19 Provision for formal expropriations plus sound insulation and resident protection

(CHF 1,000)	Formal expropriations	Sound insulation and resident protection	Total
Balance as at 1 January 2016	354,307	131,413	485,720
Provision used 1)	–10,724	–12,585	–23,309
Decrease of provision	–21,485	0	–21,485
Unwinding of discount 2)	–1,880	828	–1,052
Balance as at 31 December 2016	320,218	119,656	439,874
of which current (planned payment within 1 year)	19,965	13,983	33,948
of which non-current (planned payment from 1 year on)	300,253	105,673	405,926

Balance as at 1 January 2017	320,218	119,656	439,874
Provision used 1)	–4,563	–17,319	–21,882
Decrease of provision	0	0	0
Unwinding of discount 2)	968	387	1,355
Balance as at 31 December 2017	316,623	102,724	419,347
of which current (planned payment within 1 year)	34,140	15,980	50,120
of which non-current (planned payment from 1 year on)	282,483	86,744	369,227

1) The amount paid for formal expropriations only includes effective payments of compensation, and excludes other associated external costs in accordance with the regulations of the Airport of Zurich Noise Fund (see note 20, Airport of Zurich Noise Fund).

2) In the year under review as well as in the previous year, a reassessment was made of the discount rates and the expected cash outflows.

Provision for formal expropriations

In the first half of 2016, the Swiss Federal Supreme Court handed down two rulings in test cases regarding claims for compensation due to eastern and southern approach routes. By answering important questions relating to how pending claims for compensation will be dealt with in a court of last instance, these rulings increased legal certainty significantly. These Swiss Federal Supreme Court rulings enabled Flughafen Zürich AG to undertake a reappraisal of the outstanding cost of compensation for formal expropriations. Based on the recalculation, the provision for formal expropriations was reduced by CHF 21.5 million as at 30 June 2016. At the same time, the intangible asset from the right of formal expropriation was reduced by the same amount (see note 10, Intangible assets).

As at the reporting date, the estimated costs for formal expropriations amounted to CHF 385.0 million, of which CHF 63.9 million had already been paid out at that date. The outstanding costs of CHF 321.1 million (nominal amount) are stated at their present value of CHF 316.6 million in the consolidated financial statements for the period ended 31 December 2017. The discount rate used to discount the nominal payments flows remained unchanged at 0.35%. It is currently expected that the payments can be completed by the end of 2025.

Provision for sound insulation and resident protection

As at the reporting date, the estimated costs for sound insulation and resident protection measures remained unchanged at CHF 340.0 million, of which CHF 236.5 million had already been paid out at that date. The outstanding costs of CHF 103.5 million (nominal amount) are stated at their present value of CHF 102.7 million in the consolidated financial statements for the period ended 31 December 2017. The discount rate remained unchanged at 0.25%. It is currently expected that the payments can be completed by the end of 2025.