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2014 consolidated financial stateMents ifrs
run simple
The Best-Run Businesses Run SAP®
Consolidated Financial Statements IFRS159
160 ConsolidatedIncomeStatements161 ConsolidatedStatementsofComprehensiveIncome162 ConsolidatedStatementsofFinancialPosition164 ConsolidatedStatementsofChangesinEquity166 ConsolidatedStatementsofCashFlows
167 NotestotheConsolidatedFinancialStatements
167 (1)GeneralInformationaboutConsolidatedFinancialStatements167 (2)ScopeofConsolidation168 (3)SummaryofSignificantAccountingPolicies183 (4)BusinessCombinations185 (5)Revenue186 (6)CostofSoftwareandSoftware-RelatedServices186 (7)Restructuring186 (8)EmployeeBenefitsExpenseandHeadcount188 (9)OtherNon-OperatingIncome/Expense,Net189 (10)FinancialIncome,Net189 (11)IncomeTax192 (12)EarningsperShare193 (13)OtherFinancialAssets194 (14)TradeandOtherReceivables195 (15)OtherNon-FinancialAssets196 (16)GoodwillandIntangibleAssets199 (17)Property,Plant,andEquipment199 (18)TradeandOtherPayables,FinancialLiabilities,andOtherNon-FinancialLiabilities203 (19)Provisions210 (20)DeferredIncome210 (21)TotalEquity212 (22)AdditionalCapitalDisclosures214 (23)OtherFinancialCommitments215 (24)LitigationandClaims220 (25)FinancialRiskFactors223 (26)FinancialRiskManagement230 (27)AdditionalFairValueDisclosuresonFinancialInstruments239 (28)Share-BasedPayments247 (29)SegmentandGeographicInformation250 (30)BoardofDirectors254 (31)RelatedPartyTransactions255 (32)PrincipalAccountantFeesandServices256 (33)GermanCodeofCorporateGovernance256 (34)EventsAftertheReportingPeriod257 (35)Subsidiaries,Associates,andOtherEquityInvestments
267 Management’sAnnualReportonInternalControloverFinancialReportingintheConsolidatedFinancialStatements
159
Consolidated Financial Statements IFRS
Consolidated Income Statements of SAP Group for the Years Ended December 31,€millions,unlessotherwisestated
Notes 2014 2013 2012
Cloudsubscriptionsandsupport 1,087 696 270
Software 4,399 4,516 4,658
Support 9,368 8,738 8,237
Softwareandsupport 13,767 13,254 12,895
Software and software-related service revenue 14,855 13,950 13,165Professional services and other service revenue 2,706 2,865 3,058
Total revenue (5) 17,560 16,815 16,223
Costofsoftwareandsoftware-relatedservices (6) –2,894 –2,629 –2,553
Costofprofessionalservicesandotherservices –2,379 –2,402 –2,520
Total cost of revenue –5,272 –5,031 –5,073Gross profit 12,288 11,784 11,149Researchanddevelopment –2,331 –2,282 –2,261
Salesandmarketing –4,304 –4,131 –3,912
Generalandadministration –892 –866 –949
Restructuring (7) –126 –70 –8
TomorrowNowandVersatalitigation (24) –309 31 –2
Otheroperatingincome/expense,net 4 12 23
Total operating expenses –13,230 –12,336 –12,181Operating profit 4,331 4,479 4,041
Other non-operating income/expense, net (9) 49 –17 –173Financeincome 127 115 103
Financecosts –152 –181 –175
Financial income, net (10) –25 –66 –72Profit before tax 4,355 4,396 3,796
IncometaxTomorrowNowandVersatalitigation 86 –8 0
Otherincometaxexpense –1,161 –1,063 –993
Incometaxexpense (11) –1,075 –1,071 –993
Profit after tax 3,280 3,325 2,803attributabletoownersofparent 3,280 3,326 2,803
attributabletonon-controllinginterests 0 –1 0
Earnings per share, basic (in €) (12) 2.75 2.79 2.35Earnings per share, diluted (in €) (12) 2.74 2.78 2.35
TheaccompanyingNotesareanintegralpartoftheseConsolidatedFinancialStatements.
160 Consolidated Financial Statements IFRS
Consolidated Statements of Comprehensive Income of SAP Group for the Years Ended December 31,€millions
Notes 2014 2013 2012
Profit after tax 3,280 3,325 2,803Itemsthatwillnotbereclassifiedtoprofitorloss
Remeasurementsondefinedbenefitpensionplans (19) –30 16 –12
Incometaxrelatingtoitemsthatwillnotbereclassified (11) 7 –3 4
Other comprehensive income after tax for items that will not be reclassified to profit or loss
–23 13 –8
Itemsthatwillbereclassifiedsubsequentlytoprofitorloss (21)
Exchangedifferences 1,165 –576 –214
Available-for-salefinancialassets (27) 128 60 13
Cashflowhedges (26) –38 0 63
Incometaxrelatingtoitemsthatwillbereclassified (11) 31 –8 –20
Other comprehensive income after tax for items that will be reclassified to profit or loss
1,286 –524 –157
Other comprehensive income net of tax 1,263 –511 –165Total comprehensive income 4,543 2,814 2,638
attributabletoownersofparent 4,543 2,815 2,638
attributabletonon-controllinginterests 0 –1 0
TheaccompanyingNotesareanintegralpartoftheseConsolidatedFinancialStatements.
161Consolidated Statements of Comprehensive Income
Consolidated Statements of Financial Position of SAP Group as at December 31,€millions
Notes 2014 2013
Cashandcashequivalents 3,328 2,748
Otherfinancialassets (13) 678 251
Tradeandotherreceivables (14) 4,330 3,864
Othernon-financialassets (15) 431 346
Taxassets 214 142
Total current assets 8,980 7,351Goodwill (16) 20,945 13,690
Intangibleassets (16) 4,608 2,954
Property,plant,andequipment (17) 2,102 1,820
Otherfinancialassets (13) 1,021 607
Tradeandotherreceivables (14) 100 98
Othernon-financialassets (15) 164 107
Taxassets 231 172
Deferredtaxassets (11) 355 292
Total non-current assets 29,527 19,739Total assets 38,507 27,091
162 Consolidated Financial Statements IFRS
Notes 2014 2013
Tradeandotherpayables (18) 1,007 850
Taxliabilities 339 433
Financialliabilities (18) 2,561 748
Othernon-financialliabilities (18) 2,807 2,562
ProvisionTomorrowNowandVersatalitigation (24) 1 223
Otherprovisions 149 123
Provisions (19) 150 346
Deferredincome (20) 1,681 1,408
Total current liabilities 8,544 6,347Tradeandotherpayables (18) 55 45
Taxliabilities 371 319
Financialliabilities (18) 8,980 3,758
Othernon-financialliabilities (18) 219 257
Provisions (19) 149 132
Deferredtaxliabilities (11) 513 110
Deferredincome (20) 78 74
Total non-current liabilities 10,366 4,695Total liabilities 18,909 11,043
Issuedcapital 1,229 1,229
Sharepremium 614 551
Retainedearnings 18,317 16,258
Othercomponentsofequity 568 –718
Treasuryshares –1,224 –1,280
Equity attributable to owners of parent 19,504 16,040
Non-controlling interests 94 8Total equity (21) 19,598 16,048
Total equity and liabilities 38,507 27,091
TheaccompanyingNotesareanintegralpartoftheseConsolidatedFinancialStatements.
163Consolidated Statements of Financial Position
Consolidated Statements of Changes in Equity of SAP Group as at December 31,€millions
EquityAttributabletoOwnersofParent EquityAttributabletoOwnersofParent Non-ControllingInterests TotalEquity
IssuedCapital SharePremium RetainedEarnings
OtherComponentsofEquity OtherComponentsofEquity TreasuryShares Total
ExchangeDifferences Available-for-SaleFinancialAssets
CashFlowHedges
Notereference (21) (21) (21) StatementofComprehensiveIncome StatementofComprehensiveIncome (21) (4)
January 1, 2012 1,228 419 12,448 –19 9 –27 –1,377 12,681 8 12,689Profitaftertax 2,803 2,803 2,803Othercomprehensiveincome –8 –217 13 47 –165 –165
Comprehensive income 2,795 –217 13 47 2,638 2,638Share-basedpayments 41 41 41Dividends –1,310 –1,310 –1,310
Issuanceofsharesundershare-basedpayments
1 14 15 15
Purchaseoftreasuryshares –53 –53 –53
Reissuanceoftreasurysharesundershare-basedpayments
18 93 111 111
Otherchanges 2 2 2December 31, 2012 1,229 492 13,934 –236 22 20 –1,337 14,125 8 14,133
Profitaftertax 3,326 3,326 –1 3,325Othercomprehensiveincome 13 –584 60 0 –511 –511
Comprehensive income 3,339 –584 60 0 2,815 –1 2,814Share-basedpayments 30 30 30Dividends –1,013 –1,013 –1,013
Reissuanceoftreasurysharesundershare-basedpayments
29 57 86 86
December 31, 2013 1,229 551 16,258 –820 82 20 –1,280 16,040 8 16,048Profitaftertax 3,280 3,280 0 3,280Othercomprehensiveincome –23 1,186 128 –28 1,263 1,263
Comprehensive income 3,257 1,186 128 –28 4,543 0 4,543Share-basedpayments 34 34 34Dividends –1,194 –1,194 –1,194
Reissuanceoftreasurysharesundershare-basedpayments
29 56 85 85
Additionsfrombusinesscombinations 0 86 86Otherchanges –4 –4 0 –4December 31, 2014 1,229 614 18,317 366 210 –8 –1,224 19,504 94 19,598TheaccompanyingNotesareanintegralpartoftheseConsolidatedFinancialStatements.
164 Consolidated Financial Statements IFRS
Consolidated Statements of Changes in Equity of SAP Group as at December 31,€millions
EquityAttributabletoOwnersofParent EquityAttributabletoOwnersofParent Non-ControllingInterests TotalEquity
IssuedCapital SharePremium RetainedEarnings
OtherComponentsofEquity OtherComponentsofEquity TreasuryShares Total
ExchangeDifferences Available-for-SaleFinancialAssets
CashFlowHedges
Notereference (21) (21) (21) StatementofComprehensiveIncome StatementofComprehensiveIncome (21) (4)
January 1, 2012 1,228 419 12,448 –19 9 –27 –1,377 12,681 8 12,689Profitaftertax 2,803 2,803 2,803Othercomprehensiveincome –8 –217 13 47 –165 –165
Comprehensive income 2,795 –217 13 47 2,638 2,638Share-basedpayments 41 41 41Dividends –1,310 –1,310 –1,310
Issuanceofsharesundershare-basedpayments
1 14 15 15
Purchaseoftreasuryshares –53 –53 –53
Reissuanceoftreasurysharesundershare-basedpayments
18 93 111 111
Otherchanges 2 2 2December 31, 2012 1,229 492 13,934 –236 22 20 –1,337 14,125 8 14,133
Profitaftertax 3,326 3,326 –1 3,325Othercomprehensiveincome 13 –584 60 0 –511 –511
Comprehensive income 3,339 –584 60 0 2,815 –1 2,814Share-basedpayments 30 30 30Dividends –1,013 –1,013 –1,013
Reissuanceoftreasurysharesundershare-basedpayments
29 57 86 86
December 31, 2013 1,229 551 16,258 –820 82 20 –1,280 16,040 8 16,048Profitaftertax 3,280 3,280 0 3,280Othercomprehensiveincome –23 1,186 128 –28 1,263 1,263
Comprehensive income 3,257 1,186 128 –28 4,543 0 4,543Share-basedpayments 34 34 34Dividends –1,194 –1,194 –1,194
Reissuanceoftreasurysharesundershare-basedpayments
29 56 85 85
Additionsfrombusinesscombinations 0 86 86Otherchanges –4 –4 0 –4December 31, 2014 1,229 614 18,317 366 210 –8 –1,224 19,504 94 19,598TheaccompanyingNotesareanintegralpartoftheseConsolidatedFinancialStatements.
165Consolidated Statements of Changes in Equity
Consolidated Statements of Cash Flows of SAP Group for the Years Ended December 31, €millions
Notes 2014 2013 2012
Profit after tax 3,280 3,325 2,803Adjustmentstoreconcileprofitaftertaxestonetcashprovidedbyoperatingactivities:
Depreciationandamortization (16),(17) 1,010 951 863
Incometaxexpense (11) 1,075 1,071 993
Financialincome,net (10) 25 66 72
Decrease/increaseinsalesandbaddebtallowancesontradereceivables 47 42 –25
Otheradjustmentsfornon-cashitems 85 57 31
Decrease/increaseintradeandotherreceivables –286 –110 –298
Decrease/increaseinotherassets –344 –131 –23
Decrease/increaseintradepayables,provisions,andotherliabilities 573 –176 420
Decrease/increaseindeferredincome 16 125 154
CashoutflowsduetoTomorrowNowandVersatalitigation (24) –555 –1 7
Interestpaid –130 –159 –165
Interestreceived 59 67 92
Incometaxespaid,netofrefunds –1,356 –1,295 –1,102
Net cash flows from operating activities 3,499 3,832 3,822Businesscombinations,netofcashandcashequivalentsacquired –6,360 –1,160 –6,068
Cashpaymentsforderivativefinancialinstrumentsrelatedtobusinesscombinations –111 0 –26
Totalcashoutflowsforbusinesscombinations,netofcashandcashequivalentsacquired (4) –6,472 –1,160 –6,094
Purchaseofintangibleassetsandproperty,plant,andequipment –737 –566 –541
Proceedsfromsalesofintangibleassetsorproperty,plant,andequipment 46 55 39
Purchaseofequityordebtinstrumentsofotherentities –910 –1,531 –1,022
Proceedsfromsalesofequityordebtinstrumentsofotherentities 833 1,421 1,654
Net cash flows from investing activities –7,240 –1,781 –5,964Dividendspaid (22) –1,194 –1,013 –1,310
Purchaseoftreasuryshares (22) 0 0 –53
Proceedsfromreissuanceoftreasuryshares 51 49 90
Proceedsfromissuingshares(share-basedpayments) 0 0 15
Proceedsfromborrowings 7,503 1,000 5,778
Repaymentsofborrowings –2,062 –1,625 –4,714
Net cash flows from financing activities 4,298 –1,589 –194Effect of foreign currency rates on cash and cash equivalents 23 –191 –152Net decrease/increase in cash and cash equivalents 580 271 –2,488Cash and cash equivalents at the beginning of the period (22) 2,748 2,477 4,965Cash and cash equivalents at the end of the period (22) 3,328 2,748 2,477
TheaccompanyingNotesareanintegralpartoftheseConsolidatedFinancialStatements.
166 Consolidated Financial Statements IFRS
(1) GENERAL INFORMATION ABOUT CONSOLIDATED FINANCIAL STATEMENTSTheaccompanyingConsolidatedFinancialStatementsofSAPSEanditssubsidiaries(collectively,“we,”“us,”“our,”“SAP,”“Group,”and“Company”)havebeenpreparedinaccordancewithInternationalFinancialReportingStandards(IFRS).
WehaveappliedallstandardsandinterpretationsthatwereeffectiveonandendorsedbytheEuropeanUnion(EU)asatDecember31,2014.TherewerenostandardsorinterpretationsimpactingourConsolidatedFinancialStatementsfortheyearsendedDecember31,2014,2013,and2012,thatwereeffectivebutnotyetendorsed.ThereforeourConsolidatedFinancialStatementscomplywithbothIFRSasissuedbytheInternationalAccountingStandardsBoard(IASB)andwithIFRSasendorsedbytheEU.
WitheffectfromJuly7,2014,SAPAGwasconvertedtoaEuropeanCompany(SocietasEuropaea,SE),andsincethisdate,thatcompany’slegalnameisSAPSE.
OurExecutiveBoardapprovedtheConsolidatedFinancialStatementsonFebruary19,2015,forsubmissiontoourSupervisoryBoard.
AllamountsincludedintheConsolidatedFinancialStatementsarereportedinmillionsofeuros(€millions)exceptwhereotherwisestated.Duetorounding,numberspresentedthroughoutthisdocumentmaynotadduppreciselytothetotalsweprovideandpercentagesmaynotpreciselyreflecttheabsolutefigures.
(2) SCOPE OF CONSOLIDATIONThefollowingtablesummarizesthechangesinthenumberofentitiesincludedintheConsolidatedFinancialStatements.
Entities Consolidated in the Financial Statements
German Foreign Total
December 31, 2012 22 245 267Additions 1 24 25
Disposals –1 –19 –20
December 31, 2013 22 250 272Additions 2 56 58
Disposals –2 –41 –43
December 31, 2014 22 265 287
Theadditionsrelatetolegalentitiesaddedinconnectionwithacquisitionsandfoundations.Thedisposalsareduetomergersandliquidationsoflegalentities.
Notes to the Consolidated Financial Statements
167Notes to the Consolidated Financial Statements
Additionally,wehavechangedtheclassificationoftheexpensesresultingfromtheVersatalitigationinourconsolidatedincomestatementsfromcostofsoftwareandsoftware-relatedservicestotheTomorrowNowlitigationlineitemandrenamedthislineitemtoTomorrowNowandVersatalitigation.Prior-yearamountshavebeenadjustedaccordingly(2013:€31million,2012:–€2million).Webelievethatthisreclassificationhelpsthecomparabilityofourongoingoperatingperformanceacrossperiods.Formoreinformationaboutthislitigation,seeNote(24).
Wehavereclassifiedourprovisionsforshare-basedpaymentsfromotherprovisionstoothernon-financialliabilities.Prioryearamounts(December31,2013:€445million)havebeenreclassifiedaccordingly.Webelievethataclassificationasothernon-financialliabilitiesreflectsthesubstanceofthisparticularliabilitymoreappropriatelythanaclassificationunderotherprovisions.
Startingfrom2014,wepresentcashpaymentsforderivativefinancialinstrumentsrelatedtobusinesscombinationsseparatelyinourconsolidatedstatementofcashflows.Prioryearamounts(2013:€0million;2012:€26million)havebeenreclassifiedaccordingly.Thisreclassificationimprovesthetransparencyofthecashflowsforbusinesscombinations.
Business Combinations and GoodwillWedecideonatransaction-by-transactionbasiswhethertomeasurethenon-controllinginterestintheacquireeatfairvalueorattheproportionateshareoftheacquiree’sidentifiablenetassets.Acquisition-relatedcostsareaccountedasexpenseintheperiodsinwhichthecostsareincurredandtheservicesarereceived,withtheexpensebeingclassifiedasgeneralandadministrationexpense.
(3) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(3a) Bases of MeasurementTheConsolidatedFinancialStatementshavebeenpreparedonthehistoricalcostbasisexceptforthefollowing:–Derivativefinancialinstruments,available-for-salefinancialassets,andliabilitiesforcash-settledshare-basedpaymentsaremeasuredatfairvalue.
–Monetaryassetsandliabilitiesdenominatedinforeigncurrenciesaretranslatedatperiod-endexchangerates.
–Post-employmentbenefitsaremeasuredaccordingtoIAS19(EmployeeBenefits)asdescribedinNote(19a).
Whereapplicable,informationaboutthemethodsandassumptionsusedindeterminingtherespectivemeasurementbasesisdisclosedintheNotesspecifictothatassetorliability.
(3b) Relevant Accounting PoliciesReclassificationsWehavemodifiedtherevenuesectionofourconsolidatedincomestatementtoemphasizethecombinationofourcloudbusinessandourcoreon-premisebusiness.Withthismodification,onlytheorderandsubtotalswerechanged;thecontentoflineitemsremainedunchanged.Softwareandsoftware-relatedservicerevenuenowstartswiththelineitemcloudsubscriptionsandsupportandisfollowedbylineitemssoftwareandsupportofouron-premiseactivities.Thesoftwareandcloudsubscriptionssubtotalwasdeletedandanewsumforsoftwareandsupportwasadded.Comparativeamountsforpriorperiodspresentedhavebeenreclassifiedaccordinglytoconformtothecurrentpresentation.
168 Consolidated Financial Statements IFRS
Foreign CurrenciesIncomeandexpensesandoperatingcashflowsofourforeignsubsidiariesthatuseafunctionalcurrencyotherthantheeuroaretranslatedataverageratesofexchangecomputedonamonthlybasis.Exchangedifferencesresultingfromforeigncurrencytransactionsarerecognizedinothernon-operatingincome/expense,net.
TheexchangeratesofkeycurrenciesaffectingtheCompanywereasfollows:
Exchange RatesEquivalentto€1
ClosingRateasatDecember31 AnnualAverageExchangeRate
2014 2013 2014 2013 2012
U.S.dollar USD 1.2141 1.3791 1.3198 1.3301 1.2862
Poundsterling GBP 0.7789 0.8337 0.8037 0.8482 0.8104
Japaneseyen JPY 145.23 144.72 140.61 130.21 103.05
Swissfranc CHF 1.2024 1.2276 1.2132 1.2302 1.2055
Canadiandollar CAD 1.4063 1.4671 1.4645 1.3710 1.2843
Australiandollar AUD 1.4829 1.5423 1.4650 1.3944 1.2419
Revenue Recognition
Classes of RevenueWederiveourrevenuefromfeeschargedtoourcustomersfor(a)theuseofourhostedcloudofferings,(b)licensestoouron-premisesoftwareproductsand(c)support,consulting,customer-specificon-premisesoftwaredevelopmentarrangements,training,andotherservices.
Softwareandsoftware-relatedservicerevenue,aspresentedinourConsolidatedIncomeStatements,isthesumofourcloudsubscriptionsandsupportrevenue,oursoftwarerevenueandoursupportrevenue.
–Revenuefromcloudsubscriptionsandsupportrepresentsfeesearnedfromprovidingcustomerswith:Software-as-a-Service(SaaS),thatis,arighttousesoftwarefunctionalityinacloud-based-infrastructure(hosting)providedbySAP,wherethecustomerdoesnothavetherighttoterminatethehostingcontractandtakepossessionofthesoftwaretorunitonthecustomer’sownITinfrastructureorbyathirdpartyhostingproviderwithoutsignificantpenalty,orAdditionalpremiumsupportbeyondtheregularsupportwhichisembeddedinthebasiccloudsubscriptionfees,orHostingservicesandrelatedapplicationmanagementservicesforsoftwarehostedbySAP,wherethecustomerhastherighttoterminatethehostingcontractandtakepossessionofthesoftwareatanytimewithoutsignificantpenalty.
169Notes to the Consolidated Financial Statements
Timing of Revenue RecognitionWedonotstartrecognizingrevenuefromcustomerarrangementsbeforeevidenceofanarrangementexistsandtheamountofrevenueandassociatedcostscanbemeasuredreliably,andcollectionoftherelatedreceivableisprobable.If,foranyofourproductorserviceofferings,wedetermineattheoutsetofanarrangementthattheamountofrevenuecannotbemeasuredreliably,weconcludethattheinflowofeconomicbenefitsassociatedwiththetransactionisnotprobable,andwedeferrevenuerecognitionuntilthearrangementfeebecomesdueandpayablebythecustomer.If,attheoutsetofanarrangement,wedeterminethatcollectabilityisnotprobable,weconcludethattheinflowofeconomicbenefitsassociatedwiththetransactionisnotprobable,andwedeferrevenuerecognitionuntiltheearlierofwhencollectabilitybecomesprobableorpaymentisreceived.Ifacustomerisspecificallyidentifiedasabaddebtor,westoprecognizingrevenuefromthecustomerexcepttotheextentofthefeesthathavealreadybeencollected.
Cloudsubscriptionandsupportrevenueisrecognizedastheservicesareperformed.Whereaperiodicalfixedfeeisagreedfortherighttocontinuouslyaccessanduseacloudofferingforacertainterm,thefeeisrecognizedratablyoverthetermcoveredbythefixedfee.Feesthatarebasedonactualtransactionvolumesarerecognizedasthetransactionsoccur.
Revenuefromthesaleofperpetuallicensesofourstandardon-premisesoftwareproductsisrecognizedupondeliveryofthesoftware,thatis,whenthecustomerhasaccesstothesoftware.Occasionally,welicenseon-premisesoftwareforaspecifiedperiodoftime.Revenuefromshort-termtime-basedlicenses,whichusuallyincludesupportservicesduringthelicenseperiod,isrecognizedratablyoverthelicenseterm.Revenuefrommulti-yeartime-basedlicensesthatincludesupportservices,whetherseparatelypricedornot,isrecognizedratablyoverthelicensetermunlessasubstantivesupportservicerenewalrateexists;ifthisisthecase,theamountallocatedtothedeliveredsoftwareisrecognizedassoftwarerevenuebasedontheresidualmethodoncethebasiccriteriadescribedabovehavebeenmet.
–Softwarerevenuerepresentsfeesearnedfromthesaleorlicenseofsoftwaretocustomersforuseonthecustomer’spremises,inotherwords,wherethecustomerhastherighttotakepossessionofthesoftwareforinstallationonthecustomer’spremises(on-premisesoftware).Softwarerevenueincludesrevenuefromboth,thesaleofourstandardsoftwareproductsandcustomer-specificon-premisesoftwaredevelopmentagreements.
–Supportrevenuerepresentsfeesearnedfromprovidingcustomerswithunspecifiedfuturesoftwareupdates,upgrades,andenhancements,andtechnicalproductsupportservicesforon-premisesoftwareproducts.Wedonotsellseparatelytechnicalproductsupportorunspecifiedsoftwareupgrades,updates,andenhancements.Accordingly,wedonotdistinguishwithinsoftwareandsoftware-relatedservicerevenueorwithincostofsoftwareandsoftware-relatedservicestheamountsattributabletotechnicalsupportservicesandunspecifiedsoftwareupgrades,updates,andenhancements.
ProfessionalservicesandotherservicerevenueaspresentedinourConsolidatedIncomeStatementsisthesumofourconsultingrevenueandotherservicerevenue.–Revenuefromconsultingcontractsprimarilyrepresentsfeesearnedfromprovidingcustomerswithconsultingserviceswhichprimarilyrelatetotheinstallationandconfigurationofourcloudsubscriptionsandon-premisesoftwareproducts.
–Revenuefromotherservicesmainlyrepresentsfeesearnedfromprovidingcustomerswithtrainingservices,andmessagingservices(primarilytransmissionofelectronictextmessagesfromonemobilephoneprovidertoanother).
Weaccountforout-of-pocketexpensesinvoicedbySAPandreimbursedbycustomersascloudsubscriptionandsupport,support,consulting,orotherservicerevenue,dependingonthenatureoftheserviceforwhichtheout-of-pocketexpenseswereincurred.
170 Consolidated Financial Statements IFRS
Werecognizesupportrevenuebasedonourperformanceunderthesupportarrangements.Underourmajorsupportservices,ourperformanceobligationistostandreadytoprovidetechnicalproductsupportandtoprovideunspecifiedupdates,upgradesandenhancementsonawhen-and-if-availablebasis.Forthesesupportservices,werecognizerevenueratablyoverthetermofthesupportarrangement.
Werecognizeprofessionalservicesandotherservicerevenueastheservicesarerendered.Usually,ourconsultingcontractsdonotinvolvesignificantproduction,modification,orcustomizationofsoftwareandtherelatedrevenueisrecognizedastheservicesareprovidedusingthepercentage-of-completionmethodofaccounting.Formessagingservices,wemeasuretheprogressofservicerenderingbasedonthenumberofmessagessuccessfullyprocessedanddeliveredexceptforfixed-pricemessagingarrangements,forwhichrevenueisrecognizedratablyoverthecontractualtermofthearrangement.
Measurement of RevenueRevenueisrecognizednetofreturnsandallowances,tradediscounts,andvolumerebates.
Ourcontributionstoresellersthatallowourresellerstoexecutequalifiedandapprovedmarketingactivitiesarerecognizedasanoffsettorevenue,unlessweobtainaseparateidentifiablebenefitforthecontributionandthefairvalueofthatbenefitisreasonablyestimable.
Multiple-Element ArrangementsWecombinetwoormorecustomercontractswiththesamecustomerandaccountforthecontractsasasinglecontractifthecontractsarenegotiatedasapackageorotherwiselinked.Thus,themajorityofourcontractsthatcontaincloudofferingsoron-premisesoftwarealsoincludeothergoodsorservices(multiple-elementarrangements).
Ingeneral,ouron-premisesoftwarelicenseagreementsdonotincludeacceptance-testingprovisions.Ifanarrangementallowsforcustomeracceptance-testingofthesoftware,wedeferrevenueuntiltheearlierofcustomeracceptanceorwhentheacceptancerightlapses.
Weusuallyrecognizerevenuefromon-premisesoftwarearrangementsinvolvingresellersonevidenceofsell-throughbytheresellertotheend-customer,becausetheinflowoftheeconomicbenefitsassociatedwiththearrangementstousisnotprobablebeforesell-throughhasoccurred.
Softwarerevenuefromcustomer-specificon-premisesoftwaredevelopmentagreementsthatqualifyforrevenuerecognitionbyreferencetothestageofcompletionofthecontractactivityisrecognizedusingthepercentage-of-completionmethodbasedoncontractcostsincurredtodateasapercentageoftotalestimatedcontractcostsrequiredtocompletethedevelopmentwork.
On-premisesoftwaresubscriptioncontractscombinesoftwareandsupportserviceelements,asunderthesecontractsthecustomerisprovidedwithcurrentsoftwareproducts,rightstoreceiveunspecifiedfuturesoftwareproducts,andrightstoproductsupportduringtheon-premisesoftwaresubscriptionterm.Typically,customerspayaperiodicfeeforadefinedsubscriptionterm,andwerecognizesuchfeesratablyoverthetermofthearrangementbeginningwiththedeliveryofthefirstproduct.Revenuefromon-premisesoftwaresubscriptioncontractsisallocatedtothesoftwarerevenueandsupportrevenuelineitemsinourConsolidatedIncomeStatements.
On-premisesoftwarerentalcontractsalsocombinesoftwareandsupportserviceelements.Undersuchcontracts,thecustomerisprovidedwithcurrentsoftwareproductsandproductsupport,butnotwiththerighttoreceiveunspecifiedfuturesoftwareproducts.Customerstypicallypayaperiodicfeeovertherentalterm.Werecognizefeesfromsoftwarerentalcontractsratablyoverthetermofthearrangement.RevenuefromrentalcontractsisallocatedtothesoftwarerevenueandsupportrevenuelineitemsinourConsolidatedIncomeStatements.
171Notes to the Consolidated Financial Statements
–Wederivethecompany-specificobjectiveevidenceoffairvalueforourrenewablesupportservicesfromtherateschargedtorenewthesupportservicesannuallyafteraninitialperiod.Suchrenewalratesgenerallyrepresentafixedpercentageofthediscountedsoftwarelicensefeechargedtothecustomer.Themajorityofourcustomersrenewtheirannualsupportservicecontractsattheserates.
–Company-specificobjectiveevidenceoffairvaluecangenerallynotbeestablishedforourcloudsubscriptions.ESPfortheseofferingsisdeterminedbasedontheratesagreedwiththeindividualcustomerstoapplyifandwhenthesubscriptionarrangementrenews.WedetermineESPbyconsideringmultiplefactorswhichinclude,butarenotlimitedto,thefollowing:i)substantiverenewalratescontainedwithinanarrangementforcloudsubscriptiondeliverables;andii)grossmarginobjectivesandinternalcostsforservices.
–Forouron-premisesoftwareofferingscompany-specificobjectiveevidenceoffairvaluecangenerallynotbeestablishedandrepresentativestand-alonesellingpricesarenotdiscerniblefrompasttransactions.Wethereforeapplytheresidualmethodtomultiple-elementarrangementsthatincludeon-premisesoftware.Underthismethod,thetransactionfeeisallocatedtoallundeliveredelementsintheamountoftheirrespectivefairvaluesandtheremainingamountofthearrangementfeeisallocatedtothedeliveredelement.WiththispolicywehaveconsideredtheguidanceprovidedbyFASBASCSubtopic985-605(SoftwareRevenueRecognition),whereapplicable,asauthorizedbyIAS8(AccountingPolicies,ChangesinAccountingEstimatesandErrors).
Weaccountforthedifferentgoodsandservicespromisedunderourcustomercontractsasseparateunitsofaccount(distinctdeliverables)unless:–Thecontractinvolvessignificantproduction,modification,orcustomizationofthecloudsubscriptionoron-premisesoftwareand
–Theservicesarenotavailablefromthird-partyvendorsandarethereforedeemedessentialtothecloudsubscriptionoron-premisesoftware.
Goodsandservicesthatdonotqualifyasdistinctdeliverablesarecombinedintooneunitofaccount(combineddeliverables).
Theportionofthetransactionfeeallocatedtoonedistinctdeliverableisrecognizedinrevenueseparatelyunderthepoliciesapplicabletotherespectivedeliverable.Forcombineddeliverablesconsistingofcloudofferingsoron-premisesoftwareandotherservicestheallocatedportionofthetransactionfeeisrecognizedusingthepercentage-of-completionmethod,asoutlinedabove,oroverthecloudsubscriptionterm,ifapplicable,dependingonwhichservicetermislonger.
Weallocatethetotaltransactionfeeofacustomercontracttothedistinctdeliverablesunderthecontractbasedontheirfairvalues.Theallocationisdonerelativetothedistinctdeliverables’individualfairvaluesunlesstheresidualmethodisappliedasoutlinedbelow.Fairvalueisdeterminedbycompany-specificobjectiveevidenceoffairvaluewhichisthepricechargedconsistentlywhenthatelementissoldseparatelyor,forelementsnotyetsoldseparately,thepriceestablishedbyourmanagementifitisprobablethatthepricewillnotchangebeforetheelementissoldseparately.Wherecompany-specificobjectiveevidenceoffairvalueandthird-partyevidenceofsellingpricecannotbeestablishedduetolackingstand-alonesalesorlackingpricingconsistency,wedeterminethefairvalueofadistinctdeliverablebyestimatingitsstand-alonesellingprice.Company-specificobjectiveevidenceoffairvalueandestimatedstand-alonesellingprices(ESP)forourmajorproductsandservicesisdeterminedasfollows:
172 Consolidated Financial Statements IFRS
Wehavedeterminedthattheconditionsforrecognizinginternallygeneratedintangibleassetsfromoursoftwaredevelopmentactivitiesarenotmetuntilshortlybeforetheproductsareavailableforsale.Developmentcostsincurredaftertherecognitioncriteriaaremethavenotbeenmaterial.Consequently,researchanddevelopmentcostsareexpensedasincurred.
Sales and Marketing Salesandmarketingincludescostsincurredforthesellingandmarketingactivitiesrelatedtooursoftwaresolutions,software-relatedserviceportfolio,andcloudbusiness.
General and AdministrationGeneralandadministrationincludescostsrelatedtofinanceandadministrativefunctions,humanresources,andgeneralmanagementaslongastheyarenotdirectlyattributabletooneoftheotheroperatingexpenselineitems.
