ASML International N.V.
Annual Report 2012

Annual Report
2012

Form 20-F

ASML￿ANNUAL￿REPORT￿2012

United￿States
Securities￿and￿Exchange￿Commission
Washington, D.C. 20549
Form￿20-F
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
for the fiscal year ended December 31, 2012
Commission file number 025566
ASML HOLDING N.V.
(Exact￿Name￿of￿Registrant￿as￿Specified￿in￿Its￿Charter)
THE NETHERLANDS
(Jurisdiction￿of￿Incorporation￿or￿Organization)
DE RUN 6501
5504 DR VELDHOVEN
THE NETHERLANDS
(Address￿of￿Principal￿Executive￿Offices)
Craig DeYoung
Telephone: +1 480 383 4005
Facsimile: +1 480 383 3978
E-mail: craig.deyoung@asml.com
8555 South River Parkway,
Tempe, AZ 85284, USA
(Name,￿Telephone,￿E-mail,￿and￿/￿or￿Facsimile￿number￿and￿Address￿of￿Company￿Contact￿Person)
Securities￿registered￿or￿to￿be￿registered￿pursuant￿to￿Section￿12(b)￿of￿the￿Act:

Title of each class
Ordinary￿Shares
(nominal￿value￿EUR￿0.09￿per￿share)

Name of each exchange on which registered
The￿NASDAQ￿Stock￿Market￿LLC

Securities￿registered￿or￿to￿be￿registered￿pursuant￿to￿Section￿12(g)￿of￿the￿Act:
None
(Title￿of￿Class)
Securities￿for￿which￿there￿is￿a￿reporting￿obligation￿pursuant￿to￿Section￿15(d)￿of￿the￿Act:
None
(Title￿of￿Class)
Indicate￿the￿number￿of￿outstanding￿shares￿of￿each￿of￿the￿issuer’s￿classes￿of
capital￿or￿common￿stock￿as￿of￿the￿close￿of￿the￿period￿covered￿by￿the￿annual￿report.
407,165,221 Ordinary Shares
(nominal value EUR 0.09 per share)
Indicate￿by￿check￿mark￿if￿the￿registrant￿is￿a￿well-known￿seasoned￿issuer,￿as￿defined￿in￿Rule￿405￿of￿the￿Securities￿Act.
Yes￿(x)￿No￿(￿)
If￿this￿report￿is￿an￿annual￿or￿transition￿report,￿indicate￿by￿check￿mark￿if￿the￿registrant
is￿not￿required￿to￿file￿reports￿pursuant￿to￿Section￿13￿or￿15(d)￿of￿the￿Securities￿Exchange￿Act￿of￿1934.
Yes￿(￿)￿No￿(x)
Indicate￿by￿check￿mark￿whether￿the￿registrant:￿(1)￿has￿filed￿all￿reports￿required￿to￿be￿filed￿by￿Section￿13￿or￿15(d)￿of￿the
Securities￿Exchange￿Act￿of￿1934￿during￿the￿preceding￿12￿months￿(or￿for￿such￿shorter￿period￿that￿the￿registrant
was￿required￿to￿file￿such￿reports),￿and￿(2)￿has￿been￿subject￿to￿such￿filing￿requirements￿for￿the￿past￿90￿days.
Yes￿(x)￿No￿(￿)
Indicate￿by￿check￿mark￿whether￿the￿registrant￿has￿submitted￿electronically
and￿posted￿on￿its￿corporate￿web￿site,￿if￿any,￿every￿Interactive
Data￿File￿required￿to￿be￿submitted￿and￿posted￿pursuant￿to￿Rule
405￿of￿Regulation￿S-T￿(§232.405￿of￿this￿chapter)￿during￿the
preceding￿12￿months￿(or￿for￿such￿shorter￿period￿that￿the￿registrant￿was￿required￿to￿submit￿and￿post￿such￿files).
Yes￿(x)￿No￿(￿)
Indicate￿by￿check￿mark￿whether￿the￿registrant￿is￿a￿large￿accelerated￿filer,￿an￿accelerated￿filer,￿or￿a￿non-accelerated￿filer.
See￿definition￿of￿"accelerated￿filer￿and￿large￿accelerated￿filer"￿in￿Rule￿12b-2￿of￿the￿Exchange￿Act.￿(Check￿one):
Large￿accelerated￿filer￿(x)￿Accelerated￿filer￿(￿)￿Non-accelerated￿filer￿(￿)
Indicate￿by￿check￿mark￿which￿basis￿of￿accounting￿the￿registrant￿has￿used￿to￿prepare
the￿financial￿statements￿included￿in￿this￿filing:
U.S.￿GAAP￿(x)￿International￿Financial￿Reporting￿Standards￿as￿issued￿by￿the
￿International￿Accounting￿Standards￿Board￿(￿)￿Other￿(￿)
If￿"Other"￿has￿been￿checked￿in￿response￿to￿the￿previous￿question,￿indicate￿by￿checkmark
which￿financial￿statement￿item￿the￿registrant￿has￿elected￿to￿follow.
Item￿17￿(￿)￿Item￿18(￿)
If￿this￿is￿an￿annual￿report,￿indicate￿by￿check￿mark￿whether￿the￿registrant￿is￿a
shell￿company￿(as￿defined￿in￿Rule￿12b-2￿of￿the￿Exchange￿Act)
Yes￿(￿)￿No￿(x)
Name￿and￿address￿of￿person￿authorized￿to￿receive￿notices￿and￿communications
from￿the￿Securities￿and￿Exchange￿Commission:
Richard A. Ely
Skadden, Arps, Slate, Meagher & Flom (UK) LLP
40 Bank Street, Canary Wharf London E14 5DS England

ASML￿ANNUAL￿REPORT￿2012

Contents

Part I

Item 1 Identity of Directors, Senior Management and Advisors

Item 2 Offer Statistics and Expected Timetable

Item 3 Key Information
A. Selected￿Financial￿Data
B. Capitalization￿and￿Indebtedness
C. Reasons￿for￿the￿Offer￿and￿Use￿of￿Proceeds
D. Risk￿Factors

Item 4 Information on the Company
A. History￿and￿Development￿of￿the￿Company
B. Business￿Overview
C. Organizational￿Structure
D. Property,￿Plant￿and￿Equipment

Item 4A Unresolved Staff Comments

Item 5 Operating and Financial Review and Prospects
A. Operating￿Results
B. Liquidity￿and￿Capital￿Resources
C. Research￿and￿Development,￿Patents￿and￿Licenses,￿etc
D. Trend￿Information
E. Off-Balance￿Sheet￿Arrangements
F. Tabular￿Disclosure￿of￿Contractual￿Obligations
G. Safe￿Harbor

Item 6 Directors, Senior Management and Employees
A. Directors￿and￿Senior￿Management
B. Compensation
C. Board￿Practices
D. Employees
E. Share￿Ownership

Item 7 Major Shareholders and Related Party Transactions
A. Major￿Shareholders
B. Related￿Party￿Transactions
C.

Interests￿of￿Experts￿&￿Counsel

Item 8 Financial Information
A. Consolidated￿Statements￿and￿Other￿Financial￿Information
B. Significant￿Changes

Item 9 The Offer and Listing
A. Offer￿and￿Listing￿Details
B. Plan￿of￿Distribution
C. Markets
D. Selling￿Shareholders
E. Dilution
F. Expenses￿of￿the￿Issue

Item 10 Additional Information
A. Share￿Capital
B. Memorandum￿and￿Articles￿of￿Association
C. Material￿Contracts
D. Exchange￿Controls
E. Taxation
F. Dividends￿and￿Paying￿Agents
G. Statement￿by￿Experts
H. Documents￿on￿Display
I. Subsidiary￿Information

1
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1
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1

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11

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20
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20

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40

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48

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51

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51

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53

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ASML￿ANNUAL￿REPORT￿2012

Item 11 Quantitative and Qualitative Disclosures About Market Risk

Item 12 Description of Securities Other Than Equity Securities

63
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65
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Part II

67
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67
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67
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67

Item 13 Defaults, Dividend Arrearages and Delinquencies

Item 14 Material Modifications to the Rights of Security Holders and Use of Proceeds

Item 15 Controls and Procedures

Item 16   
A. Audit￿Committee￿Financial￿Expert
B. Code￿of￿Ethics
C. Principal￿Accountant￿Fees￿and￿Services
D. Exemptions￿from￿the￿Listing￿Standards￿for￿Audit￿Committees
E. Purchases￿of￿Equity￿Securities￿by￿the￿Issuer￿and￿Affiliated￿Purchasers
F. Change￿in￿Registrant’s￿Certifying￿Accountant
G. Corporate￿Governance
H. Mine￿Safety￿Disclosure

￿
Part III

Item 17 Financial Statements

Item 18 Financial Statements

Item 19 Exhibits

73
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73
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73
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ASML￿ANNUAL￿REPORT￿2012

ASML￿ANNUAL￿REPORT￿2012

Part I

Special Note Regarding Forward-Looking Statements
In￿addition￿to￿historical￿information,￿this￿Annual￿Report￿on￿Form￿20-F￿("Annual￿Report")￿contains￿statements￿relating￿to
our￿future￿business￿and/or￿results.￿These￿statements￿include￿certain￿projections￿and￿business￿trends￿that￿are￿"forward-
looking"￿within￿the￿meaning￿of￿the￿Private￿Securities￿Litigation￿Reform￿Act￿of￿1995.￿You￿can￿generally￿identify￿these
statements￿by￿the￿use￿of￿words￿like￿"may",￿"will",￿"could",￿"should",￿"project",￿"believe",￿"anticipate",￿"expect",￿"plan",
"estimate",￿"forecast",￿"potential",￿"intend",￿"continue"￿and￿variations￿of￿these￿words￿or￿comparable￿words.￿They
appear￿in￿a￿number￿of￿places￿throughout￿this￿report￿and￿include,￿without￿limitation,￿expected￿sales￿trends,￿expected
shipments￿of￿tools,￿productivity￿of￿our￿tools,￿purchase￿commitments,￿intercircuit￿("IC")￿unit￿demand,￿financial￿results,
statements￿about￿our￿co-investment￿program￿including￿potential￿funding￿commitments￿in￿connection￿with￿that￿program,
statements￿about￿our￿agreement￿to￿acquire￿Cymer￿Inc.￿("Cymer")￿including￿the￿expected￿benefits￿of￿the￿acquisition
and￿the￿development￿of￿EUV￿technology￿and￿volume￿production￿systems.￿These￿statements￿are￿not￿historical￿facts,
but￿rather￿are￿based￿on￿current￿expectations,￿estimates,￿assumptions￿and￿projections￿about￿the￿business￿and￿future
financial￿results￿of￿ASML￿and￿readers￿should￿not￿place￿undue￿reliance￿on￿them.

Forward-looking￿statements￿do￿not￿guarantee￿future￿performance￿and￿involve￿risks￿and￿uncertainties.￿Actual￿results
may￿differ￿materially￿from￿projected￿results￿as￿a￿result￿of￿certain￿risks￿and￿uncertainties.￿These￿risks￿and￿uncertainties
include,￿without￿limitation,￿those￿described￿under￿Item￿3.D.￿"Risk￿Factors"￿and￿those￿detailed￿from￿time￿to￿time￿in
our￿other￿filings￿with￿the￿United￿States￿Securities￿and￿Exchange￿Commission￿(the￿"Commission"￿or￿the￿"SEC").￿These
forward-looking￿statements￿are￿made￿only￿as￿of￿the￿date￿of￿this￿annual￿report￿on￿Form￿20-F.￿We￿do￿not￿undertake￿to
update￿or￿revise￿the￿forward-looking￿statements,￿whether￿as￿a￿result￿of￿new￿information,￿future￿events￿or￿otherwise.

Item 1 Identity of Directors, Senior Management and Advisors

Not￿applicable.

Item 2 Offer Statistics and Expected Timetable

Not￿applicable.

Item 3 Key Information

A. Selected Financial Data
The￿following￿selected￿consolidated￿financial￿data￿should￿be￿read￿in￿conjunction￿with￿Item￿5￿"Operating￿and￿Financial
Review￿and￿Prospects"￿and￿Item￿18￿"Financial￿Statements".

ASML￿ANNUAL￿REPORT￿2012

1

Five-Year Financial Summary

Year ended December 31
(in thousands, except per share data)
￿
Consolidated Statements of Operations data
Net￿sales
Cost￿of￿sales
￿
Gross profit on sales
Research￿and￿development￿costs
Selling,￿general￿and￿administrative￿costs
￿
Income (loss) from operations
Interest￿income￿(expense),￿net
￿
Income (loss) before income taxes
(Provision￿for)￿benefit￿from￿income￿taxes
￿
Net income (loss)
￿
Earnings per share data
Basic￿net￿income￿(loss)￿per￿ordinary￿share
Diluted￿net￿income￿(loss)￿per￿ordinary￿share1
￿
Number￿of￿ordinary￿shares￿used￿in
computing￿per￿share￿amounts￿(in￿thousands)
Basic
Diluted1

2012  
EUR  
￿ ￿
￿ ￿
4,731,555 ￿
2,726,298 ￿
￿ ￿
2,005,257 ￿
589,182 ￿
259,301 ￿
￿ ￿
1,156,774 ￿
(6,196) ￿
￿ ￿
1,150,578 ￿
(4,262) ￿
￿ ￿
1,146,316 ￿
￿ ￿
￿ ￿
2.70 ￿
2.68 ￿
￿ ￿
￿ ￿
￿ ￿
424,096 ￿
426,986 ￿

2011 2
EUR  
￿ ￿
￿ ￿
5,651,035 ￿
3,201,645 ￿
￿ ￿
2,449,390 ￿
590,270 ￿
217,904 ￿
￿ ￿
1,641,216 ￿
7,419 ￿
￿ ￿
1,648,635 ￿
(181,675) ￿
￿ ￿
1,466,960 ￿
￿ ￿
￿ ￿
3.45 ￿
3.42 ￿
￿ ￿
￿ ￿
￿ ￿
425,618 ￿
429,053 ￿

2010
EUR
￿
￿
4,507,938
2,552,768
￿
1,955,170
523,426
181,045
￿
1,250,699
(8,176)
￿
1,242,523
(220,703)
￿
1,021,820
￿
￿
2.35
2.33
￿
￿
￿
435,146
438,974

2009
EUR
￿
￿
1,596,063
1,137,671
￿
458,392
466,761
154,756
￿
(163,125)
(8,425)
￿
(171,550)
20,625
￿
(150,925)
￿
￿
(0.35)
(0.35)
￿
￿
￿
432,615
432,615

2008
EUR
￿
￿
2,953,678
1,938,164
￿
1,015,514
516,128
210,172
￿
289,214
20,430
￿
309,644
12,726
￿
322,370
￿
￿
0.75
0.74
￿
￿
￿
431,620
434,205

1

The￿calculation￿of￿diluted￿net￿income￿per￿ordinary￿share￿assumes￿the￿exercise￿of￿options￿issued￿under￿ASML￿stock￿option￿plans￿and￿the￿issuance￿of
shares￿under￿ASML￿share￿plans￿for￿periods￿in￿which￿exercises￿or￿issuances￿would￿have￿a￿dilutive￿effect.￿The￿calculation￿of￿diluted￿net￿income￿per
ordinary￿share￿does￿not￿assume￿exercise￿of￿such￿options￿or￿issuance￿of￿shares￿when￿such￿exercises￿or￿issuance￿would￿be￿anti-dilutive.

2 As￿of￿January￿1,￿2011,￿we￿adopted￿Accounting￿Standards￿Update￿("ASU")￿2009-13,￿"Revenue￿Arrangements￿with￿Multiple￿Deliverables"￿which

amended￿ASC￿605-25.￿The￿ASU￿was￿adopted￿prospectively￿and￿had￿an￿insignificant￿impact￿on￿timing￿and￿allocation￿of￿revenues.￿See￿Note￿1￿to￿the
consolidated￿financial￿statements.

ASML￿ANNUAL￿REPORT￿2012

2

Five-Year Financial Summary

2012  
EUR

As of December 31
(in thousands, unless otherwise indicated)
Consolidated Balance Sheets data
Cash￿and￿cash￿equivalents
Short-term￿investments
Working￿capital2
Total￿assets
Long-term￿debt3
Total￿shareholders’￿equity
Share￿capital
￿
Consolidated Statements of Cash Flows data
Depreciation￿and￿amortization
Impairment
Net￿cash￿provided￿by￿operating￿activities
Purchase￿of￿property,￿plant￿and￿equipment

￿ ￿
1,767,596 ￿
930,005 ￿
3,745,559 ￿
7,410,478 ￿
759,490 ￿
4,066,893 ￿
37,470 ￿
￿ ￿
￿ ￿
186,620 ￿
3,234 ￿
703,478 ￿
(171,879) ￿
Purchase￿of￿available￿for￿sale￿securities (1,379,997) ￿
449,993 ￿
(10,292) ￿
Net￿cash￿used￿in￿investing￿activities (1,119,833) ￿
3,907,666 ￿
(3,728,324) ￿
- ￿

Maturity￿of￿available￿for￿sale￿securities
Acquisition￿of￿subsidiary￿(net￿of￿cash￿acquired)

Net￿proceeds￿from￿issuance￿of￿shares
Capital￿repayment
Purchase￿of￿shares￿in￿conjunction￿with￿conversion￿rights
of￿bondholders￿and￿share-based￿payments
Dividend￿paid
Deposits￿from￿customers
Purchase￿of￿shares
Net￿cash￿provided￿by￿(used￿in)￿financing￿activities
Net￿increase￿(decrease)￿in￿cash￿and￿cash￿equivalents
￿
Ratios and other data
Gross￿profit￿as￿a￿percentage￿of￿net￿sales
Income￿(loss)￿from￿operations￿as￿a￿percentage￿of￿net￿sales
Net￿income￿(loss)￿as￿a￿percentage￿of￿net￿sales
Shareholders’￿equity￿as￿a￿percentage￿of￿total￿assets
Income￿taxes￿as￿a￿percentage￿of￿income￿(loss)￿before￿income￿taxes
Sales￿of￿systems￿(in￿units)
Average￿selling￿price￿of￿system￿sales￿(in￿millions)
Value￿of￿systems￿backlog￿excluding￿EUV￿(in￿millions)4,5
Systems￿backlog￿excluding￿EUV￿(in￿units)4,5
Average￿selling￿price￿of￿systems￿backlog￿excluding￿EUV￿(in￿millions)4,5
Value￿of￿booked￿systems￿excluding￿EUV￿(in￿millions)4,5
Net￿bookings￿excluding￿EUV￿(in￿units)4,5
Average￿selling￿price￿of￿booked￿systems￿excluding￿EUV￿(in￿millions)4,5
Number￿of￿payroll￿employees￿in￿FTEs6
Number￿of￿temporary￿employees￿in￿FTEs6
Increase￿(decrease)￿net￿sales￿in￿percentage
Number￿of￿ordinary￿shares￿issued￿and￿outstanding￿(in￿thousands)
ASML￿share￿price￿in￿euro7
Volatility￿260￿days￿in￿percentage￿of￿ASML￿shares8
Dividend￿per￿ordinary￿share￿in￿euro
Dividend￿per￿ordinary￿share￿in￿U.S.￿dollar

(188,892) ￿
- ￿
(535,373) ￿
(545,583) ￿
(964,186) ￿
￿ ￿
￿ ￿
42.4 ￿
24.4 ￿
24.2 ￿
54.9 ￿
0.4 ￿
170 ￿
22.4 ￿
1,214.1 ￿
46 ￿
26.4 ￿
3,312.3 ￿
144 ￿
23.0 ￿
8,497 ￿
2,139 ￿
(16.3) ￿
407,165 ￿
48.00 ￿
28.64 ￿
0.53 9
0.73 9,10

2011 1
EUR  
￿ ￿
2,731,782 ￿
- ￿
3,473,767 ￿
7,260,815 ￿
736,368 ￿
3,444,154 ￿
38,354 ￿
￿ ￿
￿ ￿
165,185 ￿
12,272 ￿
2,070,440 ￿
(300,898) ￿
- ￿
- ￿
- ￿
(300,898) ￿
34,084 ￿
- ￿
- ￿

(172,645) ￿
(150,000) ￿
(700,452) ￿
(991,561) ￿
781,948 ￿
￿ ￿
￿ ￿
43.3 ￿
29.0 ￿
26.0 ￿
47.4 ￿
11.0 ￿
222 ￿
22.0 ￿
1,732.5 ￿
71 ￿
24.4 ￿
2,909.3 ￿
134 ￿
21.7 ￿
7,955 ￿
1,935 ￿
25.4 ￿
413,669 ￿
32.48 ￿
32.46 ￿
0.46 ￿
0.60 ￿

2010
EUR
￿
1,949,834
-
2,787,220
6,180,358
710,060
2,773,908
39,293
￿
￿
151,444
8,563
940,048
(128,728)
-
-
-
(124,903)
31,000
-
-

(86,960)
150,000
-
92,702
912,760
￿
￿
43.4
27.7
22.7
44.9
17.8
197
19.8
3,855.7
157
24.6
6,212.7
285
21.8
7,184
2,061
182.4
436,593
28.90
30.25
0.40
0.54

2009
EUR
￿
1,037,074
-
1,704,714
3,764,151
699,756
1,774,768
39,028
￿
￿
141,631
15,896
99,194
(104,959)
-
-
-
(98,082)
11,073
-
-

(86,486)
-
-
(74,874)
(72,110)
￿
￿
28.7
(10.2)
(9.5)
47.1
12.0
70
16.8
2,113.7
69
30.6
2,535.4
98
25.9
6,548
1,137
(46.0)
433,639
24.00
38.45
0.20
0.27

2008
EUR
￿
1,109,184
-
1,964,906
3,977,478
685,134
1,988,769
38,887
￿
￿
121,423
25,109
282,979
(259,770)
-
-
-
(259,805)
11,475
-
(87,605)

(107,841)
-
-
(186,471)
(162,452)
￿
￿
34.4
9.8
10.9
50.0
(4.1)
151
16.7
857.3
41
20.9
1,730.9
103
16.8
6,930
1,329
(21.6)
432,074
12.75
51.14
0.20
0.26

1 As￿of￿January￿1,￿2011,￿we￿adopted￿Accounting￿Standards￿Update￿("ASU")￿2009-13,￿"Revenue￿Arrangements￿with￿Multiple￿Deliverables"￿which

amended￿ASC￿605-25.￿The￿ASU￿was￿adopted￿prospectively￿and￿had￿an￿insignificant￿impact￿on￿timing￿and￿allocation￿of￿revenues.￿See￿Note￿1￿to￿the
consolidated￿financial￿statements.

2 Working￿capital￿is￿calculated￿as￿the￿difference￿between￿total￿current￿assets￿and￿total￿current￿liabilities.
3
4 Our￿systems￿backlog￿and￿net￿bookings￿include￿only￿orders￿for￿which￿written￿authorizations￿have￿been￿accepted￿and￿system￿shipment￿and￿revenue

Long-term￿debt￿includes￿the￿current￿portion￿of￿long-term￿debt.

5

recognition￿dates￿within￿the￿following￿12￿months￿have￿been￿assigned.
From￿January￿1,￿2011,￿we￿value￿our￿net￿bookings￿and￿systems￿backlog￿at￿system￿sales￿value￿including￿factory￿options.￿Before￿January￿1,￿2011,￿we
valued￿net￿bookings￿and￿systems￿backlog￿at￿full￿order￿value￿(i.e.￿including￿factory￿options,￿field￿options￿and￿services).￿The￿comparative￿figures￿for
prior￿periods￿have￿not￿been￿adjusted￿because￿the￿impact￿on￿the￿comparative￿figures￿is￿insignificant￿(approximately￿EUR￿20.0￿million￿negative￿impact
on￿backlog￿value￿as￿of￿December￿31,￿2010).
Full-time￿employees￿("FTEs").

6
7 Closing￿price￿at￿year-end￿of￿our￿ordinary￿shares￿listed￿on￿NYSE￿Euronext￿Amsterdam￿("NYSE￿Euronext￿Amsterdam")￿(source:￿Bloomberg￿Finance￿LP).
8 Volatility￿represents￿the￿variability￿in￿our￿share￿price￿on￿NYSE￿Euronext￿Amsterdam￿as￿measured￿over￿the￿260￿business￿days￿of￿each￿year￿presented

(source:￿Bloomberg￿Finance￿LP).

9 Subject￿to￿approval￿of￿the￿Annual￿General￿Meeting￿of￿Shareholders￿("AGM")￿to￿be￿held￿on￿April￿24,￿2013.
10 The￿exchange￿rate￿used￿to￿convert￿the￿proposed￿dividend￿per￿ordinary￿share￿is￿the￿exchange￿rate￿at￿February￿1,￿2013.

ASML￿ANNUAL￿REPORT￿2012

3

 
Exchange Rate Information 
We￿publish￿our￿consolidated￿financial￿statements￿in￿euros.￿In￿this￿Annual￿Report,￿references￿to￿"euro"￿or￿"EUR"￿are￿to
euros,￿and￿references￿to￿"U.S.￿dollar"￿or￿"USD"￿are￿to￿United￿States￿dollars.

A￿portion￿of￿our￿net￿sales￿and￿expenses￿is,￿and￿historically￿has￿been,￿denominated￿in￿currencies￿other￿than￿the￿euro.￿For
a￿discussion￿of￿the￿impact￿of￿exchange￿rate￿fluctuations￿on￿our￿financial￿condition￿and￿results￿of￿operations,￿see￿Item
5.A.￿"Operating￿Results￿-￿Foreign￿Exchange￿Management".

The￿following￿are￿the￿Noon￿Buying￿Rates￿certified￿by￿the￿Federal￿Reserve￿Bank￿for￿customs￿purposes￿(the￿"Noon￿Buying
Rate"),￿expressed￿in￿U.S.￿dollars￿per￿euro.

Calendar year

￿
Period￿End
Period￿Average￿1
Period￿High
Period￿Low

2013
(through February 1, 2013)
￿
1.37
1.36
1.37
1.30

2012
￿
1.32
1.29
1.35
1.21

2011
￿
1.30
1.40
1.49
1.29

2010
￿
1.33
1.33
1.45
1.20

2009
￿
1.43
1.39
1.51
1.25

2008
￿
1.39
1.47
1.60
1.24

1

The￿average￿of￿the￿Noon￿Buying￿Rates￿on￿the￿last￿business￿day￿of￿each￿month￿during￿the￿period￿presented.

Months of

￿
Period￿High
Period￿Low

February 2013
(through February 1, 2013)
￿
1.37
1.37

January
2013
￿
1.36
1.30

December
2012
￿
1.33
1.29

November
2012
￿
1.30
1.27

October
2012
￿
1.31
1.29

September
2012
￿
1.31
1.26

August
2012
￿
1.26
1.21

B. Capitalization and Indebtedness
Not￿applicable.

C. Reasons for the Offer and Use of Proceeds
Not￿applicable.

D. Risk Factors
In￿conducting￿our￿business,￿we￿face￿many￿risks￿that￿may￿interfere￿with￿our￿business￿objectives.￿Some￿of￿these￿risks
relate￿to￿our￿operational￿processes,￿while￿others￿relate￿to￿our￿business￿environment.￿It￿is￿important￿to￿understand￿the
nature￿of￿these￿risks￿and￿the￿impact￿they￿may￿have￿on￿our￿business,￿financial￿condition￿and￿results￿of￿operations.￿Some
of￿the￿more￿relevant￿risks￿are￿described￿below.￿These￿risks￿are￿not￿the￿only￿ones￿that￿we￿face.￿Some￿risks￿may￿not￿yet
be￿known￿to￿us￿and￿certain￿risks￿that￿we￿do￿not￿currently￿believe￿to￿be￿material￿could￿become￿material￿in￿the￿future.

Risks￿Related￿to￿the￿Semiconductor￿Industry

The Semiconductor Industry is Highly Cyclical and We May Be Adversely Affected by Any Downturn
As￿a￿supplier￿to￿the￿global￿semiconductor￿industry,￿we￿are￿subject￿to￿the￿industry’s￿business￿cycles,￿of￿which￿the￿timing,
duration￿and￿volatility￿are￿difficult￿to￿predict.￿The￿semiconductor￿industry￿has￿historically￿been￿cyclical.￿Sales￿of￿our
lithography￿systems￿depend￿in￿large￿part￿upon￿the￿level￿of￿capital￿expenditures￿by￿semiconductor￿manufacturers.￿These
capital￿expenditures￿depend￿upon￿a￿range￿of￿competitive￿and￿market￿factors,￿including:

the￿current￿and￿anticipated￿market￿demand￿for￿semiconductors￿and￿for￿products￿utilizing￿semiconductors;

•
• semiconductor￿prices;
• semiconductor￿production￿costs;
• changes￿in￿semiconductor￿inventory￿levels;
• general￿economic￿conditions;￿and
• access￿to￿capital.

Reductions￿or￿delays￿in￿capital￿equipment￿purchases￿by￿our￿customers￿could￿have￿a￿material￿adverse￿effect￿on￿our
business,￿financial￿condition￿and￿results￿of￿operations.

In￿an￿industry￿downturn,￿our￿ability￿to￿maintain￿profitability￿will￿depend￿substantially￿on￿whether￿we￿are￿able￿to￿lower
our￿costs￿and￿break-even￿level,￿which￿is￿the￿level￿of￿sales￿that￿we￿must￿reach￿in￿a￿year￿to￿achieve￿net￿income.￿If￿sales

ASML￿ANNUAL￿REPORT￿2012

4

 
 
 
 
 
 
 
decrease￿significantly￿as￿a￿result￿of￿an￿industry￿downturn￿and￿we￿are￿unable￿to￿adjust￿our￿costs￿over￿the￿same￿period,
our￿net￿income￿may￿decline￿significantly￿or￿we￿may￿suffer￿losses.￿As￿we￿need￿to￿keep￿certain￿levels￿of￿inventory￿on
hand￿to￿meet￿anticipated￿product￿demand,￿we￿may￿also￿incur￿increased￿costs￿related￿to￿inventory￿obsolescence￿in￿an
industry￿downturn.￿In￿addition,￿industry￿downturns￿generally￿result￿in￿overcapacity,￿resulting￿in￿downward￿pressure￿on
prices￿and￿impairment￿of￿machinery￿and￿equipment,￿which￿in￿the￿past￿has￿had,￿and￿in￿the￿future￿could￿have,￿a￿material
adverse￿effect￿on￿our￿business,￿financial￿condition￿and￿results￿of￿operations.

The￿ongoing￿financial￿crises￿that￿have￿affected￿the￿international￿banking￿system￿and￿global￿financial￿markets￿since￿2008
have￿been￿in￿many￿respects￿unprecedented.￿Concerns￿persist￿over￿the￿debt￿burden￿of￿certain￿Eurozone￿countries￿and
their￿ability￿to￿meet￿future￿obligations,￿the￿overall￿stability￿of￿the￿euro,￿and￿the￿suitability￿of￿the￿euro￿as￿a￿single￿currency
given￿the￿diverse￿economic￿and￿political￿circumstances￿in￿individual￿Eurozone￿countries.￿These￿concerns￿could￿lead￿to
the￿re-introduction￿of￿the￿individual￿currencies￿in￿one￿or￿more￿Eurozone￿countries,￿or￿in￿more￿extreme￿circumstances,
the￿possible￿dissolution￿of￿the￿euro￿currency￿entirely.￿These￿potential￿developments,￿or￿market￿perceptions￿concerning
these￿and￿related￿issues,￿could￿adversely￿affect￿the￿value￿of￿our￿euro-denominated￿assets￿and￿obligations.￿In￿addition,
remaining￿concerns￿over￿the￿effect￿of￿this￿financial￿crisis￿on￿financial￿institutions￿in￿Europe￿and￿globally,￿and￿the
instability￿of￿the￿financial￿markets￿and￿the￿global￿economy￿in￿general￿could￿result￿in￿a￿number￿of￿follow-on￿effects￿on
our￿business,￿including￿(i)￿declining￿business￿and￿consumer￿confidence￿resulting￿in￿reduced,￿or￿delayed￿purchase￿of￿our
products￿or￿shorter-term￿capital￿expenditures￿for￿our￿products;￿insolvency￿of￿key￿suppliers￿resulting￿in￿product￿delays,
(ii)￿an￿inability￿of￿customers￿to￿obtain￿credit￿to￿finance￿purchases￿of￿our￿products,￿delayed￿payments￿from￿our￿customers
and/or￿customer￿insolvencies￿and￿(iii)￿other￿adverse￿effects￿that￿we￿cannot￿currently￿anticipate.￿If￿global￿economic￿and
market￿conditions￿deteriorate,￿we￿are￿likely￿to￿experience￿material￿adverse￿impacts￿on￿our￿business,￿financial￿condition
and￿results￿of￿operations.

Conversely,￿in￿anticipation￿of￿periods￿of￿increasing￿demand￿for￿semiconductor￿manufacturing￿equipment,￿we￿must
maintain￿sufficient￿manufacturing￿capacity￿and￿inventory￿and￿we￿must￿attract,￿hire,￿integrate￿and￿retain￿a￿sufficient
number￿of￿qualified￿employees￿to￿meet￿customer￿demand.￿Our￿ability￿to￿predict￿the￿timing￿and￿magnitude￿of￿industry
fluctuations￿is￿limited￿and￿our￿products￿require￿significant￿lead-time￿to￿successfully￿complete.￿Accordingly,￿we￿may￿not
be￿able￿to￿effectively￿increase￿our￿production￿capacity￿to￿respond￿to￿an￿increase￿in￿customer￿demand￿in￿an￿industry
upturn￿resulting￿in￿lost￿revenues,￿damage￿to￿customer￿relationships￿and￿we￿may￿lose￿market￿share.

Our Business Will Suffer If We Do Not Respond Rapidly to Commercial and Technological Changes in the
Semiconductor Industry
The￿semiconductor￿manufacturing￿industry￿is￿subject￿to:
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.

Our￿products￿could￿become￿obsolete￿sooner￿than￿anticipated￿because￿of￿a￿faster￿than￿anticipated￿change￿in￿one￿or
more￿of￿the￿technologies￿related￿to￿our￿products￿or￿in￿market￿demand￿for￿products￿based￿on￿a￿particular￿technology.
Our￿success￿in￿developing￿new￿products￿and￿in￿enhancing￿our￿existing￿products￿depends￿on￿a￿variety￿of￿factors,
including￿the￿successful￿management￿of￿our￿research￿and￿development￿("R&D")￿programs￿and￿the￿timely￿completion￿of
product￿development￿and￿design￿relative￿to￿competitors.￿If￿we￿do￿not￿develop￿and￿introduce￿new￿and￿enhanced￿systems
at￿competitive￿prices￿and￿on￿a￿timely￿basis,￿our￿customers￿will￿not￿integrate￿our￿systems￿into￿the￿planning￿and￿design￿of
new￿production￿facilities￿and￿upgrades￿of￿existing￿facilities,￿which￿would￿have￿a￿material￿adverse￿effect￿on￿our￿business,
financial￿condition￿and￿results￿of￿operations.

In￿particular,￿we￿are￿investing￿considerable￿financial￿and￿other￿resources￿to￿develop￿and￿introduce￿new￿products￿and
product￿enhancements,￿such￿as￿Extreme￿Ultraviolet￿lithography￿("EUV")￿and￿450mm￿wafer￿technology.￿If￿we￿are￿unable
to￿successfully￿develop￿and￿introduce￿these￿products￿and￿technologies,￿or￿if￿our￿customers￿do￿not￿fully￿adopt￿the
new￿technologies,￿products￿or￿product￿enhancements￿due￿to￿a￿preference￿for￿more￿established￿or￿alternative￿new
technologies￿and￿products￿or￿for￿any￿other￿reasons,￿we￿would￿not￿recoup￿all￿of￿our￿investments￿in￿these￿technologies￿or
products,￿which￿could￿have￿a￿material￿adverse￿effect￿on￿our￿business,￿financial￿condition￿and￿results￿of￿operations.

The￿success￿of￿EUV￿remains￿particularly￿dependent￿on￿light￿source￿(laser)￿availability￿and￿continuing￿related￿technical
advances￿by￿us￿and￿our￿suppliers,￿as￿well￿as￿infrastructure￿developments￿in￿masks￿and￿photoresists,￿without￿which￿the
EUV￿tools￿cannot￿achieve￿the￿productivity￿and￿yield￿required￿to￿economically￿justify￿the￿higher￿price￿of￿these￿tools.￿A
delay￿in￿the￿developments￿of￿these￿tools￿could￿discourage￿or￿result￿in￿much￿slower￿adoption￿of￿this￿technology.￿If￿the
technologies￿that￿we￿pursue￿to￿assist￿our￿customers￿in￿producing￿smaller￿and￿more￿efficient￿chips,￿are￿not￿as￿effective

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as￿those￿developed￿by￿our￿competitors,￿or￿if￿our￿customers￿adopt￿new￿technological￿architectures￿that￿are￿less￿focused
on￿lithography,￿this￿may￿adversely￿affect￿our￿business,￿financial￿condition￿and￿results￿of￿operations.

We Face Intense Competition
The￿semiconductor￿equipment￿industry￿is￿highly￿competitive.￿The￿principal￿elements￿of￿competition￿in￿our￿market￿are:

•
•

the￿technical￿performance￿characteristics￿of￿a￿lithography￿system;
the￿value￿of￿ownership￿of￿that￿system￿based￿on￿its￿purchase￿price,￿maintenance￿costs,￿productivity,￿and￿customer
service￿and￿support￿costs;
the￿exchange￿rate￿of￿the￿euro￿particularly￿against￿the￿Japanese￿yen￿which￿results￿in￿varying￿prices￿and￿margins;
the￿strength￿and￿breadth￿of￿our￿portfolio￿of￿patents￿and￿other￿intellectual￿property￿rights;￿and

•
•
• our￿customers’￿desire￿to￿obtain￿lithography￿equipment￿from￿more￿than￿one￿supplier.

Our￿competitiveness￿increasingly￿depends￿upon￿our￿ability￿to￿develop￿new￿and￿enhanced￿semiconductor￿equipment
that￿is￿competitively￿priced￿and￿introduced￿on￿a￿timely￿basis,￿as￿well￿as￿our￿ability￿to￿protect￿and￿defend￿our￿intellectual
property￿rights.￿See￿Item￿4.B.￿"Business￿Overview,￿Intellectual￿Property",￿Note￿10￿and￿Note￿18￿to￿our￿consolidated
financial￿statements.

We￿compete￿primarily￿with￿Nikon￿Corporation￿("Nikon")￿and￿to￿a￿lesser￿degree￿with￿Canon￿Kabushiki￿Kaisha￿("Canon").
Both￿Nikon￿and￿Canon￿have￿substantial￿financial￿resources￿and￿broad￿patent￿portfolios.￿Each￿continues￿to￿introduce
new￿products￿with￿improved￿price￿and￿performance￿characteristics￿that￿compete￿directly￿with￿our￿products,￿which￿may
cause￿a￿decline￿in￿our￿sales￿or￿a￿loss￿of￿market￿acceptance￿for￿our￿lithography￿systems.￿In￿addition,￿adverse￿market
conditions,￿industry￿overcapacity￿or￿a￿decrease￿in￿the￿value￿of￿the￿Japanese￿yen￿in￿relation￿to￿the￿euro￿or￿the￿U.S.￿dollar,
could￿further￿intensify￿price-based￿competition￿in￿those￿regions￿that￿account￿for￿the￿majority￿of￿our￿sales,￿resulting￿in
lower￿prices￿and￿margins￿which￿could￿have￿a￿material￿adverse￿effect￿on￿our￿business,￿financial￿condition￿and￿results￿of
operations.

In￿addition,￿to￿competitors￿in￿lithography,￿we￿may￿face￿competition￿with￿respect￿to￿alternative￿technologies￿for￿the￿non-
critical￿layers￿or￿for￿all￿layers.￿The￿failure￿to￿keep￿pace￿with￿Moore's￿law,￿which￿postulates￿that￿the￿number￿of￿transistors
on￿a￿chip￿doubles￿approximately￿every￿18￿to￿24￿months￿at￿equivalent￿marginal￿costs,￿or￿in￿the￿event￿the￿delivery￿of￿new
technology￿is￿delayed,￿our￿customers￿may￿opt￿for￿other￿solutions￿in￿IC￿manufacturing￿as￿a￿substitute￿for￿purchasing￿our
products.

Risks￿Related￿to￿ASML

The Number of Systems We Can Produce Is Limited by Our Dependence on a Limited Number of Suppliers of Key
Components
We￿rely￿on￿outside￿vendors￿for￿the￿components￿and￿subassemblies￿used￿in￿our￿systems,￿each￿of￿which￿is￿obtained￿from
a￿single￿supplier￿or￿a￿limited￿number￿of￿suppliers.￿Our￿reliance￿on￿a￿limited￿group￿of￿suppliers￿involves￿several￿risks,
including￿a￿potential￿inability￿to￿obtain￿an￿adequate￿supply￿of￿required￿components￿and￿the￿risk￿of￿untimely￿delivery￿of
these￿components￿and￿subassemblies.

The￿number￿of￿lithography￿systems￿we￿are￿able￿to￿produce￿is￿limited￿by￿the￿production￿capacity￿of￿Carl￿Zeiss￿SMT￿AG
("Zeiss").￿Zeiss￿is￿our￿single￿supplier￿of￿lenses￿and￿other￿critical￿optical￿components.￿If￿Zeiss￿were￿unable￿to￿maintain
and￿increase￿production￿levels￿or￿if￿we￿are￿unable￿to￿maintain￿our￿business￿relationship￿with￿Zeiss￿in￿the￿future￿we￿could
be￿unable￿to￿fulfill￿orders,￿which￿could￿damage￿relationships￿with￿current￿and￿prospective￿customers￿and￿have￿a￿material
adverse￿effect￿on￿our￿business,￿financial￿condition￿and￿results￿of￿operations.￿If￿Zeiss￿were￿to￿terminate￿its￿relationship
with￿us￿or￿if￿Zeiss￿were￿unable￿to￿maintain￿production￿of￿lenses￿over￿a￿prolonged￿period,￿we￿would￿effectively￿cease
to￿be￿able￿to￿conduct￿our￿business.￿See￿Item￿4.B.￿"Business￿Overview￿-￿Manufacturing,￿Logistics￿and￿Suppliers".￿In
addition￿to￿Zeiss’￿current￿position￿as￿our￿single￿supplier￿of￿lenses,￿the￿excimer￿laser￿illumination￿systems￿that￿provide
the￿ultraviolet￿light￿source,￿used￿in￿our￿high￿resolution￿steppers￿and￿Step￿&￿Scan￿systems,￿and￿the￿extreme￿ultraviolet
light￿source,￿used￿in￿our￿third-generation￿(NXE:3300B)￿EUV￿systems,￿are￿available￿from￿only￿a￿very￿limited￿number￿of
suppliers.

Manufacturing￿some￿of￿these￿components￿and￿subassemblies￿that￿we￿use￿in￿our￿manufacturing￿processes￿is￿an
extremely￿complex￿process￿and￿could￿result￿in￿delays￿by￿our￿suppliers.￿A￿prolonged￿inability￿to￿obtain￿adequate
deliveries￿of￿components￿or￿subassemblies,￿or￿any￿other￿circumstance￿that￿requires￿us￿to￿seek￿alternative￿sources￿of
supply,￿could￿significantly￿hinder￿our￿ability￿to￿deliver￿our￿products￿in￿a￿timely￿manner,￿which￿could￿damage￿relationships
with￿current￿and￿prospective￿customers￿and￿have￿a￿material￿adverse￿effect￿on￿our￿business,￿financial￿condition￿and
results￿of￿operations.

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A High Percentage of Net Sales Is Derived from a Few Customers
Historically,￿we￿have￿sold￿a￿substantial￿number￿of￿lithography￿systems￿to￿a￿limited￿number￿of￿customers.￿We￿expect
customer￿concentration￿to￿increase￿because￿of￿continuing￿consolidation￿in￿the￿semiconductor￿manufacturing￿industry.
Consequently,￿while￿the￿identity￿of￿our￿largest￿customers￿may￿vary￿from￿year￿to￿year,￿we￿expect￿sales￿to￿remain
concentrated￿among￿relatively￿few￿customers￿in￿any￿particular￿year.￿In￿2012,￿recognized￿sales￿to￿our￿largest￿customer
accounted￿for￿EUR￿1,236.1￿million,￿or￿26.1￿percent￿of￿net￿sales,￿compared￿with￿EUR￿1,311.7￿million,￿or￿23.2￿percent￿of
net￿sales,￿in￿2011.￿The￿loss￿of￿any￿significant￿customer￿or￿any￿significant￿reduction￿in￿orders￿by￿a￿significant￿customer
may￿have￿a￿material￿adverse￿effect￿on￿our￿business,￿financial￿condition￿and￿results￿of￿operations.

Additionally,￿as￿a￿result￿of￿our￿limited￿number￿of￿customers,￿credit￿risk￿on￿our￿receivables￿is￿concentrated.￿Our￿three
largest￿customers￿(based￿on￿net￿sales)￿accounted￿for￿58.9￿percent￿of￿accounts￿receivable￿and￿finance￿receivables￿at
December￿31,￿2012,￿compared￿with￿35.5￿percent￿at￿December￿31,￿2011.￿As￿a￿result,￿business￿failure￿or￿insolvency
of￿one￿of￿our￿main￿customers￿may￿have￿a￿material￿adverse￿effect￿on￿our￿business,￿financial￿condition￿and￿results￿of
operations.

We Derive Most of Our Revenues from the Sale of a Relatively Small Number of Systems
We￿derive￿most￿of￿our￿revenues￿from￿the￿sale￿of￿a￿relatively￿small￿number￿of￿lithography￿equipment￿systems￿(170￿units
in￿2012￿and￿222￿units￿in￿2011),￿with￿an￿average￿selling￿price￿("ASP")￿in￿2012￿of￿EUR￿22.4￿million￿(EUR￿24.8￿million￿for
new￿systems￿and￿EUR￿7.6￿million￿for￿used￿systems)￿and￿an￿ASP￿in￿2011￿of￿EUR￿22.0￿million￿(EUR￿24.5￿million￿for￿new
systems￿and￿EUR￿3.8￿million￿for￿used￿systems).￿As￿a￿result,￿the￿timing￿of￿recognition￿of￿revenue￿from￿a￿small￿number
of￿system￿sales￿may￿have￿a￿significant￿impact￿on￿our￿net￿sales￿and￿operating￿results￿for￿a￿particular￿reporting￿period.
Specifically,￿the￿failure￿to￿receive￿anticipated￿orders,￿or￿delays￿in￿shipments￿near￿the￿end￿of￿a￿particular￿reporting￿period,
due,￿for￿example,￿to:
• a￿downturn￿in￿the￿highly￿cyclical￿semiconductor￿industry;
• unanticipated￿shipment￿rescheduling;
• cancellation￿or￿order￿push-back￿by￿customers;
• unexpected￿manufacturing￿difficulties;￿and
• delays￿in￿deliveries￿by￿suppliers

may￿cause￿net￿sales￿in￿a￿particular￿reporting￿period￿to￿fall￿significantly￿below￿net￿sales￿in￿previous￿periods￿or￿below￿our
expected￿net￿sales,￿and￿may￿have￿a￿material￿adverse￿effect￿on￿our￿results￿of￿operations￿for￿that￿period.￿In￿particular￿our
published￿quarterly￿earnings￿may￿vary￿significantly￿from￿quarter￿to￿quarter￿and￿may￿vary￿in￿the￿future￿for￿the￿reasons
discussed￿above.

The Pace of Introduction of Our New Products Is Accelerating and Is Accompanied by Potential Design and
Production Delays and by Significant Costs
The￿development￿and￿initial￿production,￿installation￿and￿enhancement￿of￿the￿systems￿we￿produce￿is￿often￿accompanied
by￿design￿and￿production￿delays￿and￿related￿costs￿of￿a￿nature￿typically￿associated￿with￿the￿introduction￿and￿transition
to￿full-scale￿manufacturing￿of￿complex￿capital￿equipment.￿While￿we￿expect￿and￿plan￿for￿a￿corresponding￿learning-curve
effect￿in￿our￿product￿development￿cycle,￿we￿cannot￿predict￿with￿precision￿the￿time￿and￿expense￿required￿to￿overcome
these￿initial￿problems￿and￿to￿ensure￿full￿performance￿to￿specifications.￿Moreover,￿we￿anticipate￿that￿this￿learning-
curve￿effect￿will￿continue￿to￿present￿increasingly￿difficult￿challenges￿with￿every￿new￿generation￿as￿a￿result￿of￿increasing
technological￿complexity.￿In￿particular,￿the￿development￿of￿an￿EUV￿volume￿production￿system￿is￿dependent￿on,￿and
subject￿to￿the￿successful￿implementation￿of,￿technology￿related￿to￿the￿light￿source￿and￿other￿technologies￿specific￿to
EUV.￿There￿is￿a￿risk￿that￿we￿may￿not￿be￿able￿to￿introduce￿or￿bring￿to￿full-scale￿production￿new￿products￿as￿quickly￿as
we￿anticipate￿in￿our￿product￿introduction￿plans,￿which￿could￿have￿a￿material￿adverse￿effect￿on￿our￿business,￿financial
condition￿and￿results￿of￿operations.

For￿the￿market￿to￿accept￿technology￿enhancements,￿our￿customers,￿in￿many￿cases,￿must￿upgrade￿their￿existing
technology￿capabilities.￿Such￿upgrades￿from￿established￿technology￿may￿not￿be￿available￿to￿our￿customers￿to￿enable
volume￿production￿using￿our￿new￿technology￿enhancements.￿This￿could￿result￿in￿our￿customers￿not￿purchasing,￿or
pushing￿back￿or￿canceling￿orders￿for￿our￿technology￿enhancements,￿which￿could￿negatively￿impact￿our￿business,
financial￿condition￿and￿results￿of￿operations.

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Failure to Adequately Protect the Intellectual Property Rights Upon Which We Depend Could Harm Our Business
We￿rely￿on￿intellectual￿property￿rights￿such￿as￿patents,￿copyrights￿and￿trade￿secrets￿to￿protect￿our￿proprietary
technology.￿However,￿we￿face￿the￿risk￿that￿such￿measures￿could￿prove￿to￿be￿inadequate￿because:

•

intellectual￿property￿laws￿may￿not￿sufficiently￿support￿our￿proprietary￿rights￿or￿may￿change￿in￿the￿future￿in￿a￿manner
adverse￿to￿us;

• patent￿rights￿may￿not￿be￿granted￿or￿construed￿as￿we￿expect;
• patents￿will￿expire￿which￿may￿result￿in￿key￿technology￿becoming￿widely￿available￿that￿may￿hurt￿our￿competitive

position;
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.

•
•

In￿addition,￿litigation￿may￿be￿necessary￿to￿enforce￿our￿intellectual￿property￿rights,￿to￿determine￿the￿validity￿and￿scope￿of
the￿proprietary￿rights￿of￿others,￿or￿to￿defend￿against￿claims￿of￿infringement.￿Any￿such￿litigation￿may￿result￿in￿substantial
costs￿and￿diversion￿of￿management￿resources,￿and,￿if￿decided￿unfavorably￿to￿us,￿could￿have￿a￿material￿adverse￿effect
on￿our￿business,￿financial￿condition￿and￿results￿of￿operations.

Defending Against Intellectual Property Claims Brought by Others Could Harm Our Business
In￿the￿course￿of￿our￿business,￿we￿are￿subject￿to￿claims￿by￿third￿parties￿alleging￿that￿our￿products￿or￿processes
infringe￿upon￿their￿intellectual￿property￿rights.￿If￿successful,￿such￿claims￿could￿limit￿or￿prohibit￿us￿from￿developing￿our
technology￿and￿manufacturing￿our￿products,￿which￿could￿have￿a￿material￿adverse￿effect￿on￿our￿business,￿financial
condition￿and￿results￿of￿operations.

In￿addition,￿our￿customers￿may￿be￿subject￿to￿claims￿of￿infringement￿from￿third￿parties,￿alleging￿that￿our￿products￿used
by￿such￿customers￿in￿the￿manufacture￿of￿semiconductor￿products￿and/or￿the￿processes￿relating￿to￿the￿use￿of￿our
products￿infringe￿one￿or￿more￿patents￿issued￿to￿such￿parties.￿If￿such￿claims￿were￿successful,￿we￿could￿be￿required
to￿indemnify￿customers￿for￿some￿or￿all￿of￿any￿losses￿incurred￿or￿damages￿assessed￿against￿them￿as￿a￿result￿of￿such
infringement,￿which￿could￿have￿a￿material￿adverse￿effect￿on￿our￿business,￿financial￿condition￿and￿results￿of￿operations.

We￿also￿may￿incur￿substantial￿licensing￿or￿settlement￿costs,￿which￿although￿potentially￿strengthening￿or￿expanding￿our
intellectual￿property￿rights￿or￿limiting￿our￿exposure￿to￿intellectual￿property￿claims￿of￿third￿parties,￿may￿have￿a￿material
adverse￿effect￿on￿our￿business,￿financial￿condition￿and￿results￿of￿operations.

From￿late￿2001￿through￿2004,￿ASML￿was￿party￿to￿a￿series￿of￿civil￿litigations￿and￿administrative￿proceedings￿in￿which
Nikon￿alleged￿ASML’s￿infringement￿of￿Nikon￿patents￿relating￿to￿lithography.￿ASML￿in￿turn￿filed￿claims￿against￿Nikon.
Pursuant￿to￿agreements￿executed￿on￿December￿10,￿2004,￿ASML,￿Zeiss￿and￿Nikon￿agreed￿to￿settle￿all￿pending￿worldwide
patent￿litigation￿between￿the￿companies.￿The￿settlement￿included￿an￿exchange￿of￿releases,￿a￿patent￿Cross-License
agreement￿related￿to￿lithography￿equipment￿used￿to￿manufacture￿semiconductor￿devices￿(the￿“Nikon￿Cross-License
Agreement”)￿and￿payments￿to￿Nikon￿by￿ASML￿and￿Zeiss.￿Beginning￿on￿January￿1,￿2015,￿the￿parties￿may￿bring￿suit￿for
infringement￿of￿patents￿subject￿to￿the￿Nikon￿Cross-License￿Agreement,￿including￿any￿infringement￿that￿occurred￿during
the￿Cross-License￿Transition￿Period.￿Damages￿related￿to￿claims￿for￿patent￿infringement￿occurring￿during￿the￿Cross-
License￿Transition￿Period￿are￿limited￿to￿three￿percent￿of￿the￿net￿sales￿price￿of￿products￿utilizing￿patents￿that￿are￿valid
and￿enforceable.

We Are Subject to Risks in Our International Operations
The￿majority￿of￿our￿sales￿are￿made￿to￿customers￿outside￿Europe.￿There￿are￿a￿number￿of￿risks￿inherent￿in￿doing￿business
in￿some￿of￿those￿regions,￿including￿the￿following:

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

If￿we￿are￿unable￿to￿manage￿successfully￿the￿risks￿inherent￿in￿our￿international￿activities,￿our￿business,￿financial￿condition
and￿results￿of￿operations￿could￿be￿materially￿and￿adversely￿affected.

In￿particular,￿31.3￿percent￿of￿our￿2012￿net￿sales￿and￿20.3￿percent￿of￿our￿2011￿net￿sales￿were￿derived￿from￿customers
in￿Taiwan.￿Taiwan￿has￿a￿unique￿international￿political￿status.￿The￿People’s￿Republic￿of￿China￿asserts￿sovereignty￿over
Taiwan￿and￿does￿not￿recognize￿the￿legitimacy￿of￿the￿Taiwanese￿government.￿Changes￿in￿relations￿between￿Taiwan￿and
the￿People’s￿Republic￿of￿China,￿Taiwanese￿government￿policies￿and￿other￿factors￿affecting￿Taiwan’s￿political,￿economic
or￿social￿environment￿could￿have￿a￿material￿adverse￿effect￿on￿our￿business,￿financial￿condition￿and￿results￿of￿operations.

ASML￿ANNUAL￿REPORT￿2012

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We Are Dependent on the Continued Operation of a Limited Number of Manufacturing Facilities
All￿of￿our￿manufacturing￿activities,￿including￿subassembly,￿final￿assembly￿and￿system￿testing,￿take￿place￿in￿clean￿room
facilities￿in￿Veldhoven,￿the￿Netherlands,￿in￿Wilton,￿Connecticut,￿the￿United￿States￿and￿in￿Linkou,￿Taiwan.￿These￿facilities
may￿be￿subject￿to￿disruption￿for￿a￿variety￿of￿reasons,￿including￿work￿stoppages,￿fire,￿energy￿shortages,￿flooding￿or
other￿natural￿disasters.￿We￿cannot￿ensure￿that￿alternative￿production￿capacity￿would￿be￿available￿if￿a￿major￿disruption
were￿to￿occur￿or￿that,￿if￿it￿were￿available,￿it￿could￿be￿obtained￿on￿favorable￿terms.￿Such￿a￿disruption￿could￿have￿a
material￿adverse￿effect￿on￿our￿business,￿financial￿condition￿and￿results￿of￿operations.￿In￿addition,￿some￿of￿our￿key
suppliers,￿including￿Zeiss,￿have￿a￿limited￿number￿of￿manufacturing￿facilities,￿the￿disruption￿of￿which￿may￿significantly
and￿adversely￿affect￿our￿production￿capacity.

Because of Labor Laws and Practices, Any Workforce Reductions That We May Seek to Implement in Order to
Reduce Costs Company-Wide May Be Delayed or Suspended
The￿semiconductor￿market￿is￿highly￿cyclical￿and￿as￿a￿consequence￿we￿may￿need￿to￿implement￿workforce￿reductions￿in
case￿of￿a￿downturn,￿in￿order￿to￿adapt￿to￿such￿market￿changes.￿In￿accordance￿with￿labor￿laws￿and￿practices￿applicable
in￿the￿jurisdictions￿in￿which￿we￿operate,￿a￿reduction￿of￿any￿significance￿may￿be￿subject￿to￿formal￿procedures￿that￿can
delay￿or￿may￿result￿in￿the￿modification￿of￿our￿planned￿workforce￿reductions.￿For￿example,￿ASML￿Netherlands￿B.V.,￿our
operating￿subsidiary￿in￿the￿Netherlands,￿has￿a￿Works￿Council,￿as￿required￿by￿Dutch￿law.￿If￿the￿Works￿Council￿renders
contrary￿advice￿in￿connection￿with￿a￿proposed￿workforce￿reduction￿in￿the￿Netherlands,￿but￿we￿nonetheless￿determine
to￿proceed,￿we￿must￿temporarily￿suspend￿any￿action￿while￿the￿Works￿Council￿determines￿whether￿to￿appeal￿to￿the
Enterprise￿Chamber￿of￿the￿Amsterdam￿Court￿of￿Appeal.￿This￿appeal￿process￿can￿cause￿a￿delay￿of￿several￿months￿and
may￿require￿us￿to￿address￿any￿procedural￿inadequacies￿identified￿by￿the￿Court￿in￿the￿way￿we￿reached￿our￿decision.￿Such
delays￿could￿impair￿our￿ability￿to￿reduce￿costs￿company-wide￿to￿levels￿comparable￿to￿those￿of￿our￿competitors.￿Also￿see
Item￿6.D￿"Employees".

Fluctuations in Foreign Exchange Rates Could Harm Our Results of Operations
We￿are￿exposed￿to￿currency￿risks.￿We￿are￿particularly￿exposed￿to￿fluctuations￿in￿the￿exchange￿rates￿between￿the
U.S.￿dollar,￿Japanese￿yen￿and￿the￿euro￿as￿we￿incur￿manufacturing￿costs￿for￿our￿systems￿predominantly￿in￿euros￿while
portions￿of￿our￿net￿sales￿and￿cost￿of￿sales￿are￿denominated￿in￿U.S.￿dollars￿and￿Japanese￿yen.

In￿addition,￿a￿portion￿of￿our￿assets￿and￿liabilities￿and￿operating￿results￿are￿denominated￿in￿U.S.￿dollars,￿and￿a￿small
portion￿of￿our￿assets,￿liabilities￿and￿operating￿results￿are￿denominated￿in￿currencies￿other￿than￿the￿euro￿and￿the￿U.S.
dollar.￿Our￿consolidated￿financial￿statements￿are￿expressed￿in￿euros.￿Accordingly,￿our￿results￿of￿operations￿and￿assets
and￿liabilities￿are￿exposed￿to￿fluctuations￿in￿exchange￿rates￿between￿the￿euro￿and￿various￿currencies.￿In￿general,￿our
customers￿run￿their￿businesses￿in￿U.S.￿dollars￿and￿therefore￿a￿weakening￿of￿the￿U.S.￿dollar￿against￿the￿euro￿might
impact￿the￿ability￿of￿our￿customers￿to￿purchase￿our￿products.

Furthermore,￿a￿strengthening￿of￿the￿euro￿particularly￿against￿the￿Japanese￿yen￿could￿further￿intensify￿price-based
competition￿in￿those￿regions￿that￿account￿for￿the￿majority￿of￿our￿sales,￿resulting￿in￿lower￿prices￿and￿margins￿and￿a
material￿adverse￿effect￿on￿our￿business,￿financial￿condition￿and￿results￿of￿operations.

See￿Item￿5.A.￿"Operating￿Results￿-￿Foreign￿Exchange￿Management".

We May Be Unable to Make Desirable Acquisitions or to Integrate Successfully Any Businesses We Acquire 
Our￿future￿success￿may￿depend￿in￿part￿on￿the￿acquisition￿of￿businesses￿or￿technologies￿intended￿to￿complement,
enhance￿or￿expand￿our￿current￿business￿or￿products￿or￿that￿might￿otherwise￿offer￿us￿growth￿opportunities.￿Our￿ability
to￿complete￿such￿transactions￿may￿be￿hindered￿by￿a￿number￿of￿factors,￿including￿potential￿difficulties￿in￿obtaining
government￿approvals.

Any￿acquisition￿that￿we￿do￿make￿would￿pose￿risks￿related￿to￿the￿integration￿of￿the￿new￿business￿or￿technology￿with￿our
business.￿We￿cannot￿be￿certain￿that￿we￿will￿be￿able￿to￿achieve￿the￿benefits￿we￿expect￿from￿a￿particular￿acquisition￿or
investment.￿Acquisitions￿may￿also￿strain￿our￿managerial￿and￿operational￿resources,￿as￿the￿challenge￿of￿managing￿new
operations￿may￿divert￿our￿management￿from￿day-to-day￿operations￿of￿our￿existing￿business.￿Our￿business,￿financial
condition￿and￿results￿of￿operations￿may￿be￿materially￿and￿adversely￿affected￿if￿we￿fail￿to￿coordinate￿our￿resources
effectively￿to￿manage￿both￿our￿existing￿operations￿and￿any￿businesses￿we￿acquire.

We￿have￿entered￿into￿an￿agreement￿to￿acquire￿all￿of￿the￿outstanding￿shares￿of￿Cymer￿Inc.￿("Cymer").￿However￿the￿Cymer
acquisition￿is￿subject￿to￿closing￿conditions,￿including￿review￿by￿U.S.￿and￿international￿regulators.￿Although￿closing￿is
expected￿to￿occur￿within￿the￿first￿half￿of￿2013,￿there￿is￿no￿assurance￿that￿the￿transaction￿will￿be￿completed￿within￿the
expected￿time￿period￿or￿at￿all.￿If￿our￿acquisition￿of￿Cymer￿is￿not￿completed,￿we￿may￿need￿to￿develop￿EUV￿light￿source
technology￿ourselves,￿which￿could￿lead￿to￿significant￿costs￿and￿delays￿in￿the￿introduction￿of￿EUV￿systems.

ASML￿ANNUAL￿REPORT￿2012

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We￿expect￿that￿the￿acquisition￿of￿Cymer￿will￿make￿EUV￿technology￿more￿efficient,￿prevent￿additional￿delays￿in￿the
introduction￿of￿EUV￿technology,￿and￿simplify￿the￿supply￿chain￿of￿EUV￿modules.￿However,￿achieving￿the￿benefits￿of￿the
acquisition￿will￿depend￿in￿part￿on￿the￿integration￿of￿our￿development￿organization,￿operations￿and￿employees￿with￿those
of￿Cymer￿in￿a￿timely￿and￿efficient￿manner,￿so￿as￿to￿minimize￿the￿risk￿that￿the￿transaction￿will￿result￿in￿a￿delay￿in￿the
development￿of￿EUV￿as￿result￿of￿the￿loss￿of￿key￿employees￿of￿Cymer￿or￿the￿diversion￿of￿the￿attention￿of￿management.
There￿can￿be￿no￿assurance￿that￿Cymer￿will￿be￿successfully￿integrated￿in￿our￿business￿or￿that￿any￿of￿the￿anticipated
benefits￿will￿be￿realized.￿Even￿if￿we￿are￿able￿to￿successfully￿integrate￿Cymer,￿there￿is￿no￿assurance￿that￿this￿transaction
will￿result￿in￿successful￿development￿of￿our￿EUV￿technology.

Our Business and Future Success Depend on Our Ability to Attract and Retain a Sufficient Number of Adequately
Educated and Skilled Employees
Our￿business￿and￿future￿success￿significantly￿depend￿upon￿our￿employees,￿including￿a￿large￿number￿of￿highly￿qualified
professionals,￿as￿well￿as￿our￿ability￿to￿attract￿and￿retain￿employees.￿Competition￿for￿such￿personnel￿is￿intense,￿and
we￿may￿not￿be￿able￿to￿continue￿to￿attract￿and￿retain￿such￿personnel.￿The￿EUV￿and￿450mm￿R&D￿programs￿associated
with￿the￿non-recurring￿research￿and￿development￿("NRE")￿commitments￿under￿the￿Customer￿Co-Investment￿Program
will￿require￿a￿significant￿number￿of￿qualified￿employees.￿If￿we￿are￿unable￿to￿attract￿sufficient￿numbers￿of￿qualified
employees,￿this￿could￿affect￿our￿ability￿to￿conduct￿our￿EUV￿and￿450mm￿research￿programs￿on￿a￿timely￿basis,￿which
could￿adversely￿affect￿our￿business,￿financial￿condition￿and￿results￿of￿operations.

In￿addition,￿the￿increasing￿complexity￿of￿our￿products￿results￿in￿a￿longer￿learning-curve￿for￿new￿and￿existing￿employees
leading￿to￿an￿inability￿to￿decrease￿cycle￿times￿and￿may￿result￿in￿the￿incurrence￿of￿significant￿additional￿costs,￿which
could￿adversely￿affect￿our￿business,￿financial￿condition￿and￿results￿of￿operations.

See￿Item￿4.B.￿"Business￿Overview,￿Customer￿Co-Investment￿Program".

Risks￿Related￿to￿Our￿Ordinary￿Shares

We May Not Declare Cash Dividends at All or in Any Particular Amounts in Any Given Year
We￿aim￿to￿pay￿an￿annual￿dividend￿that￿will￿be￿stable￿or￿growing￿over￿time.￿Annually,￿the￿Board￿of￿Management￿will,
upon￿prior￿approval￿from￿the￿Supervisory￿Board,￿submit￿a￿proposal￿to￿the￿AGM￿with￿respect￿to￿the￿amount￿of￿dividend
to￿be￿declared￿with￿respect￿to￿the￿prior￿year.￿The￿dividend￿proposal￿in￿any￿given￿year￿will￿be￿subject￿to￿the￿availability
of￿distributable￿profits￿or￿retained￿earnings￿and￿may￿be￿affected￿by,￿among￿other￿factors,￿the￿Board￿of￿Management’s
views￿on￿our￿potential￿future￿liquidity￿requirements,￿including￿for￿investments￿in￿production￿capacity,￿the￿funding￿of
our￿research￿and￿development￿programs￿and￿for￿acquisition￿opportunities￿that￿may￿arise￿from￿time￿to￿time;￿and￿by
future￿changes￿in￿applicable￿income￿tax￿and￿corporate￿laws.￿Accordingly,￿the￿Board￿of￿Management￿may￿decide￿to
propose￿not￿to￿pay￿a￿dividend￿or￿pay￿a￿lower￿dividend￿with￿respect￿to￿any￿particular￿year￿in￿the￿future,￿which￿could￿have
a￿negative￿effect￿on￿our￿share￿price.

The Price of Our Ordinary Shares is Volatile
The￿current￿market￿price￿of￿our￿ordinary￿shares￿may￿not￿be￿indicative￿of￿prices￿that￿will￿prevail￿in￿the￿future.￿In￿particular,
the￿market￿price￿of￿our￿ordinary￿shares￿has￿in￿the￿past￿experienced￿significant￿fluctuation,￿including￿fluctuation￿that￿is
unrelated￿to￿our￿performance.￿This￿fluctuation￿may￿continue￿in￿the￿future.

Restrictions on Shareholder Rights May Dilute Voting Power
Our￿Articles￿of￿Association￿provide￿that￿we￿are￿subject￿to￿the￿provisions￿of￿Dutch￿law￿applicable￿to￿large￿corporations,
called￿"structuurregime".￿These￿provisions￿have￿the￿effect￿of￿concentrating￿control￿over￿certain￿corporate￿decisions￿and
transactions￿in￿the￿hands￿of￿our￿Supervisory￿Board.￿As￿a￿result,￿holders￿of￿ordinary￿shares￿may￿have￿more￿difficulty￿in
protecting￿their￿interests￿in￿the￿face￿of￿actions￿by￿members￿of￿our￿Supervisory￿Board￿than￿if￿we￿were￿incorporated￿in￿the
United￿States￿or￿another￿jurisdiction.

Our￿authorized￿share￿capital￿also￿includes￿a￿class￿of￿cumulative￿preference￿shares￿and￿we￿have￿granted￿"Stichting
Preferente￿Aandelen￿ASML",￿a￿Dutch￿foundation,￿an￿option￿to￿acquire,￿at￿their￿nominal￿value￿of￿EUR￿0.09￿per￿share,
such￿cumulative￿preference￿shares.￿Exercise￿of￿the￿preference￿share￿option￿would￿effectively￿dilute￿the￿voting￿power￿of
our￿outstanding￿ordinary￿shares￿by￿one-half,￿which￿may￿discourage￿or￿significantly￿impede￿a￿third￿party￿from￿acquiring￿a
majority￿of￿our￿voting￿shares.

See￿Item￿6.C.￿"Board￿Practices"￿and￿Item￿10.B.￿"Memorandum￿and￿Articles￿of￿Association".

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Participating Customers in our Customer Co-Investment Program Together Own a Significant Amount of our
Ordinary Shares

In￿the￿Customer￿Co-Investment￿Program,￿Intel￿Corporation￿("Intel"),￿Taiwan￿Semiconductor￿Manufacturing￿Company
Ltd.￿("TSMC")￿and￿Samsung￿Electronics￿Corporation￿("Samsung")￿(collectively￿referred￿to￿as￿"participating￿customers")
through￿certain￿wholly-owned￿subsidiaries,￿acquired￿15%,￿5%￿and￿3%,￿of￿our￿shares,￿respectively￿(such￿percentages
give￿effect￿to￿our￿Synthetic￿Share￿Buyback￿in￿November￿2012).

The￿interests￿of￿the￿participating￿customers￿may￿not￿always￿coincide￿with￿the￿interests￿of￿other￿holders￿of￿our￿shares.
The￿shares￿acquired￿by￿the￿participating￿customers￿are￿held￿by￿Dutch￿foundations￿which￿have￿issued￿depositary
receipts￿in￿respect￿thereof￿and￿the￿participating￿customers￿may￿only￿vote￿those￿shares￿in￿General￿Meetings￿in
exceptional￿circumstances,￿including￿the￿authorization￿of￿certain￿significant￿share￿issuances￿and￿share￿repurchases,
the￿approval￿of￿a￿significant￿change￿in￿the￿identity￿or￿nature￿of￿ASML￿or￿its￿business,￿any￿amendment￿to￿the￿Articles
of￿Association￿that￿would￿materially￿affect￿the￿specific￿voting￿rights￿of￿Intel,￿TSMC￿and￿Samsung￿or￿that￿would
cause￿a￿significant￿change￿in￿the￿identity￿or￿nature￿of￿ASML￿or￿its￿business,￿the￿dissolution￿of￿ASML,￿and￿any￿merger
or￿demerger￿which￿would￿result￿in￿a￿material￿change￿in￿the￿identity￿or￿nature￿of￿ASML￿or￿its￿business.￿When￿such
exceptional￿circumstances￿occur,￿the￿participating￿customers,￿and￿in￿particular￿Intel,￿will￿be￿able￿to￿influence￿matters
requiring￿approval￿by￿the￿General￿Meeting￿and￿may￿vote￿their￿ordinary￿shares￿in￿a￿way￿with￿which￿other￿shareholders
may￿not￿agree.

The￿participating￿customers￿have￿also￿agreed￿that￿they￿will￿not,￿without￿our￿prior￿written￿consent,￿transfer￿any￿of￿the
ordinary￿shares￿they￿acquired￿in￿the￿Customer￿Co-Investment￿Program￿(or￿depositary￿receipts￿representing￿those
shares)￿until￿two￿years￿and￿six￿months￿after￿the￿date￿they￿acquired￿such￿shares￿(September￿12,￿2012￿for￿Intel￿and
Samsung;￿October￿31,￿2012￿for￿TSMC).￿Upon￿expiry￿of￿such￿period,￿the￿ordinary￿shares￿held￿by￿participating￿customers
are￿freely￿transferable,￿subject￿to￿orderly￿market￿arrangements￿and￿certain￿other￿restrictions.￿Any￿sales￿of￿significant
amounts￿of￿shares￿by￿participating￿customers￿in￿the￿program￿could￿have￿a￿negative￿effect￿on￿our￿share￿price.

See￿Item￿4.B.￿"Business￿Overview,￿Customer￿Co-Investment￿Program".

Item 4 Information on the Company

A. History and Development of the Company
We￿commenced￿business￿operations￿in￿1984.￿ASM￿Lithography￿Holding￿N.V.￿was￿incorporated￿in￿the￿Netherlands￿on
October￿3,￿1994￿to￿serve￿as￿the￿holding￿company￿for￿our￿worldwide￿operations,￿which￿include￿operating￿subsidiaries
in￿the￿Netherlands,￿the￿United￿States,￿Italy,￿France,￿Germany,￿the￿United￿Kingdom,￿Ireland,￿Belgium,￿Korea,￿Taiwan,
Singapore,￿China￿(including￿Hong￿Kong),￿Japan,￿Malaysia￿and￿Israel.￿In￿2001,￿we￿changed￿our￿name￿to￿ASML￿Holding
N.V.￿Our￿registered￿office￿is￿located￿at￿De￿Run￿6501,￿5504￿DR￿Veldhoven,￿the￿Netherlands,￿telephone￿number￿+31￿40
268￿3000.

From￿time￿to￿time,￿we￿pursue￿acquisitions￿of￿businesses￿that￿we￿believe￿will￿complement￿or￿enhance￿our￿core
lithography￿business.￿These￿have￿included￿amongst￿others￿the￿acquisition￿of￿MaskTools￿division￿in￿1999,￿Silicon￿Valley
Group￿("SVG")￿in￿2001,￿Brion￿Technologies,￿Inc.￿("Brion")￿in￿2007￿and￿the￿acquisition￿of￿Wijdeven￿Motion￿Holding￿B.V.
and￿Wijdeven￿Motion￿B.V.￿(hereafter￿jointly￿referred￿to￿as￿"Wijdeven￿Motion")￿in￿October￿2012.

On￿October￿16,￿2012,￿we￿entered￿into￿a￿merger￿agreement￿(the￿"Merger￿Agreement")￿with￿Cymer.￿Pursuant￿to￿the￿merger
agreement,￿we￿will￿acquire￿each￿share￿of￿Cymer’s￿common￿stock￿for￿consideration￿per￿Cymer￿share￿of￿USD￿20.00￿in
cash￿and￿ordinary￿shares￿of￿ASML￿equal￿to￿a￿fixed￿ratio￿of￿1.1502￿ASML￿ordinary￿shares￿per￿share￿of￿Cymer￿common
stock.￿The￿Merger￿Agreement￿provides￿for￿the￿acquisition￿of￿all￿of￿the￿outstanding￿shares￿of￿Cymer￿by￿a￿wholly-owned
subsidiary￿of￿ASML￿US￿Inc.,￿an￿indirect￿wholly-owned￿subsidiary￿of￿ASML￿Holding￿N.V.￿Completion￿of￿the￿merger￿is
subject￿to￿customary￿closing￿conditions,￿including￿expiration￿or￿termination￿of￿the￿applicable￿waiting￿period￿under￿the
Hart-Scott-Rodino￿Act￿and￿receipt￿of￿approvals￿under￿other￿foreign￿competition￿laws.￿On￿february￿5,￿2013,￿the￿Cymer
Stockholders￿approved￿the￿merger￿agreement.￿We￿expect￿the￿transaction￿to￿close￿in￿the￿first￿half￿of￿2013,￿however￿there
is￿no￿assurance￿that￿the￿transaction￿will￿be￿completed￿within￿the￿expected￿time￿period￿or￿at￿all.￿See￿"Risk￿Factors,￿We
May￿Be￿Unable￿to￿Make￿Desirable￿Acquisitions￿or￿to￿Integrate￿Any￿Businesses￿We￿Successfully￿Acquire".

See￿Item￿4.B.￿"Business￿overview,￿Research￿and￿development"￿and￿item￿10.C.￿"Material￿Contracts,￿Cymer￿Merger"￿for
more￿information￿on￿our￿agreements￿to￿acquire￿Cymer.

ASML￿ANNUAL￿REPORT￿2012

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Capital￿Expenditures￿and￿Divestures
Our￿capital￿expenditures￿(purchases￿of￿property,￿plant￿and￿equipment)￿for￿2012,￿2011￿and￿2010￿amounted￿to￿EUR￿171.9
million,￿EUR￿300.9￿million￿and￿EUR￿128.7￿million,￿respectively.￿Our￿capital￿expenditures￿in￿these￿years￿mainly￿related
to￿(i)￿the￿construction￿of￿our￿production￿facilities￿in￿Veldhoven,￿the￿Netherlands,￿for￿our￿latest￿technologies￿such￿as
EUV￿and￿an￿improved￿version￿of￿the￿TWINSCAN￿platform,￿(ii)￿information￿technology￿investments,￿and￿(iii)￿leasehold
improvements￿to￿our￿facilities.￿Capital￿expenditures￿are￿primarily￿financed￿through￿cash￿provided￿by￿operating￿activities.

Divestures,￿mainly￿consisting￿of￿machinery￿and￿equipment,￿amounted￿to￿EUR￿2.3￿million￿for￿2012,￿EUR￿3.4￿million￿for
2011￿and￿EUR￿6.7￿million￿for￿2010.￿See￿Note￿11￿to￿our￿consolidated￿financial￿statements.

B. Business Overview
We￿are￿one￿of￿the￿world's￿leading￿providers￿(measured￿in￿revenue)￿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￿approximately￿8,500￿employees￿on￿payroll￿(expressed￿in￿full￿time￿equivalents),￿serving￿chip
manufacturers￿in￿more￿than￿55￿locations￿in￿16￿countries.

Our￿business￿model
Our￿business￿model￿is￿derived￿from￿our￿"Value￿of￿Ownership"￿concept￿which￿is￿based￿on￿the￿following￿principles:
• offering￿ongoing￿improvements￿in￿productivity,￿imaging￿and￿overlay￿by￿introducing￿advanced￿technology￿based￿on
modular￿platforms￿and￿advanced￿applications￿outside￿the￿traditional￿lithography￿business,￿each￿resulting￿in￿lower
costs￿or￿higher￿value￿per￿product￿for￿our￿customers;

• providing￿customer￿services￿that￿ensure￿rapid,￿efficient￿installation￿and￿superior￿support￿and￿training￿to￿optimize

manufacturing￿processes￿of￿our￿customers￿and￿improve￿productivity;

• maintaining￿appropriate￿levels￿of￿R&D￿to￿offer￿the￿most￿advanced￿technology￿suitable￿for￿high-throughput￿and￿low-

cost￿volume￿production￿at￿the￿earliest￿possible￿date￿enhancing/following￿Moore's￿law;

• enhancing￿the￿capabilities￿of￿the￿installed￿base￿of￿our￿customers￿through￿ongoing￿field￿upgrades￿of￿key￿value￿drivers

(productivity,￿imaging￿and￿overlay)￿based￿on￿further￿technology￿developments;
reducing￿the￿cycle￿time￿between￿a￿customer’s￿order￿of￿a￿system￿and￿the￿use￿of￿that￿system￿in￿volume￿production;
•
• expanding￿operational￿flexibility￿in￿research￿and￿manufacturing￿by￿reinforcing￿strategic￿alliances￿with￿world￿class

partners,￿including￿outsourcing￿companies;
improving￿the￿reliability￿and￿uptime￿of￿our￿installed￿system￿base;￿and

•
• providing￿refurbishing￿services￿that￿effectively￿increase￿residual￿value￿by￿extending￿the￿life￿of￿equipment.

Market￿and￿Technology￿Overview
The￿chip-making￿business￿is￿focused￿on￿"shrink"￿or￿reducing￿the￿size￿of￿chip￿designs.￿The￿worldwide￿electronics￿and
computer￿industries￿have￿experienced￿significant￿growth￿since￿the￿commercialization￿of￿ICs￿in￿the￿1960s,￿largely￿due
to￿the￿continual￿reduction￿in￿the￿cost￿per￿function￿performed￿by￿ICs.￿Improvement￿in￿the￿design￿and￿manufacture￿of
ICs￿with￿higher￿circuit￿or￿"packing"￿densities￿has￿resulted￿in￿smaller￿and￿lower￿cost￿ICs￿capable￿of￿performing￿a￿greater
number￿of￿functions￿at￿faster￿speeds￿and￿with￿reduced￿power￿consumption.￿We￿believe￿that￿these￿long-term￿trends
will￿continue￿for￿the￿foreseeable￿future￿and￿will￿be￿accompanied￿by￿a￿continuing￿demand,￿subject￿to￿ongoing￿cyclical
variation,￿for￿production￿equipment￿that￿can￿accurately￿produce￿advanced￿ICs￿in￿high￿volumes￿at￿the￿lowest￿possible
cost.￿Lithography￿is￿used￿to￿print￿complex￿circuit￿patterns￿onto￿the￿wafers￿that￿are￿the￿primary￿raw￿material￿for￿ICs￿and
is￿one￿of￿the￿most￿critical￿and￿expensive￿steps￿in￿their￿fabrication.￿It￿is￿therefore￿a￿significant￿focus￿of￿the￿IC￿industry’s
demand￿for￿cost-efficient￿enhancements￿to￿production￿technology.

We￿primarily￿design,￿manufacture,￿market￿and￿service￿semiconductor￿processing￿equipment￿used￿in￿the￿fabrication
of￿ICs.￿Our￿lithography￿equipment￿includes￿Step￿&￿Scan￿systems,￿which￿combine￿stepper￿technology￿with￿a￿photo-
scanning￿method.

Our￿systems￿use￿a￿mask￿to￿achieve￿the￿required￿chip￿pattern.￿A￿mask￿is￿a￿flat,￿transparent￿quartz￿plate￿containing￿an
opaque￿microscopic￿pattern:￿an￿image￿of￿the￿electronic￿circuitry￿for￿one￿layer￿of￿a￿chip.￿The￿mask￿is￿placed￿in￿a￿scanner
where￿intense￿light￿passing￿through￿it￿projects￿the￿pattern,￿via￿a￿series￿of￿reducing￿lenses,￿onto￿part￿of￿the￿wafer.￿Before
exposure,￿the￿wafer￿is￿coated￿with￿photo￿resist￿and￿positioned￿so￿that￿the￿projected￿pattern￿aligns￿with￿existing￿features
on￿the￿wafer.￿After￿exposure￿and￿developing,￿the￿pattern￿left￿on￿the￿wafer￿surface￿is￿used￿to￿selectively￿process￿and
build￿up￿the￿next￿layer.

ASML￿ANNUAL￿REPORT￿2012

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Customer￿Roadmaps
The￿four￿major￿customer￿sectors￿to￿which￿we￿sell￿our￿products￿are￿micro-processor￿manufacturers￿and￿Foundries
(together￿"Logic"),￿NAND-Flash￿memory￿and￿DRAM￿memory￿chipmakers￿(together￿"Memory").

Supported￿by￿their￿technology￿roadmaps,￿IC￿manufacturers￿continue￿to￿show￿interest￿in￿shrinking￿resolution￿as￿a￿means
to￿lower￿manufacturing￿costs￿per￿unit￿or￿adding￿value￿through￿more￿functional￿integration.￿We￿believe￿that￿the￿leading
IC￿manufacturers￿have￿plans￿to￿migrate￿their￿production￿capabilities￿in￿the￿foreseeable￿future￿to￿resolutions￿beyond￿10
nanometer￿("nm"),￿for￿which￿they￿will￿require￿state-of-the-art￿lithography￿equipment.

Products
We￿develop￿lithography￿systems￿and￿related￿products￿for￿the￿semiconductor￿industry￿and￿related￿patterning
applications.￿Our￿product￿development￿strategy￿focuses￿on￿the￿development￿of￿product￿families￿based￿on￿a￿modular,
upgradeable￿design.

Our￿older￿PAS￿2500￿and￿PAS￿5000￿lithography￿systems,￿which￿we￿no￿longer￿manufacture￿but￿continue￿to￿refurbish,
are￿used￿for￿g-line￿and￿i-line￿processing￿of￿wafers￿up￿to￿150￿mm￿in￿diameter￿and￿are￿employed￿in￿manufacturing
environments￿and￿in￿special￿applications￿for￿which￿design￿resolutions￿no￿more￿precise￿than￿0.5￿microns￿are￿required.

Our￿PAS￿5500￿product￿family￿comprises￿advanced￿wafer￿steppers￿and￿Step￿&￿Scan￿systems￿suitable￿for￿i-line,￿Krypton
Fluoride￿("KrF")￿and￿Argon￿Fluoride￿("ArF")￿processing￿of￿wafers￿up￿to￿200￿mm￿in￿diameter￿and￿are￿employed￿in￿volume
manufacturing￿to￿achieve￿design￿nodes￿requiring￿resolutions￿down￿to￿90￿nm.

We￿offer￿TWINSCAN￿systems,￿based￿on￿i-line,￿KrF￿and￿ArF￿processing￿of￿wafers￿up￿to￿300￿mm￿in￿diameter￿for
manufacturing￿environments￿for￿which￿design￿resolutions￿down￿to￿38￿nm￿are￿required.￿The￿modular￿upgradeable￿design
philosophy￿of￿the￿PAS￿5500￿product￿family￿has￿been￿further￿refined￿and￿applied￿in￿the￿design￿TWINSCAN.￿Introduced
in￿2000,￿the￿TWINSCAN￿platform,￿is￿the￿basis￿for￿our￿current￿and￿next-generation￿Step-and￿Scan￿systems,￿which￿are
capable￿of￿extending￿shrink￿technology￿down￿to￿the￿38￿nm￿node￿and￿beyond.

We￿are￿one￿of￿the￿world's￿leaders￿(measured￿in￿revenues)￿in￿the￿innovation￿of￿immersion￿technologies￿and￿we￿were￿the
world’s￿first￿producer￿of￿dual-stage￿design￿TWINSCAN￿systems.￿Wafer￿measurement,￿including￿focus￿and￿alignment,
is￿completed￿on￿the￿dry￿stage,￿while￿the￿imaging￿process,￿using￿water￿applied￿between￿the￿wafer￿and￿the￿lens,￿is
completed￿on￿the￿wet￿stage.￿The￿dual-stage￿advantage￿of￿TWINSCAN￿immersion￿systems￿enables￿our￿customers￿to
benefit￿from￿the￿process￿enhancements￿of￿immersion￿while￿continuing￿to￿use￿familiar￿and￿proven￿metrology￿technology.

Furthermore,￿we￿continuously￿develop￿and￿sell￿a￿range￿of￿product￿options￿and￿enhancements￿designed￿to￿increase
productivity￿and￿improve￿imaging￿and￿overlay￿to￿optimize￿value￿of￿ownership￿over￿the￿entire￿life￿of￿our￿systems.

The￿NXE￿platform￿("NXE")￿is￿based￿on￿a￿new￿platform￿utilizing￿the￿concepts￿of￿the￿TWINSCAN￿platform.￿NXE￿extends
the￿industry￿proven￿modularity￿of￿our￿TWINSCAN￿NXT￿system￿("NXT")￿with￿new￿innovative￿technologies￿to￿support
EUV￿imaging￿in￿several￿system￿critical￿areas,￿including￿the￿EUV￿light￿source,￿the￿reflective￿mirror￿optical￿system￿and￿all
encompassed￿within￿a￿vacuum￿system.￿NXE￿is￿targeted￿for￿production￿of￿ICs￿down￿to￿16￿nm￿and￿beyond.￿It￿is￿equipped
with￿EUV￿light￿source￿technology,￿based￿upon￿tin￿plasma,￿producing￿light￿at￿a￿wavelength￿of￿13.5￿nm.￿In￿addition,￿the
NXE￿system￿has￿an￿innovative￿optical￿technology￿utilizing￿reflective￿mirrors￿rather￿than￿the￿traditional￿refractive￿optics
with￿a￿numerical￿aperture￿("NA")￿of￿0.25￿–￿0.33.￿The￿light￿in￿NXE￿operates￿in￿a￿vacuum￿environment,￿through￿the￿entire
optical￿train￿to￿wafer￿level.￿With￿the￿combination￿of￿these￿revolutionary￿technologies,￿EUV￿offers￿the￿potential￿to￿provide
our￿customers￿a￿roadmap￿for￿future￿shrink,￿and￿we￿expect￿it￿to￿become￿the￿Lithography￿technology￿for￿the￿coming
years.￿The￿success￿of￿EUV￿remains￿particularly￿dependent￿on￿light￿source￿(laser)￿availability￿and￿continuing￿related
technical￿advances￿by￿us￿and￿our￿suppliers,￿as￿well￿as￿infrastructure￿developments￿in￿masks￿and￿photoresists.￿We￿are
actively￿working￿with￿our￿suppliers￿to￿improve￿the￿availability￿and￿performance￿of￿the￿light￿source￿and￿to￿achieve￿these
related￿technical￿advances.

ASML￿ANNUAL￿REPORT￿2012

13

Cymer

We￿have￿agreed￿to￿acquire￿Cymer,￿subject￿to￿certain￿closing￿conditions.￿We￿believe￿that￿the￿acquisition￿of￿Cymer,
if￿completed,￿will￿help￿us￿achieving￿our￿strategic￿objective￿of￿delivering￿an￿economically￿viable￿EUV￿scanner￿to
semiconductor￿manufacturers￿as￿soon￿as￿reasonably￿possible.￿We￿believe￿that￿combining￿Cymer's￿expertise￿in￿EUV￿light
sources￿with￿our￿expertise￿in￿lithography￿systems￿design￿and￿integration￿will￿reduce￿the￿risks￿related￿to￿the￿successful
development￿of￿and￿accelerate￿the￿introduction￿of￿EUV￿technology.￿Without￿the￿acquisition,￿we￿do￿not￿believe￿that
Cymer￿would￿have￿sufficient￿resources￿to￿complete￿the￿development￿of￿the￿EUV￿source￿and￿as￿a￿result,￿the￿only￿way￿to
make￿the￿EUV￿source￿development￿successful￿without￿additional￿delay￿is￿through￿the￿acquisition￿of￿Cymer.￿In￿addition
we￿believe￿that￿the￿acquisition￿will￿allow￿us￿to￿more￿effectively￿partition￿responsibilities￿between￿Cymer,￿its￿suppliers￿and
us￿with￿respect￿to￿EUV￿light￿source￿development,￿reducing￿risk￿and￿increasing￿development￿speed.

Completion￿of￿the￿merger￿is￿subject￿to￿customary￿closing￿conditions,￿including￿expiration￿or￿termination￿of￿the
applicable￿waiting￿period￿under￿the￿Hart-Scott-Rodino￿Act￿and￿receipt￿of￿approvals￿under￿other￿foreign￿competition
laws.￿On￿february￿5,￿2013,￿the￿Cymer￿Stockholders￿approved￿the￿merger￿agreement.￿We￿expect￿the￿transaction￿to￿close
in￿the￿first￿half￿of￿2013,￿however￿there￿is￿no￿assurance￿that￿the￿transaction￿will￿be￿completed￿within￿the￿expected￿time
period￿or￿at￿all.￿See￿"Risk￿Factors,￿We￿May￿Be￿Unable￿to￿Make￿Desirable￿Acquisitions￿or￿to￿Integrate￿Any￿Businesses￿We
Successfully￿Acquire".

See￿also￿Item￿10.C￿"Material￿Contracts,￿Cymer￿Merger".

Product￿Development
In￿2003,￿we￿introduced￿the￿second-generation￿of￿TWINSCAN￿("XT")￿systems￿with￿a￿50￿percent￿reduction￿in￿the￿main
production￿area￿occupied￿by￿our￿system.

In￿2004,￿we￿shipped￿our￿first￿lithography￿systems￿based￿on￿immersion￿technology.￿These￿shipments￿marked￿the￿delivery
of￿the￿industry’s￿first￿high￿productivity￿immersion￿scanners￿for￿mainstream￿production.

In￿2006,￿we￿shipped￿the￿industry’s￿first￿EUV￿Alpha￿Demo￿Tools￿to￿two￿research￿institutions,￿which￿work￿closely￿with
most￿of￿the￿world’s￿major￿IC￿manufacturers￿in￿developing￿manufacturing￿processes￿and￿materials.

Also￿in￿2006,￿we￿started￿volume￿production￿of￿the￿TWINSCAN￿XT:1700i￿("XT:1700i"),￿a￿193￿nm￿immersion￿scanner
capable￿of￿imaging￿at￿the￿45￿nm￿node￿in￿volume￿production￿environments.￿With￿a￿catadioptric￿lens￿design,￿this￿system
featured￿a￿NA￿of￿1.2,￿substantially￿higher￿than￿that￿of￿its￿predecessor,￿the￿XT:1400,￿which￿had￿a￿NA￿of￿0.93,￿exceeding
the￿non-immersion￿barrier￿of￿1.0.￿The￿XT:1700i￿has￿enabled￿chipmakers￿to￿improve￿resolution￿by￿30￿percent￿and￿has
been￿employed￿in￿the￿development￿and￿manufacturing￿of￿the￿latest￿advanced￿generation￿of￿ICs.

The￿acquisition￿of￿Brion￿in￿2007￿enabled￿us￿to￿improve￿the￿implementation￿of￿optical￿proximity￿correction￿("OPC")
technology￿and￿resolution￿enhancement￿techniques￿("RET")￿such￿as￿double￿patterning￿technology￿("DPT")￿and￿Source-
Mask￿Optimization￿("SMO")￿for￿masks.￿These￿improvements￿are￿extending￿the￿practical￿resolution￿limits￿of￿our￿ArF
immersion￿products.￿Brion’s￿computational￿lithography￿capabilities￿have￿enabled￿us￿to￿offer￿products￿that￿further
improve￿the￿set-up￿and￿control￿of￿our￿lithography￿systems.

Our￿current￿computational￿lithography￿portfolio￿comprises￿both￿traditional￿products￿(such￿as￿RET/OPC/DPT/SMO),￿as
well￿as￿solutions￿that￿directly￿interface￿with￿the￿numerous￿calibration￿controls￿in￿our￿scanner￿to￿optimize￿performance.
Our￿computational￿lithography￿products￿capture￿detailed￿knowledge￿of￿scanner￿design￿and￿real￿performance,￿which
enables￿them￿to￿accurately￿predict￿real-life￿manufacturing￿performance.￿These￿predictions￿are￿essential￿in￿addressing
possible￿ramp-up￿and￿yield￿problems￿in￿advance,￿potentially￿avoiding￿months￿of￿delay￿in￿time-to-market￿for￿our
customers.￿The￿same￿prediction￿capabilities￿allow￿our￿scanners￿to￿be￿optimally￿calibrated￿for￿improved￿performance￿in
production,￿given￿specific￿chip￿designs￿or￿masks,￿thereby￿achieving￿improved￿yield.

Once￿a￿scanner￿is￿optimally￿set-up￿for￿a￿given￿application,￿we￿also￿offer￿scanner￿control￿solutions￿that￿ensure￿that￿the
performance￿of￿the￿lithographic￿process￿remains￿optimal￿and￿stable￿throughout￿production.￿These￿scanner￿control
solutions￿leverage￿the￿scanner￿controls￿to￿compensate￿for￿potential￿performance￿drifts￿in￿the￿scanner￿itself,￿as￿well
as￿in￿other￿steps￿of￿the￿device￿manufacturing￿process,￿such￿as￿mask￿deterioration,￿resist￿coating￿fingerprints,￿etching
fingerprints,￿or￿chemical-mechanical￿polishing￿fingerprints.￿To￿provide￿a￿total￿solution￿for￿scanner￿control￿we￿offer￿our
own￿advanced￿wafer￿metrology￿system￿("Yieldstar").

In￿2007,￿we￿began￿volume￿shipment￿of￿the￿XT:1900i,￿with￿a￿new￿industry￿benchmark￿of￿1.35￿NA,￿which￿is￿close￿to￿the
practical￿limit￿for￿water-based￿immersion￿technology.￿This￿optical￿lithography￿system￿is￿capable￿of￿volume￿production￿of
ICs￿down￿to￿40￿nm￿and￿below￿and￿is￿used￿for￿high￿volume￿IC￿manufacturing￿at￿multiple￿customers￿worldwide.

ASML￿ANNUAL￿REPORT￿2012

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In￿2008,￿we￿partly￿discontinued￿research￿into￿optical￿maskless￿lithography￿due￿to￿the￿reduced￿market￿opportunity￿for
this￿technology.￿Research￿studies￿on￿alternative￿technologies￿continue￿for￿both￿mask-based￿and￿maskless￿lithography.

In￿2009,￿we￿started￿shipments￿of￿XT:1950i￿systems,￿the￿enhanced￿version￿of￿the￿XT:1900i,￿with￿improved￿throughput
of￿148￿wafers￿per￿hour,￿resolution￿of￿38￿nm￿and￿a￿scheduled￿overlay￿of￿4￿nm.￿This￿system￿extended￿the￿performance,
imaging￿and￿overlay￿specifications￿of￿the￿successful￿XT:1900i￿system.

In￿2009,￿we￿announced￿Tachyon￿SMO,￿a￿new￿product￿that￿provides￿the￿industry￿with￿improved￿manufacturable￿imaging
solutions￿and￿is￿a￿major￿advancement￿of￿our￿industry￿standard￿SMO￿technology,￿which￿was￿currently￿in￿use￿by￿leading
logic￿and￿memory￿manufacturers.

In￿2009,￿we￿introduced￿FlexRayTM￿programmable￿illumination￿and￿BaseLiner TM￿scanner￿matching￿technology.￿Together,
they￿offer￿scanner￿stability￿optimization￿and￿stabilize￿manufacturing￿process￿windows.

