ASML Holding N.V. — Annual Report 2012

Feb 13, 2013

Statutory Annual Report 2012

Statutory Annual Report 2012

Contents

• 1 Board of Management
• 2 Supervisory Board
• 3 Supervisory Board Report
• 11 Corporate Governance Paragraph
• 31 Management Board Report
• 55 Directors' Responsibility Statement
• 57 Statutory Financial Statements
• 125 Company Financial Statements
• 139 Other Information
• 143 Information and Investor Relations
• 145 ASML Worldwide Contact Information

Thisreportcomprisesregulatedinformationwithinthemeaningofarticles1:1and5:25coftheDutchFinancialMarkets SupervisionAct(WetophetFinancieelToezicht).

Inthisreportthename"ASML"issometimesusedforconvenienceincontextswherereference ismadetoASMLHoldingN.V.and/oranyofitssubsidiariesingeneral.Thenameisalsousedwhereno usefulpurposeisservedbyidentifyingtheparticularcompanyorcompanies.

©2013,ASMLHoldingN.V.AllRightsReserved

Board of Management

Eric Meurice (1956)

President,ChiefExecutiveOfficerand ChairmanoftheBoardofManagement Appointedin2004,reappointedin2012 Frenchnationality

Peter T.F.M. Wennink (1957)

ExecutiveVicePresident,ChiefFinancialOfficerand MemberoftheBoardofManagement Appointedin1999 Dutchnationality

Martin A. van den Brink (1957)

ExecutiveVicePresident,ChiefProductandTechnologyOfficerand MemberoftheBoardofManagement Appointedin1999 Dutchnationality

Frits J. van Hout (1960)

ExecutiveVicePresident,ChiefMarketingOfficerand MemberoftheBoardofManagement Appointedin2009 Dutchnationality

Frédéric J.M. Schneider-Maunoury (1961)

ExecutiveVicePresident,ChiefOperationsOfficerand MemberoftheBoardofManagement Appointedin2010 Frenchnationality

Supervisory Board

Arthur P.M. van der Poel (1948)

Chairman FormermemberoftheBoardofManagementofRoyalPhilipsElectronicsN.V. Firstappointed2004 Currenttermuntil2016 Dutchnationality

Jos W.B. Westerburgen (1942)

FormerCompanySecretaryandHeadofTaxofUnileverN.V.andPlc. Firstappointed2002 Currenttermuntil2013 Dutchnationality

Fritz W. Fröhlich (1942)

ViceChairman FormerDeputyChairmanandChiefFinancialOfficerofAkzoNobelN.V. Firstappointed2004 Currenttermuntil2014 Germannationality

Hendrika (Ieke) C.J. van den Burg (1952)

MemberoftheDutchMonitoringCommitteeCorporateGovernanceCode Firstappointed2005 Currenttermuntil2013 Dutchnationality

OB Bilous (1938)

FormerGeneralManagerandVicePresidentWorldwideManufacturingofIBM'sMicroelectronicsDivision Firstappointed2005 Currenttermuntil2014 UnitedStatesnationality

William T. Siegle (1939)

FormerSeniorVicePresidentandChiefScientistatAMD Firstappointed2007 Currenttermuntil2013 UnitedStatesnationality

Pauline F.M. van der Meer Mohr (1960)

PresidentoftheExecutiveBoardoftheErasmusUniversityRotterdam Firstappointed2009 Currenttermuntil2013 Dutchnationality

Wolfgang H. Ziebart (1950)

FormerPresidentandChiefExecutiveOfficerofInfineonTechnologiesA.G. Firstappointed2009 Currenttermuntil2013 Germannationality

Supervisory Board Report

Inthissectionofthe2012StatutoryAnnualReportofASMLHoldingN.V.("ASML"),theSupervisoryBoardreports onitsactivitiesin2012,andontheinformationrequiredtobeprovidedinthisreportbasedontheDutchCorporate GovernanceCode(the"Code").

Overview of 2012

2012wasanextraordinaryandchallengingyearforASML,especiallywiththeannouncementofourCustomerCo-InvestmentProgramonJuly9,2012andtheproposedmergerwithCymerInc.("Cymer")announcedonOctober17, 2012.Bothtransactionsareenteredintowiththemainpurposetoacceleratethedevelopmentofnextgeneration lithographytechnologies,wherebytheCCIPfocusesonExtremeUltravioletlithography("EUV")and450mm,andthe acquisitionofCymerisdonetoacceleratethedevelopmentandproductionofEUV.Bothtransactionswillrequire additionalresources,withveryspecificskills,andASMLisworkingveryhardonhiringthepeopleneeded.

TheCustomerCo-InvestmentProgramisanunprecedentedtransactioninthesemiconductorindustry,withthree ofASML'smajorcustomerscollaboratingwithASMLandjointlyfundingpartofthedevelopmentofnextgeneration lithography,andinadditionaligningtheeconomicinterestsofallstakeholdersthroughtheacquisitionofaminority shareholding(23.0percent)inASMLbyIntelCorporation("Intel"),TaiwanSemiconductorManufacturingCompanyLtd. ("TSMC")andSamsungElectronicsCorporation("Samsung")(collectivelyreferredtoas"theparticipatingcustomers").

ThetwotransactionswerediscussedextensivelyintheSupervisoryBoard,andmuchtimewasspentonthedetailsof thetransactions,theprogressofthenegotiations,andtheultimateapprovals.Forbothtransactions,theSupervisory Boardconsideredvariousfactors,amongothersthefundamentalobjectivesofthetransactions,thetermsofthe agreements,thetechnicalandfinancialbenefits,therisksofenteringand,vice-versa,notenteringintothetransactions. TheSupervisoryBoardalsoconsultedwithASML'soutsidefinancialandlegaladvisorstoobtainexpertadvice.

BothtransactionsarepartofASML'sstrategicdirectionforthecomingyears,asASML'smainfocusistomaintainand furtherdevelopASML'spositionasatechnologyleaderinsemiconductorlithography.Thegoalofthisstrategyisto deliverlithographysystemswhichenablecustomerstoproducehighestperformanceandlowestcostchips.Thevalue ofownershipofferedtocustomersasaresultofASML'sstrategyalsomaximizesASML'sownfinancialperformance, aligningtheinterestsofASMLandtheircustomers.

Otherchallengesin2012continuedtobethedevelopmentofandissuesrelatedtoEUV,thecontinuoussearchfor qualifiedresourceswiththeappropriatetechnicalskills,especiallyalsoinviewofthetransactionsdescribedaboveand thepotentialimpactonASMLofthecontinuingeconomiccrisis.

However,2012wasASML'ssecondbestyear,withnetsalesofEUR4,731.5millionandnetincomeofEUR1,302.3 million.

Anothertopicofdiscussionin2012wasthecompositionoftheSupervisoryBoard,inviewofthefactthat2members, Messrs.J.WesterburgenandW.Sieglewillresignperthe2013AnnualGeneralMeetingofShareholders("AGM"),and haveconfirmedthattheyarenotavailableforre-appointment.Mr.SieglewillbecomeaguestmemberoftheTechnology andStrategyCommittee,inviewofhisextensiveknowledgeandvastexperienceoflithographyforthesemiconductor industry.

Forthefulfillmentofthevacanciescaused,severalfactorsaretakenintoconsideration,amongotherstheintention includedintheSupervisoryBoard'sprofilefora30percentrepresentationofeachgenderinASML'sSupervisoryBoard, butalsospecificrequirementsincludedintheprofilesforthesepositions.ForthesuccessionofMr.Siegle,important requirementsrelatetorelevantknowledgeofandexperiencewithlithographyforthesemiconductorindustry.With respecttothefulfillmentofthevacancycausedbytheresignationofMr.Westerburgen,importantfactorsareknowledge ofandexperiencewithDutchfinancialandgovernancetopics.

InviewoftheterminationofMr.F.vanHout'sfirstfouryeartermasmemberofASML'sBoardofManagementperthe 2013AGM,theSupervisoryBoardalsodiscussedtheextensionofMr.vanHout'stenureasmemberofASML'sBoard ofManagement.ThedecisionwaspositiveandthenotificationoftheextensionofhismembershiponASML'sBoardof Managementwillbeputonthe2013AGMagenda.

ThenewlawonManagementandSupervision,whichenteredintoeffectperJanuary1,2013andwhichstipulates amongothersthatBoardmembersofLargeCompaniesarenotallowedtoenterintoemploymentagreementswithsuch companiesperthatdate,isnotapplicablewithrespecttoMr.VanHout'semploymentcontractwithASML,asMr.Van Hout'semploymentagreementhasanindefiniteterminviewofMr.VanHout'slongtermemploymentwithASML(from 2001until2009withASMLNetherlandsB.V.).

Meetings and activities of the Supervisory Board

TheSupervisoryBoardheldfive-scheduled-physicalmeetingsin2012;threescheduledconferencecallswereheld forthepurposeofdiscussingthequarterlyresultsandthepressreleasesrelatedtheretoandonecallwasspecifically heldforthepurposeoffinalapprovaloftheCCIP.Inaddition,ad-hoccallswereheldtodiscusstheprogressofthe transactions,alsobetweenindividualmembersoftheSupervisoryBoardandtheBoardofManagement.

WithrespecttotheSupervisoryBoardmeetingsingeneral,thephysicalmeetingsoftheSupervisoryBoardandits Committeesareheldduringseveraldays,thuscreatingmoretimeforlongermeetings.Theadditionaltimeavailableis spentonspecificthemes,suchasmanagementdevelopment,operationalperformanceandstrategy.

Tocontinuouslystayabreastofthedevelopmentsinthesemiconductormarket,theBoardofManagementprovides theSupervisoryBoardeachmeetingwithanoverviewofthemarketsituationatthatmoment,expectationsforthenear future,thedevelopmentofASML'ssharepriceandinvestor/analystfeedbackonASML.Othertopicsaddressedduring the2012SupervisoryBoardmeetingswereamongothersASML'sbusinessrisks;investorrelations;andthecorporate objectivesandtargets.Twiceperyear,ourbudgetisreviewedbytheSupervisoryBoard.

TheSupervisoryBoardalsoreviewedASML'ssustainabilitystrategy,includingtheactions(tobe)implemented neededtoachievethetargetssetwithrespecttothesustainabilitystrategy.Sustainabilitywasalsoaddressedinthe RemunerationCommitteeasitisashort-termqualitativetargetforthemembersoftheBoardofManagement.

Inthefallof2012,theSupervisoryBoardhelditsNovembermeetinginSanDiego,headquartersofCymer.

TheattendancerateoftheindividualSupervisoryBoardmemberswas100percent,withexceptionofMs.H.(Ieke) vandenBurg,whowasabsenttwiceinthefirst4monthsof2012duetoillness.Furthermore,themeetingsofthefour CommitteeswereattendedbyallmembersoftherespectiveCommittees,withtheexceptionofMs.VandenBurgforthe RemunerationCommitteeheldinJanuary.In2012,allSupervisoryBoardmembershadadequatetimeavailabletobe abletogivesufficientattentiontotheirresponsibilitiesandactivitiesasmemberofASML'sSupervisoryBoard.

Ingeneral,aftereachSupervisoryBoardmeeting,theSupervisoryBoardmembersmeetintersetodiscussforexample thefunctioningoftheSupervisoryBoardandoftheBoardofManagementanditsmembers;andanyothertopics deemedimportantatthattime,suchastheimminentchangesinthecompositionoftheSupervisoryBoard.

DuringallphysicalmeetingsoftheSupervisoryBoard,mostBoardofManagementmemberswerepresent.Alsooutside themeetings,membersoftheSupervisoryBoardanditsCommitteesinteractedregularlywiththeBoardofManagement andtheindividualmembers.Also,severalinformalmeetingsandtelephonecallstookplaceamongSupervisoryBoard memberstoconsultwitheachotheronvarioustopics.

Eachyear,theSupervisoryBoardandeachofitsCommitteesperformanevaluationrelatedtothefunctioningofthe SupervisoryBoard;itsCommittees,theindividualmembersandthechairman,aswellasthefunctioningoftheBoard ofManagementandtheindividualmembersinthepastyear.Alsothecompositionofbothbodiesisaddressed.In 2012,theevaluationoftheSupervisoryBoardwasdonebymeansofaquestionnaireaccessibleviaaweb-based tool,whichtoolisprovidedandmanagedbyathirdparty,whoalsopreparedreportsandsummariesoftheresults. ThereportsandsummariesarecollectedbythechairmanoftheSelectionandNominationCommittee.Thesereports areanonymizedtoprovidetheopportunitytoindividualSupervisoryBoardmemberstoaddresscertainissuesand concerns,whichtheyotherwisemightnotbewillingtodo.Inaddition,theChairmanalsohasone-on-onemeetings witheachindividualSupervisoryBoardmembertodiscussanyissuesthatthatmembermighthave.Thesurvey containedamongothersquestionsabouttheprocessesfollowedtodiscussthetwomajortransactionsin2012;the compositionoftheSupervisoryBoard;andtheprocessforselectionofcandidatesfortheSupervisoryBoardandBoard ofManagement.Inadditiontotheself-assessmentbytheSupervisoryBoardmembers,inputwasalsoaskedfromthe individualmembersoftheBoardofManagement.

TheevaluationofeachCommitteewasconductedbymeansofaquestionnairespecificallydevelopedforthat Committee,alsothroughtheweb-basedtoolofthesameexternalparty.Thesesurveysalsoincludedfollow-upthemes resultingfromtheevaluationsperformedinthepreviousyear.EachCommitteediscussedtheoutcomeoftheevaluation amongitsownmembers.ThemainconclusionsoftheevaluationoftheCommitteesandoftheSupervisoryBoardwere discussedinaSupervisoryBoardmeeting.Theconclusionsofthe'upwardassessment'bytheBoardofManagement werediscussedwiththemembersoftheBoardofManagementpresent.Focusitemsforthecomingyearrelateamong othersto:themeetingprocessesandtopics;interactionswithBoardofManagement/seniormanagement;attendance fromothers(ASMLemployeesorotherparties)atSupervisoryBoardmeetings;andtheevaluationprocesses,bothfor theSupervisoryBoardandtheBoardofManagement.

TheSupervisoryBoardhasembeddedtheevaluationprocessinitsprocessesandactivitiesastheSupervisoryBoard attachesgreatvaluetotheevaluations.Theyensurecontinuousfocusonthequalityoftheactivities,compositionand functioningoftheSupervisoryBoardanditsCommittees.

Furthermore,asisdoneeachyear,alsoin2012adelegationoftheSupervisoryBoardmettwicewiththeWorks CouncilofASMLNetherlandsB.V.Thetopicsofthesemeetingsgenerallyevolvearoundimportantinternalandexternal developmentsrelevantforASMLandtheiremployees,ASML'sfinancialpositionandASML'sstrategy.In2012,focus wasontheCCIPandthevariousEUVdevelopments.TheSupervisoryBoardconsidersthesemeetingsavaluable contributiontoitsactivitiesforASML.

Forfurtherdetailsonthestructure,organizationandresponsibilitiesoftheSupervisoryBoard,referenceismadetothe CorporateGovernanceParagraphofthisStatutoryAnnualReport.

Composition of the Supervisory Board

Currently,theSupervisoryBoardconsistsofeightmembers.FouroftheSupervisoryBoardmembershavetheDutch nationality,twomembershavetheGermannationalityandtwomembershavetheUnitedStatesnationality.Twoofthe eightSupervisoryBoardmembersarefemale.Theaverageageis66years,wherebytheagesvaryfrom52to74years.

In2012,Messrs.OBBilous,F.FröhlichandA.vanderPoelretiredbyrotationonApril25,2012.Messr.Bilousand Fröhlichwerebothreappointedforaperiodoftwoyears,inlinewiththeSupervisoryBoard'sprofile.Mr.VanderPoel wasre-appointedforamaximumperiodoffouryears.In2013,asmentionedabove,Messrs.WesterburgenandSiegle willretirefromtheSupervisoryBoardpertheAGMtobeheldonApril24,2013andarenotavailableforre-appointment. Inaddition,Mmes.VandenBurgandVanderMeerMohraswellasMr.W.Ziebartwillalsoretirebyrotationandallthree membershaveindicatedthattheyareavailableforre-appointment.Withrespecttothenominationforreappointmentof Mmes.VandenBurgandVanderMeerMohr,ASML'sWorksCouncilhasastrengthenedrecommendationright.

Supervisory Board Committees

TheSupervisoryBoardhasinstalledfourCommittees:anAuditCommittee,RemunerationCommittee,Selectionand NominationCommittee,andTechnologyandStrategyCommittee.EachCommitteeoperatespursuanttoitscharter, whichcharterisbasedontherulesandregulationsoftheCode,butalsoreflectspracticesdevelopedovertheyears. TheresponsibilitiesandauthoritiesoftheCommitteesarebasedonamandateoftheSupervisoryBoard,whereas theSupervisoryBoardretainsfullresponsibilityfortheactivitiesofthefourCommittees.TheCommitteespreparethe decisionstobemadebythefullSupervisoryBoard,eachinitsownfieldofexpertise.

IntheplenarySupervisoryBoardmeetings,theChairmanofeachCommitteeprovidesareport,verballyand/orin writing,onthetopicsdiscussedduringtheCommitteemeetings.Inaddition,theminutesoftheCommitteemeetingsare availableforallSupervisoryBoardmembers,sothattheyhaveallinformationsufficienttounderstandASML'scurrent stateofaffairs,thusensuringthatthefullSupervisoryBoardisabletomaketheappropriatedecisions.

Audit Committee

ThecurrentmembersofASML'sAuditCommitteeareMr.Fröhlich(Chairman),Mr.VanderPoelandMr.Ziebart.The membersoftheAuditCommitteeareallindependent,non-executivemembersoftheSupervisoryBoard.

In2012,theAuditCommitteemetfivetimesandheldfourconferencecalls.Threecallswereheldtodiscussthe quarterlyresultsandtherelatedpressrelease;onecallwasheldforthepurposeofdiscussingtheresultsoftheyearendaudits(AccountingPrinciplesGenerallyAcceptedintheUnitedStatesofAmerica("U.S.GAAP")andInternational FinancialReportingStandards("IFRS")asadoptedbytheEuropeanUnion("EU")).

TheAuditCommitteealsoextensivelydiscussedtheCustomerCo-InvestmentPogramtherebyfocusingnotonlyonthe financialaspectsofthistransaction,butalsoonthegovernanceaspects,suchasforexamplethevotingrightsofthe

threeparticipatingcustomers,whoacquireda23.0percentminorityinterestinASML.Withrespecttothegovernance aspectsoftheCCIP,theAuditCommitteeconsultedanexternalexpert.

WithrespecttotheintendedmergerwithCymer,theAuditCommitteefocusedontheconsiderationtobepaidtothe Cymershareholders,aswellastheimpactofthemergeronASML'sfinancialconditionandresultsofoperations.

Ingeneral,theAuditCommitteecontinuouslymonitorstheactivitiesoftheinternalauditdepartmentwithrespectto ASML'sriskmanagementandASML'sinternalcontrols,includingtheinternalcontrolsoverfinancialreportinginlight ofSection404oftheSarbanes-OxleyActof2002.TheAuditCommitteereviewsandapprovestheauditplansofthe internalandexternalauditorsandmonitorstheirauditactivities.Annually,theAuditCommitteereviewsASML'stax strategy,taxsystemsandtaxplanning;investorrelations;ASML'smanagementoftheITlandscape;andtheactivities ofASML'sDisclosureCommittee.TheAuditCommitteealsoregularlydiscussesASML'sfinancialposition,andASML's financingandreturnpolicy.

TheAuditCommittee(andSupervisoryBoard)agreewithASML'sconservativeprincipleswithrespecttoitsfinancing policyandreturnpolicy,whichhelpsASMLtorespondproperlytothehighlycyclicalnatureofthesemiconductor equipmentindustry.

Withrespecttotheexternalauditor'sManagementLetteroverthefinancialyear2012,theAuditCommitteeconfirms thatnoremarksweremadeintheManagementLetterthatshouldbementionedinthisreport.

Ascommunicatedinthe2011AnnualReport,theAuditCommitteeresolvedtoconductextensiveassessmentswith respecttotheperformanceoftheexternalauditoronabi-annualbasis.Asthisextensiveassessmentwasconducted end2011/early2012,theAuditCommitteewillonlyconductalimitedassessmentoverthepastyearafterfinalization oftheauditoverthefinancialyear2012,bymeansofadiscussionwithmembersoftheBoardofManagementand relevantmembersofseniormanagementofASML.Inanumberofmeetings,thechangesinthelawsrelatedtotheaudit professionandthepotentialconsequencesforexternalauditorsingeneralandforASML'sexternalauditorspecifically werediscussed.

Theannualproposaltore-appointtheauditorwillbesubmittedforapprovaltothe2013AGM.

Selection and Nomination Committee

ThecurrentmembersofASML'sSelectionandNominationCommittee("SNC")areMr.Westerburgen(Chairman),Mr. BilousandMr.VanderPoel.TheSelectionandNominationCommitteeheldfourscheduledmeetingsandseveral additionalmeetingsonanad-hocbasisin2012.Asalreadypreviouslymentioned,theSelectionandNomination CommitteepreparedthedecisionfortheSupervisoryBoardtoextendtheappointmenttermofMr.VanHout,andalso extensivelydiscussedthecompositionoftheSupervisoryBoardinviewofthevacancieswhichwillbecreatedby theresignationofMessrs.SiegleandWesterburgeninApril2013.Besides,theSNCalsopaidsubstantialattentionto thefuturecompositionoftheSupervisoryBoardandtheBoardofManagement.Otherdiscussionitemsin2012were the'regular'topicssuchasmanagementdevelopmentandtalentmanagement;andthefunctioningoftheindividual membersoftheSupervisoryBoardandtheBoardofManagement.

TheSelectionandNominationCommitteeisalsoresponsibleformonitoringCorporateGovernancedevelopments.The maintopicsofdiscussionthisyearwithrespecttothattopicwerethepossibleconsequencesforASML'sBoardof ManagementandSupervisoryBoardinviewoftheexpectedenactmentoftheBillonManagementandSupervisionon January1,2013;andthe2012reportoftheMonitoringCommitteeoftheDutchCorporateGovernanceCode.

Remuneration Committee

ThecurrentmembersofASML'sRemunerationCommitteeareMr.Westerburgen(Chairman),Ms.VandenBurgandMs. VanderMeerMohrandMr.Ziebart(perApril2012).Mr.ZiebartwasappointedmemberoftheRemunerationCommittee alsoinviewofMr.Westerburgen'sretirementpertheAGMinApril2013.

In2012,theRemunerationCommitteemetsixtimesinscheduledmeetings,eitherinpersonorviaconferencecall.In addition,membersoftheRemunerationCommitteeparticipatedseveraltimesinremunerationcommitteeworkinggroup meetings.Themainitemdiscussedin2012wastherevisionofthe2010RemunerationPolicy.Aworkinggroup,inwhich alsoanexternalexpertparticipated,preparedtherevised2010RemunerationPolicyasapprovedbytheSupervisory Boardandwhichwillbesubmittedforadoptiontothe2013AGM.Referenceismadetotheparagraphbelowonthe remunerationfortheBoardofManagementandtheoutlineofthe2012RemunerationReportformoredetailsonthis topic.

Othertopicsdiscussedin2012included:theshareandoptionplansfortheemployees;thetargetsandremuneration packagefortheBoardofManagement;andthe2011and2012RemunerationReports.

IncooperationwiththeAuditCommitteeandtheTechnologyandStrategyCommittee,theRemunerationCommittee reviewedandproposedtotheSupervisoryBoardthe2012targetsfortheBoardofManagementandalsoprovidedits recommendationstotheSupervisoryBoardwithrespecttotheachievementofthe2012targetsandrelatedappropriate compensationlevelsfortheBoardofManagementmembersoverthefinancialyear2012.

LegalexpertsaswellasexpertsinthefieldofremunerationformembersofBoardsofManagementassisted theRemunerationCommitteeinitsactivities.TheseexpertsdonotprovideremunerationadvicetotheBoardof Management.

Technology and Strategy Committee

ThecurrentmembersofASML'sTechnologyandStrategyCommitteeareMr.Siegle(Chairman),Mr.Bilous,Mr.Van derPoelandMr.Ziebart.Inaddition,theTechnologyandStrategyCommitteemayappointoneormoreadvisorsfrom withinand/orfromoutsideASML.In2012threeexternaladvisorsparticipatedintheCommitteemeetingsandtwo internaladvisors.TheadvisorstotheTechnologyandStrategyCommitteemaybeinvitedasgueststo(partsof)the meetingsoftheCommittee,butarenotentitledtovoteinthemeetings.TheTechnologyandStrategyCommitteeheld fivephysicalmeetingsandoneconferencecallin2012.Ingeneral,thephysicalmeetingslastafullday.Onemeeting andtheconferencecallwereheldforthepurposeofdiscussingthetechnologytargetsfortheBoardofManagement andtheachievementsrelatedthereto.

TheTechnologyandStrategyCommitteereviewsthespecificASMLtechnologymattersimportantatthattimeand discussestheproposalsforASML'sfutureproduct-andtechnologystrategies.TheTechnologyandStrategyCommittee isinstrumentalinpreparingthedecisionsand/oradvicefortheSupervisoryBoardrelatedtothesetopics.Important topicsthisyearweretheCCIPandthemergerwithCymer,inviewofASML'sstrategy,andinviewofthestatusofEUV developmentandproductionprocesses.Tofamiliarizethemselveswiththetechnicaldemandsandchallengesrelated tothedevelopmentandproductionoftheEUVtool,theTechnologyandStrategyCommitteemembersvisitedsuppliers whodevelopimportantcomponentsofthistool.BesidesEUV,othertopicsofdiscussionincludedmattersrelatedto Immersionandholisticlithographysolutions(forexampleBrionproductsandmetrology).

ForafurtherdescriptionoftheresponsibilitiesoftheSupervisoryBoardCommittees,referenceismadetotheCorporate GovernanceParagraphofthisStatutoryAnnualReport.

Remuneration of the Supervisory Board

TheremunerationoftheSupervisoryBoardmembersisdescribedinNote30totheconsolidatedfinancialstatements. In2011,theAGMadoptedtheSupervisoryBoard'sproposaltoincreasetheSupervisoryBoard'sremunerationin viewofthecontinuingincreaseofresponsibilities,workloadandliabilitiesfortheSupervisoryBoardmembersandits Committees,aswellasthegrowthofASMLoverthepastyears.FurthermoretheAGMapprovedtofurtherincrease theannual(fixed)feewithamaximumamountofEUR5,000dependingoncircumstances.ThisincreaseofEUR5,000 wasimplementedin2012,tobringtheSupervisoryBoard'sremunerationmoreinlinewithgeneralpracticeinThe Netherlands.InadditiontotheirfeeasmemberoftheSupervisoryBoard,SupervisoryBoardmembersalsoreceiveafee foreachCommitteemembership,aswellasanetcostallowance.TheSupervisoryBoardremunerationisnotdependent onASML'sfinancialresults.NoneofthemembersoftheSupervisoryBoardownsharesoroptionsonASML'sshares. Wehadnotgrantedanyloansto,norhadwegrantedanyguaranteesinfavorof,anyofthemembersoftheSupervisory Board.

Composition of the Board of Management

TheBoardofManagementcurrentlyconsistsoffivemembers.Asmentionedearlierinthisreport,theSupervisoryBoard willextendtheappointmenttermofMr.VanHoutforfourmoreconsecutiveyearsuponnotificationtotheAGMtobe heldonApril24,2013.ForfurtherdetailsandabiographyofthemembersoftheBoardofManagement,seepage1of thisStatutoryAnnualReport.

Remuneration of the Board of Management

General

In2010,theGeneralMeetingofShareholdersadoptedanupdateoftheRemunerationPolicyfortheBoardof Management.Thispolicydidnotchangein2012.TheRemunerationCommitteeoverseesthedevelopmentand implementationofcompensationandbenefitprogramsfortheBoardofManagement,aswellasthecompensation levelsfortheindividualmembersoftheBoardofManagement.ItprovidesadvicetotheBoardofManagementonthe policyandimplementationofthecompensationforSeniorManagementbelowtheBoardofManagement.

TheRemunerationCommitteereviewsthecorporateobjectivesandtargetsrelevanttothecompensationofall membersoftheBoardofManagement.ItensuresthattargetsfortheBoardofManagementandseniormanagement arealignedandsupportthelongtermstrategyofASML.Thesetargetsrelatetoshortandlongtermtechnology, customerandfinancialperformance,thethreemainpillarsoflongtermvaluecreationatASML.TheRemuneration CommitteecooperateswiththeAuditCommitteeandtheTechnologyandStrategyCommitteeinsettingthetargets.The RemunerationCommitteeevaluatestheachievementsoftheBoardofManagementwithrespecttothoseobjectivesand targets(again,incooperationwiththeAuditCommitteeandtheTechnologyandStrategyCommittee),anditprovides recommendationstotheSupervisoryBoardontheresultingcompensationlevelsforthemembersoftheBoardof Management.DetailsoftheremunerationtargetsandtheirlinktotheASMLlongtermstrategycanbefoundinthe2012 RemunerationReport.

Theexternalauditorperformsagreed-uponproceduresonthetargetsachievedtoassesscompliancewiththe RemunerationPolicy.

TheSupervisoryBoardhasthediscretionarypowertoadjustvariableremunerationcomponentsbothupwardsand downwardsifthesewould,intheopinionoftheSupervisoryBoard,produceanunfairresultduetoextraordinary circumstancesduringtheperiodinwhichthepredeterminedperformancecriteriahavebeenorshouldhavebeen achieved(UltimumRemedium-provisionII.2.10).Besidesthis,theSupervisoryBoardmayrecoverfromtheBoardof Managementanyvariableremunerationawardedonthebasisofincorrectfinancialorotherdata(clawbackclause provisionII.2.11).

Outline 2012 remuneration report

Insummary,totalremunerationformembersoftheBoardofManagementisderivedfromthemedianlevelofthe appropriatetopexecutivepaymarket(areferencemarketconsistingofagroupofEuropeancompaniesmainlyinthe ICTandTechnologysector)andconsistsof(i)basesalary;(ii)shorttermperformanceincentives(incash);(iii)longterm performanceincentives(inshares)and(iv)otherbenefits.Thepayoutofthecashincentiveandvestingofperformance sharesisdependentontheachievementofpredeterminedfinancialandnon-financialperformancecriteria.

Byapplyingthefollowingratio,thestructureofTotalDirectCompensationisaimedatbalancingshortandlongterm performanceandtoalignremunerationwithlongtermvaluecreation:100-75-80fortheCEO,wherebasesalaryis100; thetargetshorttermperformancerelatedcashincentiveis75;longtermperformancesharesare80.Fortheother membersoftheBoardofManagementthisratiois100-60-80.Themaximumpayout-incaseofoverachievementof pre-definedtargets-fortheperformancesharesis146.25percentforallmembersoftheBoardofManagement.

Gratitude to ASML employees

TheSupervisoryBoardwouldliketothankandrecognizeallASMLemployeeswhohavebeenabletoagainachieveso muchthispastyear:theprogresswithEUV,theeffortsmadetosupplytothedemand,theconclusionoftheCCIPand Cymertransactions,whichtransactionswillalsoresultinadditional-technological-challenges.ASML'sSupervisory Boardacknowledgesthepressurethattheextremeswingsindemandandinthecontinuingdemandforleading-edge technologyputonASMLemployees,andappreciatesalltheeffortsandachievementsofASMLemployeesthroughout theseyears.

Information on Supervisory Board members

PresentedbelowisthepersonaldataofallSupervisoryBoardmembersthatisrequiredtobedisclosedinthisreportin ordertocomplywiththeCode.

OB Bilous
gender	: male
age	: 74
profession	: formerGeneralManagerandVicePresidentWorldwideManufacturingofIBM's MicroelectronicsDivision
principalposition	: retired
nationality	: UnitedStates
otherrelevantpositions	: BoardmemberNantero,Inc.
firstappointed	: 2005
currenttermuntil	: 2014
H.C.J. van den Burg
gender	: female
age	: 60
profession	: formermemberoftheEuropeanParliament
principalposition	: memberoftheDutchMonitoringCommitteeCorporateGovernanceCode
nationality	: Dutch
otherrelevantpositions	: memberoftheSupervisoryBoardofAPGGroepN.V.,ChairpersonoftheMonitoring FoundationDutchInsuranceCompanies,memberoftheAdvisoryBoardsoftheDutch Data-ProtectionAuthorityandtheDutchNationalRegisterSupervisoryDirectors,member oftheAdvisoryScientificCommitteeEuropeanSystemicRiskBoard(ECBFrankfurt)and memberoftheAdvisoryCouncilInternationalAffairsCommissionHumanRights(Dutch MinistryForeignAffairs)
firstappointed	: 2005
currenttermuntil	: 2013
F.W. Fröhlich
gender	: male
age	: 70
profession	: formerDeputyChairmanandCFOofAkzoNobelN.V.
principalposition	: retired
nationality	: German
otherrelevantpositions	: ChairmanoftheSupervisoryBoardofRandstadHoldingN.V.,memberoftheSupervisory BoardsofAllianzNederlandN.V.andRexelSA,memberoftheBoardofDirectorsof PrysmianGroup.
firstappointed	: 2004
currenttermuntil	: 2014
P.F.M. van der Meer Mohr
gender	: female
age	: 52
profession	: PresidentoftheExecutiveBoardoftheErasmusUniversityRotterdam
nationality	: Dutch
otherrelevantpositions	: MemberoftheSupervisoryBoardsofRoyalDSMN.V.andDuisenbergSchoolofFinance
firstappointed currenttermuntil	: 2009 : 2013
A.P.M. van der Poel gender	: male
age	: 64
profession	: formermemberoftheBoardofManagementofRoyalPhilipsElectronics
principalposition	: retired
nationality	: Dutch
otherrelevantpositions	: memberoftheBoardofDirectorsofGemaltoHoldingN.V.,memberoftheSupervisory BoardsofRoyalHaskoningDHVB.V.andBDRThermea
firstappointed	: 2004
currenttermuntil	: 2016

W.T. Siegle

gender	: male
age	: 74
profession	: formerSeniorVicePresidentandChiefScientistofAMD,Inc.
principalposition	: retired
nationality	: UnitedStates
otherrelevantpositions	: memberoftheAdvisoryBoardofAcornTechnologies,Inc.
firstappointed	: 2007
currenttermuntil	: 2013

: male
: 70
: formerCompanySecretaryandHeadofTaxofUnileverN.V.andPlc.
: retired
: Dutch
: 2002
: 2013

W.H. Ziebart

gender age	: male : 63
profession	: formerPresidentandCEOofInfineonTechnologiesA.G.
principalposition	: retired
nationality	: German
otherrelevantpositions	: MemberoftheSupervisoryBoardofNordexSEandNovaledAG,andmemberoftheBoard ofAutoliv,Inc.
firstappointed	: 2009
currenttermuntil	: 2013
CompanySecretary	: Mr.R.F.Roelofs
Appointed	: 2002
DeputyCompanySecretary: Ms.G.C.M.Keizer

Appointed : 2002

TheSupervisoryBoard, Veldhoven,February12,2013

Corporate Governance Paragraph

I. General¹

ASMLHoldingN.V.isapubliclimitedliabilitycompany,withregisteredseatinVeldhoven,theNetherlandsandis governedbyDutchlaw.ASML'ssharesarelistedsince1995onNYSEEuronextinAmsterdam("NYSEEuronext Amsterdam")andontheNASDAQStockMarketLLC("NASDAQ"),since1995.

WecontinuouslymonitorandassessapplicableDutch,U.S.andotherrelevantcorporategovernancecodes,rules,and regulations.ASMLissubjecttotheCode.BecausewearealsolistedonNASDAQ,wearerequiredtocomplywiththe U.S.Sarbanes-OxleyActof2002,aswellasNASDAQlistingrules,andtherulesandregulationspromulgatedbythe U.S.SecuritiesandExchangeCommission("SEC").

ForthefulltextoftheCode,pleaserefertothewebsitewww.commissiecorporategovernance.nl.Forthefulltextof theU.S.Sarbanes-OxleyActof2002,aswellasNASDAQlistingrules,andtherulesandregulationspromulgatedby theSEC,seewww.sec.gov/about/laws/soa2002.pdf,http://nasdaq.cchwallstreet.com,andwww.sec.gov/about.shtml respectively.

ASML'sSupervisoryBoardandBoardofManagement,whoareresponsibleforourcorporategovernancestructure, willcontinuetheireffortstoensurethatourpracticesandprocedurescomplywithbothU.S.andDutchcorporate governancerequirements.Inthisparagraph,weaddressourcorporategovernancestructure,therebyreferringto theprinciplesandbestpracticessetforthintheCode,aswellaswiththeapplicablelawswithrespecttocorporate governance.OurSupervisoryBoardandBoardofManagementareoftheopinionthatASMLcomplieswithall recommendationsintheCode.However,wehaveprovidedexplanationswithrespecttoafewrecommendations,asour practicewithrespecttotheserecommendationscouldbeperceivedasnon-compliantwiththeCode.

MaterialchangesinthecorporategovernancestructureofASMLand/orinitscompliancewiththeCodewillbe discussedatourAGMasaseparateagendaitem.

1ThisCorporateGovernanceParagraphalsoincludestheinformationthatisrequiredtobedisclosedpursuanttoarticle2aoftheDecreeof23December2004regardingfurtherprovisionsonthe substanceofannualreports.

II. Board of Management

Role and Procedure

ASML'sBoardofManagementisresponsibleformanagingASML,underthechairmanshipofitsPresident,Chief ExecutiveOfficer("CEO")andChairmanoftheBoardofManagement.ThecurrentBoardofManagementcomprisesfive members.

AlthoughthevariousmanagementtasksaredividedamongthemembersoftheBoardofManagement,theBoardof ManagementremainscollectivelyresponsibleforthemanagementofASML,thedeploymentofourstrategy,ourrisk profileandpolicies,theachievementofourobjectives,ourresultsandthecorporatesocialresponsibilityaspects relevanttoASML.

Infulfillingitsmanagementtasksandresponsibilities,theBoardofManagementconsiderstheinterestsofASMLand thebusinessconnectedwithit,aswellastheinterestsofourstakeholders.TheBoardofManagementisaccountableto theSupervisoryBoardandtheGeneralMeetingofShareholdersfortheperformanceofitsmanagementtasks.

ASMLhasatwo-tierboardstructure:theSupervisoryBoardsupervisesandadvisestheBoardofManagementin theexecutionofitstasksandresponsibilities.TheBoardofManagementprovidestheSupervisoryBoardwithall information,inwritingorotherwise,necessaryfortheSupervisoryBoardtofulfillitsduties.Besidestheinformation providedintheregularmeetings,theBoardofManagementkeepstheSupervisoryBoardfrequentlyinformedon developmentsrelatingtoASML'sbusiness,financials,operations,andindustrydevelopmentsingeneral.

ImportantdecisionsoftheBoardofManagementthatrequiretheapprovaloftheSupervisoryBoardare,amongothers:

• theoperationalandfinancialobjectives;
• thestrategydesignedtoachievetheobjectives;
• theparameterstobeappliedinrelationtothestrategytoachievetheobjectives;and
• corporatesocialresponsibilityissuesthatarerelevanttoASML.

Themainelementsoftheoperationalandfinancialobjectives,thestrategytoachievetheobjectives,andthe parameterstobeappliedareincludedintheReportoftheBoardofManagement.Inthe"riskfactors"sectionofthe 2012StatutoryAnnualReport,wedescribethesensitivityofourresultstobothexternalaswellasinternalfactorsand variables.

TheRulesofProcedurefortheBoardofManagementcontain-amongothertopics-thegeneralresponsibilitiesof theBoardofManagement,therelationshipwiththeSupervisoryBoardandvariousstakeholders,thedecisionmaking processwithintheBoardofManagement,andalsothelogisticssurroundingthemeetings.TheRulesofProcedureare postedintheCorporateGovernancesectiononourwebsite.

Appointment, Other Functions

MembersoftheBoardofManagementareappointedbytheSupervisoryBoarduponrecommendationbyASML's SelectionandNominationCommitteeanduponnotificationtotheGeneralMeetingofShareholders.Membersof theBoardofManagementappointedaftertheamendmentoftheArticlesofAssociationin2004,areappointedfor aperiodoffouryears,whereafterreappointmentispossible.BecauseMessrs.P.WenninkandM.vandenBrink's initialappointmentasmemberoftheBoardofManagementoccurredbefore2004,theirappointmenttotheBoardof Managementisforanindefiniteperiodoftime.Untilnow,theexistingemploymentcontracts,includingallrightsand obligationsunderthesecontracts,havebeenhonored.

TheSupervisoryBoardmaysuspendanddismissmembersoftheBoardofManagement,butonlyafterconsultingthe GeneralMeetingofShareholders.

PursuanttonewlyadoptedDutchlegislationwhichenteredintoforceonJanuary1,2013,amemberoftheBoardof Managementmaynotbeasupervisoryboardmemberinmorethantwootherqualifiedlegalentities("LargeCompany"). AmemberoftheBoardofManagementmayneverbethechairmanofasupervisoryboardofaLargeCompany.

BoardofManagementmembersmayonlyacceptasupervisoryboardmembershipofanotherLargecompanyafter havingobtainedpriorapprovalfromtheSupervisoryBoard.MembersoftheBoardofManagementarealsorequiredto notifytheSupervisoryBoardofotherimportantfunctionsheldortobeheldbythem.

Currently,noBoardofManagementmemberhasmorethantwoSupervisoryBoardmembershipsinotherLarge companies.NocurrentmemberoftheBoardofManagementischairmanofasupervisoryboardofaLargecompany.

ThissamelegislationrequiresaDutchpubliclimitedliabilitycompanyqualifyingasaLargeCompany,topursueapolicy ofhavingatleast30.0percentoftheseatsontheexecutiveboardbeheldbyeachgendertotheextenttheseseatsare heldbynaturalpersons.Wearecurrentlyconsideringtheapproachtoachievethisgoal.

Internal Risk Management and Control Systems, External Factors

TheBoardofManagementisresponsibleforensuringthatASMLcomplieswithapplicablelegislationandregulations. ItisalsoresponsibleforthefinancingofASMLandformanagingtheinternalandexternalrisksrelatedtoitsbusiness activities.

TheestablishmentofASML'sinternalriskmanagementandcontrolsystemisbasedontheidentificationofexternal andinternalriskfactorsthatcouldinfluencetheoperationalandfinancialobjectivesofASMLandcontainsasystemof monitoring,reporting,andoperationalreviews.

Tohelpidentifyingrisks,ASMLusesaformalriskmanagementapproach,consistingofasetofrisksdefinitions(Risk Universe)whicharediscussedamongstASMLseniormanagementduringanannuallyrecurringriskreview.Basedon thisriskassessment,actionsareinitiatedtofurtherenhanceASML'sriskmitigation.

TheestablishmentofASML'sinternalcontrolandriskmanagementsystemsisbasedontheidentificationofexternal andinternalriskfactorsthatcouldinfluenceouroperationalandfinancialobjectivesandcontainsasystemof monitoring,reportingandoperationalreviews.Allmaterialriskmanagementactivitieshavebeendiscussedwiththe AuditCommitteeandtheSupervisoryBoard.ForasummaryofASML'sRiskFactors,werefertoourManagementBoard ReportintheStatutoryAnnualReport.

ASMLdoesnotranktheindividualrisksidentified,asASMLisoftheopinionthatdoingsodefiesthepurposeofa comprehensiveriskassessmentanditwouldbearbitraryofnaturesinceallrisksmentionedhavesignificantrelevance forASMLanditsbusiness.

ASMLpublishestwoannualreportsinrespectofthefinancialyear2012("2012AnnualReports"):thisStatutoryAnnual ReportinaccordancewiththeDutchlegalrequirementsandIFRSasadoptedbytheEuropeanUnion("EU")andan AnnualReportonForm20-FinaccordancewithU.S.securitieslaws,basedonU.S.GAAP.BothAnnualReports describethesameriskfactorsthatarespecifictothesemiconductorindustry,ASMLandourshares.ASMLalso providessensitivityanalysesbyproviding:

• anarrativeexplanationofourfinancialstatements;
• thecontextwithinwhichfinancialinformationshouldbeanalyzed;and
• informationaboutthequality,andpotentialvariability,ofourearningsandcashflow.Inour"InControlStatement"(as partoftheDirector'sResponsibilityStatement),asincludedintheStatutoryAnnualReport2012,theBoardof Managementaddressesourinternalriskmanagementandcontrolsystems.

Withrespecttotheprocessofdraftingannualreports,wehaveextensiveguidelinesforthelay-outandthecontent ofourreports.Theseguidelinesareprimarilybasedonapplicablelaws.FortheStatutoryAnnualReportandthe ConsolidatedCondensedInterimFinancialStatements,ASMLfollowstherequirementsofDutchlawandregulations, includingpreparationoftheconsolidatedfinancialstatementsinaccordancewithIFRSasadoptedbytheEU.For theAnnualReportonForm20-F,ASMLappliestherequirementsoftheU.S.SecuritiesandExchangeActof1934, andpreparesthefinancialstatementsincludedthereininaccordancewithU.S.GAAP.Withrespecttothepreparation processoftheseandtheotherfinancialreports,ASMLappliesinternalprocedurestosafeguardcompletenessand correctnessofsuchinformationaspartofitsdisclosurecontrolsandprocedures.

ASML'sInternalControlCommittee,comprisingamongotherstwomembersoftheDisclosureCommittee,advises ASML'sDisclosureCommitteeabouttheirassessmentofASML'sinternalcontroloverfinancialreporting.TheChairman oftheInternalControlCommitteereportstotheAuditCommitteeandtotheBoardofManagementontheprogressof theassessments.

ASML'sDisclosureCommittee,consistingofvariousmembersofseniormanagementfromdifferentfunctionalareas withinASML,reportstoandassistsASML'sCEOandCFOinthemaintenance,reviewandevaluationofdisclosure controlsandprocedures.TheDisclosureCommittee'smainresponsibilityistoensurecompliancewithapplicable disclosurerequirementsarisingunderUnitedStatesandDutchlawandapplicablestockexchangerules.TheChairman oftheDisclosureCommitteereportstotheAuditCommitteeandtotheCEOandCFOonthetopicsdiscussedinthe

DisclosureCommitteemeetingsandadvisesASML'sCEOandCFOaboutitsassessmentofASML'sdisclosurecontrols andproceduresandinternalcontroloverfinancialreporting.

Code of Conduct

PartofASML'sriskmanagementandcontrolsystemisASML'sCodeofConduct.TheCodeofConductcontainsrules andguidanceoncompliancewithexternalandinternalrules,laws,controlsandprocesses.

In2012,policiesrelatedtotheCodeofConducthavebeenrevisedandnewpolicieshavebeenimplemented,all accordingtonewand/orrevisedlegislation.

Concernsandcomplaintscanbesubmittedthroughvariousinternalchannelsaswellasanexternalparty,which providesforanonymousreportinguponrequest.

TheCodeofConduct,aswellassubmittedcomplaints,ifany,areregularlydiscussedintheAuditCommittee.

TheCodeofConductandtheReportingProcedure(includingwhistleblowerprocedures)areavailableontheCorporate Governancesectionofourwebsite.

Remuneration of the Board of Management

WithrespecttotheremunerationoftheBoardofManagement,theSupervisoryBoardisoftheopinionthatthe2010 RemunerationPolicywasdraftedinaccordancewiththeCode,andthattheexecutionofthePolicyisalsoinline withtheCode,with(potential)exceptionsasmentionedmorespecificallyattheendofthisCorporateGovernance Paragraph.

Performance criteria

EventhoughthisisnotadeviationfromtheCode,astheCodestipulatesthatnotdisclosingtheperformancecriteria (bestpracticeprovisionsII.2.13f)andg)becauseofcompetitionsensitivenessisjustified,weherebywanttoprovide ourreasonsfornotprovidingallinformationasincludedinthebestpracticeprovisionsmentionedabove.

ASMLprovidesthequantitativeperformancecriteria,asummaryandaccountofthemethodstodeterminethe achievementoftheperformancecriteria,andalsotheultimateachievementlevelofthequantitativeandqualitative performancecriteria.However,wecannotprovidetheexactperformancecriteriadata,northelevelsofachievementper performancecriterion,asthisconcernshighlycompetitiveinformation,suchastargetsrelatedtoourtechnology,market position,etc.TheSupervisoryBoarddeemsititsresponsibilitytosettheactualtargetsandtodeterminethelevelof achievementofthesetargetsforthevariablepartoftheremunerationoftheBoardofManagement.TheAGMendorsed thispositioninitsmeetingonMarch23,2006.

FormoredetailsabouttheBoardofManagement'sremuneration,itscomposition,andotherrelevantelements, referenceismadetothe2010RemunerationPolicyandtheRemunerationReportforthe2012financialyear(both publishedonourwebsite),theReportoftheSupervisoryBoardandNote30ofthe2012AnnualStatutoryReport.

Theexternalauditorperformsagreed-uponproceduresonthetargetsachievedtoassesscompliancewiththe RemunerationPolicy.

Insider Trading

WithrespecttotradinginASMLfinancialinstruments,ASMLemployees,ASMLBoardofManagementmembersand ASMLSupervisoryBoardmembersareboundbyASML'sInsiderTradingRules,whicharepublishedonourwebsite. TheASMLInsiderTradingRulesstipulate,amongotheritems,thatmembersoftheBoardofManagementmaynottrade duringthetwomonthsprecedingthepublicationoftheannualresults,andduringthethreeweeksbeforepublicationof quarterlyresults.Inaddition,employeesofASML,includingthemembersoftheBoardofManagement,maynotperform transactionsinASMLfinancialinstrumentsduringtheopenperiodswhentheyhaveinsideinformation.

Indemnification

ASML'sArticlesofAssociationprovidefortheindemnificationofthemembersoftheBoardofManagementagainst claimsthatareadirectresultoftheirtasksasmembersoftheBoardofManagement,providedthatsuchclaimis notattributabletowillfulmisconductorintentionalrecklessnessofsuchmemberoftheBoardofManagement.The SupervisoryBoardhasfurtherimplementedtheindemnificationoftheBoardofManagementmembersbymeansof separateindemnificationagreementsforeachBoardofManagementmember.

Conflicts of Interest

ConflictsofinterestproceduresareincorporatedintheBoardofManagement'sRulesofProcedureandreflectthe principleandbestpracticeprovisionsoftheCodewithrespecttoconflictsofinterest.

Therehavebeennotransactionsduring2012,andtherearecurrentlynotransactions,betweenASMLoranyofour subsidiaries,andanysignificantshareholderandanydirectororofficeroranyrelativeorspousethereof,otherthan ordinarycoursecompensationarrangements.

In2011,consistentwithourcorporateresponsibilitiestooursurroundingcommunityandtogetherwithseveralother companiesintheregion,ASMLenteredintoaloanagreementwithalocalsportsclubPSVN.V.,pursuanttowhich ASMLprovidedPSVN.V.,asofAugust1,2011,witha14years,interestfree,subordinatedloanofEUR5.0million.The ChairmanoftheSupervisoryBoardofASML,Mr.ArthurvanderPoel,andtheChiefFinancialOfficerofASML,Mr.Peter Wennink,resignedasofJune30,2012,asmembersoftheSupervisoryBoardofPSVN.V.Thereforetheloanagreement withPSVN.V.nolongerclassifiesasarelatedpartytransactionasofthedateoftheresignationofMr.VanderPoeland Mr.Wennink.

III. Supervisory Board

Role and Procedure

Asmentionedbefore,ASML'sSupervisoryBoardsupervisesthepoliciesoftheBoardofManagementandthegeneral courseofaffairsofASMLanditssubsidiaries.OurSupervisoryBoardalsosupportstheBoardofManagementwithits advice.AsASMLhasandintendstokeepatwo-tierstructure,theSupervisoryBoardisaseparateandindependent bodyfromtheBoardofManagementandfromASML.UnderDutchlawandpertheCode,SupervisoryBoardmembers cannotbemembersoftheBoardofManagementandcannotbe(former)officersoremployeesofASML.

Infulfillingitsroleandresponsibilities,theSupervisoryBoardtakesintoconsiderationtheinterestsofASMLandits subsidiaries,aswellastherelevantinterestsofASML'sstakeholders.TheSupervisoryBoardsupervisesandadvisesthe BoardofManagementinperformingitstasks,withaparticularfocuson:

• theachievementofASML'sobjectives;
• ASML'scorporatestrategyandthemanagementofrisksinherenttoASML'sbusinessactivities;
• thestructureandoperationofinternalriskmanagementandcontrolsystems;
• thefinancialreportingprocess;
• compliancewithapplicablelegislationandregulations;
• relationshipwithshareholders;and
• thecorporatesocialresponsibilityissuesimportantforASML.

Majormanagementdecisions,suchasASML'sstrategy,majorinvestmentsandbudget,requiretheapprovalofthe SupervisoryBoard.TheSupervisoryBoardselectsandappointsnewBoardofManagementmembers,preparesthe remunerationpolicyfortheBoardofManagement,anddecidesontheremunerationfortheindividualmembersofthe BoardofManagement.Also,theSupervisoryBoardisthebodythatnominatesnewSupervisoryBoardcandidatesfor appointmentandsubmitsremunerationproposalsfortheSupervisoryBoardmemberstotheAGM.

TheSupervisoryBoard,throughitsSelectionandNominationCommittee,closelyfollowsthedevelopmentsinthe areaofcorporategovernanceandtheapplicabilityoftherelevantcorporategovernancerulesforASML.Foramore detaileddescriptionontheSupervisoryBoard'sactivitiesintheareaofcorporategovernancereferenceismadetothe SupervisoryBoardReportasincludedinthisStatutoryAnnualReport.

Meetings and activities of the Supervisory Board

TheSupervisoryBoardheldfivephysicalmeetingsin2012.Inaddition,threeconferencecallswereheldtospecifically discussthequarterlyresultsandonecallwasspecificallyheldtoprovidefinalapprovalfortheCCIP.

Duringseveralmeetingsin2012,theSupervisoryBoarddiscussedextensivelytheCCIPandtheproposedmerger withCymer.Othertopicswere:thestrategy,thefinancialposition,financingpolicy,businessrisks,investorrelations, sustainability,budgetandcorporatetargets.

AsalsodescribedintheSupervisoryBoardReport,membersoftheSupervisoryBoardalsointeractwithBoardof ManagementmembersandwiththeircolleagueSupervisoryBoardmembersoutsidetheregularmeetingsorconference calls.

DuringallphysicalmeetingsoftheSupervisoryBoardusuallyallBoardofManagementmembersarepresent.Ingeneral attheendofeachmeeting,theSupervisoryBoardmeetsintersetodiscusstopicsrelatedto,amongstothers,the

compositionandfunctioningoftheBoardofManagementandtheSupervisoryBoard,thefunctioningoftheindividual membersofbothbodies,andtherelationshipbetweenthesebodiesanditsindividualmembers.

Asiscommonpracticeeachyear,theSupervisoryBoardconductedanevaluationin2012withrespecttothe functioningofthefullSupervisoryBoard.AlsoeachCommitteeperformedaself-evaluationwithrespecttoits functioning.FormoredetailedinformationonthistopicreferenceismadetotheSupervisoryBoardReport.

MembersoftheSupervisoryBoardhavesemi-annualmeetingswiththeWorksCouncilintheNetherlandstodiscussour strategy,financialsituationandanyothertopicthatisdeemedrelevantatthattime.

FormoredetailedinformationonthemeetingsandactivitiesoftheSupervisoryBoardin2012,referenceismadetothe SupervisoryBoardReport.

The Rules of Procedure

TheRulesofProcedureoftheSupervisoryBoardcontainrequirementsbasedontheCode,ontheSarbanes-OxleyAct andonanyotherapplicablelaws,aswellascorporategovernancepracticesdevelopedbytheSupervisoryBoardover thepastyears.TheRulesofProcedurearesubjecttoregularreviewinviewofthecontinuouscorporategovernance developments.ItemsincludeamongothersresponsibilitiesoftheSupervisoryBoardanditscommittees,composition oftheSupervisoryBoardanditsCommittees,logisticssurroundingthemeetings,meetingattendanceofSupervisory Boardmembers,rotationschedulefortheSupervisoryBoardmembers.

TheRulesofProcedurealsocontainthechartersofthefourCommittees.TheSupervisoryBoardhasassignedcertain ofitstasksandresponsibilitiestothefourCommittees;however,theplenarySupervisoryBoardremainsresponsiblefor thefulfillmentofthesetasksandresponsibilities.TheSupervisoryBoard-anditsCommittees-mayobtaininformation fromofficersandexternaladvisorsofASML,ifnecessaryfortheexecutionofitstasks.EspeciallytheCommittees frequentlycalluponexternaladvisors,whoassisttheCommitteesinpreparingtherecommendationstobedecided uponbythefullSupervisoryBoard.

TheRulesofProcedure,aswellasthechartersofthefourCommitteesareregularlyreviewedand,ifneeded,amended. ChangesintheSupervisoryBoard'sRulesofProcedureneedtobeapprovedbythefullSupervisoryBoard.Changes inthechartersoftheCommitteesareapprovedbytheCommitteeconcerned.TheAuditCommitteecharterisreviewed annually,tocheckwhetherthecharterstillcomplieswiththeapplicablerulesandregulations,especiallythoserelating totheSarbanes-OxleyAct.

Independence

TheSupervisoryBoardisoftheopinionthatitscurrentmembersareallindependentasdefinedbytheCode.Neitherthe ChairmannoranyothermemberoftheSupervisoryBoardisaformermemberofASML'sBoardofManagement,orhas anotherrelationshipwithASMLwhichcanbejudged"notindependent"ofASML.

Potentiallyhowever,theSupervisoryBoardcouldbe'forced'todeviatefromtheCode'sindependencedefinitionwhen lookingforthemostsuitablecandidateforavacancy.Forexample,inthecasewheretheprofileforavacancyrequires particularknowledgeoforexperienceinthesemiconductor-andrelated-industries.Thesemiconductorindustryhas relativelyfewplayers,andthereforetheSupervisoryBoardmaywant-orneed-tonominatecandidatesforappointment totheAGMwhodonotfullycomplywiththeindependencecriteriaaslistedintheCode.Inthosecircumstances,ASML andthecandidatewillensurethatanysuchbusinessrelationshipdoesnotcompromisethecandidate'sindependence.

Expertise, Composition, Appointment

TheSupervisoryBoardcurrentlyconsistsofeightmembers,theminimumbeingthreemembers.TheSupervisoryBoard determinesthenumberofSupervisoryBoardmembersrequiredfortheperformanceofitsfunctions.

PertheAGMheldin2012,Messrs.O.(OB)BilousandF.W.(Fritz)Fröhlichretiredbyrotationandwerereappointedfora maximumperiodoftwoyearsinlinewiththeSupervisoryBoard'sprofile.Mr.A.P.M.(Arthur)vanderPoelalsoretiredby rotationandwasreappointedforamaximumperiodoffouryears.

In2013,Messrs.J.W.B.(Jos)Westerburgen,W.T.(William)SiegleandW.H.(Wolfgang)Ziebart,andMmes.H.C.J.(Ieke) vandenBurgandP.F.M.(Pauline)vanderMeerMohrwillretirebyrotation.ExceptforMessrs.WesterburgenandSiegle, theothermembershaveindicatedtobeavailableforreappointment.

Mmes.VandenBurgandVanderMeerMohrarenominatedandappointedpertheWorksCouncil'senhanced recommendationright.Thenominationsforreappointmentofbothmembersin2013willalsobesubjecttothis enhancedrecommendationright.

ThecurrentmembersofASML'sSupervisoryBoardshowadiversemixwithrespecttobackground,nationality,age, genderandexpertise,inlinewiththecurrentprofiledrawnupbytheSupervisoryBoard.

TheprofileoftheSupervisoryBoardaimsforaninternationalandadequatecompositionreflectingtheglobalbusiness activitiesofASML,aswellasforanadequatelevelofexperienceinfinancial,economic,technological,social,andlegal aspectsofinternationalbusiness.Incaseof(re)appointments,theSelectionandNominationCommitteecheckswhether thecandidatesfitintheSupervisoryBoard'sprofile.

SimilartotherulesforthecompositionoftheBoardofManagementdescribedabove,thenewlegislationeffectiveper January1,2013alsorequiresthatthecompositionoftheSupervisoryBoardreflectstherequirementofarepresentation of30.0percentofeachgender.Theintentionfora30.0percentrepresentationofeachgenderisincludedinthe SupervisoryBoard'sprofilesince2009,andinitssearchfornewcandidates,thisisoneoftheaspectstheSupervisory Boardtakesintoconsideration.

Wearestillsubjecttothelawapplicabletolargecorporations("structuurregime").Beingsuchacompany,members oftheSupervisoryBoardareappointedbytheGeneralMeetingofShareholdersbasedonnominationsproposedby theSupervisoryBoard.TheSupervisoryBoardinformstheAGMandtheWorksCouncilaboutupcomingresignations byrotationattheAGMintheyearprecedingtheactualresignation(s)byrotationtoensurethattheGeneralMeetingof ShareholdersandtheWorksCouncilhavesufficientopportunitytorecommendcandidatesfortheupcomingvacancies. TheSupervisoryBoardhastherighttorejecttheproposedrecommendations.Furthermore,theWorksCouncilhas anenhancedrighttomakerecommendationsforone-thirdofthemembersoftheSupervisoryBoard.Theenhanced recommendationrightimpliesthattheSupervisoryBoardmayonlyrejecttheWorksCouncil'srecommendationsforthe followingreasons:(i)iftherelevantpersonisunsuitableor(ii)iftheSupervisoryBoardwouldnotbedulycomposed iftherecommendedpersonwereappointedasSupervisoryBoardmember.Ifnoagreementontherecommended person(s)canbereachedbetweentheSupervisoryBoardandtheWorksCouncil,theSupervisoryBoardmayrequest theEnterpriseChamberoftheAmsterdamCourtofAppealtodeclarethattheSupervisoryBoard'sobjectionis legitimate.AnydecisionoftheEnterpriseChamberonthismatterisnon-appealable.

Asmentionedabove,Mmes.VandenBurgandVanderMeerMohrarenominatedandappointedpertheWorks Council'senhancedrecommendationrightandtheirnominationsforreappointment,scheduledforthe2013AGM,are alsosubjecttothisenhancedrecommendationright.

NominationsbytheSupervisoryBoardmaybeoverruledbyaresolutionattheGeneralMeetingofShareholderswith anabsolutemajorityofthevotes,representingatleastone-thirdofASML'soutstandingsharecapital.Ifthevotescast infavorofsucharesolutiondonotrepresentatleastone-thirdofthetotaloutstandingcapital,anewshareholders' meetingcanbeconvenedatwhichthenominationcanbeoverruledbyanabsolutemajority.IftheGeneralMeetingof Shareholdersdoesnotappointthepersonnominatedanddoesnotrejectthenomination,theSupervisoryBoardwill appointthenominatedperson.

FornewlyappointedSupervisoryBoardmembers,weprepareanintroductionprogramofwhichthemaintopicsare: ASML'sorganization,operations,strategy,industry,technology,ASML'sfinancialandlegalaffairs,andASML'shuman resources.SupervisoryBoardmembersareregularlygiventheopportunitytofollowtechnicaltutorialstomaintain andincreasetheirknowledgeofASML'severprogressingtechnology.Inaddition,specifictrainingisalsoprovidedfor newCommitteemembersbasedonindividualneeds.Annually,theSupervisoryBoardand/orCommitteesmembers determinetheirneedforfurthertrainingonspecifictopics.

SupervisoryBoardmembersserveforamaximumtermoffouryearsfromthedateoftheirappointment,orashorter periodaspertheSupervisoryBoard'srotationschedule.Memberscanbereappointed,providedthattheirentiretermof officedoesnotexceed12years.TherotationscheduleisavailableintheCorporateGovernancesectiononourwebsite.

TheGeneralMeetingofShareholdersmay,byanabsolutemajorityofthevotesrepresentingatleastone-thirdof thetotaloutstandingcapital,dismisstheSupervisoryBoardinitsentiretyforlackofconfidence.Insuchcase,the EnterpriseChamberoftheAmsterdamCourtofAppealshallappointoneormoreSupervisoryBoardmembersatthe requestoftheBoardofManagement.

SimilartotherulesfortheBoardofManagementdescribedabove,pursuanttonewlyadoptedDutchlegislationeffective perJanuary1,2013,restrictionswillapplyastotheoverallnumberofexecutiveboardpositions(includingaonetier board)andsupervisoryboardpositionsthatamemberofthesupervisoryboard(oranon-executivedirectorincase ofaone-tierboard)ofaLargeCompany,mayhold.Pursuanttothisnewlegislation,apersonmaynotbeamember oftheSupervisoryBoardifheorsheholdsmorethanfivesupervisorypositionswithLargeCompanies.Actingasa chairmanofthesupervisoryboardorasupervisorybodyestablishedbythearticlesofassociationor,incaseofaonetierboard,chairmanoftheexecutiveboard,ofaLargeCompanywillcounttwice.Currently,noneoftheSupervisory BoardmembersexceedsthemaximumnumberoffivemembershipsofsupervisoryboardsofLargeCompanies(a chairmanshipcountingdouble).

FordetailedinformationonASML'sSupervisoryBoardmembers,referenceismadetotheSupervisoryBoardReport.

Role of the Chairman of the Supervisory Board and the Company Secretary

Mr.VanderPoelistheChairmanofASML'sSupervisoryBoard;Mr.FröhlichitsVice-Chairman.Theroleand responsibilitiesoftheChairmanoftheSupervisoryBoardaredescribedinitsRulesofProcedure.TheChairman determinestheagendaoftheSupervisoryBoardmeetings,heactsasthemaincontactbetweentheSupervisoryBoard andtheBoardofManagementandensuresorderlyandefficientproceedingsattheGeneralMeetingofShareholders. TheChairmanwillamongothersalsoensurethat:

• themembersoftheSupervisoryBoardfollowanintroductionandtrainingprogramforSupervisoryBoardmembers;
• themembersoftheSupervisoryBoardreceiveallinformationnecessaryfortheproperperformanceoftheirdutieson atimelybasis;
• thereissufficienttimeforconsultationanddecisionmakingbytheSupervisoryBoard;
• theCommitteesfunctionproperly;
• theperformanceoftheBoardofManagementmembersandtheSupervisoryBoardmembersisassessedatleast onceayear;and
• theSupervisoryBoardhaspropercontactwiththeBoardofManagementandtheWorksCouncil.

