Snapshot - ENXTAM: ASM. Considerations: Total accruals reached their highest level in at least the

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1 ENXTAM: ASM - NEGATIVE ASM Internatinal N.V. 14 DECE MB E R Industry Market Cap Enterprise Value Semicnductr Cnsideratins: Ttal accruals reached their highest level in at least the Equipment last five years, as cash-flw trends diverged frm reprted net incme billin Inventry levels have spiked, which is in cntrast with revenue-grwth 1.21 billin trends. Inventry als appears ut f line relative t histrical trends and in peer cmparisns. Receivables als grew significantly relative t revenue and peer cmparisns. Trends in a number f ther accunts, including a drawdwn in backlg and relatively lw cash taxes paid, increase ur earnings quality cncerns. Price EUR20.38 (12/13/11) P-E Rati 5.97 EV/ 0.7 Debt/EBITDA 0.4 Cmpany Descriptin ASM Internatinal N.V. (ASMI) designs, manufactures, and sells equipment and services fr the prductin f semicnductr devices, r integrated circuits. The cmpany engages in the wafer prcessing and assembly and packaging market segments. The Frnt-End segment perfrms prcesses n 200 millimeters r 300 millimeters diameter slices f silicn wafers. The Back-End segment, which cvers assembly and packaging, assembles and cnnects ne r mre dies in a single package, t frm a semicnductr device that will perfrm calculatins, stre data, r interface with its envirnment. Decline in Cash Flws Drives Build in Accruals During Q3 2011, quarterly net incme rse 93.7% YOY t millin (up 22.1% excluding a 51.3 millin gain n the purchase f Surface Munt Technlgy during the third quarter), while cash frm peratins fell 42.5% YOY t 54.8 millin and free cash flw fell 46.7% YOY t 33.5 millin. On a TTM basis, net incme rse 92.8% YOY t millin (up 65.1% YOY excluding the gain n purchase), while cash frm peratins rse 14.1% YOY t millin and free cash flw fell 5.5% YOY t millin. As a result f the divergence between reprted net incme and cash-flw trends, ttal accruals rse t 15.5% f average ttal assets, cmpared t just 4.1% in the year-ag perid. Ttal accruals are at the highest level in at least the last five years at 15.5%, cmpared t the next highest level f 9.3% set a quarter earlier and a five-year average f -1.4%. (See table, Cash-Flw Trends and Accruals Five-Quarter Average, next page) N. Kierland Blvd., Suite S-260 Scttsdale, Arizna USA Tel Fax prducts@gradientanalytics.cm Cpyright 2011 Gradient Analytics Inc.

2 Table 1. Cash-Flw Trends and Accruals Five-Quarter Average 3M net incme M CFOA M FCF TTM net incme TTM CFOA TTM FCF Accruals/ATA 15.5% 9.3% 7.1% 8.0% 4.1% 3M net incme 93.7% 3.0% 184.7% 934.5% 3,142% 3M CFOA -42.5% -42.9% 225.9% 132.9% 269.2% 3M FCF -46.7% -74.1% 308.9% 48.2% 163.9% TTM net incme 92.8% 150.4% -1,837.0% % % TTM CFOA 14.1% 94.4% 285.7% 314.8% 265.9% TTM FCF -5.5% 55.4% 235.9% 239.6% 228.5% Accruals/ATA 1, ,725 2,368 2,112 Table 2. Cash-Flw Trends and Accruals Five-Year Average 12/31/10 12/31/09 12/31/08 12/31/07 12/31/06 TTM net incme TTM CFOA TTM FCF Accruals/ATA 8.0% -15.7% -6.0% 6.7% -8.7% TTM net incme % % -51.2% 238.8% % TTM CFOA 314.8% -54.4% 30.1% -26.6% 183.5% TTM FCF 239.6% -55.7% 78.5% -44.2% 4,622.4% Accruals/ATA 2, ,279 1, Spike in Inventry Fr the quarter ended 09/30/11, inventry grew 88.9% YOY t millin, cmpared t quarterly revenue grwth f 7.7% YOY t millin. Inventry t three-mnth revenue increased by 4,659 bps YOY t 108.4%. This was well abve the five-year average f 90.0% and near the tp f the five-year range f 61.8% 111.1%. Three-mnth (TTM) days sales in inventry rse 48.2% (11.8%) YOY t 151 (122) days. This cmpared t the five-year average f 132 (135) days. Inventry t frward three-mnth revenue increased frm 61.3% a year Page 2 f 7

