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ASML HOLDING N.V. (Registrant)

Date: March 7, 2007

/s/ Peter T.F.M. Wennink

Peter T.F.M. Wennink
Executive Vice President
and Chief Financial Officer

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

REPORT OF A FOREIGN ISSUER
PURSUANT TO RULE 13A-16 OR 15D-16
OF THE SECURITIES EXCHANGE ACT OF 1934
For February 2007

ASML Holding N.V.

De Run 6501
5504 DR Veldhoven
The Netherlands
(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form
20-F or Form 40-F.

Form 20-F þ Form 40-F o

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes o No þ

If “Yes’’ is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b):

TABLE OF CONTENTS


SIGNATURES
Exhibit 99.1
Exhibit 99.2
Exhibit 99.3
Exhibit 99.4
Exhibit 99.5
Exhibit 99.6
Exhibit 99.7
Exhibit-99.8
Exhibit 99.9
Exhibit 99.10
Exhibit 99.11


Exhibits

99.1		ASML Statutory Annual Report 2006

99.2		“ASML — A strong company on a growth trajectory” (Thomas Weisel Partners Technology Conference 2007) presentation dated February 6, 2007

99.3		“ASML Continues Share Buyback Program” press release dated February 14, 2007

99.4		“ASML Announces Update of its Share Buyback Program” press release dated February 20, 2007

99.5		“ASML — A strong company on a growth trajectory” (Bank of America 2007 Technology Conference) presentation dated February 21, 2007

99.6		“ASML Sets Two New Lithography Milestones At SPIE” press release dated February 26, 2007

99.7		“ASML Completes its Share Buyback Program” press release dated February 27, 2007

99.8		Announcement of i) the retirement by rotation of a member of the Supervisory Board of ASML Holding N.V. and ii) the nomination for appointment of a member of the Supervisory Board

99.9		Agenda for the Annual General Meeting of Shareholders of ASML Holding N.V. to be held on March 28, 2007

99.10		Explanatory Notes to the Agenda for the Annual General Meeting of Shareholders of ASML Holding N.V. to be held on March 28, 2007

99.11		Proposal to Amend the Articles of Association

“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 industry capacity, 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 filings with the U.S. Securities and Exchange Commission.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Eric Meurice (1956)

President, Chief Executive Officer and

Chairman of the Board of Management

Peter T.F.M. Wennink (1957)

Executive Vice President and Chief Financial Officer

Martin A. van den Brink (1957)

Executive Vice President Marketing & Technology

K.P. Fuchs (1958)

Executive Vice President Operations

ASML STATUTORY ANNUAL REPORT 2006

Henk Bodt (1938)

Former Executive Vice President of Royal Philips Electronics N.V.

First appointed 1995

Current term until 2007

OB Bilous (1938)

Former General Manager and

VP Worldwide Manufacturing of IBM’s Microelectronics Division

First appointed 2005

Current term until 2009

American nationality

Ieke C.J. van den Burg (1952)

Member of the European Parliament

First appointed 2005

Current term until 2009

Jan A. Dekker (1939)

Former Chief Executive Officer of TNO

First appointed 1997

Current term until 2009

Fritz W. Fröhlich (1942)

Former Deputy Chairman and

Chief Financial Officer of Akzo Nobel N.V.

First appointed 2004

Current term until 2008

Arthur P.M. van der Poel (1948)

Former Chief Executive Officer of Philips Semiconductors

First appointed 2004

Current term until 2008

Jos W.B. Westerburgen (1942)

Former Company Secretary and Head of Tax of Unilever

First appointed 2002

Current term until 2009

ASML STATUTORY ANNUAL REPORT 2006

Report of the Supervisory Board

The Supervisory Board has reviewed the Statutory Annual Report of ASML Holding N.V. (“ASML” or the “Company”) for the financial year 2006, as prepared by the Board of Management and included in this Annual Report. Deloitte has duly examined the Company’s financial statements, and their Independent Auditors’ Report is included in the Statutory Financial Statements.

The Board of Management of ASML is responsible for the management of the Company. It is the responsibility of the Supervisory Board to supervise the policies of the Board of Management and the general course of affairs in the Company. In addition, the Supervisory Board supports the Board of Management with its advice.

During 2006, ASML reconfirmed its strong position in the global market for semiconductor lithography systems. The Company improved its operating and financial performance, while achieving best-in-class operating margins, solid earnings and a well-capitalized balance sheet. ASML also maintained its technology leadership and increased its market share. ASML management and employees around the world worked during 2006 to adapt to the cyclicality of the world market for semiconductor lithography systems.

On June 23, 2006, the prestigious King Willem I Prize was awarded to ASML. It is awarded once every two years to one company whose performance defines enterprise in the Netherlands. This prize highlights ASML’s commitment to research and development, and it recognizes the company’s track record as an innovation champion both nationally and internationally. ASML views this special award as a tribute to all employees for their excellent work overall and their world-beating creative contributions in particular.

During 2006, the Supervisory Board continued to monitor investors’ and analysts’ opinions regarding ASML. We value the views of investors and analysts about ASML and encourage regular communication with and feedback from investors and analysts, consistent with fair disclosure principles.

In 2006, the Supervisory Board’s principal focus was on ASML’s corporate and technology strategy. The Supervisory Board conducted ongoing discussions regarding corporate governance and the application of corporate governance rules within the Company. We continue to strive for compliance so that benefits of corporate governance outweigh its burdens. For example, corporate governance requirements have helped to strengthen the Company’s cycle of risk management throughout 2006.

The Supervisory Board has interacted intensely with the Board of Management during 2006 through scheduled meetings, regular reports and timely consultations and conference calls. The Supervisory Board also supervises the Company’s activities and results through a structured approach of four committees: Audit; Remuneration; Selection and Nomination; and Technology and Strategy.

Participating actively in committee work, Supervisory Board members not only build understanding of the business of the Company but we also extend our reach into the senior ranks of ASML, gaining insights and deepening our comprehension of the organization’s culture. For example, the Technology and Strategy Committee reviewed specific ASML technology matters during 2006 together with the Company’s experts. This practice further reinforces understanding of ASML technology matters by the full Supervisory Board and enables us to supervise the strategic choices facing ASML, including the Company’s aggressive investment in research and development.

Outcomes of the four committee meetings are reviewed in plenary meetings of the Supervisory Board. Doing so enables members of different committees to contribute their findings and conclusions in full forums.

During 2006, we reviewed the Company’s business strategy to maintain and strengthen technology leadership in semiconductor lithography, while ASML continues to deliver superior value of ownership for customers. We also assess and advocate appropriate measures to ensure that ASML continues to achieve top financial performance in its market and compared with peers.

ASML STATUTORY ANNUAL REPORT 2006

The Supervisory Board continued to grow its familiarity with customers’ needs in 2006, their prospective needs for semiconductor manufacturing in the various market segments, their views of existing technologies as well as next generation lithography such as Extreme Ultra Violet (EUV).

In the Netherlands, we benefit from our continued collaboration with the Works Council. We value their cooperation, dedication and professionalism.

