Sap 2013 Annual Report

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2013
ANNUAL REPORT
The Best-Run Businesses Run SAP

WHAT WE REPORT
We present our fnancial, social, and
environmental performance in the
SAP Integrated Report 2013, which is
available at sapintegratedreport.com.
This Annual Report 2013 is an extract
from the SAP Integrated Report 2013.
It comprises all of the information
required by accounting and disclosure
standards applicable to us.
Key Facts
Performance Summary
millions, unless otherwise stated
2013 2012 Change
in %
Financial key performance indicators
Software and cloud subscriptions (IFRS) 5,212 4,928 6
Non-IFRS adjustments 63 73 14
Software and cloud subscriptions (non-IFRS) 5,275 5,001 5
Software and software-related service revenue (IFRS) 13,950 13,165 6
Software and software-related service revenue (non-IFRS) 14,032 13,246 6
Total revenue (IFRS) 16,815 16,223 4
Total revenue (non-IFRS) 16,897 16,304 4
Operating profit (IFRS) 4,479 4,041 11
Non-IFRS adjustments 1,035 1,148 10
Operating profit (non-IFRS) 5,514 5,190 6
Operating margin as a percentage (IFRS) 26.6 24.9 7
Operating margin as a percentage (non-IFRS) 32.6 31.8 3
Free cash flow 3,266 3,281 0
Net liquidity 1,467 2,502 41
Days sales outstanding (DSO, in days) 62 59 5
Equity ratio (total equity as a percentage of total assets) 59 54 10
Operating expenses
Research and development 2,282 2,261 1
Research and development (as a percentage of total revenue) 14 14 0
Number of employees in research and development at year-end
1)
17,804 18,012 1
Financial performance measures
Weighted average shares outstanding, basic (in millions) 1,193 1,192 0
Earnings per share, basic (in ) 2.79 2.35 19
Dividend per ordinary share (in ) 1.00 0.85 18
SAP share price at year-end (in ) 62.31 60.69 3
Market capitalization (in billions) 76.5 74.7 2
Performance Summary
2013 2012 Change
in %
Employees and personnel expenses
Number of employees at year-end
1)
66,572 64,422 3
Personnel expenses per employee excluding share-based payments (in thousands) 109 111 1
Women working at SAP (as a percentage) 31 30 3
Women in management
2)
(total, as a percentage) 21.2 20.8 2
Employee Engagement Index (as a percentage) 77 79 3
Business Health Culture Index (as a percentage) 67 66 2
Employee retention (as a percentage) 93.5 94.0 1
Environment
Greenhouse gas emissions (in kilotons) 545 485 12
Greenhouse gas emissions per employee
1)
(in tons) 8.3 7.9 5
Greenhouse gas emissions per revenue (in grams) 32.4 30.0 8
Total energy consumption (in GWh) 910 860 6
Energy consumed per employee
1)
(in kWh) 13,900 14,000 1
Data center energy consumed (in GWh) 173 160 8
Data center energy per employee
1)
(in kWh) 2,633 2,598 1
Renewable energy sourced (as a percentage) 43 51 16
Customers
Net Promoter Score (as a percentage) 12.1 8.9 36
1)
Full-time equivalents
2)
Numbers based on year-end
1
WHO WE ARE
More than 253,500 customers use
SAP innovations such as the SAP HANA
platform and SAP Cloud powered by
SAP HANA to meet complex business
challenges and operate proftably, adapt
continuously, and grow sustainably. SAP
empowers people and organizations to
work together more efficiently and use
real-time business insight more efec-
tively. By empowering companies of all
sizes and in all industries to make a
diference, SAP helps the world run better
and improve peoples lives.
Contents
To Our Stakeholders
Combined Management
Report
Financial Statements
Additional Information
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51
161
283
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To Our Stakeholders
Letter from the Co-CEOs
Global Managing Board
Investor Relations
Corporate Governance Report
Report from the Supervisory Board
Compensation Report
Responsibility Statement
Independent Auditors Report
Combined Management Report
General Information About This
Management Report
Overview of the SAP Group
Vision, Mission, and Strategy
Business Model
Portfolio of Products, Solutions, and Services
Customers
Research and Development
Partner Ecosystem
Acquisitions
Employees and Social Investments
Energy Consumption and Greenhouse Gas Emissions
Internal Management System
Economy and the Market
Report on Economic Position
Report on the Economic Position of SAP AG
Overall Financial Position
Corporate Governance
Information Concerning Takeovers
Opportunity Report
Risk Report
Supplementary Report
Report on Expected Developments
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Consolidated Financial Statements IFRS
Consolidated Income Statements
Consolidated Statements of
Comprehensive Income
Consolidated Statements
of Financial Position
Changes in Equity
Cash Flows
Notes to the Consolidated Financial
Statements
Managements Annual Report on Internal
Control over Financial Reporting in the
Consolidated Financial Statements
Five-Year Summary
Glossary
Addresses
Financial and Sustainability Publications
Financial Calendar
Publication Details
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Overview of
SAP Group
With more than 253,500
customers in over
180 countries, the SAP Group
employs more than
66,500 people in major
countries.
To learn more about the SAP Group please visit www.sapintegratedreport.com
To Our Stakeholders
Investor Relations
Compensation Report
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6 To Our Stakeholders
From left: Jim Hagemann Snabe, Co-CEO; Bill McDermott, Co-CEO
Dear Stakeholders,
In 2010, we launched our customer-centric innovation strategy based on a strong conviction
that yesterdays technologies could not solve tomorrows challenges.
We listened to our customers that wanted to adopt innovation faster, analyze unprecedented
amounts of data, reach their customers and consumers across all channels, and manage their
mobile workers. In response, we expanded our portfolio by investing in cloud-based solutions
and mobile technology and by introducing SAP HANA, our game-changing in-memory
technology.
Now, in 2014, it is clear that our strategy was the right one. Today, cloud, mobile, and Big Data
are the dominant themes in the IT industry. With four consecutive years of double-digit growth,
our success is evident. We are the fastest-growing mega-cap company in the enterprise software
industry. For 2013, we reported 16.9 billion non-IFRS total revenue, with 11% constant currency
growth in software and cloud subscription revenue (5% at actual currencies). In the same period,
our non-IFRS operating margin increased to 33.5% at constant currencies (32.6% at actual
currencies). We have more than 253,500 customers from companies of all sizes, across
25 industries, in mature as well as emerging markets.
With the market position and innovation pipeline we have today, we now have a unique opportunity
to deliver signifcantly more value to our customers and reshape the technology landscape for
lower cost and higher performance.

The trends we identifed in 2010 have only accelerated, and we remain focused and determined
to win in rapidly growing areas, especially in cloud and in-memory technology. Our SAP HANA
technology has evolved from a real-time database to a true in-memory platform. SAP HANA now
allows companies to radically simplify their IT infrastructure. In 2013, we put our entire SAP
Business Suite on SAP HANA. Going forward, our software portfolio and the innovations of our
partner ecosystem will be built on the foundation of SAP HANA. In the three years since its
launch, SAP HANA has generated nearly 1.2 billion in revenue and has become one of the fastest-
growing products in the history of enterprise software. In 2013 alone, SAP HANA generated
664 million in revenue, which is an increase of 69% over the previous year at constant currencies.

7 Letter from the Co-CEOs
Cloud computing has now become mainstream and is a widely accepted delivery model in the
United States, and increasingly in Asia and Europe. The cloud ofers an unprecedented opportunity
to simplify software delivery and speed to value as customers get immediate access to innovation.
Our annual cloud revenue run rate reached 1.06 billion at the end of 2013. For the year, we
reported 757 million non-IFRS cloud subscription and support revenue. Today, SAP Cloud
powered by SAP HANA is the broadest cloud portfolio in the industry. More than 35 million users
work with our solutions in the cloud, and approximately 1.4 million companies trade over half a
trillion U.S. dollars of goods and services through our cloud-based Ariba Network.

Our strategy was always embedded in a higher purpose and vision to help the world run better
and improve peoples lives. In a world of limited resources, we are proud that, with our solutions,
10 million people in South Africa now have access to banking services with their mobile phones,
urban governments in more than 50 countries deliver better services to their citizens, and people
in more than 21 countries have easier access to education. In addition, we continue to uphold
our commitment to the United Nations Global Compact.
Our non-fnancial performance indicators remained strong in 2013: We increased our
Net Promoter Score by 3.2 percentage points. We also reduced our carbon footprint by 9% since
the beginning of 2008. And, for the seventh time in a row, we have been ranked the number
one software company in the Dow Jones Sustainability Index. As more customers choose our
cloud solutions and our data centers grow, our total energy use will also increase. In 2014, we
are addressing this growth by powering all of our data centers with 100% renewable energy.
Moreover, we achieved an employee engagement score of 77%, which is among the highest
benchmarks for this indicator. We are especially proud of our more than 66,500 employees, and
thank them wholeheartedly for their hard work and innovative spirit.

Our momentum and strong foundation allows us to be bold about our future and set ambitious
goals. By 2017, we expect to deliver at least 22 billion in total revenue (thereof 3.03.5 billion
from our cloud business). To capture the growth in the cloud, we have extended the time horizon
for our 35% operating margin target to 2017. Further, we aim to increase customer loyalty
by another four percentage points in 2014. In addition, we remain committed to increasing our
already high level of employee engagement to 82% by 2015.

In a world of increasing velocity, innovation is imperative. But innovation must never lose sight
of the human spirit, which craves simplicity and clarity. That is why our focus now is to simplify
everything so we can do anything. With this guiding principle, we believe SAP is positioned
to deliver proftable growth and to continue our vision of helping the world run better while
improving peoples lives.
Best regards,
Bill McDermott Jim Hagemann Snabe
Co-CEO, SAP AG Co-CEO, SAP AG
9 Letter from the Co-CEOs
DR. WERNER BRANDT
Chief Financial Ofcer, Labor Relations Director and
Member of the Executive Board of SAP AG
Joined SAP: 2001
Appointed to Executive Board: 2001
ROBERT ENSLIN
Member of the Global Managing Board of SAP AG,
President, Global Customer Operations
Joined SAP: 1992
BILL MCDERMOTT
Co-Chief Executive Ofcer and
Joined SAP: 2002
JIM HAGEMANN SNABE
Co-Chief Executive Ofcer and
Joined SAP: 1990
To our Stakeholders 10
GERHARD OSWALD
Member of the Executive Board of SAP AG,
Board Area Scale Quality & Support
Joined SAP: 1981
DR. VISHAL SIKKA
Member of the Executive Board of SAP AG,
Board Area Products & Innovation
Joined SAP: 2002
BERND LEUKERT
Head of Application Innovation
Joined SAP: 1994
LUKA MUCIC
Head of Global Finance
Joined SAP: 1996
Global Managing Board 11
SAP stock came under pressure at the start of April as the
markets weakened. It picked up momentum again after we
announced our frst-quarter results on April 19, and, with the
markets rallying, reached 64.05, its high for the quarter, on
May 15. Disappointing economic growth fgures for China, the
announcement of personnel changes on the SAP Executive
Board, and the ex-dividend price adjustment after the Annual
General Meeting of Shareholders on June 4 then caused the
price to fall. It recovered soon after when SAP announced that
it would acquire hybris.
The share price fell in the second half of July, and traded at
55.12 on July 23. On July 18 we published our second-quarter
results and adjusted our revenue guidance for 2013, due to
the industry transformation in the cloud business. The SAP
Supervisory Board proposed Jim Hagemann Snabe, who had
announced that he would step down as co-CEO, to the Annual
General Meeting of Shareholders in May 2014 as a candidate for
Supervisory Board membership. The after-efects of SAP's
adjusted revenue outlook coupled with a general reluctance to
invest in the software sector pushed the share price down to
53.42 on September 5, its lowest level of the quarter.
At the beginning of October, investor worries ahead of our
third-quarter results and weak market sentiment pushed the
share price down to its lowest level for the year of 52.20 on
October 9. After we confrmed our outlook guidance on Octo-
ber 21 and announced another quarter of double-digit growth,
the share price passed the 60.00 mark in the second half
of November. The market also welcomed the news that SAP
would tap into China's cloud market through a joint venture
with China Telecom. After proft-taking in early December, a
general year-end rally began mid-month that lifted the DAX to
a new all-time high on December 27. Buoyed by this, the SAP
share price climbed to fnish the year at 62.31.
On January 21, 2014, SAP published its preliminary fourth-
quarter and full-year results for 2013 and announced it had
pushed back the target date for operating margin to help
capture growth opportunities in the cloud. SAP now expects
to reach its non-IFRS operating margin goal of 35% by 2017
rather than in 2015 as previously stated. Investors reacted to
the news with caution, causing SAP stock to fall to 59.62.
After signifcantly outperforming the major indexes in 2012,
SAP stock increased 2.7% in 2013, while the DAX index
increased 25.5%. Throughout the year SAP was in continuous
dialog with investors about our strategy for innovation and
growth. The key topics discussed were the SAP HANA platform,
SAPs shift to the cloud, the Ariba network business, and the
changes to the SAP Executive Board in 2013.
STOCK MARKETS AT RECORD LEVELS
In 2013, the U.S. Federal Reserve's ultra-loose monetary policy
and low base interest rates in Europe boosted stock markets.
Liquid fnancial markets repeatedly sent key indexes such as
the U.S. Dow Jones Industrial Average index and Germany's
DAX 30 to record levels.
In 2012, SAP stock gained 48.6%, ahead of major indexes.
In 2013, the blue-chip and industry indexes made up ground,
while SAP stock rose a further 2.7%. The DAX 30 and the
Dow Jones EURO STOXX 50 index of blue-chip stocks in the
euro area gained 25.5% and 18% respectively in 2013. The
Dow Jones Industrial Average index gained 26.5%, the S&P
500 29.6%, and the S&P North American Technology Software
Index 30.2%. SAP stock performed below average compared
to other technology stocks: The Technology Peer Group Index
(TechPGI), which lists ten major technology companies, rose
19.7%.
SAP STOCK AT HIGHEST PRICE SINCE MARCH 2000
After closing at 60.69 on the Xetra trading system at the end
of 2012, SAP stock fell to 57.82 on January 22, 2013, its lowest
level for the quarter. The publication of our preliminary fnal-
quarter and full-year results on January 23 put the share price
on an upward trajectory. The prospect of the Federal Reserve
sticking to its stimulus program and a successful CeBIT for
SAP lifted the share price on March 15 to 64.80, its highest
value for the year and a level it had not seen since March
2000. In mid-March, the DAX passed the 8,000 point mark for
the frst time since December 2007.
Investor Relations
Key Facts About SAP Stock/SAP ADRs
Listings
Germany Berlin, Frankfurt, Stuttgart
United States (ADR) New York Stock Exchange
IDs and symbols
WKN/ISIN 716460/DE0007164600
NYSE (ADRs) 803054204 (CUSIP)
Reuters SAPG.F or .DE
Bloomberg SAP GR
Weight (%) in indexes at 12/31/2013
DAX 30 7.04%
Prime All Share 5.54%
CDAX 5.69%
HDAX 5.79%
Dow Jones STOXX 50 1.85%
Dow Jones EURO STOXX 50 3.08%
DIVIDEND PAYOUT OF 1.00 PER SHARE
We believe our shareholders should beneft appropriately from
the proft the Company made in 2013. We wish to continue
our dividend policy, which is that the payout ratio should be
more than 30% of the proft after tax of the Group.

Therefore, the Executive Board and the Supervisory Board will
recommend that the shareholders approve a total dividend
of 1.00 per share for fscal year 2013 at the Annual General
Meeting of Shareholders. This corresponds to a year-over-year
dividend increase of 0.15. Based on this recommendation,
the overall dividend payout ratio (which here means total
distributed dividend as a percentage of proft) would be 36%
(2012: 36%).
SAP Stock in Comparison to DAX 30, Dow Jones EURO STOXX 50, S&P North American Technology Software Index and to TechPGI
December 31, 2012 (=100%) to January 31, 2014
Percent
SAP Share (Xetra) DAX 30 Performance Index (Xetra) S&P North American Technology Software Index Dow Jones EURO STOXX 50 TechPGI
01 02 03 04 05 06 07 08 09 10 11 12 01
135
130
125
120
115
110
105
100
95
90
85
80
75
SAP-Aktie im Vergleich zum DAX 30, zum EURO STOXX 50 und zum S&P North American Technology Software Index und zum TechPGI
31. Dezember 2012 (= 100 %) bis 31. Januar 2014
Prozent

SAP-Aktie (Xetra) DAX 30 Performanceindex (Xetra) S&P North American Technology Software Index Dow Jones EURO STOXX 50 TechPGI
135
130
125
120
115
110
105
100
95
90
85
80
75
01 02 03 04 05 06 07 08 09 10 11 12 01
13 Investor Relations
(December 31, 2012: 74.4%). In January 2014, approximately
22.5% (January 2013: 22.7%) of the stock was under the con-
trol of three founders and their trusts and holding companies.
U.S. institutions remained the next largest group of shareholders,
holding around 18.0% (19.4%) of the stock. Institutions in
Ireland and the United Kingdom held about 14.9% (13.6%),
followed by Continental European investors outside Germany,
who held approximately 13.8% (12.8%). Institutions in
Germany held 7.6% (7.8%) and investors from the rest of the
world held 2.7% (3.0%) of the stock in January 2014. Private
or unidentifed investors held 17.6% (17.7%). SAP held 2.8%
(3.0%) of the stock in treasury.
CAPITAL STOCK UNCHANGED
SAP's capital stock on December 31, 2013, is 1,228,504,232.00
(2012: 1,228,504,232.00). It is issued as 1,228,504,232 no-
par shares, each with an attributable value of 1 in relation to the
capital stock.
LARGER FREE FLOAT
The proportion of our stock in free foat increased again slightly
in 2013. Applying the defnition accepted on the Frankfurt
Stock Exchange which excludes treasury stock from the free
foat on December 31, 2013, the free foat stood at 74.7%
Return on SAP Common Stock WKN 716460/ISIN DE0007164600
Percent, unless otherwise stated
Initial investment 10,000
Date of investment 12/31/2003 12/31/2008 12/31/2012
Period of investment 10 years 5 years 1 year
Value on 12/31/2013
1)
(in ) 21,381 26,808 10,419
Average annual return 7.9 21.8 4.2
Performance comparators
DAX 30 Performance total return index 9.2 14.7 25.5
REX General Bond total return index 4.5 4.2 0.5
S&P 500 Composite total return index 6.9 19.2 32.4
S&P North American Technology Software Index price index 8.2 22.9 31.1
1)
Assuming all dividends were reinvested
Source: Datastream
Return on SAP ADRs 803054204 (CUSIP)
Percent, unless otherwise stated
Initial investment US$10,000
Date of investment 12/31/2003 12/31/2008 12/31/2012
Period of investment 10 years 5 years 1 year
Value on 12/31/2013
1)
(in US$) 23,207 25,646 10,990
Average annual return 8.8 20.7 9.9
Performance comparators
S&P 500 Composite total return index 7.4 17.9 32.4
1)
Assuming all dividends were reinvested
Source: Datastream
COMMUNICATION WITH INVESTORS
SAP aims for the greatest possible transparency and openness
in a continuous dialog with our shareholders. In several hundred
one-on-one meetings held at SAP, during investor road shows
worldwide, and at investor events, we answered inquiries from
institutional investors and analysts about our business and
strategy. We also held telephone conferences and analyst
meetings when we published our quarterly results. Investor
presentations at the SAPPHIRE NOW conferences, which
took place in Beijing, China, and in Orlando, Florida, in the
United States, were key elements of our communication with
the fnancial markets. In addition, SAP engages in regular
dialog with socially responsible investors (SRIs), by providing
insight into SAPs environmental, social, and corporate
governance policies.
COMPREHENSIVE SERVICE FOR PRIVATE INVESTORS
Providing a full service for retail investors is a priority for SAP.
Our services for private investors include investor presentations
at various retail shareholder events, the shareholder hotline,
e-mail contact at [email protected], investor relations
information on our public Web site www.sap.com/investor, and a
mobile Web site m.sapinvestorrelations.com. We provide a range
of information for investors about SAP and SAP stock online,
including press releases delivered by e-mail, social media
including information provided on our SAP Investor Relations
Twitter feed @sapinvestor, our quarterly SAP INVESTOR
magazine, which investors can subscribe to free of charge, and
a text message service. We also publish an overview of the
latest analyst assessments in collaboration with Vara Research.
All key events at which members of our Executive Board speak
to fnancial analysts and institutions are broadcast live on the
Internet, and we post the presentation materials on the
investor relations area of our public Web site.
15 Investor Relations
RESPONSIBLE MANAGEMENT
We are a global company with numerous subsidiaries around
the world and an international shareholder base, so we need
good governance. Good corporate governance means managing
the Company accountably and transparently to secure
long-term value, which is also the purpose of the standards and
principles that apply in Germany and the world. We believe our
shareholders, business partners, employees, and the fnancial
markets reward good corporate governance with the increased
trust they place in our Company.
CORPORATE GOVERNANCE AT SAP
Because SAP is listed on a German stock exchange, our
corporate governance is based on the German Stock Corporation
Act and on the German Corporate Governance Code (the
Code in this report). Since SAP is also listed in the United
States, we comply with the rules that apply to German
companies listed on the New York Stock Exchange (NYSE).
These include the requirements, as they apply to foreign
private issuers, of the NYSE Corporate Governance Standards,
the U.S. Sarbanes-Oxley Act of 2002, and the U.S. Securities
and Exchange Commission (SEC). As required by the German
Stock Corporation Act, section 161, SAPs Executive and
Supervisory Boards provide the Companys shareholders with
information about our implementation of the German
Corporate Governance Codes recommendations by publishing
an annual declaration of implementation. In addition, the
Executive Board publishes a corporate governance statement
pursuant to the German Commercial Code, section 289 a,
describing certain aspects of the Companys corporate
governance in greater detail. In accordance with section 3.10
sentence 1 of the German Corporate Governance Code,
the Executive and Supervisory Boards report below about
corporate governance at SAP in 2013.
EXECUTIVE BOARD
The SAP Executive Board currently has fve members.
It is solely responsible for managing the Company. It has a duty
to exercise its management powers in the interest of the
Company and in pursuit of the sustained growth of corporate
value. It discusses and agrees its strategy for the Company
with the Supervisory Board, ensures compliance with the
requirements of the law throughout the Group, and maintains
efective risk management structures and internal risk
controls.
GLOBAL MANAGING BOARD
In May 2012, to help with its work the Executive Board set up
the Global Managing Board. It currently comprises all of
the Executive Board and four other global managers who play
a part in directing large sections of the business. These
additional members are appointed by the Executive Board with
the Supervisory Boards consent. The Global Managing Board
has a coordinating function, advises the Executive Board
and helps it make decisions, but the Executive Board retains
overall responsibility for everything the Company does. It
meets regularly and its meetings are chaired by the co-CEOs.
SUPERVISORY BOARD
The SAP Supervisory Board has 16 members who, in equal
numbers, represent the shareholders and the employees. It
appoints, monitors, and advises the Executive Board. The
Executive Board involves the Supervisory Board in decisions on
matters of fundamental importance for the Company. The
Supervisory Board has reserved to itself the approval of certain
defned transactions of fundamental importance.
COMPOSITION OF THE SUPERVISORY BOARD
In accordance with the recommendation in section 5.4.1,
paragraph 2, of the Code, the Supervisory Board has defned
the following objectives for its own composition:
There should never be fewer than two people from the
international stage on the shareholder representatives side
of the Supervisory Board.
No Supervisory Board member should be an employee,
consultant, or director of a signifcant SAP competitor.
At least four shareholder representatives on the Supervisory
Board should be independent members in the meaning of
section 5.4.2 of the Code.
No member of the Supervisory Board should be older than
75 years.
At least one woman should sit on the Supervisory Board as a
shareholder representative.
We believe the current composition of the Supervisory Board
fulflls all of these objectives.
The General Meeting of Shareholders elects the shareholders
side of the Supervisory Board. The Code recommends (at
section 5.4.1, third paragraph, frst sentence) that when the
Supervisory Board proposes candidates for shareholders to
elect or re-elect to the Supervisory Board, it should take into
account the objectives it set for its own composition. In our
Declaration of Implementation dated October 29, 2013, we
reported that we did not follow that recommendation. Our
Supervisory Board will, of course, have regard to the adopted
objectives when seeking to identify suitable persons for candi-
dacy and when preparing its recommendation of candidates
to the General Meeting of Shareholders. In the interest of SAP,
however, we must be in a position to recommend to the General
Meeting of Shareholders those candidates we believe are best
suited for the vacant Supervisory Board seats. Ordinarily, one
of the suitability criteria will be whether a persons candidacy is
consistent with the defned objectives. However, that need not
always be the only decisive criterion for proposing a particular
candidate. Company law, which empowers the General Meeting
of Shareholders to elect members to the Supervisory Board,
requires neither that the Meeting adhere to the Supervisory
Boards objectives nor that it elect the Supervisory Boards
proposed candidates.
The Supervisory Board has regard to the following
requirements for its composition:
The Supervisory Board has at all times to be composed
in such a way that its members as a group possess
the knowledge, ability, and expert experience required to
properly complete its tasks in our global IT company.
Pursuant to the German Stock Corporation Act, section 100
(5), the Supervisory Board must at all times have at least one
independent member with signifcant, recent, and relevant
fnancial or auditing experience.
INDEPENDENCE OF THE SUPERVISORY BOARD
SAP believes a sufcient degree of independence of our
Supervisory Board members is essential for efective and
responsible corporate management and control. As reported
above, our Supervisory Board has a defned objective for its
composition regarding the minimum number of independent
members on the shareholder representative side, as recom-
mended in the Code, section 5.4.1, paragraph 2. At its meeting
on October 10, 2013, the Supervisory Board determined that all
of its shareholder representative members are independent
in the meaning of the Code, section 5.4.2 and that the number
of independent members is sufcient in the meaning of that
section. The Audit Committee is chaired by Erhard Schipporeit,
who for many years was the chief fnancial ofcer of a
DAX company that is also listed on a U.S. stock exchange and
therefore qualifes as an independent fnancial expert in the
meaning of the German Stock Corporation Act, section 100
(5), and the equivalent U.S. provisions.
DIVERSITY IN THE COMPANY
The Executive Board follows the recommendation in section
4.1.5 of the Code that requires executive boards to have regard
to diversity when appointing people to leadership positions,
and in particular to employ appropriate numbers of women in
such positions. In support of this, we maintain a diversity policy
for company leadership appointments. In May 2011, we also
set a target to increase the percentage of women in leadership
positions from 18% at the beginning of 2011 to 25% in 2017.
We believe this is an ambitious target because there are still more
men than women studying engineering subjects. It goes
without saying that ability is still the primary selection criterion
for any position at SAP. Globally, the percentage of women in
leadership positions at the end of 2013 was 21.2 %.
17 Corporate Governance Report
CORPORATE GOVERNANCE STATEMENT
The Executive Board published our corporate governance
statement for 2013 pursuant to the German Commercial Code,
section 289 a, on February 19, 2014. It is available on SAPs
Web site at www.sap.com/corporate-en/investors/governance.
It includes the current declaration of implementation pursuant
to the German Stock Corporation Act, section 161, certain
information on corporate governance practices, and an
account of how the Executive Board and the Supervisory Board
work, who sits on which Supervisory Board committees, and
how those committees work.
CODE OF BUSINESS CONDUCT
SAPs corporate governance includes our Code of Business
Conduct for employees and members of the Executive Board.
The Code of Business Conduct expresses the high standards
that we require from our employees and Executive Board
members and sets out the main principles that guide our
business conduct toward customers, business partners, and
shareholders. We see our Code of Business Conduct as the
standard for our dealings involving customers, business
partners, vendors, shareholders, and competitors. By following
our Code of Business Conduct, we demonstrate a commitment
against all forms of unfair competitive practice, corruption,
and misrepresentation. A Global Compliance Ofce reporting
to our general counsel monitors worldwide compliance with our
Code of Business Conduct and other policies applying within
the Group. It regularly reviews these internal policies, revises
them if necessary, and delivers related employee training.
THE WORK OF THE EXECUTIVE AND
SUPERVISORY BOARDS
The Executive Board and Supervisory Board cooperate closely
for the beneft of the Company. The Executive Board regularly
provides the Supervisory Board with full and timely reports
on all material matters of strategy, business planning and
performance, including any deviations of actual business
performance from plan, risks, risk management, and corporate
compliance. We provide our shareholders with in-depth
information about how the Executive and Supervisory Boards
work, how the committees are composed, and how these
committees work, in our corporate governance statement. For
Section 5.1.2 of the Code contains the recommendation
that supervisory boards should strive for an appropriate
representation of women at executive board level as well. The
Supervisory Board complies with this provision and has ruled
that when a new member is needed for the Executive Board,
applications should be sought from within SAP and from
outside, and that the shortlist should be 50% women if possible.
When we decide whom to appoint, the strengths and perfor-
mance of the candidates would always be more important than
their sex. Another long-term aim of the diversity policy for
company leadership appointments mentioned above is to build
a diverse pool of potential candidates for future Executive
Board vacancies.
As reported above, the Supervisory Board has defned concrete
objectives to promote diversity in its own membership and
achieve an appropriate percentage of women members, as
envisioned in the second paragraph of section 5.4.1 in the
Code.
DECLARATION OF IMPLEMENTATION PURSUANT TO THE
GERMAN STOCK CORPORATION ACT, SECTION 161
Every year, the Executive Board and Supervisory Board issue
a declaration stating whether SAP has implemented and is
following the Codes recommendations, and identifying any
recommendations that the Company has not followed with
an explanation of why it has not done so. The declaration of
implementation that we fled on October 29, 2013, is on the
company Web site at www.sap.com/corporate-en/investors/
governance/policies-statutes. Implementation declarations
published in previous years are also available on this Web site,
and links are provided to current and previous versions of
the Code. As reported in the declaration of implementation,
we follow all but eight of the 105 recommendations in the
current Code. The reasons we do not follow these particular
recommendations are described in detail in the declaration of
implementation.
We voluntarily follow all six suggestions in the current Code.
more information about the joint work of the Executive and
Supervisory Boards and about the work of the Supervisory
Board and its committees in 2013, see the Report from the
Supervisory Board.
APPLYING INTERNATIONAL CORPORATE
GOVERNANCE STANDARDS
As noted above, SAP is an NYSE-listed company and we are
therefore subject to certain U.S. fnancial legislation (including
among others the Sarbanes-Oxley Act of 2002) and to the
applicable SEC and NYSE regulations. Besides implementing
the requirements of the Sarbanes-Oxley Act, section 404, and
other Sarbanes-Oxley Act requirements, including conducting
an annual audit of our internal control over fnancial reporting,
we comply with those of the corporate governance standards
codifed in the NYSE Listed Company Manual, section 303A,
that bind foreign private issuers. The section 303A standards
that apply to SAP include the requirement to have an audit
committee composed of members who are independent in the
meaning of the Sarbanes-Oxley Act, and related reporting
requirements. In accordance with the SEC and NYSE corporate
governance rules, we have also published, at Item 16G in our
annual report on Form 20-F, a report on the signifcant difer-
ences between the NYSE corporate governance standards
and the German corporate governance rules, which we apply.
We publish our annual report on Form 20-F on our Web site
at www.sap.com/corporate-en/investors/newsandreports/
reports in English only.
TRANSPARENCY, COMMUNICATION, AND
SERVICE FOR SHAREHOLDERS
Our shareholders can obtain full and timely information about
SAP on our Web site and can access current and historical
Company data. Among other information, we post all of our
fnancial reports, all relevant news about the Companys
governing bodies and their corporate governance documenta-
tion, information requiring ad-hoc (current) disclosure, press
releases, and news of directors dealings notifable pursuant to
the German Securities Trading Act, section 15 a. Shareholders
and the public are able to watch a live broadcast of the entire
Annual General Meeting of Shareholders on the Internet. They
can vote their shares at the meeting or instruct a proxy of their
choice or one of the proxies provided for that purpose by SAP.
Our shareholders are also able to participate in the Annual
General Meeting of Shareholders on the Internet and to vote
their shares by postal ballot. The details are in the invitation to
the Annual General Meeting of Shareholders. All of the docu-
mentation related to the Annual General Meeting of Sharehold-
ers is posted in good time on SAPs Web site at www.sap.com/
corporate-en/investors/governance/meetings.

FINANCIAL ACCOUNTING, RISK MANAGEMENT, AND
INTERNAL CONTROL
The June 2013 Annual General Meeting of Shareholders
appointed KPMG to audit the SAP AG and the consolidated
fnancial statements. We prepare the SAP AG fnancial
statements in accordance with the German Commercial Code
and our consolidated fnancial statements in accordance with
IFRS. We prepare a management report, as required by the
German Commercial Code, and the Form 20-F annual report in
accordance with SEC requirements. The Executive Board is
responsible for fnancial accounting. The Supervisory Board
approves the SAP AG fnancial statements, the consolidated
fnancial statements, and the combined management report.
In addition to our annual fnancial statements, we also prepare
quarterly reports for the frst, second, and third quarters. Our
quarterly reports comply with the German Securities Trading
Act and are submitted to the Audit Committee of the Supervisory
Board before they are published.
19 Corporate Governance Report
In 2012, SAP engaged its external independent auditor KPMG
to conduct an audit on SAPs worldwide compliance
management system (CMS) according to the German auditing
standard IDW PS 980 Principles for the Proper Performance
of Reasonable Assurance Engagements Relating to Compliance
Management Systems. The audit covered the appropriateness,
implementation and operating efectiveness of SAPs CMS in
the areas of corruption and antitrust law in the period from July 1
to December 31, 2012. The audit was completed on July 5, 2013.
EXECUTIVE BOARD AND SUPERVISORY BOARD
SHAREHOLDINGS
Section 6.3 sentence 2 in the Code recommends that
the entire holdings of SAP shares shall be reported separately
for the Management Board and Supervisory Board in the
Corporate Governance Report. In fulfllment of this recommen-
dation we refer to the Compensation Report of our Combined
Management Report for 2013 which contains the respective
data.
In German stock corporation and commercial law, there are
special requirements for internal risk management that apply
to SAP. To meet them, our global risk management system
supports risk planning, identifcation, analysis, handling, and
elimination. We maintain standard documentation of all our
internal control structures and continually evaluate their
efectiveness. As a company listed on the NYSE, we instruct
our auditor, KPMG, to conduct an annual audit of our internal
control over fnancial reporting in accordance with the
requirements of the U.S. Sarbanes-Oxley Act of 2002, section
404. The audit as at December 31, 2013, confrmed that our
internal control is efective. In compliance with the reporting
requirements in the German Commercial Code, sections
289 (5) and 315 (2)(5), the combined SAP AG and SAP Group
management report contains full information about the
principal features of the internal controls and risk management
structure applying to SAPs consolidated fnancial reporting.
As the Supervisory Board, our role is to look beyond the
fnancial results to also evaluate the Companys overall vision
and direction. SAP anticipated the fundamental shift in
IT to cloud computing and to the real-time business process
management that in-memory technology makes possible,
and, as a market leader, is driving this change.
SAP HANA has revolutionized database technology and
created the next generation of real-time business platforms.
With total license revenue of 1.2 billion in less than three years
and more than 3,000 customers worldwide, SAP HANA is the
most successful product in SAPs history. This technology is
the basis of all SAP applications in the future.
The Companys rapidly-growing cloud business also
demonstrates its leadership in that segment. Cloud solutions
from SAP have more than 35 million users, making SAP
the largest cloud company worldwide. In 2013, it recorded
Dear Shareholders,
SAP had a very successful 2013. The Company had the fourth
consecutive year of double-digit growth in non-IFRS software
and software-related service revenue, accelerated its transition
to a cloud company, continued to grow its core business, and
increased its proftability. This combination of achievements is
unique in the software industry and shows that the Companys
long-term strategy for innovation and growth is successful. In
2013, non-IFRS total revenue was 16.9 billion. Non-IFRS
software and software-related service revenue increased 11%
at constant currencies (by 6% to 14.0 billion at current
exchange rates). Non-IFRS operating income increased by 14%
to 5.9 billion at constant currencies. The operating margin
widened by 150 basis points to 33.5% at constant currencies.
Professor Hasso Plattner
Chairperson of the
Supervisory Board of SAP AG
21 Report from the Supervisory Board
cloud subscription and support revenue of 757 million. The
Companys new technologies and the dynamism of its
cloud business are the foundation for long-term and proftable
growth and for extending its market leadership.
We follow these developments closely in the course of our
Supervisory Board work. As always, the Supervisory Board
relies on an open and sincere dialog with the Executive Board
to efciently organize and perform our duties. In our report,
we describe the ongoing close cooperation between the two
boards, the topics discussed at meetings of the Supervisory
Board, the work of our committees, corporate governance at
SAP, and the audit of SAP AG and the consolidated fnancial
statements.
COOPERATION BETWEEN THE EXECUTIVE AND
SUPERVISORY BOARDS
In 2013, we discharged the duties imposed on us by the law
and by the Companys Articles of Incorporation. We were
continuously consulted by the Executive Board on the running
of the Company; we scrutinized and monitored the work
of management for legal compliance, adherence to proper
accounting principles, appropriateness, and cost-efectiveness.
The Executive and Supervisory Boards consulted on the
Companys strategy and regularly discussed progress on its
implementation. We were involved whenever the Executive
Board made decisions of fundamental importance to SAP.
The Supervisory Board received regular, full, and timely reports
from the Executive Board, both from members in person
and in written documents. Those reports chiefy concerned
the Companys strategy, plans, business performance, risks,
risk management, compliance, and transactions of special
signifcance for SAP. The Executive Board also indicated when
the Companys business deviated from the plans and targets
and explained these deviations.
The content and scope of the Executive Boards reports fully
met the requirements that the Supervisory Board had placed
on them. In addition to these reports, the Supervisory Board
received supplementary information from the Executive Board.
In particular, the Executive Board was available at Supervisory
Board meetings for discussions and to answer our questions.
We questioned and probed the Executive Board to satisfy
ourselves that the information it provided us was plausible.
The Supervisory Board maintains a list of the categories of
transactions for which the Executive Board must obtain the
Supervisory Boards consent. The Supervisory Board continually
reviews the list to see if it requires amendment. It was most
recently amended in 2013. The Supervisory Board carefully
considered all transactions in the listed categories and discussed
them with the Executive Board, focusing on the benefts, risks,
and other efects of each transaction. The Supervisory Board
agreed to all transactions for which its consent was sought
by the Executive Board.
The Executive Board also kept the chairperson of the Supervisory
Board fully informed between meetings of the Supervisory Board
and its committees. In particular, the co-CEOs met regularly
with the chairperson of the Supervisory Board to discuss SAPs
strategy, planning, the Companys business performance, risks,
risk management, compliance, and other key topics and decisions.
The Supervisory Board chairperson was informed without delay
of important events that were signifcant for assessing SAPs
position and progress or for the management and governance
of the Company.
SUPERVISORY BOARD MEETINGS AND RESOLUTIONS
There were four ordinary meetings and two extraordinary
meetings of the Supervisory Board in 2013. Resolutions of the
Supervisory Board were adopted at these meetings or by
correspondence vote. It is customary practice at our meetings
that the Executive Board withdraws while we deliberate on
items that pertain to the Executive Board or require discussion
among Supervisory Board members alone. This happened at
all Supervisory Board meetings in 2013. The Supervisory Board
discussed the following matters and, where necessary, made
resolutions.
We approved the engagement of a law frm in which a member
of the Supervisory Board is a partner. The member concerned
was excluded from the deliberations and voting on this matter.
The Executive Board reviewed business in 2012 and presented
other management information, such as SAPs market position
and the Companys plans through 2015.
The General and Compensation Committee, the Technology
and Strategy Committee, the Audit Committee, the Finance
and Investment Committee, and the Nomination Committee
reported to us on their meetings. The General and Compensation
Committee referred to the agenda items discussed at
that same Supervisory Board meeting. The Audit Committee
described progress on the 2012 fnancial statements and
reported that at its last meeting it had been briefed about the
fndings from the audits focus areas. The Committee also
reported on its deliberations on the Companys internal control
systems. The Finance and Investment Committee informed
us about the annual report it receives on SAP Ventures and
SAP HANA Real-Time Fund activities and about its discussions
on the Companys plans to establish a third venture capital fund.
The Technology and Strategy Committee gave us an account
of SAP HANA Enterprise Cloud, SAP Managed Services, and the
user experience strategy it was discussing.
Meeting in March (Meeting to Discuss the Financial
Statements)
At our meeting on March 21, 2013, the Supervisory Board frst
turned its attention to SAP AGs 2012 fnancial statements and
the consolidated fnancial statements, the audits conducted by
KPMG AG Wirtschaftsprfungsgesellschaft (KPMG), and the
Executive Boards proposed resolution on the appropriation of
retained earnings for 2012. The Audit Committee reported on
all matters for which it is responsible in connection with the
2012 fnancial statements, particularly on the form and scope
of its examination of the documents relating to the fnancial
statements, and recommended that the Supervisory Board
approve them. The auditor attended the meeting. Referring
in particular to the six audit focus topics that had been agreed
between the auditor and the Audit Committee, the auditor
reported in detail on the audit and on the results. The auditor
also related the discussions on those matters at the two
p receding meetings of the Audit Committee. The auditor then
discussed the results with the Supervisory Board and
Resolution Adopted by Correspondence in January
In January 2013, the Supervisory Board approved by
correspondence vote the appointment of Rodolpho Cardenuto
as president of the America region.
Meeting in February
At our meeting on February 14, 2013, the Supervisory Board
discussed the 2013 budget. Based on the operational plan for
2013, which the Executive Board presented in detail, we agreed
to the 2013 budget presented by the Executive Board, including
the 2013 capital expenditure budget and liquidity plan.
We also received and discussed the recommendation of the
General and Compensation Committee concerning Executive
Board variable compensation for 2012. We frst determined
performance against the defned targets, and then decided the
payouts for Executive Board members entitled under the 2012
short-term incentive (STI) plan by considering this performance
and the discretionary element. We discussed performance
against the annual fnancial targets for the 2010 and 2011
medium-term incentive (MTI) plans and determined the payout
of the 2010 MTI plan. We determined the performance against
the 2012 tranche of the RSU Milestone Plan 2015. We then turned
our attention to Executive Board compensation for 2013. We
identifed the key performance indicators (KPIs) and set
the target numbers for each KPI in the 2013 STI plan and their
relative weightings. We adopted a resolution on Executive
Board members individual allocation of rights under the RSU
Milestone Plan 2015 (2013 tranche). Finally, we evaluated
the appropriateness of the Executive Board members compen-
sation for 2013, and in each case found it to be appropriate
in terms of amount, structure, objective criteria, and for each
members responsibilities and tasks.
On the recommendation of the General and Compensation
Committee, we extended the Executive Board appointment of
Werner Brandt from January 1, 2014, through June 30, 2014,
amended his contract, and set his 2014 compensation.
answered our questions. The Supervisory Board approved the
audit. There were no fndings from our own examination, so
we gave our consent to the SAP AG and consolidated fnancial
statements for 2012. We checked and endorsed the Executive
Boards proposal concerning the appropriation of retained
earnings. In addition, we agreed our proposed resolutions for
the agenda of the Annual General Meeting of Shareholders in
June 2013. We adopted a proposal to the Annual General Meeting
of Shareholders concerning the election of an auditor for 2013
that followed the recommendation of the Audit Committee.
At this meeting, we also deliberated on the Executive Boards
proposal to convert SAP AG to a European company (Societas
Europaea, or SE), which would require Supervisory Board
approval. After an in-depth discussion, the Supervisory Board
gave its approval for the Executive Board to prepare the con-
version of the Companys legal form to an SE. A resolution on
the conversion is to be put to the shareholders at the 2014
Annual General Meeting of Shareholders.
The Executive Board presented the forecast for the second
quarter and reported on SAP HANA developments and plans.
Because a Supervisory Board member had left his previous law
frm and had become a partner in another law frm, we approved
the transfer of the Companys engagements with the members
previous law frm to the new frm, and consented to two additional
engagements with that new frm. The Supervisory Board
member concerned did not take part in the deliberations on
these matters or the vote on the related resolution.
Under the appropriate agenda items, the Audit Committee
and the Technology and Strategy Committee reported on their
recent meetings.
Resolution Adopted by Correspondence in April
The Executive Board had chosen a law frm to advise on the
employee co-determination procedure and preparation of the
relevant documents ahead of the Companys conversion to
an SE. A member of the Supervisory Board is a partner in this
law frm. In April 2013, the Supervisory Board approved by
correspondence the instruction of this law frm to the extent
the Executive Board envisioned and at the fees and hourly
rates negotiated for the services. The Supervisory Board
member concerned abstained from voting on the resolution.
Resolutions Adopted by Correspondence in May
On the recommendation of the Finance and Investment
Committee, in May 2013, we approved by correspondence
additional capital for the SAP HANA Real-Time Fund and
the creation of, and capital for, the new SAP Ventures II Fund.
In a second correspondence vote, we appointed Werner Brandt
as labor relations director because Luisa Deplazes Delgado
was about to leave the Executive Board and we approved
the appointment of Bernd Leukert and Luka Mucic to the
Global Managing Board with efect from July 1, 2013.
Extraordinary Meeting in June
At our extraordinary meeting on June 4, 2013, we addressed
the departure of Lars Dalgaard and Luisa Deplazes Delgado from
the Executive Board. On the recommendation of the General
and Compensation Committee, we adopted resolutions on the
termination agreements with Luisa Deplazes Delgado and
Lars Dalgaard, and on the consulting contract with Lars Dalgaard.
The Executive Board also informed us about changes to
its schedule of portfolios prompted by the departure of Lars
Dalgaard and Luisa Deplazes Delgado. In a signifcant change
designed to simplify the organizational structure and create
one development organization, responsibility for all innovations
was passed to Executive Board member Vishal Sikka. Gerhard
Oswalds portfolio was redefned as Scale, Quality & Support,
to include responsibility for SAP HANA Enterprise Cloud.
As part of these changes to the schedule of portfolios, Werner
Brandt took over responsibility for Global HR.
Executive Board member to include the period from July 1,
2014, to December 31, 2016, and approved the extension of his
appointment contract accordingly.
The Executive Board updated us about the preparations for
the conversion of SAP AG to an SE.
The committees reported from their meetings on topics we
had not covered elsewhere on the agenda. The Finance and
Investment Committee presented in detail its deliberations
from May and June about the planned acquisition of hybris.
The Audit Committee reported on the quarters results,
the audit focus areas for 2013, and the regular review of the
Companys system of internal controls. The Special Committee
updated us on TomorrowNow litigation.
After the Executive Board had left the meeting, we discussed
succession planning for the Executive and Global Managing
Boards.
Extraordinary Meeting in July
We held an extraordinary meeting by telephone conference
on July 21, 2013. Jim Hagemann Snabe had informed us that he
wished to step down from the Executive Board. After careful
deliberation, the Supervisory Board decided to recommend him
to the Annual General Meeting of Shareholders in May 2014
as a candidate for Supervisory Board membership, provided
the statutory conditions were met for waiving the "cooling-of"
period. We then deliberated on Jim Hagemann Snabes
contract termination agreement. We resolved to terminate his
appointment contract by mutual agreement with efect from
the end of the Annual General Meeting of Shareholders on
May 21, 2014.
We also discussed the acquisition of hybris. The Executive Board
presented the grounds for acquiring the company, the agreed
purchase price, and the terms of the purchase agreement. We
discussed the key considerations of the acquisition and, on
the recommendation of the Finance and Investment Committee,
we approved the acquisition of hybris and the fnancing of the
acquisition. In accordance with the applicable plan terms and
conditions, we agreed that the targets of the long-term RSU
Milestone Plan 2015, the 2013 STI, and the 2011 MTI should be
adjusted to eliminate any nonrecurring efects of the hybris
acquisition on Executive Board compensation.
Meeting in July
The meeting on July 11, 2013, was held in San Martin, California.
The Supervisory Board had the opportunity to join the opening
ceremony of the SAP Center in San Jose, visit SAP Labs in Palo
Alto, and meet the representatives of major U.S. customers
and SAP Ventures portfolio companies.
At our July meeting, the Executive Board gave us an account of
business in the second quarter of 2013, performance in the
frst half-year, and the forecast for the second half-year. Notably,
it informed us about the revenue of each division and region
in the second quarter of 2013, the performance of the cloud
division, and SAPs competitive position in general. We
discussed in detail the directors and ofcers group liability
insurance policies that we take out from year to year, and
approved them.
As proposed by the General and Compensation Committee,
the Supervisory Board resolved to adjust the compensation of
Executive Board member Vishal Sikka to refect his increased
responsibilities. Referring to a report that the independent
compensation consulting frm Hostettler, Kramarsch & Partner
had prepared, we checked that the compensation the Committee
had proposed was appropriate and then approved it. We
also resolved to extend Gerhard Oswalds term of ofce as an
Resolutions Adopted by Correspondence in August
On August 16, 2013, the Supervisory Board agreed by
correspondence on the terms and conditions and the details of
Jim Hagemann Snabes contract termination agreement that
we had discussed at Julys extraordinary meeting. Under the
termination agreement with Jim Hagemann Snabe, he receives
fxed compensation for his Executive Board tenure in 2013 and
2014. A report from Ernst & Young confrmed the opinion we
had reached in our own review that this compensation was
appropriate. Apart from that, we have not agreed to make any
payments in connection with Jim Hagemann Snabes leaving.
Resolutions Adopted by Correspondence in September
On September 6, 2013, again by correspondence and with
the Executive Boards agreement, we resolved to update the
Companys declaration of implementation of the German
Corporate Governance Code (the Code in this report) pursuant
to the German Stock Corporation Act, section 161. The declaration
had to be updated because, under the termination agreement
with Jim Hagemann Snabe, he receives only fxed cash
compensation elements for his Executive Board tenure in 2013
and 2014. The agreement contains these arrangements
because Jim Hagemann Snabe would transfer to the Supervisory
Board if the conditions of the German Stock Corporation Act,
section 100 (2)(4) are fulflled and the Annual General Meeting
of Shareholders elects him. An advantage of the agreed fxed
cash compensation elements is that they avoid a confict
of interest for Jim Hagemann Snabe. If he were to receive the
variable compensation elements SAP ordinarily pays its
Executive Board members, such a confict of interest would
arise on his transfer to the Supervisory Board because (some)
elements of his Supervisory Board compensation package
would converge with those of the remaining Executive Board
members.
Meeting in October
In our meeting on October 10, 2013, the Executive Board
reported on third-quarter business and preliminary results. We
then discussed strategy with the Executive Board in light of
the Companys performance.
After the Executive Board had left the meeting, we deliberated
on a successor to Werner Brandt as chief fnancial ofcer.
We agreed to appoint Luka Mucic to this position for a term of
three years with efect from July 1, 2014. We discussed
Ernst & Youngs report on the appropriateness of the
compensation that was to be ofered to Luka Mucic. Our
own review of the compensation had found it appropriate.
We then agreed that and the other terms and conditions
of Luka Mucics Executive Board appointment contract.
Committee, we resolved to again adjust the targets of the 2013
STI plan, 2011 MTI plan, and RSU Milestone Plan 2015. The
targets had been adjusted for the hybris acquisition. Since the
acquisition was completed later than expected, the targets had
to be readjusted to the actual acquisition date.
The Executive Board gave a detailed account of developments
in the cloud business, SAP Business Suite powered by SAP HANA,
research, and support.
The next item on the agenda was the topic of women on the
Executive Board and in leadership at SAP. The Executive Board
reported on how the Companys measures to promote diversity
and increase the number of women in leadership positions
were progressing.
We received a progress report on the preparations for
converting SAP AG to an SE and were informed of who were
the members of the Special Negotiating Body.
In agreement with the Executive Board, the Supervisory Board
then adopted, for regular publication in October 2013, the
annual declaration of implementation of the German Corporate
Governance Code pursuant to the German Stock Corporation
Act, section 161. The General and Compensation Committee
reported that it had met immediately prior to our meeting to
verify compliance with the declaration of implementation of
the Code. The Supervisory Board determined that we have a
sufcient number of independent members. Some Supervisory
Board members currently have business dealings with SAP
or hold senior positions in companies that currently have
business dealings with SAP, or have done so in the course of the
year. SAPs business dealings with these persons or companies
are or were at arms length. In our view, especially given the
limited scope and materiality of those dealings, they did not
afect the independence of the Supervisory Board members
concerned and do not give rise to any substantial and not
merely temporary confict of interest in the meaning of the
General and Compensation Committee: Hasso Plattner
(chairperson), Panagiotis Bissiritsas, Wilhelm Haarmann,
Lars Lamad, Bernard Liautaud, Margret Klein-Magar
Audit Committee: Erhard Schipporeit (chairperson),
Stefan Schulz, Inga Wiele, Klaus Wucherer
Finance and Investment Committee: Wilhelm Haarmann
(chairperson), Panagiotis Bissiritsas, Hartmut Mehdorn,
Kurt Reiner
Technology and Strategy Committee: Hasso Plattner
(chairperson), Stefan Schulz (deputy chairperson), Pekka
Ala-Pietil, Anja Feldmann, Christiane Kuntz-Mayr, Bernard
Liautaud, Margret Klein-Magar (joined in November 2013),
Kurt Reiner, Mario Rosa-Bian (left in October 2013), Inga
Wiele, Klaus Wucherer
People and Organization Committee: Hasso Plattner
(chairperson), Anja Feldmann, Wilhelm Haarmann, Christiane
Kuntz-Mayr, Lars Lamad, Hartmut Mehdorn, Mario Rosa-
Bian, Stefan Schulz
Mediation Committee: Hasso Plattner (chairperson),
Christiane Kuntz-Mayr, Hartmut Mehdorn, Mario Rosa-Bian
Nomination Committee: Hasso Plattner (chairperson),
Pekka Ala-Pietil, Bernard Liautaud
Special Committee: Hasso Plattner (chairperson),
Pekka Ala-Pietil, Wilhelm Haarmann, Margret Klein-Magar,
Lars Lamad, Erhard Schipporeit
Each of the committees was active in 2013 except the
Mediation Committee, which has never had to meet in the
history of SAP.
For more information about the Supervisory Board committees
and their duties, see SAPs corporate governance statement
pursuant to the German Commercial Code, section 289a,
published on SAPs Web site at: www.sap.com/corporate-en/
investors/governance/index.epx.
During 2013, the committees focused on the following topics:
The General and Compensation Committee held eight
regular meetings, and outside these meetings it passed three
resolutions by correspondence. A regular topic on its agenda
was succession planning at Executive Board and Global
Managing Board levels. The committee prepared the Supervisory
Boards resolutions on Executive Board compensation and on
the compensation of the members of the Global Managing
Code. Specially designed questionnaires were sent to Supervisory
Board and Executive Board members in August 2013 in
connection with the regular review of the efciency of the
Supervisory Boards activities pursuant to section 5.6 of the
Code. Ahead of the meeting, we had received a written
copy of the Supervisory Board chairpersons analysis of the
results of the survey concerning the efciency of the work
of the Supervisory Board and its committees. We discussed his
analysis at the meeting.
Committee we resolved to set up a new committee for
employee and organizational matters, the People and
Organization Committee. We appointed the following members
to the People and Organization Committee: Hasso Plattner
(chairperson), Anja Feldmann, Wilhelm Haarmann, Christiane
Kuntz-Mayr, Lars Lamad, Hartmut Mehdorn, Mario Rosa-Bian,
and Stefan Schulz. The committee is tasked with advising
the Executive Board and Supervisory Board on recruitment,
people development, major organizational changes, succession
planning for the Global Managing Board and other executive
positions, employee salary structures and budget, equal
opportunities for women at SAP, and employee surveys. We
approved a related change to the membership of the Technology
and Strategy Committee. Margret Klein-Magar replaces Mario
Rosa-Bian, who will step down from this committee. We were
then informed about progress on the Companys activities
to attract talented university graduates worldwide and discussed
this matter with the Executive Board.
The General and Compensation Committee, the Technology
and Strategy Committee, and the Finance and Investment
Committee reported on their recent meetings.
Resolution Adopted by Correspondence in November
In November, the Supervisory Board approved by correspon-
dence the Executive Boards plans to lease a new building in
Paris to bring four SAP facilities together in one location.
THE WORK OF THE SUPERVISORY BOARD COMMITTEES
The committees made a key contribution to the work of the
Supervisory Board and reported on their work to us. The
following committees were in place in 2013 (as of December
31, 2013):
Board. It deliberated on the annual Capital Market Compliance
Ofcers Report, the preparations for appointing a successor
to Werner Brandt as chief fnancial ofcer, and the conversion
of SAP AG to an SE. At its May 2013 meeting, the Committee
discussed the termination agreements for Lars Dalgaard
and Luisa Deplazes Delgado, who had resigned from the
Executive Board. It also deliberated on compensation for Global
Managing Board members. At its September meeting, the
Committee agreed the resolutions it would propose to
the Supervisory Board regarding adjustments to the STI, MTI,
and long-term incentive (LTI) variable elements of
compensation for Executive Board members. As explained
above, the adjustments were required to eliminate the
nonrecurring efects of the hybris acquisition. It also prepared
the Supervisory Boards resolution on Luka Mucics
appointment as chief fnancial ofcer and deliberated on the
plans to set up the People and Organization Committee and
this new committees composition and tasks. At its October
2013 meeting, the Committee discussed the Companys
implementation of the German Corporate Governance Code
recommendations and prepared the Supervisory Boards
decisions with respect to the submission of the declaration of
implementation of the Code and on the independence of
Supervisory Board members. It also prepared the Supervisory
Boards decision about who should sit on the People and
Organization Committee and the tasks of that committee.
The Finance and Investment Committee held four meetings,
one of which was a joint meeting with the Technology and
Strategy Committee. It also adopted one resolution by
correspondence vote. At its meeting on February 11, 2013, the
Committee received an update on the SAP Ventures and the
SAP HANA Real-Time Fund. It discussed proposals for a new
SAP Ventures Fund and for increasing the capital of the SAP
HANA Real-Time Fund. It received a summary of equity
investments in 2013 and of the work of our Mergers &
Acquisitions team. At its May and June 2013 meetings, the
Committee deliberated on the hybris acquisition. The
Executive Board provided detailed information about its
plans to acquire the company, and the Committee resolved
to recommend the acquisition to the Supervisory Board.
At their joint meeting in October 2013, the Finance and
Investment Committee and the Technology and Strategy
Committee were informed about SAPs competitive position
and acquisition planning and analysis, and were updated
on SAP HANA Enterprise Cloud, and discussed these
matters. In November 2013, the Finance and Investment
Committee approved by correspondence vote the sale of
certain assets of a U.S. subsidiary of Sybase, Inc.
The Audit Committee held four meetings at which members
attended in person and four telephone conference meetings.
One focus of its work was SAPs fnancial reporting, especially
the SAP AG and consolidated fnancial statements, the
combined SAP Group and SAP AG management report, and
the Form 20-F annual report for 2012. Reviewing the system
of risk management in the Group, oversight of the fnancial
reporting process, the systems of internal control and risk
management, and the internal audit were also key topics
at its meetings. In several of its meetings in 2013, the Audit
Committee received updates on the progress and results of
the external audit on SAPs worldwide compliance management
system (CMS) for the areas of anticorruption and competition
law. The Audit Committees view that the compliance pro-
cesses at SAP are well designed, carefully implemented, and
efective was strengthened by the results of the independent
external audit of the CMS. In addition, the Committee did
preparatory work on the Supervisory Boards proposals to
the Annual General Meeting of Shareholders for the distribution
of retained earnings and the auditor to be elected for 2013,
and verifed the recommended auditors independence.
Following the election of the auditor, the Audit Committee
decided with the auditor on the focus areas of the audit
and agreed the auditors fee.

The Audit Committee deliberated regularly on SAPs business
performance and its impact on the Companys fnancial
accounting. It discussed with the Executive Board the 2012
results, the fndings of the 2012 audit, the 2013 quarterly
results and quarterly reports, and the auditors quarterly
reviews of selected software agreements. The auditor
attended all physical meetings of the Audit Committee meetings,
and most of its teleconference meetings and reported
in depth on its audit work and on its quarterly reviews of
The Special Committee is tasked with coordinating and
managing the Supervisory Boards external legal counsel
concerned with the investigation and analysis of the facts in
connection with the TomorrowNow litigation. The Special
Committee invited the Companys attorneys to its July
meeting, held in St. Martin, California, so that they could
inform the Committee in person about the latest develop-
ments and the court of appeals potential verdicts.
The new People and Organization Committee held its
inaugural meeting and adopted its rules of procedure in
December 2013. It deliberated on the results of the 2013
employee survey and analyzed them closely. It was informed
about personnel planning and development at SAP, and
discussed proposals for improvements to the recruitment
process.
Regular reports from the committees ensured that the
Supervisory Board was kept fully informed of all matters
covered by the committees and were able to discuss
them thoroughly.
CORPORATE GOVERNANCE
SAPs corporate governance ofcer monitored our compliance
with those recommendations in the Code with which, in
our declaration, we claim to comply, and reported in full to the
General and Compensation Committee. Members of the
Executive Board and of the Supervisory Board had no conficts
of interest that sections 4.3.4 and 5.5.2 of the Code require to
be disclosed to the Supervisory Board. As we reported above,
the Supervisory Board consented to the conclusion of
contracts with a member of the Supervisory Board. There was
also a transaction between the Company and a member of
the Executive Board. It was consistent with industry standards
and was immaterial. The General and Compensation
Committee consented to this transaction. The Company made
no other contracts with members of the Executive Board or
Supervisory Board that would have required a prior resolution
For more information about Code compliance, see the Execu-
tive and Supervisory Boards Corporate Governance Report.
The Supervisory Board closely examined the Executive Boards
corporate governance statement pursuant to the German
Commercial Code, section 289a. We approved the statement
with the combined SAP Group and SAP AG management report.
selected software agreements. In addition to these discussions
in the physical meetings, the Executive Board held telephone
conferences with the Audit Committee before the
announcement of the preliminary quarterly results to inform
Committee members about progress on the quarterly
fnancial statements and the quarterly reviews of selected
software agreements, and about the preliminary quarterly
results. The Audit Committee also discussed each quarterly
report with the Executive Board in these telephone
conferences. At its July 10 meeting, the Audit Committee
was informed by KPMG about the planned audit focus areas.
At its meeting on October 9, 2013, the Committee was
informed about the governance model for the human
resources function with particular regard to risk management
and people management. It discussed the efectiveness of
the Companys internal control structure, internal audit
service, and compliance system, as described above. The
Committee also reviewed the internal audit services
audit plan.
The Technology and Strategy Committee met four times in
2013. It discussed the key technology trends in the software
industry in the years to come and SAPs corporate and
product strategies. The meetings primarily addressed SAP
HANA technology and plans to use SAP HANA as the
platform for SAP applications. The Committees work also
focused on the Companys cloud computing strategy and its
implementation. As reported above, in October the
Committee held a joint meeting with the Finance and
Investment Committee to discuss SAPs acquisition strategy
and review past acquisitions. The Committee discussed
the user experience strategy and the strategy for customer
relationship management applications.
The Nomination Committee, whose members are all
shareholder representatives, held one meeting in 2013.
At this meeting, in February, it deliberated on the future
composition of the Supervisory Board and the plans to
convert SAP AG to an SE.
SAP AG AND CONSOLIDATED FINANCIAL REPORTS
FOR 2013
KPMG audited the SAP AG and consolidated fnancial reports
for 2013. The Annual General Meeting of Shareholders elected
KPMG as the SAP AG and SAP Group auditor on June 4, 2013.
The Supervisory Board proposed the appointment of KPMG on
the recommendation of the Audit Committee. Before proposing
KPMG to the Annual General Meeting of Shareholders as
auditor for the year, the chairperson of the Supervisory Board
and the Audit Committee obtained confrmation from KPMG
that circumstances did not exist that might prejudice or raise
any doubt concerning its independence as the Companys
auditor. In that connection, KPMG informed us of the volume of
other services it provided to the Group in the past year and had
been engaged to provide in the year to come. The Supervisory
Board has agreed with KPMG that the auditor should report to
the Supervisory Board and record in the auditors report any
fact found during the audit that is inconsistent with the
declaration given by the Executive Board and the Supervisory
Board concerning implementation of the German Corporate
Governance Code. KPMG examined the SAP AG fnancial
statements prepared in accordance with the German Commercial
Code, the consolidated fnancial statements prepared in
accordance with International Financial Reporting Standards
(IFRSs) as required by the German Commercial Code, section
315a, and the combined SAP Group and SAP AG management
report, and certifed them without qualifcation. The auditor
thus confrmed that, in its opinion and based on its audit in
accordance with the applicable accounting principles, the SAP
AG and consolidated fnancial statements give a true and fair
view of the net assets, fnancial position, and results of
operations of SAP AG and the SAP Group. The auditor also
confrmed that the combined SAP AG and SAP Group
management report is consistent with the corresponding
fnancial statements and as a whole gives a suitable view of the
position of SAP AG and the SAP Group and of foreseeable
opportunities and risks. KPMG had completed its audit of
SAPs internal control systems over fnancial reporting and
certifed without qualifcation that it complies with the
applicable U.S. standards. The auditor states in its opinion that
it considers SAPs internal controls over fnancial reporting to
be efective in all material respects. All Audit Committee and
Supervisory Board members received the documents
concerning the fnancial statements mentioned above, the audit
reports prepared by KPMG, and the Executive Boards
proposal concerning the appropriation of retained earnings in
good time.
On February 20, 2014, the Executive Board prepared the fnancial
reports of SAP AG and the Group for 2014, comprising the SAP
AG fnancial statements, the consolidated fnancial statements,
and the combined management report, and submitted them to
the Supervisory Board without delay.
At the meeting of the Audit Committee on Wednesday,
March 19, 2014, and at the meeting of the Supervisory Board
on Thursday, March 20, 2014, the Executive Board explained
the fnancial statements of SAP AG and the SAP Group and its
proposal concerning the appropriation of retained earnings.
At the meetings, members of the Executive Board also answered
questions from the Audit Committee and the Supervisory
Board. It also explained the annual report on Form 20-F to the
Audit Committee meeting.
After the explanations from the Executive Board, the Audit
Committee and the Supervisory Board reviewed the fnancial
statement documents in the light of KPMGs audit reports.
The representatives of the auditor who attended presented full
reports on the audit and the results of the audit to the Audit
Committee and Supervisory Board meetings and explained the
audit report. The auditor also reported that it had not identifed
any material weaknesses in our internal control and risk-
management systems for fnancial reporting. Both the Audit
Committee and the Supervisory Board asked detailed questions
the interests of the shareholders. We also discussed these
matters with the auditor. On recommendation of the Audit
Committee, we then endorsed the Executive Boards proposal
concerning the appropriation of retained earnings. We
approved this present report.
MEMBERSHIP CHANGES ON THE SUPERVISORY BOARD
AND EXECUTIVE BOARD
The following members left the Executive Board: Lars Dalgaard
on May 31, 2013; and Luisa Deplazes Delgado on June 30, 2013.
The Supervisory Board appointed Executive Board member
Werner Brandt as labor relations director.
The Supervisory Board thanks the Executive Board, the
managing directors of the Group companies, and all of our
employees for their hard work and dedication in 2013. We
would also like to thank our customers and partners. Without
them, our Companys success would not be possible.
For the Supervisory Board
Professor Hasso Plattner
(Chairperson)
about the form, scope, and results of the audit. The Audit
Committee reported to the Supervisory Board on its own review
of the fnancial accounts, its discussions with the Executive
Board and with the auditor, and its supervision of the fnancial
reporting process. It confrmed that as part of its supervisory
work, it had addressed the efectiveness of internal control, risk
management, and internal auditing systems of the SAP Group
and found them to be efective.
The Committee also reported that KPMG had told it no
circumstances had arisen that might give cause for concern
about KPMGs impartiality and had listed the services it had
provided that were not part of the audit. The Committee
reported that it had examined the auditors independence,
taking the non-audit services it had rendered into
consideration, and stated that in the Committees opinion
the auditor possessed the required degree of independence.
The Audit Committee and the Supervisory Board were able to
satisfy themselves that KPMG had conducted the audit properly.
In particular, they concluded that both the audit reports and
the audit itself fulflled the legal requirements. On the basis of
the report and the Audit Committees recommendation, the
Supervisory Board approved the audit and, because there were
no fndings from our own examination, we gave our consent to
the SAP AG fnancial statements, the consolidated fnancial
statements, and the combined management report (including
the Executive Boards corporate governance statement pursuant
to the German Commercial Code, section 289a). The fnancial
statements and combined management report were thus
formally adopted. The Supervisory Boards opinion of the
Company and the Group coincided with that of the Executive
Board as set out in the combined management report. The
Supervisory Board considered the proposal presented by
the Executive Board concerning the appropriation of retained
earnings. In doing so, we considered to the requirements of
dividends policy, the efects on the liquidity of the Group, and
The following criteria apply to the elements of Executive Board
compensation for 2013:
The fxed element is paid as a monthly salary.
The variable compensation under the STI 2013 plan depends
on the SAP Groups performance against the KPI target values
for non-IFRS constant currency software revenue growth and
non-IFRS constant currency operating margin increase as
well as non-IFRS constant currency new and upsell billings. In
addition, the STI element has a discretionary component that
allows the Supervisory Board, after the end of the period in
question, to address not only an Executive Board members
individual performance, but also SAPs performance in terms
of market position, innovative power, customer satisfaction,
employee satisfaction, and attractiveness as an employer.
Moreover, if there has been any extraordinary and unfore-
seeable event the Supervisory Board can, at its reasonable
discretion, retroactively adjust payouts up or down in the
interest of SAP. On February 13, 2014, the Supervisory Board
assessed SAPs performance against the agreed targets
and determined the amount of STI payable. The STI pays out
after the Annual General Meeting of Shareholders in May
2014.
The long-term incentive element is called the RSU Milestone
Plan 2015. RSU stands for restricted share unit. This
four-year plan focuses on the SAP share price and on certain
objectives derived from our Company strategy for the
years through 2015. For each of the four years, the members
of the Executive Board are allocated a certain number of
SAP RSUs for the respective year based on a budget amount
that was granted to each Executive Board member in 2012
already for the years 2012 through 2015. The number of
RSUs allocated to each member for a given year is his or her
target amount (an amount in euros) for that year divided by
the SAP share price over a reference period (defned in the
RSU Milestone Plan 2015 terms) at the beginning of the year
in question.
The number of RSUs an Executive Board member actually
earns in respect of a given year depends on Company
performance against the objectives for that year (a year is a
performance period in the plan). The objectives derive from
SAPs strategy for the period to 2015. The plan objectives
COMPENSATION FOR EXECUTIVE AND SUPERVISORY
BOARD MEMBERS
This compensation report outlines the criteria that we applied
for the year 2013 to determine compensation for Executive
Board and Supervisory Board members, discloses the amount
of compensation paid, and describes the compensation systems.
It also contains information about Executive Board members
share-based payment plans, shares held by Executive Board
and Supervisory Board members, and the directors dealings
required to be disclosed in accordance with the German
Securities Trading Act.
COMPENSATION FOR EXECUTIVE BOARD MEMBERS
Compensation System for 2013
Executive Board members compensation for 2013 is intended
to refect SAPs size and global presence as well as our economic
and fnancial standing. The compensation level is internationally
competitive to reward committed, successful work in a
dynamic business environment.
The Executive Board compensation package is performance-
based. In 2013, it had three elements:
A fxed annual salary
A variable short-term incentive (STI) plan to reward
performance in the plan year
A Restricted Share Unit-based long-term incentive (LTI) plan
tied to the price of SAP shares (RSU Milestone Plan 2015)
The Supervisory Board set a compensation target for the sum
of the fxed and the variable elements. It reviews, and if
appropriate revises, this compensation target every year. The
review takes into account SAPs business performance and
the compensation paid to board members at comparable
companies on the international stage. The amount of variable
compensation depends on SAPs performance against
performance targets that the Supervisory Board sets for each
plan year. The performance targets are key performance
indicator (KPI) values aligned to the SAP budget for the plan
year.
Compensation Report
1)
1)
This Compensation report is part of the audited management report.
relate to two key performance indicators (KPIs): our non-
IFRS total revenue and our non-IFRS operating proft. The
KPI targets have already been set for the entire life of the
RSU Milestone Plan 2015 for the years 2012 to 2015 and will
merely be adjusted for the efects of key acquisitions.
After the end of each fscal year, the Supervisory Board
assesses the Companys performance against the objectives
set for that year and determines the number of RSUs to be
fnally allocated to (and which then vest in) each Executive
Board member. There are objective-based performance
hurdles to clear each year before any RSUs can vest. There is
also a cap: Normally, the quantity of vested RSUs a member
can attain in respect of a plan year is capped at 150% of his
or her initial RSU allocation for that year.
The Company strategy underlying the RSU Milestone Plan
2015 focuses on where SAP aims to be by 2015, so the plan
gives greater weight to performance against the KPI targets
for 2015 (the fnal year of the plan) than against the targets
for 2012 through 2014. After the end of 2015, the number
of vested RSUs a member of the Executive Board actually
receives for that year is revised. In circumstances where
the targets for the individual years are not achieved but the
2015 targets are achieved, the outcome of this revision
would be that a member would receive as many vested RSUs
for 2015 as would make up for any that he or she did not
receive in the earlier years by reason of failure to achieve targets.
On the other hand, if the Company underachieves against
the 2015 objectives, Executive Board members may in a worst
case scenario lose all of the vested RSUs allocated to them
for 2015.
All vested RSUs are subject to a three-year holding period.
The holding period commences at the end of the year for
which the RSUs were allocated. The amount an RSU eventually
pays out depends on the SAP share price at the end of the
holding period. A member who leaves the Executive Board
before the end of the plan retains his or her vested RSUs
for completed plan years but does not retain any allocated but
unvested RSUs for the year during which he or she leaves.
If a member leaves the Executive Board before the beginning
of the subsequent year, no RSUs are fnally allocated.
Each vested RSU entitles its holder to a (gross) payout
corresponding to the price of one SAP share after the end of
the three-year holding period. The applicable share price
is measured over a reference period defned in the RSU Mile-
stone Plan 2015 terms.
Subject to the requirements in the German Stock Corporation
Act, section 87 (1), the Supervisory Board is entitled to
revise the STI and the LTI in extraordinary and unforeseeable
circumstances.
For the terms and details of the RSU Milestone Plan 2015,
see the Notes to Consolidated Financial Statements section,
Note (27). The number of RSUs to be issued to each member
of the Executive Board in 2013 by way of long-term incentive
was decided by the Supervisory Board on February 14, 2013.
An additional long-term incentive plan (LTI HANA) has been
dedicated to Vishal Sikka to align his remuneration to his new
expanded role with regard to SAP HANA. The LTI HANA for
the years 2013 to 2015 consists of three annual compensation
components with an assessment period of three years that
will be cash-settled after this period. The LTI HANA is linked
to KPIs specifc to SAP HANA.
The contracts of Executive Board members Bill McDermott,
Lars Dalgaard, and Vishal Sikka include clauses that determine
the exchange rates for the translation of euro-denominated
compensation into U.S. dollars.
In 2010 and 2011, the Executive Board members were granted
a variable medium-term incentive (MTI) plan to reward perfor-
mance in the plan year and the two subsequent years. The
variable compensation under the MTI 2011 granted for the
fscal year 2011 depends on the Groups performance over
the three years 2011 to 2013 against the KPI target values for
software and software-related service revenue growth and
earnings per share (both of which are non-IFRS, constant cur-
rency values). In addition, the MTI element has a discretionary
component that is assessed by the Supervisory Board at
the end of the plan period. The close of the fscal year 2013
represents the end of the plan period for the MTI 2011, and
therefore the corresponding entitlement under the MTI 2011
is included in the compensation for the fscal year 2013.
The payment will be due after the Annual General Meeting of
Shareholders in May 2014.
33 Compensation Report
In 2012, the Executive Board members already received the LTI
grants for the years 2012 to 2015, which are dependent on
their uninterrupted tenure as Executive Board members in the
years in question. Although these allocations are tied to the
respective years and thus from an economic perspective
represent compensation for the Executive Board members in
the respective years, for the purpose of disclosure in the
Compensation Report the grants had to be included in the total
compensation for Executive Board members for the year in
which the grants were allocated (in 2012) pursuant to section
314 of the German Commercial Code (HGB). The share-based
payment amounts in the table above disclose the LTI
grants for the year 2013 that were already granted in 2012 and
included in the total compensation for 2012. Consequently
they are excluded from the total Executive Board compensation
for 2013 (see second next paragraph) calculated as required
under section 314 of the German Commercial Code.
Executive Board Members Compensation for 2013
thousands
Fixed Elements Performance-Related Element Compensation
for 2013
1)
Short-Term and Medium-Term
Incentive Elements
Long-Term
Incentive Element
Salary Other
1)
STI MTI 2011 Share-Based
Payment (RSU
Milestone Plan
2015)
2)
Bill McDermott (co-CEO) 1,150.0 1,570.5 1,737.2 1,011.1 4,143.5 9,612.3
Jim Hagemann Snabe (co-CEO) 1,150.0 6,082.9 1,737.2 1,011.1 9,981.2
Dr. Werner Brandt 700.0 29.0 1,051.5 611.0 1,486.4 3,877.9
Lars Dalgaard (until May 31, 2013)
3)
291.7 203.3 469.1 964.1
Luisa Deplazes Delgado (until June 30, 2013)
3)
350.0 26.1 421.0 797.1
Gerhard Oswald 700.0 17.0 1,051.5 611.0 1,486.4 3,865.9
Dr. Vishal Sikka 700.0 383.6 1,051.5 611.0 1,486.4 4,232.5
Total 5,041.7 8,312.4 7,519.0 3,855.2 8,602.7 33,331.0
1)
Insurance contributions, benefts in kind, expenses for maintenance of two households, relocation costs, non-recurring payments, use of aircraft, tax, cash disbursement of long-term incentive element, discrete payments arising
through application of the fxed exchange rate clause. The efects from the application of the fxed exchange rate clause are disclosed under Other (in the prior year under the diferent compensation components). Further,
these amounts are shown in the year of payment rather than in the year of entitlement of the underlying compensation. The amount for Jim Hagemann Snabe under Other includes the fxed payments for the 2012 and 2013 RSUs
according to the description below.
2)
Compensation attributable to Executive Board members for 2013 including the 2013 plan tranche of LTI 2015 based on the grant value at time of grant.
3)
Salary and STI for 2013 are pro rata temporis amounts until the end of the respective term. The RSUs allocated for 2013 are forfeited upon the end of their contract.
Jim Hagemann Snabe resigned his seat on the Executive Board
with efect from May 21, 2014 (Annual General Meeting of
Shareholders). The SAP Supervisory Board will propose that
he be elected to the SAP Supervisory Board by the SAP share-
holders on the same day. Mr. Snabes termination agreement
provides as follows: To replace the payout for 2012 RSUs under
the RSU Milestone Plan that on allocation in 2012 were valued
4,318,400 based on a stock price of 45.26, he will be paid
6,485,800 gross based on a stock price of 52.96 (that is,
the mean of the 2012 and 2013 reference prices) discounted
at 2% because of early payment. Of that amount, 4,318,400,
which was already allocated in 2012 and which was the grant
value at time of grant, was already included in 2012 compensa-
tion. The diference of 2,167,400 is included in the total
compensation for 2013 (see below). The RSUs allocated for 2013
were converted into a fxed payment of 3,768,300 (gross
amount) based on a share price of 58.69, a target achievement
of 92.97%, and it is discounted at an interest rate of 2%
over the period to the original contractual disbursement date.
This amount will be paid out after the close of the Annual
General Meeting of Shareholders in May 2014.
To compensate for his 2014 RSUs, Mr. Snabe will receive a
prorated payment of 1,700,000 in respect of the period he
serves in 2014. This amount will also be paid out after the close
of the Annual General Meeting of Shareholders in May 2014.
Including allocations for 2014 and 2015 to Gerhard Oswald
(1,574,800 each) that were allocated in 2013 in line with the
extension of his Executive Board contract, the total Executive
Board compensation calculated as required under section
314 of the German Commercial Code amounts to 24,109,600,
thereof: Bill McDermott 5,468,800, Jim Hagemann Snabe
6,212,900, Werner Brandt 2,391,500, Lars Dalgaard
964,100, Luisa Deplazes Delgado 797,100, Gerhard Oswald
5,529,100, and Vishal Sikka 2,746,100.
The share-based payment amounts in 2013 result from the
following RSUs under the RSU Milestone Plan 2015.
Share-Based Payment Under RSU Milestone Plan 2015
Grants for 2013
Quantity Total Grant Value
at Time of Grant
1)
thousands
Bill McDermott (co-CEO) 73,289 4,143.5
Jim Hagemann Snabe (co-CEO)
2)

Dr. Werner Brandt 26,290 1,486.4
2)

Luisa Deplazes Delgado
(until June 30, 2013)
2)

Gerhard Oswald 26,290 1,486.4
Dr. Vishal Sikka 26,290 1,486.4
Total 152,159 8,602.7
1)
The grant value of each RSU allocated in 2013 was 56.54.
2)
The allocations for Jim Hagemann Snabe (73,289 RSUs) were converted into a fxed payment. The allocations
for Lars Dalgaard (26,290 RSUs) and Luisa Deplazes Delgado (21,562 RSUs) forfeited upon the end of their
contract. Consequently they are not disclosed in the table above.
In 2012, in addition to the LTI grant for 2012, Executive Board
members already received the LTI grants for the years 2013
to 2015, which are dependent on their uninterrupted tenure as
Executive Board members in the years in question. Although
these allocations are tied to the respective years and thus
from an economic perspective represent compensation
for the Executive Board members in the respective years, for
the purpose of disclosure in the Compensation Report the
grants must be included in the total compensation for
Executive Board members for the year in which the grants were
allocated pursuant to section 314 of the German Commercial
Code. Vesting of a plan tranche is dependent on the respective
Executive Board members continuous service for the Company
in the respective fscal year. In 2012, the contracts of Werner
Brandt and Gerhard Oswald were set to expire in mid-2014,
while the contracts of Lars Dalgaard and Luisa Deplazes
Delgado were set to expire in mid-2015. As a result, the LTI
allocations for the years 2014 to 2015 (for Werner Brandt and
Gerhard Oswald) and the LTI allocations for the year 2015 (for
Lars Dalgaard and Luisa Deplazes Delgado) had not yet been
allocated with legally binding force in 2012.
In 2012, additional grants for Executive Board members for
future years were 4,390,000 for each co-CEO and 1,574,800
for each regular Executive Board member, in each of
2013, 2014, and 2015 (except Luisa Deplazes Delgado, who was
supposed to receive 1,291,600 for the year 2013). The total
compensation for 2012 pursuant to section 314 of the German
Commercial Code, in other words, including this additional
compensation as well as the long-term compensation tranches
granted but not yet earned, amounted to 72,138,400,
thereof: Bill McDermott 21,951,300, Jim Hagemann Snabe
21,415,500, Werner Brandt 5,431,200, Lars Dalgaard
5,484,200, Luisa Deplazes Delgado 3,804,400, Gerhard
Oswald 5,421,000, and Vishal Sikka 8,630,800.
Total Executive Board Payment in 2012
thousands
Fixed Elements Performance-Related Element Compensation
for 2012
1)
Short-Term and Medium-Term
Incentive Elements
Long-Term
Incentive Element
Salary Other
2)
STI MTI 2010 Share-Based
Payment (RSU
Milestone Plan
2015)
1),3)
Bill McDermott (co-CEO) 1,150.0 699.6 1,545.7 1,067.6 4,318.4 8,781.3
Jim Hagemann Snabe (co-CEO) 1,150.0 163.8 1,545.7 1,067.6 4,318.4 8,245.5
Dr. Werner Brandt 700.0 26.7 935.5 645.1 1,549.1 3,856.4
Lars Dalgaard (from April 12, 2012) 503.6 0 674.8 0 1,156.2 2,334.6
Luisa Deplazes Delgado
(from September 1, 2012)
233.3 96.4 193.9 0 414.4 938.0
Gerhard Oswald 700.0 16.5 935.5 645.1 1,549.1 3,846.2
Dr. Vishal Sikka 700.0 143.9 935.5 577.9 1,549.1 3,906.4
Total 5,136.9 1,146.9 6,766.6 4,003.3 14,854.7 31,908.4
1)
Compensation attributable to Executive Board members for fnancial year 2012 including the 2012 tranche of LTI 2015 based on the grant value at time of grant.
2)
Insurance contributions, benefts in kind, expenses for maintenance of two households, relocation costs, non-recurring payments, use of aircraft, tax, discrete payments arising
through application of the fxed exchange rate clause. The disclosure of payments arising through application of the fxed exchange rate clause was adapted to the disclosure for 2013.
3)
Fair value at the time of grant.
END-OF-SERVICE BENEFITS
Regular End-of-Service Undertakings
Retirement Pension Plan
The following retirement pension agreements apply to the indi-
vidual members of the Executive Board:
Werner Brandt, Luisa Deplazes Delgado (who stepped down
on June 30, 2013), and Gerhard Oswald receive a retirement
pension when they reach the retirement age of 60 and vacate
their Executive Board seat, or a disability pension if, before
reaching the regular retirement age, they become subject to
occupational disability or permanent incapacity. A surviving
dependents pension is paid on the death of a former member
of the Executive Board. The disability pension is 100% of
the vested retirement pension entitlement and is payable
until the benefciarys 60th birthday, after which it is replaced
by a retirement pension. The surviving dependents pension
is 60% of the retirement pension or vested disability pension
entitlement at death. Entitlements are enforceable against
SAP AG. Current pension payments are reviewed annually
for adjustments and, if applicable, increased according to the
surplus in the pension liability insurance. If service is ended
before the retirement age of 60 is reached, pension entitlement
is reduced in proportion as the actual length of service stands
in relation to the maximum possible length of service.
The applied retirement pension plan is contributory. The
contribution is 4% of applicable compensation up to the appli-
cable income threshold plus 14% of applicable compensation
above the applicable income threshold. For this purpose,
applicable compensation is 180% of annual base salary. The
applicable income threshold is the statutory annual income
threshold for the state pension plan in Germany (West), as
amended from time to time.
Originally, Gerhard Oswald was under a performance-based
retirement plan. This plan was discontinued when SAP
introduced a contributory retirement pension plan in 2000.
His pension benefts are derived from any accrued
entitlements on December 31, 1999, under performance-based
pension agreements and a salary-linked contribution for
the period commencing January 1, 2000. Gerhard Oswalds
rights to retirement pension benefts will increase by further
annual contributions because he will remain a member
of the Executive Board after his 60th birthday until his
retirement on December 31, 2016.
Share-Based Payment Under RSU Milestone Plan 2015
Grants for 2012
Quantity Grant Value per
Unit at Time
of Grant
Total Grant
Value at Time
of Grant
thousands
Bill McDermott (co-CEO) 95,414 45.26 4,318.4
Jim Hagemann Snabe (co-CEO) 95,414 45.26 4,318.4
Dr. Werner Brandt 34,226 45.26 1,549.1
Lars Dalgaard (from April 12, 2012) 24,594 47.01 1,156.2
Luisa Deplazes Delgado (from September 1, 2012) 8,332 49.73 414.4
Gerhard Oswald 34,226 45.26 1,549.1
Dr. Vishal Sikka 34,226 45.26 1,549.1
Total 326,432 14,854.7
SAP made contributions to a third-party pension plan for
Bill McDermott and Vishal Sikka. SAPs contributions are
based on Bill McDermotts and Vishal Sikkas payments into
this pension plan. In 2013, SAP paid contributions for Bill
McDermott totaling 698,400 (2012: 1,053,600) and for
Vishal Sikka totaling 153,900 (2012: 215,300).
Instead of paying for entitlements under the pension plan for
Executive Board members, SAP pays equivalent amounts
to a non-SAP pension plan for Jim Hagemann Snabe. In 2013,
SAP paid contributions totaling 282,900 (2012: 283,400).
Lars Dalgaard has no entitlements under the pension plan for
Executive Board members. SAP made no retirement pension
plan contributions to a third-party pension plan with respect
to Lars Dalgaard in 2013.

