EX-99.3 4 u54615exv99w3.htm EX-99.3 EX-99.3
 

Exhibit 99.3
ASML — Summary IFRS Consolidated Statements of Operations1
                                 
    Three months ended,     Twelve months ended,  
(in thousands EUR)   Dec 31, 2006     Dec 31, 2007     Dec 31, 2006     Dec 31, 2007  
 
 
                               
Net system sales
    978,590       852,824       3,229,064       3,391,775  
Net service and field option sales
    88,937       120,063       368,040       416,904  
 
Total net sales
    1,067,527       972,887       3,597,104       3,808,679  
 
                               
Cost of sales
    649,644       595,133       2,183,020       2,348,555  
 
Gross profit on sales
    417,883       377,754       1,414,084       1,460,124  
 
                               
Research and development costs, net of credits
    78,643       84,707       290,290       352,942  
Selling, general and administrative costs
    52,276       56,879       204,362       225,327  
 
 
                               
Income from operations
    286,964       236,168       919,432       881,855  
Interest income (expense)
    1,615       6,274       (37,214 )     27,843  
 
 
                               
Income from operations before income taxes
    288,579       242,442       882,218       909,698  
Provision for income taxes
    (79,899 )     (7,901 )     (246,234 )     (177,805 )
 
Net income
    208,680       234,541       635,984       731,893  

 


 

ASML — Summary IFRS Consolidated Balance Sheets1
                 
    Dec 31,     Dec 31,  
(in thousands EUR)   2006     2007  
 
 
               
ASSETS
               
Property, plant and equipment, net
    270,890       380,894  
Goodwill
          136,246  
Other intangible assets
    139,913       216,908  
Deferred tax assets
    315,180       220,668  
Derivative financial instruments
    3,197       20,930  
Accounts and other receivables
    31,360       53,758  
 
Total non-current assets
    760,540       1,029,404  
 
               
Inventories
    808,481       1,102,210  
Derivative financial instruments
    13,363       12,319  
Accounts and other receivables
    818,915       839,553  
Cash and cash equivalents
    1,655,857       1,271,636  
 
Total current assets
    3,296,616       3,225,718  
 
               
Total assets
    4,057,156       4,255,122  
 
               
EQUITY AND LIABILITIES
               
Total equity
    2,278,983       2,055,680  
 
               
Subordinated debt
    333,220        
Other long term debt
    1,433       595,783  
Deferred tax and other liabilities
    238,275       257,130  
Other deferred liabilities
    8,271       7,935  
 
Total non-current liabilities
    581,199       860,848  
 
               
Accounts payable
    326,995       282,953  
Accrued liabilities and other
    674,229       934,945  
Current tax liabilities
    187,751       109,415  
Derivative financial instruments
    7,999       11,281  
 
Total current liabilities
    1,196,974       1,338,594  
 
               
Total liabilities and equity
    4,057,156       4,255,122  

 


 

ASML — Summary IFRS Consolidated Statements of Cash Flows1
                                 
    Three months ended,     Twelve months ended,  
(in thousands EUR)   Dec 31, 2006     Dec 31, 2007     Dec 31, 2006     Dec 31, 2007  
 
 
                               
CASH FLOWS FROM OPERATING ACTIVITIES:
                               
Net income
    208,680       234,541       635,984       731,893  
Depreciation and amortization
    52,735       49,135       149,556       233,494  
Change in tax assets and liabilities
    (47,650 )     (25,458 )     25,036       (4,791 )
Change in assets and liabilities
    178,465       (142,563 )     (238,778 )     (127,097 )
 
Net cash provided by operating activities
    392,230       115,655       571,798       833,499  
CASH FLOWS FROM INVESTING ACTIVITIES:
                               
Purchases of property, plant and equipment
    (23,064 )     (53,964 )     (70,619 )     (179,152 )
Proceeds from sale of property, plant and equipment
    2,474       3,294       5,216       19,221  
Purchase of intangible assets
    (28,006 )     (37,301 )     (94,412 )     (156,954 )
Acquisition of subsidiary (net of cash)
                      (193,269 )
 
Net cash used in investing activities
    (48,596 )     (87,971 )     (159,815 )     (510,154 )
CASH FLOWS FROM FINANCING ACTIVITIES:
                               
