Tiscali 2008 Annual Report Download - page 78

voice revenues. In detail, the increase in revenues in the UK
is essentially attributable to the merger of the Pipex division
on 13 September 2007.
Other income (note 2)
EUR (000) 31.12.2008 31.12.2007
Other income 12,448 5,192
Total 12,448 5,192
Other income totals EUR 12.4 million and is mainly attributable
to the re-calculation of the debit for former VNL shareholders
amounting to EUR 6 million, the freeing up of a provision for
legal disputes on Pipex totalling EUR 1.6 million and the freeing
up of the portion of the capital gain on the disposal of Sa Illetta
building for EUR 2.1 million.
Purchase of materials and outsourced services (note 3)
EUR (000) 31.12.2008 31.12.2007
Purchase of raw materials and goods for resale 1,000 (996)
Line/traffic rental and interconnection costs 459,203 413,484
Costs for use of third party assets 17,777 16,126
Portal services 70,053 46,874
Marketing costs 84,674 87,572
Other services 77,778 70,228
Total 710,484 633,287
The increase in costs with respect to the previous year reflects
the rise in revenues, as well as the acquisition of the Pipex
broadband and voice activities in September 2007.
In detail, the item Costs for portal services, which rose by
around 50% with respect to the previous year, includes costs
for the acquisition of contents for EUR 21.7 million, portal costs
for EUR 6.4 million and costs for the call centre totalling EUR
41.9 million (EUR 30.1 million attributable to the UK
subsidiaries and EUR 11.8 million to Tiscali Italia S.p.A).
Both the increase in costs for line rentals/traffic and
interconnection (+ 11%), and the rise in the item Other services
(+ 10.7%), reflect the increase in the volume of sales revenues.
Payroll and related costs (note 4)
EUR (000) 31.12.2008 31.12.2007
Wages and salaries 59,547 68,838
Other personnel costs 31,544 21,127
Total 91,090 89,965
The total of this item does not disclose any significant changes with
respect to 2007, despite the increase due to the Pipex acquisition
and the effects of the reorganization process started in 2007.
The items Wages and salaries and Other personnel costs were
affected by the reclassifications made in order to improve the
representation with respect to the same items last year.
At 31 December 2008, Tiscali S.p.A. had 1,561 employees.
The breakdown by category and the corresponding balance at
31 December 2007 are presented below.
Number of employees 2008 2007
Executives 80 100
Middle managers 278 311
Office workers 1,203 1,521
Blue collar workers - 3
Total 1,561 1,935
Stock option plan cost (note 5)
EUR (000) 31.12.2008 31.12.2007
Stock option plan cost 7,607 11,697
Total 7,607 11,697
The amount reflects the provision made for charges relating to
the stock option plan of the UK (EUR 4.8 million) and Italian
subsidiaries (EUR 2.9 million) and includes the effects of the
acceleration of the plan reserved for the former Chief Executive
Officer and the former Administration and Finance Director who
maintained their assigned rights even after leaving the Group.
Other operating charges (income) (note 6)
The table below shows a breakdown of these costs:
EUR (000) 31.12.2008 31.12.2007
Other operating expenses 4,276 2,622
Contingencies, capital losses and other non-recurrent costs (6,805) 3,694
Total (2,529) 6,316
The item Contingencies, capital losses and other non-recurrent
costs mainly includes the release of the risk provision provided
in relation to the German subsidiaries at 31 December 2007
which is partially in excess with respect to the estimates made
at the time of registration, along with amounts not receivable
on liabilities recorded by the same companies.
Writedown of receivables from customers (note 7)
EUR (000) 31.12.2008 31.12.2007
Writedowns of receivables from customers 34,327 27,144
Total 34,327 27,144
The writedown of receivables from customers represents around
3.5% of revenues, up with respect to the percentage in the
same period of 2007 (3%).
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CONSOLIDATED FINANCIAL STATEMENTS AND EXPLANATORY NOTES