Sustained Bookings Indicate Potential Record Revenues in 2010
VELDHOVEN, Netherlands–(Business Wire)–
ASML Holding NV (ASML)(NASDAQ:ASML)(Amsterdam:ASML) today announces 2010 first
quarter results according to US GAAP as follows:

* Q1 2010 net sales of EUR 742 million versus Q4 2009 net sales of EUR 581
million (Q1 2009 net sales of EUR 184 million).
* Q1 2010 net income of EUR 107 million, or 14.5 percent of net sales, versus a
Q4 2009 net income of EUR 50 million or 8.7 percent of net sales (Q1 2009 net
loss of EUR 117 million or 63.8 percent of net sales).
* Q1 2010 net bookings valued at EUR 1,004 million with 50 systems including 33
new and 17 used systems, leading to an order backlog valued at EUR 2,170 million
as of March 28, 2010.

“Our first quarter 2010 sales rose to above EUR 740 million and bookings came in
at EUR 1 billion, in line with our expectations and adding confidence in a
prolonged recovery of the semiconductor industry,” said Eric Meurice, President
and Chief Executive Officer of ASML. “To enable our customers` next technology
nodes, we have now shipped nine NXT:1950is, our most advanced TWINSCAN™ dual
stage scanner, having proven critical dimension (CD) imaging uniformity well
below 1 nanometer (nm) and overlay of less than 2 nm, which is industry leading
performance. By the end of the quarter we had 28 NXT:1950i systems in backlog
and expect to ship 11 in Q2 2010. In parallel, we continue to make good progress
with our next generation of optical lithography, Extreme Ultraviolet (EUV): we
received our sixth order for our NXE:3100 pre-production system, confirming the
appetite from all semiconductor segments for EUV as a production-robust,
cost-effective shrink enabler for the future. The first NXE:3100s are scheduled
to be shipped during the second half of 2010,” Meurice added.

Operations Update

In Q1 2010, ASML`s net sales of EUR 742 million included 23 new and 11 used
systems, totaling net system sales of EUR 632 million, and net service and field
options sales of EUR 110 million. Net system sales for Q4 2009 included the
shipment of 19 new and 6 used machines, totaling EUR 432 million, and net
service and field options sales of EUR 149 million.

The Q1 2010 average selling price for a new system was EUR 25.8 million,
compared with the Q4 2009 average selling price for a new system of EUR 19.7
million. The Q1 2010 average selling price for all ASML systems sold was EUR
18.6 million, compared with the Q4 2009 average selling price of EUR 17.3
million.

Q1 2010 net bookings totaled 50 systems valued at EUR 1,004 million, including
advanced immersion systems for critical layers as well as KrF systems for less
critical layers mainly ordered by Foundry customers for capacity additions, with
a total average selling price of EUR 20.1 million.

ASML`s order backlog as of March 28, 2010 was EUR 2,170 million, totaling 85
systems with an average selling price of EUR 25.5 million. ASML`s backlog as of
December 31, 2009 was valued at EUR 1,853 million, totaling 69 systems with an
average selling price of EUR 26.8 million.

In Q1 2010, ASML generated net income of EUR 107 million, or EUR 0.25 per
ordinary share as compared with net income in Q4 2009 of EUR 50 million or EUR
0.12 per ordinary share.

The company`s Q1 2010 gross margin was 40.3 percent compared with the Q4 2009
gross margin of 38.0 percent.

Q1 2010 research and development (R&D) costs were EUR 120 million including
credits, compared with Q4 2009 R&D costs of EUR 115 million including credits.

As anticipated, selling, general and administrative (SG&A) costs were EUR 41
million in Q1 2010, compared with SG&A costs of EUR 36 million in Q4 2009.

Net cash from operations was EUR 41 million in Q1 2010. ASML ended Q1 2010 with
EUR 1,087 million in cash and cash equivalents, compared with EUR 1,037 million
at the end of Q4 2009.

