In BHP's 2019 Annual Report, tabular disclosure on the provisions related to Samarco dam failure is reported on page 183. Discuss the movement in these provisions focusing on the amounts reported as"Utilised" ($328), and"Change in Estimate" $579. Do these amounts matter from an analyst's standpoint? Why?

4 Significant events - Samarco dam failure continued Equity accounted investment in Samarco BHP Billiton Brasil's investment in Samarco remains at US$ nil. BHP Biliton Brasil provided US$96 million funding under a working capital facility during the period and recognised additional share of losses of US$96 million. No dividends have been received by BHP Billiton Brasil from Samarco during the period. Samarco currently does not have profits available for distribution and is legally prevented from paying previously declared and unpaid dividends. Provisions related to the Samarco dam failure 2019 2010 USSM USSA At the beginning of the financial year 1,285 1,057 Movement in provisions 629 228 Comprising: Utilised (328) (285) Adjustments charged to the income statement: Change in estimate 579 560 Samarco Germano dam decommissioning 263 Amortisation of discounting impacting net finance costs 108 84 Exchange translation 7 (131) At the end of the financial year 1,914 1.285 Comprising: Current 440 313 Non-current 1,474 972 At the end of the financial year 1,914 .285 Samarco dam failure provisions and contingencies Under a Governance Agreement ratified on 8 August 2018, As at 30 June 2019, BHP Billiton Brasil has identified provisions and BHP Billiton Brasil, Samarco and Vale will establish a process to contingent liabilities arising as a consequence of the Samarco dam renegotiate the Programs over two years to progress settlement failure as follows: of the R$155 billion (approximately US$40 billion) Federal Public Prosecution Office claim (described below). Provisions Provision for Samarco dam failure BHP Billiton Brasil, Samarco and Vale maintain security comprising On 2 March 2016, BHP Billiton Brasil, Samarco and Vale, entered into R$1.3 billion (approximately US$340 million) in insurance bonds, a Framework Agreement with the Federal Government of Brazil, the R$100 million (approximately US$25 million) in liquid assets and states of Espirito Santo and Minas Gerais and certain other public a charge of R$800 million (approximately US$210 million) over authorities to establish a foundation (Fundacao Renova) that will Samarco's assets. The security is maintained for a period of develop and execute environmental and socio-economic programs 30 months from ratification of the Governance Agreement, after (Programs) to remediate and provide compensation for damage which BHP Billiton Brasil, Vale and Samarco will be required to provide security of an amount equal to the Fundacao Renova's annual caused by the Samarco dam failure. Key Programs include those for financial assistance and compensation of impacted persons, budget up to a limit of R$2.2 billion (approximately US$575 million). including fisherfolk impacted by the dam failure, and those for Samarco Germano dam decommissioning remediation of impacted areas and resettlement of impacted Due to legislative changes in Brazil in the current year, Samarco communities. A committee (Interfederative Committee) comprising s currently progressing plans for the accelerated decommissioning representatives from the Brazilian Federal and State Governments of its upstream tailings dams (the Germano dam complex). ocal municipalities, environmental agencies, impacted communities and Public Defence Office oversees the activities of the Fundacao Given the significant uncertainties surrounding the nature and timing Renova in order to monitor, guide and assess the progress of actions of Samarco's future operations, BHP Billiton Brasil has recognised a agreed in the Framework Agreement. provision of US$263 million for a 50 per cent share of the expected Germano decommissioning cost. Plans for the decommissioning The term of the Framework Agreement is 15 years, renewable for are at an early stage and as a result, further engineering work and periods of one year successively until all obligations under the required validation by Brazilian authorities could lead to material Framework Agreement have been performed. Under the Framework changes to estimates in future reporting periods. Agreement, Samarco is responsible for funding Fundacao Renova's annual calendar year budget for the duration of the Framework if Samarco successfully restarts and generates sufficient cash flows Agreement. The funding amounts for each calendar year will be during the period in which the Germano decommissioning activity dependent on the remediation and compensation projects to be occurs, BHP Billiton Brasil may not be required to provide funding for undertaken in a particular year. Annual contributions may be the decommissioning. resulting in a reversal of the provision in future reviewed under the Framework Agreement. To the extent that reporting periods. Samarco does not meet its funding obligations, each of BHP Billiton Brasil and Vale has funding obligations under the Framework Agreement in proportion to its 50 per cent shareholding in Samarco. Mining and processing operations remain suspended and Samarco is currently progressing plans to resume operations, however significant uncertainties surrounding the nature and timing of ongoing future operations remain. In light of these uncertainties and based on currently available information, BHP Biliton Brasil's provision for its obligations under the Framework Agreement Programs is US$17 billion before tax and after discounting at 30 June 2019 (30 June 2018: US$1.3 billion)