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Financial position

3.1 Significant increase in cash flow

Operating cash flow was €47.5 million during the first three months of the current fiscal year, a jump of 31 percent over the same quarter in 2008 (€36.2 million). Our proactive receivables management contributed to this continued improvement. Free cash flow once again grew vigorously, reaching €43.0 million, and thereby exceeding that of the previous year (€34.0 million) by 26 percent. This amount corresponds to Software AG ’s free cash flow for the entire 2005 fiscal year. Free cash flow as a percentage of Group revenue reached 26.0 percent (Q1 2008: 21.3 percent). This put us well on the way to achieving the forecasted free cash flow of €130 to 140 million for the 2009 full year.

3.2 Total assets and capital expenditure

Software AG's total assets rose from €1 billion as of March 31, 2008 to €1.17 billion on March 31, 2009. Cash and cash equivalents increased from €64.8 million to €136.7 million. The equity-to-assets ratio climbed by 31 percent from €454.8 million to €595.0 million. The equity-to-assets ratio increased accordingly from 45 percent to 51 percent at the end of the quarter. During the quarter under review, the debt acquired due to acquisitions was further reduced. Non-current liabilities were reduced from €277.2 million to €228.7 million. Net debt could be further reduced by more than €100 million due to excellent cash flow during the last 12 months to total €31.5 million. Thus, Software AG can also build on solid financial strength in the future.