EX-99.3 4 u07236exv99w3.htm EXHIBIT 99.3 Exhibit 99.3
Exhibit 99.3
ASML — Summary U.S. GAAP Consolidated Statements of Operations 1
                                 
    Three months ended,   Six months ended,
(in thousands EUR, except per share data)   Jun 29, 2008   Jun 28, 2009   Jun 29, 2008   Jun 28, 2009
 
 
                               
Net system sales
    725,586       183,259       1,545,572       284,359  
Net service and field option sales
    118,571       93,341       217,793       175,866  
 
Total net sales
    844,157       276,600       1,763,365       460,225  
 
                               
Cost of sales
    506,689       242,162       1,052,271       413,425  
 
Gross profit on sales
    337,468       34,438       711,094       46,800  
 
                               
Research and development costs, net of credits
    130,241       117,890       258,500       236,205  
Selling, general and administrative costs
    56,368       40,978       113,695       81,973  
 
Income (loss) from operations
    150,859       (124,430 )     338,899       (271,378 )
 
                               
Interest income (expense)
    6,372       (238 )     10,573       (1,269 )
 
Income (loss) from operations before income taxes
    157,231       (124,668 )     349,472       (272,647 )
 
                               
(Provision for) benefit from income taxes
    34,746       20,715       (12,372 )     51,503  
 
Net income (loss)
    191,977       (103,953 )     337,100       (221,144 )
 
                               
Basic net income (loss) per ordinary share
    0.45       (0.24 )     0.78       (0.51 )
Diluted net income (loss) per ordinary share 2
    0.44       (0.24 )     0.78       (0.51 )
 
                               
Number of ordinary shares used in computing per share amounts (in thousands):
                               
Basic
    431,221       432,454       431,412       432,283  
Diluted 2
    434,585       432,454       434,819       432,283  
ASML — Ratios and Other Data 1
                                 
    Three months ended,   Six months ended,
    Jun 29, 2008   Jun 28, 2009   Jun 29, 2008   Jun 28, 2009
 
 
                               
Gross profit as a % of net sales
    40.0       12.5       40.3       10.2  
Income (loss) from operations as a % of net sales
    17.9       (45.0 )     19.2       (59.0 )
Net income (loss) as a % of net sales
    22.7       (37.6 )     19.1       (48.1 )
Shareholders’ equity as a % of total assets
    49.7       47.7       49.7       47.7  
Income taxes as a % of income before income taxes
    22.1       (16.6 )     (3.5 )     (18.9 )
Sales of systems (in units)
    39       10       89       21  
ASP of systems sales (EUR million)
    18.6       18.3       17.4       13.5  
Value of backlog systems (EUR million)
    1,106       1,064       1,106       1,064  
Backlog systems (in units)
    59       43       59       43  
ASP of backlog systems (EUR million)
    18.8       24.7       18.8       24.7  
Value of booked systems (EUR million)
    632       394       944       601  
Net bookings (in units)
    33       15       59       23  
ASP of booked systems (EUR million)
    19.2       26.3       16.0       26.1  
Number of payroll employees in FTEs
    6,821       6,597       6,821       6,597  
Number of temporary employees in FTEs
    1,649       868       1,649       868  

 


 

ASML — Summary U.S. GAAP Consolidated Balance Sheets 1
                 
(in thousands EUR)   Dec 31, 2008   Jun 28, 2009
 
 
               
ASSETS
               
 
               
Cash and cash equivalents
    1,109,184       1,092,660  
Accounts receivable, net
    463,273       213,532  
Finance receivables, net
    6,225       52  
Current tax assets
    87,560        
Inventories, net
    999,150       926,080  
Deferred tax assets
    71,780       70,486  
Other assets
    236,077       220,258  
 
Total current assets
    2,973,249       2,523,068  
 
               
Finance receivables, net
    31,030       20,609  
Deferred tax assets
    148,133       198,867  
Other assets
    88,197       53,764  
Goodwill
    131,453       134,536  
Other intangible assets, net
    26,692       22,300  
Property, plant and equipment, net
    540,640       591,917  
 