Accounting for Uncertainties in Income TaxesWerecognizecurrentanddeferredtaxliabilitiesorassetsforuncertaintiesinincometaxesaccordingtoIAS12basedonourbestestimateofthemostlikelyamountifitisprobablethatwewillhavetopaytheamountto,orrecovertheamountfrom,thetaxauthorities,assumingthatthetaxauthoritieswillexaminetheamountsreportedtothemandhavefullknowledgeofallrelevantinformation.
Share-Based PaymentsShare-basedpaymentscovercash-settledandequity-settledawardsissuedtoouremployees.Therespectiveexpensesarerecognizedasemployeebenefitsexpensesandclassifiedinourconsolidatedincomestatementsaccordingtotheactivitiesthattheemployeesowningtheawardsperform.
Wegrantouremployeesdiscountsoncertainshare-basedpayments.Sincethosediscountsarenotdependentonfutureservicestobeprovidedbyouremployees,thediscountisrecognizedasanexpensewhentherightsaregranted.
WeconsiderFASBASC985-605inouraccountingforoptionsthatentitlethecustomertopurchase,inthefuture,additionalon-premisesoftware.Weallocaterevenuetofutureincrementaldiscountswhenevercustomersaregrantedamaterialright,thatis,therighttolicenseadditionalon-premisesoftwareatahigherdiscountthantheonegivenwithintheinitialsoftwarelicensearrangement,ortopurchaseorrenewservicesatratesbelowthefairvaluesestablishedfortheseservices.Wealsoconsiderwhetherfuturepurchaseoptionsincludedinarrangementsforcloudsubscriptiondeliverablesconstituteamaterialright.Cost of Software and Software-Related ServicesCostofsoftwareandsoftware-relatedservicesincludesthecostincurredinproducingthegoodsandprovidingtheservicesthatgeneratesoftwareandsoftware-relatedservicerevenue.Consequently,thislineitemincludesprimarilyemployeeexpensesrelatingtotheseservices,amortizationofacquiredintangibles,feesforthird-partylicenses,shippingandramp-upcost.
Cost of Professional Services and Other ServicesCostofprofessionalservicesandotherservicesincludesthecostincurredinprovidingtheservicesthatgenerateprofessionalserviceandotherservicerevenueincludingmessagingrevenues.Theitemalsoincludessalesandmarketingexpensesrelatedtoourprofessionalservicesandotherservicesthatresultfromsalesandmarketingeffortsthatcannotbeclearlyseparatedfromprovidingtheservices.
Research and DevelopmentResearchanddevelopmentincludesthecostsincurredbyactivitiesrelatedtothedevelopmentofsoftwaresolutions(newproducts,updates,andenhancements)includingresourceandhardwarecostsforthedevelopmentsystems.
173Notes to the Consolidated Financial Statements
financialassetsthatarenotassignedtoloansandreceivablesorfinancialassetsatfairvaluethroughprofitorloss,impairmentlossesdirectlyreduceanasset’scarryingamount,whileimpairmentsonloansandreceivablesarerecordedusingallowanceaccounts.Suchallowanceaccountsarealwayspresentedtogetherwiththeaccountscontainingtheasset’scostinotherfinancialassets.Accountbalancesarechargedoffagainsttherespectiveallowanceafterallcollectioneffortshavebeenexhaustedandthelikelihoodofrecoveryisconsideredremote.
Income/expensesandgains/lossesonfinancialassetsconsistofimpairmentlossesandreversals,interestincomeandexpenses,dividends,andgainsandlossesfromthedisposalofsuchassets.
Derivatives
Derivatives Not Designated as Hedging InstrumentsManytransactionsconstituteeconomichedges,andthereforecontributeeffectivelytothesecuringoffinancialrisksbutdonotqualifyforhedgeaccountingunderIAS39.Tohedgecurrencyrisksinherentinforeign-currencydenominatedandrecognizedmonetaryassetsandliabilities,wedonotdesignateourheld-for-tradingderivativefinancialinstrumentsasaccountinghedges,becausetheprofitsandlossesfromtheunderlyingtransactionsarerecognizedinprofitorlossinthesameperiodsastheprofitsorlossesfromthederivatives.Inaddition,weoccasionallyhavecontractswhichcontainforeigncurrencyembeddedderivativestobeaccountedforseparately.
Wherewehedgeourexposuretocash-settledawards,changesinthefairvalueoftherespectivehedginginstrumentsarealsorecognizedasemployeebenefitsexpensesinprofitorloss.Thefairvaluesforhedginginstrumentsarebasedonmarketdatareflectingcurrentmarketexpectations.
Formoreinformationaboutourshare-basedpayments,seeNote(28).
Financial AssetsOurfinancialassetscomprisecashandcashequivalents(highlyliquidinvestmentswithoriginalmaturitiesofthreemonthsorless),loansandreceivables,acquiredequityanddebtinvestments,andderivativefinancialinstruments(derivatives)withpositivefairvalues.Theyareclassifiedasloansandreceivables,available-for-salefinancialassets,andfinancialassetsatfairvaluethroughprofitorlossincludingonlythosethatareheldfortrading,aswedonotdesignatefinancialassetsatfairvaluethroughprofitorloss.
Regularwaypurchasesandsalesoffinancialassetsarerecordedatthetradedate.
Allfinancialassetsnotaccountedforatfairvaluethroughprofitorlossareassessedforimpairmentateachreportingdateorifwebecomeawareofobjectiveevidenceofimpairmentasaresultofoneormoreeventsthatindicatethatthecarryingamountoftheassetmaynotberecoverable.Objectiveevidenceincludesbutisnotlimitedtoasignificantorprolongeddeclineofthefairvaluebelowitscarryingamount,ahighprobabilityofinsolvency,oramaterialbreachofcontractbytheissuersuchasasignificantdelayorashortfallinpaymentsdue.Impairmentlossesintheamountofthedifferencebetweenanasset’scarryingamountandthepresentvalueoftheexpectedfuturecashflowsorcurrentfairvalue,respectively,arerecognizedinFinancialincome,net.Foravailable-for-salefinancialassetswhicharenon-derivative
174 Consolidated Financial Statements IFRS
thehedginginstrument,thechangesinthedesignatedcomponentsofthehedginginstrumentwilloffsettheimpactoffluctuationsoftheunderlyinghedgeditems.
Themethodofretrospectivelytestingeffectivenessdependsonthetypeofthehedgeasdescribedfurtherbelow:
a)CashFlowHedgeRetrospectively,effectivenessistestedonacumulativebasisapplyingthedollaroffsetmethodbyusingthehypotheticalderivativemethod.Underthisapproach,thechangeinfairvalueofaconstructedhypotheticalderivativewithtermsreflectingtherelevanttermsofthehedgeditemiscomparedtothechangeinthefairvalueofthehedginginstrumentemployingitsrelevantterms.Thehedgeisdeemedhighlyeffectiveiftheresultsarewithintherange80%to125%.
b)FairValueHedgeRetrospectively,effectivenessistestedusingstatisticalmethodsintheformofaregressionanalysisbywhichthevalidityandextentoftherelationshipbetweenthechangeinvalueofthehedgeditemsastheindependentandthefairvaluechangeofthederivativesasthedependentvariableisdetermined.Thehedgeisdeemedhighlyeffectiveifthedeterminationcoefficientbetweenthehedgeditemsandthehedginginstrumentsexceeds0.8andtheslopecoefficientlieswithinarangeof–0.8to–1.25.
Trade and Other ReceivablesTradereceivablesarerecordedatinvoicedamountslesssalesallowancesandallowancesfordoubtfulaccounts.Werecordtheseallowancesbasedonaspecificreviewofallsignificantoutstandinginvoices.Whenanalyzingtherecoverabilityofourtradereceivables,weconsiderthefollowingfactors:
Derivatives Designated as Hedging Instruments WeusederivativestohedgeforeigncurrencyriskorinterestrateriskanddesignatethemascashfloworfairvaluehedgesiftheyqualifyforhedgeaccountingunderIAS39.Theaccountingforchangesinfairvalueofthehedginginstrumentdependsonthetypeofthehedgeandtheeffectivenessofthehedgingrelationship.Formoreinformationaboutourhedges,seeNote(25).
a)CashFlowHedgeIngeneral,weapplycashflowhedgeaccountingtotheforeigncurrencyriskofhighlyprobableforecastedtransactionsandinterestrateriskonvariableratefinancialliabilities.
Withregardtoforeigncurrencyrisk,hedgeaccountingrelatestothespotpriceandtheintrinsicvaluesofthederivativesdesignatedandqualifyingascashflowhedges,whilegainsandlossesontheinterestelementandonthosetimevaluesexcludedfromthehedgingrelationshipaswellastheineffectiveportionofgainsorlossesarerecognizedinprofitorloss.
b)FairValueHedgeWeapplyfairvaluehedgeaccountingforhedgingcertainofourfixedratefinancialliabilities.
Valuation and Testing of EffectivenessTheeffectivenessofthehedgingrelationshipistestedprospectivelyandretrospectively.Prospectively,weapplythecriticaltermsmatchforourforeigncurrencyhedgesascurrencies,maturities,andtheamountsareidenticalfortheforecastedtransactionsandthespotelementoftheforwardexchangeratecontractorintrinsicvalueofthecurrencyoptions,respectively.Forinterestrateswaps,wealsoapplythecriticaltermsmatchasthenotionalamounts,currencies,maturities,basisofthevariablelegsorfixedlegs,respectively,resetdates,andthedatesoftheinterestandprincipalpaymentsareidenticalforthedebtinstrumentandthecorrespondinginterestrateswaps.Therefore,overthelifeof
175Notes to the Consolidated Financial Statements
Intangible AssetsWeclassifyintangibleassetsaccordingtotheirnatureanduseinouroperation.Softwareanddatabaselicensesconsistprimarilyoftechnologyforinternaluse,whereasacquiredtechnologyconsistsprimarilyofpurchasedsoftwaretobeincorporatedintoourproductofferingsandin-processresearchanddevelopment.Customerrelationshipandotherintangiblesconsistprimarilyofcustomercontractsandacquiredtrademarklicenses.
Allourpurchasedintangibleassetsotherthangoodwillhavefiniteusefullives.Theyareinitiallymeasuredatacquisitioncostandsubsequentlyamortizedeitherbasedonexpectedusageoronastraight-linebasisovertheirestimatedusefullivesrangingfromtwoto20years.
Amortizationforacquiredin-processresearchanddevelopmentprojectassetsstartswhentheprojectsarecompleteandthedevelopedsoftwareistakentothemarket.Wetypicallyamortizetheseintangiblesoverfivetosevenyears.
Amortizationexpensesofintangibleassetsareclassifiedascostofsoftwareandsoftware-relatedservices,costofprofessionalservicesandotherservices,researchanddevelopment,salesandmarketing,andgeneralandadministrationdependingontheiruse.
Property, Plant, and EquipmentProperty,plant,andequipmentarecarriedatacquisitioncostplusthefairvalueofrelatedassetretirementcostsifanyandifreasonablyestimable,andlessaccumulateddepreciation.Interestincurredduringtheconstructionofqualifyingassetsiscapitalizedandamortizedovertherelatedassets’estimatedusefullives.
–First,weconsiderthefinancialsolvencyofspecificcustomersandrecordanallowanceforspecificcustomerbalanceswhenwebelieveitisprobablethatwewillnotcollecttheamountdueaccordingtothecontractualtermsofthearrangement.
–Second,weevaluatehomogenousportfoliosoftradereceivablesaccordingtotheirdefaultriskprimarilybasedontheageofthereceivableandhistoricallossexperience,butalsotakingintoconsiderationgeneralmarketfactorsthatmightimpactourtradereceivableportfolio.Werecordageneralbaddebtallowancetorecordimpairmentlossesforaportfoliooftradereceivableswhenwebelievethattheageofthereceivablesindicatesthatitisprobablethatalosshasoccurredandwewillnotcollectsomeoralloftheamountsdue.
Accountbalancesarewrittenoff,thatis,chargedoffagainsttheallowanceafterallcollectioneffortshavebeenexhaustedandthelikelihoodofrecoveryisconsideredremote.
InourConsolidatedIncomeStatements,expensesfromrecordingbaddebtallowancesforaportfoliooftradereceivablesareclassifiedasotheroperatingincome,net,whereasexpensesfromrecordingbaddebtallowancesforspecificcustomerbalancesareclassifiedascostofsoftwareandsoftware-relatedservicesorcostofprofessionalservicesandotherservices,dependingonthetransactionfromwhichtherespectivetradereceivableresults.Salesallowancesarerecordedasanoffsettotherespectiverevenueitem.
Includedintradereceivablesareunbilledreceivablesrelatedtofixed-feeandtime-and-materialconsultingarrangementsforcontractworkperformedtodate.
Other Non-Financial AssetsOthernon-financialassetsarerecordedatamortizedcost.Wecapitalizesalescommissions(directandincrementalcostsincurredwhenobtainingacontractareconsideredtobecontractcost)relatedtocloudandsubscriptiondealsaspartofourcapitalizedcontractcost.Thoseassetsareamortizedoverthenon-cancelablecontracttermtomatchthemwiththerespectiverevenuestream.
176 Consolidated Financial Statements IFRS
Expensesandgains/lossesonfinancialliabilitiesconsistofinterestexpense,andgainsandlossesfromthedisposalofsuchliabilities.Interestexpenseisrecognizedbasedontheeffectiveinterestmethod.
Post-Employment BenefitsThediscountratesusedinmeasuringourpost-employmentbenefitassetsandliabilitiesarederivedfromratesavailableonhigh-qualitycorporatebondsandgovernmentbondsforwhichthetimingandamountsofpaymentsmatchthetimingandtheamountsofourprojectedpensionpayments.TheassumptionsusedtocalculatepensionliabilitiesandcostsaredisclosedinNote(19a).Netinterestexpenseandotherexpensesrelatedtodefinedbenefitplansarerecognizedinemployeeexpenses.
Sinceourdomesticdefinedbenefitpensionplansprimarilyconsistofanemployee-financedpost-retirementplanthatisfullyfinancedwithqualifyinginsurancepolicies,currentservicecostmaybecomeacreditasaresultofadjustingthedefinedbenefitliability’scarryingamounttothefairvalueofthequalifyingplanassets.Suchadjustmentsarerecordedinservicecost.
Deferred IncomeDeferredincomeisrecognizedascloudsubscriptionandsupportrevenue,softwarerevenue,supportrevenue,consultingrevenue,orotherservicerevenue,dependingonthereasonsforthedeferral,oncethebasicapplicablerevenuerecognitioncriteriahavebeenmet.Thesecriteriaaremet,forexample,whentheservicesareperformedorwhenthediscountsthatrelatetoamaterialrightgrantedinapurchaseoptionareapplied.
Property,plant,andequipmentaredepreciatedovertheirexpectedusefullives,generallyusingthestraight-linemethod.
Useful Lives of Property, Plant, and Equipment
Buildings 25to50years
Leaseholdimprovements Basedontheleasecontract
Informationtechnologyequipment 3to5years
Officefurniture 4to20years
Automobiles 4to5years
Impairment of Goodwill and Non-Current AssetsTherecoverableamountofgoodwillisestimatedeachyearatthesametime.ThegoodwillimpairmenttestisperformedatthelevelofouroperatingsegmentsincetherearenolowerlevelsinSAPatwhichgoodwillismonitoredforinternalmanagementpurposes.
Impairmentlossesarepresentedinotheroperatingincome/expense,netinprofitorloss.
Liabilities
Financial LiabilitiesFinancialliabilitiesincludetradeandotherpayables,bankloans,issuedbonds,privateplacementsandotherfinancialliabilitieswhichcomprisederivativeandnon-derivativefinancialliabilities.Theyareclassifiedasfinancialliabilitiesatamortizedcostandatfairvaluethroughprofitorloss.Thelatterincludeonlythosefinancialliabilitiesthatareheldfortrading,aswedonotdesignatefinancialliabilitiesatfairvaluethroughprofitorloss.
177Notes to the Consolidated Financial Statements
Revenue RecognitionAsdescribedintheRevenueRecognitionsectionofNote(3b),wedonotrecognizerevenuebeforetheamountofrevenuecanbemeasuredreliably,andcollectionoftherelatedreceivableisprobable.Thedeterminationofwhethertheamountofrevenuecanbemeasuredreliablyorwhetherthefeesarecollectibleisinherentlyjudgmentalasitrequiresestimatesastowhetherandtowhatextentsubsequentconcessionsmaybegrantedtocustomersandwhetherthecustomerisexpectedtopaythecontractualfees.Thetimingandamountofrevenuerecognitioncanvarydependingonwhatassessmentshavebeenmade.
Theapplicationofthepercentage-of-completionmethodrequiresustomakeestimatesabouttotalrevenue,totalcosttocompletetheproject,andthestageofcompletion.Theassumptions,estimates,anduncertaintiesinherentindeterminingthestageofcompletionaffectthetimingandamountsofrevenuerecognized.Ifwedonothaveasufficientbasistomeasuretheprogressofcompletionortoestimatethetotalcontractrevenueandcosts,revenuerecognitionislimitedtotheamountofcontractcostsincurred.Thedeterminationofwhetherasufficientbasistomeasuretheprogressofcompletionexistsisjudgmental.Changesinestimatesofprogresstowardscompletionandofcontractrevenueandcontractcostsareaccountedforascumulativecatch-upadjustmentstothereportedrevenuefortheapplicablecontract.
(3c) Management Judgments and Sources of Estimation UncertaintyThepreparationoftheConsolidatedFinancialStatementsinconformitywithIFRSrequiresmanagementtomakejudgments,estimates,andassumptionsthataffecttheapplicationofaccountingpoliciesandthereportedamountsofassets,liabilities,revenues,andexpenses,aswellasdisclosureofcontingentassetsandliabilities.
Webaseourjudgments,estimates,andassumptionsonhistoricalandforecastinformation,aswellasregionalandindustryeconomicconditionsinwhichweorourcustomersoperate,changestowhichcouldadverselyaffectourestimates.Althoughwebelievewehavemadereasonableestimatesabouttheultimateresolutionoftheunderlyinguncertainties,noassurancecanbegiventhatthefinaloutcomeofthesematterswillbeconsistentwithwhatisreflectedinourassets,liabilities,revenues,andexpenses.Actualresultscoulddifferfromoriginalestimates.
Theaccountingpoliciesthatmostfrequentlyrequireustomakejudgments,estimates,andassumptions,andthereforearecriticaltounderstandingourresultsofoperations,includethefollowing:–Revenuerecognition–Valuationoftradereceivables–Accountingforshare-basedpayments–Accountingforincometax–Accountingforbusinesscombinations–Subsequentaccountingforotherintangibles–Determinationofoperatingsegments–Accountingforlegalcontingencies–Recognitionofinternallygeneratedintangibleassetsfromdevelopment
OurmanagementperiodicallydiscussesthesecriticalaccountingpolicieswiththeAuditCommitteeoftheSupervisoryBoard.
178 Consolidated Financial Statements IFRS
Additionally,ourrevenueforon-premisesoftwarecontractswouldbesignificantlydifferentifweappliedarevenueallocationpolicyotherthantheresidualmethod.
Valuation of Trade ReceivablesAsdescribedintheTradeandOtherReceivablessectioninNote(3b),weaccountforimpairmentsoftradereceivablesbyrecordingsalesallowancesandallowancesfordoubtfulaccountsonanindividualreceivablebasisandonaportfoliobasis.Theassessmentofwhetherareceivableiscollectibleisinherentlyjudgmentalandrequirestheuseofassumptionsaboutcustomerdefaultsthatcouldchangesignificantly.Judgmentisrequiredwhenweevaluateavailableinformationaboutaparticularcustomer’sfinancialsituationtodeterminewhetheritisprobablethatacreditlosswilloccurandtheamountofsuchlossisreasonablyestimableandthusanallowanceforthatspecificaccountisnecessary.Basingthegeneralallowancefortheremainingreceivablesonourhistoricallossexperience,too,ishighlyjudgmental,ashistorymaynotbeindicativeoffuturedevelopment.Changesinourestimatesabouttheallowancefordoubtfulaccountscouldmateriallyimpactthereportedassetsandexpensesinourfinancialstatements,andourprofitcouldbeadverselyaffectedifactualcreditlossesexceedourestimates.
Intheaccountingforourmultiple-elementarrangementswehavetodeterminethefollowing:–Whichcontractswiththesamecustomeraretobeaccountedforasonesinglecontract
–Whichdeliverablesunderonecontractaredistinctandthustobeaccountedforseparately
–Howtoallocatethetotalarrangementfeetothedistinctdeliverablesofonecontract
Thedeterminationofwhetherdifferentcontractswiththesamecustomeraretobeaccountedforasonecontractishighlyjudgmental,asitrequiresustoevaluatewhetherthecontractsarenegotiatedtogetherorlinkedinanyotherway.Thetimingandamountofrevenuerecognitioncanvarydependingonwhethertwocontractsareaccountedforseparatelyorasonesinglecontract.
Underamultiple-elementarrangementincludingacloudsubscription,oron-premisesoftware,andotherdeliverables,wedonotaccountforthecloudsubscription,oron-premisesoftware,andtheotherdeliverablesseparatelyifoneoftheotherdeliverables(suchasconsultingservices)isdeemedtobeessentialtothefunctionalityofthecloudsubscription,oron-premisesoftware.Thedeterminationwhetheranundeliveredelementisessentialtothefunctionalityofthedeliveredelementrequirestheuseofjudgment.Thetimingandamountofrevenuerecognitioncanvarydependingonhowthatjudgmentisexercised,becauserevenuemayberecognizedoveralongerserviceterm.
Intheareaofallocatingthetransactionfeetothedifferentdeliverablesundertherespectivecustomercontractjudgmentisrequiredinthedeterminationofanappropriatefairvaluemeasurementwhichmayimpactthetimingandamountofrevenuerecognizeddependingonthefollowing:–Whetheranappropriatemeasurementoffairvaluecanbedemonstratedforundeliveredelements.
–Theapproachesusedtoestablishfairvalue.
179Notes to the Consolidated Financial Statements
interpretationthereof.Suchjudgmentcanhaveamaterialeffectonourincometaxexpense,incometaxprovision,andprofitaftertax.
Thecarryingamountofadeferredtaxassetisreviewedattheendofeachreportingperiodandisreducedtotheextentthatitisnolongerprobablethatsufficienttaxableprofitwillbeavailabletoallowthebenefitofpartorallofthedeferredtaxassetstobeutilized.Thisassessmentrequiresmanagementjudgment,estimates,andassumptions.Inevaluatingourabilitytoutilizeourdeferredtaxassets,weconsiderallavailablepositiveandnegativeevidence,includingthelevelofhistoricaltaxableincomeandprojectionsforfuturetaxableincomeovertheperiodsinwhichthedeferredtaxassetsarerecoverable.Ourjudgmentregardingfuturetaxableincomeisbasedonexpectationsofmarketconditionsandotherfactsandcircumstances.Anyadversechangetotheunderlyingfactsorourestimatesandassumptionscouldrequireustoreducethecarryingamountofournetdeferredtaxassets.
Formoreinformationaboutourincometax,seeNote(11).
Accounting for Business CombinationsInouraccountingforbusinesscombinations,judgmentisrequiredindeterminingwhetheranintangibleassetisidentifiable,andshouldberecordedseparatelyfromgoodwill.Additionally,estimatingtheacquisitiondatefairvaluesoftheidentifiableassetsacquiredandliabilitiesassumedinvolvesconsiderablemanagementjudgment.Thenecessarymeasurementsarebasedoninformationavailableattheacquisitiondateandarebasedonexpectationsandassumptionsthathavebeendeemedreasonablebymanagement.Thesejudgments,estimates,andassumptionscanmateriallyaffectourfinancialpositionandprofitforseveralreasons,amongwhicharethefollowing:
Accounting for Share-Based PaymentsWeusecertainassumptionsinestimatingthefairvaluesforourshare-basedpayments,includingexpectedfuturesharepricevolatilityandexpectedoptionlife(whichrepresentsourestimateoftheaverageamountoftimeremaininguntiltheoptionsareexercisedorexpireunexercised).Inaddition,thefinalpayoutfortheseplansalsodependsonoursharepriceattherespectiveexercisedates.Alltheseassumptionsmaysignificantlyimpactthefairvaluedeterminationandthustheamountandtimingofourshare-basedpaymentexpense.
Forthepurposeofdeterminingtheestimatedfairvalueofourstockoptions,webelieveexpectedvolatilityisthemostsensitiveassumption.Regardingfuturepayoutundertheplans,thepriceofSAP’sshareswillbethemostrelevantfactor.ThefairvaluesoftheRestrictedShareUnits(RSUs)grantedunderourEmployeeParticipationPlan(EPP)andLong-TermIncentivePlan(LTI)2015dependonSAP’ssharepricedirectlyaftertheannouncementofthepreliminaryfourthquarterandfull-yearresultsforthelastfinancialyearoftherespectiveperformanceperiodundertheEPP(three-yearholdingperiodundertheLTI2015),andthusmaybesignificantlyaboveorbelowthebudgetedamounts.Changesinthesefactorscouldsignificantlyaffecttheestimatedfairvaluesascalculatedbytheoption-pricingmodel,andthefuturepayout.Formoreinformationabouttheseplans,seeNote(28).
Accounting for Income TaxWeconductoperationsandearnincomeinnumerousforeigncountriesandaresubjecttochangingtaxlawsinmultiplejurisdictionswithinthecountriesinwhichweoperate.Ourordinarybusinessactivitiesalsoincludetransactionswheretheultimatetaxoutcomeisuncertain,suchasthoseinvolvingrevenuesharingandcostreimbursementarrangementsbetweenSAPGroupentities.Inaddition,theamountofincometaxwepayisgenerallysubjecttoongoingauditsbydomesticandforeigntaxauthorities.Asaresult,judgmentisnecessaryindeterminingourworldwideincometaxprovisions.Wehavemadereasonableestimatesabouttheultimateresolutionofourtaxuncertaintiesbasedoncurrenttaxlawsandour
180 Consolidated Financial Statements IFRS
Inmakingimpairmentassessmentsforourintangibleassets,theoutcomeofthesetestsishighlydependentonmanagement’slatestestimatesandassumptionsregardingfuturecashflowprojectionsandeconomicrisks,whicharecomplexandrequiresignificantjudgmentandassumptionsaboutfuturedevelopments.Theycanbeaffectedbyavarietyoffactors,includingchangesinourbusinessstrategy,ourinternalforecasts,andanestimateofourweightedaveragecostofcapital.Duetothesefactors,actualcashflowsandvaluescouldvarysignificantlyfromtheforecastedfuturecashflowsandrelatedvaluesderivedusingthediscountedcashflowmethod.Althoughwebelievetheassumptionsandestimateswehavemadeinthepasthavebeenreasonableandappropriate,differentassumptionsandestimatescouldmateriallyaffectourfinancialpositionandprofit.
Determination of Operating SegmentsSignificantjudgmentwasinvolvedinthedeterminationthatSAP’sstructure,afterthereorganizationin2014,doesnotincludeunitsthatmeetthedefinitionofanoperatingsegmentandthatconsequentlySAPonlyhasasingleoperatingsegment.
Accounting for Legal ContingenciesAsdescribedinNote(24),wearecurrentlyinvolvedinvariousclaimsandlegalproceedings.Wereviewthestatusofeachsignificantmatternotlessfrequentlythaneachquarterandassessourpotentialfinancialandbusinessexposuresrelatedtosuchmatters.Significantjudgmentisrequiredinthedeterminationofwhetheraprovisionistoberecordedandwhattheappropriateamountforsuchprovisionshouldbe.Notably,judgmentisrequiredinthefollowing:–Determiningwhetheranobligationexists–Determiningtheprobabilityofoutflowofeconomicbenefits–Determiningwhethertheamountofanobligationisreliablyestimable
–Estimatingtheamountoftheexpenditurerequiredtosettlethepresentobligation
–Fairvaluesassignedtoassetssubjecttodepreciationandamortizationaffecttheamountsofdepreciationandamortizationtoberecordedinoperatingprofitintheperiodsfollowingtheacquisition.
–Subsequentnegativechangesintheestimatedfairvaluesofassetsmayresultinadditionalexpensefromimpairmentcharges.
–Subsequentchangesintheestimatedfairvaluesofliabilitiesandprovisionsmayresultinadditionalexpense(ifincreasingtheestimatedfairvalue)oradditionalincome(ifdecreasingtheestimatedfairvalue).
Subsequent Accounting for Other IntangiblesAsdescribedintheIntangibleAssetssectioninNote(3b),allourintangibleassetsotherthangoodwillhavefiniteusefullives.Consequently,thedepreciableamountoftheintangibleassetsisamortizedonasystematicbasisovertheirusefullives.Judgmentisrequiredindeterminingthefollowing:–Theusefullifeofanintangibleasset,asthisdeterminationisbasedonourestimatesregardingtheperiodoverwhichtheintangibleassetisexpectedtoproduceeconomicbenefitstous.
–Theamortizationmethod,asIFRSrequiresthestraight-linemethodtobeusedunlesswecanreliablydeterminethepatterninwhichtheasset’sfutureeconomicbenefitsareexpectedtobeconsumedbyus.
Boththeamortizationperiodandtheamortizationmethodhaveanimpactontheamortizationexpensethatisrecordedineachperiod.
181Notes to the Consolidated Financial Statements
(3d) New Accounting Standards Adopted in the Current PeriodNonewaccountingstandardsadoptedin2014hadamaterialimpactonourConsolidatedFinancialStatements.
(3e) New Accounting Standards Not Yet AdoptedThestandardsandinterpretations(relevanttotheGroup)thatareissued,butnotyeteffective,uptothedateofissuanceoftheGroup’sfinancialstatementsaredisclosedbelow.TheGroupintendstoadoptthesestandards,ifapplicable,whentheybecomeeffective:–OnMay12,2014,theIASBpublishedamendmentstoIAS16(Property,PlantandEquipment)andIAS38(IntangibleAssets).TheamendmentsbecomemandatoryfortheGroup’s2016ConsolidatedFinancialStatementsandclarifythat–ingeneral–theuseofrevenue-basedmethodstocalculatethedepreciation/amortizationisnotappropriate(thispresumption,however,canberebuttedincertainlimitedcircumstancesforintangibles).WehavenotyetcompletedthedeterminationoftheimpactonourConsolidatedFinancialStatements.
–OnMay28,2014,theIASBissuedIFRS15(RevenuefromContractswithCustomers).Thestandardbecomeseffectiveinfiscalyear2017withearlierapplicationpermitted.WeareintheearlystageofananalysisoftheimpactofthestandardonourConsolidatedFinancialStatements.Thisimpactcouldbematerial,inparticularintheareasofallocatingrevenuetothedifferentperformanceobligationsunderonecontractandthetimingofrevenuerecognition.Thestandardforeseesdifferentalternativeapproachesfortheadoptionofthenewguidance.Wehavenotyettakenadecisionwhichofthesealternativesweintendtoapply.
–OnJuly24,2014,theIASBissuedthefourthandfinalversionofIFRS9(FinancialInstruments),whichwillbeapplicableinfiscalyear2018.Thenewguidanceisexpectedtomainlyimpacttheclassificationandmeasurementoffinancialassetsandwillresultinadditionaldisclosures.WehavenotyetcompletedthedeterminationoftheimpactonourConsolidatedFinancialStatements.
Duetouncertaintiesrelatingtothesematters,provisionsarebasedonthebestinformationavailableatthetime.
Attheendofeachreportingperiod,wereassessthepotentialobligationsrelatedtoourpendingclaimsandlitigationandadjustourrespectiveprovisionstoreflectthecurrentbestestimate.Inaddition,wemonitorandevaluatenewinformationthatwereceiveaftertheendoftherespectivereportingperiodbutbeforetheConsolidatedFinancialStatementsareauthorizedforissuetodeterminewhetherthisprovidesadditionalinformationregardingconditionsthatexistedattheendofthereportingperiod.Suchrevisionstoourestimatesofthepotentialobligationscouldhaveamaterialimpactonourfinancialpositionandprofit.Forfurtherinformationaboutlegalcontingencies,seeNotes(19b)and(24).
Recognition of Internally Generated Intangible Assets from DevelopmentWebelievethatdeterminingwhetherinternallygeneratedintangibleassetsfromdevelopmentaretoberecognizedasintangibleassetsrequiressignificantjudgment,particularlyinthefollowingareas:–Determiningwhetheractivitiesshouldbeconsideredresearchactivitiesordevelopmentactivities.
–Determiningwhethertheconditionsforrecognizinganintangibleassetaremetrequiresassumptionsaboutfuturemarketconditions,customerdemandandotherdevelopments.
–Theterm“technicalfeasibility”isnotdefinedinIFRS,andthereforedeterminingwhetherthecompletionofanassetistechnicallyfeasiblerequiresjudgmentandacompany-specificapproach.
–Determiningthefutureabilitytouseorselltheintangibleassetarisingfromthedevelopmentandthedeterminationoftheprobabilityoffuturebenefitsfromsaleoruse.
–Determiningwhetheracostisdirectlyorindirectlyattributabletoanintangibleassetandwhetheracostisnecessaryforcompletingadevelopment.
182 Consolidated Financial Statements IFRS
Acquisition of ConcurWeannouncedonSeptember18,2014,thatSAPandConcurTechnologies,Inc.(NSDQ:CNQR),aleadingproviderofintegratedcloud-basedtravelandexpensemanagementsolutions,hadenteredintoanagreementunderwhichSAPwouldacquireConcur.
OnDecember4,2014,followingsatisfactionofapplicableregulatoryandotherapprovals,weacquired100%ofthesharesofConcur.SAPpaidUS$129pershare,representingconsiderationtransferredofapproximatelyUS$7.7billion.
TheacquisitionofConcuraffectscomparabilityofour2014ConsolidatedFinancialStatementswithour2013and2012ConsolidatedFinancialStatements.
Financial Impact as of the Acquisition Date€millions
Concur Considera-tion Transferred
Cashpaid 6,181
LiabilitiesIncurred 13
Total consideration transferred 6,194
(4) BUSINESS COMBINATIONSIn2014,weconcludedthefollowingbusinesscombinations:
Acquired Businesses
Sector AcquisitionType AcquiredVotingInterest AcquisitionDate
Fieldglass,Inc.,Chicago,Illinois,USA
ProviderofSaaSsolutiontoorganizationstoprocureandmanagetheirflexibleworkforces
ShareDeal 100% May2,2014
SeeWhy,Inc.,Boston,Massachusetts,USA
Providerofbehavioralmarketingsoftware ShareDeal 100% June13,2014
ConcurTechnologies,Inc.,Bellevue,Washington,USA
Providerofintegratedtravelandexpensemanagementsolutions
ShareDeal 100% December4,2014
Weacquirebusinessesinspecificareasofstrategicinteresttous,particularlytobroadenourproductandserviceportfolio.
