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Annual Statements

Home Annual Statements Financial Statements 2013 Notes to the consolidated financial statements Notes to the consolidated balance sheet Contingent assets and liabilities

37. Contingent assets and liabilities

Pension plan

Schiphol Group’s pension plan is administered by ABP and qualifies as a defined-benefit plan. This means that Schiphol Group should recognise its share of the present value of the defined-benefit obligation, plan assets and income and expenses arising out of the plan and make the related disclosures. ABP is currently not in a position to supply Schiphol Group with the information necessary to treat the pension plan as a defined-benefit plan as there is no consistent and reliable basis for allocating the benefit obligations, plan assets and costs of the ABP plan to individual affiliated employers participating in the plan. Consequently, the plan is recognised as a defined-contribution plan. Schiphol Group recognises the pension contributions payable to ABP as an expense in the income statement.

The ABP pension regulations do not contain provisions on additional contributions to the fund or withdrawals from it in respect of Schiphol Group’s share in surpluses or deficits of the pension fund. Consequently, any surpluses and deficits will only result in changes in the amount of the contributions payable by Schiphol Group in the future and these will depend on the actual and expected financial position of the pension fund as reflected in the funding ratio. ABP’s funding ratio was 105.9% at 31 December 2013 .

Covenants on the future development of Amsterdam Airport Schiphol

The Alders Platform was created in December 2006 and is a consultative forum presided over by Mr Hans Alders to advise the Government on balancing the requirements of aviation growth at Amsterdam Airport Schiphol, disturbance reduction and local environmental quality in the medium term (to 2020). All relevant parties are represented in the Alders Platform: the State (the ministry of Infrastructure and the Environment), aviation parties (Schiphol Group, Air Traffic Control the Netherlands (LVNL) and KLM), a number of regional and local authorities (the provinces of North-Holland and South-Holland, the municipalities of Haarlemmermeer, Amstelveen, Uitgeest and Amsterdam) which form the Schiphol Regional Airport Governance Group (BRS), residents living in the vicinity of Amsterdam Airport Schiphol via the Schiphol Regional Consultative Committee (CROS), and the Association of Joint Platforms (VGP). The Alders Platform presented its recommendations for the medium term on 1 October 2008 since when the parties involved have been implementing the agreements. Progress is discussed within the Alders Platform at least twice a year. The details have been set out in three covenants ‘Local environmental quality in the medium term’, ‘Disturbance reduction and development of Amsterdam Airport Schiphol in the medium term’ and ‘Maintaining and strengthening the mainport function and network quality’.

A two-year experiment with a new noise reduction scheme for Amsterdam Airport Schiphol started on 1 November 2010 with the aim of maintaining the network of connections at Amsterdam Airport Schiphol while providing equal or better protection to the local community. In addition, the scheme should not be complicated and be easy to explain. During the experiment, the present scheme of threshold values at measurement points will remain in force.

In October 2013, agreement was reached with the Alders Platform on the new noise reduction scheme for Amsterdam Airport Schiphol and Mr Alders presented his recommendations to the state secretary for Infrastructure and Environment, Wilma Mansveld, on 8 October 2013. The new scheme is based on rules for runway usage:

  • an order of preference has been set for which runways to use for landings and takeoffs;
  • the runways that cause inconvenience to the fewest people will be used according to weather conditions;
  • runways will be used simultaneously as little as possible.

The Alders recommendations of October 2013 also included the first four-year evaluation of the Alders agreements and related covenants.

Covenant on local environmental quality in the medium term

The arrangements to be made under this covenant concern area-specific projects (improvement of the quality of the local environment in particular areas), individual measures (mitigation in individual cases of noise-related distress) and generic arrangements. Schiphol Group provided 10 million euros for the first tranche (charged to the financial year 2006) for the near term to 2010, earmarked exclusively for the funding of individual measures in distress cases. The State and the province of North-Holland also provided 10 million euros each. A second tranche was committed in the Alders recommendations of October 2013 in connection with which Schiphol Group is again making 10 million euros available. It has been agreed that, before this second phase is implemented, the parties will discuss their experiences from the first phase to determine how to enhance the quality of life in the surrounding areas most effectively and the programmes to be deployed. Schiphol’s contribution in the second tranche will again focus primarily on cases of distress, but contributions to area-specific projects in the most affected nearby areas are not excluded in advance. Details of the way the second tranche will be used will be developed and set out in a new covenant in 2014.

