Form 6-K
Table of Contents

 

 

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 6-K

 

 

Report of Foreign Issuer

Pursuant to Rule 13a-16 or 15d-16

of the Securities Exchange Act of 1934

For the month of May, 2018

Commission File Number: 001-12102

 

 

YPF Sociedad Anónima

(Exact name of registrant as specified in its charter)

 

 

Macacha Güemes 515

C1106BKK Buenos Aires, Argentina

(Address of principal executive office)

 

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:

Form 20-F  ☒            Form 40-F  ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):

Yes  ☐            No  ☒

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):

Yes  ☐            No  ☒

 

 

 


Table of Contents

LOGO

YPF SOCIEDAD ANONIMA

CONDENSED INTERIM CONSOLIDATED

FINANCIAL STATEMENTS AS OF MARCH 31, 2018

AND COMPARATIVE INFORMATION (UNAUDITED)


Table of Contents

English translation of the financial statements originally filed in Spanish with the Argentine Securities Commission (“CNV”).

In case of discrepancy, the financial statements filed with the CNV prevail over this translation

 

YPF SOCIEDAD ANONIMA

CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF MARCH 31, 2018 AND COMPARATIVE INFORMATION (UNAUDITED)

   LOGO

CONTENT

 

Note

 

Description

   Page  
  Glossary of terms      1  
  Legal Information      2  
  Condensed interim consolidated statements of financial position      3  
  Condensed interim consolidated statements of comprehensive income      4  
  Condensed interim consolidated statements of changes in shareholders’ equity      5  
  Condensed interim consolidated statements of cash flow      7  
  Notes to the condensed interim consolidated financial statements:   

1

  General information, structure and organization of the business of the Group      8  

2

  Basis of preparation of the condensed interim consolidated financial statements      9  

3

  Seasonality of operations      12  

4

  Acquisitions and dispositions      13  

5

  Financial risk management      14  

6

  Segment information      15  

7

  Financial instruments by category      17  

8

  Intangible assets      18  

9

  Property, plant and equipment      18  

10

  Investments in associates and joint ventures      20  

11

  Inventories      24  

12

  Other receivables      24  

13

  Trade receivables      24  

14

  Cash and cash equivalents      24  

15

  Provisions      25  

16

  Income Tax      26  

17

  Loans      27  

18

  Other liabilities      29  

19

  Accounts payable      29  

20

  Revenues      29  

21

  Costs      31  

22

  Expenses by nature      32  

23

  Other net operating results      33  

24

  Net financial results      33  

25

  Investments in joint operations      33  

26

  Shareholders’ equity      34  

27

  Earnings per share      34  

28

  Contingent assets and liabilities      34  

29

  Contractual commitments      35  

30

  Main regulations and others      35  

31

  Balances and transactions with related parties      38  

32

  Employee benefit plans and similar obligations      40  

33

  Assets and liabilities in currencies other than the Argentine peso      41  

34

  Subsequent events      42  


Table of Contents

English translation of the financial statements originally filed in Spanish with the Argentine Securities Commission (“CNV”).

In case of discrepancy, the financial statements filed with the CNV prevail over this translation

 

YPF SOCIEDAD ANONIMA

CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF MARCH 31, 2018 AND COMPARATIVE INFORMATION (UNAUDITED)

   LOGO

GLOSSARY OF TERMS

 

Term

  

Definition

ADR    American Depositary Receipt
ADS    American Depositary Share
AESA    Subsidiary A-Evangelista S.A.
AFIP    Argentine Tax Authority
Annual consolidated financial statements    Consolidated financial statements as of December 31, 2017
Associate    Company over which YPF has significant influence as provided for in IAS 28
BONAR    Argentine public bonds
CDS    Associate Central Dock Sud S.A.
CGU    Cash-Generating Units
CIMSA    Subsidiary Compañía de Inversiones Mineras S.A.
CNDC    Argentine Antitrust Authority
CNV    Argentine Securities Commission
CSJN    Argentine Supreme Court
Condensed interim consolidated financial statements    Condensed interim consolidated financial statements as of March 31, 2018
Eleran    Subsidiary Eleran Inversiones 2011 S.A.U.
ENARGAS    Argentine National Gas Regulatory Authority
FACPCE    Argentine Federation of Professional Councils in Economic Sciences
Group    YPF and its subsidiaries
IAS    International Accounting Standard
IASB    International Accounting Standards Board
IFRS    International Financial Reporting Standard
IDS    Associate Inversora Dock Sud S.A.
IPIM    Internal Wholesale Price Index (Índice de Precios Internos al por Mayor)
IVA    Value Added Tax
Joint venture    Company jointly owned by YPF as provided for in IFRS 11
JO    Joint operation
LGS    Argentine General Corporations Law No. 19,550 (T.O. 1984), as amended
MEGA    Joint venture Compañía Mega S.A.
MEM    Wholesale Electricity Market
Metroenergía    Subsidiary Metroenergía S.A.
Metrogas    Subsidiary Metrogas S.A.
MINEM    Ministry of Energy and Mining
MMBtu    Million British thermal units
NO    Negotiable Obligations
Oiltanking    Associate Oiltanking Ebytem S.A.
Oldelval    Associate Oleoductos del Valle S.A.
OPESSA    Subsidiary Operadora de Estaciones de Servicios S.A.
OTA    Associate Oleoducto Trasandino (Argentina) S.A.
OTC    Associate Oleoducto Trasandino (Chile) S.A.
PEN    National Executive Power
Profertil    Joint Venture Profertil S.A.
Refinor    Joint Venture Refinería del Norte S.A.
SEC    U.S. Securities and Exchange Commission
Subsidiary    Company controlled by YPF in accordance with the provisions of IFRS 10
Termap    Associate Terminales Marítimas Patagónicas S.A.
US$    U.S. dollar
US$/Bbl    U.S. dollar per barrel
Y-GEN I    Joint venture Y-GEN Eléctrica S.R.L.
Y-GEN II    Joint venture Y-GEN Eléctrica II S.R.L.
YPF Brasil    Subsidiary YPF Brasil Comércio Derivado de Petróleo Ltda.
YPF Chile    Subsidiary YPF Chile S.A.
YPF EE    Joint Venture YPF Energía Eléctrica S.A.
YPF Gas    Associate YPF Gas S.A.
YPF Holdings    Subsidiary YPF Holdings, Inc.
YPF International    Subsidiary YPF International S.A.
YPF or the Company    YPF Sociedad Anónima
YTEC    Subsidiary YPF Tecnología S.A.

 

1


Table of Contents

English translation of the financial statements originally filed in Spanish with the Argentine Securities Commission (“CNV”).

In case of discrepancy, the financial statements filed with the CNV prevail over this translation

 

YPF SOCIEDAD ANONIMA

CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF MARCH 31, 2018 AND COMPARATIVE INFORMATION (UNAUDITED)

   LOGO

 

LEGAL INFORMATION

Legal address

Macacha Güemes 515 – Ciudad Autónoma de Buenos Aires, Argentina

Fiscal year number 42

Beginning on January 1, 2018

Principal business of the Company

The Company’s purpose shall be to perform, on its own, through third parties or in association with third parties, the exploration, development and production of oil, natural gas and other minerals and refining, marketing and distribution of oil and petroleum products and direct and indirect petroleum derivatives, including petrochemicals, chemicals, including those derived from hydrocarbons, and non-fossil fuels, biofuels and their components, as well as production of electric power from hydrocarbons, through which it may manufacture, use, purchase, sell, exchange, import or export them. It shall also be the Company’s purpose to render, directly, through a subsidiary or in association with third parties, telecommunications services in all forms and modalities authorized by the legislation in force after applying for the relevant licenses as required by the regulatory framework, as well as the production, industrialization, processing, commercialization, conditioning, transportation and stockpiling of grains and products derived from grains, as well as any other activity complementary to its industrial and commercial business or any activity which may be necessary to attain its objective. In order to fulfill these objectives, the Company may set up, become associated with or have an interest in any public or private entity domiciled in Argentina or abroad, within the limits set forth in the Bylaws.

Filing with the Public Registry

Bylaws filed on February 5, 1991 under No. 404, Book 108, Volume “A”, Sociedades Anónimas, with the Public Registry of Buenos Aires City, in charge of the Argentine Registrar of Companies (Inspección General de Justicia); and Bylaws in substitution of previous Bylaws, filed on June 15, 1993, under No. 5109, Book 113, Volume “A”, Sociedades Anónimas, with the above mentioned Registry.

Duration of the Company

Through June 15, 2093.

Last amendment to the Bylaws

April 29, 2016 registered with the Argentine Registrar of Companies (Inspección General de Justicia) on December 21, 2016 under No. 25,244, Book 82 of Corporations.

Optional Statutory Regime related to Compulsory Tender Offer provided by Decree No. 677/2001 art. 24

Not incorporated (modified by Law No. 26,831).

Capital structure

393,312,793 shares of common stock, Argentine pesos 10 par value and 1 vote per share.

Subscribed, paid-in and authorized for stock exchange listing (in pesos)

3,933,127,930

 

2


Table of Contents

English translation of the condensed interim consolidated financial statements originally filed in Spanish with the Argentine Securities Commission (“CNV”). In case of discrepancy, the condensed interim consolidated financial statements filed with the CNV prevail over this translation

 

YPF SOCIEDAD ANONIMA

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

AS OF MARCH 31, 2018 AND DECEMBER 31, 2017 (UNAUDITED)

   LOGO

 

(Amounts expressed in millions of Argentine Pesos)

 

            March 31,      December 31,  
     Notes      2018      2017  

ASSETS

        

Noncurrent Assets

        

Intangible assets

     8        10,662        9,976  

Property, plant and equipment

     9        377,055        354,443  

Investments in associates and joint ventures

     10        24,108        6,045  

Assets held for disposal

     4        —          8,823  

Deferred income tax assets, net

     16        742        588  

Other receivables

     12        1,508        1,335  

Trade receivables

     13        13,967        2,210  
     

 

 

    

 

 

 

Total noncurrent assets

        428,042        383,420  
     

 

 

    

 

 

 

Current Assets

        

Inventories

     11        29,230        27,149  

Contract assets

     20        254        142  

Other receivables

     12        18,196        12,684  

Trade receivables

     13        34,192        40,649  

Investment in financial assets

     7        8,834        12,936  

Cash and cash equivalents

     14        33,511        28,738  
     

 

 

    

 

 

 

Total current assets

        124,217        122,298  
     

 

 

    

 

 

 

TOTAL ASSETS

        552,259        505,718  
     

 

 

    

 

 

 

SHAREHOLDERS’ EQUITY

        

Shareholders’ contributions

        10,457        10,402  

Reserves, other comprehensive income and retained earnings

        161,171        141,893  
     

 

 

    

 

 

 

Shareholders’ equity attributable to shareholders of the parent company

        171,628        152,295  
     

 

 

    

 

 

 

Non-controlling interest

        157        238  
     

 

 

    

 

 

 

TOTAL SHAREHOLDERS’ EQUITY

        171,785        152,533  
     

 

 

    

 

 

 

LIABILITIES

        

Noncurrent Liabilities

        

Provisions

     15        59,831        54,734  

Liabilities associated with assets held for disposal

     4        —          4,193  

Deferred income tax liabilities, net

     16        49,292        37,645  

Contract liabilities

     20        1,509        1,470  

Taxes payable

        1,730        220  

Loans

     17        164,950        151,727  

Other liabilities

     18        293        277  

Accounts payable

     19        144        185  
     

 

 

    

 

 

 

Total noncurrent liabilities

        277,749        250,451  
     

 

 

    

 

 

 

Current Liabilities

        

Provisions

     15        2,602        2,442  

Income tax liability

        244        191  

Contract liabilities

     20        2,292        1,460  

Taxes payable

        7,548        6,879  

Salaries and social security

        3,281        4,132  

Loans

     17        37,616        39,336  

Other liabilities

     18        403        2,383  

Accounts payable

     19        48,739        45,911  
     

 

 

    

 

 

 

Total current liabilities

        102,725        102,734  
     

 

 

    

 

 

 

TOTAL LIABILITIES

        380,474        353,185  
     

 

 

    

 

 

 

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY

        552,259        505,718  
     

 

 

    

 

 

 

Accompanying notes are an integral part of these condensed interim consolidated financial statements.

 

3


Table of Contents

English translation of the condensed interim consolidated financial statements originally filed in Spanish with the Argentine Securities Commission (“CNV”). In case of discrepancy, the condensed interim consolidated financial statements filed with the CNV prevail over this translation

 

YPF SOCIEDAD ANONIMA

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

FOR THE THREE-MONTH PERIOD ENDED MARCH 31, 2018 AND 2017 (UNAUDITED)

   LOGO

 

(Amounts expressed in millions of Argentine Pesos, except per share information, expressed in Pesos)

 

            For the three-month period
ended March 31,
 
     Notes      2018     2017  

Revenues

     20        75,823       57,003  

Costs

     21        (63,438     (45,798
     

 

 

   

 

 

 

Gross profit

        12,385       11,205  
     

 

 

   

 

 

 

Selling expenses

     22        (5,181     (3,887

Administrative expenses

     22        (2,354     (1,790

Exploration expenses

     22        (323     (593

Other net operating results

     23        12,827       (424
     

 

 

   

 

 

 

Operating profit

        17,354       4,511  
     

 

 

   

 

 

 

Income from equity interests in associates and joint ventures

     10        214       22  

Financial income

     24        7,899       1,612  

Financial loss

     24        (8,923     (8,848

Other financial results

     24        1,142       75  
     

 

 

   

 

 

 

Net financial results

     24        118       (7,161
     

 

 

   

 

 

 

Net profit / (loss) before income tax

        17,686       (2,628
     

 

 

   

 

 

 

Income tax

     16        (11,700     2,820  
     

 

 

   

 

 

 

Net profit for the period

        5,986       192  
     

 

 

   

 

 

 

Net profit for the period attributable to:

       

— Shareholders of the parent company

        6,067       25  

— Non-controlling interest

        (81     167  

Profit per share attributable to shareholders of the parent company basic and diluted

     27        15.47       0.06  

Other comprehensive income

       

Translation differences from investments in subsidiaries, associates and joint ventures(1)

        (398     159  

Translation differences from YPF (2)

        12,335       (3,802

Translation difference reversed to profit for the period(3)

        1,572       —    
     

 

 

   

 

 

 

Total other comprehensive income / (loss) for the period(4)

        13,509       (3,643
     

 

 

   

 

 

 

Total comprehensive income / (loss) for the period

        19,495       (3,451
     

 

 

   

 

 

 

 

(1) Will be reversed to net income at the moment of the sale of the investment or full or partial reimbursement of the capital.
(2) Will not be reversed to net income.
(3) Corresponds to reversal to net profit for the period, for the partial disposal of the investment in YPF EE. See Note 4.
(4) Entirely assigned to the parent company’s shareholders.

Accompanying notes are an integral part of these condensed interim consolidated financial statements.

 

4


Table of Contents

English translation of the condensed interim consolidated financial statements originally filed in Spanish with the Argentine Securities Commission (“CNV”). In case of discrepancy, the condensed interim consolidated financial statements filed with the CNV prevail over this translation

 

YPF SOCIEDAD ANONIMA

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

FOR THE THREE-MONTH PERIOD ENDED MARCH 31, 2018 AND 2017 (UNAUDITED)

   LOGO

 

(Amounts expressed in millions of Argentine Pesos)

 

    For the three-month period ended March 31, 2018  
    Shareholders’ contributions  
    Subscribed
capital
    Adjustment to
contributions
    Treasury
shares
    Adjustment
to treasury
shares
    Share-based
benefit plans
    Acquisition cost
of treasury
shares
    Share trading
premium
    Issuance
premiums
    Total        

Balance at the beginning of the fiscal year

    3,924       6,085       9       16       36       (91     (217     640       10,402    

Modification to the balances at the beginning of the fiscal (4)

    —         —         —         —         —         —         —         —         —      
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

Balance at the beginning of the fiscal modified

    3,924       6,085       9       16       36       (91     (217     640       10,402    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

Accrual of share-based benefit plans(3)

    —         —         —         —         53       —         —         —         53    

Settlement of share-based benefit plans (2)

    —         —         —         —         (1     4       (1     —         2    

Other comprehensive income

    —         —         —         —         —         —         —         —         —      

Net income

    —         —         —         —         —         —         —         —         —      
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

Balance at the end of the period

    3,924       6,085       9       16       88       (87     (218     640       10,457    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   
    For the three-month period ended March 31, 2018  
    Reserves                 Equity attributable to        
    Legal     Future
dividends
    Investments     Purchase
of treasury
shares
    Initial IFRS
adjustment
    Other
comprehensive
income
    Retained
earnings
    Shareholders
of the parent
company
    Non-
controlling
interest
    Total
shareholders’
equity
 

Balance at the beginning of the fiscal year

    2,007       —         —         100       —         127,446       12,340       152,295       238       152,533  

Modification to the balances at the beginning of the fiscal (4)

    —         —         —         —         —         —         (298     (298     —         (298
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance at the beginning of the fiscal modified

    2,007       —         —         100       —         127,446       12,042       151,997       238       152,235  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Accrual of share-based benefit plans(3)

    —         —         —         —         —         —         —         53       —         53  

Settlement of share-based benefit plans (2)

    —         —         —         —         —         —         —         2       —         2  

Other comprehensive income

    —         —         —         —         —         13,509       —         13,509       —         13,509  

Net income

    —         —         —         —         —         —         6,067       6,067       (81     5,986  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance at the end of the period

    2,007       —         —         100       —         140,955 (1)      18,109       171,628       157       171,785  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(1) Includes 144,726 corresponding to the effect of the translation of the financial statements of YPF and (3,771) corresponding to the effect of the translation of the financial statements of investments in subsidiaries, associates and joint ventures with functional currencies other than the U.S. dollar, as detailed in Note 2.b.1. to the annual consolidated financial statements.
(2) Net of employees’ income tax withholdings related to the share-based benefit plans.
(3) See Note 32.
(4) Corresponds to the change in the accounting policy described in Note 2.b.

