v2.1.0.1
Consolidated Income Statement (EUR €)
In Millions, except Per Share data
3 Months Ended
Mar. 31, 2011
Mar. 31, 2010
Revenue [abstract]
Software revenue € 583 € 464
Support revenue 1,655 1,394
Subscription and other software-related service revenue 89 89
Software and software-related service revenue 2,327 1,947
Consulting revenue 570 479
Other service revenue 127 83
Professional services and other service revenue 697 562
Total revenue 3,024 2,509
Operating expenses [abstract]
Cost of software and software-related services (495) (399)
Cost of professional services and other services (577) (451)
Research and development (498) (393)
Sales and marketing (677) (557)
General and administration (177) (148)
TomorrowNow Litigation expense (2) 0
Other operating income (expenses), net (1) (4)
Total operating expenses (2,427) (1,952)
Operating profit 597 557
Other non-operating income (expenses), net 0 (36)
Financial income, net [abstract]
Finance income 29 15
Finance costs (43) (15)
Financial income, net (14) 0
Profit (loss) before tax 583 521
Income tax expense (180) (134)
Profit (loss) after tax 403 387
Profit (loss) attributable to [abstract]
Profit (loss) attributable to non-controlling interests 0 0
Profit (loss) attributable to owners of parent € 403 € 387
Earnings per share [abstract]
Basic earnings (loss) per share € 0.34 € 0.33
Diluted earnings (loss) per share € 0.34 € 0.33
v2.1.0.1
Consolidated Statement of Comprehensive Income (EUR €)
In Millions
3 Months Ended
Mar. 31, 2011
Mar. 31, 2010
Consolidated statement of comprehensive income [abstract]
Profit (loss) after tax € 403 € 387
Exchange differences on translation [abstract]
Gains (losses) on exchange differences on translation, before tax (156) 131
Reclassification adjustments on exchange differences on translation, before tax 0 (7)
Exchange differences on translation (156) 124
Available-for-sale financial assets [abstract]
Gains (losses) on remeasuring available-for-sale financial assets, before tax (6) 6
Reclassification adjustments on available-for-sale financial assets, before tax 0 0
Available-for-sale financial assets (6) 6
Cash flow hedges [abstract]
Gains (losses) on cash flow hedges, before tax 30 (32)
Reclassification adjustments on cash flow hedges, before tax 9 5
Cash flow hedges 39 (27)
Actuarial gains (losses) on defined benefit plans, before tax 5 (5)
Other comprehensive income before tax (118) 98
Income tax relating to components of other comprehensive income (25) 12
Other comprehensive income after tax (143) 110
Comprehensive income 260 497
Comprehensive income attributable to [abstract]
Comprehensive income attributable to non-controlling interests 0 0
Comprehensive income attributable to owners of parent € 260 € 497
v2.1.0.1
Consolidated Statement of Financial Position (EUR €)
In Millions
Mar. 31, 2011
Dec. 31, 2010
Current assets [abstract]
Cash and cash equivalents € 4,477 € 3,518
Other current financial assets 252 158
Current trade and other receivables 3,214 3,099
Other current non-financial assets 210 181
Current tax assets 135 187
Total current assets 8,288 7,143
Non-current assets [abstract]
Goodwill 8,264 8,428
Intangible assets 2,218 2,376
Property, plant and equipment 1,443 1,449
Other non-current financial assets 446 475
Non-current trade and other receivables 75 78
Other non-current non-financial assets 30 31
Non-current tax assets 124 122
Deferred tax assets 722 737
Total non-current assets 13,322 13,696
Total assets 21,610 20,839
Current liabilities [abstract]
Trade and other payables 794 923
Current tax liabilities 77 164
Current financial liabilities 141 142
Other current non-financial liabilities 1,129 1,726
Provision TomorrowNow litigation 938 997
Other current provisions 360 290
Total Current Provisions 1,298 1,287
Current deferred income 2,773 911
Total current liabilities 6,212 5,153
Non-current liabilities [abstract]
Trade and other non-current payables 43 30
Non-current tax liabilities 403 369
Non-current financial liabilities 3,906 4,449
Other non-current non-financial liabilities 91 85
Non-current provisions 247 292
Deferred tax liabilities 562 574
Non-current deferred income 57 63
Total non-current liabilities 5,309 5,862
Total Liabilities 11,521 11,015
Equity [abstract]
Issued capital 1,228 1,227
