Table of Contents
(Mark One) | ||
o | REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
þ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2007 | |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to | |
o | SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of event requiring this shell company report |
![SAP CORPORATION LOGO](https://capedge.com/proxy/20-F/0001326932-08-000133/f01936f0193600.gif)
Title of each class | Name of each exchange on which registered | |
American Depositary Shares, each representing one Ordinary Share, without nominal value | New York Stock Exchange | |
Ordinary Shares, without nominal value | New York Stock Exchange* |
Ordinary Shares, without nominal value (as of December 31, 2007)** | 1,246,258,408 |
Yes þ | No o |
Yes o | No þ |
Yes þ | No o |
Item 17 o | Item 18 o |
Yes o | No þ |
Table of Contents
Table of Contents
Page | ||||
1 | ||||
2 | ||||
3 | ||||
8 | ||||
8 | ||||
8 | ||||
8 | ||||
8 | ||||
9 | ||||
10 | ||||
11 | ||||
24 | ||||
25 | ||||
31 | ||||
33 | ||||
34 | ||||
35 | ||||
35 | ||||
36 | ||||
37 | ||||
37 | ||||
38 | ||||
40 | ||||
40 | ||||
40 | ||||
42 | ||||
43 | ||||
52 | ||||
56 | ||||
58 | ||||
59 | ||||
64 | ||||
64 | ||||
67 | ||||
68 | ||||
70 | ||||
70 | ||||
71 | ||||
73 | ||||
85 | ||||
87 | ||||
87 |
i
Table of Contents
Page | ||||||||
90 | ||||||||
90 | ||||||||
91 | ||||||||
92 | ||||||||
92 | ||||||||
92 | ||||||||
93 | ||||||||
95 | ||||||||
95 | ||||||||
95 | ||||||||
99 | ||||||||
100 | ||||||||
100 | ||||||||
102 | ||||||||
109 | ||||||||
109 | ||||||||
109 | ||||||||
109 | ||||||||
110 | ||||||||
112 | ||||||||
112 | ||||||||
113 | ||||||||
113 | ||||||||
113 | ||||||||
113 | ||||||||
113 | ||||||||
113 | ||||||||
114 | ||||||||
114 | ||||||||
115 | ||||||||
115 | ||||||||
115 | ||||||||
115 | ||||||||
115 | ||||||||
115 | ||||||||
116 | ||||||||
117 | ||||||||
118 | ||||||||
118 | ||||||||
118 | ||||||||
118 | ||||||||
Exhibit 4.4 | ||||||||
Exhibit 4.4.1 | ||||||||
Exhibit 8 | ||||||||
Exhibit 12.1 | ||||||||
Exhibit 12.2 | ||||||||
Exhibit 13 | ||||||||
Exhibit 15 |
ii
Table of Contents
1
Table of Contents
• | general economic and business conditions; | |
• | attracting and retaining personnel; | |
• | competition in the software industry; | |
• | implementing our business strategy; | |
• | developing and introducing new services and products; | |
• | freedom to use intellectual property; | |
• | regulatory and political conditions; | |
• | adapting to technological developments; | |
• | obtaining and expanding market acceptance of our services and products; | |
• | terrorist attacks or other acts of violence or war; | |
• | integrating newly acquired businesses; | |
• | meeting our customers’ requirements; and | |
• | other risks and uncertainties, some of which we describe under “Item 3. Key Information — Risk Factors.” |
2
Table of Contents
3
Table of Contents
• | Amortization expense related to intangible assets acquired in business combination and standalone purchases of intellectual property; | |
• | Expense related to purchased in-process research and development, which is recorded at fair value at the acquisition date and is immediately expensed; and | |
• | Restructuring charges to the extent they were incurred in connection with business combinations but accounted for under Statement of Financial Accounting Standards No. 146,Accounting for Costs Associated with Exit or Disposal Activities, in SAP’s U.S. GAAP financial statements. |
Business Objects | ||||||||||||||||
Support Revenue Not | Non-GAAP | |||||||||||||||
U.S. GAAP Financial | Recorded Under U.S. | Acquisition-Related | Financial | |||||||||||||
2007 | Measure | GAAP | Charges | Measure | ||||||||||||
€ millions, except operating margin | ||||||||||||||||
Software and software-related service revenue | 7,427 | — | — | 7,427 | ||||||||||||
Total revenue(1) | 10,242 | — | — | 10,242 | ||||||||||||
Operating income(1) | 2,732 | — | 61 | 2,793 | ||||||||||||
Operating margin on continuing operations | 26.7 | % | — | 0.6 | % | 27.3 | % |
(1) | These financial measures are the numerator or the denominator in the calculation of our Non-GAAP operating margin and the comparable U.S. GAAP operating margin, and are included in this table for the convenience of the reader. |
4
Table of Contents
5
Table of Contents
Percentage change | Constant currency | |||||||||||
from 2006 to 2007 | percentage change | Currency | ||||||||||
as reported | from 2006 to 2007 | effect | ||||||||||
% | % | % | ||||||||||
Software revenue | 13 | 18 | (5 | ) | ||||||||
Support revenue | 11 | 15 | (4 | ) | ||||||||
Software and software-related service revenue | 13 | 17 | (4 | ) | ||||||||
Consulting revenue | (1 | ) | 2 | (3 | ) | |||||||
Training revenue | 7 | 11 | (4 | ) | ||||||||
Other service revenue | 18 | 23 | (5 | ) | ||||||||
Professional service and other service revenue | 1 | 4 | (3 | ) | ||||||||
Total software revenue by Region(1): | ||||||||||||
EMEA region | 14 | 15 | (1 | ) | ||||||||
Americas region | 8 | 16 | (8 | ) | ||||||||
Asia Pacific Japan region | 28 | 32 | (4 | ) | ||||||||
Total revenue by Region(1): | ||||||||||||
United States | 4 | 13 | (9 | ) | ||||||||
Rest of Americas region | 12 | 15 | (3 | ) | ||||||||
Japan | 4 | 14 | (10 | ) | ||||||||
Rest of Asia Pacific Japan region | 22 | 24 | (2 | ) | ||||||||
Total revenue | 9 | 13 | (4 | ) | ||||||||
Operating expense | 10 | 14 | (4 | ) | ||||||||
Segments: | ||||||||||||
Product segment revenue | 11 | 15 | (4 | ) | ||||||||
Software revenue | 12 | 16 | (4 | ) | ||||||||
Support revenue | 9 | 14 | (5 | ) | ||||||||
Subscription and other software-related service revenue | 41 | 45 | (4 | ) | ||||||||
Product segment expense | 18 | 21 | (3 | ) | ||||||||
Product segment contribution | 7 | 11 | (4 | ) | ||||||||
Consulting segment revenue | 3 | 7 | (4 | ) | ||||||||
Americas region | 3 | 11 | (8 | ) | ||||||||
Consulting segment expense | 2 | 6 | (4 | ) | ||||||||
Consulting segment contribution | 6 | 10 | (4 | ) | ||||||||
Training segment revenue | 12 | 16 | (4 | ) |
6
Table of Contents
Percentage change | Constant currency | |||||||||||
from 2005 to 2006 | percentage change | Currency | ||||||||||
as reported | from 2005 to 2006 | effect | ||||||||||
% | % | % | ||||||||||
Software revenue | 9 | 11 | (2 | ) | ||||||||
Support revenue | 9 | 10 | (1 | ) | ||||||||
Software and software-related service revenue | 11 | 12 | (1 | ) | ||||||||
Other service revenue | 35 | 36 | (1 | ) | ||||||||
Total revenue by Region(1): | ||||||||||||
United States | 11 | 14 | (3 | ) | ||||||||
Rest of Americas region | 18 | 16 | 2 | |||||||||
Japan | 6 | 14 | (8 | ) | ||||||||
Rest of Asia Pacific Japan region | 15 | 16 | (1 | ) | ||||||||
Total revenue | 10 | 11 | (1 | ) | ||||||||
Operating expense | 10 | 11 | (1 | ) | ||||||||
Segments: | ||||||||||||
Product segment revenue | 10 | 11 | (1 | ) | ||||||||
Software revenue | 9 | 11 | (2 | ) | ||||||||
Support revenue | 10 | 11 | (1 | ) | ||||||||
Product segment expense | 7 | 8 | (1 | ) | ||||||||
Product segment contribution | 12 | 14 | (2 | ) | ||||||||
Consulting segment contribution | 30 | 32 | (2 | ) | ||||||||
Training segment revenue | 16 | 17 | (1 | ) |
(1) | Based on customer location |
7
Table of Contents
Year Ended December 31, | ||||||||||||||||||||||||
2007 | 2007 | 2006 | 2005 | 2004(4) | 2003(4) | |||||||||||||||||||
US$(1) | € | € | € | € | € | |||||||||||||||||||
In millions, except earnings per share data | ||||||||||||||||||||||||
Income Statement Data: | ||||||||||||||||||||||||
Total revenue | 14,957 | 10,242 | 9,393 | 8,509 | 7,514 | 7,025 | ||||||||||||||||||
Operating income | 3,991 | 2,732 | 2,578 | 2,337 | 2,018 | 1,724 | ||||||||||||||||||
Income from continuing operations before income taxes and minority interest | 4,173 | 2,857 | 2,688 | 2,323 | 2,073 | 1,777 | ||||||||||||||||||
Net income | 2,825 | 1,934 | 1,881 | 1,502 | 1,311 | 1,077 | ||||||||||||||||||
Earnings per share based on Net income(2) | ||||||||||||||||||||||||
Basic | 2.32 | 1.59 | 1.53 | 1.21 | 1.05 | 0.87 | ||||||||||||||||||
Diluted | 2.32 | 1.59 | 1.52 | 1.20 | 1.05 | 0.87 | ||||||||||||||||||
Earnings per share based on Income from continuing operations(2) | ||||||||||||||||||||||||
Basic | 2.34 | 1.60 | 1.53 | 1.21 | 1.05 | 0.87 | ||||||||||||||||||
Diluted | 2.34 | 1.60 | 1.53 | 1.21 | 1.05 | 0.87 | ||||||||||||||||||
Other Data: | ||||||||||||||||||||||||
Weighted-average number of shares outstanding(2) | ||||||||||||||||||||||||
Basic | 1,207 | 1,207 | 1,226 | 1,239 | 1,243 | 1,243 | ||||||||||||||||||
Diluted | 1,210 | 1,210 | 1,231 | 1,243 | 1,249 | 1,246 |
8
Table of Contents
Year Ended December 31, | ||||||||||||||||||||||||
2007 | 2007 | 2006 | 2005 | 2004(4) | 2003(4) | |||||||||||||||||||
US$(1) | € | € | € | € | € | |||||||||||||||||||
In millions, except earnings per share data | ||||||||||||||||||||||||
Balance Sheet Data: | ||||||||||||||||||||||||
Cash and cash equivalents (excluding restricted cash) | 2,348 | 1,608 | 2,399 | 2,064 | 1,506 | 839 | ||||||||||||||||||
Total assets(4) | 15,138 | 10,366 | 9,503 | 9,040 | 7,585 | 6,326 | ||||||||||||||||||
Shareholders’ equity | 9,497 | 6,503 | 6,136 | 5,782 | 4,594 | 3,709 | ||||||||||||||||||
Subscribed capital | 1,820 | 1,246 | 1,268 | 316 | 316 | 315 | ||||||||||||||||||
Short-term financial debt(3) | 47 | 32 | 31 | 22 | 26 | 19 | ||||||||||||||||||
Long-term financial debt(3) | 9 | 6 | 3 | 11 | 11 | 13 |
(1) | Amounts presented in US$ have been translated for the convenience of the reader at €1.00 to US$1.4603, the Noon Buying Rate for converting €1.00 into dollars on December 31, 2007. See “— Exchange Rates” for recent exchange rates between the euro and the dollar. | |
(2) | Amounts are retrospectively adjusted for all periods presented for the effect of the December 15, 2006 fourfold increase in the number of shares under a capital increase pursuant to German law. Furthermore, the 2007 figures reflect cancellation of 23,000,000 treasury shares effective September 7, 2007. See “Item 9. The Offer and Listing — General” for more detail of the share increase and the cancellation of shares. | |
(3) | Financial debt represents bank loans, overdrafts and capital lease obligations. Short-term means a remaining life of one year or shorter; long-term, beyond one year. The balances include convertible bonds issued pursuant to share-based compensation plans. See “Item 6. Directors, Senior Management and Employees — Share-Based Compensation Plans.” | |
(4) | Total assets in 2007 include assets held for sale which represent net assets of the discontinued operations. See Note 11 to our consolidated financial statements in “Item 18. Financial Statements” for further discussion on the discontinued operations. The discontinued operations were acquired by us in 2005 so income statement and balance sheet data in 2004 and 2003 does not reflect any discontinued operation. |
9
Table of Contents
Year | Average(1) | High | Low | |||||||||
2003 | 1.1411 | 1.2597 | 1.0361 | |||||||||
2004 | 1.2478 | 1.3625 | 1.1801 | |||||||||
2005 | 1.2400 | 1.3476 | 1.1667 | |||||||||
2006 | 1.2661 | 1.3327 | 1.1860 | |||||||||
2007 | 1.3797 | 1.4862 | 1.2904 |
Month | High | Low | ||||||
2007 | ||||||||
July | 1.3831 | 1.3592 | ||||||
August | 1.3808 | 1.3402 | ||||||
September | 1.4219 | 1.3606 | ||||||
October | 1.4468 | 1.4092 | ||||||
November | 1.4862 | 1.4435 | ||||||
December | 1.4759 | 1.4344 | ||||||
2008 | ||||||||
January | 1.4877 | 1.4574 | ||||||
February | 1.5187 | 1.4495 | ||||||
March (through March 14, 2008) | 1.5604 | 1.5195 |
(1) | The average of the applicable Noon Buying Rates on the last day of each month during the relevant period. |
10
Table of Contents
Dividend Paid | ||||||||
per Ordinary | ||||||||
Share | ||||||||
Year Ended December 31, | € | US$ | ||||||
2003 | 0.20 | 0.24 | (1)(4) | |||||
2004 | 0.28 | 0.35 | (1)(4) | |||||
2005 | 0.36 | 0.43 | (1)(4) | |||||
2006 | 0.46 | 0.62 | (1)(4) | |||||
2007 (proposed) | 0.50 | (2) | 0.78 | (2)(3)(4) |
(1) | Translated for the convenience of the reader from euro into dollars at the Noon Buying Rate for converting euro into dollars on the dividend payment date. The depositary is required to convert any dividend payments received from SAP as promptly as practicable upon receipt. | |
(2) | Subject to approval of the Annual General Meeting of Shareholders of SAP AG to be held on June 3, 2008. | |
(3) | Translated for the convenience of the reader from euro into dollars at the Noon Buying Rate for converting euro into dollars on March 14, 2008 of US$1.5604 per €1.00. The depositary is required to convert any dividend payments received from SAP as promptly as practicable upon receipt. The dividend paid may differ due to changes in the exchange rate. | |
(4) | One SAP ADS currently represents one SAP AG ordinary share. Accordingly, the final dividend per ADS is equal to the dividend for one SAP AG ordinary share and is dependent on the euro/dollar exchange rate. |
11
Table of Contents
• | general economic or political conditions in each country or region; | |
• | the overlap of differing tax structures; | |
• | the management of an organization spread over various jurisdictions; | |
• | exchange rate fluctuations; and | |
• | regulatory constraints such as export restrictions, regulation of the Internet, and additional requirements for the design and for the distribution of software and services. |
12
Table of Contents
13
Table of Contents
14
Table of Contents
15
Table of Contents
16
Table of Contents
• | the relatively long sales cycles for our products; | |
• | the size and timing of individual license transactions; | |
• | the timing of the introduction of new products or product enhancements by us or our competitors; | |
• | changes in customer budgets; | |
• | seasonality of a customer’s technology purchases; and | |
• | other general economic and market conditions. |
17
Table of Contents
• | expansion of our operations; | |
• | research and development directed towards new products and product enhancements; and | |
• | development of new distribution and resale channels, particularly for small and midsize enterprises. |
18
Table of Contents
• | the announcement of new products or product enhancements by us or our competitors; | |
• | technological innovation by us or our competitors; | |
• | quarterly variations in our results of operations; | |
• | changes in revenue and revenue growth rates on a consolidated basis or for specific geographic areas, business units, products or product categories; | |
• | speculation in the press or financial community; | |
• | general market conditions specific to particular industries; | |
• | general and country specific economic or political conditions (particularly wars, terrorist attacks, etc.); and | |
• | proposed and completed acquisitions or other significant transactions by us or our competitors. |
19
Table of Contents
20
Table of Contents
• | continue to enhance and expand our existing products and services; | |
• | providebest-in-class business solutions and services; and | |
• | develop and introduce new products and provide new services that satisfy increasingly sophisticated customer requirements, that keep pace with technological developments and that are accepted in the market. |
21
Table of Contents
• | inability to successfully integrate the acquired business, including integrating different business and licensing models; | |
• | inability to integrate the acquired technologies or products with our current products and technologies; | |
• | potential disruption of our ongoing business; | |
• | inability to retain key technical and managerial personnel of the acquired business; | |
• | dilution of existing equity holders caused by capital stock issuances to the stockholders of acquired companies; | |
• | assumption of unknown material liabilities of acquired companies; | |
• | incurrence of debt or significant cash expenditure; | |
• | difficulty in implementing or maintaining controls, procedures and policies; | |
• | potential adverse impact on our relationships with partner companies or third-party providers of technology or products; | |
• | impairment of relationships with employees and customers; | |
• | regulatory constraints; and |
22
Table of Contents
• | problems with product quality, product architecture, legal contingencies, product development issues or other significant risks that may not be detected through the due diligence process. |
23
Table of Contents
24
Table of Contents
25
Table of Contents
• | SAP ERP: In July, we announced the availability of the second enhancement package for the SAP ERP application. Next to functional enhancements, the package included specific innovations for the media, utilities, telecommunications, and retail industries. We announced the third enhancement package in December. It delivers reporting, financial, human resource management, and quality management capabilities. These enhancement packages enable customers to quickly and cost effectively take advantage of key innovations without moving to a new SAP ERP release. |
26
Table of Contents
• | SAP Customer Relationship Management (SAP CRM): In December, we introduced a new version of SAP CRM, which offers new enhancements, such as real-time offer management, trade promotions management, business communications, and pipeline performance management. By acquiring Wicom Communications, a provider of all-Internet Protocol software solutions, and integrating the Wicom capabilities with related SAP applications, we can now offer more efficient and powerful contact center and enterprise communications functions in the SAP Business Communications Management software. | |
• | SAP Product Lifecycle Management (SAP PLM): We enhanced our product lifecycle management software. With the enhancements to SAP PLM, manufacturers can better address two dominant business trends — the accelerated speed of change and the need to achieve competitive differentiation by collaboratively innovating within their business network. | |
• | SAP Supply Chain Management (SAP SCM): SAP SCM 2007 extended our supply chain management offering, with its new functionalities for supply network collaboration, extended warehouse management, transportation management, and sales and operations planning. | |
• | SAP Supplier Relationship Management (SAP SRM): In 2007, we introduced an on-demand electronic purchasing solution. Companies can use the SAPE-Sourcing on-demand solution for their sourcing and procurement processes, such as online auctions and responding to requests for proposals. We also launched an application for contract life-cycle management and a spend analytics application that enables companies to more effectively manage procurement costs and compliance. | |
• | SAP Auto-ID Infrastructure: Customers can use our new SAP Auto-ID Infrastructure offering for product tracking and authentication to collect and process product data from RFID tags. This is designed to enable them to pinpoint the exact location of any object at any time. | |
• | SAP Manufacturing: As a result of acquiring Factory Logic in late 2006, we added the SAP Lean Planning and Operations application to our offering for the manufacturing industry. It helps manufacturers adapt more effectively and more flexibly to the changing demands of their customers. In addition, as a result of our acquisition of Lighthammer in 2005, in the new version of the SAP Manufacturing Integration and Intelligence application plant employees have better, personalized access to the information they need for decision making. |
• | SAP NetWeaver Composition Environment: We released the SAP NetWeaver Composition Environment offering, a lean, integrated, standards-based development, modeling, and runtime environment. Software developers and technical consultants can use it to extend application logic and, depending on users’ needs, compose new views and applications based on SAP software. | |
• | SAP NetWeaver Process Integration: Companies use new functions in the SAP NetWeaver Process Integration offering to make their business processes more flexible and to manage enterprise services. At its heart is the Enterprise Services Repository, which is used to define all enterprise services and manage them through their life cycle. | |
• | SAP NetWeaver Business Rules Management (BRM): In 2007, we acquired Yasu, a vendor of business rules management systems, and embedded its solutions in our SAP NetWeaver technology platform, helping our customers to apply their business rules consistently to all of their business processes in heterogeneous IT landscapes, and to update them as necessary. |
27
Table of Contents
• | SAP NetWeaver Identity Management: We acquired MaXware in May 2007. We integrated its identity management solution in the SAP NetWeaver technology platform and enhanced it to help companies save time and money by optimizing the administration of user accounts and passwords. | |
• | SAP NetWeaver Enterprise Search: In August 2007, we released the SAP NetWeaver Enterprise Search offering. It is designed to provide secure, seamless access to information and processes in SAP and non-SAP systems to help information workers navigate to key business data. It delivers highly relevant results and suggested actions that reflect the user’s role in the enterprise, and recognizes the business context of the search query. | |
• | SAP NetWeaver Mobile: A new version of the SAP NetWeaver Mobile offering provides new, scalable middleware to simplify the management of mobile devices, and improved security functions. New development tools help build mobile applications with very little programming work. |
• | SAP BusinessAll-in-One: We released a new version of the SAP BusinessAll-in-One solutions. Based on SAP ERP and SAP CRM, the solutions leverage the power of an enterprise SOA to offer midsize customers flexibility and simplicity in their use. | |
• | SAP Business ByDesign: In September, we launched SAP Business ByDesign. It is a business solution we developed for businesses with 100 to 500 employees — fast growing companies that typically have not experienced integrated business solutions before. SAP Business ByDesign is designed to deliver simplicity, adaptability, and a wide range of functions at low running cost. Initially we offer SAP Business ByDesign as an on-demand solution; we intend to make other deployment models available in the future. | |
