29. Provisions

Million CHF

Site restoration and other environmental provisions

Specific business risks

Other provisions

Total 2015

Total 20141

1

Restated due to changes in accounting policies, see note 2.

January 1

739

136

434

1,309

1,293

Merger with Lafarge (note 4)

369

445

283

1,098

0

Other change in structure

(47)

(5)

(34)

(87)

0

Reclassification from liabilities directly associated with assets held for sale

0

0

0

0

49

Provisions recognized

73

634

253

960

327

Provisions used during the year

(56)

(88)

(169)

(313)

(275)

Provisions reversed during the year

(44)

(46)

(126)

(216)

(136)

Unwinding of discount and discount rate changes

11

0

0

11

21

Currency translation effects

(49)

(26)

(42)

(118)

31

December 31

996

1,049

598

2,643

1,309

Of which short-term provisions

77

320

206

602

234

Of which long-term provisions

919

729

392

2,041

1,076

Site restoration and other environmental provisions

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

Specific business risks comprise litigation and restructuring costs which arise during the normal course of business. Provisions for litigation mainly relate to antitrust and commercial disputes, environmental claims, product liability as well as tax claims and are set up to cover legal and administrative proceedings. Total provisions for litigations amounted to CHF 576 million (2014: CHF 85 million) on December 31. In 2015, it included several provisions for risks related to income taxes and other taxes of CHF 137 million (2014: CHF 30 million). In connection with the 2015 business combination, provisions for contingent liabilities were recognized and related mainly to legal risks, tax risks and unfavorable contracts. The total amount of provisions for contingent liabilities arising from business combinations amounted to CHF 217 million (2014: CHF 17 million), the recorded amount for legal and tax risks is included in the amounts of provisions for litigations and tax risks mentioned above. 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 455 million (2014: CHF 51 million) on December 31. These provisions are expected to result in future cash outflows mainly within the next one to three years.

In the context of the merger, the Group announced the reorganization of its Corporate functions in Switzerland and in France. The proposed new organization will result in a net reduction of approximately 380 positions. In France and Switzerland, the information and consultation procedure with the employee representatives was completed and the implementation of the restructuring plan is almost complete. LafargeHolcim recognized a restructuring provision of CHF 250 million in this respect.

The sensitivity associated with certain provisions led management to limit the extent of the disclosure discussed above as it believes it could seriously prejudice the position of the Group.

Other provisions

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 health insurance and pension schemes, which do not qualify as benefit obligations, of CHF 34 million (2014: CHF 7 million) and provisions related to sales and other taxes of CHF 57 million (2014: CHF 12 million). The expected timing of the future cash outflows is uncertain.