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UNITED
    STATES SECURITIES AND EXCHANGE COMMISSIONWashington, D.C.
    20549
  Form 10-K
  þ

ANNUAL REPORT PURSUANT TO
    SECTION 13 OR 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934For the Year Ended
    December 31, 2006o

TRANSITION REPORT PURSUANT TO
    SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
    1934For the transition period
    from          to   Commission File Number: 0-24720
  BUSINESS OBJECTS S.A.
 (Exact name of Registrant as
    specified in its charter)
  Republic of France

98-0355777(State or other jurisdiction
    of incorporation)

(I.R.S. Employer
    Identification Number)   157-159
    rue Anatole France, 92300 Levallois-Perret, France (Address
    of principal executive offices)
  (408) 953-6000 (Registrants
    telephone number, including area code)
  Securities registered pursuant to Section 12(b) of the
    Act:
   Title of Each Class:

Name of Each Exchange on Which Registered:American depositary shares, each
    representing

The Nasdaq Stock Market LLCone ordinary share*

Eurolist by
    Euronexttm,
    France   *
    
    Ordinary shares are not traded in the United States, but rather
    they are deposited with The Bank of New York, as Depositary.
    Each American depositary share represents one ordinary share.  Securities registered pursuant to Section 12(g) of the
    Act:
    None
  þ o
  o þ
  þ o
  Regulation S-K Form 10-K Form 10-K. o
  Rule 12b-2
  þ o o
  Rule 12b-2 o þ
    Sub-Plan Sub-Plan




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Trademarks
  Form 10-K Form 10-K
  Reporting
    Currency
    American
    Depositary Shares
  Form 10-K.




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##### 



BUSINESS
    OBJECTS S.A.
  TABLE OF
    CONTENTS
  
  PagePART IItem 1.


Business


1Item 1A.


Risk
    Factors


10Item 1B.


Unresolved Staff
    Comments


31Item 2.


Properties


31Item 3.


Legal
    Proceedings


31Item 4.


Submission of
    Matters to a Vote of Security Holders


31PART IIItem 5.


Market for
    Registrants Common Equity, Related Stockholder Matters and
    Issuer Purchases of Equity Securities


32Item 6.


Selected Financial
    Data


35Item 7.


Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations


36Item 7A.


Quantitative and
    Qualitative Disclosures About Market Risk


55Item 8.


Financial
    Statements and Supplementary Data


58Item 9.


Changes in and
    Disagreements with Accountants on Accounting and Financial
    Disclosure


111Item 9A.


Controls and
    Procedures


111Item 9B.


Other
    Information


111PART IIIItem 10.


Directors,
    Executive Officers and Corporate Governance


112Item 11.


Executive
    Compensation


121Item 12.


Security Ownership
    of Certain Beneficial Owners and Management and Related
    Stockholder Matters


146Item 13.


Certain
    Relationships and Related Transactions, and Director
    Independence


148Item 14.


Principal
    Accountant Fees and Services


149PART IVItem 15.


Exhibits, Financial
    Statement Schedules


150EXHIBIT 10.35.4EXHIBIT 10.81EXHIBIT 21.1EXHIBIT 23.1EXHIBIT 31.1EXHIBIT 31.2EXHIBIT 32.1




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PART I  This Annual Report on
    Form 10-K
    contains forward-looking statements based on our expectations,
    assumptions, estimates and projections about Business Objects
    and our industry as of the filing date of this
    Form 10-K.
    These statements include, but are not limited to, statements
    concerning our strategy, our expected financial performance,
    continued sales of our existing products and services including
    sales of our Business Objects XI product offering, the impact of
    exchange rates on our operations, the integration by us and
    acceptance by the market of companies we acquire and their
    products, the impact of stock compensation expense on our
    financial results and our ability to continue to maintain
    effective internal controls over financial reporting. Actual
    events or results may differ materially from those described in
    this document due to a number of risks and uncertainties. The
    potential risks and uncertainties include, among others,
    fluctuations in our quarterly and yearly operating results; our
    ability to estimate and sustain or increase our profitability;
    our ability to attract, migrate and retain customers for
    BusinessObjects XI; pending tax audits; the enterprise
    performance management products and products acquired from nSite
    Software, Inc.; our ability to issue new releases of our
    products, including those obtained through acquired businesses;
    our ability to integrate acquired businesses successfully;
    changes to current accounting policies which may have a
    significant, adverse impact on our financial results, including
    FAS 123(R); our ability to recognize revenues from new
    original equipment manufacturer and reseller agreements; the
    introduction of new products by competitors or the entry of new
    competitors into the markets for Business Objects
    products; the impact of the pricing of competing technologies;
    our ability to preserve our key strategic relationships; our
    reliance on selling products only in the Business Intelligence
    software market; our ability to manage large scale deployments;
    our strategy; and economic and political conditions in the US
    and abroad. These and other factors are more fully described in
    Part I, Item 1A in Risk Factors and
    elsewhere in this
    Form 10-K.
    We undertake no obligation to update publicly any
    forward-looking statements for any reason, even if new
    information becomes available or other events occur in the
    future.
  Item 1.
    Business  Our
    Company
      société anonyme 157-159, www.businessobjects.com
  Industry
    Background
  Business
    Strategy
  end-to-end
 1




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Expanding
    Our
    End-to-end
    Business Intelligence Solution
    line-of-business
    Growing
    our Strategic Services Business
  end-to-end
  Expanding
    our Position in the Mid-Market
      
    Channel development:  increasing the number of
    our partners, and developing new vertical areas of expertise and
    channel-focused marketing initiatives;
    Pricing and packaging:  aligning the
    requirements of our customers and partners while responding to
    market needs; and
    Product innovation:  introducing additional
    products under the Crystal brand to meet the needs of mid-market
    organizations. 2




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Expanding
    our Presence in High Growth Geographies
    Evolving
    our Business Models to Capitalize on New Customers and
    Channels
    Customers
    
    Consumer Packaged Goods:  We provide a
    comprehensive set of BI solutions to improve performance in the
    consumer product goods (CPG) industry. Our CPG
    customers include makers of fine apparel, personal and household
    care products, food and beverages, paper and business forms, and
    pet products.
    Communications:  We provide solutions to the
    leading wire line, wireless, broadband, internet service
    provider, and satellite carriers around the world, which help
    them increase revenue and customer retention while reducing
    operational costs.
    Financial Services:  We provide a comprehensive
    set of business intelligence solutions to improve performance in
    the banking, brokerage, consumer credit, investment banking, and
    insurance industries.
    Government:  We are a leading provider of
    business intelligence solutions to governments, educational
    organizations, and defense agencies.
    Healthcare:  Our BI solutions help both
    healthcare payer and provider organizations deliver higher
    quality patient care while keeping costs down.
    Retail:  We provide the worlds top
    retailers with software to improve purchasing, profitability,
    marketing efforts, inventory and store management, customer
    service, and financial reporting.      Enterprise
    customers
     3




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Mid-market
    customers
    Products
    EIM
    IDD
    
    Our business intelligence platform, which provides customers
    with the technology to enable them to support users inside and
    outside the organization, and includes the ability to deploy,
    control, and manage their deployments from departmental to
    enterprise-level communities of customers.
    Reporting tools that facilitate accessing data, formatting it,
    and delivering it as information to users inside and outside the
    organization.
    Query and analysis products that allow end users to interact
    with business information and answer ad-hoc questions themselves
    without advanced knowledge of the underlying data sources and
    structures. A range of users  from experienced data
    analysts to mainstream business users  can create
    queries and perform calculations without having to understand
    complex database languages or structures. Users can then share
    the information they create with others across the organization
    and beyond.  EPM
    Services
  Post-Sales
    Customer Support and Software Maintenance
   4




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on-site
    Global
    Services
      
    Consulting Services.  Committed to delivering
    business performance improvement to our customers, we
    collaborate with our clients to enable their success through the
    innovative use of business, technology, and information assets.
    With consulting resources versed in the latest BI technologies
    and in-depth industry knowledge, our focus is on providing
    complete business intelligence solutions that are critical to
    our clients success.    
    Customer Education.  Business Objects Education
    Services offers training from certified experts, with authorized
    curricula and course materials. Our team and network of
    authorized education partners focus on helping customers achieve
    better business value via training plan development services,
    comprehensive offerings, and flexible delivery.    Sales &
    Marketing
     5




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Strategic
    Relationships
    and/or
    and/or
    Competition
  and/or
  
    Large, pure-play BI vendors. Our direct competitors here are the
    SAS Institute, Cognos Inc. and Hyperion Solutions Corp.
    Larger companies whose core business is primarily applications
    (enterprise resource planning (ERP), customer
    relationship management (CRM), and sales customer
    management (SCM) or databases. Our competitors here
    include IBM, Microsoft, Oracle, and SAP AG.
    Small and/or
    niche business intelligence vendors. These companies include
    Actuate Corporation, Informatica Corporation, Information
    Builders, MicroStrategy, Inc.     6




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Product
    Development
    Patents
    and Intellectual Property Protection
           7




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8




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Employees
    
    1,440 in research and development;
    1,983 in sales and marketing;
    1,305 in customer service and support; and
    674 in finance and administration.  Confédération Francaise
    Démocratique du Travail  Confédération
    Générale du Travail
  comité dentreprise
      Philanthropy
   9




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Executive
    Officers of the Registrant
  Form 10-K.
  Where You
    Can Find Additional Information
  (http://www.sec.gov)
  Form 10-K, Form 10-Q, Form 8-K www.businessobjects.com Form 10-K.
  Bulletin des Announces
    Légales Obligatoires French Journal Officiel website
    http://balo.journal-officiel.gouv.fr / Autorité des Marches
    Financiers Document de
    Référence www.amf-france.org
  www.france.businessobjects.com.
  Item 1A.
    Risk
    Factors  We operate in a rapidly changing environment that involves
    numerous uncertainties and risks. The following risks and
    uncertainties may have a material and adverse effect on our
    business, financial condition or results of operations. You
    should consider these risks and uncertainties carefully,
    together with all of the other information included or
    incorporated by reference in this Annual Report on
    Form 10-K
    before you decide whether to purchase any of our securities. If
    any of the risks or uncertainties we face were to occur, the
    trading price of our securities could decline, and you may lose
    all or part of your investment.
  Risks
    Related to Our Business
  Our
    quarterly operating results have been and will continue to be
    subject to fluctuation.
   10




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
    we typically record a substantial amount of our revenues in the
    last weeks of a quarter, rather than evenly throughout the
    quarter;
    our customers typically wait until their fourth quarter, the end
    of their annual budget cycle, before deciding whether to
    purchase new software;
    economic activity in Europe and certain other countries
    generally slows during the summer months;
    customers may delay purchase decisions in anticipation of
    (i) changes to our product line, (ii) new products or
    platforms, (iii) product enhancements or (iv) in
    response to announced pricing changes by us or our competitors;
    the mix of products and services and the amount of consulting
    services that our customers order, and the associated revenue,
    varies from quarter to quarter, and we expect this revenue mix
    to continue for the foreseeable future;
    we depend, in part, on large orders and any delay in closing a
    large order, such as the delays we experienced in the three
    months ended June 30, 2006, may result in the realization
    of potentially significant net license fees being postponed from
    one quarter to the next; and
    we experience longer payment cycles for sales in certain foreign
    countries.      Investors
    may be unable to compare our results after January 1, 2006
    with our results in prior periods due to stock-based
    compensation expense which may cause our stock price to
    fall.
  Share-Based
    Payment, an Amendment of FASB Statements No. 123 and
    95
  Our
    revenues may be unpredictable due to the release of our
    BusinessObjects XI, release 2, product, and the expected
    end of life of our separate, existing Business Objects and
    Crystal Decisions products.
   11




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If
    we overestimate revenues and are unable to reduce our expenses
    sufficiently in any quarter, this could have a negative impact
    on our quarterly results of operations.
      We
    are subject to frequent tax audits, where the ultimate
    resolution may result in additional taxes.
   12




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Since
    we are required to report our consolidated financial results
    under both the U.S. GAAP and International Financial
    Reporting Standards (IFRS) rules, we may incur
    increased operating expenses, we may not fulfill the reporting
    requirements of one or both of these reporting standards, we may
    be subject to inconsistent determinations with respect to our
    accounting policies under these standards and investors may
    perceive our operating results to be drastically different under
    these regimes.
  Document de
    Rèfèrence 2005 Document de Rèfèrence 2005
   13




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Changes
    to current accounting policies could have a significant effect
    on our reported financial results or the way in which we conduct
    our business.
    
    Recognition of revenues;
    Business combinations;
    Impairment of goodwill, intangible assets and long-lived assets;
    Contingencies and litigation;
    Accounting for income taxes; and
    Stock-based compensation    As
    a result of our adoption of FAS 123R, which requires us to
    expense all share-based payments awards in our income statement,
    our net income and earnings per share have been and are expected
    to continue to be materially adversely affected.
      Changes
    in our stock-based compensation policy have adversely affected
    our ability to attract and retain employees.
   14




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Our
    market is highly competitive, which could harm our ability to
    sell products and services and reduce our market
    share.
      Some
    of our competitors may have greater financial, technical, sales,
    marketing and other resources than we do. In addition,
    acquisitions of, or other strategic transactions by our
    competitors could weaken our competitive position or reduce our
    revenues.
      We
    may pursue strategic acquisitions and investments that could
    have an adverse effect on our business if they are
    unsuccessful.
   15




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go-to-market
  We
    have strategic relationships with Microsoft, IBM, Oracle and
    Accenture over which we have limited control and which, if
    terminated, could reduce our revenues and harm our operating
    results.
        We
    depend on strategic relationships and business alliances for
    continued growth of our business.
     16




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We
    sell products only in the business intelligence software market;
    if sales of our products in this market decline, our operating
    results will be harmed.
    If
    the market in which we sell business intelligence software does
    not grow as anticipated, our future profitability could be
    negatively affected.
    
    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
    decide to use other technologies, such as search engines, to
    obtain the required business intelligence for their users.    Our
    SaaS offerings carry a number of risks, some of which may be
    harmful to our business.
    
    We have limited experience in the services market;
    We may not be able to deliver these products or any enhancements
    to these products in the manner we have conveyed to customers;
    Customers may question the viability or security of our
    on-demand offerings;
    We may not be able to provide sufficient, continuous customer
    support for crystalreports.com and the nSite application
    platform;
    We may incur higher than anticipated costs as we expand further
    into the on demand market;
    We could experience service interruptions with respect to our on
    demand offerings, which could potentially impact our revenues
    and damage our customers businesses and result in warranty
    claims or litigation;
    We may not be able to comply in a timely or cost effective
    manner with privacy and other regulatory requirements that apply
    to these products;
    We may not realize anticipated market demand and acceptance of
    these on demand offerings; and
    Sales of our sharing platforms bundled with license sales may
    delay the timing of revenue recognition for license arrangements
    that would otherwise have been recorded at the time of delivery.   17




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Our
    software may have defects and errors that could lead to a loss
    of revenues or product liability claims.
    
    potential customers may delay purchases;
    customers may react negatively, which could reduce future sales;
    our reputation in the marketplace may be damaged;
    we may have to defend product liability claims;
    we may be required to indemnify our customers, distributors,
    original equipment manufacturers or other resellers;
    we may incur additional service and warranty costs; and
    we may have to divert additional development resources to
    correct the defects and errors, which may result in the delay of
    new product releases or upgrades.    We
    may have long sales cycles and may have difficulty providing and
    managing large scale customer deployments, which could cause a
    decline or delay in recognition of our revenues and an increase
    in our expenses.
      Business
    disruptions could seriously harm our operations and financial
    condition and increase our costs and expenses.
       18




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While
    we believe that we currently have adequate internal control over
    financial reporting, we are exposed to risks from recent
    legislation requiring companies to evaluate internal control
    over financial reporting.
      We
    cannot be certain that our internal control over financial
    reporting will be effective or sufficient in the
    future.
       19




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The
    software market in which we operate is subject to rapid
    technological change and new product introductions, which could
    negatively affect our product sales.
    
    adapting third party technology, including open source software;
    successful education and training of sales, marketing and
    consulting personnel;
    effective marketing and market acceptance;
    proper positioning and pricing; and
    product quality, including possible defects.    Failure
    to structure our business model properly for mid-market
    customers could have a material adverse effect on our business
    and results of operations.
  go-to-market
  We
    are currently a party to two lawsuits with MicroStrategy. The
    prosecution of these lawsuits could have a negative impact on
    our business. Should MicroStrategy prevail, we may be required
    to pay substantial monetary damages or be prevented from selling
    some of our products.
     20




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We
    are a party to litigation with Vedatech Corporation and its
    Representative Director, Mani Subramanian, and in the event of
    an adverse judgment against us, we may have to pay damages,
    which could adversely affect our financial position and results
    of operations.
                 22




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We
    are a party to litigation with Informatica and, in the event of
    an adverse judgment against us, we may have to pay damages or be
    prevented from selling some of our products, either of which
    could adversely affect our financial position and results of
    operations.
      We
    are a party to litigation with Decision Warehouse Consultoria E
    Importacao Ltda. (Decision Warehouse). The
    prosecution of this lawsuit could have a substantial negative
    impact on our business. Should Decision Warehouse prevail, we
    may be required to pay substantial monetary
    damages.
  Business Objects Do Brasil, Ltda.
  Business Objects Do Brasil, Ltda.
 23




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We
    have committed to undertake certain internal practices in
    connection with handling of employee information.
    The
    protection of our intellectual property rights is crucial to our
    business and, if third parties use our intellectual property
    without our consent, our business could be
    damaged.
    
    policing unauthorized copying or use of our products is
    difficult and expensive;
    software piracy is a persistent problem in the software industry;
    our patents may not cover the full scope of our product
    offerings and may be challenged, invalidated or circumvented, or
    may be enforceable only in certain jurisdictions; and
    our shrink-wrap licenses may be unenforceable under the laws of
    certain jurisdictions.           24




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Third
    parties have asserted that our technology infringes upon their
    proprietary rights, and others may do so in the future, which
    has resulted, and may in the future result, in costly litigation
    and could adversely affect our ability to distribute our
    products.
      
    we would need to commit management resources in defense of the
    claim;
    we may incur substantial litigation costs in defense of the
    claim;
    we may have to expend significant development resources to
    redesign our products;
    we may be required to enter into royalty and licensing
    agreements with such third party under unfavorable
    terms; and
    we could be forced to cease selling or delay shipping our
    products should an adverse judgment be rendered against us.        Our
    loss of rights to use software licensed from third parties could
    harm our business.
   25




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Our
    executive officers and key employees are crucial to our
    business, and we may not be able to recruit, integrate and
    retain the personnel we need to succeed.
    We
    have multinational operations that are subject to risks inherent
    in international operations.
    
    technical difficulties and costs associated with product
    localization;
    challenges associated with coordinating product development
    efforts among geographically dispersed development centers;
    potential loss of proprietary information due to piracy,
    misappropriation or laws that may be less protective of our
    intellectual property rights;
    lack of experience in certain geographic markets;
    the significant presence of some of our competitors in some
    international markets;
    potentially adverse tax consequences;
    import and export restrictions and tariffs may prevent us from
    shipping products to particular jurisdictions or providing
    services to a particular market and may increase our operating
    costs;
    failure to comply with foreign and domestic laws and other
    government controls applicable to our multinational operations,
    such as trade and employment restrictions;
    potential fines and penalties resulting from failure to comply
    with laws and regulations applicable to our international
    operations;
    management, staffing, legal and other costs of operating an
    enterprise spread over various countries;
    the recent addition of a number of employees in offshore
    locations for which attrition rates traditionally are believed
    to be higher than is generally true for North America and Europe;
    political instability in the countries where we are doing
    business;
    fears concerning 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; and
    different business practices and regulations, which may lead to
    the need for increased employee education and supervision. 26




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Fluctuations
    in exchange rates between the euro, the U.S. dollar and the
    Canadian dollar, as well as other currencies in which we do
    business, may adversely affect our operating
    results.
  and/or
    Our
    effective tax rate may increase or fluctuate, which could
    increase our income tax expense and reduce our net
    income.
    
    changes in forecasted annual operating income;
    changes in relative proportions of revenues and income before
    taxes in the various jurisdictions in which we operate;
    changes to the valuation allowance on net deferred tax assets;
    changes to actual or forecasted permanent differences between
    book and tax reporting, including the tax effects of purchase
    accounting for acquisitions and non-recurring charges which may
    cause fluctuations between reporting periods;
    impacts from any future tax settlements with state, federal or
    foreign tax authorities;
    impacts from changes in tax laws, regulations and
    interpretations in the jurisdictions in which we operate, as
    well as the requirements of certain tax rulings;
    impacts from acquisitions and related integration
    activities; or
    impacts from new FASB or IFRS requirements.   27




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Risks
    Related to Ownership of Our Ordinary Shares or ADSs
  Provisions
    of our articles of association and French law could have
    anti-takeover effects and could deprive shareholders who do not
    comply with such provisions of some or all of their voting
    rights.
  1 3 2 3 AMF 12-month
    and/or and/or and/or
     28




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Our
    Board of Directors recently obtained authority to implement
    certain anti-takeover measures which may delay or discourage an
    acquisition of Business Objects.
      We
    cannot be certain that these new anti-takeover measures will be
    efficient.
    Holders
    of our shares have limited rights to call shareholders meetings
    or submit shareholder proposals, which could adversely affect
    their ability to participate in governance of Business
    Objects.
    Interests
    of our shareholders will be diluted if they are not able to
    exercise preferential subscription rights for our
    shares.
  (droits préférentiels de souscription)
 29




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It
    may be difficult for holders of our ADSs rather than our
    ordinary shares to exercise some of their rights as
    shareholders.
    Fluctuation
    in the value of the U.S. dollar relative to the euro may
    cause the price of our ordinary shares to deviate from the price
    of our ADSs.
    We
    have not declared or paid cash dividends to our shareholders and
    do not anticipate doing so in the near future.
    The
    market price of our shares is susceptible to changes in our
    operating results and to stock market
    fluctuations.
    
    announcements of our quarterly operating results and expected
    results of the future periods;
    our failure to achieve the operating results anticipated by
    analysts or investors;
    announcements of technological innovations or new products by
    us, our customers or competitors; 30




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
    releases or reports by or changes in security and industry
    analysts recommendations;
    announcements of our competitors or customers quarterly
    operating results, and expected results of future periods;
    addition of significant new customers or loss of current
    customers;
    sales or the perception in the market of possible sales of a
    large number of our shares by our directors, officers, employees
    or principal stockholders; and
    developments or disputes concerning patents or proprietary
    rights or other events.    Item 1B.
    Unresolved
    Staff Comments    Item 2.
    Properties          Item 3.
    Legal
    Proceedings    Item 4.
    Submission
    of Matters to a Vote of Security Holders    Exemptions
    from Certain Nasdaq Corporate Governance Rules
  1 3
   31




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PART II  Item 5.
    Market
    for Registrants Common Equity, Related Stockholder Matters
    and Issuer Purchases of Equity Securities  U.S. Market
    Information
    French
    Market Information
  Continu Continu Continu
  Service à
    Règlement Différé (date de liquidation)
     32




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High and
    Low Price Ranges
    Price per OrdinaryPrice per ADS


ShareHigh


Low


High


Low2006:Fourth Quarter

$
40.58


$
33.37



30.43



26.20Third Quarter

$
34.54


$
19.21



26.97



15.31Second Quarter

$
37.74


$
24.90



30.71



20.14First Quarter

$
43.32


$
35.48



35.45



29.682005:Fourth Quarter

$
41.50


$
32.82



34.78



27.60Third Quarter

$
36.09


$
26.30



29.03



22.08Second Quarter

$
28.79


$
25.23



23.45



19.57First Quarter

$
28.07


$
22.49



21.42



17.05   Sub-Plan Sub-Plan
  Dividends.
 33




---



##### Table of Contents



Performance
    Graph
    COMPARE
    5-YEAR
    CUMULATIVE TOTAL RETURN
    AMONG BUSINESS OBJECTS S.A.,
    NASDAQ MARKET INDEX AND HEMSCOTT GROUP INDEX
  
  2001


2002


2003


2004


2005


2006Business Objects S.A.