• | SAP Business One: In 2007, we added new capabilities to SAP Business One such as financial capabilities from reconciliation to reporting and new Web-based capabilities such as Web CRM ande-commerce. |
• | SAP solutions for governance, risk, and compliance: We delivered new or enhanced versions of SAP solutions for governance, risk, and compliance, which include the SAP GRC Global Trade Services application, the SAP Customs Processing for Automated Export Systems (AES) application, the SAP GRC Process Control application, the SAP GRC Risk Management application, and the SAP GRC Access Control application. These applications help customers perform risk analysis, manage internal controls, and comply with regulations. | |
• | Analytic blueprints from SAP: By acquiring Pilot Software we added a critical piece of new technology that is now integrated into our portfolio of analytic applications. We now offer customers tools to foster the alignment of their business strategy across all of their organizations. | |
• | SAP Strategy Management: We acquired Pilot Software to enhance our portfolio of strategy management software. Customers use the SAP Strategy Management application to continuously manage and assess the three cornerstones of business performance — metrics, decisions, and goals. | |
• | SAP Business Planning and Consolidation: Our acquisition of OutlookSoft, a specialist company providing financial and strategy performance measurement solutions, extended our portfolio of solutions to help chief financial officers (CFOs). With its integrated planning, budgeting, forecasting, and consolidation capabilities, it is a solution that provides an effective control and planning toolbox. |
28
Table of Contents
• | Mobile business: Responding to growing interest in mobile business processes, we developed new mobile solutions and enhancements to existing mobile applications. Employees with mobile devices can be given access to core business processes. | |
• | Duet: Duet, which has been available since 2006, enables information workers to use SAP business data and business process software in the familiar Microsoft Office environment. In March 2007, we delivered a value pack with new scenarios for sales management, travel management, and demand planning. It comes with new configuration tools for the system administrator, and with more languages. |
• | Accelerated innovation: In the next few years, we expect IT will play an increasingly key part in the development of new business models. SAP has the applications we believe companies will need. | |
• | Rapid strategic implementation: SAP’s solutions are imbued with our decades of experience of the business processes and requirements in specific industries. Our expertise helps our customers to optimize their procedures for maximum efficiency. Building a business process platform based on enterprise service-oriented architecture (enterprise SOA), SAP solutions offer a much more rapid way to implement new strategies than was possible with any earlier approach. | |
• | Return on human capital investment: SAP applications help our customers deploy their most important capital assets more profitably. Examples include efficient personnel development, teamwork across multiple locations on complex projects, and support for globally dispersed staff. | |
• | Responsible management with a global footing: SAP applications support legal compliance and responsible, value-driven governance, risk assessment, and control. |
29
Table of Contents
• | Organic growth: Our growth strategy is based primarily on the internal development of our own product portfolio. | |
• | Co-innovation: We are expanding our partner ecosystem. This accelerates innovation by supporting the development of solutions built on the SAP NetWeaver technology platform, and leverages more sales channels to address the various market and customer segments. | |
• | Smart acquisitions: With targeted strategic “fill-in” acquisitions that add to our broad solution offering for individual industries or across industries, we gain specific technologies and capabilities that meet the needs of our customers. To accelerate our growth in the field of business intelligence, we have acquired Business Objects in January 2008. It is an acquisition that positions us to lead the market for business performance management with more innovative products. |
30
Table of Contents
![(GRAPH)](https://capedge.com/proxy/20-F/0001326932-08-000133/f01936f0193614.gif)
• | General-purpose applications. These include the SAP Business Suite family of business applications which consists of SAP ERP (which is made up of the following solutions: SAP ERP Human Capital Management (SAP ERP HCM), SAP ERP Financials, SAP ERP Operations, and SAP ERP Corporate Services), SAP Customer Relationship Management (SAP CRM), SAP Product Lifecycle Management (SAP PLM), SAP Supply Chain Management (SAP SCM), and SAP Supplier Relationship Management (SAP SRM). These applications can be licensed individually or together as a suite, and in some cases, such as with customer relationship management, customers can choose to license the software as on-demand solutions. In addition, we offer various cross-industry optional applications such as SAP Global Trade Management, Environment, Health & Safety, Duet, and SAP solutions for radio frequency identification (RFID). | |
• | Industry-specific applications. These perform defined business functions in particular industries. These applications often are delivered as add-ons to general-purpose applications, particularly to the SAP ERP application. Some industry-specific applications may run stand-alone, and others require SAP ERP or other SAP Business Suite applications. Examples of industry-specific applications include the SAP Apparel and Footwear application for the consumer products industry and the SAP Reinsurance Management application for the insurance industry. |
31
Table of Contents
Process Industries • Chemicals • Mill Products • Oil & Gas • Mining Discrete Industries • Aerospace & Defense • Automotive • Engineering, Construction & Operations • High Tech • Industrial Machinery & Components Consumer Industries • Consumer Products • Retail • Wholesale Distribution • Life Sciences | Services Industries • Media • Logistics Service Providers • Postal Services • Railways • Telecommunications • Utilities • Professional Services Financial Services • Banking • Insurance Public Services • Healthcare • Higher Education & Research • Public Sector • Defense & Security |
32
Table of Contents
• | SAP Custom Development.The SAP Custom Development organization develops custom solutions that address customers’ unique business requirements on the SAP NetWeaver platform. The service portfolio includes development services that help customers to extend and enhance existing SAP solutions or build new and innovative business solutions, and maintenance services to protect their custom solutions and SAP investment as their business evolves over time. | |
• | SAP Active Global Support.The SAP Active Global Support organization offers a broad range of services to support customers before, during and after implementation of our software solutions, providingaround-the-clock technical support for high-priority messages to resolve issues as well as proactive, preventative support services to mitigate potential problems before they get out of hand. Key offerings of SAP Active Global Support include the SAP Standard Support option which provides the knowledge, tools, and functions to keep customers’ SAP environmentup-to-date and running efficiently, and the SAP Premium Support option through which SAP’s experts take a more active role in establishing support operations. As part of the SAP Standard Support, customers are entitled to unspecified upgrades and enhancements to the software products they licensed. |
• | SAP Consulting.The SAP Consulting organization offers consulting, implementation, and optimization services that aim at delivering business value in all phases of the solution life-cycle, from the planning phase through building and running the solutions. SAP Consulting advises and supports customers on designing business processes and IT infrastructure, helps customers with project management, solution implementation and integration, and helps with solution and IT landscape optimization to adapt to changing business needs of customers. | |
• | SAP Education. The SAP Education organization provides the training and tools required to assist SAP customers and partners in maximizing the benefits attained from SAP solutions. SAP Education services include education needs analysis, education delivery via classroom ore-learning, assessment certification and continuous improvement. | |
• | SAP Managed Services.The SAP Managed Services organization provides a comprehensive portfolio of services which include application management services and hosting services, running and managing SAP solutions on behalf of customers. |
33
Table of Contents
2007 | 2006 | 2005 | ||||||||||
€ millions | ||||||||||||
Germany | 2,004 | 1,907 | 1,810 | |||||||||
Rest of EMEA | 3,386 | 2,994 | 2,709 | |||||||||
Total EMEA | 5,390 | 4,901 | 4,519 | |||||||||
United States | 2,706 | 2,609 | 2,340 | |||||||||
Rest of Americas | 871 | 776 | 656 | |||||||||
Total Americas | 3,577 | 3,385 | 2,996 | |||||||||
Japan | 447 | 431 | 406 | |||||||||
Rest of APJ | 828 | 676 | 588 | |||||||||
Total APJ | 1,275 | 1,107 | 994 | |||||||||
Total revenue | 10,242 | 9,393 | 8,509 | |||||||||
34
Table of Contents
2007 | 2006 | 2005 | ||||||||||
€ millions | ||||||||||||
Process Industries | 2,135 | 1,995 | 1,766 | |||||||||
Discrete Industries | 2,222 | 2,179 | 1,986 | |||||||||
Consumer Industries | 1,949 | 1,665 | 1,456 | |||||||||
Service Industries | 2,371 | 2,132 | 1,945 | |||||||||
Financial Services | 678 | 590 | 543 | |||||||||
Public Services | 887 | 832 | 813 | |||||||||
Total revenue | 10,242 | 9,393 | 8,509 | |||||||||
35
Table of Contents
36
Table of Contents
37
Table of Contents
Ownership | Country of | |||||
Name of Subsidiary | % | Incorporation | Function | |||
Germany | ||||||
SAP Deutschland AG & Co. KG, Walldorf | 100 | Germany | Sales, consulting and training | |||
Rest of Europe/Middle East/Africa | ||||||
SAP (UK) Limited, Feltham | 100 | Great Britain | Sales, consulting and training | |||
SAP (Schweiz) AG, Biel | 100 | Switzerland | Sales, consulting and training | |||
SAP France S.A., Paris | 100 | France | Sales, consulting and training | |||
SAP ITALIA SISTEMI, APPLICAZIONI, PRODOTTI IN DATA PROCESSING S.P.A., Milan | 100 | Italy | Sales, consulting and training | |||
SAP Nederland B.V.,’s-Hertogenbosch | 100 | The Netherlands | Sales, consulting and training | |||
Americas | ||||||
SAP America, Inc., Newtown Square | 100 | USA | Sales, consulting and training | |||
SAP Canada Inc., Toronto | 100 | Canada | Sales, consulting, training, | |||
and research and development | ||||||
Asia/Pacific | ||||||
SAP JAPAN Co., Ltd., Tokyo | 100 | Japan | Sales, consulting training, | |||
and research and development |
38
Table of Contents
39
Table of Contents
40
Table of Contents
• | We expect year-over-year software and software-related service revenue growth in the range of 12% to 14% on a constant currency basis. The corresponding rate of growth in 2006 on a constant currency basis was 12%. We expect subscription and other software-related services to account for approximately 2% to 4% of total software and software-related services revenue. | |
• | To tap new business in the lower midmarket in the coming years, over a period of eight quarters we intend to invest about €300 million to €400 million in sales channels, process, infrastructure, and human resources, all oriented toward new customer relationships and a big, diversified partner ecosystem. We plan to fund these capital expenditures by using our operating cash flow. Depending on when we actually make these investments, in 2007 we expect to reinvest the equivalent of about one to two operating margin percentage points in preparing for additional future growth opportunities. Therefore, we assume our 2007 operating margin will be in the range 26.0% to 27.0%. Our 2006 operating margin was 27.4%. | |
• | We plan to increase our headcount by 3,500 FTEs in 2007. | |
• | We plan to continue to buy back shares in the open market. If the Annual General Meeting of Shareholders in May 2007 so resolves, we expect to pay a dividend that provides a payout ratio of about 30%. | |
• | We assume an effective tax rate in the range of 32.5% to 33.0% |
• | key factors that impacted our performance; |
41
Table of Contents
• | discussion of our operating results for 2007 compared to 2006 and for 2006 compared to 2005; and | |
• | our outlook for 2008. |
42
Table of Contents
Change | Change | |||||||||||||||||||
2007 | 2006 | 2005 | 2007 vs. 2006 | 2006 vs. 2005 | ||||||||||||||||
€ millions | ||||||||||||||||||||
Total revenue | 10,242 | 9,393 | 8,509 | 9 | % | 10 | % |
43
Table of Contents
Date | Period-End | |||
December 2006 | 1.3197 | |||
March 2007 | 1.3374 | |||
June 2007 | 1.3520 | |||
September 2007 | 1.4219 | |||
December 2007 | 1.4603 |
Date | Period-End | |||
December 2005 | 1.1842 | |||
March 2006 | 1.2139 | |||
June 2006 | 1.2779 | |||
September 2006 | 1.2687 | |||
December 2006 | 1.3197 |
Change | Change | |||||||||||||||||||
2007 | 2006 | 2005 | 2007 vs. 2006 | 2006 vs. 2005 | ||||||||||||||||
€ millions | ||||||||||||||||||||
Software revenue | 3,407 | 3,003 | 2,743 | 13 | % | 9 | % | |||||||||||||
Support revenue | 3,838 | 3,464 | 3,170 | 11 | % | 9 | % | |||||||||||||
Subscription and other software-related service revenue | 182 | 129 | 42 | 41 | % | 207 | % | |||||||||||||
Software and software-related service revenue | 7,427 | 6,596 | 5,955 | 13 | % | 11 | % |
44
Table of Contents
45
Table of Contents
Change | Change | |||||||||||||||||||
2007 | 2006 | 2005 | 2007 vs. 2006 | 2006 vs. 2005 | ||||||||||||||||
€ millions | ||||||||||||||||||||
Consulting revenue | 2,221 | 2,249 | 2,071 | (1 | )% | 9 | % | |||||||||||||
Training revenue | 410 | 383 | 342 | 7 | % | 12 | % | |||||||||||||
Other service revenue | 113 | 96 | 71 | 18 | % | 35 | % | |||||||||||||
Professional services and other service revenue | 2,744 | 2,728 | 2,484 | 1 | % | 10 | % |
46
Table of Contents
Change | Change | |||||||||||||||||||
2007 | 2006 | 2005 | 2007 vs. 2006 | 2006 vs. 2005 | ||||||||||||||||
€ millions | ||||||||||||||||||||
Total operating expenses | 7,510 | 6,815 | 6,172 | 10 | % | 10 | % | |||||||||||||
Operating income | 2,732 | 2,578 | 2,337 | 6 | % | 10 | % | |||||||||||||
Operating margin (Operating income as a percentage of total revenue) | 26.7 | % | 27.4 | % | 27.5 | % |
• | In 2007 we increased our personnel expenses by €356 million or 9% to €4,174 million, which is the result of the overall headcount increase in 2007 of 4,663 FTE or 12% to 43,861 FTE as of December 31, 2007. We continued to keep a tight control on personnel expenses due to minimal fixed salary increases as well as by adding additional headcount primarily in the major emerging markets with modest salary levels. In total, 35% of the headcount increase in 2007 was realized in India, China and Bulgaria. The share of employees in these three countries has increased from 14% in 2006 to 16% as of December 31, 2007. Personnel expenses as percentage of total operating expenses remained stable at 56%. | |
• | As a result of the strong increase in software and software-related service revenue, cost of purchased licenses (e.g. databases) increased in 2007 by 27%. |
47
Table of Contents
• | The incremental headcount and the increase in business activity in 2007 resulted in €54 million or 13% higher travel expenses compared to 2006. | |
• | Our accelerated investments in connection with SAP Business ByDesign. |
• | We increased our research and development expenses in 2006 by €246 million, or 23%, compared to 2005. | |
• | Our growing workforce resulted in an increase in personnel expenses, which went up from €3,365 million in 2005 to €3,818 million in 2006, or 13%. This increase in personnel expenses is the result of the overall headcount increase from 35,778 FTEs as of December 31, 2005, to 39,198 FTEs as of December 31, 2006, an increase of 10%. The biggest increase in headcount was in research and development, in which the worldwide FTE count rose 16% to 11,801. The increase is consistent with our organic growth strategy and commitment to meet product release schedules. We continued to keep a tight control on personnel expenses due to minimal fixed salary increases as well as by adding additional headcount primarily in the major emerging markets with modest salary levels such as China and India. The share of resources in low-cost locations (Bulgaria, China, and India) increased from 11% in 2005 to 14% in 2006. | |
• | Cost of purchased licenses increased due to the strong growth in software and software-related service revenue and the increase in amortization of acquired intellectual property. | |
• | We had higher travel expenses due to increased business activity. |
Change | Change | |||||||||||||||||||
2007 | 2006 | 2005 | 2007 vs. 2006 | 2006 vs. 2005 | ||||||||||||||||
€ millions | ||||||||||||||||||||
Cost of software and software-related services | 1,310 | 1,091 | 983 | 20% | 11% | |||||||||||||||
As a percentage of software and software-related service revenue | 18% | 17% | 17% |
• | Customer support costs which include: |
• | Standard support (e.g., 24x7 customer problem resolution, remote service delivery) |
48
Table of Contents
• | SAP Premium Support (Increased value on standard services) | |
• | Optimized implementation and ongoing management of End-to-end Solution Operations (costs and risks control by managing customers applications end-to-end) | |
• | SAP MaxAttention Support (comprehensive support tailored to customer needs) | |
• | SAP Safeguarding (Reduced implementation or upgrade risk) |
• | Costs of developing custom solutions that address customers’ unique business requirements. | |
• | License fees and commissions paid to third parties for databases and the other complementary third-party products sublicensed by us to customers. |
Change | Change | |||||||||||||||||||
2007 | 2006 | 2005 | 2007 vs. 2006 | 2006 vs. 2005 | ||||||||||||||||
€ millions | ||||||||||||||||||||
Cost of professional services and other services | 2,091 | 2,073 | 1,925 | 1% | 8% | |||||||||||||||
As a percentage of Professional services and other service revenue | 76% | 76% | 77% |
49
Table of Contents
Change | Change | |||||||||||||||||||
2007 | 2006 | 2005 | 2007 vs. 2006 | 2006 vs. 2005 | ||||||||||||||||
€ millions | ||||||||||||||||||||
Research and development | 1,458 | 1,335 | 1,089 | 9% | 23% | |||||||||||||||
As a percentage of total revenue | 14% | 14% | 13% |
• | Personnel expenses related to our research and development employees; | |
• | Costs incurred for independent contractors retained by us to assist in our research and development activities; and | |
• | Amortization of computer hardware and software used in our research and development activities. |
Change | Change | |||||||||||||||||||
2007 | 2006 | 2005 | 2007 vs. 2006 | 2006 vs. 2005 | ||||||||||||||||
€ millions | ||||||||||||||||||||
Sales and marketing | 2,162 | 1,908 | 1,746 | 13% | 9% | |||||||||||||||
As a percentage of total revenue | 21% | 20% | 21% |
50
Table of Contents
Change | Change | |||||||||||||||||||
2007 | 2006 | 2005 | 2007 vs. 2006 | 2006 vs. 2005 | ||||||||||||||||
€ millions | ||||||||||||||||||||
General and administration | 506 | 464 | 435 | 9% | 7% | |||||||||||||||
As a percentage of total revenue | 5% | 5% | 5% |
Change | Change | |||||||||||||||||||
2007 | 2006 | 2005 | 2007 vs. 2006 | 2006 vs. 2005 | ||||||||||||||||
€ millions | ||||||||||||||||||||
Financial income/expense, net | 124 | 122 | 11 | 2% | 1,009% | |||||||||||||||
As a percentage of total revenue | 1% | 1% | 0% |
51
Table of Contents
Change | Change | |||||||||||||||||||
2007 | 2006 | 2005 | 2007 vs. 2006 | 2006 vs. 2005 | ||||||||||||||||
€ millions | ||||||||||||||||||||
Income taxes | 921 | 805 | 818 | 14% | (2 | )% | ||||||||||||||
As a percentage of Income from continuing operations before income taxes | 32% | 30% | 35% |
52
Table of Contents
Change | Change | |||||||||||||||
Product Segment | 2007 | 2006 | 2005 | 2007 vs. 2006 | 2006 vs. 2005 | |||||||||||
External revenue | 7,369 | 6,643 | 6,041 | 11% | 10% | |||||||||||
Segment expenses | (3,069 | ) | (2,609 | ) | (2,447 | ) | 18% | 7% | ||||||||
Segment contribution | 4,300 | 4,034 | 3,594 | 7% | 12% | |||||||||||
Segment profitability | 58% | 61% | 59% | (3) percentage points | 2 percentage points |
Change | Change | |||||||||||||||
Consulting Segment | 2007 | 2006 | 2005 | 2007 vs. 2006 | 2006 vs. 2005 | |||||||||||
External revenue | 2,369 | 2,300 | 2,078 | 3% | 11% | |||||||||||
Segment expenses | (1,738 | ) | (1,704 | ) | (1,620 | ) | 2% | 5% | ||||||||
Segment contribution | 631 | 596 | 458 | 6% | 30% | |||||||||||
Segment profitability | 27% | 26% | 22% | 1 percentage points | 4 percentage points |
Change | Change | |||||||||||||||
Training Segment | 2007 | 2006 | 2005 | 2007 vs. 2006 | 2006 vs. 2005 | |||||||||||
External revenue | 493 | 440 | 380 | 12% | 16% | |||||||||||
Segment expenses | (284 | ) | (273 | ) | (248 | ) | 4% | 10% | ||||||||
Segment contribution | 209 | 167 | 132 | 25% | 27% | |||||||||||
Segment profitability | 42% | 38% | 35% | 4 percentage points | 3 percentage points |
53
Table of Contents
54
Table of Contents
55
Table of Contents
56
Table of Contents
• | We expect full-year 2008 Non-GAAP software and software-related service revenue to increase between 24% and 27% on a constant currency basis (2007: €7.427 billion). This full-year projection excludes an estimated €180 million of support revenue that Business Objects would have been able to recognize had it remained a standalone entity but that will not be recognized by SAP due to purchase accounting adjustments under U.S. GAAP. We expect SAP’s business, excluding the contribution from Business Objects, to contribute 12 to 14 percentage points to this growth. | |
• | We expect our full-year 2008 Non-GAAP operating margin, which excludes the Business Objects support revenue mentioned above as well as acquisition-related charges, to be between 27.5% and 28.0% on a constant currency basis (2007 Non-GAAP operating margin: 27.3%). | |
