ASML HOLDING NV

1. General information / summary of general accounting policies

ASML is a leading supplier to the semiconductor industry. We provide chipmakers with hardware, software and

services to mass produce the patterns of integrated circuits (microchips). Together with our partners, we drive the

advancement of more affordable, more powerful and more energy-efficient microchips. We enable groundbreaking

technology to solve some of humanity’s toughest challenges in healthcare, energy use and conservation, mobility

and agriculture. Headquartered in Europe’s top tech hub, the Brainport Eindhoven region in the Netherlands, we are

a global team of more than 44,000 full-time employees (FTEs). Our principal operations are in EMEA, North America

and Asia.

Our shares are listed for trading in the form of registered shares on Euronext Amsterdam and Nasdaq. The principal

trading market of our ordinary shares is Euronext Amsterdam.

Basis of preparation

The accompanying Consolidated financial statements are stated inmillionsof euros unless indicated otherwise.

The accompanying Consolidated financial statements have been prepared in conformity with US GAAP.

Use of estimates

The preparation ofour Consolidated financial statements in conformity with US GAAP requires managementto

make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of

contingent assets and liabilities on thebalance sheet dates, and the reported amounts of net sales and costs for the

reported periods. The inputs into our estimates and assumptions consider economic implications including supply

chain constraints, inflation and uncertainty in the macroeconomic environment. We believe that the critical

accounting estimates and assumptions are appropriate. ASML will continue to monitor the impacts of economic

implications and incorporate them into accounting estimates. We evaluate our estimates on a regular basis and we

base our estimates on historical experience and on various other assumptions that we believe to be reasonable

under the circumstances. Actual results may differ from these estimates if the assumptions prove incorrect. To the

extent there are material differences between actual results and these estimates, our future results could be

materially and adversely affected.

We believe that the accounting policies described below require us to make significant judgments and estimates in

the preparation of our Consolidated financial statements. Our most critical accounting estimates relate torevenue

recognition (see Note 2 Revenue from contracts with customers). Although still considered an accounting estimate,

the recoverability of deferred tax assets for capitalized R&Dcosts is no longer considered a critical accounting

estimate. This is as the majority of our R&D expenses at US level are no longer eligible for capitalization for tax

purposes, resulting now in the related deferred tax asset balance decreasing over time due to amortization.

Principles of consolidation

The Consolidated financial statements include the Financial statements of ASML Holding NV and all of its

subsidiaries. Subsidiaries are all entities over which ASML controls the financial and operating activities, generally

accompanying a shareholding of more than 50.0% of the outstanding voting rights. Subsidiaries are fully

consolidated from the date on which control is obtained by ASML. All intercompany transactions, balances and

unrealized results on transactions with subsidiaries are eliminated. We also assess if we are the primary beneficiary

of, and thus should consolidate, any variable interest entity (VIE).

Foreign currency translation

The financial information for subsidiaries with a functional currency outside the Eurozone is measured using a mix of

local currencies or the euro as the functional currency. The Financial statements of those foreign subsidiaries with a

functional currency different than the euro are translated into euros in the preparation of ASML’s Consolidated

financial statements. Assets and liabilities are translated into euros at the exchange rate on the respective balance

sheet dates, and income and costs are translated into euros based on the average exchange rate for the

corresponding period. The resulting translation adjustments are recorded directly in shareholders’ equity.

New US GAAP accounting pronouncements adopted

During 2024, there were no new US GAAP accounting pronounce ments that were adopted which have a material

impact on our Consolidated financial statements.

New US GAAP accounting pronouncements issued but not adopted

For 2024, there are no new US GAAP accounting pronouncements issued which have not yet been adopted and are

expected to have a material impact on our Consolidated financial statements.

2. Revenue from contracts with customers

We measure revenue based on the consideration specified in the contracts with our customers, adjusted for any

significant financing components, and excluding any taxes collected on behalf of third parties. We recognize revenue

when we satisfy a performance obligation by transferring control over a good or service to our customer. We bill our

customers for, and recognize as revenue, charges for shipping and handling costs.

Depending on the contract, we generally obtain a right to payment for our systems through a reservation of a

production slot and/or upon delivery of our systems, with the remaining portion upon final acceptance of our

systems. Right to payment for our service and field options occurs upon delivery or completion of the service unless

described otherwise. The payment is typically due 15–45 days after the aforementioned events. Our contracts

typically include cancellation penalties that provide economic protection from the risk of customer cancellation. The

costs related to our sales are recognized as cost of sales.

We generate revenue from the sale of integrated patterning solutions for the semiconductor industry, which mainly

consist of systems, system-related options and upgrades, other holistic lithography solutions and customer services.

The main portion of our net sales is derived from volume purchase agreements with our customers that have multiple

performance obligations, which mainly include the sales of our systems, system-related options, installation, training,

and extended and enhanced warranties. In our volume purchase agreements we offer customers discounts in the

normal course of sales negotiations. As part of these volume purchase agreements, we may also offer free goods or

services and credits that can be used toward future purchases. Occasionally, systems, with the related extended and

enhanced warranties, installation and training services, are ordered individually. Our sales agreements do not include

a right of return for any reason other than not meeting the agreed-upon specifications.

We account for individual goods and services as separate and distinct performance obligations, including the free or

discounted goods or services, if a product or service is separately identifiable from other items and if a customer can

benefit from it on its own or with other resources that are readily available to the customer. Options to buy goods or

services in addition to the purchase commitment are assessed to determine if they provide a material right to the

customer that they would not have received if they had not entered into this contract. Each option to buy additional

goods or services provided at a discount from the standalone selling price is considered a material right, for which

the likelihood that the option will be exercised is evaluated based on the customer roadmap and their requirements.