Total non-current assets
    966,145       1,021,993  
 
               
Total assets
    3,939,394       3,545,061  
 
               
LIABILITIES AND SHAREHOLDERS’ EQUITY
               
Current liabilities
    1,008,343       940,918  
Long-term debt
    647,050       651,917  
Deferred and other tax liabilities
    209,699       200,578  
Provisions
    15,495       14,790  
Accrued liabilities and other liabilities
    70,038       45,618  
 
Total non-current liabilities
    942,282       912,903  
 
               
 
Total liabilities
    1,950,625       1,853,821  
 
               
Shareholders’ equity
    1,988,769       1,691,240  
 
Total liabilities and shareholders’ equity
    3,939,394       3,545,061  

 


 

ASML — Summary U.S. GAAP Consolidated Statements of Cash Flows 1
                                 
    Three months ended,   Six months ended,
(in thousands EUR)   Jun 29, 2008   Jun 28, 2009   Jun 29, 2008   Jun 28, 2009
 
 
                               
CASH FLOWS FROM OPERATING ACTIVITIES
                               
 
                               
Net income (loss)
    191,977       (103,953 )     337,100       (221,144 )
 
                               
Depreciation and amortization
    26,452       31,660       55,477       69,536  
Impairment
    93       4,387       1,644       6,979  
Loss on disposals of property, plant and equipment
    1,311       8,699       2,414       11,338  
Share-based payments
    3,109       2,581       6,676       6,093  
Allowance for doubtful debts
    (647 )     1,177       (107 )     1,164  
Allowance for obsolete inventory
    11,790       43,897       32,556       66,032  
Deferred income taxes
    (54,457 )     (31,211 )     (33,868 )     (58,234 )
Change in assets and liabilities
    (49,651 )     113,798       (4,563 )     271,512  
 
Net cash provided by operating activities
    129,977       71,035       397,329       153,276  
 
                               
CASH FLOWS FROM INVESTING ACTIVITIES
                               
 
                               
Purchases of property, plant and equipment
    (65,441 )     (43,336 )     (120,473 )     (87,240 )
Proceeds from sale of property, plant and equipment
                      1,200  
 
Net cash used in investing activities
    (65,441 )     (43,336 )     (120,473 )     (86,040 )
 
                               
CASH FLOWS FROM FINANCING ACTIVITIES
                               
 
                               
Dividend paid
    (107,447 )     (86,486 )     (107,447 )     (86,486 )
Purchase of shares in conjunction with share-based payment plans
                (87,605 )      
Net proceeds from issuance of shares and stock options
    552       429       3,527       532  
Excess tax benefits from stock options
    5,969       469       5,973       248  
Net proceeds from other long-term debt
          32             32  
Redemption and/or repayment of debt
          (9 )           (9 )
 
Net cash used in financing activities
    (100,926 )     (85,565 )     (185,552 )     (85,683 )
 
                               
 
Net cash flows
    (36,390 )     (57,866 )     91,304       (18,447 )
 
                               
Effect of changes in exchange rates on cash
    144       (484 )     (2,042 )     1,923  
 
Net increase (decrease) in cash & cash equivalents
    (36,246 )     (58,350 )     89,262       (16,524 )

 


 

ASML — Quarterly Summary U.S. GAAP Consolidated Statements of Operations 1
                                         
    Three months ended,  
    Jun 29,     Sep 28,     Dec 31,     Mar 29,     Jun 28,  
(in millions EUR, except per share data)   2008     2008     2008     2009     2009  
 
 
                                       
Net system sales
    725.6       590.7       380.5       101.1       183.3  
Net service and field option sales
    118.6       105.8       113.3       82.5       93.3  
 
Total net sales
    844.2       696.5       493.8       183.6       276.6  
 
                                       
Cost of sales
    506.7       431.1       454.8       171.2       242.2  
 
Gross profit on sales
    337.5       265.4       39.0       12.4       34.4  
 
                                       
Research and development costs, net of credits
    130.2       130.2       127.5       118.3       117.9  
Selling, general and administrative costs
    56.4       51.9       46.7       41.0       41.0  
 
Income (loss) from operations
    150.9       83.3       (135.2 )     (146.9 )     (124.5 )
 
                                       
Interest income (expense)
    6.4       7.1       5.0       (1.1 )     (0.2 )
 
