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ASML Holding N.V. (NASDAQ:ASML)

Goldman Sachs Technology and Internet Conference Call

February 12, 2013 7:00 pm ET

Executives

Craig DeYoung – Vice President, Investor Relations Worldwide

Analysts

Simon F. Schafer – Goldman Sachs

Simon F. Schafer – Goldman Sachs

Well, great, thanks everyone for joining us. This is the ASML fireside chat at the Goldman Sachs Tech and Internet Conference this year. I am Simon Schäfer and I cover the European Tech and company’s name is for Goldman in London. Great pleasure to have ASML with us again. Craig DeYoung, [I think you're] doing as VP of Investor Relations at ASML, who’ve done for a number of years.

Craig DeYoung

My pleasure as always.

Simon F. Schafer – Goldman Sachs

Thanks for doing that again.

Craig DeYoung

No problem.

Simon F. Schafer – Goldman Sachs

So let me just start off with a broader just picture of how you’re feeling with the environment, you guys basically came out, I guess three weeks back talking about a weaker start of 2013, but actually the expectations are very strong revenue recovery then for the tail end of the year. Specifically, foundry has been a big part of your business that’s been driving the ordering activity, but maybe just give us a snapshot as to what you’re seeing from an order intake perspective and from a revenue perspective along with the (inaudible) that would be helpful.

Craig DeYoung

Yeah, maybe I can build up just to remind you we guided revenue for the total year and it’s not often that we are able to do that at the very beginning of the year, but we have a – I think a certain view of what’s going to happen and that allowed us to guide roughly equivalent revenues. But let me make sure that it’s well understood that equivalent revenues at €4.7 billion is roughly what we did last year includes about €500 million in EUV revenues.

So if you want to look at the year-over-year base business, then you’re looking at that we use €4.7 billion normally €4.2 billion. So we are talking about down about 15% on the base business. And let me build that a bit up for you a bit, and also let me remind you that we are due to shift up to 10 or maybe even 11 EUV systems this year. But we’ve been somewhat conservative in our revenue recognition portion of it, and this has to do in part with the way we are going to ship these tools, we are probably going to drop ship some of the resources and the required accounting for a new system will dictate how and when we would be able to revenue recognize. And it is going to be based on the final demonstration of performance for the customer and it may not happened in our facility, which is usual, but it may happen in their facilities or maybe delayed.

So anything you see there is really mostly related just to the accounting rules that we have to abide by our new tool. So we’ve kind of been conservative in building it about €500 million in revenue recognition. The balance of which if it doesn’t happen this year will happen for certain next year. So it’s not an issue of will it be recognized, but it’s a matter of when. So if we look at the balance, we do see, as you suggested strength throughout the year in foundry primarily driven by the one big foundry guy, who will collectively – they’ll complete about 300,000 plus wafers starts have installed capacity by the middle of this year at the 32-nanometer, 28 nanometer node. And that is a big node; it was expected to be a big node, but that should be essentially complete at least from our shipment standpoint in support of that kind of a wafer capacity by the middle of the year.

So and then the second half of the year will see a significant increase in the foundry spend related to the start of 20-nanometer RAM. And just to remind you, if you are not aware from a lithographic standpoint the 20-nanometer node is quite a little intensive node. Because you see a large movement in critical layer emerging to multi-pass double and triple patterning, which again is quite expansive not only from a litho standpoint, but we start to reintroduce – the industry starts to introduce etch into the litho process.

So the preparation of the wafer for subsequent processing now will involve not only litho, but also a etch step. So you are decomposing the image into two pieces, because you can’t print it with one pattern, for one pass, and then you do an etching between each of the litho passes, so it become quite intense from a couple of perspective, but it’s expensive in any case from a litho standpoint. So that’s going to drive the second half will layer on also the EUV revenue mostly in the second half which will drive second half higher than the first half, but largely driven by capacity additions of 20-nanometer node in the foundry space. We don’t have high expectations at this point in time as indicated from our customers in either of the memory spaces.