MIGUEL ANGEL GUTIERREZ

President

 

5


Table of Contents

English translation of the condensed interim consolidated financial statements originally filed in Spanish with the Argentine Securities Commission (“CNV”). In case of discrepancy, the condensed interim consolidated financial statements filed with the CNV prevail over this translation

 

YPF SOCIEDAD ANONIMA

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

FOR THE THREE-MONTH PERIOD ENDED MARCH 31, 2018 AND 2017 (UNAUDITED) (Cont.)

 

(Amounts expressed in millions of Argentine Pesos)

   LOGO

 

     For the three-month period ended March 31, 2017        
     Shareholders’ contributions        
     Subscribed
capital
     Adjustment
to
contributions
     Treasury
shares
     Adjustment
to treasury
shares
     Share-
based
benefit
plans
    Acquisition
cost of
treasury
shares
    Share
trading
premium
    Issuance
premiums
    Total        

Balance at the beginning of the fiscal year

     3,923        6,085        10        16        61       (152     (180     640       10,403    

Accrual of share-based benefit plans(3)

     —          —          —          —          26       —         —         —         26    

Settlement of share-based benefit plans (2)

     —          —          —          —          (1     1       —         —         —      

Other comprehensive income

     —          —          —          —          —         —         —         —         —      

Net income

     —          —          —          —          —         —         —         —         —      
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance at the end of the period

     3,923        6,085        10        16        86       (151     (180     640       10,429    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   
     For the three-month period ended March 31, 2017  
     Reserves                 Equity attributable to        
     Legal      Future
dividends
     Investments      Purchase of
treasury
shares
     Initial
IFRS
adjustment
    Other
comprehensive
income
    Retained
earnings
    Shareholders
of the parent
company
    Non-controlling
interest
    Total
shareholders’
equity
 

Balance at the beginning of the fiscal year

     2,007        5        24,904        490        3,648       105,529       (28,231     118,755       (94     118,661  

Accrual of share-based benefit plans(3)

     —          —          —          —          —         —         —         26       —         26  

Settlement of share-based benefit plans (2)

     —          —          —          —          —         —         —         —         —         —    

Other comprehensive income

     —          —          —          —          —         (3,643     —         (3,643     —         (3,643

Net income

     —          —          —          —          —         —         25       25       167       192  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance at the end of the period

     2,007        5        24,904        490        3,648       101,886 (1)      (28,206     115,163       73       115,236  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(1) Includes 105,532 corresponding to the effect of the translation of the financial statements of YPF S.A. and (3,646) corresponding to the effect of the translation of the financial statements of investments in subsidiaries, associates and joint ventures with functional currencies other than the U.S. dollar, as detailed in Note 2.b.1. to the annual consolidated financial statements.
(2) Net of employees’ income tax withholding related to the share-based benefit plans.
(3) See Note 32.

Accompanying notes are an integral part of these condensed interim consolidated financial statements.

MIGUEL ANGEL GUTIERREZ

President

 

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Table of Contents

English translation of the condensed interim consolidated financial statements originally filed in Spanish with the Argentine Securities Commission (“CNV”). In case of discrepancy, the condensed interim consolidated financial statements filed with the CNV prevail over this translation

 

YPF SOCIEDAD ANONIMA

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOW

FOR THE THREE-MONTH PERIOD ENDED MARCH 31, 2018 AND 2017 (UNAUDITED)

   LOGO

 

(Amounts expressed in millions of Argentine Pesos)

 

     For the three-month period
ended March 31,
 
     2018     2017  

Operating activities

    

Net profit

     5,986       192  

Adjustments to reconcile net profit to cash flows provided by operating activities:

    

Income from equity interest in associates and joint ventures

     (214     (22

Depreciation of property, plant and equipment

     18,714       11,764  

Amortization of intangible assets

     247       181  

Retirement of property, plant and equipment and intangible assets and consumption of materials

     1,466       869  

Charge on income tax

     11,700       (2,820

Net increase in provisions

     1,593       1,671  

Exchange differences, interest and other (1)

     49       6,369  

Share-based benefit plan

     53       26  

Result of companies’ revaluation

     (11,980     —    

Changes in assets and liabilities:

    

Trade receivables

     (4,230     1,894  

Other receivables

     (4,835     3,175  

Inventories

     50       217  

Accounts payable

     3,241       (403

Taxes payables

     2,188       2,119  

Salaries and social security

     (863     (651

Other liabilities

     (1,930     (950

Decrease in provisions included in liabilities due to payment/use

     (383     (273

Contract assets

     (112     (106

Contract liabilities

     871       1,548  

Dividends received

     104       95  

Income tax payments

     (289     (245
  

 

 

   

 

 

 

Net cash flows of operating activities

     21,426       24,650  
  

 

 

   

 

 

 

Investing activities:(2)

    

Acquisition of property, plant and equipment and intangible assets

     (15,794     (14,574

Contributions and acquisitions of interests in associates and joint ventures

     (280     (272

Proceeds from sales of financial assets

     4,953       —    

Investments in financial assets

     —         (3

Interests received from financial assets

     —         8  
  

 

 

   

 

 

 

Net cash flows of investing activities

     (11,121     (14,841
  

 

 

   

 

 

 

Financing activities:(2)

    

Payments of loans

     (9,435     (8,393

Payments of interest

     (5,399     (5,369

Proceeds from loans

     8,666       4,769  
  

 

 

   

 

 

 

Net cash flows of financing activities

     (6,168     (8,993
  

 

 

   

 

 

 

Translation differences of cash and cash equivalents

     636       (149
  

 

 

   

 

 

 

Net increase in cash and cash equivalents

     4,773       667  
  

 

 

   

 

 

 

Cash and cash equivalents at the beginning of year

     28,738       10,757  

Cash and cash equivalents at the end of period

     33,511       11,424  
  

 

 

   

 

 

 

Net increase in cash and cash equivalents

     4,773       667  
  

 

 

   

 

 

 

 

(1) Does not include exchange differences generated by cash and cash equivalents, which are disclosed separately in this statement.
(2) The main investing and financing transactions that have not affected cash and cash equivalents correspond to:

 

     For the three-month period
ended March 31,
 
     2018      2017  

Acquisition of property, plant and equipment and concession extension easements not paid

     5,109        4,204  

Capital contributions in joint ventures

     —          10  

Accompanying notes are an integral part of these condensed interim consolidated financial statements.

 

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Table of Contents

English translation of the condensed interim consolidated financial statements originally filed in Spanish with the Argentine Securities Commission (“CNV”). In case of discrepancy, the condensed interim consolidated financial statements filed with the CNV prevail over this translation

 

YPF SOCIEDAD ANONIMA

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF MARCH 31, 2018 AND COMPARATIVE INFORMATION (UNAUDITED)

(Amounts expressed in millions of Argentine Pesos, except for shares and per share amounts expressed in Argentine Pesos, or as otherwise indicated)

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1. GENERAL INFORMATION, STRUCTURE AND ORGANIZATION OF THE BUSINESS OF THE GROUP

General information

YPF Sociedad Anónima is a sociedad anónima (stock corporation) incorporated under the laws of the Argentine Republic, with a registered office at Macacha Güemes 515, in the City of Buenos Aires.

YPF and its subsidiaries form the leading energy group in Argentina, which operates a fully integrated oil and gas chain with leading market positions across the domestic Upstream and Downstream segments.

Structure and organization of the economic group

The following chart shows the organizational structure, including the main companies of the Group, as of March 31, 2018:

 

LOGO

 

(1) Held directly and indirectly.
(2) See Note 4.

 

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Table of Contents

English translation of the condensed interim consolidated financial statements originally filed in Spanish with the Argentine Securities Commission (“CNV”). In case of discrepancy, the condensed interim consolidated financial statements filed with the CNV prevail over this translation

 

YPF SOCIEDAD ANONIMA

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF MARCH 31, 2018 AND COMPARATIVE INFORMATION (UNAUDITED)

   LOGO

1. GENERAL INFORMATION, STRUCTURE AND ORGANIZATION OF THE BUSINESS OF THE GROUP (Cont.)

 

Organization of the business

As of March 31, 2018, the Group carries out its transactions and operations in accordance with the following structure:

 

    Upstream;

 

    Gas and Power;

 

    Downstream;

 

    Central administration and others, which covers the remaining activities not included in the previous categories.

Activities covered by each business segment are detailed in Note 6.

Almost all operations, properties and clients are located in Argentina. However, the Group also holds equity interests in exploratory and production areas in Chile and Bolivia. The Group also sells lubricants and derivatives in Brazil and Chile.

2. BASIS OF PREPARATION OF THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

2.a) Basis of preparation

The condensed interim consolidated financial statements of YPF and its subsidiaries for the three-month period ended March 31, 2018, are presented in accordance with IAS 34 “Interim Financial Reporting”. These condensed interim consolidated financial statements should be read in conjunction with the annual consolidated financial statements of the Group as of December 31, 2017 prepared in accordance with IFRS.

Furthermore, some additional information required by the LGS and/or regulations of the CNV was included. This information is contained in the Notes to these condensed interim consolidated financial statements only to comply with regulatory requirements.

These condensed interim consolidated financial statements were approved by the Board of Directors’ meeting and authorized to be issued on May 8, 2018.

These condensed interim consolidated financial statements corresponding to the three-month period ended on March 31, 2018 are unaudited. The Company´s Management believes they have included all necessary adjustments to reasonably present the results of each period on a basis consistent with the audited annual consolidated financial statements. Income for the three-month period ended on March 31, 2018 does not necessarily reflect the proportion of the Group’s full-year income.

2.b) Significant Accounting Policies

The most significant accounting policies are described in Note 2.b to the annual consolidated financial statements.

The accounting policies adopted in the preparation of these condensed interim consolidated financial statements are consistent with those used in the preparation of the annual consolidated financial statements, except for the valuation policy for Income Tax detailed in Note 16.

Also, in compliance with the entry into force of IFRS 15 and the changes in IFRS 9 (as revised in 2014), effective as of January 1, 2018, the Group modified the accounting policy for the disclosure of revenue from ordinary activities arising from contracts with customers as well as the accounting policy applied to the impairment and provision for trade receivables and other doubtful receivables and contract assets, both described in this Note.

Functional and reporting currency

As mentioned in Note 2.b.1. to the annual consolidated financial statements, YPF has defined the U.S. dollar as its functional currency. Additionally, according to CNV Resolution No. 562, YPF must present its financial statements in Argentine pesos.

 

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Table of Contents

English translation of the condensed interim consolidated financial statements originally filed in Spanish with the Argentine Securities Commission (“CNV”). In case of discrepancy, the condensed interim consolidated financial statements filed with the CNV prevail over this translation

 

YPF SOCIEDAD ANONIMA

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF MARCH 31, 2018 AND COMPARATIVE INFORMATION (UNAUDITED)

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2. BASIS OF PREPARATION OF THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (Cont.)

 

Adoption of new standards and interpretations effective as of January 1, 2018

The Group has adopted revised standards and interpretations, issued by the IASB, relevant to its operations which are of mandatory and effective application as of March 31, 2018, as specified in Note 2.b.25 to the annual consolidated financial statements. The aforementioned new standards and interpretations that affected these condensed interim consolidated financial statements are described below:

 

    IFRS 15 – Revenue from ordinary activities arising from contracts entered into with customers

This standard presents a detailed five-step model to explain the revenues from contracts with customers. It is mainly based on the principle that the entity has to recognize the revenues to represent the transfer of goods or services promised to customers in an amount that reflects the consideration that the entity expects to receive in exchange for the goods or services at the time a performance obligation is satisfied. An asset is transferred when (or as) the customer obtains control over that asset, with control defined as the ability to direct the use of, and obtain substantially all of the remaining benefits from the asset.

It has also introduced more prescriptive indications:

 

    If the contract (or a combination of contracts) contains more than one promised good or service, when and how the goods and services should be delivered.

 

    If the transaction price distributed to each performance obligation should be recognized as income over the course of a period of time or at a certain point in time. Under IFRS 15, an entity recognizes revenue when an obligation is performed, namely, when the control of the goods and services which has a particular obligation is transferred to the customer. The new model does not include separate guidelines for the “sale of goods” and the “provision of services”. Instead, it requires that entities evaluate whether the revenue should be recognized over a period of time or at a given point in time, regardless of whether the said revenue includes “the sale of goods” or “the provision of services”.

 

    Where the transaction price contains an estimation of variable payments, how the amount and the time will affect the recognition of revenue. The concept of estimation of variable consideration is broad. A transaction price is considered variable on account of discounts, refunds, credits, price concessions, incentives, performance bonuses, penalties and contingency agreements. The new model introduces a major condition for a variable consideration to be recognized as revenue: only until it is highly improbable that a significant change in the accumulated revenue amount will occur, once the uncertainty associated with the variable consideration has been resolved.

 

    When the incurred costs to execute a contract and the costs to perform it may be recognized as an asset.

Within this regulatory framework, contracts with customers were analyzed, the main ones being:

 

    Contracts for the sale of fuel in consignment;

 

    Contracts for the direct sale of fuel;

 

    Contracts for the sale of natural gas;

 

    Contracts and agreements for the sale of other refined products;

 

    Construction contracts.

In the first four types of contracts, related to the sale of goods, income is recognized when the control of the goods is transferred to the customer. Even in the case of consignment contracts, income is not recognized until the good is sold to the intermediary’s customer. It is emphasized that in these contracts there are no performance obligations that are separate or different from the delivery of goods.

In the case of the construction contracts, income is recognized considering the estimated final margin for each project that arises from technical studies on sales and the estimated total costs of each of them, as well as their physical progress. In this type of contract, performance obligations are satisfied over time.

 

10


Table of Contents

English translation of the condensed interim consolidated financial statements originally filed in Spanish with the Argentine Securities Commission (“CNV”). In case of discrepancy, the condensed interim consolidated financial statements filed with the CNV prevail over this translation

 

YPF SOCIEDAD ANONIMA

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF MARCH 31, 2018 AND COMPARATIVE INFORMATION (UNAUDITED)

   LOGO

2. BASIS OF PREPARATION OF THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (Cont.)

 

The Group has adopted the full retrospective method for the implementation of this standard, which has not affected the accounting policies related to the recognition of revenues from contracts with customers, as explained in Note 2.b.11 to the annual consolidated financial statements, and therefore the initial retained earnings have not been affected either.

The Group has adopted the standard’s terminology, identifying “Contract Assets” and “Contract Liabilities”. Thus, certain reclassifications have been made in the statements of financial position in the comparative amounts for the fiscal year ended December 31, 2017, as shown below:

 

     Amounts as of December 31,
2017
     Reclassifications IFRS 15     Amounts restated as of
December 31, 2017
 
     Non-current      Current      Non-current     Current     Non-current      Current  

Assets

               

Inventories

     —          27,291        —         (142     —          27,149  

Contract Assets

     —          —          —         142       —          142  

Liabilities

               

Accounts Payable

     1,655        47,371        (1,470     (1,460     185        45,911  

Contract Liabilities

     —          —          1,470       1,460       1,470        1,460  

Additionally, IFRS 15 introduces requirements aimed at providing new disaggregation of information to be disclosed. Based on the revenue analysis carried out by the Company’s Board of Directors, Note 20 has been broken down by (i) type of good or service; (ii) sales channels, and (iii) target market, according to the reported business segments.

