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25 Provisions for risks and charges

Provisions for risks and charges of €837 million (€757 million at 31 December 2012) are analysed in the table below:

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(€ million)

 

 

 

 

Utilisations

 

 

31.12.2012

Opening balance

Changes in estimates

Pro­visions

Increases due to passing of time

against charges

for excess

Other changes

31.12.2012

Provision for site dismantlement and restoration

306

122

 

11

 

 

 

439

Provision for environmental risk and charges

63

 

5

 

(5)

 

71

134

Provision for litigation

77

 

10

 

 

(11)

 

76

Other provisions

81

 

50

 

(7)

 

(16)

108

 

527

122

65

11

(12)

(11)

55

757

  Download XLS (23 kB)

(€ million)

 

 

 

 

Utilisations

 

 

31.12.2013

Opening balance

Changes in estimates

Pro­visions

Increases due to passing of time

against charges

for excess

Other changes

31.12.2013

Provision for site dismantlement and restoration

439

36

 

12

(2)

 

 

485

Provision for environmental risk and charges

134

8

6

1

(4)

 

 

145

Provision for litigation

76

 

12

 

(1)

(24)

 

63

Other provisions

108

 

41

 

(9)

 

4

144

 

757

44

59

13

(16)

(24)

4

837

Other changes in the estimate (-€44 million) relate essentially to: (i) site dismantling and restoration expenses (+€62 million) relating to natural gas transportation infrastructure; and (ii) revised estimates of site dismantling and restoration costs for natural gas storage (-€28 million) due to higher than expected discount rates.

“Other provisions” (€41 million) relate mainly to the estimated expenses for termination benefits (€26 million) recognised as part of the employee redundancy programme pursuant to Law 223/1991 and subsequent provisions. The one-year programme involves a total of around 300 Group employees.

The provision for site dismantling and restoration (€485 million) was recognised primarily due to expenses which are expected to be incurred for the removal of facilities and the restoration of sites in the natural gas storage (€402 million) and transportation (€77 million) business segments.

The provision for environmental risk and charges (€145 million) mainly included costs for environmental soil reclamation, pursuant to Law 471/1999, as subsequently amended, primarily for the disposal of solid waste, in relation to the distribution business.

The provision for litigation (€63 million) included costs which the Company has estimated it will incur for existing lawsuits.

Other provisions (€144 million) relate essentially to: (i) expenses that may arise from the commercial balancing activity and referring to counterparty risks relating to the entry of new operators into the natural gas market (€40 million); (ii) expenses recognised to offset the item “Change in inventories”, arising from the difference between the estimated quantities of Unaccounted-For Gas (UFG), which the Company expects to calculate definitively in the four years from 2014 to 2017, and the forecast quantities that will be granted in kind by users as required by Resolution 514/2013/R/gas (€40 million); and (iii) the estimated expenses relating to termination benefits (€26 million).

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