Covenant on disturbance reduction and development of Amsterdam Airport Schiphol in the medium term

This covenant includes arrangements on subjects such as traffic volume and selectiveness (a maximum of 580,000 air transport movements per annum, of which 70,000 elsewhere), operations and runway usage, and a new system of threshold values and enforcement. With regard to disturbance reduction, Schiphol Group specifically undertakes, on its own or in collaboration with others, to take measures restricting ground-noise levels (noise barriers to the southwest of the Runway 18R-36L), discourage operations with ‘bottom Chapter 3’ aircraft (marginally conforming aircraft), set objective criteria for prioritising the installation of new NOMOS noise monitoring points and provide insight into the current quality assurance of the NOMOS system, develop an environmental simulator providing insight into ground noise perception, and extend the provision of information via the Local Community Contact Centre Schiphol (Bas). To date, the majority of the arrangements have been complied with and so this covenant will be included in the broader evaluation of the Alders Accord. The Alders Platform decided in October 2012 to vary the details of the Continuous Descent Approach (CDA) arrangements, including a reduction in night flights from 32,000 to 29,000 over a period of three years as a compensating measure until the original ones can be met.

Covenant on maintaining and strengthening the mainport function and network quality

In line with the agreements made in the Alders Platform, the parties are making every effort to ensure that total additional capacity of around 70,000 air transport movements at the regional airports can be used. The Alders Platforms for Eindhoven and Lelystad airports agreed in 2010 and 2012 respectively that the capacity required for this (25,000 movements at Eindhoven Airport and 45,000 at Lelystad Airport) can be created. In 2013, Schiphol Group announced that it wanted to develop Lelystad Airport. A Memorandum on Scope and Level of Detail was prepared for the Environmental Impact Report as part of the application for the airport decree. A number of steps were also taken on airside arrangements for the air traffic foreseen for Lelystad. This should lead to an airport decree and related route decree for Lelystad in 2014, thus creating the legal basis for the further development of Lelystad Airport.

Water remediation plan

To improve the quality of the surface water in the long term, Remediation Plan Part 4 has been drawn up to reduce the harmful effects of liquids used in winter operations (glycol for aircraft de-icing and potassium formate for keeping the runways clear of ice and snow). This plan consists of a programme of measures and investment focusing on source-reducing measures and capital expenditure on sweeping and suction equipment to capture run-off from runways and aircraft stands. Remediation Plan Part 4 has been drawn up over recent years in close co-ordination with the Rijnland Water Board, which gave its final approval in June 2013. The plan will be phased in over the next few years. The current estimate is that Schiphol Group will invest 2 million euros on a range of assets over the next two years.

Nitrogen dioxide offset

The amended Airport Traffic Ruling (Luchtverkeersbesluit, LVB)  came into force in 2010. It is geared towards managing the environmental impact of air traffic to and from Amsterdam Airport Schiphol and includes measures which will offset the expected increase in nitrogen dioxide concentrations. The amended ruling requires Schiphol Group to install fixed power points and preconditioned air units at fifteen or sixteen aircraft stands annually from 2010. A total of 61 aircraft stands with an electricity supply have been available since the end of 2013 and so Schiphol has honoured the agreements made in 2010. A further three aircraft stands will be equipped during 2014, bringing the total to 64. The current estimate is that Schiphol Group will have to invest a further 0.7 million euros to install this infrastructure in the coming year.

Airport charges

As a result of incorrect reports and differences in load figures, KLM believes it has suffered an adverse financial effect of 5.5 million euros since 2010, which it is claiming back from Schiphol. Schiphol believes that these differences have been identified and documented several times and it has reported this repeatedly to KLM. Schiphol is of the opinion that a refund of 2.2 million euros is due under the applicable charges, terms and conditions. A liability for this amount has been recognised in the financial statements in 2013 and the remainder of the claim has been rejected by Schiphol. KLM is maintaining its claim.

easyJet submitted a complaint to the Netherlands Competition Authority (NCA) with respect to the differentiation between fees for transfer and O&D passengers in the 2009 charges, terms and conditions. The NCA rejected easyJet’s complaint in April 2009. The Court in Rotterdam rejected easyJet’s appeal against this. easyJet then appealed to the European Commission which rejected it on the grounds that the NCA had already ruled on the complaint. In July 2013, easyJet appealed against the European Commission’s decision at the European Court of Justice. Although Schiphol is not directly involved in the case, it has been permitted to intervene as an interested party.

The possible financial effect cannot be estimated and any financial effect will depend on the outcome of this case. As the case is still pending with no initial indication from the European Court of Justice, its outcome is uncertain.

