Business Objects Reports Q2 2006 Results Total; Revenues Grew 12 Percent Year-over-Year; Americas Revenues Grew 36 Percent Year-over-Year

Total revenues for the second quarter of 2006 were $294 million,up 12 percent year-over-year. License revenues for the second quarterof 2006 were $123 million, down 1 percent year-over-year. Servicesrevenues for the second quarter of 2006 were $171 million, up 25percent year-over-year. Currency exchange rates did not have amaterial impact on year-over-year comparative results.

Income from operations on a US GAAP basis for the second quarterof 2006 was $13 million, or 5 percent of total revenues. Income fromoperations on a non-GAAP basis for the second quarter of 2006 was $39million, or 13 percent of total revenues. US GAAP diluted earnings pershare for the second quarter of 2006 were $0.08 and non-GAAP dilutedearnings per share were $0.31.

All figures referred to herein are stated in US dollars unlessotherwise indicated. Second quarter and six months 2006 non-GAAPresults, as defined below in the section "Use of non-GAAP FinancialMeasures," differ from results measured under US GAAP as they excludeamortization of intangible assets and stock-based compensationexpense. It should be noted that 2005 US GAAP numbers do not includestock-based compensation expense under FAS 123R. A reconciliation ofUS GAAP to non-GAAP results is included at the end of this pressrelease. All results reflect the acquisition of Firstlogic, Inc. as ofApril 1, 2006.

"Our revenues grew 12 percent on the strength of the Americas'performance, newly acquired businesses and the adoption of theBusinessObjects XI platform," said John Schwarz, chief executiveofficer of Business Objects. "We continue to see a substantial growthopportunity for our company as our customers' BI spending plans remainhealthy. However, to reach our full potential we need to see greatercontribution from Europe and the Asia-Pacific regions, as well as tofocus on the more timely closure of large transactions. To addressthese areas, we are hard at work implementing key changes, includingthe creation of a global team to accelerate large customer migrationsto the BusinessObjects XI platform, and the introduction of newprograms to encourage mid-market customers to add new users andfeatures. We expect these actions to allow us to further capitalize onthe growth opportunity presented by the BI market."

"The level of our profits and the growth of our cash position inthe face of reduced license revenues is a testament to the operationalexcellence programs we began adopting during 2005," said Jim Tolonen,chief financial officer of Business Objects. "We remain committed toour goal of improving operating profit margins."

On July 6, 2006, the company issued preliminary results for thesecond quarter of 2006. Total revenues were estimated at approximately$287 million to $291 million, with license revenues of approximately$116 million to $118 million and services revenues of approximately$171 million to $173 million. The company further estimated US GAAPdiluted earnings per share of approximately $0.05 to $0.08 andnon-GAAP diluted earnings per share of approximately $0.25 to $0.28.The variances between the actual and the preliminary results areprimarily due to conservative early estimates on license revenues andoperating expenses.

Second Quarter 2006 Business Highlights

Total Revenues up 12 Percent Year-over-Year

-- License revenues for enterprise performance management (EPM) solutions, including planning, budgeting, and dashboard applications, were $15 million in the second quarter of 2006, up 69 percent year-over-year.

-- License revenues for enterprise information management (EIM) solutions, including data quality and data integration, were $12 million in the second quarter of 2006, up 78 percent year-over-year.

-- License revenues for core business intelligence solutions were $96 million in the second quarter of 2006, down 12 percent year-over-year.

-- Maintenance revenues were $123 million in the second quarter of 2006, up 23 percent year-over-year. Maintenance renewals continue to demonstrate strong customer loyalty.

-- Global professional services revenues, including consulting and training, were $48 million in the second quarter of 2006, up 30 percent year-over-year.

-- There were 4 license transactions over $1 million, compared to 13 transactions in the previous year.

-- There were 113 license transactions between $200,000 and $1 million, up 18 percent year-over-year, and partially offsetting the decline in transactions greater than $1 million.

Revenue Growth Led by the Americas Region; Offset by Europe andAsia-Pacific

-- Total revenues in the Americas for the second quarter of 2006 were $168 million, up 36 percent year-over-year.

