EX-99.3 4 u07716exv99w3.htm EX-99.3 exv99w3
Exhibit 99.3
ASML — Summary U.S. GAAP Consolidated Statements of Operations 1
                                 
    Three months ended,   Nine months ended,
(in thousands EUR, except per share data)   Sep 28, 2008   Sep 27, 2009   Sep 28, 2008   Sep 27, 2009
 
 
                               
Net system sales
    590,723       458,691       2,136,296       743,050  
Net service and field option sales
    105,770       96,581       323,562       272,447  
 
Total net sales
    696,493       555,272       2,459,858       1,015,497  
 
                               
Cost of sales
    431,062       364,013       1,483,334       777,438  
 
Gross profit on sales
    265,431       191,259       976,524       238,059  
 
                               
Research and development costs, net of credits
    130,157       115,166       388,657       351,371  
Selling, general and administrative costs
    51,933       37,537       165,628       119,510  
 
Income (loss) from operations
    83,341       38,556       422,239       (232,822 )
 
                               
Interest income (expense)
    7,059       (2,383 )     17,633       (3,652 )
 
Income (loss) from operations before income taxes
    90,400       36,173       439,872       (236,474 )
 
                               
(Provision for) benefit from income taxes
    (17,106 )     (16,434 )     (29,478 )     35,069  
 
Net income (loss)
    73,294       19,739       410,394       (201,405 )
 
                               
Basic net income (loss) per ordinary share
    0.17       0.05       0.95       (0.47 )
Diluted net income (loss) per ordinary share2
    0.17       0.05       0.94       (0.47 )
 
                               
Number of ordinary shares used in computing per share amounts (in thousands):
                               
Basic
    431,672       432,675       431,498       432,414  
Diluted 2
    434,491       434,975       434,859       432,414  
ASML — Ratios and Other Data 1
                                 
    Three months ended,   Nine months ended,
    Sep 28, 2008   Sep 27, 2009   Sep 28, 2008   Sep 27, 2009
 
 
 
                               
Gross profit as a % of net sales
    38.1       34.4       39.7       23.4  
Income (loss) from operations as a % of net sales
    12.0       6.9       17.2       (22.9 )
Net income (loss) as a % of net sales
    10.5       3.6       16.7       (19.8 )
Shareholders’ equity as a % of total assets
    50.3       47.8       50.3       47.8  
Income taxes as a % of income before income taxes
    (18.9 )     (45.4 )     (6.7 )     (14.8 )
Sales of systems (in units)
    37       24       126       45  
ASP of systems sales (EUR million)
    16.0       19.1       17.0       16.5  
Value of backlog systems (EUR million)
    1,028       1,353       1,028       1,353  
Backlog systems (in units)
    53       54       53       54  
ASP of backlog systems (EUR million)
    19.4       25.1       19.4       25.1  
Value of booked systems (EUR million)
    498       777       1,443       1,378  
Net bookings (in units)
    31       35       90       58  
ASP of booked systems (EUR million)
    16.1       22.2       16.0       23.8  
Number of payroll employees in FTEs
    6,907       6,529       6,907       6,529  
Number of temporary employees in FTEs
    1,610       917       1,610       917  

 


 

ASML — Summary U.S. GAAP Consolidated Balance Sheets 1
                 
(in thousands EUR)   Dec 31, 2008   Sep 27, 2009
 
 
               
ASSETS
               
 
Cash and cash equivalents
    1,109,184       1,018,028  
Accounts receivable, net
    463,273       382,065  
Finance receivables, net
    6,225       21,151  
Current tax assets
    87,560        
Inventories, net
    999,150       882,369  
Deferred tax assets
    71,780       68,962  
Other assets
    236,077       224,240  
 
Total current assets
    2,973,249       2,596,815  
 
               
Finance receivables, net
    31,030        
Deferred tax assets
    148,133       193,466  
Other assets
    88,197       68,061  
Goodwill
    131,453       128,595  
Other intangible assets, net
    26,692       19,037  
Property, plant and equipment, net
    540,640       561,684  
 
Total non-current assets
    966,145       970,843  
 
               
Total assets
    3,939,394       3,567,658  
 
               
LIABILITIES AND SHAREHOLDERS’ EQUITY
               
 
               