3 ag t 120.9% in the mst recent perid. Inventry t three-mnth revenue grew faster than that f any f the 10 peers listed in Table 4, belw, and increased 3,275 basis pints faster than the peer average f 1,385. Additinally, inventry t three-mnth revenue was the secnd highest f the peer grup n an abslute basis. Althugh inventry reserve is nly prvided n an annual basis, the mst recent disclsure indicates that as f 12/31/10 the allwance declined 12% YOY t 41.3 millin despite inventry increasing 71.3% YOY ver the same perid. Table 3. Five-Quarter Inventry Trends Inventry Inventry t 3M revenue 108.4% 85.9% 87.7% 73.3% 61.8% Inventry t TTM revenue 24.9% 25.3% 26.4% 21.1% 20.1% DSI M DSI Inventry t fwd. revenue 120.9% 108.3% 80.0% 59.7% 61.3% Inventry 88.9% 99.5% 113.7% 71.3% 42.6% Inventry t 3M revenue 4,659 1, ,216 Inventry t TTM revenue DSI 11.8% -2.6% -15.4% -28.9% -35.2% 3M DSI 48.2% 18.4% -7.8% -3.1% -17.2% Inventry t fwd. revenue 5,961 4,981 2, ,366 Table 4. Peer Inventry Trends Ticker Inv./3M Inv./3M Change YOY Inv./TTM Inv./TTM Change YOY DSI DSI Change YOY ENXTAM: ASM 108.4% 4, % % TSE: % 1, % % ASML 99.8% -2, % -1, % TSE: % % % TSE: % 3, % % TSE: % % % AMAT 78.0% 2, % % NVLS 70.7% 1, % % KLIC 40.5% 1, % % Average 84.0% 1, % % ASM deviatin frm average 2,436 3, % 457 Page 3 f 7

4 Grwth in Receivables Fr the quarter ended 09/30/11, accunts receivable increased 34.8% YOY t millin, cmpared t revenue grwth f 7.7% YOY. Receivables t three-mnth revenue grew 1,731 bps YOY t 86.1%. Despite YOY grwth, the rati f receivables t three-mnth revenue is still in line with the five-year average f 86.8%. Three-mnth (TTM) DSO rse 27.4% (1.1%) YOY t 81 (68) days. Receivables t three-mnth revenue grew faster at ASM (1,731 basis pints) than at all but tw f 10 peers and increased 1,228 basis pints faster than the peer average f 502 basis pints. Additinally, nly three f the 10 peers have a higher AR-t-three-mnth revenue rati n an abslute basis. As f 12/31/10, 21.5% f ttal receivables were cnsidered past due (cmpared t 23.1% a year earlier), as ttal past-due receivables increased 51.8% YOY t 58.2 millin. ASM s allwance fr dubtful accunts, which is nly disclsed n an annual basis, grew 3.7% YOY t 9.3 millin (r 3.3% f ttal receivables) during FY2010, while ttal AR (past-due AR) grew 63.7% (51.8%). As a result, we believe the firm may have been underaccrued fr bad debts at 12/31/10. Table 5. Five-Quarter Receivable Trends Accunts receivables AR t 3M revenue 86.1% 73.3% 77.3% 77.0% 68.8% AR t TTM revenue 19.8% 21.6% 23.3% 22.2% 22.4% DSO M DSO AR less advances Accunts receivables 34.8% 39.5% 80.7% 63.7% 66.4% AR t 3M revenue 1, ,134 AR t TTM revenue DSO 1.1% -6.5% -13.9% -26.8% 35.1% 3M DSO 27.4% 0.2% -12.5% -5.5% -5.4% AR less advances 40.5% 50.6% 80.3% 62.7% 55.7% Page 4 f 7

5 Table 6. Peer Receivable Trends Ticker AR/3M AR/3M Change YOY AR/TTM AR/TTM Change YOY DSO DSO Change YOY ENXTAM: ASM 86.1% 1, % % TSE: % -2, % % ASML 63.6% -1, % -1, % TSE: % 1, % % TSE: % % % TSE: % 2, % % AMAT 70.2% % % NVLS 72.6% 1, % % KLIC 76.9% % % Average 84.5% % % ASM deviatin frm average 168 1, % -1,041 Additinal Earnings Quality Cncerns Backlg fell 32.5% YOY t millin as new rders fell 28.3% YOY t millin and recgnized revenue rse 7.7% YOY t millin. As a result, backlg t three-mnth revenue fell 6,274 basis pints YOY t 105.4%. This cmpared t five-year range f 73.7% t 168.2% (average f 102.7%). Three-mnth capital expenditures fell 34.1% YOY after increasing 1,520.5% a year earlier. As a result, the rati f three-mnth capital expenditures t depreciatin fell frm 423.4% a year ag, but it is still at 224.6%. On a TTM basis, capital expenditures increased 52.0% YOY t millin after increasing 511.9% a year ag. As a result, TTM capital expenditures t depreciatin increased frm 248.5% a year ag t 284.5%. Over time, we wuld expect capital expenditures t depreciatin t average ut t rughly 100%. Cash taxes have significantly lagged the prvisin fr taxes fr fur ut f the last five quarters. On a three-mnth (TTM) basis, cash taxes equaled 31.3% (48.5%) f the prvisin fr taxes reprted n the incme statement. (See table, Miscellaneus Earnings Quality Trends, next page) Page 5 f 7