Share premium 386 337
Retained earnings 10,159 9,767
Other components of equity (288) (142)
Treasury shares (1,406) (1,382)
Equity attributable to owners of parent 10,079 9,807
Non-controlling interests 10 17
Total equity 10,089 9,824
Total equity and liabilities € 21,610 € 20,839
v2.1.0.1
Consolidated Statement of Changes in Equity (EUR €)
In Millions
Equity attributable to owners of parent
Issued capital
Share premium
Retained earnings
Exchange differences
Available-for-sale financial assets
Cashflow Hedges
Treasury shares
Non-controlling interests
Total
Equity at beginning of period at Dec. 31, 2009 € 8,477 € 1,226 € 317 € 8,571 € (319) € 13 € (11) € (1,320) € 14 € 8,491
Comprehensive Income [abstract]
Profit (loss) after tax 387 387 387
Other comprehensive income after tax 110 124 6 (20) 110
Share-based compensation (1) (1) (1)
Issuance of shares under share-based payment programs 21 1 20 21
Purchase of treasury shares (120) (120) (120)
Reissuance of treasury shares under share-based payment programs 83 (5) 88 83
Equity at end of period at Mar. 31, 2010 8,957 1,227 331 8,958 (195) 19 (31) (1,352) 14 8,971
Equity at beginning of period at Dec. 31, 2010 9,807 1,227 337 9,767 (131) 16 (27) (1,382) 17 9,824
Comprehensive Income [abstract]
Profit (loss) after tax 403 403 403
Other comprehensive income after tax (143) 3 (169) (6) 29 (143)
Share-based compensation (13) (13) (13)
Issuance of shares under share-based payment programs 30 1 29 30
Purchase of treasury shares (158) (158) (158)
Reissuance of treasury shares under share-based payment programs 167 33 134 167
Other changes in Shareholders' Equity (14) (14) (7) (21)
Equity at end of period at Mar. 31, 2011 € 10,079 € 1,228 € 386 € 10,159 € (300) € 10 € 2 € (1,406) € 10 € 10,089
v2.1.0.1
Consolidated Statement of Cash Flows (EUR €)
In Millions
3 Months Ended
Mar. 31, 2011
Mar. 31, 2010
Cash flows from used in operating activities [abstract]
Profit (loss) after tax € 403 € 387
Adjustments for reconcile profit (loss) [abstract]
Depreciation and amortization 178 111
Income tax expense 180 134
Finance income and finance costs, net 14 0
Gains (losses) on disposals of non-current assets 1 1
Decrease (increase) in sales and bad debt allowances on trade receivables 21 21
Other adjustments for non-cash items (11) 6
Decrease (increase) in trade receivable (233) (915)
Decrease (increase) in other assets (105) (11)
Decrease (increase) in trade payable, provisions and other liabilities (593) (348)
Decrease (increase) in deferred income 1,944 1,592
Cash outflows due to TomorrowNow litigation (2) (5)
Interest paid (21) (12)
Interest received 20 11
Income taxes paid, net of refunds (204) (200)
Net cash flows from (used in) operating activities 1,592 772
Cash flows from used in investing activities [abstract]
Purchase of intangible assets and property, plant, and equipment (141) (57)
Proceeds from sales of intangible assets or property, plant and equipment 10 9
Purchase of equity or debt instruments of other entities (79) (318)
Proceeds from sales of equity or debt instruments of other entities 103 122
Net cash flows from (used in) investing activities (107) (244)
Cash flows from used in financing activities [abstract]
Purchase of non-controlling interests (21) 0
Purchase of treasury shares (158) (120)
Proceeds from reissuance of treasury shares 141 81
Proceeds from issuing shares (share-based compensation) 29 20
Proceeds from borrowings 2 1
Repayments of borrowings (504) 0
Proceeds from the exercise of equity-based derivative financial instruments 0 4
Purchase of equity-based derivative instruments (hedge for cash-settled share-based payment plans) 0 (14)
Net cash flows from (used in) financing activities (511) (28)
Effect of foreign exchange rate changes on cash and cash equivalents (15) 29
Net Increase (decrease) in cash and cash equivalents 959 529
Cash and cash equivalents at beginning of period 3,518 1,884
Cash and cash equivalents at end of period € 4,477 € 2,413
v2.1.0.1
Note 1 - General Information about Consolidated Financial Statements
3 Months Ended
Mar. 31, 2011
EUR (€)
Notes to Financial Statements [abstract]
Disclosure of general information about consolidated financial statements
(1) General Information About Consolidated Financial Statements
 