-- Total revenues in EMEA for the second quarter of 2006 were $107 million, down 8 percent year-over-year.

-- Total revenues in Asia-Pacific and Japan for the second quarter of 2006 were $20 million, down 10 percent year-over-year, but up 5 percent sequentially from the first quarter, which we believe signals the start of our recovery in the region.

BusinessObjects XI Continues to Gain Traction

-- Customer acceptance of BusinessObjects XI continued to ramp with $82 million in license revenues in the quarter.

-- BusinessObjects XI license revenues were up 51 percent from the same quarter last year and BusinessObjects XI Release 2 now accounts for more than 70 percent of the BusinessObjects XI license revenues.

Solid Balance Sheet

-- Total cash and investments (cash and cash equivalents, and short-term investments) were $475 million at June 30, 2006; a $44 million net increase from the prior quarter end.

-- Days sales outstanding (DSO) were 73 days as of June 30, 2006, improved from 80 days in the previous quarter.

-- Deferred and long-term deferred revenues totaled $274 million at June 30, 2006, up 32 percent year-over-year and 7 percent from March 31, 2006.

Highlights from Second Quarter Customer Wins

-- Notable customer wins in the second quarter of 2006 included: Blue Care Network of Michigan, Catholic Healthcare West (CHW), Chick-fil-A, Inc., China Pacific Insurance Co., Datacard Group, Deli XL B.V., GroupM, Gruppo ITAS Assicurazioni, Iron Mountain, Ministry of Education & Human Resources Development (Korea), Mos Food Services, Inc., Principal Financial Group, Sterling Savings Bank, SEI, Smorgan Steel, State of Alaska Department of Administration, Sydney Water Corp, The United States Army, and United States Navy.

-- In a key win, Expedia, a leading provider of online travel, upgraded to BusinessObjects XI Release 2 and adopted our Enterprise Performance Management solutions, including Crystal Xcelsius as a visualization tool.

-- National Health Service Scotland continues to expand its deployment of Business Objects and is standardizing on BusinessObjects XI Release 2.

Other Highlights

-- The company completed its acquisition of privately-held Firstlogic, Inc., a global provider of enterprise data quality software and services. For the first time, Firstlogic, Inc.'s financials are included in the company's results.

-- In the quarter, the company introduced its EIM strategy and offering. With its EIM solutions, Business Objects provides a unique cross-platform information integration and data quality framework that ensures customers can trust their information to make critical decisions.

-- The OEM business grew 7 percent year-over-year in the second quarter of 2006, with 15 new OEM partners added this quarter.

-- Continuing the expansion of the company's partner program, 88 new value added resellers worldwide signed up to Business Objects' partner network.

-- At the Business Objects European Insight user conference, the company introduced two new mid-market products: Crystal Vision, designed for individual users, and Crystal Vision Server, designed for managed environments.

-- During the quarter, the Company received widespread praise and won several awards, including "Best in Show" for crystalreports.com at the Gartner Midsize Enterprise Summit and several reader's choice awards for Crystal Reports XI from asp.netPRO magazine, JavaPro magazine, and Visual Studio magazine.

Business Outlook

Business Objects offers the following guidance for the quarterending September 30, 2006:

Total revenues for the third quarter are expected to be flat toslightly up on a sequential basis, as seasonal declines in licenserevenues are offset by continued strength in the services business,higher maintenance revenues from the Firstlogic, Inc. acquisition.

-- Total revenues are expected to range from $293 million to $298 million.

-- US GAAP diluted earnings per share are expected to range from $0.15 to $0.18.

-- Non-GAAP diluted earnings per share are expected to range from $0.32 to $0.35.

Non-GAAP diluted earnings per share for the quarter endingSeptember 30, 2006, are expected to add back approximately $11 millionof amortization of intangible assets, and approximately $11 million ofstock based compensation expense, which would be an increase ofapproximately $0.17 per share, after tax effect.

Business Objects updates the following updated guidance for theyear ending December 31, 2006:

For the full year, the company has revised our revenue guidancedownward from the previous guidance in light of the license revenueresults from the first half of the year, and in particular during thesecond quarter of 2006.

-- Total revenues are expected to range from $1.2 billion to $1.215 billion.