The consideration paid for our performance obligations is typically fixed. However, most of our volume purchase

agreements with customers contain some component of variable consideration, typically dependent on the final

volume of systems ordered by the customer or the system performance. Variable consideration is estimated at

contract inception for each performance obligation based on communication with the customer to understand their

requirements and roadmap. This is subsequently updated each quarter, using either the expected value method or

the most likely amount method, whichever is determined to best predict the consideration to be collected from the

customer. Variable consideration is only included in the transaction price if it is considered probable that a significant

revenue reversal will not occur.

In certain scenarios when entering into a volume purchase agreement, free goods or services are provided directly or

through a voucher that can be used on future contracts. Consideration from the contract will be allocated to these

performance obligations and revenue recognized when control transfers based on the nature of the goods or

services provided.

As a practical expedient, we do not record a significant financing component when we expect, at contract inception,

that the period between the transfer of the products or services to the customer and customer payment for the

products or services will be one year or less. In addition, most of our contracts require our customers to pay a down

payment on systems to be shipped. We do not record a significant financing component for down payments, as the

timing difference between when the consideration is paid and when the system is transferred to the customer arises

from reasons other than financing.

The total consideration of the contract is allocated between all distinct performance obligations in the contract

based on their standalone selling prices. The standalone selling prices are determined based on other standalone

sales that are directly observable, when possible. However, for the majority of our performance obligations these are

not available. If no directly observable evidence is available, the standalone selling price is determined using the

adjusted market assessment approach, which requires judgment and is based on multiple factors including, but not

limited to, historical pricing practices and discounting trends for products and services.

For options to buy goods or services that are considered a material right, the discount offered from the standalone

selling price will be allocated from the consideration of the other goods and services in the contract if it is

determined the customer will exercise the option to buy, adjusted for the likelihood. Revenue will be recognized in

line with the nature ofthe related goods or services. If it is subsequently determined that the customer will not

exercise the option to buy, or the option expires, revenue will be recognized.

Occasionally we enter into bill-and-hold transactions, where we invoice a customer for a system that is ready for

delivery but not shipped to the customer until a later date, based on the customer’s request. Transfer of control is

determined to have occurred only when there is a substantive reason for the arrangement, the system is separately

identified as belonging to the customer, the good has been accepted by the customer and is ready for delivery, and

we do not have the ability to direct the use of the system.

We generate revenue from lessor agreements, which we classify as asales-type lease when the lease meets any of

the following criteria at lease commencement:

•The lease transfers ownership of the underlying asset to the lessee by the end of the lease term;

•The lease grants the lessee an option to purchase the underlying asset, that the lessee is reasonably certain to

exercise;

•The lease term is for the major part of the remaining economic life of the underlying asset. However, if the

commencement date falls at or near the end of the economic life of the underlying asset, this criterion shall not be

used for the purposes of classifying the lease;

•The present value of the sum of the lease payments and any residual value guaranteed by the lessee that is not

already reflected in the lease payments equals or exceeds substantially all of the fair value of the underlying asset;

or

•The underlying asset is of such a specialized nature that it is expected to have no alternative use to the lessor at

the end of the lease term.

Forsales-type leases where substantially all the risks and rewards incidental to ownership of an asset are transferred

to the lessee, revenue is recognized at commencement of the lease. If material, the difference between the gross

finance receivable and the present value of the minimum lease payments is initially recognized as unearned interest

and presented as a deduction to the gross finance receivable. Interest income is recognized in the Consolidated

statements of operations over the term of the lease contract using the effective interest method.

Leases that are not asales-type lease are operating lease arrangements. If we have offered the customer an

operating lease arrangement, the system is included in Property, plant and equipment upon commencement of the

lease. Revenue from operating lease arrangements is recognized in the Consolidated statements of operations on a

straight-line basis over the term of the lease contract.

Disaggregation of revenue

Our revenue from contracts with customers, on a disaggregated basis, aligns with our reportable segment

disclosures with the addition of disaggregation of net system sales per technology and per end-use.

Netsystem sales per technology were as follows:

Net system sales per end-use were as follows:

Contract assets and liabilities

The contract assets relate to our right to a consideration in exchange for goods or services delivered, when that

right is conditional on something other than the passage of time. The contract assets are transferred to the

receivables when the receivables become unconditional. The contract liabilities primarily relate to remaining

performance obligations for which consideration has been received for goods and services not yet recognized in

revenue, aswell as deferred revenue from goods and services delivered, based on the allocation of the

consideration to the related performance obligations in the contract.

The majority of our customer contracts result in both asset and liability positions. At the end of each reporting

period, these positions are netted on a contract basis and presented as either an asset or a liability in the

Consolidated balance sheets. Consequently, a contract balance can change between periods from a net contract

asset balance to a net contract liability balance in the balance sheet, and vice versa.

Significant changes in the contract assets and the contract liabilities balances during the periods are as follows.

Theincrease in the net contract liabilities to€17.9 billion as of December 31, 2024, compared to€16.0 billion as of

December 31, 2023, is mainly driven by systems shipped for which revenue has not yet been recognized, as well as

an increase in payments for goods and services which will be delivered in the future. Cumulative catch-up

adjustments recognized in our current year’s revenue are due to updated estimates for system volume, discounts

and credits included in our volume purchase agreements. The increase in “Other”, compared to 2023, is mainly due

to an increase of down payments reclassified to refund liabilities. Refund liabilities are presented as accrued and

other liabilities in the Consolidated balance sheets.

