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, 2017

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

YPF Sociedád Anonima

TABLE OF CONTENTS

 

ITEM

1 Translation of Condensed Interim Consolidated Financial Statements as of March 31, 2017 and Comparative Information.


Table of Contents

LOGO

YPF SOCIEDAD ANONIMA

CONDENSED INTERIM CONSOLIDATED

FINANCIAL STATEMENTS AS OF MARCH 31, 2017

AND COMPARATIVE INFORMATION


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, 2017 AND COMPARATIVE INFORMATION

   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

     10  
4  

Acquisitions and dispositions

     10  
5  

Financial risk management

     11  
6  

Segment information

     11  
7  

Financial instruments by category

     14  
8  

Intangible assets

     15  
9  

Property, plant and equipment

     16  
10  

Investments in associates and joint ventures

     17  
11  

Inventories

     21  
12  

Other receivables

     21  
13  

Trade receivables

     21  
14  

Cash and cash equivalents

     21  
15  

Provisions

     22  
16  

Income Tax

     23  
17  

Loans

     24  
18  

Other liabilities

     26  
19  

Accounts payable

     26  
20  

Revenues

     26  
21  

Costs

     26  
22  

Expenses by nature

     27  
23  

Other operating results, net

     28  
24  

Financial results, net

     28  
25  

Investments in joint operations

     28  
26  

Shareholders’ equity

     29  
27  

Earnings per share

     29  
28  

Deconsolidation of Maxus Entities

     30  
29  

Contingent assets and liabilities

     30  
30  

Contractual commitments

     31  
31  

Main regulations and others

     32  
32  

Balances and transactions with related parties

     35  
33  

Employee benefit plans and share-based payments

     38  
34  

Assets and liabilities in currencies other than the Argentine peso

     39  
35  

Subsequent events

     40  


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, 2017 AND COMPARATIVE INFORMATION

   LOGO

 

GLOSSARY OF TERMS

 

Term

  

Definition

AESA    Subsidiary A-Evangelista S.A.
Annual consolidated financial statements    Consolidated financial statements as of December 31, 2016
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.
CNV    Argentine Securities Commission
Condensed interim consolidated financial statements    Condensed interim consolidated financial statements as of March 31, 2017
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.
Joint venture    Company jointly owned by YPF as provided for in IAS 28
JO    Joint operation
LGS    Argentine General Corporations Law No. 19,550 (T.O. 1984), as amended
MEGA    Joint venture Compañía Mega S.A.
Metroenergía    Subsidiary Metroenergía S.A.
Metrogas    Subsidiary Metrogas S.A.
MINEM    Ministry of Energy and Mining
MMBtu    Million British thermal units
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.
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    Subsidiary 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
YPF SP    Subsidiary YPF Servicios Petroleros S.A.
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, 2017 AND COMPARATIVE INFORMATION

   LOGO

 

LEGAL INFORMATION

Legal address

Macacha Güemes 515 – Ciudad Autónoma de Buenos Aires, Argentina

Fiscal year number 41

Beginning on January 1, 2017

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, on its own, 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 object. 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 the country 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

3,933,127,930

 

 

MIGUEL ANGEL GUTIERREZ

President

 

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, 2017 AND DECEMBER 31, 2016

(Amounts expressed in millions of Argentine Pesos)

   LOGO

 

     Notes      March 31,
2017
     December 31,
2016
 

ASSETS

        

Noncurrent Assets

        

Intangible assets

     8        8,045        8,114  

Property, plant and equipment

     9        297,613        308,014  

Investments in associates and joint ventures

     10        5,591        5,488  

Deferred income tax assets, net

     16        362        564  

Other receivables

     12        1,887        3,909  

Trade receivables

     13        128        87  

Investment in financial assets

     7        7,315        7,737  
     

 

 

    

 

 

 

Total noncurrent assets

        320,941        333,913  
     

 

 

    

 

 

 

Current Assets

        

Inventories

     11        21,032        21,820  

Other receivables

     12        10,161        13,456  

Trade receivables

     13        31,919        33,645  

Investment in financial assets

     7        7,532        7,548  

Cash and cash equivalents

     14        11,424        10,757  
     

 