Werner Brandts rights to retirement pension benefts will
increase by further contributions as he will remain a member
of the Executive Board after his 60th birthday until his
retirement on June 30, 2014.
Bill McDermott has rights to future benefts under the portion
of the SAP America pension plan classifed as Non-Qualifed
Retirement Plan according to the U.S. Employee Retirement
Income Security Act (ERISA). The Non-Qualifed pension
plan of SAP America is a cash balance plan that on retirement
provides either monthly pension payments or a lump sum.
The pension becomes available from the benefciarys 65th
birthday. Subject to certain conditions, the plan also provides
earlier payment or invalidity benefts. The Non-Qualifed
pension plan closed with efect from January 1, 2009.
Interest continues to be paid on the earned rights to benefts
within this plan.
Total Projected Beneft Obligation (PBO) and the Total Accruals for Pension Obligations to Executive Board Members
thousands
Bill McDermott
(co-CEO)
1)
Dr. Werner
Brandt
Luisa Deplazes
Delgado
(until
June 30, 2013)
Gerhard
Oswald
Dr. Vishal
Sikka
1)
Total
PBO January 1, 2012 1,139.5 1,499.7 NA 4,485.5 53.1 7,177.8
Less plan assets market value January 1, 2012 56.6 1,131.0 NA 3,811.2 48.5 5,047.3
Accrued January 1, 2012 1,082.9 368.7 NA 674.3 4.6 2,130.5
PBO change in 2012 64.4 541.8 55.1 1,231.3 53.1 1,710.7
Plan assets change in 2012 56.6 217.0 48.3 383.3 48.5 543.5
PBO December 31, 2012 1,075.1 2,041.5 55.1 5,716.8 0 8,888.5
Less plan assets market value December 31, 2012 0 1,348.0 48.3 4,194.5 0 5,590.8
Accrued December 31, 2012 1,075.1 693.5 6.8 1,522.3 0 3,297.7
PBO change in 2013 32.4 96.0 25.2 99.7 0 188.5
Plan assets change in 2013 0 226.2 76.5 456.8 0 759.5
PBO December 31, 2013 1,042.7 2,137.5 80.3 5,816.5 0 9,077.0
Less plan assets market value December 31, 2013 0 1,574.2 124.8 4,651.3 0 6,350.3
Accrued December 31, 2013 1,042.7 563.3 44.5 1,165.2 0 2,726.7
1)
Prior to May 18, 2012, the qualifed portion of the SAP America pension plan was terminated and account balances transferred to third-party pension accounts.
The following table presents the net present values of the
postcontractual non-compete abstention payments. The net
present values in the table refect the discounted present value
of the amounts that would be paid in the fctitious scenario
in which the Executive Board members leave SAP at the end of
their respective current contract terms and their fnal average
contractual compensation prior to their departure equals the
compensation in 2013. Actual postcontractual non-compete
payments will likely difer from these amounts depending on
the time of departure and the compensation levels and target
achievements at the time of departure.
Net Present Values of the Postcontractual
Non-Compete Abstention Payments
thousands
Contract Term
Expires
Net Present
Value of Post-
contractual Non-
Compete Ab-
stention Payment
Bill McDermott (co-CEO) June 30, 2017 4,534.1
Dr. Werner Brandt June 30, 2014 1,933.3
Gerhard Oswald December 31, 2016 1,846.3
Dr. Vishal Sikka December 31, 2017 1,958.9
Total 10,272.6
After his resignation as a member of the Executive Board,
Jim Hagemann Snabe will receive monthly abstention
compensation over a period of twelve months for the post-
contractual non-compete period totaling 3,015,500 (gross).
Early End-of-Service Undertakings
Severance Payments
The standard contract for all Executive Board members
provides that on termination before full term (for example,
where the members appointment is revoked, where the
member becomes occupationally disabled, or in connection
The table below shows the annual pension entitlement of each
member of the Executive Board on reaching age 60 based on
entitlements from SAP under performance-based and salary-
linked plans vested on December 31, 2013.
Annual Pension Entitlement
thousands
Vested on
December 31,
2013
Vested on
December 31,
2012
Bill McDermott (co-CEO)
1)
88.4 78.1
Dr. Werner Brandt 89.8
2)
88.2
3)
5.8 2.3
Gerhard Oswald 267.9
4)
259.9
5)
1)
The rights shown here for Bill McDermott refer solely to rights under the SAP America pension plan.
2)
Due to the last extension of Werner Brandts contract beyond his 60th birthday, this value represents the
retirement pension entitlement that he would receive after his current Executive Board contract expires on
June 30, 2014, based on the entitlements vested on December 31, 2013.
3)
Due to changes in tax regulations in Germany, for commitments after January 1, 2012, the minimum age to
receive pension payments increased to age 62. The value shown for Luisa Deplazes Delgado for 2013 represents
the retirement pension entitlement that she would receive at the age of 62 based on the entitlements vested by
the end of her contract.
4)
Due to the most recent extension of Gerhard Oswald's contract beyond June 30, 2014, this value represents
the retirement pension entitlement that he would receive after his current Executive Board contract expires on
December 31, 2016, based on the entitlements vested on December 31, 2013.
5)
Due to the last extension of Gerhard Oswald's contract beyond his 60th birthday, this value represents the
retirement pension entitlement that he would receive after his current Executive Board contract expires on
June 30, 2014, based on the entitlements vested on December 31, 2012.
These are vested entitlements. To the extent that members
continue to serve on the Executive Board and that therefore
more contributions are made for them in the future, pensions
actually payable at the age of 60 will be higher than the
amounts shown in the table.
Postcontractual Non-Compete Provisions
During the agreed 12-month postcontractual non-compete
period, each Executive Board member receives abstention
payments corresponding to 50% of his or her fnal average
contractual compensation as agreed in the respective contract
on an individual basis. Any other occupational income gener-
ated by the Executive Board member will be deducted from his
compensation in accordance with section 74c of the German
Commercial Code.
Payments to Executive Board Members Retiring in 2013
Luisa Deplazes Delgado resigned from her position as Executive
Board member with efect from June 30, 2013, with the approval
of the Supervisory Board. Lars Dalgaard resigned from his
position as Executive Board member with efect from May 31,
2013, with the approval of the Supervisory Board. The
postcontractual non-compete provision in both contracts has
been canceled without compensation.
Payments to Former Executive Board Members
In 2013, we paid pension benefts of 1,387,000 to Executive
Board members who had retired before January 1, 2013 (2012:
1,360,000). At the end of the year, the PBO for former Executive
Board members was 29,181,000 (2012: 30,551,000).
Plan assets of 26,015,000 are available to service these
obligations (2012: 26,054,000).
EXECUTIVE BOARD MEMBERS LONG-TERM INCENTIVES
Members of the Executive Board hold or held throughout
the year share-based payment rights under the RSU Milestone
Plan 2015 and the SAP SOP 2010 (which were granted in
previous years). For information about the terms and details
of these programs, see the Notes to the Consolidated Financial
Statements section, Note (27).
RSU Milestone Plan 2015
The table below shows Executive Board members holdings, on
December 31, 2013, of restricted share units issued to them
under the RSU Milestone Plan 2015. The plan is a cash-settled
long-term incentive scheme with a payout subsequent to a
performance period of one year and an additional holding period
of three years. The RSU Milestone Plan 2015 consists of four
plan tranches to be issued with respect to the calendar years
2012 through 2015.

with a change of control), SAP AG will pay to the member the
outstanding part of the compensation target for the entire
remainder of the term, appropriately discounted for early
payment. A member has no claim to that payment if he or she
has not served SAP as a member of its Executive Board for
at least one year or if he or she leaves SAP AG for reasons for
which he or she is responsible.
If an Executive Board members appointment to the Executive
Board expires or ceases to exist because of, or as a consequence
of, change or restructuring, or due to a change of control,
SAP AG and each Executive Board member has the right to
terminate the employment contract within eight weeks of the
occurrence by giving six months notice. A change of control
is deemed to occur when a third party is required to make a
mandatory takeover ofer to the shareholders of SAP AG under
the German Securities Acquisition and Takeover Act, when
SAP AG merges with another company and becomes the sub-
sumed entity, or when a control or proft transfer agreement
is concluded with SAP AG as the dependent company. An
Executive Board members contract can also be terminated
before full term if his or her appointment as an SAP AG
Executive Board member is revoked in connection with a
change of control.
Postcontractual Non-Compete Provisions
Abstention compensation for the postcontractual non-
compete period as described above is also payable on early
contract termination.
Permanent Disability
In case of permanent disability, the contract will end at the
end of the quarter in which the permanent inability to work was
determined. The Executive Board member receives the
monthly basic salary for a further 12 months starting from the
date the permanent disability is determined.
The holding of RSUs on December 31, 2013, that were issued
and not forfeited in 2013, refects the number of RSUs multi-
plied by the 92.97% target achievement. The RSUs allocated in
2012 have a remaining term of 2.08 years, the RSUs allocated
in 2013 have a remaining term of 3.08 years.
The holding on December 31, 2012, refects the number
of RSUs issued in 2012 multiplied by the 133.55% target
achievement.
RSU Milestone Plan 2015
Quantity of RSUs
Holding on
January 1,
2013
Grants in 2013 Performance-
Related
Adjustment
Exercised
Units
Forfeited
Units
Holding on
December 31,
2013
Bill McDermott (co-CEO) 127,425 73,289 5,152 195,562
Jim Hagemann Snabe (co-CEO)
1)
127,425 73,289 5,152 195,562
Dr. Werner Brandt 45,709 26,290 1,848 70,151
Lars Dalgaard (until May 31, 2013) 32,845 26,290 26,290 32,845
Luisa Deplazes Delgado (until June 30, 2013) 11,127 21,562 21,562 11,127
Gerhard Oswald 45,709 26,290 1,848 70,151
Dr. Vishal Sikka 45,709 26,290 1,848 70,151
Total 435,950 273,300 15,849 195,562 47,852 449,987
1)
According to the termination agreement with Jim Hagemann Snabe, the 2012 and 2013 grants will be paid out after the close of the Annual General Meeting of Shareholders on May 21, 2014 based on
a fxed share price of 52.96 for the 2012 grants and 58.69 for the 2013 grants.
RSU Milestone Plan 2015 (2012 Tranche)
Quantity of RSUs
Holding on
January 1,
2012
Grants in 2012 Performance-
Related
Adjustment
Exercised
Units
Forfeited
Units
Holding on
December 31,
2012
Bill McDermott (co-CEO) 95,414 32,011 127,425
Jim Hagemann Snabe (co-CEO) 95,414 32,011 127,425
Dr. Werner Brandt 34,226 11,483 45,709
Lars Dalgaard (from April 12, 2012) 24,594 8,251 32,845
Luisa Deplazes Delgado (from September 1, 2012) 8,332 2,795 11,127
Gerhard Oswald 34,226 11,483 45,709
Dr. Vishal Sikka 34,226 11,483 45,709
Total 326,432 109,518 435,950
for an option is 115% of the base price. The issued options have
a term of seven years and can only be exercised on specifed
dates after the vesting period. The options issued in 2010
are exercisable beginning in September 2014 and the options
issued in 2011 are exercisable beginning in June 2015.
Total Expense for Share-Based Payment
thousands
2013 2012
Bill McDermott (co-CEO) 1,529.7 16,239.0
Jim Hagemann Snabe (co-CEO) 2,967.0 16,239.0
Dr. Werner Brandt 1,042.9 4,998.1
Lars Dalgaard (until May 31, 2013) 2,264.2 4,239.6
Luisa Deplazes Delgado (until June 30, 2013) 2,126.4 2,795.6
Gerhard Oswald 376.0 6,417.0
Dr. Vishal Sikka 376.0 6,500.3
Total 8,596.4 57,428.6
SAP SOP 2010
The table below shows Executive Board members holdings,
on December 31, 2013, of virtual share options issued to them
under the SAP SOP 2010 since its inception. The strike price
Total Expense for Share-Based Payment
In the report year and the prior year, total expense for the
share-based payment plans of Executive Board members was
recorded as follows.
SAP SOP 2010 Virtual Share Options
Year
Granted
Holding on
January 1, 2013
Strike Price
per Option
Rights
Exercised
in 2013
Price on
Exercise
Date
Exercisable
Rights of
Retired
Members of
the Execu-
tive Board
Forfeited
Rights
Holding on
December 31, 2013
Quantity of
Options
Remaining
Term in
Years
Quantity of
Options
Quantity of
Options
Quantity of
Options
Quantity of
Options
Remaining
Term in
Years
Bill McDermott
(co-CEO)
2010 135,714 4.69 40.80 135,714 3.69
2011 112,426 5.44 48.33 112,426 4.44
Jim Hagemann Snabe
(co-CEO)
2010 135,714 4.69 40.80 135,714 3.69
2011 112,426 5.44 48.33 112,426 4.44
Dr. Werner Brandt 2010 82,428 4.69 40.80 82,428 3.69
2011 68,284 5.44 48.33 68,284 4.44
Gerhard Oswald 2010 82,428 4.69 40.80 82,428 3.69
2011 68,284 5.44 48.33 68,284 4.44
Dr. Vishal Sikka 2010 82,428 4.69 40.80 82,428 3.69
2011 68,284 5.44 48.33 68,284 4.44
Total 948,416 948,416
The expense is recognized in accordance with IFRS 2 Share-
Based Payments. Because the RSU Milestone Plan 2015
tranches for 2014 to 2015 were allocated at the beginning of
2012, we are required to recognize them in part in 2013
even though these future tranches depend on the achievement
of specifc fnancial targets in future periods.
EXECUTIVE BOARD: OTHER INFORMATION
We did not grant any compensation advance or credit to, or
enter into any commitment for the beneft of, any member of
our Executive Board in 2013 or the previous year.
As far as the law permits, SAP AG and its afliated companies
in Germany and elsewhere indemnify and hold harmless their
respective directors and ofcers against and from the claims
of third parties. To this end, we maintain directors and ofcers
(D&O) group liability insurance. The policy is annual and is
renewed from year to year. The insurance covers the personal
liability of the insured group for fnancial loss caused by
its managerial acts and omissions. The current D&O policy
includes an individual deductible for Executive Board members
of SAP AG as required by section 93 (2) of the German Stock
Corporation Act.
Shareholdings and Transactions of Executive Board
Members
No member of the Executive Board holds more than 1% of the
ordinary shares of SAP AG. Members of the Executive Board
held a total of 30,201 SAP shares on December 31, 2013 (2012:
35,271 shares).
The table below shows transactions by Executive Board
members and persons closely associated with them notifed to
SAP pursuant to the German Securities Trading Act, section
15a, in 2013.
Transactions in SAP Shares
Transaction Date

Transaction Quantity Unit Price
Dr. Werner Brandt June 10, 2013 Share purchase 800 58.5900
November 26, 2013 Share sale 11,000 60.9000
Gerhard Oswald June 11, 2013 Share purchase 815 57.5260
Jim Hagemann Snabe (co-CEO) July 22, 2013 Share purchase 1,815 55.2038
Bill McDermott (co-CEO) July 23, 2013 Purchase of ADRs 1,500 US$72.8400
Dr. Vishal Sikka September 11, 2013 Purchase of ADRs 1,000 US$72.5800
COMPENSATION FOR SUPERVISORY BOARD MEMBERS
Compensation System
Supervisory Board members compensation is governed by our
Articles of Incorporation, section 16. Each member of the
Supervisory Board receives, in addition to the reimbursement
of his or her expenses, compensation composed of fxed
elements and a variable element. The variable element depends
on the dividend paid by SAP on its shares.
The fxed element is 100,000 for the chairperson, 70,000
for the deputy chairperson, and 50,000 for other members.
For membership of the Audit Committee, Supervisory Board
members receive additional fxed annual remuneration of
15,000, and for membership of any other Supervisory Board
committee 10,000, provided that the committee concerned
has met in the year. The chairperson of the Audit Committee
receives 25,000, and the chairpersons of the other committees
receive 20,000. The fxed remuneration is payable after the
end of the year.
Any members of the Supervisory Board having served for less
than the entire year receive one-twelfth of the annual remunera-
tion for each month of service commenced. This also applies
to the increased compensation of the chairperson and the deputy
chairperson and to the remuneration for the chairperson and
the members of a committee.
Amount of Compensation
Subject to the resolution on the appropriation of retained earn-
ings by the Annual General Meeting of Shareholders on May 21,
2014, the compensation paid to Supervisory Board members
in respect of 2013 will be as set out in the table below.
The variable compensation element is 10,000 for the chair-
person, 8,000 for the deputy chairperson, and 6,000 for
the other members of the Supervisory Board for each 0.01 by
which the dividend distributed per share exceeds 0.40. The
variable remuneration is payable after the end of the Annual
General Meeting of Shareholders that resolves on the dividend
for the relevant year.
However, the aggregate compensation excluding compensation
for committee memberships must not exceed 250,000
for the chairperson, 200,000 for the deputy chairperson, and
150,000 for other members of the Supervisory Board.
Supervisory Board Members Compensation in 2013
thousands
2013 2012
Fixed
Com-
pensation
Compen-
sation for
Committee
Work
Variable
Compen-
sation
Total Fixed
Com-
pensation
Compen-
sation for
Committee
Work
Variable
Compen-
sation
Total
Prof. Dr. h.c. mult. Hasso Plattner
(chairperson)
100.0 81.7 150.0 331.7 100.0 60.0 150.0 310.0
Christiane Kuntz-Mayr
(deputy chairperson)
70.0 10.8 130.0 210.8 67.5 10.0 128.3 205.8
Pekka Ala-Pietil 50.0 30.0 100.0 180.0 50.0 20.0 100.0 170.0
Panagiotis Bissiritsas 50.0 20.0 100.0 170.0 50.0 24.2 100.0 174.2
Prof. Anja Feldmann 50.0 10.8 100.0 160.8 33.3 6.7 66.7 106.7
Prof. Dr. Wilhelm Haarmann 50.0 40.8 100.0 190.8 50.0 30.0 100.0 180.0
Margret Klein-Magar 50.0 20.0 100.0 170.0 33.3 6.7 66.7 106.7
Lars Lamad 50.0 20.8 100.0 170.8 62.5 10.0 120.8 193.3
Bernard Liautaud 50.0 30.0 100.0 180.0 50.0 16.7 100.0 166.7
Dr. h. c. Hartmut Mehdorn 50.0 10.8 100.0 160.8 50.0 10.0 100.0 160.0
Dr. Kurt Reiner 50.0 20.0 100.0 170.0 33.3 13.3 66.7 113.3
Mario Rosa-Bian 50.0 9.2 100.0 159.2 33.3 6.7 66.7 106.7
Dr. Erhard Schipporeit 50.0 35.0 100.0 185.0 50.0 25.0 100.0 175.0
Stefan Schulz 50.0 25.8 100.0 175.8 50.0 24.2 100.0 174.2
Inga Wiele 50.0 25.0 100.0 175.0 33.3 16.7 66.7 116.7
Prof. Dr.-Ing. Dr.-Ing. E.h. Klaus Wucherer 50.0 25.0 100.0 175.0 50.0 20.0 100.0 170.0
Compensation for former
Supervisory Board Members
NA NA NA NA 104.0 39.7 208.5 352.2
Total 870.0 415.8 1,680.0 2,965.8 900.8 339.6 1,740.8 2,981.3
The table below shows transactions by Supervisory Board
members and persons closely associated with them notifed
to SAP pursuant to the German Securities Trading Act, section
15a, in 2013:
Transactions in SAP Shares
Transaction
Date
Transaction Quan-
tity
Unit Price
in
Christian Wiele August 23,
2013
Share sale 116 57.2600
Inga Wiele August 26,
2013
Margret Klein-Magar August 26,
2013
Mario Rosa-Bian August 27,
2013
Hasso Plattner October 24,
2013
Share sale
1) 1)
1)
The notifying party (Hasso Plattner GmbH & Co. Beteiligungs-KG) concluded a contract with a bank acting as
commission agent for the monthly sale of SAP shares with a fair value of 10,000,000 per month. The sale will
be carried out at the banks own discretion in the stock market or over the counter, during December 2013
through November 2014. With this transaction a program running since November 2012 will be continued (see
notifcation on November 30, 2012). Price: Targeted is the volume-weighted average (stock market) price of the
SAP share on the relevant day of sale. Number of items: Total amount traded divided by the relevant sale price of
the sold shares.
SUPERVISORY BOARD: OTHER INFORMATION
We did not grant any compensation advance or credit to, or
enter into any commitment for the beneft of, any member of
our Supervisory Board in 2013 or the previous year.
Hasso Plattner, the chairperson of the Supervisory Board,
entered into a consulting contract with SAP after he joined the
Supervisory Board in May 2003. The contract does not
provide for any compensation. The only cost we incurred under
the contract was the reimbursement of expenses.
As far as the law permits, we indemnify Supervisory Board mem-
bers against, and hold them harmless from, claims brought
by third parties. To this end, we maintain directors and ofcers
(D&O) group liability insurance. The current D&O policy does
not include an individual deductible for Supervisory Board
members as envisaged in the German Corporate Governance
Code.
In addition, we reimburse members of the Supervisory Board
for their expenses and the value-added tax payable on their
compensation.
The total compensation of all Supervisory Board members in
2013 for work for SAP excluding compensation relating to the
ofce of Supervisory Board member was 1,176,200
(2012: 1,083,500). Those amounts are composed entirely of
remuneration received by employee representatives on the
Supervisory Board relating to their position as SAP employees
in 2013 and 2012, respectively.
Supervisory Board member Wilhelm Haarmann practiced as a
partner in the law frm HAARMANN Partnerschaftsgesellschaft
in Frankfurt am Main, Germany, until February 2013. In February
2013, he was elected a partner in Linklaters LLP in Frankfurt
am Main, Germany. Wilhelm Haarmann occasionally advises
SAP on particular projects, tax matters, and questions of law.
Before Mr. Haarmann joined Linklaters LLP, SAP had already
received consulting services from Linklaters and will continue
to do so. In 2013, the fees for such services totaled 327,500
(2012: 9,400).
LONG-TERM INCENTIVES FOR THE SUPERVISORY BOARD
We do not ofer members share options or other share-based
payment for their Supervisory Board work. Any share options
or other share-based payment received by employee-elected
members relate to their position as SAP employees and not to
their work on the Supervisory Board.
Shareholdings and Transactions of Supervisory Board
Members
Supervisory Board chairperson Hasso Plattner and the companies
he controlled held 119,300,882 SAP shares on December 31,
2013 (December 31, 2012: 121,348,807 SAP shares), represent-
ing 9.711% (2012: 9.878%) of SAPs share capital. No other
member of the Supervisory Board held more than 1% of the
SAP AG share capital at the end of 2013 or of the previous year.
Members of the Supervisory Board held a total of 119,316,444
SAP shares on December 31, 2013 (December 31, 2012:
121,363,858 SAP shares).
Werner Brandt Gerhard Oswald
Vishal Sikka
To the best of our knowledge, and in accordance with the
applicable reporting principles, the consolidated fnancial
statements give a true and fair view of the assets, fnances, and
operating results of the Group, and the management report of
the Group and SAP AG includes a fair review of the development
and performance of the business and the position of the
Group and SAP AG, together with a description of the material
opportunities and risks associated with the expected
development of the Group and SAP AG.
Walldorf, February 20, 2014
SAP AG
Walldorf, Baden
The Executive Board
TO SAP AG
Report on the Consolidated Financial Statements
We have audited the accompanying consolidated fnancial
statements of SAP AG, Walldorf (SAP or the Company), and
its subsidiaries, which comprise the consolidated statement of
fnancial position as of December 31, 2013, and the consolidated
income statement, the consolidated statement of comprehensive
income, the consolidated statement of changes in equity,
the consolidated statement of cash fows, and the notes to the
consolidated fnancial statements for the year then ended.
Managements Responsibility for the Consolidated
Management is responsible for the preparation of consolidated
fnancial statements. This includes the responsibility that the
consolidated fnancial statements give a true and fair view of the
Companys net assets, fnancial position, and results of operations
in accordance with International Financial Reporting Standards
(IFRSs) as adopted by the European Union (EU), the
supplementary provisions of German law to be applied in
accordance with the German Commercial Code (Handels-
gesetzbuch, HGB), section 315a (1), and IFRSs as issued by
the International Accounting Standards Board. Managements
responsibility includes maintaining such internal control as
management determines necessary to enable the preparation
of consolidated fnancial statements that are free from material
misstatement, whether due to fraud or error.
Auditors Responsibility
Our responsibility is to express an opinion on these consolidated
fnancial statements based on our audit. We conducted our
audit in accordance with HGB, section 317, and German generally
accepted standards for the audit of consolidated fnancial
statements, promulgated by the Institut der Wirtschaftsprfer
(IDW), and in supplementary compliance with International
Standards on Auditing and standards of the Public Company
Accounting Oversight Board (United States). Those standards
require that we comply with ethical requirements and plan and
perform the audit to obtain reasonable assurance about
whether the consolidated fnancial statements are free from
material misstatement.
An audit involves performing procedures to obtain audit evidence
about the amounts and disclosures in the consolidated
fnancial statements. The procedures selected depend on the
auditors judgment, including the assessment of the risks of
material misstatement in the consolidated fnancial statements,
whether due to fraud or error. In making those risk assessments,
the auditor considers internal control relevant to the entitys
preparation of the consolidated fnancial statements that give
a true and fair view in order to design audit procedures that are
appropriate in the circumstances. An audit also includes
evaluating the appropriateness of accounting policies used and
the reasonableness of accounting estimates made by
management, as well as evaluating the overall presentation
of the consolidated fnancial statements.
We believe that the audit evidence we have obtained is sufcient
and appropriate to provide a basis for our audit opinion.
Opinion
In accordance with HGB, section 322 (3) sentence 1, we declare
that our audit of the consolidated fnancial statements has
not led to any reservations.
In our opinion, based on our audit, the consolidated fnancial
statements give a true and fair view of the Companys net assets
and fnancial position as of December 31, 2013; and of its
results of operations for the year then ended, in accordance with
IFRSs as adopted by the EU, the supplementary provisions
of German law to be applied in accordance with HGB, section
315a (1), and IFRSs as issued by the International Accounting
Standards Board.
47 Independent Auditor's Report
Opinion
In accordance with HGB, section 322 (3) sentence 1, we declare
that our audit has not led to any reservations.
In our opinion, based on our audit of the consolidated fnancial
statements and the management report, the management
report is consistent with the consolidated fnancial statements
and as a whole, provides a suitable view of the Companys
position and suitably presents the opportunities and risks of
future development.
Report on the Efectiveness of Internal Control over
Financial Reporting in the Consolidated Financial
Statements in accordance with the standards of the Public
Company Accounting Oversight Board (United States)
We have audited SAPs internal control over fnancial reporting
in the consolidated fnancial statements as of December 31,
2013, based on criteria established in Internal Control
Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO).
Managements Responsibility for Internal Control
Management is responsible for maintaining efective internal
control over fnancial reporting in the consolidated fnancial
statements, and for the assessment of its efectiveness, as
included in the accompanying Managements Annual Report
on Internal Control over Financial Reporting in the
Consolidated Financial Statements.
A companys internal control over fnancial reporting in the
consolidated fnancial statements is a process designed to
provide reasonable assurance regarding the reliability of
fnancial reporting and the preparation of fnancial statements
Report on the Management Report
We have audited the accompanying combined management
report for SAP Group and SAP AG (management report) for
the business year ended December 31, 2013.

Managements Responsibility for the Management Report
Management is responsible for the preparation of the
management report in accordance with the provisions of German
law to be applied in accordance with HGB, section 315a (1),
the German Accounting Standards Nos. 17 and 20 (GAS 17,
GAS 20) and the provisions of the IFRS Practice Statement
Management Commentary.
Our responsibility is to express an opinion on this management
report based on our audit. We conducted our audit of the
management report in accordance with HGB, section 317 (2),
and German generally accepted standards for the audit of
management reports promulgated by the IDW. Those standards
require that we plan and perform the audit of the management
report in such a way that we obtain reasonable assurance
about whether the management report is consistent with the
consolidated fnancial statements and the fndings from our
audit of the consolidated fnancial statements and as a whole
provides a suitable understanding of the Companys position
and suitably presents the opportunities and risks of future
development.
for external purposes in accordance with generally accepted
accounting principles. A companys internal control over fnancial
reporting in the consolidated fnancial statements includes
those policies and procedures that (1) pertain to the maintenance
of records that, in reasonable detail, accurately and fairly
refect the transactions and dispositions of the assets of the
company; (2) provide reasonable assurance that transactions
are recorded as necessary to permit preparation of fnancial
statements in accordance with generally accepted accounting
principles; and (3) provide reasonable assurance regarding
prevention or timely detection of unauthorized acquisition,
use, or disposition of the companys assets that could have a
material efect on the fnancial statements.
Because of its inherent limitations, internal control over fnancial
reporting in the consolidated fnancial statements may not
prevent or detect misstatements. Also, projections of any
evaluation of efectiveness to future periods are subject to the
risk that controls may become inadequate because of changes
in conditions, or that the degree of compliance with the policies
or procedures may deteriorate.
Our responsibility is to express an opinion on SAPs internal
control over fnancial reporting in the consolidated fnancial
statements based on our audit. We conducted our audit in
accordance with the standards of the Public Company Accounting
Oversight Board (United States). Those standards require that
we plan and perform the audit to obtain reasonable assurance
about whether efective internal control over fnancial reporting
in the consolidated fnancial statements was maintained in all
material respects. Our audit included obtaining an understanding
of internal control over fnancial reporting in the consolidated
fnancial statements, assessing the risk that a material weakness
exists, and testing and evaluating the design and operating
efectiveness of internal control based on the assessed risk.
Our audit also included performing such other procedures
as we considered necessary in the circumstances.
Opinion
In our opinion, SAP maintained, in all material respects,
efective internal control over fnancial reporting in the
consolidated fnancial statements as of December 31, 2013,
based on criteria established in Internal Control Integrated
Framework issued by COSO.
Mannheim, February 20, 2014
KPMG AG
Wirtschaftsprfungsgesellschaft
Dr. Gutsche Dr. Bttcher
Wirtschaftsprfer Wirtschaftsprfer
49 Independent Auditor's Report
Vision, Mission,
and Strategy
Our vision is to help the
world run better and
improve peoples lives;
our mission is to help
every customer become
a best-run business.
To learn more about SAPs vision, mission, and strategy visit www.sapintegratedreport.com
Combined Management Report
General Information About This Management Report
Business Model
Portfolio of Products, Solutions, and Services
Customers
Partner Ecosystem
Acquisitions
Employees and Social Investments
Energy Consumption and Greenhouse Gas Emissions
Opportunity Report
Risk Report
51
52
53
54
57
59
65
68
71
72
73
79
82
90
92
110
113
114
116
119
122
152
153
51
This report includes statistical data about the IT industry and
global economic trends that comes from information published
by sources including International Data Corporation (IDC), a
provider of market information and advisory services for the
information technology, telecommunications, and consumer
technology markets; the European Central Bank (ECB); and
the International Monetary Fund (IMF). This type of data repre-
sents only the estimates of IDC, ECB, IMF, and other sources of
industry data. SAP does not adopt or endorse any of the
statistical information provided by sources such as IDC, ECB,
IMF, or other similar sources that is contained in this report.
In addition, although we believe that data from these sources is
generally reliable, this type of data is imprecise. We caution
readers not to place undue reliance on this data.
BASIS OF PRESENTATION
This management report by SAP AG and its subsidiaries
(collectively, we, us, our, SAP, Group, or Company)
has been prepared in accordance with sections 315 and 315a
of the German Commercial Code and German Accounting
Standards No. 17 and 20. The management report is also a
management commentary complying with the International
Financial Reporting Standards (IFRS) Practice Statement
Management Commentary.
All of the information in this report relates to the situation on
December 31, 2013, or the fscal year ended on that date,
unless otherwise stated.
The report contains references to additional information
in other parts of the SAP Integrated Report that is available
online. This additional information is not part of the
management report.
FORWARD-LOOKING STATEMENTS
This management report contains forward-looking statements
and information based on the beliefs of, and assumptions
made by, our management using information currently
available to them. Any statements contained in this report that
are not historical facts are forward-looking statements as
defned in the U.S. Private Securities Litigation Reform Act of
1995. We have based these forward-looking statements on our
current expectations, assumptions, and projections about
future conditions and events. As a result, our forward-looking
statements and information are subject to uncertainties and
risks, many of which are beyond our control. If one or more of
these uncertainties or risks materializes, or if managements
underlying assumptions prove incorrect, our actual results
could difer materially from those described in or inferred from
our forward-looking statements and information. We describe
these risks and uncertainties in the Risk Report section.
The words aim, anticipate, assume, believe, continue,
could, counting on, is confdent, estimate, expect,
forecast, guidance, intend, may, might, outlook,
plan, project, predict, seek, should, strategy, want,
will, would, and similar expressions as they relate to us are
intended to identify such forward-looking statements. Such
statements include, for example, those made in the Operating
Results section, our quantitative and qualitative disclosures
about market risk pursuant to the International Financial
Reporting Standards (IFRS), namely IFRS 7 and related
statements in our Notes to the Consolidated Financial State-
ments, the Opportunity Report, the Risk Report, our outlook
guidance, and other forward-looking information appearing
in other parts of this report. To fully consider the factors that
could afect our future fnancial results, both this report and
our Annual Report on Form 20-F should be considered, as
well as all of our other flings with the Securities and Exchange
Commission (SEC). Readers are cautioned not to place undue
reliance on these forward-looking statements, which speak
only as of the date specifed or the date of this report. Except
where legally required, we undertake no obligation to publicly
update or revise any forward-looking statements as a result
of new information that we receive about conditions that
existed upon issuance of this report, future events, or otherwise
unless we are required to do so by law.
General Information About This
Management Report
52 Combined Management Report
SAP markets and distributes our products, solutions,
and services primarily through a worldwide network of local
subsidiaries, which are licensed to distribute SAP oferings
to customers in defned territories. Distributorship agreements
are in place with independent resellers in some countries.
For more information, see the Business Model section.
As of December 31, 2013, SAP AG controlled directly or
indirectly 272 subsidiaries. Our subsidiaries perform various
tasks such as sales and marketing, consulting, research and
development, customer support, training, or administration.
For a complete list of subsidiaries, associates, and other equity
investments, see the Notes to the Consolidated Financial
Statements section, Note (34).
For management reporting, our activities are broken down
into two divisions, On-Premise and Cloud, which are further
divided into operating segments. Our On-Premise division is
composed of two operating segments, On-Premise Products
and On-Premise Services. Our Cloud division is also composed
of two operating segments, Cloud Applications and Ariba.
For more information about our segments, see the Notes to the
Consolidated Financial Statements section, Note (28).

Founded in 1972, SAP today is the world leader in enterprise
applications in terms of software and software-related service
revenue, and the worlds third-largest independent software
manufacturer based on market capitalization. Our continued
growth over four decades is attributable to relentless innovation,
a diverse portfolio, and our ability to anticipate ever-changing
customer requirements. With more than 253,500 customers
in over 180 countries, the SAP Group includes subsidiaries in
major countries and employs more than 66,500 people.
Our companys culture puts our customers success at the
center of everything we do, and is driven by our passions
which are:
Success We measure our success by our customers
success.
Accountability We embrace accountability and strive to
always make good on our promises.
Professionalism We exhibit professionalism by consistently
delivering quality work.
Integrity We are honest and fair and take responsibility for
all our actions.
Teamwork We value teamwork because it enables us to
exceed our individual limits and share greater success.
Trust We work for each others success and take personal
responsibility for all of our relationships.
For more information about our business conduct, see the
Business Conduct section in the SAP Integrated Report 2013
online.
SAP is headquartered in Walldorf, Germany; our legal corporate
name is SAP AG. The corporation is listed on the Frankfurt
Stock Exchange as well as stock exchanges in Berlin and
Stuttgart in Germany and the New York Stock Exchange in the
United States. At the end of 2013, our market capitalization
was 76.5 billion. SAP is a member of the German DAX and of
the Dow Jones EURO STOXX 50 index.
We derive our revenue from fees charged to our customers for
licensing of on-premise software products and solutions, and
the use of our cloud solutions by subscription. We also derive
revenue from support, consulting, development, training, and
other services.
53 Overview of the SAP Group
Margin
We aim for 35% non-IFRS operating margin (2013: 32.6%). In
order to capture growth opportunities in the cloud, we expect
to reach this goal in 2017 instead of 2015, as previously stated.
In 2014, we expect between 5.8 billion to 6.0 billion non-
IFRS operating proft at constant currencies.
Customer Loyalty
We use the Net Promoter Score (NPS) to measure customer
loyalty. In 2014, we are aiming for an increase in NPS by four
percentage points (2013: 12.1%).
Employee Engagement
We use the employee engagement index to measure motivation
and loyalty of our employees, how proud they are of our company,
and how strongly they identify with SAP. We are committed
to achieving a score of 82% in 2015 (2013: 77%). Despite the
slight drop in employee engagement in 2013 compared to
2012, we expect to see an incremental increase in our industry-
leading score in 2014.
These four goals afrm our commitment to innovation and
sustainability, and will help us deliver on our vision and mission.
In addition to the primary KPIs, which directly measure our
performance with regard to our four company objectives,
SAP manages a large set of secondary performance indicators,
which infuence the primary KPIs in a variety of ways. Our
integrated report seeks to clarify some of those relationships,
for example the link between our energy consumption and our
margin.
Our main indicators are presented with more detail throughout
the report. For more information on strategic goals, see the
Internal Management System; Report on Expected Developments;
Customers; and Employees and Social Investment sections.

SAPs continued growth over four decades is attributable
to our focus on innovation, a broad portfolio, and our ability
to stay close to our customers and understand their ever-
changing needs.
OUR VISION AND MISSION
SAPs vision is to help the world run better and improve peoples
lives. Our mission is to help every customer become a best-run
business. We do this by delivering technology innovations that
address the challenges of today and tomorrow without disrupting
our customers business operations. For example, enterprise
mobility is transforming usage of IT; in-memory technology is
simplifying the IT architecture in the enterprise and driving
high-value applications; and cloud delivery of IT solutions is
simplifying the consumption of technology. We ofer solutions
that drive business outcomes and enable our customers to
run better. We help our customers derive value from their SAP
solutions in a cost-efective and predictable way, with our
professional services, support, and cloud delivery.
OUR GOALS FOR SUSTAINED BUSINESS SUCCESS
SAP has strong ambitions for sustainable business success,
both for our company and for our customers. We believe the
most important indicators to measure this success comprise
both fnancial and non-fnancial indicators: revenue, margin,
customer loyalty, and employee engagement.
Revenue
We aim to achieve at least 22 billion total revenue by 2017.
SAP still aims to achieve at least 20 billion total revenue by
2015 (2013: 16.9 billion non-IFRS total revenue). An important
part to achieving this is our continued focus on innovations, as
we expect to become the cloud company with 3.0 to 3.5 billion
total revenue from our cloud business by 2017. In 2014, we
expect to increase non-IFRS software and software-related
services (SSRS) growth by 6% to 8% at constant currencies.
Simplify software consumption by moving our entire
portfolio to the cloud: We are transitioning our consumption
model to SAP Cloud powered by SAP HANA where we can
deliver end-to-end solutions and drive business outcomes for
the customers. We will ofer our entire portfolio of solutions
applications, analytics, and platform through SAP Cloud
powered by SAP HANA. We will move our core SAP Business
Suite software to the cloud as a managed service, delivered
by both SAP and our partners. We will also accelerate our
investments in line-of-business public cloud solutions across
SuccessFactors, Ariba, and our cloud portfolio, all running
on SAP HANA. We will deliver a true, integrated cloud to our
customers. As we are committed to ofering fexibility and
choice, we will continue to ofer an on-premise deployment
model to our customers.
Simplify our products with SAP HANA as the common
platform: We will standardize every SAP product (including
SuccessFactors and Ariba) on the common SAP HANA
platform, and deliver integration across our portfolio. This will
drive a simplifed suite experience for our customers and
partners. Our partners and ecosystem can either extend our
solutions or build end-to-end applications based on the
SAP HANA platform.
Simplify the user experience: We will simplify the user
experience (UX) by ofering a mobile frst approach based
on SAP Fiori applications, which ofer a simple and easy-to-
use experience for broadly used SAP software functions that
work seamlessly across devices. We will build applications
that show empathy with the user and dramatically improve
the experience of our customers customers and our
customers employees.
OUR STRATEGY: SIMPLIFY EVERYTHING WITH
SAP CLOUD POWERED BY SAP HANA
Organizations around the world are now entering a new era of
business model innovation, made possible by the convergence
of cloud, mobile, social, and in-memory technologies.
However, businesses often contend with layers of IT complexity
that have been built up over the decades. This complexity is the
result of several factors, including the proliferation of hardware
and custom applications. In addition, investments in innovations
often take a long time to implement or to realize business value.
Due to the complexity of the current consumption model, cus-
tomers are not able to respond fast enough to changing market
conditions. We believe that simplicity is the key: By solving the
challenge of business complexity, we can help unlock our
customers innovation potential. We are committed to leading
this simplifcation.
In todays technology industry, the biggest winners have
grown by ofering simplicity and ease of consumption over a
cloud model, which has translated to massive user adoption
and market success.
In 2014, SAP will focus on helping its customers simplify
everything, so they can do anything.
With the SAP HANA platform, we have an opportunity to
simplify our product portfolio and IT landscape for our customers.
SAP HANA can radically simplify enterprise applications
as it collapses the entire IT stack. With SAP HANA Cloud
Platform, we have the ability to take our core on-premise
applications to the cloud and ofer a choice of cloud deployments
to our customers.
With SAP Cloud powered by SAP HANA, we will focus our
simplifcation on three areas simplifying our consumption
model, simplifying our portfolio, and simplifying user experience.
55 Vision, Mission, and Strategy
Additionally, SAP will drive innovation and top-line growth
across the following dimensions:
Drive the Big Data agenda for our customers with our
real-time in-memory SAP HANA platform and predictive
analytics solutions
Establish SAP HANA as a standard enterprise business
platform and monetize through partners and ecosystem
Focus on the customers customer by extending to business-
to-business-to-consumer (B2B2C) through our portfolio of
omnichannel and CRM solutions
Drive accelerated growth in selected industries such as
banking, insurance, retail, public sector, and healthcare
Emerging markets will continue to be a growth driver, with
high double-digit growth in software and cloud revenues
expected through 2017. In addition to our investments in
China, Russia, and the Middle East, we are expanding our
investments in Africa.
We will stay committed to our customers success and evolve
our execution to drive further value creation for our customers.
We strive to provide our customers a signifcant competitive
advantage and to help make their growth more sustainable
fnancially, ecologically, and socially.
For more information about SAPs goals, see the Report on
Expected Developments section.

In addition to simplifying our business model, we will focus
on end-to-end delivery of industry-specifc solutions that can
drive business value and outcomes. We will continue to build
an open ecosystem and our partner network to deliver SAP
Cloud powered by SAP HANA on their cloud infrastructure. Our
ecosystem will play a vital role in building new solutions on
the SAP HANA platform and delivering value to our customers.
With our focus on simplifcation, we aim to better innovate and
grow.
Today SAP only receives a small percentage of each customers
overall IT spend. By investing in innovations and shifting our
customers to a cloud business model, we will be able to help
reduce their total cost of ownership (TCO) on IT. This enables
customers to reinvest the TCO savings in new innovations and
SAP could capture a higher share of customer IT spend.
Our sales model has been focused on charging a one-time,
upfront fee for a perpetual license to our software that is typically
installed at the customer site. In addition, the customer usually
concludes a maintenance contract that covers support and
software updates. As we see customers preferences evolve,
we are expanding the delivery of our solutions in the cloud,
which we believe is a simple and efcient software consumption
model. Our cloud solutions are ofered under a subscription-
based licensing model. With this model, the customer periodi-
cally pays a fee to use software for a limited amount of time.
This software is installed at an SAP or an SAP partner location,
and the customer accesses the software through the Internet.
To help companies invest in SAP solutions and the associated
services and hardware, the SAP Financing service ofers
customers payment plans optimized for maximum economic
beneft. It can help preserve liquidity, provide an alternative
to credit from their existing banking relationships, and balance
their budgetary priorities while giving customers the fexibility
to choose the best possible solution.
We measure the outcome of our activities through four
performance indicators: revenue, margin, customer loyalty, and
employee engagement. Each of these directly correlates with
our ability to deliver fnancial returns to our providers of capital.
Ultimately, it is our highly engaged employees who build our
customers success and loyalty to SAP.
Creating economic, social, and environmental value over the
long-term is central to our vision of helping the world run
better and improving peoples lives. To realize our vision, SAP
provides software and services to customers throughout the
world, all based on our deep expertise in business processes
spanning 25 industries.
To provide software and related services to our customers, we
rely on fnancial capital provided by investors. We leverage our
intellectual capital to continually increase our knowledge base
and expertise. Engaged, highly skilled, and agile employees
are central to innovating with and building relationships with
our customers and partners, and ultimately to our business
success.
Our direct sales organizations drive most business development.
Sales go-to-market strategies are established at the global
level, and adapted and executed by the regional subsidiaries.
Our customer-facing employees, in close collaboration with
sales support and marketing, drive demand, build pipeline, and
enhance relationships with customers within our target indus-
tries. Our marketing eforts cover large enterprises as well as
small and midsize enterprises. We believe our broad portfolio
of solutions and services enables us to meet the needs of
customers of all sizes and across industries.
In addition, our extensive ecosystem provides scalability to
meet the demand for SAP innovation and provide customers
with a wide selection of third-party competencies. We have
developed an independent sales and support force through
independent value-added resellers. We have also established
partnerships with hardware and software suppliers, system
integrators, and third-party consultants. For more information,
see the Partner Ecosystem section.
Business Model
57 Business Model
We also leverage our expertise in business processes across
industries to direct our innovations to the worlds greatest
challenges, such as the social and environmental strains posed
by a rapidly expanding global middle class. Our goal is to create
long-term value by providing solutions not just for the current
challenges faced by our customers, but also those of the
future. In this way, we see our role moving beyond the creation
of new efcient solutions: We want to help fundamentally
change how people live, conduct business, and use software.
This framework underscores how SAP can create its greatest
impact through the use of our solutions by more than
253,500 customers worldwide.
SAP contributes to the creation of long-term value for society
in a number of ways. At SAP and within our ecosystem, we
support job creation and economic prosperity through demand
for highly qualifed workers to sell, implement, and enhance
our software for customers. Our solutions support the learning
and talent development of our customers employees.
Other SAP solutions enhance health and safety, both on the
manufacturing side and in the fnal consumer products, which
impact millions of people worldwide.
Our greatest positive environmental impact stems from
enabling improvements through the solutions we provide to
customers. For example, our software plays a primary role in
driving supply chain optimization, efciency gains in production
processes, and transparency regarding energy consumption
and emissions.
SOLUTIONS
SAP has built a deep expertise in more than 40 years of delivering
market-leading software to distinct industries and lines of
business. Our end-to-end solutions for industries and lines of
business combine assets across our product, service, technology,
and market categories to solve specifc customer challenges.
Solutions for Lines of Business
Our line-of-business solutions are relevant across all industries,
providing best-practice capabilities to key functional areas
within an organization. As a result, they enable professionals
to excel within their respective disciplines. Our portfolio of
solutions currently covers 12 lines of business:
Asset management
Corporate strategy and sustainability
Finance
Human resources
Information technology
Manufacturing
Marketing
Procurement
R&D and engineering
Sales
Service
Supply chain management
OUR FOCUS ON CUSTOMERS AND INNOVATION
SAPs portfolio of products, solutions, services, and support is
designed with customer centricity in mind. Our solutions help
customers address the major trends and issues of our time
such as the unprecedented power of people to connect, the
ubiquity of mobile technology, the pressures of population
growth and rapid urbanization, and the increasing demand on
natural resources. Our software enables companies of all sizes
to better connect to their customers and suppliers, and to
measure, track, and manage their sustainable operations. Our
solutions also address our customers expectations for shorter
innovation cycles, an attractive total cost of ownership (TCO), a
superior user experience, and choice of consumption options
whether on premise or in the cloud.
SAP's portfolio ofers solutions to customers of all sizes and
across 25 industries, all around the globe. The platform for all
our solutions is called SAP HANA. SAP was the frst company
to introduce an in-memory database not only for analytics,
but also for running complete enterprise applications in main
memory. SAP HANA is an in-memory data platform that is
deployable as an on-premise appliance or in the cloud. It is a
revolutionary platform best suited for performing real-time
analytics, and developing and deploying real-time applications.
Due to its hybrid structure for processing transactional work-
loads and analytical workloads fully in-memory, SAP HANA
combines the best of both worlds. It also ofers a unique
opportunity for business innovation, simplifying IT landscapes,
reducing TCO, and boosting performance by a wide margin.
All of our products will be enabled to run on the SAP HANA
platform, and we continue to make SAP HANA a key diferentiator
in both technology and business applications across our entire
portfolio.
Portfolio of Products,
Solutions, and Services
59 Portfolio of Products, Solutions, and Services
Industry Sector Industry Portfolio
Consumer

SAP for Consumer Products
SAP for Life Sciences
SAP for Retail
SAP for Wholesale Distribution
Discrete manufacturing

SAP for Aerospace & Defense
SAP for Automotive
SAP for High Tech
SAP for Industrial Machinery & Components
Energy and natural
resources

SAP for Chemicals
SAP for Mill Products
SAP for Mining
SAP for Oil & Gas
SAP for Utilities
Financial services SAP for Banking
SAP for Insurance
Public services

SAP for Defense & Security
SAP for Healthcare
SAP for Higher Education & Research
SAP for Public Sector
Services

SAP for Engineering, Construction & Operations
SAP for Media
SAP for Professional Services
SAP for Sports & Entertainment
SAP for Telecommunications
SAP for Transportation & Logistics
Solutions for Small Businesses and Midsize Companies
SAP ofers a number of targeted solutions for small businesses
and midsize companies, including the SAP Business All-in-One
solution, the SAP Business One application, and Edge solutions,
which combine business management and business intelligence
software. These solutions are targeted and optimized for
small businesses and midsize companies, and provide growing
enterprises with the capabilities they need to compete in a
global market.
SAP also ofers afordable, scalable solutions in the cloud, such
as SAP Business ByDesign and SuccessFactors HCM Suite.
These solutions are relevant for companies of all sizes, including
small and midsize enterprises. Additionally, we ofer SAP
We deliver these solutions on premise or through the cloud as
software-as-a-service (SaaS) oferings:
SAP Cloud for Human Resources: Together with existing HR
cloud solutions from SAP, SuccessFactors, an SAP company,
ofers a full suite of cloud solutions that help companies
improve workforce productivity and engage, train, motivate,
and retain their people.
SAP Cloud for Finance: Cloud solutions that support key
fnancial processes including travel and expense reporting.
SAP Cloud for Sales, SAP Cloud for Service, SAP Cloud for
Marketing: These individual cloud portfolios ofer applications
that manage all aspects of customer interaction marketing,
sales, service while employing next-generation social
capabilities.
SAP Cloud for Procurement: The portfolio from Ariba, an
SAP company, combines the worlds largest cloud-based
business network with cloud-based applications for buying,
selling, and managing cash used by companies around the
globe to connect to their trading partners.
Cloud Suites: SAP ofers SAP Business Suite powered by
SAP HANA in the cloud. In addition, SAP Business ByDesign
and SAP Business One Cloud provide two cloud suites for
subsidiaries and small businesses.
Solutions for Industries
For decades, SAP has developed deep expertise within specifc
industry groups. Our product development teams include
professionals from within those industries, and we continually
engage with customers to develop solutions that represent
industry best practices. With the 2013 addition of the SAP for
Sports & Entertainment industry portfolio, SAP now supports
enterprises in 25 industries.
SAP Business Suite is also available powered by SAP HANA
as our next-generation business suite that captures and
analyzes data in real time on a single in-memory platform. In
the past, companies would run separate disk-based systems;
one to capture transactional data, and one to analyze data in
a data warehouse. SAP Business Suite powered by SAP HANA
allows customers to work with a single in-memory data
management system, empowering customers to run their
business in real time to transact, analyze, and predict instantly
and proactively. This gives companies the ability to translate
real-time insights into action immediately, while removing the
complexity of redundant system data and systems. Customers
can now manage mission-critical business processes, such as
planning, execution, reporting, and analysis, in real time using
the same relevant live data. This simplifcation lowers TCO.
Analytics
Our analytics oferings enable users to unleash the power of
collective insight by helping them collect massive amounts of
Big Data and use it to drive better business outcomes. The
solutions enable users to unlock the data they need empowering
them with the right information at the right time to make
insightful business decisions, anticipate change, and uncover
new opportunities. When using software powered by SAP
HANA, companies can gain insight by overcoming the classic
trade-of between the speed and fexibility of data analysis.
As a result, data analysis becomes much faster and more
cost-efective.
Business One Cloud to small businesses and midsize companies.
SAP Business One Cloud is a comprehensive and easy-to-
consume cloud ofering with predictable costs.
PRODUCTS
In 2013, SAP ofered innovative products in fve market categories:
Applications, Analytics, Mobile, Database and Technology, and
Cloud, all powered by the SAP HANA platform.
We will continue to ofer products in these market categories,
along with innovations designed to meet customer needs now
and in the future. As described in the Vision, Mission, and Strategy
section of this management report, our strategy will focus
even more on how our products deliver simplicity, better business
outcomes, and sustainable business value.
In 2013, our product portfolio comprised the following:
Applications
SAP is the recognized leader in enterprise applications. Based
on our leading technology and our unmatched business
process know-how, we deliver innovations without disruptions.
SAP Business Suite software helps create a comprehensive
business process platform for companies to run better and
perform better every day.
The main applications in SAP Business Suite are:
SAP Customer Relationship Management (SAP CRM):
Provides a comprehensive set of functionality for marketing,
sales, and service to engage with customers.
SAP ERP: Supports critical business processes such as
fnance, HR, and other essential corporate functions.
SAP Product Lifecycle Management (SAP PLM): Manages
the product and asset lifecycle across the extended supply
chain.
SAP Supplier Relationship Management (SAP SRM):
Supports key procurement activities.
SAP Supply Chain Management (SAP SCM): Helps adapt
supply chain processes to a rapidly changing competitive
landscape.
Our portfolio of mobile solutions includes:
Enterprise mobility management: In many organizations,
employees use diferent types of mobile devices to access
critical enterprise data, content, and applications. To address
this demand, SAP ofers the SAP Afaria mobile device
management solution and the SAP Mobile Documents solution.
Mobile apps: SAP has a variety of mobile apps that interface
with our on-premise solutions and address line-of-business,
industry, and consumer needs. In addition, SAP has opened
our mobile development platform to our partner ecosystem
to support the growing demand for mobile apps.
SAP Mobile Platform: SAP Mobile Platform combines Sybase
Unwired Platform, the former Sybase 365 Mobilizer Platform
(for business-to-consumer applications), and Agentry from
the acquired company Syclo into a single platform, thus
supporting mobile development and deployment across the
entire enterprise.
Database and Technology
Our database and technology portfolio provides a solid and
comprehensive foundation for business applications. SAP
HANA, our ground-breaking in-memory platform, has redefned
innovation in the database and technology market and has
become the fastest-growing product in our history. We depend
on our ecosystem to expand our reach, and accelerate growth
and adoption of SAP database and technology products
beyond our installed base customers.
In addition to SAP HANA, we ofer a comprehensive family of
database and technology solutions that includes:
Application development and integration: SAP NetWeaver
provides a comprehensive technology platform, designed
to efciently develop, run, and extend business applications.
SAP NetWeaver provides technology and enterprise software,
such as the SAP NetWeaver Business Warehouse (SAP
NetWeaver BW) application, and the SAP NetWeaver
Application Server, SAP NetWeaver Portal, and SAP NetWeaver
Process Orchestration components.
Database: We ofer the technology to make up a real-time
data platform, including SAP HANA, SAP IQ database
software, SAP Adaptive Server Enterprise (SAP ASE), and the
SAP SQL Anywhere suite.
Analytic solutions from SAP include:
Business intelligence (BI): Helps users to make fact-based
decisions with enterprise business intelligence solutions
that enable users to engage with all their data, on any device,
across any platform. Our BI solutions include the SAP
BusinessObjects BI platform, SAP Crystal Reports, SAP
BusinessObjects Dashboards, and SAP Lumira.
Enterprise performance management (EPM): Helps
companies improve performance, organizational agility, and
decision making. SAP solutions for EPM include SAP
Business Planning and Consolidation, SAP Proftability and
Cost Management, SAP Financial Consolidation, and SAP
Disclosure Management applications.
Governance, risk, and compliance (GRC): Provides
organizations with a real-time approach to manage GRC
across heterogeneous business environments. SAP solutions
for GRC include the SAP Risk Management, SAP Access
Control, and SAP Global Trade Services applications as well
as the SAP Sustainability Performance Management analytic
application.
Predictive analytics: Brings advanced analytics capabilities
to a broad spectrum of users beyond data scientists to
line-of-business users and analysts in the workplace to
help uncover new business opportunities, predict trends, and
proactively respond to change. This is made possible by
automating key modeling and analytical tasks and enabling
faster deployment and adoption of predictive analytics tools.
Mobile
Today's businesses demand mobile access to critical business
information. Mobile solutions from SAP ofer the foundation
for enterprise mobility and seamless integration with the core
enterprise applications of our customers. SAP is recognized as
a market leader in enterprise mobility.
SERVICES AND SUPPORT
SAP ofers comprehensive services and support to help our
customers maximize the value of their SAP investments by
ofering higher value realization, faster adoption of innovation,
and higher efciency in the implementation of our solutions.
Our services and support portfolio covers the entire end-
to-end application lifecycle, from a tight integration with our
development organization, to accelerating innovation and
continuous improvement of our software solutions, to complete
risk and quality management.
Software-Related Services
Custom Development
The SAP Custom Development organization specializes in
building individual software solutions that address the unique
needs of our customers, and that ft seamlessly with existing
SAP software. SAP Custom Development draws on our
innovations, especially SAP HANA, to deliver unmatched
impact and value for specifc customer use cases.
Maintenance and Support
SAP ofers a comprehensive and tiered maintenance and
support model to customers of our on-premise solutions on
a global basis. This support ofering primarily includes SAP
Enterprise Support and SAP Standard Support oferings.
SAP Enterprise Support: Our premier maintenance
and support ofering is designed as a strategic, long-term
partnership with our customers.
SAP Standard Support: Our basic support ofering
delivers functions, knowledge, and tools that help customers
implement, maintain, and enhance their SAP solutions.
Cloud
In a world where customers need to respond quickly to changing
market conditions, the cloud model ofers an ideal combination
of fexibility, afordability, and rapid time to value. With SAP
Cloud powered by SAP HANA, we are helping customers enjoy
the innovation potential of a cloud-based setup. At the same
time, we are simplifying our consumption model, our product
portfolio, and our customers user experience.
Today, SAP ofers one of the most comprehensive cloud portfolios
on the market. With the decision to ofer all our products in
the cloud, the cloud category will evolve from a product category
to a deployment option for our customers to simplify the
consumption of our solutions. Our oferings span cloud applications,
business networks, and cloud platforms. In addition, we ofer
our customers a choice of diferent cloud deployments to ft
their business needs, such as public or private cloud models.
In 2013, SAP began ofering SAP Cloud powered by SAP
HANA, which includes infrastructure, platform, and software
as services in the cloud, incorporating the former SAP HANA
Enterprise Cloud managed cloud services ofering. It allows
entire enterprise systems to be run in the cloud and provides
customers with a new deployment option to gain immediate
value from the innovations of SAP HANA. This enables the
operation of mission-critical business applications as well as
new applications powered by SAP HANA. In providing such
services, we aim to enable organizations to realize faster time
to value coupled with lower total cost of ownership, and beneft
from increased fexibility and reliability.
In addition, SAP HANA Cloud Platform is a development
platform-as-a-service (PaaS) designed to help customers,
independent software vendors, and partners rapidly create
innovative enterprise software applications in the cloud
leveraging our leading in-memory technology.
SAP supports a hybrid model, allowing customers to integrate
new cloud services with their on-premise applications. This
gives customers the opportunity to consume new innovations
using the cloud while safeguarding their investments in their
existing application landscape.
Professional Services
Consulting Services
We ofer consulting services for the planning, implementation,
and optimization phase of our business solutions. Our
consultants engage in a wide range of services, including
business transformation, IT transformation, performance and
insight optimization, and business applications services. These
services help customers optimize business performance and
leverage the full power of SAP solutions.
SAP consultants also implement SAP Rapid Deployment
solutions, which combine preconfgured software and predefned
services, such as SAP Best Practices, templates, tools, and
user guides. By doing so, they help companies adopt innovations
more quickly and at transparent cost.
Education Services
The SAP Education organization ofers a complete portfolio
of multimodal learning that covers the learning needs of single
individuals, as well as organizations. We provide a consistent
curriculum for learners around the world, including online
e-learning, virtual live classroom sessions, learning on demand,
and classroom training. Our educational programs help people
become more profcient, efcient, and productive in their
use of SAP solutions. Every year, more than 500,000 individuals
are trained by SAP Education, making it one of the largest IT
training organizations in the world.
For more information about services and support from SAP,
see www.sap.com/services-support/svc.html. For more
information about how SAP handles security and privacy in our
products and services, see the Security and Privacy section
of the SAP Integrated Report 2013 online. For more information
about SAP products and solutions, see www.sap.com/pc/
index.html.

Our support portfolio also contains two additional premium
maintenance oferings:
SAP MaxAttention: These services provide the highest
possible level of support for our customers. The combination
of SAP MaxAttention and SAP Enterprise Support ofers
customers comprehensive all-round support. This strategic
ofering is designed for continuous business and co-innovation
with customers. Through the SAP Active Global Support
(SAP AGS) organization, SAP MaxAttention ofers support
services tailored to the requirements of the customer,
expertise acquisition by the customer, and continuous
cooperation at senior management level based on an
agreed-to balanced scorecard.
SAP ActiveEmbedded: These enhanced engagement
services help optimize solutions and accelerate adoption of
technologies without disrupting customer businesses.
For our cloud portfolio, support is included as part of our
cloud subscriptions. Customers have the option of choosing
standard, premium, and platinum support. In the premium
and platinum oferings, customers have access to support
oferings, such as access to a dedicated support account
manager.
where we need to make improvements. We are also showing
customers how we are addressing feedback. A prime example
is the use of SAP Service Marketplace to describe improvement
projects in a host of areas, from our licensing process to our
digital experience. Customers can also provide input into these
projects through idea place, an online platform from SAP, to
capture, discuss, and rate ideas.
The NPS shows how likely our customers would be to recommend
SAP to friends or colleagues on a scale of 010. To determine
this metric, we start with the percentage of promoters of SAP
those who give us a score of 9 or 10. We then subtract the
number of detractors those who give us a score of 06. The
method ignores passives, who give us a score of 7 or 8. The
NPS can range from 100% to +100%. For more information on
the NPS, see the Internal Management System section,
and the Non-Financial Notes section of the SAP Integrated
Report 2013 online.
STRONG CUSTOMER DEMAND
Our strategy focuses on ofering solutions and services to help
customers run better today and tomorrow. To do so we ofer
a spectrum of solutions from complete suites to applications
that are simple, lean, focused, quick to implement, and highly
mobile. In 2013, we saw customers embrace this strategy by
licensing or subscribing to the full range of SAP applications
from comprehensive solutions for large enterprises to the
latest mobile apps.
When SAP customers become best-run businesses, they can
create more sustainable business models which in turn helps
us ensure our own long-term viability. That is why we strive
to provide more than just software; we continually engage with
our customers at every stage not only during the sales and
implementation phases, but also through the sharing of best
practices and innovations.
One example of this strategy is our Customer Engagement
Initiative. This program ofers customers early insight into
cer tain aspects of our product road map, so they can infuence
the development cycle. In addition, it ofers customers the
opportunity to network on topics of mutual interest. These
networking opportunities take place at a variety of global
events, including the SAPPHIRE NOW and SAP d-code
(previously SAP TechEd) conferences, as well as virtual events.
CUSTOMER LOYALTY
We gauge customer loyalty through an annual survey that
measures our Net Promoter Score (NPS). Customer loyalty is
one of our four companywide strategic goals, along with
revenue, margin, and employee engagement. In 2013, our NPS
increased by 3.2 percentage points to 12.1%, compared with
8.9% in 2012. The increase achieved in 2013 showed us
that we are on the right track even though we had predicted an
increase of eight percentage points at the beginning of the
year. In addition, the results provided insights into diferent
geographic regions and issues, and will help inform our future
approach.
Our increased NPS refects our commitment to listening to our
customers and responding to their needs. Our goal is to best
support their success and the success of SAP. For example, we
are expanding on the insights provided by our surveys through
in-person focus groups that explore customer feedback in
more depth. These sessions have enabled us to identify the
underlying reasons behind issues and focus more precisely on
Customers
65 Customers
AMERICAS REGION
ExxonMobil, an American multinational oil and gas corporation,
selected the SAP Cloud for Sales solution and the SAP Sales
and Operations Planning solution (powered by SAP HANA)
to support demand and supply balancing. Building on its
on-premise SAP software deployment with cloud solutions
from SAP, ExxonMobil expects to optimize logistics planning
processes, increase planning accuracy, and shorten planning
cycle time through the improved management of Big Data.
Levi Strauss & Co, a well-known clothing brand, chose to
run its analytics platform through SAP NetWeaver Business
Warehouse powered by SAP HANA. With this, Levi Strauss
expects to consolidate fnancial reporting globally, get
real time insight into product performance, and help stock
the right products in the right stores at the right time.
Petrobras, Brazils largest energy company, is already live
with the SAP Business Planning and Consolidation application.
Petrobras expects this implementation to improve forecast
accuracy and drive real-time fnancial planning based on
latest oil prices and currency fuctuations.
ProHealth Care, a community-based healthcare system
located in the United States, selected the SuccessFactors
Enterprise bundle. With SAP, ProHealth Care expects to
align with its top HR initiatives, focusing on patient safety and
satisfaction.
Some examples by region include the following customers:
EUROPE, MIDDLE EAST, AND AFRICA (EMEA) REGION
The Deutscher Fussball-Bund (DFB) is made up of the German
Association Football League at the professional level and
fve regional and 21 state associations at the semi-pro and
amateur levels. The customer plans to tailor campaigns and
promotions to fans through the SAP CRM powered by SAP
HANA rapid-deployment solution and SAP Event Ticketing
software.
Eldorado, a large consumer electronics and domestic
appliances retailer in Russia, selected the SAP CRM powered
by SAP HANA application, as well as the SAP 360 Customer,
SAP Planning for Retail, and hybris OmniCommerce for retail
to help improve customer service and achieve faster results.
With SAP and hybris software, Eldorado expects to track and
combine consumer information across channels in real time,
so they can run their business and achieve full intimacy with
their consumers.
Nestl Nespresso is a world leader in cofee machines and
cofee maker technology. With the SAP Cloud for Sales solu-
tion, Nespresso aims to extend its premium experience by
understanding and engaging customers at every step of the
buying journey.
The Royal Swaziland Sugar Corporation, a leading sugar
producer in Africa, has chosen to adopt SAP Business Suite
powered by SAP HANA. SAP Business Suite software will
allow the company to consolidate multiple systems.
Unilever, one of the largest multinational consumer goods
companies in the world, partnered with SAP to develop the
SAP Retail Execution mobile app on SAP Mobile Platform.
With this SAP software, Unilever expects to empower its large
sales force, merchandisers, and shopping assistants across
multiple countries in Asia and Europe to accelerate opportu-
nities at the point of sale and increase customer satisfaction.
ASIA PACIFIC JAPAN (APJ) REGION
Agricultural Bank of China (ABC), one of the four Tier 1 banks
in China, selected SAP ASE and SAP IQ software to support
synergistic development in rural and urban areas. With SAP,
ABC expects to capitalize on its comprehensive business
portfolio and extensive distribution network through the use
of an advanced IT platform.
China Resources Enterprise (CRE), a large producer of
consumer goods in China, selected the SAP 360 Customer
solution and the SAP Trade Promotion Management application.
With SAP software, CRE expects to gain the speed and
fexibility it needs to execute its winning strategy from any
device, anytime, anywhere.
Net One Systems, a leading network integrator in Japan,
selected the SAP ERP application to promote innovation
in its operating processes, construct an efcient IT platform,
and strengthen internal controls by linking information
among its operations.
Shanghai Huayi Group, one of China's largest chemical
manufacturers, operates more than 20 wholly owned and
shareholding subsidiaries. With SAP software, Shanghai
Huayi Group expects to improve capital operations, resources
sharing, and technological management to advance the
company into the worlds top 50 chemical makers.
Varun Beverages Limited, a food and beverages company
based in India, selected SAP Business Suite powered by
SAP HANA to support faster, smarter, and real-time decision
making. With SAP software, Varun Beverages expects
to provide real-time analytical reporting to key stakeholders,
while achieving a 20% reduction in the MRP process and
a 15% reduction in overall order processing time.

67 Customers
SAP HANA
In 2013, SAP made further investments in our next-generation
in-memory platform, SAP HANA, as the foundation for all of
our products, solutions, and services so that our customers
can run their businesses in real time. A rich and growing
ecosystem of partners further drives the adoption of SAP HANA
as an open platform, and a number of startup companies now
deliver new and innovative applications built on the SAP HANA
platform.
Cloud
To further advance our leadership in the cloud, we continued
to expand our portfolio of cloud-based applications. For example,
customers that want to accelerate their transition to the
real-time enterprise can now take advantage of our latest
innovation in the cloud, SAP Cloud powered by SAP HANA,
which includes infrastructure, platform, and software as services
in the cloud, incorporating the former SAP HANA Enterprise
Cloud managed cloud services ofering. Core elements include
an elastic infrastructure, the in-memory platform, and services
for deploying SAP or custom applications in real time.
SAP Business Suite powered by SAP HANA
Our highly engaged and diverse research and development
teams are also working to improve SAP Business Suite by
simplifying the end-to-end experience of using the applications
while also optimizing performance. Combining SAP Business
Suite with SAP HANA was a major milestone in 2013, enabling
customers to make decisions in real time and gain unmatched
visibility into business processes In addition, the software
helps customers unleash their full potential when it comes to
meeting consumer and competitive demands through
real-time access to data, real-time analytics, and unprecedented
improvements in performance.
Adhering to our imperative of SAP runs SAP, SAP has led
the way in the adoption of SAP Business Suite powered by
SAP HANA by going live internally with SAP CRM and SAP ERP
applications now running on SAP HANA in 2013.
Research and development is the source of the discoveries
that will shape the future for SAP and its customers. At
SAP, research and development is a global efort that is highly
collaborative, focused on customer value, and involves
co- innovation with customers, partners, and academia.
GLOBAL DEVELOPMENT, LOCAL FOCUS
Our Products & Innovation organization is truly global, with the
majority of development colleagues located in 14 SAP Labs
locations in 12 countries (see graphic). SAP Labs are globally
distributed, situated within major technology hubs where
access to talent and the latest technology trends create an
optimal setup for innovation.
SAP Labs locations in fast-growing markets strive to produce
market-relevant solutions that complement SAPs global product
portfolio. In addition, they are structured in a manner that
allows for close interaction with local stakeholders, including
customers, partners, and universities. This strategy of distrib-
uted development, focusing on locations with talent availability,
fostering diversity and access to new ideas, while also ensuring
local market relevance, has proven highly successful for SAP.
To every technology and engineering challenge, SAP brings
the strength and experience of a global development team. This
helps ensure the rapid impact of research and development
activities on our solution portfolio, and contributes to an
ever-increasing pace of innovation.

CONTINUOUS INNOVATION
Research and development is only successful if it provides
continuous improvement for existing products, while at the
same time executing against promising new concepts that
can help SAP enter new markets. And it must do so better and
faster than our competition.
The following were among our 2013 R&D accomplishments:
New Industry Solutions
Across industries, we continue to look for opportunities to
help our customers and partners expand their businesses by
analyzing, evaluating, and co-innovating business processes.
In 2013, for example, SAP brought its knowledge and experience
to the sports and entertainment industry. Our solutions help
sports teams, leagues, and venues run faster, smarter, and simpler.
In addition, they are designed to deepen fan engagement, drive
on-feld performance, and optimize business efciency.
SAP Fiori
With SAP Fiori applications, SAP continues to further renew
and simplify the user experience for all our products. For example,
SAP Fiori ofers an intuitive end-to-end user experience for
broadly and frequently used SAP software functions that work
seamlessly across devices desktop, tablet or smartphone.
Major Development Locations (SAP Labs) in 12 Countries
69 Research and Development
At the end of 2013, our total full-time equivalent (FTE) count in
development work was 17,804 (2012: 18,012). Measured in
FTEs, our R&D headcount was 27% of total headcount (2012:
28%). Total R&D expense includes not only our own personnel
costs but also the external cost of works and services from
the providers and cooperation partners we work with to deliver
and enhance our products. We also incur external costs
for translating, localizing, and testing products, for obtaining
certifcation for them in diferent markets, patent attorney
services and fees, strategy consulting, and the professional
development of our R&D workforce.
PATENTS
As a leader in enterprise applications, SAP actively seeks
intellectual property protection for innovations and proprietary
information. Our software innovations continue to strengthen
our market position in enterprise solutions and services. Our
investment in R&D has resulted in numerous patents. SAP
holds a total of more than 5,500 validated patents worldwide.
Of these, more than 700 were granted and validated in 2013.
While our intellectual property is important to our success,
we believe our business as a whole is not dependent on any
particular patent.

A CULTURE OF CUSTOMER CENTRICITY,
EMPOWERMENT, AND ACCOUNTABILITY
Today, SAPs development is closely attuned to customers
business environments, product landscapes, and users. In
addition, we foster a development culture of customer centricity,
empowerment, and accountability. We believe that our work
impacts such factors as customer loyalty and employee
engagement, and that those factors have signifcant relevance
to our companys fnancial performance.
Our design-led research and development methodology puts
the customer and user at the center during the entire devel-
opment process. This results in robust solutions to complex
business challenges solutions that are technically feasible,
desirable to users, and viable to the business for both SAP and
its customers.
RESEARCH AND DEVELOPMENT EXPENDITURE
SAPs strong commitment to research and development (R&D)
is also refected in our expenditures: In 2013, we increased our
R&D expense (IFRS) slightly by 21 million, to 2,282 million
(2012: 2,261 million). We spent 13.6% of total revenue on R&D
in 2013 (2012: 13.9%). Our non-IFRS R&D expense as a portion
of total operating expenses declined slightly from 19.2% to
19.0% year over year. While we continue to increase our innova-
tive capacity, we increased our efciency.
Research and Development (IFRS)
millions | change since previous year
1,591
2%
1,729
+9%
1,935
+12%
2,261
+17%
2,282
+1%
2009 2010 2011 2012 2013
Providing implementation and other services: SAP has
strong partnerships with a broad network of IT professional
services frms that provide consulting, system integration,
hosting, education, and more. At the end of 2013, our partners
collectively had more than 380,000 skilled resources in SAP
solutions and technology. These companies are critical to the
successful implementation and deployment of SAP solutions
at customers we serve together. In response to growing cus-
tomer demand for fexible deployment and purchase options,
SAP is working closely with the partner ecosystem to
ofer innovative cloud-based oferings and business models,
including OEM and managed cloud services, and by
making SAP platforms and applications available through
public cloud oferings.
To help the SAP partner ecosystem achieve its business goals,
SAP provides an extensive array of business support oferings.
SAPs fagship partner program, SAP PartnerEdge, ofers a
tiered engagement model that provides marketing, sales, and
technical enablement, as well as education, deal support,
and a variety of other benefts and resources. We provide SAP
global partners a select group of leading global technology,
software, and services companies with dedicated teams that
work closely with them to proactively engage in business
development and technical initiatives addressing specifc market
needs. Many of our partners participate in SAP Community
Network, an online community that facilitates networking and
information sharing for technical professionals. In addition,
many participate in the SAP Listens program, which surveys
partners for feedback and provides insight into projects we
have initiated to address partner issues.
A vibrant partner ecosystem is essential to SAPs success, and
is a key component in our ability to achieve our mission of
helping businesses run better and improving the lives of people
everywhere.

SAP engages with an extensive partner ecosystem to address
the needs of customers around the world. With nearly 11,500
partners at the end of 2013, we continue to foster our partner
ecosystem. Partners operate independently of SAP, and com-
plement our business in one or more of the following ways:
Selling SAP software: SAP partners help companies of all
sizes identify, purchase, and deploy the ideal solutions to
address their business needs. SAP value-added resellers
(VARs) and multitier distribution channels ofer local market
and industry expertise that addresses specifc market needs.
SAP closely aligns its sales eforts with those of our partners
through well-defned rules of engagement that outline each
organizations roles and responsibilities. In most markets,
partners are the primary sales channel to address the needs
of small and midsize enterprises (SMEs). Our company also
sells select products through our own online channel, SAP
Store, which includes complementary solutions developed by
SAP partners. In addition, SAP resells applicable partner
solutions as part of our solution extensions portfolio. These
partner-developed solutions are tested, validated, and
approved by SAP development organizations, and supported
by SAP.
Developing solutions that complement SAP software: SAP
has a vibrant community of partners that develop on SAP
platforms and create complementary products integrating
with SAP applications. This community is vital to providing
our customers with a broad portfolio of solutions that leverage
the capabilities of SAP HANA, SAP Mobile Platform,
our cloud oferings, and more. At the same time, we maintain
strategic relationships with industry-leading technology,
software, and services frms. SAP engages with the partner
community in the development of new solutions, and works
closely with partners on new product initiatives. Partners
can embed SAP technology within their oferings under an
original equipment manufacturer (OEM) licensing agreement.
We also work actively with partners to enable new and
innovative delivery and go-to-market approaches to support
customer needs and preferences. Beyond these formal
partnerships, companies can also certify their integration
with SAP technology through the SAP Integration and
Certifcation Center (SAP ICC).
Partner Ecosystem
71 Partner Ecosystem
For more information about our acquisitions, see the Notes to
the Consolidated Financial Statements section, Note (4).
VENTURE ACTIVITIES
Through SAP Ventures, which comprises our consolidated
investment funds, SAP has partnered with renowned
entrepreneurs worldwide to build industry-leading businesses.
SAP Ventures has supported more than 100 companies on fve
continents for more than 15 years. Many of these companies
have been acquired or have become publicly listed companies.
In October, SAP announced its commitment to invest
US$650 million through a new consolidated investment fund,
named SAP Ventures Fund II.
In 2013, SAP made a total commitment of US$1 billion bringing
SAP Ventures total available investment pool to more than
US$1.4 billion for use over the lifetime of its respective funds.
Investments through the funds are currently ongoing and
depend on capital calls from the funds. SAP Ventures seeks
companies with an established market presence that are
growing very fast, and which they can help fuel their growth by
adding expertise, relationships, geographic reach, and capital.
It invests globally with a particular focus on emerging companies
in Europe, India, and the United States, as well as in Brazil and
China.
For more information about our consolidated investment
funds, see the Notes to the Consolidated Financial Statements
section, Note (34).

SAP views acquisitions as investments in people, technologies,
and growth. In 2013, SAP made the following acquisitions:
ACQUISITIONS
In March, SAP acquired Ticket-Web GmbH & Co. KG, a provider
of ticketing solutions and niche customer relationship
management (CRM) software for sports and entertainment
promoters. The acquisition helped SAP enter the sports and
entertainment industry, as we can now ofer enhanced
solutions that help promoters, venues, and teams market
events over the Internet and better manage arenas.
In April, SAP acquired certain assets from KMS Software
Company LLC, a provider of Web-based human capital
management software and solutions in the areas of
electronic onboarding, of-boarding, forms management,
and new-hire engagement.
In April, SAP acquired Camilion, a provider of product
development, product lifecycle, and underwriting solutions
for the insurance market. These solutions allow SAP customers
to streamline the management and creation of new insurance
products, providing insurance brokers and underwriters with
simple tools to help speed up transactions and reduce costs.
In April, SAP acquired SmartOps, a provider of inventory and
service-level optimization software solutions. This acquisition
helps SAP develop real-time supply chain software solutions
on the SAP HANA platform. The solutions help customers
optimize inventory and service levels, freeing up working
capital for innovation and growth.
In August, SAP acquired hybris, one of the leading commerce
technology companies. This is an investment in the future
of commerce and customer engagement. We continue to
combine the omnichannel commerce solutions of hybris with
enterprise technology and industry leading in-memory,
cloud, and mobile innovations from SAP. Together, these
capabilities can help facilitate new levels of customer insight
and engagement.
In October, SAP acquired KXEN, a provider of predictive
analytics technology for line-of-business users and analysts.
The addition of KXEN solutions will provide easy-to-use
predictive capabilities for the extensive SAP customer base.
Acquisitions
RECRUITING TALENT TO FULFILL OUR VISION
Throughout 2013, we continued to recruit employees through-
out the world, with particular emphasis on emerging markets,
including Brazil, China, India, Russia, and Turkey. We are also
focused on countries in Africa namely, Kenya, Nigeria, and
South Africa. In addition to our regional emphasis, we laid the
foundation to attract talent with diferent skills to support our
cloud strategy. For example, we seek candidates with design
expertise to help us create software for the next generation of
customers. In addition, we must meet increasing demand for
products that take a human-centered approach to design and
are extremely easy to use.
To support these priorities, we undertook an end-to-end review
of our talent management process in 2013, with particular
focus on how to attract and acquire newer generations of
talent (early talent). We recognize that to meet our business
goals, we need a workforce that is agile and multigenerational,
with strong cross-cultural awareness. We are highlighting
opportunities for emerging talent to connect with a sense of
purpose in their work at SAP. In addition, we are creating new
ways to interact with prospective hires, such as inviting
our employees to speak with college students, running design-
thinking workshops on campus, and expanding our presence
on social media.
Nothing has a greater impact on SAPs long-term success
than the creativity, talent, and commitment of our people.
Their ability to understand the needs of our customers and to
innovate delivers sustainable value to our company and society.
Successful strategies to attract, retain, develop, and engage
our employees, therefore, are critical to driving a culture of
innovation, sustained growth, and proftability.

We continually review and evolve these strategies in response
to the markets we serve, demographic trends, and changes in
our business model. As we move more of our business to the
cloud, we are navigating profound shifts in how people consume
and create software. This rapid change means that we innovate
in much faster cycles than in the past. As a result, we must
have the right mix of talent and capabilities to support our
customers and deliver on our business strategy. Our people
must be agile and able to connect quickly and seamlessly with
the consumers of our solutions.
We are seeking to complement our established employee base
by hiring newer generations of talent that bring a diferent
perspective and skill set. We are also working to address shifting
expectations. Many professionals today are seeking a stronger
sense of purpose in their work, along with a creative, collaborative,
and fexible job environment. Fostering this type of culture is
also critical to our ability to innovate.

To adapt to this evolving landscape, we are reviewing a wide
range of areas, from how we attract diverse talent and develop
our employer brand to how we defne what it means for
our leaders to develop and excel. In 2013, we took a number
of steps to make our talent management strategies even more
efective in supporting our future innovation and growth.
Mobilizing the skills and passions of the people of SAP fuels not
only our own success, but also the success of our customers, as
well as our ability to fulfll our vision to help the world run better
and improve peoples lives.
Employees and Social Investment
73 Employees and Social Investment
We believe that to address the complex problems faced by
business and society, our employees must understand and
collaborate with people from a wide range of backgrounds and
perspectives. Our Social Sabbatical program supports this
goal, taking an innovative approach to developing talent while
creating a positive impact in communities around the world. A
group of 72 high-performing SAP employees from 30 countries
are working in close collaboration with entrepreneurs, small
and midsize enterprises, and nongovernmental organizations
(NGOs) in emerging markets. Projects run for one month
and focus on helping organizations grow, tackling business
challenges, and expanding their impact. Programs are currently
running in Brazil, China, India, and South Africa. Social
Sabbaticals demonstrate how we can create value for SAP
as well as others. Our employees return with an enhanced ability
to lead, design innovative solutions, and work across functions,
sectors, and cultures. Organizations beneft from fresh
input and expertise that advances their mission to serve society.
ENGAGING EMPLOYEES
In our 2013 People Survey, a general survey of all employees
conducted every two years, we achieved an overall employee
engagement score of 77%. This is down from the engagement
index of 79% reached the previous year during a pulse check
of half of our employees, but equal to the score achieved during
the last full People Survey in 2011. Our target for 2013 was a
score of 82%. We are now committed to achieving this score in
2015. Despite the slight drop in employee engagement in 2013,
we expect to see an incremental increase in our industry-
leading score in 2014.
We attribute this to the fundamental transformation impacting
the industry and to changes in top management that took
place this year. In response to the market and customers, we
are actively driving a growth and innovation strategy, with
concerted eforts to be a leader in the cloud with SAP HANA as
the platform for the industry. At the same time, the Executive
NURTURING TALENT AND LEADERSHIP
In 2013, we worked toward accelerating employee career devel-
opment in several ways. Specifc projects included enhanced
assessments of individual potential and development needs,
career development sessions, greater transparency of internal
opportunities, and expanded fellowships that allow people to
work outside their regular roles. We encouraged employees
to work closely with their managers on an ongoing development
plan and introduced Success Map, a cloud-based solution
developed by SuccessFactors, to enhance talent management
and employee development. In addition, we ofer a wide range
of opportunities for our employees to develop their professional
abilities, from e-learning courses to coaching. To ensure that
our learning portfolio focuses on the capabilities we need most
as an organization, we have been reviewing and refning these
oferings. On average, our employees engaged in approximately
nine days of training in 2013, compared to 11 days in 2012.
We also undertook a review of our leadership culture to identify
and enhance the qualities that are critical as we shift our
business model. As a result, we will increase our focus on hiring
and developing leaders who drive simplifcation and develop
outstanding talent to ensure our customers success. Two pilot
programs have already provided our leaders with the opportunity
to explore such critical topics in depth, exploring how to lead
through change, inspire innovation, and take a holistic
approach to leadership at SAP. In addition, we continue to ofer
a comprehensive suite of leadership programs to all levels of
management, from coaching to specialized classroom learning.
We are especially focused on deepening our general
management capabilities.
on virtual shares in the Companys performance, allocated
at the beginning of the year, and on the performance of SAP
stock. The 2013 tranche pays out in 2014.
The EPP is ofered to employees in addition to our existing
Share Matching Plan (SMP) and Stock Option Plan (SOP).
Under the SMP, eligible employees are invited to purchase
SAP shares at a discount of 40%. After a holding period of
three years, employees receive one SAP share free of charge
for every three shares held. Participants in the 2010
tranche received their free shares in 2013 after the holding
period ended.
The SOP targets top executives and top performers with an
allocation of stock options that vest after three years.
Benefciaries who were granted options in 2010 were entitled
to exercise them in 2013 and benefted from the rise in the
stock price.
For more information about share-based payments, see
the Notes to the Consolidated Financial Statements section,
Note (27).
Board has undergone signifcant changes in the past year, with
a sole CEO model heralded for 2014. We continually focus on
driving engagement through a range of activities, from career
development to enhanced leadership. Finally, each board
member has committed to following up on a key topic from the
People Survey. Employee engagement remains one of SAPs
four company-wide strategic goals, along with revenue, margin,
and customer loyalty.
RETAINING TALENT
In 2013, the employee retention rate at SAP worldwide was
93.5% (2012: 94.0%). We defne retention as the ratio of the
average headcount (expressed in full-time equivalents) minus
employee-initiated terminations (turnover) divided by the
average headcount. In 2013, the average length of service at
SAP worldwide was approximately 6.5 years (2012: 6.8 years).
In addition to measuring our retention rate, we also calculate
its fnancial impact. We conducted an analysis showing that
for each percentage point that our retention rate goes up or
down, the impact on our operating proft is approximately
60 million.
We do not seek a general retention rate of 100%, as some
turnover of talent supports our ability to innovate. However, we
view a high retention rate as a priority and work to retain
talent through our focus on employee engagement and career
development. We are especially focused on retention in
highly competitive job markets such as in Brazil and China.
EXPANDING EMPLOYEE OWNERSHIP
In 2013, we continued our share-based compensation programs
to give employees worldwide the opportunity to participate in
the long-term success of SAP. Our Employee Participation Plan
(EPP) is a global plan open to employees worldwide. The plan
creates a common fnancial incentive and reward for achieving
the yearly milestones of our 2015 goals. Its formula is based
CREATING HEALTHY CULTURE
At SAP, we focus on the health of our employees as well as the
health of our organizational culture. The two are interrelated,
and we want to ensure that people have the ability to manage
stress, balance their personal and professional lives, perform
at their best, and thereby help drive our innovation. Our Business
Health Culture Index (BHCI), based on our People Survey,
assesses the degree to which our workplace culture supports
peoples well-being and work/life balance. In 2013, we achieved
a BHCI score of 67%, compared to 66% in 2012. Given the
fast pace of change in the IT industry, we have set a goal of
maintaining a score of 66% or higher.
We work toward our health goals through such global initiatives
as our Health and Innovation Weeks, and workshops for man-
agers on how to help their teams improve their resilience to
stress. In 2013, we piloted a program that ofered employees in
Austria and Ireland the chance to create an in-depth personal
health profle and identify opportunities to enhance their
well-being. Utilizing tools such as biofeedback, the program
assessed everything from diet to sleep habits to how the heart
responds to stress. Highly popular with employees, the
program provided us with aggregated, anonymous data that
will help guide our health eforts in the future as we work
to support creativity, resilience, and performance.
DRIVING INNOVATION THROUGH DIVERSITY
AND INCLUSION
We reframed our approach to diversity and inclusion in 2013 to
focus on four key areas that are critical to innovation and
sustainable long-term success: Gender Intelligence, Generational
Intelligence, Culture and Identity, and Diferently Abled People.
Across all four areas, we seek to support the unique contributions
of every individual. For example, to increase understanding and
efectiveness among people of both genders, we conduct
a workshop called Women and Men Leading Together. Exploring
the subtleties of gender dynamics, this workshop is now
mandatory for all senior executives.
We aim to help lead the tech industry in developing a better
gender balance, and we continue to work toward our goal of
increasing the number of women in management from 18% in
2010 to 25% in 2017. Our overall percentage of women in the
workforce slightly increased in 2013 to 31% (2012: 30%), and
the percentage of women in management increased to 21.2%
in 2013 from 20.8% in 2012. To further support progress,
we ofer executive sponsorships for women and require that at
least one diversity candidate is included on the short list for
leadership and other positions. In addition, all members of
our Executive Board have committed to dedicated action plans
to support the recruitment, retention, and career advancement
of candidates with diverse backgrounds.
One of our most signifcant developments in 2013 was the
introduction of our Autism at Work initiative, which has drawn
enormous support from the media, the public, and our employees.
We ran pilots in Canada, Germany, India, Ireland, and the
United States, hiring an initial group of people on the spectrum
of autism disorders to work on specialized IT tasks such as
software testing. Autism at Work enables us to tap a broader
pool of talent and spark innovation by embracing diferences
in how people think, work, and tackle problems. We also see
potential to make a positive impact on peoples lives and
facilitate a broader conversation about autism that challenges
assumptions and inspires change.
HEADCOUNT
On December 31, 2013, we had 66,572 full-time equivalent
(FTE) employees worldwide (December 31, 2012: 64,422). This
represents an increase in headcount of 2,150 FTEs in comparison
to 2012. Of the overall headcount increase in 2013, 1,111
resulted from acquisitions. The average number of employees
in 2013 was 65,409 (2012: 61,134).
We defne the FTE headcount as the number of people we would
employ if we only employed people on full-time employment
contracts. Students employed part-time and certain individuals
who are employed by SAP but who, for various reasons, are
not currently working are excluded from our fgures. Also,
temporary employees are not included in the above fgures.
The number of such temporary employees is not material.
On December 31, 2013, the largest number of SAP employees
(47%) were employed in the EMEA region (including 26% in
Germany and 21% in other countries in the region), while 29%
were employed in the Americas region (including 20% in
the United States and 9% in other countries in the region) and
24% in the APJ region.
Our worldwide headcount in the feld of software and software-
related services grew 7% to 11,261 FTEs (2012: 10,551). Cloud
operations and support accounted for most of the increase.
Professional services and other services counted 14,629 FTEs
at the end of 2013 an increase of 3% (2012: 14,259). Most
SOCIAL INVESTMENTS
Our social investment strategy leverages our talent, technology,
and capital to create long-term, sustainable change. In 2013,
we continued to focus on two areas that are critical to both
SAP and society: Education and entrepreneurship. Fundamental
to creating opportunity and enabling people to join the market
economy, education also helps to create a pipeline of talent for
SAP. Entrepreneurship plays an equally vital role in driving
economic growth, creating jobs and spurring innovation. As we
provide emerging entrepreneurs with technology and other
support, we gain a deeper understanding of the market for
small businesses and medium-size companies, positioning us
to better serve customers in the future.
In 2013, SAP contributed about 20 million in cash donations
to non-governmental and non-proft organizations. We donated
software to more than 1,300 non-proft organizations and
began a new program to provide the non-profit sector with
analytics and cloud solutions. Our employees volunteered
about 125,000 hours in communities in 45 countries. In addition,
the SAP Solidarity Fund, a non-proft organization focused on
helping those afected by catastrophic events, responded to
such disasters as the typhoon Haiyan in the Philippines and
the food in Germany. SAP employees donated more than
240,000 to the fund in 2013, of which SAP matched
185,000.
To advance our global entrepreneurship program, we identifed
25 entrepreneurs in Brazil who will receive a range of support
from SAP, including technology and mentoring. We also
introduced a new program, Skills for Africa, which provides free
educational opportunities in information and communication
technology (ICT) and helps people fnd employment. Our sister
program in Brazil, Instituto Esperansap, is now in its fourth
year. These programs herald a new way of thinking, where we
play a direct role in preparing the next generation of talent and
developing a skilled workforce that will help drive our future
growth.

of this increase was in consulting. A shift in the focus of our
industry solutions led to some movement of employees from
research and development to sales and marketing, resulting
in a 1% headcount decrease to 17,804 FTEs (2012: 18,012) in
research and development and a 6% headcount increase to
15,824 FTEs (2012: 14,899) in sales and marketing. Mainly as a
result of our acquisition of hybris, general and administration
headcount rose 7% to 4,566 FTEs at the end of the year (2012:
4,286). Our infrastructure employees, who provide IT and
facility management services, numbered 2,488 FTEs an increase
of 3% (2012: 2,415) that mainly resulted from our acquisitions
and investments in our company IT.
In the Americas region, headcount (FTEs) increased by 445, or
2%; in the EMEA region, the increase was 1,236, or 4%; and in
the APJ region, it was 469, or 3%.
Our personnel expense per employee decreased to approxi-
mately 114,000 in 2013 (2012: approximately 119,000). The
decrease is primarily related to foreign exchange efects as
the majority of our employees is located outside of the eurozone
and paid in local currency. The personnel expense per
employee is defned as the personnel expense divided by the
average number of employees. For more information
about employee compensation and a detailed overview of
the number of people SAP employed, see the Notes to the
Consolidated Financial Statements section, Note (7).

