4 Expenses and other income


	2018			2017			2016
	US$M			US$M			US$M
Employee benefits expense:
Wages, salaries and redundancies		3,653			3,392			3,324
Employee share awards		123			105			140
Social security costs		4			3			2
Pension and other post-retirement obligations		292			273			221
Less employee benefits expense classified as exploration and evaluation expenditure		(82	)		(79	)		(82	)
Changes in inventories of finished goods and work in progress		(142	)		(743	)		287
Raw materials and consumables used		4,389			3,830			3,985
Freight and transportation		2,294			1,786			1,648
External services		5,217			4,341			4,370
Third party commodity purchases		1,452			1,151			994
Net foreign exchange (gains)/losses		(93	)		103			(153	)
Government royalties paid and payable		2,168			1,986			1,349
Exploration and evaluation expenditure incurred and expensed in the current period		641			610			419
Depreciation and amortisation expense		6,288			6,184			6,210
Net impairments:
Property, plant and equipment		318			160			170
Goodwill and other intangible assets		14			33			16
Available for sale financial assets		1			–			–
Operating lease rentals		421			391			372
All other operating expenses		1,078			989			819

Total expenses		28,036			24,515			24,091

Losses/(Gains) on disposal of property, plant and equipment		10			(286	)		20
Other income		(257	)		(376	)		(452	)

Total other income		(247	)		(662	)		(432	)

Other income is generally income earned from transactions outside the course of the Group’s ordinary activities and may include certain management fees from non-controlling interests and joint venture arrangements, dividend income, royalties, commission income and gains or losses on divestment of subsidiaries or operations.

Recognition and measurement

Income is recognised when it is probable that the economic benefits associated with a transaction will flow to the Group and they can be reliably measured. Dividends are recognised upon declaration.