6 Table 7. Miscellaneus Earnings Quality Trends New rders Backlg Backlg t 3M revenue 105.4% 92.0% 136.0% 141.9% 168.2% 3M CapEx TTM CapEx M CapEx t depreciatin 224.6% 274.4% 200.1% 477.8% 423.4% TTM CapEx t depreciatin 284.5% 330.6% 330.0% 336.2% 248.5% 3M cash taxes t prvisin 31.3% 108.0% -2.3% 27.7% -0.7% TTM cash taxes t prvisin 48.5% 40.8% 11.3% 22.7% 42.9% New rders -28.3% -46.1% 125.5% 132.9% 113.4% Backlg -32.5% -21.6% 76.5% 154.1% 300.5% Backlg t 3M revenue -6,274-9,202-1,606 4,448 8,681 Backlg t TTM revenue 4,232 4,054 1, ,182 3M CapEx -34.1% 36.4% 92.8% 388.1% 1,520.5% TTM CapEx 52.0% 197.4% 411.5% % 511.9% 3M CapEx t depreciatin -19,882 1,849 4,145 35,303 39,766 TTM CapEx t depreciatin 3,603 19,099 25,651 29,651 21,495 3M cash taxes t prvisin 3,204 8,905-5,709-17,056-2,556 TTM cash taxes t prvisin 567-2,143-10,281-53, ,025 Page 6 f 7

7 Purpse: Gradient Internatinal s leverage prprietary signals that ur analysts use t determine Earnings Quality and r Equity Incentive metrics f interest. Fllwing a brief review f the earnings quality signals generated by ur prprietary screens leveraging a variety f prprietary and ther publicly available data, ratings f Psitive, Neutral r Negative are assigned t summarize ur perspective f ntewrthy Earnings Quality and Equity Incentive metrics. Disclaimer: Gradient Internatinal is the prperty f Sabrient Hldings, LLC, d/b/a Gradient Analytics ( GRADIENT ). Unauthrized reprductin r redistributin f this dcument in full r in part is strictly prhibited by law and a vilatin f the Cpyright Act. Infrmatin cntained herein may nt be reprduced in whle r in part, including phtcpying f printed cpy r frwarding, withut the express written cnsent f GRADIENT. Yu must cntact Gradient Analytics, Inc., fr authrizatin t reprint r reprduce any part f this dcument. The infrmatin, pinins and analysis cntained herein are prvided AS IS based n surces believed t be reliable, but n warranty r representatin f any kind, expressed r implied, is made as t their accuracy, cmpleteness, crrectness, r therwise. This reprt is fr infrmatin purpses nly and shuld nt be used as the basis fr any investment decisin. GRADIENT disclaims liability fr damages f any srt (including lst prfits) arising ut f the use f r inability t use this reprt. Other than annual fees frm subscribers t its Earnings Quality Analytics/Equity Incentive Analytics/Gradient Internatinal services, Gradient des nt receive, directly r indirectly, any cnsideratin fr publishing this reprt. Gradient has nt received any cnsideratin, either directly r indirectly, frm the issuer analyzed herein. GRADIENT is nt an investment advisr and this reprt is nt investment advice. This infrmatin is neither a slicitatin t buy nr an ffer t sell securities. This infrmatin is neither a slicitatin t buy nr an ffer t sell securities. Infrmatin cntained herein reflects ur judgment at the time f riginal publicatin, may include minr elements f prir screening results published t clients, and is subject t change withut ntice. Gradient des nt have a lng r shrt psitin in securities mentined. Safe Harbr Statement: Statements cntained in this dcument, including thse pertaining t estimates and related plans ther than statements f histrical fact, are frward-lking statements subject t a number f uncertainties that culd cause actual results t differ materially frm statements made. { } Cpyright Sabrient Hldings, LLC 2011 Page 7 f 7