EX-99.2 3 u55414exv99w2.htm EX-99.2 EX-99.2
 

Exhibit 99.2
ASML — Summary U.S. GAAP Consolidated Statements of Operations1,4
                 
    Three months ended,  
(in thousands EUR, except per share data)   Apr 1, 2007     Mar 30, 2008  
 
 
               
Net system sales
    847,376       819,986  
Net service and field option sales
    101,295       99,222  
 
Total net sales
    948,671       919,208  
 
               
Cost of sales
    556,853       545,583  
 
Gross profit on sales
    391,818       373,625  
 
               
Research and development costs, net of credits
    116,442       128,259  
Amortization of in process R&D
    23,148        
Selling, general and administrative costs
    56,330       57,328  
 
Income from operations
    195,898       188,038  
 
               
Interest income
    10,260       4,203  
 
Income from operations before income taxes
    206,158       192,241  
 
               
Provision for income taxes
    (53,483 )     (47,118 )
 
Net income
    152,675       145,123  
 
               
Basic net income per ordinary share
    0.32       0.34  
Diluted net income per ordinary share
    0.31 2,3     0.33 3
 
               
Number of ordinary shares used in computing per share amounts (in thousands):
               
Basic
    473,573       431,600  
Diluted
    502,613 2,3     434,959 3
ASML — Ratios and Other Data1,4
                 
    Three months ended,  
    Apr 1, 2007     Mar 30, 2008  
 
 
               
Gross profit as a % of net sales
    41.3       40.6  
Income from operations as a % of net sales
    20.6       20.5  
Net income as a % of net sales
    16.1       15.8  
Shareholders’ equity as a % of total assets
    53.3       44.5  
Income taxes as a % of income before income taxes
    25.9       24.5  
Sales of systems total (in units)
    77       50  
ASP of systems sales (EUR million)
    11.0       16.4  
Value of backlog systems total (EUR million)
    2,163       1,167  
Backlog systems total (in units)
    148       65  
ASP of backlog systems (EUR million)
    14.6       18.0  
Value of bookings systems total (EUR million)
    911       312  
Net bookings total (in units)
    62       26  
ASP of bookings systems (EUR million)
    14.7       12.0  
Number of employees
    5,975       6,765  

 


 

ASML — Summary U.S. GAAP Consolidated Balance Sheets1,4
                 
(in thousands EUR)   Dec 31, 2007     Mar 30, 2008  
 
ASSETS
               
Cash and cash equivalents
    1,271,636       1,397,144  
Accounts receivable, net
    637,975       741,515  
Inventories, net
    1,102,210       1,152,010  
Deferred tax assets short-term
    73,019       71,031  
Other current assets
    234,529       267,586  
 
Total current assets
    3,319,369       3,629,286  
 
               
Deferred tax assets long-term
    141,032       135,836  
Other assets
    59,991       85,700  
Goodwill
    128,271       119,717  
Other intangible assets, net
    38,195       32,507  
Property, plant and equipment, net
    380,894       401,359  
 
Total assets
    4,067,752       4,404,405  
LIABILITIES AND SHAREHOLDERS’ EQUITY
               
Current liabilities
    1,321,442       1,562,261  
Deferred tax and other liabilities
    245,415       261,507  
Other deferred liabilities
    7,936       7,170  
Other long-term debt
    602,016       615,313  
 
Total liabilities
    2,176,809       2,446,251  
Shareholders’ equity
    1,890,943       1,958,154  
 
Total liabilities and shareholders’ equity
    4,067,752       4,404,405  
ASML — Summary U.S. GAAP Consolidated Statements of Cash Flows1,4
                 
    Three months ended,  
(in thousands EUR)   Apr 1, 2007     Mar 30, 2008  
 
CASH FLOWS FROM OPERATING ACTIVITIES:
               
Net income
    152,675       145,123  
Depreciation and amortization
    53,362       30,576  
Change in tax assets and liabilities
    18,742       21,797  
Change in assets and liabilities
    (53,011 )     65,186  
 
Net cash provided by operating activities
    171,768       262,682  
CASH FLOWS FROM INVESTING ACTIVITIES:
               