TheinitialaccountingfortheConcurbusinesscombinationisincompletebecausetheacquisitionoccurredonlyshortlybeforetheendofthefiscalyear.Theinitialaccountingfortheotherbusinesscombinationsenteredintoin2014isincompletebecausewearestillobtainingtheinformationnecessarytoidentifyandmeasuretax-relatedassetsandliabilitiesoftheacquiredbusinesses.Accordingly,theamountsrecognizedinourfinancialstatementsfortheseitemsareregardedprovisionalasofDecember31,2014.
Thebusinessesacquiredin2014contributed€91million(thereof€39millionfromConcur)tothe2014cloudsubscriptionandsupportrevenue.
Theacquisition-relatedcostsincurredtotaled€22millionforour2014businesscombinations,allofwhichwererecognizedingeneralandadministrationexpense.
PrioryearacquisitionsaredescribedintheConsolidatedFinancialStatementsinthe2013AnnualReport.
183Notes to the Consolidated Financial Statements
Ingeneral,thegoodwillarisingfromtheacquisitionsconsistslargelyofthesynergiesandtheknow-howandtechnicalskillsoftheacquiredbusinesses’workforces.
BycombiningConcur’ssolutionswithSAPproductsweexpecttoenableourcustomerstodriveoperatingefficiencies,collaboration,andreal-timedatasharingacrossallmajorspendcategories.Concurgoodwillisattributedtoexpectedsynergiesfromtheacquisition,particularlyinthefollowingareas:–Cross-sellingopportunitiestoexistingSAPcustomersacrossallregionsusingSAP’ssalesorganization
–CombiningConcurproductsandSAPproductstodeliveraworld-classemployeeexperience
–ImprovedprofitabilityinConcursalesandoperations
Valuation of Trade Receivables Acquired€millions
Concur Trade Receivables
Grosscarryingamount 129
Allowancefordoubtfulaccounts 5
Fair value of receivables 124
ThefollowingtablesummarizesthevaluesofidentifiableassetsacquiredandliabilitiesassumedinconnectionwiththeacquisitionofConcur,asoftheacquisitiondate.
Recognized Amounts of Identifiable Assets Acquired and Liabilities Assumed€millions
Concur Contribution
Cashandcashequivalents 552
Otherfinancialassets 107
Tradeandotherreceivables 124
Othernon-financialassets 86
Property,plant,andequipment 37
Intangibleassets 1,702
Thereofacquiredtechnology 442
Thereofcustomerrelationshipandotherintangibles 1,247
Customerrelationship 1,201
Otherintangibleassets 46
Thereofsoftwareanddatabaselicenses 13
Total identifiable assets 2,608Tradepayables 64
Financialliabilities 1,133
Currentanddeferredtaxliabilities 441
Provisionsandothernon-financialliabilities 40
Deferredincome 58
Total identifiable liabilities 1,736Total identifiable net assets 872Acquired non-controlling interests at fair value 86Goodwill 5,408Total consideration transferred 6,194
184 Consolidated Financial Statements IFRS
(5) REVENUE
Fordetailedinformationaboutourrevenuerecognitionpolicies,seeNote(3).
Professionalservicesandotherservicerevenuecomprisesthefollowing:
Professional Services and Other Service Revenue€millions
2014 2013 2012
Consulting 2,095 2,242 2,442
Otherservices 611 623 616
Professional services and other service
2,706 2,865 3,058
Theitemincludesprofessionalservicesandotherservicerevenuerelatedtoourcloudofferingsof€222millionin2014(2013:€170million,2012:€92million).
Forrevenueinformationbygeographicregion,seeNote(29).
Revenuefromconstruction-typecontracts(contractrevenue)ismainlyincludedinsoftwarerevenueandconsultingrevenuedependingonthetypeofproject.In2014,contractrevenueof€285millionwasrecognizedforallourconstructionprojects
Impact of the Business Combination on Our Financial StatementsTheamountsofrevenueandprofitorlossoftheConcurbusinessacquiredin2014sincetheacquisitiondateincludedintheconsolidatedincomestatementsforthereportingperiodareasfollows:
Impact on SAP’s Financials€millions
2014 as Reported
ContributionofConcur
Revenue 17,560 45
Profitaftertax 3,280 –9
HadConcurbeenconsolidatedasofJanuary1,2014,ourestimatedproformarevenueforthereportingperiodwouldhavebeen€18,040million,andproformaprofitaftertaxwouldhavebeen€3,146million.
TheseamountswerecalculatedafterapplyingtheCompany’saccountingpoliciesandafteradjustingtheresultsforConcurtoreflectmaterialeffectsfrom,forexample:–Additionaldepreciationandamortizationthatwouldhavebeenchargedassumingthefairvalueadjustmenttoproperty,plant,andequipmentandintangibleassetshadbeenappliedfromJanuary1,2014
–Theimpactoffairvalueadjustmentsondeferredrevenueonafull-yearbasis
–Theborrowingcostsonthefundinglevelsanddebt/equitypositionoftheCompanyafterthebusinesscombination
–Employeebenefits,suchasshare-basedcompensation–Capitalizationofsalescommissions–Transactionexpensesincurredaspartoftheacquisition–Relatedtaxeffects
Theseproformanumbershavebeenpreparedforcomparativepurposesonly.Theproformarevenueandprofitnumbersarenotnecessarilyindicativeeitheroftheresultsofoperationsthatwouldhaveactuallyoccurredhadtheacquisitionbeenineffectatthebeginningoftherespectiveperiodsoroffutureresults.
185Notes to the Consolidated Financial Statements
Forfurtherinformationonourrestructuringplans,seeNote(19b).
Ifnotpresentedseparately,theseexpenseswouldbreakdownasfollows:
Restructuring Expenses by Functional Area€millions
2014 2013 2012
Costofsoftwareandsoftware-relatedservices
9 12 0
Costofprofessionalservicesandotherservices
24 14 7
Researchanddevelopment 24 0 0
Salesandmarketing 41 29 1
Generalandadministration 28 15 0
Restructuring expenses 126 70 8
(8) EMPLOYEE BENEFITS EXPENSE AND HEADCOUNT
Employee Benefits Expense Employeebenefitsexpensecomprisesthefollowing:
Employee Benefits Expense€millions
2014 2013 2012
Salaries 6,319 5,997 5,726
Socialsecurityexpense 916 857 777
Share-basedpaymentexpense 290 327 522
Pensionexpense 211 212 190
Employee-relatedrestructuringexpense
119 57 6
Terminationbenefitsoutsideofrestructuringplans
22 39 65
Employee benefits expense 7,877 7,489 7,286
(2013:€261million,2012:€241million).ThestatusofourconstructionprojectsinprogressattheendofthereportingperiodaccountedforunderIAS11(ConstructionContracts)wasasfollows:
Construction Projects in Progress€millions
2014 2013 2012
Aggregatecostrecognized(multi-year)
201 221 255
Recognizedresult(+profit/–loss;multi-year)
92 87 2
Advancepaymentsreceived 7 26 3
Grossamountsduefromcustomers
0 3 7
Grossamountsduetocustomers 24 38 19
Lossprovisions 6 3 34
(6) COST OF SOFTWARE AND SOFTWARE-RELATED SERVICESTheitemincludescostofcloudsubscriptionsandsupportrevenueof€481millionin2014(2013:€314million,2012:€199million).
(7) RESTRUCTURINGRestructuringexpenseswereasfollows:
Restructuring Expenses€millions
2014 2013 2012
Employee-relatedrestructuringexpenses
119 57 6
Facility-relatedrestructuringexpenses
7 13 2
Restructuring expenses 126 70 8
186 Consolidated Financial Statements IFRS
PensionexpenseincludestheamountsrecordedforourdefinedbenefitanddefinedcontributionplansasdescribedinNote(19a).Expensesforlocalstatepensionplansareincludedinsocialsecurityexpense.
Number of EmployeesOnDecember31,2014,thebreakdownofourfull-timeequivalentemployeenumbersbyfunctioninSAPandbyregionwasasfollows:
Number of EmployeesFull-timeequivalents
December 31, 2014 December31,2013 December31,2012
EMEA 1) Americas AsiaPacificJapan
Total EMEA 1) Americas AsiaPacificJapan
Total EMEA 1) Americas AsiaPacificJapan
Total
Softwareandsoftware-relatedservices
5,953 3,983 5,138 15,074 4,859 2,861 3,541 11,261 4,559 2,628 3,364 10,551
Professionalservicesandotherservices
7,291 4,304 3,044 14,639 7,177 4,406 3,047 14,629 7,020 4,399 2,840 14,259
Researchanddevelopment 9,049 3,974 5,885 18,908 8,806 3,630 5,367 17,804 8,952 3,672 5,388 18,012
Salesandmarketing 7,069 7,288 3,611 17,969 6,346 6,437 3,041 15,824 5,697 6,220 2,982 14,899
Generalandadministration 2,436 1,643 944 5,023 2,424 1,445 697 4,566 2,243 1,383 660 4,286
Infrastructure 1,542 879 373 2,794 1,380 790 318 2,488 1,286 821 308 2,415
SAP Group (December 31) 33,340 22,071 18,995 74,406 30,993 19,568 16,011 66,572 29,757 19,123 15,542 64,422
Thereofacquisitions 814 2,890 1,831 5,535 511 571 29 1,111 791 2,987 1,038 4,816
SAP Group (months' end average) 31,821 19,797 16,725 68,343 30,238 19,418 15,752 65,409 29,009 17,619 14,506 61,134
1) Europe,MiddleEast,Africa
187Notes to the Consolidated Financial Statements
Allocation of Share-Based Payment Expense Theallocationofexpenseforshare-basedpayments,netoftheeffectsfromhedgingtheseinstruments,tothevariousoperatingexpenseitemsisasfollows:
Share-Based Payments€millions
2014 2013 2012
Costofsoftwareandsoftware-relatedservices 33 40 42
Costofprofessionalservicesandotherservices 48 61 104
Researchanddevelopment 71 90 125
Salesandmarketing 76 96 123
Generalandadministration 62 40 127
Share-based payments 290 327 522Thereofcash-settledshare-basedpayments 193 240 450
Thereofequity-settledshare-basedpayments 96 87 72
Formoreinformationaboutourshare-basedpayments,seeNote(28).
(9) OTHER NON-OPERATING INCOME/EXPENSE, NETOthernon-operatingincome/expense,netwasasfollows:
Other Non-Operating Income/Expense, Net €millions
2014 2013 2012
Foreigncurrencyexchangegain/loss,net 71 4 –154
Thereoffromfinancialassets/liabilitiesatfairvaluethroughprofitorloss 83 –75 –102
Thereoffromloansandreceivables –219 184 –32
Thereoffromfinancialliabilitiesatamortizedcost 226 –105 –20
Thereoffromnon-financialassets/liabilities –13 0 2
Miscellaneousothernon-operatingincome 3 1 4
Miscellaneousothernon-operatingexpense –25 –22 –23
Other non-operating income/expense, net 49 –17 –173
188 Consolidated Financial Statements IFRS
(10) FINANCIAL INCOME, NETFinancialincome,netwasasfollows:
Financial Income, Net€millions
2014 2013 2012
Finance income 127 115 103Finance costs –152 –181 –175
Thereofinterestexpensefromfinancialliabilitiesatamortizedcost –93 –131 –130
Financial income, net –25 –66 –72
(11) INCOME TAXIncometaxexpensefortheyearsendedDecember31isattributabletothefollowingregions:
Tax Expense According to Region€millions
2014 2013 2012
Current tax expenseGermany 770 836 700
Foreign 422 326 506
Total current tax expense 1,192 1,162 1,206Deferred tax expense/incomeGermany 84 51 –11
Foreign –201 –142 –202
Total deferred tax income –117 –91 –213Total income tax expense 1,075 1,071 993
189Notes to the Consolidated Financial Statements
IncometaxexpensefortheyearsendedDecember31comprisedthefollowingcomponents:
Major Components of Tax Expense€millions
2014 2013 2012
Current tax expense/incomeTaxexpenseforcurrentyear 1,168 1,249 1,173
Taxesforprioryears 24 –87 33
Total current tax expense 1,192 1,162 1,206Deferred tax expense/income
Originationandreversaloftemporarydifferences
–126 –168 –266
Unusedtaxlosses,researchanddevelopmenttaxcreditsandforeigntaxcredits
9 77 53
Total deferred tax income –117 –91 –213Total income tax expense 1,075 1,071 993
ProfitbeforetaxfortheyearsendedDecember31consistedofthefollowing:
Profit Before Tax €millions
2014 2013 2012
Germany 3,338 3,126 2,460
Foreign 1,017 1,270 1,336
Total 4,355 4,396 3,796
ThefollowingtablereconcilestheexpectedincometaxexpensecomputedbyapplyingourcombinedGermantaxrateof26.43%(2013:26.41%;2012:26.47%)totheactualincometaxexpense.Our2014combinedGermantaxrateincludesacorporateincometaxrateof15.00%(2013:15.00%;2012:15.00%),plusasolidaritysurchargeof5.5%(2013:5.5%;2012:5.5%)thereon,andtradetaxesof10.60%(2013:10.58%;2012:10.64%).
Relationship Between Tax Expense and Profit Before Tax€millions,unlessotherwisestated
2014 2013 2012
Profit before tax 4,355 4,396 3,796
Taxexpenseatapplicabletaxrateof26.43%(2013:26.41%;2012:26.47%)
1,151 1,161 1,005
Taxeffectof:
Foreigntaxrates –117 –116 –114
Non-deductibleexpenses 63 158 111
Taxexemptincome –86 –146 –169
Withholdingtaxes 111 87 71
Researchanddevelopmentandforeigntaxcredits
–41 –41 –29
Prior-yeartaxes –10 –113 15
Reassessmentofdeferredtaxassets,researchanddevelopmenttaxcredits,andforeigntaxcredits
41 60 31
Other –37 21 72
Total income tax expense 1,075 1,071 993Effective tax rate in % 24.7 24.4 26.2
190 Consolidated Financial Statements IFRS
DeferredtaxassetsandliabilitiesonagrossbasisasatDecember31areattributabletothefollowingitems:
Recognized Deferred Tax Assets and Liabilities€millions
2014 2013
Deferred tax assetsIntangibleassets 104 87
Property,plant,andequipment 18 18
Otherfinancialassets 12 7
Tradeandotherreceivables 53 48
Pensionprovisions 87 78
Share-basedpayments 107 105
Otherprovisionsandobligations 403 303
Deferredincome 75 42
Carryforwardsofunusedtaxlosses 707 521
Researchanddevelopmentandforeigntaxcredits 85 65
Other 172 149
Total deferred tax assets 1,823 1,423Deferred tax liabilitiesIntangibleassets 1,218 693
Property,plant,andequipment 53 52
Otherfinancialassets 494 330
Tradeandotherreceivables 69 32
Pensionprovisions 4 6
Share-basedpayments 3 1
Otherprovisionsandobligations 120 107
Deferredincome 11 6
Other 9 14
Total deferred tax liabilities 1,981 1,241Total deferred tax assets/liabilities, net –158 182
Thedeferredtaxassetsanddeferredtaxliabilities,especiallyonintangibleassets,netoperatinglosscarryforwards,andotherfinancialassets,increasedmainlybecauseofourbusinesscombinationsin2014.
DeferredtaxassetshavenotbeenrecognizedinrespectofthefollowingitemsfortheyearsendedDecember31:
Items Not Resulting in a Deferred Tax Asset€millions
2014 2013 2012
Unused tax lossesNotexpiring 140 68 49
Expiringinthefollowingyear 62 43 6
Expiringafterthefollowingyear 908 525 517
Total unused tax losses 1,110 636 572Deductible temporary differences
96 178 202
Unused research and develop-ment and foreign tax credits
Notexpiring 32 25 32
Expiringinthefollowingyear 0 1 0
Expiringafterthefollowingyear 22 1 36
Total unused tax credits 54 27 68
€567million(2013:€421million;2012:€367million)oftheunusedtaxlossesrelatetoU.S.statetaxlosscarryforwards.
Currentincometaxpaymentswerereducedby€71millionin2014(2013:€0million;2012:€4million)duetotheTomorrowNowandVersatalitigation.
Wehavenotrecognizedadeferredtaxliabilityonapproximately€8.87billion(2013:€7.07billion)forundistributedprofitsofoursubsidiaries,becauseweareinapositiontocontrolthetimingofthereversalofthetemporarydifferenceanditisprobablethatsuchdifferenceswillnotreverseintheforeseeablefuture.
191Notes to the Consolidated Financial Statements
Theproposeddividendpaymentof€1.10persharefortheyearendedDecember31,2014,willnothaveanyeffectsontheincometaxofSAPSE.
TotalincometaxincludingtheitemschargedorcrediteddirectlytosharepremiumandothercomprehensiveincomefortheyearsendedDecember31consistsofthefollowing:
Total Income Tax€millions
2014 2013 2012
Incometaxrecordedinprofit 1,075 1,071 993
Incometaxrecordedinsharepremium
–3 –5 –4
Incometaxrecordedinothercomprehensiveincomethatwillnotbereclassifiedtoprofitandloss
Remeasurementsondefinedbenefitpensionplans
–7 3 –4
Incometaxrecordedinothercomprehensiveincomethatwillbereclassifiedtoprofitandloss
Cashflowhedges –10 0 17
Exchangedifferences –21 8 3
Total 1,034 1,077 1,005
Wearesubjecttoongoingtaxauditsbydomesticandforeigntaxauthorities.Currently,wearemainlyindisputewiththeGermanandtheBraziliantaxauthorities.TheGermandisputeisinrespectofintercompanyfinancingmatterswhiletheBraziliandisputeisinrespectoflicensefeedeductibility.Inbothcases,weexpectthatwewillneedtoinitiatelitigationtoprevail.Forbothofthesematters,wehavenotrecordedaprovisionaswebelievethatthetaxauthorities’claimshavenomeritandthatnoadjustmentiswarranted.If,contrarytoourview,thetaxauthoritiesweretoprevailintheirargumentsbeforethecourt,wewouldexpecttohaveanadditionaltaxexpense(includingrelatedinterestexpensesandpenalties)ofapproximately€871millionintotal.
(12) EARNINGS PER SHARE
Restrictedshares(thebonussharesintheShareMatchingPlandiscussedinNote(28)below)grantedtoemployeesunderourshare-basedpaymentsareincludedinthedilutedearningspersharecalculationstotheextenttheyhaveadilutiveeffect.
EarningspersharefortheyearsendedDecember31wascalculatedasfollows:
Earnings per Share €millions,unlessotherwisestated
2014 2013 2012
ProfitattributabletoequityholdersofSAPSE
3,280 3,326 2,803
Issuedordinaryshares1) 1,229 1,229 1,229
Effectoftreasuryshares1) –34 –35 –37
Weightedaveragesharesoutstanding,basic1)
1,195 1,193 1,192
Dilutiveeffectofshare-basedpayments1)
3 2 1
Weightedaveragesharesoutstanding,diluted1)
1,197 1,195 1,193
Earnings per share, basic, attributable to equity holders of SAP SE (in €)
2.75 2.79 2.35
Earnings per share, diluted, attributable to equity holders of SAP SE (in €)
2.74 2.78 2.35
1) Numberofsharesinmillions
192 Consolidated Financial Statements IFRS
(13) OTHER FINANCIAL ASSETSOtherfinancialassetsasatDecember31wereasfollows:
Other Financial Assets€millions
2014 2013
Current Non-Current Total Current Non-Current Total
Loansandotherfinancialreceivables 173 286 459 90 243 333
Debtinvestments 40 0 40 38 0 38
Equityinvestments 1 596 597 0 322 322
Available-for-salefinancialassets 41 596 637 38 322 360
Derivatives 464 90 554 123 6 129
Investmentsinassociates 0 49 49 0 36 36
Total 678 1,021 1,699 251 607 858
Loans and Other Financial ReceivablesLoansandotherfinancialreceivablesmainlyconsistoftimedeposits,investmentsinpensionassetsforwhichthecorrespondingliabilityisincludedinemployee-relatedobligations(seeNote(19b)),otherreceivables,andloanstoemployeesandthirdparties.ThemajorityofourloansandotherfinancialreceivablesareconcentratedintheUnitedStates.
AsatDecember31,2014,therewerenoloansandotherfinancialreceivablespastduebutnotimpaired.Wehavenoindicationsofimpairmentsofloansandotherfinancialreceivablesthatarenotpastdueandnotimpairedasatthereportingdate.Forgeneralinformationonfinancialriskandthenatureofrisk,seeNote(25).
Available-for-Sale Financial AssetsOuravailable-for-salefinancialassetsconsistofdebtinvestmentsinbondsoffinancialandnon-financialcorporationsandmunicipalitiesandequityinvestmentsinlistedandunlistedsecurities.
Theseavailable-for-salefinancialassetsaredenominatedinthefollowingcurrencies:
Currencies of Available-for-Sale Financial Assets€millions
2014 2013
Euros 77 51
U.S.dollars 542 305
Other 18 4
Total 637 360
Formoreinformationonfairvaluemeasurementwithregardtoourequityinvestments,seeNote(27).
DerivativesDetailedinformationaboutourderivativefinancialinstrumentsispresentedinNote(26).
193Notes to the Consolidated Financial Statements
(14) TRADE AND OTHER RECEIVABLESTradeandotherreceivablesasatDecember31wereasfollows:
Trade and Other Receivables€millions
2014 2013
Current Non-Current Total Current Non-Current Total
Tradereceivables,net 4,241 1 4,242 3,801 14 3,815
Otherreceivables 89 99 188 63 84 147
Total 4,330 100 4,430 3,864 98 3,962
ThecarryingamountsofourtradereceivablesasatDecember31areasfollows:
Carrying Amounts of Trade Receivables€millions
2014 2013
Grosscarryingamount 4,428 3,953
Salesallowanceschargedtorevenue –134 –96
Allowancefordoubtfulaccountschargedtoexpense
–52 –42
Carrying amount trade receivables, net
4,242 3,815
Thechangesintheallowancefordoubtfulaccountschargedtoexpensewereimmaterialinallperiodspresented.
194 Consolidated Financial Statements IFRS
TheagingoftradereceivablesasatDecember31was:
Aging of Trade Receivables€millions
2014 2013
Notpastdueandnotindividuallyimpaired 3,349 3,054
Past due but not individually impairedPastdue1–30days 345 330
Pastdue31–120days 339 258
Pastdue121–365days 118 120
Pastdueover365days 16 13
Total past due but not individually impaired 818 721Individuallyimpaired,netofallowances 75 40
Carrying amount of trade receivables, net 4,242 3,815
Formoreinformationaboutfinancialriskandhowwemanageit,seeNotes(25)and(26).
(15) OTHER NON-FINANCIAL ASSETS
Other Non-Financial Assets€millions
2014 2013
Current Non-Current Total Current Non-Current Total
Prepaidexpenses 207 66 273 179 57 236
Othertaxassets 101 0 101 92 0 92
Capitalizedcontractcost 90 99 188 55 50 105
Miscellaneousotherassets 33 0 33 20 0 20
Total 431 164 595 346 107 453
Prepaidexpensesprimarilyconsistofprepaymentsforoperatingleases,supportservices,andsoftwareroyalties.
195Notes to the Consolidated Financial Statements
(16) GOODWILL AND INTANGIBLE ASSETS
Goodwill and Intangible Assets€millions
Goodwill SoftwareandDatabaseLicenses
AcquiredTechnology/IPRD
CustomerRelationshipandOtherIntangibles
Total
Historical costJanuary1,2013 13,288 533 1,778 3,054 18,653
Foreigncurrencyexchangedifferences –345 –2 –40 –95 –482
Additionsfrombusinesscombinations 842 2 192 182 1,218
Otheradditions 0 43 0 0 43
Retirements/disposals 0 –18 –1 –105 –124
December 31, 2013 13,785 558 1,929 3,036 19,308Foreigncurrencyexchangedifferences 1,247 15 160 297 1,719
Additionsfrombusinesscombinations 6,012 16 540 1,312 7,880
Otheradditions 0 86 0 2 88
Retirements/disposals 0 –4 –42 –3 –49
December 31, 2014 21,044 671 2,587 4,644 28,946
Accumulated amortizationJanuary1,2013 96 335 843 953 2,227
Foreigncurrencyexchangedifferences –1 –2 –20 –22 –45
Additionsamortization 0 51 249 303 603
Retirements/disposals 0 –17 –1 –105 –123
December 31, 2013 95 367 1,071 1,129 2,662Foreigncurrencyexchangedifferences 4 7 73 81 165
Additionsamortization 0 78 255 282 615
Retirements/disposals 0 –4 –42 –3 –49
December 31, 2014 99 448 1,357 1,489 3,393
Carrying amountDecember 31, 2013 13,690 191 858 1,907 16,646December 31, 2014 20,945 223 1,230 3,155 25,553
196 Consolidated Financial Statements IFRS
Theadditions,otherthanfrombusinesscombinations,tosoftwareanddatabaselicensesin2014and2013wereindividuallyacquiredfromthirdpartiesandincludecross-licenseagreementsandpatents.
Wecarrythefollowingsignificantintangibleassets:
Significant Intangible Assets€millions,unlessotherwisestated
Carrying Amount RemainingUsefulLife(inyears)
2014 2013
BusinessObjects–Customerrelationships:Maintenance 126 150 7to10
Sybase–Acquiredtechnologies 149 225 1to2
Sybase–Customerrelationships:Maintenance 418 466 8
SuccessFactors–Acquiredtechnologies 184 206 5
SuccessFactors–Customerrelationships:Subscription 402 383 12
Ariba–Acquiredtechnologies 166 186 6
Ariba–Customerrelationships 516 480 11to13
hybris–Acquiredtechnologies 128 159 6
hybris–Customerrelationships 136 137 3to13
Fieldglass–Acquiredtechnologies 96 0 8
Concur–Acquiredtechnologies 445 0 7
Concur–Customerrelationships 1,233 0 16to20
Total significant intangible assets 3,999 2,392
197Notes to the Consolidated Financial Statements
Goodwill Impairment TestingSAPhadasingleoperatingsegmentin2014(in2013,wehadfour).
Single SegmentWedeterminedtherecoverableamountforoursinglesegmentbasedonfairvaluelesscostsofdisposalusingmarketcapitalizationderivedfrompublicquotationsofSAPstock.WebelievethatnoreasonablyforeseeablechangeinthepriceofSAPstockwouldcausethecarryingamountofoursingleoperatingsegmenttoexceeditsrecoverableamount.
Unallocated GoodwillTheunallocatedgoodwillof€5,533millionrelatestotheacquisitionofConcur.SincetheConcuracquisitionwasexecutedveryclosetoDecember31,2014,theimpactoftheacquisitiononoursegmentstructurehadnotyetbeendecidedatyear-end2014andanimpairmenttestonthisgoodwillhadnotbeencarriedout.Wethereforeconsideredwhethertherewerefactorsthatcouldindicatesignsofimpairment,includingpreliminarybusinessplansoftheacquiredbusiness.Inourview,thecalculationsthatwerebasedontradingandtransactionmultiplesofbenchmarkcompaniescomparabletothebusinessforthisrecentacquisitionrepresentthebestestimateoffairvalue.Thedatagatheredforthebenchmarkcompanieswasobtainedfrompubliclyavailableinformation.Analysisofthesefactorsdidnotrevealanyindicationsofimpairment.Formoreinformationabouttheacquisition,seeNote(4).
198 Consolidated Financial Statements IFRS
(17) PROPERTY, PLANT, AND EQUIPMENT
Property, Plant, and Equipment€millions
LandandBuildings OtherProperty,Plant,andEquipment
AdvancePaymentsandConstructionin
Progress
Total
December31,2013 903 873 44 1,820
December 31, 2014 1,010 1,050 42 2,102
Totaladditions(otherthanfrombusinesscombinations)amountingto€629million(2013:€545million)relateprimarilytothereplacementandpurchaseofcomputerhardwareandvehiclesacquiredinthenormalcourseofbusinessandinvestmentsindatacenters.
(18) TRADE AND OTHER PAYABLES, FINANCIAL LIABILITIES, AND OTHER NON-FINANCIAL LIABILITIES(18a) Trade and Other PayablesTradeandotherpayablesasatDecember31wereasfollows:
Trade and Other Payables€millions
2014 2013
Current Non-Current Total Current Non-Current Total
Tradepayables 756 0 756 640 0 640
Advancepaymentsreceived 112 0 112 80 0 80
Miscellaneousotherliabilities 138 55 193 130 45 175
Trade and other payables 1,007 55 1,061 850 45 895
Miscellaneousotherliabilitiesincludemainlydeferralamountsforfreerentperiodsandliabilitiesrelatedtogovernmentgrants.
199Notes to the Consolidated Financial Statements
(18b) Financial LiabilitiesFinancialliabilitiesasatDecember31wereasfollows:
Financial Liabilities€millions
2014 2013
NominalVolume CarryingAmount NominalVolume CarryingAmount
Current Non-Current
Current Non-Current
Total Current Non-Current
Current Non-Current
Total
Bonds 631 4,000 630 3,998 4,628 500 1,800 500 1,791 2,291
Privateplacementtransactions
247 1,936 247 1,948 2,195 86 1,922 86 1,891 1,977
Bankloans 1,279 3,000 1,277 2,985 4,261 0 0 0 0 0
Financial debt 2,157 8,936 2,154 8,931 11,085 586 3,722 586 3,682 4,268Derivatives NA NA 287 46 333 NA NA 97 72 169
Otherfinancialliabilities
NA NA 120 4 124 NA NA 65 4 69
Financial liabilities 2,561 8,980 11,542 748 3,758 4,506
Financialliabilitiesareunsecured,exceptfortheretentionoftitleandsimilarrightscustomaryinourindustry.Effectiveinterestratesonourfinancialdebt(includingtheeffectsfrominterestrateswaps)were1.77%in2014,2.48%in2013,and2.87%in2012.
Forananalysisofthecontractualcashflowsofourfinancialliabilitiesbasedonmaturity,seeNote(25).Forinformationontheriskassociatedwithourfinancialliabilities,seeNote(26).Forinformationonfairvalues,seeNote(27).
200 Consolidated Financial Statements IFRS
BondsAsatDecember31,wehadoutstandingbondswiththefollowingterms:
Bonds
Maturity IssuePrice CouponRate EffectiveInterestRate
NominalVolume(inrespective
currencyinmillions)
Carrying Amount on 12/31/2014 (in € millions)
CarryingAmounton12/31/2013(in€millions)
Eurobond1–2010 2014 99.755% 2.50%(fix) 2.64% €500 0 500
Eurobond2–2010 2017 99.780% 3.50%(fix) 3.58% €500 490 499
Eurobond5–2012 2015 99.791% 1.00%(fix) 1.17% €550 549 547
Eurobond6–2012 2019 99.307% 2.125%(fix) 2.27% €750 778 745
Eurobond7–2014 2018 100.000% 0.381%(var.) 0.43% €750 748 0
Eurobond8–2014 2023 99.478% 1.125%(fix) 1.24% €1,000 992 0
Eurobond9–2014 2027 99.284% 1.75%(fix) 1.86% €1,000 990 0
Eurobonds 4,547 2,291Otherbonds US$98 81 0
Bonds 4,628 2,291
SinceSeptember2012,wehaveusedadebtissuanceprogramtoissuebondsinanumberoftranchesindifferentcurrencies.Currently,thisprogramhasatotalvolumeof€6billion.InNovember2012andinNovember2014,weissuedbondsundertheprogramasshowninthetableabove.Atthereportingdate,avolumeof€1.95billion(2013:€4billion)isavailablefornewbondissuances.
AllourEurobondsarelistedfortradingontheLuxembourgStockExchange.
OurotherbondswereoriginallyissuedbyConcurin2010and2013.ThemajorityofthesenotesweresettledshortlyaftertheacquisitionofConcurandtheremainderofUS$98millionisexpectedtobesettledinthefirstquarter2015.
201Notes to the Consolidated Financial Statements
Private Placement TransactionsOurprivateplacementtransactionshavethefollowingterms:
Private Placements
Maturity CouponRate EffectiveInterestRate
NominalVolume(inrespective
currencyinmillions)
Carrying Amount on 12/31/2014 (in € millions)
CarryingAmounton12/31/2013(in€millions)
Germanpromissorynote
Tranche3–2009 2014 4.92%(fix) 4.98% €86 0 86
U.S.privateplacements
Tranche1–2010 2015 2.34%(fix) 2.40% US$300 247 216
Tranche2–2010 2017 2.95%(fix) 3.03% US$200 161 145
Tranche3–2011 2016 2.77%(fix) 2.82% US$600 494 434
Tranche4–2011 2018 3.43%(fix) 3.50% US$150 121 108
Tranche5–2012 2017 2.13%(fix) 2.16% US$242.5 197 175
Tranche6–2012 2020 2.82%(fix) 2.86% US$290 238 206
Tranche7–2012 2022 3.18%(fix) 3.22% US$444.5 372 313
Tranche8–2012 2024 3.33%(fix) 3.37% US$323 277 225
Tranche9–2012 2027 3.53%(fix) 3.57% US$100 88 69
Private placements 2,195 1,977
TheU.S.privateplacementnoteswereissuedbyoneofoursubsidiariesthathastheU.S.dollarasitsfunctionalcurrency. Bank LoansAsatDecember31,wehadoutstandingbankloanswiththefollowingterms:
Bank Loans
Maturity CouponRate EffectiveInterestRate
NominalVolume(inrespective
currencyinmillions)
Carrying Amount on 12/31/2014 (in € millions)
CarryingAmounton12/31/2013(in€millions)
Concurtermloan–FacilityA 2015 0.272%(var.) 1.64% €1,270 1,268 0
Concurtermloan–FacilityB 2017 0.532%(var.) 0.98% €3,000 2,984 0
Otherloans INR637 9 0
Bank loans 4,261 0
202 Consolidated Financial Statements IFRS
Other Financial LiabilitiesOurotherfinancialliabilitiesmainlycompriseliabilitiesforaccruedinterest.
(18c) Other Non-Financial LiabilitiesOthernon-financialliabilitiesasatDecember31wereasfollows:
Other Non-Financial Liabilities€millions
2014 2013
Current Non-Current Total Current Non-Current Total
Otheremployee-relatedliabilities 1,979 122 2,101 1,775 112 1,887
Share-basedpaymentsliabilities 289 97 387 299 146 445
Othertaxes 539 0 539 488 0 488
Other non-financial liabilities 2,807 219 3,026 2,562 257 2,819
Otheremployee-relatedliabilitiesmainlyrelatetovacationaccruals,bonusandsalescommissionaccruals,aswellasemployee-relatedsocialsecurityobligations.
Formoreinformationaboutourshare-basedpayments,seeNote(28).
Othertaxescomprisemainlypayrolltaxliabilitiesandvalue-addedtaxliabilities.
(19) PROVISIONSProvisionsasatDecember31wereasfollows:
Provisions€millions
2014 2013
Current Non-Current Total Current Non-Current Total
Pensionplansandsimilarobligations(seeNote(19a)) 2 87 89 2 62 64
Otherprovisions(seeNote(19b)) 148 62 210 344 70 414
Total 150 149 299 346 132 478
203Notes to the Consolidated Financial Statements
(19a) Pension Plans and Similar Obligations
Defined Benefit PlansThemeasurementdatesforourdomesticandforeignbenefitplansareDecember31.
