EX-99.3 4 u06089exv99w3.htm EX-99.3 EX-99.3
Exhibit 99.3
ASML — Summary U.S. GAAP Consolidated Statements of Operations 1,4
                                 
    Three months ended,   Twelve months ended,
(in thousands EUR, except per share data)   Dec 31, 2007   Dec 31, 2008   Dec 31, 2007   Dec 31, 2008
 
 
                               
Net system sales
    834,857       380,466       3,351,281       2,516,762  
Net service and field option sales
    120,063       113,354       416,904       436,916  
 
Total net sales
    954,920       493,820       3,768,185       2,953,678  
 
                               
Cost of sales
    565,306       454,830       2,218,526       1,938,164  
 
Gross profit on sales
    389,614       38,990       1,549,659       1,015,514  
 
                               
Research and development costs, net of credits
    129,313       127,471       486,141       516,128  
Amortization of in process R&D
                23,148        
Selling, general and administrative costs
    56,897       46,712       225,668       212,341  
 
Income (loss) from operations
    203,404       (135,193 )     814,702       287,045  
 
                               
Interest income
    5,494       4,965       33,451       22,599  
 
Income (loss) from operations before income taxes
    208,898       (130,228 )     848,153       309,644  
 
                               
(Provision for) benefit from income taxes
    (16,356 )     42,204       (177,152 )     12,726  
 
Net income (loss)
    192,542       (88,024 )     671,001       322,370  
 
                               
Basic net income (loss) per ordinary share
    0.44       (0.20 )     1.45       0.75  
Diluted net income (loss) per ordinary share
    0.43  3     (0.20 ) 3     1.41 2,3     0.74  3
 
                               
Number of ordinary shares used in computing per share amounts (in thousands):
                               
Basic
    439,317       431,989       462,406       431,620  
Diluted
    444,569  3     431,989  3     485,643  2,3     434,205  3
ASML — Ratios and Other Data 1,4
                                 
    Three months ended,   Twelve months ended,
    Dec 31, 2007   Dec 31, 2008   Dec 31, 2007   Dec 31, 2008
 
 
                               
Gross profit as a % of net sales
    40.8       7.9       41.1       34.4  
Income (loss) from operations as a % of net sales
    21.3       (27.4 )     21.6       9.7  
Net income (loss) as a % of net sales
    20.2       (17.8 )     17.8       10.9  
Shareholders’ equity as a % of total assets
    46.4       50.5       46.4       50.5  
Income taxes as a % of income before income taxes
    (7.8 )     (32.4 )     (20.9 )     4.1  
Sales of systems total (in units)
    55       25       260       151  
ASP of systems sales (EUR million)
    15.2       15.2       12.9       16.7  
Value of backlog systems total (EUR million)
    1,697       755       1,697       755  
Backlog systems total (in units)
    89       41       89       41  
ASP of backlog systems (EUR million)
    19.1       18.4       19.1       18.4  
Value of booked systems total (EUR million)
    803       127       2,970       1,569  
Net bookings total (in units)
    54       13       186       103  
ASP of booked systems (EUR million)
    14.9       9.8       16.0       15.2  
Number of payroll employees
    6,582       6,930       6,582       6,930  
Number of temporary employees
    1,725       1,329       1,725       1,329  

 


 

ASML — Summary U.S. GAAP Consolidated Balance Sheets 1,4
                 
(in thousands EUR)   Dec 31, 2007   Dec 31, 2008
 
 
               
ASSETS
               
 
               
Cash and cash equivalents
    1,271,636       1,109,184  
Accounts receivable, net
    637,975       469,498  
Current tax assets
          87,560  
Inventories, net
    1,102,210       999,150  
Deferred tax assets, short-term
    78,395       71,780  
Other current assets
    234,529       236,077  
 
Total current assets
    3,324,745       2,973,249  
 
               
Deferred tax assets
    141,032       148,133  
Other assets
    59,991       119,227  
Goodwill
    128,271       131,453  
Other intangible assets, net
    38,195       26,692  
Property, plant and equipment, net
    380,894       540,640  
 
Total assets
    4,073,128       3,939,394  
 
               
LIABILITIES AND SHAREHOLDERS’ EQUITY
               
 
               
Current liabilities
    1,326,757       1,051,402  
Long-term debt
    602,016       647,091  
Deferred tax liabilities
    245,415       209,699  
Provisions, long-term
          15,495  
Other liabilities
    7,936       26,938  
 
Total liabilities
    2,182,124       1,950,625  
 
               
Shareholders’ equity
    1,891,004       1,988,769  
 
Total liabilities and shareholders’ equity
    4,073,128       3,939,394  

 


 

