10 Trade and other receivables

The increase in trade and other receivables of €1,247 million primarily related to the Refining & Marketing segment (€657 million) and to the Gas & Power segment (€424 million).

Receivables are stated net of the valuation allowance for doubtful accounts of €1,877 million (€1,636 million at December 31, 2012):

Additions to the allowance reserve for doubtful trade receivable accounts amounted to €384 million (€164 million in 2012) and primarily related to the Gas & Power segment (€289 million).

Deductions amounted to €158 and related to the Gas & Power segment for €98 million.

At the balance sheet date, Eni had in place transactions to transfer to factoring institutions certain trade receivables without recourse for €2,533 million, due in 2014 (€2,054 million at December 31, 2012, due in 2013). Transferred receivables related to the Refining & Marketing segment (€1,389 million), the Gas & Power segment (€1,057 million), Versalis (€75 million) and Engineering & Construction (€12 million). Furthermore, Engineering & Construction transferred certain trade receivables without recourse due in 2014 for €222 million through Eni’s subsidiary Serfactoring SpA (€149 million at December 31, 2012, due in 2013).

Trade receivables amounting to €659 million were due in the Exploration & Production segment and related to hydrocarbons supplies to Egyptian State-owned companies. In order to reduce the outstanding amounts, negotiations and contacts are ongoing with the State companies’ top management and the Ministerial Authorities, in a context of stable relationships with the counterparties.

The ageing of trade and other receivables is presented below:

Trade receivables not impaired and past due primarily pertained to high-credit-rating public administrations, state-owned companies and other highly-reliable counterparties for oil, natural gas and chemical products supplies and to retail customers of the Gas & Power segment. The Gas & Power segment recorded a noticeable increase in the amounts past due by retail customers, as a consequence of the financial difficulties and the economic slowdown.

Trade receivables included amounts withheld to guarantee certain contract work in progress for €209 million (€178 million at December 31, 2012).

Trade receivables in currencies other than euro amounted to €7,600 million (€7,236 million at December 31, 2012).

Financing receivables associated with operating purposes of €998 million (€668 million at December 31, 2012) included loans granted to unconsolidated subsidiaries, joint ventures and associates to cover capital expenditure requirements for €595 million for executing industrial projects (€351 million at December 31, 2012) and cash deposits to hedge the loss provision made by Eni Insurance Ltd for €321 million (€280 million at December 31, 2012). Receivables for financial leasing amounting to €26 million at December 31, 2012 were set to zero as a result of the divestment of Finpipe GIE.

Financing receivables not associated with operating activities amounted to €126 million (€1,153 million at December 31, 2012) and related to: (i) restricted deposits in escrow for €92 million of Eni Trading & Shipping SpA (€93 million at December 31, 2012) of which €82 million with Citigroup Global Markets Ltd and €8 million with BNP Paribas and €2 million with ABN AMRO relating to derivatives; (ii) restricted deposits in escrow of receivables of the Engineering & Construction segment for €25 million (same amount as of December 31, 2012). The decrease in financing receivables not associated with operating activities of €1,027 million related to: (i) the collection from Cassa Depositi e Prestiti for €883 million as final instalment of the total consideration of €3,517 million relating to the divestment of 1,013,619,522 ordinary shares of Snam SpA; (ii) the collection from Snam SpA of residual receivables for intercompany transactions for €141 million as of December 31, 2013.

Financing receivables in currencies other than euro amounted to €598 million as of December 31, 2013 (€331 million as of December 31, 2012).

Receivables related to divesting activities of €88 million (€209 million at December 31, 2012) related to the divestment of a 3.25% interest in the Karachaganak project (equal to Eni’s 10% interest) to the Kazakh partner KazMunaiGas for €79 million. A description of the transaction is reported in Note 21 – Other non-current receivables.

Other receivables of €6,648 million (€6,751 million at December 31, 2012) included receivables of €575 million relating to the recovery of costs incurred by the Exploration & Production segment undergoing arbitration procedure (€481 million at December 31, 2012). Receivables for €333 million as of December 31, 2012 were fully collected during 2013 and they related to amounts of gas to be delivered to gas customers who pre-paid the underlying gas volumes in previous years upon activation of the take-or-pay clause.

Other receivables were as follows:

Receivables from joint venture partners in exploration and production activities included the share of the liability for defined-benefit plans of €264 million (€308 million at December 31, 2012), whereby Eni recognized the 100% – liability of all employees of the operated – joint ventures (see Note 29 – Provisions for employee benefits).

Receivables from factoring arrangements of €121 million (€130 million at December 31, 2012) related to Serfactoring SpA and consisted of advances for factoring arrangements with recourse and receivables for factoring arrangements without recourse.

Other receivables in currencies other than euro amounted to €5,672 million (€5,737 million at December 31, 2012).

Because of the short-term maturity and conditions of remuneration of trade receivables, the fair value approximated the carrying amount.

Receivables with related parties are described in Note 43 – Transactions with related parties.