The accompanying consolidated financial statements of SAP AG and its subsidiaries (collectively, “we,” “us,” “our,” “SAP,” “Group,” and “Company”) have been prepared in accordance with the International Financial Reporting Standards (IFRSs). The designation “IFRS” includes all standards issued by the International Accounting Standards Board (IASB) and related interpretations issued by the International Financial Reporting Interpretations Committee (IFRIC). The variances between the applicable IFRS standards as issued by the IASB and the standards as used by the European Union are not relevant to these financial statements. The interim consolidated financial statements for the period ended March 31, 2011 are in compliance with International Accounting Standard (IAS) 34.
 
Certain information and disclosures normally included in notes to annual financial statements prepared in accordance with IFRS have been condensed or omitted. We believe that the disclosures made are adequate and that the information is not misleading.
 
Our business activities are influenced by certain seasonal effects. Historically, our overall revenue tends to be highest in the fourth quarter. Interim results are therefore not necessarily indicative of results for a full year.
 
We reclassified certain items in our Consolidated Financial Statements for 2010, as described in Note (3b). The Consolidated Financial Statements for 2010 are included in our 2010 Annual Report and our Annual Report 2010 on Form 20-F. Amounts reported in previous years have been reclassified as appropriate to conform to the current presentation. The adjustment of the allocation of the acquisition price also results in non-material changes to some of the amounts reported in previous years.
 
These unaudited condensed IFRS consolidated interim financial statements should be read in conjunction with SAP's audited consolidated IFRS financial statements and notes thereto as of December 31, 2010.
 
Due to rounding, numbers presented throughout this document may not add up precisely to the totals we provide and percentages may not precisely reflect the absolute figures.
v2.1.0.1
Note 2 - Scope of Consolidation
3 Months Ended
Mar. 31, 2011
EUR (€)
Notes to Financial Statements [abstract]
Disclosure of scope of consolidation
(2) Scope of Consolidation
 
The following table summarizes the change in the number of legal entities included in the consolidated financial statements:
Number of Legal Entities Consolidated
in the Financial Statements
 
German
Foreign
Total
January 1, 2010
19
144
163
Additions
4
58
62
Disposals
-2
-20
-22
December 31, 2010
21
182
203
Additions
1
1
2
Disposals
0
-2
-2
March 31, 2011
22
181
203
 
 
The additions in the first quarter of 2011 relate to legal entities added in connection with foundations. The disposals are due to mergers and to liquidations of non-operating acquired legal entities.
 
The changes in the scope of companies in 2010 impact the comparability with prior years and prior quarters. This is due to our acquisition of Sybase Inc. in the third quarter of 2010, which is significant to some items in the financial statements.
 
For additional information on our business combinations and the effect on our Consolidated Financial Statements, see note (4) in our Consolidated Financial Statements for 2010
v2.1.0.1
Note 3 - Summary of Significant Accounting Policies
3 Months Ended
Mar. 31, 2011
EUR (€)
Notes to Financial Statements [abstract]
Disclosure of summary of significant accounting policies
 
(3) Summary of Significant Accounting Policies
 
The interim financial statements were prepared based on the same accounting policies as those applied and described in the consolidated financial statements as at December 31, 2010. Our significant accounting policies are summarized in the notes to the annual financial statements. For further information, see note (3) in our Annual Report for 2010.
 
Newly Adopted Accounting Standards
 
The new accounting standards adopted in the first
three months of 2011 did not have a material impact on our consolidated financial statements.  
 
New Accounting Standards Not Yet Adopted
 
For detailed information about new accounting standards not yet adopted, see note (3) in our Annual Report for 2010.
v2.1.0.1
Note 4 - Business Combinations
3 Months Ended
Mar. 31, 2011
EUR (€)
Notes to Financial Statements [abstract]
Disclosure of business combinations
(4) Business Combinations
 
We acquired the following business in the first quarter of 2011:
 
Acquired Businesses
 
 
 
 
 
 
 
 
Business Acquired
Sector
Acquisi-tion Type
Acquired Voting Interest
Acquisi-tion Date
SECUDE AG, Emmetten, Switzer-land
SECUDE is a privately held entity engaged in IT security software products and  solutions.
Asset Purchase
100%
February 1, 2011
 
 
We acquire businesses in specific areas of strategic interest to us. The acquisition in the first quarter of 2011 was not material to SAP.
 
Acquisitions of the prior year are described in the
consolidated financial statements for 2010 in our 2010 Annual Report.
 
 
 
 
v2.1.0.1
Note 5 - Expenses by Nature and Headcount
3 Months Ended
Mar. 31, 2011
EUR (€)
Notes to Financial Statements [abstract]
Disclosure of expenses by nature and headcount
(5) Employee Benefits Expense and Headcount
 
Employee benefits expense comprises the following:
 
 
 
 
 
 
Employee Benefits Expense
 
 
 
 
 
€ millions
Q1 2011
Q1 2010
Salaries
1,168
965
Social security expense
178
162
Pension expense
54
48
Share-based payment expense
52
5
Termination benefits
14
26
Employee Benefits Expense
1,466
1,206
 
 
 
On March 31, 2011, the breakdown of our full-time equivalent employee numbers by function in SAP and by region was as follows:
 
 
 
 
 
