CONTENTS - Capgemini

At December 31, 2006, commitments relating to non-cancelable
leases were mainly given in the United Kingdom (€149 million),
Benelux (€146 million), France (€140 million), Germany and
Central Europe (€122 million) and North America (€105 million).
Lease payments recognized in the income statement during the
year totaled €229 million.
The year-on-year decrease in commitments under computer equipment
leases reflects the expiry of a certain number of contracts in
2006, notably in the United Kingdom and France.
Office lease terms depend on the geographic area and vary between
five and twenty-five years. Vehicle leases are short-term contracts
of three to five years. The year-on-year change in 2006 in commitments
under non-cancelable office leases essentially reflects the
streamlining of the Group’s real estate assets.
Commitments given on suppliers contracts primarily represent
purchase orders to be issued under global purchase contracts.
Other commitments given relate mainly to:
– bank guarantees given to the tax authorities in connection with
tax disputes in France and Spain;
– commitments relating to employees in the Netherlands and
Sweden.
B) Commitments given and received on minority
interests
On April 12, 2005, the Group entered into an alliance with the
Japanese group NTT Data Corporation to sell 95% of its stake in
Capgemini Japan K.K. for €30 million. The sale agreement granted
a put option to the Capgemini Group on its residual 5% interest in
Zacatii Consulting Inc. (formerly Capgemini Japan K.K.) and a call
option to NTT Data Corporation in relation to the same shares. These
options are exercisable for a period of two years as from July 14, 2008
at the higher of the market value of the shares at the exercise date
NOTE 26 – SEGMENT INFORMATION
I. SEGMENT REPORTING BY GEOGRAPHIC AREA
The Group has operations in the following eight geographic areas:
and the valuation of the shares as determined based on the initial
transaction cost (i.e., €1 million for the residual 5% stake in Zacatii
Consulting Inc. at December 31, 2006).
C) Commitments given on clients’ contracts
For various large contracts signed by Group entities, the Group has
provided performance and/or financial guarantees, in particular
concerning the “Aspire” contract signed with the UK Inland Revenue
on January 5, 2004 for an estimated amount of £3 billion, the TXU
contract signed on May 17, 2004 for USD 3.5 billion, the Schneider
Electric Industries SAS contract signed on October 28, 2004 for
€1.6 billion, Metropolitan Police for £350 million and the framework
contract of Euroclear.
The Group has also provided limited financial guarantees, relating to
client contracts, for a total amount of €91 million at December 31,
2006.
Certain clients have been granted bank guarantees given by the Group
for a global amount of €55 million at December 31, 2006.
In addition to the standard clauses, the outsourcing contract signed
with TXU Energy Company LLC and TXU Electric Delivery Company
(formerly Oncor Electric Delivery Company) entitles the TXU
group to terminate the contract if the Group’s corporate credit rating
is downgraded to below investment grade. The contract nevertheless
remained in force following the downgrade of the Group’s credit
rating by Standard & Poor’s on January 7, 2005.
D) Financial debts secured by assets
Some financial debts are secured by assets recorded in the balance
sheet. At December 31, 2006, these borrowings included €156 million
relating to obligations under finance leases, and €121 million
relating to the reinstatement in the balance sheet of carry-back tax
credits (see Note 17 – “Net cash and cash equivalents”, Note 12
– “Property, plant and equipment” and Note 14 – “Other non-current
assets”).
Geographic area Countries
North America Canada, Mexico, United States
United Kingdom and Ireland Ireland, United Kingdom
Nordic countries Denmark, Finland, Norway, Sweden
Benelux Belgium, Luxembourg, Netherlands
Germany and Central Europe Austria, Germany, Poland, Switzerland and other eastern European countries
France France
Southern Europe Italy, Portugal, Spain
Asia-Pacific Australia, China, India
ANNUAL REPORT 2006 Capgemini
105