On December 19, 2006, ASML and Brion Technologies, Inc. announced an agreement, pending regulatory approvals, for ASML to acquire privately held Brion, a leading provider of semiconductor design and wafer manufacturing optimization solutions for advanced lithography. Founded in 2002 and based in Santa Clara, California, Brion is a leader in the rapidly growing field of computational lithography, which involves proprietary software and hardware for simulation of wafer manufacturing. ASML believes that the acquisition can create significant value for customers: Brion and ASML are leaders in different but highly complementary technologies that can enhance further the efficiency of semiconductor manufacturing.

Independent members of the Supervisory Board

Like many public companies in the Netherlands, the Company has a two-tier board structure where independent, non-executive members serve on the Supervisory Board, which in turn supervises and advises the members of the Board of Management in performing its management tasks. Supervisory Board members are prohibited from serving as officers or employees of the Company. The Supervisory Board considers all current members of the Company’s Supervisory Board to be independent in accordance with the criteria of the Netherlands Corporate Governance Code (the “Code”).

Corporate governance

We reiterate that compliance with requirements for corporate governance and effective internal controls are central to the past, present and future success of ASML. It reinforces the reliability and integrity of the Company’s financial reporting and other disclosures.

The Supervisory Board assists and supports the Board of Management in its continuing efforts to ensure that the Company’s practices and procedures reflect good corporate governance and comply with applicable corporate governance requirements under U.S. and Netherlands law, the rules of Euronext Amsterdam and the Nasdaq Global Select Market, and associated best practices.

A more detailed description on corporate governance appears in the Corporate Governance Chapter of the Annual Report.

Meetings of the Supervisory Board

The Supervisory Board held six formal meetings in 2006. No single member has been absent frequently from meetings. During various meetings, the Supervisory Board discussed ASML’s corporate and technology strategy, business risks, budget, corporate targets and intellectual property strategy, among other matters.

Members of the Supervisory Board also held two regular meetings with the Works Council in the Netherlands during 2006. Our relationship with the Works Council is characterized by continuous cooperation and professionalism.

The Supervisory Board met once without the Board of Management being present to discuss the composition of the Supervisory Board, the functioning of the Supervisory Board and its individual members, the relationship with the Board of Management, the performance and composition of the Board of Management as well as performance and succession of its individual members, among other matters. Proper feedback has been given to the Board of Management concerning the aforementioned meeting.

In addition to their regularly scheduled meetings, in 2006 there were ad hoc meetings and conference calls by several Supervisory Board members on specific topics and frequent consultations between the Supervisory Board and the Board of Management.

ASML STATUTORY ANNUAL REPORT 2006

Composition of the Supervisory Board

Mr. P. Grassmann and Mr. J. Dekker retired by rotation on March 23, 2006 and Mr. J. Dekker was reappointed. We express our gratitude to Mr. Grassmann for his excellent contribution during the past years. Mr. H. Bodt will retire by rotation on March 28, 2007.

In 2006, the Works Council had the enhanced right to make a recommendation for the appointment of one member of the Supervisory Board. The Works Council and the Supervisory Board agreed that the appointment of this member will be on the agenda of the General Meeting of Shareholders, to be held on March 28, 2007.

For further details and biographies of the current members of the Supervisory Board, see Item 6.A. of the Annual Report on Form 20-F. For further details on the board practices of the Supervisory Board, see Item 6.C. of the Annual Report on Form 20-F and the Corporate Governance Chapter of the Statutory Annual Report.

Supervisory Board Committees

The Supervisory Board has an Audit Committee, Remuneration Committee, Selection and Nomination Committee, and Technology and Strategy Committee. Members of these committees are appointed from the Supervisory Board members.

For a further description of the responsibilities of the committees of the Supervisory Board, see Item 6.C. of the Annual Report on Form 20-F and the Corporate Governance Chapter of the Statutory Annual Report.

In 2006, the Audit Committee met six times. The current members of our Audit Committee are Mr. F. Fröhlich (Chairman), Mr. H. Bodt and Mr. J. Dekker. The members of the Audit Committee are all independent, non-executive members of the Supervisory Board.

During 2006, the main subjects of the meetings of the Audit Committee were the review of ASML’s quarterly earnings announcements and audited annual consolidated financial statements (special attention was given to Section 404 of the Sarbanes-Oxley Act of 2002, particularly on the status, progress and gaps to be addressed in connection with the review and attestation of ASML’s internal controls over financial reporting); discussions on the internal control and risk management systems and related audit findings; approval of the external audit plan and related audit and fees; review of the audit and non-audit fees paid to the Company’s external auditor; review of the audit activities of the Company’s external and internal auditor; review of the external auditor’s management letter; discussions on tax planning and investor relations, and regular updates on the discussions of the Company’s Disclosure Committee. Also, the implications surrounding the new regulations with regard to the disclosure of price sensitive information and the supervision of and relationship with the Netherlands Authority for the Financial Markets (Autoriteit Financiële Markten, the “AFM”) were frequently discussed.

Remuneration Committee

In 2006, the Remuneration Committee held five scheduled regular meetings. The current members of our Remuneration Committee are Mr. J. Westerburgen (Chairman), Mr. H. Bodt and Ms. H. van den Burg.

During 2006, the main subjects of the meetings of the Remuneration Committee were the finalization of the Remuneration Policy 2006, the remuneration of ASML’s Board of Management and discussions on ASML’s Stock based Equity Plans for 2006 and 2007.

Selection and Nomination Committee

The Selection and Nomination Committee met twice formally and several additional times on an ad hoc basis in 2006. The current members of our Selection and Nomination Committee are Mr. J. Westerburgen (Chairman), Mr. H. Bodt and Mr. A. van der Poel.

The main subjects of the meetings of the Selection and Nomination Committee were the composition of the Supervisory Board and the Board of Management. Committee members also met with the Works Council, to discuss the selection of a Supervisory Board member to be recommended by the Works Council based on its strengthened recommendation right.

Technology and Strategy Committee

The Technology and Strategy Committee held three scheduled regular meetings in 2006. The current Supervisory Board members of our Technology and Strategy Committee are Mr. A. van der Poel (Chairman), Mr. J. Dekker and Mr. OB Bilous. In addition, the Technology and Strategy Committee may appoint one or more advisors from within the Company and/or from

ASML STATUTORY ANNUAL REPORT 2006

outside the Company. The advisors to the Technology and Strategy Committee may be invited as guests to (parts of) the meetings of the Committee, but are not entitled to vote in the meetings.

The main subjects of the meetings of the Technology and Strategy Committee were the Company’s technology roadmap, Extreme Ultra Violet (EUV) lithography and immersion technology.

Remuneration of the Supervisory Board

The remuneration of the Supervisory Board members is described in Note 23 to the Statutory Financial Statements 2006. The remuneration of the members of the Supervisory Board is not dependent on the financial results of the Company. No member of the Supervisory Board personally maintains a business relationship with the Company other than as a member of the Supervisory Board. The General Meeting of Shareholders determines the remuneration of the members of the Supervisory Board.

None of the members of the Supervisory Board owns shares or options on shares of the Company.

The Company has not granted any loans to, nor has it granted any guarantees in favor of, any of the members of the Supervisory Board.

On March 18, 2004, the General Meeting of Shareholders has, as part of the amendment to the Company’s Articles of Association, indemnified the members of the Supervisory Board against any claim arising in connection with their position as member of the Supervisory Board, provided that such claim is not attributable to willful misconduct or intentional recklessness of such Supervisory Board member. The Board of Management has further implemented the indemnification of the Supervisory Board members by means of separate indemnification agreements.