100.00




44.38




102.6




74.97




119.56




116.72Hemscott Group Index



100.00




71.33




87.93




93.85




93.23




109.75NASDAQ Market Index



100.00




69.75




104.88




113.7




116.19




128.12   Purchase
    of Equity Securities by the Issuer
  Sub-Plan
 34




---



##### Table of Contents



Item 6.
    Selected
    Financial Data  Form 10-K. Form 10-K. Form 10-K.
  Year Ended December 31,2006(1)


2005


2004


2003(2)


2002(In thousands, except per ordinary share and ADS data)Statement of Income
    DataRevenues:Net license fees

$
560,231


$
515,637


$
473,373


$
275,261


$
243,955Services


693,529



561,514



452,258



285,564



210,844Total revenues


1,253,760



1,077,151



925,631



560,825



454,799Cost of revenues:Net license fees


41,030



29,715



28,272



5,951



3,102Services


264,115



216,626



172,133



89,005



71,489Total cost of revenues


305,145



246,341



200,405



94,956



74,591Gross profit


948,615



830,810



725,226



465,869



380,208Operating expenses:Sales and marketing


505,613



434,432



406,796



250,870



222,243Research and development


195,047



162,540



150,562



95,399



74,991General and administrative


123,090



97,910



83,947



44,655



29,387Acquired in-process research and
    development


7,030



3,584







27,966



2,000Restructuring costs






150



2,169



7,782



3,871Total operating expenses


830,780



698,616



643,474



426,672



332,492Income from operations


117,835



132,194



81,752



39,197



47,716Interest and other income
    (expense), net


13,786



14,304



(4,220
)


14,334



18,959Income before provision for income
    taxes


131,621



146,498



77,532



53,531



66,675Provision for income taxes


(56,257
)


(53,873
)


(30,409
)


(30,969
)


(26,095
)Net income

$
75,364


$
92,625


$
47,123


$
22,562


$
40,580Basic net income per ordinary
    share and ADS

$
0.81


$
1.02


$
0.53


$
0.35


$
0.66Diluted net income per ordinary
    share and ADS

$
0.79


$
1.00


$
0.52


$
0.34


$
0.63Ordinary shares and ADSs used in
    computing basic net income per ordinary share and ADS


93,552



90,405



88,748



64,584



61,888Ordinary shares and ADSs and
    equivalents used in computing diluted net income per ordinary
    share and ADS


95,368



93,036



91,077



66,168



63,933   35




---



##### Table of Contents



December 31,2006


2005


2004


2003(2)


2002(In thousands)Balance Sheet Data:Cash, cash equivalents, short-term
    investments and restricted cash

$
566,656


$
380,443


$
311,359


$
257,955


$
301,509Total Assets


2,494,990



2,123,358



1,922,928



1,775,062



551,808Working capital


301,492



195,199



112,844



49,513



225,513Long-term liabilities


29,100



29,360



20,363



4,950



17,441     (1)
    
    Costs and expenses for 2006 include stock-based compensation
    expense recorded in accordance with FAS 123R. We elected to
    adopt the standard using the modified prospective method. See
    Notes 1 and 8 to the Consolidated Financial Statements for
    additional information.(2)
    
    We acquired Crystal Decisions on December 11, 2003 for a
    total purchase price of approximately $1.2 billion. The
    purchase price consisted of the payment of $307.6 million
    in cash to former shareholders of Crystal Decisions, which was
    paid out of general cash reserves, and the issue of
    23.3 million ADSs. We acquired the fair value of the net
    tangible and intangible assets on purchase, including
    $978.0 million of goodwill and $142.7 million of
    amortizable intangible assets. The statement of income for 2003
    includes the revenues and expenses of Crystal Decisions for the
    20 days ended December 31, 2003. Our acquisition of
    Crystal Decisions had a $38.0 million negative impact on
    operating income for 2003 due to the $28.0 million
    write-off of acquired in-process research and development,
    $2.2 million in amortization of acquired intangible assets
    and deferred stock-based compensation expense, $7.5 million
    in integration related costs and $7.8 million in
    restructuring costs. These costs were partially offset by the
    $7.4 million of operating income earned by Crystal
    Decisions during the 20 days in 2003 that we operated as a
    combined company.  Item 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations  The following discussion and analysis should be read together
    with our Consolidated Financial Statements and the Notes to
    those statements included elsewhere in this
    Form 10-K.
    This discussion contains forward-looking statements based on our
    current expectations, assumptions, estimates and projections
    about Business Objects and our industry. These forward-looking
    statements involve risks and uncertainties. Business
    Objects actual results could differ materially from those
    indicated in these forward-looking statements as a result of
    certain factors, as more fully described in Risk
    Factors in Item 1A of this
    Form 10-K.
    Managements Discussion and Analysis of Financial Condition
    and Results of Operations and elsewhere in this
    Form 10-K.
    Business Objects undertakes no obligation to update publicly any
    forward-looking statements for any reason, even if new
    information becomes available or other events occur in the
    future.
  OVERVIEW
  Our
    Business
     36




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##### Table of Contents



Sources
    of Revenues and Expenses
  Net
    License Fees
    Services
    Revenues
      Costs
    of Revenues
    Operating
    Expenses
      Accounting for Stock Issued
    to Employees.
  Key
    Performance Indicators
  Year Ended December 31,2006


2005


2004(In millions, except for % and EPS)Revenues

$
1,253.8


$
1,077.2


$
925.6Revenues growth


16
%


16
%


65
%Operating income

$
117.8


$
132.2


$
81.8Income from operations as a
    percentage of total revenues


9
%


12
%


9
%Diluted earnings per share

$
0.79


$
1.00


$
0.52  37




---



##### Table of Contents



New
    Products
      E-Business E-Business
          tm
     38




---



##### Table of Contents



tm
  Results
    of Operations
    Year Ended December 31,2006(1)


2005


2004Net License Fees:Information discovery and delivery
    (IDD)


34
%


42
%


46
%Enterprise performance management
    solutions (EPM)


6



4



3Enterprise information management
    solutions (EIM)


5



2



2Total net license fees


45



48



51Services revenues:Maintenance and technical support


40



38



36Professional services


15



14



13Total services fees


55



52



49Total revenues


100



100



100Cost of net license fees


3



3



3Cost of services


21



20



19Total cost of revenues


24



23



22Gross margin


76



77



78Operating expensesSales and marketing


40



40



44Research and development


16



15



16General and administrative


10



10



9Acquired in-process research and
    development


1







Total operating expenses


67



65



69Income from operations (operating
    margin)


9



12



9Interest and other income
    (expense), net


1



2



(1
)Income before provision for income
    taxes


10



14



8Provision for income taxes


(4
)


(5
)


(3
)Net Income


6
%


9
%


5
%     (1)
    
    Costs and expenses for the year ended December 31, 2006
    include stock-based compensation expense recorded in accordance
    with FAS 123R. See Notes 1 and 8 to the Consolidated
    Financial Statements for additional information.  Seasonality
   39




---



##### Table of Contents



Impact
    of Foreign Currency Exchange Rate Fluctuations on Results of
    Operations
    mark-to-market
    Year Ended December 31,2006


2005


2004Total revenues

$
9.9


$
4.5


$
49.1Total cost of revenues


3.3



3.4



10.5Sales and marketing expenses


7.3



7.0



22.3Research and development expenses


3.0



4.1



11.8General and administrative expenses


0.7



0.9



3.9      40




---



##### Table of Contents



Revenues
    2006


% Change


2005


% Change


2004Net license fees:IDD solutions

$
427.9



(4
)

$
447.6



5


$
427.2EPM solutions


78.0



92



40.7



45



28.0EIM solutions


54.3



98



27.4



51



18.2Total net license fees

$
560.2



9


$
515.7



9


$
473.4Services revenues:Maintenance and technical support


497.4



21



411.7



24



330.7Professional services


196.2



31



149.8



23



121.5Total services fees

$
693.6



24


$
561.5



24


$
452.2Total revenues

$
1,253.8



16


$
1,077.2



16


$
925.6   Net
    License Fees
          Services
    Revenues
   41




---



##### Table of Contents



Geographic
    Revenues Mix
    2006


% Change


2005


% Change


2004Americas(1)

$
687.5



26


$
546.0



20


$
453.3Percent of total revenues


55
%






51
%






49
%Europe, Middle East and Africa
    (EMEA)(2)


479.2



6



450.3



13



397.7Percent of total revenues


38
%






42
%






43
%Asia Pacific


87.1



8



80.9



8



74.6Percent of total revenues


7
%






7
%






8
%Total revenues

$
1,253.8






$
1,077.2






$
925.6     (1)
    
    Includes the following total revenues in the United States:
    $642.6 million in 2006, $503.8 million in 2005 and
    $408.7 million in 2004.(2)
    
    Includes the following total revenues in France:
    $107.5 million in 2006, $95.2 million in 2005 and
    $85.9 million in 2004.         42




---



##### Table of Contents



Cost
    of Revenues
    2006


% Change


2005


% Change


2004(In millions, except percent change)Cost of net license fees

$
41.0



38


$
29.7



5


$
28.3Cost of services


264.1



22



216.6



26



172.1Total cost of revenues

$
305.1



24


$
246.3



23


$
200.4     Cost of net license fees.
  Cost of services revenues.
   43




---



##### Table of Contents



Operating
    Expenses
  Summary
      For the Year Ended December 31,2006


% change


2005


% change


2004Operating expenses:Sales and marketing

$
505.6



16
%

$
434.4



7
%

$
406.8Research and development


195.1



20
%


162.5



8
%


150.6General and administrative


123.1



26
%


97.9



17
%


83.9Other


7.0



84
%


3.8



73
%


2.2Total operating expenses

$
830.8



19
%

$
698.6



9
%

$
643.5   Sales
    and Marketing Expenses
      Research
    and Development Expenses
   44




---



##### Table of Contents



General
    and Administrative Expenses
      Other
    Expenses
    Interest
    and Other Income (Expense), Net
    Year Ended December 31,2006


2005


2004(In millions)Interest income, net

$
15.2


$
8.6


$
3.7Patent infringement settlement
    income, net of litigation expenses










3.5Foreign currency exchange gains
    (losses)


(1.8
)


5.9



(11.6
)Other income, net


0.4



(0.2
)


0.2Interest and other income
    (expense), net

$
13.8


$
14.3


$
(4.2
)   Net interest income.
  Patent infringement settlement income.
 45




---



##### Table of Contents



Foreign currency exchange gains (losses).
  mark-to-market
  Income
    Taxes
           46




---



##### Table of Contents



Liquidity
    and Capital Resources
  Liquidity
    As of and for the Year Ended December 31,2006


Change


2005


Change


2004Working capital

$
301.5



54
%

$
195.2



73
%

$
112.8Cash and cash equivalents

$
506.8



52
%

$
332.8



13
%

$
293.5Cash provided by operating
    activities

$
260.8



60
%

$
162.7



85
%

$
88.1Cash used for investing activities

$
(167.4
)


3
%

$
(172.9
)


509
%

$
(28.4
)Cash provided by financing
    activities

$
61.7



16
%

$
53.1



13,175
%

$
0.4   Working capital.
  Cash and cash equivalents.
  Operating Activities.
      Investing Activities.
     47




---



##### Table of Contents



Financing Activities.
        Dividends
      Future
    Liquidity Requirements
  and/or
     48




---



##### Table of Contents



Contractual
    Obligations
      Payments Due by PeriodWithin








More ThanTotal


1 Year


2-3 Years


4-5 Years


5 YearsOperating leases

$
271.0


$
48.4


$
84.3


$
70.3


$
68.0Escrows Payable


42.2



34.5



7.7







Statutory French Profit Sharing
    Plan


6.8



6.8











Total contractual cash obligations

$
320.0


$
89.7


$
92.0


$
70.3


$
68.0     Operating
    Leases
  sub-lease
  Escrows
    Payable
    Statutory
    French Profit Sharing Plan
    Guarantees
  Guarantors Accounting for
    Guarantees.
 49




---



##### Table of Contents



Product Warranties.
  Environmental Liabilities. Accounting for
    Asset Retirement Obligations
  Other Liabilities and Other Claims.
  Off-Balance
    Sheet Arrangements
  Consolidation of Variable Interest Entities, an
    Interpretation of Accounting Research
    Bulletin No. 51,
 50




---



##### Table of Contents



Employers Disclosures
    about Pensions and Other Postretirement Benefit  An
    Amendment of FAS Statements No. 87, 88, and
    106
  Critical
    Accounting Estimates
  Form 10-K
  
    Business combinations;
    Impairment of goodwill, intangible assets and long-lived assets;
    Contingencies and litigation;
    Accounting for income taxes; and
    Stock-based compensation    Business
    Combinations
  Business Combinations No. 95-3, Recognition of Liabilities in Connection with a
    Purchase Business Combination (EITF 95-3).
    Impairment
    of Goodwill, Intangible Assets and Other Long-Lived
    Assets
   51




---



##### Table of Contents



Goodwill and Other
    Intangible Assets
  Impairment of Long-Lived
    Assets
    Contingencies
    and Litigation
  Accounting for Contingencies
  Accounting
    for Income Taxes
  Accounting for Income
    Taxes
   52




---



##### Table of Contents



Stock-Based
    Compensation
    Transition Election Related to
    Accounting for the Tax Effects of Share-Based Payment
    Awards.
  Accounting for Stock Issued to
    Employees Accounting for Stock-Based
    Compensation  Transition and Disclosure 
    an Amendment of FASB Statement No. 123
      53




---



##### Table of Contents



For the Fiscal Year Ended December 31, 2006Warrants


Stock Options


RSUs


IESPP


ESPPExpected volatility


49
%


48
%


N/A



40
%


N/ARisk-free interest rate(1)


3.86
%


3.73
%


N/A



3.05
%


N/ATurnover rateFrance


N/A



12
%


N/A



N/A



N/AOfficers/Directors






14
%


14
%


11
%


N/ARest of the world


N/A



20
%


20
%


11
%


N/ADividends










N/A







N/AWeighted average fair value in $


12.51



13.16



30.46



9.23



7.01Expected life (years)


5.28



4.63



1.81



0.50



N/A     (1)
    
    We used five to seven years IBoxx Eurozone interest rates for
    the stock options and warrants with exercise prices denominated
    in Euro granted to French employees and Directors, and three to
    five years IBoxx Eurozone interest rates for the options with
    exercise prices denominated in Euro granted to rest of the
    world. We used Euribor six month interest rates for the IESPP
    with a subscription price denominated in Euro.            Recent
    Accounting Pronouncements
  Fair Value Measurements. Fair Value
    Measurements.
 54




---



##### Table of Contents



Accounting for Uncertainty in Income Taxes, an
    Interpretation of FAS 109, Accounting for Income
    Taxes
  Item 7A.
    Quantitative
    and Qualitative Disclosures About Market Risk    Interest
    Rate Risk
  Form 10-K.
  Trading
    Securities
  over-and-above
  Foreign
    Exchange Risk
   55




---



##### Table of Contents



Derivatives
    Risk
    mark-to-market mark-to-market
  Accounting for Derivative
    Instruments and Hedging Activities mark-to-market
   56




---



##### Table of Contents



2006


2005Weighted





WeightedAverage





AverageNotional


Contract


Notional


ContractAmount


Rate (%)


Amount


Rate (%)(Notional amounts in millions)Forward contracts (non-designated
    derivatives)U.S. dollars against euros


53.5



1.33



47.0



1.19British pounds against euros










9.8



0.69Hong Kong dollars against euros


6.7



10.04



15.2



9.29South African rand against euros


2.0



9.01



3.0



7.81Mexican pesos against euros


15.6



14.33



15.6



13.07Singapore dollars against euros


4.0



2.01







Option and forward contracts
    (designated derivatives)Canadian dollars against
    U.S. dollars  options


47.1



1.11



17.0



1.18Canadian dollars against
    euros  forwards


32.0



1.42



6.0



1.37    57




---



##### Table of Contents



Item 8.
    Financial
    Statements and Supplementary Data  BUSINESS
    OBJECTS S.A.
  INDEX TO
    CONSOLIDATED FINANCIAL STATEMENTS
  PageReports of
    Ernst & Young LLP. Independent Registered Public
    Accounting Firm


59Consolidated
    Balance Sheets as of December 31, 2006 and 2005


62Consolidated
    Statements of Income for the Years Ended December 31, 2006,
    2005 and 2004


63Consolidated
    Statements of Shareholders Equity for the Years Ended
    December 31, 2006, 
    2005 and 2004


64Consolidated
    Statements of Cash Flows for the Years Ended December 31,
    2006, 2005 and 2004


66Notes to
    Consolidated Financial Statements


67  58




---



##### Table of Contents



Report of
    Ernst & Young LLP, Independent Registered Public
    Accounting Firm  The Board of Directors and Shareholders of Business Objects
    S.A.
        Share-Based Payment
  Internal Control-Integrated
    Framework
  
    59




---



##### Table of Contents



Report of
    Ernst & Young LLP, Independent Registered Public
    Accounting Firm
  The Board
    of Directors and Shareholders of Business Objects S.A.
  Form 10-K Internal Control  Integrated
    Framework
           60




---



##### Table of Contents



ERNST &
    YOUNG LLP
    61




---



##### Table of Contents



BUSINESS
    OBJECTS S.A.
 CONSOLIDATED
    BALANCE SHEETS  December 31,2006


2005(In thousands, except nominal value per ordinary shares and
    ADSs)ASSETSCurrent assets:Cash and cash equivalents

$
506,792


$
332,777Restricted cash


42,997



22,157Short-term investments


5,736



4,651Accounts receivable, net of
    allowances of $12,248 and $12,211 as of December 31, 2006
    and 2005


334,387



265,672Deferred tax assets


15,189



13,605Prepaid and other current assets


59,462



60,880Total current assets


964,563



699,742Goodwill


1,266,057



1,166,043Other intangible assets, net


128,635



110,512Property and equipment, net


91,091



74,116Deposits and other assets


20,897



34,945Long-term restricted cash


11,131



20,858Long-term deferred tax assets


12,616



17,142Total assets

$
2,494,990


$
2,123,358LIABILITIES AND
    SHAREHOLDERS EQUITYCurrent liabilities:Accounts payable

$
36,070


$
45,777Accrued payroll and related
    expenses


105,967



83,332Income taxes payable


96,088



79,820Deferred revenues


283,631



201,788Other current liabilities


106,776



72,098Escrows payable


34,539



21,728Total current liabilities


663,071



504,543Long-term escrows payable


7,654



10,902Other long-term liabilities


7,077



8,871Long-term deferred tax liabilities


4,597



2,853Long-term deferred revenues


9,772



6,734Total liabilities


692,171



533,903Commitments and contingencies
    (note 7)Shareholders
    equityOrdinary shares 
    0.10 nominal value ($0.13 U.S. and $0.12, respectively as
    of December 31, 2006 and 2005): authorized 263,533 and
    120,842; issued  97,424 and 95,304; issued and
    outstanding 94,932 and 92,262; as of December 31, 2006 and
    2005, respectively


10,707



10,359Additional paid in capital


1,320,993



1,217,473Treasury, Business Objects Option
    LLC, and Employee Benefit
    Sub-Plan
    shares, 2,492 and 3,041 as of December 31, 2006 and 2005,
    respectively


(5,247
)


(3,223
)Retained earnings


417,709



342,345Unearned compensation






(12,243
)Accumulated other comprehensive
    income


58,657



34,744Total shareholders equity


1,802,819



1,589,455Total liabilities and
    shareholders equity

$
2,494,990


$
2,123,358    62




---



##### Table of Contents



BUSINESS
    OBJECTS S.A.
 CONSOLIDATED
    STATEMENTS OF INCOME  Year Ended December 31,2006(1)


2005


2004(In thousands, except per ordinaryshare and ADS data)Revenues:Net license fees

$
560,231


$
515,637


$
473,373Services


693,529



561,514



452,258Total revenues


1,253,760



1,077,151



925,631Cost of revenues:Net license fees


41,030



29,715



28,272Services


264,115



216,626



172,133Total cost of revenues


305,145



246,341



200,405Gross profit


948,615



830,810



725,226Operating expenses:Sales and marketing


505,613



434,432



406,796Research and development


195,047



162,540



150,562General and administrative


123,090



97,910



83,947Acquired in-process research and
    development


7,030



3,584



Restructuring costs






150



2,169Total operating expenses


830,780



698,616



643,474Income from operations


117,835



132,194



81,752Interest and other income
    (expense), net


13,786



14,304



(4,220
)Income before provision for income
    taxes


131,621



146,498



77,532Provision for income taxes


(56,257
)


(53,873
)


(30,409
)Net income

$
75,364


$
92,625


$
47,123Basic net income per ordinary
    share and ADS

$
0.81


$
1.02


$
0.53Diluted net income per ordinary
    share and ADS

$
0.79


$
1.00


$
0.52Ordinary shares and ADSs used in
    computing basic net income per ordinary share and ADS


93,552



90,405



88,748Ordinary shares and ADSs and
    equivalents used in computing diluted net income per ordinary
    share and ADS


95,368



93,036



91,077     (1)
    
    Costs and expenses for 2006 include stock-based compensation
    expense recorded in accordance with FAS 123R. See
    Notes 1 and 8 to the Consolidated Financial Statements for
    additional information.   63




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##### Table of Contents



BUSINESS
    OBJECTS S.A.
 CONSOLIDATED
    STATEMENTS OF SHAREHOLDERS EQUITY  BusinessObjectsLLC and








AccumulatedAdditional








Employee








Other


TotalOrdinary Shares


Paid-In


Treasury


Benefit


Retained


Unearned


Comprehensive


ShareholdersShares


Amount


Capital


Shares


Amount


Sub-Plan


Earnings


Compensation


Income


Equity(In thousands)Balance at December 31,
    2003


88,098


$
9,927


$
1,121,910



1,068


$
(13,104
)


5,737


$
202,597


$
(18,353
)

$
40,082


$
1,343,059Issuance of ordinary shares
    pursuant to employee stock option plans


2,678



339



32,480











(2,036
)














32,819Issuance of ordinary shares under
    employee stock purchase plans


376



46



7,721



























7,767Purchase of treasury shares


(2,000
)










2,000



(40,231
)


















(40,231
)Tax benefit of nonqualified stock
    options










8,812



























8,812Amortization of stock based
    compensation






























6,656







6,656Forfeiture of unvested stock options










(3,618
)


















3,618







Stock based compensation










31



























31Components of comprehensive incomeTranslation adjustment


































1,108



1,108Net income


























47,123











47,123Total comprehensive income






































48,231Balance at December 31,
    2004


89,152


$
10,312


$
1,167,336



3,068


$
(53,335
)


3,701


$
249,720


$
(8,079
)

$
41,190


$
1,407,144Issuance of ordinary shares
    pursuant to employee stock option plans


2,483



302



40,579











(1,180
)














