Metso records a EUR 57 million one-time deferred tax asset in the second quarter of 2006
June 14, 2006
Stock exchange release
Metso’s operating tax loss carry-forwards relating to the U.S. operations amounted to approximately EUR 154 million as of December 31, 2005. Furthermore, Metso had approximately EUR 150 million of deductible temporary timing differences and unused tax credits attributable to its U.S. subsidiaries. Based on Metso’s U.S. corporate income tax rate of 39 percent, the unrecorded deferred tax assets relating to these items amounted to EUR 119 million at December 31, 2005. The deferred tax assets had remained unrecorded due to the losses of Metso’s U.S. operations in previous years and the uncertainty relating to the utilization of such losses.
Based on the applicable accounting guidance, Metso has decided to record a one-time deferred tax asset of EUR 57 million through income statement in the second quarter of 2006. The decision is based on the fact that Metso’s U.S. operations turned clearly profitable in 2005, and the latest management forecast indicate that the profit before tax in Metso’s U.S. operations will continue to be clearly positive also in 2006 and 2007.
Excluding this one-time deferred tax asset, Metso Corporation’s tax rate in 2006 is estimated to be about 24 percent. After recording this one-time deferred tax asset, the unrecorded deferred tax assets related to Metso’s U.S. operations are estimated to amount to approximately EUR 30 million. These deferred tax assets will be recognized when it is probable that there will be sufficient future taxable income against which they can be utilized.
Metso is a global engineering and technology corporation with 2005 net sales of approximately EUR 4.2 billion. Its 22 000 employees in more than 50 countries serve customers in the pulp and paper industry, rock and minerals processing, the energy industry and selected other industries.
For further information, please contact:
Reijo Kostiainen, Senior Vice President, Financial Control, Metso Corporation,
tel. +358 204 84 3127
Johanna Sintonen, Vice President, Investor Relations, Metso Corporation,
tel. +358 20 484 3253
- Contact Information
- Reijo Kostiainen
- Senior Vice President
- Metso Corporation
- Contact via E-mail
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