So to give you a feel for what we see in terms of install capacity as we go through the year and the amount of bit supply growth that will be enabled by that capacity at the collective DRAM manufacturer, let’s start with that’ll will be able to grow bits by about 20% to 25% based on our calculations, based on what we have shipped over the past 12 years or so months, plus what were shipped this year, which will be a very nominal amount, very, very, very conservative amount less than last year, but it’ll still support 20% to 25%. Bit supply growth and, I don’t think and correct me if you think I am wrong that there is a bit demand forecast, that’s above the 25% level. So they are well matched in other words from a supply demand balance as they view at end, of course, we view it today. So there is no need to add significant amount. So the guidance that we’ve given you doesn’t consider any significant opportunity in the DRAM space.

Likewise in the NAND space, it’s probably a bit more controversy to use the term about what the demand will be, but the install capacity can support about 35% bits in the NAND space. And that’s again across the four major players in NAND and each one has some variability around that number, but in the aggregate, they can grow bits by about 35%.

I think the indications today from them collective is they may grow bits supply by about 30%, so they have some room to go there. There may be some forecasts out there that are higher than that, but we look at what the install capacity can do, what our customers are suggesting they are going to do and that’s the information I just shared in it. So if they are going to do, what they say, they are going to do for the balance of this year. There is a very nominal spend that’s required to do that. So conservative estimates, which say for sure, that we’ve put into our guidance for our base business revenue for memory and again driven by, I would say modest spend by two of the three large customers and a fairly aggressive spend by the third customer, so that’s kind of where we are…

Simon F. Schafer – Goldman Sachs

And how about the logic guys, you talked about foundries and how about the IDM, Intel I guess probably the most controversial whereby, they put up a very big number for this year. But then when you look at the some of commentary from folks like Intel, and so and maybe that’s not quite coming through in their order patterns yet. What you guys are seeing, I think when you talked at the end of last year and also in the beginning of – just on your (inaudible), you guys talked about, the litho contribution being roughly flat at Intel. Is that would you still think?

Craig DeYoung

Yeah, I think it is roughly flat; it’s roughly flat, yeah.

Simon F. Schafer – Goldman Sachs

And how come I mean, the leadership shouldn’t you would be seeing if there looking at enough CapEx budget?

Craig DeYoung

I’ve to remind you we are often, often times, well we don’t often use CapEx as any measure of what a particular customers going to spend with us specifically on litho. And we have several cases were CapEx announcements have been made and either upward, most recently upward and sometimes significantly, but no change in delivery plans are...

Simon F. Schafer – Goldman Sachs

Right.

Craig DeYoung

Are made to us, so most of our customers have to have a fairly long view of what their litho requirements are, those are communicated to us, so there is very – surprising a CapEx announcement.

Simon F. Schafer – Goldman Sachs

Right, okay got it.

Craig DeYoung

So, Intel particular case we just have to wait and see.

Simon F. Schafer – Goldman Sachs

Yeah, fair enough. And just other follow-up on the memory side, you talked about the big growth plans both memory or both DRAM and NAND, and how given existing plans you’ll probably don’t need a lot of expansion or order uptake for you guys high revenue for you guys, in fact revenues will be down for you guys. But what about the events that memory prices keep on going up, is that not going to change that picture because they will be ordering more and you just let them upside?

Craig DeYoung

It’s quite impossible and again I think Eric Meurice, our CEO alluded to that possibility at least in his mind in the second half of the year in the NAND space, so we will be prepared for that, it’s pretty digital these guys. They will get to a certain level of pain or gain and then they will have to switch into a capacity addition mode and they do that pretty aggressively and pretty collectively. So we will have to be prepared for that. I think we will be prepared.