40,881Issuance of ordinary shares under
    employee stock purchase plans


597



74



12,158



























12,232Shares issued to Business Objects
    Employee benefit trust






















425















Issuance of shares 
    vesting of RSUs


50



6



(6
)










(50
)














Shares withheld and applied to tax
    liability upon vesting of RSUs


(20
)










20



(824
)


















(824
)Fair value of assumed options in
    acquisitions










7,245



























7,245Cancellation of treasury shares






(335
)


(50,601
)


(2,943
)


50,936



















Tax benefit of nonqualified stock
    options










8,510



























8,510Release of valuation allowance on
    deferred tax assets










22,610



























22,610Amortization of stock based
    compensation






























6,943







6,943Forfeiture of unvested stock options










(880
)


















880







Stock based compensation










10,522



















(11,987
)






(1,465
)Components of comprehensive income






































Translation adjustment


































(6,446
)


(6,446
)Net income


























92,625











92,625Total comprehensive income






































86,179Balance at December 31,
    2005


92,262


$
10,359


$
1,217,473



145


$
(3,223
)


2,896


$
342,345


$
(12,243
)

$
34,744


$
1,589,455  64




---



##### Table of Contents



BUSINESS
    OBJECTS S.A.
 CONSOLIDATED
    STATEMENTS OF SHAREHOLDERS EQUITY 
    (Continued)  BusinessObjectsLLC and








AccumulatedAdditional








Employee








Other


TotalOrdinary Shares


Paid-In


Treasury


Benefit


Retained


Unearned


Comprehensive


ShareholdersShares


Amount


Capital


Shares


Amount


Sub-Plan


Earnings


Compensation


Income


Equity(In thousands)Issuance of ordinary shares
    pursuant to employee stock option plans


2,046



260



38,335











(647
)














38,595Issuance of ordinary shares under
    employee stock purchase plans


519



67



14,775



























14,842Issuance of ordinary
    shares  warrants


30



4



724



























728Shares issued to Business Objects
    employee benefit sub-plan trust






















173















Issuance of shares 
    vesting of RSUs


135



17



(17
)










(135
)














Shares withheld and applied to tax
    liability upon vesting of RSUs


(60
)










60



(2,024
)


















(2,024
)Reclass of deferred compensation
    balance upon adoption of FAS 123(R)










(12,243
)


















12,243







Tax benefit of nonqualified stock
    options










12,913



























12,913Stock based compensation










49,033



























49,033Components of comprehensive incomeTranslation adjustment


































23,913



23,913Net income


























75,364











75,364Total comprehensive income






































99,277Balance at December 31,
    2006


94,932


$
10,707


$
1,320,993



205


$
(5,247
)


2,287


$
417,709


$



$
58,657


$
1,802,819    65




---



##### Table of Contents



BUSINESS
    OBJECTS S.A.
 CONSOLIDATED
    STATEMENTS OF CASH FLOWS  Year Ended December 31,2006


2005


2004Operating activities:Net Income

$
75,364


$
92,625


$
47,123Adjustments to reconcile net
    income to net cash provided by operating activities:Depreciation and amortization of
    property and equipment


30,606



31,691



32,493Amortization of other intangible
    assets


42,363



32,851



30,780Stock-based compensation expense


49,033



6,942



6,687Excess tax benefits from
    stock-based compensation


(7,580
)






Acquired in-process research and
    development


7,030



3,584



Loss on retirements of property
    and equipment


506



972



Deferred income taxes


(3,234
)


(5,786
)


14,708Tax benefit from employee stock
    plans






8,510



8,812Changes in operating assets and
    liabilities:Accounts receivable, net


(42,707
)


(26,296
)


(51,809
)Prepaid and other current assets


6,362



(15,684
)


(15,042
)Deposits and other assets


14,166



14,181



(30,777
)Accounts payable


(15,039
)


6,596



(8,660
)Accrued payroll and related
    expenses


5,799



319



(7,090
)Income taxes payable


22,345



4,335



(9,948
)Deferred revenues


60,342



17,288



58,186Other current liabilities


16,505



(8,655
)


13,177Short-term investments classified
    as trading


(1,086
)


(820
)


(499
)Net cash provided by operating
    activities


260,775



162,653



88,141Investing activities:Purchases of property and equipment


(42,894
)


(41,079
)


(30,273
)Business acquisitions and other
    investments, net of acquired cash


(125,059
)


(128,814
)


(279
)Transfer of cash (to) from
    restricted cash accounts


(11,113
)


(28,972
)


5,200Increase in escrows payable


25,259



25,976



Payments on escrows payable


(16,240
)






(3,074
)Proceeds from sale of assets


2,625







Net cash used in investing
    activities


(167,422
)


(172,889
)


(28,426
)Financing activities:Proceeds from issuance of shares


54,165



53,113



40,586Purchase of treasury shares










(40,231
)Excess tax benefits from
    stock-based compensation


7,580







Net cash provided by financing
    activities


61,745



53,113



355Effect of foreign exchange rate
    changes on cash and cash equivalents


18,917



(3,585
)


(1,965
)Net increase in cash and cash
    equivalents


174,015



39,292



58,105Cash and cash equivalents,
    beginning of the year


332,777



293,485



235,380Cash and cash equivalents, end of
    the year

$
506,792


$
332,777


$
293,485Supplemental cash flow
    information:Cash paid for interest

$
285


$
415


$
93Cash paid for income taxes, net of
    refunds

$
7,849


$
44,915


$
54,181Supplemental schedule of
    non-cash investing and financing activities:Value of shares issued
    and/or
    options assumed in connection with acquisitions

$



$
7,245


$
    66




---



##### Table of Contents



Business
    Objects S.A.
  Notes
    to Consolidated Financial Statements
  1.
    Organization
    and Summary of Significant Accounting Policies  Organization
    and Basis of Presentation
  société
    anonyme Form 10-K.
      Use of
    Estimates
    Translation
    of Financial Statements of Foreign Entities
  Foreign Currency Translation
  Revenue
    Recognition
    and/or and/or and/or
 67




---



##### Table of Contents



Business
    Objects S.A.
  Notes to
    Consolidated Financial
    Statements  (Continued)
    98-9, Modification of
    SOP No. 97-2
    with Respect to Certain Transactions.
       68




---



##### Table of Contents



Business
    Objects S.A.
  Notes to
    Consolidated Financial
    Statements  (Continued)
     December 31,2006


2005Maintenance

$
259,438


$
187,049License


7,907



4,679Consulting


8,107



3,422Training


8,179



6,638Total deferred
    revenues  short term

$
283,631


$
201,788Maintenance

$
9,772


$
6,734Total deferred
    revenues  long term

$
9,772


$
6,734   Accounts
    Receivable
      Net
    Income per Ordinary Share and ADS
  Earnings per
    Share,
  Cash
    and Cash Equivalents, Restricted Cash and Short-Term
    Investments
    Accounting for Certain
    Investments in Debt and Equity Securities No. 97-14, Accounting for Deferred Compensation Arrangements Where
 69




---



##### Table of Contents



Business
    Objects S.A.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  Amounts Earned are Held in a Rabbi Trust and Invested,
  Derivative
    Financial Instruments
  Accounting for Derivative
    Instruments and Hedging Activities
  Business
    Combinations
  Business Combinations No. 95-3, Recognition of Liabilities in Connection with a
    Purchase Business Combination (EITF 95-3).
    Goodwill
    and Other Intangible Assets
   70




---



##### Table of Contents



Business
    Objects S.A.
  Notes to
    Consolidated Financial
    Statements  (Continued)
    Goodwill and
    Other Intangible Assets
  Property
    and Equipment
    98-1, Accounting for the Costs of Computer Software Developed
    or Obtained for Internal Use,
  Impairment
    of Long-Lived Assets
        Software
    Development Costs
  Accounting
    for the Costs of Computer Software to Be Sold, Leased, or
    Otherwise Marketed
 71




---



##### Table of Contents



Business
    Objects S.A.
  Notes to
    Consolidated Financial
    Statements  (Continued)
   Concentration
    of Credit Risk
      Income
    Taxes
  Accounting for Income
    Taxes
         72




---



##### Table of Contents



Business
    Objects S.A.
  Notes to
    Consolidated Financial
    Statements  (Continued)
    Other
    Current Liabilities
    Contingencies
    and Litigation
  Accounting for Contingencies
  Comprehensive
    Income
    Accounting
    for Stock-based Compensation
  Share-Based Payment, an Amendment of FASB
    Statements No. 123 and 95 (FAS 123R) Accounting for Stock Issued to Employees Accounting for Stock-Based Compensation 
    Transition and Disclosure
  Accounting for Stock-Based
    Compensation.
 73




---



##### Table of Contents



Business
    Objects S.A.
  Notes to
    Consolidated Financial
    Statements  (Continued)
   Share-Based Payment
    Bulletin No. 97-1,
  Advertising
    Costs
    Recent
    Accounting Pronouncements
  Fair Value Measurements. Fair Value
    Measurements.
  Accounting for Uncertainty in Income Taxes, an
    interpretation of FAS 109, Accounting for Income
    Taxes
 74




---



##### Table of Contents



Business
    Objects S.A.
  Notes to
    Consolidated Financial
    Statements  (Continued)
   2.
    Cash,
    Cash Equivalents and Short-term Investments    December 31,2006


2005(In thousands)Cash

$
262,479


$
203,574Cash equivalents:Bank certificates of deposit


24,233



2,986Guaranteed investment certificates


36,900



31,814U.S. Government agency
    securities (FHLB)






13,791Bankers acceptances






7,705Bank deposits


20,510



Money market funds


162,670



72,907Total cash equivalents


244,313



129,203Total cash and cash equivalents


506,792



332,777Short-term investments:Insurance dedicated mutual funds


5,736



4,651Total short-term investments


5,736



4,651Total cash, cash equivalents and
    short-term investments

$
512,528


$
337,428     3.
    Derivative
    Financial Instruments       75




---



##### Table of Contents



Business
    Objects S.A.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  mark-to-market
      December 31,2006


2005Notional





NotionalAmount


Fair Value


Amount


Fair ValueU.S. dollar equivalent of
    derivatives not designated as hedges

$
58.7


$
0.4


$
67.8


$
0.1U.S. dollar equivalent of
    derivatives designated as cash flow hedges

$
67.9


$
1.9


$
19.8


$
0.2     4.
    Property
    and Equipment    December 31,2006


2005Office and computer equipment

$
112,520


$
98,431Software


63,912



36,329Leasehold improvements


48,794



43,262Total property and equipment


225,226



178,022Accumulated depreciation and
    amortization


(134,135
)


(103,906
)Property and equipment, net

$
91,091


$
74,116     5.
    Acquisitions    Acquisition
    of Armstrong Laing Limited
   76




---



##### Table of Contents



Business
    Objects S.A.
  Notes to
    Consolidated Financial
    Statements  (Continued)
      Acquisition
    of Firstlogic, Inc.
  In-the-money
      Net Tangible





In-ProcessPurchase


Liabilities


Fair Value of


R&DAcquisition

Consideration


Acquired


Intangibles


(IPR&D)


GoodwillALG

$
60.0


($
3.1
)

$
21.9


$
3.2


$
38.0Firstlogic, Inc.

$
65.9


($
8.4
)

$
28.2


$
3.6


$
42.5Total

$
125.9


($
11.5
)

$
50.1


$
6.8


$
80.5  77




---



##### Table of Contents



Business
    Objects S.A.
  Notes to
    Consolidated Financial
    Statements  (Continued)
          MaintenanceContracts andDeveloped


Consulting


License Contracts


Non-CompeteTechnology


Relationships


and Relationships


Agreements


TrademarkEstimated





Estimated





Estimated





Estimated





EstimatedFair


Useful Life


Fair


Useful Life


Fair


Useful Life


Fair


Useful Life


Fair


Useful LifeValue


(In Years)


Value


(In Years)


Value


(In Years)


Value


(In Years)


Value


(In Years)


TotalALG

$
16.8



5


$
2.4



5


$
1.2



3


$
0.2



2


$
1.3



3


$
21.9Firstlogic, Inc.

$
23.5



5


$
2.9



6


$
1.6



2


$
0.2



2










$
28.2Total

$
40.3






$
5.3






$
2.8






$
0.4






$
1.3






$
50.1         Acquisition
    of nSite Software, Inc.
    Acquisition
    of Edgewing Limited
   78




---



##### Table of Contents



Business
    Objects S.A.
  Notes to
    Consolidated Financial
    Statements  (Continued)
      Significant
    Prior Year Acquisitions
    
    Acquisition of SRC Software, Inc. (SRC), a
    privately-held vendor specializing in financial planning,
    budgeting and performance management software, on
    August 24, 2005. The results of operations were included in
    the Companys consolidated financial statements after the
    date of the acquisition. The Companys wholly owned
    subsidiary Business Objects Americas, acquired all the
    outstanding capital stock and Business Objects Option Sub LLC
    assumed outstanding stock options through a statutory merger of
    an indirect, wholly owned subsidiary with and into SRC.
    Acquisition of Medience S.A. (Medience), an
    enterprise information integration company, on
    September 16, 2005. The results of operations were included
    in the Companys consolidated financial statements after
    the date of the acquisition. The Company acquired all the
    outstanding capital stock.
    Acquisition of Infommersion, Inc. (Infommersion), a
    leading vendor of interactive visual analytics, on
    October 31, 2005. The results of operations were included
    in the consolidated financial statements after the date of the
    acquisition. The Companys wholly owned subsidiary Business
    Objects Americas, acquired all the outstanding capital stock and
    Business Objects Option Sub LLC assumed outstanding stock
    options through a statutory merger of an indirect, wholly owned
    subsidiary with and into Infommersion.    DeferredNet Tangible











CompensationAssets





In-Process





on UnvestedPurchase


(Liabilities)


Fair Value of


R&D





OptionsAcquisition

Consideration


Acquired


Intangibles


(IPR&D)


Goodwill


AssumedSRC

$
100.1


$
0.8


$
20.6


$
1.4


$
76.4


$
0.9Medience

$
10.9


($
1.1
)

$
1.7


$
1.0


$
9.3


$
0.0Infommersion

$
37.4


$
1.4


$
5.8


$
1.2


$
28.4


$
0.6Total

$
148.4


$
1.1


$
28.1


$
3.6


$
114.1


$
1.5        79




---



##### Table of Contents



Business
    Objects S.A.
  Notes to
    Consolidated Financial
    Statements  (Continued)
     Developed


Maintenance


ConsultingTechnology


Contracts


RelationshipsEstimated





Estimated





EstimatedFair


Useful Life


Fair


Useful Life


Fair


Useful LifeValue


(In Years)


Value


(In Years)


Value


(In Years)


TotalSRC

$
17.2



5


$
3.2



6


$
0.2



3


$
20.6Medience

$
1.5



5


$
0.2



5










$
1.7Infommersion

$
5.0



5


$
0.1



5


$
0.7



3


$
5.8Total

$
23.7






$
3.5






$
0.9






$
28.1     6.
    Goodwill
    and Other Intangible Assets      December 31,2006


2005Balance, beginning of the year

$
1,166,043


$
1,067,694Goodwill acquired during the
    year(1)


90,607



114,119Goodwill adjustments relating to
    prior year acquisitions


6,196



(15,617
)Impact of currency fluctuations on
    goodwill


3,211



(153
)Balance, end of the year

$
1,266,057


$
1,166,043     (1)
    
    Includes adjustments during the period.   80




---



##### Table of Contents



Business
    Objects S.A.
  Notes to
    Consolidated Financial
    Statements  (Continued)
      December 31,2006


2005Developed technology

$
173,459


$
120,972Maintenance and support contracts


57,014



50,837Trade names


9,279



6,043License contracts and relationships


2,855



Workforce


1,519



Total other intangible assets, at
    cost

$
244,126


$
177,852Accumulated amortization on other
    intangible assets


(115,491
)


(67,340
)Other intangible assets, net

$
128,635


$
110,512       December 31,2006


2005Amortization of:Developed technology (included in
    cost of net license fees)

$
29,406


$
22,035Maintenance and support contracts
    (included in cost of services revenues)


10,552



9,486Trade names (included in operating
    expenses)


1,555



1,330License contracts and
    relationships (included in cost of net license fees)


705



Workforce (included in operating
    expenses)


145



Total other intangibles
    amortization expenses

$
42,363


$
32,851  81




---



##### Table of Contents



Business
    Objects S.A.
  Notes to
    Consolidated Financial
    Statements  (Continued)
    2007

$
48,1572008


44,8182009


16,0042010


13,8802011


5,580Thereafter


196Total

$
128,635   7.
    Commitments
    and Contingencies  Commitments
    2007

$
48,3972008


43,5282009


40,8242010


38,8812011


31,403Thereafter


68,008Total

$
271,041          82




---



##### Table of Contents



Business
    Objects S.A.
  Notes to
    Consolidated Financial
    Statements  (Continued)
     Legal
    Matters
       83




---



##### Table of Contents



Business
    Objects S.A.
  Notes to
    Consolidated Financial
    Statements  (Continued)
               84




---



##### Table of Contents



Business
    Objects S.A.
  Notes to
    Consolidated Financial
    Statements  (Continued)
               85




---



##### Table of Contents



Business
    Objects S.A.
  Notes to
    Consolidated Financial
    Statements  (Continued)
    Decision Warehouse Consultoria E
    Importacao Ltda. Business Objects Do Brasil, Ltda
  Business Objects Do Brasil, Ltda. Decision
    Warehouse.
      8.
    Shareholders
    Equity  Ordinary
    Shares, Treasury Shares, Business Objects Option LLC Shares and
    Employee Benefit
    Sub-Plan
    shares
  Business Objects Option LLC and Employee Benefit
    Sub-Plan
    shares.
 86




---



##### Table of Contents



Business
    Objects S.A.
  Notes to
    Consolidated Financial
    Statements  (Continued)
   Stock
    Repurchase Programs
    Autorité des Marches Financier
    Stock
    Option Exchange Programs
  2002
    Stock Option Exchange Program
       87




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##### Table of Contents



Business
    Objects S.A.
  Notes to
    Consolidated Financial
    Statements  (Continued)
      Dividend
    Rights
        Liquidation
    Rights
    Preemptive
    Subscription Rights
    Stock-Based
    Compensation Plans
  sub-plan.
 88




---



##### Table of Contents



Business
    Objects S.A.
  Notes to
    Consolidated Financial
    Statements  (Continued)
   Stock
    Option Plans
    Options and Restricted Stock Units OutstandingWeighted


WeightedAverage


AverageOptions





Exercise


ExerciseAvailable for


Number of


Price


PriceGrant


Shares


(In Euros)


(In Dollars)Balance at December 31, 2003


3,477,973



16,192,541



21.87



24.80Granted


(3,178,057
)


3,178,057



20.95



26.46Canceled


1,711,794



(3,167,735
)


26.67



33.72Options expired under the 1999 Plan


(54,992
)










Exercised






(2,678,298
)


9.70



12,26Balance at December 31,
    2004


1,956,718



13,524,565



22.36



28.27Shares reserved


1,425,000











Granted


(3,008,550
)


3,008,550



26.08



31.58RSUs granted


(439,115
)


439,115







RSUs vested






(50,000
)






Options assumed in SRC acquisition






163,872



6.50



7.95Options assumed in Infommersion
    acquisition






110,752



4.07



4.88Canceled


513,090



(1,224,354
)


26.99



33.45Exercised






(2,482,957
)


13.53



16.48Balance at December 31,
    2005


447,143



13,489,543



23.55



27.89Shares reserved


1,122,270











Granted


(2,997,195
)


2,997,195



22.06



27.92RSUs granted


(488,849
)


488,849







RSUs vested






(134,747
)






RSUs cancelled


52,867



(52,867
)






Canceled


1,863,764



(1,863,764
)


25.66



32.26Exercised






(2,047,026
)


13.93



17.47Balance at December 31,
    2006






12,877,183



24.28



32.06    89




---



##### Table of Contents



Business
    Objects S.A.
  Notes to
    Consolidated Financial
    Statements  (Continued)
     OutstandingWeighted





ExercisableAverage


Weighted





WeightedRemaining


Average





AverageContractual


Exercise





ExerciseNumber of


Life


Price


Number of


PriceRange of Exercise Price in Euros

Shares


(In Years)


(In Euros)


Shares


(In Euros)0.00 - 6.76


155,391



2.3



4.16



144,672



4.026.76 - 13.52


438,144



3.1



10.19



437,201



10.2013.52 - 20.27


1,869,857



6.9



17.23



941,663



16.6720.27 - 27.03


3,345,225



7.9



23.59



1,424,890



24.0427.03 - 33.79


3,444,156



7.7



29.81



1,181,079



29.7133.79 - 40.55


700,434



4.2



36.62



700,434



36.6240.55 - 47.31


517,034



4.7



42.45



517,034



42.4547.31 - 60.82


246,915



3.3



54.91



246,915



54.9160.82 - 67.58


242,487



3.5



66.34



242,487



66.3410,959,643



6.8



27.02



5,836,375



28.67   OutstandingWeighted





ExercisableAverage


Weighted





WeightedRemaining


Average





AverageContractual


Exercise





ExerciseNumber of


Life


Price


Number of


PriceRange of Exercise Price in Dollars

Shares


(In Years)


(In Dollars)


Shares


(In Dollars)0.00 - 2.94


705,473



1.3



0.02



9,287



1.142.94 - 8.82


2,286



6.0



7.68



2,175



7.688.82 - 11.76


458,426



4.0



10.14



447,925



10.1311.76 - 14.70


246,013



5.8



13.61



245,576



13.6114.70 - 17.64


44,610



5.8



14.93



44,610



14.9317.64 - 20.58


42,842



6.4



19.90



40,124



19.9020.58 - 29.40


417,890



6.7



29.21



318,912



29.191,917,540



3.9



11.35



1,108,609



16.85   General Stock Option Terms.
   90




---



##### Table of Contents



Business
    Objects S.A.
  Notes to
    Consolidated Financial
    Statements  (Continued)
      2001 Stock Incentive Plan.
    Business Objects Americas 1999 Stock Option
    Plan.
   91




---



##### Table of Contents



Business
    Objects S.A.
  Notes to
    Consolidated Financial
    Statements  (Continued)
        Warrants.
           92




---



##### Table of Contents



Business
    Objects S.A.
  Notes to
    Consolidated Financial
    Statements  (Continued)
     Employee Stock Purchase Plans.
      Restricted Stock Units. Sub-Plan sub-plan Sub-Plan). Sub-Plan
  Sub-Plan
   93




---



##### Table of Contents



Business
    Objects S.A.
  Notes to
    Consolidated Financial
    Statements  (Continued)
    Sub-Plan. Sub-Plan,
  Anti
    takeover measures
  and/or
  Stock-Based
    Compensation
    No. FAS 123(R)-3, Transition Election Related to Accounting for the Tax Effects
    of Share-Based Payment Awards
 94




---



##### Table of Contents



Business
    Objects S.A.
  Notes to
    Consolidated Financial
    Statements  (Continued)
     December 31,2006


2005


2004Net income  as reported
    for prior periods(1)


N/A


$
92,625


$
47,123Add: Amortization of stock-based
    compensation expense included in reported net income, net of
    estimated tax related benefits of $1,535 and $2,541 in 2005 and
    2004, respectively


N/A



5,407



4,147Deduct: Stock-based compensation
    expense determined under the fair-value based method for all
    awards, net of estimated tax related benefits of $4,370 and
    $8,077 in 2005 and 2004, respectively(2)


N/A



(43,169
)


(60,850
)Net income, including the effect
    of stock-based compensation expense  pro forma in
    2005(3)