Current liabilities
    1,008,343       949,273  
 
               
Long-term debt
    647,050       660,191  
Deferred and other tax liabilities
    209,699       193,708  
Provisions
    15,495       13,506  
Accrued liabilities and other liabilities
    70,038       44,709  
 
Total non-current liabilities
    942,282       912,114  
 
               
 
Total liabilities
    1,950,625       1,861,387  
 
               
Shareholders’ equity
    1,988,769       1,706,271  
 
Total liabilities and shareholders’ equity
    3,939,394       3,567,658  

 


 

ASML — Summary U.S. GAAP Consolidated Statements of Cash Flows 1
                                 
    Three months ended,   Nine months ended,
(in thousands EUR)   Sep 28, 2008   Sep 27, 2009   Sep 28, 2008   Sep 27, 2009
 
 
                               
CASH FLOWS FROM OPERATING ACTIVITIES
                               
 
                               
Net income (loss)
    73,294       19,739       410,394       (201,405 )
 
                               
Depreciation and amortization
    28,625       39,302       84,102       108,838  
Impairment
    552       9,050       2,196       16,029  
Loss on disposals of property, plant and equipment
    1,413       859       3,827       3,037  
Share-based payments
    3,686       2,786       10,362       8,879  
Allowance for doubtful debts
    (206 )     672       (313 )     1,836  
Allowance for obsolete inventory
    21,295       20,840       53,851       86,872  
Deferred income taxes
    2,421       (4,461 )     (31,447 )     (62,695 )
Change in assets and liabilities
    (110,227 )     (154,188 )     (114,790 )     117,324  
 
Net cash provided by (used in) operating activities
    20,853       (65,401 )     418,182       78,715  
 
                               
CASH FLOWS FROM INVESTING ACTIVITIES
                               
 
                               
Purchases of property, plant and equipment
    (68,237 )     (13,511 )     (188,710 )     (97,267 )
Proceeds from sale of property, plant and equipment
                      6,877  
Purchases of intangible assets
    (35 )           (35 )      
 
Net cash used in financing activities
    (68,272 )     (13,511 )     (188,745 )     (90,390 )
 
                               
CASH FLOWS FROM FINANCING ACTIVITIES
                               
 
                               
Dividend paid
    (394 )           (107,841 )     (86,486 )
Purchase of shares in conjunction with share-based payment plans
                (87,605 )      
Net proceeds from issuance of shares and stock options
    1,439       4,183       4,966       4,714  
Excess tax benefits (deficiencies) from stock options
    (1,946 )     715       4,027       963  
Net proceeds from other long-term debt
                      32  
Redemption and/or repayment of debt
    (1,280 )     (4 )     (1,280 )     (13 )
 
Net cash provided by (used in) financing activities
    (2,181 )     4,894       (187,733 )     (80,790 )
 
                               
 
Net cash flows
    (49,600 )     (74,018 )     41,704       (92,465 )
 
                               
Effect of changes in exchange rates on cash
    1,695       (614 )     (347 )     1,309  
 
Net increase (decrease) in cash & cash equivalents
    (47,905 )     (74,632 )     41,357       (91,156 )

 


 

ASML — Quarterly Summary U.S. GAAP Consolidated Statements of Operations 1
                                         
    Three months ended,              
    Sep 28,     Dec 31,     Mar 29,     Jun 28,     Sep 27,  
(in millions EUR, except per share data)   2008     2008     2009     2009     2009  
 
 
                                       
Net system sales
    590.7       380.5       101.1       183.3       458.7  
Net service and field option sales
    105.8       113.3       82.5       93.3       96.6  
 
Total net sales
    696.5       493.8       183.6       276.6       555.3  
 
                                       
Cost of sales
    431.1       454.8       171.2       242.2       364.0  
 
Gross profit on sales
    265.4       39.0       12.4       34.4       191.3  
 
                                       
Research and development costs, net of credits
    130.2       127.5       118.3       117.9       115.2  
Selling, general and administrative costs
    51.9       46.7       41.0       41.0       37.5  
 
Income (loss) from operations
    83.3       (135.2 )     (146.9 )     (124.5 )     38.6  
 
                                       
Interest income (expense)
    7.1       5.0       (1.1 )     (0.2 )     (2.4 )
 
