Craig DeYoung - Vice President, Investor Relations Eric Meurice - Chairman of the Management Board, President, Chief Executive Officer Peter Wennink - Chief Financial Officer, Executive Vice President

Nav Sheera - Lehman Brothers Nicolas Gaudois - Deutsche Bank Simon Schafer - Goldman Sachs Herman Betten - Betten Beursmedia Titus Menzies - Jefferies & Co. Mehdi Hosseini - FBR Jay Deahna - JP Morgan Chase & Co. Robert Maire - Needham & Co. Thomas Brenier - Société Générale Paraag Amin - Citigroup Marcel van de Hoef - Bloomberg Didier Scemama - ABN AMRO Janardan Menon - Dresdner Kleinwort Wasserstein Mark Fitzgerald - Banc of America Securities Satya Kumar - Credit Suisse Alan Fournier - Pennant Capital Mark Bachman - Pacific Crest Securities Stuart Adrian - Morgan Stanley Dean Witter Antoine Badel - Credit Suisse Jan Willem Berghuis - Kempen & Co.

Good afternoon and good morning. This is Craig DeYoung, Head of Investor Relations at ASML. Welcome to our investor and media call and webcast. The subject of the call is ASML’s 2006 third quarter results according to U.S. GAAP. Here with me today are Chief Executive Officer, Eric Meurice, and Chief Financial Officer, Peter Wennink. ASML draws your attention to the message on today’s press release and presentation regarding forward-looking statements. The call will be 60 minutes in duration. On our website at ASML.com, you will find our press release, a brief presentation, and financial reporting with figures in U.S. GAAP and IFRS. Now, I would like to turn the call over to Eric for a brief call introduction.

Thank you, Craig. Good afternoon, good morning. Thank you for attending our conference call, but I will correct Craig. First, I will be a bit more lengthy on the introduction today, as there are obvious questions which we felt it would be more efficient if I were to try to address them in the introduction discussion. So I have in fact three messages in this introduction. First of all, our execution performance. You can see from our Q3 results that we have again delivered on key performance areas, namely growth, profitability, and liquidity. In Q3, we have been able to increase our sales by 80% year to year, leading to a projected 40% growth for the full year of 2006 versus 2005. According to analyst sources, ASML’s market share has now reached above 60% in value in the first-half of 2006, the latest period reported. This market share development looks sustained, as Q3 net bookings have reached, as you know, 95 systems, bringing our backlog to a record value of EURO 2.1 billion, or 151 systems. In terms of profitability, we see results from our scaling cost structure, in view of the high sales, as well as from our program for reduction of cost of goods. We delivered operating profit of 25% of sales, a record net profit at nearly 18% of sales on a gross margin above our operational target, which is as you know, 40%. In terms of liquidity, we have significantly improved our manufacturing cycle time, which has been our focus for the past two years, allowing a reduction of inventory, even in view of next quarter’s forecasted growth. We used cash to buy back nearly EURO 150 million of shares during the quarter, as our cash generation outlook for the next quarters is strong. In other words, another solid and consistent set of results underlining now our maturing. My second point relates to ASML technology accomplishments. At the lower end of the market, our i-line business is expected to double year to year, 2005 versus 2006, but also 2006 versus 2007. This growth is enabled by our market-leading overlap. On the immersion front, we have shipped 28 immersion systems to date, including shipment of 15 1700i systems in the past two quarters. 1700i being the industry’s only system capable of producing 45-nanometer technology. We are well ahead of competition and the next node is being ramped into production by our customers. The immersion data now confirms appropriate defect density for two to three layer production, which is basically necessary for the memory placement. The appropriate defect density is about under 30-defect wafer. Our current immersion backlog at 15 units and a strong current bookings activity confirm the capacity build-up for production of our [customers]. At this point, we expect Flash manufacturers to ramp first, followed by manufacturers of DRAM and then of logic. Although it is too early to call the numbers of immersion units to be shipped in 2007, we stick by our previous estimate that the new node of this nature involves a typical ramp of 70 tools roughly within 18 months. By mid-2007, ASML will offer the current 1700i for 55-nanometer and for 45-nanometer nodes, and a new TWINSCAN, the 1900i, which will enable volume production at 40-nanometer node, with the industry’s highest wafer throughput. To stay ahead further in the technology race, ASML also delivered in Q3 the industry’s first two full-filed EUV development systems to Albany Nanotech and to IMEC, in preparation for potential ramp or preproduction EUV units for mid-2009. In view of the current favorable market conditions and to reinforce our position as a technology leader in lithography and to leverage our size, ASML will continue to invest further in R&D. We now intend to raise on the expenditure EURO 205 million in the first quarter 2006. Finally, my third point will address the state of the semiconductor industry as, of course, we see it from the lithography point of view. As we have said before, the industry is maturing, as five key trends are contributing to its relative stability. The first trend is the semiconductor market is comprised, as we said multiple numbers of time, of five different market segments, namely DRAM, Flash, IDM, foundry, and R&D. These have different dynamics. The second factor is that no single product application -- TVs or mobiles, PCs, PlayStations, et cetera -- is now large enough to influence the whole industry as it was previously the case when a winning product cycle was overwhelming the total market. The third element of stability is that the management of the supply chain in general, that is, the management of the IC inventory but also of the manufacturing capacity by our different customers, is more cautious than ever, as ROIC, return on invested capital, is a specific measure of results for the whole industry and obviously draws attention to these fundamentals. The fourth element of stability is about semiconductor fab cap-ex, which are now managed by [Tranche] as opposed to by very, very large new fab, as it used to be, whereby the overall building investment can be made, of course, on one hit. But the equipment itself is only brought in by small increments on a need basis. The fifth element of stability of our market is very much lithography driven. Yes, a lithography complexity raises its share value of the total fab equipment cap-ex, as new nodes call for more and more and more layers to be processed with systems with higher ASP. These five factors result on average in shorter and shallower overall industry cycles, which we have been living through for now the past three years or so. This is not a surprise -- we confirmed that this seems to be the case for the years to come as we see it from the different data in front of us. On the negative side of what we see in front of us, there is arguably a bit too much inventory in some selected channels, a bit too much IC inventory in some selected channels. There is definitely over-capacity build-up in Flash. The inventories, the IC inventories are being kept in check. The capacity utilization that we monitor shows some slight reduction in the related segments, but at levels which still enables lithography purchases. The Flash fab capacity build-up, however, does indeed call for a correction at some point. If you insert all those negatives into the different models, and if you add the single-digit IC unit growth assumption in 2007, the industry analysts are calling for a roughly stable lithography market overall in 2007 compared to 2006. On the positive side of this equation -- positive for ASML -- the 65-nanometer production ramp-ups which are now galloping, I would say, or increasing at a higher speed at our customers, their start-up of 45-nanometer with immersion. The R&D cycle, which will start mid-2007 for the development of the 40-nanometer processes, our increasing penetration in the need critical layers of our customers, we talked about i-line, which we are also growing, our KrF business in customers, as we freshly won in the past year or two -- all of this will translate into share gains for ASML and are significant engines of growth. In summary of my three points, in view of our execution track record, our strength in technology leadership, and the lack -- and this is an important message -- the lack of significant market peaks or drops foreseen and analyzed by the different analyst of the industry, ASML is well-positioned to execute on its secular growth target in the short-term but also in the mid-term and the long-term. Now, Peter and I will take your questions.