Purchases of property, plant and equipment
    (35,789 )     (55,032 )
Proceeds from sale of property, plant and equipment
    4,306       1,103  
Acquisition of subsidiary (net of cash acquired)
    (188,011 )      
 
Net cash used in investing activities
    (219,494 )     (53,929 )
CASH FLOWS FROM FINANCING ACTIVITIES:
               
Purchase of shares in conjunction with conversion rights of bond holders and stock options
    (156,253 )     (87,603 )
Net proceeds from issuance of shares and stock options
    12,815       6,542  
Excess tax benefits from stock options
    627       2  
Redemption and/or repayment of debt
    (234 )      
 
Net cash used in financing activities
    (143,045 )     (81,059 )
 
Net cash flows
    (190,771 )     127,694  
Effect of changes in exchange rates on cash
    (1,874 )     (2,186 )
 
Net increase (decrease) in cash & cash equivalents
    (192,645 )     125,508  

 


 

ASML — Quarterly Summary U.S. GAAP Consolidated Statements of Operations1,4
                                         
    Three months ended,  
    Apr 1,     Jul 1,     Sep 30,     Dec 31,     Mar 30,  
(in millions EUR)   2007     2007     2007     2007     2008  
 
 
                                       
Net system sales
    847.4       825.8       843.2       834.8       820.0  
Net service and field option sales
    101.3       104.4       91.2       120.1       99.2  
 
Total net sales
    948.7       930.2       934.4       954.9       919.2  
 
                                       
Cost of sales
    556.9       546.9       549.4       565.3       545.6  
 
Gross profit on sales
    391.8       383.3       385.0       389.6       373.6  
 
                                       
Research and development costs, net of credits
    116.5       120.3       120.1       129.3       128.3  
Amortization of in process R&D
    23.1                          
Selling, general and administrative costs
    56.3       56.4       56.0       56.9       57.3  
 
Income from operations
    195.9       206.6       208.9       203.4       188.0  
 
                                       
Interest income
    10.3       8.1       9.5       5.5       4.2  
 
Income from operations before income taxes
    206.2       214.7       218.4       208.9       192.2  
 
                                       
Provision for income taxes
    (53.5 )     (55.2 )     (52.1 )     (8.1 )     (47.1 )
 
Net income
    152.7       159.5       166.3       200.8       145.1  
ASML — Quarterly Summary Ratios and other data1,4
                                         
    Three months ended,  
    Apr 1,     Jul 1,     Sep 30,     Dec 31,     Mar 30,  
    2007     2007     2007     2007     2008  
 
 
                                       
Gross profit as a % of net sales
    41.3       41.2       41.2       40.8       40.6  
Income from operations as a % of net sales
    20.6       22.2       22.4       21.3       20.5  
Net income as a % of net sales
    16.1       17.1       17.8       21.0       15.8  
Shareholders’ equity as a % of total assets
    53.3       47.3       35.7       46.5       44.5  
Income taxes as a % of income before income taxes
    25.9       25.7       23.9       3.9       24.5  
Sales of systems total (in units)
    77       69       59       55       50  
ASP of system sales (EUR million)
    11.0       12.0       14.3       15.2       16.4  
Value of backlog systems total (EUR million)
    2,163       1,745       1,769       1,697       1,167  
Backlog systems total (in units)
    148       109       90       89       65  
ASP of backlog systems (EUR million)
    14.6       16.0       19.7       19.1       18.0  
Value of booking systems total (EUR million)
    911       399       857       803       312  
Net bookings total (in units)
    62       30       40       54       26  
ASP of bookings systems (EUR million)
    14.7       13.3       21.4       14.9       12.0  
Number of employees
    5,975       6,213       6,403       6,582       6,765  

 


 

ASML — Summary U.S. GAAP Consolidated Balance Sheets1,4
                                         
    Apr 1,     Jul 1,     Sep 30,     Dec 31,     Mar 30,  
(in millions EUR)   2007     2007     2007     2007     2008  
 
ASSETS
                                       
Cash and cash equivalents
    1,463.2       2,299.2       2,445.2       1,271.6       1,397.1  
Accounts receivable, net
    648.6       567.8       611.7       638.0       741.5  
Inventories, net
    906.7       972.9       1,021.2       1,102.2       1,152.0  
Deferred tax assets short-term
    140.9       131.8       131.3       73.0       71.1  
Other current assets
    169.6       183.7       214.2       234.6       267.6  
 