TheCompanySecretaryassiststheSupervisoryBoardintheperformanceofitsduties;ensuresthatthecorrect proceduresarefollowed;andthattheSupervisoryBoardactsinaccordancewithitslegalandstatutoryobligations.The CompanySecretaryassiststheChairmanoftheSupervisoryBoardintheorganizationoftheaffairsoftheSupervisory BoardanditsCommittees.TheCompanySecretaryisappointedbyandmayalsobedismissedbytheBoardof ManagementafterpriorapprovalfromtheSupervisoryBoard.TheCompanySecretaryisassistedbyadeputyCompany Secretary.

Composition and Role of the four Committees of the Supervisory Board

AlthoughtheSupervisoryBoardretainsultimateresponsibility,theSupervisoryBoardhasdelegatedcertainofitstasks tothefourCommitteesoftheSupervisoryBoard.Theirrolesandfunctionsaredescribedinseparatechaptersinthe SupervisoryBoard'sRulesofProcedure.

IntheplenarySupervisoryBoardmeetings,thechairmenoftheCommitteesreportverballyand/orinwritingonthe issuesanditemsdiscussedintheCommitteemeetings,andalsotheminutesoftheCommitteemeetingsareavailable forallSupervisoryBoardmembers,enablingthefullSupervisoryBoardtomaketheappropriatedecisions.

AuditCommittee

ThecurrentmembersofASML'sAuditCommitteeareMr.Fröhlich(Chairman),Mr.VanderPoelandMr.Ziebart.The membersoftheAuditCommitteeareallindependent,non-executivemembersoftheSupervisoryBoard.

Ingeneral,theAuditCommitteemeetsatleastfourtimesperyearandalwaysbeforethepublicationofthequarterly andannualfinancialresults.Inthefirstquarter,theAuditCommitteefocusesontheannualresults,theauditsoverthe previousfinancialyearandtheinternalandexternalauditplansfortheyearahead.Frequentlydiscussedtopicswere ASML'sinternalcontrolsandriskmanagementsystems,thetestingofinternalcontrolsoverfinancialreportinginlight ofSection404oftheSarbanes-OxleyAct,ASML'sfinancial-andcashposition,thefinancingandreturnpolicy,andthe supervisionoftheenforcementoftherelevantlegislationandregulations.

In2012,theAuditCommitteemetfivetimesinphysicalmeetingsandfourtimesviaconferencecalls.Morespecifically, in2012theAuditCommitteediscussedfrequentlytheCCIP,withafocusonthefinancialandgovernanceaspectsof thetransaction.AlsothemergerwithCymerwasdiscussed,focusingonamongotherstheconsiderationtobepaid tothetothestockholdersofCymeraswellastheimpactofthemergeronASML'sfinancialconditionandresultsof operations.

ASMLprovidestheAuditCommitteewithallrelevantinformationtobeabletoadequatelyandefficientlysupervisethe preparationanddisclosureoffinancialinformationbyASML.Thisincludes,amongotherthings,informationonthe statusanddevelopmentofthe(semiconductor)markettobeabletojudgetheoutlookandbudgetforthenextsixto twelvemonths,theapplicationofaccountingstandardsintheNetherlands,IFRSasadoptedbytheEU,U.S.GAAP,the choiceofaccountingpoliciesandtheworkofinternalandexternalauditors.Annually,theAuditCommitteediscusses

andreviewsamongothersASML'sfinancingpolicyandstrategy,taxplanningpolicy,investorrelationsactivitiesand strategy,fraudpolicy,andinformationandcommunicationtechnologypolicy.

TheAuditCommittee,onbehalfoftheSupervisoryBoard,reviewsandapprovesthefeesoftheexternalauditor.The AuditCommitteeisthefirstcontactfortheexternalauditoriftheexternalauditordiscoversirregularitiesinthecontent ofthefinancialreports.TheexternalauditorprovidestheAuditCommitteeregularlywithanupdateontheactualcosts fortheauditservicesandthenon-auditservices,enablingtheAuditCommitteetomonitortheindependenceofthe externalauditor.Theexternalauditoronlyprovidestheauditandnon-auditservicesinaccordancewithASML'spreapprovalpolicy,asapprovedbytheAuditCommittee.Asageneralrule,theexternalauditorispresentatmeetings oftheAuditCommittee.Ingeneral,aftereachAuditCommitteemeeting,theAuditCommittee(withoutmanagement present)meetswiththeexternalauditortodiscusstherelationshipbetweentheAuditCommitteeandtheexternal auditor,therelationshipbetweenBoardofManagementandtheexternalauditor,andanyotherissuesdeemed necessarytobediscussed.

TheAuditCommitteegenerallyinvitesASML'sCEO,CFO,SeniorVicePresidentFinanceandCorporateChief Accountanttoitsmeetings.TheInternalAuditoralsoattendsthesemeetings.Fromtimetotime,otherASMLemployees maybeinvitedtoAuditCommitteemeetingstoaddresssubjectsthatareofimportancetotheAuditCommittee.

Mr.Fröhlich,ChairmanoftheAuditCommittee,istheSupervisoryBoard'sfinancialexpert,takingintoconsiderationhis extensivefinancialbackgroundandexperience.

RemunerationCommittee

ThecurrentmembersofASML'sRemunerationCommitteeareMr.Westerburgen(Chairman),Ms.VandenBurg,Ms.Van derMeerMohrandsinceApril2012Mr.Ziebart.

TheRemunerationCommitteemeetsatleasttwiceayearandmorefrequentlywhendeemednecessary.

TheRemunerationCommitteepreparesASML'sRemunerationPolicyformembersoftheBoardofManagement,and overseesthedevelopmentandimplementationoftheRemunerationPolicy.IncooperationwiththeAuditCommittee andtheTechnologyandStrategyCommittee,theRemunerationCommitteereviewsandproposestotheSupervisory BoardcorporategoalsandobjectivesrelevanttothevariablepartoftheBoardofManagement'sremuneration.Also incooperationwiththeAuditCommitteeandtheTechnologyandStrategyCommittee,theRemunerationCommittee evaluatestheperformanceofthemembersoftheBoardofManagementinviewofthosegoalsandobjectives,and -basedonthisevaluation-recommendstotheSupervisoryBoardappropriatecompensationlevelsfortheBoardof Managementmembers.

In2012,theRemunerationCommitteemetfivetimesinphysicalmeetings,twotimesviaconferencecallandseveral timesonanad-hocbasis.Topicsofdiscussionin2012wereamongothersthetargetsandremunerationpackagefor theBoardofManagement,theASMLstockoptionandshareplans,the2012RemunerationReportandtherevision ofthe2010RemunerationPolicy,whichwillbesubmittedforadoptiontothe2013AGM.Externalexpertsassistthe RemunerationCommitteeinitsactivities.ThoseexpertsdonotprovideadvicetotheBoardofManagementwithrespect tomattersinthisarea.

TheRemunerationCommitteepreparedthe2012RemunerationReport,whichdescribesamongothersthemannerin whichthe2010RemunerationPolicywasimplementedandexecutedin2012.

Mr.Westerburgen,theChairmanoftheRemunerationCommitteeisneitheraformermemberofASML'sBoardof Management,noramemberoftheBoardofManagementofanothercompany.NomemberoftheRemuneration CommitteeisacurrentmemberoftheBoardofManagementofanotherDutchlistedcompany.

SelectionandNominationCommittee

ThecurrentmembersofASML'sSelectionandNominationCommitteeareMr.Westerburgen(Chairman),Mr.Bilousand Mr.VanderPoel.

TheSelectionandNominationCommitteemeetsatleasttwiceayearandmorefrequentlywhendeemednecessary.

In2012,theSelectionandNominationCommitteemembersmetfourtimesformallyandseveraladditionaltimesonan ad-hocbasis.

TheSelectionandNominationCommitteeassiststheSupervisoryBoardin:

• preparingtheselectioncriteriaandappointmentproceduresformembersofourSupervisoryBoardandBoardof Management;
• periodicallyevaluatingthescopeandcompositionoftheBoardofManagementandtheSupervisoryBoard,and proposingtheprofileoftheSupervisoryBoardinrelationthereto;
• periodicallyevaluatingthefunctioningoftheBoardofManagementandtheSupervisoryBoardandtheindividual membersofthoseboardsandreportingtheresultsthereoftotheSupervisoryBoard;and
• proposing(re-)appointmentsofmembersoftheBoardofManagementandtheSupervisoryBoard,andsupervising thepolicyoftheBoardofManagementinrelationtotheselectionandappointmentcriteriaforseniormanagement.

TheSelectionandNominationCommitteefurthermorediscussesimminentcorporategovernancedevelopments,for examplethosebasedonlawproposals,butalsotheoutcomeoftheReportoftheMonitoringCommitteewithrespectto compliancewiththeCode.

TechnologyandStrategyCommittee

ThecurrentmembersoftheTechnologyandStrategyCommitteeareMr.Siegle(Chairman),Mr.Bilous,Mr.VanderPoel andMr.Ziebart.

TheTechnologyandStrategyCommitteemeetsatleasttwiceayearandmorefrequentlywhendeemednecessary.

In2012,theTechnology&StrategyCommitteemetfourtimesandheldoneconferencecall.Duringseveralofthese meetingsthetechnologytargets,whicharepartoftheoverallperformancetargetsset,aswellastheachievements relatedtothetechnologytargetswerediscussed.

TheTechnologyandStrategyCommitteeprovidesadvicetotheSupervisoryBoardwithrespecttoASML'stechnology strategiesandASML'stechnologyandproductroadmaps.ExternalexpertsaswellasexpertsfromwithinASMLmay actasadvisorstotheTechnologyandStrategyCommitteewithrespecttothesubjectsreviewedanddiscussedin thisCommittee.Theadvisorsdonothavevotingrights.TheTechnologyandStrategyCommitteefrequentlyuses thepossibilitytoinviteexternaland/orinternalexpertstoattendCommitteemeetings.Externalexpertsmayinclude representativesofsuppliersandR&DpartnerstoincreasetheCommittee'sunderstandingofthetechnologyand researchnecessaryforthedevelopmentofASML'sleading-edgesystems.In2012,theTechnologyandStrategy CommitteehasvisitedsuppliersofASML,whodevelopimportantcomponentsoftheEUVtool,forthepurposeof acquaintingitselfwiththetechnologydemandsandtechnologychallengesrelatedtothedevelopmentandproductionof thistool.

Thein-depthtechnologydiscussionsintheTechnologyandStrategyCommitteeandthesubsequentreportingon headlinesinthefullSupervisoryBoardincreasestheSupervisoryBoard'sunderstandingofASMLtechnologymatters andenablestheSupervisoryBoardtoadequatelysupervisethestrategicchoicesfacingASML,includingourinvestment inresearchanddevelopment.

TheCommitteealsoreviewstheproposedtechnologytargets,aswellastheachievementsrelatedtheretoandprovides theRemunerationCommitteewithitsadviceonthistopic.

Conflict of Interest

Exceptforthebelow,therehavebeennotransactionsduring2012,andtherearecurrentlynotransactions,between ASMLoranyofitssubsidiaries,andanysignificantshareholderandanydirectororofficeroranyrelativeorspouse thereofotherthanordinarycoursecompensationarrangements.

ConflictofinterestproceduresareincorporatedintheSupervisoryBoard'sRulesofProcedureandaddressthe principleandthebestpracticeprovisionsoftheCodewithrespecttoconflictsofinterest.Consistentwithourcorporate responsibilitiestooursurroundingcommunityandtogetherwithseveralothercompaniesintheregion,ASMLentered intoaloanagreementwithlocalsportsclubPSVN.V.pursuanttowhichASMLprovidedPSVN.V.,asofAugust1,2011, witha14years,interestfree,subordinatedloanofEUR5.0million.TheChairmanoftheSupervisoryBoardofASML, Mr.ArthurvanderPoelandtheChiefFinancialOfficerofASML,Mr.PeterWennink,resignedasofJune30,2012,as membersoftheSupervisoryBoardofPSVN.V.ThereforetheloanagreementwithPSVN.V.nolongerclassifiedasa relatedpartytransactionasofthedateoftheresignationofMr.VanderPoelandMr.Wennink.

Remuneration of the Supervisory Board

TheAGMdeterminestheremunerationoftheSupervisoryBoardmembers;theremunerationisnotdependentonour results.In2011,theAGMadoptedtheSupervisoryBoard'sproposaltoincreasetheSupervisoryBoard'sremuneration andalsoapprovedthepossibilitytoincreasethefeewithamaximumamountofEUR5,000inthecomingyears,

whichincreasewouldbeimplementeddependingonthecircumstances.TheSupervisoryBoarddecidedin2012to implementthisincrease,whichistobringtheSupervisoryBoard'sremunerationmoreinlinewithgeneralpracticeinthe Netherlands.

InadditiontotheirfeeasmemberoftheSupervisoryBoard,SupervisoryBoardmembersalsoreceiveafeeforeach Committeemembership,aswellasanetcostallowance.Also,oneSupervisoryBoardmemberreceivesanadditional feetocompensateforcertainobligationswhichASMLhastowardstheUSgovernmentandwhichobligationsthis memberisrequiredtofulfill.TheSupervisoryBoardremunerationisnotdependentonourfinancialresults.

NomemberoftheSupervisoryBoardpersonallymaintainsabusinessrelationshipwithASMLotherthanasamemberof theSupervisoryBoard.

TheSupervisoryBoardmembersdonotreceiveASMLshares,orrightstoacquireASMLshares,aspartoftheir remuneration.SupervisoryBoardmemberswhoacquireorhaveacquiredASMLsharesorrightstoacquireASML shares,musthavetheintentiontokeeptheseforlong-terminvestmentonly.NomemberofASML'sSupervisoryBoard currentlyownsASMLsharesorrightstoacquireASMLshares.InconcludingtransactionsinASMLshares,Supervisory BoardmembersmustcomplywithASML'sInsiderTradingRules.

DetailedinformationontheSupervisoryBoard'sremunerationcanbefoundinNote30ofthe2012StatutoryFinancial Statements,includedherein.

WithrespecttotradinginASMLfinancialinstruments,theASMLInsiderTradingRulesstipulate-amongother requirements-thatmembersoftheSupervisoryBoardmaynottradeduringthetwomonthsprecedingthepublication oftheannualresults,andneitherduringthethreeweeksbeforepublicationofthequarterlyresults.Inaddition, membersoftheSupervisoryBoardmaynotperformtransactionsinASMLfinancialinstrumentsduringtheopenperiods whentheyhaveinsideinformation.ThisrequirementisnotapplicableforSupervisoryBoardmemberswhohavea managementagreementwithanindependentthirdpartyforthemanagementofherorhisfinancialinstruments.

ASMLhasnotgrantedanypersonalloans,guarantees,ortheliketomembersoftheSupervisoryBoard.ASML's ArticlesofAssociationprovidefortheindemnificationofthemembersoftheSupervisoryBoardagainstclaimsthat areadirectresultoftheirtasksasmembersoftheSupervisoryBoard,providedthatsuchclaimisnotattributableto willfulmisconductorintentionalrecklessnessofsuchSupervisoryBoardmember.ASMLhasfurtherimplementedthe indemnificationofthemembersoftheSupervisoryBoardbymeansofseparateindemnificationagreementsforeach memberoftheSupervisoryBoard.

IV. Shareholders and General Meeting of Shareholders

Powers

AGeneralMeetingofShareholdersisheldatleastonceayearandgenerallytakesplaceinVeldhoven.Inthismeeting, atleastthefollowingitemsarediscussedand/orapproved:

• thewrittenreportoftheBoardofManagementcontainingthecourseofaffairsinASMLandtheconductofthe managementduringthepastfinancialyear;
• theadoptionoftheAnnualReports;
• thedischargeofthemembersoftheBoardofManagementinrespectoftheirmanagementduringtheprevious financialyear;
• thedischargeofthemembersoftheSupervisoryBoardinrespectoftheirsupervisionduringthepreviousfinancial year;
• ASML'sreservesanddividendpolicyandjustificationthereofbytheBoardofManagement;
• eachmaterialchangeinthecorporategovernancestructureofASML;and
• anyotheritemtheBoardofManagementortheSupervisoryBoarddeterminetoplaceontheagenda.

TheGeneralMeetingofShareholdershasfurthermore(withdueobservanceofthestatutoryprovisions)thepower:

• toresolvetoamendthearticlesofassociation;
• toresolvetodissolveASML;
• toresolvetoissuesharesifandinsofarastheBoardofManagementhasnotbeendesignatedbytheGeneral MeetingofShareholdersforthispurpose;
• toresolvetoreducetheissuedsharecapital;
• toappointmembersoftheSupervisoryBoard;
• towithdrawitsconfidenceintheSupervisoryBoard;
• toadopttheRemunerationPolicyformembersoftheBoardofManagement;and

• todeterminetheremunerationofthemembersoftheSupervisoryBoard.

TheBoardofManagementrequirestheapprovaloftheGeneralMeetingofShareholdersandtheSupervisoryBoardfor resolutionsregardingasignificantchangeintheidentityorcharacterofASMLoritsbusiness,includinginanyevent:

• atransferofthebusinessorvirtuallyallofthebusinesstoathirdparty;
• entryintoorterminationoflong-termcooperationbyASMLorasubsidiarywithanotherlegalentityorpartnershipor asageneralpartnerwithfullliabilityinalimitedorgeneralpartnershipifsuchcooperationortheterminationthereof isoffar-reachingsignificanceforASML;and
• anacquisitionordisposalbyASMLorasubsidiaryofaparticipationinthecapitalofanothercompany,thevalue ofwhichequalsatleastonethirdoftheamountoftheassetsaccordingtotheConsolidatedBalanceSheet(inthe ConsolidatedFinancialStatementsreferredtoas"StatementofFinancialPosition")withexplanatorynotesattached totheAnnualReportasmostrecentlyadopted.

ProposalsplacedontheagendabytheSupervisoryBoard,theBoardofManagement,orbyshareholders,providedthat theyhavesubmittedtheproposalsinaccordancewiththeapplicablelegalprovisions,arediscussedandresolvedupon. Shareholdersrepresentingatleast1percentageofASML'soutstandingsharecapitalorrepresentingasharevalueofat leastEUR50.0millionareentitledtoplaceagendaitemsontheAGMagendaatthelatestsixtydaysbeforetheAGM. Althoughnewlegislation,effectiveperJanuary1,2013,hasincreasedthepercentagefrom1to3,ASML'sarticlesof associationstillreflectthe'old'requirementof1percentandEUR50.0million,andthereforethisremainsapplicablefor ASML.Abouttwoweeksbeforetheclosingofthissixtydaysterm,ASMLnotifiesitsshareholdersabouttheclosingof thetermonitswebsite.

ArecurringagendaitemisthelimitedauthorizationfortheBoardofManagementtoissue(rightsto)sharesinour capital,andtoexcludepre-emptiveshareholdersrightsforsuchissuances.Thisagendaitemincludestwoelements:1) theauthorizationtotheBoardofManagementtoissue5.0percent(rightsto)sharesofASML'sissuedsharecapitalas ofthedateofauthorization,plusanadditional5.0percentofASML'sissuedsharecapitalasofthedateofauthorization thatmaybeissuedinconnectionwithmergers,acquisitionsand/or(strategic)alliances;and2)theauthorizationto excludepre-emptiverightsinrelationtotheaboveshareissue,withamaximumof10.0percentofASML'sissuedshare capitalasofthedateofauthorization.

Asimplemajorityisrequiredfortheauthorizationtoissueshares;fortheauthorizationtoexcludethepre-emptiverights asimplemajorityisrequiredincaseatleastfiftypercentofASML'sissuedsharecapitalispresentorrepresentedat theAGM;otherwiseamajorityoftwothirdsofthevotescastisrequired.TheBoardofManagementmustobtainthe approvaloftheSupervisoryBoardfortheissuanceofASMLsharesaswellasforexcludingthepre-emptiverights.

ItisimportantforASMLtobeabletoissue(rightsto)sharesandtoexcludethepre-emptiveshareholders'rights insituationswhereitisimperativetobeabletoactquickly,forexamplewhenfinancialopportunitiesariseorwhen stock(option)plansneedtobeexecutedtoattractandretaintoptalent.Thisauthorizationhasbeenusedinthepast especiallytooptimizethefinancialpositionofASML.Giventhedynamicsoftheglobalcapitalmarkets,suchfinancing transactionsgenerallyneedtobeexecutedintheshortestwindowofopportunity.Theopportunitytoissuesharesor rightstoshares,suchasconvertiblebonds,wouldbelimitedifASMLneededaresolutionoftheGeneralMeetingof Shareholderstoissuesharesand/ortoexcludetheshareholders'pre-emptiverightsandmaythushinderthefinancial flexibilityofASML.

Anotheragendaitemin2013willbetheproposaltoadoptthedividendproposal,ascommunicatedinASML'spress releaseonJanuary17,2013.

Inadditiontodividendpayments,ASMLalsointendstoreturncashtoitsshareholdersonaregularbasisthroughshare buybacksorrepaymentofcapital,subjecttoitsactualandanticipatedlevelofcashgeneratedfromoperations,thecash requirementsforinvestmentinitsbusiness,itscurrentsharepriceandothermarketconditionsandrelevantfactors.

OnApril25,2012,theGeneralMeetingofShareholdersauthorizedtherepurchaseofuptoamaximumoftwotimes10.0 percentofourissuedsharecapitalasofthedateofauthorizationthroughOctober25,2013andthecancellationofa maximumoftwotimes10.0percentofourissuedsharecapital.

Alsoin2013,therequesttogranttheBoardofManagementtheauthoritytorepurchasesharesinitsowncapitalshall beputontheAGMagenda.Asimplemajorityisrequiredfortheauthorization.TheBoardofManagementmustobtain theapprovaloftheSupervisoryBoardforeachrepurchaseofASMLshares.Theauthorizationtoberequestedwillbe limitedinaccordancewiththecurrentarticlesofassociationofASMLandthelaw.Aproposaltocanceltherepurchased sharessubjecttoaresolutionoftheBoardofManagementwillalsobeputontheAGMagenda.

TheBoardofManagementorSupervisoryBoardmayconveneExtraordinaryGeneralMeetings("EGMs")asoftenasthey deemnecessary.Suchmeetingsmustbeheldifoneormoreshareholdersandothersentitledtoattendthemeetings jointlyrepresentingatleastone-tenthoftheissuedsharecapitalmakeawrittenrequesttothateffecttotheBoardof ManagementandtheSupervisoryBoard,specifyingindetailtheitemstobediscussed.

In2012anEGMwasheldonSeptember7,2012-inconnectionwiththeCCIP-toapprovetheissueofamaximum of25.0percentofASML'soutstandingsharecapital,andtoapprovethevariousamendmentsofASML'sArticlesof AssociationfortheexecutionoftheSyntheticShareBuybackaspartoftheCCIP.

Logistics of the General Meeting of Shareholders

TheconvocationdatefortheAGMislegallysetatforty-twodays,andtherecorddateattwenty-eightdaysbeforethe AGM.Thosewhoareregisteredasshareholdersattherecorddateareentitledtoattendthemeetingandtoexercise othershareholderrights.

TheBoardofManagementandSupervisoryBoardshallprovidetheshareholderswiththefactsandcircumstances relevanttotheproposedresolutions,throughanexplanationtotheagenda,aswellasthroughotherdocuments necessaryand/orhelpfulforthispurpose.AlldocumentsrelevanttotheGeneralMeetingofShareholders,includingthe agendawithexplanations,shallbepostedintheInvestorRelationsandCorporateGovernancesectionsonourwebsite. Theagendaclearlyindicateswhichagendaitemsarevotingitems,andwhichitemsarefordiscussiononly.

ASMLshareholdersmayappointaproxywhocanvoteontheirbehalfintheGeneralMeetingofShareholders.ASML alsousesaninternetproxyvotingsystem,thusfacilitatingshareholderparticipationwithouthavingtoattendinperson. Shareholderswhovotedthroughinternetproxyvotingarerequired,however,toappointaproxytoofficiallyrepresent themattheGeneralMeetingofShareholdersinperson.ASMLalsoprovidesthepossibilityforshareholderstoissue votingproxiesorvotinginstructionstoanindependentthirdparty(civillawnotary)priortotheAGM.

ResolutionspassedattheGeneralMeetingofShareholdersshallberecordedbyacivillawnotaryandco-signedbythe ChairmanofthemeetingandwillthereafterbemadeavailableonourwebsitewithintwoweeksaftertheAGM.

ThedraftminutesoftheGeneralMeetingofShareholdersareavailableviaourwebsite,andalsouponrequestvia mailore-mail,nolaterthanthreemonthsafterthemeeting.Shareholdersaregiventheopportunitytoprovidetheir commentsinthesubsequentthreemonths,andthereaftertheminutesareadoptedbytheChairmanandtheSecretary ofthemeeting.Theadoptedminutesarealsoavailableonourwebsiteand,uponrequest,viaregularmailore-mail.

Information to the Shareholders

Toensurefairdisclosure,ASMLdistributesCompanyinformationthatmayinfluencethesharepricetoshareholdersand otherpartiesinthefinancialmarketssimultaneouslyandthroughmeansthatarepublictoallinterestedparties.Incase ofbilateralcontactswithshareholders,wefollowtheprocedurerelatedtheretoaspublishedonourwebsite.

Whenourannualandquarterlyresultsarepublishedbymeansofapressrelease,interestedparties,including shareholders,canparticipatethroughconferencecalls,listentoawebcastandviewthepresentationoftheresultson ourwebsite.Thescheduleforcommunicatingtheannualfinancialresultsisingeneralpublishedthroughapressrelease andispostedonourwebsite.Inaddition,weprovideinformationtoourshareholdersatourAGM.Alsowepublisha SustainabilityReportonourwebsiteeveryyear,reportingonEnvironmental,Health,SocialandSafetyperformance.

Itisourpolicytopostthepresentationsgiventoanalystsandinvestorsatinvestorconferencesonourwebsite. Informationregardingpresentationstoinvestorsandanalystsandconferencecallsareannouncedinadvanceonour website;fordetailsseeourfinancialcalendaraspublishedintheInvestorRelationssectiononourwebsite.Meetings anddiscussionswithinvestorsandanalystsshall,inprinciple,nottakeplaceshortlybeforepublicationofregular financialinformation.Wedonotassess,commentupon,orcorrectanalysts'reportsandvaluationsinadvance,other thantocommentonfactualerrors.Wedonotpayanyfeestopartiescarryingoutresearchforanalysts'reports,orfor theproductionorpublicationofanalysts'reports,andtakenoresponsibilityforthecontentofsuchreports.

AttheGeneralMeetingofShareholders,theBoardofManagementandtheSupervisoryBoardprovideshareholderswith allrequestedinformation,unlessthisiscontrarytoanoverridinginterestofASML.Ifthisshouldbethecase,theBoard ofManagementandSupervisoryBoardwillprovidetheirreasonsfornotprovidingtherequestedinformation.

Furthermore,theCorporateGovernancesectiononourwebsiteprovideslinkstowebsitesthatcontaininformation aboutASMLpublishedorfiledbyASMLinaccordancewithapplicablerulesandregulations.

ASML'sonlyanti-takeoverdeviceisthePreferenceSharesFoundation.ThemechanismsofthisFoundationare describedinmoredetailinthenextchapteronrequiredinformationArticle10TakeoverDirectiveandthe2012Annual Reports.

Relationship with Institutional Investors

ASMLfindsitimportantthatitsinstitutionalinvestorsparticipateinourGeneralMeetingsofShareholders.Toincrease theparticipationrate,severalmeasureshavebeentakeninthepastfewyears,includingprovidinginternetproxyvoting. Inaddition,weactivelyapproachourinstitutionalinvestorstodiscusstheirparticipationattheGeneralMeetingsof Shareholders.

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

Financial Reporting

ASMLhascomprehensiveinternalproceduresinplaceforthepreparationandpublicationofAnnualReports,quarterly figures,andallotherfinancialinformation.TheseinternalproceduresarefrequentlydiscussedintheAuditCommittee andtheSupervisoryBoard.TheDisclosureCommitteeassiststheBoardofManagementinoverseeingASML's disclosureactivitiesandensurescompliancewithapplicabledisclosurerequirementsarisingunderU.S.andDutchlaw andregulatoryrequirements.

TheAuditCommitteereviewsandapprovestheexternalauditor'sAuditPlanfortheauditsplannedduringthefinancial year.TheAuditPlanalsoincludestheactivitiesoftheexternalauditorwithrespecttotheirreviewsofthequarterly resultsotherthantheannualaccounts.Thesereviewsarebasedonagreeduponproceduresandareapprovedbythe AuditCommittee.TheexternalauditorregularlyupdatestheAuditCommitteeontheprogressoftheauditsandother activities.

TheSupervisoryBoardhasreviewedourStatutoryAnnualReportforthefinancialyear2012aspreparedbytheBoardof Management.Deloittehasdulyexaminedourfinancialstatements,andtheAuditor'sReportisincludedintheStatutory FinancialStatements.

Appointment, Role, Assessment of the Functioning of the External Auditor, and the Auditor's Fee

InaccordancewithDutchlaw,ASML'sexternalauditorisappointedbytheGeneralMeetingofShareholdersand isnominatedforappointmentbytheSupervisoryBoarduponadvicefromtheAuditCommitteeandtheBoardof Management.ASML'scurrentexternalauditor,DeloitteAccountantsB.V.("Deloitte"),wasre-appointedbythe2012AGM foradefiniteperiodofoneyear,untilthe2013AGM.Theproposaltoreappointtheexternalauditorforanotherdefinite termof1year,willbeputontheagendaforthe2013AGM.

End2011/early2012,theAuditCommitteeandtheBoardofManagementconductedanextensiveassessmentwith respecttotheperformanceoftheexternalauditorovertheperiod2007to2011.Therefore,theAuditCommitteewill onlyconductalimitedassessmentoverthepastyearafterfinalizationoftheauditoverthefinancialyear2012,by meansofadiscussionwithmembersoftheBoardofManagementandrelevantmembersofseniormanagementof ASML.

Annually,theBoardofManagementandtheAuditCommitteeprovidetheSupervisoryBoardwithareportonthe relationshipwiththeexternalauditor,includingtherequiredauditorindependence.TodeterminetheExternalAuditor's independence,therelationshipbetweentheauditservicesandthenon-auditservicesprovidedbytheexternalauditor isimportant,aswellastherotationoftheresponsibleleadauditpartnereveryfiveyears.Non-auditservices(mainly taxrelatedfees)performedbytheexternalauditorcomprised28.5percentoftheexternalauditor'sservicesin2012. Basedonamongstotherstheproportionauditfeesversusnon-auditrelatedfees,itwasconcluded-andconfirmedby theexternalauditor-thattheexternalauditoractsindependently.

TheexternalauditorispresentatourAGMtorespondtoquestions,ifany,fromtheshareholdersabouttheauditor's reportontheStatutoryFinancialStatements.

TheAuditCommittee,onbehalfoftheSupervisoryBoard,approvedtheremunerationoftheexternalauditoraswell asthenon-auditservicesperformed,afterconsultationwiththeBoardofManagement.Ithasbeenagreedamong themembersoftheSupervisoryBoardandtheBoardofManagementthattheAuditCommitteehasthemostrelevant insightandexperiencetobeabletoapprovebothitems,andthereforetheSupervisoryBoardhasdelegatedthese responsibilitiestotheAuditCommittee.

Asof2013,theAuditCommitteewillmonitorcompliancewiththenewDutchrulesonnon-auditservicesprovidedby ourauditor,whichoutlinesstrictseparationofauditandadvisoryservicesforDutchpublicinterestentities.Furthermore, wewillevaluatetheimplicationofthemandatoryfirmrotation(notapplicabletofinancialyearsbeforeJanuary1,2016) whichappliestoallDutchpublicinterestentities.

InprincipletheexternalauditorattendsallmeetingsoftheAuditCommittee,unlessthisisdeemednotnecessarybythe AuditCommittee.Thefindingsoftheexternalauditorarediscussedatthesemeetings.

TheAuditCommitteereportsonallissuesdiscussedwiththeexternalauditortotheSupervisoryBoard,includingthe externalauditor'sreportwithregardtotheauditoftheAnnualReportsaswellasthecontentoftheAnnualReports. Intheauditreport,theexternalauditorreferstothefinancialreportingrisksandissuesthatwereidentifiedduringthe audit,internalcontrolmatters,andanyothermattersrequiringcommunicationundertheauditingstandardsgenerally acceptedintheNetherlandsandintheUnitedStates.

Internal Audit Function

TheinternalauditfunctionofASMLformsoneofthekeyelementstoaddressthetopicsofriskmanagementand internalcontroloverfinancialreportingasrequiredundertheCodeandtheSarbanes-OxleyAct,respectively.To ensuretheindependenceofthisfunction,theSeniorDirectorCorporateRiskandAssurancereportstotheBoardof ManagementandtheAuditCommittee.TheAuditCommitteeisinvolvedindrawinguptheworkscheduleandaudit scopeoftheinternalauditor.TheinternalauditorregularlyprovidesupdatesonitsfindingstotheAuditCommittee.

VI. Required information Article 10 Takeover Directive

General

TheEUTakeoverDirectiverequiresthatlistedcompaniespublishadditionalinformationprovidinginsightintodefensive structuresandmechanismswhichtheyapply.TherelevantprovisionhasbeenimplementedintoDutchlawbymeansof adecreeofApril5,2006.Pursuanttothisdecree,Dutchcompanieswhosesecuritieshavebeenadmittedtotradingon aregulatedmarkethavetoincludeinformationintheirAnnualReportwhichcouldbeofimportanceforpersonswhoare consideringtakinganinterestinthecompany.

Thisinformationcomprisesamongstotherthings:

• thecapitalstructureofthecompany;
• restrictionsonthetransferofsecuritiesandonvotingrights;
• specialpowersconferredupontheholdersofcertainshares;
• therulesgoverningtheappointmentanddismissalofboardmembersandtheamendmentofthearticlesof association;
• therulesontheissuingandtherepurchasingofsharesbythecompany;
• significantagreementstowhichthecompanyisapartyandwhichcontainchangeofcontrolrights(exceptwhere theirnatureissuchthattheirdisclosurewouldbeseriouslyprejudicialtothecompany);and
• agreementsbetweenthecompanyanditsboardmembersoremployeesprovidingfora"goldenparachute".

InthissectiontheBoardofManagementandtheSupervisoryBoardprovideforanexplanationtotheinformation-if applicabletoASML-asrequiredundertheResolutionArticle10oftheTakeoverDirective.

Share capital

ASML'sauthorizedsharecapitalamountstoEUR126,000,000andisdividedinto:

• 700,000,000cumulativepreferenceshareswithanominalvalueofEUR0.09each;
• 699,999,000ordinaryshareswithanominalvalueofEUR0.09each;and
• 9,000ordinarysharesBwithanominalvalueofEUR0.01each.

PerDecember31,2012,419,852,467ordinaryshareswithanominalvalueofEUR0.09eachwereissuedandfullypaid in,ofwhich12,687,246ordinarysharesareheldbyusintreasury.NoordinarysharesBandnocumulativepreference sharesareissued.96,566,077depositaryreceiptsforordinarysharesareissuedwithourcooperation.

OurBoardofManagementhasthepowertoissueordinarysharesandcumulativepreferencesharesinsofarasthe BoardofManagementhasbeenauthorizedtodosobytheGeneralMeetingofShareholders(eitherbymeansofa resolutionorbyanamendmenttoourArticlesofAssociation).TheBoardofManagementrequiresapprovalofthe SupervisoryBoardforsuchanissue.TheauthorizationbytheGeneralMeetingcanonlybegrantedforacertain periodnotexceedingfiveyearsandmaybeextendedfornolongerthanfiveyearsoneachoccasion.Incasethe GeneralMeetingofShareholdershasnotauthorizedtheBoardofManagementtoissueshares,theGeneralMeetingof ShareholdersshallhavethepowertoissuesharesupontheproposaloftheBoardofManagement,providedthatthe SupervisoryBoardhasapprovedsuchproposal.

Shares issued in Customer Co-Investment Program

OnSeptember12,2012,weissued62,977,877ordinarysharestoStichtingAdministratiekantoorMAKTSJAB("Intel Stichting")and12,595,575ordinarysharestoStichtingAdministratiekantoorSamsungandonOctober31,2012,ASML issued20,992,625ordinarysharestoStichtingAdministratiekantoorTSMCwithrespecttotheCustomerCo-Investment Program.WereceivedanamountofEUR3,853.9millioninrelationtothesharesissuedundertheCustomerCo-InvestmentProgram.ForfurtherdetailsonourCustomerCo-InvestmentProgramseeNote28.

Synthetic Share Buyback

AttheExtraordinaryGeneralMeetingofShareholders("EGM")heldonSeptember7,2012,severalchangesin theArticlesofAssociationofASMLwereadopted,inconnectionwiththeSyntheticShareBuybackeffectuatedin connectionwiththeCustomerCo-InvestmentProgram.Consequently,onNovember24,2012theArticlesofAssociation wereamendedasfollows.Uponthefirstamendmenttheordinarysharestobeheldforthebenefitoftheparticipants totheCustomerCo-InvestmentProgramwereconvertedintoordinarysharesMandallotherordinaryshareswere convertedintoordinarysharesA.UponthesecondamendmenttheparvalueperordinaryshareAwasincreasedfrom EUR0.09toEUR9.24attheexpenseofthesharepremiumreserve.Uponthethirdamendment,thenominalvalueper ordinaryshareAwasreducedtoanamountofEUR0.06,bydecreasingthenominalvalueperordinaryshareAbyan amountofEUR9.18,whichresultedinarepaymentofthesameamountpersharetoholdersofordinarysharesinto whichtheordinarysharesAwereconverted.Thefourthamendmentprovidedfortheconsolidationoftheordinaryshares Athroughtheexchangeofeach100ordinarysharesfor77ordinaryshares,resultinginanincreaseofthenominalvalue perordinarysharefromEUR0.06toEUR0.09,wherebytheaggregatedifferenceisbookedattheexpenseoftheshare premiumreserve.ThefifthandlastamendmentprovidedforthedeletionoftheshareclassMforparticipantstothe CustomerCo-InvestmentProgramandtheshareclassAfortheothershareholders.TheordinarysharesMandAwere convertedthereafterintoordinaryshareswithoutaspecificlettermarkattachedtoit.

TheseamendmentsinsubstanceconstituteaSyntheticShareBuybackinwhichweeffectivelyrepurchased93,411,216 sharesatanaveragepriceofEUR39.91foratotalamountofEUR3,728.3million.ThedifferenceofEUR125.6million betweenthecapitalrepaymentofEUR3,728.3millionandthenetproceedsfromissuanceofsharesofEUR3,853.9 millionrelatestothecapitalrepaymentonASML'streasuryshareswhichwasalsopartoftheSyntheticShareBuyback.

Ordinary shares

Eachordinaryshareconsistsof900fractionalshares.Fractionalsharesentitletheholderthereoftoafractionaldividend butdonotentitletheholderthereoftovotingrights.Onlythosepersonswhoholdsharesdirectlyintheshareregister intheNetherlands,heldbyusatouraddressat5504DRVeldhoven,deRun6501,theNetherlands,orintheNewYork shareregister,heldbyJPMorganChaseBank,N.A.,P.O.Box64506,St.Paul,MN55164-0506,UnitedStates,can holdfractionalshares.PersonswhoholdordinarysharesthroughthedepositsystemundertheDutchSecuritiesBank GiroTransactionsAct(Wetgiraaleffectenverkeer;the"GiroAct")maintainedbytheDutchcentralsecuritiesdepository (NederlandsCentraalInsituutvoorGiraalEffectenverkeerB.V.,"EuroclearNederland")orthroughtheDepositaryTrust Company("DTC")cannotholdfractionalshares.Anordinaryshareentitlestheholderthereoftocastninevotesinthe GeneralMeetingofShareholders.AtourEGMheldonSeptember7,2012,theBoardofManagementwasauthorized fromSeptember7,2012throughOctober25,2013,subjecttotheapprovaloftheSupervisoryBoard,toissueshares and/orrightstheretorepresentinguptoamaximumof5.0percentofourissuedsharecapitalatApril25,2012,plus anadditional5.0percentofourissuedsharecapitalatApril25,2012thatmaybeissuedinconnectionwithmergers, acquisitionsand/or(strategic)alliances.

HoldersofASML'sordinaryshareshaveapreemptiverightofsubscription,inproportiontotheaggregatenominal amountoftheordinarysharesheldbythem,toanyissuanceofordinarysharesforcash,whichrightmayberestricted orexcluded.Ordinaryshareholdershavenoproratapreemptiverightofsubscriptiontoanyordinarysharesissuedfor considerationotherthancashorordinarysharesissuedtoemployees.IfauthorizedforthispurposebytheGeneral MeetingofShareholders(eitherbymeansofaresolutionorbyanamendmenttoourArticlesofAssociation),theBoard ofManagementhasthepowersubjecttoapprovaloftheSupervisoryBoard,torestrictorexcludethepreemptiverights ofholdersofordinaryshares.AtourEGMheldonSeptember7,2012,theBoardofManagementwasauthorizedfrom September7,2012throughOctober25,2013,subjecttoapprovaloftheSupervisoryBoard,torestrictorexclude preemptiverightsofholdersofordinarysharesuptoamaximumof10.0percentofourissuedsharecapitalatApril25, 2012.Withthisauthorization,thecorrespondingauthorizationgrantedattheAGMheldonApril25,2012,ceasedto applytotheextentnotalreadyused.

Wemayrepurchaseourissuedordinarysharesatanytime,subjecttocompliancewiththerequirementsofDutchlaw andourArticlesofAssociation.AnysuchrepurchasesareandremainsubjecttotheapprovaloftheSupervisoryBoard andtheauthorizationofshareholdersatASML'sAGM,whichauthorizationmaynotbeformorethan18months.Atthe AGMheldonApril25,2012,theBoardofManagementhasbeenauthorized,subjecttoSupervisoryBoardapproval,to repurchasethroughOctober25,2013,uptoamaximumoftwotimes10.0percentofourissuedsharecapitalatApril 25,2012,atapricebetweenthenominalvalueoftheordinarysharespurchasedand110.0percentofthemarketprice ofthesesecuritiesonNYSEEuronextAmsterdamorNASDAQ.AtourAGMtobeheldonApril24,2013,weshallrequest theauthorizationfortheBoardofManagementtorepurchaseandcancelsharesforaperiodof18monthsasofthe 2013AGM,i.e.untilOctober24,2014,allinconformitywiththeprovisionsofthelawandourArticlesofAssociation.

OnOctober16,2012,weenteredintoamergeragreementwithCymer,acompanyengagedinthedevelopment, manufacturingandmarketingoflightsourcesforsaletocustomerswhomanufacturephotolithographytoolsinthe semiconductorequipmentindustry(the"MergerAgreement"),underwhichASMLwillacquirealloutstandingshares ofcommonstockofCymerforaconsiderationperCymershareofCymercommonstockofUSD20.00incashand afixedratioof1.1502ASMLOrdinaryShares.ASMLwillthenissueuptoamaximumof41,985,250ordinaryshares toCymershareholders.Completionoftheacquisitionissubjecttocustomaryclosingconditions,includingexpiration orterminationoftheapplicablewaitingperiodundertheHart-Scott-RodinoActandreceiptofapprovalsunderother foreigncompetitionlaws.Onfebruary5,2013,theCymerStockholdersapprovedthemergeragreement.Weexpect thetransactiontocloseinthefirsthalfof2013,thereisnoassurancethatthetransactionwillbecompletedwithinthe expectedtimeperiodoratall.

Ordinary shares B

AspartofthemostrecentchangesinourArticlesofAssociation,adoptedattheEGMheldonSeptember7,2012, the9,000ordinarysharesBwithanominalvalueofEUR0.01wereintroduced.Apersonwhoholds(amultipleof)100 fractionalshares,mayexchangethosefractionalsharesforanordinaryshareB.EveryholderofanordinaryshareBis entitledtoone-ninth(1/9)ofadividend.EachordinaryshareBentitlestheholderthereoftocastonevoteattheGeneral Meeting.

Special voting rights on the issued shares

Therearenospecialvotingrightsontheissuedsharesinoursharecapital.

Limitation voting rights on Ordinary Shares indirectly held by the Participating Customers

PursuanttotheIntelShareholderAgreement,Intel(andtheIntelStichting)willnotbeentitledtovotetheordinary sharesthatacquiredbytheIntelStichtingaspartoftheCustomerCo-InvestmentProgramoranyotherordinaryshares otherwisetransferredtotheIntelStichting(underthecircumstancesdescribedunder"Standstill;AdditionalPurchases", inNote35)priortoaShareholderAgreementTerminationEvent(seeNote35),exceptwhenaSuspensionEvent(see Note35)occursandiscontinuingorwherethefollowingmattersareproposedatanyGeneralMeeting(the"Voting Restrictions"):(i)anissuanceofASMLsharesorgrantofrightstosubscribeforASMLsharesrepresenting25percent ormoreoftheissuedandoutstandingsharecapitalofASMLortherestrictionorexclusionofpre-emptionrights relatingthereto(ineachcase,onanaggregatebasisduringthepreceding12months)orthedesignationoftheBoardof Managementastheauthorizedbodytoresolveonthesematters;(ii)anauthorizationtorepurchase25percentormore ofASML'sissuedandoutstandingsharecapitalonanaggregatebasisduringthepreceding12months;(iii)theapproval ofasignificantchangeintheidentityornatureofASMLoritsbusiness,includingatransferofallorsubstantiallyall businessorassetsofASMLanditssubsidiariestoathirdparty,theestablishmentorcancellationofalong-lasting cooperationofessentialimportancewithathirdpartyandanacquisitionordispositionofaninterestinthecapitalor assetsofapersonwithavalueofatleastonethirdoftheassetsofASML(onaconsolidatedbasis);(iv)anamendment toASML'sArticlesofAssociationthatwouldmateriallyaffectthespecificvotingrightsofIntel,wouldmateriallyaffect theidentityornatureofASMLoritsbusiness,orwoulddisproportionately(oruniquely)andadverselyaffecttherights orbenefitsattachedtoorderivedfromtheordinarysharesheldbyIntelthroughtheIntelStichtingascomparedtothe shareholders;(v)thedissolutionofASML;and(vi)anymergerordemergerwhichwouldresultinamaterialchangeinthe identityornatureofASMLoritsbusiness.

TheshareholderagreementsbetweenASMLandtheotherprogramparticipants(TSMCandSamsung)areon substantiallythesametermsasthoseagreedwithIntel.

Cumulative preference shares

In1998,wegrantedtothepreferencesharefoundation,"StichtingPreferenteAandelenASML"(the"Foundation")an optiontoacquirecumulativepreferencesharesinourcapital(the"PreferenceShareOption").Thisoptionwasamended andextendedin2003and2007.AthirdamendmenttotheoptionagreementbetweentheFoundationandASML

becameeffectiveonJanuary1,2009,toclarifytheprocedurefortherepurchaseandcancellationofthepreference shareswhenissued.

PertheamendmentofourArticlesofAssociationofMay6,2011,thenominalvalueofthecumulativepreferenceshares wasincreasedtoEUR0.09.Thenumberofcumulativepreferencesharesincludedintheauthorizedsharecapitalwas decreasedto700,000,000.ThiswasdonetosimplifytheArticlesofAssociation,andtogiveeachsharetherighttocast onevoteintheGeneralMeetingofShareholders.

TheFoundationmayexercisethepreferenceshareoptioninsituationswhere,intheopinionoftheBoardofDirectors oftheFoundation,ourinterests,ourbusinessortheinterestsofourstakeholdersareatstake.Thismaybethecase ifapublicbidforourshareshasbeenannouncedorhasbeenmade,orthejustifiedexpectationexiststhatsucha bidwillbemadewithoutanyagreementhavingbeenreachedinrelationtosuchabidwithus.Thesamemayapplyif oneshareholder,ormoreshareholdersactinginconcert,holdasubstantialpercentageofourissuedordinaryshares withoutmakinganofferorif,intheopinionoftheBoardofDirectorsoftheFoundation,the(attempted)exerciseofthe votingrightsbyoneshareholderormoreshareholders,actinginconcert,ismateriallyinconflictwithourinterests,our businessorourstakeholders.

TheobjectivesoftheFoundationaretolookaftertheinterestsofASMLandoftheenterprisesmaintainedbyASML andofthecompanieswhichareaffiliatedinagroupwithASML,insuchawaythattheinterestsofASML,ofthose enterprisesandofallpartiesconcernedaresafeguardedinthebestpossibleway,andinfluencesinconflictwiththese interestswhichmightaffecttheindependenceortheidentityofASMLandthosecompaniesaredeterredtothebest oftheFoundation'sability,andeverythingrelatedtotheaboveorpossiblyconducivethereto.TheFoundationseeksto realizeitsobjectsbytheacquiringandholdingofcumulativepreferencesharesinthecapitalofASMLandbyexercising therightsattachedtotheseshares,particularlythevotingrightsattachedtotheseshares.

ThepreferenceshareoptiongivestheFoundationtherighttoacquireanumberofcumulativepreferencesharesasthe Foundationwillrequire,providedthattheaggregatenominalvalueofsuchnumberofcumulativepreferenceshares shallnotexceedtheaggregatenominalvalueoftheordinarysharesthathavebeenissuedatthetimeofexerciseofthe PreferenceShareOptionforasubscriptionpriceequaltotheirnominalvalue.Onlyone-fourthofthesubscriptionprice ispayableatthetimeofinitialissuanceofthecumulativepreferenceshares,withtheotherthree-fourthsofthenominal valueonlybeingpayablewhenwecallupthisamount.Exerciseofthepreferenceshareoptioncouldeffectivelydilute thevotingpoweroftheoutstandingordinarysharesbyone-half.

CancellationandrepaymentoftheissuedcumulativepreferencesharesbyusrequirestheauthorizationbytheGeneral MeetingofShareholdersofaproposaltodosobytheBoardofManagementapprovedbytheSupervisoryBoard.If thepreferenceshareoptionisexercisedandasaresultcumulativepreferencesharesareissued,we,attherequestof theFoundation,willinitiatetherepurchaseorcancellationofallcumulativepreferencesharesheldbytheFoundation. Inthatcaseweareobligedtoeffecttherepurchaseandcancellationrespectivelyassoonaspossible.Acancellation willhaveasaresultarepaymentoftheamountpaidandexemptionfromtheobligationtopayuponthecumulative preferenceshares.Arepurchaseofthecumulativepreferencesharescanonlytakeplacewhensuchsharesarefully paidup.

IftheFoundationwillnotrequestustorepurchaseorcancelallcumulativepreferencesharesheldbytheFoundation within20monthsafterissuanceoftheseshares,wewillbeobligedtoconveneaGeneralMeetingofShareholdersin ordertodecideonarepurchaseorcancellationoftheseshares.

TheFoundationisindependentofASML.TheBoardofDirectorsoftheFoundationcomprisesfourindependentvoting membersfromtheDutchbusinessandacademiccommunities.AsofJanuary1,2012,themembersoftheBoardof DirectorsoftheFoundationare:Mr.A.Baan,Mr.M.W.denBoogert,Mr.J.M.deJongandMr.A.H.Lundqvist.

Limitations to transfers of shares in the share capital of ASML

Therearecurrentlynolimitations,eitherunderDutchlaworintheArticlesofAssociationofASML,astothetransferof sharesinthesharecapitalofASML.

Reporting obligations under the Act on the supervision of financial markets (Wet op het financieel toezicht, the-FMSA-)

HoldersofoursharesmaybesubjecttoreportingobligationsundertheFMSA.Thedisclosureobligationsunderthe FMSAapplytoanypersonorentitythat,directlyorindirectly,acquires,holdsordisposesofaninterestinthevoting rightsand/orthecapitalofapubliclimitedcompanyincorporatedunderthelawsofTheNetherlandswhosesharesare admittedtotradingonaregulatedmarketwithintheEuropeanUnion(the"EU"),suchasASML.Disclosureisrequired whenthepercentageofvotingrightsorcapitalinterestofapersonoranentityreaches,exceedsorfallsbelow5,10,

15,20,25,30,40,50,60,75or95percent(asaresultofanacquisitionordisposalbysuchperson,orasaresultofa changeinourtotalnumberofvotingrightsorcapitalissued).

Alegislativeproposalpursuanttowhichaninitialthresholdof3.0percentwillbeintroducedhasbeenadoptedand iscurrentlyexpectedtoenterintoforceonJuly1,2013.Thisproposalwouldalsointroduceamechanismpursuant towhichASMLisabletoidentify,andcommunicatewith,beneficialholdersofitssharesthroughtherespective custodians.ASMLisrequiredtonotifytheDutchAuthorityfortheFinancialMarkets(AutoriteitFinancieleMarkten, the"AFM")immediatelyifourvotingrightsand/orcapitalhavechangedby1.0percentormoresinceourprevious notificationonoutstandingvotingrightsandcapital.Inaddition,ASMLmustnotifytheAFMofchangesoflessthan 1.0percentinASML'soutstandingvotingrightsandcapitalatleastoncepercalendarquarter,withineightdaysafter theendofthequarter.Anypersonwhosedirectorindirectvotingrightsand/orcapitalinterestsmeetsorpassesthe thresholdsreferredtohere-aboveasaresultofachangeintheoutstandingvotingrightsorcapitalmustnotifytheAFM nolaterthanthefourthtradingdayaftertheAFMhaspublishedsuchachange.

AccordingtoAFM'spublicregistry(www.afm.nl/registers)onDecember31,2012,thefollowingnotificationsofvoting rightsorcapitalinterestabove5percenthavebeenmadepursuanttotheFMSA:

	Voting
Identity of Person or Group	rights
CapitalGroupInternational,Inc1	12.26%
StichtingAdministratiekantoorMAKTSJAB/Intel2	15.00%
StichtingAdministratiekantoorTSMC/TSMC2	5.00%
BlackRockInc	5.24%

1 CapitalResearch&ManagementCompany("CRMC"),whichwebelievetobeanaffiliateofCapitalGroupInternational,Inc.,reportedtotheDutch AuthorityfortheFinancialMarketsonAugust2,2011,thatitholdsvotingrightsof10.03%.

2 StichtingAdministratiekantoorMAKTSJABandStichtingAdministratiekantoorTSMCownordinarysharesandhavesimultaneouslyissued correspondingdepositoryreceiptstoIntelrespectivelyTSMC.

Appointment of Board of Management and Supervisory Board

BoardofManagement

TherulesgoverningtheappointmentanddismissalofmembersoftheBoardofManagementaredescribedinsectionII. above.

SupervisoryBoard

TherulesgoverningtheappointmentanddismissalofmembersoftheSupervisoryBoardaredescribedinsectionIII. above.

AmendmentoftheArticlesofAssociation

TheGeneralMeetingofShareholderscanresolvetoamendourArticlesofAssociation.The(proposed)amendment requirestheapprovaloftheSupervisoryBoard.

AresolutiontoamendtheArticlesofAssociationisadoptedataGeneralMeetingofShareholdersatwhichmorethan onehalfoftheissuedsharecapitalisrepresentedandwithatleastthree-fourthsofthevotescast;iftherequiredshare capitalisnotrepresentedatameetingconvenedforthatpurpose,asubsequentmeetingshallbeconvened,tobeheld withinfourweeksofthefirstmeeting,atwhich,irrespectiveofthesharecapitalrepresented,theresolutioncanbe adoptedwithatleastthree-fourthsofthevotescast.IfaresolutiontoamendtheArticlesofAssociationisproposed bytheBoardofManagement,theresolutionwillbeadoptedwithanabsolutemajorityofvotescastirrespectiveofthe representedsharecapitalattheGeneralMeetingofShareholders.

Thecompleteproposalsshouldbemadeavailableforinspectionbytheshareholdersandtheothersentitledto attendmeetingsatourofficeandatabankinginstitutiondesignatedintheconvocationtotheGeneralMeetingof Shareholders,asfromthedateofsaidconvocationuntilthecloseofthatmeeting.Furthermore,wemustconsultNYSE EuronextAmsterdamandtheAFM,beforetheamendmentisproposedtoourshareholders.

TheaboverequirementsapplicabletotheamendmentoftheArticlesofAssociation,assetforthintheArticles ofAssociation,aremorestringentthantheminimumapprovalrequirementsunderDutchlaw(whichonlyrequires approvalbytheGeneralMeetinginadditiontotheapprovaloftheSupervisoryBoardofaproposalfromtheBoardof ManagementtoamendtheArticlesofAssociation).

Severance payments under agreements with members of Board of Management

BecausetheirappointmenttotheBoardofManagementtookplacebeforeMarch31,2004,theemploymentagreements withMessrs.WenninkandVandenBrinkdonotcontainspecificprovisionsregardingbenefitsuponterminationofthose agreements.Potentialseverancepaymentswillbeaccordingtoapplicablelaw.

EmploymentagreementsformembersoftheBoardofManagementappointedafterMarch31,2004containspecific provisionsregardingseverancepayments.IfASMLgivesnoticeofterminationoftheemploymentagreementforreasons whicharenotexclusivelyormainlyfoundinactsoromissionsoftheboardmemberconcerned,aseverancepayment equaltooneyearbasesalarywillbepaidupontheeffectivedateoftermination.Thisseverancepaymentwillalsobe paidincaseaBoardofManagementmembergivesnoticeofterminationoftheemploymentagreementinconnection withasubstantialdifferenceofopinionbetweentherespectiveexecutiveandtheSupervisoryBoardregardingher/his employmentagreement,her/hisfunctionorourstrategy.

BoardofManagementmembersappointedafterMarch31,2004shallalsobeentitledtotheaforementionedseverance paymentsintheeventASMLoritslegalsuccessorgivesnoticeofterminationinconnectionwithaChangeofControl (asdefinedintheemploymentagreement)orifsuchBoardofManagementmembergivesnoticeofterminationdirectly relatedtosuchChangeofControl,andsuchnoticeisgivenwithintwelvemonthsfromthedateonwhichtheChangeof Controloccurs.

VII. Deviations from the Code

Forclaritypurposes,ASMLlistsbelowitsdeviationsfromtheCodeandreasonsfordoingso.Thedeviationsfollowthe orderoftherecommendationsintheCode.

II.2.5

AlthoughASMLdoesnotconsiderASML'sexecutionofthisbestpracticeadeviationfromtheCode,itcouldbe interpretedassuch.

ThemembersoftheBoardofManagementareeligibletoreceiveperformanceshareswhichwillbeawardedannually undertheconditionoffulfillmentofpredeterminedperformancetargets,whicharemeasuredoveraperiodofthree calendaryears.Oncethesharesareunconditionallyawardedafterfulfillmentoftheperformanceconditions,the shareswillberetained(foralock-upperiod)bytheBoardofManagementmemberforatleasttwoyearsafterthedate ofunconditionalawardoruntiltheterminationofemployment,whicheverperiodisshorter.Thedateofreleaselies threeyearsaftertheoriginaldateoftargetsetting,andthemembersoftheBoardofManagementhavetoretainthe performancesharesforatleasttwosubsequentyears.Accordingly,thetotalperiodbeforeoneobtainsfullrightsto theperformanceshareswillbefiveyears.TheRemunerationCommitteebelievesthatthetotalresultingperiodisin compliancewiththeCode.TheAGMapprovedtheperformancesharearrangementfortheBoardofManagementon March24,2010.

II.2.8

TheemploymentcontractsofthemembersoftheBoardofManagementappointedbeforeMarch31,2004,being Messrs.WenninkandVandenBrink,arebeinghonored,includingallrightsandobligationsunderthesecontracts.This impliesthattheappointmentofMessrs.WenninkandVandenBrinkasmembersoftheBoardofManagementwillbefor anindefiniteperiodoftime,andthattheirpotentialseverancepaymentswillbeaccordingtoapplicablelaw.Although ASMLdoesnotconsiderthistobecontrarytotherecommendationsintheCode,itmaybeconsideredadeviationfrom theCode.

TheBoardofManagementandtheSupervisoryBoard, Veldhoven,February12,2013

Management Board Report

About ASML

ASMLisoneoftheworld'sleadingproviders(measuredinrevenue)oflithographysystemsforthesemiconductor industry,manufacturingcomplexmachinesthatarecriticaltotheproductionofIntegratedCircuits("ICs")orchips. HeadquarteredinVeldhoven,theNetherlands,ASMListradedonNYSEEuronextAmsterdamandNASDAQunderthe symbolASML.AsofDecember31,2012,weemployed8,497payrollemployees(2011:7,955)and2,139temporary employees(2011:1,935),measuredinfull-timeequivalents.Weprovideservicestoourcustomerstooptimizetheir manufacturingprocessesinmorethan55locationsin16countries.

In2012,wegeneratednetsalesofEUR4,731.5millionandoperatingincomeofEUR1,341.2millionor28.3percentof netsales.Netincomein2012amountedtoEUR1,302.3millionor27.5percentofnetsales,representingnetincomeper ordinaryshareofEUR3.07.

AllinformationdisclosedinthisManagementBoardReportisprovidedasasupplementto,andshouldbereadin conjuctionwith,ourconsolidatedfinancialstatementsandtheaccompanyingnotestotheconsolidatedfinancial statements.

Risk Factors

Inconductingourbusiness,wefacemanyrisksthatmayinterferewithourbusinessobjectives.Someoftheserisks relatetoouroperationalprocesses,whileothersrelatetoourbusinessenvironment.Itisimportanttounderstandthe natureoftheserisksandtheimpacttheymayhaveonourbusiness,financialconditionandresultsofoperations.Some ofthemorerelevantrisksaredescribedbelow.Theserisksarenottheonlyonesthatweface.Somerisksmaynotyet beknowntousandcertainrisksthatwedonotcurrentlybelievetobematerialcouldbecomematerialinthefuture.

Summary

Strategicrisk

• Wederivemostofourrevenuesfromthesaleofarelativelysmallnumberofsystems.

Risksrelatedtothesemiconductorindustry

• Thesemiconductorindustryishighlycyclicalandwemaybeadverselyaffectedbyanydownturn;
• Ourbusinesswillsufferifwedonotrespondrapidlytocommercialandtechnologicalchangesinthesemiconductor industry;and
• Wefaceintensecompetition.

Governmental,legalandcompliancerisks

• Failuretoadequatelyprotecttheintellectualpropertyrightsuponwhichwedependcouldharmourbusiness;
• Defendingagainstintellectualpropertyclaimsbroughtbyotherscouldharmourbusiness;
• Wearesubjecttorisksinourinternationaloperations;and
• Becauseoflaborlawsandpractices,anyworkforcereductionsthatwemayseektoimplementinordertoreduce costscompany-widemaybedelayedorsuspended.

Operationalrisks

• Thenumberofsystemswecanproduceislimitedbyourdependenceonalimitednumberofsuppliersofkey components;
• Thepaceofintroductionofournewproductsisacceleratingandisaccompaniedbypotentialdesignandproduction delaysandbysignificantcosts;
• Wearedependentonthecontinuedoperationofalimitednumberofmanufacturingfacilities;
• Wemaybeunabletomakedesirableacquisitionsortointegratesuccessfullyanybusinessesweacquire;and
• Ourbusinessandfuturesuccessdependonourabilitytoattractandretainasufficientnumberofadequately educatedandskilledemployees.

Financialrisks

• Ahighpercentageofnetsalesisderivedfromafewcustomers;and
• Fluctuationsinforeignexchangeratescouldharmourresultsofoperations.

Risksrelatedtoourordinaryshares

• Wemaynotdeclarecashdividendsatallorinanyparticularamountsinanygivenyear;
• Thepriceofourordinarysharesisvolatile;
• Restrictionsonshareholderrightsmaydilutevotingpower;and
• ParticipatingcustomersinourCustomerCo-InvestmentProgramtogetherownasignificantamountofourordinary shares.

Explanation per risk

Strategicrisk

We derive most of our revenues from the sale of a relatively small number of systems

Wederivemostofourrevenuesfromthesaleofarelativelysmallnumberoflithographyequipmentsystems(170units in2012and222unitsin2011),withanaveragesellingprice("ASP")in2012ofEUR22.4million(EUR24.8millionfor newsystemsandEUR7.6millionforusedsystems)andanASPin2011ofEUR22.0million(EUR24.5millionfornew systemsandEUR3.8millionforusedsystems).Asaresult,thetimingofrecognitionofrevenuefromasmallnumber ofsystemsalesmayhaveasignificantimpactonournetsalesandoperatingresultsforaparticularreportingperiod. Specifically,thefailuretoreceiveanticipatedorders,ordelaysinshipmentsneartheendofaparticularreportingperiod, due,forexample,to:

• adownturninthehighlycyclicalsemiconductorindustry;
• unanticipatedshipmentrescheduling;
• cancellationororderpush-backbycustomers;
• unexpectedmanufacturingdifficulties;and
• delaysindeliveriesbysuppliers

maycausenetsalesinaparticularreportingperiodtofallsignificantlybelownetsalesinpreviousperiodsorbelowour expectednetsales,andmayhaveamaterialadverseeffectonourresultsofoperationsforthatperiod.Inparticularour publishedquarterlyearningsmayvarysignificantlyfromquartertoquarterandmayvaryinthefutureforthereasons discussedabove.

Risksrelatedtothesemiconductorindustry

The semiconductor industry is highly cyclical and we may be adversely affected by any downturn

Asasuppliertotheglobalsemiconductorindustry,wearesubjecttotheindustry'sbusinesscycles,ofwhichthetiming, durationandvolatilityofwhicharedifficulttopredict.Thesemiconductorindustryhashistoricallybeencyclical.Sales ofourlithographysystemsdependinlargepartuponthelevelofcapitalexpendituresbysemiconductormanufacturers. Thesecapitalexpendituresdependuponarangeofcompetitiveandmarketfactors,including:

• thecurrentandanticipatedmarketdemandforsemiconductorsandforproductsutilizingsemiconductors;
• semiconductorprices;
• semiconductorproductioncosts;
• changesinsemiconductorinventorylevels;
• generaleconomicconditions;and
• accesstocapital.

Reductionsordelaysincapitalequipmentpurchasesbyourcustomerscouldhaveamaterialadverseeffectonour business,financialconditionandresultsofoperations.

Inanindustrydownturn,ourabilitytomaintainprofitabilitywilldependsubstantiallyonwhetherweareabletolower ourcostsandbreak-evenlevel,whichisthelevelofsalesthatwemustreachinayeartoachievenetincome.Ifsales decreasesignificantlyasaresultofanindustrydownturnandweareunabletoadjustourcostsoverthesameperiod, ournetincomemaydeclinesignificantlyorwemaysufferlosses.Asweneedtokeepcertainlevelsofinventoryon handtomeetanticipatedproductdemand,wemayalsoincurincreasedcostsrelatedtoinventoryobsolescenceinan industrydownturn.Inaddition,industrydownturnsgenerallyresultinovercapacity,resultingindownwardpressureon pricesandimpairmentofmachineryandequipment,whichinthepasthashad,andinthefuturecouldhave,amaterial adverseeffectonourbusiness,financialconditionandresultsofoperations.

