12 Movements in provisions

CHF million	Warranties	Onerous contracts	Legal cases	Restruc- turing provisions	Other provisions	Personnel and social security	Provisions	Deferred tax liabilities	Provisions and deferred tax liabilities

As of 31 December 2014	30	11	12	1	37	69	160	46	206

Reclassifications
Increase	18	3	6		6	10	43	5	48
Interest expense arising from discounting					1		1		1
Use	–11	–3	–3	–1	–11	–5	–34		–34
Release	–5	–2	–2		–3	–1	–13	–6	–19
Translation adjustment	–2	–1			–2	–5	–10		–10
As of 31 December 2015	30	8	13		28	68	147	45	192
– Thereof current	17	6	1		10	4	38		38
– Thereof non-current	13	2	12		18	64	109	45	154

As of 31 December 2015	30	8	13		28	68	147	45	192

Reclassifications						1	1		1
Increase	19	6	9		4	9	47	5	52
Interest expense arising from discounting
Use	–14	–3	–3		–4	–7	–31		–31
Release	–4	–1	–2		–5	–3	–15	–5	–20
Translation adjustment						–1	–1		–1
As of 31 December 2016	31	10	17		23	67	148	45	193
– Thereof current	21	10	1		6	5	43		43
– Thereof non-current	10		16		17	62	105	45	150

Provisions are classified as follows: “Warranties on series products” (machines, or similar), “Onerous contracts” (when the costs of meeting the contractual obligations exceed the expected economic benefits), “Legal cases”, “Restructuring provisions” (legal and constructive obligations with third parties, that have been communicated beforehand), “Personnel and social security” (provisions that are related to employee benefits), and “Other provisions”.

The valuation of provisions in all categories is based on actual data if available (e.g. claims that have occurred or been reported) or on the experience of recent years and management estimates. The deferred tax liabilities are based on temporary valuation differences, which are reported in the balance sheet at the Corporate Company level.

Warranty provisions amounting to CHF 31 million are nearly unchanged compared with the previous year. Due to the favorable claims outcome, it was possible to release CHF 4 million. At the same time, new warranty provisions of CHF 19 million had to be set aside, and CHF 14 million were utilized.

37% of the warranty provisions are for GF Machining Solutions and 28% for GF Automotive. They derive from complaints and claims for damages made to the various locations.

The non-current provisions in the “Personnel and social security” category in the amount of CHF 62 million (previous year: CHF 64 million) are expected to result in a cash outflow in an average of ten years, the non-current provisions in the other categories are expected to result in a cash outflow within the next two to three years.

Provisions in the “Legal cases” category relate to a number of individual cases involving the various divisions with an estimated cash outflow of less than CHF 6 million per case.

The “Other provisions” category contains provisions for pension plans in the amount of CHF 14 million and for other operating risks.

Expenditures not connected with pension plans in the narrow sense, such as awards for length of service and anniversary bonuses are recognized in the “Personnel and social security” category and amounted to CHF 67 million in 2016 (previous year: CHF 68 million).