EX-99.2 3 u53885exv99w2.htm EX-99.2 exv99w2
 

Exhibit 99.2
ASML — Summary U.S. GAAP Consolidated Statements of Operations1
                                 
    Three months ended,     Nine months ended,  
(in thousands EUR, except per share data)   Oct 1, 2006     Sep 30, 2007     Oct 1, 2006     Sep 30, 2007  
 
Net system sales
    856,556       849,195       2,250,475       2,538,952  
Net service and field option sales
    101,877       91,142       279,103       296,842  
 
Total net sales
    958,433       940,337       2,529,578       2,835,794  
 
                               
Cost of sales
    567,519       553,244       1,506,120       1,671,583  
 
Gross profit on sales
    390,914       387,093       1,023,458       1,164,211  
 
                               
Research and development costs, net of credits
    100,321       120,077       279,652       356,829  
Amortization of in process R&D
                      23,148  
Selling, general and administrative costs
    51,442       56,045       152,732       168,771  
 
 
                               
Income from operations
    239,151       210,971       591,074       615,463  
Interest income (expense)
    (365 )     9,527       (6,629 )     27,956  
 
 
                               
Income from operations before income taxes
    238,786       220,498       584,445       643,419  
Provision for income taxes
    (66,768 )     (52,513 )     (165,281 )     (161,626 )
 
Net income
    172,018       167,985       419,164       481,793  
 
                               
Basic net income per ordinary share
    0.37       0.35       0.88       1.02  
Diluted net income per ordinary share
    0.35 2     0.35 2     0.83 2     1.01 2
 
                               
Number of ordinary shares used in computing per share amounts (in thousands):
               
Basic
    460,739       474,557       474,957       472,842  
Diluted
    521,362 2     481,724 2     535,987 2     479,881 2
ASML — Ratios and Other Data1
                                 
    Three months ended,     Nine months ended,  
    Oct 1, 2006     Sep 30, 2007     Oct 1, 2006     Sep 30, 2007  
 
Gross profit as a % of net sales
    40.8       41.2       40.5       41.1  
Income from operations as a % of net sales
    25.0       22.4       23.4       21.7  
Net income as a % of net sales
    17.9       17.9       16.6       17.0  
Shareholders’ equity as a % of total assets
    45.2       35.9       45.2       35.9  
Income taxes as a % of income before income taxes
    28.0       23.8       28.3       25.1  
Sales of new systems (in units)
    59       54       156       185  
Sales of used systems (in units)
    12       5       38       20  
Sales of systems total (in units)
    71       59       194       205  
Backlog new systems (in units)
    143       84       143       84  
Backlog used systems (in units)
    8       6       8       6  
Backlog systems total (in units)
    151       90       151       90  
Net bookings new systems (in units)
    88       35       213       116  
Net bookings used systems (in units)
    7       5       37       16  
Net bookings total (in units)
    95       40       250       132  
Number of employees
    5,388       6,403       5,388       6,403  

 


 

ASML — Summary U.S. GAAP Consolidated Balance Sheets1
                                 
(in thousands EUR)                   Dec 31, 2006     Sep 30, 2007  
 
ASSETS
                               
Cash and cash equivalents
                    1,655,857       2,445,227  
Accounts receivable, net
                    672,762       611,697  
Inventories, net
                    808,481       1,021,182  
Other current assets
                    288,938       345,501  
 
Total current assets
                    3,426,038       4,423,607  
 
                               
Other assets
                    236,031       183,431  
Intangible assets, net
                    18,076       177,569  
Property, plant and equipment, net
                    270,890       343,246  
 
Total assets
                    3,951,035       5,127,853  
LIABILITIES AND SHAREHOLDERS’ EQUITY
                               
Current liabilities
                    1,181,413       2,380,076  
Convertible subordinated debt
                    380,000       44,429  
Other long term debt and deferred liabilities
                    233,167       860,465  
Shareholders’ equity
                    2,156,455       1,842,883  
 
Total liabilities and shareholders’ equity
                    3,951,035       5,127,853  
ASML — Summary U.S. GAAP Consolidated Statements of Cash Flows1
                                 
    Three months ended,     Nine months ended,  
(in thousands EUR)   Oct 1, 2006     Sep 30, 2007     Oct 1, 2006     Sep 30, 2007  
 
CASH FLOWS FROM OPERATING ACTIVITIES:
                               
Net income
    172,018       167,985       419,164       481,793  
Depreciation and amortization
    29,634       28,261       72,465       105,724  
Change in tax assets and liabilities
    61,771       (4,883 )     73,531       37,114  
Change in assets and liabilities
    (261,230 )     (22,153 )     (451,998 )     (21,795 )
 
Net cash provided by operating activities
    2,193       169,210       113,162       602,836  
CASH FLOWS FROM INVESTING ACTIVITIES:
                               