Employees by Functional Area
Infrastructure
2,488
General and
administration
4,566
Software and
software- related
services
11,261

Research and
development
17,804
Professional services
and other services
14,629
Sales and
marketing
15,824
27,700
15,473
12,592
55,765
26,989
14,783
11,741
53,513
29,757
19,123
15,542
64,422
EMEA region Americas region Asia Pacifc Japan region
30,993
19,568
16,011
66,572
25,362
11,974
10,248
47,584
Number of Employees
2009 2010 2011 2012 2013
As our business grows, we maintain the efciency gains we
have made over the past several years. For example, our total
corporate car feet is not consuming more fuel despite the fact
that a signifcant number of company cars has been added,
since the average company car has become more fuel-efcient.
So, while our car feet grew by 6%, we had efciency gains of
6% across the entire feet. As a result, our total energy
consumption remained steady at 13,900 kilowatt hours (kWh)
per employee in 2013.
GREENHOUSE GAS EMISSIONS
Our goal is to reduce the greenhouse gas emissions from
our operations to levels of the year 2000 by 2020. This target
includes direct and indirect emissions from running our
business (Scopes 1 and 2), as well as a limited subset of other
indirect (Scope 3) emissions, such as those stemming from
business travel. We do not include all of our Scope 3 emissions
in our target because we chose to focus first on those
emissions over which we have the most control. However, as
detailed in the Energy and Emissions II section in the SAP
Integrated Report 2013 online, we are increasingly addressing
both our upstream and downstream emissions to drive a
comprehensive carbon strategy for SAP.
In addition to our long-term goal for 2020, we have set annual
targets. In 2013, our total emissions increased to 545 kilotons
CO
2
(2012: 485 kilotons). As a result, we missed our annual
target to reduce our emissions to 460 kilotons. Just as with our
increase in energy consumption, our increased emissions
refect the growth of our business. Due to our environmental
eforts of the past, however, the overall absolute reduction
achieved between the beginning of 2008 and today is 9%. At
the same time, the average number of employees increased
by almost 26%.
At the same time, we experienced some decrease in efciency
in 2013 as it relates to our emissions. While our overall energy
efciency remained steady, our greenhouse gas emissions
increased from 30.0 grams CO
2
per euro of total revenue in 2012
to 32.4 grams CO
2
per euro in 2013. Our carbon emissions
per employee also increased by about 5% in 2013, respectively.
Over the past several years, we have worked to better understand
the connections between our energy consumption, its related
cost, and the resulting environmental impact. Today we measure
and address our energy usage throughout SAP, as well as our
greenhouse gas emissions across our entire value chain. Since
the beginning of 2008, we calculate that energy efciency
initiatives have contributed to a cumulative cost avoidance of
260 million, compared to a business-as-usual extrapolation.
Moreover, to credibly ofer solutions that help our customers
better manage their use of resources, we must do so ourselves.
By addressing the fnancial and environmental impact of
our energy consumption, we have gained valuable insights to
create solutions for our customers.
TOTAL ENERGY CONSUMED
Because our energy usage drives our emissions, one of
the most important measures we look at is our total energy
consumed. This includes all energy that SAP produces or
purchases in other words, the energy whose production
causes emissions falling into Scopes 1 and 2 of the Greenhouse
Gas Protocol. Our total energy consumption increased to 910
gigawatt hours (GWh) in 2013, compared to 860 GWh in 2012.
This increase is due to signifcant growth in our business. In
addition, as software usage shifts to the cloud, we are hosting
more of our customers systems in our data centers, requiring
additional servers and facilities that consume more energy.
As we describe in more detail below, we believe that this shift
has the opposite efect for our customers, who can save energy
through our shared infrastructure.
Energy Consumption and
Greenhouse Gas Emissions
79 Energy Consumption and Greenhouse Gas Emissions
Efciency, however, has its limits. The demands of growth, as
we are discovering, often overtake efciency gains. Extending
the example of cars we have many more cars on the road
today, which more than cancels out the reduction in consumption
per car. For this reason, and in addition to our green cloud
strategy, we are increasingly focused on another path
to sustainable growth applying technology innovation to
transformations in how business is conducted.
In the case of SAP, we are seeking to bring about transformations
in a range of areas, from incentivizing behavioral change
to supporting innovative approaches to conserving resources.
TwoGo by SAP, for instance, is a ride-sharing application
that turns the daily commute into an economic, social, and
environmental opportunity. We began ofering TwoGo by
SAP to other companies in 2013, supporting their own eforts
to reduce the cost of fuel, parking and business trips, enhance
employee networks, change behavior, and reduce emissions.
For more information on this innovation, see www.twogo.com.
NET POSITIVE IMPACT
As the example of TwoGo by SAP shows, we ultimately aim to
help other organizations with their journey toward change.
While we are committed to improving our own environmental
performance, we believe that we can make a far greater impact
by helping our customers reduce their energy use and emissions.
We are increasingly focused on facilitating and measuring this
enabler efect, which our software supports in both direct and
indirect ways. A prime example of the former is a transportation
application that enables companies to better manage their
freight and routes to reduce fuel consumption. Indirectly, our
customers can use our analytics to assess their operations
and make adjustments that will save energy, reduce emissions,
and lower costs. For example, our software can help determine
when equipment needs refurbishment or support manufacturers
in negotiating better energy rates during peak times. Through
the advanced computing power of SAP HANA, we can now help
companies make these adjustments in real time, increasing
their efciency even further.
One root cause for this development is our change in business
model. As our customers increasingly leverage SAP software in
the cloud, our leadership in this market means that systems
that previously ran at our customers' sites are increasingly
running in SAP data centers. In other words, the emissions that
used to be caused by our customers running our software
have become SAP's emissions. As a result, our emissions per
employee and per euro in revenue increased in 2013.
In 2014, we plan to address these emissions, as well as our
overall footprint, by powering all of our data centers and facili-
ties with 100% renewable electricity. This shift will efectively
eliminate the emissions caused by our customers' systems
that have moved into our green cloud. Given the large size of
our customers footprints and our growth strategy in the cloud,
we see signifcant potential to reduce both our own and our
customers environmental impact. In 2013 alone, the emissions
caused by SAP products in use at our more than 253,500
customers' sites were at least 10 times larger than SAP's own
footprint, meaning they caused more than 5,800 ktons of CO
2
.
By using 100% renewable energy, we will dramatically broaden
the reach of our sustainability eforts and align them with our
cloud strategy. We believe this move will not only help the world
run better, but contribute to achieving our 2020 carbon target.
EFFICIENCY VERSUS TRANSFORMATION
Our results in 2013 point to an increasing challenge faced not
only by SAP but also by our customers. Companies typically
increase their resource consumption when they grow. Under
traditional business models, they continuously create and sell
more goods or services. For this reason, many companies have
focused on increasing their efciency a prime example is
the far better fuel efciency of passenger cars today compared
to decades ago.
Based on a study from Global e-Sustainability Initiative
(GeSI SMARTer2020) assessing the potential efect for the
information and communications technology (ICT) industry
overall as well as our own estimates, we believe that our
solutions contribute to an avoidance of emissions that eclipses
the footprint of our entire value chain, including our down-
stream emissions (use of our software at customers sites).
Putting such estimates in tangible terms, the total emissions
generated by ICT are expected to reach 1.3 gigatons (Gt) of
carbon by 2020. By contrast, ICT has the potential to abate
9.1 Gt CO
2
in that same time period. Similarly, we estimate that
SAPs downstream emissions will reach 0.0091 Gt CO
2
by
2020. Global emissions, on the other hand, are expected to
reach 55 Gt CO
2
by that time ofering enormous potential for
ICT as a whole and for SAP to enable reductions.
We will continue developing methodology to estimate this
impact so that we can direct our strategy and resources
to those areas where we can create the greatest long-term
impact.

81 Energy Consumption and Greenhouse Gas Emissions
Bookings/billings revenue: For our cloud activities we look at
the recognized revenue as well as the contract value generated
in a given period (bookings/billings). We measure bookings/
billings as the amounts that we are contractually entitled to
invoice the customers over the shorter of the contract term
and the frst 12 months following the contract execution date,
anniversary of contract execution date, or contract renewal
date (12 months bookings/billings). We evaluate bookings/
billings both at actual currency and at constant currency. In
contrast to the cloud subscription and support revenue
recognized over the period of providing the cloud service rather
than in the period of contract closure, the bookings/billings
numbers give insight into the future revenue potential. When
evaluating 12 months bookings/billings numbers, we consider
both the total bookings/billings and the subset of bookings/
billings that results from new customers or additional sales to
existing customers in the reporting period rather than from
subsequent years or renewals of existing contracts. There is no
comparable IFRS measure for this fgure.
Non-IFRS operating proft/non-IFRS operating margin: In
2013, we used non-IFRS operating proft/non-IFRS operating
margin and constant currency non-IFRS operating proft/
non-IFRS operating margin to measure our overall operational
process efciency and overall business performance. Non-IFRS
operating margin is the ratio of our non-IFRS operating proft
to total non-IFRS revenue, expressed as a percentage. See
below for more information on the IFRS and non-IFRS measures
we use.
We use various performance measures to help manage our
performance with regard to our primary fnancial goals, which
are revenue and margin, and our primary non-fnancial
goals, which are customer loyalty and employee engagement.
We view revenue and margin as indicators for our current
performance, while customer loyalty and employee engagement
are indicators for our future performance.
MEASURES WE USE TO MANAGE OUR FINANCIAL
PERFORMANCE
Measures We Use to Manage Our Operating Financial
Performance
In 2013, we used the following key measures to manage our
operating fnancial performance:
Non-IFRS software and cloud subscriptions: Our key revenue
drivers, software and cloud subscriptions, include software
plus cloud subscription and support revenue. The principal
source of our software revenue is the fees customers pay for
on-premise software licenses resulting in software being
installed on the customers hardware. We generate cloud
subscription and support revenue when we provide software
and the respective support for delivery in the cloud. We
evaluate software and cloud subscriptions both at actual
currency and at constant currency.

Non-IFRS software and software-related service (SSRS)
revenue: We use non-IFRS SSRS revenue and constant
currency non-IFRS SSRS revenue to measure our revenue
growth. Our SSRS revenue includes software and related
support revenue plus cloud subscription and support revenue.
Software revenue and cloud subscription and support revenue
are our key revenue drivers because they tend to afect our
other revenue streams. Generally, customers who buy software
licenses also enter into maintenance contracts, and these
generate recurring software-related service revenue in the
form of support revenue after the software sale. Maintenance
contracts cover support services and software updates and
enhancements. Software revenue as well as cloud subscription
and support revenue also tend to stimulate service revenue
from consulting and training sales.
Operating, investing, and fnancing cash fows: Our
consolidated statement of cash fows provides insight as to
how we generated and used cash and cash equivalents.
When used in conjunction with the other primary fnancial
statements, it provides information that helps us evaluate the
changes of our net assets, our fnancial structure (including
our liquidity and solvency), and our ability to afect the
amounts and timing of cash fows in order to adapt to changing
circumstances and opportunities.
MEASURES WE USE TO MANAGE OUR NON-FINANCIAL
PERFORMANCE
In 2013, we used the following key measures to manage
our non-fnancial performance in the areas of employee
engagement and customer loyalty:
Employee Engagement Index: We use the employee engagement
index to measure motivation and loyalty of our employees, how
proud they are of our company, and how strongly they identify
with SAP. The index is derived from surveys conducted among
our employees. With this measure, we recognize that we
can achieve our growth strategy with engaged employees only.
Measures We Use to Manage Our Non-Operating
Financial Performance
We use the following measures to manage our non-operating
fnancial performance:
Financial income, net: This measure provides insight especially
into the return on liquid assets and capital investments and the
cost of borrowed funds. To manage our fnancial income, net,
we focus on cash fow, the composition of our liquid asset and
capital investment portfolio, and the average rate of interest at
which assets are invested. We also monitor average outstanding
borrowings and the associated fnance costs.
Days Sales Outstanding (DSO) and Days Payables Out-
standing (DPO): We manage working capital by controlling the
days sales outstanding for operating receivables, or DSO
(defned as average number of days from the raised invoice to
cash receipt from the customer), and the days payables
outstanding for operating liabilities, or DPO (defned as average
number of days from the received invoice to cash payment
to the vendor).
Measures We Use to Manage Overall Financial
Performance
We use the following measures to manage our overall fnancial
performance:
Earnings per share (EPS): EPS measures our overall
performance because it captures all operating and non-operating
elements of proft as well as income tax expense. It repre-
sents the portion of proft after tax allocable to each SAP share
outstanding (using the weighted average number of shares
outstanding over the reporting period). EPS is infuenced not
only by our operating and non-operating business, and income
taxes but also by the number of shares outstanding. We are
authorized by our shareholders to repurchase shares and
believe that such repurchases, additional to dividend distributions,
are a good means to return value to our shareholders.
Efective tax rate: We defne our efective tax rate as the
ratio of income tax expense to proft before tax, expressed as a
percentage.
83 Internal Management System
annual plans, we determine the budget for the respective year.
We also have processes in place to forecast revenue and proft
on a quarterly basis, to quantify whether we expect to realize
our strategic goals, and to identify any deviations from plan.
We continuously monitor the concerned units in the Group to
analyze these developments and defne any appropriate actions.
Our entire network of planning, control, and reporting pro-
cesses is implemented in integrated planning and information
systems, based on SAP software, across all organizational units
so that we can conduct the evaluations and analyses needed to
make informed decisions.
NON-IFRS FINANCIAL MEASURES CITED IN THIS REPORT
As in previous years, we provided our 2013 fnancial outlook on
the basis of certain non-IFRS measures. Therefore, this report
contains a non-IFRS based comparison of our actual performance
in 2013 against our outlook in the Report on Economic Position
section.
Reconciliations of IFRS to Non-IFRS Financial Measures
for 2013 and 2012
The following table reconciles our IFRS fnancial measures
to the respective and most comparable non-IFRS fnancial
measures of this report for each of 2013 and 2012. Due to
rounding, the sum of the numbers presented in this table might
not precisely equal the totals we provide.
Net Promoter Score (NPS): This score measures the willing-
ness of our customers to recommend or promote SAP to
others. It is derived from our customer survey. Conducted each
year, this survey identifes whether a customer is loyal and
likely to recommend SAP to friends or colleagues, is neutral, or
is unhappy. We introduced this measure in 2012, as we are
convinced that we can achieve our fnancial goals only when
our customers are loyal to, and satisfed with, SAP and our
solutions. To derive the NPS, we start with the percentage of
promoters of SAP those who give us a score of 9 or 10 on a
scale of 0 to 10. We then subtract the percentage of detractors
those who give us a score of 0 to 6. The methodology calls for
ignoring passives, who give us a score of 7 or 8.
VALUE-BASED MANAGEMENT
Our holistic view of the performance measures described
above, together with our associated analyses, comprises the
information we use for value-based management. We use
planning and control processes to manage the compilation of
these key measures and their availability to our decision
makers across various management levels.
SAPs long-term strategic plans are the point of reference
for our other planning and controlling processes, including a
multiyear plan through 2017. We identify future growth and
proftability drivers at a highly aggregated level. This process is
intended to identify the best areas in which to target sustained
investment. Next, we evaluate our multiyear plans for our
support and development functions and break down the
customer-facing plans by sales region. Based on our detailed
Reconciliations of IFRS to Non-IFRS Financial Measures for the Years Ended December 31
2013 2012
IFRS Adj. Non-IFRS Currency
Impact
Non-IFRS
Constant
Currency
IFRS Adj. Non-IFRS
Revenue measures
Software 4,516 2 4,518 224 4,743 4,658 0 4,658
Cloud subscriptions and support 696 61 757 29 786 270 73 343
Software and cloud subscriptions 5,212 63 5,275 253 5,529 4,928 73 5,001
Support 8,738 19 8,756 371 9,128 8,237 9 8,246
Software and software-related
service revenue
13,950 82 14,032 625 14,657 13,165 81 13,246
Consulting 2,242 0 2,242 87 2,329 2,442 0 2,442
Other services 623 0 623 24 647 616 0 616
Professional services and other
service revenue
2,865 0 2,865 111 2,976 3,058 0 3,058
Total revenue 16,815 82 16,897 736 17,633 16,223 81 16,304
Operating expense measures
Cost of software and software-related services 2,597 364 2,233 2,555 414 2,141
Cost of professional services and other services 2,402 123 2,278 2,520 128 2,392
Total cost of revenue 4,999 487 4,512 5,075 542 4,533
Gross profit 11,816 570 12,385 11,147 624 11,771
Research and development 2,282 120 2,162 2,261 129 2,132
Sales and marketing 4,131 205 3,926 3,912 223 3,689
General and administration 866 70 796 949 164 784
Restructuring 70 70 0 8 8 0
TomorrowNow litigation 0 0 0 0 0 0
Other operating income/expense, net 12 0 12 23 0 23
Total operating expenses 12,336 953 11,383 348 11,731 12,181 1,067 11,114
Operating profit measures
Operating profit 4,479 1,035 5,514 388 5,902 4,041 1,148 5,190
Operating margin (in %) 26.6 32.6 33.5 24.9 31.8
Our non-IFRS fnancial measures refect adjustments based on
the items below, as well as adjustments for the related income
tax efects.
Non-IFRS Revenue
Revenue items identifed as non-IFRS revenue have been
adjusted from the respective IFRS fnancial measures
by including the full amount of support revenue, cloud
subscriptions revenue, and other similarly recurring revenues
that we are not permitted to record as revenue under IFRS
due to fair value accounting for the contracts in efect at the
time of the respective acquisitions.
Under IFRS, we record at fair value the contracts in efect at
the time entities were acquired. Consequently, our IFRS
support revenue, our IFRS cloud subscriptions and support
revenue, our IFRS software and cloud subscription revenue, our
IFRS software and software-related service revenue, and our
IFRS total revenue for periods subsequent to acquisitions
do not refect the full amount of revenue that would have
been recorded by entities acquired by SAP had they remained
stand-alone entities. Adjusting revenue numbers for this
revenue impact provides additional insight into the
comparability across periods of our ongoing performance.
We also report our non-IFRS deferred cloud subscription and
support revenue to provide additional insight into amounts
that are contracted for and invoiced and that are expected to
be recognized in cloud subscription and support revenue in the
future. To align the reporting of this non-IFRS deferred revenue
number, we adjust this number, like our non-IFRS revenue
numbers, for the effect of fair value accounting for the
contracts in effect at the time of the respective acquisitions.
Non-IFRS Operating Expense
Operating expense fgures that are identifed as non-IFRS
operating expenses have been adjusted by excluding the
following expenses:
Acquisition-related charges
Amortization expense/impairment charges of intangibles
acquired in business combinations and certain stand-alone
acquisitions of intellectual property (including purchased
in-process research and development)
Settlements of pre-existing business relationships in
connection with a business combination
Explanation of Non-IFRS Measures
We disclose certain fnancial measures, such as non-IFRS
revenue, non-IFRS operating expenses, non-IFRS operating
proft, non-IFRS operating margin, non-IFRS earnings per
share, constant currency revenue, and operating proft
measures that are not prepared in accordance with IFRS and
are therefore considered non-IFRS fnancial measures. Our
non-IFRS fnancial measures may not correspond to non-IFRS
fnancial measures that other companies report. The non-IFRS
fnancial measures that we report should only be considered
in addition to, and not as substitutes for or superior to, revenue,
operating expenses, operating proft, operating margin,
earnings per share, or other measures of fnancial performance
prepared in accordance with IFRS.
We believe that the disclosed supplemental historical and
prospective non-IFRS fnancial information provides useful
information to investors because management uses this infor-
mation, in addition to fnancial data prepared in accordance
with IFRS, to attain a more transparent understanding of our
past performance and our anticipated future results. In 2013,
we used these non-IFRS measures consistently in our internal
planning and forecasting, reporting and compensation, as
well as in our external communications as follows:
Our management primarily uses these non-IFRS measures
rather than IFRS measures as the basis for making fnancial,
strategic and operating decisions.
The variable remuneration components of our Executive
Board members and employees are based on non-IFRS
revenue and non-IFRS operating proft measures rather than
the respective IFRS measures.
The annual budgeting process for all management units is
based on non-IFRS revenue and non-IFRS operating proft
numbers rather than the respective IFRS fnancial measures.
All forecast and performance reviews with all senior managers
globally are based on these non-IFRS measures, rather than
the respective IFRS fnancial measures.
Both our internal performance targets and the guidance
we provided to the capital markets are based on non-IFRS
revenues and non-IFRS proft measures rather than the
respective IFRS fnancial measures.
Additionally, we believe that our adjustments to our IFRS fnan-
cial measures for the results of our discontinued TomorrowNow
activities are useful to investors for the following reason:
TomorrowNow activities were discontinued and we will thus
continue to exclude potential future TomorrowNow results,
which are expected to mainly comprise expenses in connection
with the TomorrowNow litigation, from our internal management
reporting, planning, forecasting, and compensation plans.
Therefore, adjusting our non-IFRS measures for the results of
the discontinued TomorrowNow activities provides insight
into the fnancial measures that SAP uses internally.
We include the revenue adjustments outlined above and
exclude the expense adjustments outlined above when making
decisions to allocate resources, both on a company level and
at lower levels of the organization. In addition, we use these
non-IFRS measures to gain a better understanding of SAPs
operating performance from period to period.
We believe that our non-IFRS fnancial measures described
above have limitations, including but not limited to, the following:
The eliminated amounts could be material to us.
Without being analyzed in conjunction with the corresponding
IFRS measures, the non-IFRS measures are not indicative
of our present and future performance, foremost for the
following reasons:
While our non-IFRS proft numbers refect the elimination of
certain acquisition-related expenses, no eliminations are
made for the additional revenue and other revenue that result
from the acquisitions.
While we adjust for the fair value accounting of the acquired
entities recurring revenue contracts, we do not adjust for
the fair value accounting of deferred compensation items
that result from commissions paid to the acquired companys
salesforce and third parties for closing the respective
customer contracts.
The acquisition-related charges that we eliminate in deriving
our non-IFRS proft numbers are likely to recur should
SAP enter into material business combinations in the future.
Acquisition-related third-party expenses
Discontinued activities: Results of discontinued operations
that qualify as such under IFRS in all respects except
that they do not represent a major line of business
Expenses from our share-based payments
Restructuring expenses
Non-IFRS Operating Prot, Non-IFRS Operating Margin,
and Non-IFRS Earnings per Share
Operating proft, operating margin, and earnings per share
identifed as non-IFRS operating proft, non-IFRS operating
margin, and non-IFRS earnings per share have been adjusted
from the respective IFRS measures by adjusting for the
above-mentioned non-IFRS revenue and non-IFRS operating
expenses.
We exclude certain acquisition-related expenses for the purpose
of calculating non-IFRS operating proft, non-IFRS operating
margin, and non-IFRS earnings per share when evaluating SAPs
continuing operational performance because these expenses
generally cannot be changed or infuenced by management
after the relevant acquisition other than by disposing of the
acquired assets. Since management at levels below the
Executive Board does not infuence these expenses, we generally
do not consider these expenses for the purpose of evaluating
the performance of management units. Additionally, these
non-IFRS measures have been adjusted from the respective
IFRS measures for the results of the discontinued activities,
share-based payment expenses, and restructuring expenses.
Usefulness of Non-IFRS Measures
We believe that our non-IFRS measures are useful to investors
for the following reasons:
The non-IFRS measures provide investors with insight into
managements decision making because management
uses these non-IFRS measures to run our business and make
fnancial, strategic, and operating decisions.
The non-IFRS measures provide investors with additional
information that enables a comparison of year-over-year
operating performance by eliminating certain direct efects
of acquisitions and discontinued activities.
Non-IFRS and non-GAAP measures are widely used in the
software industry. In many cases, inclusion of our non-IFRS
measures may facilitate comparison with our competitors
corresponding non-IFRS and non-GAAP measures.
Despite these limitations, we believe that the presentation of
the non-IFRS measures and the corresponding IFRS measures,
together with the relevant reconciliations, provides useful
information to management and investors regarding present
and future business trends relating to our fnancial condition
and results of operations. We do not evaluate our growth and
performance without considering both non-IFRS measures and
the comparable IFRS measures. We caution the readers of
our fnancial reports to follow a similar approach by considering
our non-IFRS measures only in addition to, and not as a
substitute for or superior to, revenue or other measures of our
fnancial performance prepared in accordance with IFRS.
Constant Currency Information
We believe it is important for investors to have information
that provides insight into our sales. Revenue measures deter-
mined under IFRS provide information that is useful in this
regard. However, both sales volume and currency efects
impact period-over-period changes in sales revenue. We do not
sell standardized units of products and services, so we cannot
provide relevant information on sales volume by providing
data on the changes in product and service units sold. To
provide additional information that may be useful to investors
in breaking down and evaluating changes in sales volume, we
present information about our revenue and various values and
components relating to operating proft that are adjusted
for foreign currency efects. We calculate constant currency
revenue and operating proft measures by translating foreign
currencies using the average exchange rates from the previous
year instead of the current year.
The acquisition-related amortization expense that we elimi-
nate in deriving our non-IFRS proft numbers is a recurring
expense that will impact our fnancial performance in future
years.
The revenue adjustment for the fair value accounting of the
acquired entities contracts and the expense adjustment
for acquisition-related charges do not arise from a common
conceptual basis. This is because the revenue adjustment
aims to improve the comparability of the initial post-acquisition
period with future post-acquisition periods, while the
expense adjustment aims to improve the comparability
between post-acquisition periods and pre-acquisition periods.
This should particularly be considered when evaluating our
non-IFRS operating proft and non-IFRS operating margin
numbers as these combine our non-IFRS revenue
and non-IFRS expenses despite the absence of a common
conceptual basis.
Our discontinued activities and restructuring charges could
result in signifcant cash outfows. The same applies to our
share-based payment expense because most of our
share-based payments are to be settled in cash rather than
shares.
The valuation of our cash-settled, share-based payments
could vary signifcantly from period to period due to the
fuctuation of our share price and other parameters used in
the valuation of these plans.
In the past we have issued share-based payment awards to
our employees every year and we intend to continue doing
so in the future. Thus, our share-based payment expenses
are recurring although the amounts usually change from
period to period.
We believe that constant currency measures have limitations,
particularly as the currency efects that are eliminated constitute
a signifcant element of our revenue and expenses and could
materially impact our performance. We therefore limit our use
of constant currency measures to the analysis of changes in
volume as one element of the full change in a fnancial measure.
We do not evaluate our results and performance without
considering both constant currency measures in non-IFRS
revenue and non-IFRS operating proft measures on the one
hand, and changes in revenue, operating expenses, operating
proft, or other measures of fnancial performance prepared in
accordance with IFRS on the other. We caution the readers
of our fnancial reports to follow a similar approach by considering
constant currency measures only in addition to, and not as
a substitute for or superior to, changes in revenue, operating
expenses, operating proft, or other measures of fnancial
performance prepared in accordance with IFRS.
Free Cash Flow
We use our free cash fow measure to estimate the cash fow
remaining after all expenditures required to maintain or expand
our organic business have been paid of. This measure provides
management with supplemental information to assess our
liquidity needs. We calculate free cash fow as net cash from
operating activities minus purchases (other than purchases
made in connection with business combinations) of intangible
assets and property, plant, and equipment.
Free Cash Flow
millions
2013 2012 Change
(in %)
Net cash flows from operating
activities
3,832 3,822 0
Purchase of intangible assets
and property, plant, and equipment
(without acquisitions)
566

541

5

Free cash flow 3,266 3,281 0
The contrary development of the industrialized and emerging
economies was particularly noticeable in the Asia Pacifc Japan
(APJ) region, according to the ECB. Japan, with its expansive
fnancial and monetary policy, turned to positive GDP growth
rates and achieved growth of 2%. Only in the third quarter was
there a slight dip, caused by weaker exports. Most emerging
economies in Asia performed clearly more subdued than in
recent years, the ECB reports. In China, for instance, only
the third quarter saw a slight acceleration in growth (to 7.8%
year over year) after a modest stimulus package.
THE IT MARKET
Worldwide IT investment growth was higher than overall global
economic growth throughout 2013, U.S. market research frm
International Data Corporation (IDC) reports. However, that
growth slowed during the course of the year. For this reason
IDC corrected its projections downward more than once. The
main reason for this was slower growth in the emerging
economies such as in China and Russia. For that reason the
emerging economies did not grow as quickly as IDC had
expected at the beginning of the year.
In 2013, the global IT market expanded by a percentage in the
middle of the single-digit range, which was slightly less than
in the prior year. Leading the way was the mobile devices seg-
ment, with growth well into the double-digit range. In fact, IDC
revised its forecast for the mobile device segment upward
several times in the course of the year. The software segment
also outperformed the overall IT market, IDC reports. The PC
segment was sluggish the entire year, especially in the emerging
economies, where economic growth fagged. Global spending
on servers and data storage devices contracted. In contrast,
IDC reports that the global market for IT services expanded by
a percentage in the low single digits.
GLOBAL ECONOMIC TRENDS
In its most recent monthly report, the European Central Bank
(ECB
1)
) concludes that the global economy has remained fairly
weak in 2013, especially in the frst half of the year. That is
consistent with the view of the International Monetary Fund
(IMF), stating that in 2013 gross domestic product (GDP)
across the world grew 3% year over year.
The experts also note regional divergence: According to the
ECB, growth shifted to the industrialized economies and
became established there. In contrast, growth in most of the
major emerging economies slowed. Weaker domestic demand,
limited scope for government stimulus programs, and tougher
fnancing conditions are the reasons cited by the ECB.
Additionally, commodity-exporting countries sufered from the
sluggish demand on the international commodity markets.
The economy of the Europe, Middle East, and Africa (EMEA)
region was weak in 2013. Annual GDP in the euro area declined
0.4% year over year, according to the numbers published by
the ECB. The ECB reports that weak domestic and export
demand slowed down economic activity in the larger Central
and Eastern European countries and Russia, although it
perceived a more encouraging trend toward the end of the year.
In comparison, the Middle East and Africa merely experienced
a slight deceleration of growth. However, political instability
severely hindered economic growth in some countries in the
region, notably Iraq and Libya.
In the global context, the economy of the Americas region
proved relatively robust, the ECB notes. Despite tax increases
and government spending cuts that came into force in March,
year-over-year annual growth in the United States was just
short of 2% compared to 2012. Growth was faster in the second
half of the year than in the frst as conditions on the residential
real estate and labor markets improved, consumer spending
rose, and exports increased. The ECB reports continuing recovery
in Latin America, at only a slightly reduced pace.
1)
Unless otherwise indicated, all economic information in this section is based on information from the European
Central Bank (ECB).
SAP was highly successful in the EMEA region. With double-
digit growth in revenue from software and cloud subscriptions,
we again increased our market share. Alongside double-digit
percentage growth in our home market, Germany, we
performed remarkably well in France, Russia, the Middle East,
and Africa, achieving high double-digit software revenue growth.
Likewise, our Americas region outperformed the overall
economy and the IT market. The double-digit increase in
revenue from software and cloud subscriptions in 2013 were
mainly driven by a substantial triple-digit rise in cloud
subscription revenue in North America and very strong core
business in Latin America.
In the APJ region, the economic environment was very weak
at the beginning of the year, and SAP's revenue sufered during
this time as a result. However, the regional economy turned
around toward the end of the year, refected in double-digit
growth for our software and cloud subscription revenue in the
fourth quarter a commendable result in the competitive
context. This helped return SAP to modest single-digit revenue
growth for the full year in the APJ region.
The emerging economies, with high double-digit growth, are
important growth markets for SAP. Key among them are China
as well as the Middle East, Russia, and Brazil, where we
achieved strong double-digit software and cloud subscription
revenue growth rates.
Overall, in 2013 we demonstrated an aptitude for global growth
that few other companies in the IT industry can match.

In the EMEA region, the Western European market for IT
recorded low but stable growth and has now, in IDC's view,
survived the crisis. In Russia the economic development was
completely diferent, according to the IDC. Over the year, it
revised its forecast for growth in the Russian IT market
downward by several percentage points in light of the weak
Russian economy.
In the Americas region, the IT market followed the relatively
robust expansion of the global economy. Although the
economic policy situation was at times volatile in the United
States, the U.S. IT market largely met expectations. IT
investment grew by a percentage in the middle single-digit
range year over year. The IT market also proved resilient in
Latin America, including Brazil, and even recorded double- digit
growth.
In the APJ region, the IT market refected trends in the overall
economy. Notably, the IT market in Japan performed better
than IDC had originally expected. At the beginning of the year,
IDC forecasted a contraction, but in fact over the full year IT
investment increased slightly. On the other hand, IT spending
in China grew more slowly than IDC had originally expected.
Full-year growth was well below the double-digit percentages of
recent years.
IMPACT ON SAP
SAP business was only slightly afected by the relatively weak
growth in 2013 especially in the frst half of the year in
the overall global economy and in the IT industry: Despite a
slower than expected start to the year, in 2013 our growth
surpassed that of the global economy and of the IT industry.
We owe this success frst and foremost to our greater focus on
innovation strategy and with it our investment in three new
felds of business: mobile solutions, in-memory computing with
SAP HANA, and cloud solutions. The heightened pace of
innovation at SAP and the rapid and successful integration of
the companies we acquired, have been the decisive factors
in our achieving double-digit constant currency growth
in non-IFRS software and software-related services revenue.
91 Economy and the Market
Actual Performance in 2013 Compared to Guidance
(Non-IFRS)
We achieved or exceeded the amended outlook guidance for
revenue and operating proft we published in July.
Comparison of Forecast and Results for 2013
Forecast for 2013 Results for 2013
service revenue (non-IFRS, at
constant currencies)
1)
at least +10%

+11%

Cloud subscription and support
revenue (non-IFRS, at constant
currencies)
around
750 million
786 million

Operating profit (non-IFRS,
at constant currencies)
5.85 billion to
5.95 billion
5.90 billion
Effective tax rate (IFRS)
1)
24.0% to 25.0% 24.4%
Effective tax rate (non-IFRS)
1)
25.5% to 26.5% 25.9%
SAP HANA software revenue
(non-IFRS)

650 million to
700 million

633 million
(at actual
currencies)
664 million
(at constant
currencies)
1)
Revised forecast (July 2013).
PERFORMANCE AGAINST OUTLOOK FOR 2013
(NON-IFRS)
Our 2013 operating proft-related internal management goals
and published outlook were based on our non-IFRS fnancial
measures. For this reason, in this section we discuss
performance against our outlook referring solely to these
non-IFRS fnancial measures. All discussion in the Operating
Results (IFRS) section, however, is in terms of measures in
accordance with International Financial Reporting Standards
as issued by the International Accounting Standards Board
(IASB), and the numbers in that section are not explicitly
identifed as IFRS measures.
Guidance for 2013 (Non-IFRS)
At the beginning of 2013, we have given the guidance that our
software and software-related service revenue (non-IFRS) for
2013 would increase by between 11% and 13% at constant
currencies (2012: 13,246 million). For cloud subscription and
support revenue (non-IFRS) we forecasted an increase to
750 million (2012: 342 million) at constant currencies. For
SAP HANA, we estimated a software revenue of 650 million
to 700 million. We expected our full-year operating proft
(non-IFRS) for 2013 to be between 5.85 billion and 5.95 billion
(2012: 5.21 billion) at constant currencies. We anticipated an
efective tax rate (IFRS) of between 25.5% and 26.5% (2012:
26.2%) and an efective tax rate (non-IFRS) of between 27.0%
and 28.0% (2012: 27.5%).
In April, we confrmed the guidance for 2013 that we had
published in January 2013. In July 2013, we amended our
forecast for revenue growth:
Although the difcult macroeconomic environment, in particular
in the Asia Pacifc Japan region, and the rapid transition to the
cloud have resulted in lower software revenue expectations, we
remained committed to double-digit growth with at least
10% growth in non-IFRS software and software-related service
revenue at constant currencies in full year 2013 (2012:
13,246 million). We confrmed our predictions for cloud
subscription and support revenue and for operating proft,
while we adjusted the anticipated efective tax rate to between
24.0% and 25.0% (IFRS) and to between 25.5% and 26.5%
(non-IFRS).

In 2013, we achieved operating proft (non-IFRS) of 5,902 million
at constant currencies. Thus, operating proft (non-IFRS) at
constant currencies was in the middle of the range that SAP
had projected (5.85 billion to 5.95 billion). Despite again
investing signifcantly in innovation, we were able to increase
our operating proft by successfully scaling our cloud business
and maintaining operational discipline.
We achieved an effective tax rate (IFRS) of 24.4% and an
efective tax rate (non-IFRS) of 25.9%, which is within the
updated range of 24.0% to 25.0% (IFRS) and 25.5% to 26.5%
(non-IFRS) we announced in July 2013.
OPERATING RESULTS (IFRS)
This section on operating results (IFRS) discusses results
only in terms of IFRS measures, so the IFRS numbers are not
expressly identifed as such.
We acquired hybris in August 2013, so hybris results are
incorporated in our results only for the months August to
December. We acquired SuccessFactors in February 2012, so
SuccessFactors results are incorporated in our 2012 results
only for the months February to December. Similarly, because
we acquired Ariba in October 2012, Ariba results are
incorporated in our 2012 results only for the months October
to December.

Despite ongoing economic uncertainty throughout 2013,
our new and existing customers continued to show a strong
willingness to invest in our solutions.
At constant currencies, cloud subscription and support revenue
(non-IFRS) grew from 343 million in 2012 to 786 million in
2013, an increase of 129% before elimination of efects relating
to the fact that Ariba and SuccessFactors numbers are
included only for part of 2012 because they were acquired in
the course of that year. Of the 129% growth, those efects
account for 97 percentage points. Our software and software-
related services revenue grew 11% at constant currencies
to 14,657 million (2012: 13,246 million).
The Europe, Middle East, and Africa (EMEA) region recorded
strong single-digit growth in software and cloud subscription
revenue at constant currencies. The Americas region, while
rapidly shifting to the cloud, achieved very strong growth of 15%
in software and cloud subscriptions at constant currencies.
After ending the year with a strong fourth quarter, in 2013 the
Asia Pacifc Japan (APJ) region achieved a 3% constant-
currency increase in full-year revenue from software and cloud
subscriptions. As a result, in 2013 SAPs full-year software
and cloud subscription revenue increased 6% (11% at constant
currencies) to 5,275 million. The acquisitions of Success-
Factors, Ariba, and hybris contributed 2.8 percentage points to
the growth in software and software-related service revenue
at constant currencies.
At the beginning of 2013, we forecasted low single-digit
percentage growth in professional services and other service
revenue and signifcant increase in total revenue for the year.
Although in the event our professional services and other
service revenue (non-IFRS) actually decreased by 3% at
constant currencies, the strong growth we achieved in software
and software-related service revenue (non-IFRS) helped us
attain the overall guidance: Total revenue (non-IFRS) increased
8% at constant currencies to 17,633 million (2012: 16,304
million). Our 2013 outlook guidance for SAP HANA software
revenue was 650 million to 700 million (2012: 392 million).
Because of adverse currency efects, the revenue we achieved
was 633 million (664 million at constant currencies).
93 Report on Economic Position
For more information about the breakdown of total revenue by
region and industry, see the Revenue by Region and Industry
section below.
Software and Software-Related Service Revenue
Software revenue results from the fees earned from the sale
or license of software to customers. Revenue from cloud
subscriptions and support refers to the income earned from
contracts that permit the customer to access specifc software
solutions hosted by SAP during the term of its contract with
SAP. Support revenue represents fees earned from providing
customers with technical support services and unspecifed
software upgrades, updates, and enhancements.
In 2013, software and software-related service revenue grew
from 13,165 million in 2012 to 13,950 million, representing
an increase of 6%. This software and software-related service
revenue growth refects an 11% increase from changes in
volumes and prices and a 5% decrease from currency efects.
Revenue
Total Revenue
Total revenue increased from 16,223 million in 2012 to
16,815 million in 2013, representing an increase of 592 million,
or 4%. This growth refects an 8% increase from changes in
The growing revenue result primarily from a 426 million
increase in cloud subscription and support revenue and a
501 million rise in support revenue. Consulting revenue
declined by 200 million and software revenue by 142 million.
Software and software-related service revenue climbed
to 13,950 million in 2013, an increase of 6%. Software and
software-related service revenue represented 83% of total
revenue in 2013 (2012: 81%). In 2013, consulting and other
service revenue contributed 2,865 million to our total revenue,
representing a drop of 6% compared to 2012.
1,377
890
457
2,725
1,555
1,300
554
3,410
1,851
1,534
722
4,107
2,041
1,733
884
4,658
2,116
1,586
814
4,516
Software Revenue by Region (based on customer location)
millions
2009 2010 2011 2012 2013
5,643
3,620
1,409
10,672
6,263
4,435
1,766
12,464
6,991
5,091
2,151
14,233
7,486
6,100
2,637
16,223
7,885
6,366
2,563
16,815
Total Revenue by Region (based on customer location)
millions
2009 2010 2011 2012 2013
Cloud subscription and support revenue increased from
270 million in 2012 to 696 million in 2013. This increase is
largely due to the acquisition of Ariba on October 1, 2012,
and to continuing strong growth at SuccessFactors and Ariba
in 2013.
Our customer base continued to expand in 2013. Based on the
number of contracts concluded, 16% of the orders we received
for software in 2013 were from new customers (2012: 19%).
The total value of software orders received fell 7% year over year.
The total number of contracts signed for new software
decreased 6% to 55,909 (2012: 59,289 contracts), while the
average order value decreased by 1%.
Our stable customer base, continued investment in software by
new and existing customers throughout 2013 and the previous
year, and the continued success of our premium support
oferings resulted in an increase in support revenue from 8,237
million in 2012 to 8,738 million in 2013. The SAP Enterprise
Support services ofering was the largest contributor to our
Revenue from software and cloud subscriptions rose from
4,928 million in 2012 to 5,212 million in 2013, representing
an increase of 284 million, or 6%. This growth consists of
an 11% increase from changes in volumes and prices and a 5%
decrease from currency efects.
A combination of a challenging macroeconomic environment in
key markets and the accelerating industry shift to the cloud
resulted in a 2% increase from changes in volumes and prices.
There was also a 5% decrease from currency efects. Overall,
software revenue declined 142 million or 3% from 4,658 million
in 2012 to 4,516 million in 2013. In 2013, SAP HANA contributed
633 million to total software revenue.
1,383
893
459
2,735
1,565
1,304
555
3,424
1,864
1,540
722
4,125 4,928
2,107
1,920
901
5,212
2,233
2,130
849
Software and Cloud Subscription Revenue by Region
(based on customer location)
millions
2009 2010 2011 2012 2013
4,336
2,718
1,144
8,198
4,883
3,427
1,484
9,794
5,529
3,958
1,832
11,319
6,106
4,820
2,239
13,165
6,549
5,196
2,204
13,950
Software and Software-Related Service Revenue by Region
(based on customer location)
millions
2009 2010 2011 2012 2013
Revenue by Region and Industry
Revenue by Region
We break our operations down into three regions: the Europe,
Middle East, and Africa (EMEA) region, the Americas region,
and the Asia Pacifc Japan (APJ) region. We allocate revenue
amounts to each region based on where the customer is located.
For more information about revenue by geographic region, see
Note (28).
EMEA Region
In 2013, the EMEA region generated 7,885 million in revenue,
which was 47% of total revenue (2012: 7,486; 46%). This
represents a year-over-year increase of 5%. Total revenue in
Germany increased 5% to 2,505 million in 2013 (2012:
2,380 million). Germany contributed 32% (2012: 32%) of all
EMEA region revenue. The remaining revenue in the EMEA
region was primarily generated in the United Kingdom, France,
Switzerland, the Netherlands, Russia, and Italy. Software and
software-related service revenue generated in the EMEA region
in 2013 totaled 6,549 million (2012: 6,106 million). Software
and software-related service revenue represented 83% of total
revenue in 2013 (2012: 82%). Software and cloud subscription
revenue rose by 6% to 2,233 million in 2013 (2012: 2,107
million). This growth refects an 8% increase from changes in
Americas Region
In 2013, 38% of our total revenue was generated in the
Americas region (2012: 38%). Total revenue in the Americas
region increased 4% to 6,366 million; revenue generated in
the United States increased 4% to 4,661 million. This growth
refects an 8% increase from changes in volumes and prices
and a 4% decrease from currency efects. The United States
contributed 73% (2012: 73%) of all revenue generated in the
Americas region. In the remaining countries of the Americas
region, revenue climbed 4% to reach 1,705 million. This growth
support revenue. The 501 million, or 6%, growth in support
revenue refects an 11% increase from changes in volumes and
prices and a 5% decrease from currency efects. This growth
is primarily attributable to SAP Product Support for Large
Enterprises, SAP Enterprise Support, and our premium
oferings. Accordingly, the acceptance rate for SAP Enterprise
Support among new customers rose from 96% in 2012 to
98% in 2013.
Professional Services and Other Service Revenue
Professional services and other service revenue consists primarily
of consulting and other service revenue. We generate most of
our consulting revenue from the implementation of our software
products. Other service revenue consists mainly of revenue
from the messaging services acquired from Sybase and of
training revenue from educational services supplied to customers
and partners on the use of our software products and related
topics.
Professional services and other service revenue decreased from
a decline of 193 million, or 6%. This decline refects a
3% decrease from changes in volumes and prices and a 4%
decrease from currency efects.
Customers' cautious buying behavior toward large services
projects led to a decline in consulting revenue from
a decrease of 200 million, or 8%. This decline refects
a 5% decrease from changes in volumes and prices and a 4%
decrease from currency efects. Consulting revenue
contributed 78% of the total consulting and other service
revenue (2012: 80%). Consulting revenue contributed 13%
of total revenue (2012: 15%).
Revenue from other services increased 7 million, or 1%, to
623 million in 2013 (2012: 616 million). This refects a 5%
increase from changes in volumes and prices and a 4%
decrease from currency changes.

public services or consumer industry sectors, respectively. To
address the changing needs of our customers, a new
industry subgroup was established, sports and entertainment,
which is part of the professional services sector.
We allocate our customers to one of our industries at the
outset of an initial arrangement. All subsequent revenue from a
particular customer is recorded under that industry sector.
In 2013, we achieved above-average growth in the following
sectors, measured by changes in total revenue: Financial Services
(1,633 million, at a growth rate of 13%), Services (2,649 million,
at a growth rate of 7%), Public Services (1,691 million,
at a growth rate of 5%), and Energy and Natural Resources
(4,077 million, at a growth rate of 4%). The revenue from the
other industry sectors: Consumer 3,779 million, which was
a 4% improvement on the prior year; Discrete Manufacturing
2,988 million, which was a 4% decline mainly related to
APJ and the Americas.

Revenue by Industry
millions
Public Services
1,691
Consumer
3,779
Services
2,649
Financial Services
1,633
Energy & Natural
Resources
4,077
Discrete
Manufacturing
2,988
refects a 13% increase from changes in volumes and prices
and a 9% decrease from currency efects. This revenue was
principally generated in Brazil, Canada, and Mexico. Software
and software-related service revenue generated in the Americas
region in 2013 totaled 5,196 million (2012: 4,820 million).
Total software and software-related service revenue represented
82% of all revenue in the Americas region in 2013 (2012:
79%). Software and cloud subscription revenue rose by 11% to
2,130 million in 2013 (2012: 1,920 million). This growth
and a 6% decrease from currency efects.
APJ Region
In 2013, 15% (2012: 16%) of our total revenue was generated
in the APJ region, with the strongest revenue growth being
achieved in China. Total revenue in the APJ region decreased by
3% to 2,563 million. In Japan, revenue fell by 21% to 624
million, which represents 24% (2012: 30%) of the total revenue
generated in the APJ region. This drop in revenue is attribut-
able, in full, to currency efects. In the remaining countries of
the APJ region, revenue increased by 5%. Revenue in the
remaining countries of the APJ region was generated primarily
in Australia, China, and India. Software and software-related
service revenue generated in the APJ region in 2013 totaled
2,204 million (2012: 2,239 million). That was 86% of total
revenue (2012: 85%). Software and cloud subscription revenue
fell by 6% to 849 million in 2013 (2012: 901 million). This
decrease refects a 4% increase from changes in volumes and
prices and a 10% decrease from currency efects.
Revenue by Industry
With efect from January 2013, we rearranged our industry
sectors from nine groups into six so that we could focus better
on the requirements of existing and potential customers.
We merged one of our existing industry sectors, process
manufacturing which covers the chemicals and mill products
industries with the energy and natural resources industry
sector. We combined our former consumer products and the
retail and wholesale distribution industry sector into the
consumer sector. The healthcare and life sciences, (medical
and pharmaceutical) industries, which were previously grouped
together under the healthcare sector, now belong to the
Cost of Software and Software-Related Services
Cost of software and software-related services consists
primarily of customer support costs, cost of developing
custom solutions that address customers specifc business
requirements, costs for deploying and operating cloud
solutions, amortization expenses relating to intangibles, and
license fees and commissions paid to third parties for
databases and the other complementary third-party products
sublicensed by us to our customers.
In 2013, the cost of software and software-related services
increased a modest 2% to 2,597 million (2012: 2,555 million).
The main factors were a 95 million acquisition-related
increase in the cost of providing and operating our cloud solutions
and a 13 million increase in customer support costs.
Operating Proft and Operating Margin
In 2013, our operating proft totaled 4,479 million (2012:
4,041 million), a signifcant year-over-year increase despite
adverse currency efects. We invested in innovations and
made substantial advances in our cloud business in 2013.
In 2013, operating expenses increased 155 million or 1% to
12,336 million (2012: 12,181 million). The main contributors
to that increase were our greater acquisition-related and
restructuring expenses, continued investment in sales activities
and the cloud, and higher personnel and infrastructure
expenses related to acquisitions.
The efect of acquisition-related expenses, which were
555 million (2012: 537 million), and restructuring expenses,
which were 70 million (2012: 8 million), on operating proft
was greater than in the prior year. The operating proft for
2013 was also afected by continued investments in global sales
activities and cloud computing. The number of SAP employees
(expressed in full-time equivalents FTEs) rose year over
year by 2,150 persons, including more than 1,100 employees
from acquired businesses.
Those negative efects on operating proft were in part ofset by
a reduced expense for share-based payment, which totaled
327 million in 2013 (2012: 522 million) owing to a less steep
increase in the SAP stock price, and by a reduction in our
general and administration expense.
As an overall result of these efects on operating proft, our
operating margin widened 1.7 percentage points to 26.6% in
2013 (2012: 24.9%).
The sections that follow discuss our costs by line item.
Operating Proft
2,588
4%
2,591
+0%
4,884
+89%
4,041
17%
4,479
+11%
2009 2010 2011 2012 2013
Operating Margin
Percent | change since previous year
24.3
+1.0pp
20.8
3.5pp
34.3
+13.5pp
24.9
9.4pp
26.6
+1.7pp
2009 2010 2011 2012 2013
than in 2012. Nonetheless, our total R&D expense increased
only slightly, by 1% to 2,282 million (2012: 2,261 million).
Therefore, while we continue to increase our innovative capacity
our R&D expense as a percentage of total revenue was
slightly less year over year at 13.6% (2012: 13.9%). For more
information, see the Research and Development section.
Sales and Marketing Expense
Sales and marketing expense consists mainly of personnel
costs and direct sales expense to support our sales and
marketing teams in selling and marketing our products and
services.
Our sales and marketing expense rose 6% from 3,912 million
in 2012 to 4,131 million in 2013. The increase was mainly the
result of greater personnel costs as we expanded our global
sales force, notably for cloud business, and of the reallocation
and re-tasking of employees to sales-related work. By increasing
our sales force we accelerated our revenue growth. The ratio of
sales and marketing expense to total revenue, expressed as a
percentage, increased slightly to 24.6% (2012: 24.1%) because
costs grew more rapidly than revenue.
General and Administration Expense
Our general and administration expense consists mainly of
personnel costs to support our fnance and administration
functions.
General and administration expense decreased 9% from 949
million in 2012 to 866 million in 2013. This resulted mainly
from a reduced expense for share-based payment and efcient
cost management. Consequently, the ratio of general and
administration expense to total revenue decreased in 2013 to
5% (2012: 6%).

Results by Segment
We had two divisions in 2013, On-Premise and Cloud, each
further divided into operating segments. Our On-Premise
division comprises two operating segments: On-Premise Products
and On-Premise Services. Our Cloud division also comprises
two operating segments: Cloud Applications and Ariba.
They both represent investments that contributed to revenue
growth. At the same time, the license fees we pay to third
parties decreased by 63 million. The gross margin on our
software and software-related services, defned as software and
software-related services proft as a percentage of software
and software-related services revenue, remained constant year
over year in 2013 at 81% (2012: 81%).
Cost of Professional Services and Other Services
Cost of professional services and other services consists
primarily of the cost of consulting and training personnel
and the cost of bought-in third-party consulting and training
resources. This item also includes sales and marketing expenses
for our professional services and other services resulting from
sales and marketing eforts where those eforts cannot be
clearly distinguished from providing the professional services
and other services.
The growth of our cloud business and increased demand for
pre-bundled oferings led to a reduction in our professional and
other services revenue as well as in our professional and other
services expense. We reduced costs for professional and other
services 5% from 2,520 million in 2012 to 2,402 million
in 2013. Our gross margin on professional and other services,
defned as professional and other services proft as a percentage
of professional and other services revenue, narrowed to 16%
(2012: 18%).
Research and Development Expense
Our research and development (R&D) expense consists
primarily of the personnel cost of our R&D employees, costs
incurred for independent contractors we retain to assist in
our R&D activities, and depreciation of the computer hardware
and software we use for our R&D activities.
We acquired Ariba and SuccessFactors in the course of 2012,
so in 2012 our R&D expense did not include a full year's Ariba
and SuccessFactors R&D. Moreover, the depreciation expense
for R&D servers and computer systems was greater in 2013
On-Premise Products segment proft rose 4% to 7,760 million
(2012: 7,473 million) and the associated segment proftability
was 59% (2012: 58%).
On-Premise Services Segment
The On-Premise Services segment performs various professional
services, primarily supporting the implementation of our
software products and providing education services concerning
the use of those software products.
On-Premise Services segment revenue decreased 9% from
2,967 million in 2012 to 2,695 million in 2013. This reduction
in revenue refects a 6% decrease from changes in volumes
and prices and a 3% decrease from currency efects. Our cloud
business grew more quickly than our business as a whole,
and demand for preconfgured solutions increased. As expected,
this led to a decrease in both, revenue from consulting and
education services and in the expense of providing them.
Accordingly, cost of revenue in the On-Premise Services
segment decreased 7% to 2,134 million in 2013 (2012:
2,306 million).
On-Premise Services segment proft declined 15% to 562
million (2012: 661 million). Segment proftability was 21%
(2012: 22%).
Cloud Division
Our Cloud division earns revenue by providing software
for customers to use in the cloud and by providing services
relating to that software.
Driven by the acquisition of SuccessFactors in the frst quarter
of 2012 and Ariba in the fnal quarter of 2012, SAP developed
a strong cloud momentum that continued in 2013. Our Cloud
division revenue run rate reached 1,063 million (end of 2012:
848 million), based on annualized fourth-quarter revenue.
The annualized revenue is the overall 2013 fourth-quarter
revenue from the Cloud division of 266 million (2012: 212
million), multiplied by four.
The revenue and proft numbers for each of our operating
segments relate to our internal management reporting and
difer from the revenue and proft numbers presented in our
IFRS Consolidated Statements of Income. For more information
about our segment reporting and reconciliation from our
internal management reporting to our external IFRS reporting,
see the Notes to the Consolidated Financial Statements
section, Note (28).

On-Premise Division
The On-Premise division derives its revenue primarily from
the sale of on-premise software (that is, software designed for
installation on the customers hardware) and mobile software
(that is, software designed for use on mobile devices) as well as
services relating to such software.
On-Premise Products Segment
The On-Premise Products segment is primarily engaged in
marketing and licensing our on-premise and mobile software
products and providing support services for them.
On-Premise Products segment revenue grew 3% from
12,881 million in 2012 to 13,227 million in 2013. This increase
and a 4% decrease from currency efects. The increase resulted
principally from growth in support revenue, which more than
ofset a slight decline in software solution licensing. Software
revenue attributable to our On-Premise Product segment
declined 3% to 4,517 million (2012: 4,656 million). The
decline refects a 2% increase from changes in volumes and
prices and a 5% decrease from currency efects. Support
revenue grew 6% to 8,710 million (2012: 8,226 million). This
increase refects a 10% increase from changes in volumes
and prices and a 4% decrease from currency efects.
In 2013, cost of revenue increased 1% to 2,020 million (2012:
1,994 million) and sales and marketing costs grew 1% to
3,447 million (2012: 3,414 million). The moderate increase
in expenses in the On-Premise Products segment was the
result of greater investment in providing and operating our
Cloud solutions in response to growing demand in 2013.
Ariba Segment
The Ariba segment is primarily engaged in marketing and
selling subscriptions to cloud software developed by Ariba for
its business commerce network. While this segment is named
Ariba, it is not identical to the acquired Ariba business because
certain SAP activities have been transferred to our Ariba
segment.
The numbers for the Ariba segment include the acquired Ariba
company numbers as of October 1, 2012, as well as the
numbers for those SAP activities that were allocated to the
Ariba segment upon its establishment.
In 2013, revenue from the Ariba segment grew 283% to 461
million (2012: 120 million). This increase refects a 299%
increase from changes in volumes and prices and a 16%
decrease from currency efects. It results mainly from the fact
that only fourth-quarter Ariba revenue is included in the 2012
numbers.
In 2013, cost of revenue increased 151% to 180 million (2012:
72 million) and sales and marketing costs grew 250% to
151 million (2012: 43 million). The expense rise in the Ariba
segment is mainly due to the fact that Ariba was acquired in
the fnal quarter of 2012.
Ariba segment proft was 130 million (2012: 5 million).
Segment proftability was 28% (2012: 5%).

Financial Income, Net
Financial income, net, changed to 66 million
(2012: 72 million). Our fnance income was 115 million
(2012: 103 million) and our fnance costs were 181 million
(2012: 175 million).
Finance income mainly consists of interest income from loans
and fnancial assets (cash, cash equivalents, and current
investments), which was 37 million in 2013 (2012: 45 million).
This decrease is attributable to a lower average liquidity and
lower interest rates than in 2012.
The cloud revenue refects only the portion of customer orders
already recognizable in revenue. In contrast, the portion of
customer orders already invoiced for that refers to services
that have not yet been delivered and is as such not recognizable
in revenue is refected in deferred cloud revenue. Orders placed
by the customers, which have not yet been delivered and not
yet been invoiced are included in the backlog perfomance
indicator.
Non-IFRS deferred cloud subscription and support revenue
was 447 million on December 31, 2013 (December 31, 2012:
358 million), a year-over-year increase of 25%. Our cloud
subscription and support backlog increased 50% to 1,202
million on December 31, 2013 (December 31, 2012: approxi-
mately 800 million).
Cloud Applications Segment
The Cloud Applications segment is primarily engaged in
marketing and selling subscriptions to cloud software developed
by SAP and SuccessFactors.
In 2013, revenue from the Cloud Applications segment
grew 53% to 514 million (2012: 336 million). This increase
and a 4% decrease from currency efects. Greater customer
demand for cloud applications led to the steep rise in revenue
in 2013.
In 2013, cost of revenue increased 9% to 178 million
(2012: 163 million) and sales and marketing costs grew 42%
to 328 million (2012: 231 million). These costs rose in the
Cloud Applications segment principally as a result of increased
business activity in response to greater customer demand
for cloud applications in 2013.
Cloud Applications segment proft grew to 8 million (2012:
59 million loss). Segment proftability was 2% (2012: 17%).
Basic earnings per share increased to 2.79 (2012: 2.35). The
increase refects the higher proft after tax compared to 2012.
The number of shares outstanding remained almost constant
year over year at 1,193 million (2012: 1,192 million).
Dividend
We believe our shareholders should beneft appropriately from
the proft the Company made in 2013. We wish to continue
our dividend policy, which is that the payout ratio should be
more than 30% of the proft after tax of the Group.
The Executive Board and the Supervisory Board will therefore
recommend to the Annual General Meeting of Shareholders
that the total dividend be increased by 18% to 1.00 per share
(2012: 0.85). Based on this recommendation, the overall
dividend payout ratio (which here means total distributed dividend
as a percentage of proft) would be 36% (2012: 36%).
If the shareholders approve this recommendation and if
treasury shares remain at the 2013 closing level, the total
amount distributed in dividends would be 1,194 million. The
actual amount distributed may be diferent from that total
because the number of shares held in treasury may change
before the Annual General Meeting of Shareholders. Transactions
related to share-based payments could also change the
amount of common stock. In 2013 we distributed 1,013 million
in dividends from our 2012 proft. In 2012 we also returned
53 million to the shareholders by repurchasing SAP treasury
shares. In 2013 we did not repurchase further SAP treasury
shares.
Earnings per Share
| change since previous year
1.47
5%
1.52
+3%
2.89
+90%
2.35
19%
2.79
+18%
2009 2010 2011 2012 2013
Finance costs mainly consist of interest expense on fnancial
liabilities (131 million in 2013 compared to 130 million in
2012) and remained virtually stable year over year. For more
information about these fnancing instruments, see the Notes
to the Consolidated Financial Statements section, Note (17b).
Another factor in fnancial income, net, in 2013 was the deriva-
tives we utilize to execute our fnancial risk management strategy.
The associated time value efects from derivatives were
refected in interest income of 32 million (2012: 27 million)
and interest expenses of 23 million (2012: 28 million).

Income Tax
Our efective tax rate decreased to 24.4% in 2013 (2012:
26.2%). The reason for the year-over-year decrease mainly
resulted from prior year taxes. For more information, see
Note (10).

Proft After Tax and Earnings per Share
Proft after tax increased 19% to 3,325 million in 2013 (2012:
2,803 million). The higher proft after tax in 2013 derived
mainly from the increase of our operating proft and the lower
efective tax rate.

Proft After Tax
1,750
5%
1,813
+4%
3,437
+90%
2,803
18%
3,325
+19%
2009 2010 2011 2012 2013
We manage credit, liquidity, interest rate, equity price, and
foreign exchange rate risks on a Group-wide basis. We use
selected derivatives exclusively for this purpose and not for
speculation, which is defned as entering into a derivative
instrument for which we do not have a corresponding under lying
transaction. The rules for the use of derivatives and other rules
and processes concerning the management of fnancial risks
are collected in our treasury guideline document, which
applies globally to all companies in the Group. For more
information about the management of each fnancial risk and
about our risk exposure, see the Notes to the Consolidated
Financial Statements section, Notes (24) to (26).
Liquidity Management
Our primary source of cash, cash equivalents, and current
investments is funds generated from our business operations.
Over the past several years, our principal use of cash has been
to support operations and our capital expenditure requirements
resulting from our growth, to acquire businesses, to pay dividends
on our shares, and to buy back SAP shares on the open market.
On December 31, 2013, our cash, cash equivalents, and current
investments were primarily held in euros and U.S. dollars. We
generally invest only in the fnancial assets of issuers or funds
with a minimum credit rating of BBB, and pursue a policy of
cautious investment characterized by wide portfolio
diversifcation with a variety of counterparties, predominantly
short-term investments, and standard investment instruments.
We rarely invest in the fnancial assets of issuers with a credit
rating lower than BBB, and such investments were not material
in 2013.
In 2013, SAP signed a new revolving credit facility contract. The
size of the facility was increased from 1.5 billion to 2.0 billion
to support the companys growth for more information
see the Credit Facilities section. We believe that our liquid assets
combined with our undrawn credit facilities are sufcient to
meet our present operating needs and, together with expected
cash fows from operations, will support our currently planned
capital expenditure requirements over the near term and
medium term. It may also be necessary to enter into fnancing
transactions when additional funds are required that cannot
be wholly sourced from free cash fow (for example, to fnance
large acquisitions).

In 2011, in addition to the regular dividend of 0.75 per
share, we rewarded our shareholders with a special dividend of
0.35 per share to celebrate our 40th anniversary.

FINANCES (IFRS)

Overview
Global Financial Management
We use global centralized fnancial management to control
liquid assets and monitor exposure to interest rates and
currencies. The primary aim of our fnancial management is to
maintain liquidity in the Group at a level that is adequate to
meet our obligations. Most SAP companies have their liquidity
managed centrally by the Group, so that liquid assets across
the Group can be consolidated, monitored, and invested in
accordance with Group policy. High levels of liquid assets help
keep SAP fexible, sound, and independent. In addition, various
credit facilities are currently available for additional liquidity,
if required. For more information about these facilities, see the
Credit Facilities section.
Dividend per Share
| change since previous year
0.50
+0%
0.60
+20%
1.10
+83%
0.85
23%
1.00
+18%
2009 2010 2011 2012 2013
customer confdence, and to support the growth of our business.
We seek to maintain a capital structure that will allow us to
cover our funding requirements through the capital markets at
reasonable conditions, and in so doing, ensure a high level of
independence, confdence, and fnancial fexibility.
Based on our strong corporate fnancial profle and our excel-
lent capital market reputation, we have so far successfully
executed external fnancing transactions without an external
rating. However, we will continue to closely monitor our
fnancing situation to determine whether not having an external
rating continues to be appropriate.
Our general intention is to remain in a position to return excess
liquidity to our shareholders by distributing annual dividends
and repurchasing shares. The amount of future dividends and
the extent of future repurchases of shares will be balanced with
our efort to continue to maintain an adequate liquidity position.
Capital Structure
2013 2012 % Change
millions % of
Total equity and
liabilities
millions % of
Total equity and
liabilities
Equity 16,048 59 14,133 54 14
Current liabilities 6,347 23 6,546 25 3
Non-current liabilities 4,699 17 5,627 21 16
Liabilities 11,046 41 12,173 46 9
Total equity and liabilities 27,094 100 26,306 100 3
The persistently strong free cash fow of recent years enabled
us to pay back additional debts within a short period of time.
Furthermore, a balanced maturity profle prevents repayment
peaks from occurring in any particular year.
To expand our business, we have made acquisitions of
businesses, products, and technologies. Depending on our
future cash position and future market conditions, we might
issue additional debt instruments to fund acquisitions, maintain
fnancial fexibility, and limit repayment risk. Therefore, we
continuously monitor funding options available in the capital
markets and trends in the availability of funds, as well as the
cost of such funding. For more information about the fnancial
debt, see the Cash Flows and Liquidity section.
Capital Structure Management
The primary objective of our capital structure management is
to maintain a strong fnancial profle for investor, creditor, and
Cash Flows and Liquidity
Group liquidity on December 31, 2013, primarily comprised
amounts in euros (1,056 million) and U.S. dollars (884 million).
Current investments are included in other fnancial assets in
the statement of fnancial position. Financial debts are included
within fnancial liabilities in the statement of fnancial position.
Group Liquidity of SAP Group
millions
2013 2012 Change
Cash and cash equivalents 2,748 2,477 271
Current investments 93 15 78
Group liquidity 2,841 2,492 349
Current financial debt 586 600 14
Net liquidity 1 2,255 1,892 363
Non-current financial debt 3,722 4,394 672
Net liquidity 2 1,467 2,502 1,035
Group liquidity consists of cash and cash equivalents (for
example, cash at banks, money market funds, and time deposits
with original maturity of three months or less) and current
investments (for example, investments with original maturities
of greater than three months and remaining maturities of less
than one year) as reported in our IFRS Consolidated Financial
Statements.
Our fnancing activities improved our debt ratio (defned as
the ratio of total liabilities to total equity and liabilities, expressed
as a percentage) to 41% at the end of 2013 (as compared to
46% at the end of 2012). The ratio of total fnancial debt to
total equity and liabilities decreased by 3% to 16% at the end
of 2013 (19% as at December 31, 2012). Total fnancial debt
consists of current and non-current bonds and private
placements. For more information about our fnancial debt, see
Note (17).
As part of our fnancing activities in 2014, the Company intends
to repay a 500 million Eurobond and an 86 million German
promissory note when they both mature in April 2014.
Total liabilities on December 31, 2013, mainly comprised
fnancial liabilities of 4,506 million (of which 3,758 million
are non-current). Financial liabilities on December 31, 2013,
consisted largely of fnancial debt, which included amounts in
euros (2,386 million) and U.S. dollars (1,922 million). On
December 31, 2013, 100% of fnancial debt was held at fxed
interest rates, of which 56% were swapped into variable
interest rates using interest rate swaps. For more information
about fnancial liabilities, see the Notes to the Consolidated
Financial Statements section, Note (17).

Net cash provided by operating activities remained stable in
2013 (3,832 million) compared to the prior year (2012:
3,822 million). Increased income tax payments of 193 million
to 1,295 million in 2013 burdened net cash fows from operating
activities. In addition, days sales outstanding (DSO) for
receivables, defned as average number of days from the raised
invoice to cash receipt from the customer, was 62 days, a
three-day increase compared to 2012 (59 days).
Cash outfows from investment activities totaled 1,781 million
in 2013, much decreased from the 2012 fgure of 5,964 million
that were attributed mainly to business combinations of
SuccessFactors and Ariba. In 2013, cash outfows were mainly
driven by the acquisitions of consolidated companies (especially
hybris) as well, for which we paid 1,160 million in total. For
more information about current and planned capital expenditures,
see the Assets and Investment Goals sections.
Cash outfows from fnancing activities totaled 1,589 million
in 2013, compared to 194 million in 2012. In 2013, cash outfows
were mainly driven by dividends paid and a repayment of an
issued 600 million Eurobond. In addition, we took out a
short-term bank loan in the amount of 1,000 million to fnance
the acquisition of hybris that were fully ofset by repayments
Net liquidity is Group liquidity less total fnancial debt as
defned above.
The increase in Group liquidity from 2012 was mainly due
to positive cash infows from our operations, which were partly
ofset by cash outfows for acquisitions (such as hybris),
dividend payments and repayment of an issued Eurobond.
For information about the impact of cash, cash equivalents,
current investments, and our fnancial liabilities on our income
statements, see the analysis of our fnancial income, net, in
the Operating Results (IFRS) section.

Analysis of Consolidated Statements of Cash Flow
Analysis of Consolidated Statements of Cash Flow
millions
2013 2012 Change (in %)
activities
3,832 3,822 0
Net cash flows from investing
activities
1,781 5,964 70
Net cash flows from financing
activities
1,589 194 >100

Group
Liquidity
12/31/2012
2,492
Operating
Cash Flow
Capital
Expenditure
Acquisitions Dividends
Paid
Proceeds from
Borrowings
Repayments
of Borrowings
Other Group
Liquidity
12/31/2013
2,841
+3,832
566
1,160
1,013 +1,000
1,625
119
Group Liquidity Development
millions
31, 2013, approximately 36 million was available through such
arrangements. There were no borrowings outstanding under
these credit facilities from any of our foreign subsidiaries as at
December 31, 2013.

ASSETS (IFRS)
Analysis of Consolidated Statements of Financial Position
Total assets increased by 3% year over year to 27,094 million.

Total current assets increased by 6% in 2013 from 6,928 million
to 7,352 million. This was mainly due to an increase in cash
and cash equivalents to 2,748 million (2012: 2,477 million)
stemming from cash infows from our operating activities.
Total non-current assets increased slightly in 2013 to
19,741 million compared to the previous years fgure of
19,378 million. This 2% increase was mainly due to
additions to goodwill, resulting from the acquisition of hybris.
Breakdown of Consolidated Statements of Financial Position
Percent
Assets Liabilities
26
74
27
73
25
21
54
23
18
59
2012 2013 2012 2013
Short term Long term Shareholders equity
in the same amount and year. In the previous year, cash outfows
from fnancing activities were mainly driven by repayments of
a Eurobond tranche (600 million) and several tranches
(611 million) of the promissory notes we issued in 2009 and
dividends paid. This was almost fully compensated by a
successfully placed Eurobond transaction totaling 1.3 billion
and a U.S. private placement transaction of US$1.4 billion.
The decrease of total dividends paid in 2013 to 1,013 million
(2012: 1,310 million) was due to a decrease in dividend paid
to 0.85 per share compared to 1.10 per share in the previous
year, of which 0.35 per share was an extraordinary payout to
celebrate our 40th anniversary in 2012.
Credit Facilities
Other sources of capital are available to us through various
credit facilities, if required.
By signing a new credit facility contract of 2.0 billion, SAP
refnanced its existing credit facility of 1.5 billion that would
have expired in December 2015. The revolving credit facility
was early refnanced due to favorable market conditions with a
tenor of fve years plus two one year extension options. The credit
line may be used for general corporate purposes. A possible
future withdrawal is not bound to any fnancial covenants.
Borrowings under the facility bear interest at the euro interbank
ofered rate (EURIBOR) or London interbank ofered rate (LIBOR)
for the respective optional currency plus a margin ranging
from 0.3% to 0.525% (2012: 0.45% to 0.75%). We pay a
commitment fee of 0.079% (2012: 0.1575%) per annum on
unused amounts of the available credit facility. So far, we have
not used and do not currently foresee any need to use this
credit facility.
As at December 31, 2013, SAP AG had additional available
credit facilities totaling 487million. As at December 31, 2013,
there were no borrowings outstanding under these credit
facilities. Several of our foreign subsidiaries have credit
facilities available that allow them to borrow funds in their local
currencies at prevailing interest rates, generally to the
extent SAP AG has guaranteed such amounts. As at December
Equity Ratio
Percent | change since previous year
63
+11pp
47
16pp
55
+8pp
54
1pp
59
+5pp
2009 2010 2011 2012 2013
Principal Capital Expenditures and Divestitures
Currently in Progress
In 2013, we started construction activities in several locations.
We aim to extend our ofce space and data center capacities
to be able to cover future growth. We plan to cover all of these
projects in full from operating cash fow. The most important
projects are:
In Bangalore, India, we want to add additional capacity of
roughly 2,500 employees. We estimate the total cost to be
approximately 51 million, of which we had paid approximately
2 million as of December 31, 2013. We expect to complete
the construction of this ofce building in 2016.
In Raanana, Israel, we commenced construction of
a new building. We estimate the total cost of this project to
be approximately 50 million, of which we had paid
approximately 10 million as of December 31, 2013. We expect
to complete the construction of this ofce building in 2016.
In our research center in Potsdam, Germany, we started with
a second construction phase in order to realize additional
capacity for at least 100 employees. With the extension of
our research center we aim to create the general conditions
for further teams contributing innovations to SAP products
in miscellaneous felds. We estimate the total cost to be
approximately 12 million, of which we had paid approximately
2 million as of December 31, 2013. We expect to complete
the construction of this ofce building in 2015.
Investment in Goodwill, Intangible Assets or Property, Plant, and
Equipment (incl. Capitalizations due to Acquisitions)
299
94%
5,502
+1,740%
657
88%
6,859
+944%
1,812
74%
2009 2010 2011 2012 2013
Current liabilities decreased slightly to 6,347 million in 2013
as compared to the prior year (6,546 million) which is mainly
due to a drop in our provisions for share-based payments. In
2013 we paid back a 600 million Eurobond, which was almost
fully compensated by reclassifcations of 586 million from
non-current liabilities to current liabilities due to changes in the
respective maturity profle.
The decrease in total non-current liabilities from 5,627 million
in 2012 to 4,699 million in 2013 was due mainly to fnancing
activities. The decrease of non-current fnancial debt relates to
reclassifcations from non-current liabilities to current liabilities
due to changes in the respective maturity profle. For more
information about fnancing activities in 2013, see the Finances
(IFRS) section.
Such fnancing activities improved the equity ratio (that is, the
ratio of shareholders equity to total assets) to 59%, compared
to 54% of the prior year.

and customer relations), employees and their knowledge and
skills, our ecosystem of partners, software we developed
ourselves, our ability to innovate, the brands we have built up
in particular, the SAP brand itself and our organization. On
December 31, 2013, SAP ranked third of the most valuable
companies in Germany in terms of market capitalization based
on all outstanding shares. According to the Interbrand Best
Global Brands annual survey, SAP ranked again the 25th most
valued brand in the world (2012: 25th). Against other German
brands, the SAP brand ranks third behind Mercedes-Benz
and BMW, and 10th globally against other IT brands. Interbrand
determined our value as US$16.7 billion, an increase of 7%
compared to the previous year (2012: US$15.6 billion).
The results of our investment in research and development,
including R&D investment made in the past, are also a signifcant
element in our competitive intangibles.
Our customer capital continued to grow in 2013. We gained
more than 21,500 new customers in various market segments
and strengthened our existing customer relationships. To help
us improve insight into our customers view of SAP, in 2012
we began measuring our Net Promoter Score (NPS), a metric
that gives a more complete picture of customer loyalty as it
answers the question of how likely our customers would be to
recommend SAP. For more information about our new customers
and NPS, see the Customers section.
Employee-related and R&D activities increased the value of
our employee base and our own software. For more information,
see the Employees and Social Investment section and the
Research and Development section. We also increased the
value of our partner ecosystem by continuing to develop sales
and development partnerships.
In New York City, New York, United States, we started planning
the leasehold improvements for our new ofce space.
The project includes the consolidation of our New York City
ofces for approximately 600 employees. We estimate the
total capital expenditures for this project to be approximately
37 million. We expect to complete the leasehold
improvements in 2016.
In Paris, France, we started an ofce consolidation project.
The project aims to consolidate three ofce spaces in Paris
into one ofce space. We estimate the total cost of the
leasehold improvements to be approximately 24 million. We
expect to complete the leasehold improvements in 2014.
In St. Leon-Rot, Germany, we started increasing the capacity
of our data center. We estimate the total cost of this project
to be approximately 30 million, of which we had paid
approximately 14 million as of December 31, 2013. We
expect to complete the construction for this project in 2014.
In Newtown Square, Pennsylvania, United States, we also
started to increase the capacity of our data center. We estimate
the total cost of this project to be approximately 20 million,
of which we had paid approximately 2 million as of
December 31, 2013. We expect to complete the construction
for this project in 2014.
For more information about planned capital expenditures,
see the Investment Goals section. There were no material
divestitures within the reporting period.

Competitive Intangibles
The assets that are the basis for our current as well as future
success do not appear on the Consolidated Statements of
Financial Position. This is apparent from a comparison of the
market capitalization of SAP AG (based on all outstanding
shares), which was 76.5 billion at the end of 2013 (2012:
74.7 billion), with the equity on the Consolidated Statements
of Financial Position, which was 16.0 billion (2012: 14.1 billion).
This means that the market capitalization of our equity is more
than four times higher than the book value. The diference
is mainly due to certain intangible assets that the applicable
accounting standards do not allow to be recorded (at all or
at fair value) on the Consolidated Statements of Financial
Position. They include customer capital (our customer base
SAP AG Income Statement German Commercial Code Short Version
millions
2013 2012
Total revenue 8,413 7,812
Other operating income 893 796
Cost of services and materials 2,896 2,610
Personnel expenses 1,390 1,417
Depreciation and amortization 309 278
Other operating expenses 2,197 2,215
Operating profit 2,514 2,088
Finance income 825 1,144
Income from ordinary activities 3,339 3,232
Income taxes 834 721
Net income 2,505 2,511
The total revenue of SAP AG in 2013 was 8,413 million (2012:
7,812 million), an increase of 8%. Product revenue increased
4% to 6,543 million (2012: 6,295 million). As in previous
years, product revenue was primarily generated from license
fees paid by subsidiaries of SAP AG. The increase in SAP AG
revenue in 2013 was therefore principally the result of the
increase in software and software-related service revenue
achieved by the SAP Group.
Other operating income increased 97 million to 893 million
(2012: 796 million). The year-over-year increase is
due primarily to a rise in gains from currency efects.
SAP AG operating proft increased 20% to 2,514 million
(2012: 2,088 million). SAP AG cost of services and materials
increased 11% to 2,896 million (2012: 2,610 million). SAP AG
cost of services and materials comprises third-party services,
including those provided by SAP subsidiaries. SAP AG personnel
expenses, mainly the labor cost of the developers, service and
support employees, and administration staf employed by SAP
AG, decreased slightly by 2% to 1,390 million (2012: 1,417
million) in spite of headcount increase, primarily because of a
signifcant decrease in share-based payment related expenses.
Other operating expenses decreased 1% to 2,197 million,
mainly due to lower currency losses that declined 39 million
compared to the previous year.
SAP AG is headquartered in Walldorf, Germany, and is the parent
company of the SAP Group, which comprises 272 companies.
SAP AG is the Group holding company and employs most of
the Groups Germany-based development and service and
support personnel.
As the owner of the intellectual property in most SAP software,
SAP AG derives its revenue mainly from software license fees
paid by its subsidiaries for the right to market SAP solutions.
The SAP AG annual fnancial statements are prepared in
accordance with the reporting standards in the German
Commercial Code (as amended by the German Accounting
Law Modernization Act) and the German Stock Corporation
Act. The full SAP AG annual fnancial report and unqualifed
audit report are submitted to the operator of the Elektronischer
Bundesanzeiger (Online German Federal Gazette) for
publication and inclusion in the Unternehmensregister (German
Business Register). It is available from SAP AG on request.
INCOME
The income statement uses the nature of expense method and
presents amounts in millions of euros.
SAP AG Balance Sheet German Commercial Code Short Version
millions
12/31/2013 12/31/2012
Assets
Intangible assets 289 406
Property, plant, and equipment 965 917
Financial assets 16,857 16,664
Fixed assets 18,111 17,987
Inventories 2 4
Accounts receivable 2,857 2,541
Liquid assets 884 307
Short-term assets 3,743 2,852
Prepaid expenses and deferred
charges
113 115
Deferred taxes 63 74
Surplus arising from offsetting 25 9
Total assets 22,055 21,037
Equity and liabilities
Shareholders' equity 11,295 9,717
Provisions 1,203 1,251
Other liabilities 9,549 10,063
Deferred income 8 6
Total shareholders equity and
liabilities
22,055 21,037
Financial assets increased 1% compared with the previous
year to 16,857 million, primarily caused by the increase in
contributions to subsidiaries. Short-term assets stood at
3,743 million (2012: 2,852 million), a year-over-year increase
of 891 million. 316 million of the increase is attributable
to accounts receivable and 577 million to liquid assets.
SAP AG shareholders equity rose 16% to 11,295 million
(2012: 9,717 million). Against outfows of 1,013 million
associated with the payment of the 2012 dividend, there was a
2,505 million increase in net income and an infow of 86 million
from the issuance of shares to service the share-based payments
of employees and Executive Board members. The equity
ratio (that is, the ratio of shareholders equity to total assets)
increased from 46% in 2012 to 51% in 2013.
Finance income was 825 million (2012: 1,144 million),
a decrease of 319 million compared with the previous year,
mainly caused by a 322 million decrease in income from
securities classifed as fnancial assets and 108 million
decrease in investment income. This decrease in fnance
income was ofset by increases of 10 million in income from
proft transfer agreements and 26 million in net interest
income, as well as a decrease of 76 million in write-downs of
fnancial assets.
SAP AG income from ordinary activities, which is the sum
of operating proft and fnance income, increased 3% to
3,339 million (2012: 3,232 million). Income tax increased
19% to 831 million (2012: 701 million). The primary cause
was a large reduction in income from securities classifed
as fnancial assets, much of which is non-taxable. After deducting
taxes, the resultant net income decreased 6 million year
over year to 2,505 million (2012: 2,511 million).
ASSETS AND FINANCIAL POSITION
In 2013, SAP AG total assets closed at 22,055 million (2012:
21,037 million).
111 Report on the Economic Position of SAP AG
Mainly due to the mentioned cash contributions by subsidiaries
through SAP AG's centralized management of fnance and
liquidity as well as to positive business performance, the cash
fow from operating activities increased 653 million to
2,987 million in 2013 (2012: 2,334 million).
SAP AG used net cash fows from investing activities of
485 million in 2013 (2012: 4,598 million), a year-over-year
decrease of 4,113 million. The outfows were 500 million for
property, plant and equipment and fnancial assets and 50
million for long-term investments. They were in part ofset by
infows of 66 million from sales of property, plant and
equipment and fnancial assets. In the prior year, contributions
to subsidiaries capital related to the acquisition of Success-
Factors and Ariba occasioned outfows of 4,830 million.
Net cash fows from fnancing activities were 1,975 million in
2013 compared to 271 million in 2012. In 2013, SAP AG
outfows included the dividend of 1,013 million (2012: 1,310
million and repayments of fnancial liabilities of 1,015 million.
On the other hand, SAP AG generated infows of 53 million
from the reissuance of treasury shares and the issuance of new
shares for share-based payments.
At the close of the year, SAP AG held 834 million in short-term
liquid assets (2012: 307 million), a year-over-year decrease of
527 million.
OPPORTUNITIES AND RISKS
SAP AG is subject to materially the same opportunities and risks
as the SAP Group. For more information, see the Opportunity
Report and the Risk Report sections.