$
75,364


$
54,863


$
(9,580
)Net income per ordinary share and
    ADS  as reported Basic for prior periods(1)


N/A



1.02



0.53Net income per ordinary share and
    ADS  as reported Diluted for prior periods(1)


N/A



1.00



0.52Net income per ordinary share and
    ADS  Basic, including the effect of stock-based
    compensation  pro forma in 2005(3)


0.81



0.61



(0.11
)Net income per ordinary share and
    ADS  Diluted, including the effect of stock-based
    compensation  pro forma in 2005(3)


0.79



0.59



(0.11
)     (1)
    
    Net income and net income per share prior to 2006 did not
    include stock-based compensation expense under FAS 123
    because the Company had not adopted the recognition provisions
    of FAS 123.(2)
    
    Stock-based compensation expense prior to 2006 was calculated
    based on the pro forma application of FAS 123.(3)
    
    Net income and net income per share in 2006 included stock-based
    compensation expense of $43,337 net of tax benefits of
    $5,696. Net income and net income per share prior to 2006
    represented pro forma information based on FAS 123.       95




---



##### Table of Contents



Business
    Objects S.A.
  Notes to
    Consolidated Financial
    Statements  (Continued)
     For the fiscal year ended December 31, 2006Warrants


Stock Options


RSUs


IESPP


ESPPExpected volatility


49
%


48
%


N/A



40
%


N/ARisk-free interest rate(1)


3.86
%


3.73
%


N/A



3.05
%


N/ATurnover rateFrance


N/A



12
%


N/A



N/A



N/AOfficers/Directors






14
%


14
%


11
%


N/ARest of the world


N/A



20
%


20
%


11
%


N/ADividends










N/A







N/AWeighted average fair value in $


12.51



13.16



30.46



9.23



7.01Expected life (years)


5.28



4.63



1.81



0.50



N/A     (1)
    
    The Company used five to seven years IBoxx Eurozone interest
    rates for the stock options and warrants with exercise prices
    denominated in euro granted to French employees and directors,
    and three to five years IBoxx Eurozone interest rates for the
    options with exercise prices denominated in euro granted to
    employees outside of France. The Company used Euribor six month
    interest rates for the IESPP with a subscription price
    denominated in euro.       96




---



##### Table of Contents



Business
    Objects S.A.
  Notes to
    Consolidated Financial
    Statements  (Continued)
     For the Year Ended December 31, 2005Warrants


Stock Options


RSUs


IESPP


ESPPExpected volatility


54
%


53
%


N/A



42
%


N/ARisk-free interest rate(1)


2.54
%


3.07
%


N/A



2.04
%


N/ATurnover rateFrance


N/A



12
%


N/A



N/A



N/ARest of the world






20
%


N/A







N/ADividends










N/A







N/AWeighted average fair value in $


11.90



13.86



35.94



6.18



8.86Expected life (years)


4.26



5.01



N/A



0.50



N/A     (1)
    
    IBoxx Eurozone five to seven years rates for the options in
    euro, and Euribor six month rates for the IESPP.  For the Fiscal Year Ended December 31, 2004Warrants


Stock Options


IESPP


ESPPExpected volatility


61
%


60
%


51
%


N/ARisk-free interest rate(2)


3.16
%


2.71
%


1.00
%


N/ATurnover rate






15
%


N/A



N/ADividends














N/AWeighted average fair value in $


9.20



11.18



7.63



4.34Expected life (years)


3.0



3.0



0.50



N/A     (2)
    
    zero-coupon U.S. Treasury bond according to
    U.S. federal reserve at 3 years for options and six
    months for the IESPP    Weighted-AverageWeighted


Aggregate


RemainingNumber of Awards


Average


Intrinsic


ContractualStock





Exercise Price


Value


TermWarrants


Options


RSUs


(In $)(1)


(In $)(2)


(In Years)Outstanding at January 1, 2006


435



13,100



389



27.77



200,697



7.10Granted(3)


45



2,997



489



27.93



16,273Cancelled/Expired


(45
)


(1,863
)


(53
)


32.40



9,987Exercised


(30
)


(2,047
)


(135
)


17.57



38,905Outstanding at
    December 31, 2006


405



12,187



690



31.86



137,011



6.28Exercisable at December 31,
    2006


255



6,945







34.13



73,401



5.50Unvested expected to vest at
    December 31, 2006


150



4,326



548



28.27



51,043



7.20     (1)
    
    translated in U.S. dollars based on the noon buying rate as
    published by the Federal Reserve of Bank of New York for
    grants, exercises and cancellations and based on the closing
    rate for the outstanding options.(2)
    
    computed as the difference between the exercise price and the
    closing quote on the NASDAQ on January 1, 2006, at the
    grant date, at the cancellation date, at the exercise date or at
    December 31, 2006 respectively, and 97




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##### Table of Contents



Business
    Objects S.A.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  the option exercise price translated in U.S. dollars as per
    (1) above. The intrinsic value cannot be negative and may
    equal to zero when the option exercise price exceeds the closing
    quote on the NASDAQ.(3)
    
    as stock options are granted with an exercise price equal to the
    closing price on Euronext on the grant date, the intrinsic value
    of grants is limited to RSUs.        Weighted-Number of


Average GrantAwards


Date Fair Value(In Thousands)


(In $)Unvested at January 1, 2006


389



37.55Granted


489



33.46Vested


(135
)


36.81Forfeited


(53
)


35.81Unvested at December 31, 2006


690



34.93       StockWarrants


Options


RSUs


IESPP


ESPP


TotalCost of license fees





$
40






$
4






$
44Cost of services






4,649


$
114



809


$
107



5,679Sales and marketing






12,551



624



2,020



216



15,411Research and development






6,038



93



774



208



7,113General and administrative

$
962



13,368



6,012



354



90



20,786Total compensation
    expense

$
962


$
36,646


$
6,843


$
3,961


$
621


$
49,033Income tax benefit






(5,289
)


(407
)










(5,696
)Total compensation expense, net
    of tax

$
962


$
31,357


$
6,436


$
3,961


$
621


$
43,337  98




---



##### Table of Contents



Business
    Objects S.A.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  9.
    Employer
    Sponsored Employee Savings Plans          French
    Pension Plan
     99




---



##### Table of Contents



Business
    Objects S.A.
  Notes to
    Consolidated Financial
    Statements  (Continued)
                Italian
    Indemnity
   100




---



##### Table of Contents



Business
    Objects S.A.
  Notes to
    Consolidated Financial
    Statements  (Continued)
   10.
    Net
    Income Per Ordinary Share and ADS    Year Ended December 31,2006


2005


2004Basic net income per
    share:Numerator:Net income

$
75,364


$
92,625


$
47,123Denominator:Weighed average ordinary shares
    and ADSs outstanding  basic


93,552



90,405



88,748Net income per ordinary share and
    ADS  basic

$
0.81


$
1.02


$
0.53Diluted net income per
    share:Numerator:Net income

$
75,364


$
92,625


$
47,123Denominator:Weighed average ordinary shares
    and ADSs outstanding  basic


93,552



90,405



88,748Incremental ordinary shares and
    ADSs attributable to shares exercisable under employee stock
    option plans, RSUs and warrants (treasury stock method)


1,816



2,631



2,329Weighted average ordinary shares
    and ADSs outstanding  diluted


95,368



93,036



91,077Net income per ordinary share and
    ADS  diluted

$
0.79


$
1.00


$
0.52      101




---



##### Table of Contents



Business
    Objects S.A.
  Notes to
    Consolidated Financial
    Statements  (Continued)
   11.
    Interest
    and Other Income (Expense), Net    Year Ended December 31,2006


2005


2004Net interest income

$
15,208


$
8,554


$
3,696Patent infringement settlement
    income, net of litigation expenses










3,500Net exchange gains (losses)


(1,814
)


5,952



(11,587
)Other income (loss), net


392



(202
)


171Total interest and other income
    (expense), net

$
13,786


$
14,304


$
(4,220
)   Net interest income.
  Patent infringement settlement income.
  Foreign
    currency exchange gains (losses).
  o
   102




---



##### Table of Contents



Business
    Objects S.A.
  Notes to
    Consolidated Financial
    Statements  (Continued)
      12.
    Income
    Taxes    Year Ended December 31,2006


2005


2004France

$
21,594


$
17,514


$
21,418Rest of world


110,027



128,984



56,114Total

$
131,621


$
146,498


$
77,532     Year Ended December 31,2006


2005


2004Current:France

$
5,746


$
(2,770
)

$
5,867Rest of world


53,756



50,524



26,717Total current

$
59,502


$
47,754


$
32,584Deferred:France

$
24


$
2,373


$
2,702Rest of world


(3,269
)


3,746



(4,877
)Total deferred

$
(3,245
)

$
6,119


$
(2,175
)Total

$
56,257


$
53,873


$
30,409     Year Ended December 31,2006


2005


2004Income tax provision computed at
    the French statutory rate

$
45,317


$
51,172


$
27,470Non-deductible acquired in-process
    research and development


2,391



1,040



Non-deductible FAS 123R
    expense


10,098







Income at lower tax rates


(9,536
)


(10,162
)


(6,808
)Research and development tax
    credits


(7,997
)


(7,675
)


(3,911
)Net expense on intercompany
    transfers of intellectual property


12,429



12,515



11,761Other individually immaterial items


3,555



6,983



1,897Total

$
56,257


$
53,873


$
30,409    103




---



##### Table of Contents



Business
    Objects S.A.
  Notes to
    Consolidated Financial
    Statements  (Continued)
    December 31,2006


2005Deferred tax assets:Net operating loss carryforwards

$
24,260


$
31,164Accrued bonuses and compensation


7,265



5,926Amortization of intangible assets


4,926



2,905Accrued rent


2,051



2,657Credits


5,417



Depreciation


12,657



9,303Stock-based compensation


4,904



Reserves, accruals, and other


10,473



9,885Total deferred tax assets


71,953



61,840Valuation allowance


(13,527
)


(13,342
)Total deferred tax assets

$
58,426


$
48,498Deferred tax liabilities:Intangible assets

$
(30,541
)

$
(20,751
)Deferred revenue


(2,074
)


Prepaid expenses


(2,222
)


Other, individually immaterial
    items


(381
)


(62
)Total deferred tax liabilities


(35,218
)


(20,813
)Net deferred tax assets(1)

$
23,208


$
27,685     (1)
    
    At December 31, 2006, balance sheet classification
    included: $15.2 million in current deferred tax assets,
    $12.6 million in long-term deferred tax assets, and
    $4.6 million of long-term deferred tax liabilities. At
    December 31, 2005, balance sheet classification included:
    $13.6 million in current deferred tax assets,
    $17.1 million in long-term deferred tax assets offset by
    $2.9 million of long-term deferred tax liabilities.       104




---



##### Table of Contents



Business
    Objects S.A.
  Notes to
    Consolidated Financial
    Statements  (Continued)
           13.
    Segment
    and Geographic Information  Segment.
  Year Ended December 31,2006


2005


2004Net license fees(1):Information discovery and delivery

$
427,900


$
447,557


$
427,181Enterprise performance management
    solutions


78,033



40,690



28,026Enterprise information management
    solutions


54,298



27,390



18,166Total net license fees

$
560,231


$
515,637


$
473,373Total service revenues


693,529



561,514



452,258Total revenues

$
1,253,760


$
1,077,151


$
925,631  105




---



##### Table of Contents



Business
    Objects S.A.
  Notes to
    Consolidated Financial
    Statements  (Continued)
    (1)
    
    The Company does not have VSOE for its licensed products.
    Accordingly, these amounts represent the residual values of
    contracts and, to the extent that more than one product was sold
    in a transaction, the allocation of value between products is
    based purely upon the proportionate value ascribed to each
    product in the arrangement.  Geography.
  Year Ended December 31,2006


2005


2004Revenues(1):United States

$
642,605


$
503,798


$
408,727Europe, Middle East and Africa
    (EMEA), excluding France


371,752



355,104



311,746France


107,466



95,174



85,942Americas, excluding the United
    States


44,907



42,179



44,565Asia Pacific


87,030



80,896



74,651Total revenues

$
1,253,760


$
1,077,151


$
925,631     (1)
    
    The basis for attributing revenues from Customers to individual
    countries is primarily the location of the customer.    December 31,2006


2005Long-lived assets:United States

$
1,284,523


$
1,255,168Europe, Middle East and Africa
    (EMEA), excluding France


125,392



61,976France


37,333



50,587Americas, excluding the United
    States


60,474



47,967Asia Pacific


10,103



7,918Total long-lived assets

$
1,517,825


$
1,423,616   Confédération Francaise
    Démocratique du Travail Confédération
    Générale du Travail
  comité dentreprise
 106




---



##### Table of Contents



Business
    Objects S.A.
  Notes to
    Consolidated Financial
    Statements  (Continued)
   14.
    Escrows
    Payable and Restricted Cash    December 31,Escrows Payable


Restricted Cash2006


2005


2006


2005Funds held in escrow in connection
    with the acquisition of Acta

$
6,536


$
6,423


$
6,536


$
6,423Bonuses to former Acta employees,
    subject to indemnification obligations


304



300



278



276Cash subject to withdrawal
    restrictions on deposit of security for bonuses to be paid to
    Acta employees, subject to employment related contingencies










353



353Funds held in escrow in connection
    with the acquisition of SRC


133



15,005



133



15,005Funds held in escrow in connection
    with the acquisition of Infommersion


8,473







11,476



Funds held in escrow in connection
    with the acquisition of Medience


3,314







3,314



Funds held in escrow in connection
    with the acquisition of Firstlogic


10,884







15,930



Funds held in escrow in connection
    with the acquisition of ALG


4,308







4,308



Other


587







669



100Total balances 
    short-term

$
34,539


$
21,728


$
42,997


$
22,157Cash held to support letter of
    credit for San Jose premises

$



$



$
3,477


$
6,954Funds held in escrow in connection
    with the acquisition of Infommersion






8,000







11,002Funds held in escrow in connection
    with the acquisition of Medience






2,902







2,902Funds held in escrow in connection
    with the acquisition of ALG


5,875







5,875



Other


1,779







1,779



Total balances 
    long-term

$
7,654


$
10,902


$
11,131


$
20,858          107




---



##### Table of Contents



Business
    Objects S.A.
  Notes to
    Consolidated Financial
    Statements  (Continued)
          15.
    Credit
    Agreement  and/or
    16.
    Accounting
    for and Disclosure of Guarantees  Guarantors Accounting for Guarantees
 108




---



##### Table of Contents



Business
    Objects S.A.
  Notes to
    Consolidated Financial
    Statements  (Continued)
          Product Warranties.
  Environmental Liabilities. Accounting for Asset Retirement
    Obligations
 109




---



##### Table of Contents



Business
    Objects S.A.
  Notes to
    Consolidated Financial
    Statements  (Continued)
   Other Liabilities and Other Claims.
  17.
    Supplemental
    Financial Information (Unaudited)  Selected Quarterly
    Data    Three Months EndedDec. 31,


Sep. 30,


Jun. 30,


Mar. 31,


Dec. 31,


Sep. 30,


Jun. 30,


Mar. 31,2006(1)


2006(1)


2006(1)


2006(1)


2005


2005


2005


2005(In thousands, except per share data)Total revenues

$
370,570


$
310,435


$
294,484


$
278,271


$
304,586


$
261,381


$
262,409


$
248,775Gross profit


288,944



231,958



218,185



209,528



238,847



199,358



202,379



190,226Acquired in-process research and
    development


3,430







3,300



300



1,200



2,384







Restructuring costs


















150











Income from operations


56,959



29,495



13,453



17,928



45,742



30,088



34,947



21,417Net income

$
35,509


$
19,569


$
7,949


$
12,337


$
34,913


$
19,567


$
23,139


$
15,006Net income per ordinary share and
    ADS  basic

$
0.37


$
0.21


$
0.09


$
0.13


$
0.38


$
0.22


$
0.26


$
0.17Net income per ordinary share and
    ADS  diluted

$
0.37


$
0.21


$
0.08


$
0.13


$
0.37


$
0.21


$
0.25


$
0.16     (1)
    
    Gross profit, income from operations and net income for all
    quarters in 2006 include the impact of stock-based compensation
    expense recorded in accordance with FAS 123R. See
    Notes 1 and 8 to the Consolidated Financial Statements for
    additional information. 110




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Item 9.
    Changes
    in and Disagreements with Accountants on Accounting and
    Financial Disclosure    Item 9A.
    Controls
    and Procedures  Evaluation
    of Disclosure Controls and Procedures
  Rule 13a-15(e)) Form 10-K.
  Managements
    Report on Internal Control Over Financial Reporting
      Internal Control  Integrated
    Framework.
        Changes
    in Internal Control over Financial Reporting
    Item 9B.
    Other
    Information   111




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##### Table of Contents



PART III  Item 10.
    Directors,
    Executive Officers and Corporate Governance    Name

Age

Principal Occupation and Business ExperienceBernard Charlès


50


President of Dassault
    Systèmes
    S.A.Mr. Charlès
    has been Chief Executive Officer of Dassault Systèmes, a
    worldwide leader in product lifecycle management, since 2002 and
    President of Dassault Systèmes since 1995. Prior to
    becoming President, Mr. Charlès served as Dassault
    Systèmes President of Research and Development from 1988 to
    1995 and as President of Research and Strategy from 1985 to
    1988. Mr. Charlès is also a director of Dassault
    Systèmes, Dassault Systèmes Corp., Dassault
    Systèmes K.K., DELMIA Corp., Solidworks Corporation,
    SmarTeam Corporation Ltd. (until May 2006), Abaqus Inc. and
    Dassault Systèmes Canada, Inc. Mr. Charlès joined
    our Board of Directors in 1998 and serves as a member of our
    Compensation Committee. Mr. Charlès term of
    office on our Board of Directors will expire at the close of our
    2007 Annual Shareholders meeting.Jean-François Heitz


57


Consultant and Private
    Investor.Mr. Heitz
    was Deputy Chief Financial Officer at Microsoft Corporation from
    April 2000 to June 2003. Mr. Heitz joined Microsoft France
    in 1989 as Deputy General Manager, and served in a number of
    different roles during his tenure, including Corporate
    Treasurer. Prior to Microsoft, he spent nine years at Matra SA
    (Group Lagardere), a French multinational high-tech
    conglomerate, in various business and finance positions and four
    years with Air Liquide as an Operations Research engineer.
    Mr. Heitz is a member of the Board of Directors and
    Chairman of the Audit Committee of Wavecom S.A., ARC
    International Corporation and Bull S.A.; he is a member of the
    Board of Directors of Total Immersion and TIR Systems Ltd.
    Mr. Heitz joined our Board of Directors in May 2003, and he
    also serves on our Audit Committee as Chairman and financial
    expert. Mr. Heitzs term of office on our Board of
    Directors will expire at the close of our 2009 Annual
    Shareholders meeting.Gerald Held


58


Consultant.Since
    1999, as a Principal of Held Consulting LLC, Dr. Held has
    been a strategic consultant primarily to Chief Executive
    Officers of technology firms ranging from startups to very large
    organizations. In 1998, Dr. Held was
    CEO-in-residence
    at the venture capital firm Kleiner Perkins Caulfield &
    Byers. Through 1997, Dr. Held was Senior Vice President of
    Oracles server product division. Prior to Oracle,
    Dr. Held spent 18 years at Tandem Computers
    Incorporated. Dr. Held is the Chairman of the Board of
    Directors of Software Development Technologies, Inc. and Vertica
    Systems, Inc. He currently serves as a member of the Boards of
    Directors of Openwave Systems Inc., Mirapoint Inc. and
    MetaMatrix Inc., and is Chairman and a member of the
    Compensation Committee of Vertica Systems. Dr. Held joined
    our Board of Directors in October 2002. Dr. Held is also
    the lead independent director, Chairman of our Compensation
    Committee, a member of our Corporate Governance Committee and a
    member of our  112




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##### Table of Contents



Name

Age

Principal Occupation and Business ExperienceNominating Committee.
    Mr. Helds term of office on our Board of Directors
    will expire at the close of our 2008 Annual Shareholders meeting.Kurt Lauk


60


President of Globe CP
    GmbH.Dr. Lauk
    is President of Globe CP GmbH, an investment & advisory
    firm he co-founded in July 2000. Dr. Lauk was elected
    President of the Economic Council of the Christian Democratic
    Party of Berlin (Germany) in November 2000. From February to
    July 2000, he was a member of faculty of the Stanford University
    Business School. From 1996 to 1999, Dr. Lauk served in
    various capacities at Daimler-Benz and the Mercedes-Benz Group,
    including Member of the Board of Management 
    Commercial Vehicle Division and was a member of the
    Chairmans Integration Council of Daimler-Chrysler A.G.
    From 1992 to 1996, Dr. Lauk was Executive Senior Vice
    President (Member of the Board of Management) of Finance
    Controlling of VEBA A.G. (today Eon AG). From 1989 to 1992, he
    served as Vice Chairman, Chief Financial Officer and Chief
    Marketing Officer of Audi AG. From 1984 to 1989, Dr. Lauk
    served as Chief Executive Officer of Zinser Textilmaschinen
    GMbH. From 1978 to 1984, Dr. Lauk served in various
    capacities at the Boston Consulting Group, including Director of
    the Munich office, and Vice President and Director of BCG, Inc.
    (Boston USA). Dr. Lauk is a member of the Board of
    Directors of Corus Group plc, Gehring GmbH & Co KG,
    Scheuffelen Papierfabrik and ForteMedia. Dr. Lauk joined
    our Board of Directors in June 2004. Dr. Lauk also serves
    on our Audit Committee. Dr. Lauks term of office on
    our Board of Directors will expire at the close of our 2007
    Annual Shareholders meeting.Carl Pascarella


64


Executive Advisor, Texas
    Pacific
    Group.Mr. Pascarella
    is currently affiliated with Texas Pacific Group as an Executive
    Advisor. He recently retired as President and Chief Executive
    Officer from Visa U.S.A. Inc., after twelve years of service.
    Before assuming that position, he was President and Chief
    Executive Officer of Visa Asia Pacific Region and Director of
    the Asia-Pacific Regional Board. Before joining Visa,
    Mr. Pascarella was Vice President, International Division
    at Crocker National Bank and Vice President, Metropolitan
    Banking at Bankers Trust Company. Mr. Pascarella was
    also head of the California International Banking and Trade
    Finance organization for Crocker National Bank.
    Mr. Pascarella joined our Board of Directors in March 2005.
    He is also a member of our Compensation Committee. His term of
    office on our Board of Directors will expire at the close of our
    2007 Annual Shareholders meeting. 113




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Name

Age

Principal Occupation and Business ExperienceDavid Peterschmidt


59


President and Chief Executive
    Officer of Openwave
    Systems, Inc.Since
    November 2004, Mr. Peterschmidt has served as President and
    Chief Executive Officer of Openwave Systems Inc., a
    telecommunications software and services company. From October
    2003 to November 2004, Mr. Peterschmidt served as the Chief
    Executive Officer and Co- Chairman of the Board of Directors of
    Security, Inc. Mr. Peterschmidt served as President, Chief
    Executive Officer and Director of Inktomi, Inc., an internet
    infrastructure company, from July 1996 to March 2003, and served
    as Chairman of the Inktomi board from December 1997 to March
    2003. He currently serves as a member of the Boards of Directors
    of Openwave Systems, Inc., and UGS, a private software company.
    Mr. Peterschmidt joined our Board of Directors in May 2003.
    He is also Chairman of our Nominating Committee and a member of
    our Audit Committee. Mr. Peterschmidts term of office
    on our Board of Directors will expire at the close of our 2009
    Annual Shareholders meeting.Arnold Silverman


