EX-99 5 q1frs.htm EXHIBIT 99.3

Exhibit 99.3

ASML - Summary IFRS Consolidated Statements of Operations¹

 

 

 

Three months ended,

 

 

 

 

 

March 27, 2005

 

April 2, 2006

 

 

 

(Amounts in thousands EUR)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net system sales

 

632,135

 

553,101

 

 

 

Net service sales

 

52,545

 

76,289

 

 

 

Net sales

 

684,680

 

629,390

 

 

 

 

 

 

 

 

 

 

 

Cost of sales

 

414,404

 

383,330

 

 

 

Gross profit on sales

 

270,276

 

246,060

 

 

 

 

 

 

 

 

 

 

 

Research costs

 

70,330

 

68,203

 

 

 

Research credits

 

(5,472

)

(4,071

)

 

 

Selling, general and administrative expenses

 

52,188

 

50,239

 

 

 

Total expenses

 

117,046

 

114,371

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

153,230

 

131,689

 

 

 

 

 

 

 

 

 

 

 

Financial income/(expense), net

 

(12,046

)

(15,246

)

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

141,184

 

116,443

 

 

 

Provision for income taxes

 

(40,239

)

(31,604

)

 

 

Net income

 

100,945

 

84,839

 

 

 

 

ASML - Summary IFRS Consolidated Balance Sheets¹

 

 

 

March 27,

 

June 26,

 

Sep 25,

 

Dec 31,

 

April 2,

 

 

 

 

2005

 

2005

 

2005

 

2005

 

2006

 

 

(Amounts in thousands EUR)

 

 

 

 

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

1,319,651

 

1,544,078

 

1,699,763

 

1,904,609

 

1,671,065

 

 

Accounts receivable, net

 

483,898

 

485,352

 

403,489

 

302,572

 

447,401

 

 

Inventories, net

 

728,378

 

695,330

 

653,098

 

777,200

 

940,423

 

 

Other current assets

 

167,371

 

152,550

 

151,651

 

125,802

 

113,209

 

 

Total current assets

 

2,699,298

 

2,877,310

 

2,908,001

 

3,110,183

 

3,172,098

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deferred tax asset

 

264,291

 

254,833

 

238,519

 

282,833

 

275,493

 

 

Other assets

 

30,266

 

30,932

 

36,882

 

31,873

 

32,022

 

 

Intangible assets

 

45,882

 

69,519

 

85,986

 

98,545

 

114,109

 

 

Property, plant and equipment

 

310,316

 

306,919

 

292,799

 

278,581

 

278,114

 

 

Total assets

 

3,350,053

 

3,539,513

 

3,562,187

 

3,802,015

 

3,871,836

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

Current liabilities

 

764,334

 

775,356

 

764,040

 

1,392,099

 

1,365,383

 

 

Convertible subordinated bonds

 

708,059

 

749,169

 

758,034

 

320,584

 

324,248

 

 

Long term debt and deferred liabilities

 

310,062

 

326,365

 

299,341

 

268,361

 

267,820

 

 

Shareholders’ equity

 

1,567,598

 

1,688,623

 

1,740,772

 

1,820,971

 

1,914,385

 

 

Total liabilities and Shareholders’ equity

 

3,350,053

 

3,539,513

 

3,562,187

 

3,802,015

 

3,871,836

 

 

 

1.)

Except balance sheet data as of December 31, 2005 all figures are unaudited.

 

 



 

 

ASML - Summary IFRS Consolidated Statements of Cash Flows¹

 

 

 

Three months ended,

 

 

 

 

March 27, 2005

 

April 2, 2006

 

 

 

 

(Amounts in thousands EUR)

 

EUR

 

EUR

 

 

 

 

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

 

 

 

Net income

 

100,945

 

84,839

 

 

 

 

Depreciation and amortization

 

23,248

 

26,882

 

 

 

 

Change in tax assets and liabilities

 

76,685

 

(52,133

)

 

 

 

Change in assets and liabilities

 

(79,755

)

(256,279

)

 

 

 

Net cash provided by (used in) operating

 

 

 

 

 

 

 

 

activities

 

121,123

 

(196,691

)

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

 

 

 

 

Capital expenditures

 

(40,017

)

(39,264

)

 

 

 

Disposals

 

1,510

 

693

 

 

 

 

Net cash used in investing activities

 

(38,507

)

(38,571

)

 

 

 

Net cash provided by (used in) operating and

 

 

 

 

 

 

 

 

investing activities

 

82,616

 

(235,262

)

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

 

 

 

Redemption and/or repayment of loans

 

(282

)

(310

)

 

 

 

Proceeds from share issuance

 

2,250

 

7,858

 

 

 

 

Net cash provided by financing activities

 

