EX-99.3 4 u52475exv99w3.htm EXHIBIT 99.3 exv99w3
 

Exhibit 99.3
ASML — Summary IFRS Consolidated Statements of Operations1
                 
    Three months ended,  
    Apr 2, 2006     Apr 1, 2007  
(Amounts in thousands EUR)                
 
 
               
Net system sales
    553,101       858,948  
Net service sales
    76,289       101,294  
 
Net sales
    629,390       960,242  
 
               
Cost of sales
    383,330       590,894  
 
Gross profit
    246,060       369,348  
 
               
Research and development costs, net of credits
    64,132       93,658  
Selling, general and administrative expenses
    50,239       56,156  
 
Total expenses
    114,371       149,814  
 
               
Operating income
    131,689       219,534  
Financial income (expense), net
    (15,246 )     7,316  
 
 
               
Income before income taxes
    116,443       226,850  
Provision for income taxes
    (31,604 )     (60,570 )
 
Net income
    84,839       166,280  
ASML — Summary IFRS Consolidated Balance Sheets1
                 
    Apr 2, 2006     Apr 1, 2007  
(Amounts in thousands EUR)                
 
ASSETS
               
Cash and cash equivalents
    1,671,065       1,463,212  
Accounts receivable, net
    447,401       648,608  
Inventories, net
    940,423       906,710  
Other current assets
    113,209       169,638  
 
Total current assets
    3,172,098       3,188,168  
 
               
Other assets
    307,515       326,392  
Intangible assets
    114,109       339,008  
Property, plant and equipment
    278,114       288,522  
 
Total assets
    3,871,836       4,142,090  
LIABILITIES AND SHAREHOLDERS’ EQUITY
               
Current liabilities
    1,365,383       1,163,876  
Convertible subordinated bonds
    324,248       336,477  
Long term debt and deferred liabilities
    267,820       342,052  
Shareholders’ equity
    1,914,385       2,299,685  
 
Total liabilities and Shareholders’ equity
    3,871,836       4,142,090  

 


 

ASML — Summary IFRS Consolidated Statements of Cash Flows1
                 
    Three months ended,  
    Apr 2, 2006     Apr 1, 2007  
(Amounts in thousands EUR)                
 
 
               
CASH FLOWS FROM OPERATING ACTIVITIES:
               
Net income
    84,839       166,280  
Depreciation and amortization
    26,882       73,298  
Change in tax assets and liabilities
    (52,133 )     31,247  
Change in assets and liabilities
    (256,279 )     (51,981 )
 
Net cash provided by (used in) operating activities
    (196,691 )     218,844  
CASH FLOWS FROM INVESTING ACTIVITIES:
               
Purchases of property, plant and equipment
    (16,919 )     (35,789 )
Proceeds from sale of property, plant and equipment
    693       4,306  
Purchase of intangible assets
    (22,345 )     (247,216 )
Acquired financial fixed assets
          744  
Acquired cash
          6,127  
 
Net cash used in investing activities
    (38,571 )     (271,828 )
CASH FLOWS FROM FINANCING ACTIVITIES:
               
Purchase of shares
          (156,253 )
Proceeds from issuance of shares and stock options
    7,858       18,073  
Excess tax benefits from stock options
          627  
Redemption and/or repayment of loans
    (310 )     (234 )
 
Net cash provided by (used in) financing activities
    7,548       (137,787 )
 
Net cash flow
    (227,714 )     (190,771 )
Effect of changes in exchange rates on cash
    (5,830 )     (1,874 )
 
Net decrease in cash and cash equivalents
    (233,544 )     (192,645 )
ASML — Quarterly Summary IFRS Consolidated Statements of Operations1
                                         
    Three months ended,  
    Apr 2,     Jul 2,     Oct 1,     Dec 31,     Apr 1,  
    2006     2006     2006     2006     2007  
(Amounts in millions EUR)                                        
 
 
                                       
Net system sales
    553.1       840.8       856.5       978.6       858.9  
Net service sales
    76.3       100.9       101.9       88.9       101.3  
 
Net sales
    629.4       941.7       958.4       1,067.5       960.2  
 
                                       
Cost of sales
    383.3       568.0       582.0       649.6       590.9  
 
Gross profit
    246.1       373.7       376.4       417.9       369.3  
 
                                       
Research & development costs, net of credits
    64.1       71.0       76.5       78.6       93.7  
Selling, general and administrative expenses
    50.3       50.4       51.4       52.3       56.1  
 
Total expenses
    114.4       121.4       127.9       130.9       149.8  
 
                                       
Operating income
    131.7       252.3       248.5       287.0       219.5  
Financial income (expense), net
    (15.3 )     (12.8 )     (10.8 )     1.6       7.3  
 
Income before income taxes
    116.4       239.5       237.7       288.6       226.8  
Provision for income taxes
    (31.6 )     (69.9 )     (64.8 )     (79.9 )     (60.5 )
 