Remaining performance obligations

Our customers generally commit to purchase systems, service or field options through separate sales orders and

service contracts. Typically the terms and conditions of these sales orders come from volume purchase agreements

with our customers which cover up tofive years. The revenues for each committed performance obligation are

estimated based on the terms and conditions agreed through the volume purchase agreements.

When revenues will be recognized is mainly dependent on when systems are delivered or installed, as well as when

service projects and field upgrades are performed and completed. All of which is estimated based on contract terms

and communication with our customers, including the customer facility readiness to take delivery of our goods or

services, as well as applicable export control restrictions. The volume purchase agreements may be subject to

modifications or changes in estimates, impacting the amount and timing of revenue recognition for the anticipated

revenues.

As of December 31, 2024, the remaining performance obligations amount to €43.3 billion (December 31, 2023:

€45.0 billion). The remaining performance obligations mainly include orders related to DUV immersion, NXE and EXE

lithography systems. We estimate that 59% (December 31, 2023:57%) of these anticipated revenues will be

recognized during the next 12 months.

3. Segment disclosure

ASML has one reportable segment, since we are a holistic lithography solution provider, for the development,

production, marketing, sales, upgrading and servicing of advanced semiconductor equipment systems, consisting

of lithography, metrology and inspection systems. The Chief Operating Decision Maker regularly sets and monitors

goals and boundaries on a consolidated basis to make decisions about resource allocation and assess

performance. ASML's Chief Operating Decision Maker is the combination of the functions of the CEO and CFO.

Management reporting includes net system sales figures of new and used systems, sales per technology and sales

per end-use. For sales per technology and end-use, see Note 2 Revenue from contracts with customers. The Chief

Operating Decision Maker predominantly uses consolidated net income and sales to evaluate income generated

from segment assets in deciding whether to reinvest profits into the segment or invest in other activities, such as

share buybacks or payments of dividends. Consolidated net income and sales are used to monitor budget versus

actual results. The monitoring of budgeted versus actual results is used in assessing performance of the segment.

All significant segment expenses are presented in the Consolidated statements of operations and are regularly

reviewed by the Chief Operating Decision Maker.

Net system sales for new and used systems were as follows:

For geographical reporting, total net sales are attributed to the geographic location in which the customers’ facilities

are located. Long-lived assetsare attributed to the geographic location in which these assets are located. Total net

sales and long-lived assetsby geographic region were as follows:

In 2024, four customers exceeded more than 10% of total net sales, totaling€15.2 billion, or 53.8%, of total net

sales. In 2023 and 2022, two customers exceeded more than 10% of total net sales, in 2023 totaling€14.9 billion, or

53.9% (2022:€11.8 billion, or 55.8%). Ourthree largest customers (based on total net sales) accounted for€2.6

billion, or 54.1%, of accounts receivable and finance receivables at December 31, 2024, compared with€3.7 billion,

or 64.4%, at December 31, 2023 and€5.3 billion, or 78.6%, at December 31, 2022.

Theincrease in total net sales of€0.7 billion, or 2.6%, to€28.3 billion in 2024, from€27.6 billion in 2023 is mainly

driven by the first EXE systems being successfully installed in the field, increased DUV immersion system shipments

and higher net service and field option sales. This was partially offset by lower NXE sales due to fewer NXE capacity

additions by our customers.

The increase in net service and field option sales is mainly driven by higher service sales, which has benefited from

a growing installed base and higher lithography tool utilization levels at certain customers.

The Logic sector experienced a slower ramp of new nodes at some customers, leading to multiple fab push-outs

and changes in the timing of demand. The Memory sector was stronger in 2024 due to technology transitions

driven by artificial intelligence (AI)-related Memory demand. China saw the largest absolute geographic sales

growth in support of expanding capacity to meet worldwide demandand was able tocatch up on the backlog of

orders that were previously unfulfilled due to supply constraints.

The increase in long-lived assetsin the Netherlands during 2024 is primarily related to the construction of factory

and research facility expansions and office space at our headquarters in Veldhoven, in order to support our

continued growth. In the US the increase is primarily related to the expansion of the Wilton factory site.

4. Cash and cash equivalents and short-term investments

Cash and cash equivalents consist primarily of highly liquid investments, such as bank deposits, deposits with

governments and government-related bodies, money market funds and bank accounts readily convertible to known

amounts of cash with insignificant interest rate risk and original maturities to the entity holding the investments for

three months or less at the date of acquisition.

Investments with original maturities at the date of acquisition greater than three months andone year or less are

presented as short-term investments. Fair value changes in these investments, which are not temporary, are

recognized in the Consolidated statements of operations. Short-term investments have insignificant interest rate risk.

Cash and cash equivalents and short-term investments consist of the following:

Cash and cash equivalents mainly increased due to net cash provided by operating activities, driven by net income

and down payments. This increase is partly offset by purchases of property, plant and equipment, purchases of

treasury shares, loans issued and dividend paid.

Deposits with financial institutions, governments and government-related bodies and investments in money market

funds have an investment-grade credit rating as rated by credit rating institutions such as Standard & Poor's,

Moody’s or Fitch. Our cash and cash equivalents are predominantly denominated in euros and to some extent in US

dollars, Taiwanese dollars, South Korean won and Chinese yuan.

The carrying amount of these assets approximates their fair value.

As of December 31, 2024, no restrictions on usage of cash and cash equivalents exist (2023: no restrictions).

5. Accounts receivable, net

Accounts receivable are initially measured at fair value and are subsequently measured at amortized cost, less

allowance for credit losses, if material. The carrying amount of the accounts receivable approximates the fair value.

We perform ongoing credit evaluations on our customers’ financial condition. We periodically review whether an

allowance for credit losses is needed by considering factors such as historical payment experience, credit quality,

aging of the accounts receivable balances, expected lifetime losses and current economic conditions that may affect

a customer’s ability to pay.