Provisions decreased 48 million to 1,203 million. While the
other provisions decreased 107 million to 662 million,
mainly due to lower share-based payment related provisions,
the reserves for tax increased 58 million to 539 million.
Other liabilities decreased 514 million to 9,549 million
(2012: 10,063 million). This decrease is mainly attributable to
contrasting efects: On the one hand, SAP AG made a
scheduled repayment of a bond in the amount of 600 million;
on the other, SAP AG liabilities to afliated companies decreased
95 million, mainly due to increased cash contribution by
subsidiaries through SAP AG's centralized management of
fnance and liquidity.
SAP AG Cash Flow Statement
German Commercial Code Short Version
millions
2013 2012
activities
2,987 2,334
Net cash flows from investing
activities
485 4,598
Net cash flows from financing
activities
1,975 271
Net decrease/increase in cash and
cash equivalents
527 2,535
Cash and cash equivalents at
the beginning of the year
307

2,842

Cash and cash equivalents at
the end of the year
834

307

INFLUENCE OF ACCOUNTING POLICIES ON OUR
FINANCIAL POSITION
For more information about our accounting policies, see
Note (3).
There are no of-balance sheet fnancial instruments, such as
sale-and-lease-back transactions, asset-backed securities,
and liabilities related to structured entities, that are not disclosed
in our Consolidated Financial Statements.

EXECUTIVE BOARDS ASSESSMENT
SAP delivered strong revenue and proft growth in 2013. SAP
HANA, our platform for real-time business applications,
was a major growth engine in 2013. SAP Business Suite powered
by SAP HANA is becoming a leading platform for high-
performance applications.
Our stable, highly proftable core business and our fast-growing
cloud business can together deliver continued growth and
an expanding margin. We still aim to increase total revenue
growth, both for the near term and for the medium term. At
the same time, we want to build still greater proftability for our
business. All in all, SAP remains in good fnancial shape.
113 Overall Financial Position
As invited by management, SAP employees and their
representatives in the European Union (EU) and European
Economic Area (EEA) countries elected their delegates to a
Special Negotiating Body (SNB). Negotiations between SAP
management and the SNB regarding the European employees
involvement in the SE began in September 2013, are ongoing,
and are expected to last six months. SAP intends to seek the
required approval of the shareholders for the conversion of
legal form at the 2014 Annual General Meeting of Shareholders.
If approved, the change of legal form would take efect upon
entry in the commercial register. With the conversion to an SE,
its shareholders automatically become shareholders of SAP
SE. Shareholders rights remain unchanged.
CHANGES IN MANAGEMENT
Lars Dalgaard stepped down from the Executive Board and left
the Company on June 1, 2013, to join a private equity frm. He
continues to play an active role as an advisor to the SAP Cloud
business in the Cloud Governance Board.
We have consolidated all responsibility for innovation and product
development under Vishal Sikka, a member of the Executive
Board. With efect from June 1, 2013, all on-premise delivery,
network (Ariba), and Cloud unit development leaders report
directly to Vishal Sikka. Additionally, the Executive Board
nominated Bernd Leukert, executive vice president for
application innovation, to the Global Managing Board with
efect from July 1, 2013. In this capacity, Leukert reports
directly to Vishal Sikka.
Luisa Deplazes Delgado, member of the Executive Board
of SAP AG, Human Resources, and Labor Relations Director
decided to leave SAP with efect from June 30, 2013, to
become the CEO of another company.
CORPORATE GOVERNANCE STATEMENT
The German Commercial Code, section 289a, requires that
listed stock corporations publish a corporate governance
statement either as part of their management report or on
their Web site. The Executive Board fled SAPs corporate
governance statement on February 19, 2014, and published it
on our public Web site at www.sap.com/corporate-en/
investors/governance.
For more information about the corporate governance of SAP,
see the Corporate Governance Report section.
PLANNED CONVERSION TO A EUROPEAN COMPANY
In March 2013, the Executive Board and Supervisory Board of
SAP AG agreed to convert SAP AG to a European Company
(SE). SAP has begun working on the conversion process. The
Executive Board and the Supervisory Board believe that the
planned change of legal form refects SAPs position as a global
company with European roots. The European Company legal
form also refects SAPs European and international business
activities. The European Company legal form will allow SAP to
optimize its corporate governance structure and the work of its
Supervisory Board and Executive Board.
In addition to his role as our chief fnancial ofcer, Werner
Brandt took on Executive Board responsibility for human
resources and became the labor relations director in Germany.
In this context, Luka Mucic became the head of global
fnance to support Brandt in his expanded responsibilities. The
Executive Board nominated Mucic to the Global Managing
Board with efect from July 1, 2013. In October 2013, the
Supervisory Board of SAP AG appointed Luka Mucic chief
fnancial ofcer, efective July 1, 2014. Luka Mucic is the
successor of Werner Brandt, who will, as planned, withdraw from
the Executive Board by that time.
On July 21, 2013, the SAP Supervisory Board agreed to
propose that co-CEO Jim Hagemann Snabe be elected to the
SAP Supervisory Board at the SAP Annual General Meeting
of Shareholders in May 2014. This proposal is subject to support
by at least 25% of the shareholders. Jim Hagemann Snabe
will conclude his current role as co-CEO and member of
the SAP Executive Board upon the conclusion of the Annual
General Meeting of Shareholders in May 2014.
Bob Calderoni, president of Ariba, an SAP company, and a
member of our Global Managing Board, decided to leave SAP
with efect from January 15, 2014.

115 Corporate Governance
Legal requirements and provisions in the Articles of Incor-
poration concerning the appointment and dismissal of
members of the Executive Board and amendment of the
Articles of Incorporation:
Conditions for the appointment and dismissal of members
of the Executive Board and amendment of the Articles of
Incorporation refect the relevant provisions in the German
Stock Corporation Act. Under the Articles of Incorporation,
the Executive Board consists of at least two members who
are appointed for a period of not more than fve years by the
Supervisory Board in accordance with the German Stock
Corporation Act, section 84. The number of members of the
Executive Board is decided by the Supervisory Board. Executive
Board members may be reappointed for, or their term of
ofce extended by, a maximum of fve years. The German
Codetermination Act, section 31, provides that a two-thirds
majority of the Supervisory Board membership is required
for Executive Board appointments. If the Supervisory Board
fails to make an appointment with a majority that meets
this requirement, the Mediation Committee must propose an
appointee within one month. Appointments to the Executive
Board can then be made by a simple majority of the
Super visory Board membership. If the Supervisory Board also
fails to make an appointment with a majority that meets this
requirement, the chairperson of the Supervisory Board has
two votes in the subsequent ballot. The Supervisory Board
can appoint a chairperson of the Executive Board and one or
more deputy chairpersons from among the members of the
Executive Board. The Supervisory Board can revoke
appointments to the Executive Board in accordance with the
German Stock Corporation Act, section 84, if compelling
reasons exist, such as gross negligence on the part of the
Executive Board member. If the Executive Board is short of a
required member, one may be appointed in urgent cases by a
court in accordance with the German Stock Corporation Act,
section 85. In accordance with the German Stock Corporation
Act, sections 179 and 133, an amendment of the Articles of
Incorporation requires a resolution of the General Meeting of
Shareholders with a majority of at least three-quarters of the
share capital represented in the vote and the simple majority
of the votes cast. Section 11 (2) of the Articles of Incorporation
authorizes the Supervisory Board to amend the Articles
of Incorporation where such amendments only concern the
wording.
Information required under the German Commercial Code,
sections 289 (4) and 315 (4), with explanatory report:
Composition of share capital: For information about the
composition of SAP AG share capital as of December 31,
2013, see the Notes to the Consolidated Financial Statements
section, Note (20). Each share entitles the bearer to one
vote. American depositary receipts (ADRs) representing our
shares are listed on the New York Stock Exchange in the
United States. ADRs are certifcates representing non-U.S.
shares and are traded on U.S. stock exchanges instead of the
underlying shares. One SAP ADR corresponds to one SAP
share.
Restrictions applying to share voting rights or transfers:
SAP shares are not subject to transfer restrictions except the
lock-in period under the SAP Share Matching Plan (SMP),
described below. SAP held 34,795,554 treasury shares on
December 31, 2013. Treasury shares did not entitle us to any
rights, and hence to any voting rights or dividend. Shares
issued in 2013 under the employee SMP are subject to
contractual transfer restrictions for a three-year lock-in period
unless the plan members employment with SAP is ended
during that period. Until that lock-in period has expired, the
participating employees are not ordinarily allowed to dispose
of the shares they have acquired under the plan. We are not
aware of any other restrictions applying to share voting rights
or to share transfers.
Shareholdings that exceed 10% of the voting rights: We
are not aware of any direct or indirect SAP AG shareholdings
that exceed 10% of the voting rights.
Shares with special rights conferring powers of control:
No SAP shareholder has special rights conferring powers of
control.
Type of control over voting rights applying to employee
shareholders who do not directly exercise their control
rights: As with other shareholders, employee holders of SAP
shares exercise their control rights in accordance with the
law and the Articles of Incorporation. In votes on the formal
approval of their acts at the Annual General Meeting of
Shareholders, employee representatives on the Supervisory
Board as all other members of the Supervisory Board are
prohibited from exercising the voting rights associated with
their shares.
Material agreements with provisions that take efect in the
event of a change of control following a takeover bid: SAP
AG has concluded the following material agreements with
provisions that take efect in the event of a change of control,
whether following a takeover bid or otherwise:
The terms of SAPs syndicated 2 billion revolving credit
facility include a change-of-control clause. For more infor-
mation about this syndicated credit facility, see the Notes to
the Consolidated Financial Statements section, Note (25).
This clause obliges SAP AG to notify the banks in case of a
change of control. If, on receiving the notifcation, banks
that represent at least two-thirds of the credit volume so
require, the banks have the right to cancel the credit facility
and demand complete repayment of the outstanding debt.
If no continuation agreement is reached, the credit facility
would end and the obligation to repay would become efective
at an ascertainable time.
The terms of the German promissory notes totaling
86 million include a change-of-control clause. For more
information about these German promissory notes, see
Note (17b). The clause gives the lenders special termination
rights in case of a change of control. If no continuation
agreement is reached within 30 days after a change of
control, the lenders would be entitled to declare the loan due
and demand repayment of the outstanding debt without
delay.
In agreements between SAP AG and various banks for
bilateral credit facilities that totaled 487 million on
December 31, 2013, we have agreed customary material
adverse change clauses permitting the banks to terminate if
events occur that are materially adverse to the economic
standing of SAP AG, which may possibly also include a change
of control. In the past, we have drawn on these bilateral
credit facilities only infrequently and only for a few days. We
believe that in view of our current liquidity situation,
termination of these credit facilities would not have a
material adverse efect, at least in the near term.
Powers of the Executive Board to issue and repurchase
shares: The Annual General Meeting of Shareholders on
May 25, 2011, granted powers to the Executive Board, subject
to the consent of the Supervisory Board, to issue convertible
and warrant-linked bonds and to grant conversion and option
rights in respect of SAP AG shares representing a total
attributable portion of the share capital of not more than 100
million secured by a corresponding amount of contingent
capital. These powers will expire on May 24, 2016. The Executive
Board is also authorized until June 7, 2015, to increase the
share capital by not more than 250 million by issuing new
shares against contributions in cash and to increase the
share capital by not more than 250 million by issuing new
shares against contributions in cash or in kind. For more
details about the diferent tranches of authorized capital and
the aforementioned contingent capital, see the Articles
of Incorporation, section 4. The Annual General Meeting of
Shareholders on June 4, 2013, granted a power to the Executive
Board in accordance with the German Stock Corporation Act,
section 71 (1)(8), to buy back for treasury on or before June
3, 2018, SAP AG shares attributable in total to not more
than 120 million of the share capital. The power is subject to
the proviso that the shares repurchased, together with any
shares that were previously acquired and are still held by SAP
in treasury and any other shares controlled by SAP, must
not in total exceed 10% of SAPs share capital. Executive Board
powers, such as those described to issue and repurchase
stock and to grant rights of conversion and subscription to
shares of SAP, are widely followed common practice among
German companies like SAP. They give the Executive Board
the fexibility it needs, in particular the options to use SAP
shares as consideration in equity investments, raise funds on
the fnancial markets at short notice on favorable terms, or
return value to shareholders during the course of the year. To
service the SMP, which is an employee stock plan we established
in 2010, the Executive Board is authorized, subject to
Supervisory Board consent, to issue to participants of the
plan new shares until June 7, 2015. This authorized capital
has been used for plan tranches in 2010, 2011, and 2012 (but
not in 2013), and on December 31, 2013, it empowered the
Company to issue new shares representing a total attributable
portion of the share capital of not more than 29,609,256.
117 Information Concerning Takeovers
We have entered into relationships with other companies
to jointly develop and market new software products. These
relationships are governed by development and marketing
agreements with the respective companies. Some of the
agreements include provisions that, in the event of a change
of control over one of the parties, give the other party a
right to consent to the assignment of the agreement or to
terminate it.
Agreements to compensate members of the Executive
Board or the employees in the event of a takeover bid:
Agreements have been concluded with the members of the
Executive Board concerning compensation in the event of a
change of control. These agreements, which are customary
in Germany and elsewhere, are described in the Compensation
Report that is an integral part of this management report.
We have no analogous compensation agreements with other
employees.

SAP issued two bonds in 2010, each in two tranches of
diferent tenures, totaling 2.2 billion. In 2012, SAP set up a
Debt Issuance Program under which a frst tranche of
Eurobonds in the amount of 1.3 billion was issued. In 2013,
a new 4 billion Debt Issuance Program was set up under
which no bonds were issued until December 31, 2013. For
more information about these bonds, see the Notes to the
Consolidated Financial Statements section, Note (17b).
Under the terms agreed with the buyers, we are required
to notify the buyers of any change of control without delay.
If there is a change of control and SAP is consequently
assigned a lower credit rating within a defned period,
buyers are entitled to demand repayment. We currently do
not have a credit rating with any agency. In case that
condition persists in a change of control event, an early
redemption would only be triggered if no rating agency
assigns a credit rating during the change of control period.
Under the terms of our U.S. private placements totaling
US$2.65 billion, we are required to ofer lenders repayment
of outstanding debt if there is a change of control and SAP
is consequently assigned a lower credit rating within a
defned period. For more information about these private
placements, see the Notes to the Consolidated Financial
Statements section, Note (17b). Lenders would have at least
30 days to accept the ofer. We currently do not have a
credit rating with any agency. In case that condition persists
in a change of control event, an early redemption would
only be triggered if no rating agency assigns a credit rating
during the change of control period.
SAP AG is the parent company of the Group and earns most
of its revenue from software license fees and dividends paid by
afliates. Consequently, the opportunities described below
also apply directly or indirectly to SAP AG. Insights and
conclusions apply to segments and portfolio.
OPPORTUNITIES
Opportunities from Positive Development of
Economic Conditions
Economic conditions have a clear infuence on our business,
fnancial position, proft, and cash fows. Our outlook for 2014
and medium-term prospects are based on future economic
conditions and trends, aligned to our corporate growth
strategies. Consequently, should the global economy experience
a more sustained recovery than is refected in our outlook,
our revenue and proft may exceed our current outlook and
medium-term prospects.
We expect strong growth in emerging markets (Brazil, China, the
Middle East, and Africa). These markets are prime opportunities
for both our established enterprise applications and new
oferings. Africa, for example, is on its way to becoming one
of the new global economic powerhouses. Stable GDP growth
rates are fueled by the continents vast natural resources and
increasing foreign and African investment in public infrastructure.
Software demand is increasing and we expect double-digit
growth rates. SAP Africas current business performance gives
evidence of solid market opportunity and execution capabilities.
In addition, customers and partners are actively targeting
Africa and demand a stronger SAP presence in the region. As
a result, the Board decided to build a targeted strategic growth
plan for the continent to provide strategic answers to key
opportunities and challenges. The expected impact of this
strategy is refected in our outlook. Additional revenue
and proft opportunities may arise over the course of 2014.
Market dynamics are shifting rapidly as in-memory and cloud
computing are being adopted in enterprise IT. Our customers
rely on SAP as the trusted advisor to successfully lead this
transition not only towards in-memory computing and the cloud,
but also towards driving new business outcomes and enabling
business model innovations. To meet these expectations we
must grow consistently and accelerate the pace of our business
transformation by leveraging the right innovation and exploiting
new opportunities.
We have established a framework for opportunity management
by evaluating and analyzing four key areas: current markets,
competitive landscapes, external scenarios, and technological
trends. Furthermore, we have delved into customer product
segmentation, growth drivers and industry-specifc success
factors. These combined insights help the Executive Board
defne market strategies for future consideration.
Our shareholder value relies heavily upon a fne balance of
awareness between risk mitigation and value-driven opportuni-
ties. Therefore, our strong governance model ensures that
decisions are based on return, investment required, and risk
mitigation. More importantly, these decisions rely on the talent
and resources within SAPs entire ecosystem, extending even
to our partner relationships. Without these core assets, it would
not be possible to successfully deliver innovation to our
customers in a consumable, inspiring, and sustainable way.
As far as opportunities are likely to occur, we have incorporated
them into our business plans, our outlook for 2014, and
our medium-term prospects outlined later in this report. The
following section therefore focuses on future trends or
events that might result in a departure from our outlook and
medium-term prospects that are positive for SAP.
Opportunity Report
119 Opportunity Report
Opportunities from Our Strategy for Proftable Growth
Our strategy infuences our business, fnancial position, proft,
and cash fows. Our mission is to deliver proftable growth
across our portfolio of products, solutions, and services. We will
continue to expand our addressable market to US$350 billion
in 2020, compared to US$110 billion in 2010.
We see opportunities in new product and market areas, such as
in-memory, cloud, mobile, digital marketing, social media,
machine-to-machine, and predictive analytics. We are entering
into these areas through organic development as well as
acquisitions. We also seek to establish new business models
and leverage our expanding ecosystem of partners to maximize
these opportunities.
In addition, our core business applications continue to ofer
solid multi-year growth opportunities as we bring innovative
technologies with simplifed consumption to our installed base
and continue to add net new customers.
Successful performance relies on our pace of innovation. SAP
is now taking market share in our targeted market categories
and creating new opportunities to increase the business value
for our customers. This should allow SAP to add further
business value and thus increase the share of our customers
IT spending.
Unexpected portfolio growth may positively impact our revenue,
proft, and cash fows and result in exceeding our stated out-
look and medium-term prospects. Specifcally, SAP HANA and
our cloud oferings could create even more demand than is
refected in our stated outlook and medium-term prospects.
For more information about future opportunities for SAP,
see the Vision, Mission, and Strategy and Report on Expected
Developments sections of this management report.
In addition, we continue to acknowledge the growing demand
for prudent management of resources and sustainable business
models, both for our customers and for ourselves. In this
context, SAP will progress to leverage the technological
capabilities to solve more complex problems of humanity.
For more information about future trends in the global econ-
omy, the IT market outlook, and the potential infuence on SAP,
see the Report on Expected Developments section of this
management report.

Opportunities from Research and Development Traction
Our continued growth through innovation is based on our
ability to leverage R&D resources efectively. We continue to
improve our development processes through design thinking
and lean methodologies. We are accelerating innovation cycles
and engaging more closely with our customers to ensure
accuracy and success.
While speed is a key strength, we also focus on ease of adoption
and providing compelling returns. This allows our customers
to easily consume technologies and software applications with
immediate benefts for their businesses. If we make innovations
available faster than currently anticipated, or if customers
adopt the innovations faster than currently expected, this could
positively impact our revenue, proft, and cash fows and result
in exceeding our stated outlook and medium-term prospects.
For more information about future opportunities in research
and development for SAP, see the Research and Development
and Report on Expected Developments sections of this
management report.
Our outlook and medium-term prospects are based on certain
assumptions regarding employee productivity and engagement.
If the actual employee productivity exceeds these assumptions,
it would positively impact our revenue, proft, and cash fows
and result in exceeding our stated medium-term prospects.
For more information about future opportunities from our
employees, see the Employees section of this management
report.
Opportunities from Our Customer Engagement
SAP goes to market by region, customer segments, line
of business, and industry. We evolve and invest in our go-to-
market coverage model to efectively sell industry-specifc
solutions while increasing our engagement with customers.
We focus on the dynamic and fast-changing landscape each
industry faces as technology evolves.

We ofer unique services that signifcantly drive a return on
investment, and continue to actively look at new opportunities
to increase the value we deliver to our customers. Our outlook
and medium-term prospects are based on certain assumptions
regarding the success of our go-to-market approaches. If the
actual go-to-market success exceeds these assumptions, this
would positively impact our revenue, proft, and cash fows, and
result in exceeding our stated medium-term prospects.

Opportunities from Our Partner Ecosystem
SAP continues to grow and develop a global partner ecosys-
tem. In order to increase market coverage, we want to enhance
our portfolio and spur innovation with the specifed objective
of increasing the partner revenue contribution to SAPs overall
revenue target. In addition to strengthening our core, we will
leverage our entire ecosystem to drive adoption of SAP HANA
and cloud solutions as well. As a result, we are creating an
ever-stronger setup, where we, along with our customers and
partners, co-innovate and develop new innovative solutions on
top of SAP HANA. Our unrivaled partner ecosystem is essential
for making SAP HANA the industrys real-time in-memory
platform of the future.
Should the business of our partners develop better than currently
expected, our indirect sales (partner revenue) could grow
stronger than refected in our outlook and medium-term
prospects. This may positively impact our revenue, proft, and
cash fows and result in exceeding our stated medium-term
prospects.
For more information about opportunities arising from our
partner ecosystem, see the Partner Ecosystem and Report on
Expected Developments sections of this management report.
Opportunities from Our Employees
Our employees drive our innovation, are the value to our
customers, and consistently promote our growth and proft-
ability. In 2013, we increased the number of full-time employees,
especially in sales roles to capture growth opportunities. We
anticipate improvements in employee productivity as a result
of our continued endeavors in design-thinking principles. As
described in the Employees section, we also run programs that
aim to increase engagement, collaboration, and social innovation.
To ensure continuous innovation and sustained business
success, we need to continuously bring the best and brightest
talent to SAP. To do so, we will further strengthen our brand
perception in the market and optimize our recruiting experience
to emphasize our focus on improving peoples lives. Furthermore,
we will maximize mobile channels and innovative talent
strategies to tap into new talent pools.
121 Opportunity Report
Our risk management system is based on fve pillars, comprising
a dedicated risk management policy and a standardized risk
management methodology followed by a global risk manage-
ment organization. The internal control system comprises
the internal control and risk management system for fnancial
reporting (ICRMFR) that also covers the broader business
environment. In 2013, we implemented continuous control
monitoring and continuous auditing in selected areas. Using
the Committee of Sponsoring Organizations of the Treadway
Commission (COSO) framework, we defne and cover internal
controls all along the value chain on a process and subprocess
level to assure that sound business objectives are set in
line with the organizations strategic, operational, fnancial, and
compliance goals. In addition, we have a governance model
in place across risk management and the internal control system
to ensure both systems are efective, as well as a central
software solution to store, maintain, and report all risk-relevant
information.
RISK MANAGEMENT POLICY AND FRAMEWORK
The risk management policy issued by the Executive Board
governs how we handle risk in line with the Companys risk
appetite and defnes a methodology that is applied uniformly
across all parts of the Group. The policy stipulates who is
responsible for conducting risk management activities and
defnes reporting and monitoring structures. We routinely
review and update the policy as necessary. Our global corporate
audit function conducts regular audits to assess the efectiveness
of our risk management system. Every year, SAPs external
auditor assesses if the early risk identifcation system is adequate
to identify risks that may endanger the Groups ability to
continue as a going concern. SAPs enterprise risk management
follows COSO II (integrated framework for enterprise risk
management) and covers risks in the areas of strategy,
operational business, fnancial reporting, and compliance. As of
today, the risk management system analyzes risks and only
assesses or analyzes opportunities where deemed appropriate.
INTERNAL CONTROL AND RISK MANAGEMENT SYSTEM
As a global company, SAP is exposed to a wide variety of risks
across our range of business operations. As a consequence,
the Executive Board has put comprehensive risk management
and internal control structures into place that enable SAP to
identify and analyze risks early on and take appropriate action.
Our risk management and internal control system is designed
to identify potential events that could negatively impact the
Company and to provide reasonable assurance regarding the
achievement of the Company objectives, specifcally our
ability to achieve our fnancial, operational, or strategic goals as
planned.
This system comprises multiple control mechanisms and is an
important element of the corporate decision-making process;
it is therefore implemented as an integral part of SAPs
business processes across the entire Group. Ensuring that our
global risk management eforts are efective and enable us
to aggregate risks and report on them transparently, we have
adopted an integrated risk management and internal control
approach.
SAP AG is a stock corporation domiciled in Germany and issues
securities that are listed on the stock exchanges in Frankfurt,
Berlin, and Stuttgart, in Germany, as well as on the New York
Stock Exchange, in the United States. We are therefore subject
to both German and U.S. regulatory requirements that relate
to risk management and internal controls over fnancial report-
ing, such as provisions in the German Stock Corporation Act,
section 91 (2), and the U.S. Sarbanes-Oxley Act (SOX) of
2002, section 404. The Executive Board has established an
early warning system (risk management system) to ensure
compliance with applicable regulations and for the efective
management of risks.
Risk Report
Probability/Likelihood of Occurrence Description
1 to 19% Remote
20 to 39% Unlikely
40 to 59% Likely
60 to 79% Highly Likely
80 to 99% Near Certainty
In this framework, we defne a remote risk as one that will
occur only under exceptional circumstances and a near certain
risk as one that can be expected to occur within the specifed
time horizon. The period for analyzing our risks is at least the
used forecast period. The period for analyzing our risks that
could be possible threats to the Groups ability to continue as a
going concern, is eight rolling quarters.
Impact Level Impact Definition
Insignificant Negligible negative impact on business, financial position,
profit, and cash flows
Minor Limited negative impact on business, financial position,
Moderate Some potential negative impact on business, financial
position, profit, and cash flows
Major Considerable negative impact on business, financial position,
Business-
critical
Detrimental negative impact on business, financial position,
Based on the likelihood that a risk will occur as well as the
impact the risk would have on SAPs reputation, business,
fnancial position, proft, and cash fow leads us to classify
the risks as high, medium, or low.
RISK MANAGEMENT METHODOLOGY AND REPORTING
The following sections describe the key content elements
of the risk management process as part of SAP policy: risk
planning, identifcation, analysis, response, and monitoring.
Risk planning and risk identifcation for both internal and external
risks are conducted in cooperation between risk managers and
the business units or subsidiaries across the Group. We use
various techniques to identify risks. For example, we have
identifed risk indicators and developed a comprehensive
risk catalog that includes risk mitigation strategies for known
product and project risks. Risk identifcation takes place at
various levels of the Company to ensure that common risk
trends are identifed and end-to-end risk management across
organizational borders is enabled. We apply both qualitative
and quantitative risk analysis as well as other risk analysis
methods such as sensitivity analyses and simulation techniques.
To determine which risks pose the highest threat to the viability
of the Group, we classify them as high, medium, or
low based on the likelihood that a risk will occur within the
assessment horizon as well as the impact the risk would
have on SAPs business objectives if it were realized. The scales
for measuring these two indicators are given in the following
tables.
123 Risk Report
All identifed and relevant risks are reported at the local,
regional, and global levels in accordance with our risk
management policy. At local, regional, and global levels, we
have established executive risk councils that regularly discuss
risks and countermeasures and that monitor the success of
risk mitigation. In addition, the Executive Board and Global
Managing Board are informed quarterly about individual risks
based on clearly defned reporting criteria. Newly identifed
or existing signifcant risks that are above a defned threshold
or with a potential signifcant impact are also reported to
the chairperson of the Supervisory Board and to the chairperson
of the Audit Committee of the Supervisory Board. This
includes any potential going concern risks.
We also have a process in place that analyzes those risks with
respect to potential efects on liquidity, excessive indebtedness,
and insolvency, which could be possible threats to the Groups
ability to continue as a going concern.
Risk analysis is followed by risk response and risk monitoring.
Our risk managers work in close cooperation with the business
owners, ensuring that efective strategies are implemented
to address risks. Risks may be reduced by taking active steps
based on risk approval. Business owners are responsible for
continuously monitoring the risks and the efectiveness
of mitigation strategies, with support from the respective risk
managers. To provide greater risk transparency and enable
appropriate decision making for business owners, we have
established a risk delegation of authority (RDOA) for relevant
parts of the organization as deemed appropriate. RDOA is a
risk management decision-making hierarchy that helps busi-
ness owners gain timely insight into SAPs riskiest projects and
processes, so they are better able to review the relevant
information, understand the risk profle and associated mitigation
strategies, and determine if their approval is warranted.
Depending on the exposure, approval is required at diferent
levels of the Company, up to and including the Executive Board.
Probability
8099% L M H H H
6079% L M M H H
4059% L L M M H
2039% L L L M M
119% L L L L M
Insignifcant Minor Moderate Major Business-Critical
Impact
H = High risk
M = Medium risk
L = Low risk
For hybris, risk management activities are performed by the
chief fnancial ofcer and the head of internal controls, internal
audit, and risk management based on their particular area.
GRC risk managers are responsible for supporting and
monitoring the implementation of risk management across
the Group that is both efective and compliant with regulatory
requirements and SAPs global risk management policy. Based
on SAPs risk management policy, all risks and risk-related
matters have to be reported to the Global GRC organization,
and from an organizational perspective, all risk managers
(except for hybris) report to the Global GRC organization.
The head of Global GRC, together with the corresponding
function within SAPs acquired companies (such as hybris), is
responsible for SAPs internal control and risk management
program, and provides regular updates to the Audit Committee
of the Supervisory Board. The overall risk profle of the Group is
consolidated by the head of Global GRC, who reports to
the head of Global Finance, who is a member of the Global
Managing Board and reports to the CFO.
INTERNAL CONTROL AND RISK MANAGEMENT SYSTEM
FOR FINANCIAL REPORTING BY THE GROUP
The purpose of a companys system of internal control over
fnancial reporting is to ensure with sufcient certainty that its
fnancial reporting is reliable and in compliance with applicable
generally accepted accounting principles. Because of the
inherent limitations of internal control over fnancial reporting,
it may not prevent or bring to light all potential misstatements
in our fnancial statements.
RISK MANAGEMENT ORGANIZATION
Our risk management organization ensures the coverage of
the functions of risk management governance, strategic,
operational, fnancial, and compliance risk management, with
regard to SAP targets. The Global Governance, Risk & Compliance
(GRC) organization comprises a group-wide governance
function, which includes regular maintenance and implementation
of our risk management policy. The uniform process model
comprises all essential elements of risk management: risk
planning, risk identifcation, risk analysis, risk response, and
risk monitoring. This function is also responsible for
standardized risk reporting to risk committees at diferent levels
of the Company, including the Executive Board and Global
Managing Board as well as the chairpersons of the Supervisory
Board and the Audit Committee.
Our strategic risk management function is responsible for
enabling early identifcation and mitigation of risks that could
threaten the successful execution of SAPs strategic objectives.
It also supports the successful execution of our corporate
strategy by creating transparency regarding risks that could
threaten commercial interests or intangible assets such as
corporate or product reputation and brand image.
Operational and fnancial risk management is uniformly
implemented at SAP. GRC risk managers independent of the
business are assigned to each of SAPs important business
units and business activities and to selected strategic initiatives.
All GRC risk managers, together with assigned risk contacts
in the business units, continuously identify and assess risks
associated with material business operations using a uniform
approach and monitor the implementation and efectiveness
of the measures chosen to mitigate risks.
Further fnancial risk management activities are performed by
our Global Treasury function.
125 Risk Report
The Corporate Financial Reporting department conducts all
of SAPs fnancial consolidation. We outsource some work,
such as valuing projected beneft obligations and share-based
payment obligations, as well as purchase price allocations in
the context of asset acquisitions and business combinations.
The employees who work on SAPs fnancial reporting receive
training in the policies and processes.
A committee chaired by the head of Global Finance and member
of the Global Managing Board, proposes the assessment
results on the efectiveness of the ICRMSFR each year as of
December 31 to the Group CFO based on an analysis of the
design and operating efectiveness of our internal controls over
fnancial reporting. The committee meets regularly to set
the annual scope for the test of efectiveness, to evaluate any
possible weaknesses in the controls, and to determine
measures to address them adequately. During its own meetings,
the Audit Committee of the Supervisory Board regularly
scrutinizes the resulting assessments of the efectiveness of
the internal controls with respect to the IFRS Consolidated
Financial Statements.
Its assessment of the efectiveness of SAPs internal controls
over fnancial reporting was that on December 31, 2013, the
Group has an efective internal control system over fnancial
reporting.
RISK MANAGEMENT AND INTERNAL CONTROL
GOVERNANCE
The Executive Board is responsible for ensuring the efectiveness
of the risk management and internal control system. The
efectiveness of both systems and their implementation in the
diferent Executive Board areas is monitored by each board
member. Our Group CFO regularly provides a status on the risk
management and the internal control system to the Audit
Committee. Key risks are reported quarterly to the chairpersons
of the Supervisory Board and the Audit Committee. The Audit
Committee of the Supervisory Board regularly monitors the
efectiveness of SAPs risk management and internal control
system. In this regard, they requested the Corporate Audit
SAPs internal control and risk management system for
fnancial reporting (ICRMSFR) is based on our Group-wide risk
management methodology. The ICRMSFR includes organizational,
control, and monitoring structures designed to ensure that
data and information concerning our business is collected,
compiled, and analyzed in accordance with applicable laws
and properly refected in the IFRS Consolidated Financial
Statements as well as in the stand-alone fnancial statements
of SAP subsidiaries according to local GAAP.
Our ICRMSFR also includes policies, procedures, and measures
designed to ensure compliance of SAPs fnancial reports
with applicable law and standards. We analyze new statutes,
standards, and other pronouncements, as failure to implement
them would present a substantial risk to the compliance of our
fnancial reporting. Finally, the ICRMSFR has both preventive
and detective controls, including, for example, automated and
non-automated reconciliations, segregated duties with two-
person responsibility, authorization concepts in our software
systems, and monitoring.
Our Corporate Financial Reporting department codifes all
accounting policies in the Group Accounting and Global Revenue
Recognition Guidelines. These policies and the corporate
closing schedule together defne the closing process. Under this
closing process all afliates prepare, partly supported by
centralized and outsourced services, their fnancial statements
for consolidation by our Corporate Financial Reporting ofce.
The corporate fnancial reporting department and other
corporate departments assist the local subsidiaries eforts to
comply with Group accounting policies and monitor their
work. Our corporate audit function and Corporate Financial
Reporting department conduct fnancial statement audits
of SAP subsidiaries.
Economic, Political, Social, and Regulatory Risk
Uncertainty in the global economy, fnancial markets, or
political conditions could have a negative impact on our
business, fnancial position, proft, and cash fows, and put
pressure on our operating proft.
Our business is infuenced by multiple risk factors that are both
difcult to predict and beyond our infuence and control. These
factors include global economic and business conditions and
fuctuations in national currencies. Other examples are political
developments and general regulations, as well as budgetary
constraints or shifts in spending priorities of national
governments.
Macroeconomic developments, such as a global economic
crisis, chronic fscal imbalances and slowing economic
conditions in emerging markets, might decrease the ability of
our customers to invest in our solutions. In addition, changes in
the euro rates for particular currencies might have an adverse
efect on business activities with local customers and partners.
All of this could have an adverse efect on our business results,
fnancial condition, proftability or expected growth, and could
have an adverse efect on our stock price. Furthermore, political
instabilities in regions such as the Middle East and Africa, and
natural disasters, contribute to economic and political
uncertainty that could also have an adverse efect on our
business results, fnancial condition, proftability, and expected
growth.
This could have an adverse efect on our customers ability and
willingness to make investments in our products and services.
These events could reduce the demand for SAP software and
services, and lead to:
department to regularly audit various aspects of the risk
management system and its efectiveness. Additional reassurance
will be obtained through the external audit of the efectiveness
of our internal control system over fnancial reporting and the
internal warning system.

SOFTWARE SOLUTION
We use our own risk management software (SAP solutions for
GRC) to efectively support the governance process. Risk
managers record and address identifed risks using our risk
management software to create transparency across all known
risks that exist in the Group, as well as to facilitate risk
management and the associated risk reporting. This information
is available to managers through a mobile app as well as
regularly issued reports, and is consolidated and aggregated
for the quarterly report to the Executive Board and the
Global Managing Board. The solution also supports the
risk-based approach of SAPs internal control and risk
management system for fnancial reporting (ICRMSFR).
RISK FACTORS
The following sections outline risk factors that we identify and
track using our risk management software (SAP solutions for
GRC). They are presented below at a more aggregated level
as compared to their use in internal controlling, but are broken
down by the same risk categories we also use in our internal
risk management system reporting structure. All described
risks are applicable to diferent extent to all of our segments
(On-Premise Products, On-Premise Services, Cloud Applications,
and Ariba) unless otherwise noted.
SAP AG is the parent company of the SAP Group. Consequently,
the risks described below also apply directly or indirectly to
SAP AG.

127 Risk Report
Our international business activities expose us to numerous
and sometimes even conficting regulatory requirements,
and to risks that could harm our business, fnancial position,
proft, and cash fows.
We are a global company and currently market our products
and services in more than 180 countries and territories in the
Americas (including Latin America and North America), APJ,
and EMEA regions. Our business in these countries is subject
to numerous risks inherent in international business operations.
Among others, these risks include:
Confict and overlap among tax regimes
Possible tax constraints impeding business operations in
certain countries
Expenses associated with the localization of our products
and compliance with local regulatory requirements
Discriminatory or conficting fscal policies
Operational difculties in countries with a high corruption
perception index
Protectionist trade policies and regulations for import and
export
Works councils, labor unions, and immigration laws in
diferent countries
Data protection and privacy in regard to access by govern-
ment authorities to customer, partner, or employee data
Difculties enforcing intellectual property and contractual
rights in certain jurisdictions
Country-specifc software certifcation requirements
As we expand further into new countries and markets, these
risks could intensify. The compliance with applicable laws and
regulations to our business is sometimes unclear, subject to
change over time, and sometimes may confict between diferent
jurisdictions. Additionally these laws and governments
approach to enforcement, as well as our products and services,
are continuing to change and evolve. Compliance with these
types of regulation may involve signifcant costs or require
changes in products or business practices. Non-compliance
could result in penalties being imposed on us or orders that we
stop the alleged noncompliant activity. One or more of these
factors could have an adverse efect on our operations globally
or in one or more countries or regions, which could have an
adverse efect on our business, fnancial position, proft, and
cash fows.

Delays in purchases, decreased deal size, or cancelations
of proposed investments
Higher credit barriers for customers, reducing their ability
to fnance software purchases
Increased number of bankruptcies among customers,
business partners, and key suppliers
Increased default risk, which may lead to signifcant
impairment charges in the future
Market disruption from aggressive competitive behavior,
acquisitions, or business practices
Increased price competition and demand for cheaper
product and services
This could have an adverse efect on our business, fnancial
position, proft, and cash fows.
SAP has established measures and dedicated task forces to
address and mitigate the described risks and adverse efects to
the extent possible. We ofer our customers standard software
and product packages that are fast and easy to install, as
well as attractive fnancing models. Furthermore, we continue to
apply cost discipline internally and have a conservative fnancial
planning policy. Additionally, SAP is continuously reshaping our
organizational structure and processes to increase efciency.
We estimate the probability of occurrence of this risk to be
likely. Therefore, we cannot completely exclude the possibility
of it having a business-critical impact on our business, fnancial
position, proft, and cash fows. This could exacerbate the other
risks we describe in this report or cause a negative deviation
from our revenue and operating proft target. We classify this
risk as a high risk.

To protect our key IT infrastructure, critical business systems,
and processes from material adverse efects in crisis situations,
disaster recovery and business continuity plans have been
developed that include implementation of data redundancies
and daily data backup strategies. To verify and improve our
approach, our Global IT organization has been certifed to the
internationally recognized ISO 22301:2013 (Business Continuity
Management) standard. In addition, our corporate head-
quarters, which includes certain critical business functions, is
located in the German state of Baden-Wuerttemberg. This
area has historically been free of natural disasters.
We believe that the likelihood of this risk materializing is
remote; however, we cannot exclude the possibility of such a
risk occurring and having a business-critical impact on our
reputation, business, fnancial position, proft, and cash fows,
or causing a negative deviation from our revenue and operating
proft target. We classify this risk as a medium risk.

Market Risks
Our established customers might not buy additional
software solutions, renew maintenance agreements,
purchase additional professional services, or they might
switch to other products or service oferings (including
competitive products).
In 2013, we ofered a wide range of support services including
SAP MaxAttention, SAP Enterprise Support, and SAP Product
Support for Large Enterprises. We continue to depend materially
on the success of our support portfolio and on our ability to
deliver high-quality services. Traditionally, our large installed
customer base generates additional new software, maintenance,
consulting, and training revenue. Existing customers might
cancel or not renew their maintenance contracts, decide not to
We address these risks with various measures depending on
the circumstances, including, for example, a strong legal and
compliance ofce presence in the main countries, maintaining
an efective Data Protection and Privacy Ofce and associated
policy, receiving guidance from external economics consultants,
law frms, tax advisors, and authorities in the concerned
countries, and taking legal actions.
Although we estimate the probability of occurrence of this risk
to be unlikely, we cannot completely exclude the possibility
that this risk could have a major impact on our business,
fnancial position, proft, and cash fows, or cause a negative
deviation from our revenue and operating proft target. We
classify this risk as a medium risk.

Social and political instability caused by state-based
conficts, terrorist attacks, civil unrest, war, or international
hostilities, as well as pandemic disease outbreaks or natural
disasters, may disrupt SAPs business operations.
Terrorist attacks and other acts of violence or war, civil and
political unrest (such as in the Middle East and parts of Africa),
or natural disasters (such as hurricanes, fooding, or similar
events) could have a signifcant adverse efect on the related
economy or beyond. Such an event could lead, for example, to
the loss of a signifcant number of our employees, or to the
disruption or disablement of operations at our locations, and
could afect our ability to provide business services and
maintain efective business operations. Furthermore, this could
have a signifcant adverse efect on our partners as well as
our customers and their investment decisions, which could
have an adverse efect on our reputation, business, fnancial

Our mitigation measures have been designed and imple-
mented to minimize such adverse efects. To ensure continuous
operations of all critical business processes, we have been
implementing and operating a worldwide business continuity
management and crisis management system. To enable
efective response and minimize possible losses in case of crisis
situations, we have installed local crisis management teams
at our main locations, supplemented by regional crisis man-
agement teams for the Americas (including Latin America and
North America), APJ, and EMEA regions, and a global crisis
management team.
129 Risk Report
Other factors that could afect the market acceptance of cloud
solutions include:
Concerns with entrusting a third party to store and manage
critical employee or company confdential data
Customer concerns about security capabilities and reliability
Customer concerns about the ability to scale operations for
large enterprise customers
The level of confgurability or customizability of the software
Missing integration scenarios between on-premise products
and cloud-to-cloud solutions
If organizations do not perceive the benefts of cloud computing,
the market for cloud business might not develop further,
or it may develop more slowly than we expect, either of which
could have an adverse efect on our business, fnancial position,
proft, reputation and cash fows.
Among measures to communicate and demonstrate the value
and the benefts of our cloud solutions to the market, we
signifcantly invest in infrastructure and processes that ensure
secure operations of our cloud solutions including compliance
with all local legal regulations regarding data protection and
privacy as well as data security.

that this risk could have a business-critical impact on our
reputation, business, fnancial position, proft, and cash fows,
or cause a negative deviation from our revenue and operating
proft target. We classify the risk as a medium risk. This
risk factor relates only to the Cloud Applications and Ariba
segments.

buy additional products and services, switch to subscription
models, or accept alternative oferings from other vendors,
which could have an adverse efect on our maintenance
business, fnancial position, proft, and cash fows.

Working closely with SAP user groups, we continuously
monitor the performance and the perceived value of our
support and the satisfaction of our customers. We implement
mitigating steps where required.
We estimate the probability of this risk materializing to be
remote, but we cannot completely exclude the possibility that it
could have a business-critical impact on our business, fnancial
position, proft, and cash fows, or cause a negative deviation
from our revenue and operating proft target. Overall, we classify
this risk as medium risk. This risk factor relates only to our
On-Premise Product and On-Premise Services segments.

The success of our cloud computing strategy depends on
an increasing market adoption of the cloud solutions and
managed cloud services. Insufcient adoption of our
solutions and services could lead to a loss of SAPs position
as a leading cloud company.
The market for cloud computing is increasing and shows strong
growth relative to the market for our on-premise solutions. To
ofer a broad cloud service portfolio and generate the associ-
ated business value for our customers, we have acquired cloud
computing companies such as SuccessFactors and Ariba. Due
to ongoing contracts and previous substantial investments
to integrate traditional on-premise enterprise software into their
businesses, customers and partners might be reluctant or
unwilling to migrate to the cloud.
Business Strategy Risks
Demand for our new solutions may not develop as
planned and our strategy on new business models and
fexible consumption models may not be successful.
Our software business consists of new software licenses,
software license updates, and support and maintenance fees,
as well as of cloud software subscriptions. Our customers are
looking to take advantage of technological breakthroughs from
SAP without compromising their previous IT investments.
However, the introduction of new SAP solutions, technologies,
and business models are subject to uncertainties as to whether
customers will be able to realize the expected benefts.
Uncertainty may lead customers to wait for reference customers
frst, which might result in a lower level of adoption of our
new solutions, technologies, business models and fexible
consumption models, or no adoption at all. This could have an
cash fows.

To mitigate this risk, SAP is balancing the distribution of
its strategic investments by evolving and protecting its core
businesses and simultaneously developing new solutions,
technologies, and business models for markets, such as mobile,
cloud, database and technology, and social media. Furthermore,
we focus on the design and provision of attractive solution
ofers to our customers as well as the provision of support
excellence to ensure customer satisfaction with and after the
implementation of our solution.
Our market share and proft could decline due to increased
competition, market consolidation and technological
innovation, and new business models in the software industry.
The software industry continues to evolve rapidly and is
currently undergoing a signifcant shift due to innovations in
the areas of mobile, Big Data, cloud computing, and social
media. While smaller innovative companies tend to create new
markets continuously, large traditional IT vendors tend to
enter such markets mostly through acquisitions.
SAP faces increased competition in its business environment
from traditional as well as new competitors. This could result
in increased price pressure, cost increases, and loss of market
share, which could have an adverse efect on our business,
fnancial position, proft, and cash fows. Additionally customers
could change their buying behavior by accelerating their
acceptance of cloud solutions to reduce their investments.
Furthermore, the trend in the market to invest more in cloud
solutions might lead to a risk related to the potential loss of
existing on-premise customers. It may also have a temporary
adverse efect on our revenue due to conversions from
on-premise licenses to cloud subscriptions from existing SAP
customers in our installed base.

We believe we will be able to protect our leadership in the
market if we continue to execute successfully on our customer-
centric innovation strategy, which is driven by a mix of organic
growth, targeted acquisitions, and attractive cloud solution
oferings. To compete successfully in the market, we continuously
enhance our global processes and adjust our organizational
structures.
Although we estimate the probability of occurrence of this
risk to be unlikely, we cannot completely exclude the possibility
that this risk could have a moderate impact on our business,
classify this risk as a low risk.

131 Risk Report
Our customers renewal rates may decline or fuctuate as a
result of a number of factors, including their satisfaction or
dissatisfaction with our cloud product portfolio, our customer
support, concerns on efcient and secure cloud operations and
in compliance with legal and regulatory requirements, our pricing,
the prices of competing products or services, mergers and
acquisitions afecting our customer base, the efects of global
economic conditions, or reductions in our customers spending
levels. If our customers do not renew their subscriptions, renew
on less favorable terms, or fail to purchase additional modules
or users, our revenue and billings may decline, and we may
not realize signifcantly improved operating results from our
customer base. This could have an adverse efect on our
In order to continuously improve our services we closely monitor
any issue and work together with customers to perform a root
cause analysis and provide a solution. Furthermore, we are
adapting cloud service delivery to local and/or specifc market
requirements such as local or regional data centers.
to be remote, we cannot completely exclude the possibility that
this risk could have a major impact on our business, fnancial
from our revenue and operating proft target. We classify this
risk as a low risk. This risk factor relates only to our Cloud
Applications and Ariba segments.
If we are unable to scale and enhance an efective
partner ecosystem, increased revenue already included in
our forecast might be endangered.
An open and vibrant partner ecosystem is a fundamental
pillar of our success and growth strategy. We have entered into
partnership agreements that drive co-innovation on our
platforms, proftably expand all our routes-to-market to optimize
market coverage, and provide high-quality services capacity in
all market segments. Partners play a key role in driving market
adoption of our entire solutions portfolio, by co-innovating on
our platforms, embedding our technology, and reselling and/or
implementing our software.
remote, but cannot completely exclude the possibility that
this risk could have a major impact on our business, fnancial
from our revenue and operating proft target. We classify
this risk as a low risk.

Our Cloud organization recognizes subscription and support
revenue from our customers over the term of their agreements,
and our business depends substantially on customers
renewing their agreements and purchasing additional
modules or user licenses from SAP as a cloud provider.
Also, any downturns or upturns in cloud sales may not be
immediately refected in our operating results, and any
decline in our customer renewals would harm the future
operating results of the cloud business.
We recognize cloud subscription and support revenue over the
duration of our cloud business customer agreements, which
typically range from one to three years with some up to fve
years. As a result, most of the respective revenue recognized
in a given period originates from agreements entered into in
earlier periods. Consequently, a shortfall in demand for our
cloud portfolio in any period may not signifcantly impact our
cloud subscription and support revenue for that quarter, but
could have an adverse efect on targeted cloud subscription
and support revenue in future periods.
To maintain or improve our operating results in the cloud
business, it is important that our customers renew their
agreements with us when the initial contract term expires and
purchase additional modules or additional users. Our customers
have no obligation to renew their subscriptions after the initial
subscription period, and we cannot assure that customers
will renew subscriptions at the same or at a higher level of
service, or at all.
Although we consider this risk to be unlikely in view of our
partner strategy, we cannot exclude the possibility that this risk
could have a major impact on our reputation, business,
deviation from our revenue and operating proft target if it
were to materialize. We classify this risk as a medium risk.

Human Capital Risks
If we do not efectively manage our geographically
dispersed workforce, we may not be able to run our
business efciently and successfully.
Our success is dependent on appropriate alignment of our
internal and external workforce planning processes and our
location strategy with our general strategy. It is critical that we
manage our internationally dispersed workforce efectively,
taking short and long-term workforce and skill requirements
into consideration. This applies to the management of our
internal as well as our external workforce. Changes in headcount
and infrastructure needs could result in a mismatch between
our expenses and revenue. Failure to manage our geographically
dispersed workforce efectively could hinder our ability to run
our business efciently and successfully and could have an
cash fows.

If partners consider our products less strategic and/or
fnancially less attractive or if SAP fails to establish a network
of qualifed partners that meet our quality requirements and
the requirements of our customers, then, among other things,
partners might not:
Develop a sufcient number of new solutions and content on
our platforms
Provide high-quality products and services to our customers
Drive growth of references by creating customer use cases
and demo systems
Sufciently embed our solutions to proftably drive product
adoption, especially with new innovations like SAP HANA
Enable and train sufcient resources to promote sell and
support to scale into targeted markets
Comply with applicable laws and regulations, resulting in
delayed, disrupted, or terminated sales and services
Renew their existing agreements with us or enter into new
agreements on terms acceptable to us or at all.
If one or more of these risks materialize, this may have an
adverse efect on the demand for our products and services.
As a result we may not be able to scale our business to compete
successfully with other software vendors, which could have
an adverse efect on our reputation, business, fnancial position,
SAP continues to invest in long-term, mutually benefcial
relationships and agreements with partners. We continue to
develop and enhance a wide range of partner programs to
retain existing and attract new partners of all types. We ofer
training opportunities to a wide range of resources for
our partners. A thorough certifcation process for third-party
solutions has been designed and established to ensure
consistent high-quality and seamless integration.
133 Risk Report
we continue to introduce new and innovative technology oferings
and expand our business in emerging markets. Missing or
inadequately executed beneft and compensation programs
could limit SAPs ability to attract or retain qualifed employees
and lead to fnancial losses. In addition, we might not be able
to achieve our internal gender diversity objectives to increase
the number of women in management from 18% in 2010 to
25% by 2017. Finally, hiring such personnel could expose us to
claims by other companies seeking to prevent their employees
from working for a competitor.

These risks notwithstanding, we continue to believe our leading
market position, employer brand, and extended beneft pro-
grams will enable us to hire top talent internationally with the
potential to contribute to SAPs growing business success in
the future. We address the risk of an adverse efect on our
business operations from a failure to recruit the employees we
need or from the loss of leaders and employees by seeking to
build employee and leadership strengths through a range of
targeted professional development, mentoring, and coaching
programs, a gender diversity program, and a special focus on
accelerated high-potential employee development that aims
to develop talent as well as leadership talent, in particular. A
strong focus on succession planning for leadership and key
positions seeks for sustainable leadership and to safeguard the
business from disruption caused by staf turnover.
Although the risks related to failure to attract, develop, and
retain talent could materialize, we believe that this is unlikely
and that the impact on our reputation, business, fnancial
position, proft, and cash fows, or potential negative deviation
from our revenue and operating proft target would be
moderate. We classify this risk as a low risk.

We are focusing on mitigating this risk through a range of
activities including succession management; workforce planning
(which aims to achieve diversity and the right mix of talent
and to take account of demographic changes); outsourcing;
external short-term stafng; employer branding; career
management (such as ofering opportunities for short-term
assignments and opportunities to improve skills, competencies,
and qualifcations); and extended beneft programs for
example, a performance-oriented remuneration system, an
employer-fnanced pension plan in certain countries, and
long-term incentive plans.
We estimate this risk to be a remote possibility, but we cannot
underestimate its potential to have a major impact on our
business, fnancial position, proft, and cash fows, or cause
a negative deviation from our revenue and operating proft
target. We classify this risk as a low risk.
If we are unable to attract, develop, and retain leaders and
employees with specialized knowledge and technology
skills, or are unable to achieve internal diversity and
inclusion objectives, we might not be able to manage our
operations efectively and successfully, or develop
successful new solutions and services.
Our highly qualifed workforce is the foundation for our continued
success. Competition in our industry for highly skilled and
specialized personnel and leaders, both male and female, is
intense. In certain regions and specifc technology and solution
areas, we have set ambitious growth targets, specifcally in
countries such as Brazil, China, and Russia. If we are unable to
identify, attract, develop, motivate, adequately compensate,
and retain well-qualifed personnel, both male and female, or if
existing highly skilled and specialized personnel leave SAP and
ready successors or adequate replacements are not available,
we may not be able to manage our operations efectively, which
could have an adverse efect on our reputation and our business,
fnancial position, proft, and cash fows. Furthermore, we may
not be able to develop, sell, or implement successful new
solutions and services as planned. This is particularly true as
tasked with managing our policy-related compliance measures.
Our chief compliance ofcer coordinates policy implementation,
training, and enforcement eforts throughout SAP. Those
eforts are monitored and tracked to allow trending and risk
analysis and to ensure consistent policy application throughout
the Group. Despite our comprehensive compliance programs
and established internal controls, intentional eforts of individuals
to circumvent controls or engage in fraud for personal gains
cannot always be prevented.
Although we estimate the likelihood of this risk to be remote,
we cannot completely exclude the possibility that this risk
could have a major impact on our reputation, business,

Non-compliance with applicable data protection and privacy
laws or failure to adequately meet the requirements of
SAPs customers with respect to our products and services
could lead to civil liabilities and fnes, as well as loss of
customers and damage to SAPs reputation.
As a global software and service provider, SAP is required to
comply with the laws in the locations where SAP does business.
SAP and its subsidiaries are facing a surge of data protection
and privacy laws and regulations around the world, with further
changes to be expected in the future, for example, by the
European Data Protection Regulation proposed by the European
Commission. These laws and regulations amend and supplement
existing requirements regarding the processing of personal data
that SAP and SAP customers must fulfll and which we
must consequently address with our products and services.
Organizational and Governance-Related Risks
Laws and regulatory requirements in Germany, the United
States, and elsewhere have become much more stringent.
As a stock corporation domiciled in Germany with securities
listed in Germany and the United States, we are subject
to German, U.S., and other governance-related regulatory
requirements. Changes in laws and regulations and related
interpretations, including changes in accounting standards and
taxation requirements and increased enforcement actions
and penalties may alter the business environment in which we
operate. Regulatory requirements have become signifcantly
more stringent in recent years, and some legislation, such
as the anticorruption legislation in Germany, the U.S. Foreign
Corrupt Practices Act, the UK Bribery Act, and other local
laws prohibiting corrupt payments by employees, vendors,
distributors, or agents, is being applied more rigorously.
Emerging markets are a signifcant focus of our international
growth strategy. The nature of these markets presents a
number of inherent risks. A failure by us to comply with
applicable laws and regulations, or any related allegations of
wrongdoing against us, whether merited or not, could have
an adverse efect on our business, fnancial position, proft,
cash fows and reputation.

It is difcult to assess the precise potential risk, because there
is a wide variety of complex legal and regulatory requirements
that apply, and therefore an equally wide variety of potential
non-compliance scenarios exist.
However, we continuously monitor new regulatory requirements,
updated or new enforcement trends, and publicly available
information on compliance issues in the computer software
industry, the emerging markets where we invest our resources,
and in the business environment in general. Based on this
information and any other available sources, we continuously
update and refresh our compliance programs to achieve
the most efective approach possible and to ensure that our
employees understand and comply with the SAP Code of
Business Conduct. This process is coordinated by our Global
Compliance Ofce, a team of dedicated resources that are
135 Risk Report
Failure to respond to meet customer, partner, or other
stakeholder expectations or generally accepted standards
on climate change, energy constraints, and our social
investment strategy could negatively impact SAPs business,
results of operations, and reputation.

Energy and emissions management are an integral component
of our holistic management of social, environmental, and
economic risks and opportunities. We have identifed risks in
these major areas:
Our solutions and green IT
Our own operations energy management and other
environmental issues such as carbon management, water
use, and waste
Because our customers, employees, and investors expect a
reliable energy and carbon strategy, we have reemphasized our
previously communicated targets, especially our 2020 target
for greenhouse gas emissions. In addition, our customers
might no longer recognize SAP for its environmental leadership
and might buy other vendors products and services. Consequently,
we could fail to achieve our revenue target. If we do not meet
stakeholder expectations in the areas identifed, our rating in
sustainable investment indices might decrease, which could

In recent years, SAP has shown that it is possible to take a
proactive position on social and environmental issues while
delivering robust fnancial growth. As a result, we received
great recognition for our sustainability eforts. As a proof point
for SAPs sustainability performance, we continue to be listed
in the most prominent and recognized sustainability indices,
such as the Dow Jones Sustainability Indexes and the
Sustainability Leadership Report by Brandlogic. As we did not
meet our greenhouse gas emissions target of 460 kilotons
for 2013, we might fail to meet expectations regarding our
energy and emission performance.
Failure to comply with applicable laws or to adequately address
privacy concerns of customers, even if unfounded, could lead
to investigations by supervisory authorities, civil liability, fnes,
(in the future, potentially calculated based on the Companys
annual turnover), loss of customers, damage to our reputation,
and could have an adverse efect on our business, fnancial
To mitigate these risks, SAP actively monitors changes to laws
and regulations so we can take adequate measures and certify
our existing standards and policies on an ongoing basis. We
have implemented a wide range of measures to protect data
controlled by SAP and our customers from unauthorized access
and processing, as well as from accidental loss or destruction.
We have implemented a certifed Data Protection Management
System in data protection critical areas including support, HR,
global services, marketing, application innovation, and custom
development, whereby implementation is audited internally
and externally by the British Standard Institutions on an annual
basis. Furthermore, customers are provided with security
certifcations (such as ISO 27001), security white papers, and
reports from our independent auditors and certifcation bodies.
We estimate this risk to be unlikely, but cannot rule out the
possibility of it having a business-critical impact on our business,
fnancial position, proft, and cash fows, causing damage
to our reputation, or causing a negative deviation from our
revenue and operating proft target. We classify this risk as a
medium risk.

to every employee. It provides legal compliance guidance on
how to avoid unethical behavior and solve dilemma situations.
On a yearly basis, the SAP Code of Business Conduct is
re-confrmed by SAPs workforce (except where disallowed by
local legal regulations). We also rolled out and enforce various
additional compliance policies aimed at managing third parties
and preventing misuse of third-party payments for illegal purposes;
ensuring controls around travel, entertainment, gift, and
expense policies; and pushing out a commitment to business
with integrity through our partner and vendor ecosystems.
These eforts are fanked by continuous education including
e-learning and classroom training to target audiences as
identifed by compliance risk assessment. The overall CMS
approach by SAP is continuously monitored internally and
externally, and adapted accordingly, if needed.
Although we estimate the probability of occurrence of intentional
or negligent major unethical conduct to be remote, we cannot
exclude the possibility that this risk could materialize. In that
event, this risk could have a major impact on our reputation,
business, fnancial position, proft, and cash fows and could
cause a negative deviation from our operating proft target. We

Communication and Information Risks
Our controls and eforts to prevent the unauthorized
disclosure of confdential information might not always be
efective.
Confdential or strictly confdential information that is related
to topics such as our strategy, new technologies, mergers and
acquisitions, unpublished fnancial results, or personal data,
could be prematurely or inadvertently disclosed. This could
require us to notify multiple regulatory agencies and, where
However, we believe that the risk of failing to meet expectations
regarding our energy and emission strategy is unlikely to occur
and that if the risk were to occur, it would only have a moderate
impact on our reputation, business, fnancial position, proft,
and cash fows, as well as on the achievement of our revenue
and operating proft target. We classify this risk as a low risk.

Unethical behavior and non-compliance with our integrity
standards due to intentional and fraudulent behavior
of employees could harm our business, fnancial position,
proft, and reputation.
SAP's leadership position in the global market is founded on
the long-term and sustainable trust of our stakeholders
worldwide. Our heritage is one of corporate transparency, open
communication with fnancial markets, and adherence to
recognized standards of business integrity. The SAP Code of
Business Conduct, adopted by the Executive Board on January
29, 2003, put into words the already existing guidelines and
expectations for the business behavior practiced at SAP.
However, we may encounter unethical behavior and non-
compliance with our integrity standards due to intentional and
fraudulent behavior of individual employees, possibly in collusion
with external third parties. In addition to intentional behavior,
problems could also arise due to negligence in the adherence
to rules and regulations. Unethical behavior and misconduct
attributable to SAP could not only lead to criminal charges, fnes
and claims by injured parties, but also to fnancial loss, and
severe reputational damage. This could have an adverse efect
on our business, fnancial position, proft, and cash fows.

To help prevent this, we instituted a comprehensive compliance
management system (CMS), which is based on the three pillars
of prevention, detection, and reaction. Our CMS program
comprises several educational, counseling, control, and investi-
gative instruments. The objective is to minimize and mitigate
the risk of unethical behavior, whether intentional or negligent.
The SAP Code of Business Conduct is mandatory and applies
137 Risk Report
The timing of the introduction of new products or product
enhancements by SAP or our competitors
Changes in customer budgets
Decreased software sales that could have an adverse efect
on related maintenance and services revenue
The timing, size, and length of a customers services projects
Deployment models that require the recognition of revenue
over an extended period of time
Seasonality of a customers technology purchases
Limited visibility into the ability of acquired companies to
accurately predict their sales pipelines and the likelihood that
the projected pipeline will convert favorably into sales
Other general economic, social, environmental, and market
conditions, such as the global economic crisis and the
current difculties for countries with large debt
Since many of our customers make their IT purchasing
decisions near the end of calendar quarters, and with a
signifcant percentage of those decisions being made during
our fourth quarter, even a small delay in purchasing decisions
for our on-premise software could have an adverse efect
on our revenue results for a given year. Our dependence on
large transactions has decreased in recent years with a trend
towards an increased number of transactions coupled with a
decrease in deal size. However, the loss or delay of one or a few
large opportunities, which are still characteristic of the
large enterprise segment, could have an adverse efect on our

We use a pipeline system to forecast sales and trends in our
business. Pipeline analysis informs and guides our business
planning, budgeting, and forecasting, but pipeline estimates do
not necessarily consistently correlate to revenue in a particular
quarter, potentially due to one or more of the reasons outlined
above. The reliability of our plans, budgets, and forecasts may
therefore be compromised. Because our operating expenses
are based upon anticipated revenue levels and a high percent-
age of our expenses are relatively fxed in the near term, any
appropriate, the data owner, which could result in a loss of
reputation for SAP. For example, leaked information during a
merger or acquisition deal could cause the loss of our deal
target, or our share price could decline in case of prematurely
published fnancial results. This could have an adverse efect
on our market position and lead to fnes and penalties. In
addition, this could have an adverse efect on our business,
fnancial position, proft, and cash fows.

We take a wide range of actions to prevent classifed confdential
information from unauthorized disclosure, including procedural
and organizational measures. These measures include mandatory
security awareness training for all employees, standards
for safe internal and external communication, and technical
security features in our IT hardware and communication
channels, such as mandatory encryption of sensitive data.
Although we estimate the likelihood of occurrence of this risk
to be remote, we cannot completely exclude the possibility that
this risk could have a business-critical impact on our reputation,
business, fnancial position, proft, and cash fows, or cause a
negative deviation from our operating proft target. We classify
this risk as a medium risk.

Financial Risks
Our sales are subject to quarterly fuctuations and our sales
forecasts may not be accurate.
Our revenue and operating results can vary and have varied in
the past, sometimes substantially, from quarter to quarter.
Our revenue in general, and in particular our software revenue,
is difcult to forecast for a number of reasons, including:
The relatively long sales cycles for our products
The large size, complexity, and extended timing of individual
license transactions
The introduction of new licensing and deployment models
such as cloud subscription models
SAPs investment policy with regard to total group liquidity is
set out in our internal treasury guideline document, which is a
collection of uniform rules that apply globally to all companies
in the Group. Among its stipulations, it requires that with limited
exceptions we invest only in assets and funds rated BBB fat
or better. The weighted average rating of the investments of
our total group liquidity is in the range A to A. We continue to
pursue a policy of cautious investment characterized by wide
portfolio diversifcation with a variety of counter parties,
predominantly short-term investments, and standard invest-
ment instruments.

to be remote, there can be no assurance that the prescribed
measures will be successful or that uncertainty in global
economic conditions could not have a business-critical impact
on our business, fnancial position, proft, cash fows or
operating proft target. We classify this risk as a medium risk.
Managements use of estimates could negatively afect our
To comply with IFRS, management is required to make many
judgments, estimates, and assumptions that afect the
reported fnancial fgures. The facts and circumstances as well
as assumptions on which management bases these estimates
and judgments, and managements judgment regarding the
facts and circumstances may change from time to time and
this could result in signifcant changes in the estimates and
judgments and consequently in the reported fnancials. Such
changes could have an adverse efect on our business, fnancial
position, proft and cash fows.
We have a number of control procedures in place to make sure
that our estimates and judgments are appropriate. For example,
we apply two-person verifcation to signifcant estimating.
shortfall in anticipated revenue or delay in revenue recognition
could result in signifcant variations in our operating results
from quarter to quarter or year to year. Continued deterioration
in global economic conditions would make it increasingly
difcult for us to accurately forecast demand for our products
and services, and could cause our revenue, operating results,
and cash fows to fall short of our expectations and public
forecasts. This could have an adverse efect on our stock price.
To the extent any future expenditure fails to generate the
anticipated increase in revenue, our quarterly or annual operating
results may be subject to an adverse efect and may vary
signifcantly compared to preceding or subsequent periods.
Although we estimate the probability of occurrence of this
risk to be unlikely, we cannot completely exclude the possibility
that this risk could have a moderate impact on our business,

External factors could impact our liquidity and increase
the default risk associated with, and the valuation of, our
fnancial assets.
Macroeconomic factors such as an economic downturn could
have an adverse efect on our future liquidity. We use a globally
centralized fnancial management to control fnancial risk,
such as liquidity, exchange rate, interest rate, counterparty, and
equity price risks. The primary aim is to maintain liquidity in
the Group at a level that is adequate to meet our obligations at
any time. Our total group liquidity was 2,841 million on
December 31, 2013. This position is supported by our strong
operating cash fows, of which a large part is recurring, and
by credit facilities on which we can draw if necessary. However,
adverse macroeconomic factors could increase the default
risk associated with our total group liquidity. This could have
an impact on the valuation of our fnancial assets, which could
have an adverse efect on our business, fnancial position,
139 Risk Report
a positive efect. Variable interest balance-sheet items are also
subject to changes in interest rates. Such changes may have an
adverse efect on our business, fnancial position, proft and
cash fows or cause an adverse deviation from our revenue and
operating proft target.
For more information about our currency and interest rate
risks and our related hedging activity, see the Notes to
the Consolidated Financial Statements section, Notes (24)
and (25).

We continuously monitor our exposure to currency fuctuation
risks based on balance-sheet items and expected cash fows,
and pursue a Group-wide foreign exchange risk management
strategy using, for example, derivative fnancial instruments
as appropriate. With regard to our fnancial debt, we have a
very balanced maturity profle and mixture of fxed and foating
interest rate arrangements in place.
We believe that the likelihood of this risk of signifcant currency
and interest rate fuctuations materializing is remote and that
if the risk were to occur, its impact on our business, fnancial
position, proft, and cash fows could be major, or cause a
negative deviation from our revenue and operating proft target.
We classify this risk as a low risk.
For more information about risks arising from fnancial
instruments, including our currency and interest-rate risks and
our related hedging activity, see the Notes to the Consolidated
Financial Statements section, Notes (24) to (25).

The cost of using derivative instruments to hedge share-
based payments may exceed the benefts of hedging them.
We use derivative instruments to reduce the impact of our
share-based payments on our income statement and to limit
future expense associated with those plans. We decide
case- by-case whether and to what extent we should hedge this
risk. The expense of hedging the share-based payments could
exceed the beneft achieved by hedging them. On the other
hand, a decision to leave the plans materially unhedged could
Although we estimate the probability of occurrence of the risk
to be unlikely, we cannot completely exclude the possibility of
a major impact on our business, fnancial position, proft, and
cash fows, or a negative deviation from our revenue and
Current and future accounting pronouncements and other
fnancial reporting standards, especially but not only
concerning revenue recognition, may negatively impact the
fnancial results we present.
We regularly monitor our compliance with applicable fnancial
reporting standards and review new pronouncements and
drafts thereof that are relevant to us. As a result of new standards,
changes to existing standards, and changes in their
interpretation, we might be required to change our accounting
policies, particularly concerning revenue recognition, to alter
our operational policies so that they refect new or amended
fnancial reporting standards, or to restate our published fnancial
statements. Such changes may have an adverse efect on our
reputation, business, fnancial position, and proft, or cause an
adverse deviation from our revenue and operating proft target.

Although we estimate the probability of occurrence of the risk
to be unlikely, we cannot completely exclude the possibility of a
major impact. We classify this risk as a medium risk.

Because we conduct operations throughout the world,
our business, fnancial position, proft, and cash fows may
be afected by currency and interest rate fuctuations.
Our Group-wide management reporting and our external
fnancial reporting are both in euros. Nevertheless, a signifcant
portion of our business is conducted in currencies other
than the euro. Approximately 71% of our revenue in 2013 was
attributable to operations outside the euro area and was
translated into euros. Consequently, period-over-period changes
in the euro rates for particular currencies can signifcantly
afect our reported revenue and income. In general, appreciation
of the euro relative to another currency has an adverse efect
while depreciation of the euro relative to another currency has
projects could result in claims from customers, harm SAPs
reputation, and could have an adverse efect on our business,

Our customers continue to follow project approaches to
optimize their IT solutions in a non-disruptive manner. Our
projects also include risk management processes that are
integrated into SAP project management methods intended to
safeguard implementations with coordinated risk and quality
management programs. In our opinion, we make adequate
fnancial planning provisions for the remaining individual risks.
unlikely, but we cannot completely exclude the possibility that
this risk could have a major negative impact on our reputation,
business, fnancial position, proft, and cash fows, or cause
a negative deviation from our revenue and operating proft
target. We classify this risk as a medium risk. This risk factor
relates only to our On-Premise Services, Ariba, and Cloud
Applications segments.

Product and Technology Risks
There is a risk that undetected security vulnerabilities
shipped and deployed within our software products might
cause damage to SAP and our customers.
Customer systems or systems operated by SAP itself to provide
services could potentially be compromised by vulnerabilities
if they are exploited by hackers. This could lead to theft,
destruction, or abuse of data, or systems could be rendered
unusable (such as denial of service attack). The detection of
security vulnerabilities in our software, our customers systems,
or SAP systems used in the provision of services, especially
in case of exploitation, could prevent us from meeting our
contractual obligations and subsequently might lead to customer
claims and reputational damage, which might have an adverse
efect on our business, fnancial position, proft, and cash fows.

prove disadvantageous. This could have an adverse efect
on our business, fnancial position, proft and cash fows or
cause an adverse deviation from our revenue and operating
proft target.

We believe that the likelihood of this risk materializing is remote
and that if the risk were to occur, its potential impact on our
business, fnancial position, proft, cash fows, and operating
proft target would be minor. We classify this risk as a low risk.

Project Risks
Implementation of SAP software often involves a signifcant
commitment of resources by our customers and is subject
to a number of signifcant risks over which we often have no
control.
A core element of our business is the successful implementation
of software solutions to enable our customers to make their
business a best-run business. The implementation of SAP
software is led by SAP, by partners, by customers, or by a
combination thereof. Depending on various factors, such as the
complexity of solutions, the customers implementation and
integration needs or the resources required, SAP faces a
number of diferent risks. For example, functional requirement
changes, delays in timeline, or deviation from recommended
best practices may occur during the course of a project. These
scenarios have a direct impact on the project resource model
and on securing adequate internal personnel or consultants in
a timely manner and could therefore prove challenging.
As a result of these and other risks, SAP and/or some of our
customers have incurred signifcant implementation costs in
connection with the purchase and installation of SAP software
products. Some customers implementations have taken
longer than planned. We cannot guarantee that we can reduce
or eliminate protracted installation or signifcant third-party
consulting costs, that trained consultants will be readily available,
that our costs will not exceed the fees agreed in fxed-price
contracts, or that customers will be satisfed with the
implementation of our software and solutions. Unsuccessful,
lengthy, or costly customer implementation and integration
141 Risk Report
Undetected defects in the introduction of new products and
product enhancements could increase our costs, and reduce
customer demand.
To achieve market acceptance and high customer satisfaction,
our new products and product enhancements often require
long development and testing periods. Development work and
market introduction are subject to risks. For example, products
might not completely meet our stringent high-quality standards,
including security standards, might not fulfll market needs or
customer expectations, or might not comply with local standards
and requirements. Furthermore, this risk also exists with respect
to acquired companies technologies and products where we
might not be able to manage these as quickly and successfully
as expected. Therefore, market launches, entering new markets,
or the introduction of new innovations could be delayed or not
be successful.
Also, new products could contain undetected defects or they
might not be mature enough from the customers point of view
for business-critical solutions. The detection and correction
of any defects after shipment could be expensive and time
consuming and we might not be able to meet the expectations
of customers regarding time and quality in the defect resolution
process. In some circumstances, we might not be in a position
to rectify such defects or entirely meet the expectations of
customers, specifcally as we are expanding our product
portfolio into additional markets. As a result, we might be faced
with customer claims for cash refunds, damages, replacement
software, or other concessions. The risk of defects and their
adverse consequences could increase as we seek to introduce
a variety of new software products simultaneously at a higher
innovation rate. Signifcant undetected defects or delays
in introducing new products or product enhancements could
afect market acceptance of SAP software products and
could have an adverse efect on our reputation, business,
SAP has implemented a software security development lifecycle
as a mandatory integral part of our software development
process. We systematically use methods to develop secure
software in all development phases starting early in the design
phase. This includes industry best practices such as automated
security source code scans, mandatory security training for
all developers, and solid testing and validation of our products,
patches, and services before shipment.
SAP has a software security response process in place to
rapidly react to detected vulnerabilities and provide fxes.
We have also improved the roll-out procedures for security-
relevant notes, patches, and service packs to ensure easy
and fast consumption on the customer side.
We cannot completely exclude the possibility of a negative
impact on our customers or our own operations globally or in
one or more countries or regions. We estimate the probability
of occurrence of the risk of severe customer and SAP damages
to be unlikely. If such an occurrence happens, it could have a
business-critical impact on our reputation, business, fnancial
position, proft, and cash fows as well as on the achievement
of our revenue and operating proft target. We classify this risk
as a medium risk.

We believe that the likelihood that this risk will materialize is
remote but we cannot completely exclude the possibility that
this risk, if it were to occur, could have a business-critical impact
on our reputation, business, fnancial position, proft, and
cash fows, or cause a negative deviation from our revenue and

Changes in our rights to use software and technologies we
license from third parties, which are an integral part of
SAPs products, could slow down time to market and infuence
our license pricing and therefore the competitiveness with
other software vendors. Furthermore, it could diminish
our softwares functional capabilities and therefore could
jeopardize the stability of our solution portfolio ofering.
The numerous third-party technologies we have licensed and
certain open source software components we use have
become an integral part of our product portfolio. We depend on
those technologies for the functionality of our software or
cloud services. Changes to, or the loss of, third-party licenses
as well as open source licenses being construed could
signifcantly increase the cost of these licenses and signifcantly
reduce software functionality and/or usability of SAPs
software products. As a result, we might incur additional
development or license costs to ensure the continued
functionality of our products, which could have an adverse
efect on our business, fnancial position, proft, and cash fows.
This risk increases with each acquisition of a company or a
companys intellectual property assets that had been subject
to third-party technology licensing, open source software,
and product standards less rigorous than our own.

We strive to execute appropriate due diligence and contract
management processes and to continuously monitor
development projects through our product implementation
lifecycle process.
The use of existing SAP software products by customers
in business-critical solutions and processes and the relative
complexity and technical interdependency of our software
products create a risk that customers or third parties may
pursue warranty, performance, or other claims against us for
actual or alleged defects in SAP software products, in our
provision of services, or in our application hosting services. We
have in the past been, and may in the future be, subject to
warranty, performance, or other similar claims.
Although our contracts generally contain provisions designed
to limit our exposure due to actual or alleged defects in SAP
software products or in our provision of services, these provisions
may not cover every eventuality or be efective under the
applicable law. Regardless of its merits, any claim could entail
substantial expense and require the devotion of signifcant
time and attention by key management personnel. Publicity
surrounding such claims could afect our reputation and the
demand for our software.

We counter these risks using a broad range of techniques,
including project management, project monitoring, product
standards and governance, rigid and regular quality assurance
measures certifed to ISO 9001:2008, and program risk
assessments during product development as well as market
introduction phases. In addition, direct customer feedback is
considered in the market release decision process. Delivering
high-quality software products is a priority and part of our core
business. Our strong investment and permanent eforts lead
to a generally high level of quality of our products, which is
made transparent in the defned quality perception and support
index and confrmed by our constantly high customer
satisfaction ratings as measured by customer quality perception
reporting.
143 Risk Report
We will continue to align our organization, processes, products,
delivery model, and services to changing markets and customer
and partner demands. We invent new technology or adopt
the latest technology if there is a clear business opportunity for
SAP and if it provides value to our customers. To ensure
that we remain competitive in the future, we still conduct wide-
ranging market and technology analyses and research projects,
often in close cooperation with our customers and partners.
We strive for strategic acquisitions with the potential to drive
innovation and contribute to achieving our growth target.
We believe that the likelihood of this risk materializing is remote;
however, we cannot exclude the business-critical impact this
risk would have on our reputation, business, fnancial position,
proft, and cash fows, or the potential negative deviation from
our revenue and operating proft target if it were to materialize.
We classify this risk as a medium risk.

Our technology and/or product strategy may not be
successful or our customers and partners might not adopt
our technology platforms and other innovations accordingly.
We ofer customers a broad portfolio of products, solutions,
and services. Our technology strategy centers on SAP HANA
as the real-time in-memory computing platform for analytics
and applications. The success of our technology strategy
depends on the convergence of SAP HANA with our mobile,
cloud, and SAP NetWeaver technology platform. It also
depends on the delivery of SAP solutions based on the SAP
HANA platform as well as the success of our new framework
to meet changing customer expectations regarding end-to-end
user experience. Our technology strategy also relies on our
ability to maintain a dynamic network of partner organizations
developing their own business applications using our technology
platforms.
We believe that the probability of occurrence of this risk is likely
and we cannot exclude the possibility of a major impact on
our business, fnancial position, proft, and cash fows, or the
possibility of a negative deviation from our revenue and

If we are unable to keep up with rapid technological
innovations, new business models, and changing market
expectations, we might not be able to compete efectively.
Our future success depends upon our ability to keep pace
with technological and process innovations and new business
models, as well as our ability to develop new products and
services, enhance and expand our existing products and services
portfolio, and integrate products and services we obtain
through acquisitions. To be successful, we are required to shift
our products and our go-to-market approach to a cloud-
based delivery model to satisfy changing customer demand.
We might not be successful in bringing new solutions,
solution enhancements, and/or services to market before our
competitors. We may also face increasing competition from
open source software initiatives in which competitors may
provide software and intellectual property free and/or under
terms and conditions unfavorable for SAP. In addition, we
might not be able to generate enough revenue to ofset the
signifcant research and development costs we incur to deliver
technological innovations. Moreover, we might not anticipate
and develop technological improvements or succeed in
adapting our products and processes to technological change,
changing regulatory requirements, emerging industry
standards, and changing requirements of our customers and
partners. Finally, we might not succeed in producing high-
quality products, enhancements, and releases in a timely and
cost-efective manner to compete with products, solutions,
and other technologies ofered by our competitors, which could

Our cloud oferings might be subject to a security attack,
become unavailable, or fail to perform properly.
The software used in our cloud portfolio is inherently complex
and any defects in product functionality, system stability, or
data center operations that cause interruptions in the availability
of our application suite could result in the following:
Lost or delayed market acceptance and sales
Breach of warranty or other contract breach or
misrepresentation claims
Sales credits or refunds to our customers or partners
Loss of customers and/or partners
Diversion of development and customer service resources
Breach of data protection and privacy laws and regulations
Customers considering competitive cloud oferings
The costs incurred in correcting any defects or errors might
be substantial and could have an adverse efect on our
reputation, business, fnancial position, proft, and cash fows.
Because of the large amount of data that we collect and
manage, it is possible that hardware failures, defects in our
software, or errors in our systems could result in data loss or
corruption, or cause the information that we collect to be
incomplete or contain inaccuracies that our customers regard
as signifcant. Furthermore, the availability of our application
suite could be interrupted by a number of factors, including
customers inability to access the Internet, the failure of our
network or software systems due to human or other error, and
security breaches, or variability in user trafc for our application
suite. Additionally, any loss of the right to use hardware
purchased or leased from third parties could result in delays in
our ability to provide our application suite until equivalent
technology is either developed by us or, if available, identifed.
We have administrative, technical, and physical security
measures in place as well as contracts that require third-party
data centers to have appropriate security and data protection
and privacy measures in place. In this context, customers
might demand to only use specifc and/or local data centers.
However, if these security measures are breached as a result of
third-party action, employee error and malfeasance, or
otherwise, and if as a result someone obtains unauthorized
We might not be successful in integrating our platforms,
enabling the complete product portfolio, harmonizing our
user interface design and technology, or bringing new solutions
based on the SAP HANA platform to the market as fast as
expected. In addition, we may not be able to compete efectively
in the area of managed cloud services. As a result, our partner
organizations and customers might not adopt the SAP HANA
platform and our managed cloud services quickly enough or
they might consider competitive solutions. As a result,
this could have an adverse efect on our reputation, business,

We believe that we will be able to deliver additional business
value with minimum disruption to our customers if we
can successfully drive the integration and convergence of our
technology platform oferings, enable our current product
portfolio for SAP HANA, develop new solutions based on SAP
HANA, and ofer comprehensive cloud-based services. We
enable and encourage partners to leverage SAP technology by
providing guidance about business opportunities, architecture,
and technology, as well as a comprehensive certifcation
program designed to ensure that third-party solutions are of
consistently high quality.
and that if this risk were to occur, its impact on our reputation,
business, fnancial position, proft, cash fows, and revenue and
operating proft target would be business-critical. We classify

145 Risk Report
increased use of third-party code including open source code,
as we expand into new industry segments with our products,
resulting in greater overlap in the functional scope of products,
and as non-practicing entities that do not design, manufacture,
or distribute products increasingly assert intellectual property
infringement claims.
Any claims, with or without merit, and negotiations or litigation
relating to such claims, could preclude us from utilizing certain
technologies in our products, be time-consuming, result in
costly litigation, and require us to pay damages to third parties,
stop selling or reconfgure our products and, under certain
circumstances, pay fnes and indemnify our customers, which
could have an adverse efect on our business, fnancial profle,
proft, cash fows, and reputation. They could also require us
to enter into royalty and licensing arrangements on terms that
are not favorable to us, cause product shipment delays, subject
our products to injunctions, require a complete or partial
redesign of products, result in delays to our customers
investment decisions, and damage our reputation.
Software includes many components or modules that provide
diferent features and perform diferent functions. Some
of these features or functions may be subject to third-party
intellectual property rights. The rights of another party could
encompass technical aspects that are similar to one or
more technologies in one or more of our products. Intellectual
property rights of third parties could preclude us from using
certain technologies in our products or require us to enter
into royalty and licensing arrangements on unfavorable or
expensive terms.
access to our customers' data, which may include personally
identifable information regarding users, our reputation could
be damaged, our business may sufer, local data protection
and privacy laws or regulations might be breached, and we
could incur signifcant liability.
In addition, our insurance coverage might not cover claims
against us for loss or security breach of data or other indirect
or consequential damages. Moreover, defending a suit,
regardless of its merit, could be costly and time-consuming. In
addition to potential liability, if we experience interruptions in
the availability of our application suite, our reputation could be
harmed and we could lose customers.
Our mitigation measures have been designed and implemented
to minimize such adverse efects. We continuously invest in
protecting the integrity and security of our products and services
as well as internal and external data that is managed within
our data centers. We are consolidating and harmonizing our
data centers including data protection measures to run a
homogeneous landscape that supports the complex infrastructure,
application, and security requirements to deliver the required
service level for cloud solutions.
that any disruption of our cloud operations could result in a
business-critical impact on our reputation, business, fnancial
position, proft, cash fows, and revenue and operating proft
target. We classify this risk as a medium risk. This risk factor
relates only to our Cloud Applications and Ariba segments.

Operational Risks
Third parties have claimed, and might claim in the future,
that we infringe their intellectual property rights, which
could lead to damages being awarded against us and limit
our ability to use certain technologies in the future.
We believe that we will increasingly be subject to intellectual
property infringement claims as the number of products
in our industry segment grows, as we acquire companies with
We are named as a defendant in various legal proceedings for
alleged intellectual property infringements. For more information
and a more detailed discussion relating to certain of these
legal proceedings, see the Notes to the Consolidated Financial
Statements, Note (23).

