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Note 29 – Other operating expenses
Other operating expenses increased 437 million euros compared to 2010 and are composed as follows:
(millions of euros) 2011 2010
Impairments and expenses in connection with credit management 533 478
Provision charges 128 80
TLC operating fees and charges 675 484
Indirect duties and taxes 349 200
Penalties, settlement compensation and administrative fines 41 105
Association dues and fees, donations, scholarships and traineeships 23 24
Sundry expenses 110 51
Total 1,859 1,422
of which, included in the supplementary disclosure on financial instruments 533 478
Further details on Financial Instruments are provided in the Note “Supplementary disclosure on financial
instruments”.
Other operating expenses grew 437 million euros compared to 2010 largely on account of the
consolidation of the Argentina Business Unit for the full year 2011 (+248 million euros, including a
negative exchange 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).
Note 30 – Internally generated assets
Internally generated assets increased 22 million euros compared to 2010 and are composed of the
following:
(millions of euros) 2011 2010
Intangible assets with a finite useful life 288 287
Tangible assets owned 281 260
Total 569 547
Internally generated assets mainly include labor costs of dedicated technical staff for software
development and work in connection with the executive design, construction and testing of network
installations.
Telecom Italia Group
Consolidated Financial Statements
Note 29 – Other operating expenses 255