Net proceeds from issuance of shares and stock options
    13,479       30,722       37,630       92,889  
Capital repayment and purchase of shares
    (277,635 )     (1,215,459 )     (678,385 )     (1,371,712 )
Excess tax benefits from stock options
    1,116       187       1,116       1,187  
Net proceeds from issuance of bonds
          (6,272 )           587,505  
Redemption and/or repayment of debt
    (7,395 )     (7,843 )     (8,318 )     (9,718 )
 
Net cash provided by (used in) financing activities
    (270,435 )     (1,198,665 )     (647,957 )     (699,849 )
 
Net cash flows
    73,199       (1,170,981 )     (235,974 )     (376,504 )
Effect of changes in exchange rates on cash
    1,769       (2,610 )     (12,778 )     (7,717 )
 
Net increase (decrease) in cash and cash equivalents
    74,968       (1,173,591 )     (248,752 )     (384,221 )
ASML — Quarterly Summary IFRS Consolidated Statements of Operations1
                                         
    Three months ended,  
    Dec 31,     Apr 1,     Jul 1,     Sep 30,     Dec 31,  
(in millions EUR)   2006     2007     2007     2007     2007  
 
 
                                       
Net system sales
    978.6       858.9       830.8       849.2       852.8  
Net service and field option sales
    88.9       101.3       104.4       91.1       120.1  
 
Total net sales
    1,067.5       960.2       935.2       940.3       972.9  
 
                                       
Cost of sales
    649.6       590.9       576.8       585.6       595.1  
 
Gross profit on sales
    417.9       369.3       358.4       354.7       377.8  
 
                                       
Research & development costs, net of credits
    78.6       93.7       97.7       76.9       84.7  
Selling, general and administrative costs
    52.3       56.1       56.3       56.0       56.9  
 
 
                                       
Income from operations
    287.0       219.5       204.4       221.8       236.2  
Interest income (expense)
    1.6       7.3       5.1       9.1       6.2  
 
 
                                       
Income from operations before income taxes
    288.6       226.8       209.5       230.9       242.4  
Provision for income taxes
    (79.9 )     (60.5 )     (54.0 )     (55.3 )     (7.9 )
 
Net income
    208.7       166.3       155.5       175.6       234.5  

 


 

ASML — Summary IFRS Consolidated Balance Sheets1
                                         
    Dec 31,     Apr 1,     Jul 1,     Sep 30,     Dec 31,  
(in millions EUR)   2006     2007     2007     2007     2007  
 
 
                                       
ASSETS
                                       
Property, plant and equipment
    270.9       288.5       313.5       343.3       380.9  
Goodwill
          150.5       148.9       141.7       136.2  
Other intangible assets
    139.9       197.3       190.6       198.4       216.9  
Deferred tax assets
    315.2       293.0       312.2       252.3       220.7  
Derivative financial instruments
    3.2       6.2       0.2       9.9       20.9  
Accounts and other receivables
    31.4       33.4       33.2       33.3       53.8  
 
Total non-current assets
    760.6       968.9       998.6       978.9       1,029.4  
 
                                       
Inventories
    808.5       906.7       972.9       1,021.2       1,102.2  
Derivative financial instruments
    13.4       6.9       12.8       23.5       12.3  
Accounts and other receivables
    818.9       817.4       752.4       823.5       839.6  
Cash and cash equivalents
    1,655.8       1,463.2       2,299.2       2,445.2       1,271.6  
 
Total current assets
    3,296.6       3,194.2       4,037.3       4,313.4       3,225.7  
 
                                       
Total assets
    4,057.2       4,163.1       5,035.9       5,292.3       4,255.1  
 
                                       
EQUITY AND LIABILITIES
                                       
Total equity
    2,279.0       2,299.7       2,469.4       1,973.2       2,055.7  
 
                                       
Subordinated debt
    333.2       336.5       339.8       40.1        
Other long term debt
    1.4       1.3       587.6       597.8       595.8  
Derivative financial instruments
                15.6       0.7        
Deferred tax and other liabilities
    238.3       340.1       293.1       259.3       257.1  
Other deferred liabilities
    8.3       9.4       8.1       8.2       7.9  
 
Total non-current liabilities
    581.2       687.3       1,244.2       906.1       860.8  
 
