EX-99.2 3 u56735exv99w2.htm EXHIBIT 99.2 exv99w2
Exhibit 99.2
ASML — Summary U.S. GAAP Consolidated Statements of Operations 1,4
                                 
    Three months ended,     Nine months ended,  
(in thousands EUR, except per share data)   Sep 30, 2007     Sep 28, 2008     Sep 30, 2007     Sep 28, 2008  
 
 
                               
Net system sales
    843,232       590,723       2,516,425       2,136,296  
Net service and field option sales
    91,142       105,770       296,842       323,562  
 
Total net sales
    934,374       696,493       2,813,267       2,459,858  
 
                               
Cost of sales
    549,411       431,062       1,653,220       1,483,334  
 
Gross profit on sales
    384,963       265,431       1,160,047       976,524  
 
                               
Research and development costs, net of credits
    120,077       130,157       356,829       388,657  
Amortization of in process R&D
                23,148        
Selling, general and administrative costs
    56,045       51,933       168,771       165,628  
 
Income from operations
    208,841       83,341       611,299       422,239  
 
                               
Interest income
    9,527       7,059       27,958       17,633  
 
Income from operations before income taxes
    218,368       90,400       639,257       439,872  
 
                               
Provision for income taxes
    (52,089 )     (17,106 )     (160,797 )     (29,478 )
 
Net income
    166,279       73,294       478,460       410,394  
 
                               
Basic net income per ordinary share
    0.35       0.17       1.01       0.95  
Diluted net income per ordinary share
    0.35  2,3      0.17  3      1.00  2,3      0.94  3
 
                               
Number of ordinary shares used in computing per share amounts (in thousands):                        
Basic
    474,557       431,672       472,842       431,498  
Diluted
    481,724  2,3     434,491  3     479,881  2,3     434,859  3
ASML — Ratios and Other Data 1,4
                                 
    Three months ended,     Nine months ended,  
    Sep 30, 2007     Sep 28, 2008     Sep 30, 2007     Sep 28, 2008  
 
 
                               
Gross profit as a % of net sales
    41.2       38.1       41.2       39.7  
Income from operations as a % of net sales
    22.4       12.0       21.7       17.2  
Net income as a % of net sales
    17.8       10.5       17.0       16.7  
Shareholders’ equity as a % of total assets
    35.7       50.3       35.7       50.3  
Income taxes as a % of income before income taxes
    23.9       18.9       25.2       6.7  
Sales of systems total (in units)
    59       37       205       126  
ASP of systems sales (EUR million)
    14.3       16.0       12.3       17.0  
Value of backlog systems total (EUR million)
    1,769       1,028       1,769       1,028  
Backlog systems total (in units)
    90       53       90       53  
ASP of backlog systems (EUR million)
    19.7       19.4       19.7       19.4  
Value of bookings systems total (EUR million)
    857       498       2,167       1,443  
Net bookings total (in units)
    40       31       132       90  
ASP of bookings systems (EUR million)
    21.4       16.1       16.4       16.0  
Number of employees
    6,403       6,907       6,403       6,907  

 


 

ASML — Summary U.S. GAAP Consolidated Balance Sheets 1,4
                 
(in thousands EUR)   Dec 31, 2007     Sep 28, 2008  
 
 
               
ASSETS
               
 
               
Cash and cash equivalents
    1,271,636       1,312,993  
Accounts receivable, net
    637,975       574,230  
Inventories, net
    1,102,210       1,134,039  
Deferred tax assets short-term
    73,019       82,767  
Other current assets
    234,529       261,341  
 
Total current assets
    3,319,369       3,365,370  
 
               
Deferred tax assets long-term
    141,032       139,351  
Other assets
    59,991       50,632  
Goodwill
    128,271       129,238  
Other intangible assets, net
    38,195       28,846  
Property, plant and equipment, net
    380,894       503,057  
 
Total assets
    4,067,752       4,216,494  
 
               
LIABILITIES AND SHAREHOLDERS’ EQUITY
               
 
               
Current liabilities
    1,321,437       1,273,016  
Deferred tax and other liabilities
    245,415       215,182  
Other deferred liabilities
    7,936       8,749  
Other long-term debt
    602,016       596,699  
 
Total liabilities
    2,176,804       2,093,646  
 
               
Shareholders’ equity
    1,890,948       2,122,848  
 
Total liabilities and shareholders’ equity
    4,067,752       4,216,494  

 


 

ASML — Summary U.S. GAAP Consolidated Statements of Cash Flows 1,4
                                 
    Three months ended,     Nine months ended,  
(in thousands EUR)   Sep 30, 2007     Sep 28, 2008     Sep 30, 2007     Sep 28, 2008  
 
 
                               
CASH FLOWS FROM OPERATING ACTIVITIES
                               
 
                               