Composition of the Board of Management

The Board of Management currently consists of four members.

For further details and a biography of the members of the Board of Management, see Item 6.A. to the Annual Report on Form 20-F.

Remuneration of the Board of Management

The Remuneration Committee recommends, reviews and proposes compensation and benefits for members of the Board of Management. Furthermore, the Remuneration Committee reviews and proposes the general compensation and benefit programs for the Board of Management.

Amount and Composition

In proposing to the Supervisory Board the actual remuneration elements and levels applicable to the members of the Board of Management, the Remuneration Committee considers, among other factors, the Remuneration Policy 2006 as adopted by the General Meeting of Shareholders on March 23, 2006 and, the desired levels of remuneration and emphasis on particular aspects of the Company’s short- and long-term performance, its current compensation and benefits structures, and levels benchmarked against relevant peer companies. External compensation survey data and, where necessary, external consultants are used to benchmark our remuneration levels and structures. The Remuneration Committee also reviews and proposes to the Supervisory Board corporate goals and objectives relevant to the compensation of all members of the Board of Management. The Remuneration Committee evaluates the performance of members of the Board of Management in view of those goals and objectives, and makes recommendations to the Supervisory Board regarding the resulting compensation levels of the members of the Board of Management based on this evaluation.

The external auditor shall audit the targets achieved, to provide additional assurance whether the performance targets set have been achieved.

On March 18, 2004, the General Meeting of Shareholders has, as part of the amendment to the Company’s Articles of Association, indemnified the members of the Board of Management against any claim arising in connection with their position as member of the Board of Management, provided that such claim is not attributable to willful misconduct or intentional

ASML STATUTORY ANNUAL REPORT 2006

recklessness of such Board of Management member. The Supervisory Board has further implemented the indemnification of the Board of Management members by means of separate indemnification agreements.

Outlines 2006 remuneration report

The outlines of the remuneration report of the Supervisory Board concerning the remuneration policy of the Company in 2006, as prepared by the Remuneration Committee are the following:

The remuneration of members of the Board of Management is described in Note 23 to the Statutory Financial Statements 2006. The entire remuneration report of the Supervisory Board concerning the remuneration policy of the Company in 2006 and the Remuneration Policy 2006 as adopted by the General Meeting of Shareholders are published on the Company’s website.

Gratitude to ASML employees

The Supervisory Board strongly believes that everyone at ASML can be proud of the Company’s achievements and record success in 2006. We also acknowledge the professional contributions and personal sacrifices made by those associated with the Company throughout 2006, and in particular, we convey our appreciation and gratitude to the employees of ASML.

Information on Supervisory Board members

Presented below is the personal data of all Supervisory Board members that is required to be disclosed in this report in order to comply with the Code.

other relevant positions

ASML STATUTORY ANNUAL REPORT 2006

H.C.J. van den Burg

other relevant positions

A.P.M. van der Poel

other relevant positions

J.W.B. Westerburgen

other relevant positions

Deputy Company Secretary

The Supervisory Board,

ASML STATUTORY ANNUAL REPORT 2006

Corporate Governance

ASML Holding N.V. (“ASML” or the “Company”) was established in 1994 as a private limited liability company. ASML is the parent company of ASML Netherlands B.V., which was established in 1984, as well as of other, mainly foreign, subsidiaries. ASML is a public limited liability company, with registered seat in Veldhoven, the Netherlands and is governed by Netherlands law. ASML’s shares are listed both on Euronext Amsterdam and on the Global Select Market (“Nasdaq”) since 1995.

ASML monitors and assesses on an ongoing basis applicable Netherlands, U.S., and other relevant corporate governance codes, rules, and regulations. ASML is subject to the Netherlands Corporate Governance Code (the “Code”), as ASML is registered in the Netherlands and is listed on Euronext Amsterdam. As ASML is also listed on Nasdaq, ASML is required to comply with the U.S. Sarbanes-Oxley Act of 2002, as well as the regulations developed by Nasdaq, and the U.S. Securities and Exchange Commission (“SEC”) pursuant to the Sarbanes-Oxley Act.

ASML’s Supervisory Board and Board of Management, which are responsible for ASML’s corporate governance structure, will continue their efforts to ensure that ASML’s practices and procedures comply with both U.S. and Netherlands corporate governance requirements. In this report, ASML addresses its corporate governance structure with reference to the principles and best practices set forth in the Code. ASML’s Supervisory Board and Board of Management are of the opinion that ASML complies with the vast majority of the recommendations in the Code. In those cases where ASML cannot or will not comply with the Code, the reasons are described in this report.

In case of material changes in the corporate governance structure of ASML and/ or in its compliance with the Code, ASML shall include these in a separate agenda item to be discussed in its Annual General Meeting of Shareholders (“AGM”).

II. Board of Management

Role and Procedure

ASML has a two-tier board structure. ASML’s Board of Management is responsible for managing ASML, under the chairmanship of its President and CEO, and is supervised by the Supervisory Board.

Although the various management tasks are divided among the members of the Board of Management, the Board of Management remains collectively responsible for the management of ASML, the deployment of its strategy and policies, and the achievement of its objectives and results.

In fulfilling its management tasks and responsibilities, the Board of Management is guided by the interests of ASML and the business connected with it, as well as by the interest of ASML’s stakeholders. The Board of Management is accountable to the Supervisory Board and the General Meeting of Shareholders for the performance of its management tasks.

In the execution of its tasks and responsibilities, the Board of Management is supervised by the Supervisory Board. The Board of Management provides the Supervisory Board with all information, in writing or otherwise, necessary for the Supervisory Board to fulfill its duties. This includes the distribution of a monthly Management Report, containing updated information on ASML’s business, financials, operations, and industry developments.

Important decisions of the Board of Management require the approval of the Supervisory Board, including decisions concerning:

The main elements of the operational and financial objectives of ASML, the strategy to achieve the objectives, and the parameters to be applied are included in the Report of the Board of Management. In the risk paragraph of the Annual Reports 2006 (as defined hereafter), ASML elaborates on the sensitivity of its results to both external as well as internal factors and variables.

The Board of Management’s Rules of Procedure contain the responsibilities for the full Board of Management, for its individual members, as well as the procedures for meetings, minutes, and resolutions. For a more detailed overview of these items, reference is made to the Rules of Procedure posted on ASML’s Corporate Governance website.

ASML STATUTORY ANNUAL REPORT 2006

Composition, Appointment, Other Functions

According to ASML’s Articles of Association, the Board of Management comprises at least two members. Upon the appointment of Mr. K. Fuchs as a member of the Board of Management on March 23, 2006, after notification to the AGM, ASML’s Board of Management consists of four members. Mr. Fuchs succeeded Mr. S. McIntosh who retired in January 2005. The main elements of Mr. Fuch’s contract were published at the same time as the announcement of his intended appointment in October 2005.

Members of the Board of Management are appointed by the Supervisory Board upon recommendation by ASML’s Selection and Nomination Committee and after notification to the General Meeting of Shareholders. As from the amendment of the Articles of Association on March 31, 2004, appointments of Board of Management members will be for a definite period of four years and will be renewable for consecutive terms of four years. Mr. E. Meurice and Mr. K. Fuchs are both appointed for a period of four years. The existing employment agreements of Messrs. P. Wennink and M. van den Brink, who were appointed before March 31, 2004, will be honored, including all rights and obligations under these contracts. This implies that the appointment of Messrs. Wennink and Van den Brink as members of the Board of Management is for an indefinite period of time, and that their potential severance payments will be determined in accordance with applicable laws.