Income (loss) from operations before income taxes
    157.3       90.4       (130.2 )     (148.0 )     (124.7 )
 
                                       
(Provision for) benefit from income taxes
    34.7       (17.1 )     42.2       30.8       20.7  
 
Net income (loss)
    192.0       73.3       (88.0 )     (117.2 )     (104.0 )
 
                                       
Basic net income (loss) per ordinary share
    0.45       0.17       (0.20 )     (0.27 )     (0.24 )
Diluted net income (loss) per ordinary share 2
    0.44       0.17       (0.20 )     (0.27 )     (0.24 )
 
                                       
Number of ordinary shares used in computing per share amounts (in thousands):
                                       
Basic
    431,221       431,672       431,989       432,112       432,454  
Diluted 2
    434,585       434,491       431,989       432,112       432,454  
ASML — Quarterly Summary Ratios and other data 1
                                         
    Three months ended,  
    Jun 29,     Sep 28,     Dec 31,     Mar 29,     Jun 28,  
    2008     2008     2008     2009     2009  
 
 
                                       
Gross profit as a % of net sales
    40.0       38.1       7.9       6.7       12.5  
Income (loss) from operations as a % of net sales
    17.9       12.0       (27.4 )     (80.0 )     (45.0 )
Net income (loss) as a % of net sales
    22.7       10.5       (17.8 )     (63.8 )     (37.6 )
Shareholders’ equity as a % of total assets
    49.7       50.3       50.5       48.0       47.7  
Income taxes as a % of income before income taxes
    22.1       (18.9 )     (32.4 )     (20.8 )     (16.6 )
Sales of systems (in units)
    39       37       25       11       10  
ASP of system sales (EUR million)
    18.6       16.0       15.2       9.2       18.3  
Value of backlog systems (EUR million)
    1,106       1,028       755       853       1,064  
Backlog systems (in units)
    59       53       41       38       43  
ASP of backlog systems (EUR million)
    18.8       19.4       18.4       22.4       24.7  
Value of booked systems (EUR million)
    632       498       127       207       394  
Net bookings (in units)
    33       31       13       8       15  
ASP of booked systems (EUR million)
    19.2       16.1       9.8       25.8       26.3  
Number of payroll employees in FTEs
    6,821       6,907       6,930       6,715       6,597  
Number of temporary employees in FTEs
    1,649       1,610       1,329       959       868  

 


 

ASML — Summary U.S. GAAP Consolidated Balance Sheets 1
                                         
    Jun 29,     Sep 28,     Dec 31,     Mar 29,     Jun 28,  
(in millions EUR)   2008     2008     2008     2009     2009  
 
 
                                       
ASSETS
                                       
Cash and cash equivalents
    1,360.9       1,313.0       1,109.2       1,151.0       1,092.7  
Accounts receivable, net
    516.7       536.1       463.3       291.6       213.5  
Finance receivables, net
    0.2       7.4       6.2       6.2       0.1  
Current tax assets
                87.6              
Inventories, net
    1,130.2       1,134.0       999.1       936.8       926.1  
Deferred tax assets
    69.8       82.8       71.8       74.9       70.5  
Other assets
    262.2       261.4       236.1       240.6       220.2  
 
Total current assets
    3,340.0       3,334.7       2,973.3       2,701.1       2,523.1  
 
                                       
Finance receivables, net
          30.7       31.0       29.2       20.6  
Deferred tax assets
    157.7       139.4       148.1       173.2       198.9  
Other assets
    39.3       50.6       88.2       89.5       53.8  
Goodwill
    119.8       129.2       131.5       139.7       134.5  
Other intangible assets, net
    30.1       28.8       26.7       25.6       22.3  
Property, plant and equipment, net
    458.1       503.1       540.6       586.6       591.9  
 
Total non-current assets
    805.0       881.8       966.1       1,043.8       1,022.0  
 
