  | Lease Agreement dated September 27, 1999
    between Laurelton Investments Ltd., Seagate Software Information
    Management Group (Canada) Ltd. and Seagate Software, Inc.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|        | 10.10.1(5)  |             |  | Amendment to Lease agreement dated June 22,
    2000 between Laurelton Investments Ltd., Seagate Software
    Information Management Group (Canada) Ltd. and Seagate Software,
    Inc.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|        | 10.10.2(4)  |             |  | Amended and Restated Lease Agreement dated
    February 28, 2002 between Laurelton Investments Ltd.,
    Crystal Decisions, Corp. and Crystal Decisions, Inc.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|        | 10.11(1)    |             |  | Lease agreement dated October 18, 1996
    between Ravenseft Properties Limited and Holistic Systems Limited                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|        | 10.11.1(1)  |             |  | License to Underlet dated May 16, 2000
    between Ravenseft Properties Limited, Blackwell Healthcare
    Communications Limited and Seagate Information Management Group
    Limited                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|        | 10.11.2(16) |             |  | Under lease agreement dated May 23, 2000
    between Seagate Information Management Group Limited and
    Blackwell Healthcare Communications Limited                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|        | 10.12(1)    |             |  | Lease agreement dated June 22, 1998 between
    Allstate Insurance Company and Seagate Software, Inc.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|        | 10.13(1)    |             |  | Sublease agreement dated June 18, 1999
    between Bellsouth Mobility Inc. and Seagate Software Inc.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|        | 10.14(3)    |             |  | Seagate Software Information Management Group
    (US), Inc. Software License Agreement between Seagate Software
    Information Management Group, Inc. and Seagate Technology                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|        | 10.14.1(8)  |             |  | Amendment No. 1 to the Software License
    Agreement, dated as of September 20, 2000, between Seagate
    Technology LLC and Crystal Decisions, Inc.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|        | 10.15(5)    |             |  | Offer Letter dated as of July 20, 2000 by
    and between Seagate Software Information Management Group, Inc.
    and William G. Gibson                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|        | 10.16(6)    |             |  | Loan and Security agreement dated October 1,
    2002 between Crystal Decisions, Inc. and Comerica Bank-California                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|        | 10.16.1(6)  |             |  | Addendum to Loan and Security Agreement entered
    into as of October 1, 2002 between Crystal Decisions, Inc.
    and Comerica Bank-California                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|        | 10.17(6)    |             |  | Offer Letter dated as of September 25, 2002
    between Crystal Decisions, Inc. and Jonathan Judge                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|        | 10.20(9)    |             |  | Shareholders Agreement, dated as of
    November 22, 2000, by and among New SAC, Silver Lake
    Technology Investors Cayman, L.P., Silver Lake Investors Cayman,
    L.P., Silver Lake Partners Cayman, L.P., SAC Investments, L.P.,
    August Capital III, L.P., Chase Equity Associates, L.P.,
    GS Capital Partners III, L.P., GS Capital
    Partners III Offshore, L.P., Goldman, Sachs & Co.
    Verwaltungs GmbH, Stone Street Fund 2000 L.P., Bridge Street
    Special Opportunities Fund 2000, L.P., Staenberg Venture
    Partners II, L.P., Staenberg Seagate Partners, LLC,
    Integral Capital Partners V, L.P., Integral Capital
    Partners V Side Fund, L.P. and the individuals listed
    therein
|        | 10.21(10)   |             |  | Management Shareholders Agreement, dated as of
    November 22, 2000, by and among New SAC and the Management
    Shareholders listed therein                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             