Members of the Board of Management serve until the end of the term of their appointment, voluntary retirement, or suspension or dismissal by the Supervisory Board. The Supervisory Board may suspend and dismiss members of the Board of Management. However, members cannot be dismissed without hearing the General Meeting of Shareholders.

Board of Management members may only accept a membership of a supervisory board of another listed company upon prior approval from the Supervisory Board. Currently, no Board of Management member has more than two supervisory board memberships in other listed companies. No current member of the Board of Management is chairman of a supervisory board of a listed company. Members of the Board of Management are required to notify the Supervisory Board of other important functions (to be) held by them.

Internal Risk Management and Control Systems, External Factors

The Board of Management is responsible for ensuring that ASML complies with all applicable legislation and regulations. The Board of Management is responsible for the financing of ASML and for managing the risks related to its business activities, both internal as well as external risks.

The establishment of ASML’s internal risk management and control system is based on the identification of external and internal risk factors that could influence the operational and financial objectives of ASML and contains a system of monitoring, reporting, and operational reviews.

To facilitate the identification of risks, ASML introduced in 2006 a formal Risk Management approach. This approach consist of a set of risks definitions (Risk Universe) that is discussed amongst senior management of ASML in a yearly Risk Workshop. Risks are ranked based on likelihood and impact and actions are initiated based on this risk assessment to further enhance our risk mitigation.

ASML publishes two annual reports in respect of the financial year 2006 (“Annual Reports 2006”): a Statutory Annual Report in accordance with Netherlands legal requirements based on International Financial Reporting Standards (“IFRS”) as adopted by the European Union and an Annual Report on Form 20-F, which is based on U.S. GAAP. Both Annual Reports 2006 include risk factors that are specific to the semiconductor industry, ASML and its shares. In addition, ASML provides sensitivity analyses by providing: 1) a narrative explanation of its financial statements; 2) the context within which financial information should be analyzed; and 3) information about the quality of, and potential variability, of ASML’s earnings and cash flow. In its “In Control Statement”, as included in the Statutory Annual Report 2006, the Board of Management addresses ASML’s internal risk management and control systems.

In 2006 ASML’s management conducted, under the supervision and with the participation of ASML’s Chief Executive Officer and Chief Financial Officer, an evaluation of the effectiveness of ASML’s internal control over financial reporting based upon the framework in “Internal Control — Integrated Framework”, pursuant to the Sarbanes-Oxley act. Based on that evaluation, management has concluded that per December 31, 2006, ASML’s internal control over financial reporting was effective and provides reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

With respect to the process of drafting annual reports, ASML has extensive guidelines for the lay-out and the content of its reports. These guidelines are primarily based on applicable laws. For the Statutory Annual Report, ASML follows the requirements of Netherlands law and regulations, including preparation of financial statements in accordance with IFRS. For the Annual Report on Form 20-F, ASML applies the requirements of the U.S. Securities and Exchange Act 1934, and prepares the financial statements included therein in accordance with U.S. GAAP. With respect to the preparation process of these and the

ASML STATUTORY ANNUAL REPORT 2006

other financial reports, ASML applies internal procedures to safeguard completeness and correctness of such information as part of its disclosure controls and procedures.

ASML’s Disclosure Committee, consisting of senior managers from different functional areas within ASML as well as ASML’s CFO, reports to and assists ASML’s CEO and CFO in the maintenance and evaluation of disclosure controls and procedures. The Disclosure Committee’s main responsibility is to oversee the preparation of the Company’s annual reporting, financial announcements and reports, including the preparation of a detailed time and responsibility schedule for each announcement and financial or non-financial report.

Part of ASML’s risk management and control system is ASML’s Code of Ethical Business Conduct (the “Code of Conduct”), which includes ASML’s Principles of Ethical Business Conduct (“Principles”) and Internal Guidelines on Ethical Business Conduct (“Internal Guidelines”). The Internal Guidelines are based on the Principles and are specifically directed towards ASML employees. ASML’s Complaints Procedure provides for the reporting by employees, anonymously if desired, alleged violations of the Code of Conduct. ASML has three complaints committees: in Europe, the U.S., and Asia, to whom ASML employees may submit such reports. The Complaints Procedure provides that alleged violations of the Code of Conduct by Board of Management members can be reported to the Chairman of the Supervisory Board. ASML also has a Corporate Complaints Committee, which deals with appeals resulting from the cases handled by the local Complaints Committees, as well as cases that cannot be handled locally because of the possible impact for the whole company.

With respect to alleged irregularities of a financial nature, ASML has established a Whistleblower’s Procedure, whereby both ASML employees as well as third parties can report alleged irregularities of a financial nature to ASML’s Internal Auditor and/or to the Chairman of the Supervisory Board, depending on the issue. The Whistleblower’s Procedure also allows for anonymous reporting for employees.

In addition to the Whistleblower’s Procedure ASML introduced a corporate Anti Fraud Policy, which facilitates the development of controls which will aid in prevention, deterrence and detection of fraud against ASML.

The Code of Conduct, including complaints received based on the Complaints Procedure and the Whistleblowers Procedure, if any, are addressed in the Audit Committee.

The Code of Conduct, Complaints Procedure, and Whistleblower’s Procedure are posted on ASML’s Corporate Governance website.

Remuneration of the Board of Management

Amount and Composition

The remuneration of the individual members of the Board of Management is determined by the Supervisory Board based on the recommendation of the Remuneration Committee of the Supervisory Board. In proposing to the Supervisory Board the remuneration elements and levels applicable to the members of the Board of Management, the Remuneration Committee considers, among other factors:

The Remuneration Policy 2004, as adopted by the General Meeting of Shareholders in 2004 was based on the then existing draft of the Code. Since 2004, the Code has further evolved and more experience has been gained in the field of compensation, not only in the Netherlands, but also internationally. This has led to a change with more emphasis on the long-term (stock) component and the possibility to reward overachievement.

The following revisions to the Remuneration Policy 2004 were introduced: a more focused reference group of companies for benchmarking, while moving from the third quartile (75th percentile) to the market median (50th percentile) level in the benchmarking. There is an increased focus on long-term value creation and the possibility of rewarding overachievement is introduced.

The Remuneration Policy 2006 was drafted observing the Code and is such that ASML will continue to attract, reward, and retain qualified and seasoned industry professionals in an international labor market. On the other hand, the remuneration structure promotes the interest of ASML in the medium and long-term, does not encourage Board of Management members to act in their own interests, and does not reward failing Board of Management members upon termination of their employment.

ASML STATUTORY ANNUAL REPORT 2006

The potential severance payment for Board of Management members who are appointed after adoption of the Remuneration Policy 2004, is a maximum of one year gross base salary, unless considered unreasonable in view of the circumstances and subject to mandatory Netherlands employment law, to the extent applicable. Existing rights of members of the Board of Management who were appointed prior to March 18, 2004, being Messrs. Van den Brink and Wennink, will not be infringed.