 

    

 

 

 

Total current assets

        82,068        87,226  
     

 

 

    

 

 

 

TOTAL ASSETS

        403,009        421,139  
     

 

 

    

 

 

 

SHAREHOLDERS’ EQUITY

        

Shareholders’ contributions

        10,429        10,403  

Reserves, other comprehensive income and retained earnings

        104,734        108,352  
     

 

 

    

 

 

 

Shareholders’ equity attributable to shareholders of the parent company

        115,163        118,755  
     

 

 

    

 

 

 

Non-controlling interest

        73        (94
     

 

 

    

 

 

 

TOTAL SHAREHOLDERS’ EQUITY

        115,236        118,661  
     

 

 

    

 

 

 

LIABILITIES

        

Noncurrent Liabilities

        

Provisions

     15        50,317        47,358  

Deferred income tax liabilities, net

     16        39,360        42,465  

Taxes payable

        262        98  

Loans

     17        123,532        127,568  

Other liabilities

     18        319        336  

Accounts payable

     19        1,747        2,187  
     

 

 

    

 

 

 

Total noncurrent liabilities

        215,537        220,012  
     

 

 

    

 

 

 

Current Liabilities

        

Provisions

     15        1,772        1,994  

Income tax liability

        213        176  

Taxes payable

        6,391        4,440  

Salaries and social security

        2,440        3,094  

Loans

     17        22,756        26,777  

Other liabilities

     18        466        4,390  

Accounts payable

     19        38,198        41,595  
     

 

 

    

 

 

 

Total current liabilities

        72,236        82,466  
     

 

 

    

 

 

 

TOTAL LIABILITIES

        287,773        302,478  
     

 

 

    

 

 

 

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY

        403,009        421,139  
     

 

 

    

 

 

 

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

 

 

MIGUEL ANGEL GUTIERREZ

President

 

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 PERIODS ENDED MARCH 31, 2017 AND 2016

(Amounts expressed in millions of Argentine Pesos)

   LOGO

 

            For the three-month
periods ended March 31,
 
     Notes      2017     2016  

Revenues

     20        57,003       46,934  

Cost

     21        (45,798     (40,131
     

 

 

   

 

 

 

Gross profit

        11,205       6,803  
     

 

 

   

 

 

 

Selling expenses

     22        (3,887     (3,045

Administrative expenses

     22        (1,790     (1,486

Exploration expenses

     22        (593     (454

Other operating results, net

     23        (424     (200
     

 

 

   

 

 

 

Operating income

        4,511       1,618  
     

 

 

   

 

 

 

Income from equity interests in associates and joint ventures

     10        22       97  

Financial income

     24        1,612       9,121  

Financial loss

     24        (8,848     (5,480

Other financial results

     24        75       377  
     

 

 

   

 

 

 

Financial results, net

     24        (7,161     4,018  
     

 

 

   

 

 

 

Net (loss) income before income tax

        (2,628     5,733  
     

 

 

   

 

 

 

Income tax

     16        2,820       (4,878
     

 

 

   

 

 

 

Net income for the period

        192       855  
     

 

 

   

 

 

 

Net income for the period attributable to:

       

- Shareholders of the parent company

        25       996  

- Non-controlling interest

        167       (141

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

     27        0.06       2.54  

Other comprehensive income

       

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

        159       (535

Translation differences from YPF (2)

        (3,802     15,942  
     

 

 

   

 

 

 

Total other comprehensive income for the period (3)

        (3,643     15,407  
     

 

 

   

 

 

 

Total comprehensive income for the period

        (3,451     16,262  
     

 

 

   

 

 

 

 

(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) Entirely assigned to the parent company’s shareholders.

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

 

 

MIGUEL ANGEL GUTIERREZ

President

 

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 PERIODS ENDED MARCH 31, 2017 AND 2016

(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  

Balances 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

     —          —          —          —          —         —         —         —          —    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

    

 

 

 

Balances 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
 

Balances 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 (2)

     —          —          —          —          —          —         —         26       —         26  

Settlement of share-based benefit plans

     —          —          —          —          —          —         —         —         —         —    

Other comprehensive income

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

Net income

     —          —          —          —          —          —         25       25       167       192  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balances 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 33.