Before I turn it back over to the operator, I would like to ask that you identify yourselves and your organization when asking a question. In order to allow as many individual questions in the time allotted, we kindly request that you ask just one question, and you will find that we will be stricter than normal on this particular point -- again, in the interest of allowing as many questions as possible. Now, Operator, we are ready for the first question, please.

Thank you, Mr. DeYoung. (Operator Instructions) The first question is from Mr. Nav Sheera, Lehman Brothers. Go ahead please, sir. Nav Sheera - Lehman Brothers: Thank you very much and good afternoon, gentlemen. Eric, I just want to ask actually beyond the 45-nanometer node, am I reading it correctly that at this stage, you can take the 1900i down to 40, but with immersion, you are unlikely to be able to get to 32, unless you have some additions coming from EUV-type technology. Is that the right way of looking at it? Thank you.

No, it is true that the 1900 or any machine with the maximum NA possible, which is going to be about --

Mr. Sheera, could you maybe mute your line while you are listening for the answer? Nav Sheera - Lehman Brothers: Yes.

Thank you.

So on every machine at 1.35 NA, which is maximum possible at this moment, we could reach only about 40-nanometer. However, you can do lower than 40, up to 32 and even beyond if you use double patterning or double illumination, therefore we expect customers as early as 2008 to start introducing these possibilities to go beyond the 40-nanometer as a breach towards EUV. Then, EUV and double patterning will compete against the cheaper player with width. Nav Sheera - Lehman Brothers: Thanks very much, and at this stage, you are the only guy in town with double patterning that works?

Thank you. Yes. Nav Sheera - Lehman Brothers: Thank you very much.

The next question is from Mr. Nicolas Gaudois from Deutsche Bank. Go ahead, please. Nicolas Gaudois - Deutsche Bank: Yes, hi. You seem to be very confident in particular, probably currently confident on low-ends or [non-critical] tools. You just said I think i-line to double again in 2007 versus 2006. Is this coming primarily from markets again, just existing customers? With that, do you actually see more customers following what TSMC, IMFlash, or even [inaudible] done with Vista, which is to effectively move to a single source for lithography?

