US GAAP reconciliation

Differences between International Financial Reporting Standards and U.S. GAAP

Metso’s consolidated financial statements are prepared in accordance with IFRS, which differ in certain respects from the accounting principles generally accepted in the United States (“U.S. GAAP”). The principal differences between IFRS and U.S. GAAP are presented and described below, together with explanations of the adjustments that affect consolidated net income and total shareholders’ equity as of and for the periods indicated. As detailed further below, the significant business combination of Valmet and Rauma, which took place in 1999, is accounted for as the pooling of interests under IFRS, but is accounted for using the purchase method under U.S. GAAP. This difference impacts the valuation of a number of financial statement accounts at the date of the combination. For presentation purposes in the following reconciliation, the “Business combination, net” item solely includes the impact of differences that arose using the purchase method under U.S. GAAP, except for the employee benefit liability related to the transaction, which is presented under g) Employee benefit plans. The other items reflect the post-combination differences between IFRS and U.S. GAAP.

Please note, that Metso applyed for delisting of Metso's American Depositary Shares from the New York Stock Exchange on July 26, 2007 and terminate Metso’s reporting obligations under the Exchange Act. However, Metso maintains its American Depositary Receipt facility, and following the delisting Metso’s ADSs are traded in the over-the-counter markets in the United States. Metso’s ordinary shares continues to trade on the Helsinki Stock Exchange. Metso continue compliance with the rules of the Helsinki Stock Exchange and other Finnish regulations.

a) Business combination, net
b) Svedala: purchase accounting, net
c) Aker Kvaerner Pulping and Power: purchase price, net
d) Reversal of liabilities recognized in connection with a business combination
e) Capitalized development costs
f) Fair value of financial derivatives
g) Employee benefit plans
h) Early retirement cost
i) Restructuring costs
j) Net investment hedge
k) Fees on bond exchange
l) Goodwill impairment
m) Amortization of goodwill
o) Translation difference
p) Discontinued operations
q) Miscellaneous items
r) Stock compensation

Last updated May 23, 2009