Thefollowingtableshowsthepresentvalueofthenatureofthebenefitsprovidedbythedefinedbenefitobligations:
Nature of the Benefits €millions
DomesticPlans ForeignPlans OtherPost-EmploymentPlans
Total
2014 2013 2014 2013 2014 2013 2014 2013
Presentvalueofdefinedbenefitobligation
Benefits based on final salaryAnnuity 18 14 0 2 0 0 18 16
Lumpsum 0 0 6 5 37 25 43 30
Benefits not based on final salaryAnnuity 48 40 234 189 0 1 282 230
Lumpsum 714 574 36 35 9 8 759 617
Total 780 628 276 231 46 34 1,102 893
204 Consolidated Financial Statements IFRS
Presentvalueofthedefinedbenefitobligations(DBOs)andthefairvalueoftheplanassetswithareconciliationofthefundedstatustonetamountsasatDecember31wereasfollows:
Present Value of the DBO and the Fair Value of the Plan Assets €millions
DomesticPlans ForeignPlans OtherPost-EmploymentPlans
Total
2014 2013 2014 2013 2014 2013 2014 2013
Present value of the DBO 780 628 276 231 46 34 1,102 893 Thereoffullyorpartiallyfundedplans 780 628 239 196 26 20 1,045 844
Thereofunfundedplans 0 0 37 35 20 14 57 49
Fair value of the plan assets 767 623 234 201 13 11 1,014 835Net defined benefit liability (asset) 13 5 43 30 33 23 89 58
AmountsrecognizedintheConsolidatedStatementofFinancialPosition:
Non-currentotherfinancialassets 0 0 0 6 0 0 0 6
Currentprovisions 0 0 –2 –2 0 0 –2 –2
Non-currentprovisions –13 –5 –41 –34 –33 –23 –87 –62
Total –13 –5 –43 –30 –33 –23 –89 –58
Thefollowingweightedaverageassumptionswereusedfortheactuarialvaluationofourdomesticandforeignpensionliabilitiesaswellasotherpost-employmentbenefitobligationsasattherespectivemeasurementdate:
Actuarial AssumptionsPercent
DomesticPlans ForeignPlans OtherPost-EmploymentPlans
2014 2013 2012 2014 2013 2012 2014 2013 2012
Discountrate 2.2 3.6 3.3 1.1 2.1 1.9 4.2 5.2 4.8
Futuresalaryincreases 2.5 2.5 2.5 1.7 1.7 1.8 3.8 4.7 4.2
Futurepensionincreases 2.0 2.0 2.0 0.0 0.0 0.0 0.0 0.0 0.0
Employeeturnover 2.0 2.0 2.0 10.1 9.9 9.5 1.3 2.5 2.3
Inflation 0.0 0.0 0.0 1.3 1.3 1.3 1.3 1.1 1.1
205Notes to the Consolidated Financial Statements
Thesensitivityanalysistableshowshowthepresentvalueofalldefinedbenefitobligationswouldhavebeeninfluencedbyreasonablepossiblechangestoaboveactuarialassumptions.Thesensitivityanalysistablepresentedbelowconsiderschangeinoneactuarialassumptionatatime,holdingallotheractuarialassumptionsconstant.Thereasonablepossiblechangeinactuarialassumptionsof50basispointsineitherdirection,exceptfordiscountrate,wouldnotmateriallyinfluencethepresentvalueofalldefinedbenefitobligations.
Sensitivity Analysis€millions
DomesticPlans ForeignPlans OtherPost-EmploymentPlans
Total
2014 2013 2014 2013 2014 2013 2014 2013
Present value of all defined benefit obligations if:Discountratewas50basispointshigher 725 585 259 217 44 32 1,028 834
Discountratewas50basispointslower 840 675 296 246 49 36 1,185 957
Thecomponentsoftotalexpenseofdefinedbenefitpensionplansfortheyears2014,2013,and2012recognizedinoperatingexpensewereasfollows:
Total Expense of Defined Benefit Pension Plans€millions
DomesticPlans ForeignPlans OtherPost-EmploymentPlans
Total
2014 2013 2012 2014 2013 2012 2014 2013 2012 2014 2013 2012
Currentservicecost 3 7 –2 16 15 15 6 3 3 25 25 16
Interestexpense 22 19 21 5 4 8 2 1 1 29 24 30
Interestincome –23 –20 –22 –5 –4 –7 –1 –1 –1 –29 –25 –30
Pastservicecost 0 0 0 0 1 0 0 0 0 0 1 0
Total expense 3 6 –3 16 16 16 7 4 3 26 26 16
Actualreturnonplanassets
133 10 106 10 9 15 1 1 1 144 20 122
206 Consolidated Financial Statements IFRS
Ourinvestmentstrategyondomesticbenefitplansistoinvestallcontributionsinstableinsurancepolicies.
Ourinvestmentstrategiesforforeignbenefitplansvaryaccordingtotheconditionsinthecountryinwhichtherespectivebenefitplansaresituated.Generally,along-terminvestmenthorizonhasbeenadoptedforallmajorforeignbenefitplans.Althoughourpolicyistoinvestinarisk-diversifiedportfolioconsistingofamixofassets,boththe
definedbenefitobligationandplanassetscanfluctuateovertimewhichexposestheGrouptoactuarialandmarket(investment)risks.Dependingonthestatutoryrequirementsineachcountry,itmightbenecessarytoreducetheunderfundingbyadditionofliquidassets.Tominimizetheseactuarialandmarketfluctuations,SAPreviewsrelevantfinancialfactorsforappropriatenessandreasonablenessandmakesmodificationstoeliminatecertaineffectswhenconsiderednecessary. OurplanassetallocationasatDecember31,2014,andDecember31,2013,wasasfollows:
Plan Asset Allocation€millions
2014 2013
QuotedinanActiveMarket
NotQuotedinanActiveMarket
QuotedinanActiveMarket
NotQuotedinanActiveMarket
Asset categoryEquityinvestments 75 0 48 0
Corporatebonds 60 0 65 0
Governmentbonds 1 0 0 0
Realestate 31 0 33 0
Insurancepolicies 0 780 0 632
Cashandcashequivalents 41 0 34 0
Others 27 0 23 0
Total 234 780 203 632
207Notes to the Consolidated Financial Statements
Ourexpectedcontributionin2015toourdomesticandforeigndefinedbenefitpensionplansisimmaterial.Theweighteddurationofourdefinedbenefitplansamountedto14yearsasatDecember31,2014,and15yearsasatDecember31,2013.
Thetablebelowpresentsthematurityanalysisofthebenefitpayments:
Maturity Analysis€millions
DomesticPlans ForeignPlans OtherPost-EmploymentPlans
2014 2013 2014 2013 2014 2013
Lessthanayear 10 8 23 20 2 1
Between1–2years 17 9 40 36 2 2
Between2–5years 56 58 58 53 6 5
Over5years 983 989 195 205 17 64
Total 1,066 1,064 316 314 27 72
Defined Contribution Plans/State PlansWealsomaintaindomesticandforeigndefinedcontributionplans.Amountscontributedbyusundersuchplansarebasedonapercentageoftheemployees’salariesortheamountofcontributionsmadebyemployees.Furthermore,inGermanyandsomeothercountrieswemakecontributionstopublicpensionplansthatareoperatedbynationalorlocalgovernmentorasimilarinstitution.Theexpensesofdefinedcontributionplansandstateplansfortheyears2014,2013,and2012,wereasfollows:
Total Expense of Defined Contribution Plans and State Plans€millions
2014 2013 2012
Definedcontributionplans 188 182 173
Stateplans 360 316 296
Total expense 548 498 469
208 Consolidated Financial Statements IFRS
(19b) Other ProvisionsChangesinotherprovisionsoverthereportingyearwereasfollows:
Other Provisions€millions
1/1/2014 Addition Accretion Utilization Release CurrencyImpact
12/31/2014
Employee-relatedprovisions 52 70 5 –74 –7 1 47
Customer-relatedprovisions 36 115 0 –113 –2 2 39
TomorrowNowandVersatalitigation 223 331 0 –555 –23 25 1
Otherintellectualproperty-relatedlitigation 12 2 0 –3 –1 1 11
Intellectualproperty-relatedprovisions 235 333 0 –558 –24 26 12
Restructuringprovisions 33 137 0 –102 –11 2 59
Onerouscontractprovisions(otherthanfromcustomercontracts)
33 0 2 –11 –2 2 24
Otherprovisions 24 7 0 –2 –1 1 29
Total other provisions 414 662 7 –859 –47 34 210Thereofcurrent 344 148
Thereofnon-current 70 62
Intellectualproperty-relatedprovisionsrelatetolitigationmatters.Customer-relatedprovisionsrelateprimarilytodisputeswithindividualcustomers.Theexpensefromcustomer-relatedprovisionswasalmostcompletelyoffsetbyinsuranceproceeds.BothclassesofprovisionaredescribedinNote(24).
In2014,weestablishedarestructuringplantoexecuteanumberoforganizationalchangestriggeredbyournewcloudandsimplificationstrategy.Restructuringprovisionsprimarilyincludepersonnelcostswhichresultfromseverancepaymentsforemployeeterminationsandcontractterminationcosts,includingthoserelatingtotheterminationofleasecontracts.
Prioryearrestructuringprovisionsrelatetorestructuringactivitiesincurredinconnectionwiththeorganizationalchangesinsalesandgo-to-marketintheEMEAandNorthAmericaregionsaswellastheintegrationofSybaseemployeesintoourglobalfinanceandadministrationorganizationandtheintegrationofthebusinessactivitiesofCrossgate.Formoredetails,seeNote(7).Thecashoutflowsassociatedwithemployee-relatedrestructuringcostsaresubstantiallyshort-terminnature.Thetimingofthecashflowsassociatedwithfacility-relatedprovisionsisdependentontheremainingtermoftheassociatedlease.
209Notes to the Consolidated Financial Statements
(20) DEFERRED INCOMEDeferredincomeconsistsmainlyofprepaymentsmadebyourcustomersforcloudsubscriptions,supportservicesandconsultingservices;feesfrommultipleelementarrangementsallocatedtoundeliveredelements;andamountsrecordedinpurchaseaccountingatfairvalueforobligationstoperformunderacquiredsupportcontractsinconnectionwithacquisitions.
AsatDecember31,2014,currentdeferredincomeincludedatotalof€690millionindeferredrevenue(December31,2013:€443million),whichinthefuturewillberecognizedasrevenuefromcloudsubscriptionsandsupport.
(21) TOTAL EQUITY
Issued CapitalAsatDecember31,2014,SAPSEhadissued1,228,504,232no-parvaluebearershares(December31,2013:1,228,504,232)withacalculatednominalvalueof€1pershare.UponconversionoftheCompanyintoanSE,allsharesofSAPAGbecamesharesofSAPSE.Allthesharesissuedarefullypaid.Thefollowingtableshowsthechangesinthenumberandthevalueofissuedsharesandtreasurysharesinmillions.
Change in Issued Capital and Treasury Shares
NumberofSharesinMillions Valuein€Millions
IssuedCapital TreasuryShares IssuedCapital TreasuryShares
January 1, 2012 1,228 –38 1,228 –1,377Issuingsharesundershare-basedpayments 1 0 1 0
Purchaseoftreasuryshares 0 –1 0 –53
Reissuanceoftreasurysharesundershare-basedpayments 0 2 0 93
December 31, 2012 1,229 –37 1,229 –1,337Reissuanceoftreasurysharesundershare-basedpayments 0 2 0 57
December 31, 2013 1,229 –35 1,229 –1,280Reissuanceoftreasurysharesundershare-basedpayments 0 2 0 56
December 31, 2014 1,229 –33 1,229 –1,224
Authorized SharesTheArticlesofIncorporationauthorizetheExecutiveBoardtoincreasetheissuedcapital:–Uptoatotalamountof€250millionbyissuingnewno-parvaluebearersharesagainstcontributionsincashuntilJune7,2015(AuthorizedCapitalI).Theissuanceissubjecttothestatutorysubscriptionrightsofexistingshareholders.
–Uptoatotalamountof€250millionbyissuingnewno-parvaluebearersharesagainstcontributionsincashorinkinduntilJune7,2015(AuthorizedCapitalII).SubjecttotheconsentoftheSupervisoryBoard,theExecutiveBoardisauthorizedtoexcludetheshareholders’statutorysubscriptionrightsincertaincases.
210 Consolidated Financial Statements IFRS
–Uptoatotalamountofapproximately€30millionbyissuingnewno-parvaluebearersharesagainstcontributionsincashorinkinduntilJune7,2015(AuthorizedCapitalIII).ThenewsharesmayonlybeusedtograntsharestoemployeesofSAPSEanditssubsidiaries(employeeshares).Theshareholders’subscriptionrightsareexcluded.
Contingent SharesSAPSE’ssharecapitalissubjecttoacontingentcapitalincreasewhichmaybeeffectedonlytotheextentthatthe
holdersorcreditorsofconvertiblebondsorstockoptionsissuedorguaranteedbySAPSEoranyofitsdirectlyorindirectlycontrolledsubsidiariesundercertainshare-basedpaymentsexercisetheirconversionorsubscriptionrights,andnoothermethodsforservicingtheserightsareused.AsatDecember31,2014,€100million,representing100millionshares,wasstillavailableforissuance(2013:€100million).
Other Comprehensive IncomeThecomponentofothercomprehensiveincomebeforetaxthatwillbereclassifiedtoprofitorlossinthefutureincludesthefollowingitems:
Items Recognized in Other Comprehensive Income That will be Reclassified to Profit or Loss Before Tax€millions
2014 2013 2012
Gains (losses) on exchange differences 1,165 –576 –214Gains(losses)onremeasuringavailable-for-salefinancialassets 130 79 33
Reclassificationadjustmentsonavailable-for-salefinancialassets –2 –19 –20
Available-for-sale financial assets 128 60 13Gains(losses)oncash-flowhedges –41 78 21
Reclassificationadjustmentsoncash-flowhedges 3 –78 42
Cash-flow hedges –38 0 63
Treasury Shares ByresolutionofSAPSE’sGeneralMeetingofShareholdersheldonJune4,2013,theauthorizationgrantedbytheGeneralMeetingofShareholdersofJune8,2010,regardingtheacquisitionoftreasuryshareswasrevokedtotheextentithadnotbeenexercisedatthattime,andreplacedbyanewauthorizationoftheExecutiveBoardofSAPSEtoacquire,onorbeforeJune3,2018,sharesofSAPSErepresentingaprorataamountofcapitalstockofupto€120millioninaggregate,providedthatthesharespurchasedundertheauthorization,togetherwithanyothersharesintheCompanypreviously
acquiredandheldby,orattributableto,SAPSEdonotaccountformorethan10%ofSAPSE’sissuedsharecapital.Althoughtreasurysharesarelegallyconsideredoutstanding,therearenodividendorvotingrightsassociatedwithsharesheldintreasury.Wemayredeemorresellsharesheldintreasury,orwemayusetreasurysharesforthepurposeofservicingoptionorconversionrightsundertheCompany’sshare-basedpaymentplans.Also,wemayusesharesheldintreasuryasconsiderationinconnectionwithmergerswith,oracquisitionsof,othercompanies.
211Notes to the Consolidated Financial Statements
(22) ADDITIONAL CAPITAL DISCLOSURES
Capital Structure ManagementTheprimaryobjectiveofourcapitalstructuremanagementistomaintainastrongfinancialprofileforinvestor,creditor,andcustomerconfidence,andtosupportthegrowthofourbusiness.Weseektomaintainacapitalstructurethatwillallowustocoverourfundingrequirementsthroughthecapitalmarketsatreasonableconditions,andinsodoing,ensureahighlevelofindependence,confidence,andfinancialflexibility.
Afterundergoinganexternalcreditratingprocess,onSeptember19,2014,SAPSEwasassignedafirst-timelong-termissuercreditratingof“A2”byMoody’sand“A”byStandard&Poor’s,bothwithoutlook“Stable”.
Capital Structure
2014 2013 Changein%
€millions %ofTotalequityand
liabilities
€millions %ofTotalequityand
liabilities
Equity 19,598 51 16,048 59 22
Currentliabilities 8,544 22 6,347 23 35
Non-currentliabilities 10,366 27 4,695 17 121
Liabilities 18,909 49 11,043 41 71
Total equity and liabilities 38,507 100 27,091 100 42
DividendsThetotaldividendavailablefordistributiontoSAPSEshareholdersisbasedontheprofitsofSAPSEasreportedinitsstatutoryfinancialstatementspreparedundertheaccountingrulesintheGermanCommercialCode(Handelsgesetzbuch).FortheyearendedDecember31,2014,theExecutiveBoardintendstoproposethatadividendof€1.10pershare(thatis,anestimatedtotaldividendof€1,315million),bepaidfromtheprofitsofSAPSE.Dividendspersharefor2013and2012were€1.00and€0.85respectivelyandwerepaidinthesucceedingyear.
In2014,wetookoutatwo-tranchebankloanof€4,270millionintotalandissuedathree-trancheEurobondof€2,750millionintotalwithmaturitiesoffourtotwelveyearstofinancetheacquisitionofConcur.Inaddition,wetooka€500millionshort-termbankloanfortheacquisitionofFieldglassand
repaiditinthesameyear.Wealsorepaida€500millionEurobondandthelasttrancheofthepromissorynotesamountingto€86million.Thus,theratiooftotalfinancialdebttototalequityandliabilitiesincreasedby13percentagepointsto29%attheendof2014(16%asatDecember31,2013).
212 Consolidated Financial Statements IFRS
Totalfinancialdebtconsistsofcurrentandnon-currentbankloans,bondsandprivateplacements.Formoreinformationaboutourfinancialdebt,seeNote(18).
Aspartofourfinancingactivities,theCompanyintendstorepaya€550millionEurobondaswellasaUS$300millionU.S.privateplacementtranchewhentheymaturein2015.
Furthermore,weareplanningtorepayasubstantialportionofouroutstandingbankloans.Wewillconsiderissuingnewdebt,suchasbondsorU.S.privateplacements,torefinanceexistingbankloansortocoveradditionalcapitalneeds.
Whilewecontinuouslymonitortheratiospresentedinandbelowthetableabove,ourmainfocusisonthemanagementofournetliquiditypositionasoutlinedinthefollowingtable:
Group Liquidity of SAP Group€millions
2014 2013 Change
Cashandcashequivalents 3,328 2,748 580
Currentinvestments 95 93 2
Group liquidity 3,423 2,841 582Currentfinancialdebt –2,157 –586 –1,571
Net liquidity 1 1,266 2,255 –989Non-currentfinancialdebt –8,936 –3,722 –5,214
Net liquidity 2 –7,670 –1,467 –6,203
Distribution PolicyOurgeneralintentionistoremaininapositiontoreturnexcessliquiditytoourshareholdersbydistributingannualdividendsandpotentiallyrepurchasingshares.Theamountoffuturedividendsandtheextentoffuturerepurchasesofshareswillbebalancedwithourefforttomaintainanadequateliquidityposition.
In2014,wedistributed€1,194millionindividendsfromour2013profit(comparedto€1,013millionin2013and€1,310millionin2012relatedto2012and2011profit,respectively),representing€1.00pershare.Asidefromthedistributeddividend,in2012wealsoreturned€53milliontoourshareholdersbyrepurchasingourownshares.
Asaresultofourequity-settledshare-basedpaymentstransactions(asdescribedinNote(28))wehavecommitmentstograntSAPsharestoemployees.Weintendtomeetthesecommitmentsbyreissuingtreasurysharesorissuingordinaryshares.Formoreinformationaboutcontingentcapital,seeNote(21).
213Notes to the Consolidated Financial Statements
Ouroperatingleasesrelateprimarilytotheleaseofofficespace,hardware,andvehicles,withremainingnon-cancelableleasetermsbetweenlessthanoneand34years.Onalimitedscale,theoperatingleasecontractsincludeescalationclauses(based,forexample,ontheconsumerpriceindex)andrenewaloptions.Thecontractualobligationsforacquisitionofproperty,plant,andequipmentandintangibleassetsrelateprimarilytotheconstructionofnewandexistingfacilitiesandtothepurchaseofhardware,software,patents,officeequipment,andvehicles.Theremainingobligationsrelatemainlytomarketing,consulting,maintenance,licenseagreements,andotherthird-partyagreements.Historically,themajorityofsuchpurchaseobligationshavebeenrealized.
SAPinvestsandholdsinterestsinotherentities.AsofDecember31,2014,totalcommitmentstosuchequityinvestmentsamountedto€123million(2013:€62million)ofwhich€46millionhadbeendrawn(2013:€28million).Byinvestinginsuchequityinvestments,weareexposedtotherisksinherentinthebusinesssegmentsinwhichthesefundschoosetoinvestcontributedfunds.Ourmaximumexposuretolossistheamountinvestedplusunavoidablefuturecapitalcontributions.
CommitmentsasatDecember31,2014,wereasfollows:
Other Financial Commitments€millions
OperatingLeases PurchaseObligations
CapitalContributionCommitments
Due2015 262 479 77
Due2016–2019 729 318 0
Duethereafter 341 62 0
Total 1,332 859 77
Ourrentalandoperatingleaseexpenseswere€291million,€273million,and€277millionfortheyears2014,2013,and2012,respectively.
(23) OTHER FINANCIAL COMMITMENTS
Other Financial CommitmentsOurotherfinancialcommitmentsasatDecember31,2014,and2013,wereasfollows:
Other Financial Commitments€millions
2014 2013
Operating leases 1,332 1,204Contractualobligationsforacquisitionofproperty,plant,andequipmentandintangibleassets
111 80
Otherpurchaseobligations 748 390
Purchase obligations 859 470Capital contribution commitments 77 34
Total 2,268 1,708
214 Consolidated Financial Statements IFRS
(24) LITIGATION AND CLAIMSWearesubjecttoavarietyofclaimsandlawsuitsthatarisefromtimetotimeintheordinarycourseofourbusiness,includingproceedingsandclaimsthatrelatetocompanieswehaveacquired,claimsthatrelatetocustomersdemandingindemnificationforproceedingsinitiatedagainstthembasedontheiruseofSAPsoftware,andclaimsthatrelatetocustomers’beingdissatisfiedwiththeproductsandservicesthatwehavedeliveredtothem.Wewillcontinuetovigorouslydefendagainstallclaimsandlawsuitsagainstus.WecurrentlybelievethatresolvingtheclaimsandlawsuitspendingasofDecember31,2014,willneitherindividuallynorintheaggregatehaveamaterialadverseeffectonourbusiness,financialposition,profit,orcashflows.Consequently,theprovisionsrecordedfortheseclaimsandlawsuitsasofDecember31,2014,areneitherindividuallynorinaggregatematerialtoSAP.
However,theoutcomeoflitigationandclaimsisintrinsicallysubjecttoconsiderableuncertainty.Management’sviewofthelitigationmayalsochangeinthefuture.Actualoutcomesoflitigationandclaimsmaydifferfromtheassessmentsmadebymanagementinpriorperiods,whichcouldresultinamaterialimpactonourbusiness,financialposition,profit,cashflows,orreputation.Mostofthelawsuitsandclaimsareofaveryindividualnatureandclaimsareeithernotquantifiedbytheclaimantsorclaimamountsquantifiedare,basedonhistoricalevidence,notexpectedtobeagoodproxyfortheexpenditurethatwouldberequiredtosettlethecaseconcerned.Thespecificsofthejurisdictionswheremostoftheclaimsarelocatedfurtherimpairthepredictabilityoftheoutcomeofthecases.Therefore,itisnotpracticabletoreliablyestimatethefinancialeffectthattheselawsuitsandclaimswouldhaveifSAPweretoincurexpenditureforthesecases.
Amongtheclaimsandlawsuitsarethefollowingclasses:
Intellectual Property-related Litigation and ClaimsIntellectualproperty-relatedlitigationandclaimscomprisecasesinwhichthirdpartieshavethreatenedorinitiatedlitigationclaimingthatSAPviolatesoneormoreintellectualpropertyrightsthattheypossess.Suchintellectualpropertyrightsmayincludepatents,copyrights,andothersimilarrights.
Thecarryingamountoftheprovisionsrecordedforintellectualproperty-relatedlitigationandclaimsandthechangeinthecarryingamountinthereportingperiodaredisclosedinNote(19b).Theexpectedtimingofanyresultingoutflowsofeconomicbenefitsfromtheselawsuitsandclaimsisuncertainandnotestimableasitdependsgenerallyonthedurationofthelegalproceedingsandsettlementnegotiationsrequiredtoresolvethem.Uncertaintiesabouttheamountsresultprimarilyfromtheunpredictabilityoftheoutcomesoflegaldisputesinseveraljurisdictions.Formoreinformation,seeNote(3c).
Contingentliabilitiesexistfromintellectualproperty-relatedlitigationandclaimsforwhichnoprovisionhasbeenrecognized.Generally,itisnotpracticabletoestimatethefinancialimpactofthesecontingentliabilitiesduetotheuncertaintiesaroundthelitigationandclaims,asoutlinedabove.Thetotalamountsclaimedbyplaintiffsinthoseintellectualproperty-relatedlawsuitsorclaimsinwhichaclaimhasbeenquantifiedwerenotmaterialtousasofDecember31,2014and2013.Basedonourpastexperience,mostoftheintellectualproperty-relatedlitigationandclaimstendtobeeitherdismissedincourtorsettledoutofcourtforamountssignificantlybelowtheoriginallyclaimedamountsandnotmaterialtoourconsolidatedfinancialstatements.Onlyafewcases(specificallytheTomorrowNowandtheVersatalitigation)ultimatelyresultedinasignificantcashoutflow,asdescribedbelow.
215Notes to the Consolidated Financial Statements
Individualcasesofintellectualproperty-relatedlitigationandclaimscomprise:
InMarch2007,UnitedStates-basedOracleCorporationandcertainofitssubsidiaries(Oracle)institutedlegalproceedingsintheUnitedStatesagainstTomorrowNow,Inc.,itsparentcompanySAPAmerica,Inc.,andSAPAmerica’sparentcompanySAPSE(SAP).Oraclefiledseveralamendedcomplaintsbetween2007and2009.Asamended,thelawsuitallegescopyrightinfringement,violationsoftheFederalComputerFraudandAbuseActandtheCaliforniaComputerDataAccessandFraudAct,unfaircompetition,intentionalandnegligentinterferencewithprospectiveeconomicadvantage,andcivilconspiracy.ThelawsuitallegesthatSAPunlawfullycopiedandmisappropriatedproprietary,copyrightedsoftwareproductsandotherconfidentialmaterialsdevelopedbyOracletoserviceitsowncustomers.Thelawsuitsoughtinjunctivereliefandmonetarydamages,includingpunitivedamages,allegedbyOracletobeinthebillionsofU.S.dollars.ThetrialwasheldinNovember2010.Priortotrial,SAPSE,SAPAmericaandTomorrowNowstipulatedtoliabilityforcertainclaimsandSAPagreedtopayOracleUS$120millionforattorneys’fees.Afterthetrial,thejuryreturnedadamagesverdictofUS$1.3billion.Thejudgment,whichwasissuedonFebruary3,2011,additionallyprovidedforprejudgmentinterestofUS$15million.Thejudgmentamountwasalsosubjecttopost-judgmentinterest,whichaccruesfromthetimejudgmentwasentered.
Thejurybaseditsverdictonthetheoryofahypotheticallicense,thatis,thevalueofwhatTomorrowNowwouldhavepaidifithadnegotiatedwithOraclealicenseforthecopyrightsinfringedbyTomorrowNow.Beforeandduringthecourseofthetrial,variousdamagesamountshadbeenpresentedbythepartiestothelitigation.Theyincludedthefollowing:
a)Beforethetrial,OraclehadrequesteddamagesinexcessofUS$3.5billionbasedonalleged“savedacquisitioncosts,”thecourtdismissedthatdamageclaimbasedonapretrialmotion,butOraclehadtherighttoappealthatdismissal.
b)Duringthetrial,Oracle’sdamagesexpertspresentedanamountofUS$408millionbasedonlostprofitsanddisgorgementofinfringer’sprofit.
c)Duringthetrial,membersofOraclemanagementpresented,aspartoftheirtestimonies,amountsofuptoUS$5billion.Oracle’sdamagesexpertpresentedadamagesestimateof“atleast”US$1.655billionunderahypotheticallicensetheory.Oracle’scounselaskedthejurytoaward“somewherebetweenUS$1.65andUS$3billion.”
d)Duringthetrial,thedamagesexpertforTomorrowNowandSAPpresentedanamountofUS$28millionbasedonlostprofitsandinfringer’sprofitsor,alternatively,US$40.6millionbasedonahypotheticallicensetheory.CounselforSAPandTomorrowNowaskedthejurytoawardUS$28million.
Webelievedbothbeforeandduringthetrialandcontinuetobelievethatthehypotheticallicensetheoryisnotanappropriatebasisforcalculatingthedamages.Instead,webelievethatdamagesshouldbebasedonlostprofitsandinfringer’sprofits.Assuch,SAPfiledpost-trialmotionsaskingthejudgetooverturnthejudgment.Ahearingonthepost-trialmotionswasheldinJuly2011.OnSeptember1,2011,thetrialjudgeissuedanorderwhichsetasidethejuryverdictandvacatedthatpartofthejudgmentawardingUS$1.3billionindamages.ThetrialjudgealsogaveOraclethechoiceofacceptingreduceddamagesofUS$272millionorhavinganewtrialbasedonlostprofitsandinfringer'sprofits.Oraclefiledamotionseekinganearlyappealfromtherulingvacatingthejury'sdamagesaward,whichwasdeniedbythejudge.Consequently,Oracleelectedtoproceedwithanewtrial.Inlieuofanewtrial,thepartiesstipulatedtoajudgmentofUS$306millionwhileeachpreservingallrightsforappeal.Bothpartiesfiledrespectivenoticesofappeal;ultimately,
216 Consolidated Financial Statements IFRS
SAPdidnotpursueanappeal,andinsteaddefendedthedistrictcourt'sjudgment.Onappeal,Oraclesoughtthreeformsofrelief:(1)reinstatementoftheNovember2010US$1.3billionverdict;(2)asafirstalternative,anewtrialatwhichOraclemayagainseekhypotheticallicensedamages(basedinpartonevidenceofallegedsaveddevelopmentcosts)plusSAP'sallegedinfringer'sprofitswithoutanydeductionofexpenses(Oracledidnotputanumberonitsclaimfortherequestednewtrial);and(3)asasecondalternative,increaseoftheremittitur(alternativetonewtrial)toUS$408.7million(versustheUS$272millionOraclehadpreviouslyrejected).ThehearingwasheldonMay13,2014.OnAugust29,2014,theappealscourtissueditsdecisionaffirmingthedistrictcourt'sjudgmentandrejectingOracle'srequesttoreinstatetheNovember2010juryverdictorallowittoseekhypotheticallicensedamagesatanynewtrial.Theappealscourtdidorderanincreaseintheremittitur(asanalternativetonewtrial)toUS$356.7million,asopposedtotheUS$408.7millionOraclerequested.Inmid-November,2014,Oraclemadeitselectiontoaccepttheremittitur.OnNovember14,2014,thetrialjudgeenteredfinaljudgmentandthecivilcasewasclosed.PaymenttoOracleofUS$359millionwasmadeonNovember25,2014.
InApril2007,UnitedStates-basedVersataSoftware,Inc.(formerlyTrilogySoftware,Inc.)(Versata)institutedlegalproceedingsintheUnitedStatesDistrictCourtfortheEasternDistrictofTexasagainstSAP.VersataallegedthatSAP’sproductsinfringeoneormoreoftheclaimsineachoffivepatentsheldbyVersata.Initscomplaint,Versatasoughtunspecifiedmonetarydamagesandpermanentinjunctiverelief.ThefirsttrialwasheldinAugust2009.ThejuryreturnedaverdictinfavorofVersataandawardedVersataUS$138.6millionforpastdamages.InJanuary2011,thecourtvacatedthejury’sdamagesawardandorderedanewtrialon
damages.TheretrialwasheldinMay2011.ThejuryreturnedaverdictinfavorofVersataandawardedVersataUS$345millionforpastdamages.InSeptember2011,thejudgedeniedSAP’spost-trialmotionswiththeexceptionofreducingthedamagesverdictbyUS$16milliontoapproximatelyUS$329million.ThejudgealsoorderedapproximatelyUS$60millioninpre-judgmentinterest.Additionally,thejudgegrantedVersata’srequestforabroadinjunctionwhichprohibitsSAPfrom1)sellingproductsintheUnitedStateswiththeinfringingfunctionality,2)providingmaintenancetooracceptingmaintenancerevenuefromexistingcustomersintheUnitedStatesuntilsuchcustomersdisabletheinfringingfunctionalityandverifysuchdisablement,and3)licensingadditionaluserstoexistingcustomersintheUnitedStatesuntilsuchcustomersdisabletheinfringingfunctionalityandverifysuchdisablement.Finally,thejudgestayedtheinjunctionpendingtheoutcomeofanappeal.
BothpartiesappealedtotheU.S.CourtofAppealsfortheFederalCircuit.TheappealhearingoccurredinFebruary2013andadecisionwasissuedonMay1,2013.Thethree-judgepanelruledinVersata’sfavoroninfringementanddamages,leavingbothfullyintact.ThepastdamagesverdictstoodatapproximatelyUS$390million.Regardingtheinjunction,thecourtruledthattheinjunctionwastoobroad,statingthatSAPshouldbeabletoprovidemaintenanceoradditionalseatsforpriorcustomersoftheinfringingproducts,solongasthemaintenanceortheadditionalseatdoesnotinvolve,orallowaccessto,the“enjoinedcapability”whereenjoinedcapabilityisdefinedasthecapabilitytoexecuteapricingprocedureusinghierarchicalaccessofcustomerandproductdata.SAPfiledapetitionseekingrehearingbythethree-judgepanelthatissuedthisdecisionand/orbytheentireappealscourt.TheappealscourtrequestedthatVersatarespondtoSAP’spetitionnolaterthanJuly29,2013.InAugust2013,theappealscourtdeniedSAP’srequestforrehearingandissueditsmandatepassingjurisdictiontothedistrictcourt.
217Notes to the Consolidated Financial Statements
Separately,SAPfiledapetitionwiththeUnitedStatesPatentandTrademarkOffice(USPTO)challengingthevalidityoftheassertedVersatapatent.InJanuary2013,theUSPTOgrantedSAP’srequesttoreconsiderthevalidityofVersata’spatentandinstitutedtherelevantprocedure(transitionalpostgrantreview).AdecisionwasissuedinJune2013renderingallchal-lengedpatentclaims(includingallthepatentclaimsSAPwasfoundtohaveinfringed)unpatentable.VersatafiledwiththeUSPTOarequestseekingreconsiderationofthedecisiononsixdifferentgrounds.TheUSPTOinvitedSAPtofileanoppositionrespondingtotwoofthesixgrounds.OnSeptember13,2013,theUSPTOdeniedVersata’srequestforreconsideration.InNovember,2013,VersatasoughtappealscourtreviewoftheUSPTOdecision.ThehearingonappealoccurredonDecember3,2014.Adecisiononappealisexpectedin2015.