Nicolas, good question. This growth doubling twice, in fact, in two years is about I would say nearly 50-50 the new customers and traditional customers who are expanding our market share with them, and yes, we go nearer and nearer to a I would say stable 80% to 100% market share at those customers. Nicolas Gaudois - Deutsche Bank: Beyond the ones I have just quoted basically, we think you are nearly there. I mean, do you see similar opportunities at other existing customers?

Certainly. The reason of our success in the low-end i-line is because of this overlay. This overlay is beyond our competition capability as we understand it at this moment. Therefore, if you continue I think as the 65-nanometer growth, in some applications, you definitely need this overlay on the non-critical layer. The solution that we offer seems to be the unique solution in addition to high through-put, and therefore we expect customers who have never bought from us to be also interested at the low-end. Nicolas Gaudois - Deutsche Bank: Great, thank you, and as a quick follow-up, could you --

Nick, we are going to have to more forward, sorry. Nicolas Gaudois - Deutsche Bank: Okay, fair enough.

Thank you.

Mr. Simon Schafer, Goldman Sachs, go ahead please. Simon Schafer - Goldman Sachs: Good afternoon. Eric, you kind of mentioned that maybe at this point it seems as if the memory segment is facing somewhat of an over-capacity situation and therefore obviously your order guidance for the fourth quarter is a little bit downwards. That segment for you is about 75% of orders right now. As we look into the after 2007, when would you expect that to see a recovery, or is that a pause that is likely to be taking longer than a couple of quarters?

This is obviously a good question. First of all, I want to say one more time and I think you have heard it from a lot of different companies and I think in research in particular, be cautious with trying to find trends into bookings. Bookings of course is correlated to billings at some point but the factor that influences booking is also lead time and you could have some times very high quarter bookings, very low quarter booking -- that does not really translate into a capacity need or billings trend, and you should be highly cautious. I also noted since we introduced results today that some people were talking about bookings peaks and et cetera. This is a superficial measure of the cycle. I will try to answer you now into billings activity. In terms of billings that is need from the customers, we did not say there is overheating in memory. We said there is overheating in Flash, which represents about a bit more now than half of the total memory segment. It is a bit more because there is overheating. Normally it should be about the same. In DRAM itself, you see good strong bookings, but at this moment -- billings, sorry, forecast -- at this moment, DRAM capacity build-up is very much a parallel with projected needs by the different analysts. Clearly in 2006 there was a gap, not enough capacity, a bit of a build-up to try to recover 2006 already and a projection of the needs for 2007 which, as we say, is nothing exciting but this growth requires capacity. So DRAM, we feel pretty comfortable that there is not significant overheating. On the Flash, we all know that the different players have or recognized that Flash is a segment of growth for very high growth, which has a very positive characteristic, which is if you can squeeze, if you can shrink, if you can integrate more transistors, you create more applications, which is not the case with DRAM. DRAM was basically limited, or is limited by the numbers of PCs or boxes, et cetera, you wish to put in. Flash has the opportunity for a good long period in front of it to be limited by all means the capability of integrated chips, which is why they are all building capacity and all running extremely fast to the next node. That said, yes, it is true. There is an over-building of that capacity. In view of what the analysts expect the Flash total business to grow in 2007. If you hear some analysts, they will talk about 30% growth of units of Flash compared to this year. Some will talk about 50%, but we estimate that the capacity, which is being built up, is above those numbers and therefore that is why we call it an overheating. On the other hand, that overheating has been assessed by us as being reasonably limited in view of our total portfolio. We have mentioned often that this overheating has been estimated to be about 10% to 15% of our total sales. In that case, we are considering that if there is a major correction in 2007 of this overheating, that means a stop of bookings for a period of time, while that period of time may not be very long. That confirms our position that we do not see major down-turns or drops or whatever in this business because of this overheating, which is well-understood, well-known, and is only in one segment. Simon Schafer - Goldman Sachs: Understood, thank you. Maybe a follow-up on the 1900i. Initial orders have gone out over the last couple for quarters. Could you confirm how many they are, and whether all of those will tie into shipments in 2007? Thank you.

Oh, definitely will. We are not booking for 2008, so yes, everything is going to happen in 2007 at this moment. But I remind you what we said last time. We said the customers will have to go first to approve and qualification of recipe before they for and buy the -- we have had the production units in volume. This is what happened in Q3. What I am very happy to report is that -- in fact, you will read this in multiple newspapers and public statement, et cetera, that even the big guys are now saying that they are at defect density and throughput and et cetera that allows production. So that is now creating the wave of orders negotiation. Today, the number of orders we have for next year is limited, it is about 5-ish, as I mentioned by saying we have a backlog of about 15, so it is 5 for delivery in 2007. But the number of activities, these are for, call it open orders for 1700i and 1900i, and I mentioned in my speech that we had the two, because we have noticed now that both correspond to a market need. This is being discussed and we are encouraged. This is why I mentioned the 70 units in the period of 18 months, as an outlook that we confirm.