Total current assets
    3,329.0       4,155.4       4,423.6       3,319.4       3,629.3  
 
                                       
Deferred tax assets long-term
    179.0       203.0       143.5       141.0       135.8  
Other assets
    37.4       43.0       39.9       60.0       85.7  
Goodwill
    141.7       140.2       133.4       128.3       119.7  
Other intangible assets, net
    52.9       49.7       44.2       38.2       32.5  
Property, plant and equipment, net
    288.5       313.5       343.3       380.9       401.4  
 
Total assets
    4,028.5       4,904.8       5,127.9       4,067.8       4,404.4  
LIABILITIES AND SHAREHOLDERS’ EQUITY
                                       
Current liabilities
    1,230.0       1,331.2       2,391.5       1,321.4       1,562.3  
Deferred tax and other liabilities
    260.0       273.6       248.3       245.4       261.5  
Other deferred liabilities
    9.5       8.2       8.2       8.0       7.1  
Convertible subordinated debt
    380.0       380.0       44.5              
Other long-term debt
    1.3       593.8       604.0       602.0       615.3  
 
Total liabilities
    1,880.8       2,586.8       3,296.5       2,176.8       2,446.2  
Shareholders’ equity
    2,147.7       2,318.0       1,831.4       1,891.0       1,958.2  
 
Total liabilities and shareholders’ equity
    4,028.5       4,904.8       5,127.9       4,067.8       4,404.4  

 


 

ASML — Summary U.S. GAAP Consolidated Statements of Cash Flows1,4
                                         
    Three months ended,  
    Apr 1,     Jul 1,     Sep 30,     Dec 31,     Mar 30,  
(in millions EUR)   2007     2007     2007     2007     2008  
 
CASH FLOWS FROM OPERATING ACTIVITIES:
                                       
Net income
    152.7       159.5       166.3       200.8       145.1  
Depreciation and amortization
    53.4       24.1       28.0       29.8       30.6  
Change in tax assets and liabilities
    18.7       10.8       (5.3 )     (0.6 )     21.8  
Change in assets and liabilities
    (53.0 )     63.0       (20.0 )     (157.9 )     65.2  
 
Net cash provided by operating activities
    171.8       257.4       169.0       72.1       262.7  
CASH FLOWS FROM INVESTING ACTIVITIES:
                                       
Purchases of property, plant and equipment
    (35.8 )     (39.7 )     (49.7 )     (54.0 )     (55.0 )
Proceeds from sale of property, plant and equipment
    4.3       9.9       1.7       3.3       1.1  
Acquisition of subsidiary (net of cash acquired)
    (188.0 )                        
 
Net cash used in investing activities
    (219.5 )     (29.8 )     (48.0 )     (50.7 )     (53.9 )
CASH FLOWS FROM FINANCING ACTIVITIES:
                                       
Capital repayment
                      (1,011.9 )      
Purchase of shares in conjunction with conversion rights of bond holders and stock options
    (156.3 )                 (203.6 )     (87.6 )
Net proceeds from issuance of shares and stock options
    12.8       15.0       29.1       30.7       6.5  
Net proceeds from issuance of bonds
          593.8                    
Excess tax benefits from stock options
    0.6       0.1       0.2       0.2        
Redemption and/or repayment of debt
    (0.2 )     (0.1 )     (1.5 )     (7.8 )      
 
Net cash provided by (used in) financing activities
    (143.1 )     608.8       27.8       (1,192.4 )     (81.1 )
 
Net cash flows
    (190.8 )     836.4       148.8       (1,171.0 )     127.7  
Effect of changes in exchange rates on cash
    (1.9 )     (0.4 )     (2.8 )     (2.6 )     (2.2 )
 
Net increase (decrease) in cash & cash equivalents
    (192.7 )     836.0       146.0       (1,173.6 )     125.5  

 


 