-- US GAAP diluted earnings per share are expected to range from $0.72 to $0.80.

-- Non-GAAP diluted earnings per share are expected to range from $1.47 to $1.55.

Non-GAAP diluted earnings per share for the year ending December31, 2006, are expected to add back approximately $44 million ofamortization and the write-off of intangible assets, and $47 millionof stock based compensation expense, which would be an increase ofapproximately $0.75 per share, after tax effect.

The US GAAP guidance includes stock based compensation expensefrom the application of FAS 123R. This stock based compensationexpense of approximately $11 million in the quarter ended September30, 2006, and $47 million for the full year 2006, includes the impactof options assumed in prior acquisitions, as well as prior employeegrants, and estimated employee grants for the current year. Theseexpenses are based on estimates, including future stock price,employee turnover, growth in new employees, grants to current and newemployees, stock volatility, and future interest rates.

The outlook for the quarter ending September 30, 2006 and fullyear 2006 assumes a US Dollar to euro exchange rate of $1.26 per EUR1.00, a US dollar to Canadian dollar exchange rate of $0.88 per CDN$1.00 and an effective US GAAP tax rate of 41 percent, and a non-GAAPtax rate of 31 percent. The non-GAAP tax rate differs from the US GAAPtax rate due to the elimination of the tax rate effect of the US GAAPexpenses that are being eliminated to arrive at the non-GAAP expenses.

The above information concerning our forecast for the thirdquarter and full year 2006 represents our outlook only as of the datehereof, and we undertake no obligation to update or revise anyfinancial forecast or other forward looking statements, as a result ofnew developments or otherwise.

Conference Call

Business Objects will hold a conference call to discuss itsfinancial results for the second quarter of 2006 on July 26, 2006. Thecall will begin at 2:00 p.m. PT (5:00 p.m. New York, 11:00 p.m. Paris,10:00 p.m. London). The call-in numbers are (800) 399-7988 for NorthAmerica and (706) 634-5428 for Europe and Asia with ID # 2166964. Theconference call also will be webcast live, and can be accessed on thecompany's IR website at www.businessobjects.com. A replay of thewebcast will be available on the site approximately two hours afterthe end of the live call.

Accounting Principles

Business Objects prepares its financial statements in accordancewith US GAAP. Because the company is listed on both the Eurolist byEuronext(TM) in France and the Nasdaq National Market in the UnitedStates, it is required to separately report consolidated financialstatements prepared in accordance with both US GAAP and InternationalFinancial Reporting Standards ("IFRS"). The most significantidentified differences between the two reporting standards forBusiness Objects relate to the treatment of stock-based compensationexpense, the accounting for deferred tax assets on certainintercompany transactions and the accounting for businesscombinations.

In accordance with French regulations and IFRS, Business Objectsfiled with the Autorite des Marches Financiers in France its Documentde Reference 2005 on April 24, 2006 under the registration numberR.06-038, which included its consolidated financial statements for theyear ended on December 31, 2005. The Document de Reference 2005includes the consolidated information that Business Objects publishedon April 26, 2006 to the Bulletin des Annonces Legales Obligatoires("BALO") in France. In addition, the Company expects to publish therevenues for its first half of 2006 in accordance with IFRS in theBALO in France in August 2006.

Use of Non-GAAP Financial Measures

The non-GAAP financial measures such as operating income, netincome, and earnings per share information for the second quarter andfull year included in this press release are different from thoseotherwise presented under US GAAP as these non-GAAP measures excludecertain charges. These charges include a write-off of in-processresearch and development, amortization of intangible assets,stock-based compensation expense, and restructuring charges. Thenon-GAAP tax rate differs from the US GAAP tax rate due to theelimination of the tax rate effect of the US GAAP expenses that arebeing eliminated to arrive at the non-GAAP expenses. Business Objectshas provided these measures in addition to US GAAP financial resultsbecause management believes these non-GAAP measures provide aconsistent basis for comparison between quarters and of growth ratesyear-over-year that are not influenced by certain non-cash charges orimpacts of prior period acquisitions, and therefore are helpful inunderstanding Business Objects' underlying operating results. Inaddition, this press release also includes non-GAAP measures that usea constant currency to separate the impact of conversion from otherforeign currencies to US dollars from other changes in our business.These non-GAAP measures are some of the primary measures BusinessObjects' management uses for planning and forecasting. These measuresare not in accordance with, or an alternative to US GAAP and thesenon-GAAP measures may not be comparable to information provided byother companies. Reconciliations of US GAAP to non-GAAP results arepresented at the end of this press release.