The next question is from Herman Betten of Betten Beursmedia. Go ahead, please, sir. Are you there? Herman Betten - Betten Beursmedia: Can you hear me now?

Yes, we can. Herman Betten - Betten Beursmedia: Yes, I was muting myself. Sorry about that. I am afraid I am going to have to continue a little bit longer about the memory and the whole Flash thing. If my numbers are correct, you received orders in the last quarter in the memory segment of more than EURO 900 million, and I was wondering, given in the light of over-capacity in the market, first of all whether it is sustainable and second of all, how you think the overheating is limited to only 10% to 15% of revenue.

Again, to answer your last part of the question, we have about estimated that do not in this nine months or so, and the projected Q4 bookings, we will have a total memory backlog that we said at about 55% to 60% of our sales. In there, we estimate that Flash only business is about half of it and so that is, say, 30% of sales, and on which, a very conservative person will see that half of it is overbooking, in which case, 15%. That is a very rough statement, although we went into much more detail to come up with those numbers, but this is the order of magnitude, I should tell you, very conservative way that this overbooking is not of 10% to 15%, is that not that exciting at this moment. Remember also one key word off our press release, which may not have been seen very well. We said 65 bookings expected in Q4 with upside. At this moment, we are seeing still the level of booking activity in the different sectors -- Foundry, IDM, Flash, and DRAM -- that would sustain higher than 65. We have, however, considered that 65 would be a conservative number, which corresponds to a conservative projection of the numbers of ICs to be built in 2007. Herman Betten - Betten Beursmedia: Would it also be fair to assume the 50-50 spread between Flash and DRAM also for Q3?

Yes, we were trying to, in fact, help you with this but we came up with a complication that -- nearly a third, no, more than a third -- half of our Flash orders could be DRAM also. They are switchable. So at the last moment, it is very, very complicated to know for us where it goes. Herman Betten - Betten Beursmedia: Thanks a lot.

The next question is from Titus Menzies, Jefferies & Company. Titus Menzies - Jefferies & Co.: Good morning, gentlemen. This is Titus Menzies here. A quick question on lead times. How have they evolved in Q3 since Q2? Have they stretched? Are you seeing any double ordering coming through at all?

On the lead time, on one hand, we made very good internal process, and that has been translated, as you can see, from an inventory perspective. The bad news is, and I am going to be very careful with you, because we are booking a lot, we are very near our capacities on a certain numbers of critical manufacturing areas. So we have not fully reflected to the customers the possibility to do what we can technically do, which is less than six months lead time. So now the term on some orders, we are asking customers to put orders with nine months lead time or so, which normally we would be able to do better than that. Do we have double bookings? From our position at this moment, with all the parameters we look at, like utilization rates and the identification of where those machines goes, we would be highly surprised to discover double bookings. Remember also what we said to you last time. In fact, two times in a row, we are now identifying new lines, new fab lines. Normally identifying fab lines is easier for us to size the typical needs. All our orders corresponds to additional material project. So to your point, if you guys expect that something is going bad or is going to happen and everybody will cancel the orders, it would be really if the IC business is collapsing by a major factor. Titus Menzies - Jefferies & Co.: In terms of the i-line and your KrF tools --

Titus, I am afraid we are going to have to move on. Sorry, you had two questions there. Thank you.

The next question is from Mehdi Hosseini, FBR. Go ahead, please, sir. Mehdi Hosseini - FBR: Thank you. If your unit expectation for next year is kind of flattish, how should we think about revenue, and to that extent, to what extent blended ASPs should improve? Thank you.

We usually, and you heard me last year and the year before trying to avoid giving guidance on the next year because again, I would like to give guidance only on facts. It is very difficult sometimes to project a full year. But it is true this time on the press release, you have seen us talk about 2007, which you should translate as a fairly comfortable body language, which I would not do on a regular basis and I would try to tell you about uncertainties of life, et cetera, et cetera. We have given you a guidance. Let me read to you the guidance so that we understand it very, very clearly. We look first at a nominal forecast done by analysts about the number of units of ICs being projected, and you heard single-digit IC growth in 2007. So on these numbers, say between 7%-ish and 9%-ish, those same analysts have simulated a lithography total business, which is between 0% and -3% or something, so very stable. That is the first message we give. If you believe these guys, you should immediately think that with our position in immersion, our position in those new customers, our position in i-line, our position altogether would translate in such a market share increase that you see 2007, in revenue, as a fairly significant growth. But again, this is on the assumption of the analysts that I talked about. If you are the pessimists, as I heard two or three of you trying to tell me that there could be a major overheating that I do not see, so if there is an overheating with a correction, a significant correction which is negative to what the industry analysts say, then we believe that any way with our compensation, due to market share, we do not expect to have a bad year in 2007. In other terms, these are the two sets of guidance we gave you.