 

   

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 PERIODS ENDED MARCH 31, 2017 AND 2016 (Cont.)

(Amounts expressed in millions of Argentine Pesos)

   LOGO

 

     For the three-month period ended March 31, 2016  
     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  

Balances at the beginning of the fiscal year

     3,922        6,083        11        18        67        (277     (115     640        10,349  

Accrual of share-based benefit plans(2)

     —          —          —          —          40        —         —         —          40  

Other comprehensive income

     —          —          —          —          —          —         —         —          —    

Net income

     —          —          —          —          —          —         —         —          —    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

   

 

 

    

 

 

 

Balances at the end of the period

     3,922        6,083        11        18        107        (277     (115     640        10,389  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

   

 

 

    

 

 

 

 

     For the three-month period ended March 31, 2016  
     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
 

Balances at the beginning of the fiscal year

     2,007        5        21,264        440        3,648        78,115       4,585        120,413        48       120,461  

Accrual of share-based benefit plans(2)

     —          —          —          —          —          —         —          40        —         40  

Other comprehensive income

     —          —          —          —          —          15,407       —          15,407        —         15,407  

Net income

     —          —          —          —          —          —         996        996        (141     855  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

   

 

 

 

Balances at the end of the period

     2,007        5        21,264        440        3,648        93,522 (1)      5,581        136,856        (93     136,763  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

   

 

 

 

 

(1) Includes 96,924 corresponding to the effect of the translation of the financial statements of YPF and (3,402) 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) See Note 33.

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

 

   

MIGUEL ANGEL GUTIERREZ

President

 

6


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 PERIODS ENDED MARCH 31, 2017 AND 2016

(Amounts expressed in millions of Argentine Pesos)

   LOGO

 

     For the three-month periods
ended March 31,
 
     2017     2016  

Cash flows from operating activities

    

Net income

     192       855  

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

    

Income from equity interest in associates and joint ventures

     (22     (97

Depreciation of property, plant and equipment

     11,764       10,534  

Amortization of intangible assets

     181       153  

Consumption of materials and retirement of property, plant and equipment and intangible assets

     869       1,183  

Charge on income tax

     (2,820     4,878  

Net increase in provisions

     1,671       1,092  

Exchange differences, interest and other (1)

     6,369       (4,666

Share-based benefit plan

     26       40  

Changes in assets and liabilities:

    

Trade receivables

     1,894       (7,966

Other receivables

     3,175       4,518  

Inventories

     111       1,089  

Accounts payable

     1,145       778  

Taxes payables

     2,119       (760

Salaries and social security

     (651     (419

Other liabilities

     (950     100  

Decrease in provisions due to payment/use

     (273     (354

Dividends received

     95       —    

Proceeds from collection of lost profit insurance

     —         607  

Income tax payments

     (245     (740
  

 

 

   

 

 

 

Net cash flows provided by operating activities

     24,650       10,825  
  

 

 

   

 

 

 

Investing activities:(2)

    

Acquisition of property, plant and equipment and intangible assets

     (14,574     (17,303

Contributions and acquisitions of interests in associates and joint ventures

     (272     —    

Investments in financial assets

     (3     (13

Proceeds from collection of damaged property’s insurance

     —         355  

Interests received from financial assets

     8       —    
  

 

 

   

 

 

 

Net cash flows used in investing activities

     (14,841     (16,961
  

 

 

   

 

 

 

Financing activities:(2)

    

Payments of loans

     (8,393     (17,179

Payments of interest

     (5,369     (3,515

Proceeds from loans

     4,769       36,603  

Contributions of non-controlling interests

     —         50  
  

 

 

   

 

 

 

Net cash flows (used in) provided by financing activities

     (8,993     15,959  
  

 

 

   

 

 

 

Translation differences provided by cash and cash equivalents

     (149     953  
  

 

 

   

 

 

 

Net increase in cash and cash equivalents

     667       10,776  
  

 

 

   

 

 

 

Cash and cash equivalents at the beginning of year

     10,757       15,387  

Cash and cash equivalents at the end of period

     11,424       26,163  
  

 

 

   

 

 

 

Net increase in cash and cash equivalents

     667       10,776  
  

 

 

   

 

 

 

 

(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 periods
ended March 31,
 
     2017      2016  

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

     4,204        4,482  

Capital contributions in joint ventures

     10        —    

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

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF MARCH 31, 2017 AND COMPARATIVE INFORMATION

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

   LOGO

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 in force in 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, 2017:

 

LOGO

 

(1) Held directly and indirectly.