Net income
    84.8       169.6       172.9       208.7       166.3  

 


 

ASML — Summary IFRS Consolidated Balance Sheets1
                                         
    Apr 2,     Jul 2,     Oct 1,     Dec 31,     Apr 1,  
    2006     2006     2006     2006     2007  
(Amounts in millions EUR)                                        
 
ASSETS
                                       
Cash and cash equivalents
    1,671.1       1,731.5       1,580.9       1,655.8       1,463.2  
Accounts receivable, net
    447.4       540.3       674.5       672.8       648.6  
Inventories, net
    940.4       916.2       837.2       808.5       906.7  
Other current assets
    113.2       126.8       157.5       147.7       169.7  
 
Total current assets
    3,172.1       3,314.8       3,250.1       3,284.8       3,188.2  
 
                                       
Other assets
    307.5       289.9       285.4       346.5       326.4  
Intangible assets
    114.1       127.0       134.5       139.9       339.0  
Property, plant and equipment
    278.1       287.0       281.5       270.9       288.5  
 
Total assets
    3,871.8       4,018.7       3,951.5       4,042.1       4,142.1  
LIABILITIES AND SHAREHOLDERS’ EQUITY
                                       
Current liabilities
    1,365.4       1,657.2       1,530.6       1,181.9       1,163.9  
Convertible subordinated bonds
    324.2       328.1       332.1       333.2       336.5  
Long term debt and deferred liabilities
    267.8       259.8       228.7       248.0       342.0  
Shareholders’ equity
    1,914.4       1,773.6       1,860.1       2,279.0       2,299.7  
 
Total liabilities and Shareholders’ equity
    3,871.8       4,018.7       3,951.5       4,042.1       4,142.1  
ASML — Summary IFRS Consolidated Statements of Cash Flows1
                                         
    Three months ended,  
    Apr 2,     Jul 2,     Oct 1,     Dec 31,     Apr 1,  
    2006     2006     2006     2006     2007  
(Amounts in millions EUR)                                        
 
 
                                       
CASH FLOWS FROM OPERATING ACTIVITIES:
                                       
Net income
    84.8       169.6       172.9       208.7       166.3  
Depreciation and amortization
    26.9       26.0       43.9       52.7       73.3  
Change in tax assets and liabilities
    (52.1 )     66.6       58.2       (47.7 )     31.2  
Change in assets and liabilities
    (256.3 )     88.0       (249.0 )     178.5       (52.0 )
 
Net cash provided by (used in) operating activities
    (196.7 )     350.2       26.0       392.2       218.8  
CASH FLOWS FROM INVESTING ACTIVITIES:
                                       
Purchases of property, plant and equipment
    (16.9 )     (14.0 )     (16.6 )     (23.1 )     (35.8 )
Proceeds from property, plant and equipment
    0.7       0.7       1.4       2.5       4.3  
Purchases of intangible assets
    (22.4 )     (20.2 )     (23.9 )     (28.0 )     (247.2 )
Acquired financial fixed assets
                            0.8  
Acquired cash
                            6.1  
 
Net cash used in investing activities
    (38.6 )     (33.5 )     (39.1 )     (48.6 )     (271.8 )
CASH FLOWS FROM FINANCING ACTIVITIES:
                                       
Purchase of shares
          (252.6 )     (148.1 )     (277.6 )     (156.3 )
Proceeds from issuance of shares and stock options
    7.9       6.8       9.4       13.5       18.1  
Excess tax benefits from stock options
                      1.1       0.6  
Redemption and/or repayment of loans
    (0.3 )     (0.3 )     (0.3 )     (7.4 )     (0.2 )
 
Net cash provided by (used in) financing activities
    7.6       (246.1 )     (139.0 )     (270.4 )     (137.8 )
 
Net cash flow
    (227.7 )     70.6       (152.1 )     73.2       (190.8 )
Effect of changes in exchange rates on cash
    (5.8 )     (10.2 )     1.5       1.8       (1.8 )
 
Net increase (decrease) in cash and cash equivalents
    (233.5 )     60.4       (150.6 )     75.0       (192.6 )
 
1.)   Except for balance sheet data as of December 31, 2006 all figures are unaudited.