Outlook

“We booked EUR 1,004 million worth of systems in the first quarter of 2010 and
expect a similar level of bookings in the second quarter, confirming the
semiconductor industry executing on its upturn cycle,” Eric Meurice said. “We
expect this cycle to be sustained by the normal technology transitions of the
early adopters, the subsequent technology conversions by second tier DRAM
makers, the next Flash memory upgrade cycle anticipated for the second half of
2010, as well as Foundry`s structural capacity build at advanced nodes. This
puts ASML on a track to 2010 full year sales above our 2007 peak of EUR 3.8
billion; we calculate that the lithography systems sold in 2010 will add
approximately 15 percent integrated circuit (IC) unit production capacity to the
semiconductor market, conforming to the demand prediction of most industry
analysts. This controlled capacity increase supports the possibility of
sustained growth in 2011 if IC unit growth continues per the historical trend,”
Meurice said.

ASML expects Q2 2010 net sales of around EUR 1 billion, EUR 50 million higher
than guided at the publication of our Q4 2009 results, and gross margin in Q2
2010 of about 42 percent. R&D expenditures are expected to be at EUR 125 million
including credits and SG&A costs are expected at EUR 42 million.

About ASML

ASML is the world’s leading provider of lithography systems for the
semiconductor industry, manufacturing complex machines that are critical to the
production of integrated circuits or chips. Headquartered in Veldhoven, the
Netherlands, ASML is traded on Euronext Amsterdam and NASDAQ under the symbol
ASML. ASML has more than 6,500 employees (expressed in full time equivalents),
serving chip manufacturers in more than 60 locations in 15 countries. More
information about our company, our products and technology, and career
opportunities is available on our website: www.asml.com

Investor and Media Conference Call

A conference call for investors and media will be hosted by CEO Eric Meurice and
CFO Peter Wennink at 15:00 PM Central European Time / 09:00 AM Eastern U.S.
time. Dial-in numbers are: in the Netherlands +31 10 29 44 271 and the US +1 718
247 0884 (US participants will have to quote the following confirmation code
when dialing into the conference: 1546105). To listen to the conference call,
access is also available via www.asml.com

A replay of the Investor and Media Call will be available on www.asml.com

IFRS Financial Reporting

ASML’s primary accounting standard for quarterly earnings releases and annual
reports is US GAAP, the accounting standard generally accepted in the United
States. Quarterly US GAAP statements of operations, statements of cash flows and
balance sheets, and a reconciliation of net income/(loss) and equity from US
GAAP to IFRS are available on www.asml.com

In addition to reporting financial figures in accordance with US GAAP, ASML also
reports financial figures in accordance with IFRS for statutory purposes. The
most significant differences between US GAAP and IFRS that affect ASML concern
the capitalization of certain product development costs, the accounting of
share-based payment plans, the accounting of income taxes and the accounting of
reversal of inventory write-downs. Quarterly IFRS consolidated income statement,
consolidated statement of cash flows, consolidated statement of financial
position and a reconciliation of net income/(loss) and equity from US GAAP to
IFRS are available on www.asml.com

The consolidated balance sheets of ASML Holding N.V. as of March 28, 2010, the
related consolidated statements of operations and consolidated statements of
cash flows for the quarter ended March 28, 2010 as presented in this press
release are unaudited.

Regulated Information

This press release, the US GAAP consolidated financial statements and the IFRS
consolidated financial statements published on www.asml.com comprise regulated
information within the meaning of the Dutch Financial Markets Supervision Act
(Wet op het financieel toezicht).

Forward Looking Statements

“Safe Harbor” Statement under the US Private Securities Litigation Reform Act of
1995: the matters discussed in this document may include forward-looking
statements, including statements made about our outlook, realization of backlog,
IC unit demand, financial results, average selling price, gross margin and
expenses. These forward looking statements are subject to risks and
uncertainties including, but not limited to: economic conditions, product demand
and semiconductor equipment industry capacity, worldwide demand and
manufacturing capacity utilization for semiconductors (the principal product of
our customer base), including the impact of general economic conditions on
consumer confidence and demand for our customers` products, competitive products
and pricing, manufacturing efficiencies, new product development and customer
acceptance of new products, ability to enforce patents and protect intellectual
property rights, the risk 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.