68


Consultant and Private
    Investor.Since
    1991, Mr. Silverman has been a venture capital investor.
    Mr. Silverman was a Director of Oracle from 1984 to 1991.
    Mr. Silverman currently serves as a member of the Board of
    Directors in Remend Inc. Mr. Silverman is
    Mr. Liautauds
    father-in-law.
    Mr. Silverman joined our Board of Directors in February
    1991, and he is also Chairman of our Corporate Governance
    Committee. Mr. Silvermans term of office on our Board
    of Directors will expire at the close of our 2007 Annual
    Shareholders Meeting.Executive OfficersJohn Schwarz


56


Chief Executive Officer and
    Director.Mr. Schwarz
    was elected as Chief Executive Officer of the Company in
    September 2005 and was appointed to our Board of Directors in
    January 2006. Before joining Business Objects, Mr. Schwarz
    served as President and Chief Operating Officer of Symantec
    Corporation from December 2001 to September 2005. Prior to
    joining Symantec, from January 2000 to November 2001,
    Mr. Schwarz served as President and Chief Executive Officer
    of Reciprocal Inc., which provided
    business-to-business
    secure
    e-commerce
    services for digital content distribution over the internet.
    Before joining Reciprocal, Mr. Schwarz spent 25 years
    at IBM Corporation where most recently he was General Manager of
    IBMs Industry Solutions unit, a worldwide organization
    focused on building business applications and related services
    for IBMs large industry customers. Mr. Schwarz serves
    as a member of the Board of Directors of the Information
    Technology Association of Americas Software Board.
    Mr. Schwarzs term of office on our Board of Directors
    will expire at the close of the 2009 Annual Shareholders
    meeting. 114




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##### Table of Contents



Name

Age

Principal Occupation and Business ExperienceBernard Liautaud


44


Chairman of the Board and Chief
    Strategy
    Officer.Mr. Liautaud
    is a founder of the Company and has served as Chairman of the
    Board of Directors since our incorporation in August 1990. He
    served as Chief Executive Officer from August 1990 through
    September 2005. Mr. Liautaud was appointed as our Chief
    Strategy Officer in September 2005. Prior to the founding of
    Business Objects, Mr. Liautaud was the Sales Marketing
    Manager with Oracle Corporations French subsidiary.
    Mr. Liautaud is the
    son-in-law
    of Mr. Silverman, one of the Companys Directors.
    Mr. Liautaud is a member of the Board of Directors of My
    SQL. Mr. Liautauds term of office on our Board of
    Directors will expire at the close of the Companys 2009
    Annual Shareholders meeting.James R. Tolonen


57


Chief Financial
    Officer.Mr.
    Tolonen joined Business Objects as Senior Group Vice President
    and Chief Financial Officer in January 2003. Before joining our
    Company, he served as Chief Operating Officer and Chief
    Financial Officer of IGN Entertainment, Inc. from October 1999
    to December 2002. Mr. Tolonen was a Director of IGN
    Entertainment and a Director and member of the Compensation
    Committee of Closedloop Solutions, Inc. until 2003. From April
    of 1998 to September of 1998, Mr. Tolonen was the President
    and Chief Financial Officer of Cybermedia, Inc. Prior to that,
    Mr. Tolonen was Chief Financial Officer and a member of the
    Office of the President at Novell, Inc. from 1989 to 1998.   Section 16(a)
    Beneficial Ownership Reporting Compliance
    Rule 16a-3 Regulation S-K
  Ethics
    Code
  www.businessobjects.com 157/159 www.businessobjects.com Form 8-K
 115




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##### Table of Contents



Form 10-K
  Procedures
    for Submitting Shareholder Proposals
          
    if the issuer publishes its notice up to 45 days before the
    shareholders meeting, a shareholder may provide a proposal
    during the
    25-day
    period after the issuers BALO notice;
    if the issuer publishes its notice more than 45 days before
    the shareholders meeting, a shareholder may provide a
    proposal during the
    20-day
    period after the issuers BALO notice.      157-159
      Procedures
    for Submitting Shareholder Proposals Relating to Nominees
    for Director
    
    name, age and professional background over the last 5 years;
    position in Business Objects, if any; and 116




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
    number of Business Objects shares held, if any.    Director
    Independence
  Form 10-K
          Corporate
    Governance
         117




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##### Table of Contents



Structure
    and Composition of the Board of Directors
    Principal
    Functions of the Board of Directors
            Board of
    Directors Access to Management
    Applying
    Governance Principles to Our Business
   118




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##### Table of Contents



Education
    and Enforcement
    Board of
    Directors Meetings and Committees
        The Audit
    Committee
      
    retaining, evaluating and terminating the independent auditors
    subject to the powers that are expressly reserved under French
    corporate law to the board of directors and to the shareholders
    at annual general meetings;
    reviewing the annual report of the independent auditors;
    reviewing the audit plan and scope with the independent and
    internal auditors;
    reviewing with management and the independent, and internal
    auditors our quarterly financial statements, semi-annual
    financial statements, annual financial statements and
    disclosures, including disclosure controls and procedures and
    Managements Discussion and Analysis of Financial Condition
    and Results of Operations prior to the public release or filing
    of these statements;
    consulting with independent, and internal auditors and reviewing
    with them the results of their quarterly review, annual audit
    and other examinations;
    reviewing and approving in advance the annual budget for audit
    services;
    reviewing and approving in advance any non-audit services;
    reviewing and approving any material accounting policy changes;
    reviewing the effectiveness and operation of our system of
    internal controls and internal control over financial reporting; 119




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##### Table of Contents




    reviewing and approving, subject to board of directors and
    shareholders ratification if applicable, all related party
    transactions;
    establishing procedures for the receipt and treatment of
    complaints regarding accounting, controls, or auditing matters
    and/or
    corporate attorneys reports of evidence of a material
    violation of securities laws;
    reviewing and evaluating its performance and report such
    evaluation to the board of directors at least once a
    year; and
    reviewing and evaluating whether it complies with its membership
    requirements and taking corrective action, as necessary, at
    least once a year.  Rule 10A-3(b)(2), article L.225-228 Rule 10A-3(b)(2)
    The
    Compensation Committee
    The
    Nominating Committee
     120




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##### Table of Contents



The
    Corporate Governance Committee
    Item 11.
    Executive
    Compensation  COMPENSATION
    DISCUSSION & ANALYSIS
  Executive
    Compensation Philosophy
    
    Attract and retain executives who will contribute to our
    long-term success by paying compensation that is competitive
    with the practices of other leading high technology companies;
    Align the interests of our executives with our
    shareholders by providing stock based compensation to
    encourage long-term value creation; and
    Set challenging performance goals and reward that performance
    through short-term incentives upon achievement of these goals.   121




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##### Table of Contents



Executive
    Officer Compensation  Cash
  Philosophy and Practice of Cash
    Compensation. th
  Base Salary. th
    Short-term Incentive Bonus. th
   122




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##### Table of Contents



80-90%
          Long-term Incentive Bonus.
  Other Cash Compensation. Form 10-K.
  Deferred Compensation. and/or Form 10-K.
  Executive
    Officer Compensation  Equity Awards
  Philosophy and Practice of Equity Awards.
  and/or
 123




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##### Table of Contents



Sub-Plan) Sub-Plan and/or and/or
  and/or Sub-Plan and/or
    Eligibility for Equity Grants. and/or
    Equity Grant Guidelines, Vesting and
    Price.
  th
 124




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##### Table of Contents



Approval of Equity Grants.
  Timing of Equity Awards.
  
    the 10 trading days before and after release of material
    non-public information, including earnings-related
    information; or
    During the period beginning on the date that we become aware of
    material non-public information until 10 trading days after
    disclosure of this information (during the quiet
    period for instance).        Performance-based Equity Awards.
  Executive
    Officer Compensation  Benefits and Retirement
    Plans
  Form 10-K.
 125




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##### Table of Contents



Form 10-K.
  Executive
    Officer Compensation  Post-Employment
    Compensation
  Post-Employment/Change-in-Control Form 10-K.
       126




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##### Table of Contents



EXECUTIVE
    COMPENSATION
  Form 10-K Rule 16a-1(f)
  SUMMARY
    COMPENSATION
    For the Year Ended December 31, 2006
    Change in thePension ValueandNon-Equity


NonqualifiedIncentive


DeferredStock


Option


Plan


Compensation


All OtherSalary


Bonus


Awards


Awards


Compensation


Earnings


Compensation


TotalName and Principal Position

Year


($)


($)


($)(2)


($)(2)


($)


($)


($)


($)John Schwarz


2006



750,000



0



4,388,214
(4)


3,267,444
(5)


514,072



0



0



8,919,729Chief Executive OfficerJames Tolonen


2006



350,000



0



0



664,295
(6)


124,372



0



0



1,138,667Chief Financial OfficerBernard Liautaud(1)


2006



515,000



0



1,319,729
(7)


3,590,106
(8)


384,463



0



80,616
(3)


5,889,915Chairman & Chief Strategy
    OfficerSusan Wolfe


2006



315,000



20,000



17,705
(9)


492,387
(10)


120,891



0



0



965,983Senior Vice President 
    General Counsel & Secretary     (1)
    
    All amounts are stated in U.S. dollars. For payment in
    total or in part in currencies other than the U.S. dollars,
    translation of compensation into U.S. dollars is calculated
    using the average exchange rate of U.S. dollar against the
    British pound and the euro, for 2006. Bernard Liautaud is the
    only named executive officer paid in currencies other than the
    U.S. dollar. Due to variations to the exchange rates of the
    U.S. dollar against the British pound and the euros, the
    U.S. dollar values included in this table do not reflect
    actual amounts for Mr. Liautaud.(2)
    
    Assumptions made in the valuation pursuant to FAS 123R are
    discussed in note 8 to the consolidated financial
    statements and in the Management Discussion & Analysis.
    Options were issued to the named executive officers in ordinary
    shares and the exercise price is denominated in euros, except
    for options assumed in connection with business combinations.
    When the exercise price is in euros, the fair value is computed
    in euros as well. The stock compensation expense, booked on a
    quarterly basis, is then converted into U.S. dollars based
    on the exchange rate used to convert the financial statements.(3)
    
    All other compensation for Mr. Liautaud includes
    (i) $1,000 of taxable benefit he receives for his UK
    personal medical and dental insurance (BUPA); (ii) car
    allowance expenses of $7,054 (iii) life insurance premiums
    of $6,110, and (iv) payments of $66,452 to the French
    pension retirement plans which are contributions by us on his
    behalf.(4)
    
    Represents the stock-based compensation of the RSUs granted on
    November 22, 2005.(5)
    
    Represents the stock-based compensation of the options granted
    on November 11, 2005.(6)
    
    Represents the stock-based compensation of the options granted
    on March 14, 2003.(7)
    
    Represents the stock-based compensation of the RSUs granted on
    November 22, 2005. 127




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##### Table of Contents



(8)
    
    Represents $45,460 of options granted on January 11, 2002,
    $1,445,020 of options granted on August 26, 2003,
    $1,384,071 of options granted on February 23, 2004,
    $116,500 of options granted on December 15, 2004 and
    $599,055 of options granted on November 11, 2005.(9)
    
    Represents the stock-based compensation of the RSUs granted on
    May 31, 2006.(10)
    
    Represents $41,018 of options granted on October 1, 2003,
    $224,904 of options granted on February 23, 2004, $186,401
    of options granted in December 15, 2004 and $40,064 of
    options granted on May 31, 2006.  GRANTS OF
    PLAN BASED-AWARDS
    For the Year Ended December 31, 2006
    All OtherAll Other


OptionStock


Awards:


Exercise


GrantAwards:


Number of


or Base


Date FairEstimated Possible Payouts Under Non-Equity











Number of


Securities


Price of


Value ofIncentive Plan Awards(1)


Estimated Possible Payouts Under Equity Incentive
    Plan Awards(2)


Shares of


Underlying


Option


Stock andName of the



Threshold


Target


Maximum


Threshold


Target


Maximum


Stock or


Options


Awards


OptionExecutive Officer

Grant Date

($)


($)


($)


(#)


(#)


(#)


Units (#)


(#)


($/Sh)(3)


Awards($)(4)John Schwarz

none


375,000



750,000



1,350,000



0



0



0



0



0



0



025/01/06(5)














37,500



75,000



75,000



0



0



39.15



1,148,25025/01/06(6)














16,062



32,123



32,123















1,317,364James Tolonen

none


87,500



175,000



262,500



0



0



0



0



0



0



0Bernard Liautaud

none


257,500



515,000



927,000



0



0



0



0



0



0



025/01/06(7)














12,500



37,500



37,500



0



0



0



1,537,875Susan Wolfe(8)

none


78,750



157,500



236,250



0



0



005/31/2006


























4,125







0



121,64605/31/2006






























25,125



29.99



313,309     (1)
    
    The non-equity incentive plan of the named executive officers,
    is defined by Business Objects executive compensation
    policy plan approved by our Board of Directors and Compensation
    Committee. According to this plan, the named executive officers
    are entitled to the additional payment of a percentage of their
    salary (the bonus target) depending on the percentage of
    achievement of Business Objects goals. The 2006 plan is
    based on Business Objects revenue and operating margin
    goals as outlined in our annual operating plan, and we set the
    following payout rules: (a) if the percentage of
    achievement is lower than 85%, the Named Executive Officers will
    not be entitled to any payment; (b) if the percentage of
    achievement is 85% or more, the Named Executive Officers will be
    entitled to 50% or more of their bonus target; (c) if the
    percentage of achievement is 100%, the Named Executive Officers
    will be entitled to 100% of their bonus target; and (d) if
    the percentage of achievement exceeds 100%, the Named Executive
    Officers will be entitled to up to 150% (Mr. Tolonen and
    Ms. Wolfe) or 180% (Mr. Schwarz and Mr. Liautaud)
    of their bonus target.(2)
    
    The vesting conditions of the performance options are set by the
    Board and the vesting conditions of the performance RSUs are set
    by the administrator of the 2001 Stock-Incentive
    Sub-Plan.(3)
    
    Options were issued to the named executive officers in ordinary
    shares and denominated in euros. The exercise prices and fair
    values were determined using an exchange rate on
    December 31, 2006 of 1.3204.(4)
    
    Assumptions used to determine the value of the awards noted in
    the table value are discussed in note 8 to the consolidated
    financial statements and in the Managements
    Discussion & Analysis of Financial Condition and
    Results of Operations. The fair value is computed in euros, so
    it was converted into U.S. dollars based on the exchange
    rate applicable on the accounting grant date.(5)
    
    These performance options were granted on November 11, 2005
    (legal grant date) but the final performance criteria were set
    on January 25, 2006 (accounting grant date).(6)
    
    These performance RSUs were granted on November 22, 2005
    (legal grant date) but the final performance criteria were set
    on January 25, 2006 (accounting grant date). 128




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##### Table of Contents



(7)
    
    These performance RSUs were granted on November 22, 2005
    (legal grant date) but the final performance criteria were set
    on January 25, 2006 (accounting grant date).(8)
    
    The RSUs granted to Ms. Wolfe were granted under our 2001
    Stock Incentive
    Sub-Plan and
    vest annually by one-third on May 31, over three years. The
    options granted to Ms. Wolfe were granted under our 2001
    Stock Incentive Plan and vest as follows: 25 % of the options
    vest twelve months after the grant date and
    1/48th
    of the options vest each month thereafter, provided that
    Ms. Wolfe remains in Continuous Status as a Beneficiary, as
    defined by the plan.  OUTSTANDING
    EQUITY AWARDS
    At December 31, 2006
    Stock AwardsEquityIncentiveEquity

Plan Awards:Option Awards(1)





Incentive

Market orEquity









Plan Awards:

PayoutIncentive









Number of

Value ofPlan Awards:







Market

Unearned

UnearnedNumber of

Number of

Number of





Number of

Value of

Shares,

Shares,Securities

Securities

Securities





Shares or

Shares or

Units or

Units orUnderlying

Underlying

Underlying

Option



Units of

Units of

Other

OtherVesting

Unexercised

Unexercised

Unexercised

Exercise

Option

Stock that

Stock that

Rights that

Rights thatName of the Executive



Commencement

Options (#)

Options (#)

Unearned

Price

Expiration

have not

have not

have not

have LNotOfficer

Grant Date

Date

Exercisable

Unexercisable

Options (#)

($)(2)

Date

Vested (#)

Vested ($)

Vested (#)

Vested ($)John Schwarz


11/11/05



09/12/05



140,625



309,375



0



39.15



11/11/1511/11/05



(3
)


0



0



225,000



39.15



11/11/1511/22/05



09/12/05(4
)






















132,513



5,227,638



0



011/22/05



(5
)






















0



0



96,371



3,801,836James Tolonen


03/14/03



01/01/03



73,870



5,730



0



19.54



03/14/13Bernard Liautaud


04/01/99



04/01/99



150,000



0



0



12.09



04/01/0906/05/00



06/05/00



150,000



0



0



87.50



06/05/1002/09/01



02/09/01



75,000



0



0



72.32



02/09/1106/15/01



06/15/01



100,000



0



0



41.20



06/15/1101/11/02



01/11/02



250,000



0



0



55.85



01/11/1208/26/03



08/26/03



333,332



66,668



0



30.41



08/26/1302/23/04



02/23/04



283,333



116,667



0



34.18



02/23/1412/15/04



12/15/04



25,000



25,000



0



23.15



12/15/1411/11/05



11/11/05



35,208



94,792



0



39.15



11/11/1511/22/05



(6
)






















0



0



25,000



986,250Susan Wolfe


10/01/03



10/01/03



9,945



2,618



0



29.40



10/01/132/23/04



12/11/03



48,750



16,250



0



34.18



2/23/1412/15/04



12/15/04



40,000



40,000



0



23.15



12/15/145/31/06



5/31/06



0



25,125



0



29.99



05/31/165/31/06



(7
)






















4,125



162,731



0



0     (1)
    
    The outstanding options reported in this table are subject to
    the following vesting schedule: 25% of the options vest twelve
    months after the vesting commencement date and
    1/48th of
    the options vest each month thereafter, unless a specific
    vesting schedule is described in the related footnote, and
    provided that the named executive officer remains in Continuous
    Status as a Beneficiary, as defined by the plan.(2)
    
    The option prices are in euros. They were converted into
    U.S. dollars using an exchange rate on December 31,
    2006, of 1.3204.(3)
    
    These options may be exercisable, in whole or in part, in
    accordance with the following schedule and conditions:
    1/6th
    of the options will vest on each of March 15, 2007, 2008
    and 2009 depending on the operating margin goal achievement and
    1/6th
    of the options will vest on each of March 15, 2007, 2008
    and 2009 depending on revenue goals achievement. 129




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##### Table of Contents



(4)
    
    These restricted stock units (RSUs) are subject to the following
    vesting schedule: 25% of the RSUs vest twelve months after the
    vesting commencement date and
    1/48th of
    the RSUs vest each month thereafter, provided that the named
    executive officer remains in Continuous Status as a Beneficiary,
    as defined by the plan.(5)
    
    These RSUs may vest, in whole or in part, in accordance with the
    following schedule and conditions:
    1/6th
    of the RSUs will vest on each of March 15, 2007, 2008 and
    2009 depending on the operating margin goal achievement and
    1/6th
    of the RSUs will vest on each of March 15, 2007, 2008 and
    2009 depending on revenue goals achievement.(6)
    
    These RSUs may vest, in whole or in part, in accordance with the
    following schedule and conditions:
    1/4th
    of the RSUs will vest on each of March 15, 2007 and
    September 15, 2007 depending on the operating margin
    achievement and
    1/4th
    of the RSUs will vest on each March 15, 2007 and
    September 15, 2007 depending on revenue goals achievement.(7)
    
    These RSUs vest by one-third over three years beginning on the
    first anniversary date of the grant.  OPTIONS
    EXERCISED AND STOCK VESTED
    For the Year Ended December 31, 2006
    Option Awards

Stock AwardsNumber of Shares



Number of SharesAcquired on

Value Realized on

Acquired on

Value Realized onName of the Executive Officer

Exercise (#)

Exercise ($)(1)

Vesting (#)

Vesting ($)(2)John Schwarz


0



0



110,231
(3)


3,689,911James Tolonen


120,400



1,947,979



0



0Bernard Liautaud


150,000



4,073,842



21,882
(4)


765,526Susan Wolfe


0



0



0



0     (1)
    
    The Option Awards value realized is determined by using the
    closing price of one ADS on the Nasdaq Stock Market on the
    exercise date less the exercise price in euros converted into
    U.S. dollars, using the applicable exchange rate at noon on
    the exercise date.(2)
    
    The Stock Awards value realized is determined by using the
    closing price of one ADS on the Nasdaq Stock Market on the
    vesting date.(3)
    
    Including 49,204 ADS surrendered for withholding tax purposes.(4)
    
    Including 10,229 ADS surrendered for withholding tax purposes.  PENSIONS
    BENEFITS
    For the Year Ended December 31, 2006
    Number of

Present

PaymentsYears of

Value of the

DuringCredited

Accumulated

Last FiscalName of the Executive Officer

Plan Name

Services (#)

Benefit ($)(1)

Year ($)John Schwarz

none


0



0



0James Tolonen

none


0



0



0Bernard Liautaud(2)

Generali


10



10,481



0Arial


3



7,258



0Susan Wolfe

none


0



0



0     (1)
    
    All amounts are stated in U.S. dollars. For amounts in
    total or in part in currencies other than the U.S. dollars,
    translation of compensation into U.S. dollars is calculated
    using the average exchange rate of U.S. dollar against 130




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##### Table of Contents



the euro, for 2006. Bernard Liautaud is the only named executive
    officer with amounts in currencies other than the
    U.S. dollar. Due to variations of the exchange rates of the
    U.S. dollar against the euro, the U.S. dollar value in
    this table does not reflect actual amounts for Bernard Liautaud.(2)
    
    Mr. Liautaud benefits from a French retirement plan, in
    addition to the French social security plan in his capacity as
    Chairman. This plan is implemented by us and managed by a French
    insurance company. The initial plan managed by Generali was
    terminated on December 31, 2003 and replaced by a new plan
    managed by Arial on January 1, 2004. The purpose of these
    plans is to receive annuities in addition to the French legal
    social security plan annuities. Mr. Liautaud contributes 2%
    of his salary and bonus to the plan. The amount of the annuity
    is calculated according to the insurance company formula, based
    on the amount of the contribution and interest.  NON-QUALIFIED
    DEFERRED COMPENSATION
    For the Year Ended December 31, 2006
    Executive

Registrant

Aggregate



AggregateContributions in

Contributions in

Earnings in

Aggregate

Balance atLast Fiscal

Last Fiscal

Last Fiscal

Withdrawals/

Last FiscalName of the Executive Officer

Year ($)

Year ($)

Year ($)

Distribution ($)

Year End ($)John Schwarz


163,711
(1)


0



36,205
(1)


0



199,916James Tolonen


0



0



0



0



0Bernard Liautaud


0



0



0



0



0Susan Wolfe


0



0



0



0



0     (1)
    
    The contributions and earnings reported in this table are
    related to 2006 compensation only and were not reported as
    compensation earned in 2005 by Mr. Schwarz.    POST-EMPLOYMENT/CHANGE-IN-CONTROL
    PAYMENTS TABLE
  Potential
    Post-Employment Payments
  and/or and/or
   131




