Annual Report and Accounts 2008
26 Provisions
| Insurance claims(a) £m |
Eurostar onerous contract provision(b) £m |
Other(c) £m |
Total £m |
|
|---|---|---|---|---|
| At 1 January 2008 | 42.1 | 27.9 | 18.3 | 88.3 |
| Charged to income statement | 16.4 | – | 6.8 | 23.2 |
| Utilised in the year | (20.8) | (8.4) | (10.9) | (40.1) |
| Acquired in business combinations | – | – | 1.3 | 1.3 |
| Amortisation of discount | 1.1 | 2.0 | – | 3.1 |
| Exchange difference | 4.5 | – | 3.0 | 7.5 |
| At 31 December 2008 | 43.3 | 21.5 | 18.5 | 83.3 |
| Current 31 December 2008 | 17.5 | 8.6 | 18.2 | 44.3 |
| Non-current 31 December 2008 | 25.8 | 12.9 | 0.3 | 39.0 |
| 43.3 | 21.5 | 18.5 | 83.3 | |
| Current 31 December 2007 | 18.1 | 8.4 | 18.3 | 44.8 |
| Non-current 31 December 2007 | 24.0 | 19.5 | – | 43.5 |
| 42.1 | 27.9 | 18.3 | 88.3 |
a) The insurance claims provision arises from estimated exposures at the year end, the majority of which will be utilised in the next six years, and comprises provisions for existing claims arising in the UK and North America.
b) A provision was recognised in 2006 for the Group's onerous contract for Eurostar with ICRRL. £8.4m (2007: £8.4m) was paid to ICRRL during the year. The provision will be utilised over the period to the end of the Group's contract in 2010, with the final payment being made in February 2011.
c) The following items are included within other provisions:
i. A provision was recognised for the expected liabilities in relation to the discontinued North American Public Transit business as disclosed in note 11. These liabilities have arisen as the Group is a party to an industry-wide litigation in respect of working time regulations. A provision has been recognised for the expected value of the settlement, but the total amount of the provisions recognised by the Group is not disclosed as this may prejudice the Group's position in this matter. The whole provision is expected to be paid in 2009.
ii. A provision was recognised in the year in the UK for redundancy costs as a result of a significant restructuring exercise undertaken at the end of 2008. The provision is expected to be fully paid in 2009.
iii. All other remaining provisions are expected to be paid within 2009.
When the effect is material, the provisions are discounted to their net present value.