ASML – Summary U.S. GAAP Consolidated Statements of Operations 1,2

Three months ended,
Mar 29, 2009 Mar 28, 2010
(in millions EUR, except per share data)

Net system sales 101.1 631.6
Net service and field option sales 82.5 110.2
Total net sales 183.6 741.8

Cost of sales 171.2 443.2
Gross profit on sales 12.4 298.6

Research and development costs 118.3 120.3
Selling, general and administrative costs 3 40.4 41.4
Income (loss) from operations (146.3) 136.9

Interest expense 3 (1.7) (2.8)
Income (loss) from operations before income taxes (148.0) 134.1

(Provision for) benefit from income taxes 30.8 (26.8)
Net income (loss) (117.2) 107.3

Basic net income (loss) per ordinary share (0.27) 0.25
Diluted net income (loss) per ordinary share 4 (0.27) 0.25

Number of ordinary shares used in computing per share amounts (in millions):
Basic 432.1 434.0
Diluted 4 432.1 437.9

ASML – Ratios and Other Data 1,2

Three months ended,
Mar 29, 2009 Mar 28, 2010

Gross profit as a % of net sales 6.7 40.3
Income (loss) from operations as a % of net sales 3 (79.7) 18.5
Net income (loss) as a % of net sales (63.8) 14.5
Shareholders` equity as a % of total assets 3 47.5 41.2
Income taxes as a % of income before income taxes (20.8) (20.0)
Sales of systems (in units) 11 34
ASP of systems sales (EUR million) 9.2 18.6
Value of systems backlog (EUR million) 853 2,170
Systems backlog (in units) 38 85
ASP of systems backlog (EUR million) 22.4 25.5
Value of booked systems (EUR million) 207 1,004
Net bookings (in units) 8 50
ASP of booked systems (EUR million) 25.8 20.1
Number of payroll employees in FTEs 6,715 6,591
Number of temporary employees in FTEs 959 1,331

ASML – Summary U.S. GAAP Consolidated Balance Sheets 1,2

Dec 31, 2009 Mar 28, 2010
(in millions EUR)

ASSETS
Cash and cash equivalents 1,037.1 1,087.3
Accounts receivable, net 377.4 629.8
Finance receivables, net 21.6 23.3
Current tax assets 11.3 37.5
Inventories, net 963.4 1,155.5
Deferred tax assets 119.4 107.5
Other assets 218.7 247.3
Total current assets 2,748.9 3,288.2

Deferred tax assets 133.3 127.9
Other assets 77.0 99.1
Goodwill 131.5 141.1
Other intangible assets, net 18.1 17.8
Property, plant and equipment, net 3 655.4 720.7
Total non-current assets 1,015.3 1,106.6

Total assets 3,764.2 4,394.8

LIABILITIES AND SHAREHOLDERS` EQUITY
Current liabilities 1,044.2 1,613.0

Accrued liabilities and other liabilities 44.3 45.9
Deferred and other tax liabilities 188.4 200.1
Provisions 12.7 13.0
Long-term debt 3 699.8 711.8
Total non-current liabilities 945.2 970.8

Total liabilities 1,989.4 2,583.8

Shareholders` equity 1,774.8 1,811.0
Total liabilities and shareholders` equity 3,764.2 4,394.8

ASML – Summary U.S. GAAP Consolidated Statements of Cash Flows 1,2

Three months ended,
Mar 29, 2009 Mar 28, 2010
(in millions EUR)

CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) (117.2) 107.3

Depreciation and amortization 3 38.7 34.7
Impairment 2.6 0.8
Loss on disposals of property, plant and equipment 2.6 0.6
Share-based payments 3.5 2.8
Allowance for doubtful debts – 0.2
Allowance for obsolete inventory 22.1 13.8
Deferred income taxes (27.0) 23.7
Change in assets and liabilities 157.3 (142.8)
Net cash provided by operating activities 82.6 41.1

CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property, plant and equipment (43.9) (7.2)
Proceeds from sale of property, plant and equipment 1.2 –
Net cash used in investing activities (42.7) (7.2)

CASH FLOWS FROM FINANCING ACTIVITIES
Net proceeds from issuance of shares and stock options 0.1 10.4
Excess tax deficiencies from stock options (0.2) –
Redemption and/or repayment of debt 3 (0.4) (0.4)
Net cash provided by (used in) financing activities (0.5) 10.0

Net cash flows 39.4 43.9

Effect of changes in exchange rates on cash 2.4 6.3
Net increase in cash & cash equivalents 41.8 50.2

ASML – Quarterly Summary U.S. GAAP Consolidated Statements of Operations 1,2

Three months ended,

Mar 29, Jun 28, Sep 27, Dec 31, Mar 28,
2009 2009 2009 2009 2010
(in millions EUR, except per share data)

Net system sales 101.1 183.3 458.7 431.8 631.6
Net service and field option sales 82.5 93.3 96.6 148.8 110.2
Total net sales 183.6 276.6 555.3 580.6 741.8

Cost of sales 171.2 242.2 364.0 360.3 443.2
Gross profit on sales 12.4 34.4 191.3 220.3 298.6

Research and development costs 118.3 117.9 115.2 115.4 120.3
Selling, general and administrative costs 3 40.4 40.3 37.5 36.5 41.4
Income (loss) from operations (146.3) (123.8) 38.6 68.4 136.9

Interest expense 3 (1.7) (0.9) (2.4) (3.5) (2.8)
Income (loss) from operations before income taxes (148.0) (124.7) 36.2 64.9 134.1

(Provision for) benefit from income taxes 30.8 20.7 (16.4) (14.4) (26.8)
Net income (loss) (117.2) (104.0) 19.8 50.5 107.3

Basic net income (loss) per ordinary share (0.27) (0.24) 0.05 0.12 0.25
Diluted net income (loss) per ordinary share 4 (0.27) (0.24) 0.05 0.12 0.25

Number of ordinary shares used in computing per share amounts (in millions):
Basic 432.1 432.5 432.7 433.2 434.0
Diluted 4 432.1 432.5 435.0 437.0 437.9

ASML – Quarterly Summary Ratios and other data 1,2

Three months ended,

Mar 29, Jun 28, Sep 27, Dec 31, Mar 28,
2009 2009 2009 2009 2010

Gross profit as a % of net sales 6.7 12.5 34.4 38.0 40.3
Income (loss) from operations as a % of net sales 3 (79.7) (44.7) 6.9 11.8 18.5
Net income (loss) as a % of net sales (63.8) (37.6) 3.6 8.7 14.5
Shareholders` equity as a % of total assets 3 47.5 47.2 47.3 47.1 41.2
Income taxes as a % of income before income taxes (20.8) (16.6) (45.4) (22.2) (20.0)
Sales of systems (in units) 11 10 24 25 34
ASP of system sales (EUR million) 9.2 18.3 19.1 17.3 18.6
Value of systems backlog (EUR million) 853 1,064 1,353 1,853 2,170
Systems backlog (in units) 38 43 54 69 85
ASP of systems backlog (EUR million) 22.4 24.7 25.1 26.8 25.5
Value of booked systems (EUR million) 207 394 777 956 1,004
Net bookings (in units) 8 15 35 40 50
ASP of booked systems (EUR million) 25.8 26.3 22.2 23.9 20.1
Number of payroll employees in FTEs 6,715 6,597 6,529 6,548 6,591
Number of temporary employees in FTEs 959 868 917 1,137 1,331

ASML – Summary U.S. GAAP Consolidated Balance Sheets 1,2

Mar 29, Jun 28, Sep 27, Dec 31, Mar 28,
2009 2009 2009 2009 2010
(in millions EUR)