Next question.

The next question is from Jay Deahna, JP Morgan. Go ahead, please, sir. Jay Deahna - JP Morgan Chase & Co.: Thank you. Good evening, your time. Eric, given your prepared commentary before the Q&A, especially your comments towards the end, the more stable cycles, the company’s position for technology, et cetera -- would it be fair for one to expect ASML earnings in ’08 to be greater than ’07, especially as immersion kicks in. I think it is pretty clear that ’07 is up over ’06. What are your thoughts on that? I am coming up with seven immersion units shipped in Q3, and the likelihood of 10 in Q4. Is that about right?

This one is easy. We have always said 20 to 25 immersion tool in 2006. We are never lying, Jay. So honestly, maybe 24 or 23. It is a question of execution, but we do have 25 planned and it is in process. Regarding your 2008 point, obviously the type of scaling we are talking about with the and -- it is a fairly positive forecast of the total IC industry for 2008, so if we continue growing our top line, our scaling will significantly increase our gross margin. You have seen that already on this quarter. I do apologize. We have been much higher than our 40% target at 40.8%, so yes, there is a significant upside on profitability in 2008 if we continue our secular growth model and our I would say immersion/leadership in technology in general. Jay Deahna - JP Morgan Chase & Co.: Thank you very much, Eric.

The next question is from Robert Maire, Needham. Robert Maire - Needham & Co.: Yes, if you look at the opportunity of double exposure, obviously the number of scanners, steppers needed and light sources and edge tools increase. Is that factored into your equation? How much more upside do you think is there for the smaller geometries that is created by double patterning? As related to that, does that perhaps push out requirements for immersion? In other words, doing double exposure for -- you seem to indicate that as a bridge to EUV. Does that suggest that there might be more double exposure and less EUV ramp up?

First of all, I do not think I am wrong with this one. I do not think there will be any double patterning in production next year, and double patterning is sometime in 2008. Next year, there is no forecast from our side that anybody would go in significant volume with double patterning. You know the big names who have announced some double patterning work, but this is not production. Two is you have multiple ways of killing the cat, which is getting to your next generation. You can do double patterning dry. You can do -- when I say double patterning, double patterning or double exposure. Some people, you know, it is a different ways of doing it, but it is okay -- using twice only for the finishing. Double patterning dry, double patterning immersion, and then you have EUV as options. Then you have some people playing with different ways of designing -- more layers for vertical structures. You are talking about the spacer technology, which allows you for it to have less critical lithography tools but much more lithography tools, et cetera, et cetera. For each of those companies that are playing with this, you would have potentially one saying my solution is better than another, et cetera, et cetera. What we are sure is that in the year 2010, or 2011 if you are conservative, EUV is the cheapest way. Robert Maire - Needham & Co.: Okay, so your assumptions going forward are, assuming the industry goes EUV and is not as extensive a user of double patterning?

No, I said that between now -- that is, between 2008 and 2010, you are going to see people in double patterning -- good news, by the way, for all of us. During 2010, 2009, end of 2009, beginning of 2010, you probably will see Flash people going full steam with EUV, because EUV is much cheaper for those guys who have limited numbers of masks, long or very high volume, high demand on throughput versus the logic people who may prefer double patterning. In other terms, 2009-10 is a transition where you would have X% doing one thing and Y% doing the other. This is great news for us because there is no way we would be able to have the capacity to take 100% of the business in EUV on the first year, so this staged-in approach is good. That plays into the secular growth model that we have. If you put in your model in 2008, some double patterning, 2009, some double patterning and the start of EUV, and 2010, a lot of that, put the price, you will see it looks good.

Thanks, Robert. Robert Maire - Needham & Co.: Thank you.

The next question is from Thomas Brenier, Société Générale. Go ahead, please. Thomas Brenier - Société Générale: Good afternoon. I would like to know if the EURO 105 million R&D for Q4 is going to be the run-rate for 2007. Also, if we should consider higher guidance than the usual EURO 75 million to EURO 80 million for services and options, as it has been over EURO 100 million for two quarters in a row.

Peter will handle the options questions. Regarding the R&D, the decision we have taken is to put as much R&D as our P&L can afford so that we can put in our development and introduce products earlier and create, therefore, a major differentiator in this business. So we will put the money that we can afford. At this moment, we think that there is, I would say a good vision on 2007, so we therefore believe that the number will be higher than EURO 105 million per quarter.