Number of Employees (in Full-Time Equivalents)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
March 31, 2011
March 31, 2010
Full-time equivalents
EMEA
Americas
Asia Pacific Japan
Total
EMEA
Americas
Asia Pacific Japan
Total
Software and software-related services
3,861
1,907
2,397
8,165
3,238
1,366
1,981
6,585
Professional services and other services
6,842
3,944
2,445
13,231
6,435
3,457
2,218
12,110
Research and development
8,694
3,170
4,054
15,918
8,435
2,532
3,709
14,676
Sales and marketing
4,584
4,158
2,175
10,917
4,183
3,572
1,751
9,506
General and administration
2,036
1,034
520
3,590
1,923
719
422
3,064
Infrastructure
1,163
621
267
2,051
1,041
414
202
1,657
SAP Group (March 31)
27,180
14,834
11,858
53,872
25,255
12,060
10,283
47,598
 
 
 
 
 
 
 
 
 
SAP Group (average first three months)
27,136
14,842
11,821
53,799
25,240
12,027
10,265
47,532
 
 
 
The allocations of expenses for share-based compensation to the various expense items are as follows:
Share-Based Compensation
 
 
€ millions
Q1 2011
Q1 2010
Cost of software and software-related services
-4
-1
Cost of professional services and other services
-8
0
Research and development
-17
-1
Sales and marketing
-12
-1
General and administration
-11
-2
Total share-based compensation
-52
-5
 
v2.1.0.1
Note 6 - Income Tax
3 Months Ended
Mar. 31, 2011
EUR (€)
Notes to Financial Statements [abstract]
Disclosure of income tax
(6) Income Tax
 
In the first quarter of 2011, income taxes and the effective tax rate, each compared with the first quarter of 2010, developed as follows:
Income Taxes
 
 
€ millions, unless stated otherwise
Q1
2011
Q1
2010
Profit before income tax
583
521
Income tax expense
-180
-134
Effective tax rate in %
30.9
25.7
 
v2.1.0.1
Note 7 - Earnings per Share
3 Months Ended
Mar. 31, 2011
EUR (€)
Notes to Financial Statements [abstract]
Disclosure of earnings per share
(7) Earnings per Share
Diluted earnings per share (EPS) does not include certain convertible bonds and stock options issued in connection with the LTI 2000 Plan and SAP SOP 2002, because their underlying exercise prices were higher than the average market prices of SAP shares in the periods presented. Such convertible bonds and stock options, if converted or exercised, represent 5.3 million SAP common shares on March 31, 2011, and 22.4 million SAP common shares on March 31, 2010.
Starting in the third quarter of 2010, diluted EPS includes the dilutive effect of bonus shares granted under Share Matching Plan 2010.
 
 
 
Earnings per Share
 
 
€ millions, unless otherwise stated
Q1 2011
Q1 2010
Profit attributable to owners of parent
403
387
Issued ordinary shares
1,227
1,226
Effect of treasury shares
-39
-37
Weighted average number of shares in millions - basic
1,188
1,189
Dilutive effect of stock options in millions
1
1
Weighted average number of shares in millions - diluted
1,189
1,190
 
 
 
Basic earnings per share,          in €
0.34
0.33
Diluted earnings per share, in €
0.34
0.33
 
v2.1.0.1
Note 8 - Other Financial Assets
3 Months Ended
Mar. 31, 2011
EUR (€)
Notes to Financial Statements [abstract]
Other Financial Assets
(8) Other Financial Assets
 
Other financial assets comprise:
 
Other Financial Assets
 
 
 
 
March 31, 2011
€ millions
Current
Non-Current
Total
Loans and other financial receivables
44
292
336
   Debt investments
0
0
0
   Equity investments
0
118
118
Available-for-sale financial assets
0
118
118
Derivates
208
0
208
Investments in associates
0
36
36
Total
252
446
698
 
 
 
 
 
December 31, 2010
€ millions
Current
Non-Current
Total
Loans and other financial receivables
42
328
370
   Debt investments
0
0
0
   Equity investments
0
107
107
Available-for-sale financial assets
0
107
107
Derivates
116
0
116
Investments in associates
0
40
40
Total
158
475
633
 
v2.1.0.1
Note 9 - Trade and Other Receivables
3 Months Ended
Mar. 31, 2011
EUR (€)
Notes to Financial Statements [abstract]
Disclosure of trade and other receivables
(9) Trade and Other Receivables
 
Trade and other receivables comprise:
Trade and Other Receivables
 
 
 
 
 
 
 
March 31, 2011
€ millions
Current
Non-current
Total
Trade receivables, net
3,180
0
3,180
Other receivables
34
75
109
Total trade and other receivables
3,214
75
3,289
 
 
 
 
 
 
 
December 31, 2010
€ millions
Current
Non-current
Total
Trade receivables, net
3,031
0
3,031
Other receivables
68
78
146
Total trade and other receivables
3,099
78
3,177
 