 

    IFRS 9 – Financial Instruments

The criteria and requirements defined by the standard may be divided into three groups:

Classification and measurement of financial assets and liabilities

The Group adopted IFRS 9 as of the transition date in accordance with the regulations in force in 2013, which dealt with everything related to the classification and measurement of financial assets and liabilities. With respect to the application of IFRS 9 (as revised in 2014), based on the Company’s analysis of the Group’s financial assets and liabilities as of March 21, 2018 and December 31, 2017, and on the prevailing facts and circumstances on the respective dates, its application did not have any impact on the accounting treatments described in the Notes to the annual consolidated financial statements regarding the issues mentioned in this paragraph.

Hedge Accounting:

The general hedge accounting requirements of IFRS 9 maintain the three types of hedge accounting mechanisms included in IAS 39. However, the eligible types of hedge accounting transactions are now much more flexible, especially by expanding the types of instruments that are classified as hedging instruments and the types of risk components of non-financial elements ideal for hedge accounting.

Additionally, the effectiveness test has been reviewed and replaced by the principle of “economic relationship”. A retrospective evaluation is no longer required to measure the effectiveness of coverage. Many more disclosure requirements have been added regarding the entity’s risk management activities.

The application of this standard related to hedge accounting has not had any impact because the Group has not carried out this type of transactions as of the end of this period or in the fiscal year ended December 31, 2017.

Impairment methodology

The impairment model provided under IFRS 9 reflects expected credit losses, as opposed to credit losses incurred under IAS 39. Within the scope of impairment under IFRS 9, it is no longer necessary for a credit event to occur before credit losses are recognized. In contrast, an entity always records both the expected credit losses and their changes. The amount of expected credit losses must be updated on the issuance date of each financial statement in order to reflect any changes in credit risk since initial recognition.

 

11


Table of Contents

English translation of the condensed interim consolidated financial statements originally filed in Spanish with the Argentine Securities Commission (“CNV”). In case of discrepancy, the condensed interim consolidated financial statements filed with the CNV prevail over this translation

 

YPF SOCIEDAD ANONIMA

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF MARCH 31, 2018 AND COMPARATIVE INFORMATION (UNAUDITED)

   LOGO

2. BASIS OF PREPARATION OF THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (Cont.)

 

The Group estimated the impairment of its financial and contract assets based on the simplified model, by preparing a matrix per category and dividing the assets into groups based on the type of customer: i) related parties, ii) public sector and iii) private sector. These groups were subsequently divided into sub-groups based on special characteristics indicative of the repayment capacity, such as i) payment arrears, ii) existence of guarantees, iii) existence of a judicial proceeding already initiated or in process of initiation for collection purposes, among others. Once each Group was defined, an expected bad-debt rate was assigned based on historical default rates adjusted to future economic conditions.

Thus, the accounting policy related to the impairment of financial assets described in Note 2.b.2) to the annual consolidated financial statements was replaced. Under that policy the impairment of a financial asset was recorded only when there was an objective evidence of the impairment of the asset, based on the difference between the book value of the asset and the present value of the estimated future cash flows (excluding future credit losses that have not been incurred) discounted at the financial asset’s original effective interest rate.

In compliance with the exception provided under IFRS 9, the Group has retroactively applied the changes in the standard, without restating the comparative amounts. Therefore, the difference between the previous accounting amounts and the new initial amounts resulting from the initial application of the standard were recognized as an adjustment in the “Retained Earnings” as of January 1, 2018. The information disclosed for 2017 reflects the requirements set forth in IAS 39, and not those of IFRS 9 in relation to impairment of financial assets. The implementation of the impairment method introduced by the standard generated a loss of 425 with the consequent effect on the deferred tax of 127. The net effect shown in the statement of changes in shareholders’ equity was of 298, which was not significant for the financial position and/or performance of the Group.

2.c) Accounting Estimates and Judgments

The preparation of financial statements at a certain date requires Management to make estimates and assessments affecting the amount of assets and liabilities recorded, contingent assets and liabilities disclosed at such date, as well as income and expenses recorded during the period. Actual future results might differ from the estimates and assessments made as of the date of preparation of these condensed interim consolidated financial statements.

In preparing these condensed interim consolidated financial statements, significant estimates and judgments were made by Management in applying the Group’s accounting policies and the main sources of uncertainty were consistent with those applied by the Group in the preparation of the annual consolidated financial statements, which are disclosed in Notes 2.b and 2.c to the annual consolidated financial statements.

2.d) Comparative information

Amounts and other information corresponding to the year ended on December 31, 2017 and to the three-month period ended on March 31, 2017 are an integral part of these condensed interim consolidated financial statements and are intended to be read only in relation to these financial statements.

Additionally, certain amounts in the statement of financial position have been reclassified due to the accounting policy changes mentioned in paragraph b) of this Note.

3. SEASONALITY OF OPERATIONS

Historically, the Group’s results have been subject to seasonal fluctuations during the year, particularly as a result of the increase in natural gas sales during the winter. After the 2002 devaluation of the Argentine peso, and as a consequence of the natural gas price freeze imposed by the Argentine government, the use of natural gas has been diversified, generating an increase in demand throughout the entire year. However, the recent adjustment in gas prices, which also affects the residential market where the demand has shown certain susceptibility to the price of gas, may lead the Group to seasonal fluctuations in its sales volumes and prices, which might adversely affect the level of production and sale of natural gas.

 

12


Table of Contents

English translation of the condensed interim consolidated financial statements originally filed in Spanish with the Argentine Securities Commission (“CNV”). In case of discrepancy, the condensed interim consolidated financial statements filed with the CNV prevail over this translation

 

YPF SOCIEDAD ANONIMA

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF MARCH 31, 2018 AND COMPARATIVE INFORMATION (UNAUDITED)

   LOGO

 

4. ACQUISITIONS AND DISPOSITIONS

 

    Agreement for YPF EE’s capitalization

On March 20, 2018 GE EFS Power Investments B.V., a subsidiary of EFS Global Energy B.V (both companies indirectly controlled by GE Energy Financial Services, Inc.), subscribed YPF EE shares representing 24.99% of its capital stock. Since then, GE EFS Power Investments and YPF jointly control YPF EE, undertaking to contribute as follows:

 

    Subscription price of US$ 275 million:

 

    US$ 135 million as of the closing date of the transaction; and

 

    US$ 140 million 12 months after the closing date of the transaction.

 

    Contingent price of up to the maximum sum of US$ 35 million subject to the evolution of the electric market prices (33.33% as of 24 months from the closing date of the transaction and 16.67% each subsequent year).

In this way, the capital structure of YPF EE after the issuance of shares is as follows:

 

Shareholder

   Number of
Shares
     Participation in
the capital stock
    Kind of Share  

YPF

     2,723,826,879        72.69218     A  

OPESSA

     86,476,112        2.30783     A  
  

 

 

    

 

 

   

 

 

 

Group

     2,810,302,991        75.00001     A  

GE

     936,767,364        24.99999     B  
  

 

 

    

 

 

   

 

 

 

Total

     3,747,070,355        100.00000  

As a result of this process, the Group reflected the investment in YPF EE in its consolidated financial statements as of December 31, 2017 as assets and liabilities held for disposal in separate lines from the rest of the assets and liabilities, given that as of that date they had met all the requirements for this classification. (See Note 2.b.24 and Note 3 to the annual consolidated financial statements).

The following table shows the main assets and liabilities held for disposal as of December 31, 2017:

 

    Group of assets held for disposal:

 

     December 31,
2017
 

Property, plant and equipment

     4,982  

Investments in associates and joint ventures

     2,117  

Inventories

     1  

Other receivables

     914  

Credits for sale

     713  

Investments in financial assets

     78  

Cash and cash equivalents

     61  
  

 

 

 

Subtotal

     8,866  
  

 

 

 

Deletions

     (43
  

 

 

 

Total

     8,823  
  

 

 

 

 

    Liabilities associated to the group of assets held for disposal:

 

     December 31,
2017
 

Provisions

     96  

Deferred tax liabilities

     282  

Remuneration and social security charges

     47  

Other liabilities

     1  

Loans

     4,072  

Accounts payable

     938  
  

 

 

 

Subtotal

     5,436  
  

 

 

 

Deletions

     (1,243
  

 

 

 

Total

     4,193  
  

 

 

 

 

13


Table of Contents

English translation of the condensed interim consolidated financial statements originally filed in Spanish with the Argentine Securities Commission (“CNV”). In case of discrepancy, the condensed interim consolidated financial statements filed with the CNV prevail over this translation

 

YPF SOCIEDAD ANONIMA

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF MARCH 31, 2018 AND COMPARATIVE INFORMATION (UNAUDITED)

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4. ACQUISITIONS AND DISPOSITIONS (Cont.)

 

As of March 31, 2018, as a result of the implementation of IFRS 10 and the aforementioned capitalization process of YPF EE, the Group recorded a gain of 11,980 (11,879 through YPF and 101 through OPESSA) included in the item “Other net operating results”, which includes a gain of 13,552 (13,451 through YPF and 101 through OPESSA) due to the dilution of its interest in YPF EE with the consequent loss of control over it and the subsequent revaluation of its residual interest and a loss of 1,572 (fully corresponding to YPF) for the reversal to net profit for the period of the balance accrued from the investment translation in this Company.

In order to determine the fair value of the investment in YPF EE, the Group has considered the elements available as of the date of these financial statements, including the best estimation of the occurrence of the contingent payments provided in the operation. However, for the measurement of this fair value the Group has a term of one year to evaluate all the facts and circumstances existing as of the transaction date that might modify such measurement.

Regarding the participation held after the aforementioned transaction, the Group has followed the guidelines of IFRS 10 “Consolidated financial statements” and has concluded that from the entry of GE in YPF EE, GE and YPF will jointly control YPF EE. Consequently, the Group will apply IFRS 11 “Joint Arrangements” defining such company as a joint venture, and will value it according to the equity method under the IAS 28 “Investments in associates and joint ventures”.

Some of the main evaluated assumptions are described below:

 

  (i) Any decisions about the relevant activities of YPF EE thereof are to be taken jointly, there being no power of one shareholder over the other in relation to such activities, regardless of the different percentages of equity interests held in YPF EE by each of them. Although the Group owns a 75.00001% stake in YPF EE, according to the shareholders’ agreement, the following is required for decision-making purposes regarding the relevant activities: the approval of at least one Director appointed by each class of shares at the meeting of the Board of Directors and the approval of each class of shares for the adoption of such decisions at the Shareholders’ meeting;

 

  (ii) No shareholder has any power, as defined in IFRS 10, to the detriment of any other, independently of the number of Directors or personnel (key or not) appointed by each class of shares, in the management of the Company for its own benefit or to unilaterally modify the variable investment returns or ultimately, to unilaterally direct any of the decisions associated with the relevant activities.

5. FINANCIAL RISK MANAGEMENT

The Group’s activities are exposed to a variety of financial risks: market risk (including foreign currency risk, interest rate risk and price risk), credit risk and liquidity risk. The Group maintains an organizational structure and systems that allow for the identification, measurement and adoption of the necessary actions in order to minimize the risks to which it is exposed.

The condensed interim consolidated financial statements do not include all the information and disclosures on financial risk management. Therefore, they should be read in conjunction with the Group’s annual consolidated financial statements.

There have been no significant changes in the risk management or risk management policies applied by the Group since the last fiscal year end. See Note 4 to the annual consolidated financial statements.

 

14


Table of Contents

English translation of the condensed interim consolidated financial statements originally filed in Spanish with the Argentine Securities Commission (“CNV”). In case of discrepancy, the condensed interim consolidated financial statements filed with the CNV prevail over this translation

 

YPF SOCIEDAD ANONIMA

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF MARCH 31, 2018 AND COMPARATIVE INFORMATION (UNAUDITED)

   LOGO

 

6. SEGMENT INFORMATION

The different segments in which the Group is organized take into consideration the different activities from which the Group obtains income and incurs expenses. The organizational structure is based on the way in which the highest decision-making authority analyzes the main financial and operating magnitudes for making decisions about resource allocation and performance assessment also considering the Group’s business strategy.

 

    Upstream

The Upstream segment carries out all activities relating to the exploration, development and production of oil and natural gas.

Revenue is generated from (i) the sale of produced oil to the Downstream segment and, marginally, from its sale to third parties; and (ii) the sale of produced gas to the Gas and Power segment.

 

    Gas and Power

The Gas and Power segment generates its revenue from the development of activities relating to: (i) the natural gas commercialization to third parties and the Downstream segment, (ii) the commercial and technical operation of LNG regasification terminals in Bahía Blanca and Escobar, by hiring two regasification vessels, and (iii) the natural gas distribution. Additionally, for the three-month period ended March 31, 2017, it included the generation of conventional and renewable electricity.

In addition to the proceeds derived from the sale of natural gas to third parties and the intersegment, which is then recognized as a “purchase” to the Upstream segment, and including Stimulus Plans for Natural Gas production in force (see Note 30 to the annual consolidated financial statements), Gas and Power accrues a fee in its favor with the Upstream segment to carry out such commercialization.

 

    Downstream

The Downstream segment develops activities relating to: (i) oil refining and petrochemical production, (ii) commercialization of refined and petrochemical products obtained from such processes, and (iii) logistics related to the transportation of oil and gas to refineries and the transportation and distribution of refined and petrochemical products to be marketed in the different sales channels.

It obtains its income from the marketing mentioned in item (ii) above, which is developed through the Retail, Industry, Agro, LPG, Chemicals and Lubricants and Specialties businesses.

It incurs all expenses related to the aforementioned activities, including the purchase of oil from the Upstream segment and third parties and the natural gas to be consumed in the refinery and petrochemical industrial complexes from the Gas and Power segment.

 

    Central Administration and Others

It covers other activities, not falling into the aforementioned categories, mainly corporate administrative expenses and assets and construction activities.

Sales between business segments were made at internal transfer prices established by the Group, which generally seek to approximate domestic market prices.

Operating profit and assets for each segment have been determined after consolidation adjustments.

 

15


Table of Contents

English translation of the condensed interim consolidated financial statements originally filed in Spanish with the Argentine Securities Commission (“CNV”). In case of discrepancy, the condensed interim consolidated financial statements filed with the CNV prevail over this translation

 

YPF SOCIEDAD ANONIMA

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF MARCH 31, 2018 AND COMPARATIVE INFORMATION (UNAUDITED)

   LOGO

6. SEGMENT INFORMATION (Cont.)

 

    Upstream     Gas and Power     Downstream     Central
Administration
and Others
    Consolidation
Adjustments(1)
    Total  

For the three-month period ended March 31, 2018

           

Revenues from sales

    220       15,542       60,062       875       (876     75,823  

Revenues from intersegment sales

    38,484       1,476       275       2,016       (42,251     —    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Revenues

    38,704       17,018       60,337       2,891       (43,127     75,823  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating profit / (loss)

    2,148       12,251 (3)      4,009       (989     (65     17,354  

Income from equity interests in associates and joint ventures

    —         174       40       —         —         214  

Depreciation of property, plant and equipment

    16,300 (2)      57       2,076       281       —         18,714  

Acquisition of property, plant and equipment

    13,033       379       1,255       207       —         14,874  

Assets

    266,959       61,054       173,298       55,707       (4,759     552,259  

For the three-month period ended March 31, 2017

           

Revenues from sales

    155       12,755       43,978       714       (599     57,003  

Revenues from intersegment sales

    27,622       990       202       1,566       (30,380     —    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Revenues

    27,777       13,745       44,180       2,280       (30,979     57,003  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating profit / (loss)

    899       558       4,364       (1,006     (304     4,511  

Income from equity interests in associates and joint ventures

    —         56       (34     —         —         22  

Depreciation of property, plant and equipment

    9,935 (2)      65       1,569       195       —         11,764  

Impairment of property, plant and equipment

    9,448       943       1,279       280       —         11,950  

As of December 31, 2017

           

Assets

    251,525       45,395       158,800       53,934       (3,936     505,718  

 

(1) Corresponds to the elimination of income among segments of the YPF Group.
(2) Includes depreciation of charges for impairment of property, plant and equipment.
(3) Includes the result for revaluation of the interest in YPF EE (see Note 4).