On the service question, the service and options, yes, what we have guided is about EURO 75 million. Over the last couple of quarters, you have seen that has trended above that number. The fixed part of that sales, which is basically revenue from service contract, which has always been about EURO 50 million, is trending up. It is about 10% up. The same, as I would say, through for the option sales. If you want to adjust your models, then I would suggest that going from 75 to let’s say between 80 and 85 per quarter is probably, going forward, a bit safer number.

The next question is from Mr. Amin, Citigroup. Go ahead, please. Paraag Amin - Citigroup: Yes, hi, guys. Quick question -- as I believe it, you are going to be ramping capacity by around 10% a quarter next year. As your current potential maximum new tools a quarter is around 75-ish, what gives you any sort of confidence in increased shipments next year and beyond that this capacity will be needed, given that current you are shipping sort of around the 60 new tools per quarter? How soon will you need this new capacity, do you think?

I am hesitant to say, because I know some of you will put in the newspaper immediately my key long-term forecast. No, I think we have published often our target to be EURO 5 billion of revenue in the foreseeable future. This is not a forecast. This is a simulation in the number that says if before go and do the double patterning and a bit of EUV and grow by, say 7% or so per year, we should get there soon. Soon was by 2010. So yes, we absolutely need that capacity and yes, we are a bit ahead of the roadmap. Paraag Amin - Citigroup: Thank you.

The next question is from Marcel van de Hoef, Bloomberg. Marcel van de Hoef - Bloomberg: Yes, double-checking something, actually. Let’s say the market is concerned about a downturn, would you say that risk is mostly in Flash and that the maximum impact on revenue in 2007 would be 10% to 15%, or is that completely incorrect?

The total year is 10% to 15%, so if you have a correction on one quarter, you could have much more impact than 10% to 15%, but remember we are now talking about overall quarters, about a EURO 1 billion or so, EURO 1.1 billion, so these corrections could still get us into areas of 90 to 500 million a quarter, which is why we are not getting too worried.

The next question is from Didier Scemama, ABN AMRO. Go ahead, please. Didier Scemama - ABN AMRO: Thanks for taking my question. My question is as follows: basically, we are starting to see companies getting out of the NAND Flash market, such as [Kimonda], admittedly small players. A lot of companies have got in NAND Flash attracted by the volume growth over the next few years, and they have really been beaten down by some of your customers. So my question would be, in the event that the market in NAND Flash would actually reconsolidate around maybe three players, two of them begin major DRAM vendors, what would be the impact on your business going forward, do you think?

Today, I guess we are in every Flash manufacturers. I think it is now not a secret that we are working with Toshiba. Obviously we are working with Samsung. We are working with IM Flash. We are working with Hynix, et cetera, et cetera. It would be completely irrelevant for us if there is consolidation or not.

The next question is from Mr. Janardan Menon, Dresdner. Go ahead, please, sir. Janardan Menon - Dresdner Kleinwort Wasserstein: Hi, thanks. I was just wondering about the, going back to the comment that if the industry grows at single-digits in 2007, it should translate into flattish lithography demand. You said that is the view from analysts. I was just wondering what your own view on that number is, because just to put that -- the reason I am asking is in 2005, the industry grew at about mid-single-digit, but your shipments fell by about 30% year on year in 2005. So I was just wondering how to reconcile that fall with a potential single-digit drive next year.

Yes, because since we are always talking about sales value, and because units is not the right number to look at for us. We look at units of semiconductors and that translates into value. Yes, we did simulate to check what the analysts are saying, and we have a simulation to ourselves, and we put the single-digit forecast for 2007. The result is not very far from the analysts. I will not be very, very specific, but it is not very far. If we tweak a bit the model, it goes up or down depending on how fast some nodes happen. Remember, this is why in my speech at the beginning I said we are very hopeful that 65-nanometer is ramping into even more volume. In fact, you should try to translate that sentence in ASML terms. That means “Hooray! We are selling a lot of 1400” and it is now a 1400 business compared to a -- that is an ArF business -- at EURO 20 million compared to a KrF business at EURO 10 million. So these things make a big difference in your simulation too, but I repeat -- we are fairly comfortable with the mechanics of those guys. Peter.

I would like to just add one thing. You are comparing, you bringing 2005 into play. In 2005, you are right. The numbers were indeed down, but our sales were up and sales were up driven by market share gains and by ASP growth. That sounds a bit familiar, doesn’t it? Janardan Menon - Dresdner Kleinwort Wasserstein: So you are talking revenue when you are saying flat, rather than --

In 2005, revenue was up and you talked about units were down, but -- Janardan Menon - Dresdner Kleinwort Wasserstein: Sure, sure, absolutely. Thank you very much.

The next question is from Mark Fitzgerald, Banc of America. Go ahead, please. Mark Fitzgerald - Banc of America Securities: Two-part question. Can you give us some idea of ASML’s position as the microprocessor industry goes to 45-nanometer? The second part, are there any -- what was your turns business in the current quarter just reported and what would the end of December quarter?

