EX-99.3 4 u53885exv99w3.htm EX-99.3 exv99w3
 

Exhibit 99.3
ASML — Summary IFRS Consolidated Statements of Operations 1
                                 
    Three months ended,     Nine months ended,  
(in thousands EUR)   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
    582,009       585,673       1,533,376       1,753,424  
 
Gross profit on sales
    376,424       354,664       996,202       1,082,370  
 
                               
Research and development costs, net of credits
    76,549       76,886       211,647       268,236  
Selling, general and administrative costs
    51,422       55,977       152,086       168,449  
 
 
                               
Income from operations
    248,453       221,801       632,469       645,685  
Interest income (expense)
    (10,749 )     9,089       (38,830 )     21,571  
 
 
                               
Income from operations before income taxes
    237,704       230,890       593,639       667,256  
Provision for income taxes
    (64,850 )     (55,297 )     (166,335 )     (169,904 )
 
Net income
    172,854       175,593       427,304       497,352  
ASML — Summary IFRS Consolidated Balance Sheets 1
                                 
(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
                    147,683       214,225  
 
Total current assets
                    3,284,783       4,292,331  
 
                               
Other assets
                    346,540       285,658  
Intangible assets, net
                    139,913       340,022  
Property, plant and equipment, net
                    270,890       343,246  
 
Total assets
                    4,042,126       5,261,257  
LIABILITIES AND SHAREHOLDERS’ EQUITY
                               
Current liabilities
                    1,181,944       2,382,628  
Convertible subordinated debt
                    333,220       40,123  
Other long term debt and deferred liabilities
                    247,979       865,259  
Shareholders’ equity
                    2,278,983       1,973,247  
 
Total liabilities and shareholders’ equity
                    4,042,126       5,261,257  

 


 

ASML — Summary IFRS Consolidated Statements of Cash Flows 1
                                 
    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
    172,854       175,593       427,304       497,352  
Depreciation and amortization
    43,957       58,583       96,820       184,556  
Change in tax assets and liabilities
    58,193       4,090       72,686       32,677  
Change in assets and liabilities
    (248,936 )     (8,383 )     (417,242 )     7,917  
 
Net cash provided by operating activities
    26,068       229,883       179,568       722,502  
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
    (23,875 )     (60,912 )     (66,406 )     (324,450 )
Acquired financial fixed assets
                      744  
Acquired cash
                      6,127  
 
Net cash used in investing activities
    (39,114 )     (108,890 )     (111,219 )     (426,840 )
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
          (14 )           593,776  
Redemption and/or repayment of debt
    (310 )     (1,530 )     (923 )     (1,875 )
 
Net cash provided by (used in) financing activities
    (139,014 )     27,821       (377,522 )     498,815  
 
Net cash flows
    (152,060 )     148,814       (309,173 )     794,477  
Effect of changes in exchange rates on cash
    1,482       (2,846 )     (14,547 )     (5,107 )
 
Net increase (decrease) in cash and cash equivalents
    (150,578 )     145,968       (323,720 )     789,370  
ASML — Quarterly Summary IFRS Consolidated Statements of Operations 1
                                         
    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
    582.0       649.6       590.9       576.8       585.6  
 
Gross profit on sales
    376.4       417.9       369.3       358.4       354.7  
 
                                       
Research & development costs, net of credits
    76.5       78.6       93.7       97.7       76.9  
Selling, general and administrative costs
    51.4       52.3       56.1       56.3       56.0  
 
 
                                       
Income from operations
    248.5       287.0       219.5       204.4       221.8  
Interest income (expense)
    (10.8 )     1.6       7.3       5.1       9.1  
 
Income from operations before income taxes
    237.7       288.6       226.8       209.5       230.9  
Provision for income taxes
    (64.8 )     (79.9 )     (60.5 )     (54.0 )     (55.3 )
 
Net income
    172.9       208.7       166.3       155.5       175.6  

 


 

ASML — Summary IFRS Consolidated Balance Sheets 1
                                         
(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       1,655.8       1,463.2       2,299.3       2,445.2  
Accounts receivable, net
    674.5       672.8       648.6       567.8       611.7  
Inventories, net
    837.2       808.5       906.7       972.9       1,021.2  
Other current assets
    157.5       147.7       169.7       183.6       214.2  
 
Total current assets
    3,250.1       3,284.8       3,188.2       4,023.6       4,292.3  
 
                                       
Other assets
    285.4       346.5       326.4       354.1       285.7  
Intangible assets, net
    134.5       139.9       339.0       322.1       340.0  
Property, plant and equipment, net
    281.5       270.9       288.5       313.5       343.3  
 
Total assets
    3,951.5       4,042.1       4,142.1       5,013.3       5,261.3  
LIABILITIES AND SHAREHOLDERS’ EQUITY
                                       
Current liabilities
    1,530.6       1,181.9       1,163.9       1,324.0       2,382.6  
Convertible subordinated debt
    332.1       333.2       336.5       339.8       40.1  
Other long term debt and deferred liabilities
    228.7       248.0       342.0       880.1       865.3  
Shareholders’ equity
    1,860.1       2,279.0       2,299.7       2,469.4       1,973.3  
 
Total liabilities and shareholders’ equity
    3,951.5       4,042.1       4,142.1       5,013.3       5,261.3  
ASML — Summary IFRS Consolidated Statements of Cash Flows 1
                                         
    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
    172.9       208.7       166.3       155.5       175.6  
Depreciation and amortization
    43.9       52.7       73.3       52.7       58.6  
Change in tax assets and liabilities
    58.2       (47.7 )     31.2       (2.7 )     4.1  
Change in assets and liabilities
    (249.0 )     178.5       (52.0 )     68.3       (8.4 )
 
Net cash provided by operating activities
    26.0       392.2       218.8       273.8       229.9  
CASH FLOWS FROM INVESTING ACTIVITIES:
                                       
Purchases of property, plant and equipment
    (16.6 )     (23.1 )     (35.8 )     (39.7 )     (49.7 )
Proceeds from property, plant and equipment
    1.4       2.5       4.3       9.9       1.7  
Purchases of intangible assets
    (23.9 )     (28.0 )     (247.2 )     (16.3 )     (60.9 )
Acquired financial fixed assets
                0.8              
Acquired cash
                6.1              
 
Net cash used in investing activities
    (39.1 )     (48.6 )     (271.8 )     (46.1 )     (108.9 )
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
                      593.7        
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 )     608.7       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       (1.8 )     (0.4 )     (2.8 )
 
Net increase (decrease) in cash and cash equivalents
    (150.6 )     75.0       (192.6 )     836.0       146.0  

 


 

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. The costs of providing services under extended and enhanced warranty are recognized when occurred.

 


 

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 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.
 
1.)   Except for balance sheet data as of December 31, 2006 all figures are unaudited.