Income (loss) from operations before income taxes
    90.4       (130.2 )     (148.0 )     (124.7 )     36.2  
 
                                       
(Provision for) benefit from income taxes
    (17.1 )     42.2       30.8       20.7       (16.5 )
 
Net income (loss)
    73.3       (88.0 )     (117.2 )     (104.0 )     19.7  
 
                                       
Basic net income (loss) per ordinary share
    0.17       (0.20 )     (0.27 )     (0.24 )     0.05  
Diluted net income (loss) per ordinary share 2
    0.17       (0.20 )     (0.27 )     (0.24 )     0.05  
 
                                       
Number of ordinary shares used in computing per share amounts (in thousands):
                                       
Basic
    431,672       431,989       432,112       432,454       432,675  
Diluted 2
    434,491       431,989       432,112       432,454       434,975  
ASML — Quarterly Summary Ratios and other data 1
                                         
    Three months ended,              
    Sep 28,     Dec 31,     Mar 29,     Jun 28,     Sep 27,  
    2008     2008     2009     2009     2009  
 
 
                                       
Gross profit as a % of net sales
    38.1       7.9       6.7       12.5       34.4  
Income (loss) from operations as a % of net sales
    12.0       (27.4 )     (80.0 )     (45.0 )     6.9  
Net income (loss) as a % of net sales
    10.5       (17.8 )     (63.8 )     (37.6 )     3.6  
Shareholders’ equity as a % of total assets
    50.3       50.5       48.0       47.7       47.8  
Income taxes as a % of income before income taxes
    (18.9 )     (32.4 )     (20.8 )     (16.6 )     (45.4 )
Sales of systems (in units)
    37       25       11       10       24  
ASP of system sales (EUR million)
    16.0       15.2       9.2       18.3       19.1  
Value of backlog systems (EUR million)
    1,028       755       853       1,064       1,353  
Backlog systems (in units)
    53       41       38       43       54  
ASP of backlog systems (EUR million)
    19.4       18.4       22.4       24.7       25.1  
Value of booked systems (EUR million)
    498       127       207       394       777  
Net bookings (in units)
    31       13       8       15       35  
ASP of booked systems (EUR million)
    16.1       9.8       25.8       26.3       22.2  
Number of payroll employees in FTEs
    6,907       6,930       6,715       6,597       6,529  
Number of temporary employees in FTEs
    1,610       1,329       959       868       917  

 


 

ASML — Summary U.S. GAAP Consolidated Balance Sheets 1
                                         
    Sep 28,     Dec 31,     Mar 29,     Jun 28,     Sep 27,  
(in millions EUR)   2008     2008     2009     2009     2009  
 
 
                                       
ASSETS
                                       
Cash and cash equivalents
    1,313.0       1,109.2       1,151.0       1,092.7       1,018.0  
Accounts receivable, net
    536.1       463.3       291.6       213.5       382.1  
Finance receivables, net
    7.4       6.2       6.2       0.1       21.1  
Current tax assets
          87.6                    
Inventories, net
    1,134.0       999.1       936.8       926.1       882.4  
Deferred tax assets
    82.8       71.8       74.9       70.5       69.0  
Other assets
    261.4       236.1       240.6       220.2       224.2  
 
Total current assets
    3,334.7       2,973.3       2,701.1       2,523.1       2,596.8  
 
                                       
Finance receivables, net
    30.7       31.0       29.2       20.6        
Deferred tax assets
    139.4       148.1       173.2       198.9       193.5  
Other assets
    50.6       88.2       89.5       53.8       68.1  
Goodwill
    129.2       131.5       139.7       134.5       128.6  
Other intangible assets, net
    28.8       26.7       25.6       22.3       19.0  
Property, plant and equipment, net
    503.1       540.6       586.6       591.9       561.7  
 
Total non-current assets
    881.8       966.1       1,043.8       1,022.0       970.9  
 
                                       
Total assets
    4,216.5       3,939.4       3,744.9       3,545.1       3,567.7  
 
                                       
LIABILITIES AND SHAREHOLDERS’ EQUITY
                                       
Current liabilities
    1,273.0       1,008.3       1,017.5       940.9       949.3  
 