The total remuneration under the Remuneration Policy 2006 includes base salary, a short-term performance cash bonus and performance stock options, long-term performance stock, and benefits. It aims to balance and align the remuneration with the short-term execution and long-term elements of the managerial tasks of the Board of Management. The variable part of the remuneration is designed to strengthen the commitment of the members of the Board of Management to ASML as well as to its objectives. The variable part is linked to previously determined, measurable targets, designed to achieve ASML’s objectives.

Under the Remuneration Policy 2006, the members of the Board of Management are eligible to a cash performance bonus with a maximum of 50% of their base salary. The annual bonus payout is dependent on pre-determined short-term performance criteria, which are drivers of Return on Invested Capital long-term performance.

The granting of performance stock options depends on the achievement after one year of the predetermined level of Return on Invested Capital. The options ultimately granted can not be exercised in the first three years after the date of the initial conditional grant. The exercise price is the official price of the underlying stock on the day of publication of the annual results in the year to which the performance stock option plan relates.

It is not the intention to modify the exercise price, nor the other conditions of the granted options during the term of the options, except if prompted by structural changes relating to the shares or to ASML in accordance with established market practice, such as (i) resulting from a resolution to issue shares with a pre-emption right for the holders of the shares outstanding at that time, (ii) a stock dividend, or (iii) a capitalization of reserves. In these circumstances, approval of the Supervisory Board is required.

Performance stock is awarded, without financial consideration, after fulfillment of predetermined performance targets over a three-year period. Once the stock is released, the stock will be retained for a period of at least two years after the date of release or until at least the time of termination of employment, if this period is shorter. As the date of release lies three years after the original date of target setting, and the members of the Board of Management have to retain the stock for at least two subsequent years, the total period before one obtains full rights to the stock will be five years. The Remuneration Committee feels that the total resulting period is in compliance with the Code. The General Meeting of Shareholders approved the performance stock option and stock plans for the Board of Management on March 23, 2006.

Under the Remuneration Policy 2006, members of the Board of Management are eligible to a maximum conditional performance stock option grant, under the conditions set forth in the aforementioned policy, with a value equal to 50% of their base salary. The maximum number of performance stock options for achieving the 2006 targets in relation to this amount was determined on the day of publication of the 2005 annual results (January 18, 2006), whereas the actual number of performance stock options awarded for achieving the 2006 targets are determined on the day of publication of the 2006 annual results (January 17, 2007).

Furthermore, members of the Board of Management are eligible to a maximum conditional performance stock award, under the conditions set forth in the Remuneration Policy 2006, with a value equal to 87.5% of their base salary. The maximum number of performance stock for 2006 in relation to this amount is determined on the day of publication of the 2005 annual results (on January 18, 2006). The value on the basis of the Cox Ross Rubinstein method equals EUR 8.01 per performance stock. The ultimately awarded number of performance stock for 2006 will be determined in the financial year 2009 conditional upon achievement of performance targets relating to return on invested capital measured over this three-year period.

With respect to trading in ASML securities, Board of Management members, as well as other designated persons, are bound to ASML’s Insider Trading Rules, which are published on the Company’s website.

Other than the 22,000 sign-on stock and 22,000 sign-on stock options awarded to Mr. K. Fuchs upon entering into his employment contract with ASML and as approved by the AGM on March 23, 2006, to compensate for financial consequences incurred when leaving his previous employer, no members of the Board of Management currently have ASML stock or stock options other than as described above.

ASML has not granted any personal loans, guarantees, or the like to members of the Board of Management. However, stock option plans that were issued before 2001 were constructed with a virtual financing arrangement whereby ASML loaned the tax value of the options granted to employees and members of the Board of Management (being Messrs. Van den Brink and Wennink) subject to the Netherlands tax-regime. The loans issued under this arrangement are repayable to ASML on the exercise date of the respective option, provided that the option is actually exercised. If the options expire unexercised, the loans are forgiven.

ASML STATUTORY ANNUAL REPORT 2006

ASML’s Articles of Association provide for the indemnification of the members of the Board of Management against financial losses that are a direct result of their tasks as members of the Board of Management, provided that such claim is not attributable to willful misconduct or intentional recklessness of such member of the Board of Management. The Supervisory Board has further implemented the indemnification of the Board of Management members by means of separate indemnification agreements.

For more details about the Board of Management’s remuneration, its composition, and other relevant elements, reference is made to the Remuneration Policy 2006 and the Remuneration Report over the financial year 2006 (both published on ASML’s website), the Report of the Supervisory Board and other parts of ASML’s Annual Reports 2006.

Regulations regarding ownership of and transactions in securities other than those issued by ASML for members of the Board of Management, are incorporated in the Rules of Procedure of the Board of Management, which rules have been approved by the Supervisory Board. The regulations are drafted observing best practice provision II.2.6. of the Code. The complete Rules of Procedure are published on ASML’s website.

Determination and Disclosure of Remuneration

As previously stated, the AGM held on March 23, 2006 adopted ASML’s Remuneration Policy 2006. ASML also submitted for approval to the AGM held on March 23, 2006 the Stock Option and Stock Plans for the Board of Management, which plans were approved by the AGM.

The Report of the Supervisory Board as incorporated in ASML’s Annual Reports 2006 contains the principle items of the Remuneration Report of the Supervisory Board concerning the application of the Remuneration Policy 2006 of ASML. The Remuneration Report contains the elements recommended by the Code.

Best practice provisions II.2.10 e) and g) of the Code, recommend to describe the performance criteria and to provide a summary of the methods to determine the achievement of the performance criteria. ASML provides the quantitative performance criteria as well as a summary of the methods to determine the achievement of the performance criteria, but cannot give the exact target data, as this concerns highly competitive information, such as market share and gross margin. The Supervisory Board therefore feels that in light of its competitive sensitivity, it is justified not to publish more details of the targeted or actual quantitative performance levels used in the target setting under the Board of Management’s Remuneration Policy. Full disclosure is not in the interest of ASML, and therefore also not in the interest of shareholders. It is the Supervisory Board’s responsibility to set the actual targets for the variable part of the remuneration of the Board of Management taking into account the principle of reasonableness. The AGM endorsed this position in its meeting on March 23, 2006. In addition, the Monitoring Committee Corporate Governance Code in its report dated December 2005, acknowledged that quantitative performance criteria do not need to be disclosed in case of competitively sensitive information.

The external auditor shall audit the targets achieved, to provide additional assurance whether the performance targets set have been achieved.

The remuneration for the individual Board of Management members of ASML is determined by the Supervisory Board, upon a proposal from the Remuneration Committee, with reference to the Remuneration Policy 2006. The Remuneration Policy 2006 is posted on ASML’s Corporate Governance website and contains the quantitative performance criteria for the Board of Management. The level and structure of the remuneration of each of the members of the Board of Management is described in ASML’s Annual Reports 2006.

Conflicts of Interests

During the year 2006, no transactions occurred that could have given the appearance of conflicts of interests or that effectively involved conflicts of interests. In addition, during 2006 no transactions of material significance were entered into between ASML and a shareholder holding 10% or more shares in ASML’s capital.