InJune2013,followingthedeterminationofunpatentability,SAPfiledarequestwiththeappealscourttostaythelitigationpendingreviewoftheUSPTOdecision.ThatrequestwasdeniedinearlyJuly2013.
InDecember2013,SAPfiledwiththeUnitedStatesSupremeCourtapetitionforawritofcertioraritoreviewthedecisionsoftheappealscourt.ThatpetitionwasdeniedinJanuary2014.Immediatelythereafter,VersatarequestedthattheDistrictCourtdismissitsremainingclaimsforinjunctiveandequitablerelief.TheDistrictCourtgrantedthatrequestanddeemedthepreviouslyenteredjudgmentfinal.Onthatsameday,SAPrequestedthattheDistrictCourtvacatethejudgmentorstaythelitigation,basedontheUSPTOdecisiondeclaringVersata’spatentclaimsunpatentable.VersatarequestedanorderrequiringSAPtopaythejudgment.InApril2014,theDistrictCourtdeniedSAP’smotiontovacatethejudgmentorstaythelitigation.SAPfiledanappealseekingreviewofthatdistrictcourtdecision.OnmotionbyVersata,theappealscourtdismissedSAP’sappealinJune2014.OnJune30,2014,SAP
filedamotionwiththeappealscourttostayissuanceofitsmandate.Thatmotionwasdenied.SAPsubsequentlyrequestedfromtheU.S.SupremeCourtatemporarystayforthepurposeoftheCourtconsideringapetitionforawritofcertiorari.Thatrequestwasdenied.Versata’srequestforanorderrequiringSAPtopaythejudgmentremainedundecidedattheDistrictCourt.InAugust2014,VersataandSAPenteredintoaPatentLicenseandSettlementAgreement(the“Agreement”)tosettletheexistingpatentlitigationbetweenthecompanies.UnderthetermsoftheAgreement,VersatawilllicensetoSAPcertainpatentsinexchangeforaone-timecashpaymentandapotentialadditionalcontingentpayment.TheAgreementalsoprovidesforgeneralreleases,indemnificationforitsviolation,anddismissestheexistinglitigationwithprejudice.
InFebruary2010,UnitedStates-basedTecSec,Inc.(TecSec)institutedlegalproceedingsintheUnitedStatesagainstSAP(includingitssubsidiarySybase),IBM,andmanyotherdefendants.TecSecallegedthatSAP’sandSybase’sproductsinfringeoneormoreoftheclaimsinfivepatentsheldbyTecSec.Initscomplaint,TecSecseeksunspecifiedmonetarydamagesandpermanentinjunctiverelief.Thetrialhasnotyetbeenscheduled.ThelegalproceedingswerestayedagainstalldefendantspendingadecisionfromtheU.S.SupremeCourtonSAP’sandotherdefendants’requestforreview.SupremeCourtreviewwasdeclinedinJune2014.Thelawsuithasresumedatthedistrictcourtbutonlywithrespecttoonedefendant.ThelawsuitagainstSAPandSybaseremainsstayed.
218 Consolidated Financial Statements IFRS
InApril2010,SAPinstitutedlegalproceedings(aDeclaratoryJudgmentaction)intheUnitedStatesagainstWellogix,Inc.andWellogixTechnologyLicensing,LLC(Wellogix).ThelawsuitseeksadeclaratoryjudgmentthatfivepatentsownedbyWellogixareinvalidand/ornotinfringedbySAP.Thetrialhasnotyetbeenscheduled.ThelegalproceedingshavebeenstayedpendingtheoutcomeofsixreexaminationsfiledwiththeUSPTO.InSeptember2013,theUSPTOissuedadecisiononfourofthesixreexaminations,invalidatingeveryclaimofeachofthefourpatents.SAPisawaitingadecisiononthetworemainingreexaminationrequests.InresponsetoSAP’spatentDeclaratoryJudgmentaction,Wellogixhasre-assertedtradesecretmisappropriationclaimsagainstSAP(whichhadpreviouslybeenraisedandabandoned).ThecourtgrantedSAP’smotionforanearlydispositivedecisiononthetradesecretclaims,butWellogixhasaskedthecourttoreconsideritsdecisionandweareawaitingthecourt’sdecisiononthereconsiderationmotion.
InAugust2007,UnitedStates-basedelcommerce.com,Inc.(elcommerce)institutedlegalproceedingsintheUnitedStatesagainstSAP.elcommerceallegedthatSAP’sproductsinfringeoneormoreoftheclaimsinonepatentheldbyelcommerce.Initscomplaint,elcommercesoughtunspecifiedmonetarydamagesandpermanentinjunctiverelief.ThecourtinEastTexasgrantedSAP’srequesttotransferthelitigationfromEastTexastoPennsylvania.SubsequenttotheMarkmanrulingbythecourt,thepartiesagreedtotheentryoffinaljudgmentregardingnon-infringementbySAPofthemethodclaimsofthepatentandinvalidityofthesystemclaims.elcommercehasappealedthecourt’sMarkmanruling.ThehearingfortheappealwasheldinMay2012.SAPalsofiledareexaminationrequestwiththeUSPTOtoinvalidateelcommerce’spatent.OnSeptember23,2013,theUSPTOissuedadecisioninvalidatingthepatent.elcommercesoughtrehearingfromtheUSPTO,butthatrequestwasdeniedinMarch,2014.TheFederalCircuitappealscourtalsoissuedadecisioninFebruary,2014,confirmingthatSAPdidnotinfringesomeclaimsoftheelcommercepatent,butreversingthedistrictcourt’sdecision
ofinvalidityofthepatent.SAPhasaskedtheFederalCircuitcourttoreconsideritsinvaliditydecision.InJune2014,elcommerceandSAPjointlymovedtodismisstheappealontheFederalCircuitcourt.Thelegaldisputeisthusclosed.
Customer-related Litigation and Claims Customer-relatedlitigationandclaimsincludecasesinwhichweindemnifyourcustomersagainstliabilitiesarisingfromaclaimthatourproductsinfringeathirdparty’spatent,copyright,tradesecret,orotherproprietaryrights.Occasionally,consultingorsoftwareimplementationprojectsresultindisputeswithcustomers.Wherecustomersaredissatisfiedwiththeproductsandservicesthatwehavedeliveredtotheminroutineconsultingcontractsordevelopmentarrangements,wemaygrantfunctionsorperformanceguarantees.
Thecarryingamountoftheprovisionsrecordedforcustomer-relatedlitigationandclaimsandthedevelopmentofthecarryingamountinthereportingperiodaredisclosedinNote(19b).Theexpectedtimingoramountsofanyresultingoutflowsofeconomicbenefitsfromtheselawsuitsandclaimsisuncertainandnotestimableastheygenerallydependonthedurationofthelegalproceedingsandsettlementnegotiationsrequiredtoresolvethelitigationandclaimsandtheunpredictabilityoftheoutcomesoflegaldisputesinseveraljurisdictions.Formoreinformation,seeNote(3c).
Contingentliabilitiesexistfromcustomer-relatedlitigationandclaimsforwhichnoprovisionhasbeenrecognized.Generally,itisnotpracticabletoestimatethefinancialimpactofthesecontingentliabilitiesduetotheuncertaintiesaroundtheselawsuitsandclaimsoutlinedabove.
219Notes to the Consolidated Financial Statements
Non-Income Tax-related Litigation and ClaimsWearesubjecttoongoingauditsbydomesticandforeigntaxauthorities.AlongwithmanyothercompaniesoperatinginBrazil,weareinvolvedinvariousproceedingswithBrazilianauthoritiesregardingassessmentsandlitigationmattersonnon-incometaxesonintercompanyroyaltypaymentsandintercompanyservices.Thetotalpotentialamountrelatedtothesemattersforallapplicableyearsisapproximately€95million.Wehavenotrecordedaprovisionforthesematters,aswebelievethatwewillprevail.
Formoreinformationaboutincometax-relatedlitigationrisks,seeNote(11).(25) FINANCIAL RISK FACTORSWeareexposedtovariousfinancialrisks,suchasmarketrisks(includingforeigncurrencyexchangeraterisk,interestraterisk,andequitypricerisk),creditrisk,andliquidityrisk.
Market Risk
a) Foreign Currency Exchange Rate RiskAsagloballyactiveenterprise,wearesubjecttorisksassociatedwithfluctuationsinforeigncurrencieswithregardtoourordinaryoperations.SincetheGroup’sentitiesmainlyconducttheiroperatingbusinessintheirownfunctionalcurrencies,ourriskofexchangeratefluctuationsfromongoingordinaryoperationsisnotconsideredsignificant.However,occasionallywegenerateforeigncurrency-denominatedreceivables,payables,andothermonetaryitemsbytransactinginacurrencyotherthanthefunctionalcurrency.Tomitigatetheextentoftheassociatedforeigncurrencyexchangeraterisk,themajorityofthesetransactionsarehedgedasdescribedinNote(26).
Inrarecircumstances,transactinginacurrencyotherthanthefunctionalcurrencyalsoleadstoembeddedforeigncurrencyderivativesbeingseparatedandmeasuredatfairvaluethroughprofitorloss.
Inaddition,theIntellectualProperty(IP)holdersintheSAPGroupareexposedtorisksassociatedwithforecastedintercompanycashflowsinforeigncurrencies.ThesecashflowsariseoutofroyaltypaymentsfromsubsidiariestotherespectiveIPholder.Theroyaltiesarelinkedtothesubsidiaries’externalrevenue.ThisarrangementleadstoaconcentrationoftheforeigncurrencyexchangerateriskwiththeIPholders,astheroyaltiesaremostlydenominatedinthesubsidiaries’localcurrencies,whilethefunctionalcurrencyoftheIPholderswiththehighestroyaltyvolumeistheeuro.Thehighestforeigncurrencyexchangerateexposureofthiskindrelatestothecurrenciesofsubsidiarieswithsignificantoperations,forexampletheU.S.dollar,thepoundsterling,theJapaneseyen,theSwissfranc,theBrazilianreal,andtheAustraliandollar.
Generally,wearenotexposedtoanysignificantforeigncurrencyexchangerateriskwithregardtoourinvestingandfinancingactivities,assuchactivitiesarenormallyconductedinthefunctionalcurrencyoftheinvestingorborrowingentity.However,wewereexposedtoacashflowriskfromtheconsiderationtobepaidinU.S.dollarsfortheacquisitionofConcurandFieldglassin2014andhybrisin2013asthefundswereprovidedthroughourfreecashandacquisitiontermloans,bothmostlygeneratedineuros.Formoreinformation,seeNote(26).
b) Interest Rate RiskWeareexposedtointerestrateriskasaresultofourinvestingandfinancingactivitiesmainlyineurosandU.S.dollars.
220 Consolidated Financial Statements IFRS
AsatDecember31,2014,ourliquiditywasmainlyinvestedintimedepositswithfixedyields,andmoneymarketinstrumentswithvariableyields,heldascashequivalentsandcurrentandnon-currentinvestments.Sincemostofthefixedyieldtimedepositsheldatyear-endhaveshortmaturities,theydonotexposeustoasubstantialfairvalueinterestraterisk.However,weareexposedtoacashflowriskfromourcashheldatbanksspreadacrosstheworldandthevariableyieldmoneymarketfunds,mainlyheldintheUnitedStatesandGermany.
AsatDecember31,2014,wewereexposedtoaninterestrateriskfromourfinancingactivities(formoreinformationabouttheindividualinstruments,seeNote(18b))as€3.8billionofourissuedbondsandalltheU.S.privateplacementnotespayfixedinterestleadingtoafairvalueriskwhileourtermloanstotaling€4.3billionanda€750million-bondgiverisetoacash-flowrisk,astheinterestpaymentsarebasedontheprevailingEURIBORrates.
c) Equity Price RiskWeareexposedtosuchequitypriceriskwithregardtoourinvestmentsinlistedequitysecurities(2014:€209million;2013:€83million)andourshare-basedpayments(fortheexposurefromtheseplans,seeNote(28)).
Credit RiskToreducethecreditriskininvestments,wearrangedtoreceiverightstocollateralforcertaininvestingactivitiesinthefullamountoftheinvestmentvolume,whichwewouldbeallowedtomakeuseofonlyinthecaseofdefaultofthecounterpartytotheinvestment.Intheabsenceofothersignificantagreementstoreduceourcreditriskexposure,thetotalamountsrecognizedascashandcashequivalents,currentinvestments,loansandotherfinancialreceivables,andderivativefinancialassetsrepresentourmaximumexposuretocreditrisks,exceptfortheagreementsmentionedabove.
Liquidity RiskAmaturityanalysisthatprovidestheremainingcontractualmaturitiesofallourfinancialliabilitiesheldatDecember31,2014,isshowninthetablebelow.Financialliabilitiesshowninthetablebelowforwhichrepaymentcanberequestedbythecontractpartneratanytimeareassignedtotheearliestpossibleperiod.VariableinterestpaymentswerecalculatedusingthelastrelevantinterestratefixedasatDecember31,2014.Aswegenerallysettleourderivativecontractsgross,weshowthepayandreceivelegsseparatelyforallourcurrencyandinterestratederivatives,whetherornotthefairvalueofthederivativeisnegative,exceptforthederivativeforwardcontractsenteredintoinconnectionwiththeacquisitionofConcur,wherewebuyandsellUS$8.5billionbecauseweplantosettlethosenet.Thecashoutflowsforthecurrencyderivativesaretranslatedusingtheapplicableforwardrate.
ThecashflowsforunrecognizedbutcontractuallyagreedfinancialcommitmentsareshowninNote(23).
221Notes to the Consolidated Financial Statements
Contractual Maturities of Financial Liabilities and Financial Assets€millions
CarryingAmount
ContractualCashFlows
12/31/2014 2015 2016 2017 2018 2019 Thereafter
Non-derivative financial liabilitiesTradepayables –756 –756 0 0 0 0 0
Financialliabilities –11,209 –2,377 –625 –3,976 –958 –827 –3,262
Total of non-derivative financial liabilities –11,964 –3,133 –625 –3,976 –958 –827 –3,262
Derivative financial liabilities and assetsDerivative financial liabilities
Currencyderivativesnotdesignatedashedginginstruments –310
Cashoutflows –4,110 –9 –9 –9 –9 –8
Cashinflows 3,836 0 0 0 0 0
Currencyderivativesdesignatedashedginginstruments –22
Cashoutflows –487 0 0 0 0 0
Cashinflows 464 0 0 0 0 0
Interest-ratederivativesdesignatedashedginginstruments –1
Cashoutflows –7 –10 –12 –2 0 0
Cashinflows 9 9 9 1 0 0
Total of derivative financial liabilities –333 –295 –10 –12 –10 –9 –8Derivative financial assets
Currencyderivativesnotdesignatedashedginginstruments 411
Cashoutflows –1,236 0 0 0 0 0
Cashinflows 1,656 0 0 0 0 0
Currencyderivativesdesignatedashedginginstruments 10
Cashoutflows –162 0 0 0 0 0
Cashinflows 163 0 0 0 0 0
Interest-ratederivativesdesignatedashedginginstruments 77
Cashoutflows –34 –40 –48 –39 –43 –123
Cashinflows 62 63 63 44 44 99
Total of derivative financial assets 498 449 23 15 5 1 –24Total of derivative financial liabilities and assets 165 154 13 3 –5 –8 –32
222 Consolidated Financial Statements IFRS
Contractual Maturities of Financial Liabilities and Financial Assets€millions
CarryingAmount
ContractualCashFlows
12/31/2013 2014 2015 2016 2017 2018 Thereafter
Non-derivative financial liabilitiesTradepayables –640 –640 0 0 0 0 0
Financialliabilities –4,336 –731 –863 –513 –891 –153 –1,730
Total of non-derivative financial liabilities –4,976 –1,371 –863 –513 –891 –153 –1,730
Derivative financial liabilities and assetsDerivative financial liabilities
Currencyderivativesnotdesignatedashedginginstruments –144
Cashoutflows –1,975 –9 –9 –8 –8 –15
Cashinflows 1,885 0 0 0 0 0
Currencyderivativesdesignatedashedginginstruments –3
Cashoutflows –178 0 0 0 0 0
Cashinflows 174 0 0 0 0 0
Interest-ratederivativesdesignatedashedginginstruments –23
Cashoutflows –12 –17 –27 –39 –37 –192
Cashinflows 30 35 35 35 28 123
Total of derivative financial liabilities –170 –76 9 –1 –12 –17 –84Derivative financial assets
Currencyderivativesnotdesignatedashedginginstruments 26
Cashoutflows –2,544 0 0 0 0 0
Cashinflows 2,569 0 0 0 0 0
Currencyderivativesdesignatedashedginginstruments 30
Cashoutflows –391 0 0 0 0 0
Cashinflows 419 0 0 0 0 0
Interest-ratederivativesdesignatedashedginginstruments 5
Cashoutflows –12 –25 –29 –36 –21 –24
Cashinflows 19 33 33 33 16 16
Total of derivative financial assets 61 60 8 4 –3 –5 –8Total of derivative financial liabilities and assets –109 –16 17 3 –15 –22 –92
(26) FINANCIAL RISK MANAGEMENTWemanagemarketrisks(includingforeigncurrencyexchangeraterisk,interestraterisk,andequitypricerisk),creditrisk,andliquidityriskonaGroup-widebasisthroughourglobaltreasurydepartment.Ourriskmanagementandhedgingstrategyissetbyourtreasuryguidelineandotherinternal
guidelines,andissubjecttocontinuousinternalriskanalysis.Derivativefinancialinstrumentsareonlypurchasedtoreducerisksandnotforspeculation,whichisdefinedasenteringintoderivativeinstrumentswithoutacorrespondingunderlyingtransaction.
223Notes to the Consolidated Financial Statements
Inthefollowingsectionsweprovidedetailsonthemanagementofeachrespectivefinancialriskandourrelatedriskexposure.Inthesensitivityanalysesthatshowtheeffectsofhypotheticalchangesofrelevantriskvariablesonprofitorothercomprehensiveincome,wedeterminetheperiodiceffectsbyrelatingthehypotheticalchangesintheriskvariablestothebalanceoffinancialinstrumentsatthereportingdate.
Foreign Currency Exchange Rate Risk ManagementWecontinuallymonitorourexposuretocurrencyfluctuationrisksbasedonmonetaryitemsandforecastedtransactionsandpursueaGroup-widestrategytomanageforeigncurrencyexchangeraterisk,usingderivativefinancialinstruments,primarilyforeignexchangeforwardcontracts,asappropriate,withtheprimaryaimofreducingprofitorlossvolatility.
Currency Hedges Not Designated as Hedging InstrumentsTheforeignexchangeforwardcontractsweenterintotooffsetexposurerelatingtoforeign-currencydenominatedmonetaryassetsandliabilitiesarenotdesignatedasbeinginahedgeaccountingrelationship,becausetherealizedcurrencygainsandlossesfromtheunderlyingitemsarerecognizedinprofitorlossinthesameperiodsasthegainsandlossesfromthederivatives.
Currencyhedgesnotdesignatedashedginginstrumentsalsoincludeforeigncurrencyderivativesembeddedinnon-derivativehostcontractsthatareseparatedandaccountedforasderivativesaccordingtotherequirementsofIAS39.
Inaddition,during2014weheldforeignexchangeforwardcontractsandforeigncurrencyoptionstohedgethecashflowriskfromtheconsiderationpaidinU.S.dollarsfortheacquisitionofConcur.
Currency Hedges Designated as Hedging Instruments (Cash Flow Hedges)Weenterintoderivativefinancialinstruments,primarilyforeignexchangeforwardcontracts,tohedgesignificantforecastedcashflows(royalties)fromforeignsubsidiariesdenominatedinforeigncurrencieswithadefinedsetofhedgeratiosandahedgehorizonofupto12months.Specifically,weexcludetheinterestcomponentandonlydesignatethespotrateoftheforeignexchangeforwardcontractsasthehedginginstrumenttooffsetanticipatedcashflowsrelatingtothesubsidiarieswithsignificantoperations,includingtheUnitedStates,theUnitedKingdom,Japan,Switzerland,Brazil,andAustralia.Wegenerallyuseforeignexchangederivativesthathavematuritiesof12monthsorless,whichmayberolledovertoprovidecontinuouscoverageuntiltheapplicableroyaltiesarereceived.
In2014,netlossestotaling€30million(2013:netgainsof€57million;2012:netgainsof€17million)resultingfromthechangeinthecomponentofthederivativesdesignatedashedginginstrumentswererecordedinothercomprehensiveincome.
FortheyearsendedDecember31,2014and2013,nopreviouslyhighlyprobabletransactiondesignatedasahedgediteminaforeigncurrencycashflowhedgerelationshipceasedtobeprobable.Therefore,wedidnotdiscontinueanyofourcashflowhedgerelationships.Also,weidentifiednoineffectivenessinallyearsreported.In2014,wereclassifiednetlossesof€2million(2013:netgainsof€57million;2012:netlossesof€24million)fromothercomprehensiveincometoprofitorlossduetothehedgeditemsaffectingincome.Generally,thecashflowsofthehedgedforecastedtransactionsareexpectedtooccurandtoberecognizedinprofitorlossmonthlywithinatimeframeof12monthsfromthedateofthestatementoffinancialposition.Itisestimatedthat€8millionofthenetlossesrecognizedinothercomprehensiveincomein2014willbereclassifiedfromothercomprehensiveincometoprofitorlossin2015.
224 Consolidated Financial Statements IFRS
Foreign Currency Exchange Rate ExposureInlinewithourinternalriskreportingprocess,weusethecashflow-at-riskmethodtoquantifyourriskpositionswithregardtoourforecastedintercompanytransactionsandvalue-at-riskforourforeign-currencydenominatedfinancialinstruments.Inordernottoprovidetwodifferentmethodologies,wehaveoptedtodiscloseourriskexposurebasedonasensitivityanalysisconsideringthefollowing:–SincetheSAPGroup’sentitiesgenerallyoperateintheirfunctionalcurrencies,themajorityofournon-derivativemonetaryfinancialinstruments,suchascashandcashequivalents,tradereceivables,tradepayables,loanstoemployeesandthirdparties,bankliabilities,andotherfinancialliabilities,aredenominatedintherespectiveentities’functionalcurrency.Thus,aforeigncurrencyexchangerateriskinthesetransactionsisnearlynon-existent.Inexceptionalcasesandlimitedeconomicenvironments,operatingandfinancingtransactionsaredenominatedincurrenciesotherthanthefunctionalcurrency,leadingtoaforeigncurrencyexchangerateriskfortherelatedmonetaryinstruments.Wherewehedgeagainstcurrencyimpactsoncashflows,theseforeigncurrency-denominatedfinancialinstrumentsareeconomicallyconvertedintothefunctionalcurrencybytheuseofforwardexchangecontractsoroptions.Therefore,fluctuationsinforeigncurrencyexchangeratesneitherhaveasignificantimpactonprofitnoronothercomprehensive
incomewithregardtoournon-derivativemonetaryfinancialinstruments.
–Incomeorexpensesrecordedinconnectionwiththenon-derivativemonetaryfinancialinstrumentsdiscussedabovearemainlyrecognizedintherelevantentity’sfunctionalcurrency.Therefore,fluctuationsinforeigncurrencyexchangeratesneitherhaveasignificantimpactonprofitnoronothercomprehensiveincomeinthisregard.
–Ourfree-standingderivativesdesignedforhedgingforeigncurrencyexchangeraterisksalmostcompletelybalancethechangesinthefairvaluesofthehedgeditemattributabletoexchangeratemovementsintheConsolidatedIncomeStatementsinthesameperiod.Asaconsequence,thehedgeditemsandthehedginginstrumentsarenotexposedtoforeigncurrencyexchangeraterisks,andtherebyhavenoeffectonprofit.
Consequently,weareonlyexposedtosignificantforeigncurrencyexchangeratefluctuationswithregardto:–Derivativesheldwithinadesignatedcashflowhedgerelationship(excludingtheinterestelement,whichisnotpartoftheassignedcashflowhedgerelationships)
–Foreigncurrencyembeddedderivatives.
Aswedonothaveasignificantexposuretowardasinglecurrency,wediscloseoursensitivitytoourmajorforeigncurrencies(describedinNote(25))intotal.
Foreign Currency Sensitivity€millions
EffectsonOtherNon-OperatingExpense,Net
EffectsonOtherComprehensiveIncome
2014 2013 2012 2014 2013 2012
Derivativesheldwithinadesignatedcashflowhedgerelationship
Allmajorcurrencies–10% 74 57 60
Allmajorcurrencies+10% –74 –57 –60
Embeddedderivatives
Allcurrencies–10% 32 35 41
Swissfranc+20%/othercurrencies+10%(2013,2012:allcurrencies+10%)
–62 –35 –41
225Notes to the Consolidated Financial Statements
OurforeigncurrencyexposureasatDecember31(andifyear-endexposureisnotrepresentative,alsoouraverage/high/lowexposure)wasasfollows:
Foreign Currency Exposure €billions
2014 2013
Year-endexposuretowardsallourmajorcurrencies 1.0 0.9
Averageexposure 2.7 1.0
Highestexposure 7.7 1.1
Lowestexposure 1.0 0.9
During2014,oursensitivitytoforeigncurrencyexchangeratefluctuationsincreasedcomparedtotheyearendedDecember31,2013mainlyduetothehedgingtransactionsfortheacquisitionofConcur.However,duetoourhedgingstrategy,thiscomparativelyhighexposurewasonlyone-sided;therewasnosubstantialdownsiderisk.
Interest Rate Risk ManagementTheaimofourinterestrateriskmanagementistoreduceprofitorlossvolatilityandoptimizeourinterestresultbycreatingabalancedstructureoffixedandvariablecashflows.Wethereforemanageinterestraterisksbyaddinginterestrate-relatedderivativeinstrumentstoagivenportfolioofinvestmentsanddebtfinancing.
AsatDecember31,2014,acashflowinterestrateriskexistedwithregardtoourcashatbanksof€1.8billion,ourinvestingactivitiesinmoneymarketinstrumentswithvariableyieldsintheamountof€633millionandourvariableratefinancingtransactionsof€5.03billion.Afairvalueinterestrateriskarisesfromthefixedyieldtimedepositsaswellasthefixedratefinancingtransactionsheldatamortizedcost.
55%(2013:100%)ofourtotalinterest-bearingfinancialliabilitiesoutstandingasatDecember31,2014,hadafixedinterestratewhereas29%(2013:40%)ofourinterest-bearingcash,cashequivalents,timedeposits,andavailable-for-salefinancialassetshadafixedinterestrate.Derivatives Designated as Hedging Instruments (Fair Value Hedges)Themajorityofourinvestmentsarebasedonvariableratesand/orshortmaturitieswhilemostofourfinancingtransactionsarebasedonfixedratesandlongmaturities.Tomatchtheinterestrateriskfromourfinancingtransactionstoourinvestmentsweusereceiverinterestrateswapstoconvertcertainofourfixedratefinancialliabilitiestofloatingandbythismeanssecurethefairvalueoftheswappedfinancingtransactions.Thedesiredfix-floatingmixofournetdebtissetbytheTreasuryCommittee.Includinginterestrateswaps,30%(2013:44%)ofourtotalinterest-bearingfinancialliabilitiesoutstandingasatDecember31,2014,hadafixedinterestrate.
Noneofthefairvalueadjustmentfromthereceiverswaps,thebasisadjustmentontheunderlyinghedgeditemsheldinfairvaluehedgerelationships,andthedifferencebetweenthetworecognizedinfinancialincome,netismaterialinanyoftheyearspresented.
Interest Rate ExposureAsensitivityanalysisisprovidedtoshowtheimpactofourinterestrateriskexposureonprofitorlossandequityinaccordancewithIFRS7,consideringthefollowing:–Changesininterestratesonlyaffecttheaccountingfornon-derivativefixedratefinancialinstrumentsiftheyarerecognizedatfairvalue.Therefore,suchinterestratechangesdonotchangethecarryingamountsofournon-derivativefixedratefinancialliabilitiesasweaccountforthematamortizedcost.Investmentsinfixedratefinancialassetsclassifiedasavailable-for-salewerenotmaterialateachyear-endreported.Thus,wedonotconsideranyfixedrateinstrumentsintheequity-relatedsensitivitycalculation.
226 Consolidated Financial Statements IFRS
thebondsandprivateplacementsashedgeditems.However,changesinmarketinterestratesaffecttheamountofinterestpaymentsfromtheinterestrateswap.Asaconsequence,theyareincludedintheprofit-relatedsensitivitycalculation.
Duetotheunevendevelopmentexpectationsofinterestrates,webaseoursensitivityanalysesonayieldcurveupwardshiftof+100/+50basispointsfortheU.S.dollar/euroarea(2013,2012:+100bps)andayieldcurvedownwardshiftof–50basispointsforboththeU.S.dollar/euroarea(2013,2012:–20bps).–If,onDecember31,2014,2013,and2012,interestrateshadbeenhigher/lowerasdescribedabove,thiswouldnothavehadamaterialeffectonfinancialincome,netforourvariableinterestrateinvestmentsandwouldhavehadthefollowingeffectsonfinancialincome,net:
Interest-Rate Sensitivity€millions
EffectsonFinancialIncome,Net
2014 2013 2012
Derivativesheldwithinadesignatedfairvaluehedgerelationship
Interestrates+100bpsinU.S.dollararea/+50bpsineuroarea(2013,2012:+100bpsinU.S.dollar/euroarea)
–116 –24 0
Interestrates–50bpsinU.S.dollar/euroarea(2013,2012:–20bpsinU.S.dollar/euroarea)
70 5 0
Variableratefinancing
Interestrates+50bpsineuroarea –65 0 0
Interestrates–50bpsineuroarea 65 0 0
–Incomeorexpensesrecordedinconnectionwithnon-derivativefinancialinstrumentswithvariableinterestratesaresubjecttointerestrateriskiftheyarenothedgeditemsinaneffectivehedgerelationship.Thus,wetakeintoconsiderationinterestratechangesrelatingtoourvariableratefinancingandourinvestmentsinmoneymarketinstrumentsintheprofit-relatedsensitivitycalculation.
–Thedesignationofinterestratereceiverswapsinafairvaluehedgerelationshipleadstointerestratechangesaffectingfinancialincome,net.Thefairvaluemovementsrelatedtotheinterestrateswapsarenotreflectedinthesensitivitycalculation,astheyoffsetthefixedinterestratepaymentsfor
227Notes to the Consolidated Financial Statements
OurinterestrateexposureasatDecember31(andifyear-endexposureisnotrepresentative,alsoouraverage/high/lowexposure)wasasfollows:
Interest-Rate Risk Exposure€billion
2014 2013
Year-End Average High Low Year-End Average High Low
Fairvalueinterest-raterisk
Frominvestments 0.04 0.05 0.08 0.04 0.04 0.06 0.13 0.04
Cashflowinterestraterisk
Frominvestments(incl.cash) 2.45 2.48 2.74 2.13 1.73 2.23 2.71 1.73
Fromfinancing 5.03 0.75 5.03 0.00 0.00 0.31 1.00 0.00
Frominterestrateswaps 2.55 2.44 2.55 2.39 2.39 0.60 2.40 0.00
Equity Price Risk ManagementOurinvestmentsinequityinstrumentswithquotedmarketpricesinactivemarkets(2014:€209million;2013:€83million)aremonitoredbasedonthecurrentmarketvaluethatisaffectedbythefluctuationsinthevolatilestockmarketsworldwide.Anassumed20%increase(decrease)inequitypricesasatDecember31,2014(2013),wouldnothaveamaterialimpactonthevalueofourinvestmentsinmarketableequitysecuritiesandthecorrespondingentriesinothercomprehensiveincome.
Weareexposedtoequitypriceriskwithregardtoourshare-basedpayments.Inordertoreduceresultingprofitorlossvolatility,wehedgecertaincashflowexposuresassociatedwiththeseplansthroughthepurchaseofderivativeinstruments,butdonotestablishadesignatedhedgerelationship.Inoursensitivityanalysisweincludetheunderlyingshare-basedpaymentsandthehedginginstruments.Thus,webasethecalculationonournetexposuretoequitypricesaswebelievetakingonlythederivativeinstrumentintoaccountwouldnotproperlyreflectourequitypriceriskexposure.Anassumed20%increase(decrease)inequitypricesasatDecember31,
2014,wouldhaveincreased(decreased)ourshare-basedpaymentexpensesby€158million(€80million)(2013:increasedby€126million(decreasedby€90million);2012:increasedby€139million(decreasedby€117million)).
Credit Risk ManagementTomitigatethecreditriskfromourinvestingactivitiesandderivativefinancialassets,weconductallouractivitiesonlywithapprovedmajorfinancialinstitutionsandissuersthatcarryhighexternalratings,asrequiredbyourinternaltreasuryguideline.Amongitsstipulations,theguidelinerequiresthatweinvestonlyinassetsfromissuerswithaminimumratingofatleast“BBBflat”.Weonlymakeinvestmentsinissuerswithalowerratinginexceptionalcases.Suchinvestmentswerenotmaterialin2014.TheweightedaverageratingofourfinancialassetsisintherangeA+toA.Wepursueapolicyofcautiousinvestmentscharacterizedbypredominantlycurrentinvestments,standardinvestmentinstruments,aswellasawideportfoliodiversificationbydoingbusinesswithavarietyofcounterparties.
228 Consolidated Financial Statements IFRS
Tofurtherreduceourcreditrisk,werequirecollateralforcertaininvestmentsinthefullamountoftheinvestmentvolumewhichwewouldbeallowedtomakeuseofinthecaseofdefaultofthecounterpartytotheinvestment.Assuchcollateral,weonlyacceptbondswithatleastinvestmentgraderatinglevel.
Inaddition,theconcentrationofcreditriskthatexistswhencounterpartiesareinvolvedinsimilaractivitiesbyinstrument,sector,orgeographicareaisfurthermitigatedbydiversificationofcounterpartiesthroughouttheworldandadherencetoaninternallimitsystemforeachcounterparty.Thisinternallimitsystemstipulatesthatthebusinessvolumewithindividualcounterpartiesisrestrictedtoadefinedlimit,whichdependsonthelowestofficiallong-termcreditratingavailablebyatleastoneofthemajorratingagencies,theTier1capitaloftherespectivefinancialinstitution,orparticipationintheGermanDepositors’GuaranteeFundorsimilarprotectionschemes.Wecontinuouslymonitorstrictcompliancewiththesecounterpartylimits.Asthepremiumforcreditdefaultswapsmainlydependsonmarketparticipants’assessmentsofthecreditworthinessofadebtor,wealsocloselyobservethedevelopmentofcreditdefaultswapspreadsinthemarkettoevaluateprobableriskdevelopmentstotimelyreacttochangesiftheseshouldmanifest.