Also￿in￿2009,￿we￿announced￿an￿improved￿version￿of￿the￿TWINSCAN￿platform￿called￿NXT￿featuring￿new￿stage￿and
position￿control￿technology,￿providing￿improved￿imaging￿and￿overlay￿performance￿for￿immersion.￿Initial￿shipments
started￿in￿the￿third￿quarter￿of￿2009￿and￿volume￿production￿and￿shipments￿commenced￿in￿2010.￿By￿the￿end￿of￿2011,
three￿TWINSCAN￿NXT￿systems￿with￿throughput￿of￿200￿wafers￿per￿hour￿had￿been￿shipped￿to￿customers.

In￿2010,￿we￿shipped￿the￿first￿second-generation￿EUV￿system￿called￿NXE:3100,￿and￿five￿more￿were￿shipped￿in￿2011.￿EUV
will￿provide￿a￿large￿"process￿window"￿and￿much￿greater￿shrink￿compared￿with￿current￿approaches￿and￿we￿expect￿it￿to
become￿the￿lithography￿solution￿for￿the￿next￿decade.￿The￿NXE:3100￿combine￿a￿wavelength￿of￿13.5￿nm￿and￿an￿optical
system￿with￿a￿NA￿of￿0.25￿to￿provide￿imaging￿at￿a￿resolution￿of￿27￿nm.

In￿2011,￿we￿received￿11￿orders￿for￿the￿successor￿to￿the￿NXE:3100,￿the￿third-generation,￿high-volume￿EUV￿system
("NXE:3300B").￿We￿expect￿to￿ship￿our￿first￿NXT:3300B￿in￿the￿second￿quarter￿of￿2013￿and￿we￿are￿targeting￿for￿a￿maximum
of￿11￿potential￿shipments￿in￿2013.￿The￿third-generation￿EUV￿systems￿combine￿a￿wavelength￿of￿13.5￿mm￿and￿an￿optical
system￿with￿a￿numerical￿aperture￿of￿0.33￿to￿provide￿imaging￿at￿a￿resolution￿of￿22￿nm.￿The￿enhancements￿or￿extensions
of￿the￿NXE:3300B￿enable￿the￿improved￿performance,￿in￿the￿same￿manner￿that￿upgrades￿to￿the￿NXT￿platform￿improve￿its
productivity.

Also￿in￿2012,￿we￿delivered￿TWINSCAN￿NXT:19X0￿immersion￿systems￿which￿enable￿our￿customers￿to￿increase￿the
productivity￿to￿more￿than￿200￿wafers￿per￿hour.

The￿table￿below￿outlines￿our￿current￿product￿portfolio￿of￿Stepper￿and￿Scanner￿Systems￿by￿resolution￿and￿wavelength.

ASML￿lithography￿product￿portfolio￿of￿Step￿&￿Scan￿Systems

System
PAS 5500 SYSTEMS
PAS￿5500/4X0
PAS￿5500/750
PAS￿5500/850
PAS￿5500/1150
￿
TWINSCAN SYSTEMS
TWINSCAN￿XT:400
TWINSCAN￿XT:450
TWINSCAN￿XT:8X0
TWINSCAN￿XT:1000
TWINSCAN￿XT:1450
TWINSCAN￿XT:1700￿immersion
TWINSCAN￿XT:1900￿immersion
TWINSCAN￿XT:1950￿immersion
TWINSCAN￿NXT:19X0￿immersion
￿
EUV
NXE:3100
NXE:3300B

Resolution
￿
280￿nm
130￿nm
110￿nm
90￿nm
￿
￿
350￿nm
220￿nm
110￿nm
80￿nm
65￿nm
45￿nm
40￿nm
38￿nm
38￿nm
￿
￿
27￿nm
22￿nm

Wavelength
￿
365￿nm
248￿nm
248￿nm
193￿nm
￿
￿
365￿nm
365￿nm
248￿nm
248￿nm
193￿nm
193￿nm
193￿nm
193￿nm
193￿nm
￿
￿
13.5￿nm
13.5￿nm

Lightsource
￿
i-line
KrF
KrF
ArF
￿
￿
i-line
i-line
KrF
KrF
ArF
ArF
ArF
ArF
ArF
￿
￿
EUV
EUV

Numerical aperture
￿
0.48-0.65
0.50-0.70
0.55-0.80
0.50-0.75
￿
￿
0.48-0.65
0.48-0.65
0.55-0.80
0.50-0.93
0.65-0.93
0.75-1.20
0.85-1.35
0.85-1.35
0.85-1.35
￿
￿
0.25
0.33

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15

The￿table￿above￿can￿be￿further￿explained￿by￿the￿following￿notes:
• This￿table￿does￿not￿include￿older￿(including￿pre-used)￿products￿sold￿on￿the￿PAS￿2500,￿PAS￿5000￿and￿PAS￿5500

platforms￿or￿system￿enhancements￿on￿steppers￿and￿scanners￿and￿other￿products￿(e.g.￿Yieldstar￿or￿computational
lithography￿products).

• XT￿is￿a￿TWINSCAN￿system￿for￿200￿and￿300￿mm￿wafer￿sizes.
• Wavelength￿refers￿to￿the￿frequency￿of￿light￿going￿through￿projection￿lenses;￿the￿shorter￿the￿wavelength,￿the￿smaller

the￿line-width￿and￿the￿finer￿the￿pattern￿on￿the￿IC.

• 1￿nm￿is￿equal￿to￿one￿billionth￿of￿a￿meter.
• The￿X￿in￿the￿product￿number￿represents￿different￿models￿in￿the￿product￿portfolio￿within￿the￿same￿resolution.￿For

example￿XT:8X0￿can￿either￿represent￿XT:800￿or￿XT:850.

• NXT￿is￿an￿improved￿version￿of￿the￿current￿TWINSCAN￿system,￿introducing￿new￿stages￿and￿stage￿position￿control

technology,￿which￿enable￿improved￿imaging￿and￿overlay.

• NXE￿is￿a￿new￿platform￿utilizing￿the￿concepts￿of￿the￿TWINSCAN￿platform￿with￿complete￿new￿technologies￿in￿three

areas:￿light￿source,￿lens￿system,￿and￿vacuum￿body.

We￿have￿been￿developing￿Yieldstar￿for￿overlay￿and￿critical￿dimension￿(CD)￿measurements￿by￿using￿scatterometry
technology.￿Yieldstar￿scatterometry￿provides￿high￿accuracy￿and￿low￿cost￿wafer￿metrology￿data￿that￿can￿be￿used￿for
further￿improving￿the￿NXT/NXE￿performance.￿￿￿￿￿￿￿￿￿￿￿￿

Sales,￿Customer￿Support￿and￿Customers￿
We￿support￿our￿customers￿with￿a￿broad￿range￿of￿applications,￿services,￿and￿technical￿support￿products￿to￿maintain￿and
maximize￿the￿performance￿of￿our￿systems￿at￿customer￿sites.￿We￿also￿offer￿refurbished￿and￿remanufactured￿tools,￿system
upgrades￿and￿enhancements,￿and￿technical￿training.

We￿market￿and￿sell￿our￿products￿through￿our￿direct￿sales￿force.

Our￿field￿sales,￿field￿engineers￿and￿applications,￿service￿and￿technical￿support￿specialists￿are￿located￿throughout￿Asia,
the￿United￿States￿and￿Europe.￿We￿have￿established￿the￿ASML￿Center￿of￿Excellence￿("ACE")￿in￿Taiwan,￿Asia.￿The￿primary
goal￿of￿ACE￿is￿to￿serve￿as￿a￿supplementary￿engine￿to￿propel￿ASML’s￿long-term￿growth.￿ACE￿features￿customer￿support,
training,￿logistics,￿refurbishment,￿technology,￿application￿development￿and￿will￿also￿produce￿all￿Yieldstar￿systems.￿ACE
also￿enables￿sourcing￿of￿selected￿equipment￿modules,￿components￿and￿services￿in￿the￿region.￿Finally,￿ACE￿is￿used￿as￿a
training￿center￿to￿develop￿worldwide￿talent￿for￿our￿workforce.

Customers￿and￿Geographic￿Regions￿
In￿2012,￿recognized￿sales￿to￿our￿largest￿customer￿accounted￿for￿EUR￿1,236.1￿million,￿or￿26.1￿percent￿of￿net￿sales,
compared￿with￿EUR￿1,311.7￿million,￿or￿23.2￿percent￿of￿net￿sales,￿in￿2011￿(2010:￿EUR￿1,270.8￿million￿or￿28.2￿percent￿of
net￿sales).￿We￿expect￿that￿sales￿to￿a￿limited￿number￿of￿customers￿will￿continue￿to￿account￿for￿a￿high￿percentage￿of￿our
net￿sales￿in￿any￿particular￿period￿for￿the￿foreseeable￿future.

In￿2012,￿we￿derived￿70.7￿percent￿of￿net￿sales￿from￿Asia,￿23.9￿percent￿from￿the￿United￿States￿and￿5.4￿percent￿from
Europe￿(2011:￿Asia:￿66.5￿percent;￿US:￿24.6￿percent￿and￿Europe:￿8.9￿percent;￿2010:￿Asia:￿80.5￿percent;￿US:￿15.0￿percent
and￿Europe:￿4.5￿percent).￿See￿Note￿20￿to￿our￿consolidated￿financial￿statements.

Manufacturing,￿Logistics￿and￿Suppliers￿
Our￿business￿model￿is￿based￿on￿outsourcing￿production￿of￿a￿significant￿part￿of￿the￿components￿and￿modules￿that
comprise￿our￿lithography￿systems,￿working￿in￿partnership￿with￿suppliers￿from￿all￿over￿the￿world.￿Our￿manufacturing
activities￿comprise￿the￿subassembly￿and￿testing￿of￿certain￿modules￿and￿the￿final￿assembly￿and￿fine￿tuning/testing￿of
a￿finished￿system￿from￿components￿and￿modules￿that￿are￿manufactured￿to￿our￿specifications￿by￿third￿parties￿and￿by
us.￿All￿of￿our￿manufacturing￿activities￿(subassembly,￿final￿assembly￿and￿system￿fine￿tuning/testing)￿are￿performed￿in
clean￿room￿facilities￿in￿Veldhoven,￿the￿Netherlands,￿in￿Wilton,￿Connecticut,￿the￿United￿States￿and￿in￿Linkou,￿Taiwan.
We￿procure￿stepper￿and￿scanner￿system￿components￿and￿subassemblies￿from￿a￿single￿supplier￿or￿a￿limited￿group￿of
suppliers￿in￿order￿to￿ensure￿overall￿quality￿and￿timeliness￿of￿delivery.￿We￿jointly￿operate￿a￿formal￿strategy￿with￿suppliers
known￿as￿"value￿sourcing",￿which￿is￿based￿on￿competitive￿performance￿in￿quality,￿logistics,￿technology￿and￿total￿cost.
The￿essence￿of￿value￿sourcing￿is￿to￿maintain￿a￿supply￿base￿that￿is￿world￿class,￿globally￿competitive￿and￿globally￿present.

Our￿value￿sourcing￿strategy￿is￿based￿on￿the￿following￿strategic￿principles:
•￿￿￿￿￿￿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.

ASML￿ANNUAL￿REPORT￿2012

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Value￿sourcing￿is￿intended￿to￿align￿the￿performance￿of￿our￿suppliers￿with￿our￿requirements￿on￿quality,￿logistics,
technology￿and￿total￿costs.

Zeiss￿is￿our￿sole￿external￿supplier￿of￿main￿optical￿systems￿and￿one￿of￿the￿suppliers￿of￿other￿components.￿In￿2012,￿28.0
percent￿of￿our￿aggregate￿cost￿of￿sales￿was￿purchased￿from￿Zeiss￿(2011:￿28.7￿percent;￿2010:￿31.4￿percent).

Zeiss￿is￿highly￿dependent￿on￿its￿manufacturing￿and￿testing￿facilities￿in￿Oberkochen￿and￿Wetzlar,￿Germany,￿and￿its
suppliers.￿Moreover,￿Zeiss￿has￿a￿finite￿capacity￿for￿production￿of￿lenses￿and￿optical￿components￿for￿our￿systems.￿The
expansion￿of￿this￿production￿capacity￿may￿require￿significant￿lead-time.￿From￿time￿to￿time,￿the￿number￿of￿systems￿we
have￿been￿able￿to￿produce￿has￿been￿limited￿by￿the￿capacity￿of￿Zeiss￿to￿provide￿us￿with￿lenses￿and￿optical￿components.
However,￿in￿2012￿our￿production￿was￿not￿limited￿by￿the￿deliveries￿from￿Zeiss.

Our￿relationship￿with￿Zeiss￿is￿structured￿as￿a￿strategic￿alliance￿pursuant￿to￿several￿agreements￿executed￿in￿1997￿and
subsequent￿years.￿These￿agreements￿define￿a￿framework￿in￿all￿areas￿of￿our￿business￿relationship.￿The￿partnership
between￿ASML￿and￿Zeiss￿is￿focused￿on￿continuous￿improvement￿of￿operational￿excellence.

Pursuant￿to￿these￿agreements,￿ASML￿and￿Zeiss￿have￿agreed￿to￿continue￿their￿strategic￿alliance￿until￿either￿party
provides￿at￿least￿three￿years’￿notice￿of￿its￿intent￿to￿terminate.

In￿addition￿to￿Zeiss,￿we￿also￿rely￿on￿other￿outside￿vendors￿for￿the￿components￿and￿subassemblies￿used￿in￿our￿systems,
each￿of￿which￿is￿obtained￿from￿a￿single￿supplier￿or￿a￿limited￿number￿of￿suppliers.

See￿also￿Item￿3.D.￿"Risk￿Factors,￿The￿Number￿of￿Systems￿We￿Can￿Produce￿is￿Limited￿by￿Our￿Dependence￿on￿a￿Limited
Number￿of￿Suppliers￿of￿Key￿Components".

We￿have￿a￿flexible￿labor￿model￿with￿a￿mix￿of￿fixed￿and￿flexible￿contracted￿labor￿in￿its￿manufacturing￿and￿R&D￿facilities
in￿Veldhoven,￿the￿Netherlands,￿and￿payroll￿employees￿compensated￿under￿a￿partly￿variable￿salary￿structure￿through
ASML’s￿profit￿sharing￿plan.￿This￿reinforces￿our￿ability￿to￿adapt￿more￿quickly￿to￿semiconductor￿market￿cycles,￿including
support￿for￿potential￿24-hour,￿seven￿days-a-week￿production￿activities.￿By￿maximizing￿the￿flexibility￿of￿our￿technically
skilled￿workforce,￿we￿can￿shorten￿lead-times:￿a￿key￿driver￿of￿added￿value￿for￿customers.￿Flexibility￿also￿reduces￿our
working￿capital￿requirements.

Research￿and￿Development￿
The￿semiconductor￿manufacturing￿industry￿is￿subject￿to￿rapid￿technological￿changes￿and￿new￿product￿introductions￿and
enhancements.￿We￿believe￿that￿continued￿and￿timely￿development￿and￿introduction￿of￿new￿and￿enhanced￿systems￿are
essential￿for￿us￿to￿maintain￿our￿competitive￿position.￿As￿a￿result,￿we￿have￿historically￿devoted￿a￿significant￿portion￿of
our￿financial￿resources￿to￿R&D￿programs,￿and￿we￿expect￿to￿continue￿to￿allocate￿significant￿resources￿to￿these￿efforts.
In￿addition,￿we￿have￿established￿sophisticated￿development￿centers￿in￿the￿Netherlands,￿the￿United￿States￿and￿Asia.
We￿are￿also￿involved￿in￿joint￿R&D￿programs￿with￿both￿public￿and￿private￿partnerships￿and￿consortiums,￿involving
independent￿research￿centers,￿leading￿chip￿manufacturers￿and￿governmental￿programs.￿We￿aim￿to￿own￿or￿license￿our
jointly￿developed￿technology￿and￿designs￿of￿critical￿components.

We￿apply￿for￿subsidy￿payments￿in￿connection￿with￿specific￿development￿projects￿under￿programs￿sponsored￿by￿the
Dutch￿government,￿the￿European￿Union,￿the￿United￿States￿government￿and￿the￿Taiwanese￿government.￿These￿direct
government￿grants￿are￿designed￿to￿stimulate￿high-risk￿research￿for￿the￿medium￿and￿long￿term￿future.￿R&D￿credits
amounted￿to￿EUR￿17.9￿million￿in￿2012,￿compared￿with￿EUR￿25.1￿million￿in￿2011￿and￿EUR￿29.5￿million￿in￿2010.

Our￿innovative￿immersion￿lithography￿systems￿place￿a￿fluid￿between￿the￿wafer￿and￿a￿system’s￿projection￿lens￿to￿enhance
focus￿and￿enable￿circuit￿line-width￿to￿shrink￿to￿smaller￿dimensions￿than￿what￿is￿possible￿with￿"dry"￿lithography￿systems.
ASML￿pioneered￿this￿"wet"￿technology￿and￿has￿experienced￿strong￿demand￿for￿immersion-based￿systems,￿which￿have
been￿adopted￿by￿most￿of￿our￿customers.

We￿have￿developed￿different￿immersion￿systems￿for￿different￿customer￿needs.￿We￿have￿optimized￿our￿TWINSCAN￿XT
immersion￿systems￿for￿cost-effective￿imaging￿down￿to￿38￿nm￿and￿beyond￿patterning,￿and￿have￿developed￿a￿new￿dual
wafer￿stage￿system￿called￿TWINSCAN￿NXT￿with￿improved￿positioning￿("overlay")￿and￿imaging.￿The￿TWINSCAN￿NXT
platform￿enables￿next￿generations￿of￿semiconductors￿through￿the￿so-called￿double￿patterning￿technique￿which￿requires
two￿exposures￿per￿layer￿on￿a￿chip,￿enabling￿precise￿imaging￿patterns￿and￿lines￿by￿using￿our￿TWINSCAN￿NXT￿planar
wafer￿stage￿and￿breakthrough￿grid￿metrology.

Our￿customers￿optimize￿their￿scanner￿performance￿by￿taking￿into￿account￿the￿entire￿chip￿creation￿process,￿from￿design
to￿volume￿manufacturing￿-￿we￿call￿this￿approach￿"holistic￿lithography".￿We￿complement￿our￿scanner￿products￿with￿a
rapidly￿expanding￿holistic￿lithography￿portfolio￿of￿software￿and￿metrology￿products￿to￿help￿our￿customers￿optimize

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semiconductor￿scanner￿performance,￿provide￿a￿faster￿start￿to￿chip￿production￿and￿achieve￿better￿imaging￿at￿higher
resolutions.￿In￿2012,￿the￿use￿of￿holistic￿lithography￿solutions￿continued￿to￿grow.￿Semiconductor￿manufacturers￿face
increasingly￿smaller￿margins￿of￿error￿as￿they￿shrink￿chip￿features.￿Holistic￿lithography￿provides￿a￿way￿to￿shrink￿within
these￿margins,￿offering￿significant￿revenue-generating￿and￿cost-saving￿opportunities￿to￿our￿customers.

In￿2010,￿we￿achieved￿a￿major￿milestone￿with￿EUV￿lithography￿when￿we￿shipped￿our￿first￿second-generation￿(NXE:3100)
system￿to￿a￿customer’s￿manufacturing￿site.￿In￿2011￿five￿additional￿EUV￿systems￿were￿shipped.￿These￿second
generation-systems￿(NXE:3100)￿are￿used￿by￿our￿customers￿to￿develop￿their￿EUV￿manufacturing￿process￿before￿high-
volume￿EUV￿systems￿will￿become￿available.

In￿2011,￿we￿received￿11￿orders￿for￿the￿successor￿to￿the￿NXE:3100,￿the￿third-generation,￿high-volume￿EUV￿system.￿We
expect￿to￿ship￿our￿first￿NXT:3300B￿in￿the￿second￿quarter￿of￿2013￿and￿we￿are￿targeting￿for￿a￿maximum￿of￿11￿potential
shipments￿in￿2013.￿The￿third-generation￿EUV￿systems￿combine￿a￿wavelength￿of￿13.5￿mm￿and￿an￿optical￿system￿with￿a
numerical￿aperture￿of￿0.33￿to￿provide￿imaging￿at￿a￿resolution￿of￿22￿nm.

During￿2012,￿our￿NXE:3100￿pre-production￿systems￿have￿exposed￿a￿cumulative￿total￿of￿more￿than￿30,000￿wafers￿at
customers￿sites,￿enabling￿successful￿recipe￿developments￿for￿the￿sub￿14￿nm￿Logic￿and￿22￿nm￿DRAM￿nodes.￿Imaging￿of
the￿NXE:3300B￿continues￿to￿improve￿by￿showing￿results￿down￿to￿14￿nm.￿With￿respect￿to￿the￿EUV￿light￿source￿power,￿we
have￿been￿able￿to￿show￿a￿stable￿full-field￿expose￿power￿of￿up￿to￿40￿Watts.

Also￿in￿2012,￿we￿delivered￿TWINSCAN￿NXT:19X0￿immersion￿systems￿which￿enable￿our￿customers￿to￿increase￿the
productivity￿to￿more￿than￿200￿wafers￿per￿hour.

We￿invested￿EUR￿589.1￿million￿in￿R&D￿in￿2012,￿compared￿with￿EUR￿590.3￿million￿in￿2011￿and￿EUR￿523.4￿million￿in￿2010.
We￿focused￿our￿R&D￿investments￿on￿EUV,￿immersion,￿and￿holistic￿lithography￿solutions￿and￿we￿accelerated￿our￿450mm
wafer￿size￿R&D￿investments,￿also￿as￿result￿of￿the￿Customer￿Co-Investment￿Program,￿announced￿July￿9,￿2012.￿See￿item
4.B.￿"Research￿and￿Development,￿Customer￿Co-Investment￿Program".

Customer Co-Investment Program

On￿July￿9,￿2012,￿we￿announced￿our￿Customer￿Co-Investment￿program￿to￿accelerate￿our￿development￿of￿EUV￿technology
beyond￿the￿current￿generation￿and￿our￿development￿of￿future￿450mm￿silicon￿wafer￿technology.￿The￿participating
customers￿agreed￿to￿fund￿EUR￿1.38￿billion￿of￿our￿research￿and￿development￿projects￿from￿2013￿through￿2017.￿This
program￿creates￿risk￿sharing￿with￿some￿of￿our￿largest￿customers￿while￿the￿results￿of￿ASML’s￿development￿programs￿will
be￿available￿to￿every￿semiconductor￿manufacturer￿with￿no￿restrictions.￿The￿R&D￿funding￿program￿in￿the￿Customer￿Co-
Investment￿Program￿consist￿of￿two￿funding￿projects:￿a￿450mm￿technology￿development￿project￿and￿a￿next-generation
EUV￿development￿project.￿ASML￿has￿entered￿into￿Non￿Recurring￿Engineering￿funding￿agreements￿with￿the￿participating
customers.

In￿addition,￿the￿participating￿customers￿also￿agreed￿to￿invest￿in￿ordinary￿shares￿equal￿to￿an￿aggregate￿for￿all
participating￿customers￿of￿23%￿of￿ASML's￿issued￿share￿capital￿(calculated￿giving￿effect￿to￿our￿Synthetic￿Share￿Buyback
in￿November￿2012)￿with￿the￿proceeds￿of￿the￿share￿issuance,￿EUR￿3.85￿billion,￿being￿returned￿to￿the￿holders￿of￿ordinary
shares￿(excluding￿the￿participating￿customers)￿through￿a￿Synthetic￿Share￿Buyback,￿executed￿in￿November￿2012.

See￿Item￿10.C￿"Material￿Contracts,￿Customer￿Co-Investment￿Program".

Cymer

We￿have￿agreed￿to￿acquire￿Cymer,￿subject￿to￿certain￿closing￿conditions.￿We￿believe￿that￿the￿acquisition￿of￿Cymer,
if￿completed,￿will￿help￿us￿achieving￿our￿strategic￿objective￿of￿delivering￿an￿economically￿viable￿EUV￿scanner￿to
semiconductor￿manufacturers￿as￿soon￿as￿reasonably￿possible.￿We￿believe￿that￿combining￿Cymer's￿expertise￿in￿EUV￿light
sources￿with￿our￿expertise￿in￿lithography￿systems￿design￿and￿integration￿will￿reduce￿the￿risks￿related￿to￿the￿successful
development￿of￿and￿accelerate￿the￿introduction￿of,￿EUV￿technology.￿Without￿the￿acquisition,￿we￿do￿not￿believe￿that
Cymer￿would￿have￿sufficient￿resources￿to￿complete￿the￿development￿of￿the￿EUV￿source￿and￿as￿a￿result,￿the￿only￿way￿to
make￿the￿EUV￿source￿development￿successful￿without￿additional￿delay￿is￿through￿the￿acquisition￿of￿Cymer.￿In￿addition
we￿believe￿that￿the￿acquisition￿will￿allow￿us￿to￿more￿effectively￿partition￿responsibilities￿between￿Cymer,￿its￿suppliers￿and
us￿with￿respect￿to￿EUV￿light￿source￿development,￿reducing￿risk￿and￿increasing￿development￿speed.

Completion￿of￿the￿merger￿is￿subject￿to￿customary￿closing￿conditions,￿including￿expiration￿or￿termination￿of￿the
applicable￿waiting￿period￿under￿the￿Hart-Scott-Rodino￿Act￿and￿receipt￿of￿approvals￿under￿other￿foreign￿competition
laws.￿On￿february￿5,￿2013,￿the￿Cymer￿Stockholders￿approved￿the￿merger￿agreement.￿We￿expect￿the￿transaction￿to￿close
in￿the￿first￿half￿of￿2013,￿however￿there￿is￿no￿assurance￿that￿the￿transaction￿will￿be￿completed￿within￿the￿expected￿time

ASML￿ANNUAL￿REPORT￿2012

18

period￿or￿at￿all.￿See￿"Risk￿Factors,￿We￿May￿Be￿Unable￿to￿Make￿Desirable￿Acquisitions￿or￿to￿Integrate￿Any￿Businesses￿We
Successfully￿Acquire".

See￿also￿Item￿10.C￿"Material￿Contracts,￿Cymer￿Merger".

Intellectual￿Property￿
We￿rely￿on￿intellectual￿property￿rights￿such￿as￿patents,￿copyrights￿and￿trade￿secrets￿to￿protect￿our￿proprietary
technology.￿We￿aim￿to￿obtain￿ownership￿rights￿on￿technology￿developed￿by￿or￿for￿us,￿alternatively,￿to￿have￿license￿rights
in￿place￿with￿respect￿to￿such￿technology.

In￿2007,￿ASML￿and￿Zeiss￿signed￿an￿agreement￿with￿Canon￿for￿the￿global￿cross-license￿of￿patents￿in￿their￿respective
fields￿of￿semiconductor￿lithography￿and￿optical￿components,￿used￿to￿manufacture￿ICs.￿There￿was￿no￿transfer￿of
technology￿and￿no￿payment￿was￿made￿among￿the￿parties.

From￿late￿2001￿through￿2004,￿we￿were￿party￿to￿a￿series￿of￿civil￿litigations￿and￿administrative￿proceedings￿in￿which
Nikon￿alleged￿ASML’s￿infringement￿of￿Nikon￿patents￿relating￿to￿lithography.￿ASML￿in￿turn￿filed￿claims￿against￿Nikon.
Pursuant￿to￿agreements￿executed￿on￿December￿10,￿2004,￿ASML,￿Zeiss￿and￿Nikon￿agreed￿to￿settle￿all￿pending￿worldwide
patent￿litigation￿between￿the￿companies.￿The￿settlement￿included￿an￿exchange￿of￿releases￿and￿a￿patent￿cross-license
agreement￿related￿to￿lithography￿equipment￿used￿to￿manufacture￿semiconductor￿devices￿(the￿"Nikon￿Cross-License
Agreement")￿and￿payments￿to￿Nikon￿by￿ASML￿and￿Zeiss.￿In￿connection￿with￿the￿settlement,￿ASML￿and￿Zeiss￿made
settlement￿payments￿to￿Nikon￿from￿2004￿to￿2007.￿The￿license￿period￿for￿certain￿patents￿subject￿to￿the￿Nikon￿Cross-
License￿Agreement,￿which￿were￿not￿perpetually￿licensed,￿ended￿on￿December￿31,￿2009.￿Pursuant￿to￿the￿terms￿of￿the
Nikon￿Cross-License￿Agreement,￿the￿parties￿have￿agreed,￿from￿January￿1,￿2010￿to￿December￿31,￿2014￿(the￿"Cross-
License￿Transition￿Period"),￿not￿to￿bring￿suit￿for￿claims￿related￿to￿infringement￿of￿those￿patents￿or￿for￿claims￿related
to￿infringement￿of￿patents￿issued￿during￿the￿Cross-License￿Transition￿Period.￿However,￿under￿the￿terms￿of￿the￿Cross-
License￿Agreement,￿beginning￿on￿January￿1,￿2015,￿the￿parties￿may￿bring￿suit￿for￿infringement￿of￿patents￿subject￿to￿the
Nikon￿Cross-License￿Agreement,￿including￿any￿infringement￿that￿occurred￿during￿the￿Cross-License￿Transition￿Period.
Damages￿related￿to￿claims￿for￿patent￿infringement￿occurring￿during￿the￿Cross-License￿Transition￿Period￿are￿limited￿to
three￿percent￿of￿the￿net￿sales￿price￿of￿products￿utilizing￿patents￿that￿are￿valid￿and￿enforceable.

See￿Item￿3.D.￿"Risk￿Factors,￿Failure￿to￿Adequately￿Protect￿the￿Intellectual￿Property￿Rights￿Upon￿Which￿We￿Depend
Could￿Harm￿Our￿Business"￿and￿"Risk￿Factors,￿Defending￿Against￿Intellectual￿Property￿Claims￿Brought￿by￿Others￿Could
Harm￿Our￿Business."

Competition￿
The￿semiconductor￿equipment￿industry￿is￿highly￿competitive.￿The￿principal￿elements￿of￿competition￿in￿our￿market￿are:

•
•

the￿technical￿performance￿characteristics￿of￿a￿lithography￿system;
the￿value￿of￿ownership￿of￿that￿system￿based￿on￿its￿purchase￿price,￿maintenance￿costs,￿productivity,￿and￿customer
service￿and￿support￿costs;
the￿exchange￿rate￿of￿the￿euro￿particularly￿against￿the￿Japanese￿yen￿which￿results￿in￿varying￿prices￿and￿margins;
the￿strength￿and￿breadth￿of￿our￿portfolio￿of￿patents￿and￿other￿intellectual￿property￿rights;￿and

•
•
• our￿customers’￿desire￿to￿obtain￿lithography￿equipment￿from￿more￿than￿one￿supplier.

We￿believe￿that￿the￿market￿segment￿for￿lithography￿systems￿and￿the￿investments￿required￿to￿be￿a￿significant￿competitor
in￿this￿market￿segment￿have￿resulted￿in￿increased￿competition￿for￿market￿share￿through￿the￿aggressive￿prosecution￿of
patents.￿Our￿competitiveness￿will￿increasingly￿depend￿upon￿our￿ability￿to￿protect￿and￿defend￿our￿patents,￿as￿well￿as￿our
ability￿to￿develop￿new￿and￿enhanced￿semiconductor￿equipment￿that￿is￿competitively￿priced￿and￿introduced￿on￿a￿timely
basis.
￿￿￿￿
Government￿Regulation
Our￿business￿is￿subject￿to￿direct￿and￿indirect￿regulation￿in￿each￿of￿the￿countries￿in￿which￿our￿customers￿or￿we￿do
business.￿As￿a￿result,￿changes￿in￿various￿types￿of￿regulations￿could￿affect￿our￿business￿adversely.￿The￿implementation
of￿new￿technological,￿safety￿or￿legal￿requirements￿could￿impact￿our￿products,￿or￿our￿manufacturing￿or￿distribution
processes,￿and￿could￿affect￿the￿timing￿of￿product￿introductions,￿the￿cost￿of￿our￿production,￿and￿products￿as￿well￿as￿their
commercial￿success.￿Moreover,￿environmental￿and￿other￿regulations￿that￿adversely￿affect￿the￿pricing￿of￿our￿products
could￿adversely￿affect￿our￿financial￿condition￿and￿our￿results￿of￿operations.￿The￿impact￿of￿these￿changes￿in￿regulation
could￿adversely￿affect￿our￿business￿even￿where￿the￿specific￿regulations￿do￿not￿directly￿apply￿to￿us￿or￿to￿our￿products.

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19

C. Organizational Structure
ASML￿Holding￿N.V.￿is￿a￿holding￿company￿that￿operates￿through￿its￿subsidiaries.￿Our￿major￿operating￿subsidiaries,￿each
of￿which￿is￿a￿wholly-owned￿(direct￿or￿indirect)￿subsidiary,￿are￿ASML￿Netherlands￿B.V.,￿ASML￿Systems￿B.V.,￿ASML￿Hong
Kong￿Limited￿and￿ASML￿US￿Inc.

See￿Exhibit￿8.1￿for￿a￿list￿of￿our￿main￿subsidiaries.

D. Property, Plant and Equipment
We￿lease￿a￿number￿of￿our￿facilities￿under￿operating￿leases.￿We￿also￿own￿a￿number￿of￿buildings,￿mainly￿consisting￿of
production￿facilities￿in￿the￿Netherlands,￿United￿States￿and￿Taiwan.￿The￿book￿value￿of￿land,￿buildings￿and￿constructions
owned￿amounted￿to￿EUR￿659.8￿million￿as￿of￿December￿31,￿2012￿compared￿with￿EUR￿586.3￿million￿as￿of￿December￿31,
2011.￿See￿Note￿11￿to￿our￿consolidated￿financial￿statements.

Subject￿to￿market￿conditions,￿we￿expect￿that￿our￿capital￿expenditures￿(purchases￿of￿property,￿plant￿and￿equipment)
in￿2013￿will￿be￿approximately￿EUR￿369.8￿million￿(2012:￿EUR￿171.9￿million).￿These￿expenditures￿will￿mainly￿consist￿of
investments￿used￿for￿the￿finalization￿of￿capacity￿expansion￿of￿EUV￿production￿facilities,￿which￿we￿plan￿to￿finalize￿by
the￿end￿of￿2014,￿and￿expansion￿of￿our￿facilities￿to￿support￿our￿450mm￿activities.￿We￿expect￿to￿finance￿these￿capital
expenditures￿through￿cash￿generated￿by￿operations￿and￿cash￿and￿cash￿equivalents.

Facilities￿in￿Europe
Our￿headquarters,￿main￿manufacturing￿facilities,￿applications￿laboratory￿and￿R&D￿facilities￿are￿located￿at￿a￿single￿site
in￿Veldhoven,￿the￿Netherlands.￿This￿state-of-the-art￿facility￿includes￿63￿thousand￿square￿meter￿of￿office￿space￿and￿42
thousand￿square￿meters￿of￿buildings￿used￿for￿manufacturing￿and￿R&D￿activities￿and￿21￿thousand￿square￿meters￿of
warehouses.￿We￿lease￿the￿majority￿of￿these￿facilities￿through￿long-term￿operating￿leases￿that￿contain￿purchase￿options.
Some￿of￿our￿office￿facilities￿at￿our￿headquarters￿in￿Veldhoven,￿the￿Netherlands,￿are￿financed￿through￿a￿special￿purpose
vehicle￿that￿is￿a￿variable￿interest￿entity￿("VIE").￿We￿also￿lease￿several￿sales￿and￿service￿facilities￿at￿locations￿across
Europe.

Facilities￿in￿the￿United￿States
Our￿United￿States￿head￿office￿is￿located￿in￿a￿9￿thousand￿square￿meter￿office￿building￿in￿Tempe,￿Arizona.￿We￿maintain
lithography￿research,￿development￿and￿manufacturing￿operations￿in￿a￿27￿thousand￿square￿meter￿facility￿in￿Wilton,
Connecticut,￿and￿a￿5￿thousand￿square￿meter￿facility￿in￿Santa￿Clara,￿California.￿We￿also￿lease￿several￿sales￿and￿service
facilities￿at￿locations￿across￿the￿United￿States.

Facilities￿in￿Asia
Our￿Asian￿headquarters￿is￿located￿in￿a￿425￿square￿meter￿office￿space￿in￿Hong￿Kong,￿The￿People's￿Republic￿of￿China.￿In
addition,￿our￿ACE￿facility￿in￿Linkou,￿Taiwan￿comprises￿clean￿room￿(approximately￿3￿thousand￿square￿meters)￿and
office￿space￿(approximately￿6￿thousand￿square￿meters).￿The￿ACE￿facility￿supports￿customers￿in￿the￿Asia-Pacific￿region
by￿focusing￿on￿technology￿and￿applications￿development,￿equipment￿support,￿training,￿logistics￿and￿refurbishment.
ACE￿also￿enables￿local￿sourcing￿of￿equipment,￿components,￿services￿and￿will￿produce￿all￿Yieldstar￿systems.￿Our￿facility
in￿Korea￿comprises￿a￿clean￿room￿(approximately￿700￿square￿meters)￿and￿office￿space￿(approximately￿6￿thousand￿square
meters).￿The￿purpose￿of￿this￿facility￿is￿to￿support￿a￿closer￿working￿relationship￿with￿our￿customers￿in￿Korea.￿We￿also
lease￿and￿own￿several￿sales,￿service￿and￿training￿facilities￿at￿locations￿across￿Asia.

Item 4A Unresolved Staff Comments

Not￿applicable.

Item 5 Operating and Financial Review and Prospects

Executive Summary

Introduction
ASML￿is￿one￿of￿the￿world's￿leading￿providers￿(measured￿in￿revenue)￿of￿lithography￿systems￿for￿the￿semiconductor
industry,￿manufacturing￿complex￿machines￿that￿are￿critical￿to￿the￿production￿of￿ICs￿or￿chips.￿Headquartered￿in
Veldhoven,￿the￿Netherlands,￿ASML￿is￿traded￿on￿NYSE￿Euronext￿Amsterdam￿and￿NASDAQ￿under￿the￿symbol￿ASML.￿As￿of
December￿31,￿2012,￿we￿employed￿8,497￿payroll￿employees￿(2011:￿7,955)￿and￿2,139￿temporary￿employees￿(2011:￿1,935),
measured￿in￿full-time￿equivalents.￿We￿provide￿services￿to￿our￿customers￿to￿optimize￿their￿manufacturing￿processes￿in
more￿than￿55￿locations￿in￿16￿countries.

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In￿2012,￿we￿generated￿net￿sales￿of￿EUR￿4,731.5￿million￿and￿income￿from￿operations￿of￿EUR￿1,156.8￿million,￿or￿24.4
percent￿of￿net￿sales.￿Net￿income￿in￿2012￿amounted￿to￿EUR￿1,146.3￿million,￿or￿24.2￿percent￿of￿net￿sales,￿representing
basic￿net￿income￿per￿ordinary￿share￿of￿EUR￿2.70.

In￿the￿executive￿summary￿below￿we￿provide￿an￿update￿of￿the￿semiconductor￿equipment￿industry,￿followed￿by￿a
discussion￿of￿our￿business￿strategy￿and￿our￿key￿performance￿indicators.￿All￿information￿disclosed￿in￿this￿section￿is
provided￿as￿a￿supplement￿to,￿and￿should￿be￿read￿in￿conjunction￿with,￿our￿Financial￿Statements￿and￿the￿accompanying
Notes￿to￿the￿Consolidated￿Financial￿Statements.

Semiconductor￿equipment￿industry
The￿chip-making￿business￿is￿focused￿on￿"shrink",￿or￿reducing￿the￿size￿of￿chip￿designs.￿Historically￿the￿semiconductor
industry￿has￿experienced￿significant￿growth￿largely￿due￿to￿the￿continual￿reduction￿of￿cost￿per￿function￿performed￿by
ICs.￿Improvement￿in￿the￿design￿and￿manufacture￿of￿ICs￿with￿higher￿circuit￿densities￿resulted￿in￿smaller￿and￿cheaper￿ICs
capable￿of￿performing￿a￿larger￿number￿of￿functions￿at￿higher￿speeds￿with￿lower￿power￿consumption.￿We￿believe￿that
these￿long-term￿trends￿will￿continue￿for￿the￿foreseeable￿future￿and￿will￿be￿accompanied￿by￿a￿continuing￿demand￿for
production￿equipment￿that￿is￿capable￿of￿accurate￿production￿of￿advanced￿ICs￿in￿high￿volumes￿at￿the￿lowest￿possible
cost.

Lithography￿equipment￿is￿used￿to￿print￿complex￿circuit￿patterns￿onto￿silicon￿wafers,￿which￿are￿the￿primary￿raw￿materials
for￿ICs.￿The￿printing￿process￿is￿one￿of￿the￿most￿critical￿and￿expensive￿steps￿in￿wafer￿fabrication.￿Lithography￿equipment
is￿therefore￿a￿significant￿focus￿of￿the￿IC￿industry’s￿demand￿for￿cost-efficient￿enhancements￿to￿production￿technology.

The￿costs￿to￿develop￿new￿lithography￿equipment￿are￿high.￿Accordingly,￿the￿lithography￿equipment￿industry￿is
characterized￿by￿the￿presence￿of￿only￿a￿few￿primary￿suppliers:￿ASML￿and￿Nikon,￿and￿(to￿a￿lesser￿degree)￿Canon.￿In
2012,￿ASML￿was￿one￿of￿the￿world’s￿leading￿providers￿of￿lithography￿equipment￿(measured￿in￿revenues).

Total￿lithography￿equipment￿shipped￿by￿the￿industry￿as￿a￿whole￿in￿the￿six￿years￿ended￿December￿31,￿2012,￿is￿set￿out￿in
the￿following￿table:

Year ended December 31

￿

Total￿units￿shipped1
Total￿value￿(in￿millions￿USD)1

2012
￿
270
6,451

2011
￿
376
8,186

2010
￿
304
6,416

2009
￿
128
2,485

2008
￿
344
5,388

2007
￿
604
7,144

1 Historical￿data￿and￿full-year￿2012￿estimates￿as￿reported￿by￿Gartner￿Dataquest￿in￿its￿fourth￿quarter￿2012￿report.

For￿the￿year￿2012,￿the￿latest￿indications￿of￿independent￿market￿analysts￿show￿a￿decrease￿in￿total￿lithography￿equipment
shipped￿to￿the￿market￿by￿the￿industry￿of￿28.2￿percent￿in￿unit￿volume￿and￿21.2￿percent￿in￿value.￿Our￿net￿sales￿decreased
by￿16.3￿percent￿compared￿to￿2011.￿Despite￿lower￿net￿sales￿during￿2012,￿it￿was￿our￿second￿best￿year￿ever￿based￿on￿total
net￿sales￿and￿profitability.￿During￿2012,￿the￿majority￿of￿the￿system￿sales￿was￿generated￿from￿Logic.

Business￿strategy
The￿long-term￿growth￿of￿the￿semiconductor￿industry￿is￿the￿result￿of￿the￿principle￿that￿the￿power,￿cost￿and￿time￿required
for￿every￿computation￿on￿a￿digital￿electronic￿device￿can￿be￿reduced￿by￿shrinking￿the￿size￿of￿transistors￿on￿chips.￿In
2012,￿chip￿makers￿routinely￿produced￿electronic￿chip￿features￿with￿geometries￿of￿32￿nanometers,￿compared￿to￿typical
geometries￿of￿10,000￿nanometers￿in￿the￿early￿1970s,￿resulting￿in￿an￿increase￿in￿the￿number￿of￿transistors￿on￿leading
chips￿from￿several￿thousand￿to￿over￿two￿billion.￿This￿trend￿was￿first￿observed￿by￿Intel￿co-founder￿Gordon￿Moore￿in
1965,￿and￿is￿referred￿to￿as￿‘Moore’s￿Law’.￿Moore’s￿Law￿has￿resulted￿in￿our￿information￿society￿with￿fast￿wired￿and
wireless￿communications￿–￿built￿on￿affordable￿chips.￿Moore’s￿Law￿also￿has￿an￿impact￿on￿the￿energy￿usage￿of￿chips.
Smaller￿geometries￿allow￿for￿much￿lower￿electrical￿currents￿to￿operate￿the￿chip.￿This￿has￿helped￿to￿contain￿the￿world’s
energy￿consumption￿despite￿the￿proliferation￿of￿affordable￿computing.￿Using￿advanced￿semiconductors￿in￿industrial￿and
consumer￿products￿often￿provides￿economic￿benefits,￿user-friendliness￿and￿increased￿safety.￿The￿technology￿revolution
powered￿by￿semiconductors￿has￿brought￿many￿advantages:￿not￿only￿can￿information￿be￿more￿widely￿disseminated￿than
ever￿before,￿affordable￿chip￿intelligence￿has￿also￿enabled￿industry￿and￿service￿sectors￿to￿create￿and￿distribute￿products
and￿ideas￿at￿lightning￿speed.

Smarter,￿smaller￿and￿more￿energy-efficient￿chips￿are￿made￿with￿increasingly￿sophisticated￿lithography￿systems￿produced
by￿ASML.￿Lithography￿systems￿are￿crucial￿to￿the￿roadmaps￿of￿chipmakers￿to￿make￿smaller￿transistors￿on￿chips.￿Our
business￿strategy￿is￿based￿on￿maintaining￿and￿further￿developing￿our￿position￿as￿a￿technology￿leader￿in￿semiconductor
lithography.￿When￿executed,￿this￿strategy￿results￿in￿the￿delivery￿of￿lithography￿systems￿which￿enable￿customers￿to

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produce￿highest￿performance￿and￿lowest￿cost￿chips.￿The￿superior￿value￿of￿ownership￿offered￿to￿customers￿as￿a￿result￿of
our￿strategy￿also￿maximizes￿our￿own￿financial￿performance,￿aligning￿the￿interests￿of￿ASML￿and￿our￿customers.

Sustainability￿over￿the￿long￿term￿is￿essential￿in￿the￿relationship￿between￿ASML￿and￿its￿customers,￿because￿customers
rely￿on￿us￿for￿their￿long-term￿roadmaps￿towards￿smarter￿and￿more￿energy￿efficient￿microchips.

Sustainability Strategy
Our￿customers￿want￿chip-making￿machines￿that￿produce￿more￿chips￿faster,￿using￿less￿energy￿and￿fewer￿natural
resources,￿at￿a￿similar￿cost.￿They￿also￿want￿us,￿as￿their￿supplier,￿to￿operate￿according￿to￿the￿highest￿environmental,
social￿and￿governance￿standards.￿Our￿sustainability￿strategy￿thus￿goes￿hand￿in￿hand￿with￿our￿business￿strategy,￿aimed
at￿maintaining￿and￿further￿developing￿our￿position￿as￿a￿technology￿leader￿in￿the￿semiconductor￿industry.

ASML’s￿sustainability￿strategy￿focuses￿on￿four￿domains:￿sustainable￿operations,￿sustainable￿products,￿sustainable￿value
chain￿and￿sustainable￿culture:
• Focusing￿on￿sustainable￿operations￿means￿we￿seek￿to￿reduce￿the￿environmental￿impact￿of￿both￿our￿manufacturing

process￿and￿our￿research￿and￿development￿activities.

• Providing￿sustainable￿product￿means￿we￿continuously￿strive￿to￿make￿our￿chip-making￿machines￿more￿efficient,

enabling￿our￿customers￿to￿reduce￿their￿energy￿and￿natural￿resources￿consumption￿per￿chip￿produced.

• Focusing￿on￿a￿sustainable￿value￿chain￿signifies￿our￿ambition￿to￿stimulate￿our￿suppliers￿to￿meet￿increasingly￿high

sustainability￿standards￿and￿to￿enable￿our￿customers￿to￿positively￿influence￿their￿impact￿on￿environment￿and￿society.

• Focusing￿on￿a￿sustainable￿culture￿means￿we￿seek￿to￿provide￿a￿working￿environment￿that￿inspires￿our￿highly-skilled

workforce￿and￿respects￿their￿cultural￿and￿individual￿differences.￿It￿also￿means￿we￿seek￿to￿make￿a￿positive￿contribution
to￿the￿well-being￿of￿the￿communities￿in￿which￿we￿operate.

Sustainability Governance

In￿2009,￿ASML￿decided￿to￿significantly￿strengthen￿its￿commitment￿in￿the￿area￿of￿sustainability￿by￿setting￿a￿number
of￿stringent￿objectives￿to￿be￿reached￿by￿2015.￿It￿is￿the￿mission￿of￿the￿Sustainability￿Board￿to￿monitor￿the￿realization
of￿these￿objectives.￿The￿mandate￿given￿by￿the￿Board￿of￿Management￿to￿the￿Sustainability￿Board￿is￿to￿review￿and
make￿recommendations￿on￿our￿sustainability￿management￿system￿and￿policies,￿authorize￿or￿recommend￿plans￿to￿the
Board￿of￿Management,￿provide￿guidance￿to￿management￿on￿objectives￿and￿targets,￿monitor￿and￿provide￿guidance
on￿sustainability￿performance￿and￿targets,￿monitor￿and￿oversee￿sustainability￿risk￿management￿review￿and￿monitor
stakeholder￿relations,￿and￿review￿and￿make￿recommendations￿on￿sustainability￿impacts￿of￿major￿business￿decisions.
The￿Sustainability￿Board￿also￿determines￿the￿scope,￿provides￿input,￿and￿recommends￿to￿the￿Board￿of￿Management
adoption￿of￿the￿Sustainability￿Report.

In￿2010,￿the￿Sustainability￿Board￿established￿the￿Corporate￿Sustainability￿department￿to￿coordinate￿the￿implementation
of￿the￿overall￿sustainability￿strategy￿and￿policies￿on￿a￿day-to-day￿basis.

In￿2011,￿senior￿management￿decided￿to￿expand￿the￿Sustainability￿Governance￿structure￿by￿nominating￿a￿‘domain￿owner’
for￿each￿of￿the￿four￿strategic￿focus￿areas.￿Domain￿owners￿are￿responsible￿for￿coordinating￿the￿implementation￿of￿the
sustainability￿goals￿in￿their￿respective￿domains.

In￿2012,￿as￿result￿of￿the￿nomination￿of￿domain￿owners￿in￿2011,￿the￿implementation￿of￿our￿sustainability￿strategy
accelerated,￿leading￿to￿achievement￿of￿several￿of￿our￿targets￿earlier￿than￿anticipated.

Customer focus
Ensuring￿customers￿are￿served￿with￿the￿right￿products￿at￿the￿right￿time,￿supported￿by￿excellent￿service,￿is￿key￿to￿our
commitment￿to￿a￿long-term￿relationship.￿With￿high-valued￿products,￿customers￿expect￿high-quality￿support￿customized
to￿their￿specific￿requirements.￿This￿support￿includes￿service￿engineers,￿equipped￿with￿the￿latest￿technical￿information,
to￿ensure￿the￿highest￿levels￿of￿system￿performance,￿as￿well￿as￿applications￿specialists￿who￿support￿optimal￿system
processing￿and￿new￿product￿implementation.

ASML￿aims￿to￿deliver￿lithography￿systems￿with￿the￿lowest￿cost￿of￿ownership￿and￿highest￿earnings.

Customer￿satisfaction￿is￿a￿critical￿objective￿of￿ASML.￿We￿have￿account￿teams￿that￿are￿specifically￿dedicated￿to￿customer
satisfaction￿throughout￿the￿lifecycle￿of￿our￿products.

Through￿2012,￿all￿of￿the￿top￿10￿chip￿makers￿worldwide,￿in￿terms￿of￿semiconductor￿capital￿expenditure,￿were￿our
customers.￿We￿also￿have￿a￿significant￿share￿of￿customers￿outside￿the￿top￿10.￿We￿strive￿for￿continued￿business￿growth

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with￿all￿our￿customers.￿We￿expect￿customer￿concentration￿to￿increase￿because￿of￿continuing￿consolidation￿in￿the
semiconductor￿manufacturing￿industry.

In￿2012,￿our￿satisfaction￿ratings￿by￿customers￿surpassed￿every￿lithography￿competitor￿for￿the￿tenth￿successive￿year,
according￿to￿VLSI￿Research,￿an￿independent￿industry￿research￿firm￿that￿surveyed￿customers￿representing￿95.0￿percent
of￿the￿world’s￿total￿semiconductor￿market.

Technology leadership
Our￿customers￿need￿lithography￿scanners￿that￿continuously￿improve￿performance￿in￿three￿areas:￿resolution,￿speed
and￿precision.￿The￿image￿of￿the￿electronic￿chip￿circuit￿must￿be￿extremely￿small￿(currently￿the￿smallest￿features￿have
a￿size￿of￿less￿than￿30￿nm),￿the￿system￿must￿be￿able￿to￿image￿billions￿of￿these￿features￿every￿second￿and￿it￿must￿be
able￿to￿do￿that￿with￿extreme￿precision￿of￿just￿a￿few￿nm￿(one￿nm￿is￿four￿silicon￿atoms).￿To￿realize￿and￿improve￿this
system￿performance￿for￿our￿customers,￿ASML￿needs￿to￿deliver￿the￿right￿technology￿at￿the￿right￿time￿to￿meet￿long-
term￿roadmaps￿which￿often￿extend￿many￿years￿into￿the￿future.￿Therefore,￿ASML￿is￿committed￿to￿significant￿long-term
investments￿in￿R&D￿that￿are￿not￿significantly￿impacted￿by￿short-term￿cyclical￿swings.￿In￿2012,￿our￿R&D￿investments￿(net
of￿credits)￿amounted￿to￿EUR￿589.1￿million￿(2011:￿EUR￿590.3￿million;￿2010:￿EUR￿523.4￿million).￿A￿significant￿part￿of￿this
budget￿was￿used￿for￿R&D￿jointly￿developed￿with￿our￿suppliers￿and￿technology￿partners.

Our￿lithography￿scanners￿are￿based￿on￿our￿dual-stage￿wafer￿imaging￿platform￿–￿the￿TWINSCAN￿system￿–￿which￿we
introduced￿in￿2000￿and￿which￿allows￿exposure￿of￿one￿wafer￿while￿simultaneously￿measuring￿the￿wafer￿which￿will￿be
exposed￿next.￿Our￿strong￿leadership￿in￿this￿capability￿has￿allowed￿us￿to￿achieve￿the￿industry’s￿highest￿productivity,
enabling￿reduced￿cost-per-exposure￿per￿wafer.￿Dual-stage￿lithography￿also￿supports￿the￿required￿accuracy￿to￿position
electronic￿features￿on￿the￿wafer,￿as￿it￿allows￿for￿more￿time￿to￿measure￿the￿wafer￿prior￿to￿exposure.￿We￿are￿the￿only
lithography￿manufacturer￿that￿enables￿volume￿production￿based￿on￿dual-stage￿systems.

In￿order￿to￿meet￿the￿resolution,￿speed￿and￿accuracy￿demands￿of￿our￿customers,￿we￿have￿focused￿our￿R&D￿investments
on￿three￿core￿programs:￿EUV,￿Immersion￿and￿holistic￿lithography￿solutions.

Our￿innovative￿immersion￿lithography￿systems￿place￿a￿fluid￿between￿the￿wafer￿and￿a￿system’s￿projection￿lens￿to￿enhance
focus￿and￿enable￿circuit￿line-width￿to￿shrink￿to￿smaller￿dimensions￿than￿what￿is￿possible￿with￿"dry"￿lithography￿systems.
ASML￿pioneered￿this￿"wet"￿technology￿and￿has￿experienced￿strong￿demand￿for￿immersion-based￿systems,￿which￿have
been￿adopted￿by￿most￿of￿our￿customers.

We￿have￿developed￿different￿immersion￿systems￿for￿different￿customer￿needs.￿We￿have￿optimized￿our￿TWINSCAN￿XT
immersion￿systems￿for￿cost-effective￿imaging￿down￿to￿38￿nm￿and￿beyond￿patterning,￿and￿have￿developed￿a￿new￿dual
wafer￿stage￿system￿called￿TWINSCAN￿NXT￿with￿improved￿positioning￿("overlay")￿and￿imaging.￿The￿TWINSCAN￿NXT
platform￿enables￿next￿generations￿of￿semiconductors￿through￿the￿so-called￿double￿patterning￿technique￿which￿requires
two￿exposures￿per￿layer￿on￿a￿chip,￿enabling￿precise￿imaging￿patterns￿and￿lines￿by￿using￿our￿TWINSCAN￿NXT￿planar
wafer￿stage￿and￿breakthrough￿grid￿metrology.

In￿2011,￿we￿shipped￿five￿second-generation￿(NXE:3100)￿EUV￿systems,￿in￿addition￿to￿one￿shipped￿in￿2010.￿Our
customers￿are￿using￿the￿NXE:3100￿system￿to￿develop￿their￿EUV￿manufacturing￿processes￿before￿high-volume￿EUV
systems￿will￿become￿available.￿As￿of￿December￿31,￿2011,￿we￿had￿received￿11￿orders￿for￿the￿successor￿to￿the￿NXE:3100,
the￿third-generation￿(NXE:3300B)￿high-volume￿EUV￿systems.￿The￿NXE￿(EUV)￿system,￿utilizing￿an￿evolved￿TWINSCAN
platform,￿enables￿our￿customers￿to￿extend￿their￿roadmap￿towards￿smaller￿chip￿features.￿EUV￿permits￿chip￿makers￿to
expose￿a￿critical￿layer￿in￿just￿one￿single￿step￿–￿as￿opposed￿to￿double￿patterning￿which￿requires￿multiple￿steps.￿EUV￿also
has￿a￿roadmap￿from￿the￿initial￿27￿nm￿resolution￿down￿to￿16￿nm￿and￿beyond.￿We￿have￿published￿a￿roadmap￿to￿develop￿a
range￿of￿EUV￿models,￿offering￿the￿greatest￿extendibility￿at￿the￿lowest￿cost￿of￿ownership￿for￿the￿future￿of￿lithography.

During￿2012,￿our￿NXE:3100￿pre-production￿systems￿have￿exposed￿a￿cumulative￿total￿of￿more￿than￿30,000￿wafers￿at
customers￿sites,￿enabling￿successful￿recipe￿developments￿for￿the￿sub￿14-nm￿Logic￿and￿22￿nm￿DRAM￿nodes.￿Imaging￿of
the￿NXE:3300B￿continues￿to￿improve￿by￿showing￿results￿down￿to￿14￿nm.￿With￿respect￿to￿the￿EUV￿light￿source￿power,￿we
have￿been￿able￿to￿show￿a￿stable￿full-field￿expose￿power￿of￿up￿to￿40￿Watts.

On￿October￿16,￿2012,￿we￿agreed￿to￿acquire￿Cymer,￿subject￿to￿certain￿closing￿conditions.￿The￿acquisition￿of￿Cymer,
if￿completed,￿will￿help￿us￿to￿achieving￿our￿strategic￿objective￿of￿delivering￿an￿economically￿viable￿EUV￿scanner￿to
semiconductor￿manufacturers￿as￿soon￿as￿reasonably￿possible.￿We￿believe￿that￿combining￿Cymer’s￿expertise￿in￿EUV￿light
sources￿with￿our￿expertise￿in￿lithography￿systems￿design￿and￿integration￿will￿reduce￿the￿risks￿related￿to￿the￿successful
development￿of,￿and￿accelerate￿the￿introduction￿of,￿EUV￿technology.

ASML￿ANNUAL￿REPORT￿2012

23

We￿complement￿our￿scanner￿products￿with￿a￿rapidly￿expanding￿holistic￿lithography￿portfolio￿of￿software￿and￿metrology
products￿to￿help￿our￿customers￿optimize￿semiconductor￿scanner￿performance,￿provide￿a￿faster￿start￿to￿chip￿production
and￿achieve￿better￿imaging￿at￿higher￿resolutions.￿In￿2012￿the￿use￿of￿holistic￿lithography￿solutions￿continued￿to￿grow.
Semiconductor￿manufacturers￿face￿increasingly￿smaller￿margins￿of￿error￿as￿they￿shrink￿chip￿features.￿Holistic￿lithography
provides￿a￿way￿to￿shrink￿within￿these￿margins,￿offering￿significant￿revenue-generating￿and￿cost-saving￿opportunities￿to
our￿customers.

Operational excellence
We￿strive￿to￿sustain￿our￿business￿success￿based￿on￿our￿technological￿leadership￿by￿continuing￿to￿execute￿our
fundamental￿operating￿strategy,￿including￿reducing￿lead-times￿while￿improving￿our￿cost￿competitiveness.￿Lead-time￿is
the￿time￿from￿a￿customer’s￿order￿to￿a￿tool￿delivery.

Our￿business￿strategy￿includes￿outsourcing￿the￿manufacturing￿of￿the￿majority￿of￿components￿and￿subassemblies￿that
make￿up￿our￿products.￿We￿work￿in￿partnership￿with￿suppliers,￿collaborating￿on￿quality,￿logistics,￿technology￿and￿total
cost.￿By￿operating￿our￿strategy￿of￿value￿sourcing,￿we￿strive￿to￿attain￿flexibility￿and￿cost￿efficiencies￿from￿our￿suppliers
through￿mutual￿commitment￿and￿shared￿risk￿and￿reward.￿Value￿sourcing￿also￿allows￿the￿flexibility￿to￿adapt￿to￿the
cyclicality￿of￿the￿world￿market￿for￿semiconductor￿lithography￿systems.

We￿have￿a￿flexible￿labor￿model￿with￿a￿mix￿of￿fixed￿and￿flexible￿contracted￿labor￿in￿its￿manufacturing￿and￿R&D￿facilities
in￿Veldhoven,￿the￿Netherlands,￿and￿payroll￿employees￿compensated￿under￿a￿partly￿variable￿salary￿structure￿through
ASML’s￿profit￿sharing￿plan.￿This￿reinforces￿our￿ability￿to￿adapt￿more￿quickly￿to￿semiconductor￿market￿cycles,￿including
support￿for￿potential￿24-hour,￿seven￿days-a-week￿production￿activities.￿By￿maximizing￿the￿flexibility￿of￿our￿technically
skilled￿workforce,￿we￿can￿shorten￿lead-times:￿a￿key￿driver￿of￿added￿value￿for￿customers.￿Flexibility￿also￿reduces￿our
working￿capital￿requirements.

In￿view￿of￿the￿economic￿volatility￿of￿the￿semiconductor￿industry,￿we￿continue￿to￿strive￿improving￿efficiencies￿in￿our
operations:￿addressing￿our￿cost￿structure￿and￿strengthening￿our￿capability￿to￿generate￿cash.

ASML￿ANNUAL￿REPORT￿2012

24

ASML￿operations￿update￿on￿key￿performance￿indicators

The￿following￿table￿presents￿the￿key￿performance￿indicators￿used￿by￿our￿Board￿of￿Management￿and￿senior￿management
to￿measure￿performance￿in￿our￿monthly￿operational￿review￿meetings.

Year ended December 31
(in millions)
￿
Sales
Net￿sales
Increase￿(decrease)￿in￿net￿sales￿(%)
Net￿system￿sales
Net￿service￿and￿field￿option￿sales
Sales￿of￿systems￿(in￿units)
Average￿selling￿price￿of￿total￿system￿sales
Average￿selling￿price￿of￿new￿system￿sales
Average￿selling￿price￿of￿used￿system￿sales
Value￿of￿systems￿backlog￿excluding￿EUV￿3,4
Systems￿backlog￿excluding￿EUV￿(in￿units)￿3,4
Average￿selling￿price￿of￿systems￿backlog￿excluding￿EUV￿3,4
Average￿selling￿price￿of￿systems￿backlog￿excluding￿EUV￿(New)￿3,4
Average￿selling￿price￿of￿systems￿backlog￿excluding￿EUV￿(Used)￿3,4
Immersion￿systems￿recognized￿(in￿units)5
NXE￿systems￿recognized￿(in￿units)6
Profitability
Gross￿profit
Income￿from￿operations
Net￿income
Liquidity
Cash￿and￿cash￿equivalents
Short-term￿investments
Operating￿cash￿flow

%²

42.4
24.4
24.2

2012  
EUR  
￿ ￿
￿ ￿
4,731.5 ￿
(16.3) ￿
3,801.6 ￿
929.9 ￿
170 ￿
22.4 ￿
24.8 ￿
7.6 ￿
1,214.1 ￿
46 ￿
26.4 ￿
29.8 ￿
4.0 ￿
72 ￿
1 ￿
￿ ￿
2,005.2 ￿
1,156.8 ￿
1,146.3 ￿
￿ ￿
1,767.6 ￿
930.0 ￿
703.5 ￿

￿
￿
￿
￿
￿
￿
￿
￿
￿
￿
￿
￿
￿
￿
￿
￿
￿
￿

￿
￿
￿
￿

%²

43.3
29.0
26.0

2011 1
EUR  
￿ ￿
￿ ￿
5,651.0 ￿
25.4 ￿
4,883.9 ￿
767.1 ￿
222 ￿
22.0 ￿
24.5 ￿
3.8 ￿
1,732.5 ￿
71 ￿
24.4 ￿
27.9 ￿
3.0 ￿
101 ￿
3 ￿
￿ ￿
2,449.4 ￿
1,641.2 ￿
1,467.0 ￿
￿ ￿
2,731.8 ￿
- ￿
2,070.4 ￿

￿
￿
￿
￿
￿
￿
￿
￿
￿
￿
￿
￿
￿
￿
￿
￿
￿
￿

￿
￿
￿
￿

%²

43.4
27.7
22.7

2010  
EUR  
￿ ￿
￿ ￿
4,507.9 ￿
182.4 ￿
3,894.7 ￿
613.2 ￿
197 ￿
19.8 ￿
24.1 ￿
4.4 ￿
3,855.7 ￿
157 ￿
24.6 ￿
27.7 ￿
5.1 ￿
95 ￿
- ￿
￿ ￿
1,955.2 ￿
1,250.7 ￿
1,021.8 ￿
￿ ￿
1,949.8 ￿
- ￿
940.0 ￿

￿
￿
￿
￿
￿
￿
￿
￿
￿
￿
￿
￿
￿
￿
￿
￿
￿
￿

￿
￿
￿
￿

1 As￿of￿January￿1,￿2011,￿ASML￿adopted￿Accounting￿Standards￿Update￿("ASU")￿2009-13,￿"Revenue￿Arrangements￿with￿Multiple￿Deliverables"￿which

amended￿ASC￿605-25.￿The￿ASU￿was￿adopted￿prospectively,￿and￿had￿an￿insignificant￿impact￿on￿timing￿and￿allocation￿of￿revenues.￿See￿Note￿1￿to￿the
consolidated￿financial￿statements.

2 As￿a￿percentage￿of￿net￿sales.
3 Our￿systems￿backlog￿and￿net￿bookings￿include￿only￿orders￿for￿which￿written￿authorizations￿have￿been￿accepted￿and￿system￿shipment￿and￿revenue

4

5

6

recognition￿dates￿within￿the￿following￿12￿months￿have￿been￿assigned.
From￿January￿1,￿2011,￿we￿value￿our￿net￿bookings￿and￿systems￿backlog￿at￿system￿sales￿value￿including￿factory￿options.￿Before￿January￿1,￿2011,￿we
valued￿net￿bookings￿and￿systems￿backlog￿at￿full￿order￿value￿(i.e.￿including￿factory￿options,￿field￿options￿and￿services).￿The￿comparative￿figures￿for
prior￿periods￿have￿not￿been￿adjusted￿because￿the￿impact￿on￿the￿comparative￿figures￿is￿insignificant￿(approximately￿EUR￿20.0￿million￿negative￿impact
on￿backlog￿value￿as￿of￿December￿31,￿2010).
Included￿in￿the￿total￿number￿of￿immersion￿system￿recognized￿in￿2012￿are￿68￿of￿our￿most￿advanced￿immersion￿technology￿NXT:19X0i￿systems￿(2011:￿78
and￿2010:￿34).
Through￿December￿31,￿2012￿a￿total￿of￿six￿NXE:3100￿systems￿had￿been￿shipped.￿Three￿of￿these￿systems￿were￿recognized￿in￿net￿system￿sales￿in￿2011,
one￿was￿recognized￿in￿2012,￿one￿was￿shipped￿under￿the￿condition￿of￿an￿operating￿lease￿contract￿and￿one￿is￿shipped￿to￿a￿research￿institute.

Sales
For￿the￿longer￿term,￿and￿based￿on￿industry￿analysts￿IC￿unit￿growth￿forecasts,￿we￿expect￿our￿sales￿level￿to￿grow.￿Our
sales￿levels￿depend￿on￿multiple￿growth￿drivers:￿macro-economic￿developments,￿technological￿developments,￿market
development,￿market￿share￿development￿and￿a￿broadening￿of￿our￿product￿and￿services￿scope.

Net￿sales￿decreased￿by￿EUR￿919.5￿million,￿or￿16.3￿percent,￿to￿EUR￿4,731.5￿million￿in￿2012￿from￿EUR￿5,651.0￿million￿in
2011￿(2010:￿EUR￿4,507.9￿million).￿The￿decrease￿in￿net￿sales￿mainly￿resulted￿from￿a￿decrease￿in￿net￿system￿sales￿of￿EUR
1,082.3￿million,￿or￿22.2￿percent,￿to￿EUR￿3,801.6￿million￿in￿2012￿from￿EUR￿4,883.9￿million￿in￿2011￿(2010:￿EUR￿3,894.7
million),￿partly￿offset￿by￿an￿increase￿in￿net￿service￿and￿field￿option￿sales￿of￿EUR￿162.8￿million￿or￿21.2￿percent￿to￿EUR
929.9￿million￿in￿2012￿from￿EUR￿767.1￿million￿in￿2011￿(2010:￿EUR￿613.2￿million),￿mainly￿due￿the￿further￿expansion￿of
Holistic￿Lithography,￿integrated￿metrology￿and￿feedback￿loops.￿The￿number￿of￿total￿systems￿sold￿decreased￿by￿23.4
percent￿to￿170￿systems￿in￿2012￿from￿222￿systems￿in￿2011￿(2010:197),￿mainly￿caused￿by￿decreased￿demand￿in￿Memory,
as￿its￿major￿driver,￿the￿PC￿business￿shrunk￿compared￿to￿2011.￿During￿2012,￿the￿majority￿of￿the￿system￿sales￿were
generated￿from￿Logic.

The￿ASP￿of￿our￿systems￿in￿2012￿EUR￿22.4￿million￿is￿in￿line￿with￿2011￿EUR￿22.0￿million￿(2010:￿EUR￿19.8￿million).

We￿started￿2012￿with￿a￿systems￿backlog￿excluding￿EUV￿of￿71￿systems.￿In￿2012,￿we￿booked￿orders￿for￿148￿systems,
received￿order￿cancellations￿for￿4￿systems￿and￿recognized￿sales￿for￿169￿systems.￿This￿resulted￿in￿a￿systems￿backlog￿of
46￿as￿of￿December￿31,￿2012.

ASML￿ANNUAL￿REPORT￿2012

25

 
 
 
As￿of￿December￿31,￿2012,￿our￿systems￿backlog￿excluding￿EUV￿was￿valued￿at￿EUR￿1,214.1￿million￿and￿includes￿46
systems￿with￿an￿ASP￿of￿EUR￿26.4￿million.￿As￿of￿December￿31,￿2011,￿the￿systems￿backlog￿was￿valued￿at￿EUR￿1,732.5
million￿and￿included￿71￿systems￿with￿an￿ASP￿of￿EUR￿24.4￿million.

Profitability
Our￿general￿strategy￿is￿to￿achieve￿annual￿income￿from￿operations￿to￿net￿sales￿of￿13.0￿to￿18.0￿percent￿at￿the￿trough￿of
the￿industry's￿business￿cycle￿and￿25.0￿to￿30.0￿percent￿at￿the￿peak.￿However￿in￿exceptional￿circumstances,￿as￿evidenced
by￿the￿financial￿and￿economic￿crisis￿in￿2009,￿we￿could￿see￿periods￿with￿income￿from￿operations￿that￿are￿substantially
below￿our￿minimum￿target￿level.

Income￿from￿operations￿decreased￿to￿EUR￿1,156.8￿million,￿or￿24.4￿percent￿of￿net￿sales,￿in￿2012￿from￿an￿income￿from
operations￿of￿EUR￿1,641.2￿million,￿or￿29.0￿percent￿of￿net￿sales,￿in￿2011￿(2010:￿EUR￿1,250.7￿million,￿or￿27.7￿percent￿of
net￿sales).￿The￿EUR￿484.4￿million￿decrease￿was￿mainly￿driven￿by￿the￿decrease￿of￿gross￿profit￿on￿the￿system￿sales￿of￿EUR
487.3￿million.

Gross￿profit￿on￿sales￿decreased￿to￿EUR￿2,005.2￿million￿or￿42.4￿percent￿of￿net￿sales￿in￿2012￿from￿EUR￿2,449.4￿million￿or
43.3￿percent￿of￿net￿sales￿in￿2011￿(2010:￿EUR￿1,955.2￿million￿or￿43.4￿percent￿of￿net￿sales).￿Lower￿gross￿profit￿was￿mainly
driven￿by￿the￿decreased￿number￿of￿total￿systems￿sold.￿Gross￿profit￿as￿a￿percentage￿of￿net￿sales￿in￿2012￿decreased
compared￿to￿2011,￿mainly￿due￿to￿increased￿infrastructure￿and￿manufacturing￿cost,￿driven￿primarily￿by￿EUV￿production,
lower￿utilization￿of￿our￿production￿capacity￿and￿higher￿cost￿incurred￿in￿relation￿to￿excess￿and￿obsolete￿inventory￿as
result￿of￿technological￿developments￿and￿design￿changes.

R&D￿costs￿(net￿of￿credits)￿in￿2012￿(EUR￿589.1￿million)￿are￿in￿line￿with￿2011￿(EUR￿590.3￿million).￿R&D￿spending￿remained
stable￿and￿mainly￿related￿to￿our￿strategic￿programs,￿in￿particular￿EUV,￿immersion￿and￿holistic￿lithography.

Selling,￿general￿and￿administrative￿("SG&A")￿costs￿increased￿by￿EUR￿41.4￿million,￿or￿19.0￿percent,￿to￿EUR￿259.3￿million
in￿2012,￿or￿5.5￿percent￿of￿net￿sales,￿from￿EUR￿217.9￿million￿in￿2011,￿or￿3.9￿percent￿of￿net￿sales.￿The￿increase￿was
mainly￿driven￿by￿transaction￿costs￿incurred￿of￿EUR￿26.1￿million￿related￿to￿the￿Customer￿Co-Investment￿Program￿and
transaction￿costs￿related￿to￿the￿proposed￿acquisition￿of￿Cymer￿and￿costs￿to￿implement￿and￿support￿IT￿solutions￿of￿EUR
10.2￿million.

The￿effective￿tax￿rate￿was￿0.4￿percent￿of￿income￿before￿income￿taxes￿in￿2012,￿compared￿with￿11.0￿percent￿of
income￿before￿income￿taxes￿in￿2011.￿The￿change￿in￿the￿effective￿tax￿rate￿is￿mainly￿due￿to￿a￿release￿of￿our￿liability￿for
unrecognized￿tax￿benefits￿of￿EUR￿92.5￿million￿after￿successful￿conclusion￿of￿tax￿audits￿in￿different￿jurisdictions￿which
almost￿completely￿offsets￿the￿tax￿expenses,￿resulting￿in￿an￿income￿tax￿expense￿of￿EUR￿4.3￿million￿(2011:￿EUR￿181.7
million).

Net￿income￿in￿2012￿amounted￿to￿EUR￿1,146.3￿million,￿or￿24.2￿percent￿of￿net￿sales,￿representing￿EUR￿2.70￿basic￿net
income￿per￿ordinary￿share,￿compared￿with￿net￿income￿in￿2011￿of￿EUR￿1,467.0￿million,￿or￿26.0￿percent￿of￿net￿sales,
representing￿EUR￿3.45￿basic￿net￿income￿per￿ordinary￿share￿(2010:￿EUR￿1,021.8￿million￿or￿22.7￿percent￿of￿net￿sales,
representing￿EUR￿2.35￿basic￿net￿income￿per￿ordinary￿share).

Liquidity
ASML￿seeks￿to￿ensure￿that￿cash￿generated￿from￿operations,￿together￿with￿the￿liquidity￿provided￿by￿existing￿cash
and￿cash￿equivalents￿and￿short-term￿investments￿and￿its￿borrowing￿capability,￿will￿be￿sufficient￿to￿satisfy￿its￿liquidity
requirements￿throughout￿every￿phase￿of￿the￿industry￿cycles.

Our￿cash￿and￿cash￿equivalents￿decreased￿to￿EUR￿1,767.6￿million￿as￿of￿December￿31,￿2012￿from￿EUR￿2,731.8￿million￿as
of￿December￿31,￿2011￿and￿our￿short-term￿investments￿increased￿to￿EUR￿930.0￿million￿(2011:￿nil).

We￿generated￿net￿cash￿from￿operating￿activities￿of￿EUR￿703.5￿million￿in￿2012.￿We￿used￿EUR￿1,119.8￿million￿for￿investing
activities￿in￿2012￿primarily￿relating￿to￿our￿purchased￿short-term￿investments￿in￿Dutch￿Treasury￿Certificates￿and￿our
deposits￿with￿the￿Dutch￿government.￿Net￿cash￿used￿in￿financing￿activities￿was￿EUR￿545.6￿million￿in￿2012.￿In￿2012￿net
cash￿used￿in￿financing￿activities￿includes￿the￿net￿cash￿outflow￿of￿EUR￿3,728.3￿million￿for￿the￿Synthetic￿Share￿Buyback,
EUR￿535.4￿million￿for￿our￿regular￿share￿buyback￿programs￿and￿EUR￿188.9￿million￿for￿our￿annual￿dividend￿payment,￿to￿a
large￿extent￿offset￿by￿the￿proceeds￿of￿EUR￿3,853.9￿million￿from￿issuance￿of￿shares￿under￿the￿Customer￿Co-Investment
Program￿and￿EUR￿53.8￿million￿net￿proceeds￿from￿issuance￿of￿shares￿in￿connection￿with￿the￿exercise￿and￿purchase￿of
employee￿stock￿options.

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The￿difference￿of￿EUR￿125.6￿million￿between￿the￿capital￿repayment￿of￿EUR￿3,728.3￿million￿and￿the￿net￿proceeds￿from
issuance￿of￿shares￿EUR￿3,853.9￿million￿relates￿to￿the￿capital￿repayment￿on￿ASML's￿treasury￿shares￿which￿was￿also￿part
of￿the￿Synthetic￿Share￿Buyback￿in￿November￿2012.

ASML’s￿available￿credit￿facility￿amounts￿to￿EUR￿500.0￿million.￿No￿amounts￿were￿drawn￿or￿outstanding￿under￿this￿facility
during￿2012￿(2011:￿nil).

A. Operating Results
Critical￿accounting￿policies￿using￿significant￿estimates￿
Our￿discussion￿and￿analysis￿of￿our￿financial￿condition￿and￿results￿of￿operations￿are￿based￿upon￿our￿consolidated
financial￿statements,￿which￿have￿been￿prepared￿in￿conformity￿with￿accounting￿principles￿generally￿accepted￿in￿the
United￿States￿of￿America￿("US￿GAAP").￿The￿preparation￿of￿our￿consolidated￿financial￿statements￿requires￿us￿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￿expenses￿during￿the
reported￿periods.￿Actual￿results￿could￿differ￿from￿those￿estimates.￿We￿evaluate￿our￿estimates￿continually￿and￿we￿base
our￿estimates￿on￿historical￿experience￿and￿on￿various￿other￿assumptions￿that￿we￿believe￿to￿be￿reasonable￿under￿the
circumstances.￿Actual￿results￿may￿differ￿from￿these￿estimates￿if￿the￿assumptions￿prove￿incorrect.￿To￿the￿extent￿there￿are
material￿differences￿between￿actual￿results￿and￿these￿estimates,￿our￿future￿results￿of￿operations￿could￿be￿materially￿and
adversely￿affected.￿We￿believe￿that￿the￿accounting￿policies￿described￿below￿require￿us￿to￿make￿significant￿judgments
and￿estimates￿in￿the￿preparation￿of￿our￿consolidated￿financial￿statements.

Revenue￿recognition
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.￿This￿policy￿generally￿results￿in￿revenue￿recognition￿from￿the￿sale￿of￿a￿system￿upon
delivery.￿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￿our￿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,￿if￿any.￿A￿system￿is￿shipped,￿and￿revenue￿is￿recognized,￿only￿after￿all￿contractual￿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￿is￿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,
we￿have￿never￿failed￿to￿successfully￿complete￿installation￿of￿a￿system￿at￿a￿customer’s￿premises.

In￿connection￿with￿the￿introduction￿of￿new￿technology,￿such￿as￿our￿second-generation￿EUV￿systems￿(NXE:3100),￿we
initially￿defer￿revenue￿recognition￿until￿completion￿of￿installation￿and￿acceptance￿of￿the￿new￿technology￿based￿system
at￿customer￿premises.￿As￿our￿systems￿are￿based￿largely￿on￿two￿product￿platforms￿that￿permit￿incremental,￿modular
upgrades,￿the￿introduction￿of￿genuinely￿"new"￿technology￿occurs￿infrequently,￿and￿in￿the￿past￿15￿years,￿has￿occurred￿on
only￿two￿occasions:￿2010￿(EUV)￿and￿1999￿(TWINSCAN).

We￿have￿no￿significant￿repurchase￿commitments￿in￿our￿general￿sales￿terms￿and￿conditions.￿From￿time￿to￿time￿the
we￿repurchase￿systems￿that￿we￿have￿manufactured￿and￿sold￿and,￿following￿refurbishment,￿resell￿those￿systems￿to
other￿customers.￿This￿repurchase￿decision￿is￿driven￿by￿market￿demand￿expressed￿by￿other￿customers￿and￿not￿by
explicit￿or￿implicit￿contractual￿arrangements￿relating￿to￿the￿initial￿sale.￿We￿consider￿reasonable￿offers￿from￿any￿vendor,
including￿customers,￿to￿repurchase￿used￿systems￿so￿that￿we￿can￿refurbish,￿resell,￿and￿install￿these￿systems￿as￿part
of￿our￿normal￿business￿operations.￿Once￿repurchased,￿the￿repurchase￿price￿of￿the￿used￿system￿is￿recorded￿in￿work-
in-process￿inventory￿during￿the￿period￿it￿is￿being￿refurbished,￿following￿which￿the￿refurbished￿system￿is￿reflected￿in
finished￿products￿inventory￿until￿it￿is￿sold￿to￿the￿customer.￿As￿of￿December￿31,￿2012￿and￿2011,￿ASML￿had￿no￿repurchase
commitments.

We￿offer￿customers￿discounts￿in￿the￿normal￿course￿of￿sales￿negotiations.￿These￿discounts￿are￿directly￿deducted￿from
the￿gross￿sales￿price￿at￿the￿moment￿of￿revenue￿recognition.￿From￿time￿to￿time,￿we￿offer￿volume￿discounts￿to￿certain
customers.￿In￿some￿instances￿these￿volume￿discounts￿can￿be￿used￿to￿purchase￿field￿options￿(system￿enhancements).
The￿related￿amount￿is￿recorded￿as￿a￿reduction￿in￿revenue￿at￿time￿of￿shipment.￿From￿time￿to￿time,￿we￿offer￿free￿or
discounted￿products￿or￿services￿(award￿credits)￿to￿our￿customers￿as￿part￿of￿a￿volume￿purchase￿agreement.￿The￿sales
transaction￿that￿gives￿rise￿to￿these￿award￿credits￿is￿accounted￿for￿as￿a￿multiple￿element￿revenue￿transaction￿as￿the
agreements￿involve￿the￿delivery￿of￿multiple￿products.￿The￿consideration￿received￿from￿the￿sales￿transaction￿is￿allocated
between￿the￿award￿credits￿and￿the￿other￿elements￿of￿the￿sales￿transaction.￿The￿consideration￿allocated￿to￿the￿award
credits￿is￿recognized￿as￿deferred￿revenue￿until￿award￿credits￿are￿delivered￿to￿the￿customer.￿The￿amount￿allocable￿to

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a￿delivered￿item￿is￿limited￿to￿the￿amount￿that￿is￿not￿contingent￿upon￿the￿delivery￿of￿additional￿items￿or￿meeting￿other
specified￿performance￿conditions￿(the￿non-contingent￿amount).

Revenues￿are￿recognized￿excluding￿the￿taxes￿levied￿on￿revenues￿(net￿basis).

In￿the￿event￿that￿an￿arrangement￿with￿a￿customer￿becomes￿onerous,￿we￿recognize￿a￿liability￿for￿the￿amount￿that￿the￿cost
of￿settling￿the￿arrangement￿exceeds￿the￿amount￿of￿the￿contract￿price.￿When￿we￿satisfy￿the￿onerous￿arrangement,￿we
derecognize￿the￿related￿liability.

Multiple element arrangements
The￿main￿portion￿of￿our￿revenue￿is￿derived￿from￿contractual￿arrangements￿with￿our￿customers￿that￿have￿multiple
deliverables,￿which￿mainly￿include￿the￿sale￿of￿our￿systems,￿installation￿and￿training￿services￿and￿prepaid￿extended￿and
enhanced￿(optic)￿warranty￿contracts.￿As￿of￿January￿1,￿2011,￿we￿have￿adopted￿ASU￿2009-13,￿"Revenue￿Arrangements
with￿Multiple￿Deliverables"￿which￿amended￿the￿guidance￿on￿arrangements￿with￿multiple￿deliverables￿in￿ASC￿605-25.
The￿amended￿standard￿changes￿the￿requirements￿for￿establishing￿separate￿units￿of￿accounting￿in￿a￿multiple￿element
arrangement￿and￿requires￿the￿allocation￿of￿arrangement￿consideration￿to￿each￿deliverable￿to￿be￿based￿on￿the￿relative
selling￿price.￿We￿apply￿this￿accounting￿guidance￿prospectively￿to￿arrangements￿originating￿or￿materially￿modified￿on￿or
after￿January￿1,￿2011.￿The￿implementation￿resulted￿in￿additional￿qualitative￿disclosures￿that￿are￿included￿below,￿but￿did
not￿result￿in￿additional￿units￿of￿accounting￿and￿only￿had￿an￿insignificant￿impact￿on￿timing￿and￿allocation￿of￿revenues.

Each￿element￿in￿the￿arrangement￿is￿accounted￿for￿as￿a￿separate￿unit￿of￿accounting￿provided￿the￿following￿criteria￿are
met:￿the￿delivered￿products￿or￿services￿have￿value￿to￿the￿customer￿on￿a￿standalone￿basis;￿and￿for￿an￿arrangement
that￿includes￿a￿general￿right￿of￿return￿relative￿to￿the￿delivered￿products￿or￿services,￿delivery￿or￿performance￿of￿the
undelivered￿product￿or￿service￿is￿considered￿probable￿and￿is￿substantially￿controlled￿by￿us.￿We￿consider￿a￿deliverable
to￿have￿stand-alone￿value￿if￿the￿product￿or￿service￿is￿sold￿separately￿by￿us￿or￿another￿vendor￿or￿could￿be￿resold￿by￿the
customer.￿Further,￿our￿revenue￿arrangements￿do￿not￿include￿a￿general￿right￿of￿return￿relative￿to￿the￿delivered￿products.
Where￿the￿aforementioned￿criteria￿for￿a￿separate￿unit￿of￿accounting￿are￿not￿met,￿the￿deliverable￿is￿combined￿with￿the
undelivered￿element(s)￿and￿treated￿as￿a￿single￿unit￿of￿accounting￿for￿the￿purposes￿of￿allocation￿of￿the￿arrangement
consideration￿and￿revenue￿recognition.

The￿hierarchy￿of￿evidence￿to￿determine￿a￿selling￿price￿in￿ASC￿605-25￿is￿as￿follows:
• Vendor-Specific￿Objective￿Evidence￿("VSOE")￿–￿the￿price￿at￿which￿we￿sell￿the￿element￿in￿a￿separate￿stand-alone

transaction;

• Third-Party￿Evidence￿("TPE")￿–￿evidence￿from￿us￿or￿other￿companies￿of￿the￿value￿of￿a￿largely￿interchangeable￿element

in￿a￿transaction;

• Best￿Estimate￿of￿Selling￿Price￿("BESP")￿–￿our￿best￿estimate￿of￿the￿selling￿price￿of￿an￿element￿in￿the￿transaction.

To￿determine￿the￿selling￿price￿in￿multiple￿elements￿arrangements,￿we￿establish￿VSOE￿of￿the￿selling￿price￿for￿installation
and￿training￿services￿and￿prepaid￿extended￿and￿enhanced￿(optic)￿warranty￿contracts.￿VSOE￿is￿determined￿based￿on￿the
prices￿that￿we￿charge￿for￿installation￿and￿comparable￿services￿(such￿as￿relocating￿a￿system￿to￿another￿customer￿site)
and￿prepaid￿extended￿and￿enhanced￿(optic)￿warranty￿contracts￿on￿a￿stand-alone￿basis,￿which￿are￿subject￿to￿normal
price￿negotiations.￿Revenue￿from￿installation￿and￿training￿services￿is￿recognized￿when￿the￿services￿are￿completed.
Revenue￿from￿prepaid￿extended￿and￿enhanced￿(optic)￿warranty￿contracts￿is￿recognized￿over￿the￿term￿of￿the￿contract.
When￿we￿are￿unable￿to￿establish￿the￿selling￿price￿using￿VSOE￿or￿TPE,￿we￿use￿BESP.￿The￿objective￿of￿using￿estimated
selling￿price-based￿methodology￿is￿to￿determine￿the￿price￿at￿which￿we￿would￿transact￿a￿sale￿if￿the￿product￿or￿service
were￿sold￿on￿a￿stand-alone￿basis.￿Accordingly,￿we￿determine￿BESP￿considering￿several￿internal￿and￿external￿factors
including,￿but￿not￿limited￿to,￿pricing￿practices,￿gross￿margin￿objectives,￿market￿conditions,￿competitive￿environment,
internal￿costs￿and￿geographies.￿We￿review￿selling￿prices￿every￿reporting￿period￿and￿maintain￿internal￿controls￿over￿the
establishment￿and￿updates￿of￿these￿estimates.

For￿arrangements￿entered￿into￿through￿December￿31,￿2010,￿we￿primarily￿recognized￿revenue￿based￿on￿the￿previous
guidance￿of￿ASC￿605-25.￿The￿revenue￿relating￿to￿the￿installation￿and￿training￿services￿and￿prepaid￿extended￿and
enhanced￿(optic)￿warranty￿contracts￿was￿deferred￿at￿their￿fair￿value￿until￿delivery￿of￿these￿elements.￿￿When￿we￿were￿not
able￿to￿determine￿the￿fair￿value￿for￿the￿system,￿but￿were￿able￿to￿determine￿the￿fair￿value￿for￿all￿other￿elements￿in￿the
arrangement,￿revenue￿was￿allocated￿as￿the￿difference￿between￿the￿total￿arrangement￿consideration￿less￿the￿aggregate
fair￿value￿of￿all￿other￿elements￿in￿the￿arrangement,￿and￿no￿revenue￿was￿recognized￿until￿all￿elements￿without￿fair￿value
had￿been￿delivered.

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Warranty
We￿provide￿standard￿warranty￿coverage￿on￿our￿systems￿for￿12￿months￿and￿on￿certain￿optic￿parts￿for￿60￿months,
providing￿labor￿and￿parts￿necessary￿to￿repair￿systems￿and￿optic￿parts￿during￿the￿warranty￿period.￿The￿estimated
warranty￿costs￿are￿accounted￿for￿by￿accruing￿these￿costs￿for￿each￿system￿upon￿recognition￿of￿the￿system￿sale.￿The
estimated￿warranty￿costs￿are￿based￿on￿historical￿product￿performance￿and￿field￿expenses.￿Based￿upon￿historical￿service
records,￿we￿calculate￿the￿charge￿of￿average￿service￿hours￿and￿parts￿per￿system￿to￿determine￿the￿estimated￿warranty
costs.￿On￿a￿semi-annual￿basis,￿we￿assess,￿and￿update￿if￿necessary,￿our￿accounting￿estimates￿used￿to￿calculate￿the
standard￿warranty￿reserve￿based￿on￿the￿latest￿actual￿historical￿warranty￿costs￿and￿expected￿future￿warranty￿costs.￿The
actual￿product￿performance￿and/or￿field￿expense￿profiles￿may￿differ,￿and￿in￿those￿cases￿we￿adjust￿our￿warranty￿reserves
accordingly.￿Future￿warranty￿costs￿may￿exceed￿our￿estimates,￿which￿could￿lead￿to￿an￿increase￿in￿our￿cost￿of￿sales.￿In
2012,￿2011￿and￿2010,￿any￿reassessments￿of￿the￿warranty￿reserve,￿and￿resulting￿change￿in￿accounting￿estimate,￿did￿not
have￿a￿material￿effect￿on￿our￿consolidated￿statements￿of￿operations￿and￿per￿share￿amounts.
￿￿￿￿￿￿
Evaluation￿of￿long-lived￿assets￿for￿impairment
Long-lived￿assets￿include￿goodwill,￿other￿intangible￿assets￿and￿property,￿plant￿and￿equipment.

Goodwill￿is￿tested￿for￿impairment￿annually￿on￿September￿30￿and￿whenever￿events￿or￿changes￿in￿circumstances￿indicate
that￿the￿carrying￿amount￿of￿the￿goodwill￿may￿not￿be￿recoverable.￿These￿events￿or￿circumstances￿could￿include￿a
significant￿change￿in￿the￿business￿climate,￿legal￿factors,￿operating￿performance￿indicators,￿competition,￿or￿sale￿or
disposition￿of￿a￿significant￿portion￿of￿a￿reporting￿unit.￿The￿test￿is￿based￿on￿a￿two-step￿approach￿for￿each￿reporting
unit￿(being￿an￿operating￿segment￿or￿one￿level￿below￿an￿operating￿segment)￿in￿which￿goodwill￿has￿been￿recorded.
First,￿recoverability￿is￿tested￿by￿comparing￿the￿carrying￿amount￿of￿the￿reporting￿unit￿including￿goodwill￿with￿the￿fair
value￿of￿the￿reporting￿unit.￿If￿the￿carrying￿amount￿of￿the￿reporting￿unit￿is￿higher￿than￿the￿fair￿value￿of￿the￿reporting￿unit,
the￿second￿step￿should￿be￿performed.￿Goodwill￿impairment￿is￿measured￿as￿the￿excess￿of￿the￿carrying￿amount￿of￿the
goodwill￿over￿its￿implied￿fair￿value.￿The￿implied￿fair￿value￿of￿goodwill￿is￿determined￿by￿calculating￿the￿fair￿value￿of￿the
various￿assets￿and￿liabilities￿included￿in￿the￿reporting￿unit￿in￿the￿same￿manner￿as￿goodwill￿is￿determined￿in￿a￿business
combination.

Other￿intangible￿assets￿and￿property,￿plant￿and￿equipment￿are￿reviewed￿for￿impairment￿whenever￿events￿or￿changes￿in
circumstances￿indicate￿that￿the￿carrying￿amount￿of￿those￿assets￿may￿not￿be￿recoverable.￿Other￿intangible￿assets￿and
property,￿plant￿and￿equipment￿are￿tested￿for￿impairment￿based￿on￿a￿two-step￿approach.￿First,￿the￿recoverability￿is￿tested
by￿comparing￿the￿carrying￿amount￿of￿the￿other￿intangible￿assets￿and￿property,￿plant￿and￿equipment￿with￿their￿fair￿value,
being￿the￿sum￿of￿the￿related￿undiscounted￿future￿cash￿flows.￿Second,￿if￿the￿carrying￿amount￿of￿the￿other￿intangible
assets￿and￿property,￿plant￿and￿equipment￿is￿higher￿than￿this￿fair￿value￿the￿assets￿are￿considered￿to￿be￿impaired.￿The
impairment￿to￿be￿recognized￿is￿measured￿by￿the￿amount￿by￿which￿the￿carrying￿amount￿of￿the￿assets￿exceeds￿the￿fair
value￿of￿the￿asset.

In￿determining￿the￿fair￿value￿of￿a￿long-lived￿asset￿(other￿than￿goodwill),￿we￿make￿estimates￿about￿future￿cash￿flows.
These￿estimates￿are￿based￿on￿our￿financial￿plan￿updated￿with￿the￿latest￿available￿projection￿of￿the￿semiconductor
market￿conditions￿and￿our￿sales￿and￿cost￿expectations,￿which￿are￿consistent￿with￿the￿plans￿and￿estimates￿that
we￿use￿to￿manage￿our￿business.￿We￿also￿make￿estimates￿and￿assumptions￿concerning￿Weighted￿Average￿Cost￿of
Capital￿("WACC")￿and￿future￿inflation￿rates.￿It￿is￿possible￿that￿actual￿results￿may￿differ￿from￿our￿plans,￿estimates￿and
assumptions,￿which￿may￿require￿impairment￿of￿certain￿long-lived￿assets.￿Future￿adverse￿changes￿in￿market￿conditions
may￿also￿require￿impairment￿of￿certain￿long-lived￿assets,￿which￿could￿have￿a￿material￿adverse￿effect￿on￿our￿financial
condition￿and￿results￿of￿operations.

Inventories
Inventories,￿including￿spare￿parts￿and￿lenses,￿are￿stated￿at￿the￿lower￿of￿cost￿(first-in,￿first-out￿method)￿or￿market￿value.
Costs￿include￿net￿prices￿paid￿for￿materials￿purchased,￿charges￿for￿freight￿and￿customs￿duties,￿production￿labor￿cost
and￿factory￿overhead.￿Allowances￿are￿made￿for￿slow￿moving,￿obsolete￿or￿unsellable￿inventory￿and￿are￿reviewed￿on￿a
quarterly￿basis.￿Our￿methodology￿involves￿matching￿our￿on-hand￿and￿on-order￿inventory￿with￿our￿requirements￿based￿on
the￿expected￿demand￿and￿resulting￿manufacturing￿forecast.￿In￿determining￿inventory￿allowances,￿we￿evaluate￿inventory
in￿excess￿of￿our￿forecasted￿needs￿on￿both￿technological￿and￿economic￿criteria￿and￿make￿appropriate￿provisions￿to
reflect￿the￿risk￿of￿obsolescence.￿This￿methodology￿is￿significantly￿affected￿by￿our￿forecasted￿needs￿for￿inventory.￿If
actual￿requirements￿were￿to￿be￿lower￿than￿estimated,￿additional￿inventory￿allowances￿for￿excess￿or￿obsolete￿inventory
may￿be￿required,￿which￿could￿have￿a￿material￿adverse￿effect￿on￿our￿business,￿financial￿condition￿and￿results￿of
operations.