ASSETS
Cash and cash equivalents 1,151.0 1,092.7 1,018.0 1,037.1 1,087.3
Accounts receivable, net 291.6 213.5 382.1 377.4 629.8
Finance receivables, net 6.2 0.1 21.1 21.6 23.3
Current tax assets – – – 11.3 37.5
Inventories, net 936.8 926.1 882.4 963.4 1,155.5
Deferred tax assets 74.9 70.5 69.0 119.4 107.5
Other assets 240.6 220.2 224.2 218.7 247.3
Total current assets 2,701.1 2,523.1 2,596.8 2,748.9 3,288.2

Finance receivables, net 29.2 20.6 – – –
Deferred tax assets 173.2 198.9 193.5 133.3 127.9
Other assets 89.5 53.8 68.1 77.0 99.1
Goodwill 139.7 134.5 128.6 131.5 141.1
Other intangible assets, net 25.6 22.3 19.0 18.1 17.8
Property, plant and equipment, net 3 624.4 629.3 598.7 655.4 720.7
Total non-current assets 1,081.6 1,059.4 1,007.9 1,015.3 1,106.6

Total assets 3,782.7 3,582.5 3,604.7 3,764.2 4,394.8

LIABILITIES AND SHAREHOLDERS` EQUITY
Current liabilities 1,017.5 940.9 949.3 1,044.2 1,613.0

Accrued liabilities and other liabilities 48.2 45.6 44.7 44.3 45.9
Deferred and other tax liabilities 204.9 200.6 193.7 188.4 200.1
Provisions 16.9 14.8 13.5 12.7 13.0
Long-term debt 3 699.2 689.3 697.2 699.8 711.8
Total non-current liabilities 969.2 950.3 949.1 945.2 970.8

Total liabilities 1,986.7 1,891.2 1,898.4 1,989.4 2,583.8

Shareholders` equity 1,796.0 1,691.3 1,706.3 1,774.8 1,811.0
Total liabilities and shareholders` equity 3,782.7 3,582.5 3,604.7 3,764.2 4,394.8

ASML – Summary U.S. GAAP Consolidated Statements of Cash Flows 1,2

Three months ended,

Mar 29, Jun 28, Sep 27, Dec 31, Mar 28,
2009 2009 2009 2009 2010
(in millions EUR)

CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) (117.2) (104.0) 19.8 50.5 107.3

Depreciation and amortization 3 38.7 35.1 33.8 34.0 34.7
Impairment 2.6 4.4 8.6 0.3 0.8
Loss (gain) on disposals of property, plant and equipment 2.6 (0.4) 0.9 1.0 0.6
Share-based payments 3.5 2.6 2.8 4.5 2.8
Allowance for doubtful debts – 1.1 0.7 0.1 0.2
Allowance for obsolete inventory 22.1 43.9 13.2 7.4 13.8
Deferred income taxes (27.0) (31.2) (4.5) 13.3 23.7
Change in assets and liabilities 157.3 110.7 (140.3) (91.7) (142.8)
Net cash provided by (used in) operating activities 82.6 62.2 (65.0) 19.4 41.1

CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property, plant and equipment (43.9) (39.9) (13.5) (7.7) (7.2)
Proceeds from sale of property, plant and equipment 1.2 5.7 – – –
Net cash used in investing activities (42.7) (34.2) (13.5) (7.7) (7.2)

CASH FLOWS FROM FINANCING ACTIVITIES
Dividend paid – (86.5) – – –
Net proceeds from issuance of shares and stock options 0.1 0.4 4.2 6.4 10.4
Excess tax benefits (deficiencies) from stock options (0.2) 0.5 0.7 1.0 –
Net proceeds from other long-term debt – 0.1 – – –
Redemption and/or repayment of debt 3 (0.4) (0.4) (0.4) (0.4) (0.4)
Net cash provided by (used in) financing activities (0.5) (85.9) 4.5 7.0 10.0

Net cash flows 39.4 (57.9) (74.0) 18.7 43.9

Effect of changes in exchange rates on cash 2.4 (0.4) (0.7) 0.4 6.3
Net increase (decrease) in cash & cash equivalents 41.8 (58.3) (74.7) 19.1 50.2

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 buyer is fixed or determinable; and
collectability 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 cleanroom 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, if any. A system is shipped, and revenue is recognized, only after
all specifications are met and customer sign-off is received or waived. In case
not all specifications are met and the remaining performance obligation is not
essential to the functionality of the system but substantive rather than
inconsequential or perfunctory a portion of the sales price is deferred.
Although each system’s performance is re-tested upon installation at the
customer’s site, ASML has never failed to successfully complete installation of
a system at a customer`s premises.