III. Supervisory Board

Role and Procedure

ASML’s Supervisory Board supervises the policies of the Board of Management and the general course of affairs of ASML and its subsidiaries. ASML’s Supervisory Board also supports the Board of Management with its advice. As a consequence of the two-tier structure prescribed by Netherlands company law, the Supervisory Board is a separate and independent body from the Board of Management and from ASML. This is reflected in, among others, the requirement prescribed by Netherlands law that Supervisory Board members cannot be members of the Board of Management and cannot be an employee of ASML.

ASML STATUTORY ANNUAL REPORT 2006

In fulfilling its role and responsibilities, the Supervisory Board takes into consideration the interests of ASML and its subsidiaries, as well as the relevant interests of ASML’s stakeholders. The Supervisory Board supervises and advises the Board of Management in performing its tasks, with a particular focus on:

In the year 2006, the Audit Committee and Supervisory Board frequently discussed the corporate strategy, the risks of the business, and the internal risk management and control systems. ASML’s corporate strategy was approved by the Supervisory Board. In its report, the Supervisory Board describes its activities in the past financial year, as well as the number of meetings, the number of committee meetings, and the items discussed, both in the full Supervisory Board meetings, as well as in the committee meetings. The items discussed include those as required by the provisions of the Code (e.g. strategy, risks, the functioning of the Supervisory Board and its individual members, its composition, profile, the functioning of the Board of Management and its individual members, composition, succession) plus such items as deemed relevant, such as for example ASML’s financial position and ASML’s investor relations program. The report also contains the personal data of the members of the Supervisory Board.


	4			Board of Management

	5			Supervisory Board

	6			Report of the Supervisory Board

	12			Corporate Governance

	29			Management Board Report

	45			In Control Statement

	47			Statutory Financial Statements

	100			Information and Investor Relations

	101			ASML Worldwide Contact Information


1.	Total remuneration for members of the Board of Management consists of (i) base salary; (ii) short-term performance cash bonus and performance stock options; (iii) long-term performance stock and (iv) other benefits. The earning of cash bonus, performance stock options and performance stock is dependent on the achievement of predetermined performance criteria;
2.	The following ratio is used to balance the various elements of the remuneration: 100%-50%-25%-50%, where base salary is 100%; the maximum performance bonus is 50%; the target level of performance stock options is 25% and the target level of performance stock is 50%;
3.	The maximum number of performance stock options for overachievement to target is equal to 50% of base salary, while the maximum number of performance stock for overachievement to target is equal to 87.5% of base salary. Overachievement to target in relation to the performance bonus is not rewarded;
4.	Base salary, short-term and long-term incentives are measured against the median (50th percentile) of a more specific European company reference group;
5.	Members of the Board of Management are offered a pension plan based on a defined contribution. The total defined contribution is a percentage of the pensionable salary and is dependent on the participant’s age. The total contribution percentage lies between 6% and 24%, of which the participant pays 30%, while ASML pays the remaining 70%; and
6.	The Remuneration Policy 2006 is applicable to all members of the Board of Management.


gender		male
age		68
profession		former General Manager and VP Worldwide Manufacturing of IBM’s Microelectronics Division
principal position		Chairman of the Board of Directors of International Sematech
nationality		American
other relevant positions		Board member Nantero, Inc.
first appointed		2005
current term until		2009

H. Bodt
gender		male
age		68
profession		retired
principal position		Chairman of the Supervisory Board of ASML
nationality		Dutch
other relevant positions		member of the Supervisory Boards of DSM N.V., Delft Instruments N.V. and Neo-Post S.A.
first appointed		1995
current term until		2007



H.C.J. van den Burg
gender		female
age		54
profession		member of the European Parliament
principal position		member of the European Parliament
nationality		Dutch
other relevant positions		none
first appointed		2005
current term until		2009

J.A. Dekker
gender		male
age		67
profession		former CEO of TNO
principal position		President of the Royal Institute of Engineers (KIVI NIRIA)
nationality		Dutch
other relevant positions		member of the Supervisory Boards of Koninklijke BAM Group N.V. and Syntens
first appointed		1997
current term until		2009

F.W. Fröhlich
gender		male
age		64
profession		former Deputy Chairman and CFO of Akzo Nobel N.V.
principal position		Chairman of the Supervisory Board of Randstad Holding N.V.
nationality		German
other relevant positions		Chairman of the Supervisory Board of Draka Holding N.V. and member of the Supervisory Boards of Allianz Nederland N.V. and Gamma Holding N.V.
first appointed		2004
current term until		2008

A.P.M. van der Poel
gender		male
age		58
profession		former member of the Board of Management of Royal Philips Electronics
principal position		Chairman of the Board of MEDEA+
nationality		Dutch
other relevant positions		member of the Board of Directors of Gemalto Holding N.V., a director of the Public Utility Fund (PUF-NRE) and member of the Supervisory Boards of PSV N.V. and DHV Holding B.V.
first appointed		2004
current term until		2008

J.W.B. Westerburgen
gender		male
age		64
profession		former Company Secretary and Head of Tax of Unilever
principal position		retired
nationality		Dutch
other relevant positions		member of the Supervisory Board of Rodamco Europe N.V. and Vice-Chairman of the Board of the Association Aegon
first appointed		2002
current term until		2009

For further information on the Supervisory Board members, see Item 6.A. of the Annual Report on Form 20-F.

Company Secretary		R.F. Roelofs
Appointed		2002

Deputy Company Secretary		G.C.M. Keizer
Appointed		2002

The Supervisory Board,
Veldhoven, January 26, 2007


a)	the operational and financial objectives of ASML;
b)	the strategy designed to achieve the objectives;


In this report the expression “ASML” is sometimes used for convenience in contexts where reference is made to ASML Holding N.V. and/or any of its in general. The expression is also used where no useful purpose is served by identifying the particular company or companies.


c)	the parameters to be applied in relation to the strategy to achieve the objectives.


•	the Remuneration Policy 2006 as adopted by ASML’s General Meeting of Shareholders on March 23, 2006;
•	the desired levels of remuneration;
•	particular aspects of ASML’s short- and long-term financial performance; and
•	its current compensation and benefits structures and levels benchmarked against relevant markets.


1)	the achievement of ASML’s objectives;
2)	ASML’s corporate strategy and the risks inherent in the business activities;
3)	the structure and operation of the internal risk management and control systems;
4)	the reporting process; and
5)	compliance with legislation and regulations.


a)	the members of the Supervisory Board follow their introduction and training program;
b)	the members of the Supervisory Board receive in good time all information that is necessary for the proper performance of their duties;
c)	there is sufficient time for consultation and decision making by the Supervisory Board;
d)	the committees function properly;
e)	the performance of the Board of Management members and the Supervisory Board members is assessed once a year; and
f)	the Supervisory Board has proper contact with the Board of Management and the Works Council.


•	the written report of the Board of Management containing the course of affairs in ASML and the conduct of the management during the past financial year;
•	the adoption of the annual accounts;
•	ASML’s reserves and dividend policy and justification thereof by the Board of Management;
•	the discharge of the members of the Board of Management in respect of their management during the previous financial year;
•	the discharge of the members of the Supervisory Board in respect of their supervision during the previous financial year;
•	each substantial change in the corporate governance structure of ASML; and
•	any other item the Board of Management or the Supervisory Board may place on the agenda.