When entering into arrangements to sell our receivable, we derecognize the receivable only when meeting the

derecognition criteria. The criteria require isolation from the seller, granting the buyer the right to pledge or exchange

the receivables, and legal transfer ofcontrol over the receivable.

Accounts receivable consist of the following:

Theincrease in accounts receivable as of December 31, 2024, compared to December 31, 2023, ismainly due to

the timing of cash receipts from our customers, which is partially offset by increased factoring of receivables.

In 2024,€2,042.7 million of receivables were sold through factoring arrangements(2023:€993.4 million). The

amounts consist of€1,639.9 million (2023:€245.8 million) of regular trade receivables and€402.8 million (2023:

€747.6 million) of absolute, unconditional, irrevocable accounts receivable for down payments on systems to be

shipped in 2025 and thereafter. These receivables have been derecognized, since the assets were isolated from the

seller, control was transferred to the buyer and there were no restrictions on the buyer related to the factored items.

The fair value of the receivables sold was substantially the same as their carrying value. The cash receipt is treated

as an operating cash flow within the Consolidated statements of cash flows.

6. Finance receivables, net

Finance receivables consist of receivables in relation tosales-type leases. We perform ongoing credit evaluations of

our customers’ financial condition. We periodically review whether an allowance for credit losses is needed by

considering factors such as historical payment experience, credit quality, the aging of the finance receivables

balances, expected lifetime losses and current economic conditions that may affect a customer’s ability to pay.

The following table lists the components of the finance receivables as of December 31,2024 and 2023:

Thedecrease in finance receivables as of December 31,2024, compared to December 31, 2023, is the result of

systems being purchased at the end of their free-use or evaluation periods, partially offset by additional systems

shipped with a free-use or evaluation period. These sales-type leases support the capacity ramp-up of high-end

systems which are part of the early-insertion life cycle of the technology or system type. It is expected that these

systems will be purchased at the end of the free-use or evaluation period.

Gross profit recognized at the commencement date of the lease for oursales-type leases amounted to€114.3

million during 2024 (2023:€460.9 million;2022:€429.1 million).

At December 31,2024, payments of the finance receivables in the next five years and thereafter are:

In 2024,2023 and 2022 we did not record any expected credit losses from finance receivables. As of December 31,

2024, the finance receivables were neither past due nor impaired.

7. Inventories, net

Inventory costs are computed on a first-in, first-out basis. Our inventory values comprise purchased materials, freight

expenses, customs, duties, production labor and overhead. The valuation of inventory includes determining which

fixed production overhead costs should be capitalized into inventory based on the normal capacity of our

manufacturing and assembly facilities. During periods when production is below our established normal capacity

level, some of our fixed overhead costs are not included in the cost of inventory; instead, they are recognized as cost

of sales as incurred.

Inventory is valued at the lower of cost or net realizable value, based on assumptions about future demand and

market conditions. Valuation of inventory also requires us to establish provisions for inventory that is defective,

obsolete or in excess. We use our demand forecast to develop manufacturing plans and utilize this information to

compare against raw materials and work-in-progress and finished product levels to determine the amount of

defective, obsolete or excess inventory.

Inventories consist of the following:

Theincrease in inventory in 2024, compared to 2023, is mainly driven by theintroduction of EXE. Additionally,

inventory increased in 2024 due to higher costs and longer cycle times of our latest technologies and growing install

base.

A summary of movements in the inventory reserves is as follows:

The additions for 2024, 2023 and 2022 are recorded in cost of sales. The additions for the year mainly relate to

inventory items which became obsolete due to technological developments and design changes.

8. Other assets

Other current and non-current assets consist of the following:

1. For further details on advance payments to Carl Zeiss SMT GmbH, see Note 26 Related parties and variable interest entities.

2. For further details on derivative financial instruments, see Note 25 Financial risk management.

Prepaid expenses mainly include prepaid income taxes of intercompany profit on inventory that has not yet been

realized by ASML of€380.1 million (2023:€324.5 million).

9. Equity method investments

Equity investments which we are able to exercise significant influence over but do not control, are accounted for

using the equity method and presented on our Consolidated balance sheets within Equity method investments. The

difference between the cost of our investment and our proportionate share in the carrying value of the investee’s

underlying net assets as of the acquisition date is the basis difference. The basis difference is allocated to the

identifiable assets and liabilities based on their fair value as of the acquisition date (i.e. the date on which we obtain

significant influence), with the excess costs of the investment over our proportional fair value of the identifiable

assets and liabilities being equity method goodwill.

We amortize the basis difference related to the other intangible assets over the estimated remaining useful lives of

these assets that gave rise to this difference. The remaining weighted-average life of the finite-lived intangible assets

acquired is 12.1 years and is amortized using a straight-line method. In-process R&D is initially capitalized at fair

value as anintangible asset with an indefinite life. When the R&D project is complete, it is reclassified as an

amortizable purchased intangible asset and is amortized over its estimated useful life. If the project is abandoned, we

will record the full basis difference charge for the value of the related intangible asset in our Consolidated statements

of operations in the period of abandonment. Equity method goodwill is not amortized or tested for impairment;

instead the equity method investment is tested for impairment whenever events or changes in circumstances

indicate that the carrying value of the investment may not be recoverable.

Under the equity method, after initial recognition at cost, our Equity method investments are adjusted for our

proportionate share in the profit or loss and other comprehensive income of the investee, recognized on a one-

quarter time lag to allow for the timely preparation of financial information and presented within Profit from equity

method investments. Our proportionate share in the profit or loss of the investee is adjusted for any differences in

accounting principles and policies, basis difference adjustments and intra-entity profits. Receipt of dividends

reduces our Equity method investments, which is presented as an operating cash flow based on the nature of the

distributions.