ASML — Notes to the Summary U.S. GAAP Consolidated Financial Statements
Basis of Presentation
ASML follows accounting principles generally accepted in the United States of America (“U.S. GAAP”). Further disclosures, as required under U.S. GAAP in annual reports, are not included in the summary consolidated financial statements. Unless stated otherwise, the accompanying consolidated financial statements are stated in thousands of euros (‘EUR’).
Principles of consolidation
The consolidated financial statements include the accounts of ASML Holding N.V. and all of its majority-owned subsidiaries. Subsidiaries are all entities over which ASML has the power to govern the financial and operating policies generally accompanying a shareholding of more than one half of the voting rights. All intercompany profits, balances and transactions have been eliminated in the consolidation.
Use of estimates
The preparation of ASML’s consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities on the balance sheet dates and the reported amounts of revenue and expense during the reported periods. Actual results could differ from those estimates.
Recognition of revenues
ASML recognizes revenue when all four revenue recognition criteria are met: persuasive evidence of an arrangement exists; delivery has occurred or services have been rendered; seller’s price to the buyer is fixed or determinable; and collectibility is reasonably assured. At ASML, this policy generally results in revenue recognition from the sale of a system upon shipment. The revenue from the installation of a system is generally recognized upon completion of that installation at the customer site. Each system undergoes, prior to shipment, a “Factory Acceptance Test” in ASML’s clean room facilities, effectively replicating the operating conditions that will be present on the customer’s site, in order to verify whether the system will meet its standard specifications and any additional technical and performance criteria agreed with the customer. A system is shipped, and revenue recognized, only after all specifications are met and customer sign-off is received or waived. Although each system’s performance is re-tested upon installation at the customer’s site, ASML has never failed to successfully complete installation of a system at a customer’s premises.
For arrangements containing multiple elements, the revenue relating to the undelivered elements is deferred at estimated fair value until delivery of these elements. Revenue from installation services and service contracts provided to our customers is initially deferred and is recognized when the installation is completed and, in case of service contracts, over the life of those contracts. Revenue from extended and enhanced warranties is recognized in income on a straight-line basis over the contract period. The costs of providing services under extended and enhanced warranties are recognized when they occur.

 


 

ASML — Reconciliation U.S. GAAP — IFRS1,4
                 
Net income   Three months ended,  
(in thousands EUR)   Apr 1, 2007     Mar 30, 2008  
 
Net income under U.S. GAAP
    152,675       145,123  
Share-based payments (see Note 1)
    122       (762 )
Capitalization of development costs (see Note 2)
    22,682       21,681  
Convertible subordinated notes (see Note 3)
    (2,176 )      
Income taxes (see Note 4)
    (7,648 )     418  
 
Net income under IFRS
    165,655       166,460  
Shareholders’ equity
                                         
    Apr 1,     Jul 1,     Sep 30,     Dec 31,     Mar 30,  
(in thousands EUR)   2007     2007     2007     2007     2008  
 
Shareholders’ equity under U.S. GAAP
    2,147,730       2,317,997       1,831,433       1,890,943       1,958,154  
Share-based payments (see Note 1)
    523       3,924       7,126       787       (3,420 )
Capitalization of development costs (see Note 2)
    113,451       110,749       120,344       138,424       157,900  
Convertible subordinated notes (see Note 3)
    29,239       27,019       2,894              
Income taxes (see Note 4)
                      8,852       9,186  
 
Shareholders’ equity under IFRS
    2,290,943       2,459,689       1,961,797       2,039,006       2,121,820  
Notes to the reconciliation from U.S. GAAP to IFRS
Note 1 Share-based Payments
Under IFRS, ASML applies IFRS 2, “Share-based Payments” beginning from January 1, 2004. In accordance with IFRS 2, ASML records as an expense the fair value of its share-based payments with respect to stock options granted to its employees after November 7, 2002.
Under U.S. GAAP, until December 31, 2005, ASML accounted for stock option plans using the intrinsic value method in accordance with APB 25 “Accounting for stock issued to employees” and provided pro forma disclosure of the impact of the fair value method on net income and earnings per share in accordance with SFAS No. 123 “Accounting for Stock Based Compensation”. As of January 1, 2006, ASML applies SFAS No. 123(R) “Share-Based Payment” which is a revision of SFAS No.123. SFAS 123(R) requires companies to recognize the cost of employee services received in exchange for awards of equity instruments based upon the grant-date fair value of those instruments.
Note 2 Capitalization of development costs
Under IFRS, ASML applies IAS 38, “Intangible Assets”. During the second half of 2004, ASML made changes to its administrative systems in order to provide sufficient information to comply with IFRS beginning from January 1, 2005. Sufficient reliable information to account for capitalization of development expenditures under IFRS before January 1, 2005 is not available. Under IAS 38, capitalized development expenditures are amortized over the expected useful life of the related product generally ranging between 2 and 3 years. Amortization starts when the developed product is ready for volume production.
Under U.S. GAAP, ASML applies SFAS No. 2, “Accounting for Research and Development Costs”. In accordance with SFAS No. 2, ASML charges costs relating to research and development to operating expense as incurred.