---



##### 



|        |             |             |  |                                                                                                                                                                                                                                                                                                                                                                                           
|------- | ----------- | ----------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |             |            
|Number  |             | Description
|        |             |            
|        | 10.22(11)   |             |  | Indemnification Agreement, dated as of
    March 29, 2000, by and among VERITAS Software Corporation,
    Seagate Technology, Inc. and Suez Acquisition Company (Cayman)
    Limited                                                                                                                                                                                                      
|        | 10.22.1(12) |             |  | Joinder Agreement to the Indemnification
    Agreement, dated as of November 22, 2000, by and among
    VERITAS Software Corporation, Seagate Technology, Inc. and the
    SAC Indemnitors listed therein, including Seagate Software
    Information Management Group Holdings, Inc.                                                                                                     
|        | 10.22.2(13) |             |  | Consolidated Amendment to the Stock Purchase
    Agreement, Agreement and Plan of Merger and Reorganization, and
    Indemnification Agreement, and Consent, dated as of
    August 29, 2000, by and among Suez Acquisition Company
    (Cayman) Limited, Seagate Technology, Inc., Seagate Software
    Holdings, Inc., VERITAS Software Corporation and Victory Merger
    Sub, Inc.    
|        | 10.22.3(14) |             |  | Consolidated Amendment No. 2 to Stock
    Purchase Agreement, Agreement and Plan of Merger and
    Reorganization, and Indemnification Agreement, and Consent,
    dated, as of October 18, 2000, by and among Suez
    Acquisition Company (Cayman) Limited, Seagate Technology, Inc.,
    Seagate Software Holdings, Inc., VERITAS Software Corporation
    and Victory Merger Sub, Inc.
|        | 10.22.4(15) |             |  | Reimbursement Agreement, dated as of July 1,
    2002, by and among New SAC and its subsidiaries party thereto,
    including Crystal Decisions, Inc.                                                                                                                                                                                                                                     
|        | 10.22.5     |             |  | Indemnification Letter Agreement between the
    Registrant and New SAC dated July 18, 2003.                                                                                                                                                                                                                                                                                              
|        | 10.23       |             |  | Tenancy dated July 2, 2002 between Crystal
    Decisions (UK) Limited and Ealing Broadway (No. 1) Limited
    and Ealing Broadway (No. 2) Limited.                                                                                                                                                                                                                                        
|        | 10.23.1     |             |  | Deed dated July 2, 2002 between Crystal
    Decisions (UK) Limited and Ealing Broadway (No. 1) Limited
    and Ealing Broadway (No. 2) Limited.                                                                                                                                                                                                                                           
|        | 10.24(18)   |             |  | Lease agreement dated December 27, 1994 and
    lease agreement for additional premises dated December 13,
    1995 between Clover Investments, Inc., Crystal Computer
    Services, Inc. and Seagate Technology, Inc.                                                                                                                                                                    
|        | 10.24.1     |             |  | Amendment to Lease Agreement dated
    December 30, 1999 between the Manufacturer Life Insurance
    Company and Seagate Software Information Management Group
    (Canada) Inc.                                                                                                                                                                                                          
|        | 10.24.2     |             |  | Amendment to Lease Agreement dated July 17,
    2000 between the Manufacturer Life Insurance Company and Seagate
    Software Information Management Group (Canada) Inc.                                                                                                                                                                                                                  
|        | 10.24.3     |             |  | Amendment to Lease Agreement dated April 2,
    2002 between the Manufacturer Life Insurance Company and Crystal
    Decisions, Corp.                                                                                                                                                                                                                                                     
|        | 21.1(19)    |             |  | Subsidiaries of the Registrant                                                                                                                                                                                                                                                                                                                                                            
|        | 23.1        |             |  | Consent of Ernst & Young LLP,
    Independent Auditors                                                                                                                                                                                                                                                                                                                                    
|        | 24.1        |             |  | Power of Attorney (see page 84)                                                                                                                                                                                                                                                                                                                                                           
|        | 31.1        |             |  | Certification of President and Chief Executive
    Officer pursuant to Section 302 of the Sarbanes-Oxley Act
    of 2002                                                                                                                                                                                                                                                                  
|        | 31.2        |             |  | Certification of Chief Financial Officer pursuant
    to Section 302 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                                                                                    
|        | 32.1        |             |  | Certifications of President and Chief Executive
    Officer and Chief Financial Officer pursuant to Section 906
    of the Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                                     



---



| |     |                                                                                                                                        
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------
| | (1) | Incorporated by reference to the
    registrants Registration Statement on Form 10 filed
    on October 27, 2000 (File No. 000-31859).
|
| | (2) | Incorporated by reference to the
    registrants Quarterly Report on Form 10-Q for the
    period ended March 30, 2001.               



---



##### 





| |     |                                                                                                                                                                                
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (3) | Incorporated by reference to the
    registrants Quarterly Report on Form 10-Q for the
    period ended December 29, 2000.                                                    
|
| | (4) | Incorporated by Reference to the
    registrants Annual Report on Form 10-K for the period
    ended June 28, 2002.                                                           
|
| | (5) | Incorporated by reference to the
    registrants Annual Report on Form 10-K for the period
    ended June 29, 2001.                                                           
|
| | (6) | Incorporated by reference to the
    registrants Quarterly Report on Form 10-Q for the
    period ended September 27, 2002.                                                   
|
| | (7) | Incorporated by reference to the
    registrants Quarterly Report on Form 10-Q for the
    period ended September 28, 2001.                                                   
|
| | (8) | Incorporated by reference to the
    registrants Quarterly Report on Form 10-Q for the
    period ended March 28, 2003.                                                       
|
| | (9) | Incorporated by reference to Exhibit 10.10
    to the registration statement on Form S-4 (reg.
    no. 333-88388) of Seagate Technology filed with the SEC on
    May 16, 2002.



|     |                                                                                                                                                                                                         
|---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(10) | Incorporated by reference to Exhibit 10.11
    to the registration statement on Form S-4 (reg. no.
    333-88388) of Seagate Technology filed with the SEC on
    May 16, 2002.                         
|    
|(11) | Incorporated by reference to Exhibit 2.3 to
    the registration statement on Form S-4 (reg.
    no. 333-88388) of Seagate Technology filed with the SEC on
    May 16, 2002.                           
|    
|(12) | Incorporated by reference to Exhibit 2.4 to
    the registration statement on Form S-4 (reg.
    no. 333-88388) of Seagate Technology filed with the SEC on
    May 16, 2002.                           
|    
|(13) | Incorporated by reference to Exhibit 2.5 to
    the registration statement on Form S-4 (reg.
    no. 333-88388) of Seagate Technology filed with the SEC on
    May 16, 2002.                           
|    
|(14) | Incorporated by reference to Exhibit 2.6 to
    the registration statement on Form S-4 (reg.
    no. 333-88388) of Seagate Technology filed with the SEC on
    May 16, 2002.                           
|    
|(15) | Incorporated by reference to Exhibit 10.18
    to amendment no. 10 to the registration statement on
    Form S-4 (reg. no. 333-88388) of Seagate Technology
    filed with the SEC on December 17, 2002.
|    
|(16) | Incorporated by reference to exhibit 10.11.2
    to the registrants Registration Statement on Form S-1
    (Reg. No. 333-105559) filed with the SEC on May 23, 2003.                                   
|    
|(17) | Incorporated by reference to exhibits to the
    Current Report on Form 8-K filed by the registration with
    the SEC on July 25, 2003.                                                                
|    
|(18) | Incorporated by reference to Exhibit 10.3 to
    the Registration Statement on Form 10 (reg.
    no. 000-23169) of Seagate Software, Inc. filed with the SEC
    on October 3, 1997.                    
|    
|(19) | Incorporated by reference to Exhibit 21.1 to
    the registrants Registration Statement on Form S-1
    (reg. no. 333-105559) filed with the SEC on May 23,
    2003.