About Business Objects

Business Objects is the world's leading business intelligence (BI)software company, with more than 39,000 customers worldwide, includingover 80 percent of the Fortune 500. Business Objects helpsorganizations of all sizes create a trusted foundation for decisionmaking, gain better insight into their business, and optimizeperformance. The company's innovative business intelligence suite,BusinessObjects(TM) XI, offers the BI industry's most advanced andcomplete solution for performance management, planning, reporting,query and analysis, and enterprise information management.BusinessObjects XI includes the award-winning Crystal line ofreporting and data visualization software. Business Objects has alsobuilt the industry's strongest and most diverse partner community, andoffers consulting and education services to help customers effectivelydeploy their business intelligence projects.

Business Objects has dual headquarters in San Jose, Calif., andParis, France. The company's stock is traded on both the Nasdaq (BOBJ)and Euronext Paris (ISIN: FR0004026250 - BOB) stock exchanges. Moreinformation about Business Objects can be found atwww.businessobjects.com.

Forward-Looking Statements

This document contains forward-looking statements that involverisks and uncertainties concerning the company's expected growth andprofitability, the company's licensing and adoption of itsBusinessObjects XI products, the integration of recent acquisitions,the market adoption of Crystal Vision products, the company's expectedfinancial performance for the third quarter and full year 2006 and thecompany's product and business strategies. Actual events or resultsmay differ materially from those described in this document due to anumber of risks and uncertainties. These potential risks anduncertainties include, among others, fluctuations in the company'squarterly and yearly operating results; the company's ability tosustain or increase its profitability; the company's ability toattract and retain customers for BusinessObjects XI; the enterpriseperformance management products and CrystalReports.com; the company'sability to issue new releases of its products, including thoseacquired from Firstlogic, Inc.; the company's ability to successfullyintegrate Firstlogic, Inc. and its other recent acquisitions; changesto current accounting policies which may have a significant, adverseimpact upon the company's financial results; risks related to thecompany's integration of past and future acquisitions; theintroduction of new products by competitors or the entry of newcompetitors into the markets for Business Objects' products; theimpact of the pricing of competing technologies; the company's abilityto preserve its key strategic relationships; the company's relianceupon selling products only in the Business Intelligence softwaremarket; and economic and political conditions in the US and abroad.More information about potential factors that could affect BusinessObjects' business and financial results is included in BusinessObjects' Form 10-K for the year ended December 31, 2005 and Form 10-Qfor the quarter ended March 31, 2006, each of which are on file withthe SEC and available at the SEC's website at www.sec.gov. BusinessObjects is not obligated to undertake any obligation to update theseforward-looking statements to reflect events or circumstances afterthe date of this document.

Business Objects and the Business Objects logo, BusinessObjects,WebIntelligence, Crystal Reports, Intelligent Question, and DesktopIntelligence are trademarks or registered trademarks of BusinessObjects S.A. or its affiliated companies in the United States and/orother countries. All other names mentioned herein may be trademarks oftheir respective owners.BUSINESS OBJECTS S.A.
BUSINESS OBJECTS S.A.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per ordinary share and ADS data)