ASML — Summary U.S. GAAP Consolidated Statements of Cash Flows 1,4
                                 
    Three months ended,   Twelve months ended,
(in thousands EUR)   Dec 31, 2007   Dec 31, 2008   Dec 31, 2007   Dec 31, 2008
 
 
                               
CASH FLOWS FROM OPERATING ACTIVITIES
                               
 
                               
Net income (loss)
    192,542       (88,024 )     671,001       322,370  
 
                               
Depreciation and amortization
    28,965       36,282       126,344       120,384  
Impairment charges
    874       20,546       9,022       22,742  
Loss on disposals of property, plant and equipment
    1,638       1,603       14,210       5,430  
Share-based payments
    6,164       3,173       16,506       13,535  
Allowance for doubtful debts
    (1,889 )     153       (178 )     (160 )
Allowance for obsolete inventory
    28,980       85,777       79,592       139,628  
Deferred income taxes
    46,186       (2,708 )     106,403       (34,155 )
Income taxes payable
    (38,485 )     (91,441 )     (74,428 )     (158,277 )
Change in assets and liabilities
    (185,056 )     (102,797 )     (247,461 )     (150,751 )
 
Net cash provided by (used in) operating activities
    79,919       (137,436 )     701,011       280,746  
 
                               
CASH FLOWS FROM INVESTING ACTIVITIES
                               
 
                               
Purchases of property, plant and equipment
    (53,964 )     (71,060 )     (179,152 )     (259,770 )
Proceeds from sale of property, plant and equipment
    1,656             5,011        
Purchases of intangible assets
                      (35 )
Acquisition of subsidiary (net of cash acquired)
                (188,011 )      
 
Net cash used in investing activities
    (52,308 )     (71,060 )     (362,152 )     (259,805 )
 
                               
CASH FLOWS FROM FINANCING ACTIVITIES
                               
 
                               
Capital repayment
    (1,011,857 )           (1,011,857 )      
Purchase of shares in conjunction with conversion rights of bond holders and stock options
    (203,602 )           (359,856 )     (87,605 )
Dividend paid
                      (107,841 )
Net proceeds from issuance of shares and stock options
    22,801       6,509       63,307       11,475  
Net proceeds from issuance of bonds
    (35 )           593,755        
Excess tax benefits (deficiencies) from stock options
    1,944       (1,883 )     9,006       2,144  
Redemption and/or repayment of debt
    (7,843 )     (1,131 )     (9,718 )     (2,411 )
 
Net cash provided by (used in) financing activities
    (1,198,592 )     3,495       (715,363 )     (184,238 )
 
                               
 
Net cash flows
    (1,170,981 )     (205,001 )     (376,504 )     (163,297 )
 
                               
Effect of changes in exchange rates on cash
    (2,610 )     1,192       (7,717 )     845  
 
Net decrease in cash & cash equivalents
    (1,173,591 )     (203,809 )     (384,221 )     (162,452 )

 


 

ASML — Quarterly Summary U.S. GAAP Consolidated Statements of Operations1,4
                                         
    Three months ended,  
    Dec 31,     Mar 30,     Jun 29,     Sep 28,     Dec 31,  
(in millions EUR, except per share data)   2007     2008     2008     2008     2008  
 
 
                                       
Net system sales
    834.8       820.0       725.6       590.7       380.5  
Net service and field option sales
    120.1       99.2       118.6       105.8       113.3  
 
Total net sales
    954.9       919.2       844.2       696.5       493.8  
 
                                       
Cost of sales
    565.3       545.6       506.7       431.1       454.8  
 
Gross profit on sales
    389.6       373.6       337.5       265.4       39.0  
 
                                       
Research and development costs, net of credits
    129.3       128.3       130.2       130.2       127.5  
Selling, general and administrative costs
    56.9       57.3       56.4       51.9       46.7  
 
Income (loss) from operations
    203.4       188.0       150.9       83.3       (135.2 )
 
                                       
Interest income
    5.5       4.2       6.4       7.1       5.0  
 
Income (loss) from operations before income taxes
    208.9       192.2       157.3       90.4       (130.2 )
 
                                       
(Provision for) benefit from income taxes
    (16.4 )     (47.1 )     34.7       (17.1 )     42.2  
 
Net income (loss)
    192.5       145.1       192.0       73.3       (88.0 )
 
                                       
Basic net income (loss) per ordinary share
    0.44       0.34       0.45       0.17       (0.20 )
Diluted net income (loss) per ordinary share3
    0.43       0.33       0.44       0.17       (0.20 )
 
                                       
Number of ordinary shares used in computing per share amounts (in thousands):
                                       
Basic
    439,317       431,600       431,221       431,672       431,989  
Diluted3
    444,569       434,959       434,585       434,491       431,989  
ASML — Quarterly Summary Ratios and other data 1,4
                                         