 

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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, 2017 AND COMPARATIVE INFORMATION

   LOGO

 

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

 

Organization of the business

As of March 31, 2017, 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 holds equity interests in one exploratory area in Chile. 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, 2017, are presented in accordance with IAS 34 “Interim Financial Reporting”. The adoption of the IFRS, as issued by the IASB, was determined by the Technical Resolution No. 26 (ordered text) issued by FACPCE and CNV regulations.

Also, some additional information required by the LGS and/or regulations of the CNV was included. Such 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 should be read in conjunction with the annual consolidated financial statements of the Group as of December 31, 2016 prepared in accordance with IFRS.

These condensed interim consolidated financial statements were approved by the Board of Directors’ meeting and authorized to be issued on May 9, 2017.

These condensed interim consolidated financial statements corresponding to the three-month period ended on March 31, 2017 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 annual consolidated financial statements. Income for the three-month period ended on March 31, 2017 does not necessarily reflect the proportion of the Group’s full-year income.

2.b) Significant Accounting Policies

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

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. In addition, 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, 2017 AND COMPARATIVE INFORMATION

   LOGO

 

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

 

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 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 Note 2.c) to the annual consolidated financial statements.

2.d) Comparative information

Amounts and other information corresponding to the year ended on December 31, 2016 and to the three-month period ended on March 31, 2016 are an integral part of these condensed interim consolidated financial statements and are intended to be read only in relation to these financial statements.

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, sales of natural gas are still typically higher in the winter for the residential sector of the Argentine domestic market, which has lower prices than other sectors of the Argentine market. Notwithstanding the foregoing, under the “Additional Injection Stimulus Program” (see Note 30.h) to the annual consolidated financial statements), gas producing companies were invited to file with the MINEM before June 30, 2013 projects to increase natural gas injection, in order to receive an increased price of US$ 7.50/MMBTU for all additional natural gas injected. These projects shall comply with the minimum requirements established in the aforementioned Program, and will be subject to approval by the MINEM, including a maximum term of five years, renewable at the request of the beneficiary, upon the decision of the MINEM. If the beneficiary company does not reach the committed production increase in a given month, it will have to make up for such volumes not produced. The natural gas pricing program was incorporated into the Hydrocarbons Law, as modified by Law No. 27,007.

In view of the foregoing, seasonality of the Group operations is not significant.

4. ACQUISITIONS AND DISPOSITIONS

During the three-month period ended March 31, 2017, there have been no significant acquisitions or dispositions.

 

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, 2017 AND COMPARATIVE INFORMATION

   LOGO

 

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 control of 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 year end. See Note 4 to the annual consolidated financial statements.

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 aforementioned organizational structure is based on the way in which the highest authority in the decision-making process analyzes the main financial and operating magnitudes while making decisions about resource allocation and performance assessment also considering the Group’s business strategy.

Upstream

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

It obtains its revenues 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, which includes the receipt of incentives from the Natural Gas Additional Injection Stimulus Program.

Gas and Power

On March 15, 2016, the Gas and Power Executive Vice-presidency was created, and during the previous fiscal year, the complete scope of management of this new business unit was determined.

The Gas and Power segment obtains its income from the development of activities related 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, (iii) the natural gas distribution, and (iv) 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, Gas and Power accrues a fee in its favor with the Upstream segment to carry out such commercialization.

The Gas and Power Executive Vice-presidency assumed, as of 2017, all responsibility for the administration and management of collections related to the Natural Gas Additional Injection Stimulus Program, and therefore began to record revenues derived from sales in the segment, to later be transferred to the Upstream segment as an intersegment operation.