Simon F. Schafer – Goldman Sachs

Yeah, and you talked a little bit about two big customers broadly in the industry, the one thing we have seen of course amongst two customers, there is a lot of concentration among the top three spenders. Their responsible really for the marginal cost and the marginal CapEx setting of really the entire industry by now. What you guys seeing amongst the top sort of the tail just below the top three, the fast followers if you will. Are they responding quickly or what you are saying in terms of their appetites already try and compete with some of these really aggressive shrinking out the PSM, and Intel, and Samsung. Yeah.

Craig DeYoung

We saw I would say let’s call him a second to your foundry guys being aggressive in their own right last year in terms of installing some capacities to be most advanced nodes. I would generally it feels like there is a digesting period and some we are more aggressive than others. Again the scale much reduced from the leaders of course, but still participating. So I think it’s I mean that I can note. I don’t know what they are on their forward going plans are yet, but I think with one major one, we shipped quite a bit of capacity and it appears again to be a digestion period our process optimization period and a customer – the customer selling of the processes to customers here in the midst of that. So there is probably not an immediate need to add much more capacity then the critical capacity that they added to the course of last year.

Simon F. Schafer – Goldman Sachs

Understood. Okay, great. And Craig, you talked a little bit about the some, this rising CapEx and capital intensity for lithography overall specifically on the 2x node. Maybe just for the audience, could you walk us through just on a general fab, use an example of whatever size capacity you have in mind? What is the top of – step up in number in lithography machines that your customers will need. And I know that there was a significant step up when you went from 32 to 28, but then there seems to be still another significant step up in litho intensity as you go to 22 and below. Maybe just walk us through a typical case study just to illustrate the type of increase in intensity on litho and more broadly does that come at the expense of other equipment types in terms of the budget allocation trends, it’s an aggregate and this doesn’t seem like the CapEx intensity is really growing all that much, any thoughts on that?

Craig DeYoung

Yeah, so if you look at the difference I think your question maybe around the logic specifically because of this, but let me touch on the memory space in terms of the investment is required within memory and what happens from transition. So normally what a memory fab will do is it will transition that whole fab from one node to the next. Now they may add capacity as well and top of that, but they will transition and logic doesn’t do that by the way, because the nodes whether it would be today’s 28-nanometer node or yesterday’s 35, or 45, or 65, or 90, they are used by a ever changing set of customers.

So there is people that transition in time to the next node, so that capacity remains still I would say a minimum of five years or not even 10 years in some particular cases. So when logic is building new capacity, they are building the new fab, add a new node. And in terms of memory just by memory is much less intense from a litho standpoint. So when we are talking about investments required to bring bit growth up substantially and may not involve a huge capital outlay for litho because in rough terms both NAND and DRAM can do about 10,000 wafer starts per immersion tool. Now they need a complement of KrF tools to go with it from a value standpoint, that’s not dominant, and consequated so there about a 1,000 starts. So if the NAND guys want to add 10,000 starts of capacity and individual customer yielded by one tools.

Today the 28, the most advance production node and that would be the most advance production node. And moving from one node to next wouldn’t require a significant increase in the number tools per 1,000 wafer starts or 10,000 wafer starts. So from an intensity standpoints, not near as intensive. And logic today at the 28-nanometer node you need 10 tools to do 45,000 wafer starts. So in NAND to be specific you need 10 tools to do 120,000 wafer starts.

So today the intensity of logic is almost three etch what it is in the worst case or the least case which is NAND. So that’s number one and then we are going to go to your point and my earlier point to even more intensity at the 20-nanometer node where you’ll see anywhere between 201.6 and 1.9 times, the number of immersion tools well that seem to be 45,000 wafer starts which translate into about 1.7 times the cost of a fab. So today the litho for 45,000 wafer starts to 20-nanometer will cost you probably about €600 million in our particular case if you are buying a fab of ASML tools, it’s going to cost upwards of €900 million for that same installed capacity this would give you a feel.

So as I mentioned, I think the logic guys combined are going to put between 40,000 and 60,000 starts of 20-nanometer capacity in the second half of the year. That will mean somewhere between €900 and €1.2 billion of investment just in the litho portion to do that. And it’s simply driven by an increase; not simply, it’s driven by an increase in the number of total layers, which is normally 10% in any transition.