    Three months ended,  
    Dec 31,     Mar 30,     Jun 29,     Sep 28,     Dec 31,  
    2007     2008     2008     2008     2008  
 
 
                                       
Gross profit as a % of net sales
    40.8       40.6       40.0       38.1       7.9  
Income (loss) from operations as a % of net sales
    21.3       20.5       17.9       12.0       (27.4 )
Net income (loss) as a % of net sales
    20.2       15.8       22.7       10.5       (17.8 )
Shareholders’ equity as a % of total assets
    46.4       44.5       49.7       50.3       50.5  
Income taxes as a % of income before income taxes
    (7.8 )     (24.5 )     22.1       (18.9 )     (32.4 )
Sales of systems total (in units)
    55       50       39       37       25  
ASP of system sales (EUR million)
    15.2       16.4       18.6       16.0       15.2  
Value of backlog systems total (EUR million)
    1,697       1,167       1,106       1,028       755  
Backlog systems total (in units)
    89       65       59       53       41  
ASP of backlog systems (EUR million)
    19.1       18.0       18.8       19.4       18.4  
Value of booked systems total (EUR million)
    803       312       632       498       127  
Net bookings total (in units)
    54       26       33       31       13  
ASP of booked systems (EUR million)
    14.9       12.0       19.2       16.1       9.8  
Number of payroll employees
    6,582       6,765       6,821       6,907       6,930  
Number of temporary employees
    1,725       1,686       1,649       1,610       1,329  

 


 

ASML — Summary U.S. GAAP Consolidated Balance Sheets 1,4
                                         
    Dec 31,     Mar 30,     Jun 29,     Sep 28,     Dec 31,  
(in millions EUR)   2007     2008     2008     2008     2008  
 
 
                                       
ASSETS
                                       
Cash and cash equivalents
    1,271.6       1,397.1       1,360.9       1,313.0       1,109.2  
Accounts receivable, net
    638.0       741.5       516.9       543.5       469.5  
Current tax assets
                            87.6  
Inventories, net
    1,102.2       1,152.0       1,130.2       1,134.0       999.1  
Deferred tax assets, short-term
    78.4       71.1       69.8       82.8       71.8  
Other current assets
    234.5       267.6       262.2       261.4       236.1  
 
Total current assets
    3,324.7       3,629.3       3,340.0       3,334.7       2,973.3  
 
                                       
Deferred tax assets
    141.0       135.8       157.7       139.4       148.1  
Other assets
    60.0       85.7       39.3       81.3       119.2  
Goodwill
    128.3       119.7       119.8       129.2       131.5  
Other intangible assets, net
    38.2       32.5       30.1       28.8       26.7  
Property, plant and equipment, net
    380.9       401.4       458.1       503.1       540.6  
 
Total assets
    4,073.1       4,404.4       4,145.0       4,216.5       3,939.4  
 
                                       
LIABILITIES AND SHAREHOLDERS’ EQUITY
                                       
Current liabilities
    1,326.8       1,562.3       1,247.3       1,273.0       1,051.4  
Long-term debt
    602.0       615.3       591.6       596.7       647.1  
Deferred tax liabilities
    245.4       261.5       227.0       215.2       209.7  
Provisions, long-term
                            15.5  
Other liabilities
    7.9       7.1       18.5       8.8       26.9  
 
Total liabilities
    2,182.1       2,446.2       2,084.4       2,093.7       1,950.6  
 
                                       
Shareholders’ equity
    1,891.0       1,958.2       2,060.6       2,122.8       1,988.8  
 
Total liabilities and shareholders’ equity
    4,073.1       4,404.4       4,145.0       4,216.5       3,939.4  

 


 

ASML — Summary U.S. GAAP Consolidated Statements of Cash Flows 1,4
                                         
    Three months ended,  
    Dec 31,     Mar 30,     Jun 29,     Sep 28,     Dec 31,  
(in millions EUR)   2007     2008     2008     2008     2008  
 
 
                                       
CASH FLOWS FROM OPERATING ACTIVITIES
                                       
Net income (loss)
    192.5       145.1       192.0       73.3       (88.0 )
 
                                       
Depreciation and amortization
    29.0       29.0       26.5       28.6       36.3  
Impairment charges
    0.9       1.5       0.1       0.6       20.5  
Loss on disposals of property, plant and equipment
    1.6       1.1       1.3       1.4       1.6  
Share-based payments
    6.2       3.6       3.1       3.7       3.2  
Allowance for doubtful debts
    (1.9 )     0.5       (0.6 )     (0.2 )     0.2  
Allowance for obsolete inventory
    29.0       20.8       11.8       21.3       85.8  
Deferred income taxes
    46.2       20.6       (54.5 )     2.4       (2.7 )
Income taxes payable
    (38.5 )     1.2       (59.7 )     (8.4 )     (91.5 )
Change in assets and liabilities
    (185.1 )     43.9       10.0       (101.8 )     (102.8 )
 