                                       
Accounts payable
    327.0       297.6       311.4       320.9       283.0  
Accrued liabilities and other
    674.2       762.0       815.5       1,917.5       934.9  
Current tax liabilities
    187.8       113.5       187.8       155.9       109.4  
Derivative financial instruments
    8.0       3.0       7.6       18.7       11.3  
 
Total current liabilities
    1,197.0       1,176.1       1,322.3       2,413.0       1,338.6  
 
                                       
Total liabilities and shareholders’ equity
    4,057.2       4,163.1       5,035.9       5,292.3       4,255.1  

 


 

ASML — Summary IFRS Consolidated Statements of Cash Flows1
                                         
    Three months ended,  
    Dec 31,     Apr 1,     Jul 1,     Sep 30,     Dec 31,  
(in millions EUR)   2006     2007     2007     2007     2007  
 
 
                                       
CASH FLOWS FROM OPERATING ACTIVITIES:
                                       
Net income
    208.7       166.3       155.5       175.6       234.5  
Depreciation and amortization
    52.7       76.2       49.8       58.3       49.1  
Change in tax assets and liabilities
    (47.7 )     19.2       (2.7 )     4.1       (25.4 )
Change in assets and liabilities
    178.5       (44.4 )     68.3       (8.4 )     (142.5 )
 
Net cash provided by operating activities
    392.2       217.3       270.9       229.6       115.7  
CASH FLOWS FROM INVESTING ACTIVITIES:
                                       
Purchases of property, plant and equipment
    (23.1 )     (35.8 )     (39.7 )     (49.7 )     (54.0 )
Proceeds from property, plant and equipment
    2.5       4.3       9.9       1.7       3.3  
Purchases of intangible assets
    (28.0 )     (45.5 )     (13.4 )     (60.6 )     (37.3 )
Acquisition of subsidiary (net of cash)
          (193.3 )                  
 
Net cash used in investing activities
    (48.6 )     (270.3 )     (43.2 )     (108.6 )     (88.0 )
CASH FLOWS FROM FINANCING ACTIVITIES:
                                       
Net proceeds from issuance of shares and stock options
    13.5       18.1       15.0       29.1       30.7  
Capital repayment and purchase of shares
    (277.6 )     (156.3 )                 (1,215.5 )
Excess tax benefits from stock options
    1.1       0.6       0.1       0.2       0.2  
Net proceeds from issuance of bonds
                593.7             (6.3 )
Redemption and/or repayment of debt
    (7.4 )     (0.2 )     (0.1 )     (1.5 )     (7.8 )
 
Net cash provided by (used in) financing activities
    (270.4 )     (137.8 )     608.7       27.8       (1,198.7 )
 
Net cash flows
    73.2       (190.8 )     836.4       148.8       (1,171.0 )
Effect of changes in exchange rates on cash
    1.8       (1.8 )     (0.4 )     (2.8 )     (2.6 )
 
Net increase (decrease) in cash and cash equivalents
    75.0       (192.6 )     836.0       146.0       (1,173.6 )

 


 

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,     Twelve months ended,  
(in thousands EUR)   Dec 31, 2006     Dec 31, 2007     Dec 31, 2006     Dec 31, 2007  
 
Net income under U.S. GAAP
    205,525       206,051       624,689       687,843  
Share-based Payments (see Note 1)
    (5,657 )     (875 )     (3,855 )     (582 )
Capitalization of development costs (see Note 2)
    9,921       20,513       38,953       50,089  
Convertible Subordinated Notes (see Note 3)
    (1,109 )           (23,803 )     (6,661 )
Other (see Note 4)
          8,852             1,204  
 
Net income under IFRS
    208,680       234,541       635,984       731,893  
Shareholders’ equity
                                         
    Dec 31     Apr 1,     Jul 1,     Sep 30,     Dec 31,  
(in thousands EUR)   2006     2007     2007     2007     2007  
 
Shareholders’ equity under U.S. GAAP
    2,156,455       2,156,472       2,327,742       1,842,883       1,907,617  
Share-based Payments (see Note 1)
    343       523       3,924       7,126       787  
Capitalization of development costs (see Note 2)
    90,769       113,451       110,749       120,344       138,424  
Convertible Subordinated Notes (see Note 3)
    31,416       29,239       27,019       2,894        
Other (see Note 4)
                            8,852  
 
Shareholders’ equity under IFRS
    2,278,983       2,299,685       2,469,434       1,973,247       2,055,680  
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.