Purchases of property, plant and equipment
    (16,615 )     (49,676 )     (47,555 )     (125,188 )
Proceeds from sale of property, plant and equipment
    1,376       1,698       2,742       15,927  
Purchase of intangible assets
          (253 )           (204,797 )
Acquired financial fixed assets
                      744  
Acquired cash
                      6,127  
 
Net cash used in investing activities
    (15,239 )     (48,231 )     (44,813 )     (307,187 )
CASH FLOWS FROM FINANCING ACTIVITIES:
                               
Purchase of shares
    (148,146 )           (400,750 )     (156,253 )
Net proceeds from issuance of shares and stock options
    9,442       29,103       24,151       62,167  
Excess tax benefits from stock options
          262             1,000  
Net proceeds from issuance of bonds
                      593,790  
Redemption and/or repayment of debt
    (310 )     (1,530 )     (923 )     (1,875 )
 
Net cash provided by (used in) financing activities
    (139,014 )     27,835       (377,522 )     498,829  
 
Net cash flows
    (152,060 )     148,814       (309,173 )     794,478  
Effect of changes in exchange rates on cash
    1,482       (2,846 )     (14,547 )     (5,108 )
 
Net increase (decrease) in cash & cash equivalents
    (150,578 )     145,968       (323,720 )     789,370  

 


 

ASML — Quarterly Summary U.S. GAAP Consolidated Statements of Operations1
                                         
    Three months ended,  
(in millions EUR)   Oct 1, 2006     Dec 31, 2006     Apr 1, 2007     Jul, 1, 2007     Sep, 30, 2007  
 
Net system sales
    856.5       978.6       858.9       830.8       849.2  
Net service and field option sales
    101.9       88.9       101.3       104.4       91.1  
 
Total net sales
    958.4       1,067.5       960.2       935.2       940.3  
 
                                       
Cost of sales
    567.5       628.9       567.6       550.7       553.2  
 
Gross profit on sales
    390.9       438.6       392.6       384.5       387.1  
 
                                       
Research and development costs, net of credits
    100.3       106.9       116.5       120.3       120.1  
Amortization of in process R&D
                23.1              
Selling, general and administrative costs
    51.4       52.1       56.3       56.4       56.0  
 
 
                                       
Income from operations
    239.2       279.6       196.7       207.8       211.0  
Interest income (expense)
    (0.4 )     5.7       10.3       8.2       9.5  
 
Income from operations before income taxes
    238.8       285.3       207.0       216.0       220.5  
Provision for income taxes
    (66.8 )     (79.8 )     (53.7 )     (55.5 )     (52.5 )
 
Net income
    172.0       205.5       153.3       160.5       168.0  
ASML — Quarterly Summary Ratios and other data1
                                         
    Three months ended,  
    Oct 1, 2006     Dec 31, 2006     Apr 1, 2007     Jul 1, 2007     Sep 30, 2007  
 
Gross profit as a % of net sales
    40.8       41.1       40.9       41.1       41.2  
Income from operations as a % of net sales
    25.0       26.2       20.5       22.2       22.4  
Net income as a % of net sales
    17.9       19.3       16.0       17.2       17.9  
Shareholders’ equity as a % of total assets
    45.2       54.6       53.5       47.5       35.9  
Income taxes as a % of income before income taxes
    28.0       28.0       25.9       25.7       23.8  
Sales of new systems (in units)
    59       64       66       65       54  
Sales of used systems (in units)
    12       8       11       4       5  
Sales of systems total (in units)
    71       72       77       69       59  
Backlog new systems (in units)
    143       153       146       103       84  
Backlog used systems (in units)
    8       10       2       6       6  
Backlog systems total (in units)
    151       163       148       109       90  
Value of backlog new systems (EUR million)
    2,099       2,120       2,157       1,718       1,737  
Value of backlog used systems (EUR million)
    27       26       6       27       32  
Value of backlog systems total (EUR million)
    2,126       2,146       2,163       1,745       1,769  
Net bookings new systems (in units)
    88       74       59       22       35  
Net bookings used systems (in units)
    7       10       3       8       5  
Net bookings total (in units)
    95       84       62       30       40  
Number of employees
    5,388       5,594       5,975       6,213       6,403  

 


 

ASML — Summary U.S. GAAP Consolidated Balance Sheets1
                                         
(in millions EUR)   Oct 1, 2006     Dec 31, 2006     Apr 1, 2007     Jul 1, 2007     Sep 30, 2007  
 
ASSETS
                                       
Cash and cash equivalents
    1,580.9       1,655.9       1,463.2       2,299.3       2,445.2  
Accounts receivable, net
    674.5       672.7       648.6       567.8       611.7  
Inventories, net
    837.2       808.5       906.7       972.9       1,021.2  
Other current assets
    263.8       288.9       310.5       315.4       345.5  
 
Total current assets
    3,356.4       3,426.0       3,329.0       4,155.4       4,423.6  
 
                                       
Other assets
    196.9       236.0       216.4       246.0       183.4  
Intangible assets, net
    19.7       18.1       194.6       189.9       177.6  
Property, plant and equipment, net
    281.5       270.9       288.5       313.5       343.3  
 