Claims and lawsuits against us could have an adverse efect
on our business, fnancial position, proft, cash fows, and
reputation.
Claims and lawsuits are brought against us, including claims
and lawsuits involving businesses we have acquired. Adverse
outcomes to some or all of the claims and lawsuits pending
against us might result in the award of signifcant damages
or injunctive relief against us that could hinder our ability to
conduct our business and could have an adverse efect on our
The outcome of litigation and other claims or lawsuits is
intrinsically uncertain. Managements view of the litigation may
also change in the future. Actual outcomes of litigation and
other claims or lawsuits could difer from the assessments
made by management in prior periods.

We consider the probability of occurrence of this risk to be
likely, and cannot exclude its business-critical impact on our
reputation, business, fnancial position, proft, cash fows,
and revenue and operating proft target if it were to materialize.
We classify this risk as a high risk.
For more information and more detailed discussion relating
to certain of these legal proceedings, see the Notes to the
Consolidated Financial Statements, Note (23).

The software industry is making increasing use of open
source software in its development work on solutions. We also
integrate certain open source software components from
third parties into our software. Open source licenses may require
that the software code in those components or the software
into which they are integrated be freely accessible under open
source terms. Third-party claims may require us to make
freely accessible under open source terms one of our products
or non-SAP software upon which we depend.

SAP continues to expand its participation in standards
organizations and increase the use of such standards in its
products. Participation in standards organizations might
require the licensing of SAPs intellectual property to contributors
to the standard and to all standards implementers, including
competitors, on a non-discriminatory basis in accordance with
licensing terms defned by standards organizations. Within
the software-related standards feld, there is a trend toward
expanding the scope of licensing obligations and narrowing an
intellectual property owners right to revoke a license if sued
by a licensee. In certain situations, limitations on SAPs rights
to revoke a license could reduce SAPs ability to assert a patent
infringement claim against a third party. Assertion of patents
inadvertently licensed through standards could expose SAP to
third-party claims.
Our Global Compliance Ofce is responsible for constantly
assessing and managing risks associated with third-party
intellectual property. It works closely with our Global GRC
organization. The Global Compliance Ofce investigates the
way we handle intellectual property, sets internal policies, and
monitors compliance with these policies.
We consider the probability of this risk materializing to
be likely, and that any claims concerning intellectual property
rights of third parties, open source requirements, or certain
standards could have a business-critical impact on our
business, fnancial position, proft, cash fows and reputation,
as well as on the achievement of our revenue and operating
proft target, and could also exacerbate the other risks
we describe in this report. We classify this risk as a high risk.
147 Risk Report
incompatible with our compliance requirements
An adverse efect on relationships with existing customers,
partners, or third-party providers of technology or products
Difculties in integrating the acquired companys accounting,
HR, and other administrative systems and coordination of
the acquired companys research and development (R&D),
sales, and marketing functions
Debt incurrence or signifcant cash expenditures
In addition, acquired businesses might not perform as
anticipated, resulting in charges for the impairment of goodwill
and other intangible assets on our statements of fnancial
position. Such charges may have an adverse efect on our
business, fnancial position, proft, and cash fows. We have
entered into, and expect to continue to enter into, alliance
arrangements for a variety of purposes, including the development
of new products and services. There can be no assurance that
any such products or services will be successfully developed or
that we will not incur signifcant unanticipated liabilities in
connection with such arrangements. We may not be successful
in overcoming these risks and we may therefore not beneft
as anticipated from acquisitions or alliances.

We counter these acquisition-related risks with many diferent
methodological and organizational measures. These include
technical, operational, fnancial, and legal due diligence on the
company or assets to be acquired and a holistic evaluation of
material transaction and integration risks. The methods we use
depend on the integration scenario. Our integration planning
is detailed and standardized, and carried out by a dedicated
integration team. We therefore believe we have minimized this
risk.
Although we estimate this risk to be unlikely, we cannot
completely exclude the possibility that this risk could have a
major impact on our business, fnancial position, proft,
cash fows, and revenue and operating proft target. We classify

We might not acquire and integrate companies efectively
or successfully and our strategic alliances might not be
successful.
To expand our business, we have in the past made acquisitions
of businesses, products, and technologies. We expect to
continue to make such acquisitions in the future. Managements
negotiation of potential acquisitions and alliances and
integration of acquired businesses, products, or technologies
demands time, focus, and resources of management and of
the workforce. Acquisitions of companies, businesses, and
technology expose us to unpredictable operational difculties,
expenditures, and risks. These risks include, among others:
The selection of the wrong integration model for the acquired
company
The failure to integrate the acquired business and its diferent
business and licensing models
The failure to integrate the acquired technologies or products
with our current products and technologies
The failure to integrate the acquired companys operations
across SAPs diferent cultures, languages, and local protocols,
all within the constraints of applicable local laws
The failure to meet the needs of the acquired companys
customers and partners in the combined company
The diversion of managements time and attention from daily
operations
The loss of key personnel of the acquired business
Material unknown liabilities and contingent liabilities of
acquired companies, including legal, tax, accounting
intellectual property, or other signifcant liabilities that may
not be detected through the due diligence process
Legal and regulatory constraints (such as contract obligations,
privacy frameworks and agreements, and so on)
Difculties in implementing, restoring, or maintaining internal
controls, procedures, and policies
Practices or policies of the acquired company that may be
We rely on a combination of the protections provided by
applicable statutory and common law rights, including
trade secret, copyright, patent, and trademark laws, license
and non-disclosure agreements, and technical measures to
establish and protect our proprietary rights in our products. We
have established various internal programs, such as internal
policies, processes, and monitoring, to assess and manage the
risks associated with standards organizations, open source,
and third-party intellectual property.
We may be dependent in the aggregate on technology that we
license from third parties that is embedded in our products or
that we resell to our customers. We have licensed and will
continue to license numerous third-party software products that
we incorporate into and/or distribute with our existing products.
We endeavor to protect ourselves in the respective agreements
by obtaining certain rights in case such agreements are
terminated.
We are party to certain patent cross-license agreements with
third parties.
We estimate the probability of this risk occurring as likely, and
that it could have a business-critical impact on our reputation,
business, fnancial position, proft, cash fows, and revenue and
operating proft target. We classify this risk as a high risk.

SAPs business strategy focuses on certain business models
that are highly dependent on a working cyberspace.
A cybersecurity breach could have an adverse efect on our
customers, our reputation, and our business.
The key cybersecurity risks currently applicable to SAP include
state-driven economic espionage as well as competitor-driven
industrial espionage, and criminal activities including, but not
limited to cyber-attacks against on-premise software, hosted,
and cloud services. This might result in, for example, leakage of
We may not be able to obtain adequate title to, or licenses
in, or to enforce, intellectual property.
Protecting and defending our intellectual property is crucial to
our success. We use a variety of means to identify and monitor
potential risks and to protect our intellectual property. These
include applying for patents, registering trademarks and other
marks and copyrights, implementing measures to stop copyright
and trademark infringement, entering into licensing,
confdentiality, and non-disclosure agreements, and deploying
protection technology. Despite our eforts, we might not be
able to prevent third parties from obtaining, using, or selling
without authorization what we regard as our proprietary
technology and information. All of these measures aford
only limited protection, and our proprietary rights could be
challenged, invalidated, held unenforceable, or otherwise
afected. Some intellectual property might be vulnerable to
disclosure or misappropriation by employees, partners, or
other third parties. Third parties might independently develop
technologies that are substantially equivalent or superior to
our technology. Finally, third parties might reverse-engineer or
otherwise obtain and use technology and information that we
regard as proprietary. Accordingly, we might not be able to
protect our proprietary rights against unauthorized third-party
copying or utilization, which could have an adverse efect on
our competitive position and our fnancial position, and result
in reduced sales. Any legal action we bring to enforce our
proprietary rights could also involve enforcement against a
partner or other third party, which may have an adverse efect
on our ability, and our customers ability, to use that partners or
other third parties products. In addition, the laws and courts
of certain countries may not ofer efective means to enforce our
intellectual property rights. This could have an adverse efect
on our reputation, business, fnancial position, proft, and cash
fows.

149 Risk Report
damage to assets by trespassers in our facilities or by people
who have gained unauthorized physical access to our facilities,
systems, or information, which could have an adverse efect on
our business, fnancial profle, proft, and cash fows.

To minimize these risks, we have implemented several technical
and organizational measures designed to safeguard our
information, IT and facility infrastructure, and other assets.
These measures include, for example, physical access control
systems at facilities, multilevel access controls, closed-circuit
television surveillance, and security personnel in all critical areas.
Access to information and information systems is controlled
using authorization concepts. Managers and employees are
regularly sensitized to the issues and given mandatory security
and compliance trainings. We keep these measures under
continuous review to meet current threats.
that any misuse, theft, or breach of security could have a
moderate impact on our business, fnancial position, proft,
and cash fows as well as on our revenue and operating proft
target. We classify this risk as a low risk.
Our insurance coverage might not be sufcient and
uninsured losses may occur.
We maintain insurance coverage to protect us against a broad
range of risks, at levels we believe are appropriate and
consistent with current industry practice. Our objective is to
exclude or minimize risk of fnancial loss at reasonable cost.
However, we may incur losses that are beyond the limits, or
outside the scope, of coverage of our insurance and that may
limit or prevent indemnifcation under our insurance policies.
In addition, we might not be able to maintain adequate insurance
coverage on commercially reasonable terms in the future.
Further, certain categories of risks are currently not insurable
at reasonable cost, which could have an adverse efect on our
confdential information and intellectual property, defective
products, production downtimes, supply shortages, and
compromised data (including personal data). A failure of our
cybersecurity measures could expose our business operations
and service delivery to the described risks, for example, virtual
attack, disruption, damage, and/or unauthorized access.
Additionally, we could be subject to recovery costs, for example,
as well as signifcant contractual and legal claims by customers,
partners, authorities, and third-party service providers for
damages against us, which could have an adverse efect on our

To address the increasing cybersecurity threats, SAP is
continuously adapting and modifying its security procedures.
We have multiple security measures in place, such as technical
IT security measures, identity and access management,
and mandatory security and compliance trainings. In addition,
our security governance model clearly defnes security
management accountabilities for all security areas regarding
product security and corporate security that enables us to
respond quickly to identifed cybersecurity risks.
Although we still consider the occurrence of this risk to be
unlikely, we cannot completely exclude the possibility that this
risk could have a business-critical impact on our business,
fnancial position, proft, cash fows, and reputation as well as
revenue and operating proft target. We classify this risk as a
medium risk.

We may not be able to protect our critical information
and assets or to safeguard our business operations against
disruption.
SAP is dependent on the exchange of a wide range of information
across our global operations and on the availability of our
infrastructure. With regard to our physical environment, we face
several key security risks such as industrial and/or economic
espionage, serious and organized crime, and other illegal
activities, as well as violent extremism and terrorism. We might
be endangered by threats including, but not limited, to social
engineering, misuse, or theft of information or assets, or
Consolidated Risk Profle
Management Assessment of Overall Risks and
Opportunities
SAP consolidates and aggregates all risks reported by
the diferent business units and functions following our risk
management policy, monitored by a Group-wide risk
management governance function.
Compared to previous years, in 2013 we recognized only minor
changes in the percentages of all risks categorized as high
or medium in our risk level matrix. At the end of the year, the
number of risks categorized as high accounted for 12%
(2012: 9%) of all identifed risks, while the risks categorized as
medium accounted for 39% (2012: 34%) of all identifed
risks.
In our view, considering their likelihood of occurrence and
impact level, the risks described in our aggregated risk report
do not individually or cumulatively threaten our ability to
continue as a going concern. Management remains confdent
that the Groups earnings strength forms a solid basis for
our future business development and provides the necessary
resource to pursue the opportunities available to the Group.
Because of our strong position in the market, our technological
leadership, our highly motivated employees, and our structured
processes for early risk identifcation, we are confdent that
we can continue to successfully counter the challenges arising
from the risks in our risk profle in 2014.

business, fnancial position, proft, and cash fows. Finally,
there can be no assurance of the fnancial ability of the insurance
companies to meet their claim payment obligations.

In view of the scope of our insurance coverage and our selection
of insurers, and because we keep our insurance programs
under constant review, we believe that the likelihood of this risk
materializing is remote.
We cannot exclude the possibility of a business-critical impact
on our business, fnancial position, proft, cash fows, and
operating proft target if the risk were to occur. We classify this
risk as a medium risk.

We could incur losses in connection with venture capital
investments.
Through our partnership with SAP Ventures, we plan to
continue investing in new and promising technology businesses.
Many such investments generate net losses and require
additional expenditures from their investors. Changes to
planned business operations have in the past, and may in the
future, afect the performance of companies in which SAP
Ventures holds investments, and that could have an adverse
efect on the value of our investments in SAP Ventures, which
could have an adverse efect on our business, fnancial position,
proft, and cash fows. Furthermore, tax deductibility of capital
losses and impairment in connection with equity securities
are often restricted and could therefore have an adverse efect
on our efective tax rate.

To address this risk, SAP Ventures diversifes its portfolio and
manages our investments actively. In addition, our venture
capital activities have a limited scope.
and that if the risk were to occur, its potential impact on our
business, fnancial position, proft, cash fows, and operating
proft target would be minor. We classify this risk as a low risk.

151 Risk Report
Bob Calderoni, president of Ariba, an SAP company, and a
member of our Global Managing Board, decided to leave SAP
with efect from January 15, 2014.

Economic Trends Year-Over-Year GDP Growth
Percent
2012e 2013p 2014p
World 3.1 3.0 3.7
Advanced economies 1.4 1.3 2.2
Developing and emerging economies 4.9 4.7 5.1
Europe, the Middle East,
and Africa (EMEA)
Euro area 0.7 0.4 1.0
Germany 0.9 0.5 1.6
Central and Eastern Europe 1.4 2.5 2.8
Middle East and North Africa 4.1 2.4 3.3
Sub Saharan Africa 4.8 5.1 6.1
Americas
United States 2.8 1.9 2.8
Canada 1.7 1.7 2.2
Central and South America, Caribbean 3.0 2.6 3.0
Asia Pacific Japan (APJ)
Japan 1.4 1.7 1.7
Asian developing economies 6.4 6.5 6.7
China 7.7 7.7 7.5
e = estimate; p = projection
Source: International Monetary Fund (IMF), World Economic Outlook Update January 2014, Is the Tide Rising?
As of January 21, 2014, p. 2.
IT MARKET: THE OUTLOOK FOR 2014
According to International Data Corporation (IDC), a market
research frm based in the United States, economic recovery
in 2014 will lead to a greater increase in spending on IT than
occurred in 2013. That increase is expected to continue to be
higher than the growth in the overall economy. IDC expects
businesses will revert to normal IT upgrade cycles in 2014 as
liquidity bottlenecks are resolved by the return of economic
stability, so companies in particular will increase investment
in IT. In the emerging economies, IDC expects IT markets to
recover from the setbacks of the previous year, because
basically demand for IT products is high and conditions are
stable.
FUTURE TRENDS IN THE GLOBAL ECONOMY
The experts at the European Central Bank (ECB
1)
) expect
the global economy to expand gradually in response to factors
such as more stable credit conditions around the world. The
ECB bases this expectation on the assumption that, as in 2013,
prospects will improve in the industrialized economies but will
remain subdued in some of the emerging economies compared
to past years.
According to these expectations, the outlook in the Europe,
Middle East, and Africa (EMEA) region has improved: The ECB
expects a slow recovery in the euro area in 2014 and 2015,
supported by a slight recovery of domestic and export demand.
Companies in particular will increase their investments in
2014, encouraged by the very low interest rates and by a high
demand for modernization after several years of restrained
investments. The ECB currently expects GDP in the euro area
to grow about 1% in 2014 and 1.5% in 2015. That would bring
GDP back to frst-quarter 2008 pre-crisis levels by the end of
2015. The ECB also expects the economies of Central and
Eastern Europe to gain traction beginning in 2014.

The ECB is also optimistic about the Americas region. It believes
the economic upturn in the United States will gradually gain
momentum as the residential real-estate and labor markets
continue to brighten up. However, it believes uncertainty
regarding fnancial policy will continue, with new legislation on
debt capping and public fnance under continued discussion.
Future trends in the Asia Pacifc Japan (APJ) region are difcult
to estimate, according to the ECB. In Japan, a consumption tax
rise is due in April 2014. That could cause the economy to pick
up in the frst quarter, as consumers bring forward spending.
As a result, subsequent quarters may see an economic
slowdown. It remains to be seen what efect the wide-ranging
agenda for reform announced by the Communist Party of
China in November 2013 will have. The goal is to set China on a
more sustainable path to economic growth. The ECB believes
the reforms will strengthen the market and the economy
outside the public sector.
1)
Unless otherwise indicated, all economic information in this section is based on information from
the European Central Bank (ECB).
153 Report on Expected Developments
Trends in the IT Market Increased IT Spending Year over Year
Percent
2012e 2013p 2014p
World
Total IT 5.3 4.4 5.1
Hardware 6.3 4.8 5.4
Packaged software 6.2 5.6 6.2
Applications 6.0 5.6 6.0
IT services 3.2 3.2 3.9
Europe, Middle East, and Africa
(EMEA)
Total IT 5.2 2.3 4.4
Americas
Total IT 4.2 5.9 4.5
Asia Pacific Japan (APJ)
Total IT 6.9 4.6 6.7
e = estimate, p = projection
Source: IDC Worldwide Black Book Q3 2013
IMPACT ON SAP
SAP expects to outperform the global economy and the IT
industry again in 2014. Four years of growth momentum
underscore our leadership in the transformation of the industry.
We are gaining market share in all regions. We have reinvented
the database and developed the next-generation real time
in-memory platform SAP HANA. We are managing the transition
to the cloud successfully, while growing our core business
and expanding our operating margin.
According to IDC, software sales should again outpace the IT
market as a whole in 2014. Spending on PCs and tablets should
grow by a percentage in the low single digits: the PC market
has bottomed out and the tablet market should see growth
well into the double digits. Investments in servers and data
storage devices could grow by a percentage in the low single
digits again, and IDC forecasts slightly more growth in the IT
services market in 2014 than in 2013.
The outlook IDC describes for 2014 in the Europe, Middle East,
and Africa (EMEA) region is positive: It believes Western Europe
will almost sustain the slightly improved growth it achieved
at the end of 2013, showing signifcant positive growth rates for
the full year. The IT markets of Central and Eastern Europe,
the Middle East, and Africa could see growth in the high single
digits, and the IT market in Russia may even approach
double-digit growth, IDC says.
IDC is more cautious about the Americas region: It believes
2014 IT market growth in the United States may fall short of
the 2013 level as demand for smartphones declines. Despite
the uncertainty concerning government policy, IDC predicts
IT investment in the United States will be largely stable. IDC
believes growth in the Latin America IT markets will slow to
single digits.
IDC forecasts that the IT market in the Asia Pacifc Japan (APJ)
region will grow by a percentage in the middle of the single-digit
range. However, it believes the market in Japan will decline
slightly. In contrast, IDC predicts the IT market in China, which
was weak in the previous year, should recover well into
double-digit growth in 2014.
development efectiveness, creating efciencies and accelerating
innovation cycles to engage more closely with our customers.
We are also investing in our go-to-market channels to expand
capacity and drive greater volume sales. At the same time,
we are expanding our technology partner ecosystem to foster
co-innovation as a force multiplier for creating additional
business value for our customers.
The success of SAP and our customers depends on our people
whom we consider our most important asset. Our employees
spark our innovation, deliver value to our customers, and
drive our sustainable growth and proftability. The correlation
between our continued business success and our ability to
attract, retain, and engage top talent is stronger than ever. We
will continue to execute our people strategy to set us apart in
vital areas such as workforce diversity and talent management.
Our ambitious growth strategy and our ability to innovate
depends on creating an environment for our employees that
drives them to unleash their full potential.
Go-to-Market Investment Delivers Customer Value
SAP goes to market by region, customer segment, line of
business and industry. In each region, we seek to concentrate
our sales eforts on the fastest-growing markets with the
greatest business and revenue potential. We evolve and invest
in our go-to-market coverage model to efectively sell industry-
specifc solutions while increasing our engagement with
customers in line-of-business functions. We continue to provide
companies of any size small, midsize, and large with
tailored oferings that align to their specifc budgetary, resource,
and deployment requirements.
Thanks to our great progress in strategy and technology
since 2010, we have increased the importance of SAP to our
customers. We are well-positioned to expand our core business
and to accelerate our cloud businesses. We are therefore
confdent we can achieve our medium-term targets for 2015
and 2017, assuming that the economic environment and IT
industry develop as currently forecast. Balanced in terms
of regions as well as industries, we are well-positioned to ofset
smaller individual fuctuations in the global economy and IT
market.
A comparison of our business outlook with forecasts for the
global economy and IT industry shows that, with our customer-
centered innovation strategy, we can be successful even in a
tough economic environment. Our market and the demands of
our customers are changing rapidly. We anticipated these
changes early.
We plan to continue to invest in countries in which we expect
signifcant growth, and we aim to expand our market share
in those countries. Such countries include Brazil, China, India,
Russia, as well as countries in the Middle East and Africa. We
therefore expect to see further future growth potential helping
us reach our ambitious 2014 outlook targets and medium-term
aspirations for 2015 and 2017. For more information, see the
Operational Targets for 2014 (Non-IFRS) section.

FORECAST FOR SAP
Strategy for Proftable Growth
SAP seeks to maintain proftable growth across its portfolio of
products and services. Our goal is to expand our addressable
market to US$350 billion in 2020, compared to US$110 billion
in 2010. Our ability to deliver software-based innovation
and value in target growth areas positions us favorably in the
enterprise software market.
SAPs continued growth depends on our ability to deliver
innovative solutions and provide signifcant value to
our customers. We continue to improve our research and
SAP expects full-year 2014 non-IFRS software and software-
related service revenue to increase by 6% to 8% at constant
currencies (2013: 14,032 million).
SAP expects full-year 2014 non-IFRS operating proft to be in
a range of 5.8 billion to 6.0 billion at constant currencies
(2013: 5,514 million).
We expect that total revenue growth (non-IFRS) will continue
to depend largely on the revenue from the On-Premise Products
segment. However, the revenue growth we expect from this
segment is below the outlook provided for cloud subscription
revenue (non-IFRS). In light of the rate at which professional
services and other service revenue is growing, we do not
expect strong growth in the On-Premise Services segment.
We expect an increase in segment proft in our On-Premise
division, with On-Premise Products segment proft growing
faster than On-Premise Services segment proft. We expect
only a slight improvement in On-Premise Services segment
proft. The Cloud division is expected to continue with
increasingly positive segment proft in 2014.
In light of the rate at which cloud subscriptions are growing in
our cloud segments, we expect strong revenue growth in those
segments.
We present the following reconciliation from our 2013 IFRS
software and cloud subscription revenue, IFRS software and
software-related service revenue, IFRS total revenue, and
IFRS operating proft to the non-IFRS equivalents to facilitate
comparison between IFRS fnancial measures and the
non-IFRS fnancial measures in our 2014 outlook:
Greater Volume and Co-Innovation Through an
Open Ecosystem
SAP continues to engage an expanding partner ecosystem
to increase market coverage, enhance our solutions portfolio,
and spur innovation. SAP and its vibrant partner ecosystem
ofer greater choice and business value through the power of
co-innovation, appealing to customers that want to avoid being
locked in to a single vendor. SAP partners ofer customers
knowledgeable local delivery of solutions across industries and
lines of business. SAP technology partners continue to drive
our research agenda, enhance the SAP portfolio, and monetize
new technology breakthroughs.
Organic Growth and Targeted Acquisitions
Organic growth remains the primary driver of SAPs strategy.
We will continue to invest in our own product development and
technology innovation, improving the speed, number of projects,
and innovations brought to market. Our ecosystem strategy
enables us to better leverage our innovation by extending it to
our partners to drive additional customer value, based on their
own domain expertise. We will also continue to acquire targeted,
strategic, and fll-in technology to add to our broad solution
oferings and improve our coverage in key strategic markets to
best support our customers needs.
OPERATIONAL TARGETS FOR 2014 (NON-IFRS)
Revenue and Operating Proft Outlook
The Executive Board is providing the following outlook for the
full year 2014:
SAP expects full-year 2014 non-IFRS cloud subscription and
support revenue to be in a range of 950 to 1,000 million
at constant currencies (2013: 757 million). The upper end
of this range represents a growth rate of 32% that is similar
to the respective 2013 growth rate after adjusting for
acquisitions.
sufcient to meet our present operating fnancing needs also
in 2014 and, together with expected cash fows from operations,
will support our currently planned capital expenditure
requirements over the near term and medium term.
We intend to efect a substantial planned reduction of our
fnancial debt in 2014 and, at the time of this report, we expect
to make repayments of 586 million over the year. We
will consider issuing new debt, such as bonds or U.S. private
placements, on an as-needed basis only and if market
conditions are advantageous. By the time of this report, we
have no concrete plans for future share buybacks.
Investment Goals
Excepting acquisitions, our planned capital expenditures
for 2014 and 2015 mainly comprise the construction activities
described earlier in this report. We expect investments of
approximately 194 million during the next three years. These
investments can be covered in full by operating cash fow.
Proposed Dividend
We plan to continue our dividend policy, which is that the
payout ratio should be more than 30%.
Reconciliations of IFRS to Non-IFRS Financial Measures for 2013
IFRS Financial
Measure
Recurring Revenue
Not Recorded
Under IFRS
Adjustments
Operating
1)
Discontinued
Activities
3)
Non-IFRS
Financial
Measure
Cloud subscriptions and support 696 61 n.a. n.a. 757
Software and cloud subscription revenue 5,212 63 n.a. n.a. 5,275
Software and software-related service revenue 13,950 82 n.a. n.a. 14,032
Total revenue
2)
16,815 82 n.a. n.a. 16,897
Total operating expenses 12,336 0 953 0 11,383
Operating profit
2)
4,479 82 953 0 5,514
1)
Included in operating expenses are acquisition-related charges, share-based payment expenses, and restructuring charges.
2)
These fnancial measures are the numerator or the denominator in the calculation of our IFRS and non-IFRS operating margin, and are included in this table for transparency.
3)
The discontinued activities include the results of our discontinued TomorrowNow business.
The following table shows the estimates of the items that
represent the diferences between our non-IFRS fnancial
measures and our IFRS fnancial measures.
Non-IFRS Measures
millions
Estimated
Amounts for 2014
Actual Amounts
for 2013
Deferred revenue write-down < 20 82
Discontinued activities < 10 1
Share-based payment expenses 470 to 510 327
Acquisition-related charges 520 to 560 555
Restructuring charges 50 to 150 70
The company expects a full-year 2014 efective tax rate (IFRS)
of 26.0% to 27.0% (2013: 24.4%) and an efective tax rate
(non-IFRS) of 27.5% to 28.5% (2013: 25.9%).
Goals for Liquidity and Finance
On December 31, 2013, our net liquidity was negative, but
we have additional liquidity reserves. We believe that our liquid
assets combined with our undrawn credit facilities are
The outlook projections for the SAP Group in respect of
liquidity, fnance, investment, and dividend are equally
applicable to SAP AG.
Among the assumptions underlying this outlook are those
presented above concerning the economy and our expectations
for the performance of the SAP Group.
MEDIUM-TERM PROSPECTS
With SAP HANA as the single platform for our entire solution
portfolio, delivered on-premise or in the cloud, SAP will drive
simplicity and business outcomes for our customers.
We expect our business, our revenue, and our proft to grow,
assuming there is a sustained recovery in the global economy.
Our strategic objectives are focused on the following fnancial
and non-fnancial indicators: revenue, margin, customer loyalty,
and employee engagement.
We expect the combination of a stable, highly-proftable core
and fast-growing cloud business to deliver continued growth
and margin expansion. We continue to strive to increase
our total revenue to more than 20 billion by 2015 and revenue
from our cloud business, including cloud-related professional
services, to approximately 2 billion by 2015.
Looking beyond 2015, we introduced new 2017 targets. We now
aim to increase total revenue to at least 22 billion and
revenue from our cloud business to 3.0 to 3.5 billion by 2017.
We have retained our non-IFRS operating margin goal of 35%.
To capture the growth opportunities in the cloud, we now
expect this target to be reached by 2017 rather than in 2015 as
previously stated. We anticipate the fast-growing cloud business
along with growth in support revenue will drive a higher
proportion of more predictable, recurring revenue in the future.
Premises on Which Our Outlook Is Based
In preparing our outlook, we have taken into account all events
known to us at the time we prepared this report that could
infuence SAPs business going forward.
Among the premises on which this outlook is based are those
presented concerning the economy and on the assumption
that there will be no efects from a major acquisition.

OUTLOOK FOR SAP AG
The primary source of revenue for SAP AG is the license fees it
charges subsidiaries for the right to market and maintain SAP
software solutions. Consequently, the performance of SAP AG
in operating terms is closely tied to the software and software-
related service revenue of the SAP Group.
We expect SAP AG product revenue to increase generally in line
with the rise in software and software-related service revenue
anticipated for the SAP Group in 2014. Assuming there are
no special efects relating to acquisitions or internal corporate
restructuring measures in 2014, we also expect SAP AG
operating proft to grow. Provided the SAP Group continues to
hit its revenue and proft targets, we expect SAP AG to sustain
revenue and operating proft growth into the medium term.
We believe SAP AG, the parent company of the SAP Group, will
receive investment income in the form of proft transfers and
dividends again in the future. The growth we expect from the
SAP Group should have a positive efect on SAP AG investment
income.
In addition to our fnancial goals, we also focus on two non-
fnancial targets: Customer loyalty and employee engagement.
We believe it is essential that our employees are engaged,
drive our success, and support our strategy. Therefore, we plan
to increase our employee engagement index score to 82% by
2015 (2013: 77%). Further, our customers satisfaction with
the solutions we ofer is very important to us. We want our
customers to not only be satisfed, but also see us as a trusted
partner for innovation. We measure this customer loyalty
metric using the Net Promoter Score (NPS). For 2014, we have
set a target for increasing the NPS by four percentage points
(2013: 12.1%).
SAPs vision to help the world run better and improve peoples
lives comes to life in product innovation that drives business
value for our customers. By delivering on our product roadmap,
SAP is powering a market-wide transformation in how people
and organizations work together and run better. Building on a
track record of innovation, SAP is again at the forefront of a
major shift in the IT sector, away from commoditized hardware
and lower value services, toward renewed investment in
diferentiating IT through business software and services that
drive simplicity, efciency, and a more sustainable business
transformation.
Internal
Management System
We measure our performance
through four companywide
indicators: revenue, margin,
employee engagement,
and customer loyalty.
To learn more about SAPs internal management system please visit www.sapintegratedreport.com
Consolidated Financial Statements IFRS 161
162 Consolidated Income Statements
163 Consolidated Statements of Comprehensive Income
164 Consolidated Statements of Financial Position
166 Consolidated Statements of Changes in Equity
168 Consolidated Statements of Cash Flows
169 Notes to the Consolidated Financial Statements
169 (1) General Information About Consolidated Financial Statements
169 (2) Scope of Consolidation
170 (3) Summary of Signifcant Accounting Policies
191 (4) Business Combinations
193 (5) Revenue
194 (6) Other Operating Income/Expense, Net
194 (7) Employee Benefts Expense and Headcount
196 (8) Other Non-Operating Income/Expense, Net
197 (9) Financial Income, Net
198 (10) Income Tax
201 (11) Earnings per Share
202 (12) Other Financial Assets
203 (13) Trade and Other Receivables
204 (14) Other Non-Financial Assets
205 (15) Goodwill and Intangible Assets
209 (16) Property, Plant, and Equipment
210 (17) Trade and Other Payables, Financial Liabilities, and Other Non-Financial Liabilities
213 (18) Provisions
223 (19) Deferred Income
223 (20) Total Equity
225 (21) Additional Capital Disclosures
227 (22) Other Financial Commitments and Contingent Liabilities
228 (23) Litigation and Claims
232 (24) Financial Risk Factors
236 (25) Financial Risk Management
242 (26) Additional Fair Value Disclosures on Financial Instruments
249 (27) Share-Based Payments
258 (28) Segment and Geographic Information
263 (29) Board of Directors
268 (30) Related Party Transactions
268 (31) Principal Accountant Fees and Services
269 (32) German Code of Corporate Governance
269 (33) Subsequent Events
270 (34) Subsidiaries, Associates, and Other Equity Investments
281 Managements Annual Report on Internal Control over
Financial Reporting in the Consolidated Financial Statements
161
Consolidated Financial Statements IFRS
Consolidated Income Statements of SAP Group for the Years Ended December 31,
Notes 2013 2012 2011
Software 4,516 4,658 4,107
Cloud subscriptions and support 696 270 18
Software and cloud subscriptions 5,212 4,928 4,125
Support 8,738 8,237 7,194
Software and software-related service revenue 13,950 13,165 11,319
Consulting 2,242 2,442 2,341
Other services 623 616 573
Professional services and other service revenue 2,865 3,058 2,914
Total revenue (5) 16,815 16,223 14,233
Cost of software and software-related services 2,597 2,555 2,107
Cost of professional services and other services 2,402 2,520 2,247
Total cost of revenue 4,999 5,075 4,354
Gross profit 11,816 11,147 9,879
Research and development 2,282 2,261 1,935
Sales and marketing 4,131 3,912 3,083
General and administration 866 949 715
Restructuring (18) 70 8 4
TomorrowNow litigation (23) 0 0 717
Other operating income/expense, net (6) 12 23 25
Total operating expenses 12,336 12,181 9,348
Operating profit 4,479 4,041 4,884
Other non-operating income/expense, net (8) 17 173 75
Finance income 115 103 119
Finance costs 181 175 161
Financial income, net (9) 66 72 42
Profit before tax 4,396 3,796 4,767
Income tax TomorrowNow litigation 0 0 281
Other income tax expense 1,071 993 1,049
Income tax expense (10) 1,071 993 1,331
Profit after tax 3,325 2,803 3,437
Profit attributable to non-controlling interests 1 0 1
Profit attributable to owners of parent 3,326 2,803 3,435
Earnings per share, basic (in ) (11) 2.79 2.35 2.89
Earnings per share, diluted (in ) (11) 2.78 2.35 2.89
The accompanying Notes are an integral part of these Consolidated Financial Statements.
162 Consolidated Financial Statements IFRS
Consolidated Statements of Comprehensive Income of SAP Group for the Years Ended December 31,
millions
Notes 2013 2012 2011
Items that will not be reclassified to profit or loss
Remeasurements on defined benefit pension plans (18) 16 12 17
Income tax relating to items that will not be reclassified (10) 3 4 5
Other comprehensive income after tax for items that will not be reclassified
to profit or loss
13 8 12
Items that will be reclassified subsequently to profit or loss (20)
Exchange differences 576 214 106
Available-for-sale financial assets (26) 60 13 7
Cash flow hedges (25) 0 63 1
Income tax relating to items that will be reclassified (10) 8 20 7
Other comprehensive income after tax for items that will be reclassified
to profit or loss
524 157 105
Other comprehensive income net of tax 511 165 93
Total comprehensive income 2,814 2,638 3,530
attributable to owners of parent 2,815 2,638 3,528
attributable to non-controlling interests 1 0 1
163 Consolidated Statements of Comprehensive Income
Consolidated Statements of Financial Position of SAP Group as at December 31,
millions
Notes 2013 2012
Cash and cash equivalents 2,748 2,477
Other financial assets (12) 251 154
Trade and other receivables (13) 3,865 3,917
Other non-financial assets (14) 346 294
Tax assets 142 85
Total current assets 7,352 6,928
Goodwill (15) 13,688 13,192
Intangible assets (15) 2,956 3,234
Property, plant, and equipment (16) 1,820 1,708
Other financial assets (12) 607 509
Trade and other receivables (13) 98 88
Other non-financial assets (14) 107 68
Tax assets 172 170
Deferred tax assets (10) 294 408
Total non-current assets 19,741 19,378
Total assets 27,094 26,306
Notes 2013 2012
Trade and other payables (17) 850 870
Tax liabilities 433 440
Financial liabilities (17) 748 802
Other non-financial liabilities (17) 2,263 2,204
Provision TomorrowNow litigation (23) 223 234
Other provisions 422 609
Provisions (18) 645 843
Deferred income (19) 1,408 1,386
Total current liabilities 6,347 6,546
Trade and other payables (17) 45 63
Tax liabilities 318 388
Financial liabilities (17) 3,758 4,446
Other non-financial liabilities (17) 112 98
Provisions (18) 277 347
Deferred tax liabilities (10) 115 223
Deferred income (19) 74 62
Total non-current liabilities 4,699 5,627
Total liabilities 11,046 12,173
Issued capital 1,229 1,229
Share premium 551 492
Retained earnings 16,258 13,934
Other components of equity 718 194
Treasury shares 1,280 1,337
Equity attributable to owners of parent 16,040 14,125
Non-controlling interests 8 8
Total equity (20) 16,048 14,133
Total equity and liabilities 27,094 26,306
165 Consolidated Statements of Financial Position
Consolidated Statements of Changes in Equity of SAP Group as at December 31,
millions
Equity Attributable to Owners of Parent Equity Attributable to Owners of Parent Non-Controlling Interests Total Equity
Issued Capital Share Premium Retained
Earnings
Other Components of Equity Other Components of Equity Treasury Shares Total
Exchange Differences

Available-for-Sale
Financial Assets
Cash Flow Hedges
Note reference (20) (20) (20) Statement of Comprehensive Income Statement of Comprehensive Income (20)
January 1, 2011 prior to IAS 19
(revised) adoption
1,227 337 9,767 131 16 27 1,382 9,807 17 9,824
Cumulated difference from the retrospective
adoption of IAS 19 (revised)
11 11 11
January 1, 2011 after IAS 19
(revised) adoption
1,227 337 9,756 131 16 27 1,382 9,796 17 9,813
Profit after tax 3,435 3,435 1 3,437
Other comprehensive income 12 112 7 0 93 93
Comprehensive income 3,423 112 7 0 3,528 1 3,530
Share-based payments 9 9 9
Dividends 713 713 713
Issuance of shares under share-based
payments
1 46 47 47
Purchase of treasury shares 246 246 246
Reissuance of treasury shares under
share-based payments
27 251 278 278
Change in non-controlling interests 19 19 10 29
December 31, 2011 1,228 419 12,448 19 9 27 1,377 12,681 8 12,689
Comprehensive income 2,795 217 13 47 2,638 2,638
Dividends 1,310 1,310 1,310
Issuance of shares under
1 14 15 15
18 93 111 111
Other 2 2 2
December 31, 2012 1,229 492 13,934 236 22 20 1,337 14,125 8 14,133
Profit after tax 3,326 3,326 1 3,325
Dividends 1,013 1,013 1,013
29 57 86 86
December 31, 2013 1,229 551 16,258 820 82 20 1,280 16,040 8 16,048
Consolidated Statements of Changes in Equity of SAP Group as at December 31,
millions
Equity Attributable to Owners of Parent Equity Attributable to Owners of Parent Non-Controlling Interests Total Equity
Issued Capital Share Premium Retained
Earnings
Other Components of Equity Other Components of Equity Treasury Shares Total
Exchange Differences

Available-for-Sale
Financial Assets
Cash Flow Hedges
Note reference (20) (20) (20) Statement of Comprehensive Income Statement of Comprehensive Income (20)
January 1, 2011 prior to IAS 19
(revised) adoption
1,227 337 9,767 131 16 27 1,382 9,807 17 9,824
Cumulated difference from the retrospective
adoption of IAS 19 (revised)
11 11 11
January 1, 2011 after IAS 19
(revised) adoption
1,227 337 9,756 131 16 27 1,382 9,796 17 9,813
Profit after tax 3,435 3,435 1 3,437
Dividends 713 713 713
Issuance of shares under share-based
payments
1 46 47 47
27 251 278 278
Change in non-controlling interests 19 19 10 29
December 31, 2011 1,228 419 12,448 19 9 27 1,377 12,681 8 12,689
Comprehensive income 2,795 217 13 47 2,638 2,638
Dividends 1,310 1,310 1,310
Issuance of shares under
1 14 15 15
18 93 111 111
Other 2 2 2
December 31, 2012 1,229 492 13,934 236 22 20 1,337 14,125 8 14,133
Profit after tax 3,326 3,326 1 3,325
Dividends 1,013 1,013 1,013
29 57 86 86
December 31, 2013 1,229 551 16,258 820 82 20 1,280 16,040 8 16,048
167 Consolidated Statements of Changes in Equity
Consolidated Statements of Cash Flows of SAP Group for the Years Ended December 31,
millions
Notes 2013 2012 2011
Adjustments to reconcile profit after taxes to net cash flows provided by operating activities:
Depreciation and amortization (15), (16) 951 863 724
Income tax expense (10) 1,071 993 1,331
Financial income, net (9) 66 72 42
Decrease/increase in sales and bad debt allowances on trade receivables 42 25 18
Other adjustments for non-cash items 57 31 14
Decrease/increase in trade and other receivables 110 298 426
Decrease/increase in other assets 131 23 39
Decrease/increase in trade payables, provisions, and other liabilities 176 420 404
Decrease/increase in deferred income 125 154 121
Cash outflows due to TomorrowNow litigation (23) 1 7 52
Interest paid 159 165 139
Interest received 67 92 92
Income taxes paid, net of refunds 1,295 1,102 908
Net cash flows from operating activities 3,832 3,822 3,775
Business combinations, net of cash and cash equivalents acquired (4) 1,160 6,094 188
Purchase of intangible assets and property, plant, and equipment 566 541 445
Proceeds from sales of intangible assets or property, plant, and equipment 55 39 55
Purchase of equity or debt instruments of other entities 1,531 1,022 2,046
Proceeds from sales of equity or debt instruments of other entities 1,421 1,654 1,398
Net cash flows from investing activities 1,781 5,964 1,226
Purchase of non-controlling interests 0 0 28
Dividends paid (21) 1,013 1,310 713
Purchase of treasury shares (21) 0 53 246
Proceeds from reissuance of treasury shares 49 90 251
Proceeds from issuing shares (share-based payments) 0 15 46
Proceeds from borrowings 1,000 5,778 519
Repayments of borrowings 1,625 4,714 1,005
Net cash flows from financing activities 1,589 194 1,176
Effect of foreign currency exchange rates on cash and cash equivalents 191 152 74
Net decrease/increase in cash and cash equivalents 271 2,488 1,447
Cash and cash equivalents at the beginning of the period (21) 2,477 4,965 3,518
Cash and cash equivalents at the end of the period (21) 2,748 2,477 4,965

(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 International Financial Reporting Standards (IFRS). The
designation IFRS includes all standards issued by the
International Accounting Standards Board (IASB) and related
interpretations issued by the IFRS Interpretations Committee
(IFRIC).
We have applied all standards and interpretations that were
efective on and endorsed by the European Union (EU) as at
December 31, 2013. There were no standards or interpretations
impacting our Consolidated Financial Statements for the years
ended December 31, 2013, 2012, and 2011, that were efective
but not yet endorsed. Therefore our Consolidated Financial
Statements comply with both IFRS as issued by the IASB and
with IFRS as endorsed by the EU.
Our Executive Board approved the Consolidated Financial
Statements on February 20, 2014, for submission to our
Supervisory Board.
All amounts included in the Consolidated Financial Statements
are reported in millions of euros ( millions) except where
otherwise stated. Due to rounding, numbers presented through-
out this document may not add up precisely to the totals
we provide and percentages may not precisely refect the
absolute fgures.
(2) SCOpE OF COnSOlIDAtIOn
The Consolidated Financial Statements include SAP AG and
all subsidiaries of SAP AG.
The following table summarizes the changes in the number of
entities included in the Consolidated Financial Statements.
Entities Consolidated in the Financial Statements
German Foreign Total
December 31, 2011 23 176 199
Additions 4 92 96
Disposals 5 23 28
December 31, 2012 22 245 267
Additions 1 24 25
Disposals 1 19 20
December 31, 2013 22 250 272
The additions relate to legal entities added in connection with
acquisitions and foundations. The disposals are due to sales,
mergers and liquidations of legal entities.
In August 2013, we acquired hybris AG, which may afect
comparability of our 2013 Consolidated Financial Statements
with our 2012 and 2011 Consolidated Financial Statements. For
more information about our business combinations and the
efect on our Consolidated Financial Statements, see Note (4).
Notes to the Consolidated
as expense in the periods in which the costs are incurred
and the services are received, with the expense being classifed
as general and administration expense.
The excess of the consideration transferred in a business
combination over the fair value of the identifable net assets
acquired is recorded as goodwill.
With respect to at-equity investments, the carrying amount of
goodwill is included in the carrying amount of the investment.
Foreign Currencies
Assets and liabilities of our foreign subsidiaries that use
a functional currency other than the euro are translated at the
closing rate at the date of the Statement of Financial Position.
Income and expenses are translated at average rates of
exchange computed on a monthly basis. All resulting exchange
diferences are recognized in other comprehensive income.
Exchange diferences from monetary items denominated in
foreign currency transactions that are part of a long-term
investment (that is, settlement is neither planned nor likely to
occur in the foreseeable future) are also included in other
comprehensive income. When a foreign operation is disposed
of, liquidated, or abandoned, the foreign currency translation
adjustments applicable to that entity are reclassifed from
other comprehensive income to proft or loss.
(3) SummAry OF SIGnIFICAnt ACCOuntInG pOlICIES
(3a) bases of measurement
The Consolidated Financial Statements have been prepared on
the historical cost basis except for the following:
Derivative fnancial instruments, available-for-sale fnancial
assets, and liabilities for cash-settled share-based payments
are measured at fair value.
Monetary assets and liabilities denominated in foreign
currencies are translated at period-end exchange rates.
Post-employment benefts are measured according to IAS 19
(Employee Benefts) as described in Note (18a).
Where applicable, information about the methods and assump-
tions used in determining the respective measurement bases
is disclosed in the Notes specifc to that asset or liability.

(3b) relevant Accounting policies
Business Combinations and Goodwill
Business combinations are accounted for using the acquisition
method as at the closing date, which is the date on which we
obtain control of the acquiree. The consideration transferred in
an acquisition is measured at the fair value of the assets trans-
ferred and liabilities incurred at the date of transfer of control.
Settlements of pre-existing relationships are not included in
the consideration transferred. Such amounts are recognized in
proft and loss. Identifable assets acquired and liabilities
assumed in a business combination (including contingent
consideration) are measured at their acquisition date fair values.
Changes in contingent consideration classifed as a liability at
the acquisition date are recognized in proft and loss unless
they related to facts that existed at the measurement date that
we become aware of during the measurement period. We
decide on a transaction-by-transaction basis whether to
measure the non-controlling interest in the acquiree either at
fair value or at the proportionate share of the acquirees
identifable net assets. Acquisition-related costs are accounted
are translated into euros using the exchange rates in efect
at the time of the respective transaction. The efect of
exchange rate changes on cash is reported in a separate line
item in the Consolidated Statements of Cash Flows.
Any goodwill arising from the acquisition of a foreign operation
and any fair value adjustments to the carrying amounts of
assets and liabilities arising from the acquisition are treated as
assets and liabilities of the foreign operation and translated
at the respective closing rates.
The exchange rates of key currencies afecting the Company
were as follows:
Exchange Rates
Equivalent to 1
Closing Rate as at December 31, Annual Average Exchange Rate
2013 2012 2013 2012 2011
U.S. dollar USD 1.3791 1.3194 1.3301 1.2862 1.3863
Pound sterling GBP 0.8337 0.8161 0.8482 0.8104 0.8656
Japanese yen JPY 144.72 113.61 130.21 103.05 110.17
Swiss franc CHF 1.2276 1.2072 1.2302 1.2055 1.2299
Canadian dollar CAD 1.4671 1.3137 1.3710 1.2843 1.3739
Australian dollar AUD 1.5423 1.2712 1.3944 1.2419 1.3436
On initial recognition, foreign currency transactions are
recorded in the respective functional currencies of Group
entities by applying to the foreign currency amount the
exchange rate at the date of the transaction. Monetary assets
and liabilities that are denominated in foreign currencies
are remeasured at the period-end closing rate. Resulting
exchange diferences are recognized, in the period in which
they arise, in other non-operating expense.
Operating cash fows of foreign subsidiaries are translated into
euros using average rates of exchange computed on a monthly
basis. Investing and fnancing cash fows of foreign subsidiaries
Revenue Recognition
We derive our revenue from fees charged to our customers for
(a) licenses to our on-premise software products, (b) the use
of our hosted cloud subscription software oferings and (c)
support, consulting, development, training, and other services.
The majority of our software arrangements include support
services, and many also include professional services and
other elements.
Software and software-related service revenue, as shown in our
Consolidated Income Statements, is the sum of our software
revenue, our support revenue and our cloud subscriptions and
support revenue. Professional services and other service
revenue as shown in our Consolidated Income Statements is
the sum of our consulting revenue and other service revenue.
Other service revenue as shown in our Consolidated Income
Statements mainly consists of revenue from training services,
messaging services, and SAP marketing events. Revenue
information by segment and geographic region is disclosed in
Note (28).
We usually sell or license on-premise software on a perpetual
basis. Occasionally, we license on-premise software for a
specifed period of time. Revenue from short-term time-based
licenses, which usually include support services during the
license period, is recognized ratably over the license term.
Revenue from multi-year time-based licenses that include
support services, whether separately priced or not, is
recognized ratably over the license term unless a substantive
support service renewal rate exists; if this is the case, the amount
allocated to the delivered software is recognized as software
revenue based on the residual method once the basic criteria
described above have been met.
In general, our software license agreements do not include
acceptance-testing provisions. If an arrangement allows
for customer acceptance-testing of the software, we defer
revenue until the earlier of customer acceptance or when
the acceptance right lapses.
We usually recognize revenue from on-premise software
arrangements involving resellers on evidence of sell-through by
the reseller to the end-customer, because the infow of the
economic benefts associated with the arrangements to us is
not probable before sell-through has occurred.
Sometimes we enter into customer-specifc on-premise software
development agreements. We recognize software revenue in
connection with these arrangements using the percentage-of-
completion method based on contract costs incurred to date
as a percentage of total estimated contract costs required
to complete the development work. If we do not have a sufc-
ient basis to reasonably measure the progress of completion or
to estimate the total contract revenue and costs, revenue is
recognized only to the extent of the contract costs incurred for
which we believe recoverability to be probable. When it becomes
probable that total contract costs exceed total contract
revenue in an arrangement, the expected losses are recognized
immediately as an expense based on the costs attributable
to the contract.
If, for any of our product or service oferings, we determine at
the outset of an arrangement that the amount of revenue
cannot be measured reliably, we conclude that the infow of
economic benefts associated with the transaction is not
probable, and we defer revenue recognition until the arrangement
fee becomes due and payable by the customer. If, at the outset
of an arrangement, we determine that collectability is not
probable, we conclude that the infow of economic benefts
associated with the transaction is not probable, and we defer
revenue recognition until the earlier of when collectability
becomes probable or payment is received. If collectability
becomes not probable before all revenue from an arrangement
is recognized, we recognize revenue only to the extent of the
fees that are successfully collected unless collectability
becomes probable again. If a customer is specifcally identifed
as a bad debtor, we stop recognizing revenue from the
customer except to the extent of the fees that have already
been collected.
We account for out-of-pocket expenses invoiced by SAP and
reimbursed by customers as support, cloud subscription and
support, consulting, or other service revenue, depending on
the nature of the service for which the out-of-pocket expenses
were incurred.
Software revenue represents fees earned from the sale
or license of software to customers for use on the customers
premises, in other words, where the customer has the right to
take possession of the software for installation on the
customers premises (on-premise software). Revenue from
the sale of perpetual licenses of our standard software
products is recognized in line with the requirements for selling
goods stated in IAS 18 (Revenue) when evidence of an
arrangement exists, delivery has occurred, the risks and
rewards of ownership have been transferred to the customer,
the amount of revenue and associated costs can be measured
reliably, and collection of the related receivable is probable.
The fee of the sale is recognized net of returns and allowances,
trade discounts, and volume rebates.
Revenue from cloud subscriptions and support represents
fees earned from providing customers with:
The right to use software in a cloud-based-infrastructure
(hosting) provided by SAP, where the customer does
not have the right to terminate the hosting contract and take
possession of the software to run it on the customers own
IT infrastructure or by a third party hosting provider without
signifcant penalty, or
Additional premium support beyond the standard support
which is included in SAPs basic cloud subscription fees, or
Hosting services and related application management
services for software hosted by SAP, where the customer
has the right to terminate the hosting contract and take
possession of the software without signifcant penalty.
Cloud subscription and support revenue is recognized as the
services are performed. Where a fxed fee is agreed for
the right to continuously access and use a cloud ofering for
a certain term, the fee is recognized ratably over the term
covered by the fxed fee. Fees that are based on actual trans-
action volumes are recognized as the transactions occur.
Revenue from consulting primarily represents fees earned
from providing customers with consulting services which
primarily relate to the installation and confguration of our
software products and cloud oferings. Usually, our consulting
contracts do not involve signifcant production, modifcation,
or customization of software and the related revenue is
recognized as the services are provided using the percentage-
of-completion method of accounting as outlined above.
On-premise software subscription contracts combine software
and support service elements, as under these contracts the
customer is provided with current software products, rights to
receive unspecifed future software products, and rights to
product support during the on-premise software subscription
term. Customers pay a periodic fee for a defned subscription
term, and we recognize such fees ratably over the term of
the arrangement beginning with the delivery of the frst product.
Revenue from on-premise software subscription contracts
is allocated to the software revenue and support revenue line
items in our Consolidated Income Statements.
On-premise software rental contracts also combine software
and support service elements. Under such contracts the
customer is provided with current software products and
product support, but not with the right to receive unspecifed
future software products. Customers pay a periodic fee over
the rental term. We recognize fees from software rental
contracts ratably over the term of the arrangement. Revenue
from rental contracts is allocated to the software revenue
and support revenue line items in our Consolidated Income
Statements.
Support revenue represents fees earned from providing
customers with unspecifed future software updates, upgrades,
and enhancements, and technical product support services
for on-premise software products. We recognize support revenue
based on our performance under the support arrangements.
Under our major support services our performance obligation
is to stand ready to provide technical product support and
to provide unspecifed updates and enhancements on a when-
and-if-available basis. For these support services we recognize
revenue ratably over the term of the support arrangement.
We do not sell separately technical product support or unspeci-
fed software upgrades, updates, and enhancements. Accordingly,
we do not distinguish within software and software-related
service revenue or within cost of software and software-related
services the amounts attributable to technical support
services and unspecifed software upgrades, updates, and
enhancements.
We derive the company-specifc objective evidence of fair value
for our support services from the rates charged to renew the
support services annually after an initial period. Such renewal
rates generally represent a fxed percentage of the discounted
software license fee charged to the customer. The majority of
our customers renew their annual support service contracts
at these rates.
Where company-specifc objective evidence of fair value or
third-party evidence of selling price cannot be established
for deliverables, we determine the fair value of the respective
element by estimating its stand-alone selling price. This is
generally the case for our cloud subscription oferings.
Estimated stand-alone selling price (ESP) for our cloud
subscription oferings is determined based on the rates agreed
with the individual customers to apply if and when the sub-
scription arrangement renews. We determine ESP by consid-
ering multiple factors which include, but are not limited to,
the following: i) substantive renewal rates contained within an
arrangement for cloud subscription deliverables; ii) gross
margin objectives and internal costs for services; and
iii) pricing practices, market conditions, and competitive
landscape.
We apply the residual method of revenue recognition when
company-specifc objective evidence of fair value or estimated
stand-alone selling price exists for all of the undelivered
elements in the arrangement, but does not exist for one or
more delivered elements. This is generally the case in multiple
element arrangements involving on-premise software and
services related to on-premise software where company-
specifc objective evidence of fair value or estimated stand-
alone selling price exists for all the services in the arrangement
(for example, support services, consulting services, cloud
subscription services), but does not exist for the on-premise
software. Under the residual method, revenue is allocated to all
undelivered elements in the amount of their respective fair
values and the remaining amount of the arrangement fee is
allocated to the delivered element. With this policy we have
considered the guidance provided by FASB ASC Subtopic 985-
605, Software Revenue Recognition (FASB ASC 985-605),
where applicable, as authorized by IAS 8 Accounting Policies,
Changes in Accounting Estimates and Errors (IAS 8).
Revenue from other services represents fees earned
from providing customers with training services, application
management services for software not hosted by SAP,
messaging services, SAP marketing events, and referral
services.
Training services provide educational services to customers
and partners regarding the use of our software products.
We recognize training revenue and application management
services as the services are rendered.
Messaging services primarily comprise the transmission of
electronic text messages from one mobile phone provider
to another. We recognize revenue from message services
based upon the number of messages successfully processed
and delivered. Revenue from fxed-price messaging
arrangements is recognized ratably over the contractual
term of the arrangement.
Revenue from marketing events hosted by SAP, for which
SAP sells tickets to its customers, is recognized when
the marketing event is completed.
Referral services comprise referring customers to partners.
We recognize revenue from referral services upon providing
the referral.
The majority of our arrangements contain multiple elements.
We account for software, support, cloud subscription,
consulting and other service deliverables as separate units of
account and allocate revenue based on fair value. Fair value
is determined by establishing either company-specifc objective
evidence, or an estimated stand-alone selling price.
The revenue amounts allocated to the individual elements
are recognized when the revenue recognition criteria described
above have been met for the respective element.
We generally determine the fair value of each element based
on its company-specifc objective evidence of fair value, which
is the price charged when that element is sold separately or,
for elements not yet sold separately, the price established by
our management if it is probable that the price will not change
before the element is sold separately.
Cost of Software and Software-Related Services
Cost of software and software-related services includes the
cost incurred in producing the goods and providing the
services that generate software and software-related service
revenue. Consequently, this line item includes primarily
employee expenses relating to these services, amortization of
acquired intangibles, fees for third-party licenses, shipping
and ramp-up cost.
Cost of Professional Services and Other Services
Cost of professional services and other services includes
the cost incurred in providing the services that generate
professional service and other service revenue including
messaging revenues. The item also includes sales and
marketing expenses related to our professional services and
other services that result from sales and marketing eforts
that cannot be clearly separated from providing the services.
In multiple element arrangements where company-specifc
objective evidence of fair value or an estimated stand-alone
selling price exists for all elements, revenue is allocated to
the elements based on their relative fair values (relative fair
value method).
Our consideration of whether on-premise software, cloud
subscriptions, consulting or other services are to be accounted
for separately or as one combined element of the arrangement
depends on:
Whether the arrangement involves signifcant production,
modifcation, or customization of the software or cloud
subscription, and
Whether the services are not available from third-party
vendors and are therefore deemed essential to the software.
If neither of the above is the case, revenue for the on-premise
software or cloud subscription element, and the other
elements, are recognized separately. In contrast, if one or both
of the above applies, the respective elements of the arrange-
ment are combined and accounted for as a single unit of
account, and the portion of the arrangement fee allocated to
this single unit of account is recognized using the percentage-
of-completion method, as outlined above, or over the cloud
subscription term, if applicable, depending on which service
term is longer.
We consider FASB ASC 985-605 in our accounting for options
that entitle the customer to purchase, in the future, additional
on-premise software. We allocate revenue to future incremental
discounts whenever customers are granted the right to license
additional on-premise software at a higher discount than the
one given within the initial software license arrangement, or to
purchase or renew services at rates below the fair values
established for these services.
Our contributions to resellers that allow our resellers to
execute qualifed and approved marketing activities are recog-
nized as an ofset to revenue, unless we obtain a separate
identifable beneft for the contribution, and the fair value of the
beneft is reasonably estimable.
Leases
We are a lessee of property, plant, and equipment, mainly
buildings, hardware, and vehicles, under operating leases that
do not transfer to us the substantive risks and rewards of
ownership. Rent expense on operating leases is recognized on
a straight-line basis over the life of the lease including renewal
terms if, at inception of the lease, renewal is reasonably
assured.
Some of our operating leases contain lessee incentives, such
as up-front payments of costs or free or reduced periods of
rent. The incentives are amortized over the life of the lease and
the rent expense is recognized on a straight-line basis over
the life of the lease. The same applies to contractually-agreed
future increases of rents.
Income Tax
Deferred taxes are accounted for under the liability method. We
recognize deferred tax assets and liabilities for the future tax
consequences attributable to diferences between the carrying
amounts of existing assets and liabilities in the Consolidated
Statements of Financial Position and their respective tax bases
and on the carryforwards of unused tax losses and unused tax
credits. Deferred tax assets are recognized to the extent that it
is probable that taxable proft will be available against which
the deductible temporary diferences, unused tax losses, and
unused tax credits can be utilized.
Deferred tax assets and liabilities are measured at the tax
rates that are expected to apply to the period when the asset is
realized or the liability is settled, based on tax rates and tax
laws that have been enacted or substantively enacted by the
end of the reporting period. The efect on deferred tax assets
and liabilities of a change in tax rates is recognized in proft or
loss, unless related to items recognized in other comprehen-
sive income or directly in equity, in the period of (substantive)
enactment.
Research and development includes the costs incurred by
activities related to the development of software solutions
(new products, updates, and enhancements) including
resource and hardware costs for the development systems.
Development activities involve the application of research
fndings or other knowledge to a plan or design of new or
substantially improved software products before the start of
commercial use. Development expenditures are capitalized
only if all of the following criteria are met:
The development cost can be measured reliably.
The product is technically and commercially feasible.
Future economic benefts are probable.
We intend to complete development and market the product.
We have determined that the conditions for recognizing
internally generated intangible assets from our software
development activities are not met until shortly before
the products are available for sale. Development costs incurred
after the recognition criteria are met have not been material.
Consequently, all research and development costs are
expensed as incurred.
Sales and Marketing
Sales and marketing includes costs incurred for the selling and
marketing activities related to our software solutions, software-
related service portfolio, and cloud business.
General and Administration
General and administration includes costs related to fnance
and administrative functions, human resources, and general
management as long as they are not directly attributable to
one of the other operating expense line items.
For the share-based payments that are settled by paying cash
rather than by issuing equity instruments, a provision is
recorded for the rights granted refecting the vested portion of
the fair value of the rights at the end of each reporting period.
Personnel expense is recognized over the period the benefci-
aries are expected to perform the related service (vesting
period), with a corresponding increase in provisions. Cash-
settled awards are remeasured to fair value at the end of each
reporting date until the award is settled. Any changes in the
fair value of the provision are recognized as personnel expense
in proft or loss. The amount of unrecognized compensation
expense is dependent on the future price of our ordinary
shares which we cannot reasonably predict.
Where we hedge our exposure to cash-settled awards, changes
in the fair value of the respective hedging instruments are
also recognized as personnel expense in proft or loss. The fair
values for hedged programs are based on market data
refecting current market expectations.
For more information about our share-based payments,
see Note (27).
Other Components of Equity
Other components of equity include:
Exchange diferences arising from the translation of the
fnancial statements of our foreign operations as well as the
exchange diferences from intercompany long-term
monetary items for which settlement is neither planned
nor likely to occur in the foreseeable future
Unrealized gains and losses on available-for-sale fnancial
assets
Gains and losses on cash fow hedges comprising the net
change in fair value of the efective portion of the respective
cash fow hedges that have not yet impacted proft or loss
The carrying amount of a deferred tax asset is reviewed at the
end of each reporting period and is reduced to the extent
that it is no longer probable that sufcient taxable proft will be
available to allow the beneft of part or all of the deferred tax
assets to be utilized.
We have aligned the presentation of prior period comparative
amounts for tax assets and tax liabilities with the current
period presentation by ofsetting certain current tax assets
against certain current tax liabilities and certain deferred
tax assets against certain deferred tax liabilities which were not
ofset previously. The impact of this ofsetting on the compara-
tive amounts was to decrease both, current tax assets and
current tax liabilities as of December 31, 2012, by 70 million
and to decrease both, deferred tax assets and deferred tax
liabilities as of December 31, 2012, by 353 million.
Management concluded that these adjustments were
immaterial to the consolidated fnancial statements.
Share-Based Payments
Share-based payments cover cash-settled and equity-settled
awards issued to our employees. The fair values of both equity-
settled and cash-settled awards are initially measured at grant
date using an option-pricing model.
The fair value of equity-settled awards is not subsequently
remeasured. The grant date fair value of equity-settled awards
is recognized as personnel expense in proft or loss over the
period in which the employees become unconditionally entitled
to the rights, with a corresponding increase in share premium.
The amount recognized as an expense is adjusted to refect the
actual number of equity-settled awards that ultimately vest.
We grant our employees discounts on certain share-based
payments. Since those discounts are not dependent on future
services to be provided by our employees, the discount is
recognized as an expense when the rights are granted.
value of the expected future cash fows. The subsequent
measurement depends on the classifcation of our fnancial
assets to the following categories according to IAS 39:
Loans and receivables: Loans and receivables are non-
derivative fnancial assets with fxed or determinable payments
that are neither quoted in an active market nor intended to
be sold in the near term. This category comprises trade
receivables, receivables and loans included in other fnancial
assets, and cash and cash equivalents. We carry loans and
receivables at amortized cost less impairment losses. For
further information on trade receivables, see the Trade and
Other Receivables section.
Available-for-sale fnancial assets: Available-for-sale fnancial
assets are non-derivative fnancial assets that are not assigned
to either of the two other categories and mainly include
equity investments and debt investments. Available-for-sale
fnancial assets are measured at fair value, with changes
in fair value being reported net of tax in other comprehensive
income. Fair value changes are not recognized in proft or loss
until the assets are sold or impaired.
Financial assets at fair value through proft or loss: Financial
assets at fair value through proft or loss comprise only
those fnancial assets that are held for trading, as we do not
designate fnancial assets at fair value through proft
or loss on initial recognition. This category solely contains
embedded and freestanding derivatives with positive fair
values. Except where hedge accounting is applied, all
changes in the fair value of fnancial assets in this category
are immediately recognized in proft or loss. For more
information about derivatives, see the Derivatives section.
All fnancial assets not accounted for at fair value through
proft or loss are assessed for impairment at each reporting
date or if we become aware of objective evidence of impair-
ment as a result of one or more events that indicate that the
carrying amount of the asset may not be recoverable. Objective
evidence includes but is not limited to a signifcant or
prolonged decline of the fair value below its carrying amount,
a high probability of insolvency, or a material breach of
contract by the issuer such as a signifcant delay or a shortfall
Treasury Shares
Treasury shares are recorded at acquisition cost and are
presented as a deduction from total equity. Gains and losses
on the subsequent reissuance of treasury shares are credited
or charged to share premium on an after-tax basis. On
cancellation of treasury shares, any excess of their carrying
amount over the calculated par value is charged to retained
earnings.
Earnings per Share
We present basic and diluted earnings per share (EPS). Basic
earnings per share is determined by dividing proft after
tax attributable to equity holders of SAP AG by the weighted
average number of ordinary shares outstanding during the
respective year. Diluted earnings per share refect the potential
dilution assuming the conversion of all dilutive potential
ordinary shares.
Financial Assets
Our fnancial assets comprise cash and cash equivalents
(highly liquid investments with original maturities of three
months or less), loans and receivables, acquired equity
and debt investments, and derivative fnancial instruments
(derivatives) with positive fair values.
These assets are recognized and measured in accordance with
IAS 39 (Financial Instruments: Recognition and Measurement).
Accordingly, fnancial assets are recognized in the
Consolidated Statements of Financial Position if we have a
contractual right to receive cash or other fnancial assets from
another entity. Regular way purchases or sales of fnancial
assets are recorded at the trade date. Financial assets are
initially recognized at fair value plus, in the case of fnancial
assets not at fair value through proft or loss, directly
attributable transaction costs. Interest-free or below-market-
rate loans and receivables are initially measured at the present
Derivatives
We account for derivatives and hedging activities in
accordance with IAS 39 at fair value.
Derivatives Without Designated Hedge Relationship
Many transactions constitute economic hedges, and therefore
contribute efectively to the securing of fnancial risks but do
not qualify for hedge accounting under IAS 39. For the hedging
of currency risks inherent in foreign currency denominated
and recognized monetary assets and liabilities, we do not
designate our held-for-trading derivative fnancial instruments
as accounting hedges, as the profts and losses from the
underlying transactions are recognized in proft or loss in the
same periods as the profts or losses from the derivatives.
Embedded Derivatives
We occasionally have contracts that require payment streams
in currencies other than the functional currency of either party
to the contract. Such embedded foreign currency derivatives
are separated from the host contract and accounted for
separately if the following are met:
The economic characteristics and risks of the host contract
and the embedded derivative are not closely related.
A separate instrument with the same terms as the embedded
derivative would meet the defnition of a derivative.
The combined instrument is not measured at fair value
through proft or loss.
Derivatives with Designated Hedge Relationship
We designate derivatives in respect of foreign currency risk or
interest rate risk as cash fow or fair value hedges in a hedging
relationship that qualifes for hedge accounting under IAS 39
and carry them at their fair value. At inception, we designate
and document the hedge relationship, including the nature of
the risk, the identifcation of the hedged item, the hedging
instrument, and how we will assess the hedge efectiveness.
Furthermore, at inception and on an ongoing basis we measure
and document whether the derivatives are highly efective in
in payments due. Impairment losses in the amount of the
diference between an assets carrying amount and the present
value of the expected future cash fows or current fair value,
respectively, are recognized in fnancial income, net. For
available-for-sale fnancial assets such impairment losses
directly reduce an assets carrying amount, while impairments
on loans and receivables are recorded using allowance accounts.
Account balances are charged of against the respective
allowance after all collection eforts have been exhausted and
the likelihood of recovery is considered remote. Impairment
losses are reversed if the reason for the original impairment
loss no longer exists. No such reversals are made for available-
for-sale equity investments.
Income/expenses and gains/losses on fnancial assets consist
of impairment losses and reversals, interest income and
expenses, dividends, and gains and losses from the disposal of
such assets. Dividend income is recognized when earned.
Interest income is recognized based on the efective interest
method. Neither dividend nor interest income is included in net
gains/losses at the time of disposal of an asset. Financial assets
are derecognized when contractual rights to receive cash
fows from the fnancial assets expire or the fnancial assets are
transferred together with all material risks and benefts.
b) Fair Value Hedge
We apply fair value hedge accounting for hedging certain
of our fxed rate fnancial liabilities.
Changes in the fair value of derivatives that are designated and
qualify as fair value hedges are recorded in proft or loss,
together with any changes in the fair value of the hedged asset
or liability that are attributable to the hedged risk (basis
adjustment). The change in the fair value of the derivatives and
the change in the hedged item attributable to the hedged
risk are recognized in proft or loss in the line item relating to
the hedged item.
If the hedge no longer meets the criteria for hedge accounting,
the basis adjustment to the carrying amount of a hedged
item for which the efective interest method is used is amortized
over the period to maturity.
Valuation and testing of Efectiveness
The efectiveness of the hedging relationship is tested
prospectively and retrospectively. Prospectively, we apply the
critical terms match for our foreign currency hedges as
currencies, maturities, and the amounts are identical for the
forecasted transactions and the spot element of the forward
exchange rate contract or intrinsic value of the currency
options, respectively. For interest rate swaps, we also apply the
critical terms match as the notional amounts, currencies,
maturities, basis of the variable legs or fxed legs, respectively,
reset dates, and the dates of the interest and principal
payments are identical for the debt instrument and the
corresponding interest rate swaps. Therefore, over the life of
the hedging instrument, the changes in the designated
components of the hedging instrument will ofset the impact
of fuctuations of the underlying hedged items.
The method of retrospectively testing efectiveness depends
on the type of the hedge as described further below:
ofsetting the changes in the fair values or cash fows of the
hedged item attributable to the hedged risk. The accounting
for changes in fair value of the hedging instrument depends
on the type of the hedge and the efectiveness of the hedging
relationship. For more information about our hedges, see
Note (25).
a) Cash Flow Hedge
In general, we apply cash fow hedge accounting to the foreign
currency risk of highly probable forecasted transactions and
interest rate risk on variable rate fnancial liabilities.
The efective portion of changes in the fair value of the deri-
vative instrument determined to be an efective hedge is
recognized in other comprehensive income and presented
within other components of equity from cash fow hedges.
With regard to foreign currency risk, this relates to the spot
price and the intrinsic values of the derivatives designated and
qualifying as cash fow hedges, while gains and losses on
the interest element and on those time values excluded from
the hedging relationship as well as the inefective portion of
gains or losses are recognized in proft or loss. We subsequently
reclassify the efective portion of gains or losses from other
comprehensive income to proft or loss when the hedged
transaction afects proft or loss.
If the hedge no longer meets the criteria for hedge accounting,
any cumulative gain or loss recognized in other comprehensive
income at that time remains in other comprehensive income
until the forecasted transaction is ultimately recognized in proft
or loss. When a forecasted transaction is no longer expected
to occur, the cumulative gain or loss existing in other compre-
hensive income at that time is immediately transferred to proft
or loss.
Account balances are written of, that is, charged of against
the allowance after all collection eforts have been exhausted
and the likelihood of recovery is considered remote.
In our Consolidated Income Statements, expenses from
recording bad debt allowances for a portfolio of trade receiva-
bles are classifed as other operating income, net, whereas
expenses from recording bad debt allowances for specifc
customer balances are classifed as cost of software and
software-related services or cost of professional services and
other services, depending on the transaction from which
the respective trade receivable results. Sales allowances are
recorded as an ofset to the respective revenue item.
Included in trade receivables are unbilled receivables related
to fxed-fee and time-and-material consulting arrangements
for contract work performed to date.
Other Non-Financial Assets
Other non-fnancial assets are recorded at amortized cost,
which approximates fair value due to their short-term nature.
Intangible Assets
We classify intangible assets according to their nature and
use in our operation. Software and database licenses consist
primarily of technology for internal use, whereas acquired
technology consists primarily of purchased software to be
incorporated into our product oferings and in-process
research and development. Customer relationship and other
intangibles consist primarily of customer contracts and
acquired trademark licenses.
a) Cash Flow Hedge
Retrospectively, efectiveness is tested on a cumulative basis
applying the dollar ofset method by using the hypothetical
derivative method. Under this approach, the change in fair value
of a constructed hypothetical derivative with terms refecting
the relevant terms of the hedged item is compared to the
change in the fair value of the hedging instrument employing
its relevant terms. The hedge is deemed highly efective if
the results are within the range 80% to 125%.
b) Fair Value Hedge
Retrospectively, efectiveness is tested using statistical methods
in the form of a regression analysis by which the validity and
extent of the relationship between the change in value of the
hedged items as the independent and the fair value change
of the derivatives as the dependent variable is determined. The
hedge is deemed highly efective if the determination coefcient
between the hedged items and the hedging instruments
exceeds 0.8 and the slope coefcient lies within a range of 0.8
to 1.25.
Trade and Other Receivables
Trade receivables are recorded at invoiced amounts less sales
allowances and allowances for doubtful accounts. We record
these allowances based on a specifc review of all signifcant
outstanding invoices. When analyzing the recoverability of
our trade receivables, we consider the following factors:
First, we consider the fnancial solvency of specifc
customers and record an allowance for specifc customer
balances when we believe it is probable that we will not
collect the amount due according to the contractual terms
of the arrangement.
Second, we evaluate homogenous portfolios of trade receiva-
bles according to their default risk primarily based on the
age of the receivable and historical loss experience, but also
taking into consideration general market factors that might
impact our trade receivable portfolio. We record a general
bad debt allowance to record impairment losses for a
portfolio of trade receivables when we believe that the age of
the receivables indicates that it is probable that a loss has
occurred and we will not collect some or all of the amounts due.
Useful Lives of Property, Plant, and Equipment
Buildings 25 to 50 years
Leasehold improvements Based on the lease contract
Information technology equipment 3 to 5 years
Office furniture 4 to 20 years
Automobiles 4 to 5 years
Leasehold improvements are depreciated using the straight-
line method over the shorter of the term of the lease or the
useful life of the asset. If a renewal option exists, the term used
refects the additional time covered by the option if exercise
is reasonably assured when the leasehold improvement is frst
put into operation.
Impairment of Goodwill and Non-Current Assets
We test goodwill for impairment at least annually and when
events occur or changes in circumstances indicate that the
recoverable amount of a cash-generating unit to which goodwill
has been allocated is less than its carrying value.
The recoverable amount of goodwill is estimated each year at
the same time. The goodwill impairment test is performed
at the level of our operating segments since there are no lower
levels in SAP at which goodwill is monitored for internal
management purposes.
For the purpose of impairment testing, goodwill acquired in
a business combination is allocated to the operating segments
that are expected to beneft from the synergies of the com-
bination. If the carrying amount of the operating segment to
which the goodwill is allocated exceeds the recoverable amount,
an impairment loss on goodwill allocated to this operating
segment is recognized. The recoverable amount is the higher
of the operating segments fair value less costs of disposal and
its value in use. Fair value less costs of disposal is the price
that would be received to sell an asset or cash generating unit
or paid to transfer a liability in an orderly transaction between
market participants at the measurement date, less the cost of
All our purchased intangible assets other than goodwill have
fnite useful lives. They are initially measured at acquisition
cost and subsequently amortized either based on expected
usage or on a straight-line basis over their estimated useful
lives ranging from two to 16 years.
We recognize acquired in-process research and development
projects as an intangible asset separate from goodwill if a
project meets the defnition of an asset. Amortization for these
intangible assets starts when the projects are complete
and the developed software is taken to the market. We typically
amortize these intangibles over fve to seven years.
Amortization expenses of intangible assets are classifed
as cost of software and software-related services, cost of
professional services and other services, research and
development, sales and marketing, and general and adminis-
tration depending on their use.
Property, Plant, and Equipment
Property, plant, and equipment are carried at acquisition cost
plus the fair value of related asset retirement costs, if any and if
reasonably estimable, and less accumulated depreciation.
Interest incurred during the construction of qualifying assets is
capitalized and amortized over the related assets estimated
useful lives.
Property, plant, and equipment are depreciated over their
expected useful lives, generally using the straight-line method.
Contingent Assets
We carry insurance policies to, among other things, ofset
the expenses associated with defending against litigation
matters as well as other risks. We recognize the respective
reimbursements in proft or loss when it is virtually certain
that the reimbursement will be received and retained by us.
Liabilities
Financial liabilities
Financial liabilities include trade and other payables, bank
loans, issued bonds, private placements and other fnancial
liabilities which comprise derivative and non-derivative
fnancial liabilities.
Financial liabilities are recognized and measured in accordance
with IAS 39. Accordingly, they are recognized in the Consolidated
Financial Statements if we have a contractual obligation to
transfer cash or another fnancial asset to another party. Finan-
cial liabilities are initially recognized at fair value. In the case
of fnancial liabilities not measured at fair value through proft
or loss, the initial measurement includes directly attributable
transaction costs. If material, fnancial liabilities are discounted
to present value based on prevailing market rates adjusted for
credit risk, with the discount being recognized over time as
interest expense. The subsequent measurement depends on
the allocation of fnancial liabilities to the following categories
according to IAS 39:
Financial liabilities at fair value through proft or loss only
comprise those fnancial liabilities that are held for trading,
as we do not designate fnancial liabilities at fair value
through proft or loss on initial recognition. This category
solely contains embedded and other derivatives with
negative fair values, except where hedge accounting is
applied. All changes in the fair value of fnancial liabilities
in this category are immediately recognized in proft
or loss. For more information about derivatives, see the
Derivatives section.
Financial liabilities at amortized cost include all non-
derivative fnancial liabilities which are measured
at amortized cost using the efective interest method.
disposal. Value in use is the present value of the future cash
fows expected to be derived from an asset or cash-generating
unit. Impairment losses on goodwill are not reversed in future
periods.
We review non-current assets, such as property, plant, equip-
ment, and intangible assets for impairment whenever events or
changes in circumstances indicate that the carrying amount
of an asset or group of assets may not be recoverable. Intangible
assets not yet available for use are tested for impairment
annually.
For the purpose of impairment testing, assets that cannot be
tested individually are grouped together into the smallest
group of assets that generates cash infows from continuing
use that are largely independent of the cash infows of other
assets or groups of assets. If assets do not generate cash
infows that are largely independent of those from other assets
or groups of assets, the impairment test is not performed at
an individual asset level; instead, it is performed at the level of
the cash-generating unit (CGU) to which the asset belongs.
An impairment loss is recognized if the carrying amount of
an asset or its CGU exceeds its estimated recoverable amount.
The recoverable amount of an asset or its CGU is the greater
of its value in use and its fair value less costs of disposal. In
assessing value in use, the estimated future cash fows are
discounted to their present value using a pre-tax discount rate
that refects current market assessments of the time value
of money and the risks specifc to the asset.
Impairment losses are presented in other operating income,
net in proft or loss.
Post-Employment Benets
We measure our pension-beneft liabilities and other post-
employment benefts based on actuarial computations using
the projected-unit-credit method in accordance with IAS 19.
The assumptions used to calculate pension liabilities and
costs are disclosed in Note (18a). As a result of the actuarial
calculation for each plan, we recognize an asset or liability for
the overfunded or underfunded status of the respective defned
beneft plan. We classify a portion of the liability as current
(determined on a plan-by-plan basis) if the amount by which
the actuarial present value of benefts included in the beneft
obligation payable within the next 12 months exceeds the fair
value of plan assets. Remeasurements of the defned beneft
obligation (DBO) or plan assets resulting from demographic
and fnancial data diferent than originally assumed and from
changes in assumptions can result in actuarial gains and
losses. We recognize all such remeasurements immediately in
retained earnings through other comprehensive income. They
will not be reclassifed to proft or loss in subsequent periods.
Net interest expense and other expenses related to defned
beneft plans are recognized in employee expenses.
SAPs pension benefts are classifed as defned contribution
plans if the payment to a separate fund relieves SAP of all
obligations from the pension plan. Obligations for contributions
to defned contribution pension plans are recognized as an
expense in proft or loss when paid or due.
Certain of our foreign subsidiaries are required to provide
termination indemnity benefts to their employees regardless
of the reason for termination (retirement, voluntary, or
involuntary). We treat these plans as defned beneft pension
plans if the substance of the post-employment plan is a
pension-type arrangement. Most of these arrangements provide
the employee with a one-time payout based on compensation
levels, age, and years of service on termination independent of
the reason (retirement, voluntary, or involuntary).
Expenses and gains/losses on fnancial liabilities consist of
interest expense, and gains and losses from the disposal
of such liabilities. Interest expense is recognized based on the
efective interest method.
Financial liabilities are derecognized when the contractual
obligation is discharged, canceled, or has expired.
non-Financial liabilities
Other non-fnancial liabilities with fxed or determinable
payments that are not quoted in an active market are mainly
the result of obligations to employees and fscal authorities
and are generally measured at amortized cost.
Provisions
Provisions are recorded when all of the following conditions
are met:
It is more likely than not that we have a legal or constructive
obligation to third parties as a result of a past event.
The amount can be reasonably estimated.
It is probable that there will be an outfow of future economic
benefts to settle the obligation, while there may be
uncertainty about the timing or amount of the future
expenditure required in the settlement.
We regularly adjust provisions as further information becomes
available or circumstances change. Non-current provisions
are reported at the present value of their expected settlement
amounts as at the reporting date. Discount rates are regularly
adjusted to current market interest rates.
A provision for restructuring is recognized when we have
approved a detailed and formal restructuring plan and
the restructuring has commenced or has been announced.
Our management periodically discusses these critical
accounting policies with the Audit Committee of the
Supervisory Board.
Revenue Recognition
As described in the Revenue Recognition section of Note (3b),
we do not recognize revenue before persuasive evidence
of an arrangement exists, delivery has occurred, the risks and
rewards of ownership have been transferred to the customer,
the amount of revenue can be measured reliably, and collection
of the related receivable is probable. The determination of
whether the amount of revenue can be measured reliably or
whether the fees are collectible is inherently judgmental as it
requires estimates as to whether and to what extent subse-
quent concessions may be granted to customers and whether
the customer is expected to pay the contractual fees. The
timing and amount of revenue recognition can vary depending
on what assessments have been made.
In most of our revenue-generating arrangements we sell to
the customer more than one product solution or service.
Additionally, we have ongoing relationships with many of our
customers and often enter into several transactions with the
same customer within close proximity in time. We therefore
have to determine the following:
Which arrangements with the same customer are
to be accounted for as one arrangement
Which deliverables under one arrangement are
to be accounted for separately
How to allocate the total arrangement fee to the individual
elements of one arrangement
Deferred Income
Deferred income is recognized as software revenue, support
revenue, cloud subscription and support revenue, consulting
revenue, or other service revenue, depending on the reasons
for the deferral, once the basic applicable revenue recognition
criteria have been met, for example, when the related services
are performed or when the discounts are used.
(3c) management Judgments and Sources of Estimation
uncertainty
The preparation of the Consolidated Financial Statements in
conformity with IFRS requires management to make judgments,
estimates, and assumptions that afect the application of
accounting policies and the reported amounts of assets, liabili-
ties, revenues, and expenses, as well as disclosure of
contingent assets and liabilities.
We base our judgments, estimates, and assumptions on histori-
cal and forecast information, as well as regional and industry
economic conditions in which we or our customers operate,
changes to which could adversely afect our estimates.
Although we believe we have made reasonable estimates about
the ultimate resolution of the underlying uncertainties, no
assurance can be given that the fnal outcome of these matters
will be consistent with what is refected in our assets, liabilities,
revenues, and expenses. Actual results could difer from
original estimates.
The accounting policies that most frequently require us to
make judgments, estimates, and assumptions, and therefore
are critical to understanding our results of operations,
include the following:
Revenue recognition
Valuation of trade receivables
Accounting for share-based payments
Accounting for income tax
Accounting for business combinations
Subsequent accounting for goodwill and other intangibles
Accounting for legal contingencies
Recognition of internally generated intangible assets
from development
Additionally, our revenue for on-premise software contracts
would be signifcantly diferent if we applied a revenue alloca-
tion policy other than the residual method.
Revenue from consulting, other services, and customer-
specifc on-premise software development projects is deter-
mined by applying the percentage-of-completion method.
The percentage-of-completion method requires us to make
estimates about total revenue, total cost to complete
the project, and the stage of completion. The assumptions,
estimates, and uncertainties inherent in determining the
stage of completion afect the timing and amounts of revenue
recognized and expenses reported. If we do not have a
sufcient basis to measure the progress of completion or to
estimate the total contract revenue and costs, revenue
recognition is limited to the amount of contract costs incurred.
The determination of whether a sufcient basis to measure the
progress of completion exists is judgmental. Changes in
estimates of progress towards completion and of contract
revenue and contract costs are accounted for as cumulative
catch-up adjustments to the reported revenue for the
applicable contract.
Valuation of Trade Receivables
As described in the Trade and Other Receivables section in
Note (3b), we account for impairments of trade receivables
by recording sales allowances and allowances for doubtful
accounts on an individual receivable basis and on a portfolio
basis. The assessment of whether a receivable is collectible
is inherently judgmental and requires the use of assumptions
about customer defaults that could change signifcantly.
Judgment is required when we evaluate available information
about a particular customers fnancial situation to determine
whether it is probable that a credit loss will occur and the
amount of such loss is reasonably estimable and thus an
allowance for that specifc account is necessary. Basing the
general allowance for the remaining receivables on our
historical loss experience, too, is highly judgmental, as history
may not be indicative of future development, particularly
The determination of whether diferent arrangements with the
same customer are to be accounted for as one arrangement
is highly judgmental, as it requires us to evaluate whether the
arrangements are negotiated together or linked in any other
way. The timing and amount of revenue recognition can vary
depending on whether two arrangements are accounted for
separately or as one arrangement.
Under an arrangement including on-premise software, or a
cloud subscription, and other deliverables, we do not account
for the on-premise software, or cloud subscription, and the
other deliverables separately if one of the other deliverables
(such as consulting services) is deemed to be essential to
the functionality of the on-premise software, or cloud subscrip-
tion. The determination whether an undelivered element is
essential to the functionality of the delivered element requires
the use of judgment. The timing and amount of revenue recog-
nition can vary depending on how that judgment is exercised,
because revenue may be recognized over a longer service term.
We also do not account separately for diferent deliverables
under an arrangement if we have no basis for allocating
the overall arrangement fee to the diferent elements of the
arrangement. However, we believe that such allocation basis
exists if we can either demonstrate for each undelivered
element of the arrangement a company-specifc fair value, or,
where such company-specifc fair value cannot be established,
if we can reasonably estimate stand-alone selling prices,
as further defned in the Revenue Recognition section of Note
(3b). Judgment is required in the determination of an
appropriate fair value measurement which may impact the
timing and amount of revenue recognized depending on
the following:
Whether an appropriate measurement of fair value can
be demonstrated for undelivered elements.
The approaches used to establish fair value.
(SOP PP), we believe that future payout will be signifcantly
impacted not only by our share price but also by the require-
ment to outperform the TechPGI. Changes in these factors
could signifcantly afect the estimated fair values as calculated
by the option-pricing model, and the future payout. For more
information about these plans, see Note (27).
Accounting for Income Tax
We conduct operations and earn income in numerous foreign
countries and are subject to changing tax laws in multiple
jurisdictions within the countries in which we operate. Our
ordinary business activities also include transactions where
the ultimate tax outcome is uncertain, such as those involving
revenue sharing and cost reimbursement arrangements
between SAP Group entities. In addition, the amount of income
tax we pay is generally subject to ongoing audits by domestic
and foreign tax authorities. As a result, judgment is necessary
in determining our worldwide income tax provisions. We have
made reasonable estimates about the ultimate resolution of
our tax uncertainties based on current tax laws and our inter-
pretation thereof. Such judgment can have a material efect
on our income tax expense, income tax provision, and proft
after tax.
The carrying amount of a deferred tax asset is reviewed at the
end of each reporting period and is reduced to the extent
that it is no longer probable that sufcient taxable proft will be
available to allow the beneft of part or all of the deferred tax
assets to be utilized. This assessment requires management
judgment, estimates, and assumptions. In evaluating our ability
to utilize our deferred tax assets, we consider all available
positive and negative evidence, including the level of historical
taxable income and projections for future taxable income
over the periods in which the deferred tax assets are recover-
able. Our judgment regarding future taxable income is based
on expectations of market conditions and other facts and
circumstances. Any adverse change to the underlying facts or
our estimates and assumptions could require that we reduce
the carrying amount of our net deferred tax assets.
For more information about our income tax, see Note (10).
in the global economic circumstances resulting from the recent
global fnancial crisis. Changes in our estimates about the
allowance for doubtful accounts could materially impact the
reported assets and expenses in our fnancial statements,
and our proft could be adversely afected if actual credit losses
exceed our estimates.
Accounting for Share-Based Payments
We use certain assumptions in estimating the fair values for
our share-based payments, including expected future share
price volatility and expected option life (which represents our
estimate of the average amount of time remaining until the
options are exercised or expire unexercised). In addition, the
fnal payout for these plans also depends on our share price at
the respective exercise dates. All these assumptions may
signifcantly impact the fair value determination and thus the
amount and timing of our share-based payment expense.
Furthermore, the fair values of the options granted under our
2009 Plan (SOP PP) are dependent on our performance
against the Technology Peer Group Index (TechPGI) since the
respective grant date, the volatility and the expected
correlation between the market price of this index, and our
share price.
For the purpose of determining the estimated fair value of our
stock options, we believe expected volatility is the most sen-
sitive assumption. Regarding future payout under the plans,
the price of SAPs shares will be the most relevant factor. The
fair values of the Restricted Share Units (RSUs) granted under
our Employee Participation Plan (EPP) and Long-Term Incen-
tive Plan (LTI) 2015 depend on SAPs share price directly after
the announcement of the preliminary fourth quarter and full-
year results for the last fnancial year of the respective perfor-
mance period under the EPP (three-year holding period under
the LTI 2015), and thus may be signifcantly above or below
the budgeted amounts. With respect to our plan granted in 2009
Both the amortization period and the amortization method
have an impact on the amortization expense that is recorded in
each period.
In making impairment assessments for our intangible assets
and goodwill, the outcome of these tests is highly dependent
on managements latest estimates and assumptions regarding
future cash fow projections and economic risks, which are
complex and require signifcant judgment and assumptions
about future developments. They can be afected by a variety
of factors, including changes in our business strategy, our
internal forecasts, and an estimate of our weighted-average
cost of capital. Due to these factors, actual cash fows and
values could vary signifcantly from the forecasted future cash
fows and related values derived using the discounted cash
fow method. Although we believe the assumptions and
estimates we have made in the past have been reasonable and
appropriate, diferent assumptions and estimates could
materially afect our fnancial position and proft.
The results of goodwill impairment tests may depend on
the allocation of goodwill to our operating segments. This
allocation is judgmental as it is based on our estimates
regarding which operating segments are expected to beneft
from the synergies of the business combination.
We recognized no impairment losses on our goodwill and no
signifcant impairment losses on our intangible assets during
2013. Although we do not currently have an indication of
any signifcant impairment, there can be no assurance that
impairment losses will not occur in the future. For more
information, see Note (15).
Accounting for Business Combinations
In our accounting for business combinations, judgment is
required in determining whether an intangible asset is
identifable, and should be recorded separately from goodwill.
Additionally, estimating the acquisition date fair values of
the identifable assets acquired and liabilities assumed involves
considerable management judgment. The necessary measure-
ments are based on information available at the acquisition
date and are based on expectations and assumptions that have
been deemed reasonable by management. These judgments,
estimates, and assumptions can materially afect our fnancial
position and proft for several reasons, among which are the
following:
Fair values assigned to assets subject to depreciation and
amortization afect the amounts of depreciation and
amortization to be recorded in operating proft in the periods
following the acquisition.
Subsequent negative changes in the estimated fair values of
assets may result in additional expense from impairment
charges.
Subsequent changes in the estimated fair values of liabilities
and provisions may result in additional expense (if increasing
the estimated fair value) or additional income (if decreasing
the estimated fair value).
Subsequent Accounting for Goodwill and
Other Intangibles
As described in the Intangible Assets section in Note (3b), all
our intangible assets other than goodwill have fnite useful
lives. Consequently, the depreciable amount of the intangible
assets is allocated on a systematic basis over their useful lives.
Judgment is required in determining the following:
The useful life of an intangible asset, as this determination
is based on our estimates regarding the period over which
the intangible asset is expected to produce economic
benefts to us.
The amortization method, as IFRS requires the straight-line
method to be used unless we can reliably determine the
pattern in which the assets future economic benefts are
expected to be consumed by us.
of being used as intended by management. In contrast, all
expenditures arising from the research phase are expensed as
incurred.
We believe that determining whether internally generated
intangible assets from development are to be recognized
as intangible assets requires signifcant judgment, particularly
in the following areas:
Determining whether activities should be considered
research activities or development activities.
Determining whether the conditions for recognizing an
intangible asset are met requires assumptions about
future market conditions, customer demand and other
developments.
The term technical feasibility is not defned in IFRS, and
therefore determining whether the completion of an asset
is technically feasible requires judgment and a company-
specifc approach.
Determining the future ability to use or sell the intangible
asset arising from the development and the determination
of the probability of future benefts from sale or use.
Determining whether a cost is directly or indirectly
attributable to an intangible asset and whether a cost
is necessary for completing a development.
We have determined that the conditions for recognizing
internally generated intangible assets from our software
development activities are not met until shortly before
the developed products are available for sale. This assess-
ment is monitored by us on a regular basis.

