Provisions developed as follows:
| [ XLS ] |
|
€ million |
Restructuring |
Personnel |
Litigation |
Other |
Total |
|
January 1, 2007 |
46.2 |
126.8 |
168.6 |
144.0 |
485.6 |
|
Exchange differences |
–1.4 |
–1.0 |
–11.1 |
–0.5 |
–14.0 |
|
Utilizations |
–21.9 |
–47.4 |
–50.2 |
–56.6 |
–176.1 |
|
Additions |
94.7 |
62.4 |
87.9 |
150.2 |
395.2 |
|
Release |
–3.7 |
–2.8 |
–8.7 |
–22.6 |
–37.8 |
|
Changes in companies consolidated/Other |
–11.1 |
11.8 |
226.1 |
–12.7 |
214.1 |
|
December 31, 2007 |
102.8 |
149.8 |
412.6 |
201.8 |
867.0 |
|
thereof current |
80.3 |
51.9 |
58.7 |
106.1 |
297.0 |
|
thereof non-current |
22.5 |
97.9 |
353.9 |
95.7 |
570.0 |
Provisions for restructuring: This item mainly includes provisions for project-related severance payments for employees, contractually agreed severance obligations and contingent liabilities. The relevant provisions are recognized in accordance with IAS 37 when detailed restructuring plans have been prepared and communicated.
Provisions for personnel: Personnel provisions mainly include the expenses of obligations for the partial early retirement program, severance pay and anniversary bonuses.
Provisions for litigation: Provisions for litigation risks in connection with our former U.S. generics subsidiary Dey Inc. concerning allegedly false reporting of price information amounted to €107.0 million on the balance sheet date. There are also provisions amounting to the equivalent of €24.0 million in connection with the legal dispute at our former subsidiary Generics UK Ltd. for having allegedly taken part in pricing agreements for certain drugs. Although both companies were disposed of within the scope of the sale of the Generics business to Mylan Inc., PA (USA), Merck continues to be liable for costs incurring from the above-mentioned legal disputes.
Provisions for litigation increased sharply (€236.2 million) primarily as a result of the first-time inclusion of Serono. As of the balance sheet date, there are provisions in connection with the legal dispute with the company Israel Bio-Engineering Project Limited Partnership (IBEP), in which IBEP claims intellectual property rights and license fees in connection with funding and developing Rebif® and other products.
In addition, there are provisions in connection with a legal dispute with Italfarmaco S.p.A., Italy. The background is a license and supply agreement relating to the product Rebif® that was concluded between the parties and has been terminated by Italfarmaco S.p.A. in the meantime on account of alleged violations of the agreement by Serono. Italfarmaco S.p.A. claims compensation for, among other things, loss of profit.
In connection with the hormone preparation Serostim®, various persons and associations allege impermissible sales practices for Serostim®.
For various smaller pending legal disputes at companies of the Merck Group, provisions that are considered appropriate from today’s perspective have been set up.
Other provisions: This item includes provisions for uncertain commitments in the context of environmental protection measures as well as contributions, duties and fees.