Net income
    166,279       73,294       478,460       410,394  
 
                               
Depreciation and amortization
    28,008       29,177       105,527       86,298  
Disposals of property, plant and equipment
    1,698       1,413       12,572       3,828  
Share-based payments
    3,675       3,687       10,342       10,362  
Change in tax assets and liabilities
    (5,306 )     (5,970 )     24,274       (98,283 )
Change in assets and liabilities
    (20,024 )     (80,747 )     (10,083 )     5,584  
 
Net cash provided by operating activities
    174,330       20,854       621,092       418,183  
 
                               
CASH FLOWS FROM INVESTING ACTIVITIES
                               
 
                               
Purchases of property, plant and equipment
    (49,676 )     (68,237 )     (125,188 )     (188,711 )
Proceeds from sale of property, plant and equipment
                3,355        
Purchases of intangible assets
          (35 )           (35 )
Acquisition of subsidiary (net of cash acquired)
                (188,011 )      
 
Net cash used in investing activities
    (49,676 )     (68,272 )     (309,844 )     (188,746 )
 
                               
CASH FLOWS FROM FINANCING ACTIVITIES
                               
 
                               
Purchase of shares in conjunction with conversion rights of bond holders and stock options
                (156,253 )     (87,603 )
Dividend paid
          (394 )           (107,841 )
Net proceeds from issuance of shares and stock options
    19,464       1,439       40,505       4,967  
Net proceeds from issuance of bonds
                593,790        
Excess tax benefits from stock options
    6,226       (1,943 )     7,062       4,027  
Redemption and/or repayment of debt
    (1,530 )     (1,280 )     (1,875 )     (1,280 )
 
Net cash provided by (used in) financing activities
    24,160       (2,178 )     483,229       (187,730 )
 
                               
 
Net cash flows
    148,814       (49,596 )     794,477       41,707  
 
                               
Effect of changes in exchange rates on cash
    (2,846 )     1,691       (5,107 )     (350 )
 
Net increase (decrease) in cash & cash equivalents
    145,968       (47,905 )     789,370       41,357  

 


 

ASML — Quarterly Summary U.S. GAAP Consolidated Statements of Operations1,4
                                         
    Three months ended,  
(in millions EUR, except per share data)   Sep 30,
2007
    Dec 31,
2007
    Mar 30,
2008
    Jun 29,
2008
    Sep 28,
2008
 
 
 
                                       
Net system sales
    843.2       834.8       820.0       725.6       590.7  
Net service and field option sales
    91.2       120.1       99.2       118.6       105.8  
 
Total net sales
    934.4       954.9       919.2       844.2       696.5  
 
                                       
Cost of sales
    549.4       565.3       545.6       506.7       431.1  
 
Gross profit on sales
    385.0       389.6       373.6       337.5       265.4  
 
                                       
Research and development costs, net of credits
    120.1       129.3       128.3       130.2       130.2  
Selling, general and administrative costs
    56.0       56.9       57.3       56.4       51.9  
 
Income from operations
    208.9       203.4       188.0       150.9       83.3  
 
                                       
Interest income
    9.5       5.5       4.2       6.4       7.1  
 
Income from operations before income taxes
    218.4       208.9       192.2       157.3       90.4  
 
                                       
Benefit from (provision for) income taxes
    (52.1 )     (8.1 )     (47.1 )     34.7       (17.1 )
 
Net income
    166.3       200.8       145.1       192.0       73.3  
 
                                       
Basic net income per ordinary share
    0.35       0.46       0.34       0.45       0.17  
Diluted net income per ordinary share 2,3
    0.35       0.45       0.33       0.44       0.17  
 
                                       
Number of ordinary shares used in computing per share amounts (in thousands):
                             
Basic
    474,557       439,317       431,600       431,221       431,672  
Diluted 2,3
    481,724       444,569       434,959       434,585       434,491  
ASML — Quarterly Summary Ratios and other data 1,4
                                         
    Three months ended,  
    Sep 30,
2007
    Dec 31,
2007
    Mar 30,
2008
    Jun 29,
2008
    Sep 28,
2008
 
 
 
                                       
Gross profit as a % of net sales
    41.2       40.8       40.6       40.0       38.1  
Income from operations as a % of net sales
    22.4       21.3       20.5       17.9       12.0  
Net income as a % of net sales
    17.8       21.0       15.8       22.7       10.5  
Shareholders’ equity as a % of total assets
    35.7       46.5       44.5       49.7       50.3  
Income taxes as a % of income before income taxes
    23.9       3.9       24.5       (22.1 )     18.9  
Sales of systems total (in units)
    59       55       50       39       37  
ASP of system sales (EUR million)
    14.3       15.2       16.4       18.6       16.0  
Value of backlog systems total (EUR million)
    1,769       1,697       1,167       1,106       1,028  
Backlog systems total (in units)
    90       89       65       59       53  
ASP of backlog systems (EUR million)
    19.7       19.1       18.0       18.8       19.4  
Value of booking systems total (EUR million)
    857       803       312       632       498  
Net bookings total (in units)
    40       54       26       33       31  
ASP of bookings systems (EUR million)
    21.4       14.9       12.0       19.2       16.1  
Number of employees
    6,403       6,582       6,765       6,821       6,907  