• | The 2008 Non-GAAP operating margin outlook includes accelerated investments of €175 to €225 million (2007: €125 million) in building a business around the new SAP Business ByDesign solution to address new, untapped segments in the midmarket. | |
• | We plan to increase our headcount by about 4,000 FTEs in 2008 and we expect 10% of the new jobs to be in Germany. Those numbers do not include the headcount increase resulting from the acquisition of Business Objects. |
57
Table of Contents
• | For the benefit of our shareholders, we will continue to buy back shares in 2008 and, if approved at the Annual General Meeting of Shareholders on June 3, 2008, we will pay a dividend that provides a payout ratio of about 31%. |
58
Table of Contents
• | Revenue recognition | |
• | Valuation of accounts receivable | |
• | Accounting for share-based compensation | |
• | Accounting for income taxes and other income tax related judgments | |
• | Impairment assessments | |
• | Legal contingencies |
59
Table of Contents
60
Table of Contents
2007 | 2006 | 2005 | ||||||||||
€ millions | ||||||||||||
Specific customer credit loss risks | 9 | 3 | 9 | |||||||||
Customer credit loss risks based on aging of the receivables — charged to expense/(income) | (3 | ) | (43 | ) | 3 | |||||||
Total amounts charged to expense/(income) for allowances for doubtful accounts | 6 | (40 | ) | 12 | ||||||||
61
Table of Contents
62
Table of Contents
63
Table of Contents
64
Table of Contents
2007 | 2006 | % change | ||||||||||
€ millions | ||||||||||||
Cash and cash equivalents | 1,608 | 2,399 | (33 | )% | ||||||||
Restricted cash(1) | 550 | — | — | |||||||||
Short-term investments | 598 | 931 | (36 | )% | ||||||||
Total | 2,756 | 3,330 | (17 | )% |
(1) | The balance as of December 31, 2007 represents restricted cash of €550 million which was a security deposit that served as collateral for the credit facility entered into in connection with the acquisition of Business Objects. |
Years ended December 31, | Change | Change | ||||||||||||||||||
2007 | 2006 | 2005 | 2007 vs. 2006 | 2006 vs. 2005 | ||||||||||||||||
€ millions | ||||||||||||||||||||
Net cash provided by operating activities | 1,950 | 1,855 | 1,612 | 5 | % | 15 | % | |||||||||||||
Net cash used in investing activities | (1,392 | ) | (132 | ) | (574 | ) | 955 | % | (77 | )% | ||||||||||
Net cash used in financing activities | (1,287 | ) | (1,375 | ) | (555 | ) | (6 | )% | 148 | % |
65
Table of Contents
66
Table of Contents
Payments due by period | ||||||||||||||||||||
Contractual obligations | Total | Less than 1 year | 1-3 years | 3-5 years | More than 5 years | |||||||||||||||
€ millions | ||||||||||||||||||||
Long-term debt obligations(1) | 2 | — | 2 | — | — | |||||||||||||||
Capital (finance) lease obligations(2) | 3 | — | 2 | 1 | — | |||||||||||||||
Operating lease obligations(3) | 649 | 157 | 216 | 139 | 137 | |||||||||||||||
Purchase obligations(4) | 201 | 137 | 48 | 12 | 4 | |||||||||||||||
Other long-term liabilities reflected on the balance sheet(5) | 106 | — | 100 | 4 | 2 | |||||||||||||||
Total | 961 | 294 | 368 | 156 | 143 |
(1) | This represents a bank loan. |
(2) | This mainly represents capital leases of computer equipment and cars. |
(3) | We have operating leases for office facilities for most of our subsidiaries, cars, computer hardware and certain other equipment. Rental expense for operating leases in 2007 was €209 million (2006: €181 million; 2005: €164 million). |
(4) | Purchase obligations represent agreements to purchase goods or services that are enforceable and legally binding on us that specify all significant terms, including: fixed or minimum quantities to be purchased; fixed, minimum or variable price provisions; and the approximate timing of the transaction. The outstanding obligations include the construction of facilities, office equipment and car purchase commitments, food and security services and other facility commitments. |
(5) | Amounts mainly consist of income tax payable (€90 million) which includes provisions for uncertainties in income taxes, restructuring and other accruals (€10 million) and trade accounts payable (€6 million). Other noncurrent |
67
Table of Contents
liabilities on the balance sheet such as pension and other postemployment benefit liabilities, deferred compensation, deferred income, deferred tax liabilities, and deferred rent are not included in this table. Please see Notes 18 and 19b to our consolidated financial statements in “Item 18. Financial Statements.” |
68
Table of Contents
69
Table of Contents
Year | Year | |||||||||||||
First | Term | |||||||||||||
Name | Age | Principal Occupation | Elected | Expires | ||||||||||
Prof. Dr. h.c. mult. Hasso Plattner, Chairman(1)(2)(4)(6)(7)(8) | 64 | Chairman of the Supervisory Board | 2003 | 2012 | ||||||||||
Pekka Ala-Pietilä(1)(7)(8) | 51 | Co-founder and CEO Blyk Ltd. | 2002 | 2012 | ||||||||||
Prof. Dr. Wilhelm Haarmann(1)(2)(4)(5)(9) | 57 | Attorney at Law, Certified Public Auditor and Certified Tax Advisor; HAARMANN Partnerschaftsgesellschaft, Rechtsanwälte, Steuerberater, Wirtschaftsprüfer | 1988 | 2012 | ||||||||||
Dr. h.c. Hartmut Mehdorn(1)(6) | 65 | Chairperson of Executive Board, Deutsche Bahn AG | 1998 | 2012 | ||||||||||
Prof. Dr.-Ing. Dr. h.c. mult. Dr.-Ing. E.h. mult. Joachim Milberg(1)(2)(4)(7)(8) | 64 | Chairman of the Supervisory Board of BMW AG | 2007 | 2012 | ||||||||||
Prof. Dr. Dr. h.c. mult. August-Wilhelm Scheer(1)(3)(5) | 66 | Professor at Saarland University | 2002 | 2012 | ||||||||||
Dr. Erhard Schipporeit(1)(3)(11) | 59 | Management Consultant | 2005 | 2012 | ||||||||||
Prof. Dr.-Ing. Dr.-Ing. E.h. Klaus Wucherer(1)(7) | 63 | Member of the Corporate Executive Committee of Siemens AG | 2007 | 2012 | ||||||||||
Lars Lamadé, Vice Chairman(4)(6)(10) | 36 | Employee, Project Manager Service & Support | 2002 | 2012 | ||||||||||
Thomas Bamberger(3)(10) | 40 | Employee, Chief Controlling Officer Research & Breakthrough Innovation, Chief Controlling Officer Global Service & Support | 2007 | 2012 | ||||||||||
Panagiotis Bissiritsas(2)(5)(10) | 39 | Employee, Support Expert | 2007 | 2012 | ||||||||||
Willi Burbach(4)(7)(10) | 45 | Employee, Developer | 1993 | 2012 | ||||||||||
Helga Classen(4)(6)(10) | 57 | Employee, Chairperson of the Works Council of SAP AG and SAP Hosting AG & Co. KG | 1993 | 2012 | ||||||||||
Peter Koop(7)(10) | 41 | Employee, Industry Business Development Expert | 2007 | 2012 | ||||||||||
Dr. Gerhard Maier(2)(3)(10) | 54 | Employee, Development Project Manager | 1989 | 2012 | ||||||||||
Stefan Schulz(5)(7)(10) | 38 | Employee, Development Project Manager | 2002 | 2012 |
(1) | Elected by SAP AG’s shareholders on May 10, 2007. | |
(2) | Member of the Compensation Committee. | |
(3) | Member of the Audit Committee. |
70
Table of Contents
(4) | Member of the General Committee. | |
(5) | Member of the Finance and Investment Committee. | |
(6) | Member of the Mediation Committee. | |
(7) | Member of the Technology Committee. | |
(8) | Member of the Nomination Committee | |
(9) | Until January 1, 2006, Wilhelm Haarmann practiced as a partner of Haarmann Hemmelrath which served as special German tax counsel to SAP AG and counseled SAP with regard to other legal matters. On January 1, 2006, he founded HAARMANN Partnerschaftsgesellschaft in Frankfurt. |
(10) | Elected by SAP AG’s employees on April 23, 2007. | |
(11) | Elected by SAP AG’s shareholders on May 12, 2005, replacing Dietmar Hopp who resigned from the Supervisory Board on the same day. Member of the Audit Committee, and determined to be the Audit Committee financial expert. |
Year First | Year Current | |||||||
Name | Appointed | Term Expires | ||||||
Prof. Dr. Henning Kagermann, CEO | 1991 | 2009 | ||||||
Dr. Peter Zencke | 1993 | 2008 | ||||||
Prof. Dr. Claus Heinrich | 1996 | 2010 | ||||||
Gerhard Oswald | 1996 | 2010 | ||||||
Dr. Werner Brandt | 2001 | 2009 | ||||||
Léo Apotheker | 2002 | 2010 | ||||||
John Schwarz | 2008 | 2010 |
71
Table of Contents
72
Table of Contents
• | The fixed element is paid as a monthly salary. | |
• | The amount of performance-related compensation to be paid out in respect of 2007 depends on the SAP Group’s achievement of its targets “operating income based on U.S. GAAP,” on software and software-related revenue growth at constant currencies, and on the operating margin according to U.S. GAAP. On February 12, 2008, the Supervisory Board’s Compensation Committee assessed SAP’s performance against the agreed targets and determined how much performance-related compensation was payable. The payment will be made after the Annual General Meeting of Shareholders in June 2008. | |
• | The regular form of share-based compensation is the issue of virtual stock options under the terms of the 2007 stock option plan (SAP SOP 2007). The terms and details of SAP SOP 2007 are reported in Note 27 to our consolidated financial statements in “Item 18. Financial Statements.” |
73
Table of Contents
Performance-Related | Regular Long-Term | |||||||||||||||||||
Fixed Elements | Element | Incentive Elements | ||||||||||||||||||
Directors’ | Share-Based | |||||||||||||||||||
Profit- | Compensation | |||||||||||||||||||
Salary | Other* | Sharing | (SAP SOP 2007)** | Total | ||||||||||||||||
€(000) | ||||||||||||||||||||
Prof. Dr. Henning Kagermann (CEO) | 728.5 | 16.0 | 4,219.7 | 949.1 | 5,913.3 | |||||||||||||||
Shai Agassi (member until March 31, 2007)**** | 161.3 | 3.1 | 446.8 | *** | — | 611.2 | ||||||||||||||
Léo Apotheker | 485.6 | 59.0 | 2,813.1 | 632.7 | 3,990.4 | |||||||||||||||
Dr. Werner Brandt | 443.4 | 41.3 | 2,568.5 | 577.7 | 3,630.9 | |||||||||||||||
Prof. Dr. Claus E. Heinrich | 443.4 | 20.2 | 2,568.5 | 577.7 | 3,609.8 | |||||||||||||||
Gerhard Oswald | 443.4 | 14.8 | 2,568.5 | 577.7 | 3,604.4 | |||||||||||||||
Dr. Peter Zencke | 443.4 | 28.0 | 2,568.5 | 577.7 | 3,617.6 | |||||||||||||||
Total | 3,149.0 | 182.4 | 17,753.6 | 3,892.6 | 24,977.6 | |||||||||||||||
* | Insurance contributions, benefits in kind, expenses for maintenance of two households due to work abroad, compensation from seats on other governing bodies in the SAP Group. | |
** | Fair value at the time of allocation. | |
*** | The portion of the directors’ profit-sharing for January through March 2007 was calculated on the basis of the actual directors’ profit-sharing paid in 2006. | |
**** | Shai Agassi left the Executive Board on March 31, 2007. His employment contract with SAP ended on April 30, 2007. Details of the benefits paid due to early contract termination are set out in theEnd-of-Service Undertakings section. |
Nonrecurring | ||||||||||||||||||||||||||||
Regular | Long-Term | |||||||||||||||||||||||||||
Performance- | Long-Term | Incentive | ||||||||||||||||||||||||||
Related | Incentive | Element | ||||||||||||||||||||||||||
Fixed Elements | Element | Elements | Share-Based | |||||||||||||||||||||||||
Directors’ | Share-Based | Total Before | Compensation | |||||||||||||||||||||||||
Profit- | Compensation | Nonrecurring | (Incentive Plan | |||||||||||||||||||||||||
Salary | Other* | Sharing | (SAP SOP 2002)** | Element | 2010)** | Total | ||||||||||||||||||||||
€(000) | ||||||||||||||||||||||||||||
Prof. Dr. Henning Kagermann (CEO) | 710.7 | 17.0 | 2,673.7 | 949.0 | 4,350.4 | 4,680.1 | 9,030.5 | |||||||||||||||||||||
Shai Agassi | 474.4 | 59.5 | 1,782.5 | 632.7 | 2,949.1 | 3,120.1 | 6,069.2 | |||||||||||||||||||||
Léo Apotheker | 473.8 | 0.3 | 1,782.5 | 632.7 | 2,889.3 | 3,120.1 | 6,009.4 | |||||||||||||||||||||
Dr. Werner Brandt | 432.6 | 41.3 | 1,627.5 | 577.7 | 2,679.1 | 1,560.0 | 4,239.1 | |||||||||||||||||||||
Prof. Dr. Claus E. Heinrich | 432.6 | 20.0 | 1,627.5 | 577.7 | 2,657.8 | 1,560.0 | 4,217.8 | |||||||||||||||||||||
Gerhard Oswald | 432.6 | 14.8 | 1,627.5 | 577.7 | 2,652.6 | 1,560.0 | 4,212.6 | |||||||||||||||||||||
Dr. Peter Zencke | 432.6 | 27.7 | 1,627.5 | 577.7 | 2,665.5 | 1,560.0 | 4,225.5 | |||||||||||||||||||||
Total | 20,843.8 | 38,004.1 | ||||||||||||||||||||||||||
* | Insurance contributions, benefits in kind, compensation from seats on other governing bodies in the SAP Group. | |
** | Fair value at the time of allocation. |
74
Table of Contents
Total Fair | ||||||||||||||||||||
Value of | ||||||||||||||||||||
Long-Term | ||||||||||||||||||||
Fair Value | Incentive | Fair Value | ||||||||||||||||||
of Right | Elements | of Right on | Total Value on | |||||||||||||||||
at Time of | at Time of | December 31, | December 31, | |||||||||||||||||
Quantity | Grant | Grant | 2007 | 2007 | ||||||||||||||||
€ | €(000) | € | €(000) | |||||||||||||||||
Prof. Dr. Henning Kagermann (CEO) | 118,637 | 8.00 | 949.1 | 8.53 | 1,012.0 | |||||||||||||||
Shai Agassi | — | — | 0 | |||||||||||||||||
Léo Apotheker | 79,093 | 8.00 | 632.7 | 8.53 | 674.7 | |||||||||||||||
Dr. Werner Brandt | 72,216 | 8.00 | 577.7 | 8.53 | 616.0 | |||||||||||||||
Prof. Dr. Claus E. Heinrich | 72,216 | 8.00 | 577.7 | 8.53 | 616.0 | |||||||||||||||
Gerhard Oswald | 72,216 | 8.00 | 577.7 | 8.53 | 616.0 | |||||||||||||||
Dr. Peter Zencke | 72,216 | 8.00 | 577.7 | 8.53 | 616.0 | |||||||||||||||
Total | 486,594 | 3,892.6 | 4,150.7 | |||||||||||||||||
Total Fair | ||||||||||||||||||||||||||||
Value of | ||||||||||||||||||||||||||||
Regular Share-Based Compensation | Nonrecurring Share-Based Compensation | Long-Term | ||||||||||||||||||||||||||
SAP SOP 2002 | Incentive Plan 2010 | Incentive | ||||||||||||||||||||||||||
Fair Value | Fair Value | Elements at | ||||||||||||||||||||||||||
at Time of | at Time of | Time of | ||||||||||||||||||||||||||
Quantity | Grant | Total | Quantity | Grant | Total | Grant | ||||||||||||||||||||||
€ | €(000) | € | €(000) | €(000) | ||||||||||||||||||||||||
Prof. Dr. Henning Kagermann (CEO) | 35,851 | 26.47 | 949.0 | 188,182 | 24.87 | 4,680.1 | 5,629.1 | |||||||||||||||||||||
Shai Agassi | 23,901 | 26.47 | 632.7 | 125,455 | 24.87 | 3,120.0 | 3,752.7 | |||||||||||||||||||||
Léo Apotheker | 23,901 | 26.47 | 632.7 | 125,455 | 24.87 | 3,120.0 | 3,752.7 | |||||||||||||||||||||
Dr. Werner Brandt | 21,823 | 26.47 | 577.7 | 62,727 | 24.87 | 1,560.0 | 2,137.7 | |||||||||||||||||||||
Prof. Dr. Claus E. Heinrich | 21,823 | 26.47 | 577.7 | 62,727 | 24.87 | 1,560.0 | 2,137.7 | |||||||||||||||||||||
Gerhard Oswald | 21,823 | 26.47 | 577.7 | 62,727 | 24.87 | 1,560.0 | 2,137.7 | |||||||||||||||||||||
Dr. Peter Zencke | 21,823 | 26.47 | 577.7 | 62,727 | 24.87 | 1,560.0 | 2,137.7 | |||||||||||||||||||||
Total | 170,945 | 4,525.2 | 690,000 | 17,160.1 | 21,685.3 | |||||||||||||||||||||||
75
Table of Contents
Prof. Dr. | ||||||||||||||||||||||||||||||||
Henning | Prof. Dr. | |||||||||||||||||||||||||||||||
Kagermann | Léo | Dr. Werner | Claus E. | Gerhard | Dr. Peter | |||||||||||||||||||||||||||
(CEO) | Shai Agassi | Apotheker | Brandt | Heinrich | Oswald | Zencke | Total | |||||||||||||||||||||||||
€(000) | ||||||||||||||||||||||||||||||||
PBO January 1, 2006 | 5,592.1 | 172.0 | 462.1 | 529.4 | 3,252.4 | 3,525.8 | 4,127.5 | 17,661.3 | ||||||||||||||||||||||||
Less plan assets market value January 1, 2006 | 3,952.4 | 113.6 | 579.1 | 313.8 | 1,512.3 | 1,732.5 | 2,559.7 | 10,763.4 | ||||||||||||||||||||||||
Accrued January 1, 2006 | 1,639.7 | 58.4 | (117.0 | ) | 215.6 | 1,740.1 | 1,793.3 | 1,567.8 | 6,897.9 | |||||||||||||||||||||||
PBO change in 2006 | (257.4 | ) | 184.8 | (16.7 | ) | 63.9 | (237.1 | ) | (241.5 | ) | (251.6 | ) | (755.6 | ) | ||||||||||||||||||
Plan assets change in 2006 | 630.1 | 132.8 | 24.3 | 94.4 | 251.1 | 282.6 | 387.3 | 1,802.6 | ||||||||||||||||||||||||
PBO December 31, 2006 | 5,334.7 | 356.8 | 445.4 | 593.3 | 3,015.3 | 3,284.3 | 3,875.9 | 16,905.7 | ||||||||||||||||||||||||
Less plan assets market value December 31, 2006 | 4,582.5 | 246.4 | 603.4 | 408.2 | 1,763.4 | 2,015.1 | 2,947.0 | 12,566.0 | ||||||||||||||||||||||||
Accrued December 31, 2006 | 752.2 | 110.4 | (158.0 | ) | 185.1 | 1,251.9 | 1,269.2 | 928.9 | 4,339.7 | |||||||||||||||||||||||
PBO change in 2007 | 530.5 | (320.9 | ) | (22.9 | ) | 20.4 | (284.4 | ) | (269.5 | ) | (228.4 | ) | (575.2 | ) | ||||||||||||||||||
Plan assets change in 2007 | 645.5 | (199.0 | ) | 27.0 | 102.5 | 265.3 | 301.3 | 407.9 | 1,550.5 | |||||||||||||||||||||||
PBO December 31, 2007 | 5,865.2 | 35.9 | 422.5 | 613.7 | 2,730.9 | 3,014.8 | 3,647.5 | 16,330.5 | ||||||||||||||||||||||||
Less plan assets market value December 31, 2007 | 5,228.0 | 47.4 | 630.4 | 510.7 | 2,028.7 | 2,316.4 | 3,354.9 | 14,116.5 | ||||||||||||||||||||||||
Accrued December 31, 2007 | 637.2 | (11.5 | ) | (207.9 | ) | 103.0 | 702.2 | 698.4 | 292.6 | 2,214.0 | ||||||||||||||||||||||
76
Table of Contents
Vested on | Vested on | |||||||
December 31, | December 31, | |||||||
2007 | 2006 | |||||||
€(000) | ||||||||
Prof. Dr. Henning Kagermann (CEO) | 322.7 | * | 289.8 | |||||
Shai Agassi | 13.2 | 13.5 | ||||||
Léo Apotheker | 45.5 | 45.5 | ||||||
Dr. Werner Brandt | 41.0 | 34.4 | ||||||
Prof. Dr. Claus E. Heinrich | 175.2 | 165.5 | ||||||
Gerhard Oswald | 192.8 | 184.6 | ||||||
Dr. Peter Zencke | 216.9 | 207.2 |
* | Due to the extension of Henning Kagermann’s contract beyond his 60th birthday, this value represents the retirement pension entitlement that he would receive after his current Executive Board contract expires on May 31, 2009, based on the entitlements vested on December 31, 2007. |
77
Table of Contents
Holding on | ||||||||||||||||
December 31, | Fair Value of | |||||||||||||||
2007 | Fair Value of | Unit on | Accrual on | |||||||||||||
Quantity of | Unit at Time of | December 31, | December 31, | |||||||||||||
Options | Grant | 2007 | 2007 | |||||||||||||
€ | € | €(000) | ||||||||||||||
Prof. Dr. Henning Kagermann (CEO) | 118,637 | 8.00 | 8.53 | 379.5 | ||||||||||||
Léo Apotheker | 79,093 | 8.00 | 8.53 | 253.0 | ||||||||||||
Dr. Werner Brandt | 72,216 | 8.00 | 8.53 | 231.0 | ||||||||||||
Prof. Dr. Claus E. Heinrich | 72,216 | 8.00 | 8.53 | 231.0 | ||||||||||||
Gerhard Oswald | 72,216 | 8.00 | 8.53 | 231.0 | ||||||||||||
Dr. Peter Zencke | 72,216 | 8.00 | 8.53 | 231.0 | ||||||||||||
Total | 486,594 | 1,556.5 | ||||||||||||||
• | If market capitalization does not increase by 50% or more, the Executive Board will not receive a payout. | |
• | If market capitalization increases by more than 50% but less than 100%, target achievement will be measured progressively. | |
• | If SAP’s market capitalization increases not less than twofold during the said period, the Executive Board will receive a payout of €100 million. |
78
Table of Contents
Original | ||||||||||||||||
Quantity | Fair Value of | |||||||||||||||
Granted | Fair Value of | Unit on | Accrual on | |||||||||||||
Number of | Unit at Time of | December 31, | December 31, | |||||||||||||
Rights | Grant | 2007 | 2007 | |||||||||||||
€ | € | €(000) | ||||||||||||||
Prof. Dr. Henning Kagermann (CEO) | 188,182 | 24.87 | 8.06 | 575.3 | ||||||||||||
Shai Agassi | 125,455 | * | 24.87 | 8.06 | 0.0 | |||||||||||
Léo Apotheker | 125,455 | 24.87 | 8.06 | 383.5 | ||||||||||||
Dr. Werner Brandt | 62,727 | 24.87 | 8.06 | 191.8 | ||||||||||||
Prof. Dr. Claus E. Heinrich | 62,727 | 24.87 | 8.06 | 191.8 | ||||||||||||
Gerhard Oswald | 62,727 | 24.87 | 8.06 | 191.8 | ||||||||||||
Dr. Peter Zencke | 62,727 | 24.87 | 8.06 | 191.8 | ||||||||||||
Total | 690,000 | 1,726.0 | ||||||||||||||
* | The rights expired in the reporting period. |
79
Table of Contents
Rights | ||||||||||||||||||||||||||||
Holding on | Exercised | Holding on | ||||||||||||||||||||||||||
January 1, 2007 | in 2007 | December 31, 2007 | ||||||||||||||||||||||||||
Exercise | Remaining | Price on | Remaining | |||||||||||||||||||||||||
Price per | Quantity | Term in | Quantity of | Exercise | Quantity of | Term in | ||||||||||||||||||||||
Share | of Shares | Years | Shares | Day | Shares | Years | ||||||||||||||||||||||
€ | € | |||||||||||||||||||||||||||
Prof. Dr. Henning Kagermann (CEO) | 22.59 | 320,000 | 1.16 | 320,000 | 38.7071 | — | — | |||||||||||||||||||||
37.50 | 200,000 | 2.13 | — | 200,000 | 1.13 | |||||||||||||||||||||||
33.55 | 267,820 | 3.11 | — | 267,820 | 2.11 | |||||||||||||||||||||||
46.48 | 143,404 | (2) | 4.10 | — | 143,404 | 3.10 | ||||||||||||||||||||||
Shai Agassi(1) | 22.59 | 120,000 | 1.16 | 120,000 | 36.805 | — | — | |||||||||||||||||||||
24.78 | 120,000 | 1.33 | 120,000 | 36.805 | — | — | ||||||||||||||||||||||
37.50 | 112,000 | 2.13 | — | 112,000 | 1.13 | |||||||||||||||||||||||
33.55 | 149,980 | 3.11 | — | 149,980 | 1.33 | |||||||||||||||||||||||
46.48 | 95,604 | (2) | 4.10 | — | 95,604 | 1.33 | ||||||||||||||||||||||
Léo Apotheker | 37.50 | 112,000 | 2.13 | — | 112,000 | 1.13 | ||||||||||||||||||||||
33.55 | 149,980 | 3.11 | — | 149,980 | 2.11 | |||||||||||||||||||||||
46.48 | 95,604 | (2) | 4.10 | — | 95,604 | 3.10 | ||||||||||||||||||||||
Dr. Werner Brandt | 37.50 | 112,000 | 2.13 | — | 112,000 | 1.13 | ||||||||||||||||||||||
33.55 | 149,980 | 3.11 | — | 149,980 | 2.11 | |||||||||||||||||||||||
46.48 | 87,292 | (2) | 4.10 | — | 87,292 | 3.10 | ||||||||||||||||||||||
Prof. Dr. Claus E. Heinrich | 22.59 | 180,000 | 1.16 | 180,000 | 38.7071 | — | — | |||||||||||||||||||||
37.50 | 112,000 | 2.13 | — | 112,000 | 1.13 | |||||||||||||||||||||||
33.55 | 149,980 | 3.11 | — | 149,980 | 2.11 | |||||||||||||||||||||||
46.48 | 87,292 | (2) | 4.10 | — | 87,292 | 3.10 | ||||||||||||||||||||||
Gerhard Oswald | 33.55 | 149,980 | 3.11 | — | 149,980 | 2.11 | ||||||||||||||||||||||
46.48 | 87,292 | (2) | 4.10 | — | 87,292 | 3.10 | ||||||||||||||||||||||
Dr. Peter Zencke | 22.59 | 180,000 | 1.16 | 180,000 | 38.7071 | — | — | |||||||||||||||||||||
37.50 | 112,000 | 2.13 | — | 112,000 | 1.13 | |||||||||||||||||||||||
33.55 | 149,980 | 3.11 | — | 149,980 | 2.11 | |||||||||||||||||||||||
46.48 | 87,292 | (2) | 4.10 | — | 87,292 | 3.10 | ||||||||||||||||||||||
Total | 3,531,480 | 920,000 | 2,611,480 | |||||||||||||||||||||||||
(1) | Shai Agassi can exercise his outstanding stock options under SAP SOP 2002 within the agreed two-year grace period in accordance with the applicable plan terms. The rights exercised in 2007 were exercised by Shai Agassi after he left the Executive Board. | |
(2) | These rights could not be exercised on December 31, 2007. |
80
Table of Contents
Rights | ||||||||||||||||||||||||||||
Holding on | Exercised in | Holding on December 31, | ||||||||||||||||||||||||||
January 1, 2007 | 2007 | 2007 | ||||||||||||||||||||||||||
Exercise | Remaining | Price on | Remaining | |||||||||||||||||||||||||
Price per | Quantity | Term in | Quantity of | Exercise | Quantity of | Term in | ||||||||||||||||||||||