For arrangements containing multiple elements, the revenue relating to the
undelivered elements is deferred at estimated fair value until delivery of these
elements. Revenue from installation services and service contracts provided to
our customers is initially deferred and is recognized when the installation is
completed and, in case of service contracts, over the life of those contracts.
Revenue from extended and enhanced warranties is recognized in income on a
straight-line basis over the contract period. The costs of providing services
under extended and enhanced warranties are recognized when they occur.

Foreign currency risk management

The Company uses the euro as its invoicing currency in order to limit the
exposure to foreign currency movements. Exceptions may occur on a customer by
customer basis. To the extent that invoicing is done in a currency other than
the euro, the Company is exposed to foreign currency risk.

It is the Company`s policy to hedge material transaction exposures, such as
sales transactions and forecasted purchase transactions. The Company hedges
these exposures through the use of currency contracts.

It is the Company`s policy to hedge material remeasurement exposures. These net
exposures from certain monetary assets and liabilities in non-functional
currencies are hedged with forward contracts.

As of March 28, 2010 other comprehensive income, within equity, includes EUR
60.3 million loss, net of taxes, representing the total anticipated loss to be
charged to net sales, and EUR 3.9 million gain representing the total
anticipated gain to be released to cost of sales which will offset the higher
EUR equivalent of foreign currency denominated forecasted sales and purchase
transactions.

ASML – Reconciliation U.S. GAAP – IFRS 1,2

Net income Three months ended,
Mar 29, 2009 Mar 28, 2010
(in thousands EUR)
Net income (loss) under U.S. GAAP (117.2) 107.3
Share-based payments (see Note 1) (0.5) 0.1
Development costs (see Note 2) 11.5 2.0
Reversal of write-downs (see Note 3) – (3.3)
Income taxes (see Note 4) (1.6) (4.8)
Net income (loss) under IFRS (107.8) 101.3

Shareholders` equity Mar 29, Jun 28, Sep 27, Dec 31, Mar 28,
2009 2009 2009 2009 2010
(in thousands EUR)
Shareholders` equity under U.S. GAAP 1,796.0 1,691.3 1,706.3 1,774.8 1,811.0
Share-based payments (see Note 1) (7.1) (4.9) (0.5) 2.4 3.5
Development costs (see Note 2) 215.4 235.9 259.7 251.5 255.8
Reversal of write-downs (see Note 3) – – 28.5 17.1 13.8
Income taxes (see Note 4) 3.4 2.8 1.4 5.0 0.8
Shareholders` equity under IFRS 2,007.7 1,925.1 1,995.4 2,050.8 2,084.9

Notes to the reconciliation from U.S. GAAP to IFRS

Note 1 Share-based Payments

Under IFRS, ASML applies IFRS 2, “Share-based Payments” beginning from January
1, 2004. In accordance with IFRS 2, ASML records as an expense the fair value of
its share-based payments with respect to stock options and stock granted to its
employees after November 7, 2002. Under IFRS, at period end a deferred tax asset
is computed on the basis of the tax deduction for the share-based payments under
the applicable tax law and is recognized to the extent it is probable that
future taxable profit will be available against which these deductible temporary
differences will be utilized. Therefore, changes in the Company`s share price do
affect the deferred tax asset at period-end and result in adjustments to the
deferred tax asset.

