Perhaps it would help to explain briefly what a provision is.

For an official definition from accounting standards see IAS 37:
http://www.iasplus.com/en/standards/standard36

or FRS 12 for UK standards:
http://www.frc.org.uk/asb/technical/standards/pub0107.html

Essentially, if something has occurred which means a company is likely to have to pay out in the future (e.g. legal proceedings which the company is likely to lose) then the company should make a provision in its accounts. This means it will record a creditor on its balance sheet and a cost in its profit and loss account.

This is an accounting entry only - no cash is spent. The company is simply recognising that it will probably have to pay cash in the future.

As a result, when considering the company`s cash flow, this cost should not be included as a cash outflow in the current year. Nonetheless we expect that it will have to be paid at some point in the future, so we would include it in our cash flow forecasts and planning for future years.

Hope this helps.

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Note added at 6 hrs (2012-06-28 14:14:39 GMT)
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I'm wondering now if I should have posted this under discussion rather than answers. I'm new to ProZ so apologies if I posted in the wrong section.