 


 

ASML — Summary U.S. GAAP Consolidated Balance Sheets 1,4
                                         
(in millions EUR)   Sep 30,
2007
    Dec 31,
2007
    Mar 30,
2008
    Jun 29,
2008
    Sep 28,
2008
 
 
 
                                       
ASSETS
                                       
 
                                       
Cash and cash equivalents
    2,445.2       1,271.6       1,397.1       1,360.9       1,313.0  
Accounts receivable, net
    611.7       638.0       741.5       516.9       574.2  
Inventories, net
    1,021.2       1,102.2       1,152.0       1,130.2       1,134.0  
Deferred tax assets short-term
    131.3       73.0       71.1       69.8       82.8  
Other current assets
    214.2       234.6       267.6       262.2       261.4  
 
Total current assets
    4,423.6       3,319.4       3,629.3       3,340.0       3,365.4  
 
                                       
Deferred tax assets long-term
    143.5       141.0       135.8       157.7       139.4  
Other assets
    39.9       60.0       85.7       39.3       50.6  
Goodwill
    133.4       128.3       119.7       119.8       129.2  
Other intangible assets, net
    44.2       38.2       32.5       30.1       28.8  
Property, plant and equipment, net
    343.3       380.9       401.4       458.1       503.1  
 
Total assets
    5,127.9       4,067.8       4,404.4       4,145.0       4,216.5  
 
                                       
LIABILITIES AND SHAREHOLDERS’ EQUITY
                                       
 
                                       
Current liabilities
    2,391.5       1,321.4       1,562.3       1,247.3       1,273.0  
Deferred tax and other liabilities
    248.3       245.4       261.5       227.0       215.2  
Other deferred liabilities
    8.2       8.0       7.1       18.5       8.8  
Convertible subordinated debt
    44.5                          
Other long-term debt
    604.0       602.0       615.3       591.6       596.7  
 
Total liabilities
    3,296.5       2,176.8       2,446.2       2,084.4       2,093.7  
 
                                       
Shareholders’ equity
    1,831.4       1,891.0       1,958.2       2,060.6       2,122.8  
 
Total liabilities and shareholders’ equity
    5,127.9       4,067.8       4,404.4       4,145.0       4,216.5  

 


 

ASML — Summary U.S. GAAP Consolidated Statements of Cash Flows 1,4
                                         
    Three months ended,  
    Sep 30,     Dec 31,     Mar 30,     Jun 29,     Sep 28,  
(in millions EUR)   2007     2007     2008     2008     2008  
 
 
                                       
CASH FLOWS FROM OPERATING ACTIVITIES
                                       
 
                                       
Net income
    166.3       200.8       145.1       192.0       73.3  
 
                                       
Depreciation and amortization
    28.0       29.8       30.6       26.5       29.2  
Disposals of property, plant and equipment
    1.7       1.6       1.1       1.3       1.4  
Share-based payments
    3.7       6.2       3.5       3.1       3.7  
Change in tax assets and liabilities
    (5.3 )     (0.6 )     21.8       (114.1 )     (6.0 )
Change in assets and liabilities
    (20.1 )     (157.9 )     65.2       21.2       (80.7 )
 
Net cash provided by operating activities
    174.3       79.9       267.3       130.0       20.9  
 
                                       
CASH FLOWS FROM INVESTING ACTIVITIES
                                       
 
                                       
Purchases of property, plant and equipment
    (49.7 )     (54.0 )     (55.0 )     (65.5 )     (68.3 )
Proceeds from sale of property, plant and equipment
          1.7                    
 
Net cash used in investing activities
    (49.7 )     (52.3 )     (55.0 )     (65.5 )     (68.3 )
 
                                       
CASH FLOWS FROM FINANCING ACTIVITIES
                                       
 
                                       
Capital repayment
          (1,011.9 )                  
Purchase of shares in conjunction with conversion rights of bond holders and stock options
          (203.6 )     (87.6 )            
Dividend paid
                      (107.4 )     (0.4 )
Net proceeds from issuance of shares and stock options
    19.5       22.8       3.0       0.5       1.4  
Excess tax benefits from stock options
    6.2       1.9             6.0       (1.9 )
Redemption and/or repayment of debt
    (1.5 )     (7.8 )                 (1.3 )
 
Net cash provided by (used in) financing activities
    24.2       (1,198.6 )     (84.6 )     (100.9 )     (2.2 )
 