 

16


Table of Contents

English translation of the financial statements originally filed in Spanish with the Argentine Securities Commission (“CNV”). In case of discrepancy, the financial statements filed with the CNV prevail over this translation

 

YPF SOCIEDAD ANONIMA

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF MARCH 31, 2018 AND COMPARATIVE INFORMATION (UNAUDITED)

   LOGO

 

7. FINANCIAL INSTRUMENTS BY CATEGORY

Fair value measurements

Fair value measurements are described in Note 6 to the annual consolidated financial statements

The tables below show the Group’s financial assets measured at fair value as of March 31, 2018 and December 31, 2017, and their allocation to their fair value hierarchies:

 

     As of March 31, 2018  

Financial assets

   Level 1      Level 2      Level 3      Total  

Investments in financial assets:

           

- Public securities

     8,834        —          —          8,834  
  

 

 

    

 

 

    

 

 

    

 

 

 
     8,834        —          —          8,834  
  

 

 

    

 

 

    

 

 

    

 

 

 

Cash and cash equivalents:

           

- Mutual funds

     21,167        —          —          21,167  
  

 

 

    

 

 

    

 

 

    

 

 

 
     21,167        —          —          21,167  
  

 

 

    

 

 

    

 

 

    

 

 

 
     30,001        —          —          30,001  
  

 

 

    

 

 

    

 

 

    

 

 

 
     As of December 31, 2017  

Financial assets

   Level 1      Level 2      Level 3      Total  

Investments in financial assets:

           

- Public securities

     12,936        —          —          12,936  
  

 

 

    

 

 

    

 

 

    

 

 

 
     12,936        —          —          12,936  
  

 

 

    

 

 

    

 

 

    

 

 

 

Cash and cash equivalents:

     19,051        —          —          19,051  
  

 

 

    

 

 

    

 

 

    

 

 

 

- Mutual funds

     19,051        —          —          19,051  
  

 

 

    

 

 

    

 

 

    

 

 

 
     31,987        —          —          31,987  
  

 

 

    

 

 

    

 

 

    

 

 

 

The Group has no financial liabilities at fair value through profit or loss.

Fair value estimates

From December 31, 2017 until March 31, 2018, there have been no significant changes in the commercial or economic circumstances affecting the fair value of the Group’s assets and financial liabilities, whether measured at fair value or amortized cost, except as mentioned in Note 30.b.

Furthermore, during the three-month period ended March 31, 2018, there were no transfers between the different hierarchies used to determine the fair value of the Group’s financial instruments.

Fair value of financial assets and financial liabilities measured at amortized cost

The estimated fair value of loans, considering unadjusted listed prices (Level 1) for Negotiable Obligations and interest rates offered to the Group (Level 3) in connection with the remaining financial loans amounted to 204,180 and 200,264 as of March 31, 2018 and December 31, 2017, respectively.

The fair value of other receivable, trade receivables, cash and cash equivalents, accounts payable and Other liabilities do not differ significantly from their book value.

 

17


Table of Contents

English translation of the financial statements originally filed in Spanish with the Argentine Securities Commission (“CNV”).

In case of discrepancy, the financial statements filed with the CNV prevail over this translation

 

YPF SOCIEDAD ANONIMA

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF MARCH 31, 2018 AND COMPARATIVE INFORMATION (UNAUDITED)

   LOGO

 

8. INTANGIBLE ASSETS

Changes in the Group’s intangible assets for the three-month period ended March 31, 2018 and the year ended December 31, 2017 are as follows:

 

     Service concession      Exploration rights      Other intangibles      Total  

Cost

     11,749        3,093        5,494        20,336  

Accumulated amortization

     7,235        149        4,838        12,222  
  

 

 

    

 

 

    

 

 

    

 

 

 

Balances as of December 31, 2016

     4,514        2,944        656        8,114  
  

 

 

    

 

 

    

 

 

    

 

 

 

Cost

           

Increases

     947        8        198        1,153  

Translation effect

     2,141        513        953        3,607  

Decreases and reclassifications

     (13      (149      185        23  

Accumulated amortization

           

Increases

     615        —          223        838  

Translation effect

     1,330        —          885        2,215  

Decreases and reclassifications

     —          (149      17        (132

Cost

     14,824        3,465        6,830        25,119  

Accumulated amortization

     9,180        —          5,963        15,143  
  

 

 

    

 

 

    

 

 

    

 

 

 

Balances as of December 31, 2017

     5,644        3,465        867        9,976  
  

 

 

    

 

 

    

 

 

    

 

 

 

Cost

           

Increases

     206        —          48        254  

Translation effect

     1,191        277        523        1,991  

Decreases and reclassifications

     —          (82      (3      (85

Accumulated amortization

           

Increases

     191        —          56        247  

Translation effect

     741        —          486        1,227  

Decreases and reclassifications

     —          —          —          —    

Cost

     16,221        3,660        7,398        27,279  

Accumulated amortization

     10,112        —          6,505        16,617  
  

 

 

    

 

 

    

 

 

    

 

 

 

Balances as of March 31, 2018

     6,109        3,660        893        10,662  
  

 

 

    

 

 

    

 

 

    

 

 

 

9. PROPERTY, PLANT AND EQUIPMENT

 

     March 31, 2018      December 31, 2017  

Net book value of property, plant and equipment

     405,387        382,630  

Provision for obsolescence of materials and equipment

     (1,790      (1,652

Provision for impairment of property, plant and equipment

     (26,542      (26,535
  

 

 

    

 

 

 
     377,055        354,443  
  

 

 

    

 

 

 

 

18


Table of Contents

English translation of the financial statements originally filed in Spanish with the Argentine Securities Commission (“CNV”).

In case of discrepancy, the financial statements filed with the CNV prevail over this translation

 

YPF SOCIEDAD ANONIMA

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF MARCH 31, 2018 AND COMPARATIVE INFORMATION (UNAUDITED)

   LOGO

 

9. PROPERTY, PLANT AND EQUIPMENT (Cont.)

Changes in Group’s property, plant and equipment for the three-month period ended March 31, 2018 and the year ended December 31, 2017 are as follows:

 

   

Land and
buildings

  Mining
property,
wells and
related
equipment
    Refinery
equipment
and
petrochemical
plants
    Transportation
equipment
    Materials and
equipment in
warehouse
    Drilling and
work in
progress
    Exploratory
drilling in
progress
    Furniture,
fixtures and
installations
    Selling
equipment
    Infrastructure
for natural gas
distribution
    Electric
power
generation
facilities
    Other
property
    Total  

Cost

  18,429     625,628       112,560       5,551       14,239       52,673       1,978       8,089       14,346       3,191       1,762       9,965       868,411  

Accumulated depreciation

  7,497     432,002       54,735       3,285       —         —         —         6,401       9,119       1,301       1,394       6,998       522,732  
 

 

 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balances as of December 31, 2016

  10,932     193,626       57,825       2,266       14,239       52,673       1,978       1,688       5,227       1,890       368       2,967       345,679  
 

 

 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
Cost                                                                            

Increases

  49     (4,370     103       66       7,394       47,453       2,207       20       —         —         —         174       53,096  

Translation effect

  3,028     113,481       19,728       1,032       2,101       8,568       373       1,466       2,744       —         —         1,651       154,172  

Decreases and reclassifications

  (112)     40,614       2,284       965       (7,741     (49,165     (1,687     879       1,698       215       (1,762 )(4)      188       (13,624
Accumulated depreciation                                                                            

Increases

  437     54,980       5,395       602       —         —         —         717       854       80       87       315       63,467  

Translation effect

  1,303     81,108       9,983       609       —         —         —         1,196       1,684       —         —         1,151       97,034  

Decreases and reclassifications

  13     (1,756     (953     16       —         —         —         372       (1     —         (1,481 )(4)      (18     (3,808

Cost

  21,394     775,353       134,675       7,614       15,993       59,529       2,871       10,454       18,788       3,406       —         11,978       1,062,055  

Accumulated depreciation

  9,250     566,334       69,160       4,512       —         —         —         8,686       11,656       1,381       —         8,446       679,425  
 

 

 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balances as of December 31, 2017

  12,144     209,019  (1)      65,515       3,102       15,993       59,529       2,871       1,768       7,132       2,025       —         3,532       382,630  
 

 

 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
Cost                                                                            

Increases

  10     329       —         6       2,503       11,111       876       24       —         —         —         15       14,874 (3) 

Translation effect

  1,639     62,638       10,882       582       1,150       4,680       224       833       1,518       —         —         909       85,055  

Decreases and reclassifications

  134     8,706       238       44       (2,961     (9,190     (205     16       184       50       —         552       (2,432
Accumulated depreciation                                                                            

Increases

  119     18,628       1,623       154       —         —         —         195       256       20       —         107       21,102 (3) 

Translation effect

  723     45,749       5,592       350       —         —         —         696       942       —         —         632       54,684  
Decreases and reclassifications       (1,024     —         (12     —         —         —         3       —         (8     —         (5     (1,046
Cost   23,177     847,026       145,795       8,246       16,685       66,130       3,766       11,327       20,490       3,456       —         13,454       1,159,552  
Accumulated depreciation   10,092     629,687       76,375       5,004       —         —         —         9,580       12,854       1,393       —         9,180       754,165  
 

 

 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
Balances as of March 31, 2018   13,085     217,339  (1)      69,420       3,242       16,685       66,130       3,766 (2)      1,747       7,636       2,063       —         4,274       405,387  
 

 

 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

  (1) Includes 10,557 and 10,003 of mineral property as of March 31, 2018 and December 31, 2017, respectively.
  (2) As of March 31, 2018, there are 42 exploratory wells in progress. During the three-month period ended on such date, 10 wells were drilled, 2 wells were charged to exploratory expenses and 1 well was transferred to properties with proven reserves in the mining property, wells and related equipment account.
  (3) Includes 333 and 278 of cost and accumulated amortization, respectively, corresponding to additions for the acquisition of a participation in the Ramos area.
  (4) Includes 6,772 and 1,790 of cost and accumulated amortization, respectively, corresponding to the reclassification of assets of YPF EE as held for disposal.

 

19


Table of Contents

English translation of the condensed interim consolidated financial statements originally filed in Spanish with the Argentine Securities Commission (“CNV”). In case of discrepancy, the condensed interim consolidated financial statements filed with the CNV prevail over this translation

 

YPF SOCIEDAD ANONIMA

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF MARCH 31, 2018 AND COMPARATIVE INFORMATION (UNAUDITED)

 

9. PROPERTY, PLANT AND EQUIPMENT (Cont.)

   LOGO

 

The Group capitalizes the financial cost as part of the cost of the assets. For the three-month period ended March 31, 2018 and 2017, the rate of capitalization was 10.41% and 12.54%, respectively, and the amount capitalized was 146 and 204, respectively, for the period mentioned above.

Set forth below is the evolution of the provision for obsolescence of materials and equipment for the three-month period ended March 31, 2018 and 2017:

 

     For the three-month period
ended March 31,
 
     2018      2017  

Amount at beginning of year

     1,652        1,380  

Increase charged to expenses

     1        1  

Amounts incurred due to utilization

     —          (4

Transfers and other movements

     5        68  

Translation differences

     132        (44
  

 

 

    

 

 

 

Amount at end of period

     1,790        1,401  
  

 

 

    

 

 

 

Set forth below is the evolution of the provision for impairment of property, plant and equipment for three-month period ended on March 31, 2018 and 2017:

 

     For the three-month period
ended March 31,
 
     2018      2017  

Amount at beginning of year

     26,535        36,285  

Depreciation(1)

     (2,110      (2,167

Translation differences

     2,117        (1,116
  

 

 

    

 

 

 

Amount at end of period

     26,542        33,002  
  

 

 

    

 

 

 

 

(1) Included in “Depreciation of property, plant and equipment” in Note 22.

10. INVESTMENTS IN ASSOCIATES AND JOINT VENTURES

The following table shows the value of the investments in associates and joint ventures at an aggregate level, considering that none of the individual companies is material, as of March 31, 2018 and December 31, 2017:

 

     March 31,
2018
     December 31,
2017
 

Amount of investments in associates

     1,185        911  

Amount of investments in joint ventures

     22,935        5,146  

Provision for impairment of investments in associates and joint ventures

     (12      (12
  

 

 

    

 

 

 
     24,108        6,045  
  

 

 

    

 

 

 

 

20


Table of Contents

English translation of the condensed interim consolidated financial statements originally filed in Spanish with the Argentine Securities Commission (“CNV”). In case of discrepancy, the condensed interim consolidated financial statements filed with the CNV prevail over this translation

 

YPF SOCIEDAD ANONIMA

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF MARCH 31, 2018 AND COMPARATIVE INFORMATION (UNAUDITED)

 

10. INVESTMENTS IN ASSOCIATES AND JOINT VENTURES (Cont.)

   LOGO

 

The main movements during the three-month period ended March 31, 2018 and 2017, which affected the value of the aforementioned investments, correspond to:

 

     For the three-month period
ended March 31,
 
     2018      2017  

Amount at the beginning of year

     6,045        5,488  

Acquisitions and contributions

     280        282  

Income on investments in associates and joint ventures

     214        22  

Conversion differences

     388        (106

Distributed dividends

     (104      (95

Interest maintained in YPF EE (1)

     17,285        —    
  

 

 

    

 

 

 

Amount at the end of period

     24,108        5,591  
  

 

 

    

 

 

 

 

(1) Corresponds to the fair value of the interest maintained in the investment in YPF EE following the loss of control. See Note 4.

The following table shows the principal amounts of the results of the investments in associates and joint ventures of the Group, calculated according to the equity value therein, for the three-month period ended March 31, 2018 and 2017. The Group has adjusted, if applicable, the values reported by these companies to adapt them to the accounting criteria used by the Group for the valuation equity method in the aforementioned dates:

 

     Associates      Joint ventures  
     For the three-month period
ended March 31,
     For the three-month period
ended March 31,
 
     2018      2017      2018      2017  

Net income / (loss)

     52        (18      162        40  

Other comprehensive income

     15        (7      373        (99
  

 

 

    

 

 

    

 

 

    

 

 

 

Comprehensive income for the period

     67        (25      535        (59
  

 

 

    

 

 

    

 

 

    

 

 

 

The Group does not have investments in subsidiaries with significant non-controlling interests. Likewise, the Group does not have investments in associates and joint ventures that are significant, with the exception of the investment in YPF EE.

The assets and liabilities as of March 31, 2018 of YPF EE and its reconciliation with the registered investment are detailed below:

 

     For the three-
month period
ended March 31,
2018
 

Noncurrent assets

     10,915  

Current assets

     6,109  
  

 

 

 

Total assets

     17,024  
  

 

 

 

Noncurrent liabilities

     4,362  

Current liabilities

     3,122  
  

 

 

 

Total liabilities

     7,484  
  

 

 

 

Total shareholders’ equity

     9,540  
  

 

 

 

The results of YPF EE are not included because the Group’s participation in them is not significant for the three-month period ended March 31, 2018.

 

21


Table of Contents

English translation of the condensed interim consolidated financial statements originally filed in Spanish with the Argentine Securities Commission (“CNV”).

In case of discrepancy, the condensed interim consolidated financial statements filed with the CNV prevail over this translation

 

YPF SOCIEDAD ANONIMA

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF MARCH 31, 2018 AND COMPARATIVE INFORMATION (UNAUDITED)

   LOGO

 

10. INVESTMENTS IN ASSOCIATES AND JOINT VENTURES (Cont.)

The following table shows information of the subsidiaries:

 

         

Information of the issuer

 
    Description of the Securities             Last Financial Statements Available        

Name and Issuer

  Class     Face Value     Amount    

Main Business

 

Registered Address

  Date     Capital
stock
    Net profit
(loss)
    Equity     Holding in
Capital Stock
 

Subsidiaries:(8)

                   

YPF International S.A.(6)

    Common       Bs.100       66,897     Investment   La Plata Street 19, Santa Cruz de la Sierra, República de Bolivia     03-31-18       15       —   (7)      29       100.00

YPF Holdings Inc.(6)

    Common       US$ 0.01       810,614     Investment and finance   10333 Richmond Avenue I, Suite 1050, TX, U.S.A.     03-31-18       16,291       (3     (4,030     100.00

Operadora de Estaciones de Servicios S.A.

    Common       $1       163,701,747     Commercial management of YPF’s gas stations   Macacha Güemes 515, Buenos Aires, Argentina     03-31-18       164       243       1,150       99.99

A-Evangelista S.A.

    Common       $1       307,095,088     Engineering and construction services   Macacha Güemes 515, Buenos Aires, Argentina     03-31-18       307       (129     805       100.00

Metrogas S.A.

    Common       $1       398,419,700     Providing the public service of natural gas distribution   Gregorio Aráoz de Lamadrid 1360, Buenos Aires, Argentina.     03-31-18       569       (403     8,582       70.00

YPF Chile S.A.(6)

    Common       —  —         50,968,649     Lubricants and aviation fuels trading and hydrocarbons research and exploration   Villarica 322; Módulo B1, Qilicura, Santiago     03-31-18       918       (1     1,501       100.00

YPF Tecnología S.A.