 
The carrying amounts of our trade receivables and related allowances were as follows:
 
Carrying Amounts of Trade Receivables
 
 
 
€ millions
March 31, 2011
December 31, 2010
Gross carrying amount
3,350
3,187
Sales allowances charged to revenue
-124
-112
Allowance for doubtful accounts charged to expense
-46
-44
Carrying amount trade receivables, net
3,180
3,031
 
 
In our Consolidated Income Statement, bad debt allowances for a portfolio of trade receivables are recorded as other operating expense, whereas bad debt allowances for specific customer balances are recorded in cost of software and software-related services or cost of professional services and other services, depending on the transaction from which the trade receivable results. Sales allowances are recorded as an offset to the respective revenue item.
 
v2.1.0.1
Note 10 - Financial Liabilities
3 Months Ended
Mar. 31, 2011
EUR (€)
Notes to Financial Statements [abstract]
Disclosure of Financial Liabilities
(10) Financial Liabilities
 
Financial liabilities comprise:
Financial Liabilities
 
 
 
 
 
 
 
March 31, 2011
€ millions
Current
Non-current
Total
Bank loans
3
599
602
Private placement transactions
0
1,047
1,047
Bonds
0
2,192
2,192
Other financial liabilities
138
68
206
Financial liabilities
141
3,906
4,047
 
 
 
 
 
 
 
December 31, 2010
€ millions
Current
Non-current
Total
Bank loans
1
1,098
1,099
Private placement transactions
0
1,069
1,069
Bonds
0
2,191
2,191
Other financial liabilities
141
91
232
Financial liabilities
142
4,449
4,591
 
v2.1.0.1
Note 11 - Shareholders Equity
3 Months Ended
Mar. 31, 2011
EUR (€)
Notes to Financial Statements [abstract]
Disclosure of Shareholders equity
(11) Total Equity
 
Issued Shares
 
As at March 31, 2011, SAP AG had 1,227,593,197 no-par issued shares (December 31, 2010: 1,226,822,697) issued with a calculated nominal value of €1 per share.
 
In the first quarter of 2011, the number of issued shares increased by 770,500 shares (Q1 2010: 620,612), resulting from the exercise of awards granted under certain share-based compensation programs.
 
Treasury Shares
 
On March 31, 2011, we held 39 million treasury shares, representing €39 million or 3.2% of capital stock.
 
In the first quarter of 2011, we acquired 3.6 million shares for treasury at an average price of approximately €43.84 per share and disposed of 3.8 million shares with a purchase price of approximately €35.44 per share. Stock purchases and stock sales were mainly in connection with our stock option plans, which are described in Note (28) in our Annual Report for 2010.
 
In the first quarter of 2010, we acquired 3.5 million shares at an average price of approximately €33.99 per share and we disposed of 2.5 million shares with a purchase  price of approximately €35.42 per share. Stock purchases and stock sales were mainly in connection with our stock option plans, which are described in Note (28) in our Annual Report for 2010.
 
We do not have any dividend or voting rights associated with our treasury stock. In the first quarters of 2011 and 2010 we did not purchase any SAP American Depositary Receipts (ADRs). We did not hold any SAP ADRs on March 31, 2011, or on March 31, 2010.
v2.1.0.1
Note 12 - Other Financial Commitments and Contingent Liabilities
3 Months Ended
Mar. 31, 2011
EUR (€)
Notes to Financial Statements [abstract]
Disclosure of other financial commitments and contingent liabilities
(12) Contingent Liabilities
 
For a detailed description of our contingent liabilities, see our Annual Report 2010, Notes to the Consolidated Financial Statements section, Note (23). There have been no significant changes in contingent liabilities since December 31, 2010.
 
For information about contingent liabilities related to litigation, see Note (13).
v2.1.0.1
Note 13 - Litigation and Claims
3 Months Ended
Mar. 31, 2011
EUR (€)
Notes to Financial Statements [abstract]
Disclosure of litigation and claims
(13) Litigation and Claims
 
We are subject to a variety of claims and lawsuits that arise from time to time in the ordinary course of our business, including proceedings and claims that relate to companies which we have acquired, and claims that relate to customers demanding indemnification for proceedings initiated against them based on their use of SAP software. We will continue to vigorously defend against all claims and lawsuits against us. We record a provision for such matters when it is probable that we have a present obligation that results from a past event, is reliably estimable and the settlement of which is probable to require an outflow of resources embodying economic benefits. For the TomorrowNow litigation, we have recorded a provision of €997 million. We currently believe that resolving all other claims and lawsuits against us, individually or in the aggregate, did not and will not have a material adverse effect on our business, financial position, profit, or cash flows. Consequently, the provisions currently recorded for these other claims and lawsuits are neither individually nor in aggregate material to SAP.
 
