27.

OPERATING COSTS AND EXPENSES


	2017			2016		2015
Personnel (a)		1,627			1,643		1,435
Employees’ and managers’ profit sharing		5			7		137
Post-retirement benefits – Note 23		(229	)		345		156
Materials		61			58		154
Raw materials and inputs for production of energy		10			—		—
Outsourced services (b)		974			867		899
Energy bought for resale (c)		10,919			8,273		9,542
Depreciation and amortization		850			834		835
Operating provisions (d)		854			704		1,401
Charges for use of the national grid		1,174			947		999
Gas bought for resale		1,071			878		1,051
Construction costs (e)		1,119			1,193		1,252
Other operating expenses, net (f)		383			155		426

		18,818			15,904		18,287

a)	Personnel expenses

Programmed Voluntary Retirement Plan (PDVP)

In March 2017, the Company approved the 2017 Employee Voluntary Severance Program (‘the 2017 PDVP’). Those eligible to take part were any employees who have worked with Cemig for 25 years or more by December 31, 2017. The period for acceptance of the 2017 PDVP was April 3 2017, through October 17, 2017. It provided for payment of an additional premium of five monthly salaries to employees who joined in April 2017, and resigned the Company in May 2017. The premium diminished progressively depending on the month of acceptance. Thus, for employees who adhered to the program only in August 2017, for voluntary retirement in September 2017, the corresponding premium payment was only one month’s salary. For those who joined as from September 1, 2017, there was no premium. The program also paid the standard legal severance payments – including: payment for the period of notice, and especially, an amount equal to the ‘penalty’ payment of 40% of the Base Value of the employee’s FGTS fund, as well as the other payments specified by the legislation. On December 31, 2017 the amount appropriated as expense for the 2017 PDVP, including severance amounts, was R$ 214 , corresponding to acceptance, up to that date, by 1,189 employees.

In 2016, the amount appropriated to Personnel as expense on the PDVP in effect at that time was R$ 93.

b)	Outsourced services


	2017		2016		2015
Meter reading and bill delivery		142		140		122
Communication		66		55		64
Maintenance and conservation of electrical facilities and equipment		266		246		238
Building conservation and cleaning		108		97		100
Contracted labor		15		13		6
Freight and airfares		8		7		10
Accommodation and meals		13		13		17
Security services		23		25		28
Consultancy		16		15		17
Maintenance and conservation of furniture and utensils		4		4		4
Information technology		62		49		42
Maintenance and conservation of vehicles		2		8		11
Disconnection and reconnection		35		7		26
Environment		11		19		22
Legal services		22		26		21
Legal procedural costs		3		4		3
Tree pruning		21		14		23
Cleaning of power line pathways		16		8		30
Copying and legal publications		23		16		14
Inspection of customer units		1		1		4
Printing of tax invoices and energy bills		3		3		4
Other expenses		114		97		93

		974		867		899

c)	Energy purchased for resale


	2017			2016			2015
Supply from Itaipu Binacional		1,243			1,144			1,734
Physical guarantee quota contracts		461			537			252
Quotas for Angra I and II nuclear plants		244			217			200
Spot market		1,498			761			935
Proinfa Program		303			323			253
‘Bilateral’ contracts		385			292			326
Energy acquired in Regulated Market auctions		3,555			2,540			3,978
Energy acquired in the Free Market		4,283			3,279			2,762
Pasep and Cofins credits		(1,053	)		(820	)		(898	)

		10,919			8,273			9,542

d)	Operating provisions (reversals)


	2017			2016			2015
Estimated losses on doubtful receivables		248			382			175
Estimated losses on other accounts receivables		27			40			—
Contingency provisions (reversals)
Labor claims		206			120			4
Civil		27			30			22
Tax		7			2			(4	)
Environmental		—			—			(1	)
Regulatory		(3	)		—			10
Other		(6	)		31			(3	)

		231			183			28

		506			605			203

Adjustment for losses
Put option – Parati (Note 30)		231			55			1,079
Put option – SAAG (Note 30)		116			49			119
Put option – Sonda (Note 30)		1			(5	)		—

		348			99			1,198

		854			704			1,401

Construction cost


	2017		2016		2015
Personnel and managers		36		58		65
Materials		550		534		521
Outsourced services		406		448		504
Others		127		153		162

		1,119		1,193		1,252

Other operating expenses (revenues), net


	2017			2016			2015
Leasing and rentals		103			112			102
Advertising		30			13			11
Own consumption of energy		24			22			21
Subsidies and donations		19			17			31
Paid concession		3			3			7
Insurance		8			9			9
CCEE annual charge		8			8			8
Net loss (gain) on deactivation and disposal of assets		193			112			30
Forluz – Administrative running cost		26			25			22
Collection agents		71			70			71
Gain on disposal, Taesa		(207	)		(181	)		—
Gain on disposal, Transchile		—			(134	)		—
Loss on investment		9			—			—
Other expenses		96			79			114

		383			155			426

Operating leasing

The Company has operating lease contracts relating to, mainly, vehicles and buildings used in its operations. Related amounts are not material in relation to the total costs of the Company.