    Common       $1       234,291,000     Investigation, development, production and marketing of technologies, knowledge, goods and services   Macacha Güemes 515, Buenos Aires, Argentina     03-31-18       459       22       713       51.00

Compañía de Inversiones Mineras S.A.

    Common       $1       17,043,060     Exploration, exploitation, processing, management, storage and transport of all types of minerals; assembly, construction and operation of facilities and structures and processing of products related to mining   Macacha Güemes 515, Buenos Aires, Argentina     03-31-18       236       1       182       100.00

Bajo del Toro II S.R.L.

   
Membership
interests
 
 
    $1       1,270,815,165     Exploration, discovery, exploitation, purchase, production, storage, transport, import, export and marketing of all types of liquid or gaseous hydrocarbons and carrying out all acts that are not prohibited by law, including, but not limited to the execution of money loans as lender and/or borrower   Macacha Güemes 515, Buenos Aires, Argentina     12-31-17       1,271       90       1,341       100.00

 

22


Table of Contents

English translation of the condensed interim consolidated financial statements originally filed in Spanish with the Argentine Securities Commission (“CNV”).

In case of discrepancy, the condensed interim consolidated financial statements filed with the CNV prevail over this translation

 

YPF SOCIEDAD ANONIMA

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF MARCH 31, 2018 AND COMPARATIVE INFORMATION (UNAUDITED)

   LOGO

 

10.    INVESTMENTS IN ASSOCIATES AND JOINT VENTURES (Cont.)

The following table shows the investments in associates and joint ventures:

 

    03-31-2018     12-31-2017  
                     

Information of the issuer

       
    Description of the Securities                         Last Financial Statements
Available
             

Name and Issuer

  Class     Face Value     Amount     Book value
(2)
    Cost
(1)
   

Main Business

 

Registered
Address

  Date     Capital
stock
    Net profit
(loss)
    Equity     Holding in
Capital Stock
    Book
Value (2)
 

Joint ventures:

                         

YPF Energía Eléctrica S.A. (5)

    Common     $ 1       1,879,916,921       17,285       1,085     Exploration, mining and marketing of hydrocarbons and generation, transport and marketing of electric energy   Macacha Güemes 515, Buenos Aires, Argentina     12-31-17       2,507       928       3,441       75.00     —   (9) 

Compañía Mega S.A.(6) (5)

    Common     $ 1       244,246,140       2,033       —       Separation, fractionation and transportation of natural gas liquids   San Martín 344, P. 10º, Buenos Aires, Argentina     12-31-17       643       1,066       3,431       38.00     1,725  

Profertil S.A.(6)

    Common     $ 1       391,291,320       3,005       —       Production and marketing of fertilizers   Alicia Moreau de Justo 740, P. 3, Buenos Aires, Argentina     12-31-17       783       603       1,655       50.00     2,862  

Refinería del Norte S.A.

    Common     $ 1       45,803,655       538       —       Refining   Maipú 1, P. 2º, Buenos Aires, Argentina     12-31-17       92       91       1,081       50.00     483  
       

 

 

   

 

 

                 

 

 

 
          22,861       1,085                     5,070  
       

 

 

   

 

 

                 

 

 

 

Associates:

                         

Oleoductos del Valle S.A.

    Common     $ 10       4,072,749       272       —       Oil transportation by pipeline   Florida 1, P. 10º, Buenos Aires, Argentina     03-31-18       110       80       737       37.00     242  

Terminales Marítimas Patagónicas S.A.

    Common     $ 10       476,034       106       —       Oil storage and shipment   Av. Leandro N. Alem 1180, P. 11º, Buenos Aires, Argentina     12-31-17       14       28       311       33.15     103  

Oiltanking Ebytem S.A.

    Common     $ 10       351,167       190       —       Hydrocarbon transportation and storage   Terminal Marítima Puerto Rosales – Province of Buenos Aires, Argentina.     12-31-17       12       247       279       30.00     211  

Gasoducto del Pacífico (Argentina) S.A.

    Preferred     $ 1       15,579,578       43       —       Gas transportation by pipeline   San Martín 323, P.13°, Buenos Aires, Argentina     12-31-17       156       116       445       10.00     44  

Central Dock Sud S.A.

    Common     $ 0.01       11,869,095,145       290       280     Electric power generation and bulk marketing   Pasaje Ingeniero Butty 220, P.16°, Buenos Aires, Argentina     03-31-17       1,231       758       2,578       10.25 %(4)      —   (9) 

Oleoducto Trasandino (Argentina) S.A.

    Preferred     $ 1       12,135,167       44       —       Oil transportation by pipeline   Macacha Güemes 515, P.3º, Buenos Aires, Argentina     12-31-17       34       15       125       36.00     41  

YPF Gas S.A.

    Common     $ 1       59,821,434       213       —       Gas fractionation, bottling, distribution and transport for industrial and/or residential use   Macacha Güemes 515, P.3º, Buenos Aires, Argentina     12-31-17       176       150       818       33.99     235  

Other companies:

                         

Other (3)

    —         —         —         101       208     —     —       —         —         —         —         —         111  
       

 

 

   

 

 

                 

 

 

 
          1,259       488                     987  
       

 

 

   

 

 

                 

 

 

 
          24,120       1,573                     6,057  
       

 

 

   

 

 

                 

 

 

 

 

  (1) Corresponds to cost and contributions, net of dividends collected and capital reductions.
  (2) Corresponds to Holding in shareholders’ equity plus adjustments in order to conform to YPF accounting principles.
  (3) Includes Gasoducto del Pacífico (Cayman) Ltd., A&C Pipeline Holding Company, Poligás Luján S.A.C.I., Oleoducto Transandino (Chile) S.A., Bizoy S.A., Civeny S.A., Bioceres S.A. and Petrofaro S.A.
  (4) Additionally, the Group has a 29.99% indirect holding in capital stock through Inversora Dock Sud S.A.
  (5) As stipulated by shareholders’ agreement, joint control is held in this company by shareholders.
  (6) The U.S. dollar has been defined as the functional currency of this company.
  (7) No value is disclosed because the carrying value is less than 1.
  (8) Additionally, consolidates Compañía Minera de Argentina S.A., YPF Services USA Corp., YPF Europe B.V., YPF Brasil Comércio Derivado de Petróleo Ltda, Wokler Investment S.A., YPF Colombia S.A.S., Miwen S.A., Eleran Inversiones 2011 S.A.U., Lestery S.A., Energía Andina S.A and Bajo de Toro I S.R.L.
  (9) The investments that YPF holds in CDS, IDS, YGEN e YGEN II through its subsidiary YPF EE were reclassified to Assets held for disposal as of December 31, 2017.

 

23


Table of Contents

English translation of the condensed interim consolidated financial statements originally filed in Spanish with the Argentine Securities Commission (“CNV”). In case of discrepancy, the condensed interim consolidated financial statements filed with the CNV prevail over this translation

 

YPF SOCIEDAD ANONIMA

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF MARCH 31, 2018 AND COMPARATIVE INFORMATION (UNAUDITED)

   LOGO

 

11. INVENTORIES

 

     March 31, 2018     December 31, 2017  

Refined products

     18,441       16,260  

Crude oil and natural gas

     8,253       8,474  

Products in process

     628       640  

Raw materials, packaging materials and others

     1,908       1,775  
  

 

 

   

 

 

 
     29,230  (1)      27,149  (1) 
  

 

 

   

 

 

 

 

(1) As of March 31, 2018 and December 31, 2017, the cost of inventories does not exceed their net realizable value.

12. OTHER RECEIVABLES

 

     March 31, 2018      December 31, 2017  
     Noncurrent      Current      Noncurrent      Current  

Trade

     80        3,158        74        2,892  

Tax credit, export rebates and production incentives

     537        3,524        360        3,131  

Loans to third parties and balances with related parties (1)

     204        1,897        185        1,116  

Collateral deposits

     1        319        1        315  

Prepaid expenses

     200        1,722        180        934  

Advances and loans to employees

     3        451        17        412  

Advances to suppliers and custom agents (2)

     2        3,809        2        1,700  

Receivables with partners in JO

     734        2,139        743        1,165  

Insurance receivables

     —          130        —          206  

Miscellaneous

     25        1,113        31        870  
  

 

 

    

 

 

    

 

 

    

 

 

 
     1,786        18,262        1,593        12,741  

Provision for other doubtful receivables

     (278      (66      (258      (57
  

 

 

    

 

 

    

 

 

    

 

 

 
     1,508        18,196        1,335        12,684  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

(1) See Note 31 for information about related parties.
(2) Includes, among others, advances to customs agents for the payment of taxes and import rights related to the imports of fuels and goods.

13. TRADE RECEIVABLES

 

     March 31, 2018     December 31, 2017  
     Noncurrent      Current     Noncurrent      Current  

Accounts receivable and related(1)(2)

     13,967        36,091       2,210        41,972  

Provision for doubtful trade receivables

     —          (1,899     —          (1,323
  

 

 

    

 

 

   

 

 

    

 

 

 
     13,967        34,192       2,210        40,649  
  

 

 

    

 

 

   

 

 

    

 

 

 

 

(1) See Note 31 for information about related parties.
(2) See Note 20 for information about contract trade receivables.

Changes in the provision for doubtful trade receivables

 

     For the three-month period ended
March 31,
 
     2018      2017  

Balance at beginning of year

     1,323        1,084  
  

 

 

    

 

 

 

Modification of balance at beginning of year (1)

     425        —    
  

 

 

    

 

 

 

Balance at beginning of year

     1,748        1,084  
  

 

 

    

 

 

 

Increases charged to expenses

     95        35  

Decreases charged to income

     —          (15

Amounts incurred due to utilization

     8        (3

Translation differences

     48        (18
  

 

 

    

 

 

 

Balance at end of year

     1,899        1,083  
  

 

 

    

 

 

 

 

(1) Corresponds to the change in the accounting policy described in detail in Note 2.b.

14. CASH AND CASH EQUIVALENTS

 

     March 31,
2017
     December 31,
2017
 

Cash and banks

     12,325        9,672  

Short-term investments

     19        15  

Financial assets at fair value through profit or loss (1)

     21,167        19,051  
  

 

 

    

 

 

 
     33,511        28,738  
  

 

 

    

 

 

 

 

(1) See Note 7.

 

24


Table of Contents

English translation of the condensed interim consolidated financial statements originally filed in Spanish with the Argentine Securities Commission (“CNV”).

In case of discrepancy, the condensed interim consolidated financial statements filed with the CNV prevail over this translation

 

YPF SOCIEDAD ANONIMA

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF MARCH 31, 2018 AND COMPARATIVE INFORMATION (UNAUDITED)

   LOGO

 

15. PROVISIONS

Changes in the Group’s provisions for the three-month period ended March 31, 2018 and for the fiscal year ended December 31, 2017 are as follows:

 

    Provision for pending lawsuits
and contingencies
    Provision for environmental
liabilities
    Provision for hydrocarbon wells
abandonment obligations
    Total  
    Noncurrent     Current     Noncurrent     Current     Noncurrent     Current     Noncurrent     Current  

Amount as of December 31, 2016

    9,205       569       530       868       37,623       557       47,358       1,994  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Increases charged to expenses

    2,394       83       1,483       —         2,946       —         6,823       83  

Decreases charged to income

    (1,570     (410     (6     —         8       2       (1,568     (408

Amounts incurred due to payments/utilization

    (25     (187     —         (661     —         (515     (25     (1,363

Net exchange and translation differences

    1,483       75       —         —         6,874       121       8,357       196  

Reclassifications and other movements

    180 (1)      558       (811     811       (5,580 )(2)      571 (2)      (6,211     1,940  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Amount as of December 31, 2017

    11,667       688       1,196       1,018       41,871       736       54,734       2,442  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Increases charged to expenses

    486       69       264       —         753       —         1,503       69  

Decreases charged to income

    (9     (21     —         —         (54     —         (63     (21

Amounts incurred due to payments/utilization

    (4     (21     —         (150     —         (208     (4     (379

Exchange and translation differences, net

    658       44       —         —         3,390       60       4,048       104  

Reclassifications and other movements

    (41     41       (139     139       (207     207       (387     387  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Amount as of March 31, 2018

    12,757       800       1,321       1,007       45,753       795       59,831       2,602  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(1) Includes (2,098) corresponding to resolutions for contractual claims that were reclassified as Other liabilities (See Note 14.a.2 to the annual consolidated financial statements); and 2,932 of reclassifications of Other liabilities (see Note 27 to the annual consolidated financial statements)
(2) Includes (4,913) corresponding to the annual recalculation of costs for abandonment of hydrocarbon wells for the years ended December 31, 2017 and (96) corresponding to liabilities reclassified as Liabilities associated to assets held for disposal as of December 31, 2017.

Provisions for lawsuits, claims and environmental liabilities are described in Note 14 to the annual consolidated financial statements. The news of the three-month period ended on March 31, 2018, are described below:

 

    Claims under the scope of the CNDC

Regarding the claim of the Users and Consumers Association, the extraordinary appeal filed by the Company against the ruling of the Appellate Court has been sustained and the court file has been submitted to the CSJN.

 

25


Table of Contents

English translation of the condensed interim consolidated financial statements originally filed in Spanish with the Argentine Securities Commission (“CNV”). In case of discrepancy, the condensed interim consolidated financial statements filed with the CNV prevail over this translation

 

YPF SOCIEDAD ANONIMA

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF MARCH 31, 2018 AND COMPARATIVE INFORMATION (UNAUDITED)

   LOGO

 

16. INCOME TAX

According to IAS 34, income tax expense is recognized in each interim period based on the best estimate of the effective income tax rate expected as of year-end. Amounts calculated for income tax expense for the three-month period ended March 31, 2018 may need to be adjusted in the subsequent period if, based on new factors of judgment, the estimate of the effective expected income tax rate changes.

The calculation of the income tax expense accrued for the three-month period ended March 31, 2018 and 2017 is as follows:

 

     For the three-month period
ended March 31,
 
     2018      2017  

Current income tax

     (71      (139

Deferred income tax

     (11,629      2,959  
  

 

 

    

 

 

 
     (11,700      2,820  
  

 

 

    

 

 

 

The reconciliation between the charge to income for income tax for the three-month period ended March 31, 2018 and 2017 and the one that would result from applying the prevailing tax rate on net income before income tax arising from the consolidated statements of comprehensive income for each year is as follows:

 

     For the three-month period
ended March 31,
 
     2018     2017  

Net income before income tax

     17,686       (2,628

Statutory tax rate

     30     35
  

 

 

   

 

 

 

Statutory tax rate applied to net income before income tax

     (5,306     920  

Effect of the valuation of property, plant and equipment and intangible assets measured in their functional currency

     (14,898     3,782  

Exchange differences

     5,793       (2,476

Effect of the valuation of inventories

     (975     274  

Income on investments in associates and joint ventures

     64       8  

Result of companies’ revaluation

     3,594       —    

Miscellaneous

     28       312  
  

 

 

   

 

 

 

Income tax

     (11,700     2,820  
  

 

 

   

 

 

 

Breakdown of deferred tax as of March 31, 2018 and December 31, 2017 is as follows:

 

     March 31, 2018     December 31, 2017  

Deferred tax assets

    

Provisions and other non-deductible liabilities

     1,887       1,861  

Tax losses carryforward and other tax credits

     7,792       6,484  

Miscellaneous

     117       99  
  

 

 

   

 

 

 

Total deferred tax assets

     9,796       8,444  
  

 

 

   

 

 

 

Deferred tax liabilities

    

Property, plant and equipment

     (56,108     (43,931

Miscellaneous

     (2,238     (1,570
  

 

 

   

 

 

 

Total deferred tax liabilities

     (58,346     (45,501
  

 

 

   

 

 

 

Total deferred tax, net

     (48,550 )(1)      (37,057
  

 

 

   

 

 

 

 

(1) Includes 127 as a result of the implementation of the impairment method in the calculation of the impairment of financial assets pursuant to IFRS 9, having an impact in “Retained earnings”. See Note 2.b.

As of March 31, 2018 and December 31, 2017 there are no significant unrecorded deferred tax assets.

As of March 31, 2018 and December 31, 2017, the Group has classified as deferred tax assets for 742 and 588, respectively, and as deferred tax liability 49,292 and 37,645, respectively, all of which arise from the net deferred tax balances of each of the separate companies included in these condensed interim consolidated financial statements.

As of March 31, 2018 and December 31, 2017, the transactions that generate entries to “Other comprehensive income”, did not create temporary differences for income tax.