                                       
Total assets
    4,145.0       4,216.5       3,939.4       3,744.9       3,545.1  
 
                                       
LIABILITIES AND SHAREHOLDERS’ EQUITY
                                       
Current liabilities
    1,247.3       1,273.0       1,008.3       1,017.5       940.9  
Long-term debt
    591.6       596.7       647.1       661.4       651.9  
Deferred and other tax liabilities
    227.0       215.2       209.7       204.9       200.6  
Provisions
                15.5       16.9       14.8  
Accrued liabilities and other liabilities
    18.5       8.8       70.0       48.2       45.6  
 
Total non-current liabilities
    837.1       820.7       942.3       931.4       912.9  
 
                                       
 
Total liabilities
    2,084.4       2,093.7       1,950.6       1,948.9       1,853.8  
 
                                       
Shareholders’ equity
    2,060.6       2,122.8       1,988.8       1,796.0       1,691.3  
 
Total liabilities and shareholders’ equity
    4,145.0       4,216.5       3,939.4       3,744.9       3,545.1  

 


 

ASML — Summary U.S. GAAP Consolidated Statements of Cash Flows 1
                                         
    Three months ended,  
    Jun 29,     Sep 28,     Dec 31,     Mar 29,     Jun 28,  
(in millions EUR)   2008     2008     2008     2009     2009  
 
 
                                       
CASH FLOWS FROM OPERATING ACTIVITIES
                                       
Net income (loss)
    192.0       73.3       (88.0 )     (117.2 )     (104.0 )
 
                                       
Depreciation and amortization
    26.5       28.6       35.1       37.9       31.6  
Impairment
    0.1       0.6       22.9       2.6       4.4  
Loss on disposals of property, plant and equipment
    1.3       1.4       0.4       2.6       8.7  
Share-based payments
    3.1       3.7       3.2       3.5       2.6  
Allowance for doubtful debts
    (0.6 )     (0.2 )     0.5             1.2  
Allowance for obsolete inventory
    11.8       21.3       85.8       22.1       43.9  
Deferred income taxes
    (54.5 )     2.4       (2.7 )     (27.0 )     (31.2 )
Change in assets and liabilities
    (49.7 )     (110.2 )     (194.6 )     157.7       113.8  
 
Net cash provided by (used in) operating activities
    130.0       20.9       (137.4 )     82.2       71.0  
 
                                       
CASH FLOWS FROM INVESTING ACTIVITIES
                                       
Purchases of property, plant and equipment
    (65.5 )     (68.3 )     (71.1 )     (43.9 )     (43.3 )
Proceeds from sale of property, plant and equipment
                      1.2        
 
Net cash used in investing activities
    (65.5 )     (68.3 )     (71.1 )     (42.7 )     (43.3 )
 
                                       
CASH FLOWS FROM FINANCING ACTIVITIES
                                       
Dividend paid
    (107.4 )     (0.4 )                 (86.5 )
Net proceeds from issuance of shares and stock options
    0.5       1.4       6.5       0.1       0.4  
Excess tax benefits (deficiencies) from stock options
    6.0       (1.9 )     (1.9 )     (0.2 )     0.5  
Net proceeds from other long-term debt
                            0.1  
Redemption and/or repayment of debt
          (1.3 )     (1.1 )            
 
Net cash provided by (used in) financing activities
    (100.9 )     (2.2 )     3.5       (0.1 )     (85.5 )
 
                                       
 
Net cash flows
    (36.4 )     (49.6 )     (205.0 )     39.4       (57.8 )
 
                                       
Effect of changes in exchange rates on cash
    0.2       1.7       1.2       2.4       (0.5 )
 
Net increase (decrease) in cash & cash equivalents
    (36.2 )     (47.9 )     (203.8 )     41.8       (58.3 )

 


 