V.	The Audit of Financial Reporting and the Position of the Internal and External Auditor Function


(i)	the capital structure of the company;
(ii)	restrictions on the transfer of securities and on voting rights;
(iii)	special powers conferred upon the holders of certain shares;
(iv)	the rules governing the appointment and dismissal of board members and the amendment of the articles of association;
(v)	the rules on the issuing and the repurchasing of shares by the company;
(vi)	significant agreements to which the company is a party and which contain change of control rights (except where their nature is such that their disclosure would be seriously prejudicial to the company); and
(vii)	agreements between the company and its board members or employees providing for a “golden parachute”.



Capital Group International Inc.	8.58%	shares
Capital Research and Management Company	7.90%	shares and 0.27% option rights
ASML Holding N.V.	5.24%	shares
Stichting Preferente Aandelen ASML	100%	option rights


•	offering ongoing improvements in productivity, imaging and overlay by introducing advanced technology based on modular platforms;
•	providing customer services that ensure rapid, efficient installation and superior on-site support and training to optimize manufacturing processes and improve productivity;
•	maintaining appropriate levels of research and development to offer the most advanced technology suitable for high-throughput and low-cost volume production at the earliest possible date;
•	enhancing the capabilities of the installed base through ongoing field upgrades of key value drivers (productivity, imaging and overlay) based on further technology developments;
•	reducing the cycle time between customer order of a system and the use of that system in volume production on-site;
•	expanding operational flexibility in research and manufacturing by reinforcing strategic alliances with world-class partners;
•	improving the reliability and uptime of our installed system base; and
•	providing re-marketing services that effectively increase residual value by extending the life of equipment.


•	the highly cyclical semiconductor business industry;
•	unanticipated shipment rescheduling;
•	cancellation or order push back by customers;
•	unexpected manufacturing difficulties; and
•	delays in deliveries by suppliers,


•	potentially adverse tax consequences;
•	unfavorable political or economic environments;
•	unexpected legal or regulatory changes; and
•	an inability to effectively protect intellectual property.



Year ended December 31	2001	2002	2003	2004	2005

Total units shipped	789	413	456	694	536
Total value (in millions USD)	3,792	2,817	3,229	5,268	4,988



Year ended December 31	2005			2006
(in millions)	EUR			EUR

Total net sales		2,529			3,597
Cost of sales		1,583			2,183
Gross profit on sales		946			1,414
Research and development costs		247			307
Research and development credits		(16	)		(17	)
Selling, general and administrative costs		205			204
Income from operations		510			919
Interest expense, net		(49	)		(37	)
Income from operations before income taxes		461			882
Provision for income taxes		(128	)		(246	)
Net income		333			636


•	maintaining long-term relationships with our suppliers;
•	sharing risks and rewards with our suppliers;
•	dual sourcing of knowledge, globally, together with our suppliers; and
•	single, dual or multiple sourcing of products, where possible or required.


•	The semiconductor industry is highly cyclical and we may be adversely affected by any future downturns;
•	Our business will suffer if we do not respond rapidly to commercial and technological changes in the semiconductor industry;
•	We face intense competition; and
•	Industry alliances may not select our equipment.


•	The number of systems we can produce is limited by our dependence on a limited number of suppliers of key components;
•	A high percentage of net sales is derived from a few customers;
•	The pace of introduction of our new products is accelerating and is accompanied by potential design and production delays and by significant costs;
•	We derive most of our revenues from the sale of a relatively small number of products;
•	Failure to adequately protect the intellectual property rights upon which we depend could harm our business;
•	Defending against intellectual property claims by others could harm our business;
•	We are subject to risks in our international operations;
•	We are dependent on the continued operation of a limited number of manufacturing facilities;
•	Because of labor laws and practices, any workforce reductions that we may wish to implement in order to reduce costs company-wide may be delayed or suspended;
•	Non-compliance with or a change in environmental laws and regulations could harm our results of operations;
•	Fluctuations in foreign exchange rates could harm our results of operations;
•	We may be unable to make desirable acquisitions or to integrate successfully any businesses we acquire; and
•	Our business and future success depend on our ability to attract and retain sufficient, educated and skilled employees.


•	The price of our ordinary shares is very volatile; and
•	Restrictions on shareholder rights may dilute voting power.


•	the current and anticipated market demand for semiconductors and for products utilizing semiconductors;
•	semiconductor prices;
•	semiconductor production costs; and
•	general economic conditions.


•	rapid change towards more complex technologies;
•	frequent new product introductions and enhancements;
•	evolving industry standards;
•	changes in customer requirements; and
•	continued shortening of product life cycles.


•	the technical performance characteristics of a photolithography system;
•	the value of ownership of that system based on its purchase price, maintenance costs, productivity and customer service and support; and
•	the strength and breadth of our portfolio of patents and other intellectual property rights.


•	intellectual property laws may not sufficiently support our proprietary rights or may adversely change in the future;
•	patent rights may not be granted or construed as intended;
•	patent rights will expire;
•	the steps we take to prevent misappropriation or infringement of our proprietary rights may not be successful; and
•	third parties may be able to develop or obtain patents for similar competing technology.


1	Net cash is calculated as the difference between cash and cash equivalents and convertible subordinated notes. Balances of the convertible subordinated notes as of December 31, 2005 and 2006 are EUR 867.7 million and EUR 380 million, respectively.
2	According to the latest available data up to and including November 2006 as reported by SEMI, an independent semiconductor industry organization.



As of December 31	2005		2006

Backlog sales of new systems (units)		86		153
Backlog sales of used systems (units)		9		10
Backlog sales of total systems (units)		95		163
Value of backlog new systems (EUR million)		1,411		2,120
Value of backlog used systems (EUR million)		23		26
Value of backlog of total systems (EUR million)		1,434		2,146
ASP for new systems (EUR million)		16.4		13.9
ASP for used systems (EUR million)		2.6		2.6
ASP for total systems (EUR million)		15.1		13.2


•	monthly operational review meetings of the Board of Management with ASML’s senior management on financial performance and realization of operational objectives and responses to emerging issues;
•	bi-annual financial planning meetings of the Board of Management with ASML’s senior management;
•	monthly meetings with ASML’s Chief Executive Officer, Chief Financial Officer and senior finance management focusing on monthly financial figures and internal control evaluations;
•	monthly and quarterly financial reporting;
•	letters of representation that are signed by ASML’s key senior management members on an annual basis in which they confirm that for their responsible area based upon their knowledge (i) an effective system of internal controls and procedures is maintained and (ii) the financial reports fairly present the financial position, results of operations and cash flows;
•	assessments by ASML’s Disclosure Committee with respect to the timely review, disclosure, and evaluation of periodic (financial) reports and with respect to the maintenance and evaluation of disclosure controls and procedures, leading to an advice to ASML’s Chief Executive Officer and Chief Financial Officer;
•	management letters and audit reports provided by the Company’s external auditors;
•	discussions on management letters and audit reports provided by the Company’s external auditors within our Board of Management and Supervisory Board;
•	ASML’s Ten Business Control Principles;
•	ASML’s Internal Guidelines on Ethical Business Conduct and Whistleblower’s Procedure; and
•	introduction of ASML’s Anti-Fraud Policy, which facilitates the development of controls which will aid in prevention, deterrence and detection of fraud against ASML.


