31 Provisions

 

Site restoration and other environmental provisions

Specific business
risks

Other provisions

Total

Total

Million CHF

 

 

 

2014

2013

January 1

719

136

445

1,301

1,459

Change in structure

0

0

0

0

(27)

Reclassification from (to) liabilities directly associated with assets held for sale

21

25

2

49

(51)

Provisions recognized

53

41

233

327

351

Provisions used during the year

(59)

(30)

(187)

(275)

(258)

Provisions reversed during the year

(36)

(37)

(70)

(142)

(119)

Unwinding of discount and discount rate changes

21

1

0

22

21

Currency translation effects

23

(1)

11

33

(75)

December 31

742

136

435

1,314

1,301

Of which short-term provisions

75

11

147

234

224

Of which long-term provisions

667

125

288

1,080

1,077

Site restoration and other environmental provisions represent the Group’s legal or constructive obligations of restoring a site. The timing of cash outflows of these provisions is dependent on the completion of raw material extraction and the commencement of site restoration.

Specific business risks comprise litigation and restructuring costs which arise during the normal course of business. Provisions for litigation mainly relate to antitrust investigations, product liability as well as tax claims and are set up to cover legal and administrative proceedings. Total provisions for litigations amounted to CHF 85 million (2013: 71) on December 31. In 2014, it included several provisions for risks related to income taxes and other taxes of CHF 30 million (2013: 32). The timing of cash outflows of provisions for litigations is uncertain since it will largely depend upon the outcome of administrative and legal proceedings.

Provisions for restructuring costs relate to various restructuring programs and amounted to CHF 51 million (2013: 65) on December 31. These provisions are expected to result in future cash outflows mainly within the next one to three years.

Other provisions relate mainly to provisions that have been set up to cover other contractual liabilities. The composition of these items is extremely manifold and comprises, as of December 31, among other things: provisions for various severance payments to employees of CHF 30 million (2013: 27), provisions for performance related compensation payments of CHF 58 million (2013: 51), provisions for contingent liabilities arising from business combinations of CHF 17 million (2013: 18), provisions related to sales and other taxes of CHF 12 million (2013: 10) and provisions for health insurance and pension schemes, which do not qualify as benefit obligations, of CHF 7 million (2013: 9). The expected timing of the future cash outflows is uncertain.