Basis of presentation
Software AG’s consolidated financial statements are prepared in accordance with the International Financial Reporting Standards (IFRS) as promulgated by the International Accounting Standards Board (IASB). The IAS/ IFRSs applicable as of December 31, 2007, were observed, as were the corresponding interpretations of the International Financial Reporting Interpretations Committee (IFRIC – formerly SIC). The same accounting policies have been applied as in the 2007 financial statements. Accounting policies are not, therefore, explained in detail in these quarterly financial statements. The quarterly financial statements are prepared in accordance with IAS 34, Interim Financial Reporting.
Software AG is a registered stock corporation under German law with registered offices in Darmstadt. The Company is the parent company of a Group which is active in the fields of development, licensing, and maintenance of software as well as IT services.
The consolidated financial statements of Software AG are expressed in thousands of euros unless otherwise stated.
Changes in the consolidated group
As a result of mergers within the Group effective as of January 01, 2008, the companies in the consolidated group changed as follows in comparison with December 31, 2007.
Earnings per share
Earnings per share were calculated by dividing net income for the period attributable to Software AG’s shareholders by the weighted average number of shares issued and outstanding during the period under review. Software AG has issued only common shares. The weighted average number of shares amounted to 28,557,462 in the first quarter of 2008.
A total of 36,013 options were exercised during that time period, resulting in a corresponding increase in the number of shares by 36,013. Another 87,677 stock options may be exercised from the second stock option plan in fiscal 2008. Diluted earnings per share were calculated for these potential shares using the treasury stock method. Diluted earnings per share were computed by dividing net income for the period attributable to Software AG’s shareholders by the weighted average number of shares issued and outstanding plus the weighted average number of exercisable stock options.