ASML￿ANNUAL￿REPORT￿2012

29

Accounts￿receivable￿and￿finance￿receivables
A￿majority￿of￿our￿accounts￿receivable￿and￿finance￿receivables￿are￿derived￿from￿sales￿to￿a￿limited￿number￿of￿large
multinational￿semiconductor￿manufacturers￿throughout￿the￿world.￿In￿order￿to￿monitor￿potential￿credit￿losses,￿we￿perform
ongoing￿credit￿evaluations￿of￿our￿customers'￿financial￿condition.￿Respective￿allowances￿for￿credit￿losses￿on￿both
accounts￿receivable￿and￿finance￿receivables￿are￿maintained￿based￿upon￿management's￿assessment￿of￿the￿expected
collectability￿of￿all￿accounts￿receivable￿and￿finance￿receivables.￿The￿respective￿allowances￿for￿credit￿losses￿on￿accounts
receivable￿and￿finance￿receivables￿are￿reviewed￿periodically￿to￿assess￿the￿adequacy￿of￿these￿allowances.￿In￿making￿this
assessment,￿management￿takes￿into￿consideration￿(i)￿any￿circumstances￿of￿which￿we￿are￿aware￿regarding￿a￿customer's
inability￿to￿meet￿its￿financial￿obligations;￿and￿(ii)￿our￿judgments￿as￿to￿potential￿prevailing￿economic￿conditions￿in￿the
industry￿and￿their￿potential￿impact￿on￿our￿customers.￿Where￿we￿deem￿it￿prudent￿to￿do￿so,￿we￿may￿require￿some￿form￿of
credit￿enhancement,￿such￿as￿letters￿of￿credit,￿down￿payments￿and￿retention￿of￿ownership￿provisions￿in￿contracts,￿before
shipping￿systems￿to￿certain￿customers,￿which￿are￿intended￿to￿recover￿the￿systems￿in￿the￿event￿a￿customer￿defaults￿on
payment.￿We￿have￿not￿incurred￿any￿material￿accounts￿receivable￿or￿finance￿receivable￿credit￿losses￿during￿the￿past￿three
years.￿A￿business￿failure￿of￿one￿of￿our￿main￿customers￿could￿result￿in￿a￿substantial￿credit￿loss￿in￿respect￿to￿amounts
owed￿to￿us￿by￿that￿customer,￿which￿could￿adversely￿affect￿our￿business,￿financial￿condition￿and￿results￿of￿operations.

Income￿taxes
We￿operate￿in￿various￿tax￿jurisdictions￿in￿Europe,￿Asia,￿and￿the￿United￿States￿and￿must￿comply￿with￿the￿tax￿laws￿and
regulations￿of￿each￿of￿these￿jurisdictions.

We￿use￿the￿asset￿and￿liability￿method￿in￿accounting￿for￿income￿taxes.￿Under￿this￿method,￿deferred￿tax￿assets￿and
liabilities￿are￿recognized￿for￿tax￿consequences￿attributable￿to￿differences￿between￿the￿balance￿sheet￿carrying￿amounts
of￿existing￿assets￿and￿liabilities￿and￿their￿respective￿tax￿bases.￿Furthermore￿tax￿assets￿are￿recognized￿for￿the￿tax￿effect
of￿incurred￿net￿operating￿losses.￿If￿it￿is￿more￿likely￿than￿not￿that￿the￿carrying￿amounts￿of￿deferred￿tax￿assets￿will￿not￿be
realized,￿a￿valuation￿allowance￿is￿recorded￿to￿reduce￿the￿carrying￿amounts￿of￿those￿assets.

We￿recognize￿the￿tax￿benefit￿from￿an￿uncertain￿tax￿position￿in￿accordance￿with￿ASC￿740.￿ASC￿740￿also￿provides
guidance￿on￿derecognition￿of￿income￿tax￿assets￿and￿liabilities,￿classification￿of￿current￿and￿deferred￿income￿tax￿assets
and￿liabilities,￿accounting￿for￿interest￿and￿penalties￿associated￿with￿tax￿positions,￿and￿income￿tax￿disclosures.￿Judgment
is￿required￿in￿assessing￿the￿future￿tax￿consequences￿of￿events￿that￿have￿been￿recognized￿in￿our￿consolidated￿financial
statements￿or￿tax￿returns.￿Variations￿in￿the￿actual￿outcome￿of￿these￿future￿tax￿consequences￿could￿materially￿impact￿our
financial￿statements.

Results￿of￿Operations￿
The￿following￿discussion￿and￿analysis￿of￿results￿of￿operations￿should￿be￿viewed￿in￿the￿context￿of￿the￿risks￿that￿may
interfere￿with￿our￿business￿objectives,￿described￿in￿Item￿3.D.￿"Risk￿Factors".

Set￿out￿below￿our￿consolidated￿statements￿of￿operations￿data￿for￿the￿three￿years￿ended￿December￿31,￿2012,￿2011￿and
2010:

Year ended December 31
(in millions)
￿
Total￿net￿sales
Cost￿of￿sales
Gross￿profit￿on￿sales
Research￿and￿development￿costs
Selling,￿general￿and￿administrative￿costs
Income￿from￿operations
Interest￿income￿(expense),￿net
Income￿before￿income￿taxes
Provision￿for￿income￿taxes
Net￿income

2012  
EUR  
￿ ￿
4,731.5 ￿
2,726.3 ￿
2,005.2 ￿
589.1 ￿
259.3 ￿
1,156.8 ￿
(6.2) ￿
1,150.6 ￿
(4.3) ￿
1,146.3 ￿

2011 1
EUR  
￿ ￿
5,651.0 ￿
3,201.6 ￿
2,449.4 ￿
590.3 ￿
217.9 ￿
1,641.2 ￿
7.4 ￿
1,648.6 ￿
(181.6) ￿
1,467.0 ￿

2010
EUR
￿
4,507.9
2,552.7
1,955.2
523.4
181.1
1,250.7
(8.2)
1,242.5
(220.7)
1,021.8

1 As￿of￿January￿1,￿2011,￿ASML￿adopted￿Accounting￿Standards￿Update￿("ASU")￿2009-13,￿"Revenue￿Arrangements￿with￿Multiple￿Deliverables"￿which

amended￿ASC￿605-25.￿The￿ASU￿was￿adopted￿prospectively￿and￿had￿an￿insignificant￿impact￿on￿timing￿and￿allocation￿of￿revenues.￿See￿Note￿1￿to￿the
consolidated￿financial￿statements.

ASML￿ANNUAL￿REPORT￿2012

30

Set￿out￿below￿are￿our￿consolidated￿statements￿of￿operations￿data￿for￿the￿three￿years￿ended￿December￿31,￿2012,￿2011
and￿2010￿expressed￿as￿a￿percentage￿of￿our￿total￿net￿sales:

Year ended December 31
(as a percentage of net sales)
￿
Total￿net￿sales
Cost￿of￿sales
Gross￿profit￿on￿sales
Research￿and￿development￿costs
Selling,￿general￿and￿administrative￿costs
Income￿from￿operations
Interest￿income￿(expense),￿net
Income￿before￿income￿taxes
Provision￿for￿income￿taxes
Net￿income

2012

￿
100.0
57.6
42.4
12.5
5.5
24.4
(0.1)
24.3
(0.1)
24.2

2011

￿
100.0
56.7
43.3
10.4
3.9
29.0
0.2
29.2
(3.2)
26.0

2010

￿
100.0
56.6
43.4
11.6
4.1
27.7
(0.1)
27.6
(4.9)
22.7

ASML￿ANNUAL￿REPORT￿2012

31

 
 
 
Results￿of￿operations￿2012￿compared￿with￿2011

Net sales and gross profit
The￿following￿table￿shows￿a￿summary￿of￿net￿sales￿(revenue￿and￿units￿sold),￿gross￿profit￿and￿ASP￿data￿on￿an￿annual￿and
semi-annual￿basis￿for￿the￿years￿2012￿and￿2011.

Net￿sales￿(EUR￿million)
Net￿system￿sales￿(EUR￿million)
Net￿service￿and￿field￿option￿sales￿(EUR￿million)
Total￿sales￿of￿systems￿(in￿units)
Total￿sales￿of￿new￿systems￿(in￿units)
Total￿sales￿of￿used￿systems￿(in￿units)
Gross￿profit￿as￿a￿percentage￿of￿net￿sales
ASP￿of￿system￿sales￿(EUR￿million)
ASP￿of￿new￿system￿sales￿(EUR￿million)
ASP￿of￿used￿system￿sales￿(EUR￿million)

First
half year
2,479.6
2,034.8
444.8
96
89
7
42.5
21.2
22.7
2.4

2012  

Second
half year
2,251.9
1,766.8
485.1
74
57
17
42.2
23.9
28.1
9.7

Full
year
4,731.5
3,801.6
929.9
170
146
24
42.4
22.4
24.8
7.6

First
half year
2,981.6
2,618.0
363.6
126
114
12
44.9
20.8
22.6
3.5

2011 1
Second
half year
2,669.4
2,265.9
403.5
96
81
15
41.6
23.6
27.2
4.0

Full
year
5,651.0
4,883.9
767.1
222
195
27
43.3
22.0
24.5
3.8

1 As￿of￿January￿1,￿2011,￿ASML￿adopted￿Accounting￿Standards￿Update￿("ASU")￿2009-13,￿"Revenue￿Arrangements￿with￿Multiple￿Deliverables"￿which

amended￿ASC￿605-25.￿The￿ASU￿was￿adopted￿prospectively,￿and￿had￿an￿insignificant￿impact￿on￿timing￿and￿allocation￿of￿revenues.￿See￿Note￿1￿to￿the
consolidated￿financial￿statements.

Net￿sales￿decreased￿by￿EUR￿919.5￿million,￿or￿16.3￿percent,￿to￿EUR￿4,731.5￿million￿in￿2012￿from￿EUR￿5,651.0￿million￿in
2011￿(2010:￿EUR￿4,507.9￿million).￿The￿decrease￿in￿net￿sales￿mainly￿resulted￿from￿a￿decrease￿in￿net￿system￿sales￿of￿EUR
1,082.3￿million,￿or￿22.2￿percent,￿to￿EUR￿3,801.6￿million￿in￿2012￿from￿EUR￿4,883.9￿million￿in￿2011￿(2010:￿EUR￿3,894.7
million),￿partly￿offset￿by￿an￿increase￿in￿net￿service￿and￿field￿option￿sales￿of￿EUR￿162.8￿million￿or￿21.2￿percent￿to￿EUR
929.9￿million￿in￿2012￿from￿EUR￿767.1￿million￿in￿2011￿(2010:￿EUR￿613.2￿million),￿mainly￿due￿the￿further￿expansion￿of
Holistic￿Lithography,￿integrated￿metrology￿and￿feedback￿loops.￿The￿number￿of￿total￿systems￿sold￿decreased￿by￿23.4
percent￿to￿170￿systems￿in￿2012￿from￿222￿systems￿in￿2011￿(2010:197),￿mainly￿caused￿by￿decreased￿demand￿in￿Memory,
as￿its￿major￿driver,￿the￿PC￿business￿shrunk￿compared￿to￿2011.￿During￿2012,￿the￿majority￿of￿the￿system￿sales￿were
generated￿from￿Logic.

The￿ASP￿of￿our￿new￿systems￿in￿2012￿EUR￿24.8￿million￿is￿in￿line￿with￿2011￿EUR￿24.5￿million.

From￿time￿to￿time,￿we￿repurchase￿systems￿that￿we￿have￿manufactured￿and￿sold￿and,￿following￿factory-rebuild￿or
refurbishment,￿resell￿those￿systems￿to￿other￿customers.￿This￿repurchase￿decision￿is￿mainly￿driven￿by￿market￿demand
for￿capacity￿expressed￿by￿other￿customers￿and￿not￿by￿explicit￿or￿implicit￿contractual￿arrangements￿relating￿to￿the
initial￿sale.￿The￿number￿of￿used￿systems￿sold￿in￿2012￿decreased￿to￿24￿from￿27￿in￿2011.￿The￿ASP￿of￿our￿used￿systems
increased￿by￿100.0￿percent￿to￿EUR￿7.6￿million￿in￿2012￿from￿EUR￿3.8￿million￿in￿2011,￿which￿was￿the￿result￿of￿a￿shift￿in￿the
mix￿of￿used￿systems￿sold￿toward￿more￿high-end￿system￿types.

Through￿2012,￿all￿of￿the￿top￿10￿chipmakers￿worldwide,￿in￿terms￿of￿semiconductor￿capital￿expenditure,￿were￿our
customers.￿In￿2012,￿recognized￿sales￿to￿our￿largest￿customer￿accounted￿for￿EUR￿1,236.1￿million,￿or￿26.1￿percent￿of￿our
net￿sales.￿In￿2011,￿recognized￿sales￿to￿our￿largest￿customer￿accounted￿for￿EUR￿1,311.7￿million,￿or￿23.2￿percent￿of￿our
net￿sales.

Gross￿profit￿on￿sales￿decreased￿to￿EUR￿2,005.2￿million￿or￿42.4￿percent￿of￿net￿sales￿in￿2012￿from￿EUR￿2,449.4￿million￿or
43.3￿percent￿of￿net￿sales￿in￿2011￿(2010:￿EUR￿1,955.2￿million￿or￿43.4￿percent￿of￿net￿sales).￿Lower￿gross￿profit￿was￿mainly
driven￿by￿the￿decreased￿number￿of￿total￿systems￿sold.￿Gross￿profit￿as￿a￿percentage￿of￿net￿sales￿in￿2012￿decreased
compared￿to￿2011,￿mainly￿due￿to￿increased￿infrastructure￿and￿manufacturing￿cost,￿driven￿primarily￿by￿EUV￿production,
lower￿utilization￿of￿our￿production￿capacity￿and￿higher￿cost￿incurred￿in￿relation￿to￿excess￿and￿obsolete￿inventory￿as
result￿of￿technological￿developments￿and￿design￿changes.

Research and development costs 
R&D￿costs￿(net￿of￿credits)￿in￿2012￿(EUR￿589.1￿million)￿are￿in￿line￿with￿2011￿(EUR￿590.3￿million).￿R&D￿spending￿remained
stable￿and￿mainly￿related￿to￿our￿strategic￿programs,￿in￿particular￿EUV,￿immersion￿and￿holistic￿lithography.

Selling, general and administrative costs
Selling,￿general￿and￿administrative￿("SG&A")￿costs￿increased￿by￿EUR￿41.4￿million,￿or￿19.0￿percent,￿to￿EUR￿259.3￿million
in￿2012,￿or￿5.5￿percent￿of￿net￿sales,￿from￿EUR￿217.9￿million￿in￿2011,￿or￿3.9￿percent￿of￿net￿sales.￿The￿increase￿was
mainly￿driven￿by￿transaction￿costs￿incurred￿of￿EUR￿26.1￿million￿related￿to￿the￿Customer￿Co-Investment￿Program￿and

ASML￿ANNUAL￿REPORT￿2012

32

 
 
 
 
 
transaction￿costs￿related￿to￿the￿proposed￿acquisition￿of￿Cymer￿and￿costs￿to￿implement￿and￿support￿IT￿solutions￿of￿EUR
10.2￿million.

Interest income (expense), net
Net￿interest￿expense￿in￿2012￿was￿EUR￿6.2￿million￿compared￿with￿a￿net￿interest￿income￿in￿2011￿of￿EUR￿7.4￿million.
Interest￿income￿relates￿to￿interest￿earned￿on￿our￿cash￿and￿cash￿equivalents￿and￿short-term￿investments;￿interest￿income
declined￿in￿2012￿due￿to￿a￿lower￿yield￿earned￿on￿cash￿and￿cash￿equivalents￿and￿short-term￿investments,￿and￿was￿more
than￿offset￿by￿the￿interest￿expense￿on￿our￿outstanding￿debt.

Income taxes
The￿effective￿tax￿rate￿was￿0.4￿percent￿of￿income￿before￿income￿taxes￿in￿2012,￿compared￿with￿11.0￿percent￿of
income￿before￿income￿taxes￿in￿2011.￿The￿change￿in￿the￿effective￿tax￿rate￿is￿mainly￿due￿to￿a￿release￿of￿our￿liability￿for
unrecognized￿tax￿benefits￿of￿EUR￿92.5￿million￿after￿successful￿conclusion￿of￿tax￿audits￿in￿different￿jurisdictions￿which
almost￿completely￿offsets￿the￿tax￿expenses,￿resulting￿in￿an￿income￿tax￿expense￿of￿EUR￿4.3￿million￿(2011:￿EUR￿181.7
million).

ASML￿ANNUAL￿REPORT￿2012

33

Results￿of￿operations￿2011￿compared￿with￿2010￿
Net sales and gross profit

The￿following￿table￿shows￿a￿summary￿of￿net￿sales￿(revenue￿and￿units￿sold),￿gross￿profit￿on￿sales￿and￿ASP￿data￿on￿an
annual￿and￿semi-annual￿basis￿for￿the￿years￿ended￿December￿31,￿2011￿and￿2010.

Net￿sales￿(EUR￿million)
Net￿system￿sales￿(EUR￿million)
Net￿service￿and￿field￿option￿sales￿(EUR￿million)
Total￿sales￿of￿systems￿(in￿units)
Total￿sales￿of￿new￿systems￿(in￿units)
Total￿sales￿of￿used￿systems￿(in￿units)
Gross￿profit￿as￿a￿percentage￿of￿net￿sales
ASP￿of￿system￿sales￿(EUR￿million)
ASP￿of￿new￿system￿sales￿(EUR￿million)
ASP￿of￿used￿system￿sales￿(EUR￿million)

First
half year
2,981.6
2,618.0
363.6
126
114
12
44.9
20.8
22.6
3.5

2011 1
Second
half year
2,669.4
2,265.9
403.5
96
81
15
41.6
23.6
27.2
4.0

Full
year
5,651.0
4,883.9
767.1
222
195
27
43.3
22.0
24.5
3.8

First
half year
1,810.5
1,554.6
255.9
77
58
19
41.9
20.2
25.7
3.4

2010  

Second
half year
2,697.4
2,340.1
357.3
120
96
24
44.4
19.5
23.1
5.2

Full
year
4,507.9
3,894.7
613.2
197
154
43
43.4
19.8
24.1
4.4

1 As￿of￿January￿1,￿2011,￿we￿adopted￿Accounting￿Standards￿Update￿("ASU")￿2009-13,￿"Revenue￿Arrangements￿with￿Multiple￿Deliverables"￿which

amended￿ASC￿605-25.￿The￿ASU￿was￿adopted￿prospectively￿and￿had￿an￿insignificant￿impact￿on￿timing￿and￿allocation￿of￿revenues.￿See￿Note￿1￿to￿the
consolidated￿financial￿statements.

Net￿sales￿increased￿by￿EUR￿1,143.1￿million,￿or￿25.4￿percent￿to￿EUR￿5,651.0￿million￿in￿2011￿from￿EUR￿4,507.9￿million
in￿2010.￿The￿increase￿in￿net￿sales￿mainly￿resulted￿from￿an￿increase￿in￿net￿system￿sales￿of￿EUR￿989.2￿million,￿or￿25.4
percent￿to￿EUR￿4,883.9￿million￿in￿2011￿from￿EUR￿3,894.7￿million￿in￿2010.￿Net￿service￿and￿field￿option￿sales￿increased
to￿EUR￿767.1￿million￿in￿2011￿from￿EUR￿613.2￿million￿in￿2010.￿The￿number￿of￿total￿systems￿sold￿increased￿by￿12.7
percent￿to￿222￿systems￿in￿2011￿from￿197￿systems￿in￿2010.￿The￿increase￿in￿total￿net￿sales￿was￿caused￿by￿increased
demand￿for￿lithography￿imaging￿systems￿required￿for￿all￿of￿the￿various￿chip￿layers:￿customers￿continued￿to￿invest￿in￿new
leading-edge￿immersion￿technology￿as￿well￿as￿dry￿lithography￿tools￿in￿order￿to￿execute￿their￿strategic￿investments￿in
new￿technology￿and￿capacity￿to￿meet￿demand.￿Sales￿were￿derived￿from￿all￿two￿major￿markets￿in￿which￿our￿customers
operate,￿with￿Logic￿generating￿the￿majority￿of￿system￿sales￿and￿Memory￿generating￿the￿remainder.

The￿ASP￿of￿our￿systems￿increased￿by￿11.1￿percent￿to￿EUR￿22.0￿million￿in￿2011￿from￿EUR￿19.8￿million￿in￿2010￿(2009:
EUR￿16.8￿million)￿resulting￿from￿a￿decrease￿in￿the￿number￿of￿used￿systems￿sold￿with￿relatively￿lower￿ASPs.￿The￿ASP￿of
our￿new￿systems￿increased￿by￿1.7￿percent￿to￿EUR￿24.5￿million￿in￿2011￿from￿EUR￿24.1￿million￿in￿2010￿(2009:￿EUR￿21.1
million),￿which￿was￿mainly￿driven￿by￿three￿NXE:3100￿systems￿recognized￿with￿an￿ASP￿of￿EUR￿39.8￿million,￿partly￿offset
by￿a￿change￿in￿product￿mix.

The￿number￿of￿used￿systems￿sold￿in￿2011￿decreased￿to￿27￿from￿43￿in￿2010.￿The￿ASP￿of￿our￿used￿systems￿decreased￿by
13.6￿percent￿to￿EUR￿3.8￿million￿in￿2011￿from￿EUR￿4.4￿million￿in￿2010,￿which￿was￿the￿result￿of￿a￿shift￿in￿the￿mix￿of￿used
systems￿sold￿toward￿more￿low-end￿system￿types.

Through￿2011,￿all￿of￿the￿top￿10￿chipmakers￿worldwide,￿in￿terms￿of￿semiconductor￿capital￿expenditure,￿were￿our
customers.￿In￿2011,￿recognized￿sales￿to￿our￿largest￿customer￿accounted￿for￿EUR￿1,311.7￿million,￿or￿23.2￿percent￿of￿our
net￿sales.￿In￿2010,￿recognized￿sales￿to￿our￿three￿largest￿customers￿accounted￿for￿EUR￿1,270.8￿million,￿or￿28.2￿percent￿of
our￿net￿sales.

Gross￿profit￿increased￿to￿EUR￿2,449.4￿million￿or￿43.3￿percent￿of￿net￿sales￿in￿2011￿from￿EUR￿1,955.2￿million￿or￿43.4
percent￿of￿net￿sales￿in￿2010￿(2009:￿EUR￿458.4￿gross￿profit￿or￿28.7￿percent￿of￿net￿sales).￿The￿higher￿gross￿profit￿reflects
increased￿demand￿for￿lithography￿imaging￿systems￿across￿all￿chip￿layers:￿customers￿continued￿to￿invest￿in￿new￿leading-
edge￿immersion￿technology￿as￿well￿as￿dry￿lithography￿tools￿in￿order￿to￿execute￿their￿strategic￿investments￿both￿in￿new
technology￿and￿in￿capacity￿to￿meet￿demand.￿Gross￿profit￿as￿a￿percentage￿of￿net￿sales￿in￿2011￿is￿approximately￿the
same￿as￿the￿2010￿percentage,￿which￿is￿due￿to￿the￿following:￿2011￿net￿sales￿and￿cost￿of￿sales￿included￿three￿NXE:3100
systems￿which￿represented￿net￿sales￿of￿approximately￿EUR￿120.0￿million￿with￿zero￿gross￿profit￿at￿the￿time￿these
were￿recognized￿as￿revenue.￿Our￿gross￿profit￿was￿negatively￿impacted￿by￿increased￿cost￿of￿sales￿incurred￿on￿all￿six
NXE:3100￿systems￿shipped￿to￿our￿customers￿as￿a￿result￿of￿significant￿costs￿due￿to￿the￿introduction￿of￿the￿EUV￿program.
These￿effects￿had￿a￿negative￿impact￿on￿the￿2011￿gross￿profit￿as￿a￿percentage￿of￿net￿sales￿of￿1.5￿percent.￿In￿addition,
manufacturing￿costs￿increased￿in￿2011￿compared￿to￿2010￿(mainly￿EUV￿related￿expenditures).

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Research and development costs

R&D￿costs￿(net￿of￿credits)￿increased￿by￿EUR￿66.8￿million,￿or￿12.8￿percent￿to￿EUR￿590.3￿million￿in￿2011,￿or￿10.4￿percent
of￿net￿sales,￿from￿EUR￿523.4￿million￿in￿2010,￿or￿11.6￿percent￿of￿net￿sales.￿This￿increase￿reflected￿our￿acceleration
of￿strategic￿investment￿in￿the￿development￿and￿enhancement￿of￿the￿next-generation￿TWINSCAN￿systems￿based￿on
Immersion,￿EUV￿and￿holistic￿lithography￿solutions￿to￿extend￿these￿systems.

Selling, general and administrative costs

SG&A￿costs￿increased￿by￿EUR￿36.9￿million,￿or￿20.4￿percent,￿to￿EUR￿217.9￿million￿in￿2011￿as￿a￿result￿of￿both￿a￿higher
sales￿level￿and￿increased￿costs￿to￿implement￿and￿support￿IT￿solutions￿and￿for￿improvement￿programs￿(relating￿mainly￿to
employee￿development￿costs).

Interest income (expense), net

Net￿interest￿income￿in￿2011￿was￿EUR￿7.4￿million￿compared￿with￿a￿net￿interest￿expense￿in￿2010￿of￿EUR￿8.2￿million.
Interest￿income￿relates￿to￿interest￿earned￿on￿our￿cash￿and￿cash￿equivalents￿and￿increased￿in￿2011￿mainly￿due￿to￿a
significantly￿higher￿cash￿balance,￿which￿was￿only￿partly￿offset￿by￿net￿interest￿expense￿on￿our￿outstanding￿debt.

Income taxes

The￿effective￿tax￿rate￿was￿11.0￿percent￿of￿income￿before￿income￿taxes￿in￿2011,￿compared￿with￿17.8￿percent￿of￿income
before￿income￿taxes￿in￿2010.￿This￿decrease￿is￿mainly￿caused￿by￿the￿fact￿that￿ASML￿reached￿agreement￿with￿the
Dutch￿fiscal￿authorities￿regarding￿the￿application￿of￿the￿"Innovation￿Box"￿in￿December￿2010,￿a￿facility￿under￿Dutch
corporate￿tax￿law￿pursuant￿to￿which￿income￿associated￿with￿R&D￿is￿partially￿exempted￿from￿taxation.￿This￿tax￿ruling￿has
retroactive￿effect￿to￿January￿1,￿2007￿and￿is￿valid￿through￿December￿31,￿2016.￿Thereafter￿the￿validity￿of￿this￿ruling￿may
be￿extended￿or￿this￿ruling￿may￿be￿adapted￿depending￿on￿a￿possible￿change￿of￿circumstances.￿For￿2010,￿the￿beneficial
impact￿of￿the￿Innovation￿Box￿was￿partially￿offset￿with￿the￿cumulative￿negative￿Innovation￿Box￿effects￿(previously￿called
"Royalty￿Box")￿incurred￿in￿The￿Netherlands￿during￿the￿period￿2007-2009.￿In￿2011,￿the￿Innovation￿Box￿effect￿is￿no￿longer
offset￿by￿these￿prior￿year￿effects.

Foreign￿Exchange￿Management
See￿Item￿3.D.￿"Risk￿Factors,￿Fluctuations￿in￿Foreign￿Exchange￿Rates￿Could￿Harm￿Our￿Results￿of￿Operations",￿Item
11￿"Quantitative￿and￿Qualitative￿Disclosures￿About￿Market￿Risk",￿Note￿1￿and￿Note￿3￿to￿our￿consolidated￿financial
statements.

New￿U.S.￿GAAP￿Accounting￿Pronouncements
In￿June￿2011,￿the￿FASB￿issued￿ASU￿No.￿2011-05,￿“Comprehensive￿Income￿(Topic￿220)”.￿Under￿the￿ASU,￿an￿entity
has￿the￿option￿to￿present￿comprehensive￿income￿in￿either￿one￿continuous￿statement￿or￿two￿consecutive￿financial
statements.￿Under￿both￿options,￿an￿entity￿is￿required￿to￿present￿each￿component￿of￿net￿income￿along￿with￿total￿net
income,￿each￿component￿of￿other￿comprehensive￿income￿(“OCI”)￿along￿with￿a￿total￿for￿OCI￿and￿a￿total￿amount￿for
comprehensive￿income.￿The￿option￿under￿current￿guidance￿which￿permits￿the￿presentation￿of￿components￿of￿OCI￿as
part￿of￿the￿statement￿of￿changes￿in￿shareholders’￿equity￿has￿been￿eliminated.￿In￿December￿2011,￿the￿FASB￿issued
ASU￿2011-12￿which￿indefinitely￿defers￿certain￿provisions￿of￿ASU￿2011-05,￿the￿main￿deferred￿provision￿relating￿to￿a
requirement￿for￿entities￿to￿present￿reclassification￿adjustments￿out￿of￿accumulated￿OCI￿by￿component￿in￿both￿the
statements￿in￿which￿net￿income￿is￿presented￿and￿the￿statement￿in￿which￿OCI￿in￿any￿period￿is￿presented.￿The￿ASU￿is
effective￿for￿annual￿and￿interim￿periods￿beginning￿after￿December￿15,￿2011.￿￿We￿have￿early￿adopted￿this￿standard;
adoption￿had￿no￿impact￿on￿our￿consolidated￿financial￿statements.

In￿December￿2011,￿the￿Financial￿Accounting￿Standards￿Board￿("FASB")￿issued￿ASU￿No.￿2011-11￿"Disclosures￿about
Offsetting￿Assets￿and￿Liabilities".￿Under￿the￿new￿guidance,￿the￿entities￿must￿disclose￿both￿gross￿information￿and￿net
information￿about￿both￿instruments￿and￿transactions￿eligible￿for￿offset￿on￿the￿balance￿sheet￿in￿accordance￿with￿the
offsetting￿guidance￿in￿ASC￿210-20-45￿or￿ASC￿815-10-45,￿and￿instruments￿and￿transactions￿subject￿to￿an￿agreement
similar￿to￿a￿master￿netting￿arrangement.￿The￿new￿guidance￿will￿be￿effective￿for￿us￿beginning￿January￿1,￿2013.￿Other￿than
requiring￿some￿additional￿disclosures,￿we￿do￿not￿anticipate￿material￿impacts￿on￿our￿consolidated￿financial￿statements
upon￿adoption.

In￿July￿2012,￿the￿FASB￿issued￿ASU￿No.￿2012-02￿"Testing￿Indefinite-Lived￿Intangible￿Assets￿for￿Impairment".￿This￿ASU
amends￿the￿guidance￿in￿ASC￿350-30￿on￿testing￿indefinite-lived￿intangible￿assets,￿other￿than￿goodwill,￿for￿impairment.
The￿FASB￿issued￿the￿ASU￿in￿response￿to￿feedback￿on￿ASU￿2011-08,￿which￿amended￿the￿goodwill￿impairment￿testing
requirements￿by￿allowing￿an￿entity￿to￿perform￿a￿qualitative￿impairment￿assessment￿before￿proceeding￿to￿the￿two-step

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impairment￿test.￿The￿new￿guidance￿will￿be￿effective￿for￿annual￿and￿interim￿impairment￿tests￿performed￿for￿fiscal￿years
beginning￿after￿September￿15,￿2012.￿The￿ASU￿2012-02￿will￿not￿have￿any￿effect￿on￿our￿consolidated￿financial￿statements.

In￿October￿2012,￿the￿FASB￿issued￿ASU￿No.￿2014-04￿"Technical￿Corrections￿and￿Improvements".￿This￿ASU￿makes￿certain
technical￿corrections￿(i.e.,￿relatively￿minor￿corrections￿and￿clarifications)￿and￿“conforming￿fair￿value￿amendments”￿to
the￿FASB￿Accounting￿Standards￿Codification￿(the￿“Codification”).￿The￿new￿guidance￿will￿be￿effective￿for￿fiscal￿years
beginning￿after￿December￿15,￿2012.￿We￿do￿not￿anticipate￿material￿impacts￿on￿our￿consolidated￿financial￿statements
upon￿adoption.

B. Liquidity and Capital Resources
We￿generated￿net￿cash￿from￿operating￿activities￿of￿EUR￿703.5￿million,￿EUR￿2,070.4￿million￿and￿EUR￿940.0￿million￿in
2012,￿2011￿and￿2010,￿respectively.￿Lower￿net￿cash￿provided￿by￿operating￿activities￿in￿2012￿compared￿to￿2011￿relates
to￿decreased￿sales￿levels￿and￿decreased￿accrued￿and￿other￿liabilities￿mainly￿as￿a￿result￿of￿lower￿amounts￿of￿EUV
down￿payments￿received￿in￿2012.￿Higher￿net￿cash￿provided￿by￿operating￿activities￿in￿2011￿compared￿to￿2010￿was
primarily￿related￿to￿increased￿sales￿levels￿and￿an￿increase￿in￿accrued￿and￿other￿liabilities￿mainly￿as￿a￿result￿of￿EUV￿down
payments,￿partly￿offset￿by￿an￿increase￿of￿our￿working￿capital.￿This￿net￿increase￿in￿working￿capital￿mainly￿related￿to￿a
decrease￿in￿accounts￿payable.

We￿used￿EUR￿1,119.8￿million￿for￿investing￿activities￿in￿2012￿and￿EUR￿300.9￿million￿in￿2011￿(2010:￿EUR￿124.9￿million).
In￿2012￿our￿investing￿activities￿primarily￿related￿to￿our￿short-term￿investments￿in￿Dutch￿Treasury￿Certificates￿and
deposits￿with￿the￿Dutch￿government￿of￿EUR￿930.0￿million￿and￿purchases￿of￿property,￿plant￿and￿equipment￿of￿EUR
171.9￿million.￿In￿2011￿our￿investing￿activities￿mainly￿related￿to￿machinery￿and￿equipment,￿EUV￿and￿NXT￿production
facilities￿in￿Veldhoven,￿the￿Netherlands,￿information￿technology￿and￿leasehold￿improvements￿to￿our￿facilities.￿In￿2010￿our
investing￿activities￿were￿mainly￿related￿to￿machinery￿and￿equipment￿and￿the￿start￿of￿the￿second￿part￿of￿the￿EUV￿and￿NXT
production￿facilities￿in￿Veldhoven,￿the￿Netherlands.

Net￿cash￿used￿in￿financing￿activities￿was￿EUR￿545.6￿million￿in￿2012￿compared￿with￿EUR￿991.6￿million￿in￿2011￿(2010:￿net
cash￿provided￿by￿financing￿activities￿of￿EUR￿92.7￿million).￿In￿2012￿net￿cash￿used￿in￿financing￿activities￿includes￿the￿net
cash￿outflow￿of￿EUR￿3,728.3￿million￿for￿the￿Synthetic￿Share￿Buyback,￿EUR￿535.4￿million￿for￿our￿regular￿share￿buyback
programs￿and￿EUR￿188.9￿million￿for￿our￿annual￿dividend￿payment,￿to￿a￿large￿extent￿offset￿by￿the￿proceeds￿of￿EUR
3,853.9￿million￿from￿issuance￿of￿shares￿under￿the￿Customer￿Co-Investment￿Program￿and￿EUR￿53.8￿million￿net￿proceeds
from￿issuance￿of￿shares￿in￿connection￿with￿the￿exercise￿and￿purchase￿of￿employee￿stock￿options.￿In￿2011￿net￿cash￿used
in￿financing￿activities￿included￿the￿cash￿outflow￿of￿EUR￿700.5￿million￿used￿in￿our￿regular￿share￿buyback￿program,￿our
annual￿dividend￿payment￿of￿EUR￿172.6￿million￿and￿a￿repayment￿of￿deposits￿from￿our￿customers￿of￿EUR￿150.0￿million,
partly￿offset￿by￿the￿net￿proceeds￿from￿issuance￿of￿shares￿in￿connection￿with￿the￿exercise￿and￿purchase￿of￿employee
stock￿options￿of￿EUR￿34.1￿million.￿In￿2010￿net￿cash￿provided￿by￿financing￿activities￿included￿EUR￿150.0￿million￿cash
inflow￿from￿deposits￿from￿customers￿and￿EUR￿31.0￿million￿cash￿inflow￿from￿the￿issuance￿of￿shares￿in￿connection￿with
the￿exercise￿and￿purchase￿of￿employee￿stock￿options,￿partly￿offset￿by￿EUR￿87.0￿million￿cash￿outflow￿for￿our￿annual
dividend￿payment.

Our￿principal￿sources￿of￿liquidity￿consist￿of￿cash￿flows￿from￿operations,￿cash￿and￿cash￿equivalents￿as￿of￿December￿31,
2012￿of￿EUR￿1,767.6￿million,￿short-term￿investments￿as￿of￿December￿31,￿2012￿of￿EUR￿930.0￿million￿and￿available￿credit
facilities￿as￿of￿December￿31,￿2012￿of￿EUR￿500.0￿million.￿In￿addition,￿we￿may￿from￿time￿to￿time￿raise￿additional￿capital￿in
debt￿and￿equity￿markets.￿Our￿goal￿is￿to￿remain￿an￿investment￿grade￿rated￿company￿and￿maintain￿a￿capital￿structure￿that
supports￿this.

We￿invest￿our￿cash￿and￿cash￿equivalents￿and￿short-term￿investments￿in￿short-term￿deposits￿with￿high-rated￿financial
institutions￿and￿the￿Dutch￿government,￿in￿Dutch￿Treasury￿Certificates￿and￿in￿AAAm-rated￿money￿market￿funds
that￿invest￿in￿high-rated￿short-term￿debt￿securities￿of￿financial￿institutions￿and￿governments.￿Our￿investments￿are
predominantly￿denominated￿in￿euros￿and￿partly￿in￿US￿dollars.

Our￿available￿credit￿facility￿consists￿of￿an￿EUR￿500.0￿million￿committed￿revolving￿credit￿facility￿from￿a￿group￿of￿banks
that￿will￿mature￿in￿2015.￿The￿credit￿facility￿contains￿a￿restrictive￿covenant￿that￿requires￿us￿to￿maintain￿a￿minimum
committed￿capital￿to￿net￿total￿assets￿ratio￿of￿40.0￿percent￿calculated￿in￿accordance￿with￿contractually￿agreed
definitions.￿In￿2012,￿we￿were￿in￿compliance￿with￿the￿covenant￿and￿currently￿do￿not￿expect￿any￿difficulty￿in￿continuing￿to
meet￿our￿covenant￿requirement.￿Outstanding￿amounts￿under￿this￿credit￿facility￿will￿bear￿interest￿at￿EURIBOR￿or￿LIBOR
plus￿a￿margin￿that￿depends￿on￿our￿liquidity￿position.￿No￿amounts￿were￿outstanding￿under￿this￿credit￿facility￿at￿the￿end￿of
2012￿and￿2011.

We￿have￿repayment￿obligations￿in￿2017,￿amounting￿to￿EUR￿600.0￿million,￿on￿our￿5.75￿percent￿senior￿notes￿due￿2017
(“Eurobond”).￿The￿coupons￿on￿the￿Eurobond￿have￿been￿swapped￿to￿a￿floating￿rate￿thereby￿creating￿a￿partial￿fair￿value

ASML￿ANNUAL￿REPORT￿2012

36

hedge￿of￿the￿floating￿rate￿cash￿flows￿which￿we￿receive￿from￿investments￿of￿our￿cash￿and￿cash￿equivalents￿and￿short-
term￿investments.

Our￿liquidity￿needs￿are￿affected￿by￿many￿factors,￿some￿of￿which￿are￿based￿on￿the￿normal￿on-going￿operations￿of￿the
business,￿and￿others￿that￿relate￿to￿the￿uncertainties￿of￿the￿global￿economy￿and￿the￿semiconductor￿industry.￿Although
our￿cash￿requirements￿fluctuate￿based￿on￿the￿timing￿and￿extent￿of￿these￿factors,￿we￿believe￿that￿cash￿generated￿from
operations,￿together￿with￿the￿liquidity￿provided￿by￿existing￿cash￿and￿cash￿equivalents￿and￿short-term￿investments￿and
our￿borrowing￿capability￿are￿sufficient￿to￿satisfy￿our￿current￿requirements,￿including￿our￿2013￿capital￿expenditures.￿We
intend￿to￿return￿cash￿to￿our￿shareholders￿on￿a￿regular￿basis￿in￿the￿form￿of￿dividend￿payments￿and,￿subject￿to￿our￿actual
and￿anticipated￿liquidity￿requirements￿and￿other￿relevant￿factors,￿share￿buybacks￿or￿capital￿repayment.

See￿Notes￿3,￿4,￿14￿and￿15￿to￿our￿consolidated￿financial￿statements￿for￿discussion￿of￿our￿counterparty￿risk￿management,
our￿cash￿and￿cash￿equivalents￿and￿short-term￿investments,￿our￿long-term￿debt￿and￿credit￿lines￿and￿Notes￿26￿and￿27￿for
information￿on￿dividend,￿share￿buybacks￿and￿capital￿repayments.

C. Research and Development, Patents and Licenses, etc
Research￿and￿Development
See￿Item￿4.B.￿"Business￿Overview,￿Research￿and￿Development"￿and￿Item￿5.A.￿"Operating￿Results,￿Results￿of
operations".

Intellectual￿Property￿Matters
See￿Item￿3.D.￿"Risk￿Factors,￿Failure￿to￿Adequately￿Protect￿the￿Intellectual￿Property￿Rights￿Upon￿Which￿We￿depend
Could￿Harm￿Our￿Business"￿and￿"Risk￿Factors,￿Defending￿Against￿Intellectual￿Property￿Claims￿by￿Others￿Could￿Harm￿Our
Business"￿and￿Item￿4.B.￿"Business￿Overview,￿Intellectual￿Property".

D. Trend Information
The￿year￿2012￿was￿characterized￿by￿a￿decreased￿demand￿for￿lithography￿imaging￿systems.￿Customers￿mainly￿decreased
their￿Memory￿capacity￿investments￿as￿the￿PC￿business￿shrunk￿compared￿to￿2011.￿The￿majority￿of￿system￿sales￿was
generated￿from￿Logic.

The￿following￿table￿sets￿forth￿our￿systems￿backlog,￿excluding￿EUV,￿as￿of￿December￿31,￿2012￿and￿2011.

Year ended December 31
￿
New￿systems￿backlog￿excluding￿EUV￿(in￿units)
Used￿systems￿backlog￿excluding￿EUV￿(in￿units)
Total￿systems￿backlog￿excluding￿EUV￿(in￿units)
Value￿of￿new￿systems￿backlog￿excluding￿EUV￿(EUR￿million)
Value￿of￿used￿systems￿backlog￿excluding￿EUV￿(EUR￿million)
Total￿value￿of￿systems￿backlog￿excluding￿EUV￿(EUR￿million)
ASP￿of￿new￿systems￿backlog￿excluding￿EUV￿(EUR￿million)
ASP￿of￿used￿systems￿backlog￿excluding￿EUV￿(EUR￿million)
ASP￿of￿total￿systems￿backlog￿excluding￿EUV￿(EUR￿million)

2012  
￿ ￿
40 ￿
6 ￿
46 ￿
1,190.1 ￿
24.0 ￿
1,214.1 ￿
29.8 ￿
4.0 ￿
26.4 ￿

2011
￿
61
10
71
1,702.7
29.8
1,732.5
27.9
3.0
24.4

Our￿systems￿backlog￿includes￿only￿orders￿for￿which￿written￿authorizations￿have￿been￿accepted￿and￿system￿shipment
and￿revenue￿recognition￿dates￿within￿12￿months￿have￿been￿assigned.￿Historically,￿orders￿have￿been￿subject￿to
cancellation￿or￿delay￿by￿the￿customer.￿Due￿to￿possible￿customer￿changes￿in￿delivery￿schedules￿and￿to￿cancellation
of￿orders,￿our￿systems￿backlog￿at￿any￿particular￿date￿is￿not￿necessarily￿indicative￿of￿actual￿sales￿for￿any￿succeeding
period.

We￿expect￿net￿sales￿for￿2013￿to￿be￿in￿line￿with￿2012￿supported￿by￿the￿strategic￿technology￿transition￿need￿for￿very
lithography-intensive￿14-20￿nm￿foundry￿and￿logic￿nodes.￿These￿nodes￿will￿enable￿the￿next￿generation￿portable￿products,
for￿which￿all￿semiconductor￿architecture￿leaders￿have￿designs￿pending￿and￿need￿initial￿capacity.￿In￿addition￿we￿will￿ship
our￿first￿NXE:3300B￿EUV￿tool￿in￿the￿second￿quarter￿targeting￿for￿a￿maximum￿of￿11￿potential￿shipments￿in￿2013.

For￿the￿first￿quarter￿of￿2013,￿we￿expect￿net￿sales￿of￿about￿EUR￿850￿million,￿gross￿margin￿of￿about￿38￿percent,￿R&D￿costs
of￿EUR￿185￿million,￿other￿income￿of￿EUR￿16￿million￿which￿consists￿of￿contributions￿from￿participants￿of￿the￿Customer
Co-Investment￿Program￿and￿SG&A￿costs￿of￿EUR￿63￿million￿including￿EUR￿6￿million￿expenses￿related￿to￿the￿pending
Cymer￿acquisition.

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37

In￿the￿fourth￿quarter￿of￿2012,￿we￿announced￿the￿intended￿cash-and-stock￿acquisition￿of￿lithographic￿light￿source
supplier￿Cymer.￿As￿part￿of￿the￿regulatory￿review￿process,￿clearance￿has￿been￿granted￿by￿the￿U.S.￿Committee￿on￿Foreign
Investment￿in￿the￿United￿States￿(CFIUS)￿and￿German￿anti-trust￿authorities.￿Completion￿of￿the￿merger￿is￿subject￿to
customary￿closing￿conditions,￿including￿expiration￿or￿termination￿of￿the￿applicable￿waiting￿period￿under￿the￿Hart-Scott-
Rodino￿Act￿and￿receipt￿of￿approvals￿under￿other￿foreign￿competition￿laws.￿On￿february￿5,￿2013,￿the￿Cymer￿Stockholders
approved￿the￿merger￿agreement.￿We￿continue￿to￿expect￿the￿transaction￿to￿close￿in￿the￿first￿half￿of￿2013.￿See￿also￿Item
10.C￿"Material￿Contract,￿Cymer￿Merger".

The￿trends￿discussed￿in￿this￿Item￿5.D.￿"Trend￿information"￿are￿subject￿to￿risks￿and￿uncertainties.￿See￿"Part￿I￿–￿Special
Note￿Regarding￿Forward￿Looking￿Statements".

E. Off-Balance Sheet Arrangements
We￿have￿various￿contractual￿obligations,￿some￿of￿which￿are￿required￿to￿be￿recorded￿as￿liabilities￿in￿our￿consolidated
financial￿statements,￿including￿long-￿and￿short-term￿debt.￿Other￿contractual￿obligations,￿namely￿operating￿lease
commitments,￿purchase￿obligations￿and￿guarantees,￿are￿generally￿not￿required￿to￿be￿recognized￿as￿liabilities￿on￿our
balance￿sheet￿but￿are￿required￿to￿be￿disclosed.

On￿October￿16,￿2012,￿we￿entered￿into￿a￿merger￿agreement￿with￿Cymer,￿a￿company￿engaged￿in￿the￿development,
manufacturing￿and￿marketing￿of￿light￿sources￿for￿sale￿to￿customers￿who￿manufacture￿photolithography￿tools￿in￿the
semiconductor￿equipment￿industry￿(the￿"Merger￿Agreement"),￿under￿which￿ASML￿will￿acquire￿all￿outstanding￿shares￿of
common￿stock￿of￿Cymer￿for￿a￿consideration￿per￿Cymer￿share￿of￿Cymer￿common￿stock￿of￿USD￿20.00￿in￿cash￿and￿a￿fixed
ratio￿of￿1.1502￿ASML￿Ordinary￿Shares).￿Completion￿of￿the￿merger￿is￿subject￿to￿customary￿closing￿conditions,￿including
expiration￿or￿termination￿of￿the￿applicable￿waiting￿period￿under￿the￿Hart-Scott-Rodino￿Act￿and￿receipt￿of￿approvals
under￿other￿foreign￿competition￿laws.￿On￿february￿5,￿2013,￿the￿Cymer￿Stockholders￿approved￿the￿merger￿agreement.
We￿expect￿the￿transaction￿to￿close￿in￿the￿first￿half￿of￿2013,￿however￿there￿is￿no￿assurance￿that￿the￿transaction￿will
be￿completed￿within￿the￿expected￿time￿period￿or￿at￿all.￿See￿"Risk￿Factors,￿We￿May￿Be￿Unable￿to￿Make￿Desirable
Acquisitions￿or￿to￿Integrate￿Any￿Businesses￿We￿Successfully￿Acquire".￿See￿also￿Item￿10.C￿"Material￿Contracts,￿Cymer
Merger".￿On￿October￿16,￿2012,￿we￿also￿entered￿into￿an￿EUV￿source￿R&D￿cooperation￿agreement￿and￿an￿EUV￿source
supply￿agreement￿with￿Cymer.

F. Tabular Disclosure of Contractual Obligations
Our￿contractual￿obligations￿as￿of￿December￿31,￿2012￿can￿be￿summarized￿as￿follows:

Payments due by period
(in thousands)
￿
Long-Term￿Debt￿Obligations,￿including￿interest￿expense1
Operating￿Lease￿Obligations

1 year
EUR
￿
39,801
32,195
Purchase￿Obligations 1,643,955 1,557,021
2,964
￿
Total Contractual Obligations 2,633,943 1,631,981

Unrecognized￿Tax￿Benefits,￿including￿interest￿expense
￿

Total
EUR
￿
831,194
98,827

59,967
￿

2 year
EUR
￿
39,726
22,267
84,012
4,209
￿
150,214

3 year
EUR
￿
39,726
17,192
2,876
-
￿
59,794

4 year
EUR
￿
39,726
13,465
32
-
￿
53,223

5 year
EUR
￿
639,726
5,265
14
16,957
￿
661,962

After
5 years
EUR
￿
32,489
8,443
-
35,837
￿
76,769

1 See￿Note￿14￿for￿the￿amounts￿excluding￿interest￿expenses.

Long-term￿debt￿obligations￿mainly￿relate￿to￿interest￿payments￿and￿principal￿amount￿of￿the￿Eurobond.￿See￿Note￿14￿to￿our
consolidated￿financial￿statements.

Operating￿lease￿obligations￿include￿leases￿of￿equipment￿and￿facilities.￿Lease￿payments￿recognized￿as￿an￿expense
were￿EUR￿41.6￿million,￿EUR￿40.6￿million￿and￿EUR￿37.9￿million￿for￿the￿years￿ended￿December￿31,￿2012,￿2011￿and￿2010,
respectively.

ASML￿ANNUAL￿REPORT￿2012

38

 
 
 
 
 
 
 
Several￿operating￿leases￿for￿our￿buildings￿contain￿purchase￿options,￿exercisable￿at￿the￿end￿of￿the￿lease,￿and￿in￿some
cases,￿during￿the￿term￿of￿the￿lease.￿The￿amounts￿to￿be￿paid￿if￿ASML￿should￿exercise￿these￿purchase￿options￿at￿the￿end
of￿the￿lease￿as￿of￿December￿31,￿2012￿can￿be￿summarized￿as￿follows:

Purchase options due by period
(in thousands)
Purchase￿options

Total
EUR
22,982

1 year
EUR
-

2 year
EUR
8,999

3 year
EUR
-

4 year
EUR
13,983

5 year
EUR
-

After 5
years
EUR
-

Purchase￿obligations￿include￿purchase￿commitments￿with￿suppliers￿in￿the￿ordinary￿course￿of￿business.￿ASML￿expects
that￿it￿will￿honor￿these￿purchase￿obligations￿to￿fulfill￿future￿sales,￿in￿line￿with￿the￿timing￿of￿those￿future￿sales.￿The￿general
terms￿and￿conditions￿of￿the￿agreements￿relating￿to￿the￿major￿part￿of￿our￿purchase￿commitments￿as￿of￿December￿31,
2012￿contain￿clauses￿that￿enable￿us￿to￿delay￿or￿cancel￿delivery￿of￿ordered￿goods￿and￿services￿up￿to￿the￿dates￿specified
in￿the￿corresponding￿purchase￿contracts.￿These￿terms￿and￿conditions￿that￿we￿had￿agreed￿with￿our￿supply￿chain￿partners
gives￿us￿additional￿flexibility￿to￿adapt￿our￿purchase￿obligations￿to￿our￿requirements￿in￿light￿of￿the￿inherent￿cyclicality￿of
the￿semiconductor￿equipment￿industry￿in￿which￿we￿operate.￿We￿establish￿a￿provision￿for￿cancellation￿fees￿when￿it￿is
probable￿that￿the￿liability￿has￿been￿incurred￿and￿the￿amount￿of￿cancellation￿fees￿is￿reasonably￿estimable.

G. Safe Harbor
See￿Part￿I￿"Special￿Note￿Regarding￿Forward-Looking￿Statements".

ASML￿ANNUAL￿REPORT￿2012

39

Item 6 Directors, Senior Management and Employees

A. Directors and Senior Management
The￿members￿of￿our￿Supervisory￿Board￿and￿our￿Board￿of￿Management￿are￿as￿follows:

Name
Arthur￿P.M.￿van￿der￿Poel1,2,3
Jos￿W.B.￿Westerburgen2,4
Fritz￿W.￿Fröhlich1
Hendrika￿(Ieke)￿C.J.￿van￿den￿Burg4
OB￿Bilous2,3
William￿T.￿Siegle3
Pauline￿F.M.￿van￿der￿Meer￿Mohr4
Wolfgang￿H.￿Ziebart￿1,3,4
Eric￿Meurice

Peter￿T.F.M.￿Wennink

Martin￿A.￿van￿den￿Brink

Frits￿J.￿van￿Hout

Frédéric￿J.M.￿Schneider-Maunoury

Title
Chairman￿of￿the￿Supervisory￿Board
Member￿of￿the￿Supervisory￿Board
Vice￿Chairman￿and￿Member￿of￿the￿Supervisory￿Board
Member￿of￿the￿Supervisory￿Board
Member￿of￿the￿Supervisory￿Board
Member￿of￿the￿Supervisory￿Board
Member￿of￿the￿Supervisory￿Board
Member￿of￿the￿Supervisory￿Board
President,￿Chief￿Executive￿Officer￿and￿Chairman￿of￿the￿Board
of￿Management
Executive￿Vice￿President,￿Chief￿Financial￿Officer￿and￿Member
of￿the￿Board￿of￿Management
Executive￿Vice￿President,￿Chief￿Product￿and￿Technology
Officer￿and￿Member￿of￿the￿Board￿of￿Management
Executive￿Vice￿President,￿Chief￿Marketing￿Officer￿and￿Member
of￿the￿Board￿of￿Management
Executive￿Vice￿President,￿Chief￿Operating￿Officer￿and￿Member
of￿the￿Board￿of￿Management

Year of Birth
1948
1942
1942
1952
1938
1939
1960
1950
1956

Term Expires  
2016 ￿
2013 ￿
2014 ￿
2013 ￿
2014 ￿
2013 ￿
2013 ￿
2013 ￿
2014 5

1957

1957

1960

1961

N/A 6

N/A 6

2013 ￿

2014 ￿

1 Member￿of￿the￿Audit￿Committee.
2 Member￿of￿the￿Selection￿and￿Nomination￿Committee.
3 Member￿of￿the￿Technology￿and￿Strategy￿Committee.
4 Member￿of￿the￿Remuneration￿Committee.
5 Upon￿notification￿to￿the￿AGM￿held￿on￿April￿25,￿2012,￿ASML's￿Supervisory￿Board￿extended￿Eric￿Meurice's￿appointment￿term￿as￿President,Chief

Executive￿Officer￿and￿Chairman￿of￿the￿Board￿of￿Management￿of￿ASML￿until￿the￿2014￿AGM,￿with￿the￿option￿to￿further￿extend￿the￿appointment￿term￿by
another￿two￿years￿if￿both￿parties￿agree.
There￿are￿no￿specified￿terms￿for￿members￿of￿the￿Board￿of￿Management￿appointed￿prior￿to￿March￿2004.

6

Messrs.￿Bilous￿and￿Fröhlich￿retired￿by￿rotation￿in￿2012￿and￿were￿reappointed￿for￿a￿maximum￿period￿of￿two￿years￿in
line￿with￿the￿Supervisory￿Board's￿profile.￿Mr.￿Van￿der￿Poel￿also￿retired￿by￿rotation￿and￿was￿reappointed￿for￿a￿maximum
period￿of￿four￿years.￿No￿new￿Supervisory￿Board￿members￿were￿appointed￿in￿2012.

There￿are￿no￿family￿relationships￿among￿the￿members￿of￿our￿Supervisory￿Board￿and￿Board￿of￿Management.

Since￿2005,￿the￿Works￿Council￿of￿ASML￿Netherlands￿B.V.￿has￿an￿enhanced￿right￿to￿make￿recommendations￿for
nomination￿of￿one-third￿of￿the￿members￿of￿the￿Supervisory￿Board,￿which￿recommendations￿may￿be￿rejected￿by￿the
Supervisory￿Board￿in￿limited￿circumstances.￿See￿Item￿6.C.￿"Board￿Practices,￿Supervisory￿Board".￿At￿the￿2005￿General
Meeting￿of￿Shareholders,￿Ms.￿Van￿den￿Burg￿was￿appointed￿pursuant￿to￿this￿recommendation￿right,￿and￿at￿the￿2009
General￿Meeting￿of￿Shareholders￿she￿was￿reappointed￿in￿accordance￿with￿this￿recommendation￿right.￿At￿the￿2009
General￿Meeting￿of￿Shareholders,￿Ms.￿Van￿der￿Meer￿Mohr￿was￿appointed￿pursuant￿to￿this￿recommendation￿right.

Director and Officer Biographies

Arthur P.M. van der Poel
Mr.￿Van￿der￿Poel￿was￿appointed￿to￿our￿Supervisory￿Board￿in￿March￿2004￿and￿was￿appointed￿as￿Chairman￿in￿2007.
Until￿2001,￿he￿was￿the￿Chief￿Executive￿Officer￿of￿Philips￿Semiconductors.￿Mr.￿Van￿der￿Poel￿is￿a￿former￿member￿of￿the
Board￿of￿Management￿(until￿April￿2003)￿and￿a￿former￿member￿of￿the￿Group￿Management￿Committee￿of￿Royal￿Philips
Electronics￿N.V.￿Mr.￿Van￿der￿Poel￿was￿a￿member￿of￿the￿Supervisory￿Board￿of￿PSV￿N.V.￿until￿June,￿2012.￿He￿currently
serves￿as￿a￿member￿of￿the￿Board￿of￿Directors￿of￿Gemalto￿Holding￿N.V.￿and￿as￿a￿member￿of￿the￿Supervisory￿Board￿of
Royal￿HaskoningDHV￿B.V.￿and￿since￿October￿2012,￿as￿member￿of￿the￿Supervisory￿Board￿of￿BDR￿Thermea.

Jos W.B. Westerburgen
Mr.￿Westerburgen￿was￿appointed￿to￿our￿Supervisory￿Board￿in￿March￿2002.￿Mr.￿Westerburgen￿has￿extensive￿experience￿in
the￿field￿of￿corporate￿law￿and￿tax.￿Mr.￿Westerburgen￿is￿former￿Company￿Secretary￿and￿Head￿of￿Tax￿of￿Unilever￿N.V.￿and
Plc.￿Mr.￿Westerburgen￿served￿as￿Supervisory￿Board￿member￿of￿Unibail-Rodamco￿S.E.￿until￿2010￿and￿was￿Vice-Chairman
of￿the￿Board￿of￿the￿Association￿of￿Aegon￿N.V.￿until￿April￿2012.

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Fritz W. Fröhlich
Mr.￿Fröhlich￿was￿appointed￿to￿our￿Supervisory￿Board￿in￿March￿2004.￿He￿is￿the￿former￿Deputy￿Chairman￿and￿Chief
Financial￿Officer￿of￿Akzo￿Nobel￿N.V.￿Mr.￿Fröhlich￿is￿the￿Chairman￿of￿the￿Supervisory￿Board￿of￿Randstad￿Holding￿N.V.￿Mr.
Fröhlich￿also￿serves￿as￿a￿member￿of￿the￿Supervisory￿Boards￿of￿Allianz￿Nederland￿N.V.￿and￿Rexel￿S.A.￿and￿as￿a￿member
of￿the￿Board￿of￿Directors￿of￿Prysmian￿Group.

Hendrika (Ieke) C.J. van den Burg
Ms.￿Van￿den￿Burg￿was￿appointed￿to￿our￿Supervisory￿Board￿in￿March￿2005.￿Ms.￿Van￿den￿Burg￿was￿a￿member￿of￿the
European￿Parliament￿from￿1999￿until￿2009.￿Currently￿she￿is￿a￿member￿of￿the￿Supervisory￿Board￿of￿APG￿Group￿N.V.,
serves￿as￿a￿member￿of￿the￿Dutch￿Monitoring￿Committee￿Corporate￿Governance￿Code,￿is￿chairperson￿of￿the￿Monitoring
Foundation￿Dutch￿Insurance￿Companies￿(Stichting Toetsing Verzekeraars)￿and￿is￿a￿member￿of￿the￿Advisory￿Boards￿of￿the
Dutch￿Data￿Protection￿Authority￿(College Bescherming Persoonsgegevens)￿and￿Dutch￿National￿Register￿of￿Supervisory
Directors￿(Nationaal Register Commissarissen en Toezichthouders).￿Ms.￿Van￿den￿Burg￿also￿serves￿as￿a￿member￿of￿the
Advisory￿Scientific￿Systemic￿Committee￿European￿Risk￿Board￿(ECB￿Frankfurt)￿and￿as￿a￿member￿of￿the￿Advisory￿Council
International￿Affairs￿Commission￿Human￿Rights￿(Dutch￿Ministry￿Foreign￿Affairs).

OB Bilous
Mr.￿Bilous￿was￿appointed￿to￿our￿Supervisory￿Board￿in￿March￿2005.￿From￿1960￿until￿2000￿Mr.￿Bilous￿held￿various
management￿positions￿at￿IBM,￿including￿General￿Manager￿and￿Vice￿President￿Worldwide￿Manufacturing￿of
IBM’s￿Microelectronics￿Division.￿Mr.￿Bilous￿also￿served￿on￿the￿Boards￿of￿SMST,￿ALTIS￿Semiconductor,￿Dominion
Semiconductor￿and￿was￿chairman￿of￿the￿Board￿of￿Sematech￿from￿2000￿to￿2009.￿Mr.￿Bilous￿currently￿serves￿as￿Board
member￿of￿Nantero,￿Inc.

William T. Siegle
Mr.￿Siegle￿was￿appointed￿to￿our￿Supervisory￿Board￿in￿March￿2007.￿From￿1964￿until￿1990￿Mr.￿Siegle￿held￿various
technical,￿management￿and￿executive￿positions￿at￿IBM,￿including￿Director￿of￿the￿Advanced￿Technology￿Center.￿From
1990￿until￿2005￿Mr.￿Siegle￿served￿as￿Senior￿Vice￿President￿and￿Chief￿Scientist￿at￿AMD,￿responsible￿for￿the￿development
of￿technology￿platforms￿and￿manufacturing￿operations￿worldwide.￿He￿was￿also￿chairman￿of￿the￿Board￿of￿Directors￿of
SRC,￿member￿of￿the￿Board￿of￿Directors￿of￿Sematech￿and￿Director￿of￿Etec,￿Inc.￿and￿DuPont￿Photomask,￿Inc.￿Currently,
Mr.￿Siegle￿is￿a￿member￿of￿the￿Advisory￿Board￿of￿Acorn￿Technologies,￿Inc.

Pauline F.M. van der Meer Mohr
Ms.￿Van￿der￿Meer￿Mohr￿was￿appointed￿to￿our￿Supervisory￿Board￿in￿March￿2009.￿As￿of￿January￿1,￿2010,￿Ms.￿Van￿der
Meer￿Mohr￿serves￿as￿President￿of￿the￿Executive￿Board￿of￿the￿Erasmus￿University￿Rotterdam.￿Prior￿thereto￿she￿was
managing￿partner￿of￿the￿Amstelbridge￿Group,￿Senior￿Executive￿Vice￿President￿at￿ABN￿AMRO￿Bank,￿Head￿of￿Group
Human￿Resources￿at￿TNT￿N.V.,￿and￿held￿several￿senior￿executive￿roles￿at￿the￿Royal/Dutch￿Shell￿Group￿of￿Companies
in￿various￿areas.￿Currently,￿Ms.￿Van￿der￿Meer￿Mohr￿is￿a￿member￿of￿the￿Supervisory￿Boards￿of￿Royal￿DSM￿N.V.￿and
Duisenberg￿School￿of￿Finance.

Wolfgang H. Ziebart
Mr.￿Ziebart￿was￿appointed￿to￿our￿Supervisory￿Board￿in￿March￿2009.￿Until￿May￿2008,￿he￿was￿President￿and￿Chief
Executive￿Officer￿of￿Infineon￿Technologies￿A.G.￿Before￿Infineon,￿Mr.￿Ziebart￿was￿on￿the￿Boards￿of￿Management￿of￿car
components￿manufacturer￿Continental￿A.G.￿and￿automobile￿producer￿BMW￿A.G.￿Mr.￿Ziebart￿is￿the￿chairman￿of￿the
Supervisory￿Board￿of￿Nordex￿S.E.￿and￿of￿Novaled￿A.G.￿He￿also￿serves￿as￿member￿of￿the￿Board￿of￿Autoliv,￿Inc.

Eric Meurice
Mr.￿Meurice￿joined￿ASML￿on￿October￿1,￿2004￿as￿President,￿Chief￿Executive￿Officer￿and￿Chairman￿of￿the￿Board￿of
Management.￿Prior￿to￿joining￿ASML,￿and￿since￿March￿2001,￿he￿was￿Executive￿Vice￿President￿of￿Thomson￿Television
Worldwide.￿Between￿1995￿and￿2001,￿Mr.￿Meurice￿served￿as￿Vice￿President￿for￿Dell￿Computer,￿where￿he￿ran￿the￿Western,
Eastern￿Europe￿and￿Dell’s￿Emerging￿Markets￿business￿within￿EMEA.￿Before￿1995,￿he￿gained￿extensive￿technology
experience￿in￿the￿semiconductor￿industry￿at￿ITT￿Semiconductors￿Group￿and￿Intel￿Corporation,￿in￿the￿microcontroller
group.

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Peter T.F.M. Wennink
Mr.￿Wennink￿joined￿ASML￿on￿January￿1,￿1999￿and￿was￿appointed￿as￿Executive￿Vice￿President,￿Chief￿Financial￿Officer
of￿ASML￿and￿member￿of￿our￿Board￿of￿Management￿on￿July￿1,￿1999.￿Mr.￿Wennink￿has￿an￿extensive￿background￿in
finance￿and￿accounting.￿Prior￿to￿his￿employment￿with￿ASML,￿Mr.￿Wennink￿worked￿as￿a￿partner￿at￿Deloitte￿Accountants,
specializing￿in￿the￿high￿technology￿industry￿with￿an￿emphasis￿on￿the￿semiconductor￿equipment￿industry.￿Mr.￿Wennink
was￿a￿member￿of￿the￿Supervisory￿Board￿of￿PSV￿N.V.￿until￿June￿30,￿2012.￿Mr.￿Wennink￿is￿a￿member￿of￿the￿Dutch￿Institute
of￿Registered￿Accountants.￿Mr.￿Wennink￿is￿currently￿a￿member￿of￿the￿Supervisory￿Board￿of￿Bank￿Insinger￿de￿Beaufort
N.V.

Martin A. van den Brink
Mr.￿Van￿den￿Brink￿joined￿ASML￿when￿the￿company￿was￿founded￿in￿early￿1984.￿He￿held￿several￿positions￿in￿engineering
and￿from￿1995￿he￿served￿as￿Vice￿President￿Technology.￿Mr.￿Van￿den￿Brink￿was￿appointed￿as￿member￿of￿the￿Board￿of
Management￿in￿1999￿and￿is￿currently￿ASML's￿Executive￿Vice￿President￿and￿Chief￿Product￿&￿Technology￿Officer.￿Mr.￿Van
den￿Brink￿has￿earned￿a￿degree￿in￿Electrical￿Engineering￿from￿HTS￿Arnhem￿(HAN￿University),￿and￿a￿degree￿in￿Physics
(1984)￿from￿the￿University￿of￿Twente,￿the￿Netherlands.￿In￿2012,￿he￿was￿awarded￿an￿honorary￿doctorate￿in￿physics￿by￿the
University￿of￿Amsterdam.

Frits J. van Hout
Mr.￿Van￿Hout￿was￿appointed￿as￿Executive￿Vice￿President,￿Chief￿Marketing￿Officer￿and￿Member￿of￿our￿Board￿of
Management￿in￿2009.￿Mr.￿Van￿Hout￿was￿previously￿an￿ASML￿employee￿from￿its￿founding￿in￿1984￿to￿1992,￿in￿various
roles￿in￿engineering￿and￿sales.￿From￿1998￿to￿2001,￿Mr.￿Van￿Hout￿served￿as￿Chief￿Executive￿Officer￿of￿the￿Beyeler￿Group,
based￿in￿the￿Netherlands￿and￿Germany.￿After￿rejoining￿ASML￿in￿2001,￿he￿served￿as￿Senior￿Vice￿President￿Customer
Support￿and￿two￿Business￿Units.￿In￿2008,￿Mr.￿Van￿Hout￿was￿appointed￿Executive￿Vice￿President￿Integral￿Efficiency.

Frédéric J.M. Schneider-Maunoury
Mr.￿Schneider-Maunoury￿joined￿ASML￿on￿December￿1,￿2009￿as￿Executive￿Vice￿President￿and￿Chief￿Operations￿Officer
and￿was￿appointed￿to￿ASML’s￿Board￿of￿Management￿on￿March￿24,￿2010.￿Before￿joining￿ASML,￿Mr.￿Schneider-Maunoury
served￿as￿Vice￿President￿Thermal￿Products￿Manufacturing￿of￿the￿power￿generation￿and￿rail￿transport￿equipment￿group
ALSTOM.￿Previously,￿he￿ran￿the￿worldwide￿Hydro￿Business￿of￿ALSTOM￿as￿general￿manager.￿Before￿joining￿ALSTOM￿in
1996,￿Mr.￿Schneider-Maunoury￿held￿various￿positions￿at￿the￿French￿Ministry￿of￿Trade￿and￿Industry.

B. Compensation
For￿details￿on￿Board￿of￿Management￿and￿Supervisory￿Board￿remuneration￿as￿well￿as￿benefits￿upon￿termination,￿see￿Note
21￿to￿our￿consolidated￿financial￿statements.

ASML￿has￿not￿established￿in￿the￿past￿and￿does￿not￿intend￿to￿establish￿in￿the￿future￿any￿stock￿(option)￿or￿purchase￿plans
or￿other￿equity￿compensation￿arrangements￿for￿the￿members￿of￿our￿Supervisory￿Board.

Bonus and Profit-sharing plans

For￿details￿of￿employee￿bonus￿and￿profit-sharing￿plans,￿see￿Note￿17￿to￿our￿consolidated￿financial￿statements.

Pension plans

For￿details￿of￿employee￿pension￿plans,￿see￿Note￿17￿to￿our￿consolidated￿financial￿statements.

C. Board Practices
General

We￿endorse￿the￿importance￿of￿good￿corporate￿governance,￿in￿which￿independent￿supervision,￿accountability￿and
transparency￿are￿the￿most￿significant￿elements.￿Within￿the￿framework￿of￿corporate￿governance,￿it￿is￿important￿that
a￿relationship￿of￿trust￿exists￿between￿the￿Board￿of￿Management,￿the￿Supervisory￿Board,￿our￿employees￿and￿our
shareholders.

We￿pursue￿a￿policy￿of￿active￿communication￿with￿our￿shareholders.￿In￿addition￿to￿the￿exchange￿of￿ideas￿at￿the￿General
Meeting￿of￿Shareholders,￿other￿important￿forms￿of￿communication￿include￿the￿publication￿of￿our￿annual￿and￿quarterly
financial￿results￿as￿well￿as￿press￿releases￿and￿publications￿posted￿on￿our￿website.

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Our￿corporate￿governance￿structure￿is￿intended￿to:
• provide￿shareholders￿with￿regular,￿reliable,￿relevant￿and￿transparent￿information￿regarding￿our￿activities,￿structure,

financial￿condition,￿performance￿and￿other￿information,￿including￿information￿on￿our￿social,￿ethical￿and￿environmental
records￿and￿policies;

• apply￿high-quality￿standards￿for￿disclosure,￿accounting￿and￿auditing;￿and
• apply￿stringent￿rules￿with￿regard￿to￿insider￿securities￿trading.

Two-tier board structure

ASML￿is￿incorporated￿under￿Dutch￿law￿and￿has￿a￿two-tier￿board￿structure.￿Responsibility￿for￿the￿management￿of￿ASML
lies￿with￿the￿Board￿of￿Management.￿Independent,￿non-executive￿members￿serve￿on￿the￿Supervisory￿Board,￿which
supervises￿and￿advises￿the￿members￿of￿the￿Board￿of￿Management￿in￿performing￿their￿management￿tasks.￿The￿Board
of￿Management￿has￿the￿duty￿to￿keep￿the￿Supervisory￿Board￿informed,￿consult￿with￿the￿Supervisory￿Board￿on￿important
matters￿and￿submit￿certain￿important￿decisions￿to￿the￿Supervisory￿Board￿for￿its￿approval.￿The￿Supervisory￿Board￿is
responsible￿for￿supervising,￿monitoring￿and￿advising￿the￿Board￿of￿Management￿on:￿(i)￿the￿achievement￿of￿ASML’s
objectives,￿(ii)￿the￿corporate￿strategy￿and￿management￿of￿risks￿inherent￿to￿ASML’s￿business￿activities,￿(iii)￿the￿structure
and￿operation￿of￿internal￿risk￿management￿and￿control￿systems,￿(iv)￿the￿financial￿reporting￿process￿and￿(v)￿compliance
with￿applicable￿legislation￿and￿regulations.

Supervisory￿Board￿members￿are￿prohibited￿from￿serving￿as￿officers￿or￿employees￿of￿ASML,￿and￿members￿of￿the￿Board
of￿Management￿cannot￿serve￿on￿the￿Supervisory￿Board.

Board of Management

The￿Board￿of￿Management￿consists￿of￿at￿least￿two￿members￿or￿such￿larger￿number￿of￿members￿as￿determined￿by￿the
Supervisory￿Board.￿Members￿of￿the￿Board￿of￿Management￿are￿appointed￿by￿the￿Supervisory￿Board.￿The￿Supervisory
Board￿must￿notify￿the￿General￿Meeting￿of￿Shareholders￿of￿the￿intended￿appointment￿of￿a￿member￿of￿the￿Board￿of
Management.￿As￿a￿result￿of￿our￿compliance￿with￿the￿Dutch￿Corporate￿Governance￿Code,￿members￿of￿the￿Board￿of
Management￿that￿are￿initially￿appointed￿in￿2004￿or￿later￿shall￿be￿appointed￿for￿a￿maximum￿period￿of￿four￿years,￿but￿may
be￿re-appointed.￿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.￿In￿the￿case￿of￿dismissal,￿the￿Supervisory￿Board￿must
first￿inform￿the￿General￿Meeting￿of￿Shareholders￿of￿the￿intended￿removal.

The￿Supervisory￿Board￿determines￿the￿remuneration￿of￿the￿individual￿members￿of￿the￿Board￿of￿Management,￿in￿line￿with
the￿remuneration￿policy￿adopted￿by￿the￿General￿Meeting￿of￿Shareholders,￿upon￿a￿proposal￿of￿the￿Supervisory￿Board.
ASML’s￿remuneration￿policy￿is￿included￿in￿the￿Remuneration￿Report.

For￿details￿of￿the￿terms￿of￿office￿of￿the￿current￿members￿of￿the￿Board￿of￿Management,￿see￿Item￿6.A￿"Directors￿and
Senior￿Management".￿For￿details￿of￿the￿benefits￿provided￿to￿members￿of￿Board￿of￿Management￿upon￿termination,￿see
Note￿21￿to￿our￿consolidated￿financial￿statements.

Supervisory Board

The￿Supervisory￿Board￿consists￿of￿at￿least￿three￿members￿or￿such￿larger￿number￿as￿determined￿by￿the￿Supervisory
Board.￿The￿Supervisory￿Board￿prepares￿a￿profile￿in￿relation￿to￿its￿size￿and￿composition;￿ASML's￿Supervisory￿Board
profile￿is￿posted￿on￿ASML’s￿website.

Members￿of￿the￿Supervisory￿Board￿are￿appointed￿by￿the￿General￿Meeting￿of￿Shareholders￿from￿nominations￿of￿the
Supervisory￿Board.￿Nominations￿must￿be￿reasoned￿and￿must￿be￿made￿available￿to￿the￿General￿Meeting￿of￿Shareholders
and￿the￿Works￿Council￿simultaneously.￿Before￿the￿Supervisory￿Board￿presents￿its￿nominations,￿both￿the￿General￿Meeting
of￿Shareholders￿and￿the￿Works￿Council￿may￿make￿recommendations￿(which￿the￿Supervisory￿Board￿may￿reject).￿In
addition,￿the￿Works￿Council￿has￿an￿enhanced￿right￿to￿make￿recommendations￿for￿nomination￿of￿at￿least￿one-third￿of
the￿members￿of￿the￿Supervisory￿Board,￿which￿recommendation￿may￿only￿be￿rejected￿by￿the￿Supervisory￿Board:￿(i)
if￿the￿relevant￿person￿is￿unsuitable￿or￿(ii)￿if￿the￿Supervisory￿Board￿would￿not￿be￿duly￿composed￿if￿the￿recommended
person￿were￿appointed￿as￿a￿Supervisory￿Board￿member.￿If￿no￿agreement￿can￿be￿reached￿between￿the￿Supervisory￿Board
and￿the￿Works￿Council￿on￿these￿recommendations,￿the￿Supervisory￿Board￿may￿request￿the￿Enterprise￿Chamber￿of￿the
Amsterdam￿Court￿to￿declare￿its￿objection￿legitimate.￿Any￿decision￿of￿the￿Enterprise￿Chamber￿on￿this￿matter￿is￿non-
appealable.

Nominations￿of￿the￿Supervisory￿Board￿may￿be￿rejected￿by￿the￿General￿Meeting￿of￿Shareholders￿by￿an￿absolute￿majority
of￿the￿votes￿representing￿at￿least￿one-third￿of￿the￿total￿outstanding￿capital.￿If￿the￿votes￿cast￿in￿favor￿of￿such￿resolution
do￿not￿represent￿at￿least￿one-third￿of￿the￿total￿outstanding￿capital,￿a￿new￿meeting￿can￿be￿convened￿at￿which￿the

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43

nomination￿can￿be￿rejected￿by￿an￿absolute￿majority.￿If￿a￿nomination￿is￿rejected,￿the￿Supervisory￿Board￿must￿make￿a￿new
nomination.￿If￿a￿nomination￿is￿not￿rejected￿and￿the￿General￿Meeting￿of￿Shareholders￿does￿not￿appoint￿the￿nominated
person,￿the￿Supervisory￿Board￿will￿appoint￿the￿nominated￿person.

Members￿of￿the￿Supervisory￿Board￿serve￿for￿a￿maximum￿term￿of￿four￿years￿from￿the￿date￿of￿their￿appointment,￿or￿a
shorter￿period￿as￿set￿out￿in￿the￿rotation￿schedule￿as￿adopted￿by￿the￿Supervisory￿Board.￿They￿may￿be￿re-appointed,
provided￿that￿their￿entire￿term￿of￿office￿does￿not￿exceed￿twelve￿years.￿The￿General￿Meeting￿of￿Shareholders￿may,￿with
an￿absolute￿majority￿of￿the￿votes￿representing￿at￿least￿one-third￿of￿the￿total￿outstanding￿capital,￿dismiss￿the￿Supervisory
Board￿in￿its￿entirety￿for￿lack￿of￿confidence.￿In￿such￿event,￿the￿Enterprise￿Chamber￿of￿the￿Amsterdam￿Court￿shall￿appoint
one￿or￿more￿members￿of￿the￿Supervisory￿Board￿at￿the￿request￿of￿the￿Board￿of￿Management.

Upon￿the￿proposal￿of￿the￿Supervisory￿Board,￿the￿General￿Meeting￿of￿Shareholders￿determines￿the￿remuneration￿of￿the
members￿of￿the￿Supervisory￿Board.￿A￿member￿of￿the￿Supervisory￿Board￿may￿not￿be￿granted￿any￿shares￿or￿option￿rights
by￿way￿of￿remuneration.

For￿details￿of￿the￿terms￿of￿office￿of￿the￿current￿members￿of￿the￿Supervisory￿Board,￿see￿Item￿6.A￿"Directors￿and￿Senior
Management".￿For￿details￿of￿the￿benefits￿provided￿to￿members￿of￿Supervisory￿Board￿upon￿termination,￿see￿Note￿21￿to
our￿consolidated￿financial￿statements.

Approval of Board of Management Decisions

The￿Board￿of￿Management￿requires￿prior￿approval￿of￿the￿General￿Meeting￿of￿Shareholders￿for￿resolutions￿concerning￿an
important￿change￿in￿the￿identity￿or￿character￿of￿ASML￿or￿its￿business,￿including:
• a￿transfer￿of￿all￿or￿substantially￿all￿of￿the￿business￿of￿ASML￿to￿a￿third￿party;
• entering￿into￿or￿the￿termination￿of￿a￿long-term￿material￿joint￿venture￿between￿ASML￿and￿a￿third￿party;￿and
• an￿acquisition￿or￿divestment￿by￿ASML￿of￿an￿interest￿in￿the￿capital￿of￿a￿company￿with￿a￿value￿of￿at￿least￿one-third￿of

ASML’s￿assets￿(determined￿by￿reference￿to￿ASML’s￿most￿recently￿adopted￿Statutory￿Annual￿Report).

Rules of Procedure

The￿Board￿of￿Management￿and￿the￿Supervisory￿Board￿have￿adopted￿Rules￿of￿Procedure￿for￿each￿of￿the￿Board￿of
Management,￿Supervisory￿Board￿and￿the￿four￿Committees￿of￿the￿Supervisory￿Board.￿These￿Rules￿of￿Procedure￿are
posted￿on￿ASML’s￿website.

Directors and Officers Insurance and Indemnification

Members￿of￿the￿Board￿of￿Management￿and￿Supervisory￿Board,￿as￿well￿as￿certain￿senior￿management￿members,
are￿insured￿under￿ASML’s￿Directors￿and￿Officers￿Insurance￿Policy.￿Although￿the￿insurance￿policy￿provides￿for￿a
wide￿coverage,￿our￿directors￿and￿officers￿may￿incur￿uninsured￿liabilities.￿ASML￿has￿agreed￿to￿indemnify￿its￿Board￿of
Management￿and￿Supervisory￿Board￿against￿any￿claims￿arising￿in￿connection￿with￿their￿position￿as￿director￿and￿officer
of￿ASML,￿provided￿that￿such￿claim￿is￿not￿attributable￿to￿willful￿misconduct￿or￿intentional￿recklessness￿of￿such￿officer￿or
director.

Corporate Governance Developments

ASML￿continuously￿monitors￿and￿assesses￿applicable￿corporate￿governance￿rules,￿including￿recommendations￿and
initiatives￿regarding￿principles￿of￿corporate￿governance.￿These￿include￿rules￿that￿have￿been￿promulgated￿in￿the￿United
States￿both￿by￿The￿NASDAQ￿Stock￿Market￿LLC￿("NASDAQ")￿and￿by￿the￿SEC.

The￿Dutch￿Corporate￿Governance￿Code￿came￿into￿effect￿on￿January￿1,￿2004￿and￿was￿amended￿as￿of￿January￿1,￿2009
(the￿"Code").￿Dutch￿listed￿companies￿are￿required￿to￿either￿comply￿with￿the￿principles￿and￿the￿best￿practice￿provisions
of￿the￿Code,￿or￿to￿explain￿on￿which￿points￿they￿deviate￿from￿these￿best￿practice￿provisions￿and￿why.

ASML￿reports￿on￿its￿compliance￿with￿the￿amended￿Code￿in￿its￿Statutory￿Annual￿Report￿for￿the￿year￿ended￿December￿31,
2012.

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Committees of ASML's Supervisory Board

While￿retaining￿overall￿responsibility,￿the￿Supervisory￿Board￿assigns￿certain￿of￿its￿tasks￿to￿its￿four￿committees:￿the￿Audit
Committee,￿the￿Remuneration￿Committee,￿the￿Selection￿and￿Nomination￿Committee￿and￿the￿Technology￿and￿Strategy
Committee.￿Members￿of￿these￿committees￿are￿appointed￿from￿among￿the￿Supervisory￿Board￿members.

The￿chairman￿of￿each￿committee￿reports￿to￿the￿Supervisory￿Board￿verbally￿and￿when￿deemed￿necessary￿in￿writing,￿the
issues￿and￿items￿discussed￿in￿each￿meeting.￿In￿addition,￿the￿minutes￿of￿each￿committee￿are￿available￿to￿all￿members￿of
the￿Supervisory￿Board,￿enabling￿the￿Supervisory￿Board￿to￿make￿the￿appropriate￿decisions.

Audit Committee

ASML's￿Audit￿Committee￿is￿composed￿of￿three￿members￿of￿the￿Supervisory￿Board.￿The￿current￿members￿of￿our￿Audit
Committee￿are￿Fritz￿Fröhlich￿(chairman),￿Arthur￿van￿der￿Poel￿and￿Wolfgang￿Ziebart,￿each￿of￿whom￿is￿an￿independent,
non-executive￿member￿of￿our￿Supervisory￿Board.￿The￿Supervisory￿Board￿has￿determined￿that￿Fritz￿Fröhlich￿qualifies
as￿the￿Audit￿Committee￿financial￿expert￿pursuant￿to￿Section￿407￿of￿the￿Sarbanes-Oxley￿Act￿of￿2002￿and￿the￿rules
promulgated￿thereunder.￿Our￿external￿auditor,￿our￿Chief￿Executive￿Officer,￿our￿Chief￿Financial￿Officer,￿our￿Senior￿Vice
President￿Finance,￿our￿Corporate￿Chief￿Accountant,￿our￿Senior￿Director￿Corporate￿Risk￿and￿Assurance,￿as￿well￿as￿other
ASML￿employees￿invited￿by￿the￿chairman￿of￿the￿Audit￿Committee￿may￿also￿attend￿the￿meetings￿of￿the￿Audit￿Committee.

The￿Audit￿Committee￿assists￿the￿Supervisory￿Board￿in:
• overseeing￿the￿integrity￿of￿our￿financial￿statements￿and￿related￿financial￿and￿non-financial￿disclosures;
• overseeing￿the￿qualifications,￿independence￿and￿performance￿of￿the￿external￿auditor;￿and
• overseeing￿the￿integrity￿of￿our￿systems￿of￿disclosure￿controls￿and￿procedures￿and￿the￿system￿of￿internal￿controls￿over

financial￿reporting.

In￿2012,￿the￿Audit￿Committee￿held￿nine￿scheduled￿meetings,￿either￿in￿person￿or￿via￿conference￿calls.

Remuneration Committee

ASML's￿Remuneration￿Committee￿is￿currently￿composed￿of￿four￿members￿of￿the￿Supervisory￿Board.￿The￿current
members￿of￿our￿Remuneration￿Committee￿are￿Jos￿Westerburgen￿(chairman),￿Ieke￿van￿den￿Burg,￿Pauline￿van￿der￿Meer
Mohr￿and￿Wolfgang￿Ziebart.￿The￿Remuneration￿Committee￿is￿responsible￿for￿the￿preparation￿and￿implementation￿of￿the
remuneration￿policy￿for￿the￿Board￿of￿Management.

The￿Remuneration￿Committee￿prepares￿and￿the￿Supervisory￿Board￿establishes￿ASML’s￿general￿compensation
philosophy￿for￿members￿of￿the￿Board￿of￿Management,￿and￿oversees￿the￿development￿and￿implementation￿of
compensation￿programs￿for￿members￿of￿the￿Board￿of￿Management.￿The￿Remuneration￿Committee￿reviews￿and￿proposes
to￿the￿Supervisory￿Board￿corporate￿goals￿and￿objectives￿relevant￿to￿the￿compensation￿of￿members￿of￿the￿Board￿of
Management.￿The￿Committee￿further￿evaluates￿the￿performance￿of￿members￿of￿the￿Board￿of￿Management￿in￿view￿of
those￿goals￿and￿objectives,￿and￿makes￿recommendations￿to￿the￿Supervisory￿Board￿on￿the￿compensation￿levels￿of￿the
members￿of￿the￿Board￿of￿Management￿based￿on￿this￿evaluation.

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,￿the
desired￿levels￿of￿and￿emphasis￿on￿particular￿aspects￿of￿ASML’s￿short￿and￿long-term￿performance,￿as￿well￿as￿current
compensation￿and￿benefits￿structures￿and￿levels￿benchmarked￿against￿relevant￿peers.￿External￿compensation￿survey
data￿and,￿where￿necessary,￿external￿consultants￿are￿used￿to￿benchmark￿ASML’s￿remuneration￿levels￿and￿structures.

In￿2012,￿the￿Remuneration￿Committee￿held￿seven￿scheduled￿meetings￿and￿several￿ad￿hoc￿meetings,￿either￿in￿person￿or
via￿conference￿call.

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Selection and Nomination Committee

ASML's￿Selection￿and￿Nomination￿Committee￿is￿composed￿of￿three￿members￿of￿the￿Supervisory￿Board.￿The￿current
members￿of￿our￿Selection￿and￿Nomination￿Committee￿are￿Jos￿Westerburgen￿(chairman),￿Arthur￿van￿der￿Poel￿and￿OB
Bilous.

￿The￿Selection￿and￿Nomination￿Committee￿assists￿the￿Supervisory￿Board￿in:
• preparing￿the￿selection￿criteria￿and￿appointment￿procedures￿for￿members￿of￿ASML's￿Supervisory￿Board￿and￿Board￿of

Management;

• periodically￿evaluating￿the￿scope￿and￿composition￿of￿the￿Board￿of￿Management￿and￿the￿Supervisory￿Board,￿and

proposing￿the￿profile￿of￿the￿Supervisory￿Board￿in￿relation￿thereto;

• periodically￿evaluating￿the￿functioning￿of￿the￿Board￿of￿Management￿and￿the￿Supervisory￿Board￿and￿the￿individual

members￿of￿those￿boards￿and￿reporting￿the￿results￿thereof￿to￿the￿Supervisory￿Board;￿and

• proposing￿(re-)appointments￿of￿members￿of￿the￿Board￿of￿Management￿and￿the￿Supervisory￿Board,￿and￿supervising
the￿policy￿of￿the￿Board￿of￿Management￿in￿relation￿to￿the￿selection￿and￿appointment￿criteria￿for￿senior￿management.

In￿2012,￿the￿Selection￿and￿Nomination￿Committee￿held￿four￿scheduled￿meetings￿and￿several￿ad￿hoc￿meetings,￿either￿in
person￿or￿by￿conference￿call.

Technology and Strategy Committee

ASML's￿Technology￿and￿Strategy￿Committee￿is￿composed￿of￿four￿members￿of￿the￿Supervisory￿Board.￿The￿current
members￿of￿our￿Technology￿and￿Strategy￿Committee￿are￿William￿Siegle￿(chairman),￿Arthur￿van￿der￿Poel,￿OB￿Bilous￿and
Wolfgang￿Ziebart.￿In￿addition,￿the￿Technology￿and￿Strategy￿Committee￿may￿appoint￿one￿or￿more￿advisors￿from￿within
and/or￿from￿outside￿ASML.￿The￿advisors￿to￿the￿Technology￿and￿Strategy￿Committee￿may￿be￿invited￿as￿guests￿to￿the
meetings,￿or￿parts￿thereof,￿of￿the￿Committee,￿but￿are￿not￿entitled￿to￿vote￿in￿the￿meetings.

The￿Technology￿and￿Strategy￿Committee￿assists￿the￿Supervisory￿Board￿in￿relation￿to￿the￿following￿responsibilities￿and
may￿prepare￿resolutions￿of￿the￿Supervisory￿Board￿related￿thereto:

•

familiarization￿with￿and￿risk￿assessment￿and￿study￿of￿potential￿strategies,￿required￿technical￿resources,￿technology
roadmaps￿and￿product￿roadmaps;￿and

• providing￿advice￿to￿the￿Supervisory￿Board￿with￿respect￿to￿matters￿related￿thereto.

￿In￿2012,￿the￿Technology￿and￿Strategy￿Committee￿held￿five￿meetings,￿either￿in￿person￿or￿by￿conference￿call.

Disclosure Committee

ASML￿has￿a￿Disclosure￿Committee￿to￿ensure￿compliance￿with￿applicable￿disclosure￿requirements￿arising￿under￿US￿and
Dutch￿law￿and￿applicable￿stock￿exchange￿rules.￿The￿Disclosure￿Committee￿is￿composed￿of￿various￿members￿of￿senior
management,￿and￿reports￿to￿the￿Chief￿Executive￿Officer￿and￿Chief￿Financial￿Officer.￿The￿Disclosure￿Committee￿informs
the￿Audit￿Committee￿about￿the￿outcome￿of￿the￿Disclosure￿Committee￿meetings.￿Furthermore,￿members￿of￿the￿Disclosure
Committee￿are￿in￿close￿contact￿with￿our￿external￿legal￿counsel￿and￿our￿external￿auditor.

The￿Disclosure￿Committee￿gathers￿all￿relevant￿financial￿and￿non-financial￿information￿and￿assesses￿materiality,
timeliness￿and￿necessity￿for￿disclosure￿of￿such￿information.￿In￿addition￿the￿Disclosure￿Committee￿assists￿the￿Chief
Executive￿Officer￿and￿Chief￿Financial￿Officer￿in￿the￿maintenance￿and￿evaluation￿of￿disclosure￿controls￿and￿procedures.

During￿2012,￿the￿Disclosure￿Committee￿reviewed￿the￿quarterly￿financial￿result￿announcements,￿Statutory￿Interim￿Report,
the￿Annual￿Report￿on￿Form￿20-F￿and￿the￿Statutory￿Annual￿Report,￿the￿Form￿F-4￿registration￿filed￿with￿the￿SEC￿in
connection￿with￿our￿merger￿agreement￿with￿Cymer￿and￿the￿prospectus￿filed￿with￿the￿Dutch￿AFM￿in￿connection￿with
the￿shares￿issued￿to￿participating￿customers￿in￿our￿Customer￿Co-Investment￿Program￿both￿including￿the￿audited
consolidated￿financial￿statements￿and￿other￿public￿announcements￿containing￿financial￿information.￿They￿also￿advise￿the
Chief￿Executive￿Officer￿and￿Chief￿Financial￿Officer￿on￿the￿assessment￿of￿ASML's￿disclosure￿controls￿and￿procedures￿and
on￿the￿assessment￿of￿ASML’s￿internal￿controls￿over￿financial￿reporting.

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46

D. Employees
The￿following￿table￿presents￿our￿total￿numbers￿of￿payroll￿employees￿and￿temporary￿employees￿as￿of￿December￿31,
2012,￿2011￿and￿2010￿(in￿FTEs),￿primarily￿in￿manufacturing,￿product￿development￿and￿customer￿support￿activities:

As of December 31
Payroll￿Employees
Temporary￿Employees
Employees (in FTEs)

2012
8,497
2,139
10,636

2011
7,955
1,935
9,890

2010
7,184
2,061
9,245

During￿2012,￿the￿average￿number￿of￿payroll￿employees￿in￿FTEs￿employed￿was￿8,140,￿and￿the￿average￿number￿of
temporary￿employees￿in￿FTE's￿employed￿was￿1,934.

For￿a￿more￿detailed￿description￿of￿payroll￿employee￿information,￿including￿a￿breakdown￿of￿our￿employees￿in￿FTEs
by￿sector,￿see￿Notes￿17￿and￿22￿to￿our￿consolidated￿financial￿statements.￿We￿rely￿on￿our￿ability￿to￿vary￿the￿number￿of
temporary￿employees￿to￿respond￿to￿fluctuating￿market￿demand￿for￿our￿products.

Our￿future￿success￿will￿depend￿on￿our￿ability￿to￿attract,￿train,￿retain￿and￿motivate￿highly￿qualified,￿skilled￿and￿educated
employees,￿who￿are￿in￿great￿demand.￿We￿are￿particularly￿reliant￿for￿our￿continued￿success￿on￿the￿services￿of￿several
key￿employees,￿including￿a￿number￿of￿systems￿development￿specialists￿with￿advanced￿university￿qualifications￿in
engineering,￿optics￿and￿computing.￿See￿Item￿3.D.￿"Risk￿Factors,￿Our￿Business￿and￿Future￿Success￿Depend￿on￿Our
Ability￿to￿Attract￿and￿Retain￿a￿Sufficient￿Number￿of￿Adequately￿Educated￿and￿Skilled￿Employees."

ASML￿Netherlands￿B.V.,￿our￿operating￿subsidiary￿in￿the￿Netherlands,￿has￿a￿Works￿Council,￿as￿required￿by￿Dutch
law.￿A￿Works￿Council￿is￿a￿representative￿body￿of￿the￿employees￿of￿a￿Dutch￿company￿elected￿by￿the￿employees.￿The
Board￿of￿Management￿of￿any￿Dutch￿company￿that￿runs￿an￿enterprise￿with￿a￿Works￿Council￿must￿seek￿the￿non-binding
advice￿of￿the￿Works￿Council￿before￿taking￿certain￿decisions￿with￿respect￿to￿ASML,￿such￿as￿those￿related￿to￿a￿major
restructuring,￿a￿change￿of￿control,￿or￿the￿appointment￿or￿dismissal￿of￿a￿member￿of￿the￿Board￿of￿Management.￿In￿case
the￿Works￿Council￿renders￿a￿contrary￿advice￿on￿a￿particular￿decision￿and￿the￿Board￿of￿Management￿nonetheless￿wishes
to￿proceed,￿the￿Board￿of￿Management￿must￿temporarily￿suspend￿any￿further￿action￿while￿the￿Works￿Council￿determines
whether￿to￿appeal￿to￿the￿Enterprise￿Chamber￿of￿the￿Amsterdam￿Court￿of￿Appeal.￿Other￿decisions￿directly￿involving
employment￿matters￿that￿apply￿either￿to￿all￿employees,￿or￿certain￿groups￿of￿employees,￿may￿only￿be￿taken￿with￿the
Works￿Council’s￿approval.￿Failing￿approval￿of￿the￿Works￿Council,￿the￿decision￿first￿has￿to￿be￿submitted￿to￿the￿Enterprise
Chamber￿for￿mediation.￿If￿no￿resolution￿has￿been￿reached,￿the￿decision￿can￿only￿be￿taken￿by￿with￿the￿approval￿of￿the
Dutch￿District￿Court.

E. Share Ownership
Information￿with￿respect￿to￿share￿ownership￿of￿members￿of￿our￿Supervisory￿Board￿and￿Board￿of￿Management￿is
included￿in￿Item￿7A￿"Major￿Shareholders"￿and￿Note￿21￿to￿our￿consolidated￿financial￿statements.￿Information￿with￿respect
to￿the￿grant￿of￿shares￿and￿stock￿options￿to￿employees￿is￿included￿in￿Note￿17￿to￿our￿consolidated￿financial￿statements.

