Software AG - The XML Company
Deutsch   |   Contact   |   Software AG Homepage
You are here: Home  > Financial Statements  > Notes  > Other disclosures
  Key Figures
  Letter to Shareholders
  Software AG Stock
  Business Development
in Q3 2006
  Financial Statements
  Consolidated income statement
  Consolidated balance sheet
  Consolidated statement
of chash flows
  Consolidated statement
of recognized income
and expense
  Segment report
   Accounting Policies
   Financial Position
   Other disclosures
  Financial Calendar

Other disclosures


Seasonal influences
Revenues and pre-tax earnings were distributed over fiscal year 2005 as follows:


€ thousands

Q1 2005

Q2 2005

Q3 2005

Q4 2005








   in % of annual revenue






Earnings before taxes






   in % of annual revenue







The distribution of revenues was similarly structured in previous years, primarily due to the purchasing behavior of our customers. Therefore, the Company expects the revenue and earnings trend to remain similar in the future.

Contingent liabilities


€ thousands









Stock option plans
Software AG has two different stock option plans for members of the Executive Board, officers and employees. This resulted in personnel expenses of €281 thousand in the third quarter of 2006 due to the transition regulations set out in IFRS 2. Personnel expenses for the first three quarters of 2006 amounted to €941 thousand. A total of 76,706 options have been exercised in the current fiscal year; however, no stock options were exercised in the third quarter. A total of 120,376 options were withdrawn in the first three quarters of 2006, 56,000 of them in the third quarter, due to employee turnover. As a result, as of September 30, 2006, a total of 673,376 stock options remain outstanding for exercise by members of the Executive Board and officers. As of December 31, 2005, 870,358 stock options had been issued to members of the Executive Board, officers and employees.

Please refer to the 2005 Annual Report for further disclosures on the option plans.

Other financial commitments
The Company has rent and lease agreements for buildings, land, computer and telephone equipment as well as vehicles. The obligations under these contracts for the remaining noncancelable terms up to the end of fiscal year 2006 amount to €2,878 thousand. Obligations of €26,845 thousand exist for the period up to the end of fiscal year 2011, and obligations of €12,034 thousand for the period after fiscal year 2011. The lease agreements are operating leases as defined in IAS 17.

Notes on significant business events
The Professional Service Margin Improvement Project and other organizational adjustment measures gave rise to restructuring costs in the amount of €3,995 thousand. Furthermore, trade receivables in the amount of €6,255 thousand due from customers with good credit standings were written down due to considerable delays in payment. The average amount of write-downs required in the first three quarters of the past four years is only €2,058 thousand.

Due to the repayment planned in the near future of an intercompany loan resulting from a net investment in a foreign business operation, it was no longer possible to recognize the exchange rate differences in other reserves in accordance with IAS 21.32 in conjunction with IAS 21.15. For that reason, other operating income from exchange rate gains in the amount of €9,955 thousand arose in the third quarter of 2006.

As of September 30, 2006, the effective number of employees (i.e., part time employees are taken into account on a pro-rata basis only) amounted to 2,666 (September 30, 2005: 2,664), 70.6 percent of whom were employed abroad (prior year: 71.1 percent). The average absolute number of employees (i.e., part-time employees are recorded in full regardless of their average number of working hours) of the Software AG Group in the first three quarters of 2006 was 2,809 (prior year: 2,678). In absolute terms, the Group employed 2,751 people (prior year: 2,774) at the end of the third quarter on September 30, 2006.

Executive Board and Supervisory Board
There have been no changes in the Executive and Supervisory Boards since December 31, 2005.

Events after the balance sheet date
Some personnel adjustments are planned for the fourth quarter of 2006 in connection with our Professional Service Margin Improvement Project.

  Interim Report Q3/06 (PDF)
Home | Legal Aspects | Privacy Policy | Impressum ©2006 Software AG