Thedefaultriskofourtradereceivablesismanagedseparately,mainlybasedonassessingthecreditworthinessofcustomersthroughexternalratingsandourhistoricalexperiencewithrespectivecustomers.Outstandingreceivablesarecontinuouslymonitoredlocally.Formoreinformation,seeNote(3).Theimpactofdefaultonourtradereceivablesfromindividualcustomersismitigatedbyourlargecustomerbaseanditsdistributionacrossmanydifferentindustries,companysizes,andcountriesworldwide.Formoreinformationaboutourtradereceivables,seeNote(14).Forinformationaboutthemaximumexposuretocreditrisk,seeNote(25).
Liquidity Risk ManagementOurliquidityismanagedbyourglobaltreasurydepartmentwiththeprimaryaimofmaintainingliquidityatalevelthatisadequatetomeetourfinancialobligations.
Ourprimarysourceofliquidityisfundsgeneratedfromourbusinessoperations,whichhavehistoricallybeentheprimarysourceoftheliquidfundsneededtomaintainourinvestingandfinancingstrategy.Themajorityofoursubsidiariespooltheircashsurplustoourglobaltreasurydepartment,whichthenarrangestofundothersubsidiaries’requirementsorinvestanynetsurplusinthemarket,seekingtooptimizeyields,whileensuringliquidity,byinvestingonlywithcounterpartiesandissuersofhighcreditquality,asexplainedabove.Hence,highlevelsofliquidassetsandmarketablesecuritiesprovideastrategicreserve,helpingkeepSAPflexible,sound,andindependent.
Apartfromeffectiveworkingcapitalandcashmanagement,wehavereducedtheliquidityriskinherentinmanagingourday-to-dayoperationsandmeetingourfinancingresponsibilitiesbyarranginganadequatevolumeofavailablecreditfacilitieswithvariousfinancialinstitutionsonwhichwecandrawifnecessary.
Inordertoretainhighfinancialflexibility,onNovember13,2013,SAPSEenteredintoa€2.0billionsyndicatedcreditfacilityagreementwithaninitialtermoffiveyearsplustwoone-yearextensionoptions.In2014,theoriginaltermofthisfacilitywasextendedforanadditionalperiodofoneyeartoNovember2019.Theuseofthefacilityisnotrestrictedbyanyfinancialcovenants.BorrowingsunderthefacilitybearinterestofEURIBORorLIBORfortherespectivecurrencyplusamarginof22.5basispoints.Wearealsorequiredtopayacommitmentfeeof7.88basispointsperannumontheunusedavailablecredit.Wehaveneverdrawnonthefacility.
Additionally,asatDecember31,2014,and2013,SAPSEhadavailablelinesofcredittotaling€471millionand€487million,respectively.AsatDecember31,2014,and2013,therewerenoborrowingsoutstandingundertheselinesofcredit.Asat
229Notes to the Consolidated Financial Statements
December31,2014,and2013,certainsubsidiarieshadlinesofcreditavailablethatallowedthemtoborrowinlocalcurrenciesatprevailinginterestratesupto€54millionand€36million,respectively.BorrowingsoutstandingunderthesecreditfacilitiesasatDecember31,2014wereimmaterial,andtherewerenoborrowingsfromanyofourforeignsubsidiariesasatDecember31,2013.(27) ADDITIONAL FAIR VALUE DISCLOSURES ON FINANCIAL INSTRUMENTS
Fair Value of Financial InstrumentsWeusevarioustypesoffinancialinstrumentintheordinarycourseofbusiness,whicharegroupedintothefollowingcategories:loansandreceivables(L&R),available-for-sale(AFS),held-for-trading(HFT),andamortizedcost(AC).Forthosefinancialinstrumentsmeasuredatfairvalueorforwhichfairvaluemustbedisclosed,wehavecategorizedthefinancialinstrumentsintoathree-levelfairvaluehierarchydependingontheinputsusedtodeterminefairvalueandtheirsignificanceforthevaluationtechniques.Wherefinancialassetsandliabilitiesareshownasmeasuredatfairvalue,thisisdoneonarecurringbasis.
ThetablebelowshowsthecarryingamountsandfairvaluesoffinancialassetsandliabilitiesbycategoryoffinancialinstrumentaswellasbycategoryinIAS39andtheallocationtothefairvaluehierarchyasmandatedbyIFRS13asatDecember31.
Fair Values of Financial Instruments and Classification Within the Fair Value Hierarchy€millions
2014
Carrying Amount MeasurementCategories FairValue
CategoryAtAmortized
CostAtFairValue Level1 Level2 Level3 Total
AssetsCashandcashequivalents1) L&R 3,328 3,328
Tradeandotherreceivables 4,430
Tradereceivables1) L&R 4,242 4,242
Otherreceivables2) – 188
Otherfinancialassets 1,699
Available-for-salefinancialassets
Debtinvestments AFS 40 40 40 40
Equityinvestments AFS 597 597 108 101 388 597
Investmentsinassociates2) – 49
Loansandotherfinancialreceivables
Financialinstrumentsrelatedtoemployeebenefitplans2) – 136
Otherloansandotherfinancialreceivables L&R 324 324 324 324
Derivativeassets
Designatedashedginginstrument
FXforwardcontracts – 10 10 10 10
Interestrateswaps – 77 77 77 77
Notdesignatedashedginginstrument
FXforwardcontracts HFT 411 411 411 411
Calloptionsforshare-basedpayments HFT 43 43 43 43
Calloptiononequityshares HFT 13 13 13 13
LiabilitiesTradeandotherpayables –1,061
Tradepayables1) AC –756 –756
Otherpayables2) – –305
Financialliabilities –11,542
Non-derivativefinancialliabilities
Loans AC –4,261 –4,261 –4,261 –4,261
Bonds AC –4,628 –4,628 –4,810 –4,810
Privateplacements AC –2,195 –2,195 –2,301 –2,301
Othernon-derivativefinancialliabilities AC –124 –124 –124 –124
Derivatives
Designatedashedginginstrument
FXforwardcontracts – –22 –22 –22 –22
Interestrateswaps – –1 –1 –1 –1
Notdesignatedashedginginstrument
FXforwardcontracts HFT –310 –310 –310 –310
Total financial instruments, net –3,146 –4,072 858 –4,662 –6,054 400 –10,315
1Wedonotdisclosethefairvalueforcashandcashequivalents,tradereceivables,andaccountspayableastheircarryingamountsareareasonableapproximationoftheirfairvalues.
2Sincethelineitemstradereceivables,tradepayables,andotherfinancialassetscontainbothfinancialandnon-financialassetsorliabilities(suchasothertaxesoradvancepayments),thecarryingamountsofnon-financialassetsorliabilitiesareshowntoallowareconciliationtothecorrespondinglineitemsintheConsolidatedStatementsofFinancialPosition.
230 Consolidated Financial Statements IFRS
Fair Values of Financial Instruments and Classification Within the Fair Value Hierarchy€millions
2014
Carrying Amount MeasurementCategories FairValue
CategoryAtAmortized
CostAtFairValue Level1 Level2 Level3 Total
AssetsCashandcashequivalents1) L&R 3,328 3,328
Tradeandotherreceivables 4,430
Tradereceivables1) L&R 4,242 4,242
Otherreceivables2) – 188
Otherfinancialassets 1,699
Available-for-salefinancialassets
Debtinvestments AFS 40 40 40 40
Equityinvestments AFS 597 597 108 101 388 597
Investmentsinassociates2) – 49
Loansandotherfinancialreceivables
Financialinstrumentsrelatedtoemployeebenefitplans2) – 136
Otherloansandotherfinancialreceivables L&R 324 324 324 324
Derivativeassets
Designatedashedginginstrument
FXforwardcontracts – 10 10 10 10
Interestrateswaps – 77 77 77 77
Notdesignatedashedginginstrument
FXforwardcontracts HFT 411 411 411 411
Calloptionsforshare-basedpayments HFT 43 43 43 43
Calloptiononequityshares HFT 13 13 13 13
LiabilitiesTradeandotherpayables –1,061
Tradepayables1) AC –756 –756
Otherpayables2) – –305
Financialliabilities –11,542
Non-derivativefinancialliabilities
Loans AC –4,261 –4,261 –4,261 –4,261
Bonds AC –4,628 –4,628 –4,810 –4,810
Privateplacements AC –2,195 –2,195 –2,301 –2,301
Othernon-derivativefinancialliabilities AC –124 –124 –124 –124
Derivatives
Designatedashedginginstrument
FXforwardcontracts – –22 –22 –22 –22
Interestrateswaps – –1 –1 –1 –1
Notdesignatedashedginginstrument
FXforwardcontracts HFT –310 –310 –310 –310
Total financial instruments, net –3,146 –4,072 858 –4,662 –6,054 400 –10,315
231Notes to the Consolidated Financial Statements
Fair Values of Financial Instruments and Classification Within the Fair Value Hierarchy€millions
2013
Carrying Amount MeasurementCategories FairValue
CategoryAtAmortized
CostAtFairValue Level1 Level2 Level3 Total
AssetsCashandcashequivalents1) L&R 2,748 2,748
Tradeandotherreceivables 3,963
Tradereceivables1) L&R 3,816 3,816
Otherreceivables2) – 147
Otherfinancialassets 858
Available-for-salefinancialassets
Debtinvestments AFS 38 38 38 38
Equityinvestments AFS 322 322 52 31 239 322
Investmentsinassociates2) – 36
Loansandotherfinancialreceivables
Financialinstrumentsrelatedtoemployeebenefitplans2) – 119
Otherloansandotherfinancialreceivables L&R 214 214 214 214
Derivativeassets
Designatedashedginginstrument
FXforwardcontracts – 30 30 30 30
Interestrateswaps – 5 5 5 5
Notdesignatedashedginginstrument
FXforwardcontracts HFT 26 26 26 26
Calloptionsforshare-basedpayments HFT 58 58 58 58
Calloptiononequityshares HFT 10 10 10 10
LiabilitiesTradeandotherpayables –895
Tradepayables1) AC –640 –640
Otherpayables2) – –255
Financialliabilities –4,506
Non-derivativefinancialliabilities
Bonds AC –2,291 –2,291 –2,340 –2,340
Privateplacements AC –1,977 –1,977 –2,031 –2,031
Othernon-derivativefinancialliabilities AC –68 –68 –68 –68
Derivatives
Designatedashedginginstrument
FXforwardcontracts – –3 –3 –3 –3
Interestrateswaps – –23 –23 –23 –23
Notdesignatedashedginginstrument
FXforwardcontracts HFT –144 –144 –144 –144
Total financial instruments, net 2,168 1,802 319 –2,250 –1,905 249 –3,906
1Wedonotdisclosethefairvalueforcashandcashequivalents,tradereceivables,andaccountspayableastheircarryingamountsareareasonableapproximationoftheirfairvalues.
2Sincethelineitemstradereceivables,tradepayables,andotherfinancialassetscontainbothfinancialandnon-financialassetsorliabilities(suchasothertaxesoradvancepayments),thecarryingamountsofnon-financialassetsorliabilitiesareshowntoallowareconciliationtothecorrespondinglineitemsintheConsolidatedStatementsofFinancialPosition.
232 Consolidated Financial Statements IFRS
Fair Values of Financial Instruments and Classification Within the Fair Value Hierarchy€millions
2013
Carrying Amount MeasurementCategories FairValue
CategoryAtAmortized
CostAtFairValue Level1 Level2 Level3 Total
AssetsCashandcashequivalents1) L&R 2,748 2,748
Tradeandotherreceivables 3,963
Tradereceivables1) L&R 3,816 3,816
Otherreceivables2) – 147
Otherfinancialassets 858
Available-for-salefinancialassets
Debtinvestments AFS 38 38 38 38
Equityinvestments AFS 322 322 52 31 239 322
Investmentsinassociates2) – 36
Loansandotherfinancialreceivables
Financialinstrumentsrelatedtoemployeebenefitplans2) – 119
Otherloansandotherfinancialreceivables L&R 214 214 214 214
Derivativeassets
Designatedashedginginstrument
FXforwardcontracts – 30 30 30 30
Interestrateswaps – 5 5 5 5
Notdesignatedashedginginstrument
FXforwardcontracts HFT 26 26 26 26
Calloptionsforshare-basedpayments HFT 58 58 58 58
Calloptiononequityshares HFT 10 10 10 10
LiabilitiesTradeandotherpayables –895
Tradepayables1) AC –640 –640
Otherpayables2) – –255
Financialliabilities –4,506
Non-derivativefinancialliabilities
Bonds AC –2,291 –2,291 –2,340 –2,340
Privateplacements AC –1,977 –1,977 –2,031 –2,031
Othernon-derivativefinancialliabilities AC –68 –68 –68 –68
Derivatives
Designatedashedginginstrument
FXforwardcontracts – –3 –3 –3 –3
Interestrateswaps – –23 –23 –23 –23
Notdesignatedashedginginstrument
FXforwardcontracts HFT –144 –144 –144 –144
Total financial instruments, net 2,168 1,802 319 –2,250 –1,905 249 –3,906
233Notes to the Consolidated Financial Statements
Fair Values of Financial Instruments Classified According IAS 39 €millions
2014
CategoryCarrying Amount
AtAmortizedCost
AtFairValue OutofscopeofIFRS7
Financial assets Atfairvaluethroughprofitorloss HFT 467 467
Available-for-sale AFS 637 637
Loansandreceivables L&R 7,893 7,893
Financial liabilities Atfairvaluethroughprofitorloss HFT –310 –310
Atamortizedcost AC –11,965 –11,965
Outside scope of IAS 39Financialinstrumentsrelatedtoemployeebenefitplans 136 136
Investmentsinassociates 49 49
Otherreceivables 188 188
Otherpayables –305 –305
Derivativesdesignatedashedginginstrument 64 64
Total financial instruments, net –3,146 –4,072 858 68
234 Consolidated Financial Statements IFRS
Fair Values of Financial Instruments Classified According IAS 39 €millions
2013
CategoryCarrying Amount
AtAmortizedCost
AtFairValue OutofscopeofIFRS7
Financial assets Atfairvaluethroughprofitorloss HFT 94 94
Available-for-sale AFS 360 360
Loansandreceivables L&R 6,778 6,778
Financial liabilities Atfairvaluethroughprofitorloss HFT –144 –144
Atamortizedcost AC –4,976 –4,976
Outside scope of IAS 39Financialinstrumentsrelatedtoemployeebenefitplans 119 119
Investmentsinassociates 36 36
Otherreceivables 147 147
Otherpayables –255 –255
Derivativesdesignatedashedginginstrument 9 9
Total financial instruments, net 2,168 1,802 319 47
235Notes to the Consolidated Financial Statements
Determination of Fair ValuesItisourpolicytorecognizetransfersbetweenthedifferentlevelsofthefairvaluehierarchyatthebeginningoftheperiodoftheeventorchangeincircumstancesthatcausedthetransfer.Adescriptionofthevaluationtechniquesandtheinputsusedinthefairvaluemeasurementisgivenbelow:
Financial Instruments Measured at Fair Value on a Recurring Basis (continued)
Type FairValueHierarchy
DeterminationofFairValue/ValuationTechnique
SignificantUnobservableInputs
InterrelationshipBetweenSignificantUnobservableInputsandFairValueMeasurement
Other financial assets
Debtinvestments Level1 Quotedpricesinanactivemarket NA NA
Listedequityinvestments Level1 Quotedpricesinanactivemarket NA NA
Level2 Quotedpricesinanactivemarketdeductingadiscountforthedisposalrestrictionderivedfromthepremiumforarespectiveputoption.
NA NA
Unlistedequityinvestments Level3 Marketapproach.Comparablecompanyvaluationusingrevenuemultiplesderivedfromcompaniescomparabletotheinvestee.
–Peercompaniesused(revenuemultiplesrangefrom0.4-8.5)
–Revenuesofinvestees–Discountsforlackofmarketability(20%)
Theestimatedfairvaluewouldincrease(decrease)if:–Therevenuemultipleswerehigher(lower)
–Theinvestees’revenueswerehigher(lower)
–Theliquiditydiscountswerelower(higher).
Marketapproach.Venturecapitalmethodevaluatingavarietyofquantitativeandqualitativefactorslikeactualandforecastedresults,cashposition,recentorplannedtransactions,andmarketcomparablecompanies.
NA NA
Lastfinancingroundvaluations NA NA
Liquidationpreferences NA NA
Netassetvalue/Fairmarketvalueasreportedbytherespectivefunds
NA NA
236 Consolidated Financial Statements IFRS
Financial Instruments Measured at Fair Value on a Recurring Basis (continued)
Type FairValueHierarchy
DeterminationofFairValue/ValuationTechnique
SignificantUnobservableInputs
InterrelationshipBetweenSignificantUnobservableInputsandFairValueMeasurement
Other financial assets(continued)
Calloptionsforshare-basedpaymentsplans
Level2 Monte-CarloModel.Calculatedconsideringrisk-freeinterestrates,theremainingtermofthederivatives,thedividendyields,thestockprice,andthevolatilityofourshare.
NA NA
Calloptiononequityshares Level3 Marketapproach.CompanyvaluationusingEBITDAmultiplesbasedonactualresultsderivedfromtheinvestee.
–EBITDAmultiplesused–EBITDAoftheinvestee
Theestimatedfairvaluewouldincrease(decrease)if:–TheEBITDAmultipleswerehigher(lower)
–Theinvestees’EBITDAwerehigher(lower)
Other financial assets/ Financial liabilities
Foreignexchange(FX)forwardcontracts
Level2 DiscountedcashflowusingPar-Method.Expectedfuturecashflowsbasedonforwardexchangeratesarediscountedovertherespectiveremainingtermofthecontractsusingtherespectivedepositinterestratesandspotrates.
NA NA
Interestrateswaps Level2 Discountedcashflow.Expectedfuturecashflowsareestimatedbasedonforwardinterestratesfromobservableyieldcurvesandcontractinterestrates,discountedataratethatreflectsthecreditriskofthecounterparty.
NA NA
237Notes to the Consolidated Financial Statements
Forothernon-derivativefinancialassets/liabilitiesandvariableratefinancialdebt,itisassumedthattheircarryingvaluereasonablyapproximatestheirfairvalues.
Transfers Between Levels 1 and 2Transfersofavailable-for-saleequityinvestmentsfromLevel2toLevel1whichoccurredbecausedisposalrestrictionslapsedanddeductingadiscountforsuchrestrictionwasnolongernecessarywerenotmaterialinallyearspresented,whiletransfersfromLevel1toLevel2didnotoccuratall.
Financial Instruments Not Measured at Fair Value
Type FairValueHierarchy
DeterminationofFairValue/ValuationTechnique
Financial liabilitiesFixedratebonds(financialliabilities)
Level1 Quotedpricesinanactivemarket
Fixedrateprivateplacements/loans(financialliabilities)
Level2 Discountedcashflows.Futurecashoutflowsforfixedinterestandprincipalarediscountedoverthetermoftherespectivecontractsusingthemarketinterestratesasofthereportingdate.
238 Consolidated Financial Statements IFRS
Level 3 DisclosuresThefollowingtableshowsthereconciliationfromtheopeningtotheclosingbalancesforourunlistedequityinvestmentsandcalloptionsonequitysharesclassifiedasLevel3fairvalues:
Reconciliation of Level 3 Fair Values€millions
2014 2013
January1, 239 0
Transfers
intoLevel3 0 162
outofLevel3 –29 –30
Purchases 141 79
Sales –36 –16
Gains/losses
includedinfinancialincome,netinprofitandloss
27 7
includedinavailable-for-salefinancialassetsinothercomprehensiveincome
21
46
includedinexchangedifferencesinothercomprehensiveincome
37 –9
December 31, 400 239
Changingtheunobservableinputstoreflectreasonablypossiblealternativeassumptionswouldnothaveamaterialimpactonthefairvaluesofourunlistedequityinvestmentsheldasavailable-for-saleasofthereportingdate.
(28) SHARE-BASED PAYMENTS SAPhasgrantedawardsundervariouscash-settledandequity-settledshare-basedpaymentstoitsdirectorsandemployees.Mostoftheseawardsaredescribedindetailbelow.SAPhasothershare-basedpayments,whichare,individuallyandinaggregate,immaterialtoourConsolidatedFinancialStatements.
a) Cash-Settled Share-Based PaymentsSAP’scash-settledshare-basedpaymentsincludethefollowingprograms:EmployeeParticipationPlan(EPP)andLong-TermIncentivePlan(LTIPlanfortheGlobalManagingBoard)2015,StockOptionPlan2010(SOP2010(2010–2014tranches)),RestrictedStockUnitPlan(RSU(2013–2014tranches)),acquiredSFSFRights(formerSuccessFactorsawardsassumedinconnectionwiththeSuccessFactorsacquisitionin2012),acquiredAribaRights(formerAribaawardsassumedinconnectionwiththeAribaacquisitionin2012).
239Notes to the Consolidated Financial Statements
AsatDecember31,2014,thevaluationofouroutstandingcash-settledplanswasbasedonthefollowingparametersandassumptions:
Fair Value and Parameters Used at Year-End 2014 for Cash-Settled Plans
LTIPlan2015(2012–2014
tranches)
EPP2015(2014tranche)
SOP2010(2010–2014
tranches)
RSU(2013–2014
tranches)
SFSFRights AribaRights
Weighted average fair value as at December 31, 2014
€56.40 €58.26 €10.17 €54.09 €32.95 €37.06
Information how fair value was measured at measurement date
Optionpricingmodelused Other1) Other1) Monte-Carlo Other1) NA NA
Shareprice €58.26 €57.37 NA NA
Risk-freeinterestrate(dependingonmaturity) –0.1% NA –0.1%to0.02%
–0.1%to–0.01%
NA NA
ExpectedvolatilitySAPshares NA NA 19.9%to23.4%
NA NA NA
ExpecteddividendyieldSAPshares 1.74% NA 1.74% 1.76% NA NA
Weighted average remaining life of options outstanding as at December 31, 2014 (in years)
1.8 0.1 3.5 1.1 0.5 0.8
1) Fortheseawardsthefairvalueiscalculatedbysubtractingthenetpresentvalueofexpectedfuturedividendpayments,ifany,untilmaturityoftherespectiveawardfromtheprevailingsharepriceasofthevaluationdate.
240 Consolidated Financial Statements IFRS
AsatDecember31,2013,thevaluationofouroutstandingcash-settledplanswasbasedonthefollowingparametersandassumptions:
Fair Value and Parameters Used at Year-End 2013 for Cash-Settled Plans
LTIPlan2015(2012/2013tranches)
EPP2015(2013tranche)
SOP2010(2010–2013
tranches)
RSU(2013tranche)
SFSFRights AribaRights
Weighted average fair value as at December 31, 2013
€59.80 €62.31 €15.71 €61.55 €29.00 €32.63
Information how fair value was measured at measurement date
Optionpricingmodelused Other1) Other1) Monte-Carlo Other1) NA NA
Shareprice €62.31 €63.19 NA NA
Risk-freeinterestrate(dependingonmaturity) 0.26%to0.46%
NA 0.08%to0.92%
0.01%to0.44%
NA NA
ExpectedvolatilitySAPshares NA NA 21.3%to27.6%
NA NA NA
ExpecteddividendyieldSAPshares 1.67% NA 1.67% 1.65% NA NA
Weighted average remaining life of options outstanding as at December 31, 2013 (in years)
2.4 0.1 3.3 1.2 0.8 0.7
1)Fortheseawardsthefairvalueiscalculatedbysubtractingthenetpresentvalueofexpectedfuturedividendpayments,ifany,untilmaturityoftherespectiveawardfromtheprevailingsharepriceasofthevaluationdate.
ExpectedvolatilityoftheSAPsharepriceisbasedonablendofimpliedvolatilityfromtradedoptionswithcorrespondinglifetimesandexercisepricesaswellashistoricalvolatilitywiththesameexpectedlifeastheoptionsgranted.
Expectedremaininglifeoftheoptionsreflectsboththecontractualtermandtheexpected,orhistorical,exercisebehavior.Therisk-freeinterestrateisderivedfromGermangovernmentbondswithasimilarduration.Dividendyieldisbasedonexpectationsoffuturedividends.
241Notes to the Consolidated Financial Statements
Thenumberofawardsunderourcash-settledplansdevelopedasfollowsintheyearsendedDecember31,2014,and2013:
Changes in Numbers of Outstanding Awards Under Our Cash-Settled Plansthousands
LTIPlan2015(2012–2014
tranches)
EPP2015(2012–2014
tranches)
RSU(2013–2014
tranches)
SOP2010(2010–2014
tranches)
SFSFRights AribaRights
Outstandingasat12/31/2012 466 3,502 NA 17,427 2,403 2,360Grantedin2013 311 2,087 1,559 7,421 NA NA
AdjustmentbaseduponKPItargetachievementin2013
–18 –139 0 NA NA NA
Exercisedin2013 –196 –3,502 0 –2,215 –797 –1,362Forfeitedin2013 –48 –103 –96 –967 –531 –90
Outstanding as at 12/31/2013 515 1,845 1,463 21,666 1,075 908Grantedin2014 242 2,177 1,256 8,965 NA NA
AdjustmentbaseduponKPItargetachievementin2014
–41 –458 –88 NA NA NA
Exercisedin2014 –70 –1,845 –738 –2,730 –520 –737Forfeitedin2014 –55 –104 –301 –1,619 –224 –45
Outstanding as at 12/31/2014 591 1,615 1,592 26,282 331 126
Outstanding awards exercisable as at12/31/2013 0 0 0 1,609 0 012/31/2014 0 0 0 3,313 0 0
Total carrying amount (in € millions) of liabilities as at
12/31/2013 41 115 32 183 20 2412/31/2014 45 94 55 167 8 5
Total intrinsic value of vested awards (in € millions) as at
12/31/2013 43 115 0 37 0 012/31/2014 38 94 0 49 0 0
Weighted average share price (in €) for share options exercised in
2013 54.96 59.90 NA 55.47 30.12 33.892014 54.96 57.48 56.62 56.65 30.10 33.86
Total expense (in € millions) recognized in2012 53 216 NA 74 38 212013 –11 118 34 83 10 212014 13 82 57 29 1 4
242 Consolidated Financial Statements IFRS
a.1) Employee Participation Plan (EPP) and Long-Term Incentive Plan (LTI Plan) 2015 SAPimplementedtwonewshare-basedpaymentsin2012:anEmployeeParticipationPlan(EPP)2015foremployeesandaLong-TermIncentive(LTI)Plan2015formembersoftheGlobalManagingBoard.
TheplansarefocusedonSAP’ssharepriceandtheachievementoftwofinancialkeyperformanceindicators(KPIs):non-IFRStotalrevenueandnon-IFRSoperatingprofit,whicharederivedfromtheCompany’s2015financialKPIs.Undertheseplans,virtualshares,calledrestrictedshareunits(RSUs),aregrantedtoparticipants.ParticipantsarepaidoutincashbasedonthenumberofRSUsthatvest.
TheRSUsweregrantedandallocatedatthebeginningofeachyearthrough2015,withEPP2015RSUssubjecttoannualExecutiveBoardapproval.ParticipantsintheLTIPlan2015havealreadybeengrantedabudgetfortheyears2012to2015(2014to2015fornewplanparticipantsin2014).AllparticipantsintheLTIPlan2015aremembersoftheGlobalManagingBoard.
TheRSUallocationprocesswilltakeplaceatthebeginningofeachyearbasedonSAP’ssharepriceafterthepublicationofitspreliminaryannualresultsforthelastfinancialyearpriortotheperformanceperiod.
Attheendofthegivenyear,thenumberofRSUsthatfinallyvestwithplanparticipantsdependsonSAP’sactualperformanceforthegivenyear,andmightbehigherorlowerthanthenumberofRSUsoriginallygranted.IfperformanceagainstbothKPItargetsreachesatleastthedefined60%(80%for2012and2013tranches)threshold,theRSUsvest.Dependingonperformance,thevestingcanreachamaximumof150%ofthebudgetedamount.IfperformanceagainsteitherorbothofthoseKPItargetsdoesnotreachthedefinedthresholdof60%(80%for2012and2013tranches),noRSUsvestandRSUsgrantedforthatyearwillbeforfeited.Theadjustmenttothethresholdofthoseperformanceindicatorswasmadetoreflectourupdatedexpectationsduetotheacceleratedshifttothecloud.Fortheyear2014,theRSUsgrantedatthebeginningoftheyearvestedwith77.89%(2013:92.97%)achievementoftheKPItargets.
UndertheEPP2015,theRSUsarepaidoutinthefirstquarteroftheyearaftertheone-yearperformanceperiod,whereastheRSUsformembersoftheGlobalManagingBoardundertheLTIPlan2015aresubjecttoathree-year-holdingperiodbeforepayout,whichoccursstartingin2016.
Theplansincludea“look-back”provision,duetothefactthattheseplansarebasedonreachingcertainKPItargetsin2015.Iftheoverallachievementin2015ishigherorlowerthanrepresentedbythenumberofRSUsvestedfrom2012to2014,thenumberofRSUsgrantedin2015canincreaseordecreaseaccordingly.However,RSUsthatwerealreadyfullyvestedinprioryearscannotbeforfeited.FortheEPP,theapplicationofthe“look-back”-provisionissubjecttoapprovalbytheExecutiveBoardin2015.
ThefinalfinancialeffectofeachtrancheoftheEPP2015andtheLTIPlan2015willdependonthenumberofvestedRSUsandtheSAPshareprice,whichissetdirectlyaftertheannouncementofthepreliminaryfourthquarterandfull-yearresultsforthelastfinancialyearundertheEPP2015(oftherespectivethree-yearholdingperiodundertheLTIPlan2015),andthusmaybesignificantlyaboveorbelowthebudgetedamounts.
a.2) SAP Stock Option Plan 2010 (SOP 2010 (2010–2014 Tranches))UndertheSAPStockOptionPlan2010,wegrantedmembersoftheSeniorLeadershipTeam/GlobalExecutives,SAP’sTopRewards(employeeswithanexceptionalrating/highpotentials)between2010and2014andonlyin2010and2011membersoftheExecutiveBoardcash-basedvirtualstockoptions,thevalueofwhichdependsonthemulti-yearperformanceoftheSAPshare.
Thegrant-basevalueisbasedontheaveragefairmarketvalueofoneordinaryshareoverthefivebusinessdayspriortotheExecutiveBoardresolutiondate.
243Notes to the Consolidated Financial Statements
ThevirtualstockoptionsgrantedundertheSOP2010givetheemployeestherighttoreceiveacertainamountofmoneybyexercisingtheoptionsunderthetermsandconditionsofthisplan.Afterathree-yearvestingperiod(fouryearsformembersoftheExecutiveBoard),theplanprovidesfor11predeterminedexercisedateseverycalendaryear(onedatepermonthexceptinApril)untiltherightslapsesixyearsafterthegrantdate(sevenyearsformembersoftheExecutiveBoard).EmployeescanexercisetheirvirtualstockoptionsonlyiftheyareemployedbySAP;iftheyleavetheCompany,theyforfeitthem.ExecutiveBoardmembers’optionsarenon-forfeitableoncegranted–iftheserviceagreementendsinthegrantyear,thenumberofoptionsisreducedproratatemporis.Anyoptionsnotexercisedattheendoftheirtermexpire.
Theexercisepriceis110%ofthegrantbasevalue(115%formembersoftheExecutiveBoard)whichis€39.03(€40.80)forthe2010tranche,€46.23(€48.33)forthe2011tranche,€49.28forthe2012tranche,€59.85forthe2013tranche,and€60.96forthe2014tranche.
Monetarybenefitswillbecappedat100%oftheexerciseprice(150%formembersoftheExecutiveBoard).
a.3) Restricted Stock Unit Plan (RSU Plan (2013–2014 tranches))Wemaintainshare-basedpaymentplansthatallowfortheissuanceofrestrictedstockunits(RSU)toretainandmotivateexecutivesandcertainemployees.
UndertheRSUPlan,wegrantedacertainnumberofRSUsthroughout2013and2014representingacontingentrighttoreceiveacashpaymentdeterminedbythemarketvalueofthesamenumberofSAPSEshares(orSAPSEAmericanDepositaryReceiptsontheNewYorkStockExchange)andthenumberofRSUsthatultimatelyvest.GrantedRSUswillvestindifferenttranches,either:–Overaone-to-threeyearserviceperiodonly,or–Overaone-to-threeyearserviceperiodanduponmeetingcertainkeyperformanceindicators(KPIs).
ThenumberofRSUsthatcouldvestunderthe2014tranchewithperformance-basedgrantswascontingentuponaweightedachievementofthefollowingperformancemilestonesforthefiscalyearendedDecember31,2014:–Specificindicatorofgrowthincloudsubscriptionsandsupportrevenue(50%)and
–Cloudsubscriptionandsupportrevenue(50%)
Dependingonperformance,thenumberofRSUsvestingcouldhaverangedbetween80%and150%ofthenumberinitiallygranted.PerformanceagainsttheKPItargetswas90.27%(2013:100%)infiscalyear2014.
TheRSUsarepaidoutincashuponvesting.
a.4) SuccessFactors Cash-Settled Awards Replacing Pre-Acquisition SuccessFactors Awards (SFSF Rights)InconjunctionwiththeacquisitionofSuccessFactorsin2012,underthetermsoftheacquisitionagreement,SAPexchangedunvestedRestrictedStockAwards(RSAs),RestrictedStockUnits(RSUs),andPerformanceStockUnits(PSUs)heldbyemployeesofSuccessFactorsforcash-settledshare-basedpaymentawardsofSAP(SFSFRights).
RSAs,RSUs,andPSUsunvestedattheclosingoftheacquisitionwereconvertedintotherighttoreceive,attheoriginallyagreedvestingdates,anamountincashequaltothenumberofrightsheldatthevestingdatemultipliedbyUS$40.00pershare.
a.5) Ariba Cash-Settled Awards Replacing Pre-Acquisition Ariba Awards (Ariba Rights)ThetermsoftheacquisitionagreementunderwhichSAPacquiredAribain2012requiredSAPtoexchangeunvestedRestrictedStockAwards(RSAs)andRestrictedStockUnits(RSUs)heldbyemployeesofAribaforcash-settledshare-basedpaymentawardsofSAP(AribaRights).
244 Consolidated Financial Statements IFRS
RSAsandRSUsunvestedattheclosingoftheacquisitionwereconvertedintotherighttoreceiveanamountincashequaltothenumberofRSAsandRSUsheldatthevestingdatemultipliedbyUS$45.00pershareinaccordancewiththerespectivevestingterms.
b) Equity-Settled Share-Based PaymentsEquity-settledplansincludeprimarilytheShareMatchingPlan(SMP).
UndertheShareMatchingPlan(SMP)implementedin2010,SAPoffersitsemployeestheopportunitytopurchaseSAPSEsharesatadiscountof40%.ThenumberofSAPsharesaneligibleemployeemaypurchasethroughtheSMPislimitedtoapercentageoftheemployee’sannualbasesalary.Afterathree-yearholdingperiod,suchplanparticipantswillreceive
one(in2012:five)freematchingshareofSAPforeverythreeSAPsharesacquired.