 

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, 2017 AND COMPARATIVE INFORMATION

   LOGO

 

6. SEGMENT INFORMATION (Cont.)

 

Downstream

The Downstream segment develops activities related to: (i) oil refining and petrochemical production, (ii) commercialization of refined and petrochemical products obtained from such processes, (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 in all expenses related to the aforementioned activities, including the oil purchase 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 including 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 market prices.

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

As required by IFRS 8, comparative information has been given retroactive effect by the creation of the new segment.

 

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, 2017 AND COMPARATIVE INFORMATION

   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, 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 income (loss)

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

Income (loss) from equity interests in associates and joint ventures

     —          56        (34     —         —         22  

Depreciation of property, plant and equipment

     9,935        65        1,569       195       —         11,764  

Acquisition of property, plant and equipment

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

Assets

     210,579        36,553        123,151       34,090       (1,364     403,009  

For the three-month period ended March 31, 2016

              

Revenues from sales

     5,897        4,750        35,750       537       —         46,934  

Revenues from intersegment sales

     23,433        706        210       1,661       (26,010     —    
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Revenues

     29,330        5,456        35,960       2,198       (26,010     46,934  
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Operating income (loss)

     4,441        4        (798     (526     (1,503     1,618  

Income from equity interests in associates and joint ventures

     —          66        31       —         —         97  

Depreciation of property, plant and equipment

     9,096        88        1,202       148       —         10,534  

Acquisition of property, plant and equipment

     12,255        457        1,634       395       —         14,741  

As of December 31, 2016

              

Assets

     236,173        25,866        125,536       34,739       (1,175     421,139  

 

(1) Corresponds to the elimination of income among segments of the YPF Group.

 

13


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, 2016 AND COMPARATIVE INFORMATION

   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, 2017 and December 31, 2016, and their allocation to their fair value hierarchies:

 

     As of March 31, 2017  

Financial assets

   Level 1     Level 2      Level 3      Total  

Investments in financial assets:

          

- Mutual funds

     113       —          —          113  

- Government securities

     14,734 (1)      —          —          14,734  
  

 

 

   

 

 

    

 

 

    

 

 

 
     14,847       —          —          14,847  
  

 

 

   

 

 

    

 

 

    

 

 

 

Cash and cash equivalents:

          

- Mutual funds

     5,333       —          —          5,333  
  

 

 

   

 

 

    

 

 

    

 

 

 
     5,333       —          —          5,333  
  

 

 

   

 

 

    

 

 

    

 

 

 
     20,180       —          —          20,180  
  

 

 

   

 

 

    

 

 

    

 

 

 
     As of December 31, 2016  

Financial assets

   Level 1     Level 2      Level 3      Total  

Investments in financial assets:

          

- Mutual funds

     53       —          —          53  

- Government securities

     15,232 (1)      —          —          15,232  
  

 

 

   

 

 

    

 

 

    

 

 

 
     15,285       —          —          15,285  
  

 

 

   

 

 

    

 

 

    

 

 

 

Cash and cash equivalents:

     2,808       —          —          2,808  
  

 

 

   

 

 

    

 

 

    

 

 

 

- Mutual funds

     2,808       —          —          2,808  
  

 

 

   

 

 

    

 

 

    

 

 

 
     18,093       —          —          18,093  
  

 

 

   

 

 

    

 

 

    

 

 

 

 

(1) As of March 31, 2017, 7,315 has been classified as noncurrent and 7,419 as current. As of December 31, 2016, 7,737 has been classified as noncurrent and 7,495 as current.

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

Fair value estimates

From December 31, 2016 until March 31, 2017, 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.

During the three-month period ended March 31, 2017, 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 153,163 and 157,133 as of March 31, 2017 and December 31, 2016, respectively.