 


 

ASML — Notes to the Summary IFRS Consolidated Financial Statements
Basis of Presentation
ASML has prepared the accompanying summary consolidated financial statements in accordance with International Financial Reporting Standards (“IFRS”) as adopted by the EU — accounting principles generally accepted in the Netherlands for companies quoted on Euronext Amsterdam. Further disclosures, as required under IFRS in annual reports and interim reporting (IAS 34), are not included. The accompanying consolidated financial statements are stated in thousands of euros (‘EUR’), except otherwise indicated.
For internal and external reporting purposes, ASML follows accounting principles generally accepted in the United States of America (“U.S. GAAP”). U.S. GAAP is ASML’s primary accounting standard for the Company’s setting of financial and operational performance targets.
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 IFRS 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 and revenue recognition from the installation of a system 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 premises.
For arrangements containing multiple elements, the revenue relating to the undelivered elements is deferred at estimated fair value until delivery of the deferred elements. Revenue from installation services and service contracts provided to our customers is initially deferred and is recognized when the installation is completed and over the life of the contract respectively. Revenue from extended and enhanced warranty is recognized in income on a straight-line basis over the contract period except in those circumstances in which sufficient historical evidence indicates that the costs of performing services under the contract are incurred on other than a straight-line basis. In those circumstances, revenue is recognized over the contract period in proportion to the costs expected to be incurred in performing services under the contract. The costs of providing services under extended and enhanced warranty are recognized when occurred.
Pensions
Under IFRS, ASML applies IAS 19, “Employee benefits”, in accounting for its multi-employer defined benefit plans. In accordance with IAS 19, ASML accounts for its multi-employer defined benefit plan as if it were a defined contribution plan, as the multi-employer union managing the plan, informed ASML that:
    its internal administrative systems are not organized to provide ASML with the required Company-specific information to enable ASML to account for the plan as a defined benefit plan; and
 
    that it will not provide any data with respect to the multi-employer pension fund other than it is required to make publicly available via its annual report.

 


 

ASML — Reconciliation U.S. GAAP — IFRS1
Net income
                 
    Three months ended,  
                 
    Apr 2, 2006     Apr 1, 2007  
(Amounts in thousands EUR)
               
 
Net income under U.S. GAAP
    80,034       153,300  
Share-based Payments (see Note 1)
    309       121  
Capitalization of development costs (see Note 2)
    12,186       22,683  
Convertible Subordinated Notes (see Note 3)
    (7,690 )     (2,176 )
Other (see Note 4)
          (7,648 )
 
Net income under IFRS
    84,839       166,280  
 
               
 
               
Shareholders’ Equity
                                         
    Apr 2,     Jul 2,     Oct 1,     Dec 31,     Apr 1,  
                                         
    2006     2006     2006     2006     2007  
(Amounts in thousands EUR)
                                       
 
Shareholders’ equity under U.S. GAAP
    1,800,394       1,657,449       1,741,492       2,156,455       2,156,472  
Share-based Payments (see Note 1)
    2,460       2,095       5,269       343       523  
Capitalization of development costs (see Note 2)
    64,002       74,314       80,848       90,769       113,451  
Convertible Subordinated Notes (see Note 3)
    47,529       39,751       32,524       31,416       29,239  
Other (see Note 4)
                             
 
Shareholders’ equity under IFRS
    1,914,385       1,773,609       1,860,133       2,278,983       2,299,685  
 
                                       
 
                                       
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 granted to its employees after November 7, 2002.
Under U.S. GAAP, until December 31, 2005, ASML accounted for stock option plans using the intrinsic value method in accordance with APB 25 “Accounting for stock issued to employees” and provided pro forma disclosure of the impact of the fair value method on net income and earnings per share in accordance with SFAS No. 123 “Accounting for Stock Based Compensation”. 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.
Note 2 Capitalization of development expenditures
Under IFRS, ASML applies IAS 38, “Intangible Assets”. During the second half of 2004, ASML made changes to its administrative systems in order to provide sufficient information to comply with IFRS beginning from January 1, 2005. Sufficient reliable information to account for capitalization of development expenditures under IFRS before January 1, 2005 is not available. Under IAS 38, capitalized development expenditures are amortized over the expected useful life of the related product generally ranging between 2 and 3 years. Amortization starts when the developed product is ready for volume production.
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 Convertible Subordinated Notes
Under IFRS, ASML applies IAS 32 “Financial instruments: Disclosure and presentation” and IAS 39 “Financial instruments: Recognition and measurement” beginning from January 1, 2005. In accordance with IAS 32 and IAS 39, ASML accounts separately for the equity and liability component of its convertible notes (“Split accounting”). The equity component relates to the grant of a conversion option to shares to the holder of the bond. Split accounting results in additional interest charges. Under U.S. GAAP, ASML accounts for its convertible bonds as a liability at the principal amount outstanding.

 


 

Note 4 Other
Other differences between IFRS and U.S. GAAP mainly relate to a different accounting treatment of income tax.
“Safe Harbor” Statement under the U.S. Private Securities Litigation Reform Act of 1995: the matters discussed in this document may include forward-looking statements that are subject to risks and uncertainties including, but not limited to: economic conditions, 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, ability to enforce patents, the outcome of intellectual property litigation, availability of raw materials and critical manufacturing equipment, trade environment, and other risks indicated in the risk factors included in ASML’s Annual Report on Form 20-F and other filings with the U.S. Securities and Exchange Commission.