Theongoingfinancialcrisesthathaveaffectedtheinternationalbankingsystemandglobalfinancialmarketssince2008 havebeeninmanyrespectsunprecedented.ConcernspersistoverthedebtburdenofcertainEurozonecountriesand theirabilitytomeetfutureobligations,theoverallstabilityoftheeuro,andthesuitabilityoftheeuroasasinglecurrency giventhediverseeconomicandpoliticalcircumstancesinindividualEurozonecountries.Theseconcernscouldleadto there-introductionoftheindividualcurrenciesinoneormoreEurozonecountries,orinmoreextremecircumstances, thepossibledissolutionoftheeurocurrencyentirely.Thesepotentialdevelopments,ormarketperceptionsconcerning theseandrelatedissues,couldadverselyaffectthevalueofoureuro-denominatedassetsandobligations.Inaddition, remainingconcernsovertheeffectofthisfinancialcrisisonfinancialinstitutionsinEuropeandglobally,andthe instabilityofthefinancialmarketsandtheglobaleconomyingeneralcouldresultinanumberoffollow-oneffectson ourbusiness,including(i)decliningbusinessandconsumerconfidenceresultinginreduced,ordelayedpurchaseofour productsorshorter-termcapitalexpendituresforourproducts;insolvencyofkeysuppliersresultinginproductdelays, (ii)aninabilityofcustomerstoobtaincredittofinancepurchasesofourproducts,delayedpaymentsfromourcustomers and/orcustomerinsolvenciesand(iii)otheradverseeffectsthatwecannotcurrentlyanticipate.Ifglobaleconomicand marketconditionsdeteriorate,wearelikelytoexperiencematerialadverseimpactsonourbusiness,financialcondition andresultsofoperations.

Conversely,inanticipationofperiodsofincreasingdemandforsemiconductormanufacturingequipment,wemust maintainsufficientmanufacturingcapacityandinventoryandwemustattract,hire,integrateandretainasufficient numberofqualifiedemployeestomeetcustomerdemand.Ourabilitytopredictthetimingandmagnitudeofindustry fluctuationsislimitedandourproductsrequiresignificantlead-timetosuccessfullycomplete.Accordingly,wemaynot beabletoeffectivelyincreaseourproductioncapacitytorespondtoanincreaseincustomerdemandinanindustry upturnresultinginlostrevenues,damagetocustomerrelationshipsandwemaylosemarketshare.

Our business will suffer if we do not respond rapidly to commercial and technological changes in the semiconductor industry

Thesemiconductormanufacturingindustryissubjectto:

• rapidchangetowardsmorecomplextechnologies;
• frequentnewproductintroductionsandenhancements;
• evolvingindustrystandards;
• changesincustomerrequirements;and
• continuedshorteningofproductlifecycles.

Ourproductscouldbecomeobsoletesoonerthananticipatedbecauseofafasterthananticipatedchangeinoneor moreofthetechnologiesrelatedtoourproductsorinmarketdemandforproductsbasedonaparticulartechnology. Oursuccessindevelopingnewproductsandinenhancingourexistingproductsdependsonavarietyoffactors, includingthesuccessfulmanagementofourresearchanddevelopment("R&D")programsandthetimelycompletionof productdevelopmentanddesignrelativetocompetitors.Ifwedonotdevelopandintroducenewandenhancedsystems atcompetitivepricesandonatimelybasis,ourcustomerswillnotintegrateoursystemsintotheplanninganddesignof newproductionfacilitiesandupgradesofexistingfacilities,whichwouldhaveamaterialadverseeffectonourbusiness, financialconditionandresultsofoperations.

Inparticular,weareinvestingconsiderablefinancialandotherresourcestodevelopandintroducenewproductsand productenhancements,suchasEUVand450mmwafertechnology.Ifweareunabletosuccessfullydevelopand introducetheseproductsandtechnologies,orifourcustomersdonotfullyadoptthenewtechnologies,productsor productenhancementsduetoapreferenceformoreestablishedoralternativenewtechnologiesandproductsorfor anyotherreasons,wewouldnotrecoupallofourinvestmentsinthesetechnologiesorproducts,whichcouldhavea materialadverseeffectonourbusiness,financialconditionandresultsofoperations.

ThesuccessofEUVremainsparticularlydependentonlightsource(laser)availabilityandcontinuingrelatedtechnical advancesbyusandoursuppliers,aswellasinfrastructuredevelopmentsinmasksandphotoresists,withoutwhichthe EUVtoolscannotachievetheproductivityandyieldrequiredtoeconomicallyjustifythehigherpriceofthesetools.A delayinthedevelopmentsofthesetoolscoulddiscourageorresultinmuchsloweradoptionofthistechnology.Ifthe technologiesthatwepursuetoassistourcustomersinproducingsmallerandmoreefficientchips,arenotaseffective asthosedevelopedbyourcompetitors,orifourcustomersadoptnewtechnologicalarchitecturesthatarelessfocused onlithography,thismayadverselyaffectourbusiness,financialconditionandresultsofoperations.

We face intense competition

Thesemiconductorequipmentindustryishighlycompetitive.Theprincipalelementsofcompetitioninourmarketare:

• thetechnicalperformancecharacteristicsofalithographysystem;

• thevalueofownershipofthatsystembasedonitspurchaseprice,maintenancecosts,productivity,andcustomer serviceandsupportcosts;

• theexchangerateoftheeuroparticularlyagainsttheJapaneseyenwhichresultsinvaryingpricesandmargins;

• thestrengthandbreadthofourportfolioofpatentsandotherintellectualpropertyrights;and
• ourcustomers'desiretoobtainlithographyequipmentfrommorethanonesupplier.

Ourcompetitivenessincreasinglydependsuponourabilitytodevelopnewandenhancedsemiconductorequipment thatiscompetitivelypricedandintroducedonatimelybasis,aswellasourabilitytoprotectanddefendourintellectual propertyrights.SeeNote10andNote25toourconsolidatedfinancialstatements.

WecompeteprimarilywithNikonCorporation("Nikon")andtoalesserdegreewithCanonKabushikiKaisha("Canon"). BothNikonandCanonhavesubstantialfinancialresourcesandbroadpatentportfolios.Eachcontinuestointroduce newproductswithimprovedpriceandperformancecharacteristicsthatcompetedirectlywithourproducts,whichmay causeadeclineinoursalesoralossofmarketacceptanceforourlithographysystems.Inaddition,adversemarket conditions,industryovercapacityoradecreaseinthevalueoftheJapaneseyeninrelationtotheeuroortheU.S.dollar, couldfurtherintensifyprice-basedcompetitioninthoseregionsthataccountforthemajorityofoursales,resultingin lowerpricesandmarginswhichcouldhaveamaterialadverseeffectonourbusiness,financialconditionandresultsof operations.

Inaddition,tocompetitorsinlithography,wemayfacecompetitionwithrespecttoalternativetechnologiesforthenoncriticallayersorforalllayers.ThefailuretokeeppacewithMoore'slaw,whichpostulatesthatthenumberoftransistors onachipdoublesapproximatelyevery18to24monthsatequivalentmarginalcosts,orintheeventthedeliveryofnew technologyisdelayed,ourcustomersmayoptforothersolutionsinICmanufacturingasasubstituteforpurchasingour products.

Governmental,legalandcompliancerisks

Failure to adequately protect the intellectual property rights upon which we depend could harm our business Werelyonintellectualpropertyrightssuchaspatents,copyrightsandtradesecretstoprotectourproprietary technology.However,wefacetheriskthatsuchmeasurescouldprovetobeinadequatebecause:

• intellectualpropertylawsmaynotsufficientlysupportourproprietaryrightsormaychangeinthefutureinamanner adversetous;
• patentrightsmaynotbegrantedorconstruedasweexpect;
• patentswillexpirewhichmayresultinkeytechnologybecomingwidelyavailablethatmayhurtourcompetitive position;
• thestepswetaketopreventmisappropriationorinfringementofourproprietaryrightsmaynotbesuccessful;and
• thirdpartiesmaybeabletodeveloporobtainpatentsforsimilarcompetingtechnology.

Inaddition,litigationmaybenecessarytoenforceourintellectualpropertyrights,todeterminethevalidityandscopeof theproprietaryrightsofothers,ortodefendagainstclaimsofinfringement.Anysuchlitigationmayresultinsubstantial costsanddiversionofmanagementresources,and,ifdecidedunfavorablytous,couldhaveamaterialadverseeffect onourbusiness,financialconditionandresultsofoperations.

Defending against intellectual property claims brought by others could harm our business

Inthecourseofourbusiness,wearesubjecttoclaimsbythirdpartiesallegingthatourproductsorprocesses infringeupontheirintellectualpropertyrights.Ifsuccessful,suchclaimscouldlimitorprohibitusfromdevelopingour technologyandmanufacturingourproducts,whichcouldhaveamaterialadverseeffectonourbusiness,financial conditionandresultsofoperations.

Inaddition,ourcustomersmaybesubjecttoclaimsofinfringementfromthirdparties,allegingthatourproductsused bysuchcustomersinthemanufactureofsemiconductorproductsand/ortheprocessesrelatingtotheuseofour productsinfringeoneormorepatentsissuedtosuchparties.Ifsuchclaimsweresuccessful,wecouldberequired toindemnifycustomersforsomeorallofanylossesincurredordamagesassessedagainstthemasaresultofsuch infringement,whichcouldhaveamaterialadverseeffectonourbusiness,financialconditionandresultsofoperations.

Wealsomayincursubstantiallicensingorsettlementcosts,whichalthoughpotentiallystrengtheningorexpandingour intellectualpropertyrightsorlimitingourexposuretointellectualpropertyclaimsofthirdparties,mayhaveamaterial adverseeffectonourbusiness,financialconditionandresultsofoperations.

Fromlate2001through2004,ASMLwaspartytoaseriesofcivillitigationsandadministrativeproceedingsinwhich NikonallegedASML'sinfringementofNikonpatentsrelatingtolithography.ASMLinturnfiledclaimsagainstNikon. PursuanttoagreementsexecutedonDecember10,2004,ASML,ZeissandNikonagreedtosettleallpendingworldwide patentlitigationbetweenthecompanies.Thesettlementincludedanexchangeofreleases,apatentCross-License

agreementrelatedtolithographyequipmentusedtomanufacturesemiconductordevices(the"NikonCross-License Agreement")andpaymentstoNikonbyASMLandZeiss.BeginningonJanuary1,2015,thepartiesmaybringsuitfor infringementofpatentssubjecttotheNikonCross-LicenseAgreement,includinganyinfringementthatoccurredduring theCross-LicenseTransitionPeriod.DamagesrelatedtoclaimsforpatentinfringementoccurringduringtheCross-LicenseTransitionPeriodarelimitedtothreepercentofthenetsalespriceofproductsutilizingpatentsthatarevalid andenforceable.

We are subject to risks in our international operations

ThemajorityofoursalesaremadetocustomersoutsideEurope.Thereareanumberofrisksinherentindoingbusiness insomeofthoseregions,includingthefollowing:

• potentiallyadversetaxconsequences;
• unfavorablepoliticaloreconomicenvironments;
• unexpectedlegalorregulatorychanges;and
• aninabilitytoeffectivelyprotectintellectualproperty.

Ifweareunabletomanagesuccessfullytherisksinherentinourinternationalactivities,ourbusiness,financialcondition andresultsofoperationscouldbemateriallyandadverselyaffected.

Inparticular,31.3percentofour2012netsalesand20.3percentofour2011netsaleswerederivedfromcustomers inTaiwan.Taiwanhasauniqueinternationalpoliticalstatus.ThePeople'sRepublicofChinaassertssovereigntyover TaiwananddoesnotrecognizethelegitimacyoftheTaiwanesegovernment.ChangesinrelationsbetweenTaiwanand thePeople'sRepublicofChina,TaiwanesegovernmentpoliciesandotherfactorsaffectingTaiwan'spolitical,economic orsocialenvironmentcouldhaveamaterialadverseeffectonourbusiness,financialconditionandresultsofoperations.

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

Thesemiconductormarketishighlycyclicalandasaconsequencewemayneedtoimplementworkforcereductionsin caseofadownturn,inordertoadapttosuchmarketchanges.Inaccordancewithlaborlawsandpracticesapplicable inthejurisdictionsinwhichweoperate,areductionofanysignificancemaybesubjecttoformalproceduresthatcan delayormayresultinthemodificationofourplannedworkforcereductions.Forexample,ASMLNetherlandsB.V.,our operatingsubsidiaryintheNetherlands,hasaWorksCouncil,asrequiredbyDutchlaw.IftheWorksCouncilrenders contraryadviceinconnectionwithaproposedworkforcereductionintheNetherlands,butwenonethelessdetermine toproceed,wemusttemporarilysuspendanyactionwhiletheWorksCouncildetermineswhethertoappealtothe EnterpriseChamberoftheAmsterdamCourtofAppeal.Thisappealprocesscancauseadelayofseveralmonthsand mayrequireustoaddressanyproceduralinadequaciesidentifiedbytheCourtinthewaywereachedourdecision.Such delayscouldimpairourabilitytoreducecostscompany-widetolevelscomparabletothoseofourcompetitors.

Operationalrisks

The number of systems we can produce is limited by our dependence on a limited number of suppliers of key components

Werelyonoutsidevendorsforthecomponentsandsubassembliesusedinoursystems,eachofwhichisobtainedfrom asinglesupplieroralimitednumberofsuppliers.Ourrelianceonalimitedgroupofsuppliersinvolvesseveralrisks, includingapotentialinabilitytoobtainanadequatesupplyofrequiredcomponentsandtheriskofuntimelydeliveryof thesecomponentsandsubassemblies.

ThenumberoflithographysystemsweareabletoproduceislimitedbytheproductioncapacityofCarlZeissSMTAG ("Zeiss").Zeissisoursinglesupplieroflensesandothercriticalopticalcomponents.IfZeisswereunabletomaintain andincreaseproductionlevelsorifweareunabletomaintainourbusinessrelationshipwithZeissinthefuturewecould beunabletofulfillorders,whichcoulddamagerelationshipswithcurrentandprospectivecustomersandhaveamaterial adverseeffectonourbusiness,financialconditionandresultsofoperations.IfZeissweretoterminateitsrelationship withusorifZeisswereunabletomaintainproductionoflensesoveraprolongedperiod,wewouldeffectivelycease tobeabletoconductourbusiness.InadditiontoZeiss'currentpositionasoursinglesupplieroflenses,theexcimer laserilluminationsystemsthatprovidetheultravioletlightsource,usedinourhighresolutionsteppersandStep&Scan systems,andtheextremeultravioletlightsource,usedinourthird-generation(NXE:3300B)EUVsystems,areavailable fromonlyaverylimitednumberofsuppliers.

Manufacturingsomeofthesecomponentsandsubassembliesthatweuseinourmanufacturingprocessesisan extremelycomplexprocessandcouldresultindelaysbyoursuppliers.Aprolongedinabilitytoobtainadequate deliveriesofcomponentsorsubassemblies,oranyothercircumstancethatrequiresustoseekalternativesourcesof supply,couldsignificantlyhinderourabilitytodeliverourproductsinatimelymanner,whichcoulddamagerelationships withcurrentandprospectivecustomersandhaveamaterialadverseeffectonourbusiness,financialconditionand resultsofoperations.

The pace of introduction of our new products is accelerating and is accompanied by potential design and production delays and by significant costs

Thedevelopmentandinitialproduction,installationandenhancementofthesystemsweproduceisoftenaccompanied bydesignandproductiondelaysandrelatedcostsofanaturetypicallyassociatedwiththeintroductionandtransition tofull-scalemanufacturingofcomplexcapitalequipment.Whileweexpectandplanforacorrespondinglearning-curve effectinourproductdevelopmentcycle,wecannotpredictwithprecisionthetimeandexpenserequiredtoovercome theseinitialproblemsandtoensurefullperformancetospecifications.Moreover,weanticipatethatthislearningcurveeffectwillcontinuetopresentincreasinglydifficultchallengeswitheverynewgenerationasaresultofincreasing technologicalcomplexity.Inparticular,thedevelopmentofanEUVvolumeproductionsystemisdependenton,and subjecttothesuccessfulimplementationof,technologyrelatedtothelightsourceandothertechnologiesspecificto EUV.Thereisariskthatwemaynotbeabletointroduceorbringtofull-scaleproductionnewproductsasquicklyas weanticipateinourproductintroductionplans,whichcouldhaveamaterialadverseeffectonourbusiness,financial conditionandresultsofoperations.

Forthemarkettoaccepttechnologyenhancements,ourcustomers,inmanycases,mustupgradetheirexisting technologycapabilities.Suchupgradesfromestablishedtechnologymaynotbeavailabletoourcustomerstoenable volumeproductionusingournewtechnologyenhancements.Thiscouldresultinourcustomersnotpurchasing,or pushingbackorcancelingordersforourtechnologyenhancements,whichcouldnegativelyimpactourbusiness, financialconditionandresultsofoperations.

We are dependent on the continued operation of a limited number of manufacturing facilities

Allofourmanufacturingactivities,includingsubassembly,finalassemblyandsystemtesting,takeplaceincleanroom facilitiesinVeldhoven,theNetherlands,inWilton,Connecticut,theUnitedStatesandinLinkou,Taiwan.Thesefacilities maybesubjecttodisruptionforavarietyofreasons,includingworkstoppages,fire,energyshortages,floodingor othernaturaldisasters.Wecannotensurethatalternativeproductioncapacitywouldbeavailableifamajordisruption weretooccurorthat,ifitwereavailable,itcouldbeobtainedonfavorableterms.Suchadisruptioncouldhavea materialadverseeffectonourbusiness,financialconditionandresultsofoperations.Inaddition,someofourkey suppliers,includingZeiss,havealimitednumberofmanufacturingfacilities,thedisruptionofwhichmaysignificantly andadverselyaffectourproductioncapacity.

We may be unable to make desirable acquisitions or to integrate successfully any businesses we acquire

Ourfuturesuccessmaydependinpartontheacquisitionofbusinessesortechnologiesintendedtocomplement, enhanceorexpandourcurrentbusinessorproductsorthatmightotherwiseofferusgrowthopportunities.Ourability tocompletesuchtransactionsmaybehinderedbyanumberoffactors,includingpotentialdifficultiesinobtaining governmentapprovals.

Anyacquisitionthatwedomakewouldposerisksrelatedtotheintegrationofthenewbusinessortechnologywithour business.Wecannotbecertainthatwewillbeabletoachievethebenefitsweexpectfromaparticularacquisitionor investment.Acquisitionsmayalsostrainourmanagerialandoperationalresources,asthechallengeofmanagingnew operationsmaydivertourmanagementfromday-to-dayoperationsofourexistingbusiness.Ourbusiness,financial conditionandresultsofoperationsmaybemateriallyandadverselyaffectedifwefailtocoordinateourresources effectivelytomanagebothourexistingoperationsandanybusinessesweacquire.

WehaveenteredintoanagreementtoacquirealloftheoutstandingsharesofCymerInc.("Cymer").HowevertheCymer acquisitionissubjecttoclosingconditions,includingreviewbyU.S.andinternationalregulators.Althoughclosingis expectedtooccurwithinthefirsthalfof2013,thereisnoassurancethatthetransactionwillbecompletedwithinthe expectedtimeperiodoratall.IfouracquisitionofCymerisnotcompleted,wemayneedtodevelopEUVlightsource technologyourselves,whichcouldleadtosignificantcostsanddelaysintheintroductionofEUVsystems.

WeexpectthattheacquisitionofCymerwillmakeEUVtechnologymoreefficient,preventadditionaldelaysinthe introductionofEUVtechnology,andsimplifythesupplychainofEUVmodules.However,achievingthebenefitsofthe acquisitionwilldependinpartontheintegrationofourdevelopmentorganization,operationsandemployeeswiththose ofCymerinatimelyandefficientmanner,soastominimizetheriskthatthetransactionwillresultinadelayinthe developmentofEUVasresultofthelossofkeyemployeesofCymerorthediversionoftheattentionofmanagement. TherecanbenoassurancethatCymerwillbesuccessfullyintegratedinourbusinessorthatanyoftheanticipated benefitswillberealized.EvenifweareabletosuccessfullyintegrateCymer,thereisnoassurancethatthistransaction willresultinsuccessfuldevelopmentofourEUVtechnology.

Our business and future success depend on our ability to attract and retain a sufficient number of adequately educated and skilled employees

Ourbusinessandfuturesuccesssignificantlydependuponouremployees,includingalargenumberofhighlyqualified professionals,aswellasourabilitytoattractandretainemployees.Competitionforsuchpersonnelisintense,and wemaynotbeabletocontinuetoattractandretainsuchpersonnel.TheEUVand450mmR&Dprogramsassociated withthenon-recurringresearchanddevelopment("NRE")commitmentsundertheCustomerCo-InvestmentProgram willrequireasignificantnumberofqualifiedemployees.Ifweareunabletoattractsufficientnumbersofqualified employees,thiscouldaffectourabilitytoconductourEUVand450mmresearchprogramsonatimelybasis,which couldadverselyaffectourbusiness,financialconditionandresultsofoperations.

Inaddition,theincreasingcomplexityofourproductsresultsinalongerlearning-curvefornewandexistingemployees leadingtoaninabilitytodecreasecycletimesandmayresultintheincurrenceofsignificantadditionalcosts,which couldadverselyaffectourbusiness,financialconditionandresultsofoperations.

Financialrisks

A high percentage of net sales is derived from a few customers

Historically,wehavesoldasubstantialnumberoflithographysystemstoalimitednumberofcustomers.Weexpect customerconcentrationtoincreasebecauseofcontinuingconsolidationinthesemiconductormanufacturingindustry. Consequently,whiletheidentityofourlargestcustomersmayvaryfromyeartoyear,weexpectsalestoremain concentratedamongrelativelyfewcustomersinanyparticularyear.In2012,recognizedsalestoourlargestcustomer accountedforEUR1,236.1million,or26.1percentofnetsales,comparedwithEUR1,311.7million,or23.2percentof netsales,in2011.Thelossofanysignificantcustomeroranysignificantreductioninordersbyasignificantcustomer mayhaveamaterialadverseeffectonourbusiness,financialconditionandresultsofoperations.

Additionally,asaresultofourlimitednumberofcustomers,creditriskonourreceivablesisconcentrated.Ourthree largestcustomers(basedonnetsales)accountedfor58.9percentofaccountsreceivableandfinancereceivablesat December31,2012,comparedwith35.5percentatDecember31,2011.Asaresult,businessfailureorinsolvency ofoneofourmaincustomersmayhaveamaterialadverseeffectonourbusiness,financialconditionandresultsof operations.

Fluctuations in foreign exchange rates could harm our results of operations

Weareexposedtocurrencyrisks.Weareparticularlyexposedtofluctuationsintheexchangeratesbetweenthe U.S.dollar,Japaneseyenandtheeuroasweincurmanufacturingcostsforoursystemspredominantlyineuroswhile portionsofournetsalesandcostofsalesaredenominatedinU.S.dollarsandJapaneseyen.

Inaddition,aportionofourassetsandliabilitiesandoperatingresultsaredenominatedinU.S.dollars,andasmall portionofourassets,liabilitiesandoperatingresultsaredenominatedincurrenciesotherthantheeuroandtheU.S. dollar.Ourconsolidatedfinancialstatementsareexpressedineuros.Accordingly,ourresultsofoperationsandassets andliabilitiesareexposedtofluctuationsinexchangeratesbetweentheeuroandvariouscurrencies.Ingeneral,our customersruntheirbusinessesinU.S.dollarsandthereforeaweakeningoftheU.S.dollaragainsttheeuromight impacttheabilityofourcustomerstopurchaseourproducts.

Furthermore,astrengtheningoftheeuroparticularlyagainsttheJapaneseyencouldfurtherintensifyprice-based competitioninthoseregionsthataccountforthemajorityofoursales,resultinginlowerpricesandmarginsanda materialadverseeffectonourbusiness,financialconditionandresultsofoperations.

Risksrelatedtoourordinaryshares

We may not declare cash dividends at all or in any particular amounts in any given year

Weaimtopayanannualdividendthatwillbestableorgrowingovertime.Annually,theBoardofManagementwill, uponpriorapprovalfromtheSupervisoryBoard,submitaproposaltotheAGMwithrespecttotheamountofdividend tobedeclaredwithrespecttotheprioryear.Thedividendproposalinanygivenyearwillbesubjecttotheavailability ofdistributableprofitsorretainedearningsandmaybeaffectedby,amongotherfactors,theBoardofManagement's viewsonourpotentialfutureliquidityrequirements,includingforinvestmentsinproductioncapacity,thefundingof ourresearchanddevelopmentprogramsandforacquisitionopportunitiesthatmayarisefromtimetotime;andby futurechangesinapplicableincometaxandcorporatelaws.Accordingly,theBoardofManagementmaydecideto proposenottopayadividendorpayalowerdividendwithrespecttoanyparticularyearinthefuture,whichcouldhave anegativeeffectonourshareprice.

The price of our ordinary shares is volatile

Thecurrentmarketpriceofourordinarysharesmaynotbeindicativeofpricesthatwillprevailinthefuture.Inparticular, themarketpriceofourordinaryshareshasinthepastexperiencedsignificantfluctuation,includingfluctuationthatis unrelatedtoourperformance.Thisfluctuationmaycontinueinthefuture.

Restrictions on shareholder rights may dilute voting power

OurArticlesofAssociationprovidethatwearesubjecttotheprovisionsofDutchlawapplicabletolargecorporations, called"structuurregime".Theseprovisionshavetheeffectofconcentratingcontrolovercertaincorporatedecisionsand transactionsinthehandsofourSupervisoryBoard.Asaresult,holdersofordinarysharesmayhavemoredifficultyin protectingtheirinterestsinthefaceofactionsbymembersofourSupervisoryBoardthanifwewereincorporatedinthe UnitedStatesoranotherjurisdiction.

Ourauthorizedsharecapitalalsoincludesaclassofcumulativepreferencesharesandwehavegranted"Stichting PreferenteAandelenASML",aDutchfoundation,anoptiontoacquire,attheirnominalvalueofEUR0.09pershare, suchcumulativepreferenceshares.Exerciseofthepreferenceshareoptionwouldeffectivelydilutethevotingpowerof ouroutstandingordinarysharesbyone-half,whichmaydiscourageorsignificantlyimpedeathirdpartyfromacquiringa majorityofourvotingshares.

Participating customers in our Customer Co-Investment Program together own a significant amount of our ordinary shares

IntheCustomerCo-InvestmentProgram,Intel,TSMCandSamsungthroughcertainwholly-ownedsubsidiaries, acquired15%,5%and3%,ofourshares,respectively(suchpercentagesgiveeffecttoourSyntheticShareBuybackin November2012).

Theinterestsoftheparticipatingcustomersmaynotalwayscoincidewiththeinterestsofotherholdersofourshares. ThesharesacquiredbytheparticipatingcustomersareheldbyDutchfoundationswhichhaveissueddepositary receiptsinrespectthereofandtheparticipatingcustomersmayonlyvotethosesharesinGeneralMeetingsin exceptionalcircumstances,includingtheauthorizationofcertainsignificantshareissuancesandsharerepurchases, theapprovalofasignificantchangeintheidentityornatureofASMLoritsbusiness,anyamendmenttotheArticles ofAssociationthatwouldmateriallyaffectthespecificvotingrightsofIntel,TSMCandSamsungorthatwould causeasignificantchangeintheidentityornatureofASMLoritsbusiness,thedissolutionofASML,andanymerger ordemergerwhichwouldresultinamaterialchangeintheidentityornatureofASMLoritsbusiness.Whensuch exceptionalcircumstancesoccur,theparticipatingcustomers,andinparticularIntel,willbeabletoinfluencematters requiringapprovalbytheGeneralMeetingandmayvotetheirordinarysharesinawaywithwhichothershareholders maynotagree.

Theparticipatingcustomershavealsoagreedthattheywillnot,withoutourpriorwrittenconsent,transferanyofthe ordinarysharestheyacquiredintheCustomerCo-InvestmentProgram(ordepositaryreceiptsrepresentingthose shares)untiltwoyearsandsixmonthsafterthedatetheyacquiredsuchshares(September12,2012forInteland Samsung;October31,2012forTSMC).Uponexpiryofsuchperiod,theordinarysharesheldbyparticipatingcustomers arefreelytransferable,subjecttoorderlymarketarrangementsandcertainotherrestrictions.Anysalesofsignificant amountsofsharesbyparticipatingcustomersintheprogramcouldhaveanegativeeffectonourshareprice.

Financial risk management

Weareexposedtocertainfinancialriskssuchasmarketrisk(includingforeigncurrencyexchangeriskandinterestrate risk),creditrisk,liquidityriskandcapitalrisk.Theoverallriskmanagementprogramfocusesontheunpredictability offinancialmarketsandseekstominimizepotentiallyadverseeffectsonourfinancialperformance.Weusederivative financialinstrumentstohedgecertainriskexposures.Noneofourtransactionsareenteredintofortradingor speculativepurposes.Webelievethatmarketinformationisthemostreliableandtransparentmeasureforourderivative financialinstrumentsthataremeasuredatfairvalue.SeeNote5toourconsolidatedfinancialstatementsformore information.

Semiconductor Equipment Industry

Thechip-makingbusinessisfocusedon"shrink",orreducingthesizeofchipdesigns.Historicallythesemiconductor industryhasexperiencedsignificantgrowthlargelyduetothecontinualreductionofcostperfunctionperformedby ICs.ImprovementinthedesignandmanufactureofICswithhighercircuitdensitiesresultedinsmallerandcheaperICs capableofperformingalargernumberoffunctionsathigherspeedswithlowerpowerconsumption.Webelievethat

theselong-termtrendswillcontinuefortheforeseeablefutureandwillbeaccompaniedbyacontinuingdemandfor productionequipmentthatiscapableofaccurateproductionofadvancedICsinhighvolumesatthelowestpossible cost.

Lithographyequipmentisusedtoprintcomplexcircuitpatternsontosiliconwafers,whicharetheprimaryrawmaterials forICs.Theprintingprocessisoneofthemostcriticalandexpensivestepsinwaferfabrication.Lithographyequipment isthereforeasignificantfocusoftheICindustry'sdemandforcost-efficientenhancementstoproductiontechnology.

Thecoststodevelopnewlithographyequipmentarehigh.Accordingly,thelithographyequipmentindustryis characterizedbythepresenceofonlyafewprimarysuppliers:ASMLandNikon,and(toalesserdegree)Canon.In 2012,ASMLwasoneoftheworld'sleadingprovidersoflithographyequipment(measuredinrevenues).

TotallithographyequipmentshippedbytheindustryasawholeinthesixyearsendedDecember31,2012,issetoutin thefollowingtable:

Year ended December 31	2012	2011	2010	2009	2008	2007
Totalunitsshipped1	270	376	304	128	344	604
Totalvalue(inmillionsUSD)1	6,451	8,186	6,416	2,485	5,388	7,144

1 Historicaldataandfull-year2012estimatesasreportedbyGartnerDataquestinitsfourthquarter2012report.

Fortheyear2012,thelatestindicationsofindependentmarketanalystsshowadecreaseintotallithographyequipment shippedtothemarketbytheindustryof28.2percentinunitvolumeand21.2percentinvalue.Ournetsalesdecreased by16.3percentcomparedto2011.Despitethislowernetsalesduring2012,itwasoursecondbestyeareverbasedon totalnetsalesandprofitability.During2012,themajorityofthesystemsaleswasgeneratedfromLogic.

Business strategy

Thelong-termgrowthofthesemiconductorindustryistheresultoftheprinciplethatthepower,costandtimerequired foreverycomputationonadigitalelectronicdevicecanbereducedbyshrinkingthesizeoftransistorsonchips.In 2012,chipmakersroutinelyproducedelectronicchipfeatureswithgeometriesof32nanometers,comparedtotypical geometriesof10,000nanometersintheearly1970s,resultinginanincreaseinthenumberoftransistorsonleading chipsfromseveralthousandtoovertwobillion.ThistrendwasfirstobservedbyIntelco-founderGordonMoorein 1965,andisreferredtoas'Moore'sLaw'.Moore'sLawhasresultedinourinformationsocietywithfastwiredand wirelesscommunications–builtonaffordablechips.Moore'sLawalsohasanimpactontheenergyusageofchips. Smallergeometriesallowformuchlowerelectricalcurrentstooperatethechip.Thishashelpedtocontaintheworld's energyconsumptiondespitetheproliferationofaffordablecomputing.Usingadvancedsemiconductorsinindustrialand consumerproductsoftenprovideseconomicbenefits,user-friendlinessandincreasedsafety.Thetechnologyrevolution poweredbysemiconductorshasbroughtmanyadvantages:notonlycaninformationbemorewidelydisseminatedthan everbefore,affordablechipintelligencehasalsoenabledindustryandservicesectorstocreateanddistributeproducts andideasatlightningspeed.

Smarter,smallerandmoreenergy-efficientchipsaremadewithincreasinglysophisticatedlithographysystemsproduced byASML.Lithographysystemsarecrucialtotheroadmapsofchipmakerstomakesmallertransistorsonchips.Our businessstrategyisbasedonmaintainingandfurtherdevelopingourpositionasatechnologyleaderinsemiconductor lithography.Whenexecuted,thisstrategyresultsinthedeliveryoflithographysystemswhichenablecustomersto producehighestperformanceandlowestcostchips.Thesuperiorvalueofownershipofferedtocustomersasaresultof ourstrategyalsomaximizesourownfinancialperformance,aligningtheinterestsofASMLandourcustomers.

Customer focus

Ensuringcustomersareservedwiththerightproductsattherighttime,supportedbyexcellentservice,iskeytoour commitmenttoalong-termrelationship.Withhigh-valuedproducts,customersexpecthigh-qualitysupportcustomized totheirspecificrequirements.Thissupportincludesserviceengineers,equippedwiththelatesttechnicalinformation, toensurethehighestlevelsofsystemperformance,aswellasapplicationsspecialistswhosupportoptimalsystem processingandnewproductimplementation.

ASMLaimstodeliverlithographysystemswiththelowestcostofownershipandhighestearnings.

CustomersatisfactionisacriticalobjectiveofASML.Wehaveaccountteamsthatarespecificallydedicatedtocustomer satisfactionthroughoutthelifecycleofourproducts.

Through2012,allofthetop10chipmakersworldwide,intermsofsemiconductorcapitalexpenditure,wereour customers.Wealsohaveasignificantshareofcustomersoutsidethetop10.Westriveforcontinuedbusinessgrowth withallourcustomers.Weexpectcustomerconcentrationtoincreasebecauseofcontinuingconsolidationinthe semiconductormanufacturingindustry.

In2012,oursatisfactionratingsbycustomerssurpassedeverylithographycompetitorforthetenthsuccessiveyear, accordingtoVLSIResearch,anindependentindustryresearchfirmthatsurveyedcustomersrepresenting95.0percent oftheworld'stotalsemiconductormarket.

Technology Leadership

Ourcustomersneedlithographyscannersthatcontinuouslyimproveperformanceinthreeareas:resolution,speed andprecision.Theimageoftheelectronicchipcircuitmustbeextremelysmall(currentlythesmallestfeatureshave asizeoflessthan30nm),thesystemmustbeabletoimagebillionsofthesefeatureseverysecondanditmustbe abletodothatwithextremeprecisionofjustafewnm(onenmisfoursiliconatoms).Torealizeandimprovethis systemperformanceforourcustomers,ASMLneedstodelivertherighttechnologyattherighttimetomeetlongtermroadmapswhichoftenextendmanyyearsintothefuture.Therefore,ASMLiscommittedtosignificantlong-term investmentsinR&Dthatarenotsignificantlyimpactedbyshort-termcyclicalswings.In2012,ourR&Dinvestments (whichincludeR&Dcosts,netofcreditsandadditionstootherintangibleassetsregardingdevelopmentexpenditures excludingcapitalizedborrowingcosts)amountedtoEUR589.1million(2011:EUR590.3million).Asignificantpartof thisbudgetwasusedforR&Djointlydevelopedwithoursuppliersandtechnologypartners.

Ourlithographyscannersarebasedonourdual-stagewaferimagingplatform–theTWINSCANsystem–whichwe introducedin2000andwhichallowsexposureofonewaferwhilesimultaneouslymeasuringthewaferwhichwillbe exposednext.Ourstrongleadershipinthiscapabilityhasallowedustoachievetheindustry'shighestproductivity, enablingreducedcost-per-exposureperwafer.Dual-stagelithographyalsosupportstherequiredaccuracytoposition electronicfeaturesonthewafer,asitallowsformoretimetomeasurethewaferpriortoexposure.Wearetheonly lithographymanufacturerthatenablesvolumeproductionbasedondual-stagesystems.

Inordertomeettheresolution,speedandaccuracydemandsofourcustomers,wehavefocusedourR&Dinvestments onthreecoreprograms:EUV,Immersionandholisticlithographysolutions.

Ourinnovativeimmersionlithographysystemsplaceafluidbetweenthewaferandasystem'sprojectionlenstoenhance focusandenablecircuitline-widthtoshrinktosmallerdimensionsthanwhatispossiblewith"dry"lithographysystems. ASMLpioneeredthis"wet"technologyandhasexperiencedstrongdemandforimmersion-basedsystems,whichhave beenadoptedbymostofourcustomers.

Wehavedevelopeddifferentimmersionsystemsfordifferentcustomerneeds.WehaveoptimizedourTWINSCANXT immersionsystemsforcost-effectiveimagingdownto38nmandbeyondpatterning,andhavedevelopedanewdual waferstagesystemcalledTWINSCANNXTwithimprovedpositioning("overlay")andimaging.TheTWINSCANNXT platformenablesnextgenerationsofsemiconductorsthroughtheso-calleddoublepatterningtechniquewhichrequires twoexposuresperlayeronachip,enablingpreciseimagingpatternsandlinesbyusingourTWINSCANNXTplanar waferstageandbreakthroughgridmetrology.

In2011,weshippedfivesecond-generation(NXE:3100)EUVsystems,inadditiontooneshippedin2010.Our customersareusingtheNXE:3100systemtodeveloptheirEUVmanufacturingprocessesbeforehigh-volumeEUV systemswillbecomeavailable.AsofDecember31,2011,wehadreceived11ordersforthesuccessortotheNXE:3100, thethird-generation(NXE:3300B)high-volumeEUVsystems.TheNXE(EUV)system,utilizinganevolvedTWINSCAN platform,enablesourcustomerstoextendtheirroadmaptowardssmallerchipfeatures.EUVpermitschipmakersto exposeacriticallayerinjustonesinglestep–asopposedtodoublepatterningwhichrequiresmultiplesteps.EUValso hasaroadmapfromtheinitial27nmresolutiondownto16nmandbeyond.Wehavepublishedaroadmaptodevelopa rangeofEUVmodels,offeringthegreatestextendibilityatthelowestcostofownershipforthefutureoflithography.

During2012,ourNXE:3100pre-productionsystemshaveexposedacumulativetotalofmorethan30,000wafersat customerssites,enablingsuccessfulrecipedevelopmentsforthesub14-nmLogicand22nmDRAMnodes.Imagingof theNXE:3300Bcontinuestoimprovebyshowingresultsdownto14nm.WithrespecttotheEUVlightsourcepower,we havebeenabletoshowastablefull-fieldexposepowerofupto40Watts.

OnOctober16,2012,weagreedtoacquireCymer,subjecttocertainclosingconditions.TheacquisitionofCymer, ifcompleted,willhelpusachievingourstrategicobjectiveofdeliveringaneconomicallyviableEUVscannerto semiconductormanufacturersassoonasreasonablypossible.WebelievethatcombiningCymer'sexpertiseinEUVlight sourceswithourexpertiseinlithographysystemsdesignandintegrationwillreducetherisksrelatedtothesuccessful developmentof,andacceleratetheintroductionof,EUVtechnology.

Wecomplementourscannerproductswitharapidlyexpandingholisticlithographyportfolioofsoftwareandmetrology productstohelpourcustomersoptimizesemiconductorscannerperformance,provideafasterstarttochipproduction andachievebetterimagingathigherresolutions.In2012theuseofholisticlithographysolutionscontinuedtogrow. Semiconductormanufacturersfaceincreasinglysmallermarginsoferrorastheyshrinkchipfeatures.Holisticlithography providesawaytoshrinkwithinthesemargins,offeringsignificantrevenue-generatingandcost-savingopportunitiesto ourcustomers.

Operational excellence

Westrivetosustainourbusinesssuccessbasedonourtechnologicalleadershipbycontinuingtoexecuteour fundamentaloperatingstrategy,includingreducinglead-timeswhileimprovingourcostcompetitiveness.Lead-timeis thetimefromacustomer'sordertoatooldelivery.

Ourbusinessstrategyincludesoutsourcingthemanufacturingofthemajorityofcomponentsandsubassembliesthat makeupourproducts.Weworkinpartnershipwithsuppliers,collaboratingonquality,logistics,technologyandtotal cost.Byoperatingourstrategyofvaluesourcing,westrivetoattainflexibilityandcostefficienciesfromoursuppliers throughmutualcommitmentandsharedriskandreward.Valuesourcingalsoallowstheflexibilitytoadapttothe cyclicalityoftheworldmarketforsemiconductorlithographysystems.

WehaveaflexiblelabormodelwithamixoffixedandflexiblecontractedlaborinitsmanufacturingandR&Dfacilities inVeldhoven,theNetherlands,andpayrollemployeescompensatedunderapartlyvariablesalarystructurethrough ASML'sprofitsharingplan.Thisreinforcesourabilitytoadaptmorequicklytosemiconductormarketcycles,including supportforpotential24-hour,sevendays-a-weekproductionactivities.Bymaximizingtheflexibilityofourtechnically skilledworkforce,wecanshortenlead-times:akeydriverofaddedvalueforcustomers.Flexibilityalsoreducesour workingcapitalrequirements.

Inviewoftheeconomicvolatilityofthesemiconductorindustry,wecontinuetostriveimprovingefficienciesinour operations:addressingourcoststructureandstrengtheningourcapabilitytogeneratecash.

Our business model

Ourbusinessmodelisderivedfromour"ValueofOwnership"conceptwhichisbasedonthefollowingprinciples:

• offeringongoingimprovementsinproductivity,imagingandoverlaybyintroducingadvancedtechnologybasedon modularplatformsandadvancedapplicationsoutsidethetraditionallithographybusiness,eachresultinginlower costsorhighervalueperproductforourcustomers;
• providingcustomerservicesthatensurerapid,efficientinstallationandsuperiorsupportandtrainingtooptimize manufacturingprocessesofourcustomersandimproveproductivity;
• maintainingappropriatelevelsofR&Dtoofferthemostadvancedtechnologysuitableforhigh-throughputandlowcostvolumeproductionattheearliestpossibledateenhancing/followingMoore'slaw;
• enhancingthecapabilitiesoftheinstalledbaseofourcustomersthroughongoingfieldupgradesofkeyvaluedrivers (productivity,imagingandoverlay)basedonfurthertechnologydevelopments;
• reducingthecycletimebetweenacustomer'sorderofasystemandtheuseofthatsysteminvolumeproduction;
• expandingoperationalflexibilityinresearchandmanufacturingbyreinforcingstrategicallianceswithworldclass partners,includingoutsourcingcompanies;
• improvingthereliabilityanduptimeofourinstalledsystembase;and
• providingrefurbishingservicesthateffectivelyincreaseresidualvaluebyextendingthelifeofequipment.

Manufacturing, Logistics and Suppliers

Ourbusinessmodelisbasedonoutsourcingproductionofasignificantpartofthecomponentsandmodulesthat compriseourlithographysystems,workinginpartnershipwithsuppliersfromallovertheworld.Ourmanufacturing activitiescomprisethesubassemblyandtestingofcertainmodulesandthefinalassemblyandfinetuning/testingof afinishedsystemfromcomponentsandmodulesthataremanufacturedtoourspecificationsbythirdpartiesandby us.Allofourmanufacturingactivities(subassembly,finalassemblyandsystemfinetuning/testing)areperformedin cleanroomfacilitiesinVeldhoven,theNetherlands,inWilton,Connecticut,theUnitedStatesandinLinkou,Taiwan. Weprocurestepperandscannersystemcomponentsandsubassembliesfromasinglesupplieroralimitedgroupof suppliersinordertoensureoverallqualityandtimelinessofdelivery.Wejointlyoperateaformalstrategywithsuppliers knownas"valuesourcing",whichisbasedoncompetitiveperformanceinquality,logistics,technologyandtotalcost. Theessenceofvaluesourcingistomaintainasupplybasethatisworldclass,globallycompetitiveandgloballypresent.

Ourvaluesourcingstrategyisbasedonthefollowingstrategicprinciples:

• maintaininglong-termrelationshipswithoursuppliers;
• sharingrisksandrewardswithoursuppliers;
• dualsourcingofknowledge,globally,togetherwithoursuppliers;and
• single,dualormultiplesourcingofproducts,wherepossibleorrequired.

Valuesourcingisintendedtoaligntheperformanceofoursupplierswithourrequirementsonquality,logistics, technologyandtotalcosts.

Zeissisoursoleexternalsupplierofmainopticalsystemsandoneofthesuppliersofothercomponents.In2012,26.9 percentofouraggregatecostofsaleswaspurchasedfromZeiss(2011:27.9percent).

ZeissishighlydependentonitsmanufacturingandtestingfacilitiesinOberkochenandWetzlar,Germany,andits suppliers.Moreover,Zeisshasafinitecapacityforproductionoflensesandopticalcomponentsforoursystems.The expansionofthisproductioncapacitymayrequiresignificantlead-time.Fromtimetotime,thenumberofsystemswe havebeenabletoproducehasbeenlimitedbythecapacityofZeisstoprovideuswithlensesandopticalcomponents. However,in2012ourproductionwasnotlimitedbythedeliveriesfromZeiss.

OurrelationshipwithZeississtructuredasastrategicalliancepursuanttoseveralagreementsexecutedin1997and subsequentyears.Theseagreementsdefineaframeworkinallareasofourbusinessrelationship.Thepartnership betweenASMLandZeissisfocusedoncontinuousimprovementofoperationalexcellence.

Pursuanttotheseagreements,ASMLandZeisshaveagreedtocontinuetheirstrategicallianceuntileitherparty providesatleastthreeyears'noticeofitsintenttoterminate.

InadditiontoZeiss,wealsorelyonotheroutsidevendorsforthecomponentsandsubassembliesusedinoursystems, eachofwhichisobtainedfromasinglesupplieroralimitednumberofsuppliers.Seealso"RiskFactors-Thenumber ofsystemswecanproduceislimitedbyourdependenceonalimitednumberofsuppliersofkeycomponents".

WehaveaflexiblelabormodelwithamixoffixedandflexiblecontractedlaborinitsmanufacturingandR&Dfacilities inVeldhoven,theNetherlands,andpayrollemployeescompensatedunderapartlyvariablesalarystructurethrough ASML'sprofitsharingplan.Thisreinforcesourabilitytoadaptmorequicklytosemiconductormarketcycles,including supportforpotential24-hour,sevendays-a-weekproductionactivities.Bymaximizingtheflexibilityofourtechnically skilledworkforce,wecanshortenlead-times:akeydriverofaddedvalueforcustomers.Flexibilityalsoreducesour workingcapitalrequirements.

Organizational Structure

ASMLHoldingN.V.isaholdingcompanythatoperatesthroughitssubsidiaries.Ourmajoroperatingsubsidiaries,each ofwhichisawholly-owned(directorindirect)subsidiary,areASMLNetherlandsB.V.,ASMLSystemsB.V.,ASMLHong KongLimitedandASMLUSInc.

SeeNote27toourconsolidatedfinancialstatementsforalistofourmainsubsidiaries.

ASML operations update

ThefollowingtablepresentsthekeyperformanceindicatorsusedbyourBoardofManagementandseniormanagement tomeasureperformanceinourmonthlyoperationalreviewmeetings.ThefiguresinthetablebelowarebasedonU.S. GAAP.

Year ended December 31 (in millions)	2012 EUR %	1	2011 1 EUR %
Sales
Netsales	4,731.5		5,651.0
Increase(decrease)innetsales(%)	(16.3)		25.4
Netsystemsales	3,801.6		4,883.9
Netserviceandfieldoptionsales	929.9		767.1
Salesofsystems(inunits)	170		222
Averagesellingpriceoftotalsystemsales	22.4		22.0
Averagesellingpriceofnewsystemsales	24.8		24.5
Averagesellingpriceofusedsystemsales	7.6		3.8
ValueofsystemsbacklogexcludingEUV2	1,214.1		1,732.5
SystemsbacklogexcludingEUV(inunits)2	46		71
AveragesellingpriceofsystemsbacklogexcludingEUV2	26.4		24.4
AveragesellingpriceofsystemsbacklogexcludingEUV(New)2	29.8		27.9
AveragesellingpriceofsystemsbacklogexcludingEUV(Used)2	4.0		3.0
Immersionsystemsrecognized(inunits)3	72		101
NXEsystemsrecognized(inunits)4	1		3
Profitability
Grossprofitonsales	2,005.2	42.4	2,449.4	43.3
Incomefromoperations	1,156.8	24.4	1,641.2	29.0
Netincome	1,146.3	24.2	1,467.0	26.0
Liquidity
Cashandcashequivalents	1,767.6		2,731.8
Short-terminvestments	930.0		-
Operatingcashflow	703.5		2,070.4

1 Asapercentageofnetsales.

2 Oursystemsbacklogandnetbookingsincludeonlyordersforwhichwrittenauthorizationshavebeenacceptedandsystemshipmentandrevenue recognitiondateswithinthefollowing12monthshavebeenassigned.

3 Includedinthetotalnumberofimmersionsystemrecognizedin2012are68ofourmostadvancedimmersiontechnologyNXT:1950isystems(2011: 78).

4 ThroughDecember31,2012atotalofsixNXE:3100systemshadbeenshipped.Threeofthesesystemswererecognizedinnetsystemsalesin2011, onewasrecognizedin2012,onewasshippedundertheconditionofanoperatingleasecontractandthelastonewasshippedtoaresearchinstitute.

TheconsolidatedfinancialstatementsincludedinthisStatutoryAnnualReportarebasedonIFRS,asadoptedbythe EU,therefore,theresultsofoperationsanalysissetoutintheremainderofthisparagraphisbasedonIFRS,asadopted bytheEU.ForadetailedexplanationofthedifferencesbetweenU.S.GAAPandIFRS,werefertopages53and54.

Results of Operations

SetforthbelowareourconsolidatedincomestatementdataforthetwoyearsendedDecember31,2012and2011:

Year ended December 31	2012	2011
(in millions)	EUR	EUR
Totalnetsales	4,731.5	5,651.0
Costofsales	2,835.7	3,299.3
Grossprofitonsales	1,895.8	2,351.7
Researchanddevelopmentcosts	298.1	492.1
Selling,generalandadministrativecosts	256.5	216.1
Operatingincome	1,341.2	1,643.5
Interestincome(expense),net	(3.3)	17.3
Incomebeforeincometaxes	1,337.9	1,660.8
Provisionforincometaxes	(35.6)	(166.8)
Netincome	1,302.3	1,494.0

Thefollowingtableshowsasummaryofsales(revenueandunitssold),grossprofitandAverageSellingPrice("ASP") dataonanannualandsemi-annualbasisfortheyearsendedDecember31,2012and2011:

	2012		2011
	First half	Second half		First half	Second half
	year	year	Full year	year	year	Full year
Netsales(EURmillion)	2,479.6	2,251.9	4,731.5	2,981.6	2,669.4	5,651.0
Netsystemsales(EURmillion)	2,034.8	1,766.8	3,801.6	2,618.0	2,265.9	4,883.9
Netserviceandfieldoptionsales(EURmillion)	444.8	485.1	929.9	363.6	403.5	767.1
Totalsalesofsystems(inunits)	96	74	170	126	96	222
Totalsalesofnewsystems(inunits)	89	57	146	114	81	195
Totalsalesofusedsystems(inunits)	7	17	24	12	15	27
Grossprofitasapercentageofnetsales	40.8	39.3	40.1	43.1	39.9	41.6
ASPofsystemsales(EURmillion)	21.2	23.9	22.4	20.8	23.6	22.0
ASPofnewsystemsales(EURmillion)	22.7	28.1	24.8	22.6	27.2	24.5
ASPofusedsystemsales(EURmillion)	2.4	9.7	7.6	3.5	4.0	3.8

Sales

NetsalesdecreasedbyEUR919.5million,or16.3percent,toEUR4,731.5millionin2012fromEUR5,651.0million in2011.ThedecreaseinnetsalesmainlyresultedfromadecreaseinnetsystemsalesofEUR1,082.3million,or22.2 percent,toEUR3,801.6millionin2012fromEUR4,883.9millionin2011,partlyoffsetbyanincreaseinnetserviceand fieldoptionsalesofEUR162.8millionor21.2percenttoEUR929.9millionin2012fromEUR767.1millionin2011, mainlyduethefurtherexpansionofHolisticLithography,integratedmetrologyandfeedbackloops.Thenumberoftotal systemssolddecreasedby23.4percentto170systemsin2012from222systemsin2011,mainlycausedbydecreased demandinMemory,asitsmajordriver,thePCbusinessshrunkcomparedto2011.During2012,themajorityofthe systemsalesweregeneratedfromLogic.

TheASPofoursystemsin2012EUR22.4millionisinlinewith2011EUR22.0million.

Westarted2012withasystemsbacklogexcludingEUVof71systems.In2012,webookedordersfor148systems, receivedordercancellationsfor4systemsandrecognizedsalesfor169systems.Thisresultedinasystemsbacklogof 46asofDecember31,2012.

AsofDecember31,2012,oursystemsbacklogexcludingEUVwasvaluedatEUR1,214.1millionandincludes46 systemswithanASPofEUR26.4million.AsofDecember31,2011,thesystemsbacklogwasvaluedatEUR1,732.5 millionandincluded71systemswithanASPofEUR24.4million.

Profitability

OperatingincomedecreasedtoEUR1,341.2million,or28.3percentofnetsales,in2012fromanoperatingincomeof EUR1,643.5million,or29.1percentofnetsales,in2011.TheEUR302.3milliondecreasewasmainlydrivenbythe decreaseofgrossprofitonthesystemsalesofEUR499.0millionwhichispartlyoffsetbythedecreaseinR&Dcosts ofEUR194.0million.In2012,moredevelopmentexpendituresarecapitalizedasaresultofincreaseddevelopments activitiesrelatingtoimmersion,EUVandholisticlithographsolutions.

GrossprofitdecreasedtoEUR1,895.8millionor40.1percentofnetsalesin2012fromEUR2,351.7millionor41.6 percentofnetsalesin2011.Lowergrossprofitwasmainlydrivenbythedecreasednumberoftotalsystemssold.Gross profitasapercentageofnetsalesin2012decreasedcomparedto2011,mainlyduetoincreasedinfrastructureand manufacturingcost,drivenprimarilybyEUVproduction,lowerutilizationofourproductioncapacityandhighercost incurredinrelationtoexcessandobsoleteinventoryasresultoftechnologicaldevelopmentsanddesignchanges.

Research and development costs

R&Dinvestments(whichincludeR&Dcostsnetofcreditsandadditionstootherintangibleassetsregarding developmentexpendituresexcludingcapitalizedborrowingcosts)ofEUR589.1million(EUR298.1millionR&Dcosts andEUR291.0millionadditionstootherintangibleassetsregardingdevelopmentexpenditures)areinlinewith2011 (2011:590.3million,ofwhichEUR492.2millionR&DcostsandEUR98.1millionadditionstootherintangibleassets regardingdevelopmentexpenditures).R&Dspendingremainedstableandmainlyrelatedtoourstrategicprograms,in particularEUV,immersionandholisticlithography.

Selling, general and administrative costs

Selling,generalandadministrative("SG&A")costsincreasedbyEUR40.4million,or18.7percent,toEUR256.5million in2012,or5.4percentofnetsales,fromEUR216.1millionin2011,or3.8percentofnetsales.Theincreasewas mainlydrivenbytransactioncostsincurredofEUR26.1millionrelatedtotheCustomerCo-InvestmentProgramand

transactioncostsrelatedtotheproposedacquisitionofCymerandcoststoimplementandsupportITsolutionsofEUR 10.2million.

Interest income (expense), net

Netinterestexpensein2012wasEUR3.3millioncomparedwithanetinterestincomein2011ofEUR17.3million. Interestincomerelatestointerestearnedonourcashandcashequivalentsandshort-terminvestments;interestincome declinedin2012duetoaloweryieldreceivedoncashandcashequivalentsandshort-terminvestments,andwasmore thanoffsetbytheinterestexpenseonouroutstandingdebt.

Income taxes

Theeffectivetaxratewas2.7percentofincomebeforeincometaxesin2012,comparedwith10.0percentofincome beforeincometaxesin2011.Thechangeintheeffectivetaxrateismainlyduetoareleaseofourliabilityforuncertain taxpositionsofEUR92.1millionaftersuccessfulconclusionoftaxauditsindifferentjurisdictionswhichpartlyoffsets thetaxexpenses,resultinginanincometaxexpenseofEUR35.6million(2011:EUR166.7million).

Net income

Netincomein2012amountedtoEUR1,302.3million,or27.5percentofnetsales,representingEUR3.07netincome perordinaryshare,comparedwithnetincomein2011ofEUR1,494.0million,or26.4percentofnetsales,representing EUR3.51netincomeperordinaryshare.

Liquidity

ASMLseekstoensurethatcashgeneratedfromoperations,togetherwiththeliquidityprovidedbyexistingcash andcashequivalentsandshort-terminvestmentsanditsborrowingcapability,willbesufficienttosatisfyitsliquidity requirementsthroughouteveryphaseoftheindustrycycles.

OurcashandcashequivalentsdecreasedtoEUR1,767.6millionasofDecember31,2012fromEUR2,731.8millionas ofDecember31,2011andourshort-terminvestmentsincreasedtoEUR930.0million(2011:nil).

WegeneratednetcashfromoperatingactivitiesofEUR999.3millionandEUR2,168.5millionin2012and2011, respectively.Lowernetcashprovidedbyoperatingactivitiesin2012comparedto2011relatestodecreasedsaleslevels anddecreasedaccruedandotherliabilitiesmainlyasaresultofloweramountsofEUVdownpaymentsreceivedin 2012.

WeusedEUR1,413.4millionforinvestingactivitiesin2012andEUR399.0millionin2011.In2012ourinvesting activitiesprimarilyrelatedtoourshort-terminvestmentsinDutchTreasuryCertificatesanddepositswiththeDutch governmentofEUR930.0millionandpurchasesofproperty,plantandequipmentofEUR171.9millionandthepurchase ofintangibleassetsofEUR301.2million.

NetcashusedinfinancingactivitieswasEUR547.8millionin2012comparedwithnetcashusedinfinancingactivities ofEUR991.6millionin2011.In2012netcashusedinfinancingactivitiesincludesthenetcashoutflowofEUR3,728.3 millionfortheSyntheticShareBuyback,EUR535.4millionforourregularsharebuybackprogramsandEUR188.9 millionforourannualdividendpayment,toalargeextentoffsetbytheproceedsofEUR3,853.9millionfromissuance ofsharesundertheCustomerCo-InvestmentProgramandEUR53.8millionnetproceedsfromissuanceofsharesin connectionwiththeexerciseandpurchaseofemployeestockoptions.In2011netcashusedinfinancingactivities includedthecashoutflowofEUR700.5millionusedinourregularsharebuybackprogram,ourannualdividendpayment ofEUR172.6millionandarepaymentofdepositsfromourcustomersofEUR150.0million,partlyoffsetbythenet proceedsfromissuanceofsharesinconnectionwiththeexerciseandpurchaseofemployeestockoptionsofEUR34.1 million.

Ourprincipalsourcesofliquidityconsistofcashflowsfromoperations,cashandcashequivalentsasofDecember31, 2012ofEUR1,767.6million,short-terminvestmentsasofDecember31,2012ofEUR930.0millionandavailablecredit facilitiesasofDecember31,2012ofEUR500.0million.Inaddition,wemayfromtimetotimeraiseadditionalcapitalin debtandequitymarkets.Ourgoalistoremainaninvestmentgraderatedcompanyandmaintainacapitalstructurethat supportsthis.

Weinvestourcashandcashequivalentsandshort-terminvestmentsinshort-termdepositswithhigh-ratedfinancial institutionsandtheDutchgovernment,inDutchTreasuryCertificatesandinAAAm-ratedmoneymarketfunds thatinvestinhigh-ratedshort-termdebtsecuritiesoffinancialinstitutionsandgovernments.Ourinvestmentsare predominantlydenominatedineurosandpartlyinUSdollars.

OuravailablecreditfacilityconsistsofanEUR500.0millioncommittedrevolvingcreditfacilityfromagroupofbanks thatwillmaturein2015.Thecreditfacilitycontainsarestrictivecovenantthatrequiresustomaintainaminimum

committedcapitaltonettotalassetsratioof40.0percentcalculatedinaccordancewithcontractuallyagreed definitions.In2012,wewereincompliancewiththecovenantandcurrentlydonotexpectanydifficultyincontinuingto meetourcovenantrequirement.OutstandingamountsunderthiscreditfacilitywillbearinterestatEURIBORorLIBOR plusamarginthatdependsonourliquidityposition.Noamountswereoutstandingunderthiscreditfacilityattheendof 2012and2011.

Wehaverepaymentobligationsin2017,amountingtoEUR600.0million,onour5.75percentseniornotesdue2017 ("Eurobond").ThecouponsontheEurobondhavebeenswappedtoafloatingratetherebycreatingapartialfairvalue hedgeofthefloatingratecashflowswhichwereceivefrominvestmentsofourcashandcashequivalentsandshortterminvestments.

Ourliquidityneedsareaffectedbymanyfactors,someofwhicharebasedonthenormalon-goingoperationsofthe business,andothersthatrelatetotheuncertaintiesoftheglobaleconomyandthesemiconductorindustry.Although ourcashrequirementsfluctuatebasedonthetimingandextentofthesefactors,webelievethatcashgeneratedfrom operations,togetherwiththeliquidityprovidedbyexistingcashandcashequivalentsandshort-terminvestmentsand ourborrowingcapabilityaresufficienttosatisfyourcurrentrequirements,includingour2013capitalexpenditures.We intendtoreturncashtoourshareholdersonaregularbasisintheformofdividendpaymentsand,subjecttoouractual andanticipatedliquidityrequirementsandotherrelevantfactors,sharebuybacksorcapitalrepayment.

Trend Information

Theyear2012wascharacterizedbyadecreaseddemandforlithographyimagingsystems.Customersmainlydecreased theirMemorycapacityinvestmentsasthePCbusinessshrunkcomparedto2011.Themajorityofthesystemsaleswas generatedfromLogic.

Thefollowingtablesetsforthoursystemsbacklog,excludingEUV,asofDecember31,2012and2011.

2011	2012	Year ended December 31
61	40	NewsystemsbacklogexcludingEUV(inunits)
10	6	UsedsystemsbacklogexcludingEUV(inunits)
71	46	TotalsystemsbacklogexcludingEUV(inunits)
1,702.7	1,190.1	ValueofnewsystemsbacklogexcludingEUV(EURmillion)
29.8	24.0	ValueofusedsystemsbacklogexcludingEUV(EURmillion)
1,732.5	1,214.1	TotalvalueofsystemsbacklogexcludingEUV(EURmillion)
27.9	29.8	ASPofnewsystemsbacklogexcludingEUV(EURmillion)
3.0	4.0	ASPofusedsystemsbacklogexcludingEUV(EURmillion)
24.4	26.4	ASPoftotalsystemsbacklogexcludingEUV(EURmillion)

Outlook

Oursystemsbacklogincludesonlyordersforwhichwrittenauthorizationshavebeenacceptedandsystemshipment andrevenuerecognitiondateswithin12monthshavebeenassigned.Historically,ordershavebeensubjectto cancellationordelaybythecustomer.Duetopossiblecustomerchangesindeliveryschedulesandtocancellation oforders,oursystemsbacklogatanyparticulardateisnotnecessarilyindicativeofactualsalesforanysucceeding period.

Weexpectnetsalesfor2013tobeinlinewith2012supportedbythestrategictechnologytransitionneedforvery lithography-intensive14-20nmfoundryandlogicnodes.Thesenodeswillenablethenextgenerationportableproducts, forwhichallsemiconductorarchitectureleadershavedesignspendingandneedinitialcapacity.Inadditionwewillship ourfirstNXE:3300BEUVtoolinthesecondquartertargetingforamaximumof11potentialshipmentsin2013.

Inthefourthquarterof2012,weannouncedtheintendedcash-and-stockacquisitionoflithographiclightsource supplierCymer.Aspartoftheregulatoryreviewprocess,clearancehasbeengrantedbytheU.S.CommitteeonForeign InvestmentintheUnitedStates(CFIUS)andGermananti-trustauthorities.Completionofthemergerissubjectto customaryclosingconditions,includingexpirationorterminationoftheapplicablewaitingperiodundertheHart-Scott-RodinoActandreceiptofapprovalsunderotherforeigncompetitionlaws.Onfebruary5,2013,theCymerStockholders approvedthemergeragreement.Wecontinuetoexpectthetransactiontocloseinthefirsthalfof2013.Seealso "CymerMerger".

Subjecttomarketconditions,weexpectthatourcapitalexpenditures(purchasesofproperty,plantandequipment) in2013willbeapproximatelyEUR369.8million(2012:EUR171.9million).Theseexpenditureswillmainlyconsistof investmentsusedforthefinalizationofcapacityexpansionofEUVproductionfacilities,whichweplantofinalizeby theendof2014,andexpansionofourfacilitiestosupportour450mmactivities.Weexpecttofinancethesecapital expendituresthroughcashgeneratedbyoperationsandcashandcashequivalents.

Weexpectourheadcount(bothfixedandflexemployees)toincreaseduring2013,mainlyfollowingfromthe accelerationofourR&Dactivities.