Charges for 2015
During the consultation process in 2013, Schiphol provided an indication of the charges for 2015. The indication is for an average increase of 1% in charges, to be revised for the effect of and changes in traffic, the additional cost of the liquids aerosols and gels (LAGs) security measures and possible further adjustments to be discussed during the consultations in 2014.

Border Control Reform (No-Q)

In mid-2009, Schiphol Group and the Immigration and Naturalisation Service (IND) of the ministry of Justice decided to launch a joint Border Management Reform programme, as part of their ongoing cooperation in the area of safety and security at Amsterdam Airport Schiphol. The aim of the programme is designed to help increase safety and improve the quality and speed of services by creating an effective and efficient border control process involving the greatest possible use of intelligence-driven action, based on information about passengers and their baggage received in advance, and the application of new automatic border control concepts. Schiphol Group and the IND have committed one-off financial contributions to the programme of up to 16.5 million euros and 10 million euros respectively for the development and application of a new automatic border control concept currently being investigated and developed in the No-Q project. Schiphol Group reached agreement at with IND the end of 2012 for the period from 2012 to 2015 which put all of the initial arrangements into practice.

Contamination by extinguishing water

In July 2008, the Rijnland Water Board collected contaminated extinguishing water released during an incident at a KLM hangar in Schiphol Southeast and stored it in reservoirs made available by Schiphol. The Water Board had been granted a permit for this by the province of North-Holland. Although the contaminated extinguishing water was removed and decontaminated in 2009, it was later discovered that the soil and groundwater around the reservoirs had been contaminated. As the owner of the land concerned, Schiphol Group suffered damage as a result. The Water Board removed the sludge from the reservoirs in 2011, as a result of which no further contamination is taking place through the soil. The Water Board, KLM and Schiphol are now working together to take control measures aimed at preventing the further spread of contamination through groundwater. The contaminated reservoirs will ultimately have to be cleaned up. A study will be carried out in 2013 to determine the method to be used.

The watercourses at Schiphol that were contaminated during this incident will be cleaned up within the framework of the regular dredging programme. The most heavily contaminated locations close to the hangar will be accorded priority. The additional costs incurred on top of the regular dredging programme for the transport and processing of the contaminated material will be charged to KLM. Evides, a water decontamination company, is taking measures in consultation with the municipality of Haarlemmermeer to deal with the technical facilities that were also contaminated by this incident.

Covenant to reduce the risk of bird strikes at Schiphol

On 16 April 2012, Schiphol and the Dutch Airline Pilots Association, Natural Monuments, State Forest and landscape Northern Holland (nature conservancy organisations), the Netherlands Horticultural and Agricultural Organisation, municipality of Haarlemmermeer, provinces of North-Holland, South-Holland and Utrecht, and the State signed a covenant on reducing the risk of bird strikes at Schiphol. The parties committed to implement the covenant and participate in the Netherlands Control Group for Bird Strikes (NRV). The aim of the covenant is to reduce the risk of collisions between birds, especially geese, and aircraft in the area around Schiphol each year. The Control Group has a four-track plan for achieving the aims of the covenant. The four tracks are 1) population management, 2) crop adjustment, 3) adaptation of surrounding wetlands and 4) technology. Working closely with LVNL and KLM, Schiphol Group is responsible for developing the technology track. The cost of the various measures will be allocated fairly and reasonably among the parties. Financing the measures is a joint responsibility. Schiphol will pay the costs of the bird detection system and of monitoring bird strikes and near misses.

Other contingent assets and liabilities

The company is committed to contributing 0.5 million euros to the Schiphol Fund. A bank guarantee amounting to 2.3 million euros relating to payment commitments connected with the ‘Storage in Underground Tanks’ order has been given to the province of North-Holland.

Schiphol Group had a liability of 8.3 million euros in connection with the cash collateral with JPMorgan, for the difference between the liability in the balance sheet and the amount received as collateral.

Various other claims have been filed against N.V. Luchthaven Schiphol and/or its group companies, and there are disputes which have still to be settled. All claims and disputes are being contested and the company has taken legal advice on them. However, as it is impossible to predict the outcomes with any certainty it is not yet clear whether any of the cases will result in actual liabilities for the company and/or its group companies. Accordingly, no provisions have been recognised in the balance sheet in respect of these claims and disputes.

The company has also brought claims against third parties and has disputes pending in which it is claimant. Since it is not yet clear whether these cases will be resolved in the company’s favour, no related receivables have been recognised in the balance sheet.