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47

Item 7 Major Shareholders and Related Party Transactions

A. Major Shareholders
The￿following￿table￿sets￿forth￿the￿total￿number￿of￿ordinary￿shares￿owned￿by￿each￿shareholder￿whose￿beneficial
ownership￿of￿ordinary￿shares￿is￿at￿least￿5.0￿percent￿of￿the￿ordinary￿shares￿issued￿and￿outstanding,￿as￿well￿as￿the
ordinary￿shares￿(including￿options)￿owned￿by￿members￿of￿the￿Board￿of￿Management￿(which￿includes￿those￿persons
specified￿in￿Item￿6￿"Directors,￿Senior￿Management￿and￿Employees"),￿as￿a￿group,￿as￿of￿December￿31,￿2012.￿The
information￿set￿out￿below￿is￿solely￿based￿on￿public￿filings￿with￿the￿SEC￿and￿AFM￿(Autoriteit Financiële Markten; the
Netherlands￿Authority￿for￿the￿Financial￿Markets)￿as￿through￿February￿6,￿2013.

Identity of Person or Group
Capital￿Group￿International,￿Inc1
FMR￿LLC2
Stichting￿Administratiekantoor￿MAKTSJAB/Intel3
Stichting￿Administratiekantoor￿TSMC/TSMC3
BlackRock￿Inc4
Members￿of￿ASML’s￿Board￿of￿Management,￿as￿a￿group￿(5￿persons)5,6

Shares
Owned
51,453,097
36,311,008
62,977,877
20,992,625
22,878,489
101,657

Percent of
Class7
12.64%
8.92%
15.47%
5.16%
5.62%
0.02%

1 As￿reported￿to￿the￿Dutch￿Authority￿for￿the￿Financial￿Markets￿on￿September￿3,￿2012,￿Capital￿Group￿International,￿Inc.￿has￿voting￿rights￿related￿to

51,453,097￿shares￿of￿our￿ordinary￿shares￿but￿does￿not￿have￿ownership￿rights￿related￿to￿those￿shares.￿In￿addition,￿Capital￿Research￿&￿Management
Company￿("CRMC"),￿which￿we￿believe￿to￿be￿an￿affiliate￿of￿Capital￿Group￿International,￿Inc.,￿reported￿to￿the￿Dutch￿Authority￿for￿the￿Financial￿Markets
on￿August￿2,￿2011,￿that￿it￿holds￿voting￿rights￿related￿to￿44,579,832￿shares￿of￿our￿ordinary￿shares.￿Capital￿World￿Investors￿reported￿on￿a￿Schedule
13-G/A￿filed￿with￿the￿Commission￿on￿February￿10,￿2012￿that￿it￿is￿the￿beneficial￿owner￿of￿41,253,546￿shares￿of￿our￿ordinary￿shares￿as￿a￿result￿of￿its
affiliation￿with￿CRMC.

2 Based￿solely￿on￿the￿Schedule￿13-G/A￿filed￿by￿FMR￿LLC￿with￿the￿Commission￿on￿February￿14,￿2012.
3 Stichting￿Administratiekantoor￿MAKTSJAB￿and￿Stichting￿Administratiekantoor￿TSMC￿own￿the￿stated￿percentage￿of￿ordinary￿shares￿and￿have

simultaneously￿issued￿corresponding￿depository￿receipts￿to￿Intel￿respectively￿TSMC.

4 Based￿solely￿on￿the￿Schedule￿13G￿filed￿by￿BlackRock￿Inc.￿with￿the￿Commission￿on￿January￿30,￿2013.
5 Does￿not￿include￿unvested￿shares￿and￿shares￿underlying￿options￿granted￿to￿members￿of￿ASML's￿Board￿of￿Management.￿For￿further￿information,￿please

refer￿to￿Note￿21￿to￿our￿consolidated￿financial￿statements.
6 No￿shares￿are￿owned￿by￿members￿of￿the￿Supervisory￿Board.
7 As￿a￿percentage￿of￿the￿total￿number￿of￿shares￿outstanding￿(407,165,221)￿as￿of￿December￿31,￿2012.

The￿Synthetic￿Share￿Buyback￿completed￿in￿November￿2012￿resulted￿in￿a￿reduction￿of￿the￿number￿of￿shares￿held￿by￿all￿of
our￿shareholders￿(through￿a￿100￿for￿77￿share￿exchange)￿other￿than￿the￿customers￿who￿participated￿in￿our￿Customer￿Co-
Investment￿Program￿(Intel,￿TSMC￿and￿Samsung).

Stichting￿Administratiekantoor￿MAKTSJAB￿(the￿"Intel￿Stichting")￿and￿Stichting￿Administratiekantoor￿TSMC￿(the￿"TSMC
Stichting"),￿(together￿referred￿to￿as￿the￿"Customer￿Stichtingen"￿and￿each￿a￿"Customer￿Stichting")￿acquired￿the￿shares
indicated￿above￿as￿part￿of￿our￿Customer￿Co-Investment￿Program￿in￿the￿second￿half￿of￿2012.￿The￿Customer￿Stichtingen
do￿not￿vote￿on￿the￿ordinary￿shares￿held￿by￿them,￿unless￿instructed￿to￿do￿so￿by￿Intel￿and￿TSMC￿in￿accordance￿with
their￿respective￿shareholders￿agreements.￿Intel￿and￿TSMC,￿are￿not￿entitled￿to￿vote￿on￿the￿listing￿shares￿held￿by￿the
Customer￿Stichtingen,￿except￿in￿certain￿exceptional￿circumstances,￿including￿the￿authorization￿of￿certain￿significant
share￿issuances￿and￿share￿repurchases,￿any￿amendment￿to￿the￿Articles￿of￿Association￿that￿would￿materially￿affect￿the
specific￿voting￿rights￿of￿Intel￿or￿TSMC￿or￿any￿significant￿change￿in￿the￿identity￿or￿nature￿of￿ASML￿or￿its￿business,￿the
dissolution￿of￿ASML,￿and￿any￿merger￿or￿demerger￿which￿would￿result￿in￿a￿material￿change￿in￿the￿identity￿or￿nature￿of
ASML￿or￿its￿business￿(see￿Item￿10.C.￿"Material￿Contracts,￿Customer￿Co-Investment￿Program").

We￿do￿not￿issue￿share￿certificates,￿except￿for￿registered￿New￿York￿Shares.￿For￿more￿information￿see￿Item￿10.B.
"Memorandum￿and￿Articles￿of￿Association".

As￿of￿December￿31,￿2012,￿72,689,511￿million￿ordinary￿shares￿were￿held￿by￿323￿registered￿holders￿with￿a￿registered
address￿in￿the￿United￿States.￿Since￿certain￿of￿our￿ordinary￿shares￿were￿held￿by￿brokers￿and￿nominees,￿the￿number
of￿record￿holders￿in￿the￿United￿States￿may￿not￿be￿representative￿of￿the￿number￿of￿beneficial￿holders￿or￿of￿where￿the
beneficial￿holders￿are￿resident.

Obligations￿of￿Shareholders￿to￿Disclose￿Holdings￿under￿Dutch￿Law
Holders￿of￿our￿shares￿may￿be￿subject￿to￿reporting￿obligations￿under￿the￿Dutch￿Financial￿Markets￿Supervision￿Act￿￿(Wet
op het financieel toezicht, the￿"Act").

The￿disclosure￿obligations￿under￿the￿Act￿apply￿to￿any￿person￿or￿entity￿that￿acquires,￿holds￿or￿disposes￿of￿an￿interest￿in
the￿voting￿rights￿and/or￿the￿capital￿of￿a￿public￿limited￿company￿incorporated￿under￿the￿laws￿of￿the￿Netherlands￿whose
shares￿are￿admitted￿to￿trading￿on￿a￿regulated￿market￿within￿the￿European￿Union,￿such￿as￿ASML.￿Disclosure￿is￿required
when￿the￿percentage￿of￿voting￿rights￿or￿capital￿interest￿of￿a￿person￿or￿an￿entity￿reaches,￿exceeds￿or￿falls￿below￿5.0,
10.0,￿15.0,￿20.0,￿25.0,￿30.0,￿40.0,￿50.0,￿60.0,￿75.0￿or￿95.0￿percent￿(as￿a￿result￿of￿an￿acquisition￿or￿disposal￿by￿such

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48

 
person,￿or￿as￿a￿result￿of￿a￿change￿in￿our￿total￿number￿of￿voting￿rights￿or￿capital￿issued).￿With￿respect￿to￿ASML,￿the￿Act
requires￿any￿person￿or￿entity￿whose￿interest￿in￿the￿voting￿rights￿and/or￿capital￿of￿ASML￿reached,￿exceeded￿or￿fell￿below
those￿percentage￿interests￿to￿notify￿the￿AFM￿immediately.

A￿legislative￿proposal￿pursuant￿to￿which￿an￿initial￿threshold￿of￿3.0￿percent￿will￿be￿introduced￿has￿been￿adopted￿and
is￿currently￿expected￿to￿enter￿into￿force￿on￿July￿1,￿2013.￿The￿proposal￿would￿also￿introduce￿a￿mechanism￿pursuant￿to
which￿ASML￿would￿be￿able￿to￿identify,￿and￿communicate￿with,￿beneficial￿holders￿of￿its￿shares￿through￿the￿respective
custodians.￿ASML￿is￿required￿to￿notify￿the￿AFM￿immediately￿if￿our￿voting￿rights￿and/or￿capital￿have￿changed￿by￿1.0
percent￿or￿more￿since￿its￿previous￿notification￿on￿outstanding￿voting￿rights￿and￿capital.￿In￿addition,￿ASML￿must￿notify
the￿AFM￿of￿changes￿of￿less￿than￿1.0￿percent￿in￿ASML's￿outstanding￿voting￿rights￿and￿capital￿at￿least￿once￿per￿calendar
quarter,￿within￿eight￿days￿after￿the￿end￿of￿the￿quarter.￿Any￿person￿whose￿direct￿or￿indirect￿voting￿rights￿and/or￿capital
interest￿meets￿or￿passes￿the￿thresholds￿referred￿to￿in￿the￿previous￿paragraph￿as￿a￿result￿of￿a￿change￿in￿the￿outstanding
voting￿rights￿or￿capital￿must￿notify￿the￿AFM￿no￿later￿than￿the￿fourth￿trading￿day￿after￿the￿AFM￿has￿published￿such￿a
change.

Once￿every￿calendar￿year,￿within￿four￿weeks￿after￿the￿end￿of￿the￿calendar￿year,￿holders￿of￿an￿interest￿of￿5.0￿percent￿or
more￿in￿ASML's￿voting￿rights￿or￿capital￿must￿notify￿the￿AFM￿of￿any￿changes￿in￿the￿composition￿of￿their￿interest￿resulting
from￿certain￿acts￿(including,￿but￿not￿limited￿to,￿the￿exchange￿of￿shares￿for￿depositary￿receipts￿and￿vice￿versa,￿and￿the
exercise￿of￿rights￿to￿acquire￿shares).

Subsidiaries,￿as￿defined￿in￿the￿Act,￿do￿not￿have￿independent￿reporting￿obligations￿under￿the￿Act,￿as￿interests￿held￿by
them￿are￿attributed￿to￿their￿(ultimate)￿parents.￿Any￿person￿may￿qualify￿as￿a￿parent￿for￿purposes￿of￿the￿Act,￿including
an￿individual.￿A￿person￿who￿ceases￿to￿be￿a￿subsidiary￿and￿who￿disposes￿of￿an￿interest￿of￿5.0￿percent￿or￿more￿in￿ASML's
voting￿rights￿or￿capital￿must￿immediately￿notify￿the￿AFM.￿As￿of￿that￿moment,￿all￿notification￿obligations￿under￿the￿Act
become￿applicable￿to￿the￿former￿subsidiary.

For￿the￿purpose￿of￿calculating￿the￿percentage￿of￿capital￿interest￿or￿voting￿rights,￿the￿following￿interests￿must,￿among
other￿arrangements,￿be￿taken￿into￿account:￿shares￿and￿votes￿(i)￿directly￿held￿by￿any￿person,￿(ii)￿held￿by￿such￿person’s
subsidiaries,￿(iii)￿held￿by￿a￿third￿party￿for￿such￿person’s￿account,￿(iv)￿held￿by￿a￿third￿party￿with￿whom￿such￿person￿has
concluded￿an￿oral￿or￿written￿voting￿agreement￿(including￿on￿the￿basis￿of￿an￿unrestricted￿power￿of￿attorney)￿and￿(v)￿held
by￿a￿third￿party￿with￿whom￿such￿person￿has￿agreed￿to￿temporarily￿transfer￿voting￿rights￿against￿payment.￿Interests￿held
jointly￿by￿multiple￿persons￿are￿attributed￿to￿those￿persons￿in￿accordance￿with￿their￿entitlement.￿A￿holder￿of￿a￿pledge
or￿right￿of￿usufruct￿in￿respect￿of￿shares￿can￿also￿be￿subject￿to￿these￿reporting￿obligations￿if￿such￿person￿has,￿or￿can
acquire,￿the￿right￿to￿vote￿on￿the￿shares￿or,￿in￿case￿of￿depositary￿receipts,￿the￿underlying￿shares.￿The￿managers￿of￿certain
investment￿funds￿are￿deemed￿to￿hold￿the￿capital￿interests￿and￿voting￿rights￿in￿the￿funds￿managed￿by￿them.

For￿the￿same￿purpose,￿the￿following￿instruments￿qualify￿as￿"shares":￿(i)￿shares,￿(ii)￿depositary￿receipts￿for￿shares￿(or
negotiable￿instruments￿similar￿to￿such￿receipts),￿(iii)￿negotiable￿instruments￿for￿acquiring￿the￿instruments￿under￿(i)￿or￿(ii)
(such￿as￿convertible￿bonds),￿and￿(iv)￿options￿for￿acquiring￿the￿instruments￿under￿(i)￿or￿(ii).

The￿AFM￿keeps￿a￿public￿registry￿of￿and￿publishes￿all￿notifications￿made￿pursuant￿to￿the￿Act.

Non-compliance￿with￿the￿reporting￿obligations￿under￿the￿Act￿could￿lead￿to￿criminal￿fines,￿administrative￿fines,
imprisonment￿or￿other￿sanctions.￿In￿addition,￿non-compliance￿with￿the￿reporting￿obligations￿under￿the￿Act￿may￿lead￿to
civil￿sanctions,￿including￿(i)￿suspension￿of￿the￿voting￿rights￿relating￿to￿the￿shares￿held￿by￿the￿offender,￿for￿a￿period￿of￿not
more￿than￿three￿years,￿(ii)￿nullification￿of￿any￿resolution￿of￿our￿General￿Meeting￿of￿Shareholders￿to￿the￿extent￿that￿such
resolution￿would￿not￿have￿been￿approved￿if￿the￿votes￿at￿the￿disposal￿of￿the￿person￿or￿entity￿in￿violation￿of￿a￿duty￿under
the￿Act￿had￿not￿been￿exercised￿and￿(iii)￿a￿prohibition￿on￿the￿acquisition￿by￿the￿offender￿of￿our￿shares￿or￿the￿voting￿on￿our
ordinary￿shares￿for￿a￿period￿of￿not￿more￿than￿five￿years.

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B. Related Party Transactions
Loan Agreement With PSV N.V.

Consistent￿with￿ASML's￿corporate￿responsibilities￿to￿its￿surrounding￿community￿and￿together￿with￿several￿other
companies￿in￿the￿region,￿in￿prior￿year￿ASML￿entered￿into￿a￿loan￿agreement￿with￿a￿local￿sports￿club￿PSV￿N.V.,￿pursuant￿to
which￿ASML￿provided￿PSV￿N.V.,￿as￿of￿August￿1,￿2011,￿a￿14￿year,￿interest￿free,￿subordinated￿loan￿of￿EUR￿5.0￿million.￿As
of￿June￿30,￿2012￿the￿chairman￿of￿the￿Supervisory￿Board￿of￿ASML,￿Mr.￿Arthur￿van￿der￿Poel,￿and￿Chief￿Financial￿Officer￿of
ASML,￿Mr.￿Peter￿Wennink,￿resigned￿as￿members￿of￿the￿Supervisory￿Board￿of￿PSV￿N.V.￿Therefore￿the￿loan￿agreement￿with
PSV￿N.V.￿is￿concluded￿to￿no￿longer￿classify￿as￿a￿related￿party￿transaction￿from￿that￿date￿onwards.

Intel Agreements

On￿July￿9,￿2012,￿we￿announced￿our￿Customer￿Co-Investment￿Program￿to￿accelerate￿our￿development￿of￿EUV￿technology
beyond￿the￿current￿generation￿and￿our￿development￿of￿future￿450mm￿silicon￿wafer￿technology.￿The￿participating
collectively￿agreed￿to￿fund￿EUR￿1.38￿billion￿of￿our￿research￿and￿development￿projects￿from￿2013￿through￿2017.￿This
program￿creates￿risk￿sharing￿with￿some￿of￿our￿largest￿customers￿while￿the￿results￿of￿ASML’s￿development￿programs￿will
be￿available￿to￿every￿semiconductor￿manufacturer￿with￿no￿restrictions.￿The￿R&D￿funding￿program￿in￿the￿Customer￿Co-
Investment￿Program￿consists￿of￿two￿funding￿projects:￿a￿450mm￿technology￿development￿project￿and￿a￿next-generation
EUV￿development￿project.￿ASML￿has￿entered￿into￿Non￿Recurring￿Engineering￿("NRE")￿funding￿agreements￿with￿the
participating￿customers.

In￿addition￿to￿the￿funding￿commitments￿described￿above,￿the￿participating￿customers￿have￿invested￿in￿ordinary￿shares
equal,￿in￿aggregate,￿to￿23￿percent￿of￿ASML's￿issued￿share￿capital￿(calculated￿giving￿effect￿to￿our￿Synthetic￿Share
Buyback￿in￿November￿2012).￿The￿proceeds￿of￿the￿share￿issuance,￿EUR￿3.85￿billion,￿were￿returned￿to￿the￿holders￿of
ordinary￿shares￿(excluding￿the￿participating￿customers)￿through￿a￿Synthetic￿Share￿Buyback￿executed￿in￿November
2012.￿For￿further￿information￿regarding￿the￿Synthetic￿Share￿Buyback,￿see￿Note￿26￿to￿our￿consolidated￿financial
statements.

Investment Agreement:￿Pursuant￿to￿the￿investment￿agreement￿between￿ASML￿and￿Intel,￿dated￿July￿9,￿2012￿("the￿Intel
Investment￿Agreement"),￿ASML￿agreed￿to￿issue￿to￿a￿foundation￿established￿for￿Intel￿(the￿“Intel￿Stichting”)￿ordinary
shares￿equal￿to￿15￿percent￿of￿ASML’s￿issued￿ordinary￿shares;￿the￿Intel￿Stichting￿issued￿to￿Intel￿depositary￿receipts
representing￿the￿ordinary￿shares.￿The￿subscription￿price￿for￿the￿ordinary￿shares￿issued￿to￿Intel￿was￿EUR￿39.91￿per
ordinary￿share,￿which￿is￿the￿average￿of￿the￿volume￿weighted￿average￿price￿of￿the￿ordinary￿shares￿on￿NYSE￿Euronext
Amsterdam￿for￿the￿twenty￿trading￿days￿up￿to￿and￿including￿July￿6,￿2012.￿Under￿the￿Intel￿Investment￿Agreement,￿ASML
has￿agreed￿to￿indemnify￿Intel,￿and￿its￿affiliates￿for￿certain￿losses￿and￿expenses￿related￿to￿breaches￿of￿representations,
warranties,￿covenants￿and￿agreements￿in￿the￿Investment￿Agreements￿and￿with￿respect￿to￿certain￿legal￿proceedings
related￿thereto,￿subject￿to￿certain￿limitations.

Shareholder Agreement:￿In￿connection￿with￿the￿issuance￿of￿shares￿pursuant￿to￿the￿Intel￿Investment￿Agreement,￿on
September￿12,￿2012￿ASML,￿Intel￿and￿the￿Intel￿Stichting￿entered￿into￿a￿shareholder￿agreement￿(the￿“Shareholder
Agreement”)￿which￿governs￿certain￿matters￿relating￿to￿the￿holding￿of￿and￿further￿investment￿by￿Intel￿in￿ordinary￿shares￿of
ASML,￿directly￿and￿indirectly￿through￿the￿Intel￿Stichting.

NRE Funding Agreement:￿On￿July￿9,￿2012,￿ASML￿and￿Intel￿entered￿into￿two￿NRE￿funding￿agreements￿pursuant￿to
which￿Intel￿has￿agreed￿to￿fund￿certain￿of￿ASML’s￿R&D￿costs￿and￿project￿expenditures.￿One￿agreement￿relates￿to￿the
development￿of￿450mm￿lithography￿equipment￿(the￿"Intel￿450mm￿NRE￿Funding￿Agreement"￿)￿and￿the￿other￿agreement
relates￿to￿the￿development￿of￿EUV￿lithography￿equipment￿(the￿"Intel￿EUV￿NRE￿Funding￿Agreement").￿Intel￿has￿committed
to￿provide￿funding￿in￿an￿aggregate￿amount￿of￿EUR￿553￿million￿under￿the￿Intel￿450mm￿NRE￿Funding￿Agreement￿and
funding￿in￿an￿aggregate￿amount￿of￿EUR￿276￿million￿under￿the￿Intel￿EUV￿NRE￿Funding￿Agreement,￿payable￿over￿the
term￿of￿the￿relevant￿agreements￿(2013-2017).￿Under￿the￿agreements,￿ASML￿retains￿sole￿control￿over￿the￿development
of￿450mm￿photo￿lithography￿equipment￿and￿EUV￿platforms￿and￿will￿own￿all￿intellectual￿property￿created￿by￿ASML
in￿connection￿therewith.￿The￿NRE￿funding￿agreements￿provide￿that￿if￿ASML,￿in￿its￿reasonable￿discretion,￿determines
to￿abandon￿either￿the￿450mm￿or￿EUV￿development￿project,￿as￿a￿result￿of￿technical￿infeasibility￿or￿lack￿of￿sufficient
industry￿demand,￿or￿if￿the￿then￿remaining￿funding￿exceeds￿the￿expenditure￿estimate￿for￿the￿development￿project￿(450mm
or￿EUV),￿then￿the￿parties￿may￿agree￿on￿an￿alternative￿development￿project.￿If￿no￿alternative￿is￿agreed,￿ASML￿may
invoice￿Intel￿for￿the￿remaining￿due￿portion￿of￿committed￿funding￿during￿each￿year￿of￿the￿remaining￿funding￿period￿in
which￿ASML's￿actual￿gross￿R&D￿expenditures￿exceed￿a￿minimum￿threshold￿specified￿in￿the￿relevant￿Intel￿NRE￿Funding
Agreement.￿The￿NRE￿funding￿agreements￿will￿terminate￿on￿December￿31,￿2017￿or￿upon￿pre-payment￿by￿Intel￿of￿the
aggregate￿amount￿of￿funding￿owed￿under￿the￿Intel￿NRE￿Funding￿Agreements.

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Commercial Agreement:￿On￿July￿9,￿2012,￿ASML￿and￿Intel￿entered￿into￿the￿Commercial￿Agreement,￿pursuant￿to￿which
ASML￿and￿Intel￿established￿a￿contractual￿framework￿for￿Intel￿to￿purchase￿equipment￿related￿to￿the￿450mm￿and￿next-
generation￿EUV￿lithography￿equipment.￿Under￿this￿agreement,￿Intel￿has￿committed￿to￿purchase￿specified￿numbers
of￿450mm￿and￿next-generation￿EUV￿tools.￿The￿agreement￿sets￿forth￿pricing￿terms￿for￿the￿tools￿as￿well￿as￿milestones
related￿to￿product￿deliveries,￿and￿provides￿for￿certain￿commercial￿discounts￿in￿the￿form￿of￿credits￿in￿exchange￿for￿Intel’s
early￿purchase￿commitments￿and￿volume￿purchase￿commitments￿and￿for￿specified￿additional￿credits￿in￿the￿event￿that
certain￿schedules￿are￿not￿met.￿In￿addition,￿subject￿to￿certain￿conditions,￿ASML￿has￿agreed￿to￿install￿sufficient￿capacity
to￿meet￿Intel’s￿forecasted￿450mm￿lithography￿equipment￿needs￿through￿2022.

Please￿see￿Item￿10.C￿“Material￿Contracts,￿Customer￿Co-Investment￿Program”￿and￿Note￿28￿to￿our￿consolidated￿financial
statements￿for￿more￿information￿about￿the￿Customer￿Co-Investment￿Program.

There￿have￿been￿no￿other￿transactions￿during￿our￿most￿recent￿fiscal￿year,￿and￿there￿are￿currently￿no￿transactions,
between￿ASML￿or￿any￿of￿its￿subsidiaries,￿and￿any￿significant￿shareholder￿and￿any￿director￿or￿officer￿or￿any￿relative￿or
spouse￿thereof￿other￿than￿ordinary￿course￿compensation￿arrangements.￿During￿our￿most￿recent￿fiscal￿year,￿there￿has
been￿no,￿and￿at￿present￿there￿is￿no,￿outstanding￿indebtedness￿to￿ASML￿owed￿or￿owing￿by￿any￿director￿or￿officer￿of
ASML￿or￿any￿associate￿thereof,￿other￿than￿the￿virtual￿financing￿arrangement￿with￿respect￿to￿shares￿and￿stock￿options
described￿under￿Notes￿17￿and￿21￿to￿our￿consolidated￿financial￿statements.

C. Interests of Experts & Counsel
Not￿applicable.

Item 8 Financial Information

A. Consolidated Statements and Other Financial Information
Consolidated￿Statements
See￿Item￿18￿"Financial￿Statements".

Export￿Sales
See￿Note￿20￿to￿our￿consolidated￿financial￿statements.

Legal￿Proceedings
See￿Item￿4.B.￿"Business￿Overview,￿Intellectual￿Property"￿and￿Note￿18￿to￿our￿consolidated￿financial￿statements.

Dividend￿Policy
As￿part￿of￿our￿financing￿policy,￿we￿aim￿to￿pay￿an￿annual￿dividend￿that￿will￿be￿stable￿or￿growing￿over￿time.￿Annually,￿the
Board￿of￿Management￿will,￿upon￿prior￿approval￿from￿the￿Supervisory￿Board,￿submit￿a￿proposal￿to￿the￿AGM￿with￿respect
to￿the￿amount￿of￿dividend￿to￿be￿declared￿with￿respect￿to￿the￿prior￿year.￿The￿dividend￿proposal￿in￿any￿given￿year￿will￿be
subject￿to￿the￿availability￿of￿distributable￿profits￿or￿retained￿earnings￿and￿may￿be￿affected￿by,￿among￿other￿factors,￿the
Board￿of￿Management's￿views￿on￿our￿potential￿future￿liquidity￿requirements,￿including￿for￿investments￿in￿production
capacity,￿the￿funding￿of￿our￿research￿and￿development￿programs￿and￿for￿acquisition￿opportunities￿that￿may￿arise￿from
time￿to￿time;￿and￿by￿future￿changes￿in￿applicable￿income￿tax￿and￿corporate￿laws.￿Accordingly,￿it￿may￿be￿decided￿to
propose￿not￿to￿pay￿a￿dividend￿or￿to￿pay￿a￿lower￿dividend￿with￿respect￿to￿any￿particular￿year￿in￿the￿future.

For￿2012,￿a￿proposal￿to￿declare￿a￿dividend￿of￿EUR￿0.53￿per￿ordinary￿share￿of￿EUR￿0.09￿nominal￿value￿will￿be￿submitted
to￿the￿AGM￿to￿be￿held￿on￿April￿24,￿2013.

B. Significant Changes
No￿significant￿changes￿have￿occurred￿since￿the￿date￿of￿our￿consolidated￿financial￿statements.￿See￿Item￿5.D.￿"Trend
Information".

Item 9 The Offer and Listing

A. Offer and Listing Details
Our￿ordinary￿shares￿are￿listed￿for￿trading￿in￿the￿form￿of￿registered￿shares￿on￿NASDAQ￿("New￿York￿shares")￿and￿in￿the
form￿of￿registered￿shares￿on￿NYSE￿Euronext￿Amsterdam￿("Amsterdam￿Shares").￿The￿principal￿trading￿market￿of￿our
ordinary￿shares￿is￿NYSE￿Euronext￿Amsterdam.￿For￿more￿information￿see￿Item￿10.B.￿“Memorandum￿and￿Articles￿of
Association”.

ASML￿ANNUAL￿REPORT￿2012

51

New￿York￿shares￿are￿registered￿with￿J.P.￿Morgan￿Chase￿Bank,￿N.A.￿(the￿"New￿York￿Transfer￿Agent"),￿4￿New￿York￿Plaza,
New￿York,￿New￿York,￿pursuant￿to￿the￿terms￿of￿a￿transfer,￿registrar￿and￿dividend￿disbursing￿agreement￿(the￿"Transfer
Agent￿Agreement")￿between￿ASML￿and￿the￿New￿York￿Transfer￿Agent.￿Amsterdam￿shares￿are￿held￿in￿dematerialized￿form
through￿the￿facilities￿of￿Nederlands￿Centraal￿Instituut￿voor￿Giraal￿Effectenverkeer￿B.V.￿("Euroclear￿Nederland"),￿the￿Dutch
centralized￿securities￿custody￿and￿administration￿system.￿The￿New￿York￿Transfer￿Agent￿charges￿shareholders￿a￿fee￿of
USD￿5.00￿per￿100￿shares￿for￿the￿exchange￿of￿New￿York￿shares￿for￿Amsterdam￿shares￿and￿vice￿versa.

Dividends￿payable￿on￿New￿York￿shares￿are￿declared￿in￿euro￿and￿converted￿by￿us￿to￿U.S.￿dollars￿at￿the￿rate￿of￿exchange
at￿the￿close￿of￿business￿on￿the￿date￿determined￿and￿announced￿by￿the￿Board￿of￿Management.￿The￿resulting￿amounts￿are
distributed￿through￿the￿New￿York￿Transfer￿Agent￿and￿no￿charge￿is￿payable￿by￿holders￿of￿New￿York￿shares￿in￿connection
with￿this￿conversion￿or￿distribution.

Pursuant￿to￿the￿terms￿of￿the￿Transfer￿Agent￿Agreement,￿we￿have￿agreed￿to￿reimburse￿the￿New￿York￿Transfer￿Agent￿for
certain￿out￿of￿pocket￿expenses,￿including￿in￿connection￿with￿any￿mailing￿of￿notices,￿reports￿or￿other￿communications
made￿generally￿available￿by￿ASML￿to￿holders￿of￿ordinary￿shares￿and￿the￿New￿York￿Transfer￿Agent￿has￿waived￿its￿fees
associated￿with￿routine￿services￿to￿ASML￿associated￿with￿the￿New￿York￿shares.￿In￿addition,￿the￿New￿York￿Transfer￿Agent
has￿agreed￿to￿reimburse￿certain￿reasonable￿expenses￿incurred￿by￿ASML￿in￿connection￿with￿the￿issuance￿and￿transfer
of￿New￿York￿shares.￿In￿the￿year￿ended￿December￿31,￿2012,￿the￿Transfer￿Agent￿reimbursed￿USD￿849,377￿of￿expenses
incurred￿by￿ASML,￿which￿mainly￿comprised￿legal,￿audit￿and￿accounting￿fees￿incurred￿due￿to￿the￿existence￿of￿the￿New
York￿shares.

The￿following￿table￿sets￿forth,￿for￿the￿periods￿indicated,￿the￿high￿and￿low￿closing￿prices￿of￿our￿ordinary￿shares￿on
NASDAQ,￿as￿well￿as￿on￿NYSE￿Euronext￿Amsterdam.

Annual Information
2012
2011
2010
2009
2008
Quarterly Information
4th￿quarter￿2012
3rd￿quarter￿2012
2nd￿quarter￿2012
1st￿quarter￿2012
￿
4th￿quarter￿2011
3rd￿quarter￿2011
2nd￿quarter￿2011
1st￿quarter￿2011
Monthly Information
February￿(through￿February￿4)￿2013
January￿2013
December￿2012
November￿2012
October￿2012
September￿2012
August￿2012

NASDAQ
USD

High

￿

￿

￿

￿

64.68
45.82
38.45
34.67
30.47

64.68
58.86
51.54
50.14

43.55
38.64
44.43
45.82

78.21
75.47
64.68
62.57
56.29
57.87
58.86

￿

￿

￿

￿

Low

40.91
31.08
24.73
14.28
12.66

50.08
48.46
43.80
40.91

33.50
31.08
34.98
35.90

76.43
63.08
61.42
53.54
50.08
52.39
55.84

Euronext Amsterdam
EUR

￿

￿

￿

￿

High

49.36
32.81
29.26
24.24
20.97

49.36
48.14
40.88
37.48

32.50
27.40
31.43
32.81

56.80
56.23
49.36
48.21
43.55
45.58
47.30

￿

￿

￿

￿

Low

31.81
22.28
19.68
11.35
10.68

39.15
39.75
35.17
31.81

25.56
22.28
24.43
27.35

56.59
47.20
47.04
42.22
39.15
40.57
44.67

B. Plan of Distribution
Not￿applicable.

C. Markets
See￿Item￿9.A.￿"Offer￿and￿Listing￿Details".

D. Selling Shareholders
Not￿applicable.

ASML￿ANNUAL￿REPORT￿2012

52

 
 
 
E. Dilution
Not￿applicable.

F. Expenses of the Issue
Not￿applicable.

Item 10 Additional Information

A. Share Capital
Not￿applicable.

B. Memorandum and Articles of Association
The￿information￿required￿by￿Item￿10.B.￿is￿incorporated￿by￿reference￿in￿ASML’s￿Report￿on￿Form￿6-K,￿filed￿with￿the
Commission￿on￿February￿8,￿2013.

Current￿Authorizations￿to￿Issue￿and￿Repurchase￿Ordinary￿Shares
Our￿Board￿of￿Management￿has￿the￿power￿to￿issue￿ordinary￿shares￿and￿preference￿shares￿if￿and￿insofar￿as￿the￿Board￿of
Management￿has￿been￿authorized￿to￿do￿so￿by￿the￿General￿Meeting￿of￿Shareholders￿(whether￿by￿means￿of￿an￿authorizing
resolution￿or￿by￿an￿amendment￿to￿our￿Articles￿of￿Association).￿The￿Board￿of￿Management￿requires￿the￿approval,
however,￿of￿the￿Supervisory￿Board￿for￿such￿an￿issue.￿An￿authorization￿of￿the￿Board￿of￿Management￿to￿issue￿ordinary
shares￿or￿preference￿shares￿may￿be￿effective￿for￿a￿specified￿period￿of￿up￿to￿five￿years￿and￿may￿be￿renewed.￿In￿the
absence￿of￿such￿authorization,￿the￿General￿Meeting￿of￿Shareholders￿has￿the￿power￿to￿authorize￿the￿issuance￿of￿ordinary
shares￿or￿preference￿shares,￿upon￿the￿proposal￿of￿the￿Board￿of￿Management,￿which￿proposal￿must￿be￿authorized￿by￿the
Supervisory￿Board.

At￿our￿Extraordinary￿General￿Meeting￿of￿Shareholders￿("EGM"),￿held￿on￿September￿7,￿2012,￿the￿Board￿of￿Management
was￿authorized￿from￿September￿7,￿2012￿through￿October￿25,￿2013,￿subject￿to￿the￿approval￿of￿the￿Supervisory￿Board,￿to
issue￿shares￿and/or￿rights￿thereto￿representing￿up￿to￿a￿maximum￿of￿5.0￿percent￿of￿our￿issued￿share￿capital￿as￿of￿April
25,￿2012,￿plus￿an￿additional￿5.0￿percent￿of￿our￿issued￿share￿capital￿as￿of￿April￿25,￿2012￿that￿may￿be￿issued￿in￿connection
with￿mergers,￿acquisitions￿and/or￿(strategic)￿alliances.￿With￿this￿authorization,￿the￿corresponding￿authorization￿granted
at￿the￿AGM￿held￿on￿April￿25,￿2012,￿ceased￿to￿apply￿to￿the￿extent￿not￿already￿used.￿At￿our￿AGM￿to￿be￿held￿on￿April￿24,
2013,￿our￿shareholders￿will￿be￿asked￿to￿authorize￿the￿Board￿of￿Management￿(subject￿to￿the￿approval￿of￿the￿Supervisory
Board)￿to￿issue￿shares￿and/or￿rights￿thereto￿through￿October￿24,￿2014,￿up￿to￿an￿aggregate￿maximum￿of￿10.0￿percent
of￿ASML's￿issued￿share￿capital.￿This￿authorization￿would￿supercede￿the￿authorization￿described￿above￿granted￿at￿the
September￿2012,￿EGM.

Holders￿of￿ASML’s￿ordinary￿shares￿have￿a￿preemptive￿right￿of￿subscription,￿in￿proportion￿to￿the￿aggregate￿nominal
amount￿of￿the￿ordinary￿shares￿held￿by￿them,￿to￿any￿issuance￿of￿ordinary￿shares￿for￿cash,￿which￿right￿may￿be￿restricted
or￿excluded.￿Ordinary￿shareholders￿have￿no￿pro￿rata￿preemptive￿right￿of￿subscription￿to￿any￿ordinary￿shares￿issued￿for
consideration￿other￿than￿cash￿or￿ordinary￿shares￿issued￿to￿employees.￿If￿authorized￿for￿this￿purpose￿by￿the￿General
Meeting￿of￿Shareholders￿(either￿by￿means￿of￿a￿resolution￿or￿by￿an￿amendment￿to￿our￿Articles￿of￿Association),￿the￿Board
of￿Management￿has￿the￿power￿subject￿to￿approval￿of￿the￿Supervisory￿Board,￿to￿restrict￿or￿exclude￿the￿preemptive￿rights
of￿holders￿of￿ordinary￿shares.￿At￿our￿EGM￿held￿on￿September￿7,￿2012,￿the￿Board￿of￿Management￿was￿authorized￿from
September￿7,￿2012￿through￿October￿25,￿2013,￿subject￿to￿approval￿of￿the￿Supervisory￿Board,￿to￿restrict￿or￿exclude
preemptive￿rights￿of￿holders￿of￿ordinary￿shares￿up￿to￿a￿maximum￿of￿10￿percent￿of￿our￿issued￿share￿capital￿as￿of￿April
25,￿2012.￿With￿this￿authorization,￿the￿corresponding￿authorization￿granted￿at￿the￿AGM￿held￿on￿April￿25,￿2012,￿ceased￿to
apply￿to￿the￿extent￿not￿already￿used.

At￿our￿EGM￿held￿on￿September￿7,￿2012,￿the￿Board￿of￿Management￿was￿also￿authorized￿from￿September￿7,￿2012￿through
July￿31,￿2013,￿to￿issue￿shares￿or￿rights￿to￿subscribe￿for￿shares￿in￿our￿capital￿in￿connection￿with￿the￿Customer￿Co-
Investment￿Program,￿subject￿to￿Supervisory￿Board￿approval,￿up￿to￿25.0￿percent￿of￿our￿issued￿share￿capital￿as￿of￿April
25,￿2012,￿and￿to￿restrict￿or￿exclude￿the￿pre-emption￿rights￿accruing￿to￿shareholders￿in￿connection￿with￿the￿issue￿of
these￿shares￿or￿rights.￿We￿issued￿shares￿(on￿September￿12,￿2012￿and￿October￿31,￿2012)￿pursuant￿to￿the￿Customer
Co-Investment￿Program￿equaling￿23.0￿percent￿of￿the￿issued￿share￿capital￿in￿ASML￿as￿of￿April￿25,￿2012￿as￿per￿this
authorization.￿At￿September￿7,￿2012,￿the￿Customer￿Co-Investment￿Program￿was￿closed￿for￿other￿participants.

At￿the￿EGM￿held￿on￿September￿7,￿2012,￿several￿changes￿in￿the￿articles￿of￿association￿of￿ASML￿were￿adopted.
Consequently,￿on￿November￿24,￿2012￿the￿articles￿of￿association￿were￿amended￿as￿follows.￿Upon￿the￿first￿amendment
the￿ordinary￿shares￿to￿be￿held￿for￿the￿benefit￿of￿the￿participants￿to￿the￿Customer￿Co-Investment￿Program￿were
converted￿into￿ordinary￿shares￿M￿and￿all￿other￿ordinary￿shares￿were￿converted￿into￿ordinary￿shares￿A.￿Upon￿the￿second

ASML￿ANNUAL￿REPORT￿2012

53

amendment￿the￿par￿value￿per￿ordinary￿share￿A￿was￿increased￿from￿EUR￿0.09￿to￿EUR￿9.24￿at￿the￿expense￿of￿the￿share
premium￿reserve.￿Upon￿the￿third￿amendment,￿the￿nominal￿value￿per￿ordinary￿share￿A￿was￿reduced￿to￿an￿amount￿of￿EUR
0.06,￿by￿decreasing￿the￿nominal￿value￿per￿ordinary￿share￿A￿by￿an￿amount￿of￿EUR￿9.18,￿which￿resulted￿in￿a￿repayment￿of
the￿same￿amount￿per￿share￿to￿holders￿of￿ordinary￿shares￿into￿which￿the￿ordinary￿shares￿A￿were￿converted.￿The￿fourth
amendment￿provided￿for￿the￿consolidation￿of￿the￿ordinary￿shares￿A￿through￿the￿exchange￿of￿each￿100￿ordinary￿shares
for￿77￿ordinary￿shares,￿resulting￿in￿an￿increase￿of￿the￿nominal￿value￿per￿ordinary￿share￿from￿EUR￿0.06￿to￿EUR￿0.09,
whereby￿the￿aggregate￿difference￿is￿booked￿at￿the￿expense￿of￿the￿share￿premium￿reserve.￿The￿fifth￿and￿last￿amendment
provided￿for￿the￿deletion￿of￿the￿share￿class￿M￿for￿participants￿to￿the￿Customer￿Co-Investment￿Program￿and￿the￿share
class￿A￿for￿the￿other￿shareholders.￿The￿ordinary￿shares￿M￿and￿A￿were￿converted￿thereafter￿into￿ordinary￿shares￿without￿a
specific￿letter￿mark￿attached￿to￿it.

In￿addition,￿the￿articles￿of￿association￿provide￿for￿9,000￿ordinary￿shares￿B￿with￿a￿nominal￿value￿of￿EUR￿0.01￿to￿allow
holders￿of￿fractional￿shares,￿created￿as￿a￿result￿of￿the￿share￿consolidation,￿to￿obtain￿voting￿rights￿with￿respect￿to￿those
fractional￿shares.

We￿may￿repurchase￿our￿issued￿ordinary￿shares￿at￿any￿time,￿subject￿to￿compliance￿with￿the￿requirements￿of￿Dutch￿law
and￿our￿Articles￿of￿Association.￿Any￿such￿repurchases￿are￿subject￿to￿the￿approval￿of￿the￿Supervisory￿Board￿and￿the
authorization￿of￿shareholders￿at￿our￿General￿Meeting￿of￿Shareholders,￿which￿authorization￿may￿not￿be￿for￿more￿than￿18
months.￿The￿Board￿of￿Management￿is￿currently￿authorized,￿subject￿to￿Supervisory￿Board￿approval,￿to￿repurchase￿as￿of
April￿25,￿2012￿through￿October￿25,￿2013,￿up￿to￿a￿maximum￿of￿two￿times￿10.0￿percent￿of￿ASML's￿issued￿share￿capital
as￿of￿April￿25,￿2012,￿at￿a￿price￿between￿the￿nominal￿value￿of￿the￿ordinary￿shares￿purchased￿and￿110.0￿percent￿of￿the
market￿price￿of￿these￿securities￿on￿NYSE￿Euronext￿Amsterdam￿or￿NASDAQ.

C. Material Contracts
Overview

On￿July￿9,￿2012,￿we￿announced￿our￿Customer￿Co-Investment￿Program￿to￿accelerate￿our￿development￿of￿EUV￿technology
beyond￿the￿current￿generation￿and￿our￿development￿of￿future￿450mm￿silicon￿wafer￿technology.￿The￿participating
customers￿collectively￿agreed￿to￿fund￿EUR￿1.38￿billion￿of￿our￿research￿and￿development￿projects￿from￿2013￿through
2017.￿This￿program￿creates￿risk￿sharing￿with￿some￿of￿our￿largest￿customers￿while￿the￿results￿of￿ASML’s￿development
programs￿will￿be￿available￿to￿every￿semiconductor￿manufacturer￿with￿no￿restrictions.￿The￿R&D￿funding￿program￿in
the￿Customer￿Co-Investment￿Program￿consists￿of￿two￿funding￿projects:￿a￿450mm￿technology￿development￿project
and￿a￿next-generation￿EUV￿development￿project.￿ASML￿has￿entered￿into￿Non￿Recurring￿Engineering￿("NRE")￿funding
agreements￿with￿the￿participating￿customers.

In￿addition￿to￿the￿funding￿commitments￿described￿above,￿the￿participating￿customers￿have￿invested￿in￿ordinary￿shares
equal,￿in￿aggregate,￿to￿23￿percent￿of￿ASML's￿issued￿share￿capital￿(calculated￿giving￿effect￿to￿our￿Synthetic￿Share
Buyback￿in￿November￿2012).￿The￿proceeds￿of￿the￿share￿issuance,￿EUR￿3.85￿billion,￿were￿returned￿to￿the￿holders￿of
ordinary￿shares￿(excluding￿the￿participating￿customers)￿through￿a￿Synthetic￿Share￿Buyback￿executed￿in￿November
2012.￿For￿further￿information￿regarding￿the￿Synthetic￿Share￿Buyback,￿see￿Note￿26￿to￿our￿consolidated￿financial
statements￿.

Description of Investment Agreements, Shareholder Agreements and NRE Funding Agreements

In￿connection￿with￿the￿Customer￿Co-Investment￿Program,￿ASML￿entered￿into￿an￿investment￿agreement,￿a￿shareholder
agreement￿and￿NRE￿funding￿agreements￿with￿each￿of￿the￿participating￿customers.￿Intel￿is￿the￿largest￿participant￿in￿the
program,￿with￿an￿aggregate￿funding￿commitment￿of￿EUR￿829￿million￿and￿an￿investment￿in￿15￿percent￿of￿our￿ordinary
shares￿(calculated￿giving￿effect￿to￿our￿Synthetic￿Share￿Buyback￿in￿November￿2012).￿A￿description￿of￿the￿investment
agreement,￿shareholders￿agreement￿and￿NRE￿funding￿agreements￿between￿ASML￿and￿Intel￿is￿set￿out￿below.￿￿The
agreements￿between￿ASML￿and￿the￿other￿program￿participants￿-￿￿TSMC￿(which￿acquired￿5￿percent￿of￿our￿shares￿and
made￿an￿EUR￿277￿million￿funding￿commitment)￿and￿Samsung￿(which￿acquired￿3￿percent￿of￿our￿shares￿and￿made￿an￿EUR
276￿million￿funding￿commitment)￿are￿on￿substantially￿the￿same￿terms￿as￿those￿agreed￿with￿Intel.￿￿Shares￿were￿acquired
by￿Dutch￿foundations￿(“Stichtingen”)￿established￿for￿each￿participant.

Investment Agreement

Pursuant￿to￿the￿investment￿agreement￿between￿ASML￿and￿Intel,￿dated￿July￿9,￿2012￿("the￿Intel￿Investment￿Agreement"),
ASML￿agreed￿to￿issue￿to￿a￿foundation￿established￿for￿Intel￿(the￿“Intel￿Stichting”)￿ordinary￿shares￿equal￿to￿15￿percent￿of
ASML’s￿issued￿ordinary￿shares;￿the￿Intel￿Stichting￿issued￿to￿Intel￿depositary￿receipts￿representing￿the￿ordinary￿shares.
The￿subscription￿price￿for￿the￿ordinary￿shares￿￿issued￿to￿Intel￿was￿EUR￿39.91￿per￿ordinary￿share,￿which￿is￿the￿average￿of

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the￿volume￿weighted￿average￿price￿of￿the￿ordinary￿shares￿on￿NYSE￿Euronext￿Amsterdam￿for￿the￿twenty￿trading￿days￿up
to￿and￿including￿July￿6,￿2012.

Under￿the￿Intel￿Investment￿Agreement,￿ASML￿has￿agreed￿to￿indemnify￿Intel,￿and￿its￿affiliates￿for￿certain￿losses￿and
expenses￿related￿to￿breaches￿of￿representations,￿warranties,￿covenants￿and￿agreements￿in￿the￿Investment￿Agreements
and￿with￿respect￿to￿certain￿legal￿proceedings￿related￿thereto,￿subject￿to￿certain￿limitations.

Shareholder Agreement

In￿connection￿with￿the￿issuance￿of￿shares￿pursuant￿to￿the￿Intel￿Investment￿Agreement,￿on￿September￿12,￿2012￿ASML,
Intel￿and￿the￿Intel￿Stichting￿entered￿into￿a￿shareholder￿agreement￿(the￿“Shareholder￿Agreement”)￿which￿governs￿certain
matters￿relating￿to￿the￿holding￿of￿and￿further￿investment￿by￿Intel￿in￿ordinary￿shares￿of￿ASML,￿directly￿and￿indirectly
through￿the￿Intel￿Stichting,￿including￿the￿matters￿described￿below.

Voting Restrictions

Pursuant￿to￿the￿Intel￿Shareholder￿Agreement,￿Intel￿(and￿the￿Intel￿Stichting)￿will￿not￿be￿entitled￿to￿vote￿the￿ordinary￿shares
that￿were￿acquired￿by￿the￿Intel￿Stichting￿as￿part￿of￿the￿Customer￿Co-Investment￿Program￿or￿any￿other￿ordinary￿shares
otherwise￿transferred￿to￿the￿Intel￿Stichting￿(under￿the￿circumstances￿described￿under￿"Standstill;￿Additional￿Purchases"
below)￿prior￿to￿a￿Shareholder￿Agreement￿Termination￿Event￿(as￿defined￿below),￿except￿when￿a￿Suspension￿Event￿(as
described￿below)￿occurs￿and￿is￿continuing￿or￿where￿the￿following￿matters￿are￿proposed￿at￿any￿General￿Meeting￿(the
"Voting￿Restrictions"):￿(i)￿an￿issuance￿of￿ASML￿shares￿or￿grant￿of￿rights￿to￿subscribe￿for￿ASML￿shares￿representing￿25
percent￿or￿more￿of￿the￿issued￿and￿outstanding￿share￿capital￿of￿ASML￿or￿the￿restriction￿or￿exclusion￿of￿pre-emption￿rights
relating￿thereto￿(in￿each￿case,￿on￿an￿aggregate￿basis￿during￿the￿preceding￿12￿months)￿or￿the￿designation￿of￿the￿Board￿of
Management￿as￿the￿authorized￿body￿to￿resolve￿on￿these￿matters;￿(ii)￿an￿authorization￿to￿repurchase￿25￿percent￿or￿more
of￿ASML’s￿issued￿and￿outstanding￿share￿capital￿on￿an￿aggregate￿basis￿during￿the￿preceding￿12￿months;￿(iii)￿the￿approval
of￿a￿significant￿change￿in￿the￿identity￿or￿nature￿of￿ASML￿or￿its￿business,￿including￿a￿transfer￿of￿all￿or￿substantially￿all
business￿or￿assets￿of￿ASML￿and￿its￿subsidiaries￿to￿a￿third￿party,￿the￿establishment￿or￿cancellation￿of￿a￿long-lasting
cooperation￿of￿essential￿importance￿with￿a￿third￿party￿and￿an￿acquisition￿or￿disposition￿of￿an￿interest￿in￿the￿capital￿or
assets￿of￿a￿person￿with￿a￿value￿of￿at￿least￿one￿third￿of￿the￿assets￿of￿ASML￿(on￿a￿consolidated￿basis);￿(iv)￿an￿amendment
to￿ASML’s￿Articles￿of￿Association￿that￿would￿materially￿affect￿the￿specific￿voting￿rights￿of￿Intel,￿would￿materially￿affect
the￿identity￿or￿nature￿of￿ASML￿or￿its￿business,￿or￿would￿disproportionately￿(or￿uniquely)￿and￿adversely￿affect￿the￿rights
or￿benefits￿attached￿to￿or￿derived￿from￿the￿ordinary￿shares￿held￿by￿Intel￿through￿the￿Intel￿Stichting￿as￿compared￿to￿the
shareholders;￿(v)￿the￿dissolution￿of￿ASML;￿and￿(vi)￿any￿merger￿or￿demerger￿which￿would￿result￿in￿a￿material￿change￿in￿the
identity￿or￿nature￿of￿ASML￿or￿its￿business.

Standstill, Lock-up and Orderly Market Arrangements

Standstill;￿Additional￿Purchases

Subject￿to￿certain￿exceptions,￿pursuant￿to￿the￿Shareholder￿Agreement,￿Intel￿(or￿its￿affiliates)￿may￿not,￿prior￿to￿the
six-year￿anniversary￿of￿the￿date￿of￿the￿Intel￿Shareholder￿Agreement￿(the￿"Standstill￿Period"),￿acquire￿more￿than￿19.9
percent￿of￿the￿outstanding￿share￿capital￿of￿ASML￿without￿ASML’s￿prior￿approval￿(the￿"Standstill￿Restriction").￿There￿is
an￿exception￿from￿the￿Standstill￿Restriction￿in￿the￿case￿of￿a￿‘suspension￿event’,￿which￿includes￿certain￿circumstances
where￿a￿third￿party￿has￿acquired￿or￿made￿an￿offer￿to￿acquire￿at￿least￿20￿percent￿of￿ASML’s￿outstanding￿shares,￿and￿the
Standstill￿Restriction￿will￿terminate￿upon￿the￿occurrence￿of￿a￿Shareholder￿Agreement￿Termination￿Event.

The￿Shareholder￿Agreement￿permits￿Intel￿(and￿its￿affiliates)￿to￿acquire￿up￿to￿4.99￿percent￿of￿ASML's￿outstanding￿shares
(other￿than￿shares￿acquired￿through￿the￿Customer￿Co-Investment￿Program)￿that￿may￿be￿held￿outside￿the￿Intel￿Stichting.
For￿any￿additional￿ASML￿shares￿that￿Intel￿(or￿its￿affiliates)￿acquires￿in￿excess￿of￿4.99￿percent￿of￿the￿outstanding￿shares
of￿ASML,￿Intel￿is￿required￿to￿deposit￿such￿shares￿with￿the￿Intel￿Stichting￿in￿exchange￿for￿Depositary￿Receipts.￿Shares
held￿directly￿by￿Intel￿or￿its￿affiliates￿(and￿which￿not￿required￿to￿be￿deposited￿with￿the￿Intel￿Stichting)￿are￿not￿subject￿to
the￿Voting￿Restrictions,￿or￿Lock-Up￿Restrictions￿(as￿defined￿below),￿but￿are￿subject￿to￿the￿Standstill￿Restriction.

The￿Intel￿Stichting￿will￿continue￿to￿hold￿ASML￿shares￿owned￿by￿Intel￿(notwithstanding￿termination￿of￿the￿Standstill
Period)￿until￿the￿earlier￿of￿(i)￿￿such￿time￿as￿Intel￿owns￿(directly￿or￿through￿the￿Intel￿Stichting)￿less￿than￿2￿percent￿of
ASML’s￿outstanding￿shares￿(the￿relevant￿percentage￿is￿1￿percent￿for￿the￿other￿participating￿customers)￿(ii)￿the￿date
of￿notification￿to￿ASML￿by￿participating￿customers￿that￿the￿aggregate￿amount￿of￿ASML’s￿outstanding￿shares￿owned
by￿Intel￿and￿the￿other￿participating￿customers￿represents￿less￿than￿5￿percent￿of￿ASML’s￿outstanding￿shares￿and￿(iii)
a￿Shareholder￿Agreement￿Termination￿Event￿(as￿defined￿below),￿following￿which￿time￿Depositary￿Receipts￿will￿be
exchanged￿for￿the￿underlying￿ASML￿shares.￿In￿case￿Intel￿would￿acquire￿ASML￿shares￿within￿18￿months￿after￿an￿event

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described￿under￿(i)￿or￿(ii)￿above,￿any￿ASML￿shares￿held￿by￿Intel￿in￿excess￿of￿4.99￿percent￿of￿the￿outstanding￿shares￿of
ASML￿must￿be￿transferred￿to￿(and￿held￿by)￿the￿Intel￿Stichting.

Lock-up;￿Orderly￿Sell￿Down

Intel￿may￿not,￿without￿prior￿written￿consent￿of￿ASML,￿transfer￿any￿ordinary￿shares￿or￿Depositary￿Receipts￿until￿the
earliest￿of￿(i)￿two￿years￿and￿six￿months￿after￿the￿date￿of￿the￿Intel￿Shareholder￿Agreement,￿(ii)￿termination￿of￿the￿NRE
funding￿agreements,￿and￿(iii)￿the￿occurrence￿of￿a￿Shareholder￿Agreement￿Termination￿Event￿￿((i),￿(ii)￿and￿(iii)￿together,￿the
"Lock-Up￿Restriction").￿The￿Lock-Up￿Restriction￿does￿not￿apply￿in￿certain￿circumstances￿where￿a￿third￿party￿offers￿to
acquire￿at￿least￿20￿percent￿of￿ASML’s￿shares.￿Intel￿is￿not￿permitted￿to￿transfer￿the￿ASML￿ordinary￿shares￿it￿acquired￿in
the￿program￿in￿connection￿with￿an￿offer￿(before￿the￿end￿of￿the￿offer),￿or￿make￿any￿public￿statement￿in￿support￿of￿such
offer,￿that￿is￿not￿recommended￿by￿the￿ASML￿Supervisory￿Board￿or￿Management￿Board,￿except￿in￿limited￿circumstances.

In￿addition,￿Intel￿may￿not￿(even￿after￿the￿Lock-Up￿Period￿has￿ended),￿without￿written￿consent￿of￿ASML,￿transfer￿on
NYSE￿Euronext￿Amsterdam,￿NASDAQ￿or￿another￿securities￿exchange￿more￿than￿(i)￿in￿respect￿of￿Intel,￿4￿percent￿of￿the
outstanding￿shares￿of￿ASML￿(the￿relevant￿percentage￿is￿1.5￿percent￿for￿Samsung￿and￿2.5￿percent￿for￿TSMC).￿There￿are
also￿restrictions￿on￿Intel's￿ability￿to￿transfer￿ASML￿shares￿to￿certain￿competitors￿or￿customers￿of￿ASML.

Termination

The￿Intel￿Shareholder￿Agreement￿will￿terminate￿upon￿the￿occurrence￿of￿the￿following￿events￿(each￿a￿"Shareholder
Agreement￿Termination￿Event")￿(i)￿certain￿change￿of￿control￿transactions￿were￿the￿shareholders￿of￿ASML￿prior￿to￿such
a￿transaction￿are￿no￿longer￿entitled￿to￿exercise￿at￿least￿50￿percent￿of￿the￿votes￿in￿the￿General￿Meeting￿following￿such
transaction,￿(ii)￿in￿the￿event￿of￿a￿delisting￿of￿the￿Ordinary￿Shares￿from￿NYSE￿Euronext￿Amsterdam￿or￿de￿listing￿from
NASDAQ￿(except￿for￿certain￿voluntary￿delistings￿from￿NASDAQ),￿(iii)￿the￿winding￿up￿or￿liquidation￿of￿ASML,￿or￿(vi)￿in￿the
event￿that￿all￿Depositary￿Receipts￿are￿exchanged￿for￿ASML￿shares￿and￿Intel￿does￿not￿acquire￿ASML￿shares￿in￿excess￿of
4.99￿percent￿of￿the￿outstanding￿ASML￿shares￿within￿18￿months￿of￿such￿exchange￿(see￿"Standstill;￿Additional￿Purchases"
above).

NRE Funding Agreements

Intel NRE Funding Agreements

On￿July￿9,￿2012,￿ASML￿and￿Intel￿entered￿into￿two￿NRE￿funding￿agreements￿pursuant￿to￿which￿Intel￿has￿agreed￿to￿fund
certain￿of￿ASML’s￿R&D￿costs￿and￿project￿expenditures.￿One￿agreement￿relates￿to￿the￿development￿of￿450mm￿lithography
equipment￿(the￿"Intel￿450mm￿NRE￿Funding￿Agreement"￿)￿and￿the￿other￿agreement￿relates￿to￿the￿development￿of￿EUV
lithography￿equipment￿(the￿"Intel￿EUV￿NRE￿Funding￿Agreement").￿Intel￿has￿committed￿to￿provide￿funding￿in￿an￿aggregate
amount￿of￿EUR￿553￿million￿under￿the￿Intel￿450mm￿NRE￿Funding￿Agreement￿and￿funding￿in￿an￿aggregate￿amount￿of
EUR￿276￿￿million￿under￿the￿Intel￿EUV￿NRE￿Funding￿Agreement,￿payable￿over￿the￿term￿of￿the￿relevant￿agreements
(2013-2017).￿Under￿the￿agreements,￿ASML￿retains￿sole￿control￿over￿the￿development￿of￿450mm￿photo￿lithography
equipment￿and￿EUV￿platforms￿and￿will￿own￿all￿intellectual￿property￿created￿by￿ASML￿in￿connection￿therewith.￿The￿NRE
funding￿agreements￿provide￿that￿if￿ASML,￿in￿its￿reasonable￿discretion,￿determines￿to￿abandon￿either￿the￿450mm￿or￿EUV
development￿project,￿as￿a￿result￿of￿technical￿infeasibility￿or￿lack￿of￿sufficient￿industry￿demand,￿or￿if￿the￿then￿remaining
funding￿exceeds￿the￿expenditure￿estimate￿for￿the￿development￿project￿(450mm￿or￿EUV),￿then￿the￿parties￿may￿agree￿on
an￿alternative￿development￿project.￿￿If￿no￿alternative￿is￿agreed,￿ASML￿may￿invoice￿Intel￿for￿the￿remaining￿due￿portion￿of
committed￿funding￿during￿each￿year￿of￿the￿remaining￿funding￿period￿in￿which￿ASML's￿actual￿gross￿R&D￿expenditures
exceed￿a￿minimum￿threshold￿specified￿in￿the￿relevant￿Intel￿NRE￿Funding￿Agreement.

The￿NRE￿funding￿agreements￿will￿terminate￿on￿December￿31,￿2017￿or￿upon￿pre-payment￿by￿Intel￿of￿the￿aggregate
amount￿of￿funding￿owed￿under￿the￿Intel￿NRE￿Funding￿Agreements.

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Cymer Merger

The Merger

On￿October￿16,￿2012,￿we￿entered￿into￿a￿merger￿agreement￿with￿Cymer,￿a￿company￿engaged￿in￿the￿development,
manufacturing￿and￿marketing￿of￿light￿sources￿for￿sale￿to￿customers￿who￿manufacture￿photolithography￿tools￿in￿the
semiconductor￿equipment￿industry￿(the￿"Merger￿Agreement"),￿under￿which￿ASML￿will￿acquire￿all￿outstanding￿shares￿of
common￿stock￿of￿Cymer￿for￿a￿consideration￿per￿Cymer￿share￿of￿Cymer￿common￿stock￿of￿USD￿20.00￿in￿cash￿and￿a￿fixed
ratio￿of￿1.1502￿ASML￿Ordinary￿Shares.￿Completion￿of￿the￿merger￿is￿subject￿to￿customary￿closing￿conditions,￿including
expiration￿or￿termination￿of￿the￿applicable￿waiting￿period￿under￿the￿Hart-Scott-Rodino￿Act￿and￿receipt￿of￿approvals
under￿other￿foreign￿competition￿laws.￿On￿february￿5,￿2013,￿the￿Cymer￿Stockholders￿approved￿the￿merger￿agreement.
We￿expect￿the￿transaction￿to￿close￿in￿the￿first￿half￿of￿2013,￿however￿there￿is￿no￿assurance￿that￿the￿transaction￿will
be￿completed￿within￿the￿expected￿time￿period￿or￿at￿all.￿See￿"Risk￿Factors,￿We￿May￿Be￿Unable￿to￿Make￿Desirable
Acquisitions￿or￿to￿Integrate￿Any￿Businesses￿We￿Successfully￿Acquire".

The Merger Agreement

Merger Consideration

The￿Merger￿Agreement￿provides￿that￿each￿share￿of￿Cymer￿common￿stock￿outstanding￿immediately￿prior￿to￿the
consummation￿of￿the￿Merger￿(other￿than￿shares￿owned￿by￿ASML,￿ASML￿US￿Inc.￿("Holdco"),￿Kona￿Acquisition￿Company
Inc.￿("Merger￿Sub"),￿Kona￿Technologies￿LLC￿("Merger￿Sub￿2"),￿any￿other￿wholly￿owned￿subsidiary￿of￿ASML,￿or￿held￿in
the￿treasury￿of￿Cymer￿or￿owned￿by￿any￿wholly￿owned￿subsidiary￿of￿Cymer￿(the￿“Excluded￿Shares”￿))￿will￿be￿converted
into￿the￿right￿to￿receive￿from￿Holdco￿(i)￿USD￿20.00￿in￿cash,￿without￿interest￿thereon,￿and￿(ii)￿1.1502￿ASML￿Ordinary
Shares.￿No￿fractional￿Ordinary￿Shares￿will￿be￿issued.￿In￿lieu￿of￿fractional￿Ordinary￿Shares,￿Cymer￿stockholders￿that
would￿otherwise￿be￿entitled￿to￿a￿fractional￿Ordinary￿Share￿will￿receive￿in￿cash￿an￿amount￿equal￿to￿the￿product￿of￿the
ASML￿Share￿Price￿(as￿defined￿in￿the￿Merger￿Agreement)￿and￿the￿fractional￿Ordinary￿Share￿to￿which￿such￿holder￿would
otherwise￿be￿entitled.

In￿addition,￿for￿purposes￿of￿complying￿with￿requirements￿of￿Dutch￿law,￿upon￿consummation￿of￿the￿merger,￿each￿holder
of￿Cymer￿capital￿stock￿(other￿than￿holders￿of￿Excluded￿Shares)￿will￿be￿entitled￿to￿receive￿the￿Dutch￿Compensation
Amount￿(as￿defined￿in￿the￿Merger￿Agreement)￿from￿ASML,￿to￿be￿set￿off￿against￿the￿obligation￿to￿pay￿up￿the￿Ordinary
Shares￿as￿described￿below.￿By￿virtue￿of￿the￿Merger,￿each￿Cymer￿stockholder￿will￿be￿deemed￿to￿have￿subscribed￿for￿the
Ordinary￿Shares￿to￿be￿issued￿to￿such￿holder￿pursuant￿to￿the￿Merger.￿In￿accordance￿with￿the￿laws￿of￿The￿Netherlands,
each￿Cymer￿stockholder,￿as￿a￿result￿of￿such￿deemed￿subscription,￿will￿be￿obligated￿to￿pay￿up￿such￿Ordinary￿Shares￿in
an￿amount,￿determined￿solely￿for￿the￿purpose￿of￿satisfying￿such￿obligation,￿equal￿to￿the￿Dutch￿Compensation￿Amount
to￿which￿such￿holder￿is￿entitled￿by￿virtue￿of￿the￿Merger.￿Such￿obligation￿will￿be￿satisfied￿by￿such￿Cymer￿stockholder
by￿set￿off￿by￿ASML￿of￿such￿obligation￿against￿the￿right￿of￿such￿Cymer￿common￿stockholder￿to￿receive￿from￿ASML￿the
Dutch￿Compensation￿Amount,￿and￿will￿have￿no￿effect￿on￿the￿receipt￿by￿a￿Cymer￿common￿stockholder￿of￿the￿merger
consideration.

Conditions to the Merger

Each￿party’s￿obligation￿to￿effect￿the￿Merger￿is￿subject￿to￿satisfaction￿or￿waiver,￿at￿or￿prior￿to￿the￿closing￿of￿the￿merger,
of￿certain￿conditions,￿including,￿among￿other￿things,￿certain￿regulatory￿approvals￿(including￿the￿expiration￿or￿termination
of￿all￿applicable￿waiting￿periods￿under￿the￿U.S.￿Hart-Scott-Rodino￿Antitrust￿Improvements￿Act￿of￿1976,￿as￿amended,
and￿approval￿of￿the￿Committee￿on￿Foreign￿Investment￿in￿the￿United￿States),￿obtaining￿certain￿required￿clearances￿under
certain￿foreign￿merger￿control￿laws,￿effectiveness￿of￿the￿registration￿statement￿filed￿in￿the￿United￿States￿relating￿to￿the
Merger,￿and￿the￿accuracy￿of￿certain￿representations￿and￿warranties￿provided￿by￿each￿party￿under￿the￿Merger￿Agreement.

Representations and Warranties

The￿Merger￿Agreement￿contains￿representations￿and￿warranties￿that￿Cymer,￿on￿the￿one￿hand,￿and￿ASML,￿Holdco,
Merger￿Sub￿and￿Merger￿Sub￿2,￿on￿the￿other￿hand,￿have￿made￿to￿each￿other,￿including,￿among￿other￿things,￿organization,
corporate￿power￿and￿authority,￿financial￿condition,￿compliance￿with￿laws,￿environmental￿matters,￿intellectual￿property,
real￿property￿and￿availability￿of￿cash￿consideration.

Covenants

The￿Merger￿Agreement￿contains￿covenants￿of￿both￿parties,￿including￿restrictions￿on￿Cymer￿with￿regard￿to￿the￿ability￿to,
among￿other￿things,￿issue,￿sell,￿pledge￿or￿redeem￿shares￿of￿Cymer￿common￿stock,￿make￿acquisitions￿or￿investments,
dispose￿of￿assets,￿create￿security￿rights￿and￿incur￿indebtedness.￿In￿the￿Merger￿Agreement,￿the￿parties￿have￿stated

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their￿intent￿that,￿subject￿to￿the￿terms￿of￿the￿Merger￿Agreement,￿ASML￿and￿its￿subsidiaries￿are￿free￿to￿conduct￿their
businesses￿and￿operations￿without￿restrictions￿between￿the￿date￿of￿the￿Merger￿Agreement￿and￿the￿closing￿of￿the￿merger,
except￿for￿certain￿restrictions￿on￿the￿ability￿of￿ASML￿to￿redeem￿Ordinary￿Shares,￿pay￿dividends￿or￿otherwise￿make
a￿payment￿to￿holders￿of￿Ordinary￿Shares￿(other￿than￿pursuant￿to￿the￿Synthetic￿Share￿Buyback)￿and￿the￿entering￿into
contracts￿that￿could￿reasonably￿be￿expected￿to￿prevent￿or￿materially￿delay￿the￿consummation￿of￿the￿Merger.

For￿a￿period￿of￿six￿years￿after￿consummation￿of￿the￿Merger,￿ASML￿and￿the￿surviving￿entity￿will,￿to￿the￿fullest￿extent
permitted￿under￿applicable￿law,￿indemnify￿and￿hold￿harmless,￿each￿of￿Cymer’s￿and￿its￿subsidiaries’￿present￿and￿former
directors,￿officers￿and￿employees￿against￿all￿costs￿and￿expenses￿(including￿attorneys’￿fees),￿judgments,￿fines,￿losses,
claims,￿damages,￿liabilities￿and￿settlement￿amounts￿paid￿in￿connection￿with￿any￿claim,￿action,￿suit,￿proceeding￿or
investigation￿to￿the￿extent￿they￿were￿indemnified￿under￿Cymer’s￿articles,￿bylaws￿and￿indemnification￿contracts￿in￿effect
as￿of￿the￿date￿of￿the￿Merger￿Agreement￿with￿respect￿to￿any￿action￿or￿omission￿in￿their￿capacity￿as￿an￿officer,￿director￿or
employee,￿at￿or￿prior￿to￿the￿consummation￿of￿the￿merger.

Termination

The￿Merger￿Agreement￿may￿be￿terminated￿at￿any￿time￿prior￿to￿the￿effective￿time￿of￿the￿merger,￿(i)￿by￿the￿mutual
written￿consent￿of￿ASML￿and￿Cymer￿and￿(ii)￿by￿ASML￿or￿Cymer￿if￿(a)￿a￿court￿or￿governmental￿entity￿issues￿a￿final
order￿prohibiting￿the￿Merger,￿(b)￿the￿Cymer￿stockholders￿do￿not￿approve￿the￿Merger￿Agreement,￿(c)￿the￿Merger￿is￿not
consummated￿on￿or￿before￿July￿16,￿2013￿and￿parties￿have￿not￿extended￿this￿date,￿(d)￿the￿other￿party￿has￿breached
or￿failed￿to￿perform￿its￿representations￿and￿warranties,￿covenants￿or￿agreements￿in￿the￿Merger￿Agreement￿or￿(e)￿the
Cymer￿board￿changes￿its￿recommendation￿to￿Cymer￿stockholders￿to￿approve￿the￿Merger￿Agreement￿or￿fails￿to￿include
its￿recommendation￿in￿the￿proxy￿statement/prospectus￿that￿has￿been￿filed￿with￿the￿SEC.

All￿costs￿and￿expenses￿incurred￿by￿the￿parties￿in￿connection￿with￿the￿Merger￿Agreement￿and￿the￿transactions
contemplated￿thereby￿are￿to￿be￿paid￿by￿the￿party￿that￿has￿incurred￿such￿costs￿and￿expenses,￿whether￿or￿not￿the￿Merger
is￿consummated.￿However,￿Cymer￿must￿pay￿ASML￿a￿termination￿fee￿of￿USD￿75,000,000￿if￿the￿Merger￿Agreement
is￿terminated￿on￿certain￿grounds￿including,￿among￿other￿things,￿termination￿because￿the￿Cymer￿board￿changes￿its
recommendation￿to￿Cymer￿stockholders￿to￿approve￿the￿Merger￿Agreement￿in￿connection￿with￿a￿superior￿acquisition
proposal￿or￿an￿intervening￿event￿or￿(subject￿to￿certain￿conditions)￿the￿Merger￿is￿not￿consummated￿on￿or￿before￿July￿16,
2013￿(or￿any￿date￿to￿which￿the￿termination￿date￿is￿extended,￿but￿not￿later￿than￿October￿16,￿2013).

D. Exchange Controls
There￿are￿currently￿no￿limitations,￿either￿under￿the￿laws￿of￿the￿Netherlands￿or￿in￿the￿Articles￿of￿Association￿of￿ASML,￿to
the￿rights￿of￿non-residents￿to￿hold￿or￿vote￿ordinary￿shares.￿Cash￿distributions,￿if￿any,￿payable￿in￿euros￿on￿Amsterdam
Shares￿may￿be￿officially￿transferred￿by￿a￿bank￿from￿the￿Netherlands￿and￿converted￿into￿any￿other￿currency￿without￿being
subject￿to￿any￿Dutch￿legal￿restrictions.￿However,￿for￿statistical￿purposes,￿such￿payments￿and￿transactions￿must￿be
reported￿by￿ASML￿to￿the￿Dutch￿Central￿Bank.￿Furthermore,￿no￿payments,￿including￿dividend￿payments,￿may￿be￿made￿to
jurisdictions￿subject￿to￿certain￿sanctions,￿adopted￿by￿the￿government￿of￿the￿Netherlands,￿implementing￿resolutions￿of
the￿Security￿Council￿of￿the￿United￿Nations.￿Cash￿distributions,￿if￿any,￿on￿New￿York￿Shares￿shall￿be￿declared￿in￿euros￿but
paid￿in￿U.S.￿dollars,￿converted￿by￿us￿at￿the￿rate￿of￿exchange￿at￿the￿close￿of￿business￿on￿the￿date￿fixed￿for￿that￿purpose
by￿the￿Board￿of￿Management￿in￿accordance￿with￿the￿Articles￿of￿Association.

E. Taxation
Dutch￿Taxation
The￿statements￿below￿represent￿a￿summary￿of￿current￿Dutch￿tax￿laws,￿regulations￿and￿judicial￿interpretations￿thereof.
The￿description￿is￿limited￿to￿the￿material￿tax￿implications￿for￿a￿holder￿of￿ordinary￿shares￿who￿is￿not,￿or￿is￿not￿deemed
to￿be,￿a￿resident￿of￿the￿Netherlands￿for￿Dutch￿tax￿purposes￿("Non-resident￿Holder").￿This￿summary￿does￿not￿address
special￿rules￿that￿may￿apply￿to￿special￿classes￿of￿holders￿of￿ordinary￿shares￿and￿should￿not￿be￿read￿as￿extending￿by
implication￿to￿matters￿not￿specifically￿referred￿to￿herein.￿As￿to￿individual￿tax￿consequences,￿each￿investor￿in￿ordinary
shares￿should￿consult￿his￿or￿her￿tax￿counsel.

General
The￿acquisition￿of￿ordinary￿shares￿by￿a￿non-resident￿of￿the￿Netherlands￿should￿not￿be￿treated￿as￿a￿taxable￿event￿for
Dutch￿tax￿purposes.￿The￿income￿consequences￿in￿connection￿with￿owning￿and￿disposing￿of￿our￿ordinary￿shares￿are
discussed￿below.

Substantial Interest
A￿person￿that,￿(inter￿alia)￿directly￿or￿indirectly,￿and￿either￿independently￿or￿jointly￿with￿his￿partner￿(as￿defined￿in￿the￿Dutch
Personal￿Income￿Tax￿Act￿2001),￿owns￿5.0￿percent￿or￿more￿of￿our￿share￿capital,￿owns￿profit￿participating￿rights￿that

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correspond￿to￿at￿least￿5.0￿percent￿of￿the￿annual￿profits￿of￿a￿Dutch￿company￿or￿to￿at￿least￿5.0￿percent￿of￿the￿liquidation
proceeds￿of￿such￿company￿or￿holds￿options￿to￿purchase￿5.0￿percent￿or￿more￿of￿our￿share￿capital,￿is￿deemed￿to￿have￿a
substantial￿interest￿in￿our￿shares,￿or￿our￿options,￿as￿applicable.￿Specific￿rules￿apply￿in￿case￿certain￿family￿members￿of
the￿Non-resident￿hold￿a￿substantial￿interest.￿A￿deemed￿substantial￿interest￿also￿exists￿if￿(part￿of)￿a￿substantial￿interest
has￿been￿disposed￿of,￿or￿is￿deemed￿to￿be￿disposed￿of,￿in￿a￿transaction￿where￿no￿taxable￿gain￿has￿been￿recognized.
Special￿attribution￿rules￿exist￿in￿determining￿the￿presence￿of￿a￿substantial￿interest.

Income Tax Consequences for Individual Non-resident Holders on Owning and Disposing of the Ordinary Shares
An individual who is a Non-resident Holder will not be subject to Dutch income tax on received income in respect of our
ordinary shares or capital gains derived from the sale, exchange or other disposition of our ordinary shares, provided that
such holder:

• Does￿not￿carry￿on￿and￿has￿not￿carried￿on￿a￿business￿in￿the￿Netherlands￿through￿a￿permanent￿establishment￿or￿a

permanent￿representative￿to￿which￿the￿ordinary￿shares￿are￿attributable;

• Does￿not￿hold￿and￿has￿not￿held￿a￿(deemed)￿substantial￿interest￿in￿our￿share￿capital￿or,￿in￿the￿event￿the￿Non-resident
Holder￿holds￿or￿has￿held￿a￿(deemed)￿substantial￿interest￿in￿our￿share￿capital,￿such￿interest￿is,￿or￿was,￿a￿business
asset￿in￿the￿hands￿of￿the￿holder;

• Does￿not￿share￿and￿has￿not￿shared￿directly￿(through￿the￿beneficial￿ownership￿of￿ordinary￿shares￿or￿similar￿securities)
in￿the￿profits￿of￿an￿enterprise￿managed￿and￿controlled￿in￿the￿Netherlands￿which￿(is￿deemed￿to)￿own(s),￿or￿(is￿deemed
to￿have)￿has￿owned,￿our￿ordinary￿shares;

• Does￿not￿carry￿out￿and￿has￿not￿carried￿out￿any￿activities￿which￿generate￿taxable￿profit￿or￿taxable￿income￿to￿which￿the

holding￿of￿our￿ordinary￿shares￿was￿connected;
Is￿not￿an￿individual￿that￿has￿elected￿to￿be￿taxed￿as￿a￿resident￿of￿the￿Netherlands.

•

Corporate Income Tax Consequences for Corporate Non-resident Holders
Income￿derived￿from￿ordinary￿shares￿or￿capital￿gains￿derived￿from￿the￿sale,￿exchange￿or￿disposition￿of￿ordinary￿shares
by￿a￿corporate￿Non-resident￿Holder￿is￿taxable￿if:

• The￿holder￿carries￿on￿a￿business￿in￿the￿Netherlands￿through￿a￿permanent￿establishment￿or￿a￿permanent￿agent￿in￿the

Netherlands￿(Dutch￿enterprise)￿and￿the￿ordinary￿shares￿are￿attributable￿to￿this￿permanent￿establishment￿or￿permanent
agent,￿unless￿the￿participation￿exemption￿(discussed￿below)￿applies;￿or

• The￿holder￿is￿a￿resident￿of￿Aruba,￿Curacao￿or￿Saint￿Martin￿with￿a￿permanent￿establishment￿or￿permanent

representative￿in￿Bonaire,￿Eustatius￿or￿Saba￿to￿which￿out￿ordinary￿shares￿are￿attributable,￿while￿the￿profits￿of￿such
holder￿are￿taxable￿in￿the￿Netherlands￿pursuant￿to￿article￿17(3)(c)￿of￿the￿Dutch￿Corporate￿Income￿Tax￿Act￿1969;￿or
• The￿holder￿has￿a￿substantial￿interest￿in￿our￿share￿capital,￿which￿is￿held￿with￿the￿primary￿aim￿or￿one￿of￿the￿primary
aims￿to￿evade￿the￿levy￿of￿income￿tax￿or￿dividend￿withholding￿tax￿at￿the￿level￿of￿another￿person￿and￿which￿is￿not
attributable￿to￿his￿enterprise;￿or

• Certain￿assets￿of￿the￿holder￿are￿deemed￿to￿be￿treated￿as￿a￿Dutch￿enterprise￿under￿Dutch￿tax￿law￿and￿the￿ordinary

shares￿are￿attributable￿to￿this￿Dutch￿enterprise.

To￿qualify￿for￿the￿Dutch￿participation￿exemption,￿the￿holder￿must￿generally￿hold￿at￿least￿5.0￿percent￿of￿our￿nominal￿paid-
in￿capital￿and￿meet￿certain￿other￿requirements.

Dividend Withholding Tax
In￿general,￿a￿dividend￿distributed￿by￿us￿in￿respect￿of￿our￿ordinary￿shares￿will￿be￿subject￿to￿a￿withholding￿tax￿imposed￿by
the￿Netherlands￿at￿the￿statutory￿rate￿of￿15.0￿percent.

Dividends￿include:
• Dividends￿in￿cash￿and￿in￿kind;
• Deemed￿and￿constructive￿dividends;
• Consideration￿for￿the￿repurchase￿or￿redemption￿of￿ordinary￿shares￿(including￿a￿purchase￿by￿a￿direct￿or￿indirect￿ASML
subsidiary)￿in￿excess￿of￿qualifying￿average￿paid-in￿capital￿unless￿such￿repurchase￿is￿made￿for￿temporary￿investment
purposes￿or￿is￿exempt￿by￿law;

• Stock￿dividends￿up￿to￿their￿nominal￿value￿(unless￿distributed￿out￿of￿qualifying￿paid-in￿capital);
• Any￿(partial)￿repayment￿of￿paid-in￿capital￿not￿qualifying￿as￿capital￿for￿Dutch￿dividend￿withholding￿tax￿purposes;￿and
• Liquidation￿proceeds￿in￿excess￿of￿qualifying￿average￿paid-in￿capital￿for￿Dutch￿dividend￿withholding￿tax￿purposes.

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A￿reduction￿of￿Dutch￿dividend￿withholding￿tax￿can￿be￿obtained￿if:

• The￿participation￿exemption￿applies￿and￿the￿ordinary￿shares￿are￿attributable￿to￿a￿business￿carried￿out￿in￿the

Netherlands;

• The￿dividends￿are￿distributed￿to￿a￿qualifying￿EU￿corporate￿holder￿satisfying￿the￿conditions￿of￿article￿4(2)￿and￿4(3)￿of

the￿Dutch￿Dividend￿Withholding￿Tax￿Act￿1965;￿or

• The￿rate￿is￿reduced￿by￿a￿Tax￿Treaty.

A￿Non-resident￿Holder￿of￿ordinary￿shares￿can￿be￿eligible￿for￿a￿partial￿or￿complete￿exemption￿or￿refund￿of￿all￿or￿a￿portion
of￿the￿above￿withholding￿tax￿under￿a￿Tax￿Treaty￿that￿is￿in￿effect￿between￿the￿Netherlands￿and￿the￿Non-resident￿Holder’s
country￿of￿residence.￿The￿Netherlands￿has￿concluded￿such￿treaties￿with￿the￿United￿States,￿Canada,￿Switzerland,￿Japan,
most￿European￿Union￿member￿states,￿as￿well￿as￿many￿other￿countries.￿Under￿the￿Treaty￿between￿the￿United￿States
and￿the￿Netherlands￿for￿the￿Avoidance￿of￿Double￿Taxation￿and￿the￿Prevention￿of￿Fiscal￿Evasion￿with￿Respect￿to￿Taxes
on￿Income￿(the￿"Tax￿Treaty"),￿dividends￿paid￿by￿us￿to￿a￿Non-resident￿Holder￿that￿is￿a￿resident￿of￿the￿United￿States￿as
defined￿in￿the￿Tax￿Treaty￿(other￿than￿an￿exempt￿organization￿or￿exempt￿pension￿trust,￿as￿discussed￿below)￿are￿generally
liable￿to￿15.0￿percent￿Dutch￿withholding￿tax￿or,￿in￿the￿case￿of￿certain￿United￿States￿corporate￿shareholders￿owning￿at
least￿10.0￿percent￿of￿our￿voting￿power,￿a￿reduction￿to￿5.0￿percent,￿provided￿that￿the￿Holder￿does￿not￿have￿an￿enterprise
or￿an￿interest￿in￿an￿enterprise￿that￿is,￿in￿whole￿or￿in￿part,￿carried￿on￿through￿a￿permanent￿establishment￿or￿permanent
representative￿in￿the￿Netherlands￿to￿which￿the￿dividends￿are￿attributable.￿The￿Tax￿Treaty￿also￿provides￿for￿a￿dividend
withholding￿tax￿exemption￿on￿dividends,￿but￿only￿for￿a￿shareholders￿owning￿at￿least￿80.0￿percent￿of￿our￿voting￿power
and￿meeting￿all￿other￿requirements.￿The￿Tax￿Treaty￿provides￿for￿a￿complete￿exemption￿from￿tax￿on￿dividends￿received
by￿exempt￿pension￿trusts￿and￿exempt￿organizations,￿as￿defined￿therein.￿Except￿in￿the￿case￿of￿exempt￿organizations,￿the
reduced￿dividend￿withholding￿tax￿rate￿(or￿exemption￿from￿withholding)￿can￿be￿applied￿at￿the￿source￿upon￿payment￿of
the￿dividends,￿provided￿that￿the￿proper￿forms￿have￿been￿filed￿in￿advance￿of￿the￿payment.￿Exempt￿organizations￿remain
subject￿to￿the￿statutory￿withholding￿rate￿of￿15.0￿percent￿and￿are￿required￿to￿file￿for￿a￿refund￿of￿such￿withholding.
A￿Non-resident￿Holder￿may￿not￿claim￿the￿benefits￿of￿the￿Tax￿Treaty￿unless￿(i)￿he/she￿is￿a￿resident￿of￿the￿United￿States￿as
defined￿therein,￿or￿(ii)￿he/she￿is￿deemed￿to￿be￿a￿resident￿on￿the￿basis￿of￿the￿provisions￿of￿article￿24(4)￿of￿the￿Tax￿Treaty,
and￿(iii)￿his￿or￿her￿entitlement￿to￿those￿benefits￿is￿not￿limited￿by￿the￿provisions￿of￿article￿26￿(limitation￿on￿benefits)￿of￿the
Tax￿Treaty.

Dividend Stripping Rules
Under￿Dutch￿tax￿legislation￿regarding￿anti-dividend￿stripping,￿no￿exemption￿from,￿or￿refund￿of,￿Dutch￿dividend
withholding￿tax￿is￿granted￿if￿the￿recipient￿of￿dividends￿paid￿by￿us￿is￿not￿considered￿the￿beneficial￿owner￿of￿such
dividends.

Gift or Inheritance Taxes
Dutch￿gift￿or￿inheritance￿taxes￿will￿not￿be￿levied￿on￿the￿transfer￿of￿ordinary￿shares￿by￿way￿of￿gift,￿or￿upon￿the￿death￿of￿a
Non-resident￿Holder,￿unless:

(1)￿The￿transfer￿is￿construed￿as￿an￿inheritance￿or￿as￿a￿gift￿made￿by￿or￿on￿behalf￿of￿a￿person￿who,￿at￿the￿time￿of￿the￿gift￿or
death,￿is￿deemed￿to￿be,￿resident￿of￿the￿Netherlands;￿or

(2)￿The￿ordinary￿shares￿are￿attributable￿to￿an￿enterprise￿or￿part￿thereof￿that￿is￿carried￿on￿through￿a￿permanent
establishment￿or￿a￿permanent￿representative￿in￿the￿Netherlands.

Gift￿tax￿and￿inheritance￿tax￿are￿levied￿on￿the￿beneficiary.￿For￿purposes￿of￿Dutch￿gift￿and￿inheritance￿tax,￿an￿individual
of￿Dutch￿nationality￿is￿deemed￿to￿be￿a￿resident￿of￿the￿Netherlands￿if￿he￿has￿been￿a￿resident￿thereof￿at￿any￿time￿during
the￿ten￿years￿preceding￿the￿time￿of￿the￿gift￿or￿death.￿For￿purposes￿of￿Dutch￿gift￿tax,￿a￿person￿not￿possessing￿Dutch
nationality￿is￿deemed￿to￿be￿a￿resident￿of￿the￿Netherlands￿if￿he/she￿has￿resided￿therein￿at￿any￿time￿in￿the￿twelve￿months
preceding￿the￿gift.

Value Added Tax
No￿Dutch￿value￿added￿tax￿is￿imposed￿on￿dividends￿in￿respect￿of￿our￿ordinary￿shares￿or￿on￿the￿transfer￿of￿our￿shares.

Residence
A￿Non-resident￿Holder￿will￿not￿become￿resident,￿or￿be￿deemed￿to￿be￿resident,￿in￿the￿Netherlands￿solely￿as￿a￿result￿of
holding￿our￿ordinary￿shares￿or￿of￿the￿execution,￿performance,￿delivery￿and/or￿enforcement￿of￿rights￿in￿respect￿of￿our
ordinary￿shares.

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United States Taxation
The￿following￿is￿a￿discussion￿of￿the￿material￿United￿States￿federal￿income￿tax￿consequences￿relating￿to￿the￿acquisition,
ownership￿and￿disposition￿of￿Ordinary￿Shares￿by￿a￿United￿States￿Holder￿(as￿defined￿below)￿acting￿in￿the￿capacity￿of￿a
beneficial￿owner￿who￿is￿not￿a￿tax￿resident￿of￿the￿Netherlands.￿This￿discussion￿deals￿only￿with￿Ordinary￿Shares￿held￿as
capital￿assets￿and￿does￿not￿deal￿with￿the￿tax￿consequences￿applicable￿to￿all￿categories￿of￿investors,￿some￿of￿which
(such￿as￿tax-exempt￿entities,￿financial￿institutions,￿regulated￿investment￿companies,￿dealers￿in￿securities/traders￿in
securities￿that￿elect￿a￿mark-to-market￿method￿of￿accounting￿for￿securities￿holdings,￿insurance￿companies,￿investors
owning￿directly,￿indirectly￿or￿constructively￿10.0￿percent￿or￿more￿of￿ASML's￿outstanding￿voting￿shares,￿investors￿who
hold￿Ordinary￿Shares￿as￿part￿of￿hedging￿or￿conversion￿transactions￿and￿investors￿whose￿functional￿currency￿is￿not
the￿U.S.￿dollar)￿may￿be￿subject￿to￿special￿rules.￿In￿addition,￿the￿discussion￿does￿not￿address￿any￿alternative￿minimum
tax￿or￿any￿state,￿local,￿FIRPTA￿related￿United￿States￿federal￿income￿tax￿consequences,￿or￿non-United￿States￿tax
consequences.

This￿discussion￿is￿based￿on￿the￿U.S.-Dutch￿Income￿Tax￿Treaty￿("Treaty")￿and￿the￿Internal￿Revenue￿Code￿of￿1986,
as￿amended￿to￿the￿date￿hereof,￿final,￿temporary￿and￿proposed￿Treasury￿Department￿regulations￿promulgated,￿and
administrative￿and￿judicial￿interpretations￿thereof,￿changes￿to￿any￿of￿which￿subsequent￿to￿the￿date￿hereof,￿possibly￿with
retroactive￿effect,￿may￿affect￿the￿tax￿consequences￿described￿herein.￿In￿addition,￿there￿can￿be￿no￿assurance￿that￿the
Internal￿Revenue￿Service￿("IRS")￿will￿not￿challenge￿one￿or￿more￿of￿the￿tax￿consequences￿described￿herein,￿and￿ASML
has￿not￿obtained,￿nor￿does￿ASML￿intend￿to￿obtain,￿a￿ruling￿from￿the￿IRS￿or￿an￿opinion￿of￿counsel￿with￿respect￿to￿the
United￿States￿federal￿income￿tax￿consequences￿of￿acquiring￿or￿holding￿shares.￿Prospective￿purchasers￿of￿Ordinary
Shares￿are￿advised￿to￿consult￿their￿tax￿advisers￿with￿respect￿to￿their￿particular￿circumstances￿and￿with￿respect￿to￿the
effects￿of￿United￿States￿federal,￿state,￿local￿or￿non-United￿States￿tax￿laws￿to￿which￿they￿may￿be￿subject.

As￿used￿herein,￿the￿term￿‘United￿States￿Holder’￿means￿a￿beneficial￿owner￿of￿Ordinary￿Shares￿for￿United￿States￿federal
income￿tax￿purposes￿whose￿holding￿of￿such￿Ordinary￿Shares￿does￿not￿form￿part￿of￿the￿business￿property￿or￿assets￿of￿a
permanent￿establishment￿or￿fixed￿base￿in￿the￿Netherlands;￿who￿is￿fully￿entitled￿to￿the￿benefits￿of￿the￿Treaty￿in￿respect￿of
such￿Ordinary￿Shares;￿and￿is:

• an￿individual￿citizen￿or￿tax￿resident￿of￿the￿United￿States;
• a￿corporation￿or￿other￿entity￿treated￿as￿a￿corporation￿for￿United￿States￿federal￿income￿tax￿purposes￿created￿or

organized￿in￿or￿under￿the￿laws￿of￿the￿United￿States￿or￿of￿any￿political￿subdivision￿thereof;

• an￿estate￿of￿which￿the￿income￿is￿subject￿to￿United￿States￿federal￿income￿taxation￿regardless￿of￿its￿source;￿or
• a￿trust￿whose￿administration￿is￿subject￿to￿the￿primary￿supervision￿of￿a￿court￿within￿the￿United￿States￿and￿which￿has

one￿or￿more￿United￿States￿persons￿who￿have￿the￿authority￿to￿control￿all￿of￿its￿substantial￿decisions.

If￿an￿entity￿treated￿as￿a￿partnership￿for￿United￿States￿federal￿income￿tax￿purposes￿owns￿ordinary￿shares,￿the￿United
States￿federal￿income￿tax￿treatment￿of￿a￿partner￿in￿such￿partnership￿will￿generally￿depend￿upon￿the￿status￿and￿tax
residency￿of￿the￿partner￿and￿the￿activities￿of￿the￿partnership.￿A￿partnership￿that￿owns￿Ordinary￿Shares￿and￿the￿partners
in￿such￿partnership￿should￿consult￿their￿tax￿advisors￿about￿the￿United￿States￿federal￿income￿tax￿consequences￿of
holding￿and￿disposing￿of￿the￿ordinary￿Shares.

Passive Foreign Investment Company Considerations
ASML￿believes￿it￿was￿not￿a￿Passive￿Foreign￿Investment￿Company￿("PFIC")￿for￿U.S.￿federal￿income￿tax￿purposes￿in￿2012
and￿that￿it￿will￿not￿be￿a￿PFIC￿in￿2013.￿However,￿as￿PFIC￿status￿is￿a￿factual￿matter￿that￿must￿be￿determined￿annually￿at
the￿close￿of￿each￿taxable￿year,￿there￿can￿be￿no￿certainty￿as￿to￿ASML’s￿actual￿PFIC￿status￿in￿any￿particular￿year￿until
the￿close￿of￿the￿taxable￿year￿in￿question.￿ASML￿has￿not￿conducted￿a￿detailed￿study￿at￿this￿time￿to￿confirm￿its￿non-
PFIC￿status.￿If￿ASML￿were￿treated￿as￿a￿PFIC￿in￿any￿year￿during￿which￿a￿United￿States￿Holder￿owned￿common￿shares,
certain￿adverse￿tax￿consequences￿could￿apply.￿Investors￿should￿consult￿their￿tax￿advisors￿with￿respect￿to￿any￿PFIC
considerations.

Taxation￿of￿Dividends
United￿States￿Holders￿should￿generally￿include￿in￿gross￿income,￿as￿foreign-source￿dividend￿income￿the￿gross￿amount
of￿any￿non-liquidating￿distribution￿(before￿reduction￿for￿Dutch￿withholding￿taxes)￿ASML￿makes￿out￿of￿its￿current￿or
accumulated￿earnings￿and￿profits￿(as￿determined￿for￿United￿States￿federal￿income￿tax￿purposes)￿when￿the￿distribution
is￿actually￿or￿constructively￿received￿by￿the￿United￿States￿Holder.￿Distributions￿will￿not￿be￿eligible￿for￿the￿dividends-
received￿deduction￿generally￿allowed￿to￿United￿States￿corporations￿in￿respect￿of￿dividends￿received￿from￿other￿United
States￿corporations.￿The￿amount￿of￿the￿dividend￿distribution￿includible￿in￿income￿of￿a￿United￿States￿Holder￿should￿be
the￿U.S.￿dollar￿value￿of￿the￿foreign￿currency￿(e.g.￿euros)￿paid,￿determined￿by￿the￿spot￿rate￿of￿exchange￿on￿the￿date￿of￿the
distribution,￿regardless￿of￿whether￿the￿payment￿is￿in￿fact￿converted￿into￿U.S.￿dollars.￿Distributions￿in￿excess￿of￿current
and￿accumulated￿earnings￿and￿profits,￿as￿determined￿for￿United￿States￿federal￿income￿tax￿purposes,￿will￿be￿treated
as￿a￿non-taxable￿return￿of￿capital￿to￿the￿extent￿of￿the￿United￿States￿Holder’s￿U.S.￿tax￿basis￿in￿the￿Ordinary￿Shares￿and

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thereafter￿as￿taxable￿capital￿gain.￿ASML￿presently￿does￿not￿maintain￿calculations￿of￿its￿earnings￿and￿profits￿under￿United
States￿federal￿income￿tax￿principles.￿If￿ASML￿does￿not￿report￿to￿a￿United￿States￿Holder￿the￿portion￿of￿a￿distribution
that￿exceeds￿earnings￿and￿profits,￿the￿distribution￿will￿generally￿be￿taxable￿as￿a￿dividend￿even￿if￿that￿distribution￿would
otherwise￿be￿treated￿as￿a￿non-taxable￿return￿of￿capital￿or￿as￿capital￿gain￿under￿the￿rules￿described￿above.