As of January 1, 2006, ASML applies ASC 718 “Compensation- Stock Compensation”
which requires companies to recognize the cost of employee services received in
exchange for awards of equity instruments based upon the grant-date fair value
of those instruments. ASC 718`s general principle is that a deferred tax asset
is established as the Company recognizes compensation costs for commercial
purposes for awards that are expected to result in a tax deduction under
existing tax law. Under U.S. GAAP, the deferred tax recorded on share-based
compensation is computed on the basis of the expense recognized in the financial
statements. Therefore, changes in the Company`s share price do not affect the
deferred tax asset recorded in the Company`s financial statements.

Note 2 Development costs

Under IFRS, ASML applies IAS 38, “Intangible Assets”. In accordance with IAS 38,
ASML capitalizes certain development expenditures that are amortized over the
expected useful life of the related product generally ranging between one and
three years. Amortization starts when the developed product is ready for volume
production.

Under U.S. GAAP, ASML applies ASC 730, “Research and Development”. In accordance
with ASC 730, ASML charges costs relating to research and development to
operating expense as incurred.

Note 3 Reversal of write-downs

Under IFRS, ASML applies IAS 2 (revised), “Inventories”. In accordance with IAS
2, reversal of a prior period write-down as a result of a subsequent increase in
value of inventory should be recognized in the period in which the value
increase occurs.

Under U.S. GAAP, ASML applies ASC 330 Inventory. In accordance with ASC 330
reversal of a write-down is prohibited as a write-down creates a new cost basis.

Note 4 Income taxes

Under IFRS, ASML applies IAS 12, “Income Taxes” beginning from January 1, 2005.
In accordance with IAS 12 unrealized net income resulting from intercompany
transactions that are eliminated from the carrying amount of assets in
consolidation, give rise to a temporary difference for which deferred taxes must
be recognized in consolidation. The deferred taxes are calculated based on the
tax rate applicable in the purchaser`s tax jurisdiction.

Under U.S. GAAP, the elimination of unrealized net income from intercompany
transactions that are eliminated from the carrying amount of assets in
consolidation, give rise to a temporary difference for which prepaid taxes must
be recognized in consolidation. Contrary to IFRS, the prepaid taxes under U.S.
GAAP are calculated based on the tax rate applicable in the seller`s rather than
the purchaser`s tax jurisdiction.

“Safe Harbor” Statement under the US Private Securities Litigation Reform Act of
1995: the matters discussed in this document may include forward-looking
statements, including statements made about our outlook, realization of backlog,
IC unit demand, financial results, average selling price, gross margin and
expenses. These forward looking statements are subject to risks and
uncertainties including, but not limited to: economic conditions, product demand
and semiconductor equipment industry capacity, worldwide demand and
manufacturing capacity utilization for semiconductors (the principal product of
our customer base), including the impact of general economic conditions on
consumer confidence and demand for our customers` products, competitive products
and pricing, manufacturing efficiencies, new product development and customer
acceptance of new products, ability to enforce patents and protect intellectual
property rights, the risk 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.

1All quarterly information in this press release is unaudited.

2Numbers have been rounded for readers` convenience.

3 As of January 1, 2010 ASML adopted ASC 810 “Amendments to FIN 46(R)” which
resulted in the consolidation of the Variable Interest Entity which owns ASML’s
headquarters located in The Netherlands. The comparative figures have been
adjusted to reflect this change in accounting policy. As of January 1, 2010 the
total impact on Property, plant and equipment and Long-term dept amounts to EUR
36.7 million.

4 The calculation of diluted net income per ordinary share assumes the exercise
of options issued under ASML stock option plans for periods in which exercises
would have a dilutive effect, the calculation of diluted net income per ordinary
share does not assume exercise of such options when such exercises would be
antidilutive.

ASML Holding NV
Media Relations:
Corporate Communications
Lucas van Grinsven, +31 40 268 3949
Veldhoven, the Netherlands
or
Investor Relations:
Craig DeYoung, +1 480 383 4005
Tempe, Arizona, USA
or
Franki D`Hoore, +31 40 268 6494
Veldhoven, the Netherlands

Copyright Business Wire 2010