Equity method investments consists of a 24.9% equity interest acquired on June 29, 2017, in Carl Zeiss SMT

Holding GmbH & Co. KG, a limited partnership that owns Carl Zeiss SMT GmbH, our single supplier of optical

columns.

For the year ended December 31, 2024, we recorded aprofit from Equity method investments of€209.8 million

(2023:€191.3 million) in our Consolidated statements of operations. This profit includes the following components:

•Profit of€216.4 million (2023:€212.1 million)related to our share of Carl Zeiss SMT Holding GmbH & Co. KG’s net

income after accounting policy alignment

•Cost due to basis difference amortization related to intangible assets of€27.4 million (2023:€26.7 million)

•Cost/(Gain) due to intercompany profit elimination of€(20.8) million (2023:€(5.9) million)

In 2024, we received a dividend of€225.4 million (2023:€218.0 million) from Carl Zeiss SMT Holding GmbH

& Co. KG.

Carl Zeiss SMT Holding GmbH & Co. KG is a privately held company; therefore, quoted market prices for its stock

are not available.

10. Business combinations and divestitures

Acquisitions of subsidiaries are included on the basis of the acquisition method. The cost of acquisition is measured

based on the consideration transferred at fair value, the fair value of identifiable assets distributed and the fair value

of liabilities incurred or assumed at the acquisition date (i.e. the date on which we obtain control). Goodwill is

capitalized as the excess of the costs of an acquired subsidiary, net of the amounts assigned to identifiable assets

acquired and liabilities incurred or assumed. Acquisition-related costs are expensed when incurred in the period in

which they arise or the service is received.

Business combinations

During 2023 we concluded the acquisition of EO Technical Solutions, LLC, which functions as a parts repair and

rebuild services company. In 2023, we also acquired part of the semiconductor equipment activities from Philips

Engineering Solutions. The total related goodwill of €33.0 million has been allocated to the ASML reporting unit.

11. Goodwill

Goodwill represents the excess of the costs of an acquisition over the fair value of the amounts assigned to assets

acquired and liabilities incurred or assumed of the acquired subsidiary at the date of acquisition. Goodwill on

acquisition of subsidiaries is allocated toreporting units for the purpose of impairment testing. The allocation is

made to those reporting units that are expected to benefit from the business combination in which the goodwill

arose. Goodwill is stated at cost less accumulated impairment losses.

Goodwill is tested for impairment annually or whenever events or changes in circumstances indicate that the carrying

amount of the goodwill may not be recoverable. To determine whether it is necessary to perform the quantitative

goodwill impairment test, we perform a step-zero qualitative assessment annually. If we determine that it is more

likely than not that the fair value of a reporting unit will exceed its carrying amount, we do not perform a quantitative

goodwill impairment test.

Goodwill mainly results from the acquisitions of Cymer and HMI. The balance as of December 31, 2024, is€4,588.6

million (2023:€4,588.6 million).

We have identifiedtwo reporting units: Reporting Unit ASML and Reporting Unit Cymer Light Sources. As of

December 31, 2024, the goodwill allocated to Reporting Unit ASML amounts to€4,126.3 million (2023:€4,126.3

million) and Reporting Unit Cymer Light Sources amounts to€462.3 million (2023:€462.3 million).

Based on our assessment during the annual goodwill impairment test, we believe it is more likely than not that the

fair values of the reporting units exceed their carrying amounts, and therefore goodwill was not impaired as of

December 31, 2024. The accumulated impairment as of December 31, 2024, isnil (2023: nil).

12. Intangible assets, net

Intangible assets include brands, intellectual property, developed technology, customer relationships and other

intangible assets not yet available for use. These finite-lived intangible assets are stated at cost, less accumulated

amortization and accumulated impairment losses. Amortization is calculated using the straight-line method based on

the estimated useful lives of the assets.

Finite-lived intangible assets are assessed for impairment annually, or whenever there is an indication that the

balance sheet carrying amount may not be recoverable using cash flow projections for the useful life.

The following table shows the respective useful lives for intangible assets:

As of December 31, 2024, intangible assets consist mainly ofbrands, intellectual property, developed technology and customer relationships obtained from the acquisitions of HMI (2016) and Cymer (2013):

The Consolidated statements of operations include the following amortization charges:

As of December 31, 2024, the intangible assets not yet available for use, as included in Other, amount to €11.8

million (2023:€37.3 million) and are allocated to Reporting Unit ASML.

As of December 31, 2024, the estimated amortization expenses for intangible assets for the next five years and

thereafter are as follows:

13. Property, plant and equipment, net

Property, plant and equipment is stated at cost, less accumulated depreciation and accumulated impairment losses.

Costs of assets manufactured by ASML include direct manufacturing costs, production overhead and interest costs

incurred for qualifying assets during the construction period. Property, plant and equipment are depreciated on a

straight-line basis in the Consolidated statements of operations over their estimated useful lives, except for land,

which is not depreciated. Government grants related to assets are recognized when the grant conditions have been

substantially met. Government grants are presented as a deduction of the carrying amount of the asset they relate to

and recognized in the Consolidated statements of operations on a systematic basis over the useful life of the asset.

Evaluation systems leased to our customers under an operating lease are capitalized as Property, plant and

equipment at cost and depreciated over the respective lease term. Leased assets that are returned to ASML upon

expiration of the lease term are either taken back into Property, plant and equipment, as they will be used internally

by D&Eor transferred back to Inventories to be reworked and sold.