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##### Table of Contents



and/or and/or and/or
  John
    G. Schwarz  Chief Executive Officer
  Estimated Value of Change in Control and Severance
    Benefits(1)NEO Termination for

NEO Termination forGood Reason or

Good Reason orWithout Cause

Without CauseUnrelated to a

Related to a

Death orCompensation and Benefits

Change in Control(2)

Change in Control(3)

DisabilityAnnual Base Salary

$
750,000
(4)

$
1,500,000
(5)


N/AAnnual Incentive Bonus

$
750,000
(6)

$
1,500,000
(7)


N/AStock Options

$
19,805
(8)

$
49,918
(9)


N/ARestricted Stock Units

$
3,752,296
(10)

$
8,697,914
(11)


N/AHealth Care Benefits

$
16,019
(12)

$
16,019
(13)


N/ALife Insurance


N/A



N/A


$
1,000,000
(14)Non Qualified Deferred Compensation

$
199,916
(15)

$
199,916
(15)


N/A     (1)
    
    All amounts are stated in U.S. dollars. With respect to
    options and RSUs for ordinary shares, euros have been converted
    to U.S. dollars using the 2006 average exchange rate of the
    U.S. dollar against the euro. All amounts are estimates
    based on an assumed triggering date of December 31, 2006
    and the closing sales price of our ADSs on the Nasdaq Global
    Select Market on December 29, 2006, which was the last
    trading day of the year ended December 31, 2006.(2)
    
    A termination unrelated to a Change of Control is a termination
    that occurs before or 12 months after the Change of Control
    date.(3)
    
    A termination related to a Change of Control is a termination
    that occurs within 12 months from the Change of Control
    date.(4)
    
    Represents one year of salary and is subject to Mr. Schwarz
    signing a release and a one year non-compete.(5)
    
    Represents two years of salary and is subject to
    Mr. Schwarz signing a release and a two year non-compete.(6)
    
    Represents one year of bonus. Assumes payout equal to 100% base
    salary and is subject to Mr. Schwarz signing a release and
    a one year non-compete.(7)
    
    Represents two years of bonus. Assumes payout equal to 100% base
    salary for each year and is subject to Mr. Schwarz signing
    a release and a two year non-compete.(8)
    
    Represents the intrinsic value of 12 months accelerated
    vesting of 534,375 outstanding and unvested options as of
    December 31, 2006. Acceleration is subject to
    Mr. Schwarz signing a release and a one year non-compete.(9)
    
    Represents the intrinsic value of 100% accelerated vesting of
    534,375 outstanding and unvested options as of December 31,
    2006. Acceleration is subject to Mr. Schwarz signing a
    release and a two year non-compete.(10)
    
    Represents the intrinsic value of 12 months accelerated
    vesting of 228,884 unvested, outstanding RSUs awards as of
    December 31, 2006. Acceleration is subject to
    Mr. Schwarz signing a release and a one year non-compete.(11)
    
    Represents the intrinsic value of 100% accelerated vesting of
    228,884 unvested, outstanding RSUs awards as of
    December 31, 2006. Acceleration is subject to
    Mr. Schwarz signing a release and a two year non-compete. 132




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##### Table of Contents



(12)
    
    Represents 18 months continuation of health care benefits
    and is subject to Mr. Schwarz signing a release and a one
    year non-compete. If Mr. Schwarz elects COBRA continuance,
    we will reimburse him for coverage for himself and his eligible
    dependents until the earlier of (i) 18 months post
    termination or (ii) until he ceases to be eligible.(13)
    
    Represents 18 months continuation of health care benefits
    and is subject to Mr. Schwarz signing a release and a two
    year non-compete. If Mr. Schwarz elects COBRA continuance,
    we will reimburse for him for coverage for himself and his
    eligible dependents until the earlier of (i) 18 months
    post termination or (ii) until he ceases to be eligible.(14)
    
    Represents the life insurance proceeds payable under the policy
    maintained by us on Mr. Schwarzs behalf.(15)
    
    Represents the compensation deferred by Mr. Schwarz in 2006
    and the related earnings. This deferred amount would be paid in
    a lump sum three years following termination of
    Mr. Schwarzs employment.  Overview
    of Potential Post-Employment/Change in Control
    Benefits
      
    One year of base salary;
    One year of target bonus (assuming a payout equal to 100% of
    annual base salary); and
    12 months of accelerated vesting of then unvested and
    outstanding options, RSUs and any other equity compensation.    
    Two years of base salary;
    Two years of target bonus (assuming a payout equal to 100% of
    Mr. Schwarzs annual base salary);
    18 months of health benefits continuation for
    Mr. Schwarz and his eligible dependents; and
    100% accelerated vesting of Mr. Schwarzs then
    unvested and outstanding options, RSUs and any other equity
    compensation.    Definitions
  Cause
           133




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##### Table of Contents



Change
    in Control
    Rule 13d-3
      Good
    Reason
      and/or
      280(G)
  gross-up gross-up gross-up
  Bernard
    Liautaud  Chief Strategy Officer and Chairman of the
    Board of Directors
    134




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##### Table of Contents



Estimated Value of Change in Control and Severance
    Benefits(1)NEO Termination for

NEO Termination forGood Reason or

Good Reason orWithout Cause

Without CauseUnrelated to a

Related to a

Death orCompensation and Benefits

Position

Change of Control(2)

Change of Control(3)

DisabilityTotal Annual Base Salary

CSO  U.S.

$
257,500
(4)

$
257,500
(4)

$
128,750
(5)CSO  U.K.

$
360,500
(6)

$
360,500
(6)


N/AChairman

$
412,000
(7)

$
412,000
(7)


N/AAnnual Incentive

CSO  U.S.

$
257,500
(8)

$
257,500
(8)

$
128,750
(9)CSO  U.K.

$
360,500
(10)

$
360,500
(10)


N/AChairman

$
412,000
(11)

$
412,000
(11)


N/ANotice Period

CSO  U.S.


N/A



N/A



N/ACSO  U.K.

$
45,063
(12)

$
45,063
(12)


N/AChairman


N/A



N/A



N/AStock Options

CSO  U.S.

$
1,587,478
(13)

$
1,594,058
(14)


N/ACSO  U.K.


N/A



N/A



N/AChairman


N/A



N/A



N/ARestricted Stock Units

CSO  U.S.

$
981,382
(15)

$
981,382
(16)


N/ACSO  U.K.


N/A



N/A



N/AChairman


N/A



N/A



N/AHealth Care Benefits

CSO  U.S.

$
24,266
(17)

$
24,266
(17)


N/ACSO  U.K.

$
2,041
(18)


2,041



N/AChairman

$
2,566
(19)


2,566



N/A     (1)
    
    All amounts are stated in U.S. dollars. Payments in
    currencies other than U.S. dollars have been translated
    into U.S. dollars using the 2006 average exchange rate of
    the U.S. dollar against the British pound and the Euro, as
    applicable. All amounts are estimates based on an assumed
    triggering date of December 31, 2006 and the closing sales
    price of our ADSs on the Nasdaq Global Select Market on
    December 29, 2006, which was the last trading day of the
    year ended December 31, 2006.(2)
    
    A termination unrelated to a change of control is a termination
    that occurs before or 12 months after the change of control
    date.(3)
    
    A termination related to a change of control is a termination
    that occurs within 12 months from the change of control date(4)
    
    Represents two years of salary. If Mr. Liautaud does not
    abide by the non-compete, he will be required to reimburse
    Business Objects Americas the salary that Business Objects
    Americas paid for severance compensation, as well as any tax and
    social charges (both employer and employees) that we
    incurred in respect of this severance salary.(5)
    
    Represents one year of salary.(6)
    
    Represents two years of salary. If Mr. Liautaud does not
    abide by the non-compete he will be required to reimburse
    Business Objects (U.K.) Limited the salary that Business Objects
    (U.K.) Limited paid for severance compensation, as well as any
    tax and National Security Contributions (both employer and
    employees) that Business Objects (U.K.) Limited incurred
    in respect of this severance salary.(7)
    
    Represents two years of salary. If Mr. Liautaud does not
    abide by the non-compete he will be required to reimburse us the
    salary that we paid for severance compensation, as well as any
    tax and expenses (both employer and employees) that we
    incurred in respect of this severance salary.(8)
    
    Represents two years bonus assuming payout equal to 100% of
    annual base salary for each year on the date of termination. If
    Mr. Liautaud does not abide by the non-compete he will be
    required to reimburse Business Objects Americas the bonus that
    Business Objects Americas paid for severance compensation, as
    well as any tax and social charges (both employer and
    employees) that Business Objects Americas incurred in
    respect of this severance bonus.(9)
    
    Represents one year of bonus assuming payout equal to 100% of
    annual base salary on the date of termination 135




---



##### Table of Contents



(10)
    
    Represents two years of bonus assuming payout equal to 100% of
    annual base salary on the date of termination. If
    Mr. Liautaud does not abide by the non-compete he will be
    required to reimburse Business Objects (U.K.) Limited the bonus
    that Business Objects (U.K.) Limited paid for severance
    compensation, as well as any tax and National Security
    Contributions (both employer and employees) that Business
    Objects (U.K.) Limited incurred in respect of this severance
    bonus.(11)
    
    Represents two years of bonus assuming payout equal to 100% of
    annual base salary on the date of termination. If
    Mr. Liautaud does not abide by the non-compete he will be
    required to reimburse us the bonus that we paid for severance
    compensation, as well as any tax and expenses (both employer and
    employees) that we incurred in respect of this severance
    bonus.(12)
    
    The Employment Agreement with Business Objects (U.K.) Limited
    requires each of Business Objects (U.K.) Limited and
    Mr. Liautaud to provide the other with 90 days notice
    prior to termination. In lieu of this notice period, Business
    Objects (U.K.) Limited can elect to pay Mr. Liautaud
    $45,063, which is the equivalent of three months base salary.(13)
    
    Represents the intrinsic value of two years of acceleration from
    date of termination of 208,335 unvested and outstanding options
    as of December 31, 2006 that were granted prior to the date
    Mr. Liautaud became our Chief Strategy Officer and one year
    of acceleration from date of termination of 94,792 unvested and
    outstanding options as of December 31, 2006 that were
    granted to Mr. Liautaud on/after the date Mr. Liautaud
    became our Chief Strategy Officer. Assumes all performance
    conditions had been fully achieved.(14)
    
    Represents the intrinsic value of 100% acceleration of 303,127
    unvested and outstanding options as of December 31, 2006
    (assumes all performance targets met).(15)
    
    Represents the intrinsic value of one year of acceleration from
    date of termination of 25,000 unvested and outstanding
    restricted stock units as of December 31, 2006 granted
    on/after the date Mr. Liautaud became our Chief Strategy
    Officer assuming all performance conditions had been fully
    achieved.(16)
    
    Represents the intrinsic value of 100% acceleration of 25,000
    unvested and outstanding restricted stock units as of
    December 31, 2006 (assumes all performance targets met).(17)
    
    Represents 18 months of health care continuation costs. If
    Mr. Liautaud elects COBRA continuance: we will reimburse
    him for medical coverage he had as of termination until the
    earlier of (i) 18 months post termination or
    (ii) until he ceases to be eligible. If Mr. Liautaud
    does not abide by the non-compete he will be required to
    reimburse us for the health care benefits that we paid for
    severance compensation, as well as any tax and social charges
    (both employer and employees) that we incurred in respect
    of this severance payout.(18)
    
    Represents 18 months of health care continuation costs. If
    Mr. Liautaud does not abide by the non-compete he will be
    required to reimburse us for the health care benefits that we
    paid for severance compensation, as well as any tax and National
    Security Contributions (both employer and employees) that
    we incurred in respect of this severance payout.(19)
    
    Represents 18 months of health care continuation costs. If
    Mr. Liautaud does not abide by to the non-compete he will
    be required to reimburse us the health care benefits that we
    paid for severance compensation, as well as any tax and expenses
    (both employer and employees) that we incurred in respect
    of this severance payout.  Overview
    of Potential Post-Employment/Change in Control
    Benefits
  and/or
 136




---



##### Table of Contents



Employment
    with Business Objects Americas
    
    two years salary;
    the equivalent of two years of bonus (assuming a payout equal to
    100% of his annual base salary for each of the two years);
    18 months of health care post-termination;
    two years of accelerated vesting of options granted to
    Mr. Liautaud prior to his commencement as Chief Strategy
    Officer, assuming all performance conditions had been fully
    achieved; and
    one year of accelerated vesting of options and restricted stock
    units granted to Mr. Liautaud on or after his commencement
    as Chief Strategy Officer, assuming all performance conditions
    had been fully achieved.    
    two years of salary;
    the equivalent of two years of bonus (assuming a payout equal to
    100% of his annual base salary for each of the two years);
    18 months of health benefits continuation; and
    100% accelerated vesting of Mr. Liautauds then
    unvested and outstanding options and restricted stock units,
    assuming all performance conditions had been fully achieved.  and/or
  Employment
    with Business Objects (U.K.) Limited
    
    Two years of salary;
    Two years of bonus;
    18 months of health benefits continuation; and
    the equivalent of three months salary in lieu of 90 days
    notice by Business Objects (U.K.) Limited.  and/or
 137




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##### Table of Contents



Chairman
    of the Board of Directors of Business Objects
    
    Two years of salary;
    Two years of bonus; and
    18 months of health benefits continuation.  and/or
  Definitions
  Cause
    and/or
    and/or
  and/or
  Change
    in Control
    Rule 13d-3
      Good
    Reason(Business Objects Americas)
   138




---



##### Table of Contents



and/or
          Good
    Reason(Business Objects (U.K.) Limited)
      and/or
          Good
    Reason (Chairman of our Board of Directors)
       139




---



##### Table of Contents



Non-Compete
    James
    R. Tolonen  Chief Financial Officer, Senior
    Vice-President, Finance and Administration
  Estimated Value of Change in Control andSeverance Benefits(1)NEO Termination for

NEO Termination forGood Reason or

Good Reason orWithout Cause

Without CauseUnrelated to a

Related to a

Death orCompensation and Benefits

Change in Control(2)

Change in Control(3)

DisabilityBase Salary


N/A


$
525,000
(4)


N/AAnnual Incentive


N/A


$
262,500
(5)


N/AStock Options


N/A


$
112,958
(6)


N/ARestricted Stock Units


N/A



N/A



N/AHealth Care Benefits


N/A


$
16,019
(7)


N/A     (1)
    
    All amounts are stated in U.S. dollars. With respect to
    options and RSUs for ordinary shares, euros have been converted
    to U.S. dollars using the 2006 average exchange rate of the
    U.S. dollar against the euro. All amounts are estimated
    based on an assumed triggering date of December 31, 2006
    and the closing sales price of our ADSs on the Nasdaq Global
    Select Market on December 29, 2006, which was the last
    trading day of the year ended December 31, 2006.(2)
    
    A termination unrelated to a Change of Control is a termination
    that occurs before or 12 months after the Change of Control
    date.(3)
    
    A termination related to a Change of Control is a termination
    that occurs within 12 months from the Change of Control
    date.(4)
    
    Represents 150% of $350,000 base salary in effect as of
    December 31, 2006. Amounts will be paid as a lump sum
    payment less applicable taxes, subject to release and
    18 month non-compete and non-solicitation agreement. If
    Mr. Tolonen does not abide by the terms of his non-compete
    and/or
    non-solicitation arrangement 140




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##### Table of Contents



with us, these benefits would cease and he would be required to
    repay these severance benefits, as well as any tax and social
    charges (both employer and employees) that we incurred in
    respect of this severance payment.(5)
    
    Represents 150% of Mr. Tolonens target bonus of
    $175,000 as of December 31, 2006. Amounts will be paid as a
    lump sum payment less applicable taxes, subject to a release and
    an 18 month non-competition and non-solicitation agreement.
    If Mr. Tolonen does not abide by the terms of his
    non-compete
    and/or
    non-solicitation arrangement with us, these benefits would cease
    and he would be required to repay these severance benefits, as
    well as any tax and social charges (both employer and
    employees) that we incurred in respect of this severance
    payment.(6)
    
    Represents the intrinsic value of 100% acceleration of 5,730
    unvested shares outstanding as of December 31, 2006. If
    Mr. Tolonen does not abide by the non-competition
    and/or the
    non-solicitation agreement, he would be required to return any
    gains from the sale of these accelerated equity awards.(7)
    
    Represents 18 months continuation of health care benefits
    in effect as of December 31, 2006. If Mr. Tolonen does
    not abide by the non-competition
    and/or the
    non-solicitation agreement, these benefits would cease and he
    would be required to reimburse us for the cost of any group
    health insurance premiums we paid on his behalf as a severance
    benefit.  Susan
    J. Wolfe, Senior Vice President, General Counsel and
    Secretary
  Estimated Value of Change in Control andSeverance Benefits(1)NEO Termination for

NEO Termination forGood Reason or

Good Reason orWithout Cause

Without CauseUnrelated to a

Related to a

Death orCompensation and Benefits

Change in Control(2)

Change in Control(3)

DisabilityBase Salary


N/A


$
472,500
(4)


N/AAnnual Incentive


N/A


$
236,250
(5)


N/AStock Options


N/A


$
985,943
(6)


N/ARestricted Stock Units


N/A


$
161,928
(7)


N/A     (1)
    
    All amounts are stated in U.S. dollars. With respect to
    options and RSUs for ordinary shares, euros have been converted
    to U.S. dollars using the 2006 average exchange rate of the
    U.S. dollar against the euro. All amounts are estimates
    based on an assumed triggering date of December 31, 2006
    and the closing sales price of our ADSs on the Nasdaq Global
    Select Market on December 29, 2006, which was the last
    trading day of the year ended December 31, 2006.(2)
    
    A termination unrelated to a Change of Control is a termination
    that occurs before or 12 months after the Change of Control
    date.(3)
    
    A termination related to a Change of Control is a termination
    that occurs within 12 months from the Change of Control
    date.(4)
    
    Represents 150% of Ms. Wolfes base salary of $315,000
    in effect as of
    12/31/2006
    and is payable in a lump sum less applicable withholding taxes.
    If Ms. Wolfe does not abide by the non-competition and/or
    non-solicitation agreement, she would be required to repay to us
    the salary severance benefit we paid her, as well as any tax and
    social charges (both employer and employees) that we
    incurred in respect of this severance payment.(5)
    
    Represents 150% of Ms. Wolfes target bonus of
    $157,500 as of
    12/31/2006
    and is payable in a lump sum less applicable withholding taxes.
    If Ms. Wolfe does not abide by the non-competition and/or
    non-solicitation agreement, she would be required to repay to us
    the bonus severance we paid her, as well as any tax and social
    charges (both employer and employees) that we incurred in
    respect of this severance payment.(6)
    
    Represents the intrinsic value of 100% acceleration of 83,933
    unvested shares outstanding as of
    12/31/2006.
    If Ms. Wolfe does not abide by the non-competition and/or
    non-solicitation agreement, she would be required to return any
    gains from the sale of these accelerated equity awards. 141




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##### Table of Contents



(7)
    
    Represents 100% acceleration of 4,125 unvested RSUs outstanding
    as of
    12/31/2006.
    If Ms. Wolfe does not abide by the non-competition and/or
    non-solicitation agreement, she would be required to return any
    gains from the sale of these accelerated equity awards.  Overview
    of Potential Post-Employment/Change in Control Benefits Payable
    to Mr. Tolonen and Ms. Wolfe
      
    150% of his or her annual base salary;
    150% of his or her target bonus for the year in which the
    termination occurs;
    100% acceleration of all outstanding options and other equity
    rights; and
    18 months continuation of Company paid health, dental,
    vision and life insurance coverage at the same level of coverage
    as at the time of termination.    18-month 18-month and/or
  409A
    Provision
    280(G)
    Provision
    Definitions
  Cause
   142




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##### Table of Contents



Change
    of Control
    Rule 13d-3
        Good
    Reason (James R. Tolonen)
    Good
    Reason (Susan J. Wolfe)
   143




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##### Table of Contents



Non-Competition
    Non-Solicitation
        DIRECTOR
    COMPENSATION
    For the Year Ended December 31, 2006
    Change inPensionValue andFees







NonqualifiedEarned





Non-Equity

Deferredor Paid

Stock

Option

Incentive Plan

Compensation

All OtherName of the Director

in Cash ($)

Awards ($)

Awards ($)(4)(5)

Compensation ($)

Earnings

Compensation ($)

Total ($)Bernard Liautaud(1)


0



0



0



0



0



0



0Arnold Silverman


54,500



0



140,218



0



0



0



194,718Bernard Charlès


57,000



0



140,218



0



0



0



197,218Gerald Held


84,500



0



198,773



0



0



0



283,273Jean-François Heitz


77,000



0



172,353



0



0



0



239,353David Peterschmidt


67,000



0



62,033



0



0



0



139,033David Roux(2)


3,389



0



(90,709
)(6)


0



0



0



(87,320
)Kurt Lauk


68,500



0



140,218



0



0



0



208,718Carl Pascarella


57,000



0



198,773



0



0



0



255,773John Schwarz(1)(3)


0



0



0



0



0



0



0  144




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##### Table of Contents



(1)
    
    Bernard Liautaud and John Schwarz are not entitled to any
    compensation in their capacity, as directors of our Company.
    Compensation for Messrs. Liautaud and Schwarz is set forth
    above in the table captioned Summary Compensation
    Table.(2)
    
    David Roux resigned from his office as director on
    January 25, 2006.(3)
    
    John Schwarz was appointed as director on January 25, 2006.(4)
    
    Assumptions made in the valuation are discussed in note 8
    to the financial statements and in Managements
    Discussion & Analysis. Warrants were issued to the
    directors in ordinary shares and the exercise price is
    denominated in euros. The fair value is computed in euros as
    well. The stock-compensation expense, booked on a quarterly
    basis, is then converted into U.S. dollars based on the
    exchange rate used for our financial statements.(5)
    
    These Options Awards are warrants. Pursuant to French Law, we
    cannot grant stock options to non-employee directors.(6)
    
    This amount of 2005 stock-based compensation was reversed in
    2006 due to the cancellation of Mr. Rouxs warrants
    following his resignation as director.    Compensation
    Committee Interlocks and Insider Participation
    Compensation
    Committee Report
  Form 10-K.
  Compensation Committee of the Board of Directors
     145




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##### Table of Contents



Item 12.
    Security
    Ownership of Certain Beneficial Owners and Management and
    Related Stockholder Matters  Security
    Ownership of Certain Beneficial Owners and Management
  and/or 157-159
  Shares

PercentageBeneficially

Beneficially5% Shareholders, Directors and Executive Officers

Owned

Owned5% ShareholdersTudor Investment Corporation(1)


5,943,666



6.25
%1275 King StreetGreenwich, Connecticut 06831USAMorgan Stanley & Co
    International Ltd(2)


4,939,622



5.20
%25 Cabot Square, Canary WharfLondon, E14 4QAUnited KingdomDirectors and Nominees for
    DirectorArnold Silverman(3)


229,879



*Bernard Charlès(4)


85,003



*Gerald Held(5)


62,000



*Jean-François Heitz(6)


47,000



*David Peterschmidt(7)


47,000



*Kurt Lauk(8)


30,401



*Carl Pascarella(9)


16,001



*Executive OfficersJohn Schwarz(10)


377,734



*Bernard Liautaud(11)


1,980,234



2.08
%James Tolonen(12)


72,600



*Susan Wolfe(13)


108,889



*All directors and executive
    officers as a group (11 persons)(14)


3,056,741



3.22
%     *
    
    Less than 1%.(1)
    
