CONTENTS - Capgemini

(1) Restated in accordance with IFRS.
(2) See Note 1.K. – “Treasury stock”.
(3) There were no minority interests at December 31, 2006 (see Note 3.B. – “Changes in Group structure: 2006”).
(4) The method for measuring and recognizing stock options and share grants is described in Note 10.A. – “Stock option plans and share grants”.
(5) Dividends paid to shareholders for 2005 totaled €66 million (€0.50 per share).
(6) The second tranche of the alternative public exchange offer for Transiciel shares launched by Cap Gemini S.A. on October 20, 2003, contained an
earn-out mechanism. At December 31, 2005, this additional purchase consideration was estimated at €11 million.
In accordance with section 1.4.13.6 of the prospectus approved on October 29, 2003 by the Commission des Opérations de Bourse under reference
number 03-935, the third-party mediator authorized, on June 27, 2006, a maximum number of 315,332 Cap Gemini shares to be allocated on exercise
of 8,137,600 equity warrants. At the close of the exercise period for these equity warrants (June 30, 2006 to July 31, 2006), 8,055,558 warrants had
been exercised, giving rise to the issue of 312,127 new shares during the second half of 2006 totaling €11 million.
The provisions set aside in 2004 and 2005 in connection with the earn-out mechanism have been reversed (€9 million and €2 million, respectively).
(7) In connection with the increase in share capital of December 6, 2006, the Company issued 11,397,310 new Cap Gemini shares (after exercise of
the greenshoe option relating to 1,036,119 shares) with no preferential subscription rights or priority timing for existing shareholders, at a price of
€44.50 per share. Gross proceeds from this share issue including the issue premium amounted to €507 million. Issue costs totaled €9 million.
(8) See Note 10.B. – “Share buyback program”.
CONSOLIDATED STATEMENTS OF RECOGNIZED INCOME AND EXPENSE
FOR THE YEARS ENDED DECEMBER 31, 2004, 2005 AND 2006
in millions of euros 2004 (1) 2005 2006
Profit/(loss) for the year (534) 141 293
Purchase of a call option on Cap Gemini shares to neutralize the dilutive
impacts of the “OCEANE 2003” convertible/exchangeable bonds issued on
June 24, 2003 (2) - (16) -
Equity component of the June 16, 2005 bond issue (“OCEANE 2005”) (3) - 40 -
Actuarial gains and losses related to provisions for pensions and other
post-employment benefits (4) (36) (220) 150
Deferred taxes recognized in equity (5) 3 5 43
Translation adjustements (10) 26 (17)
Other - (1) 5
Income and expense recognized directly in equity (43) (166) 181
TOTAL RECOGNIZED INCOME AND EXPENSE (577) (25) 474
(1) Restated in accordance with IFRS.
(2) Simultaneously to the “OCEANE 2005” bond issue, the Group decided to neutralize in full the potential dilutive impact of the “OCEANE 2003”
convertible/exchangeable bonds issued on June 24, 2003 for a nominal amount of €460 million and due on January 1, 2010 via the purchase of a call
option for €16 million (before tax) on approximately 9 million Cap Gemini shares, representing the total number of shares underlying the “OCEANE
2003” convertible/exchangeable bond issue.
(3) On June 16, 2005, the Group issued bonds convertible/exchangeable into new or existing Cap Gemini shares (“OCEANE 2005”) for a nominal amount
of €437 million. These bonds mature on January 1, 2012 (see Note 17 – “Net cash and cash equivalents”).
(4) See Note 2 – “Change in accounting method” for 2004 and 2005 and Note 19 – “Provisions for pensions and other post-employment benefits” for
2006. Actuarial gains and losses related to provisions for pensions and other post-employment benefits in the table above are based on the average
exchange rate for each corresponding accounting period.
(5) In 2004, 2005 and 2006, deferred taxes mainly relate to the actuarial gains and losses for the period recognized in equity. In 2005, this item also
includes deferred tax liabilities relating to the equity component of the bonds issued on June 16, 2005 for an amount of €14 million (see (3) above)
and deferred tax assets of €6 million relating to the call option on Cap Gemini shares (see (2) above). Deferred tax assets for 2006 include particularly
the recognition in the United Kingdom of tax assets in an amount of €52 million. This amount concerns items recognized directly in equity between
2004 and 2006 and related to provisions for pensions and other post-employment benefits.
ANNUAL REPORT 2006 Capgemini
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