Customer Co-Investment Program

Overview

OnJuly9,2012,weannouncedourCustomerCo-InvestmentProgramtoaccelerateourdevelopmentofEUVtechnology beyondthecurrentgenerationandourdevelopmentoffuture450mmsiliconwafertechnology.Theparticipating customersagreedtofundEUR1.38billionofourresearchanddevelopmentprojectsfrom2013through2017.This programcreatesrisksharingwithsomeofourlargestcustomerswhiletheresultsofASML'sdevelopmentprogramswill beavailabletoeverysemiconductormanufacturerwithnorestrictions.TheR&DfundingprogramintheCustomerCo-InvestmentProgramconsistsoftwofundingprojects:a450mmtechnologydevelopmentprojectandanext-generation EUVdevelopmentproject.ASMLhasenteredintoNonRecurringEngineering("NRE")fundingagreementswiththe participatingcustomers.

Inadditiontothefundingcommitmentsdescribedabove,theparticipatingcustomershaveinvestedinordinaryshares equal,inaggregate,to23percentofASML'sissuedsharecapital(calculatedgivingeffecttoourSyntheticShare BuybackinNovember2012).Theproceedsoftheshareissuance,EUR3.85billion,werereturnedtotheholdersof ordinaryshares(excludingtheparticipatingcustomers)throughaSyntheticShareBuybackexecutedinNovember2012. ForfurtherinformationregardingtheSyntheticShareBuyback,seeNote18toourconsolidatedfinancialstatements.

Description of Investment Agreements, Shareholder Agreements and NRE Funding Agreements

InconnectionwiththeCustomerCo-InvestmentProgram,ASMLenteredintoaninvestmentagreement,ashareholder agreementandNREfundingagreementswitheachoftheparticipatingcustomers.Intelisthelargestparticipantinthe program,withanaggregatefundingcommitmentofEUR829millionandaninvestmentin15percentofourordinary shares(calculatedgivingeffecttoourSyntheticShareBuybackinNovember2012).Adescriptionoftheinvestment agreement,shareholdersagreementandNREfundingagreementsbetweenASMLandIntelissetoutbelow.The agreementsbetweenASMLandtheotherprogramparticipants-TSMC(whichacquired5percentofoursharesand madeaEUR277millionfundingcommitment)andSamsung(whichacquired3percentofoursharesandmadeaEUR 276millionfundingcommitment)areonsubstantiallythesametermsasthoseagreedwithIntel.Shareswereacquired byDutchfoundations("Stichtingen")establishedforeachparticipant.

Investment Agreements

PursuanttotheinvestmentagreementbetweenASMLandIntel,datedJuly9,2012("theIntelInvestmentAgreement"), ASMLhasissuedanddeliveredtoIntelStichtingordinarysharesequalto15percentoftheissuedordinaryshareswith simultaneousissuancebytheIntelStichtingtoIntelofthecorrespondingdepositaryreceipts.

PursuanttotheinvestmentagreementbetweenASMLandTSMC,datedAugust5,2012(the"TSMCInvestment Agreement")ASMLhasissuedanddeliveredtoStichtingAdministratiekantoorTSMC("TSMCStichting")ordinaryshares equalto5percentoftheissuedordinaryshareswithsimultaneousissuancebytheTSMCStichtingtoTSMCofthe correspondingdepositaryreceipts.

PursuanttotheinvestmentagreementbetweenASMLandSamsung,datedAugust27,2012(the"SamsungInvestment Agreement"andtogetherwiththeIntelInvestmentAgreementandTSMCInvestmentAgreement,the"Investment Agreements"),ASMLhasissuedanddeliveredtotheSamsungStichtingordinarysharesequalto3percentoftheissued ordinaryshareswithsimultaneousissuancebytheSamsungStichtingtoSamsungofthecorrespondingdepositary receipts.

ThesubscriptionpricefortheordinarysharesundertheInvestmentAgreementswasEUR39.91perordinaryshare, whichistheaverageofthevolumeweightedaveragepriceoftheordinarysharesonNYSEEuronextAmsterdamforthe twentytradingdaysuptoandincludingJuly6,2012.

Baseduponthesubscriptionprice(EUR39.91)includedintheInvestmentAgreements,theequityparticipationofIntel (15percent),TSMC(5percent)andSamsung(3percent)amounttoEUR2,513million,EUR838millionandEUR503 million,respectively.

UndertheIntelInvestmentAgreements,ASMLhasagreedtoindemnifytheparticipatingcustomersandtheiraffiliates forcertainlossesandexpensesrelatedtobreachesofrepresentations,warranties,covenantsandagreementsinthe InvestmentAgreementsandwithrespecttocertainlegalproceedingsrelatedthereto,subjecttocertainlimitations.

Shareholder Agreements

InconnectionwiththeissuanceofsharespursuanttotheIntelInvestmentAgreement,onSeptember12,2012ASML, IntelandtheIntelStichtingenteredintoashareholderagreement(the"ShareholderAgreement")whichgovernscertain mattersrelatingtotheholdingofandfurtherinvestmentbyIntelinordinarysharesofASML,directlyandindirectly throughtheIntelStichting,includingthemattersdescribedbelow.

TheshareholderagreementsbetweenASMLandtheotherprogramparticipants(TSMCandSamsung)areon substantiallythesametermsasthoseagreedwithIntel.

Voting Restrictions

PursuanttotheIntelShareholderAgreement,Intel(andtheIntelStichting)willnotbeentitledtovotetheordinaryshares acquiredbytheIntelStichtingaspartoftheCustomerCo-InvestmentProgramoranyotherASMLordinaryshares otherwisetransferredtotheIntelStichting(underthecircumstancesdescribedunder"Standstill;AdditionalPurchases" below)priortoaShareholderAgreementTerminationEvent(asdefinedbelow),exceptwhenaSuspensionEvent(as describedbelow)occursandiscontinuingorwherethefollowingmattersareproposedatanyGeneralMeeting(the "VotingRestrictions"):(i)anissuanceofASMLsharesorgrantofrightstosubscribeforASMLsharesrepresenting25 percentormoreoftheissuedandoutstandingsharecapitalofASMLortherestrictionorexclusionofpre-emptionrights relatingthereto(ineachcase,onanaggregatebasisduringthepreceding12months)orthedesignationoftheBoardof Managementastheauthorizedbodytoresolveonthesematters;(ii)anauthorizationtorepurchase25percentormore ofASML'sissuedandoutstandingsharecapitalonanaggregatebasisduringthepreceding12months;(iii)theapproval ofasignificantchangeintheidentityornatureofASMLorourbusiness,includingatransferofallorsubstantiallyall businessorassetsofASMLandoursubsidiariestoathirdparty,theestablishmentorcancellationofalong-lasting cooperationofessentialimportancewithathirdpartyandanacquisitionordispositionofaninterestinthecapitalor assetsofapersonwithavalueofatleastonethirdoftheassetsofASML(onaconsolidatedbasis);(iv)anamendment toASML'sArticlesofAssociationthatwouldmateriallyaffectthespecificvotingrightsofIntel,wouldmateriallyaffect theidentityornatureofASMLorourbusiness,orwoulddisproportionately(oruniquely)andadverselyaffecttherights orbenefitsattachedtoorderivedfromtheordinarysharesheldbyIntelthroughtheIntelStichtingascomparedtothe shareholders;(v)thedissolutionofASML;and(vi)anymergerordemergerwhichwouldresultinamaterialchangeinthe identityornatureofASMLoritsbusiness.

Standstill, Lock-up and Orderly Market Arrangements

Standstill;AdditionalPurchases

Subjecttocertainexceptions,pursuanttotheShareholderAgreement,Intel(oritsaffiliates)maynot,priortothe six-yearanniversaryofthedateoftheIntelShareholderAgreement(the"StandstillPeriod"),acquiremorethan19.9 percentoftheoutstandingsharecapitalofASMLwithoutASML'spriorapproval(the"StandstillRestriction").Thereis anexceptionfromtheStandstillRestrictioninthecaseofa'suspensionevent',whichincludescertaincircumstances whereathirdpartyhasacquiredormadeanoffertoacquireatleast20percentofASML'soutstandingshares,andthe StandstillRestrictionwillterminateupontheoccurrenceofaShareholderAgreementTerminationEvent.

TheShareholderAgreementpermitsIntel(anditsaffiliates)toacquireupto4.99percentofASML'soutstandingshares (otherthansharesacquiredthroughtheCustomerCo-InvestmentProgram)thatmaybeheldoutsidetheIntelStichting. ForanyadditionalASMLsharesthatIntel(oritsaffiliates)acquiresinexcessof4.99percentoftheoutstandingshares ofASML,IntelisrequiredtodepositsuchshareswiththeIntelStichtinginexchangeforDepositaryReceipts.Shares helddirectlybyInteloritsaffiliates(andwhichnotrequiredtobedepositedwiththeIntelStichting)arenotsubjectto theVotingRestrictions,orLock-UpRestrictions(asdefinedbelow),butaresubjecttotheStandstillRestriction.

TheIntelStichtingwillcontinuetoholdASMLsharesownedbyIntel(notwithstandingterminationoftheStandstill Period)untiltheearlierof(i)suchtimeasIntelowns(directlyorthroughtheIntelStichting)lessthan2percentofASML's outstandingshares(therelevantpercentageis1percentfortheotherparticipatingcustomers)(ii)thedateofnotification toASMLbyparticipatingcustomersthattheaggregateamountofASML'soutstandingsharesownedbyInteland

theotherparticipatingcustomersrepresentslessthan5percentofASML'soutstandingsharesand(iii)aShareholder AgreementTerminationEvent(asdefinedbelow),followingwhichtimeDepositaryReceiptswillbeexchangedforthe underlyingASMLshares.IncaseIntelwouldacquireASMLshareswithin18monthsafteraneventdescribedunder (i)or(ii)above,anyASMLsharesheldbyIntelinexcessof4.99percentoftheoutstandingsharesofASMLmustbe transferredto(andheldby)theIntelStichting.

Lock-up;OrderlySellDown

Intelmaynot,withoutpriorwrittenconsentofASML,transferanyordinarysharesorDepositaryReceiptsuntilthe earliestof(i)twoyearsandsixmonthsafterthedateoftheIntelShareholderAgreement,(ii)terminationoftheNRE fundingagreements,and(iii)theoccurrenceofaShareholderAgreementTerminationEvent((i),(ii)and(iii)together,the "Lock-UpRestriction").TheLock-UpRestrictiondoesnotapplyincertaincircumstanceswhereathirdpartyoffersto acquireatleast20percentofASML'sshares.IntelisnotpermittedtotransfertheASMLordinarysharesitacquiredin theprograminconnectionwithanoffer(beforetheendoftheoffer),ormakeanypublicstatementinsupportofsuch offer,thatisnotrecommendedbytheASMLSupervisoryBoardorManagementBoard,exceptinlimitedcircumstances.

Inaddition,Intelmaynot(evenaftertheLock-UpPeriodhasended),withoutwrittenconsentofASML,transferon NYSEEuronextAmsterdam,NASDAQoranothersecuritiesexchangemorethan(i)inrespectofIntel,4percentofthe outstandingsharesofASML(therelevantpercentageis1.5percentforSamsungand2.5percentforTSMC).Thereare alsorestrictionsonIntel'sabilitytotransferASMLsharestocertaincompetitorsorcustomersofASML.

Termination

TheIntelShareholderAgreementwillterminateupontheoccurrenceofthefollowingevents(eacha"Shareholder AgreementTerminationEvent")(i)certainchangeofcontroltransactionsweretheshareholdersofASMLpriortosuch atransactionarenolongerentitledtoexerciseatleast50percentofthevotesintheGeneralMeetingfollowingsuch transaction,(ii)intheeventofadelistingoftheOrdinarySharesfromNYSEEuronextAmsterdamordelistingfrom NASDAQ(exceptforcertainvoluntarydelistingsfromNASDAQ),(iii)thewindinguporliquidationofASML,or(vi)inthe eventthatallDepositaryReceiptsareexchangedforASMLsharesandInteldoesnotacquireASMLsharesinexcessof 4.99percentoftheoutstandingASMLshareswithin18monthsofsuchexchange(see"Standstill;AdditionalPurchases" above).

NRE Funding Agreements

OnJuly9,2012,ASMLandIntelenteredintotwoNREfundingagreementspursuanttowhichIntelwillsupportASML's R&Dcostsandprojectexpenditures.Oneagreementrelatestothedevelopmentof450mmlithographyequipment (the"Intel450mmNREFundingAgreement")andtheotherrelatestothedevelopmentofEUVlithographyequipment (the"IntelEUVNREFundingAgreement"andtogetherwiththeIntel450mmNREFundingAgreement,the"IntelNRE FundingAgreements").IntelhascommittedtoprovideEUR553millioninfundingundertheIntel450mmNREFunding AgreementandEUR276millioninfundingundertheIntelEUVNREFundingAgreement,payableovertherespective terms(2013-2017)oftheIntelNREFundingAgreements.

OnAugust5,2012,ASMLandTSMCenteredintotheTSMCNREfundingagreement(the"TSMCNREFunding Agreement")pursuanttowhichTSMCwillsupportASML'sR&Dcostsandprojectexpendituresrelatingtothe developmentof450mmlithographyequipmentandEUVplatforms.TSMChascommittedtoprovideEUR277millionin fundingpayableovertheterm(2013-2017)oftheTSMCNREFundingAgreement.

OnAugust27,2012,ASMLandSamsungenteredintotheSamsungNREfundingagreement(the"SamsungNRE FundingAgreement")pursuanttowhichSamsungwillsupportASML'sR&Dcostsandprojectexpendituresrelatingto thedevelopmentof300mm/450mmlithographyequipmentandEUVplatforms.Samsunghascommittedtoprovide EUR276millioninfundingpayableovertheterm(2013-2017)oftheSamsungNREFundingAgreement.

UndertheIntelNREFundingAgreements,theTSMCNREFundingAgreement,andtheSamsungNREFunding Agreement(togetherthe"NREFundingAgreements"),ASMLwillretainsolecontroloverthedevelopmentof450mm photolithographyequipmentandEUVplatformsandwillownallintellectualpropertycreatedbyASMLinconnection therewith.TheNREFundingAgreementsprovidethatifASML,initsreasonablediscretion,determinestoabandon eitherthe450mmorEUVdevelopmentproject,asaresultoftechnicalinfeasibilityorlackofsufficientindustrydemand, orifthethenremainingfundingexceedstheexpenditureestimateforthedevelopmentproject(450mmorEUV) thenthepartiesmayagreeonanalternativedevelopmentproject,andifnoalternativeisagreed,ASMLmayinvoice theparticipatingcustomersfortheremainingdueportionofcommittedfundingduringeachyearoftheremaining fundingperiodinwhichASML'sactualgrossR&DexpendituresexceedaminimumthresholdspecifiedintheNRE

FundingAgreements.TheNREFundingAgreementswillterminateonDecember31,2017oruponpre-paymentbythe participatingcustomeroftheaggregateamountoffundingowedunderitsrespectiveNREFundingAgreement.

Commercial Agreement

OnJuly9,2012,ASMLandIntelenteredintoaCommercialAgreement,pursuanttowhichASMLandIntelestablished acontractualframeworkforInteltopurchaseequipmentrelatedtothe450mmandEUVnext-generationlithography equipment.Underthisagreement,Intelhascommittedtopurchasespecifiednumbersof450mmandEUVtools. Theagreementsetsforthpricingtermsforthetoolsaswellasmilestonesrelatedtoproductdeliveries,andprovides forcertaincommercialdiscountsintheformofcreditsinexchangeforIntel'searlypurchasecommitmentsand volumepurchasecommitmentsandforspecifiedadditionalcreditsintheeventthatcertainschedulesarenotmet.In addition,subjecttocertainconditions,ASMLhasagreedtoinstallsufficientcapacitytomeetIntel'sforecasted450mm lithographyequipmentneedsthrough2022.

ForfurtherdetailsregardingtheshareissuancestotheparticipatingcustomersandtheSyntheticShareBuyback effectuatedinconnectionwithourCustomerCo-InvestmentProgram,seeNote18andNote35.

Cymer Merger

The Merger

OnOctober16,2012,weenteredintoamergeragreementwithCymer,acompanyengagedinthedevelopment, manufacturingandmarketingoflightsourcesforsaletocustomerswhomanufacturephotolithographytoolsinthe semiconductorequipmentindustry(the"MergerAgreement"),underwhichASMLwillacquirealloutstandingshares ofcommonstockofCymerforaconsiderationperCymershareofCymercommonstockofUSD20.00incashanda fixedratioof1.1502ASMLOrdinaryShares.Completionoftheacquisitionissubjecttocustomaryclosingconditions, includingexpirationorterminationoftheapplicablewaitingperiodundertheHart-Scott-RodinoActandreceiptof approvalsunderotherforeigncompetitionlaws.Onfebruary5,2013,theCymerStockholdersapprovedthemerger agreement.Weexpectthetransactiontocloseinthefirsthalfof2013,thereisnoassurancethatthetransactionwillbe completedwithintheexpectedtimeperiodoratall.

The Merger Agreement

Merger Consideration

TheMergerAgreementprovidesthateachshareofCymercommonstockoutstandingimmediatelypriortothe consummationoftheMerger(otherthansharesownedbyASML,ASMLUSInc.("Holdco"),KonaAcquisitionCompany Inc.("MergerSub"),KonaTechnologiesLLC("MergerSub2"),anyotherwhollyownedsubsidiaryofASML,orheldin thetreasuryofCymerorownedbyanywhollyownedsubsidiaryofCymer(the"ExcludedShares"))willbeconverted intotherighttoreceivefromHoldco(i)USD20.00incash,withoutinterestthereon,and(ii)1.1502ASMLOrdinary Shares.NofractionalOrdinaryShareswillbeissued.InlieuoffractionalOrdinaryShares,Cymerstockholdersthat wouldotherwisebeentitledtoafractionalOrdinarySharewillreceiveincashanamountequaltotheproductofthe ASMLSharePrice(asdefinedintheMergerAgreement)andthefractionalOrdinarySharetowhichsuchholderwould otherwisebeentitled.

Inaddition,forpurposesofcomplyingwithrequirementsofDutchlaw,uponconsummationofthemerger,eachholder ofCymercapitalstock(otherthanholdersofExcludedShares)willbeentitledtoreceivetheDutchCompensation Amount(asdefinedintheMergerAgreement)fromASML,tobesetoffagainsttheobligationtopayuptheOrdinary Sharesasdescribedbelow.ByvirtueoftheMerger,eachCymerstockholderwillbedeemedtohavesubscribedforthe OrdinarySharestobeissuedtosuchholderpursuanttotheMerger.InaccordancewiththelawsofTheNetherlands, eachCymerstockholder,asaresultofsuchdeemedsubscription,willbeobligatedtopayupsuchOrdinarySharesin anamount,determinedsolelyforthepurposeofsatisfyingsuchobligation,equaltotheDutchCompensationAmount towhichsuchholderisentitledbyvirtueoftheMerger.SuchobligationwillbesatisfiedbysuchCymerstockholder bysetoffbyASMLofsuchobligationagainsttherightofsuchCymercommonstockholdertoreceivefromASMLthe DutchCompensationAmount,andwillhavenoeffectonthereceiptbyaCymercommonstockholderofthemerger consideration.

Conditions to the Merger

Eachparty'sobligationtoeffecttheMergerissubjecttosatisfactionorwaiver,atorpriortotheclosingofthemerger, ofcertainconditions,including,amongotherthings,certainregulatoryapprovals(includingtheexpirationortermination ofallapplicablewaitingperiodsundertheU.S.Hart-Scott-RodinoAntitrustImprovementsActof1976,asamended, andapprovaloftheCommitteeonForeignInvestmentintheUnitedStates),obtainingcertainrequiredclearancesunder certainforeignmergercontrollaws,effectivenessoftheregistrationstatementfiledintheUnitedStatesrelatingtothe Merger,andtheaccuracyofcertainrepresentationsandwarrantiesprovidedbyeachpartyundertheMergerAgreement.

Representations and Warranties

TheMergerAgreementcontainsrepresentationsandwarrantiesthatCymer,ontheonehand,andASML,Holdco, MergerSubandMergerSub2,ontheotherhand,havemadetoeachother,including,amongotherthings,organization, corporatepowerandauthority,financialcondition,compliancewithlaws,environmentalmatters,intellectualproperty, realpropertyandavailabilityofcashconsideration.

Covenants

TheMergerAgreementcontainscovenantsofbothparties,includingrestrictionsonCymerwithregardtotheabilityto, amongotherthings,issue,sell,pledgeorredeemsharesofCymercommonstock,makeacquisitionsorinvestments, disposeofassets,createsecurityrightsandincurindebtedness.IntheMergerAgreement,thepartieshavestated theirintentthat,subjecttothetermsoftheMergerAgreement,ASMLanditssubsidiariesarefreetoconducttheir businessesandoperationswithoutrestrictionsbetweenthedateoftheMergerAgreementandtheclosingofthemerger, exceptforcertainrestrictionsontheabilityofASMLtoredeemOrdinaryShares,paydividendsorotherwisemake apaymenttoholdersofOrdinaryShares(otherthanpursuanttotheSyntheticShareBuyback)andtheenteringinto contractsthatcouldreasonablybeexpectedtopreventormateriallydelaytheconsummationoftheMerger.

ForaperiodofsixyearsafterconsummationoftheMerger,ASMLandthesurvivingentitywill,tothefullestextent permittedunderapplicablelaw,indemnifyandholdharmless,eachofCymer'sanditssubsidiaries'presentandformer directors,officersandemployeesagainstallcostsandexpenses(includingattorneys'fees),judgments,fines,losses, claims,damages,liabilitiesandsettlementamountspaidinconnectionwithanyclaim,action,suit,proceedingor investigationtotheextenttheywereindemnifiedunderCymer'sarticles,bylawsandindemnificationcontractsineffect asofthedateoftheMergerAgreementwithrespecttoanyactionoromissionintheircapacityasanofficer,directoror employee,atorpriortotheconsummationofthemerger.

Termination

TheMergerAgreementmaybeterminatedatanytimepriortotheeffectivetimeofthemerger,(i)bythemutual writtenconsentofASMLandCymerand(ii)byASMLorCymerif(a)acourtorgovernmentalentityissuesafinal orderprohibitingtheMerger,(b)theCymerstockholdersdonotapprovetheMergerAgreement,(c)theMergerisnot consummatedonorbeforeJuly16,2013andpartieshavenotextendedthisdate,(d)theotherpartyhasbreached orfailedtoperformitsrepresentationsandwarranties,covenantsoragreementsintheMergerAgreementor(e)the CymerboardchangesitsrecommendationtoCymerstockholderstoapprovetheMergerAgreementorfailstoinclude itsrecommendationintheproxystatement/prospectusthathasbeenfiledwiththeSEC.

AllcostsandexpensesincurredbythepartiesinconnectionwiththeMergerAgreementandthetransactions contemplatedtherebyaretobepaidbythepartythathasincurredsuchcostsandexpenses,whetherornotthe Mergerisconsummated.However,CymermustpayASMLaterminationfeeofUSD75millioniftheMergerAgreement isterminatedoncertaingroundsincluding,amongotherthings,terminationbecausetheCymerboardchangesits recommendationtoCymerstockholderstoapprovetheMergerAgreementinconnectionwithasuperioracquisition proposaloraninterveningeventor(subjecttocertainconditions)theMergerisnotconsummatedonorbeforeJuly16, 2013(oranydatetowhichtheterminationdateisextended,butnotlaterthanOctober16,2013).

Remuneration of the Supervisory Board

TheremunerationofthemembersoftheSupervisoryBoardisnotdependentonourfinancialresults.Nomemberofthe SupervisoryBoardpersonallymaintainsabusinessrelationshipwithASMLotherthanasamemberoftheSupervisory Board.TheRemunerationCommitteeisresponsibleforreviewingand,ifappropriate,recommendingchangesto theremunerationoftheSupervisoryBoard.Anyrecommendedchangestotheremunerationofthemembersofthe SupervisoryBoardmustbesubmittedtotheGeneralMeetingofShareholdersforapproval.Formoredetailsregarding theremunerationoftheSupervisoryBoardwerefertoNote30toourconsolidatedfinancialstatements.

Remuneration of the Board of Management

TheremunerationoftheindividualmembersoftheBoardofManagementisdeterminedbytheSupervisoryBoardbased ontheadviceoftheRemunerationCommitteeoftheSupervisoryBoard.Formoredetailsregardingtheremunerationof theBoardofManagement,werefertotheCorporateGovernanceParagraphandNote30toourconsolidatedfinancial statements.

Corporate Governance

ASMLcontinuouslymonitorsandassessesapplicableDutch,U.S.,andotherrelevantcorporategovernancecodes, rules,andregulations.ASMLissubjecttotheCode,asASMLisregisteredintheNetherlandsandislistedonNYSE EuronextAmsterdam.FormoredetailswerefertotheCorporateGovernanceParagraph.

Directors' Responsibility Statement

TheDirectors'ResponsibilityStatementisincludedinthisreportonpages55and56.

Sustainability Report 2012

SustainabilityoverthelongtermisessentialintherelationshipbetweenASMLanditscustomers,becausecustomers relyonusfortheirlong-termroadmapstowardssmarterandmoreenergyefficientmicrochips.

Sustainability Governance

In2009,ASMLdecidedtosignificantlystrengthenitscommitmentintheareaofsustainabilitybysettinganumber ofstringentobjectivestobereachedby2015.ItisthemissionoftheSustainabilityBoardtomonitortherealization oftheseobjectives.ThemandategivenbytheBoardofManagementtotheSustainabilityBoardistoreviewand makerecommendationsonoursustainabilitymanagementsystemandpolicies,authorizeorrecommendplanstothe BoardofManagement,provideguidancetomanagementonobjectivesandtargets,monitorandprovideguidance onsustainabilityperformanceandtargets,monitorandoverseesustainabilityriskmanagementreviewandmonitor stakeholderrelations,andreviewandmakerecommendationsonsustainabilityimpactsofmajorbusinessdecisions. TheSustainabilityBoardalsodeterminesthescope,providesinput,andrecommendstotheBoardofManagement adoptionoftheSustainabilityReport.

In2010,theSustainabilityBoardestablishedtheCorporateSustainabilitydepartmenttocoordinatetheimplementation oftheoverallsustainabilitystrategyandpoliciesonaday-to-daybasis.

In2011,seniormanagementdecidedtoexpandtheSustainabilityGovernancestructurebynominatinga'domainowner' foreachofthefourstrategicfocusareas.Domainownersareresponsibleforcoordinatingtheimplementationofthe sustainabilitygoalsintheirrespectivedomains.

In2012,asresultofthenominationofdomainownersin2011,theimplementationofoursustainabilitystrategy accelerated,leadingtoachievementofseveralofourtargetsearlierthananticipated.

Sustainability Strategy

Ourcustomerswantchip-makingmachinesthatproducemorechipsfaster,usinglessenergyandfewernatural resources,atasimilarcost.Theyalsowantus,astheirsupplier,tooperateaccordingtothehighestenvironmental, socialandgovernancestandards.Oursustainabilitystrategythusgoeshandinhandwithourbusinessstrategy,aimed atmaintainingandfurtherdevelopingourpositionasatechnologyleaderinthesemiconductorindustry.

ASML'ssustainabilitystrategyfocusesonfourdomains:sustainableoperations,sustainableproducts,sustainablevalue chainandsustainableculture:

• Focusingonsustainableoperationsmeansweseektoreducetheenvironmentalimpactofbothourmanufacturing processandourresearchanddevelopmentactivities;
• Providingsustainableproductmeanswecontinuouslystrivetomakeourchip-makingmachinesmoreefficient, enablingourcustomerstoreducetheirenergyandnaturalresourcesconsumptionperchipproduced;
• Focusingonasustainablevaluechainsignifiesourambitiontostimulateoursupplierstomeetincreasinglyhigh sustainabilitystandardsandtoenableourcustomerstopositivelyinfluencetheirimpactonenvironmentandsociety;

• Focusingonasustainableculturemeansweseektoprovideaworkingenvironmentthatinspiresourhighly-skilled workforceandrespectstheirculturalandindividualdifferences.Italsomeansweseektomakeapositivecontribution tothewell-beingofthecommunitiesinwhichweoperate.

U.S. GAAP and Dutch Statutory Annual Reports

General

ASMLpreparestwosetsoffinancialstatements,onebasedonU.S.GAAPandonebasedonDutchlawandIFRS asadoptedbytheEU.Bymeansofregulation1606/2002,theEuropeanCommissionhasstipulatedthatalllisted companieswithintheEuropeanUnionmemberstatesarerequiredtopreparetheirconsolidatedfinancialstatements underIFRSasadoptedbytheEUasfromJanuary1,2005.

TheconsolidatedfinancialstatementsincludedinthisStatutoryAnnualReportarebasedonIFRSasadoptedbytheEU. Forinternalandexternalreportingpurposes,ASMLfollowsU.S.GAAP,whichisASML'sprimaryaccountingstandardfor settingfinancialandoperationalperformancetargets.

ASML'sAnnualReportonForm20-F,whichisbasedonU.S.GAAP,maycontainadditionalinformationnexttoits StatutoryAnnualReport.TheAnnualReportonForm20-F,theU.S.GAAPquarterlypressreleases(includingsummary U.S.GAAPandIFRSconsolidatedfinancialstatements),theStatutoryInterimReportandtheStatutoryAnnualReport areavailableonASML'swebsiteatwww.asml.com.FortheperiodspresentedinthisStatutoryAnnualReport,themain differencesbetweenIFRSandU.S.GAAPforASMLrelatetothefollowing:

2011	2012	Year ended December 31
EUR	EUR	(in thousands)
1,466,960	1,146,316	Net income based on U.S. GAAP
(2,219)	164,736	Capitalizationofdevelopmentexpenditures
(315)	(959)	Share-basedpayments
4,620	(7,159)	Reversalofwrite-downs
25,025	(587)	Incometaxes
1,494,071	1,302,347	Net income based on IFRS

2011 EUR	2012 EUR	As of December 31 (in thousands)
3,444,154	4,066,893	Equity under U.S. GAAP
232,995	396,894	Capitalizationofdevelopmentexpenditures
2,711	4,061	Share-basedpayments
7,166	-	Reversalofwrite-downs
32,779	30,354	Incometaxes
3,719,805	4,498,202	Equity under IFRS

Development expenditures

UnderIFRS,ASMLappliesIAS38,"IntangibleAssets".InaccordancewithIAS38,ASMLcapitalizescertain developmentexpendituresthatareamortizedovertheexpectedusefullifeoftherelatedproductgenerallyranging betweenoneandthreeyears.Amortizationstartswhenthedevelopedproductisreadyforvolumeproduction.

UnderU.S.GAAP,ASMLappliesASC730,"ResearchandDevelopment".InaccordancewithASC730,ASMLcharges costsrelatingtoresearchanddevelopmenttooperatingexpenseasincurred.

Share-based payments

UnderIFRS,ASMLappliesIFRS2,"Share-basedPayments"beginningfromJanuary1,2004.InaccordancewithIFRS 2,ASMLrecordsasanexpensethefairvalueofitsshare-basedpaymentswithrespecttostockoptionsandstock grantedtoitsemployeesafterNovember7,2002.UnderIFRS,atperiodendadeferredtaxassetiscomputedonthe basisofthetaxdeductionfortheshare-basedpaymentsundertheapplicabletaxlawandisrecognizedtotheextent itisprobablethatfuturetaxableprofitwillbeavailableagainstwhichthesedeductibletemporarydifferenceswillbe utilized.Therefore,changesintheASML'ssharepricedoaffectthedeferredtaxassetatperiod-endandresultin adjustmentstothedeferredtaxasset.

AsofJanuary1,2006,ASMLappliesASC718"Compensation-StockCompensation"whichrequirescompanies torecognizethecostofemployeeservicesreceivedinexchangeforawardsofequityinstrumentsbaseduponthe grant-datefairvalueofthoseinstruments.ASC718'sgeneralprincipleisthatadeferredtaxassetisestablishedaswe recognizecompensationcostsforcommercialpurposesforawardsthatareexpectedtoresultinataxdeductionunder existingtaxlaw.UnderU.S.GAAP,thedeferredtaxrecordedonshare-basedcompensationiscomputedonthebasisof theexpenserecognizedinthefinancialstatements.Therefore,changesinASML'ssharepricedonotaffectthedeferred taxassetrecordedinourfinancialstatements.

Reversal of write-downs

UnderIFRS,ASMLappliesIAS2(revised),"Inventories".InaccordancewithIAS2,reversalofapriorperiodwrite-down asaresultofasubsequentincreaseinvalueofinventoryshouldberecognizedintheperiodinwhichthevalueincrease occurs.

UnderU.S.GAAP,ASMLappliesASC330"Inventory".InaccordancewithASC330reversalofawrite-downis prohibitedasawrite-downcreatesanewcostbasis.

Income taxes

UnderIFRS,ASMLappliesIAS12,"IncomeTaxes"beginningfromJanuary1,2005.InaccordancewithIAS12 unrealizednetincomeresultingfromintercompanytransactionsthatareeliminatedfromthecarryingamountofassets inconsolidationgiverisetoatemporarydifferenceforwhichdeferredtaxesmustberecognizedinconsolidation.The deferredtaxesarecalculatedbasedonthetaxrateapplicableinthepurchaser'staxjurisdiction.

UnderU.S.GAAP,theeliminationofunrealizednetincomefromintercompanytransactionsthatareeliminatedfrom thecarryingamountofassetsinconsolidationgiverisetoatemporarydifferenceforwhichprepaidtaxesmustbe recognizedinconsolidation.ContrarytoIFRS,theprepaidtaxesunderU.S.GAAParecalculatedbasedonthetaxrate applicableintheseller'sratherthanthepurchaser'staxjurisdiction.

Statutory Interim Report 2012

OnJuly18,2012wepublishedourStatutoryInterimReportforthesix-monthperiodendedJuly1st,2012.This reportincludesConsolidatedCondensedInterimFinancialStatementspreparedinaccordancewithIAS34,aninterim managementboardreport,andamanagingdirectors'statement.TheStatutoryInterimReportcomprisesregulated informationwithinthemeaningoftheDutchFinancialMarketsSupervisionAct(Wetophetfinancieeltoezicht).

TheBoardofManagement, Veldhoven,February12,2013

Directors' Responsibility Statement

Managing Directors' Statement (EU Transparency Directive)

TheBoardofManagementherebydeclaresthat,tothebestofitsknowledge,thestatutoryfinancialstatements preparedinaccordancewithIFRSasadoptedbytheEUandTitle9ofPart2oftheNetherlandsCivilCodeprovidea trueandfairviewoftheassets,liabilities,financialpositionandprofitorlossofASMLHoldingN.V.andtheundertakings includedintheconsolidationtakenasawholeandthatthemanagementreportincludesafairreviewconcerningthe positionasperthestatementoffinancialpositiondate,thedevelopmentandperformanceofASMLHoldingN.V.andthe undertakingsincludedintheconsolidationtakenasawhole,togetherwiththeprincipalriskanduncertaintiesthatthey face.

In Control Statement (Dutch Corporate Governance Code)

AstheBoardofManagementofASMLHoldingN.V.,weherebystatethatweareresponsibleforthedesign, implementationandoperationofASML'sinternalriskmanagementandcontrolsystems.Thepurposeofthesesystems istoadequatelyandeffectivelymanagethesignificantriskstowhichASMLisexposed.Suchsystemscanneverprovide absoluteassuranceregardingachievementofcorporateobjectives,norcantheyprovideanabsoluteassurancethat materialerrors,losses,fraudandtheviolationoflawsorregulationswillnotoccur.

Financial reporting risks

Tocomplywithourdutiesintheareaofinternalriskmanagementandcontrolsystemswithrespecttofinancialreporting risks,weusevariousmeasuresincludingbutnotlimitedto:

• monthlyoperationalreviewmeetingsoftheBoardofManagementwithASML'sseniormanagementonfinancial performanceandrealizationofoperationalobjectivesandresponsestoemergingissues;
• semi-annualfinancialplanningmeetingsoftheBoardofManagementwithASML'sseniormanagement;
• monthlymeetingswithASML'sChiefExecutiveOfficer,ChiefFinancialOfficerandseniorfinancemanagement focusingonmonthlyfinancialfigures;
• monthlyandquarterlyfinancialreporting,mainlytoASML'sseniormanagement;
• lettersofrepresentationthataresignedbyASML'skeyseniormanagementmembersonasemi-annualbasisinwhich theyconfirmthatfortheirresponsibleareabasedupontheirknowledge(i)aneffectivesystemofinternalcontrolsand proceduresismaintainedand(ii)thefinancialreportsfairlypresentthefinancialposition,resultsofoperationsand cashflows;
• assessmentsbyASML'sDisclosureCommitteewithrespecttothetimelyreview,disclosure,andevaluationof periodic(financial)reports;
• assessmentsbyASML'sDisclosureCommitteewithrespecttointernalcontrolsinlightofamongothersthe requirementsundertheSarbanes-OxleyActof2002andtheDutchCorporateGovernanceCode;
• discussionsonmanagementlettersandauditreportsprovidedbyASML'sinternalandexternalauditorswithinour BoardofManagementandSupervisoryBoard;
• ASML'sBusinessPrinciples;
• ASML'sInternalGuidelinesonEthicalBusinessConduct,includingtheComplaintsProcedureandrelated whistleblowermechanism;and
• ASML'sAnti-FraudPolicy,whichfacilitatesthedevelopmentofcontrolswhichwillaidinprevention,deterrenceand detectionoffraudagainstASML.

Weacknowledgetheimportanceofinternalcontrolandriskmanagementsystems.Therefore,in2004,ASMLexecuted theSOXProjecttoestablishaframeworktoproperlymanageinternalcontrolsoverfinancialreporting,whichisrequired persection404oftheSarbanes-OxleyActof2002("SOX404").TheresultsofASML'sassessmentoftheeffectiveness ofthisframework,whichisbasedontheCommitteeofSponsoringOrganizationsoftheTreadwayCommission("COSO") model,aswellassignificantchangesandimprovements,areregularlyreportedtoanddiscussedwithASML'sAudit Committeeandexternalauditors.TheAuditCommitteereportsaboutthesesubjectstotheSupervisoryBoardona regularbasis.Inaddition,onceayear,theBoardofManagementdiscussestheimplementationofthisinternalcontrol framework,aswellassignificantchangesandmajorimprovementsininternalcontrols,withtheAuditCommitteeand thefullSupervisoryBoard.

Summary

Basedontheoutcomeoftheabove-mentionedmeasuresandtothebestofitsknowledgeandbelief,theBoardof Managementstatesthat:

• 1. theabove-mentionedmeasuresprovideareasonablelevelofassurancethatASML'sfinancialstatementsasof andfortheyearendedDecember31,2012fairlypresentinallmaterialrespectsthefinancialcondition,resultsof operationsandcashflowsofASMLandthatASML'sfinancialstatementsasofandfortheyearendedDecember 31,2012donotcontainanymaterialinaccuracy;
• 1. theinternalriskmanagementandcontrolsystemsprovideareasonableassurancethatthefinancialreportingdoes notcontainanyerrorsofmaterialimportanceandhaveworkedadequatelyin2012;and
• 1. therearenoindicationsthatASML'sinternalcontrolsoverfinancialreportingwillnotoperateeffectivelyin2013.

ASML'sBoardofManagementiscurrentlynotawareofanysignificantchangeinASML'sinternalcontroloverfinancial reportingthatoccurredduring2012thathasmateriallyaffected,orisreasonablylikelytomateriallyaffect,ASML's effectivenessofinternalcontroloverfinancialreporting.

Operational/strategic risks and legal and regulatory risks

Tocomplywithourdutiesintheareaofinternalriskmanagementandcontrolsystemswithrespecttooperational/ strategicrisksandlegalandregulatoryrisks,weusevariousmeasuresamongwhich:

• strategicevaluationsofASML'sbusinessbytheBoardofManagementinconsultationwiththeSupervisoryBoard;
• semi-annualseniormanagementmeetings,whichareconductedtoassessASML'scorporateinitiativeswhichare launchedinordertoexecuteASML'sstrategy;
• monthlyoperationalreviewmeetingsoftheBoardofManagementwithASML'sseniormanagementonfinancial performanceandrealizationofoperationalobjectivesandresponsestoemergingissues;
• bi-annualfinancialplanningmeetingsoftheBoardofManagementwithASML'sseniormanagement;
• monthly(internal)andquarterly(public)financialreporting;
• lettersofrepresentationthataresignedbyASML'skeyseniormanagementmembersonasemi-annualbasisin whichtheyconfirmtheirresponsibilityforassessingbusinessrisksandensuringappropriateriskmitigationfortheir responsibleareabasedupontheirknowledge;
• annualriskreview,includingaspecificriskdiscussion,bytheBoardofManagementwithASML'sseniormanagement toreviewkeystrategicrisksanddefineappropriatemitigatingactions.Outcomesofthereviewandprogressupdates arereportedtotheAuditCommitteeannually;
• ASML'sBusinessPrinciples;
• ASML'sInternalGuidelinesonEthicalBusinessConduct,includingtheComplaintsProcedureandrelated whistleblowermechanism;and
• ASML'sAnti-FraudPolicy,whichfacilitatesthedevelopmentofcontrolswhichwillaidinprevention,deterrenceand detectionoffraudagainstASML.

TheestablishmentofASML'sinternalcontrolandriskmanagementsystemsisbasedontheidentificationofexternal andinternalriskfactorsthatcouldinfluencetheoperationalandfinancialobjectivesofASMLandcontainsasystem ofmonitoring,reportingandoperationalreviews.Allmaterialriskmanagementactivitieshavebeendiscussedwith theAuditCommitteeandtheSupervisoryBoard.Formoreinformationonourriskmanagementactivitiesandour internalcontrolandriskmanagementsystems,werefertoInternalRiskManagementandControlSystems,External FactorsincludedinASML'sCorporateGovernanceParagraph.ForasummaryofASML'sRiskFactors,werefertoour ManagementBoardReportinthisStatutoryAnnualReport.

TheBoardofManagement,

EricMeurice,President,ChiefExecutiveOfficer PeterT.F.M.Wennink,ExecutiveVicePresident,ChiefFinancialOfficer MartinA.vandenBrink,ExecutiveVicePresident,ChiefProductandTechnologyOfficer FritsJ.vanHout,ExecutiveVicePresident,ChiefMarketingOfficer FrédéricJ.M.Schneider-Maunoury,ExecutiveVicePresident,ChiefOperationsOfficer

Veldhoven,February12,2013

Statutory Financial Statements

Consolidated Financial Statements

• ConsolidatedIncomeStatement
• ConsolidatedStatementofComprehensiveIncome
• ConsolidatedStatementofFinancialPosition
• ConsolidatedStatementofChangesinEquity
• ConsolidatedStatementofCashFlows
• NotestotheConsolidatedFinancialStatements

	Year ended December 31	2012	2011
Notes	(in thousands, except per share data)	EUR	EUR
28	Netsystemsales	3,801,632	4,883,913
	Netserviceandfieldoptionsales	929,923	767,122
28	Total net sales	4,731,555	5,651,035
	Costofsystemsales	2,308,315	2,891,579
	Costofserviceandfieldoptionsales	527,377	407,714
29	Total cost of sales	2,835,692	3,299,293
	Gross profit on sales	1,895,863	2,351,742
29,31	Researchanddevelopmentcosts	298,052	492,184
29	Selling,generalandadministrativecosts	256,479	216,055
	Operating income	1,341,332	1,643,503
32	Interestincome	16,585	43,668
32	Interestexpense	(20,008)	(26,361)
	Income before income taxes	1,337,909	1,660,810
26	Provisionforincometaxes	(35,562)	(166,739)
	Net income	1,302,347	1,494,071
7	Basicnetincomeperordinaryshare	3.07	3.51
7	Dilutednetincomeperordinaryshare1	3.05	3.48
	Numberofordinarysharesusedincomputingpershareamounts (inthousands):
7	Basic	424,096	425,618
7	Diluted1	426,986	429,053

1 ThecalculationofdilutednetincomeperordinaryshareassumestheexerciseofoptionsissuedunderASMLstockoptionplansandtheissuanceof sharesunderASMLshareplansforperiodsinwhichexercisesorissuanceswouldhaveadilutiveeffect.Thecalculationofdilutednetincomeper ordinarysharedoesnotassumeexerciseofsuchoptionsorissuanceofshareswhensuchexercisesorissuancewouldbeanti-dilutive.

Consolidated Statement of Comprehensive Income

2011	2012	Year ended December 31
EUR	EUR	(in thousands)	Notes
1,494,071	1,302,347	Net income
		Other comprehensive income:
		Foreign currency translation, net of taxes:
(1,829)	-	Gain(loss)onthehedgeofanetinvestment	5,18
(12,142)	5,927	Gain(loss)ontranslationofforeignoperations	5,18
		Financial instruments, net of taxes:
(4,610)	214	Gain(loss)onderivativefinancialinstruments	5,18
51,963	(7,761)	Transferstonetincome	5,18
33,382	(1,620)	Other comprehensive income for the period, net of taxes
1,527,453	1,300,727	Total comprehensive income for the period, net of taxes
1,527,453	1,300,727	AttributabletoEquityholders

Consolidated Statement of Financial Position

(Beforeappropriationofnetincome)

	As of December 31	2012	2011
Notes	(in thousands)	EUR	EUR
	Assets
8	Property,plantandequipment	1,029,923	1,053,610
9	Goodwill	158,067	155,124
10	Otherintangibleassets	460,928	267,988
26	Deferredtaxassets	188,638	212,255
11	Financereceivables	38,621	-
13	Derivativefinancialinstruments	101,651	92,534
14	Otherassets	206,900	211,058
	Total non-current assets	2,184,728	1,992,569
15	Inventories	1,856,970	1,632,678
26	Currenttaxassets	57,116	32,105
13	Derivativefinancialinstruments	50,097	33,817
11	Financereceivables	265,167	78,853
16	Accountsreceivable	605,288	880,627
14	Otherassets	166,088	176,732
17	Short-terminvestments	930,005	-
17	Cashandcashequivalents	1,767,596	2,731,782
	Total current assets	5,698,327	5,566,594
	Total assets	7,883,055	7,559,163
	Equity and liabilities
18,35	Equity	4,498,202	3,719,805
19	Long-termdebt	752,892	730,122
13	Derivativefinancialinstruments	4,032	3,210
26	Deferredandothertaxliabilities	132,834	203,298
21	Provisions	7,974	10,012
22	Accruedandotherliabilities	401,109	659,889
	Total non-current liabilities	1,298,841	1,606,531
21 13	Provisions Derivativefinancialinstruments	2,280 6,861	2,326 37,149
19	Currentportionoflong-termdebt	3,610	2,587
26	Currentandothertaxliabilities	10,791	14,999
22	Accruedandotherliabilities	1,873,509	1,731,497
	Accountspayable Total current liabilities	188,961 2,086,012	444,269 2,232,827
	Total equity and liabilities	7,883,055	7,559,163

Consolidated Statement of Changes in Equity

		Issued and
		Outstanding Shares
					Treasury
				Share	Shares at	Retained	Other	Net
		Number1	Amount	Premium	Cost	Earnings	Reserves2	Income	Total
Notes	(in thousands)		EUR	EUR	EUR	EUR	EUR	EUR	EUR
	Balance at January 1, 2011	436,593	40,713	922,341		(153,092) 1,096,669	130,378	985,453	3,022,462
	Appropriation of net income	-	-	-	-	985,453	-	(985,453)	-
	Components of statement of comprehensive income
	Netincome	-	-	-	-	-		- 1,494,071	1,494,071
5,18	Foreigncurrencytranslation,netof	-	-	-	-	-	(13,971)	-	(13,971)
	taxes
5,18	Gainonfinancialinstruments,netof	-	-	-	-	-	47,353	-	47,353
	taxes
	Total comprehensive income	-	-	-	-	-		33,382 1,494,071	1,527,453
18	Purchases of treasury shares	(25,675)	-		(700,452)		-	-	(700,452)
18	Cancellation of treasury shares	-	(1,897)	710	373,801	(372,614)	-	-	-
23,29,30	Share-based payments	-	-	7,819	-	-	-	-	7,819
23,30	Issuance of shares	2,751	-	(10,392)	61,906	(16,346)	-	-	35,168
18	Dividend paid	-	-	-	-	(172,645)	-	-	(172,645)
18	Development expenditures	-	-	-	-	4,721	(4,721)	-	-
	Balance at December 31, 2011	413,669	38,816	920,478		(417,837) 1,525,238		159,039 1,494,071	3,719,805
	Appropriation of net income	-	-	-		- 1,494,071		- (1,494,071)	-
	Components of statement of
	comprehensive income
	Netincome	-	-	-	-	-		- 1,302,347	1,302,347
5,18	Foreigncurrencytranslation	-	-	-	-	-	5,927	-	5,927
5,18	Lossonfinancialinstruments,netof	-	-	-	-	-	(7,547)	-	(7,547)
	taxes
	Total comprehensive income	-	-	-	-	-		(1,620) 1,302,347	1,300,727
	Customer Co-Investment Program:
18,35	Issuanceofshares	96,566		8,691 3,968,677	-	-	-	-	3,977,368
18,35	Fairvaluedifferences3	-	-	(123,416)	-	-	-	-	(123,416)
18,35	Capitalrepayment4	(93,411)		(8,691) (3,845,261)	125,628	-	-	-	(3,728,324)
18	Purchases of treasury shares	(13,478)	-	-	(535,373)	-	-	-	(535,373)
18	Cancellation of treasury shares	-	(1,030)	-	294,752	(293,722)	-	-	-
23,29,30	Share-based payments	-	-	20,596	-	-	-	-	20,596
23,30	Issuance of shares	3,819	-	(8,106)	66,982	(3,165)	-	-	55,711
18	Dividend paid	-	-	-	-	(188,892)	-	-	(188,892)
18	Development expenditures	-	-	-	-	(192,482)	192,482	-	-
	Balance at December 31, 2012	407,165	37,786	932,968		(465,848) 2,341,048		349,901 1,302,347	4,498,202

1 AsofDecember31,2012,thenumberofissuedshareswas419,852,467.Thisincludesthenumberofissuedandoutstandingsharesof407,165,221 andthenumberoftreasurysharesof12,687,246.AsofDecember31,2011,thenumberofissuedshareswas431,294,790.Thisincludesthenumber ofissuedandoutstandingsharesof413,669,257andthenumberoftreasurysharesof17,625,533.

2 Otherreservesconsistofthehedgingreserve,thecurrencytranslationreserveandthereserveforcapitalizeddevelopmentexpenditures.SeeNote18. 3 ThedifferencebetweenthefairvalueofthesharesandthesubscriptionpriceofthesharesissuedtotheparticipatingcustomersintheCustomerCo-InvestmentProgram.

4 In2012,aspartofthecapitalrepayment,EUR3,728.3millionofequitywasreturnedtoourshareholders(excludingIntelCorporation("Intel"),Taiwan SemiconductorManufacturingCompanyLtd.("TSMC")andSamsungElectronicsCorporation("Samsung")(collectivelyreferredtoas"participating customers"intheCustomerCo-investmentProgram))andthenumberofshareswasreducedby23percent.SeeNote18.

Notes	Year ended December 31 (in thousands)	2012 EUR	2011 EUR
	Cash Flows from Operating Activities Netincome	1,302,347	1,494,071
	Adjustmentstoreconcilenetincometo
	netcashflowsfromoperatingactivities:
8,10	Depreciationandamortization	285,886	266,124
8,10	Impairment	3,234	12,272
8	Lossondisposalofproperty,plantandequipment1	2,272	3,368
23,30	Share-basedpayments	18,714	12,430
16	Allowancefordoubtfulreceivables	458	849
15	Allowanceforobsoleteinventory	118,678	46,055
26	Deferredincometaxes	(41,695)	50,574
	Changesinassetsandliabilities:
16	Accountsreceivable	246,982	267,209
11	Financereceivables	(225,103)	(37,301)
15	Inventories1	(334,280)	(264,537)
14	Otherassets	(8,627)	(99,710)
21,22	Accruedandotherliabilities	(109,785)	625,136
	Accountspayable	(225,083)	(126,234)
26	Incometaxespayable	81,177	109,114
	Cash generated from operations	1,115,175	2,359,420
	Interestreceived	31,453	47,326
	Interestpaid	(37,906)	(35,919)
	Incometaxespaid Net cash provided by operating activities	(109,504) 999,218	(202,312) 2,168,515
	Cash Flows from Investing Activities
8	Purchaseofproperty,plantandequipment1	(171,878)	(300,898)
10	Purchaseofintangibleassets	(301,282)	(98,086)
4,17	Purchaseofavailableforsalesecurities	(1,379,997)	-
4,17	Maturityofavailableforsalesecurities	449,992	-
	Acquisitionofsubsidiaries(netofcashacquired) Net cash used in investing activities	(10,292) (1,413,457)	- (398,984)
	Cash Flows from Financing Activities
18	Dividendpaid	(188,892)	(172,645)
18	Purchaseofshares	(535,373)	(700,452)
23,30	Netproceedsfromissuanceofshares	3,907,666 2	34,084
18	CapitalRepayment	(3,728,324) 3	-
	Depositsfromcustomers	-	(150,000)
19	Repaymentofdebt	(2,776)	(2,537)
	Net cash used in financing activities	(547,699)	(991,550)
	Netcashflows	(961,938)	777,981
	Effectofchangesinexchangeratesoncash	(2,248)	3,967
	Net increase (decrease) in cash and cash equivalents	(964,186)	781,948
17	Cashandcashequivalentsatbeginningoftheyear	2,731,782	1,949,834
17	Cash and cash equivalents at end of the year	1,767,596	2,731,782

1 AnamountofEUR204.8million(2011:EUR300.5million)oftheadditionsinproperty,plantandequipmentrelatestonon-cashtransfersfrom inventory,anamountofEUR9.6millionrelatestoothernon-cashmovements(mainlyinvestmentsnotyetpaidandinceptionsoffinancelease arrangements)andanamountofEUR222.9million(2011:EUR145.3million)ofthedisposalofproperty,plantandequipmentrelatestonon-cash transferstoinventory.Sincethetransfersbetweeninventoryandproperty,plantandequipmentarenon-cashevents,thesearenotreflectedinthis consolidatedstatementofcashflows.ForfurtherdetailsseeNote8.

2 ThenetproceedsfromissuanceofsharesincludeanamountofEUR3,853.9millionrelatedtotheshareissuancesinconnectiontotheCustomerCo-InvestmentProgram.

3 ThedifferenceofEUR125.6millionbetweenthecapitalrepaymentofEUR3,728.3millionandthenetproceedsfromissuanceofsharesofEUR 3,853.9millionrelatestothecapitalrepaymentonASML'streasuryshareswhichwasalsopartoftheSyntheticShareBuybackinNovember2012.

Notes to the Consolidated Financial Statements

1. General information

ASMLHoldingN.V.("ASML"),withitscorporateheadquartersinVeldhoven,theNetherlands,isengagedinthe development,production,marketing,saleandservicingofadvancedsemiconductorequipmentsystemsexclusively consistingoflithographysystems.ASML'sprincipaloperationsareintheNetherlands,theUnitedStatesofAmericaand Asia.

OursharesarelistedfortradingintheformofregisteredsharesonNASDAQandonNYSEEuronextAmsterdam.The principaltradingmarketofourordinarysharesisNYSEEuronextAmsterdam.

TheconsolidatedfinancialstatementsincludethefinancialstatementsofASMLHoldingN.V.andallofitssubsidiaries andthespecialpurposeentitiesoverwhichwehavecontrol(referredtoas"ASML").

OurfinancialstatementswereauthorizedforissuebytheBoardofManagementonFebruary12,2013andwillbefiledat theTradeRegisteroftheChamberofCommerceinEindhoven,theNetherlandswithineightdaysafteradoptionbythe GeneralMeetingofShareholders,scheduledonApril24,2013.

2. Adoption of new and revised International Financial Reporting Standards

TheconsolidatedfinancialstatementshavebeenpreparedonthebasisofInternationalFinancialReportingStandards ("IFRS")asadoptedbytheEuropeanUnion("EU").NewStandardsandInterpretations,whichbecameeffectivein2012, didnothaveamaterialimpactonourconsolidatedfinancialstatements.

Standards and Interpretations effective in 2012

NonewstandardsandinterpretationsbecameeffectiveasofJanuary1,2012whichimpacttheamountsreportedin theseconsolidatedfinancialstatements.

At the date of authorization of these consolidated financial statements, the following Standards and Interpretations have been issued however are not yet effective and/or have not yet been adopted by the EU.

IFRS9"FinancialInstruments"(effectiveforannualperiodsbeginningonorafterJanuary1,2015),wasissuedin November2009andsubsequentlyamendedinOctober2010.TheStandardissubjecttoendorsementbytheEuropean Union.IFRS9addressestheclassificationandmeasurementoffinancialassetsandfinancialliabilities.IFRS9enhances theabilityofinvestorsandotherusersoffinancialinformationtounderstandtheaccountingoffinancialassetsand reducescomplexity.Furthermore,IFRS9addressestheaccountingforchangesinthefairvalueoffinancialliabilities (designatedatfairvaluethroughprofitorloss)attributabletochangesinthecreditriskofthatliability.Wearecurrently intheprocessofdeterminingtheimpactofadoptingthisStandardonourconsolidatedfinancialstatements.

IFRS10"ConsolidatedFinancialStatements"(effectiveforannualperiodsbeginningonorafterJanuary1,2013¹ ).IFRS 10replacesthepartsofIAS27"ConsolidatedandSeparateFinancialStatements"thatdealwithconsolidatedfinancial statements.UnderIFRS10thereisonlyonebasisofconsolidation,beingcontrol.Inaddition,IFRS10includesanew definitionofcontrolthatcontainsthreeelements:a)poweroveraninvestee,b)exposure,orrightstovariablereturns fromitsinvolvementwiththeinvestee,andc)theabilitytousepowerovertheinvesteetoaffecttheamountofthe investor'sreturns.Weanticipatethatadoptionwillnothaveamaterialimpactonourconsolidatedfinancialstatements.

IFRS11"JointArrangements"(effectiveforannualperiodsbeginningonorafterJanuary1,2013).IFRS11replaces IAS31"InterestsinJointVentures"anddealswithhowajointarrangementofwhichtwoormorepartieshavejoint controlshouldbeclassified.UnderIFRS11,jointventuresarerequiredtobeaccountedforusingtheequitymethod ofaccounting,whereasunderIAS31,jointlycontrolledentitiescanbeaccountedforusingtheequitymethodof accountingorproportionateaccounting.Adoptionwillnothaveamaterialimpactonourconsolidatedfinancial statements.

IFRS12"DisclosureofInterestinOtherEntities"(effectiveforannualperiodsbeginningonorafterJanuary1,2013). IFRS12isadisclosurestandardandisapplicabletoentitiesthathaveinterestsinsubsidiaries,jointarrangements, associatesand/orunconsolidatedstructuredentities.Weanticipatethatadoptionwillnothaveamaterialimpactonour consolidatedfinancialstatements.

IFRS13"FairValueMeasurement"(effectiveforannualperiodsbeginningonorafterJanuary1,2013).IFRS13defines fairvalue,establishesaframeworkformeasuringfairvalueandrequiresdisclosuresaboutfairvaluemeasurements.The 1)FollowingfromtheEUendorsementprocess,IFRS10,IFRS11,IFRS12,theamendedIAS27,theamendedIAS28,andtheconsequential amendments,needtobeapplied,atthelatest,asfromthecommencementdateofourfirstfinancialyearstartingonorafterJanuary1,2014.

Standardappliestobothfinancialinstrumentitemsandnon-financialinstrumentitems.Wearecurrentlyintheprocess ofdeterminingtheimpactofadoptingthisStandardonourconsolidatedfinancialstatements.

IFRS7Amendments"Disclosures-OffsettingFinancialAssetsandFinancialLiabilities"(effectiveforannualperiods beginningonorafterJanuary1,2013).TheamendmentstoIFRS7requirestodiscloseinformationaboutrightsofoffset andrelatedarrangements(suchascollateralpostingrequirements)forfinancialinstrumentsunderanenforceablemaster nettingagreementorsimilararrangement.Wearecurrentlyintheprocessofdeterminingtheimpactofadoptingthis amendmentonourconsolidatedfinancialstatements.Wedonotanticipatematerialimpactonourconsolidatedfinancial statementsuponadoption.

IAS1Amendments"Presentationofitemsofothercomprehensiveincome"(effectiveforannualperiodsbeginningonor afterJuly1,2012).Theamendmentsintroducenewterminologyforthestatementofcomprehensiveincomeandincome statement.UndertheamendmentstoIAS1,the'statementofcomprehensiveincome'isrenamedthe'statementof profitorlossandothercomprehensiveincome'andthe'incomestatement'isrenamedthe'statementofprofitorloss'. TheamendmentstoIAS1retaintheoptiontopresentprofitorlossandothercomprehensiveincomeineitherasingle statementorintwoseparatebutconsecutivestatements.However,theamendmentstoIAS1requireitemsofother comprehensiveincometobegroupedintotwocategoriesintheothercomprehensiveincomesection:(a)itemsthatwill notbereclassifiedsubsequentlytoprofitorlossand(b)itemsthatmaybereclassifiedsubsequentlytoprofitorloss whenspecificconditionsaremet.Otherthanabovementionedpresentationchangestheapplicationofamendmentsto IAS1doesnotresultinanyimpactonprofitorloss,othercomprehensiveincomeandtotalcomprehensiveincome.

IAS19(asrevisedin2011)"EmployeeBenefits"(effectiveforannualperiodsbeginningonorafterJanuary1,2013). TheamendmentstoIAS19changetheaccountingfordefinedbenefitplansandterminationbenefits.Further,the amendmentsenhancethedisclosurerequirementsforanemployer'sparticipationinamulti-employerplan.Adoptionwill nothavematerialimpactonourconsolidatedfinancialstatements.

IAS27(asrevisedin2011)"SeparateFinancialStatements"(effectiveforannualperiodsbeginningonorafterJanuary 1,2013).ThisRevisedStandardonlyappliestoseparatefinancialstatements.IFRS10replacesthepartsofIAS27 "ConsolidatedandSeparateFinancialStatements"thatdealtwithconsolidatedfinancialstatements.Wearecurrentlyin theprocessofdeterminingtheimpactofadoptingthisRevisedStandardonourconsolidatedfinancialstatements.

IAS28(asrevisedin2011)"InvestmentsinAssociatedandJointVentures(effectiveforannualperiodsbeginningon orafterJanuary1,2013).ThisRevisedStandardsupersedesIAS28"InvestmentsinAssociates"andprescribesthe accountingforinvestmentsinassociatesandsetsouttherequirementsfortheapplicationoftheequitymethodwhen accountingforinvestmentsinassociatesandjointventures.TheRevisedStandarddefines'significantinfluence'and providesguidanceonhowtheequitymethodofaccountingistobeapplied(includingexemptionsfromapplyingthe equitymethodinsomecases).Italsoprescribeshowinvestmentsinassociatesandjointventuresshouldbetested forimpairment.ASMLiscurrentlyintheprocessofdeterminingtheimpactofadoptingthisRevisedStandardonour consolidatedfinancialstatements.

IAS32Amendments"OffsettingFinancialAssetsandFinancialLiabilities"(effectiveforannualperiodsbeginningonor afterJanuary1,2014).TheamendmentstoIAS32clarifyexistingapplicationissuesrelatingtotheoffsetoffinancial assetsandfinancialliabilitiesrequirements.Specificallytheamendmentsclarifythemeaningof'currencyhasalegally enforceablerightofset-off'and'simultaneousrealizationandsettlement'.Wedonotanticipatematerialimpactonour consolidatedfinancialstatementsuponadoption..

IFRIC20"StrippingCostsintheProductionPhaseofaSurfaceMine"(effectiveforannualperiodsbeginningonorafter January1,2012).ThisInterpretationappliestowasteremovalcoststhatareincurredinsurfaceminingactivitiesduring theproductionphaseofthemin(productionstrippingcosts).Adoptionwillnothavematerialimpactonourconsolidated financialstatementsaswedonotengageinsuchactivities.

AnnualImprovementstoIFRSs2009-2011CycleissuedinMay2012(effectiveforannualperiodsbeginningonorafter January1,2013).TheAnnualImprovementsaresubjecttoendorsementbytheEuropeanUnion.AmendmentstoIFRSs amongstothersincludeamendmentstothefollowingstandards:

• IAS1"PresentationofFinancialStatements"
• IAS16"Property,PlantandEquipment"
• IAS32"FinancialInstruments:Presentation"

IAS1Amendments"Clarificationoftherequirementsforcomparativeinformation"clarifiesthatanentityisrequiredto presentathirdstatementoffinancialpositiononlywhenretrospectiveapplication,restatementorreclassificationhasa materialeffectontheinformationinthethirdstatementoffinancialpositionandthatrelatednotesarenotrequiredto accompanythethirdstatementoffinancialposition.Wedonotanticipatematerialimpactonourconsolidatedfinancial statementsuponadoption.

IAS16Amendments"Classificationofservicingequipment"clarifiesthatspareparts,stand-byequipmentandservicing equipmentshouldbeclassifiedasproperty,plantandequipmentwhentheymeetthedefinitionofproperty,plantand equipmentinIAS16andasinventoryotherwise.Wedonotanticipatematerialimpactonourconsolidatedfinancial statementsuponadoption.

IAS32Amendments"Taxeffectofdistributionstoholdersofequityinstruments"clarifiesthatincometaxrelatingto distributionstoholdersofanequityinstrumentandtotransactioncostsofanequitytransactionshouldbeaccounted forinaccordancewithIAS12"IncomeTaxes".Wearecurrentlyintheprocessofdeterminingtheimpactofadoptingthis amendmentonourconsolidatedfinancialstatements.

AmendmentstoIFRS10,IFRS11andIFRS12"ConsolidatedFinancialStatements,JointArrangementsandDisclosure ofInterestsinOtherEntities:TransitionGuidance"issuedinJune,2012(effectiveforannualperiodsbeginningon orafterJanuary1,2013)includescertainclarificationstothevariousstandardspreviouslyissued.Thetransaction guidanceissubjecttoendorsementbytheEuropeanUnion.Wearecurrentlyintheprocessofdeterminingtheimpactof adoptingthistransitionguidanceonourconsolidatedfinancialstatements.

AmendmenttoIFRS10,IFRS12,andIAS27"InvestmentEntities"issuedinOctober,2012(effectiveforannualperiods beginningonorafterJanuary1,2013)appliestoparticularclassesofbusinessthatqualifyasinvestmententities.The IASBusestheterm'investmententity'torefertoanentitywhosebusinesspurposeistoinvestfundssolelyforreturns fromcapitalappreciation,investmentincomeorboth.TheamendmentsaresubjecttoendorsementbytheEuropean Union.Weanticipatethatthisamendmentwillhavenoeffectonourconsolidatedfinancialstatementsaswedonot qualifyasaninvestmententity.