 


 

Note 3 Convertible Subordinated Notes
Under IFRS, ASML applies IAS 32 “Financial instruments: Disclosure and presentation” and IAS 39 “Financial instruments: Recognition and measurement” beginning from January 1, 2005. In accordance with IAS 32 and IAS 39, ASML accounts separately for the equity and liability component of its convertible notes (“Split accounting”). The equity component relates to the grant of a conversion option to shares to the holder of the bond. Split accounting results in additional interest charges.
Under U.S. GAAP, ASML accounts for its convertible bonds as a liability at the principal amount outstanding. As of December 31, 2007 ASML has no Convertible Subordinated Notes outstanding.
Note 4 Income taxes
Under IFRS, ASML applies IAS 12, “Income Taxes” beginning from January 1, 2005. In accordance with IAS 12, unrealized net income resulting from intercompany transactions that is eliminated from the carrying amount of assets on consolidation gives rise to a temporary difference for which deferred taxes must be recognized on consolidation. The deferred taxes are calculated based on the tax rate applicable in the purchaser’s tax jurisdiction.
Under U.S. GAAP, the elimination of unrealized net income from intercompany transactions that are eliminated from the carrying amount of assets on consolidation, give rise to a temporary difference for which prepaid taxes must be recognized on consolidation. Contrary to IFRS, the prepaid taxes under U.S. GAAP are calculated based on the tax rate applicable in the seller’s tax jurisdiction.
“Safe Harbor” Statement under the US Private Securities Litigation Reform Act of 1995: the matters discussed in this document may include forward-looking statements, including statements made about our outlook, realization of backlog, IC unit demand, financial results, average sales price, gross margin and expenses. These forward looking statements are subject to risks and uncertainties including, but not limited to: economic conditions, product demand and semiconductor equipment industry capacity, worldwide demand and manufacturing capacity utilization for semiconductors (the principal product of our customer base), competitive products and pricing, manufacturing efficiencies, new product development and customer acceptance of new products, ability to enforce patents and protect intellectual property rights, the outcome of intellectual property litigation, availability of raw materials and critical manufacturing equipment, trade environment, changes in exchange rates and other risks indicated in the risk factors included in ASML’s Annual Report on Form 20-F and other filings with the US Securities and Exchange Commission.

 


 

 
1   All quarterly information in this press release is unaudited.
 
2   The calculation of diluted net income per ordinary share assumes conversion of our Subordinated Notes as such conversions would have a dilutive effect.
 
3   The calculation of diluted net income per ordinary share assumes the exercise of options issued under ASML stock option plans as such exercises would have a dilutive effect.
 
4   As of January 1, 2008 ASML accounts for award credits offered to its customers as part of a volume purchase agreement using the deferred revenue model. Until December 31, 2007 the cost accrual method was used. This change in accounting policy was made because the deferred revenue model better reflects the business rationale. In addition the International Financial Reporting Interpretation Committee concludes in interpretation 13 (IFRIC 13 “Customer Loyalty Programmes”) that the deferred revenue model is the appropriate accounting treatment. Comparative figures for 2007 were adjusted to reflect this change in accounting policy. The impact of this change on equity as per January 1, 2007 amounted to EUR 8.1 million (decrease) and on net income for the year 2007 and the first quarter of 2008 amounted to EUR 8.6 million (decrease) and EUR 0.1 million (increase) respectively.