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– lower expenses of 246 million euros in connection with the mobility procedure under Law
223/91. It should be recalled in particular that employee benefits expenses in 2010 included
expenses for 258 million euros relating to the start of the mobility procedure under Law 223/91
by the Parent, Telecom Italia, SSC, TI Sparkle, Olivetti S.p.A. and Olivetti I-Jet. In 2011, the
provisions were adjusted by another 12 million euros, of which 9 million euros is for the Parent,
Telecom Italia, and 3 million euros for SSC.
• Other operating expenses: grew 437 million euros compared to 2010, largely on account of the
entry of the Argentina Business Unit in the scope of consolidation for the full year 2011
(+248 million euros, including a negative exchange rate effect of 8 million euros), the increase in
the Brazil Business Unit (+159 million euros) and the Domestic Business Unit (+69 million euros).
In particular:
– writedowns and expenses in connection with credit management include mainly
397 million euros (317 million euros in 2010) referring to the Domestic Business Unit,
100 million euros (133 million euros in 2010) to the Brazil Business Unit and
29 million euros to the Argentina Business Unit;
– provision charges recorded for pending disputes refer mainly to 60 million euros
(18 million euros in 2010) of the Brazil Business Unit, 50 million euros (53 million euros in
2010) of the Domestic Business Unit, and 17 million euros of the Argentina Business Unit;
– telecommunications operating fees and charges comprise 554 million euros
(412 million euros in 2010) referring primarily to the Brazil Business Unit, to the Argentina
Business Unit for 61 million euros and to the Domestic Business Unit for 58 million euros
(56 million euros in 2010).
Details of the main line items which impacted EBITDA are presented in the following tables:
Acquisition of goods and services
(millions of euros) 2011 2010 Change
Purchases of goods 2,525 1,568 957
Portion of revenues to be paid to other operators and interconnection
costs
4,232 4,275 (43)
Commercial and advertising costs 2,259 2,100 159
Power, maintenance and outsourced services 1,618 1,258 360
Rent and leases 647 594 53
Other expenses 1,578 1,588 (10)
Total acquisition of goods and services 12,859 11,383 1,476
% of Revenues 42.9 41.3 1.6pp
Employee benefits expenses
(millions of euros) 2011 2010 Change
Employee benefits expenses - Italy 3,081 3,571 (490)
Ordinary employee expenses and costs – excluding actuarial (gains)
losses 3,186 3,317 (131)
Actuarial (gains) losses relating to employee severance indemnities (117) (4) (113)
Expenses for the mobility procedure under Law 231/1991 12 258 (246)
Employee benefits expenses – Outside Italy 836 450 386
Total employee benefits expenses 3,917 4,021 (104)
% of Revenues 13.1 14.6 (1.5)pp
Report on Operations Review of Operating and Financial Performance - Telecom Italia Group 19