 

26


Table of Contents

English translation of the condensed interim consolidated financial statements originally filed in Spanish with the Argentine Securities Commission (“CNV”). In case of discrepancy, the condensed interim consolidated financial statements filed with the CNV prevail over this translation

 

YPF SOCIEDAD ANONIMA

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF MARCH 31, 2018 AND COMPARATIVE INFORMATION (UNAUDITED)

   LOGO

 

17. LOANS

 

                               March 31, 2018     December 31, 2017  
     Interest rate (1)     Maturity      Noncurrent     Current     Noncurrent     Current  

Argentine pesos:

                  

Negotiable obligations

     16.50     —          28.83     2018-2024        29,240 (6)      5,995 (6)      29,640 (6)      5,753 (6) 

Financial loans(3)

     24.83     —          27.33     2018-2020        184       1,576       728       2,794  

Account overdraft

     27.00     —          27.00     2018        —         1       —         10  
            

 

 

   

 

 

   

 

 

   

 

 

 
               29,424       7,572       30,368       8,557  
            

 

 

   

 

 

   

 

 

   

 

 

 

Currencies other than the Argentine peso:

                  

Negotiable obligations(2)(4)(5)

     3.50     —          10.00     2018-2047        123,897       12,448       114,686       15,075  

Export pre-financing

     1.50     —          4.75     2018-2019        416       5,843       383       6,521  

Imports financing

     3.05     —          3.84     2018        —         6,958       —         4,595  

Loans(5)

     1.80     —          6.38     2018-2021        11,213       4,795       6,290       4,588  
            

 

 

   

 

 

   

 

 

   

 

 

 
               135,526       30,044       121,359       30,779  
            

 

 

   

 

 

   

 

 

   

 

 

 
               164,950       37,616       151,727       39,336  
            

 

 

   

 

 

   

 

 

   

 

 

 

 

(1) Annual interest rate in force as of March 31, 2018.

 

(2) Disclosed net of 254 and 309 corresponding to YPF’s own negotiable obligations repurchased through open market transactions, as of March 31, 2018 and December 31, 2017, respectively.

 

(3) Includes loans granted by Banco Nación Argentina. As of March 31, 2018, it includes 1,000, which accrues interest at a BADLAR variable rate plus a spread of 3.5 percentage points. As of December 31, 2017, it includes 2,500, 1,500 of which accrues interest at a BADLAR variable rate plus a spread of 3.5 percentage points and 1,000 of which accrues interest at a fixed rate of 20 percentage points. See Note 31.

 

(4) Includes 1,652 and 1,528 as of March 31, 2018 and December 31, 2017, respectively, of nominal value of negotiable obligations that will be canceled in pesos at the applicable exchange rate in accordance with the terms of the series issued.

 

(5) Includes 355 and 492 corresponding to financial loans and negotiable obligations secured by cash flows as of March 31, 2018 and December 31, 2017, respectively.

 

(6) Includes 15,850 as of March 31, 2018 and December 31, 2017, of nominal value of NO that will be canceled in dollars at the applicable exchange rate according to the conditions of the issued series.

The breakdown of the Group’s loans as of the three-month period ended on March 31, 2018 and 2017 is as follows:

 

     For the three-month period ended
March 31,
 
     2018      2017  

Amount at beginning of the year

     191,063        154,345  

Proceeds from loans

     8,666        4,769  

Payments of loans

     (9,435      (8,393

Payments of interest

     (5,399      (5,369

Accrued interest(1)

     5,223        4,080  

Net exchange differences and translation

     12,448        (3,144
  

 

 

    

 

 

 

Amount at the end of the period

     202,566        146,288  
  

 

 

    

 

 

 

 

(1) Includes capitalized financial costs. See Note 9.

 

27


Table of Contents

English translation of the condensed interim consolidated financial statements originally filed in Spanish with the Argentine Securities Commission (“CNV”).

In case of discrepancy, the condensed interim consolidated financial statements filed with the CNV prevail over this translation

 

YPF SOCIEDAD ANONIMA

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF MARCH 31, 2018 AND COMPARATIVE INFORMATION (UNAUDITED)

   LOGO

17. LOANS (Cont.)

 

Details regarding the Negotiable Obligations of the Group are as follows:

 

                                        March 31, 2018     December 31, 2017  

Month

  Year     Principal
value
   

Ref.

 

Class

 

Interest rate(3)

    Principal
Maturity
    Noncurrent     Current     Noncurrent     Current  

YPF

                     

-

    1998     US$ 15     (1) (6)   —     Fixed     10.00     2028       298       12       276       5  

December and March

    2012/3     $ 2,828     (2) (4) (6) (7)   Class XIII   BADLAR plus 4.75%     27.73     2018       —         1,427       —         1,427  

April

    2013     $ 2,250     (2) (4) (6) (7)   Class XVII   BADLAR plus 2.25%     25.09     2020       2,250       94       2,250       96  

June

    2013     $ 1,265     (2) (4) (6)   Class XX   BADLAR plus 2.25%     25.25     2020       1,265       12       1,265       12  

July

    2013     US$ 92     (2) (5) (6)   Class XXII   Fixed     3.50     2020       487       248       451       230  

October

    2013     US$ 150     (2) (6)   Class XXIV   Libor plus 7.50%     8.92     2018       —         359       —         498  

December, April, February and December

    2013/4/5     US$ 862     (2) (6)   Class XXVI   Fixed     8.88     2018       —         9,303       —         8,422  

April, February and October

    2014/5/6     US$ 1,522     (2) (4) (6)   Class XXVIII   Fixed     8.75     2024       30,594       1,316       28,311       599  

March

    2014     $ 500     (2) (6) (7)   Class XXIX   BADLAR     23.02     2020       200       155       350       158  

September

    2014     $ 1,000     (2) (6) (7)   Class XXXIV   BADLAR plus 0.1%     22.63     2024       1,000       5       1,000       54  

September

    2014     $ 750     (2) (4) (6)   Class XXXV   BADLAR plus 3.5%     26.03     2019       250       504       500       298  

February

    2015     $ 950     (2) (6) (7)   Class XXXVI   BADLAR plus 4.74%     26.81     2020       950       35       950       92  

April

    2015     $ 935     (2) (4) (6)   Class XXXVIII   BADLAR plus 4.75%     27.39     2020       626       431       626       362  

April

    2015     US$ 1,500     (2) (6)   Class XXXIX   Fixed     8.50     2025       29,968       446       27,731       1,002  

September

    2015     $ 1,900     (2) (6) (7)   Class XLI   BADLAR     22.53     2020       1,267       643       1,267       736  

September and December

    2015     $ 1,697     (2) (4) (6)   Class XLII   BADLAR plus 4%     26.53     2020       1,697       10       1,697       110  

October

    2015     $ 2,000     (2) (6) (7)   Class XLIII   BADLAR     22.73     2023       2,000       202       2,000       80  

December

    2015     $ 1,400     (2) (6)   Class XLIV   BADLAR plus 4.75%     22.76     2018       —         1,423       —         1,422  

March

    2016     $ 1,350     (2) (4) (6)   Class XLVI   BADLAR plus 6%     28.32     2021       1,350       29       1,350       114  

March

    2016     US$ 1,000     (2) (6)   Class XLVII   Fixed     8.50     2021       20,099       38       18,599       430  

April

    2016     US$ 46     (2) (5) (6)   Class XLVIII   Fixed     8.25     2020       921       15       852       14  

Abril

    2016     $ 535     (2) (6)   Class XLlX   BADLAR plus 6%     28.83     2020       535       31       535       31  

July

    2016     $ 11,248     (2) (6) (8)   Class L   BADLAR plus 4%     27.13     2020       11,248       694       11,248       651  

September

    2016     CHF 300     (2) (6)   Class Ll   Fixed     3.75     2019       6,308       118       5,731       54  

May

    2017     $ 4,602     (2) (6) (8)   Clase LlI   Fixed     16.50     2022       4,602       300       4,602       110  

July and December

    2017     US$ 1,000     (2)   Clase LlII   Fixed     6.95     2027       20,335       287       18,889       445  

December

    2017     US$ 750     (2)   Clase LlV   Fixed     7.00     2047       14,887       306       13,846       44  

Metrogas

                     

January

    2013     US$ 177       Series A-L   —       —         —         —         —         —         3,076  

January

    2013     US$ 18       Series A-U   —       —         —         —         —         —         256  
               

 

 

   

 

 

   

 

 

   

 

 

 
                  153,137       18,443       144,326       20,828  
               

 

 

   

 

 

   

 

 

   

 

 

 

 

(1) Corresponds to the 1997 M.T.N. Program for US$ 1,000 million.
(2) Corresponds to the 2008 M.T.N. Program for US$ 10,000 million.
(3) Interest rate as of March 31, 2018.
(4) The ANSES and/or the “Fondo Argentino de Hidrocarburos” have participated in the primary subscription of these negotiable obligations, which may at the discretion of the respective holders, be subsequently traded on the securities market where these negotiable obligations are authorized to be traded.
(5) The payment currency of these Negotiable Obligations is the Argentine Peso at the exchange rate applicable under the terms of the series issued.
(6) As of the date of issuance of these financial statements, the Group has fully complied with the use of proceeds disclosed in the corresponding pricing supplements.
(7) Negotiable obligations classified as productive investments computable as such for the purposes of section 35.8.1, paragraph K of the General Regulations applicable to Insurance Activities issued by the Argentine Insurance Supervisory Bureau.
(8) The payment currency of this issue is the U.S. dollar at the exchange rate applicable in accordance with the conditions of the relevant issued series.

 

28


Table of Contents

English translation of the condensed interim consolidated financial statements originally filed in Spanish with the Argentine Securities Commission (“CNV”). In case of discrepancy, the condensed interim consolidated financial statements filed with the CNV prevail over this translation

 

YPF SOCIEDAD ANONIMA

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF MARCH 31, 2018 AND COMPARATIVE INFORMATION (UNAUDITED)

   LOGO

 

18. OTHER LIABILITIES

 

     March 31, 2018      December 31, 2017  
     Noncurrent      Current      Noncurrent      Current  

Extension of concessions

     186        355        179        342  

Liabilities for contractual claims(1)

     81        19        90        2,008  

Miscellaneous

     26        29        8        33  
  

 

 

    

 

 

    

 

 

    

 

 

 
     293        403        277        2,383  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

(1) See Note 14 to the annual consolidated financial statements.

19. ACCOUNTS PAYABLE

 

     March 31, 2018      December 31, 2017  
     Noncurrent      Current      Noncurrent      Current  

Trade and related parties (1)

     115        46,720        168        44,520  

Guarantee deposits

     18        456        17        441  

Payables with partners of JO

     —          41        —          122  

Advances to customers

     —          864        —          —    

Miscellaneous

     11        658        —          828  
  

 

 

    

 

 

    

 

 

    

 

 

 
     144        48,739        185        45,911  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

(1) See Note 31 for information about related parties.

20. REVENUES

 

     For the three-month period
ended March 31,
 
     2018      2017  

Sales

     76,484        55,841  

Government incentives (1)

     2,091        3,142  

Turnover tax

     (2,752      (1,980
  

 

 

    

 

 

 
     75,823        57,003  
  

 

 

    

 

 

 

 

(1) See Note 31.

The Group’s transactions and the main revenues are described in Note 6. The Group’s revenues are derived from contracts with customers, except for Government incentives.

The nature and effect of the initial implementation of IFRS 15 on the Group’s condensed interim consolidated financial statements are described in Note 2.b.

• Breakdown of revenues

o Type of good or service

 

     For the three-month period ended March 31, 2018  
     Upstream      Downstream      Gas and
Energy
     Corporation
and others
     Total  

Gas oil

     —          23,708        —          —          23,708  

Gasolines

     —          19,560        —          —          19,560  

Natural Gas(1)

     25        167        13,833        —          14,025  

Crude Oil

     —          434        —          —          434  

Jet fuel

     —          3,982        —          —          3,982  

Lubricants and by-products

     —          1,647        —          —          1,647  

Liquefied Petroleum Gas

     —          2,615        —          —          2,615  

Fuel oil

     —          486        —          —          486  

Petrochemicals

     —          2,562        —          —          2,562  

Fertilizers

     —          287        —          —          287  

Flours, oils and grains

     —          1,274        —          —          1,274  

Asphalts

     —          988        —          —          988  

Goods for resale at service stations

     —          690        —          —          690  

Income from construction contracts

     —          —          —          385        385  

Other goods and services

     200        1,811        1,261        569        3,841  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
     225        60,211        15,094        954        76,484  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

29


Table of Contents

English translation of the condensed interim consolidated financial statements originally filed in Spanish with the Argentine Securities Commission (“CNV”). In case of discrepancy, the condensed interim consolidated financial statements filed with the CNV prevail over this translation

 

YPF SOCIEDAD ANONIMA

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF MARCH 31, 2018 AND COMPARATIVE INFORMATION (UNAUDITED)

   LOGO

20. REVENUES (Cont.)

 

 

     For the three-month period ended March 31, 2017  
     Upstream      Downstream      Gas and
Energy
     Corporation
and Others
     Total  

Gas oil

     —          17,244        —          —          17,244  

Gasolines

     —          14,376        —          —          14,376  

Natural Gas(1)

     —          157        10,034        —          10,191  

Crude Oil

     —          241        —          —          241  

Jet fuel

     —          2,589        —          —          2,589  

Lubricants and by-products

     —          1,243        —          —          1,243  

Liquefied Petroleum Gas

     —          1,379        —          —          1,379  

Fuel oil

     —          1,661        —          —          1,661  

Petrochemicals

     —          1,739        —          —          1,739  

Fertilizers

     —          213        —          —          213  

Flours, oils and grains

     —          1,030        —          —          1,030  

Asphalts

     —          568        —          —          568  

Goods for resale at service stations

     —          621        —          —          621  

Income from construction contracts

     —          —          —          483        483  

Other goods and services

     164        870        931        298        2,263  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
     164        43,931        10,965        781        55,841  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

(1) Includes 11,306 and 8,464 corresponding to sales of natural gas produced by the Company for the three-month period ended March 31, 2018 and 2017, respectively.

o Sales Channels

 

     For the three-month period ended March 31, 2018  
     Upstream      Downstream      Gas and
Energy
     Corporation
and others
     Total  

Service Stations

     —          32,852        —          —          32,852  

Power Plants

     —          30        6,235        —          6,265  

Distribution Companies

     —          —          1,004        —          1,004  

Retail distribution of natural gas

     —          —          3,194        —          3,194  

Industries, transport and aviation

     25        12,142        3,399        —          15,566  

Agriculture

     —          5,439        —          —          5,439  

Petrochemical industry

     —          3,271        —          —          3,271  

Trading

     —          3,086        —          —          3,086  

Oil Companies

     —          1,462        —          —          1,462  

Commercialization of liquefied petroleum gas

     —          1,064        —          —          1,064  

Other sales channels

     200        865        1,262        954        3,281  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
     225        60,211        15,094        954        76,484  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

     For the three-month period ended March 31, 2017  
     Upstream      Downstream      Gas and
Energy
     Corporation
and others
     Total  

Service Stations

     —          24,574        —          —          24,574  

Power Plants

     —          1,377        4,135        —          5,512  

Distribution Companies

     —          —          569        —          569  

Retail distribution of natural gas

     —          —          1,675        —          1,675  

Industries, transport and aviation

     —          7,950        3,655        —          11,605  

Agriculture

     —          3,873        —          —          3,873  

Petrochemical industry

     —          2,162        —          —          2,162  

Trading

     —          1,808        —          —          1,808  

Oil Companies

     —          1,009        —          —          1,009  

Commercialization of liquefied petroleum gas

     —          603        —          —          603  

Other sales channels

     164        575        931        781        2,451  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
     164        43,931        10,965        781        55,841  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

o Target Market

Sales contracts in the domestic market resulted in 68,945 and 51,198 for the three-month period ended March 31 2018 and 2017, respectively.

Sales contracts in the international market resulted in 7,539 and 4,643 for the three-month period ended March 31, 2018 and 2017, respectively.

 

30


Table of Contents

English translation of the condensed interim consolidated financial statements originally filed in Spanish with the Argentine Securities Commission (“CNV”). In case of discrepancy, the condensed interim consolidated financial statements filed with the CNV prevail over this translation

 

YPF SOCIEDAD ANONIMA

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF MARCH 31, 2018 AND COMPARATIVE INFORMATION (UNAUDITED)

   LOGO

 

20. REVENUES (Cont.)

• Contract balances

The following table reflects information regarding credits, contract assets and contract liabilities:

 

     March 31, 2018      December 31, 2017  
     Non-current      Current      Non-current      Current  

Credits for contracts included in Trade Receivables

     1,420        31,840        2,210        27,339  

Contract assets

     —          254        —          142  

Contract liabilities

     1,509        2,292        1,470        1,460  

Contract assets are mainly related to the work carried out by the Group under the construction contracts.