Net cash provided by (used in) operating activities
    79.9       267.3       130.0       20.9       (137.4 )
 
                                       
CASH FLOWS FROM INVESTING ACTIVITIES
                                       
Purchases of property, plant and equipment
    (54.0 )     (55.0 )     (65.5 )     (68.3 )     (71.1 )
Proceeds from sale of property, plant and equipment
    1.7                          
 
Net cash used in investing activities
    (52.3 )     (55.0 )     (65.5 )     (68.3 )     (71.1 )
 
                                       
CASH FLOWS FROM FINANCING ACTIVITIES
                                       
Capital repayment
    (1,011.9 )                        
Purchase of shares in conjunction with conversion rights of bond holders and stock options
    (203.6 )     (87.6 )                  
Dividend paid
                (107.4 )     (0.4 )      
Net proceeds from issuance of shares and stock options
    22.8       3.0       0.5       1.4       6.5  
Excess tax benefits (deficiencies) from stock options
    1.9             6.0       (1.9 )     (1.9 )
Redemption and/or repayment of debt
    (7.8 )                 (1.3 )     (1.1 )
 
Net cash provided by (used in) financing activities
    (1,198.6 )     (84.6 )     (100.9 )     (2.2 )     3.5  
 
                                       
 
Net cash flows
    (1,171.0 )     127.7       (36.4 )     (49.6 )     (205.0 )
 
                                       
Effect of changes in exchange rates on cash
    (2.6 )     (2.2 )     0.2       1.7       1.2  
 
Net increase (decrease) in cash & cash equivalents
    (1,173.6 )     125.5       (36.2 )     (47.9 )     (203.8 )

 


 

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.

 


 

ASML — Reconciliation U.S. GAAP — IFRS1,4
Net income
                                 
    Three months ended,     Twelve months ended,  
(in thousands EUR)   Dec 31, 2007     Dec 31, 2008     Dec 31, 2007     Dec 31, 2008  
 
Net income under U.S. GAAP
    192,542       (88,024 )     671,001       322,370  
Share-based payments (see Note 1)
    (875 )     447       (582 )     (2,562 )
Capitalization of development costs (see Note 2)
    20,513       7,219       50,089       62,416  
Convertible subordinated notes (see Note 3)
                (6,661 )      
Income taxes (see Note 4)
    8,852       (2,279 )     1,204       (5,360 )
 
Net income under IFRS
    221,032       (82,637 )     715,051       376,864  
Shareholders’ equity
                                         
    Dec 31,     Mar 30,     Jun 29,     Sep 28,     Dec 31,  
(in thousands EUR)   2007     2008     2008     2008     2008  
 
Shareholders’ equity under U.S. GAAP
    1,891,004       1,958,159       2,060,575       2,122,848       1,988,769  
Share-based payments (see Note 1)
    787       (3,420 )     (3,266 )     (7,904 )     (6,539 )
Capitalization of development costs (see Note 2)
    138,424       157,900       176,818       193,780       201,717  
Income taxes (see Note 4)
    8,852       9,186       8,478       5,969       4,794  
 
Shareholders’ equity under IFRS
    2,039,067       2,121,825       2,242,605       2,314,693       2,188,741  
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, 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”. In accordance with 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. As of December 31, 2007 ASML has no Convertible Subordinated Notes outstanding.
Note 4 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 is eliminated from the carrying amount of assets on consolidation gives 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.
“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, product demand and semiconductor equipment industry capacity, worldwide demand and manufacturing capacity utilization for semiconductors (the principal product of our customer base), including the impact of credit market deterioration on consumer confidence and demand for our customers’ products, 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 conversion of our Subordinated Notes as such conversions would have a dilutive effect.
 
3   The calculation of diluted net income per ordinary share assumes the exercise of options issued under ASML stock option plans as such exercises would have a dilutive effect.
 
4   As of January 1, 2008 ASML accounts for award credits offered to its customers as part of a volume purchase agreement using the deferred revenue model. Until December 31, 2007 the cost accrual method was used. This change in accounting policy was made because the deferred revenue model better reflects the business rationale. In addition the International Financial Reporting Interpretation Committee concludes in interpretation 13 (IFRIC 13 “Customer Loyalty Programmes”) that the deferred revenue model is the appropriate accounting treatment. Comparative figures for 2007 were adjusted to reflect this change in accounting policy. The impact of this change on equity as per January 1, 2007 amounted to EUR 8.5 million (decrease) and on net income for the year 2007 and the first quarter of 2008 amounted to EUR 8.2 million (decrease) and EUR 0.1 million (increase) respectively.