Annual Report - EDP

notes to the consolidated EDP - and Energias company de Portugal, financial S.A. statementsfor the Notes years to the ended Consolidated 31 december and Company 2012 Financial and Statements 2011for the years ended 31 December 2012 and 2011Medical Care Plan and Other Benefits in Brazil includes liabilities of 135,123 thousand Euros relating to medical care, whose sensitivity analysis is as follows:Sensitivity assumption- medical care inflationCentralThousands of Euros Assumptions +1% -1%Liabilities at the end of the year 135,123 153,595 119,7432013 cost for the year 14,685 16,041 13,58137. PROVISIONS FOR LIABILITIES AND CHARGESProvisions for liabilities and charges are analysed as follows:GroupCompanyThousands of Euros Dec 2012 Dec 2011 Dec 2012 Dec 2011Provisions for liabilities and charges:Provision for legal and labour matters and other contingencies 78,495 87,143 - -Provision for customer guarantees under current operations 10,121 37,867 - -Provisions for dismantling and decommissioning 169,402 140,212 - -Provision for other liabilities and charges 124,848 149,927 27,882 72,172382,866 415,149 27,882 72,172The changes in the Provisions for legal and labour matters and other contingencies are analysed as follows:GroupThousands of Euros Dec 2012 Dec 2011Balance at the beginning of the year 87,143 92,406Charge for the year 26,018 33,779Reversals -12,739 -13,559Charge-off for the year -21,695 -56,972Other and exchange differences -232 31,489Balance at the end of the year 78,495 87,143EDP and its subsidiaries boards, based on the information provided by legal advisors and on the analysis of pending law suits, have booked provisions of an amountsufficient to cover the losses estimated as probable, related with litigations in progress.Provision for legal and labour matters and other contingencies, includes provisions for litigation in progress and other labour contingencies of 51,701 thousands ofEuros (31 December 2011: 79,529 thousands of Euros), relates essentially to:i) Requests for the refund of tariff increases paid by industrial consumers of the Brazilian subsidiaries Bandeirante and Escelsa of 14,722 thousands of Euros (31December 2011: 19,498 thousands of Euros). The requests result from the application of Orders DNAEE 38 of 27 February 1986 and 45 of 4 March 1986 - PlanoCruzado effective from March to November 1986;ii) The Municipal Council of Póvoa do Varzim has brought up a legal action, which estimated liability amounts to 2,852 thousands of Euros to be refunded by EDPof amounts of the FEF (Fundo de Equilíbrio Financeiro – Financial Stability Fund). The action has been contested by EDP;iii) There is a litigation with the Municipal Council of Seixal relating to differences regarding occupation rates of the thoroughfare for the years 2006 to 2008, in atotal amount of 3,852 thousands of Euros. In the second quarter of 2012, and following a final and unfavorable decision relating to the litigations of the years 2004and 2005, the EDP Group used the provision for litigation in the amount of 6,344 thousands of Euros;iv) Following the decision by the arbitration court, which partially accepted Terriminas claim, condemning EDP Produção to pay the amount of 1.3 millions of Eurosregarding the price differential for 1985 and 1986, as at 31 December 2012, EDP Produção booked a provision in the amount of 5 millions of Euros, correspondingto the initial amount updated to current prices;v) The remaining legal litigations correspond mainly to indemnities for fires, interruption of electricity supply, electrocution, as well as for other damages caused.The movement in Provision for customer guarantees under current operations is analysed as follows:GroupThousands of Euros Dec 2012 Dec 2011Balance at the beginning of the year 37,867 108,480Charge for the year 27 6,165Reversals -2,924 -23,614Charge-off for the year -34,119 -38,804Other and exchange differences 9,270 -14,360Balance at the end of the year 10,121 37,867Provisions for customer guarantees under current operations of 10,121 thousands of Euros (31 December 2011: 37,867 thousands of Euros) includes essentiallyprovisions for commercial losses.232A World Full Of Energy