Share | of Shares | Years | Shares | Day* | Shares | Years | ||||||||||||||||||||||
€ | € | |||||||||||||||||||||||||||
Prof. Dr. Henning Kagermann (CEO) | 20.09 | 112,128 | 3.14 | — | — | 112,128 | 2.14 | |||||||||||||||||||||
24.41 | 157,500 | 4.14 | — | — | 157,500 | 3.14 | ||||||||||||||||||||||
Léo Apotheker | 30.16 | 87,500 | 5.14 | — | — | 87,500 | 4.14 | |||||||||||||||||||||
Dr. Peter Zencke | 20.09 | 27,924 | 3.14 | — | — | 27,924 | 2.14 | |||||||||||||||||||||
24.41 | 73,700 | 4.14 | — | — | 73,700 | 3.14 | ||||||||||||||||||||||
Total | 458,752 | 458,752 | ||||||||||||||||||||||||||
* | In 2007, no stock options under the LTI Plan were exercised. Therefore, the exercise price is not given here because it is variable and is only calculated on the exercise day. |
81
Table of Contents
Holding on | Rights | Holding on December 31, | ||||||||||||||||||||||||||
January 1, 2007 | Exercised in | 2007 | ||||||||||||||||||||||||||
Exercise | Remaining | 2007 | Price on | Remaining | ||||||||||||||||||||||||
Price per | Quantity | Term | Quantity of | Exercise | Quantity | Term | ||||||||||||||||||||||
Share | of Shares | in Years | Shares | Day | of Shares | in Years | ||||||||||||||||||||||
€ | € | |||||||||||||||||||||||||||
Prof. Dr. Henning Kagermann (CEO) | 72.58 | 89,700 | 3.14 | — | 89,700 | 2.14 | ||||||||||||||||||||||
47.81 | 126,000 | 4.14 | — | 126,000 | 3.14 | |||||||||||||||||||||||
37.88 | 360,000 | 5.14 | — | 360,000 | 4.14 | |||||||||||||||||||||||
Léo Apotheker | 83.67 | 95,400 | 3.19 | — | 95,400 | 2.19 | ||||||||||||||||||||||
47.81 | 120,000 | 4.14 | — | 120,000 | 3.14 | |||||||||||||||||||||||
37.88 | 70,000 | 5.14 | — | 70,000 | 4.14 | |||||||||||||||||||||||
Dr. Werner Brandt | 47.81 | 20,000 | 4.14 | — | 20,000 | 3.14 | ||||||||||||||||||||||
37.88 | 120,000 | 5.14 | — | 120,000 | 4.14 | |||||||||||||||||||||||
Prof. Dr. Claus E. Heinrich | 72.58 | 65,700 | 3.14 | — | 65,700 | 2.14 | ||||||||||||||||||||||
47.81 | 88,000 | 4.14 | — | 88,000 | 3.14 | |||||||||||||||||||||||
37.88 | 200,000 | 5.14 | — | 200,000 | 4.14 | |||||||||||||||||||||||
Gerhard Oswald | 72.58 | 65,700 | 3.14 | — | 65,700 | 2.14 | ||||||||||||||||||||||
47.81 | 88,000 | 4.14 | — | 88,000 | 3.14 | |||||||||||||||||||||||
Dr. Peter Zencke | 72.58 | 65,700 | 3.14 | — | 65,700 | 2.14 | ||||||||||||||||||||||
47.81 | 88,000 | 4.14 | 88,000 | 3.14 | ||||||||||||||||||||||||
37.88 | 200,000 | 5.14 | — | 200,000 | 4.14 | |||||||||||||||||||||||
Total | 1,862,200 | 1,862,200 | ||||||||||||||||||||||||||
2007 | 2006 | |||||||
€(000) | ||||||||
Prof. Dr. Henning Kagermann (CEO) | 1,047.5 | 1,699.1 | ||||||
Shai Agassi | 85.8 | 1,045.8 | ||||||
Léo Apotheker | 690.3 | 1,045.8 | ||||||
Dr. Werner Brandt | 601.4 | 868.6 | ||||||
Prof. Dr. Claus E. Heinrich | 601.4 | 868.6 | ||||||
Gerhard Oswald | 601.4 | 868.6 | ||||||
Dr. Peter Zencke | 601.4 | 868.6 | ||||||
Total | 4,229.2 | 7,265.1 | ||||||
82
Table of Contents
Transaction in SAP Shares | ||||||||||||
Transaction Date | Transaction | Quantity | Unit Price € | |||||||||
Léo Apotheker | April 23, 2007 | Stock sale | 120,000 | 38.5188 | ||||||||
October 19, 2007 | Stock purchase | 1,000 | 38.09 | |||||||||
Dr. Werner Brandt | February 5, 2007 | Stock purchase | 2,000 | 35.58 | ||||||||
October 18, 2007 | Stock purchase | 1,000 | 38.20 | |||||||||
Prof. Dr. Claus E. Heinrich | August 15, 2007 | Stock sale | 180,000 | 38.7071 | ||||||||
Prof. Dr. Henning Kagermann | August 15, 2007 | Stock sale | 292,069 | 38.7071 | ||||||||
August 15, 2007 | Stock purchase* | 27,931 | 22.5925 | |||||||||
Dr. Peter Zencke | August 15, 2007 | Stock sale | 180,000 | 38.7071 |
* | Shares acquired by exercising SAP SOP 2002 stock options. |
83
Table of Contents
2007 | 2006 | |||||||||||||||||||||||||||||||
Compensation | Compensation | |||||||||||||||||||||||||||||||
Fixed | Variable | for Committee | Fixed | Variable | for Committee | |||||||||||||||||||||||||||
Compensation | Compensation | Work | Total | Compensation | Compensation | Work | Total | |||||||||||||||||||||||||
€(000) | ||||||||||||||||||||||||||||||||
Prof. Dr. h.c. mult. Hasso Plattner (chairperson) | 75.0 | 125.0 | 15.0 | 215.0 | 75.0 | 125.0 | 15.0 | 215.0 | ||||||||||||||||||||||||
Lars Lamadé (deputy chairperson from May 10, 2007) | 49.0 | 80.2 | 2.5 | 131.7 | 37.5 | 62.5 | 2.5 | 102.5 | ||||||||||||||||||||||||
Pekka Ala-Pietilä | 37.5 | 62.5 | 2.5 | 102.5 | 37.5 | 62.5 | 2.5 | 102.5 | ||||||||||||||||||||||||
Thomas Bamberger (from May 10, 2007) | 25.0 | 41.7 | 1.7 | 68.3 | 0.0 | 0.0 | 0.0 | 0.0 | ||||||||||||||||||||||||
Panagiotis Bissiritsas (from May 10, 2007) | 25.0 | 41.7 | 3.3 | 70.0 | 0.0 | 0.0 | 0.0 | 0.0 | ||||||||||||||||||||||||
Willi Burbach | 37.5 | 62.5 | 4.2 | 104.2 | 37.5 | 62.5 | 2.5 | 102.5 | ||||||||||||||||||||||||
Helga Classen (deputy chairperson until May 10, 2007) | 45.8 | 75.0 | 2.5 | 123.3 | 50.0 | 100.0 | 2.5 | 152.5 | ||||||||||||||||||||||||
Prof. Dr. Wilhelm Haarmann | 37.5 | 62.5 | 7.5 | 107.5 | 37.5 | 62.5 | 7.5 | 107.5 | ||||||||||||||||||||||||
Peter Koop (from May 10, 2007) | 25.0 | 41.7 | 1.6 | 68.3 | 0.0 | 0.0 | 0.0 | 0.0 | ||||||||||||||||||||||||
Bernhard Koller (until May 10, 2007) | 15.6 | 26.0 | 1.0 | 42.7 | 37.5 | 62.5 | 2.5 | 102.5 | ||||||||||||||||||||||||
Christiane Kuntz-Mayr (until May 10, 2007) | 15.6 | 26.0 | 2.1 | 43.8 | 37.5 | 62.5 | 5.0 | 105.0 | ||||||||||||||||||||||||
Dr. Gerhard Maier | 37.5 | 62.5 | 5.0 | 105.0 | 37.5 | 62.5 | 5.0 | 105.0 | ||||||||||||||||||||||||
Dr. h.c. Hartmut Mehdorn | 37.5 | 62.5 | 0.0 | 100.0 | 37.5 | 62.5 | 0.0 | 100.0 | ||||||||||||||||||||||||
Prof. Dr.-Ing. Dr. h.c. Dr.-Ing. E.h. Joachim Milberg (from May 10, 2007) | 25.0 | 41.7 | 5.0 | 71.7 | 0.0 | 0.0 | 0.0 | 0.0 | ||||||||||||||||||||||||
Prof. Dr. Dr. h.c. August-Wilhelm Scheer | 37.5 | 62.5 | 7.5 | 107.5 | 37.5 | 62.5 | 7.5 | 107.5 | ||||||||||||||||||||||||
Dr. Barbara Schennerlein (until May 10, 2007) | 15.6 | 26.0 | 1.0 | 42.7 | 37.5 | 62.5 | 2.5 | 102.5 | ||||||||||||||||||||||||
Dr. Erhard Schipporeit | 37.5 | 62.5 | 5.0 | 105.0 | 37.5 | 62.5 | 5.0 | 105.0 | ||||||||||||||||||||||||
Stefan Schulz | 37.5 | 62.5 | 5.0 | 105.0 | 37.5 | 62.5 | 5.0 | 105.0 | ||||||||||||||||||||||||
Dr. Dieter Spöri (until May 10, 2007) | 15.6 | 26.0 | 1.0 | 42.7 | 37.5 | 62.5 | 2.5 | 102.5 | ||||||||||||||||||||||||
Dr. h.c. Klaus Tschira (until May 10, 2007) | 15.6 | 26.0 | 1.0 | 42.7 | 37.5 | 62.5 | 2.5 | 102.5 | ||||||||||||||||||||||||
Prof. Dr.-Ing. Dr.-Ing. E.h. Klaus Wucherer (from May 10, 2007) | 25.0 | 41.7 | 1.7 | 68.3 | 0.0 | 0.0 | 0.0 | 0.0 | ||||||||||||||||||||||||
Total | 672.9 | 1,118.8 | 76.3 | 1,867.9 | 650.0 | 1,100.0 | 70.0 | 1,820.0 | ||||||||||||||||||||||||
84
Table of Contents
Transactions in SAP Shares | ||||||||||||||||
Notifying Party | Transaction Date | Transaction | Quantity | Unit Price in € | ||||||||||||
Peter Koop | August 13, 2007 | Stock purchase | 141 | 40.231 | ||||||||||||
Dr. Gerhard Maier | October 30, 2007 | Stock sale | 7,600 | 37.4157 | ||||||||||||
Helga Classen | December 10, 2007 | Stock sale | 7,556 | 35.7999 |
85
Table of Contents
Employees as of December 31, continued operations | ||||||||||||||||||||||||||||||||||||||||||||||||
2007 | 2006 | 2005 | ||||||||||||||||||||||||||||||||||||||||||||||
FTEs | EMEA | Americas | APJ(*) | Total | EMEA | Americas | APJ(*) | Total | EMEA | Americas | APJ(*) | Total | ||||||||||||||||||||||||||||||||||||
Product | 3,022 | 1,002 | 1,807 | 5,831 | 2,840 | 808 | 1,595 | 5,243 | 2,494 | 613 | 1,262 | 4,369 | ||||||||||||||||||||||||||||||||||||
Service | 6,558 | 3,893 | 2,334 | 12,785 | 6,336 | 3,363 | 1,819 | 11,518 | 6,636 | 3,203 | 1,591 | 11,430 | ||||||||||||||||||||||||||||||||||||
Development | 7,787 | 1,749 | 3,415 | 12,951 | 7,507 | 1,530 | 2,764 | 11,801 | 7,063 | 1,151 | 2,001 | 10,215 | ||||||||||||||||||||||||||||||||||||
Sales & Marketing | 3,688 | 3,129 | 1,465 | 8,282 | 3,330 | 2,604 | 1,116 | 7,050 | 3,302 | 2,189 | 934 | 6,425 | ||||||||||||||||||||||||||||||||||||
General & Administration | 1,810 | 571 | 416 | 2,797 | 1,613 | 523 | 336 | 2,472 | 1,504 | 470 | 286 | 2,260 | ||||||||||||||||||||||||||||||||||||
Infrastructure | 789 | 285 | 141 | 1,215 | 713 | 281 | 120 | 1,114 | 715 | 256 | 108 | 1,079 | ||||||||||||||||||||||||||||||||||||
SAP Group | 23,654 | 10,629 | 9,578 | 43,861 | 22,339 | 9,109 | 7,750 | 39,198 | 21,714 | 7,882 | 6,182 | 35,778 | ||||||||||||||||||||||||||||||||||||
(*) | Asia Pacific Japan |
86
Table of Contents
87
Table of Contents
88
Table of Contents
89
Table of Contents
90
Table of Contents
Ordinary Shares | ||||||||
Beneficially Owned | ||||||||
% of | ||||||||
Major Shareholders | Number | Outstanding | ||||||
Dietmar Hopp Stiftung GmbH | 109,869,200 | 8.814 | % | |||||
DH Besitzgesellschaft mbH & Co. KG | 6,404,000 | 0.514 | % | |||||
Dietmar Hopp, collectively(1) | 116,273,200 | 9.327 | % | |||||
Hasso Plattner GmbH & Co. Beteiligungs-KG(2) | 113,718,960 | 8.122 | % | |||||
Hasso Plattner Förderstiftung GmbH | 15,244,922 | 1.223 | % | |||||
Hasso Plattner (24,100 ADRs) | 24,100 | 0.002 | % | |||||
Hasso Plattner, Chairperson Supervisory Board, collectively(3) | 128,987,982 | 10.347 | % | |||||
Dr. h.c. Klaus Tschira Beteiligungs GmbH & Co. KG | 32,830,640 | 2.634 | % | |||||
Klaus Tschira Stiftung gGmbH | 78,474,048 | 6.295 | % | |||||
Gerda Tschira | 440,000 | 0.035 | % | |||||
Klaus Tschira | 2,738,000 | 0.220 | % | |||||
Klaus Tschira, collectively(4) | 114,482,688 | 9.184 | % | |||||
Executive Board Members as a group (7 persons) | 86,515 | 0.007 | % | |||||
Supervisory Board Members as a group (16 persons) | 128,993,699 | 10.348 | % | |||||
Executive Board Members and Supervisory Board Members as a group (23 persons) | 129,080,214 | 10.355 | % | |||||
Options and convertible bonds that are vested and exercisable within 60 days of March 14, 2008, held by Executive Board Members and Supervisory Board Members, collectively(5) | 1,165,253 | N/A |
(1) | Dietmar Hopp exercises sole voting and dispositive power in Dietmar Hopp Stiftung GmbH and DH Besitzgesellschaft mbH & Co. KG. |
(2) | Hasso Plattner exercises sole voting and dispositive power in Hasso Plattner GmbH & Co. Beteiligungs-KG. |
(3) | Hasso Plattner exercises sole voting and dispositive power in Hasso Plattner GmbH & Co. Beteiligungs-KG and in Hasso Plattner Förderstiftung gGmbH. |
(4) | Klaus Tschira exercises shared voting and dispositive power in Klaus Tschira Stiftung gGmbH and Dr. h.c. Tschira Beteiligungs GmbH & Co. KG. |
(5) | Includes 691,053 stock options and 474,200 convertible bonds. Each of these stock options and convertible bonds entitles the holder, if exercised or converted, to four SAP AG ordinary shares. |
91
Table of Contents
92
Table of Contents
93
Table of Contents
Price per | ||||||||||||||||||||||||
Ordinary Share(1) | DAX(2) | Price per ADS | ||||||||||||||||||||||
High | Low | Low | Low | High | Low | |||||||||||||||||||
In € | In US$ | |||||||||||||||||||||||
Annual Highs and Lows | ||||||||||||||||||||||||
2003 | 33.50 | 16.91 | 3,965.16 | 2,202.96 | 41.80 | 18.46 | ||||||||||||||||||
2004 | 35.68 | 29.03 | 4,261.79 | 3,646.99 | 45.45 | 35.50 | ||||||||||||||||||
2005 | 38.95 | 28.63 | 5,458.58 | 4,178.10 | 46.43 | 36.96 | ||||||||||||||||||
2006 | 46.86 | 34.56 | 6,611.81 | 5,292.14 | 57.00 | 43.57 | ||||||||||||||||||
2007 | 42.27 | 33.37 | 8,105.69 | 6,447.70 | 59.86 | 44.45 | ||||||||||||||||||
Quarterly Highs and Lows | ||||||||||||||||||||||||
2006 | ||||||||||||||||||||||||
First Quarter | 44.75 | 36.50 | 5,984.19 | 5,334.30 | 54.32 | 44.00 | ||||||||||||||||||
Second Quarter | 46.86 | 38.49 | 6,140.72 | 5,292.14 | 57.00 | 48.58 | ||||||||||||||||||
Third Quarter | 41.85 | 34.56 | 6,004.33 | 5,396.85 | 53.42 | 43.57 | ||||||||||||||||||
Fourth Quarter | 41.40 | 38.38 | 6,611.81 | 5,992.22 | 53.12 | 49.04 | ||||||||||||||||||
2007 | ||||||||||||||||||||||||
First Quarter | 42.27 | 33.37 | 7,027.59 | 6,447.70 | 55.71 | 44.45 | ||||||||||||||||||
Second Quarter | 38.15 | 33.65 | 8,090.49 | 6,937.17 | 51.35 | 45.08 | ||||||||||||||||||
Third Quarter | 41.76 | 36.61 | 8,105.69 | 7,270.07 | 58.67 | 49.85 | ||||||||||||||||||
Fourth Quarter | 41.66 | 34.31 | 8,076.12 | 7,511.97 | 59.86 | 50.05 | ||||||||||||||||||
Monthly Highs and Lows | ||||||||||||||||||||||||
2007 | ||||||||||||||||||||||||
July | 41.14 | 36.61 | 8,105.69 | 7,451.68 | 57.20 | 49.85 | ||||||||||||||||||
August | 40.15 | 38.02 | 7,638.17 | 7,270.07 | 55.28 | 51.58 | ||||||||||||||||||
September | 41.76 | 39.29 | 7,861.51 | 7,375.44 | 58.67 | 53.80 | ||||||||||||||||||
October | 41.66 | 37.14 | 8,041.26 | 7,794.94 | 59.86 | 53.36 | ||||||||||||||||||
November | 36.95 | 34.31 | 7,880.85 | 7,511.97 | 53.53 | 50.13 | ||||||||||||||||||
December | 36.46 | 35.25 | 8,076.12 | 7,808.94 | 52.92 | 50.05 | ||||||||||||||||||
2008 | ||||||||||||||||||||||||
January | 34.88 | 29.96 | 7949.11 | 6439.21 | 50.73 | 45.77 | ||||||||||||||||||
February | 33.51 | 31.61 | 7,002.29 | 6,733.72 | 49.44 | 46.35 | ||||||||||||||||||
March (through March 14, 2008) | 32.02 | 31.28 | 6,689.95 | 6,448.08 | 50.20 | 47.87 |
(1) | Share prices for 2006 and prior are retrospectively adjusted for the effect of the fourfold increase in the number of shares resulting from the capital increase which became effective December 15, 2006 (see the immediately preceding section “— General” for more detail of the share increase). |
(2) | The DAX is a continuously updated, capital-weighted performance index of 30 German blue chip companies. In principle, the shares included in the DAX are selected on the basis of their stock exchange turnover and the issuer’s market capitalization. Adjustments to the DAX are made for capital changes, subscription rights and dividends. |
94
Table of Contents
• | developing and marketing integrated product and service solutions fore-commerce; | |
• | developing software for information technology and the licensing of its use to others; | |
• | organization and deployment consulting, as well as user training, fore-commerce and other software solutions; | |
• | selling, leasing, renting and arranging the procurement and provision of all other forms of use of information technology systems and related equipment; and | |
• | making capital investments in enterprises active in the field of information technology to promote the opening and advancement of international markets in the field of information technology. |
95
Table of Contents
96
Table of Contents
97
Table of Contents
98
Table of Contents
99
Table of Contents
100
Table of Contents
• | changing the corporate purpose of the Company set out in the articles of incorporation; | |
• | capital increases and capital decreases; | |
• | excluding preemptive rights of shareholders to subscribe for new shares; | |
• | dissolution; | |
• | a merger into, or a consolidation with, another company; | |
• | a transfer of all or virtually all of the assets; and | |
• | a change of corporate form. |
101
Table of Contents
102
Table of Contents
103
Table of Contents
104
Table of Contents
105
Table of Contents
106
Table of Contents
107
Table of Contents
108
Table of Contents
109
Table of Contents
2007 | 2006 | |||||||||||||||||||||||||||||||
12/31 | High | Low | Yearly average | 12/31 | High | Low | Yearly average | |||||||||||||||||||||||||
€ millions | ||||||||||||||||||||||||||||||||
Value at risk | 12 | 16 | 12 | 14 | 4 | 11 | 4 | 9 |
110
Table of Contents
Fair Value | ||||||||||||||||||||||||||||||||
2007 | Expected Maturity Date | December 31, | ||||||||||||||||||||||||||||||
Marketable debt securities | 2008 | 2009 | 2010 | 2011 | 2012 | Thereafter | Total | 2007 | ||||||||||||||||||||||||
€ millions, unless otherwise indicated | ||||||||||||||||||||||||||||||||
Fixed rate | 332 | 101 | — | — | — | — | 433 | 432 | ||||||||||||||||||||||||
Average interest rate | 4.43 | % | 4.81 | % | — | — | — | — | ||||||||||||||||||||||||
Variable rate | 115 | — | — | — | — | 4 | 119 | 117 | ||||||||||||||||||||||||
Total investments | 447 | 101 | — | — | — | 4 | 552 | 549 | ||||||||||||||||||||||||
Fair Value | ||||||||||||||||||||||||||||||||
2006 | December 31, | |||||||||||||||||||||||||||||||
Marketable debt securities | 2007 | 2008 | 2009 | 2010 | 2011 | Thereafter | Total | 2006 | ||||||||||||||||||||||||
€ millions, unless otherwise indicated | ||||||||||||||||||||||||||||||||
Fixed rate | 341 | 434 | — | — | — | — | 775 | 699 | ||||||||||||||||||||||||
Average interest rate | 4.16 | % | 4.58 | % | — | — | — | — | ||||||||||||||||||||||||
Variable rate | — | 16 | — | — | — | — | 16 | 17 | ||||||||||||||||||||||||
Total investments | 341 | 450 | — | — | — | — | 791 | 716 | ||||||||||||||||||||||||
Bank loans and overdrafts | 2007 | 2006 | ||||||
Fixed rate bank loans (€ millions) | 17 | 18 | ||||||
Average interest rate of fixed rate bank loans | 8.03 | % | 8.08 | % | ||||
Overdrafts (€ millions) | 10 | 8 | ||||||
Total bank loans and overdrafts (€ millions) | 27 | 26 | ||||||
111
Table of Contents
112
Table of Contents
113
Table of Contents
114
Table of Contents
Aktiengesellschaft Wirtschaftsprüfungsgesellschaft
115
Table of Contents
1. | “Prohibited services:” This category includes services that our independent auditors must not be engaged to perform. These are services that are not permitted by applicable law or that would be inconsistent with maintaining the auditors’ independence. | |
2. | “Services requiring universal approval:” Services of this category may be provided by our independent auditors up to a certain aggregate amount in fees per year that is determined annually by the Audit Committee. | |
3. | “Services requiring individual approval:” Services of this category may only be provided by our independent auditors if they have been individually (specifically) pre-approved by the Audit Committee or an Audit Committee member who is authorized by the Audit Committee to make such approvals. |
116
Table of Contents
(b) | (c) | (d) | ||||||||||||||
(a) | Average | Total Number of Shares | Maximum Number of | |||||||||||||
Total Number | Price Paid | Purchased as Part of | Shares that May Yet | |||||||||||||
of Shares | per Share | Publicly Announced | Be Purchased Under | |||||||||||||
Period | Purchased | (in €) | Plans or Programs | the Plans or Programs | ||||||||||||
January 1/1/07 — 1/31/07 | 1,585,000 | 36.21 | 1,585,000 | 75,987,136 | ||||||||||||
February 2/1/07 — 2/28/07 | 4,115,500 | 35.48 | 4,115,500 | 72,019,941 | ||||||||||||
March 3/1/07 — 3/31/07 | 3,939,140 | 34.40 | 3,939,140 | 68,478,033 | ||||||||||||
April 4/1/07 — 4/30/07 | 6,000 | 33.27 | 6,000 | 68,516,784 | ||||||||||||
May 5/1/07 — 5/31/07 | 1,695,284 | 35.39 | 1,695,284 | 66,894,112 | ||||||||||||
June 6/1/07 — 6/30/07 | 2,846,960 | 37.35 | 2,846,960 | 64,799,590 | ||||||||||||
July 7/1/07 — 7/31/07 | 760,000 | 39.46 | 760,000 | 65,799,644 | ||||||||||||
August 8/1/07 — 8/31/07 | 2,100,000 | 39.11 | 2,100,000 | 64,348,231 | ||||||||||||
September 9/1/07 — 9/30/07 | 3,345,293 | 41.24 | 3,345,293 | 82,409,125 | ||||||||||||
October 10/1/07 — 10/31/07 | 2,639,800 | 37.52 | 2,639,800 | 80,073,886 | ||||||||||||
November 11/1/07 — 11/30/07 | 1,682,217 | 34.90 | 1,682,217 | 78,602,385 | ||||||||||||
December 12/1/07 — 12/31/07 | 2,551,045 | 35.83 | 2,551,045 | 76,561,012 | ||||||||||||
Total | 27,266,239 | 36.85 | 27,266,239 | |||||||||||||
117
Table of Contents
• | Report of Independent Registered Public Accounting Firm. | |
• | Consolidated Statements of Income for the years ended 2007, 2006 and 2005. | |
• | Consolidated Balance Sheets as of December 31, 2007 and 2006. | |
• | Consolidated Statements of Shareholders’ Equity for the years ended December 31, 2007, 2006 and 2005. | |
• | Consolidated Statements of Comprehensive Income for the years ended December 31, 2007, 2006 and 2005. | |
• | Consolidated Statements of Cash Flows for the years ended December 31, 2007, 2006 and 2005. | |
• | Notes to Consolidated Financial Statements. |
1 | Articles of Incorporation (Satzung) of SAP AG, as amended to date (English translation).(1) | |||
2 | .1 | Form of global share certificate for ordinary shares (English translation).(1) | ||
2 | .2 | Form of American Depositary Receipt.(2) | ||
4 | .1 | Form of Amended and Restated Deposit Agreement among SAP AG, Deutsche Bank Trust Company Americas, as Depositary, and all owners and holders from time to time of American Depositary Receipts issued thereunder, including the form of American Depositary Receipts, dated as of December 3, 2004.(3) | ||
4 | .2 | Amendment No. 1 dated as of December 20, 2006 to Amended and Restated Deposit Agreement among SAP AG, Deutsche Bank Trust Company Americas, as Depository, and all owners and holders from time to time of American Depositary Receipts issued thereunder, including the form of American Depositary Receipts.(2) | ||
4 | .3 | Tender Offer Agreement dated as of October 7, 2007 between SAP AG and Business Objects S.A.(4) | ||
4 | .3.1 | Assignment and Assumption Agreement dated as of October 22, 2007 between SAP AG and SAP France S.A.(4) | ||
4 | .4 | Amendment and Restatement Agreement relating to the €5,000,000,000 (subsequently reduced to €2,947,679,513.45) Syndicated Multicurrency Term Loan Facility Agreement dated October 1, 2007 by and among SAP AG (Borrower), Deutsche Bank AG, ABN Amro Bank N.V., Niederlassung Deutschland, BNP Paribas S.A., Commerzbank Aktiengesellschaft, J.P. Morgan plc and Sumitomo Mitsui Banking Corporation (Mandated Lead Arrangers), Deutsche Bank AG Paris Branch (Offer Guarantor), Deutsche Bank Luxemburg S.A. (Agent) and Certain Financial Institutions (Lenders). |
118
Table of Contents
4 | .4.1 | Accession Agreement relating to the €5,000,000,000 (subsequently reduced to €2,947,679,513.45) Syndicated Multicurrency Term Loan Facility Agreement dated October 1, 2007 by and among SAP AG (Borrower), Deutsche Bank AG, ABN Amro Bank N.V., Niederlassung Deutscheland, BNP PARIBAS S.A., Commerzbank Aktiengesellschaft, J.P. Morgan plc and Sumitomo Mitsui Banking Corporation (Mandated Lead Arrangers), Deutsche Bank AG Paris Branch (Offer Guarantor), certain financial institutions (Existing Lenders), certain financial institutions (New Lenders), and Deutsche Bank Luxembourg S.A. (Agent). | ||
8 | Subsidiaries, Equity Method Investments, and Other Investments of SAP AG. | |||
12 | .1 | Certification of Chief Executive Officer required by Rule13a-14(a) orRule 15d-14(a). | ||
12 | .2 | Certification of Chief Financial Officer required by Rule13a-14(a) orRule 15d-14(a). | ||
