BT 2016 Annual Report Download - page 179

185
Overview The Strategic Report Governance Financial statements Additional information
5. Operating costs
Year ended 31 March Notes
2016
£m
2015
£m
2014
£m
Operating costs by nature
Staff costs:
Wages and salaries 3,689 3,574 3,736
Social security costs 398 440 444
Other pension costs 20 494 467 463
Share-based payment expense 22 58 70 60
Total staff costs 4,639 4,551 4,703
Own work capitalised (726) (691) (600)
Net staff costs 3,913 3,860 4,103
Net indirect labour costsa 281 324 452
Net labour costs 4,194 4,184 4,555
Payments to telecommunications operators 2,186 2,144 2,472
Property and energy costs 1,040 968 959
Network operating and IT costs 610 605 591
TV programme rights charges 544 330 203
Other operating costs 3,970 3,573 3,672
Other operating income (215) (224) (281)
Depreciation of property, plant and equipment
Owned assets 13 1,999 1,997 2,090
Held under finance leases 13 10 11 22
Amortisation of intangible assets 12 621 530 583
Total operating costs before specific items 14,959 14,118 14,866
Specific items 8348 381 276
Total operating costs 15,307 14,499 15,142
Operating costs before specific items include the following:
Leaver costsb 109 8 14
Research and development expenditurec 574 580 680
Operating lease charges 441 388 390
Foreign currency gains (1) (1) (2)
Government grants (6) (7) (10)
a Net of capitalised indirect labour costs of £430m (2014/15: £451m, 2013/14: £396m).
b Leaver costs are included within wages and salaries and social security costs, except for leaver costs of £nil (2014/15: £237m, 2013/14: £175m) associated with restructuring, which have been recorded
as a specific item.
c Research and development expenditure reported in the income statement, includes amortisation of £501m (2014/15: £493m, 2013/14: £510m) in respect of internally developed computer software
and operating expenses of £73m (2014/15: £87m, 2013/14: £170m). In addition, the group capitalised software development costs of £399m (2014/15: £421m, 2013/14: £365m). Prior year
amounts are presented on a consistent basis.
Compensation of key management personnel
Key management personnel comprise executive and non-executive directors and members of the Operating Committee . Compensation of
key management personnel is shown in the table below:
Year ended 31 March
2016
£m
2015
£m
2014
£m
Short-term employee benefits 9.4 9.7 11.1
Post employment benefits 1.1 1.1 1.0
Share-based payments 5.5 5.7 6.4
Termination benefits 0.6 0.5 –
16.6 17.0 18.5
More detailed information concerning directors’ remuneration, shareholdings, pension entitlements, share options and other long-term
incentive plans is shown in the audited part of the Report on Directors’ Remuneration (see pages 128 to 148), which forms part of
these consolidated financial statements.