The fair value of the following financial assets and financial liabilities do not differ significantly from their book value:

 

    Other receivable

 

    Trade receivables

 

    Cash and cash equivalents

 

    Accounts payable

 

    Other liabilities

 

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, 2017 AND COMPARATIVE INFORMATION

   LOGO

 

8. INTANGIBLE ASSETS

Changes in the Group’s intangible assets for the three-month period ended March 31, 2017 and the year ended December 31, 2016 are as follows:

 

     Service
concession
     Exploration
rights
     Other
intangibles
     Total  

Cost

     9,527        2,990        4,260        16,777  

Accumulated amortization

     5,553        155        3,710        9,418  
  

 

 

    

 

 

    

 

 

    

 

 

 

Balances as of December 31, 2015

     3,974        2,835      550        7,359
  

 

 

    

 

 

    

 

 

    

 

 

 

Cost

           

Increases

     642        75        171        888  

Translation effect

     2,127        612        936        3,675  

Decreases and reclassifications

     (547      (584      127        (1,004

Accumulated amortization

           

Increases

     437        —          280        717  

Translation effect

     1,245        —          848        2,093  

Decreases and reclassifications

     —          (6      —          (6

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

     156        —          54        210  

Translation effect

     (373      (93      (172      (638

Decreases and reclassifications

     —          —          173        173  

Accumulated amortization

           

Increases

     130        —          51        181  

Translation effect

     (227      —          (157      (384

Decreases and reclassifications

     —          —          17        17  

Cost

     11,532        3,000        5,549        20,081  

Accumulated amortization

     7,138        149        4,749        12,036  
  

 

 

    

 

 

    

 

 

    

 

 

 

Balances as of March 31, 2017

     4,394        2,851        800        8,045  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

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, 2017 AND COMPARATIVE INFORMATION

   LOGO

 

9. PROPERTY, PLANT AND EQUIPMENT

 

     March 31, 2017      December 31, 2016  

Net book value of property, plant and equipment

     332,016        345,679  

Provision for obsolescence of materials and equipment

     (1,401      (1,380

Provision for impairment of property, plant and equipment

     (33,002      (36,285
  

 

 

    

 

 

 
     297,613        308,014  
  

 

 

    

 

 

 

Changes in Group’s property, plant and equipment for the three-month period ended March 31, 2017 and the year ended December 31, 2016 are as follows:

 

    Land
and
buildings
    Mineral
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

    13,949       458,066       69,429       3,650       13,478       76,803       3,647       5,603       10,778       2,931       1,573       8,291       668,198  

Accumulated depreciation

    5,920       324,922       41,138       2,392       —         —         —         4,699       6,921       1,181       1,283       5,620       394,076  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balances as of December 31, 2015

    8,029       133,144       28,291       1,258       13,478       76,803       3,647       904       3,857       1,750       290       2,671       274,122  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Cost

                         

Increases

    140       3,831       1       3       6,968       52,610       1,392       25       —         —         2       76       65,048  

Translation effect

    2,975       104,086       16,601       802       2,494       14,602       626       1,260       2,430       —         —         1,658       147,534  

Decreases and reclassifications

    1,365       59,645       26,529       1,096       (8,701     (91,342     (3,687     1,201       1,138       260       187       (60     (12,369

Accumulated depreciation

                         

Increases

    360       40,729       4,312       414       —         —         —         668       642       75       111       318       47,629  

Translation effect

    1,257       73,288       9,288       516       —         —         —         1,052       1,558       —         —         1,142       88,101  

Decreases and reclassifications

    (40     (6,937     (3     (37     —         —         —         (18     (2     45       —         (82     (7,074

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 (1)      57,825       2,266       14,239       52,673       1,978       1,688       5,227       1,890       368       2,967       345,679  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Cost

                         

Increases

    35       353       —         54       1,397       9,259       751       6       —         —         —         95       11,950  

Translation effect

    (546     (19,881     (3,519     (170     (412     (1,617     (90     (250     (459     —         —         (290     (27,234

Decreases and reclassifications

    16       5,439       (987     107       (1,360     (5,990     (328     41       197       54       1       (1     (2,811

Accumulated depreciation

                         

Increases

    121       11,985       1,232       173       —         —         —         124       185       19       18       74       13,931  

Translation effect

    (230     (13,771     (1,714     (101     —         —         —         (201     (290     —         —         (206     (16,513