ThetermsforthemembersoftheSeniorLeadershipTeam/GlobalExecutivesareslightlydifferentthanthosefortheotheremployees.Theydonotreceiveadiscountwhenpurchasingtheshares.However,afterathree-yearholdingperiod,theyreceivetwo(in2012:five)freematchingSAPsharesforeverythreeSAPsharesacquired.ThisplanisnotopentomembersoftheSAPExecutiveBoard.
Thefollowingtableshowstheparametersandassumptionsusedatgrantdatetodeterminethefairvalueoffreematchingshares,aswellasthequantityofsharespurchasedandfreematchingsharesgrantedthroughthisprogramin2014,2013,and2012:
Fair Value and Parameters at Grant Date for SMP
2014 2013 2012
Grant date 6/4/2014 9/4/2013 6/6/2012Fair value of granted awards €52.49 €51.09 €42.54
Information how fair value was measured at grant dateOptionpricingmodelused Other1)
Shareprice €55.61 €54.20 €45.43
Risk-freeinterestrate 0.13% 0.43% 0.12%
Expecteddividendyield 1.87% 1.92% 2.13%
Weighted average remaining contractual life of awards outstanding at year-end (in years) 0.9 1.6 2.2
Number of investment shares purchased (in thousands) 1,550 1,559 1,926
1) 1Fortheseawardsthefairvalueiscalculatedbysubtractingthenetpresentvalueofexpectedfuturedividendpayments,ifany,untilmaturityoftherespectiveawardfromtheprevailingsharepriceasofthevaluationdate.
245Notes to the Consolidated Financial Statements
Thefollowingtableshowsthebreakdownoftheexpenserecognizedforthisprogramin2014,2013,and2012:
Recognized Expense at Year-End for SMP €millions,unlessotherwisestated
2014 2013 2012
Expenserecognizedrelatingtodiscount
35 32 34
Expenserecognizedrelatingtovestingoffreematchingshares
54 51 34
Total expense relating to SMP 89 83 68
ThenumberofawardsunderourSMPdevelopedasfollowsintheyearsendedDecember31,2014,and2013:
Changes in Numbers of Outstanding Awards Under SMPthousands
SMP
Outstandingasat12/31/2012 4,071
Grantedin2013 573
Exercisedin2013 –462
Forfeitedin2013 –196
Outstanding as at 12/31/2013 3,986Grantedin2014 568
Exercisedin2014 –432
Forfeitedin2014 –187
Outstanding as at 12/31/2014 3,935
246 Consolidated Financial Statements IFRS
(29) SEGMENT AND GEOGRAPHIC INFORMATION
General InformationOurinternalreportingsystemproducesreportsinwhichinformationregardingourbusinessactivitiesispresentedinavarietyofways,forexample,bylineofbusiness,geography,andareasofresponsibilityoftheindividualBoardmembers.Basedonthesereports,theExecutiveBoard,whichisresponsibleforassessingtheperformanceofourCompanyandformakingresourceallocationdecisionsasourChiefOperatingDecisionMaker(CODM),evaluatesbusinessactivitiesinanumberofdifferentways.
Inthefirstquarter2014,wetooksignificantstepstodriveforwardourstrategyandourambitiontobecomeTHECloudCompanypoweredbySAPHANA.Toexecutethisstrategy,wemergedareasoftheCompanythatperformedsimilartasks(forexample,theon-premisesalesforceswiththecloudsalesforces,andtheon-premisesupportunitswiththecloudsupportunits)toachieveaseamlessorganizationofSAP.Werunouroperationsasasinglebusinessoperationduetothefunctionalorganization.Sincethisintegrationourcloud-relatedactivitiesarenolongerdealtwithbyseparatecomponentsinourCompany.TherearenopartsofourCompanythatqualifyasoperatingsegmentsunderIFRS8andourExecutiveBoardassessesthefinancialperformanceofourCompanyonanintegratedbasisonly.
Consequently,witheffectfromthefirstquarterof2014SAPhasasingleoperatingsegment.
Measurement and PresentationWeareintheprocessofredefiningourorganizationalstructureinthelightoftheConcuracquisition,andwehavenotyetfinishedthisworkduetotheshorttimesincetheacquisition.Wehavenotyetfinishedadaptingourmanagementreporting.Concur’sresultsarenotincludedinpresentsegmentinformationbutarepresentedinareconciliationofsegmentrevenueandresultstotherelatednumberintheconsolidatedincomestatements.
Mostofourdepreciationandamortizationexpenseaffectingoperatingsegmentprofitisallocatedtooursinglesegmentaspartofbroaderinfrastructureallocationsandisthusnottrackedseparatelyontheoperatingsegmentlevel.Depreciationandamortizationexpensethatisdirectlyallocatedtooursingleoperatingsegmentisimmaterial.
Theaccountingpoliciesappliedinthemeasurementsoftheoperatingsegment’srevenuesandresultsdifferfromIFRSaccountingprinciplesdescribedinNote(3)asfollows:–Themeasurementsoftheoperatingsegmentrevenuesandresultsgenerallyattributerevenuetothesegmentbasedonthenatureofthebusinessregardlessofrevenueclassificationinourincomestatement.
–Themeasurementsoftheoperatingsegmentrevenuesandresultsincludestherecurringrevenuesthatwouldhavebeenreflectedbyacquiredentitieshadtheyremainedstand-aloneentitiesbutwhicharenotreflectedasrevenueunderIFRSduetofairvalueaccountingforcustomercontractsineffectatthetimeofanacquisition.
–Themeasurementsoftheoperatingsegmentresultsexcludethefollowingexpenses:Acquisition-relatedchargesAmortizationexpense/impairmentchargesofintangiblesacquiredinbusinesscombinationsandcertainstand-aloneacquisitionsofintellectualproperty(includingpurchasedin-processresearchanddevelopment)Settlementsofpre-existingrelationshipsinconnectionwithabusinesscombinationAcquisition-relatedthird-partycosts
ExpensesfromtheTomorrowNowlitigationandtheVersatalitigationShare-basedpaymentexpensesRestructuringexpenses
–Themeasurementsoftheoperatingsegmentresultsexcluderesearchanddevelopmentexpenseandgeneralandadministrationexpenseatsegmentlevel.TheseexpensesaremanagedandreviewedattheGrouplevelonly.
247Notes to the Consolidated Financial Statements
Reconciliation of Revenues and Segment Results €millions
2014 2013 2012
Totalrevenueofoperatingsegment 17,525 16,897 16,304
Adjustmentrecurringrevenue –19 –82 –81
Revenuefromunallocatedacquisitions 55 0 0
Total revenue 17,560 16,815 16,223
Resultsofoperatingsegment 8,623 8,428 8,082
Adjustmentrecurringrevenues –19 –82 –81
Researchanddevelopmentexpense –2,204 –2,162 –2,132
Generalandadministrationexpense –806 –796 –784
Otheroperatingincome/expense,net 4 12 23
Restructuring –126 –70 –8
Share-basedpayments –290 –327 –522
TomorrowNowandVersatalitigation –309 31 0
Acquisition-relatedcharges –562 –555 –537
Resultfromunallocatedacquisitions(whicharenotincludedinotherreconciliationlineitems) 21 0 0
Operating profit 4,331 4,479 4,041Othernon-operatingincome/expense,net 49 –17 –173
Financialincome,net –25 –66 –72
Profit before tax 4,355 4,396 3,796
Theresearchanddevelopmentexpenseandgeneralandadministrationexpensepresentedinthereconciliationdifferfromthecorrespondingexpensesintheconsolidatedincomestatementsbecauseexpensesrelatingtoshare-basedpaymentsandacquisition-relatedexpensesarepresentedasseparatereconcilingitems.
Geographic Information WehavealignedourrevenuebyregiondisclosureswiththechangesmadetothestructureofourincomestatementasoutlinedinNote(3b).Withthefullintegrationofourcloudactivities,wefurthermorerefinedthemethodofallocatingcloudsubscriptionrevenuestothedifferentgeographies.Comparativepriorperioddatahasbeenadjustedaccordingly.
248 Consolidated Financial Statements IFRS
Theamountsforrevenuebyregioninthefollowingtablesarebasedonthelocationofcustomers.
Revenue by Region
Cloud Subscriptions and Support Revenue by Region €millions
2014 2013 2012
EMEA 277 176 82
Americas 709 457 161
APJ 101 64 27
SAP Group 1,087 696 270
Software and Software-Related Service Revenue by Region €millions
2014 2013 2012
EMEA 7,028 6,616 6,126
Americas 5,489 5,097 4,789
APJ 2,337 2,237 2,250
SAP Group 14,855 13,950 13,165
Total Revenue by Region €millions
2014 2013 2012
Germany 2,570 2,513 2,382
RestofEMEA 5,813 5,462 5,130
EMEA 8,383 7,975 7,512UnitedStates 4,898 4,487 4,413
RestofAmericas 1,591 1,746 1,647
Americas 6,489 6,233 6,060Japan 600 631 791
RestofAPJ 2,088 1,975 1,860
APJ 2,688 2,606 2,650SAP Group 17,560 16,815 16,223
Non-Current Assets by Region €millions
2014 2013
Germany 2,399 2,337
TheNetherlands 2,814 1,695
France 2,116 2,110
RestofEMEA 2,477 2,468
EMEA 9,806 8,609UnitedStates 17,847 9,823
RestofAmericas 152 123
Americas 18,000 9,946APJ 290 223SAP Group 28,096 18,778
Thetableaboveshowsnon-currentassetsexcludingfinancialinstruments,deferredtaxassets,post-employmentbenefits,andrightsarisingunderinsurancecontracts.
Forinformationaboutthebreakdownofourworkforcebyregion,seeNote(8).
249Notes to the Consolidated Financial Statements
(30) BOARD OF DIRECTORS
Executive BoardMembershipsonsupervisoryboardsandothercomparablegoverningbodiesofenterprises,otherthansubsidiariesofSAPonDecember31,2014
Bill McDermott ChiefExecutiveOfficer,LaborRelationsDirectorStrategy,Governance,BusinessDevelopment,CorporateDevelopment,CommunicationsandMarketing,HumanResources,BusinessNetwork
BoardofDirectors,ANSYS,Inc.,Canonsburg,Pennsylvania,UnitedStatesBoardofDirectors,UnderArmour,Inc.,Baltimore,Maryland,UnitedStates
Robert Enslin(fromMay4,2014)GlobalCustomerOperationsGlobalGo-to-MarketEfforts,CloudandLineofBusinessSales,RegionalSalesandOperations,SpecializedIndustrySales,EcosystemandChannels,End-to-EndCustomerExperience
Bernd Leukert (fromMay4,2014)Products&InnovationGlobalDevelopmentOrganization,Analytics,Applications,Cloud,Database&Technology,Mobile,SAPLabsNetwork(jointleadershipwithGerhardOswald)
Luka Mucic (fromJuly1,2014)ChiefFinancialOfficer,ChiefOperatingOfficerFinanceandAdministrationincludingInvestorRelationsandDataProtection&Privacy,ProcessOffice
Gerhard OswaldGlobalService&SupportSAPActiveGlobalSupport,SAPHANAEnterpriseCloud,QualityGovernance&Production,Solution&KnowledgePackaging,SAPLabsNetwork(jointleadershipwithBerndLeukert)
Executive Board Members Who Left During 2014Dr. Werner Brandt(untilJune30,2014)Dr. Vishal Sikka(untilMay4,2014)Jim Hagemann Snabe(untilMay21,2014)
Supervisory BoardMembershipsonsupervisoryboardsandothercomparablegoverningbodiesofenterprises,otherthansubsidiariesofSAPonDecember31,2014
Prof. Dr. h. c. mult. Hasso Plattner 2),4),6),7),8)Chairman
SupervisoryBoard,OligoLichttechnikGmbH,Hennef,Germany(untilAugust28,2014)
Christiane Kuntz-Mayr 1),2),8)DeputyChairpersonDevelopmentManager
Pekka Ala-Pietilä 4),6),7)ChairmanoftheBoardofDirectors,SolidiumOy,Helsinki,Finland
BoardofDirectors,PöyryPlc,Vantaa,FinlandChairmanoftheBoardofDirectors,CVONGroupLimited,London,UKBoardofDirectors,CVONLimited,London,UKChairmanoftheBoardofDirectors,CVONInnovationServicesOy,Turku,FinlandBoardofDirectors,CVONFutureLimited,London,UKChairmanoftheBoardofDirectors,BlykInternationalLtd.,London,UK
250 Consolidated Financial Statements IFRS
ChairmanoftheBoardofDirectors,HuhtamäkiOyj,Espoo,FinlandBoardofDirectors,SanomaCorporation,Helsinki,Finland(fromApril9,2014)
Panagiotis Bissiritsas 1),2),5)SupportExpert
Catherine Bordelon (fromJuly7,2014) 1),8)Bid&ProposalManager
Prof. Anja Feldmann 4),8)
ProfessorattheElectricalEngineeringandComputerScienceFacultyattheTechnischeUniversitätBerlin
Prof. Dr. Wilhelm Haarmann 2),5),7),8)Attorney-at-law,certifiedpublicauditor,certifiedtaxadvisorLinklatersLLP,Rechtsanwälte,Notare,Steuerberater,FrankfurtamMain,Germany
ChairmanoftheSupervisoryBoard,CinemaxXAG,Hamburg,Germany(untilApril25,2014)SupervisoryBoard,CelesioAG,Stuttgart,Germany(fromMarch14,2014)
Margret Klein-Magar 1),2),4),7)VicePresident,HeadofPeoplePrinciples
Lars Lamadé 1),2),7),8)HeadofCustomer&EventsGSSCOOManagingDirector,RheinNeckar-LoewenGmbH,Kronau,Germany
DeputyChairmanoftheSupervisoryBoard,Rhein-Neckar-LoewenGmbH,Kronau,Germany(untilAugust31,2014)
Steffen Leskovar(fromJuly7,2014)1),3),4)ResourceManager
Bernard Liautaud 2),4),6)GeneralPartnerBaldertonCapital,London,UK
BoardofDirectors,nlyteSoftwareLtd.,London,UKBoardofDirectors,TalendSA,Suresnes,FranceBoardofDirectors,WongaGroupLtd.,London,UKBoardofDirectors,SCYTLSecureElectronicVotingSA,Barcelona,SpainBoardofDirectors,AbiquoGroupInc.,RedwoodCity,California,UnitedStates(untilFebruary27,2014)BoardofDirectors,VestiaireCollectiveSA,Levallois-Perret,FranceBoardofDirectors,Dashlane,Inc.,NewYork,NewYork,UnitedStatesBoardofDirectors,RecordedFuture,Inc.,Cambridge,Massachusetts,UnitedStatesBoardofDirectors,eWiseGroup,Inc.,RedwoodCity,California,UnitedStatesBoardofDirectors,QubitDigitalLtd.,London,UKBoardofDirectors,StanfordUniversity,Stanford,California,UnitedStatesBoardofDirectors,CitymapperLtd.,London,UKBoardofDirectors,SunriseAtelier,Inc.,NewYork,NewYork,UnitedStates(fromAugust2,2014)BoardofDirectors,OpbeatInc.,SanFrancisco,California,UnitedStates(fromSeptember11,2014)
Dr. h. c. Hartmut Mehdorn 5),8)
CEOofFlughafenBerlin-BrandenburgGmbH,Berlin,Germany
AdvisoryBoard,Fiege-Gruppe,Greven,GermanyBoardofDirectors,RZD–RussianRailways,Moscow,Russia
Dr. Kurt Reiner 1),4),5)DevelopmentExpert
251Notes to the Consolidated Financial Statements
Mario Rosa-Bian 1),5),8)ProjectPrincipalConsultant
Dr. Erhard Schipporeit 3),7)IndependentManagementConsultant
SupervisoryBoard,TalanxAG,Hanover,GermanySupervisoryBoard,DeutscheBörseAG,FrankfurtamMain,GermanySupervisoryBoard,HDIV.a.G.,Hanover,GermanySupervisoryBoard,HannoverRückversicherungSE,Hanover,GermanySupervisoryBoard,FuchsPetrolubSE,Mannheim,GermanySupervisoryBoard,BDOAG,Hamburg,GermanyBoardofDirectors,TUITravelPLC,London,UK(untilDecember11,2014)BoardofDirectors,FidelityFundsSICAV,LuxembourgSupervisoryBoard,RocketInternetAG,Berlin,Germany(fromAugust22,2014)
Stefan Schulz 1),3),4)DevelopmentExecutive,VicePresident
SupervisoryBoard,ORTECInternationalB.V.,Zoetermeer,theNetherlands
Jim Hagemann Snabe(fromJuly7,2014) 2),5)SupervisoryBoardMember
BoardofDirectors,Bang&OlufsenA/S,Struer,DenmarkBoardofDirectors,DanskeBankA/S,Copenhagen,DenmarkSupervisoryBoard,AllianzSE,Munich,Germany(fromMay7,2014)SupervisoryBoard,SiemensAG,Munich,Germany
Prof. Dr.-Ing. Dr.-Ing. E. h. Klaus Wucherer 3)ManagingDirectorofDr.KlausWuchererInnovations-undTechnologieberatungGmbH,Erlangen,Germany
DeputyChairmanoftheSupervisoryBoard,HEITECAG,Erlangen,GermanySupervisoryBoard,DürrAG,Bietigheim-Bissingen,GermanyDeputyChairmanoftheSupervisoryBoard,LEONIAG,Nuremberg,GermanyChairmanoftheSupervisoryBoard,FestoAG&Co.KG,Esslingen,Germany
Supervisory Board Members Who Left During 2014Inga Wiele(untilJuly6,2014)
InformationasatDecember31,2014.
1)Electedbytheemployees2)MemberoftheCompany’sGeneralandCompensationCommittee3)MemberoftheCompany’sAuditCommittee4)MemberoftheCompany’sTechnologyandStrategyCommittee5)MemberoftheCompany’sFinanceandInvestmentCommittee6)MemberoftheCompany’sNominationCommittee7)MemberoftheCompany’sSpecialCommittee8)MemberoftheCompany’sPeopleandOrganizationCommittee
252 Consolidated Financial Statements IFRS
ThetotalcompensationoftheExecutiveBoardmembersfortheyears2014,2013,and2012wasasfollows:
Executive Board Compensation €thousands
2014 2013 2012
Short-termemployeebenefits 16,196 24,728 17,054
Share-basedpayment1) 8,098 8,603 14,855
Subtotal1) 24,294 33,331 31,909
Post-employmentbenefits 3,249 1,324 3,263
Thereofdefined-benefit 2,276 189 1,711
Thereofdefined-contribution 973 1,135 1,552
Total1) 27,543 34,655 35,172
1)Portionoftotalexecutivecompensationallocatedtotherespectiveyear
Theshare-basedpaymentamountsdisclosedabovearebasedonthegrantdatefairvalueoftherestrictedshareunits(RSUs)issuedtoExecutiveBoardmembersduringtheyear.
TheExecutiveBoardmembersalreadyreceived,in2012,theLTIgrantsfortheyears2012to2015subjecttocontinuousserviceasmemberoftheExecutiveBoardintherespectiveyears.Althoughthesegrantsarelinkedtoandthus,economi-cally,compensationfortheExecutiveBoardmembersintherespectiveyears,section314oftheGermanCommercialCode(HGB)requiresthemtobeincludedinthetotalcompensationnumberfortheyearofgrant.DuetotheappointmentsofRobertEnslin,BerndLeukert,andLukaMucictotheExecutiveBoardin2014,additionalgrantswereallocatedtothemrelatedto2014and2015.VestingoftheLTIgrantsisdependentontherespectiveExecutiveBoardmember’scontinuousservicefortheCompany.
Theshare-basedpaymentasdefinedinsection314oftheGermanCommercialCode(HGB)amountsto€8,720,200(2013:€3,149,600)basedontheallocationsfor2014and2015forRobertEnslin,BerndLeukert,andLukaMucicwhichweregrantedin2014inlinewiththeirappointmenttotheExecutiveBoard.Includingtheseamounts,thesumofshort-termemployeebenefitsandshare-basedpaymentamountsto€23,216,200(2013:€24,109,600)andthetotalExecutiveBoardcompensationamountsto€26,464,700(2013:€25,433,400).Theseamountsdifferfromtherespective
amountsshowninthetableabove,sincetheamountsinthetableaboveconsidertheLTItranchesthatwereallocatedtoeachoftherespectiveyears,ratherthanconsideringtheLTItranchesbasedonthegrantdateasdefinedundersection314oftheGermanCommercialCode(HGB).
Share-Based Payment for Executive Board Members
2014 2013 2012
NumberofRSUsgranted 153,909 152,159 326,432
Numberofstockoptionsgranted 0 0 0
Totalexpensein€thousands 11,133 –8,596 57,429
Inthetableabove,theshare-basedpaymentexpenseistheamountrecordedinprofitorlossunderIFRS2intherespectiveperiod. Thedefinedbenefitobligation(DBO)forpensionstoExecutiveBoardmembersandtheannualpensionentitlementofthemembersoftheExecutiveBoardonreachingage60basedonentitlementsfromperformance-basedandsalary-linkedplanswereasfollows:
Retirement Pension Plan for Executive Board Members€thousands
2014 2013 2012
DBODecember31 11,273 9,077 8,889
Annualpensionentitlement 475 452 429
253Notes to the Consolidated Financial Statements
SubjecttotheadoptionofthedividendresolutionbytheshareholdersattheAnnualGeneralMeetingofShareholdersonMay20,2015,thetotalannualcompensationoftheSupervisoryBoardmembersfor2014isasfollows:
Supervisory Board Compensation €thousands
2014 2013 2012
Totalcompensation 3,227 2,966 2,981
Thereoffixedcompensation 924 870 901
Thereofcommitteeremuneration 515 416 340
Thereofvariablecompensation 1,788 1,680 1,741
TheSupervisoryBoardmembersdonotreceiveanyshare-basedpaymentfortheirservices.AsfarasmemberswhoareemployeerepresentativesontheSupervisoryBoardreceiveshare-basedpaymentsuchcompensationisfortheirservicesasemployeesonlyandisunrelatedtotheirstatusasmembersoftheSupervisoryBoard.
Duringthefiscalyear2014,paymentstoandDBOforformerExecutiveBoardmemberswereasfollows:
Payments to/DBO for Former Executive Board Members€thousands
2014 2013 2012
Payments 3,462 1,387 1,360
DBO 33,764 29,181 30,551
SAPdidnotgrantanycompensationadvanceorcreditto,orenterintoanycommitmentforthebenefitof,anymemberoftheExecutiveBoardorSupervisoryBoardin2014,2013,or2012.
OnDecember31ofeachof2014,2013and2012,theshareholdingsofSAP’sboardmemberswereasfollows:
Shareholdings of Executive and Supervisory Board MembersNumberofSAPshares
2014 2013 2012
ExecutiveBoard 36,426 30,201 35,271
SupervisoryBoard 107,467,372 119,316,444 121,363,858
DetailedinformationaboutthedifferentelementsofthecompensationaswellasthenumberofsharesownedbymembersoftheExecutiveBoardandtheSupervisoryBoardaredisclosedintheCompensationReportwhichispartofourManagementReportandofourAnnualReportonForm20-F,bothofwhichareavailableonSAP’sWebsite.(31) RELATED PARTY TRANSACTIONSCertainExecutiveBoardandSupervisoryBoardmembersofSAPSEcurrentlyhold,orheldwithinthelastyear,positionsofsignificantresponsibilitywithotherentities,aspresentedinNote(30).Wehaverelationshipswithcertainoftheseentitiesintheordinarycourseofbusiness,wherebywebuyandsellawidevarietyofproducts,assetsandservicesatpricesbelievedtobeconsistentwiththosenegotiatedatarm’slengthbetweenunrelatedparties.
CompaniescontrolledbyHassoPlattner,chairmanofourSupervisoryBoardandChiefSoftwareAdvisorofSAP,engagedinthefollowingtransactionswithSAP:providingconsultingservicestoSAP,receivingsportsponsoringfromSAP,makingpurchasesofSAPproductsandservices.Intheprioryear,thetransactionsalsoincludedpurchasingapieceoflandfromacompanyindirectlyheldbyHassoPlattner.
ChristianeKuntz-Mayr,vicechairpersonoftheSAPSupervisoryBoard,actsasamanagingdirectoroffamily&kids@workgemeinnützigeUG(“family&kids@work”).
WilhelmHaarmannpracticesasapartnerinthelawfirmLinklatersLLPinFrankfurtamMain,Germany.SAPoccasionallypurchasedandpurchaseslegalandsimilarservicesfromLinklaters.
254 Consolidated Financial Statements IFRS
AllamountsrelatedtotheabovementionedtransactionswereimmaterialtoSAPinallperiodspresented.
Intotal,wesoldproductsandservicestocompaniescontrolledbymembersoftheSupervisoryBoardintheamountof€4million(2013:€3million),weboughtproductsandservicesfromsuchcompaniesintheamountof€1million(2013:€1million),wepurchasedpropertyandotherassetsfromsuchcompaniesintheamountof€0million(2013:€2million)andweprovidedsponsoringandotherfinancialsupporttosuchcompaniesintheamountof€7million(2013:€4million).Outstandingbalancesatyear-endfromtransactionswithsuchcompanieswere€2million(2013:€2million)foramountsowedtosuchcompaniesand€1million(2013:€1million)foramountsowedbysuchcompanies.Allthesebalancesareunsecuredandinterestfreeandsettlementisexpectedtooccurincash.Commitments(thelongestofwhichisfor11years)madebyustopurchasefurthergoodsorservicesfromthesecompaniesandtoprovidefurthersponsoringandotherfinancialsupportamountto€13millionasatDecember31,2014(2013:€14million).
Intotal,wereceivedservicesfrommembersoftheSupervisoryBoard(includingservicesfromemployeerepresentativesontheSupervisoryBoardintheircapacityasemployeesofSAP)intheamountof€2million(2013:€2million).AmountsowedtoSupervisoryBoardmembersfromthesetransactionswere€0millionasatDecember31,2014(2013:€0million).Allthesebalancesareunsecuredandinterestfreeandsettlementisexpectedtooccurincash.CommitmentsmadebyustopurchasefurtherservicesfromSupervisoryBoardmembersamountto€0millionasatDecember31,2014(2013:€0million).
ForinformationaboutthecompensationofourExecutiveBoardandSupervisoryBoardmembers,seeNote(30).(32) PRINCIPAL ACCOUNTANT FEES AND SERVICESAttheAnnualGeneralMeetingofShareholdersheldonMay21,2014,ourshareholderselectedKPMGAGWirtschaftsprüfungs-gesellschaftasSAP’sindependentauditorfor2014.KPMGAGWirtschaftsprüfungsgesellschaftandotherfirmsintheglobalKPMGnetworkchargedthefollowingfeestoSAPforauditandotherprofessionalservicesrelatedto2014andthepreviousyears:
Fees for Audit and Other Professional Services€millions
2014 2013 2012
KPMGAG(Germany)
ForeignKPMGFirms
Total KPMGAG(Germany)
ForeignKPMGFirms
Total KPMGAG(Germany)
ForeignKPMGFirms
Total
Auditfees 2 6 8 2 7 9 2 8 10Audit-relatedfees 0 0 0 1 0 1 2 0 2Taxfees 0 0 0 0 0 0 0 0 0Allotherfees 0 0 0 0 0 0 0 0 0Total 2 6 8 3 7 10 4 8 12
255Notes to the Consolidated Financial Statements
AuditfeesaretheaggregatefeeschargedbyKPMGfortheauditofourConsolidatedFinancialStatementsaswellasauditsofstatutoryfinancialstatementsofSAPSEanditssubsidiaries.Audit-relatedfeesarefeeschargedbyKPMGforassuranceandrelatedservicesthatarereasonablyrelatedtotheperformanceoftheauditorreviewofourfinancialstatementsandarenotreportedunderauditfees.TaxfeesarefeesforprofessionalservicesrenderedbyKPMGfortaxadviceontransferpricing,restructuring,andtaxcomplianceoncurrent,past,orcontemplatedtransactions.Theallotherfeescategoryincludesothersupportservices,suchastrainingandadvisoryservicesonissuesunrelatedtoaccountingandtaxes.
(33) GERMAN CODE OF CORPORATE GOVERNANCETheGermanfederalgovernmentpublishedtheGermanCodeofCorporateGovernanceinFebruary2002.TheCodecontainsstatutoryrequirementsandanumberofrecommendationsandsuggestions.OnlythelegalrequirementsarebindingforGermancompanies.Withregardtotherecommendations,theGermanStockCorporationAct,section161,requiresthateveryyearlistedcompaniespubliclystatetheextenttowhichtheyhaveimplementedthem.Companiescandeviatefromthesuggestionswithouthavingtomakeanypublicstatements.
In2014and2013,ourExecutiveBoardandSupervisoryBoardissuedtherequireddeclarationsofimplementation,thedeclarationfor2014wasmodifiedinFebruary2015.ThesestatementsareavailableonourWebsite:www.sap.com/corporate-en/investors/governance.
(34) EVENTS AFTER THE REPORTING PERIODNoeventsthathaveoccurredsinceDecember31,2014,haveamaterialimpactontheCompany’sConsolidatedFinancialStatements.