The carrying values of prototypes, tooling and equipment that are intended to be sold, but first internally utilized for

R&D purposes, are reclassified from inventories to Property, plant and equipment and depreciated while being

internally used. When no longer required for R&D activities, the assets’ carrying value is reclassified back to

Inventories and reworked to make them ready for sale to our customers. These transfers are reported as Net non-

cash movements to/from inventories in our Property, plant and equipment movement schedule.

Property, plant and equipment is assessed for impairment whenever there is an indication that the carrying amount

may not be recoverable using cash flow projections for the useful life.

The following table shows the respective useful lives for Property, plant and equipment:

Property, plant and equipment consists of the following:

As of December 31, 2024, the carrying amount includes assets under construction of€1,729.7 million (2023:

€1,658.0 million) primarily consisting ofbuildings, as well as machinery and equipment.

As of December 31, 2024, the carrying amount of land amounts to€304.3 million (2023:€229.7 million).

The addi tions in 2024 in Land and buildings, as well as Furniture, fixtures and other mainly relate to theconstruction

of factory and research facility expansions and office space at our headquarters in Veldhoven, in order to support

our continued growth.

The additions in 2024 in Machinery and equipment mainly relate to the upgrade and expansion of production tooling

to support the growth of our business, as well as investments in prototypes of new technologies.

The additions in 2024 in Leasehold improvements mainly relate to installation of cleanrooms and office space for

leased properties in both the US and Berlin.

The Consolidated statements of operations include the following depreciation charges:

14. Right-of-use assets and lease liabilities

We determine whether an arrangement contains a lease at inception. Leases are included in Right-of-use assets,

Accrued & other current liabilities and Accrued & other non-current liabilities in our Consolidated balance sheets.

Right-of-use assets represent our right to use an underlying asset for the lease term and lease liabilities represent

our obligation to make lease payments arising from the lease. Right-of-use assets and lease liabilities are recognized

at commencement date based on the present value of lease payments over the lease term. As our leases do not

provide an implicit rate, we use our incremental borrowing rate based on the information available at

commencement date in determining the present value of lease payments. The Right-of-use assets include any lease

payments made at or before the commencement date and are reduced by lease incentives. Our Right-of-use asset

and lease liability valuation may include options to extend or terminate the lease when it is reasonably certain that we

will exercise that option. Lease expensesare recognized on a straight-line basis over the lease term.

We have lease agreements with lease and non-lease components. The lease components are accounted for

separately from non-lease components. The allocation of the consideration between lease and non-lease

components is based on the relative standalone prices of lease components included in the lease contracts.

Right-of-use assets consist of the following leases:

ASML owns the majority of real estate we utilize for manufacturing, supply chain management, R&Dand general

administration at our headquarters in Veldhoven, the Netherlands. Our other locations worldwide, mostly related to

customer support, are leased. The total right-of-use assets related to properties includesa new finance lease

arrangement for land of€32 million.

The right-of-use assets increased in 2024 compared to 2023 mainly due to new land and warehouse leases and

extensions of existing leases.

Lease liabilities are split between current and non-current. The non-current portion mainly consists of properties and

warehouses and is presented as part of Accrued and other liabilities. For the year ended December 31, 2024, Lease

liabilities increased by€78.1 million, mainly due to lease extensions and new leases of properties that commenced

during 2024, of which €16.9 million relates to a finance lease.

The Consolidated statements of operations include the following lease expenses:

The total cash flows relating to the leases are as follows:

The total cash flow decreased in 2024 comparedto 2023 due to fewer prepayments of new land leases in 2024

compared to 2023.

The weighted average remaining lease term and weighted average discount rate related to the leases are as follows:

The weighted average remaining lease term increased in 2023 due to a new land lease which has a lease term of 70

years. In 2024 the weighted average remaining lease term decreased due to new land lease additions with shorter

lease terms compared to 2023.

15. Accrued and other liabilities

Accrued and other liabilities consist of the following:

1. Costs to be paid includes an amount payable to related parties. For further details, see Note 26 Related parties and variable interest entities.

2. For further details on derivative financial instruments, see Note 25 Financial risk management.

3. For further details onlease liabilities, see Note 14 Right-of-use assets and lease liabilities.

Costs to be paid represent ASML’s estimate of contractual liability as of the reporting date, to be settled in a future

period, based upon the underlying terms and conditions. Costs to be paid as of December 31, 2024, include VAT

payables and accrued costs for unbilled services provided by suppliers, including contracted labor, outsourced

services and consultancy.

Personnel-related items mainly consist of accrued annual short-term incentive (STI) bonus plans, accrued vacation

days, accrued pension premiums, accrued wage tax and accrued vacation allowance. The increase in the accrued

personnel-related items compared to prior year is primarily attributable to an increase in the number of FTEs, higher

wages and related cost, to support the continued growth of our business.

The refund liability represents the amount of consideration received from customers that ASML does not expect to

be entitled to. Refund liabilities do not meet the definition of a contract liability.

The standard warranty reserve is based on historical product performance and total expected costs to fulfill our

warranty obligation. Annually, we assess and update the standard warranty reserve based on the latest actual

historical warranty costs and expected future warranty costs. Total changes in standard warranty reserve for the

years 2024 and 2023 are as follows:

16. Long-term debt and interest and other costs

Long-term debt represents debt issued privately without registration with a government authority and is payable to

others under the terms of a signed agreement. Long-term debt is initially recognized at fair value and subsequently

measured at amortized cost. Debt is qualified as long-term debt as long as the group has an unconditional right to

defer settlement of the liability for at least 12 months after the reporting period.

Interest accruals and payments relating to long-term debt are accounted for as part of Accrued and other liabilities.