Three Months Ended Six Months Ended
June 30, June 30,
2006 2005 2006 2005
------ ------ ------ ------
Revenues: (unaudited) (unaudited)
Net license fees $123,110 $124,858 $249,004 $240,009
Services 171,374 137,551 323,751 271,175
-------- -------- -------- --------
Total revenues 294,484 262,409 572,755 511,184
Cost of revenues:
Net license fees 10,276 7,249 18,252 14,417
Services 66,023 52,781 126,790 104,162
-------- -------- -------- --------
Total cost of
revenues 76,299 60,030 145,042 118,579
-------- -------- -------- --------
Gross profit 218,185 202,379 427,713 392,605
Operating expenses:
Sales and marketing 123,123 104,787 240,623 208,509
Research and development 52,644 40,427 96,381 80,701
General and
administrative 28,965 22,218 59,328 47,031
-------- -------- -------- --------
Total operating
expenses 204,732 167,432 396,332 336,241
-------- -------- -------- --------
Income from operations 13,453 34,947 31,381 56,364
Interest and other income, net 3,008 3,178 5,863 7,578
-------- -------- -------- --------
Income before provision for
income taxes 16,461 38,125 37,244 63,942
Provision for income taxes (8,512) (14,986) (16,958) (25,797)
-------- -------- -------- --------
Net income $ 7,949 $ 23,139 $ 20,286 $ 38,145
======== ======== ======== ========

Basic net income per ordinary
share and ADS $ 0.09 $ 0.26 $ 0.22 $ 0.43
======== ======== ======== ========

Diluted net income per
ordinary share and ADS $ 0.08 $ 0.25 $ 0.21 $ 0.42
======== ======== ======== ========

Ordinary shares and ADSs used
in computing
basic net income per
ordinary share and ADS 93,310 90,030 92,946 89,727
======== ======== ======== ========

Ordinary shares and ADSs and
equivalents
used in computing diluted
net income per ordinary
share and ADS 95,083 92,089 95,162 91,650
======== ======== ======== ========


CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except nominal value per ordinary share)


June 30, December 31,
2006 2005
----------- -----------
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 469,490 $ 332,777
Restricted cash 30,545 22,157
Short-term investments 5,041 4,651
Accounts receivable, net 239,401 265,672
Deferred tax assets 13,106 13,605
Prepaid and other current assets 60,919 60,880
---------- ----------

Total current assets 818,502 699,742

Goodwill 1,210,775 1,166,043
Other intangible assets, net 122,607 110,512
Property and equipment, net 85,888 74,116
Deposits and other assets 28,766 34,945
Long-term restricted cash 26,428 20,858
Long-term deferred tax assets 15,230 17,142
---------- ----------

Total assets $2,308,196 $2,123,358
========== ==========

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 52,118 $ 45,777
Accrued payroll and related expenses 73,940 83,332
Income taxes payable 95,034 79,820
Deferred revenues 265,920 201,788
Other current liabilities 78,799 72,098
Escrows payable 24,970 21,728
---------- ----------

Total current liabilities 590,781 504,543

Long-term escrows payable 19,951 10,902
Other long-term liabilities 8,487 8,871
Long-term deferred tax liabilities 2,290 2,853
Long-term deferred revenues 8,480 6,734
---------- ----------
Total liabilities 629,989 533,903

Shareholders' equity
Ordinary shares, Euro 0.10 nominal value 10,524 10,359
Additional paid-in capital 1,257,437 1,217,473
Treasury, Business Objects Option LLC, and
Employee Benefit Sub-Plan Trust shares (4,214) (3,223)
Retained earnings 362,631 342,345
Unearned compensation - (12,243)
Accumulated other comprehensive income 51,829 34,744
---------- ----------
Total shareholders' equity 1,678,207 1,589,455
---------- ----------

Total liabilities and
shareholders' equity $2,308,196 $2,123,358
========== ==========

BUSINESS OBJECTS S.A.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)


Six Months Ended
June 30,
--------------------
2006 2005
-------- --------
(unaudited)
Operating activities:
Net income $ 20,286 $ 38,145
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization of property
and equipment 15,770 16,516
Amortization of other intangible assets 19,146 16,040
Stock-based compensation expense 24,917 2,360
Excess tax benefits from stock-based
compensation (2,422) -
Acquired in-process research and development 3,300 -
Deferred income taxes (5,789) 3,850
Changes in operating assets and liabilities:
Accounts receivable, net 45,546 29,019
Prepaid and other current assets 6,654 (8,865)
Deposits and other assets 6,282 7,563
Accounts payable 2,499 4,523
Accrued payroll and related expenses (21,645) (14,389)
Income taxes payable 16,937 (14,067)
Deferred revenues 45,860 15,517
Other liabilities (1,953) (24,943)
Short-term investments classified as
trading (390) (15)

