Changes in other provisions were as follows.
Exchange rate differences for Put options and contingent considerations are mainly due to devaluation of the Azerbaijan manat. For financial liabilities, the carrying value equals fair value as provisions are discounted to present value. Refer to Note C25 “Financial assets and liabilities by category and level” for more information on financial instruments classified by category.
Put options and contingent consideration
The non-current portion of provisions for put options and contingent consideration relates to Xfera Móviles S.A. (Xfera).
For Xfera, which was acquired in 2006, the closing balance comprises in total SEK 850 million (SEK 992 million) referring to contingent additional consideration to the selling shareholders based on an up to 20 year earn-out model and to a put option giving existing holders of non-controlling interests the right to sell their shares to TeliaSonera after 5 years, of which at least 2 consecutive years of net profit. The provisions represent the present value of management’s best estimate of the amounts required to settle the liabilities. The amounts and timing may vary as a result of changes in Xfera’s operations and profitability compared to the business plan. The estimate for the put option liability has been made based on assumptions about the timing of the option exercise and about the fair value of Xfera at that date and the provision may vary as a result of changes in Xfera’s estimated fair value and the timing of the option exercise.
The restructuring provisions represent the present value of management’s best estimate of the amounts required to settle the liabilities. The estimates may vary as a result of changes in the actual number of months an employee is staying in redeployment before leaving and in the actual outcome of negotiations with lessors, sub-contractors and other external counterparts as well as the timing of such changes. The restructuring provisions are mainly related to workforce reduction as a result of ongoing optimization of the business in the Nordics, Baltics and Group functions. In addition, the integration of Tele2 into TeliaSonera’s Norwegian operations resulted in redundancies and associated restructuring costs.
Asset retirement obligations, warranty provisions, other provisions
Asset retirement obligations mainly refer to handling hazardous waste such as worn-out telephone poles impregnated with creosote or arsenic and to dismantling and restoration of mobile and fixed network sites. Remaining provisions as of December 31, 2015, are expected to be fully utilized in the period 2016–2045, depending on factors such as any contractual renewal options for site leases and dismantling plans decided by management.
Warranty provisions mainly comprise estimated future expenses for warranties related to products and services sold. Full utilization of these provisions is expected in the period 2016-2017.
Other provisions include provisions for damages and court cases, for payroll taxes on future pension payments and for onerous and other loss-making contracts, and insurance provisions as well as estimated expenses related to fulfilling representations made and warranties given and to potential litigation, etc. in connection with disposals and winding-up of group entities, associated companies and other equity holdings, and provisions for buy back commitments for sold equipment in certain markets. Full utilization of these provisions is expected in the period 2016–2028.
The provisions represent the present value of management’s best estimate of the amounts required to settle the liabilities.