Total assets
    3,854.5       3,951.0       4,028.5       4,904.8       5,127.9  
LIABILITIES AND SHAREHOLDERS’ EQUITY
                                       
Current liabilities
    1,518.6       1,181.4       1,221.3       1,321.5       2,380.1  
Convertible subordinated debt
    380.0       380.0       380.0       380.0       44.4  
Other long term debt and deferred liabilities
    214.4       233.1       270.7       875.6       860.5  
Shareholders’ equity
    1,741.5       2,156.5       2,156.5       2,327.7       1,842.9  
 
Total liabilities and shareholders’ equity
    3,854.5       3,951.0       4,028.5       4,904.8       5,127.9  
ASML — Summary U.S. GAAP Consolidated Statements of Cash Flows1
                                         
    Three months ended,  
(in millions EUR)   Oct 1, 2006     Dec 31, 2006     Apr 1, 2007     Jul 1, 2007     Sep 30, 2007  
 
CASH FLOWS FROM OPERATING ACTIVITIES:
                                       
Net income
    172.0       205.5       153.3       160.5       168.0  
Depreciation and amortization
    29.6       32.0       50.4       27.0       28.3  
Change in tax assets and liabilities
    61.8       (45.2 )     30.9       11.1       (4.9 )
Change in assets and liabilities
    (261.2 )     172.0       (61.3 )     61.7       (22.2 )
 
Net cash provided by operating activities
    2.2       364.3       173.3       260.3       169.2  
CASH FLOWS FROM INVESTING ACTIVITIES:
                                       
Purchases of property, plant and equipment
    (16.6 )     (23.1 )     (35.8 )     (39.7 )     (49.7 )
Proceeds from sale of property, plant and equipment
    1.3       2.5       4.3       9.9       1.7  
Purchases of intangible assets
          (0.1 )     (201.6 )     (2.9 )     (0.2 )
Acquired financial fixed assets
                0.7              
Acquired cash
                6.1              
 
Net cash used in investing activities
    (15.3 )     (20.7 )     (226.3 )     (32.7 )     (48.2 )
CASH FLOWS FROM FINANCING ACTIVITIES:
                                       
Purchase of shares
    (148.1 )     (277.6 )     (156.3 )            
Net proceeds from issuance of shares and stock options
    9.4       13.5       18.1       15.0       29.1  
Excess tax benefits from stock options
          1.1       0.6       0.1       0.2  
Net proceeds from issuance of bonds
                      593.8        
Redemption and/or repayment of debt
    (0.3 )     (7.4 )     (0.2 )     (0.1 )     (1.5 )
 
Net cash provided by (used in) financing activities
    (139.0 )     (270.4 )     (137.8 )     608.8       27.8  
 
Net cash flows
    (152.1 )     73.2       (190.8 )     836.4       148.8  
Effect of changes in exchange rates on cash
    1.5       1.8       (1.9 )     (0.4 )     (2.8 )
 
Net increase (decrease) in cash & cash equivalents
    (150.6 )     75.0       (192.7 )     836.0       146.0  

 


 

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. 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 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 warranty is recognized in income on a straight-line basis over the contract period. The costs of providing services under extended and enhanced warranty are recognized when they occur.

 


 

ASML — Reconciliation U.S. GAAP — IFRS1
                                 
Net income   Three months ended,     Nine months ended,  
(in thousands EUR)   Oct 1, 2006     Sep 30, 2007     Oct 1, 2006     Sep 30, 2007  
 
Net income under U.S. GAAP
    172,018       167,985       419,164       481,793  
Share-based Payments (see Note 1)
    1,530       279       1,802       293  
Capitalization of development costs (see Note 2)
    6,533       9,594       29,032       29,575  
Convertible Subordinated Notes (see Note 3)
    (7,227 )     (2,265 )     (22,694 )     (6,661 )
Other (see Note 4)
                      (7,648 )
 
Net income under IFRS
    172,854       175,593       427,304       497,352  
Shareholders’ equity
                                         
(in thousands EUR)   Oct 1, 2006     Dec 31 2006     Apr 1, 2007     Jul 1, 2007     Sep 30, 2007  
 
Shareholders’ equity under U.S. GAAP
    1,741,492       2,156,455       2,156,472       2,327,742       1,842,883  
Share-based Payments (see Note 1)
    5,269       343       523       3,924       7,126  
Capitalization of development costs (see Note 2)
    80,848       90,769       113,451       110,749       120,344  
Convertible Subordinated Notes (see Note 3)
    32,524       31,416       29,239       27,019       2,894  
Other (see Note 4)
                             
 
Shareholders’ equity under IFRS
    1,860,133       2,278,983       2,299,685       2,469,434       1,973,247  
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 costs
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.
 
1.)   Except for balance sheet data as of December 31, 2006, all figures are unaudited.
 
2.)   The calculation of diluted net income per ordinary share assumes conversion of our Subordinated Notes as such conversions would have a dilutive effect.