-------- --------
Net cash provided by operating
activities 174,998 71,254
-------- --------

Investing activities:
Purchases of property and equipment (22,807) (13,891)
Business acquisitions, net of acquired
cash (55,482) -
Increase in escrows payable 12,099 -
Transfer of cash to restricted cash
accounts (13,766) -

-------- --------
Net cash used in investing activities (79,956) (13,891)
-------- --------

Financing activities:
Issuance of shares 25,361 16,057
Excess tax benefits from stock-based
compensation 2,422 -

-------- --------
Net cash provided by financing
activities 27,783 16,057
-------- --------

Effect of foreign exchange rate changes on cash
and cash equivalents 13,888 (911)

-------- --------
Net increase in cash and cash
equivalents 136,713 72,509
Cash and cash equivalents, beginning of the
period 332,777 293,485
-------- --------

Cash and cash equivalents, end of the period $469,490 $365,994
======== ========

BUSINESS OBJECTS S.A.
STATEMENT OF INCOME -- Reconciliation of US GAAP to Non-GAAP Results
Three Months Ended June 30, 2006
(in millions, except per ordinary share and ADS data)
(Unaudited)

Add back:
Amortization
of
intangible
assets and
in-process Add back:
research and Stock-based Non-GAAP
US GAAP development compensation Results
------- ------------- ------------- --------
Revenues:
Net license fees $123.1 $123.1
Services 171.4 171.4
------ ------------ ------------ ------
Total revenues 294.5 - - 294.5
Cost of revenues:
Net license fees 10.3 (7.4) 2.9
Services 66.0 (2.9) (1.5) 61.6
------ ------------ ------------ ------
Total cost of
revenues 76.3 (10.3) (1.5) 64.5
------ ------------ ------------ ------
Gross profit 218.2 10.3 1.5 230.0

Gross margin % 74% 78%

Operating expenses:
Sales and marketing 123.1 (0.4) (3.7) 119.0
Research and
development 52.6 (3.3) (1.8) 47.5
General and
administrative 29.0 (4.5) 24.5
------ ------------ ------------ ------
Total operating
expenses 204.7 (3.7) (10.0) 191.0
------ ------------ ------------ ------
Income from operations 13.5 14.0 11.5 39.0
Interest and other
income, net 3.0 3.0
------ ------------ ------------ ------
Income before provision
for income taxes 16.5 14.0 11.5 42.0
Provision for income
taxes (8.6) (12.9)
------ ------
Net income $ 7.9 $ 29.1
====== ======

Basic net income per
ordinary share and ADS $ 0.09 $ 0.31
====== ======

Diluted net income per
ordinary share and ADS $ 0.08 $ 0.31
====== ======


BUSINESS OBJECTS S.A.
STATEMENT OF INCOME -- Reconciliation of US GAAP to Non-GAAP Results
Six Months Ended June 30, 2006
(in millions, except per ordinary share and ADS data)
(Unaudited)

Add back:
Amortization
of
intangible
assets and
in-process Add back:
research and Stock-based Non-GAAP
US GAAP development compensation Results
------- ------------- ------------- --------
Revenues:
Net license fees $249.0 $249.0
Services 323.8 323.8
------ ------------ ------------ ------
Total revenues 572.8 - - 572.8
Cost of revenues:
Net license fees 18.3 (13.4) - 4.9
Services 126.8 (5.4) (2.8) 118.6
------ ------------ ------------ ------
Total cost of
revenues 145.1 (18.8) (2.8) 123.5
------ ------------ ------------ ------
Gross profit 427.7 18.8 2.8 449.3

Gross margin % 75% 78%

Operating expenses:
Sales and marketing 240.6 (0.7) (7.2) 232.7
Research and
development (1) 96.4 (3.3) (3.7) 89.4
General and
administrative 59.3 - (11.2) 48.1
------ ------------ ------------ ------
Total operating
expenses 396.3 (4.0) (22.1) 370.2
------ ------------ ------------ ------
Income from operations 31.4 22.8 24.9 79.1
Interest and other
income, net 5.8 5.8
------ ------------ ------------ ------
Income before provision
for income taxes 37.2 22.8 24.9 84.9
Provision for income
taxes (16.9) (24.9)
------ ------
Net income $ 20.3 $ 60.0
====== ======