However, all claims and lawsuits involve risk and could lead to significant financial and reputational damage to the parties involved. Because of significant inherent uncertainties related to these matters, there can be no assurance that our business, financial position, profit or cash flows will not be materially adversely affected nor can we reliably estimate the maximum possible loss in case of an unfavorable outcome.
 
For a description of the development of the provisions recorded for litigation, see Note (19b) in our Annual Report 2010.
 
Among the claims and lawsuits are the following:
 
Intellectual Property Litigation
 
In January 2007, German-based CSB-Systems AG (CSB) instituted legal proceedings in Germany against SAP. CSB alleges that SAP's products infringe one or more of the claims of a German patent and a German utility model held by CSB. In its complaint, CSB has set the amount in dispute at €1 million and is seeking permanent injunctive relief. Within these proceedings CSB is not precluded from requesting damages in excess of the amount in dispute. In July 2007, SAP filed its response in the legal proceedings including a nullity action and cancellation proceeding against the patent and utility model, respectively. The nullity hearing on the German patent was held in January 2009 and the German court determined that the patent is invalid. The cancellation hearing for the utility model was held in May 2009 and the court determined that the utility model was invalid. CSB is appealing, however, the infringement hearing has been stayed pending the appeals.
 
In May 2010, CSB-Systems International, Inc. (CSB) instituted legal proceedings in the United States against SAP. CSB alleges that SAP's products infringe one or more of the claims in one patent held by CSB. In its complaint, CSB seeks unspecified monetary damages and permanent injunctive relief. The trial is scheduled for December 2011.
 
In March 2007, United States-based Oracle Corporation and certain of its subsidiaries (Oracle) instituted legal proceedings in the United States against TomorrowNow, Inc., its parent company SAP America, Inc. and SAP America's parent company SAP AG (SAP). Oracle filed several amended complaints between 2007 and 2009. As amended, the lawsuit alleges copyright infringement, violations of the Federal Computer Fraud and Abuse Act and the California Computer Data Access and Fraud Act, unfair competition, intentional and negligent interference with prospective economic advantage, and civil conspiracy. The lawsuit alleges that SAP unlawfully copied and misappropriated proprietary, copyrighted software products and other confidential materials developed by Oracle to service its own customers. The lawsuit seeks injunctive relief and monetary damages, including punitive damages, alleged by Oracle to be in the billions of U.S. dollars. The trial was held in November 2010. Prior to trial, SAP AG, SAP America and TomorrowNow stipulated to liability for certain claims, and SAP agreed to pay Oracle US$120 million for attorneys´ fees. After the trial, the jury returned a damages verdict of US$1.3 billion. The judgment which was issued on February 3, 2011, additionally provides for prejudgment interest of US$15 million. The judgment amount is also subject to post-judgment interest which accrues from the time judgment is entered.
 
The jury based its verdict on the theory of a hypothetical license, that is, the value of what TomorrowNow would have paid if it had negotiated with Oracle a license for the copyrights infringed by TomorrowNow. Before and during the course of the trial, various damages amounts had been presented by the parties to the litigation. They included the following:
 
a) Before the trial, Oracle had requested damages in excess of US$3.5 billion based on alleged “saved acquisition costs”; the court dismissed that damage claim based on a pretrial motion, but Oracle has the right to appeal that dismissal.
 
b) During the trial, Oracle's damages experts presented an amount of US$408 million based on lost profits and disgorgement of infringer's profit.
 
c) During the trial, members of Oracle management presented, as part of their testimonies, amounts of up to US$5 billion. Oracle's damages expert presented a damages estimate of “at least” US$1,655,600,000 under a hypothetical license theory. Oracle's counsel asked the jury to award “somewhere between US$1.65 and US$3 billion.”
 
d) During the trial, the damages expert for TomorrowNow and SAP presented an amount of US$28 million based on lost profits and infringer's profits or, alternatively, US$40.6 million based on a hypothetical license theory. Counsel for SAP and TomorrowNow asked the jury to award US$28 million.
 
We believed both before and during the trial and continue to believe that the hypothetical license theory is not an appropriate basis for calculating the damages. Instead, we believe that damages should be based on lost profits and infringer's profits. As of the date of this report, SAP has filed post-trial motions that ask the judge to overturn the judgment. The hearing on the post-trial motions is scheduled for July 2011. Based on the outcome of the post-trial motions, SAP will decide whether to appeal.
Additionally, in June 2007, SAP became aware that the United States Department of Justice (U.S. DOJ) had opened an investigation concerning related issues and had issued subpoenas to SAP and TomorrowNow. SAP and TomorrowNow are cooperating with the investigation and are responding to the original subpoenas and additional subpoenas issued by the Department of Justice.
 