Subject￿to￿limitations￿provided￿in￿the￿United￿States￿Internal￿Revenue￿Code,￿a￿United￿States￿Holder￿may￿generally
deduct￿from￿its￿United￿States￿federal￿taxable￿income,￿or￿credit￿against￿its￿United￿States￿federal￿income￿tax￿liability,
the￿amount￿of￿qualified￿Dutch￿withholding￿taxes.￿However,￿Dutch￿withholding￿tax￿may￿be￿credited￿only￿if￿the￿United
States￿Holder￿does￿not￿claim￿a￿deduction￿for￿any￿Dutch￿or￿other￿non-United￿States￿taxes￿paid￿or￿accrued￿in￿that￿year.
In￿addition,￿Dutch￿dividend￿withholding￿taxes￿will￿likely￿not￿be￿creditable￿against￿the￿United￿States￿Holder’s￿United
States￿tax￿liability￿to￿the￿extent￿ASML￿is￿not￿required￿to￿pay￿over￿the￿amount￿withheld￿to￿the￿Dutch￿Tax￿Administration.
Currently,￿a￿Dutch￿corporation￿that￿receives￿dividends￿from￿qualifying￿non-Dutch￿subsidiaries￿may￿credit￿source￿country
tax￿withheld￿from￿those￿dividends￿against￿Dutch￿withholding￿tax￿imposed￿on￿a￿dividend￿paid￿by￿a￿Dutch￿corporation,￿up
to￿a￿maximum￿of￿3.0￿percent￿of￿the￿dividend￿paid￿by￿the￿Dutch￿corporation.￿The￿credit￿reduces￿the￿amount￿of￿dividend
withholding￿that￿ASML￿is￿required￿to￿pay￿to￿the￿Dutch￿Tax￿Administration￿but￿does￿not￿reduce￿the￿amount￿of￿tax￿ASML
is￿required￿to￿withhold￿from￿dividends.

For￿U.S.￿foreign￿tax￿credit￿purposes,￿dividends￿paid￿by￿ASML￿generally￿will￿be￿treated￿as￿foreign-source￿income￿and￿as
‘passive￿category￿income’￿(or￿in￿the￿case￿of￿certain￿holders,￿as￿‘general￿category￿income’).￿Gains￿or￿losses￿realized￿by
a￿United￿States￿Holder￿on￿the￿sale￿or￿exchange￿of￿Ordinary￿Shares￿generally￿will￿be￿treated￿as￿U.S.-source￿gain￿or￿loss.
The￿rules￿governing￿the￿foreign￿tax￿credit￿are￿complex￿and￿ASML￿suggests￿that￿each￿United￿States￿Holder￿consult￿his￿or
her￿own￿tax￿advisor￿to￿determine￿whether,￿and￿to￿what￿extent,￿a￿foreign￿tax￿credit￿will￿be￿available.

Dividends￿received￿by￿a￿United￿States￿Holder￿will￿generally￿be￿taxed￿at￿ordinary￿income￿tax￿rates.￿However,￿the￿Jobs
and￿Growth￿Tax￿Reconciliation￿Act￿of￿2003,￿as￿amended￿by￿the￿Tax￿Increase￿and￿Prevention￿Act￿of￿2005￿and￿the￿Tax
Relief,￿Unemployment￿Insurance￿Reauthorization,￿and￿Job￿Creation￿Act￿of￿2010￿￿reduce￿to￿15.0￿percent￿the￿maximum
tax￿rate￿for￿certain￿dividends￿received￿by￿individuals￿through￿taxable￿years￿beginning￿on￿or￿before￿December￿31,￿2012,
so￿long￿as￿certain￿exclusions￿do￿not￿apply￿and￿the￿stock￿has￿been￿held￿for￿at￿least￿60￿days￿during￿the￿121-day￿period
beginning￿60￿days￿before￿the￿ex-dividend￿date.￿Dividends￿received￿from￿‘qualified￿foreign￿corporations’￿generally￿qualify
for￿the￿reduced￿rate.￿A￿non-United￿States￿corporation￿(other￿than￿a￿passive￿foreign￿investment￿company)￿generally￿will
be￿considered￿to￿be￿a￿qualified￿foreign￿corporation￿if:￿(i)￿the￿shares￿of￿the￿non-United￿States￿corporation￿are￿readily
tradable￿on￿an￿established￿securities￿market￿in￿the￿United￿States￿or￿(ii)￿the￿non-United￿States￿corporation￿is￿eligible￿for
the￿benefits￿of￿a￿comprehensive￿income￿tax￿treaty￿with￿the￿United￿States￿that￿has￿been￿identified￿as￿a￿qualifying￿treaty
and￿contains￿an￿exchange￿of￿information￿program.￿Individual￿United￿States￿Holders￿should￿consult￿their￿tax￿advisors
regarding￿the￿impact￿of￿this￿provision￿on￿their￿particular￿situations.

Dividends￿paid￿by￿ASML￿generally￿will￿constitute￿‘portfolio￿income’￿for￿purposes￿of￿the￿limitations￿on￿the￿use￿of￿passive
activity￿losses￿(and,￿therefore,￿generally￿may￿not￿be￿offset￿by￿passive￿activity￿losses)￿and￿as￿‘investment￿income’￿for
purposes￿of￿the￿limitation￿on￿the￿deduction￿of￿investment￿interest￿expense.

Taxation￿on￿Sale￿or￿Other￿Disposition￿of￿Ordinary￿Shares
Upon￿a￿sale￿or￿other￿disposition￿of￿Ordinary￿Shares,￿a￿United￿States￿Holder￿will￿generally￿recognize￿capital￿gain￿or￿loss
for￿United￿States￿federal￿income￿tax￿purposes￿in￿an￿amount￿equal￿to￿the￿difference￿between￿the￿amount￿realized,￿if￿paid
in￿U.S.￿dollars,￿or￿the￿U.S.￿dollar￿value￿of￿the￿amount￿realized￿(determined￿at￿the￿spot￿rate￿on￿the￿settlement￿date￿of￿the
sale)￿if￿proceeds￿are￿paid￿in￿currency￿other￿than￿the￿U.S.￿dollar,￿as￿the￿case￿may￿be,￿and￿the￿United￿States￿Holder’s￿U.S.
tax￿basis￿(determined￿in￿U.S.￿dollars)￿in￿such￿Ordinary￿Shares.￿Generally,￿the￿capital￿gain￿or￿loss￿will￿be￿long-term￿capital
gain￿or￿loss￿if￿the￿holding￿period￿of￿the￿United￿States￿Holder￿in￿the￿Ordinary￿Shares￿exceeds￿one￿year￿at￿the￿time￿of￿the
sale￿or￿other￿disposition.￿The￿deductibility￿of￿capital￿losses￿is￿subject￿to￿limitations￿for￿United￿States￿federal￿income￿tax
purposes.￿Gain￿or￿loss￿from￿the￿sale￿or￿other￿disposition￿of￿Ordinary￿Shares￿generally￿will￿be￿treated￿as￿United￿States
source￿income￿or￿loss￿for￿United￿States￿foreign￿tax￿credit￿purposes.￿Generally,￿any￿gain￿or￿loss￿resulting￿from￿currency
fluctuations￿during￿the￿period￿between￿the￿date￿of￿the￿sale￿of￿the￿Ordinary￿Shares￿and￿the￿date￿the￿sale￿proceeds￿are
converted￿into￿U.S.￿dollars￿will￿be￿treated￿as￿ordinary￿income￿or￿loss￿from￿sources￿within￿the￿United￿States.￿Each￿United
States￿Holder￿should￿consult￿his￿or￿her￿tax￿advisor￿with￿regard￿to￿the￿translation￿rules￿applicable￿when￿computing￿its
adjusted￿U.S.￿tax￿basis￿and￿the￿amount￿realized￿upon￿a￿sale￿or￿other￿disposition￿of￿its￿Ordinary￿Shares￿if￿purchased￿in,
or￿sold￿or￿disposed￿of￿for,￿a￿currency￿other￿than￿U.S.￿dollar.

Information￿Reporting￿and￿Backup￿Withholding
Information￿returns￿may￿be￿filed￿with￿the￿IRS￿in￿connection￿with￿payments￿on￿the￿Ordinary￿Shares￿or￿proceeds￿from￿a
sale,￿redemption￿or￿other￿disposition￿of￿the￿Ordinary￿Shares.￿A￿‘backup￿withholding’￿tax￿may￿be￿applied￿to,￿and￿withheld
from,￿these￿payments￿if￿the￿beneficial￿owner￿fails￿to￿provide￿a￿correct￿taxpayer￿identification￿number￿to￿the￿paying￿agent
and￿to￿comply￿with￿certain￿certification￿procedures￿or￿otherwise￿establish￿an￿exemption￿from￿backup￿withholding.￿Any

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amounts￿withheld￿under￿the￿backup￿withholding￿rules￿might￿be￿refunded￿(or￿credited￿against￿the￿beneficial￿owner’s
United￿States￿federal￿income￿tax￿liability,￿if￿any)￿depending￿on￿the￿facts￿and￿provided￿that￿the￿required￿information￿is
furnished￿to￿the￿IRS.

The￿discussion￿set￿out￿above￿is￿included￿for￿general￿information￿only￿and￿may￿not￿be￿applicable￿depending￿upon￿a
holder’s￿particular￿situation.￿Holders￿should￿consult￿their￿tax￿advisors￿with￿respect￿to￿the￿tax￿consequences￿to￿them￿of
the￿purchase,￿ownership￿and￿disposition￿of￿shares￿including￿the￿tax￿consequences￿under￿state,￿local￿and￿other￿tax￿laws
and￿the￿possible￿effects￿of￿changes￿in￿United￿States￿federal￿and￿other￿tax￿laws.

F. Dividends and Paying Agents
Not￿applicable.

G. Statement by Experts
Not￿applicable.

H. Documents on Display
We￿are￿subject￿to￿certain￿reporting￿requirements￿of￿the￿US￿Securities￿Exchange￿Act￿of￿1934￿(the￿"Exchange￿Act").￿As
a￿"foreign￿private￿issuer",￿we￿are￿exempt￿from￿the￿rules￿under￿the￿Exchange￿Act￿prescribing￿certain￿disclosure￿and
procedural￿requirements￿for￿proxy￿solicitations,￿and￿our￿officers,￿directors￿and￿principal￿shareholders￿are￿exempt￿from
the￿reporting￿and￿"short-swing"￿profit￿recovery￿provisions￿contained￿in￿Section￿16￿of￿the￿Exchange￿Act,￿with￿respect
to￿their￿purchases￿and￿sales￿of￿shares.￿In￿addition,￿we￿are￿not￿required￿to￿file￿reports￿and￿financial￿statements￿with
the￿Commission￿as￿frequently￿or￿as￿promptly￿as￿companies￿that￿are￿not￿foreign￿private￿issuers￿whose￿securities￿are
registered￿under￿the￿Exchange￿Act.￿However,￿we￿are￿required￿to￿file￿with￿the￿Commission,￿within￿four￿months￿after
the￿end￿of￿each￿fiscal￿year,￿an￿annual￿report￿on￿Form￿20-F￿containing￿financial￿statements￿audited￿by￿an￿independent
accounting￿firm￿and￿interactive￿data￿comprising￿financial￿statements￿in￿extensible￿business￿reporting￿language.
We￿publish￿unaudited￿interim￿financial￿information￿after￿the￿end￿of￿each￿quarter.￿We￿furnish￿this￿quarterly￿financial
information￿to￿the￿Commission￿under￿cover￿of￿a￿Form￿6-K.

Documents￿we￿file￿with￿the￿Commission￿are￿publicly￿available￿at￿its￿public￿reference￿room￿at￿100￿F￿Street,￿N.E.,
Washington,￿DC￿20549.￿The￿Commission￿also￿maintains￿a￿website￿that￿contains￿reports￿and￿other￿information
regarding￿registrants￿that￿are￿required￿to￿file￿electronically￿with￿the￿Commission.￿The￿address￿of￿this￿website￿is￿http://
www.sec.gov.￿Please￿call￿the￿Commission￿at￿1-800-SEC-0330￿for￿further￿information￿on￿the￿operation￿of￿the￿public
reference￿facilities.

I. Subsidiary Information
See￿Item￿4.C.￿"Organizational￿Structure".

Item 11 Quantitative and Qualitative Disclosures About Market Risk

We￿are￿exposed￿to￿certain￿financial￿risks￿such￿as￿market￿risk￿(including￿foreign￿currency￿exchange￿risk￿and￿interest￿rate
risk),￿credit￿risk,￿liquidity￿risk￿and￿capital￿risk.￿The￿overall￿risk￿management￿program￿focuses￿on￿the￿unpredictability
of￿financial￿markets￿and￿seeks￿to￿minimize￿potentially￿adverse￿effects￿on￿our￿financial￿performance.￿We￿use￿derivative
financial￿instruments￿to￿hedge￿certain￿risk￿exposures.￿None￿of￿our￿transactions￿are￿entered￿into￿for￿trading￿or
speculative￿purposes.￿We￿believe￿that￿market￿information￿is￿the￿most￿reliable￿and￿transparent￿measure￿for￿our￿derivative
financial￿instruments￿that￿are￿measured￿at￿fair￿value.￿To￿mitigate￿the￿risk￿that￿any￿of￿our￿counterparties￿in￿hedging
transactions￿is￿unable￿to￿meets￿its￿obligations,￿we￿only￿enter￿into￿transactions￿with￿a￿limited￿number￿of￿major￿financial
institutions￿that￿have￿high￿credit￿ratings￿and￿closely￿monitor￿the￿creditworthiness￿of￿our￿counterparties.￿Concentration
risk￿is￿mitigated￿by￿limiting￿the￿exposure￿to￿a￿single￿counterparty.￿Our￿risk￿management￿program￿focuses￿appropriately
on￿the￿current￿environment￿of￿uncertainty￿in￿the￿financial￿markets,￿especially￿in￿the￿euro-zone.

Foreign￿currency￿risk￿management
Our￿sales￿are￿predominately￿denominated￿in￿euros.￿Exceptions￿may￿occur￿on￿a￿customer￿by￿customer￿basis.￿Our￿cost￿of
sales￿and￿other￿expenses￿are￿mainly￿denominated￿in￿euros,￿to￿a￿certain￿extent￿in￿U.S.￿dollars￿and￿Japanese￿yen￿and￿to￿a
limited￿extent￿in￿other￿currencies.￿Therefore,￿we￿are￿exposed￿to￿foreign￿currency￿exchange￿risk.

It￿is￿our￿policy￿to￿hedge￿material￿transaction￿exposures,￿such￿as￿forecasted￿sales￿and￿purchase￿transactions,￿and
material￿net￿remeasurement￿exposures,￿such￿as￿accounts￿receivable￿and￿payable.￿We￿hedge￿these￿exposures￿through

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the￿use￿of￿foreign￿exchange￿contracts.￿It￿is￿our￿policy￿not￿to￿hedge￿currency￿translation￿exposures￿resulting￿from￿net
equity￿investments￿in￿foreign￿subsidiaries.

Details￿of￿the￿forward￿foreign￿exchange￿contracts￿and￿hedging￿activities￿are￿included￿in￿Note￿3￿of￿our￿consolidated
financial￿statements.

Interest￿rate￿risk￿management
We￿have￿interest-bearing￿assets￿and￿liabilities￿that￿expose￿us￿to￿fluctuations￿in￿market￿interest￿rates.￿We￿use￿interest
rate￿swaps￿to￿align￿the￿interest-typical￿terms￿of￿interest-bearing￿liabilities￿with￿the￿interest-typical￿terms￿of￿interest-
bearing￿assets.￿There￿may￿be￿residual￿interest￿rate￿risk￿to￿the￿extent￿the￿asset￿and￿liability￿positions￿do￿not￿fully￿offset.

As￿part￿of￿our￿hedging￿policy,￿we￿use￿interest￿rate￿swaps￿to￿hedge￿changes￿in￿fair￿value￿of￿our￿Eurobond￿due￿to
changes￿in￿market￿interest￿rates,￿thereby￿offsetting￿the￿variability￿of￿future￿interest￿receipts￿on￿part￿of￿our￿cash￿and￿cash
equivalents.

Furthermore,￿as￿part￿of￿our￿hedging￿policy,￿we￿use￿interest￿rate￿swaps￿to￿hedge￿the￿variability￿of￿future￿interest￿cash
flows￿relating￿to￿certain￿of￿our￿operating￿lease￿obligations.

Details￿of￿the￿interest￿rate￿swaps￿and￿hedging￿activities￿are￿included￿in￿Note￿3￿of￿the￿consolidated￿financial￿statements.

Financial￿instruments
We￿use￿foreign￿exchange￿contracts￿to￿manage￿our￿currency￿risk￿and￿interest￿rate￿swaps￿to￿manage￿our￿interest￿rate￿risk.
The￿following￿table￿summarizes￿the￿notional￿amounts￿and￿estimated￿fair￿values￿of￿our￿financial￿instruments:

(in thousands)
Forward￿foreign￿exchange￿contracts¹
Interest￿rate￿swaps²

As of December 31 Notional amount
EUR
262,146
624,900

Fair Value
EUR
16,805
124,050

Notional amount
EUR
389,579
641,500

Fair Value
EUR
(23,999)
109,991

2012

2011

1 Relates￿to￿forward￿contracts￿assigned￿as￿a￿hedge￿to￿forecasted￿sales￿and￿purchase￿transactions￿and￿to￿monetary￿assets￿and￿liabilities,￿mainly￿in￿U.S.

dollar￿and￿Japanese￿Yen.

2 Relates￿to￿interest￿rate￿swaps￿assigned￿as￿a￿hedge￿to￿interest￿bearing￿assets￿and￿liabilities,￿mainly￿related￿to￿the￿Eurobond;￿the￿fair￿value￿of￿the

interest￿rate￿swaps￿includes￿accrued￿interest.

The￿valuation￿technique￿used￿to￿determine￿the￿fair￿value￿of￿forward￿foreign￿exchange￿contracts￿(used￿for￿hedging
purposes)￿approximates￿the￿Net￿Present￿Value￿technique,￿which￿is￿the￿estimated￿amount￿that￿a￿bank￿would￿receive￿or
pay￿to￿terminate￿the￿forward￿foreign￿exchange￿contracts￿at￿the￿reporting￿date,￿taking￿into￿account￿current￿interest￿rates
and￿current￿exchange￿rates.

The￿valuation￿technique￿used￿to￿determine￿the￿fair￿value￿of￿interest￿rate￿swaps￿(used￿for￿hedging￿purposes)￿is￿the
Net￿Present￿Value￿technique,￿which￿is￿the￿estimated￿amount￿that￿a￿bank￿would￿receive￿or￿pay￿to￿terminate￿the￿swap
agreements￿at￿the￿reporting￿date,￿taking￿into￿account￿current￿interest￿rates.

Sensitivity￿analysis￿financial￿instruments

Foreign currency sensitivity
We￿are￿mainly￿exposed￿to￿fluctuations￿in￿exchange￿rates￿between￿the￿euro￿and￿the￿U.S.￿dollar￿and￿the￿euro￿and￿the
Japanese￿yen.￿The￿following￿table￿details￿our￿sensitivity￿to￿a￿10.0￿percent￿strengthening￿of￿foreign￿currencies￿against
the￿euro.￿The￿sensitivity￿analysis￿includes￿foreign￿currency￿denominated￿monetary￿items￿outstanding￿and￿adjusts￿their
translation￿at￿the￿period￿end￿for￿a￿10.0￿percent￿strengthening￿in￿foreign￿currency￿rates.￿A￿positive￿amount￿indicates￿an
increase￿in￿income￿before￿income￿taxes￿or￿other￿comprehensive￿income,￿as￿shown.

2012

2011

(in thousands)
U.S.￿dollar
Japanese￿yen
Other￿currencies
Total

Impact on income
before income taxes
EUR
(5,646)
465
(7,674)
(12,855)

Impact on other
comprehensive
income
EUR
13,669
(3,218)
-
10,451

Impact on income
before income taxes
EUR
(2,317)
(902)
(3,628)
(6,847)

Impact on other
comprehensive
income
EUR
17,293
(6,255)
-
11,038

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It￿is￿our￿policy￿to￿limit￿the￿effects￿of￿currency￿exchange￿rate￿fluctuations￿on￿our￿consolidated￿statements￿of￿operations.
The￿increased￿effect￿on￿income￿before￿income￿taxes￿in￿2012￿compared￿with￿2011￿reflects￿our￿higher￿net￿exposure
at￿year￿end.￿The￿negative￿effect￿on￿income￿before￿income￿taxes￿as￿presented￿in￿the￿table￿above￿for￿2012￿is￿mainly
attributable￿to￿timing￿differences￿between￿the￿arising￿and￿hedging￿of￿exposures.

The￿effects￿of￿the￿fair￿value￿movements￿of￿cash￿flow￿hedges,￿entered￿into￿for￿U.S.￿dollar￿and￿Japanese￿yen￿transactions
are￿recognized￿in￿other￿comprehensive￿income.￿The￿decreased￿U.S.￿dollar￿and￿Japanese￿yen￿effect￿on￿other
comprehensive￿income￿in￿2012￿compared￿with￿2011￿is￿the￿result￿of￿a￿decrease￿in￿outstanding￿sales￿and￿purchase
hedges.

For￿a￿10.0￿percent￿weakening￿of￿the￿foreign￿currencies￿against￿the￿euro,￿there￿would￿be￿approximately￿an￿equal￿but
opposite￿effect￿on￿the￿income￿before￿income￿taxes￿and￿other￿comprehensive￿income.

Interest￿rate￿sensitivity
The￿sensitivity￿analysis￿below￿has￿been￿determined￿based￿on￿the￿exposure￿to￿interest￿rates￿for￿both￿derivative￿financial
and￿non-derivative￿financial￿instruments￿at￿the￿balance￿sheet￿date￿with￿the￿stipulated￿change￿taking￿place￿at￿the
beginning￿of￿the￿financial￿year￿and￿held￿constant￿throughout￿the￿reporting￿period.￿The￿table￿below￿shows￿the￿effect￿of￿a
1.0￿percentage￿point￿increase￿in￿interest￿rates￿on￿our￿income￿before￿income￿taxes￿and￿other￿comprehensive￿income.￿A
positive￿amount￿indicates￿an￿increase￿in￿income￿before￿income￿taxes￿and￿other￿comprehensive￿income.

Effect￿of￿a￿1.0￿percent￿point￿increase￿in￿interest￿rates

(in thousands)

2012

2011

Impact on
income before
income taxes
EUR
20,706

Impact on other
comprehensive
income
EUR
1,488

Impact on
income before
income taxes
EUR
21,020

Impact on other
comprehensive
income
EUR
1,691

The￿positive￿effect￿on￿income￿before￿income￿taxes￿mainly￿relates￿to￿our￿cash￿and￿cash￿equivalents￿and￿short-term
investments.￿The￿positive￿effect￿on￿other￿comprehensive￿income,￿is￿mainly￿attributable￿to￿the￿fair￿value￿movements￿of
the￿interest￿rate￿swaps￿designated￿as￿cash￿flow￿hedges.

For￿a￿1.0￿percentage￿point￿decrease￿in￿interest￿rates￿there￿would￿be￿a￿lower￿opposite￿effect￿on￿income￿before￿income
taxes￿and￿other￿comprehensive￿income￿due￿to￿the￿current￿interest￿rates.

See￿Note￿3￿to￿our￿consolidated￿financial￿statements￿for￿more￿information￿on￿our￿financial￿risk￿management.

Item 12 Description of Securities Other Than Equity Securities

Not￿applicable.

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Part II

Item 13 Defaults, Dividend Arrearages and Delinquencies

None.

Item 14 Material Modifications to the Rights of Security Holders and Use of Proceeds

None.

Item 15 Controls and Procedures

Disclosure Controls and Procedures
As￿of￿December￿31,￿2012,￿the￿management￿of￿ASML￿conducted￿an￿evaluation,￿under￿the￿supervision￿and￿with￿the
participation￿of￿ASML’s￿Chief￿Executive￿Officer￿and￿Chief￿Financial￿Officer,￿of￿the￿effectiveness￿of￿the￿design￿and
operation￿of￿ASML’s￿disclosure￿controls￿and￿procedures￿(as￿defined￿in￿Rule￿13a-15(e)￿under￿the￿Exchange￿Act).￿Based
on￿such￿evaluation,￿ASML’s￿Chief￿Executive￿Officer￿and￿Chief￿Financial￿Officer￿have￿concluded￿that,￿as￿of￿December￿31,
2012,￿ASML’s￿disclosure￿controls￿and￿procedures￿are￿effective￿in￿recording,￿processing,￿summarizing￿and￿reporting,￿on
a￿timely￿basis,￿information￿required￿to￿be￿disclosed￿by￿ASML￿in￿the￿reports￿that￿it￿files￿or￿submits￿under￿the￿Exchange
Act￿and￿are￿effective￿in￿ensuring￿that￿information￿required￿to￿be￿disclosed￿by￿ASML￿is￿accumulated￿and￿communicated
to￿ASML’s￿management,￿including￿ASML’s￿Chief￿Executive￿Officer￿and￿Chief￿Financial￿Officer,￿as￿appropriate￿to￿allow
timely￿decisions￿regarding￿required￿disclosure.

Management's Report on Internal Control over Financial Reporting
ASML’s￿management￿is￿responsible￿for￿establishing￿and￿maintaining￿adequate￿internal￿control￿over￿financial￿reporting,
as￿defined￿in￿Rule￿13a-15(f)￿under￿the￿Exchange￿Act,￿for￿ASML.￿Under￿the￿supervision￿and￿with￿the￿participation
of￿ASML’s￿Chief￿Executive￿Officer￿and￿Chief￿Financial￿Officer,￿ASML’s￿management￿conducted￿an￿evaluation￿of￿the
effectiveness￿of￿ASML’s￿internal￿control￿over￿financial￿reporting￿as￿of￿December￿31,￿2012￿based￿upon￿the￿framework
in￿"Internal￿Control￿–￿Integrated￿Framework"￿issued￿by￿the￿Committee￿of￿Sponsoring￿Organizations￿of￿the￿Treadway
Commission.￿Based￿on￿that￿evaluation,￿management￿has￿concluded￿that￿ASML’s￿internal￿control￿over￿financial￿reporting
was￿effective￿as￿of￿December￿31,￿2012￿at￿providing￿reasonable￿assurance￿regarding￿the￿reliability￿of￿financial￿reporting
and￿the￿preparation￿of￿financial￿statements￿for￿external￿purposes￿in￿conformity￿with￿US￿GAAP.

Deloitte￿Accountants￿B.V.,￿an￿independent￿registered￿public￿accounting￿firm,￿has￿audited￿the￿consolidated￿financial
statements￿included￿in￿Item￿18￿"Financial￿Statements"￿and,￿as￿part￿of￿the￿audit,￿has￿issued￿a￿report,￿included￿herein,￿on
the￿effectiveness￿of￿ASML’s￿internal￿control￿over￿financial￿reporting.

Changes in Internal Control over Financial Reporting
During￿the￿year￿ended￿December￿31,￿2012￿there￿have￿been￿no￿changes￿in￿our￿internal￿control￿over￿financial￿reporting
that￿have￿materially￿affected,￿or￿are￿reasonably￿likely￿to￿materially￿affect,￿our￿internal￿control￿over￿financial￿reporting.

Inherent Limitations of Disclosure Controls and Procedures in Internal Control over Financial Reporting
It￿should￿be￿noted￿that￿any￿system￿of￿controls,￿however￿well-designed￿and￿operated,￿can￿provide￿only￿reasonable,￿and
not￿absolute,￿assurance￿that￿the￿objectives￿of￿the￿system￿will￿be￿met.￿In￿addition,￿the￿design￿of￿any￿control￿system￿is
based￿in￿part￿upon￿certain￿assumptions￿about￿the￿likelihood￿of￿future￿events.

Item 16   

A. Audit Committee Financial Expert
Our￿Supervisory￿Board￿has￿determined￿that￿effective￿March￿18,￿2004,￿Mr.￿Fritz￿Fröhlich,￿an￿independent￿member￿of￿the
Supervisory￿Board,￿qualifies￿as￿the￿Audit￿Committee￿Financial￿Expert.￿See￿also￿Item￿6A.

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B. Code of Ethics
Within￿ASML,￿we￿use￿a￿code￿of￿ethics￿and￿conduct￿("Code￿of￿Conduct"),￿that￿focuses￿on￿the￿following￿five￿key￿areas:

show￿respect￿for￿people￿and￿planet;

1.
2. operate￿with￿integrity;
3. preserve￿intellectual￿property￿and￿other￿assets;
4. manage￿exposure￿by￿following￿processes;￿and
5.

adhere￿to￿the￿ASML￿business￿principles￿and￿applicable￿laws,￿and￿speak￿up.

The￿five￿key￿areas￿of￿the￿Code￿of￿Conduct￿are￿translated￿into￿a￿set￿of￿Business￿Principles,￿an￿internal￿set￿of￿practical
rules￿and￿procedures￿that￿support￿the￿ASML￿employees￿in￿their￿the￿day-to-day￿activities￿and￿decision￿making￿process.
The￿Code￿of￿Conduct￿is￿available￿on￿our￿website￿(www.asml.com).

Furthermore,￿in￿order￿to￿enhance￿adherence￿to￿and￿enforcement￿of￿the￿Code￿of￿Conduct￿and￿internal￿Business
Principles,￿we￿use￿a￿reporting￿procedure￿that￿provides￿for￿whistleblower￿protection￿when￿reporting￿fraud￿and￿other
breaches￿of￿the￿Code￿of￿Conduct￿and￿Business￿Principles.￿The￿reporting￿procedure￿is￿also￿posted￿on￿our￿website
(www.asml.com).

C. Principal Accountant Fees and Services
Deloitte￿Accountants￿B.V.￿has￿served￿as￿our￿independent￿registered￿public￿accounting￿firm￿for￿each￿of￿the￿three￿financial
years￿up￿to￿December￿31,￿2012.￿The￿following￿table￿sets￿out￿the￿aggregate￿fees￿for￿professional￿audit￿services￿and￿other
services￿rendered￿by￿Deloitte￿Accountants￿B.V.￿and￿its￿member￿firms￿and/or￿affiliates￿in￿2012￿and￿2011:

Year ended December 31
(in thousands)
Audit￿fees￿in￿relation￿to￿annual￿reports
Other￿audit￿fees
Audit-related￿fees
Tax￿fees
Other
￿
Principal accountant fees and services

2012  

Deloitte
Accountants
B.V.
EUR
1,002
-
149
-
-
￿ ￿

1,151

Deloitte
Network
EUR
-
352
-
353
247

￿

952

2011  

Deloitte
Accountants
B.V.
EUR
1,022
40
49
-
-
￿ ￿

1,111

Deloitte
Network
EUR
-
382
-
322
-

￿

704

Total
EUR
1,002
352
149
353
247

2,103

Total
EUR
1,022
422
49
322
-

1,815

Audit￿fees￿and￿other￿audit￿fees
Audit￿fees￿primarily￿relate￿to￿the￿audit￿of￿our￿annual￿consolidated￿financial￿statements￿set￿out￿in￿our￿Annual￿Report￿on
Form￿20-F,￿our￿Statutory￿Annual￿Report,￿agreed￿upon￿procedures￿on￿our￿quarterly￿financial￿results￿and￿services￿related
to￿statutory￿and￿regulatory￿filings￿of￿ASML￿Holding￿N.V.￿and￿its￿subsidiaries.

Audit-related￿fees
Audit-related￿fees￿mainly￿related￿to￿various￿audit￿services￿not￿related￿to￿the￿ASML's￿consolidated￿financial￿statements.

Tax￿fees
Tax￿fees￿can￿be￿detailed￿as￿follows:

Year ended December 31
(in thousands)
Corporate￿Income￿Tax￿compliance￿services
Tax￿assistance￿for￿expatriate￿employees
Other￿tax￿advisory￿and￿compliance
￿
Tax fees

2012
EUR
123
79
151
￿
353

2011
EUR
73
179
70
￿
322

The￿Audit￿Committee￿has￿approved￿the￿external￿audit￿plan￿and￿related￿audit￿fees￿for￿the￿year￿2012.￿The￿Audit
Committee￿has￿adopted￿a￿policy￿regarding￿audit￿and￿non-audit￿services,￿in￿consultation￿with￿Deloitte￿Accountants￿B.V.
This￿policy￿ensures￿the￿independence￿of￿our￿auditors￿by￿expressly￿setting￿forth￿all￿services￿that￿the￿auditors￿may￿not
perform￿and￿reinforcing￿the￿principle￿of￿independence￿regardless￿of￿the￿type￿of￿work￿performed.￿Certain￿non-audit
services,￿such￿as￿certain￿tax-related￿services￿and￿acquisition￿advisory￿services,￿are￿permitted.￿The￿Audit￿Committee￿pre-

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68

 
 
 
 
 
 
 
 
 
 
 
approves￿all￿audit￿and￿non-audit￿services￿not￿specifically￿prohibited￿under￿this￿policy￿and￿reviews￿the￿annual￿external
audit￿plan￿and￿any￿subsequent￿engagements.

The￿Audit￿Committee￿will￿monitor￿compliance￿with￿the￿new￿Dutch￿rules￿on￿non-audit￿services￿provided￿by￿our￿auditor,
which￿outlines￿strict￿separation￿of￿audit￿and￿advisory￿services￿for￿Dutch￿public￿interest￿entities.￿Furthermore,￿we￿will
evaluate￿the￿implication￿of￿the￿mandatory￿firm￿rotation￿(not￿applicable￿to￿financial￿years￿before￿January￿1,￿2016)￿which
applies￿to￿all￿Dutch￿public￿interest￿entities.

D. Exemptions from the Listing Standards for Audit Committees
Not￿applicable.

E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers
In￿addition￿to￿dividend￿payments,￿we￿intend￿to￿return￿cash￿to￿our￿shareholders￿on￿a￿regular￿basis￿through￿share
buybacks￿or￿capital￿repayment,￿subject￿to￿our￿actual￿and￿anticipated￿level￿of￿liquidity￿requirements,￿our￿current￿share
price,￿other￿market￿conditions￿and￿other￿relevant￿factors.￿

On￿April￿25,￿2012,￿the￿General￿Meeting￿of￿Shareholders￿authorized￿the￿repurchase￿of￿up￿to￿a￿maximum￿of￿two￿times￿10.0
percent￿of￿our￿issued￿share￿capital￿as￿of￿the￿date￿of￿authorization￿through￿October￿25,￿2013.

On￿January￿19,￿2011,￿we￿announced￿our￿intention￿to￿repurchase￿up￿to￿EUR￿1.0￿billion￿of￿our￿own￿shares￿within￿the
next￿two￿years.￿On￿January￿18,￿2012,￿we￿announced￿to￿increase￿the￿size￿of￿the￿program￿to￿a￿maximum￿amount￿of￿EUR
1,130￿million.￿During￿the￿period￿from￿January￿20,￿2011￿up￿to￿and￿including￿November￿22,￿2012,￿when￿the￿program￿was
completed,￿we￿had￿purchased￿36,952,634￿of￿our￿shares￿at￿an￿average￿price￿of￿EUR￿30.58￿per￿share.￿Of￿the￿shares
purchased,￿24,627,581￿have￿been￿cancelled￿with￿the￿remaining￿shares￿intended￿to￿be￿cancelled￿in￿2013.

Furthermore,￿on￿January￿18,￿2012,￿we￿announced￿our￿intention￿to￿purchase￿up￿to￿2.2￿million￿of￿additional￿shares￿during
2012￿for￿the￿purpose￿of￿covering￿outstanding￿employee￿stock￿and￿stock￿option￿plans.￿During￿the￿period￿from￿November
22,￿2012￿up￿to￿and￿including￿December￿14,￿2012,￿when￿the￿program￿was￿completed,￿a￿total￿number￿of￿2.2￿million￿shares
was￿purchased￿for￿a￿total￿amount￿of￿EUR￿105.2￿million￿at￿an￿average￿price￿of￿EUR￿47.81￿per￿share.￿These￿shares￿will￿be
held￿as￿treasury￿shares￿pending￿delivery￿pursuant￿to￿such￿plans.

Both￿programs￿had￿been￿suspended￿between￿July￿10,￿2012￿and￿October￿18,￿2012￿following￿the￿announcement￿of￿the
Customer￿Co-Investment￿Program￿on￿July￿9,￿2012.

The￿following￿table￿provides￿a￿summary￿of￿shares￿repurchased￿by￿ASML￿in￿2012￿(excluding￿the￿effect￿of￿the￿Synthetic
Share￿Buyback):

Period
January￿20￿-￿31,￿2012
February￿1￿-￿28,￿2012
March￿1￿-￿31,￿2012
April￿1￿-￿30,￿2012
May￿2￿-￿31,￿2012
June￿1￿-￿30,￿2012
July￿1￿-￿29,￿2012
August￿1￿-￿31,￿2012
September￿1￿-￿30,￿2012
October￿3￿-￿31,￿2012
November￿1￿-￿30,￿2012
December￿1￿-￿31,￿2012
￿
Total

Total number
of shares
purchased
2,132,366
1,025,407
949,726
654,169
1,219,480
1,133,550
428,000
-
-
1,153,112
3,240,099
1,542,149
￿
13,478,058

Average price
paid per Share
(EUR)
32.65
34.71
35.76
37.18
36.88
38.61
40.65
-
-
41.86
44.10
48.24
￿
39.71

Total number of shares
purchased as
part of publicly
announced plans
or programs
2,132,366
3,157,773
4,107,499
4,761,668
5,981,148
7,114,698
7,542,698
7,542,698
7,542,698
8,695,810
11,935,909
13,478,058
￿
￿

Maximum value of
shares that may yet
be purchased under
the program1
(EUR)
360,369,363
324,780,615
290,820,741
266,501,698
221,530,029
177,764,616
160,366,940
160,366,940
160,366,940
112,099,413
-
-
￿
￿

Maximum number of
shares that may yet be
purchased under the
program2
2,200,000
2,200,000
2,200,000
2,200,000
2,200,000
2,200,000
2,200,000
2,200,000
2,200,000
2,200,000
1,542,149
-
￿
￿

1 Program￿to￿purchase￿shares￿up￿to￿a￿maximum￿amount￿of￿EUR￿1,130￿million.￿We￿have￿or￿will￿cancel￿these￿shares.
2 Program￿to￿purchase￿up￿to￿2.2￿million￿shares￿for￿the￿purpose￿of￿covering￿outstanding￿employee￿stock￿and￿stock￿option￿plans.

At￿the￿EGM￿held￿on￿September￿7,￿2012,￿a￿resolution￿was￿passed￿to￿amend￿the￿Articles￿of￿Association￿in￿connection￿with
the￿Synthetic￿Share￿Buyback￿to￿be￿effected￿in￿connection￿with￿the￿Customer￿Co-Investment￿Program.￿We￿refer￿to￿Item
10￿B.￿"Memorandum￿and￿Articles￿of￿Association"￿for￿a￿summary￿description￿of￿these￿amendments.￿On￿November￿24,

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69

2012,￿we￿effectuated￿the￿amendments￿consisting￿of￿a￿repayment￿to￿shareholders￿(excluding￿participating￿customers)￿of
EUR￿9.18￿per￿ordinary￿share￿and￿the￿exchange￿of￿each￿100￿ASML￿ordinary￿shares￿for￿77￿ASML￿ordinary￿shares.

As￿a￿result￿of￿these￿amendments,￿which￿in￿substance￿constitute￿a￿Synthetic￿Share￿Buyback,￿we￿effectively￿repurchased
93,411,216￿shares￿at￿an￿average￿price￿of￿EUR￿39.91￿for￿a￿total￿amount￿of￿EUR￿3,728.3￿million.

Period
Share￿Buybacks
Synthetic￿Share￿Buyback
Share￿Buybacks
Share￿Buybacks
Share￿Buybacks
Synthetic￿Share￿Buyback
Share￿Buybacks
Total￿/￿Average1

Year
2006
2007
2007
2008
2011
2012
2012

Total amount paid
(in EUR millions)
677.2
1,011.9
359.8
87.6
700.0
3,728.3
535.2
3,371.7

Total Number of
Shares Purchased
40,385,139
55,093,409
17,000,000
5,000,000
25,674,576
93,411,216
13,478,058
156,631,182

￿

Average Price Paid
per Share
(EUR)
16.77
18.37
21.16
17.52
27.26
39.91
39.71
21.53

Reduction of Shares
Outstanding vs
Beginning of Year
(Percentage)
8.3
11.5
3.6
1.1
5.9
22.6
3.3
32.3

1

Totals,￿average￿and￿percentage￿are￿excluding￿the￿synthetic￿share￿buyback￿executed￿in￿2012￿as￿part￿of￿our￿Customer￿Co-Investment￿Program.￿The
percentage￿represents￿the￿reduction￿of￿shares￿outstanding￿compared￿to￿January￿1,￿2006.

F. Change in Registrant’s Certifying Accountant
Not￿applicable.

G. Corporate Governance
NASDAQ￿rules￿provide￿that￿foreign￿private￿issuers￿may￿follow￿home￿country￿practice￿in￿lieu￿of￿the￿NASDAQ￿corporate
governance￿standards￿subject￿to￿certain￿exceptions￿and￿except￿to￿the￿extent￿that￿such￿exemptions￿would￿be￿contrary￿to
US￿federal￿securities￿laws.￿The￿practices￿followed￿by￿ASML￿in￿lieu￿of￿NASDAQ￿rules￿are￿described￿below:

• ASML￿does￿not￿follow￿NASDAQ’s￿quorum￿requirements￿applicable￿to￿meetings￿of￿ordinary￿shareholders.￿In

accordance￿with￿Dutch￿law￿and￿Dutch￿generally￿accepted￿business￿practice,￿ASML’s￿Articles￿of￿Association￿provide
that￿there￿are￿no￿quorum￿requirements￿generally￿applicable￿to￿General￿Meetings￿of￿Shareholders.

• ASML￿does￿not￿follow￿NASDAQ’s￿requirements￿regarding￿the￿provision￿of￿proxy￿statements￿for￿General￿Meetings￿of

Shareholders.￿Dutch￿law￿does￿not￿have￿a￿regulatory￿regime￿for￿the￿solicitation￿of￿proxies:￿the￿solicitation￿of￿proxies￿is
not￿a￿generally￿accepted￿business￿practice￿in￿the￿Netherlands.￿ASML￿does￿provide￿shareholders￿with￿an￿agenda￿and
other￿relevant￿documents￿for￿the￿General￿Meeting￿of￿Shareholders.

• Dutch￿law￿requires￿that￿ASML’s￿external￿auditors￿be￿appointed￿by￿the￿AGM￿and￿not￿by￿the￿Audit￿Committee￿as

contemplated￿by￿NASDAQ￿rules.

• ASML￿does￿not￿follow￿NASDAQ's￿requirement￿regarding￿distribution￿to￿shareholders￿of￿copies￿of￿an￿Annual￿Report
containing￿audited￿financial￿statements￿prior￿to￿our￿AGM.￿The￿distribution￿of￿Annual￿Reports￿to￿shareholders￿is￿not
required￿under￿Dutch￿corporate￿law￿or￿Dutch￿securities￿laws,￿or￿by￿NYSE￿Euronext￿Amsterdam.￿Furthermore,￿it￿is
generally￿accepted￿business￿practice￿for￿Dutch￿companies￿not￿to￿distribute￿annual￿reports.￿In￿part,￿this￿is￿because
the￿Dutch￿system￿of￿bearer￿shares￿has￿made￿it￿impractical￿to￿keep￿a￿current￿list￿of￿holders￿of￿the￿bearer￿shares￿in
order￿to￿distribute￿the￿Annual￿Reports.￿Instead,￿we￿make￿our￿annual￿report￿available￿at￿our￿corporate￿head￿office
in￿the￿Netherlands￿(and￿at￿the￿offices￿of￿our￿Dutch￿listing￿agent￿as￿stated￿in￿the￿convening￿notice￿for￿the￿meeting)
approximately￿two￿weeks￿prior￿to￿convocation￿of￿the￿AGM.￿In￿addition,￿we￿post￿a￿copy￿of￿our￿annual￿report￿on￿our
website￿prior￿to￿the￿Annual￿General￿Meeting￿of￿Shareholders.

• ASML￿does￿not￿follow￿NASDAQ’s￿requirement￿to￿obtain￿shareholder￿approval￿of￿stock￿option￿or￿purchase￿plans￿or

other￿equity￿compensation￿arrangements￿available￿to￿officers,￿directors￿or￿employees.￿It￿is￿not￿required￿under￿Dutch
law￿or￿generally￿accepted￿practice￿for￿Dutch￿companies￿to￿obtain￿shareholder￿approval￿of￿equity￿compensation
arrangements￿available￿to￿officers,￿directors￿or￿employees.￿The￿AGM￿adopts￿the￿remuneration￿policy￿for￿the￿Board
of￿Management,￿approves￿equity￿compensation￿arrangements￿for￿the￿Board￿of￿Management￿and￿approves￿the
remuneration￿for￿the￿Supervisory￿Board.￿The￿actual￿total￿remuneration￿(including￿equity￿compensation)￿for￿individual
members￿of￿the￿Board￿of￿Management￿is￿determined￿by￿the￿Supervisory￿Board.￿Equity￿compensation￿arrangements
for￿employees￿are￿adopted￿by￿the￿Board￿of￿Management￿within￿limits￿approved￿by￿the￿AGM.

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70

H. Mine Safety Disclosure
Not￿applicable.

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71

ASML￿ANNUAL￿REPORT￿2012

72

Part III

Item 17 Financial Statements

Not￿applicable.

Item 18 Financial Statements

In￿response￿to￿this￿item,￿ASML￿incorporates￿herein￿by￿reference￿the￿consolidated￿financial￿statements￿of￿ASML￿set￿out
on￿pages￿F-2￿through￿F-55￿hereto.

Item 19 Exhibits

Exhibit No.
1

  Description
￿ Articles￿of￿Association￿of￿ASML￿Holding￿N.V.￿(English￿translation)￿(Incorporated￿by￿reference￿to￿Amendment￿No.￿13￿to￿the

Registrant’s,￿Registration￿Statement￿on￿Form￿8-A/A,￿filed￿with￿the￿Commission￿on￿February￿8,￿2013)

2.1

￿ Fiscal￿Agency￿Agreement￿between￿ASML￿Holding￿N.V.,￿Deutsche￿Bank￿AG,￿London￿Branch￿and￿Deutsche￿Bank

Luxembourg￿S.A.￿relating￿to￿the￿Registrant’s￿5.75￿percent￿Notes￿due￿2017￿(Incorporated￿by￿reference￿to￿the￿Registrant’s
Annual￿Report￿for￿the￿year￿ended￿December￿31,￿2008)

4.1

4.2

4.3

4.4

4.5

4.6

4.7

4.8

4.9

4.10

4.11

4.12

4.13

4.14

4.15

4.16

￿ Agreement￿between￿ASM￿Lithography￿B.V.￿and￿Carl￿Zeiss,￿dated￿March￿17,￿2000￿(Incorporated￿by￿reference￿to￿the

Registrant’s￿Annual￿Report￿on￿Form￿20-F￿for￿the￿fiscal￿year￿ended￿December￿31,￿2000)￿1

￿ Agreement￿between￿ASML￿Holding￿N.V.￿and￿Carl￿Zeiss,￿dated￿October￿24,￿2003￿(Incorporated￿by￿reference￿to￿the

Registrant’s￿Annual￿Report￿on￿Form￿20-F￿for￿the￿year￿ended￿December￿31,￿2003)￿1

￿ Form￿of￿Indemnity￿Agreement￿between￿ASML￿Holding￿N.V.￿and￿members￿of￿its￿Board￿of￿Management￿(Incorporated￿by

reference￿to￿the￿Registrant’s￿Annual￿Report￿on￿Form￿20-F￿for￿the￿year￿ended￿December￿31,￿2003)

￿ Form￿of￿Indemnity￿Agreement￿between￿ASML￿Holding￿N.V.￿and￿members￿of￿its￿Supervisory￿Board￿(Incorporated￿by

reference￿to￿the￿Registrant’s￿Annual￿Report￿on￿Form￿20-F￿for￿the￿year￿ended￿December￿31,￿2003)

￿ Form￿of￿Employment￿Agreement￿for￿members￿of￿the￿Board￿of￿Management￿(Incorporated￿by￿reference￿to￿the￿Registrant’s

Annual￿Report￿on￿Form￿20-F￿for￿the￿fiscal￿year￿ended￿December￿31,￿2003)

￿ Nikon-ASML￿Patent￿Cross-License￿Agreement,￿dated￿December￿10,￿2004,￿between￿ASML￿Holding￿N.V.￿and￿Nikon
Corporation￿(Incorporated￿by￿reference￿to￿the￿Registrant’s￿Annual￿Report￿on￿Form￿20-F￿for￿the￿fiscal￿year￿ended
December￿31,￿2004)￿1

￿ ASML/Zeiss￿Sublicense￿Agreement,￿2004,￿dated￿December￿10,￿2004,￿between￿Carl￿Zeiss￿SMT￿AG￿and￿ASML￿Holding￿N.V.
(Incorporated￿by￿reference￿to￿the￿Registrant’s￿Annual￿Report￿on￿Form￿20-F￿for￿the￿fiscal￿year￿ended￿December￿31,￿2004)￿1

￿ ￿ASML￿New￿Hires￿and￿Incentive￿Stock￿Option￿Plan￿For￿Management￿(Version￿2003)￿(Incorporated￿by￿reference￿to￿the

Registrant’s￿Statement￿on￿Form￿S-8,￿filed￿with￿the￿Commission￿on￿September￿2,￿2003￿(File￿No.￿333-109154))

￿ ￿ASML￿Incentive￿and￿New￿Hire￿Option￿Plan￿for￿Board￿of￿Management￿(Incorporated￿by￿reference￿to￿the￿Registrant’s

Registration￿Statement￿on￿Form￿S-8,￿filed￿with￿the￿Commission￿on￿June￿9,￿2004￿(File￿No.￿333-116337))

￿ ￿ASML￿Option￿Plan￿for￿Management￿of￿ASML￿Holding￿Group￿Companies￿(Incorporated￿by￿reference￿to￿the￿Registrant’s

Registration￿Statement￿on￿Form￿S-8￿filed￿with￿the￿Commission￿on￿June￿30,￿2005￿(file￿No.￿333-126340))

￿ ￿ASML￿Stock￿Option￿Plan￿for￿New￿Hire￿Options￿granted￿to￿Members￿of￿the￿Board￿of￿Management￿(Version￿April￿2006)

(Incorporated￿by￿reference￿to￿the￿Registrant’s￿Registration￿Statement￿on￿Form￿S-8￿filed￿with￿the￿Commission￿on￿August￿7,
2006￿(file￿No.￿333-136362))

￿ ￿ASML￿Stock￿Option￿Plan￿for￿Incentive￿or￿New￿Hire￿Options￿granted￿to￿Senior￿and￿Executive￿Management￿(Version￿April
2006)￿(Incorporated￿by￿reference￿to￿the￿Registrant’s￿Registration￿Statement￿on￿Form￿S-8￿filed￿with￿the￿Commission￿on
August￿7,￿2006￿(file￿No.￿333-136362))

￿ ￿ASML￿Stock￿Option￿Plan￿for￿Incentive￿or￿New￿Hire￿Options￿granted￿to￿Senior￿and￿Executive￿Management￿(Version￿July
2006)￿(Incorporated￿by￿reference￿to￿the￿Registrant’s￿Registration￿Statement￿on￿Form￿S-8￿filed￿with￿the￿Commission￿on
August￿7,￿2006￿(file￿No.￿333-136362))

￿ ASML￿Stock￿Option￿Plan￿for￿Incentive￿or￿New￿Hire￿Options￿granted￿to￿Senior￿and￿Executive￿Management￿(Version
October￿2006)￿(Incorporated￿by￿reference￿to￿the￿Registrant’s￿Registration￿Statement￿on￿Form￿S-8￿filed￿with￿the
Commission￿on￿August￿7,￿2006￿(file￿No.￿333-136362))

￿ ASML￿Restricted￿Stock￿Plan￿(Incorporated￿by￿reference￿to￿the￿Registrant’s￿Registration￿Statement￿on￿Form￿S-8￿filed￿with

the￿Commission￿on￿March￿7,￿2007￿(file￿No.￿333-141125))

￿ ￿Brion￿Technologies,￿Inc.,￿2002￿Stock￿Option￿Plan￿(as￿amended￿on￿March￿25,￿2005;￿March￿24,￿2006;￿and￿November￿17,
2006)￿(Incorporated￿by￿reference￿to￿the￿Registrant’s￿Registration￿Statement￿on￿Form￿S-8￿filed￿with￿the￿Commission￿on
April￿20,￿2007￿(file￿No.￿333-142254))

4.17

￿ ASML￿Stock￿Option￿Plan￿for￿Incentive￿or￿New￿Hire￿Options￿granted￿to￿Senior￿and￿Executive￿Management￿(Version￿January

4.18

4.19

4.20

4.21

4.22

2007)￿(Incorporated￿by￿reference￿to￿the￿Registrant’s￿Registration￿Statement￿on￿Form￿S-8￿filed￿with￿the￿Commission￿on
July￿5,￿2007￿(file￿No.￿333-144356))

￿ ASML￿Stock￿Option￿Plan￿for￿Incentive￿or￿New￿Hire￿Options￿granted￿to￿Senior￿and￿Executive￿Management￿(Version￿April
2007)￿(Incorporated￿by￿reference￿to￿the￿Registrant’s￿Registration￿Statement￿on￿Form￿S-8￿filed￿with￿the￿Commission￿on
July￿5,￿2007￿(file￿No.￿333-144356))

￿ ASML￿Stock￿Option￿Plan￿for￿Incentive￿or￿New￿Hire￿Options￿granted￿to￿Senior￿and￿Executive￿Management￿(Version￿July
2007)￿(Incorporated￿by￿reference￿to￿the￿Registrant’s￿Registration￿Statement￿on￿Form￿S-8￿filed￿with￿the￿Commission￿on
July￿5,￿2007￿(file￿No.￿333-144356))

￿ ASML￿Stock￿Option￿Plan￿for￿Incentive￿or￿New￿Hire￿Options￿granted￿to￿Senior￿and￿Executive￿Management￿(Version
October￿2007)￿(Incorporated￿by￿reference￿to￿the￿Registrant’s￿Registration￿Statement￿on￿Form￿S-8￿filed￿with￿the
Commission￿on￿July￿5,￿2007￿(file￿No.￿333-144356))

￿ ASML￿Performance￿Stock￿Plan￿for￿Members￿of￿the￿Board￿of￿Management￿(Version￿1)￿(Incorporated￿by￿reference￿to￿the

Registrant’s￿Registration￿Statement￿on￿Form￿S-8￿filed￿with￿the￿Commission￿on￿July￿5,￿2007￿(file￿No.￿333-144356))

￿ ASML￿Performance￿Stock￿Option￿Plan￿for￿Members￿of￿the￿Board￿of￿Management￿(Version￿2)￿(Incorporated￿by￿reference￿to

the￿Registrant’s￿Registration￿Statement￿on￿Form￿S-8￿filed￿with￿the￿Commission￿on￿July￿5,￿2007￿(file￿No.￿333-144356))

ASML￿ANNUAL￿REPORT￿2012

73

Exhibit No.
4.23

  Description
￿ ASML￿Stock￿Option￿Plan￿from￿Base￿Salary￿for￿Senior￿&￿Executive￿Management￿(Version￿October￿2007)￿(Incorporated￿by

4.24

4.25

4.26

4.27

4.28

4.29

4.30

4.31
4.32
4.33
4.34

4.35

8.1
12.1
13.1

reference￿to￿the￿Registrant’s￿Registration￿Statement￿on￿Form￿S-8￿filed￿with￿the￿Commission￿on￿November￿2,￿2007￿(file￿No.
333-147128))

￿ ASML￿Performance￿Stock￿Option￿Plan￿for￿Senior￿and￿Executive￿Management￿(version￿1)￿(Incorporated￿by￿reference￿to￿the

Registrant’s.￿Registration￿Statement￿on￿Form￿S-8￿filed￿with￿the￿Commission￿on￿August￿29,￿2008￿(file￿No.￿333-153277))

￿ ASML￿Performance￿Share￿Plan￿for￿Senior￿and￿Executive￿Management￿(version￿1)￿(Incorporated￿by￿reference￿to￿the

Registrant’s￿Registration￿Statement￿on￿Form￿S-8￿filed￿with￿the￿Commission￿on￿August￿29,￿2008￿(file￿No.￿333-153277))

￿ ASML￿Restricted￿Stock￿Plan￿(version￿2)￿(Incorporated￿by￿reference￿to￿the￿Registrant’s￿Registration￿Statement￿on￿Form￿S-8

filed￿with￿the￿Commission￿on￿August￿29,￿2008￿(file￿No.￿333-153277))

￿ ASML￿Performance￿Stock￿Plan￿for￿Members￿of￿the￿Board￿of￿Management￿(Incorporated￿by￿reference￿to￿the￿Registrant’s

Registration￿Statement￿on￿Form￿S-8￿filed￿with￿the￿Commission￿on￿October￿13,￿2009￿(file￿No.￿333-162439))

￿ ASML￿Performance￿Stock￿Option￿Plan￿for￿Senior￿and￿Executive￿Management￿(version￿1)￿(Incorporated￿by￿reference￿to￿the
Registrant’s.￿Registration￿Statement￿on￿Form￿S-8￿filed￿with￿the￿Commission￿on￿October￿13,￿2009￿(file￿No.￿333-162439))

￿ ASML￿Performance￿Share￿Plan￿for￿Senior￿and￿Executive￿Management￿(version￿1)￿(Incorporated￿by￿reference￿to￿the

Registrant’s￿Registration￿Statement￿on￿Form￿S-8￿filed￿with￿the￿Commission￿on￿October￿13,￿2009￿(file￿No.￿333-162439))

￿ ASML￿Share￿and￿Option￿Purchase￿Plan￿for￿Employees￿(Incorporated￿by￿reference￿to￿the￿Registrant’s￿Registration

Statement￿on￿Form￿S-8￿filed￿with￿the￿Commission￿on￿October￿20,￿2010￿(file￿No.￿333-170034))
￿ Investment￿Agreement￿between￿ASML￿Holding￿N.V.￿and￿Intel￿Corporation,￿dated￿July￿9,￿2012￿2
￿ 450mm￿NRE￿Funding￿Agreement￿between￿ASML￿Holding￿N.V.,￿and￿Intel￿Corporation,￿dated￿July￿9,￿20121,￿2
￿ EUV￿NRE￿Funding￿Agreement￿between￿ASML￿Holding￿N.V.,￿and￿Intel￿Corporation,￿dated￿July￿9,￿20121,￿2
￿ Shareholder￿Agreement￿between￿ASML￿Holding￿N.V.￿and￿Intel￿Holdings￿B.V.,￿Intel￿Corporation￿and￿Stichting

Administratiekantoor￿MAKTSJAB￿dated￿September￿12,￿2012￿2

￿ Agreement￿and￿Plan￿of￿Merger￿by￿and￿among￿ASML￿Holding￿N.V.,￿Kona￿Acquisition￿Company,￿Inc.￿Cymer,￿Inc.￿and

certain￿other￿parties￿set￿forth￿therein,￿date￿October￿16,￿2012￿(incorporated￿by￿reference￿to￿Annex￿A￿to￿the￿Registrant's
Registration￿Statement￿on￿Form￿F-4￿filed￿with￿the￿Commission￿on￿November￿21,￿2012￿(file￿No.￿333-185120))

￿ List￿of￿Main￿Subsidiaries￿2
￿ Certification￿of￿CEO￿and￿CFO￿Pursuant￿to￿Rule￿13a-14(a)￿of￿the￿Securities￿Exchange￿Act￿of￿1934￿2
￿ Certification￿of￿CEO￿and￿CFO￿Pursuant￿to￿Rule￿13a-14(b)￿of￿the￿Securities￿Exchange￿Act￿of￿1934￿and￿18￿U.S.C.￿Section

1350￿as￿Adopted￿Pursuant￿to￿Section￿906￿of￿the￿Sarbanes-Oxley￿Act￿of￿2002￿2

15.1
101.INS
101.SCH
101.CAL
101.DEF
101.LAB
101.PRE

￿ Consent￿of￿Deloitte￿Accountants￿B.V.2
￿ XBRL￿Instance￿Document￿2
￿ XBRL￿Taxonomy￿Extension￿Schema￿Document￿2
￿ XBRL￿Taxonomy￿Extension￿Calculation￿Linkbase￿Document￿2
￿ XBRL￿Taxonomy￿Extension￿Definition￿Linkbase￿Document￿2
￿ XBRL￿Taxonomy￿Extension￿Label￿Linkbase￿Document￿2
￿ XBRL￿Taxonomy￿Extension￿Presentation￿Linkbase￿Document￿2

1￿Certain￿information￿omitted￿pursuant￿to￿a￿request￿for￿confidential￿treatment￿filed￿separately￿with￿the￿Securities￿and￿Exchange￿Commission.

2￿Filed￿at￿the￿Commission￿herewith.

ASML￿Holding￿N.V.￿hereby￿certifies￿that￿it￿meets￿all￿of￿the￿requirements￿for￿filing￿on￿Form￿20-F￿and￿that￿it￿has￿duly
caused￿and￿authorized￿the￿undersigned￿to￿sign￿this￿Annual￿Report￿on￿its￿behalf.￿

ASML￿Holding￿N.V.￿(Registrant)￿

￿￿

￿/s/￿Eric￿Meurice
Eric￿Meurice
President,￿Chief￿Executive￿Officer￿and￿Chairman￿of￿the￿Board￿of￿Management
Dated:￿February￿12,￿2013￿￿￿

/s/￿Peter￿T.F.M.￿Wennink
Peter￿T.F.M.￿Wennink
Executive￿Vice￿President,￿Chief￿Financial￿Officer￿and￿Member￿of￿the￿Board￿of￿Management
Dated:￿February￿12,￿2013

ASML￿ANNUAL￿REPORT￿2012

74

Financial Statements

Index to Financial Statements

F-2

F-2

F-3

F-4

F-5

F-6

Consolidated￿Statements￿of￿Operations

Consolidated￿Statements￿of￿Comprehensive￿Income

Consolidated￿Balance￿Sheets

Consolidated￿Statements￿of￿Shareholders’￿Equity

Consolidated￿Statements￿of￿Cash￿Flows

Notes￿to￿the￿Consolidated￿Financial￿Statements

F-55

Report￿of￿Independent￿Registered￿Public￿Accounting￿Firm

ASML￿ANNUAL￿REPORT￿2012

F-1

Consolidated Statements of Operations

Year ended December 31
(in thousands, except per share data)
￿
Net￿system￿sales
Net￿service￿and￿field￿option￿sales
￿
Total net sales
Cost￿of￿system￿sales
Cost￿of￿service￿and￿field￿option￿sales
￿
Total cost of sales
￿
Gross profit on sales
Research￿and￿development￿costs
Selling,￿general￿and￿administrative￿costs
￿
Income from operations
Interest￿income
Interest￿expense
￿
Income before income taxes
Provision￿for￿income￿taxes
￿
Net income
Basic￿net￿income￿per￿ordinary￿share
Diluted￿net￿income￿per￿ordinary￿share1
Number￿of￿ordinary￿shares￿used￿in￿computing￿per￿share￿amounts
(in￿thousands)
Basic
Diluted1

2012
EUR
￿
3,801,632
929,923
￿
4,731,555
2,198,921
527,377
￿
2,726,298
￿
2,005,257
589,182
259,301
￿
1,156,774
16,585
(22,781)
￿
1,150,578
(4,262)
￿
1,146,316
2.70
2.68
￿

2011 2
EUR  
￿ ￿
4,883,913 ￿
767,122 ￿
￿ ￿
5,651,035 ￿
2,793,931 ￿
407,714 ￿
￿ ￿
3,201,645 ￿
￿ ￿
2,449,390 ￿
590,270 ￿
217,904 ￿
￿ ￿
1,641,216 ￿
41,156 ￿
(33,737) ￿
￿ ￿
1,648,635 ￿
(181,675) ￿
￿ ￿
1,466,960 ￿
3.45 ￿
3.42 ￿
￿ ￿

424,096
426,986

425,618 ￿
429,053 ￿

2010
EUR
￿
3,894,742
613,196
￿
4,507,938
2,222,965
329,803
￿
2,552,768
￿
1,955,170
523,426
181,045
￿
1,250,699
15,125
(23,301)
￿
1,242,523
(220,703)
￿
1,021,820
2.35
2.33
￿

435,146
438,974

Notes
￿
20
￿
￿
20
￿
￿
￿
22
￿
￿
22,￿23
22
￿
￿
24
24
￿
￿
19
￿
￿
￿
￿
￿

￿
￿

1

The￿calculation￿of￿diluted￿net￿income￿per￿ordinary￿share￿assumes￿the￿exercise￿of￿options￿issued￿under￿ASML￿stock￿option￿plans￿and￿the￿issuance￿of
shares￿under￿ASML￿share￿plans￿for￿periods￿in￿which￿exercises￿or￿issuances￿would￿have￿a￿dilutive￿effect.￿The￿calculation￿of￿diluted￿net￿income￿per
ordinary￿share￿does￿not￿assume￿exercise￿of￿such￿options￿or￿issuance￿of￿shares￿when￿such￿exercises￿or￿issuance￿would￿be￿anti-dilutive.

2 As￿of￿January￿1,￿2011,￿we￿adopted￿Accounting￿Standards￿Update￿("ASU")￿2009-13,￿"Revenue￿Arrangements￿with￿Multiple￿Deliverables"￿which

amended￿ASC￿605-25.￿The￿ASU￿was￿adopted￿prospectively￿and￿had￿an￿insignificant￿impact￿on￿timing￿and￿allocation￿of￿revenues.￿See￿Note￿1￿to￿the
consolidated￿financial￿statements.

Consolidated Statements of Comprehensive Income

Notes
￿
￿
￿
￿
3
￿
￿
3
3

￿
￿

Year ended December 31
(in thousands)
￿
Net income
￿
Foreign currency translation:
Gain￿(loss)￿on￿foreign￿currency￿translation
￿
Financial instruments, net of taxes:
Gain￿(loss)￿on￿derivative￿financial￿instruments
Transfers￿to￿net￿income
￿
Comprehensive income

2012
EUR
￿
1,146,316
￿
￿
8,063
￿
￿
214
(7,761)
￿
1,146,832

2011
EUR
￿
1,466,960
￿
￿
(17,473)
￿
￿
(4,610)
51,963
￿
1,496,840

2010
EUR
￿
1,021,820
￿
￿
22,286
￿
￿
(49,175)
47,954
￿
1,042,885

ASML￿ANNUAL￿REPORT￿2012

F-2

 
 
Consolidated Balance Sheets

Notes
￿
￿
4
4
5
6
19
7
19
8
￿
￿
6
19
8
9
10
11
￿
￿
￿
￿
￿
￿
12
19
14
13
19
￿
￿
14
19
13
12
￿
￿
￿
￿
16,￿18
￿
￿
￿
￿
￿
￿
￿
￿
￿
￿
￿
￿
￿
￿
￿
￿
￿
￿
￿
￿
26
￿
￿

As of December 31
(in thousands, except share and per share data)
￿
Assets
Cash￿and￿cash￿equivalents
Short-term￿investments
Accounts￿receivable,￿net
Finance￿receivables,￿net
Current￿tax￿assets
Inventories,￿net
Deferred￿tax￿assets
Other￿assets
Total current assets
￿
Finance￿receivables,￿net
Deferred￿tax￿assets
Other￿assets
Goodwill
Other￿intangible￿assets,￿net
Property,￿plant￿and￿equipment,￿net
Total non-current assets
￿
Total assets
￿
Liabilities and shareholders’ equity
Accounts￿payable
Accrued￿and￿other￿liabilities
Current￿tax￿liabilities
Current￿portion￿of￿long-term￿debt
Provisions
Deferred￿and￿other￿tax￿liabilities
Total current liabilities
￿
Long-term￿debt
Deferred￿and￿other￿tax￿liabilities
Provisions
Accrued￿and￿other￿liabilities
Total non-current liabilities
￿
Total liabilities
￿
Commitments￿and￿contingencies
￿
Cumulative￿Preference￿Shares;￿EUR￿0.09￿nominal￿value;
700,000,000￿shares￿authorized￿at￿December￿31,￿2012￿and￿2011;
none￿issued￿and￿outstanding￿at￿December￿31,￿2012￿and￿2011;
￿
Ordinary￿Shares￿B;￿EUR￿0.01￿nominal￿value;
9,000￿shares￿authorized￿at￿December￿31,￿2012;
none￿issued￿and￿outstanding￿per￿December￿31,￿2012;
not￿applicable￿per￿December￿31,￿2011;
￿
Ordinary￿Shares;￿EUR￿0.09￿nominal￿value;
699,999,000￿shares￿authorized￿at￿December￿31,￿2012;
407,165,221￿issued￿and￿outstanding￿at￿December￿31,￿2012;
700,000,000￿shares￿authorized￿at￿December￿31,￿2011;
413,669,257￿issued￿and￿outstanding￿at￿December￿31,￿2011;
Issued￿and￿outstanding￿shares
Share￿premium
Treasury￿shares￿at￿cost
Retained￿earnings
Accumulated￿other￿comprehensive￿income
Total shareholders’ equity
￿
Total liabilities and shareholders’ equity

2012
EUR
￿
￿
1,767,596
930,005
605,288
265,167
57,116
1,856,970
103,695
246,005
5,831,842
￿
38,621
39,443
311,538
149,168
9,943
1,029,923
1,578,636
￿
7,410,478
￿
￿
188,961
1,880,370
10,791
3,610
2,280
271
2,086,283
￿
755,880
88,307
7,974
405,141
1,257,302
￿
3,343,585
￿
-
￿
￿
￿
-
￿
￿
￿
-
￿
￿
￿
￿
￿
￿
￿
37,470
483,651
(464,574)
3,931,359
78,987
4,066,893
￿
7,410,478

2011
EUR
￿
￿
2,731,782
-
880,627
78,853
32,105
1,624,627
120,720
238,095
5,706,809
￿
-
38,735
307,251
146,044
8,366
1,053,610
1,554,006
￿
7,260,815
￿
￿
444,269
1,768,647
14,999
2,587
2,326
214
2,233,042
￿
733,781
176,727
10,012
663,099
1,583,619
￿
3,816,661
￿
-
￿
￿
￿
-
￿
￿
￿
￿
-
￿
￿
￿
￿
￿
￿
38,354
473,043
(416,417)
3,270,703
78,471
3,444,154
￿
7,260,815

ASML￿ANNUAL￿REPORT￿2012

F-3

 
Consolidated Statements of Shareholders’ Equity

Issued and
Outstanding
Shares

(in thousands)
Balance at January 1, 2010

Number1

433,639

￿

￿

￿

Notes
￿
￿
￿

￿
3

3

￿
17,￿21,￿22
17,￿21
26
17,￿19

￿
￿
￿

￿
3

3

￿
￿
￿
17,￿21,￿22
17,￿21
26
17,￿19

￿
￿
￿

￿
3
3

￿
￿
26,￿28
26,￿28
26,￿28
￿
26
26
17,￿21,￿22
17,￿21
26
17,￿19

￿

Components of comprehensive
income:
Net￿income
Foreign￿Currency￿Translation,￿net￿of
taxes
Loss￿on￿financial￿instruments,￿net￿of
taxes
￿
Share-based payments
Issuance of shares
Dividend paid
Tax benefit from share-based
payments
Balance at December 31, 2010

Components of comprehensive
income:
Net￿income
Foreign￿Currency￿Translation,￿net￿of
taxes
Gain￿on￿financial￿instruments,￿net￿of
taxes
￿
Purchase of treasury shares
Cancellation of treasury shares
Share-based payments
Issuance of shares
Dividend paid
Tax deficit from share-based
payments
Balance at December 31, 2011

Components of comprehensive
income:
Net￿income
Foreign￿Currency￿Translation
Loss￿on￿financial￿instruments,￿net￿of
taxes
￿
Customer Co-Investment Program:
Issuance￿of￿shares
Fair￿value￿differences3
Capital￿repayment4
￿
Purchase of treasury shares
Cancellation of treasury shares
Share-based payments
Issuance of shares
Dividend paid
Tax benefit from share-based
payments
Balance at December 31, 2012

￿
￿

￿

-
-

-

-
2,954
-
-

436,593

￿
￿

￿

-
-

-

(25,675)
-
-
2,751
-
-

413,669

￿
￿

-
-
-

￿
￿
96,566
-
(93,411)

￿

(13,478)
-
-
3,819
-
-

Accumulated    
Other    
Compre-    
hensive    
Income  
EUR  
27,526 ￿

Retained
Earnings
EUR
1,450,156

￿ ￿ ￿
￿ ￿ ￿

Total
EUR
1,774,768

1,021,820
-

- ￿
22,286 ￿

1,021,820
22,286

-

(1,221) ￿

(1,221)

Share
Premium
EUR
476,261

Treasury  
Shares
at cost
EUR
(218,203)

￿
￿

￿

-
-

-

￿
￿

￿

-
-

-

12,109
(17,223)
-
106

-
66,531
-
-

-
(18,573)
(86,960)
-

￿ ￿ ￿
- ￿
- ￿
- ￿
- ￿

12,109
31,000
(86,960)
106

471,253

(151,672)

2,366,443

48,591 2

2,773,908

￿
￿

￿

-
-

-

￿
￿

￿

-
-

-

￿ ￿ ￿
￿ ￿ ￿

1,466,960
-

- ￿
(17,473) ￿

1,466,960
(17,473)

-

47,353 ￿

47,353

-
-
12,430
(10,629)
-
(11)

(700,452)
373,801
-
61,906
-
-

-
(372,614)
-
(17,441)
(172,645)
-

￿ ￿ ￿
- ￿
- ￿
- ￿
- ￿
- ￿
- ￿

(700,452)
-
12,430
34,084
(172,645)
(11)

473,043

(416,417)

3,270,703

78,471 2

3,444,154

￿
￿

￿
￿

￿

￿
￿

￿
￿

￿

-
-
-

-
-
125,628

(535,175)
294,752
-
66,638
-
-

-
-
-

3,968,677
(123,416)
(3,845,261)

-
-
18,714
(10,222)
-
2,116

￿ ￿ ￿
￿ ￿ ￿

1,146,316
-
-

- ￿
8,063 ￿
(7,547) ￿

1,146,316
8,063
(7,547)

-
-
-

-
(293,722)
-
(3,046)
(188,892)
-

￿ ￿ ￿
￿ ￿ ￿
- ￿
- ￿
- ￿
￿ ￿ ￿
- ￿
- ￿
- ￿
- ￿
- ￿
- ￿

3,977,368
(123,416)
(3,728,324)

(535,373)
-
18,714
53,714
(188,892)
2,116

Amount
EUR
39,028
￿
￿

-
-

-

￿

-
265
-
-

￿
￿

￿

39,293
￿
￿

￿
￿

-
-

-

￿

￿

-
(1,187)
-
248
-
-

38,354
￿
￿

￿
￿

-
-
-

￿
￿

￿

￿
￿

8,691
-
(8,691)
￿

(198)
(1,030)
-
344
-
-

407,165

37,470

483,651

(464,574)

3,931,359

78,987 2

4,066,893

1 As￿of￿December￿31,￿2012,￿the￿number￿of￿issued￿shares￿was￿419,852,467.￿This￿includes￿the￿number￿of￿issued￿and￿outstanding￿shares￿of￿407,165,221
and￿the￿number￿of￿treasury￿shares￿of￿12,687,246.￿As￿of￿December￿31,￿2011,￿the￿number￿of￿issued￿shares￿was￿431,294,790.￿This￿includes￿the￿number
of￿issued￿and￿outstanding￿shares￿of￿413,669,257￿and￿the￿number￿of￿treasury￿shares￿of￿17,625,533.

2 As￿of￿December￿31,￿2012,￿accumulated￿other￿comprehensive￿income,￿net￿of￿taxes,￿consists￿of￿EUR￿83.5￿million￿relating￿to￿foreign￿currency￿translation

3

4

(2011:￿EUR￿75.5￿million;￿2010:￿EUR￿93.0￿million)￿and￿EUR￿4.5￿million￿relating￿to￿unrealized￿losses￿on￿financial￿instruments￿(2011:￿EUR￿3.0￿million
gains;￿2010:￿EUR￿44.4￿million￿losses).
The￿difference￿between￿the￿fair￿value￿of￿the￿shares￿and￿the￿subscription￿price￿of￿the￿shares￿issued￿to￿the￿participating￿customers￿in￿the￿Customer￿Co-
Investment￿Program.
In￿2012,￿as￿part￿of￿the￿capital￿repayment,￿EUR￿3,728.3￿million￿of￿shareholders'￿equity￿was￿returned￿to￿our￿shareholders￿(excluding￿Intel￿Corporation
(“Intel”),￿Taiwan￿Semiconductor￿Manufacturing￿Company￿Ltd.￿(“TSMC”)￿and￿Samsung￿Electronics￿Corporation￿(“Samsung”)￿(collectively￿referred￿to￿as
“participating￿customers”￿in￿the￿Customer￿Co-investment￿Program))￿and￿the￿number￿of￿shares￿was￿reduced￿by￿23￿percent.￿See￿Note￿26.

ASML￿ANNUAL￿REPORT￿2012

F-4

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Consolidated Statements of Cash Flows

Notes
￿
￿
￿
￿
￿

10,￿11
9,￿10,￿11
11
17,21
5
7
19
￿
5
6
7
8
12,￿13
￿
19
￿
￿
￿
11
11
10
4
4
￿
￿
￿
￿
26
27
17,21
26
￿
14
17,19
￿
￿
￿
￿
￿
4
4
￿
￿
￿
￿

Year ended December 31
(in thousands)
￿
Cash Flows from Operating Activities
Net￿income
￿
Adjustments￿to￿reconcile￿net￿income￿to￿net￿cash￿flows￿from￿operating
activities:
Depreciation￿and￿amortization
Impairment
Loss￿on￿disposal￿of￿property,￿plant￿and￿equipment1
Share-based￿payments
Allowance￿for￿doubtful￿receivables
Allowance￿for￿obsolete￿inventory
Deferred￿income￿taxes
Changes in assets and liabilities:
Accounts￿receivable
Finance￿receivables
Inventories1
Other￿assets
Accrued￿and￿other￿liabilities
Accounts￿payable
Current￿income￿taxes
Net cash provided by operating activities
￿
Cash Flows from Investing Activities
Purchase￿of￿property,￿plant￿and￿equipment1
Proceeds￿from￿sale￿of￿property,￿plant￿and￿equipment1
Purchase￿of￿intangible￿assets
Purchase￿of￿available￿for￿sale￿securities
Maturity￿of￿available￿for￿sale￿securities
Acquisition￿of￿subsidiaries￿(net￿of￿cash￿acquired)
Net cash used in investing activities
￿
Cash Flows from Financing Activities
Dividend￿paid
Purchase￿of￿shares
Net￿proceeds￿from￿issuance￿of￿shares
Capital￿Repayment
Deposits￿from￿customers
Repayment￿of￿debt
Tax￿benefit￿(deficit)￿from￿share-based￿payments
Net cash provided by (used in) financing activities
￿
Net￿cash￿flows
Effect￿of￿changes￿in￿exchange￿rates￿on￿cash
Net increase (decrease) in cash and cash equivalents
Cash￿and￿cash￿equivalents￿at￿beginning￿of￿the￿year
Cash and cash equivalents at end of the year
￿
Supplemental Disclosures of Cash Flow Information:
Interest￿paid
Taxes￿paid

2012  
EUR  
￿ ￿
￿ ￿
1,146,316 ￿
￿ ￿
￿ ￿

186,620 ￿
3,234 ￿
2,272 ￿
18,714 ￿
458 ￿
130,911 ￿
(72,374) ￿
￿ ￿
246,982 ￿
(225,103) ￿
(352,716) ￿
19,117 ￿
(147,691) ￿
(225,083) ￿
(28,179) ￿
703,478 ￿
￿ ￿
￿ ￿
(171,878) ￿
- ￿
(7,658) ￿
(1,379,997) ￿
449,992 ￿
(10,292) ￿
(1,119,833) ￿
￿ ￿
￿ ￿
(188,892) ￿
(535,373) ￿
3,907,666 2
(3,728,324) 3
- ￿
(2,776) ￿
2,116 ￿
(545,583) ￿
￿ ￿
(961,938) ￿
(2,248) ￿
(964,186) ￿
2,731,782 ￿
1,767,596 ￿
￿ ￿
￿ ￿
(37,906) ￿
(109,504) ￿

2011
EUR
￿
￿
1,466,960
￿
￿

165,185
12,272
3,368
12,430
849
60,300
63,250
￿
267,209
(37,301)
(276,243)
(58,292)
589,217
(126,234)
(72,530)
2,070,440
￿
￿
(300,898)
-
-
-
-
-
(300,898)
￿
￿
(172,645)
(700,452)
34,084
-
(150,000)
(2,537)
(11)
(991,561)
￿
777,981
3,967
781,948
1,949,834
2,731,782
￿
￿
(35,919)
(202,312)

2010
EUR
￿
￿
1,021,820
￿
￿

151,444
8,563
2,913
12,109
(1,256)
55,691
28,053
￿
(748,898)
(20,000)
(706,233)
(114,003)
862,919
350,231
36,695
940,048
￿
￿
(128,728)
3,825
-
-
-
-
(124,903)
￿
￿
(86,960)
-
31,000
-
150,000
(1,444)
106
92,702
￿
907,847
4,913
912,760
1,037,074
1,949,834
￿
￿
(35,559)
(148,915)

1 An￿amount￿of￿EUR￿204.8￿million￿(2011:￿EUR￿300.5￿million,￿2010:￿EUR￿214.1￿million)￿of￿the￿additions￿in￿property,￿plant￿and￿equipment￿relates￿to￿non-
cash￿transfers￿from￿inventory,￿an￿amount￿of￿EUR￿9.6￿million￿relates￿to￿other￿non-cash￿movements￿(mainly￿investments￿not￿yet￿paid￿and￿inceptions
of￿finance￿lease￿arrangements)￿and￿an￿amount￿of￿EUR￿222.9￿million￿(2011:￿EUR￿145.3￿million,￿2010:￿EUR￿110.4￿million)￿of￿the￿disposal￿of￿property,
plant￿and￿equipment￿relates￿to￿non-cash￿transfers￿to￿inventory.￿Since￿the￿transfers￿between￿inventory￿and￿property,￿plant￿and￿equipment￿are￿non-cash
events,￿these￿are￿not￿reflected￿in￿these￿consolidated￿statements￿of￿cash￿flows.￿For￿further￿details￿see￿Note￿11.
The￿net￿proceeds￿from￿issuance￿of￿shares￿includes￿an￿amount￿of￿EUR￿3,853.9￿million￿related￿to￿the￿share￿issuances￿in￿connection￿to￿the￿Customer￿Co-
Investment￿Program.
The￿difference￿of￿EUR￿125.6￿million￿between￿the￿capital￿repayment￿of￿EUR￿3,728.3￿million￿and￿the￿net￿proceeds￿from￿issuance￿of￿shares￿of￿EUR
3,853.9￿million￿relates￿to￿the￿capital￿repayment￿on￿ASML's￿treasury￿shares￿which￿was￿also￿part￿of￿the￿Synthetic￿Share￿Buyback￿in￿November￿2012.

2

3

ASML￿ANNUAL￿REPORT￿2012

F-5

 
Notes to the Consolidated Financial Statements

1. General information / Summary of significant accounting policies
ASML￿Holding￿N.V.￿("ASML"),￿with￿its￿corporate￿headquarters￿in￿Veldhoven,￿the￿Netherlands,￿is￿engaged￿in￿the
development,￿production,￿marketing,￿sale￿and￿servicing￿of￿advanced￿semiconductor￿equipment￿systems￿exclusively
consisting￿of￿lithography￿systems.￿ASML's￿principal￿operations￿are￿in￿the￿Netherlands,￿the￿United￿States￿of￿America￿and
Asia.

Our￿shares￿are￿listed￿for￿trading￿in￿the￿form￿of￿registered￿shares￿on￿NASDAQ￿and￿on￿NYSE￿Euronext￿Amsterdam.￿The
principal￿trading￿market￿of￿our￿ordinary￿shares￿is￿NYSE￿Euronext￿Amsterdam.

Basis of preparation
The￿accompanying￿consolidated￿financial￿statements￿are￿stated￿in￿thousands￿of￿euros￿("EUR")￿unless￿indicated
otherwise.

The￿accompanying￿consolidated￿financial￿statements￿have￿been￿prepared￿in￿conformity￿with￿accounting￿principles
generally￿accepted￿in￿the￿United￿States￿of￿America￿("U.S.￿GAAP").

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￿expenses￿during
the￿reported￿periods.￿Actual￿results￿could￿differ￿from￿those￿estimates.

Principles of consolidation
The￿consolidated￿financial￿statements￿include￿the￿financial￿statements￿of￿ASML￿Holding￿N.V.￿and￿all￿of￿its￿subsidiaries
and￿the￿variable￿interest￿entities￿in￿which￿ASML￿is￿the￿primary￿beneficiary￿(referred￿to￿as￿"ASML").￿All￿intercompany
profits,￿balances￿and￿transactions￿have￿been￿eliminated￿in￿the￿consolidation.

Subsidiaries
Subsidiaries￿are￿all￿entities￿over￿which￿ASML￿has￿the￿power￿to￿govern￿financial￿and￿operating￿policies￿generally
accompanying￿a￿shareholding￿of￿more￿than￿half￿of￿the￿voting￿rights.￿As￿from￿the￿date￿that￿these￿criteria￿are￿met,￿the
financial￿data￿of￿the￿relevant￿subsidiaries￿are￿included￿in￿the￿consolidation.

Acquisitions￿of￿subsidiaries￿are￿included￿on￿the￿basis￿of￿the￿acquisition￿method.￿The￿cost￿of￿acquisition￿is￿measured
based￿on￿the￿consideration￿transferred,￿the￿fair￿value￿of￿other￿assets￿distributed￿and￿the￿fair￿value￿of￿liabilities￿incurred
or￿assumed￿at￿the￿acquisition￿date￿(i.e.,￿the￿date￿at￿which￿we￿obtain￿control).￿The￿excess￿of￿the￿costs￿of￿an￿acquired
subsidiary￿over￿the￿net￿of￿the￿amounts￿assigned￿to￿assets￿acquired￿and￿liabilities￿incurred￿or￿assumed,￿is￿capitalized￿as
goodwill.￿Acquisition-related￿costs￿are￿expensed￿when￿incurred￿in￿the￿period￿they￿arise￿or￿the￿service￿is￿received.

Variable Interest Entities
We￿assess￿whether￿we￿have￿a￿controlling￿financial￿interest￿in￿any￿Variable￿Interest￿Entity￿("VIE")￿and,￿thus,￿whether￿we
are￿the￿VIE’s￿primary￿beneficiary.￿ASML￿shall￿be￿deemed￿to￿have￿a￿controlling￿financial￿interest￿in￿a￿VIE￿if￿it￿has￿both
of￿the￿following￿characteristics:￿(a.)￿the￿power￿to￿direct￿the￿activities￿of￿a￿VIE￿that￿most￿significantly￿impact￿the￿VIE’s
economic￿performance￿and￿(b.)￿the￿obligation￿to￿absorb￿losses￿of￿the￿VIE￿that￿could￿potentially￿be￿significant￿to￿the￿VIE
or￿the￿right￿to￿receive￿benefits￿from￿the￿VIE￿that￿could￿potentially￿be￿significant￿to￿the￿VIE.￿If￿ASML￿has￿a￿controlling
financial￿interest￿in￿a￿VIE,￿it￿is￿required￿to￿consolidate￿the￿VIE.

Foreign currency translation
The￿financial￿information￿for￿subsidiaries￿outside￿the￿euro-zone￿is￿generally￿measured￿using￿local￿currencies￿as￿the
functional￿currency.￿The￿financial￿statements￿of￿those￿foreign￿subsidiaries￿are￿translated￿into￿euros￿in￿the￿preparation￿of
ASML’s￿consolidated￿financial￿statements.￿Assets￿and￿liabilities￿are￿translated￿into￿euros￿at￿the￿exchange￿rate￿in￿effect
on￿the￿respective￿balance￿sheet￿dates.￿Income￿and￿expenses￿are￿translated￿into￿euros￿based￿on￿the￿average￿exchange
rate￿for￿the￿corresponding￿period.￿The￿resulting￿translation￿adjustments￿are￿recorded￿directly￿in￿shareholders’￿equity.
Currency￿differences￿on￿intercompany￿loans￿that￿have￿the￿nature￿of￿a￿long-term￿investment￿are￿also￿accounted￿for
directly￿in￿shareholders’￿equity.

Derivative financial instruments
We￿principally￿use￿derivative￿hedging￿instruments￿for￿the￿management￿of￿foreign￿currency￿risks￿and￿interest￿rate￿risks.
We￿measure￿all￿derivative￿hedging￿instruments￿based￿on￿fair￿values￿derived￿from￿market￿prices￿of￿the￿instruments.￿We

ASML￿ANNUAL￿REPORT￿2012

F-6

adopt￿hedge￿accounting￿for￿hedges￿that￿are￿highly￿effective￿in￿offsetting￿the￿identified￿hedged￿risks￿taking￿into￿account
required￿effectiveness￿criteria.

Derivatives￿are￿initially￿recognized￿at￿fair￿value￿on￿the￿date￿a￿derivative￿contract￿is￿entered￿into￿and￿are￿subsequently
remeasured￿at￿their￿fair￿value.￿The￿method￿of￿recognizing￿the￿resulting￿gain￿or￿loss￿depends￿on￿whether￿the￿derivative￿is
designated￿as￿a￿hedging￿instrument,￿and￿if￿so,￿the￿nature￿of￿the￿item￿being￿hedged.￿We￿designate￿certain￿derivatives￿as
either:￿
• A￿hedge￿of￿the￿exposure￿to￿changes￿in￿the￿fair￿value￿of￿a￿recognized￿asset￿or￿liability,￿or￿of￿an￿unrecognized￿firm

commitment,￿that￿are￿attributable￿to￿a￿particular￿risk￿(fair￿value￿hedge);

• A￿hedge￿of￿the￿exposure￿to￿variability￿in￿the￿cash￿flows￿of￿a￿recognized￿asset￿or￿liability,￿or￿of￿a￿forecasted

transaction,￿that￿is￿attributable￿to￿a￿particular￿risk￿(cash￿flow￿hedge);￿or

• A￿hedge￿of￿the￿foreign￿currency￿exposure￿of￿a￿net￿investment￿in￿a￿foreign￿operation￿(net￿investment￿hedge).

We￿document￿at￿the￿inception￿of￿the￿transaction￿the￿relationship￿between￿hedging￿instruments￿and￿hedged￿items,￿as
well￿as￿our￿risk￿management￿objectives￿and￿strategy￿for￿undertaking￿various￿hedging￿transactions.￿We￿also￿document
our￿assessment,￿both￿at￿hedge￿inception￿and￿on￿an￿ongoing￿basis,￿of￿whether￿derivatives￿that￿are￿used￿in￿hedging
transactions￿are￿highly￿effective￿in￿offsetting￿changes￿in￿fair￿values￿or￿cash￿flows￿of￿hedged￿items.

Fair value hedge
Changes￿in￿the￿fair￿value￿of￿a￿derivative￿financial￿instrument￿that￿is￿designated￿and￿qualified￿as￿a￿fair￿value￿hedge,
along￿with￿the￿gain￿or￿loss￿on￿the￿hedged￿asset￿or￿liability￿that￿is￿attributable￿to￿the￿hedged￿risk,￿are￿recorded￿in￿the
consolidated￿statements￿of￿operations.

Hedge￿accounting￿is￿discontinued￿when￿we￿revoke￿the￿hedging￿relationship,￿the￿hedging￿instrument￿expires￿or￿is￿sold,
terminated￿or￿exercised,￿or￿no￿longer￿qualifies￿for￿hedge￿accounting.￿The￿adjustment￿to￿the￿carrying￿amount￿of￿the
hedged￿item￿arising￿from￿the￿hedged￿risk￿is￿amortized￿to￿the￿consolidated￿statement￿of￿operations￿from￿that￿date.

Interest￿rate￿swaps￿that￿are￿being￿used￿to￿hedge￿the￿fair￿value￿of￿fixed￿loan￿coupons￿payable￿are￿designated￿as￿fair
value￿hedges.￿The￿change￿in￿fair￿value￿is￿intended￿to￿offset￿the￿change￿in￿the￿fair￿value￿of￿the￿underlying￿fixed￿loan
coupons,￿which￿is￿recorded￿accordingly.￿The￿gain￿or￿loss￿relating￿to￿the￿ineffective￿portion￿of￿interest￿rate￿swaps
hedging￿fixed￿loan￿coupons￿payable￿is￿recognized￿in￿the￿consolidated￿statements￿of￿operations￿as￿"interest￿income"￿or
"interest￿expense".

Cash flow hedge
Changes￿in￿the￿fair￿value￿of￿a￿derivative￿that￿is￿designated￿and￿qualified￿as￿a￿cash￿flow￿hedge￿are￿recorded￿in￿other
comprehensive￿income,￿net￿of￿taxes,￿until￿the￿underlying￿hedged￿transaction￿is￿recognized￿in￿the￿consolidated
statements￿of￿operations.￿In￿the￿event￿that￿the￿underlying￿hedge￿transaction￿will￿not￿occur￿within￿the￿specified￿time
period,￿the￿gain￿or￿loss￿on￿the￿related￿cash￿flow￿hedge￿is￿released￿from￿other￿comprehensive￿income￿and￿included￿in
the￿consolidated￿statements￿of￿operations,￿unless,￿extenuating￿circumstances￿exist￿that￿are￿related￿to￿the￿nature￿of
the￿forecasted￿transaction￿and￿are￿outside￿our￿control￿or￿influence￿and￿which￿cause￿the￿forecasted￿transaction￿to￿be
probable￿of￿occurring￿on￿a￿date￿that￿is￿beyond￿the￿specified￿time￿period.

Foreign￿currency￿hedging￿instruments￿that￿are￿being￿used￿to￿hedge￿cash￿flows￿related￿to￿forecasted￿sales￿or￿purchase
transactions￿in￿non-functional￿currencies￿are￿designated￿as￿cash￿flow￿hedges.￿The￿gain￿or￿loss￿relating￿to￿the￿ineffective
portion￿of￿the￿foreign￿currency￿hedging￿instruments￿is￿recognized￿in￿the￿consolidated￿statements￿of￿operations￿in￿"sales"
or￿"cost￿of￿sales".

Interest￿rate￿swaps￿that￿are￿being￿used￿to￿hedge￿changes￿in￿the￿variability￿of￿future￿interest￿cash￿flows￿to￿certain￿of
our￿operating￿lease￿obligations￿are￿designated￿as￿cash￿flow￿hedges.￿The￿changes￿in￿fair￿value￿of￿the￿derivatives￿are
intended￿to￿offset￿changes￿in￿future￿interest￿cash￿flows￿of￿such￿operating￿lease￿obligations.￿The￿gain￿or￿loss￿relating
to￿the￿ineffective￿portion￿of￿interest￿rate￿swaps￿hedging￿the￿variability￿of￿future￿interest￿cash￿flows￿is￿recognized￿in￿the
consolidated￿statements￿of￿operations￿as￿"interest￿income"￿or￿"interest￿expense".

Net investment hedge
Foreign￿currency￿hedging￿instruments￿that￿are￿being￿used￿to￿hedge￿changes￿in￿the￿value￿of￿a￿net￿investment￿are
designated￿as￿net￿investment￿hedges.￿Changes￿in￿the￿fair￿value￿of￿a￿derivative￿that￿is￿designated￿and￿qualifies￿as￿a￿net
investment￿hedge￿are￿recorded￿in￿other￿comprehensive￿income,￿net￿of￿taxes.￿The￿gain￿or￿loss￿relating￿to￿the￿ineffective
portion￿is￿recognized￿in￿the￿consolidated￿statements￿of￿operations￿as￿"interest￿income"￿or￿"interest￿expense".￿Gains￿and
losses￿accumulated￿in￿other￿comprehensive￿income￿are￿recognized￿in￿the￿consolidated￿statements￿of￿operations￿when
the￿foreign￿operation￿is￿(partially)￿disposed￿or￿sold.

ASML￿ANNUAL￿REPORT￿2012

F-7

Cash and cash equivalents
Cash￿and￿cash￿equivalents￿consist￿primarily￿of￿highly￿liquid￿investments,￿such￿as￿bank￿deposits,￿money￿market￿funds
and￿interest-bearing￿bank￿accounts￿with￿insignificant￿interest￿rate￿risk￿and￿remaining￿maturities￿of￿three￿months￿or￿less
at￿the￿date￿of￿acquisition.

Short-term investments
Investments￿with￿remaining￿maturities￿longer￿than￿three￿months￿and￿less￿than￿one￿year￿at￿the￿date￿of￿acquisition￿are
presented￿as￿short-term￿investments.￿The￿short-term￿investments￿are￿classified￿as￿available-for-sale￿securities￿and
are￿stated￿at￿fair￿value.￿Gains￿and￿losses,￿other￿than￿impairments,￿interest￿income￿and￿foreign￿exchange￿results,￿are
recognized￿in￿comprehensive￿income￿until￿the￿short-term￿investments￿are￿derecognized.￿Upon￿derecognition,￿the
cumulative￿gain￿or￿loss￿recognized￿in￿comprehensive￿income,￿is￿recognized￿in￿the￿consolidated￿statement￿of￿operations.

Inventories
Inventories￿are￿stated￿at￿the￿lower￿of￿cost￿(first-in,￿first-out￿method)￿or￿market￿value.￿Cost￿includes￿net￿prices￿paid￿for
materials￿purchased,￿charges￿for￿freight￿and￿customs￿duties,￿production￿labor￿cost￿and￿factory￿overhead.￿Allowances
are￿made￿for￿slow-moving,￿obsolete￿or￿unsellable￿inventory.

Allowances￿for￿inventory￿are￿determined￿based￿on￿the￿expected￿demand￿which￿is￿derived￿from￿sales￿forecasts￿as￿well￿as
the￿expected￿market￿value￿of￿the￿inventory.

Intangible assets
Goodwill
Goodwill￿represents￿the￿excess￿of￿the￿costs￿of￿an￿acquisition￿over￿the￿fair￿value￿of￿the￿amounts￿assigned￿to￿assets
acquired￿and￿liabilities￿incurred￿or￿assumed￿of￿the￿acquired￿subsidiary￿at￿the￿date￿of￿acquisition.￿Goodwill￿on￿acquisition
of￿subsidiaries￿is￿allocated￿to￿reporting￿units￿for￿the￿purpose￿of￿impairment￿testing.￿The￿allocation￿is￿made￿to￿those
reporting￿units￿that￿are￿expected￿to￿benefit￿from￿the￿business￿combination￿in￿which￿the￿goodwill￿arose.￿Goodwill￿is
tested￿for￿impairment￿annually￿on￿September￿30￿and￿whenever￿events￿or￿changes￿in￿circumstances￿indicate￿that￿the
carrying￿amount￿of￿the￿goodwill￿may￿not￿be￿recoverable.￿Goodwill￿is￿stated￿at￿cost￿less￿accumulated￿impairment￿losses.