The total number of layers that need to be imaged, but if the 28-nanometer node the typical process or I’ll call it the average process amongst the foundries involves about 14 critical layers that needs these 10 immersion tools. That the number of critical layers goes up in the average process to 19, so you are going from 14 to 19, almost a 40% increase in the critical layers, while you only have a 10% increase in the total layers and those then eight of those out of 19 layers are done with a single shot, single image, one shot is good enough, 10 of those layers have to be done with double patterning litho-etch-litho-etch, and one of those layers on average is done with triple patterning, litho-etch-litho-etch-litho-etch. So if the increase in the critical layers that require this multi-pass patterning, again which will impact litho spend as well as etch, which is litho-etch-litho-etch there is etch in-between. So the total cost of litho is going up, driven by litho tools and etch tools.

Simon F. Schafer – Goldman Sachs

Shall we take the questions from the audience?

Craig DeYoung

Yes, go ahead.

Question-and-Answer Session

Unidentified Analyst

(Question inaudible)

Craig DeYoung

Well, again I can’t answer that question because I’m not that intelligent on the total process, but as I mentioned the average increase in total layers is 10%. So if you are at a 45 layer process you got five additional layers. Let’s say, those layers have to be processed, what I can’t help you with – I apologize is I don’t know if they need to be extra deposited upon our implant or et cetera. Because I’m just not a device guy. So but I mean those – as layers increase they need to be imaged first and then they need to be subsequently processed and it could be again a deposition in natural whatever else.

So, but that happens every node to every node. Now then the next question is, is the equipment up – other equipment sets becoming that more expensive to do those things and I would have to guess that they properly are. And as always the case this is in favor of metrology and (inaudible) the world will tell you this every time they meet with you, is that the larger the wafers you have and the smaller the features there, and the more metrology you need to do. And by the way, this litho-etch-litho-etch and trying to bring these images together, you have to be able to measure how well you brought these distinct in separate images back into one image. So all of that again are used for more process control, more etch, and more other stuff to do that subsequent layer. But I can quantify it only for lithography increase, but I –

Unidentified Analyst

(Question inaudible)

Craig DeYoung

It should be and I’d guess that is the suppliers of the other equipment should be able to quantify as I have the increase in. What I don’t know is how when you change a node I quite honestly don’t know if you need a new etcher or a new deposition tool, you may or may not which…

Unidentified Analyst

(Question Inaudible)

Craig DeYoung

Exactly, yeah, extendibility or reuse to ease your work, yeah.

Simon F. Schafer – Goldman Sachs

So Craig, maybe I can bring the debate back to from the litho portion. I mean if you look at the gentleman’s question about percentage spent, certainly, when you look at the SIA definition, in the past really pleased the 2007 downturn, roughly 20% of the way to have the equipment spend was litho. That number is clearly much closer to 25% now. But overtime, so that would go to your point, well, actually it has increased already in the last five years. But, you guys have an estimate as to whether that should increase further, do you have any guess as to what percentage of the pie you might be looking to address or is that to?

Craig DeYoung

No, we don’t. It’s a difficult question. We think it’s going to go higher, because we know the ASP and then the accounts going to go up and that all argues for a higher percentage if you will I suppose. Now, but it’s very difficult to try to quantify that out two or three or five years.

Simon F. Schafer – Goldman Sachs

Yeah, understood.

Craig DeYoung

But it feels like it should go up.

Simon F. Schafer – Goldman Sachs

Right. Let’s just take a step back and actually talk a little bit about in the light scheme of things, one of the things that literally you caught people’s attention, because it’s really the first time we’ve seen a transaction like that of that size, is the customer investment program, whereby your three biggest customers has taken a big stake in the company and you repaid some of that new capital back to shareholders, but has there been any change other than you getting a lot of funding from those customers, which is a great – they helping you to finance, support the 450 ramp in EUV and so on? But have you seen any other change, are they interfering in the way that you are running the business or any other operational change that has happened since that customer program – investment program?