In April 2007, United States-based Versata Software, Inc. (formerly Trilogy Software, Inc.) (Versata) instituted legal proceedings in the United States against SAP. Versata alleges that SAP's products infringe one or more of the claims in each of five patents held by Versata. In its complaint, Versata seeks unspecified monetary damages and permanent injunctive relief. The trial was held in August 2009. The jury returned a verdict in favor of Versata and awarded Versata US$138.6 million for past damages. In January 2011, the court vacated the jury's damages award and ordered a new trial on damages in May 2011.
 
In August 2007, United States-based elcommerce.com, Inc. (elcommerce) instituted legal proceedings in the United States against SAP. elcommerce alleges that SAP's products infringe one or more of the claims in one patent held by elcommerce. In its complaint, elcommerce seeks unspecified monetary damages and permanent injunctive relief. The court in East Texas granted SAP's request to transfer the litigation from East Texas to Pennsylvania. Subsequent to the Markman ruling by the court, the parties agreed to the entry of final judgment regarding non-infringement by SAP.  elcommerce has the right to appeal the court's Markman ruling.
 
In February 2010, United States-based TecSec, Inc. (TecSec) instituted legal proceedings in the United States against SAP, Sybase, IBM and many other defendants. TecSec alleges that SAP's products infringe one or more of the claims in five patents held by TecSec. In its complaint, TecSec seeks unspecified monetary damages and permanent injunctive relief. The trial has not yet been scheduled. The legal proceedings have been stayed against all defendants pending the outcome of an appeal by TecSec regarding the court's determination that IBM does not infringe the patents.
 
In April 2010, SAP instituted legal proceedings (a Declaratory Judgment action) in the United States against Wellogix, Inc. and Wellogix Technology Licensing, LLC (Wellogix). The lawsuit seeks a declaratory judgment that five patents owned by Wellogix are invalid and/or not infringed by SAP. The trial has not yet been scheduled. The legal proceedings have been stayed pending the outcome of re-examinations filed with the U.S. Patent and Trademark Office.
 
Other Litigation
 
In April 2008, South African-based Systems Applications Consultants (PTY) Limited (Securinfo) instituted legal proceedings in South Africa against SAP. Securinfo alleges that SAP has caused one of its subsidiaries to breach a software distribution agreement with Securinfo. In its complaint, Securinfo seeks damages of approximately €610 million plus interest. In September 2009, SAP filed a motion to dismiss. The trial has been scheduled for June 2011.
v2.1.0.1
Note 14 - Share-Based Payment Plans
3 Months Ended
Mar. 31, 2011
EUR (€)
Notes to Financial Statements [abstract]
Disclosure of share-based payment arrangements explanatory
(14) Share-Based Payment Plans
 
For a detailed description of our share-based compensation plans, see the SAP Annual Report 2010, Notes to the Consolidated Financial Statements section, Note (28), or our Annual Report 2010 on Form 20-F.
 
In February 2011, we issued a share-based compensation plan to motivate and retain key employees of Sybase, Inc. Under the new Sybase-Plan (Sybase 2011), we granted 305,000 restricted stock units (RSU), representing a contingent right to receive a cash payment determined by the market value of the same number of shares of SAP AG. The percentage of RSU, if any, that will vest will be determined based on percentage achievements of certain specified one year performance targets for Sybase.
 
The outstanding equity-settled options, convertible bonds, and SMPs entitle their holders to the following numbers of shares:
Outstanding Options,  Convertible Bonds and Restricted Stocks
number in thousands
March 31, 2011
December 31, 2010
Stock Option Plan 2002
0
5,342
Long Term Incentive 2000 Plan
(convertible bonds)
3,527
15,889
Long Term Incentive 2000 Plan
(stock options)
909
1,680
Share Matching Plan 2010
(Bonus shares)
556
564
 
 
 
v2.1.0.1
Note 15 - Financial Instruments
3 Months Ended
Mar. 31, 2011
EUR (€)
Notes to Financial Statements [abstract]
Disclosure of financial instruments
(15) Other Financial Instruments
 
A detailed overview of our other financial instruments, financial risk factors and the management of financial risks are presented in notes (25) to (27) to our consolidated financial statements for 2010, which are included in our Annual Report 2010 and our Annual Report 2010 on Form 20-F.
 
v2.1.0.1
Note 16 - Segment and Geographic Information
3 Months Ended
Mar. 31, 2011
EUR (€)
Notes to Financial Statements [abstract]
Disclosure of entity's reportable segments explanatory
(16) Segment and Geographic Information
 
For information about the basis of SAP's segment reporting and for information on SAP's operating segments, see the SAP Annual Report 2010, Notes to the Consolidated Financial Statements section, Note (29).
 
The following tables present external revenue and profit from our reportable segments, a reconciliation of total external revenue from reportable segments to total consolidated revenue as reported in the IFRS consolidated income statements, and a reconciliation of total segment profit to profit before taxes as reported in the consolidated income statements.
We acquired Sybase on July 26, 2010. Therefore, there are no Sybase numbers disclosed in the first quarter of 2010 for external revenue and profit.
 