Other intangible assets
Other￿intangible￿assets￿include￿acquired￿intellectual￿property￿rights,￿developed￿technology,￿customer￿relationships￿and
other￿intangible￿assets.￿Other￿intangible￿assets￿are￿stated￿at￿cost,￿less￿accumulated￿amortization￿and￿any￿accumulated
impairment￿losses.￿Amortization￿is￿calculated￿using￿the￿straight-line￿method￿based￿on￿the￿estimated￿useful￿lives￿of￿the
assets.￿The￿following￿table￿presents￿the￿estimated￿useful￿lives￿of￿ASML’s￿other￿intangible￿assets:

Category
Intellectual￿property
Developed￿technology
Customer￿relationships
Other

Estimated useful life
3￿-￿10￿years
6￿years
8￿years
2￿-￿6￿years

Property, plant and equipment
Property,￿plant￿and￿equipment￿are￿stated￿at￿cost,￿less￿accumulated￿depreciation￿and￿accumulated￿impairment￿losses.
Costs￿of￿assets￿manufactured￿by￿ASML￿include￿direct￿manufacturing￿costs,￿production￿overhead￿and￿interest￿costs
incurred￿for￿qualifying￿assets￿during￿the￿construction￿period.￿Depreciation￿is￿calculated￿using￿the￿straight-line￿method
based￿on￿the￿estimated￿useful￿lives￿of￿the￿related￿assets.￿In￿the￿case￿of￿leasehold￿improvements,￿the￿estimated￿useful
lives￿of￿the￿related￿assets￿do￿not￿exceed￿the￿remaining￿term￿of￿the￿corresponding￿lease.

The￿following￿table￿presents￿the￿estimated￿useful￿lives￿of￿ASML’s￿property,￿plant￿and￿equipment:

Category
Buildings￿and￿constructions
Machinery￿and￿equipment
Leasehold￿improvements
Furniture,￿fixtures￿and￿other￿equipment

Estimated useful life
5￿-￿40￿years
2￿-￿5￿years
5￿-￿10￿years
3￿-￿5￿years

Land￿is￿not￿depreciated.

Certain￿internal￿and￿external￿costs￿associated￿with￿the￿purchase￿and/or￿development￿of￿internally￿used￿software￿are
capitalized￿when￿both￿the￿preliminary￿project￿stage￿is￿completed￿and￿management￿has￿authorized￿further￿funding￿for

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the￿project,￿which￿it￿has￿deemed￿probable￿to￿be￿completed￿and￿to￿be￿usable￿for￿the￿intended￿function.￿These￿costs￿are
depreciated￿on￿a￿straight-line￿basis￿over￿the￿period￿of￿related￿benefit,￿which￿ranges￿primarily￿from￿three￿to￿five￿years.

Evaluation of long-lived assets for impairment
Long-lived￿assets￿include￿goodwill,￿other￿intangible￿assets￿and￿property,￿plant￿and￿equipment.

Goodwill￿is￿tested￿for￿impairment￿at￿the￿reporting￿unit￿level￿(operating￿segment￿or￿one￿level￿below￿an￿operating￿segment)
on￿an￿annual￿basis￿(September￿30)￿and￿whenever￿events￿or￿changes￿in￿circumstances￿indicate￿that￿the￿carrying￿amount
of￿the￿goodwill￿may￿not￿be￿recoverable.￿The￿test￿is￿based￿on￿a￿two-step￿approach.￿First,￿the￿recoverability￿is￿tested￿by
comparing￿the￿carrying￿amount￿of￿the￿reporting￿unit￿(including￿goodwill￿allocated￿to￿such￿unit)￿with￿the￿fair￿value￿of￿that
reporting￿unit.￿If￿the￿carrying￿amount￿of￿the￿reporting￿unit￿is￿higher￿than￿the￿fair￿value￿of￿the￿reporting￿unit,￿the￿second
step￿should￿be￿performed.￿In￿the￿second￿step￿the￿goodwill￿impairment￿is￿measured￿as￿the￿excess￿of￿the￿carrying￿amount
of￿the￿goodwill￿over￿its￿implied￿fair￿value.￿The￿implied￿fair￿value￿of￿goodwill￿is￿determined￿by￿calculating￿the￿fair￿value
of￿the￿various￿assets￿and￿liabilities￿included￿in￿the￿reporting￿unit￿in￿the￿same￿manner￿as￿goodwill￿is￿determined￿in￿a
business￿combination.

Other￿intangible￿assets￿and￿property,￿plant￿and￿equipment￿are￿tested￿for￿impairment￿whenever￿events￿or￿changes￿in
circumstances￿indicate￿that￿the￿carrying￿amount￿of￿those￿assets￿may￿not￿be￿recoverable.￿Other￿intangible￿assets￿and
property,￿plant￿and￿equipment￿are￿tested￿for￿impairment￿based￿on￿a￿two-step￿approach.￿First,￿the￿recoverability￿is
tested￿by￿comparing￿the￿carrying￿amount￿of￿the￿other￿intangible￿assets￿and￿property,￿plant￿and￿equipment￿with￿the
fair￿value￿being￿the￿sum￿of￿the￿related￿undiscounted￿future￿cash￿flows.￿Second,￿if￿the￿carrying￿amount￿of￿the￿other
intangible￿assets￿and￿property,￿plant￿and￿equipment￿is￿higher￿than￿the￿fair￿value￿the￿assets￿are￿considered￿to￿be
impaired.￿An￿impairment￿expense￿is￿recognized￿as￿the￿difference￿between￿the￿carrying￿amount￿and￿the￿fair￿value￿of￿the
other￿intangible￿assets￿and￿property,￿plant￿and￿equipment.

Provisions
Provisions￿for￿lease￿contract￿termination￿costs￿are￿recognized￿when￿costs￿will￿continue￿to￿be￿incurred￿under￿a￿contract
for￿its￿remaining￿term￿without￿economic￿benefit￿to￿us￿and￿we￿cease￿using￿the￿rights￿conveyed￿by￿the￿contract.￿The
provisions￿are￿measured￿at￿fair￿value￿which￿for￿an￿operating￿lease￿contract￿is￿determined￿based￿on￿the￿remaining￿lease
payments￿reduced￿by￿the￿estimated￿sublease￿payments￿that￿could￿be￿reasonably￿obtained.

Revenue recognition
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
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,￿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￿is￿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.

In￿connection￿with￿the￿introduction￿of￿new￿technology,￿such￿as￿our￿second-generation￿EUV￿systems￿(NXE:3100),￿we
initially￿defer￿revenue￿recognition￿until￿completion￿of￿installation￿and￿acceptance￿of￿the￿new￿technology￿based￿system
at￿customer￿premises.￿As￿our￿systems￿are￿based￿largely￿on￿two￿product￿platforms￿that￿permit￿incremental,￿modular
upgrades,￿the￿introduction￿of￿genuinely￿"new"￿technology￿occurs￿infrequently,￿and￿in￿the￿past￿12￿years,￿has￿occurred￿on
only￿two￿occasions:￿2010￿(EUV)￿and￿1999￿(TWINSCAN).

In￿2012,￿we￿recognized￿system￿sales￿revenue￿for￿one￿NXE:3100￿system￿(2011:￿three￿NXE:3100￿systems;￿2010:￿no
NXE:3100￿systems)￿that￿was￿installed￿at￿the￿customer￿location￿and￿was￿accepted￿by￿our￿customer,￿for￿an￿amount￿of
EUR￿43.7￿million￿(2011:￿EUR￿119.3￿million￿and￿2010:￿EUR￿nil).￿As￿of￿December￿31,￿2012,￿no￿amounts￿were￿deferred￿in
relation￿to￿NXE:3100￿systems￿(2011:￿EUR￿48.6￿million￿and￿2010:￿EUR￿38.5￿million).

ASML￿has￿no￿significant￿repurchase￿commitments￿in￿its￿general￿sales￿terms￿and￿conditions.￿From￿time￿to￿time￿we
repurchase￿systems￿that￿we￿have￿manufactured￿and￿sold￿and,￿following￿refurbishment,￿resell￿those￿systems￿to￿other
customers.￿This￿repurchase￿decision￿is￿driven￿by￿market￿demand￿expressed￿by￿other￿customers￿and￿not￿by￿explicit￿or
implicit￿contractual￿arrangements￿relating￿to￿the￿initial￿sale.￿We￿consider￿reasonable￿offers￿from￿any￿vendor,￿including
customers,￿to￿repurchase￿used￿systems￿so￿that￿we￿can￿refurbish,￿resell,￿and￿install￿these￿systems￿as￿part￿of￿our

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normal￿business￿operations.￿Once￿repurchased,￿the￿repurchase￿price￿of￿the￿used￿system￿is￿recorded￿in￿work-in-
process￿inventory￿during￿the￿period￿it￿is￿being￿refurbished,￿following￿which￿the￿refurbished￿system￿is￿reflected￿in
finished￿products￿inventory￿until￿it￿is￿sold￿to￿the￿customer.￿As￿of￿December￿31,￿2012￿and￿2011￿ASML￿had￿no￿repurchase
commitments.

We￿offer￿customers￿discounts￿in￿the￿normal￿course￿of￿sales￿negotiations.￿These￿discounts￿are￿directly￿deducted￿from
the￿gross￿sales￿price￿at￿the￿moment￿of￿revenue￿recognition.￿From￿time￿to￿time,￿we￿offer￿volume￿discounts￿to￿certain
customers.￿In￿some￿instances￿these￿volume￿discounts￿can￿be￿used￿to￿purchase￿field￿options￿(system￿enhancements).
The￿related￿amount￿is￿recorded￿as￿a￿reduction￿in￿revenue￿at￿time￿of￿shipment.￿From￿time￿to￿time,￿we￿offer￿free￿or
discounted￿products￿or￿services￿(award￿credits)￿to￿our￿customers￿as￿part￿of￿a￿volume￿purchase￿agreement.￿The￿sales
transaction￿that￿gives￿rise￿to￿these￿award￿credits￿is￿accounted￿for￿as￿a￿multiple￿element￿revenue￿transaction￿as￿the
agreements￿involve￿the￿delivery￿of￿multiple￿products.￿The￿consideration￿received￿from￿the￿sales￿transaction￿is￿allocated
between￿the￿award￿credits￿and￿the￿other￿elements￿of￿the￿sales￿transaction.￿The￿consideration￿allocated￿to￿the￿award
credits￿is￿recognized￿as￿deferred￿revenue￿until￿award￿credits￿are￿delivered￿to￿the￿customer.￿The￿amount￿allocable￿to
a￿delivered￿item￿is￿limited￿to￿the￿amount￿that￿is￿not￿contingent￿upon￿the￿delivery￿of￿additional￿items￿or￿meeting￿other
specified￿performance￿conditions￿(the￿non-contingent￿amount).

Revenues￿are￿recognized￿excluding￿the￿taxes￿levied￿on￿revenues￿(net￿basis).

In￿the￿event￿that￿an￿arrangement￿with￿a￿customer￿becomes￿onerous,￿we￿recognize￿a￿liability￿for￿the￿amount￿that￿the￿cost
of￿settling￿the￿arrangement￿exceeds￿the￿amount￿of￿the￿contract￿price.￿When￿we￿satisfy￿the￿onerous￿arrangement,￿we
derecognize￿the￿related￿liability.

Multiple element arrangements
The￿main￿portion￿of￿ASML’s￿revenue￿is￿derived￿from￿contractual￿arrangements￿with￿our￿customers￿that￿have￿multiple
deliverables,￿which￿mainly￿include￿the￿sale￿of￿our￿systems,￿installation￿and￿training￿services￿and￿prepaid￿extended￿and
enhanced￿(optic)￿warranty￿contracts.￿As￿of￿January￿1,￿2011,￿ASML￿adopted￿Accounting￿Standards￿Update￿("ASU")
2009-13,￿"Revenue￿Arrangements￿with￿Multiple￿Deliverables"￿which￿amended￿the￿guidance￿on￿arrangements￿with
multiple￿deliverables￿in￿ASC￿605-25.￿The￿new￿standard￿changes￿the￿requirements￿for￿establishing￿separate￿units
of￿accounting￿in￿a￿multiple￿element￿arrangement￿and￿requires￿the￿allocation￿of￿arrangement￿consideration￿to￿each
deliverable￿to￿be￿based￿on￿the￿relative￿selling￿price.￿We￿apply￿this￿accounting￿guidance￿prospectively￿to￿arrangements
originating￿or￿materially￿modified￿on￿or￿after￿January￿1,￿2011.￿The￿implementation￿resulted￿in￿additional￿qualitative
disclosures￿that￿are￿included￿below,￿but￿did￿not￿result￿in￿additional￿units￿of￿accounting￿and￿only￿had￿an￿insignificant
impact￿on￿timing￿and￿allocation￿of￿revenues.

Each￿element￿in￿the￿arrangement￿is￿accounted￿for￿as￿a￿separate￿unit￿of￿accounting￿provided￿the￿following￿criteria￿are
met:￿the￿delivered￿products￿or￿services￿have￿value￿to￿the￿customer￿on￿a￿standalone￿basis;￿and￿for￿an￿arrangement
that￿includes￿a￿general￿right￿of￿return￿relative￿to￿the￿delivered￿products￿or￿services,￿delivery￿or￿performance￿of￿the
undelivered￿product￿or￿service￿is￿considered￿probable￿and￿is￿substantially￿controlled￿by￿us.￿We￿consider￿a￿deliverable
to￿have￿stand-alone￿value￿if￿the￿product￿or￿service￿is￿sold￿separately￿by￿us￿or￿another￿vendor￿or￿could￿be￿resold￿by￿the
customer.￿Further,￿our￿revenue￿arrangements￿do￿not￿include￿a￿general￿right￿of￿return￿relative￿to￿the￿delivered￿products.
Where￿the￿aforementioned￿criteria￿for￿a￿separate￿unit￿of￿accounting￿are￿not￿met,￿the￿deliverable￿is￿combined￿with￿the
undelivered￿element(s)￿and￿treated￿as￿a￿single￿unit￿of￿accounting￿for￿the￿purposes￿of￿allocation￿of￿the￿arrangement
consideration￿and￿revenue￿recognition.

The￿hierarchy￿of￿evidence￿to￿determine￿a￿selling￿price￿in￿ASC￿605-25￿is￿as￿follows:
• Vendor-Specific￿Objective￿Evidence￿("VSOE")￿–￿the￿price￿at￿which￿we￿sell￿the￿element￿in￿a￿separate￿standalone

transaction;

• Third-Party￿Evidence￿("TPE")￿–￿evidence￿from￿us￿or￿other￿companies￿of￿the￿value￿of￿a￿largely￿interchangeable￿element

in￿a￿transaction;

• Best￿Estimate￿of￿Selling￿Price￿("BESP")￿–￿our￿best￿estimate￿of￿the￿selling￿price￿of￿an￿element￿in￿the￿transaction.

To￿determine￿the￿selling￿price￿in￿multiple￿elements￿arrangements,￿we￿establish￿VSOE￿of￿the￿selling￿price￿for￿installation
and￿training￿services￿and￿prepaid￿extended￿and￿enhanced￿(optic)￿warranty￿contracts.￿VSOE￿is￿determined￿based￿on￿the
prices￿that￿ASML￿charges￿for￿installation￿and￿comparable￿services￿(such￿as￿relocating￿a￿system￿to￿another￿customer
site)￿and￿prepaid￿extended￿and￿enhanced￿(optic)￿warranty￿contracts￿on￿a￿stand-alone￿basis,￿which￿are￿subject￿to￿normal
price￿negotiations.￿Revenue￿from￿installation￿and￿training￿services￿is￿recognized￿when￿the￿services￿are￿completed.
Revenue￿from￿prepaid￿extended￿and￿enhanced￿(optic)￿warranty￿contracts￿is￿recognized￿over￿the￿term￿of￿the￿contract.
When￿we￿are￿unable￿to￿establish￿the￿selling￿price￿using￿VSOE￿or￿TPE,￿we￿use￿BESP.￿The￿objective￿of￿using￿estimated
selling￿price-based￿methodology￿is￿to￿determine￿the￿price￿at￿which￿we￿would￿transact￿a￿sale￿if￿the￿product￿or￿service
were￿sold￿on￿a￿stand-alone￿basis.￿Accordingly,￿we￿determine￿BESP￿considering￿several￿internal￿and￿external￿factors

ASML￿ANNUAL￿REPORT￿2012

F-10

including,￿but￿not￿limited￿to,￿pricing￿practices,￿gross￿margin￿objectives,￿market￿conditions,￿competitive￿environment,
internal￿costs￿and￿geographies.￿We￿review￿selling￿prices￿every￿reporting￿period￿and￿maintain￿internal￿controls￿over￿the
establishment￿and￿updates￿of￿these￿estimates.

For￿arrangements￿entered￿into￿through￿December￿31,￿2010,￿we￿primarily￿recognize￿revenue￿based￿on￿the￿previous
guidance￿of￿ASC￿605-25.￿The￿revenue￿relating￿to￿the￿installation￿and￿training￿services￿and￿prepaid￿extended￿and
enhanced￿(optic)￿warranty￿contracts￿is￿deferred￿at￿their￿fair￿value￿until￿delivery￿of￿these￿elements.￿￿As￿we￿are￿not￿able
to￿determine￿the￿fair￿value￿for￿the￿system,￿but￿we￿are￿able￿to￿determine￿the￿fair￿value￿for￿all￿other￿elements￿in￿the
arrangement,￿revenue￿is￿allocated￿as￿the￿difference￿between￿the￿total￿arrangement￿consideration￿less￿the￿aggregate￿fair
value￿of￿all￿other￿elements￿in￿the￿arrangement,￿and￿no￿revenue￿is￿recognized￿until￿all￿elements￿without￿fair￿value￿have
been￿delivered.

Lease arrangements
A￿lease￿is￿classified￿as￿a￿sales-type￿lease￿if￿any￿of￿the￿following￿lease￿classification￿criteria￿are￿met￿at￿its￿inception:

1. The￿lease￿transfers￿ownership￿of￿the￿property￿to￿the￿lessee￿by￿the￿end￿of￿the￿lease￿term;
2. The￿lease￿contains￿a￿bargain￿purchase￿option;
3. The￿lease￿term￿is￿equal￿to￿75￿percent￿or￿more￿of￿the￿estimated￿economic￿life￿of￿the￿leased￿property;￿and
4. The￿present￿value￿at￿the￿beginning￿of￿the￿lease￿term￿of￿the￿minimum￿lease￿payments,￿excluding￿that￿portion￿of

the￿payments￿representing￿executory￿costs￿such￿as￿insurance,￿maintenance,￿and￿taxes￿to￿be￿paid￿by￿the￿lessor,
including￿any￿profit￿thereon,￿equals￿or￿exceeds￿90￿percent￿of￿the￿excess￿of￿the￿fair￿value￿of￿the￿leased￿property
to￿the￿lessor￿at￿lease￿inception￿over￿any￿related￿investment￿tax￿credit￿retained￿by￿the￿lessor￿and￿expected￿to￿be
realized￿by￿the￿lessor.

In￿addition￿revenue￿is￿recognized￿at￿commencement￿of￿the￿lease￿term.￿The￿present￿value￿of￿the￿lease￿payments￿is
recognized￿as￿a￿finance￿receivable.￿The￿difference￿between￿the￿gross￿receivable￿and￿the￿present￿value￿of￿the￿receivable
is￿recognized￿as￿unearned￿interest￿in￿the￿consolidated￿statements￿of￿operations.

A￿lease￿is￿classified￿as￿an￿operating￿lease￿if￿the￿lease￿classification￿criteria￿(as￿described￿above)￿are￿not￿met.￿If￿ASML
has￿offered￿its￿customers￿an￿operating￿lease￿arrangement,￿the￿contract￿consideration￿is￿recognized￿in￿the￿consolidated
statements￿of￿operations￿on￿a￿straight-line￿basis￿over￿the￿period￿of￿the￿lease.

Warranty
We￿provide￿standard￿warranty￿coverage￿on￿our￿systems￿for￿12￿months￿and￿on￿certain￿optic￿parts￿for￿60￿months,
providing￿labor￿and￿parts￿necessary￿to￿repair￿systems￿and￿optic￿parts￿during￿the￿warranty￿period.￿The￿estimated
warranty￿costs￿are￿accounted￿for￿by￿accruing￿these￿costs￿for￿each￿system￿upon￿recognition￿of￿the￿system￿sale.￿The
estimated￿warranty￿costs￿are￿based￿on￿historical￿product￿performance￿and￿field￿expenses.￿Based￿upon￿historical￿service
records,￿we￿calculate￿the￿charge￿of￿average￿service￿hours￿and￿parts￿per￿system￿to￿determine￿the￿estimated￿warranty
costs.￿On￿a￿semi-annual￿basis,￿we￿assess,￿and￿update￿if￿necessary,￿our￿accounting￿estimates￿used￿to￿calculate￿the
standard￿warranty￿reserve￿based￿on￿the￿latest￿actual￿historical￿warranty￿costs￿and￿expected￿future￿warranty￿costs.

The￿extended￿and￿enhanced￿(optic)￿warranty￿on￿our￿system￿is￿accounted￿for￿as￿a￿separate￿element￿of￿multiple￿element
revenue￿recognition￿transactions.

Accounting for shipping and handling fees and costs
ASML￿bills￿the￿customer￿for,￿and￿recognizes￿as￿revenue,￿any￿charges￿for￿shipping￿and￿handling￿costs.￿The￿related￿costs
are￿recognized￿as￿cost￿of￿sales.

Cost of sales
Cost￿of￿system￿sales￿comprise￿direct￿product￿costs￿such￿as￿materials,￿labor,￿cost￿of￿warranty,￿depreciation,￿shipping
and￿handling￿costs￿and￿related￿overhead￿costs.￿ASML￿accrues￿for￿the￿estimated￿cost￿of￿the￿warranty￿on￿its￿systems,
which￿includes￿the￿cost￿of￿labor￿and￿parts￿necessary￿to￿repair￿systems￿during￿the￿warranty￿period.￿The￿amounts
recorded￿in￿the￿accrued￿warranty￿reserve￿are￿estimated￿based￿on￿actual￿historical￿expenses￿incurred￿and￿on￿estimated
probable￿future￿expenses￿related￿to￿current￿sales.￿Actual￿warranty￿costs￿are￿charged￿against￿the￿accrued￿warranty
reserve.

Costs￿of￿service￿sales￿comprise￿direct￿service￿costs￿such￿as￿materials,￿labor,￿depreciation￿and￿overhead￿costs.

Cost￿of￿field￿option￿sales￿comprise￿direct￿product￿costs￿such￿as￿materials,￿labor,￿cost￿of￿warranty,￿depreciation,
shipping￿and￿handling￿costs￿and￿related￿overhead￿costs.

ASML￿ANNUAL￿REPORT￿2012

F-11

Research and development costs and credits
Costs￿relating￿to￿research￿and￿development￿("R&D")￿are￿charged￿to￿operating￿expenses￿as￿incurred.￿ASML￿receives
subsidies￿and￿other￿credits￿from￿several￿Dutch￿and￿international￿(inter-)governmental￿institutes.￿These￿subsidies￿and
other￿governmental￿credits￿that￿cover￿R&D￿costs￿relating￿to￿approved￿projects￿are￿recorded￿as￿R&D￿credits￿in￿the￿R&D
line￿in￿the￿consolidated￿statements￿of￿operations￿in￿the￿period￿in￿which￿such￿costs￿occur.

Share-based payments
The￿cost￿of￿employee￿services￿received￿(compensation￿expenses)￿in￿exchange￿for￿awards￿of￿equity￿instruments￿are
recognized￿based￿upon￿the￿grant-date￿fair￿value￿of￿stock￿options￿and￿shares.￿The￿grant-date￿fair￿value￿of￿stock￿options
is￿estimated￿using￿a￿Black-Scholes￿option￿valuation￿model.￿This￿Black-Scholes￿model￿requires￿the￿use￿of￿assumptions,
including￿expected￿share￿price￿volatility,￿the￿estimated￿life￿of￿each￿award￿and￿the￿estimated￿dividend￿yield.￿The￿risk-
free￿interest￿rate￿used￿in￿the￿model￿is￿determined,￿based￿on￿an￿index￿populated￿with￿euro-denominated￿European
government￿agency￿bond￿with￿AAA￿ratings,￿and￿with￿a￿life￿equal￿to￿the￿expected￿life￿of￿the￿equity-settled￿share-based
payments.￿The￿grant-date￿fair￿value￿of￿shares￿is￿determined￿based￿on￿the￿closing￿price￿of￿our￿ordinary￿shares￿on￿NYSE
Euronext￿Amsterdam￿on￿the￿grant-date.

The￿grant-date￿fair￿value￿of￿the￿equity-settled￿share-based￿payments￿is￿expensed￿on￿a￿straight-line￿basis￿over￿the
vesting￿period,￿based￿on￿our￿estimate￿of￿equity￿instruments￿that￿will￿eventually￿vest.￿At￿each￿balance￿sheet￿date,￿we
revise￿our￿estimate￿of￿the￿number￿of￿equity￿instruments￿expected￿to￿vest.￿The￿impact￿of￿the￿revision￿of￿the￿original
estimates,￿if￿any,￿is￿recognized￿in￿the￿consolidated￿statements￿of￿operations￿in￿the￿period￿in￿which￿the￿revision￿is
determined,￿with￿a￿corresponding￿adjustment￿to￿shareholders'￿equity.

Our￿current￿share-based￿payment￿plans￿do￿not￿provide￿for￿cash￿settlement￿of￿options￿and￿stock.

Income taxes
The￿asset￿and￿liability￿method￿is￿used￿in￿accounting￿for￿income￿taxes.￿Under￿this￿method,￿deferred￿tax￿assets￿and
liabilities￿are￿recognized￿for￿the￿tax￿effect￿of￿incurred￿net￿operating￿losses￿and￿for￿tax￿consequences￿attributable￿to
differences￿between￿the￿balance￿sheet￿carrying￿amounts￿of￿existing￿assets￿and￿liabilities￿and￿their￿respective￿tax￿bases.
If￿it￿is￿more￿likely￿than￿not￿that￿the￿carrying￿amounts￿of￿deferred￿tax￿assets￿will￿not￿be￿realized,￿a￿valuation￿allowance￿is
recorded￿to￿reduce￿the￿carrying￿amounts￿of￿those￿assets.

Deferred￿tax￿assets￿and￿liabilities￿are￿measured￿using￿enacted￿tax￿rates￿expected￿to￿apply￿to￿taxable￿income￿in￿the
years￿in￿which￿those￿temporary￿differences￿are￿expected￿to￿be￿recovered￿or￿settled.￿The￿effect￿on￿deferred￿tax￿assets
and￿liabilities￿of￿a￿change￿in￿tax￿rates￿is￿recognized￿in￿the￿consolidated￿statements￿of￿operations￿in￿the￿period￿that
includes￿the￿enactment￿date.

On￿January￿1,￿2007￿we￿adopted￿the￿provisions￿of￿FIN￿48￿"Accounting￿for￿Uncertainty￿in￿Income￿Taxes"￿after￿codification
included￿in￿ASC￿740.￿ASC￿740￿clarifies￿the￿accounting￿for￿income￿taxes￿by￿prescribing￿a￿minimum￿recognition￿threshold
a￿tax￿position￿is￿required￿to￿meet￿before￿being￿recognized￿in￿the￿financial￿statements.￿ASC￿740￿also￿provides￿guidance
on￿derecognition,￿measurement,￿classification,￿interest￿and￿penalties,￿accounting￿in￿interim￿periods,￿disclosure￿and
transition.

Contingencies and litigation
We￿are￿party￿to￿various￿legal￿proceedings￿generally￿incidental￿to￿our￿business,￿as￿disclosed￿in￿Note￿18.￿In￿connection
with￿these￿proceedings￿and￿claims,￿our￿management￿evaluated,￿based￿on￿the￿relevant￿facts￿and￿legal￿principles,￿the
likelihood￿of￿an￿unfavorable￿outcome￿and￿whether￿the￿amount￿of￿the￿loss￿could￿be￿reasonably￿estimated.￿In￿most￿cases,
management￿determined￿that￿either￿a￿loss￿was￿not￿probable￿or￿was￿not￿reasonably￿estimable.￿Significant￿subjective
judgments￿were￿required￿in￿these￿evaluations,￿including￿judgments￿regarding￿the￿validity￿of￿asserted￿claims￿and￿the
likely￿outcome￿of￿legal￿and￿administrative￿proceedings.￿The￿outcome￿of￿these￿proceedings,￿however,￿is￿subject￿to￿a
number￿of￿factors￿beyond￿our￿control,￿most￿notably￿the￿uncertainty￿associated￿with￿predicting￿decisions￿by￿courts
and￿administrative￿agencies.￿In￿addition,￿estimates￿of￿the￿potential￿costs￿associated￿with￿legal￿and￿administrative
proceedings￿frequently￿cannot￿be￿subjected￿to￿any￿sensitivity￿analysis,￿as￿damage￿estimates￿or￿settlement￿offers￿by
claimants￿may￿bear￿little￿or￿no￿relation￿to￿the￿eventual￿outcome.￿Finally,￿in￿any￿particular￿proceeding,￿we￿may￿agree￿to
settle￿or￿to￿terminate￿a￿claim￿or￿proceeding￿in￿which￿we￿believe￿that￿it￿would￿ultimately￿prevail￿where￿we￿believe￿that
doing￿so,￿when￿taken￿together￿with￿other￿relevant￿commercial￿considerations,￿is￿more￿cost-effective￿than￿engaging￿in￿an
expensive￿and￿protracted￿litigation,￿the￿outcome￿of￿which￿is￿uncertain.

We￿accrue￿for￿legal￿costs￿related￿to￿litigation￿in￿our￿consolidated￿statements￿of￿operations￿at￿the￿time￿when￿the￿related
legal￿services￿are￿actually￿provided.

ASML￿ANNUAL￿REPORT￿2012

F-12

Net income per ordinary share
Basic￿net￿income￿per￿ordinary￿share￿is￿calculated￿by￿dividing￿net￿income￿by￿the￿weighted￿average￿number￿of￿ordinary
shares￿outstanding￿for￿that￿period.￿The￿dilutive￿effect￿is￿calculated￿using￿the￿treasury￿stock￿method.￿Excluded￿from
the￿diluted￿weighted￿average￿number￿of￿shares￿outstanding￿calculation￿are￿cumulative￿preference￿shares￿contingently
issuable￿to￿the￿preference￿share￿foundation,￿since￿they￿represent￿a￿different￿class￿of￿stock￿than￿the￿ordinary￿shares.￿See
Note￿26￿for￿further￿discussion.

The￿basic￿and￿diluted￿net￿income￿per￿ordinary￿share￿has￿been￿calculated￿in￿accordance￿with￿the￿following￿schedule:

Year ended December 31
(in thousands, except per share data)
Net income
￿
Weighted average number of shares outstanding during the year
(after deduction of treasury stock)
￿
Basic net income per ordinary share
￿
Weighted average number of shares:
Plus￿shares￿applicable￿to:
Options￿and￿conditional￿shares1
￿
Dilutive potential ordinary shares
￿
Adjusted weighted average number of shares
￿
Diluted net income per ordinary share1

2012
EUR
1,146,316
￿
￿
424,096
￿
2.70
￿
424,096
￿
2,890
￿
2,890
￿
426,986
￿
2.68

2011
EUR
1,466,960
￿
￿
425,618
￿
3.45
￿
425,618
￿
3,435
￿
3,435
￿
429,053
￿
3.42

2010
EUR
1,021,820
￿
￿
435,146
￿
2.35
￿
435,146
￿
3,828
￿
3,828
￿
438,974
￿
2.33

1

The￿calculation￿of￿diluted￿net￿income￿per￿ordinary￿share￿assumes￿the￿exercise￿of￿options￿issued￿under￿ASML￿stock￿option￿plans￿and￿the￿issuance￿of
shares￿under￿ASML￿share￿plans￿for￿periods￿in￿which￿exercises￿or￿issuances￿would￿have￿a￿dilutive￿effect.￿The￿calculation￿of￿diluted￿net￿income￿per
ordinary￿share￿does￿not￿assume￿exercise￿of￿such￿options￿or￿issuance￿of￿shares￿when￿such￿exercises￿or￿issuance￿would￿be￿anti-dilutive.

Comprehensive income
Comprehensive￿income￿consists￿of￿net￿income￿(loss)￿and￿other￿comprehensive￿income.

Other￿comprehensive￿income￿refers￿to￿revenues,￿expenses,￿gains￿and￿losses￿that￿are￿not￿included￿in￿net￿income￿(loss),
but￿recorded￿directly￿in￿shareholders’￿equity.￿For￿the￿year￿ending￿December￿31,￿2012,￿comprehensive￿income￿consists
of￿net￿income,￿unrealized￿gains￿and￿losses￿on￿financial￿instruments,￿being￿available-for-sale￿securities￿and￿derivative
financial￿instruments￿designated￿for￿hedge￿accounting,￿net￿of￿taxes,￿and￿unrealized￿gains￿and￿losses￿on￿foreign￿currency
translation,￿net￿of￿taxes.￿For￿the￿years￿ended￿December￿31,￿2011￿and￿2010￿comprehensive￿income￿consists￿of￿net
income,￿unrealized￿gains￿and￿losses￿on￿financial￿instruments,￿being￿derivative￿financial￿instruments￿designated￿for
hedge￿accounting,￿net￿of￿taxes,￿and￿unrealized￿gains￿and￿losses￿on￿foreign￿currency￿translation,￿net￿of￿taxes.

New U.S. GAAP Accounting Pronouncements

In￿June￿2011,￿the￿FASB￿issued￿ASU￿No.￿2011-05,￿“Comprehensive￿Income￿(Topic￿220)”.￿Under￿the￿ASU,￿an￿entity
has￿the￿option￿to￿present￿comprehensive￿income￿in￿either￿one￿continuous￿statement￿or￿two￿consecutive￿financial
statements.￿Under￿both￿options,￿an￿entity￿is￿required￿to￿present￿each￿component￿of￿net￿income￿along￿with￿total￿net
income,￿each￿component￿of￿other￿comprehensive￿income￿(“OCI”)￿along￿with￿a￿total￿for￿OCI￿and￿a￿total￿amount￿for
comprehensive￿income.￿The￿option￿under￿current￿guidance￿which￿permits￿the￿presentation￿of￿components￿of￿OCI￿as
part￿of￿the￿statement￿of￿changes￿in￿shareholders’￿equity￿has￿been￿eliminated.￿In￿December￿2011,￿the￿FASB￿issued
ASU￿2011-12￿which￿indefinitely￿defers￿certain￿provisions￿of￿ASU￿2011-05,￿the￿main￿deferred￿provision￿relating￿to￿a
requirement￿for￿entities￿to￿present￿reclassification￿adjustments￿out￿of￿accumulated￿OCI￿by￿component￿in￿both￿the
statements￿in￿which￿net￿income￿is￿presented￿and￿the￿statement￿in￿which￿OCI￿in￿any￿period￿is￿presented.￿The￿ASU￿is
effective￿for￿annual￿and￿interim￿periods￿beginning￿after￿December￿15,￿2011.￿￿We￿have￿early￿adopted￿this￿standard;
adoption￿had￿no￿impact￿on￿our￿consolidated￿financial￿statements.

In￿December￿2011,￿the￿Financial￿Accounting￿Standards￿Board￿("FASB")￿issued￿ASU￿No.￿2011-11￿"Disclosures￿about
Offsetting￿Assets￿and￿Liabilities".￿Under￿the￿new￿guidance,￿the￿entities￿must￿disclose￿both￿gross￿information￿and￿net
information￿about￿both￿instruments￿and￿transactions￿eligible￿for￿offset￿on￿the￿balance￿sheet￿in￿accordance￿with￿the
offsetting￿guidance￿in￿ASC￿210-20-45￿or￿ASC￿815-10-45,￿and￿instruments￿and￿transactions￿subject￿to￿an￿agreement
similar￿to￿a￿master￿netting￿arrangement.￿The￿new￿guidance￿will￿be￿effective￿for￿us￿beginning￿January￿1,￿2013.￿Other￿than

ASML￿ANNUAL￿REPORT￿2012

F-13

requiring￿some￿additional￿disclosures,￿we￿do￿not￿anticipate￿material￿impacts￿on￿our￿consolidated￿financial￿statements
upon￿adoption.

In￿July￿2012,￿the￿FASB￿issued￿ASU￿No.￿2012-02￿"Testing￿Indefinite-Lived￿Intangible￿Assets￿for￿Impairment".￿This￿ASU
amends￿the￿guidance￿in￿ASC￿350-30￿on￿testing￿indefinite-lived￿intangible￿assets,￿other￿than￿goodwill,￿for￿impairment.
The￿FASB￿issued￿the￿ASU￿in￿response￿to￿feedback￿on￿ASU￿2011-08,￿which￿amended￿the￿goodwill￿impairment￿testing
requirements￿by￿allowing￿an￿entity￿to￿perform￿a￿qualitative￿impairment￿assessment￿before￿proceeding￿to￿the￿two-step
impairment￿test.￿The￿new￿guidance￿will￿be￿effective￿for￿annual￿and￿interim￿impairment￿tests￿performed￿for￿fiscal￿years
beginning￿after￿September￿15,￿2012.￿The￿ASU￿2012-02￿will￿not￿have￿any￿effect￿on￿our￿consolidated￿financial￿statements.

In￿October￿2012,￿the￿FASB￿issued￿ASU￿No.￿2014-04￿"Technical￿Corrections￿and￿Improvements".￿This￿ASU￿makes￿certain
technical￿corrections￿(i.e.,￿relatively￿minor￿corrections￿and￿clarifications)￿and￿“conforming￿fair￿value￿amendments”￿to
the￿FASB￿Accounting￿Standards￿Codification￿(the￿“Codification”).￿The￿new￿guidance￿will￿be￿effective￿for￿fiscal￿years
beginning￿after￿December￿15,￿2012.￿We￿do￿not￿anticipate￿material￿impacts￿on￿our￿consolidated￿financial￿statements
upon￿adoption.

2. Fair value measurements
Fair￿value￿is￿the￿price￿that￿would￿be￿received￿to￿sell￿an￿asset￿or￿paid￿to￿transfer￿a￿liability￿in￿an￿orderly￿transaction
between￿market￿participants￿at￿the￿measurement￿date.￿The￿fair￿value￿measurement￿hierarchy￿prioritizes￿the￿inputs￿to
valuation￿techniques￿used￿to￿measure￿fair￿value￿as￿follows:
• Level￿1:￿Valuations￿based￿on￿inputs￿such￿as￿quoted￿prices￿for￿identical￿assets￿or￿liabilities￿in￿active￿markets￿that￿the

entity￿has￿the￿ability￿to￿access.

• Level￿2:￿Valuations￿based￿on￿inputs￿other￿than￿level￿1￿inputs￿such￿as￿quoted￿prices￿for￿similar￿assets￿or￿liabilities,

quoted￿prices￿in￿markets￿that￿are￿not￿active,￿or￿other￿inputs￿that￿are￿observable￿or￿can￿be￿corroborated￿by￿observable
data￿for￿substantially￿the￿full￿term￿of￿the￿assets￿or￿liabilities.

• Level￿3:￿Valuations￿based￿on￿inputs￿that￿are￿supported￿by￿little￿or￿no￿market￿activity￿and￿that￿are￿significant￿to￿the￿fair

value￿of￿the￿assets￿or￿liabilities.

The￿fair￿value￿hierarchy￿gives￿the￿highest￿priority￿to￿quoted￿prices￿(unadjusted)￿in￿active￿markets￿for￿identical￿assets
or￿liabilities￿(Level￿1)￿and￿the￿lowest￿priority￿to￿unobservable￿inputs￿(Level￿3).￿A￿financial￿instrument’s￿fair￿value
classification￿is￿based￿on￿the￿lowest￿level￿of￿any￿input￿that￿is￿significant￿in￿the￿fair￿value￿measurement￿hierarchy.

Financial assets and financial liabilities measured at fair value on a recurring basis
Investments￿in￿money￿market￿funds￿(as￿part￿of￿our￿cash￿and￿cash￿equivalents)￿have￿fair￿value￿measurements￿which￿are
all￿based￿on￿quoted￿prices￿for￿identical￿assets￿or￿liabilities.

Our￿available-for￿sale￿financial￿instruments￿consist￿of￿Dutch￿Treasury￿Certificates￿and￿deposits￿with￿the￿Dutch
government.￿Dutch￿Treasury￿Certificates￿are￿traded￿in￿an￿active￿market￿and￿the￿fair￿value￿is￿determined￿based￿on￿quoted
market￿prices￿for￿identical￿assets￿or￿liabilities.￿The￿fair￿value￿of￿deposits￿is￿determined￿with￿reference￿to￿quoted￿market
prices￿for￿similar￿assets￿or￿discounted￿cash￿flow￿analysis.

The￿principal￿market￿in￿which￿we￿execute￿our￿derivative￿contracts￿is￿the￿institutional￿market￿in￿an￿over-the-counter
environment￿with￿a￿high￿level￿of￿price￿transparency.￿The￿market￿participants￿usually￿are￿large￿commercial￿banks.￿The
valuation￿inputs￿for￿our￿derivative￿contracts￿are￿based￿on￿quoted￿prices￿and￿quoting￿pricing￿intervals￿from￿public￿data
sources;￿they￿do￿not￿involve￿management￿judgement.

The￿valuation￿technique￿used￿to￿determine￿the￿fair￿value￿of￿forward￿foreign￿exchange￿contracts￿(used￿for￿hedging
purposes)￿approximates￿the￿Net￿Present￿Value￿technique￿("NPV")￿which￿is￿the￿estimated￿amount￿that￿a￿bank￿would
receive￿or￿pay￿to￿terminate￿the￿forward￿foreign￿exchange￿contracts￿at￿the￿reporting￿date,￿taking￿into￿account￿current
interest￿rates￿and￿current￿exchange￿rates.

The￿valuation￿technique￿used￿to￿determine￿the￿fair￿value￿of￿interest￿rate￿swaps￿(used￿for￿hedging￿purposes)￿is￿the
Net￿Present￿Value￿technique,￿which￿is￿the￿estimated￿amount￿that￿a￿bank￿would￿receive￿or￿pay￿to￿terminate￿the￿swap
agreements￿at￿the￿reporting￿date,￿taking￿into￿account￿current￿interest￿rates.

Our￿5.75￿percent￿senior￿notes￿due￿2017￿(“Eurobond”)￿serve￿as￿a￿hedged￿item￿in￿a￿fair￿value￿hedge￿relationship￿in
which￿we￿hedge￿the￿variability￿of￿changes￿in￿the￿fair￿value￿of￿our￿Eurobond￿due￿to￿changes￿in￿market￿interest￿rates
with￿interest￿rate￿swaps.￿The￿fair￿value￿changes￿of￿these￿interest￿rate￿swaps￿are￿recorded￿on￿the￿balance￿sheet￿under
derivative￿financial￿instruments￿(within￿other￿current￿assets￿and￿other￿non-current￿assets)￿and￿the￿carrying￿amount￿of￿the

ASML￿ANNUAL￿REPORT￿2012

F-14

Eurobond￿is￿adjusted￿for￿these￿fair￿value￿changes￿only.￿For￿the￿actual￿fair￿value,￿including￿credit￿risk￿considerations,￿see
Note￿14.

The￿following￿table￿presents￿our￿financial￿assets￿and￿financial￿liabilities￿that￿are￿measured￿at￿fair￿value￿on￿a￿recurring
basis:

As of December 31, 2012
(in thousands)
Assets
Derivative￿financial￿instruments￿1
Money￿market￿funds￿2
Short-term￿investments￿3
Total
￿
Liabilities
Long-term￿debt￿4
Derivative￿financial￿instruments￿1
Total
￿
￿
As of December 31, 2011
(in￿thousands)
Assets
Derivative￿financial￿instruments￿1
Money￿market￿funds￿2
Total
￿
Liabilities
Long-term￿debt￿4
Derivative￿financial￿instruments￿1
Total

Level 1
EUR
￿
-
385,420
279,988
665,408
￿
￿
-
-
-
￿
￿
Level 1
EUR
￿
-
369,238
369,238
￿
￿
-
-
-

Level 2
EUR
￿
151,748
-
650,017
801,765
￿
￿
759,490
10,893
770,383
￿
￿
Level 2
EUR
￿
126,351
-
126,351
￿
￿
736,368
40,359
776,727

Level 3
EUR
￿
-
-
-
-
￿
￿
-
-
-
￿
￿
Level 3
EUR
￿
-
-
-
￿
￿
-
-
-

Total
EUR
￿
151,748
385,420
930,005
1,467,173
￿
￿
759,490
10,893
770,383
￿
￿
Total
EUR
￿
126,351
369,238
495,589
￿
￿
736,368
40,359
776,727

1 Derivative￿financial￿instruments￿consist￿of￿forward￿foreign￿exchange￿contracts￿and￿interest￿rate￿swaps.￿See￿Note￿3.
2 Money￿market￿funds￿are￿part￿of￿our￿cash￿and￿cash￿equivalents.
3 Short-term￿investments￿consist￿of￿Dutch￿Treasury￿Certificates￿and￿deposits￿with￿the￿Dutch￿government.
4

Long-term￿debt￿mainly￿relates￿to￿our￿EUR￿600.0￿million￿Eurobond￿(fair￿value￿as￿at￿December￿31,￿2012:￿EUR￿710.1￿million￿(2011:￿EUR￿695.6￿million))
and￿excludes￿accrued￿interest.￿For￿further￿details￿see￿Note￿14.

There￿were￿no￿transfers￿between￿levels￿during￿the￿years￿ended￿December￿31,￿2012￿and￿December￿31,￿2011.

Assets and liabilities measured at fair value on a nonrecurring basis
In￿2012,￿we￿recognized￿impairment￿charges￿of￿EUR￿3.2￿million￿(2011:￿EUR￿12.3￿million;￿2010:￿EUR￿8.6￿million)￿on￿our
property,￿plant￿and￿equipment,￿mainly￿relating￿to￿furniture,￿fixture￿and￿other￿equipment.￿Valuation￿of￿these￿assets￿is
classified￿as￿Level￿3￿in￿the￿fair￿value￿hierarchy￿since￿their￿fair￿values￿were￿determined￿based￿on￿unobservable￿inputs.
The￿impairment￿charge￿is￿determined￿based￿on￿the￿difference￿between￿the￿assets’￿estimated￿fair￿value￿(being￿EUR￿0.1
million)￿and￿their￿carrying￿amount.￿For￿further￿information,￿see￿Note￿11.

We￿did￿not￿recognize￿any￿impairment￿charges￿for￿goodwill￿and￿other￿intangible￿assets￿during￿2012.￿See￿Notes￿9￿and￿10
for￿more￿information.

3. Financial risk management
We￿are￿exposed￿to￿certain￿financial￿risks￿such￿as￿market￿risk￿(including￿foreign￿currency￿exchange￿risk￿and￿interest￿rate
risk),￿credit￿risk,￿liquidity￿risk￿and￿capital￿risk.￿The￿overall￿risk￿management￿program￿focuses￿on￿the￿unpredictability
of￿financial￿markets￿and￿seeks￿to￿minimize￿potentially￿adverse￿effects￿on￿our￿financial￿performance.￿We￿use￿derivative
financial￿instruments￿to￿hedge￿certain￿risk￿exposures.￿None￿of￿our￿transactions￿are￿entered￿into￿for￿trading￿or
speculative￿purposes.￿We￿believe￿that￿market￿information￿is￿the￿most￿reliable￿and￿transparent￿measure￿for￿our￿derivative
financial￿instruments￿that￿are￿measured￿at￿fair￿value.

Foreign currency risk management
Our￿sales￿are￿predominately￿denominated￿in￿euros.￿Exceptions￿may￿occur￿on￿a￿customer￿by￿customer￿basis.￿Our￿cost￿of
sales￿and￿other￿expenses￿are￿mainly￿denominated￿in￿euros,￿to￿a￿certain￿extent￿in￿U.S.￿dollar￿and￿Japanese￿yen￿and￿to￿a
limited￿extent￿in￿other￿currencies.￿Therefore,￿we￿are￿exposed￿to￿foreign￿currency￿exchange￿risk.

ASML￿ANNUAL￿REPORT￿2012

F-15

It￿is￿our￿policy￿to￿hedge￿material￿transaction￿exposures,￿such￿as￿forecasted￿sales￿and￿purchase￿transactions,￿and
material￿net￿remeasurement￿exposures,￿such￿as￿accounts￿receivable￿and￿payable.￿We￿hedge￿these￿exposures￿through
the￿use￿of￿foreign￿exchange￿contracts.

As￿of￿December￿31,￿2012,￿accumulated￿other￿comprehensive￿income￿includes￿EUR￿4.9￿million￿gain￿(net￿of￿taxes:
EUR￿4.3￿million￿gain;￿2011:￿EUR￿4.4￿million￿loss)￿representing￿the￿total￿anticipated￿gain￿to￿be￿released￿to￿sales,￿and
EUR￿6.0￿million￿loss￿(net￿of￿taxes:￿EUR￿5.3￿million￿loss;￿2011:￿EUR￿10.3￿million￿gain)￿to￿be￿charged￿to￿cost￿of￿sales,
which￿will￿offset￿the￿EUR￿equivalent￿of￿foreign￿currency￿denominated￿forecasted￿sales￿and￿purchase￿transactions.￿All
amounts￿are￿expected￿to￿be￿released￿over￿the￿next￿12￿months.￿The￿effectiveness￿of￿all￿contracts￿for￿which￿we￿apply
hedge￿accounting￿is￿monitored￿on￿a￿quarterly￿basis￿throughout￿the￿life￿of￿the￿hedges.￿During￿2012,￿no￿ineffective￿hedge
relationships￿were￿recognized￿(2011:￿loss￿of￿EUR￿0.2￿million￿related￿to￿sales￿transactions).

Interest rate risk management
We￿have￿interest-bearing￿assets￿and￿liabilities￿that￿expose￿us￿to￿fluctuations￿in￿market￿interest￿rates.￿We￿use￿interest
rate￿swaps￿to￿align￿the￿interest-typical￿terms￿of￿interest-bearing￿liabilities￿with￿the￿interest-typical￿terms￿of￿interest-
bearing￿assets.￿There￿may￿be￿residual￿interest￿rate￿risk￿to￿the￿extent￿the￿asset￿and￿liability￿positions￿do￿not￿fully￿offset.

As￿part￿of￿our￿hedging￿policy,￿we￿use￿interest￿rate￿swaps￿to￿hedge￿changes￿in￿fair￿value￿of￿our￿Eurobond￿due￿to
changes￿in￿market￿interest￿rates,￿thereby￿offsetting￿the￿variability￿of￿future￿interest￿receipts￿on￿part￿of￿our￿cash￿and
cash￿equivalents.￿During￿2012,￿the￿hedge￿was￿100￿percent￿effective￿in￿hedging￿the￿fair￿value￿exposure￿to￿interest￿rate
movements.￿The￿changes￿in￿fair￿value￿of￿the￿Eurobond￿were￿included￿at￿the￿same￿time￿in￿the￿consolidated￿statement￿of
operations￿as￿the￿changes￿in￿the￿fair￿value￿of￿the￿interest￿rate￿swaps.

Furthermore,￿as￿part￿of￿our￿hedging￿policy,￿we￿use￿interest￿rate￿swaps￿to￿hedge￿the￿variability￿of￿future￿interest￿cash
flows￿relating￿to￿certain￿of￿our￿operating￿lease￿obligations.￿During￿2012,￿these￿hedges￿were￿100￿percent￿effective￿in
hedging￿the￿cash￿flow￿exposure￿to￿interest￿rate￿movements.

Financial instruments
We￿use￿foreign￿exchange￿contracts￿to￿manage￿our￿currency￿risk￿and￿interest￿rate￿swaps￿to￿manage￿our￿interest￿rate￿risk.
The￿following￿table￿summarizes￿the￿notional￿amounts￿and￿estimated￿fair￿values￿of￿our￿financial￿instruments:

(in thousands)
Forward￿foreign￿exchange￿contracts¹
Interest￿rate￿swaps²

As of December 31 Notional amount
EUR
262,146
624,900

Fair Value
EUR
16,805
124,050

Notional amount
EUR
389,579
641,500

Fair Value
EUR
(23,999)
109,991

2012

2011

1 Relates￿to￿forward￿contracts￿assigned￿as￿a￿hedge￿to￿forecasted￿sales￿and￿purchase￿transactions￿and￿to￿monetary￿assets￿and￿liabilities,￿mainly￿in￿U.S.

dollar￿and￿Japanese￿Yen.

2 Relates￿to￿interest￿rate￿swaps￿assigned￿as￿a￿hedge￿to￿interest￿bearing￿assets￿and￿liabilities,￿mainly￿related￿to￿the￿Eurobond;￿the￿fair￿value￿of￿the

interest￿rate￿swaps￿includes￿accrued￿interest.

The￿following￿table￿summarizes￿our￿derivative￿financial￿instruments￿per￿category:

As of December 31
(in thousands)
Interest￿rate￿swaps￿-￿cash￿flow￿hedges
Interest￿rate￿swaps￿-￿fair￿value￿hedges
Forward￿foreign￿exchange￿contracts￿-￿cash￿flow￿hedges
Forward￿foreign￿exchange￿contracts￿-￿other￿hedges￿(no￿hedge￿accounting)
Total
￿
Less￿non-current￿portion:
Interest￿rate￿swaps￿-￿cash￿flow￿hedges
Interest￿rate￿swaps￿-￿fair￿value￿hedges
Total non-current portion
￿
Total current portion

2012

2011

Assets
EUR
-
128,830
5,975
16,943
151,748
￿
￿

-
101,651
101,651
￿

50,097

Liabilities
EUR
4,780
-
5,688
425
10,893

￿
￿

￿

4,032
-
4,032

Assets
EUR
-
113,924
11,332
1,095
126,351
￿
￿

-
92,534
92,534

￿

Liabilities
EUR
3,933
-
3,019
33,407
40,359

￿
￿

￿

3,210
-
3,210

6,861

33,817

37,149

The￿fair￿value￿part￿of￿a￿hedging￿derivative￿that￿has￿a￿remaining￿term￿of￿12￿months￿or￿less￿after￿balance￿sheet￿date￿is
classified￿as￿current￿asset￿or￿liability.￿When￿the￿fair￿value￿part￿of￿a￿hedging￿derivative￿has￿a￿term￿of￿more￿than￿12￿months
after￿balance￿sheet￿date,￿it￿is￿classified￿as￿non-current.￿The￿current￿portion￿of￿derivative￿financial￿instruments￿is￿included

ASML￿ANNUAL￿REPORT￿2012

F-16

 
 
in￿respectively￿other￿current￿assets￿and￿current￿accrued￿and￿other￿liabilities￿in￿the￿balance￿sheet.￿The￿non-current
portion￿of￿derivative￿financial￿instruments￿is￿included￿in,￿respectively,￿other￿non-current￿assets￿and￿non-current￿accrued
and￿other￿liabilities￿in￿the￿balance￿sheet.

For￿further￿information￿regarding￿our￿derivative￿financial￿instruments,￿see￿Notes￿1,￿2,￿8￿and￿12.

Foreign exchange contracts
The￿notional￿principal￿amounts￿of￿the￿outstanding￿forward￿foreign￿exchange￿contracts￿in￿the￿main￿currencies￿U.S.￿dollar
and￿Japanese￿yen￿at￿December￿31,￿2012￿are￿U.S.￿dollar￿159.8￿million￿and￿Japanese￿yen￿8.4￿billion￿(2011:￿U.S.￿dollar
48.9￿million￿and￿Japanese￿yen￿37.2￿billion).

The￿hedged￿highly￿probable￿forecasted￿transactions￿denominated￿in￿foreign￿currency￿are￿expected￿to￿occur￿at￿various
dates￿during￿the￿coming￿12￿months.￿Gains￿and￿losses￿recognized￿in￿other￿comprehensive￿income￿on￿forward￿foreign
exchange￿contracts￿as￿of￿December￿31,￿2012￿will￿be￿recognized￿in￿the￿consolidated￿statements￿of￿operations￿in￿the
period￿or￿periods￿during￿which￿the￿hedged￿forecasted￿transactions￿affect￿the￿consolidated￿statements￿of￿operations.

In￿2012,￿we￿recognized￿a￿net￿amount￿of￿EUR￿8.7￿million￿gain￿(2011:￿EUR￿58.1￿million￿loss;￿2010:￿EUR￿43.5￿million
loss)￿in￿the￿consolidated￿statements￿of￿operations￿resulting￿from￿effective￿cash￿flow￿hedges￿for￿forecasted￿sales￿and
purchase￿transactions￿that￿occurred￿in￿the￿year.￿Furthermore,￿we￿recognized￿an￿amount￿of￿EUR￿3.0￿million￿gain￿in￿the
consolidated￿statements￿of￿operations￿resulting￿from￿derivative￿financial￿instruments￿measured￿at￿fair￿value￿through
profit￿or￿loss￿(2011:￿EUR￿38.3￿million￿loss;￿2010:￿EUR￿32.9￿million￿loss).

Interest rate swaps
The￿notional￿principal￿amounts￿of￿the￿outstanding￿interest￿rate￿swap￿contracts￿as￿of￿December￿31,￿2012￿were￿EUR
624.9￿million￿(2011:￿EUR￿641.5￿million).

Credit risk management
Financial￿instruments￿that￿potentially￿subject￿us￿to￿significant￿concentration￿of￿credit￿risk￿consist￿principally￿of￿cash
and￿cash￿equivalents,￿short-term￿investments,￿derivative￿financial￿instruments￿used￿for￿hedging￿activities,￿accounts
receivable￿and￿finance￿receivables.

Cash￿and￿cash￿equivalents,￿short-term￿investments￿and￿derivative￿financial￿instruments￿contain￿an￿element￿of￿risk￿of
the￿counterparties￿being￿unable￿to￿meet￿their￿obligations.￿Our￿risk￿management￿program￿focuses￿appropriately￿on
the￿current￿environment￿of￿uncertainty￿in￿the￿financial￿markets,￿especially￿in￿the￿euro-zone.￿We￿invest￿our￿cash￿and
cash￿equivalents￿and￿short-term￿investments￿in￿short-term￿deposits￿with￿high-rated￿financial￿institutions￿and￿the￿Dutch
government,￿in￿Dutch￿Treasury￿Certificates￿and￿in￿AAAm-rated￿money￿market￿funds￿that￿invest￿in￿high-rated￿short-term
debt￿securities￿of￿financial￿institutions￿and￿governments.￿To￿mitigate￿the￿risk￿that￿any￿of￿our￿counterparties￿in￿hedging
transactions￿is￿unable￿to￿meet￿its￿obligations,￿We￿only￿enter￿into￿transactions￿with￿a￿limited￿number￿of￿major￿financial
institutions￿that￿have￿high￿credit￿ratings￿and￿closely￿monitor￿the￿creditworthiness￿of￿our￿counterparties.￿Concentration
risk￿is￿mitigated￿by￿limiting￿the￿exposure￿to￿a￿single￿counterparty.

Our￿customers￿consist￿of￿Integrated￿Circuit￿("IC")￿manufacturers￿located￿throughout￿the￿world.￿We￿perform￿ongoing
credit￿evaluations￿of￿our￿customers’￿financial￿condition.￿We￿take￿additional￿measures￿to￿mitigate￿credit￿risk￿when
considered￿appropriate￿by￿means￿of￿e.g.￿down￿payments,￿letters￿of￿credit,￿and￿retention￿of￿ownership￿provisions￿in
contracts.￿Retention￿of￿ownership￿enables￿us￿to￿recover￿the￿systems￿in￿the￿event￿a￿customer￿defaults￿on￿payment.

Liquidity risk management
Our￿liquidity￿needs￿are￿affected￿by￿many￿factors,￿some￿of￿which￿are￿based￿on￿the￿normal￿on-going￿operations￿of￿the
business,￿and￿others￿that￿relate￿to￿the￿uncertainties￿of￿the￿global￿economy￿and￿the￿semiconductor￿industry.￿Although
our￿cash￿requirements￿fluctuate￿based￿on￿the￿timing￿and￿extent￿of￿these￿factors,￿we￿believe￿that￿cash￿generated￿from
operations,￿together￿with￿the￿liquidity￿provided￿by￿existing￿cash￿and￿cash￿equivalents￿and￿short-term￿investments￿and
our￿borrowing￿capability￿are￿sufficient￿to￿satisfy￿our￿current￿requirements,￿including￿our￿2013￿capital￿expenditures.￿We
intend￿to￿return￿cash￿to￿our￿shareholders￿on￿a￿regular￿basis￿in￿the￿form￿of￿dividend￿payments￿and,￿subject￿to￿our￿actual
and￿anticipated￿liquidity￿requirements￿and￿other￿relevant￿factors,￿share￿buybacks￿or￿capital￿repayment.

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4. Cash and cash equivalents and short-term investments
Cash￿and￿cash￿equivalents￿at￿December￿31,￿2012￿include￿deposits￿with￿high-rated￿financial￿institutions￿and￿the
Dutch￿government￿of￿EUR￿775.6￿million￿(2011:￿EUR￿1,818.6￿million),￿investments￿in￿AAAm-rated￿money￿market￿funds
that￿invest￿in￿high-rated￿debt￿securities￿of￿financial￿institutions￿and￿governments￿of￿EUR￿385.4￿million￿(2011:￿EUR
369.2￿million)￿and￿interest-bearing￿bank￿accounts￿of￿EUR￿606.6￿million￿(2011:￿EUR￿544.0￿million).￿Our￿cash￿and￿cash
equivalents￿are￿predominantly￿denominated￿in￿euros￿and￿partly￿in￿US￿dollars.

Cash￿and￿cash￿equivalents￿have￿insignificant￿interest￿rate￿risk￿and￿remaining￿maturities￿of￿three￿months￿or￿less￿at￿the
date￿of￿acquisition.￿No￿restrictions￿on￿usage￿of￿cash￿and￿cash￿equivalents￿exist.￿The￿carrying￿amount￿of￿these￿assets
approximates￿their￿fair￿value.

Short-term￿investments￿have￿insignificant￿interest￿rate￿risk￿and￿remaining￿maturities￿longer￿than￿three￿months￿but￿less
than￿one￿year￿at￿the￿date￿of￿acquisition.

Short-term￿investments￿(classified￿as￿available￿for￿sale￿securities)￿consist￿of￿the￿following:

As of December 31, 2012
(in thousands)
Dutch￿Treasury￿Certificates
Deposits
Total

Cost basis
279,988
650,017
930,005

Unrealized
Gains
-
-
-

Unrealized

Losses Recorded Basis
279,988
650,017
930,005

-
-
-

We￿had￿no￿short-term￿investments￿as￿of￿December￿31,￿2011.

5. Accounts receivable
Accounts￿receivable￿consist￿of￿the￿following:

As of December 31
(in thousands)
Accounts￿receivable,￿gross
Allowance￿for￿doubtful￿receivables
￿
Accounts receivable, net

2012
EUR
607,359
(2,071)
￿
605,288

2011
EUR
883,209
(2,582)
￿
880,627

The￿carrying￿amount￿of￿the￿accounts￿receivable￿approximates￿the￿fair￿value.￿ASML￿performs￿ongoing￿credit￿evaluations
on￿its￿customers’￿financial￿condition.￿ASML￿periodically￿reviews￿whether￿an￿allowance￿for￿credit￿losses￿is￿needed￿by
considering￿factors￿such￿as￿historical￿payment￿experience,￿credit￿quality,￿aging￿accounts￿receivables￿balances,￿and
current￿economic￿conditions￿that￿may￿affect￿a￿customer’s￿ability￿to￿pay.

Movements￿of￿the￿allowance￿for￿doubtful￿receivables￿are￿as￿follows:

Year ended December 31
(in thousands)
Balance￿at￿beginning￿of￿year
Addition￿for￿the￿year1
Utilization￿of￿the￿provision
￿
Allowance for doubtful receivables

2012
EUR
(2,582)
(458)
969
￿
(2,071)

2011
EUR
(1,945)
(849)
212
￿
(2,582)

1 Addition￿for￿the￿year￿is￿recorded￿in￿cost￿of￿sales.

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6. Finance receivables
Finance￿receivables￿consist￿of￿the￿net￿investment￿in￿sales-type￿leases.￿The￿following￿table￿lists￿the￿components￿of￿the
finance￿receivables￿as￿of￿December￿31,￿2012￿and￿2011:

As of December 31
(in thousands)
Finance￿receivables,￿gross
Unearned￿interest
Finance receivables, net
Current￿portion￿of￿finance￿receivables,￿gross
Current￿portion￿of￿unearned￿interest
Non-current portion of finance receivables, net

2012
EUR
309,616
(5,828)
303,788
268,617
(3,450)
38,621

2011
EUR
78,853
-
78,853
78,853
-
-

The￿increase￿in￿finance￿receivables￿as￿of￿December￿31,￿2012￿compared￿to￿December￿31,￿2011￿is￿caused￿by￿an
increased￿number￿of￿sales-type￿leases.￿At￿December￿31,￿2012,￿the￿finance￿receivables￿due￿for￿payment￿in￿each￿of￿the
next￿five￿years￿and￿thereafter￿are￿as￿follows:

(in thousands)
2013
2014
2015
2016
2017
Thereafter
Finance receivables, gross

EUR
268,617
7,501
7,516
13,681
12,301
-
309,616

ASML￿performs￿ongoing￿credit￿evaluations￿on￿its￿customers’￿financial￿condition.￿ASML￿periodically￿reviews￿whether
an￿allowance￿for￿credit￿losses￿is￿needed￿by￿considering￿factors￿such￿as￿historical￿payment￿experience,￿credit￿quality,
aging￿finance￿receivable￿balances,￿and￿current￿economic￿conditions￿that￿may￿affect￿a￿customer’s￿ability￿to￿pay.￿In￿2012
and￿2011,￿we￿did￿not￿record￿any￿expected￿credit￿losses￿from￿finance￿receivables.￿As￿of￿December￿31,￿2012￿the￿finance
receivables￿were￿neither￿past￿due￿nor￿impaired.

7. Inventories
Inventories￿consist￿of￿the￿following:

As of December 31
(in thousands)
Raw￿materials
Work-in-process
Finished￿products
￿
Inventories, gross
Allowance￿for￿obsolescence￿and/or￿lower￿market￿value
Inventories, net

2012
EUR
307,315
1,074,042
742,979
￿
2,124,336
(267,366)
1,856,970

A￿summary￿of￿activity￿in￿the￿allowance￿for￿obsolescence￿and/or￿lower￿market￿value￿is￿as￿follows:

Year ended December 31
(in thousands)
Balance￿at￿beginning￿of￿year
Addition￿for￿the￿year
Effect￿of￿changes￿in￿exchange￿rates
Utilization￿of￿the￿provision
Allowance for obsolescence and/or lower market value

2012
EUR
(193,513)
(130,911)
1,009
56,049
(267,366)

2011
EUR
258,712
1,026,872
532,556
￿
1,818,140
(193,513)
1,624,627

2011
EUR
(189,235)
(60,300)
(883)
56,905
(193,513)

In￿2012,￿the￿addition￿for￿the￿year￿is￿recorded￿in￿cost￿of￿sales￿for￿an￿amount￿of￿EUR￿125.2￿million￿and￿R&D￿costs￿for
an￿amount￿of￿EUR￿5.7￿million￿(2011:￿cost￿of￿sales￿EUR￿60.0￿million￿and￿R&D￿costs￿for￿an￿amount￿of￿EUR￿0.3￿million).
Addition￿for￿the￿year￿mainly￿relates￿to￿write￿downs￿as￿result￿of￿technological￿developments￿and￿inventory￿parts￿which
became￿obsolete￿and￿includes￿EUR￿43.5￿million￿(2011:￿EUR￿17.0￿million)￿with￿respect￿to￿lower￿of￿cost￿or￿market
adjustments.

ASML￿ANNUAL￿REPORT￿2012

F-19

Utilization￿of￿the￿provision￿mainly￿relates￿to￿sale￿and￿scrap￿of￿obsolete￿inventories.￿In￿2012￿ASML￿made￿EUR￿2.3￿million
profit￿on￿the￿sale￿of￿inventories￿that￿had￿been￿previously￿written￿down￿(2011:￿EUR￿4.5￿million).

8. Other assets
Other￿current￿assets￿consist￿of￿the￿following:

As of December 31
(in thousands)
Advance￿payments￿to￿Zeiss
Prepaid￿expenses
Derivative￿financial￿instruments
VAT
Other￿receivables
Other current assets

2012
EUR
70,257
64,708
50,097
25,215
35,728
246,005

2011
EUR
66,203
56,300
33,817
47,543
34,232
238,095

Zeiss￿is￿our￿sole￿supplier￿of￿main￿optical￿systems￿(including￿lenses)￿and,￿from￿time￿to￿time,￿receives￿non-interest￿bearing
advance￿payments￿from￿us￿that￿assist￿in￿financing￿Zeiss'￿work-in-process￿and￿thereby￿secure￿lens￿and￿optical￿module
deliveries￿to￿us.￿Amounts￿owed￿under￿these￿advance￿payments￿are￿repaid￿or￿settled￿through￿lens￿or￿EUV￿optical￿module
deliveries￿over￿the￿following￿12￿months.

Prepaid￿expenses￿include￿a￿tax￿prepayment￿on￿intercompany￿profit,￿not￿realized￿by￿the￿ASML￿group￿of￿EUR￿29.8￿million
as￿of￿December￿31,￿2012￿(2011:￿EUR￿27.5￿million).

Derivative￿financial￿instruments￿consist￿of￿forward￿foreign￿exchange￿contracts￿and￿the￿current￿part￿of￿the￿aggregate￿fair
value￿of￿interest￿rate￿swaps￿which￿includes￿accrued￿interest.

Other￿non-current￿assets￿consist￿of￿the￿following:

As of December 31
(in thousands)
Advance￿payments￿to￿Zeiss
Derivative￿financial￿instruments
Compensation￿plan￿assets1
Prepaid￿expenses
Subordinated￿loan￿granted￿to￿lessor￿in￿respect￿of￿Veldhoven￿headquarters2
Other
Other non-current assets

2012
EUR
183,025
101,651
12,080
4,462
5,445
4,875
311,538

2011
EUR
187,950
92,534
10,577
5,749
5,445
4,996
307,251

1
2

For￿further￿details￿on￿compensation￿plan￿assets￿see￿Note￿17.
For￿further￿details￿on￿the￿loan￿granted￿to￿lessor￿in￿respect￿of￿Veldhoven￿headquarters￿see￿Note￿11.

The￿non-current￿part￿of￿advance￿payments￿to￿Zeiss￿mainly￿relates￿to￿payments￿made￿to￿support￿the￿Zeiss'￿investments
in￿ASML’s￿EUV￿program,￿which￿are￿expected￿to￿be￿repaid￿or￿settled￿through￿EUV￿optical￿module￿deliveries.

Derivative￿financial￿instruments￿consist￿of￿the￿non-current￿part￿of￿the￿fair￿value￿of￿interest￿rate￿swaps.

ASML￿ANNUAL￿REPORT￿2012

F-20

9. Goodwill
Changes￿in￿goodwill￿are￿summarized￿as￿follows:

Year ended December 31
(in thousands)
Cost
Balance,￿January￿1
Acquisition￿subsidiary
Effect￿of￿changes￿in￿exchange￿rates
Goodwill

2012
EUR
￿
146,044
6,038
(2,914)
149,168

2011
EUR
￿
141,286
-
4,758
146,044

Goodwill￿is￿tested￿for￿impairment￿annually￿on￿September￿30￿and￿whenever￿events￿or￿changes￿in￿circumstances￿indicate
that￿the￿carrying￿amount￿of￿the￿goodwill￿may￿not￿be￿recoverable.

Due￿to￿changes￿in￿our￿reporting￿structure,￿we￿have￿re-evaluated￿our￿reporting￿units￿during￿2012.￿As￿result,￿all￿goodwill
recognized￿in￿relation￿to￿the￿acquisition￿of￿Brion￿in￿2007￿is￿allocated￿to￿the￿operating￿segment￿ASML￿(in￿2011￿and￿2010
assigned￿to￿the￿reporting￿unit￿Brion).

Due￿to￿the￿re-evaluation￿of￿our￿reporting￿units,￿resulting￿in￿the￿recognized￿goodwill￿being￿allocated￿to￿the￿operating
segment￿ASML,￿we￿also￿changed￿the￿recoverability￿testing￿of￿the￿annual￿impairment￿test.￿As￿a￿result,￿the￿fair￿value￿of
the￿operating￿segment￿ASML￿is￿based￿on￿ASML's￿market￿capitalization,￿while￿the￿sum￿of￿discounted￿future￿cash￿flows
relating￿to￿the￿reporting￿units￿was￿used￿in￿prior￿years.

We￿believe￿that,￿as￿per￿September￿30,￿2012,￿ASML's￿market￿capitalization,￿determined￿on￿basis￿of￿the￿quoted￿share
price￿of￿ASML's￿publicly￿traded￿outstanding￿shares,￿is￿the￿best￿evidence￿of￿the￿fair￿value￿of￿the￿operating￿segment
ASML.

Based￿on￿the￿recoverability￿testing￿during￿the￿annual￿goodwill￿impairment￿test,￿management￿believes￿that￿the￿fair￿value
of￿the￿reporting￿unit￿substantially￿exceeded￿its￿carrying￿value,￿therefore￿goodwill￿was￿not￿impaired￿as￿of￿December￿31,
2012￿and￿December￿31,￿2011.
￿
Acquisition￿subsidiary￿relates￿to￿Wijdeven￿Motion￿Holding￿B.V.￿and￿its￿wholly-owned￿subsidiary￿Wijdeven￿Motion￿B.V.
(hereafter￿jointly￿referred￿to￿as￿"Wijdeven￿Motion")￿acquired￿in￿the￿fourth￿quarter￿of￿2012.￿Wijdeven￿Motion￿builds￿a
portion￿of￿the￿complex￿linear￿motors￿used￿in￿ASML’s￿wafer￿and￿reticle￿stages.￿Assets￿acquired￿and￿liabilities￿incurred,￿or
assumed,￿following￿the￿acquisition￿have￿been￿assigned￿to￿the￿operating￿segment￿ASML.

ASML￿ANNUAL￿REPORT￿2012

F-21

10. Other intangible assets
Other￿intangible￿assets￿consist￿of￿the￿following:

(in thousands)
Cost
Balance,￿January￿1,￿2011
￿
Balance,￿December￿31,￿2011
Additions
Balance, December 31, 2012
￿
Accumulated amortization
￿
Balance,￿January￿1,￿2011
Amortization
￿
Balance,￿December￿31,￿2011
Amortization
Balance, December 31, 2012
￿
Carrying amount
December￿31,￿2011
December 31, 2012

Intellectual
property
EUR
￿
47,250
￿
47,250
7,658
54,908
￿
￿
￿
47,224
4
￿
47,228
800
48,028
￿
￿
22
6,880

Developed
technology
EUR
￿
25,883
￿
25,883
-
25,883
￿
￿
￿
17,043
4,080
￿
21,123
4,080
25,203
￿
￿
4,760
680

Customer
relationships
EUR
￿
8,733
￿
8,733
-
8,733
￿
￿
￿
4,185
1,092
￿
5,277
1,092
6,369
￿
￿
3,456
2,364

In-process
R&D
EUR
￿
23,148
￿
23,148
-
23,148
￿
￿
￿
23,148
-
￿
23,148
-
23,148
￿
￿
-
-

Other
EUR
￿
2,231
￿
2,231
-
2,231
￿
￿
￿
1,994
109
￿
2,103
109
2,212
￿
￿
128
19

Total
EUR
￿
107,245
￿
107,245
7,658
114,903
￿
￿
￿
93,594
5,285
￿
98,879
6,081
104,960
￿
￿
8,366
9,943

Intellectual￿property￿relates￿to￿licenses￿and￿patents￿purchased￿from￿third￿parties.￿During￿2012,￿we￿acquired￿intellectual
property￿from￿third￿parties￿for￿an￿amount￿of￿EUR￿7.7￿million.￿Developed￿technology,￿customer￿relationships,￿in-process
R&D￿and￿other￿were￿obtained￿in￿the￿acquisition￿of￿Brion.

During￿2012,￿we￿recorded￿amortization￿charges￿of￿EUR￿6.1￿million￿(2011:￿EUR￿5.3￿million;￿2010:￿EUR￿5.5￿million)￿which
were￿recorded￿in￿cost￿of￿sales￿for￿EUR￿6.0￿million￿(2011:￿EUR￿5.3￿million;￿2010:￿EUR￿5.5￿million)￿and￿in￿R&D￿costs￿for
EUR￿0.1￿million￿(2011￿and￿2010:￿nil).

During￿2012,￿2011￿and￿2010,￿we￿did￿not￿record￿any￿impairment￿charges￿for￿other￿intangible￿assets.

As￿at￿December￿31,￿2012,￿estimated￿amortization￿expenses￿relating￿to￿other￿intangible￿assets￿for￿the￿next￿five￿years￿and
thereafter￿are￿as￿follows:

(in thousands)
2013
2014
2015
2016
2017
Thereafter
￿
Amortization expenses

EUR
3,322
2,624
1,714
1,533
750
-
￿
9,943

ASML￿ANNUAL￿REPORT￿2012

F-22

 
11. Property, plant and equipment
Property,￿plant￿and￿equipment￿consist￿of￿the￿following:

(in thousands)
Cost
Balance,￿January￿1,￿2011
Additions
Disposals
Effect￿of￿changes￿in￿exchange￿rates
Balance,￿December￿31,￿2011
Additions
Disposals
Effect￿of￿changes￿in￿exchange￿rates
Balance, December 31, 2012
￿
Accumulated depreciation and impairment
Balance,￿January￿1,￿2011
Depreciation
Impairment￿charges
Disposals
Effect￿of￿changes￿in￿exchange￿rates
Balance,￿December￿31,￿2011
Depreciation
Impairment￿charges
Disposals
Effect￿of￿changes￿in￿exchange￿rates
Balance, December 31, 2012
￿
Carrying amount
December￿31,￿2011
December 31, 2012

Land,
buildings and
constructions
EUR
￿
526,855
213,513
-
1,773
742,141
106,234
(347)
(995)
847,033
￿
￿
127,509
27,362
-
-
1,006
155,877
31,598
649
(347)
(505)
187,272
￿
￿
586,264
659,761

Machinery
and
equipment
EUR
￿
609,253
355,358
(212,286)
11,698
764,023
248,429
(317,022)
(4,671)
690,759
￿
￿
358,026
99,968
3,508
(64,417)
4,715
401,800
110,571
906
(92,205)
(3,090)
417,982
￿
￿
362,223
272,777

Leasehold
improvements
EUR
￿
185,635
20,918
(216)
323
206,660
8,883
(300)
(391)
214,852
￿
￿
129,741
13,128
2,789
(41)
158
145,775
13,416
-
(248)
(165)
158,778
￿
￿
60,885
56,074

Furniture,
fixtures and
other
equipment
EUR
￿
316,244
29,314
(1,619)
1,040
344,979
22,749
(30,894)
(59)
336,775
￿
￿
277,380
17,575
5,975
(988)
799
300,741
23,668
1,679
(30,575)
(49)
295,464
￿
￿
44,238
41,311

Total
EUR
￿
1,637,987
619,103
(214,121)
14,834
2,057,803
386,295
(348,563)
(6,116)
2,089,419
￿
￿
892,656
158,033
12,272
(65,446)
6,678
1,004,193
179,253
3,234
(123,375)
(3,809)
1,059,496
￿
￿
1,053,610
1,029,923

As￿of￿December￿31,￿2012,￿the￿carrying￿amount￿includes￿assets￿under￿construction￿for￿land,￿buildings￿and￿constructions
of￿EUR￿5.5￿million￿(2011:￿EUR￿165.0￿million),￿machinery￿and￿equipment￿of￿EUR￿21.8￿million￿(2011:￿EUR￿16.6￿million),
leasehold￿improvements￿of￿EUR￿1.0￿million￿(2011:￿EUR￿1.3￿million)￿and￿furniture,￿fixtures￿and￿other￿equipment￿of￿EUR
9.3￿million￿(2011:￿EUR￿8.0￿million).￿As￿of￿December￿31,￿2012,￿the￿carrying￿amount￿of￿land￿amounts￿to￿EUR￿60.7￿million
(2011:￿EUR￿51.1￿million).

The￿majority￿of￿the￿additions￿and￿disposals￿in￿2012￿and￿2011￿relate￿to￿machinery￿and￿equipment￿(including￿operating
leases￿to￿customers,￿prototypes,￿evaluation￿and￿training￿systems).￿These￿systems￿are￿similar￿to￿those￿that￿ASML￿sells
in￿its￿ordinary￿course￿of￿business.￿The￿systems￿are￿capitalized￿under￿property,￿plant￿and￿equipment￿because￿they￿are
held￿for￿own￿use,￿for￿rental￿and￿for￿evaluation￿purposes.￿These￿systems￿are￿recorded￿at￿cost￿and￿depreciated￿over￿their
expected￿useful￿life.￿From￿the￿time￿that￿these￿assets￿are￿no￿longer￿held￿by￿use￿but￿intended￿for￿sale￿in￿the￿ordinary
course￿of￿business,￿they￿are￿reclassified￿from￿property,￿plant￿and￿equipment￿to￿inventory￿at￿the￿lower￿of￿their￿carrying
value￿or￿fair￿market￿value.￿Since￿the￿transfers￿between￿inventory￿and￿property,￿plant￿and￿equipment￿are￿non-cash
events,￿these￿are￿not￿reflected￿in￿the￿consolidated￿statements￿of￿cash￿flows.￿An￿amount￿of￿EUR￿204.8￿million￿(2011:
EUR￿300.5￿million)￿of￿the￿additions￿relates￿to￿non-cash￿transfers￿from￿inventory￿and￿an￿amount￿of￿EUR￿9.6￿million
(2011:￿EUR￿17.7￿million)￿relates￿to￿other￿non-cash￿movements￿(mainly￿investments￿not￿yet￿paid).￿An￿amount￿of￿EUR
222.9￿million￿(2011:￿EUR￿145.3￿million)￿of￿the￿disposals￿relates￿to￿non-cash￿transfers￿to￿inventory.￿When￿sold,￿the
proceeds￿and￿cost￿of￿these￿systems￿are￿recorded￿as￿net￿sales￿and￿cost￿of￿sales,￿respectively,￿identical￿to￿the￿treatment
of￿other￿sales￿transactions.￿The￿cost￿of￿sales￿for￿these￿systems￿includes￿the￿inventory￿value￿and￿the￿additional￿costs￿of
refurbishing￿(materials￿and￿labor).

The￿impairment￿charges￿recorded￿in￿2012￿mainly￿related￿to￿furniture,￿fixture￿and￿other￿equipment￿(EUR￿1.7￿million).
We￿recorded￿impairment￿charges￿with￿respect￿to￿software￿which￿are￿ceased￿to￿be￿used.￿The￿impairment￿charges￿were
determined￿based￿on￿the￿difference￿between￿the￿assets’￿estimated￿fair￿value￿(being￿EUR￿0.1￿million)￿and￿their￿carrying
amount.

The￿impairment￿charges￿recorded￿in￿2011￿mainly￿related￿to￿machinery￿and￿equipment￿and￿furniture,￿fixture￿and￿other
equipment￿(EUR￿9.5￿million).￿We￿recorded￿impairment￿charges￿with￿respect￿to￿technical￿equipment￿and￿software￿which

ASML￿ANNUAL￿REPORT￿2012

F-23

 
 
 
 
 
 
 
 
 
 
 
are￿ceased￿to￿be￿used.￿The￿impairment￿charges￿were￿determined￿based￿on￿the￿difference￿between￿the￿assets’￿estimated
fair￿value￿(being￿EUR￿1.9￿million)￿and￿their￿carrying￿amount.

The￿impairment￿charges￿recorded￿in￿2010￿mainly￿related￿to￿buildings￿and￿constructions￿(EUR￿6.7￿million).￿We￿recorded
impairment￿charges￿with￿respect￿to￿several￿technical￿infrastructure￿items￿which￿are￿ceased￿to￿be￿used￿due￿to￿technical
changes￿relating￿to￿NXE￿(EUV)￿development.￿The￿impairment￿charges￿were￿determined￿based￿on￿the￿difference￿between
the￿assets’￿estimated￿fair￿value￿(being￿EUR￿0.4￿million)￿and￿their￿carrying￿amount.

In￿determining￿the￿fair￿value￿of￿an￿asset,￿we￿make￿estimates￿about￿future￿cash￿flows.￿These￿estimates￿are￿based￿on￿our
financial￿plan,￿updated￿with￿the￿latest￿available￿projections￿of￿the￿semiconductor￿market￿conditions￿and￿our￿sales￿and
cost￿expectations,￿which￿is￿consistent￿with￿what￿ASML￿uses￿to￿manage￿its￿business.

As￿of￿December￿31,￿2012,￿the￿carrying￿amount￿of￿machinery￿and￿equipment￿includes￿an￿amount￿of￿EUR￿82.2￿million￿with
respect￿to￿evaluation￿and￿operating￿lease￿systems￿(2011:￿EUR￿201.4￿million).

During￿2012,￿we￿recorded￿impairment￿charges￿of￿EUR￿3.2￿million￿(2011:￿EUR￿12.3￿million;￿2010:￿EUR￿8.6￿million)￿of
which￿we￿recorded￿EUR￿1.0￿million￿(2011:￿EUR￿6.2￿million;￿2010:￿EUR￿7.3￿million)￿in￿cost￿of￿sales,￿EUR￿0.5￿million￿(2011:
EUR￿3.5￿million;￿2010:￿EUR￿0.7￿million)￿in￿R&D￿costs￿and￿EUR￿1.7￿million￿(2011:￿EUR￿2.6￿million;￿2010:￿EUR￿0.6￿million)
in￿SG&A￿costs.

During￿2012,￿we￿recorded￿depreciation￿charges￿of￿EUR￿179.3￿million￿(2011:￿EUR￿158.0￿million;￿2010:￿EUR￿144.6￿million)
of￿which￿we￿recorded￿EUR￿147.7￿million￿(2011:￿EUR￿117.7￿million;￿2010:￿EUR￿108.7￿million)￿in￿cost￿of￿sales,￿EUR￿15.3
million￿(2011￿EUR￿24.9￿million;￿2010:￿EUR￿16.7￿million)￿in￿R&D￿costs￿and￿EUR￿16.3￿million￿(2011:￿EUR￿15.4￿million;￿2010:
EUR￿19.2￿million)￿in￿SG&A￿costs.

Variable Interest Entity
The￿carrying￿amount￿of￿land,￿buildings￿and￿constructions￿includes￿an￿amount￿of￿EUR￿32.4￿million￿(2011:￿EUR￿33.8
million)￿relating￿to￿our￿headquarters￿in￿Veldhoven,￿the￿Netherlands,￿which￿is￿owned￿by￿Koppelenweg￿II￿B.V.,￿a￿"VIE".

As￿of￿2003,￿we￿are￿leasing￿the￿Veldhoven￿headquarters￿for￿a￿period￿of￿15￿years￿(from￿2003)￿from￿an￿entity￿("lessor")￿that
was￿incorporated￿by￿a￿syndicate￿of￿three￿banks￿("VIE￿shareholders")￿solely￿for￿the￿purpose￿of￿leasing￿this￿building.￿The
lessor’s￿shareholders'￿equity￿amounts￿to￿EUR￿1.9￿million￿and￿has￿not￿changed￿since￿2003.

The￿VIE￿shareholders￿each￿granted￿a￿loan￿of￿EUR￿11.6￿million￿and￿a￿fourth￿bank￿granted￿a￿loan￿of￿EUR￿12.3￿million
(EUR￿47.1￿million￿in￿total)￿to￿the￿parent￿of￿the￿lessor.￿ASML￿provided￿the￿parent￿of￿the￿lessor￿with￿a￿subordinated￿loan
of￿EUR￿5.4￿million￿and￿has￿a￿purchase￿option￿that￿is￿exercisable￿either￿at￿the￿end￿of￿the￿lease￿in￿2018,￿at￿a￿price￿of
EUR￿24.5￿million,￿or￿during￿the￿lease￿at￿a￿price￿equal￿to￿the￿book￿value￿of￿the￿assets.￿The￿total￿assets￿of￿the￿lessor
entity￿amounted￿to￿EUR￿54.5￿million￿at￿inception￿of￿the￿lease.￿The￿entity￿is￿determined￿to￿be￿a￿VIE￿because￿the￿equity
investors￿do￿not￿have￿sufficient￿equity￿at￿risk￿for￿the￿legal￿entity￿to￿finance￿its￿activities￿without￿sufficient￿additional
subordinated￿support.

The￿primary￿purpose￿for￿which￿the￿VIE￿was￿created￿was￿to￿provide￿ASML￿with￿use￿of￿the￿building￿for￿15￿years,￿where
ASML￿does￿not￿retain￿substantially￿all￿the￿risks￿and￿rewards￿from￿changes￿in￿value￿of￿the￿building.￿The￿main￿activities
of￿the￿entity￿are￿to￿rent,￿re-market￿and￿ultimately￿sell￿the￿building￿that￿is￿owned￿by￿the￿VIE.￿The￿economic￿performance
of￿the￿VIE￿is￿most￿significantly￿impacted￿by￿the￿ability￿of￿the￿lessee￿(ASML)￿to￿exercise￿the￿purchase￿option￿at￿any￿time
during￿the￿lease￿term,￿and￿thus￿we￿could￿potentially￿benefit￿from￿increases￿in￿the￿fair￿value￿of￿the￿building.

While￿the￿debt￿holders￿have￿a￿variable￿interest,￿and￿may￿absorb￿losses,￿and￿the￿equity￿holders￿have￿a￿variable￿interest
and￿may￿receive￿benefits,￿they￿do￿not￿have￿the￿power￿to￿direct￿activities￿that￿most￿significantly￿impact￿the￿entity’s
economic￿performance￿and￿therefore,￿cannot￿be￿the￿primary￿beneficiary.￿Through￿the￿pre-determined￿price￿of￿the￿call
option￿ASML￿has￿the￿power￿over￿the￿VIE,￿therefore￿only￿ASML￿meets￿both￿the￿power￿and￿losses/benefit￿criterion￿and
consolidates￿the￿VIE.

ASML￿ANNUAL￿REPORT￿2012

F-24

12. Accrued and other liabilities
Accrued￿and￿other￿liabilities￿consist￿of￿the￿following:

As of December 31
(in thousands)
Deferred￿revenue
Costs￿to￿be￿paid
Down￿payments￿from￿customers
Personnel￿related￿items
Derivative￿financial￿instruments
Standard￿warranty￿reserve
Other
Accrued and other liabilities
Less:￿non-current￿portion￿of￿accrued￿and￿other￿liabilities1
Current portion of accrued and other liabilities

2012
EUR
739,136
278,066
1,033,768
200,670
10,893
21,626
1,352
2,285,511
405,141
1,880,370

2011
EUR
816,045
260,651
1,057,046
212,059
40,359
43,273
2,313
2,431,746
663,099
1,768,647

1

The￿main￿part￿of￿the￿non-current￿portion￿of￿accrued￿and￿other￿liabilities￿relates￿to￿down￿payments￿received￿from￿customers￿regarding￿future￿shipments
of￿EUV￿systems.

The￿decrease￿in￿accrued￿and￿other￿liabilities￿mainly￿relates￿to￿the￿decrease￿in￿deferred￿revenue,￿standard￿warranty
reserve￿and￿derivative￿financial￿instruments.

Deferred￿revenue￿mainly￿consists￿of￿prepaid￿extended￿and￿enhanced￿(optic)￿warranty￿contracts￿and￿award￿credits
regarding￿free￿or￿discounted￿products￿or￿services.￿The￿decrease￿in￿deferred￿revenue￿is￿mainly￿caused￿by￿product
deliveries￿in￿2012￿that￿were￿deferred￿as￿of￿December￿31,￿2011￿including￿one￿NXE:3100￿system￿of￿which￿revenues￿were
deferred￿for￿an￿amount￿of￿EUR￿48.6￿million￿as￿of￿December￿31,￿2011.

The￿deferred￿revenue￿balance￿from￿extended￿and￿enhanced￿(optic)￿warranty￿contracts￿as￿of￿December￿31,￿2012,
amounted￿to￿EUR￿242.2￿million￿(2011:￿EUR￿280.1￿million).

The￿deferred￿revenue￿balance￿from￿installation￿and￿training￿services￿as￿of￿December￿31,￿2012￿amounted￿to￿EUR￿4.0
million￿(2011:￿EUR￿1.8￿million)￿and￿EUR￿12.4￿million￿(2011:￿EUR￿11.9￿million),￿respectively.

Costs￿to￿be￿paid￿mainly￿relate￿to￿accrued￿cost￿for￿unbilled￿services￿provided￿by￿suppliers￿including￿contracted￿labor,
outsourced￿services￿and￿consultancy.

We￿receive￿advances￿from￿customers￿prior￿to￿shipment￿for￿systems￿included￿in￿ASML’s￿current￿product￿portfolio￿or
systems￿currently￿under￿development￿in￿the￿form￿of￿down￿payments.

Personnel￿related￿items￿mainly￿consist￿of￿accrued￿management￿bonuses,￿accrued￿profit￿sharing,￿accrued￿vacation￿days,
accrued￿vacation￿allowance,￿accrued￿wage￿tax,￿social￿securities￿and￿accrued￿pension￿premiums.

Derivative￿financial￿instruments￿consist￿of￿foreign￿currency￿contracts￿and￿the￿aggregate￿fair￿value￿of￿interest￿rate￿swaps
which￿includes￿accrued￿interest.

Changes￿in￿standard￿warranty￿reserve￿for￿the￿years￿2012￿and￿2011￿are￿as￿follows:

(in thousands)
Balance,￿January￿1
Additions￿of￿the￿year
Utilization￿of￿the￿reserve
Release￿of￿the￿reserve
Effect￿of￿exchange￿rates
Standard warranty reserve

2012
EUR
43,273
35,735
(33,746)
(22,733)
(903)
21,626

2011
EUR
37,965
61,279
(26,968)
(29,415)
412
43,273

The￿release￿of￿the￿reserve￿is￿due￿to￿a￿change￿in￿accounting￿estimate￿based￿on￿lower￿than￿expected￿historical￿warranty
expenses￿as￿a￿result￿of￿an￿improved￿learning-curve￿concerning￿ASML’s￿systems.￿The￿release￿has￿been￿included￿in￿cost
of￿sales.

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F-25

 
13. Provisions
The￿movement￿in￿the￿provision￿for￿lease￿contract￿termination￿costs￿is￿as￿follows:

(in thousands)
Balance,￿January￿1
Utilization￿of￿the￿provision
Unwinding￿of￿discount
Effect￿of￿exchange￿rates
Provision for lease contract termination costs
Less:￿current￿portion￿of￿provision￿for￿lease￿contract￿termination￿costs
Non-current portion of provision for lease contract termination costs

2012
EUR
12,338
(2,545)
628
(167)
10,254
2,280
7,974

2011
EUR
14,061
(2,452)
421
308
12,338
2,326
10,012

The￿provision￿for￿lease￿contract￿termination￿costs￿relates￿to￿an￿operating￿lease￿contract￿for￿a￿building￿for￿which￿no
economic￿benefits￿are￿expected.￿The￿provision￿for￿lease￿contract￿termination￿costs￿is￿expected￿to￿be￿utilized￿by￿2017.

14. Long-term debt
The￿long-term￿debt￿consists￿of￿the￿following:

As of December 31
(in thousands)
Eurobond,￿carrying￿amount
Loan￿headquarter￿building1
Other
Long-term debt
Less:￿current￿portion￿of￿long-term￿debt
Non-current portion of long-term debt

2012
EUR
710,095
32,366
17,029
759,490
3,610
755,880

2011
EUR
695,618
33,795
6,955
736,368
2,587
733,781

1

This￿loan￿relates￿to￿our￿Variable￿Interest￿Entity,￿see￿Note￿11.

Our￿obligations￿to￿make￿principal￿repayments￿under￿the￿Eurobond￿and￿other￿borrowing￿arrangements￿excluding￿interest
expense￿as￿of￿December￿31,￿2012,￿for￿the￿next￿five￿years￿and￿thereafter,￿are￿as￿follows:

(in thousands)
2013
2014
2015
2016
2017
Thereafter
Long-term debt
Less:￿current￿portion￿of￿long-term￿debt
Non-current portion of long-term debt

EUR
3,610
3,535
3,535
3,535
603,535
31,644
649,394
3,610
645,784

Eurobond
The￿following￿table￿summarizes￿the￿carrying￿amount￿of￿our￿outstanding￿Eurobond,￿including￿the￿fair￿value￿of￿interest￿rate
swaps￿used￿to￿hedge￿the￿change￿in￿the￿fair￿value￿of￿the￿Eurobond:

As of December 31
(in thousands)
Principal￿amount
Fair￿value￿interest￿rate￿swaps1
Carrying amount

2012
EUR
600,000
110,095
710,095

2011
EUR
600,000
95,618
695,618

1

The￿fair￿value￿of￿the￿interest￿rate￿swaps￿excludes￿accrued￿interest.

In￿June￿2007,￿we￿completed￿an￿offering￿of￿EUR￿600.0￿million￿principal￿amount￿of￿our￿5.75￿percent￿notes￿due￿2017,￿with
interest￿payable￿annually￿on￿June￿13.￿The￿notes￿are￿redeemable￿at￿the￿option￿of￿ASML,￿in￿whole￿or￿in￿part,￿at￿any￿time
by￿paying￿a￿make￿whole￿premium,￿and￿unless￿previously￿redeemed,￿will￿be￿redeemed￿at￿100￿percent￿of￿their￿principal
amount￿on￿June￿13,￿2017.

ASML￿ANNUAL￿REPORT￿2012

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The￿Eurobond￿serves￿as￿a￿hedged￿item￿in￿a￿fair￿value￿hedge￿relationship￿in￿which￿we￿hedge￿the￿variability￿of￿changes￿in
the￿fair￿value￿of￿our￿Eurobond￿due￿to￿changes￿in￿market￿interest￿rates￿with￿interest￿rate￿swaps.￿The￿fair￿value￿changes￿of
these￿interest￿rate￿swaps￿are￿recorded￿on￿the￿consolidated￿balance￿sheets￿under￿derivative￿financial￿instruments￿(within
other￿current￿assets￿and￿other￿non-current￿assets)￿and￿the￿carrying￿amount￿of￿the￿Eurobond￿is￿adjusted￿for￿these￿fair
value￿changes￿only.￿The￿following￿table￿summarizes￿amongst￿others￿the￿estimated￿fair￿value￿of￿the￿Eurobond:

As of December 31
(in thousands)
Principal￿amount
Carrying￿amount
Fair￿value1

2012
EUR
600,000
710,095
700,644

2011
EUR
600,000
695,618
640,500

1 Source:￿Bloomberg￿Finance￿LP

The￿fair￿value￿of￿our￿Eurobond￿is￿estimated￿based￿on￿quoted￿market￿prices￿as￿of￿December￿31,￿2012.￿The￿fair￿value￿of
the￿Eurobond￿is￿higher￿than￿the￿principal￿amount￿as￿a￿result￿of￿lower￿market￿interest￿rates￿compared￿to￿the￿fixed￿5.75%
coupon￿rate￿of￿the￿Eurobond.