    Based on Tudor Investment Corporations notification letter
    dated January 31, 2007.(2)
    
    Based on an AMF filing by Morgan Stanley & Co
    International Ltd. on January 11, 2007.(3)
    
    Includes 30,000 shares issuable upon the exercise of share
    warrants exercisable as of January 31, 2007 or within
    60 days of such date and 199,876 shares owned
    indirectly through the Silverman Family Trust.(4)
    
    Includes 30,000 shares issuable upon the exercise of share
    warrants exercisable as of January 31, 2007 or within
    60 days of such date. 146




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##### Table of Contents



(5)
    
    Includes 60,000 shares issuable upon the exercise of share
    warrants exercisable as of January 31, 2007 or within
    60 days of such date.(6)
    
    Includes 45,000 shares issuable upon the exercise of share
    warrants exercisable as of January 31, 2007 or within
    60 days of such date.(7)
    
    Includes 45,000 shares issuable upon the exercise of share
    warrants exercisable as of January 31, 2007 or within
    60 days of such date.(8)
    
    Includes 30,000 shares issuable upon the exercise of share
    warrants exercisable as of January 31, 2007 or within
    60 days of such date.(9)
    
    Includes 15,000 shares issuable upon the exercise of share
    warrants exercisable as of January 31, 2007 or within
    60 days of such date.(10)
    
    Mr. Schwarz is also member of our Board of Directors.
    Includes 243,750 shares issuable upon the exercise of stock
    options exercisable as of January 31, 2007 or within
    60 days of such date and 40,153 shares issuable upon
    vesting of restricted stock units as of January 31, 2007 or
    within 60 days of such date.(11)
    
    Mr. Liautaud is also Chairman of our Board of Directors.
    Includes 1,463,122 shares issuable upon the exercise of
    stock options exercisable as of January 31, 2007 or within
    60 days of such date, 12,500 shares issuable upon
    vesting of restricted stock units as of January 31, 2007 or
    within 60 days of such date and 180,550 shares owned
    indirectly through his wife.(12)
    
    Includes 64,600 shares issuable upon the exercise of stock
    options exercisable as of January 31, 2007 or within
    60 days of such date.(13)
    
    Includes 108,541 shares issuable upon the exercise of stock
    options exercisable as of January 31, 2007 or within
    60 days of such date.(14)
    
    See notes 3 through 13.  Sub-Plan
  Equity
    Compensation Plan Information
  sub-plan
  Number of Securitiesto be Issued upon

Weighted-Average

Weighted-Average

Number of SecuritiesExercise of

Exercise Price of

Exercise Price of

Remaining Available forOutstanding Options,

Outstanding Options,

Outstanding Options,

Future Issuance underPlan Category

and Warrants

and Warrants

and Warrants(1)

Equity Compensation PlansEquity compensation plans approved
    by security holders


11,331,359



26.81


$
35.40



33,700
(2)(3)(4)Equity compensation plans not
    approved by security holders














Total


11,331,359



26.81


$
35.40



33,700  147




---



##### Table of Contents



(1)
    
    Options and Warrants will be issued in ordinary shares and the
    exercise price is denominated in euros. The amounts set forth
    herein reflect translation of the amounts to U.S. dollars
    based on the applicable exchange rates of the U.S. dollar
    and euro as of December 31, 2006(2)
    
    Represents 33,700 shares available for issuance under the
    French ESPP.(3)
    
    Since 2006, the number of equity awards available for grant each
    year is determined based on a general limit of 3% of our share
    capital as of December 31 of the previous calendar year, or
    the 3% General Limit. The shares available for equity awards
    grant in 2006 was 2,859,112 which expired at the end of the day
    of December 31, 2006. The shares available for equity
    awards grant in 2007 are 2,922,750 and are effective on
    January 1, 2007.(4)
    
    No further stock options can be granted under the 1993 Plan,
    which expired in 1998, the 1994 Plan, which expired in 1999, or
    under the 1999 Plan, which expired in May 2004.  Employment
    Contracts, Change of Control Arrangements and Separation
    Agreements
  Form 10-K
  Item 13.
    Certain
    Relationships and Related Transactions  Transactions
    with related persons
  Regulated
    Agreements
    conventions règlementées article L.233-3 articles L.225-38 article L225-42-1
  Agreements
    in the Ordinary Course of the Business
  and/or
  
    Business Objects Americas  Openware
    (Mr. Peterschmidt and Mr. Held); Non-disclosure
    agreement and consulting agreement  $30,000 of
    consulting fees.
    Business Objects Americas  Integris, Inc., a
    subsidiary of Bull S.A.  (Mr. Heitz) VAR
    agreement  $73,226.
    Business Object Software Ltd.  My SQL
    (Mr. Liautaud)  OEM Agreement 
    $300,000 of fees.
    Business Objects Americas  Address Vision, Inc., a
    subsidiary of Bull S.A.  (Mr. Heitz) sale
    of assets following the Firstlogic acquisition for a cash amount
    of $3.75 million. 148




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##### Table of Contents



and/or and/or and/or and/or
  Review,
    approval or ratification of transactions with related
    persons
    Director
    Independence
  Form 10-K,
  Item 14.
    Principal
    Accountant Fees and Services        Fees Paid
    to Auditors for Service Rendered
  Audit
    Fees
  Form 10-Q Form 10-K
  Audit-Related
    Fees
    Tax
    Fees
   149




---



##### Table of Contents



All
    Other Fees
    Pre-Approval
    Policies and Procedures
     PART IV  Item 15.
    Exhibits,
    Financial Statement Schedules  Consolidated Financial Statements
  Form 10-K Form 10-K
  PageReports of Independent Registered
    Public Accounting Firm


58Consolidated Balance Sheets as of
    December 31, 2006 and 2005


62Consolidated Statements of Income
    for the Years Ended December 31, 2006, 2005 and 2004


63Consolidated Statements of
    Shareholders Equity for the Years Ended December 31,
    2006, 2005 and 2004


64Consolidated Statements of Cash
    Flow for the Years Ended December 31, 2006, 2005 and 2004


66Notes to Consolidated Financial
    Statements


67   Financial Statement Schedules
  Schedule II:
    Valuation and Qualifying Accounts (in thousands)
  Year Ended December 31,2006


2005


2004Allowance for doubtful accounts
    and distribution reserves:Balance at beginning of year

$
12,211


$
12,535


$
9,847Acquired through acquisition


543



207



0Charged to costs and expenses


2,005



3,691



5,352Deductions and write-offs


(2,902
)


(3,728
)


(3,051
)Translation adjustments


391



(494
)


387Balance at end of year

$
12,248


$
12,211


$
12,535   150




---



##### Table of Contents



Year Ended December 31,2006


2005


2004Deferred Tax Asset, Valuation
    AllowanceBalance at beginning of year

$
13,342


$
48,827


$
49,265Additions charged to valuation
    allowance


989



6,483



17,576Reductions from valuation allowance


(804
)


(41,968
)


(18,014
)Balance at end of year

$
13,527


$
13,342


$
48,827     Exhibits.
  Form 10-K.
  Exhibit No.

Description10
.35.4

Amendment Letter, signed
    February 28, 2007, between Société
    Générale and Business Objects.10
.81+

Employment Agreement of
    Susan J. Wolfe, dated February 28, 2007.21
.1

List of Subsidiaries of the
    Company.23
.1

Consent of Independent Registered
    Public Accounting Firm.24
.1

Power of Attorney is herein
    referenced to the signature page of this Annual Report on
    Form 10-K.31
.1

Certification of 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

Certification of Chief Executive
    Officer and of Chief Financial Officer furnished pursuant to
    Rule 13a-14(b)
    of the Exchange Act and Section 1350 of Chapter 63 of
    Title 18 of the United States Code (18 U.S.C. 1350).   Exhibits Incorporated by Reference
  Exhibit No.

Description3
.1*

Amended and Restated Bylaws of
    Business Objects, as amended February 22, 2007 (English
    translation), is incorporated herein by reference to
    Exhibit 3.1 filed with our Current Report on
    Form 8-K
    filed with the SEC on February 28, 2007 (File
    No. 000-24720).4
.1*

Form of Deposit Agreement, as
    amended and restated on October 15, 2003, by and among
    Business Objects and The Bank of New York, as Depositary and
    holder from time to time of ADSs issued thereunder and
    Exhibit A to the Deposit Agreement, is incorporated herein
    by reference to Exhibit 1 filed with our Registration
    Statement on
    Form F-6
    filed with the SEC on October 15, 2003 (File
    No. 333-109712).4
.2*

Amended and Restated Stockholders
    Agreement, dated as of October 15, 2003, by and among
    Business Objects, New SAC, CB Cayman and certain shareholders of
    New SAC, is incorporated herein by reference to Exhibit 2.1
    filed with our Current Report on
    Form 8-K
    filed with the SEC on October 17, 2003 (File
    No. 000-24720).4
.3*

Employee Benefit
    Sub-Plan
    Trust Agreement is incorporated herein by reference to
    Exhibit 4.3 filed with our Registration Statement on
    Form S-3
    filed with the SEC on June 23, 2005 (File
    No. 333-126082).10
.3*+

1991 Stock Option Plan is
    incorporated herein by reference to Exhibit 10.2 filed with
    our Registration Statement on
    Form F-1
    filed with the SEC on September 20, 1994 (File
    No. 33-83052).10
.4*+

1993 Stock Option Plan is
    incorporated herein by reference to Exhibit 10.3 filed with
    our Registration Statement on
    Form F-1
    filed with the SEC on September 20, 1994 (File
    No. 33-83052).10
.5*+

1994 Stock Option Plan is
    incorporated herein by reference to Exhibit 4.2 filed with
    our Registration Statement on
    Form F-1
    filed with the SEC on September 20, 1994 (File
    No. 33-83052). 151




---



##### Table of Contents



Exhibit No.

Description10
.6*

Summary, in English, of 1992 Grant
    by the French Ministry of the Economy, Finance and the Budget is
    incorporated herein by reference to Exhibit 10.4 filed with
    our Registration Statement on
    Form F-1
    filed with the SEC on September 20, 1994 (File
    No. 33-83052).10
.21*

Commercial Lease by and between
    SCI De LIlot 4.3 and SCI Du Pont De Levallois and Business
    Objects, dated December 22, 1999 (English translation), is
    incorporated herein by reference to Exhibit 10.24 filed
    with our Annual Report on
    Form 10-K
    filed with the SEC on March 30, 2000 (File
    No. 000-24720).10
.21.1*

Amendment to Commercial Lease by
    and between SCI De Lllot 4.3 and SCI Du Pont de Levallois
    and Business Objects, date March 29, 2005 (English
    Translation), is incorporated herein by reference to
    Exhibit 10.21.1 filed with our Quarterly Report on
    Form 10-Q
    filed with the SEC on May 9, 2005 (File
    No. 000-24720).10
.22*

Lease agreement by and between 475
    Java Drive Associates, L.P. and Business Objects Americas, dated
    August 3, 2000, is incorporated herein by reference to
    Exhibit 10 filed with our Quarterly Report on
    Form 10-Q
    filed with the SEC on August 9, 2000 (File
    No. 000-24720).10
.22.1*

Amendment to Lease Agreement dated
    February 1, 2006 by and between 475 Java Drive Associates,
    L.P. and Business Objects Americas, effective as of
    March 28, 2006, is incorporated by reference to
    Exhibit 10.22.1 filed with our Current Report on
    Form 8-K
    filed with the SEC on March 31, 2006 (File
    No. 000-24720).10
.23*+

1999 Stock Option Plan, as
    amended, is incorporated herein by reference to
    Exhibit(d)(1) filed with our
    Schedule TO-I
    filed with the SEC on October 11, 2002 (File
    No. 005-47622).10
.24*+

French Employee Savings Plan, as
    amended June 7, 2006, is incorporated herein by reference
    to Exhibit 10.24 filed with our Registration Statement on
    Form S-8
    filed with the SEC on August 8, 2006 (File
    No. 333-136418).10
.24.1*+

1995 International Employee Stock
    Purchase Plan, as amended, is incorporated herein by reference
    to Exhibit 10.24.2 filed with our Current Report on
    Form 8-K
    filed with the SEC on October 26, 2004 (File
    No. 000-24720).10
.25*+

2001 Stock Incentive Plan, as
    amended July 20, 2006 (English Translation), is
    incorporated by reference to Exhibit 10.25 filed with our
    Current Report on
    Form 8-K
    filed with the SEC on July 26, 2006 (File
    No. 000-24720).10
.25.1*+

2001 Stock Incentive
    Plan  Subsidiary Stock Incentive
    Sub-Plan, as
    amended June 7, 2006 (English Translation), is incorporated
    herein by reference to Exhibit 10.25.3 filed with our
    Current Report on
    Form 8-K
    filed with the SEC on June 13, 2006 (File
    No. 000-24720).10
.26

Reserved.10
.27

Reserved.10
.28

Reserved.10
.29

Reserved.10
.30*+

Agreement with each of the
    Business Objects directors and senior management pursuant
    to which Business Objects agreed to contract for and maintain
    liability insurance against liabilities which may be incurred by
    such persons in their respective capacities is incorporated
    herein by reference to Exhibit 10.5 filed with our
    Registration Statement on
    Form F-1
    filed with the SEC on September 20, 1994 (File
    No. 333-83052).10
.31*

Lease agreement by and between
    Commercial Union Life Assurance Company Limited, Business
    Objects UK Limited and Business Objects, dated April 3,
    2001, is incorporated herein by reference to
    Exhibit 993(ii) filed with our Quarterly Report on
    Form 10-Q
    filed with the SEC on November 14, 2001 (File
    No. 000-24720).10
.32*+

Stock subscription warrant for
    Gerald Held, dated September 16, 2003, is incorporated
    herein by reference to Exhibit 4.2 filed with our
    Registration Statement on
    Form S-8
    filed with the SEC on September 30, 2003 (File
    No. 333-109278).10
.33*+

Stock subscription warrant for
    Jean-François Heitz, dated September 16, 2003, is
    incorporated herein by reference to Exhibit 4.3 filed with
    our Registration Statement on
    Form S-8
    filed with the SEC on September 30, 2003 (File
    No. 333-109278). 152




---



##### Table of Contents



Exhibit No.

Description10
.34*+

Stock subscription warrant for
    David Peterschmidt, dated September 16, 2003, is
    incorporated herein by reference to Exhibit 4.4 filed with
    our Registration Statement on
    Form S-8
    filed with the SEC on September 30, 2003 (File
    No. 333-109278).10
.35.3*

Agreement between
    Société Générale and Business Objects,
    effective March 1, 2006, is incorporated herein by
    reference to Exhibit 10.35.3 filed with our Current Report
    on
    Form 8-K
    filed with the SEC on March 7, 2006 (File
    No. 000-24720).10
.36*+

Crystal Decisions, Inc. 1999 Stock
    Option Plan, as amended August 13, 2003, is incorporated
    herein by reference to Exhibit 4.2 filed with our
    Registration Statement on
    Form S-8
    filed with the SEC on December 11, 2003 (File
    No. 333-111090).10
.36.1*+

Crystal Decisions 1999 Stock
    Option Plan  Canadian Stock Option Agreement is
    incorporated herein by reference to Exhibit 10.1.1 filed
    with the Crystal Decisions Registration Statement on
    Form 10 filed with the SEC on October 27, 2000 (File
    No. 000-31859).10
.36.2*+

Crystal Decisions 1999 Stock
    Option Plan, as amended August 13, 2001 (French Employees
    Only), is incorporated herein by reference to
    Exhibit 10.1.4 filed with the Crystal Decisions Annual
    Report on
    Form 10-K
    filed with the SEC on September 26, 2002.10
.37*

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, is incorporated by reference to
    Exhibit 10.16 filed with Seagate Technology International
    LLCs Registration Statement on
    Form S-4
    filed with the SEC on April 20, 2001 (File
    No. 333-59328).10
.38*

Management Shareholders Agreement,
    dated as of November 22, 2000, by and among New SAC and the
    Management Shareholders listed therein is incorporated by
    reference to Exhibit 10.17 filed with the Seagate
    Technology International LLC Registration Statement on
    Form S-4
    filed with the SEC on April 20, 2001 (File
    No. 333-59328).10
.40*

Lease Agreement, dated
    September 27, 1999, between Laurelton Investments Ltd.,
    Seagate Software Information Management Group (Canada) Ltd. And
    Seagate Software, Inc. incorporated herein by reference to
    Exhibit 10.10 filed with the Crystal Decisions Registration
    Statement on Form 10 filed with the SEC on October 27,
    2000 (File
    No. 000-31859).10
.0.1*

Amendment to Lease agreement,
    dated June 22, 2000, between Laurelton Investments Ltd.,
    Seagate Software Information Management Group (Canada) Ltd. And
    Seagate Software, Inc. is incorporated herein by reference to
    Exhibit 10.10.1 filed with the Crystal Decisions Annual
    Report on
    Form 10-K
    filed with the SEC on September 27, 2001.10
.40.2*

Amended and Restated Lease
    Agreement, dated February 28, 2002, between Laurelton
    Investments Ltd., Crystal Decision, Corp. and Crystal Decisions,
    Inc. is incorporated herein by reference to Exhibit 10.10.2
    filed with the Crystal Decisions Annual Report on
    Form 10-K
    filed with the SEC on September 26, 2002.10
.44*+

Employment Agreement, dated as of
    September 25, 2002, by and between Crystal Decisions Inc.
    and Jonathan Judge is incorporated herein by reference to
    Exhibit 10.17 filed with the Crystal Decisions Quarterly
    Report on
    Form 10-Q
    filed with the SEC on November 12, 2002 (File
    No. 000-31859).10
.51.1*

First Amendment to Pledge and
    Security Agreement, dated July 28, 2004, between Business
    Objects Americas and Comerica Bank is incorporated by reference
    to Exhibit 10.51.1 filed with our Quarterly Report on
    Form 10-Q
    filed with the SEC on August 9, 2004 (File
    No. 000-24720).10
.52*+

2004 International Employee Stock
    Purchase Plan, as amended on October 19, 2006, is
    incorporated herein by reference to Exhibit 10.53 filed
    with our Current Report on
    Form 8-K
    filed with the SEC on October 25, 2006 (File
    No. 000-24720).10
.53*+

Stock Subscription Warrant for
    David J. Roux is incorporated herein by reference to
    Exhibit 4.2 filed with our Registration Statement on
    Form S-8
    filed with the SEC on May 13, 2004 (File
    No. 333-115478). 153




---



##### Table of Contents



Exhibit No.

Description10
.54*+

Stock Subscription Warrant for
    Arnold Silverman is incorporated herein by reference to
    Exhibit 4.2 filed with our Registration Statement on
    Form S-8
    filed with the SEC on June 25, 2004 (File
    No. 333-116869).10
.55*+

Stock Subscription Warrant for
    Albert Eisenstat is incorporated herein by reference to
    Exhibit 4.3 filed with our Registration Statement on
    Form S-8
    filed with the SEC on June 25, 2004 (File
    No. 333-116869).10
.56*+

Stock Subscription Warrant for
    Bernard Charlès is incorporated herein by reference to
    Exhibit 4.4 filed with our Registration Statement on
    Form S-8
    filed with the SEC on June 25, 2004 (File
    No. 333-116869).10
.57*+

Stock Subscription Warrant for
    Kurt Lauk is incorporated herein by reference to
    Exhibit 4.5 filed with our Registration Statement on
    Form S-8
    filed with the SEC on June 25, 2004 (File
    No. 333-116869).10
.58*+

Stock Subscription Warrant for
    Gerald Held is incorporated herein by reference to
    Exhibit 4.6 filed with our Registration Statement on
    Form S-8
    filed with the SEC on June 25, 2004 (File
    No. 333-116869).10
.59*+

Stock Subscription Warrant for
    Jean-François Heitz is incorporated herein by reference to
    Exhibit 4.7 filed with our Registration Statement on
    Form S-8
    filed with the SEC on June 25, 2004 (File
    No. 333-116869).10
.60*+

Stock Subscription Warrant for
    David Peterschmidt is incorporated herein by reference to
    Exhibit 4.8 filed with our Registration Statement on
    Form S-8
    filed with the SEC on June 25, 2004 (File
    No. 333-116869).10
.62*+

2005 Executive Compensation Plan
    Stock Subscription Warrant Agreement for Gerald Held is
    incorporated herein by reference to Exhibit 10.62 filed
    with our Annual Report on
    Form 10-K
    filed with the SEC on March 16, 2005 (File
    No. 000-24720).10
.63*+

Stock Subscription Warrant
    Agreement for Carl S. Pascarella is incorporated herein by
    reference to Exhibit 10.52 filed with our Annual Report on
    Form 10-K
    filed with the SEC on March 16, 2005 (File
    No. 000-24720).10
.64*+

Stock Subscription Warrant
    Agreement for Gerald Held is incorporated herein by reference to
    Exhibit 10.52 filed with our Quarterly Report on
    Form 10-Q
    filed with the SEC on August 9, 2005 (File
    No. 000-24720).10
.65*+

SRC Software, Inc. 2003 Stock
    Incentive Plan is incorporated herein by reference to
    Exhibit 4.1 filed with our Registration Statement on
    Form S-8
    filed with the SEC on October 24, 2005 (File
    No. 333-129200).10
.66*+

Form of Restricted Stock Purchase
    Agreement, as amended September 27, 2006, is incorporated
    herein by reference to Exhibit 10.66 filed with our
    Quarterly Report on
    Form 10-Q
    filed with the SEC on November 9, 2006 (File
    No. 000-24720).10
.67*+

Infommersion, Inc. 2002 Stock
    Incentive Plan, as amended on December 3, 2004, is
    incorporated herein by reference to Exhibit 10.67 filed
    with our Registration Statement on
    Form S-8
    filed with the SEC on November 3, 2005 (File
    No. 333-129433).10
.68*+$

Employment Agreement of John G.
    Schwarz, dated September 9, 2005, is incorporated herein by
    reference to Exhibit 10.65 filed with our Quarterly Report
    on
    Form 10-Q
    filed with the SEC on November 9, 2005 (File
    No. 000-24720).10
.69*+

Business Objects Americas Deferred
    Compensation Plan, as amended, is incorporated herein by
    reference to Exhibit 4.1 filed with our Registration
    Statement on
    Form S-8
    filed with the SEC on May 8, 2005 (File
    No. 333-124726).10
.70*+

Contract of Employment between
    Business Objects (U.K.)  Ltd. and Bernard Liautaud, dated
    March 7, 2006, is incorporated by reference to
    Exhibit 10.70 filed with our Current Report on
    Form 8-K
    filed with the SEC on May 10, 2006 (File
    No. 000-24720).10
.71*+

Employment Agreement between
    Business Objects Americas and Bernard Liautaud, dated
    March 13, 2006, is incorporated by reference to
    Exhibit 10.70 filed with our Current Report on
    Form 8-K
    filed with the SEC on May 10, 2006 (File
    No. 000-24720). 154




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##### Table of Contents



Exhibit No.

