18. Provisions for risks and charges
Provisions for risks and charges, which amount to €707 million (€776 million at 31 December 2015) are analysed in the table below:
| Download XLS (17 kB) |
|
31.12.2015 |
||||||||
|
Opening balance |
Provisions (*) |
Increases due to passing of time |
Utilisations |
Other changes |
Final balance |
|||
(€ million) |
against charges |
for excess (*) |
|||||||
|
|||||||||
Provision for site dismantling and restoration |
650 |
|
11 |
(8) |
|
(138) |
515 |
||
Provision for environmental risks and charges |
136 |
1 |
1 |
(3) |
|
(4) |
131 |
||
Provision for litigation |
52 |
5 |
|
(5) |
(19) |
1 |
34 |
||
Other provisions |
176 |
20 |
|
(5) |
(8) |
(87) |
96 |
||
|
1,014 |
26 |
12 |
(21) |
(27) |
(228) |
776 |
||
| Download XLS (18 kB) |
|
31.12.2016 |
|||||||||
|
Opening balance |
Provisions (*) |
Increases due to passing of time |
Utilisations |
Other changes |
Change in scope of consolidation |
Final balance |
|||
(€ million) |
against charges |
for excess (*) |
||||||||
|
||||||||||
Provision for site dismantling and restoration |
515 |
|
9 |
(11) |
|
116 |
(1) |
628 |
||
Provision for environmental risks and charges |
131 |
6 |
1 |
(4) |
(1) |
5 |
(136) |
2 |
||
Provision for litigation |
34 |
7 |
|
(1) |
(3) |
|
(23) |
14 |
||
Other provisions |
96 |
27 |
|
(10) |
(1) |
|
(49) |
63 |
||
|
776 |
40 |
10 |
(26) |
(5) |
121 |
(209) |
707 |
||
The change in the scope of consolidation (€209 million) refers to the deconsolidation of Italgas Reti S.p.A. following the transaction separating the natural gas distribution business from Snam.
Other changes (€121 million) relate essentially to: (i) the revision of estimated (discounted) costs for site dismantling and restoration (€116 million) in the storage segment (€91 million) and transportation segment (€25 million), essentially following the reduction of expected discount rates.
The provision of €628 million for site dismantling and restoration (€515 million at 31 December 2015) 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 (€518 million) and transportation (€105 million) business segments.
The provision for litigation (€14 million, compared with €34 million at 31 December 2015) included costs which the Company has estimated it will incur for existing lawsuits.
Other provisions for risks and charges (€63 million compared with €96 million at 31 December 2015) mainly involve 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-year period 2015-2018, and the forecast quantities that will be granted in kind by users as required by Resolution 514/2013/R/gas (€40 million).
In accordance with ESMA Recommendation 2015/1608 of 27 October 2015, the effects on provisions of risks and charges arising from a reasonably possible change to the discount rate used at year-end are shown below.
The sensitivity34 of the discount rate represents the change in the value of the actuarial liability obtained using the end-of-year valuation data, changing the discount rate without any change in the other assumptions.
| Download XLS (16 kB) |
(€ million) |
Change in discount rate |
|
Effect on the net obligation at 31.12.2016 |
Reduction of 10% |
Increase of 10% |
Provision for site dismantling and restoration |
24 |
(23) |
34 For the purposes of sensitivity, only provisions for risks and charges showing a significant accretion discount were taken into account.