Craig DeYoung

No. And again by agreement they will support but won’t interfere. There is an agreement and principle about what we’re going to accomplish in time, we have freedom to address the needs of the customers as we see fit. They will have input, they will probably have people if not already in our facility ensuring that their needs are being communicated, but now it’s a – I think it’s – it might sound like quite a unique arrangement from that perspective as well. And as we made quite clear that everything that comes out of these core development investment is available at the same time without restriction to the industry and that was agreed upon by all of the parties. So those in the way of working, it’s intensifying, we’ve defined our incremental spend this year and some deliverables against that.

So, we're going to spend instead of our nominal €600 million will so spend somewhere between €750 million and €800 million, that will be funded again in cash by the co-investment partner. They will contribute €200 million in cash against that incremental spend, so it's paid for in cash by the customers. But we do have certain deliverables against that that will pick up by the way as we go in time. I might remind you that over a five year program the contribution from the three will be about €1.3 billion, so if we spend €200 million we have over the four years the balance to go, so €250 million, almost €300 million is the expectation for the incremental spend against the programs that we’ve agreed with them, principally for Intel, publicly discussed 450 interest that they have. We have deliverables against that program in the 2015 timeframe, where we will deliver tools 450 capable tools on the couple of different wavelengths and then, of course, acceleration of the EUV which was in place but it will be accelerated.

Part of that – a large part of the motivation for us to go out and ask for co-funding wasn’t because we couldn’t afford it from a cash standpoint, but we felt that it was important that our large customers will be willing, the industry sharing some of the risks, because you can imagine the amount of risk we could be incurring in going to the next level of the EUV.

Simon F. Schafer – Goldman Sachs

Or we feel what happened to people’s (pretons) in the previous attempts of the big wave of (inaudible).

Craig DeYoung

Yeah, yeah, yeah. And, in with €450 there is no industry consensus today, even today on about – what the implementation …

Simon F. Schafer – Goldman Sachs

Yeah, what’s your view on that? I mean, Mike, when I think last week we’re talking a little bit more specifically about Intel’s sort of initial appetite to move towards 450 that was evident in their CapEx budget too. But, what is the ASML timeline and your expectation of the build-outs?

Craig DeYoung

Well again, if I recall the numbers correctly, Intel will invest somewhere near €500 million over the course of the next few years with us to develop €450 for the industry, but they are the – I’ll call it the most interested today, and probably have the best defined timeline although it’s not, we may be a little bit careful. I don’t want to use the word well defined but it’s – there’s not a high, there’s not certainly an exact implementation timing for anybody and there is no consensus about that. But we’re obliged if you will to deliver as I mentioned multiple tools on a couple of different wavelengths to them in the 2015 timeframe so they can start to investigate the processes.

I think it’s all right that I just use their nomenclature, they call them debugging tools, so it’s reasonable that they take tools to start to (do beyond) the process because there is a lot of investigation that has to happen once you have the complete tool set. Going to larger wafers is going to be a complicated endeavor in all ways but we will be prepared to, and we’re negotiating the exact specifications on those tools, and what they need to look like exactly. But we’ll deliver a set of tools that will be useable for them and anybody else, I suppose, that wants them in that timeframe that it would be available to with enough notice but…

Simon F. Schafer – Goldman Sachs

Right.

Craig DeYoung

So they will be supporting their effort. And in a point in time they will determine on their own, what’s appropriate for volume production and will be then ready to respond to that.

Simon F. Schafer – Goldman Sachs

Great, and so Craig, let’s talk about EUV a little bit because you talked to us really about some of the rising (inaudible) that’s really for your existing immersion line and of course we talked a little bit about the 450 investment that is partially being sponsored by some of your customers. And you also talked about EUV and some of the challenges in terms of revenue recognition. So where you stand today, what’s your latest expectation of time line of when this stuff is actually going to be production ready? I know some of the initial deliveries that you’ve completed already, are really for pilot R&D lines and some of the scalable production. What’s your latest thought in terms of delivery profiles?

