Financial Statements - Solvay

(29) Provisions
EUR Million
Employee
benefi ts
Health,
safety and
environment
Litigation Other Total
At 31 December 2007 1 187 417 473 237 2 314
Additions* 133 44 41 43 261
Reversals** -42 -6 -21 -77 -146
Uses -162 -24 -54 -76 -316
Currency translation differences 6 1 -6 0 1
Acquisitions and changes
in consolidation scope
28 1 8 0 37
Disposals 0 0 0 0 0
Other 0 0 0 0 0
At 31 December 2008 1 150 433 441 127 2 151
Of which short-term provisions 43 29 11 40 123
* Of which interest cost 123 6
** Of which past discount adjustment -5
In total, provisions decreased by EUR 163 million (-7 %), mainly due to:
– the reclassifi cation from provisions to working capital (short-term liabilities) of EUR 50 million of milestones due to
the previous shareholders of Fournier Laboratories as a consequence of the absence of generics for TRICOR ® in 2008;
– a net reduction of EUR 45 million (USD 67 million) in the provisions for settling certain US and Canadian class actions
with respect to alleged unfair competition practices in the peroxides activities in the NAFTA region;
– the full consolidation of SolVin companies, which increases the Group’s provisions by EUR 36 million;
– a net decrease of provisions for termination benefi ts of EUR 31 million;
– a reversal of a provision of EUR 25 million for Bipolar expenses under the partnership agreement with Wyeth.
Provisions for post-employment benefi ts
Personnel expenses amounted to EUR 1 981 million in 2008 (EUR 2 081 million in 2007).
Provisions for employee benefi ts were EUR 1 150 million in 2008 (EUR 1 187 million in 2007).
These provisions have been set up primarily to cover post-employment benefi ts granted by most Group companies in line,
either with local rules and customs, or with established practices which generate constructive obligations.
Provisions for post-employment benefi ts amounted to EUR 948 million in 2008 (EUR 956 million in 2007) before deducting
the EUR 86 million capitalized (2007: EUR 73 million) pension asset.
These provisions are set up on the basis of the IFRS accounting policies defi ned in item 5 of the present report and refl ect
the estimated compensation at the time of retirement.
The balance consists of provisions for termination benefi ts (EUR 139 million, EUR 170 million in 2007), provisions for other
long-term benefi ts (EUR 51 million, EUR 49 million in 2007) and provisions for benefi ts not valued in accordance with
IAS 19 (EUR 12 million, the same as in 2007).
The largest pension plans are in Belgium, France, Germany, the Netherlands, the United Kingdom and the United States.
Certain companies provide post-employment health or life insurance cover to their employees and related benefi ciaries.
This cover is either fi nanced under insurance contracts or is covered by provisions for post-employment benefi ts.
Financial
91
Solvay Global Annual Report 2008
Financial