Accounting for Legal Contingencies
As described in Note (23), we are currently involved in various
claims and legal proceedings. We review the status of each
signifcant matter not less frequently than each quarter and
assess our potential fnancial and business exposures related
to such matters. Signifcant judgment is required in the
determination of whether a provision is to be recorded and
what the appropriate amount for such provision should be.
Notably, judgment is required in the following:
Determining whether an obligation exists
Determining the probability of outfow of economic benefts
Determining whether the amount of an obligation is reliably
estimable
Estimating the amount of the expenditure required to settle
the present obligation
Due to uncertainties relating to these matters, provisions
are based on the best information available at the time.
At the end of each reporting period, we reassess the potential
obligations related to our pending claims and litigation and
adjust our respective provisions to refect the current best
estimate. In addition, we monitor and evaluate new information
that we receive after the end of the respective reporting
period but before the Consolidated Financial Statements are
authorized for issue to determine whether this provides
additional information regarding conditions that existed at the
end of the reporting period. Such revisions to our estimates
of the potential obligations could have a material impact on our
fnancial position and proft. For further information about
this case, see Notes (18b) and (23).
Recognition of Internally Generated Intangible Assets
from Development
Under IAS 38, internally generated intangible assets from
the development phase are recognized if certain conditions
are met. These conditions include the technical feasibility,
intention to complete, the ability to use or sell the asset under
development, and the demonstration of how the asset will
generate probable future economic benefts. The cost of a
recognized internally generated intangible asset comprises all
directly attributable cost necessary to make the asset capable
additional disclosures, for example, relating to risks asso-
ciated with fnancial instruments and to the valuation
techniques used for the valuation of the fnancial instruments.
Amendments to IAS 1 (Presentation of Financial Statements),
which aim to improve and align the presentation of items
of other comprehensive income in fnancial statements
prepared in accordance with IFRS and U.S. GAAP. Since SAP
had already made appropriate changes in the Consolidated
Statements of Comprehensive Income in prior years, the
adoption of the standard did not result in any changes to the
Amendments to IAS 19, which aim to improve the under-
standing of how defned beneft plans afect an entitys
fnancial position, fnancial performance, and cash fows. The
retrospective application of the revised IAS 19 in accordance
with the transitional provisions set out in IAS 19.173 (as
revised in 2011) resulted in the netting of items in the
Consolidated Statements of Financial Position (mandatory
netting of plan assets with time credits and semiretirement
obligations now classifed as other long-term employee
benefts), reclassifcations of certain employee beneft
liabilities from short-term benefts to long-term benefts and
consequential remeasurement of these liabilities. These
changes, which are immaterial both individually and in the
aggregate, resulted in amounts of adjustments for the
following balance sheet line items as of December 31, 2012:
decrease of non-current other fnancial assets by 124
million, increase of deferred tax assets by 18 million (thus
reducing total assets by 106 million), increase of current
other non-fnancial liabilities by 68 million, decrease of
current and non-current other provisions by 93 million and
45 million respectively, increase of deferred tax liabilities
by 3 million (thus reducing total liabilities by 67 million)
and a reduction of retained earnings by 39 million. The
impacts on our income statements were inconsequential in
all periods presented. The standard also resulted in additional
(3d) new Accounting Standards Adopted
in the Current Period
The following new accounting standards and amendments to
standards have been adopted in fscal year 2013:
Amendments to IFRS 7 (Financial Instruments: Disclosures)
Ofsetting fnancial assets and fnancial liabilities, which
require entities to disclose gross amounts subject to rights of
set-of, amounts set of in accordance with the accounting
standards followed, and the related net credit exposure. The
amendments did not result in an impact on the Companys
IFRS 10 (Consolidated Financial Statements), IFRS 11 (Joint
Arrangements), and IFRS 12 (Disclosure of Interests in Other
Entities) including amendments to the transition guidance
for IFRS 10-12 issued in June 2012, which provide a single
consolidation model that identifes control as the basis for
consolidation for all types of entities, establish principles
for the fnancial reporting by parties to a joint arrangement,
and combine, enhance and replace the disclosure require-
ments for subsidiaries, joint arrangements, associates and
structured entities. The adoption of this new set of standards
(we adopted the new standards earlier than required by
the European Union) did not result in a change in the fnancial
position of the Group. However, additional qualitative and
quantitative disclosure has been added, for example, with
respect to consolidated structured entities.
IFRS 13 (Fair Value Measurement), which defnes fair value,
sets out in a single IFRS a framework for measuring fair
value, and requires disclosures about fair value measure-
ments. The adoption of the standard has resulted in
IFRS 9 (Financial Instruments) and subsequent amendments
to IFRS 7 and IFRS 9, which will be applicable in fscal
year 2017 at the earliest (the fnal mandatory efective date
is expected to be determined after the fnal guidance has
been issued). The new guidance is expected to impact
the classifcation and measurement of fnancial assets. We
have not yet completed the determination of the impact
on our Consolidated Financial Statements.
Amendments to IAS 32 (Financial Instruments: Presentation)
Ofsetting fnancial assets and fnancial liabilities, which
become mandatory for the Groups 2014 Consolidated Finan-
cial Statements, aim to eliminate inconsistencies when
applying the ofsetting criteria and include some clarifcations.
The amendments will not have a material impact on our
(4) buSInESS COmbInAtIOnS
In 2013, we concluded the following business combinations:
Acquired Businesses
Sector Acquisition Type Acquired Voting Interest Acquisition Date
Ticket-Web GmbH & Co. KG,
Wildau, Germany
Solution provider of ticketing & customer relationship
management
Asset Deal NA March 4, 2013
KMS Software Company LLC.,
Los Angeles, California, USA
Provider of employee onboarding solutions Asset Deal NA April 1, 2013
Camilion Solutions, Inc.,
Toronto, Canada
Solutions for the insurance industry Share Deal 100% April 2, 2013
SmartOps Corporation,
Pittsburgh, Pennsylvania, USA
Provider of inventory and service-level optimization
software solutions
Share Deal 100% April 12, 2013
hybris AG, Rotkreuz,
Switzerland
Provider of independent commerce technology
(B2B and B2C)
Share Deal 100% August 1, 2013
KXEN Inc., San Francisco,
California, USA
Provider of predictive analytics technology for line
of business users and analysts
Share Deal 100% October 1, 2013
disclosures (for example, a sensitivity analysis for changes
in defned beneft obligations, additional components con-
sidered in actuarial assumptions, etc.), for more information
see Note (18a).
Amendments to IAS 36 (Impairment of Assets), which aim
to remove the unintended consequences of IFRS 13 on the
disclosures required under IAS 36 and expand the disclosures
on recoverable amounts of assets or cash-generating units
when they are based on fair value less costs of disposals. SAP
has early-adopted these new amendments to IAS 36.
(3e) new Accounting Standards not yet Adopted
The standards and interpretations (relevant to the Group)
that are issued, but not yet efective, up to the date of issuance
of the Groups fnancial statements are disclosed below. The
Group intends to adopt these standards, if applicable, when
they become efective:
We acquire businesses in specifc areas of strategic
interest to us.
Acquisition of hybris
On August 1, 2013, following satisfaction of applicable
regulatory and other approvals, we acquired 100%
of the shares of hybris AG.
hybris is a recognized leader in independent commerce
technology (B2B and B2C). We expect this acquisition to
combine hybriss omnichannel commerce solution with SAPs
enterprise technology and in-memory, cloud, and mobile
innovations and help facilitate new levels of customer insight
and engagement.
Financial Impact of Our Acquisitions
as of the Acquisition Date
The following table summarizes the values of identifable
assets acquired and liabilities assumed, as of the acquisition
date.
Recognized Amounts of Identifable Assets Acquired
and Liabilities Assumed
millions
Total Thereof
hybris
Cash and cash equivalents 16 10
Other financial assets 1 1
Trade and other receivables 40 30
Other non-financial assets 5 4
Thereof acquired technology 192 167
Thereof customer relationship
and other intangibles
182 164
Customer relationship 156 144
Trade name 11 10
Other intangible assets 15 10
Thereof software and database licenses 2 1
Current and deferred tax assets 21 13
Total identifiable assets 467 397
Trade accounts payable 13 10
Loans and borrowings 25 24
Current and deferred tax liabilities 83 67
Provisions and other non-financial liabilities 34 30
Thereof legal and litigation related liabilities 1 1
Deferred revenue 16 14
Total identifiable liabilities 171 145
Total identifiable net assets 296 252
Goodwill 840 780
Total consideration transferred in cash 1,136 1,032
The goodwill arising from the acquisitions consists largely
of the synergies and the know-how and technical skills of the
acquired businesses workforces.
hybris goodwill is attributed to expected synergies from
the acquisition particularly sourcing from the customers
transformations from channel-centric to omnichannel
business. By combining hybris commerce solutions with SAP
products, we expect to enable our customers across all
devices, delivery channels and touchpoints to provide new
levels of real-time customer interaction and customer
engagement.
The initial accounting for the business combinations entered
into in 2013 is incomplete because we are still obtaining
the information necessary to identify and measure contingent
liabilities and tax related assets and liabilities of the acquired
businesses. Accordingly, the respective amounts recognized in
our fnancial statements for these items are regarded
provisional as of December 31, 2013.
The acquisition-related costs incurred totaled 10 million for
our 2013 business combinations, all of which were recognized
in general and administration expense.
Impact of business Combinations
on Our Financial Statements
The amounts of revenue and proft or loss of the hybris
business acquired in 2013 since the acquisition date included
in the consolidated income statements for the reporting period
are as follows:
Impact of hybris on SAPs Financials
millions
Con-
tribution
of hybris
Revenue 70
Profit after tax 11
Had hybris been consolidated as of January 1, 2013, our
estimated pro forma revenue for the reporting period would
have been 16,865 million, and pro forma proft after tax
would have been 3,282 million.
These amounts were calculated after applying the Companys
accounting policies and after adjusting the results for hybris
to refect, for example:
Additional depreciation and amortization that would have
been charged assuming the fair value adjustment to
property, plant, and equipment and intangible assets had
been applied from January 1, 2013
The impact of fair value adjustments on deferred revenue
on a full-year basis
The borrowing costs on the funding levels and debt/equity
position of the Company after the business combination
Employee benefts
Related tax efects
These pro forma numbers have been prepared for comparative
purposes only. The pro forma revenue and proft numbers
are not necessarily indicative of either the results of operations
that would have actually occurred had the acquisition been
in efect at the beginning of the respective periods or of future
results.
Prior year acquisitions are described in the Consolidated
Financial Statements in the 2012 Annual Report.
(5) rEVEnuE
For detailed information about our revenue recognition
policies, see Note (3).
For revenue information by segment and geographic region,
see Note (28).
Revenue from construction-type contracts (contract revenue)
is included in software revenue and consulting revenue
depending on the type of project. The status of our construc-
tion projects in progress at the end of the reporting period
accounted for under IAS 11 was as follows:
Construction Projects in Progress
millions
2013 2012 2011
Revenue recognized
in the respective year
194 196 172
Aggregate cost recognized
(multi-year)
221 255 229
Recognized result
(+ profit/ loss; multi-year)
87 2 14
Advance payments received 1 3 5
Gross amounts due from
customers
3 7 20
Gross amounts due to customers 69 15 44
Loss provisions 3 34 27
(6) OthEr OpErAtInG InCOmE/ExpEnSE, nEt
Other operating income/expense, net, was as follows:
Other Operating Income/Expense, Net
millions
2013 2012 2011
Miscellaneous other operating
expenses
6 3 3
Gain/loss on disposals
of non-current assets
0 5 18
Miscellaneous other operating
income
19 31 10
Other operating income/
expense, net
12 23 25
(7) EmplOyEE bEnEFItS ExpEnSE AnD hEADCOunt
Employee benefts Expense
Employee benefts expense comprises the following:
Employee Benefts Expense
millions
2013 2012 2011
Salaries 5,997 5,726 4,938
Social security expense 857 777 642
Pension expense 212 190 168
Share-based payment expense 327 522 68
Termination benefits 39 65 65
Employee-related restructuring
expense
57 6 0
Employee benefits expense 7,489 7,286 5,880
Pension expense includes the amounts recorded for our defned
beneft and defned contribution plans as described in Note
(18a). Expenses for local state pension plans are included in
social security expense.
Number of Employees
On December 31, 2013, the breakdown of our full-time
equivalent employee numbers by function in SAP and by
region was as follows:
Number of Employees
December 31, 2013 December 31, 2012 December 31, 2011
EMEA
1)
Americas Asia
Pacific
Japan
Total EMEA
1)
Americas Asia
Pacific
Japan
Total EMEA
1)
Americas Asia
Pacific
Japan
Total
services
4,859 2,861 3,541 11,261 4,559 2,628 3,364 10,551 4,068 2,079 2,816 8,963
Professional services and other
services
7,177 4,406 3,047 14,629 7,020 4,399 2,840 14,259 6,808 3,963 2,497 13,268
Research and development 8,806 3,630 5,367 17,804 8,952 3,672 5,388 18,012 8,713 3,028 4,120 15,861
Sales and marketing 6,346 6,437 3,041 15,824 5,697 6,220 2,982 14,899 4,856 4,581 2,343 11,780
General and administration 2,424 1,445 697 4,566 2,243 1,383 660 4,286 2,073 1,120 542 3,735
Infrastructure 1,380 790 318 2,488 1,286 821 308 2,415 1,182 702 274 2,158
SAp Group (December 31) 30,993 19,568 16,011 66,572 29,757 19,123 15,542 64,422 27,700 15,473 12,592 55,765
Thereof acquisitions 511 571 29 1,111 791 2,987 1,038 4,816 264 49 90 403
SAp Group (months' end average) 30,238 19,418 15,752 65,409 29,009 17,619 14,506 61,134 27,296 15,010 12,040 54,346
1)
Europe, Middle East, Africa
Allocation of Share-based payment Expense
The allocation of expense for share-based payments,
net of the efects from hedging these instruments,
to the various operating expense items is as follows:
Share-Based Payments
millions
2013 2012 2011
Cost of software and software-related services 40 42 5
Cost of professional services and other services 61 104 11
Research and development 90 125 16
Sales and marketing 96 123 15
General and administration 40 127 21
Thereof cash-settled share-based payments 240 450 33
Thereof equity-settled share-based payments 87 72 35
For more information about our share-based payments, see
Note (27).
(8) OthEr nOn-OpErAtInG InCOmE/ExpEnSE, nEt
Other non-operating income/expense, net was as follows:
Other Non-Operating Income/Expense, Net
millions
2013 2012 2011
Foreign currency exchange gain/loss, net 4 154 58
Thereof from financial assets/liabilities at fair value through profit or loss 75 102 44
Thereof from available for sale financial assets 0 2 0
Thereof from loans and receivables 184 32 177
Thereof from financial liabilities at amortized cost 105 20 79
Thereof from non-financial assets/liabilities 0 2 4
Miscellaneous other non-operating income 1 4 2
Miscellaneous other non-operating expense 22 23 19
Other non-operating income/expense, net 17 173 75
(9) FInAnCIAl InCOmE, nEt
Financial Income, net was as follows:
Financial Income, Net
millions
2013 2012 2011
Finance income
Interest income from
available-for-sale financial assets (debt) 0 1 2
loans and receivables 37 45 58
derivatives 32 27 37
Gains on
available-for-sale financial assets (debt) 0 0 1
available-for-sale financial assets (equity) 46 30 12
Share of result of associates 0 0 9
Finance income 115 103 119
Finance cost
Interest expense from
financial liabilities at amortized cost 131 130 123
derivatives 23 28 37
TomorrowNow litigation 0 1 8
losses on
Impairment losses from
Fee expenses 14 8 7
Finance cost 181 175 161
Financial income, net 66 72 42
(10) InCOmE tAx
Income tax expense for the years ended December 31 is
attributable to the following regions:
Tax Expense According to Region
millions
2013 2012 2011
Current tax expense
Germany 836 700 635
Foreign 326 506 521
Total current tax expense 1,162 1,206 1,156
Deferred tax expense/income
Germany 51 11 14
Foreign 142 202 189
Total deferred tax expense/
income
91 213 175
Total income tax expense 1,071 993 1,331
Income tax expense for the years ended December 31
comprised the following components:
Major Components of Tax Expense
millions
2013 2012 2011
Current tax expense/income
Tax expense for current year 1,249 1,173 1,152
Taxes for prior years 87 33 4
Total current tax expense 1,162 1,206 1,156
Deferred tax expense/income
Origination and reversal
of temporary differences
168 266 164
Unused tax losses, research
and development tax credits
and foreign tax credits
77 53 11
Total deferred tax expense/
income
91 213 175
Proft before tax for the years ended December 31 consisted of
the following:
Proft Before Tax
millions
2013 2012 2011
Germany 3,126 2,460 2,316
Foreign 1,270 1,336 2,451
Total 4,396 3,796 4,767
105 million of the prior-year tax income recognized
in the current reporting period relate to assets acquired or
liabilities assumed in business combinations of previous
reporting periods.
Deferred tax assets and liabilities on a gross basis as at
December 31 are attributable to the following items:
Recognized Deferred Tax Assets and Liabilities
millions
2013 2012
Deferred tax assets
Carryforwards of unused tax losses 521 641
Pension provisions 78 76
Share-based payments 105 122
Other provisions and obligations 305 305
Deferred income 48 46
Research and development and foreign tax credits 65 37
Other 121 120
Deferred tax assets 1,393 1,568
Deferred tax liabilities
Pension provisions 6 4
Share-based payments 1 2
Other provisions and obligations 21 17
Deferred income 6 20
Other 39 36
Deferred tax liabilities 1,214 1,383
Deferred tax assets/liabilities, net 179 185
We retrospectively adjusted the provisional amounts recognized
for deferred tax assets and liabilities related to the 2012 Ariba
business combination by a corresponding decrease in goodwill
in the amount of 82 million. The adjustment refects new
The following table reconciles the expected income tax
expense computed by applying our combined German tax
rate of 26.41% (2012: 26.47%; 2011: 26.34%) to the actual
income tax expense. Our 2013 combined German tax rate
includes a corporate income tax rate of 15.00% (2012: 15.00%;
2011: 15.00%), plus a solidarity surcharge of 5.5% (2012: 5.5%;
2011: 5.5%) thereon, and trade taxes of 10.58% (2012: 10.64%;
2011: 10.51%).
Relationship Between Tax Expense and Proft Before Tax
2013 2012 2011
Tax expense at applicable
tax rate of 26.41%
(2012: 26.47%; 2011: 26.34%)
1,161 1,005 1,256
Tax effect of:
Foreign tax rates 116 114 79
Non-deductible expenses 158 111 89
Tax exempt income 146 169 149
Withholding taxes 87 71 93
Research and development and
foreign tax credits
41 29 33
Prior-year taxes 113 15 25
Reassessment of deferred
tax assets, research and
development tax credits, and
foreign tax credits
60 31 0
Other 21 72 21
Effective tax rate (in %) 24.4 26.2 27.9
information obtained about facts and circumstances as of the
acquisition date, mainly about the utilization of carryforwards of
unused tax losses.
Deferred tax assets have not been recognized in respect of the
following items for the years ended December 31:
Items Not Resulting in a Deferred Tax Asset
millions
2013 2012 2011
unused tax losses
Not expiring 68 49 38
Expiring in the following year 43 6 10
Expiring after the following year 525 517 93
Total unused tax losses 636 572 141
Deductible temporary
differences
178 202 30
unused research and develop-
ment and foreign tax credits
Not expiring 25 32 17
Expiring in the following year 1 0 0
Expiring after the following year 1 36 3
Total unused tax credits 27 68 20
421 million (2012: 367 million; 2011: 34 million) of the
unused tax losses relate to U.S. state tax loss carryforwards. As
described above, prior-year numbers for unused tax losses
related to the 2012 Ariba business combination were adjusted,
resulting in a decrease in the amount of 743 million.
We have not recognized a deferred tax liability on approxi-
mately 7.07 billion (2012: 5.84 billion) for undistributed
profts of our subsidiaries, because we are in a position to
control the timing of the reversal of the temporary diference
and it is probable that such diferences will not reverse in
the foreseeable future.
The proposed dividend payment of 1.00 per share for the
year ended December 31, 2013, will not have any efects on the
income tax of SAP AG.
Total income tax including the items charged or credited
directly to share premium and other comprehensive income
for the years ended December 31 consists of the following:
Total Income Tax
millions
2013 2012 2011
Income tax recorded in profit 1,071 993 1,331
Income tax recorded in share
premium
5 4 10
Income tax recorded in other
comprehensive income that will not
be reclassified to profit and loss
Actuarial gains/losses on defined
benefit pension plans
3 4 5
Income tax recorded in other
comprehensive income that will be
reclassified to profit and loss
Gains/losses on cash flow
hedges
0 17 1
Currency effects 8 3 6
Total 1,077 1,005 1,309
The income tax recorded in share premium relates to our
equity-settled share-based payment.
We are subject to ongoing tax audits by domestic and foreign
tax authorities. As a result of the tax audit of SAP AG and its
German subsidiaries for the years 2003 through 2006, we are
in dispute with the German tax authorities in respect of
intercompany fnancing matters. We strongly disagree with the
tax authorities position and intend to vigorously contest it.
Currently, we expect that we will need to initiate litigation to
prevail. We have not recorded a provision for this matter as
we believe that the tax authorities claim has no merit and that
no adjustment is warranted. If, contrary to our view, the German
tax authorities were to prevail in their arguments before the
court, we would expect to have an additional tax expense
(including related interest expense) for the tax audit period
2003 through 2006 and for the following years 2007 through
2013 of approximately 168 million in total.

(11) EArnInGS pEr ShArE
Restricted shares (the bonus shares in the Share Matching
Plan discussed in Note (27) below) granted to employees
under our share-based payments are included in the diluted
earnings per share calculations to the extent they have a
dilutive efect.
Earnings per share for the years ended December 31 was
calculated as follows:
Earnings per Share
2013 2012 2011
Profit attributable to equity holders
of SAP AG
3,326 2,803 3,435
Issued ordinary shares 1,229 1,229 1,227
Effect of treasury shares 35 37 38
Weighted average shares
outstanding, basic
1)
1,193 1,192 1,189
Dilutive effect of share-based
payments
1)
2 1 1
Weighted average shares
outstanding, diluted
1)
1,195 1,193 1,190
Earnings per share, basic,
attributable to equity holders
of SAp AG (in )
2.79 2.35 2.89
Earnings per share, diluted,
attributable to equity holders
of SAp AG (in )
2.78 2.35 2.89
1)
Number of shares in millions
(12) OthEr FInAnCIAl ASSEtS
Other fnancial assets as at December 31 were as follows:
Other Financial Assets
millions
2013 2012
Current Non-Current Total Current Non-Current Total
Loans and other financial receivables 90 243 333 35 208 243
Debt investments 38 0 38 15 14 29
Equity investments 0 322 322 0 201 201
Available-for-sale financial assets 38 322 360 15 215 230
Derivatives 123 6 129 104 40 144
Investments in associates 0 36 36 0 46 46
Total 251 607 858 154 509 663
loans and Other Financial receivables
Loans and other fnancial receivables mainly consist of time
deposits, investments in pension assets for which the
corresponding liability is included in employee-related
obligations (see Note (18b)), other receivables, and loans to
employees and third parties. The majority of our loans
and other fnancial receivables are concentrated in the United
States.
As at December 31, 2013, there were no loans and other
fnancial receivables past due but not impaired. We have no
indications of impairments of loans and other fnancial
receivables that are not past due and not impaired as at the
reporting date. For general information on fnancial risk
and the nature of risk, see Note (24).
Available-for-Sale Financial Assets
Our available-for-sale fnancial assets consist of debt
investments in bonds of fnancial and non-fnancial
corporations and municipalities and equity investments
in listed and unlisted securities.
These available-for-sale fnancial assets are denominated
in the following currencies:
Currencies of Available-for-Sale Financial Assets
millions
2013 2012
Euros 51 36
U.S. dollars 305 185
Other 4 9
Total 360 230
For more information on fair value measurement with regard to
our equity investments, see Note (26).
Derivatives
Detailed information about our derivative fnancial instruments
is presented in Note (25).
The changes in the allowance for doubtful accounts charged
to expense were immaterial in all periods presented.
Concentrations of credit risks are limited due to our large
customer base and its distribution across many diferent
industries and countries worldwide.
(13) trADE AnD OthEr rECEIVAblES
Trade and other receivables were as follows:
Trade and Other Receivables
millions
2013 2012
Trade receivables, net 3,802 14 3,816 3,837 0 3,837
Other receivables 63 84 147 80 88 168
Total 3,865 98 3,963 3,917 88 4,005
The carrying amounts of our trade receivables as at December
31 are as follows:
Carrying Amounts of Trade Receivables
millions
2013 2012
Gross carrying amount 3,954 3,943
Sales allowances charged
to revenue
96 73
Allowance for doubtful accounts
charged to expense
42 33
Carrying amount trade
receivables, net
3,816 3,837
The aging of trade receivables as at December 31 was:
Aging of Trade Receivables
millions
2013 2012
Not past due and not individually impaired 3,055 3,068
Past due but not individually impaired
Past due 130 days 330 368
Past due over 365 days 13 14
Total past due but not individually impaired 721 718
Individually impaired, net of allowances 40 51
Carrying amount of trade receivables, net 3,816 3,837
We believe that the recorded sales and bad debt allowances
adequately provide for the credit risk inherent in trade
receivables.
For more information about fnancial risk and how we manage
it, see Notes (24) and (25).

(14) OthEr nOn-FInAnCIAl ASSEtS
Other Non-Financial Assets
millions
2013 2012
Prepaid expenses 179 57 236 149 68 217
Other tax assets 92 0 92 74 0 74
Capitalized contract cost 55 50 105 56 0 56
Advance payments 17 0 17 11 0 11
Miscellaneous other assets 3 0 3 4 0 4
Total 346 107 453 294 68 362
Prepaid expenses primarily consist of prepayments for
operating leases, support services, and software royalties
that will be recognized as an expense in future periods.
(15) GOODwIll AnD IntAnGIblE ASSEtS
Goodwill and Intangible Assets
millions
Goodwill Software and
Database Licenses
Acquired
Tech nology/IPRD
Customer
Relationship and
Other Intangibles
Total
Historical cost
January 1, 2012 8,808 489 1,267 1,930 12,494
Foreign currency exchange differences 77 2 3 27 109
Additions from business combinations 4,557 4 578 1,152 6,291
Other additions 0 60 0 0 60
Retirements/disposals 0 18 64 1 83
December 31, 2012 13,288 533 1,778 3,054 18,653
Additions from business combinations 840 2 192 182 1,216
Other additions 0 43 0 0 43
December 31, 2013 13,783 558 1,929 3,036 19,306
Accumulated amortization
January 1, 2012 97 295 692 675 1,759
Additions amortization 0 57 192 316 565
Transfers 0 0 29 29 0
December 31, 2012 96 335 843 953 2,227
Additions amortization 0 51 249 303 603
December 31, 2013 95 367 1,071 1,129 2,662
Carrying value December 31, 2012 13,192 198 935 2,101 16,426
Carrying value December 31, 2013 13,688 191 858 1,907 16,644
The additions other than from business combinations to
software and database licenses in 2013 and 2012 were
individually acquired from third parties and include cross-
license agreements and patents.
We carry the following signifcant intangible assets:
Signifcant Intangible Assets
Carrying Amount in Millions Remaining Useful
Life in Years
2013 2012
Business Objects Customer relationships: Maintenance 150 181 811
Sybase Acquired technologies 225 330 13
Sybase Customer relationships: Maintenance 466 581 9
Sybase Customer relationships: Messaging and license 66 109 17
SuccessFactors Acquired technologies 206 260 6
SuccessFactors Customer relationships: Subscription 383 404 13
Ariba Acquired technologies 186 238 7
Ariba Customer relationships 480 508 1214
hybris Acquired technologies 159 0 7
hybris Customer relationships 137 0 414
Total significant intangible assets 2,458 2,611
The carrying amount of goodwill has been allocated for
impairment testing purposes to the SAPs operating segments
at December 31, 2013, and 2012, as follows:
Goodwill by Operating Segment
millions
On-Premise
Products
On-Premise
Services
Cloud Applications Ariba Total
7,462 1,122 2,167 2,523 13,274
Adjustments 0 0 0 82 82
January 1, 2013 7,462 1,122 2,167 2,441 13,192
Additions from business combinations 726 85 27 2 840
December 31, 2013 8,083 1,195 2,067 2,343 13,688
Prior year goodwill amounts have been adjusted by 82 million
relating to tax adjustments. For more information, see Note (10).
Goodwill Impairment Testing
The key assumptions on which management based its
cash fow projections for the period covered by the underlying
business plans are as follows:
Key Assumptions in Cash Flow Projections
Key assumption basis for determining values assigned
to key assumption
Budgeted revenue
growth
Revenue growth rate achieved in the current fiscal year,
increased for an expected increase in SAPs addressable
cloud, mobility, and database markets; expected growth
in the established categories of applications and analytics.
Values assigned reflect our past experience and our
expectations regarding an increase in the addressable
market.
Budgeted
operating margin
Operating margin budgeted for a given budget period
equals the operating margin achieved in the current fiscal
year, increased for expected efficiency improvements.
Values assigned reflect past experience, except for
efficiency improvements.
Pre-tax discount
rates
Our estimated cash fow projections are discounted to present
value by means of the pre-tax discount rates. Pre-tax discount
rates are based on the weighted average cost of capital
(WACC) approach. The WACC takes into account both debt
and equity and refects specifc risks relating to the relevant
segment by applying individual beta factors.
Terminal growth
rate
Our estimated cash fow projections for periods beyond
the business plan were extrapolated using the segment-
specifc terminal growth rates. These growth rates do
not exceed the long-term average growth rates for the
markets in which our segments operate.
On-Premise Products and On-Premise Services
The recoverable amounts of the On-Premise Products and
On-Premise Services segments have been determined based
on value-in-use calculations. The calculations use cash fow
projections based on actual operating results and a Company-
wide three-year business plan approved by management.
The key assumptions are set out below:
Key Assumptions
Percent
On-Premise Products On-Premise Services
2013 2012 2013 2012
Pre-tax discount
rates
11.6 11.5 11.7 10.7
Terminal growth rate 3.0 2.9 0.9 2.1
We believe that any reasonably possible change in any
of the above key assumptions would not cause the carrying
amount of our On-Premise Product segment or our On-Premise
Services segment to exceed their respective recoverable
amounts. Even an increase in discount rate of up to fve per-
centage points (pp) or a reduction of estimated cash fows
of up to 30% would not result in any additional impairment
requirement for our On-Premise Product segment or
On-Premise Services segments.
Cloud Applications and Ariba
The recoverable amounts of the Cloud Application and Ariba
segments have been determined based upon fair values less
costs of disposal. The fair value measurement was categorized
as a level 3 fair value based on the inputs used in the valuation
technique. The cash fow projections are based on actual oper-
ating results and specifc estimates covering a 12-year period.
The projected results were determined based on managements
estimates and are consistent with the assumptions that a
market participant would make. Both segments operate in a
relatively immature area with signifcant growth rates projected
for the near future. They therefore require a longer detailed
planning period relative to mature segments.
The key assumptions (that a market participant would make)
are set out below:
Key Assumptions
Percent
Cloud
Applications
Ariba
2013 2013
Budgeted revenue growth
(average of the budgeted period)
14.5 14.5
Pre-tax discount rates 13.6 14.2
Terminal growth rate 3.5 3.5
We are using a target operating margin of 36% and 34%,
respectively, for the Cloud Applications segment and the Ariba
segment at the end of budgeted period as a key assumption,
which is within the range of expectations of market participants
(for example, industry analysts).
The recoverable amounts for the Cloud Applications segment
and the Ariba segment exceed the carrying amounts by
608 million (2012: 281 million) and 153 million (2012:
0 million) respectively.
In the prior year, for the Cloud Applications segment, a value-
in-use calculation was used based on an eight-year business
plan with budgeted revenue growth rates in a range of 14% to
51% (with higher growth rates expected in the earlier years).
The pre-tax discount rate applied was 13.1% and the terminal
growth rate was 3.4%. The recoverable amount for the Ariba
segment was estimated using the market approach in the prior
year, which represented the best estimate of fair value because
of the close proximity of the transaction date to year-end.
Given available market data supporting revenue and operating
margin growth rates exceeding terminal value growth rates
for a period longer than fve years, we believe that the most
appropriate valuation technique for both segments should be
based upon fair value less cost of disposals in the current year.
The following table shows amounts by which the key assump-
tions would need to change individually for the recoverable
amount to be equal to the carrying amount:
Sensitivity to Change in Assumptions
Cloud
Applications
Ariba
2013 2013
Budgeted revenue growth
(average of the budgeted period)
1.7 pp 0.5 pp
Pre-tax discount rates +1.4 pp +0.4 pp
Terminal growth rate 2.7 pp 0.6 pp
The recoverable amount for the Cloud Applications segment
would equal the carrying amount if an operating margin of
only 27% were achieved from 2022, and the recoverable amount
for the Ariba segment would equal the carrying amount if an
operating margin of only 31% were achieved from 2024.
(16) prOpErty, plAnt, AnD EquIpmEnt
Property, Plant, and Equipment
millions
Land and Buildings Other Property,
Plant, and
Equipment
Advance Payments
and Construction in
Progress
Total
Historical cost
January 1, 2012 1,360 1,551 7 2,918
Foreign currency exchange differences 12 16 1 29
Additions from business combinations 13 22 1 36
Other additions 55 397 20 472
Retirements/disposals 44 236 5 285
Transfers 1 3 4 0
December 31, 2012 1,373 1,721 18 3,112
Additions from business combinations 1 7 0 8
Other additions 65 430 50 545
Transfers 12 3 15 0
December 31, 2013 1,402 1,912 44 3,358
Accumulated depreciation
January 1, 2012 460 907 0 1,367
Additions depreciation 56 243 0 299
December 31, 2012 469 935 0 1,404
Additions depreciation 59 289 0 348
December 31, 2013 499 1,039 0 1,538
Carrying value
December 31, 2012 904 786 18 1,708
December 31, 2013 903 873 44 1,820
The additions and disposals in other property, plant, and
equipment relate primarily to the replacement and purchase
of computer hardware and vehicles acquired in the normal
course of business.
(17) trADE AnD OthEr pAyAblES, FInAnCIAl
lIAbIlItIES, AnD OthEr nOn-FInAnCIAl lIAbIlItIES
(17a) trade and Other payables
Trade and other payables as at December 31 were as follows:
Trade and Other Payables
millions
2013 2012
Trade payables 640 0 640 684 0 684
Advance payments received 80 0 80 81 0 81
Miscellaneous other liabilities 130 45 175 105 63 168
Trade and other payables 850 45 895 870 63 933
Miscellaneous other liabilities include mainly deferral amounts
for free rent periods and liabilities related to government grants.
(17b) Financial liabilities
Financial liabilities as at December 31 were as follows:
Financial Liabilities
millions
2013 2012
Nominal volume Carrying amount Nominal volume Carrying amount
Current Non-Current Current Non-Current Total Current Non-Current Current Non-Current Total
Bonds 500 1,800 500 1,791 2,291 600 2,300 600 2,287 2,887
Private placement
transactions
86 1,922 86 1,891 1,977 0 2,094 0 2,088 2,088
Financial Debt 586 3,722 586 3,682 4,268 600 4,394 600 4,375 4,975
Other financial
liabilities
NA NA 162 76 238 NA NA 202 71 273
Financial liabilities 748 3,758 4,506 802 4,446 5,248
Financial liabilities are unsecured, except for the retention of
title and similar rights customary in our industry. Efective
interest rates on our fnancial debt (including the efects from
interest rate swaps) were 2.48% in 2013, 2.87% in 2012, and
2.98% in 2011.
For an analysis of the contractual cash fows of our fnancial
liabilities based on maturity, see Note (24). For information on
the risk associated with our fnancial liabilities, see Note (25).
For information on fair values, see Note (26).
Bonds
As at December 31, we had outstanding bonds with the
following terms:
Bonds
Maturity Issue Price Coupon Rate Effective
Interest Rate
Nominal Volume
(in millions)
balance
on 12/31/2013
(in millions)
Balance
on 12/31/2012
(in millions)
Eurobond 1 2010 2014 99.755% 2.50% (fix) 2.64% 500 500 499
Eurobond 2 2010 2017 99.780% 3.50% (fix) 3.58% 500 499 498
Eurobond 4 2010 2013 99.857% 2.25% (fix) 2.38% 600 0 600
Eurobond 5 2012 2015 99.791% 1.00% (fix) 1.17% 550 547 547
Eurobond 6 2012 2019 99.307% 2.125% (fix) 2.27% 750 745 743
bonds 2,291 2,887
In September 2012, we arranged a debt issuance program
with an initial renewable term of 12 months. The program
enables us to issue bonds in a number of tranches in diferent
currencies up to a volume of 2.4 billion. In November 2012, we
issued bonds under the program as shown in the table above.
In September 2013, our debt issuance program was extended
by 12 months and the volume was increased to 4 billion,
all of which is available for new bond issuances.
All our Eurobonds are listed for trading on the Luxembourg
Stock Exchange.
Private Placement Transactions
Our private placement transactions have the following terms:
Private Placements
Maturity Coupon Rate Effective
Interest Rate
Nominal Volume
(in respective cur-
rency in millions)
balance
on 12/31/2013
(in millions)
Balance
on 12/31/2012
(in millions)
German promissory note
Tranche 3 2009 2014 4.92% (fix) 4.98% 86 86 86
U.S. private placements
Tranche 1 2010 2015 2.34% (fix) 2.40% US$300 216 227
Tranche 2 2010 2017 2.95% (fix) 3.03% US$200 145 151
Tranche 3 2011 2016 2.77% (fix) 2.82% US$600 434 454
Tranche 4 2011 2018 3.43% (fix) 3.50% US$150 108 113
Tranche 5 2012 2017 2.13% (fix) 2.16% US$242.5 175 183
Tranche 6 2012 2020 2.82% (fix) 2.86% US$290 206 219
Tranche 7 2012 2022 3.18% (fix) 3.22% US$444.5 313 336
Tranche 8 2012 2024 3.33% (fix) 3.37% US$323 225 244
Tranche 9 2012 2027 3.53% (fix) 3.57% US$100 69 75
Private placements 1,977 2,088
The U.S. private placement notes were issued by one of our
subsidiaries that has the U.S. dollar as its functional currency.
Other Financial Liabilities
Our other fnancial liabilities mainly comprise derivative
liabilities and liabilities for accrued interest.
(17c) Other non-Financial liabilities
Other non-fnancial liabilities as at December 31 were as follows:
Other Non-Financial Liabilities
millions
2013 2012
Other employee-related liabilities 1,775 112 1,887 1,768 98 1,866
Other taxes 488 0 488 436 0 436
Other non-financial liabilities 2,263 112 2,375 2,204 98 2,302
Other employee-related liabilities mainly relate to vacation
accruals, bonus and sales commission accruals, as well
as employee-related social security obligations.
Other taxes comprise mainly payroll tax liabilities and
value-added tax liabilities.
(18) prOVISIOnS
Provisions as at December 31 were as follows:
Provisions
millions
2013 2012
Pension plans and similar obligations (see Note (18a)) 2 62 64 3 69 72
Other provisions (see Note (18b)) 643 215 858 840 278 1,118
Total 645 277 922 843 347 1,190
(18a) pension plans and Similar Obligations
We maintain several defned beneft and defned contribution
pension plans for our employees in Germany and at foreign
subsidiaries, which provide for old age, disability, and survivors
benefts. The measurement dates for the domestic and f
oreign beneft plans are December 31. Individual beneft plans
have also been established for members of our Executive
Board. Furthermore, in certain countries we provide termination
indemnity benefts to employees regardless of the cause
for termination. These types of benefts are typically defned by
law in these foreign countries.
Our domestic defned beneft pension plans provide participants
with pension benefts that are based on the length of service
and compensation of employees.
There is also a domestic employee-fnanced pension plan
which SAP funds through the purchase of qualifying insurance
policies and where SAP guarantees a minimum return on
investment which is equivalent to the return guaranteed by the
insurer. Even though the risk that SAP would be liable for
a return that cannot be met by the insurance company is very
remote, these employee-fnanced plans do not qualify as
defned contribution plans under IFRS and consequently,
the pension liabilities and the respective insurance policies are
included in domestic plan assets and plan liabilities
respectively.
Foreign defned beneft pension plans provide participants
with pension benefts that are based on compensation levels,
age, and length of service.
The pension plan in Switzerland accounted for 189 million of
defned beneft obligation and 194 million of the plan assets.
This plan consists of three benefts namely retirement benefts,
disability benefts and spouse pension. These obligations are
based on salary and age of the employees. Both employer and
employee make contributions to the plan. Statutory minimum
funding obligations exist.
The following table shows the present value of the nature of
the benefts provided by the defned beneft obligations:
Nature of the Benefts
millions
Domestic Plans Foreign Plans Other Post-
Employment Plans
Total
2013 2013 2013 2013
Present value of defined benefit obligation
benefits based on final salary
Annuity 14 2 0 16
Lump sum 0 5 25 30
benefits not based on final salary
Annuity 40 189 1 230
Lump sum 574 35 8 617
Total 628 231 34 893
The following table shows the change in present values of
the defned beneft obligations (DBOs) and the fair value of the
plan assets with a reconciliation of the funded status to net
amounts:
Change in the Present Value of the DBO and the Fair Value of the Plan Assets
millions
Employment Plans
Total
2013 2012 2013 2012 2013 2012 2013 2012
Change in benefit obligation
Benefit obligation at beginning of year 597 462 220 453 32 23 850 938
Current service cost 7 2 15 15 3 3 25 16
Interest expense 19 21 4 8 1 1 24 30
Employee contributions 28 26 5 5 0 0 33 31
Remeasurements loss (+)/gain () 17 94 1 0 1 6 17 100
Benefits paid 5 5 4 3 1 2 10 10
Acquisitions/divestitures 0 0 1 0 2 1 3 1
Curtailments/settlements 0 0 0 257 0 0 0 257
Past service cost 0 0 1 0 0 0 1 0
Foreign currency exchange rate changes 0 0 12 1 2 0 14 1
benefit obligation at year-end 628 597 231 220 34 32 893 850
Thereof fully or partially funded plans 628 597 196 180 20 19 844 796
Thereof unfunded plans 0 0 35 40 14 13 49 54
Change in plan assets
Fair value of plan assets at beginning of year 589 461 181 387 9 6 779 854
Interest income 20 22 4 7 1 1 25 30
Employer contributions 1 1 14 31 4 4 19 36
Benefits paid 5 5 4 3 1 1 10 9
Curtailments/settlements 0 0 0 257 0 0 0 257
Remeasurements loss ()/gain (+) 10 84 5 8 0 0 5 92
Fair value of plan assets at year-end 623 589 201 181 11 9 835 779
(continued)
Change in the Present Value of the DBO and the Fair Value of the Plan Assets (continued)
millions
Employment Plans
Total
2013 2012 2013 2012 2013 2012 2013 2012
Reconciliation of net defined benefit liability
(asset)
Net defined benefit liability (asset) at beginning
of year
8 1 39 66 23 17 70 84
Current service cost 7 2 15 15 3 3 25 16
Interest expense (income) 1 1 0 1 0 0 1 0
Employer contributions 1 1 14 31 4 4 19 36
Remeasurements loss (+)/gain () 7 10 4 8 1 6 12 8
Benefits paid 0 0 0 0 0 1 0 1
Past service cost 0 0 1 0 0 0 1 0
net defined benefit liability (asset) at year-end 5 8 30 39 23 23 58 71
Amounts recognized in the Consolidated
Statement of Financial Position:
Non-current pension assets 0 0 6 1 0 0 6 1
Accrued benefit liability (current) 0 0 2 3 0 0 2 3
Accrued benefit liability (non-current) 5 8 34 37 23 23 62 69
Total 5 8 30 39 23 23 58 71
The following weighted average assumptions were used for the
actuarial valuation of our domestic and foreign pension
liabilities as well as other post-employment beneft obligations
as at the respective measurement date:
Actuarial Assumptions for Defned Beneft Liabilities
Percent
Domestic Plans Foreign Plans Other Post-Employment Plans
2013 2012 2011 2013 2012 2011 2013 2012 2011
Discount rate 3.6 3.3 4.6 2.1 1.9 3.2 5.2 4.8 5.5
Future salary increases 2.5 2.5 2.5 1.7 1.8 0.8 4.7 4.2 3.9
Future pension increases 2.0 2.0 2.0 0.0 0.0 0.0 0.0 0.0 0.0
Employee turnover 2.0 2.0 2.0 9.9 9.5 4.2 2.5 2.3 2.3
Inflation 0.0 0.0 0.0 1.3 1.3 0.5 1.1 1.1 1.2
The assumed discount rates are derived from rates available
on high-quality corporate bonds and government bonds for
which the timing and amounts of payments match the timing
and the amounts of our projected pension payments.
The sensitivity analysis table shows how the present value of
all defned beneft obligations would have been infuenced
by reasonable possible changes to above actuarial assumptions.
The sensitivity analysis table presented below considers
change in one actuarial assumption at a time, holding all other
actuarial assumptions constant.
Sensitivity Analysis
millions
Employment Plans
Total
2013 2013 2013 2013
Present value of all defined benefit obligations if:
Discount rate was 50 basis points higher 585 217 32 834
Discount rate was 50 basis points lower 675 246 36 957
Expected rate of future salary increases was 50 basis points higher 628 233 36 897
Expected rate of future salary increases was 50 basis points lower 628 228 32 888
Expected rate of future pension increases was 50 basis points higher 632 236 34 902
Expected rate of future pension increases was 50 basis points lower 625 226 34 885
Expected inflation was 50 basis points higher 628 233 36 897
Expected inflation was 50 basis points lower 628 229 32 889
The components of total expense of defned beneft pension
plans for the years 2013, 2012, and 2011 recognized in
operating expense were as follows:
Total Expense of Defned Beneft Pension Plans
millions
Domestic Plans Foreign Plans Other Post-Employment Plans Total
2013 2012 2011 2013 2012 2011 2013 2012 2011 2013 2012 2011
Current service cost 7 2 1 15 15 18 3 3 3 25 16 20
Interest expense 19 21 20 4 8 13 1 1 1 24 30 34
Interest income 20 22 21 4 7 12 1 1 0 25 30 33
Past service cost 0 0 0 1 0 2 0 0 0 1 0 2
Total expense 6 3 2 16 16 17 4 3 4 26 16 19
Actual return on plan
assets
10 106 28 9 15 5 1 1 0 20 122 33
Due to the fact that our domestic defned beneft pension plans
primarily consist of an employee-fnanced post-retirement
plan that is fully fnanced with qualifying insurance policies, current
service cost may turn into a credit as a result of adjusting the
defned beneft liabilitys carrying amount to the fair value of the
qualifying plan assets. Such adjustments are recorded in
service cost.
We have recognized the following amounts as remeasurements
for our defned beneft pension plans:
Remeasurements on Defned Beneft Pension Plans
millions
Domestic Plans Foreign Plans Other Post-Employment Plans Total
2013 2012 2011 2013 2012 2011 2013 2012 2011 2013 2012 2011
Beginning balance of
remeasurements on
defined benefit plans
(gains () and losses (+))
10 0 4 12 101 87 5 0 0 3 101 83
Remeasurements
on defined benefit
obligations:
Actuarial gains () and
losses (+) arising from
change in demographic
assumptions
0 0 0 3 0 5 0 0 0 3 0 5
change in financial
assumptions
28 106 14 6 5 5 0 0 0 34 111 19
experience adjustments
11 12 3 6 5 9 0 5 0 17 12 12
Remeasurements on plan
assets:
experience adjustments
10 84 7 5 3 12 0 0 0 5 87 5
Settlement 0 0 0 0 110 0 0 0 0 0 110 0
Foreign currency
exchange rate changes
0 0 0 2 0 0 1 0 0 3 0 0
Ending balance of
remeasurements on
defined benefit plans
(gains () and losses (+))
2 10 0 17 12 101 3 5 0 12 3 101
For the determination of the total expense for the years 2013,
2012, and 2011, the projection of the defned beneft obligation
and the fair value of the plan assets as at December 31, 2013,
2012, and 2011, the following principal actuarial assumptions
(expressed as weighted averages for our foreign and post-
employment beneft plans) were used:
Actuarial Assumptions for Total Expense
Percent
Domestic Plans Foreign Plans Other Post-Employment Plans
2013 2012 2011 2013 2012 2011 2013 2012 2011
Discount rate 3.3 4.6 4.9 2.0 2.2 3.3 4.8 5.6 5.8
Future salary increases 2.5 2.5 2.5 1.7 1.8 1.3 4.2 3.9 3.4
Future pension increases 2.0 2.0 2.0 0.0 0.0 0.0 0.0 0.0 0.0
Employee turnover 2.0 2.0 2.0 9.8 10.2 4.2 2.0 1.9 2.0
Inflation 0.0 0.0 0.0 1.3 1.3 0.5 1.1 1.1 1.2
Our investment strategy on domestic beneft plans is to invest
all contributions in stable insurance policies.
Our investment strategies for foreign beneft plans vary
according to the conditions in the country in which the
respective beneft plans are situated. Generally, a long-term
investment horizon has been adopted for all major foreign
beneft plans. Although our policy is to invest in a risk-
diversifed portfolio consisting of a mix of assets, both the
defned beneft obligation and plan assets can fuctuate over-
time which exposes the Group to actuarial and market
(investment) risks. Depending on the statutory requirements
in each country, it might be necessary to reduce the
underfunding by addition of liquid assets. To minimize these
actuarial and market fuctuations, SAP reviews relevant
fnancial factors for appropriateness and reasonableness and
makes modifcations to eliminate certain efects when
considered necessary.
Our plan asset allocation as at December 31, 2013, and
December 31, 2012, was as follows:
Plan Asset Allocation
millions
2013 2012
Quoted in an
Active Market
Not Quoted in an
Active Market
Quoted in an
Active Market
Not Quoted in an
Active Market
Asset category
Equity investments 48 0 42 0
Corporate bonds 65 0 63 0
Real estate 33 0 29 0
Insurance policies 9 623 8 589
Cash and cash equivalents 34 0 31 0
Others 23 0 17 0
Total 212 623 190 589
Our expected contribution in 2014 is 1 million for domestic
defned beneft pension plans and 15 million for foreign
defned beneft pension plans, all of which is expected to be
paid in cash. The weighted duration of our defned beneft
plans amounted to 15 years as at December 31, 2013, and
14 years as at December 31, 2012.
The table below presents the maturity analysis of the beneft
payments:
Maturity Analysis
millions
Employment Plans
2013 2013 2013
Less than a year 8 20 1
Between 12 years 9 36 2
Between 25 years 58 53 5
Over 5 years 989 205 64
Total 1,064 314 72
Dened Contribution Plan/State Plans
We also maintain domestic and foreign defned contribution
plans. Amounts contributed by us under such plans are based
on a percentage of the employees salaries or the amount
of contributions made by employees. Furthermore, in Germany
and some other countries we make contributions to public
pension plans that are operated by national or local govern-
ment or a similar institution. The expenses of defned
contribution plans and state plans for the years 2013, 2012,
and 2011, were as follows:
Total Expense of Defned Contribution Plans and State Plans
millions
2013 2012 2011
Defined contribution plans 182 173 151
State plans 316 296 244
Total expense 498 469 395
(18b) Other provisions
Changes in other provisions over the reporting year were
as follows:
Other Provisions
millions
Balance
1/1/2013
Addition Additions
from
business
combinations
Utilization Release Currency
Impact
Balance
12/31/2013
Employee-related provisions
Provisions for share-based payments 579 293 0 360 54 13 445
Other employee-related provisions 87 58 0 80 11 2 52
Customer-related provisions 74 83 0 83 36 2 36
Litigation-related provisions
TomorrowNow litigation 234 0 0 1 0 10 223
Other litigation-related provisions 55 6 1 11 36 3 12
Restructuring provisions 12 74 0 49 4 0 33
Onerous contract provisions (other than from
customer contracts)
53 3 0 22 0 1 33
Other provisions 24 6 0 3 1 2 24
Total other provisions 1,118 523 1 609 142 33 858
Thereof current 840 643
Thereof non-current 278 215
For more information about our share-based payments,
see Note (27).
Other employee-related provisions primarily comprise obligations
for time credits, severance payments, jubilee expenses, and
semiretirement. While most of these employee-related
provisions can be claimed within the next 12 months, we do not
expect the related cash fows within this time period.
Customer-related provisions include performance obligations,
as well as expected contract losses from contracts with
customers. The associated cash outfows are substantially
short-term in nature.
Litigation-related provisions relate primarily to the litigation
matters described in Note (23). They include the expenses
related to the provision established for the related litigation as
well as any related legal fees incurred to date and expected to
be incurred in the future. We have established provisions taking
into account the facts of each case. The timing of the cash
outfows associated with legal claims cannot be reasonably
determined in all cases. For more information, see Note (3c).
Restructuring provisions comprise various restructuring
activities that occurred in 2013 and 2012.
During 2012 and 2013, we implemented organizational changes
in sales and go-to-market in EMEA and North America. We
made other changes to integrate Sybase employees into our
global fnance and administration organization and to integrate
the business activities of Crossgate. In line with our new
cloud integration strategy, we set up a plan to cover all cloud-
business related organizational changes. The cash outfows
for these restructuring programs are typically short-term in
nature.
Non-customer contract-related onerous contract provisions
have been recorded in connection with unused lease space and
unfavorable acquired facility lease terms. The utilization of
onerous leases depends on the terms of the underlying lease
contract.
Other provisions comprise warranty obligations and decom-
missioning, restoration, and similar liabilities associated with
leased facilities. The related outfow for warranty obligations is
short-term in nature. The associated cash outfows for
decommissioning, restoration, and similar liabilities, which are
typically long-term in nature, are generally expected to occur
at the dates we exit the facilities to which they relate.

(19) DEFErrED InCOmE
Deferred income consists mainly of prepayments made by
our customers for support services, cloud subscriptions, and
professional services; fees from multiple element arrange-
ments allocated to undelivered elements; and amounts
recorded in purchase accounting at fair value for obligations to
perform under acquired support contracts in connection
with acquisitions.
On December 31, 2013, current deferred income included a
total of 443 million in deferred revenue (December 31, 2012:
317 million), which in future will be recognized as revenue
from cloud subscriptions and support.

(20) tOtAl EquIty
Issued Capital
As at December 31, 2013, SAP AG had issued 1,228,504,232
no-par value bearer shares (December 31, 2012: 1,228,504,232)
with a calculated nominal value of 1 per share. All the shares
issued are fully paid.
The following table shows the changes in the number and the
value of issued shares and treasury shares in millions.
Change in Issued Capital and Treasury Shares
Number of Shares in Millions Value in Millions
Issued Capital Treasury Shares Issued Capital Treasury Shares
January 1, 2011 1,227 39 1,227 1,382
Issuing shares under share-based payments 1 0 1 0
Purchase of treasury shares 0 6 0 246
Reissuance of treasury shares under share-based payments 0 7 0 251
December 31, 2011 1,228 38 1,228 1,377
Issuing shares under share-based payments 1 0 1 0
Purchase of treasury shares 0 1 0 53
December 31, 2012 1,229 37 1,229 1,337
December 31, 2013 1,229 35 1,229 1,280
Authorized Shares
The Articles of Incorporation authorize the Executive Board
to increase the issued capital:
Up to a total amount of 250 million by issuing new no-par
value bearer shares against contributions in cash until June 7,
2015 (Authorized Capital I). The issuance is subject to the
statutory subscription rights of existing shareholders.
Up to a total amount of 250 million by issuing new no-par
value bearer shares against contributions in cash or in
kind until June 7, 2015 (Authorized Capital II). Subject to the
consent of the Supervisory Board, the Executive Board is
authorized to exclude the shareholders statutory
subscription rights in certain cases.
Up to a total amount of approximately 30 million by issuing
new no-par value bearer shares against contributions in
cash or in kind until June 7, 2015 (Authorized Capital III). The
new shares may only be used to grant shares to employees
of SAP AG and its subsidiaries (employee shares). The
shareholders subscription rights are excluded.
Contingent Shares
SAP AGs share capital is subject to a contingent capital
increase which may be efected only to the extent that
the holders or creditors of convertible bonds or stock options
issued or guaranteed by SAP AG or any of its directly or
indirectly controlled subsidiaries under certain share-based
payments exercise their conversion or subscription rights, and
no other methods for servicing these rights are used. As
at December 31, 2013, 100 million, representing 100 million
shares, was still available for issuance (2012: 100 million).
Share Premium
Share premium represents all capital contributed to SAP with
the proceeds resulting from the issuance of issued capital
in excess of their calculated par value. Share premium arises
mainly from issuance of issued capital, treasury shares
transactions, and share-based payments.
Retained Earnings
Retained earnings contain prior years undistributed proft
after tax and unrecognized pension costs. Unrecognized
pension costs comprise remeasurements relating to defned
beneft pension plans and similar obligations.
Other Comprehensive Income
The component of other comprehensive income before tax
that will be reclassifed to proft or loss in the future includes
the following items:
Items Recognized in Other Comprehensive Income that will be Reclassifed to Proft or Loss Before Tax
millions
2013 2012 2011
Gains (losses) on exchange differences 576 214 106
Gains (losses) on remeasuring available-for-sale financial assets 79 33 6
Reclassification adjustments on available-for-sale financial assets 19 20 1
Available-for-sale financial assets 60 13 7
Gains (losses) on cash flow hedges 78 21 23
Reclassification adjustments on cash flow hedges 78 42 22
Cash flow hedges 0 63 1
Treasury Shares
By resolution of SAP AGs General Meeting of Shareholders
held on June 4, 2013, the authorization granted by the General
Meeting of Shareholders of June 8, 2010, regarding the
acquisition of treasury shares was revoked to the extent it had
not been exercised at that time, and replaced by a new
authorization of the Executive Board of SAP AG to acquire, on
or before June 3, 2018, shares of SAP AG representing a pro
rata amount of capital stock of up to 120 million in aggregate,
provided that the shares purchased under the authorization,
together with any other shares in the Company previously
acquired and held by, or attributable to, SAP AG do not account
for more than 10% of SAP AGs issued share capital. Although
treasury shares are legally considered outstanding, there are
no dividend or voting rights associated with shares held in
treasury. We may redeem or resell shares held in treasury, or
we may use treasury shares for the purpose of servicing option
or conversion rights under the Companys share-based
payment plans. Also, we may use shares held in treasury as
consideration in connection with mergers with, or acquisitions
of, other companies.
Miscellaneous
Under the German Stock Corporation Act (Aktiengesetz), the
total amount of dividends available for distribution to SAP AGs
shareholders is based on the profts of SAP AG as reported
in its statutory fnancial statements, which are prepared under
the accounting rules in the German Commercial Code
(Handelsgesetzbuch). For the year ended December 31, 2013,
the Executive Board of SAP AG intends to propose a dividend
of 1.00 per share (that is, an estimated total dividend of
1,194 million), to be paid from the profts of SAP AG.

Dividends per share for 2012 and 2011 were 0.85 and 1.10
respectively and were paid in the succeeding year.

(21) ADDItIOnAl CApItAl DISClOSurES
Capital Structure Management
The primary objective of our capital structure management
is to maintain a strong fnancial profle for investor, creditor, and
customer confdence, and to support the growth of our business.
We seek to maintain a capital structure that will allow us to
cover our funding requirements through the capital markets at
reasonable conditions, and in so doing, ensure a high level of
independence, confdence, and fnancial fexibility.
Based on our strong corporate fnancial profle and our excellent
capital market reputation, we have so far successfully executed
external fnancing transactions without an external rating.
However, we will continue to closely monitor our fnancing situ-
ation to determine whether not having an external rating
continues to be appropriate.
Capital Structure
2013 2012 Change (in %)
millions % of
Total equity
and liabilities
millions % of
Total equity
and liabilities
Equity 16,048 59 14,133 54 14
Current liabilities 6,347 23 6,546 25 3
Non-current liabilities 4,699 17 5,627 21 16
Liabilities 11,046 41 12,173 46 9
Total equity and liabilities 27,094 100 26,306 100 3
Our fnancing activities improved our debt ratio (defned as the
ratio of total liabilities to total equity and liabilities, expressed
as a percentage) to 41% at the end of 2013 (as compared to
46% at the end of 2012). The ratio of total fnancial debt to
total equity and liabilities decreased by 3% to 16% at the end
of 2013 (19% as at December 31, 2012). Total fnancial debt
consists of current and non-current bonds or private
placements. For more information about our fnancial debt,
see Note (17).
Looking ahead to fnancing activities in 2014, the Company
intends to repay a 500 million Eurobond and an 86 million
German promissory note when they both mature in April.
While we monitor these ratios continuously, our main focus
is on the management of our net liquidity position as outlined
in the following table:
Group Liquidity of SAP Group
millions
2013 2012 Change
Cash and cash equivalents 2,748 2,477 271
Current investments 93 15 78
Group liquidity 2,841 2,492 349
Current financial debt 586 600 14
Net liquidity 1 2,255 1,892 363
Non-current financial debt 3,722 4,394 672
Net liquidity 2 1,467 2,502 1,035
Net liquidity 1 is group liquidity minus current fnancial debt.
In 2013 we paid back a 600 million Eurobond, which was
almost fully compensated by reclassifcations of 586 million
from non-current fnancial debt to current fnancial debt due
to changes in the respective maturity profle.
Net liquidity 2 is net liquidity 1 minus non-current fnancial
debt.
Improvements of our net liquidity ratios since December 31,
2012 are mainly due to positive cash infows from our
operations, which were partly ofset by cash outfows for
acquisitions (such as hybris) and dividend payments.
We intend to reduce our fnancial debt as and when the debt
falls due. We will consider issuing new debt, such as bonds
or U.S. private placements, on an as-needed basis only and if
market conditions are advantageous.
Distribution Policy
Our general intention is to remain in a position to return excess
liquidity to our shareholders by distributing annual dividends
and repurchasing shares. The amount of future dividends and
the extent of future repurchases of shares will be balanced
with our efort to continue to maintain an adequate liquidity
position.
In 2013, we were able to distribute 1,013 million in dividends
from our 2012 proft (as compared to 1,310 million in
2012 and 713 million in 2011 related to 2011 and 2010 proft,
respectively), representing 0.85 per share. Aside from the
distributed dividend, in 2013, 2012, and 2011 we also returned
0 million, 53 million, and 246 million respectively to our
shareholders by repurchasing our own shares.
As a result of our equity-settled share-based payments
transactions (as described in Note (27)) we have commitments
to grant SAP shares to employees. We intend to meet these
commitments by reissuing treasury shares or issuing ordinary
shares. For more information about contingent capital, see
Note (20).

(22) OthEr FInAnCIAl COmmItmEntS AnD
COntInGEnt lIAbIlItIES
Other Financial Commitments
Our other fnancial commitments as at December 31, 2013, and
2012, were as follows:
millions
2013 2012
Operating leases 1,204 923
Contractual obligations for acquisition of property,
plant, and equipment and intangible assets
80 66
Other purchase obligations 424 522
Purchase obligations 504 588
Total 1,708 1,511
Our operating leases relate primarily to the lease of ofce space,
hardware, and cars, with remaining non-cancelable lease terms
between less than one and 35 years. On a limited scale, the
operating lease contracts include escalation clauses (based,
for example, on the consumer price index) and renewal options.
The contractual obligations for acquisition of property, plant,
and equipment and intangible assets relate primarily to the
construction of new and existing facilities, hardware, software,
patents, ofce equipment, and vehicle purchase obligations.
The remaining obligations relate mainly to marketing, consult-
ing, maintenance, license agreements, and other third-party
agreements. Historically, the majority of such purchase
obligations have been realized.
Commitments under operating leasing contracts and purchase
obligations as at December 31, 2013, were as follows:
millions
Operating Leases Purchase Obligations
Due 2014 235 282
Due 20152018 561 186
Due thereafter 408 36
Total 1,204 504
Our rental and operating lease expenses were 273 million,
277 million, and 241 million for the years 2013, 2012, and
2011, respectively.
Contingent liabilities
In the normal course of business, we usually indemnify our
customers against liabilities arising from a claim that our
software products infringe a third partys patent, copyright,
trade secret, or other proprietary rights. In addition, we
occasionally grant function or performance guarantees in
routine consulting contracts or development arrangements.
Also, our software license agreements generally include a
clause guaranteeing that the software substantially conforms
to the specifcations as described in applicable documentation
for a period of six to 12 months from delivery. Our product
and service warranty liability, which is measured based on
historical experience and evaluation, is included in other
provisions (see Note (18b)).
For contingent liabilities related to litigation matters,
see Note (23).
(23) 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 we
have acquired, claims that relate to customers demanding
indemnifcation for proceedings initiated against them based
on their use of SAP software, and claims that relate to
customers being dissatisfed with the products and services
that we have delivered to them. 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 outfow of resources embodying economic benefts.
For the TomorrowNow litigation, we have recorded a provision
of US$306 million (US$306 million on December 31, 2012,
US$272 million on December 31, 2011, US$1.3 billion on
December 31, 2010). 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 efect
on our business, fnancial position, proft, or cash fows.
Consequently, the provisions currently recorded for these
other claims and lawsuits are neither individually nor in
aggregate material to SAP.
However, the outcome of litigation and other claims or lawsuits
is intrinsically subject to considerable uncertainty. Managements
view of the litigation may also change in the future. Actual
outcomes of litigation and other claims or lawsuits may difer
from the assessments made by management in prior periods,
which could result in a material impact on our business,
fnancial position, proft, cash fows, or reputation. Most of the
litigations and claims are of a very individual nature and claims
are either not quantifed by the claimants or claim amounts
quantifed are, based on historical evidence, not expected to be
a good proxy for the expenditure that would be required to
settle the case concerned. The specifcs of the jurisdictions
where most of the claims are located further impair the
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, Oracles damages experts presented
an amount of US$408 million based on lost profts and
disgorgement of infringers proft.
c) During the trial, members of Oracle management presented,
as part of their testimonies, amounts of up to US$5 billion.
Oracles damages expert presented a damages estimate of
at least US$1.655 billion under a hypothetical license
theory. Oracles 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 profts and infringers profts 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 profts and infringers profts.
As such, SAP fled post-trial motions asking the judge to
overturn the judgment. A hearing on the post-trial motions was
held in July 2011. On September 1, 2011, the trial judge issued
an order which set aside the jury verdict and vacated that part
of the judgment awarding US$1.3 billion in damages. The trial
judge also gave Oracle the choice of accepting reduced
damages of US$272 million or having a new trial based on lost
profts and infringer's profts. Oracle fled a motion seeking an
early appeal from the ruling vacating the jury's damages award,
predictability of the outcome of the cases. Therefore, it is not
practicable to reliably estimate the fnancial efect that
these litigations and claims would have if SAP were to incur
expenditure for these cases.
For more information about the provisions recorded
for litigation, see Note (18b).
Among the claims and lawsuits are the following:
Intellectual property litigation
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 Americas parent company
SAP AG (SAP). Oracle fled 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 misapprop-
riated proprietary, copyrighted software products and other
confdential materials developed by Oracle to service its own
customers. The lawsuit sought 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
provided 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.
which was denied by the judge. Consequently, Oracle elected
to proceed with a new trial. In lieu of a new trial, the parties
stipulated to a judgment of US$306 million while each preserving
all rights for appeal. Both parties have fled their respective
notice of appeal. On appeal, Oracle is seeking three forms of
relief: (1) reinstatement of the November 2010 US$1.3 billion
verdict; (2) as a frst alternative, a new trial at which Oracle
may again seek hypothetical license damages (based in part on
evidence of alleged saved development costs) plus SAP's
alleged infringer's profts without any deduction of expenses
(Oracle does not put a number on its claim for the requested
new trial); and (3) as a second alternative, increase of the
remittitur (alternative to new trial) to US$408.7 million (versus
the US$272 million Oracle had previously rejected). SAP has
dismissed its cross-appeal. The hearing is tentatively
scheduled for May 13, 2014, though this is subject to change.
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 sub-
poenas to SAP and TomorrowNow. The DOJ investigation has
been resolved by way of a plea agreement which includes
TomorrowNow pleading guilty to 11 counts of violations of the
Computer Fraud and Abuse Act, one count of criminal
copyright infringement, the payment of a US$20 million fne
and three years probation. No charges were brought against
SAP AG or subsidiaries thereof other than TomorrowNow.
In April 2007, United States-based Versata Software, Inc.
(formerly Trilogy Software, Inc.) (Versata) instituted legal pro-
ceedings in the United States District Court for the Eastern
District of Texas against SAP. Versata alleged that SAPs
products infringe one or more of the claims in each of fve
patents held by Versata. In its complaint, Versata sought
unspecifed monetary damages and permanent injunctive
relief. The frst 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 jurys damages award and ordered a new trial on damages.
The retrial was held in May 2011. The jury returned a verdict
in favor of Versata and awarded Versata US$345 million for
past damages. In September 2011, the judge denied SAPs post-
trial motions with the exception of reducing the damages
verdict by US$16 million to approximately US$329 million. The
judge also ordered approximately US$60 million in pre-judgment
interest. Additionally, the judge granted Versatas request for
a broad injunction which prohibits SAP from 1) selling products
in the United States with the infringing functionality, 2) pro-
viding maintenance to or accepting maintenance revenue from
existing customers in the United States until such customers
disable the infringing functionality and verify such disablement,
and 3) licensing additional users to existing customers in the
United States until such customers disable the infringing
functionality and verify such disablement. Finally, the judge
stayed the injunction pending the outcome of an appeal.
Both parties appealed to the U.S. Court of Appeals for the
Federal Circuit. The appeal hearing occurred in February 2013
and a decision was issued on May 1, 2013. The three-judge
panel ruled in Versatas favor on infringement and damages,
leaving both fully intact. The past damages verdict currently
stands at approximately US$390 million. Regarding the
injunction, the court ruled that the injunction was too broad,
stating that SAP should be able to provide maintenance or
additional seats for prior customers of the infringing products,
so long as the maintenance or the additional seat does
not involve, or allow access to, the enjoined capability where
enjoined capability is defned as the capability to execute a
pricing procedure using hierarchical access of customer and
product data. SAP fled a petition seeking rehearing by the
three-judge panel that issued this decision and/or by the entire
appeals court. The appeals court requested that Versata
respond to SAPs petition no later than July 29, 2013. In August
2013, the appeals court denied SAPs request for rehearing and
issued its mandate passing jurisdiction to the district court.
Separately, SAP fled a petition with the United States Patent
and Trademark Ofce (USPTO) challenging the validity of
the asserted Versata patent. In January 2013, the USPTO granted
SAPs request to reconsider the validity of Versatas patent
and instituted the relevant procedure (transitional post grant
review). A decision was issued in June 2013 rendering all
challenged patent claims (including all the patent claims SAP
was found to have infringed) unpatentable. Versata fled
with the USPTO a request seeking reconsideration of the
decision on six diferent grounds. The USPTO invited SAP to fle
an opposition responding to two of the six grounds. On
September 13, 2013, the USPTO denied Versatas request for
reconsideration.
In June 2013, following the determination of unpatentability,
SAP fled a request with the appeals court to stay the litigation
pending review of the USPTO decision. That request was
denied in early July 2013.
In December 2013, SAP fled with the United States Supreme
Court a petition for a writ of certiorari to review the decisions
of the appeals court. That petition was denied in January 2014.
Immediately thereafter, Versata requested that the District
Court dismiss its remaining claims for injunctive and equitable
relief. The District Court granted that request and deemed
the previously entered judgment fnal. On that same day, SAP
requested that the District Court vacate the judgment or stay
the litigation, based on the USPTO decision declaring Versatas
patent claims unpatentable. That request is pending.
In August 2007, United States-based elcommerce.com, Inc.
(elcommerce) instituted legal proceedings in the United States
against SAP. elcommerce alleged that SAPs products infringe
one or more of the claims in one patent held by elcommerce. In
its complaint, elcommerce sought unspecifed monetary
damages and permanent injunctive relief. The court in East
Texas granted SAPs 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 fnal judgment
regarding non-infringement by SAP. elcommerce has appealed
the courts Markman ruling. The hearing for the appeal was
held in May 2012, and we are awaiting the courts decision. SAP
also fled a reexamination request with the USPTO to invalidate
elcommerces patent. On September 23, 2013, the USPTO
issued a decision invalidating the patent. elcommerce has
sought rehearing from the USPTO.
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 alleged
that SAPs products infringe one or more of the claims in fve
patents held by TecSec. In its complaint, TecSec seeks unspeci-
fed 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. The appeal hearing occurred in March 2013.
The appellate court issued its decision in October 2013. That
decision did not end the litigation and therefore we expect the
lawsuit to resume at the district court in the coming months.
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 fve 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 six reexaminations fled with
the USPTO. In September 2013, the USPTO issued a decision
on four of the six reexaminations, invalidating every claim
of each of the four patents. SAP is awaiting a decision on the
two remaining reexamination requests.
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 fled a motion to dismiss
which was rejected. A trial date which was scheduled for June
2011 has been postponed.
In November 2012, SAP fled a motion to dismiss based on
a procedural aspect of the case. The court followed SAPs
argument and dismissed the claim by Securinfo. Securinfo
appealed against this decision on December 19, 2012.
In March 2013, the court dismissed Securinfos appeal.
Securinfo appealed against this decision to the Supreme
Court of South Africa. The Supreme Court granted leave to
appeal to the full bench of the court which had originally
dismissed Securinfos appeals. Securinfo has applied for an
appeal hearing date. The court has not yet provided a date.
We are subject to ongoing audits by domestic and foreign tax
authorities. Along with many other companies operating in
Brazil, we are involved in various proceedings with Brazilian
authorities regarding assessments and litigation matters
on non-income taxes on intercompany royalty payments and
intercompany services. The total potential amount related to
these matters for all applicable years is approximately 76
million. We have not recorded a provision for these matters, as
we believe that we will prevail on these matters.
For more information about income tax risk-related litigation,
see Note (10).
(24) FInAnCIAl rISk FACtOrS
We are exposed to various fnancial risks, such as market
risks (including foreign currency exchange rate risk, interest
rate risk, and equity price risk), credit risk, and liquidity risk.
Market Risk
a) Foreign Currency Exchange Rate Risk
Foreign currency exchange rate risk is the risk of loss due to
adverse changes in foreign currency exchange rates. Under
IFRS, foreign currency exchange rate risks arise on account of
monetary fnancial instruments denominated in currencies
other than the functional currency where the non-functional
currency is the respective risk variable; translation risks are not
taken into consideration.
As a globally active enterprise, we are subject to risks
associated with fuctuations in foreign currencies with regard
to our ordinary operations. Since the Groups entities mainly
conduct their operating business in their own functional
currencies, our risk of exchange rate fuctuations from ongoing
ordinary operations is not considered signifcant. However,
occasionally we generate foreign currency-denominated
receivables, payables, and other monetary items by transacting
in a currency other than the functional currency. To mitigate
the extent of the associated foreign currency exchange rate
risk, the majority of these transactions are hedged as
described in Note (25).
In rare circumstances, transacting in a currency other than the
functional currency also leads to embedded foreign currency
derivatives being separated and measured at fair value through
proft or loss.
In addition, the Intellectual Property (IP) holders in the SAP Group
are exposed to risks associated with forecasted intercompany
cash fows in foreign currencies. These cash fows arise
out of royalty payments from subsidiaries to the respective
IP holder. The royalties are linked to the subsidiaries external
revenue. This arrangement leads to a concentration of the
foreign currency exchange rate risk with the IP holders, as the
royalties are mostly denominated in the subsidiaries local
currencies, while the functional currency of the IP holders with
the highest royalty volume is the euro. The highest foreign
currency exchange rate exposure of this kind relates to the
currencies of subsidiaries with signifcant operations, for
example the U.S. dollar, the pound sterling, the Japanese yen,
the Swiss franc, and the Australian dollar.
Generally, we are not exposed to any signifcant foreign
currency exchange rate risk with regard to our investing and
fnancing activities, as such activities are normally conducted
in the functional currency of the investing or borrowing
entity. However, we were exposed to a cash fow risk from the
consideration to be paid in U.S. dollars for the acquisition of
hybris in 2013 and of SuccessFactors and Ariba, Inc. in 2012 as
the funds were provided through our free cash and acquisition
term loans, both mostly generated in euros. For more
information, see Note (25).
b) Interest Rate Risk
Interest rate risks result from changes in market interest
rates, which can cause changes in the fair values of fxed rate
instruments and in the interest to be paid or received for
variable rate instruments. We are exposed to interest rate risk
as a result of our investing and fnancing activities mainly in
euros and U.S. dollars.
As at December 31, 2013, our liquidity was mainly invested in
time deposits and bonds with fxed yields, and money market
instruments with variable yields, held as cash equivalents
and current and non-current investments. Since the fxed yield
time deposits held at year-end have short maturities, they do
not expose us to a substantial fair value interest rate risk.
However, a fair value interest rate exposure arises from the
bonds classifed as available for sale. Also, we are exposed to a
cash fow risk from our cash held at banks spread across
the world and the variable yield money market funds, mainly
held in the United States.
As at December 31, 2013, we were exposed to an interest rate
risk from our fnancing activities (for more information
about the individual instruments, see Note (17b)) as all our
issued bonds, the U.S. private placement notes, and the
remaining tranche of the German promissory notes pay fxed
interest leading to a fair value risk.
c) Equity Price Risk
Equity price risk is the risk of loss due to adverse changes in
equity markets. We are exposed to such risk with regard to
our investments in listed equity securities (2013: 83 million;
2012: 52 million) and our share-based payments (for the
exposure from these plans, see Note (27)).
Credit Risk
Credit risk is the risk of economic loss of principal or fnancial
rewards stemming from a counterpartys failure to repay or
service debt according to the contractual obligations.