Interest and other costs should be accrued and recorded with the passage of time over the agreed term, regardless

of when the interest receipt or payment has taken place.

Long-term debt consists of the following (amounts for bonds represent carrying amount, not the principle amount):

All senior notes are redeemable at the option of ASML, in whole or in part, at any time by paying a make whole

premium, and unless previously redeemed, will be redeemed at 100% of their principal amount on the maturity date.

Our obligations to make principal repayments under our senior notes and other borrowing arrangements excluding

interest expense as of December 31, 2024, are as follows:

Eurobonds

The following table summarizes the carrying amount of our outstanding Eurobonds, including the fair value of

interest rate swaps used to hedge the change in the fair value of the Eurobonds:

1. The fair value of the interest rate swaps excludes accrued interest.

We use interest rate swaps to minimize the net interest exposure for the group by aligning the interest terms of the

available cash and the interest-bearing debt. The fair value changes of these interest rate swaps are recorded on

the Consolidated balance sheets under Current and non-current accrued and other liabilities, as well as Current and

non-current other assets, and the carrying amount of the Eurobonds is adjusted for these fair value changes.

The following table summarizes the estimated fair value of our Eurobonds:

1. Source: Bloomberg Finance LP.

The fair value of our Eurobonds is estimated based on quoted market prices as of December 31, 2024. The fair

value deviates from the principal amount, due to changes in market interest rates and credit spreads since the issue

of our Eurobonds, which carry a fixed coupon interest rate.

Debt acquired from Berliner Glas (ASML Berlin GmbH)

The loan of Berliner Glas (ASML Berlin GmbH) is a mortgage loan of€18.2 million with an annual interest rate of

0.5%, repayable in 2034. Debt decreased compared to 2023, due to repayments made in 2024.

Lines of credit

We maintain an available committed credit facility of€1,500.0 million as of December 31, 2024 (2023:€700.0

million), with a group of banks. No amounts were outstanding under the committed credit facility at the end of 2024

and 2023. This facility has a maturity date of May 2029 with two one year uncommitted extension options on the

first and second anniversary of the facility (extending the maturity potentially to 2031). Outstanding amounts under

this credit facility will bear an interest of Euribor plus a margin. The margin depends on ourcredit rating. In addition,

there is a fee based on the utilization percentage of the facility.

ASML also has non-committed lines of credit available. These facilities provide ASML with the ability to request

short-term unsecured loans from time to time for an aggregate amount not exceeding€2.75 billion. No amounts

have been drawn under these lines of credit. Outstanding amounts under the non-committed facility will bear

interest based on market conditions at the moment of drawdown.

Furthermore, ASML has non-committed guarantee facilities under which guarantees in the ordinary course of

business, such as customs or rental guarantees, can be provided to third parties. These facilities also cover standby

letters of credit, corporate credit cards and foreign exchange limits and are available in Euro, US dollar, Japanese

yen and Taiwanese dollar. As of December 31, 2024 amounts of€44.1 million (2023:€46.9 million), JPY 4,825.0

million (2023: JPY nil) and TWD 553.7 million (2023: TWDnil ) were utilized under these facilities.

In 2024 ASML entered into a€1.5 billion Euro Commercial Paper (ECP) program. The program allows ASML to issue

commercial paper up to 364 days in tenor, in a number of currencies. As of December 31, 2024, there is no

commercial paper outstanding under this program.

Interest and other, net

Interest and other, net consists mainly of interest income and interest expenses. In 2024, the interest income

component is€182.4 million (2023:€193.9 million;2022:€16.2 million). Income mainly relates to interest income on

cash and cash equivalents. In 2024, the interest expense component is€162.6 million (2023:€152.7 million;2022:

€60.8 million). The expenses mainly relate to interest expense on our Eurobonds and interest rate swaps.

17. Commitments and contingencies

Commitments

We have various contractual obligations, some of which are required to be recorded as liabilities in our Consolidated

balance sheets, including long- and short-term debt and lease commitments. Other contractual obligations, namely

unconditional purchase obligations, are generally not required to be recognized as liabilities but are required to be

disclosed.

Our contractual obligations as of December 31,2024, can be summarized as follows:

1. Long-term debt obligations mainly relate to principal amounts and interest payments of our Eurobonds. For the amounts excluding interest

expenses and for further details, see Note 16 Long-term debt and interest and other costs.

2. For further details, see Note 14 Right-of-use assets and lease liabilities.

We have purchase obligations toward suppliers in the ordinary course of business which mainly relate to goods and

services for our operations and obligations relating to further expansion and upgrade of our facilities. The general

terms and conditions of the agreements relating to the major part of our purchase obligations as of December 31,

2024, contain clauses that enable us to delay or cancel delivery of ordered goods and services up to the dates

specified in the purchase agreements, in line with the timing of future sales. The terms and conditions that we

normally agree with our suppliers give us additional flexibility to adapt our purchase obligations to our requirements

in light of the cyclicality and technological developments inherent in the industry in which we operate.

Contingencies

ASML is subject to proceedings, litigation and other actual or potential claims, including those related to a potential

violation of laws and regulations. ASML’s customers may be subject to claims of infringement from third parties

alleging that the ASML equipment used by those customers in the manufacture of semiconductor products, and/or

the methods relating to use of the ASML equipment, infringesone or more patents issued to those third parties.

If these claims were successful, ASML could be required to indemnify such customers for some or all of the losses

incurred or damages assessed against them as a result of that infringement.