Description10
.72*+

Stock Subscription Warrant
    Agreement for Jean-François Heitz is incorporated by
    reference to Exhibit 10.72 filed with our Registration
    Statement on
    Form S-8
    filed with the SEC on August 8, 2006 (File
    No. 333-136418).10
.73*

Lease, dated December 23,
    2004 among 855 Homer Street Inc., Business Objects Corp. and
    Business Objects Americas is incorporated herein by reference to
    Exhibit 10.76 filed with our Quarterly Report on
    Form 10-Q
    filed with the SEC on November 9, 2005 (File
    No. 000-24720).10
.73.1*

Lease Modification Agreement,
    dated September 15, 2005, among 855 Homer Street Inc.,
    Business Objects Corp. and Business Objects Americas is
    incorporated herein by reference to Exhibit 10.76 filed
    with our Quarterly Report on
    Form 10-Q
    filed with the SEC on November 9, 2005 (File
    No. 000-24720).10
.73.2*

Second Lease Modification
    Agreement, dated April 1, 2006, among 855 Homer Street
    Inc., Business Objects Corp. and Business Objects Americas is
    incorporated herein by reference to Exhibit 10.76 filed
    with our Quarterly Report on
    Form 10-Q
    filed with the SEC on November 9, 2005 (File
    No. 000-24720).10
.74*+

2006 Stock Plan, adopted on
    October 19, 2006, is incorporated herein by reference to
    Exhibit 10.74 filed with our Current Report on
    Form 8-K
    filed with the SEC on October 25, 2006 (File
    No. 000-24720).10
.76*+

Business Objects Form of Change of
    Control Agreement for U.S. Executives is incorporated herein by
    reference to Exhibit 10.76 filed with our Quarterly Report
    on
    Form 10-Q
    filed with the SEC on November 9, 2005 (File
    No. 000-24720).10
.77*+

Business Objects Form of Change of
    Control Agreement for Canadian Executives is incorporated herein
    by reference to Exhibit 10.77 filed with our Quarterly
    Report on
    Form 10-Q
    filed with the SEC on November 9, 2005 (File
    No. 000-24720).10
.78*+

Business Objects Form of Change of
    Control Agreement for French Executives is incorporated herein
    by reference to Exhibit 10.78 filed with our Quarterly
    Report on
    Form 10-Q
    filed with the SEC on November 9, 2005 (File
    No. 000-24720).10
.79*+

Change of Control Agreement
    between Business Objects and Susan J. Wolfe is incorporated
    herein by reference to Exhibit 10.79 filed with our
    Quarterly Report on
    Form 10-Q
    filed with the SEC on November 9, 2005 (File
    No. 000-24720).10
.80*+

Change of Control Agreement
    between Business Objects and James R. Tolonen is incorporated
    herein by reference to Exhibit 10.80 filed with our
    Quarterly Report on
    Form 10-Q
    filed with the SEC on November 9, 2005 (File
    No. 000-24720).14
.1*

Business Objects Code of Business
    Conduct and Ethics, as revised on October 19, 2006, is
    incorporated herein by reference to Exhibit 14.1 filed with
    our Current Report on
    Form 8-K
    filed with the SEC on October 25, 2006 (File
    No. 000-24720).     *
    
    Previously filed.+
    
    Management contracts or compensatory plans.$
    
    Confidential treatment has been requested with respect to
    certain portions of this exhibit. Omitted portions have been
    filed separately with the Securities and Exchange Commission. 155




---



##### Table of Contents



SIGNATURES
      By:
    /s/  John
    G. Schwarz     POWER OF
    ATTORNEY
  KNOW ALL PERSONS BY THESE PRESENTS attorney-in-fact, Form 10-K attorneys-in-fact,
    Signature

Title

Date/s/  JOHN
    G. SCHWARZJohn
    G. Schwarz

Chief Executive Officer
    (Principal Executive Officer)

March 1, 2007/s/  JAMES
    R. TOLONENJames
    R. Tolonen

Chief Financial Officer
    (Principal Financial and Accounting Officer)

March 1, 2007/s/  BERNARD
    LIAUTAUDBernard
    Liautaud

Chairman of the Board

March 1, 2007/s/  BERNARD
    CHARLÈSBernard
    Charlès

Director

March 1, 2007/s/  JEAN-FRANÇOIS
    HEITZJean-François
    Heitz

Director

March 1, 2007/s/  GERALD
    HELDGerald
    Held

Director

March 1, 2007/s/  KURT
    LAUKKurt
    Lauk

Director

March 1, 2007 156




---



##### Table of Contents



Signature

Title

Date/s/  CARL
    F. PASCARELLACarl
    F. Pascarella

Director

March 1, 2007/s/  DAVID
    PETERSCHMIDTDavid
    Peterschmidt

Director

March 1, 2007/s/  ARNOLD
    N. SILVERMANArnold
    N. Silverman

Director

March 1, 2007  157




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##### Table of Contents



EXHIBIT INDEX
  Exhibit No.

Description3
.1*

Amended and Restated Bylaws of
    Business Objects, as amended February 22, 2007 (English
    translation), is incorporated herein by reference to
    Exhibit 3.1 filed with our Current Report on
    Form 8-K
    filed with the SEC on February 28, 2007 (File
    No. 000-24720).4
.1*

Form of Deposit Agreement, as
    amended and restated on October 15, 2003, by and among
    Business Objects and The Bank of New York, as Depositary and
    holder from time to time of ADSs issued thereunder and
    Exhibit A to the Deposit Agreement, is incorporated herein
    by reference to Exhibit 1 filed with our Registration
    Statement on
    Form F-6
    filed with the SEC on October 15, 2003 (File
    No. 333-109712).4
.2*

Amended and Restated Stockholders
    Agreement, dated as of October 15, 2003, by and among
    Business Objects, New SAC, CB Cayman and certain shareholders of
    New SAC, is incorporated herein by reference to Exhibit 2.1
    filed with our Current Report on
    Form 8-K
    filed with the SEC on October 17, 2003 (File
    No. 000-24720).4
.3*

Employee Benefit Sub-Plan Trust
    Agreement is incorporated herein by reference to
    Exhibit 4.3 filed with our Registration Statement on
    Form S-3
    filed with the SEC on June 23, 2005 (File
    No. 333-126082).10
.3*+

1991 Stock Option Plan is
    incorporated herein by reference to Exhibit 10.2 filed with
    our Registration Statement on
    Form F-1
    filed with the SEC on September 20, 1994 (File
    No. 33-83052).10
.4*+

1993 Stock Option Plan is
    incorporated herein by reference to Exhibit 10.3 filed with our
    Registration Statement on
    Form F-1
    filed with the SEC on September 20, 1994 (File
    No. 33-83052).10
.5*+

1994 Stock Option Plan is
    incorporated herein by reference to Exhibit 4.2 filed with
    our Registration Statement on
    Form F-1
    filed with the SEC on September 20, 1994 (File
    No. 33-83052).10
.6*

Summary, in English, of 1992 Grant
    by the French Ministry of the Economy, Finance and the Budget is
    incorporated herein by reference to Exhibit 10.4 filed with
    our Registration Statement on
    Form F-1
    filed with the SEC on September 20, 1994 (File
    No. 33-83052).10
.21*

Commercial Lease by and between
    SCI De LIlot 4.3 and SCI Du Pont De Levallois and Business
    Objects, dated December 22, 1999 (English translation), is
    incorporated herein by reference to Exhibit 10.24 filed
    with our Annual Report on
    Form 10-K
    filed with the SEC on March 30, 2000 (File
    No. 000-24720).10
.21.1*

Amendment to Commercial Lease by
    and between SCI De Lllot 4.3 and SCI Du Pont de Levallois
    and Business Objects, date March 29, 2005 (English
    Translation), is incorporated herein by reference to
    Exhibit 10.21.1 filed with our Quarterly Report on
    Form 10-Q
    filed with the SEC on May 9, 2005 (File
    No. 000-24720).10
.22*

Lease agreement by and between
    475 Java Drive Associates, L.P. and Business Objects
    Americas, dated August 3, 2000, is incorporated herein by
    reference to Exhibit 10 filed with our Quarterly Report on
    Form 10-Q
    filed with the SEC on August 9, 2000 (File
    No. 000-24720).10
.22.1*

Amendment to Lease Agreement dated
    February 1, 2006 by and between 475 Java Drive
    Associates, L.P. and Business Objects Americas, effective as of
    March 28, 2006,  is incorporated by reference to
    Exhibit 10.22.1 filed with our Current Report on
    Form 8-K
    filed with the SEC on March 31, 2006 (File
    No. 000-24720).10
.23*+

1999 Stock Option Plan, as
    amended, is incorporated herein by reference to
    Exhibit (d)(1) filed with our
    Schedule TO-I
    filed with the SEC on October 11, 2002 (File
    No. 005-47622).10
.24*+

French Employee Savings Plan, as
    amended June 7, 2006, is incorporated herein by reference
    to Exhibit 10.24 filed with our Registration Statement on
    Form S-8
    filed with the SEC on August 8, 2006 (File
    No. 333-136418).10
.24.1*+

1995 International Employee Stock
    Purchase Plan, as amended, is incorporated herein by reference
    to Exhibit 10.24.2 filed with our Current Report on
    Form 8-K
    filed with the SEC on October 26, 2004 (File
    No. 000-24720).10
.25*+

2001 Stock Incentive Plan, as
    amended July 20, 2006 (English Translation), is
    incorporated by reference to Exhibit 10.25 filed with our
    Current Report on
    Form 8-K
    filed with the SEC on July 26, 2006 (File
    No. 000-24720). 158




---



##### Table of Contents



Exhibit No.

Description10
.25.1*+

2001 Stock Incentive
    Plan  Subsidiary Stock Incentive Sub-Plan, as amended
    June 7, 2006 (English Translation), is incorporated herein
    by reference to Exhibit 10.25.3 filed with our Current
    Report on
    Form 8-K
    filed with the SEC on June 13, 2006 (File
    No. 000-24720).10
.26

Reserved.10
.27

Reserved.10
.28

Reserved.10
.29

Reserved.10
.30*+

Agreement with each of the
    Business Objects directors and senior management pursuant
    to which Business Objects agreed to contract for and maintain
    liability insurance against liabilities which may be incurred by
    such persons in their respective capacities is incorporated
    herein by reference to Exhibit 10.5 filed with our
    Registration Statement on
    Form F-1
    filed with the SEC on September 20, 1994 (File
    No. 333-83052).10
.31*

Lease agreement by and between
    Commercial Union Life Assurance Company Limited, Business
    Objects UK Limited and Business Objects, dated April 3,
    2001, is incorporated herein by reference to
    Exhibit 993(ii) filed with our Quarterly Report on
    Form 10-Q
    filed with the SEC on November 14, 2001 (File
    No. 000-24720).10
.32*+

Stock subscription warrant for
    Gerald Held, dated September 16, 2003, is incorporated
    herein by reference to Exhibit 4.2 filed with our Registration
    Statement on
    Form S-8
    filed with the SEC on September 30, 2003 (File
    No. 333-109278).10
.33*+

Stock subscription warrant for
    Jean-François Heitz, dated September 16, 2003, is
    incorporated herein by reference to Exhibit 4.3 filed with
    our Registration Statement on
    Form S-8
    filed with the SEC on September 30, 2003 (File
    No. 333-109278).10
.34*+

Stock subscription warrant for
    David Peterschmidt, dated September 16, 2003, is
    incorporated herein by reference to Exhibit 4.4 filed with
    our Registration Statement on
    Form S-8
    filed with the SEC on September 30, 2003 (File
    No. 333-109278).10
.35.3*

Agreement between
    Société Générale and Business Objects,
    effective March 1, 2006, is incorporated herein by
    reference to Exhibit 10.35.3 filed with our Current Report
    on
    Form 8-K
    filed with the SEC on March 7, 2006 (File
    No. 000-24720).10
.35.4

Amendment Letter, signed
    February 28, 2007, between Société
    Générale and Business Objects.10
.36*+

Crystal Decisions, Inc. 1999 Stock
    Option Plan, as amended August 13, 2003, is incorporated
    herein by reference to Exhibit 4.2 filed with our Registration
    Statement on
    Form S-8
    filed with the SEC on December 11, 2003 (File
    No. 333-111090).10
.36.1*+

Crystal Decisions 1999 Stock
    Option Plan  Canadian Stock Option Agreement is
    incorporated herein by reference to Exhibit 10.1.1 filed
    with the Crystal Decisions Registration Statement on
    Form 10 filed with the SEC on October 27, 2000 (File
    No. 000-31859).10
.36.2*+

Crystal Decisions 1999 Stock
    Option Plan, as amended August 13, 2001 (French Employees
    Only), is incorporated herein by reference to
    Exhibit 10.1.4 filed with the Crystal Decisions Annual
    Report on
    Form 10-K
    filed with the SEC on September 26, 2002.10
.37*

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, is incorporated by reference to Exhibit 10.16
    filed with Seagate Technology International LLCs
    Registration Statement on Form S-4 filed with the SEC on
    April 20, 2001 (File
    No. 333-59328).10
.38*

Management Shareholders Agreement,
    dated as of November 22, 2000, by and among New SAC and the
    Management Shareholders listed therein is incorporated by
    reference to Exhibit 10.17 filed with the Seagate
    Technology International LLC Registration Statement on
    Form S-4
    filed with the SEC on April 20, 2001 (File
    No. 333-59328). 159




---



##### Table of Contents



Exhibit No.

Description10
.40*

Lease Agreement, dated
    September 27, 1999, between Laurelton Investments Ltd.,
    Seagate Software Information Management Group (Canada) Ltd. And
    Seagate Software, Inc. incorporated herein by reference to
    Exhibit 10.10 filed with the Crystal Decisions Registration
    Statement on Form 10 filed with the SEC on October 27,
    2000 (File
    No. 000-31859).10
.0.1*

Amendment to Lease agreement,
    dated June 22, 2000, between Laurelton Investments Ltd.,
    Seagate Software Information Management Group (Canada) Ltd. And
    Seagate Software, Inc. is incorporated herein by reference to
    Exhibit 10.10.1 filed with the Crystal Decisions Annual
    Report on
    Form 10-K
    filed with the SEC on September 27, 2001.10
.40.2*

Amended and Restated Lease
    Agreement, dated February 28, 2002, between Laurelton
    Investments Ltd., Crystal Decision, Corp. and Crystal Decisions,
    Inc. is incorporated herein by reference to Exhibit 10.10.2
    filed with the Crystal Decisions Annual Report on
    Form 10-K
    filed with the SEC on September 26, 2002.10
.44*+

Employment Agreement, dated as of
    September 25, 2002, by and between Crystal Decisions Inc.
    and Jonathan Judge is incorporated herein by reference to
    Exhibit 10.17 filed with the Crystal Decisions Quarterly
    Report on
    Form 10-Q
    filed with the SEC on November 12, 2002 (File
    No. 000-31859).10
.51.1*

First Amendment to Pledge and
    Security Agreement, dated July 28, 2004, between Business
    Objects Americas and Comerica Bank is incorporated by reference
    to Exhibit 10.51.1 filed with our Quarterly Report on
    Form 10-Q
    filed with the SEC on August 9, 2004 (File
    No. 000-24720).10
.52*+

2004 International Employee Stock
    Purchase Plan, as amended on October 19, 2006, is
    incorporated herein by reference to Exhibit 10.53 filed
    with our Current Report on
    Form 8-K
    filed with the SEC on October 25, 2006 (File
    No. 000-24720).10
.53*+

Stock Subscription Warrant for
    David J. Roux is incorporated herein by reference to
    Exhibit 4.2 filed with our Registration Statement on
    Form S-8
    filed with the SEC on May 13, 2004 (File
    No. 333-115768).10
.54*+

Stock Subscription Warrant for
    Arnold Silverman is incorporated herein by reference to
    Exhibit 4.2 filed with our Registration Statement on
    Form S-8
    filed with the SEC on June 25, 2004 (File
    No. 333-116869).10
.55*+

Stock Subscription Warrant for
    Albert Eisenstat is incorporated herein by reference to
    Exhibit 4.3 filed with our Registration Statement on
    Form S-8
    filed with the SEC on June 25, 2004 (File
    No. 333-116869).10
.56*+

Stock Subscription Warrant for
    Bernard Charlès is incorporated herein by reference to
    Exhibit 4.4 filed with our Registration Statement on
    Form S-8
    filed with the SEC on June 25, 2004 (File
    No. 333-116869).10
.57*+

Stock Subscription Warrant for
    Kurt Lauk is incorporated herein by reference to
    Exhibit 4.5 filed with our Registration Statement on
    Form S-8
    filed with the SEC on June 25, 2004 (File
    No. 333-116869).10
.58*+

Stock Subscription Warrant for
    Gerald Held is incorporated herein by reference to
    Exhibit 4.6 filed with our Registration Statement on
    Form S-8
    filed with the SEC on June 25, 2004 (File
    No. 333-116869).10
.59*+

Stock Subscription Warrant for
    Jean-François Heitz is incorporated herein by reference to
    Exhibit 4.7 filed with our Registration Statement on
    Form S-8
    filed with the SEC on June 25, 2004 (File
    No. 333-116869).10
.60*+

Stock Subscription Warrant for
    David Peterschmidt is incorporated herein by reference to
    Exhibit 4.8 filed with our Registration Statement on
    Form S-8
    filed with the SEC on June 25, 2004 (File
    No. 333-116869).10
.62*+

2005 Executive Compensation Plan
    Stock Subscription Warrant Agreement for Gerald Held is
    incorporated herein by reference to Exhibit 10.62 filed
    with our Annual Report on
    Form 10-K
    filed with the SEC on March 16, 2005 (File
    No. 000-24720).10
.63*+

Stock Subscription Warrant
    Agreement for Carl S. Pascarella is incorporated herein by
    reference to Exhibit 10.52 filed with our Annual Report on
    Form 10-K
    filed with the SEC on March 16, 2005 (File
    No. 000-24720). 160




---



##### Table of Contents



Exhibit No.

Description10
.64*+

Stock Subscription Warrant
    Agreement for Gerald Held is incorporated herein by reference to
    Exhibit 10.52 filed with our Quarterly Report on
    Form 10-Q
    filed with the SEC on August 9, 2005 (File
    No. 000-24720).10
.65*+

SRC Software, Inc. 2003 Stock
    Incentive Plan is incorporated herein by reference to
    Exhibit 4.1 filed with our Registration Statement on
    Form S-8
    filed with the SEC on October 24, 2005 (File
    No. 333-129200).10
.66*+

Form of Restricted Stock Purchase
    Agreement, as amended September 27, 2006, is incorporated
    herein by reference to Exhibit 10.66 filed with our
    Quarterly Report on
    Form 10-Q
    filed with the SEC on November 9, 2006 (File
    No. 000-24720).10
.67*+

Infommersion, Inc. 2002 Stock
    Incentive Plan, as amended on December 3, 2004, is
    incorporated herein by reference to Exhibit 10.67 filed
    with our Registration Statement on
    Form S-8
    filed with the SEC on November 3, 2005 (File
    No. 333-129433).10
.68*+$

Employment Agreement of
    John G. Schwarz, dated September 9, 2005, is
    incorporated herein by reference to Exhibit 10.65 filed
    with our Quarterly Report on
    Form 10-Q
    filed with the SEC on November 9, 2005 (File
    No. 000-24720).10
.69*+

Business Objects Americas Deferred
    Compensation Plan, as amended, is incorporated herein by
    reference to Exhibit 4.1 filed with our Registration
    Statement on
    Form S-8
    filed with the SEC on May 8, 2005 (File
    No. 333-124726).10
.70*+

Contract of Employment between
    Business Objects (U.K.) Ltd. and Bernard Liautaud, dated
    March 7, 2006, is incorporated by reference to
    Exhibit 10.70 filed with our Current Report on
    Form 8-K
    filed with the SEC on May 10, 2006 (File
    No. 000-24720).10
.71*+

Employment Agreement between
    Business Objects Americas and Bernard Liautaud, dated
    March 13, 2006, is incorporated by reference to
    Exhibit 10.70 filed with our Current Report on
    Form 8-K
    filed with the SEC on May 10, 2006 (File
    No. 000-24720).10
.72*+

Stock Subscription Warrant
    Agreement for Jean-François Heitz is incorporated by
    reference to Exhibit 10.72 filed with our Registration
    Statement on
    Form S-8
    filed with the SEC on August 8, 2006 (File
    No. 333-136418).10
.73*

Lease, dated December 23,
    2004 among 855 Homer Street Inc., Business Objects Corp. and
    Business Objects Americas is incorporated herein by reference to
    Exhibit 10.76 filed with our Quarterly Report on
    Form 10-Q
    filed with the SEC on November 9, 2005 (File
    No. 000-24720).10
.73.1*

Lease Modification Agreement,
    dated September 15, 2005, among 855 Homer Street Inc.,
    Business Objects Corp. and Business Objects Americas is
    incorporated herein by reference to Exhibit 10.76 filed
    with our Quarterly Report on
    Form 10-Q
    filed with the SEC on November 9, 2005 (File
    No. 000-24720).10
.73.2*

Second Lease Modification
    Agreement, dated April 1, 2006, among 855 Homer Street
    Inc., Business Objects Corp. and Business Objects Americas is
    incorporated herein by reference to Exhibit 10.76 filed
    with our Quarterly Report on
    Form 10-Q
    filed with the SEC on November 9, 2005 (File
    No. 000-24720).10
.74*+

2006 Stock Plan, adopted on
    October 19, 2006, is incorporated herein by reference to
    Exhibit 10.74 filed with our Current Report on
    Form 8-K
    filed with the SEC on October 25, 2006 (File
    No. 000-24720).10
.76*+

Business Objects Form of Change of
    Control Agreement for U.S. Executives is incorporated herein by
    reference to Exhibit 10.76 filed with our Quarterly Report
    on Form 10-Q filed with the SEC on November 9, 2005
    (File
    No. 000-24720).10
.77*+

Business Objects Form of Change of
    Control Agreement for Canadian Executives is incorporated herein
    by reference to Exhibit 10.77 filed with our Quarterly
    Report on
    Form 10-Q
    filed with the SEC on November 9, 2005 (File
    No. 000-24720).10
.78*+

Business Objects Form of Change of
    Control Agreement for French Executives is incorporated herein
    by reference to Exhibit 10.78 filed with our Quarterly
    Report on
    Form 10-Q
    filed with the SEC on November 9, 2005 (File
    No. 000-24720). 161




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##### Table of Contents



Exhibit No.

Description10
.79*+

Change of Control Agreement
    between Business Objects and Susan J. Wolfe is incorporated
    herein by reference to Exhibit 10.79 filed with our
    Quarterly Report on
    Form 10-Q
    filed with the SEC on November 9, 2005 (File
    No. 000-24720).10
.80*+

Change of Control Agreement
    between Business Objects and James R. Tolonen is
    incorporated herein by reference to Exhibit 10.80 filed
    with our Quarterly Report on
    Form 10-Q
    filed with the SEC on November 9, 2005 (File
    No. 000-24720).10
.81+

Employment Agreement of Susan J.
    Wolfe, dated February 28, 2007.14
.1*

Business Objects Code of Business
    Conduct and Ethics, as revised on October 19, 2006, is
    incorporated herein by reference to Exhibit 14.1 filed with
    our Current Report on
    Form 8-K
    filed with the SEC on October 25, 2006 (File
    No. 000-24720).21
.1

List of Subsidiaries of the
    Company.23
.1

Consent of Independent Registered
    Public Accounting Firm.24
.1

Power of Attorney is herein
    referenced to the signature page of this Annual Report on
    Form 10-K.31
.1

Certification of 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

Certification of Chief Executive
    Officer and of Chief Financial Officer furnished pursuant to
    Rule 13a-14(b)
    of the Exchange Act and Section 1350 of Chapter 63 of
    Title 18 of the United States Code (18 U.S.C. 1350).     *
    
    Previously filed.+
    
    Management contracts or compensatory plans.$
    
    Confidential treatment has been requested with respect to
    certain portions of this exhibit. Omitted portions have been
    filed separately with the Securities and Exchange Commission. 162