13 | Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |||
15 | Consent of Independent Registered Public Accounting Firm. |
(1) | Incorporated by reference to the Annual Report onForm 20-F of SAP AG filed on March 22, 2006. | |
(2) | Incorporated by reference to Post Effective Amendment No 1 toForm F-6 filed on December 20, 2006. | |
(3) | Incorporated by reference to the Current Report onForm 6-K of SAP AG, filed on December 13, 2004. | |
(4) | Incorporated by reference to the Tender Offer Statement on Schedule TO filed with the SEC by SAP France S.A. on December 4, 2007. |
119
Table of Contents
120
Table of Contents
Page | ||||
Report of Independent Registered Public Accounting Firm | F-1 | |||
Consolidated Financial Statements: | ||||
Consolidated Statements of Income for the years ended December 31, 2007, 2006 and 2005 | F-2 | |||
Consolidated Balance Sheets as of December 31, 2007 and 2006 | F-3 | |||
Consolidated Statements of Shareholders’ Equity for the years ended December 31, 2007, 2006 and 2005 | F-4 | |||
Consolidated Statements of Comprehensive Income for the years ended December 31, 2007, 2006 and 2005 | F-5 | |||
Consolidated Statements of Cash Flows for the years ended December 31, 2007, 2006 and 2005 | F-6 | |||
Notes to Consolidated Financial Statements | F-7 |
Table of Contents
F-1
Table of Contents
Note | 2007(1) | 2007 | 2006 | 2005 | ||||||||||||||||
US$ millions | € millions | € millions | € millions | |||||||||||||||||
Software revenue | 4,975 | 3,407 | 3,003 | 2,743 | ||||||||||||||||
Support revenue | 5,605 | 3,838 | 3,464 | 3,170 | ||||||||||||||||
Subscription and other software-related service revenue | 266 | 182 | 129 | 42 | ||||||||||||||||
Software and software-related service revenue | 10,846 | 7,427 | 6,596 | 5,955 | ||||||||||||||||
Consulting revenue | 3,243 | 2,221 | 2,249 | 2,071 | ||||||||||||||||
Training revenue | 599 | 410 | 383 | 342 | ||||||||||||||||
Other service revenue | 165 | 113 | 96 | 71 | ||||||||||||||||
Professional services and other service revenue | 4,007 | 2,744 | 2,728 | 2,484 | ||||||||||||||||
Other revenue | 104 | 71 | 69 | 70 | ||||||||||||||||
Total revenue | (5 | ) | 14,957 | 10,242 | 9,393 | 8,509 | ||||||||||||||
Cost of software and software-related services | (1,913 | ) | (1,310 | ) | (1,091 | ) | (983 | ) | ||||||||||||
Cost of professional services and other services | (3,053 | ) | (2,091 | ) | (2,073 | ) | (1,925 | ) | ||||||||||||
Research and development | (2,129 | ) | (1,458 | ) | (1,335 | ) | (1,089 | ) | ||||||||||||
Sales and marketing | (6 | ) | (3,157 | ) | (2,162 | ) | (1,908 | ) | (1,746 | ) | ||||||||||
General and administration | (739 | ) | (506 | ) | (464 | ) | (435 | ) | ||||||||||||
Other operating income, net | (7 | ) | 25 | 17 | 56 | 6 | ||||||||||||||
Total operating expenses | (10,966 | ) | (7,510 | ) | (6,815 | ) | (6,172 | ) | ||||||||||||
Operating income | 3,991 | 2,732 | 2,578 | 2,337 | ||||||||||||||||
Other non-operating income/expense, net | (8 | ) | 1 | 1 | (12 | ) | (25 | ) | ||||||||||||
Financial income, net | (9 | ) | 181 | 124 | 122 | 11 | ||||||||||||||
Income from continuing operations before income taxes | 4,173 | 2,857 | 2,688 | 2,323 | ||||||||||||||||
Income taxes | (10 | ) | (1,345 | ) | (921 | ) | (805 | ) | (818 | ) | ||||||||||
Minority interests | (3 | ) | (2 | ) | (2 | ) | (3 | ) | ||||||||||||
Income from continuing operations | 2,825 | 1,934 | 1,881 | 1,502 | ||||||||||||||||
Loss from discontinued operations, net of tax | (11 | ) | (22 | ) | (15 | ) | (10 | ) | (6 | ) | ||||||||||
Net income | 2,803 | 1,919 | 1,871 | 1,496 | ||||||||||||||||
Earnings per share from continuing operations — basic | (12 | ) | US$ | 2.34 | € | 1.60 | € | 1.53 | € | 1.21 | ||||||||||
Earnings per share from continuing operations — diluted | (12 | ) | US$ | 2.34 | € | 1.60 | € | 1.53 | € | 1.21 | ||||||||||
Earnings per share from net income — basic | (12 | ) | US$ | 2.32 | € | 1.59 | € | 1.53 | € | 1.21 | ||||||||||
Earnings per share from net income — diluted | (12 | ) | US$ | 2.32 | € | 1.59 | € | 1.52 | € | 1.20 |
(1) | The 2007 figures have been translated solely for the convenience of the reader at an exchange rate of US$1.4603 to €1.00, the Noon Buying Rate certified by the Federal Reserve Bank of New York on December 31, 2007. |
F-2
Table of Contents
Note | 2007(1) | 2007 | 2006 | |||||||||||||
US$ millions | € millions | € millions | ||||||||||||||
Assets | ||||||||||||||||
Cash and cash equivalents | (13 | ) | 2,348 | 1,608 | 2,399 | |||||||||||
Restricted cash | (13 | ) | 803 | 550 | 0 | |||||||||||
Short-term investments | (13 | ) | 873 | 598 | 931 | |||||||||||
Accounts receivable, net | (14 | ) | 4,228 | 2,895 | 2,440 | |||||||||||
Other assets | (15 | ) | 790 | 541 | 371 | |||||||||||
Deferred income taxes | (10 | ) | 183 | 125 | 108 | |||||||||||
Prepaid expenses/deferred charges | 111 | 76 | 75 | |||||||||||||
Assets held for sale | (11 | ) | 22 | 15 | 0 | |||||||||||
Current assets | 9,358 | 6,408 | 6,324 | |||||||||||||
Goodwill | (16 | ) | 2,078 | 1,423 | 987 | |||||||||||
Intangible assets, net | (16 | ) | 589 | 403 | 263 | |||||||||||
Property, plant, and equipment, net | (17 | ) | 1,922 | 1,316 | 1,206 | |||||||||||
Investments | (13 | ) | 130 | 89 | 95 | |||||||||||
Accounts receivable, net | (14 | ) | 4 | 3 | 3 | |||||||||||
Other assets | (15 | ) | 810 | 555 | 533 | |||||||||||
Deferred income taxes | (10 | ) | 213 | 146 | 69 | |||||||||||
Prepaid expenses/deferred charges | 34 | 23 | 23 | |||||||||||||
Noncurrent assets | 5,780 | 3,958 | 3,179 | |||||||||||||
Total assets | 15,138 | 10,366 | 9,503 | |||||||||||||
Note | 2007(1) | 2007 | 2006 | |||||||||||||
US$ millions | € millions | € millions | ||||||||||||||
Liabilities, Minority interests and Shareholders’ equity | ||||||||||||||||
Accounts payable | (18 | ) | 1,044 | 715 | 610 | |||||||||||
Income tax obligations | 498 | 341 | 261 | |||||||||||||
Other liabilities | (18 | ) | 2,126 | 1,456 | 1,298 | |||||||||||
Provisions | (19 | ) | 225 | 154 | 163 | |||||||||||
Deferred income taxes | (10 | ) | 69 | 47 | 36 | |||||||||||
Deferred income | (5 | ) | 697 | 477 | 405 | |||||||||||
Liabilities held for sale | (11 | ) | 13 | 9 | 0 | |||||||||||
Current liabilities | 4,672 | 3,199 | 2,773 | |||||||||||||
Accounts payable | (18 | ) | 15 | 10 | 34 | |||||||||||
Income tax obligations | 131 | 90 | 67 | |||||||||||||
Other liabilities | (18 | ) | 115 | 79 | 73 | |||||||||||
Provisions | (19 | ) | 539 | 369 | 339 | |||||||||||
Deferred income taxes | (10 | ) | 107 | 73 | 16 | |||||||||||
Deferred income | (5 | ) | 61 | 42 | 55 | |||||||||||
Noncurrent liabilities | 968 | 663 | 584 | |||||||||||||
Total liabilities | 5,640 | 3,862 | 3,357 | |||||||||||||
Minority interests | 1 | 1 | 10 | |||||||||||||
Common stock, no par value | 1,820 | 1,246 | 1,268 | |||||||||||||
Authorized — Not issued or outstanding: 480 million and 495 million shares at December 31, 2007 and 2006 | ||||||||||||||||
Authorized — Issued and outstanding: 1.246 million and 1.268 million shares at December 31, 2007 and 2006 | ||||||||||||||||
Treasury stock | (2,532 | ) | (1,734 | ) | (1,742 | ) | ||||||||||
Additional paid-in capital | 507 | 347 | 332 | |||||||||||||
Retained earnings | 10,454 | 7,159 | 6,589 | |||||||||||||
Accumulated other comprehensive loss | (752 | ) | (515 | ) | (311 | ) | ||||||||||
Shareholders’ equity | (20 | ) | 9,497 | 6,503 | 6,136 | |||||||||||
Total liabilities, Minority interests and Shareholders’ equity | 15,138 | 10,366 | 9,503 | |||||||||||||
(1) | The 2007 figures have been translated solely for the convenience of the reader at an exchange rate of US$1.4603 to €1.00, the Noon Buying Rate certified by the Federal Reserve Bank of New York on December 31, 2007. |
F-3
Table of Contents
Accumulated | ||||||||||||||||||||||||
Additional | other | |||||||||||||||||||||||
Common | paid-in | Retained | comprehensive | Treasury | ||||||||||||||||||||
stock | capital | earnings | income | stock | Total | |||||||||||||||||||
€ millions | ||||||||||||||||||||||||
January 1, 2005 | 316 | 302 | 4,824 | (279 | ) | (569 | ) | 4,594 | ||||||||||||||||
Net income | 0 | 0 | 1,496 | 0 | 0 | 1,496 | ||||||||||||||||||
Other comprehensive income/loss, net of tax | 0 | 0 | 0 | 188 | 0 | 188 | ||||||||||||||||||
Total comprehensive income/loss | 0 | 0 | 1,496 | 188 | 0 | 1,684 | ||||||||||||||||||
Share-based compensation | 0 | (36 | ) | 0 | 0 | 0 | (36 | ) | ||||||||||||||||
Dividends | 0 | 0 | (340 | ) | 0 | 0 | (340 | ) | ||||||||||||||||
Cancellation of treasury stock | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||
Other treasury stock transactions | 0 | 48 | 0 | 0 | (206 | ) | (158 | ) | ||||||||||||||||
Convertible bonds and stock options exercised | 0 | 42 | 0 | 0 | 0 | 42 | ||||||||||||||||||
Other | 0 | (4 | ) | 0 | 0 | 0 | (4 | ) | ||||||||||||||||
December 31, 2005 | 316 | 352 | 5,980 | (91 | ) | (775 | ) | 5,782 | ||||||||||||||||
Net income | 0 | 0 | 1,871 | 0 | 0 | 1,871 | ||||||||||||||||||
Other comprehensive income/loss, net of tax | 0 | 0 | 0 | (220 | ) | 0 | (220 | ) | ||||||||||||||||
Total comprehensive income/loss | 0 | 0 | 1,871 | (220 | ) | 0 | 1,651 | |||||||||||||||||
Share-based compensation | 0 | 18 | 0 | 0 | 0 | 18 | ||||||||||||||||||
Dividends | 0 | 0 | (447 | ) | 0 | 0 | (447 | ) | ||||||||||||||||
Cancellation of treasury stock | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||
Other treasury stock transactions | 0 | 44 | 0 | 0 | (967 | ) | (923 | ) | ||||||||||||||||
Convertible bonds and stock options exercised | 1 | 49 | 0 | 0 | 0 | 50 | ||||||||||||||||||
Issuance of common stock | 951 | (135 | ) | (816 | ) | 0 | 0 | 0 | ||||||||||||||||
Other | 0 | 4 | 1 | 0 | 0 | 5 | ||||||||||||||||||
December 31, 2006 | 1,268 | 332 | 6,589 | (311 | ) | (1,742 | ) | 6,136 | ||||||||||||||||
Net income | 0 | 0 | 1,919 | 0 | 0 | 1,919 | ||||||||||||||||||
Other comprehensive income/loss, net of tax | 0 | 0 | 0 | (204 | ) | 0 | (204 | ) | ||||||||||||||||
Total comprehensive income/loss | 0 | 0 | 1,919 | (204 | ) | 0 | 1,715 | |||||||||||||||||
Share-based compensation | 0 | (40 | ) | 0 | 0 | 0 | (40 | ) | ||||||||||||||||
Dividends | 0 | 0 | (556 | ) | 0 | 0 | (556 | ) | ||||||||||||||||
Cancellation of treasury stock | (23 | ) | 0 | (796 | ) | 0 | 819 | 0 | ||||||||||||||||
Other treasury stock transactions | 0 | 12 | 0 | 0 | (811 | ) | (799 | ) | ||||||||||||||||
Convertible bonds and stock options exercised | 1 | 43 | 0 | 0 | 0 | 44 | ||||||||||||||||||
Other | 0 | 0 | 3 | 0 | 0 | 3 | ||||||||||||||||||
December 31, 2007 | 1,246 | 347 | 7,159 | (515 | ) | (1,734 | ) | 6,503 | ||||||||||||||||
F-4
Table of Contents
2007 | 2006 | 2005 | ||||||||||
€ million, unless otherwise stated | ||||||||||||
Net Income | 1,919 | 1,871 | 1,496 | |||||||||
Currency translation adjustments (tax 2007: 0; 2006: 0; 2005: 0) | (194 | ) | (149 | ) | 121 | |||||||
Unrealized holding gains/losses on marketable securities (tax 2007: 0; 2006: 0; 2005: 1) | (2 | ) | (8 | ) | 2 | |||||||
Reclassification adjustments on marketable securities for gains/losses included in net income (tax 2007: 0; 2006: (1); 2005: 0) | (1 | ) | 2 | 0 | ||||||||
Net unrealized gains/losses on marketable securities | (3 | ) | (6 | ) | 2 | |||||||
Unrecognized pension costs (tax 2007: 1; 2006: 2; 2005: 2) | (1 | ) | (12 | ) | (1 | ) | ||||||
Unrealized foreign currency cash flow hedge gains/losses (tax 2007: (6); 2006: (15); 2005: 11) | 55 | 41 | (30 | ) | ||||||||
Reclassification foreign currency cash flow hedge adjustments for gains included in net income (tax 2007: 4; 2006: 4; 2005: 2) | (43 | ) | (10 | ) | (5 | ) | ||||||
Net unrealized foreign currency cash flow hedge gains/losses | 12 | 31 | (35 | ) | ||||||||
Unrealized gains on STAR hedge (tax 2007: (3); 2006: (13); 2005: (27)) | 10 | 37 | 78 | |||||||||
Reclassification adjustments on STAR hedge for gains included in net income (tax 2007: 9; 2006: 39; 2005: 4) | (28 | ) | (111 | ) | (13 | ) | ||||||
Net unrealized gains/losses on STAR hedge | (18 | ) | (74 | ) | 65 | |||||||
Currency effects from intercompany long-term investment transactions (tax 2007: 0; 2006: 0; 2005: 0) | (5 | ) | (26 | ) | 43 | |||||||
Tax on income and expense recognised directly in equity | 5 | 16 | (7 | ) | ||||||||
Other comprehensive income/loss | (204 | ) | (220 | ) | 188 | |||||||
Total comprehensive income | 1,715 | 1,651 | 1,684 | |||||||||
F-5
Table of Contents
2007(1) | 2007 | 2006 | 2005 | |||||||||||||
US$ millions | € millions | € millions | € millions | |||||||||||||
Net income | 2,803 | 1,919 | 1,871 | 1,496 | ||||||||||||
Net income from discontinued operations | 22 | 15 | 10 | 6 | ||||||||||||
Minority interests | 3 | 2 | 2 | 3 | ||||||||||||
Income from continuing operations before minority interests | 2,828 | 1,936 | 1,883 | 1,505 | ||||||||||||
Adjustments to reconcile income before minority interests to net cash provided by operating activities: | ||||||||||||||||
Depreciation and amortization | 381 | 261 | 214 | 204 | ||||||||||||
Gains/losses from equity investees | 1 | 1 | 1 | (1 | ) | |||||||||||
Gains/losses on disposal of intangible assets and property, plant, and equipment | 1 | 1 | (2 | ) | (5 | ) | ||||||||||
Losses on disposal of investments | (3 | ) | (2 | ) | 0 | (1 | ) | |||||||||
Writeups/downs of financial assets | 12 | 8 | 0 | 14 | ||||||||||||
Allowances for doubtful accounts | 0 | 0 | (40 | ) | (25 | ) | ||||||||||
Impacts of STAR hedging | 31 | 21 | (79 | ) | 7 | |||||||||||
Stock-based compensation including income tax benefits | 19 | 13 | 82 | 50 | ||||||||||||
Excess tax benefit from stock-based compensation | 0 | 0 | (3 | ) | 0 | |||||||||||
Deferred income taxes | 12 | 8 | (2 | ) | (16 | ) | ||||||||||
Change in accounts receivable | (761 | ) | (521 | ) | (230 | ) | (295 | ) | ||||||||
Change in other assets | (470 | ) | (322 | ) | (216 | ) | (63 | ) | ||||||||
Change in accrued and other liabilities | 618 | 423 | 130 | 164 | ||||||||||||
Change in deferred income | 180 | 123 | 117 | 74 | ||||||||||||
Net cash provided by operating activities from continuing operations | 2,849 | 1,950 | 1,855 | 1,612 | ||||||||||||
Acquisition of minority interests in subsidiaries | (70 | ) | (48 | ) | 0 | (60 | ) | |||||||||
Business combinations, net of cash and cash equivalents acquired | (981 | ) | (672 | ) | (504 | ) | (177 | ) | ||||||||
Purchase of intangible assets and property, plant, and equipment | (586 | ) | (401 | ) | (365 | ) | (253 | ) | ||||||||
Proceeds from disposal of intangible assets and property, plant, and equipment | 39 | 27 | 29 | 17 | ||||||||||||
Cash transferred to restricted cash accounts | (803 | ) | (550 | ) | 0 | 0 | ||||||||||
Purchase of investments | (1,122 | ) | (768 | ) | (2,055 | ) | (4,485 | ) | ||||||||
Sales of investments | 1,497 | 1,025 | 2,765 | 4,388 | ||||||||||||
Purchase of other financial assets | (29 | ) | (20 | ) | (17 | ) | (17 | ) | ||||||||
Sales of other financial assets | 22 | 15 | 15 | 13 | ||||||||||||
Net cash used in investing activities from continuing operations | (2,033 | ) | (1,392 | ) | (132 | ) | (574 | ) | ||||||||
Dividends paid | (812 | ) | (556 | ) | (447 | ) | (340 | ) | ||||||||
Purchase of treasury stock | (1,468 | ) | (1,005 | ) | (1,149 | ) | (454 | ) | ||||||||
Proceeds from reissuance of treasury stock | 228 | 156 | 165 | 205 | ||||||||||||
Proceeds from issuance of common stock (stock-based compensation) | 64 | 44 | 49 | 43 | ||||||||||||
Excess tax benefit from stock-based compensation | 0 | 0 | 3 | 0 | ||||||||||||
Repayment of bonds | 0 | 0 | (1 | ) | 0 | |||||||||||
Proceeds from short-term and long-term debt | 69 | 47 | 44 | 338 | ||||||||||||
Repayments of short-term and long-term debt | (70 | ) | (48 | ) | (43 | ) | (339 | ) | ||||||||
Proceeds from the exercise of equity-based derivative instruments (STAR hedge) | 110 | 75 | 57 | 39 | ||||||||||||
Purchase of equity-based derivative instruments (STAR hedge) | 0 | 0 | (53 | ) | (47 | ) | ||||||||||
Net cash used in financing activities from continuing operations | (1,879 | ) | (1,287 | ) | (1,375 | ) | (555 | ) | ||||||||
Effect of foreign exchange rates on cash and cash equivalents | (72 | ) | (49 | ) | (3 | ) | 88 | |||||||||
Net cash used in operating activities from discontinued operations | (18 | ) | (12 | ) | (8 | ) | (4 | ) | ||||||||
Net cash used in investing activities from discontinued operations | (1 | ) | (1 | ) | (2 | ) | (9 | ) | ||||||||
Net cash used in financing activities from discontinued operations | 0 | 0 | 0 | 0 | ||||||||||||
Net cash used in discontinued operations | (19 | ) | (13 | ) | (10 | ) | (13 | ) | ||||||||
Net change in cash and cash equivalents | (1,154 | ) | (791 | ) | 335 | 558 | ||||||||||
Cash and cash equivalents at the beginning of the period | 3,502 | 2,399 | 2,064 | 1,506 | ||||||||||||
Cash and cash equivalents at the end of the period | 2,348 | 1,608 | 2,399 | 2,064 | ||||||||||||
(1) | The 2007 figures have been translated solely for the convenience of the reader at an exchange rate of US$1.4603 to €1.00, the Noon Buying Rate certified by the Federal Reserve Bank of New York on December 31, 2007. |
F-6
Table of Contents
F-7
Table of Contents
(2) | SCOPE OF CONSOLIDATION |
German | Foreign | Total | ||||||||||
12/31/2006 | 21 | 94 | 115 | |||||||||
Additions | 2 | 24 | 26 | |||||||||
Disposals | 0 | (2 | ) | (2 | ) | |||||||
12/31/2007 | 23 | 116 | 139 | |||||||||
(3) | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
F-8
Table of Contents
• | Derivative financial instruments are measured at fair value | |
• | Available for sale financial assets are measured at fair value | |
• | Liabilities for cash-settled share-based payment arrangements are measured at fair value |
F-9
Table of Contents
Closing rate as at | ||||||||||||||||||||||||
December 31, | Annual average exchange rate | |||||||||||||||||||||||
2007 | 2006 | 2007 | 2006 | 2005 | ||||||||||||||||||||
Equivalent to €1 | to €1 | to €1 | to €1 | to €1 | to €1 | |||||||||||||||||||
U.S. dollar | USD | 1.4721 | 1.3170 | 1.3777 | 1.2611 | 1.2360 | ||||||||||||||||||
Pound sterling | GBP | 0.7334 | 0.6715 | 0.6890 | 0.6800 | 0.6827 | ||||||||||||||||||
Japanese yen | JPY | 164.93 | 156.93 | 161.43 | 147.02 | 137.08 | ||||||||||||||||||
Swiss franc | CHF | 1.6547 | 1.6069 | 1.6446 | 1.5757 | 1.5478 | ||||||||||||||||||
Canadian dollar | CAD | 1.4449 | 1.5281 | 1.4623 | 1.4296 | 1.4908 | ||||||||||||||||||
Australian dollar | AUD | 1.6757 | 1.6691 | 1.6368 | 1.6715 | 1.6246 |
F-10
Table of Contents
F-11
Table of Contents
F-12
Table of Contents
F-13
Table of Contents
2005 | ||||
€ millions | ||||
Net Income | ||||
As reported | 1,496 | |||
Add: Expense for share-based compensation, net of tax according to APB 25 | 31 | |||
Deduct: Expense for share-based compensation, net of tax according to SFAS 123 | 138 | |||
Adjusted | 1,389 | |||
Earnings per share (€) | ||||
Basic — as reported | 1.21 | |||
Diluted — as reported | 1.20 | |||
Basic — adjusted | 1.12 | |||
Diluted — adjusted | 1.12 |
F-14
Table of Contents
F-15
Table of Contents
F-16
Table of Contents
Useful lives of property, | ||
plant, and equipment in years | ||
Buildings | 25 to 50 | |
Leasehold improvements | Based on the lease contract | |
Information technology equipment | 3 to 5 | |
Office furniture | 4 to 20 | |
Automobiles | 5 |
F-17
Table of Contents
F-18
Table of Contents
• | Recognized financial assets and financial liabilities unless a special exception applies | |
• | Firm commitments that would otherwise not be recognized at inception and that involve only financial instruments | |
• | Non-financial insurance contracts | |
• | Host financial instruments resulting from separation of an embedded non-financial derivative instrument from a non-financial hybrid instrument |
F-19
Table of Contents
Acquired Businesses | Sector | Acquired business | Acquisition date | |||
Pilot Software Inc., Mountain View, CA (USA) | Privately held provider of strategy management software | 100% of shares | 02/14/2007 | |||
Wicom Communication Ltd, Espoo (Finland) | Privately held provider of all-IP contact center and enterprise communications software | 100% of shares | 05/07/2007 | |||
MaXware AS, Lysaker (Norway) | Privately held provider of identity management software | 100% of shares | 05/21/2007 | |||
OutlookSoft Corp., Stamford, CT (USA) | Privately held provider of integrated planning, budgeting, forecasting and consolidation software | 100% of shares | 6/1/2007 | |||
YASU Technologies Private Ltd., India | Privately held leader in business rules management systems | Asset purchase | 10/18/2007 | |||
Arabian Company for Systems, Applications and Products in Data Processing Ltd., Jeddah, Kingdom of Saudi Arabia | Privately held exclusive reseller of SAP software in the Arab region | Asset purchase | 10/31/2007 | |||
Silk Europe N.V., Belgium | Privately held reseller of OutlookSoft software in Belgium and Netherlands | 100% of shares | 11/28/2007 |
F-20
Table of Contents
Estimated useful | ||||||||
€ millions | lives (years) | |||||||
Customer contracts | 51 | 4 to 12 | ||||||
Intellectual property | 82 | 5 to 10 | ||||||
Distribution right | 37 | 6 | ||||||
Tradename | 4 | 1 to 2 | ||||||
In-process research and development | 1 | Expensed at the acquisition date | ||||||
Total | 175 | |||||||
F-21
Table of Contents
Estimated useful | ||||||||
€ millions | lives (years) | |||||||
Customer contracts | 17 | 2 to 11 | ||||||
Intellectual property | 118 | 5 to 10 | ||||||
In-process research and development | 2 | Expensed at the acquisition date | ||||||
Total | 137 | |||||||
F-22
Table of Contents
F-23
Table of Contents
2007 | 2006 | 2005 | ||||||||||
€ millions | ||||||||||||
Purchased services | 862 | 879 | 828 | |||||||||
Raw materials and supplies, purchased goods | 37 | 32 | 30 | |||||||||
899 | 911 | 858 | ||||||||||
2007 | 2006 | 2005 | ||||||||||
€ millions | ||||||||||||
Salaries | 3,603 | 3,277 | 2,877 | |||||||||
Social security costs | 449 | 416 | 379 | |||||||||
Pension expense | 122 | 125 | 109 | |||||||||
4,174 | 3,818 | 3,365 | ||||||||||
Full-time equivalents | 2007 | 2006 | 2005 | |||||||||
Employees from continuing operations | 42,129 | 37,919 | 34,483 | |||||||||
from discontinued operations | 173 | 134 | 67 |
(€1 million), and tax (€9 million), which have not been recorded as at December 31, 2007 because the conditions required to obtain them are not yet reasonably assured of being achieved.