Contract liabilities are mainly related to advances received from customers under the contracts for the sale of commodities, fuels, crude oil, methanol, lubricants and by-products, gas oil and natural gas, among others.

21. COSTS

 

     For the three-month period
ended March 31,
 
     2018      2017  

Inventories at beginning of year

     27,149        21,808 (1) 

Purchases

     17,717        12,157  

Production costs(2)

     45,671        33,424  

Translation effect

     2,131        (677

Inventories at end of the period

     (29,230      (20,914 )(1) 
  

 

 

    

 

 

 
     63,438        45,798  
  

 

 

    

 

 

 

 

(1) Does not include 12 and 118 of reclassifications corresponding to the change in the accounting policy described in detail in Note 2.b.
(2) See Note 22.

 

31


Table of Contents

English translation of the condensed interim consolidated financial statements originally filed in Spanish with the Argentine Securities Commission (“CNV”). In case of discrepancy, the condensed interim consolidated financial statements filed with the CNV prevail over this translation

 

YPF SOCIEDAD ANONIMA

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF MARCH 31, 2018 AND COMPARATIVE INFORMATION (UNAUDITED)

   LOGO

 

22. EXPENSES BY NATURE

The Group presents the statement of comprehensive income by classifying expenses according to their function as part of the “Costs”, “Administrative expenses”, “Selling expenses” and “Exploration expenses” rows. The following additional information is disclosed as required, on the nature of the expenses and their relation to the function within the Group for the three-month period ended March 31, 2018 and 2017:

 

     For the three-month period ended March 31, 2018  
     Production
costs(3)
     Administrative
expenses
    Selling
expenses
    Exploration
expenses
     Total  

Salaries and social security taxes

     3,457        929       501       45        4,932  

Fees and compensation for services

     279        650 (2)      162       3        1,094  

Other personnel expenses

     1,054        103       46       9        1,212  

Taxes, charges and contributions(1)

     672        64       992 (1)      —          1,728  

Royalties, easements and canons

     5,793        —         10       8        5,811  

Insurance

     261        16       25       —          302  

Rental of real estate and equipment

     1,671        3       140       —          1,814  

Survey expenses

     —          —         —         37        37  

Depreciation of property, plant and equipment

     18,178        206       330       —          18,714  

Amortization of intangible assets

     213        29       5       —          247  

Industrial inputs, consumable materials and supplies

     1,730        6       34       5        1,775  

Operation services and other service contracts

     3,220        68       258       12        3,558  

Preservation, repair and maintenance

     5,566        107       175       15        5,863  

Unproductive exploratory drillings

     —          —         —         177        177  

Transportation, products and charges

     2,329        —         1,834       —          4,163  

Provision for doubtful trade receivables

     —          —         95       —          95  

Publicity and advertising expenses

     —          109       252       —          361  

Fuel, gas, energy and miscellaneous

     1,248        64       322       12        1,646  
  

 

 

    

 

 

   

 

 

   

 

 

    

 

 

 
     45,671        2,354       5,181       323        53,529  
  

 

 

    

 

 

   

 

 

   

 

 

    

 

 

 

 

(1) Includes approximately 298 corresponding to export withholdings.
(2) Includes 22 corresponding to fees and remunerations of the Directors and Statutory Auditors of YPF’s Board of Directors. On April 27, 2018, the General and Extraordinary Shareholders’ Meeting of YPF resolved to ratify the fees of 48.8 corresponding to fiscal year 2017 and to approve the approximate sum of 62 as fees for such fees and remunerations for the fiscal year 2018.
(3) The expense recognized in the condensed interim consolidated statement of comprehensive income corresponding to research and development activities amounted to 114.

 

     For the three-month period ended March 31, 2017  
     Production
costs(3)
     Administrative
expenses
    Selling
expenses
    Exploration
expenses
     Total  

Salaries and social security taxes

     2,505        763       433       83        3,784  

Fees and compensation for services

     234        461 (2)      124       —          819  

Other personnel expenses

     761        74       37       11        883  

Taxes, charges and contributions(1)

     491        79       822 (1)      —          1,392  

Royalties, easements and canons

     4,108        —         7       9        4,124  

Insurance

     200        10       19       —          229  

Rental of real estate and equipment

     1,346        4       118       —          1,468  

Survey expenses

     —          —         —         89        89  

Depreciation of property, plant and equipment

     11,363        147       254       —          11,764  

Amortization of intangible assets

     148        27       6       —          181  

Industrial inputs, consumable materials and supplies

     1,107        4       32       3        1,146  

Operation services and other service contracts

     3,869        47       215       16        4,147  

Preservation, repair and maintenance

     4,225        88       170       11        4,494  

Unproductive exploratory drillings

     —          —         —         370        370  

Transportation, products and charges

     1,977        3       1,375       —          3,355  

Provision for doubtful trade receivables

     —          —         20       —          20  

Publicity and advertising expenses

     1        54       74       —          129  

Fuel, gas, energy and miscellaneous

     1,089        29       181       1        1,300  
  

 

 

    

 

 

   

 

 

   

 

 

    

 

 

 
     33,424        1,790       3,887       593        39,694  
  

 

 

    

 

 

   

 

 

   

 

 

    

 

 

 

 

(1) Includes approximately 259 corresponding to export withholdings.

 

(2) Includes 11 corresponding to fees and remunerations of the Directors and Statutory Auditors of YPF’s Board of Directors. On April 28, 2017, the General and Extraordinary Shareholders’ Meeting of YPF resolved to ratify the fees corresponding to fiscal year 2016 of 127 and to approve as fees on account for such fees and remunerations for the fiscal year 2017, the approximate sum of 48,8.

 

(3) The expense recognized in the condensed interim consolidated statement of comprehensive income corresponding to research and development activities amounted to 81.

 

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Table of Contents

English translation of the condensed interim consolidated financial statements originally filed in Spanish with the Argentine Securities Commission (“CNV”). In case of discrepancy, the condensed interim consolidated financial statements filed with the CNV prevail over this translation

 

YPF SOCIEDAD ANONIMA

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF MARCH 31, 2018 AND COMPARATIVE INFORMATION (UNAUDITED)

   LOGO

 

23. OTHER NET OPERATING RESULTS

 

     For the three-month period
ended March 31,
 
     2018      2017  

Result of companies’ revaluation(1)

     11,980        —    

Result for sale of participation in areas(2)

     1,167        —    

Lawsuits

     (359      (636

Miscellaneous

     39        212  
  

 

 

    

 

 

 
     12,827        (424
  

 

 

    

 

 

 

 

(1) See Note 4.
(2) See Note 29.a.

24. NET FINANCIAL RESULTS

 

     For the three-month period
ended March 31,
 
     2018      2017  

Financial income

     

Interest income

     285        476  

Exchange differences

     7,614        1,136  
  

 

 

    

 

 

 

Total financial income

     7,899        1,612  
  

 

 

    

 

 

 

Financial loss

     

Interest loss

     (5,263      (4,078

Exchange differences

     (743      (806

Financial accretion

     (2,917      (3,964
  

 

 

    

 

 

 

Total financial costs

     (8,923      (8,848
  

 

 

    

 

 

 

Other financial results

     

Fair value gains on financial assets at fair value through profit or loss

     1,142        75  
  

 

 

    

 

 

 

Total other financial results

     1,142        75  
  

 

 

    

 

 

 

Total net financial results

     118        (7,161
  

 

 

    

 

 

 

25. INVESTMENTS IN JOINT OPERATIONS

 

The assets and liabilities as of March 31, 2018 and December 31, 2017, and expenses for the three-month period ended on March 31, 2018 and 2017 of JO and other agreements are as follows:

 

     March 31, 2018      December 31, 2017  

Noncurrent assets(1)

     70,814        66,887  

Current assets

     2,657        2,417  
  

 

 

    

 

 

 

Total assets

     73,471        69,304  
  

 

 

    

 

 

 

Noncurrent liabilities

     6,467        5,876  

Current liabilities

     5,974        5,524  
  

 

 

    

 

 

 

Total liabilities

     12,441        11,400  
  

 

 

    

 

 

 

 

     For the three-month period ended March 31,  
     2018      2017  

Production Cost

     8,199        5,326  

Exploration expenses

     6        219  

 

(1) Does not include impairment of property, plant and equipment since such impairment is recorded by the participating partners of the JO.

 

33


Table of Contents

English translation of the condensed interim consolidated financial statements originally filed in Spanish with the Argentine Securities Commission (“CNV”). In case of discrepancy, the condensed interim consolidated financial statements filed with the CNV prevail over this translation

 

YPF SOCIEDAD ANONIMA

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF MARCH 31, 2018 AND COMPARATIVE INFORMATION (UNAUDITED)

   LOGO

 

26. SHAREHOLDERS’ EQUITY

As of March 31, 2018, the Company’s subscribed capital is 3,924 and the treasury shares are 9, represented by 393,312,793 ordinary, book-entry shares and divided into four classes of shares (A, B, C and D), with a par value of Argentine pesos 10 and one vote per share. These shares are fully subscribed, paid-in and authorized for stock exchange listing.

As of March 31, 2018, there are 3,764 Class A outstanding shares. As long as any Class A share remains outstanding, the affirmative vote of Argentine Government is required for: 1) mergers, 2) acquisitions of more than 50% of YPF shares in an agreed or hostile bid, 3) transfers of all the YPF’s exploitation and exploration rights, 4) the voluntary dissolution of YPF or 5) change of corporate and/or tax address outside the Argentine Republic. Items 3) and 4) also require prior approval by the Argentine Congress.

The General and Extraordinary Shareholders’ Meeting was held on April 27, 2018 and approved the financial statements of YPF for the fiscal year ended December 31, 2017 and approved the following resolution in relation to the allocation of profits: a) to allocate the sum of 120 to create a Reserve for the purchase of treasury shares in order to give the Board of Directors the possibility of acquiring treasury shares at the time it deems appropriate, and complying, during the execution of the plans, with the commitments assumed and to be assumed by them in the future; b) to allocate the sum of 11,020 to create a reserve for investments under the terms of article 70, third paragraph of the LGS; and c) to allocate the sum of 1,200 to a reserve for future dividends, empowering the Board of Directors, until the date of the next General Shareholders’ Meeting at which the financial statements closed as of December 31, 2018 will be dealt with, to determine the time and amount for their distribution, taking into account the financial conditions and availability of funds as well as the operating results, investments and other matters that are deemed relevant in the development of the Company’s activities, or their allocation in accordance with the provisions set forth in article 224, second paragraph, of the LGS and other applicable regulations.

27. EARNINGS PER SHARE

The following table shows the net income and the number of shares that have been used for the calculation of the basic and diluted earnings per share:

 

     For the three-month period
ended on March 31,
 
     2018      2017  

Net income

     6,067        25  

Average number of shares outstanding

     392,206,956        390,550,426  

Basic and diluted earnings per share

     15.47        0.06  

Basic and diluted earnings per share are calculated as shown in Note 2.b.13 to the annual consolidated financial statements.

28. CONTINGENT ASSETS AND LIABILITIES

Contingent liabilities and contingent assets are described in Note 28 to the annual consolidated financial statements. No significant new contingent liabilities and contingent assets have been identified for the three-month period ended on March 31, 2018, nor have there been amendments to the evaluations of the ongoing matters as of December 31, 2017.

 

34


Table of Contents

English translation of the condensed interim consolidated financial statements originally filed in Spanish with the Argentine Securities Commission (“CNV”). In case of discrepancy, the condensed interim consolidated financial statements filed with the CNV prevail over this translation

 

YPF SOCIEDAD ANONIMA

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF MARCH 31, 2018 AND COMPARATIVE INFORMATION (UNAUDITED)

   LOGO

 

29. CONTRACTUAL COMMITMENTS

Contractual commitments are described in Note 29 to the annual consolidated financial statements. Updates for the three-month period ended March 31, 2018 are described below:

29.a) Investment project agreements

 

    Agreement for the development of Loma La Lata Norte and Loma Campana areas

In relation to the Investment Agreement entered into between the Company and subsidiaries of Chevron Corporation for the joint exploitation of non-conventional hydrocarbons in the province of Neuquén, in the Loma Campana area, for the three-month period ended March 31, 2018, the Company and Compañía de Hidrocarburo No Convencional S.R.L. (“CHNC”) have carried out transactions which include the purchase of gas and crude oil by YPF for 2,108. These transactions were executed based on the market’s general and regulatory framework. The net balance to be paid to CHNC as of March 31, 2018 is 696.

 

    Agreement for the exploitation of the Aguada Pichana and Aguada de Castro Areas

Once the agreements have been finalized and the corresponding conditions have been fulfilled, the equity interests of YPF are as follows:

 

  (i) In the APE area, the interest of YPF is 22.50%

 

  (ii) In the APO area, the interest of YPF is 30%

 

  (iii) In the ACA area, the interest of YPF is 30%

Consequently, the Group has recorded a profit of 1,167 included in the item “Other net operating results”.

 

30. MAIN REGULATIONS AND OTHERS

Main regulations and others are described in Note 30 to the annual consolidated financial statements. Updates for the three-month period ended March 31, 2018 are described below:

30.a) Regulatory natural gas requirements

 

    Financing of winter consumption

On March 27, 2018, a memorandum of intent was signed with ENARGAS, natural gas producers, distribution and transportation companies in order to commit efforts aimed at the development of a natural gas winter consumption financing program jointly with the subscribing parties.

30.b) Natural gas production incentive programs

On April 3, 2018, MINEM Resolution No. 97/2018 was published in the Official Gazette approving the procedure (the “Procedure”) for the cancellation of compensations pending settlement and/or payment under the Natural Gas Surplus Injection Stimulus Program, Natural Gas Surplus Injection Stimulus Program for Companies with Reduced Injection and the Stimulus Program for New Natural Gas Projects, to which the beneficiary companies may adhere.

Each company may choose to receive compensation under the approved procedure stating its accession within 20 business days from the publication of the resolution. It is required that the company waive any rights, actions, remedies, appeals, and claims, either administrative and/or judicial, based on the Program, except for: i) the objection to the administrative acts that determine the relevant compensation according to the Procedure; and ii) the failure to comply with the payments provided for under the Procedure for a minimum amount of 3 installments, at the option of each beneficiary Company.

 

35


Table of Contents

English translation of the condensed interim consolidated financial statements originally filed in Spanish with the Argentine Securities Commission (“CNV”). In case of discrepancy, the condensed interim consolidated financial statements filed with the CNV prevail over this translation

 

YPF SOCIEDAD ANONIMA

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF MARCH 31, 2018 AND COMPARATIVE INFORMATION (UNAUDITED)

   LOGO

30. MAIN REGULATIONS AND OTHERS (Cont.)

 

The debt amount will be determined as follows: 85% of the dollar amount will be calculated according to the exchange rate at the time of the injection (“Program exchange rate”) and 15% of the dollar amount but devalued (multiplied by the quotient between the Program exchange rate and the exchange rate corresponding to the payment dates of the compensation resolutions already issued or the date of publication of Resolution 97/2018, as applicable). The debt will begin to be canceled as of January 2019 in 30 monthly and consecutive installments, in pesos, at the monthly average reference rate set forth in the Communication A 3500 of the BCRA (Wholesale) of the month preceding each installment.

On May 3, 2018, the Group adhered to the aforementioned Procedure.

As a consequence of the foregoing, the Group recorded a gain of 804 included in the item “Net financial results “.

30.c) Regulatory requirements applicable to natural gas distribution

 

    Tariff Renegotiation

 

i. Memorandum of Agreement for the Adoption of the Natural Gas Distribution License Agreement (also known as “Memorandum of Agreement for the Comprehensive Contractual Renegotiation”)

On March 28, 2018 Decree No. 252/2018 was published in the Official Gazette by which the PEN ratified the Memorandum of Agreement. Also, Resolution ENARGAS No. 300/2018 was published on that day, with the new tariffs scheme applicable as from April 1, 2018

 

    Note from ENARGAS regarding the interest of YPF in Metrogas

On April 5, 2018, ENARGAS rejected the motion for reconsideration submitted by YPF on March 30, 2017. YPF was notified of the decision of ENARGAS on April 6, 2018 through ENARGAS Resolution 313/2018.

As of the date of issuance of these consolidated condensed interim financial statements, YPF is analyzing the following legal steps as a result of the rejection of the aforementioned appeal.

30.d) Regulatory requirements of the liquefied petroleum gas industry

 

    Reference prices for the marketing chain of butane gas

Regulation No. 5 of the Undersecretariat of Hydrocarbon Resources was published on March 28, 2018, which established new maximum reference prices for the commercialization of butane for the sale of bottled LPG, effective as of April 1, 2018.