15. Lines of credit
Our￿available￿credit￿facilities￿amount￿to￿EUR￿500.0￿million￿as￿of￿December￿31,￿2012￿and￿as￿of￿December￿31,￿2011.
The￿amount￿at￿December￿31,￿2012￿consists￿of￿one￿EUR￿500.0￿million￿committed￿revolving￿credit￿facility￿from￿a￿group
of￿banks￿that￿will￿mature￿in￿2015.￿The￿credit￿facility￿contains￿a￿restrictive￿covenant￿that￿requires￿us￿to￿maintain￿a
minimum￿committed￿capital￿to￿net￿total￿assets￿ratio￿of￿40.0￿percent￿calculated￿in￿accordance￿with￿contractually
agreed￿definitions.￿As￿of￿December￿31,￿2012￿and￿December￿31,￿2011,￿this￿ratio￿was￿85.8￿percent￿and￿87.7￿percent,
respectively.￿Therefore,￿we￿are￿in￿compliance￿with￿the￿covenant￿at￿the￿end￿of￿2012￿and￿2011.￿Outstanding￿amounts
under￿this￿credit￿facility￿will￿bear￿interest￿at￿EURIBOR￿or￿LIBOR￿plus￿a￿margin￿that￿depends￿on￿our￿liquidity￿position.￿No
amounts￿were￿outstanding￿under￿this￿credit￿facility￿at￿the￿end￿of￿2012￿and￿2011.

ASML￿ANNUAL￿REPORT￿2012

F-27

16. Commitments, contingencies and guarantees
We￿have￿various￿contractual￿obligations,￿some￿of￿which￿are￿required￿to￿be￿recorded￿as￿liabilities￿in￿our￿consolidated
financial￿statements,￿including￿long-￿and￿short-term￿debt.￿Other￿contractual￿obligations,￿namely￿operating￿lease
commitments,￿purchase￿obligations￿and￿guarantees,￿are￿generally￿not￿required￿to￿be￿recognized￿as￿liabilities￿on￿our
balance￿sheet￿but￿are￿required￿to￿be￿disclosed.

Our￿contractual￿obligations￿as￿of￿December￿31,￿2012￿can￿be￿summarized￿as￿follows:

Payments due by period
(in thousands)
￿
Long-Term￿Debt￿Obligations,￿including￿interest￿expense1
Operating￿Lease￿Obligations

1 year
EUR
￿
39,801
32,195
Purchase￿Obligations 1,643,955 1,557,021
2,964
￿
Total Contractual Obligations 2,633,943 1,631,981

Unrecognized￿Tax￿Benefits,￿including￿interest￿expense
￿

Total
EUR
￿
831,194
98,827

59,967
￿

2 year
EUR
￿
39,726
22,267
84,012
4,209
￿
150,214

3 year
EUR
￿
39,726
17,192
2,876
-
￿
59,794

4 year
EUR
￿
39,726
13,465
32
-
￿
53,223

5 year
EUR
￿
639,726
5,265
14
16,957
￿
661,962

After
5 years
EUR
￿
32,489
8,443
-
35,837
￿
76,769

1 See￿Note￿14￿for￿the￿amounts￿excluding￿interest￿expenses.

Long-term￿debt￿obligations￿mainly￿relate￿to￿interest￿payments￿and￿the￿principal￿amount￿of￿the￿Eurobond.￿See￿Note￿14.

Operating￿lease￿obligations￿include￿leases￿of￿equipment￿and￿facilities.￿Lease￿payments￿recognized￿as￿an￿expense
were￿EUR￿41.6￿million,￿EUR￿40.6￿million￿and￿EUR￿37.9￿million￿for￿the￿years￿ended￿December￿31,￿2012,￿2011￿and￿2010,
respectively.

Several￿operating￿leases￿for￿our￿buildings￿contain￿purchase￿options,￿exercisable￿at￿the￿end￿of￿the￿lease,￿and￿in￿some
cases,￿during￿the￿term￿of￿the￿lease.￿The￿amounts￿to￿be￿paid￿if￿ASML￿would￿exercise￿these￿purchase￿options￿at￿the￿end
of￿the￿lease￿as￿of￿December￿31,￿2012￿can￿be￿summarized￿as￿follows:

Purchase options due by period
(in thousands)
Purchase￿options

Total
EUR
22,982

1 year
EUR
-

2 year
EUR
8,999

3 year
EUR
-

4 year
EUR
13,983

5 year
EUR
-

After 5
years
EUR
-

Purchase￿obligations￿include￿purchase￿commitments￿with￿suppliers￿in￿the￿ordinary￿course￿of￿business.￿ASML￿expects
that￿it￿will￿honor￿these￿purchase￿obligations￿to￿fulfill￿future￿sales,￿in￿line￿with￿the￿timing￿of￿those￿future￿sales.￿The
general￿terms￿and￿conditions￿of￿the￿agreements￿relating￿to￿the￿major￿part￿of￿our￿purchase￿commitments￿as￿of￿December
31,￿2012￿contain￿clauses￿that￿enables￿us￿to￿delay￿or￿cancel￿delivery￿of￿ordered￿goods￿and￿services￿up￿to￿the￿dates
specified￿in￿the￿corresponding￿purchase￿contracts.￿These￿terms￿and￿conditions￿that￿we￿have￿agreed￿with￿our￿supply
chain￿partners￿gives￿us￿additional￿flexibility￿to￿adapt￿our￿purchase￿obligations￿to￿our￿requirements￿in￿light￿of￿the￿inherent
cyclicality￿of￿the￿semiconductor￿equipment￿industry￿in￿which￿we￿operate.￿We￿establish￿a￿provision￿for￿cancellation￿fees
when￿it￿is￿probable￿that￿the￿liability￿has￿been￿incurred￿and￿the￿amount￿of￿cancellation￿fees￿is￿reasonably￿estimable.

17. Employee benefits
Bonus plan
Our￿bonus￿expenses￿for￿all￿participants￿of￿all￿bonus￿plans￿were:

Year ended December 31
(in thousands)
￿
Bonus￿expenses

2012
EUR
￿
16,474

2011
EUR
￿
15,557

2010
EUR
￿
12,489

Bonus￿expenses￿include￿an￿amount￿of￿EUR￿1.8￿million￿(2011:￿EUR￿1.7￿million;￿2010:￿EUR￿1.6￿million)￿in￿relation￿to￿the
short-term￿incentive￿("STI")￿cash￿bonus￿for￿the￿Board￿of￿Management￿(we￿refer￿to￿Note￿21)￿and￿EUR￿0.1￿million￿(2011:
EUR￿0.7￿million;￿2010:￿EUR￿1.2￿million)￿in￿relation￿to￿the￿Brion￿retention￿bonus￿plan.

ASML￿ANNUAL￿REPORT￿2012

F-28

 
 
 
 
 
 
 
ASML￿has￿a￿performance￿related￿bonus￿plan￿for￿senior￿management,￿who￿are￿not￿members￿of￿the￿Board￿of
Management.￿Under￿this￿plan,￿the￿bonus￿amount￿is￿dependent￿on￿actual￿performance￿against￿corporate,￿departmental
and￿personal￿targets.￿The￿bonus￿for￿members￿of￿senior￿management￿can￿range￿between￿0.0￿percent￿and￿40.0￿percent,
or￿0.0￿percent￿and￿70.0￿percent,￿of￿their￿annual￿salaries,￿depending￿upon￿their￿seniority.￿The￿performance￿targets￿are￿set
for￿each￿half￿year.￿The￿bonus￿of￿the￿first￿half￿of￿2012￿was￿paid￿in￿the￿second￿half￿of￿2012.￿The￿bonus￿of￿the￿second￿half
is￿accrued￿for￿in￿the￿consolidated￿balance￿sheet￿as￿of￿December￿31,￿2012￿and￿is￿expected￿to￿be￿paid￿in￿the￿first￿quarter
of￿2013.￿Our￿bonus￿expenses￿under￿this￿plan￿were:

Year ended December 31
(in thousands)
￿
Bonus￿expenses

2012
EUR
￿
14,588

2011
EUR
￿
13,131

2010
EUR
￿
9,694

Profit-sharing plan
ASML￿has￿a￿profit-sharing￿plan￿covering￿all￿European￿and￿US￿non-sales￿employees￿who￿are￿not￿members￿of￿the￿Board
of￿Management￿or￿senior￿management.￿Under￿the￿plan,￿eligible￿employees￿receive￿an￿annual￿profit-sharing,￿based
on￿a￿percentage￿of￿net￿income￿relative￿to￿sales￿ranging￿from￿0.0￿to￿20.0￿percent￿of￿annual￿salary.￿The￿profit￿sharing
for￿the￿years￿2012,￿2011￿and￿2010￿was￿18.0￿percent￿or￿EUR￿64.5￿million,￿20.0￿percent￿or￿EUR￿64.0￿million￿and￿18.0
percent￿or￿EUR￿52.2￿million,￿respectively.￿Our￿profit￿is￿also￿one￿of￿the￿criteria￿for￿the￿individual￿variable￿pay￿programs￿for
employees￿in￿Asia￿and￿employees￿eligible￿to￿the￿sales￿reward￿plan￿which￿amount￿to￿EUR￿24.4￿million￿for￿2012￿(including
EUR￿2.6￿million￿for￿the￿sales￿reward￿plan),￿EUR￿23.2￿million￿for￿2011￿and￿EUR￿23.1￿million￿for￿2010.

Share-based compensation
We￿have￿adopted￿various￿share￿(option)￿plans￿for￿our￿employees.￿Each￿year,￿the￿Board￿of￿Management￿determines,￿by
category￿of￿ASML￿personnel,￿the￿total￿available￿number￿of￿stock￿options￿and￿maximum￿number￿of￿shares￿that￿can￿be
granted￿in￿that￿year.￿The￿determination￿is￿subject￿to￿the￿approval￿of￿our￿Supervisory￿Board.￿For￿members￿of￿the￿Board
of￿Management￿ASML￿has￿separate￿share-based￿payment￿plans,￿for￿details￿on￿service￿and￿vesting￿conditions￿see￿below
and￿for￿additional￿information￿see￿note￿21.￿Our￿current￿share-based￿payment￿plans￿do￿not￿provide￿cash￿settlement￿of
options￿and￿shares.￿￿

The￿total￿gross￿amount￿of￿recognized￿compensation￿expenses￿associated￿with￿share-based￿payments￿(including￿share-
based￿payments￿to￿the￿Board￿of￿Management)￿was￿EUR￿18.7￿million￿in￿2012,￿EUR￿12.4￿million￿in￿2011￿and￿EUR￿12.1
million￿in￿2010.￿The￿tax￿benefit￿recognized￿related￿to￿the￿recognized￿expenses￿amounts￿to￿EUR￿0.9￿million￿in￿2012,￿EUR
0.5￿million￿in￿2011￿and￿EUR￿1.0￿million￿in￿2010.￿

Total￿compensation￿expenses￿related￿to￿non-vested￿awards￿to￿be￿recognized￿in￿future￿periods￿amount￿to￿EUR￿30.4
million￿as￿per￿December￿31,￿2012￿(2011:￿EUR￿23.3￿million;￿2010:￿EUR￿16.7￿million).￿The￿weighted￿average￿period￿over
which￿these￿costs￿are￿expected￿to￿be￿recognized￿is￿calculated￿at￿2.0￿years￿(2011:￿1.9￿years;￿2010:￿2.0￿years).￿

Option plans
Options￿granted￿under￿ASML’s￿stock￿option￿plans￿have￿fixed￿exercise￿prices￿equal￿to￿the￿closing￿price￿of￿our￿ordinary
shares￿on￿NYSE￿Euronext￿Amsterdam￿or￿NASDAQ￿on￿the￿applicable￿grant-dates.￿Granted￿stock￿options￿generally￿vest
over￿a￿three-year￿period￿with￿any￿unexercised￿stock￿options￿expiring￿ten￿years￿after￿the￿grant-date.
ASML￿has￿five￿different￿stock￿option￿plans:
• Employee￿plan
• Option￿purchase￿plan
• Brion￿stock￿option￿plan
• Senior￿management￿plan
• Stock￿option￿extension￿plan

The￿Option￿purchase￿plan￿and￿Stock￿option￿extension￿plan￿have￿no￿service￿and￿vesting￿conditions.￿The￿other￿plans
typically￿have￿a￿three￿to￿four￿year￿service￿condition.￿Furthermore￿senior￿management￿and￿Board￿of￿Management￿plans
have￿vesting￿conditions￿based￿on￿performance.￿The￿fair￿value￿of￿the￿stock￿options￿is￿determined￿using￿a￿Black-Scholes
option￿valuation￿model.￿￿

ASML￿ANNUAL￿REPORT￿2012

F-29

The￿Black-Scholes￿option￿valuation￿of￿our￿stock￿options￿is￿based￿on￿the￿following￿assumptions:

Year ended December 31
￿
Weighted￿average￿share￿price￿(in￿EUR)
Volatility￿(in￿percentage)
Expected￿life￿(in￿years)
Risk￿free￿interest￿rate
Expected￿dividend￿yield￿(in￿EUR)
Forfeiture￿rate1

2012
￿
40.3
25.6
5.0
2.1
1.45
-

2011
￿
28.0
37.8
4.8
2.9
1.25
-

2010
￿
24.1
36.4
4.6
2.5
1.06
-

1 As￿of￿year￿end￿for￿each￿of￿the￿three￿years￿ended￿December￿31,￿forfeitures￿are￿estimated￿to￿be￿nil.

When￿establishing￿the￿expected￿life￿assumption￿we￿annually￿take￿into￿account￿the￿contractual￿terms￿of￿the￿stock
options￿as￿well￿as￿historical￿employee￿exercise￿behavior.￿

Other￿details￿with￿respect￿to￿stock￿options￿are￿set￿out￿in￿the￿following￿table:

Year ended December 31

2012

￿ ￿

Weighted￿average￿fair￿value￿of￿stock￿options￿granted
Weighted￿average￿share￿price￿at￿the￿exercise￿date￿of￿stock￿options
Aggregate￿intrinsic￿value￿of￿stock￿options￿exercised￿(in￿thousands)
Aggregate￿remaining￿contractual￿term￿of￿currently￿exercisable￿options￿(years)
Aggregate￿intrinsic￿value￿of￿exercisable￿stock￿options￿(in￿thousands)
Aggregate￿intrinsic￿value￿of￿outstanding￿stock￿options￿(in￿thousands)

8.97
40.45
71,331
3.59
34,438
35,671

￿

2011
￿

￿

8.28
29.39
30,204
2.08
39,384
45,141

2010  
￿
8.22 ￿
25.77 ￿
22,720 ￿
2.86 ￿
54,109 ￿
65,240 ￿

2012

11.87
50.88
12,684
3.17
21,882
22,433

￿

2011
￿
10.42
41.94
11,323
1.80
20,492
20,791

2010

11.10
33.79
13,669
2.59
25,780
28,024

EUR-
denominated 

USD-
denominated 

The￿number￿and￿weighted￿average￿exercise￿prices￿of￿stock￿options￿as￿of￿December￿31,￿2012,￿and￿changes￿during￿the
year￿then￿ended￿are￿presented￿below:

Outstanding,￿January￿1,￿2012
Granted
Exercised
Forfeited
Expired
Outstanding, December 31, 2012
Exercisable,￿December￿31,￿2012

EUR-denominated

USD-denominated

Number of options
5,133,659
32,240
(2,928,641)
(5,530)
(1,103,566)
1,128,162
1,060,262

Weighted average
exercise price per
ordinary share (EUR)
24.48
39.52
16.07
18.22
55.45
16.38
15.52

Number of options
1,792,305
11,041
(362,071)
(350)
(946,089)
494,836
472,586

Weighted average
exercise price per
ordinary share (USD)
34.01
51.79
15.87
33.75
48.98
19.06
18.09

Details￿with￿respect￿to￿the￿stock￿options￿outstanding￿are￿set￿out￿in￿the￿following￿table:

EUR-denominated

USD-denominated

Range of exercise
prices (EUR)
0￿-￿10
10￿-￿15
15￿-￿20
20￿-￿25
25￿-￿40
40￿-￿50
50￿-￿60
Total

Number of
outstanding options at
December 31, 2012
-
602,473
292,093
176,120
30,422
27,054
-
1,128,162

Weighted average
remaining contractual
life of outstanding
options (years)
-
3.00
3.91
5.18
8.77
9.79
-
3.89

Range of exercise
prices (USD)
0￿-￿10
10￿-￿15
15￿-￿20
20￿-￿25
25￿-￿40
40￿-￿50
50￿-￿60
Total

Number of
outstanding options at
December 31, 2012
55,260
230,215
5,424
101,697
90,116
2,077
10,047
494,836

Weighted average
remaining
contractual
life of outstanding
options (years)
2.75
1.64
5.80
4.49
6.16
8.66
9.70
3.41

ASML￿ANNUAL￿REPORT￿2012

F-30

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
In￿2012,￿2011￿and￿2010￿only￿repurchased￿shares￿were￿used￿to￿satisfy￿the￿option￿rights￿upon￿exercise.￿For￿more
information￿with￿respect￿to￿repurchased￿shares￿we￿refer￿to￿Note￿27.￿

Share￿plans
Shares￿granted￿under￿ASML’s￿share￿plans￿include￿a￿three￿to￿four￿year￿service￿period￿and￿for￿some￿plans￿performance
conditions.￿The￿fair￿value￿of￿shares￿is￿determined￿based￿on￿the￿closing￿trading￿price￿of￿our￿shares￿on￿NYSE￿Euronext
Amsterdam￿or￿NASDAQ￿on￿the￿grant￿date.

ASML￿has￿six￿different￿share￿plans:
• Employee￿plan
• Share￿purchase￿plan
• New￿hire￿performance￿share￿plan
• Brion￿performance￿share￿plan
• Senior￿management￿plan
• Board￿of￿management￿performance￿share￿plan￿(we￿refer￿to￿Note￿21)￿

The￿Share￿purchase￿plan￿has￿no￿service￿and￿vesting￿conditions.￿The￿employee￿plan￿has￿only￿service￿conditions.￿The
other￿plans￿have￿service￿conditions￿which￿are￿similar￿and￿have￿vesting￿conditions￿which￿are￿based￿on￿performance.

Details￿with￿respect￿to￿shares￿are￿set￿out￿in￿the￿following￿table:

Total￿fair￿value￿at￿vesting￿date￿of￿shares￿vested￿during￿the￿year￿(in￿thousands)
Weighted￿average￿fair￿value￿of￿shares￿granted

16,179
36.15

Year ended December 31

2012

￿ ￿

￿

2011
￿
9,155
28.09

2010  
￿
6,165 ￿
23.51 ￿

￿

2012

5,392
47.71

2011
￿
1,956
39.00

2010
￿
8,856
31.66

EUR-
denominated 

USD-
denominated

A￿summary￿of￿the￿status￿of￿conditionally￿outstanding￿shares￿as￿of￿December￿31,￿2012,￿and￿changes￿during￿the￿year
ended￿December￿31,￿2012,￿is￿presented￿below:

Conditional shares outstanding at January 1, 2012
Granted
Vested/Issued
Forfeited
Conditional shares outstanding at December 31, 2012

EUR-denominated

USD-denominated

Weighted average
fair value at grant

Number of shares
1,479,297
678,505
(421,902)
(42,290)
1,693,610

date (EUR) Number of shares
264,891
110,465
(106,500)
(19,762)
249,094

24.19
36.15
20.88
19.91
29.92

Weighted average
fair value at grant
date (USD)
32.35
47.71
31.05
37.55
40.71

Other plans
Stock Option Extension Plans and Financing
In￿2002,￿employees￿were￿offered￿an￿extension￿of￿the￿option￿period￿for￿options￿granted￿in￿2000.￿As￿a￿result￿the￿option
period￿was￿extended￿until￿2012.￿Employees￿who￿accepted￿the￿extension￿became￿subject￿to￿additional￿exercise￿periods
in￿respect￿of￿their￿options.￿At￿the￿modification￿date,￿there￿was￿no￿intrinsic￿value￿of￿the￿modified￿award￿because￿the
exercise￿price￿under￿each￿plan￿still￿exceeded￿ASML’s￿stock￿price￿on￿the￿modification￿date.￿As￿a￿result,￿these￿stock
option￿extensions￿did￿not￿result￿in￿recognition￿of￿any￿additional￿compensation￿expense￿in￿accordance￿with￿ASC￿718.

Stock￿option￿plans￿that￿were￿issued￿before￿2001￿were￿constructed￿with￿a￿virtual￿financing￿arrangement￿in￿compliance
with￿the￿applicable￿laws￿and￿after￿obtaining￿the￿necessary￿corporate￿approvals,￿whereby￿ASML￿loaned￿the￿tax￿value￿of
the￿options￿granted￿to￿employees￿subject￿to￿the￿Dutch￿tax-regime.￿The￿interest-free￿loans￿issued￿under￿this￿arrangement
were￿repayable￿to￿ASML￿on￿the￿exercise￿date￿of￿the￿respective￿option,￿provided￿that￿the￿option￿was￿actually￿exercised.
If￿the￿options￿expired￿unexercised,￿the￿loans￿were￿forgiven.￿ASML’s￿Supervisory￿Board￿approved￿the￿Stock￿Option￿Plans
2000￿at￿the￿time,￿including￿the￿interest-free￿loans,￿as￿these￿were￿part￿of￿the￿Stock￿Option￿Plan.

In￿2006,￿we￿launched￿a￿stock￿option￿plan￿for￿Dutch￿employees￿holding￿stock￿options￿granted￿in￿2000￿(option￿"A"),
which￿expired￿in￿2012.￿In￿this￿plan￿we￿granted￿options￿(option￿"B")￿which￿only￿became￿effective￿after￿option￿"A"
expired￿unexercised￿in￿2012.￿During￿2012￿option￿type￿"A"￿expired￿and￿option￿type￿"B"￿has￿been￿fully￿exercised￿and￿all
amounts￿due￿to￿ASML￿under￿the￿virtual￿financing￿arrangement￿were￿repaid￿upon￿exercise￿of￿the￿option.￿No￿amounts￿are
outstanding￿under￿this￿virtual￿financing￿arrangement￿as￿of￿December￿31,￿2012.￿No￿compensation￿expenses￿in￿relation￿to

ASML￿ANNUAL￿REPORT￿2012

F-31

 
 
 
 
 
 
 
these￿specific￿Stock￿Option￿Extension￿Plans￿are￿recognized￿in￿the￿consolidated￿statements￿of￿operations￿for￿the￿years
2012,￿2011￿and￿2010.

Employee Purchase Plan
Every￿quarter,￿ASML￿offers￿its￿worldwide￿payroll￿employees￿the￿opportunity￿to￿buy￿ASML￿shares￿or￿ASML￿stock￿options
against￿fair￿value￿out￿of￿their￿net￿salary.￿The￿fair￿value￿for￿shares￿is￿determined￿based￿on￿the￿closing￿price￿of￿the￿ordinary
shares￿on￿NYSE￿Euronext￿Amsterdam￿on￿the￿grant-date.￿The￿fair￿value￿of￿the￿stock￿options￿is￿determined￿using￿a￿Black-
Scholes￿option￿valuation￿model.￿For￿the￿assumptions￿on￿which￿the￿Black-Scholes￿option￿valuation￿model￿is￿used,￿see
the￿disclosure￿above￿under￿the￿caption￿"Option￿Plans".￿The￿maximum￿net￿amount￿for￿which￿employees￿can￿participate
in￿the￿plan￿amounts￿to￿10.0￿percent￿of￿gross￿base￿salary.￿When￿employees￿retain￿the￿shares￿and/or￿stock￿options￿for￿a
minimum￿of￿12￿months,￿ASML￿will￿pay￿out￿a￿20.0￿percent￿cash￿bonus￿on￿the￿net￿invested￿amount.

Deferred compensation plans
In￿July￿2002,￿ASML￿adopted￿a￿non-qualified￿deferred￿compensation￿plan￿for￿its￿United￿States￿employees￿that￿allows
a￿select￿group￿of￿management￿or￿highly￿compensated￿employees￿to￿defer￿a￿portion￿of￿their￿salary,￿bonus,￿and
commissions.￿The￿plan￿allows￿ASML￿to￿credit￿additional￿amounts￿to￿the￿participants’￿account￿balances.￿The￿participants
divide￿their￿funds￿among￿the￿investments￿available￿in￿the￿plan.￿Participants￿elect￿to￿receive￿their￿funds￿in￿future￿periods
after￿the￿earlier￿of￿their￿employment￿termination￿or￿their￿withdrawal￿election,￿at￿least￿three￿years￿after￿deferral.￿There
were￿minor￿expenses￿relating￿to￿this￿plan￿in￿2012,￿2011￿and￿2010.￿As￿of￿December￿31,￿2012,￿and￿2011,￿our￿liability
under￿the￿deferred￿compensation￿plan￿was￿EUR￿11.8￿million￿and￿EUR￿10.2￿million,￿respectively.

Pension plans
ASML￿maintains￿various￿pension￿plans￿covering￿substantially￿all￿of￿its￿employees.￿Our￿employees￿in￿the￿Netherlands,
4,778￿in￿full-time￿equivalents￿("FTEs"),￿participate￿in￿a￿multi-employer￿union￿plan￿("Bedrijfstakpensioenfonds￿Metalektro"
"PME")￿determined￿in￿accordance￿with￿the￿collective￿bargaining￿agreements￿effective￿for￿the￿industry￿in￿which
ASML￿operates.￿This￿collective￿bargaining￿agreement￿has￿no￿expiration￿date.￿This￿multi-employer￿union￿plan￿covers
approximately￿1,220￿companies￿and￿approximately￿150,000￿contributing￿members.￿ASML’s￿contribution￿to￿the￿multi-
employer￿union￿plan￿is￿less￿than￿5.0%￿of￿the￿total￿contribution￿to￿the￿plan￿as￿per￿the￿annual￿report￿for￿the￿year￿ended
December￿31,￿2011.￿The￿plan￿monitors￿its￿risks￿on￿a￿global￿basis,￿not￿by￿company￿or￿employee,￿and￿is￿subject￿to
regulation￿by￿Dutch￿governmental￿authorities.￿By￿law￿(the￿Dutch￿Pension￿Act),￿a￿multi-employer￿union￿plan￿must￿be
monitored￿against￿specific￿criteria,￿including￿the￿coverage￿ratio￿of￿the￿plan's￿assets￿to￿its￿obligations.￿This￿coverage
ratio￿must￿exceed￿104.25￿percent￿for￿the￿total￿plan.￿Every￿company￿participating￿in￿a￿Dutch￿multi-employer￿union￿plan
contributes￿a￿premium￿calculated￿as￿a￿percentage￿of￿its￿total￿pensionable￿salaries,￿with￿each￿company￿subject￿to￿the
same￿percentage￿contribution￿rate.￿The￿premium￿can￿fluctuate￿yearly￿based￿on￿the￿coverage￿ratio￿of￿the￿multi-employer
union￿plan.￿The￿pension￿rights￿of￿each￿employee￿are￿based￿upon￿the￿employee's￿average￿salary￿during￿employment.￿￿

ASML's￿net￿periodic￿pension￿cost￿for￿this￿multi-employer￿union￿plan￿for￿any￿period￿is￿the￿amount￿of￿the￿required
contribution￿for￿that￿period.￿A￿contingent￿liability￿may￿arise￿from,￿for￿example,￿possible￿actuarial￿losses￿relating￿to￿other
participating￿entities￿because￿each￿entity￿that￿participates￿in￿a￿multi-employer￿union￿plan￿shares￿in￿the￿actuarial￿risks￿of
every￿other￿participating￿entity￿or￿any￿responsibility￿under￿the￿terms￿of￿a￿plan￿to￿finance￿any￿shortfall￿in￿the￿plan￿if￿other
entities￿cease￿to￿participate.￿

The￿coverage￿ratio￿of￿the￿multi-employer￿union￿plan￿increased￿to￿93.9￿percent￿as￿of￿December￿31,￿2012￿(December￿31,
2011:￿90.0￿percent).￿Because￿of￿the￿low￿coverage￿ratio,￿PME￿prepared￿and￿executed￿a￿so-called￿"Recovery￿Plan"￿which
was￿approved￿by￿De￿Nederlandsche￿Bank￿(the￿Dutch￿central￿bank,￿which￿is￿the￿supervisor￿of￿all￿pension￿companies
in￿the￿Netherlands).￿Due￿to￿the￿low￿coverage￿ratio￿and￿according￿to￿the￿obligation￿of￿the￿"Recovery￿Plan"￿the￿pension
premium￿percentage￿is￿24.0￿in￿both￿2013￿and￿2012.￿The￿coverage￿ratio￿is￿calculated￿by￿dividing￿the￿fund’s￿capital￿by￿the
total￿sum￿of￿pension￿liabilities￿and￿is￿based￿on￿actual￿market￿interest.￿￿

ASML￿ANNUAL￿REPORT￿2012

F-32

ASML￿also￿participates￿in￿several￿defined￿contribution￿pension￿plans,￿with￿ASML's￿expenses￿for￿these￿plans￿equaling
the￿contributions￿made￿in￿the￿relevant￿period.

Our￿pension￿and￿retirement￿expenses￿for￿all￿employees￿for￿the￿three￿years￿ended￿December￿31,￿2012,￿2011￿and￿2010
were:

Year ended December 31
(in thousands)
￿
Pension￿plan￿based￿on￿multi-employer￿union￿plan
Pension￿plans￿based￿on￿defined￿contribution
￿
Pension and retirement expenses

2012
EUR
￿
34,525
15,773
￿
50,298

2011
EUR
￿
31,819
14,128
￿
45,947

2010
EUR
￿
29,643
10,950
￿
40,593

18. Legal contingencies
ASML￿is￿party￿to￿various￿legal￿proceedings￿generally￿incidental￿to￿our￿business.￿ASML￿also￿faces￿exposures￿from￿other
actual￿or￿potential￿claims￿and￿legal￿proceedings.￿In￿addition,￿ASML￿customers￿may￿be￿subject￿to￿claims￿of￿infringement
from￿third￿parties￿alleging￿that￿the￿ASML￿equipment￿used￿by￿those￿customers￿in￿the￿manufacture￿of￿semiconductor
products,￿and/or￿the￿methods￿relating￿to￿use￿of￿the￿ASML￿equipment,￿infringes￿one￿or￿more￿patents￿issued￿to￿those
third￿parties.￿If￿these￿claims￿were￿successful,￿ASML￿could￿be￿required￿to￿indemnify￿such￿customers￿for￿some￿or￿all￿of
any￿losses￿incurred￿or￿damages￿assessed￿against￿them￿as￿a￿result￿of￿that￿infringement.

We￿accrue￿for￿legal￿costs￿related￿to￿litigation￿in￿our￿statement￿of￿operations￿at￿the￿time￿when￿the￿related￿legal￿services
are￿actually￿provided￿to￿ASML.￿In￿2012,￿no￿estimated￿losses￿were￿recorded￿as￿a￿charge￿to￿our￿consolidated￿statements
of￿operations￿(2011:￿no￿estimated￿losses￿were￿recorded￿and￿2010:￿EUR￿1.5￿million￿losses￿were￿recorded).

From￿late￿2001￿through￿2004,￿we￿were￿party￿to￿a￿series￿of￿civil￿litigations￿and￿administrative￿proceedings￿in￿which
Nikon￿alleged￿ASML’s￿infringement￿of￿Nikon￿patents￿relating￿to￿lithography.￿ASML￿in￿turn￿filed￿claims￿against￿Nikon.
Pursuant￿to￿agreements￿executed￿on￿December￿10,￿2004,￿ASML,￿Zeiss￿and￿Nikon￿agreed￿to￿settle￿all￿pending￿worldwide
patent￿litigation￿between￿the￿companies.￿The￿settlement￿included￿an￿exchange￿of￿releases,￿a￿patent￿Cross-License
agreement￿related￿to￿lithography￿equipment￿used￿to￿manufacture￿semiconductor￿devices￿(the￿"Nikon￿Cross-License
Agreement")￿and￿payments￿to￿Nikon￿by￿ASML￿and￿Zeiss.￿In￿connection￿with￿the￿settlement,￿ASML￿and￿Zeiss￿made
settlement￿payments￿to￿Nikon￿from￿2004￿to￿2007.￿The￿license￿period￿for￿certain￿patents￿subject￿to￿the￿Nikon￿Cross-
License￿Agreement,￿which￿were￿not￿perpetually￿licensed,￿ended￿on￿December￿31,￿2009.￿Pursuant￿to￿the￿terms￿of￿the
Nikon￿Cross-License￿Agreement,￿the￿parties￿have￿agreed,￿from￿January￿1,￿2010￿to￿December￿31,￿2014￿(the￿"Cross-
License￿Transition￿Period"),￿not￿to￿bring￿suit￿for￿claims￿related￿to￿infringement￿of￿those￿patents￿or￿for￿claims￿related
to￿infringement￿of￿patents￿issued￿during￿the￿Cross-License￿Transition￿Period.￿However,￿beginning￿on￿January￿1,
2015,￿the￿parties￿may￿bring￿suit￿for￿infringement￿of￿patents￿subject￿to￿the￿Nikon￿Cross-License￿Agreement,￿including
any￿infringement￿that￿occurred￿during￿the￿Cross-License￿Transition￿Period.￿Damages￿related￿to￿claims￿for￿patent
infringement￿occurring￿during￿the￿Cross-License￿Transition￿Period￿are￿limited￿to￿three￿percent￿of￿the￿net￿sales￿price￿of
products￿utilizing￿patents￿that￿are￿valid￿and￿enforceable.

19. Income taxes
The￿components￿of￿the￿provision￿for￿income￿taxes￿are￿as￿follows:

Year ended December 31
(in thousands)
￿
Current tax
Deferred tax
Provision for income taxes

2012
EUR
￿
(79,255)
74,993
(4,262)

2011
EUR
￿
(129,127)
(52,548)
(181,675)

2010
EUR
￿
(180,613)
(40,090)
(220,703)

The￿Dutch￿statutory￿tax￿rate￿was￿25.0￿percent￿in￿2012￿and￿2011￿and￿25.5￿percent￿in￿2010.￿Tax￿amounts￿in￿other
jurisdictions￿are￿calculated￿at￿the￿rates￿prevailing￿in￿the￿relevant￿jurisdictions.

ASML￿ANNUAL￿REPORT￿2012

F-33

The￿reconciliation￿of￿the￿provision￿for￿income￿taxes￿shown￿in￿the￿consolidated￿statements￿of￿operations,￿based￿on￿the
effective￿tax￿rate,￿with￿the￿Dutch￿statutory￿tax￿rate,￿is￿as￿follows:

Year ended December 31
(in thousands)
￿

2012  
EUR

￿ ￿

%

2011  
EUR

￿ ￿

%

2010  
EUR

￿ ￿

Income￿tax￿provision￿based￿on￿ASML's￿domestic￿rate
Effects￿of￿tax￿rates￿in￿foreign￿jurisdictions
Adjustments￿in￿respect￿of￿tax￿exempt￿income
Adjustments￿in￿respect￿of￿changes￿in￿the￿applicable￿tax￿rate1
Adjustments￿in￿respect￿of￿tax￿incentives
Adjustments￿in￿respect￿of￿prior￿years'￿current￿taxes
Movements￿in￿the￿liability￿for￿unrecognized￿tax￿benefits
Other￿credits￿and￿non-taxable￿items
Provision for income taxes

Income before income taxes 1,150,578
(287,644)
9,786
23,532
-
143,160
18,275
95,465
(6,836)
(4,262)

100.0 1,648,635
(412,159)
20,663
19,134
-
180,096
9,097
6,634
(5,140)
(181,675)

25.0
(0.9)
(2.0)
-
(12.4)
(1.6)
(8.3)
0.6
0.4

100.0 1,242,523
(316,843)
15,878
19,987
(569)
66,881
25,648
(28,796)
(2,889)
(220,703)

25.0
(1.3)
(1.2)
-
(10.9)
(0.6)
(0.4)
0.4
11.0

%

100.0
25.5
(1.3)
(1.6)
0.1
(5.4)
(2.1)
2.3
0.3
17.8

1 At￿the￿end￿of￿2010,￿the￿Dutch￿government￿enacted￿a￿tax￿rate￿reduction￿from￿25.5￿percent￿in￿2010￿to￿25.0￿percent￿in￿2011.

Income tax provision based on ASML's domestic rate
The￿provision￿for￿income￿taxes￿based￿on￿ASML's￿domestic￿rate￿is￿based￿on￿the￿Dutch￿statutory￿income￿tax￿rate￿and
reflects￿the￿provision￿for￿income￿taxes￿that￿would￿have￿been￿applicable￿if￿all￿of￿our￿income￿was￿derived￿from￿our￿Dutch
operations￿and￿there￿were￿no￿permanent￿book￿tax￿differences￿and￿no￿other￿tax￿facilities.

Effects of tax rates in foreign jurisdictions
A￿portion￿of￿ASML’s￿results￿are￿realized￿in￿countries￿other￿than￿the￿Netherlands￿where￿different￿tax￿rates￿are￿applicable.

Adjustments in respect of tax exempt income
In￿certain￿jurisdictions￿part￿of￿the￿income￿generated￿is￿tax￿exempted.

Adjustments in respect of tax incentives
Adjustments￿in￿respect￿of￿tax￿incentives￿relate￿to￿reduced￿tax￿rates￿in￿several￿jurisdictions,￿mainly￿consisting￿of￿the
agreement￿with￿the￿Dutch￿fiscal￿authorities￿of￿December￿2010￿regarding￿the￿application￿of￿the￿"Innovation￿Box",￿and￿the
research￿and￿development￿deduction￿("RDA").￿The￿Innovation￿box￿is￿a￿facility￿under￿Dutch￿corporate￿tax￿law￿pursuant￿to
which￿income￿associated￿with￿R&D￿is￿partially￿exempted￿from￿taxation.￿This￿tax￿ruling￿has￿retroactive￿effect￿to￿January
1,￿2007￿and￿is￿valid￿through￿December￿31,￿2016.￿Thereafter￿the￿validity￿of￿this￿ruling￿may￿be￿extended￿or￿this￿ruling￿may
be￿adapted￿depending￿on￿a￿possible￿change￿in￿law￿or￿change￿of￿circumstances.

Adjustments in respect of prior years’ current taxes
In￿2012,￿we￿recognized￿a￿tax￿benefit￿of￿EUR￿18.3￿million￿or￿1.6￿percent￿of￿income￿before￿taxes￿mainly￿attributable￿to￿the
application￿of￿tax￿exemptions￿for￿prior￿years,￿which￿had￿a￿favorable￿effect￿on￿the￿effective￿tax￿rate￿for￿2012.

In￿2010,￿we￿recognized￿a￿tax￿benefit￿of￿EUR￿25.6￿million￿or￿2.1￿percent￿of￿income￿before￿income￿taxes￿mainly
attributable￿to￿the￿application￿of￿the￿Innovation￿Box￿for￿prior￿years,￿which￿had￿a￿favorable￿effect￿on￿the￿effective￿tax￿rate
for￿2010￿(EUR￿37.5￿million￿including￿interest￿or￿3.0￿percent).

Movements in the liability for unrecognized tax benefits
In￿2012,￿ASML￿recognized￿a￿tax￿benefit￿of￿EUR￿95.5￿million￿or￿8.3￿percent￿of￿income￿before￿income￿taxes￿mainly￿as￿a
result￿of￿the￿successful￿conclusion￿of￿tax￿audits￿in￿different￿jurisdictions￿(EUR￿92.5￿million).

Other credits and non-taxable items
Other￿credits￿and￿non-taxable￿items￿reflect￿the￿impact￿on￿statutory￿rates￿of￿permanent￿non-taxable￿items￿such￿as￿non-
deductible￿taxes,￿non-deductible￿interest￿expense,￿and￿non-deductible￿meals￿and￿entertainment,￿as￿well￿as￿the￿impact
of￿(the￿reversal￿of)￿various￿tax￿credits￿on￿our￿provision￿for￿income￿taxes.

ASML￿ANNUAL￿REPORT￿2012

F-34

Income taxes recognized directly in shareholders' equity
Income￿taxes￿recognized￿directly￿in￿shareholders'￿equity￿(including￿other￿comprehensive￿income)￿are￿as￿follows:

Income tax recognized in shareholders' equity
(in thousands)
Current tax
Derivative￿financial￿instruments1
Tax￿(benefit)￿deficit￿from￿share-based￿payments
Total income tax recognized in shareholders' equity

2012
EUR
￿
(1,066)
(2,116)
(3,182)

2011
EUR
￿
6,257
11
6,268

2010
EUR
￿
8,262
(106)
8,156

1 Recognized￿directly￿in￿Other￿Comprehensive￿Income.

Liability for unrecognized tax benefits and deferred taxes
The￿deferred￿tax￿position￿and￿liability￿for￿unrecognized￿tax￿benefits￿recorded￿on￿the￿consolidated￿balance￿sheets￿are￿as
follows:

As of December 31
(in thousands)
Liability￿for￿unrecognized￿tax￿benefits
Deferred￿tax￿position
Total

2012
EUR
(59,967)
114,527
54,560

2011
EUR
(155,432)
137,946
(17,486)

Liability for unrecognized tax benefits
The￿calculation￿of￿our￿liability￿for￿unrecognized￿tax￿benefits￿involves￿uncertainties￿in￿the￿application￿of￿complex￿tax
laws.￿Our￿estimate￿for￿the￿potential￿outcome￿of￿any￿uncertain￿tax￿issue￿is￿highly￿judgmental.￿We￿believe￿that￿we￿have
adequately￿provided￿for￿uncertain￿tax￿positions.￿However,￿settlement￿of￿these￿uncertain￿tax￿positions￿in￿a￿manner
inconsistent￿with￿our￿expectations￿could￿have￿a￿material￿impact￿on￿our￿consolidated￿financial￿statements.

Consistent￿with￿the￿provisions￿of￿ASC￿740,￿as￿of￿December￿31,￿2012,￿ASML￿has￿a￿liability￿for￿unrecognized￿tax￿benefits
of￿EUR￿60.0￿million￿(2011:￿EUR￿155.4￿million)￿which￿is￿classified￿as￿non-current￿deferred￿and￿other￿tax￿liabilities.￿The
total￿liability￿for￿unrecognized￿tax￿benefits,￿if￿reversed,￿would￿have￿a￿favorable￿effect￿on￿our￿effective￿tax￿rate.

Expected￿interest￿and￿penalties￿related￿to￿income￿tax￿liabilities￿have￿been￿accrued￿for￿and￿are￿included￿in￿the￿liability￿for
unrecognized￿tax￿benefits￿and￿in￿the￿provision￿for￿income￿taxes.￿The￿balance￿of￿accrued￿interest￿and￿penalties￿recorded
in￿the￿consolidated￿balance￿sheets￿as￿per￿December￿31,￿2012￿amounted￿to￿EUR￿21.4￿million￿(2011:￿EUR￿24.5￿million).
Accrued￿interest￿and￿penalties￿recorded￿in￿the￿consolidated￿statement￿of￿operations￿of￿2012￿amounted￿to￿a￿tax￿benefit
of￿EUR￿3.1￿million￿(2011:￿tax￿benefit￿of￿EUR￿9.3￿million;￿2010:￿tax￿charge￿of￿EUR￿5.3￿million).

A￿reconciliation￿of￿the￿beginning￿and￿ending￿balance￿of￿the￿liability￿for￿unrecognized￿tax￿benefits￿is￿as￿follows:

As of December 31
(in thousands)
￿
Balance,￿January￿1
Gross￿increases￿–￿tax￿positions￿in￿prior￿period
Gross￿decreases￿–￿tax￿positions￿in￿prior￿period
Gross￿increases￿–￿tax￿positions￿in￿current￿period
Settlements
Lapse￿of￿statute￿of￿limitations
Total liability for unrecognized tax benefits

2012
EUR
￿
155,432
4,297
(92,521)
3,255
-
(10,496)
59,967

2011
EUR
￿
162,066
11,121
(24,566)
21,258
(10,403)
(4,044)
155,432

For￿2012￿the￿gross￿decreases￿in￿tax￿positions￿in￿prior￿period￿mainly￿relates￿to￿the￿release￿of￿tax￿positions￿after
succesfull￿conclusion￿of￿tax￿audits￿in￿different￿jurisdictions.

We￿estimate￿that￿the￿total￿liability￿for￿unrecognized￿tax￿benefits￿will￿decrease￿by￿EUR￿3.0￿million￿within￿the￿next￿12
months.￿The￿estimated￿changes￿to￿the￿liability￿for￿unrecognized￿tax￿benefits￿within￿the￿next￿12￿months￿are￿mainly￿due￿to
expected￿settlements￿with￿tax￿authorities.

We￿are￿subject￿to￿tax￿audits￿in￿our￿major￿tax￿jurisdictions￿for￿years￿from￿and￿including￿2007￿onwards￿in￿the￿Netherlands,
for￿years￿from￿and￿including￿2006￿onwards￿in￿Hong￿Kong,￿and￿for￿years￿from￿and￿including￿2001￿onwards￿in￿the￿United

ASML￿ANNUAL￿REPORT￿2012

F-35

States.￿In￿the￿course￿of￿such￿audits,￿local￿tax￿authorities￿may￿challenge￿the￿positions￿taken￿by￿us.￿For￿the￿years￿2006
through￿2010,￿the￿partial￿exemption￿of￿taxable￿profits￿is￿subject￿to￿tax￿audits￿in￿certain￿tax￿jurisdictions.

Deferred tax position
The￿changes￿in￿deferred￿income￿tax￿assets￿and￿liabilities￿consist￿of￿the￿following￿elements:

Changes in deferred tax assets and liabilities
(in thousands)
Balance, January 1
Consolidated￿statements￿of￿operations
Effect￿of￿changes￿in￿exchange￿rates
Balance, December 31

The￿deferred￿tax￿position￿is￿classified￿in￿the￿consolidated￿balance￿sheets￿as￿follows:

As of December 31
(in thousands)
￿
Deferred￿tax￿assets￿–￿current
Deferred￿tax￿assets￿–￿non-current
Total deferred tax assets
Deferred￿tax￿liabilities￿–￿current
Deferred￿tax￿liabilities￿–￿non-current
Total deferred tax liabilities
Total

2012
EUR
137,946
(20,242)
(3,177)
114,527

2012
EUR
￿
103,695
39,443
143,138
(271)
(28,340)
(28,611)
114,527

2011
EUR
193,587
(59,539)
3,898
137,946

2011
EUR
￿
120,720
38,735
159,455
(214)
(21,295)
(21,509)
137,946

The￿composition￿of￿total￿deferred￿tax￿assets￿and￿liabilities￿in￿the￿consolidated￿financial￿statements￿is￿as￿follows:

Deferred tax assets composition
of temporary
differences
(in thousands)
Capitalized￿research￿and￿development￿expenditures
Inventories
Deferred￿revenue
Provisions
Installation￿and￿warranty￿reserve
Tax￿effect￿carry-forward￿losses
Fixed￿assets
Restructuring￿and￿impairment
Alternative￿minimum￿tax￿credits1
Bilateral￿advance￿pricing￿agreement￿2
Share-based￿payments
Other￿temporary￿differences
Total

January 1,
2012
EUR
34,374
35,820
23,892
14,515
8,772
7,735
6,495
5,146
5,028
1,426
950
15,302
159,455

Consolidated
statements of
operations
EUR
(6,465)
(7,351)
(3,083)
7,296
(1,508)
(2,219)
1,454
(733)
229
(1,278)
516
140
(13,002)

Effect of
changes

in exchange December 31,
2012
EUR
27,403
28,167
20,572
21,528
7,151
5,557
7,798
4,336
5,227
148
1,433
13,818
143,138

rates
EUR
(506)
(302)
(237)
(283)
(113)
41
(151)
(77)
(30)
-
(33)
(1,624)
(3,315)

1 Alternative￿minimum￿tax￿credits￿relate￿to￿prepaid￿US￿taxes￿which￿are￿credited￿against￿future￿taxable￿profits￿after￿the￿carry-forward￿losses￿used.
2

The￿Bilateral￿advance￿pricing￿agreement￿relates￿to￿intellectual￿property￿which￿is￿capitalized￿from￿a￿tax￿perspective￿resulting￿in￿a￿temporary￿difference.

Deferred tax liabilities

composition of
of temporary
differences
(in thousands)
Fixed￿assets
Borrowing￿costs
Other￿temporary￿differences
Total

January 1,
2012
EUR
(19,108)
(1,554)
(847)
(21,509)

Consolidated
statements of
operations
EUR
(6,965)
(404)
129
(7,240)

Effect of
changes

in exchange December 31,
2012
EUR
(25,890)
(1,958)
(763)
(28,611)

rates
EUR
183
-
(45)
138

ASML￿ANNUAL￿REPORT￿2012

F-36

 
 
 
 
 
 
 
Deferred tax assets composition of
of temporary
differences
(in thousands)
Capitalized￿research￿and￿development￿expenditures
Inventories
Deferred￿revenue
Provisions
Installation￿and￿warranty￿reserve
Tax￿effect￿carry-forward￿losses
Fixed￿assets
Restructuring￿and￿impairment
Alternative￿minimum￿tax￿credits1
Bilateral￿advance￿pricing￿agreement2
Share-based￿payments
Other￿temporary￿differences
Total

January 1,
2011
EUR
27,239
71,124
10,890
21,828
8,092
27,756
4,386
6,074
4,658
7,993
1,678
13,719
205,437

Consolidated
statements of
operations
EUR
5,501
(35,813)
11,746
(7,463)
98
(18,695)
1,872
(1,063)
112
(6,583)
(808)
936
(50,160)

Effect of
changes

in exchange December 31,
2011
EUR
34,374
35,820
23,892
14,515
8,772
7,735
6,495
5,146
5,028
1,426
950
15,302
159,455

rates
EUR
1,634
509
1,256
150
582
(1,326)
237
135
258
16
80
647
4,178

1 Alternative￿minimum￿tax￿credits￿relate￿to￿prepaid￿US￿taxes￿which￿are￿credited￿against￿future￿taxable￿profits￿after￿the￿carry-forward￿losses￿used.
2

The￿Bilateral￿advance￿pricing￿agreement￿relates￿to￿intellectual￿property￿which￿is￿capitalized￿from￿a￿tax￿perspective￿resulting￿in￿a￿temporary￿difference.

Deferred tax liabilities

composition of
of temporary
differences
(in thousands)
Fixed￿assets
Borrowing￿costs
Other￿temporary￿differences
Total

January 1,
2011
EUR
(9,661)
(1,231)
(958)
(11,850)

Consolidated
statements of
operations
EUR
(9,175)
(323)
119
(9,379)

Effect of
changes

in exchange December 31,
2011
EUR
(19,108)
(1,554)
(847)
(21,509)

rates
EUR
(272)
-
(8)
(280)

Tax effect carry-forward losses
Deferred￿tax￿assets￿from￿carry-forward￿losses￿result￿predominantly￿from￿net￿operating￿loss￿carry-forwards￿incurred￿in
the￿United￿States￿prior￿to￿2011.

Net￿operating￿losses￿qualified￿as￿tax￿losses￿under￿United￿States￿federal￿tax￿laws￿were￿fully￿utilized￿to￿offset￿taxable
income￿during￿2012.￿Net￿operating￿losses￿qualified￿as￿tax￿losses￿under￿United￿States￿state￿tax￿laws￿incurred￿by￿United
States￿group￿companies￿can￿in￿general￿be￿offset￿against￿future￿profits￿realized￿in￿the￿5￿to￿20￿years￿following￿the￿year
in￿which￿the￿losses￿are￿incurred.￿The￿period￿of￿net￿operating￿loss￿carry￿forward￿for￿United￿States￿state￿tax￿purposes
depends￿on￿the￿state￿in￿which￿the￿tax￿loss￿arose.￿Our￿ability￿to￿use￿United￿States￿state￿tax￿loss￿carry￿forwards￿in
existence￿at￿December￿31,￿2012,￿is￿subject￿to￿varying￿state￿statutes￿(providing￿for￿periods￿of￿between￿5￿and￿20￿years)
and￿valuation￿allowances￿have￿been￿set￿up￿for￿state￿carry￿forward￿losses￿that￿are￿not￿expected￿to￿be￿realized￿before
they￿expire.￿The￿total￿amount￿of￿losses￿carried￿forward￿under￿United￿States￿state￿tax￿laws￿as￿of￿December￿31,￿2012,￿is
EUR￿503.7￿million￿tax￿basis￿or￿EUR￿5.6￿million￿tax￿effect.

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20. Segment disclosure
Segment￿information￿has￿been￿prepared￿in￿accordance￿with￿ASC￿280,￿"Segment￿Reporting".

ASML￿operates￿in￿one￿reportable￿segment￿for￿the￿development,￿production,￿marketing,￿sale￿and￿servicing￿of￿advanced
semiconductor￿equipment￿systems￿exclusively￿consisting￿of￿lithography￿systems.￿In￿accordance￿with￿ASC￿280,￿ASML’s
Chief￿Executive￿Officer￿has￿been￿identified￿as￿the￿chief￿operating￿decision-maker,￿who￿reviews￿operating￿results￿to￿make
decisions￿about￿allocating￿resources￿and￿assessing￿performance￿for￿ASML.

Management￿reporting￿includes￿net￿system￿sales￿figures￿of￿new￿and￿used￿systems.￿Net￿system￿sales￿for￿new￿and￿used
systems￿were￿as￿follows:

Year ended December 31
(in thousands)
￿
New￿systems
Used￿systems
￿
Net system sales

2012
EUR
￿
3,620,260
181,372
￿
3,801,632

2011
EUR
￿
4,780,720
103,193
￿
4,883,913

2010
EUR
￿
3,704,290
190,452
￿
3,894,742

Net￿system￿sales￿decreased￿by￿EUR￿1,082.3￿million,￿or￿22.2￿percent￿to￿EUR￿3,801.6￿million￿in￿2012￿from￿EUR￿4,883.9
million￿in￿2011￿(2010:￿EUR￿3,894.7￿million).￿The￿decrease￿in￿net￿system￿sales￿was￿mainly￿caused￿by￿decreased￿demand
in￿Memory.￿During￿2012,￿the￿majority￿of￿the￿system￿sales￿were￿generated￿from￿Logic.

For￿geographical￿reporting,￿net￿sales￿are￿attributed￿to￿the￿geographic￿location￿in￿which￿the￿customers’￿facilities￿are
located.￿Identifiable￿assets￿are￿attributed￿to￿the￿geographic￿location￿in￿which￿these￿assets￿are￿located.￿Net￿sales￿and
identifiable￿assets￿(total￿assets￿excluding￿goodwill￿and￿other￿intangible￿assets)￿by￿geographic￿region￿were￿as￿follows:

Year ended December 31
(in thousands)

2012 ￿

Japan
Korea
Singapore
Taiwan
Rest￿of￿Asia
Europe
United￿States
Total

￿ ￿
2011 ￿

Japan
Korea
Singapore
Taiwan
Rest￿of￿Asia
Europe
United￿States
Total

￿ ￿
2010 ￿

Japan
Korea
Singapore
Taiwan
Rest￿of￿Asia
Europe
United￿States
Total

Net sales
EUR

292,309
1,276,304
98,554
1,479,768
197,262
256,192
1,131,166
4,731,555

405,595
1,318,777
436,308
1,146,601
450,796
505,129
1,387,829
5,651,035

396,748
1,396,028
215,357
1,380,400
239,914
203,548
675,943
4,507,938

Identifiable
assets
EUR
￿
128,750
85,022
15,696
138,010
999,392
5,412,758
471,739
7,251,367
￿
￿
414,264
56,765
14,179
87,833
817,496
5,207,509
508,359
7,106,405
￿
￿
345,160
31,859
17,189
77,125
1,749,879
3,382,117
422,092
6,025,421

In￿2012,￿sales￿to￿the￿largest￿customer￿accounted￿for￿EUR￿1,236.1￿million￿or￿26.1￿percent￿of￿net￿sales￿(2011:￿EUR￿1,311.7
million￿or￿23.2￿percent￿of￿net￿sales;￿2010:￿EUR￿1,270.8￿million￿or￿28.2￿percent￿of￿net￿sales).￿ASML's￿three￿largest
customers￿(based￿on￿net￿sales)￿accounted￿for￿58.9￿percent￿of￿accounts￿receivable￿and￿finance￿receivables￿at￿December
31,￿2012,￿35.5￿percent￿of￿accounts￿receivable￿and￿finance￿receivables￿at￿December￿31,￿2011,￿and￿36.9￿percent￿of
accounts￿receivable￿and￿finance￿receivables￿at￿December￿31,￿2010.

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Substantially￿all￿of￿ASML’s￿sales￿were￿export￿sales￿in￿2012,￿2011￿and￿2010.

21. Board of Management and Supervisory Board remuneration
The￿remuneration￿of￿the￿members￿of￿the￿Board￿of￿Management￿is￿determined￿by￿the￿Supervisory￿Board￿on￿the￿advice
of￿the￿Remuneration￿Committee.￿The￿2010￿Remuneration￿Policy,￿as￿adopted￿by￿the￿General￿Meeting￿of￿Shareholders￿on
March￿24,￿2010,￿was￿not￿changed￿in￿2012.
The￿2010￿Remuneration￿Policy￿enables￿ASML￿to￿continue￿to￿attract,￿reward￿and￿retain￿qualified￿and￿experienced
industry￿professionals￿in￿an￿international￿labor￿market.￿The￿remuneration￿structure￿and￿levels￿are￿assessed￿against￿a
reference￿market￿by￿benchmarking.￿The￿total￿remuneration￿in￿2012￿consists￿of￿base￿salary,￿short-term￿performance
incentives￿(in￿cash),￿long-term￿performance￿incentives￿(in￿shares)￿and￿other￿benefits.

Total￿direct￿compensation,￿pension￿and￿other￿benefits
The￿remuneration￿of￿the￿members￿of￿the￿Board￿of￿Management￿in￿2012,￿2011￿and￿2010￿was￿as￿follows:

￿
￿

￿
E.￿Meurice
￿
￿
P.T.F.M.
Wennink
￿
M.A.￿van￿den
Brink
￿
F.J.￿van￿Hout
￿
￿
F.J.M.
Schneider-
Maunoury

￿
￿

Year
2012
2011
2010
2012
2011
2010
2012
2011
2010
2012
2011
2010
2012
2011
2010

Fixed

￿

￿

Short-term
(variable)
￿

￿

Long-term
(variable)

Total
Remuneration

￿

￿

￿

￿

Total7

Base
salary

STI
(Cash)1

Option
awards2 

LTI (share
awards)3

EUR
818,000
787,000
757,000
508,000
488,000
469,000
538,000
517,000
497,000
445,000
428,000
412,000
433,000
416,000
400,000

EUR
613,500
586,709
566,236
304,800
291,043
280,650
322,800
308,339
297,405
267,000
255,259
246,541
259,800
248,102
239,360

EUR
-
-
42,648
-
-
26,401
-
-
28,025
-
-
23,209
-
-
-

EUR ￿

2,079,601 4
1,413,218 5
935,617 6
1,289,415 4
875,493 5
579,321 6
1,366,039 4
927,912 5
617,004 6
1,131,676 4
832,201 ￿
471,700 ￿
1,144,137 ￿
676,945 ￿
326,947 ￿

EUR
3,511,101
2,786,927
2,301,501
2,102,215
1,654,536
1,355,372
2,226,839
1,753,251
1,439,434
1,843,676
1,515,460
1,153,450
1,836,937
1,341,047
966,307

Other

￿

￿

Pension8 Compensation
Pension
Premium9
EUR
-
88,050
-
-
94,455
-
-
181,826
-
-
9,735
-
-
4,290
-

EUR
167,427
140,113
136,697
79,190
85,994
84,229
83,990
91,243
90,388
69,110
75,134
65,300
67,190
56,475
55,011

Other benefits
and expense
reimbursement10
EUR
127,116
136,765
132,630
46,275
44,669
43,627
47,540
45,502
44,817
37,313
35,190
34,549
28,889
28,313
34,788

1 Actual￿short-term￿incentives￿("STI")￿(cash)￿chargeable￿to￿us￿in￿the￿financial￿year￿(i.e.￿STI￿relating￿to￿performance￿in￿the￿current￿year￿but￿paid￿out￿in￿the

2

3

4

5

6

7
8

9

next￿financial￿year).
The￿remuneration￿reported￿as￿part￿of￿the￿option￿awards￿is￿based￿on￿costs￿incurred￿under￿U.S.￿GAAP.￿The￿costs￿of￿the￿option￿awards￿are￿based￿on￿the
actual￿vested￿number￿of￿option￿awards￿multiplied￿by￿the￿fair￿value￿of￿the￿option￿awards￿at￿grant￿date￿and￿are￿recorded￿in￿the￿consolidated￿statements
of￿operations￿on￿a￿straight￿line￿basis￿over￿the￿vesting￿period.￿The￿use￿of￿performance￿stock￿options￿in￿the￿short￿term￿incentive￿plan￿was￿withdrawn￿as
of￿2010.￿The￿last￿performance￿option￿awards￿were￿granted￿in￿2009￿and￿became￿unconditional￿in￿2010.
The￿remuneration￿reported￿as￿part￿of￿the￿long-term￿incentives￿("LTI")￿(share￿awards)￿is￿based￿on￿costs￿incurred￿under￿U.S.￿GAAP.￿The￿costs￿of￿share
awards￿are￿charged￿to￿the￿consolidated￿statements￿of￿operations￿over￿the￿3￿year￿vesting￿period￿based￿on￿the￿maximum￿achievable￿number￿of￿share
awards.￿Therefore￿the￿costs￿for￿e.g.￿the￿financial￿year￿2012￿include￿costs￿of￿the￿Board￿of￿Management's￿performance￿share￿plan￿2012,￿2011￿and￿2010.
Furthermore,￿the￿difference￿between￿the￿amount￿based￿on￿the￿maximum￿achievable￿number￿of￿share￿awards￿and￿the￿amount￿based￿on￿the￿actual
number￿of￿share￿awards￿that￿vest,￿is￿released￿to￿the￿consolidated￿statements￿of￿operations￿in￿the￿financial￿year￿in￿which￿the￿share￿awards￿vest.
The￿remuneration￿reported￿as￿part￿of￿the￿LTI￿(share￿awards)￿for￿the￿year￿2012￿includes￿an￿adjustment￿for￿the￿Board￿of￿Management￿performance￿share
plan￿2009￿based￿on￿the￿actual￿number￿of￿share￿awards￿vested￿in￿2012.￿The￿adjustment￿for￿Mr.￿Meurice,￿Mr.￿Wennink,￿Mr.￿van￿den￿Brink￿and￿Mr.￿van
Hout￿amounts￿to￿EUR￿-106,266,￿EUR￿-65,785,￿EUR￿-69,831￿and￿EUR￿-57,838,￿respectively.
The￿remuneration￿reported￿as￿part￿of￿the￿LTI￿(share￿awards)￿for￿the￿year￿2011￿includes￿an￿adjustment￿for￿the￿Board￿of￿Management￿performance￿share
plan￿2008￿based￿on￿the￿actual￿number￿of￿share￿awards￿vested￿in￿2011.￿The￿adjustment￿for￿Mr.￿Meurice,￿Mr.￿Wennink￿and￿Mr.￿van￿den￿Brink￿amounts￿to
EUR￿-148,040,￿EUR￿-91,645￿and￿EUR￿-97,281,￿respectively.
The￿remuneration￿reported￿as￿part￿of￿the￿LTI￿(share￿awards)￿for￿the￿year￿2010￿includes￿an￿adjustment￿for￿the￿Board￿of￿Management￿performance￿share
plan￿2007￿based￿on￿the￿actual￿number￿of￿share￿awards￿vested￿in￿2010.￿The￿adjustment￿for￿Mr.￿Meurice,￿Mr.￿Wennink￿and￿Mr.￿van￿den￿Brink￿amounts￿to
EUR￿-296,287,￿EUR￿-183,612￿and￿EUR￿-191,972,￿respectively.
This￿total￿reflects￿base￿salary,￿STI￿(cash),￿option￿awards￿and￿LTI￿(share￿awards).
The￿pension￿arrangement￿has￿been￿adjusted￿upwards￿to￿match￿common￿market￿practice￿as￿from￿2010.￿Furthermore,￿since￿the￿pension￿arrangement
for￿members￿of￿the￿Board￿of￿Management￿is￿a￿defined￿contribution￿plan,￿we￿do￿not￿have￿additional￿pension￿obligations￿beyond￿the￿annual￿premium
contribution.￿As￿per￿2010,￿the￿employee￿contribution￿to￿the￿pension￿plan￿is￿4.0￿percent￿of￿the￿pension￿base.
In￿2011,￿compensation￿was￿paid￿to￿the￿Board￿of￿Management￿regarding￿the￿risk￿premium￿for￿spouse/orphan￿pensions,￿to￿align￿the￿Board￿of
Management￿pension￿arrangement￿with￿senior￿management.￿This￿concerned￿a￿reimbursement￿for￿risk￿premiums￿that￿were￿erroneously￿paid￿by￿the
participants￿in￿the￿past.

10 Other￿benefits￿and￿expense￿reimbursement￿are￿gross￿amounts￿and￿may￿include￿housing￿costs,￿company￿car￿costs,￿travel￿expenses,￿social￿security

costs,￿health￿and￿disability￿insurance￿costs￿and￿representation￿allowances.

ASML￿ANNUAL￿REPORT￿2012

F-39

 
 
 
Short-term incentive
The￿annual￿performance-related￿cash￿incentive￿will￿have￿an￿on-target￿level￿of￿75.0￿percent￿of￿base￿salary￿for￿the￿Chief
Executive￿Officer￿("CEO")￿and￿60.0￿percent￿for￿the￿other￿members￿of￿the￿Board￿of￿Management.￿The￿payouts￿are￿pro-
rated,￿on￿a￿linear￿basis￿to￿the￿level￿of￿achievement￿of￿six￿performance￿criteria.￿Of￿the￿five￿quantitative￿performance
criteria,￿three￿are￿based￿on￿the￿achievement￿of￿measurable￿financial￿targets,￿one￿on￿Technology￿Leadership￿Index￿(which
also￿included￿qualitative￿elements)￿and￿one￿on￿achievements￿in￿the￿market￿position.￿Additionally,￿the￿qualitative￿target￿is
based￿on￿the￿achievement￿of￿agreed￿key￿objectives.

In￿principle,￿the￿weighting￿of￿each￿of￿the￿five￿quantitative￿criteria￿is￿equal￿(weighted￿80.0￿percent￿in￿total).￿The￿sixth
target￿is￿based￿on￿qualitative￿objectives￿(weighted￿20.0￿percent).￿The￿setting￿and￿measuring￿period￿of￿the￿financial
and￿technology￿based￿targets￿is￿semiannual,￿and￿for￿the￿market￿related￿and￿qualitative￿targets￿it￿is￿annual.￿The￿overall
payout￿is￿annual￿and￿the￿cash￿incentive￿is￿accrued￿during￿the￿performance￿period.

The￿Remuneration￿Committee￿evaluated￿the￿Board￿of￿Managements’￿performance￿on￿above￿six￿criteria.￿Based￿on￿the
2012￿evaluation,￿6￿out￿of￿6￿performance￿criteria￿were￿achieved￿on￿target￿or￿above￿target￿result,￿resulting￿in￿a￿cash
payout￿of￿EUR￿1.8￿million￿representing￿75.0￿percent￿of￿Mr.￿Meurice's￿base￿salary,￿60.0￿percent￿of￿Messrs.￿Wennink's,
Van￿den￿Brink's,￿van￿Hout's￿and￿Schneider-Maunoury's￿base￿salary.

Performance Stock Options
In￿order￿to￿shift￿the￿focus￿from￿the￿short-term￿to￿the￿long-term,￿performance￿stock￿options￿are￿not￿a￿part￿of￿the￿2010
Remuneration￿Policy.￿The￿value￿of￿this￿part￿of￿the￿remuneration￿has￿been￿moved￿into￿the￿long-term￿incentive￿plan￿which
is￿paid￿in￿shares.￿2009￿was￿the￿last￿year￿in￿which￿performance￿stock￿options￿were￿granted￿to￿the￿members￿of￿the￿Board
of￿Management,￿which￿means￿the￿actual￿number￿of￿performance￿stock￿options￿for￿2009￿achievement￿were￿awarded￿for
the￿last￿time￿in￿2010.￿Once￿the￿options￿are￿unconditionally￿awarded￿after￿fulfillment￿of￿the￿performance￿conditions,￿the
options￿will￿be￿retained￿(lock-up￿period)￿by￿the￿Board￿of￿Management￿member￿for￿at￿least￿two￿years￿after￿the￿date￿of
unconditional￿award￿or￿until￿the￿termination￿of￿employment,￿whichever￿period￿is￿shorter.￿The￿fair￿value￿of￿the￿options
granted￿is￿determined￿based￿on￿the￿Black-Scholes￿option￿valuation￿model.￿Details￿of￿vested￿options￿held￿by￿members
of￿the￿Board￿of￿Management￿to￿purchase￿ordinary￿shares￿of￿ASML￿Holding￿N.V.￿are￿set￿out￿below:

Jan. 1,
2012

Exercised
during 2012

23,270
88,371
95,146
42,448
84,895
31,500
52,554
31,500
27,894
55,788
46,201
-

23,270
88,371
95,146
42,448
84,895
-
52,554
-
27,894
55,788
46,201
-

Share price on
exercise date
(EUR)
35.12
36.70
43.89
36.67
34.93
-
33.60
-
34.38
33.60
33.60
-

Vested during
2012

Expired during
2012

Dec. 31,
2012

-
-
-
-
-
-
-
-
-
-
-
-

-
-
-
-
-
31,500
-
31,500
-
-
-
-

-
-
-
-
-
-
-
-
-
-
-
-

Exercise
price
(EUR)
11.53
17.90
20.39
17.20
12.39
58.00
12.39
58.00
17.20
12.39
12.39
-

Expiration
date

1/19/2015
1/18/2016
1/17/2017
2/4/2018
2/2/2019
1/20/2012
2/2/2019
1/20/2012
2/4/2018
2/2/2019
2/2/2019
-

E.￿Meurice
￿
￿
￿
￿
P.T.F.M.￿Wennink
￿
M.A.￿van￿den￿Brink
￿
￿
F.J.￿van￿Hout
F.J.M.￿Schneider-
Maunoury

Long-term incentive
The￿members￿of￿the￿Board￿of￿Management￿are￿eligible￿to￿receive￿performance￿shares,￿which￿will￿be￿awarded￿annually
under￿the￿condition￿of￿fulfillment￿of￿predetermined￿performance￿targets.￿These￿targets￿are￿measured￿over￿a￿period￿of
three￿calendar￿years.￿The￿performance￿measures￿for￿obtaining￿performance￿targets￿will￿be￿ASML’s￿relative￿Return￿On
Average￿Invested￿Capital￿("ROAIC")￿position￿compared￿with￿the￿peer￿group￿(weighted￿80.0￿percent)￿and￿a￿qualitative
target￿related￿to￿ASML’s￿long-term￿ability￿to￿keep￿performing￿at￿high￿standards￿(weighted￿20.0￿percent).

The￿maximum￿number￿of￿performance￿shares￿to￿be￿conditionally￿awarded￿will￿equal￿146.25￿percent￿of￿base￿salary
divided￿by￿the￿value￿of￿one￿performance￿share￿(i.e.￿reflecting￿maximum￿achievement).￿ASML￿defines￿stretching￿targets,
whereas￿for￿on￿target￿achievement,￿the￿value￿of￿performance￿shares￿will￿be￿80.0￿percent￿of￿base￿salary.

For￿the￿determination￿of￿the￿number￿of￿performance￿shares￿that￿will￿be￿conditionally￿awarded,￿ASML￿applies￿a￿fixed
number￿approach.￿Under￿this￿approach,￿the￿number￿of￿shares￿is￿fixed￿for￿two￿consecutive￿years.￿Every￿two￿years,￿the
fixed￿number￿is￿calculated￿using￿the￿maximum￿achievable￿value￿of￿146.25￿percent￿of￿base￿salary￿divided￿by￿the￿value
of￿the￿performance￿share￿at￿the￿moment￿of￿grant￿in￿the￿respective￿year.￿In￿2012,￿the￿fixed￿number￿calculation￿has￿been
conducted.

ASML￿ANNUAL￿REPORT￿2012

F-40

 
 
 
 
 
 
 
 
Once￿the￿shares￿are￿unconditionally￿awarded￿after￿fulfillment￿of￿the￿performance￿conditions,￿the￿shares￿will￿be￿retained
(for￿a￿lock-up￿period)￿by￿the￿Board￿of￿Management￿member￿for￿at￿least￿two￿years￿after￿the￿date￿of￿unconditional￿award
or￿until￿the￿termination￿of￿employment,￿whichever￿period￿is￿shorter.￿ASML￿accounts￿for￿this￿share￿award￿performance
plan￿as￿a￿variable￿plan.

Details￿of￿performance￿shares￿granted￿to￿members￿of￿the￿Board￿of￿Management￿are￿as￿follows:

Board of management Grant date

Status

Full control

Number of
shares at
grant date

Fair value at
grant date

Vesting date

Number
of shares
at vesting
date

End of lock-
up date

E.￿Meurice
￿
￿
￿
￿
￿
P.T.F.M.￿Wennink
￿
￿
￿
￿
￿
M.A.￿van￿den￿Brink
￿
￿
￿
￿
￿
F.J.￿van￿Hout
￿
￿
￿
F.J.M.￿Schneider-
Maunoury
￿

Conditional
4/18/2012
Conditional
4/13/2011
2/1/2010
Conditional
2/2/2009 Unconditional
2/4/2008 Unconditional
1/17/2007 Unconditional
Conditional
4/18/2012
Conditional
4/13/2011
2/1/2010
Conditional
2/2/2009 Unconditional
2/4/2008 Unconditional
1/17/2007 Unconditional
Conditional
4/18/2012
Conditional
4/13/2011
2/1/2010
Conditional
2/2/2009 Unconditional
2/4/2008 Unconditional
1/17/2007 Unconditional
Conditional
4/18/2012
Conditional
4/13/2011
2/1/2010
Conditional
2/2/2009 Unconditional
Conditional
Conditional
Conditional

4/18/2012
4/13/2011
2/1/2010

No
No
No
No
No
Yes
No
No
No
No
No
Yes
No
No
No
No
No
Yes
No
No
No
No
No
No
No

73,570
88,732
88,732
57,002
57,002
66,338
45,689
54,974
54,974
35,287
35,287
41,111
48,387
58,256
58,256
37,458
37,458
42,980
40,023
48,293
48,293
31,021
38,944
46,886
46,886

EUR
37.33
28.29
22.93
13.05
18.18
20.39
37.33
28.29
22.93
13.05
18.18
20.39
37.33
28.29
22.93
13.05
18.18
20.39
37.33
28.29
22.93
13.05
37.33
28.29
22.93

4/18/2015
4/13/2014
2/1/2013
2/2/2012
2/4/2011
1/17/2010
4/18/2015
4/13/2014
2/1/2013
2/2/2012
2/4/2011
1/17/2010
4/18/2015
4/13/2014
2/1/2013
2/2/2012
2/4/2011
1/17/2010
4/18/2015
4/13/2014
2/1/2013
2/2/2012
4/18/2015
4/13/2014
2/1/2013

-
-
-

-
-
-

￿
￿
￿
48,859 1
48,859 1
51,807 ￿
￿
￿
￿
30,246 1
30,246 1
32,106 ￿
￿
￿
￿
32,107 1
32,107 1
33,565 ￿
￿
￿
￿
26,589 1
￿
￿
￿

-
-
-

-
-
-

-
-
-

4/18/2017
4/13/2016
2/1/2015
2/2/2014
2/4/2013
1/17/2012
4/18/2017
4/13/2016
2/1/2015
2/2/2014
2/4/2013
1/17/2012
4/18/2017
4/13/2016
2/1/2015
2/2/2014
2/4/2013
1/17/2012
4/18/2017
4/13/2016
2/1/2015
2/2/2014
4/18/2017
4/13/2016
2/1/2015

1

The￿number￿of￿shares￿included￿in￿the￿lock-up￿period￿is￿reduced￿as￿a￿result￿of￿the￿synthetic￿share￿buyback￿due￿to￿an￿exchange￿for￿each￿100￿ordinary
shares￿for￿77￿ordinary￿shares.￿The￿number￿of￿shares￿vested￿in￿2012￿after￿the￿synthetic￿share￿buyback￿for￿Mr.￿Meurice,￿Mr.￿Wennink,￿Mr.￿van￿den￿Brink
and￿for￿Mr.￿van￿Hout￿are￿37,621￿shares,￿23,289￿shares,￿24,722￿shares￿and￿20,474￿shares,￿respectively.￿The￿number￿of￿shares￿vested￿in￿2011￿after￿the
synthetic￿share￿buyback￿for￿Mr.￿Meurice,￿Mr.￿Wennink￿and￿for￿Mr.￿van￿den￿Brink￿are￿37,621￿shares,￿23,289￿shares￿and￿24,722￿share,￿respectively.

Pension Benefits
Members￿of￿the￿Board￿of￿Management￿are￿offered￿a￿pension￿plan￿based￿on￿defined￿contribution.￿The￿total￿defined
contribution￿is￿a￿percentage￿of￿the￿pensionable￿salary￿and￿is￿dependent￿on￿the￿participant's￿age￿at￿the￿beginning￿of
the￿year.￿In￿2011,￿compensation￿was￿paid￿to￿the￿Board￿of￿Management￿regarding￿the￿spouse/orphan￿risk￿premium￿to
align￿the￿Board￿of￿Management￿pension￿arrangement￿with￿senior￿management.￿￿This￿concerned￿a￿reimbursement￿for￿risk
premiums￿that￿were￿erroneously￿paid￿by￿the￿participants￿in￿the￿past.

Benefits upon termination of employment
Term￿of￿appointment/employment
Members￿of￿the￿Board￿of￿Management￿appointed￿after￿the￿2004￿amendment￿of￿the￿Articles￿of￿Association,￿are
appointed￿for￿a￿period￿of￿four￿years,￿after￿which￿reappointment￿is￿possible￿for￿consecutive￿four-year￿terms.￿Messrs.￿P.
Wennink￿and￿M.￿van￿den￿Brink’s￿appointment￿to￿the￿Board￿of￿Management￿is￿for￿an￿indefinite￿period￿of￿time,￿as￿their
initial￿appointment￿was￿before￿2004.￿The￿existing￿employment￿contracts,￿including￿all￿rights￿and￿obligations￿under￿these
contracts,￿will￿be￿honored.

Severance￿agreement
Employment￿agreements￿with￿the￿Board￿of￿Management￿members￿concluded￿prior￿to￿March￿31,￿2004￿(i.e.￿Messrs.
Wennink￿and￿Van￿den￿Brink)￿do￿not￿contain￿specific￿provisions￿regarding￿benefits￿upon￿termination￿of￿those
agreements.￿Potential￿severance￿payments￿in￿such￿case￿will￿be￿according￿to￿applicable￿law￿(e.g.￿cantonal￿formula￿in￿the
Netherlands).

ASML￿ANNUAL￿REPORT￿2012

F-41

 
 
 
 
 
 
 
 
 
 
Employment￿agreements￿for￿members￿of￿the￿Board￿of￿Management￿appointed￿after￿March￿31,￿2004￿(i.e.￿Messrs.
Meurice,￿Van￿Hout￿and￿Schneider-Maunoury)￿do￿contain￿specific￿provisions￿regarding￿benefits￿upon￿termination￿of￿those
agreements.

If￿we￿give￿notice￿of￿termination￿of￿the￿employment￿agreement￿for￿reasons￿which￿are￿exclusively￿or￿mainly￿found￿in￿acts
or￿omissions￿on￿the￿side￿of￿the￿Board￿of￿Management￿member,￿no￿severance￿amount￿will￿be￿granted.￿If￿this￿is￿not￿the
case,￿a￿severance￿amount￿equal￿to￿one￿year￿base￿salary￿or￿a￿severance￿consistent￿with￿the￿Dutch￿Labor￿laws￿will￿be
made￿available￿upon￿the￿effective￿date￿of￿termination.

This￿severance￿payment￿will￿also￿be￿made￿available￿in￿case￿the￿Board￿of￿Management￿member￿gives￿notice￿of
termination￿of￿the￿employment￿agreement￿due￿to￿a￿significant￿difference￿of￿opinion￿between￿the￿respective￿executives
and￿the￿Supervisory￿Board￿regarding￿his￿employment￿agreement,￿his￿function￿or￿our￿strategy.

Change￿of￿control
Board￿of￿Management￿members￿with￿an￿employment￿agreement￿dated￿after￿March￿31,￿2004￿(i.e.￿Messrs.￿Meurice,￿Van
Hout￿and￿Schneider-Maunoury)￿shall￿also￿be￿entitled￿to￿the￿aforementioned￿severance￿amount￿in￿the￿event￿ASML￿or￿its
legal￿successor￿gives￿notice￿of￿termination￿due￿to￿a￿Change￿of￿Control￿(as￿defined￿in￿the￿employment￿agreement)￿or￿if
the￿Board￿of￿Management￿member￿gives￿notice￿of￿termination,￿which￿is￿directly￿related￿to￿such￿Change￿of￿Control￿and
such￿notice￿is￿given￿within￿twelve￿months￿from￿the￿date￿on￿which￿the￿Change￿of￿Control￿occurs.

In￿order￿to￿comply￿with￿the￿highest￿standards￿of￿corporate￿governance,￿the￿Supervisory￿Board￿decided￿to￿mitigate￿the
potential￿benefit￿of￿a￿Change￿of￿Control￿under￿the￿long-term￿incentive￿arrangements.￿This￿arrangement￿entails￿that￿the
share￿price￿will￿be￿fixed￿on￿the￿average￿of￿i)￿the￿average￿closing￿share￿price￿over￿a￿period￿of￿15￿trading￿days￿prior￿to
first￿public￿announcement￿of￿Change￿of￿Control￿negotiations,￿and￿ii)￿the￿average￿closing￿share￿price￿over￿a￿period￿of￿30
trading￿days￿prior￿to￿closing￿of￿the￿transaction.￿￿

ASML￿ANNUAL￿REPORT￿2012

F-42

Supervisory Board
The￿annual￿remuneration￿for￿Supervisory￿Board￿members￿covers￿the￿period￿from￿one￿Annual￿General￿Meeting￿of
Shareholders￿("AGM")￿to￿the￿next￿one.￿The￿annual￿remuneration￿is￿paid￿in￿quarterly￿installments￿starting￿after￿the
AGM.￿In￿2011￿the￿Supervisory￿Board￿proposed￿and￿the￿General￿Meeting￿of￿Shareholders￿approved￿an￿adjustment
of￿the￿remuneration￿of￿the￿Supervisory￿Board,￿effective￿as￿per￿April￿1,￿2011.￿Furthermore￿the￿General￿Meeting￿of
Shareholders￿approved￿a￿further￿increase￿of￿the￿annual￿(fixed)￿fee￿with￿a￿maximum￿amount￿of￿EUR￿5,000￿depending￿on
circumstances,￿which￿the￿Supervisory￿Board￿implemented￿per￿April￿1,￿2012.

The￿following￿table￿sets￿forth￿an￿overview￿of￿the￿remuneration￿awarded￿to￿Supervisory￿Board￿Members￿in￿2012￿and
2011:

Year ended December 31, 2012
Arthur￿P.M.￿van￿der￿Poel
Jos￿W.B.￿Westerburgen
OB￿Bilous
Fritz￿W.￿Fröhlich
Hendrika￿(Ieke)￿C.J.￿van￿den
Burg
William￿T.￿Siegle
Pauline￿F.M.￿van￿der￿Meer￿Mohr
Wolfgang￿H.￿Ziebart
Total
￿
￿
￿
Year ended December 31, 2011

Total
94,750
96,116
104,750
68,750
56,750

Supervisory
board
68,750
48,750
78,750
48,750
48,750

Audit
committee
10,000
-
-
15,000
-

Remuneration

-

committee  
￿
12,000 ￿
-
￿
￿
-
8,000 ￿

90,750
56,750
72,750
641,366
￿
￿
￿

78,750
48,750
48,750
470,000
￿
￿
￿
Total Supervisory
board

-
-
10,000
35,000
￿
￿
￿
Audit
committee

￿
-
8,000 ￿
6,000 4
34,000 ￿
￿
￿
￿
￿

￿
￿
￿
Remuneration
committee

Arthur￿P.M.￿van￿der￿Poel
Jos￿W.B.￿Westerburgen
OB￿Bilous
Fritz￿W.￿Fröhlich
Hendrika￿(Ieke)￿C.J.￿van￿den
Burg
William￿T.￿Siegle
Pauline￿F.M.￿van￿der￿Meer￿Mohr
Wolfgang￿H.￿Ziebart
Total

88,250
66,750
99,500
62,500
51,625

85,250
51,625
61,625
567,125

62,500
43,750
73,750
43,750
43,750

73,750
43,750
43,750
428,750

10,000
-
-
15,000
-

-
-
10,000
35,000

-

￿
11,500 ￿
￿
-
￿
-
7,875 ￿

￿
-
7,875 ￿
￿
-
27,250 ￿

Selection and
nomination
committee
8,000
12,000
8,000
-
-

-
-
-
28,000
￿
￿
￿
Selection and
nomination
committee
7,875
11,500
7,875
-
-

-
-
-
27,250

Technology
and strategy
committee
8,000
-
8,000
-
-

12,000
-
8,000
36,000
￿
￿
￿
Technology
and strategy
committee
7,875
-
7,875
-
-

11,500
-
7,875
35,125

Other1,2
-

￿
23,366 3
10,000 ￿
5,000 ￿
￿
-

-
-
-

￿
￿
￿
38,366 ￿
￿
￿
￿
￿

￿
￿
￿
Other1,2

-
-

￿
￿
10,000 ￿
3,750 ￿
￿
-

-
-
-

￿
￿
￿
13,750 ￿

1

2

3

To￿compensate￿for￿certain￿obligations￿ASML￿has￿towards￿the￿U.S.￿government￿as￿a￿result￿of￿the￿acquisition￿of￿Silicon￿Valley￿Group￿in￿2001,￿one￿U.S.
member￿receives￿an￿additional￿EUR￿10,000￿to￿fulfill￿these￿obligations.
In￿addition￿to￿the￿annual￿fixed￿fee,￿the￿Vice-Chairman￿of￿the￿Supervisory￿Board￿receives￿EUR￿5,000￿per￿year￿to￿fulfill￿this￿role.￿As￿the￿adjustment￿of￿the
Supervisory￿Board's￿remuneration￿became￿effective￿as￿per￿April￿1,￿2011,￿the￿Vice-Chairman￿fee￿paid￿over￿the￿financial￿year￿2011￿amounted￿to￿EUR
3,750.
In￿2012￿Jos￿Westerburgen￿received￿a￿provisional￿payment￿related￿to￿the￿supervisory￿board￿remuneration￿for￿the￿period￿January￿to￿April￿2013.￿As
legislation￿regarding￿VAT￿registration￿for￿Supervisory￿Board￿members￿will￿change￿as￿from￿2013￿and￿Jos￿Westerburgen￿will￿resign￿in￿2013￿it￿was
discussed￿and￿agreed￿with￿the￿Dutch￿tax￿authorities￿to￿pay￿the￿remuneration￿fee￿in￿advance.

4 During￿2012￿Wolfgang￿H.￿Ziebart￿was￿appointed￿as￿member￿of￿the￿Remuneration￿Committee￿and￿therefore￿received￿a￿partial￿fee.

In￿addition,￿a￿net￿cost￿allowance￿was￿paid￿to￿each￿Supervisory￿Board￿member￿in￿2012,￿amounting￿to￿EUR￿1,800￿per
year,￿and￿EUR￿2,400￿per￿year￿for￿the￿Chairman￿of￿the￿Supervisory￿Board.

Members￿of￿the￿Board￿of￿Management￿and/or￿Supervisory￿Board￿are￿free￿to￿acquire￿or￿dispose￿ASML￿shares￿or￿options
for￿their￿own￿account,￿provided￿they￿comply￿with￿the￿applicable￿ASML￿Insider￿Trading￿Rules.￿Those￿securities￿are￿not
part￿of￿members’￿remuneration￿and￿are￿therefore￿not￿included.￿None￿of￿the￿members￿of￿the￿Supervisory￿Board￿currently
owns￿shares￿or￿options￿on￿ASML￿shares.

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F-43

 
22. Selected operating expenses and additional information
Personnel￿expenses￿for￿all￿payroll￿employees￿were:

Year ended December 31
(in thousands)
Wages￿and￿salaries
Social￿security￿expenses
Pension￿and￿retirement￿expenses
Share-based￿payments
Personnel expenses

2012
EUR
711,039
58,180
50,298
18,714
838,231

2011
EUR
648,869
52,550
45,947
12,430
759,796

2010
EUR
551,683
42,468
40,593
12,109
646,853

The￿average￿number￿of￿payroll￿employees￿in￿FTEs￿employed￿during￿2012,￿2011￿and￿2010￿was￿8,140,￿7,627￿and￿6,785
respectively.￿The￿total￿number￿of￿payroll￿and￿temporary￿personnel￿employed￿in￿FTEs￿per￿sector￿was:

As of December 31
Customer￿Support
SG&A
Industrial￿Engineering
Manufacturing￿&￿Logistics
R&D
Total employees (in FTEs)
Less:￿Temporary￿employees￿(in￿FTEs)
Payroll employees (in FTEs)

2012
2,538
869
637
2,856
3,736
10,636
2,139
8,497

2011
2,478
723
420
2,852
3,417
9,890
1,935
7,955

2010
2,236
727
398
2,659
3,225
9,245
2,061
7,184

The￿average￿number￿of￿payroll￿employees￿in￿FTEs￿in￿our￿operations￿in￿the￿Netherlands￿during￿2012,￿2011￿and￿2010￿was
4,620,￿4,313￿and￿3,805￿respectively.

23. Research and development costs
R&D￿costs￿include￿credits￿for￿an￿amount￿of￿EUR￿17.9￿million,￿EUR￿25.1￿million,￿EUR￿29.5￿million￿during￿2012,￿2011
and￿2010￿respectively.￿R&D￿credits￿relate￿to￿world-wide￿(inter-)governmental￿funding￿for￿certain￿strategic￿development
programs.

24. Interest income and expense
Interest￿income￿of￿EUR￿16.6￿million￿(2011:￿EUR￿41.2￿million￿and￿2010:￿EUR￿15.1￿million)￿mainly￿relates￿to￿interest
income￿on￿deposits,￿short-term￿investments,￿money￿market￿funds￿and￿on￿bank￿accounts.￿Interest￿expense￿of￿EUR￿22.8
million￿(2011:￿EUR￿33.8￿million￿and￿2010:￿EUR￿23.3￿million)￿mainly￿consists￿of￿net￿interest￿expense￿of￿our￿Eurobond￿and
related￿interest￿rate￿swaps.

Interest￿on￿cash￿pools￿is￿reported￿on￿a￿gross￿basis￿in￿the￿consolidated￿statements￿of￿operations￿under￿both
interest￿income￿and￿interest￿expense.￿From￿an￿economic￿and￿legal￿perspective￿the￿interest￿on￿cash￿pools￿of
EUR￿4.2￿million￿(2011:￿EUR￿6.8￿million￿and￿2010:￿EUR￿3.6￿million)￿recorded￿in￿interest￿income￿nets￿off￿against￿the￿same
amount￿recorded￿in￿interest￿expense.

25. Vulnerability due to certain concentrations
ASML￿relies￿on￿outside￿vendors￿to￿manufacture￿the￿components￿and￿subassemblies￿used￿in￿its￿systems,￿each￿of
which￿is￿obtained￿from￿a￿sole￿supplier￿or￿a￿limited￿number￿of￿suppliers.￿ASML’s￿reliance￿on￿a￿limited￿group￿of￿suppliers
involves￿several￿risks,￿including￿a￿potential￿inability￿to￿obtain￿an￿adequate￿supply￿of￿required￿components￿and￿reduced
control￿over￿pricing￿and￿timely￿delivery￿of￿these￿subassemblies￿and￿components.￿In￿particular,￿from￿time￿to￿time,￿the
number￿of￿systems￿ASML￿has￿been￿able￿to￿produce￿has￿been￿limited￿by￿the￿production￿capacity￿of￿Zeiss.￿Zeiss￿is
currently￿ASML’s￿sole￿external￿supplier￿of￿lenses￿and￿other￿critical￿optical￿components￿and￿is￿capable￿of￿producing
these￿lenses￿only￿in￿limited￿numbers￿and￿only￿through￿the￿use￿of￿its￿manufacturing￿and￿testing￿facility￿in￿Oberkochen
and￿Wetzlar,￿Germany.￿During￿2012,￿ASML’s￿production￿was￿not￿limited￿by￿the￿deliveries￿from￿Zeiss.

For￿our￿light￿source￿technology￿used￿in￿our￿EUV￿systems￿we￿also￿depend￿on￿a￿limited￿number￿of￿suppliers.￿Our￿main
supplier￿for￿light￿source￿technology￿is￿Cymer.￿We￿have￿agreed￿to￿acquire￿Cymer,￿subject￿to￿certain￿closing￿conditions.
We￿believe￿that￿the￿acquisition￿of￿Cymer,￿if￿completed,￿will￿help￿us￿achieving￿our￿strategic￿objective￿of￿delivering￿an
economically￿viable￿EUV￿scanner￿to￿semiconductor￿manufacturers￿as￿soon￿as￿reasonably￿possible.￿We￿believe￿that
combining￿Cymer's￿expertise￿in￿EUV￿light￿sources￿with￿our￿expertise￿in￿lithography￿systems￿design￿and￿integration￿will
reduce￿the￿risks￿related￿to￿the￿successful￿development￿of￿and￿accelerate￿the￿introduction￿of￿EUV￿technology.￿Without

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F-44

the￿acquisition,￿we￿do￿not￿believe￿that￿Cymer￿would￿have￿sufficient￿resources￿to￿complete￿the￿development￿of￿the
EUV￿source￿and￿as￿a￿result,￿the￿only￿way￿to￿make￿the￿EUV￿source￿development￿successful￿without￿additional￿delay￿is
through￿the￿acquisition￿of￿Cymer.￿In￿addition￿we￿believe￿that￿the￿acquisition￿will￿allow￿us￿to￿more￿effectively￿partition
responsibilities￿between￿Cymer,￿its￿suppliers￿and￿us￿with￿respect￿to￿EUV￿light￿source￿development,￿reducing￿risk￿and
increasing￿development￿speed.

Completion￿of￿the￿acquisition￿is￿subject￿to￿customary￿closing￿conditions,￿including￿expiration￿or￿termination￿of￿the
applicable￿waiting￿period￿under￿the￿Hart-Scott-Rodino￿Act￿and￿receipt￿of￿approvals￿under￿other￿foreign￿competition
laws.￿On￿february￿5,￿2013,￿the￿Cymer￿Stockholders￿approved￿the￿merger￿agreement.￿We￿expect￿the￿transaction￿to￿close
in￿the￿first￿half￿of￿2013,￿there￿is￿no￿assurance￿that￿the￿transaction￿will￿be￿completed￿within￿the￿expected￿time￿period￿or
at￿all.

Business￿failure￿or￿insolvency￿of￿one￿of￿our￿main￿customers￿may￿have￿an￿adverse￿effect￿on￿our￿business,￿financial
condition￿and￿results￿of￿operations.￿See￿Note￿20.

26. Shareholders' equity
Share capital
ASML's￿authorized￿share￿capital￿amounts￿to￿EUR￿126,000,000￿and￿is￿divided￿into:

• 700,000,000￿cumulative￿preference￿shares￿with￿a￿nominal￿value￿of￿EUR￿0.09￿each;
• 699,999,000￿ordinary￿shares￿with￿a￿nominal￿value￿of￿EUR￿0.09￿each;￿and
• 9,000￿ordinary￿shares￿B￿with￿a￿nominal￿value￿of￿EUR￿0.01￿each.

Per￿December￿31,￿2012,￿419,852,467￿ordinary￿shares￿with￿a￿nominal￿value￿of￿EUR￿0.09￿each￿were￿issued￿and￿fully￿paid
in,￿of￿which￿12,687,246￿ordinary￿shares￿are￿held￿by￿us￿in￿treasury.￿No￿ordinary￿shares￿B￿and￿no￿cumulative￿preference
shares￿are￿issued.￿96,566,077￿depositary￿receipts￿for￿ordinary￿shares￿are￿issued￿with￿our￿cooperation.

Our￿Board￿of￿Management￿has￿the￿power￿to￿issue￿ordinary￿shares￿and￿cumulative￿preference￿shares￿insofar￿as￿the
Board￿of￿Management￿has￿been￿authorized￿to￿do￿so￿by￿the￿General￿Meeting￿of￿Shareholders￿(either￿by￿means￿of￿a
resolution￿or￿by￿an￿amendment￿to￿our￿Articles￿of￿Association).￿The￿Board￿of￿Management￿requires￿approval￿of￿the
Supervisory￿Board￿for￿such￿an￿issue.￿The￿authorization￿by￿the￿General￿Meeting￿can￿only￿be￿granted￿for￿a￿certain
period￿not￿exceeding￿five￿years￿and￿may￿be￿extended￿for￿no￿longer￿than￿five￿years￿on￿each￿occasion.￿In￿case￿the
General￿Meeting￿of￿Shareholders￿has￿not￿authorized￿the￿Board￿of￿Management￿to￿issue￿shares,￿the￿General￿Meeting￿of
Shareholders￿shall￿have￿the￿power￿to￿issue￿shares￿upon￿the￿proposal￿of￿the￿Board￿of￿Management,￿provided￿that￿the
Supervisory￿Board￿has￿approved￿such￿proposal.

Shares issued in Customer Co-Investment Program

On￿September￿12,￿2012,￿we￿issued￿62,977,877￿ordinary￿shares￿to￿Stichting￿Administratiekantoor￿MAKTSJAB￿("Intel
Stichting")￿and￿12,595,575￿ordinary￿shares￿to￿Stichting￿Administratiekantoor￿Samsung￿and￿on￿October￿31,￿2012,￿ASML
issued￿20,992,625￿ordinary￿shares￿to￿Stichting￿Administratiekantoor￿TSMC￿with￿respect￿to￿the￿Customer￿Co-Investment
Program.￿We￿received￿an￿amount￿of￿EUR￿3,853.9￿million￿in￿relation￿to￿the￿shares￿issued￿under￿the￿Customer￿Co-
Investment￿Program.￿For￿further￿details￿on￿our￿Customer￿Co-Investment￿Program￿see￿Note￿28.

