A breakdown of the Group's payroll by employee category is as follows:
(number of employees) Number Joined Left Other/ Number on Average
  on 1/1/05 company company Reclassif. 12/31/05 number
Executives 343 8 (187) 7 171 299
Middle managers and office staff 3,401 48 (1,441) 45 2,053 3,081
Production staff 792 - (1) (52) 739 757
Total for the Group 4,536 56 (1,629) - 2,963 4,137
13. Provision for Deferred Taxes
The balance of 1,096 million euros, or 112 million euros less than at December 31, 2004, reflects mainly the deferred tax liability from the use during the transition process of fair value as deemed cost to value property, plant and equipment.
The following table shows a breakdown of this reserve by type of underlying temporary difference, keeping in mind that certain Group companies that met the requirements of IAS 12 offset their deferred-tax liability against prepaid taxes:
(in millions of euros) 12.31.2005
Deferred-tax liabilities:  
- Differences in the valuation of property, plant and equipment 1,141
- Adoption of the standard on finance leases (IAS 17) 47
- Adoption of the standard on financial instruments (IAS 39) 22
- Other deferred taxes 7
Total deferred-tax liabilities (A) 1,217
Deferred-tax assets:  
- Tax loss carryforward 59
- Taxed provisions for risks 54
- Adoption of the standard on financial instruments (IAS 39) 4
- Other prepaid taxes 4
Total deferred-tax assets (B) 121
Total provision for deferred taxes (A-B) 1,096
Deferred taxes deducted directly from shareholders' equity amounted to 14 million euros attributable to the adoption of the amortized cost method to value financial liabilities and bonds issued and derivatives.
14. Provisions for Risks and Charges
At December 31, 2005, the reserves for risks and charges, which are established to cover contingent liabilities, totaled 1,002 million euros, a decrease of 112 million euros compared with 2004. This decrease was made possible by the settlement of certain legal disputes, which required the payment of compensation to the opposing parties.
The main changes that occurred in 2005 are reviewed below:
  • The main components of additions, of 150 million euro include 71 million euros added to cover liabilities for pending disputes and statutory interest on existing provisions; 29 million euros to cover future costs for the decommissioning and remediation of industrial sites; 26 million euros for contingent obligations from guarantees provided upon the sale of equity investments; 7 million euros for the capitalization of interest on the provision for the decommissioning and remediation of industrial sites; 3 million euros set aside to cover the risk of writedowns of equity investments; and 14 million euros for other risks that arose during the year, including those related to emissions trading issues.
  • The main component of utilizations, which totaled 216 million euros, was the cancellation of a 100-million-euro provision set aside to cover contractual obligations undertaken by Edison pursuant to a
(in millions of euros) Market Currency Par Coupon Rate Maturity Ammortized Fair value
      value       cost  
      outstanding          
Euro Medium Term Notes:                
Edison Spa Luxembourg              
  Securities Exchange euro 600 Annual in arrears 7,375% 7/20/07 618 658
Italenergia Retail euro 830 Semiannual in arrears 2,908% 8/26/07 822 845
Edison Spa Luxembourg              
  Securities Exchange euro 700 Annual in arrears 5,125% 12/10/10 700 754
Edison Spa Luxembourg Securities              
  Exchange euro 500 Quarterly in arrears 2,787% 7/19/11 502 511
Edison Treasury Services Srl Luxembourg Securities              
  Exchange euro 195 Quarterly in arrears 2,515% 7/20/09 196 197
Total for the Group     2,825       2,838 2,965
  • contract to sell Cereol following an agreement that settled any and all present and future claims by the opposing party. Other utilizations included 39 million euros for guarantees provided in connection with the sale of certain companies, 34 million euros for dispute settlements, 12 million euros for soil remediation at industrial sites, 11 million euros for settlements of tax disputes, 11 million euros related to the sale of a 90% interest in Edison LNG in 2005 and 9 million euros related to the sale of other equity investments.
  • The change in scope of consolidation (42 million euros) reflects the sale of the Tecnimont Group.
The table below shows a breakdown of this item and the changes that occurred in 2005:
(in millions of euros) 12/31/04 Additions Utiliz. Other Change in scope 12/31/05
              of consolid.  
- Disputed tax items   45 1 (11) - - 35
- Charges for contractual guarantees              
  on the sale of equity investments   321 26 (139) - - 208
- Risks for disputes, litigation and contracts 188 20 (24) (12) - 172
- Provisions for decommissioning and              
  remediation of industrial sites   162 7 (4) 8 - 173
- Environmental risks   180 - - - - 180
- Risks on the sale of equity investments 21 3 (9) - - 15
- Other risks and charges   197 93 (29) - (42) 219
Total for the Group   1,114 150 (216) (4) (42) 1,002
More detailed information about the entries that resulted in the current composition of the provisions for risks and charges is provided in the section of this Report entitled Update of the Main Legal and Tax Disputes at December 31, 2005.
15. Bonds
The balance of 2,838 million euros includes 13 million euros in amortized cost (IAS 39). A breakdown is as follows:
More specifically:
  • Edison 2000-2007 bonds, par value 600 million euros, issued in July 2000 with a coupon rate of 7.375%. This rate is the result of the original rate of 6.375% plus incremental interest added by a step up/step down mechanism tied to the credit rating assigned to the bonds.
  • ITALENERGIA 2002-2007 bonds, par value 830 million euros, placed with retail investors. These bonds accrue interest at a variable rate indexed to the six-month Euribor plus 75 basis points. The interest rate is linked to a step up/step down mechanism tied to the credit rate assigned, and during the year, thanks to the rating upgrade, the 25 basis points added to the interest rate have been eliminated.