Craig DeYoung

So the 10 – the eleven tools we’re going to ship ten and which will go to customers, one will go to a research facility, are all production capable tools and their source power will be upgradable in the field. So that’s one of the interesting things about the Cymer approaches in the side that their tools, their sources are upgradable in the field, so that’s important. So, but clearly the 10 tools we’re going to ship are for development use only and we are negotiating today, we have a commitment for four tools for production in 2014, against the promise or a commitment from us for 70 wafers, 69 to be exact, well let’s call it 70 wafers per hour in somewhere in this timeframe next year, maybe a bit delayed, but somewhere certainly in the first half of next year.

We are negotiating or discussing another four to eight quarters for production in memory and in logic for delivery we think in 2014. Now the communication is our, let’s call it tracking our progress in source power development i.e. throughput against the timing need of the customer. So that kind of an ongoing communication about it, what kind of progress we’re making which will be the better, put more progress we make, the more incline the customer is going to a quarter earlier as opposed to later.

And then it’s a real or his are real, real timing need, so there if we’re continue to be bogged down in progress we’ll just put more pressure on the customer which we don’t want to do about should we, shouldn’t we, if when blah, blah, blah. So but anyway we are negotiating for to – eight additional orders. So our expectation remains that we could ship again the 10 or 11 tools this year, 10 production, 1 per hour, customers want a research facility and above that same amount next year.

Simon F. Schafer – Goldman Sachs

Right.

Craig DeYoung

That’s our expectation as we see there today. The orders will come in time.

Simon F. Schafer – Goldman Sachs

Right. On that timeline and it seems like we’ve been in this forum and of course we’ve been in a many investment forms in the last two years, and integration it's become very obvious that EUV, is very difficult plant. And one of the investor concerns, is clearly been that, the announced Cymer acquisition is just pure evidence of this stuff is really hard that, you have to go and procure one of your key suppliers. And but how by doing that how does that actually sticks to bottleneck, how does that actually help you in really getting some of the critical issues, we logged at the light source if we are buying that particular supply how did that change the equation…

Craig DeYoung

It really, it did addresses a development speed issue, so today we have two public companies working on the very leading edge of technology, which involves a lot of discovery and let’s call it intellectual property. So our ideas and everybody that works for a company, our values in the tech company is in the IP. And we have a (Inaudible) responsibility as the Cymer to protect that.

So when we're cooperating on, these sources are integrated systems, so just to remind you, we have a droplet generator, which Cymer produces, we have a vessel that DDL, out of the Netherland produces, we have a collected [mere] that (Inaudible) Germany produces and we have a big CO2 laser that Trumpf Germany produces, they are integrated systems. We are a system integrator that’s all we do, so we bring that intelligence to the program.

So we compliment Cymer's engineering talents and competencies in that area. But as we – but we've even taken over a large part of the supplier interaction, because there are in the same time zone, speak roughly the same language, we have a history of working with them it’s easier for us to manage that, but then when we start to do cooperative programs and we have to do something that has to do with the Trumpf laser, we go to Trumpf and we say, hey we need to understand this part of your systems and they go sorry can't share that with you, its not our property, its Cymer's property under an agreement.

So we have to go to Cymer and we have to say, really you share this and of course they're hesitant, were rightly so because of this responsibility they have. So that is one small example, but there – who there are – in terms of the efficiency of operation, it's completely inefficient, not complete. Certainly, inefficient and that’s going to keeping us from making the kind of progress in time that we needed to do for our customer.

I mean I make no mistake, our customers are beading on our door to get EUV at a acceptable level of throughput, so that they can easily justify achievers, because rather easily justify them be – how they are anxious about whether its justifiable, or whether we’ll get there.