                                       
Long-term debt
    596.7       647.1       661.4       651.9       660.2  
Deferred and other tax liabilities
    215.2       209.7       204.9       200.6       193.7  
Provisions
          15.5       16.9       14.8       13.5  
Accrued liabilities and other liabilities
    8.8       70.0       48.2       45.6       44.7  
 
Total non-current liabilities
    820.7       942.3       931.4       912.9       912.1  
 
Total liabilities
    2,093.7       1,950.6       1,948.9       1,853.8       1,861.4  
 
                                       
Shareholders’ equity
    2,122.8       1,988.8       1,796.0       1,691.3       1,706.3  
 
Total liabilities and shareholders’ equity
    4,216.5       3,939.4       3,744.9       3,545.1       3,567.7  

 


 

ASML — Summary U.S. GAAP Consolidated Statements of Cash Flows 1
                                         
    Three months ended,              
    Sep 28,     Dec 31,     Mar 29,     Jun 28,     Sep 27,  
(in millions EUR)   2008     2008     2009     2009     2009  
 
 
                                       
CASH FLOWS FROM OPERATING ACTIVITIES
                                       
Net income (loss)
    73.3       (88.0 )     (117.2 )     (104.0 )     19.7  
 
                                       
Depreciation and amortization
    28.6       35.1       37.9       31.6       39.3  
Impairment
    0.6       22.9       2.6       4.4       9.1  
Loss (gain) on disposals of property, plant and equipment
    1.4       0.4       2.6       (0.4 )     0.9  
Share-based payments
    3.7       3.2       3.5       2.6       2.8  
Allowance for doubtful debts
    (0.2 )     0.5             1.2       0.7  
Allowance for obsolete inventory
    21.3       85.8       22.1       43.9       20.8  
Deferred income taxes
    2.4       (2.7 )     (27.0 )     (31.2 )     (4.5 )
Change in assets and liabilities
    (110.2 )     (194.6 )     157.7       113.8       (154.2 )
 
Net cash provided by (used in) operating activities
    20.9       (137.4 )     82.2       61.9       (65.4 )
 
                                       
CASH FLOWS FROM INVESTING ACTIVITIES
                                       
Purchases of property, plant and equipment
    (68.3 )     (71.1 )     (43.9 )     (39.9 )     (13.5 )
Proceeds from sale of property, plant and equipment
                1.2       5.7        
 
Net cash used in investing activities
    (68.3 )     (71.1 )     (42.7 )     (34.2 )     (13.5 )
 
                                       
CASH FLOWS FROM FINANCING ACTIVITIES
                                       
Dividend paid
    (0.4 )                 (86.5 )      
Net proceeds from issuance of shares and stock options
    1.4       6.5       0.1       0.4       4.2  
Excess tax benefits (deficiencies) from stock options
    (1.9 )     (1.9 )     (0.2 )     0.5       0.7  
Net proceeds from other long-term debt
                      0.1        
Redemption and/or repayment of debt
    (1.3 )     (1.1 )                  
 
Net cash provided by (used in) financing activities
    (2.2 )     3.5       (0.1 )     (85.5 )     4.9  
 
Net cash flows
    (49.6 )     (205.0 )     39.4       (57.8 )     (74.0 )
 
                                       
Effect of changes in exchange rates on cash
    1.7       1.2       2.4       (0.5 )     (0.7 )
 
Net increase (decrease) in cash & cash equivalents
    (47.9 )     (203.8 )     41.8       (58.3 )     (74.7 )

 


 

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.
Foreign currency risk management
The Company uses the euro as its invoicing currency in order to limit the exposure to foreign currency movements. Exceptions may occur on a customer by customer basis. To the extent that invoicing is done in a currency other than the euro, the Company is exposed to foreign currency risk.
It is the Company’s policy to hedge material transaction exposures, such as sales transactions and forecasted purchase transactions. The Company hedges these exposures through the use of foreign exchange options and forward contracts. The use of a mix of foreign exchange options and forward contracts is aimed at reflecting the likelihood of the transactions occurring.