Basic net income per
ordinary share and ADS $ 0.22 $ 0.65
====== ======

Diluted net income per
ordinary share and ADS $ 0.21 $ 0.63
====== ======

BUSINESS OBJECTS S.A.
Q2 FISCAL 2006 SUPPLEMENTAL INFORMATION
(in millions, except per ordinary share and ADS data)
(Unaudited)

Fiscal 2005 Fiscal 2006
-------------------------------- -------------
Q1 Q2 Q3 Q4 Total Q1 Q2
-------------------------------- -------------
SUPPLEMENTAL INCOME STATEMENT INFORMATION

Revenues
Net license fees $115.2 $124.9 $120.3 $155.3 $515.7 $125.9 $123.1
Maintenance 100.1 100.7 103.5 107.8 412.1 108.6 123.5
Consulting and
training 33.5 36.8 37.6 41.5 149.4 43.8 47.9
------------------------------------ --------------
Total revenues 248.8 262.4 261.4 304.6 1,077.2 278.3 294.5
------------------------------------ --------------

Total expenses
Cost of net
license fees 1.7 1.9 2.0 2.0 7.6 2.0 2.9
Cost of services
revenues 48.9 50.3 52.3 55.0 206.5 56.9 61.6
Sales and
marketing 103.2 104.3 102.8 121.6 431.9 113.6 119.0
Research and
development 40.0 40.1 40.2 41.1 161.4 41.9 47.5
General and
administrative 24.4 21.9 22.2 25.7 94.2 23.7 24.5
Amortization of
intangible
assets (1) 8.1 7.9 10.2 10.1 36.3 8.9 14.0
Stock-based
compensation (2) 1.2 1.1 1.6 3.1 7.0 13.4 11.5
Restructuring
costs (0.1) - - 0.3 0.2 - -
------------------------------------ --------------
Total expenses 227.4 227.5 231.3 258.9 945.1 260.4 281.0

------------------------------------ --------------
Income from
operations 21.4 34.9 30.1 45.7 132.1 17.9 13.5
------------------------------------ --------------
Interest and
other income,
net 4.4 3.2 2.9 3.9 14.4 2.9 3.0
Income before
provision for
income taxes 25.8 38.1 33.0 49.6 146.5 20.8 16.5

Provision for
income taxes (10.8) (15.0) (13.4) (14.7) (53.9) (8.5) (8.6)
Effective tax
rate 42% 39% 41% 30% 37% 41% 52%

------------------------------------ --------------
Net income 15.0 23.1 19.6 34.9 92.6 12.3 7.9
==================================== ==============
Net income per
ordinary share
and ADS
Basic 0.17 0.26 0.22 0.38 1.02 0.13 0.09
Diluted 0.16 0.25 0.21 0.37 1.00 0.13 0.08
Ordinary shares
and ADSs used in
computing net income
per share (000's)
Basic 89,424 90,030 90,552 91,588 90,405 92,552 93,310
Diluted 91,184 92,089 93,455 95,086 93,036 95,333 95,083

------------------ ---------------------------------------------------

Amortization of intangible assets
Cost of net
license fees 5.5 5.3 5.2 6.1 22.1 6.0 7.4
Cost of services
revenues 2.3 2.3 2.3 2.5 9.4 2.5 2.9
Sales and
marketing - - 0.3 0.3 0.6 0.4 0.4
Research and
development (1) - - 2.4 1.2 3.6 - 3.3
General and
administrative 0.3 0.3 - - 0.6 - -
------------------------------------ --------------
Total 8.1 7.9 10.2 10.1 36.3 8.9 14.0
==================================== ==============

Stock-based
compensation (2)
Cost of services
revenues 0.2 0.2 0.2 0.2 0.8 1.4 1.5
Sales and
marketing 0.5 0.5 0.5 0.4 1.9 3.5 3.7
Research and
development 0.3 0.3 0.3 0.3 1.2 1.8 1.8
General and
administrative 0.2 0.1 0.6 2.2 3.1 6.7 4.5
------------------------------------ --------------
Total 1.2 1.1 1.6 3.1 7.0 13.4 11.5
==================================== ==============