(i)	the above-mentioned measures provide a reasonable level of assurance that ASML’s financial statements as of and for the year ended December 31, 2006 fairly present in all material respects the financial condition, results of operations and cash flows of the Company and that ASML’s financial statements as of and for the year ended December 31, 2006 do not contain any material inaccuracy;
(ii)	the internal risk management and control systems with respect to financial reporting risks have worked properly in 2006; and
(iii)	there are no indications that the Company’s internal controls over financial reporting will not operate effectively in 2007.


•	strategic evaluations of ASML’s business by the Board of Management in consultation with the Supervisory Board;
•	semi-annual senior management meetings, which are conducted to assess ASML’s corporate initiatives which are launched in order to execute ASML’s strategy;
•	monthly operational review meetings of the Board of Management with ASML’s senior management on financial performance and realization of operational objectives and responses to emerging issues;
•	bi-annual financial planning meetings of the Board of Management with ASML’s senior management;
•	monthly (internal) and quarterly (public) financial reporting;
•	letters of representation that are signed by ASML’s key senior management members on an annual basis in which they confirm their responsibility for assessing business risks and ensuring appropriate risk mitigation for their responsible area based upon their knowledge;
•	introduction of a formal Risk Management cycle, including a risk workshop during which the key risks of ASML are being discussed amongst ASML’s senior management;
•	ASML’s Ten Business Control Principles;
•	ASML’s Internal Guidelines on Ethical Business Conduct; and
•	introduction of ASML’s Anti-Fraud Policy.


50		Consolidated Profit and Loss Accounts for the years ended December 31, 2005 and 2006
51		Consolidated Statements of Recognized Income and Expense for the years ended December 31, 2005 and 2006
51		Consolidated Balance Sheets as of December 31, 2005 and 2006
52		Consolidated Statements of Changes in Equity for the years ended December 31, 2005 and 2006
53		Consolidated Statements of Cash Flows for the years ended December 31, 2005 and 2006



	Year ended December 31,	2005			2006
Notes	(in thousands, except per share data)	EUR			EUR

21	Net system sales		2,227,678			3,229,065
	Net service and field option sales		301,289			368,039


	Total net sales		2,528,967			3,597,104
	Cost of system sales		1,392,622			1,959,093
	Cost of service and field option sales		190,567			223,927


	Total cost of sales		1,583,189			2,183,020


	Gross profit on sales		945,778			1,414,084
	Research and development costs		247,217			307,388
	Research and development credits		(16,692	)		(17,098	)
	Selling, general and administrative costs		205,334			204,362


	Operating income		509,919			919,432
	Interest income		38,429			49,634
	Interest charges		(87,797	)		(86,848	)


	Income before income taxes		460,551			882,218
19	Provision for income taxes		(127,725	)		(246,234	)


	Net income		332,826			635,984
6	Basic net income per ordinary share		0.69			1.34
	Diluted net income per ordinary share		0.68			1.31
	Number of ordinary shares used in computing
	per share amounts (in thousands):
	Basic		484,103			474,860
	Diluted		486,054			504,091



															Accumulated
	Issued and outstanding											Treasury			Other
	Shares						APIC/Share		Retained			Shares at			Comprehensive
	Number			Amount			Premium		Earnings			cost			Income			Total
(in thousands)				EUR			EUR		EUR			EUR			EUR			EUR

Balance at January 1, 2005		483,676			9,675			1,093,713		231,195			0			134,436			1,469,019

Components of Statement of Recognized
Income and Expense:
Net income										332,826									332,826
Foreign Currency Translation																25,528			25,528
Gain (loss) on derivative instruments																(38,365	)		(38,365	)

Issuance of shares and stock options		994			19			31,944											31,963


Balance at December 31, 2005		484,670			9,694			1,125,657		564,021			0			121,599			1,820,971

Components of Statement of Recognized
Income and Expense:
Net income										635,984									635,984
Foreign Currency Translation																(20,524	)		(20,524	)
Gain (loss) on derivative instruments																11,240			11,240

Purchase of treasury shares		(25,450	)¹										(401,000	)					(401,000	)

Purchase of shares in conjunction with conversion rights of bond holders		(14,935	)²		(299	)							(277,235	)					(277,534	)

Issuance of shares in conjunction with convertible bonds		30,811			616			238,862		(48,034	)		277,235						468,679

Issuance of shares and stock options		2,003			40			41,127											41,167


Balance at December 31, 2006		477,099			10,051			1,405,646		1,151,971			(401,000	)		112,315			2,278,983


1	ASML intends to cancel its repurchased shares.
2	In 2006 14,934,843 shares were bought back which have subsequently been reissued in order to satisfy the conversion rights of holders of our 5.75 percent Convertible Subordinated Notes. We paid EUR 278 million in cash for these shares in total. We also refer to Note 14.


•	IFRS 7, “Financial Instruments: Disclosures” (effective for annual periods beginning on or after 1 January 2007). IFRS 7 introduces new disclosures related to financial instruments. This standard does not have any impact on the classification and valuation of ASML’s financial instruments;
•	IFRS 8, “Operating Segments” (effective for annual periods beginning on or after 1 January 2009). IFRS 8 sets out requirements for disclosure of information about an entity’s operating segments and also about the entity’s products and services, the geographical areas in which it operates, and its major customers;
•	IAS 1, “Presentation of Financial Statements — Capital Disclosures” (effective for annual periods beginning on or after 1 January 2007). Under this amendment of IAS 1 an entity is required to disclose information that enables users of its financial statements to evaluate the entity’s objectives, policies and processes for managing capital;
•	IFRIC 8, “Scope of IFRS 2” (effective for annual periods beginning on or after 1 May 2006). IFRIC 8 requires consideration of transactions involving the issuance of equity instruments — where the identifiable consideration received is less than the fair value of the equity instruments issued — to establish whether or not they fall within the scope of IFRS 2;
•	IFRIC 9, “Reassessment of Embedded Derivatives” (effective for annual periods beginning on or after 1 June 2006). IFRIC 9 requires an entity to assess whether an embedded derivative is required to be separated from the host contract and accounted for as a derivative when the entity first becomes a party to the contract. Subsequent reassessment is prohibited unless there is a change in the terms of the contract that significantly modifies the cash flows that otherwise would be required under the contract, in which case reassessment is required;
•	IFRIC 10, “Interim Financial Reporting and Impairment” (effective for annual periods beginning on or after 1 November 2006). IFRIC 10 prohibits the impairment losses recognized in an interim period on goodwill, investments in equity instruments and investments in financial assets carried at cost to be reversed at a subsequent balance sheet date; and
•	IFRIC 11, “IFRS 2 — Group and Treasury Share Transactions” (effective for annual periods beginning on or after 1 March 2007). This interpretation addresses the issue whether certain transactions should be accounted for as equity-settled or as cash-settled under the requirements of IFRS 2. The second issue where IFRIC 11 is dealing with, concerns share-based payment arrangements that involve two or more entities within the same group.


•	the technical feasibility of completing the intangible asset so that it will be available for use or sale;
•	the intention to complete the intangible asset and use or sell it;
•	the ability to use or sell the intangible asset;
•	the probability that the asset created will generate future economic benefits;
•	the availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset; and
•	the ability to measure reliably the expenditure attributable to the intangible asset during its development.



Category		Assigned economic life

Buildings and constructions		5 – 40 years
Machinery and equipment		2 – 5 years
Leasehold improvements		5 – 10 years
Furniture, fixtures and other equipment		3 – 5 years