26. Operating costs

The breakdown of operating costs for the period, which totalled €1,171 million (€1,106 million in 2014), is shown in the following table:

The reasons for the most significant changes are described in the “Financial review and other information” section of the Directors’ Report.

Operating costs relating to the construction and upgrading of natural gas distribution infrastructure linked to concession agreements under IFRIC 12 amounted to €321 million (€316 million in 2014) and can be broken down as follows:

Purchases, services and other costs

Purchases, services and other costs, which amounted to €782 million (€763 million in 2014), can be broken down as follows:

Costs for services, which amounted to €418 million (€434 million in 2014), related to:

Costs for the use of third-party assets, which amounted to €99 million (€89 million in 2014), can be broken down as follows:

Fees, patents and licences (€66 million) mainly concern fees paid to concessionary bodies for the operation of natural gas distribution concessions (€55 million).

Leases and rentals (€33 million) mainly relate to charges for operating leases of office buildings and occupancy of public land.

Changes in raw materials, consumables, supplies and goods (€85 million) were due essentially to withdrawals of natural gas from storage for the purpose of being sold, primarily in the transportation segment, and to a reduction in inventories caused for the most part by the development of the natural gas transportation networks (€30 million).

Net utilisation of the provision for risks and charges (€11 million) refers mainly to the related net utilisation of the provision for litigation. For more details about the change in provisions for risks and charges, please see Note 19 “Provisions for risks and charges”.

Net accruals to the provision for impairment losses (€31 million) relate mainly to the transportation segment and concern the write-down of the nominal value of balancing service receivables following the partial payment by the Authority of receivables relating to the period from 1 December 2011 to 23 October 2012⁵².

More information on changes of the provision for impairment losses can be found in Note 8 “Trade and other receivables”.

Other expenses, which amounted to €65 million (€54 million in 2014), can be broken down as follows:

Personnel cost

Personnel cost, which amounted to €389 million (€343 million in 2014), can be broken down as follows:

Employee benefits (€41 million) refer mainly to expenses associated with the closure of the Gas Fund pursuant to Law 125 of 6 August 2015 (€35 million)⁵³.

Other expenses (€28 million) related mainly to defined-contribution plans.

A description of employee benefits can be found in Note 20 “Provisions for employee benefits”.

Average number of employees

The average number of payroll employees included in the scope of consolidation, broken down by status, is as follows:

The average number of employees is calculated on the basis of the monthly number of employees for each category.

The number of personnel in service at 31 December 2015 was 6,303 (6,072 at 31 December 2014), an increase of 231.

Remuneration due to key management personnel

The remuneration due to persons with powers and responsibilities for the planning, management and control of the Company, i.e. executive and non-executive directors, general managers and managers with strategic responsibilities (“key management personnel”), in office at 31 December 2015, amounted to €6 million (the same as in 2014) and breaks down as follows:

Remuneration due to directors and statutory auditors

Remuneration due to directors totalled €4 million and remuneration due to statutory auditors totalled €0.2 million (Article 2427, no 16 of the Italian Civil Code). This remuneration includes emoluments and any other amounts relating to pay, pensions and healthcare due for the performance of duties as a director or statutory auditor giving rise to a cost for the Company, even if not subject to personal income tax.