NOTE 41—OTHER INFORMATION
a) Exchange rates used to convert the financial statements of foreign operations (*)
| Year-end exchange rates (statements
of financial position items) |
Average exchange
rates for the year (income statements and statements of cash flows items) |
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(Local Currency against |
12/31/2017 | 12/31/2016 | 12/31/2015 | Year 2017 | Year 2016 | Year 2015 | ||||||||||||||||||
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Europe |
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BGN Bulgarian Lev |
1.95580 | 1.95580 | 1.95580 | 1.95580 | 1.95580 | 1.95580 | ||||||||||||||||||
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CZK Czech Koruna |
25.53500 | 27.02100 | 27.02300 | 26.32656 | 27.03443 | 27.28277 | ||||||||||||||||||
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CHF Swiss Franc |
1.17020 | 1.07390 | 1.08350 | 1.11171 | 1.09004 | 1.06813 | ||||||||||||||||||
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TRY Turkish Lira |
4.54640 | 3.70720 | 3.17650 | 4.12109 | 3.34284 | 3.02349 | ||||||||||||||||||
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GBP Pound Sterling |
0.88723 | 0.85618 | 0.73395 | 0.87640 | 0.81905 | 0.72612 | ||||||||||||||||||
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RON Romanian Leu |
4.65850 | 4.53900 | 4.52400 | 4.56884 | 4.49053 | 4.44555 | ||||||||||||||||||
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RUB Russian Ruble |
69.39200 | 64.30000 | 80.67400 | 65.90160 | 74.15831 | 68.03509 | ||||||||||||||||||
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North America |
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USD U.S. Dollar |
1.19930 | 1.05410 | 1.08870 | 1.12946 | 1.10666 | 1.10970 | ||||||||||||||||||
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Latin America |
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VEF Venezuelan Bolivar |
16.19055 | 14.23035 | 14.69745 | 15.18018 | 14.90133 | 13.71398 | ||||||||||||||||||
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BOB Bolivian |
8.28720 | 7.28383 | 7.52292 | 7.80453 | 7.64702 | 7.66808 | ||||||||||||||||||
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PEN Peruvian Nuevo Sol |
3.88540 | 3.54020 | 3.70833 | 3.68247 | 3.73505 | 3.53192 | ||||||||||||||||||
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ARS Argentinean Peso |
22.93100 | 16.74880 | 14.09720 | 18.73314 | 16.33204 | 10.26890 | ||||||||||||||||||
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CLP Chilean Peso |
737.29000 | 704.94500 | 772.71300 | 732.28973 | 748.49536 | 726.01073 | ||||||||||||||||||
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COP Colombian Peso |
3,580.19000 | 3,169.49000 | 3,456.01000 | 3,334.88410 | 3,376.68116 | 3,046.29559 | ||||||||||||||||||
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BRL Brazilian Real |
3.96728 | 3.43542 | 4.25116 | 3.60584 | 3.85935 | 3.69727 | ||||||||||||||||||
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Other countries |
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ILS Israeli Shekel |
4.16350 | 4.04770 | 4.24810 | 4.06091 | 4.24812 | 4.31323 | ||||||||||||||||||
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| (*) | Source: data processed by the European Central Bank, Reuters and major Central Banks. |
b) Research and development
Expenditures for research and development activities are represented by external costs, labor costs of dedicated staff and depreciation and amortization. Details are as follows:
| 2017 | 2016 | 2015 | ||||||||||
| (millions of euros) | ||||||||||||
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Research and development costs expensed during the year |
43 | 44 | 52 | |||||||||
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Development costs capitalized |
1,949 | 1,704 | 1,668 | |||||||||
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Total research and development costs (expensed and capitalized) |
1,992 | 1,748 | 1,720 | |||||||||
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The increase in 2017 is mainly related to engineering activities and to the diffusion and development of new generation networks, such as LTE and NGAN in Italy and 4G and LTE in Brazil.
Moreover, in the 2017 separate consolidated income statement, amortization charges are recorded for development costs, capitalized during the year and in prior years, for an amount of 819 million euros in 2017, 731 million euros in 2016 and 660 million euros in 2015.
c) Operating leases
In accordance with IAS 17, the Group considers operating leases to be non-cancellable when they are only cancellable upon the occurrence of some remote contingencies, with the permission of the lessor, or upon payment by the lessee of such an additional amount (penalty) that continuation of the lease is reasonably certain at the inception of the lease.
In particular:
Revenue related
The Group has entered into agreements for line lease and hosting which cannot be canceled. At December 31, 2017 and 2016 the amount of lease installments receivables is as follows:
| At December 31, 2017 |
At December 31, 2016 |
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| (millions of euros) | ||||||||
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Within 1 year |
124 | 118 | ||||||
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From 2 to 5 years |
238 | 247 | ||||||
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Beyond 5 years |
98 | 128 | ||||||
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Total |
460 | 493 | ||||||
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Expense related
The Group has entered into agreements for lease of properties, vehicle rental and hosting which cannot be canceled. At December 31, 2017 and 2016 the amount of lease installments payables is as follows:
| At December 31, 2017 |
At December 31, 2016 |
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| (millions of euros) | ||||||||
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Within 1 year |
177 | 175 | ||||||
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From 2 to 5 years |
298 | 287 | ||||||
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Beyond 5 years |
60 | 39 | ||||||
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Total |
535 | 501 | ||||||
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The TIM Group has entered into non-cancelable operating leases on properties, vehicle rental agreements, rental agreements for IT products, equipment and devices and hosting contracts on sites owned by third parties.
The perimeter shown excludes leases classified as finance leases (mainly real estate leases and leases on equipment and industrial vehicles) and leases or lease periods considered cancelable. In this regard, for example, leasing practices in Brazil envisage clauses permitting the early termination of the lease without the application of additional charges.