23. PROVISIONS FOR LIABILITIES AND CHARGES

The changes that occurred during the period are shown below:

PROVISIONS FOR LIABILITIES AND CHARGES - NON-CURRENT PORTION
(in thousands of euro)
Opening balance at 12/31/2010 165,732
Translation differences (9,551)
Increases 7,896
Utilisation / releases (7,181)
Other 2
Closing balance at 12/31/2011 156,898
PROVISIONS FOR LIABILITIES AND CHARGES - CURRENT PORTION
(in thousands of euro)
Opening balance at 12/31/2010 115,984
Translation differences (173)
Increases 39,425
Utilisation / releases (32,243)
Other 1,678
Closing balance at 12/31/2011 124,671
 

 

At December 31, 2011 the provisions for liabilities and charges – non-current portion refer mainly to:

  • tax litigation and contingent tax liabilities concerning the subsidiary Pirelli Pneus Ltda in Brazil (euro 58,639 thousand) and the parent company Pirelli & C. S.p.A (euro 26,610 thousand);
  • labour lawsuits (euro 44,800 thousand);
  • guarantees offered upon disposal of Pirelli assets in the former Cables and Energy and Telecommunications Systems segments to Goldman Sachs Capital Partner in July 2005 (euro 10,000 thousand);
  • site clean-up work related to disused tracts of land (euro 7,683 thousand).

Increases in the non-current portion mainly concern adjustments related to the needs to cover labour lawsuits and site clean-up work related to disused tracts of land (euro 5,936 thousand of the parent Pirelli & C. S.p.A. and euro 1,896 thousand of the Tyre Business).

The provisions for liabilities and charges – current portion mainly include amounts set aside for:

  • industrial risks and claims (euro 34,170 thousand);
  • site clean-up work related to disused tracts of land (euro 9,057 thousand);
  • reorganisation and closure of business units (euro 9,555 thousand);
  • litigation for occupational diseases (euro 10,017 thousand);
  • product warranties (euro 14,109 thousand);
  • labour lawsuits (euro 8,867 thousand);
  • tax litigation (euro 4,826 thousand).

Increases in the current portion mainly concerned the Italian based units (euro 14,988 thousand) for litigation over occupational diseases and site clean-up work related to disused tracts of land connected with the construction of the new Settimo Torinese production centre, product warranties and corporate reorganisation projects, product warranties in the United States (euro 5,305 thousand), site clean-up work and product warranties in Germany (euro 4,054 thousand), and for product warranties and claims in the United Kingdom (euro 1,620 thousand).

Utilisation of the current portion related mainly to closure of the disputes for occupational diseases and product warranties of the Italian based units (euro 11,718 thousand), and to product warranties and disputes in the United States, China and Germany (euro 12,705 thousand).