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 |
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|
(€ 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).