To reduce the credit risk in investments, we arranged to receive
rights to collateral for certain investing activities in the full
amount of the investment volume, which we would be allowed
to make use of only in the case of default of the counterparty
to the investment.
With the exception of these transactions, we have not executed
signifcant agreements to reduce our overall credit risk
exposure, such as master netting arrangements. Therefore, the
total amounts recognized as cash and cash equivalents,
current investments, loans and other fnancial receivables, and
derivative fnancial assets represent our maximum exposure
to credit risks, except for the agreements mentioned above.
liquidity risk
Liquidity risk results from the potential inability to meet
fnancial obligations, such as payments to suppliers or
employees. A maturity analysis that provides the remaining
contractual maturities of all our fnancial liabilities held at
December 31, 2013, is shown in the table below. Financial
liabilities shown in the table below for which repayment can be
requested by the contract partner at any time are assigned
to the earliest possible period. Variable interest payments were
calculated using the last relevant interest rate fxed as at
December 31, 2013. As we settle our derivative contracts gross,
we show the pay and receive legs separately for all our
currency and interest rate derivatives, whether or not the fair
value of the derivative is negative. The cash outfows for
the currency derivatives are translated using the applicable
forward rate.
The cash fows for unrecognized but contractually agreed
fnancial commitments are shown in Note (22).
Contractual Maturities of Financial Liabilities and Financial Assets
millions
Carrying
Amount
Contractual Cash Flows
12/31/2013 2014 2015 2016 2017 2018 Thereafter
Non-derivative financial liabilities
Trade payables 640 640 0 0 0 0 0
Financial liabilities 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 assets
Derivative financial liabilities
Currency derivatives without designated hedge relationship 144
Cash outflows 1,975 9 9 8 8 15
Cash inflows 1,885 0 0 0 0 0
Currency derivatives with designated hedge relationship 3
Cash outflows 178 0 0 0 0 0
Cash inflows 174 0 0 0 0 0
Interest rate derivatives with designated hedge relationship 23
Cash outflows 12 17 27 39 37 192
Cash inflows 30 35 35 35 28 123
Total of derivative financial liabilities 170 76 9 1 12 17 84
Derivative financial assets
Cash inflows 2,569 0 0 0 0 0
Cash outflows 12 25 29 36 21 24
Cash inflows 19 33 33 33 16 16
Total of derivative financial assets 61 60 8 4 3 5 8
Total of derivative financial liabilities and assets 109 16 17 3 15 22 92
Contractual Maturities of Financial Liabilities and Financial Assets
millions
Carrying
Amount
Contractual Cash Flows
12/31/2012 2013 2014 2015 2016 2017 Thereafter
Non-derivative financial liabilities
Trade payables 684 684 0 0 0 0 0
Financial liabilities 5,051 757 705 874 534 904 1,922
Total of non-derivative financial liabilities 5,735 1,441 705 874 534 904 1,922
Derivative financial liabilities and assets
Derivative financial liabilities
Cash outflows 2,996 10 10 10 9 26
Cash inflows 2,875 0 0 0 0 0
Total of derivative financial liabilities 197 124 10 10 10 9 26
Derivative financial assets
Cash inflows 2,735 0 0 0 0 0
Total of derivative financial assets 75 70 0 0 0 0 0
Total of derivative financial liabilities and assets 122 54 10 10 10 9 26
The change in our non-derivative fnancial liabilities which
is due to scheduled repayments will lead to an overall decrease
in cash outfows compared to the end of 2012. For more
information, see Note (17b).
(25) FInAnCIAl rISk mAnAGEmEnt
We manage market risks (including foreign currency exchange
rate risk, interest rate risk, and equity price risk), credit risk,
and liquidity risk on a Group-wide basis through our global
treasury department. Our risk management and hedging strategy
is set by our treasury guideline and other internal guidelines,
and is subject to continuous internal risk analysis. Derivative
fnancial instruments are only purchased to reduce risks and
not for speculation, which is defned as entering into derivative
instruments without a corresponding underlying transaction.
In the following sections we provide details on the management
of each respective fnancial risk and our related risk exposure.
In the sensitivity analyses that show the efects of hypothetical
changes of relevant risk variables on proft or other comprehen-
sive income, we determine the periodic efects by relating
the hypothetical changes in the risk variables to the balance of
fnancial instruments at the reporting date.
Foreign Currency Exchange Rate Risk Management
We continually monitor our exposure to currency fuctuation
risks based on monetary items and forecasted transactions
and pursue a Group-wide strategy to manage foreign currency
exchange rate risk, using derivative fnancial instruments,
primarily foreign exchange forward contracts, as appropriate,
with the primary aim of reducing proft or loss volatility.
Currency Hedges Without Designated Hedge Relationship
The foreign exchange forward contracts we enter into to ofset
exposure relating to foreign currency denominated monetary
assets and liabilities are not designated as being in a hedge
accounting relationship, because the realized currency gains
and losses from the underlying items are recognized in proft
or loss in the same periods as the gains and losses from the
derivatives.
Currency hedges without a designated hedge relationship also
include foreign currency derivatives embedded in non-
derivative host contracts that are separated and accounted for
as derivatives according to the requirements of IAS 39.
In addition, during 2012 we held foreign currency options
and deal-contingent forward contracts to partially hedge
the cash fow risk from the consideration paid in U.S. dollars
for the acquisitions of SuccessFactors and Ariba.
Currency Hedges with Designated Hedge Relationship
(Cash Flow Hedges)
We enter into derivative fnancial instruments, primarily foreign
exchange forward contracts, to hedge signifcant forecasted
cash fows (royalties) from foreign subsidiaries denominated in
foreign currencies with a defned set of hedge ratios and a
hedge horizon of up to 12 months. Specifcally, we exclude the
interest component and only designate the spot rate of the
foreign exchange forward contracts as the hedging instrument
to ofset anticipated cash fows relating to the subsidiaries
with signifcant operations, including the United States, the
United Kingdom, Japan, Switzerland, and Australia. We generally
use foreign exchange derivatives that have maturities of 12
months or less, which may be rolled over to provide continuous
coverage until the applicable royalties are received.
In 2013, net gains totaling 57 million (2012: net gains of
17 million; 2011: net losses of 14 million) resulting from the
change in the component of the derivatives designated as
hedging instruments were recorded in other comprehensive
income.
For the years ended December 31, 2013 and 2012, no previously
highly probable transaction designated as a hedged item in
a foreign currency cash fow hedge relationship ceased to be
probable. Therefore, we did not discontinue any of our cash
fow hedge relationships. Also, we identifed no inefectiveness
in all years reported. In 2013, we reclassifed net gains of 57
million (2012: net losses of 24 million; 2011: net losses of 13
million) from other comprehensive income to proft or loss due
to the hedged items afecting income. Generally, the cash fows
of the hedged forecasted transactions are expected to occur
and to be recognized in proft or loss monthly within a time
frame of 12 months from the date of the statement of fnancial
position. It is estimated that 20 million of the net gains
recognized in other comprehensive income in 2013, will be
reclassifed from other comprehensive income to proft or loss
during fscal year 2014.
Foreign Currency Exchange Rate Exposure
In line with our internal risk reporting process, we use the cash
fow-at-risk method to quantify our risk positions with regard
to our forecasted intercompany transactions and value-at-risk
for our foreign currency denominated fnancial instruments.
In order not to provide two diferent methodologies, we have
opted to disclose our risk exposure based on a sensitivity
analysis considering the following:
Since the SAP Groups entities generally operate in their
functional currencies, the majority of our non-derivative monetary
fnancial instruments, such as cash and cash equivalents,
trade receivables, trade payables, loans to employees and
third parties, bank liabilities, and other fnancial liabilities, are
denominated in the respective entities functional currency.
Thus, a foreign currency exchange rate risk in these
transactions is nearly non-existent. In exceptional cases and
limited economic environments, operating and fnancing
transactions are denominated in currencies other than the
functional currency, leading to a foreign currency exchange
rate risk for the related monetary instruments. Where we
hedge against currency impacts on cash fows, these foreign
currency-denominated fnancial instruments are
economically converted into the functional currency by the
use of forward exchange contracts or options. Therefore,
fuctuations in foreign currency exchange rates neither have
a signifcant impact on proft nor on other comprehensive
income with regard to our non-derivative monetary fnancial
instruments.
Income or expenses recorded in connection with the non-
derivative monetary fnancial instruments discussed
above are mainly recognized in the relevant entitys functional
currency. Therefore, fuctuations in foreign currency
exchange rates neither have a signifcant impact on proft
nor on other comprehensive income in this regard.
Our free-standing derivatives designed for hedging foreign-
currency exchange rate risks almost completely balance
the changes in the fair values of the hedged item attributable
to exchange rate movements in the Consolidated Income
Statements in the same period. As a consequence, the
hedged items and the hedging instruments are not exposed
to foreign currency exchange rate risks, and thereby have
no efect on proft.
Consequently, we are only exposed to signifcant foreign
currency exchange rate fuctuations with regard to:
Derivatives held within a designated cash fow hedge
relationship (excluding the interest element, which is not
part of the assigned cash fow hedge relationships)
Foreign currency embedded derivatives
The foreign currency options held as at December 31, 2011,
in connection with the acquisition of SuccessFactors.
Where we do not have a signifcant exposure towards a single
currency, we disclose our sensitivity to our major foreign
currencies (as described in Note (24)) in total.
Foreign Currency Sensitivity
millions
Effects on Other Non-Operating Expense, Net Effects on Other Comprehensive Income
2013 2012 2011 2013 2012 2011
Derivatives held within a designated cash flow hedge relationship
All major currencies 10% 57 60 70
All major currencies +10% 57 60 70
Embedded derivatives
Swiss franc 10% 32 38 41
Swiss franc +10% 32 38 41
other currencies 10% 3 3 0
other currencies +10% 3 3 0
Freestanding foreign currency options related to SuccessFactors
acquisition
U.S. dollar 10% 0 0 6
U.S. dollar +10% 0 0 50
Our foreign currency exposure as at December 31 (and if
year-end exposure is not representative, also our average/
high/low exposure) was as follows:
Foreign Currency Exposure
billions
2013 2012
Year-end exposure towards all our major currencies 0.9 1.0
Average exposure 1.0 2.4
Highest exposure 1.1 3.7
Lowest exposure 0.9 1.0
During 2013, our sensitivity to foreign currency exchange rate
fuctuations remained fairly stable compared to the year ended
December 31, 2012.
Interest Rate Risk Management
The aim of our interest rate risk management is to reduce
proft or loss volatility and optimize our interest result by
creating a balanced structure of fxed and variable cash fows.
We therefore manage interest rate risks by adding interest
rate-related derivative instruments to a given portfolio of
investments and debt fnancing.
As at December 31, 2013, a cash fow interest rate risk existed
with regard to our cash at banks of 1.2 billion and our
investing activities in money market instruments with variable
yields in the amount of 487 million. A fair value interest rate
risk arises from the fxed yield bonds classifed as available-for-
sale and accounted for at fair value as well as the fxed rate
fnancing transactions held at amortized cost.
100% (2012: 100%) of our total interest-bearing fnancial
liabilities outstanding as at December 31, 2013, had a fxed
interest rate whereas 40% (2012: 29%) of our interest-bearing
cash, cash equivalents, time deposits, and available-for-sale
fnancial assets had a fxed interest rate.
Due to the designation of interest rate payer swaps in a cash
fow hedge relationship, the interest rate changes afect
the respective amounts recorded in other comprehensive
income. The movements related to the interest rate swaps
variable leg were not refected in the sensitivity calculation,
as they ofset the variable interest rate payments for the
German private placement (SSD). We therefore only con-
sidered interest rate sensitivity in discounting the interest
rate swaps fxed leg cash fows in the equity-related
sensitivity calculation.
The designation of interest rate receiver swaps in a fair value
hedge relationship leads to interest rate changes afecting
Financial Income, net. The fair value movements related to
the interest rate swaps are not refected in the sensitivity
calculation, as they ofset the fxed interest rate payments
for the bonds and private placements as hedged items.
However, changes in market interest rates afect the amount
of interest payments from the interest rate swap. As a
consequence, they are included in the in the proft-related
sensitivity calculation.
Due to the current low interest rate level we base our sensitivity
analyses on a yield curve shift of +100/20 basis points to
avoid negative interest rates.
If, on December 31, 2013, 2012, and 2011, interest rates had
been 100 basis points higher (20 basis points lower), this
would not have had a material efect on the following:
The gains/losses on available-for-sale fnancial assets
in other comprehensive income
Financial income, net for our variable interest rate
investments and fnancial debt
The efective portion of the interest rate cash fow hedge
The variable interest payments from the receiver swaps.
Derivatives with Designated Hedge Relationship
(Fair Value Hedges)
The majority of our investments are based on variable rates
and/or short maturities while all our fnancing transactions are
based on fxed rates and long maturities. To match the interest-
rate risk from our fnancing transactions to our investments
we use receiver interest rate swaps to convert certain of our
fxed rate fnancial liabilities to foating and by this means
secure the fair value of the swapped fnancing transactions.
The desired fx-foating mix of our net debt is set by the
Treasury Committee. Interest rate swaps included, 44% (2012:
100%) of our total interest-bearing fnancial liabilities
outstanding as at December 31, 2013, had a fxed interest rate.
None of the fair value adjustment from the receiver swaps, the
basis adjustment on the underlying hedged items held in fair
value hedge relationships, and the diference between the two
recognized in Financial Income, net is material in any of the
years presented.
Interest Rate Exposure
A sensitivity analysis is provided to show the impact of our
interest rate risk exposure on proft or loss and equity in
accordance with IFRS 7, considering the following:
Changes in interest rates only afect the accounting for non-
derivative fxed rate fnancial instruments if they are
recognized at fair value. Therefore, such interest rate changes
do not change the carrying amounts of our non-derivative
fnancial liabilities as we account for them at amortized cost.
On December 31 of each year-end reported, we had fxed rate
bonds classifed as available-for-sale as described in Note
(24). We therefore consider interest rate changes relating to
the fair value measurement of such fxed rate non-derivative
fnancial assets classifed as available-for-sale in the equity-
related sensitivity calculation.
Income or expenses recorded in connection with non-
derivative fnancial instruments with variable interest rates
are subject to interest rate risk if they are not hedged items in
an efective hedge relationship. Thus, we take into
consideration interest rate changes relating to our variable-
rate fnancing and our investments in money market
instruments in the proft-related sensitivity calculation.
Our interest rate exposure as at December 31 (and if year-end
exposure is not representative, also our average/high/low
exposure) was as follows:
Interest rate risk exposure
billions
2013 2012
Year-End Average High Low Year-End Average High Low
Fair value interest rate risk
From investments 0.04 0.06 0.13 0.04 0.03 0.10 0.30 0
Cash flow interest rate risk
From investments (incl. cash) 1.73 2.23 2.71 1.73 1.80 2.41 3.03 1.80
From financing 0 0.31 1.00 0 0 1.10 3.20 0
From interest rate swaps 2.39 0.60 2.40 0 0 0 0 0
Equity Price Risk Management
Our investments in equity instruments with quoted market
prices in active markets (2013: 83 million; 2012: 52 million)
are monitored based on the current market value that is
afected by the fuctuations in the volatile stock markets world-
wide. An assumed 20% increase (decrease) in equity prices
as at December 31, 2013 (2012), would not have a material
impact on the value of our investments in marketable equity
securities and the corresponding entries in other
comprehensive income.
We are exposed to equity price risk with regard to our share-
based payments. In order to reduce resulting proft or loss
volatility, we hedge certain cash fow exposures associated with
these plans through the purchase of derivative instruments,
but do not establish a designated hedge relationship. In our sen-
sitivity analysis we include the underlying share-based pay-
ments and the hedging instruments. Thus, we base the
calculation on our net exposure to equity prices as we believe
taking only the derivative instrument into account would
not properly refect our equity price risk exposure. An assumed
20% increase (decrease) in equity prices as at December 31,
2013, would have increased (decreased) our share-based
payment expenses by 126 million (90 million) (2012:
increased by 139 million (decreased by 117 million); 2011:
increased by 27 million (decreased by 25 million)).
Credit Risk Management
To mitigate the credit risk from our investing activities and
derivative fnancial assets, we conduct all our activities
only with approved major fnancial institutions and issuers that
carry high external ratings, as required by our internal treasury
guideline. Among its stipulations, the guideline requires that
we invest only in assets from issuers with a minimum rating of
at least BBB. We only make investments in issuers with
a lower rating in exceptional cases. Such investments were not
material in 2013. The weighted average rating of our fnancial
assets is in the range A to A. We pursue a policy of cautious
investments characterized by predominantly current
investments, standard investment instruments, as well as
a wide portfolio diversifcation by doing business with a variety
of counterparties.
liquidity risk management
Our liquidity is managed by our global treasury department
with the primary aim of maintaining liquidity at a level that is
adequate to meet our fnancial obligations.
Our primary source of liquidity is funds generated from our
business operations, which have historically been the primary
source of the liquid funds needed to maintain our investing and
fnancing strategy. The majority of our subsidiaries pool their
cash surplus to our global treasury department, which then
arranges to fund other subsidiaries requirements or invest any
net surplus in the market, seeking to optimize yields, while
ensuring liquidity, by investing only with counterparties and
issuers of high credit quality, as explained above. Hence, high
levels of liquid assets and marketable securities provide
a strategic reserve, helping keep SAP fexible, sound, and
independent.
Apart from efective working capital and cash management, we
have reduced the liquidity risk inherent in managing our day-
to-day operations and meeting our fnancing responsibilities by
arranging an adequate volume of available credit facilities with
various fnancial institutions on which we can draw if necessary.
In order to retain high fnancial fexibility, on November 13, 2013,
SAP AG entered into a 2.0 billion syndicated credit facility
agreement with an initial term of fve years ending in December
2018, efectively replacing the 1.5 billion credit facility from
2010. The use of the facility is not restricted by any fnancial
covenants. Borrowings under the facility bear interest of
EURIBOR or LIBOR for the respective currency plus a margin
of 22.5 basis points. We are also required to pay a commitment
fee of 7.88 basis points per annum on the unused available
credit. We have never drawn on the facility.
Additionally, as at December 31, 2013, and 2012, SAP AG had
available lines of credit totaling 487 million and 489 million,
respectively. As at December 31, 2013, and 2012, there were no
borrowings outstanding under these lines of credit. As at
December 31, 2013, and 2012, certain subsidiaries had lines of
credit available that allowed them to borrow in local currencies
at prevailing interest rates up to 36 million and 48 million,
To further reduce our credit risk, we require collateral for
certain investments in the full amount of the investment
volume which we would be allowed to make use of in the case
of default of the counterparty to the investment. As such
collateral, we only accept bonds of non-fnancial corporations
with at least investment grade rating level.
In addition, the concentration of credit risk that exists when
counterparties are involved in similar activities by instrument,
sector, or geographic area is further mitigated by diversifcation
of counterparties throughout the world and adherence to an
internal limit system for each counterparty. This internal limit
system stipulates that the business volume with individual
counterparties is restricted to a defned limit, which depends
on the lowest ofcial long-term credit rating available by at
least one of the major rating agencies, the Tier 1 capital of the
respective fnancial institution, or participation in the German
Depositors Guarantee Fund or similar protection schemes.
We continuously monitor strict compliance with these counter-
party limits. As the premium for credit default swaps mainly
depends on market participants assessments of the credit-
worthiness of a debtor, we also closely observe the development
of credit default swap spreads in the market to evaluate
probable risk developments to timely react to changes if these
should manifest.
The default risk of our trade receivables is managed separately,
mainly based on assessing the creditworthiness of customers
through external ratings and our historical experience with
respective customers. Outstanding receivables are continuously
monitored locally. Credit risks are accounted for through
individual and portfolio allowances. For more information, see
Note (3). The impact of default on our trade receivables from
individual customers is mitigated by our large customer base
and its distribution across many diferent industries, company
sizes, and countries worldwide. For more information about
our trade receivables, see Note (13). For information about the
maximum exposure to credit risk, see Note (24).
Fair Values of Financial Instruments
millions
Category
2013 2012
Book Value
12/31/2013
Measurement Categories Fair Value
12/31/2013
Not in
Scope of
IFRS 7
Book Value
12/31/2012
12/31/2012
Not in
Scope of
IFRS 7
At
Amortized
Cost
At Cost At Fair
Value
At
Amortized
Cost
At Cost At Fair
Value
Assets
Cash and cash equivalents L&R 2,748 2,748 2,748 2,477 2,477 2,477
Trade receivables L&R 3,963 3,816 3,816 147 4,005 3,837 3,837 168
Debt investments L&R/AFS 38 38 29 29
Equity investments AFS/ 0 322 322 36 149 52 52 46
Other non-derivative financial assets L&R 214 214 119 159 159 84
Derivative assets
With hedging relationship 35 35 29 29
Without hedging relationship HFT 94 94 115 115
liabilities
Trade payables AC 895 640 640 255 933 684 684 249
Financial liabilities 4,506 5,248
Non-derivative financial liabilities AC 4,336 4,439 5,051 5,228
Derivatives
total financial instruments, net 2,168 1,802 0 319 2,018 47 964 738 149 28 589 49
Aggregation according to IAS 39
Financial assets
At fair value through profit or loss HFT 94 94 94 115 115 115
Available-for-sale AFS 360 0 360 360 230 149 81 81
Loans and receivables L&R 6,925 6,778 6,778 147 6,641 6,473 6,473 168
At amortized cost AC 5,231 4,976 5,079 255 5,984 5,735 5,912 249
Outside scope of IAS 39
Financial instruments related to employee benefit plans 119 119 84 84
Investment in associates 36 36 46 46
Derivatives with hedging relationship 9 9 9 27 27 27
respectively. There were no borrowings outstanding under
these credit facilities from any of our foreign subsidiaries as
at December 31, 2013, and 2012.
(26) ADDItIOnAl FAIr VAluE DISClOSurES On
FInAnCIAl InStrumEntS
Fair Value of Financial Instruments
We use various types of fnancial instruments in the ordinary
course of business which are grouped into the following
categories: loans and receivables (L&R), available-for-sale
(AFS), held-for-trading (HFT), and amortized cost (AC).

The table below shows the carrying amounts and fair values of
fnancial assets and liabilities by category of fnancial instrument
as well as by category of IAS 39. Where fnancial assets and
liabilities are shown as measured at fair value this is done on a
recurring basis. Since the line items trade receivables,
trade payables, and other fnancial assets contain both
fnancial and non-fnancial assets or liabilities (such as other
taxes or advance payments), the non-fnancial assets or
liabilities are shown in the column headed Not in Scope of
IFRS 7 to allow a reconciliation to the corresponding line items
in the Consolidated Statements of Financial Position. The
carrying amounts and fair values of our fnancial instruments
as at December 31 were as follows:
Fair Values of Financial Instruments
millions
Category
2013 2012
Book Value
12/31/2013
12/31/2013
Not in
Scope of
IFRS 7
Book Value
12/31/2012
12/31/2012
Not in
Scope of
IFRS 7
At
Amortized
Cost
At Cost At Fair
Value
At
Amortized
Cost
At Cost At Fair
Value
Assets
Cash and cash equivalents L&R 2,748 2,748 2,748 2,477 2,477 2,477
Trade receivables L&R 3,963 3,816 3,816 147 4,005 3,837 3,837 168
Debt investments L&R/AFS 38 38 29 29
Equity investments AFS/ 0 322 322 36 149 52 52 46
Other non-derivative financial assets L&R 214 214 119 159 159 84
Derivative assets
liabilities
Trade payables AC 895 640 640 255 933 684 684 249
Financial liabilities 4,506 5,248
Non-derivative financial liabilities AC 4,336 4,439 5,051 5,228
Derivatives
Aggregation according to IAS 39
Financial assets
Available-for-sale AFS 360 0 360 360 230 149 81 81
Loans and receivables L&R 6,925 6,778 6,778 147 6,641 6,473 6,473 168
At amortized cost AC 5,231 4,976 5,079 255 5,984 5,735 5,912 249
Outside scope of IAS 39
Financial instruments related to employee benefit plans 119 119 84 84
Investment in associates 36 36 46 46
Derivatives with hedging relationship 9 9 9 27 27 27
Determination of Fair Values
IFRS 13 defnes fair value as the price that would be received to
sell an asset or paid to transfer a liability in an orderly trans-
action between market participants on the measurement date.
Accordingly, best evidence of fair value provides quoted
prices in an active market. Where market prices are not readily
available, valuation techniques have to be used to establish
fair value.
Depending on the inputs used for determining fair value and
their signifcance for the valuation techniques, we have
categorized our fnancial instruments at fair value into a three-
level fair value hierarchy as mandated by IFRS 13.
The fair value hierarchy gives the highest priority to quoted
prices in active markets for identical assets or liabilities (Level
1) and the lowest priority to unobservable inputs (Level 3).
The inputs used to measure fair value for one single instrument
may fall into diferent levels of the fair value hierarchy. In such
cases, the level in the fair value hierarchy within which the fair
value measurement in its entirety falls has been determined
based on the lowest level input that is signifcant to the fair value
measurement in its entirety. Our assessment of the signif-
cance of a particular input to the fair value measurement in its
entirety requires judgment, and considers factors specifc
to the asset or liability.
The levels of the fair value hierarchy, its application to our
fnancial assets and liabilities, and the respective determination
of fair value are described below diferentiating between
those that are measured at fair value and those that are measured
at cost or amortized cost where fair value is only disclosed:
Level 1: Quoted prices in active markets for identical assets
or liabilities.
Level 2: Inputs other than those that can be observed, either
directly or indirectly, such as quoted prices in active markets
for similar assets or liabilities, quoted prices for identical
or similar assets or liabilities in markets that are not active, or
other inputs that are observable or can be corroborated by
observable market data for substantially the full term of the
assets or liabilities.
Level 3: Unobservable inputs that are supported by little or
no market activity and that are signifcant to the fair value of
the assets or liabilities.
It is our policy to recognize transfers at the beginning of the
period of the event or change in circumstances that caused the
transfer.
Financial Instruments Measured at Fair Value on a Recurring Basis
Type Fair Value
Hierarchy
Determination of Fair Value/
Valuation Technique
Significant Unobservable Inputs Interrelationship Between
Significant Unobservable Inputs
and Fair Value Measurement
Other financial assets
Debt investments Level 1 Quoted prices in an active market NA NA
Listed equity investments Level 1 Quoted prices in an active market NA NA
Listed equity investments with sale
restriction
Level 2 Quoted prices in an active market deducting
a discount for the disposal restriction derived
from the premium for a respective put option.
NA NA
Unlisted equity investments Level 3 Market approach. Comparable company valu-
ation using revenue multiples derived from
companies comparable to the investee.
Peer companies used
(revenue multiples range
from 2.3-8.5)
Revenues of investees
Discounts for lack of
marketability (20%30%)
The estimated fair value would
increase (decrease) if:
the revenue multiples
were higher (lower)
the investees revenues
were higher (lower)
the liquidity discounts
were lower (higher).
Unlisted equity investments Level 3 Market approach. Venture capital method
evaluating a variety of quantitative and
qualitative factors like actual and forecasted
results, cash position, recent or planned trans-
actions, and market comparable companies.
NA NA
Unlisted equity investments Level 3 Discounted cash flow. Revenue growth rate
(6%9%)
Weighted average cost of
capital (13.3%)
The estimated fair value would
increase (decrease) if:
the revenue growth
was higher (lower)
the weighted average cost
of capital was lower (higher)
Unlisted equity investments Level 3 Last financing round valuations NA NA
Unlisted equity investments Level 3 Liquidation preferences NA NA
(continued)
Financial Instruments Measured at Fair Value on a Recurring Basis (continued)
Type Fair Value
Hierarchy
Valuation Technique
Significant Unobservable Inputs Interrelationship Between
Significant Unobservable Inputs
and Fair Value Measurement
Other financial assets
(continued)
Private equity funds Level 3 Net asset value/Fair market value as reported
by the respective funds
NA NA
Interest rate swaps Level 2 Discounted cash flow.
Expected future cash flows are estimated
based on forward interest rates from
observable yield curves and contract interest
rates, discounted at a rate that reflects the
credit risk of the counterparty.
NA NA
Call options for share-based
payments plans
Level 2 Monte Carlo Model.
Calculated considering risk-free interest rates,
the remaining term of the derivatives,
the dividend yields, the stock price, and the
volatility of our share.
NA NA
Other financial assets/
Foreign exchange (FX) forward
contracts
Level 2 Discounted cash flow using Par-Method.
Expected future cash flows based on forward
exchange rates are discounted over the
respective remaining term of the contracts
using the respective deposit interest rates
and spot rates.
NA NA
For cash and cash equivalents, trade receivable, other non-
derivative fnancial assets/liabilities, accounts payable
and variable rate fnancial debt it is assumed that their carry-
ing value reasonably approximates their fair values.
Financial Instruments not Measured at Fair Value
Type Fair Value
Hierarchy
Valuation Technique
Fixed rate bonds
(financial liabilities)
Level 1 Quoted prices in an active
market
Fixed rate private placements/
loans (financial liabilities)
Level 2 Discounted cash flows.
Future cash outflows for
fixed interest and principal
are discounted over the
respective term of the
contracts using the respec-
tive market interest rates
as of the reporting date.
The following table allocates those fnancial assets and
liabilities that are measured at fair value in accordance with IAS
39 either through proft or loss or other comprehensive income
or for which fair value must be disclosed in accordance with
IFRS 7 as at December 31, 2013, to the three levels of the fair
value hierarchy according to IFRS 13.
Classifcation of Financial Instruments
millions
2013 2012
Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
Financial assets
Corporate bonds 29 0 0 29 27 0 0 27
Government securities 2 0 0 2 0 0 0 0
Municipal bonds 7 0 0 7 2 0 0 2
Debt investments 38 0 0 38 29 0 0 29
Software industry 52 31 239 322 52 0 0 52
Equity investments 52 31 239 322 52 0 0 52
Available-for-sale financial assets 90 31 239 360 81 0 0 81
FX forward contracts 0 56 0 56 0 76 0 76
Interest rate swaps 0 5 0 5 0 0 0 0
Call options for share-based pay-
ments
0 68 0 68 0 68 0 68
Derivative financial assets 0 129 0 129 0 144 0 144
Total 90 160 239 489 81 144 0 225
FX forward contracts 0 147 0 147 0 197 0 197
Interest rate swaps 0 23 0 23 0 0 0 0
Derivative financial liabilities 0 170 0 170 0 197 0 197
Total 0 170 0 170 0 197 0 197
transfers between level 1 and 2
Transfers of available-for-sale equity investments from
Level 2 to Level 1 which occurred because disposal restrictions
lapsed and deducting a discount for such restriction was no
longer necessary were not material in all years presented, while
transfers from Level 1 to Level 2 did not occur at all.
level 3 disclosures
The following table shows the reconciliation from the opening
to the closing balances for our Level 3 fair values:
Reconciliation of Level 3 Fair Values
millions
2013
Unlisted Equity
Investments and Private
Equity Funds
Opening balance 0
Transfers
into Level 3 162
out of Level 3 30
Purchases 79
Sales 16
Gains/losses
included in financial income, net in profit and loss 7
included in available-for-sale financial assets
46
included in exchange differences
9
Closing balance 239
Change in unrealized gains/losses in profit
and loss for investments held at the end of the
reporting period
0
The transfers into and out of Level 3 relate to unlisted equity
investments.
Changing the unobservable inputs to refect reasonably
possible alternative assumptions would not have a material
impact on the fair values of our unlisted equity investments
held as available-for-sale as of the reporting date.

(27) ShArE-bASED pAymEntS
SAP has granted awards under various cash-settled and equity-
settled share-based payments to its directors and employees.
Most of these awards are described in detail below. SAP has
other share-based payments, which are, individually and in
aggregate, immaterial to our Consolidated Financial
Statements.
a) Cash-Settled Share-based payments
SAPs cash-settled share-based payments include the
following programs: Employee Participation Plan (EPP) and
Long-Term Incentive Plan (LTI Plan for the Global Managing
Board) 2015, SOP Performance Plan 2009 (SOP PP), Stock
Option Plan 2010 (SOP 2010 (20102013 tranches)),
Restricted Stock Unit Plan 2013 (RSU 2013), acquired SFSF
Rights (former SuccessFactors awards assumed in connection
with the SuccessFactors acquisition in 2012), acquired Ariba
Rights (former Ariba awards assumed in connection with the
Ariba acquisition in 2012).
As at December 31, 2013, the valuation of our outstanding
cash-settled plans was based on the following parameters and
assumptions:
Fair Value and Parameters Used at Year-End 2013 for Cash-Settled Plans
LTI Plan 2015
(2012/2013
Tranche)
EPP 2015
(2013 Tranche)
RSU 2013 SOP PP SOP 2010
(2010 2013
Tranche)
SFSF Rights Ariba Rights
Option pricing model used Other
1)
Other
1)
Other
1)
Monte-Carlo Monte-Carlo NA NA
Range of grant dates 2/7/2012 3/20/2013 1/16/2013 5/6/2009 9/9/2010 2/21/2012 10/1/2012
7/1/2013 12/16/2013 9/13/2013
Quantity of awards issued
(in thousands)
661 2,087 1,559 10,321 26,341 4,534 4,091
Weighted average fair value as at
December 31, 2013
59.80 62.31 61.55 0.74 15.71 29.00 32.63
Weighted average intrinsic value
as at December 31, 2013
62.31 62.31 63.19 0.00 10.98 29.00 32.63
Expected remaining life as at
December 31, 2013 (in years)
2.4 0.1 1.2 0.2 3.3 0.8 0.7
Risk-free interest rate
(depending on maturity)
0.26% to
0.46%
0.01% 0.01% to
0.44%
0.02% 0.08% to
0.92%
NA NA
Expected volatility SAP shares NA NA NA 19.7% 21.3 % to
27.6%
NA NA
Expected dividend yield SAP shares 1.67% NA 1.65% 1.67% 1.67% NA NA
Share price of reference index NA NA NA 230.94 NA NA NA
Expected volatility reference index NA NA NA 10.6% NA NA NA
Expected dividend yield
reference index
NA NA NA 2.15% NA NA NA
Expected correlation SAP share/
reference index
NA NA NA 17.4% NA NA NA
1)
For these awards the fair value is calculated by subtracting the net present value of expected future dividend
payments, if any, until maturity of the respective award from the prevailing share price as of the valuation date.
As at December 31, 2012, the valuation of our outstanding
cash-settled plans was based on the following parameters and
assumptions:
Fair Value and Parameters Used at Year-End 2012 for Cash-Settled Plans
LTI Plan 2015
(2012 Tranche)
EPP 2015
(2012 Tranche)
SOP PP SOP 2010
(2010 2012
Tranche)
Option pricing model used Other
1)
Other
1)
Monte-Carlo Monte-Carlo NA NA
Range of grant dates 2/7/2012 4/5/2012 5/6/2009 9/9/2010 2/21/2012 10/1/2012
9/1/2012 6/8/2012
Quantity of awards issued (in thousands) 349 2,752 10,321 18,920 4,534 4,091
Weighted average fair value as
at December 31, 2012
57.79 60.69 7.36 17.06 30.32 34.11
Weighted average intrinsic value as
at December 31, 2012
60.69 60.69 4.76 14.79 30.32 34.11
Expected remaining life as at December 31, 2012
(in years)
3.1 0.1 1.2 4.1 1.3 1.1
Risk-free interest rate (depending on maturity) 0.06% 0.00% 0.04% 0.03% to
0.41%
NA NA
Expected volatility SAP shares NA NA 19.8% 25.8% to
29.6%
NA NA
Expected dividend yield SAP shares 1.55% NA 1.55% 1.55% NA NA
Share price of reference index NA NA 192.95 NA NA NA
Expected volatility reference index NA NA 5.5% NA NA NA
Expected dividend yield reference index NA NA 1.39% NA NA NA
Expected correlation SAP share/reference index NA NA 42.1% NA NA NA
1)
For these awards the fair value is calculated by subtracting the net present value of expected future dividend
payments, if any, until maturity of the respective award from the prevailing share price as of the valuation date.
Expected volatility of the SAP share price is based on a mixture
of implied volatility from traded options with corresponding
lifetimes and exercise prices as well as historical volatility with
the same expected life as the options granted. For the SOP PP
valuation, the expected volatility of the Technology Peer Group
Index (ISIN DE000A0YKR94) (TechPGI) is based on the
historical volatility derived from the index price history.
Expected remaining life of the options refects both the con-
tractual term and the expected, or historical, exercise behavior.
The risk-free interest rate is derived from German government
bonds with a similar duration. Dividend yield is based on
expectations of future dividends.
The number of awards under our cash-settled plans developed
as follows in the years ended December 31, 2013, 2012, and 2011:
Changes in Numbers of Outstanding Awards Under Our Cash-Settled Plans
thousands
LTI Plan 2015
(2012/2013
Tranche)
EPP 2015
(2012/2013
Tranche)
(20102013
Tranche)
Outstanding as at 12/31/2010 NA NA NA 9,575 5,373 NA NA
Granted in 2011 NA NA NA 0 5,192 NA NA
Exercised in 2011 NA NA NA 0 0 NA NA
Expired in 2011 NA NA NA 0 0 NA NA
Forfeited in 2011 NA NA NA 632 515 NA NA
Granted in 2012 349 2,752 NA 0 8,331 4,534 4,091
Adjustment based upon KPI target achievement in 2012 117 880 NA NA NA NA NA
Exercised in 2012 0 0 NA 3,294 0 1,826 1,587
Expired in 2012 0 0 NA 0 0 0 0
Forfeited in 2012 0 130 NA 805 954 305 144
Outstanding as at 12/31/2012 466 3,502 nA 4,844 17,427 2,403 2,360
Granted in 2013 311 2,087 1,559 0 7,421 NA NA
Adjustment based upon KPI target achievement in 2013 18 139 0 NA NA NA NA
Exercised in 2013 196 3,495 0 992 2,215 797 1,362
Expired in 2013 0 7 0 0 0 0 0
Forfeited in 2013 48 103 96 385 967 531 90
Outstanding as at 12/31/2013 515 1,845 1,463 3,467 21,666 1,075 908
Additional information
Awards exercisable as at 12/31/2011 NA NA NA 8,943 0 NA NA
Awards exercisable as at 12/31/2012 0 0 NA 4,844 0 0 0
Awards exercisable as at 12/31/2013 0 0 0 3,467 1,609 0 0
Aggregate intrinsic value of vested awards (in millions), as at 12/31/2011 NA NA NA 0 0 NA NA
Aggregate intrinsic value of vested awards (in millions), as at 12/31/2012 28 213 NA 23 0 3 3
Aggregate intrinsic value of vested awards (in millions), as at 12/31/2013 43 115 0 0 37 0 0
Weighted average share price (in ) for share options exercised in 2011 NA NA NA NA NA NA NA
Weighted average share price (in ) for share options exercised in 2012 NA NA NA 60.40 NA 30.32 34.11
weighted average share price (in ) for share options exercised in 2013 54.96 59.90 nA 61.38 55.47 29.00 32.63
Provision as at 12/31/2012 (in millions) 53 212 NA 36 137 39 51
provision as at 12/31/2013 (in millions) 41 115 32 3 183 20 24
Expense recognized in 2011 (in millions) NA NA NA 8 28 NA NA
Expense recognized in 2012 (in millions) 53 216 NA 20 74 38 21
Expense recognized in 2013 (in millions) 11 118 34 28 83 10 21
Changes in Numbers of Outstanding Awards Under Our Cash-Settled Plans
thousands
LTI Plan 2015
(2012/2013
Tranche)
EPP 2015
(2012/2013
Tranche)
(20102013
Tranche)
Granted in 2011 NA NA NA 0 5,192 NA NA
Exercised in 2011 NA NA NA 0 0 NA NA
Expired in 2011 NA NA NA 0 0 NA NA
Forfeited in 2011 NA NA NA 632 515 NA NA
Granted in 2012 349 2,752 NA 0 8,331 4,534 4,091
Adjustment based upon KPI target achievement in 2012 117 880 NA NA NA NA NA
Exercised in 2012 0 0 NA 3,294 0 1,826 1,587
Expired in 2012 0 0 NA 0 0 0 0
Forfeited in 2012 0 130 NA 805 954 305 144
Outstanding as at 12/31/2012 466 3,502 nA 4,844 17,427 2,403 2,360
Granted in 2013 311 2,087 1,559 0 7,421 NA NA
Adjustment based upon KPI target achievement in 2013 18 139 0 NA NA NA NA
Exercised in 2013 196 3,495 0 992 2,215 797 1,362
Expired in 2013 0 7 0 0 0 0 0
Forfeited in 2013 48 103 96 385 967 531 90
Outstanding as at 12/31/2013 515 1,845 1,463 3,467 21,666 1,075 908
Additional information
Awards exercisable as at 12/31/2011 NA NA NA 8,943 0 NA NA
Awards exercisable as at 12/31/2012 0 0 NA 4,844 0 0 0
Awards exercisable as at 12/31/2013 0 0 0 3,467 1,609 0 0
Aggregate intrinsic value of vested awards (in millions), as at 12/31/2011 NA NA NA 0 0 NA NA
Aggregate intrinsic value of vested awards (in millions), as at 12/31/2012 28 213 NA 23 0 3 3
Aggregate intrinsic value of vested awards (in millions), as at 12/31/2013 43 115 0 0 37 0 0
Weighted average share price (in ) for share options exercised in 2011 NA NA NA NA NA NA NA
Weighted average share price (in ) for share options exercised in 2012 NA NA NA 60.40 NA 30.32 34.11
weighted average share price (in ) for share options exercised in 2013 54.96 59.90 nA 61.38 55.47 29.00 32.63
Provision as at 12/31/2012 (in millions) 53 212 NA 36 137 39 51
provision as at 12/31/2013 (in millions) 41 115 32 3 183 20 24
Expense recognized in 2011 (in millions) NA NA NA 8 28 NA NA
Expense recognized in 2012 (in millions) 53 216 NA 20 74 38 21
Expense recognized in 2013 (in millions) 11 118 34 28 83 10 21
Cash-settled plans granted to SAp employees
(except for employees of SFSF and Ariba)
a.1) Employee Participation Plan (EPP) and Long-Term
Incentive Plan (LTI Plan) 2015
SAP implemented two new share-based payments in 2012: an
Employee Participation Plan (EPP) 2015 for employees and a
Long-Term Incentive (LTI) Plan 2015 for members of the Global
Managing Board.
The plans are focused on SAPs share price and the achieve-
ment of two fnancial key performance indicators (KPIs): non-
IFRS total revenue and non-IFRS operating proft, which are
derived from the Companys 2015 fnancial KPIs. Under these
plans, virtual shares, called restricted share units (RSUs), are
granted to participants. Participants are paid out in cash based
on the number of RSUs that vest.
The RSUs were granted and allocated at the beginning of each
year through 2015, with EPP 2015 RSUs subject to annual
Executive Board approval. Participants in the LTI Plan 2015
have already been granted a budget for the years 2012 to 2015
(2013 to 2015 for new plan participants in 2013). All
participants in the LTI Plan 2015 are members of the Global
Managing Board.
The RSU allocation process will take place at the beginning of
each year based on SAPs share price after the publication
of its preliminary annual results for the last fnancial year prior
to the performance period.
At the end of the given year, the number of RSUs that fnally
vest with plan participants depends on SAPs actual per-
formance for the given year, and might be higher or lower than
the number of RSUs originally granted. If performance against
both KPI targets reaches at least the defned 80% threshold,
the RSUs vest. Depending on performance, the vesting can
reach a maximum of 150% of the budgeted amount. If
performance against either or both of those KPI targets does
not reach the defned threshold of 80%, no RSUs vest and
RSUs granted for that year will be forfeited. For the year 2013,
the RSUs granted at the beginning of the year vested with
92.97% (2012: 133.55%) achievement of the KPI targets.
Monetary benefts are capped at 110% of the grant price
(30.80). The dynamic exercise price at valuation date is
66.29.
a.3) SAP Stock Option Plan 2010 (SOP 2010 (2010 2013
Tranches))
Under the SAP Stock Option Plan 2010, we granted members
of the Senior Leadership Team / Global Executives, SAPs
Top Rewards (employees with an exceptional rating / high
potentials) between 2010 and 2013 and only in 2010 and 2011
members of the Executive Board cash-based virtual stock
options, the value of which depends on the multi-year per-
formance of the SAP share.
The grant-base value is based on the average fair market value
of one ordinary share over the fve business days prior to the
Executive Board resolution date.
The virtual stock options granted under the SOP 2010 give the
employees the right to receive a certain amount of money
by exercising the options under the terms and conditions of this
plan. After a three-year vesting period (four years for members
of the Executive Board), the plan provides for 11 predetermined
exercise dates every calendar year (one date per month except
in April) until the rights lapse six years after the grant date
(seven years for members of the Executive Board). Employees
can exercise their virtual stock options only if they are employed
by SAP; if they leave the Company, they forfeit them. Executive
Board members options are non-forfeitable once granted
if the service agreement ends in the grant year, the number of
options is reduced pro rata temporis. Any options not exer-
cised at the end of their term expire.
The exercise price is 110% of the grant base value (115% for
members of the Executive Board) which is 39.03 (40.80) for
the 2010 tranche, 46.23 (48.33) for the 2011 tranche,
49.28 for the 2012 tranche, and 59.85 for the 2013 tranche.
Monetary benefts will be capped at 100% of the exercise price
(150% for members of the Executive Board).
Under the EPP 2015, the RSUs are paid out in the frst quarter
of the year after the one-year performance period, whereas
the RSUs for members of the Global Managing Board under the
LTI Plan 2015 are subject to a three-year-holding period before
payout, which occurs starting in 2016.
The plans include a look-back provision, due to the fact that
these plans are based on reaching certain KPI levels in 2015.
If the overall achievement in 2015 is higher or lower than
represented by the number of RSUs vested from 2012 to 2014,
the number of RSUs granted in 2015 can increase or decrease
accordingly. However, RSUs that were already fully vested in
prior years cannot be forfeited. For the EPP, the application of
the look-back-provision is subject to approval by the
Executive Board in 2015.
The fnal fnancial efect of each tranche of the EPP 2015
and the LTI Plan 2015 will depend on the number of vested
RSUs and the SAP share price, which is set directly after
the announcement of the preliminary fourth quarter and full-
year results for the last fnancial year under the EPP 2015
(of the respective three-year holding period under the LTI Plan
2015), and thus may be signifcantly above or below the
budgeted amounts.
a.2) SOP Performance Plan 2009 (SOP PP)
Under the SOP Performance Plan 2009, we granted to
top executives and top performers cash-based virtual stock
options, the value of which depends on the multi-year
performance of the SAP share relative to an industry-specifc
share price index, the TechPGI.
The future payout at the exercise date will be based on the
outperformance of the SAP share price over the TechPGI.
Exercise is only possible if the SAP share price has outper-
formed the TechPGI. For that purpose, the SOP PP 2009
agreement defnes the initial value of the TechPGI (97.54) as
well as the SAP initial exercise price (28.00 per share). After
a vesting period of two years, the plan provides for 4 prede-
termined exercise dates every calendar year until the rights
lapse fve years after the grant date. The latest possible
exercise day for eligible employees will be in March 2014.
the number of RSUs that can vest is capped at 200% of
the number originally granted. Performance against the KPI
targets was 100% in fscal year 2013.
The RSUs are paid out in cash upon vesting.
a.5) SuccessFactors Cash-Settled Awards Replacing
Pre-Acquisition SuccessFactors Awards (SFSF Rights)
In conjunction with the acquisition of SuccessFactors in 2012,
under the terms of the acquisition agreement, SAP exchanged
unvested Restricted Stock Awards (RSAs), Restricted Stock
Units (RSUs), and Performance Stock Units (PSUs) held by
employees of SuccessFactors for cash-settled share-based
payment awards of SAP (SFSF Rights).
RSAs, RSUs, and PSUs unvested at the closing of the acqui-
sition were converted into the right to receive, at the originally
agreed vesting dates, an amount in cash equal to the number
of RSAs and RSUs held at the vesting date multiplied by
US$40.00 per share.
There were 4.5 million unvested RSAs, RSUs, and PSUs at
the acquisition date, representing a fair value of 128 million
after considering forfeitures dependent on grant dates and
remaining vesting periods. Of the total fair value, 59 million
was allocated to consideration transferred and 68 million was
allocated to future services to be provided and will be recog-
nized as post-acquisition compensation expense as the awards
vest over the remainder of the original vesting terms the
remaining vesting period for such SuccessFactors Rights are in
a range of up to four years from the acquisition date. From
January 1, 2013, to December 31, 2013, 0.8 million SFSF Rights
vested. The unrecognized expense related to SFSF Rights was
11 million as at December 31, 2013, and will be recognized
over a remaining vesting period of up to 2.0 years.
Cash-settled plans granted to employees of SFSF
and Ariba
a.4) Restricted Stock Unit Plan 2013 (RSU 2013)
We maintain share-based payment plans that allow for the
issuance of restricted stock units (RSU) to retain and motivate
executives and certain employees of the SuccessFactors and
Ariba businesses, which we acquired in 2012.
Under the RSU 2013 Plan, we granted a certain number of
RSUs throughout 2013 representing a contingent right to
receive a cash payment determined by the market value of
the same number of SAP AG American Depository Receipts
on the New York Stock Exchange and the number of RSUs that
ultimately vest. Granted RSUs will vest in diferent tranches,
either:
Over a one-to-three year service period only, or
Over a one-to-three year service period and upon meeting
certain key performance indicators (KPIs).
The number of RSUs that could vest for SuccessFactors
employees under the performance-based grants was
contingent upon a weighted achievement of performance
milestones for the fscal year ended December 31, 2013
related to:
Specifc indicators of cloud subscriptions and support
revenue (80%) and
Proft contribution of such specifc indicators of cloud
subscriptions and support revenue (20%).
Depending on performance, the number of RSUs vesting could
have ranged between 80% and 140% of the number initially
granted. Performance against the KPI targets was set at 100%
in fscal year 2013.
The number of RSUs that could vest for Ariba employees
under the performance-based grants was contingent upon
achievement of performance milestones for the fscal year
ended December 31, 2013 related to specifc indicators of
growth in cloud subscriptions and support revenue. The KPI
targets included a minimum threshold for at least 50% vesting.
If performance against the KPI targets had not exceeded the
minimum threshold, no RSUs would have vested. Additionally,
a.6) Ariba Cash-Settled Awards Replacing Pre-Acquisition
Ariba Awards (Ariba Rights)
The terms of the acquisition agreement under which SAP
acquired Ariba in 2012 required SAP to exchange unvested
Restricted Stock Awards (RSAs) and Restricted Stock Units
(RSUs) held by employees of Ariba for cash-settled share-
based payment awards of SAP (Ariba Rights).
RSAs and RSUs unvested at the closing of the acquisition
were converted into the right to receive an amount in cash equal
to the number of RSAs and RSUs held at the vesting date
multiplied by US$45.00 per share in accordance with the res-
pective vesting terms.
There were 4.1 million unvested RSAs and RSUs at the acqui-
sition date, representing a fair value of 138 million after
considering forfeitures dependent on grant dates and remain-
ing vesting periods. Of the total fair value, 86 million was
allocated to consideration transferred and 52 million was
allocated to future services to be provided and will be recognized
as post-acquisition compensation expense as the awards vest
over the remainder of the vesting terms the remaining
vesting period for such Ariba Rights are in a range of up to
3.5 years at acquisition date (in accordance with the originally
agreed vesting dates). From January 1, 2013, to December 31,
2013, 1.4 million Ariba Rights vested. The unrecognized
expense related to Ariba Rights was 7 million as at December
31, 2013, and will be recognized over a remaining vesting
period of up to 1.75 years.
b) Equity-Settled Share-Based Payments
Equity-settled plans include primarily the Share Matching Plan
(SMP).
Under the Share Matching Plan (SMP) implemented in 2010,
SAP ofers its employees the opportunity to purchase SAP AG
shares at a discount of 40%. The number of SAP shares an
eligible employee may purchase through the SMP is limited to
a percentage of the employees annual base salary. After a
three-year holding period, such plan participants will receive
one (in 2012: fve) free matching share of SAP for every three
SAP shares acquired.
The terms for the members of the Senior Leadership Team /
Global Executives are slightly diferent than those for the other
employees. They do not receive a discount when purchasing
the shares. However, after a three-year holding period, they
receive two (in 2012: fve) free matching SAP shares for every
three SAP shares acquired. This plan is not open to members
of the SAP Executive Board.
The following table shows the parameters and assumptions
used at grant date to determine the fair value of free matching
shares, as well as the quantity of shares purchased and free
matching shares granted through this program in 2013, 2012,
and 2011:
Fair Value and Parameters at Grant Date for SMP
2013 2012 2011
Grant date 9/4/2013 6/6/2012 6/8/2011
Share price at grant date 54.20 45.43 41.73
Purchase price set by the Executive Board 56.20 48.23 44.07
Risk-free interest rate 0.43% 0.12% 1.95%
Expected dividend yield of SAP shares 1.92% 2.13% 1.70%
Expected life of free matching shares (in years) 3.0 3.0 3.0
Free matching share fair value at grant date 51.09 42.54 39.69
Number of shares purchased (in thousands) 1,559 1,926 1,334
Free matching shares granted (in thousands) 573 3,210 481
The following table shows the breakdown of the expense
recognized for this program in 2013, 2012, and 2011 and the
unrecognized expense at year-end in millions:
Recognized and Unrecognized Expense at Year-End for SMP
2013 2012 2011
Expense recognized relating to discount 32 34 22
Expense recognized relating to vesting of free matching shares 51 34 9
Total expense relating to SMP 83 68 31
Unrecognized expense as at December 31 80 107 22
Average remaining vesting period (in years) as at December 31 1.6 2.2 2.2
(28) SEGmEnt AnD GEOGrAphIC InFOrmAtIOn
General Information
Our internal reporting system produces reports in which business
activities are presented in a variety of ways, for example, by line of
business, geography, and areas of responsibility of the individual
Board members. Based on these reports, the Executive Board,
which is responsible for assessing the performance of various
company components and making resource allocation decisions
as our Chief Operating Decision Maker (CODM), evaluates
business activities in a number of diferent ways.
SAP has two divisions On-Premise and Cloud, which are further
divided into operating segments. Our On-Premise division is
comprised of two operating segments: On-Premise Products and
On-Premise Services, and our Cloud division is comprised of two
operating segments: Cloud Applications and Ariba. All operating
segments are reportable segments.
On August 1, 2013, SAP acquired hybris AG. Since the majority
of hybris activities are currently delivered in an on-premise
model, the majority of hybris activities are correspondingly
refected in the On-Premise segments.
The most important factors we use to identify operating
segments are distinctions among our product and service
oferings, notably:
Between divisions, the software delivery model (software to
be installed on the customers hardware (on-premise
software), as distinct from software for delivery in the cloud)
Within the On-Premise division, the types of services ofered
Within the Cloud division, the felds in which the cloud
applications are used
The On-Premise division derives its revenues primarily from
the sale of on-premise software (that is, software designed
for use on hardware on the customers premises), mobile
software (that is, software designed for use on mobile devices),
and services relating to such software. Within the On-Premise
division, the On-Premise Products segment is primarily
engaged in marketing and licensing our on-premise and mobile
software products and providing support services for these
software products. The On-Premise Services segment primarily
performs various professional services, mainly implementation
services of our software products and educational services on
the use of our software products.
The Cloud division derives its revenues primarily from the
sale of cloud software (that is, software designed for delivery
through the cloud) and services relating to such software
(including support services, professional services, and educa-
tional services). Within the Cloud division, the Cloud
Applications segment is primarily engaged in marketing and
selling subscriptions to the cloud software oferings developed
by SAP and SuccessFactors. The Ariba segment primarily
markets and sells the cloud software oferings developed by
Ariba and derives revenue from its cloud-based collaborative
business network.
Information About proft or loss, Assets, and liabilities
Operating Segments Revenue and Proft or Loss
millions
On-Premise Division Cloud Division Total
On-Premise
Products
On-Premise
Services
Division
Total
Cloud
Applications
Ariba Division
Total
2013
Software 4,517 0 4,517 1 0 1 4,518
Cloud subscriptions and support 0 0 0 412 344 757 757
Software and cloud subscriptions 4,517 0 4,517 413 345 758 5,275
Support 8,710 0 8,710 16 30 46 8,756
Software and software-related service revenue 13,227 0 13,227 429 375 804 14,032
Professional services and other service revenue 0 2,695 2,695 85 85 170 2,865
Total revenue 13,227 2,695 15,923 514 461 975 16,897
Cost of revenue 2,020 2,134 4,154 178 180 358 4,512
Gross profit 11,207 562 11,769 336 281 617 12,385
Cost of sales and marketing 3,447 0 3,447 328 151 479 3,926
Reportable segment profit/loss 7,760 562 8,322 8 130 138 8,460
2012
Software 4,656 0 4,656 2 0 2 4,658
Support 8,226 0 8,226 10 10 20 8,246
Total revenue 12,881 2,967 15,848 336 120 456 16,304
Cost of revenue 1,994 2,306 4,300 163 72 234 4,533
Gross profit 10,887 661 11,549 173 49 222 11,771
2011
Software 4,105 0 4,105 0 2 2 4,107
Support 7,220 0 7,220 0 0 1 7,220
Total revenue 11,325 2,901 14,226 29 4 33 14,260
Cost of revenue 1,762 2,201 3,963 66 9 75 4,038
Gross profit 9,564 700 10,264 37 5 42 10,222
Segment asset/liability information is not regularly provided
to our CODM. Goodwill by operating segment is disclosed in
Note (15).
Measurement and Presentation
Our management reporting system reports our intersegment
services as cost reductions and does not track them as internal
revenue. Intersegment services mainly represent utilization
of human resources of one segment by another segment on a
project-by-project basis. Intersegment services are charged
based on internal cost rates including certain indirect overhead
costs, excluding a proft margin.
Most of our depreciation and amortization expense afecting
operating segment profts is allocated to the segments as part
of broader infrastructure allocations and is thus not tracked
separately on the operating segment level. Depreciation and
amortization expense that is directly allocated to the operating
segments is immaterial in all operating segments presented.
The accounting policies applied in the measurements of the
operating segments revenues and profts difer from IFRS
accounting principles described in Note (3) as follows:
The measurements of the operating segments revenues and
profts generally attribute revenue to the segment based on
the nature of the business regardless of revenue
classifcation in our income statement. Thus, for example,
the Cloud Applications segments revenue may include cer-
tain amounts classifed as software revenue in our
Consolidated Income Statements.
The measurements of the operating segments revenues and
profts includes the recurring revenues that would have been
refected by acquired entities had it remained a stand-alone
entity but which are not refected as revenue under IFRS
as a result of purchase accounting for customer contracts in
efect at the time of an acquisition.
The measurements of the operating segments profts
excludes share-based payment expense, and restructuring
costs as well as research and development expense and
general and administration expense at segment level. These
expenses are managed and reviewed at the Group level only.
exclude the following acquisition-related charges:
Amortization expense/impairment charges of intangibles
acquired in business combinations and certain stand-alone
acquisitions of intellectual property
Expenses from purchased in-process research and
development
Restructuring expenses and settlements of pre-existing
relationships
Acquisition-related third-party costs that are required
to be expensed
excludes results of the discontinued operations that qualify
as such under IFRS in all respects except if they do not
represent a major line of business. For all periods presented
this relates exclusively to the operations of TomorrowNow.

Cost of revenue for our On-Premise Services segment also
includes sales and marketing expenses related to professional
services and other services that result from sales and marketing
eforts that cannot be clearly separated from providing the
services. For this reason, no sales and marketing expenses as
such have been allocated to this segment.
Geographic Information
The tables below show the geographical breakdown of revenue
according to specifc criteria:
The management view is the geographic revenue breakdown
that the SAP Executive Board, SAP's chief operating decision-
maker, uses primarily when reviewing revenue by sales
destination. Under this view, the software revenue from a
software contract is attributed to the country in which the
contract was negotiated. Such reporting presumes that
the software contract was negotiated in the country in which
the customer is domiciled. The only circumstances in which
this presumption is not applied is where there is objective
evidence that all contract negotiations took place in a
country other than the domicile of the legal entity contracting
on the customers behalf. Software revenue from a given
software contract is always attributed to a single
geographical region; in other words, the software revenue is
not split between geographical regions. Because cloud
subscriptions and support revenue is earned largely from
contracts that were negotiated in various periods in the
past, it is allocated without exception to the country in which
the customer is domiciled.
In the presentation by customer location, all revenue is
attributed to the country in which the customer is domiciled.
Revenue by Region
Revenue by Region Management View
Software Revenue by Region
millions
2013 2012 2011
EMEA 2,095 2,005 1,852
Americas 1,620 1,774 1,534
APJ 802 879 722
SAp Group 4,516 4,658 4,107
Reconciliation of Revenues and Segment Results
millions
2013 2012 2011
Total revenues for reportable
segments
16,897 16,304 14,260
Adjustment recurring software
revenues
2 0 0
Adjustment recurring cloud
subscriptions and support
revenues
61 73 0
Adjustment recurring support
revenues
19 9 27
Adjustment recurring revenues 82 81 27
Total revenue 16,815 16,223 14,233
Total profit for reportable segments 8,460 8,082 7,268
Adjustment recurring revenues 82 81 27
Research and development expense 2,162 2,132 1,894
General and administration
expense
796 784 685
Other operating income/expense, net 12 23 25
Restructuring 70 8 4
TomorrowNow litigation / Loss
from discontinued operations
0 0 717
Acquisition-related charges 555 537 448
Operating profit 4,479 4,041 4,884
Other non-operating income/
expense, net
17 173 75
Financial income, net 66 72 42
The research and development expense and general and
administration expense presented in the reconciliation
difer from the corresponding expenses in the consolidated
income statement because the portions of share-based
payments-related expenses, restructuring expenses, and
acquisition-related expenses that are included in the research
and development line item respectively the general and
administration expense line item in the income statement,
are presented as separate items in the reconciliation.
Software and Cloud Subscription Revenue by Region
millions
2013 2012 2011
EMEA 2,233 2,107 1,864
Americas 2,130 1,920 1,540
APJ 849 901 722
SAp Group 5,212 4,928 4,125
Software and Software-Related Service Revenue by Region
millions
2013 2012 2011
Germany 1,984 1,821 1,726
Rest of EMEA 4,566 4,285 3,803
total EmEA 6,549 6,106 5,529
United States 3,788 3,537 2,870
Rest of Americas 1,408 1,283 1,088
total Americas 5,196 4,820 3,958
Japan 556 699 579
Rest of APJ 1,647 1,540 1,253
ApJ 2,204 2,239 1,832
SAp Group 13,950 13,165 11,319
Total Revenue by Region
millions
2013 2012 2011
Germany 2,505 2,380 2,347
Rest of EMEA 5,381 5,106 4,644
total EmEA 7,885 7,486 6,991
United States 4,661 4,461 3,699
Rest of Americas 1,705 1,639 1,392
total Americas 6,366 6,100 5,091
Japan 624 789 652
Rest of APJ 1,939 1,848 1,499
ApJ 2,563 2,637 2,151
SAp Group 16,815 16,223 14,233
Software Revenue by Location of Negotiation and
Cloud Subscription Revenue by Region
millions
2013 2012 2011
EMEA 2,212 2,071 1,865
Americas 2,164 1,961 1,539
APJ 837 896 722
SAp Group 5,212 4,928 4,125
Revenue by Region Location of Customers
Software Revenue by Region
millions
2013 2012 2011
EMEA 2,116 2,041 1,851
Americas 1,586 1,733 1,534
APJ 814 884 722
SAp Group 4,516 4,658 4,107
Cloud Subscriptions and Support Revenue by Region
millions
2013 2012 2011
EMEA 117 66 13
Americas 544 187 5
APJ 35 17 0
SAp Group 696 270 18
Non-Current Assets
millions
2013 2012
Germany 2,337 2,318
France 2,112 2,120
Rest of EMEA 4,161 3,251
EmEA 8,610 7,689
United States 9,823 10,395
Rest of Americas 123 97
Americas 9,946 10,492
Japan 19 22
Rest of APJ 204 216
ApJ 223 238
SAp Group 18,779 18,418
Non-current assets as presented in the table above follow the
requirements of IFRS 8 for a geographical breakdown of
non-current assets excluding fnancial instruments, deferred
tax assets, post-employment benefts, and rights arising
under insurance contracts.
For information about the breakdown of our full-time
equivalent employee numbers by region, see Note (7).

(29) bOArD OF DIrECtOrS
Executive board
Memberships on supervisory boards and other comparable
governing bodies of enterprises, other than subsidiaries
of SAP on December 31, 2013
Bill McDermott
Co-Chief Executive Ofcer
Strategy, Governance, Business Development,
Corporate Development,
Sales and Ecosystem Activities
Communications and Marketing
Board of Directors, ANSYS, Inc., Canonsburg,
Pennsylvania, United States
Board of Directors, Under Armour, Inc., Baltimore,
Maryland, United States
Jim Hagemann Snabe
Co-Chief Executive Ofcer
Strategy, Governance, Business Development,
Corporate Development,
Communications and Marketing
Board of Directors, Bang & Olufsen a/s, Stuer, Denmark
Board of Directors, The Danske Bank Group, Copenhagen,
Denmark (from March 18, 2013)
Supervisory Board, Siemens AG, Munich, Germany
(from October 1, 2013)
Dr. Werner Brandt
Chief Financial Ofcer, Labor Relations Director
Finance and Administration including Investor Relations
and Data Protection & Privacy
Human Resources
Supervisory Board, Deutsche Lufthansa AG,
Frankfurt am Main, Germany
Supervisory Board, QIAGEN N.V., Venlo, the Netherlands
Supervisory Board, RWE AG, Essen, Germany
(from April 18, 2013)
Gerhard Oswald
Board Area Scale Quality & Support
SAP Active Global Support, SAP HANA Enterprise Cloud,
Cloud Delivery,
Quality Governance & Production, Solution & Knowledge
Packaging,
SAP Labs Network (joint leadership with Vishal Sikka)
Chairman of the Board of Directors, Blyk International Ltd.,
London, UK
Chairman of the Board of Directors, Huhtamki Oyj,
Espoo, Finland
Panagiotis Bissiritsas
1), 2), 6)
Support Expert
Prof. Anja Feldmann
5), 9)
Professor at the Electrical Engineering and Computer Science
Faculty at the Technische Universitt Berlin
Prof. Dr. Wilhelm Haarmann
2), 6), 8), 9)
Attorney-at-law, certifed public auditor, certifed tax advisor
Linklaters LLP, Rechtsanwlte, Notare, Steuerberater,
Frankfurt am Main, Germany
Chairman of the Supervisory Board, CinemaxX AG,
Hamburg, Germany
Margret Klein-Magar
1), 2), 5), 8)
Vice President, Head of People Principles
Lars Lamad
1), 2), 8), 9)
Project Manager OPD COO
Deputy Chairman of the Supervisory Board,
Rhein-Neckar-Loewen GmbH, Kronau, Germany
Bernard Liautaud
2), 5), 7)
General Partner Balderton Capital, London, UK
Board of Directors, nlyte Software Ltd., London, UK
Board of Directors, Talend SA, Suresnes, France
Board of Directors, Cap Gemini, Paris, France
(until October 8, 2013)
Board of Directors, Quickbridge (UK) Ltd., London, UK
Board of Directors, SCYTL Secure Electronic Voting SA,
Barcelona, Spain
Dr. Vishal Sikka
Products & Innovation
Global Product Development including SAP HANA,
Custom Development,
Design & User Experience, Global Research,
SAP Labs Network (joint leadership with Gerhard Oswald)
Board Members Who Left During 2013
Supervisory board
Memberships on supervisory boards and other comparable
governing bodies of enterprises, other than subsidiaries
of SAP on December 31, 2013
Prof. Dr. h. c. mult. Hasso Plattner
2), 4), 5), 7), 8), 9)
Chairman
Board of Directors, Bramasol, Inc., San Francisco,
California, USA (until July 1, 2013)
Supervisory Board, Oligo Lichttechnik GmbH, Hennef,
Germany
Christiane Kuntz-Mayr
1), 4), 5), 9)
Deputy Chairperson
Deputy Chairperson of the Works Council at SAP AG
Pekka Ala-Pietil
5), 7), 8)
Chairman of the Board of Directors, Solidium Oy,
Helsinki, Finland
Board of Directors, Pyry Plc, Vantaa, Finland
Chairman of the Board of Directors, CVON Group Limited,
London, UK
Board of Directors, CVON Limited, London, UK
Chairman of the Board of Directors, CVON Innovation
Services Oy, Turku, Finland
Board of Directors, CVON Future Limited, London, UK
Board of Directors, Abiquo Group Inc., Redwood City,
California, United States
Board of Directors, Vestiaire Collective SA,
Levallois-Perret, France
Board of Directors, Dashlane, Inc., New York, New York,
United States
Board of Directors, Recorded Future, Inc., Cambridge,
Massachusetts, United States
Board of Directors, eWise Group, Inc., Redwood City,
California, United States
Board of Directors, Qubit Digital Ltd., London, UK
Dr. h. c. Hartmut Mehdorn
4), 6), 9)
CEO of FBB, Flughafen Berlin-Brandenburg GmbH, Berlin,
Germany
Board of Directors, Air Berlin PLC & Co. Luftverkehrs KG,
Berlin (until January 7, 2013)
Advisory Board, Fiege-Gruppe, Greven, Germany
Board of Directors, RZD Russian Railways, Moscow, Russia
Dr. Kurt Reiner
1), 5), 6)
Development Expert
Mario Rosa-Bian
1), 4), 9)
Project Principal Consultant
Dr. Erhard Schipporeit
3), 8)
Independent Management Consultant
Supervisory Board, Talanx AG, Hanover, Germany
Supervisory Board, Deutsche Brse AG, Frankfurt am Main,
Germany
Supervisory Board, HDI V.a.G., Hanover, Germany
Supervisory Board, Hannover Rckversicherung SE,
Hanover, Germany
Supervisory Board, Fuchs Petrolub SE, Mannheim, Germany
Supervisory Board, BDO AG, Hamburg, Germany
Board of Directors, TUI Travel PLC, London, UK
Board of Directors, Fidelity Funds SICAV, Luxembourg
Stefan Schulz
1), 3), 5), 9)
Vice President, IP at HANA Enterprise Cloud
Supervisory Board, ORTEC International Beheer B.V.,
Zoetermeer, the Netherlands (from June 17, 2013)
Inga Wiele
1), 3), 5)
Senior Internal Strategic Consultant
Prof. Dr.-Ing. Dr.-Ing. E. h. Klaus Wucherer
3), 5)
Managing Director of Dr. Klaus Wucherer Innovations- und
Technologieberatung GmbH, Erlangen, Germany
Deputy Chairman of the Supervisory Board, HEITEC AG,
Erlangen, Germany
Supervisory Board, Drr AG, Bietigheim-Bissingen, Germany
Supervisory Board, LEONI AG, Nuremberg, Germany
Chairman of the Supervisory Board, Festo AG & Co. KG,
Esslingen, Germany
Information as at December 31, 2013
1)
Elected by the employees
2)
Member of the Companys General and Compensation Committee
3)
Member of the Companys Audit Committee
4)
Member of the Companys Mediation Committee
5)
Member of the Companys Technology and Strategy Committee
6)
Member of the Companys Finance and Investment Committee
7)
Member of the Companys Nomination Committee
8)
Member of the Companys Special Committee
9)
Member of the Companys People and Organization Committee
(2012: 72,138 thousands) and the total Executive Board
compensation amounts to 25,434 thousands (2012: 75,401
thousands). These amounts difer from the amounts shown
in the table above, since the amounts in the table above are
based on the LTI tranches that were allocated to each of
the respective years, rather than are based on the grant date
as defned under section 314 of the German Commercial
Code (HGB).
Share-Based Payment for Executive Board Members
2013 2012 2011
Number of RSUs granted 152,159 326,432 0
Number of stock options granted 0 0 475,227
Total expense in thousands 8,596 57,429 4,420
In the table above, the share-based payment expense is the
amount recorded in proft or loss under IFRS 2 in the respective
period.
The projected beneft obligation (PBO) for pensions to Execu-
tive Board members and the annual pension entitlement
of the members of the Executive Board on reaching age 60 based
on entitlements from performance-based and salary-linked
plans were as follows:
Retirement Pension Plan for Executive Board Members
thousands
2013 2012 2011
PBO December 31 9,077 8,889 7,291
Annual pension entitlement 452 429 437
The total compensation of the Executive Board members for
the years 2013, 2012, and 2011 was as follows:
Executive Board Compensation
thousands
2013 2012 2011
Short-term employee benefits 24,728 17,054 20,197
Share-based payment
1)
8,603 14,855 4,016
Subtotal
1)
33,331 31,909 24,213
Post-employment benefits 1,324 3,263 1,547
thereof defined-benefit 189 1,711 696
thereof defined-contribution 1,135 1,552 850
Termination benefits 0 0 4,125
Other long-term benefits 0 0 4,031
Total
1)
34,655 35,172 33,915
1)
Portion of total executive compensation allocated to the respective year
The share-based payment amounts disclosed above are based
on the grant date fair value of the restricted share units (RSUs)
issued to Executive Board members during the year.
The Executive Board members already received, in 2012,
the LTI grants for the years 2012 to 2015 subject to continuous
service as member of the Executive Board in the respective
years. Although these grants are linked to and thus, economi-
cally, compensation for the Executive Board members in the
respective years, section 314 of the German Commercial Code
(HGB) requires them to be included in the total compensation
number for the year of grant. Due to the contract extension
for Gerhard Oswald in 2013, an additional grant was triggered
during 2013, which relates to the allocations of 2014 and
2015. Vesting of the LTI grants is dependent on the respective
Executive Board members continuous service for the
Company.
The share-based payment as defned in section 314 of
the German Commercial Code (HGB) amounts to 3,150
thousands (2012: 55,085 thousands) based on the alloca-
tions for 2014 and 2015 for Gerhard Oswald which were
granted in 2013 in line with the extension of his Executive
Board contract. Including this amount, the subtotal Executive
Board compensation amounts to 24,110 thousands
Subject to the adoption of the dividend resolution by the
shareholders at the Annual General Meeting of Share-
holders on May 21, 2014, the total annual compensation
of the Supervisory Board members for 2013 is as follows:
Supervisory Board Compensation
thousands
2013 2012 2011
Total compensation 2,966 2,981 3,028
thereof fixed compensation 870 901 874
thereof committee remuneration 416 340 465
thereof variable compensation 1,680 1,741 1,688
The Supervisory Board members do not receive any share-
based payment for their services. As far as members who are
employee representatives on the Supervisory Board receive
share-based payment such compensation is for their services
as employees only and is unrelated to their status as members
The total compensation of all Supervisory Board members in
2013 for work for SAP excluding compensation relating to
the ofce of Supervisory Board member was 1,176 thousands
(2012: 1,084 thousands; 2011: 1,688 thousands).
During the fscal year 2013, payments to and PBO for former
Executive Board members were as follows:
Payments to / PBO for Former Executive Board Members
thousands
2013 2012 2011
Pension benefits 1,387 1,360 1,346
PBO 29,181 30,551 25,267
SAP did not grant any compensation advance or credit to,
or enter into any commitment for the beneft of, any member
of the Executive Board or Supervisory Board in 2013, 2012,
or 2011.
On December 31, 2013, the shareholdings of SAPs board
members were as follows:
Shareholdings of Executive and Supervisory Board Members
Number of SAP shares
2013 2012 2011
Executive Board 30,201 35,271 20,569
Supervisory Board 119,316,444 121,363,858 121,524,139
Detailed information about the diferent elements of the
compensation as well as the number of shares owned
by members of the Executive Board and the Supervisory
Board are disclosed in the Compensation Report which
is part of our Management Report and of our Annual Report
on Form 20-F, both of which are available on SAPs Web site.