3. Summary of Significant Accounting Policies

Basis of preparation

Theaccompanyingconsolidatedfinancialstatementsarestatedinthousandsofeuros("EUR")unlessotherwise indicated.Theseconsolidatedfinancialstatements,preparedforstatutorypurposes,havebeenpreparedinaccordance withIFRSasadoptedbytheEU-accountingprinciplesgenerallyacceptedintheNetherlandsforcompaniesquoted onNYSEEuronextAmsterdam.Forinternalandexternalreportingpurposes,weapplyaccountingprinciplesgenerally acceptedintheUnitedStatesofAmerica("U.S.GAAP").U.S.GAAPisourprimaryaccountingstandardforthesettingof financialandoperationalperformancetargets.

Thefinancialstatementshavebeenpreparedonhistoricalcostconventionunlessstatedotherwise.Theprincipal accountingpoliciesadoptedaresetoutbelow.

Use of estimates

ThepreparationofourconsolidatedfinancialstatementsinconformitywithIFRSasadoptedbytheEUrequires managementtomakeestimatesandassumptionsthataffectthereportedamountsofassetsandliabilitiesandthe disclosureofcontingentassetsandliabilitiesonthedatesofthestatementoffinancialpositionandthereported amountsofrevenueandexpenseduringthereportedperiods.Actualresultscoulddifferfromthoseestimates.

Basis of consolidation

TheconsolidatedfinancialstatementsincludethefinancialstatementsofASMLHoldingN.V.anditssubsidiariesand thespecialpurposeentitiesoverwhichASMLhascontrol(togetherreferredtoas"ASML").Allintercompanyprofits, balancesandtransactionshavebeeneliminatedintheconsolidation.

Subsidiaries

SubsidiariesareallentitiesoverwhichASMLhasthepowertogovernfinancialandoperatingpoliciesgenerally accompanyingashareholdingofmorethanone-halfofthevotingrights.Asfromthedatethatthesecriteriaaremet,the financialdataoftherelevantcompanyareincludedintheconsolidation.

Acquisitionsofsubsidiariesareincludedonthebasisoftheacquisitionmethod.Thecostofacquisitionismeasured basedontheconsiderationtransferred,thefairvalueofotherassetsdistributedandthefairvalueofliabilitiesincurred orassumedattheacquisitiondate(i.e.,thedateatwhichweobtaincontrol).Theexcessofthecostsofanacquired subsidiaryoverthenetoftheamountsassignedtoassetsacquiredandliabilitiesincurredorassumed,iscapitalizedas goodwill.Acquisition-relatedcostsareexpensedwhenincurredintheperiodtheyariseortheserviceisreceived.

Specialpurposeentities

WhenwehaveaninterestinaSpecialPurposeEntity("SPE"),weshallassesswhetherwehavecontrolovertheSPE and,thus,shouldconsolidatetheSPE.

Foreign currency translation

Theindividualfinancialstatementsofeachgroupentityarepresentedinthecurrencyoftheprimaryeconomic environmentinwhichtheentityoperates(itsfunctionalcurrency).Forthepurposeoftheconsolidatedfinancial statements,theresultsandfinancialpositionofeachentityareexpressedineuros,whichisourfunctionalcurrency,and thepresentationcurrencyfortheconsolidatedfinancialstatements.

Inpreparingthefinancialstatementsoftheindividualentities,transactionsincurrenciesotherthantheentity's functionalcurrency(foreigncurrencies)arerecordedattheratesofexchangeprevailingonthedatesofthetransactions. Ateachstatementoffinancialpositiondate,monetaryitemsdenominatedinforeigncurrenciesareretranslated attheratesprevailingonthestatementoffinancialpositiondate.Non-monetaryitemscarriedatfairvaluethat aredenominatedinforeigncurrenciesareretranslatedattheratesprevailingonthedatewhenthefairvaluewas determined.Non-monetaryitemsthataremeasuredintermsofhistoricalcostinaforeigncurrencyarenotretranslated.

Exchangeratedifferencesarisingonthesettlementofmonetaryitems,andontheretranslationofmonetaryitems, arerecognizedintheincomestatementintheperiodinwhichtheyarise.Exchangeratedifferencesarisingonthe retranslationofnon-monetaryitemscarriedatfairvaluearerecognizedintheincomestatementfortheperiodexcept fordifferencesarisingontheretranslationofnon-monetaryitemsinrespectofwhichgainsandlossesarerecognized directlyinequity.Forsuchnon-monetaryitems,anyexchangeratecomponentofthatgainorlossisalsorecognized directlyinequity.

Inordertohedgeitsexposuretocertainforeignexchangeraterisks,ASMLentersintoforwardcontractsandcurrency options;seebelowfordetailsofouraccountingpoliciesinrespectofsuchderivativefinancialinstruments.

Forthepurposeofpresentingconsolidatedfinancialstatements,theassetsandliabilitiesofourforeignsubsidiaries (includingcomparatives)areexpressedineurosusingexchangeratesprevailingonthestatementoffinancialposition date.Incomeandexpenseitems(includingcomparatives)aretranslatedattheaverageexchangeratesfortheperiod, unlessexchangeratesfluctuatedsignificantlyduringthatperiod,inwhichcasetheexchangeratesatthedatesofthe transactionsareused.Exchangeratedifferencesarising,ifany,areclassifiedasequityandtransferredtoourcurrency translationreserve.Suchtranslationdifferencesarerecognizedintheincomestatementintheperiodinwhichthe foreignoperationisdisposedof.Goodwillandfairvalueadjustmentsarisingontheacquisitionofaforeignsubsidiary aretreatedasassetsandliabilitiesofforeignsubsidiariesandtranslatedatclosingrate.

Property, plant and equipment

Property,plantandequipmentarestatedatcost,lessaccumulateddepreciationandanyaccumulatedimpairment losses.CostsofassetsmanufacturedbyASMLincludedirectmanufacturingcosts,productionoverheadandinterest costsincurredforqualifyingassetsduringtheconstructionperiod.Depreciationiscalculatedusingthestraight-line methodbasedontheestimatedusefullivesoftherelatedassets.Inthecaseofleaseholdimprovements,theestimated usefullivesoftherelatedassetsdonotexceedtheremainingtermofthecorrespondinglease.Thefollowingtable presentstheestimatedusefullivesofASML'sproperty,plantandequipment:

Category	Estimated useful life
Buildingsandconstructions	5-40years
Machineryandequipment	2-5years
Leaseholdimprovements	5-10years
Furniture,fixturesandotherequipment	3-5years

Landisnotdepreciated.

Certaininternalandexternalcostsassociatedwiththepurchaseand/ordevelopmentofinternallyusedsoftwareare capitalizedwhenboththepreliminaryprojectstageiscompletedandmanagementhasauthorizedfurtherfundingfor theproject,whichithasdeemedprobabletobecompletedandtobeusablefortheintendedfunction.Thesecostsare amortizedonastraight-linebasisovertheperiodofrelatedbenefit,whichrangesprimarilyfromthreetofiveyears.

Theestimatedusefullivesanddepreciationmethodarereviewedateachyear-end,withtheeffectofanychangesin estimateaccountedforonaprospectivebasis.

Thegainorlossarisingonthedisposalorretirementofanitemofproperty,plantandequipmentisdeterminedasthe differencebetweenthesalesproceedsandthecarryingamountoftheassetandisrecognizedintheincomestatement.

Intangible assets

Goodwill

Goodwillrepresentstheexcessofthecostsofanacquisitionoverthefairvalueofourshareofthenetidentifiable assets,liabilitiesincurredorassumedoftheacquiredsubsidiaryatthedateofacquisition.Goodwillisinitially recognizedasanassetatcostandissubsequentlymeasuredatcostlessanyaccumulatedimpairmentlosses.

Forthepurposeofimpairmenttesting,goodwillisallocatedtoeachofourcash-generatingunits("CGU's")expected tobenefitfromthesynergiesofthecombination.CGU'stowhichgoodwillhasbeenallocatedaretestedforimpairment annuallyonSeptember30,ormorefrequentlywhenthereisanindicationthattheunitmaybeimpaired.Ifthe recoverableamountoftheCGUislessthanthecarryingamountoftheunit,theimpairmentlossisallocatedfirstto reducethecarryingamountofanygoodwillallocatedtotheunitandthentotheotherassetsoftheunitpro-rataonthe basisofthecarryingamountofeachassetintheunit.Animpairmentlossrecognizedforgoodwillisnotreversedina subsequentperiod.

Ondisposalofasubsidiary,theattributableamountofgoodwillisincludedinthedeterminationoftheprofitorlosson disposal.

Otherintangibleassets

Otherintangibleassetsincludeinternally-generatedintangibleassets,acquiredintellectualpropertyrights,developed technology,customerrelationships,in-processResearchandDevelopment("R&D")andotherintangibleassets.

Internally-generatedintangibleassets–researchanddevelopmentexpenditures

Expenditureonresearchactivitiesisrecognizedasanexpenseintheperiodinwhichitisincurred.IFRSrequires capitalizationofdevelopmentexpendituresprovidedif,andonlyif,certaincriteriacanbedemonstrated.

Aninternally-generatedintangibleassetarisingfromourdevelopmentisrecognizedonlyifwecandemonstrateallofthe followingconditions:

• •thetechnicalfeasibilityofcompletingtheintangibleassetsothatitwillbeavailableforuseorsale;
• •theintentiontocompletetheintangibleassetanduseorsellit;
• •theabilitytouseorselltheintangibleasset;
• •theprobabilitythattheassetcreatedwillgeneratefutureeconomicbenefits;
• •theavailabilityofadequatetechnical,financialandotherresourcestocompletethedevelopmentandtouseorsellthe intangibleasset;and
• •theabilitytomeasurereliablytheexpenditureattributabletotheintangibleassetduringitsdevelopment.

Forcertaindevelopmentprograms,itwasnotpossibletoseparatedevelopmentactivitiesfromresearchactivities (approximatelyEUR19.6millionandEUR15.9millionfor2012and2011,respectively).Consequently,wearenotableto reliablydeterminetheamountofdevelopmentexpendituresincurredfortheseprograms.

Internally-generatedintangibleassetsareamortizedonastraight-linebasisovertheirestimatedusefullives,ranging fromonetothreeyears.Wherenointernally-generatedintangibleassetcanberecognized,developmentexpenditureis chargedtotheincomestatementintheperiodinwhichitisincurred.

Theestimatedusefullivesanddepreciationmethodarereviewedateachyear-end,withtheeffectofanychangesin estimateaccountedforonaprospectivebasis.

Intellectualpropertyrights,developedtechnology,customerrelationshipsandotherintangibleassets

Acquiredintellectualpropertyrights,developedtechnology,customerrelationsandotherintangibleassetsarestated atcostlessaccumulatedamortizationandanyaccumulatedimpairmentlosses.Amortizationischargedonastraightlinebasisovertheirestimatedusefullives.Theestimatedusefullifeandamortizationmethodarereviewedattheendof eachannualreportingperiod,withtheeffectofanychangesinestimatebeingaccountedforonaprospectivebasis.

In-processresearchanddevelopment

In-processR&Drelatestothefairvalueofthetechnologyregardingproductsthatwereindevelopmentatthetime ofacquisition.In-processR&Dissubsequentlystatedatcostlessaccumulatedamortizationandanyaccumulated impairmentlosses.Amortizationischargedonastraight-linebasisovertheestimatedusefullife.Theestimateduseful livesanddepreciationmethodarereviewedateachyear-end,withtheeffectofanychangesinestimateaccountedfor onaprospectivebasis.

ThefollowingtablepresentstheestimatedusefullivesofASML'sotherintangibleassets:

Category	Estimated useful life
Developmentexpenditures	1-5years
Intellectualproperty	3-10years
Developedtechnology	6years
Customerrelationships	8years
In-processresearchanddevelopment	4years
Other	2-6years

Impairment of tangible and intangible assets excluding goodwill

Ateachstatementoffinancialpositiondate,wereviewthecarryingamountsofourtangibleandintangibleassets (otherthangoodwill)todeterminewhetherthereisanyindicationthatthoseassetshavesufferedanimpairmentloss. Ifanysuchindicationexists,therecoverableamountoftheassetisestimatedinordertodeterminetheextentofthe impairmentloss(ifany).Whereitisnotpossibletoestimatetherecoverableamountofanindividualasset,weestimate therecoverableamountoftheCGUtowhichtheassetbelongs.Whereareasonableandconsistentbasisofallocation canbeidentified,corporateassetsarealsoallocatedtoindividualCGU's,orotherwisetheyareallocatedtothesmallest groupofCGU'sforwhichareasonableandconsistentallocationbasiscanbeidentified.

Intangibleassetswithindefiniteusefullivesandintangibleassetsnotyetavailableforusearetestedforimpairment annually,andwheneverthereisanindicationthattheassetmaybeimpaired.

Recoverableamountisthehigheroffairvaluelesscoststosellandvalueinuse.

Iftherecoverableamountofanasset(orcash-generatingunit)isestimatedtobelessthanitscarryingamount,the carryingamountoftheasset(orcash-generatingunit)isreducedtoitsrecoverableamount.Animpairmentlossis recognizedimmediatelyintheconsolidatedincomestatement,unlesstherelevantassetiscarriedatarevaluedamount, inwhichcasetheimpairmentlossistreatedasarevaluationdecrease.

Whereanimpairmentlosssubsequentlyreverses,thecarryingamountoftheasset(orCGU)isincreasedtotherevised estimateofitsrecoverableamount,butsothattheincreasedcarryingamountdoesnotexceedthecarryingamountthat wouldhavebeendeterminedhadnoimpairmentlossbeenrecognizedfortheasset(orCGU)inprioryears.Areversalof animpairmentlossisrecognizedimmediatelyintheconsolidatedincomestatement,unlesstherelevantassetiscarried atarevaluedamount,inwhichcasethereversaloftheimpairmentlossistreatedasarevaluationincrease.

Financial assets

Financialassetsareclassifiedas"financialassetsatfairvaluethroughprofitorloss","available-for-sale"or"loansand receivables".

Financialassetsatfairvaluethroughprofitorloss

Financialassetsareclassifiedasatfairvaluethroughprofitorlosswherethefinancialassetisdesignatedasatfair valuethroughprofitorloss.Assetsinthiscategoryarecategorizedascurrentassets.

Available-forsalefinancialassets("AFSfinancialassets")

AFSfinancialassetsarenon-derivativesthatareeitherdesignatedasAFSorarenotclassifiedas(a)loansand receivables,(b)held-to-maturityinvestmentsor(c)financialassetsatfairvaluethroughprofitandloss.Ouravailablefor salefinancialassetscompriseshort-terminvestments,whichconsistofDutchTreasuryCertificatesanddepositswith theDutchgovernment.Ourshort-terminvestmentsarestatedatfairvalue.Fairvalueofourshort-terminvestmentsis determinedinthemannerdescribedinNote4.

Loansandreceivables

Loansandreceivablesarenon-derivativefinancialassetswithfixedordeterminablepaymentsthatarenotquoted inanactivemarket.Theyareincludedincurrentreceivables,exceptformaturitiesgreaterthan12monthsafterthe statementoffinancialpositiondate.Theseareclassifiedasnon-currentassets.Ourloansandreceivablescomprise accountsreceivable,financereceivables,cashandcashequivalents(excludingInvestmentsinmoneymarketfunds, whichareclassifiedasfinancialassetsatfairvaluethroughprofitandloss)andothernon-currentandcurrentassetsin thestatementoffinancialposition.

Loansandreceivablesareinitiallymeasuredatfairvalueandsubsequentlyatamortizedcostusingtheeffectiveinterest ratemethod.

Weassessateachstatementoffinancialpositiondatewhetherthereisobjectiveevidencethatafinancialassetora groupoffinancialassetsisimpaired.

Impairment of financial assets

Financialassets,otherthanthoseatfairvaluethroughprofitorloss,areassessedforindicatorsofimpairmentateach statementoffinancialpositiondate.Financialassetsareimpairedwherethereisobjectiveevidencethat,asaresultof oneormoreeventsthatoccurredaftertheinitialrecognitionofthefinancialasset,theestimatedfuturecashflowsofthe investmenthavebeenimpacted.

Financial liabilities and equity instruments issued by ASML

FinancialliabilitiesandequityinstrumentsissuedbyASMLareclassifiedaccordingtothesubstanceofthecontractual arrangementsenteredintoandthedefinitionsofafinancialliabilityandanequityinstrument.

Financialliabilitiesthatareclassifiedasfairvaluethroughprofitorlossarecategorizedascurrentliabilities.Anequity instrumentisanycontractthatevidencesaresidualinterestintheassetsofASMLafterdeductingallofitsliabilities. EquityinstrumentsissuedbyASMLaretypicallyrecordedattheproceedsreceived,netofdirectissuecosts.Forthe accountinginrelationtosharesissuedunderourCustomerCo-InvestmentProgram,werefertonote35.

Financialliabilitiesatfairvaluethroughprofitorlossarestatedatfairvaluewithanyresultantgainorlossrecognizedin theconsolidatedincomestatement.

Derivative financial instruments and hedging activities

Derivativefinancialinstrumentsareinitiallyrecognizedatfairvalueonthedateaderivativecontractisenteredinto andaresubsequentlyremeasuredattheirfairvalue.Themethodofrecognizingtheresultinggainorlossdependson whetherthederivativefinancialinstrumentsdesignatedasahedginginstrument,andifso,thenatureoftheitembeing hedged.Wedesignatecertainderivativefinancialinstrumentsaseither:

• Ahedgeoftheexposuretochangesinthefairvalueofarecognizedassetorliability,orofanunrecognizedfirm commitment,thatareattributabletoaparticularrisk(fairvaluehedge);or
• Ahedgeoftheexposureofvariabilityinthecashflowsofarecognizedassetorliability,ofaforecastedtransaction, thatisattributabletoaparticularrisk(cashflowhedge).
• Ahedgeoftheforeigncurrencyexposureofanetinvestmentinaforeignoperation(netinvestmenthedge).

Wedocumentattheinceptionofthetransactiontherelationshipbetweenhedginginstrumentsandhedgeditems,as wellasourriskmanagementobjectivesandstrategyforundertakingvarioushedgingtransactions.Wealsodocument ourassessment,bothathedgeinceptionandonanongoingbasis,ofwhetherderivativefinancialinstrumentsthatare usedinhedgingtransactionsarehighlyeffectiveinoffsettingchangesinfairvaluesorcashflowsofhedgeditems.

ThefairvaluesofvariousderivativefinancialinstrumentsusedforhedgingpurposesaredisclosedinNote4,Note5, Note12andNote13.MovementsinthehedgingreservewithinequityareshowninNote18.Thefairvaluepartofa derivativefinancialinstrumentthathasaremainingtermoflessorequalto12monthsisclassifiedascurrentassetor liability.Whenthefairvaluepartofaderivativefinancialinstrumenthasatermofmorethan12monthsitisclassifiedas non-current.

Fairvaluehedge

Changesinthefairvalueofaderivativefinancialinstrumentthatisdesignatedandqualifiesasafairvaluehedge,along withthegainorlossonthehedgedassetorliability,thatisattributabletothehedgedrisk,arerecordedintheincome statement.Wedesignateforeigncurrencyhedginginstrumentsasahedgeofthefairvalueofarecognizedassetor liabilityinnon-functionalcurrencies.

Hedgeaccountingisdiscontinuedwhenwerevokethehedgingrelationship,thehedginginstrumentexpiresorissold, terminatedorexercised,ornolongerqualifiesforhedgeaccounting.Theadjustmenttothecarryingamountofthe hedgeditemarisingfromthehedgedriskisamortizedtotheconsolidatedincomestatementfromthatdate.

Interestrateswapsthatarebeingusedtohedgethefairvalueoffixedloancouponspayablearedesignatedasfair valuehedges.Thechangeinfairvalueisintendedtooffsetthechangeinthefairvalueoftheunderlyingfixedloan coupons,whichisrecordedaccordingly.Thegainorlossrelatingtotheineffectiveportionofinterestrateswaps

hedgingfixedloancouponspayableisrecognizedintheconsolidatedincomestatementas"interestincome"or "interestexpense".

Cashflowhedge

Theeffectiveportionofchangesinthefairvalueofaderivativethatisdesignatedandqualifiesasacashflowhedge isrecordedinthehedgingreserve,withinequity,untilunderlyinghedgedtransactionisrecognizedintheconsolidated incomestatement.However,whentheforecastedtransactionthatishedgedresultsintherecognitionofanon-financial assetoranon-financialliability,thegainsandlossespreviouslydeferredinequityaretransferredfromequityand includedintheinitialmeasurementofthecostoftheassetorliability.Hedgeaccountingisdiscontinuedwhenwe revokethehedgingrelationship,thehedginginstrumentexpiresorissold,terminatedorexercised,ornolonger qualifiesforhedgeaccounting.Anycumulativegainorlossdeferredinequityatthattimeremainsinequityandis recognizedwhentheforecastedtransactionisultimatelyrecognizedintheconsolidatedincomestatement.When aforecastedtransactionisnolongerexpectedtooccur,thecumulativegainorlossthatwasdeferredinequityis recognizedimmediatelyintheconsolidatedincomestatement.

Foreigncurrencyhedginginstrumentsthatarebeingusedtohedgecashflowsrelatingtofuturesalesorpurchase transactionsinnon-functionalcurrenciesaredesignatedascashflowhedges.Thegainorlossrelatingtotheineffective portionoftheforeigncurrencyhedginginstrumentsisrecognizedintheconsolidatedincomestatementin"netsales"or "costofsales".

Interestrateswapsthatarebeingusedtohedgechangesinthevariabilityoffutureinterestreceiptsaredesignated ascashflowhedges.Thechangeinfairvalueisintendedtooffsetthechangeinthefairvalueoftheunderlying assets,whichisrecordedaccordinglyinequityashedgingreserve.Themaximumlengthoftimeofcashflowhedges isthetimeelapsedfromthemomenttheexposureisgenerateduntiltheactualsettlement.Thegainorlossrelating totheineffectiveportionofinterestrateswapshedgingthevariabilityoffutureinterestreceiptsisrecognizedinthe consolidatedincomestatementas"interestincome"or"interestexpense".

Netinvestmenthedge

Foreigncurrencyhedginginstrumentsthatarebeingusedtohedgechangesinthevalueofanetinvestmentare designatedasnetinvestmenthedges.Changesinthefairvalueofaderivativethatisdesignatedandqualifiesasa netinvestmenthedgearerecordedinthecurrencytranslationreservewithinequity.Thegainorlossrelatingtothe ineffectiveportionisrecognizedintheconsolidatedincomestatementas"interestincome"or"interestcharges".Gains andlossesaccumulatedinequityarerecognizedintheconsolidatedincomestatementwhentheforeignoperationis (partially)disposedorsold.

Inventories

Inventoriesarestatedatthelowerofcost(first-in-first-outmethod)ornetrealizablevalue.Thecostsofinventories compriseofnetpricespaidformaterialspurchased,chargesforfreightandcustomsduties,productionlaborcostand factoryoverhead.Netrealizablevaluerepresentstheestimatedsellingpricelessallestimatedcostsofcompletionand coststobeincurredinmarketing,sellinganddistribution.

Inventoryprovisionsarerecognizedforslow-moving,obsoleteorunsellableinventory.Impairmentlossesforinventory aredeterminedbasedontheexpecteddemandwhichisderivedfromthesalesforecastsaswellastheexpected marketvalueoftheinventory.Anewassessmentofnetrealizablevalueismadeineachsubsequentperiod.Whenthe circumstancesthatpreviouslycausedinventoriestobewrittendownbelowcostnolongerexistorwhenthereisclear evidenceofanincreaseinnetrealizablevaluebecauseofchangedeconomiccircumstances,theamountofthewritedownisreversed.

Accounts receivable

Accountsreceivablearemeasuredatinitialrecognitionatfairvalueandaresubsequentlymeasuredatamortized costusingtheeffectiveinterestratemethod,lessallowancefordoubtfuldebts.Anallowancefordoubtfuldebtsof accountsreceivableisestablishedwhenthereisobjectiveevidencethatwewillnotbeabletocollectallamountsdue accordingtooriginaltermsofthereceivables.Significantfinancialdifficultiesofthedebtor,probabilitythatthedebtor willenterbankruptcyorfinancialrestructuringanddefaultordelinquencyinpaymentsareconsideredindicatorsthatthe accountsreceivableareimpaired.Theallowancerecognizedismeasuredasthedifferencebetweentheasset'scarrying amountandthepresentvalueofestimatedfuturecashflowsdiscountedattheeffectiveinterestratecomputedatinitial recognition.

Short-term Investments

Investmentswithremainingmaturitieslongerthanthreemonthsandlessthanoneyearatthedateofacquisitionare presentedasshort-terminvestments.Theshort-terminvestmentsareclassifiedasavailable-for-salefinancialassets andarestatedatfairvalue.Gainsandlosses,otherthanimpairments,interestincomeandforeignexchangeresults, arerecognizedincomprehensiveincomeuntiltheshort-terminvestmentsarederecognized.Uponderecognition,the cumulativegainorlossrecognizedincomprehensiveincome,isrecognizedintheconsolidatedincomestatement.

Cash and cash equivalents

Cashandcashequivalentsconsistprimarilyofhighlyliquidinvestments,suchasbankdeposits,moneymarketfunds andinterest-bearingbankaccountswithinsignificantinterestrateriskandremainingmaturitiesofthreemonthsorless atthedateofacquisition.

Equity

Ordinarysharesareclassifiedasequity.Incrementalcostsdirectlyattributabletotheissueofnewsharesoroptionsare showninequityasadeduction,netofincometaxes,fromtheproceeds.

Treasurysharesaredeductedfromequityfortheconsiderationpaid,includinganydirectlyattributableincrementalcosts (netofincometaxes),untilthesharesarecancelledorreissued.Wheresuchsharesaresubsequentlyreissued,any considerationreceived,netofanydirectlyattributableincrementaltransactioncostsandrelatedincometaxeffectsis includedinequity.

Provisions

Provisionsarerecognizedwhenwehaveapresentobligation(legalorconstructive)asaresultofapastevent,itis probablethatwewillberequiredtosettletheprobableoutflowofresources,andareliableestimatecanbemadeofthe amountoftheobligation.

Theamountrecognizedasaprovisionisthebestestimateoftheconsiderationrequiredtosettlethepresentobligation atthestatementoffinancialpositiondate,takingintoaccounttherisksanduncertaintiessurroundingtheobligation. Whereaprovisionismeasuredusingthecashflowsestimatedtosettlethepresentobligation,itscarryingamountisthe presentvalueofthosecashflows.

Whensomeoralloftheeconomicbenefitsrequiredtosettleaprovisionareexpectedtoberecoveredfromathirdparty, thereceivableisrecognizedasanassetifitisvirtuallycertainthatreimbursementswillbereceivedandtheamountof thereceivablecanbemeasuredreliably.

Onerouscontracts

Presentobligationsarisingunderonerouscontractsarerecognizedandmeasuredasprovisions.Onerouscontractsare consideredtoexistwherewehaveacontractunderwhichtheunavoidablecostsofmeetingtheobligationsunderthe contractexceedtheeconomicbenefitexpectedtobereceivedunderthecontract.

Accounts payable

Accountspayableareinitiallymeasuredatfairvalue,andaresubsequentlymeasuredatamortizedcost,usingthe effectiveinterestratemethod.

Revenue recognition

Ingeneral,werecognizetherevenuefromthesaleofasystemuponshipmentandtherevenuefromtheinstallationofa systemuponcompletionofthatinstallationatthecustomersite.Eachsystemundergoes,priortoshipment,a"Factory AcceptanceTest"inASML'scleanroomfacilities,effectivelyreplicatingtheoperatingconditionsthatwillbepresent onthecustomer'ssite,inordertoverifywhetherthesystemwillmeetitsstandardspecificationsandanyadditional technicalandperformancecriteriaagreedwiththecustomer.Asystemisshipped,andrevenueisrecognized,only afterallspecificationsaremetandcustomersign-offisreceivedorwaived.Incasenotallspecificationsaremetand theremainingperformanceobligationisnotessentialtothefunctionalityofthesystembutissubstantiveratherthan inconsequentialorperfunctory,aportionofthesalespriceisdeferred.Althougheachsystem'sperformanceisre-tested uponinstallationatthecustomer'ssite,wehaveneverfailedtosuccessfullycompleteinstallationofasystemata customer'spremises.

In2012,werecognizedsystemsalesrevenueforoneNXE:3100system(2011:threeNXE:3100systems)thatwas installedatthecustomerlocationandwasacceptedbyourcustomer,foranamountofEUR43.7million(2011:EUR 119.3million).AsofDecember31,2012,noamountsweredeferredinrelationtoNXE:3100systems(2011:EUR48.6 million).

Inconnectionwiththeintroductionofnewtechnology,suchasoursecond-generationEUVsystems(NXE:3100),we initiallydeferrevenuerecognitionuntilcompletionofinstallationandacceptanceofthenewtechnologybasedsystem atcustomerpremises.Asoursystemsarebasedlargelyontwoproductplatformsthatpermitincremental,modular

upgrades,theintroductionofgenuinely"new"technologyoccursinfrequently,andinthepast12years,hasoccurredon onlytwooccasions:2010(EUV)and1999(TWINSCAN).

ASMLhasnosignificantrepurchasecommitmentsinitsgeneralsalestermsandconditions.Fromtimetotimewe repurchasesystemsthatwehavemanufacturedandsoldand,followingrefurbishment,resellthosesystemstoother customers.Thisrepurchasedecisionisdrivenbymarketdemandexpressedbyothercustomersandnotbyexplicitor implicitcontractualarrangementsrelatingtotheinitialsale.Weconsiderreasonableoffersfromanyvendor,including customers,torepurchaseusedsystemssothatwecanrefurbish,resell,andinstallthesesystemsaspartofour normalbusinessoperations.Oncerepurchased,therepurchasepriceoftheusedsystemisrecordedinwork-inprocessinventoryduringtheperioditisbeingrefurbished,followingwhichtherefurbishedsystemisreflectedin finishedproductsinventoryuntilitissoldtothecustomer.AsofDecember31,2012and2011ASMLhadnorepurchase commitments.

Themainportionofourrevenueisderivedfromcontractualarrangementswithourcustomersthathavemultiple deliverables,suchasinstallationandtrainingservices,prepaidservicecontractsandprepaidextendedopticwarranty contracts.Therevenuerelatingtotheundeliveredelementsofthearrangementsisdeferreduntildeliveryofthese elements.Revenuefrominstallationandtrainingservicesisrecognizedwhentheservicesarecompleted.Revenuefrom prepaidservicecontractsandprepaidextendedandenhanced(optic)warrantycontractsisrecognizedoverthetermof thecontract.

ASMLofferscustomersdiscountsinthenormalcourseofsalesnegotiations.Thesediscountsaredirectlydeducted fromthegrosssalespriceatthemomentofrevenuerecognition.Fromtimetotime,ASMLoffersvolumediscounts tocertaincustomers.Insomeinstancesthesevolumediscountscanbeusedtopurchasefieldoptions(system enhancements).Therelatedamountisrecordedasareductioninrevenueattimeofshipment.

Fromtimetotime,ASMLoffersfreeordiscountedproductsorservices(awardcredits)toitscustomersaspartofa volumepurchaseagreement.Thesalestransactionthatgivesrisetotheseawardcreditsisaccountedforasamultiple elementrevenuetransactionastheagreementsinvolvethedeliveryofmultipleproducts.Theconsiderationreceived fromthesalestransactionisallocatedbetweentheawardcreditsandtheotherelementsofthesalestransaction.The considerationallocatedtotheawardcreditsisrecognizedasdeferredrevenueuntilawardcreditsaredeliveredtothe customer.Theamountallocabletoadelivereditemislimitedtotheamountthatisnotcontingentuponthedeliveryof additionalitemsormeetingotherspecifiedperformanceconditions(thenon-contingentamount).

Revenuesarerecognizedexcludingthetaxesleviedonrevenues(netbasis).

Intheeventthatanarrangementwithacustomerbecomesonerous,werecognizealiabilityfortheamountthatthecost ofsettlingthearrangementexceedstheamountofthecontractprice.Whenwesatisfytheonerousarrangement,we derecognizetherelatedliability.

Leasearrangements

Ourleaseclassificationsforsystemsaredeterminedonacontract-bycontractbasis,takingthesubstanceanddetailsof eachleasecontractintoconsideration.

Finance leases

Leaseswheresubstantiallyalltherisksandrewardsincidentaltoownershipofanassetaretransferredtothelessee areclassifiedasfinanceleasearrangements.Ifwehaveofferedthecustomerafinanceleasearrangement,revenueis recognizedatcommencementoftheleaseterm.Thedifferencebetweenthegrossfinancereceivableandthepresent valueoftheminimumleasepaymentsisinitiallyrecognizedasunearnedinterestandpresentedasadeductiontothe grossfinancereceivable.Interestincomeisrecognizedintheincomestatementoverthetermoftheleasecontract usingtheeffectiveinterestmethod.

Operating leases

Leaseswherebyalltherisksandrewardsincidentaltoownershiparenottransferredtothelesseeareclassifiedas operatingleasearrangements.Ifwehaveofferedthecustomeranoperatingleasearrangement,thesystemisincluded inProperty,plantandequipmentuponcommencementofthelease.Revenuefromoperatingleasearrangementsis recognizedintheconsolidatedincomestatementonastraight-linebasisoverthetermoftheleasecontract.

Warranty

Weprovidestandardwarrantycoverageonoursystemsfor12monthsandoncertainopticpartsfor60months, providinglaborandpartsnecessarytorepairsystemsandopticpartsduringthewarrantyperiod.Theestimated warrantycostsareaccountedforbyaccruingthesecostsforeachsystemuponrecognitionofthesystemsale.The estimatedwarrantycostsarebasedonhistoricalproductperformanceandfieldexpenses.Baseduponhistoricalservice records,wecalculatethechargeofaverageservicehoursandpartspersystemtodeterminetheestimatedwarranty charge.Onasemi-annualbasis,weassess,andupdateifnecessary,ouraccountingestimatesusedtocalculatethe standardwarrantyprovisionbasedonthelatestactualhistoricalwarrantycostsandexpectedfuturewarrantycosts.The extendedandenhanced(optic)warrantyonoursystemsandcertainopticalpartsisaccountedforasaseparateelement ofmultipleelementrevenuerecognitiontransactions.

Accounting for shipping and handling fees and costs

ASMLbillsthecustomerfor,andrecognizesasrevenue,anychargesforshippingandhandlingcosts.Therelatedcosts arerecognizedascostofsales.

Cost of sales

Costofsystemsalescomprisedirectproductcostssuchasmaterials,labor,costofwarranty,depreciation, amortization,shippingandhandlingcostsandrelatedoverheadcosts.ASMLaccruesfortheestimatedcostofthe warrantyonitssystems,whichincludesthecostoflaborandpartsnecessarytorepairsystemsduringthewarranty period.Theamountsrecordedinthewarrantyaccrualareestimatedbasedonactualhistoricalexpensesincurredand onestimatedprobablefutureexpensesrelatedtocurrentsales.Actualwarrantycostsarechargedagainsttheaccrued warrantyreserve.

Costsofservicesalescomprisedirectservicecostssuchasmaterials,labor,depreciationandoverheadcosts.

Costoffieldoptionsalescomprisedirectproductcostssuchasmaterials,labor,depreciation,costofwarranty, shippingandhandlingcostsandrelatedoverheadcosts.

Borrowing costs

Borrowingcostsdirectlyattributabletotheacquisition,constructionorproductionofqualifyingassets,whichareassets thatnecessarilytakeasubstantialperiodoftimetogetreadyfortheirintendeduseorsale,areaddedtothecostof thoseassets,untilsuchtimethattheassetsaresubstantiallyreadyfortheirintendeduseorsale.

Government grants

GovernmentgrantsarenotrecognizeduntilthereisreasonableassurancethatASMLwillcomplywiththeconditions attachingtothemandthatthegrantswillbereceived.

GovernmentgrantswhoseprimaryconditionisthatASMLshouldpurchase,constructorotherwiseacquirenon-current assetsarerecognizedasdeferredincomeinthestatementoffinancialpositionandtransferredtotheconsolidated incomestatementonasystematicandrationalbasisovertheusefullivesoftherelatedassets.

Othergovernmentgrantsarerecognizedasincomeovertheperiodsnecessarytomatchthemwiththecostsforwhich theyareintendedtocompensate,onasystematicbasis.Governmentgrantsthatarereceivableascompensationfor expensesorlossesalreadyincurred,orforthepurposeofgivingimmediatefinancialsupporttoASMLwithnofuture relatedcostsarerecognizedintheconsolidatedincomestatementintheperiodinwhichtheybecomereceivable.

Income taxes

Incometaxesrepresentthesumofthecurrenttaxpositionanddeferredtax.

Thecurrenttaxpositionisbasedontaxablebasefortheyear.Taxablebasediffersfromresultsasreportedinthe consolidatedincomestatementbecauseitexcludesitemsofincomeorchargesthataretaxableordeductibleinprior orlateryears,forexampletimingdifferencesbetweentaxablebaseandfinancialresults,anditfurtherexcludesitems thatarenevertaxableordeductible,forexamplepermanentdifferencesbetweentaxablebaseandfinancialresults.Our taxpositioniscalculatedusingtaxratesthathavebeenenactedorsubstantivelyenactedatthestatementoffinancial positiondate.

Deferredtaxisrecognizedondifferencesbetweenthecarryingamountsofassetsandliabilitiesinthefinancial statementsandthecorrespondingtaxbaseusedinthecomputationoftaxableprofit,andisaccountedforusingthe balancesheetliabilitymethod.Deferredtaxliabilitiesarerecognizedforalltaxabletemporarydifferencesanddeferred taxassetsarerecognizedtotheextentthatitisprobablethattaxableprofitswillbeavailableagainstwhichdeductible temporarydifferencescanbeutilized.Suchassetsandliabilitiesarenotrecognizedifthetemporarydifferencearises fromgoodwillorfromtheinitialrecognition(otherthaninabusinesscombination)ofotherassetsandliabilitiesina transactionthataffectsneitherthetaxableprofitnortheaccountingprofit.

Thecarryingamountofdeferredtaxassetsisreviewedateachstatementoffinancialpositiondateandreducedtothe extentthatitisnolongerprobablethatsufficienttaxableprofitswillbeavailabletoallowallorpartoftheassettobe recovered.

Deferredtaxassetsandliabilitiesaremeasuredatthetaxratesthatareexpectedtoapplyintheperiodinwhichthe liabilityissettledortheassetrealized,basedontaxrates(andtaxlaws)thathavebeenenactedorsubstantively enactedbythestatementoffinancialpositiondate.Themeasurementofdeferredtaxliabilitiesandassetsreflectsthe taxconsequencesthatwouldfollowfromthemannerinwhichweexpect,atthereportingdate,torecoverorsettlethe carryingamountofourassetsandliabilities.

Deferredtaxassetsandliabilitiesareoffsetonthestatementoffinancialpositionwhenthereisalegallyenforceable righttosetoffcurrenttaxassetsagainstcurrenttaxliabilitiesandwhentheyrelatetoincometaxesleviedbythesame taxationauthorityandweintendtosettleourcurrenttaxassetsandliabilitiesonanetbasis.

Werecognizealiabilityforuncertaintaxpositionswhenitisprobablethatanoutflowofeconomicresourceswilloccur. Measurementoftheliabilityforuncertaintaxpositionsisbasedonmanagement'sbestestimateoftheamountoftax benefitthatwillbelost.

Theincomestatementeffectofinterestandpenaltiesrelatingtoliabilitiesforuncertaintaxpositionsarepresented basedontheirnature,aspartofinterestchargesandaspartofselling,generalandadministrativecosts("SG&A"), respectively.

Currentanddeferredtaxarerecognizedasanexpenseorincomeintheincomestatement,exceptwhentheyrelate toitemscreditedordebiteddirectlytoothercomprehensiveincomeordirectlytoequity,inwhichcasethetaxisalso recognizeddirectlyinequity,orwheretheyarisefromtheinitialaccountingforabusinesscombination.Inthecaseof abusinesscombination,thetaxeffectistakenintoaccountincalculatinggoodwillorindeterminingtheexcessofour interestinthenetfairvalueoftheacquiredentity'sidentifiableassetsandliabilitiesincurredorassumedoverthecostof thebusinesscombination.

Contingencies and litigation

Wearepartytovariouslegalproceedingsgenerallyincidentaltoourbusiness,asdisclosedinNote25.Inconnection withtheseproceedingsandclaims,ourmanagementevaluated,basedontherelevantfactsandlegalprinciples,the likelihoodofanunfavorableoutcomeandwhethertheamountofthelosscouldbereasonablyestimated.Inmostcases, managementdeterminedthateitheralosswasnotprobableorwasnotreasonablyestimable.Significantsubjective judgmentswererequiredintheseevaluations,includingjudgmentsregardingthevalidityofassertedclaimsandthe likelyoutcomeoflegalandadministrativeproceedings.Theoutcomeoftheseproceedings,however,issubjecttoa numberoffactorsbeyondourcontrol,mostnotablytheuncertaintyassociatedwithpredictingdecisionsbycourts andadministrativeagencies.Inaddition,estimatesofthepotentialcostsassociatedwithlegalandadministrative proceedingsfrequentlycannotbesubjectedtoanysensitivityanalysis,asdamageestimatesorsettlementoffersby claimantsmaybearlittleornorelationtotheeventualoutcome.Finally,inanyparticularproceeding,wemayagreeto settleortoterminateaclaimorproceedinginwhichwebelievethatitwouldultimatelyprevailwherewebelievethat doingso,whentakentogetherwithotherrelevantcommercialconsiderations,ismorecost-effectivethanengaginginan expensiveandprotractedlitigation,theoutcomeofwhichisuncertain.

Weaccruelegalcostsrelatedtolitigationinourconsolidatedincomestatementatthetimewhentherelatedlegal servicesareactuallyprovidedtous.

Share-based payments

Thecostofemployeeservicesreceived(compensationexpenses)inexchangeforawardsofequityinstrumentsare recognizedbaseduponthegrant-datefairvalueofstockoptionsandshares.Thegrant-datefairvalueofstockoptions isestimatedusingaBlack-Scholesoptionvaluationmodel.ThisBlack-Scholesmodelrequirestheuseofassumptions, includingexpectedsharepricevolatility,theestimatedlifeofeachawardandtheestimateddividendyield.Theriskfreeinterestrateusedinthemodelisdetermined,basedonanindexpopulatedwitheuro-denominatedEuropean governmentagencybondswithAAAratings,andwithalifeequaltotheexpectedlifeoftheequity-settledshare-based payments.Thegrant-datefairvalueofsharesisdeterminedbasedontheclosingpriceofourordinarysharesonNYSE EuronextinAmsterdam("NYSEEuronextAmsterdam")onthegrant-date.

Thegrant-datefairvalueoftheequity-settledshare-basedpaymentsisexpensedonastraight-linebasisoverthe vestingperiod,basedonourestimateofequityinstrumentsthatwilleventuallyvest.Ateachstatementoffinancial positiondate,wereviseourestimateofthenumberofequityinstrumentsexpectedtovest.Theimpactoftherevision oftheoriginalestimates,ifany,isrecognizedintheconsolidatedincomestatementintheperiodinwhichtherevisionis determined,withacorrespondingadjustmenttoequity.

Ourcurrentshare-basedpaymentplansdonotprovideforcashsettlementofoptionsandstock.

Retirement benefit costs

Contributionstodefinedcontributionretirementbenefitplansarerecognizedasanexpensewhenemployeeshave renderedserviceentitlingthemtothecontributions.Paymentsmadetostate-managedretirementbenefitschemes aredealtwithaspaymentstodefinedcontributionplanswhereourobligationsundertheplansareequivalenttothose arisinginadefinedcontributionretirementbenefitplan.ASMLaccountsforitsmulti-employerdefinedbenefitplanasif itwereadefinedcontributionplanasthepensionunionmanagingtheplanisnotabletoprovideASMLwiththerequired company-specificinformationtoenableASMLtoaccountfortheplanasadefinedbenefitplan.

Consolidated statement of cash flows

Theconsolidatedstatementofcashflowshasbeenpreparedbasedontheindirectmethod.Cashflowsinforeign currencieshavebeentranslatedataverageexchangerates.Exchangeratedifferenceoncashandcashequivalentsare shownseparatelyintheconsolidatedstatementofcashflows.Acquisitionsofsubsidiariesarepresentednetofcash balancesacquired.

4. Fair Value Measurements

Fairvalueisthepricethatwouldbereceivedtosellanassetorpaidtotransferaliabilityinanorderlytransaction betweenmarketparticipantsatthemeasurementdate.Thefairvaluemeasurementhierarchyprioritizestheinputsto valuationtechniquesusedtomeasurefairvalueasfollows:

• Level1:Valuationsbasedoninputssuchasquotedpricesforidenticalassetsorliabilitiesinactivemarketsthatthe entityhastheabilitytoaccess.
• Level2:Valuationsbasedoninputsotherthanlevel1inputssuchasquotedpricesforsimilarassetsorliabilities, quotedpricesinmarketsthatarenotactive,orotherinputsthatareobservableorcanbecorroboratedbyobservable dataforsubstantiallythefulltermoftheassetsorliabilities.
• Level3:Valuationsbasedoninputsthataresupportedbylittleornomarketactivityandthataresignificanttothefair valueoftheassetsorliabilities.

Thefairvaluehierarchygivesthehighestprioritytoquotedprices(unadjusted)inactivemarketsforidenticalassets orliabilities(Level1)andthelowestprioritytounobservableinputs(Level3).Afinancialinstrument'sfairvalue classificationisbasedonthelowestlevelofanyinputthatissignificantinthefairvaluemeasurementhierarchy.

Financial assets and financial liabilities measured at fair value on a recurring basis

Investmentsinmoneymarketfunds(aspartofourcashandcashequivalents)havefairvaluemeasurementswhichare allbasedonquotedpricesforidenticalassetsorliabilities.

Ouravailable-forsalefinancialinstrumentsconsistofDutchTreasuryCertificatesanddepositswiththeDutch government.DutchTreasuryCertificatesaretradedinanactivemarketandthefairvalueisdeterminedbasedonquoted marketpricesforidenticalassetsorliabilities.Thefairvalueofdepositsisdeterminedwithreferencetoquotedmarket pricesforsimilarassetsordiscountedcashflowanalysis.

Theprincipalmarketinwhichweexecuteourderivativecontractsistheinstitutionalmarketinanover-the-counter environmentwithahighlevelofpricetransparency.Themarketparticipantsusuallyarelargecommercialbanks.The valuationinputsforourderivativecontractsarebasedonquotedpricesandquotingpricingintervalsfrompublicdata sources;theydonotinvolvemanagementjudgement.

Thevaluationtechniqueusedtodeterminethefairvalueofforwardforeignexchangecontracts(usedforhedging purposes)approximatestheNetPresentValuetechnique("NPV")whichistheestimatedamountthatabankwould receiveorpaytoterminatetheforwardforeignexchangecontractsatthereportingdate,takingintoaccountcurrent interestratesandcurrentexchangerates.

Thevaluationtechniqueusedtodeterminethefairvalueofinterestrateswaps(usedforhedgingpurposes)isthe NetPresentValuetechnique,whichistheestimatedamountthatabankwouldreceiveorpaytoterminatetheswap agreementsatthereportingdate,takingintoaccountcurrentinterestrates.

Our5.75percentseniornotesdue2017("Eurobond")serveasahedgediteminafairvaluehedgerelationshipinwhich wehedgethevariabilityofchangesinthefairvalueofourEurobondduetochangesinmarketinterestrateswith

interestrateswaps.Thefairvaluechangesoftheseinterestrateswapsarerecordedontheconsolidatedstatementof financialpositionunderderivativefinancialinstrumentsandthecarryingamountoftheEurobondisadjustedforthese fairvaluechangesonly.Fortheactualfairvalue,includingcreditriskconsiderations,seeNote19.

Thefollowingtablepresentsourfinancialassetsandfinancialliabilitiesthataremeasuredatfairvalueonarecurring basis:

As of December 31, 2012	Level 1	Level 2	Level 3	Total
(in thousands)	EUR	EUR	EUR	EUR
Assets
Derivativefinancialinstruments1	-	151,748	-	151,748
Moneymarketfunds2	385,420	-	-	385,420
Short-terminvestments3	279,988	650,017	-	930,005
Total	665,408	801,765	-	1,467,173
Liabilities
Longtermdebt4	-	756,502	-	756,502
Derivativefinancialinstruments1	-	10,893	-	10,893
Total	-	767,395	-	767,395

1 Derivativefinancialinstrumentsconsistofforwardforeignexchangecontractsandinterestrateswaps.SeeNote5.

2 Moneymarketfundsarepartofourcashandcashequivalents.

3 Short-terminvestmentsconsistofDutchTreasuryCertificatesanddepositswiththeDutchgovernment.

4 Long-termdebtmainlyrelatestoourEUR600.0millionEurobond(fairvalueasatDecember31,2012:EUR707.1million)andexcludesaccrued interest.ForfurtherdetailsseeNote19.

As of December 31, 2011	Level 1	Level 2	Level 3	Total
(in thousands)	EUR	EUR	EUR	EUR
Assets
Derivativefinancialinstruments1	-	126,351	-	126,351
Moneymarketfunds2	369,238	-	-	369,238
Total	369,238	126,351	-	495,589
Liabilities
Longtermdebt3	-	732,709	-	732,709
Derivativefinancialinstruments1	-	40,359	-	40,359
Total	-	773,068	-	773,068

1 Derivativefinancialinstrumentsconsistofforwardforeignexchangecontractsandinterestrateswaps.SeeNote5.

2 Moneymarketfundsarepartofourcashandcashequivalents.

3 Long-termdebtmainlyrelatestoourEUR600.0millionEurobond(fairvalueasatDecember31,2011:EUR692.0million)andexcludesaccrued interest.ForfurtherdetailsseeNote19.

TherewerenotransfersbetweenlevelsduringtheyearsendedDecember31,2012andDecember31,2011.

5. Financial Risk Management

Weareexposedtocertainfinancialriskssuchasmarketrisk(includingforeigncurrencyexchangeriskandinterestrate risk),creditrisk,liquidityriskandcapitalrisk.Theoverallriskmanagementprogramfocusesontheunpredictability offinancialmarketsandseekstominimizepotentiallyadverseeffectsonourfinancialperformance.Weusederivative financialinstrumentstohedgecertainriskexposures.Noneofourtransactionsareenteredintofortradingor speculativepurposes.Webelievethatmarketinformationisthemostreliableandtransparentmeasureforourderivative financialinstrumentsthataremeasuredatfairvalue.

Foreign currency risk management

Oursalesarepredominatelydenominatedineuros.Exceptionsmayoccuronacustomerbycustomerbasis.Ourcostof salesandotherexpensesaremainlydenominatedineuros,toacertainextentinU.S.dollarandJapaneseyenandtoa limitedextentinothercurrencies.Therefore,weareexposedtoforeigncurrencyexchangerisk.

Itisourpolicytohedgematerialtransactionexposures,suchasforecastedsalesandpurchasetransactions,and materialnetremeasurementexposures,suchasaccountsreceivableandpayable.Wehedgetheseexposuresthrough theuseofforeignexchangecontracts.

AsofDecember31,2012,accumulatedothercomprehensiveincomeincludesEUR4.9milliongain(netoftaxes: EUR4.3milliongain;2011:EUR4.4millionloss)representingthetotalanticipatedgaintobereleasedtosales,and EUR6.0millionloss(netoftaxes:EUR5.3millionloss;2011:EUR10.3milliongain)tobechargedtocostofsales, whichwilloffsettheEURequivalentofforeigncurrencydenominatedforecastedsalesandpurchasetransactions.All amountsareexpectedtobereleasedoverthenext12months.Theeffectivenessofallcontractsforwhichweapply hedgeaccountingismonitoredonaquarterlybasisthroughoutthelifeofthehedges.During2012,noineffectivehedge relationshipswererecognized(2011:lossofEUR0.2millionrelatedtosalestransactions).

Interest rate risk management

Wehaveinterest-bearingassetsandliabilitiesthatexposeustofluctuationsinmarketinterestrates.Weuseinterest rateswapstoaligntheinterest-typicaltermsofinterest-bearingliabilitieswiththeinterest-typicaltermsofinterestbearingassets.Theremayberesidualinterestraterisktotheextenttheassetandliabilitypositionsdonotfullyoffset.

Aspartofourhedgingpolicy,weuseinterestrateswapstohedgechangesinfairvalueofourEurobonddueto changesinmarketinterestrates,therebyoffsettingthevariabilityoffutureinterestreceiptsonpartofourcashand cashequivalents.During2012,thehedgewas100percenteffectiveinhedgingthefairvalueexposuretointerestrate movements.ThechangesinfairvalueoftheEurobondwereincludedatthesametimeintheconsolidatedincome statementasthechangesinthefairvalueoftheinterestrateswaps.

Furthermore,aspartofourhedgingpolicy,weuseinterestrateswapstohedgethevariabilityoffutureinterestcash flowsrelatingtocertainofouroperatingleaseobligations.During2012,thesehedgeswere100percenteffectivein hedgingthecashflowexposuretointerestratemovements.

Financial instruments

Weuseforeignexchangecontractstomanageourcurrencyriskandinterestrateswapstomanageourinterestraterisk. Thefollowingtablesummarizesthenotionalamountsandestimatedfairvaluesofourfinancialinstruments:

	2012		2011
As of December 31	Notional amount	Fair Value	Notional amount	Fair Value
(in thousands)	EUR	EUR	EUR	EUR
Forwardforeignexchangecontracts¹	262,146	16,805	389,579	(23,999)
Interestrateswaps²	624,900	124,050	641,500	109,991

1 Relatestoforwardcontractsassignedasahedgetoforecastedsalesandpurchasetransactionsandtomonetaryassetsandliabilities,mainlyinU.S. dollarandJapaneseYen.

2 Relatestointerestrateswapsassignedasahedgetointerestbearingassetsandliabilities,mainlyrelatedtotheEurobond;thefairvalueofthe interestrateswapsincludesaccruedinterest.

Sensitivity analysis financial instruments

Foreigncurrencysensitivity

WearemainlyexposedtofluctuationsinexchangeratesbetweentheeuroandtheU.S.dollarandtheeuroandthe Japaneseyen.Thefollowingtabledetailsoursensitivitytoa10.0percentstrengtheningofforeigncurrenciesagainst theeuro.Thesensitivityanalysisincludesforeigncurrencydenominatedmonetaryitemsoutstandingandadjuststheir translationattheperiodendfora10.0percentstrengtheninginforeigncurrencyrates.Apositiveamountindicatesan increaseinincomebeforeincometaxesorothercomprehensiveincome,asshown.

		2012		2011
	Impact on income before income taxes	Impact on equity	Impact on income before income taxes	Impact on equity
(in thousands)	EUR	EUR	EUR	EUR
U.S.dollar	(5,258)	13,669	(2,134)	17,293
Japaneseyen	465	(3,218)	(902)	(6,255)
Othercurrencies	(7,674)	-	(3,628)	-
Total	(12,467)	10,451	(6,664)	11,038

Itisourpolicytolimittheeffectsofcurrencyexchangeratefluctuationsonourconsolidatedincomestatement.The increasedeffectonincomebeforeincometaxesin2012comparedwith2011reflectsourhighernetexposureatyear end.Thenegativeeffectonincomebeforeincometaxesaspresentedinthetableabovefor2012ismainlyattributable totimingdifferencesbetweenthearisingandhedgingofexposures.

Theeffectsofthefairvaluemovementsofcashflowhedges,enteredintoforU.S.dollarandJapaneseyentransactions arerecognizedinothercomprehensiveincome.ThedecreasedU.S.dollarandJapaneseyeneffectonother

comprehensiveincomein2012comparedwith2011istheresultofadecreaseinoutstandingsalesandpurchase hedges.

Fora10.0percentweakeningoftheforeigncurrenciesagainsttheeuro,therewouldbeapproximatelyanequalbut oppositeeffectontheincomebeforeincometaxesandothercomprehensiveincome.

Interestratesensitivity

Thesensitivityanalysisbelowhasbeendeterminedbasedontheexposuretointerestratesforbothderivative financialandnon-derivativefinancialinstrumentsatthestatementoffinancialpositiondatewiththestipulated changetakingplaceatthebeginningofthefinancialyearandheldconstantthroughoutthereportingperiod.The tablebelowshowstheeffectofa1.0percentagepointincreaseininterestratesonourincomebeforeincometaxes andothercomprehensiveincome.Apositiveamountindicatesanincreaseinincomebeforeincometaxesandother comprehensiveincome.

	2012		2011
	Impact on income before income taxes	Impact on other comprehensive income	Impact on income before income taxes	Impact on other comprehensive income
(in thousands)	EUR	EUR	EUR	EUR
Effectofa1.0percentpointincreaseininterestrates	20,706	1,488	21,020	1,691

Thepositiveeffectonincomebeforeincometaxesmainlyrelatestoourcashandcashequivalentsandshort-term investments.Thepositiveeffectonothercomprehensiveincome,ismainlyattributabletothefairvaluemovementsof theinterestrateswapsdesignatedascashflowhedges.

Fora1.0percentagepointdecreaseininterestratestherewouldbealoweroppositeeffectonincomebeforeincome taxesandothercomprehensiveincomeduetothecurrentinterestrates.

Credit risk management

Financialinstrumentsthatpotentiallysubjectustosignificantconcentrationofcreditriskconsistprincipallyofcash andcashequivalents,short-terminvestments,derivativefinancialinstrumentsusedforhedgingactivities,accounts receivableandfinancereceivables.

Cashandcashequivalents,short-terminvestmentsandderivativefinancialinstrumentscontainanelementofriskof thecounterpartiesbeingunabletomeettheirobligations.Ourriskmanagementprogramfocusesappropriatelyon thecurrentenvironmentofuncertaintyinthefinancialmarkets,especiallyintheeuro-zone.Weinvestourcashand cashequivalentsandshort-terminvestmentsinshort-termdepositswithhigh-ratedfinancialinstitutionsandtheDutch government,inDutchTreasuryCertificatesandinAAAm-ratedmoneymarketfundsthatinvestinhigh-ratedshort-term debtsecuritiesoffinancialinstitutionsandgovernments.Tomitigatetheriskthatanyofourcounterpartiesinhedging transactionsisunabletomeetitsobligations,weonlyenterintotransactionswithalimitednumberofmajorfinancial institutionsthathavehighcreditratingsandcloselymonitorthecreditworthinessofourcounterparties.Concentration riskismitigatedbylimitingtheexposuretoasinglecounterparty.

OurcustomersconsistofIntegratedCircuit("IC")manufacturerslocatedthroughouttheworld.Weperformongoing creditevaluationsofourcustomers'financialcondition.Wetakeadditionalmeasurestomitigatecreditriskonaccounts receivableandfinancereceivableswhenconsideredappropriatebymeansofe.g.downpayments,lettersofcredit,and retentionofownershipprovisionsincontracts.Retentionofownershipenablesustorecoverthesystemsintheeventa customerdefaultsonpayment.

Liquidity risk management

Ourliquidityneedsareaffectedbymanyfactors,someofwhicharebasedonthenormalon-goingoperationsofthe business,andothersthatrelatetotheuncertaintiesoftheglobaleconomyandthesemiconductorindustry.Although ourcashrequirementsfluctuatebasedonthetimingandextentofthesefactors,webelievethatcashgeneratedfrom operations,togetherwiththeliquidityprovidedbyexistingcashandcashequivalentsandshort-terminvestmentsand ourborrowingcapabilityaresufficienttosatisfyourcurrentrequirements,includingour2013capitalexpenditures.We intendtoreturncashtoourshareholdersonaregularbasisintheformofdividendpaymentsand,subjecttoouractual andanticipatedliquidityrequirementsandotherrelevantfactors,sharebuybacksorcapitalrepayment.

Ourliquidityanalysisconsistsofthefollowingderivativefinancialinstruments:

		Less than 1
	Total	year	1-3 years	3-5 years After 5 years
(in thousands)	EUR	EUR	EUR	EUR	EUR
Cash outflows
Currencycontracts	564,731	564,731	-	-	-
Interestrateswaps	673,181	8,096	19,386	620,010	25,689
Cash inflows
Currencycontracts	581,641	581,641	-	-	-
Interestrateswaps	798,401	34,546	69,212	669,538	25,105

Formoreinformationonourcontractualobligations,includingtheliquidityanalysisfornon-derivativefinancialliabilities, seeNote24.

6. Critical Accounting Judgments and Key Sources of Estimation Uncertainty

Intheprocessofapplyingouraccountingpolicies,whicharedescribedinNote3,managementhasmadesome judgmentsthathavesignificanteffectontheamountsrecognizedinthefinancialstatements.Thesealsoincludekey assumptionsconcerningthefuture,andotherkeysourcesofestimationuncertaintyatthestatementoffinancialposition date,thathaveasignificantriskofcausingamaterialadjustmenttothecarryingamountsofassetsandliabilitieswithin thenextfinancialyear.

Warranty

Weprovidestandardwarrantycoverageonoursystemsfor12monthsandoncertainopticpartsfor60months, providinglaborandpartsnecessarytorepairsystemsandopticpartsduringthewarrantyperiod.Theestimated warrantycostsareaccountedforbyaccruingthesecostsforeachsystemuponrecognitionofthesystemsale.The estimatedwarrantycostsarebasedonhistoricalproductperformanceandfieldexpenses.Baseduponhistoricalservice records,wecalculatethechargeofaverageservicehoursandpartspersystemtodeterminetheestimatedwarranty costs.Onasemi-annualbasis,weassess,andupdateifnecessary,ouraccountingestimatesusedtocalculatethe standardwarrantyreservebasedonthelatestactualhistoricalwarrantycostsandexpectedfuturewarrantycosts.The actualproductperformanceand/orfieldexpenseprofilesmaydiffer,andinthosecasesweadjustourwarrantyreserves accordingly.Futurewarrantycostsmayexceedourestimates,whichcouldleadtoanincreaseinourcostofsales.In 2012and2011,thereassessmentsofthewarrantyreserve,andresultingchangeinaccountingestimate,didnothavea materialeffectonourconsolidatedincomestatementandearningspershareamounts.

Impairment of non-financial assets

Non-financialassetsincludegoodwill,otherintangibleassetsandproperty,plantandequipment.

Ateachreportingdate,wereviewthecarryingamountsofourtangibleandintangibleassets(otherthangoodwill)to determinewhetherthereisanyindicationthatthoseassetshavesufferedanimpairmentloss.Ifanysuchindication exists,therecoverableamountoftheassetisestimatedinordertodeterminetheextentoftheimpairmentloss(ifany). Whereitisnotpossibletoestimatetherecoverableamountofanindividualasset,weestimatetherecoverableamount ofthecash-generatingunit("CGU")towhichtheassetbelongs.Whereareasonableandconsistentbasisofallocation canbeidentified,corporateassetsarealsoallocatedtoindividualCGUs,orotherwisetheyareallocatedtothesmallest groupofCGUsforwhichareasonableandconsistentallocationbasiscanbeidentified.

Intangibleassetswithindefiniteusefullivesandintangibleassetsnotyetavailableforusearetestedforimpairment annually,andwheneverthereisanindicationthattheassetmaybeimpaired.

Recoverableamountisthehigheroffairvaluelesscoststosellandvalueinuse.Iftherecoverableamountofanasset (orCGU)isestimatedtobelessthanitscarryingamount,thecarryingamountoftheasset(orCGU)isreducedtoits recoverableamount.Animpairmentlossisrecognizedimmediatelyinprofitorloss,unlesstherelevantassetiscarried atarevaluedamount,inwhichcasetheimpairmentlossistreatedasarevaluationdecrease.

During2012,werecordedimpairmentchargesofEUR3.2millioninproperty,plantandequipmentofwhichwerecorded EUR1.0millionincostofsales,EUR0.5millioninR&DcostsandEUR1.7millioninSG&Acosts.Theimpairment chargesrecordedin2012mainlyrelatedtomachineryandequipmentandfurniture,fixtureandotherequipment(EUR 1.7million)withrespecttotechnicalequipmentandsoftwarewhichareceasedtobeused.Theimpairmentcharges

weredeterminedbasedonthedifferencebetweentheassets'recoverableamount(beingEUR0.1million)andtheir carryingamount.Wedidnotrecordanyimpairmentchargesinotherintangibleassets.

Capitalization of development expenditures

Indeterminingthedevelopmentexpenditurestobecapitalized,ASMLmakesestimatesandassumptionsbasedon expectedfutureeconomicbenefitsgeneratedbyproductsthataretheresultofthesedevelopmentexpenditures.Other importantestimatesandassumptionsinthisassessmentprocessaretherequiredinternalrateofreturn,thedistinction betweenresearchanddevelopmentandtheestimatedusefullife.

Accounts receivable and finance receivables

Amajorityofouraccountsreceivableandfinancereceivablesarederivedfromsalestoalimitednumberoflarge multinationalsemiconductormanufacturersthroughouttheworld.Inordertomonitorpotentialcreditlosses,weperform ongoingcreditevaluationsofourcustomers'financialcondition.Respectiveallowancesforcreditlossesonboth accountsreceivableandfinancereceivablesaremaintainedbaseduponmanagement'sassessmentoftheexpected collectabilityofallaccountsreceivableandfinancereceivables.Therespectiveallowancesforcreditlossesonaccounts receivableandfinancereceivablesarereviewedperiodicallytoassesstheadequacyoftheseallowances.Inmakingthis assessment,managementtakesintoconsideration(i)anycircumstancesofwhichweareawareregardingacustomer's inabilitytomeetitsfinancialobligations;and(ii)ourjudgmentsastopotentialprevailingeconomicconditionsinthe industryandtheirpotentialimpactonourcustomers.Wherewedeemitprudenttodoso,wemayrequiresomeformof creditenhancement,suchaslettersofcredit,downpaymentsandretentionofownershipprovisionsincontracts,before shippingsystemstocertaincustomers,whichareintendedtorecoverthesystemsintheeventacustomerdefaultson payment.Wehavenotincurredanymaterialaccountsreceivableorfinancereceivablecreditlossesduringthepastthree years.Abusinessfailureofoneofourmaincustomerscouldresultinasubstantialcreditlossinrespecttoamounts owedtousbythatcustomer,whichcouldadverselyaffectourbusiness,financialconditionandresultsofoperations.