ASML — Notes to the Summary U.S. GAAP Consolidated Financial Statements
Basis of Presentation
ASML follows accounting principles generally accepted in the United States of America (“U.S. GAAP”). Further disclosures, as required under U.S. GAAP in annual reports, are not included in the summary consolidated financial statements. Unless stated otherwise, the accompanying consolidated financial statements are stated in thousands of euros (‘EUR’).
Principles of consolidation
The consolidated financial statements include the accounts of ASML Holding N.V. and all of its majority-owned subsidiaries. Subsidiaries are all entities over which ASML has the power to govern the financial and operating policies generally accompanying a shareholding of more than one half of the voting rights. All intercompany profits, balances and transactions have been eliminated in the consolidation.
Use of estimates
The preparation of ASML’s consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities on the balance sheet dates and the reported amounts of revenue and expense during the reported periods. Actual results could differ from those estimates.
Recognition of revenues
ASML recognizes revenue when all four revenue recognition criteria are met: persuasive evidence of an arrangement exists; delivery has occurred or services have been rendered; seller’s price to the buyer is fixed or determinable; and collectibility is reasonably assured. At ASML, this policy generally results in revenue recognition from the sale of a system upon shipment. The revenue from the installation of a system is generally recognized upon completion of that installation at the customer site. Each system undergoes, prior to shipment, a “Factory Acceptance Test” in ASML’s clean room facilities, effectively replicating the operating conditions that will be present on the customer’s site, in order to verify whether the system will meet its standard specifications and any additional technical and performance criteria agreed with the customer. A system is shipped, and revenue recognized, only after all specifications are met and customer sign-off is received or waived. Although each system’s performance is re-tested upon installation at the customer’s site, ASML has never failed to successfully complete installation of a system at a customer’s premises.
For arrangements containing multiple elements, the revenue relating to the undelivered elements is deferred at estimated fair value until delivery of these elements. Revenue from installation services and service contracts provided to our customers is initially deferred and is recognized when the installation is completed and, in case of service contracts, over the life of those contracts. Revenue from extended and enhanced warranties is recognized in income on a straight-line basis over the contract period. The costs of providing services under extended and enhanced warranties are recognized when they occur.
Foreign currency risk management
The Company uses the euro as its invoicing currency in order to limit the exposure to foreign currency movements. Exceptions may occur on a customer by customer basis. To the extent that invoicing is done in a currency other than the euro, the Company is exposed to foreign currency risk.
It is the Company’s policy to hedge material transaction exposures, such as sales transactions, forecasted purchase transactions and accounts receivable/accounts payable. The Company hedges these exposures through the use of foreign exchange options and forward contracts. The use of a mix of foreign exchange options and forward contracts is aimed at reflecting the likelihood of the transactions occurring.

 


 

It is the Company’s policy to hedge material remeasurement exposures. These net exposures from certain monetary assets and liabilities in non-functional currencies are hedged with forward contracts.
As of June 28, 2009 EUR 36.9 million loss of other comprehensive income, net of taxes, represents the total anticipated loss to be charged to net sales, and EUR 1.2 million gain represents the total anticipated gain to be released to cost of sales when the forecasted revenue and purchase transactions occur.
ASML — Reconciliation U.S. GAAP — IFRS 1
Net income
                                 
    Three months ended,     Six months ended,  
(in thousands EUR)   Jun 29, 2008     Jun 28, 2009     Jun 29, 2008     Jun 28, 2009  
 
Net income (loss) under U.S. GAAP
    191,977       (103,953 )     337,100       (221,144 )
Share-based payments (see Note 1)
    245       1,396       (518 )     897  
Capitalization of development costs (see Note 2)
    18,649       21,760       40,330       33,275  
Income taxes (see Note 3)
    (380 )     (458 )     39       (2,058 )
 
Net income (loss) under IFRS
    210,491       (81,255 )     376,951       (189,030 )
Shareholders’ equity
                                         
    Jun 29,     Sep 28,     Dec 31,     Mar 29,     Jun 28,  
(in thousands EUR)   2008     2008     2008     2009     2009  
 
Shareholders’ equity under U.S. GAAP
    2,060,575       2,122,848       1,988,769       1,795,951       1,691,240  
Share-based payments (see Note 1)
    (3,266 )     (7,904 )     (6,537 )     (7,088 )     (4,918 )
Capitalization of development costs (see Note 2)
    176,818       193,780       201,717       215,452       235,945  
Income taxes (see Note 3)
    8,478       5,969       4,794       3,361       2,797  
 