In connection with any proceedings and claims, our management evaluates, based on the relevant facts and legal

principles, the likelihood of an unfavorable (or favorable) outcome, and whether the amount of the loss (or gain) can

be reasonably estimated. Judgment is required in these evaluations, including judgments regarding the validity of

asserted claims and the likely outcome of legal and administrative proceedings. The outcome of these proceedings,

however, is subject to a number of factors beyond our control, most notably the uncertainty associated with

predicting decisions by courts and administrative agencies. In addition, estimates of the potential costs (or gains)

associated with legal and administrative proceedings frequently cannot be subjected to any sensitivity analysis, as

damage estimates or settlement offers by claimants may bear little or no relation to the eventual outcome. Finally,

in any particular proceeding, we may agree to settle or to terminate a claim or proceeding in which we believe that

it would ultimately prevail where we believe that doing so, when taken together with other relevant commercial

considerations, is more effective than engaging in an expensive and protracted litigation, the outcome of which

is uncertain.

As of December 31, 2024, management has determined that ASML does not have any material contingencies which

are considered probable or reasonably possible for each year presented in our Consolidated balance sheets.

18. Personnel expenses and employee information

Personnel expenses for all payroll employees were as follows:

The continued increase in personnel expenses is primarily attributable to an increase in the number of FTEs, higher

wages and related cost, to support thecontinued growth of our business.

The average number of payroll employees in FTEs was:

The total number of payroll and temporary employees asof December 31 in FTE per sectorwas:

Short-term incentive bonus plans

We have annual performance-related STI bonus plans for our employees. Under these plans, the employee bonus

payout depends on the employee’s job grade, the type of bonus plan and the company/individual performance. The

employee bonus payout (excluding the Board of Management) ranges between 0% and 126% of their annual base

gross salary. The 2024 STI bonus is accrued for as part of Accrued and other liabilities in the Consolidated balance

sheets and will be paid in the first quarter of 2025.

The STI bonus expenses for the (former) Board of Management and other employees were as follows:

1. On April 24, 2024, Peter T.F.M. Wennink and Martin A. van den Brink stepped down from their roles as Presidents of ASML and are, therefore,

presented as former Board of Management.

19. Employee benefits

Contributions to defined contribution retirement benefit plans are recognized as an expense when employees have

rendered service entitling them to the contributions. Payments made to state-managed retirement benefit schemes

are dealt with as payments to defined contribution plans where our obligations under the plans are equivalent to

those arising in a defined contribution retirement benefit plan.

We maintainone multi-employer union-defined benefit pension plan and various other defined contribution pension

plans covering a substantial number of our employees. ASML accounts for its multi-employer defined benefit plan as

if it were a defined contribution plan for the following reasons:

•ASML is affiliated to an industry-wide pension fund and uses the pension scheme in common with other

participating companies.

•Under the regulations of the pension plan, the only obligation these participating companies have toward the

pension fund is to pay the annual premium liability. Participating companies are under no obligation whatsoever to

pay off any deficits the pension plan may incur. Nor have they any claim to any potential surpluses.

Our pension and retirement expenses for all employees for the years ended December 31,2024,2023 and 2022,

were:

The accrued pension premiums were €75.9 million as of December 31, 2024, and€39.2 million as of December 31,

Multi-employer union plan

In accordance with the collective bargaining agreements effective for the industry in which we operate, which have

no expiration date, there are 23,082 eligible payroll employees in the Netherlands (53.9% of our total payroll FTEs)

that participate in a multi-employer union plan. Our net periodic pension cost for this multi-employer union plan for

any period is the amount of the required employer contribution for that period.

This multi-employer union plan is managed by PME (Stichting Pensioenfonds van de Metalektro) and this plan

covers approximately 1,566 companies and approximately 183,003 contributing members. Every participating

company contributes a premium that is based on the same contribution rate. This contribution rate can fluctuate

yearly based on the coverage ratio of the multi-employer union plan. For 2024, the contribution rate was 28.0%;

(2023:28.0%;2022:28.0%). For 2024, our contribution to this multi-employer union plan (including the premiums

paid by employees) was 18.2% (2023:18.3%;2022:15.7%) of the total contribution to this plan. For 2025, we

expect to contribute around€402.0 million to this plan (including the premiums paid by employees). The pension

rights of each employee are based upon the employee’s average salary during employment.

The PME multi-employer union plan monitors its risks on a global basis and is subject to regulation by Dutch

governmental authorities. By Dutch law (the Dutch Pension Act), a multi-employer union plan must be monitored

against specific criteria, including the coverage ratio of the plan’s assets to its obligations. The coverage ratio is

calculated by dividing the funds capital by the total sum of pension liabilities and is based on actual market interest

rates. The legally required minimal coverage ratio is 104.3% (2023:104.3%). Compared to the previous year, the

coverage ratio of PME increased to 113.1% as per December 31, 2024 (December 31, 2023: 109.4%). A recovery

plan is in place intended to improve this coverage ratio toward a minimum of 119.1%. ASML has no obligation to

pay any deficits the pension fund may incur, nor does it have any claim to any potential surpluses.

Other defined contribution and pension plans

We also participate in several other defined contribution pension plans (inside and outside the Netherlands), with our

expenses for these plans equaling the employer contributions made in the relevant period.

Deferred compensation plans

For more senior US employees we have a non-qualified deferred compensation plan that allows them to defer a

portion of their salary, bonus and commissions. The plan allows us to credit additional amounts to the participants’

account balances. The participants divide their funds among the investments available in the plan. Participants elect

to receive their funds in future periods after the earlier of their employment termination or their withdrawal election,

at least three years after deferral. Expenses were close tonil relating to this plan in 2024,2023 and 2022. As of

December 31, 2024, our liability under deferred compensation plans was€111.8 million (2023:€94.7 million). The

related compensation plan assets are €113.1 million (2023:€95.2 million).