 


 

It is the Company’s policy to hedge material remeasurement exposures. These net exposures from certain monetary assets and liabilities in non-functional currencies are hedged with forward contracts.
As of September 27, 2009 EUR 39.8 million loss is classified as other comprehensive income, net of taxes, representing the total anticipated loss to be charged to net sales, and EUR 0.9 million loss representing the total anticipated loss to be released to cost of sales when the forecasted revenue and purchase transactions occur.
ASML — Reconciliation U.S. GAAP — IFRS 1
                                         
Net income   Three months ended,   Nine months ended,        
(in thousands EUR)   Sep 28, 2008   Sep 27, 2009   Sep 28, 2008   Sep 27, 2009        
 
Net income (loss) under U.S. GAAP
    73,294       19,739       410,394       (201,405 )        
Share-based payments (see Note 1)
    (2,492 )     1,415       (3,009 )     2,311          
Capitalization of development costs (see Note 2)
    14,867       24,504       55,197       57,779          
Reversal of write-downs (see Note 3)
          28,509             28,509          
Income taxes (see Note 4)
    (3,119 )     (1,350 )     (3,081 )     (3,407 )        
 
Net income (loss) under IFRS
    82,550       72,817       459,501       (116,213 )        
                                         
Shareholders’ equity   Sep 28,     Dec 31,     Mar 29,     Jun 28,     Sep 27,  
(in thousands EUR)   2008     2008     2009     2009     2009  
 
Shareholders’ equity under U.S. GAAP
    2,122,848       1,988,769       1,795,951       1,691,240       1,706,271  
Share-based payments (see Note 1)
    (7,904 )     (6,537 )     (7,088 )     (4,918 )     (460 )
Capitalization of development costs (see Note 2)
    193,780       201,717       215,452       235,945       259,665  
Reversal of write-downs (see Note 3)
                            28,509  
Income taxes (see Note 4)
    5,969       4,794       3,361       2,797       1,370  
 
Shareholders’ equity under IFRS
    2,314,693       2,188,743       2,007,676       1,925,064       1,995,355  
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 and stock granted to its employees after November 7, 2002. Under IFRS, at period end a deferred tax asset is computed on the basis of the tax deduction for the share-based payments under the applicable tax law and is recognized to the extent it is probable that future taxable profit will be available against which these deductible temporary differences will be utilized. Therefore, changes in the Company’s share price do affect the deferred tax asset at period-end and result in adjustments to the deferred tax asset.
As of January 1, 2006, ASML applies ASC 718 “Share-Based Payment” which 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. ASC 718’s general principle is that a deferred tax asset is established as the Company recognizes compensation costs for commercial purposes for awards that are expected to result in a tax deduction under existing tax law. Under U.S. GAAP, the deferred tax recorded on share-based compensation is computed on the basis of the expense recognized in the financial statements.

 


 

Therefore, changes in the Company’s share price do not affect the deferred tax asset recorded in the Company’s financial statements.
Note 2 Capitalization of development costs
Under IFRS, ASML applies IAS 38, “Intangible Assets”. In accordance with IAS 38, ASML capitalizes certain development expenditures which are amortized over the expected useful life of the related product generally ranging between one and three years. Amortization starts when the developed product is ready for volume production. In 2008, we recognized an impairment charge for an amount of EUR 18.3 million.
Under U.S. GAAP, ASML applies ASC 730, “Accounting for Research and Development Costs”. In accordance with ASC 730, ASML charges costs relating to research and development to operating expense as incurred.
Note 3 Reversal of write-downs
Under IFRS, ASML applies IAS 2 (revised), “Inventories”. In accordance with IAS 2, reversal of a prior period write-down as a result of a subsequent increase in value of inventory should be recognized in the period in which the value increase occurs.
Under U.S. GAAP, ASML applies ASC 330 Inventory. In accordance with ASC 330 reversal of a write-down is prohibited as a write-down creates a new cost basis.
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 are eliminated from the carrying amount of assets in consolidation, give rise to a temporary difference for which deferred taxes must be recognized in 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 in consolidation, give rise to a temporary difference for which prepaid taxes must be recognized in consolidation. Contrary to IFRS, the prepaid taxes under U.S. GAAP are calculated based on the tax rate applicable in the seller’s rather than the purchaser’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 selling 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 the exercise of options issued under ASML stock option plans for periods in which exercises would have a dilutive effect, the calculation of diluted net income per ordinary share does not assume exercise of such options when such exercises would be antidilutive.