Synthetic Share Buyback

At￿the￿Extraordinary￿General￿Meeting￿of￿Shareholders￿("EGM")￿held￿on￿September￿7,￿2012,￿several￿changes￿in
the￿Articles￿of￿Association￿of￿ASML￿were￿adopted,￿in￿connection￿with￿the￿Synthetic￿Share￿Buyback￿effectuated￿in
connection￿with￿the￿Customer￿Co-Investment￿Program.￿Consequently,￿on￿November￿24,￿2012￿the￿Articles￿of￿Association
were￿amended￿as￿follows.￿Upon￿the￿first￿amendment￿the￿ordinary￿shares￿to￿be￿held￿for￿the￿benefit￿of￿the￿participants
to￿the￿Customer￿Co-Investment￿Program￿were￿converted￿into￿ordinary￿shares￿M￿and￿all￿other￿ordinary￿shares￿were
converted￿into￿ordinary￿shares￿A.￿Upon￿the￿second￿amendment￿the￿par￿value￿per￿ordinary￿share￿A￿was￿increased￿from
EUR￿0.09￿to￿EUR￿9.24￿at￿the￿expense￿of￿the￿share￿premium￿reserve.￿Upon￿the￿third￿amendment,￿the￿nominal￿value￿per
ordinary￿share￿A￿was￿reduced￿to￿an￿amount￿of￿EUR￿0.06,￿by￿decreasing￿the￿nominal￿value￿per￿ordinary￿share￿A￿by￿an
amount￿of￿EUR￿9.18,￿which￿resulted￿in￿a￿repayment￿of￿the￿same￿amount￿per￿share￿to￿holders￿of￿ordinary￿shares￿into
which￿the￿ordinary￿shares￿A￿were￿converted.￿The￿fourth￿amendment￿provided￿for￿the￿consolidation￿of￿the￿ordinary￿shares
A￿through￿the￿exchange￿of￿each￿100￿ordinary￿shares￿for￿77￿ordinary￿shares,￿resulting￿in￿an￿increase￿of￿the￿nominal￿value
per￿ordinary￿share￿from￿EUR￿0.06￿to￿EUR￿0.09,￿whereby￿the￿aggregate￿difference￿is￿booked￿at￿the￿expense￿of￿the￿share
premium￿reserve.￿The￿fifth￿and￿last￿amendment￿provided￿for￿the￿deletion￿of￿the￿share￿class￿M￿for￿participants￿to￿the

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Customer￿Co-Investment￿Program￿and￿the￿share￿class￿A￿for￿the￿other￿shareholders.￿The￿ordinary￿shares￿M￿and￿A￿were
converted￿thereafter￿into￿ordinary￿shares￿without￿a￿specific￿letter￿mark￿attached￿to￿it.

These￿amendments￿in￿substance￿constitute￿a￿Synthetic￿Share￿Buyback￿in￿which￿we￿effectively￿repurchased￿93,411,216
shares￿at￿an￿average￿price￿of￿EUR￿39.91￿for￿a￿total￿amount￿of￿EUR￿3,728.3￿million.￿The￿difference￿of￿EUR￿125.6￿million
between￿the￿capital￿repayment￿of￿EUR￿3,728.3￿million￿and￿the￿net￿proceeds￿from￿issuance￿of￿shares￿of￿EUR￿3,853.9
million￿relates￿to￿the￿capital￿repayment￿on￿ASML's￿treasury￿shares￿which￿was￿also￿part￿of￿the￿Synthetic￿Share￿Buyback.

Ordinary shares
Each￿ordinary￿share￿consists￿of￿900￿fractional￿shares.￿Fractional￿shares￿entitle￿the￿holder￿thereof￿to￿a￿fractional￿dividend
but￿do￿not￿entitle￿the￿holder￿thereof￿to￿voting￿rights.￿Only￿those￿persons￿who￿hold￿shares￿directly￿in￿the￿share￿register
in￿the￿Netherlands,￿held￿by￿us￿at￿our￿address￿at￿5504￿DR￿Veldhoven,￿de￿Run￿6501,￿the￿Netherlands,￿or￿in￿the￿New￿York
share￿register,￿held￿by￿JP￿Morgan￿Chase￿Bank,￿N.A.,￿P.O.￿Box￿64506,￿St.￿Paul,￿MN￿55164-0506,￿United￿States,￿can
hold￿fractional￿shares.￿Persons￿who￿hold￿ordinary￿shares￿through￿the￿deposit￿system￿under￿the￿Dutch￿Securities￿Bank
Giro￿Transactions￿Act￿(Wet giraal effectenverkeer;￿the￿"Giro￿Act")￿maintained￿by￿the￿Dutch￿central￿securities￿depository
(Nederlands Centraal Insituut voor Giraal Effectenverkeer B.V.,￿"Euroclear￿Nederland")￿or￿through￿the￿Depositary￿Trust
Company￿("DTC")￿cannot￿hold￿fractional￿shares.￿An￿ordinary￿share￿entitles￿the￿holder￿thereof￿to￿cast￿nine￿votes￿in￿the
General￿Meeting￿of￿Shareholders.￿At￿our￿EGM￿held￿on￿September￿7,￿2012,￿the￿Board￿of￿Management￿was￿authorized
from￿September￿7,￿2012￿through￿October￿25,￿2013,￿subject￿to￿the￿approval￿of￿the￿Supervisory￿Board,￿to￿issue￿shares
and/or￿rights￿thereto￿representing￿up￿to￿a￿maximum￿of￿5.0￿percent￿of￿our￿issued￿share￿capital￿at￿April￿25,￿2012,￿plus
an￿additional￿5.0￿percent￿of￿our￿issued￿share￿capital￿at￿April￿25,￿2012￿that￿may￿be￿issued￿in￿connection￿with￿mergers,
acquisitions￿and/or￿(strategic)￿alliances.

Holders￿of￿ASML’s￿ordinary￿shares￿have￿a￿preemptive￿right￿of￿subscription,￿in￿proportion￿to￿the￿aggregate￿nominal
amount￿of￿the￿ordinary￿shares￿held￿by￿them,￿to￿any￿issuance￿of￿ordinary￿shares￿for￿cash,￿which￿right￿may￿be￿restricted
or￿excluded.￿Ordinary￿shareholders￿have￿no￿pro￿rata￿preemptive￿right￿of￿subscription￿to￿any￿ordinary￿shares￿issued￿for
consideration￿other￿than￿cash￿or￿ordinary￿shares￿issued￿to￿employees.￿If￿authorized￿for￿this￿purpose￿by￿the￿General
Meeting￿of￿Shareholders￿(either￿by￿means￿of￿a￿resolution￿or￿by￿an￿amendment￿to￿our￿Articles￿of￿Association),￿the￿Board
of￿Management￿has￿the￿power￿subject￿to￿approval￿of￿the￿Supervisory￿Board,￿to￿restrict￿or￿exclude￿the￿preemptive￿rights
of￿holders￿of￿ordinary￿shares.￿At￿our￿EGM￿held￿on￿September￿7,￿2012,￿the￿Board￿of￿Management￿was￿authorized￿from
September￿7,￿2012￿through￿October￿25,￿2013,￿subject￿to￿approval￿of￿the￿Supervisory￿Board,￿to￿restrict￿or￿exclude
preemptive￿rights￿of￿holders￿of￿ordinary￿shares￿up￿to￿a￿maximum￿of￿10.0￿percent￿of￿our￿issued￿share￿capital￿at￿April￿25,
2012.￿With￿this￿authorization,￿the￿corresponding￿authorization￿granted￿at￿the￿AGM￿held￿on￿April￿25,￿2012,￿ceased￿to
apply￿to￿the￿extent￿not￿already￿used.

We￿may￿repurchase￿our￿issued￿ordinary￿shares￿at￿any￿time,￿subject￿to￿compliance￿with￿the￿requirements￿of￿Dutch￿law
and￿our￿Articles￿of￿Association.￿Any￿such￿repurchases￿are￿and￿remain￿subject￿to￿the￿approval￿of￿the￿Supervisory￿Board
and￿the￿authorization￿of￿shareholders￿at￿ASML’s￿AGM,￿which￿authorization￿may￿not￿be￿for￿more￿than￿18￿months.￿At￿the
AGM￿held￿on￿April￿25,￿2012,￿the￿Board￿of￿Management￿has￿been￿authorized,￿subject￿to￿Supervisory￿Board￿approval,￿to
repurchase￿through￿October￿25,￿2013,￿up￿to￿a￿maximum￿of￿two￿times￿10.0￿percent￿of￿our￿issued￿share￿capital￿at￿April
25,￿2012,￿at￿a￿price￿between￿the￿nominal￿value￿of￿the￿ordinary￿shares￿purchased￿and￿110.0￿percent￿of￿the￿market￿price
of￿these￿securities￿on￿NYSE￿Euronext￿Amsterdam￿or￿NASDAQ.￿At￿our￿AGM￿to￿be￿held￿on￿April￿24,￿2013,￿we￿shall￿request
the￿authorization￿for￿the￿Board￿of￿Management￿to￿repurchase￿and￿cancel￿shares￿for￿a￿period￿of￿18￿months￿as￿of￿the
2013￿AGM,￿i.e.￿until￿October￿24,￿2014,￿all￿in￿conformity￿with￿the￿provisions￿of￿the￿law￿and￿our￿Articles￿of￿Association.

Ordinary shares B

As￿part￿of￿the￿most￿recent￿changes￿in￿our￿Articles￿of￿Association,￿adopted￿at￿the￿EGM￿held￿on￿September￿7,￿2012,
the￿9,000￿ordinary￿shares￿B￿with￿a￿nominal￿value￿of￿EUR￿0.01￿were￿introduced.￿A￿person￿who￿holds￿(a￿multiple￿of)￿100
fractional￿shares,￿may￿exchange￿those￿fractional￿shares￿for￿an￿ordinary￿share￿B.￿Every￿holder￿of￿an￿ordinary￿share￿B￿is
entitled￿to￿one-ninth￿(1/9)￿of￿a￿dividend.￿Each￿ordinary￿share￿B￿entitles￿the￿holder￿thereof￿to￿cast￿one￿vote￿at￿the￿General
Meeting.

Cumulative preference shares
In￿1998,￿we￿granted￿to￿the￿preference￿share￿foundation,￿"Stichting￿Preferente￿Aandelen￿ASML"￿(the￿"Foundation")￿an
option￿to￿acquire￿cumulative￿preference￿shares￿in￿our￿capital￿(the￿"Preference￿Share￿Option").￿This￿option￿was￿amended
and￿extended￿in￿2003￿and￿2007.￿A￿third￿amendment￿to￿the￿option￿agreement￿between￿the￿Foundation￿and￿ASML
became￿effective￿on￿January￿1,￿2009,￿to￿clarify￿the￿procedure￿for￿the￿repurchase￿and￿cancellation￿of￿the￿preference
shares￿when￿issued.

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Per￿the￿amendment￿of￿our￿Articles￿of￿Association￿of￿May￿6,￿2011,￿the￿nominal￿value￿of￿the￿cumulative￿preference￿shares
was￿increased￿to￿EUR￿0.09.￿The￿number￿of￿cumulative￿preference￿shares￿included￿in￿the￿authorized￿share￿capital￿was
decreased￿to￿700,000,000.￿This￿was￿done￿to￿simplify￿the￿Articles￿of￿Association,￿and￿to￿give￿each￿share￿the￿right￿to￿cast
one￿vote￿in￿the￿General￿Meeting￿of￿Shareholders.

The￿Foundation￿may￿exercise￿the￿preference￿share￿option￿in￿situations￿where,￿in￿the￿opinion￿of￿the￿Board￿of￿Directors
of￿the￿Foundation,￿our￿interests,￿our￿business￿or￿the￿interests￿of￿our￿stakeholders￿are￿at￿stake.￿This￿may￿be￿the￿case
if￿a￿public￿bid￿for￿our￿shares￿has￿been￿announced￿or￿has￿been￿made,￿or￿the￿justified￿expectation￿exists￿that￿such￿a
bid￿will￿be￿made￿without￿any￿agreement￿having￿been￿reached￿in￿relation￿to￿such￿a￿bid￿with￿us.￿The￿same￿may￿apply￿if
one￿shareholder,￿or￿more￿shareholders￿acting￿in￿concert,￿hold￿a￿substantial￿percentage￿of￿our￿issued￿ordinary￿shares
without￿making￿an￿offer￿or￿if,￿in￿the￿opinion￿of￿the￿Board￿of￿Directors￿of￿the￿Foundation,￿the￿(attempted)￿exercise￿of￿the
voting￿rights￿by￿one￿shareholder￿or￿more￿shareholders,￿acting￿in￿concert,￿is￿materially￿in￿conflict￿with￿our￿interests,￿our
business￿or￿our￿stakeholders.

The￿objectives￿of￿the￿Foundation￿are￿to￿look￿after￿the￿interests￿of￿ASML￿and￿of￿the￿enterprises￿maintained￿by￿ASML
and￿of￿the￿companies￿which￿are￿affiliated￿in￿a￿group￿with￿ASML,￿in￿such￿a￿way￿that￿the￿interests￿of￿ASML,￿of￿those
enterprises￿and￿of￿all￿parties￿concerned￿are￿safeguarded￿in￿the￿best￿possible￿way,￿and￿influences￿in￿conflict￿with￿these
interests￿which￿might￿affect￿the￿independence￿or￿the￿identity￿of￿ASML￿and￿those￿companies￿are￿deterred￿to￿the￿best
of￿the￿Foundation’s￿ability,￿and￿everything￿related￿to￿the￿above￿or￿possibly￿conducive￿thereto.￿The￿Foundation￿seeks￿to
realize￿its￿objects￿by￿the￿acquiring￿and￿holding￿of￿cumulative￿preference￿shares￿in￿the￿capital￿of￿ASML￿and￿by￿exercising
the￿rights￿attached￿to￿these￿shares,￿particularly￿the￿voting￿rights￿attached￿to￿these￿shares.

The￿preference￿share￿option￿gives￿the￿Foundation￿the￿right￿to￿acquire￿a￿number￿of￿cumulative￿preference￿shares￿as￿the
Foundation￿will￿require,￿provided￿that￿the￿aggregate￿nominal￿value￿of￿such￿number￿of￿cumulative￿preference￿shares
shall￿not￿exceed￿the￿aggregate￿nominal￿value￿of￿the￿ordinary￿shares￿that￿have￿been￿issued￿at￿the￿time￿of￿exercise￿of￿the
Preference￿Share￿Option￿for￿a￿subscription￿price￿equal￿to￿their￿nominal￿value.￿Only￿one-fourth￿of￿the￿subscription￿price
is￿payable￿at￿the￿time￿of￿initial￿issuance￿of￿the￿cumulative￿preference￿shares,￿with￿the￿other￿three-fourths￿of￿the￿nominal
value￿only￿being￿payable￿when￿we￿call￿up￿this￿amount.￿Exercise￿of￿the￿preference￿share￿option￿could￿effectively￿dilute
the￿voting￿power￿of￿the￿outstanding￿ordinary￿shares￿by￿one-half.

Cancellation￿and￿repayment￿of￿the￿issued￿cumulative￿preference￿shares￿by￿us￿requires￿the￿authorization￿by￿the￿General
Meeting￿of￿Shareholders￿of￿a￿proposal￿to￿do￿so￿by￿the￿Board￿of￿Management￿approved￿by￿the￿Supervisory￿Board.￿If
the￿preference￿share￿option￿is￿exercised￿and￿as￿a￿result￿cumulative￿preference￿shares￿are￿issued,￿we,￿at￿the￿request￿of
the￿Foundation,￿will￿initiate￿the￿repurchase￿or￿cancellation￿of￿all￿cumulative￿preference￿shares￿held￿by￿the￿Foundation.
In￿that￿case￿we￿are￿obliged￿to￿effect￿the￿repurchase￿and￿cancellation￿respectively￿as￿soon￿as￿possible.￿A￿cancellation
will￿have￿as￿a￿result￿a￿repayment￿of￿the￿amount￿paid￿and￿exemption￿from￿the￿obligation￿to￿pay￿up￿on￿the￿cumulative
preference￿shares.￿A￿repurchase￿of￿the￿cumulative￿preference￿shares￿can￿only￿take￿place￿when￿such￿shares￿are￿fully
paid￿up.

If￿the￿Foundation￿will￿not￿request￿us￿to￿repurchase￿or￿cancel￿all￿cumulative￿preference￿shares￿held￿by￿the￿Foundation
within￿20￿months￿after￿issuance￿of￿these￿shares,￿we￿will￿be￿obliged￿to￿convene￿a￿General￿Meeting￿of￿Shareholders￿in
order￿to￿decide￿on￿a￿repurchase￿or￿cancellation￿of￿these￿shares.

The￿Foundation￿is￿independent￿of￿ASML.￿The￿Board￿of￿Directors￿of￿the￿Foundation￿comprises￿four￿independent￿voting
members￿from￿the￿Dutch￿business￿and￿academic￿communities.￿As￿of￿January￿1,￿2012,￿the￿members￿of￿the￿Board￿of
Directors￿of￿the￿Foundation￿are:￿Mr.￿A.￿Baan,￿Mr.￿M.W.￿den￿Boogert,￿Mr.￿J.M.￿de￿Jong￿and￿Mr.￿A.H.￿Lundqvist.

Dividend proposal
As￿part￿of￿our￿financing￿policy,￿we￿aim￿to￿pay￿an￿annual￿dividend￿that￿will￿be￿stable￿or￿growing￿over￿time.￿Annually,￿the
Board￿of￿Management￿will,￿upon￿prior￿approval￿from￿the￿Supervisory￿Board,￿submit￿a￿proposal￿to￿the￿AGM￿with￿respect
to￿the￿amount￿of￿dividend￿to￿be￿declared￿with￿respect￿to￿the￿prior￿year.￿The￿dividend￿proposal￿in￿any￿given￿year￿will￿be
subject￿to￿the￿availability￿of￿distributable￿profits￿or￿retained￿earnings￿and￿may￿be￿affected￿by,￿among￿other￿factors,￿the
Board￿of￿Management's￿views￿on￿our￿potential￿future￿liquidity￿requirements,￿including￿for￿investments￿in￿production
capacity,￿the￿funding￿of￿our￿research￿and￿development￿programs￿and￿for￿acquisition￿opportunities￿that￿may￿arise￿from
time￿to￿time;￿and￿by￿future￿changes￿in￿applicable￿income￿tax￿and￿corporate￿laws.￿Accordingly,￿it￿may￿be￿decided￿to
propose￿not￿to￿pay￿a￿dividend￿or￿to￿pay￿a￿lower￿dividend￿with￿respect￿to￿any￿particular￿year￿in￿the￿future.

For￿2012,￿a￿proposal￿to￿declare￿a￿dividend￿of￿EUR￿0.53￿per￿ordinary￿share￿of￿EUR￿0.09￿nominal￿value￿will￿be￿submitted
to￿the￿AGM￿to￿be￿held￿on￿April￿24,￿2013.

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27. Purchases of Equity Securities by the Issuer and Affiliated Purchasers
In￿addition￿to￿dividend￿payments,￿we￿intend￿to￿return￿cash￿to￿our￿shareholders￿on￿a￿regular￿basis￿through￿share
buybacks￿or￿capital￿repayment,￿subject￿to￿our￿actual￿and￿anticipated￿level￿of￿liquidity￿requirements,￿our￿current￿share
price,￿other￿market￿conditions￿and￿other￿relevant￿factors.￿

On￿April￿25,￿2012,￿the￿General￿Meeting￿of￿Shareholders￿authorized￿the￿repurchase￿of￿up￿to￿a￿maximum￿of￿two￿times￿10.0
percent￿of￿our￿issued￿share￿capital￿as￿of￿the￿date￿of￿authorization￿through￿October￿25,￿2013.

On￿January￿19,￿2011,￿we￿announced￿our￿intention￿to￿repurchase￿up￿to￿EUR￿1.0￿billion￿of￿our￿own￿shares￿within￿the
next￿two￿years.￿On￿January￿18,￿2012,￿we￿announced￿to￿increase￿the￿size￿of￿the￿program￿to￿a￿maximum￿amount￿of￿EUR
1,130￿million.￿During￿the￿period￿from￿January￿1,￿2012￿up￿to￿and￿including￿November￿22,￿2012,￿when￿the￿program￿was
completed,￿we￿had￿purchased￿11,278,058￿of￿our￿shares￿for￿a￿total￿amount￿of￿EUR￿430.0￿million￿at￿an￿average￿price￿of
EUR￿38.13￿per￿share.￿These￿shares￿are￿intended￿to￿be￿cancelled￿in￿2013.

Furthermore,￿on￿January￿18,￿2012,￿we￿announced￿our￿intention￿to￿purchase￿up￿to￿2.2￿million￿of￿additional￿shares￿during
2012￿for￿the￿purpose￿of￿covering￿outstanding￿employee￿stock￿and￿stock￿option￿plans.￿During￿the￿period￿from￿November
22,￿2012￿up￿to￿and￿including￿December￿14,￿2012,￿when￿the￿program￿was￿completed,￿a￿total￿number￿of￿2.2￿million￿shares
was￿purchased￿for￿a￿total￿amount￿of￿EUR￿105.2￿million￿at￿an￿average￿price￿of￿EUR￿47.81￿per￿share.￿These￿shares￿will￿be
held￿as￿treasury￿shares￿pending￿delivery￿pursuant￿to￿such￿plans.

Both￿programs￿had￿been￿suspended￿between￿July￿10,￿2012￿and￿October￿18,￿2012￿following￿the￿announcement￿of￿the
Customer￿Co-Investment￿Program￿on￿July￿9,￿2012.

The￿following￿table￿provides￿a￿summary￿of￿our￿repurchased￿shares￿in￿2012￿(excluding￿the￿Synthetic￿Share￿Buyback
effectuated￿in￿November￿2012):

Period
January￿20￿-￿31,￿2012
February￿1￿-￿28,￿2012
March￿1￿-￿31,￿2012
April￿1￿-￿30,￿2012
May￿2￿-￿31,￿2012
June￿1￿-￿30,￿2012
July￿1￿-￿29,￿2012
August￿1￿-￿31,￿2012
September￿1￿-￿30,￿2012
October￿3￿-￿31,￿2012
November￿1￿-￿30,￿2012
December￿1￿-￿31,￿2012
￿
Total

Total number
of shares
purchased
2,132,366
1,025,407
949,726
654,169
1,219,480
1,133,550
428,000
-
-
1,153,112
3,240,099
1,542,149
￿
13,478,058

Average price
paid per Share
(EUR)
32.65
34.71
35.76
37.18
36.88
38.61
40.65
-
-
41.86
44.10
48.24
￿
39.71

Total number of shares
purchased as
part of publicly
announced plans
or programs
2,132,366
3,157,773
4,107,499
4,761,668
5,981,148
7,114,698
7,542,698
7,542,698
7,542,698
8,695,810
11,935,909
13,478,058
￿
￿

Maximum value of
shares that may yet
be purchased under
the program1
(EUR)
360,369,363
324,780,615
290,820,741
266,501,698
221,530,029
177,764,616
160,366,940
160,366,940
160,366,940
112,099,413
-
-
￿
￿

Maximum number of
shares that may yet be
purchased under the
program2
2,200,000
2,200,000
2,200,000
2,200,000
2,200,000
2,200,000
2,200,000
2,200,000
2,200,000
2,200,000
1,542,149
-
￿
￿

1 Program￿to￿purchase￿shares￿up￿to￿a￿maximum￿amount￿of￿EUR￿1,130￿million.￿We￿have￿or￿will￿cancel￿these￿shares.
2 Program￿to￿purchase￿up￿to￿2.2￿million￿shares￿for￿the￿purpose￿of￿covering￿outstanding￿employee￿stock￿and￿stock￿option￿plans

At￿the￿EGM￿held￿on￿September￿7,￿2012,￿a￿resolution￿was￿passed￿to￿amend￿the￿Articles￿of￿Association￿in￿connection￿with
the￿Synthetic￿Share￿Buyback￿to￿be￿effected￿in￿connection￿with￿the￿Customer￿Co-Investment￿Program.￿We￿refer￿to￿Note
26￿for￿a￿summary￿description￿of￿these￿amendments.￿On￿November￿24,￿2012,￿we￿effectuated￿the￿amendments￿consisting
of￿a￿repayment￿to￿shareholders￿(excluding￿participating￿customers)￿of￿EUR￿9.18￿per￿ordinary￿share￿and￿the￿exchange￿of
each￿100￿ASML￿ordinary￿shares￿for￿77￿ASML￿ordinary￿shares.

As￿a￿result￿of￿these￿amendments,￿which￿in￿substance￿constitute￿a￿Synthetic￿Share￿Buyback,￿we￿effectively￿repurchased
93,411,216￿shares￿at￿an￿average￿price￿of￿EUR￿39.91￿for￿a￿total￿amount￿of￿EUR￿3,728.3￿million.

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28. Customer Co-Investment Program

Overview

On￿July￿9,￿2012,￿we￿announced￿our￿Customer￿Co-Investment￿Program￿to￿accelerate￿our￿development￿of￿EUV￿technology
beyond￿the￿current￿generation￿and￿our￿development￿of￿future￿450mm￿silicon￿wafer￿technology.￿The￿participating
customers￿agreed￿to￿fund￿EUR￿1.38￿billion￿of￿our￿research￿and￿development￿projects￿from￿2013￿through￿2017.￿This
program￿creates￿risk￿sharing￿with￿some￿of￿our￿largest￿customers￿while￿the￿results￿of￿ASML’s￿development￿programs￿will
be￿available￿to￿every￿semiconductor￿manufacturer￿with￿no￿restrictions.￿The￿R&D￿funding￿program￿in￿the￿Customer￿Co-
Investment￿Program￿consists￿of￿two￿funding￿projects:￿a￿450mm￿technology￿development￿project￿and￿a￿next-generation
EUV￿development￿project.￿ASML￿has￿entered￿into￿Non￿Recurring￿Engineering￿("NRE")￿funding￿agreements￿with￿the
participating￿customers.

In￿addition￿to￿the￿funding￿commitments￿described￿above,￿the￿participating￿customers￿have￿invested￿in￿ordinary￿shares
equal,￿in￿aggregate,￿to￿23￿percent￿of￿ASML's￿issued￿share￿capital￿(calculated￿giving￿effect￿to￿our￿Synthetic￿Share
Buyback￿in￿November￿2012).￿The￿proceeds￿of￿the￿share￿issuance,￿EUR￿3.85￿billion,￿were￿returned￿to￿the￿holders￿of
ordinary￿shares￿(excluding￿the￿participating￿customers)￿through￿a￿Synthetic￿Share￿Buyback￿executed￿in￿November
2012.￿For￿further￿information￿regarding￿the￿Synthetic￿Share￿Buyback,￿see￿Note￿26￿to￿our￿consolidated￿financial
statements.

Description of Investment Agreements, Shareholder Agreements and NRE Funding Agreements

In￿connection￿with￿the￿Customer￿Co-Investment￿Program,￿ASML￿entered￿into￿an￿investment￿agreement,￿a￿shareholder
agreement￿and￿NRE￿funding￿agreements￿with￿each￿of￿the￿participating￿customers.￿Intel￿is￿the￿largest￿participant￿in￿the
program,￿with￿an￿aggregate￿funding￿commitment￿of￿EUR￿829￿million￿and￿an￿investment￿in￿15￿percent￿of￿our￿ordinary
shares￿(calculated￿giving￿effect￿to￿our￿Synthetic￿Share￿Buyback￿in￿November￿2012).￿A￿description￿of￿the￿investment
agreement,￿shareholders￿agreement￿and￿NRE￿funding￿agreements￿between￿ASML￿and￿Intel￿is￿set￿out￿below.￿￿The
agreements￿between￿ASML￿and￿the￿other￿program￿participants￿-￿￿TSMC￿(which￿acquired￿5￿percent￿of￿our￿shares￿and
made￿an￿EUR￿277￿million￿funding￿commitment)￿and￿Samsung￿(which￿acquired￿3￿percent￿of￿our￿shares￿and￿made￿an￿EUR
276￿million￿funding￿commitment)￿are￿on￿substantially￿the￿same￿terms￿as￿those￿agreed￿with￿Intel.￿￿Shares￿were￿acquired
by￿Dutch￿foundations￿(“Stichtingen”)￿established￿for￿each￿participant.

Investment Agreements

Pursuant￿to￿the￿investment￿agreement￿between￿ASML￿and￿Intel,￿dated￿July￿9,￿2012￿("the￿Intel￿Investment￿Agreement"),
ASML￿has￿issued￿and￿delivered￿to￿Intel￿Stichting￿ordinary￿shares￿equal￿to￿15￿percent￿of￿the￿issued￿ordinary￿shares￿with
simultaneous￿issuance￿by￿the￿Intel￿Stichting￿to￿Intel￿of￿the￿corresponding￿depositary￿receipts.

Pursuant￿to￿the￿investment￿agreement￿between￿ASML￿and￿TSMC,￿dated￿August￿5,￿2012￿(the￿"TSMC￿Investment
Agreement")￿ASML￿has￿issued￿and￿delivered￿to￿Stichting￿Administratiekantoor￿TSMC￿("TSMC￿Stichting")￿ordinary￿shares
equal￿to￿5￿percent￿of￿the￿issued￿ordinary￿shares￿with￿simultaneous￿issuance￿by￿the￿TSMC￿Stichting￿to￿TSMC￿of￿the
corresponding￿depositary￿receipts.

Pursuant￿to￿the￿investment￿agreement￿between￿ASML￿and￿Samsung,￿dated￿August￿27,￿2012￿(the￿"Samsung￿Investment
Agreement"￿and￿together￿with￿the￿Intel￿Investment￿Agreement￿and￿TSMC￿Investment￿Agreement,￿the￿"Investment
Agreements"),￿ASML￿has￿issued￿and￿delivered￿to￿the￿Samsung￿Stichting￿ordinary￿shares￿equal￿to￿3￿percent￿of￿the￿issued
ordinary￿shares￿with￿simultaneous￿issuance￿by￿the￿Samsung￿Stichting￿to￿Samsung￿of￿the￿corresponding￿depositary
receipts.

The￿subscription￿price￿for￿the￿ordinary￿shares￿under￿the￿Investment￿Agreements￿was￿EUR￿39.91￿per￿ordinary￿share,
which￿is￿the￿average￿of￿the￿volume￿weighted￿average￿price￿of￿the￿ordinary￿shares￿on￿NYSE￿Euronext￿Amsterdam￿for￿the
twenty￿trading￿days￿up￿to￿and￿including￿July￿6,￿2012.

Based￿upon￿the￿subscription￿price￿(EUR￿39.91)￿included￿in￿the￿Investment￿Agreements,￿the￿equity￿participation￿of￿Intel
(15￿percent),￿TSMC￿(5￿percent)￿and￿Samsung￿(3￿percent)￿amount￿to￿EUR￿2,513￿million,￿EUR￿838￿million￿and￿EUR￿503
million,￿respectively.

Under￿the￿Intel￿Investment￿Agreements,￿ASML￿has￿agreed￿to￿indemnify￿the￿participating￿customers￿and￿their￿affiliates
for￿certain￿losses￿and￿expenses￿related￿to￿breaches￿of￿representations,￿warranties,￿covenants￿and￿agreements￿in￿the
Investment￿Agreements￿and￿with￿respect￿to￿certain￿legal￿proceedings￿related￿thereto,￿subject￿to￿certain￿limitations.

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Shareholder Agreements

In￿connection￿with￿the￿issuance￿of￿shares￿pursuant￿to￿the￿Intel￿Investment￿Agreement,￿on￿September￿12,￿2012￿ASML,
Intel￿and￿the￿Intel￿Stichting￿entered￿into￿a￿shareholder￿agreement￿(the￿“Shareholder￿Agreement”)￿which￿governs￿certain
matters￿relating￿to￿the￿holding￿of￿and￿further￿investment￿by￿Intel￿in￿ordinary￿shares￿of￿ASML,￿directly￿and￿indirectly
through￿the￿Intel￿Stichting,￿including￿the￿matters￿described￿below.

The￿shareholder￿agreements￿between￿ASML￿and￿the￿other￿program￿participants￿(TSMC￿and￿Samsung)￿are￿on
substantially￿the￿same￿terms￿as￿those￿agreed￿with￿Intel.￿

Voting Restrictions

Pursuant￿to￿the￿Intel￿Shareholder￿Agreement,￿Intel￿(and￿the￿Intel￿Stichting)￿will￿not￿be￿entitled￿to￿vote￿the￿ordinary￿shares
that￿were￿acquired￿by￿the￿Intel￿Stichting￿as￿part￿of￿the￿Customer￿Co-Investment￿Program￿or￿any￿other￿ordinary￿shares
otherwise￿transferred￿to￿the￿Intel￿Stichting￿(under￿the￿circumstances￿described￿under￿"Standstill;￿Additional￿Purchases"
below)￿prior￿to￿a￿Shareholder￿Agreement￿Termination￿Event￿(as￿defined￿below),￿except￿when￿a￿Suspension￿Event￿(as
described￿below)￿occurs￿and￿is￿continuing￿or￿where￿the￿following￿matters￿are￿proposed￿at￿any￿General￿Meeting￿(the
"Voting￿Restrictions"):￿(i)￿an￿issuance￿of￿ASML￿shares￿or￿grant￿of￿rights￿to￿subscribe￿for￿ASML￿shares￿representing￿25
percent￿or￿more￿of￿the￿issued￿and￿outstanding￿share￿capital￿of￿ASML￿or￿the￿restriction￿or￿exclusion￿of￿pre-emption￿rights
relating￿thereto￿(in￿each￿case,￿on￿an￿aggregate￿basis￿during￿the￿preceding￿12￿months)￿or￿the￿designation￿of￿the￿Board￿of
Management￿as￿the￿authorized￿body￿to￿resolve￿on￿these￿matters;￿(ii)￿an￿authorization￿to￿repurchase￿25￿percent￿or￿more
of￿ASML’s￿issued￿and￿outstanding￿share￿capital￿on￿an￿aggregate￿basis￿during￿the￿preceding￿12￿months;￿(iii)￿the￿approval
of￿a￿significant￿change￿in￿the￿identity￿or￿nature￿of￿ASML￿or￿our￿business,￿including￿a￿transfer￿of￿all￿or￿substantially￿all
business￿or￿assets￿of￿ASML￿and￿our￿subsidiaries￿to￿a￿third￿party,￿the￿establishment￿or￿cancellation￿of￿a￿long-lasting
cooperation￿of￿essential￿importance￿with￿a￿third￿party￿and￿an￿acquisition￿or￿disposition￿of￿an￿interest￿in￿the￿capital￿or
assets￿of￿a￿person￿with￿a￿value￿of￿at￿least￿one￿third￿of￿the￿assets￿of￿ASML￿(on￿a￿consolidated￿basis);￿(iv)￿an￿amendment
to￿ASML’s￿Articles￿of￿Association￿that￿would￿materially￿affect￿the￿specific￿voting￿rights￿of￿Intel,￿would￿materially￿affect
the￿identity￿or￿nature￿of￿ASML￿or￿our￿business,￿or￿would￿disproportionately￿(or￿uniquely)￿and￿adversely￿affect￿the￿rights
or￿benefits￿attached￿to￿or￿derived￿from￿the￿ordinary￿shares￿held￿by￿Intel￿through￿the￿Intel￿Stichting￿as￿compared￿to￿the
shareholders;￿(v)￿the￿dissolution￿of￿ASML;￿and￿(vi)￿any￿merger￿or￿demerger￿which￿would￿result￿in￿a￿material￿change￿in￿the
identity￿or￿nature￿of￿ASML￿or￿its￿business.

Standstill, Lock-up and Orderly Market Arrangements

Standstill;￿Additional￿Purchases

Subject￿to￿certain￿exceptions,￿pursuant￿to￿the￿Shareholder￿Agreement,￿Intel￿(or￿its￿affiliates)￿may￿not,￿prior￿to￿the
six-year￿anniversary￿of￿the￿date￿of￿the￿Intel￿Shareholder￿Agreement￿(the￿"Standstill￿Period"),￿acquire￿more￿than￿19.9
percent￿of￿the￿outstanding￿share￿capital￿of￿ASML￿without￿ASML’s￿prior￿approval￿(the￿"Standstill￿Restriction").￿There￿is
an￿exception￿from￿the￿Standstill￿Restriction￿in￿the￿case￿of￿a￿‘suspension￿event’,￿which￿includes￿certain￿circumstances
where￿a￿third￿party￿has￿acquired￿or￿made￿an￿offer￿to￿acquire￿at￿least￿20￿percent￿of￿ASML’s￿outstanding￿shares,￿and￿the
Standstill￿Restriction￿will￿terminate￿upon￿the￿occurrence￿of￿a￿Shareholder￿Agreement￿Termination￿Event.

The￿Shareholder￿Agreement￿permits￿Intel￿(and￿its￿affiliates)￿to￿acquire￿up￿to￿4.99￿percent￿of￿ASML's￿outstanding￿shares
(other￿than￿shares￿acquired￿through￿the￿Customer￿Co-Investment￿Program)￿that￿may￿be￿held￿outside￿the￿Intel￿Stichting.
For￿any￿additional￿ASML￿shares￿that￿Intel￿(or￿its￿affiliates)￿acquires￿in￿excess￿of￿4.99￿percent￿of￿the￿outstanding￿shares
of￿ASML,￿Intel￿is￿required￿to￿deposit￿such￿shares￿with￿the￿Intel￿Stichting￿in￿exchange￿for￿Depositary￿Receipts.￿Shares
held￿directly￿by￿Intel￿or￿its￿affiliates￿(and￿which￿not￿required￿to￿be￿deposited￿with￿the￿Intel￿Stichting)￿are￿not￿subject￿to
the￿Voting￿Restrictions,￿or￿Lock-Up￿Restrictions￿(as￿defined￿below),￿but￿are￿subject￿to￿the￿Standstill￿Restriction.

The￿Intel￿Stichting￿will￿continue￿to￿hold￿ASML￿shares￿owned￿by￿Intel￿(notwithstanding￿termination￿of￿the￿Standstill
Period)￿until￿the￿earlier￿of￿(i)￿￿such￿time￿as￿Intel￿owns￿(directly￿or￿through￿the￿Intel￿Stichting)￿less￿than￿2￿percent￿of
ASML’s￿outstanding￿shares￿(the￿relevant￿percentage￿is￿1￿percent￿for￿the￿other￿participating￿customers)￿(ii)￿the￿date
of￿notification￿to￿ASML￿by￿participating￿customers￿that￿the￿aggregate￿amount￿of￿ASML’s￿outstanding￿shares￿owned
by￿Intel￿and￿the￿other￿participating￿customers￿represents￿less￿than￿5￿percent￿of￿ASML’s￿outstanding￿shares￿and￿(iii)
a￿Shareholder￿Agreement￿Termination￿Event￿(as￿defined￿below),￿following￿which￿time￿Depositary￿Receipts￿will￿be
exchanged￿for￿the￿underlying￿ASML￿shares.￿In￿case￿Intel￿would￿acquire￿ASML￿shares￿within￿18￿months￿after￿an￿event
described￿under￿(i)￿or￿(ii)￿above,￿any￿ASML￿shares￿held￿by￿Intel￿in￿excess￿of￿4.99￿percent￿of￿the￿outstanding￿shares￿of
ASML￿must￿be￿transferred￿to￿(and￿held￿by)￿the￿Intel￿Stichting.

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Lock-up;￿Orderly￿Sell￿Down

Intel￿may￿not,￿without￿prior￿written￿consent￿of￿ASML,￿transfer￿any￿ordinary￿shares￿or￿Depositary￿Receipts￿until￿the
earliest￿of￿(i)￿two￿years￿and￿six￿months￿after￿the￿date￿of￿the￿Intel￿Shareholder￿Agreement,￿(ii)￿termination￿of￿the￿NRE
funding￿agreements,￿and￿(iii)￿the￿occurrence￿of￿a￿Shareholder￿Agreement￿Termination￿Event￿￿((i),￿(ii)￿and￿(iii)￿together,￿the
"Lock-Up￿Restriction").￿The￿Lock-Up￿Restriction￿does￿not￿apply￿in￿certain￿circumstances￿where￿a￿third￿party￿offers￿to
acquire￿at￿least￿20￿percent￿of￿ASML’s￿shares.￿Intel￿is￿not￿permitted￿to￿transfer￿the￿ASML￿ordinary￿shares￿it￿acquired￿in
the￿program￿in￿connection￿with￿an￿offer￿(before￿the￿end￿of￿the￿offer),￿or￿make￿any￿public￿statement￿in￿support￿of￿such
offer,￿that￿is￿not￿recommended￿by￿the￿ASML￿Supervisory￿Board￿or￿Management￿Board,￿except￿in￿limited￿circumstances.

In￿addition,￿Intel￿may￿not￿(even￿after￿the￿Lock-Up￿Period￿has￿ended),￿without￿written￿consent￿of￿ASML,￿transfer￿on
NYSE￿Euronext￿Amsterdam,￿NASDAQ￿or￿another￿securities￿exchange￿more￿than￿(i)￿in￿respect￿of￿Intel,￿4￿percent￿of￿the
outstanding￿shares￿of￿ASML￿(the￿relevant￿percentage￿is￿1.5￿percent￿for￿Samsung￿and￿2.5￿percent￿for￿TSMC).￿There￿are
also￿restrictions￿on￿Intel's￿ability￿to￿transfer￿ASML￿shares￿to￿certain￿competitors￿or￿customers￿of￿ASML.

Termination

The￿Intel￿Shareholder￿Agreement￿will￿terminate￿upon￿the￿occurrence￿of￿the￿following￿events￿(each￿a￿"Shareholder
Agreement￿Termination￿Event")￿(i)￿certain￿change￿of￿control￿transactions￿were￿the￿shareholders￿of￿ASML￿prior￿to￿such
a￿transaction￿are￿no￿longer￿entitled￿to￿exercise￿at￿least￿50￿percent￿of￿the￿votes￿in￿the￿General￿Meeting￿following￿such
transaction,￿(ii)￿in￿the￿event￿of￿a￿delisting￿of￿the￿Ordinary￿Shares￿from￿NYSE￿Euronext￿Amsterdam￿or￿delisting￿from
NASDAQ￿(except￿for￿certain￿voluntary￿delistings￿from￿NASDAQ),￿(iii)￿the￿winding￿up￿or￿liquidation￿of￿ASML,￿or￿(vi)￿in￿the
event￿that￿all￿Depositary￿Receipts￿are￿exchanged￿for￿ASML￿shares￿and￿Intel￿does￿not￿acquire￿ASML￿shares￿in￿excess￿of
4.99￿percent￿of￿the￿outstanding￿ASML￿shares￿within￿18￿months￿of￿such￿exchange￿(see￿"Standstill;￿Additional￿Purchases"
above).

NRE Funding Agreements

On￿July￿9,￿2012,￿ASML￿and￿Intel￿entered￿into￿two￿NRE￿funding￿agreements￿pursuant￿to￿which￿Intel￿will￿support￿ASML’s
R&D￿costs￿and￿project￿expenditures.￿One￿agreement￿relates￿to￿the￿development￿of￿450mm￿lithography￿equipment
(the￿"Intel￿450mm￿NRE￿Funding￿Agreement")￿and￿the￿other￿relates￿to￿the￿development￿of￿EUV￿lithography￿equipment
(the￿"Intel￿EUV￿NRE￿Funding￿Agreement"￿and￿together￿with￿the￿Intel￿450mm￿NRE￿Funding￿Agreement,￿the￿"Intel￿NRE
Funding￿Agreements").￿Intel￿has￿committed￿to￿provide￿EUR￿553￿million￿in￿funding￿under￿the￿Intel￿450mm￿NRE￿Funding
Agreement￿and￿EUR￿276￿million￿in￿funding￿under￿the￿Intel￿EUV￿NRE￿Funding￿Agreement,￿payable￿over￿the￿respective
terms￿(2013-2017)￿of￿the￿Intel￿NRE￿Funding￿Agreements.

On￿August￿5,￿2012,￿ASML￿and￿TSMC￿entered￿into￿the￿TSMC￿NRE￿funding￿agreement￿(the￿"TSMC￿NRE￿Funding
Agreement")￿pursuant￿to￿which￿TSMC￿will￿support￿ASML’s￿R&D￿costs￿and￿project￿expenditures￿relating￿to￿the
development￿of￿450mm￿lithography￿equipment￿and￿EUV￿platforms.￿TSMC￿has￿committed￿to￿provide￿EUR￿277￿million￿in
funding￿payable￿over￿the￿term￿(2013-2017)￿of￿the￿TSMC￿NRE￿Funding￿Agreement.

On￿August￿27,￿2012,￿ASML￿and￿Samsung￿entered￿into￿the￿Samsung￿NRE￿funding￿agreement￿(the￿"Samsung￿NRE
Funding￿Agreement")￿pursuant￿to￿which￿Samsung￿will￿support￿ASML’s￿R&D￿costs￿and￿project￿expenditures￿relating
to￿the￿development￿of￿300mm/450mm￿EUV￿platforms.￿Samsung￿has￿committed￿to￿provide￿EUR￿276￿million￿in￿funding
payable￿over￿the￿term￿(2013-2017)￿of￿the￿Samsung￿NRE￿Funding￿Agreement.

Under￿the￿Intel￿NRE￿Funding￿Agreements,￿the￿TSMC￿NRE￿Funding￿Agreement,￿and￿the￿Samsung￿NRE￿Funding
Agreement￿(together￿the￿“NRE￿Funding￿Agreements”),￿ASML￿will￿retain￿sole￿control￿over￿the￿development￿of￿450mm
photo￿lithography￿equipment￿and￿EUV￿platforms￿and￿will￿own￿all￿intellectual￿property￿created￿by￿ASML￿in￿connection
therewith.￿The￿NRE￿Funding￿Agreements￿provide￿that￿if￿ASML,￿in￿its￿reasonable￿discretion,￿determines￿to￿abandon
either￿the￿450mm￿or￿EUV￿development￿project,￿as￿a￿result￿of￿technical￿infeasibility￿or￿lack￿of￿sufficient￿industry￿demand,
or￿if￿the￿then￿remaining￿funding￿exceeds￿the￿expenditure￿estimate￿for￿the￿development￿project￿(450mm￿or￿EUV)
then￿the￿parties￿may￿agree￿on￿an￿alternative￿development￿project,￿and￿if￿no￿alternative￿is￿agreed,￿ASML￿may￿invoice
the￿participating￿customers￿for￿the￿remaining￿due￿portion￿of￿committed￿funding￿during￿each￿year￿of￿the￿remaining
funding￿period￿in￿which￿ASML's￿actual￿gross￿R&D￿expenditures￿exceed￿a￿minimum￿threshold￿specified￿in￿the￿NRE
Funding￿Agreements.￿The￿NRE￿Funding￿Agreements￿will￿terminate￿on￿December￿31,￿2017￿or￿upon￿pre-payment￿by￿the
participating￿customer￿of￿the￿aggregate￿amount￿of￿funding￿owed￿under￿its￿respective￿NRE￿Funding￿Agreement.

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Commercial Agreement

On￿July￿9,￿2012,￿ASML￿and￿Intel￿entered￿into￿a￿Commercial￿Agreement,￿pursuant￿to￿which￿ASML￿and￿Intel￿established
a￿contractual￿framework￿for￿Intel￿to￿purchase￿equipment￿related￿to￿the￿450mm￿and￿EUV￿next-generation￿lithography
equipment.￿Under￿this￿agreement,￿Intel￿has￿committed￿to￿purchase￿specified￿numbers￿of￿450mm￿and￿EUV￿tools.
The￿agreement￿sets￿forth￿pricing￿terms￿for￿the￿tools￿as￿well￿as￿milestones￿related￿to￿product￿deliveries,￿and￿provides
for￿certain￿commercial￿discounts￿in￿the￿form￿of￿credits￿in￿exchange￿for￿Intel’s￿early￿purchase￿commitments￿and
volume￿purchase￿commitments￿and￿for￿specified￿additional￿credits￿in￿the￿event￿that￿certain￿schedules￿are￿not￿met.￿In
addition,￿subject￿to￿certain￿conditions,￿ASML￿has￿agreed￿to￿install￿sufficient￿capacity￿to￿meet￿Intel’s￿forecasted￿450mm
lithography￿equipment￿needs￿through￿2022.

Accounting Policies

The￿Investment￿Agreements,￿Shareholder￿Agreements,￿NRE￿Funding￿Agreements￿and￿Commercial￿Agreement￿are
accounted￿for￿as￿a￿multiple-element￿arrangement￿with￿each￿of￿the￿participating￿customers.￿Based￿upon￿ASC￿605-25
“Multiple-Element￿Arrangements”￿guidance,￿the￿following￿two￿separate￿elements￿are￿identified￿for￿each￿arrangement:
(1)￿the￿share￿issuance￿(governed￿by￿the￿Investment￿Agreement￿and￿the￿Shareholder￿Agreement)￿and￿(2)￿the￿NRE￿funding
and￿commercial￿discounts￿and￿credits￿(governed￿by￿the￿NRE￿Funding￿Agreement(s)￿and￿the￿Commercial￿Agreement).

The￿shares￿issued￿to￿the￿participating￿customers￿are￿recorded￿at￿fair￿value￿based￿on￿quoted￿share￿prices￿(EUR￿3,968.7
million)￿with￿the￿remaining￿aggregate￿arrangement￿consideration￿allocated￿to￿the￿NRE￿funding￿and￿commercial￿discounts
and￿credits.￿The￿difference￿between￿the￿fair￿value￿of￿the￿shares￿and￿the￿subscription￿price￿of￿the￿shares￿(EUR￿39.91)￿is
recorded￿as￿a￿deduction￿from￿shareholders’￿equity￿upon￿issuance￿of￿the￿shares￿(EUR￿123.4￿million).￿Shareholders’￿equity
is￿increased￿to￿the￿fair￿value￿of￿the￿shares￿as￿the￿portion￿of￿the￿NRE￿funding￿allocable￿to￿the￿shares￿is￿received￿over￿the
NRE￿funding￿period￿(2013-2017).￿The￿amounts￿are￿deemed￿receivables￿from￿the￿participating￿customers￿in￿their￿capacity
as￿shareholders￿of￿ASML.

A￿significant￿related￿party￿relationship￿exists￿between￿ASML￿and￿Intel￿as￿a￿result￿of￿the￿equity￿investment￿made￿by￿Intel
as￿part￿of￿the￿Customer￿Co-Investment￿Program.￿Based￿on￿the￿commercial￿discounts￿and￿credits￿(governed￿by￿the
Commercial￿Agreement)￿and￿the￿significant￿related￿party￿relationship,￿all￿NRE￿funding￿will￿be￿deferred￿and￿recognized￿in
the￿consolidated￿income￿statement￿only￿when￿the￿commercial￿discounts￿and￿credits￿are￿earned.￿The￿portion￿of￿the￿NRE
funding￿from￿TSMC￿and￿Samsung,￿not￿allocable￿to￿the￿shares,￿will￿be￿recognized￿in￿the￿consolidated￿income￿statement
when￿the￿R&D￿costs￿relating￿to￿the￿development￿of￿450mm￿lithography￿equipment￿and￿EUV￿platforms￿are￿recognized
over￿the￿NRE￿funding￿period.

For￿further￿details￿regarding￿the￿share￿issuances￿to￿the￿participating￿customers￿and￿the￿Synthetic￿Share￿Buyback
effectuated￿in￿connection￿with￿our￿Customer￿Co-Investment￿Program,￿see￿Note￿26.

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29. Related Party Transactions
Consistent￿with￿our￿corporate￿responsibilities￿to￿our￿surrounding￿community￿and￿together￿with￿several￿other￿companies
in￿the￿region,￿in￿prior￿year￿ASML￿entered￿into￿a￿loan￿agreement￿with￿a￿local￿sports￿club￿PSV￿N.V.;￿pursuant￿to￿which
ASML￿provided￿PSV￿N.V.,￿as￿of￿August￿1,￿2011,￿a￿14￿year,￿interest￿free,￿subordinated￿loan￿of￿EUR￿5.0￿million.￿As￿of￿June
30,￿2012￿the￿chairman￿of￿the￿Supervisory￿Board￿of￿ASML,￿Mr.￿Arthur￿van￿der￿Poel￿and￿Chief￿Financial￿Officer￿of￿ASML,
Mr.￿Peter￿Wennink￿resigned￿as￿members￿of￿the￿Supervisory￿Board￿of￿PSV￿N.V.,￿therefore￿the￿loan￿agreement￿with￿PSV
N.V.￿is￿concluded￿to￿no￿longer￿classify￿as￿a￿related￿party￿transaction￿from￿that￿date￿onwards.

On￿July￿9,￿2012,￿we￿announced￿our￿Customer￿Co-Investment￿Program￿to￿accelerate￿our￿development￿of￿EUV￿technology
beyond￿the￿current￿generation￿and￿our￿development￿of￿future￿450mm￿silicon￿wafer￿technology.￿One￿of￿the￿participating
customers,￿Intel,￿agreed￿to￿fund￿EUR￿829￿million￿for￿our￿R&D￿projects.￿In￿addition￿Intel￿also￿agreed￿to￿invest￿in￿ordinary
shares￿equal￿to￿15￿percent￿of￿our￿issued￿share￿capital.￿Due￿to￿the￿equity￿investment,￿Intel￿is￿considered￿a￿related￿party
of￿ASML￿as￿of￿July￿9,￿2012.

We￿have￿entered￿into￿various￿agreements￿with￿Intel￿and￿have￿recognized￿sales￿and￿incurred￿costs￿of￿systems,
services￿and￿field￿options￿provided￿by￿ASML￿since￿the￿date￿that￿Intel￿became￿a￿related￿party.￿We￿believe￿that￿all￿such
transactions￿have￿been￿entered￿into￿in￿the￿ordinary￿course￿of￿business,￿with￿the￿exception￿of￿certain￿terms￿included￿in
the￿agreements￿entered￿into￿as￿part￿of￿the￿Customer￿Co-Investment￿Program:

•

Investment￿Agreement:￿Pursuant￿to￿the￿Intel￿Investment￿Agreement,￿ASML￿agreed￿to￿issue￿to￿Intel￿Stichting￿ordinary
shares￿equal￿to￿15￿percent￿of￿the￿issued￿ordinary￿shares￿which￿the￿Intel￿Stichting￿then￿issued￿to￿Intel￿a￿corresponding
number￿of￿depositary￿receipts￿representing￿these￿shares.￿The￿subscription￿price￿for￿the￿ordinary￿shares￿under￿the
investment￿agreement￿was￿EUR￿39.91￿per￿ordinary￿share,￿which￿is￿the￿average￿of￿the￿volume￿weighted￿average￿price
of￿the￿ordinary￿shares￿on￿Euronext￿for￿the￿twenty￿trading￿days￿up￿to￿and￿including￿July￿6,￿2012.￿Under￿the￿investment
agreement,￿ASML￿has￿agreed￿to￿indemnify￿Intel￿and￿its￿affiliates￿for￿certain￿losses￿and￿expenses￿related￿to￿breaches
of￿representations,￿warranties,￿covenants￿and￿agreements￿in￿the￿investment￿agreement￿and￿with￿respect￿to￿certain
legal￿proceedings￿related￿thereto,￿subject￿to￿certain￿limitations.

• Shareholder￿Agreement:￿In￿connection￿with￿the￿issuance￿of￿the￿ordinary￿shares￿to￿the￿Intel￿Stichting,￿Intel￿and￿its
relevant￿subsidiaries,￿the￿Intel￿Stichting￿and￿ASML￿have￿entered￿into￿the￿shareholder￿agreement,￿which￿governs
certain￿matters￿relating￿to￿the￿holding￿and￿disposing￿of￿and￿further￿investments￿in￿ordinary￿shares￿by￿Intel,￿directly
and￿indirectly￿through￿the￿Intel￿Stichting.

• NRE￿Funding￿Agreement:￿On￿July￿9,￿2012,￿ASML￿and￿Intel￿entered￿into￿the￿Intel￿NRE￿Funding￿Agreement￿pursuant￿to
which￿Intel￿has￿agreed￿to￿provide￿funding￿for￿certain￿of￿ASML’s￿R&D￿costs￿and￿project￿expenditures.￿One￿agreement
relates￿to￿the￿development￿of￿450mm￿lithography￿equipment￿(the￿“Intel￿450mm￿NRE￿Funding￿Agreement”)￿and￿the
other￿relates￿to￿the￿development￿of￿EUV￿lithography￿equipment￿(the￿“Intel￿EUV￿NRE￿Funding￿Agreement”).￿Intel
has￿committed￿to￿provide￿funding￿in￿an￿aggregate￿amount￿of￿EUR￿553￿million￿under￿the￿Intel￿450mm￿NRE￿Funding
Agreement￿and￿funding￿in￿an￿aggregate￿amount￿of￿EUR￿276￿million￿under￿the￿Intel￿EUV￿NRE￿Funding￿Agreement,
payable￿over￿the￿term￿of￿the￿relevant￿agreement￿(2013-2017).￿ASML￿will￿retain￿sole￿control￿over￿the￿development
of￿450mm￿photo￿lithography￿equipment￿and￿EUV￿platforms￿and￿will￿own￿all￿intellectual￿property￿created￿by￿ASML
in￿connection￿therewith.￿The￿Intel￿NRE￿Funding￿Agreements￿provide￿that￿if￿ASML,￿in￿its￿reasonable￿discretion,
determines￿to￿abandon￿either￿the￿450mm￿or￿EUV￿development￿project,￿as￿a￿result￿of￿technical￿infeasibility￿or￿lack￿of
sufficient￿industry￿demand,￿or￿if￿the￿then￿remaining￿funding￿exceeds￿the￿expenditure￿estimate￿for￿the￿development
project￿(450mm￿or￿EUV)￿then￿the￿parties￿may￿agree￿on￿an￿alternative￿development￿project￿if￿no￿alternative￿is￿agreed,
ASML￿may￿invoice￿Intel￿for￿the￿remaining￿due￿portion￿of￿committed￿funding￿during￿each￿year￿of￿the￿remaining
funding￿period￿in￿which￿ASML’s￿actual￿gross￿R&D￿expenditures￿exceed￿a￿minimum￿threshold￿specified￿in￿the￿relevant
agreement.￿The￿NRE￿funding￿agreements￿will￿terminate￿on￿December￿31,￿2017￿or￿upon￿pre-payment￿by￿Intel￿of￿the
aggregate￿amount￿of￿funding￿owed￿under￿the￿relevant￿funding￿agreement.￿

• Commercial￿Agreement:￿On￿July￿9,￿2012,￿ASML￿and￿Intel￿entered￿into￿the￿Commercial￿Agreement,￿pursuant￿to

which￿ASML￿and￿Intel￿established￿a￿contractual￿framework￿for￿Intel￿to￿purchase￿equipment￿related￿to￿the￿450mm
and￿next-generation￿EUV￿lithography￿equipment.￿Under￿this￿agreement,￿Intel￿has￿committed￿to￿purchase￿specified
numbers￿of￿450mm￿and￿EUV￿tools.￿The￿agreement￿sets￿forth￿pricing￿terms￿for￿the￿tools￿as￿well￿as￿milestones￿related
to￿product￿deliveries,￿and￿provides￿for￿certain￿commercial￿discounts￿in￿the￿form￿of￿credits￿in￿exchange￿for￿Intel’s
early￿purchase￿commitments￿and￿volume￿purchase￿commitments￿and￿for￿specified￿additional￿credits￿in￿the￿event
that￿certain￿schedules￿are￿not￿met.￿In￿addition,￿subject￿to￿certain￿conditions,￿ASML￿has￿agreed￿to￿install￿sufficient
capacity￿to￿meet￿Intel’s￿forecasted￿450mm￿lithography￿equipment￿needs￿through￿2022.

The￿total￿net￿sales￿to￿Intel￿(and￿its￿affiliates)￿for￿the￿period￿from￿July￿9,￿2012￿to￿December￿31,￿2012￿amounted￿to￿EUR
301.7￿million￿whereas￿the￿outstanding￿balances￿as￿of￿December￿31,￿2012￿amount￿to￿EUR￿65.0￿million.￿

Except￿for￿the￿above,￿there￿have￿been￿no￿transactions￿during￿our￿most￿recent￿fiscal￿year,￿and￿there￿are￿currently￿no
transactions,￿between￿ASML￿or￿any￿of￿its￿subsidiaries,￿and￿any￿other￿significant￿shareholder￿and￿any￿director￿or￿officer

ASML￿ANNUAL￿REPORT￿2012

F-53

or￿any￿relative￿or￿spouse￿thereof￿other￿than￿ordinary￿course￿compensation￿arrangements.￿During￿our￿most￿recent￿fiscal
year,￿there￿has￿been￿no,￿and￿at￿present￿there￿is￿no,￿outstanding￿indebtedness￿to￿ASML￿owed￿or￿owing￿by￿any￿director￿or
officer￿of￿ASML￿or￿any￿associate￿thereof,￿other￿than￿the￿virtual￿financing￿arrangement￿with￿respect￿to￿shares￿and￿stock
options￿as￿described￿under￿Note￿17.￿All￿amounts￿due￿to￿ASML￿under￿the￿virtual￿financing￿arrangement￿were￿repaid
during￿2012.

30. Subsequent Events
On￿february￿5,￿2013,￿the￿Cymer￿Stockholders￿approved￿the￿previously￿announced￿merger￿agreement,￿dated￿October￿16,
2012￿at￿the￿special￿meeting￿of￿Cymer￿Stockholders.￿See￿Note￿25￿for￿additional￿information.

Veldhoven,￿the￿Netherlands

February￿12,￿2013

￿

￿

￿/s/￿Eric￿Meurice,
Eric￿Meurice,￿Chief￿Executive￿Officer

￿￿

￿

￿/s/￿Peter￿T.F.M.￿Wennink,
Peter￿T.F.M.￿Wennink,￿Chief￿Financial￿Officer

ASML￿ANNUAL￿REPORT￿2012

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Report of Independent Registered Public Accounting Firm
To￿the￿Supervisory￿Board￿and￿Shareholders￿of￿ASML￿Holding￿N.V.:

We￿have￿audited￿the￿accompanying￿consolidated￿balance￿sheets￿of￿ASML￿Holding￿N.V.￿and￿subsidiaries￿(collectively,￿the
"Company")￿as￿of￿December￿31,￿2012￿and￿2011,￿and￿the￿related￿consolidated￿statements￿of￿operations,￿comprehensive
income,￿shareholders'￿equity,￿and￿cash￿flows￿for￿each￿of￿the￿three￿years￿in￿the￿period￿ended￿December￿31,￿2012￿(all
expressed￿in￿euros).￿We￿also￿have￿audited￿the￿Company's￿internal￿control￿over￿financial￿reporting￿as￿of￿December￿31,
2012,￿based￿on￿criteria￿established￿in￿Internal￿Control￿—￿Integrated￿Framework￿issued￿by￿the￿Committee￿of￿Sponsoring
Organizations￿of￿the￿Treadway￿Commission.￿The￿Company's￿management￿is￿responsible￿for￿these￿financial￿statements,
for￿maintaining￿effective￿internal￿control￿over￿financial￿reporting,￿and￿for￿its￿assessment￿of￿the￿effectiveness￿of￿internal
control￿over￿financial￿reporting,￿included￿in￿the￿accompanying￿Management’s￿Report￿on￿Internal￿Control￿over￿Financial
Reporting.￿Our￿responsibility￿is￿to￿express￿an￿opinion￿on￿these￿financial￿statements￿and￿an￿opinion￿on￿the￿Company's
internal￿control￿over￿financial￿reporting￿based￿on￿our￿audits.

We￿conducted￿our￿audits￿in￿accordance￿with￿the￿standards￿of￿the￿Public￿Company￿Accounting￿Oversight￿Board￿(United
States).￿Those￿standards￿require￿that￿we￿plan￿and￿perform￿the￿audit￿to￿obtain￿reasonable￿assurance￿about￿whether￿the
financial￿statements￿are￿free￿of￿material￿misstatement￿and￿whether￿effective￿internal￿control￿over￿financial￿reporting￿was
maintained￿in￿all￿material￿respects.￿Our￿audits￿of￿the￿financial￿statements￿included￿examining,￿on￿a￿test￿basis,￿evidence
supporting￿the￿amounts￿and￿disclosures￿in￿the￿financial￿statements,￿assessing￿the￿accounting￿principles￿used￿and
significant￿estimates￿made￿by￿management,￿and￿evaluating￿the￿overall￿financial￿statement￿presentation.￿Our￿audit￿of
internal￿control￿over￿financial￿reporting￿included￿obtaining￿an￿understanding￿of￿internal￿control￿over￿financial￿reporting,
assessing￿the￿risk￿that￿a￿material￿weakness￿exists,￿and￿testing￿and￿evaluating￿the￿design￿and￿operating￿effectiveness
of￿internal￿control￿based￿on￿the￿assessed￿risk.￿Our￿audits￿also￿included￿performing￿such￿other￿procedures￿as￿we
considered￿necessary￿in￿the￿circumstances.￿We￿believe￿that￿our￿audits￿provide￿a￿reasonable￿basis￿for￿our￿opinions.

A￿company's￿internal￿control￿over￿financial￿reporting￿is￿a￿process￿designed￿by,￿or￿under￿the￿supervision￿of,￿the
company's￿principal￿executive￿and￿principal￿financial￿officers,￿or￿persons￿performing￿similar￿functions,￿and￿effected￿by
the￿company's￿board￿of￿directors,￿management,￿and￿other￿personnel￿to￿provide￿reasonable￿assurance￿regarding￿the
reliability￿of￿financial￿reporting￿and￿the￿preparation￿of￿financial￿statements￿for￿external￿purposes￿in￿accordance￿with
generally￿accepted￿accounting￿principles.￿A￿company's￿internal￿control￿over￿financial￿reporting￿includes￿those￿policies
and￿procedures￿that￿(1)￿pertain￿to￿the￿maintenance￿of￿records￿that,￿in￿reasonable￿detail,￿accurately￿and￿fairly￿reflect
the￿transactions￿and￿dispositions￿of￿the￿assets￿of￿the￿company;￿(2)￿provide￿reasonable￿assurance￿that￿transactions￿are
recorded￿as￿necessary￿to￿permit￿preparation￿of￿financial￿statements￿in￿accordance￿with￿generally￿accepted￿accounting
principles,￿and￿that￿receipts￿and￿expenditures￿of￿the￿company￿are￿being￿made￿only￿in￿accordance￿with￿authorizations
of￿management￿and￿directors￿of￿the￿company;￿and￿(3)￿provide￿reasonable￿assurance￿regarding￿prevention￿or￿timely
detection￿of￿unauthorized￿acquisition,￿use,￿or￿disposition￿of￿the￿company's￿assets￿that￿could￿have￿a￿material￿effect￿on
the￿financial￿statements.

Because￿of￿the￿inherent￿limitations￿of￿internal￿control￿over￿financial￿reporting,￿including￿the￿possibility￿of￿collusion
or￿improper￿management￿override￿of￿controls,￿material￿misstatements￿due￿to￿error￿or￿fraud￿may￿not￿be￿prevented￿or
detected￿on￿a￿timely￿basis.￿Also,￿projections￿of￿any￿evaluation￿of￿the￿effectiveness￿of￿the￿internal￿control￿over￿financial
reporting￿to￿future￿periods￿are￿subject￿to￿the￿risk￿that￿the￿controls￿may￿become￿inadequate￿because￿of￿changes￿in
conditions,￿or￿that￿the￿degree￿of￿compliance￿with￿the￿policies￿or￿procedures￿may￿deteriorate.

In￿our￿opinion,￿the￿consolidated￿financial￿statements￿referred￿to￿above￿present￿fairly,￿in￿all￿material￿respects,￿the
financial￿position￿of￿ASML￿Holding￿N.V.￿and￿subsidiaries￿as￿of￿December￿31,￿2012￿and￿2011,￿and￿the￿results￿of￿their
operations￿and￿their￿cash￿flows￿for￿each￿of￿the￿three￿years￿in￿the￿period￿ended￿December￿31,￿2012,￿in￿conformity￿with
accounting￿principles￿generally￿accepted￿in￿the￿United￿States￿of￿America.￿Also,￿in￿our￿opinion,￿the￿Company￿maintained,
in￿all￿material￿respects,￿effective￿internal￿control￿over￿financial￿reporting￿as￿of￿December￿31,￿2012,￿based￿on￿the￿criteria
established￿in￿Internal￿Control￿—￿Integrated￿Framework￿issued￿by￿the￿Committee￿of￿Sponsoring￿Organizations￿of￿the
Treadway￿Commission.

/s/￿Deloitte￿Accountants￿B.V.

Eindhoven,￿The￿Netherlands

February￿12,￿2013

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Exhibits

Exhibit Index

Exhibit No.
1

  Description
￿ Articles￿of￿Association￿of￿ASML￿Holding￿N.V.￿(English￿translation)￿(Incorporated￿by￿reference￿to￿Amendment￿No.￿13￿to￿the

Registrant’s,￿Registration￿Statement￿on￿Form￿8-A/A,￿filed￿with￿the￿Commission￿on￿February￿8,￿2013)

2.1

￿ Fiscal￿Agency￿Agreement￿between￿ASML￿Holding￿N.V.,￿Deutsche￿Bank￿AG,￿London￿Branch￿and￿Deutsche￿Bank

Luxembourg￿S.A.￿relating￿to￿the￿Registrant’s￿5.75￿percent￿Notes￿due￿2017￿(Incorporated￿by￿reference￿to￿the￿Registrant’s
Annual￿Report￿for￿the￿year￿ended￿December￿31,￿2008)

4.1

4.2

4.3

4.4

4.5

4.6

4.7

4.8

4.9

4.10

4.11

4.12

4.13

4.14

4.15

4.16

￿ Agreement￿between￿ASM￿Lithography￿B.V.￿and￿Carl￿Zeiss,￿dated￿March￿17,￿2000￿(Incorporated￿by￿reference￿to￿the

Registrant’s￿Annual￿Report￿on￿Form￿20-F￿for￿the￿fiscal￿year￿ended￿December￿31,￿2000)￿1

￿ Agreement￿between￿ASML￿Holding￿N.V.￿and￿Carl￿Zeiss,￿dated￿October￿24,￿2003￿(Incorporated￿by￿reference￿to￿the

Registrant’s￿Annual￿Report￿on￿Form￿20-F￿for￿the￿year￿ended￿December￿31,￿2003)￿1

￿ Form￿of￿Indemnity￿Agreement￿between￿ASML￿Holding￿N.V.￿and￿members￿of￿its￿Board￿of￿Management￿(Incorporated￿by

reference￿to￿the￿Registrant’s￿Annual￿Report￿on￿Form￿20-F￿for￿the￿year￿ended￿December￿31,￿2003)

￿ Form￿of￿Indemnity￿Agreement￿between￿ASML￿Holding￿N.V.￿and￿members￿of￿its￿Supervisory￿Board￿(Incorporated￿by

reference￿to￿the￿Registrant’s￿Annual￿Report￿on￿Form￿20-F￿for￿the￿year￿ended￿December￿31,￿2003)

￿ Form￿of￿Employment￿Agreement￿for￿members￿of￿the￿Board￿of￿Management￿(Incorporated￿by￿reference￿to￿the￿Registrant’s

Annual￿Report￿on￿Form￿20-F￿for￿the￿fiscal￿year￿ended￿December￿31,￿2003)

￿ Nikon-ASML￿Patent￿Cross-License￿Agreement,￿dated￿December￿10,￿2004,￿between￿ASML￿Holding￿N.V.￿and￿Nikon
Corporation￿(Incorporated￿by￿reference￿to￿the￿Registrant’s￿Annual￿Report￿on￿Form￿20-F￿for￿the￿fiscal￿year￿ended
December￿31,￿2004)￿1

￿ ASML/Zeiss￿Sublicense￿Agreement,￿2004,￿dated￿December￿10,￿2004,￿between￿Carl￿Zeiss￿SMT￿AG￿and￿ASML￿Holding￿N.V.
(Incorporated￿by￿reference￿to￿the￿Registrant’s￿Annual￿Report￿on￿Form￿20-F￿for￿the￿fiscal￿year￿ended￿December￿31,￿2004)￿1

￿ ￿ASML￿New￿Hires￿and￿Incentive￿Stock￿Option￿Plan￿For￿Management￿(Version￿2003)￿(Incorporated￿by￿reference￿to￿the

Registrant’s￿Statement￿on￿Form￿S-8,￿filed￿with￿the￿Commission￿on￿September￿2,￿2003￿(File￿No.￿333-109154))

￿ ￿ASML￿Incentive￿and￿New￿Hire￿Option￿Plan￿for￿Board￿of￿Management￿(Incorporated￿by￿reference￿to￿the￿Registrant’s

Registration￿Statement￿on￿Form￿S-8,￿filed￿with￿the￿Commission￿on￿June￿9,￿2004￿(File￿No.￿333-116337))

￿ ￿ASML￿Option￿Plan￿for￿Management￿of￿ASML￿Holding￿Group￿Companies￿(Incorporated￿by￿reference￿to￿the￿Registrant’s

Registration￿Statement￿on￿Form￿S-8￿filed￿with￿the￿Commission￿on￿June￿30,￿2005￿(file￿No.￿333-126340))

￿ ￿ASML￿Stock￿Option￿Plan￿for￿New￿Hire￿Options￿granted￿to￿Members￿of￿the￿Board￿of￿Management￿(Version￿April￿2006)

(Incorporated￿by￿reference￿to￿the￿Registrant’s￿Registration￿Statement￿on￿Form￿S-8￿filed￿with￿the￿Commission￿on￿August￿7,
2006￿(file￿No.￿333-136362))

￿ ￿ASML￿Stock￿Option￿Plan￿for￿Incentive￿or￿New￿Hire￿Options￿granted￿to￿Senior￿and￿Executive￿Management￿(Version￿April
2006)￿(Incorporated￿by￿reference￿to￿the￿Registrant’s￿Registration￿Statement￿on￿Form￿S-8￿filed￿with￿the￿Commission￿on
August￿7,￿2006￿(file￿No.￿333-136362))

￿ ￿ASML￿Stock￿Option￿Plan￿for￿Incentive￿or￿New￿Hire￿Options￿granted￿to￿Senior￿and￿Executive￿Management￿(Version￿July
2006)￿(Incorporated￿by￿reference￿to￿the￿Registrant’s￿Registration￿Statement￿on￿Form￿S-8￿filed￿with￿the￿Commission￿on
August￿7,￿2006￿(file￿No.￿333-136362))

￿ ASML￿Stock￿Option￿Plan￿for￿Incentive￿or￿New￿Hire￿Options￿granted￿to￿Senior￿and￿Executive￿Management￿(Version
October￿2006)￿(Incorporated￿by￿reference￿to￿the￿Registrant’s￿Registration￿Statement￿on￿Form￿S-8￿filed￿with￿the
Commission￿on￿August￿7,￿2006￿(file￿No.￿333-136362))

￿ ASML￿Restricted￿Stock￿Plan￿(Incorporated￿by￿reference￿to￿the￿Registrant’s￿Registration￿Statement￿on￿Form￿S-8￿filed￿with

the￿Commission￿on￿March￿7,￿2007￿(file￿No.￿333-141125))

￿ ￿Brion￿Technologies,￿Inc.,￿2002￿Stock￿Option￿Plan￿(as￿amended￿on￿March￿25,￿2005;￿March￿24,￿2006;￿and￿November￿17,
2006)￿(Incorporated￿by￿reference￿to￿the￿Registrant’s￿Registration￿Statement￿on￿Form￿S-8￿filed￿with￿the￿Commission￿on
April￿20,￿2007￿(file￿No.￿333-142254))

4.17

￿ ASML￿Stock￿Option￿Plan￿for￿Incentive￿or￿New￿Hire￿Options￿granted￿to￿Senior￿and￿Executive￿Management￿(Version￿January

4.18

4.19

4.20

4.21

4.22

4.23

4.24

4.25

4.26

4.27

4.28

2007)￿(Incorporated￿by￿reference￿to￿the￿Registrant’s￿Registration￿Statement￿on￿Form￿S-8￿filed￿with￿the￿Commission￿on
July￿5,￿2007￿(file￿No.￿333-144356))

￿ ASML￿Stock￿Option￿Plan￿for￿Incentive￿or￿New￿Hire￿Options￿granted￿to￿Senior￿and￿Executive￿Management￿(Version￿April
2007)￿(Incorporated￿by￿reference￿to￿the￿Registrant’s￿Registration￿Statement￿on￿Form￿S-8￿filed￿with￿the￿Commission￿on
July￿5,￿2007￿(file￿No.￿333-144356))

￿ ASML￿Stock￿Option￿Plan￿for￿Incentive￿or￿New￿Hire￿Options￿granted￿to￿Senior￿and￿Executive￿Management￿(Version￿July
2007)￿(Incorporated￿by￿reference￿to￿the￿Registrant’s￿Registration￿Statement￿on￿Form￿S-8￿filed￿with￿the￿Commission￿on
July￿5,￿2007￿(file￿No.￿333-144356))

￿ ASML￿Stock￿Option￿Plan￿for￿Incentive￿or￿New￿Hire￿Options￿granted￿to￿Senior￿and￿Executive￿Management￿(Version
October￿2007)￿(Incorporated￿by￿reference￿to￿the￿Registrant’s￿Registration￿Statement￿on￿Form￿S-8￿filed￿with￿the
Commission￿on￿July￿5,￿2007￿(file￿No.￿333-144356))

￿ ASML￿Performance￿Stock￿Plan￿for￿Members￿of￿the￿Board￿of￿Management￿(Version￿1)￿(Incorporated￿by￿reference￿to￿the

Registrant’s￿Registration￿Statement￿on￿Form￿S-8￿filed￿with￿the￿Commission￿on￿July￿5,￿2007￿(file￿No.￿333-144356))

￿ ASML￿Performance￿Stock￿Option￿Plan￿for￿Members￿of￿the￿Board￿of￿Management￿(Version￿2)￿(Incorporated￿by￿reference￿to

the￿Registrant’s￿Registration￿Statement￿on￿Form￿S-8￿filed￿with￿the￿Commission￿on￿July￿5,￿2007￿(file￿No.￿333-144356))
￿ ASML￿Stock￿Option￿Plan￿from￿Base￿Salary￿for￿Senior￿&￿Executive￿Management￿(Version￿October￿2007)￿(Incorporated￿by

reference￿to￿the￿Registrant’s￿Registration￿Statement￿on￿Form￿S-8￿filed￿with￿the￿Commission￿on￿November￿2,￿2007￿(file￿No.
333-147128))

￿ ASML￿Performance￿Stock￿Option￿Plan￿for￿Senior￿and￿Executive￿Management￿(version￿1)￿(Incorporated￿by￿reference￿to￿the

Registrant’s.￿Registration￿Statement￿on￿Form￿S-8￿filed￿with￿the￿Commission￿on￿August￿29,￿2008￿(file￿No.￿333-153277))

￿ ASML￿Performance￿Share￿Plan￿for￿Senior￿and￿Executive￿Management￿(version￿1)￿(Incorporated￿by￿reference￿to￿the

Registrant’s￿Registration￿Statement￿on￿Form￿S-8￿filed￿with￿the￿Commission￿on￿August￿29,￿2008￿(file￿No.￿333-153277))

￿ ASML￿Restricted￿Stock￿Plan￿(version￿2)￿(Incorporated￿by￿reference￿to￿the￿Registrant’s￿Registration￿Statement￿on￿Form￿S-8

filed￿with￿the￿Commission￿on￿August￿29,￿2008￿(file￿No.￿333-153277))

￿ ASML￿Performance￿Stock￿Plan￿for￿Members￿of￿the￿Board￿of￿Management￿(Incorporated￿by￿reference￿to￿the￿Registrant’s

Registration￿Statement￿on￿Form￿S-8￿filed￿with￿the￿Commission￿on￿October￿13,￿2009￿(file￿No.￿333-162439))

￿ ASML￿Performance￿Stock￿Option￿Plan￿for￿Senior￿and￿Executive￿Management￿(version￿1)￿(Incorporated￿by￿reference￿to￿the
Registrant’s.￿Registration￿Statement￿on￿Form￿S-8￿filed￿with￿the￿Commission￿on￿October￿13,￿2009￿(file￿No.￿333-162439))

Exhibit No.
4.29

  Description
￿ ASML￿Performance￿Share￿Plan￿for￿Senior￿and￿Executive￿Management￿(version￿1)￿(Incorporated￿by￿reference￿to￿the

4.30

4.31
4.32
4.33
4.34

4.35

8.1
12.1
13.1

Registrant’s￿Registration￿Statement￿on￿Form￿S-8￿filed￿with￿the￿Commission￿on￿October￿13,￿2009￿(file￿No.￿333-162439))

￿ ASML￿Share￿and￿Option￿Purchase￿Plan￿for￿Employees￿(Incorporated￿by￿reference￿to￿the￿Registrant’s￿Registration

Statement￿on￿Form￿S-8￿filed￿with￿the￿Commission￿on￿October￿20,￿2010￿(file￿No.￿333-170034))
￿ Investment￿Agreement￿between￿ASML￿Holding￿N.V.￿and￿Intel￿Corporation,￿dated￿July￿9,￿2012￿2
￿ 450mm￿NRE￿Funding￿Agreement￿between￿ASML￿Holding￿N.V.,￿and￿Intel￿Corporation,￿dated￿July￿9,￿20121,￿2
￿ EUV￿NRE￿Funding￿Agreement￿between￿ASML￿Holding￿N.V.,￿and￿Intel￿Corporation,￿dated￿July￿9,￿20121,￿2
￿ Shareholder￿Agreement￿between￿ASML￿Holding￿N.V.￿and￿Intel￿Holdings￿B.V.,￿Intel￿Corporation￿and￿Stichting

Administratiekantoor￿MAKTSJAB￿dated￿September￿12,￿2012￿2

￿ Agreement￿and￿Plan￿of￿Merger￿by￿and￿among￿ASML￿Holding￿N.V.,￿Kona￿Acquisition￿Company,￿Inc.￿Cymer,￿Inc.￿and

certain￿other￿parties￿set￿forth￿therein,￿date￿October￿16,￿2012￿(incorporated￿by￿reference￿to￿Annex￿A￿to￿the￿Registrant's
Registration￿Statement￿on￿Form￿F-4￿filed￿with￿the￿Commission￿on￿November￿21,￿2012￿(file￿No.￿333-185120))

￿ List￿of￿Main￿Subsidiaries￿2
￿ Certification￿of￿CEO￿and￿CFO￿Pursuant￿to￿Rule￿13a-14(a)￿of￿the￿Securities￿Exchange￿Act￿of￿1934￿2
￿ Certification￿of￿CEO￿and￿CFO￿Pursuant￿to￿Rule￿13a-14(b)￿of￿the￿Securities￿Exchange￿Act￿of￿1934￿and￿18￿U.S.C.￿Section

1350￿as￿Adopted￿Pursuant￿to￿Section￿906￿of￿the￿Sarbanes-Oxley￿Act￿of￿2002￿2

15.1
101.INS
101.SCH
101.CAL
101.DEF
101.LAB
101.PRE

￿ Consent￿of￿Deloitte￿Accountants￿B.V.2
￿ XBRL￿Instance￿Document￿2
￿ XBRL￿Taxonomy￿Extension￿Schema￿Document￿2
￿ XBRL￿Taxonomy￿Extension￿Calculation￿Linkbase￿Document￿2
￿ XBRL￿Taxonomy￿Extension￿Definition￿Linkbase￿Document￿2
￿ XBRL￿Taxonomy￿Extension￿Label￿Linkbase￿Document￿2
￿ XBRL￿Taxonomy￿Extension￿Presentation￿Linkbase￿Document￿2

1￿Certain￿information￿omitted￿pursuant￿to￿a￿request￿for￿confidential￿treatment￿filed￿separately￿with￿the￿Securities￿and￿Exchange￿Commission.

2￿Filed￿at￿the￿Commission￿herewith.

￿

Exhibit 8.1

List of main subsidiaries

Legal Entity
￿
Main subsidiaries of ASML Holding N.V.1:
ASML￿Netherlands￿B.V.
ASML￿MaskTools￿B.V.
ASML￿Systems￿B.V.
ASML￿Motion￿B.V.2
ASML￿Motion￿Sub￿B.V.3
ASML￿Germany￿GmbH
ASML￿France￿S.a.r.l.
ASML￿(UK)￿Ltd.
ASML￿Israel￿(2001)￿Ltd.
ASML￿Ireland￿Ltd.
ASML￿Dublin￿Ltd.
ASML￿Italy￿S.r.l.
ASML￿Hong￿Kong￿Ltd.
ASML￿Singapore￿Pte.￿Ltd.
ASML￿Korea￿Co.￿Ltd.
ASML￿Japan￿Co.￿Ltd.
ASML￿Lithography￿Facilities￿Science￿and￿Technology￿Co.￿Ltd.
ASML￿Taiwan￿Ltd.
ASML￿Equipment￿Malaysia￿Sdn.￿Bhd.
ASML￿Belgium￿BVBA
ASML￿Belgium￿Finance￿CV
Brion￿Technologies￿(Shenzhen)￿Co.￿Ltd.
Brion￿Technologies,￿Inc.
ASML￿US,￿Inc.
ASML￿Capital￿US,￿Inc
ASML￿MaskTools,￿Inc.
ASML￿Participations￿US￿Inc.
Lehrer￿Pearson,￿Inc.
ASML￿Ventures￿1,￿Inc.
Kona￿Acquisition￿Company,￿Inc.
Kona￿Technologies,￿LCC
eLith￿LLC.
ASML￿Hong￿Kong￿Logistic￿Services￿Ltd.

Country of Incorporation
￿
￿
Netherlands￿(Veldhoven)
Netherlands￿(Veldhoven)
Netherlands￿(Veldhoven)
Netherlands￿(Oirschot)
Netherlands￿(Oirschot)
Germany￿(Dresden)
France￿(Montbonnot)
UK￿(Paisley￿(Scotland))
Israel￿(Ramat-Gan)
Ireland￿(Dublin)
Ireland￿(Dublin)
Italy￿(Avezzano)
Hong￿Kong￿SAR
Singapore
Korea￿(Kyunggi-Do)
Japan￿(Kawasaki-shi,￿Kanagawa-Ken)
China￿(Tianjin)
Taiwan￿(Hsinchu)
Malaysia￿(Penang)
Belgium￿(Essen)
Belgium￿(Essen)
China￿(Shenzhen)
US￿(Delaware)
US￿(Delaware)
US￿(Delaware)
US￿(Delaware)
US￿(Delaware)
US￿(Delaware)
US￿(Delaware)
US￿(Reno,￿Nevada)
US￿(Reno,￿Nevada)
US￿(Delaware)
Hong￿Kong￿SAR

1 All￿of￿our￿subsidiaries￿are￿(directly￿or￿indirectly)￿wholly-owned,￿with￿exception￿of￿Elith￿LLC,￿in￿which￿we￿hold￿an￿interest￿of￿50%.
2 Wijdeven￿Motion￿Holding￿B.V.￿was￿renamed￿to￿ASML￿Motion￿B.V.
3 Wijdeven￿Motion￿B.V.￿was￿renamed￿to￿ASML￿Motion￿Sub￿B.V.

Exhibit 12.1

Certification of the Chief Executive Officer

I,￿Eric￿Meurice,￿certify￿that:

1.￿I￿have￿reviewed￿this￿annual￿report￿on￿Form￿20-F￿of￿ASML￿Holding￿N.V.;

2.￿Based￿on￿my￿knowledge,￿this￿report￿does￿not￿contain￿any￿untrue￿statement￿of￿a￿material￿fact￿or￿omit￿to￿state￿a
material￿fact￿necessary￿to￿make￿the￿statements￿made,￿in￿light￿of￿the￿circumstances￿under￿which￿such￿statements￿were
made,￿not￿misleading￿with￿respect￿to￿the￿period￿covered￿by￿this￿report;

3.￿Based￿on￿my￿knowledge,￿the￿financial￿statements,￿and￿other￿financial￿information￿included￿in￿this￿report,￿fairly￿present
in￿all￿material￿respects￿the￿financial￿condition,￿results￿of￿operations￿and￿cash￿flows￿of￿the￿company￿as￿of,￿and￿for,￿the
periods￿presented￿in￿this￿report;

4.￿The￿company's￿other￿certifying￿officer(s)￿and￿I￿are￿responsible￿for￿establishing￿and￿maintaining￿disclosure￿controls
and￿procedures￿(as￿defined￿in￿Exchange￿Act￿Rules￿13a-15(e)￿and￿15d-15(e))￿and￿internal￿control￿over￿financial￿reporting
(as￿defined￿in￿Exchange￿Act￿Rules￿13a-15(f)￿and￿15d-15(f))for￿the￿company￿and￿have:
a)￿Designed￿such￿disclosure￿controls￿and￿procedures,￿or￿caused￿such￿disclosure￿controls￿and￿procedures￿to￿be
designed￿under￿our￿supervision,￿to￿ensure￿that￿material￿information￿relating￿to￿the￿company,￿including￿its￿consolidated
subsidiaries,￿is￿made￿known￿to￿us￿by￿others￿within￿those￿entities,￿particularly￿during￿the￿period￿in￿which￿this￿report￿is
being￿prepared;
b)￿Designed￿such￿internal￿control￿over￿financial￿reporting,￿or￿caused￿such￿internal￿control￿over￿financial￿reporting￿to￿be
designed￿under￿our￿supervision,￿to￿provide￿reasonable￿assurance￿regarding￿the￿reliability￿of￿financial￿reporting￿and￿the
preparation￿of￿financial￿statements￿for￿external￿purposes￿in￿accordance￿with￿generally￿accepted￿accounting￿principles;
c)￿Evaluated￿the￿effectiveness￿of￿the￿company’s￿disclosure￿controls￿and￿procedures￿and￿presented￿in￿this￿report￿our
conclusions￿about￿the￿effectiveness￿of￿the￿disclosure￿controls￿and￿procedures,￿as￿of￿the￿end￿of￿the￿period￿covered￿by
this￿report￿based￿on￿such￿evaluation;￿and
d)￿Disclosed￿in￿this￿report￿any￿change￿in￿the￿company’s￿internal￿control￿over￿financial￿reporting￿that￿occurred￿during
the￿period￿covered￿by￿the￿annual￿report￿that￿has￿materially￿affected,￿or￿is￿reasonably￿likely￿to￿materially￿affect,￿the
company’s￿internal￿control￿over￿financial￿reporting;￿and

5.￿The￿company’s￿other￿certifying￿officer(s)￿and￿I￿have￿disclosed,￿based￿on￿our￿most￿recent￿evaluation￿of￿internal￿control
over￿financial￿reporting,￿to￿the￿company’s￿auditors￿and￿the￿audit￿committee￿of￿the￿company's￿board￿of￿directors￿(or
persons￿performing￿the￿equivalent￿functions):
a)￿All￿significant￿deficiencies￿and￿material￿weaknesses￿in￿the￿design￿or￿operation￿of￿internal￿control￿over￿financial
reporting￿which￿are￿reasonably￿likely￿to￿adversely￿affect￿the￿company’s￿ability￿to￿record,￿process,￿summarize￿and￿report
financial￿information;￿and
b)￿Any￿fraud,￿whether￿or￿not￿material,￿that￿involves￿management￿or￿other￿employees￿who￿have￿a￿significant￿role￿in￿the
company’s￿internal￿control￿over￿financial￿reporting.

Date:￿February￿12,￿2013

￿

/s/￿Eric￿Meurice
Eric￿Meurice,￿Chief￿Executive￿Officer

Certification of the Chief Financial Officer

I,￿Peter￿T.F.M.￿Wennink,￿certify￿that:

1.￿I￿have￿reviewed￿this￿annual￿report￿on￿Form￿20-F￿of￿ASML￿Holding￿N.V.;

2.￿Based￿on￿my￿knowledge,￿this￿report￿does￿not￿contain￿any￿untrue￿statement￿of￿a￿material￿fact￿or￿omit￿to￿state￿a
material￿fact￿necessary￿to￿make￿the￿statements￿made,￿in￿light￿of￿the￿circumstances￿under￿which￿such￿statements￿were
made,￿not￿misleading￿with￿respect￿to￿the￿period￿covered￿by￿this￿report;

3.￿Based￿on￿my￿knowledge,￿the￿financial￿statements,￿and￿other￿financial￿information￿included￿in￿this￿report,￿fairly￿present
in￿all￿material￿respects￿the￿financial￿condition,￿results￿of￿operations￿and￿cash￿flows￿of￿the￿company￿as￿of,￿and￿for,￿the
periods￿presented￿in￿this￿report;

4.￿The￿company’s￿other￿certifying￿officer(s)￿and￿I￿are￿responsible￿for￿establishing￿and￿maintaining￿disclosure￿controls￿and
procedures￿(as￿defined￿in￿Exchange￿Act￿Rules￿13a-15(e)￿and￿15d-15(e))￿and￿internal￿control￿over￿financial￿reporting￿(as
defined￿in￿Exchange￿Act￿Rules￿13a-15(f)￿and￿15d-15(f))for￿the￿company￿and￿have:
a)￿Designed￿such￿disclosure￿controls￿and￿procedures,￿or￿caused￿such￿disclosure￿controls￿and￿procedures￿to￿be
designed￿under￿our￿supervision,￿to￿ensure￿that￿material￿information￿relating￿to￿the￿company,￿including￿its￿consolidated
subsidiaries,￿is￿made￿known￿to￿us￿by￿others￿within￿those￿entities,￿particularly￿during￿the￿period￿in￿which￿this￿report￿is
being￿prepared;
b)￿Designed￿such￿internal￿control￿over￿financial￿reporting,￿or￿caused￿such￿internal￿control￿over￿financial￿reporting￿to￿be
designed￿under￿our￿supervision,￿to￿provide￿reasonable￿assurance￿regarding￿the￿reliability￿of￿financial￿reporting￿and￿the
preparation￿of￿financial￿statements￿for￿external￿purposes￿in￿accordance￿with￿generally￿accepted￿accounting￿principles;
c)￿Evaluated￿the￿effectiveness￿of￿the￿company’s￿disclosure￿controls￿and￿procedures￿and￿presented￿in￿this￿report￿our
conclusions￿about￿the￿effectiveness￿of￿the￿disclosure￿controls￿and￿procedures,￿as￿of￿the￿end￿of￿the￿period￿covered￿by
this￿report￿based￿on￿such￿evaluation;￿and
d)￿Disclosed￿in￿this￿report￿any￿change￿in￿the￿company’s￿internal￿control￿over￿financial￿reporting￿that￿occurred￿during
the￿period￿covered￿by￿the￿annual￿report￿that￿has￿materially￿affected,￿or￿is￿reasonably￿likely￿to￿materially￿affect,￿the
company’s￿internal￿control￿over￿financial￿reporting;￿and

5.￿The￿company’s￿other￿certifying￿officer(s)￿and￿I￿have￿disclosed,￿based￿on￿our￿most￿recent￿evaluation￿of￿internal￿control
over￿financial￿reporting,￿to￿the￿company’s￿auditors￿and￿the￿audit￿committee￿of￿the￿company's￿board￿of￿directors￿(or
persons￿performing￿the￿equivalent￿functions):
a)￿All￿significant￿deficiencies￿and￿material￿weaknesses￿in￿the￿design￿or￿operation￿of￿internal￿control￿over￿financial
reporting￿which￿are￿reasonably￿likely￿to￿adversely￿affect￿the￿company’s￿ability￿to￿record,￿process,￿summarize￿and￿report
financial￿information;￿and
b)￿Any￿fraud,￿whether￿or￿not￿material,￿that￿involves￿management￿or￿other￿employees￿who￿have￿a￿significant￿role￿in￿the
company’s￿internal￿control￿over￿financial￿reporting.

￿

Date:￿February￿12,￿2013

￿

/s/￿Peter￿T.F.M.￿Wennink
Peter￿T.F.M.￿Wennink,￿Chief￿Financial￿Officer

Exhibit 13.1

Certification of CEO and CFO Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002

In￿connection￿with￿the￿Annual￿Report￿on￿Form￿20-F￿of￿ASML￿Holding￿N.V.￿(the￿“Company”)￿for￿the￿fiscal￿year￿ended
December￿31,￿2012￿as￿filed￿with￿the￿Securities￿and￿Exchange￿Commission￿on￿the￿date￿hereof￿(the￿“Report”),￿Eric
Meurice,￿as￿Chief￿Executive￿Officer￿of￿the￿Company,￿and￿Peter￿T.F.M.￿Wennink,￿as￿Chief￿Financial￿Officer￿of￿the
Company,￿each￿hereby￿certifies,￿pursuant￿to￿18￿U.S.C.￿Section￿1350,￿as￿adopted￿pursuant￿to￿Section￿906￿of￿the
Sarbanes-Oxley￿Act￿of￿2002,￿that,￿to￿the￿best￿of￿his￿knowledge:

(1)The￿Report￿fully￿complies￿with￿the￿requirements￿of￿Section￿13(a)￿or￿15(d)￿of￿the￿Securities￿Exchange￿Act￿of￿1934;￿and

(2)The￿information￿contained￿in￿the￿Report￿fairly￿presents,￿in￿all￿material￿respects,￿the￿financial￿condition￿and￿results￿of
operations￿of￿the￿Company.

￿

￿￿

/s/Eric￿Meurice
Name:￿Eric￿Meurice
Title:￿Chief￿Executive￿Officer

Date:￿February￿12,￿2013

￿

￿

/s/Peter￿T.F.M.￿Wennink
Name:￿Peter￿T.F.M.￿Wennink
Title:￿Chief￿Financial￿Officer

Date:￿February￿12,￿2013

A￿signed￿original￿of￿this￿written￿statement￿required￿by￿Section￿906￿of￿the￿Sarbanes-Oxley￿Act￿of￿2002￿has￿been￿provided
to￿the￿Company￿and￿will￿be￿retained￿by￿the￿Company￿and￿furnished￿to￿the￿Securities￿and￿Exchange￿Commission￿or￿its
staff￿upon￿request.

This￿certification￿accompanies￿the￿Report￿pursuant￿to￿section￿906￿of￿the￿Sarbanes-Oxley￿Act￿of￿2002￿and￿shall￿not,
except￿to￿the￿extent￿required￿by￿the￿Sarbanes-Oxley￿Act￿of￿2002,￿be￿deemed￿filed￿by￿the￿Company￿for￿purposes￿of
section￿18￿of￿the￿Securities￿Exchange￿Act￿of￿1934.

Exhibit 15.1

Consent of Independent Registered Public Accounting Firm

To￿the￿Supervisory￿Board￿and￿Shareholders￿of￿ASML￿Holding￿N.V.:

We￿consent￿to￿the￿incorporation￿by￿reference￿in￿the￿following￿Registration￿Statements￿on￿Form￿S-8￿(Nos.￿333-109154,
333-105600,￿333-116337,￿333-126340,￿333-136362,￿333-141125,￿333-142254,￿333-144356,￿333-147128,￿333-153277,
333-162439￿and￿333-170034)￿of￿our￿report￿dated￿February￿12,￿2013,￿relating￿to￿the￿financial￿statements￿of￿ASML
Holding￿N.V.￿and￿subsidiaries￿(collectively,￿the￿“Company”)￿and￿the￿effectiveness￿of￿the￿Company's￿internal￿control￿over
financial￿reporting,￿appearing￿in￿this￿Annual￿Report￿on￿Form￿20-F￿of￿the￿Company￿for￿the￿year￿ended￿December￿31,
2012.

￿

/s/￿Deloitte￿Accountants￿B.V.
Deloitte￿Accountants￿B.V.
Eindhoven,￿The￿Netherlands
February￿12,￿2013