1,968

 

7,548

 

 

 

 

Net cash flow

 

84,584

 

(227,714

)

 

 

 

Effect of changes in exchange rates on cash

 

6,937

 

(5,830

)

 

 

 

Net increase (decrease) in cash and

 

 

 

 

 

 

 

 

cash equivalents

 

91,521

 

(233,544

)

 

 

 

 

ASML - Quarterly Summary IFRS Consolidated Statements of Operations¹

 

 

 

Three months ended,

 

 

March 27,

 

June 26,

 

Sep 25,

 

Dec 31,

 

April 2,

 

 

 

2005

 

2005

 

2005

 

2005

 

2006

 

(Amounts in millions EUR)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net system sales

 

632.1

 

680.6

 

459.0

 

456.0

 

553.1

 

Net service sales

 

52.6

 

82.7

 

74.2

 

91.9

 

76.3

 

Net sales

 

684.7

 

763.3

 

533.2

 

547.9

 

629.4

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of sales

 

414.4

 

467.3

 

343.3

 

358.3

 

383.3

 

Gross profit on sales

 

270.3

 

296.0

 

189.9

 

189.6

 

246.1

 

 

 

 

 

 

 

 

 

 

 

 

 

Research costs, net of credits

 

64.9

 

54.8

 

55.3

 

55.6

 

64.1

 

Selling, general and administrative expenses

 

52.2

 

55.8

 

49.1

 

48.1

 

50.3

 

Total expenses

 

117.1

 

110.6

 

104.4

 

103.7

 

114.4

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

153.2

 

185.4

 

85.5

 

85.9

 

131.7

 

Financial income/(expense), net

 

(12.0

)

(11.5

)

(14.2

)

(11.7

)

(15.3

)

Income before Income taxes

 

141.2

 

173.9

 

71.3

 

74.2

 

116.4

 

Provision for income taxes

 

(40.3

)

(50.9

)

(19.7

)

(16.9

)

(31.6

)

Net income

 

100.9

 

123.0

 

51.6

 

57.3

 

84.8

 

 

 



 

 

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 accompanying consolidated financial statements include the accounts of ASML Holding N.V. and all of its majority-owned subsidiaries. All inter-company profits, transactions and balances have been eliminated in the consolidation.

 

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; the 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 the revenue 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.

 

The fair value of installation services provided to the customers is initially deferred and is recognized when the installation is completed. Sales from service contracts are recognized when performed. Revenue from prepaid service contracts is recognized over the life of the contract.

 

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.

 

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,

 

 

 

 

 

 

 

March 27, 2005

 

April 2, 2006

 

 

 

 

 

(Amounts in thousands EUR)

 

 

 

 

 

 

 

 

 

Net income under U.S. GAAP

 

100,262

 

80,034

 

 

 

 

 

Share Based Payments (see Note 1)

 

(5,866

)

309

 

 

 

 

 

Capitalization of development costs (see Note 2)

 

11,036

 

12,186

 

 

 

 

 

Convertible bonds (see Note 3)

 

(4,487

)

(7,690

)

 

 

 

 

Net income under IFRS

 

100,945

 

84,839

 

 

 

 

 

 

 

Shareholders’ Equity

 

 

 

March 27,

 

June 26,

 

Sep 25,

 

Dec 31,

 

April 2,

 

 

 

 

2005

 

2005

 

2005

 

2005

 

2006

 

 

(Amounts in thousands EUR)

 

 

 

 

 

 

 

 

 

 

 

 

Shareholders’ equity under U.S. GAAP

 

1,482,661

 

1,590,510

 

1,636,767

 

1,711,837

 

1,800,394

 

 

Share Based Payments (see Note 1)

 

2,152

 

2,325

 

2,492

 

2,100

 

2,460

 

 

Capitalization of development costs (see Note 2)

 

11,035

 

28,628

 

41,310

 

51,815

 

64,002

 

 

Convertible subordinated bonds (see Note 3)

 

71,750

 

67,160

 

60,203

 

55,219

 

47,529

 

 

Shareholders’ equity under IFRS

 

1,567,598

 

1,688,623

 

1,740,772

 

1,820,971

 

1,914,385

 

 

 

 

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 provides 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) “Accounting for Stock-Based Compensation” which is a revision of SFAS no.123. Under SFAS no. 123(R) ASML records as an expense the fair value of its share based payments granted after January 1, 2006 and unvested share based payments granted prior to January 1, 2006.

 

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. The equity component relates to the grant of a conversion option to shares to the holder of the bond. The liability component creates a financial liability that is measured at amortized cost which results in additional interest charges.

 

 



 

 

Under U.S. GAAP, ASML accounts for its convertible bonds as a liability at the principal amount outstanding.

 

“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.