 

36


Table of Contents

English translation of the condensed interim consolidated financial statements originally filed in Spanish with the Argentine Securities Commission (“CNV”). In case of discrepancy, the condensed interim consolidated financial statements filed with the CNV prevail over this translation

 

YPF SOCIEDAD ANONIMA

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF MARCH 31, 2018 AND COMPARATIVE INFORMATION (UNAUDITED)

   LOGO

30. MAIN REGULATIONS AND OTHER (Cont.)

 

30.e) Other regulatory requirements

 

    CNV Regulatory Framework (N.T. 2013)

a) CNV General Resolution No. 622

 

i. Pursuant to section 1, Chapter III, Title IV of such Resolution, a description of the notes to the consolidated financial statements containing information required under the Resolution in the form of exhibits follows.

 

  Exhibit A – Fixed Assets    Note 9 Property, plant and equipment
  Exhibit B – Intangible assets    Note 8 Intangible assets
  Exhibit C – Investments in companies    Note 10 Investments in associates and joint ventures
  Exhibit D – Other investments    Note 7 Financial instruments by category
  Exhibit E – Provisions   

Note 13 Trade receivables

Note 12 Other receivables

Note 10 Investments in associates and joint ventures

Note 9 Property, plant and equipment

Note 15 Provisions

  Exhibit F – Cost of goods sold and services rendered    Note 21 Costs
  Exhibit G – Assets and liabilities in foreign currency    Note 33 Assets and liabilities in currencies other than the Argentine peso

 

ii. On March 18, 2015, the Company was registered with the CNV under the category “Settlement and Clearing Agent and Trading Agent - Own account”, record No. 549. Considering the Company’s business, and the CNV Rules and its Interpretative Criterion No. 55, the Company will not, under any circumstance, offer brokerage services to third parties for transactions in markets under the jurisdiction of the CNV, and it will also not open operating accounts to third parties to issue orders and trade in markets under the jurisdiction of the CNV.

Likewise, in accordance with Section VI, Chapter II, Title VII of the CNV Rules and its Interpretative Criterion No. 55, the Company’s equity exceeds the minimum required equity under such rules, which is 15, while the minimum required counterparty capital, which is 3, is comprised of 16,498,351 Units of Compass Ahorro—Class B Mutual Fund with 24-hour settlement upon redemption, the total value of the Company’s Units as of March 31, 2018, being 47.

b) CNV General Resolution No. 629

Due to General Resolution No. 629 of the CNV, the Company informs that supporting documentation of YPF’s operations, which is not in YPF’s headquarters, is stored in the following companies:

 

  Adea S.A. located in Barn 3 – Route 36, Km. 31.5 – Florencio Varela – Province of Buenos Aires.

 

  File S.R.L., located in Panamericana and R.S. Peña – Blanco Encalada – Luján de Cuyo – Province of Mendoza.

Additionally, it is on record that the detail of the documentation given in custody is available at the registered office, as well as the documents mentioned in section 5, subsection a.3), Section I, Chapter V, Title II of the CNV Rules.

 

37


Table of Contents

English translation of the condensed interim consolidated financial statements originally filed in Spanish with the Argentine Securities Commission (“CNV”). In case of discrepancy, the condensed interim consolidated financial statements filed with the CNV prevail over this translation

 

YPF SOCIEDAD ANONIMA

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF MARCH 31, 2018 AND COMPARATIVE INFORMATION (UNAUDITED)

   LOGO

 

31. BALANCES AND TRANSACTIONS WITH RELATED PARTIES

The information detailed in the tables below shows the balances with associates and joint ventures as of March 31, 2018 and December 31, 2017 and transactions with the mentioned parties for the three-month period ended March 31, 2018 and 2017.

 

     March 31, 2018      December 31, 2017  
     Other receivables      Trade receivables      Accounts payable      Other receivables      Trade receivables      Accounts payable  
     Current      Current      Current      Current      Current      Current  

Joint ventures:

                 

Profertil

     129        611        79        107        239        215  

MEGA

     —          1,080        104        —          925        149  

Refinor

     —          182        15        —          224        8  

Bizoy S.A.

     6        —          —          5        —          —    

Y-GEN I

     5        —          —          57        —          —    

Y-GEN II

     —          —          —          22        —          —    

YPF EE (1)

     783        638        184           

Petrofaro S.A.

     —          52        118        —          35        51  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
     923        2,563        500        191        1,423        423  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Associates:

                 

CDS

     —          134        —          —          122        —    

YPF Gas

     611        276        17        589        230        15  

Oldelval

     —          —          137        —          —          131  

Termap

     —          —          64        —          —          52  

OTA

     —          —          5        —          —          5  

OTC

     6        —          —          5        —          —    

Gasoducto del Pacífico (Argentina) S.A.

     4        —          21        4        —          19  

Oiltanking

     74        —          141        —          —          96  

Gas Austral S.A.

     2        10        —          2        7        —    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
     697        420        385        600        359        318  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
     1,620        2,983        885        791        1,782        741  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
     For the three-month period ended March 31,  
     2018      2017  
     Revenues      Purchases and
services
     Net interest
gain (loss)
     Revenues      Purchases and
services
     Net interest
gain (loss)
 

Joint ventures:

                 

Profertil

     486        106        —          234        79        —    

MEGA

     1,324        124        —          1,051        99        —    

Refinor

     341        38        —          190        83        —    

Y-GEN I

     4        —          —          17        —          —    

Y-GEN II

     —          —          —          —          —          —    

YPF EE (1)(2)

     41        173        13           

Petrofaro S.A.

     14        61        —          —          —          —    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
     2,210        502        13        1,492        261        —    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Associates:

                 

CDS

     58        —          —          25        —          —    

YPF Gas

     303        10        31        160        11        —    

Oldelval

     —          199        —          —          97        —    

Termap

     —          113        —          —          90        —    

OTA

     —          7        —          —          6        —    

Gasoducto del Pacífico (Argentina) S.A.

     —          61        —          —          46        —    

Oiltanking

     —          134        —          —          93        —    

Gas Austral S.A.

     26        —          —          —          —          —    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
     387        524        31        185        343        —    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
     2,597        1,026        44        1,677        604        —    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

(1) As of the closing date of this period, YPF EE was reclassified as a joint venture. See Note 4.
(2) Includes transactions following the loss of control over YPF EE.

 

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English translation of the condensed interim consolidated financial statements originally filed in Spanish with the Argentine Securities Commission (“CNV”). In case of discrepancy, the condensed interim consolidated financial statements filed with the CNV prevail over this translation

 

YPF SOCIEDAD ANONIMA

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF MARCH 31, 2018 AND COMPARATIVE INFORMATION (UNAUDITED)

   LOGO

31.    BALANCES AND TRANSACTIONS WITH RELATED PARTIES (Cont.)

 

Additionally, in the normal course of business, and taking into consideration that YPF is the main energy company in Argentina, the Group’s client/suppliers portfolio encompasses both private sector entities as well as national public sector entities. As required by IAS 24 “Related party disclosures”, the following are the most important of the above mentioned major transactions:

 

            Balances     Transactions  
            Credits / (Liabilities)     Income /(Costs)  
                        For the three-month
period ended March 31,
 

Customers / Suppliers

   Ref.      March 31,
2018
    December 31,
2017
    2018     2017  

MINEM

     (1) (13)        494       —         563       —    

MINEM

     (2) (13)        14,232       13,417       —         1,857  

MINEM

     (3) (13)        85       190       36       19  

MINEM

     (4) (13)        164       162       23       26  

Ministry of Transport

     (5) (13)        1,823       840       1,469       1,240  

Secretariat of Industry

     (6) (13)        —         24       —         —    

CAMMESA

     (7)        4,865       4,444       5,541       5,575  

CAMMESA

     (8)        (356     (316     (623     (486

ENARSA

     (9)        2,080       698       1,544       604  

ENARSA

     (10)        (1,507     (1,591     (32     (28

Aerolíneas Argentinas S.A. and Austral Líneas Aéreas Cielos del Sur S.A.

     (11)        1,007       946       1,348       988  

Aerolíneas Argentinas S.A. and Austral Líneas Aéreas Cielos del Sur S.A.

     (12)        (10     —         (8     (4

 

(1) The benefits of the incentive scheme for the Additional Injection of natural gas.
(2) Benefits for the propane gas supply agreement for undiluted propane gas distribution networks.
(3) Benefits for the bottle-to-bottle program.
(4) Temporary economic assistance to Metrogas.
(5) The compensation for providing gas oil to public transport of passengers at a differential price.
(6) Incentive for domestic manufacturing of capital goods, for the benefit of AESA.
(7) The provision of fuel oil and natural gas, and electric power generation.
(8) Purchases of energy.
(9) Rendering of regasification service in the regasification projects of liquefied natural gas in Escobar and Bahía Blanca.
(10) The purchase of natural gas and crude oil.
(11) The provision of jet fuel.
(12) The purchase of miles for the YPF Serviclub program
(13) Income recognized under the guidelines of IAS 20

Additionally, the Group has entered into certain financing and insurance transactions with entities related to the national public sector. Such transactions consist of certain financial transactions that are described in Note 17 to this condensed interim consolidated financial statements, and transactions with Nación Seguros S.A. related to certain insurance policies contracts, and in connection therewith, to the reimbursement from the insurance coverage for the incident mentioned in Note 28.a to the annual consolidated financial statements.

In addition, the Group holds BONAR 2020 (see Note 6 to the annual consolidated financial statements) and 2021, classified as “Investments in financial assets”.

Furthermore, in relation to the investment agreement signed between YPF and Chevron Corporation subsidiaries, YPF has an indirect non-controlling interest in CHNC with which YPF carries out transactions in connection with the above mentioned investment agreement. See Note 29.b to the annual consolidated financial statements and see Note 29.a to this condensed interim consolidated financial statements.

 

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English translation of the condensed interim consolidated financial statements originally filed in Spanish with the Argentine Securities Commission (“CNV”). In case of discrepancy, the condensed interim consolidated financial statements filed with the CNV prevail over this translation

 

YPF SOCIEDAD ANONIMA

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF MARCH 31, 2018 AND COMPARATIVE INFORMATION (UNAUDITED)

   LOGO

31. BALANCES AND TRANSACTIONS WITH RELATED PARTIES (Cont.)

 

The table below discloses the compensation for the Company’s key management personnel, including members of the Board of Directors and vice presidents (managers with executive functions appointed by the Board of Directors), for the three-month period ended March 31, 2018 and 2017:

 

     For the three-month
period ended March 31,
 
     2018(1)      2017(1)  

Short-term employee benefits (2)

     69        56  

Share-based benefits

     11        10  

Post-retirement benefits

     3        2  
  

 

 

    

 

 

 
     83        68  
  

 

 

    

 

 

 

 

(1) Includes the compensation for YPF’s key management personnel which developed their functions during the mentioned period.
(2) Does not include Social Security contributions of 11 for the three-month period ended March 31, 2018 and 2017.

32. EMPLOYEE BENEFIT PLANS AND SIMILAR OBLIGATIONS

Note 2.b.10 to the annual consolidated financial statements describes the main characteristics and accounting treatment for benefit plans implemented by the Group.

 

i. Retirement plan

The total charges recognized under the Retirement Plan resulted in approximately 22 and 18 for the three-month period ended March 31, 2018 and 2017, respectively.

 

ii. Performance Bonus Programs and Performance evaluation

The amount charged to expense related to the Performance Bonus Programs was 462 and 446 for the three-month period ended March 31, 2018 and 2017, respectively.

 

iii. Share-based benefit plan

The amount charged to expense in relation with the share-based plans, which are disclosed according to their nature, was 53 and 26 for the three-month period ended March 31, 2018 and 2017, respectively.

 

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Table of Contents

English translation of the condensed interim consolidated financial statements originally filed in Spanish with the Argentine Securities Commission (“CNV”). In case of discrepancy, the condensed interim consolidated financial statements filed with the CNV prevail over this translation

 

YPF SOCIEDAD ANONIMA

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF MARCH 31, 2018 AND COMPARATIVE INFORMATION (UNAUDITED)

   LOGO

 

33. ASSETS AND LIABILITIES IN CURRENCIES OTHER THAN THE ARGENTINE PESO

 

     March 31, 2018      December 31, 2017  
     Amount in
currencies
other than
the
Argentine
peso
     Exchange
rate in
force(1)
     Total      Amount in
currencies
other than
the
Argentine
peso
     Exchange
rate in
force(1)
     Total  

Noncurrent assets

                 

Other receivables

                 

U.S. Dollar

     8        20.05        160        2        18.55        37  

Trade receivables

                 

U.S. Dollar

     680        20.05        13,634        2        18.55        37  
        

 

 

          

 

 

 

Total noncurrent assets

           13,794              74  
        

 

 

          

 

 

 

Current assets

                 

Trade receivables

                 

U.S. Dollar

     715        20.05        14,336        380        18.55        7,049  

Chilean peso

     10,258        0.03        308        9,836        0.03        295  

Other receivables

                 

U.S. Dollar

     291        20.05        5,835        165        18.55        3,061  

Euro

     —          —          —          5        22.28        111  

Chilean peso

     3,017        0.03        91        4,303        0.03        129  

Swiss franc

     —          —          —          3        19.04        57  

Investments in financial assets

U.S. Dollar

     441        20.05        8,834        697        18.55        12,936  

Cash and cash equivalents

                 

U.S. Dollar

     465        20.05        9,323        526        18.55        9,757  

Chilean peso

     2,447        0.03        73        898        0.03        27  
        

 

 

          

 

 

 

Total current assets

           38,800              33,422  
        

 

 

          

 

 

 

Total assets

           52,594              33,496  
        

 

 

          

 

 

 

Noncurrent liabilities

                 

Provisions

                 

U.S. Dollar

     2,627        20.15        52,934        2,909        18.65        54,253  

Loans

                 

U.S. Dollar

     6,413        20.15        129,218        6,200        18.65        115,628  

Swiss franc

     300        21.06        6,308        300        19.13        5,731  

Other liabilities

                 

U.S. Dollar

     13        20.15        267        14        18.65        269  

Accounts payable

                 

U.S. Dollar

     4        20.15        81        4        18.65        75  
        

 

 

          

 

 

 

Total noncurrent liabilities

           188,808              175,956  
        

 

 

          

 

 

 

Current liabilities

                 

Provisions

                 

U.S. Dollar

     70        20.15        1,411        57        18.65        1,063  

Taxes payable

                 

Chilean peso

     1,394        0.03        42        1,524        0.03        46  

Loans

                 

U.S. Dollar

     1,485        20.15        29,926        1,647        18.65        30,725  

Swiss franc

     6        21.06        118        3        19.13        54  

Salaries and social security

                 

U.S. Dollar

     7        20.15        141        6        18.65        112  

Chilean peso

     113        0.03        3        247        0.03        7  

Other liabilities

                 

U.S. Dollar

     18        20.15        363        125        18.65        2,331  

Accounts payable

                 

U.S. Dollar

     1,218        20.15        24,543        1,149        18.65        21,429  

Euro

     15        24.84        373        18        22.45        404  

Chilean peso

     1,799        0.03        54        1,826        0.03        55  

Swiss franc

     —          —          —          3        19.13        57  

Yen

     15        0.19        3        19        0.17        3  
        

 

 

          

 

 

 

Total current liabilities

           56,977              56,286  
        

 

 

          

 

 

 

Total liabilities

           245,785              232,242  
        

 

 

          

 

 

 

 

(1) Exchange rate in force at March 31, 2018 and December 31, 2017 according to Banco Nación Argentina.

 

41


Table of Contents

English translation of the condensed interim consolidated financial statements originally filed in Spanish with the Argentine Securities Commission (“CNV”). In case of discrepancy, the condensed interim consolidated financial statements filed with the CNV prevail over this translation

 

YPF SOCIEDAD ANONIMA

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF MARCH 31, 2018 AND COMPARATIVE INFORMATION (UNAUDITED)

   LOGO

 

34. SUBSEQUENT EVENTS

As of the date of issuance of these condensed interim consolidated financial statements, there have been no other significant subsequent events besides those mentioned in Notes 26 and 30, whose effect on the Group´s equity and business results as of March 31, 2018 or their disclosure in these condensed interim consolidated financial statements, if applicable, have not been considered in accordance with IFRS.

MIGUEL ANGEL GUTIERREZ

President

 

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

    YPF Sociedad Anónima
Date: May 16, 2018     By:  

/s/ Miguel Angel Gutierrez

    Name:   Miguel Angel Gutierrez
    Title:   President