Inventories

Inventoriesarestatedatthelowerofcost(first-in-first-outmethod)ornetrealizablevalue.Thecostofinventories comprisenetpricespaidformaterialspurchased,chargesforfreightandcustomsduties,productionlaborcostand factoryoverhead.Netrealizablevaluerepresentstheestimatedsellingpricelessallestimatedcostsofcompletionand coststobeincurredinmarketing,sellinganddistribution.

Inventoryprovisionsarerecognizedforslow-moving,obsoleteorunsellableinventoryandarereviewedonaquarterly basis.Ourmethodologyinvolvesmatchingouronhandandon-orderinventorywithourmanufacturingforecast.In determininginventoryprovisions,weevaluateinventoryinexcessofourforecastedneedsonbothtechnologicaland economiccriteriaandmakeappropriateprovisionstoreflecttheriskofobsolescence.Thismethodologyissignificantly affectedbyourforecastedneedsforinventory.Ifactualdemandorusageweretobelowerthanestimated,additional inventoryprovisionsforexcessorobsoleteinventorymayberequired,whichcouldhaveamaterialadverseeffectonour business,financialconditionandresultsofoperations.

Income taxes

WeoperateinvarioustaxjurisdictionsinAsia,theUnitedStatesandEuropeandmustcomplywiththetaxlawsofeach ofthesejurisdictions.

Deferredtaxassetsandliabilitiesaremeasuredatthetaxratesthatareexpectedtoapplyintheperiodinwhichthe liabilityissettledortheassetrealized,basedontaxrates(andtaxlaws)thathavebeenenactedorsubstantively enactedatstatementoffinancialpositiondate.Themeasurementofdeferredtaxliabilitiesandassetsreflectsthetax consequencesthatwouldfollowfromthemannerinwhichweexpect,atthereportingdate,torecoverorsettlethe carryingamountofourassetsandliabilities.

Wecontinuouslyassessourabilitytorealizeourdeferredtaxassetsresulting,amongothers,fromnetoperatingloss carry-forwards.Thetotalamountoftaxeffectofthelosscarry-forwardsasofDecember31,2012wasEUR5.6million, whichresideswithASMLUS,Inc.andUSbasedsubsidiariesofASMLUSInc.Webelievethatalllosseswillbeoffset byfuturetaxableincomebeforeourabilitytoutilizethoselossesexpires.Thisanalysistakesintoaccountourprojected futuretaxableoperatingincomeandpossibletaxplanningalternativesavailabletous.

Thecalculationofourtaxliabilitiesinvolvesuncertaintiesintheapplicationofcomplextaxlaws.Ourestimateforthe potentialoutcomeofanyuncertaintaxpositionishighlyjudgmental.However,webelievethatwehaveadequately providedforuncertaintaxpositions.Settlementoftheseuncertaintiesinamannerinconsistentwithourexpectations couldhaveamaterialimpactonourresultsofoperations,financialconditionandcashflows.Werecognizealiabilityfor uncertaintaxpositionswhenitisprobablethatanoutflowofeconomicresourceswilloccur.Measurementoftheliability foruncertaintaxpositionsisbasedonmanagement'sbestestimateoftheamountoftaxbenefitthatwillbelost.

7. Earnings per share

Theearningspershare("EPS")datahavebeencalculatedinaccordancewiththefollowingschedule:

As of December 31 (in thousands, except per share data)	2012 EUR	2011 EUR
Net income	1,302,347	1,494,071
Weighted average number of shares outstanding during the year (after deduction of treasury stock)	424,096	425,618
Basic net income per ordinary share	3.07	3.51
Weighted average number of shares: Plussharesapplicableto:	424,096	425,618
Optionsandconditionalshares1	2,890	3,435
Dilutive potential ordinary shares	2,890	3,435
Adjusted weighted average number of shares	426,986	429,053
Diluted net income per ordinary share 1	3.05	3.48

1 ThecalculationofdilutednetincomeperordinaryshareassumestheexerciseofoptionsissuedunderASMLstockoptionplansandtheissuanceof sharesunderASMLshareplansforperiodsinwhichexercisesorissuanceswouldhaveadilutiveeffect.Thecalculationofdilutednetincomeper ordinarysharedoesnotassumeexerciseofsuchoptionsorissuanceofshareswhensuchexercisesorissuancewouldbeanti-dilutive.

8. Property, plant and equipment

Property,plantandequipmentconsistofthefollowing:

	Land, buildings and	Machinery and	Leasehold	Furniture, fixtures and other
	constructions	equipment	improvements	equipment	Total
(in thousands)	EUR	EUR	EUR	EUR	EUR
Cost
Balance,January1,2011	526,855	609,253	185,635	316,244	1,637,987
Additions	213,513	355,358	20,918	29,314	619,103
Disposals	-	(212,286)	(216)	(1,619)	(214,121)
Effectofchangesinexchangerates	1,773	11,698	323	1,040	14,834
Balance,December31,2011	742,141	764,023	206,660	344,979	2,057,803
Additions	106,234	248,429	8,883	22,749	386,295
Disposals	(347)	(317,022)	(300)	(30,894)	(348,563)
Effectofchangesinexchangerates	(995)	(4,671)	(391)	(59)	(6,116)
Balance, December 31, 2012	847,033	690,759	214,852	336,775	2,089,419
Accumulated depreciation and impairment
Balance,January1,2011	127,509	358,026	129,741	277,380	892,656
Depreciation	27,362	99,968	13,128	17,575	158,033
Impairmentcharges	-	3,508	2,789	5,975	12,272
Disposals	-	(64,417)	(41)	(988)	(65,446)
Effectofchangesinexchangerates	1,006	4,715	158	799	6,678
Balance,December31,2011	155,877	401,800	145,775	300,741	1,004,193
Depreciation	31,598	110,571	13,416	23,668	179,253
Impairmentcharges	649	906	-	1,679	3,234
Disposals	(347)	(92,205)	(248)	(30,575)	(123,375)
Effectofchangesinexchangerates	(505)	(3,090)	(165)	(49)	(3,809)
Balance, December 31, 2012	187,272	417,982	158,778	295,464	1,059,496
Carrying amount
December31,2011	586,264	362,223	60,885	44,238	1,053,610
December 31, 2012	659,761	272,777	56,074	41,311	1,029,923

AsofDecember31,2012,thecarryingamountincludesassetsunderconstructionforland,buildingsandconstructions ofEUR5.5million(2011:EUR165.0million),machineryandequipmentofEUR21.8million(2011:EUR16.6million),

leaseholdimprovementsofEUR1.0million(2011:EUR1.3million)andfurniture,fixturesandotherequipmentofEUR 9.3million(2011:EUR8.0million).AsofDecember31,2012,thecarryingamountoflandamountstoEUR60.7million (2011:EUR51.1million).

Themajorityoftheadditionsanddisposalsin2012and2011relatetomachineryandequipment(includingoperating leasestocustomers,prototypes,evaluationandtrainingsystems).ThesesystemsaresimilartothosethatASMLsells initsordinarycourseofbusiness.Thesystemsarecapitalizedunderproperty,plantandequipmentbecausetheyare heldforownuse,forrentalandforevaluationpurposes.Thesesystemsarerecordedatcostanddepreciatedovertheir expectedusefullife.Fromthetimethattheseassetsarenolongerheldforusebutintendedforsaleintheordinary courseofbusiness,theyarereclassifiedfromproperty,plantandequipmenttoinventoryattheloweroftheircarrying valueorfairmarketvalue.Sincethetransfersbetweeninventoryandproperty,plantandequipmentarenon-cash events,thesearenotreflectedintheconsolidatedstatementofcashflows.AnamountofEUR204.8million(2011:EUR 300.5million)oftheadditionsrelatestonon-cashtransfersfrominventoryandanamountofEUR9.6million(2011:EUR 17.7million)relatestoothernon-cashmovements(mainlyinvestmentsnotyetpaid).AnamountofEUR222.9million (2011:EUR145.3million)ofthedisposalsrelatestonon-cashtransferstoinventory.Whensold,theproceedsandcost ofthesesystemsarerecordedasnetsalesandcostofsales,respectively,identicaltothetreatmentofothersales transactions.Thecostofsalesforthesesystemsincludestheinventoryvalueandtheadditionalcostsofrefurbishing (materialsandlabor).

Theimpairmentchargesrecordedin2012mainlyrelatedtofurniture,fixtureandotherequipment(EUR1.7million). Werecordedimpairmentchargeswithrespecttosoftwarewhichareceasedtobeused.Theimpairmentchargeswere determinedbasedonthedifferencebetweentheassets'valueinuse(beingEUR0.1million)andtheircarryingamount.

Theimpairmentchargesrecordedin2011mainlyrelatedtomachineryandequipmentandfurniture,fixtureandother equipment(EUR9.5million).Werecordedimpairmentchargeswithrespecttotechnicalequipmentandsoftwarewhich areceasedtobeused.Theimpairmentchargesweredeterminedbasedonthedifferencebetweentheassets'valuein use(beingEUR1.9million)andtheircarryingamount.

Indeterminingthevalueinuseofanasset,wemakeestimatesaboutfuturecashflows.Theseestimatesarebasedon ourfinancialplan,updatedwiththelatestavailableprojectionsofthesemiconductormarketconditionsandoursales andcostexpectations,whichisconsistentwithwhatweusetomanageourbusiness.

AsofDecember31,2012,thecarryingamountofmachineryandequipmentincludesanamountofEUR82.2millionwith respecttoevaluationandoperatingleasesystems(2011:EUR201.4million).

During2012,werecordedimpairmentchargesofEUR3.2million(2011:EUR12.3million)ofwhichwerecordedEUR1.0 million(2011:EUR6.2million)incostofsales,EUR0.5million(2011:EUR3.5million)inR&DcostsandEUR1.7million (2011:EUR2.6million)inSG&Acosts.

During2012,werecordeddepreciationchargesofEUR179.3million(2011:EUR158.0million)ofwhichwerecorded EUR147.7million(2011:EUR117.7million)incostofsales,EUR15.3million(2011:EUR24.9million)inR&Dcostsand EUR16.3million(2011:EUR15.4million)inSG&Acosts.

SpecialPurposeEntity

Thecarryingamountofland,buildingsandconstructionsincludesanamountofEUR32.4million(2011:EUR33.8 million)relatingtoourheadquartersinVeldhoven,theNetherlands,whichisownedbyKoppelenwegIIB.V.,aSPE.

Asof2003,weareleasingtheVeldhovenheadquartersforaperiodof15years(from2003)fromanentity("lessor")that wasincorporatedbyasyndicateofthreebanks("SPEshareholders")solelyforthepurposeofleasingthisbuilding.The lessor'sequityamountstoEUR1.9millionandhasnotchangedsince2003.

TheSPEshareholderseachgrantedaloanofEUR11.6millionandafourthbankgrantedaloanofEUR12.3million (EUR47.1millionintotal)totheparentofthelessor.ASMLprovidedtheparentofthelessorwithasubordinatedloan ofEUR5.4millionandhasapurchaseoptionthatisexercisableeitherattheendoftheleasein2018,atapriceof EUR24.5million,orduringtheleaseatapriceequaltothebookvalueoftheassets.Thetotalassetsofthelessor entityamountedtoEUR54.5millionatinceptionofthelease.TheentityisdeterminedtobeaSPEbecausetheequity investorsdonothavesufficientequityatriskforthelegalentitytofinanceitsactivitieswithoutsufficientadditional subordinatedsupport.

TheprimarypurposeforwhichtheSPEwascreatedwastoprovideASMLwithuseofthebuildingfor15years,where ASMLdoesnotretainsubstantiallyalltherisksandrewardsfromchangesinvalueofthebuilding.Themainactivities oftheentityaretorent,re-marketandultimatelysellthebuildingthatisownedbytheSPE.Theeconomicperformance oftheSPEismostsignificantlyimpactedbytheabilityofthelessee(ASML)toexercisethepurchaseoptionatanytime duringtheleaseterm,andthuswecouldpotentiallybenefitfromincreasesinthefairvalueofthebuilding.

Whilethedebtholdershaveaninterest,andmayabsorblosses,andtheequityholdershaveaninterestandmayreceive benefits,theydonothavethepowertodirectactivitiesthatmostsignificantlyimpacttheentity'seconomicperformance andtherefore,cannotbetheprimarybeneficiary.Throughthepre-determinedpriceofthecalloptionASMLhasthe powerovertheSPE,thereforeonlyASMLmeetsboththepowerandlosses/benefitcriterionandconsolidatestheSPE.

9. Goodwill

Changesingoodwillaresummarizedasfollows:

2011	2012	Year ended December 31
EUR	EUR	(in thousands)
		Cost
150,071	155,124	Balance,January1
-	6,038	Acquisitionsubsidiary
5,053	(3,095)	Effectofchangesinexchangerates
155,124	158,067	Balance,December31

GoodwillistestedforimpairmentannuallyonSeptember30andwhenevereventsorchangesincircumstancesindicate thatthecarryingamountofthegoodwillmaynotberecoverable.

Duetochangesinourreportingstructure,wehavere-evaluatedourcash-generatingunitsduring2012.Asresult,all goodwillrecognizedinrelationtotheacquisitionofBrionin2007isallocatedtotheoperatingsegmentASML(in2011 assignedtotheCGUBrion).

Duetothere-evaluationofourCGU's,resultingintherecognizedgoodwillbeingallocatedtotheoperatingsegment ASML,wealsochangedthemethodofdeterminingtherecoverableamountintheannualimpairmenttest.The recoverableamountisdeterminedonthebasisoffairvaluelesscosttosell.Fairvaluelesscosttosellisbasedon ASML'smarketcapitalization,whileinprioryearswedeterminedtherecoverableamountonthebasisofthevaluein useusingadiscountedcashflowanalysisfortheCGUBrion.

Webelievethat,asperSeptember30,2012,ASML'smarketcapitalization,determinedonbasisofthequotedshare priceofASML'spubliclytradedoutstandingshares,isthebestevidenceofthefairvaluelesscosttosellofthe operatingsegmentASML.

Basedontheoutcomeoftheannualgoodwillimpairmenttest,managementbelievesthatthefairvaluelesscosttosell oftheCGUsubstantiallyexceededitscarryingvalue,thereforegoodwillwasnotimpairedasofDecember31,2012and December31,2011.AsofDecember31,2012andDecember31,2011,noaccumulatedimpairmentswererecognized.

AcquisitionsubsidiaryrelatestoWijdevenMotionHoldingB.V.anditswholly-ownedsubsidiaryWijdevenMotionB.V. (hereafterjointlyreferredtoas"WijdevenMotion")acquiredinthefourthquarterof2012.WijdevenMotionbuildsa portionofthecomplexlinearmotorsusedinASML'swaferandreticlestages.Assetsacquiredandliabilitiesincurred,or assumed,followingtheacquisitionhavebeenassignedtotheoperatingsegmentASML.

10. Other intangible assets

Otherintangibleassetsconsistofthefollowing:

	Development expenditures	Intellectual property	Developed technology	Customer relationships	In-process R&D	Other	Total
(in thousands)	EUR	EUR	EUR	EUR	EUR	EUR	EUR
Cost
Balance,January1,2011	724,356	47,250	25,883	8,733	22,817	2,231	831,270
Additions	98,086	-	-	-	-	-	98,086
Effectofchangesinexchangerates	2,179	-	-	-	769	-	2,948
Balance,December31,2011	824,621	47,250	25,883	8,733	23,586	2,231	932,304
Additions	293,624	7,658	-	-	-	-	301,282
Effectofchangesinexchangerates	(2,341)	-	-	-	(472)	-	(2,813)
Balance, December 31, 2012	1,115,904	54,908	25,883	8,733	23,114	2,231	1,230,773
Accumulated amortization
Balance,January1,2011	468,320	47,224	17,043	4,185	15,466	1,994	554,232
Amortization	97,337	4	4,080	1,092	5,470	109	108,092
Effectofchangesinexchangerates	1,047	-	-	-	945	-	1,992
Balance,December31,2011	566,704	47,228	21,123	5,277	21,881	2,103	664,316
Amortization	98,806	800	4,080	1,092	1,723	109	106,610
Effectofchangesinexchangerates	(591)	-	-	-	(490)	-	(1,081)
Balance, December 31, 2012	664,919	48,028	25,203	6,369	23,114	2,212	769,845
Carrying amount
December31,2011	257,917	22	4,760	3,456	1,705	128	267,988
December31,2012	450,985	6,880	680	2,364	-	19	460,928

Developmentexpendituresmainlyrelatetothecapitalizedexpendituresregardingourcoreprograms:immersion,EUV andholisticlithographysolutions.

Intellectualpropertyrelatestolicensesandpatentspurchasedfromthirdparties.During2012,weacquiredintellectual propertyfromthirdpartiesforanamountofEUR7.7million.Developedtechnology,customerrelationships,in-process R&DandotherwereobtainedintheacquisitionofBrion.

During2012,werecordedamortizationchargesofEUR106.6million(2011:EUR108.1million)whichwererecordedin costofsalesforEUR106.5million(2011:108.1million)andinR&DcostsforEUR0.1million(2011:nil).

During2012wecapitalizedborrowingcostsforEUR2.5million(2011:nil).

Estimatedamortizationexpensesrelatingtointangibleassetsforthenextfiveyearsandthereafterareasfollows:

(in thousands)	EUR
2013	110,971
2014	125,727
2015	80,103
2016	79,922
2017	43,053
Thereafter	21,152
Total	460,928

11. Finance receivables

Financereceivablesconsistofthenetinvestmentinfinanceleases.Thefollowingtableliststhecomponentsofthe financereceivablesasofDecember31,2012and2011:

As of December 31	2012	2011
(in thousands)	EUR	EUR
Financereceivables,gross	309,616	78,853
Unearnedinterest	(5,828)	-
Finance receivables, net	303,788	78,853
Currentportionoffinancereceivables,gross	268,617	78,853
Currentportionofunearnedinterest	(3,450)	-
Non-current portion of finance receivables, net	38,621	-

TheincreaseinfinancereceivablesasofDecember31,2012comparedtoDecember31,2011iscausedbyan increasednumberoffinanceleases.AtDecember31,2012,theminimumleasepaymentsandpresentvalueofminimum leasepaymentsisasfollows:

	Minimum lease payments		Present value of minimum lease payments
As of December 31	2012	2011	2012	2011
(in thousands)	EUR	EUR	EUR	EUR
Notlaterthanoneyear	268,617	78,853	265,167	78,853
Laterthanoneyearandnotlaterthanfiveyears	40,999	-	38,621	-
	309,616	78,853	303,788	78,853
Less:unearnedinterest	(5,828)	-	n/a	n/a
Present value of minimum lease payments receivable	303,788	78,853	303,788	78,853

ASMLperformsongoingcreditevaluationsonitscustomers'financialcondition.ASMLperiodicallyreviewswhether anallowanceforcreditlossesisneededbyconsideringfactorssuchashistoricalpaymentexperience,creditquality, agingfinancereceivablebalances,andcurrenteconomicconditionsthatmayaffectacustomer'sabilitytopay.In2012 and2011,wedidnotrecordanyexpectedcreditlossesfromfinancereceivables.AsofDecember31,2012thefinance receivableswereneitherpastduenorimpaired.

12. Financial instruments by category

Theaccountingpoliciesforfinancialinstrumentshavebeenappliedtothelineitemsbelowandrepresentthefairvalue ofthesefinancialinstruments:

As of December 31, 2012	Derivatives at fair value through profit or loss	Derivatives for which hedge accounting is applied	Financial assets at fair value through profit or loss	Available for sale financial assets	Loans and receivables	Total
(in thousands)	EUR	EUR	EUR	EUR	EUR	EUR
Assets as per statement of financial position date
Derivativefinancialinstruments	16,943	134,805	-	-	-	151,748
Accountsreceivable	-	-	-	-	605,288	605,288
Financereceivables	-	-	-	-	303,788	303,788
Othernon-currentandcurrentassets	-	-	-	-	68,638	68,638
Short-terminvestments	-	-	-	930,005	-	930,005
Cashandcashequivalents	-	-	385,420	-		1,382,176 1,767,596
Total	16,943	134,805	385,420	930,005		2,359,890 3,827,063

As of December 31, 2012 (in thousands)	Derivatives at fair value through profit or loss EUR	Derivatives for which hedge accounting is applied EUR	Other financial liabilities EUR	Total EUR
Liabilities as per statement of financial position date
Long-termdebt1	-	-	756,502	756,502
Derivativefinancialinstruments	425	10,468	-	10,893
Accruedandotherliabilities	-	-	480,088	480,088
Accountspayable	-	-	188,961	188,961
Total	425	10,468	1,425,551	1,436,444

1 Long-termdebtincludesourEurobond.BecausetheEurobondservesashedgediteminafairvaluehedgerelationship,thecarryingamountisonly adjustedforfairvaluechangesininterestrateswaps.Seenote19.

As of December 31, 2011 (in thousands)	Derivatives at fair value through profit or loss EUR	Derivatives for which hedge accounting is applied EUR	Financial assets at fair value through profit or loss EUR	Loans and receivables EUR	Total EUR
Assets as per statement of financial position date
Derivativefinancialinstruments	1,095	125,256	-	-	126,351
Accountsreceivable	-	-	-	880,627	880,627
Financereceivables	-	-	-	78,853	78,853
Othernon-currentandcurrentassets	-	-	-	89,470	89,470
Cashandcashequivalents	-	-	369,238	2,362,544	2,731,782
Total	1,095	125,256	369,238	3,411,494	3,907,083

Total EUR	Other financial liabilities EUR	Derivatives for which hedge accounting is applied EUR	Derivatives at fair value through profit or loss EUR	As of December 31, 2011 (in thousands)
				Liabilities as per statement of financial position date
732,709	732,709	-	-	Long-termdebt1
40,359	-	6,952	33,407	Derivativefinancialinstruments
472,710	472,710	-	-	Accruedandotherliabilities
444,269	444,269	-	-	Accountspayable
1,690,047	1,649,688	6,952	33,407	Total

1 Long-termdebtincludesourEurobond.BecausetheEurobondservesashedgediteminafairvaluehedgerelationship,thecarryingamountisonly adjustedforfairvaluechangesininterestrateswaps.Seenote19.

SeeNote4forthefairvaluemeasurementhierarchy.

Thecarryingamountsoftheaccountsreceivable,financereceivablesandotherassetsapproximatetheirfairvalue.

Theamountsreflectedaboverepresentourmaximumexposuretocreditriskforfinancialassets.Seenote5forcredit riskmanagementinrelationtoourfinancialassets.

13. Derivative financial instruments

Thederivativefinancialinstrumentsconsistofthefollowing:

		2012	2011
As of December 31	Assets	Liabilities	Assets	Liabilities
(in thousands)	EUR	EUR	EUR	EUR
Interestrateswaps-cashflowhedges	-	4,780	-	3,933
Interestrateswaps-fairvaluehedges	128,830	-	113,924	-
Forwardforeignexchangecontracts-cashflowhedges	5,975	5,688	11,332	3,019
Forwardforeignexchangecontracts-otherhedges(nohedgeaccounting)	16,943	425	1,095	33,407
Total	151,748	10,893	126,351	40,359
Lessnon-currentportion:
Interestrateswaps-cashflowhedges	-	4,032	-	3,210
Interestrateswaps-fairvaluehedges	101,651	-	92,534	-
Total non-current portion	101,651	4,032	92,534	3,210
Total current portion	50,097	6,861	33,817	37,149

Thefairvaluepartofaderivativefinancialinstrumentthathasaremainingtermof12monthsorlessafterthestatement offinancialpositiondateisclassifiedascurrentassetorliability.Whenthefairvaluepartofaderivativefinancial instrumenthasatermofmorethan12monthsafterstatementoffinancialpositiondate,itisclassifiedasnon-current.

Foreign exchange contracts

ThenotionalprincipalamountsoftheoutstandingforwardforeignexchangecontractsinthemaincurrenciesU.S.dollar andJapaneseyenatDecember31,2012areU.S.dollar159.8millionandJapaneseyen8.4billion(2011:U.S.dollar 48.9millionandJapaneseyen37.2billion).

Thehedgedhighlyprobableforecastedtransactionsdenominatedinforeigncurrencyareexpectedtooccuratvarious datesduringthecoming12months.Gainsandlossesrecognizedinothercomprehensiveincomeonforwardforeign exchangecontractsasofDecember31,2012willberecognizedintheconsolidatedincomestatementintheperiodor periodsduringwhichthehedgedforecastedtransactionsaffecttheconsolidatedincomestatement.

In2012,werecognizedanetamountofEUR8.7milliongain(2011:EUR58.1millionloss)intheconsolidatedincome statementresultingfromeffectivecashflowhedgesforforecastedsalesandpurchasetransactionsthatoccurredinthe year.Furthermore,werecognizedanamountofEUR3.0milliongainintheconsolidatedincomestatementresultingfrom derivativefinancialinstrumentsmeasuredatfairvaluethroughprofitorloss(2011:EUR38.3millionloss).

Interest rate swaps

ThenotionalprincipalamountsoftheoutstandinginterestrateswapcontractsasofDecember31,2012wereEUR 624.9million(2011:EUR641.5million).

Theothernon-currentassetsconsistofthefollowing:

As of December 31 (in thousands)	2012 EUR	2011 EUR
AdvancepaymentstoZeiss	183,025	187,950
Compensationplanassets1	12,080	10,577
SubordinatedloangrantedtolessorinrespectofVeldhovenheadquarters2	5,445	5,445
Other	6,350	7,086
Total other non-current assets	206,900	211,058

1 ForfurtherdetailsoncompensationplanassetsseeNote23.

2 ForfurtherdetailsonloangrantedtolessorinrespectofVeldhovenheadquartersseeNote8.

Zeissisoursolesupplierofmainopticalsystems(includinglenses).Thenon-currentpartofadvancepaymentstoZeiss mainlyrelatestopaymentsmadetosupporttheZeiss'investmentsinASML'sEUVprogram,whichareexpectedtobe repaidorsettledthroughEUVopticalmoduledeliveries.

Theothercurrentassetsconsistofthefollowing:

As of December 31	2012	2011
(in thousands)	EUR	EUR
AdvancepaymentstoZeiss	70,257	66,203
VAT	25,215	47,543
Prepaidexpenses	34,888	28,754
Otherreceivables	35,728	34,232
Total other current assets	166,088	176,732

Fromtimetotime,Zeissreceivesnon-interestbearingadvancepaymentsfromusthatassistinfinancingZeiss'work-inprocessandtherebysecurelensandopticalmoduledeliveriestous.Amountsowedundertheseadvancepaymentsare repaidorsettledthroughlensorEUVopticalmoduledeliveriesoverthefollowing12months.

Thecarryingamountoftheothernon-currentandcurrentassetsapproximatesthefairvalue.

15. Inventories

Inventoriesconsistofthefollowing:

As of December 31	2012	2011
(in thousands)	EUR	EUR
Rawmaterials	307,315	258,712
Work-in-process	1,074,042	1,026,872
Finishedproducts	742,979	532,556
Total inventories, gross	2,124,336	1,818,140
Provisionforobsolescenceand/orlowermarketvalue	(267,366)	(185,462)
Total inventories, net	1,856,970	1,632,678

Asummaryofactivityintheprovisionforobsolescenceand/orlowermarketvalueisasfollows:

As of December 31	2012	2011
(in thousands)	EUR	EUR
Balanceatbeginningofyear	(185,462)	(186,343)
Additionfortheyear	(138,962)	(60,300)
Effectofexchangerates	1,009	(883)
Releaseoftheprovision	-	7,915
Utilizationoftheprovision	56,049	54,149
Balance at end of year	(267,366)	(185,462)

In2012,theadditionfortheyearisrecordedincostofsalesforanamountofEUR133.3millionandR&Dcostsforan amountofEUR5.7million(2011:costofsalesEUR60.0millionandR&DcostsEUR0.3million).Additionfortheyear mainlyrelatestowritedownsasresultoftechnologicaldevelopmentsandinventorypartswhichbecameobsoleteand includesEUR43.5million(2011:EUR17.0million)withrespecttolowerofcostormarketadjustments.

ThecostofinventoriesrecognizedasexpenseandincludedincostofsalesamountedtoEUR1,873.5million(2011: EUR2,361.6million).

16. Accounts receivable

Accountsreceivableconsistofthefollowing:

As of December 31	2012	2011
(in thousands)	EUR	EUR
Accountsreceivable,gross	607,359	883,209
Allowancefordoubtfulreceivables	(2,071)	(2,582)
Accounts receivable, net	605,288	880,627

Thecarryingamountoftheaccountsreceivableapproximatesthefairvalue.ASMLperformsongoingcreditevaluations onitscustomers'financialcondition.ASMLperiodicallyreviewswhetheranallowanceforcreditlossesisneededby consideringfactorssuchashistoricalpaymentexperience,creditquality,agingaccountsreceivablesbalances,and currenteconomicconditionsthatmayaffectacustomer'sabilitytopay.

Themainpartofthecarryingvalueofaccountsreceivableconsistsofeurobalances.

Accountsreceivableareimpairedandprovidedforonanindividualbasis.AsofDecember31,2012,accountsreceivable ofEUR101.7million(2011:EUR66.8million)werepastduebutnotimpaired.Thesebalancesarestillconsideredtobe recoverablebecausetheyrelatetocustomersforwhomthereisnorecenthistoryofdefaultandtherehasnotbeena significantchangeincreditquality.Thetablebelowshowstheageinganalysisoftheaccountsreceivablethatareupto threemonthspastdueandoverthreemonthspastdue.Accountsreceivablearepastduewhenthepaymenttermhas expired.

As of December 31	2012	2011
(in thousands)	EUR	EUR
Uptothreemonthspastdue	96,104	41,118
Overthreemonthspastdue	5,584	25,729
Total past due	101,688	66,847

ASMLprovidedextendedpaymenttermstosomeofitscustomers.Theaveragedaysoutstandingdecreasedto47days in2012from57daysin2011.

Movementsintheallowancefordoubtfulreceivablesareasfollows:

Year ended December 31	2012	2011
(in thousands)	EUR	EUR
Balanceatbeginningofyear	(2,582)	(1,945)
Additionfortheyear1	(458)	(849)
Utilizationoftheprovision	969	212
Allowance for doubtful receivables	(2,071)	(2,582)

1 Additionfortheyearisrecordedincostofsales.

17. Cash and cash equivalents and short-term investments

CashandcashequivalentsatDecember31,2012includedepositswithhigh-ratedfinancialinstitutionsandthe DutchgovernmentofEUR775.6million(2011:EUR1,818.6million),investmentsinAAAm-ratedmoneymarketfunds thatinvestinhigh-rateddebtsecuritiesoffinancialinstitutionsandgovernmentsofEUR385.4million(2011:EUR 369.2million)andinterest-bearingbankaccountsofEUR606.6million(2011:EUR544.0million).Ourcashandcash equivalentsarepredominantlydenominatedineurosandpartlyinUSdollars.

Cashandcashequivalentshaveinsignificantinterestrateriskandremainingmaturitiesofthreemonthsorlessatthe dateofacquisition.Norestrictionsonusageofcashandcashequivalentsexist.Thecarryingamountoftheseassets approximatestheirfairvalue.

Short-terminvestmentshaveinsignificantinterestrateriskandremainingmaturitieslongerthanthreemonthsbutless thanoneyearatthedateofacquisition.

Short-terminvestments(classifiedasavailableforsalefinancialassets)consistofthefollowing:

As of December 31, 2012 (in thousands)	Cost basis	Unrealized Gains	Unrealized Losses	Recorded Basis
DutchTreasuryCertificates	279,988	-	-	279,988
Deposits	650,017	-	-	650,017
Total	930,005	-	-	930,005

Wehadnoshort-terminvestmentsasofDecember31,2011.

18. Equity

Share Capital

ASML'sauthorizedsharecapitalamountstoEUR126,000,000andisdividedinto:

• 700,000,000cumulativepreferenceshareswithanominalvalueofEUR0.09each;
• 699,999,000ordinaryshareswithanominalvalueofEUR0.09each;and
• 9,000ordinarysharesBwithanominalvalueofEUR0.01each.

PerDecember31,2012,419,852,467ordinaryshareswithanominalvalueofEUR0.09eachwereissuedandfullypaid in,ofwhich12,687,246ordinarysharesareheldbyusintreasury.NoordinarysharesBandnocumulativepreference sharesareissued.96,566,077depositaryreceiptsforordinarysharesareissuedwithourcooperation.

OurBoardofManagementhasthepowertoissueordinarysharesandcumulativepreferencesharesinsofarasthe BoardofManagementhasbeenauthorizedtodosobytheGeneralMeetingofShareholders(eitherbymeansofa resolutionorbyanamendmenttoourArticlesofAssociation).TheBoardofManagementrequiresapprovalofthe SupervisoryBoardforsuchanissue.TheauthorizationbytheGeneralMeetingcanonlybegrantedforacertain periodnotexceedingfiveyearsandmaybeextendedfornolongerthanfiveyearsoneachoccasion.Incasethe GeneralMeetingofShareholdershasnotauthorizedtheBoardofManagementtoissueshares,theGeneralMeetingof ShareholdersshallhavethepowertoissuesharesupontheproposaloftheBoardofManagement,providedthatthe SupervisoryBoardhasapprovedsuchproposal.

Shares issued in Customer Co-Investment Program

OnSeptember12,2012,weissued62,977,877ordinarysharestoStichtingAdministratiekantoorMAKTSJAB("Intel Stichting")and12,595,575ordinarysharestoStichtingAdministratiekantoorSamsungandonOctober31,2012,ASML issued20,992,625ordinarysharestoStichtingAdministratiekantoorTSMCwithrespecttotheCustomerCo-Investment Program.WereceivedanamountofEUR3,853.9millioninrelationtothesharesissuedundertheCustomerCo-InvestmentProgram.ForfurtherdetailsonourCustomerCo-InvestmentProgramseeNote35.

Synthetic Share Buyback

AttheExtraordinaryGeneralMeetingofShareholders("EGM")heldonSeptember7,2012,severalchangesin theArticlesofAssociationofASMLwereadopted,inconnectionwiththeSyntheticShareBuybackeffectuatedin connectionwiththeCustomerCo-InvestmentProgram.Consequently,onNovember24,2012theArticlesofAssociation wereamendedasfollows.Uponthefirstamendmenttheordinarysharestobeheldforthebenefitoftheparticipants totheCustomerCo-InvestmentProgramwereconvertedintoordinarysharesMandallotherordinaryshareswere convertedintoordinarysharesA.UponthesecondamendmenttheparvalueperordinaryshareAwasincreasedfrom EUR0.09toEUR9.24attheexpenseofthesharepremiumreserve.Uponthethirdamendment,thenominalvalueper ordinaryshareAwasreducedtoanamountofEUR0.06,bydecreasingthenominalvalueperordinaryshareAbyan amountofEUR9.18,whichresultedinarepaymentofthesameamountpersharetoholdersofordinarysharesinto whichtheordinarysharesAwereconverted.Thefourthamendmentprovidedfortheconsolidationoftheordinaryshares Athroughtheexchangeofeach100ordinarysharesfor77ordinaryshares,resultinginanincreaseofthenominalvalue perordinarysharefromEUR0.06toEUR0.09,wherebytheaggregatedifferenceisbookedattheexpenseoftheshare premiumreserve.ThefifthandlastamendmentprovidedforthedeletionoftheshareclassMforparticipantstothe CustomerCo-InvestmentProgramandtheshareclassAfortheothershareholders.TheordinarysharesMandAwere convertedthereafterintoordinaryshareswithoutaspecificlettermarkattachedtoit.

TheseamendmentsinsubstanceconstituteaSyntheticShareBuybackinwhichweeffectivelyrepurchased93,411,216 sharesatanaveragepriceofEUR39.91foratotalamountofEUR3,728.3million.ThedifferenceofEUR125.6million betweenthecapitalrepaymentofEUR3,728.3millionandthenetproceedsfromissuanceofsharesofEUR3,853.9 millionrelatestothecapitalrepaymentonASML'streasuryshareswhichwasalsopartoftheSyntheticShareBuyback.

Ordinary shares

Eachordinaryshareconsistsof900fractionalshares.Fractionalsharesentitletheholderthereoftoafractionaldividend butdonotentitletheholderthereoftovotingrights.Onlythosepersonswhoholdsharesdirectlyintheshareregister intheNetherlands,heldbyusatouraddressat5504DRVeldhoven,deRun6501,theNetherlands,orintheNewYork shareregister,heldbyJPMorganChaseBank,N.A.,P.O.Box64506,St.Paul,MN55164-0506,UnitedStates,can holdfractionalshares.PersonswhoholdordinarysharesthroughthedepositsystemundertheDutchSecuritiesBank GiroTransactionsAct(Wet giraal effectenverkeer;the"GiroAct")maintainedbytheDutchcentralsecuritiesdepository (Nederlands Centraal Insituut voor Giraal Effectenverkeer B.V.,"EuroclearNederland")orthroughtheDepositaryTrust Company("DTC")cannotholdfractionalshares.Anordinaryshareentitlestheholderthereoftocastninevotesinthe GeneralMeetingofShareholders.AtourEGMheldonSeptember7,2012,theBoardofManagementwasauthorized fromSeptember7,2012throughOctober25,2013,subjecttotheapprovaloftheSupervisoryBoard,toissueshares and/orrightstheretorepresentinguptoamaximumof5.0percentofourissuedsharecapitalatApril25,2012,plus anadditional5.0percentofourissuedsharecapitalatApril25,2012thatmaybeissuedinconnectionwithmergers, acquisitionsand/or(strategic)alliances.

HoldersofASML'sordinaryshareshaveapreemptiverightofsubscription,inproportiontotheaggregatenominal amountoftheordinarysharesheldbythem,toanyissuanceofordinarysharesforcash,whichrightmayberestricted orexcluded.Ordinaryshareholdershavenoproratapreemptiverightofsubscriptiontoanyordinarysharesissuedfor considerationotherthancashorordinarysharesissuedtoemployees.IfauthorizedforthispurposebytheGeneral MeetingofShareholders(eitherbymeansofaresolutionorbyanamendmenttoourArticlesofAssociation),theBoard ofManagementhasthepowersubjecttoapprovaloftheSupervisoryBoard,torestrictorexcludethepreemptiverights ofholdersofordinaryshares.AtourEGMheldonSeptember7,2012,theBoardofManagementwasauthorizedfrom September7,2012throughOctober25,2013,subjecttoapprovaloftheSupervisoryBoard,torestrictorexclude preemptiverightsofholdersofordinarysharesuptoamaximumof10.0percentofourissuedsharecapitalatApril25, 2012.Withthisauthorization,thecorrespondingauthorizationgrantedattheAnnualGeneralMeetingofShareholders ("AGM")heldonApril25,2012,ceasedtoapplytotheextentnotalreadyused.

Wemayrepurchaseourissuedordinarysharesatanytime,subjecttocompliancewiththerequirementsofDutchlaw andourArticlesofAssociation.AnysuchrepurchasesareandremainsubjecttotheapprovaloftheSupervisoryBoard andtheauthorizationofshareholdersatASML'sAGM,whichauthorizationmaynotbeformorethan18months.Atthe AGMheldonApril25,2012,theBoardofManagementhasbeenauthorized,subjecttoSupervisoryBoardapproval,to repurchasethroughOctober25,2013,uptoamaximumoftwotimes10.0percentofourissuedsharecapitalatApril 25,2012,atapricebetweenthenominalvalueoftheordinarysharespurchasedand110.0percentofthemarketprice ofthesesecuritiesonNYSEEuronextAmsterdamorNASDAQ.AtourAGMtobeheldonApril24,2013,weshallrequest theauthorizationfortheBoardofManagementtorepurchaseandcancelsharesforaperiodof18monthsasofthe 2013AGM,i.e.untilOctober24,2014,allinconformitywiththeprovisionsofthelawandourArticlesofAssociation.

Ordinary shares B

AspartofthemostrecentchangesinourArticlesofAssociation,adoptedattheEGMheldonSeptember7,2012, the9,000ordinarysharesBwithanominalvalueofEUR0.01wereintroduced.Apersonwhoholds(amultipleof)100 fractionalshares,mayexchangethosefractionalsharesforanordinaryshareB.EveryholderofanordinaryshareBis entitledtoone-ninth(1/9)ofadividend.EachordinaryshareBentitlestheholderthereoftocastonevoteattheGeneral Meeting.

Cumulative preference shares

In1998,wegrantedtothepreferencesharefoundation,"StichtingPreferenteAandelenASML"(the"Foundation")an optiontoacquirecumulativepreferencesharesinourcapital(the"PreferenceShareOption").Thisoptionwasamended andextendedin2003and2007.AthirdamendmenttotheoptionagreementbetweentheFoundationandASML becameeffectiveonJanuary1,2009,toclarifytheprocedurefortherepurchaseandcancellationofthepreference shareswhenissued.

PertheamendmentofourArticlesofAssociationofMay6,2011,thenominalvalueofthecumulativepreferenceshares wasincreasedtoEUR0.09.Thenumberofcumulativepreferencesharesincludedintheauthorizedsharecapitalwas decreasedto700,000,000.ThiswasdonetosimplifytheArticlesofAssociation,andtogiveeachsharetherighttocast onevoteintheGeneralMeetingofShareholders.

TheFoundationmayexercisethepreferenceshareoptioninsituationswhere,intheopinionoftheBoardofDirectors oftheFoundation,ourinterests,ourbusinessortheinterestsofourstakeholdersareatstake.Thismaybethecase ifapublicbidforourshareshasbeenannouncedorhasbeenmade,orthejustifiedexpectationexiststhatsucha bidwillbemadewithoutanyagreementhavingbeenreachedinrelationtosuchabidwithus.Thesamemayapplyif oneshareholder,ormoreshareholdersactinginconcert,holdasubstantialpercentageofourissuedordinaryshares withoutmakinganofferorif,intheopinionoftheBoardofDirectorsoftheFoundation,the(attempted)exerciseofthe votingrightsbyoneshareholderormoreshareholders,actinginconcert,ismateriallyinconflictwithourinterests,our businessorourstakeholders.

TheobjectivesoftheFoundationaretolookaftertheinterestsofASMLandoftheenterprisesmaintainedbyASML andofthecompanieswhichareaffiliatedinagroupwithASML,insuchawaythattheinterestsofASML,ofthose enterprisesandofallpartiesconcernedaresafeguardedinthebestpossibleway,andinfluencesinconflictwiththese interestswhichmightaffecttheindependenceortheidentityofASMLandthosecompaniesaredeterredtothebest oftheFoundation'sability,andeverythingrelatedtotheaboveorpossiblyconducivethereto.TheFoundationseeksto realizeitsobjectsbytheacquiringandholdingofcumulativepreferencesharesinthecapitalofASMLandbyexercising therightsattachedtotheseshares,particularlythevotingrightsattachedtotheseshares.

ThepreferenceshareoptiongivestheFoundationtherighttoacquireanumberofcumulativepreferencesharesasthe Foundationwillrequire,providedthattheaggregatenominalvalueofsuchnumberofcumulativepreferenceshares shallnotexceedtheaggregatenominalvalueoftheordinarysharesthathavebeenissuedatthetimeofexerciseofthe PreferenceShareOptionforasubscriptionpriceequaltotheirnominalvalue.Onlyone-fourthofthesubscriptionprice ispayableatthetimeofinitialissuanceofthecumulativepreferenceshares,withtheotherthree-fourthsofthenominal valueonlybeingpayablewhenwecallupthisamount.Exerciseofthepreferenceshareoptioncouldeffectivelydilute thevotingpoweroftheoutstandingordinarysharesbyone-half.

CancellationandrepaymentoftheissuedcumulativepreferencesharesbyusrequirestheauthorizationbytheGeneral MeetingofShareholdersofaproposaltodosobytheBoardofManagementapprovedbytheSupervisoryBoard.If thepreferenceshareoptionisexercisedandasaresultcumulativepreferencesharesareissued,we,attherequestof theFoundation,willinitiatetherepurchaseorcancellationofallcumulativepreferencesharesheldbytheFoundation. Inthatcaseweareobligedtoeffecttherepurchaseandcancellationrespectivelyassoonaspossible.Acancellation willhaveasaresultarepaymentoftheamountpaidandexemptionfromtheobligationtopayuponthecumulative preferenceshares.Arepurchaseofthecumulativepreferencesharescanonlytakeplacewhensuchsharesarefully paidup.

IftheFoundationwillnotrequestustorepurchaseorcancelallcumulativepreferencesharesheldbytheFoundation within20monthsafterissuanceoftheseshares,wewillbeobligedtoconveneaGeneralMeetingofShareholdersin ordertodecideonarepurchaseorcancellationoftheseshares.

TheFoundationisindependentofASML.TheBoardofDirectorsoftheFoundationcomprisesfourindependentvoting membersfromtheDutchbusinessandacademiccommunities.AsofJanuary1,2012,themembersoftheBoardof DirectorsoftheFoundationare:Mr.A.Baan,Mr.M.W.denBoogert,Mr.J.M.deJongandMr.A.H.Lundqvist.

Other reserves

Changesinotherreservesduring2012and2011wereasfollows:

(in thousands)	Hedging reserve EUR	Currency translation reserve EUR	Reserve for capitalized development expenditures EUR	Total EUR
Balance at January 1, 2011	(44,369)	(88,640)	263,387	130,378
Components of statement of comprehensive income:
Foreign currency translation, net of taxes:
Gain(Loss)onthehedgeofanetinvestment	-	(1,829)	-	(1,829)
Gain(Loss)ontranslationofforeignoperations	-	(12,142)	-	(12,142)
Financial instruments, net of taxes:
Gain(Loss)onderivativefinancialinstruments	(4,610)	-	-	(4,610)
Transferstonetincome	51,963	-	-	51,963
Development expenditures	-	-	(4,721)	(4,721)
Currency translation on development expenditures	-	(956)	956	-
Balance at December 31, 2011	2,984	(103,567)	259,622	159,039
Components of statement of comprehensive income: Foreign currency translation:
Gain(Loss)ontranslationofforeignoperations	-	5,927	-	5,927
Financial instruments, net of taxes:
Gain(Loss)onderivativefinancialinstruments	214	-	-	214
Transferstonetincome	(7,761)	-	-	(7,761)
Development expenditures	-	-	192,482	192,482
Currency translation on development expenditures	-	1,119	(1,119)	-
Balance at December 31, 2012	(4,563)	(96,521)	450,985	349,901

Exchangeratedifferencesrelatingtothetranslationfromourforeignsubsidiariesintoeuroarerecognizedinthe currencytranslationreserve.Gainsandlossesonhedginginstrumentsthataredesignatedashedgesofnetinvestments inforeignoperationsareincludedinthecurrencytranslationreserve.

Hedgingreserverepresentshedginggainsandlossesontheeffectiveportionofcashflowhedges.Thecumulativegain orlossonthehedgeisrecognizedinnetincome(loss)whenthehedgetransactionimpactsnetincome(loss).

ASMLisacompanyincorporatedunderDutchLaw.InaccordancewiththeDutchCivilCode,otherreservesconsistof legalreservesthathavetobeestablishedincertaincircumstances.Thelegalreservesconsistofthehedgingreserve, thecurrencytranslationreserveandthereserveforcapitalizeddevelopmentexpenditures.Legalreservesarenotfor distributiontoourshareholders.Ifthecurrencytranslationreserveorthehedgingreservehasanegativebalance, distributionstoourshareholdersarerestrictedtotheextentofthenegativebalance.

Appropriation of net income

Aspartofourfinancingpolicy,weaimtopayanannualdividendthatwillbestableorgrowingovertime.Annually,the BoardofManagementwill,uponpriorapprovalfromtheSupervisoryBoard,submitaproposaltotheAGMwithrespect totheamountofdividendtobedeclaredwithrespecttotheprioryear.Thedividendproposalinanygivenyearwillbe subjecttotheavailabilityofdistributableprofitsorretainedearningsandmaybeaffectedby,amongotherfactors,the BoardofManagement'sviewsonourpotentialfutureliquidityrequirements,includingforinvestmentsinproduction capacity,thefundingofourresearchanddevelopmentprogramsandforacquisitionopportunitiesthatmayarisefrom timetotime;andbyfuturechangesinapplicableincometaxandcorporatelaws.Accordingly,itmaybedecidedto proposenottopayadividendortopayalowerdividendwithrespecttoanyparticularyearinthefuture.

For2012,aproposaltodeclareadividendofEUR0.53perordinaryshareofEUR0.09nominalvaluewillbesubmitted totheAGMtobeheldonApril24,2013.

Dividendsonordinarysharesarepayableoutofnetincomeorretainedearningsasshowninourfinancialstatementsas adoptedbyourGeneralMeetingofShareholders,afterpaymentfirstof(accumulated)dividendsoutofnetincomeon anyissuedcumulativepreferenceshares.

Share buyback programs

Inadditiontodividendpayments,weintendtoreturncashtoourshareholdersonaregularbasisthroughshare buybacksorcapitalrepayment,subjecttoouractualandanticipatedlevelofliquidityrequirements,ourcurrentshare price,othermarketconditionsandotherrelevantfactors.

OnApril25,2012,theGeneralMeetingofShareholdersauthorizedtherepurchaseofuptoamaximumoftwotimes10.0 percentofourissuedsharecapitalasofthedateofauthorizationthroughOctober25,2013.

OnJanuary19,2011,weannouncedourintentiontorepurchaseuptoEUR1.0billionofourownshareswithinthe nexttwoyears.OnJanuary18,2012,weannouncedtoincreasethesizeoftheprogramtoamaximumamountofEUR 1,130million.DuringtheperiodfromJanuary1,2012uptoandincludingNovember22,2012,whentheprogramwas completed,wehadpurchased11,278,058ofoursharesforatotalamountofEUR430.0millionatanaveragepriceof EUR38.13pershare.Thesesharesareintendedtobecancelledin2013.

Furthermore,onJanuary18,2012,weannouncedourintentiontopurchaseupto2.2millionofadditionalsharesduring 2012forthepurposeofcoveringoutstandingemployeestockandstockoptionplans.DuringtheperiodfromNovember 22,2012uptoandincludingDecember14,2012,whentheprogramwascompleted,atotalnumberof2.2millionshares waspurchasedforatotalamountofEUR105.2millionatanaveragepriceofEUR47.81pershare.Theseshareswillbe heldastreasurysharespendingdeliverypursuanttosuchplans.

BothprogramshadbeensuspendedbetweenJuly10,2012andOctober18,2012followingtheannouncementofthe CustomerCo-InvestmentProgramonJuly9,2012.

Period	Total number of shares purchased	Average price paid per Share (EUR)	Total number of shares purchased as part of publicly announced plans or programs	Maximum value of shares that may yet be purchased under the program1 (EUR)	Maximum number of shares that may yet be purchased under the program2
January20-31,2012	2,132,366	32.65	2,132,366	360,369,363	2,200,000
February1-28,2012	1,025,407	34.71	3,157,773	324,780,615	2,200,000
March1-31,2012	949,726	35.76	4,107,499	290,820,741	2,200,000
April1-30,2012	654,169	37.18	4,761,668	266,501,698	2,200,000
May2-31,2012	1,219,480	36.88	5,981,148	221,530,029	2,200,000
June1-30,2012	1,133,550	38.61	7,114,698	177,764,616	2,200,000
July1-29,2012	428,000	40.65	7,542,698	160,366,940	2,200,000
August1-31,2012	-	-	7,542,698	160,366,940	2,200,000
September1-30,2012	-	-	7,542,698	160,366,940	2,200,000
October3-31,2012	1,153,112	41.86	8,695,810	112,099,413	2,200,000
November1-30,2012	3,240,099	44.10	11,935,909	-	1,542,149
December1-31,2012	1,542,149	48.24	13,478,058	-	-
Total	13,478,058	39.71

Thefollowingtableprovidesasummaryofourrepurchasedsharesin2012(excludingtheSyntheticShareBuyback effectuatedinNovember2012):

1 ProgramtopurchasesharesuptoamaximumamountofEUR1,130million.Wehaveorwillcanceltheseshares

2 Programtopurchaseupto2.2millionsharesforthepurposeofcoveringoutstandingemployeestockandstockoptionplans

AttheEGMheldonSeptember7,2012,aresolutionwaspassedtoamendtheArticlesofAssociationinconnectionwith theSyntheticShareBuybacktobeeffectedinconnectionwiththeCustomerCo-InvestmentProgram.OnNovember24, 2012,weeffectuatedtheamendmentsconsistingofarepaymenttoshareholders(excludingparticipatingcustomers)of EUR9.18perordinaryshareandtheexchangeofeach100ASMLordinarysharesfor77ASMLordinaryshares.

Asaresultoftheseamendments,whichinsubstanceconstituteaSyntheticShareBuyback,weeffectivelyrepurchased 93,411,216sharesatanaveragepriceofEUR39.91foratotalamountofEUR3,728.3million.

19. Long-term debt

Thelong-termdebtconsistsofthefollowing:

As of December 31 (in thousands)	2012 EUR	2011 EUR
Eurobond,carryingamount	707,107	691,959
Loanheadquarterbuilding1	32,366	33,795
Other	17,029	6,955
Long-term debt	756,502	732,709
Less:currentportionoflongtermdebt	3,610	2,587
Non-current portion of long term debt	752,892	730,122

1 ThisloanrelatestoourSpecialPurposeEntity,seeNote8.

OurobligationstomakeprincipalrepaymentsundertheEurobondandotherborrowingarrangementsexcludinginterest expenseasofDecember31,2012,forthenextfiveyearsandthereafter,areasfollows:

EUR	(in thousands)
3,610	2013
3,535	2014
3,535	2015
3,535	2016
603,535	2017
31,644	Thereafter
649,394	Long-term debt
3,610	Less:currentportionoflong-termdebt
645,784	Non-current portion of long-term debt

Eurobond

ThefollowingtablesummarizesthecarryingamountofouroutstandingEurobond,includingtransactioncostsandthe fairvalueofinterestrateswapsusedtohedgethechangeinthefairvalueoftheEurobond:

2012	As of December 31
EUR	(in thousands)
	Eurobond
597,012	Principalamount1
110,095	Fairvaluehedgeadjustment2
707,107	Total

1 Theprincipalamountisadjustedfortransactioncosts.

2 Thefairvalueoftheinterestrateswapsexcludesaccruedinterest.

InJune2007,wecompletedanofferingofEUR600.0millionprincipalamountofour5.75percentnotesdue2017,with interestpayableannuallyonJune13.ThenotesareredeemableattheoptionofASML,inwholeorinpart,atanytime bypayingamakewholepremium,andunlesspreviouslyredeemed,willberedeemedat100percentoftheirprincipal amountonJune13,2017.

TheEurobondservesasahedgediteminafairvaluehedgerelationshipinwhichwehedgethevariabilityofchangesin thefairvalueofourEurobondduetochangesinmarketinterestrateswithinterestrateswaps.Thefairvaluechanges oftheseinterestrateswapsarerecordedontheconsolidatedstatementoffinancialpositionunderderivativefinancial instrumentsandthecarryingamountoftheEurobondisadjustedforthesefairvaluechangesonly.

ThefollowingtablesummarizesamongstotherstheestimatedfairvalueoftheEurobond:

	2011
	EUR
	600,000
707,107	691,959
700,644	640,500
	2012 EUR 600,000

1 Source:BloombergFinanceLP

ThefairvalueofourEurobondisestimatedbasedonquotedmarketpricesasofDecember31,2012.Thefairvalueof theEurobondishigherthantheprincipalamountasaresultoflowermarketinterestratescomparedtothefixed5.75 percentcouponrateoftheEurobond.

20. Lines of credit

OuravailablecreditfacilitiesamounttoEUR500.0millionasofDecember31,2012andasofDecember31,2011. TheamountatDecember31,2012consistsofoneEUR500.0millioncommittedrevolvingcreditfacilityfromagroup ofbanksthatwillmaturein2015.Thecreditfacilitycontainsarestrictivecovenantthatrequiresustomaintaina minimumcommittedcapitaltonettotalassetsratioof40.0percentcalculatedinaccordancewithcontractually agreeddefinitions.AsofDecember31,2012andDecember31,2011,thisratiowas85.8percentand87.7percent, respectively.Therefore,weareincompliancewiththecovenantattheendof2012and2011.Outstandingamounts underthiscreditfacilitywillbearinterestatEURIBORorLIBORplusamarginthatdependsonourliquidityposition.No amountswereoutstandingunderthiscreditfacilityattheendof2012and2011.

21. Provisions

Themovementintheprovisionforonerouscontractsisasfollows:

2011	2012
EUR	EUR	(in thousands)
14,061	12,338	Balance,January1
(2,452)	(2,545)	Utilizationoftheprovision
421	628	Unwindingofdiscount
308	(167)	Effectofexchangerates
12,338	10,254	Provision for lease contract termination costs
2,326	2,280	Less:currentportionofprovisionforleasecontractterminationcosts
10,012	7,974	Non-current portion of provision for lease contract termination costs

Theprovisionforonerouscontractsrelatestoanoperatingleasecontractforabuildingforwhichnoeconomicbenefits areexpected.Theprovisionforonerouscontractsisexpectedtobeutilizedby2017.

22. Accrued and other liabilities

Accruedandotherliabilitiesconsistofthefollowing:

As of December 31	2012	2011
(in thousands)	EUR	EUR
Deferredrevenue	739,136	816,045
Coststobepaid	278,066	260,651
Downpaymentsfromcustomers	1,033,768	1,057,046
Personnelrelateditems	200,670	212,059
Standardwarrantyreserve	21,626	43,273
Other	1,352	2,312
Total accrued and other liabilities	2,274,618	2,391,386
Less:non-currentportionofaccruedandotherliabilities1	401,109	659,889
Current portion of accrued and other liabilities	1,873,509	1,731,497

1 Themainpartofthenon-currentportionofaccruedandotherliabilitiesrelatestodownpaymentsreceivedfromcustomersregardingfutureshipments ofEUVsystems.

Thedecreaseinaccruedandotherliabilitiesmainlyrelatestothedecreaseindeferredrevenueandstandardwarranty reserve.

Deferredrevenuemainlyconsistsofprepaidextendedandenhanced(optic)warrantycontractsandawardcredits regardingfreeordiscountedproductsorservices.Thedecreaseindeferredrevenueismainlycausedbyproduct deliveriesin2012thatweredeferredasofDecember31,2011includingoneNXE:3100systemofwhichrevenueswere deferredforanamountofEUR48.6millionasofDecember31,2011.

Thedeferredrevenuebalancefromextendedandenhanced(optic)warrantycontractsasofDecember31,2012, amountedtoEUR242.2million(2011:EUR280.1million).

ThedeferredrevenuebalancefrominstallationandtrainingservicesasofDecember31,2012amountedtoEUR4.0 million(2011:EUR1.8million)andEUR12.4million(2011:EUR11.9million),respectively.

Coststobepaidmainlyrelatetoaccruedcostforunbilledservicesprovidedbysuppliersincludingcontractedlabor, outsourcedservicesandconsultancy.

WereceiveadvancesfromcustomerspriortoshipmentforsystemsincludedinASML'scurrentproductportfolioor systemscurrentlyunderdevelopmentintheformofdownpayments.

Personnelrelateditemsmainlyconsistofaccruedmanagementbonuses,accruedprofitsharing,accruedvacationdays, accruedvacationallowance,accruedwagetax,socialsecuritiesandaccruedpensionpremiums.

Changesinstandardwarrantyreservefortheyears2012and2011areasfollows:

	2012	2011
(in thousands)	EUR	EUR
Balance,January1	43,273	37,965
Additionsoftheyear	35,735	61,279
Utilizationofthereserve	(33,746)	(26,968)
Releaseofthereserve	(22,733)	(29,415)
Effectofexchangerates	(903)	412
Standard warranty reserve	21,626	43,273

Thereleaseofthereserveisduetoachangeinaccountingestimatebasedonlowerthanexpectedhistoricalwarranty expensesasaresultofanimprovedlearning-curveconcerningASML'ssystems.Thereleasehasbeenincludedincost ofsales.

23. Employee benefits

Bonus plan

Ourbonusexpensesforallparticipantsofallbonusplanswere:

Year ended December 31	2012	2011
(in thousands)	EUR	EUR
Bonusexpenses	16,474

BonusexpensesincludeanamountofEUR1.8million(2011:EUR1.7million)inrelationtotheshort-termincentive ("STI")cashbonusfortheBoardofManagement(werefertoNote30)andEUR0.1million(2011:EUR0.7million)in relationtotheBrionretentionbonusplan.

ASMLhasaperformancerelatedbonusplanforseniormanagement,whoarenotmembersoftheBoardof Management.Underthisplan,thebonusamountisdependentonactualperformanceagainstcorporate,departmental andpersonaltargets.Thebonusformembersofseniormanagementcanrangebetween0.0percentand40.0percent, or0.0percentand70.0percent,oftheirannualsalaries,dependingupontheirseniority.Theperformancetargetsareset foreachhalfyear.Thebonusofthefirsthalfof2012waspaidinthesecondhalfof2012.Thebonusofthesecondhalf isaccruedforintheconsolidatedstatementoffinancialpositionasofDecember31,2012andisexpectedtobepaidin thefirstquarterof2013.

Ourbonusexpensesunderthisplanwere:

Year ended December 31	2012	2011
(in thousands)	EUR	EUR
Bonusexpenses	14,588	13,131

Profit-sharing plan

ASMLhasaprofit-sharingplancoveringallEuropeanandUSnon-salesemployeeswhoarenotmembersoftheBoard ofManagementorseniormanagement.Undertheplan,eligibleemployeesreceiveanannualprofit-sharing,basedon apercentageofnetincomerelativetosalesrangingfrom0.0to20.0percentofannualsalary.Theprofitsharingforthe years2012and2011was18.0percentorEUR64.5millionand20.0percentorEUR64.0million,respectively.Ourprofit isalsooneofthecriteriafortheindividualvariablepayprogramsforemployeesinAsiaandemployeeseligibletothe salesrewardplanwhichamounttoEUR24.4millionfor2012(includingEUR2.6millionforthesalesrewardplan)and EUR23.2millionfor2011.

Share-based compensation

Wehaveadoptedvariousshare(option)plansforouremployees.Eachyear,theBoardofManagementdetermines,by categoryofASMLpersonnel,thetotalavailablenumberofstockoptionsandmaximumnumberofsharesthatcanbe grantedinthatyear.ThedeterminationissubjecttotheapprovalofourSupervisoryBoard.FormembersoftheBoard ofManagementASMLhasseparateshare-basedpaymentplans,fordetailsonserviceandvestingconditionsseebelow andforadditionalinformationseeNote30.Ourcurrentshare-basedpaymentplansdonotprovidecashsettlementof optionsandshares.

Thetotalgrossamountofrecognizedcompensationexpensesassociatedwithshare-basedpayments(includingsharebasedpaymentstotheBoardofManagement)wasEUR18.7millionin2012andEUR12.4millionin2011.Thetax benefitrecognizedrelatedtotherecognizedexpensesamountstoEUR0.5millionin2012andEUR0.3millionin2011.

Totalcompensationexpensesrelatedtonon-vestedawardstoberecognizedinfutureperiodsamounttoEUR30.4 millionasperDecember31,2012(2011:EUR23.3million).Theweightedaverageperiodoverwhichthesecostsare expectedtoberecognizediscalculatedat2.0years(2011:1.9years).

Option plans

OptionsgrantedunderASML'sstockoptionplanshavefixedexercisepricesequaltotheclosingpriceofourordinary sharesonNYSEEuronextAmsterdamorNASDAQontheapplicablegrant-dates.Grantedstockoptionsgenerallyvest overathree-yearperiodwithanyunexercisedstockoptionsexpiringtenyearsafterthegrant-date.

ASMLhasfivedifferentstockoptionplans:

• Employeeplan
• Optionpurchaseplan
• Brionstockoptionplan
• Seniormanagementplan
• Stockoptionextensionplan

TheOptionpurchaseplanandStockoptionextensionplanhavenoserviceandvestingconditions.Theotherplans typicallyhaveathreetofouryearservicecondition.FurthermoreseniormanagementandBoardofManagementplans havevestingconditionsbasedonperformance.ThefairvalueofthestockoptionsisdeterminedusingaBlack-Scholes optionvaluationmodel.

TheBlack-Scholesoptionvaluationofourstockoptionsisbasedonthefollowingassumptions:

Year ended December 31	2012	2011
Weightedaverageshareprice(inEUR)	40.3	28.0
Volatility(inpercentage)	25.6	37.8
Expectedlife(inyears)	5.0	4.8
Riskfreeinterestrate	2.1	2.9
Expecteddividendyield(inEUR)	1.45	1.25
Forfeiturerate1	-	-

1 AsofyearendforeachofthetwoyearsendedDecember312012and2011,forfeituresareestimatedtobenil.

Whenestablishingtheexpectedlifeassumptionweannuallytakeintoaccountthecontractualtermsofthestock optionsaswellashistoricalemployeeexercisebehavior.

Otherdetailswithrespecttostockoptionsaresetoutinthefollowingtable:

	EUR USD denominated		denominated
Year ended December 31	2012	2011	2012	2011
Weightedaveragefairvalueofstockoptionsgranted	8.97	8.28	11.87	10.42
Weightedaveragesharepriceattheexercisedateofstockoptions	40.45	29.39	50.88	41.94
Aggregateintrinsicvalueofstockoptionsexercised(inthousands)	71,331	30,204	12,684	11,323
Aggregateremainingcontractualtermofcurrentlyexercisableoptions(years)	3.59	2.08	3.17	1.80
Aggregateintrinsicvalueofexercisablestockoptions(inthousands)	34,438	39,384	21,882	20,492
Aggregateintrinsicvalueofoutstandingstockoptions(inthousands)	35,671	45,141	22,433	20,791

ThenumberandweightedaverageexercisepricesofstockoptionsasofDecember31,2012,andchangesduringthe yearthenendedarepresentedbelow:

	EUR-denominated		USD-denominated
	Number of options	Weighted average exercise price per ordinary share (EUR)	Number of options	Weighted average exercise price per ordinary share (USD)
Outstanding,January1,2012	5,133,659	24.48	1,792,305	34.01
Granted	32,240	39.52	11,041	51.79
Exercised	(2,928,641)	16.07	(362,071)	15.87
Forfeited	(5,530)	18.22	(350)	33.75
Expired	(1,103,566)	55.45	(946,089)	48.98
Outstanding, December 31, 2012	1,128,162	16.38	494,836	19.06
Exercisable,December31,2012	1,060,262	15.52	472,586	18.09

Detailswithrespecttothestockoptionsoutstandingaresetoutinthefollowingtable:

	EUR-denominated			USD-denominated
Range of exercise prices (EUR)	Number of outstanding options at December 31, 2012	Weighted average remaining contractual life of outstanding options (years)	Range of exercise prices (USD)	Number of outstanding options at December 31, 2012	Weighted average remaining contractual life of outstanding options (years)
0-10	-	-	0-10	55,260	2.75
10-15	602,473	3.00	10-15	230,215	1.64
15-20	292,093	3.91	15-20	5,424	5.80
20-25	176,120	5.18	20-25	101,697	4.49
25-40	30,422	8.77	25-40	90,116	6.16
40-50	27,054	9.79	40-50	2,077	8.66
50-60	-	-	50-60	10,047	9.70
Total	1,128,162	3.89	Total	494,836	3.41

In2012and2011onlyrepurchasedshareswereusedtosatisfytheoptionrightsuponexercise.Formoreinformation withrespecttorepurchasedshareswerefertoNote18.