Shareholders’ equity under IFRS
    2,242,605       2,314,693       2,188,743       2,007,676       1,925,064  
Notes to the reconciliation from U.S. GAAP to IFRS
Note 1 Share-based Payments
Under IFRS, ASML applies IFRS 2, “Share-based Payments” beginning from January 1, 2004. In accordance with IFRS 2, ASML records as an expense the fair value of its share-based payments with respect to stock options and stock granted to its employees after November 7, 2002. Under IFRSs, a deferred tax asset is computed on the basis of the tax deduction for the share-based payments every period under the applicable tax law and is recognized to the extent it is probable that future taxable profit will be available against which these deductible temporary differences will be utilized. Therefore, changes in the Company’s share price do affect the deferred tax asset at period-end and result in adjustments to the deferred tax asset.
As of January 1, 2006, ASML applies SFAS No. 123(R) “Share-Based Payment” which is a revision of SFAS No.123. SFAS 123(R) requires companies to recognize the cost of employee services received in exchange for awards of equity instruments based upon the grant-date fair value of those instruments. SFAS 123(R)’s general principle is that a deferred tax asset is established as the Company recognizes compensation costs for commercial purposes for awards that are expected to result in a tax deduction under existing tax law. Under U.S. GAAP, the deferred tax recorded on share-based compensation is computed on the basis of the expense recognized in the financial statements. Therefore, changes in the Company’s share price do not affect the deferred tax asset recorded in the Company’s financial statements.

 


 

Note 2 Capitalization of development costs
Under IFRS, ASML applies IAS 38, “Intangible Assets”. In accordance with IAS 38, capitalized development expenditures are amortized over the expected useful life of the related product generally ranging between one and three years. Amortization starts when the developed product is ready for volume production. In 2008, we recognized an impairment charge for an amount of EUR 18.3 million.
Under U.S. GAAP, ASML applies SFAS No. 2, “Accounting for Research and Development Costs”. In accordance with SFAS No. 2, ASML charges costs relating to research and development to operating expense as incurred.
Note 3 Income taxes
Under IFRS, ASML applies IAS 12, “Income Taxes” beginning from January 1, 2005. In accordance with IAS 12 unrealized net income resulting from intercompany transactions that are eliminated from the carrying amount of assets on consolidation, give rise to a temporary difference for which deferred taxes must be recognized on consolidation. The deferred taxes are calculated based on the tax rate applicable in the purchaser’s tax jurisdiction.
Under U.S. GAAP, the elimination of unrealized net income from intercompany transactions that are eliminated from the carrying amount of assets on consolidation, give rise to a temporary difference for which prepaid taxes must be recognized on consolidation. Contrary to IFRS, the prepaid taxes under U.S. GAAP are calculated based on the tax rate applicable in the seller’s tax jurisdiction.
Statutory Interim Report
On July 24, 2009 ASML will publish its Statutory Interim Report for the six months period ended June 28, 2009. This report is in accordance with the requirements of the EU Transparency Directive and will include an Interim Management Board Report, a Managing Directors’ Statement and Consolidated Condensed Interim Financial Statements in accordance with IAS 34, “Interim Financial Reporting”. The EU Transparency Directive is applicable for all listed companies as of January 1, 2009. The Statutory Interim Report for the six months period ended June 28, 2009 will be available online at www.asml.com.
“Safe Harbor” Statement under the US Private Securities Litigation Reform Act of 1995: the matters discussed in this document may include forward-looking statements, including statements made about our outlook, realization of backlog, IC unit demand, financial results, average sales price, gross margin and expenses. These forward looking statements are subject to risks and uncertainties including, but not limited to: economic conditions, credit market deterioration on consumer confidence which could affect our customers, product demand and semiconductor equipment industry capacity, worldwide demand and manufacturing capacity utilization for semiconductors (the principal product of our customer base), competitive products and pricing, manufacturing efficiencies, new product development and customer acceptance of new products, ability to enforce patents and protect intellectual property rights, the outcome of intellectual property litigation, availability of raw materials and critical manufacturing equipment, trade environment, changes in exchange rates and other risks indicated in the risk factors included in ASML’s Annual Report on Form 20-F and other filings with the US Securities and Exchange Commission.
 
1   All quarterly information in this press release is unaudited.
 
2   The calculation of diluted net income per ordinary share assumes the exercise of options issued under ASML stock option plans for periods in which exercises would have a dilutive effect, the calculation of diluted net income per ordinary share does not assume exercise of such options when such exercises would be antidilutive.