So, again and I think we've seen progress here, we are – you might have, I'm sure you sensed the confidence to there, I can, Peter had on our call about the progress that we've made recently with the 40 watts hooked up to a scanner, good dose control, full field blah, blah, blah, all of those things are hugely encouraging. And it comes through the implementation of some engineering things that we've done cooperatively with Cymer. And what we call, they call mope on peoples, which are critical to getting the convergent efficiency up, and now we also collectively have what we call the pre-mitigation managed that we've demonstrated in Cymer’s facility a 60 watt capability and hate to get into the technical details, but keeping the mirror clean which is critical. So those are two things we’ve seen empirical data that says we can do this and keep the mirror clean. Now we can work on dose control of the other important things, but without this, we can’t.

And then also importantly, it confirms our models. And so our models say, we should be able to do this cleanly; we do it cleanly, it also says we should be able to do a 100 watt cleanly. So it suggests something about the accuracy for better word of the – and the robustness of the model, which is important because we rely on that.

So if efficiencies, improvements, so likely what we will do is we’ll take that in, we’ll leave with the acquisition, we’ll leave the deep UV business, as it’s a very successful, it’s operated efficiently. Yeah, there could be some small cost saving efforts that we would make there, but I’d say that would be relatively small. So we’ll pull in that and even be, hopefully be able to accelerate and make that whole development process even more efficient, for now and in the future, because we got to go way beyond eventually, the 70 wafer per hour to 125 et cetera.

Simon F. Schafer – Goldman Sachs

And Craig I always do this, the most I think fireside chats we’ve ever done, always try to finish up on that, capital allocation questions, because you guys have done a great of course in repaying capital that you’ve got from the customer investment program, but actually it didn’t changed the picture of, if you have a good, you’re going to have an okay yes, revenue might not grow, but you’re still generating some cash. So you haven’t really resolved the overall net cash balance question of can you be more aggressive in redistribution, you did something very big in, was it 2006, I think when you looked at the last big payout, so how do you guys thinking about that now?

Craig DeYoung

For 2007, it was not the last when we just bought back a €1.3 billion over the course of last year and the year before actually.

Simon F. Schafer – Goldman Sachs

Recurring, but like a one off.

Craig DeYoung

Yeah. But yeah, so the cash return policy or a cash policy hasn’t changed. So we are committed to over nominal €2.0 billion in gross cash and we have €700 billion in 2017 bond that’s due on 2017, so but gross cash €2 billion everything above that will return to a combination of share buyback and dividend. So we raised our dividend this year by 15%, some people would have like that to be more, maybe it will be in the future. It’s our intent to make that progressive at the very least.

And then again any excess cash beyond the €0.45 times, so over whatever that is €200 million, I’d say €250 million in dividend payout will be through share buyback. Now we were legally limited in our ability to discuss a buyback program, while we are, while the Cymer thing was ongoing. So now that, because you can’t discuss issuing shares, which the purchase of Cymer involves and talk about buyback at the same time, that’s not…

Simon F. Schafer – Goldman Sachs

Great. But we can come back…

Craig DeYoung

They’re not legally allowed, so.

Simon F. Schafer – Goldman Sachs

We can come back to that topic then in a few months, hopefully (inaudible).

Craig DeYoung

Yeah. So we will, so our intent is at this point in time was to probably announce another program with the quarterly results.

Simon F. Schafer – Goldman Sachs

Great, yeah, fantastic work, Craig.

Craig DeYoung

But the policy hasn’t changed so, Simon so.

Simon F. Schafer – Goldman Sachs

Yeah, got it, okay, well, thanks for doing this, unfortunately, we are out of time.

Craig DeYoung

No problem.

Simon F. Schafer – Goldman Sachs

There is a break-up session in [finoma]. So anyone like to follow-up, we will be there. Thank you.

Craig DeYoung

Thanks.

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Source: ASML Holding's Management Presents at Goldman Sachs Technology and Internet Conference 2013 (Transcript)
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