256 Consolidated Financial Statements IFRS
AsatDecember31,2014 Ownership TotalRevenuein
20141)
Profit/Loss(–)
afterTaxfor20141)
TotalEquityasat12/31/20141)
NumberofEmployees
asat12/31/20142)
NameandLocationofCompany % €(000) €(000) €(000)
I. Fully Consolidated SubsidiariesGERMANYConcur(Germany)GmbH,FrankfurtamMain 100.0 804 70 696 70
hybrisGmbH,Munich 100.0 57,609 –859 31,377 271
OutlookSoftDeutschlandGmbH,Walldorf 100.0 – –72 –68 –
SAPBeteiligungsGmbH,Walldorf 100.0 3 3 55 –
SAPBusinessComplianceServicesGmbH,Siegen 100.0 4,885 223 1,326 41
SAPDeutschlandSE&Co.KG,Walldorf5),7) 100.0 3,139,049 530,288 1,360,344 4,799
SAPDritteBeteiligungs-undVermögensverwaltungsGmbH,Walldorf6),7) 100.0 – –19,655 521,687 –
SAPErsteBeteiligungs-undVermögensverwaltungsGmbH,Walldorf6),7) 100.0 – –22,037 782,807 –
SAPForeignHoldingsGmbH,Walldorf 100.0 – –11 1,064 –
SAPFünfteBeteiligungs-undVermögensverwaltungsGmbH,Walldorf7) 100.0 – –2,010 2,621,438 –
SAPHostingBeteiligungsGmbH,St.Leon-Rot 100.0 – – 25 –
SAPPortalsEuropeGmbH,Walldorf 100.0 – 36 124,226 –
SAPPortalsHoldingBeteiligungsGmbH,Walldorf 100.0 – –3 930,078 –
SAPProjektverwaltungs-undBeteiligungsGmbH,Walldorf6),7) 100.0 – 29,141 353,015 –
SAPPuertoRicoGmbH,Walldorf 100.0 43,724 2,793 –5,055 18
SAPRetailSolutionsBeteiligungsgesellschaftmbH,Walldorf 100.0 – 388 9,903 –
SAPSechsteBeteiligungs-undVermögensverwaltungsGmbH,Walldorf7) 100.0 – – 25 –
SAPVenturesInvestmentGmbH,Walldorf7) 100.0 – –17 172,973 –
SAPVierteBeteiligungs-undVermögensverwaltungsGmbH,Walldorf 100.0 – –1 24 –
SAPZweiteBeteiligungs-undVermögensverwaltungsGmbH,Walldorf6),7) 100.0 – 286,900 169,273 –
TechniDataGmbH,Markdorf 100.0 105 –94 28,990 –
TRXGermanyGmbH,Berlin 100.0 – –15 1,618 –
REST OF EUROPE, MIDDLE EAST, AFRICAAmbinProperties(Proprietary)Limited,Johannesburg,SouthAfrica 100.0 – 364 1,727 –
AribaCzechs.r.o.,Prague,CzechRepublic 100.0 10,766 360 2,005 193
AribaFrance,SAS,Paris,France 100.0 13,700 539 3,974 47
AribaIberia,S.L.,Madrid,Spain 100.0 1,878 75 790 11
AribaInternationalSwedenAB,Stockholm,Sweden 100.0 1,478 53 372 5
AribaMiddleEast&NorthAfricaFZ-LLC,Dubai,UnitedArabEmirates 100.0 321 –7 317 1
AribaSlovakRepublics.r.o.,Kosice,Slovakia 100.0 1,668 53 449 32
AribaTechnologiesIrelandLtd.,Dublin,Ireland 100.0 998 70 437 –
AribaTechnologiesNetherlandsB.V.,Amsterdam,theNetherlands 100.0 3,735 64 6,293 6
AribaUKLimited,Egham,UnitedKingdom8) 100.0 11,183 670 184 –
b-process,Paris,France 100.0 12,107 –2,972 –7,528 38
BusinessObjects(UK)Limited,London,UnitedKingdom8) 100.0 – – 341 –
BusinessObjectsHoldingB.V.,’s-Hertogenbosch,theNetherlands 100.0 – –1 4,283 –
BusinessObjectsSoftwareLimited,Dublin,Ireland 100.0 895,290 657,070 5,227,134 291
(35) SUBSIDIARIES, ASSOCIATES, AND OTHER EQUITY INVESTMENTS
257Notes to the Consolidated Financial Statements
AsatDecember31,2014 Ownership TotalRevenuein
20141)
Profit/Loss(–)
afterTaxfor20141)
TotalEquityasat12/31/20141)
NumberofEmployees
asat12/31/20142)
NameandLocationofCompany % €(000) €(000) €(000)
ChristiePartnersHoldingC.V.,Rotterdam,theNetherlands 100.0 – –1 –21,829 –
ClearTripInc.(Mauritius),Ebene,Mauritius 54.2
CleartripMEAFZLLC,Dubai,UnitedArabEmirates 54.2
Concur(Austria)GmbH,Vienna,Austria 100.0 10 – 38 1
Concur(France)SAS,Paris,France 100.0 1,237 –14 14,532 98
Concur(Italy)S.r.l.,Milan,Italy 100.0 – – 13 –
Concur(Switzerland)GmbH,Zurich,Switzerland 100.0 33 1 12 2
ConcurCzech(s.r.o.),Prague,CzechRepublic 100.0 938 44 1,617 242
ConcurDenmarkApS,Frederiksberg,Denmark 100.0 – – 3 –
ConcurHoldings(France)SAS,Paris,France 100.0 – –112 5,689 –
ConcurHoldings(Netherlands)B.V.,Amsterdam,theNetherlands 100.0 –479 –650 –26,441 14
ConcurInternationalHoldings(Netherlands)CV,Amsterdam,theNetherlands 100.0 –1,384 –2,744 1,022,116 –
ConcurTechnologies(UK)Ltd.,London,UnitedKingdom 100.0 3,472 154 –9,303 203
ConTgoConsultingLimited,London,UnitedKingdom8) 100.0 74 –139 –2,522 10
ConTgoLimited,London,UnitedKingdom 100.0 – – –2,384 –
ConTgoMTALimited,London,UnitedKingdom 100.0 – – – –
CrossgateUKLtd.,Slough,UnitedKingdom8) 100.0 – – – –
CrystalDecisions(Ireland)Limited,Dublin,Ireland 100.0 – 5 44,548 –
CrystalDecisionsHoldingsLimited,Dublin,Ireland 100.0 – 7 77,732 –
CrystalDecisionsUKLimited,London,UnitedKingdom8) 100.0 – – 2,361 –
EssCubedProcurementPty.Ltd.,Johannesburg,SouthAfrica 100.0 – – –816 –
FieldglassEuropeLimited,London,UnitedKingdom8) 100.0 8,606 145 83 53
GlobalExpense(Consulting)Limited,London,UnitedKingdom 100.0 – – – –
GlobalExpense(UK)Ltd,London,UnitedKingdom 100.0 627 157 2,936 99
hybrisAG,Rotkreuz,Switzerland 100.0 169,965 –23,583 1,064,162 33
hybrisAustriaGmbH,Vienna,Austria 100.0 3,552 17 –150 5
hybrisFranceSAS,Levallois-Perret,France 100.0 14,941 –302 1,204 43
hybrisNetherlandsBV,Amsterdam,theNetherlands 100.0 5,961 –293 5,457 10
hybrisSoftwareAB,Västerås,Sweden 100.0 8,455 –180 8,031 9
hybrisSp.z.o.o.,Gliwice,Poland 100.0 8,478 444 959 166
hybrisUKLtd.,London,UnitedKingdom8) 100.0 34,934 122 22,474 76
JoeDPartnersC.V.,Utrecht,theNetherlands 100.0 147,005 4,601 379,538 –
KXENLtd.,London,UnitedKingdom8) 100.0 113 1,534 102 –
LimitedLiabilityCompany“SAPLabs”,Moscow,Russia 100.0 23,219 –1,157 871 267
LimitedLiabilityCompany“SAPCIS”,Moscow,Russia 100.0 371,669 19,212 64,644 745
LimitedLiabilityCompanySAPKazakhstan,Almaty,Kazakhstan 100.0 18,885 –1,369 2,211 23
LimitedLiabilityCompanySAPUkraine,Kiev,Ukraine 100.0 27,739 –3,954 –5,674 100
MerlinSystemsOy,Espoo,Finland 100.0 9,805 –237 3,078 31
OOOhybrisSoftware,Moscow,Russia 100.0 1,947 –79 86 13
QuadremAfricaPty.Ltd.,Johannesburg,SouthAfrica 100.0 6,420 301 –490 107
258 Consolidated Financial Statements IFRS
AsatDecember31,2014 Ownership TotalRevenuein
20141)
Profit/Loss(–)
afterTaxfor20141)
TotalEquityasat12/31/20141)
NumberofEmployees
asat12/31/20142)
NameandLocationofCompany % €(000) €(000) €(000)
QuadremNetherlandsB.V.,Amsterdam,theNetherlands 100.0 38,278 –144 62,319 4
QuadremOverseasCooperatiefU.A.,Amsterdam,theNetherlands 100.0 – – – –
SAP(Schweiz)AG,Biel,Switzerland 100.0 653,771 67,711 161,753 635
SAP(UK)Limited,Feltham,UnitedKingdom8) 100.0 918,166 66,215 71,294 1,326
SAPBelgiumNV/SA,Brussels,Belgium 100.0 217,771 12,142 137,164 254
SAPBulgariaEOOD,Sofia,Bulgaria 100.0 3,934 233 1,461 4
SAPBusinessServicesCenterEuropes.r.o.,Prague,CzechRepublic 100.0 32,449 677 8,033 543
SAPBusinessServicesCenterNederlandB.V.,Utrecht,theNetherlands 100.0 185,146 4,841 52,407 17
SAPCommercialServicesLtd.,Valletta,Malta 100.0 – –9 –26 –
SAPČR,spol.sr.o.,Prague,CzechRepublic 100.0 77,642 3,862 12,020 249
SAPCyprusLtd,Nicosia,Cyprus 100.0 3,224 –591 637 2
SAPd.o.o.,Zagreb,Croatia 100.0 7,073 –25 –595 13
SAPDanmarkA/S,Copenhagen,Denmark 100.0 198,122 20,137 26,961 174
SAPEastAfricaLimited,Nairobi,Kenya 100.0 9,765 1,065 3,571 47
SAPEgyptLLC,Cairo,Egypt 100.0 12,064 –2,477 –14,316 51
SAPEMEAInsideSalesS.L.,Barcelona,Spain 100.0 13,262 489 3,627 128
SAPEspaña–Sistemas,AplicacionesyProductosenlaInformática,S.A.,Madrid,Spain 100.0 272,734 14,456 239,459 421
SAPEstoniaOÜ,Tallinn,Estonia 100.0 2,082 44 332 1
SAPFinlandOy,Espoo,Finland 100.0 121,412 11,867 50,820 110
SAPFranceHolding,Paris,France 100.0 1,086 116,189 5,285,256 3
SAPFrance,Paris,France 100.0 962,341 220,000 1,562,780 1,431
SAPHellasS.A.,Athens,Greece 100.0 30,644 658 15,159 55
SAPHoldings(UK)Limited,Feltham,UnitedKingdom8) 100.0 – –22,538 806,037 –
SAPHungaryRendszerek,AlkalmazásokésTermékekazAdatfeldolgozásbanInformatikaiKft.,Budapest,Hungary
100.0 48,571 1,959 11,384 522
SAPIrelandLimited,Dublin,Ireland 100.0 –9 13 9,738 –
SAPIrelandUS-FinancialServicesLtd.,Dublin,Ireland 100.0 175 383,434 5,546,367 3
SAPIsraelLtd.,Ra’anana,Israel 100.0 42,182 –1,359 2,241 57
SAPItaliaSistemiApplicazioniProdottiinDataProcessingS.p.A.,Milan,Italy 100.0 412,905 23,511 319,741 567
SAPLabsBulgariaEOOD,Sofia,Bulgaria 100.0 27,105 1,221 6,248 535
SAPLabsFinlandOy,Espoo,Finland 100.0 7,085 272 41,827 47
SAPLabsFranceSAS,Mougins,France 100.0 61,658 1,929 20,335 359
SAPLabsIsraelLtd.,Ra’anana,Israel 100.0 52,455 2,418 20,395 289
SAPLatviaSIA,Riga,Latvia 100.0 2,463 192 7 3
SAPMaltaInvestmentsLtd.,Valletta,Malta 100.0 – –9 –26 –
SAPMiddleEastandNorthAfricaL.L.C.,Dubai,UnitedArabEmirates3) 49.0 178,374 –31,274 –97,964 387
SAPNederlandB.V.,’s-Hertogenbosch,theNetherlands 100.0 482,572 39,550 484,180 492
SAPNederlandHoldingB.V.,’s-Hertogenbosch,theNetherlands 100.0 – 55 521,972 –
SAPNorgeAS,Lysaker,Norway 100.0 89,223 2,683 23,147 80
SAPÖsterreichGmbH,Vienna,Austria 100.0 200,712 21,244 26,047 350
259Notes to the Consolidated Financial Statements
AsatDecember31,2014 Ownership TotalRevenuein
20141)
Profit/Loss(–)
afterTaxfor20141)
TotalEquityasat12/31/20141)
NumberofEmployees
asat12/31/20142)
NameandLocationofCompany % €(000) €(000) €(000)
SAPPolskaSp.zo.o.,Warsaw,Poland 100.0 82,131 6,928 18,508 122
SAPPortalsIsraelLtd.,Ra’anana,Israel 100.0 67,283 22,357 99,695 201
SAPPortugal–Sistemas,AplicaçõeseProdutosInformáticos,SociedadeUnipessoal,Lda.,PortoSalvo,Portugal
100.0 82,651 8,079 26,294 280
SAPPublicServicesHungaryKft.,Budapest,Hungary 100.0 3,043 450 1,673 7
SAPRomaniaSRL,Bucharest,Romania 100.0 38,742 7,242 12,504 374
SAPSaudiArabiaSoftwareServicesLtd,Riyadh,KingdomofSaudiArabia 100.0 59,241 5,959 49,068 52
SAPSaudiArabiaSoftwareTradingLtd,Riyadh,KingdomofSaudiArabia 75.0 45,716 –38,596 –69,848 97
SAPServiceandSupportCentre(Ireland)Limited,Dublin,Ireland 100.0 92,360 859 35,455 1,104
SAPsistemi,aplikacijeinproduktizaobdelavopodatkovd.o.o.,Ljubljana,Slovenia 100.0 14,822 879 4,447 25
SAPSlovenskos.r.o.,Bratislava,Slovakia 100.0 37,361 1,775 10,193 175
SAPSvenskaAktiebolag,Stockholm,Sweden 100.0 179,009 10,332 10,791 164
SAPTrainingandDevelopmentInstituteFZCO,Dubai,UnitedArabEmirates 100.0 6,836 463 –43 39
SAPTürkiyeYazilimÜretimveTicaretA.S.,Istanbul,Turkey 100.0 90,901 –4,128 6,418 189
SAPUAB(Lithuania),Vilnius,Lithuania 100.0 3,048 95 38 1
SAPV(Mauritius),Ebene,Mauritius4) 0 – –139 23,882 –
SAPWestBalkansd.o.o.,Belgrade,Serbia 100.0 15,153 1,437 4,778 32
SeeWhy(UK)Limited,Windsor,UnitedKingdom 100.0 1,073 –53 267 14
SuccessFactors(UK)Limited,London,UnitedKingdom8) 100.0 26,546 888 3,218 96
SuccessFactorsIrelandLimited,Dublin,Ireland 100.0 633 25 3 –
SuccessFactorsNetherlandsB.V.,Amsterdam,theNetherlands 100.0 5,730 379 –7,288 20
Sybase(UK)Limited,Maidenhead,UnitedKingdom8) 100.0 – –2 348 –
SybaseAngola,Ltd.,Luanda,Angola 100.0 – – 1,607 –
SybaseIberiaS.L.,Madrid,Spain 100.0 – 17 65,937 –
SycloInternationalLimited,Leatherhead,UnitedKingdom8) 100.0 – – – –
SystemsApplicationsProductsAfricaRegion(Proprietary)Limited,Johannesburg,SouthAfrica
100.0 94,963 3,847 28,584 8
SystemsApplicationsProductsAfrica(Proprietary)Limited,Johannesburg,SouthAfrica 100.0 – –1 64,816 –
SystemsApplicationsProductsNigeriaLimited,Abuja,Nigeria 100.0 18,782 –1,492 1,334 64
SystemsApplicationsProductsSouthAfrica(Proprietary)Limited,Johannesburg,SouthAfrica 89.5 235,092 –1,640 –7,881 446
TheInfohrmGroupLtd.,London,UnitedKingdom8) 100.0 22 –98 1,295 –
TRXEurope,Ltd.,London,UnitedKingdom 100.0 209 –45 509 20
TRXLuxembourg,S.a.r.l.,LuxembourgCity,Luxembourg 100.0 – – 1,633 –
TRXUK,Ltd.,London,UnitedKingdom 100.0 – – 554 –
AMERICAS110405,Inc.,NewtownSquare,Pennsylvania,USA 100.0 – – 17,209 –
AribaCanada,Inc.,Mississauga,Canada 100.0 4,842 186 1,463 25
Ariba,Inc.,Sunnyvale,California,USA 100.0 430,080 –97,920 3,436,913 1,242
AribaInternationalHoldings,Inc.,Wilmington,Delaware,USA 100.0 – – – –
260 Consolidated Financial Statements IFRS
AsatDecember31,2014 Ownership TotalRevenuein
20141)
Profit/Loss(–)
afterTaxfor20141)
TotalEquityasat12/31/20141)
NumberofEmployees
asat12/31/20142)
NameandLocationofCompany % €(000) €(000) €(000)
AribaInternational,Inc.,Wilmington,Delaware,USA 100.0 6,807 380 –3,681 –
AribaInvestmentCompany,Inc.,Wilmington,Delaware,USA 100.0 373 5,327 244,911 –
BusinessObjectsOptionLLC,Wilmington,Delaware,USA 100.0 – 852 73,290 –
CapturaSoftware,Inc.,Wilmington,Delaware,USA 100.0 – – – –
ClearTripInc.,GeorgeTown,CaymanIslands 54.2
CNQROperationsMexicoS.de.R.L.de.C.V.,SanPedroGarzaGarcia,Mexico 100.0 214 9 211 16
Concur(Canada),Inc.,Toronto,Canada 100.0 371 11 3,782 31
ConcurHoldings(US)LLC,Wilmington,Delaware,USA 100.0 – – 106 –
ConcurPerfectTripFundLLC,Wilmington,Delaware,USA 100.0 – – – –
ConcurTechnologies,Inc.,Wilmington,Delaware,USA 100.0 30,998 –5,209 7,098,997 2,367
ExtendedSystems,Inc.,Boise,Idaho,USA 99.0 – –93 18,658 –
Fieldglass,Inc.,Chicago,Illinois,USA 100.0 49,640 –72 802,515 362
GelcoInformationNetwork,Inc.,Bellevue,Washington,USA 100.0 – – 39,079 –
GelcoInformationNetworkGSD,Inc.,Wilmington,Delaware,USA 100.0 – – – –
H-GHoldings,Inc.,Wilmington,Delaware,USA 100.0 – – 21,456 –
H-GIntermediateHoldings,Inc.,Wilmington,Delaware,USA 100.0 – – 21,456 –
FinancialFusion,Inc.,Concord,Massachusetts,USA 100.0 – – – –
FreeMarketsInternationalHoldingsInc.deMexico,deS.deR.L.deC.V.,MexicoCity,Mexico
100.0 – – –61 –
FreeMarketsLtda.,SãoPaulo,Brazil 100.0 65 –78 –546 –
hybrisCanada,Inc.,Montréal,Canada 100.0 37,214 –499 –523 256
hybris(US)Corp.,Wilmington,Delaware,USA 100.0 70,808 –643 25,615 185
iAnywhereSolutions,Inc.,Dublin,California,USA 99.0 58,089 16,452 212,818 36
InxightFederalSystemsGroup,Inc.,Wilmington,Delaware,USA 100.0 – – 75 –
Jobs2Web,Inc.,Minnetonka,Minnesota,USA 100.0 54 27 5,760 –
OuttaskLLC,Wilmington,Delaware,USA 100.0 – – – –
PlateauSystemsLLC,Arlington,Virginia,USA 100.0 582 3,660 16,147 –
QuadremBrazilLtda.,RiodeJaneiro,Brazil 100.0 22,784 –488 6,946 157
QuadremCanadaLtd.,Mississauga,Canada 100.0 827 32 563 7
QuadremChileLtda.,SantiagodeChile,Chile 100.0 13,958 –1,608 47 173
QuadremColombiaSAS,Bogotá,Colombia 100.0 236 –21 –4 –
QuadremInternationalLtd.,Hamilton,Bermuda 100.0 19,241 9,878 89,505 –
QuadremPeruS.A.C.,Lima,Peru 100.0 4,204 –343 –2,600 91
SanBorjaPartricipadoesLTDA,SãoPaulo,Brazil 100.0 – – – –
SAPAmerica,Inc.,NewtownSquare,Pennsylvania,USA 100.0 3,576,310 –273,031 13,579,632 5,777
SAPAndinaydelCaribeC.A.,Caracas,Venezuela 100.0 11,749 5,597 –42,193 26
SAPArgentinaS.A.,BuenosAires,Argentina 100.0 173,060 52,125 47,823 548
SAPBrasilLtda,SãoPaulo,Brazil 100.0 516,203 –3,965 38,209 1,488
SAPCanada,Inc.,Toronto,Canada 100.0 639,306 37,393 501,468 2,287
SAPChileLimitada,Santiago,Chile 100.0 – 1,460 –29,671 104
261Notes to the Consolidated Financial Statements
AsatDecember31,2014 Ownership TotalRevenuein
20141)
Profit/Loss(–)
afterTaxfor20141)
TotalEquityasat12/31/20141)
NumberofEmployees
asat12/31/20142)
NameandLocationofCompany % €(000) €(000) €(000)
SAPColombiaSAS.,Bogotá,Colombia 100.0 118,945 –22,486 –13,359 257
SAPCostaRica,S.A.,SanJosé,CostaRica 100.0 14,905 –5,757 –10,838 16
SAPFinancial,Inc.,Toronto,Canada 100.0 – 27,115 7,019 –
SAPGlobalMarketing,Inc.,NewYork,NewYork,USA 100.0 291,239 6,230 33,076 537
SAPIndustries,Inc.,NewtownSquare,Pennsylvania,USA 100.0 529,357 47,627 477,848 414
SAPInternational,Inc.,Miami,Florida,USA 100.0 22,166 2,073 11,867 65
SAPInternationalPANAMAS.A.,PanamaCity,Panama 100.0 2,562 –52 322 1
SAPInvestments,Inc.,Wilmington,Delaware,USA 100.0 – 24,418 783,739 –
SAPLABS,LLC,PaloAlto,California,USA 100.0 487,404 24,832 282,077 1,931
SAPMéxicoS.A.deC.V.,MexicoCity,Mexico 100.0 298,901 3,078 –15,996 647
SAPNationalSecurityServices,Inc.,NewtownSquare,Pennsylvania,USA 100.0 230,020 48,412 238,904 304
SAPPERUS.A.C.,Lima,Peru 100.0 32,509 357 5,544 54
SAPPublicServices,Inc.,Washington,D.C.,USA 100.0 294,721 29,271 306,671 202
SAPTechnologiesInc.,PaloAlto,California,USA 100.0 – – – –
SapphireSAPHANAFundofFunds,L.P.,Wilmington,Delaware,USA4) 0 – 1,957 4,171 –
SapphireVenturesFundI,L.P.,Wilmington,Delaware,USA4) 0 – 3,875 224,288 –
SapphireVenturesFundII,L.P.,Wilmington,Delaware,US4) 0 – –7,348 –4,184 –
SeeWhyInc.,Boston,Massachusetts,USA 100.0 1,503 –1,153 25,409 12
SuccessFactors,Inc.,SanMateo,California,USA 100.0 525,251 –60,752 2,736,785 1,320
SuccessFactorsCanadaInc.,Ottawa,Canada 100.0 8,477 292 430 39
SuccessFactorsCayman,Ltd.,GrandCayman,CaymanIslands 100.0 – – –578 –
SuccessFactorsInternationalHoldings,LLC,SanMateo,California,USA 100.0 – – 6,966 –
SuccessFactorsInternationalServices,Inc.,SanMateo,California,USA 100.0 496 132 244 –
SurplusRecord,Inc.,Chicago,Illinois,USA 100.0 3,040 533 9,377 13
Sybase365LLC,Dublin,California,USA 100.0 97,752 2,640 67,436 103
Sybase365Ltd.,Tortola,BritishVirginIslands 100.0 – – –1,032 –
SybaseArgentinaS.A.,BuenosAires,Argentina 100.0 – 72 699 –
SybaseGlobalLLC,Dublin,California,USA 100.0 – – 8,024 –
SybaseIntlHoldingsLLC,Dublin,California,USA 100.0 – –1 12,887 –
Sybase,Inc.,Dublin,California,USA 100.0 502,464 233,850 5,087,314 789
TechnologyLicensingCompany,LLC,Atlanta,Georgia,USA 100.0 – – – –
TomorrowNow,Inc.,Bryan,Texas,USA 100.0 – –137,084 –46,194 3
TravelTechnology,LLC,Atlanta,Georgia,USA 100.0 – – – –
TripItLLC,Wilmington,Delaware,USA 100.0 – – – –
TRX,Inc.,Atlanta,Georgia,USA 100.0 1,303 –228 15,346 169
TRXDataService,Inc.,GlenAllen,Virginia,USA 100.0 – – – –
TRXFulfillmentServices,LLC,Atlanta,Georgia,USA 100.0 – – – –
TRXTechnologyServices,L.P.,Atlanta,Georgia,USA 100.0 – – – –
262 Consolidated Financial Statements IFRS
AsatDecember31,2014 Ownership TotalRevenuein
20141)
Profit/Loss(–)
afterTaxfor20141)
TotalEquityasat12/31/20141)
NumberofEmployees
asat12/31/20142)
NameandLocationofCompany % €(000) €(000) €(000)
ASIA PACIFIC JAPANAribaIndiaPvt.Ltd.,Gurgaon,India 100.0 6,937 937 3,556 42
AribaInternationalSingaporePte.Ltd.,Singapore,Singapore 100.0 4,400 –508 –5,865 18
AribaSoftwareTechnologyServices(Shanghai)Co.Ltd.,Shanghai,China 100.0 2,067 779 1,504 4
AribaTechnologiesIndiaPvt.Ltd.,Bangalore,India 100.0 30,289 2,679 9,710 665
BeijingZhangZhongHuDongInformationTechnologyCo.Ltd.,Beijing,China3) 0 1,256 65 1,030 6
BusinessObjectsSoftware(Shanghai)Co.Ltd.,Shanghai,China 100.0 7,003 155 8,905 96
ClearTripPrivateLimited,Mumbai,India 54.2
Concur(Japan)Ltd.,Bunkyo-ku,Japan 75.0 298 –287 3,610 43
Concur(NewZealand)Limited,Wellington,NewZealand 100.0 – 1 –4 –
Concur(Philippines)Inc.,MakatiCity,Philippines 100.0 1,133 52 1,869 798
ConcurTechnologies(Australia)Pty.Limited,Sydney,Australia 100.0 1,204 44 –888 73
ConcurTechnologies(HongKong)Ltd,HongKong,China 100.0 279 12 304 18
ConcurTechnologies(India)PrivateLimited,Bangalore,India 100.0 712 61 394 400
ConcurTechnologies(Singapore)Pte.Ltd.,Singapore,Singapore 100.0 377 19 829 13
ConTgoPty.Ltd.,Sydney,Australia 100.0 –2 –2 –212 –
FieldglassAsiaPacPTYLtd,Brisbane,Australia 100.0 3,443 –69 –492 26
hybrisAustraliaPtyLimited,SurryHills,Australia 100.0 7,425 190 412 23
hybrisHongKongLtd.,HongKong,China 100.0 3,194 –53 503 11
hybrisJapanK.K.,Tokyo,Japan 100.0 2,697 36 –71 10
NihonAribaK.K.,Tokyo,Japan 100.0 3,079 –16 1,400 15
PlateauSystemsAustraliaLtd,Brisbane,Australia 100.0 – – –584 –
PlateauSystemsPte.Ltd.,Singapore,Singapore 100.0 – – –473 –
PTSAPIndonesia,Jakarta,Indonesia 99.0 50,444 4,140 7,600 55
PTSybase365Indonesia,Jakarta,Indonesia 100.0 – –19 – –
QuadremAsiaPte.Ltd.,Singapore,Singapore 100.0 – –4 – –
QuadremAustraliaPtyLtd.,Brisbane,Australia 100.0 3,448 205 3,343 –
QuadremChinaLtd.,HongKong,China 100.0 – – – –
RuanLianTechnologies(Beijing)Co.Ltd.,Beijing,China 100.0 117 12 –1,007 –
SAP(Beijing)SoftwareSystemCo.Ltd.,Beijing,China 100.0 574,096 –32,651 –9,435 4,231
SAPAsiaPteLtd,Singapore,Singapore 100.0 314,717 –8,132 78,223 1,033
SAPAsia(Vietnam)Co.Ltd.,HoChiMinhCity,Vietnam 100.0 2,006 98 706 47
SAPAustraliaPtyLtd,Sydney,Australia 100.0 534,203 –9,262 231,758 866
SAPHongKongCo.Limited,HongKong,China 100.0 48,083 –6,578 –13,540 106
SAPIndia(Holding)PteLtd,Singapore,Singapore 100.0 – 18,596 278 –
SAPIndiaPrivateLimited,Bangalore,India 100.0 380,610 19,978 218,328 1,822
SAPJapanCo.Ltd.,Tokyo,Japan 100.0 599,709 31,491 440,325 1,026
SAPKoreaLtd.,Seoul,SouthKorea 100.0 209,026 1,737 22,645 356
SAPLabsIndiaPrivateLimited,Bangalore,India 100.0 205,749 12,151 7,233 4,847
SAPLabsKorea,Inc.,Seoul,SouthKorea 100.0 16,193 558 19,676 120
263Notes to the Consolidated Financial Statements
AsatDecember31,2014 Ownership TotalRevenuein
20141)
Profit/Loss(–)
afterTaxfor20141)
TotalEquityasat12/31/20141)
NumberofEmployees
asat12/31/20142)
NameandLocationofCompany % €(000) €(000) €(000)
SAPMalaysiaSdn.Bhd.,KualaLumpur,Malaysia 100.0 103,687 5,613 11,758 118
SAPNewZealandLimited,Auckland,NewZealand 100.0 76,095 5,446 52,808 103
SAPPhilippines,Inc.,Makati,Philippines 100.0 38,545 –2,832 –919 147
SAPSYSTEMS,APPLICATIONSANDPRODUCTSINDATAPROCESSING(THAILAND)LTD.,Bangkok,Thailand
100.0 81,508 2,848 15,845 63
SAPTaiwanCo.Ltd.,Taipei,Taiwan 100.0 90,469 14,098 46,933 128
ShanghaiSuccessFactorsSoftwareTechnologyCo.,Ltd.,Shanghai,China 100.0 15,738 1,578 1,990 189
SuccessFactors(Philippines),Inc.,PasigCity,Philippines 100.0 3,403 82 107 101
SuccessFactorsAsiaPacificLimited,HongKong,China 100.0 6 – –571 –
SuccessFactorsAustraliaHoldingsPtyLtd.,Brisbane,Australia 100.0 – –3,195 –17,912 –
SuccessFactorsAustraliaPtyLimited,Brisbane,Australia 100.0 21,976 837 8,825 109
SuccessFactorsBusinessSolutionsIndiaPrivateLimited,Bangalore,India 100.0 12,128 215 684 219
SuccessFactorsHongKongLimited,HongKong,China 100.0 2,013 83 1,634 –
SuccessFactorsJapanK.K.,Tokyo,Japan 100.0 3,025 –107 –94 14
SuccessFactorsSingaporePte.Ltd.,Singapore,Singapore 100.0 4,240 179 342 19
SybaseHongKongLtd,HongKong,China 100.0 – –2 – –
SybaseIndiaLtd.,Mumbai,India 100.0 – 4 2,354 –
SybasePhilippines,Inc.,MakatiCity,Philippines 100.0 – 2 –7 –
SybaseSoftware(China)Co.Ltd.,Beijing,China 100.0 22,405 –2,571 16,501 296
SybaseSoftware(India)PrivateLtd,Mumbai,India 100.0 14,586 1,199 10,638 228
TRXTechnologiesIndiaPrivateLimited,RamanNagar,India 100.0 – –50 1,845 1
II. JOINT OPERATIONS AND INVESTMENTS IN ASSOCIATESAlteryx,Inc.,Irvine,California,USA 13.89 30,045 –8,191 11,497 182
ChinaDataComCorporationLimited,Guangzhou,China 28.30 36,934 –3,658 37,418 880
GreaterPacificCapital(Cayman)L.P.,GrandCayman,CaymanIslands 5.35 315 –769 339,250 –
ProcurementNegóciosEletrônicosS/A,RiodeJaneiro,Brazil 17.00 24,582 1,281 14,440 –
SAP-NOVABASE,A.C.E.,PortoSalvo,Portugal 66.66 – – 5 –
Yapta,Inc.,Seattle,Washington,USA 46.60
1)ThesefiguresarebasedonourlocalIFRSfinancialstatementspriortoeliminationsresultingfromconsolidationandthereforedonotreflectthecontributionofthesecompaniesincludedintheConsolidatedFinancialStatements.ThetranslationoftheequityintoGroupcurrencyisbasedonperiod-endclosingexchangerates,andonaverageexchangeratesforrevenueandnetincome/loss.
2)AsatDecember31,2014,includingmanagingdirectors,inFTE.3)AgreementswiththeothershareholdersprovidethatSAPSEfullycontrolstheentity.4)SAPSEdoesnotholdanyownershipinterestsinfourstructuredentities,SAPV(Mauritius),SapphireSAPHANAFundofFunds,L.P.,SapphireVenturesFundI,L.P.andSapphireVenturesFundII,L.P.However,basedonthetermsoflimitedpartnershipagreementsunderwhichtheseentitieswereestablished,SAPSEisexposedtothemajorityofthereturnsrelatedtotheiroperationsandhasthecurrentabilitytodirecttheseentities'activitiesthataffectthesereturns,inaccordancewithIFRS10.Accordingly,theresultsofoperationsareincludedinSAP’sconsolidatedfinancialstatements.
5)EntitywhosepersonallyliablepartnerisSAPSE.6)Entitywithprofitandlosstransferagreement.7)PursuanttoHGB,section264(3)orsection264b,thesubsidiaryisexemptfromapplyingcertainlegalrequirementstotheirstatutorystand-alonefinancialstatementsincludingtherequirementtopreparenotestothefinancialstatementsandareviewofoperations,therequirementofindependentauditandtherequirementofpublicdisclosure.
8)Pursuanttosections479Ato479CoftheUKCompaniesAct2006,theentityisexemptfromhavingitsfinancialstatementsauditedonthebasisthatSAPSEhasprovidedaguaranteeoftheentity’sliabilitiesinrespectofitsfinancialyearendedDecember31,2014.
264 Consolidated Financial Statements IFRS
AsatDecember31,2014
NameandLocationofCompany
III. OTHER EQUITY INVESTMENTS(ownership of 5% or more)
AlchemistAcceleratorFundILLC,SanFrancisco,California,USA
AllTaxPlatform-SolucoesTributariasS.A.,SãoPaulo,Brazil
AmplifyPartnersL.P.,Cambridge,Massachusetts,USA
ArisGlobalHoldingsLLC,Stamford,Connecticut,USA
Convercent,Inc.,Denver,Colorado,USA
CostanoaVentureCapitalIIL.P.,PaloAlto,California,USA
DataCollectiveIIL.P.,SanFrancisco,California,USA
DataCollectiveIIIL.P.,SanFrancisco,California,USA
EITICTLabsGmbH,Berlin,Germany
EvatureTechnologies(2009)Ltd.,RamatGan,Israel
Five9,Inc.,SanRamon,California,USA
FollowAnalytics,Inc.,SanFrancisco,California,USA
GKSoftwareAG,Schöneck,Germany
InnovationLabGmbH,Heidelberg,Germany
iTACSoftwareAG,Dernbach,Germany
iYogiHoldingsPvt.Ltd.,PortLouis,Mauritius
Jibe,Inc.,NewYork,NewYork,USA
Kaltura,Inc.,NewYork,NewYork,USA
KruxDigital,Inc.,SanFrancisco,California,USA
Lavante,Inc.,SanJose,California,USA
MuleSoft,Inc.,SanFrancisco,California,USA
MVPStrategicPartnershipFundGmbH&Co.KG,Grünwald,Germany
NarrativeScience,Inc.,Chicago,Illinois,USA
Nor1,Inc.,SantaClara,California,USA
OnDeckCapital,Inc.,NewYork,NewYork,USA
OnventisGmbH,Stuttgart,Germany
OpenXSoftwareLimited,Pasadena,California,USA
PatentQuality,Inc.,Bellevue,Washington,USA
PointNineCapitalFundIIGmbH&Co.KG,Berlin,Germany
PostforSystems,Cairo,Egypt
RealizeCorporation,Tokyo,Japan
RetailSolutions,Inc.(legalname:T3C,Inc.),MountainView,California,USA
ReturnPath,Inc.,NewYork,NewYork,USA
RideCharge,Inc.,Alexandria,Virginia,USA
Rome2rioPty.Ltd.,AlbertPark,Australia
Room77,Inc.,MountainView,California,USA
Scytl,S.A.,Barcelona,Spain
SmartCityPlanning,Inc.,Tokyo,Japan
265Notes to the Consolidated Financial Statements
Walldorf,February19,2015
SAPSEWalldorf,BadenTheExecutiveBoard
Bill McDermott Robert Enslin
Bernd Leukert Luka Mucic
Gerhard Oswald
AsatDecember31,2014
NameandLocationofCompany
Socrata,Inc.,Seattle,Washington,USA
StayNTouchInc.,Bethesda,Maryland,USA
StormVenturesV,L.P.,MenloPark,California,USA
SVAngelIVL.P.,SanFrancisco,California,USA
TableNow,Inc.,SanFrancisco,California,USA
Technologie-undGründerzentrumWalldorfStiftungGmbH,Walldorf,Germany
TheSAVOGroupLtd.,Chicago,Illinois,USA
Ticketfly,Inc.,SanFrancisco,California,USA
TidalScale,Inc.,SantaClara,California,USA
Trover,Inc.,Seattle,Washington,USA
UpfrontV,LP,SantaMonica,California,USA
VisageMobile,Inc.,Larkspur,California,USA
ZendTechnologies,Ltd.,RamatGan,Israel
266 Consolidated Financial Statements IFRS
U.S.lawrequiresthatmanagementsubmitareportontheeffectivenessofinternalcontroloverfinancialreportingintheconsolidatedfinancialstatements.For2014,thatreportisasfollows:
ThemanagementofSAPisresponsibleforestablishingandmaintainingadequateinternalcontroloverfinancialreportingassuchtermisdefinedinRules13a-15(f)and15d-15(f)undertheU.S.SecuritiesExchangeActof1934.SAP’sinternalcontroloverfinancialreportingisaprocessdesignedunderthesupervisionofSAP’sCEOandCFOtoprovidereasonableassuranceregardingthereliabilityoffinancialreportingandthepreparationoffinancialstatementsforexternalreportingpurposesinaccordancewithInternationalFinancialReportingStandards(IFRS)asissuedbytheInternationalAccountingStandardsBoard(IASB).
SAP’smanagementassessedtheeffectivenessoftheCompany’sinternalcontroloverfinancialreportingasatDecember31,2014.Inmakingthisassessment,itusedthecriteriasetforthbytheCommitteeofSponsoringOrganizationsoftheTreadwayCommission(COSO)inInternalControl–IntegratedFramework(2013).
Basedontheassessmentunderthesecriteria,SAPmanagementhasconcludedthat,asatDecember31,2014,theCompany’sinternalcontroloverfinancialreportingwaseffective.
KPMGAGWirtschaftsprüfungsgesellschaft,ourindependentregisteredpublicaccountingfirm,hasissueditsattestationreportontheeffectivenessofSAP’sinternalcontroloverfinancialreporting.Itisincludedintheindependentauditor’sreportontheConsolidatedFinancialStatementsandManagementReportasatDecember31,2014.
Management’s Annual Report on Internal Control over Financial Reporting in the Consolidated Financial Statements
267Notes to the Consolidated Financial Statements