Could you repeat your last question? Mark Fitzgerald - Banc of America Securities: Turns business in the September quarter, were there any turns?

On the issue of microprocessor, I am cautious because of course we are talking about two customers. What can I tell you which is okay? Mark Fitzgerald - Banc of America Securities: Do you expect to gain any layers in terms of your penetration at 45-nanometer?

The discussion is in progress, I guess, and -- let me say it this way. If our product is superior to competition, which in this case is Nikon, there should be no reason why our current market progression, market share progression does not continue, if I may say it this way. I think it is also public to say these decisions are not yet taken by the big guy, and the sure thing I can tell you is you should ask them which machine they used to show a double patterning 45-nanometer example. That could tell you why we have some hope. Regarding your issue of turns, no minimum turns in Q3 and Q4, but maximum pressure to put orders, but we could not basically do it.

Are you ready to take the next question, sir?

Yes, please.

Thank you. Satya Kumar, Credit Suisse, go ahead, please. Satya Kumar - Credit Suisse: Hi, it is actually Satya Kumar. A good question on NAND Flash. We think there is a lot of capacity on memory that is still running on 200 millimeters, especially on NAND. How long do you think [ship] companies can push NAND on 200 millimeters, specifically what level of activity are you seeing with immersion lithography on 200 millimeter? I have a quick follow-up.

Immersion is going to be only on 300. Maybe a bit of R&D is at this moment made on 200 and we help, okay? So clearly we help these customers who have done that, but production at this moment, I do not know of any would go in volume production with 200. It would be 300. The rest of the 200 millimeter will be continuing on the old technology, Flash, and as you know, some of those things are being moved into China. Satya Kumar - Credit Suisse: Okay, and as a follow-up, you commented about Flash is weak, and given that that will be the first segment to ramp immersion in volume production next year on 300, am I correct in thinking that over half the immersion systems that you are shipping this year are perhaps for R&D for chip companies? Is there a risk that if Flash capacity initials come down, that the number of immersion systems that you ship next year may not grow as rapidly as the 70-unit number that you were talking about?

I think again, I would say no chance to have a bad performance here. If ever there is a correction, as people would expect if the overheating continues, that correction happens after you go in battle, so the battle has not started, capacity has not been set up. Most of the tools we have shipped, and we will ship the 25 tools, will be used will be half in production. There is another batch of X immersion tool which will have to be put into production before the battle starts. Then the battle starts, and then somebody says either I go out of business or I stop buying, and this is when I am calling for the potential famous correction which we expect not to be too large anyway.

But there is no doubt in our minds, let’s be very -- the 40-nanometer tool we are going to introduce next year, everything we can make we will actually sell. There is so much demand for that additional strength, there is no doubt in our mind that whatever the overcapacity would be, that that would put a lid on capability to actually sell those systems. There is no doubt in our minds. We will sell those systems.

By the way, to be clear, some of our tools, immersion tools, today in production at multiple customers at 65-nanometer in immersion, so you can imagine that if immersion defect density gets to the right level, immersion will increase the performance of the chip at 65, so people will use those babies to differentiate themselves, bring more performance onto each chip. So we are not very, very worried about immersion to be only limited to 45-nano or 55-nano.

The next question is from Alan Fournier, Pennant Capital. Go ahead, please. Alan Fournier - Pennant Capital: Thank you for taking my question. I wanted to get an update on your thoughts on share repurchase. It looks as if you shrunk the share count about 3% in the quarter, and the cash performance is very good, so I would hope while analysts and investors seem to be focused on the short-term, you would take advantage of the stock price here and continue to repurchase stock.

Today. Alan Fournier - Pennant Capital: Sorry?

Yes, that was a joke. Today, I think we should jump.

I think on that question, I think we can just basically reiterate what we have said before. We have this EURO 1 billion of our net cash target, which we started the year off with, and the cash that we are generating, we put into share buy-back programs. Now, absent any major M&A deals, which are currently not on our radar screen, we will continue what we are doing. This is not the moment in time to announce the next share buyback, because there are, of course, disclosure requirements, so we will do that at the right time and basically at the right place, but clearly the I would say buyback strategy of the company has not changed. With the, like we said also in the introductory call, looking forward to 2007 quarters being strong in terms of generation of cash, it is not difficult to imagine what the execution of that strategy will be for our company. Alan Fournier - Pennant Capital: Great, thank you very much.

The next question is from Mark Bachman, Pacific Crest Securities. Go ahead, please, sir. Mark Bachman - Pacific Crest Securities: Thank you, and good evening. This is Mark Bachman at Pacific Crest. Two questions for me here. First, Eric, you stated your 20 to 25 immersion tool estimate for 2006 still stands, but you also mentioned that you are building an additional 10 tools here for early production in 2007. Is there possible upside potential to the 20 to 25, with additional shipments in Q4? Then, just a follow-on to that, can you kind of discuss a technology mix of tool sales in Q3 and how that mix is going to be changing in Q4? Maybe specifically call out your mix of i-line tools. Thank you.