All amounts related to the above mentioned transactions
were immaterial to SAP in all periods presented.
For information about the compensation of our Executive
Board and Supervisory Board members, see Note (29).
(30) rElAtED pArty trAnSACtIOnS
Certain Executive Board and Supervisory Board members of
SAP AG currently hold, or held within the last year, positions
of signifcant responsibility with other entities, as presented in
Note (29). We have relationships with certain of these entities
in the ordinary course of business, whereby we buy and sell
a wide variety of products and services at prices believed to be
consistent with those negotiated at arms length between
unrelated parties.
Companies controlled by Hasso Plattner, chairman of our
Supervisory Board and Chief Software Advisor of SAP, engaged
in the following transactions with SAP: providing consulting
services to SAP, selling a piece of land to SAP, receiving sport
sponsoring from SAP, making purchases of SAP products and
services. In the prior year, this also included purchasing an
entity through an asset deal from a company indirectly held by
him.
Christiane Kuntz-Mayr, vice chairperson of the SAP Super-
visory Board, acts as a manager of family & kids @ work
gemeinntzige UG ("family & kids @ work"). Family & kids @
work is supported fnancially by SAP.
Wilhelm Haarmann practiced as a partner in the law frm
HAARMANN Partnerschaftsgesellschaft in Frankfurt am Main,
Germany, until February 2013. In February 2013, he became
a partner in Linklaters LLP. SAP occasionally purchased and
purchases legal and similar services from both of these frms.
(31) prInCIpAl ACCOuntAnt FEES AnD SErVICES
At the Annual General Meeting of Shareholders held on
June 4, 2013, our shareholders elected KPMG AG Wirtschafts-
prfungsgesellschaft as SAPs independent auditor for 2013.
KPMG AG Wirtschaftsprfungsgesellschaft and other frms in
the global KPMG network charged the following fees to SAP
for audit and other professional services related to 2013 and
the previous years:
Fees for Audit and Other Professional Services
millions
2013 2012 2011
KPMG AG
(Germany)
Foreign
KPMG Firms
Total KPMG AG
(Germany)
Foreign
KPMG Firms
Total KPMG AG
(Germany)
Foreign
KPMG Firms
Total
Audit fees 2 7 9 2 8 10 2 7 9
Audit-related fees 1 0 1 2 0 2 0 0 0
Tax fees 0 0 0 0 0 0 0 0 0
All other fees 0 0 0 0 0 0 0 0 0
Total 3 7 10 4 8 12 2 7 9
Audit fees are the aggregate fees charged by KPMG for
the audit of our Consolidated Financial Statements as well as
audits of statutory fnancial statements of SAP AG and its
subsidiaries. Audit-related fees are fees charged by KPMG for
assurance and related services that are reasonably related
to the performance of the audit or review of our financial
statements and are not reported under audit fees. Tax fees
are fees for professional services rendered by KPMG for
tax advice on transfer pricing, restructuring, and tax compli-
ance on current, past, or contemplated transactions. The
all other fees category includes other support services, such
as training and advisory services on issues unrelated
to accounting and taxes.
(32) GErmAn CODE OF COrpOrAtE GOVErnAnCE
The German federal government published the German
Code of Corporate Governance in February 2002. The Code
contains statutory requirements and a number of recom-
mendations and suggestions. Only the legal requirements are
binding for German companies. With regard to the recom-
mendations, the German Stock Corporation Act, section 161,
requires that every year listed companies publicly state the
extent to which they have implemented them. Companies
can deviate from the suggestions without having to make any
public statements.
In 2013 and 2012, our Executive Board and Supervisory
Board issued the required declarations of implementation.
These statements are available on our Web site:
www.sap.com/corporate-en/investors/governance.
(33) SubSEquEnt EVEntS
No events that have occurred since December 31, 2013, have
a material impact on the Companys Consolidated Financial
Statements.
(34) SubSIDIArIES, ASSOCIAtES, AnD OthEr EquIty InVEStmEntS
As at December 31, 2013 Ownership
3)
Total
Revenue
in 2013
1)
Profit/
Loss ()
after Tax
for 2013
1)
Total Equity
as at
12/31/2013
1)
Number
of Employees
as at
12/31/2013
2)
Name and Location of Company % (000) (000) (000)
I. Fully Consolidated Subsidiaries
GErmAny
Ariba Deutschland GmbH, Frankfurt am Main 100.0 4,280 103 1,202 22
hybris GmbH, Munich
5)
100.0 26,330 3,007 32,234 217
OutlookSoft Deutschland GmbH, Walldorf 100.0 0 3
SAP Beteiligungs GmbH, Walldorf 100.0 3 3 53
SAP Business Compliance Services GmbH, Siegen 100.0 4,797 363 1,089 38
SAP Deutschland AG & Co. KG, Walldorf
8),10)
100.0 3,050,364 516,247 1,321,646 4,716
SAP Dritte Beteiligungs- und Vermgensverwaltungs GmbH, Walldorf
9),10)
100.0 20,479 541,342
SAP Erste Beteiligungs- und Vermgensverwaltungs GmbH, Walldorf
9),10)
100.0 3 804,844
SAP Foreign Holdings GmbH, Walldorf 100.0 193 88
SAP Fnfte Beteiligungs- und Vermgensverwaltungs GmbH, Walldorf
10)
100.0 2,849 2,325,861
SAP Hosting Beteiligungs GmbH, St. Leon-Rot 100.0 0 26
SAP Portals Europe GmbH, Walldorf 100.0 8 124,191
SAP Portals Holding Beteiligungs GmbH, Walldorf 100.0 46 930,081
SAP Projektverwaltungs- und Beteiligungs GmbH, Walldorf
9),10)
100.0 949 323,875
SAP Puerto Rico GmbH, Walldorf 100.0 34,127 2,779 5,773 20
SAP Retail Solutions Beteiligungsgesellschaft mbH, Walldorf 100.0 4,339 9,516
SAP Sechste Beteiligungs- und Vermgensverwaltungs GmbH, Walldorf
10)
100.0 0 25
SAP Ventures Investment GmbH, Walldorf 100.0 1 58,030
SAP Vierte Beteiligungs- und Vermgensverwaltungs GmbH, Walldorf 100.0 0 24
SAP Zweite Beteiligungs- und Vermgensverwaltungs GmbH, Walldorf
9),10)
100.0 101,699 126,334
SuccessFactors Germany GmbH, Garching 100.0 17,663 306 812 78
TechniData GmbH, Markdorf 100.0 117 639 29,703
rESt OF EurOpE, mIDDlE EASt, AFrICA
Ambin Properties (Proprietary) Limited, Johannesburg, South Africa 100.0 261 1,306
Ariba Belgium N.V., Heverlee, Belgium 100.0 1,653 68 1,405 8
Ariba Czech s.r.o., Prague, Czech Republic 100.0 8,294 210 1,666 158
Ariba France, SAS, Paris, France 100.0 11,228 602 3,436 53
Ariba Iberia, S.L., Madrid, Spain 100.0 1,778 74 716 12
Ariba International Sweden AB, Stockholm, Sweden 100.0 2,025 86 340 7
Ariba Italia SRL, Rome, Italy 100.0 1,589 12 726 10
Ariba Middle East & North Africa FZ-LLC, Dubai, United Arab Emirates 100.0 550 31 53 2
Ariba Slovak Republic s.r.o., Kosice, Slovakia 100.0 1,601 62 396 36
Ariba Switzerland GmbH, Zurich, Switzerland 100.0 1,039 49 1,059 6
Ariba Technologies Ireland Ltd., Dublin, Ireland 100.0 986 41 56 11
3)
Total
Revenue
in 2013
1)
Profit/
Loss ()
after Tax
for 2013
1)
Total Equity
as at
12/31/2013
1)
Number
of Employees
as at
12/31/2013
2)
Ariba Technologies Netherlands B.V., Amsterdam, the Netherlands 100.0 1,262 70 6,228 5
Ariba UK Limited, Egham, United Kingdom
11)
100.0 14,567 604 6,400 63
b-process, Paris, France 100.0 12,538 1,204 4,556 46
Business Objects (UK) Limited, London, United Kingdom
11)
100.0 29,936 319
Business Objects Holding B.V., s-Hertogenbosch, the Netherlands 100.0 59 4,284
Business Objects Software Limited, Dublin, Ireland 100.0 902,168 499,289 4,774,388 245
Christie Partners Holding C.V., Rotterdam, the Netherlands 100.0 2 21,828
Crossgate UK Ltd., Slough, United Kingdom
11)
100.0
Crystal Decisions (Ireland) Limited, Dublin, Ireland 100.0 0 44,543
Crystal Decisions Holdings Limited, Dublin, Ireland 100.0 4 77,725
Crystal Decisions UK Limited, London, United Kingdom
11)
100.0 0 2,206
Epista Software A/S, Copenhagen, Denmark 100.0 3,040 871 5,849 12
EssCubed Procurement Pty. Ltd., Johannesburg, South Africa 100.0 13 3 786
hybris AG, Rotkreuz, Switzerland
5)
100.0 51,536 22,800 1,057,690 24
hybris Austria GmbH, Vienna, Austria
5)
100.0 718 116 167 4
hybris France SAS, Levallois-Perret, France
5)
100.0 5,418 1,048 1,506 24
hybris Netherlands BV, Amsterdam, the Netherlands
5)
100.0 1,575 121 5,750 9
hybris Software AB, Vsters, Sweden
5)
100.0 1,239 598 8,716 9
hybris Sp.z.o.o., Gliwice, Poland
5)
100.0 2,870 576 540 121
hybris UK Ltd., London, United Kingdom
5)
100.0 11,281 31 20,878 60
Joe D Partners C.V., Utrecht, the Netherlands 100.0 160,869 3,084 454,937
KXEN Ltd., London, United Kingdom
5)
100.0 34 200 1,247 3
KXEN SAS, Suresnes, France
5)
100.0 1,170 443 530 42
Limited Liability Company SAP Labs, Moscow, Russia 100.0 9,616 38 976 114
Limited Liability Company SAP CIS, Moscow, Russia 100.0 445,093 14,227 81,046 834
Limited Liability Company SAP Kazakhstan, Almaty, Kazakhstan 100.0 20,234 1,122 3,814 23
Limited Liability Company SAP Ukraine, Kiev, Ukraine 100.0 35,415 1,012 3,669 96
Merlin Systems Oy, Espoo, Finland 100.0 9,967 230 3,300 31
NL Quotaholder 1 B.V., Amsterdam, the Netherlands 100.0
NL Quotaholder 2 B.V., Amsterdam, the Netherlands 100.0
OOO hybris Software, Moscow, Russia
5)
100.0 290 11 193 4
Plateau Systems UK Ltd., Guildford, United Kingdom 100.0 6 7,163
Quadrem Africa Pty. Ltd., Johannesburg, South Africa
4)
100.0 1,026 236 747 99
Quadrem Netherlands B.V., Amsterdam, the Netherlands 100.0 35,580 2,479 51,819 4
Quadrem Overseas Cooperatief U.A., Amsterdam, the Netherlands 100.0
SAP Nederland B.V., s-Hertogenbosch, the Netherlands 100.0 461,938 30,690 444,768 447
SAP - NOVABASE, A.C.E., Porto Salvo, Portugal 66.7
SAP (Schweiz) AG, Biel, Switzerland 100.0 646,567 84,175 189,327 615
SAP (UK) Limited, Feltham, United Kingdom 100.0 817,002 71,681 53,687 1,266
3)
Total
Revenue
in 2013
1)
Profit/
Loss ()
after Tax
for 2013
1)
Total Equity
as at
12/31/2013
1)
Number
of Employees
as at
12/31/2013
2)
SAP Belgium NV/SA, Brussels, Belgium 100.0 205,283 5,751 125,761 248
SAP Bulgaria EOOD, Sofia, Bulgaria 100.0 2,991 349 1,228 1
SAP Business Services Center Europe s.r.o., Prague, Czech Republic 100.0 28,629 428 7,408 454
SAP Business Services Center Nederland B.V., Utrecht, the Netherlands 100.0 226,727 7,581 47,565 20
SAP Commercial Services Ltd., Valletta, Malta 100.0 0 17
SAP R, spol. s r.o., Prague, Czech Republic 100.0 77,415 4,342 12,912 255
SAP Cyprus Ltd, Nicosia, Cyprus 100.0 3,045 191 2,274 2
SAP d.o.o., Zagreb, Croatia 100.0 7,251 194 574 13
SAP Danmark A/S, Copenhagen, Denmark 100.0 165,362 12,769 22,120 164
SAP East Africa Limited, Nairobi, Kenya
5)
100.0 6 2,502
SAP Egypt LLC, Cairo, Egypt 100.0 10,362 3,475 10,554 57
SAP EMEA Inside Sales S.L., Barcelona, Spain 100.0 14,020 285 3,119 97
SAP Espaa Sistemas, Aplicaciones y Productos en la Informtica, S.A., Madrid, Spain 100.0 257,656 14,090 224,996 407
SAP Estonia O, Tallinn, Estonia 100.0 2,216 67 289 1
SAP Finland Oy, Espoo, Finland 100.0 114,921 6,413 63,879 109
SAP France Holding, Paris, France 100.0 873 36,109 5,169,074 3
SAP France, Paris, France 100.0 866,137 173,827 1,508,230 1,413
SAP Hellas S.A., Athens, Greece 100.0 27,699 1,191 11,208 51
SAP Holdings (UK) Limited, Feltham, United Kingdom
5)
100.0 15,993 731,275
SAP Hungary Rendszerek, Alkalmazsok s Termkek az Adatfeldolgozsban
Informatikai Kft., Budapest, Hungary
100.0 45,664 1,462 15,049 411
SAP Ireland Limited, Dublin, Ireland 100.0 702 41 9,725
SAP Ireland US-Financial Services Ltd., Dublin, Ireland 100.0 200 353,089 4,766,140 3
SAP Israel Ltd., Ra'anana, Israel 100.0 36,288 1,843 3,516 56
SAP Italia Sistemi Applicazioni Prodotti in Data Processing S.p.A., Milan, Italy 100.0 372,780 16,071 297,860 537
SAP Labs Bulgaria EOOD, Sofia, Bulgaria 100.0 24,595 775 4,947 475
SAP Labs Finland Oy, Espoo, Finland 100.0 6,515 160 41,517 45
SAP Labs France SAS, Mougins, France 100.0 57,194 2,861 18,638 350
SAP Labs Israel Ltd., Ra'anana, Israel 100.0 52,368 2,021 17,495 338
SAP Latvia SIA, Riga, Latvia 100.0 2,229 38 185 3
SAP Malta Investments Ltd., Valletta, Malta 100.0 0 17
SAP Middle East and North Africa L.L.C., Dubai, United Arab Emirates
6)
49.0 167,892 36,717 55,309 337
SAP Nederland Holding B.V., s-Hertogenbosch, the Netherlands 100.0 2 521,916
SAP Norge AS, Lysaker, Norway 100.0 89,951 3,523 22,322 89
SAP sterreich GmbH, Vienna, Austria 100.0 192,649 19,746 25,229 347
SAP Polska Sp. z o.o., Warsaw, Poland 100.0 63,228 3,985 22,358 107
SAP Portals Israel Ltd., Ra'anana, Israel 100.0 61,812 21,101 75,890 214
SAP Portugal Sistemas, Aplicaes e Produtos Informticos,
Sociedade Unipessoal, Lda., Porto Salvo, Portugal
100.0 70,026 7,327 18,136 207
3)
Total
Revenue
in 2013
1)
Profit/
Loss ()
after Tax
for 2013
1)
Total Equity
as at
12/31/2013
1)
Number
of Employees
as at
12/31/2013
2)
SAP Public Services Hungary Kft., Budapest, Hungary 100.0 4,284 549 1,306 7
SAP Romania SRL, Bucharest, Romania 100.0 27,044 2,298 5,311 270
SAP Saudi Arabia Software Services Ltd, Riyadh, Kingdom of Saudi Arabia 100.0 44,426 3,561 37,416 50
SAP Saudi Arabia Software Trading Ltd, Riyadh, Kingdom of Saudi Arabia 75.0 36,862 25,350 24,698 81
SAP Service and Support Centre (Ireland) Limited, Dublin, Ireland 100.0 80,598 2,899 34,430 884
SAP sistemi, aplikacije in produkti za obdelavo podatkov d.o.o., Ljubljana, Slovenia 100.0 13,920 844 3,561 22
SAP Slovensko s.r.o., Bratislava, Slovakia 100.0 37,036 2,532 15,373 180
SAP Svenska Aktiebolag, Stockholm, Sweden 100.0 166,507 7,525 15,933 154
SAP Training and Development Institute FZCO, Dubai, United Arab Emirates 100.0 4,532 254 437 36
SAP Trkiye Yazilim retim ve Ticaret A.S., Istanbul, Turkey 100.0 78,245 10,007 10,138 155
SAP UAB (Lithuania), Vilnius, Lithuania 100.0 2,491 106 58 3
SAPV (Mauritius), Ebene, Mauritius
7)
0 258 22,932
SAP West Balkans d.o.o., Belgrade, Serbia 100.0 16,177 2,389 7,595 29
SuccessFactors (UK) Limited, London, United Kingdom 100.0 20,662 1,610 2,255 100
SuccessFactors Denmark ApS, Copenhagen, Denmark 100.0 1,687 171 279 4
SuccessFactors France SAS, Paris, France 100.0 9,109 290 573 45
SuccessFactors Ireland Limited, Dublin, Ireland 100.0 773 32 77 6
SuccessFactors Italy SRL, Milan, Italy 100.0 1,507 44 71 5
SuccessFactors Netherlands B.V., Amsterdam, the Netherlands 100.0 5,071 359 16,926 22
SuccessFactors Schweiz GmbH, Zurich, Switzerland 100.0 3,620 257 388 7
Sybase (UK) Limited, Maidenhead, United Kingdom
11)
100.0 0 4 327
Sybase France SARL, Paris, France 100.0 46,272 4,754 12,919
Sybase Iberia S.L., Madrid, Spain 100.0 2 65,920
Sybase South Africa (Proprietary) Limited, Johannesburg, South Africa 89.5 38 75
Syclo International Limited, Leatherhead, United Kingdom
11)
100.0 510 977 0
Systems Applications Products Africa Region (Proprietary) Limited, Johannesburg,
South Africa
100.0 81,563 10,920 23,403 39
Systems Applications Products Africa (Proprietary) Limited, Johannesburg, South Africa 100.0 3,146 62,455
Systems Applications Products Nigeria Limited, Abuja, Nigeria 100.0 16,604 907 2,953 43
Systems Applications Products South Africa (Proprietary) Limited,
Johannesburg, South Africa
89.5 227,424 12,240 5,707 455
The Infohrm Group Ltd., London, United Kingdom 100.0 88 223 245
TomorrowNow (UK) Limited, Feltham, United Kingdom
11)
100.0 0 0
TomorrowNow Nederland B.V., Amsterdam, the Netherlands 100.0 9 3,301
3)
Total
Revenue
in 2013
1)
Profit/
Loss ()
after Tax
for 2013
1)
Total Equity
as at
12/31/2013
1)
Number
of Employees
as at
12/31/2013
2)
AmErICAS
110405, Inc., Newtown Square, Pennsylvania, USA 100.0 0 15,150
Alliente, Inc., Pittsburgh, Pennsylvania, USA 100.0
Ariba Canada, Inc., Mississauga, Canada 100.0 3,094 129 1,214 21
Ariba Holdings, Inc., Grand Cayman, Cayman Islands 100.0
Ariba, Inc., Sunnyvale, California, USA 100.0 299,460 92,369 3,093,731 1,245
Ariba International Holdings, Inc., Wilmington, Delaware, USA 100.0
Ariba International, Inc., Wilmington, Delaware, USA 100.0 7,405 301 1,722 43
Ariba Investment Company, Inc., Wilmington, Delaware, USA 100.0 2,638 210,474
Business Objects Argentina S.R.L., Buenos Aires, Argentina 100.0 0 49
Business Objects Option LLC, Wilmington, Delaware, USA 100.0 33 2,032 63,668
Camilion Solutions, Inc., Markham, Canada
5)
100.0 9,364 3,017 31,701 114
Cube Tree LLC, San Mateo, California, USA 100.0 505 492 680
Extended Systems, Inc., Boise, Idaho, USA 99.0 32 16,513
Financial Fusion, Inc., Concord, Massachusetts, USA 100.0
FreeMarkets International Holdings Inc. de Mexico, de S. de R.L. de C.V.,
Mexico City, Mexico
100.0 60
FreeMarkets Ltda., So Paulo, Brazil 100.0 52 376 464
hybris Canada, Inc., Montral, Canada
5)
100.0 13,492 723 254 244
hybris Software Brasil Ltda., Morumbi, Brazil
5)
100.0 23 389 821 4
hybris (US) Corp., Wilmington, Delaware, USA
5)
100.0 28,138 1,400 25,043 125
iAnywhere Solutions, Inc., Dublin, California, USA 99.0 75,212 36,253 172,933 43
Inxight Federal Systems Group, Inc., Wilmington, Delaware, USA 100.0 0 66
Jam Acquisition II LLC, San Mateo, California, USA 100.0 200 200 178
Jobs2Web, Inc., Minnetonka, Minnesota, USA 100.0 2,897 2,637 2,482
KXEN, Inc., San Francisco, California USA
5)
100.0 531 651 21,199 11
Plateau Systems LLC, Arlington, Virginia, USA 100.0 4,564 3,972 5,603
Quadrem Brazil Ltda., Rio de Janeiro, Brazil 100.0 23,672 2,001 7,370 175
Quadrem Canada Ltd., Mississauga, Canada 100.0 923 102 506 8
Quadrem Chile Ltda., Santiago de Chile, Chile 100.0 13,566 677 1,732 187
Quadrem Colombia SAS, Bogot, Colombia 100.0 240 26 33 3
Quadrem International Ltd., Hamilton, Bermuda 100.0 826 69,569
Quadrem Mexico S. de R. de C.V., Mexico City, Mexico 100.0 360 2 38 3
Quadrem Peru S.A.C., Lima, Peru 100.0 2,803 1,346 2,105 89
Quadrem U.S., Inc., Plano, Texas, USA 100.0
SAP America, Inc., Newtown Square, Pennsylvania, USA 100.0 3,530,473 114,589 4,992,376 5,819
SAP Andina y del Caribe C.A., Caracas, Venezuela 100.0 14,481 53,041 35,312 26
SAP Argentina S.A., Buenos Aires, Argentina 100.0 172,462 14,424 4,773 618
SAP Brasil Ltda, So Paulo, Brazil 100.0 553,602 12,986 43,000 1,441
3)
Total
Revenue
in 2013
1)
Profit/
Loss ()
after Tax
for 2013
1)
Total Equity
as at
12/31/2013
1)
Number
of Employees
as at
12/31/2013
2)
SAP Canada, Inc., Toronto, Canada 100.0 708,115 50,265 470,548 2,201
SAP Chile Limitada, Santiago, Chile 100.0 1,015 13,618
SAP Colombia SAS, Bogot, Colombia 100.0 129,544 5,209 15,589 216
SAP Costa Rica, S.A., San Jos, Costa Rica 100.0 14,550 4,394 4,404 13
SAP Financial, Inc., Toronto, Canada 100.0 25,202 6,738
SAP Global Marketing, Inc., New York, New York, USA 100.0 276,915 1,148 24,311 543
SAP HANA Real Time Fund, Wilmington, Delaware, USA
7)
0 904 1,292
SAP Industries, Inc., Newtown Square, Pennsylvania, USA 100.0 468,227 40,420 396,489 446
SAP International, Inc., Miami, Florida, USA 100.0 29,221 3,806 8,615 65
SAP International PANAMA S.A., Panama City, Panama
5)
100.0 234 30 334 2
SAP Investments, Inc., Wilmington, Delaware, USA 100.0 25,169 666,458
SAP LABS, LLC, Palo Alto, California, USA 100.0 545,498 10,662 221,018 2,184
SAP Mxico S.A. de C.V., Mexico City, Mexico 100.0 306,180 8,737 18,242 569
SAP National Security Services, Inc., Newtown Square, Pennsylvania, USA 100.0 178,593 35,723 173,364 268
SAP PERU S.A.C., Lima, Peru 100.0 29,648 3,248 4,846 55
SAP Public Services, Inc., Washington, D.C., USA 100.0 288,791 13,780 256,245 202
SAP Technologies Inc., Palo Alto, California, USA 100.0
SAP Ventures Fund I, L.P., Wilmington, Delaware, USA
7)
0 31,690 110,261
SAP Ventures Fund II, L.P., Wilmington, Delaware, USA
5), 7)
0 2,630 2,584
SuccessFactors, Inc., San Mateo, California, USA 100.0 413,455 173,389 2,406,889 1,373
SuccessFactors Brasil Consultoria e Assistncia em Vendas Limitada, So Paulo, Brazil 100.0 6,571 332 272 28
SuccessFactors Canada Inc., Ottawa, Canada 100.0 8,564 254 580 33
SuccessFactors Cayman, Ltd., Grand Cayman, Cayman Islands 100.0 208
SuccessFactors de Mxico, S. de R.L. de C.V., Mexico City, Mexico 100.0 4,175 138 155 19
SuccessFactors International Holdings, LLC, San Mateo, California, USA 100.0 102
SuccessFactors International Services, Inc., San Mateo, California, USA 100.0 3,486 168 286 7
SuccessFactors Middle East Holdings, LLC, San Mateo, California, USA 100.0
Surplus Record, Inc., Chicago, Illinois, USA 100.0 3,006 755 7,757
Sybase 365 LLC, Dublin, California, USA 100.0 101,570 1,192 57,218 116
Sybase 365 Ltd., Tortola, British Virgin Islands 100.0 0 908
Sybase Argentina S.A., Buenos Aires, Argentina 100.0 112 703
Sybase Global LLC, Dublin, California, USA 100.0 7,064
Sybase Intl Holdings LLC, Dublin, California, USA 100.0 0 11,346
Sybase, Inc., Dublin, California, USA 100.0 547,633 252,904 4,375,352 1,031
The Inforhrm Group, Inc., Washington, Columbia, USA 100.0 34 6 24
TomorrowNow, Inc., Bryan, Texas, USA 100.0 1,454 179,441 3
YouCalc, Inc., San Mateo, California, USA 100.0
3)
Total
Revenue
in 2013
1)
Profit/
Loss ()
after Tax
for 2013
1)
Total Equity
as at
12/31/2013
1)
Number
of Employees
as at
12/31/2013
2)
ASIA pACIFIC JApAn
Ariba (China) Limited, Hong Kong, China 100.0
Ariba Australia Pty Ltd., Sydney, Australia 100.0 21 1
Ariba India Pvt. Ltd., Gurgaon, India 100.0 4,707 708 2,299 42
Ariba International Singapore Pte. Ltd., Singapore, Singapore 100.0 4,125 63 4,894 19
Ariba Software Technology Services (Shanghai) Co. Ltd., Shanghai, China 100.0 828 10 592 2
Ariba Technologies India Pvt. Ltd., Bangalore, India 100.0 18,948 1,716 6,233 561
Beijing Zhang Zhong Hu Dong Information Technology Co. Ltd., Beijing, China
6)
0 1,032 2 849 7
Business Objects Malaysia Sdn. Bhd., Kuala Lumpur, Malaysia 100.0 2 238
Business Objects Software (Shanghai) Co. Ltd., Shanghai, China 100.0 6,746 354 7,846 84
hybris Australia Pty Limited, Surry Hills, Australia
5)
100.0 2,638 199 232 18
hybris Hong Kong Ltd., Hong Kong, China
5)
100.0 1,579 528 510 8
hybris Japan K.K., Tokyo, Japan
5)
100.0 972 195 111 7
hybris Korea Ltd., Seoul, South Korea
5)
100.0 545 1,148 292 3
Nihon Ariba K.K., Tokyo, Japan 100.0 2,332 136 1,426 13
Plateau Systems Australia Ltd, Brisbane, Australia 100.0 710
Plateau Systems Pte. Ltd., Singapore, Singapore 100.0 469
PT SAP Indonesia, Jakarta, Indonesia 99.0 50,527 3,289 2,690 55
PT Sybase 365 Indonesia, Jakarta, Indonesia 100.0 0 44 278
Quadrem Asia Pte. Ltd., Singapore, Singapore 100.0 63 7 119
Quadrem Australia Pty Ltd., Brisbane, Australia 100.0 3,754 315 971 21
Quadrem China Ltd., Hong Kong, China 100.0 13
Right Hemisphere Ltd., Auckland, New Zealand 100.0 1,538 1,647 5,739
Ruan Lian Technologies (Beijing) Co. Ltd., Beijing, China 100.0 81 7 921 1
SAP (Beijing) Software System Co. Ltd., Beijing, China 100.0 544,297 10,691 24,902 3,697
SAP Asia Pte Ltd, Singapore, Singapore 100.0 360,926 7,880 84,461 1,023
SAP Asia (Vietnam) Co. Ltd., Ho Chi Minh City, Vietnam 100.0 1,449 24 538 42
SAP Australia Pty Ltd, Sydney, Australia 100.0 479,267 25,552 243,608 770
SAP Hong Kong Co. Limited, Hong Kong, China 100.0 55,271 905 1,276 87
SAP India (Holding) Pte Ltd, Singapore, Singapore 100.0 7 275
SAP India Private Limited, Bangalore, India 100.0 383,854 36,544 212,004 1,892
SAP Japan Co. Ltd., Tokyo, Japan 100.0 620,435 32,575 412,555 1,050
SAP Korea Ltd., Seoul, South Korea 100.0 202,190 7,879 25,871 313
SAP Labs India Private Limited, Bangalore, India 100.0 184,569 3,010 711 4,632
SAP Labs Korea, Inc., Seoul, South Korea 100.0 13,968 439 17,388 125
SAP Malaysia Sdn. Bhd., Kuala Lumpur, Malaysia 100.0 92,273 4,885 25,849 117
SAP New Zealand Limited, Auckland, New Zealand 100.0 73,758 6,272 41,068 97
SAP Philippines, Inc., Makati, Philippines 100.0 34,754 705 1,816 44
3)
Total
Revenue
in 2013
1)
Profit/
Loss ()
after Tax
for 2013
1)
Total Equity
as at
12/31/2013
1)
Number
of Employees
as at
12/31/2013
2)
SAP SYSTEMS, APPLICATIONS AND PRODUCTS IN DATA PROCESSING
(THAILAND) LTD., Bangkok, Thailand
4)
100.0 68,015 275 11,303 60
SAP Taiwan Co. Ltd., Taipei, Taiwan 100.0 59,114 4,723 34,776 84
Shanghai SuccessFactors Software Technology Co., Ltd., Shanghai, China 100.0 11,418 288 1,038 166
SuccessFactors (Philippines), Inc., Pasig City, Philippines 100.0 2,100 60 56 82
SuccessFactors Asia Pacific Limited, Hong Kong, China 100.0 5 0 212
SuccessFactors Australia Holdings Pty Ltd., Brisbane, Australia 100.0 4,795 9,592
SuccessFactors Australia Pty Limited, Brisbane, Australia 100.0 20,413 2,475 36,112 94
SuccessFactors Business Solutions India Private Limited, Bangalore, India 100.0 7,798 353 636 167
SuccessFactors Hong Kong Limited, Hong Kong, China 100.0 2,755 105 184 11
SuccessFactors Japan K.K., Tokyo, Japan 100.0 3,001 143 15 14
SuccessFactors Korea Ltd., Seoul, South Korea 100.0 23 1 35
SuccessFactors Singapore Pte. Ltd., Singapore, Singapore 100.0 3,150 141 217 11
Sybase Australia Pty Ltd, Sydney, Australia 100.0 17,015 107
Sybase Hong Kong Ltd, Hong Kong, China 100.0 74 422
Sybase India Ltd., Mumbai, India 100.0 9 2,112
Sybase Philippines, Inc., Makati City, Philippines 100.0 15 8
Sybase Software (China) Co. Ltd., Beijing, China 100.0 33,119 1,026 17,265 331
Sybase Software (India) Private Ltd, Mumbai, India 100.0 17,269 1,110 8,382 219
TomorrowNow Australia Pty Ltd, Sydney, Australia 100.0 1
TomorrowNow Singapore Pte Ltd, Singapore, Singapore 100.0 7
3)
Total
Revenue
in 2013
1)
Profit/
Loss ()
after Tax
for 2013
1)
Total Equity
as at
12/31/2013
1)
Number
of Employees
as at
12/31/2013
2)
II. InVEStmEntS In ASSOCIAtES
Alteryx, Inc., Irvine, California, USA 15.42 21,168 4,781 728 171
China DataCom Corporation Limited, Guangzhou, China 28.30 47,689 4,456 37,361 1,049
Greater Pacific Capital (Cayman) L.P., Grand Cayman, Cayman Islands
12)
5.35 497 822 285,845
Original1 GmbH, Frankfurt am Main, Germany
13)
40.00
Procurement Negcios Eletrnicos S/A, Rio de Janeiro, Brazil 17.00 23,033 1,063 12,655
1)
These fgures are based on our local IFRS fnancial statements prior to eliminations resulting from consolidation and therefore
do not refect the contribution of these companies included in the Consolidated Financial Statements. The translation of the equity into
Group currency is based on period-end closing exchange rates, and on average exchange rates for revenue and net income/loss.
2)
As at December 31, 2013, including managing directors, in FTE.
3)
No changes in ownership percentage unless otherwise specifed in the footnotes.
4)
During the year 2013, SAP's ownership of the following subsidiary changed: SAP SYSTEMS, APPLICATIONS AND PRODUCTS IN DATA PROCESSING (THAILAND) LTD., Bangkok, Thailand
(2012: 49%); Quadrem Africa Pty. Ltd., Johannesburg, South Africa (2012: 49%).
5)
Consolidated for the frst time in 2013.
6)
Agreements with the other shareholders provide that SAP AG fully controls the entity.
7)
SAP AG does not hold any ownership interests in four structured entities, SAPV (Mauritius), SAP HANA Real Time Fund, SAP Ventures Fund I, L.P. and SAP Ventures Fund II, L.P. However,
based on the terms of limited partnership agreements under which these entities were established, SAP AG is exposed to the majority of the returns related to their operations and
has the current ability to direct these entities' activities that afect these returns, in accordance with IFRS 10. Accordingly, the results of operations are included in SAPs consolidated fnancial statements.
8)
Entity whose personally liable partner is SAP AG.
9)
Entity with proft and loss transfer agreement.
10)
Pursuant to HGB, section 264 (3) or section 264b, the subsidiary is exempt from applying certain legal requirements to their statutory
stand-alone fnancial statements including the requirement to prepare notes to the fnancial statements and a review of operations,
the requirement of independent audit and the requirement of public disclosure.
11)
Pursuant to sections 479A to 479C of the UK Companies Act 2006 the subsidiaries are exempt from having their fnancial statements audited
on the basis that SAP AG has provided a guarantee of these subsidiaries' liabilities in respect of their fnancial year ended 31 December 2013.
12)
Greater Pacifc Capital (Cayman) is part of a fund-of-funds concept acting as one of the feeder-funds to the partnership. There are neither
fnancial statements for the year ended December 31, 2013 nor budget or forecast available hence the information provided is based on the
audited fnancial statements for the year ended December 31, 2012.
13)
Original1 GmbH is in liquidation and it has not been deregistered from the commercial register yet.
As at December 31, 2013
Name and Location of Company
III. OthEr EquIty InVEStmEntS
(ownership of 5% or more)
Alchemist Accelerator Fund I LLC, San Francisco, California, USA
All Tax Platform - Solucoes Tributarias S.A., So Paulo, Brazil
Amplify Partners L.P., Cambridge, Massachusetts, USA
ArisGlobal Holdings LLC, Stamford, Connecticut, USA
Connectiva Systems, Inc., New York, New York, USA
Convercent, Inc., Denver, Colorado, USA
Data Collective II L.P., San Francisco, California, USA
EIT ICT Labs GmbH, Berlin, Germany
Five 9, Inc., San Ramon, California, USA
Follow Analytics, Inc., San Francisco, California, USA
GK Software AG, Schneck, Germany
InnovationLab GmbH, Heidelberg, Germany
iTAC Software AG, Dernbach, Germany
iYogi Holdings Pvt. Ltd., Port Louis, Mauritius
JasperSoft Corporation, San Francisco, California, USA
Lavante, Inc., San Jos, California, USA
MuleSoft, Inc., San Francisco, California, USA
MVP Strategic Partnership Fund GmbH & Co. KG, Grnwald, Germany
Narrative Science, Inc., Chicago, Illinois, USA
On Deck Capital, Inc., New York, New York, USA
Onventis GmbH, Stuttgart, Germany
Patent Quality, Inc., Bellevue, Washington, USA
PayScale, Inc., Seattle, Washington, USA
Point Nine Capital Fund II GmbH & Co. KG, Berlin, Germany
Post for Systems, Cairo, Egypt
Realize Corporation, Tokyo, Japan
Retail Solutions, Inc. (legal name: T3C, Inc.), Mountain View, California, USA
Return Path, Inc., New York, New York, USA
RIB Software AG, Stuttgart, Germany
Smart City Planning, Inc., Tokyo, Japan
SV Angel IV L.P., San Francisco, California, USA
Technologie- und Grnderzentrum Walldorf Stiftung GmbH, Walldorf, Germany
The SAVO Group Ltd., Chicago, Illinois, USA
Ticketfly, Inc., San Francisco, California, USA
Vendavo, Inc., Mountain View, California, USA
Walldorf, February 20, 2014
SAP AG
Walldorf, Baden
The Executive Board
Werner Brandt Gerhard Oswald
Vishal Sikka
U.S. law requires that management submit a report on the
efectiveness of internal control over fnancial reporting in the
consolidated fnancial statements. For 2013, that report is
as follows:
The management of SAP is responsible for establishing and
maintaining adequate internal control over fnancial reporting
as such term is defned in Rules 13a-15(f) and 15d-15(f) under
the U.S. Securities Exchange Act of 1934. SAPs internal control
over fnancial reporting is a process designed under the
supervision of SAPs co-CEOs and CFO to provide reasonable
assurance regarding the reliability of fnancial reporting and
the preparation of fnancial statements for external reporting
purposes in accordance with International Financial Reporting
Standards (IFRS) as issued by the International Accounting
Standards Board (IASB).
SAPs management assessed the efectiveness of the Companys
internal control over fnancial reporting as at December 31, 2013.
In making this assessment, it used the criteria set forth by the
Committee of Sponsoring Organizations of the Treadway
Commission (COSO) in Internal Control - Integrated
Framework (1992).
Based on the assessment under these criteria, SAP management
has concluded that, as at December 31, 2013, the Companys
internal control over fnancial reporting was efective.
KPMG AG Wirtschaftsprfungsgesellschaft, our independent
registered public accounting frm, has issued its attestation
report on the efectiveness of SAPs internal control over
fnancial reporting. It is included in the independent auditors
report on the Consolidated Financial Statements and
Management Report as at December 31, 2013.
Managements Annual Report on Internal
Control over Financial Reporting in
the Consolidated Financial Statements
281 Managements Annual Report on Internal Control
Five-year
Summary
Analyze our fnancial,
social, and environmental
performance over the
past fve years.
To learn more about SAPs performance please visit www.sapintegratedreport.com
Five-Year Summary
Glossary
Addresses
Financial Calendar
Publication Details
283
284
287
308
309
310
311
283
Five-Year Summary
1)
SAP Group
2013 2012 2011 2010 2009
Revenue and income
Software and cloud subscriptions (IFRS) 5,212 4,928 4,125 3,424 2,735
Non-IFRS adjustments 63 73 0 0 0
Software and cloud subscriptions (non-IFRS) 5,275 5,001 4,125 3,424 2,735
Software and software-related service revenue (IFRS) 13,950 13,165 11,319 9,794 8,198
Software and software-related service revenue (non-IFRS) 14,032 13,246 11,346 9,868 8,209
Total revenue (IFRS) 16,815 16,223 14,233 12,464 10,672
Total revenue (non-IFRS) 16,897 16,304 14,260 12,538 10,683
Software and software-related service revenue as a percentage of total revenue 83 81 80 79 77
Operating profit (IFRS) 4,479 4,041 4,884 2,591 2,588
Non-IFRS adjustments 1,035 1,148 171 1,416 339
Operating profit (non-IFRS) 5,514 5,190 4,713 4,007 2,927
Operating margin as a percentage (IFRS) 26.6 24.9 34.3 20.8 24.3
Operating margin as a percentage (non-IFRS) 32.6 31.8 33.1 32.0 27.4
Operating margin as a percentage (non-IFRS at constant currency) 33.5 33.0 32.7 33.2 27.6
Share-based payments 327 522 68 58 54
Restructuring
2)
70 8 4 3 198
Acquisition-related charges 555 537 448 300 271
Financial income, net 66 72 42 67 80
Profit before tax 4,396 3,796 4,767 2,338 2,435
Income tax expense 1,071 993 1,331 525 685
Profit after tax 3,325 2,803 3,437 1,813 1,750
Profit before tax (as a percentage) 26 23 33 19 23
Return on equity (as a percentage) 22 21 31 20 22
liquidity and cash flow
Net cash flows from operating activities 3,832 3,822 3,775 2,922 3,019
Net cash flows from investing activities 1,781 5,964 1,226 3,994 299
Net cash flows from financing activities 1,589 194 1,176 2,520 2,170
Free cash flow 3,266 3,281 3,330 2,588 2,794
Free cash flow as percentage of total revenue 19 20 23 21 26
Cash conversion rate (net cash flows from operating activities as a percentage of profit after tax) 115 136 110 161 173
Cash and cash equivalents 2,748 2,477 4,965 3,518 1,884
Short-term investments 93 15 636 10 400
Group liquidity (cash and cash equivalents/short-term investments/restricted cash) 2,841 2,492 5,601 3,528 2,284
Financial debts (due to banks, private placements, bonds) 4,308 4,994 3,965 4,378 703
Net liquidity 1,467 2,502 1,636 850 1,581
Days sales outstanding (DSO, in days) 62 59 60 65 79
284 Additional Information
SAP Group
2013 2012 2011 2010 2009
Assets, equity and liabilities
Trade and other receivables 3,963 4,005 3,577 3,177 2,598
Total current assets 7,352 6,928 9,669 7,143 5,255
Total non-current assets 19,741 19,378 13,558 13,696 8,119
Deferred cloud subscription and support revenue (IFRS) 443 317 4 2 0
Deferred cloud subscription and support revenue (non-IFRS) 447 358 4 2 0
Total current liabilities (including deferred income) 6,347 6,546 6,266 5,153 3,416
Total non-current liabilities (including deferred income) 4,699 5,627 4,254 5,862 1,467
Total equity (including non-controlling interests) 16,048 14,133 12,707
9)
9,824 8,491
Total assets 27,094 26,306 23,227 20,841 13,374
Equity ratio (total equity as a percentage of total assets) 59 54 55 47 63
Debt ratio (total liabilities as a percentage of total assets) 41 46 45 53 37
Investments in goodwill, intangible assets or property, plant, and equipment
(including capitalizations due to acquisitions)
1,812 6,859 657 5,502 299
Depreciation and amortization 951 863 724 534 499
Operating expenses
Cost of software and software-related services 2,597 2,555 2,107 1,823 1,658
Cost of professional services and other services 2,402 2,520 2,247 2,071 1,851
Total cost of revenue 4,999 5,075 4,354 3,894 3,509
Research and development 2,282 2,261 1,935 1,729 1,591
Research and development (as a percentage of total revenue) 14 14 14 14 15
Research and development (as a percentage of total operating expenses) 18 19 21 18 20
Number of employees in research and development at year-end
3)
17,804 18,012 15,861 15,884 14,813
Sales and marketing 4,131 3,912 3,083 2,646 2,199
General and administration 866 949 715 636 564
Financial performance measures
Issued shares at year-end (in millions) 1,229 1,229 1,228 1,227 1,226
Weighted average shares outstanding, basic (in millions) 1,193 1,192 1,189 1,188 1,188
Earnings per share, basic (in ) 2.79 2.35 2.89 1.52 1.47
Weighted average shares outstanding, diluted (in millions) 1,195 1,193 1,190 1,189 1,189
Earnings per share, diluted (in ) 2.78 2.35 2.89 1.52 1.47
Dividend per ordinary share (in ) 1.00 0.85 1.10 0.60 0.50
Total dividend distributed
4)
1,194 1,013 1,310 713 594
Total dividend distributed as a percentage of profit after tax 36 36 38 39 34
SAP share price at year-end (in ) 62.31 60.69 40.85 38.10 33.00
SAP share price peak (in ) 64.80 61.43 45.90 38.40 35.26
SAP share price low (in ) 52.20 41.45 34.26 31.12 25.01
285 Five-Year Summary
SAP Group
2013 2012 2011 2010 2009
Financial performance measures (continued)
Market capitalization (in billions) 76.5 74.7 50.2 46.7 40.5
Return on SAP ordinary shares
5)
1-year investment period (as a percentage) 4.20 52.10 8.70 17.00 32.90
5)
5)
Employees and personnel expenses
Number of employees at year-end
3)
66,572 64,422 55,765 53,513 47,584
Number of employees, annual average
3)
65,409 61,134 54,346 49,970 48,471
Personnel expenses 7,489 7,286 5,880 5,261 4,963
Personnel expenses excluding share-based payments 7,162 6,764 5,812 5,203 4,909
Personnel expenses per employee excluding share-based payments (in thousands) 109 111 107 104 101
Women working at SAP (as a percentage) 31 30 30 30 29
Women in management
7)
(total, as a percentage) 21.2 20.8 19.5 18.7 17.6
Women managing managers
6),7)
(as a percentage) 14.3 14.5 13.5 13.7 14.7
Women managing teams
6),7)
(as a percentage) 21.7 21.1 20.5 19.6 19.1
Employee Engagement Index (as a percentage) 77 79 77 68 69
Business Health Culture Index (as a percentage) 67 66 65 59 61
Employee retention (as a percentage) 93.5 94.0 92.8 92.9 94.2
Total turnover rate (as a percentage) 8 7 9 9 11
Environment
Greenhouse gas emissions (in kilotons) 545 485 490 455 480
Greenhouse gas emissions per employee
3)
(in tons) 8.3 7.9 9.0 8.7 9.2
Greenhouse gas emissions per revenue (in grams) 32.4 30.0 34.4 36.4 42.0
Total energy consumption (in GWh) 910 860 860 845 860
Energy consumed per employee
3)
(in kWh) 13,900 14,000 15,700 16,100 16,500
Data center energy consumed (in GWh) 173 160 154 144 157
Data center energy per employee
3)
(in kWh) 2,633 2,598 2,824 2,746 3,001
Renewable energy sourced (as a percentage) 43 51 32 32 0
Customers
Net Promoter Score
8)
(as a percentage) 12.1 8.9 NA NA NA
1)
Amounts for 2009 to 2013 according to IFRS, unless otherwise stated
2)
Includes 5 million (2010) and 4 million (2009) acquisition-related charges
3)
4)
2013 numbers are based on the proposed dividend for 2013 and on 2013 closing level of treasury stock.
5)
Assuming all dividends are reinvested
6)
Relates to diferent levels of management position
7)
Numbers based on year-end
8)
In 2012, we adopted a new methodology for measuring customer loyalty: Net Promoter Score (NPS).
There are therefore no comparable NPS values for years prior to 2012.
9)
Total equity after IAS 19 (revised) adoption: 12,689 million
A
ABAP SAP software programming language.
add-on SAP application that is technically dependent on
and can only be installed on top of another SAP application.
Americas SAP Users Group (ASUG) Non-proft organization
of SAP customer companies dedicated to providing educational
and networking opportunities in support of SAP software and
implementation. These user groups are established in regions
around the world to share knowledge and infuence SAP
development eforts. ASUG is the largest user group with more
than 50,000 members in the Americas.
analytics Data analysis typically generated in the form of
reports and charts that can be used for business insight and
decision making.
analytics solutions from SAP Analytics solutions from SAP
enable people to unleash the power of collective insight in
Big Data by empowering them with the right information at the
right time to make insightful business decisions, anticipate
change, and uncover new opportunities. When powered by SAP
HANA, companies can unleash the power of real-time collective
insight by overcoming the classic trade-of between the speed
and fexibility of data analysis. Our analytics oferings cover the
areas of business intelligence, enterprise performance man-
agement, and governance, risk, and compliance.
application Software that enables organizations to perform
certain business processes or activities and to address specifc
business needs.
applied analytics Category of oferings within the analytics
solutions from SAP portfolio comprising individual oferings for
analytic applications, analytic content, and accelerators.
Ariba SAPs acquisition of Ariba, Inc., a leading cloud-based
business commerce network, completed on October 1, 2012.
All cloud-related supplier assets of SAP are now consolidating
under Ariba, which operates as an independent business
under the name Ariba, an SAP company. Ariba solutions for
procurement, fnancials, and sourcing, as well as the Ariba
Network, continue to maintain the Ariba brand.
Ariba Network Business commerce network where
com panies of all sizes can connect to their trading partners
anywhere, at any time from any application or device to buy,
sell, and manage their cash more efciently and efectively
than ever before. Companies around the world use the Ariba
Network to simplify inter-enterprise commerce and enhance
the results they deliver. See business network.
b
benchmarking Process of measuring products, services,
and practices against those of leading companies, which
can also be used as a reference point of measurement for
evalu ating best practices.
best practice A management concept that involves devising
a method of process that most efectively produces a desired
outcome. SAP applications use business best practices to help
customers automate common business processes through
software and technology. See SAP Best Practices.
Big Data The large volume of data created by billions of
connected devices and people generating a tremendous
amount of information about their behavior, location, and
activity. This availability of massive amounts of data requires
companies to rethink technology architecture and database
structures.
Business Health Culture Index A score for the general
cultural conditions in an organization that enable employees
to stay healthy and balanced. The index is calculated based on
the results of regular employee surveys.
Glossary
287 Glossary
core applications Standard business applications available
in SAP Business Suite, including SAP ERP, SAP Customer
Relationship Management (SAP CRM), SAP Product Lifecycle
Management (SAP PLM), SAP Supply Chain Management
(SAP SCM), and SAP Supplier Relationship Management
(SAP SRM).
core solutions Oferings for standard business applications
and technologies that provide customers with a stable,
con sistent solution suite that allows them to be more efcient
and agile, make decisions in real time, and create new value
for their own customers. See core applications.
CO
2
equivalent A measure to compare the emissions of
various greenhouse gases based upon their global warming
potential. For example, the global warming potential for methane
over 100 years is 21. This means that emissions of one
million metric tons of methane are equivalent to emissions of
21 million metric tons of carbon dioxide.
custom development project (CDP) Realization of a
custom-developed solution that meets unique business needs,
realized at SAP or in a customers development system.
customer connection A simple process directed at
incrementally enhancing and improving the products and
solutions SAP customers are using today. It ofers SAP
customers the opportunity to suggest small enhancements to
products and solutions in mainstream maintenance, for fast
and non-dis ruptive delivery using notes and support packages.
D
data center energy The amount of energy consumed in
SAPs data centers related to the number of employees
(expressed in full-time equivalents/FTEs).
data warehouse An electronic collection of information
organized for easy access by computer programs. See SAP
NetWeaver Business Warehouse.
design thinking A methodology for routine innovation that
brings together the right side of the brain (creative) with the
left side of the brain (analytical).
business intelligence (BI) Software that enables users to
analyze an organizations raw data and make fact-based
decisions. BI-related processes include data mining, analytical
processing, querying, and reporting. SAP BusinessObjects
BI solutions include the SAP BusinessObjects BI platform, SAP
Crystal Reports, SAP BusinessObjects Dashboards, and SAP
Lumira.
business network An online service that connects
businesses and their systems to those of their trading partners
and enables new processes and information and insight sharing
only possible in a digital environment. See Ariba Network.
business user Employees who spend signifcant time fnding
and sharing information, collaborating with others, coordinat-
ing projects, devising strategy or operational tactics, and com-
ing up with new ideas based on information gathered from
multiple sources. Also called knowledge or information workers
or business consumers.
business warehouse See data warehouse.
C
channel partner SAP partner category that includes value-
added resellers (VARs), independent software vendors (ISVs),
and value-added distributors.
cloud computing Generic term for fexible, IT-related services
available through, or hosted on, the Internet for consumers
and business, including storage, computing power, software
development environments, and applications, combined
with service delivery. Accessed as needed in the cloud, these
services eliminate the need for in-house IT resources. See
software as a service.
disruptive technology Process by which a product or service
takes root initially in simple applications at the bottom of
a market and then relentlessly moves up market, eventually
displacing established competitors. Term coined by Clayton
Christensen.
DSAG Abbreviation for Deutschsprachige SAP-Anwender-
gruppe (German-Speaking SAP Users Group), which
has around 43,062 members from 2,735 companies in
German-speaking countries and beyond.
E
ecosystem Construct encompassing SAP and its customers
and partners that extends the value SAP provides to its
customers. By bringing together community-based insight,
innovative partner solutions, and industry-leading collaboration
and co-innovation, it enables customers to extract the greatest
possible value from their SAP investments.
embedded analytics Incorporating business intelligence
within operational applications and business processes.
Employee Engagement Index A score for the level of
em ployee commitment, pride, and loyalty, as well as the feeling
of employees of being advocates for their company.
employee retention The ratio of the average headcount
(expressed in full-time equivalents/FTEs) minus employee-
initiated terminations (turnover) divided by the average
headcount, taking into account the past 12 months.
enabler efect Reduction of greenhouse gas emissions
and increase of energy savings in the entire economy through
innovative technology provided by the ICT sector.
end-to-end process Set of activities supporting defned
management, core, or support processes. Customers can use
these activities as a reference to map their own processes.
end-to-end solution Software solution that covers one
end-to-end process.
enhancement package Optional software packages that
enable companies to take advantage of innovation while
keeping their core software stable. Enhancement packages
contain improved general business and industry functionality,
enterprise services, and other user interface and functional
improvements. Organizations can activate selected business
functions contained within the enhancement packages and
deploy them on their own timetable with minimal disruption to
business operations.
enterprise mobility Term used in business and industry to
refer to the concept and approach to making a business
mobile. At SAP, we use enterprise mobility" as our umbrella
term for an overall mobile strategy.
enterprise resource planning See SAP ERP.
enterprise service A set of highly integrated Web services
that can be accessed and used repeatedly by applications to
support business processes. Used as building blocks for
composing larger units of software, enterprise services can be
quickly defned by SAP or its partners and assembled to
compose new applications and enable new business processes.
See Web service.
environmental impact A positive or negative change to
the natural environment.
G
Global Reporting Initiative (GRI) A non-proft organization
that provides companies and organizations with a comprehensive
sustainability reporting framework that is widely used around
the world.
greenhouse gas footprint The sum of all greenhouse gas
emissions measured and reported, including renewable energy
and third-party reductions, for example, ofsets.
289 Glossary
Internet of Things A fusion of the digital world and the physical
world that brings together diferent concepts and technical
components. Everyday objects and machines have sensors
that can communicate with each other over the Internet,
making new models possible for business processes, collabo-
ration, miniaturization of devices, and mobile communications.
SAP ofers several solutions that address the Internet of
Things.
ISO 14001 A standard for environmental management systems
that provides practical tools for companies and organizations to
identify and control their environmental impact and constantly
improve their environmental performance.
K
key performance indicator (KPI) Performance fgure for
which threshold values are defned and against which validation
is executed.
l
lean Set of manufacturing principles originating from
Japanese car manufacturer Toyota that frst defnes customer
value, then reorganizes every step required to design, order,
build, deliver, and maintain this value across all the organizations
and units. As a result, frms can do more with less, respond
more quickly to customer needs, create jobs that are more
rewarding for employees, and reduce their impact on
the environment.
legal change Correction to SAP software to adapt an SAP
software release to changes in legal and regulatory requirements.
line of business (LoB) Internal organizational area or
business unit in a company (division) that combines all respon-
sibilities for a particular product, group, or set of processes.
Examples include sales, purchasing, human resources, fnance,
marketing, and so on.
line-of-business (LoB) applications In the context of
computing, a set of core software applications vital to running
an enterprise, such as accounting, HR, procurement, and so on.
I
inclusivity For an organization that accepts its accountability
to those it impacts and who impact it: The participation
of stakeholders in developing and achieving a strategic and
accountable response to sustainability.
independent software vendor (ISV) Company that makes
and sells software products that run on one or more computer
hardware or operating system platforms.
industry An economic sector characterized by a value chain,
business processes, and a set of products and services that
is typical or common for all companies belonging to this
sector. At SAP, industries is also used as a term to diferentiate
between lines-of-business functions such as marketing,
procurement, and fnance, and those functions specifc to an
industry. SAP has software portfolios that address the business
needs of 25 diferent industries.
industry application Software unit supporting a specifc
collection of business processes required to address the
business needs of a specifc industry.
in-memory computing A major advance in information
technology that creates a dramatic change in computing,
analytics, and data storage. Combining advances in multicore
processing with more afordable servers, in-memory computing
allows information to be stored in the main memory rather
than in relational databases to greatly accelerate processing
times. It disrupts the traditional IT stack comprised of hard-
ware, middleware, and software, where disk-based relational
databases can become bottlenecks.
in-memory database Database that keeps all active records
in main memory rather than on disk. Accessing in-memory
records is considerably faster than retrieving them from the
disk, signifcantly increasing performance. SAP HANA is
SAPs groundbreaking database that allows businesses to take
advantage of in-memory computing. See SAP HANA.
M
mainstream maintenance First SAP maintenance phase,
which includes the full scope of support. It is followed by
an extended maintenance, customer-specifc maintenance, or
priority-one support phase.
maintenance Software support comprising support for
legal changes and corrections delivered through the SAP Notes
tool, support packages, problem support, and access to
information and online service channels depending on the
maintenance phase.
maintenance strategy Set of rules that determine the length
and conditions of maintenance for SAP software releases.
Detailed rules can difer depending on the type of application.
mobile apps Applications for mobile devices available for
download, demo, and purchase on SAP Store, App Store, and
other online stores. Mobile apps are categorized as either
business/product in focus or as consumer-focused. AT SAP,
our mobile apps are task-oriented (productivity or analytical)
or allow full access (process) to existing on-premise software.
mobile solutions Mobile solutions from SAP provide a
foundation for enterprise mobility and seamless integration
with the core enterprise applications of our customers.
Our portfolio of mobile solutions includes enterprise mobility
management, including the SAP Afaria mobile device
management solution and the SAP Mobile Documents solution;
mobile apps; and SAP Mobile Platform.
N
Net Promoter Score (NPS) Describes the willingness of
customers to recommend or promote an organization or
company to others. It is defned as the percentage of customers
that are likely to recommend an organization or company
to friends or colleagues (promoters) minus the percentage of
customers that are unlikely to do so.
the networked economy Condition in todays marketplace,
where businesses and their systems are connected to digital
communities of existing and potential partners. The move to
this new, interenterprise operating model is accelerated by
trends such as cloud computing, enterprise mobility, and the
convergence of enterprise applications and social media.
See Ariba Network.
non-proft or not-for-proft A corporation or an association
that conducts business for the beneft of the public without
shareholders and without a proft motive.
O
(carbon) ofset or greenhouse gas (GHG) ofset A unit
of carbon dioxide-equivalent (CO
2
equivalent) that is reduced,
avoided, or sequestered to compensate for emissions
occurring elsewhere.
on demand Model of software deployment whereby providers
license an application to customers for use as a service when
they need it, that is, on demand. It eliminates the need
for on-site IT resources to manage infrastructure and thereby
reduces operational expenses. Due to their software-as-a-
service nature, on-demand solutions are often available in the
cloud.
on device Anytime, anywhere access to SAP applications
and data from any type of wired or wireless device (desktop,
laptop, mobile, tablets, sensors, and so on).
on premise Traditional model of software deployment where
enterprises purchase software licenses and deploy applications
in-house.
291 Glossary
predictive analytics Brings advanced analytics capabilities
to a broad spectrum of users to help uncover new business
opportunities, predict trends, and proactively respond to
change. The recent acquisition of KXEN enables SAP to extend
predictive analytics tools beyond data scientists to line-of-
business users and analysts in the workplace by automating
key modeling and analytical tasks and enabling faster deployment
and adoption. Available in SAP Predictive Analysis software.
priority-one support An additional optional maintenance
phase ofered after expiration of mainstream maintenance for
specifc releases of the SAP BusinessObjects Business
Intelligence platform and former SAP BusinessObjects solutions
no longer actively sold or marketed.
product A non-versioned high-level view of software from
a software logistics perspective. It is a bracket that contains
corresponding software product versions.
Product Availability Matrix (PAM) Database that bundles
technical and release planning information on SAP compo-
nents for quick reference. Information on the availability of SAP
component releases and maintenance end dates, as well as
release information are available.
product footprint The environmental impact of products,
processes, or services by production, usage, and disposal.
product instance A group of technically dependent software
component versions that are part of a (software) product
version and have to be installed and operated on a single logical
system/server. The software product instances of a software
product version show the maximal distribution possibility
of the software product version. Also known as software
product instance.
product line Individual products grouped together based on
their main brand names, including all versions, technical
releases, editions, options, add-ons, delivery types, and related
tools. Example: The product line SAP Customer Relationship
Management would include SAP CRM 7.0, SAP Cloud for
Sales, SAP Cloud for Service, SAP CRM rapid-deployment
solution, the SAP Customer Insight mobile app, and so on.
One SAP An organizational approach at SAP that promotes
strong collaboration among all areas of the company across
services, software, and ecosystem, supporting one face to the
customer.
open source Software based on the concept of software
developers coming together to build a virtual community and
solving a common problem by developing working software
that everyone has a right to change. Successful development
projects under the open source model include Linux a free
operating system supported by SAP.
original equipment manufacturer (OEM) Company that
produces a product or component to be purchased for sale or
use by other manufacturers or that incorporates a purchased
product or component into its own new product for further
sale.
P
plug-in Software that enhances the functionality of an
existing application.
point of sale (POS) Generic term used in distribution to
describe all information that is recorded at the time a product
is sold. The data typically includes the location of the sale, price
point, SKU, end-user contact information, and partner contact
information. The SAP Point-of-Sale application can help retail
businesses reduce the operating costs of store systems while
delivering an enhanced customer experience.
powered by SAP HANA An SAP ofering powered by
SAP HANA runs on the SAP HANA platform. More than 100
SAP applications are currently powered by SAP HANA.
Partner solutions or applications that are powered by SAP
HANA are certifed by SAP to run on the SAP HANA platform.
These applications take advantage of distinctive capabilities
of SAP HANA to deliver key benefts, such as simpler adminis-
tration, reduced overhead, and better business intelligence
over conventional traditional technology platforms.
product version One or more software component versions
made available at the same time for implementing a
well-defned scope of functionality. The versions of a product
fulfll the principle of functional continuity. From a delivery
point of view, the version indicates the release of a product and
can either be stand-alone or add-on. Also known as software
product version.
R
Ramp-Up Knowledge Transfer SAP training program
that delivers early product-related knowledge to presales,
sales, consultants, partners, and support teams. This program
contributes to the successful implementation of ramp-up
projects and is a crucial element of the ramp-up process in the
product innovation lifecycle at SAP.
release SAP software that has a version number, is shipped
at a particular time, and has defned maintenance phases.
release-to-customer date Date that marks the initial
availability of a release to customers and the beginning of the
restricted shipment phase.
renewable energy The shares and types of electricity
obtained from renewable sources such as hydro, wind, solar,
geothermal, and biomass. It is calculated by adding the
amount of renewable energy specifcally sourced, produced
on-site by our own solar cells and covered by Renewable
Energy Certifcates (RECs).
restricted shipment phase First phase of a release delivery,
which is rolled out within the framework of the SAP Ramp-Up
program. The program determines how many customers
receive the release and increases distribution in a controlled
way. This phase is followed by the unrestricted shipment
phase.
road map Product timeline that has a variety of objectives,
including communication to customers, users, or other parties
interested in the timing of future product releases; the features
planned for those releases; general prioritization of features;
and in some cases, the requirements of features in enough
detail that current and prospective customers can give feed-
back on the feature itself and the products direction.
S
SAP ActiveEmbedded Enhanced engagement services for
optimizing solutions and accelerating adoption of technologies
without disrupting customer businesses.
SAP Active Global Support (SAP AGS) A global organization
with more than 4,000 support engineers and developers that
focuses on support oferings, helping companies manage the
application lifecycle and optimize solution performance and
consequently manage complexity, mitigate risks, and control
costs. The services are available through seven strategically
located global support centers and more than 30 local support
centers.
SAP Adaptive Server Enterprise (SAP ASE) A high-
performance relational database management system for
mission-critical, data-intensive environments. It ensures highest
operational efciency and throughput on a broad range of
platforms. Key features include data encryption to protect from
internal and external breaches, partitioning technology for
better performance and easier maintenance; and virtualization
and clustering capabilities for continuous availability and
efcient use of resources. Formerly called SAP Sybase ASE.
SAP Afaria A mobile device management solution that
provides a single administrative console to centrally manage,
secure, and deploy mobile data, applications, and devices. SAP
Afaria simplifes the management complexities of a workforce
on the go by making the data stored and transmitted by mobile
devices secure.
SAP Best Practices Packages that provide proven methods
and tools for organizations to implement best business
practices in key areas and a range of industries using SAP
software. The packages deliver methodology, documentation,
and preconfguration that enable rapid, reliable deployment
with quick return on investment.
293 Glossary
SAP Cloud for Financials A cloud-based fnancial management
solution with an intuitive, easy-to-consume interface
and personalized information. It features embedded, dynamic
analytics, enabling companies to achieve superior fnancial
insight across the business. Customers can use the solution
to drive streamlined, end-to-end compliant fnancial processes
as well as real-time fnancial performance information for
everyone in the business. It includes the solution formely called
SAP Financials OnDemand and is part of the SAP Cloud for
Finance portfolio.
SAP Cloud for Sales, SAP Cloud for Service, and SAP Cloud
for Marketing Individual people-centric, cloud-based
portfolios for sales, service, and marketing organizations with
designed-in social collaboration to help transform social
media conversations into business insight. The SAP Cloud for
Sales portfolio complements the on-premise SAP CRM
application, ofers enterprises running SAP Business Suite, a
pre-integrated cloud solution that embraces the way sales
representatives collaborate and improves their productivity,
and includes the former SAP Sales OnDemand solution.
The portfolios include the SAP Cloud for Social Engagement
solution and the solution formerly called SAP Customer
OnDemand.
SAP Cloud for Social Engagement A cloud-based solution
that helps transform social media conversations into business
insight. Marketing and customer service organizations can
use it to better engage with customers to increase brand loyalty,
manage reputational risks, and capitalize on opportunities.
Formerly called SAP Social OnDemand.
SAP Cloud powered by SAP HANA In 2013, SAP began
ofering SAP Cloud powered by SAP HANA that includes
infrastructure, platform, and software as services in the cloud,
incorporating the former SAP HANA Enterprise Cloud managed
cloud services ofering. It allows entire enterprise systems
to be run in the cloud and provides customers with a new
deployment option to gain immediate value from the innovations
of SAP HANA. This enables the operation of mission-critical
business applications as well as new applications powered by
SAP HANA.
SAP Business All-in-One Comprehensive and fexible
business management solution targeted to midsize companies
with up to 2,500 employees that are looking for a comprehen-
sive, integrated industry-specifc ERP solution with built-in
best practices.
SAP Business ByDesign Adaptable, cloud-based business
suite ideally suited for SMEs and subsidiaries of large corpora-
tions, it is a complete, integrated suite that can run a whole
enterprise fnancials, human resources, sales, procurement,
customer service, and supply chain. The latest versions enable
partners and customers to extend the system capabilities or
build cloud-based applications using SAP Business ByDesign
Studio.
SAP Business One Application designed especially for
small businesses with up to 100 employees, providing a single,
integrated solution for managing the entire business across
fnancials, sales, customer relationships, purchasing, inventory,
analytics, and operations.
SAP Business Suite Software suite that helps companies
build a comprehensive business process platform to run and
perform better. The software supports core business operations
ranging from supplier relationships to production, warehouse
management, sales, and administrative functions, through to
customer relationships. The main applications in the suite are
SAP CRM, SAP ERP, SAP PLM, SAP SRM, and SAP SCM. SAP
Business Suite, SAP CRM, and SAP ERP are now available pow-
ered by SAP HANA.
SAP Business Suite powered by SAP HANA In January
2013, SAP launched SAP Business Suite powered by SAP HANA,
a next-generation business suite that captures and analyzes
data in real time on a single in-memory platform empowering
customers to run their business in real time to transact,
analyze, and predict instantly and proactively. The core
applications in the suite now take advantage of SAP HANA for
smarter innovations, faster business processes, and simpler
interactions.
SAP Co-Innovation Lab SAP location featuring a simulated,
heterogeneous data center that incorporates hardware and
infrastructure software from various vendors. The lab provides
a hands-on environment for SAP, customers, and partners to
innovate, accelerate, and showcase new business solutions and
technologies collaboratively. Customers and partners can
visit the lab to evaluate the latest SAP and partner solutions in
a simulated, real-world infrastructure. SAP Co-Innovation Lab
locations include So Paulo, Brazil; Palo Alto, California (United
States); Tokyo, Japan; Seoul, Korea; Bangalore, India; Walldorf,
Germany; Zurich, Switzerland; Moscow, Russia.
SAP Community Network Online portal with nearly
two million members in more than 200 countries, providing
individuals with the opportunity to trade experience and
insights, pursue business opportunities, and learn from each
other. SAP ofers distinct communities in the network that
ofer information, trusted resources, and co-innovation. See
Business Process Expert community, SAP Developer
Network, and SAP University Alliances community.
SAP CRM powered by SAP HANA First SAP Business Suite
application powered by SAP HANA.
SAP Custom Development SAP organization that specializes
in building individual software solutions that address the
unique needs of customers, and that ft seamlessly with exist-
ing SAP software. The organization draws on SAP innovations,
especially SAP HANA, to deliver unmatched impact and value
for specifc customer use cases. See custom
development project.
SAP Customer Relationship Management (SAP CRM)
Application that provides comprehensive software support to
help marketing, sales, and service professionals obtain
complete customer intelligence that they can leverage to manage
customer relationships and customer-related processes
efectively. SAP CRM can enable multichannel customer inter-
actions, including mobile smartphones, the Internet, and social
media and also ofers a communications infrastructure that
is designed to help connecting with other users anytime,
anywhere. SAP ofers CRM applications in both on-premise and
on-demand deployment models.
SAP Data Management Portfolio that replaces and extends
the concept and previously named ofering of SAP Real-Time
Data Platform. It refers to the data management capabilities in
the following oferings, which are still available as individual
oferings: SAP HANA; SAP ASE; SAP IQ; SAP SQL Anywhere;
SAP ESP; SAP Replication Server; SAP PowerDesigner; SAP
Control Center, SAP PowerBuilder, and SAP Data Services.
Together, these allow users to access, store, and capitalize on
Big Data to support business decision making in real time.
SAP d-code New name for SAP TechEd conferences in 2014,
which go beyond technical education to encompass a broader
scope of topics and audience.
SAP Developer Network Part of SAP Community Network,
this online community ofers deep technical content
and expertise for SAP developers, analysts, consultants, and
administrators.
SAP EcoHub Online solution marketplace that centralizes
information about SAP and partner solutions and includes
features such as feedback, ratings, and demos to help discover,
evaluate, and buy solutions to complement an investment in
SAP software.
SAP Education An organization with more than 1,000
resources on global scale that provides a complete and
high-quality enablement ofering across the entire customer
life cycle for all target audiences (business users, project teams,
customers, partners, and so on). The comprehensive portfolio
of educational products and services leverages a multimodal
ofering (on-site, e-learning, and virtual classrooms) to accelerate
enablement and reduce cost and certifcations paths to help
ensure enablement quality.
295 Glossary
SAP Executive Board The ofcial governing body of SAP,
overseeing and deciding on the activities of the company.
Subject to the requirements of stock corporation law, the SAP
Executive Board is committed to the interests of SAP and
bound by company policy. It provides the SAP Supervisory
Board with regular, prompt, and comprehensive reports about
all essential issues of business, corporate strategy, and
potential risks. Membership in the SAP Executive Board is part
of the ofcial titles for these board members.
SAP Financing Service that helps companies invest in SAP
solutions implemented by a strategic partner of SAP: Siemens
Financial Services GmbH (SFS). SFS targets the fnancing
service chiefy at midsize companies. Depending on local
conditions, the SFS plan leases solutions to customers and
provides loan fnance.
SAP for Aerospace & Defense (SAP for A&D) Solution port-
folio specifcally designed to meet the needs of the aerospace
and defense industry. It ofers capabilities for maintenance,
repair and overhaul, airline operations, defense, manufacturing,
contract and program management, and business acquisitions.
SAP for Automotive Solution portfolio designed to meet the
specifc needs of the automotive industry. Its capabilities help
link complex business processes into a logical fow, maximizing
efciency and proftability and satisfying customers expectations.
SAP for Banking Solution portfolio that enables banks
to obtain all customer information at a glance and ofers a full
complement of high-performance capabilities for strategic
planning, fnancial accounting, costing, and enterprise-wide
control. It also features key industry-specifc applications
for proftability management, risk management, customer
relationship management, and integrated customer account
systems.
SAP for Chemicals Solution portfolio that delivers support
for specifc processes and tools that chemical companies
require. Industry-specifc capabilities include recipe manage-
ment, batch management, and version control.
SAP Enterprise Support Services that provide proactive
support in addition to all features of SAP Standard Support
services. These proactive support services encompass tools,
processes, and services that enable continuous improvement,
holistic application lifecycle management for continuous
innovation, business and operational process improvements,
and levers to address the total cost of operation (TCO).
SAP Environment, Health & Safety Management (SAP EHS
Management) An application that supports sustainability
initiatives enabling companies to manage EHS operational,
fnancial, and reporting risks holistically across their facilities
and extended business network. As an integral part of SAP
Business Suite, the application systematically embeds EHS
requirements and tasks directly into enterprise business
processes, reinforcing compliance and risk reduction across
global operations.
SAP ERP Application designed to optimize business and IT
processes by reducing IT complexity, increasing adaptability,
and delivering more IT value at a lower cost than traditional
ERP solutions. It can support mission-critical, end-to-end
business processes for fnance, human capital management,
asset management, sales, procurement, and other essential
corporate functions. SAP ERP can also support industry-
specifc processes by providing industry-specifc business
functions that can be activated selectively via the switch
framework, keeping the application core stable and helping
ensure maximum performance.
SAP ERP powered by SAP HANA The second SAP Business
Suite application powered by SAP HANA.
SAP for Consumer Products Solution portfolio that
supports the integration of every step of the consumer product
value chain from suppliers to consumers. Key capabilities
include mobile and Internet sales, trade promotion management,
inventory management, brand and channel management, and
demand signal management.
SAP for Defense & Security Solution portfolio that ofers
a variety of capabilities that meet the critical needs of the
defense and security sector. Key industry-specifc capabilities
include acquisition and materials management; force planning;
maintenance, repair, and overhaul (MRO); personnel and orga-
nization; infrastructure management; planning and support for
deployed operations; in-service support; and line maintenance.
SAP for Engineering, Construction & Operations (SAP
for EC&O) Solution portfolio designed to meet the specifc
requirements of project-oriented enterprises that ofers
capabilities for industrial plant construction, construction of
commercial and private buildings, and shipbuilding.
SAP for Healthcare Solution portfolio for hospitals and
clinics to manage a variety of required administrative and
clinical processes.
SAP for High Tech Solution portfolio that meets the
demands of high-tech industries, including RosettaNet
support.
SAP for Higher Education and Research (SAP for HE&R)
Solution portfolio that supports organizational processes and
unique needs of public and private universities, multicampus
institutions, research agencies, and medical colleges, including
campus management, grants management, student life-cycle
management, fnancials, operations, human capital management,
procurement, analytics, research, and asset management.
SAP for Industrial Machinery & Components (SAP for IM&C)
Solution portfolio that coordinates the entire scope of
business activities (estimating, order entry, project management,
and production planning) for the industrial sector and supports
areas ranging from maintenance and services to billing and
proftability analysis.
SAP for Insurance Solution portfolio that integrates steps
in the insurance business process, including capabilities for
customer contact, policy and product management, collections
and disbursement, and claims management.
SAP for Life Sciences Solution portfolio that meets the
requirements of pharmaceutical, biotechnology, and
diagnostics companies, as well as manufacturers of medical
devices and products.
SAP for Media Solution portfolio that supports processes
specifc to the media industry with capabilities that include
sales and distribution, advertising management, product
development, and intellectual property management.
SAP for Mill Products Solution portfolio for manufacturers
of building materials, the paper and timber industry,
metal and primary metal producers, and textile and furniture
manufacturers.
SAP for Mining Solution portfolio that supports processes
specifc to the mining industry, including mining operations
and asset performance; sales and supply chain management;
operational risk and compliance; as well as human resources;
fnance; procurement; and IT management.
SAP for Oil & Gas (SAP for O&G) Solution portfolio that
meets the demands of oil and gas companies of all sizes.
SAP for Professional Services Solution portfolio that
delivers integrated tools, best practices, and support for
automated processes designed specifcally for the demands
of the professional services industry, including management
consultancies as well as accounting and legal frms.
297 Glossary
SAP Global Managing Board The SAP Global Managing
Board was established in May 2012 in addition to the SAP
Executive Board and allows SAP to appoint a broader range of
global leaders to help steer the organization. It comprises
members of the SAP Executive Board and selected additional
executives, and has advisory and decision-supporting functions
for the SAP Executive Board. Per defnition, all members of the
SAP Executive Board are members of the SAP Global Managing
Board.
SAP Global Research and Business Incubation Research
and innovation unit integrated into the Products & Innovation
organization at SAP in April 2013. The new decentralized
structure combines the strengths of research and development
to beneft new products (including SAP HANA) and strategic
topics (such as mobile and business intelligence). A team
manages the project governance of publicly funded projects
as well as handling ecosystems, communications, and
relationship management with stakeholders from academia
and governments.
SAP HANA Flexible, data-agnostic, in-memory platform that
helps organizations analyze their business operations, using
huge volumes of detailed transactional and analytic information
from virtually any data source. The platform provides the
foundation for innovative applications that take advantage
of an in-memory database and calculation engine, allowing
customers to conduct complex planning, forecasting, and
simulation based on real-time data.
SAP HANA Cloud Platform Development platform-
as-a- service (PaaS) designed to help customers, independent
software vendors, and partners rapidly create innovative
enterprise software applications in the cloud leveraging our
leading in-memory technology.
SAP for Public Sector Solution portfolio for public
administration, providing an electronic framework that enables
online communication through various applications for
the public, government authorities, and related entities.
SAP for Retail Solution portfolio that ofers multichannel
applications designed specifcally to provide the best retail
services to a large customer base.
SAP for Sports & Entertainment Solution portfolio that
comprises solutions for sports teams, leagues, and venues,
designed to help them deepen fan engagement, drive on-feld
performance, and optimize business efciency.
SAP for Telecommunications Solution portfolio that
provides telecommunications enterprises of all types and sizes
a range of industry-specifc capabilities, including support
for convergent invoicing and contract accounting.
SAP for Transportation & Logistics Solution portfolio that
covers the unique business needs of postal services, railways,
airlines, and toll collection companies, as well as logistics
service providers, to optimize supply chain and planning.
SAP for Utilities Solution portfolio for all supply and energy
industries, with capabilities ranging from call centers and
Internet communications to consumption billing.
SAP for Wholesale Distribution Solution portfolio that
addresses the needs of midsize and large wholesale distribution
businesses in a wide range of segments. Industry-specifc
capabilities support new business models and strategies that
meet the needs of an important supply sector.
SAP Ganges Name of a solution evolving from an SAP
project that focused on improving the IT infrastructure of
micro-businesses (small, usually family-owned shop selling
groceries and other sundries). Solution includes software
for POS devices as well as services provided to retailers,
distributors, wholesalers, and manufacturers. The services
also include providing banks with reporting that supplements
credit worthiness for retailers. Solution is currently only
available for the Indian market.
SAP HANA Enterprise Cloud See SAP Cloud powered by
SAP HANA.
SAP HANA Live Umbrella term for a group of analytics
foundations for SAP HANA, specifc to an industry or for a
particular software (SAP HANA Live for Event Management,
SAP HANA Live for SAP CRM), and so on, as well as a browser
(SAP HANA Live Browser).
SAP HANA One Deployment of SAP HANA certifed for
productive use on the Amazon Web Services Cloud. SAP HANA
One can be deployed for production use with small data sets,
in minutes, opening a door to starter projects from customers,
ISVs, and startups.
SAP IQ An analytics server designed specifcally for
advanced analytics, data warehousing, and business intelligence
environments. Able to work with massive volumes of structured
and unstructured data, it is ideally suited to take advantage
of Big Data opportunities by discovering more accurate insight
into business performance and market dynamics. Formerly
called SAP Sybase IQ.
SAP Jam Social software platform that includes the former
SuccessFactors Jam, SAP StreamWork, and new software.
It enables sales teams and internal experts to socially connect
and communicate with customers in the context of each
opportunity. Customers can also easily provide feedback and
share what is important to them to strengthen relationships.
SAP Learning Solution Portfolio of learning tools including
a learning portal, learning management system, authoring
tools, and content management system. Individual training and
strategic personnel development are supported in the solution.
SAP Lumira Data visualization software that helps
connect, access, and visualize data without a single line of
code. Formerly called SAP Visual Intelligence.
SAP Managed Services Organization and oferings that
enable SAP customers to access SAP applications and
that provide the infrastructure required. In this way, solutions
are ready to use and can be adapted to customers growing
requirements.
SAP Manufacturing Solution for managing manufacturing
operations with embedded lean manufacturing and Six Sigma
principles. It provides capabilities for planning, execution,
quality, maintenance, as well as environment, health, and safety.
SAP MaxAttention Support option with a full range of
services customized for individual customer needs and
covering all stages of an SAP solutions lifecycle, driven by an
on-site technical quality manager.
SAP Mobile Overarching category term used to communicate
all SAP mobile oferings together. These include any type of
mobile apps, solutions, technology, or platform (including
SAP Mobile Platform), as well as solutions extensions and
rapid-deployment solutions and any Sybase-related products.
SAP Mobile Platform A platform of mobile capabilities and
technology that bundles three existing oferings under one
name (Sybase Unwired Platform, Sybase Mobiliser, and a Syclo
ofering named Agentry). SAP Mobile Platform is ofered in
enterprise or consumer editions and each edition is available
as either an on-premise or a cloud version.
SAP Month of Service Held in October, SAPs signature
corporate volunteerism efort ofers SAP employees around
the world opportunities to come together to support social
change in their communities.
SAP NetWeaver A comprehensive technology stack
designed to efciently develop, run, and extend business
applications. SAP NetWeaver provides foundation and enterprise
software, including the SAP NetWeaver Business Warehouse
application, and the SAP NetWeaver Application Server, SAP
NetWeaver Portal, and SAP NetWeaver Process Orchestration
components. It facilitates the easy integration of SAP software
with heterogeneous system environments, third-party
solutions, and external business partners. See technology
platform.
299 Glossary
SAP NetWeaver Master Data Management (SAP NetWeaver
MDM) Component of SAP NetWeaver that ensures
cross-system data consistency across disparate systems and
helps integrate business processes providing a single version
of master data for supplier, product, customer, or user-defned
data objects in heterogeneous environments.
SAP NetWeaver Mobile Component of SAP NetWeaver that
helps IT organizations extend applications, data, and process
to mobile workers that are not always connected to the company
network. It includes over-the-air device management, application
design tools, and synchronization middleware that allow
occasionally connected mobile devices to inter-operate as part
of a company's business processes.
SAP NetWeaver Portal Component of SAP NetWeaver that
ofers a complete portal infrastructure and high-performance
functions for knowledge management and collaboration
between enterprises. The portal is based on open standards
and Web services and is tightly linked with other SAP NetWeaver
components, so it also supports heterogeneous IT landscapes
and is compatible with Java, J2EE, and Microsoft.NET.
SAP NetWeaver Process Integration (SAP NetWeaver PI)
Component of SAP NetWeaver that enables diferent versions
of SAP and non-SAP systems from diferent vendors running
on diferent platforms (for example, Java ABAP and so on)
to communicate with each other. Includes all capabilities
previously covered by SAP NetWeaver Exchange Infrastructure
to realize cross-system business processes.
SAP NetWeaver Visual Composer Design tool that facilitates
the creation of SAP NetWeaver Portal content using a visual
user interface, rather than written code.
SAP Notes Tool that provides instructions on how to remove
known errors from SAP software, including a description of the
symptoms, cause, and location of the errors.
SAP NetWeaver Adaptive Computing Controller Tool based
on the J2EE engine of SAP NetWeaver Application Server
that enables users to control the entire landscape from a single
point. Administrators can monitor the runtime data of logical
and physical landscapes; start, stop, or relocate application
services; and assign hardware resources to application
services.
SAP NetWeaver Application Server (SAP NetWeaver AS)
Component of SAP NetWeaver that provides support for
platform-independent Web services, business applications, and
standards-based development based upon key technologies
such as Java and ABAP technology.
SAP NetWeaver Business Intelligence See SAP NetWeaver
Business Warehouse.
SAP NetWeaver Business Warehouse (SAP NetWeaver BW)
Application of SAP NetWeaver that provides a complete view
of a company and the tools needed to make the right decisions,
optimize processes, and measure strategic success, such as
business-critical factors and benchmarks. Formerly called SAP
NetWeaver Business Intelligence.
SAP NetWeaver Developer Studio Tool based on the open
source Eclipse framework that supports the efcient develop-
ment of Web Dynpro, Web services, and Java/J2EE business
applications, as well as Java projects on a large-scale basis for
both SAP technologies and standard technologies.
SAP NetWeaver Gateway A technology framework enabling
exposure and simplifed access to SAP software from any
device or environment using standard, open protocols. It opens
data and processes running on SAP applications for software
developers to create apps in diferent environments and devices
to engage many more business consumers.
SAP PartnerEdge Global, partner-to-partner business
collaboration network where SAP partners can share expertise,
development capabilities, solutions, and knowledge to extend
their market reach. In late 2012, SAPs extranet for partners,
SAP Channel Partner Portal, merged with SAP PartnerEdge.
The combined site, available at www.sappartneredge.com now
gives partners access to information, product and business
news, tools, training, and business resources to order products.
Partners can also manage their relationship with SAP and
collaborate with other SAP partners through SAP PartnerEdge.
SAPPHIRE NOW SAPs signature business technology event
and the largest SAP customer-driven conference is held annually
in several locations around the globe. The global event in
the United States is co-located with the Americas SAP Users
Group (ASUG) annual conference. Attendees discover new
initiatives, solutions, products, and services, as well as unique
access to the latest business strategies and industry best
practices from SAP customers, partners, executives, and indus-
try experts to help them drive business results across all levels.
SAP Premier Customer Network Exclusive SAP community
of top industry leaders representing some of the worlds largest
and best-run businesses. For these premier customers, SAP
aims to simplify and tailor the partnership toward the unique
needs of each customer by proactively assembling the best
talent and synchronization across all SAP lines of business
(product development, sales, services, support, and market-
ing) globally.
SAP Product Lifecycle Management (SAP PLM)
Application that helps companies manage, track, and control
all product-related information over the complete product and
asset lifecycle as well as throughout the extended supply chain.
SAP PLM is designed to facilitate creativity and to free the
process of product innovation from organizational constraints.
SAP Real-Time Data Platform See SAP Data Management.
SAP Ramp-Up Program SAP uses to introduce new
application releases on the market to selected customers
during the restricted shipment phase.
SAP Rapid Deployment solutions Packages of preconfgured
software and predefned services with content including best
practices, templates, tools, and business user enablement with
predetermined scope, time, and costs. Because the solutions
are installed quickly, customers can beneft from crucial
software functionality within as little as 12 weeks, helping lower
the total cost of implementation and giving customers
immediate and tangible value.
SAP Replication Server Software that moves and synchro-
nizes data in real time, allowing companies to gain better
use of application data and to create reports without afecting
operational systems. Administrators can set up redundant
disaster recovery sites and distribute, consolidate, and
synchronize data across multiple platforms. Formerly called
SAP Sybase Replication Server.
SAP River An integrated development environment and
programming language that allows rapid development of
business applications to run on SAP HANA.
SAP road maps Available for industries, lines of business,
and technology, SAP road maps highlight the SAP solutions
available today, planned innovation, and the SAP vision for
the future.
SAP Safeguarding Project-based support option that
helps customers manage risks and enable the technical
robustness of SAP solutions during implementation, upgrade,
and operations.
301 Glossary
SAP Solution Manager Application management solution
that enables customers to manage their SAP and non-SAP
applications better. With SAP Solution Manager, customers can
centralize, enhance, automate, and improve the management
of their entire system landscape, thus reducing total cost of
ownership. The solution includes features such as diagnostics,
testing, root cause analysis, and solution monitoring.
SAP solutions for enterprise performance management
(EPM) Software that helps companies improve performance,
organizational agility, and decision making. SAP solutions
for EPM include SAP Business Planning and Consolidation,
SAP Proftability and Cost Management, SAP Financial
Consolidation, and SAP Disclosure Management applications.
SAP solutions for governance, risk, and compliance (GRC)
Applications that provide organizations with a real-time
approach to managing GRC across heterogeneous environments.
SAP solutions for GRC include the SAP Risk Management,
SAP Access Control, and SAP Global Trade Services applications
as well as the SAP Sustainability Performance Management
analytic application, among others.
SAP solutions for small businesses and midsize companies
SAP Business All-in-One solution, SAP Business One application,
and SAP BusinessObjects Edge solutions that combine
business management and business intelligence software for
small businesses and midsize companies. As with large enter-
prises, these frms seek to streamline business processes,
cut costs, drive growth, and increase proftability by receiving
the right information at the right time across all operations.
SAP solutions for sustainability Sustainability software
includes the measurement of sustainability key performance
indicators; energy and carbon management; and environment,
health, and safety. SAP solutions for sustainability help
organi zations tackle energy consumption and greenhouse
gas emissions, as well as support eforts in product safety,
healthcare, and sustainability performance management.
SAP Service Marketplace Extranet platform that ofers
capabilities for collaboration between SAP, customers, and
partners. The extranet provides central access and guided
navigation to SAPs complete product listing with support,
maintenance, and upgrade information.
SAP Services A portfolio of services that helps customers
derive value from their SAP solutions in a fast, cost-efective,
and predictable way. The portfolio comprises three categories
of services: High value (people-centric oferings in areas such
as business transformation, industry-specifc (for example,
banking), and architecture-focused projects), innovation
services (help lead the market adoption of SAP innovations
such as SAP HANA, mobility, and cloud oferings); and
engineered services (assembled to order to provide faster time
to value and lower TCO with greater predictability, including
rapid-deployment solutions).
SAP SMS 365 Interoperability services that simplify the
deployment and delivery of inter-operator messaging over
incompatible networks, protocol stacks, and handsets among
mobile operators worldwide. Messages are delivered through
a secure operator-grade messaging platform, with advanced
protocol conversion, routing, queuing, and transcoding
capa bilities.
SAP Solidarity Fund The SAP Solidarity Fund e.V. was set up
by SAP employees as an immediate response to the September
11, 2001, attacks. The goal of this charitable association was
to help people as a result of a natural disaster, for example
quickly and with minimum bureaucracy. The activities of the
SAP Solidarity Fund are made possible mainly through contri-
butions from SAP employees and people associated with SAP.
Since its foundation, the SAP Solidarity Fund has managed to
make more than 2 million available for various projects.
SAP Solution Explorer A customer-facing self-service
tool that helps users fnd the business management software
solutions they need from SAP to operate proftably, adapt
continuously, and grow sustainably. Content includes value
maps and executive summaries for all SAP-supported lines
of businesses, industries, technology, and selected topics.
SAP SQL Anywhere A mobile, embedded, and cloud-enabled
fully relational database that is embedded in more than
10 million installations worldwide, from laptops to tablets to
smartphones. Formerly called SAP Sybase SQL Anywhere.
SAP Standard Support Support option ofering a reliable
response to technical disruptions and for maintaining system
health and integrity. This basic support ofering features including
updates, problem resolution, knowledge transfer, quality
management, and more to keep IT landscapes up-to-date and
stable.
SAP Startup Focus Program that ofers a variety of
resources for young companies including technology, training,
technical advice and valuable go-to-market support. It serves
as a development and growth accelerator that provides an
integrated approach for startups to innovate on the SAP HANA
platform.
SAP StreamWork See SAP Jam.
SAP Supplier Relationship Management (SAP SRM)
Procurement application that helps organizations in all
industries improve their centralized sourcing and contract
management and interact with suppliers through multiple
channels. SAP SRM is designed to accelerate and optimize the
entire end-to-end procure-to-pay process by supporting
integrated processes and by enforcing contract compliance,
which can result in realizable savings.
SAP Supply Chain Management (SAP SCM) Application
that helps companies adapt their supply-chain processes to
a rapidly changing competitive environment. SAP SCM helps
transform traditional supply chains from linear, sequential
processes into open, confgurable, responsive supply networks
in which customer-centric, demand-driven companies can
monitor and respond more smartly and quickly to demand and
supply dynamics across a globally distributed environment.
SAP University Alliances Program that introduces students
to the exciting technologies shaping business today, and
designed to connect students around the world interested in
SAP solutions, careers, and research opportunities. Students
participate in classroom sessions, app development, networking
opportunities, events, and more.
SAP University Alliances community Part of SAP Community
Network, this online community provides connections between
university leaders and students, SAP customers and partners,
and SAP internal experts. Professors and lecturers gain access
to up-to-date SAP-related business and IT course materials,
resources, and peer-to-peer contact with many renowned
experts.
SAP User Group Executive Network (SUGEN) In 2007,
SAP initiated a program that encouraged all SAP user groups
to share their expertise and recommended practices with the
wider user-group community. It kindled some valuable discus-
sion, which, in the end, is good for all SAP stakeholders. An
umbrella organization, SUGEN embraces 12 national SAP user
groups with the shared aim of defning priorities and agreeing
on plans of action to bring greater focus to the dialog between
SAP and its user groups on the global plane.
SAP Ventures An independent venture frm spun of
from SAP, providing the agility of a start-up while allowing
com panies to tap into SAPs global enterprise ecosystem of
customers and partners. The frm partners with outstanding
entrepreneurs and venture frms worldwide to build
industry-leading businesses.
SAP Web Channel Experience Management An application
that SAP developed to address companies needs to deliver
an integrated and consistent customer experience over the
Internet. The software allows organizations to deploy state-of-
the- art Web shops, fully integrated with their back-end order
management and inventory systems. This next generation
e-commerce solution also brings together e-marketing, sales,
online self-service, and social customer conversations on
a single platform to provide a one-stop, synchronized Web
customer experience. Formerly SAP Sybase PowerBuilder.
303 Glossary
solution extensions Developed by independent partners,
solution extensions integrate easily with SAP software, ofering
customers cross-solution and cross-industry functions that
complement SAP software. These select third-party oferings
are branded with SAP, and sold and supported by SAP and
partners.
solution portfolio Collection of general-purpose and industry-
specifc applications, services such as consulting, and
support for industry best practices. SAP ofers solution portfolios
that serve the needs of organizations in more than 25 major
industries. Customers choose from among the oferings to
assemble or build their SAP solutions to meet their requirements.
Each ofering in the portfolio is priced and available for
individual purchase.
specifcation Document that details the business and
functional requirements of a particular product or project.
stakeholder Individual or group the corporation is responsible
to because they are afected by or can afect the companys
business. Besides the traditional stockholder, SAPs stake-
holders include, for example, employees, customers, partners,
suppliers, analysts, and society.
stand-alone release SAP application release that can be
deployed independently of other application releases.
standard-related custom development project (SCDP)
Customer-specifc development with a contractually binding
commitment for at least a partial retroft.
SuccessFactors Compensation As part of SuccessFactors
HCM Suite, this solution helps companies create a more
simplifed compensation plan management with more accurate
budgeting and reduced risk. With performance data is
calibrated across the company to ensure fairness and
employee retention, insight for total employee compensation
analysis and assurance that budgets are used wisely,
companies can retain top performers. Risk can be signifcantly
reduced with improved audit compliance.
Scope 1 (emissions) Direct greenhouse gas emissions
from sources that are owned or controlled by the reporting
company, for example, fuel burned in corporate cars.
Scope 2 (emissions) Indirect greenhouse gas emissions
from consumption of purchased electricity, heat, or steam.
Scope 3 (emissions) Indirect emissions that are a
consequence of the activities of the reporting company, but
occur from sources owned or controlled by another company,
such as business fights.
software and software-related services (SSRS) SAP reports
revenues in software and software-related services (SSRS),
which encompasses software, support, subscription, and other
software-related service revenue.
software as a service (SaaS) Software that is provided
literally as a service. Software applications are delivered and
managed remotely over a secure Internet connection and a
standard Web browser. Access is charged on a subscription
basis at a fxed price per user, usually on a monthly basis, and
users only pay for applications they actually use. See cloud
computing.
solution SAP solutions enable a customer to meet a
challenge or take advantage of an opportunity and are built or
assembled by fexibly combining SAP applications and other
SAP software. The solutions may include support for best
business practices and be aided by consulting and ongoing
support. They may also be enhanced or extended by SAP
partner applications and services. Organizations can deploy
SAP solutions to perform industry-specifc business processes
and to address their business issues in the way that best
meets their needs.
solution area A group of solutions that support a specifc
subprocess of a companys end-to-end process.
SuccessFactors Workforce Analytics As part of
SuccessFactors HCM Suite, this solution helps companies
get the insights they need to make strategic workforce
decisions by fnding answers to key questions about workforce
challenges and how to solve them.
support package Bundle of software corrections compiled
periodically and available for ABAP or Java programming
languages.
support release Release ofered after the beginning of
the unrestricted shipment phase if required that contains
a collection of all previously available support packages.
sustainability For SAP, sustainability is the ability to manage
economic, social, and environmental risks and opportunities
holistically for increased proftability. It contributes to our
vision to help the world run better and improve peoples lives.
SAP is committed to fully integrating sustainability into our
strategy and business model and in this way the company
pursues a corporate strategy that is sustainable rather than a
stand-alone sustainability strategy. See SAP solutions for
sustainability.
Sybase SAP acquired Sybase in late 2010, broadening the
SAP portfolio for enterprise mobility, introducing a complete
mobile platform and mobile solutions that enable customer
access to data stored in SAP software and systems from
anywhere and from any device.
Syclo Acquired by SAP in 2012, Syclo is a leading provider
of enterprise mobile applications and technologies. The Syclo
family of mobile apps extend SAP ERP and SAP CRM for
mission-critical work on the go and out in the feld. They ofer
a quick, fexible, reliable path to mobilizing asset management,
feld service, inventory/warehouse, and sales, regardless of
language, user type, device selection, or connectivity.
SuccessFactors Employee Central The foundation of the
SuccessFactors HCM Suite of solutions, Employee Central is a
next-generation core HR software delivered securely as a
service from the SuccessFactors cloud. It ofers one global
system of record, complete workforce overview combining HR
and talent data, powerful analytics, and social collaboration
fne-tuned to meet local needs. It is currently available in
10 countries. An additional ofering specifcally for payroll was
launched in 2013 called SAP SuccessFactors Employee Central
Payroll.
SuccessFactors HCM Suite Suite of HR solutions for talent
management, core HR, collaboration, and workforce analytics.
The cloud-based suite provides solutions to bridge the gap
between strategy and execution with tools to hire, reward, and
develop the right people with the right skills to grow a business
sustainably. Formerly called SuccessFactors Business Execution
Suite (SuccessFactors BizX Suite).
SuccessFactors Learning As an integrated part of
SuccessFactors HCM Suite, this solution helps companies
transform how a workforce learns by combining formal, social,
and extended learning with content management, reporting,
and analytics, available from an ofce or on a mobile device.
SuccessFactors Professional Edition A cloud-based solution
that addresses, and is tailored to, the performance and talent
management essentials small businesses and midsize companies
require. Applications include employee profle, performance
management, goal management, 360-degree review, and the
SAP Jam social collaboration platform.
305 Glossary
system integrator (SI) Company focused on integrating
IT systems and providing related consulting. This is a classic
channel used by large software vendors, large hardware
vendors, and original equipment manufacturers.
T
technology platform The technical foundation for a business-
driven software architecture that increases the adaptability,
fexibility, openness, and cost-efciency of IT operations and
enables organizations to become more agile in responding to
change. See SAP NetWeaver.
total energy consumed The sum of all energy consumed
through SAPs own operations, including energy from renew-
able sources.
u
United Nations Global Compact (UN Global Compact)
A policy initiative for businesses that are committed to aligning
their operations and strategies with ten universally accepted
principles in the areas of human rights, labor standards,
environment, and anti-corruption.
unrestricted shipment phase Second phase of release
delivery, during which all customers can obtain the release. The
phase follows the restricted shipment phase.
upgrade Replacement of an existing application component
with a newer component of that same application.
V
value-added reseller (VAR) Partner that receives the majority
of its revenue from reselling a vendors hardware or software
solutions directly to end users. Additionally, VARs often provide
consulting, implementation, postsales support, and training
to their own customers. VARs may develop and sell add-on
appli cations to meet the needs of vertical markets and may
expand SAP product functionality.
value map A structural view of SAP solutions organized
according to industry, business responsibility, and technology
area.
vertical solution A specialized application designed to meet
the unique needs of a particular business or industry.
visual enterprise Ability to visually communicate parts of
the business helps maximize productivity, improve process
efciency and quality, and reduce cost and cycle time. Solutions
that support the visual enterprise unify and synchronize
product information from multiple systems and deliver it in
role-specifc and workfow-controlled processes to people. The
SAP 3-D Visual Enterprise applications, resulting from the
RightHemisphere acquisition, enrich SAP Business Suite soft-
ware with new 3-D visualization features that integrate business
data, which will support new standards to increase speed,
enhance productivity, and improve quality across the entire
value chain.
virtualization The decoupling of physical and logical
computer resources. This approach can be implemented on
diferent levels such as network, storage, central processing
unit, server, and application.
W
Web service Describes a set of technical functionality using
Web Services Description Language (WSDL), enabling
inter operable machine-to-machine interaction over a network.
Typically, Web services are simply Web application programming
interfaces (APIs) that can be accessed and executed by a
consuming application.
women in management Phrase used to refer to the
percentage of women in management positions (managing
teams, managing managers, executive boards) as compared
to the total number of managers, expressed by the number of
individuals and not full-time equivalents (FTEs).
works council As dictated by the German Works Council
Constitution Act, a works council is a legal body for representing
employees interests to the employer and codetermining
the works in private companies. On June 21, 2006, the SAP AG
employees working in Germany elected its frst works council.
A European works council was created in the spring of 2012.
307 Glossary
Addresses
For more information about the matters discussed in this
report, contact:
Investor Relations
Tel. +49 6227 76 73 36
Fax +49 6227 74 08 05
E-mail [email protected]
Internet www.sap.com/investor
Press
Tel. +49 6227 74 63 15
Fax +49 6227 74 63 31
Internet www.sap.com/press
GrOup hEADquArtErS
SAp AG
Dietmar-Hopp-Allee 16
69190 Walldorf
Germany
Tel. +49 6227 74 74 74
Fax +49 6227 75 75 75
Internet www.sap.com
The addresses of all our international subsidiaries
and sales partners are available on our public Web site
at www.sap.com/directory/main.html.
The SAP Integrated Report is available online only at
www.sapintegratedreport.com in English, or in German at
www.sapintegratedreport.de.
The following publications are available in English at
www.sap.com/investor, or in German at www.sap.de/investor,
as indicated below:
SAP Group Annual Report (IFRS, in English and German)
Annual Report on Form 20-F (IFRS, in English)
SAP AG Statutory Financial Statements and Review of
Operations (HGB, in German)
Interim Reports (in English and German)
SAP INVESTOR, SAPs quarterly shareholder magazine
(online at www.sap-investor.com, in English and German)
You can also read SAPs annual and interim reports on an iPad.
The free and interactive app Publications is now available in the
App Store.
Complete information on the governance of SAP is available at
www.sap.com/corpgovernance. Materials include:
Information about the management of the company,
including the directors on the governing bodies
Details of the directors dealings in SAP shares
Shareholder meeting papers and ballot results
Articles of Incorporation
German Code of Corporate Governance
Declaration of Implementation pursuant to the
German Stock Corporation Act, Section 161
Code of Business Conduct for Employees
Corporate Governance Statement pursuant to the
German Commercial Code, Section 289a
Additional SAP policies are made public at
www.sap.com/corporate-en/sustainability:
SAP Environmental Policy
SAP Human Rights Commitment
SAP Global Health and Safety Management Policy
SAP Supplier Code of Conduct
SAP Partner Code of Conduct
309 309 Financial and Sustainability Publications
2015
January 21
Preliminary results for fscal year 2014
May 20
Annual General Meeting of Shareholders
Mannheim, Germany
May 21
Dividend payment
2014
March 21
Publication of SAP Integrated Report
April 17
Results for the frst quarter of 2014
May 21
Annual General Meeting of Shareholders
Mannheim, Germany
May 22
Dividend payment
July 17
Results for the second quarter of 2014
October 20
Results for the third quarter of 2014
Financial Calendar
310 310 Additional Information
trADEmArkS
2014 SAP AG or an SAP afliate company. All rights reserved.
No part of this publication may be reproduced or transmitted
in any form or for any purpose without the express permission
of SAP AG or an SAP afliate company.
SAP and other SAP products and services mentioned herein as
well as their respective logos are trademarks or registered trade-
marks of SAP AG (or an SAP afliate company) in Germany and
other countries. Please see www.sap.com/corporate-en/legal/
copyright for additional trademark information and notices.
publIShEr
SAP AG
Investor Relations
COnCEpt AnD rEAlIZAtIOn
Kuhn, Kammann & Kuhn GmbH, Cologne, Germany
phOtOGrAphy GlObAl mAnAGInG bOArD
AnD COVEr
Andreas Pohlmann, Munich, Germany
PRINTING
ABC Druck, Heidelberg, Germany
COpyrIGht
2014 SAP AG
69190 Walldorf
Germany
Publication Details
carbon neutral
natureOffice.com | DE-135-899979
print production
311 Publication Details
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www.sap.com www.sap.com/investor
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