                                       
 
Net cash flows
    148.8       (1,171.0 )     127.7       (36.4 )     (49.6 )
 
                                       
Effect of changes in exchange rates on cash
    (2.8 )     (2.6 )     (2.2 )     0.2       1.7  
 
Net increase (decrease) in cash & cash equivalents
    146.0       (1,173.6 )     125.5       (36.2 )     (47.9 )

 


 

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 — IFRS 1,4
Net income
                                 
    Three months ended,     Nine months ended,  
(in thousands EUR)   Sep 30, 2007     Sep 28, 2008     Sep 30, 2007     Sep 28, 2008  
 
Net income under U.S. GAAP
    166,279       73,294       478,460       410,394  
Share-based payments (see Note 1)
    280       (2,492 )     293       (3,009 )
Capitalization of development costs (see Note 2)
    9,594       14,867       29,575       55,197  
Convertible subordinated notes (see Note 3)
    (2,265 )           (6,661 )      
Income taxes (see Note 4)
          (3,119 )     (7,648 )     (3,081 )
 
Net income under IFRS
    173,888       82,550       494,019       459,501  
Shareholders’ equity
                                         
    Sep 30,     Dec 31,     Mar 30,     Jun 29,     Sep 28,  
(in thousands EUR)   2007     2007     2008     2008     2008  
 
Shareholders’ equity under U.S. GAAP
    1,831,438       1,890,948       1,958,159       2,060,575       2,122,848  
Share-based payments (see Note 1)
    7,126       787       (3,420 )     (3,266 )     (7,904 )
Capitalization of development costs (see Note 2)
    120,344       138,424       157,900       176,818       193,780  
Convertible subordinated notes (see Note 3)
    2,894                          
Income taxes (see Note 4)
          8,852       9,186       8,478       5,969  
 
Shareholders’ equity under IFRS
    1,961,802       2,039,011       2,121,825       2,242,605       2,314,693  
Notes to the reconciliation from U.S. GAAP to IFRS
Note 1 Share-based Payments
Under IFRS, ASML applies IFRS 2, “Share-based Payments” beginning from January 1, 2004. In accordance with IFRS 2, ASML records as an expense the fair value of its share-based payments with respect to stock options granted to its employees after November 7, 2002.
Under U.S. GAAP, ASML applies SFAS No. 123(R) “Share-Based Payment” which is a revision of SFAS No.123. SFAS 123(R) requires companies to recognize the cost of employee services received in exchange for awards of equity instruments based upon the grant-date fair value of those instruments.
Note 2 Capitalization of development costs
Under IFRS, ASML applies IAS 38, “Intangible Assets”. In accordance with IAS 38, capitalized development expenditures are amortized over the expected useful life of the related product generally ranging between 2 and 3 years. Amortization starts when the developed product is ready for volume production.
Under U.S. GAAP, ASML applies SFAS No. 2, “Accounting for Research and Development Costs”. In accordance with SFAS No. 2, ASML charges costs relating to research and development to operating expense as incurred.
Note 3 Convertible Subordinated Notes
Under IFRS, ASML applies IAS 32 “Financial instruments: Disclosure and presentation” and IAS 39 “Financial instruments: Recognition and measurement” beginning from January 1, 2005. In accordance with IAS 32 and IAS 39, ASML accounts separately for the equity and liability component of its convertible notes (“Split accounting”). The equity component relates to the grant of a conversion option to shares to the holder of the bond. Split accounting results in additional interest charges.
Under U.S. GAAP, ASML accounts for its convertible bonds as a liability at the principal amount outstanding. As of December 31, 2007 ASML has no Convertible Subordinated Notes outstanding.

 


 

Note 4 Income taxes
Under IFRS, ASML applies IAS 12, “Income Taxes” beginning from January 1, 2005. In accordance with IAS 12, unrealized net income resulting from intercompany transactions that is eliminated from the carrying amount of assets on consolidation gives rise to a temporary difference for which deferred taxes must be recognized on consolidation. The deferred taxes are calculated based on the tax rate applicable in the purchaser’s tax jurisdiction.
Under U.S. GAAP, the elimination of unrealized net income from intercompany transactions that are eliminated from the carrying amount of assets on consolidation, give rise to a temporary difference for which prepaid taxes must be recognized on consolidation. Contrary to IFRS, the prepaid taxes under U.S. GAAP are calculated based on the tax rate applicable in the seller’s tax jurisdiction.
“Safe Harbor” Statement under the US Private Securities Litigation Reform Act of 1995: the matters discussed in this document may include forward-looking statements, including statements made about our outlook, realization of backlog, IC unit demand, financial results, average sales price, gross margin and expenses. These forward looking statements are subject to risks and uncertainties including, but not limited to: economic conditions, credit market deterioration on consumer confidence which could affect our customers, 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.