----------------------------------------------------------------------

Non-GAAP income
from operations
(3) 30.6 43.9 41.9 59.2 175.6 40.2 39.0
------------------------------------ --------------
% of total
revenues 12% 17% 16% 19% 16% 14% 13%

Interest and
other income,
net 4.4 3.2 2.9 3.9 14.4 2.9 3.0
Income before
provision for
income taxes 35.0 47.1 44.8 63.1 190.0 43.1 42.0

Provision for
income taxes (12.9) (17.4) (17.0) (22.7) (70.0) (12.0) (12.9)
Effective tax
rate 37% 37% 38% 36% 37% 28% 31%

------------------------------------ --------------
Non-GAAP net
income 22.1 29.7 27.8 40.4 120.0 31.1 29.1
==================================== ==============
% of total
revenues 9% 11% 11% 13% 11% 11% 10%

Non-GAAP net income
per ordinary share
and ADS
Basic 0.25 0.33 0.31 0.44 1.33 0.34 0.31
Diluted 0.24 0.32 0.30 0.42 1.29 0.33 0.31

----------------------------------------------------------------------
(1) Includes acquired in-process research and development related to
acquisitions

(2) In fiscal 2005, represents stock-based compensation expense
recorded in accordance with APB 25. In fiscal 2006, represents
stock-based compensation expense recorded in accordance with FAS 123R.

(3) Non-GAAP measures are reconciled from US GAAP figures. Non-GAAP
measures exclude in-process research and development, amortization of
intangible assets, stock-based compensation expense, and restructuring
costs.


BUSINESS OBJECTS S.A.
Q2 FISCAL 2006 SUPPLEMENTAL INFORMATION
(in millions, except for number of transactions, DSO and
headcount information)
(Unaudited)

----------------------------------------------------------------------

Fiscal 2005 Fiscal 2006
------------------------------- -------------
Q1 Q2 Q3 Q4 Total Q1 Q2
-------------------------------- -------------
REVENUE ANALYSIS

Total revenues
by geography

Americas $118.1 $123.6 $137.6 $166.7 $546.0 $147.2 $167.7
EMEA 111.2 116.5 104.9 117.7 450.3 $112.0 $106.8
Asia Pacific,
including
Japan 19.5 22.3 18.9 20.2 80.9 $19.1 $20.0
------------------------------------ --------------
Total $248.8 $262.4 $261.4 $304.6 $1,077.2 $278.3 $294.5

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Analysis of currency impact (year-over-year)

Reported revenue
growth rate 15% 18% 19% 14% 16% 12% 12%
Constant currency
growth rate 11% 15% 18% 19% 16% 17% 12%
------------------------------------ ------------
Impact of
foreign
currency on
growth rate 3% 3% 1% -5% 1% -5% 0%

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Fiscal 2005 Fiscal 2006
--------------------------------- ------------
Q1 Q2 Q3 Q4 Total Q1 Q2
--------------------------------- -----------
LICENSE REVENUE ANALYSIS

License revenues by
channel

Direct 47% 49% 48% 59% 51% 54% 48%
Indirect 53% 51% 52% 41% 49% 46% 52%
------ ------ ------ ------ ----- ------ ------
Total 100% 100% 100% 100% 100% 100% 100%

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Number of transactions
by size

Over $1 million 9 13 10 14 46 9 4
$200 thousand to
$999 thousand 101 96 121 147 465 104 113

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Fiscal 2005 Fiscal 2006
--------------------------- -------------
Q1 Q2 Q3 Q4 Q1 Q2
---------------------------- -----------
SELECTED BALANCE SHEET ITEMS

Cash and cash
equivalents,
restricted cash,
and short-term
investments $392 $384 $369 $380 $474 $532
DSO (Days sales
outstanding) 66 72 69 79 80 73

---------------------------------------------------------------------
HEADCOUNT

Total headcount 3,944 4,039 4,320 4,418 4,484 4,977
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