F-24
Table of Contents
(7) | OTHER OPERATING INCOME, NET |
2007 | 2006 | 2005 | ||||||||||
€ millions | ||||||||||||
Bad debt expense | 0 | 0 | (3 | ) | ||||||||
Restructuring costs — severance obligations | 0 | (1 | ) | (1 | ) | |||||||
Restructuring costs — unused lease space | 0 | 0 | (1 | ) | ||||||||
Miscellaneous other operating expenses | (1 | ) | 0 | (3 | ) | |||||||
Other operating expense | (1 | ) | (1 | ) | (8 | ) | ||||||
Bad debt income | 3 | 43 | 0 | |||||||||
Rental income | 5 | 5 | 7 | |||||||||
Receipt of insurance proceeds | 3 | 2 | 1 | |||||||||
Miscellaneous other operating income | 7 | 7 | 6 | |||||||||
Other operating income | 18 | 57 | 14 | |||||||||
17 | 56 | 6 | ||||||||||
(8) | OTHER NON-OPERATING INCOME/EXPENSE, NET |
2007 | 2006 | 2005 | ||||||||||
€ millions | ||||||||||||
Foreign currency losses | (379 | ) | (255 | ) | (117 | ) | ||||||
Other non-operating expenses | (16 | ) | (20 | ) | (19 | ) | ||||||
Total other non-operating expenses | (395 | ) | (275 | ) | (136 | ) | ||||||
Foreign currency gains | 385 | 251 | 78 | |||||||||
Other non-operating income | 11 | 12 | 33 | |||||||||
Total other non-operating income | 396 | 263 | 111 | |||||||||
Other non-operating income/expense, net | 1 | (12 | ) | (25 | ) | |||||||
F-25
Table of Contents
(9) | FINANCIAL INCOME, NET |
2007 | 2006 | 2005 | ||||||||||
€ millions | ||||||||||||
Interest and similar income | 142 | 124 | 94 | |||||||||
Interest and similar expenses | (7 | ) | (4 | ) | (4 | ) | ||||||
Income from securities, net | 240 | 154 | 63 | |||||||||
Expenses from other financial assets and loans | (244 | ) | (157 | ) | (74 | ) | ||||||
Gains/losses on STAR hedge | 0 | 7 | (66 | ) | ||||||||
Loss from other investments | (6 | ) | (1 | ) | (3 | ) | ||||||
Other financial income/expense, net | (10 | ) | 3 | (80 | ) | |||||||
Share of loss/gain of associates accounted for using the equity method | (1 | ) | (1 | ) | 1 | |||||||
Financial income, net | 124 | 122 | 11 | |||||||||
(10) | INCOME TAXES |
2007 | 2006 | 2005 | ||||||||||
€ millions | ||||||||||||
Current taxes — Germany | 498 | 426 | 515 | |||||||||
Current taxes — Foreign | 416 | 381 | 319 | |||||||||
914 | 807 | 834 | ||||||||||
Deferred taxes — Germany | 33 | 0 | 15 | |||||||||
Deferred taxes — Foreign | (26 | ) | (2 | ) | (31 | ) | ||||||
7 | (2 | ) | (16 | ) | ||||||||
Income tax expense | 921 | 805 | 818 | |||||||||
F-26
Table of Contents
2007 | 2006 | 2005 | ||||||||||
€ millions | ||||||||||||
Germany | 1,639 | 1,519 | 1,455 | |||||||||
Foreign | 1,218 | 1,169 | 868 | |||||||||
2,857 | 2,688 | 2,323 | ||||||||||
2007 | 2006 | 2005 | ||||||||||
€ millions | ||||||||||||
Income from continuing operations before income taxes | 2,857 | 2,688 | 2,323 | |||||||||
Expected income taxes 35.49% in 2007 (35.66% in 2006, 36.32% in 2005) | 1,014 | 958 | 844 | |||||||||
Foreign tax rate differential | (47 | ) | (26 | ) | (6 | ) | ||||||
Tax effect on non-deductible expenses | 49 | 23 | 19 | |||||||||
Prior year taxes | (18 | ) | (80 | ) | (6 | ) | ||||||
Tax effect on tax exempt income | (77 | ) | (72 | ) | (40 | ) | ||||||
Other | 0 | 2 | 7 | |||||||||
Actual income tax expense | 921 | 805 | 818 | |||||||||
2007 | 2006 | |||||||
€ millions | ||||||||
Deferred tax assets | ||||||||
Intangible assets, net | 58 | 15 | ||||||
Property, plant, and equipment, net | 7 | 8 | ||||||
Financial assets | 39 | 24 | ||||||
Receivables | 15 | 12 | ||||||
Net operating loss carryforwards | 18 | 9 | ||||||
Pension provisions | 39 | 45 | ||||||
Share-based compensation | 23 | 34 | ||||||
Other provisions | 109 | 122 | ||||||
Deferred income | 31 | 33 | ||||||
Other | 29 | 4 | ||||||
368 | 306 | |||||||
Less: Valuation allowance | (8 | ) | (10 | ) | ||||
Deferred tax assets | 360 | 296 | ||||||
F-27
Table of Contents
2007 | 2006 | |||||||
€ millions | ||||||||
Deferred tax liabilities | ||||||||
Intangible assets, net | 55 | 37 | ||||||
Property, plant, and equipment, net | 31 | 24 | ||||||
Financial assets | 54 | 23 | ||||||
Receivables | 14 | 34 | ||||||
Pension provisions | 27 | 17 | ||||||
Share-based compensation | 2 | 7 | ||||||
Other provisions | 6 | 5 | ||||||
Deferred income | 3 | 5 | ||||||
Other | 17 | 19 | ||||||
Deferred tax liabilities | 209 | 171 | ||||||
Deferred tax assets, net | 151 | 125 | ||||||
F-28
Table of Contents
2007 | 2006 | 2005 | ||||||||||
€ millions | ||||||||||||
Income tax | 921 | 805 | 818 | |||||||||
Income tax from discontinued operations | (7 | ) | (4 | ) | (1 | ) | ||||||
Income tax recognized in Additional paid in capital related to share-based compensation | 0 | (11 | ) | (23 | ) | |||||||
Income tax recognized in other comprehensive income/loss | (5 | ) | (16 | ) | 7 | |||||||
909 | 774 | 801 | ||||||||||
2007 | ||||
€ millions | ||||
Unrecognized income tax benefits on 1/1/2007 | 72 | |||
Additions related to the current year | 8 | |||
Additions related to prior year | 18 | |||
Settlements with tax authorities | 0 | |||
Exchange rate differences | (2 | ) | ||
Unrecognized income tax benefits on 12/31/2007 | 96 | |||
F-29
Table of Contents
2007 | 2006 | 2005 | ||||||||||
€ millions | ||||||||||||
Total revenue | 14 | 9 | 3 | |||||||||
Total operating expense | (36 | ) | (23 | ) | (10 | ) | ||||||
Operating loss before taxes | (22 | ) | (14 | ) | (7 | ) | ||||||
Income taxes | 7 | 4 | 1 | |||||||||
Net loss from discontinued operations | (15 | ) | (10 | ) | (6 | ) | ||||||
2007 | ||||
€ millions | ||||
Accounts receivable, net | 2 | |||
Other assets | 4 | |||
Current assets | 6 | |||
Goodwill | 7 | |||
Property, plant, and equipment, net | 1 | |||
Other assets | 1 | |||
Noncurrent assets | 9 | |||
Total Assets held for sale | 15 | |||
Accounts payable | 1 | |||
Provisions | 3 | |||
Deferred income | 5 | |||
Current liabilities | 9 | |||
Total Liabilities held for sale | 9 | |||
F-30
Table of Contents
(12) | EARNINGS PER SHARE |
2007 | 2006 | 2005 | ||||||||||
Income from continuing operations in € millions | 1,934 | 1,881 | 1,502 | |||||||||
Weighted average number of shares in millions — basic | 1,207 | 1,226 | 1,239 | |||||||||
Dilutive effect of stock options/convertible bonds in millions | 3 | 5 | 4 | |||||||||
Weighted average number of shares in millions — diluted | 1,210 | 1,231 | 1,243 | |||||||||
Earnings per share from continuing operations — basic in € | 1.60 | 1.53 | 1.21 | |||||||||
Earnings per share from continuing operations — diluted in € | 1.60 | 1.53 | 1.21 | |||||||||
Income from discontinued operations, net of tax in € millions | (15 | ) | (10 | ) | (6 | ) | ||||||
Earnings per share — basic (from discontinued operations) in € | (0.01 | ) | 0.00 | 0.00 | ||||||||
Earnings per share — diluted (from discontinued operations) in € | (0.01 | ) | (0.01 | ) | 0.00 | |||||||
Net income in € million | 1,919 | 1,871 | 1,496 | |||||||||
Earnings per share from net income — basic in € | 1.59 | 1.53 | 1.21 | |||||||||
Earnings per share from net income — diluted in € | 1.59 | 1.52 | 1.20 | |||||||||
F-31
Table of Contents
C. | NOTES TO THE CONSOLIDATED BALANCE SHEETS |
(13) | CASH AND CASH EQUIVALENTS, RESTRICTED CASH AND INVESTMENTS |
Cash and | Equity and | |||||||||||||||||||||||||||||||
cash | Short-term | other | ||||||||||||||||||||||||||||||
equivalents | Restricted cash | investments | investments | |||||||||||||||||||||||||||||
2007 | 2006 | 2007 | 2006 | 2007 | 2006 | 2007 | 2006 | |||||||||||||||||||||||||
€ millions | ||||||||||||||||||||||||||||||||
Cash | 546 | 478 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||
Time deposits | 376 | 1,598 | 0 | 0 | 35 | 19 | 0 | 0 | ||||||||||||||||||||||||
Money market funds | 686 | 204 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||
Commercial paper | 0 | 119 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||
Restricted cash | 0 | 0 | 550 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||
Fund securities (at fair value) | 0 | 0 | 0 | 0 | 8 | 0 | 0 | 12 | ||||||||||||||||||||||||
Auction rate securities | 0 | 0 | 0 | 0 | 0 | 155 | 0 | 0 | ||||||||||||||||||||||||
Variable rate demand notes | 0 | 0 | 0 | 0 | 0 | 34 | 0 | 0 | ||||||||||||||||||||||||
Other debt securities | 0 | 0 | 0 | 0 | 549 | 716 | 0 | 0 | ||||||||||||||||||||||||
Debt securities (at fair value) | 0 | 0 | 0 | 0 | 549 | 905 | 0 | 0 | ||||||||||||||||||||||||
Marketable equity securities (at fair value) | 0 | 0 | 0 | 0 | 0 | 4 | 7 | 10 | ||||||||||||||||||||||||
Equity securities at cost | 0 | 0 | 0 | 0 | 6 | 3 | 63 | 55 | ||||||||||||||||||||||||
Equity method securities | 0 | 0 | 0 | 0 | 0 | 0 | 19 | 18 | ||||||||||||||||||||||||
Total | 1,608 | 2,399 | 550 | 0 | 598 | 931 | 89 | 95 | ||||||||||||||||||||||||
F-32
Table of Contents
Securities not | Securities in | |||||||||||||||||||||||
in loss position | loss position | Total Securities | ||||||||||||||||||||||
Fair | Unrealized | Fair | Unrealized | Fair | Unrealized | |||||||||||||||||||
value | gains | value | losses | value | gains/losses (net) | |||||||||||||||||||
€ millions | ||||||||||||||||||||||||
2007 | ||||||||||||||||||||||||
Marketable equity securities (available-for-sale) | 7 | 2 | 0 | 0 | 7 | 2 | ||||||||||||||||||
Debt securities (available-for-sale) | 172 | 0 | 377 | 2 | 549 | (2 | ) | |||||||||||||||||
Investment fund securities (available-for-sale) | 8 | 0 | 0 | 0 | 8 | 0 | ||||||||||||||||||
2006 | ||||||||||||||||||||||||
Marketable equity securities (available-for-sale) | 11 | 6 | 3 | 0 | 14 | 6 | ||||||||||||||||||
Debt securities (available-for-sale) | 227 | 1 | 678 | 2 | 905 | (1 | ) | |||||||||||||||||
Investment fund securities (available-for-sale) | 0 | 0 | 12 | 0 | 12 | 0 |
Securities in loss position | ||||||||||||||||
for less than 12 months | for more than 12 months | |||||||||||||||
Fair | Unrealized | Fair | Unrealized | |||||||||||||
value | losses | value | losses | |||||||||||||
€ millions | ||||||||||||||||
2007 | ||||||||||||||||
Marketable equity securities (available-for-sale) | 0 | 0 | 0 | 0 | ||||||||||||
Debt securities (available-for-sale) | 363 | 2 | 14 | 0 | ||||||||||||
Investment fund securities (available-for-sale) | 0 | 0 | 0 | 0 | ||||||||||||
2006 | ||||||||||||||||
Marketable equity securities (available-for-sale) | 3 | 0 | 0 | 0 | ||||||||||||
Debt securities (available-for-sale) | 452 | 1 | 226 | 1 | ||||||||||||
Investment fund securities (available-for-sale) | 12 | 0 | 0 | 0 |
F-33
Table of Contents
2007 | 2006 | |||||||
€ millions | ||||||||
Due within 1 year | 449 | 457 | ||||||
Due 1 year through 2 years | 100 | 448 | ||||||
Total of auction rate securities, variable rate demand notes and debt securities | 549 | 905 | ||||||
(14) | ACCOUNTS RECEIVABLE, NET |
F-34
Table of Contents
2007 | 2006 | |||||||
€ millions | ||||||||
Gross carrying amount | 2,957 | 2,505 | ||||||
Sales allowances | (38 | ) | (37 | ) | ||||
Allowance for doubtful accounts charged to expenses | (21 | ) | (25 | ) | ||||
Carrying amount, net, of accounts receivable | 2,898 | 2,443 | ||||||
2007 | 2006 | 2005 | ||||||||||
€ millions | ||||||||||||
Balance as at 1/1 | 25 | 73 | 63 | |||||||||
Utilization | (8 | ) | (5 | ) | (8 | ) | ||||||
Addition | 11 | 7 | 17 | |||||||||
Release | (5 | ) | (48 | ) | (4 | ) | ||||||
Exchange rate effects and other changes | (2 | ) | (2 | ) | 5 | |||||||
Balance as at 12/31 | 21 | 25 | 73 | |||||||||
2007 | 2006 | |||||||
€ millions | ||||||||
Accounts receivable, neither past due nor impaired | 2,337 | 2,004 | ||||||
Accounts receivable, past due, impaired individually | 33 | 35 | ||||||
Accounts receivable, past due, impaired on a portfolio basis | 587 | 466 | ||||||
Accounts receivable, impaired on a portfolio basis | 587 | 466 | ||||||
less than 45 days past due | 344 | 273 | ||||||
46 to 90 days past due | 83 | 78 | ||||||
91 to 180 days past due | 57 | 54 | ||||||
181 to 365 days past due | 71 | 37 | ||||||
366 and more days past due | 32 | 24 |
F-35
Table of Contents
2007 | 2006 | |||||||
€ millions | ||||||||
Current | 2,895 | 2,440 | ||||||
Noncurrent | 3 | 3 | ||||||
2,898 | 2,443 | |||||||
2007 | 2006 | |||||||||||||||||||||||
Current | Noncurrent | Total | Current | Noncurrent | Total | |||||||||||||||||||
€ millions | ||||||||||||||||||||||||
Investments in insurance policies held for employee-financed pension plans, and semiretirement | 0 | 342 | 342 | 0 | 278 | 278 | ||||||||||||||||||
Income tax receivables | 283 | 36 | 319 | 164 | 12 | 176 | ||||||||||||||||||
Fair value of STAR hedge and other derivatives | 146 | 1 | 147 | 117 | 87 | 204 | ||||||||||||||||||
Other receivables | 48 | 49 | 97 | 41 | 41 | 82 | ||||||||||||||||||
Prepaid pensions | 0 | 56 | 56 | 0 | 46 | 46 | ||||||||||||||||||
Loans to employees | 9 | 43 | 52 | 8 | 43 | 51 | ||||||||||||||||||
Miscellaneous other assets | 50 | 0 | 50 | 36 | 0 | 36 | ||||||||||||||||||
Rent deposits | 0 | 24 | 24 | 0 | 26 | 26 | ||||||||||||||||||
Loans to third parties | 0 | 4 | 4 | 1 | 0 | 1 | ||||||||||||||||||
Inventories | 5 | 0 | 5 | 4 | 0 | 4 | ||||||||||||||||||
541 | 555 | 1,096 | 371 | 533 | 904 | |||||||||||||||||||
2007 | 2006 | 2005 | ||||||||||
€ millions | ||||||||||||
Balance as at 1/1 | 1 | 16 | 15 | |||||||||
Utilization | 0 | 10 | 0 | |||||||||
Addition | 0 | 0 | 3 | |||||||||
Release | 1 | 5 | 2 | |||||||||
Balance as at 12/31 | 0 | 1 | 16 | |||||||||
F-36
Table of Contents
Software and | Acquired | Other | ||||||||||||||||||
Goodwill | database licenses | technology | intangibles | Total | ||||||||||||||||
€ millions | ||||||||||||||||||||
Purchase cost | ||||||||||||||||||||
1/1/2007 | 1,084 | 202 | 216 | 37 | 1,539 | |||||||||||||||
Exchange rate differences | (81 | ) | (1 | ) | (12 | ) | (5 | ) | (99 | ) | ||||||||||
Additions | 520 | 65 | 83 | 90 | 758 | |||||||||||||||
Retirements/disposals | 0 | (2 | ) | 0 | (2 | ) | (4 | ) | ||||||||||||
Reclassifications to current assets | (7 | ) | 0 | 0 | 0 | (7 | ) | |||||||||||||
12/31/2007 | 1,516 | 264 | 287 | 120 | 2,187 | |||||||||||||||
Accumulated amortization | ||||||||||||||||||||
1/1/2007 | 97 | 128 | 53 | 11 | 289 | |||||||||||||||
Exchange rate differences | (4 | ) | (1 | ) | (1 | ) | (1 | ) | (7 | ) | ||||||||||
Additions | 0 | 26 | 45 | 11 | 82 | |||||||||||||||
Retirements/disposals | 0 | (2 | ) | 0 | (1 | ) | (3 | ) | ||||||||||||
12/31/2007 | 93 | 151 | 97 | 20 | 361 | |||||||||||||||
Carrying value 12/31/2007 | 1,423 | 113 | 190 | 100 | 1,826 | |||||||||||||||
Weighted average amortization period in years | N/A | 3.0 | 5.2 | 7.0 | 5.3 | |||||||||||||||
Purchase cost | ||||||||||||||||||||
1/1/2006 | 727 | 160 | 194 | 25 | 1,106 | |||||||||||||||
Exchange rate differences | (50 | ) | 0 | (13 | ) | (3 | ) | (66 | ) | |||||||||||
Additions | 407 | 53 | 120 | 16 | 596 | |||||||||||||||
Retirements/disposals | 0 | (11 | ) | (85 | ) | (1 | ) | (97 | ) | |||||||||||
12/31/2006 | 1,084 | 202 | 216 | 37 | 1,539 | |||||||||||||||
Accumulated amortization | ||||||||||||||||||||
1/1/2006 | 100 | 124 | 109 | 7 | 340 | |||||||||||||||
Exchange rate differences | (3 | ) | (1 | ) | (8 | ) | (1 | ) | (13 | ) | ||||||||||
Additions | 0 | 16 | 37 | 6 | 59 | |||||||||||||||
Retirements/disposals | 0 | (11 | ) | (85 | ) | (1 | ) | (97 | ) | |||||||||||
12/31/2006 | 97 | 128 | 53 | 11 | 289 | |||||||||||||||
Carrying value 12/31/2006 | 987 | 74 | 163 | 26 | 1,250 | |||||||||||||||
F-37
Table of Contents
€ millions | ||||
2008 | 96 | |||
2009 | 96 | |||
2010 | 71 | |||
2011 | 49 | |||
2012 | 36 | |||
Thereafter | 55 |
Thereof | Thereof | |||||||||||||||
additions | additions | |||||||||||||||
12/31/2007 | in 2007 | 12/31/2006 | in 2006 | |||||||||||||
€ millions | ||||||||||||||||
Product | 974 | 430 | 618 | 350 | ||||||||||||
Consulting | 409 | 76 | 340 | 40 | ||||||||||||
Training | 40 | 14 | 29 | 17 | ||||||||||||
Total | 1,423 | 520 | 987 | 407 | ||||||||||||
F-38
Table of Contents
Land, leasehold | ||||||||||||||||
improvements, and | ||||||||||||||||
buildings, including | Other property, | Advance payments | ||||||||||||||
buildings on | plant, and | and construction | ||||||||||||||
third-party land | equipment | in progress | Total | |||||||||||||
€ millions | ||||||||||||||||
Purchase cost | ||||||||||||||||
1/1/2007 | 975 | 1,099 | 109 | 2,183 | ||||||||||||
Exchange rate differences | (22 | ) | (15 | ) | (2 | ) | (39 | ) | ||||||||
Additions | 82 | 244 | 16 | 342 | ||||||||||||
Retirements/disposals | (10 | ) | (120 | ) | 0 | (130 | ) | |||||||||
Reclassifications to Assets held for sale | 0 | (3 | ) | 0 | (3 | ) | ||||||||||
Reclassifications | 83 | 8 | (91 | ) | 0 | |||||||||||
12/31/2007 | 1,108 | 1,213 | 32 | 2,353 | ||||||||||||
Accumulated depreciation | ||||||||||||||||
1/1/2007 | 296 | 681 | 0 | 977 | ||||||||||||
Exchange rate differences | (7 | ) | (8 | ) | 0 | (15 | ) | |||||||||
Additions | 32 | 147 | 0 | 179 | ||||||||||||
Retirements/disposals | (10 | ) | (92 | ) | 0 | (102 | ) | |||||||||
Reclassifications to Assets held for sale | 0 | (2 | ) | 0 | (2 | ) | ||||||||||
12/31/2007 | 311 | 726 | 0 | 1,037 | ||||||||||||
Carrying value 12/31/2007 | 797 | 487 | 32 | 1,316 | ||||||||||||
Purchase cost | ||||||||||||||||
1/1/2006 | 955 | 1,046 | 43 | 2,044 | ||||||||||||
Exchange rate differences | (24 | ) | (19 | ) | (1 | ) | (44 | ) | ||||||||
Additions | 33 | 191 | 92 | 316 | ||||||||||||
Retirements/disposals | (12 | ) | (121 | ) | 0 | (133 | ) | |||||||||
Reclassifications | 23 | 2 | (25 | ) | 0 | |||||||||||
12/31/2006 | 975 | 1,099 | 109 | 2,183 | ||||||||||||
Accumulated depreciation | ||||||||||||||||
1/1/2006 | 287 | 662 | 0 | 949 | ||||||||||||
Exchange rate differences | (8 | ) | (12 | ) | 0 | (20 | ) | |||||||||
Additions | 28 | 128 | 0 | 156 | ||||||||||||
Retirements/disposals | (11 | ) | (97 | ) | 0 | (108 | ) | |||||||||
12/31/2006 | 296 | 681 | 0 | 977 | ||||||||||||
Carrying value 12/31/2006 | 679 | 418 | 109 | 1,206 | ||||||||||||
F-39
Table of Contents
Term less | Term | Term more | ||||||||||||||||||
than | between 1 | than | Balance on | Balance on | ||||||||||||||||
1 year | and 5 years | 5 years | 12/31/2007 | 12/31/2006 | ||||||||||||||||
€ millions | ||||||||||||||||||||
Payables to suppliers | 688 | 6 | 0 | 694 | 581 | |||||||||||||||
Advanced payments received | 27 | 4 | 0 | 31 | 63 | |||||||||||||||
715 | 10 | 0 | 725 | 644 | ||||||||||||||||
Other employee-related liabilities | 1,060 | 6 | 49 | 1,115 | 999 | |||||||||||||||
Other taxes | 262 | 0 | 0 | 262 | 220 | |||||||||||||||
Other financial liabilities | 57 | 4 | 0 | 61 | 40 | |||||||||||||||
Other liabilities | 52 | 11 | 7 | 70 | 86 | |||||||||||||||
Bank loans and overdraft | 25 | 2 | 0 | 27 | 26 | |||||||||||||||
