23 – Other provisions

 

 

December 31, 2014

December 31, 2013

Million €

 

 

Thereof short-term

 

Thereof short-term

Restoration obligations

 

1,428

84

1,292

59

Environmental protection and remediation costs

 

621

166

601

157

Employee obligations

 

1,744

1,333

1,876

1,313

Sales and purchase risks

 

715

708

639

633

Restructuring measures

 

156

103

228

153

Litigation, damage claims, guarantees and similar commitments

 

112

48

112

56

Other

 

1,570

402

1,148

299

Total

 

6,346

2,844

5,896

2,670

Restoration obligations primarily relate to the estimated costs for the filling of wells and the removal of production equipment after the end of production. The increase in long-term provisions was mainly due to taking over provisions in the Oil & Gas segment as a result of the acquisition of the production fields of Statoil and the compounding of provisions.

Provisions for environmental protection and remediation costs cover expected costs for rehabilitating contaminated sites, recultivating landfills, removal of environmental contamination at existing production or storage sites and similar measures. In addition, provisions are recognized in connection with the allocation of emission certificates from the German Emissions Trading Authority or other similar bodies. The increase in provisions was almost entirely attributable to foreign currency effects.

Provisions for employee obligations include obligations for the granting of long-service bonuses, anniversary payments, variable compensation including associated social security contributions, and other accruals as well as provisions for early retirement programs for employees nearing retirement.

The sales and purchase risks provisions include warranties, product liability, customer rebates and other price reductions, sales commissions, and provisions for expected losses on committed purchases as well as provisions for onerous contracts. Currency effects led to higher values at year end.

The restructuring measures provisions include severance payments to employees as well as expected costs for site closures, including the costs for demolition and similar measures. The decrease was largely due to the utilization of provisions for restructuring programs in the Performance Products segment in Europe. On the balance sheet date, €125 million was attributable to provisions for severance payments.

Provisions for litigation, damage claims, guarantees and similar commitments include the expected costs of litigation, obligations under damage claims, and other guarantees.

Other includes long-term tax provisions as well as further present obligations and accruals. The increase largely resulted from a tax refund in 2014, which was deducted in the calculation of the provision for tax risk items in the previous year.

The following table shows the development of other provisions by category. Other changes include changes in the scope of consolidation, currency effects and the reclassification of obligations to liabilities when the amount and timing of these obligations become known.

Development of other provisions in 2014 (in million €)

 

 

Jan. 1, 2014

Additions

Unwinding of the discount

Utilization

Reversals

Other changes

Dec. 31, 2014

Restoration obligations

 

1,292

81

52

(49)

(5)

57

1,428

Environmental protection and remediation costs

 

601

153

6

(150)

(13)

24

621

Employee obligations

 

1,876

1,462

9

(1,453)

(125)

(25)

1,744

Sales and purchase risks

 

639

512

0

(494)

(23)

81

715

Restructuring measures

 

228

47

0

(83)

(39)

3

156

Litigation, damage claims, guarantees and similar commitments

 

112

27

3

(17)

(16)

3

112

Other

 

1,148

628

5

(181)

(137)

107

1,570

Total

 

5,896

2,910

75

(2,427)

(358)

250

6,346