Share plans

SharesgrantedunderASML'sshareplansincludeathreetofouryearserviceperiodandforsomeplansperformance conditions.ThefairvalueofsharesisdeterminedbasedontheclosingtradingpriceofoursharesonNYSEEuronext AmsterdamorNASDAQonthegrantdate.

ASMLhassixdifferentshareplans:

• Employeeplan
• Sharepurchaseplan
• Newhireperformanceshareplan
• Brionperformanceshareplan
• Seniormanagementplan
• Boardofmanagementperformanceshareplan(seenote30)

TheSharepurchaseplanhasnoserviceandvestingconditions.Theemployeeplanhasonlyserviceconditions.The otherplanshaveserviceconditionswhicharesimilarandhavevestingconditionswhicharebasedonperformance.

Detailswithrespecttosharesaresetoutinthefollowingtable:

	EUR denominated				USD denominated
Year ended December 31	2012	2011	2012	2011
Totalfairvalueatvestingdateofsharesvestedduringtheyear(inthousands)	16,179	9,155	5,392	1,956
Weightedaveragefairvalueofsharesgranted	36.15	28.09	47.71	39.00

AsummaryofthestatusofconditionallyoutstandingsharesasofDecember31,2012,andchangesduringtheyear endedDecember31,2012,ispresentedbelow:

	EUR-denominated		USD-denominated
	Number of shares	Weighted average fair value at grant	date (EUR) Number of shares	Weighted average fair value at grant date (USD)
Conditional shares outstanding at January 1, 2012	1,479,297	24.19	264,891	32.35
Granted	678,505	36.15	110,465	47.71
Vested/Issued	(421,902)	20.88	(106,500)	31.05
Forfeited	(42,290)	19.91	(19,762)	37.55
Conditional shares outstanding at December 31, 2012	1,693,610	29.92	249,094	40.71

Other plans

Stock Option Extension Plans and Financing

In2002,employeeswereofferedanextensionoftheoptionperiodforoptionsgrantedin2000.Asaresulttheoption periodwasextendeduntil2012.Employeeswhoacceptedtheextensionbecamesubjecttoadditionalexerciseperiods inrespectoftheiroptions.Atthemodificationdate,therewasnointrinsicvalueofthemodifiedawardbecausethe exercisepriceundereachplanstillexceededASML'sstockpriceonthemodificationdate.Asaresult,thesestock optionextensionsdidnotresultinrecognitionofanyadditionalcompensationexpenseinaccordancewithIFRS2.

Stockoptionplansthatwereissuedbefore2001wereconstructedwithavirtualfinancingarrangementincompliance withtheapplicablelawsandafterobtainingthenecessarycorporateapprovals,wherebyASMLloanedthetaxvalueof theoptionsgrantedtoemployeessubjecttotheDutchtax-regime.Theinterest-freeloansissuedunderthisarrangement wererepayabletoASMLontheexercisedateoftherespectiveoption,providedthattheoptionwasactuallyexercised. Iftheoptionsexpiredunexercised,theloanswereforgiven.ASML'sSupervisoryBoardapprovedtheStockOptionPlans 2000atthetime,includingtheinterest-freeloans,asthesewerepartoftheStockOptionPlan.

In2006,welaunchedastockoptionplanforDutchemployeesholdingstockoptionsgrantedin2000(option"A"), whichexpiredin2012.Inthisplanwegrantedoptions(option"B")whichonlybecameeffectiveafteroption"A" expiredunexercisedin2012.During2012optiontype"A"expiredandoptiontype"B"hasbeenfullyexercisedandall amountsduetoASMLunderthevirtualfinancingarrangementwererepaiduponexerciseoftheoption.Noamountsare outstandingunderthisvirtualfinancingarrangementasofDecember31,2012.Nocompensationexpensesinrelation tothesespecificStockOptionExtensionPlansarerecognizedintheconsolidatedincomestatementfortheyears2012 and2011.

Employee Purchase Plan

Everyquarter,ASMLoffersitsworldwidepayrollemployeestheopportunitytobuyASMLsharesorASMLstockoptions againstfairvalueoutoftheirnetsalary.Thefairvalueforsharesisdeterminedbasedontheclosingpriceoftheordinary sharesonNYSEEuronextAmsterdamonthegrant-date.ThefairvalueofthestockoptionsisdeterminedusingaBlack-Scholesoptionvaluationmodel.FortheassumptionsonwhichtheBlack-Scholesoptionvaluationmodelisused,see thedisclosureaboveunderthecaption"OptionPlans".Themaximumnetamountforwhichemployeescanparticipate intheplanamountsto10.0percentofgrossbasesalary.Whenemployeesretainthesharesand/orstockoptionsfora minimumof12months,ASMLwillpayouta20.0percentcashbonusonthenetinvestedamount.

Deferred compensation plans

InJuly2002,ASMLadoptedanon-qualifieddeferredcompensationplanforitsUnitedStatesemployeesthatallows aselectgroupofmanagementorhighlycompensatedemployeestodeferaportionoftheirsalary,bonus,and commissions.TheplanallowsASMLtocreditadditionalamountstotheparticipants'accountbalances.Theparticipants dividetheirfundsamongtheinvestmentsavailableintheplan.Participantselecttoreceivetheirfundsinfutureperiods aftertheearlieroftheiremploymentterminationortheirwithdrawalelection,atleastthreeyearsafterdeferral.There wereminorexpensesrelatingtothisplanin2012and2011.AsofDecember31,2012,and2011,ourliabilityunderthe deferredcompensationplanwasEUR11.8millionandEUR10.2million,respectively.

Pension plans

ASMLmaintainsvariouspensionplanscoveringsubstantiallyallofitsemployees.OuremployeesintheNetherlands, 4,778infull-timeequivalents("FTEs"),participateinamulti-employerunionplan("BedrijfstakpensioenfondsMetalektro" "PME")determinedinaccordancewiththecollectivebargainingagreementseffectivefortheindustryinwhich ASMLoperates.Thiscollectivebargainingagreementhasnoexpirationdate.Thismulti-employerunionplancovers approximately1,220companiesandapproximately150,000contributingmembers.ASML'scontributiontothemultiemployerunionplanislessthan5.0%ofthetotalcontributiontotheplanaspertheannualreportfortheyearended December31,2011.Theplanmonitorsitsrisksonaglobalbasis,notbycompanyoremployee,andissubjectto regulationbyDutchgovernmentalauthorities.Bylaw(theDutchPensionAct),amulti-employerunionplanmustbe monitoredagainstspecificcriteria,includingthecoverageratiooftheplan'sassetstoitsobligations.Thiscoverage ratiomustexceed104.25percentforthetotalplan.EverycompanyparticipatinginaDutchmulti-employerunionplan contributesapremiumcalculatedasapercentageofitstotalpensionablesalaries,witheachcompanysubjecttothe samepercentagecontributionrate.Thepremiumcanfluctuateyearlybasedonthecoverageratioofthemulti-employer unionplan.Thepensionrightsofeachemployeearebasedupontheemployee'saveragesalaryduringemployment.

ASML'snetperiodicpensioncostforthismulti-employerunionplanforanyperiodistheamountoftherequired contributionforthatperiod.Acontingentliabilitymayarisefrom,forexample,possibleactuariallossesrelatingtoother participatingentitiesbecauseeachentitythatparticipatesinamulti-employerunionplansharesintheactuarialrisksof everyotherparticipatingentityoranyresponsibilityunderthetermsofaplantofinanceanyshortfallintheplanifother entitiesceasetoparticipate.

Thecoverageratioofthemulti-employerunionplanincreasedto93.9percentasofDecember31,2012(December31, 2011:90.0percent).Becauseofthelowcoverageratio,PMEpreparedandexecutedaso-called"RecoveryPlan"which wasapprovedbyDeNederlandscheBank(theDutchcentralbank,whichisthesupervisorofallpensioncompanies intheNetherlands).Duetothelowcoverageratioandaccordingtotheobligationofthe"RecoveryPlan"thepension premiumpercentageis24.0inrespectively2013and2012.Thecoverageratioiscalculatedbydividingthefund's capitalbythetotalsumofpensionliabilitiesandisbasedonactualmarketinterest.

ASMLalsoparticipatesinseveraldefinedcontributionpensionplans,withASML'sexpensesfortheseplansequaling thecontributionsmadeintherelevantperiod.

Year ended December 31 (in thousands)	2012 EUR	2011 EUR
Pensionplanbasedonmulti-employerunionplan	34,525	31,819
Pensionplansbasedondefinedcontribution	15,773	14,128
Pension and retirement expenses	50,298	45,947

24. Commitments, contingencies and guarantees

Wehavevariouscontractualobligations,someofwhicharerequiredtoberecordedasliabilitiesinourconsolidated financialstatements,includinglong-andshort-termdebt.Othercontractualobligations,namelyoperatinglease commitments,purchaseobligationsandguarantees,aregenerallynotrequiredtoberecognizedasliabilitiesonour consolidatedstatementoffinancialpositionbutarerequiredtobedisclosed.

Tabular Disclosure of Contractual Obligations

OurcontractualobligationsasofDecember31,2012canbesummarizedasfollows:

Payments due by period (in thousands)	Total EUR	1 year EUR	2 year EUR	3 year EUR	4 year EUR	5 year EUR	After 5 years EUR
Long-TermDebtObligations,includinginterestexpense1	831,194	39,801	39,726	39,726	39,726	639,726	32,489
OperatingLeaseObligations	98,827	32,195	22,267	17,192	13,465	5,265	8,443
PurchaseObligations 1,643,955 1,557,021			84,012	2,876	32	14	-
Liabilityforuncertaintaxpositions,includinginterest expense	59,967	2,964	4,209	-	-	16,957	35,837
Total Contractual Obligations 2,633,943 1,631,981			150,214	59,794	53,223	661,962	76,769

1 SeeNote19fortheamountsexcludinginterestexpense.

Long-termdebtobligationsmainlyrelatetointerestpaymentsandprincipalamountoftheEurobond.SeeNote19.

Operatingleaseobligationsincludeleasesofequipmentandfacilities.Leasepaymentsrecognizedasanexpensewere EUR41.6millionandEUR40.6millionfortheyearsendedDecember31,2012and2011,respectively.

Severaloperatingleasesforourbuildingscontainpurchaseoptions,exercisableattheendofthelease,andinsome cases,duringthetermofthelease.TheamountstobepaidifASMLshouldexercisethesepurchaseoptionsattheend oftheleaseasofDecember31,2012canbesummarizedasfollows:

Purchase options due by period (in thousands)	Total EUR	1 year EUR	2 year EUR	3 year EUR	4 year EUR	5 year EUR	After 5 years EUR
Purchaseoptions	22,982	-	8,999	-	13,983	-	-

Purchaseobligationsincludepurchasecommitmentswithsuppliersintheordinarycourseofbusiness.ASMLexpects thatitwillhonorthesepurchaseobligationstofulfillfuturesales,inlinewiththetimingofthosefuturesales.Thegeneral termsandconditionsoftheagreementsrelatingtothemajorpartofourpurchasecommitmentsasofDecember31, 2012containclausesthatenableustodelayorcanceldeliveryoforderedgoodsandservicesuptothedatesspecified inthecorrespondingpurchasecontracts.Thesetermsandconditionsthatwehaveagreedwithoursupplychain partnersgivesusadditionalflexibilitytoadaptourpurchaseobligationstoourrequirementsinlightoftheinherent cyclicalityofthesemiconductorequipmentindustryinwhichweoperate.Weestablishaprovisionforcancellationfees whenitisprobablethattheliabilityhasbeenincurredandtheamountofcancellationfeesisreasonablyestimable.

ASMLHoldingN.V.formsataxunitytogetherwithcertainofitsDutchsubsidiaries,forpurposesofDutchtaxlawsand areassuchjointlyandseverallyliableforthetaxdebtsoftheunity:ThefiscalunitycomprisesasofDecember31,2012 ofASMLHoldingN.V.,ASMLNetherlandsB.V.,ASMLSystemsB.V.,ASMLMasktoolsB.V.

25. Legal Contingencies

ASMLispartytovariouslegalproceedingsgenerallyincidentaltoourbusiness.ASMLalsofacesexposuresfromother actualorpotentialclaimsandlegalproceedings.Inaddition,ASMLcustomersmaybesubjecttoclaimsofinfringement fromthirdpartiesallegingthattheASMLequipmentusedbythosecustomersinthemanufactureofsemiconductor products,and/orthemethodsrelatingtouseoftheASMLequipment,infringesoneormorepatentsissuedtothose thirdparties.Iftheseclaimsweresuccessful,ASMLcouldberequiredtoindemnifysuchcustomersforsomeorallof anylossesincurredordamagesassessedagainstthemasaresultofthatinfringement.

Weaccrueforlegalcostsrelatedtolitigationinourconsolidatedincomestatementatthetimewhentherelatedlegal servicesareactuallyprovidedtoASML.In2012,noestimatedlosseswererecordedasachargetoourconsolidated incomestatement(2011:noestimatedlosseswererecorded).

Fromlate2001through2004,wewerepartytoaseriesofcivillitigationsandadministrativeproceedingsinwhich NikonallegedASML'sinfringementofNikonpatentsrelatingtolithography.ASMLinturnfiledclaimsagainstNikon. PursuanttoagreementsexecutedonDecember10,2004,ASML,ZeissandNikonagreedtosettleallpendingworldwide patentlitigationbetweenthecompanies.Thesettlementincludedanexchangeofreleases,apatentCross-License agreementrelatedtolithographyequipmentusedtomanufacturesemiconductordevices(the"NikonCross-License Agreement")andpaymentstoNikonbyASMLandZeiss.Inconnectionwiththesettlement,ASMLandZeissmade settlementpaymentstoNikonfrom2004to2007.ThelicenseperiodforcertainpatentssubjecttotheNikonCross-LicenseAgreement,whichwerenotperpetuallylicensed,endedonDecember31,2009.Pursuanttothetermsofthe NikonCross-LicenseAgreement,thepartieshaveagreed,fromJanuary1,2010toDecember31,2014(the"Cross-LicenseTransitionPeriod"),nottobringsuitforclaimsrelatedtoinfringementofthosepatentsorforclaimsrelated toinfringementofpatentsissuedduringtheCross-LicenseTransitionPeriod.However,beginningonJanuary1, 2015,thepartiesmaybringsuitforinfringementofpatentssubjecttotheNikonCross-LicenseAgreement,including anyinfringementthatoccurredduringtheCross-LicenseTransitionPeriod.Damagesrelatedtoclaimsforpatent infringementoccurringduringtheCross-LicenseTransitionPeriodarelimitedtothreepercentofthenetsalespriceof productsutilizingpatentsthatarevalidandenforceable.

26. Income Taxes

Thecomponentsofprovisionforincometaxesareasfollows:

Year ended December 31 (in thousands)	2012 EUR	2011 EUR
Currenttax	(82,105)	(113,852)
Deferredtax	46,543	(52,887)
Total	(35,562)	(166,739)

TheDutchstatutorytaxratewas25.0percentin2012and2011.Taxamountsinotherjurisdictionsarecalculatedatthe ratesprevailingintherelevantjurisdictions.

Thereconciliationoftheprovisionforincometaxesshownintheconsolidatedincomestatement,basedontheeffective taxrate,withtheDutchstatutorytaxrate,isasfollows:

Year ended December 31	2012		2011
(in thousands)	EUR	%	EUR	%
Income before income taxes	1,337,909	100.0	1,660,810	100.0
IncometaxprovisionbasedonASML'sdomestictaxrate	(334,477)	25.0	(415,202)	25.0
Effectsoftaxratesinforeignjurisdictions	6,576	(0.5)	20,458	(1.3)
Adjustmentsinrespectoftaxexemptincome	23,532	(1.8)	19,134	(1.2)
Adjustmentsinrespectoftaxincentives	165,649	(12.4)	182,373	(11.0)
Adjustmentsinrespectofprioryears'currenttaxes	18,275	(1.4)	9,097	(0.5)
Movementsintheliabilityforuncertaintaxpositions	92,366	(6.9)	(2,685)	0.2
Othercreditsandnon-taxableitems	(7,483)	0.7	20,086	(1.2)
Provision for income taxes	(35,562)	2.7	(166,739)	10.0

Income tax provision based on ASML's domestic rate

TheprovisionforincometaxesbasedonASML'sdomesticrateisbasedontheDutchstatutoryincometaxrateand reflectstheprovisionforincometaxesthatwouldhavebeenapplicableifallofourincomewasderivedfromourDutch operationsandtherewerenopermanentbooktaxdifferencesandnoothertaxfacilities.

Effects of tax rates in foreign jurisdictions

AportionofASML'sresultsarerealizedincountriesotherthantheNetherlandswheredifferenttaxratesareapplicable.

Adjustments in respect of tax exempt income

Incertainjurisdictionspartoftheincomegeneratedistaxexempted.

Adjustments in respect of tax incentives

Adjustmentsinrespectoftaxincentivesrelatetoreducedtaxratesinseveraljurisdictions,mainlyconsistingofthe agreementwiththeDutchfiscalauthoritiesofDecember2010regardingtheapplicationofthe"InnovationBox",andthe researchanddevelopmentdeduction("RDA").TheInnovationboxisafacilityunderDutchcorporatetaxlawpursuantto whichincomeassociatedwithR&Dispartiallyexemptedfromtaxation.ThistaxrulinghasretroactiveeffecttoJanuary 1,2007andisvalidthroughDecember31,2016.Thereafterthevalidityofthisrulingmaybeextendedorthisrulingmay beadapteddependingonapossiblechangeinlaworchangeofcircumstances.

Adjustments in respect of prior years' current taxes

In2012,werecognizedataxbenefitofEUR18.3millionor1.4percentofincomebeforetaxesmainlyattributabletothe applicationoftaxexemptionsforprioryears,whichhadafavorableeffectontheeffectivetaxratefor2012.

Movements in the liability for uncertain tax positions

In2012,ASMLrecognizedataxbenefitofEUR92.4millionor6.9percentofincomebeforeincometaxesmainlyasa resultofthesuccessfulconclusionoftaxauditsindifferentjurisdictions(EUR92.1million).

Other credits and non-taxable items

Othercreditsandnon-taxableitemsreflecttheimpactonstatutoryratesofpermanentnon-taxableitemssuchasnondeductibletaxes,non-deductibleinterestexpense,andnon-deductiblemealsandentertainment,aswellastheimpact of(thereversalof)varioustaxcreditsonourprovisionforincometaxes.

Income taxes recognized directly in equity

Incometaxesrecognizeddirectlyinequity(includingothercomprehensiveincome)areasfollows:

Income tax recognized in equity (in thousands)	2012 EUR	2011 EUR
Current tax
Derivativefinancialinstruments	(1,066)	6,257
Issuanceofshares	(2,116)	11
Deferred tax
Share-basedpayments	(1,882)	3,516
Income tax recognized in equity	(5,064)	9,784

1

Liability for uncertain tax positions and deferred taxes

Thedeferredtaxpositionandliabilityforuncertaintaxpositionsrecordedonthestatementoffinancialpositionareas follows:

As of December 31 (in thousands)	2012 EUR	2011 EUR
Liabilityforuncertaintaxpositions	(59,967)	(155,432)
Deferredtaxposition	115,771	164,389
Total	55,804	8,957

Liability for uncertain tax positions

Thecalculationofourliabilityforuncertaintaxpositionsinvolvesuncertaintiesintheapplicationofcomplextax laws.Ourestimateforthepotentialoutcomeofanyuncertaintaxissueishighlyjudgmental.Webelievethatwehave adequatelyprovidedforuncertaintaxpositions.However,settlementoftheseuncertaintaxpositionsinamanner inconsistentwithourexpectationscouldhaveamaterialimpactonourconsolidatedfinancialstatements.

ConsistentwiththeprovisionsofIAS12,asofDecember31,2012,ASMLhasaliabilityforuncertaintaxpositionsof EUR60.0million(2011:EUR155.4million)whichisclassifiedasnon-currentdeferredandothertaxliabilities.Thetotal liabilityforuncertaintaxpositions,ifreversed,wouldhaveafavorableeffectonoureffectivetaxrate.

Areconciliationofthebeginningandendingbalanceoftheliabilityforuncertaintaxpositionsisasfollows:

2011	2012	As of December 31
EUR	EUR	(in millions)
162,066	155,432	Balance,January1
11,121	4,297	Grossincreases–taxpositionsinpriorperiod
(24,566)	(92,521)	Grossdecreases–taxpositionsinpriorperiod
21,258	3,255	Grossincreases–taxpositionsincurrentperiod
(10,403)	-	Settlements
(4,044)	(10,496)	Lapseofstatuteoflimitations
155,432	59,967	Total liability for uncertain tax positions

For2012thegrossdecreasesintaxpositionsinpriorperiodmainlyrelatestothereleaseoftaxpositionsafter successfulconclusionoftaxauditsindifferentjurisdictions.

WeestimatethatthetotalliabilityforuncertaintaxpositionswilldecreasebyEUR3.0millionwithinthenext12months. Theestimatedchangestotheliabilityforuncertaintaxpositionswithinthenext12monthsaremainlyduetoexpected settlementswithtaxauthorities.

Wearesubjecttotaxauditsinourmajortaxjurisdictionsforyearsfromandincluding2007onwardsintheNetherlands, foryearsfromandincluding2006onwardsinHongKong,andforyearsfromandincluding2001onwardsintheUnited States.Inthecourseofsuchaudits,localtaxauthoritiesmaychallengethepositionstakenbyus.Fortheyears2006 through2010,thepartialexemptionoftaxableprofitsissubjecttotaxauditsincertaintaxjurisdictions.

Deferred tax position

Thechangesindeferredincometaxassetsandliabilitiesconsistofthefollowingelements:

Changes in deferred tax assets and liabilities (in thousands)	2012 EUR	2011 EUR
Balance, January 1	164,389	193,093
Incomestatement	(45,593)	(32,401)
Equity	1,882	(3,516)
Exchangedifferences	(4,907)	7,213
Balance, December 31	115,771	164,389

Thecompositionoftotaldeferredtaxassetsandliabilitiesintheconsolidatedfinancialstatementsisasfollows:

Deferred tax assets
		Consolidated
	January 1,	Income		Exchange	December
Composition of temporary differences	2012	Statement	Equity	differences	31, 2012
(in thousands)	EUR	EUR	EUR	EUR	EUR
Unrealizedprofitsresultingfromintercompanytransactions	60,327	2,260	-	(2,413)	60,174
Inventories	34,935	(6,468)	-	(300)	28,167
Capitalizedresearchanddevelopmentexpenditures	25,022	(16,601)	-	248	8,669
Deferredrevenue	23,892	(3,083)	-	(237)	20,572
Provisions	14,515	7,296	-	(283)	21,528
Installationandwarrantyreserve	8,772	(1,508)	-	(113)	7,151
Taxeffectcarry-forwardlosses	7,735	(2,219)	-	41	5,557
Fixedassets	6,495	1,454	-	(151)	7,798
Restructuringandimpairment	5,146	(733)	-	(77)	4,336
Alternativeminimumtaxcredits1	5,028	229	-	(30)	5,227
Share-basedpayments	3,660	49	1,882	(98)	5,493
Bilateraladvancepricingagreement2	1,426	(1,278)	-	-	148
Othertemporarydifferences	15,302	140	-	(1,624)	13,818
Total	212,255	(20,462)	1,882	(5,037)	188,638

1 AlternativeminimumtaxcreditsrelatetoprepaidUStaxeswhicharecreditedagainstfuturetaxableprofitsafterthecarry-forwardlossesused.

2 TheBilateraladvancepricingagreementrelatestointellectualpropertywhichiscapitalizedfromataxperspectiveresultinginatemporarydifference.

Deferred tax liabilities		Consolidated
Composition of temporary differences	January 1, 2012	Income Statement	Equity	Exchange differences	December 31, 2012
(in thousands)	EUR	EUR	EUR	EUR	EUR
Capitalizedresearchanddevelopmentexpenditures	(26,357)	(17,891)	-	(8)	(44,256)
Fixedassets	(19,108)	(6,965)	-	183	(25,890)
Borrowingcosts	(1,554)	(404)	-	-	(1,958)
Othertemporarydifferences	(847)	129	-	(45)	(763)
Total	(47,866)	(25,131)	-	130	(72,867)

Deferred tax assets
Composition of temporary differences	January 1, 2011	Consolidated Income Statement	Equity	Exchange differences	December 31, 2011
(in thousands)	EUR	EUR	EUR	EUR	EUR
Unrealizedprofitsresultingfromintercompanytransactions	31,151	25,490	-	3,686	60,327
Inventories	70,777	(36,352)	-	510	34,935
Capitalizedresearchanddevelopmentexpenditures	18,652	5,172	-	1,198	25,022
Deferredrevenue	10,890	11,746	-	1,256	23,892
Provisions	21,828	(7,463)	-	150	14,515
Installationandwarrantyreserve	8,092	98	-	582	8,772
Taxeffectcarry-forwardlosses	27,756	(18,695)	-	(1,326)	7,735
Fixedassets	4,386	1,872	-	237	6,495
Restructuringandimpairment	6,074	(1,063)	-	135	5,146
Alternativeminimumtaxcredits1	4,658	112	-	258	5,028
Share-basedpayments	8,220	(1,124)	(3,516)	80	3,660
Bilateraladvancepricingagreement2	7,993	(6,583)	-	16	1,426
Othertemporarydifferences	13,717	938	-	647	15,302
Total	234,194	(25,852)	(3,516)	7,429	212,255

1 AlternativeminimumtaxcreditsrelatetoprepaidUStaxeswhicharecreditedagainstfuturetaxableprofitsafterthecarry-forwardlossesused.

2 TheBilateraladvancepricingagreementrelatestointellectualpropertywhichiscapitalizedfromataxperspectiveresultinginatemporarydifference.

Deferred tax liabilities		Consolidated
Composition of temporary differences	January 1, 2011	Income Statement	Equity	Exchange differences	December 31, 2011
(in thousands)	EUR	EUR	EUR	EUR	EUR
Capitalizedresearchanddevelopmentexpenditures	(29,252)	2,830	-	65	(26,357)
Fixedassets	(9,661)	(9,175)	-	(272)	(19,108)
Borrowingcosts	(1,231)	(323)	-	-	(1,554)
Othertemporarydifferences	(957)	119	-	(9)	(847)
Total	(41,101)	(6,549)	-	(216)	(47,866)

Tax effect carry-forward losses

Deferredtaxassetsfromcarry-forwardlossesresultpredominantlyfromnetoperatinglosscarry-forwardsincurredin theUnitedStatespriorto2011.

NetoperatinglossesqualifiedastaxlossesunderUnitedStatesfederaltaxlawswerefullyutilizedtooffsettaxable incomeduring2012.NetoperatinglossesqualifiedastaxlossesunderUnitedStatesstatetaxlawsincurredbyUnited Statesgroupcompaniescaningeneralbeoffsetagainstfutureprofitsrealizedinthe5to20yearsfollowingtheyear inwhichthelossesareincurred.TheperiodofnetoperatinglosscarryforwardforUnitedStatesstatetaxpurposes dependsonthestateinwhichthetaxlossarose.OurabilitytouseUnitedStatesstatetaxlosscarryforwardsin existenceatDecember31,2012,issubjecttovaryingstatestatutes(providingforperiodsofbetween5and20years) andvaluationallowanceshavebeensetupforstatecarryforwardlossesthatarenotexpectedtoberealizedbefore theyexpire.ThetotalamountoflossescarriedforwardunderUnitedStatesstatetaxlawsasofDecember31,2012,is EUR503.7milliontaxbasisorEUR5.6milliontaxeffect.

27. Subsidiaries

DetailsofourmainsubsidiariesatDecember31,2012areasfollows:

Legal Entity	Country of Incorporation
Main subsidiaries of ASML Holding N.V.1 :
ASMLNetherlandsB.V.	Netherlands(Veldhoven)
ASMLMaskToolsB.V.	Netherlands(Veldhoven)
ASMLSystemsB.V.	Netherlands(Veldhoven)
ASMLMotionB.V.2	Netherlands(Oirschot)
ASMLMotionSubB.V.3	Netherlands(Oirschot)
ASMLGermanyGmbH	Germany(Dresden)
ASMLFranceS.a.r.l.	France(Montbonnot)
ASML(UK)Ltd.	UK(Paisley(Scotland))
ASMLIsrael(2001)Ltd.	Israel(Ramat-Gan)
ASMLIrelandLtd.	Ireland(Dublin)
ASMLDublinLtd.	Ireland(Dublin)
ASMLItalyS.r.l.	Italy(Avezzano)
ASMLHongKongLtd.	HongKongSAR
ASMLSingaporePte.Ltd.	Singapore
ASMLKoreaCo.Ltd.	Korea(Kyunggi-Do)
ASMLJapanCo.Ltd.	Japan(Kawasaki-shi,Kanagawa-Ken)
ASMLLithographyFacilitiesScienceandTechnologyCo.Ltd.	China(Tianjin)
ASMLTaiwanLtd.	Taiwan(Hsinchu)
ASMLEquipmentMalaysiaSdn.Bhd.	Malaysia(Penang)
ASMLBelgiumBVBA	Belgium(Essen)
ASMLBelgiumFinanceCV	Belgium(Essen)
BrionTechnologies(Shenzhen)Co.Ltd.	China(Shenzhen)
BrionTechnologies,Inc.	US(Delaware)
ASMLUS,Inc.	US(Delaware)
ASMLCapitalUS,Inc	US(Delaware)
ASMLMaskTools,Inc.	US(Delaware)
ASMLParticipationsUSInc.	US(Delaware)
LehrerPearson,Inc.	US(Delaware)
ASMLVentures1,Inc.	US(Delaware)
KonaAcquisitionCompany,Inc.	US(Reno,Nevada)
KonaTechnologies,LCC	US(Reno,Nevada)
eLithLLC.	US(Delaware)
ASMLHongKongLogisticServicesLtd.	HongKongSAR

1 Allofoursubsidiariesare(directlyorindirectly)wholly-owned,withexceptionofElithLLC,inwhichweholdaninterestof50%.

2 WijdevenMotionHoldingB.V.wasrenamedtoASMLMotionB.V.

3 WijdevenMotionB.V.wasrenamedtoASMLMotionSubB.V.

28. Segment Disclosure

SegmentinformationhasbeenpreparedinaccordancewithIFRS8,"OperatingSegments".

ASMLoperatesinonereportablesegmentforthedevelopment,production,marketing,saleandservicingofadvanced semiconductorequipmentsystemsexclusivelyconsistingoflithographysystems.InaccordancewithIFRS8,ASML's ChiefExecutiveOfficerhasbeenidentifiedasthechiefoperatingdecision-maker,whoreviewsoperatingresultstomake decisionsaboutallocatingresourcesandassessingperformanceforASML.

Managementreportingincludesnetsystemsalesfiguresofnewandusedsystems.Netsystemsalesfornewandused systemswereasfollows:

Year ended December 31	2012	2011
(in thousands)	EUR	EUR
Newsystems	3,620,260	4,780,720
Usedsystems	181,372	103,193
Net system sales	3,801,632	4,883,913

SegmentperformanceisevaluatedbyourchiefoperatingdecisionmakerbasedonU.S.GAAPnetincomeorloss whichincertainrespect,asexplainedinthetablebelow,ismeasureddifferentlyfromnetincomeorlossreportedinour consolidatedfinancialstatements,whicharebasedonIFRS,asadoptedbytheEU.

Year ended December 31	2012	2011
(in thousands)	EUR	EUR
Netsystemsales	3,801,632	4,883,913
Netserviceandfieldoptionsales	929,923	767,122
Total net sales	4,731,555	5,651,035
Costofsystemsales	2,198,921	2,793,931
Costofserviceandfieldoptionsales	527,377	407,714
Total cost of sales	2,726,298	3,201,645
Gross profit on sales	2,005,257	2,449,390
Researchanddevelopmentcosts	589,182	590,270
Selling,generalandadministrativecosts	259,301	217,904
Income from operations	1,156,774	1,641,216
Interestincome	16,585	41,156
Interestexpense	(22,781)	(33,737)
Income before income taxes	1,150,578	1,648,635
Provisionforincometaxes	(4,262)	(181,675)
Net income	1,146,316	1,466,960
DifferencesU.S.GAAPandIFRS	156,031	27,111
Net income based on IFRS	1,302,347	1,494,071

SegmentperformanceisalsoevaluatedbyourmanagementbasedonU.S.GAAPfortotalassets.Thetablebelow presentsthemeasurementsandthereconciliationtototalassetsintheconsolidatedstatementoffinancialposition:

As of December 31	2012	2011
(in thousands)	EUR	EUR
Totalassetsformanagementreportingpurposes	7,410,478	7,260,815
DifferencesU.S.GAAPandIFRS	472,577	298,348
Total assets based on IFRS	7,883,055	7,559,163

Forgeographicalreporting,netsalesareattributedtothegeographiclocationinwhichthecustomers'facilitiesare located.Totalnon-currentassetsareattributedtothegeographiclocationinwhichtheseassetsarelocatedandexclude deferredtaxassetsandderivativefinancialinstruments.Netsalesandnon-currentassetsbygeographicregionwereas follows:

Non-current assets	Net sales	Year ended December 31
EUR	EUR	(in thousands)
		2012
40,856	292,309	Japan
17,664	1,276,304	Korea
968	98,554	Singapore
50,372	1,479,768	Taiwan
2,073	197,262	RestofAsia
1,483,753	256,192	Europe
298,753	1,131,166	UnitedStates
1,894,439	4,731,555	Total
		2011
69,001	405,595	Japan
16,250	1,318,777	Korea
1,167	436,308	Singapore
46,418	1,146,601	Taiwan
1,496	450,796	RestofAsia
1,294,397	505,129	Europe
259,051	1,387,829	UnitedStates
1,687,780	5,651,035	Total

In2012,salestothelargestcustomeraccountedforEUR1,236.1millionor26.1percentofnetsales(2011:EUR1,311.7 millionor23.2percentofnetsales).ASML'sthreelargestcustomers(basedonnetsales)accountedfor58.9percent ofaccountsreceivableandfinancereceivablesatDecember31,2012,35.5percentofaccountsreceivableandfinance receivablesatDecember31,2011.

SubstantiallyallofASML'ssaleswereexportsalesin2012and2011.

29. Personnel

Personnelexpensesforallpayrollemployeeswere:

Year ended December 31	2012	2011
(in thousands)	EUR	EUR
Wagesandsalaries	711,039	648,869
Socialsecurityexpenses	58,180	52,550
Pensionandretirementexpenses	50,298	45,947
Share-basedpayments	18,714	12,430
Personnel expenses	838,231	759,796

TheaveragenumberofpayrollemployeesinFTEsemployedduring2012and2011was8,140and7,627respectively. ThetotalnumberofpayrollandtemporarypersonnelemployedinFTEspersectorwas:

As of December 31	2012	2011
CustomerSupport	2,538	2,478
SG&A	869	723
IndustrialEngineering	637	420
Manufacturing&Logistics	2,856	2,852
R&D	3,736	3,417
Total employees (in FTEs)	10,636	9,890
Less:Temporaryemployees(inFTEs)	2,139	1,935
Payroll employees (in FTEs)	8,497	7,955

TheaveragenumberofpayrollemployeesinFTEsinouroperationsintheNetherlandsduring2012and2011was4,620 and4,313respectively.

30. Board of Management and Supervisory Board remuneration

TheremunerationofthemembersoftheBoardofManagementisdeterminedbytheSupervisoryBoardontheadvice oftheRemunerationCommittee.The2010RemunerationPolicy,asadoptedbytheGeneralMeetingofShareholderson March24,2010,wasnotchangedin2012.

The2010RemunerationPolicyenablesASMLtocontinuetoattract,rewardandretainqualifiedandexperienced industryprofessionalsinaninternationallabormarket.Theremunerationstructureandlevelsareassessedagainsta referencemarketbybenchmarking.Thetotalremunerationin2012consistsofbasesalary,short-termperformance incentives(incash),long-termperformanceincentives(inshares)andotherbenefits.

Totaldirectcompensation,pensionandotherbenefits

TheremunerationofthemembersoftheBoardofManagementin2012,2011and2010wasasfollows:

		Fixed Base salary	Short-term (variable)		Long-term (variable)	Total Remuneration		Other
			STI (Cash)1	Option awards2	LTI (share awards)3	Total7	Pension8	Compensation Pension Premium9	Other benefits and expense reimbursement10
	Year	EUR	EUR	EUR	EUR	EUR	EUR	EUR	EUR
E.Meurice	2012	818,000	613,500	-	2,079,601 4	3,511,101	167,427	-	127,116
	2011	787,000	586,709	-	1,413,218 5	2,786,927	140,113	88,050	136,765
	2010	757,000	566,236	42,648	935,617 6	2,301,501	136,697	-	132,630
P.T.F.M.	2012	508,000	304,800	-	1,289,415 4	2,102,215	79,190	-	46,275
Wennink	2011	488,000	291,043	-	875,493 5	1,654,536	85,994	94,455	44,669
	2010	469,000	280,650	26,401	579,321 6	1,355,372	84,229	-	43,627
M.A.vanden	2012	538,000	322,800	-	1,366,039 4	2,226,839	83,990	-	47,540
Brink	2011	517,000	308,339	-	927,912 5	1,753,251	91,243	181,826	45,502
	2010	497,000	297,405	28,025	617,004 6	1,439,434	90,388	-	44,817
F.J.vanHout	2012	445,000	267,000	-	1,131,676 4	1,843,676	69,110	-	37,313
	2011	428,000	255,259	-	832,201	1,515,460	75,134	9,735	35,190
	2010	412,000	246,541	23,209	471,700	1,153,450	65,300	-	34,549
F.J.M.	2012	433,000	259,800	-	1,144,137	1,836,937	67,190	-	28,889
Schneider-	2011	416,000	248,102	-	676,945	1,341,047	56,475	4,290	28,313
Maunoury	2010	400,000	239,360	-	326,947	966,307	55,011	-	34,788

1 Actualshort-termincentives("STI")(cash)chargeabletousinthefinancialyear(i.e.STIrelatingtoperformanceinthecurrentyearbutpaidoutinthe nextfinancialyear).

2 TheremunerationreportedaspartoftheoptionawardsisbasedoncostsincurredunderIFRS.Thecostsoftheoptionawardsarebasedontheactual vestednumberofoptionawardsmultipliedbythefairvalueoftheoptionawardsatgrantdateandarerecordedintheconsolidatedincomestatement onastraightlinebasisoverthevestingperiod.Theuseofperformancestockoptionsintheshorttermincentiveplanwaswithdrawnasof2010.The lastperformanceoptionawardsweregrantedin2009andbecameunconditionalin2010.

3 Theremunerationreportedaspartofthelong-termincentives("LTI")(shareawards)isbasedoncostsincurredunderIFRS.Thecostsofshare awardsarechargedtotheconsolidatedincomestatementoverthe3yearvestingperiodbasedonthemaximumachievablenumberofshareawards. Thereforethecostsfore.g.thefinancialyear2012includecostsoftheBoardofManagement'sperformanceshareplan2012,2011and2010. Furthermore,thedifferencebetweentheamountbasedonthemaximumachievablenumberofshareawardsandtheamountbasedontheactual numberofshareawardsthatvest,isreleasedtotheconsolidatedincomestatementinthefinancialyearinwhichtheshareawardsvest.

4 TheremunerationreportedaspartoftheLTI(shareawards)fortheyear2012includesanadjustmentfortheBoardofManagementperformanceshare plan2009basedontheactualnumberofshareawardsvestedin2012.TheadjustmentforMr.Meurice,Mr.Wennink,Mr.vandenBrinkandMr.van HoutamountstoEUR-106,266,EUR-65,785,EUR-69,831andEUR-57,838,respectively.

5 TheremunerationreportedaspartoftheLTI(shareawards)fortheyear2011includesanadjustmentfortheBoardofManagementperformanceshare plan2008basedontheactualnumberofshareawardsvestedin2011.TheadjustmentforMr.Meurice,Mr.WenninkandMr.vandenBrinkamountsto EUR-148,040,EUR-91,645andEUR-97,281,respectively.

6 TheremunerationreportedaspartoftheLTI(shareawards)fortheyear2010includesanadjustmentfortheBoardofManagementperformanceshare plan2007basedontheactualnumberofshareawardsvestedin2010.TheadjustmentforMr.Meurice,Mr.WenninkandMr.vandenBrinkamountsto EUR-296,287,EUR-183,612andEUR-191,972,respectively.

7 Thistotalreflectsbasesalary,STI(cash),optionawardsandLTI(shareawards).

8 Thepensionarrangementhasbeenadjustedupwardstomatchcommonmarketpracticeasfrom2010.Furthermore,sincethepensionarrangement formembersoftheBoardofManagementisadefinedcontributionplan,wedonothaveadditionalpensionobligationsbeyondtheannualpremium contribution.Asper2010,theemployeecontributiontothepensionplanis4.0percentofthepensionbase.

9 In2011,compensationwaspaidtotheBoardofManagementregardingtheriskpremiumforspouse/orphanpensions,toaligntheBoardof Managementpensionarrangementwithseniormanagement.Thisconcernedareimbursementforriskpremiumsthatwereerroneouslypaidbythe participantsinthepast.

10 Otherbenefitsandexpensereimbursementaregrossamountsandmayincludehousingcosts,companycarcosts,travelexpenses,socialsecurity costs,healthanddisabilityinsurancecostsandrepresentationallowances.

Short-term incentive

Theannualperformance-relatedcashincentivewillhaveanon-targetlevelof75.0percentofbasesalaryfortheChief ExecutiveOfficer("CEO")and60.0percentfortheothermembersoftheBoardofManagement.Thepayoutsareprorated,onalinearbasistothelevelofachievementofsixperformancecriteria.Ofthefivequantitativeperformance criteria,threearebasedontheachievementofmeasurablefinancialtargets,oneonTechnologyLeadershipIndex(which alsoincludedqualitativeelements)andoneonachievementsinthemarketposition.Additionally,thequalitativetargetis basedontheachievementofagreedkeyobjectives.

Inprinciple,theweightingofeachofthefivequantitativecriteriaisequal(weighted80.0percentintotal).Thesixth targetisbasedonqualitativeobjectives(weighted20.0percent).Thesettingandmeasuringperiodofthefinancial andtechnologybasedtargetsissemiannual,andforthemarketrelatedandqualitativetargetsitisannual.Theoverall payoutisannualandthecashincentiveisaccruedduringtheperformanceperiod.

TheRemunerationCommitteeevaluatedtheBoardofManagements'performanceonabovesixcriteria.Basedonthe 2012evaluation,6outof6performancecriteriawereachievedontargetorabovetargetresult,resultinginacash payoutofEUR1.8millionrepresenting75.0percentofMr.Meurice'sbasesalary,60.0percentofMessrs.Wennink's, VandenBrink's,VanHout'sandSchneider-Maunoury'sbasesalary.

Performance Stock Options

Inordertoshiftthefocusfromtheshort-termtothelong-term,performancestockoptionsarenotapartofthe2010 RemunerationPolicy.Thevalueofthispartoftheremunerationhasbeenmovedintothelong-termincentiveplanwhich ispaidinshares.2009wasthelastyearinwhichperformancestockoptionsweregrantedtothemembersoftheBoard ofManagement,whichmeanstheactualnumberofperformancestockoptionsfor2009achievementwereawardedfor thelasttimein2010.Oncetheoptionsareunconditionallyawardedafterfulfillmentoftheperformanceconditions,the optionswillberetained(lock-upperiod)bytheBoardofManagementmemberforatleasttwoyearsafterthedateof unconditionalawardoruntiltheterminationofemployment,whicheverperiodisshorter.Thefairvalueoftheoptions grantedisdeterminedbasedontheBlack-Scholesoptionvaluationmodel.

DetailsofvestedoptionsheldbymembersoftheBoardofManagementtopurchaseordinarysharesofASMLHolding N.V.aresetoutbelow

	Jan. 1, 2012	Exercised during 2012	Share price on exercise date (EUR)	Vested during 2012	Expired during 2012	Dec. 31, 2012	Exercise price (EUR)	Expiration date
E.Meurice	23,270	23,270	35.12	-	-	-	11.53	1/19/2015
	88,371	88,371	36.70	-	-	-	17.90	1/18/2016
	95,146	95,146	43.89	-	-	-	20.39	1/17/2017
	42,448	42,448	36.67	-	-	-	17.20	2/4/2018
	84,895	84,895	34.93	-	-	-	12.39	2/2/2019
P.T.F.M.Wennink	31,500	-	-	-	31,500	-	58.00	1/20/2012
	52,554	52,554	33.60	-	-	-	12.39	2/2/2019
M.A.vandenBrink	31,500	-	-	-	31,500	-	58.00	1/20/2012
	27,894	27,894	34.38	-	-	-	17.20	2/4/2018
	55,788	55,788	33.60	-	-	-	12.39	2/2/2019
F.J.vanHout	46,201	46,201	33.60	-	-	-	12.39	2/2/2019
F.J.M.Schneider Maunoury	-	-	-	-	-	-	-	-

Long-term incentive

ThemembersoftheBoardofManagementareeligibletoreceiveperformanceshares,whichwillbeawardedannually undertheconditionoffulfillmentofpredeterminedperformancetargets.Thesetargetsaremeasuredoveraperiodof threecalendaryears.TheperformancemeasuresforobtainingperformancetargetswillbeASML'srelativeReturnOn AverageInvestedCapital("ROAIC")positioncomparedwiththepeergroup(weighted80.0percent)andaqualitative targetrelatedtoASML'slong-termabilitytokeepperformingathighstandards(weighted20.0percent).

Themaximumnumberofperformancesharestobeconditionallyawardedwillequal146.25percentofbasesalary dividedbythevalueofoneperformanceshare(i.e.reflectingmaximumachievement).ASMLdefinesstretchingtargets, whereasforontargetachievement,thevalueofperformanceshareswillbe80.0percentofbasesalary.

Forthedeterminationofthenumberofperformancesharesthatwillbeconditionallyawarded,ASMLappliesafixed numberapproach.Underthisapproach,thenumberofsharesisfixedfortwoconsecutiveyears.Everytwoyears,the fixednumberiscalculatedusingthemaximumachievablevalueof146.25percentofbasesalarydividedbythevalue oftheperformanceshareatthemomentofgrantintherespectiveyear.In2012,thefixednumbercalculationhasbeen conducted.

Oncethesharesareunconditionallyawardedafterfulfillmentoftheperformanceconditions,theshareswillberetained (foralock-upperiod)bytheBoardofManagementmemberforatleasttwoyearsafterthedateofunconditionalaward oruntiltheterminationofemployment,whicheverperiodisshorter.ASMLaccountsforthisshareawardperformance planasavariableplan.

DetailsofperformancesharesgrantedtomembersoftheBoardofManagementareasfollows:

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
					EUR
E.Meurice	4/18/2012	Conditional	No	73,570	37.33	4/18/2015	-	4/18/2017
	4/13/2011	Conditional	No	88,732	28.29	4/13/2014	-	4/13/2016
	2/1/2010	Conditional	No	88,732	22.93	2/1/2013	-	2/1/2015
	2/2/2009	Unconditional	No	57,002	13.05	2/2/2012	48,859	1 2/2/2014
	2/4/2008	Unconditional	No	57,002	18.18	2/4/2011	48,859	1 2/4/2013
	1/17/2007	Unconditional	Yes	66,338	20.39	1/17/2010	51,807	1/17/2012
P.T.F.M.Wennink	4/18/2012	Conditional	No	45,689	37.33	4/18/2015	-	4/18/2017
	4/13/2011	Conditional	No	54,974	28.29	4/13/2014	-	4/13/2016
	2/1/2010	Conditional	No	54,974	22.93	2/1/2013	-	2/1/2015
	2/2/2009	Unconditional	No	35,287	13.05	2/2/2012	30,246	1 2/2/2014
	2/4/2008	Unconditional	No	35,287	18.18	2/4/2011	30,246	1 2/4/2013
	1/17/2007	Unconditional	Yes	41,111	20.39	1/17/2010	32,106	1/17/2012
M.A.vandenBrink	4/18/2012	Conditional	No	48,387	37.33	4/18/2015	-	4/18/2017
	4/13/2011	Conditional	No	58,256	28.29	4/13/2014	-	4/13/2016
	2/1/2010	Conditional	No	58,256	22.93	2/1/2013	-	2/1/2015
	2/2/2009	Unconditional	No	37,458	13.05	2/2/2012	32,107	1 2/2/2014
	2/4/2008	Unconditional	No	37,458	18.18	2/4/2011	32,107	1 2/4/2013
	1/17/2007	Unconditional	Yes	42,980	20.39	1/17/2010	33,565	1/17/2012
F.J.vanHout	4/18/2012	Conditional	No	40,023	37.33	4/18/2015	-	4/18/2017
	4/13/2011	Conditional	No	48,293	28.29	4/13/2014	-	4/13/2016
	2/1/2010	Conditional	No	48,293	22.93	2/1/2013	-	2/1/2015
	2/2/2009	Unconditional	No	31,021	13.05	2/2/2012	26,589	1 2/2/2014
F.J.M.Schneider-	4/18/2012	Conditional	No	38,944	37.33	4/18/2015	-	4/18/2017
Maunoury	4/13/2011	Conditional	No	46,886	28.29	4/13/2014	-	4/13/2016
	2/1/2010	Conditional	No	46,886	22.93	2/1/2013	-	2/1/2015

1 Thenumberofsharesincludedinthelock-upperiodarereducedasaresultofthesyntheticsharebuybackduetoanexchangeforeach100ordinary sharesfor77ordinaryshares.Thenumberofsharesvestedin2012afterthesyntheticsharebuybackforMr.Meurice,Mr.Wennink,Mr.vandenBrink andforMr.vanHoutare37,621shares,23,289shares,24,722sharesand20,474shares,respectively.Thenumberofsharesvestedin2011afterthe syntheticsharebuybackforMr.Meurice,Mr.WenninkandforMr.vandenBrinkare37,621shares,23,289sharesand24,722share,respectively.

Pension Benefits

MembersoftheBoardofManagementareofferedapensionplanbasedondefinedcontribution.Thetotaldefined contributionisapercentageofthepensionablesalaryandisdependentontheparticipant'sageatthebeginningof theyear.In2011,compensationwaspaidtotheBoardofManagementregardingthespouse/orphanriskpremiumto aligntheBoardofManagementpensionarrangementwithseniormanagement.Thisconcernedareimbursementforrisk premiumsthatwereerroneouslypaidbytheparticipantsinthepast.

Benefits upon termination of employment

Termofappointment/employment

MembersoftheBoardofManagementappointedafterthe2004amendmentoftheArticlesofAssociation,are appointedforaperiodoffouryears,afterwhichreappointmentispossibleforconsecutivefour-yearterms.Messrs.P. WenninkandM.vandenBrink'sappointmenttotheBoardofManagementisforanindefiniteperiodoftime,astheir initialappointmentwasbefore2004.Theexistingemploymentcontracts,includingallrightsandobligationsunderthese contracts,willbehonored.

Severanceagreement

EmploymentagreementswiththeBoardofManagementmembersconcludedpriortoMarch31,2004(i.e.Messrs. WenninkandVandenBrink)donotcontainspecificprovisionsregardingbenefitsuponterminationofthose agreements.Potentialseverancepaymentsinsuchcasewillbeaccordingtoapplicablelaw(e.g.cantonalformulainthe Netherlands).

EmploymentagreementsformembersoftheBoardofManagementappointedafterMarch31,2004(i.e.Messrs. Meurice,VanHoutandSchneider-Maunoury)docontainspecificprovisionsregardingbenefitsuponterminationofthose agreements.

Ifwegivenoticeofterminationoftheemploymentagreementforreasonswhichareexclusivelyormainlyfoundinacts oromissionsonthesideoftheBoardofManagementmember,noseveranceamountwillbegranted.Ifthisisnotthe case,aseveranceamountequaltooneyearbasesalaryoraseveranceconsistentwiththeDutchLaborlawswillbe madeavailableupontheeffectivedateoftermination.

ThisseverancepaymentwillalsobemadeavailableincasetheBoardofManagementmembergivesnoticeof terminationoftheemploymentagreementduetoasignificantdifferenceofopinionbetweentherespectiveexecutives andtheSupervisoryBoardregardinghisemploymentagreement,hisfunctionorourstrategy.

Changeofcontrol

BoardofManagementmemberswithanemploymentagreementdatedafterMarch31,2004(i.e.Messrs.Meurice,Van HoutandSchneider-Maunoury)shallalsobeentitledtotheaforementionedseveranceamountintheeventASMLorits legalsuccessorgivesnoticeofterminationduetoaChangeofControl(asdefinedintheemploymentagreement)orif theBoardofManagementmembergivesnoticeoftermination,whichisdirectlyrelatedtosuchChangeofControland suchnoticeisgivenwithintwelvemonthsfromthedateonwhichtheChangeofControloccurs.

Inordertocomplywiththehigheststandardsofcorporategovernance,theSupervisoryBoarddecidedtomitigatethe potentialbenefitofaChangeofControlunderthelong-termincentivearrangements.Thisarrangemententailsthatthe sharepricewillbefixedontheaverageofi)theaverageclosingsharepriceoveraperiodof15tradingdayspriorto firstpublicannouncementofChangeofControlnegotiations,andii)theaverageclosingsharepriceoveraperiodof30 tradingdayspriortoclosingofthetransaction.

Supervisory Board

TheannualremunerationforSupervisoryBoardmemberscoverstheperiodfromoneAGMtothenextone.Theannual remunerationispaidinquarterlyinstallmentsstartingaftertheAGM.In2011theSupervisoryBoardproposedandthe GeneralMeetingofShareholdersapprovedanadjustmentoftheremunerationoftheSupervisoryBoard,effectiveasper April1,2011.FurthermoretheGeneralMeetingofShareholdersapprovedafurtherincreaseoftheannual(fixed)feewith amaximumamountofEUR5,000dependingoncircumstances,whichtheSupervisoryBoardimplementedperApril1, 2012.

ThefollowingtablesetsforthanoverviewoftheremunerationawardedtoSupervisoryBoardMembersin2012and 2011:

Year ended December 31, 2012	Total	Supervisory board	Audit committee	Remuneration committee	Selection and nomination committee	Technology and strategy committee	Other1,2
ArthurP.M.vanderPoel	94,750	68,750	10,000	-	8,000	8,000	-
JosW.B.Westerburgen	96,116	48,750	-	12,000	12,000	-	3 23,366
OBBilous	104,750	78,750	-	-	8,000	8,000	10,000
FritzW.Fröhlich	68,750	48,750	15,000	-	-	-	5,000
Hendrika(Ieke)C.J.vanden Burg	56,750	48,750	-	8,000	-	-	-
WilliamT.Siegle	90,750	78,750	-	-	-	12,000	-
PaulineF.M.vanderMeerMohr	56,750	48,750	-	8,000	-	-	-
WolfgangH.Ziebart	72,750	48,750	10,000	6,000	4 -	8,000	-
Total	641,366	470,000	35,000	34,000	28,000	36,000	38,366

Year ended December 31, 2011	Total	Supervisory board	Audit committee	Remuneration committee	Selection and nomination committee	Technology and strategy committee	Other1,2
ArthurP.M.vanderPoel	88,250	62,500	10,000	-	7,875	7,875	-
JosW.B.Westerburgen	66,750	43,750	-	11,500	11,500	-	-
OBBilous	99,500	73,750	-	-	7,875	7,875	10,000
FritzW.Fröhlich	62,500	43,750	15,000	-	-	-	3,750
Hendrika(Ieke)C.J.vanden Burg	51,625	43,750	-	7,875	-	-	-
WilliamT.Siegle	85,250	73,750	-	-	-	11,500	-
PaulineF.M.vanderMeerMohr	51,625	43,750	-	7,875	-	-	-
WolfgangH.Ziebart	61,625	43,750	10,000	-	-	7,875	-
Total	567,125	428,750	35,000	27,250	27,250	35,125	13,750

1 TocompensateforcertainobligationsASMLhastowardstheU.S.governmentasaresultoftheacquisitionofSiliconValleyGroupin2001,oneU.S. memberreceivesanadditionalEUR10,000tofulfilltheseobligations.

2 Inadditiontotheannualfixedfee,theVice-ChairmanoftheSupervisoryBoardreceivesEUR5,000tofulfillthisrole.Astheadjustmentofthe SupervisoryBoard'sremunerationbecameeffectiveasperApril1,2011,theVice-Chairmanfeepaidoverthefinancialyear2011amountedtoEUR 3,750.

3 In2012JosWesterburgenreceivedaprovisionalpaymentrelatedtothesupervisoryboardremunerationfortheperiodJanuarytoApril2013.As legislationregardingVATregistrationforSupervisoryBoardmemberswillchangeasfom2013andJosWesterburgenwillresignin2013itwasdecided topaytheremunerationfeeinadvance.

4 During2012WolfgangH.ZiebartwasappointedasmemberoftheRemunerationCommitteeandthereforereceivedpartialfee.

Inaddition,anetcostallowancewaspaidtoeachSupervisoryBoardmemberin2012,amountingtoEUR1,800per year,andEUR2,400peryearfortheChairmanoftheSupervisoryBoard.

MembersoftheBoardofManagementand/orSupervisoryBoardarefreetoacquireordisposeofASMLsharesor optionsfortheirownaccount,providedtheycomplywiththeapplicableASMLInsiderTradingRules.Thosesecurities arenotpartofmembers'remunerationfromusandarethereforenotincluded.NoneofthemembersoftheSupervisory BoardcurrentlyownssharesoroptionsonASMLshares.

31. Research and development costs

R&DcostsincludeR&DcreditsofEUR10.3millionandEUR17.9millionduring2012and2011,respectively.R&D creditsrelatetoworld-wide(inter)governmentalfundingforcertainstrategicdevelopmentprograms.

32. Interest income and expense

InterestincomeofEUR16.6million(2011:EUR43.7million)mainlyrelatestointerestincomeondeposits,short-term investments,moneymarketfundsandonbankaccounts.InterestexpenseofEUR20.0million(2011:EUR26.4million) mainlyconsistsofnetinterestexpenseofourEurobondandrelatedinterestrateswaps.

Interestoncashpoolsisreportedonagrossbasisintheconsolidatedincomestatementunderbothinterest incomeandinterestexpense.FromaneconomicandlegalperspectivetheinterestoncashpoolsofEUR4.2 million(2011:EUR6.8million)interestincomenetsoffagainstthesameamountofinterestexpense.

33. Vulnerability due to certain concentrations

ASMLreliesonoutsidevendorstomanufacturethecomponentsandsubassembliesusedinitssystems,eachof whichisobtainedfromasolesupplieroralimitednumberofsuppliers.ASML'srelianceonalimitedgroupofsuppliers involvesseveralrisks,includingapotentialinabilitytoobtainanadequatesupplyofrequiredcomponentsandreduced controloverpricingandtimelydeliveryofthesesubassembliesandcomponents.Inparticular,fromtimetotime,the numberofsystemsASMLhasbeenabletoproducehasbeenlimitedbytheproductioncapacityofZeiss.Zeissis currentlyASML'ssoleexternalsupplieroflensesandothercriticalopticalcomponentsandiscapableofproducing theselensesonlyinlimitednumbersandonlythroughtheuseofitsmanufacturingandtestingfacilityinOberkochen andWetzlar,Germany.During2012,ASML'sproductionwasnotlimitedbythedeliveriesfromZeiss.

ForourlightsourcetechnologyusedinourEUVsystemswealsodependonalimitednumberofsuppliers.Ourmain supplierforlightsourcetechnologyisCymer.WehaveagreedtoacquireCymer,subjecttocertainclosingconditions. WebelievethattheacquisitionofCymer,ifcompleted,willhelpusachievingourstrategicobjectiveofdeliveringan economicallyviableEUVscannertosemiconductormanufacturersassoonasreasonablypossible.Webelievethat combiningCymer'sexpertiseinEUVlightsourceswithourexpertiseinlithographysystemsdesignandintegrationwill reducetherisksrelatedtothesuccessfuldevelopmentofandacceleratetheintroductionofEUVtechnology.Without theacquisition,wedonotbelievethatCymerwouldhavesufficientresourcestocompletethedevelopmentofthe EUVsourceandasaresult,theonlywaytomaketheEUVsourcedevelopmentsuccessfulwithoutadditionaldelayis throughtheacquisitionofCymer.Inadditionwebelievethattheacquisitionwillallowustomoreeffectivelypartition responsibilitiesbetweenCymer,itssuppliersanduswithrespecttoEUVlightsourcedevelopment,reducingriskand increasingdevelopmentspeed.

Completionoftheacquisitionissubjecttocustomaryclosingconditions,includingexpirationorterminationofthe applicablewaitingperiodundertheHart-Scott-RodinoActandreceiptofapprovalsunderotherforeigncompetition laws.Onfebruary5,2013,theCymerStockholdersapprovedthemergeragreement.Weexpectthetransactiontoclose inthefirsthalfof2013,thereisnoassurancethatthetransactionwillbecompletedwithintheexpectedtimeperiodor atall.

Businessfailureorinsolvencyofoneofourmaincustomersmayhaveanadverseeffectonourbusiness,financial conditionandresultsofoperations.SeeNote28.

34. Principal Accountant Fees and Services

DeloitteAccountantsB.V.hasservedasourindependentauditorforeachofthetwofinancialyearsuptoDecember 31,2012.Thefollowingtablesetsouttheaggregatefeesforprofessionalauditservicesandotherservicesrenderedby DeloitteAccountantsB.V.anditsmemberfirmsand/oraffiliatesin2012and2011:

	2012			2011
	Deloitte Accountants	Deloitte		Deloitte Accountants	Deloitte
Year ended December 31	B.V.	Network	Total	B.V.	Network	Total
(in thousands)	EUR	EUR	EUR	EUR	EUR	EUR
Auditfeesinrelationtoannualreports	1,002	-	1,002	1,022	-	1,022
Otherauditfees	-	352	352	40	382	422
Audit-relatedfees	149	-	149	49	-	49
Taxfees	-	353	353	-	322	322
Other	-	247	247	-	-	-
Principal accountant fees and services	1,151	952	2,103	1,111	704	1,815

Auditfeesandotherauditfees

AuditfeesprimarilyrelatetotheauditofourannualconsolidatedfinancialstatementssetoutinourAnnualReporton Form20-F,ourStatutoryAnnualReport,agreeduponproceduresonourquarterlyfinancialresultsandservicesrelated tostatutoryandregulatoryfilingsofASMLHoldingN.V.anditssubsidiaries.

Audit-relatedfees

Audit-relatedfeesmainlyrelatedtovariousauditservicesnotrelatedtotheASML'sconsolidatedfinancialstatements.

Year ended December 31 (in thousands)	2012 EUR	2011 EUR
CorporateIncomeTaxcomplianceservices	123	73
Taxassistanceforexpatriateemployees	79	179
Othertaxadvisoryandcompliance	151	70
Tax fees	353	322

TheAuditCommitteehasapprovedtheexternalauditplanandrelatedauditfeesfortheyear2012.TheAudit Committeehasadoptedapolicyregardingauditandnon-auditservices,inconsultationwithDeloitteAccountantsB.V. Thispolicyensurestheindependenceofourauditorsbyexpresslysettingforthallservicesthattheauditorsmaynot performandreinforcingtheprincipleofindependenceregardlessofthetypeofworkperformed.Certainnon-audit services,suchascertaintax-relatedservicesandacquisitionadvisoryservices,arepermitted.TheAuditCommitteepreapprovesallauditandnon-auditservicesnotspecificallyprohibitedunderthispolicyandreviewstheannualexternal auditplanandanysubsequentengagements.

TheAuditCommitteewillmonitorcompliancewiththenewDutchrulesonnon-auditservicesprovidedbyourauditor, whichoutlinesstrictseparationofauditandadvisoryservicesforDutchpublicinterestentities.Furthermore,wewill evaluatetheimplicationofthemandatoryfirmrotation(notapplicabletofinancialyearsbeforeJanuary1,2016)which appliestoallDutchpublicinterestentities.

35. Customer Co-Investment Program

Overview

OnJuly9,2012,weannouncedourCustomerCo-InvestmentProgramtoaccelerateourdevelopmentofEUVtechnology beyondthecurrentgenerationandourdevelopmentoffuture450mmsiliconwafertechnology.Theparticipating customersagreedtofundEUR1.38billionofourresearchanddevelopmentprojectsfrom2013through2017.This programcreatesrisksharingwithsomeofourlargestcustomerswhiletheresultsofASML'sdevelopmentprogramswill beavailabletoeverysemiconductormanufacturerwithnorestrictions.TheR&DfundingprogramintheCustomerCo-InvestmentProgramconsistsoftwofundingprojects:a450mmtechnologydevelopmentprojectandanext-generation EUVdevelopmentproject.ASMLhasenteredintoNonRecurringEngineering("NRE")fundingagreementswiththe participatingcustomers.

Inadditiontothefundingcommitmentsdescribedabove,theparticipatingcustomershaveinvestedinordinaryshares equal,inaggregate,to23percentofASML'sissuedsharecapital(calculatedgivingeffecttoourSyntheticShare BuybackinNovember2012).Theproceedsoftheshareissuance,EUR3.85billion,werereturnedtotheholdersof ordinaryshares(excludingtheparticipatingcustomers)throughaSyntheticShareBuybackexecutedinNovember2012. ForfurtherinformationregardingtheSyntheticShareBuyback,seeNote18toourconsolidatedfinancialstatements.