External Revenue and Results from Reportable Segments
 
 
 
 
 
Q1 2011
€ millions
Product
Con-sulting
Training
Sybase
Total
External revenue from reportable segments
2,059
694
76
205
3,034
Segment profit from reportable segments
1,155
175
23
47
1,400
Depreciation and amortization
-5
-2
0
-4
-11
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Q1 2010
€ millions
Product
Consul-ting
Training
Sybase
Total
External revenue from reportable segments
1,842
588
73
0
2,503
Segment profit from reportable segments
1,054
148
22
0
1,224
Depreciation and amortization
-4
-2
0
0
-6
 
 
 
 
Reconciliation of Revenues and Segment Results
€ millions
Q1
2011
Q1
2010
External revenue from reportable segments
3,034
2,503
External revenue from services provided outside of the reportable segments
7
6
Adjustment support revenue
-17
0
Total revenue
3,024
2,509
 
 
 
Segment profit from reportable segments
1,400
1,224
External revenue from services provided outside of the reportable segments
7
6
Development expense, not included in the segment result - management view
-429
-438
Administration and other corporate expenses, not included in the segment result - management view
-198
-176
Share-based payment expense
-52
-5
Adjustment support revenue
-17
0
Acquisition-related charges
-112
-54
Loss from discontinued operations
-2
0
Operating profit
597
557
Other non-operating income/expense, net
0
-36
Finance income, net
-14
0
Profit before tax
583
521
 
 
Geographic Information
 
The amounts for sales by destination in the following tables are based on the location of customers.
 
Software Revenue by Sales Destination
 
 
 
 
€ millions
Q1
2011
Q1
2010
 
EMEA1)
251
218
 
Americas
231
171
 
APJ2)
101
74
 
SAP Group
583
463
 
 
 
 
 
1) Europe, Middle East, and Africa
 
 
2) Asia Pacific Japan
 
 
 
 
 
Software and Software-Related Service Revenue by Sales Destination
 
 
 
€ millions
Q1
2011
Q1
2010
Germany
331
310
Rest of EMEA
795
691
Total EMEA
1,126
1,001
United States
620
471
Rest of Americas
222
192
Total Americas
842
663
Japan
124
98
Rest of APJ
236
185
Total APJ
360
283
SAP Group
2,327
1,947
 
 
Revenue by Sales Destination
 
 
 
 
€ millions
Q1
2011
Q1
2010
Germany
485
444
Rest of EMEA
997
859
EMEA
1,482
1,302
United States
819
620
Rest of Americas
292
247
Americas
1,111
867
Japan
140
111
Rest of APJ
291
229
APJ
431
340
SAP Group
3,024
2,509
 
v2.1.0.1
Note 17 - Related Party Transactions
3 Months Ended
Mar. 31, 2011
EUR (€)
Notes to Financial Statements [abstract]
Disclosure of related party
(17) Related Party Transactions
 
Certain Executive Board and Supervisory Board members of SAP AG currently hold (or have held within the last year) positions of significant responsibility with other entities (see the SAP Annual Report 2010, Notes to the Consolidated Financial Statements section, Note (30)). We have relationships with certain of these entities in the ordinary course of business whereby we buy and sell a wide variety of services and products at prices believed to be consistent with those negotiated at arm's length between unrelated parties.
During the reporting period we had no related party transactions that had a material effect on our business, financial position, or results in the reporting period.
 
For further information on related party transactions, see the SAP Annual Report 2010, Notes to the Consolidated Financial Statements section, Note (31).
 
Release of the Interim Financial Statements
 
The SAP Chief Financial Officer on behalf of the Executive Board approved these Consolidated Interim Financial Statements for the first quarter of 2011 on April 27, 2011, for submission to the Audit Committee of the Supervisory Board and for subsequent issuance.
v2.1.0.1
Document Information
3 Months Ended
Mar. 31, 2011
EUR (€)
[DocumentInformationLineItems]
Document Type 20-F
Document Period End Date 2011-03-31
Amendment Flag false
Document Fiscal Period Focus Q1
Document Fiscal Year Focus 2,011
v2.1.0.1
Entity Information
3 Months Ended
Mar. 31, 2011
EUR (€)
Mar. 31, 2011
EUR (€)
[EntityInformationLineItems]
Entity Registrant name SAP AG
Entity Central Index key 0000943042
Entity filer category Large Accelerated Filer
Entity current reporting status Yes
Entity Voluntary Filers Yes
Current Fiscal Year End Date --12-31
Entity Well Known Seasoned Issuer No
Entity Common Stock Shares Outstanding 1,227,593,197
Trading Symbol SAP