1,456 | 23 | 56 | 1,535 | 1,371 | ||||||||||||||||
2,171 | 33 | 56 | 2,260 | 2,015 | ||||||||||||||||
F-40
Table of Contents
2007 | 2006 | |||||||||||||||||||||||
Current | Noncurrent | Total | Current | Noncurrent | Total | |||||||||||||||||||
€ millions | ||||||||||||||||||||||||
Pension plans and similar obligations (see Note 19a) | 1 | 275 | 276 | 1 | 231 | 232 | ||||||||||||||||||
Other obligations (see Note 19b) | 153 | 94 | 247 | 162 | 108 | 270 | ||||||||||||||||||
154 | 369 | 523 | 163 | 339 | 502 | |||||||||||||||||||
2007 | 2006 | |||||||
€ millions | ||||||||
Domestic benefit plans | 2 | 8 | ||||||
Foreign benefit plans | 38 | 33 | ||||||
Total defined benefit plans | 40 | 41 | ||||||
Employee financed plans | 236 | 191 | ||||||
Total pension plans | 276 | 232 | ||||||
F-41
Table of Contents
2007 | 2006 | |||||||
€ millions | ||||||||
Present value of funded benefit obligations | (306 | ) | (297 | ) | ||||
Present value of unfunded benefit obligations | (25 | ) | (19 | ) | ||||
Total present value of benefit obligations | (331 | ) | (316 | ) | ||||
Fair value of plan assets | 347 | 321 | ||||||
Net amount recognized | 16 | 5 | ||||||
Pension liability (unfunded or underfunded) | (40 | ) | (41 | ) | ||||
— thereof principal pension benefit liability | (39 | ) | (41 | ) | ||||
— thereof insignificant pension benefit liability | (1 | ) | 0 | |||||
Prepaid pension asset (overfunded) | 56 | 46 | ||||||
— thereof principal prepaid pension asset | 55 | 45 | ||||||
— thereof insignificant prepaid pension asset | 1 | 1 | ||||||
— thereof pension cost recognized in Accumulated other comprehensive income | 29 | 28 |
F-42
Table of Contents
Domestic plans | Foreign plans | Total | ||||||||||||||||||||||
2007 | 2006 | 2007 | 2006 | 2007 | 2006 | |||||||||||||||||||
€ millions | ||||||||||||||||||||||||
Change in benefit obligation | ||||||||||||||||||||||||
Benefit obligation at beginning of year | 41 | 43 | 275 | 257 | 316 | 300 | ||||||||||||||||||
Additional plans included in pension disclosure | 0 | 1 | 7 | 5 | 7 | 6 | ||||||||||||||||||
Service cost | 0 | 0 | 38 | 36 | 38 | 36 | ||||||||||||||||||
Interest cost | 1 | 2 | 11 | 10 | 12 | 12 | ||||||||||||||||||
Employee contributions | 0 | 0 | 3 | 3 | 3 | 3 | ||||||||||||||||||
Benefits paid | (1 | ) | (1 | ) | (15 | ) | (7 | ) | (16 | ) | (8 | ) | ||||||||||||
Actuarial loss/gain | (4 | ) | (4 | ) | 0 | (5 | ) | (4 | ) | (9 | ) | |||||||||||||
Curtailments/Settlements | 0 | 0 | (5 | ) | 0 | (5 | ) | 0 | ||||||||||||||||
Other changes | 1 | 0 | 0 | 1 | 1 | 1 | ||||||||||||||||||
Foreign currency exchange rates | 0 | 0 | (21 | ) | (25 | ) | (21 | ) | (25 | ) | ||||||||||||||
Benefit obligation at year end | 38 | 41 | 293 | 275 | 331 | 316 | ||||||||||||||||||
Change in plan assets | ||||||||||||||||||||||||
Fair value of plan assets at beginning of year | 33 | 29 | 288 | 242 | 321 | 271 | ||||||||||||||||||
Additional plans included in pension disclosure | 0 | 0 | 0 | 5 | 0 | 5 | ||||||||||||||||||
Actual return on plan assets | 2 | 2 | 11 | 27 | 13 | 29 | ||||||||||||||||||
Employer contributions | 2 | 3 | 53 | 42 | 55 | 45 | ||||||||||||||||||
Employee contributions | (1 | ) | 0 | 3 | 3 | 2 | 3 | |||||||||||||||||
Benefits paid | 0 | (1 | ) | (13 | ) | (7 | ) | (13 | ) | (8 | ) | |||||||||||||
Curtailments/Settlements | 0 | 0 | (4 | ) | 0 | (4 | ) | 0 | ||||||||||||||||
Foreign currency exchange rates | 0 | 0 | (27 | ) | (24 | ) | (27 | ) | (24 | ) | ||||||||||||||
Fair value of plan assets at year end | 36 | 33 | 311 | 288 | 347 | 321 | ||||||||||||||||||
Funded status at year end | (2 | ) | (8 | ) | 18 | 13 | 16 | 5 | ||||||||||||||||
Amounts recognized in the consolidated balance sheets: | ||||||||||||||||||||||||
Noncurrent pension assets | 0 | 0 | 55 | 45 | 55 | 45 | ||||||||||||||||||
Accrued benefit liability (current) | 0 | 0 | (1 | ) | (1 | ) | (1 | ) | (1 | ) | ||||||||||||||
Accrued benefit liability (noncurrent) | (2 | ) | (8 | ) | (36 | ) | (31 | ) | (38 | ) | (39 | ) | ||||||||||||
(2 | ) | (8 | ) | 18 | 13 | 16 | 5 | |||||||||||||||||
Domestic plans | Foreign plans | |||||||||||||||||||||||
2007 | 2006 | 2005 | 2007 | 2006 | 2005 | |||||||||||||||||||
Percent | ||||||||||||||||||||||||
Discount rate | 5.5 | 4.5 | 4.0 | 5.0 | 4.4 | 4.2 | ||||||||||||||||||
Rate of compensation increase | 2 to 5 | 2 to 5 | 2 to 7 | 5.0 | 4.6 | 4.9 |
F-43
Table of Contents
Domestic plans | Foreign plans | Total | ||||||||||||||||||||||||||||||||||
2007 | 2006 | 2005 | 2007 | 2006 | 2005 | 2007 | 2006 | 2005 | ||||||||||||||||||||||||||||
€ millions | ||||||||||||||||||||||||||||||||||||
Service cost | 0 | 0 | 0 | 38 | 36 | 30 | 38 | 36 | 30 | |||||||||||||||||||||||||||
Interest cost | 1 | 2 | 2 | 11 | 10 | 9 | 12 | 12 | 11 | |||||||||||||||||||||||||||
Expected return on plan assets | (1 | ) | (1 | ) | (2 | ) | (21 | ) | (17 | ) | (14 | ) | (22 | ) | (18 | ) | (16 | ) | ||||||||||||||||||
Amortization of prior service cost | 0 | 0 | 1 | 0 | 0 | 0 | 0 | 0 | 1 | |||||||||||||||||||||||||||
Amortization of net loss | 1 | 2 | 0 | 0 | 1 | 0 | 1 | 3 | 0 | |||||||||||||||||||||||||||
Net periodic benefit cost | 1 | 3 | 1 | 28 | 30 | 25 | 29 | 33 | 26 | |||||||||||||||||||||||||||
Other changes in plan assets and benefit obligations recognized in other comprehensive income | ||||||||||||||||||||||||||||||||||||
Initial net transition obligation | 0 | 0 | — | 0 | 2 | — | 0 | 2 | — | |||||||||||||||||||||||||||
Net gain/loss | (4 | ) | 10 | — | 6 | 16 | — | 2 | 26 | — | ||||||||||||||||||||||||||
Amortization of net loss | (1 | ) | 0 | 0 | 0 | (1 | ) | 0 | — | |||||||||||||||||||||||||||
Total recognized in other comprehensive income | (5 | ) | 10 | — | 6 | 18 | 0 | 1 | 28 | 0 | ||||||||||||||||||||||||||
Total pension cost | (4 | ) | 13 | 1 | 34 | 48 | 25 | 30 | 61 | 26 | ||||||||||||||||||||||||||
Domestic plans | Foreign plans | Total | ||||||||||||||||||||||
2007 | 2006 | 2007 | 2006 | 2007 | 2006 | |||||||||||||||||||
€ millions | ||||||||||||||||||||||||
Initial net transition obligation | 0 | 0 | 2 | 2 | 2 | 2 | ||||||||||||||||||
Prior service cost | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||
Net loss | 5 | 10 | 22 | 16 | 27 | 26 | ||||||||||||||||||
Total unrecognized pension cost | 5 | 10 | 24 | 18 | 29 | 28 | ||||||||||||||||||
Domestic plans | Foreign plans | |||||||||||||||||||||||
2007 | 2006 | 2005 | 2007 | 2006 | 2005 | |||||||||||||||||||
Percent | ||||||||||||||||||||||||
Discount rate | 4.5 | 4.0 | 5.0 | 4.4 | 4.2 | 4.5 | ||||||||||||||||||
Expected return on plan assets | 4.0 | 4.3 | 5.5 | 7.0 | 6.9 | 6.9 | ||||||||||||||||||
Rate of compensation increase | 2 to 5 | 2 to 5 | 2 to 7 | 5.0 | 4.5 | 5.0 |
F-44
Table of Contents
Other Amounts Recognized in Other Comprehensive Income
Foreign pension plans and other | ||||||||||||||||
post-employment obligations | ||||||||||||||||
Actual | Actual | |||||||||||||||
Target | allocation | Target | allocation | |||||||||||||
asset | of plan | asset | of plan | |||||||||||||
allocation | assets in | allocation | assets in | |||||||||||||
Asset category | for 2008 | 2007 | for 2007 | 2006 | ||||||||||||
Percent | ||||||||||||||||
Equity | 55 | 54 | 55 | 58 | ||||||||||||
Fixed income | 35 | 36 | 41 | 40 | ||||||||||||
Real estate | 3 | 1 | 3 | 1 | ||||||||||||
Insurance policies | 5 | 6 | 0 | 0 | ||||||||||||
Other | 2 | 3 | 1 | 1 | ||||||||||||
Total | 100 | 100 | 100 | 100 | ||||||||||||
F-45
Table of Contents
2007 | ||||||||||||
Domestic | Foreign | |||||||||||
plans | plans | Total | ||||||||||
€ millions | ||||||||||||
Projected benefit obligation | 38 | 114 | 152 | |||||||||
Accumulated benefit obligation | 38 | 106 | 144 | |||||||||
Fair value of plan assets | 36 | 84 | 120 | |||||||||
Underfunding of accumulated benefit obligation | 2 | 22 | 24 |
2006 | ||||||||||||
Domestic | Foreign | |||||||||||
plans | plans | Total | ||||||||||
€ millions | ||||||||||||
Projected benefit obligation | 41 | 109 | 150 | |||||||||
Accumulated benefit obligation | 40 | 101 | 141 | |||||||||
Fair value of plan assets | 33 | 77 | 110 | |||||||||
Underfunding of accumulated benefit obligation | 7 | 24 | 31 |
Domestic | Foreign | |||||||||||
plans | plans | Total | ||||||||||
€ millions | ||||||||||||
2008 | 1 | 12 | 13 | |||||||||
2009 | 1 | 13 | 14 | |||||||||
2010 | 2 | 15 | 17 | |||||||||
2011 | 2 | 17 | 19 | |||||||||
2012 | 2 | 19 | 21 | |||||||||
2013 to 2017 | 12 | 129 | 141 |
F-46
Table of Contents
b) | Other Obligations |
2007 | 2006 | |||||||||||||||||||||||
Current | Noncurrent | Total | Current | Noncurrent | Total | |||||||||||||||||||
€ millions | ||||||||||||||||||||||||
Employee-related obligations | ||||||||||||||||||||||||
Obligations related to share-based compensation programs | 60 | 38 | 98 | 83 | 51 | 134 | ||||||||||||||||||
Other employee-related obligations | 56 | 46 | 102 | 46 | 47 | 93 | ||||||||||||||||||
Customer-related obligations | 28 | 0 | 28 | 26 | 0 | 26 | ||||||||||||||||||
Restructuring obligations | 1 | 2 | 3 | 2 | 4 | 6 | ||||||||||||||||||
Warranty obligations | 3 | 0 | 3 | 3 | 0 | 3 | ||||||||||||||||||
Other obligations | 5 | 8 | 13 | 2 | 6 | 8 | ||||||||||||||||||
153 | 94 | 247 | 162 | 108 | 270 | |||||||||||||||||||
2007 | 2006 | |||||||
€ millions | ||||||||
Balance as at 1/1 | 3 | 3 | ||||||
Additions | 3 | 3 | ||||||
Utilization | 3 | 3 | ||||||
Release | 0 | 0 | ||||||
Balance as at 12/31 | 3 | 3 | ||||||
F-47
Table of Contents
Severance | ||||||||||||
Unused | payments for | |||||||||||
lease space | re-structuring | Total | ||||||||||
€ millions | ||||||||||||
1/1/2007 | 5 | 1 | 6 | |||||||||
Additions | 1 | 0 | 1 | |||||||||
Utilization | (2 | ) | (1 | ) | (3 | ) | ||||||
Release | (1 | ) | 0 | (1 | ) | |||||||
12/31/2007 | 3 | 0 | 3 | |||||||||
— thereof current | 1 | 0 | 1 | |||||||||
— thereof noncurrent | 2 | 0 | 2 | |||||||||
1/1/2006 | 8 | 2 | 10 | |||||||||
Additions | 3 | 2 | 5 | |||||||||
Utilization | (3 | ) | (1 | ) | (4 | ) | ||||||
Release | (3 | ) | (2 | ) | (5 | ) | ||||||
12/31/2006 | 5 | 1 | 6 | |||||||||
— thereof current | 2 | 0 | 2 | |||||||||
— thereof noncurrent | 3 | 1 | 4 | |||||||||
1/1/2005 | 11 | 6 | 17 | |||||||||
Additions | 2 | 4 | 6 | |||||||||
Utilization | (4 | ) | (5 | ) | (9 | ) | ||||||
Release | (2 | ) | (3 | ) | (5 | ) | ||||||
Currency | 1 | 0 | 1 | |||||||||
12/31/2005 | 8 | 2 | 10 | |||||||||
— thereof current | 2 | 2 | 4 | |||||||||
— thereof noncurrent | 6 | 0 | 6 |
(20) | SHAREHOLDERS’ EQUITY |
F-48
Table of Contents
2007 | 2006 | |||||||||||||||
Number of | Percent of | Number of | Percent of | |||||||||||||
shares | common | shares | common | |||||||||||||
(000) | stock | (000) | stock | |||||||||||||
Hasso Plattner GmbH & Co. Beteiligungs-KG | 113,719 | 9.1 | % | 113,719 | 9.0 | % | ||||||||||
Dietmar Hopp Stiftung GmbH | 109,869 | 8.8 | % | 109,869 | 8.7 | % | ||||||||||
Klaus Tschira Stiftung gGmbH | 78,474 | 6.3 | % | 67,472 | 5.3 | % | ||||||||||
Dr. h.c. Tschira Beteiligungs GmbH & Co. KG | 32,831 | 2.6 | % | 63,331 | 5.0 | % | ||||||||||
Hasso Plattner Förderstiftung gGmbH | 15,245 | 1.2 | % | 16,062 | 1.2 | % | ||||||||||
DH-Besitzgesellschaft mbH & Co. KG(1) | 6,404 | 0.5 | % | 10,200 | 0.8 | % | ||||||||||
Dr. h.c. Tschira and wife | 3,178 | 0.3 | % | 2,000 | 0.2 | % | ||||||||||
Treasury stock | 48,065 | 3.9 | % | 49,251 | 3.9 | % | ||||||||||
Free float | 838,473 | 67.3 | % | 835,633 | 65.9 | % | ||||||||||
1,246,258 | 100.0 | % | 1,267,537 | 100.0 | % | |||||||||||
• | Up to a total amount of €60 million through the issuance of new common shares in return for contributions in cash until May 11, 2010 (“Authorized Capital I”). The issuance is subject to the statutory subscription rights of existing shareholders. | |
• | Up to a total amount of €180 million through the issuance of new common shares in return for contributions in cash until May 8, 2011 (“Authorized Capital Ia”). The issuance is subject to the statutory subscription rights of existing shareholders. | |
• | Up to a total amount of €60 million through the issuance of new common shares in return for contributions in cash or in kind until May 11, 2010 (“Authorized Capital II”). This capital increase could also be executed as a result of a business combination. Subject to certain preconditions and the consent of the Supervisory Board, the Executive Board is authorized to exclude the shareholders’ statutory subscription rights. | |
• | Up to a total amount of €180 million through the issuance of new common shares in return for contributions in cash or in kind until May 8, 2011 (“Authorized Capital IIa”). This capital increase could also be executed as a result of a business combination. Subject to certain preconditions and the consent of the Supervisory Board, the Executive Board is authorized to exclude the shareholders’ statutory subscription rights. |
F-49
Table of Contents
Contingent | ||||
capital | ||||
€ millions | ||||
1/1/2006 | 53 | |||
Exercised | (1 | ) | ||
New authorized | 100 | |||
Increase in consequence of capital increase | 83 | |||
Reduction/cancellation | (25 | ) | ||
12/31/2006 | 210 | |||
Exercised | (1 | ) | ||
New authorized | 0 | |||
Reduction/cancellation | 0 | |||
12/31/2007 | 209 | |||
F-50
Table of Contents
Gains | Currency | |||||||||||||||||||||||||||
Unrealized | /losses on | effects | ||||||||||||||||||||||||||
Currency | gains | Unrecog- | foreign | Gains | from inter- | |||||||||||||||||||||||
translation | /losses on | nized | currency | /losses on | company | Total other | ||||||||||||||||||||||
adjust- | marketable | pension | cash flow | STAR | long-term | components | ||||||||||||||||||||||
ments | securities | costs | hedges | hedge | investments | of equity | ||||||||||||||||||||||
€ millions | ||||||||||||||||||||||||||||
1/1/2005 | (296 | ) | 8 | (11 | ) | 13 | 9 | (2 | ) | (279 | ) | |||||||||||||||||
Current-period change, net of tax | 121 | 3 | 1 | (22 | ) | 42 | 43 | 188 | ||||||||||||||||||||
12/31/2005 | (175 | ) | 11 | (10 | ) | (9 | ) | 51 | 41 | (91 | ) | |||||||||||||||||
Current-period change, net of tax | (149 | ) | (7 | ) | (10 | ) | 20 | (48 | ) | (26 | ) | (220 | ) | |||||||||||||||
12/31/2006 | (324 | ) | 4 | (20 | ) | 11 | 3 | 15 | (311 | ) | ||||||||||||||||||
Current-period change, net of tax | (194 | ) | (3 | ) | 0 | 10 | (12 | ) | (5 | ) | (204 | ) | ||||||||||||||||
12/31/2007 | (518 | ) | 1 | (20 | ) | 21 | (9 | ) | 10 | (515 | ) | |||||||||||||||||
F-51
Table of Contents
(22) | CONTINGENT LIABILITIES |
(23) | OTHER FINANCIAL COMMITMENTS |
F-52
Table of Contents
Operating | Purchase | |||||||
leases | commitments | |||||||
€ millions | ||||||||
Due 2008 | 157 | 137 | ||||||
Due 2009 | 119 | 29 | ||||||
Due 2010 | 98 | 19 | ||||||
Due 2011 | 80 | 10 | ||||||
Due 2012 | 58 | 2 | ||||||
Due thereafter | 137 | 4 |
F-53
Table of Contents
F-54
Table of Contents
(25) | DERIVATIVE FINANCIAL INSTRUMENTS |
2007 | 2006 | |||||||
€ millions | ||||||||
Assets: | ||||||||
Derivatives without a hedging relationship | 60 | 15 | ||||||
thereof forward exchange contracts | 59 | 15 | ||||||
thereof interest rate swaps | 1 | 0 | ||||||
Derivatives with a hedging relationship (hedge accounting) | 87 | 189 | ||||||
thereof forward exchange contracts | 29 | 18 | ||||||
thereof call options (STAR hedge) | 58 | 171 | ||||||
Liabilities: | ||||||||
Derivatives without a hedging relationship | (30 | ) | (10 | ) | ||||
thereof forward exchange contracts | (30 | ) | (10 | ) | ||||
Derivatives with a hedging relationship (hedge accounting) | (1 | ) | (2 | ) | ||||
thereof forward exchange contracts | (1 | ) | (2 | ) |
F-55
Table of Contents
F-56
Table of Contents
2007 | ||||||||
Hedge of 12.0 million 2006 STARs | ||||||||
Buy/sell | Options | Strike price in € | ||||||
Buy | 12,000,000 | 42.12 | ||||||
Sell | 6,000,000 | 54.62 | ||||||
Sell | 3,000,000 | 67.12 |
2007 | ||||||||
Hedge of 15.2 million 2005 STARs | ||||||||
Buy/sell | Options | Strike price in € | ||||||
Buy | 15,200,000 | 30.47 | ||||||
Sell | 7,600,000 | 42.97 | ||||||
Sell | 3,800,000 | 55.47 |
2006 | ||||||||
Hedge of 12.0 million 2006 STARs | ||||||||
Buy/sell | Options | Strike price in € | ||||||
Buy | 12,000,000 | 42.12 | ||||||
Sell | 6,000,000 | 54.62 | ||||||
Sell | 3,000,000 | 67.12 |
2006 | ||||||||
Hedge of 15.2 million 2005 STARs | ||||||||
Buy/sell | Options | Strike price in € | ||||||
Buy | 15,200,000 | 30.47 | ||||||
Sell | 7,600,000 | 42.97 | ||||||
Sell | 3,800,000 | 55.47 |
2006 | ||||||||
Hedge of 12.0 million 2004 STARs | ||||||||
Buy/sell | Options | Strike price in € | ||||||
Buy | 12,000,000 | 33.59 | ||||||
Sell | 6,000,000 | 46.09 | ||||||
Sell | 3,000,000 | 58.59 |
F-57
Table of Contents
(26) | FINANCIAL RISK MANAGEMENT |
2007 | 2006 | |||||||||||||||
2007 | Yearly | 2006 | Yearly | |||||||||||||
12/31 | average | 12/31 | average | |||||||||||||
€ millions | ||||||||||||||||
Value at risk | 12 | 14 | 4 | 9 |
F-58
Table of Contents
F-59
Table of Contents
2007 | 2006 | |||||||||||||||
Carrying | Fair | Carrying | Fair | |||||||||||||
value | value | value | value | |||||||||||||
€ millions | ||||||||||||||||
Assets: | ||||||||||||||||
Debt and equity securities | 652 | 652 | 1,007 | 1,007 | ||||||||||||
Cash and cash equivalents | 1,608 | 1,608 | 2,399 | 2,399 | ||||||||||||
Restricted cash | 550 | 550 | 0 | 0 | ||||||||||||
Time deposits | 35 | 35 | 19 | 19 | ||||||||||||
Loans | 57 | 57 | 51 | 51 | ||||||||||||
Derivatives | ||||||||||||||||
Forward exchange contracts | 88 | 88 | 33 | 33 | ||||||||||||
Call options (STAR hedge) | 58 | 58 | 171 | 171 | ||||||||||||
Other derivatives | 1 | 1 | 0 | 0 | ||||||||||||
Liabilities: | ||||||||||||||||
Bank loans and overdrafts | (27 | ) | (27 | ) | (26 | ) | (26 | ) | ||||||||
Other financial liabilities (excluding derivatives) | (11 | ) | (11 | ) | (8 | ) | (8 | ) | ||||||||
Derivatives | ||||||||||||||||
Forward exchange contracts | (31 | ) | (31 | ) | (12 | ) | (12 | ) |
• | Debt and equity securities: The fair values of debt and equity securities are based on available quoted market prices, except that quoted market prices are not available for €69 million of equity securities at cost and €19 million of equity method investments, for which there were no indication of impairment at December 31, 2007 or 2006. | |
• | Cash and cash equivalents, Restricted cash, time deposits: Due to their short maturities, the book value of cash and cash equivalents and time deposits approximates fair value. | |
