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Software AG GB 2013. englisch

GroupManagementReport Financing instruments Software AG’s financing is based on strong free cash flow. In addition, we use bank loans, promissory note loans and finance leasing for any additional financing needs. The primary financing risk arises from the possibility that the Company would not be able to satisfy existing financial liabilities, for example, from loan agreements, lease agree- ments or trade accounts payable. Active working capital management and Group-wide liquidity control limit this risk. In this manner, financial obligations can be balanced by available cash and bilateral lines of credit. The loans used are predominantly at fixed interest rates and have terms of no more than five years. Fixed-interest rates were secured for some of the loans using interest rate swaps. Variable interest payments are based on the prevailing interest rate on the reporting date. We calculated liabilities in foreign currency at the exchange rate as of Decem- ber 31, 2013. Investment analysis Capital expenditure for property, plant and equipment and intangible assets plays a minor role at IT companies such as Software AG. At €13.8 million in 2013, these investments were nearly equal to the year before at €13.3 million and primarily comprised operating and office equipment in the sales branches and the administrative headquarters in Darm- stadt and Saarbrücken. Net expenditure for acquisitions rose considerably due to the takeovers of five companies during the fiscal year to €113.2 million (2012: €17.9 million). More- over, in order to optimize liquidity, Software AG invested €56.5 million in securities with terms greater than three months. Financial position General principles and objectives of ­Software AG’s financial management The primarily objective of Software AG’s financial manage- ment is to support the sustainable growth of the Group and the ongoing portfolio optimization through an adequate ­financing structure—regardless of short-term capital market conditions. Furthermore, the solvency of all Group compa- nies must be ensured at all times. To do this we have suf- ficient liquid assets from net cash provided by operations and through credit agreements. A high equity ratio and strong free cash flow provide the financial flexibility for fur- ther organic growth and targeted acquisitions. Based on guidelines determined by the Management Board, the central Finance department implements financial policy and risk management. Software AG’s liquidity position is centrally controlled through active working capital manage- ment. Financial investments are essentially oriented toward the short term, which means that Group funds are invested at near money-market rates. We consistently minimize default risk through broadly di- versified investments and using stringent criteria in selecting transaction partners. Our central Finance department also monitors the currency risks for all Group companies and minimizes them using derivative financial instruments. In doing so, we only hedge existing balance sheet items or expected cash flows. Financing analysis Software AG’s financial liabilities in 2013 increased to €613.4 million (2012: €266.0 million) due to new promis- sory note loans worth a total value of €300 million and an innovation loan from the European Investment Bank in the amount of €100.0 million. Cash and cash equivalents as of December 31, 2013 were up significantly at €450.0 million (2012: €315.6 million). Shareholders’ equity fell to €965.6 million (2012: €1,060.1 million) year on year. This decrease was due primarily to the repurchase of treasury shares worth €154.4 million in total. Accordingly, the equity ratio was down to 48 percent (2012: 60 percent). 85 Corporate Governance Report of the Supervisory Board Consolidated Financial Statements Notes Additional Information Group Management Report Business and General Conditions Economic Report Events after the Balance Sheet Date Risk and Opportunity Report Remuneration Report Forecast Takeover-Related Disclosures Statement on Corporate Governance