Excuse me, the last part of the question is? (Multiple Speakers)

First of all, no upside in Q4 for immersion. We just do not have the capacity to do more at this moment, as it takes capacity for lens, et cetera, so we could have shipped more, yes, there is demand for that, but we will not have an upside. Regarding the overall mix of the company, you have seen that i-line represent only 10%, 9%-ish of our backlog. We expect to, as I said, to double that business, but as we said sometime here during the call, that we also expect to grow the total business, so I wonder where i-line will hit. At this moment, you should probably think that i-line will not go to 20% of our sales but probably will go around 15%.

The next question is from Stuart Adrian, Morgan Stanley. Go ahead, please. Stuart Adrian - Morgan Stanley Dean Witter: Hopefully a relatively straightforward clarification. Just looking at the wording for the 2007 guidance, you basically say let’s -- demand for ASML in ’07 expected to be about the ’06 level. Now, does that basically mean that the 265 units that you think you are going to ship in ’06 is probably just taken off your fourth quarter guidance? Do you think you are going to ship 265 units in ’07, which basically implies, one assumes ASPs go up and therefore you are going to see some pretty decent revenue growth in ’07? Or basically are you saying that ’07 revenues are going to be flat with ’06?

No, sorry about the confusing sentence, and I think I tried to say at the beginning of the call, you have to put yourself into assumptions. We do not call it a forecast. We call it assumptions. If you take the assumptions of the whole litho business is stable, as the analysts says, then there will be significant growth. If you are a naysayer and you feel that the analysts do not understand that Flash is really going down the tube but you are trying to edge a correction, you should put us as about flat in revenue. Stuart Adrian - Morgan Stanley Dean Witter: Okay, so if you think litho market is flat in ’07 versus ’06, you can still take market share in that environment, so therefore your revenues will grow in ’07 relative to the ’06 level?

Absolutely, and the fact that you forced me to say these things is again a vote of confidence. I usually would have, and remember I have often said we do not know, we do not know, we do not know. But the current things we know, the long-term backlog we have, the level of discussion we have with the customers for the project allows me or forces me to tell you that we are in the range of success, of good success for 2007. Stuart Adrian - Morgan Stanley Dean Witter: Okay, thanks.

The next question is from Antoine Badel, Credit Suisse. Go ahead, please. Antoine Badel - Credit Suisse: Yes, good afternoon. I want to come back to your order guidance, please. You have said that you are already seeing upside to 65 orders for Q4, and you cautioned against extrapolating that decline into a trend, so my question is how big is the swing factor for Q4, and what are the possible scenarios beyond that? Are you saying you expect orders to stabilize in the early part of next year, or to rebound?

No, this is problem of those bookings. You never know. We can again surprise all of you and say 65 plus or a significant amount, we can just be at 65, but that does not change the fact that to answer Adrian’s question, that there is significant engines of growth for 2007 in billings, and that at this moment, obviously yes, we see them for Q1 and Q2, because this is within our lead time, and there is a bit more certainty in Q3 and Q4, which is why then you have to simulate stuff. The bookings trend is going to be a dangerous thing for you to try to make value of. Now we all know this number is going to psychologically impact our evaluation of the picture, but it does not really change the picture at this moment. Whether we have 65 units, which is still a very strong booking quarter, or whether we have 85 or more, this will not change, again, significantly the picture of the first two quarters, and we just solidified Q3, Q4, but then that means people would have ordered ahead of time. Antoine Badel - Credit Suisse: When you say 85, is that a realistic upside scenario for Q4, or is it just theoretical?

No, no, I just meant mathematical numbers. Our guidance is 65 and upside, and we have no idea what the upside number could be. Antoine Badel - Credit Suisse:

Operator, I think we have one more question.

Thank you, sir. Jan Willem Berghuis, Kempen and Company, go ahead, please. Jan Willem Berghuis - Kempen & Co.: I will make it a short one. Maybe you can comment a little bit on where you spend the additional R&D, or in general where you are spending R&D, whether it is the lithography market or are you thinking of some additional areas in which you are investing in at the moment? I hope it is not too confidential.

To be sure, everything we are talking about in this EURO 105 million is IC. Jan Willem Berghuis - Kempen & Co.: Okay, and is there a big portion going into EUV?

Not yet. There is a portion but it is not -- at that moment, we are spending much more time on other things than EUV. Jan Willem Berghuis - Kempen & Co.: Okay, thank you.

Thanks, Operator, I think that concludes our third quarter results conference call. I would like to thank everybody for attending.

Thank you very much.