• | Loans, bank loans and overdrafts, other financial liabilities: The fair values of loans to third parties, bank loans and overdrafts and other financial liabilities are determined by discounting estimated cash flows using appropriate interest rates adjusted to reflect the inherent credit risk. Most loans to third parties, bank loans and overdrafts are of a short term nature. Accordingly, the net carrying values approximate their fair values. | |
• | Non-interest-bearing or below market-rate employee loans are discounted to their present value using the prevailing interest rate the employee would have to pay to a bank for a similar loan. | |
• | Derivatives: The fair value of forward foreign exchange contracts is based on forward exchange rates. The fair value of the derivatives entered into to hedge our STAR programs and the fair values of our |
F-60
Table of Contents
contingent derivative interest rate contracts is based on market data that reflect current market expectations. |
(27) | SHARE-BASED PAYMENT PLANS |
a) | Employee Discounted Stock Purchase Programs |
b) | Cash-Settled Share-Based Payment Plans |
1) | Stock Appreciation Rights (STAR) Plans |
Weighting factor for valuation calculation of STAR awards, quarter ending | ||||||||||||||||||||||||||||
March 31 | June 30 | Sep. 30 | Dec. 31 | March 31 | June 30 | Sep. 30 | Dec. 31 | |||||||||||||||||||||
5% | 5% | 10% | 20% | 10% | 10% | 10% | 30% |
F-61
Table of Contents
Risk-free interest rate: | 3.99% to 4.16% (depending on maturity) | |
Expected volatility: | 27.3% | |
Expected dividend ratio: | 1.37% |
2) | Incentive Plan 2010 |
F-62
Table of Contents
Calculation | Incremental | |||||||||||
of payout | maximum | Incremental | ||||||||||
as percentage | payout as | maximum | ||||||||||
per point | percentage of | payout per | ||||||||||
Increase in market capitalization | increase | base value | right in € | |||||||||
0% to 50% | 0.00 | 0 | % | 0.00 | ||||||||
> 50% to 80% | 0.67 | 20 | % | 28.92 | ||||||||
> 80% to 90% | 3.00 | 30 | % | 43.38 | ||||||||
> 90% to 99.99% | 5.00 | 50 | % | 72.30 | ||||||||
Total | 100 | % | 144.60 | |||||||||
Risk-free interest rate: | 3.99% to 4.36% (depending on maturity) | |
Expected volatility: | 29.6% | |
Expected dividend ratio: | 1.37% |
F-63
Table of Contents
3) | Virtual Stock Option Plan 2007 |
Expected life: | 5 years | |
Risk-free interest rate: | 3.99% to 4.36% (depending on maturity) | |
Expected volatility: | 31.2% | |
Expected dividend ratio: | 1.37% |
c) | Equity Settled Share-Based Payment Plans |
1) | Stock Option Plan 2002 |
F-64
Table of Contents
2006 | 2005 | |||||||
Expected life in years | 3.50% | 3.50% | ||||||
Risk-free interest rate | 3.10% | 2.82% | ||||||
Expected volatility | 24.00% | 24.00% | ||||||
Expected dividend ratio | 0.87% | 0.65% |
Weighted | ||||||||||||||||
Number | Weighted average | average | ||||||||||||||
of options | exercise price | remaining | Aggregate | |||||||||||||
outstanding | per option | contractual term | intrinsic value | |||||||||||||
(000) | in € | in years | € millions | |||||||||||||
1/1/2007 | 7,446 | 142.57 | 2.8 | 182 | ||||||||||||
Granted | — | — | — | — | ||||||||||||
Exercised | 1,451 | 110.87 | — | — | ||||||||||||
Forfeited or expired | 182 | 172.51 | — | — | ||||||||||||
12/31/2007 | 5,813 | 149.54 | 2.0 | 41 | ||||||||||||
Fully vested options as at 31.12.2007 | 4,160 | 135.08 | 1.5 | 41 |
F-65
Table of Contents
Weighted average | ||||||||
Number of | grant-date | |||||||
options | fair value | |||||||
(000) | € | |||||||
Nonvested as at 1/1/2006 | 4,846 | 29.81 | ||||||
Granted | 1,842 | 26.47 | ||||||
Vested | (2,000 | ) | 43.61 | |||||
Forfeited | (147 | ) | 23.21 | |||||
Nonvested as at 12/31/2006 | 4,541 | 22.59 | ||||||
Granted | — | — | ||||||
Vested | (2,756 | ) | 20.08 | |||||
Forfeited | (132 | ) | 26.26 | |||||
Nonvested as at 12/31/2007 | 1,653 | 26.47 |
F-66
Table of Contents
Number | Weighted | |||||||||||||||
of options/ | Weighted average | average | ||||||||||||||
convertible bonds | exercise price | remaining | Aggregate | |||||||||||||
outstanding | per option | contractual term | intrinsic value | |||||||||||||
(000) | in € | in years | € millions | |||||||||||||
Stock options | ||||||||||||||||
1/1/2007 | 1,010 | 106.15 | 4.7 | 55 | ||||||||||||
Granted | — | — | — | — | ||||||||||||
Exercised | (119 | ) | 112.33 | — | — | |||||||||||
Forfeited | (13 | ) | 111.14 | — | — | |||||||||||
12/31/2007 | 879 | 109.92 | 3.6 | 28 | ||||||||||||
Convertible bonds | ||||||||||||||||
1/1/2007 | 6,411 | 202.20 | 4.2 | 22 | ||||||||||||
Granted | — | — | — | — | ||||||||||||
Exercised | (68 | ) | 150.98 | — | — | |||||||||||
Forfeited | (194 | ) | 207.12 | — | — | |||||||||||
12/31/2007 | 6,149 | 202.61 | 3.2 | 0 | ||||||||||||
F-67
Table of Contents
2007 | ||||||||||||||||
Product | Consulting | Training | Total | |||||||||||||
€ millions | ||||||||||||||||
External revenue from reportable segments | 7,369 | 2,369 | 493 | 10,231 | ||||||||||||
Other | 11 | |||||||||||||||
Total consolidated revenue | 10,242 | |||||||||||||||
Segment result | 4,300 | 631 | 209 | 5,140 | ||||||||||||
Unallocated corporate revenue and expenses | (2,408 | ) | ||||||||||||||
Operating income | 2,732 | |||||||||||||||
Other non-operating income/expense, net | 1 | |||||||||||||||
Financial income, net | 124 | |||||||||||||||
Income before income taxes and minority interests | 2,857 | |||||||||||||||
Other information | ||||||||||||||||
Depreciation and amortization | (98 | ) | (33 | ) | (4 | ) |
2006 | ||||||||||||||||
Product | Consulting | Training | Total | |||||||||||||
€ millions | ||||||||||||||||
External revenue from reportable segments | 6,643 | 2,300 | 440 | 9,383 | ||||||||||||
Other | 10 | |||||||||||||||
Total consolidated revenue | 9,393 | |||||||||||||||
Segment result | 4,034 | 596 | 167 | 4,797 | ||||||||||||
Unallocated corporate revenue and expenses | (2,219 | ) | ||||||||||||||
Operating income | 2,578 | |||||||||||||||
Other non-operating income/expense, net | (12 | ) | ||||||||||||||
Financial income, net | 122 | |||||||||||||||
Income before income taxes and minority | ||||||||||||||||
interests | 2,688 | |||||||||||||||
Other information | ||||||||||||||||
Depreciation and amortization | (86 | ) | (24 | ) | (7 | ) |
F-68
Table of Contents
2005 | ||||||||||||||||
Product | Consulting | Training | Total | |||||||||||||
€ millions | ||||||||||||||||
External revenue from reportable segments | 6,041 | 2,078 | 380 | 8,499 | ||||||||||||
Other | 10 | |||||||||||||||
Total consolidated revenue | 8,509 | |||||||||||||||
Segment result | 3,594 | 458 | 132 | 4,184 | ||||||||||||
Unallocated corporate revenue and expenses | (1,847 | ) | ||||||||||||||
Operating income | 2,337 | |||||||||||||||
Other non-operating income/expense, net | (25 | ) | ||||||||||||||
Financial income, net | 11 | |||||||||||||||
Income before income taxes and minority interests | 2,323 | |||||||||||||||
Other information | ||||||||||||||||
Depreciation and amortization | (84 | ) | (25 | ) | (7 | ) |
F-69
Table of Contents
2007 | 2006 | 2005 | ||||||||||
€ millions | ||||||||||||
Unallocated corporate revenue and expenses: | ||||||||||||
External revenue from services provided outside of the reportable segments | (11 | ) | (10 | ) | (10 | ) | ||||||
Development expense — Management view | 1,769 | 1,642 | 1,339 | |||||||||
Administration and other corporate expenses — Management view | 555 | 488 | 473 | |||||||||
Share-based compensation expenses | 95 | 99 | 45 | |||||||||
2,408 | 2,219 | 1,847 | ||||||||||
Revenue by location of customers | Revenue by location of companies | |||||||||||||||||||||||
2007 | 2006 | 2005 | 2007 | 2006 | 2005 | |||||||||||||||||||
€ millions | ||||||||||||||||||||||||
Germany | 2,004 | 1,907 | 1,810 | 2,146 | 2,031 | 1,906 | ||||||||||||||||||
Rest of EMEA(1) | 3,386 | 2,994 | 2,709 | 3,327 | 2,959 | 2,670 | ||||||||||||||||||
Total EMEA | 5,390 | 4,901 | 4,519 | 5,473 | 4,990 | 4,576 | ||||||||||||||||||
United States | 2,706 | 2,609 | 2,340 | 2,689 | 2,588 | 2,340 | ||||||||||||||||||
Rest of Americas | 871 | 776 | 656 | 865 | 753 | 654 | ||||||||||||||||||
Total Americas | 3,577 | 3,385 | 2,996 | 3,554 | 3,341 | 2,994 | ||||||||||||||||||
Japan | 447 | 431 | 406 | 443 | 429 | 402 | ||||||||||||||||||
Rest of Asia Pacific Japan | 828 | 676 | 588 | 772 | 633 | 537 | ||||||||||||||||||
Total Asia Pacific Japan | 1,275 | 1,107 | 994 | 1,215 | 1,062 | 939 | ||||||||||||||||||
10,242 | 9,393 | 8,509 | 10,242 | 9,393 | 8,509 | |||||||||||||||||||
F-70
Table of Contents
Software and software-related service revenue by location of customers | Software and software-related service revenue by location of companies | |||||||||||||||||||||||
2007 | 2006 | 2005 | 2007 | 2006 | 2005 | |||||||||||||||||||
€ millions | ||||||||||||||||||||||||
Germany | 1,432 | 1,342 | 1,237 | 1,526 | 1,421 | 1,303 | ||||||||||||||||||
Rest of EMEA(1) | 2,541 | 2,169 | 1,957 | 2,523 | 2,169 | 1,943 | ||||||||||||||||||
Total EMEA | 3,973 | 3,511 | 3,194 | 4,049 | 3,590 | 3,246 | ||||||||||||||||||
United States | 1,838 | 1,726 | 1,553 | 1,825 | 1,710 | 1,557 | ||||||||||||||||||
Rest of Americas | 657 | 556 | 469 | 650 | 534 | 466 | ||||||||||||||||||
Total Americas | 2,495 | 2,282 | 2,022 | 2,475 | 2,244 | 2,023 | ||||||||||||||||||
Japan | 340 | 308 | 294 | 336 | 306 | 291 | ||||||||||||||||||
Rest of Asia Pacific Japan | 619 | 495 | 445 | 567 | 456 | 395 | ||||||||||||||||||
Total Asia Pacific Japan | 959 | 803 | 739 | 903 | 762 | 686 | ||||||||||||||||||
7,427 | 6,596 | 5,955 | 7,427 | 6,596 | 5,955 | |||||||||||||||||||
Property, plant, and equipment, net | Intangible assets, net | |||||||||||||||||||||||
2007 | 2006 | 2005 | 2007 | 2006 | 2005 | |||||||||||||||||||
€ millions | ||||||||||||||||||||||||
Germany | 923 | 858 | 764 | 216 | 149 | 87 | ||||||||||||||||||
Rest of EMEA(1) | 135 | 133 | 129 | 35 | 1 | 0 | ||||||||||||||||||
Total EMEA | 1,058 | 991 | 893 | 251 | 150 | 87 | ||||||||||||||||||
United States | 167 | 152 | 155 | 138 | 95 | 14 | ||||||||||||||||||
Rest of Americas | 13 | 10 | 9 | 14 | 18 | 33 | ||||||||||||||||||
Total Americas | 180 | 162 | 164 | 152 | 113 | 47 | ||||||||||||||||||
Japan | 4 | 4 | 4 | 0 | 0 | 0 | ||||||||||||||||||
Rest of Asia Pacific Japan | 74 | 49 | 34 | 0 | 0 | 6 | ||||||||||||||||||
Total Asia Pacific Japan | 78 | 53 | 38 | 0 | 0 | 6 | ||||||||||||||||||
1,316 | 1,206 | 1,095 | 403 | 263 | 140 | |||||||||||||||||||
F-71
Table of Contents
(29) | BOARD OF DIRECTORS |
Membership on supervisory boards and other comparable | ||
governing bodies of enterprises, other than subsidiaries of SAP on | ||
December 31, 2007(1) (excluding former Executive Board members) | ||
Prof. Dr. Henning Kagermann | ||
Chief Executive Officer Overall responsibility for SAP’s strategy and business development, product development for large enterprises, Global Communications, Internal Audit, Top Talent Management | Supervisory Board, Deutsche Bank AG, Frankfurt am Main, Germany Supervisory Board, Münchener Rückversicherungs-Gesellschaft AG, Munich, Germany Board of Directors, Nokia Corporation, Espoo, Finland (from May 3, 2007) | |
Léo Apotheker | ||
Deputy Chief Executive Officer Sales, Consulting, Education, Marketing, Partner Management | Supervisory Board, AXA, Paris, France | |
Dr. Werner Brandt | ||
Chief Financial Officer Finance and Administration, Shared Services, SAP Ventures, Global Intellectual Property, Mergers & Acquisitions | Supervisory Board, LSG Lufthansa Service Holding AG, Neu-Isenburg, Germany Supervisory Board, QIAGEN N.V., Venlo, The Netherlands (from June 20, 2007) | |
Prof. Dr. Claus E. Heinrich | ||
Labor Relations Director Global Human Resources, Internal SAP IT, SAP Labs network, Internal Business Processes | ||
Gerhard Oswald | ||
Global Service and Support, SAP Business ByDesign | ||
John Schwarz (from March 1, 2008) | ||
Chief Executive Officer of Business Objects Business Objects business unit, including product development,go-to-market activities, and services and support | Board of Directors, Synopsys, Inc., Mountain View, California, USA | |
Dr. Peter Zencke | ||
Application Platform, Research, SAP Business ByDesign, SAP Business One | Supervisory Board, SupplyOn AG, Hallbergmoos, Germany Supervisory Board, MeVis Medical Solutions AG, Bremen, Germany (from August 22, 2007) | |
Shai Agassi (until March 31, 2007) | ||
Product development and technology, Industry solutions Product and industry marketing |
(1) | Memberships on supervisory boards and comparable governing bodies of SAP’s subsidiaries can be obtained from the Company on request. |
F-72
Table of Contents
Membership on other supervisory boards and comparable | ||
governing bodies of enterprises other than SAP on December 31, 2007 | ||
(excluding former Supervisory Board members) | ||
Prof. Dr. h.c. mult. Hasso Plattner(2), (4), (5), (7) | ||
Chairman of the Supervisory Board | ||
Lars Lamadé(1),(4), (7) | ||
Deputy Chairman Project Manager Service & Support | ||
Pekka Ala-Pietilä(5) | ||
Co-founder and CEO Blyk Ltd. London, Great Britain | Board of Directors, Pöyry Plc, Vantaa, Finland Board of Directors, CVON Group Limited, London, Great Britain Board of Directors, CVON Limited, London, Great Britain Board of Directors, CVON Innovations Limited, London, Great Britain Board of Directors, Blyk Services Oy, Helsinki, Finland Board of Directors, CVON Innovation Services Oy, Turku, Finland (from February 9, 2007) Board of Directors, CVON Future Limited, London, UK (from February 5, 2007) Board of Directors, HelloSoft Inc., San José, USA (from February 1, 2007) | |
Thomas Bamberger (from May 10, 2007)(1), (3) | ||
Head of Operations Global Service & Support | ||
Chief Controlling Officer Research & Breakthrough Innovation | ||
Chief Controlling Officer Global Service & Support | ||
Panagiotis Bissiritsas (from May 10, 2007)(1), (2), (6) | ||
Support Expert | ||
Willi Burbach(1), (5), (7) | ||
Developer | ||
Helga Classen(1), (4), (7) | ||
Chairperson of the Works Council of SAP AG and SAP Hosting AG & Co. KG | ||
Prof. Dr. Wilhelm Haarmann(2), (6), (7) | ||
Attorney-at-law, certified public auditor, certified tax advisor HAARMANN Partnerschaftsgesellschaft, Rechtsanwälte, Steuerberater, Wirtschaftsprüfer, Frankfurt am Main, Germany | Supervisory Board, Aareon AG, Mainz, Germany Supervisory Board, Vodafone Holding GmbH, Düsseldorf, Germany | |
Peter Koop (from May 10, 2007)(1), (5) | ||
Industry Business Development Expert | ||
Dr. Gerhard Maier(1), (2),(3) | ||
Development project manager |
F-73
Table of Contents
Membership on other supervisory boards and comparable | ||
governing bodies of enterprises other than SAP on December 31, 2007 | ||
(excluding former Supervisory Board members) | ||
Dr. h.c. Hartmut Mehdorn(4) | ||
Chairman of the Executive Board, Deutsche Bahn AG, Berlin, Germany | Supervisory Board, DB Netz AG, Frankfurt am Main, Germany Supervisory Board, DEVK Deutsche Eisenbahn Versicherung Lebensversicherungsverein a.G., and DEVK Deutsche Eisenbahn Versicherung Sach- und HUK-Versicherungsverein a.G., Cologne, Germany Supervisory Board, Dresdner Bank AG, Frankfurt am Main, Germany Supervisory Board, DB Magnetbahn GmbH, Munich, Germany | |
Prof. Dr.-Ing. Dr. h.c. Dr. Ing. E.h. Joachim Milberg (from May 10, 2007)(2), (5), (7) | ||
Chairman of the Supervisory Board BMW AG, Munich, Germany | Supervisory Board, Bertelsmann AG, Gütersloh, Germany Supervisory Board, Festo AG, Esslingen, Germany Board of Directors, Deere & Company, Moline, Illinois, USA Supervisory Board. MAN AG, Munich, Germany (until May 10, 2007) | |
Prof. Dr. Dr. h.c. mult. August-Wilhelm Scheer(3), (6) | ||
Professor at Saarland University, Saarbrücken, Germany | Supervisory Board, IDS Scheer AG, Saarbrücken, Germany Supervisory Board, imc information multimedia communication AG, Saarbrücken, Germany Board of Trustees, Hasso-Plattner-Stiftung für Softwaresystemtechnik, Potsdam, Germany Supervisory Board, Saarbrücker Zeitung Verlag und Druckerei GmbH, Saarbrücken, Germany Member of the Senate, Fraunhofer-Gesellschaft zur Förderung der angewandten Forschung e.V., Munich, Germany Supervisory Board, Deutsche Messe AG, Hanover, Germany (from August 28, 2007) |
F-74
Table of Contents
Membership on other supervisory boards and comparable | ||
governing bodies of enterprises other than SAP on December 31, 2007 | ||
(excluding former Supervisory Board members) | ||
Dr. Erhard Schipporeit(3) | ||
Management Consultant | Supervisory Board, Commerzbank AG, Frankfurt am Main, Germany (until January 31, 2007) Supervisory Board, Talanx AG, Hanover, Germany Supervisory Board, Deutsche Börse AG, Frankfurt am Main, Germany Supervisory Board, HDI V.a.G., Hanover, Germany Supervisory Board, Hannover Rückversicherung AG, Hanover, Germany (from May 3, 2007) Supervisory Board, Career Concept AG, Munich, Germany (from December 7, 2007) Board of Directors, TUI Travel PLC, London, Great Britain (from October 21, 2007) | |
Stefan Schulz(1), (5), (6) Development Project Manager | ||
Prof. Dr.-Ing. Dr.-Ing. E.h. Klaus Wucherer (from May 10, 2007)(5) | ||
Member of the Corporate Executive Committee of Siemens AG, Munich, Germany | Supervisory Board, BSH Bosch und Siemens Hausgeräte GmbH, Munich, Germany Supervisory Board, Deutsche Messe AG, Hanover, Germany Supervisory Board, Infineon Technologies AG, Munich, Germany Chairman of the Advisory Board, Siemens S.A., Lisbon, Portugal Chairman of the Advisory Board, Siemens Ltd., Beijing, China Supervisory Board, Siemens Ltd., Mumbai, India Supervisory Board, LEONI AG, Nürnberg, Germany (from May 3, 2007) |
F-75
Table of Contents
Membership on other supervisory boards and comparable | ||
governing bodies of enterprises other than SAP on December 31, 2007 | ||
(excluding former Supervisory Board members) | ||
MEMBERS OF THE SUPERVISORY BOARD | ||
UNTIL MAY 10, 2007 | ||
Bernhard Koller | ||
Manager of idea management | ||
Christiane Kuntz-Mayr | ||
Development architect | ||
Dr. Barbara Schennerlein | ||
Principal consultant | ||
Dr. Dieter Spöri | ||
Head of Corporate Representation | ||
Federal Affairs, Daimler AG, | ||
Berlin, Germany | ||
Dr. h.c. Klaus Tschira | ||
Managing Director, Klaus Tschira | ||
Foundation gGmbH, Heidelberg, Germany |
F-76
Table of Contents
(30) | RELATED PARTY TRANSACTIONS |
F-77
Table of Contents
(31) | PRINCIPAL ACCOUNTANT FEES AND SERVICES |
2007 | 2006 | 2005 | ||||||||||
€ millions | ||||||||||||
Audit fees | 8.3 | 7.4 | 5.2 | |||||||||
Audit related fees | 0.2 | 0.6 | 1.1 | |||||||||
Tax fees | 0.0 | 0.1 | 0.2 | |||||||||
Other fees | 0.3 | 0.4 | 0.2 | |||||||||
8.8 | 8.5 | 6.7 | ||||||||||
F-78