Description of Investment Agreements, Shareholder Agreements and NRE Funding Agreements

InconnectionwiththeCustomerCo-InvestmentProgram,ASMLenteredintoaninvestmentagreement,ashareholder agreementandNREfundingagreementswitheachoftheparticipatingcustomers.Intelisthelargestparticipantinthe program,withanaggregatefundingcommitmentofEUR829millionandaninvestmentin15percentofourordinary shares(calculatedgivingeffecttoourSyntheticShareBuybackinNovember2012).Adescriptionoftheinvestment agreement,shareholdersagreementandNREfundingagreementsbetweenASMLandIntelissetoutbelow.The agreementsbetweenASMLandtheotherprogramparticipants-TSMC(whichacquired5percentofoursharesand madeaEUR277millionfundingcommitment)andSamsung(whichacquired3percentofoursharesandmadeaEUR 276millionfundingcommitment)areonsubstantiallythesametermsasthoseagreedwithIntel.Shareswereacquired byDutchfoundations("Stichtingen")establishedforeachparticipant.

Investment Agreements

PursuanttotheinvestmentagreementbetweenASMLandIntel,datedJuly9,2012("theIntelInvestmentAgreement"), ASMLhasissuedanddeliveredtoIntelStichtingordinarysharesequalto15percentoftheissuedordinaryshareswith simultaneousissuancebytheIntelStichtingtoIntelofthecorrespondingdepositaryreceipts.

PursuanttotheinvestmentagreementbetweenASMLandTSMC,datedAugust5,2012(the"TSMCInvestment Agreement")ASMLhasissuedanddeliveredtoStichtingAdministratiekantoorTSMC("TSMCStichting")ordinaryshares equalto5percentoftheissuedordinaryshareswithsimultaneousissuancebytheTSMCStichtingtoTSMCofthe correspondingdepositaryreceipts.

PursuanttotheinvestmentagreementbetweenASMLandSamsung,datedAugust27,2012(the"SamsungInvestment Agreement"andtogetherwiththeIntelInvestmentAgreementandTSMCInvestmentAgreement,the"Investment Agreements"),ASMLhasissuedanddeliveredtotheSamsungStichtingordinarysharesequalto3percentoftheissued ordinaryshareswithsimultaneousissuancebytheSamsungStichtingtoSamsungofthecorrespondingdepositary receipts.

ThesubscriptionpricefortheordinarysharesundertheInvestmentAgreementswasEUR39.91perordinaryshare, whichistheaverageofthevolumeweightedaveragepriceoftheordinarysharesonNYSEEuronextAmsterdamforthe twentytradingdaysuptoandincludingJuly6,2012.

Baseduponthesubscriptionprice(EUR39.91)includedintheInvestmentAgreements,theequityparticipationofIntel (15percent),TSMC(5percent)andSamsung(3percent)amounttoEUR2,513million,EUR838millionandEUR503 million,respectively.

UndertheIntelInvestmentAgreements,ASMLhasagreedtoindemnifytheparticipatingcustomersandtheiraffiliates forcertainlossesandexpensesrelatedtobreachesofrepresentations,warranties,covenantsandagreementsinthe InvestmentAgreementsandwithrespecttocertainlegalproceedingsrelatedthereto,subjecttocertainlimitations.

Shareholder Agreements

InconnectionwiththeissuanceofsharespursuanttotheIntelInvestmentAgreement,onSeptember12,2012ASML, IntelandtheIntelStichtingenteredintoashareholderagreement(the"ShareholderAgreement")whichgovernscertain mattersrelatingtotheholdingofandfurtherinvestmentbyIntelinordinarysharesofASML,directlyandindirectly throughtheIntelStichting,includingthemattersdescribedbelow.

TheshareholderagreementsbetweenASMLandtheotherprogramparticipants(TSMCandSamsung)areon substantiallythesametermsasthoseagreedwithIntel.

Voting Restrictions

PursuanttotheIntelShareholderAgreement,Intel(andtheIntelStichting)willnotbeentitledtovotetheordinary sharesthatacquiredbytheIntelStichtingaspartoftheCustomerCo-InvestmentProgramoranyotherordinaryshares otherwisetransferredtotheIntelStichting(underthecircumstancesdescribedunder"Standstill;AdditionalPurchases" below)priortoaShareholderAgreementTerminationEvent(asdefinedbelow),exceptwhenaSuspensionEvent(as describedbelow)occursandiscontinuingorwherethefollowingmattersareproposedatanyGeneralMeeting(the "VotingRestrictions"):(i)anissuanceofASMLsharesorgrantofrightstosubscribeforASMLsharesrepresenting25 percentormoreoftheissuedandoutstandingsharecapitalofASMLortherestrictionorexclusionofpre-emptionrights relatingthereto(ineachcase,onanaggregatebasisduringthepreceding12months)orthedesignationoftheBoardof Managementastheauthorizedbodytoresolveonthesematters;(ii)anauthorizationtorepurchase25percentormore ofASML'sissuedandoutstandingsharecapitalonanaggregatebasisduringthepreceding12months;(iii)theapproval ofasignificantchangeintheidentityornatureofASMLorourbusiness,includingatransferofallorsubstantiallyall businessorassetsofASMLandoursubsidiariestoathirdparty,theestablishmentorcancellationofalong-lasting cooperationofessentialimportancewithathirdpartyandanacquisitionordispositionofaninterestinthecapitalor assetsofapersonwithavalueofatleastonethirdoftheassetsofASML(onaconsolidatedbasis);(iv)anamendment toASML'sArticlesofAssociationthatwouldmateriallyaffectthespecificvotingrightsofIntel,wouldmateriallyaffect theidentityornatureofASMLorourbusiness,orwoulddisproportionately(oruniquely)andadverselyaffecttherights orbenefitsattachedtoorderivedfromtheordinarysharesheldbyIntelthroughtheIntelStichtingascomparedtothe shareholders;(v)thedissolutionofASML;and(vi)anymergerordemergerwhichwouldresultinamaterialchangeinthe identityornatureofASMLoritsbusiness.

Standstill, Lock-up and Orderly Market Arrangements

Standstill;AdditionalPurchases

Subjecttocertainexceptions,pursuanttotheShareholderAgreement,Intel(oritsaffiliates)maynot,priortothe six-yearanniversaryofthedateoftheIntelShareholderAgreement(the"StandstillPeriod"),acquiremorethan19.9 percentoftheoutstandingsharecapitalofASMLwithoutASML'spriorapproval(the"StandstillRestriction").Thereis anexceptionfromtheStandstillRestrictioninthecaseofa'suspensionevent',whichincludescertaincircumstances whereathirdpartyhasacquiredormadeanoffertoacquireatleast20percentofASML'soutstandingshares,andthe StandstillRestrictionwillterminateupontheoccurrenceofaShareholderAgreementTerminationEvent.

TheShareholderAgreementpermitsIntel(anditsaffiliates)toacquireupto4.99percentofASML'soutstandingshares (otherthansharesacquiredthroughtheCustomerCo-InvestmentProgram)thatmaybeheldoutsidetheIntelStichting. ForanyadditionalASMLsharesthatIntel(oritsaffiliates)acquiresinexcessof4.99percentoftheoutstandingshares ofASML,IntelisrequiredtodepositsuchshareswiththeIntelStichtinginexchangeforDepositaryReceipts.Shares helddirectlybyInteloritsaffiliates(andwhichnotrequiredtobedepositedwiththeIntelStichting)arenotsubjectto theVotingRestrictions,orLock-UpRestrictions(asdefinedbelow),butaresubjecttotheStandstillRestriction.

TheIntelStichtingwillcontinuetoholdASMLsharesownedbyIntel(notwithstandingterminationoftheStandstill Period)untiltheearlierof(i)suchtimeasIntelowns(directlyorthroughtheIntelStichting)lessthan2percentofASML's outstandingshares(therelevantpercentageis1percentfortheotherparticipatingcustomers)(ii)thedateofnotification toASMLbyparticipatingcustomersthattheaggregateamountofASML'soutstandingsharesownedbyInteland theotherparticipatingcustomersrepresentslessthan5percentofASML'soutstandingsharesand(iii)aShareholder AgreementTerminationEvent(asdefinedbelow),followingwhichtimeDepositaryReceiptswillbeexchangedforthe underlyingASMLshares.IncaseIntelwouldacquireASMLshareswithin18monthsafteraneventdescribedunder (i)or(ii)above,anyASMLsharesheldbyIntelinexcessof4.99percentoftheoutstandingsharesofASMLmustbe transferredto(andheldby)theIntelStichting.

Lock-up;OrderlySellDown

Intelmaynot,withoutpriorwrittenconsentofASML,transferanyordinarysharesorDepositaryReceiptsuntilthe earliestof(i)twoyearsandsixmonthsafterthedateoftheIntelShareholderAgreement,(ii)terminationoftheNRE fundingagreements,and(iii)theoccurrenceofaShareholderAgreementTerminationEvent((i),(ii)and(iii)together,the "Lock-UpRestriction").TheLock-UpRestrictiondoesnotapplyincertaincircumstanceswhereathirdpartyoffersto acquireatleast20percentofASML'sshares.IntelisnotpermittedtotransfertheASMLordinarysharesitacquiredin theprograminconnectionwithanoffer(beforetheendoftheoffer),ormakeanypublicstatementinsupportofsuch offer,thatisnotrecommendedbytheASMLSupervisoryBoardorManagementBoard,exceptinlimitedcircumstances.

Inaddition,Intelmaynot(evenaftertheLock-UpPeriodhasended),withoutwrittenconsentofASML,transferon NYSEEuronextAmsterdam,NASDAQoranothersecuritiesexchangemorethan(i)inrespectofIntel,4percentofthe outstandingsharesofASML(therelevantpercentageis1.5percentforSamsungand2.5percentforTSMC).Thereare alsorestrictionsonIntel'sabilitytotransferASMLsharestocertaincompetitorsorcustomersofASML.

Termination

TheIntelShareholderAgreementwillterminateupontheoccurrenceofthefollowingevents(eacha"Shareholder AgreementTerminationEvent")(i)certainchangeofcontroltransactionsweretheshareholdersofASMLpriortosuch atransactionarenolongerentitledtoexerciseatleast50percentofthevotesintheGeneralMeetingfollowingsuch transaction,(ii)intheeventofadelistingoftheOrdinarySharesfromNYSEEuronextAmsterdamordelistingfrom NASDAQ(exceptforcertainvoluntarydelistingsfromNASDAQ),(iii)thewindinguporliquidationofASML,or(vi)inthe eventthatallDepositaryReceiptsareexchangedforASMLsharesandInteldoesnotacquireASMLsharesinexcessof 4.99percentoftheoutstandingASMLshareswithin18monthsofsuchexchange(see"Standstill;AdditionalPurchases" above).

NRE Funding Agreements

OnJuly9,2012,ASMLandIntelenteredintotwoNREfundingagreementspursuanttowhichIntelwillsupportASML's R&Dcostsandprojectexpenditures.Oneagreementrelatestothedevelopmentof450mmlithographyequipment(the "Intel450mmNREFundingAgreement"andtogetherwiththeIntelEUVNREFundingAgreement,the"IntelNREFunding Agreements")andtheotherrelatestothedevelopmentofEUVlithographyequipment(the"IntelEUVNREFunding Agreement")andtogetherwiththe450mmNREFundingAgreement,"theIntelNREFundingAgreements".Intelhas committedtoprovideEUR553millioninfundingundertheIntel450mmNREFundingAgreementandEUR276million infundingundertheIntelEUVNREFundingAgreement,payableovertherespectiveterms(2013-2017)oftheIntelNRE FundingAgreements.

OnAugust5,2012,ASMLandTSMCenteredintotheTSMCNREfundingagreement(the"TSMCNREFunding Agreement")pursuanttowhichTSMCwillsupportASML'sR&Dcostsandprojectexpendituresrelatingtothe

developmentof450mmlithographyequipmentandEUVplatforms.TSMChascommittedtoprovideEUR277millionin fundingpayableovertheterm(2013-2017)oftheTSMCNREFundingAgreement.

OnAugust27,2012,ASMLandSamsungenteredintotheSamsungNREfundingagreement(the"SamsungNRE FundingAgreement")pursuanttowhichSamsungwillsupportASML'sR&Dcostsandprojectexpendituresrelatingto thedevelopmentof300mm/450mmlithographyequipmentandEUVplatforms.Samsunghascommittedtoprovide EUR276millioninfundingpayableovertheterm(2013-2017)oftheSamsungNREFundingAgreement.

UndertheIntelNREFundingAgreements,theTSMCNREFundingAgreement,andtheSamsungNREFunding Agreement(togetherthe"NREFundingAgreements"),ASMLwillretainsolecontroloverthedevelopmentof450mm photolithographyequipmentandEUVplatformsandwillownallintellectualpropertycreatedbyASMLinconnection therewith.TheNREFundingAgreementsprovidethatifASML,initsreasonablediscretion,determinestoabandon eitherthe450mmorEUVdevelopmentproject,asaresultoftechnicalinfeasibilityorlackofsufficientindustrydemand, orifthethenremainingfundingexceedstheexpenditureestimateforthedevelopmentproject(450mmorEUV) thenthepartiesmayagreeonanalternativedevelopmentproject,andifnoalternativeisagreed,ASMLmayinvoice theparticipatingcustomersfortheremainingdueportionofcommittedfundingduringeachyearoftheremaining fundingperiodinwhichASML'sactualgrossR&DexpendituresexceedaminimumthresholdspecifiedintheNRE FundingAgreements.TheNREFundingAgreementswillterminateonDecember31,2017oruponpre-paymentbythe participatingcustomeroftheaggregateamountoffundingowedunderitsrespectiveNREFundingAgreement.

Commercial Agreement

OnJuly9,2012,ASMLandIntelenteredintoaCommercialAgreement,pursuanttowhichASMLandIntelestablished acontractualframeworkforInteltopurchaseequipmentrelatedtothe450mmandEUVnext-generationlithography equipment.Underthisagreement,Intelhascommittedtopurchasespecifiednumbersof450mmandEUVtools. Theagreementsetsforthpricingtermsforthetoolsaswellasmilestonesrelatedtoproductdeliveries,andprovides forcertaincommercialdiscountsintheformofcreditsinexchangeforIntel'searlypurchasecommitmentsand volumepurchasecommitmentsandforspecifiedadditionalcreditsintheeventthatcertainschedulesarenotmet.In addition,subjecttocertainconditions,ASMLhasagreedtoinstallsufficientcapacitytomeetIntel'sforecasted450mm lithographyequipmentneedsthrough2022.

Accounting Policies

TheInvestmentAgreements,ShareholderAgreements,NREFundingAgreementsandCommercialAgreementare accountedforasonetransactionwithseparatelyidentifiablecomponents.Thefollowingtwoseparatecomponentsare identified:(1)theshareissuance(governedbytheInvestmentAgreementandtheShareholderAgreement)and(2)the NREfundingandcommercialdiscountsandcredits(governedbytheNREFundingAgreement(s)andtheCommercial Agreement).

Thesharesissuedtotheparticipatingcustomersarerecordedatfairvaluebasedonquotedshareprices(EUR3,968.7 million)withtheremainingaggregatearrangementconsiderationallocatedtotheNREfundingandcommercialdiscounts andcredits.Thedifferencebetweenthefairvalueofthesharesandthesubscriptionpriceoftheshares(EUR39.91) isrecordedasadeductionfromequityuponissuanceoftheshares(EUR123.4million).Equityisincreasedtothefair valueofthesharesastheportionoftheNREfundingallocabletothesharesisreceivedovertheNREfundingperiod (2013-2017).Theamountsaredeemedreceivablesfromtheparticipatingcustomersintheircapacityasshareholdersof ASML.

ArelatedpartyrelationshipexistsbetweenASMLandIntelasaresultoftheequityinvestmentmadebyIntelaspartof theCustomerCo-InvestmentProgram.Basedonthecommercialdiscountsandcredits(governedbytheCommercial Agreement)andtherelatedpartyrelationship,allNREfundingwillbedeferredandrecognizedintheconsolidated incomestatementonlywhenthecommercialdiscountsandcreditsareearned.TheportionoftheNREfundingfrom TSMCandSamsung,notallocabletotheshares,willberecognizedintheconsolidatedincomestatementwhentheR&D costsrelatingtothedevelopmentof450mmlithographyequipmentandEUVplatformsarerecognizedovertheNRE fundingperiod.

ForfurtherdetailsregardingtheshareissuancestotheparticipatingcustomersandtheSyntheticShareBuyback effectuatedinconnectionwithourCustomerCo-InvestmentProgram,seeNote18.

36. Related Party Transactions

Consistentwithourcorporateresponsibilitiestooursurroundingcommunityandtogetherwithseveralothercompanies intheregion,inprioryearASMLenteredintoaloanagreementwithalocalsportsclubPSVN.V.;pursuanttowhich ASMLprovidedPSVN.V.,asofAugust1,2011,a14year,interestfree,subordinatedloanofEUR5.0million.AsofJune 30,2012thechairmanoftheSupervisoryBoardofASML,Mr.ArthurvanderPoelandChiefFinancialOfficerofASML, Mr.PeterWenninkresignedasmembersoftheSupervisoryBoardofPSVN.V.,thereforetheloanagreementwithPSV N.V.isconcludedtonolongerclassifyasarelatedpartytransactionfromthatdateonwards.

OnJuly9,2012,weannouncedourCustomerCo-InvestmentProgramtoaccelerateourdevelopmentofEUVtechnology beyondthecurrentgenerationandourdevelopmentoffuture450mmsiliconwafertechnology.Oneoftheparticipating customers,Intel,agreedtofundEUR829millionforourR&Dprojects.InadditionIntelalsoagreedtoinvestinordinary sharesequalto15percentofourissuedsharecapital.Duetotheequityinvestment,Intelisconsideredarelatedparty ofASMLasofJuly9,2012.

WehaveenteredintovariousagreementswithIntelandhaverecognizedsalesandincurredcostsofsystems, servicesandfieldoptionsprovidedbyASMLsincethedatethatIntelbecamearelatedparty.Webelievethatallsuch transactionshavebeenenteredintointheordinarycourseofbusinessatanarm'slengthbasis,withtheexceptionof certaintermsincludedintheagreementsenteredintoaspartoftheCustomerCo-InvestmentProgram:

• InvestmentAgreement:PursuanttotheIntelInvestmentAgreement,ASMLagreedtoissuetoIntelStichtingordinary sharesequalto15percentoftheissuedordinaryshareswhichtheIntelStichtingthenissuedtoIntelacorresponding numberofdepositaryreceiptsrepresentingtheseshares.Thesubscriptionpricefortheordinarysharesunderthe investmentagreementwasEUR39.91perordinaryshare,whichistheaverageofthevolumeweightedaverageprice oftheordinarysharesonEuronextforthetwentytradingdaysuptoandincludingJuly6,2012.Undertheinvestment agreement,ASMLhasagreedtoindemnifyIntelanditsaffiliatesforcertainlossesandexpensesrelatedtobreaches ofrepresentations,warranties,covenantsandagreementsintheinvestmentagreementandwithrespecttocertain legalproceedingsrelatedthereto,subjecttocertainlimitations.
• ShareholderAgreement:InconnectionwiththeissuanceoftheordinarysharestotheIntelStichting,Intelandits relevantsubsidiaries,theIntelStichtingandASMLhaveenteredintotheshareholderagreement,whichgoverns certainmattersrelatingtotheholdinganddisposingofandfurtherinvestmentsinordinarysharesbyIntel,directly andindirectlythroughtheIntelStichting.
• NREFundingAgreement:OnJuly9,2012,ASMLandIntelenteredintotheIntelNREFundingAgreementpursuantto whichIntelhasagreedtoprovidefundingforcertainofASML'sR&Dcostsandprojectexpenditures.Oneagreement relatestothedevelopmentof450mmlithographyequipment(the"Intel450mmNREFundingAgreement")andthe otherrelatestothedevelopmentofEUVlithographyequipment(the"IntelEUVNREFundingAgreement").Intel hascommittedtoprovidefundinginanaggregateamountofEUR553millionundertheIntel450mmNREFunding AgreementandfundinginanaggregateamountofEUR276millionundertheIntelEUVNREFundingAgreement, payableoverthetermoftherelevantagreement(2013-2017).ASMLwillretainsolecontroloverthedevelopment of450mmphotolithographyequipmentandEUVplatformsandwillownallintellectualpropertycreatedbyASML inconnectiontherewith.TheIntelNREFundingAgreementsprovidethatifASML,initsreasonablediscretion, determinestoabandoneitherthe450mmorEUVdevelopmentproject,asaresultoftechnicalinfeasibilityorlackof sufficientindustrydemand,orifthethenremainingfundingexceedstheexpenditureestimateforthedevelopment project(450mmorEUV)thenthepartiesmayagreeonanalternativedevelopmentprojectifnoalternativeisagreed, ASMLmayinvoiceIntelfortheremainingdueportionofcommittedfundingduringeachyearoftheremaining fundingperiodinwhichASML'sactualgrossR&Dexpendituresexceedaminimumthresholdspecifiedintherelevant agreement.TheNREfundingagreementswillterminateonDecember31,2017oruponpre-paymentbyIntelofthe aggregateamountoffundingowedundertherelevantfundingagreement.
• CommercialAgreement:OnJuly9,2012,ASMLandIntelenteredintotheCommercialAgreement,pursuantto whichASMLandIntelestablishedacontractualframeworkforInteltopurchaseequipmentrelatedtothe450mm andnext-generationEUVlithographyequipment.Underthisagreement,Intelhascommittedtopurchasespecified numbersof450mmandEUVtools.Theagreementsetsforthpricingtermsforthetoolsaswellasmilestonesrelated toproductdeliveries,andprovidesforcertaincommercialdiscountsintheformofcreditsinexchangeforIntel's earlypurchasecommitmentsandvolumepurchasecommitmentsandforspecifiedadditionalcreditsintheevent thatcertainschedulesarenotmet.Inaddition,subjecttocertainconditions,ASMLhasagreedtoinstallsufficient capacitytomeetIntel'sforecasted450mmlithographyequipmentneedsthrough2022.

ThetotalnetsalestoIntel(anditsaffiliates)fortheperiodfromJuly9,2012toDecember31,2012amountedtoEUR 301.7millionwhereastheoutstandingbalancesasofDecember31,2012amounttoEUR65.0million.

Exceptfortheabove,therehavebeennotransactionsduringourmostrecentfiscalyear,andtherearecurrentlyno transactions,betweenASMLoranyofitssubsidiaries,andanyothersignificantshareholderandanydirectororofficer oranyrelativeorspousethereofotherthanordinarycoursecompensationarrangements.Duringourmostrecentfiscal year,therehasbeenno,andatpresentthereisno,outstandingindebtednesstoASMLowedorowingbyanydirectoror officerofASMLoranyassociatethereof,otherthanthevirtualfinancingarrangementwithrespecttosharesandstock optionsasdescribedunderNote23and30.AllamountsduetoASMLunderthevirtualfinancingarrangementwere repaidduring2012.

37. Subsequent Events

Onfebruary5,2013,theCymerStockholdersapprovedthepreviouslyannouncedmergeragreement,datedOctober16, 2012atthespecialmeetingofCymerStockholders.SeeNote33foradditionalinformation.

Veldhoven,theNetherlands February12,2013

Preparedby TheBoardofManagement: EricMeurice PeterT.F.M.Wennink MartinA.vandenBrink FritsJ.vanHout FrédéricJ.M.Schneider-Maunoury

Company Financial Statements

Company Financial Statements

• 128 CompanyBalanceSheet
• 129 AbbreviatedCompanyIncomeStatement
• 130 NotestotheCompanyFinancialStatements

Company Balance Sheet

(Beforeappropriationofnetincome)

As of December 31	2012	2011
(in thousands)	EUR	EUR
Non-current assets
Investmentsinsubsidiaries	6,415,214	5,169,322
Loanstosubsidiaries	1,297	1,324
Deferredtaxassets	14,358	22,568
Derivativefinancialinstruments	101,651	92,534
Othernon-currentassets	1,474	2,091
Total non-current assets	6,533,994	5,287,839
Current assets
Amountsduefromsubsidiaries	219,326	445,497
Currenttaxassets	54,796	31,263
Derivativefinancialinstruments	44,727	40,052
Othercurrentassets	3,544	5,321
Short-terminvestments	550,017	-
Cashandcashequivalents	589,848	1,311,929
Total current assets	1,462,258	1,834,062
Total assets	7,996,252	7,121,901
Equity
CumulativePreferenceShares;EUR0.09nominalvalue;
700,000,000sharesauthorizedatDecember31,2012and2011;
noneissuedandoutstandingatDecember31,2012and2011;	-	-
OrdinarySharesB;EUR0.01nominalvalue;
9,000sharesauthorizedatDecember31,2012;
noneissuedandoutstandingperDecember31,2012;	-
notapplicableperDecember31,2011;		-
OrdinaryShares;EUR0.09nominalvalue;
699,999,000sharesauthorizedatDecember31,2012;
407,165,221issuedandoutstandingatDecember31,2012;
700,000,000sharesauthorizedatDecember31,2011;
413,669,257issuedandoutstandingatDecember31,2011;
Issuedandoutstandingshares	37,786	38,816
Sharepremium	932,968	920,478
Retainedearnings	2,341,048	1,525,238
Treasurysharesatcost	(465,848)	(417,837)
Legalreserves	349,901	159,039
Netincome	1,302,347	1,494,071
Total equity	4,498,202	3,719,805
Non-current liabilities
Long-termdebt	707,107	691,959
Deferredandothertaxliabilities	87,746	158,943
Total non-current liabilities	794,853	850,902
Current liabilities
Amountsduetosubsidiaries	2,669,294	2,498,042
Accruedandotherliabilities	19,279	19,254
Derivativefinancialinstruments	14,624	33,898
Total current liabilities	2,703,197	2,551,194
Total equity and liabilities	7,996,252	7,121,901

Year ended December 31	2012	2011
(in thousands)	EUR	EUR
Netincomefromsubsidiaries	1,255,478	1,555,277
Gain(Loss)aftertaxes	46,869	(61,206)
Net income	1,302,347	1,494,071

Notes to the Company Financial Statements

1. General Information

Thedescriptionofouractivitiesandourstructure,asincludedintheNotestotheconsolidatedfinancialstatements, alsoapplytotheCompanyfinancialstatements.

Inaccordancewitharticle362sub8Part9ofBook2oftheDutchCivilCode,wehavepreparedourCompanyfinancial statementsinaccordancewithaccountingprinciplesgenerallyacceptedintheNetherlands("DutchGAAP")applyingthe accountingprinciplesasadoptedintheconsolidatedfinancialstatements,exceptfortheaccountingforinvestmentsin subsidiariesandourconsolidatedSPE.InvestmentsinsubsidiariesandconsolidatedSPEarestatedatnetassetvalue asweeffectivelyexercisecontrolovertheoperationalandfinancialactivitiesoftheseinvestments.Thenetassetvalue isdeterminedonthebasisoftheIFRSaccountingprinciplesappliedbyASMLinitsconsolidatedfinancialstatements.

Inaccordancewitharticle402Part9ofBook2oftheDutchCivilCodetheCompanyIncomeStatementispresentedin abbreviatedform.

2. Summary of Significant Accounting Policies

Significant accounting policies

TheaccountingpoliciesusedinthepreparationoftheCompanyfinancialstatementsarethesameasthoseusedin thepreparationoftheconsolidatedfinancialstatements(inaccordancewitharticle362sub8Part9ofBook2ofthe DutchCivilCode).SeetheNotestotheconsolidatedfinancialstatements.Inadditiontothoseaccountingpolicies, thefollowingaccountingpolicyappliestotheCompanyfinancialstatements.Theaccompanyingcompanyfinancial statementsarestatedinthousandsofeuros("EUR")unlessotherwiseindicated.

Investments in subsidiaries

Investmentsinsubsidiariesarestatedatnetassetvalueasweeffectivelyexerciseinfluenceofsignificanceoverthe operationalandfinancialactivitiesoftheseinvestments.ThenetassetvalueisdeterminedonthebasisoftheIFRS accountingprinciplesappliedbyASML.

3. Investments in Subsidiaries

Changesininvestmentsinsubsidiariesduring2012and2011wereasfollows:

	2012	2011
(in thousands)	EUR	EUR
Balance,January1	5,169,322	3,416,355
Capitalcontributions	6,539	399,989
Capitalrepayment	(9,206)	-
Dividendsreceived	(5,299)	(238,519)
Netincomefromsubsidiaries	1,255,478	1,555,277
Effectofexchangerates	5,927	(12,142)
Derivativefinancialinstruments	(7,547)	47,353
Otherlegaltransfer	-	1,009
Balance, December 31	6,415,214	5,169,322

Changesinequityduring2012and2011wereasfollows:

		Issued and Outstanding Shares
Notes1	(in thousands)	Number2	Amount EUR	Share Premium EUR	Treasury Shares at Cost EUR	Retained Earnings EUR	Legal Reserves3 EUR	Net Income EUR	Total EUR
	Balance at January 1, 2011	436,593	40,713	922,341		(153,092) 1,096,669	130,378	985,453	3,022,462
	Appropriation of net income Components of statement of comprehensive income	-	-	-	-	985,453	-	(985,453)	-
	Netincome	-	-	-	-	-		- 1,494,071	1,494,071
5,18	Foreigncurrencytranslation,netof taxes	-	-	-	-	-	(13,971)	-	(13,971)
5,18	Financialinstruments,netoftaxes Total comprehensive income	- -	- -	- -	- -	- -	47,353	- 33,382 1,494,071	47,353 1,527,453
18	Purchases of treasury shares	(25,675)	-		(700,452)		-	-	(700,452)
18	Cancellation of treasury shares	-	(1,897)	710	373,801	(372,614)	-	-	-
23,29,30	Share-based payments	-	-	7,819	-	-	-	-	7,819
23,30	Issuance of shares	2,751	-	(10,392)	61,906	(16,346)	-	-	35,168
18	Dividend paid	-	-	-	-	(172,645)	-	-	(172,645)
18	Development expenditures	-	-	-	-	4,721	(4,721)	-	-
	Balance at December 31, 2011	413,669	38,816	920,478		(417,837) 1,525,238		159,039 1,494,071	3,719,805
	Appropriation of net income Components of statement of comprehensive income	-	-	-		- 1,494,071		- (1,494,071)	-
	Netincome	-	-	-	-	-		- 1,302,347	1,302,347
5,18	Foreigncurrencytranslation	-	-	-	-	-	5,927	-	5,927
5,18	Financialinstruments,netoftaxes	-	-	-	-	-	(7,547)	-	(7,547)
	Total comprehensive income	-	-	-	-	-		(1,620) 1,302,347	1,300,727
	Customer Co-Investment Program:
18,35	Issuanceofshares	96,566		8,691 3,968,677	-	-	-	-	3,977,368
18,35	Fairvaluedifferences4	-	-	(123,416)	-	-	-	-	(123,416)
18,35	Capitalrepayment5	(93,411)		(8,691) (3,845,261)	125,628	-	-	-	(3,728,324)
18	Purchases of treasury shares	(13,478)	-	-	(535,373)	-	-	-	(535,373)
18	Cancellation of treasury shares	-	(1,030)	-	294,752	(293,722)	-	-	-
23,29,30	Share-based payments	-	-	20,596	-	-	-	-	20,596
23,30	Issuance of shares	3,819	-	(8,106)	66,982	(3,165)	-	-	55,711
18 18	Dividend paid Development expenditures	- -	- -	- -	- -	(188,892) (192,482)	- 192,482	- -	(188,892) -
	Balance at December 31, 2012	407,165	37,786	932,968		(465,848) 2,341,048		349,901 1,302,347	4,498,202

1 Notereferencenumbersincludedbelowrelatetothenotestotheconsolidatedfinancialstatements.

2 AsofDecember31,2012,thenumberofissuedshareswas419,852,467.Thisincludesthenumberofissuedandoutstandingsharesof407,165,221 andthenumberoftreasurysharesof12,687,246.AsofDecember31,2011,thenumberofissuedshareswas431,294,790.Thisincludesthenumber ofissuedandoutstandingsharesof413,669,257andthenumberoftreasurysharesof17,625,533.

3 Legalreservesconsistofthehedgingreserve,thecurrencytranslationreserveandthereserveforcapitalizeddevelopmentexpenditures.Seebelow forfurtherinformation.

4 ThedifferencebetweenthefairvalueofthesharesandthesubscriptionpriceofthesharesissuedtotheparticipatingcustomersintheCustomerCo-InvestmentProgram.

5 In2012,aspartofthecapitalrepayment,EUR3,728.3millionofshareholders'equitywasreturnedtoourshareholders(excludingIntelCorporation ("Intel"),TaiwanSemiconductorManufacturingCompanyLtd.("TSMC")andSamsungElectronicsCorporation("Samsung")(collectivelyreferredto as"participatingcustomers"intheCustomerCo-investmentProgram))andthenumberofshareswasreducedby23percent.Seebelowforfurther information.

Share Capital

ASML'sauthorizedsharecapitalamountstoEUR126,000,000andisdividedinto:

• 700,000,000cumulativepreferenceshareswithanominalvalueofEUR0.09each;
• 699,999,000ordinaryshareswithanominalvalueofEUR0.09each;and
• 9,000ordinarysharesBwithanominalvalueofEUR0.01each.

PerDecember31,2012,419,852,467ordinaryshareswithanominalvalueofEUR0.09eachwereissuedandfullypaid in,ofwhich12,687,246ordinarysharesareheldbyusintreasury.NoordinarysharesBandnocumulativepreference sharesareissued.96,566,077depositaryreceiptsforordinarysharesareissuedwithourcooperation.

OurBoardofManagementhasthepowertoissueordinarysharesandcumulativepreferencesharesinsofarasthe BoardofManagementhasbeenauthorizedtodosobytheGeneralMeetingofShareholders(eitherbymeansofa resolutionorbyanamendmenttoourArticlesofAssociation).TheBoardofManagementrequiresapprovalofthe SupervisoryBoardforsuchanissue.TheauthorizationbytheGeneralMeetingcanonlybegrantedforacertain periodnotexceedingfiveyearsandmaybeextendedfornolongerthanfiveyearsoneachoccasion.Incasethe GeneralMeetingofShareholdershasnotauthorizedtheBoardofManagementtoissueshares,theGeneralMeetingof ShareholdersshallhavethepowertoissuesharesupontheproposaloftheBoardofManagement,providedthatthe SupervisoryBoardhasapprovedsuchproposal.

Shares issued in Customer Co-Investment Program

OnSeptember12,2012,weissued62,977,877ordinarysharestoStichtingAdministratiekantoorMAKTSJAB("Intel Stichting")and12,595,575ordinarysharestoStichtingAdministratiekantoorSamsungandonOctober31,2012, ASMLissued20,992,625ordinarysharestoStichtingAdministratiekantoorTSMCwithrespecttotheCustomerCo-InvestmentProgram.WereceivedanamountofEUR3,853.9millioninrelationtothesharesissuedundertheCustomer Co-InvestmentProgram.ForfurtherdetailsonourCustomerCo-InvestmentProgramseeNote35toourconsolidated financialstatements.

Synthetic Share Buyback

AttheEGMheldonSeptember7,2012,severalchangesintheArticlesofAssociationofASMLwereadopted,in connectionwiththeSyntheticShareBuybackeffectuatedinconnectionwiththeCustomerCo-InvestmentProgram. Consequently,onNovember24,2012theArticlesofAssociationwereamendedasfollows.Uponthefirstamendment theordinarysharestobeheldforthebenefitoftheparticipantstotheCustomerCo-InvestmentProgramwere convertedintoordinarysharesMandallotherordinaryshareswereconvertedintoordinarysharesA.Uponthesecond amendmenttheparvalueperordinaryshareAwasincreasedfromEUR0.09toEUR9.24attheexpenseoftheshare premiumreserve.Uponthethirdamendment,thenominalvalueperordinaryshareAwasreducedtoanamountofEUR 0.06,bydecreasingthenominalvalueperordinaryshareAbyanamountofEUR9.18,whichresultedinarepaymentof thesameamountpersharetoholdersofordinarysharesintowhichtheordinarysharesAwereconverted.Thefourth amendmentprovidedfortheconsolidationoftheordinarysharesAthroughtheexchangeofeach100ordinaryshares for77ordinaryshares,resultinginanincreaseofthenominalvalueperordinarysharefromEUR0.06toEUR0.09, wherebytheaggregatedifferenceisbookedattheexpenseofthesharepremiumreserve.Thefifthandlastamendment providedforthedeletionoftheshareclassMforparticipantstotheCustomerCo-InvestmentProgramandtheshare classAfortheothershareholders.TheordinarysharesMandAwereconvertedthereafterintoordinaryshareswithouta specificlettermarkattachedtoit.

TheseamendmentsinsubstanceconstituteaSyntheticShareBuybackinwhichweeffectivelyrepurchased93,411,216 sharesatanaveragepriceofEUR39.91foratotalamountofEUR3,728.3million.ThedifferenceofEUR125.6million betweenthecapitalrepaymentofEUR3,728.3millionandthenetproceedsfromissuanceofsharesofEUR3,853.9 millionrelatestothecapitalrepaymentonASML'streasuryshareswhichwasalsopartoftheSyntheticShareBuyback.

Ordinary shares

Eachordinaryshareconsistsof900fractionalshares.Fractionalsharesentitletheholderthereoftoafractionaldividend butdonotentitletheholderthereoftovotingrights.Onlythosepersonswhoholdsharesdirectlyintheshareregister intheNetherlands,heldbyusatouraddressat5504DRVeldhoven,deRun6501,theNetherlands,orintheNewYork shareregister,heldbyJPMorganChaseBank,N.A.,P.O.Box64506,St.Paul,MN55164-0506,UnitedStates,can holdfractionalshares.PersonswhoholdordinarysharesthroughthedepositsystemundertheDutchSecuritiesBank GiroTransactionsAct(Wet giraal effectenverkeer;the"GiroAct")maintainedbytheDutchcentralsecuritiesdepository (Nederlands Centraal Insituut voor Giraal Effectenverkeer B.V.,"EuroclearNederland")orthroughtheDepositaryTrust Company("DTC")cannotholdfractionalshares.Anordinaryshareentitlestheholderthereoftocastninevotesinthe GeneralMeetingofShareholders.AtourEGMheldonSeptember7,2012,theBoardofManagementwasauthorized fromSeptember7,2012throughOctober25,2013,subjecttotheapprovaloftheSupervisoryBoard,toissueshares and/orrightstheretorepresentinguptoamaximumof5.0percentofourissuedsharecapitalatApril25,2012,plus anadditional5.0percentofourissuedsharecapitalatApril25,2012thatmaybeissuedinconnectionwithmergers, acquisitionsand/or(strategic)alliances.

HoldersofASML'sordinaryshareshaveapreemptiverightofsubscription,inproportiontotheaggregatenominal amountoftheordinarysharesheldbythem,toanyissuanceofordinarysharesforcash,whichrightmayberestricted orexcluded.Ordinaryshareholdershavenoproratapreemptiverightofsubscriptiontoanyordinarysharesissuedfor considerationotherthancashorordinarysharesissuedtoemployees.IfauthorizedforthispurposebytheGeneral MeetingofShareholders(eitherbymeansofaresolutionorbyanamendmenttoourArticlesofAssociation),theBoard ofManagementhasthepowersubjecttoapprovaloftheSupervisoryBoard,torestrictorexcludethepreemptiverights ofholdersofordinaryshares.AtourEGMheldonSeptember7,2012,theBoardofManagementwasauthorizedfrom

September7,2012throughOctober25,2013,subjecttoapprovaloftheSupervisoryBoard,torestrictorexclude preemptiverightsofholdersofordinarysharesuptoamaximumof10.0percentofourissuedsharecapitalatApril25, 2012.Withthisauthorization,thecorrespondingauthorizationgrantedattheAnnualGeneralMeetingofShareholders ("AGM")heldonApril25,2012,ceasedtoapplytotheextentnotalreadyused.

Wemayrepurchaseourissuedordinarysharesatanytime,subjecttocompliancewiththerequirementsofDutchlaw andourArticlesofAssociation.AnysuchrepurchasesareandremainsubjecttotheapprovaloftheSupervisoryBoard andtheauthorizationofshareholdersatASML'sAGM,whichauthorizationmaynotbeformorethan18months.Atthe AGMheldonApril25,2012,theBoardofManagementhasbeenauthorized,subjecttoSupervisoryBoardapproval,to repurchasethroughOctober25,2013,uptoamaximumoftwotimes10.0percentofourissuedsharecapitalatApril 25,2012,atapricebetweenthenominalvalueoftheordinarysharespurchasedand110.0percentofthemarketprice ofthesesecuritiesonNYSEEuronextAmsterdamorNASDAQ.AtourAGMtobeheldonApril24,2013,weshallrequest theauthorizationfortheBoardofManagementtorepurchaseandcancelsharesforaperiodof18monthsasofthe 2013AGM,i.e.untilOctober24,2014,allinconformitywiththeprovisionsofthelawandourArticlesofAssociation.

Ordinary shares B

AspartofthemostrecentchangesinourArticlesofAssociation,adoptedattheEGMheldonSeptember7,2012, the9,000ordinarysharesBwithanominalvalueofEUR0.01wereintroduced.Apersonwhoholds(amultipleof)100 fractionalshares,mayexchangethosefractionalsharesforanordinaryshareB.EveryholderofanordinaryshareBis entitledtoone-ninth(1/9)ofadividend.EachordinaryshareBentitlestheholderthereoftocastonevoteattheGeneral Meeting.

Cumulative preference shares

In1998,wegrantedtothepreferencesharefoundation,"StichtingPreferenteAandelenASML"(the"Foundation")an optiontoacquirecumulativepreferencesharesinourcapital(the"PreferenceShareOption").Thisoptionwasamended andextendedin2003and2007.AthirdamendmenttotheoptionagreementbetweentheFoundationandASML becameeffectiveonJanuary1,2009,toclarifytheprocedurefortherepurchaseandcancellationofthepreference shareswhenissued.

PertheamendmentofourArticlesofAssociationofMay6,2011,thenominalvalueofthecumulativepreferenceshares wasincreasedtoEUR0.09.Thenumberofcumulativepreferencesharesincludedintheauthorizedsharecapitalwas decreasedto700,000,000.ThiswasdonetosimplifytheArticlesofAssociation,andtogiveeachsharetherighttocast onevoteintheGeneralMeetingofShareholders.

TheFoundationmayexercisethepreferenceshareoptioninsituationswhere,intheopinionoftheBoardofDirectors oftheFoundation,ourinterests,ourbusinessortheinterestsofourstakeholdersareatstake.Thismaybethecase ifapublicbidforourshareshasbeenannouncedorhasbeenmade,orthejustifiedexpectationexiststhatsucha bidwillbemadewithoutanyagreementhavingbeenreachedinrelationtosuchabidwithus.Thesamemayapplyif oneshareholder,ormoreshareholdersactinginconcert,holdasubstantialpercentageofourissuedordinaryshares withoutmakinganofferorif,intheopinionoftheBoardofDirectorsoftheFoundation,the(attempted)exerciseofthe votingrightsbyoneshareholderormoreshareholders,actinginconcert,ismateriallyinconflictwithourinterests,our businessorourstakeholders.

TheobjectivesoftheFoundationaretolookaftertheinterestsofASMLandoftheenterprisesmaintainedbyASML andofthecompanieswhichareaffiliatedinagroupwithASML,insuchawaythattheinterestsofASML,ofthose enterprisesandofallpartiesconcernedaresafeguardedinthebestpossibleway,andinfluencesinconflictwiththese interestswhichmightaffecttheindependenceortheidentityofASMLandthosecompaniesaredeterredtothebest oftheFoundation'sability,andeverythingrelatedtotheaboveorpossiblyconducivethereto.TheFoundationseeksto realizeitsobjectsbytheacquiringandholdingofcumulativepreferencesharesinthecapitalofASMLandbyexercising therightsattachedtotheseshares,particularlythevotingrightsattachedtotheseshares.

ThepreferenceshareoptiongivestheFoundationtherighttoacquireanumberofcumulativepreferencesharesasthe Foundationwillrequire,providedthattheaggregatenominalvalueofsuchnumberofcumulativepreferenceshares shallnotexceedtheaggregatenominalvalueoftheordinarysharesthathavebeenissuedatthetimeofexerciseofthe PreferenceShareOptionforasubscriptionpriceequaltotheirnominalvalue.Onlyone-fourthofthesubscriptionprice ispayableatthetimeofinitialissuanceofthecumulativepreferenceshares,withtheotherthree-fourthsofthenominal valueonlybeingpayablewhenwecallupthisamount.Exerciseofthepreferenceshareoptioncouldeffectivelydilute thevotingpoweroftheoutstandingordinarysharesbyone-half.

CancellationandrepaymentoftheissuedcumulativepreferencesharesbyusrequirestheauthorizationbytheGeneral MeetingofShareholdersofaproposaltodosobytheBoardofManagementapprovedbytheSupervisoryBoard.If thepreferenceshareoptionisexercisedandasaresultcumulativepreferencesharesareissued,we,attherequestof theFoundation,willinitiatetherepurchaseorcancellationofallcumulativepreferencesharesheldbytheFoundation. Inthatcaseweareobligedtoeffecttherepurchaseandcancellationrespectivelyassoonaspossible.Acancellation willhaveasaresultarepaymentoftheamountpaidandexemptionfromtheobligationtopayuponthecumulative preferenceshares.Arepurchaseofthecumulativepreferencesharescanonlytakeplacewhensuchsharesarefully paidup.

IftheFoundationwillnotrequestustorepurchaseorcancelallcumulativepreferencesharesheldbytheFoundation within20monthsafterissuanceoftheseshares,wewillbeobligedtoconveneaGeneralMeetingofShareholdersin ordertodecideonarepurchaseorcancellationoftheseshares.

TheFoundationisindependentofASML.TheBoardofDirectorsoftheFoundationcomprisesfourindependentvoting membersfromtheDutchbusinessandacademiccommunities.AsofJanuary1,2012,themembersoftheBoardof DirectorsoftheFoundationare:Mr.A.Baan,Mr.M.W.denBoogert,Mr.J.M.deJongandMr.A.H.Lundqvist.

Legal reserves

Changesinlegalreservesduring2012and2011wereasfollows:

(in thousands)	Hedging reserve EUR	Currency translation reserve EUR	Reserve for capitalized development expenditures EUR	Total EUR
Balance at January 1, 2011	(44,369)	(88,640)	263,387	130,378
Components of statement of comprehensive income: Foreign currency translation, net of taxes:
Gain(Loss)onthehedgeofanetinvestment	-	(1,829)	-	(1,829)
Gain(Loss)ontranslationofforeignoperations Financial instruments, net of taxes:	-	(12,142)	-	(12,142)
Gain(Loss)onderivativefinancialinstruments	(4,610)	-	-	(4,610)
Transferstonetincome	51,963	-	-	51,963
Development expenditures	-	-	(4,721)	(4,721)
Currency translation on development expenditures	-	(956)	956	-
Balance at December 31, 2011	2,984	(103,567)	259,622	159,039
Components of statement of comprehensive income: Foreign currency translation:
Gain(Loss)ontranslationofforeignoperations	-	5,927	-	5,927
Financial instruments, net of taxes:
Gain(Loss)onderivativefinancialinstruments	214	-	-	214
Transferstonetincome	(7,761)	-	-	(7,761)
Development expenditures	-	-	192,482	192,482
Currency translation on development expenditures	-	1,119	(1,119)	-
Balance at December 31, 2012	(4,563)	(96,521)	450,985	349,901

Exchangeratedifferencesrelatingtothetranslationfromourforeignsubsidiariesintoeuroarerecognizedinthe currencytranslationreserve.Gainsandlossesonhedginginstrumentsthataredesignatedashedgesofnetinvestments inforeignoperationsareincludedinthecurrencytranslationreserve.

Hedgingreserverepresentshedginggainsandlossesontheeffectiveportionofcashflowhedges.Thecumulativegain orlossonthehedgeisrecognizedinnetincome(loss)whenthehedgetransactionimpactsnetincome(loss).

ASMLisacompanyincorporatedunderDutchLaw.InaccordancewiththeDutchCivilCode,otherreservesconsistof legalreservesthathavetobeestablishedincertaincircumstances.Thelegalreservesconsistofthehedgingreserve, thecurrencytranslationreserveandthereserveforcapitalizeddevelopmentexpenditures.Legalreservesarenotfor distributiontoourshareholders.Ifthecurrencytranslationreserveorthehedgingreservehasanegativebalance, distributionstoourshareholdersarerestrictedtotheextentofthenegativebalance.

Appropriation of net income

Aspartofourfinancingpolicy,weaimtopayanannualdividendthatwillbestableorgrowingovertime.Annually,the BoardofManagementwill,uponpriorapprovalfromtheSupervisoryBoard,submitaproposaltotheAGMwithrespect totheamountofdividendtobedeclaredwithrespecttotheprioryear.Thedividendproposalinanygivenyearwillbe subjecttotheavailabilityofdistributableprofitsorretainedearningsandmaybeaffectedby,amongotherfactors,the BoardofManagement'sviewsonourpotentialfutureliquidityrequirements,includingforinvestmentsinproduction capacity,thefundingofourresearchanddevelopmentprogramsandforacquisitionopportunitiesthatmayarisefrom timetotime;andbyfuturechangesinapplicableincometaxandcorporatelaws.Accordingly,itmaybedecidedto proposenottopayadividendortopayalowerdividendwithrespecttoanyparticularyearinthefuture.

For2012,aproposaltodeclareadividendofEUR0.53perordinaryshareofEUR0.09nominalvaluewillbesubmitted totheAGMtobeheldonApril24,2013.

Dividendsonordinarysharesarepayableoutofnetincomeorretainedearningsasshowninourfinancialstatementsas adoptedbyourGeneralMeetingofShareholders,afterpaymentfirstof(accumulated)dividendsoutofnetincomeon anyissuedcumulativepreferenceshares.

Share buyback programs

Inadditiontodividendpayments,weintendtoreturncashtoourshareholdersonaregularbasisthroughshare buybacksorcapitalrepayment,subjecttoouractualandanticipatedlevelofliquidityrequirements,ourcurrentshare price,othermarketconditionsandotherrelevantfactors.

OnApril25,2012,theGeneralMeetingofShareholdersauthorizedtherepurchaseofuptoamaximumoftwotimes10.0 percentofourissuedsharecapitalasofthedateofauthorizationthroughOctober25,2013.

OnJanuary19,2011,weannouncedourintentiontorepurchaseuptoEUR1.0billionofourownshareswithinthe nexttwoyears.OnJanuary18,2012,weannouncedtoincreasethesizeoftheprogramtoamaximumamountofEUR 1,130million.DuringtheperiodfromJanuary1,2012uptoandincludingNovember22,2012,whentheprogramwas completed,wehadpurchased11,278,058ofoursharesforatotalamountofEUR430.0millionatanaveragepriceof EUR38.13pershare.Thesesharesareintendedtobecancelledin2013.

Furthermore,onJanuary18,2012,weannouncedourintentiontopurchaseupto2.2millionofadditionalsharesduring 2012forthepurposeofcoveringoutstandingemployeestockandstockoptionplans.DuringtheperiodfromNovember 22,2012uptoandincludingDecember14,2012,whentheprogramwascompleted,atotalnumberof2.2millionshares waspurchasedforatotalamountofEUR105.2millionatanaveragepriceofEUR47.81pershare.Theseshareswillbe heldastreasurysharespendingdeliverypursuanttosuchplans.

BothprogramshadbeensuspendedbetweenJuly10,2012andOctober18,2012followingtheannouncementofthe CustomerCo-InvestmentProgramonJuly9,2012.

Thefollowingtableprovidesasummaryofourrepurchasedsharesin2012(excludingtheSyntheticShareBuyback effectuatedinNovember2012):

Period	Total number of shares purchased	Average price paid per Share (EUR)	Total number of shares purchased as part of publicly announced plans or programs	Maximum value of shares that may yet be purchased under the program1 (EUR)	Maximum number of shares that may yet be purchased under the program2
January20-31,2012	2,132,366	32.65	2,132,366	360,369,363	2,200,000
February1-28,2012	1,025,407	34.71	3,157,773	324,780,615	2,200,000
March1-31,2012	949,726	35.76	4,107,499	290,820,741	2,200,000
April1-30,2012	654,169	37.18	4,761,668	266,501,698	2,200,000
May2-31,2012	1,219,480	36.88	5,981,148	221,530,029	2,200,000
June1-30,2012	1,133,550	38.61	7,114,698	177,764,616	2,200,000
July1-29,2012	428,000	40.65	7,542,698	160,366,940	2,200,000
August1-31,2012	-	-	7,542,698	160,366,940	2,200,000
September1-30,2012	-	-	7,542,698	160,366,940	2,200,000
October3-31,2012	1,153,112	41.86	8,695,810	112,099,413	2,200,000
November1-30,2012	3,240,099	44.10	11,935,909	-	1,542,149
December1-31,2012	1,542,149	48.24	13,478,058	-	-
Total	13,478,058	39.71

1 ProgramtopurchasesharesuptoamaximumamountofEUR1,130million.Weintendtocanceltheseshares.

2 Programtopurchaseupto2.2millionsharesforthepurposeofcoveringoutstandingemployeestockandstockoptionplans.

AttheEGMheldonSeptember7,2012,aresolutionwaspassedtoamendtheArticlesofAssociationinconnectionwith theSyntheticShareBuybacktobeeffectedinconnectionwiththeCustomerCo-InvestmentProgram.OnNovember24, 2012,weeffectuatedtheamendmentsconsistingofarepaymenttoshareholders(excludingparticipatingcustomers)of EUR9.18perordinaryshareandtheexchangeofeach100ASMLordinarysharesfor77ASMLordinaryshares.

Asaresultoftheseamendments,whichinsubstanceconstituteaSyntheticShareBuyback,weeffectivelyrepurchased 93,411,216sharesatanaveragepriceofEUR39.91foratotalamountofEUR3,728.3million.

5. Personnel

ThenumberofemployeesemployedbytheASMLHoldingN.V.atyear-end2012wasfive(2011:five),whichisour BoardofManagement.

AsaresultofenactedDutchtaxlegislation('WetuitwerkingfiscalemaatregelenBegrotingsakkoord2013')during2012, theCompanyincurredanone-timeexpenseofEUR2.4millioninrelationtoourmembersoftheBoardofManagement.

ASMLdoesnotconsidertheDutchTaxlegislation('WetuitwerkingfiscalemaatregelenBegrotingsakkoord2013')tobea remunerationoranemployeebenefit.ForinformationregardingtheremunerationoftheBoardofManagementreference ismadetoNote30totheconsolidatedfinancialstatements.

Forinformationregardingauditor'sfees,werefertonote34totheconsolidatedfinancialstatements.

6. Commitments and Contingencies

ASMLHoldingN.V.hasassumedjointandseveralliabilitiesinaccordancewitharticle403Part9ofBook2ofTheDutch CivilCodewithrespecttothefollowingDutchsubsidiaries:ASMLNetherlandsB.V.,ASMLMaskToolsB.V.,ASMLMotion B.V.andASMLMotionSubB.V.Furthermore,ASMLHoldingN.V.hasguaranteedallliabilitiesoutstandingatDecember 31,2012,untilallaresatisfiedinfull,inaccordancewithsection479CoftheUKCompaniesAct2006withrespectto itsoverseassubsidiaryASML(UK)Ltd(registerednumberSC176574)andaccordingly,undersection479AofthatAct ASML(UK)Ltdisexemptfromtherequirementtohaveitsfinancialstatementsaudited.

FromtimetotimeweprovideguaranteestothirdpartiesinconnectionwithtransactionsenteredintobyourDutch subsidiariesintheordinarycourseofbusiness.

ASMLHoldingN.V.formsataxunitytogetherwithcertainofitsDutchsubsidiaries,forpurposesofDutchtaxlawsand areassuchjointlyandseverallyliableforthetaxdebtsoftheunity:ThefiscalunitycomprisesasofDecember31,2012 ofASMLHoldingN.V.,ASMLNetherlandsB.V.,ASMLSystemsB.V.,ASMLMasktoolsB.V.

7. Amounts due from/due to subsidiaries

Interestonamountsduefromsubsidiariesiscalculatedbasedonmonthlybaseratesplusamarket-conformmark-up, interestonamountsduetosubsidiariesiscalculatedbasedonmonthlybaserate,minusasmallfee,withaminimumof 0%.Allbalancesduefrom/duetosubsidiariesarerepayableondemand.

Veldhoven,theNetherlands February12,2013

Preparedby TheBoardofManagement: EricMeurice PeterT.F.M.Wennink MartinA.vandenBrink FritsJ.vanHout FrédéricJ.M.Schneider-Maunoury

Other Information

TheadditionalinformationbelowincludesabriefsummaryofthemostsignificantprovisionsofourArticlesof Association.SeeNote18oftheconsolidatedfinancialstatements.

Adoption of Financial Statements

TheBoardofManagementwillsubmitourstatutoryannualreport,togetherwithacertificateoftheauditorinrespect thereof,totheGeneralMeetingofShareholdersforadoption.

Statements Appropriation and Determination of Net Income

DividendsmaybepayableoutofnetincomeorretainedearningsshownintheCompanyFinancialStatementsas adoptedbyourGeneralMeetingofShareholders,afterpaymentfirstof(accumulated)dividendsonanyoutstanding cumulativepreferenceshares.Atitsdiscretion,however,subjecttostatutoryprovisions,theBoardofManagementmay, withthepriorapprovaloftheSupervisoryBoard,distributeoneormoreinterimdividendsontheordinarysharesbefore theFinancialStatementsforanyfinancialyearhavebeenadoptedbytheGeneralMeetingofShareholders.TheBoard ofManagement,withtheapprovaloftheSupervisoryBoard,maydecidethatallorpartofournetincomeshouldbe retainedandnotbemadeavailablefordistributiontoshareholders,exceptfordividendsonthecumulativepreference shares.Thosenetincomesthatarenotretainedmaybedistributedtoshareholderspursuanttoashareholders' resolution,providedthatthedistributiondoesnotreduceequitybelowtheamountofreservesrequiredbyDutchlaw. ExistingreservesthataredistributableinaccordancewithDutchlawmaybemadeavailabletotheGeneralMeetingof ShareholdersfordistributionuponaproposalbytheBoardofManagement,subjecttopriorapprovaloftheSupervisory Board.Asregardscashpayments,therightstodividendsanddistributionsshalllapseifsuchdividendsordistributions arenotclaimedwithinfiveyearsfollowingthedayafterthedateonwhichtheyweremadeavailable.

Annually,theBoardofManagementwillassesstheamountofdividendthatwillbeproposedtotheAnnualGeneral MeetingofShareholders.For2011,adividendwasdeclaredofEUR0.46perordinaryshareofEUR0.09nominalvalue whichwaspaidin2012.

AproposalwillbesubmittedtotheAnnualGeneralMeetingofShareholdersonApril24,2013todeclareadividendfor 2012ofEUR0.53perordinaryshareofwithaEUR0.09nominalvalue.

Voting Rights

WearesubjecttotherelevantprovisionsofDutchlawapplicabletolargecorporations(the"structuurregime").These provisionshavetheeffectofconcentratingcontrolovercertaincorporatedecisionsandtransactionsinthehandsofthe SupervisoryBoard.MembersoftheBoardofManagementareappointedbytheSupervisoryBoard.TheSupervisory BoardshallnotifytheGeneralMeetingofShareholdersofintendedappointmentstotheBoardofManagement. GeneralMeetingsofShareholderswillbeheldatleastonceayear.Wedonotsolicitfromornominateproxiesforour shareholders.However,shareholdersandotherpersonsentitledtoattendGeneralMeetingsofShareholdersmaybe representedbyproxies.

EGMsmaybeheldasoftenasdeemednecessarybytheSupervisoryBoardorBoardofManagementandmustbeheld ifoneormoreordinaryorcumulativepreferenceshareholdersjointlyrepresentingatleasttenpercentoftheissued sharecapitalmakeawrittenrequesttothateffecttotheSupervisoryBoardandtheBoardofManagementspecifyingin detailthebusinesstobedealtwith.

ResolutionsareadoptedatGeneralMeetingsofShareholdersbyanabsolutemajorityofthevotescast(exceptwherea differentproportionofvotesarerequiredbytheArticlesofAssociationorDutchlaw)andtherearegenerallynoquorum requirementsapplicabletosuchmeetings.IntheGeneralMeetingofShareholderseachshareconferstherighttocast onevote.

Subsequent Events

Onfebruary5,2013,theCymerStockholdersapprovedthepreviouslyannouncedmergeragreement,datedOctober16, 2012atthespecialmeetingofCymerStockholders.SeeNote33totheconsolidatedfinancialstatementsforadditional information.

Independent auditor's report

To:TheSupervisoryBoardandShareholdersofASMLHoldingN.V.

Report on the financial statements

Wehaveauditedtheaccompanyingfinancialstatementsfortheyear2012ofASMLHoldingN.V.,Veldhoven.The financialstatementsincludetheconsolidatedfinancialstatementsandthecompanyfinancialstatements.The consolidatedfinancialstatementscomprisetheconsolidatedstatementoffinancialpositionasatDecember31,2012, theconsolidatedincomestatementandtheconsolidatedstatementsofcomprehensiveincome,changesinequityand cashflowsfortheyearthenended,andnotes,comprisingasummaryofthesignificantaccountingpoliciesandother explanatoryinformation.ThecompanyfinancialstatementscomprisethecompanybalancesheetasatDecember31, 2012,thecompanyincomestatementfortheyearthenendedandthenotes,comprisingasummaryoftheaccounting policiesandotherexplanatoryinformation.

Management's responsibility

Managementisresponsibleforthepreparationandfairpresentationofthesefinancialstatementsinaccordancewith InternationalFinancialReportingStandardsasadoptedbytheEuropeanUnionandwithPart9ofBook2oftheDutch CivilCode,andforthepreparationofthemanagementboardreportinaccordancewithPart9ofBook2oftheDutch CivilCode.Furthermoremanagementisresponsibleforsuchinternalcontrolasitdeterminesisnecessarytoenablethe preparationofthefinancialstatementsthatarefreefrommaterialmisstatement,whetherduetofraudorerror.

Auditor's responsibility

Ourresponsibilityistoexpressanopiniononthesefinancialstatementsbasedonouraudit.Weconductedouraudit inaccordancewithDutchlaw,includingtheDutchStandardsonAuditing.Thisrequiresthatwecomplywithethical requirementsandplanandperformtheaudittoobtainreasonableassuranceaboutwhetherthefinancialstatementsare freefrommaterialmisstatement.

Anauditinvolvesperformingprocedurestoobtainauditevidenceabouttheamountsanddisclosuresinthefinancial statements.Theproceduresselecteddependontheauditor'sjudgment,includingtheassessmentoftherisksof materialmisstatementofthefinancialstatements,whetherduetofraudorerror.

Inmakingthoseriskassessments,theauditorconsidersinternalcontrolrelevanttotheentity'spreparationandfair presentationofthefinancialstatementsinordertodesignauditproceduresthatareappropriateinthecircumstances, butnotforthepurposeofexpressinganopinionontheeffectivenessoftheentity'sinternalcontrol.Anauditalso includesevaluatingtheappropriatenessofaccountingpoliciesusedandthereasonablenessofaccountingestimates madebymanagement,aswellasevaluatingtheoverallpresentationofthefinancialstatements.

Webelievethattheauditevidencewehaveobtainedissufficientandappropriatetoprovideabasisforouraudit opinion.

Opinion with respect to the consolidated financial statements

Inouropinion,theconsolidatedfinancialstatementsgiveatrueandfairviewofthefinancialpositionofASML HoldingN.V.asatDecember31,2012andofitsresultanditscashflowsfortheyearthenendedinaccordancewith InternationalFinancialReportingStandardsasadoptedbytheEuropeanUnionandwithPart9ofBook2oftheDutch CivilCode.

Opinion with respect to the company financial statements

Inouropinion,thecompanyfinancialstatementsgiveatrueandfairviewofthefinancialpositionofASMLHoldingN.V. asatDecember31,2012andofitsresultfortheyearthenendedinaccordancewithPart9ofBook2oftheDutchCivil Code.

Report on other legal and regulatory requirements

PursuanttothelegalrequirementunderSection2:393sub5ateandfoftheDutchCivilCode,wehavenodeficiencies toreportasaresultofourexaminationwhetherthemanagementboardreport,totheextentwecanassess,hasbeen preparedinaccordancewithPart9ofBook2ofthisCode,andwhethertheinformationasrequiredunderSection2:392 sub1atb-hhasbeenannexed.Furtherwereportthatthemanagementboardreport,totheextentwecanassess,is consistentwiththefinancialstatementsasrequiredbySection2:391sub4oftheDutchCivilCode.

DeloitteAccountantsB.V.

/s/G.M.Dekker

Eindhoven,TheNetherlands February12,2013

Information and Investor Relations

Financial calendar

April 17, 2013

AnnouncementofFirstQuarterresultsfor2013

April 24, 2013

GeneralMeetingofShareholders Auditorium,ASMLBuilding7, DeRun6665 Veldhoven,theNetherlands

July 17, 2013 AnnouncementofSecondQuarterresultsfor2013

October 16, 2013 AnnouncementofThirdQuarterresultsfor2013

Fiscal Year ASML'sfiscalyearendsonDecember31,2013

Listing

TheordinarysharesofASMLarelistedontheofficialmarketoftheEuronextAmsterdambyNYSEEuronextAmsterdam andintheUnitedStatesontheNASDAQStockMarketLLC,underthesymbol"ASML".ASML'sordinarysharesmay alsotradeonotherstockexchangesfromtimetotime,althoughASMLhasnotappliedforlistingsonthoseexchanges anddoesnotendorseandmaynotbenotifiedofsuchtrading.

Investor Relations

ASMLInvestorRelationswillsupplyinformationorcopiesoftheAnnualReportonForm20-FfiledwiththeUS SecuritiesandExchangeCommissionandtheStatutoryAnnualReport.TheseAnnualReports,quarterlyreleasesand otherinformationarealsoavailableonourwebsite(www.asml.com).

ASML Worldwide Contact Information

Corporate Headquarters

DeRun6501 5504DRVeldhoven TheNetherlands

Mailing address

P.O.Box324 5500AHVeldhoven TheNetherlands

United States main offices

8555SouthRiverParkway Tempe,AZ85284 U.S.A.

77DanburyRoad Wilton,CT06897 U.S.A.

Asia main office

17thFloorSuite1702-3 Queen'sroadCentral100 HongKong

Corporate Communications

phone:+31402687870 email:corpcom@asml.com

Investor Relations

phone:+31402683938 email:investor.relations@asml.com

Formoreinformationpleasevisitour websitewww.asml.com