tiï O Q, Notes to the Consolidated Financial Statements (continued) 9.2 Provisions - - - - - - - - Introduction Report of the Executive Board Report of the Supervisory Board Accounting estimates To make the actuarial calculations for the defined benefit plans, HEINEKEN needs to make use of assumptions for discount rates, future pension increases and life expectancy as described in this note. The actuarial calculations are made by external actuaries based on inputs from observable market data, such as corporate bond returns and yield curves to determine the discount rates used, mortality tables to determine life expectancy and inflation numbers to determine future salary and pension growth assumptions. Accounting policies Defined contribution plans A defined contribution plan is a post-retirement plan for which HEINEKEN pays fixed contributions to a separate entity. HEINEKEN has no legal or constructive obligations to pay further contributions if the fund does not hold sufficient assets to pay out employees. Defined benefit plans A defined benefit plan is a post-retirement plan that is not a defined contribution plan. Typically, defined benefit plans define an amount of pension benefit that an employee will receive on retirement, usually dependent on one or more factors such as age, years of service and compensation. HEINEKEN's net obligation in respect of defined benefit pension plans is calculated separately for each plan by estimating the amount of future benefits that employees have earned in return for their service in the current and prior periods; those benefits are discounted to determine its present value. The fair value of any defined benefit plan assets are deducted. The discount rate is the yield at balance sheet date on high- quality credit-rated bonds that have maturity dates approximating to the terms of HEINEKEN's obligations and that are denominated in the same currency in which the benefits are expected to be paid. The calculations are performed annually by qualified actuaries using the projected unit credit method. When the calculation results in a benefit to HEINEKEN, the recognised asset is limited to the present value of economic benefits available in the form of any future refunds from the plan or reductions in future contributions to the plan. In order to calculate the present value of economic benefits, consideration is given to any minimum funding requirements that apply to any plan in HEINEKEN. An economic benefit is available to HEINEKEN if it is realisable during the life of the plan, or on settlement of the plan liabilities. When the benefits of a plan are changed, the expense or benefit is recognised immediately in profit or loss. HEINEKEN recognises all actuarial gains and losses arising from defined benefit plans immediately in other comprehensive income and all expenses related to defined benefit plans in personnel expenses and other net finance income and expenses in profit or loss. Financial Statements Sustainability Review Heineken N.V. Annual Report 2018 Other Information Provisions within HEINEKEN mainly relate to claims and litigation, that arise in the ordinary course of business. The outcome depends on future events, which are by nature uncertain. In millions of Claims and litigation Taxes Restruc turing Onerous contracts Other Total Balance as at 1 January 2018 403 498 104 56 87 1,148 Changes in consolidation (9) (26) 13 1 (21) Provisions made during the year 91 29 102 31 34 287 Provisions used during the year (3) (64) (28) (13) (108) Provisions reversed during the year (87) (31) (12) (20) (23) (173) Effect of movements in exchange rates (42) (34) (3) (1) (80) Unwinding of discounts 16 1 17 Transfer (1) (62) 3 (60) Balance as at 31 December 2018 368 375 130 49 88 1,010 Non-current 355 322 80 32 57 846 Current 13 53 50 17 31 164 Claims and litigation The provision for claims and litigation of €368 million mainly relates to civil and labour claims in Brazil. Taxes The provisions for taxes mainly relate to Brazil. Tax legislation in Brazil is highly complex and subject to interpretation, therefore the timing of the cash outflows for these provisions is uncertain. Restructuring The provision for restructuring of €130 million (2017: €104 million) mainly relates to restructuring programmes in Spain and the Netherlands. Other provisions Included are, among others, surety and guarantees provided of €47 million (2017: €42 million).

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