Decreases and reclassifications

    —         (942     (923     —         —         —         —         35       (7     —         —         (13     (1,850

Cost

    17,934       611,539       108,054       5,542       13,864       54,325       2,311       7,886       14,084       3,245       1,763       9,769       850,316  

Accumulated depreciation

    7,388       429,274       53,330       3,357       —         —         —         6,359       9,007       1,320       1,412       6,853       518,300  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balances as of March 31, 2017

    10,546       182,265 (1)      54,724       2,185       13,864       54,325       2,311 (2)      1,527       5,077       1,925       351       2,916       332,016  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(1) Includes 9,395 and 9,147 of mineral property as of March 31, 2017 and December 31, 2016, respectively.
(2) As of March 31, 2017, there are 35 exploratory wells in progress. During period ended on such date, 7 wells were drilled, 5 wells were charged to exploratory expense and 4 were transferred to proved properties which are included in the account Mineral property, wells and related equipment.

 

16


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, 2017 AND COMPARATIVE INFORMATION

   LOGO

 

9. PROPERTY, PLANT AND EQUIPMENT (Cont.)

 

The Group capitalizes the financial cost as part of the cost of the assets. For the three-month periods ended March 31, 2017 and 2016, the rate of capitalization was 12.54% and 12.38%, respectively, and the amount capitalized amounted to 204 and 302, respectively, for the periods mentioned above.

Set forth below is the evolution of the provision for obsolescence of materials and equipment for the three-month periods ended March 31, 2017 and 2016:

 

     For the three-month periods
ended March 31,
 
     2017      2016  

Amount at beginning of year

     1,380        762  

Increase charged to expenses

     1        —    

Amounts incurred due to utilization

     (4      —    

Transfers and other movements

     68        —    

Translation differences

     (44      98  
  

 

 

    

 

 

 

Amount at end of period

     1,401        860  
  

 

 

    

 

 

 

Set forth below is the evolution of the provision for impairment of property, plant and equipment for three-month periods ended on March 31, 2017 and 2016:

 

     For the three-month periods
ended March 31,
 
     2017      2016  

Amount at beginning of year

     36,285        2,455  

Depreciation(1)

     (2,167      (153

Translation differences

     (1,116      313  
  

 

 

    

 

 

 

Amount at end of period

     33,002        2,615  
  

 

 

    

 

 

 

 

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

10. INVESTMENTS IN ASSOCIATES AND JOINT VENTURES

The Group does not participate in subsidiaries with a significant non-controlling interest. Furthermore, no investments in associates or joint ventures are deemed individually material.

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, 2017 and December 31, 2016:

 

     March 31,
2017
     December 31,
2016
 

Amount of investments in associates

     1,360        1,478  

Amount of investments in joint ventures

     4,243        4,022  

Provision for impairment of investments in associates and joint ventures

     (12      (12
  

 

 

    

 

 

 
     5,591        5,488  
  

 

 

    

 

 

 

Disclosed in investments in associates and joint ventures

     5,591        5,488  

 

17


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, 2017 AND COMPARATIVE INFORMATION

   LOGO

 

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

 

The main movements during the three-month periods ended March 31, 2017 and 2016, which affected the value of the aforementioned investments, correspond to:

 

     2017      2016  

Amount at the beginning of year

     5,488        4,372  

Acquisitions and contributions

     282        —    

Income on investments in associates and joint ventures

     22        97  

Translation differences

     (106      370  

Distributed dividends

     (95      —    
  

 

 

    

 

 

 

Amount at the end of period

     5,591        4,839  
  

 

 

    

 

 

 

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 periods ended March 31, 2017 and 2016. 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 periods
ended March 31,
     For the three-month periods
ended March 31,
 
     2017      2016      2017      2016  

Net income (loss)

     (18      91        40        6  

Other comprehensive income

     (7      19        (99      351  
  

 

 

    

 

 

    

 

 

    

 

 

 

Comprehensive income for the period

     (25      110        (59      357  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

18


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, 2017 AND COMPARATIVE INFORMATION

   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:(9)

                   

YPF International S.A.(7)

    Common     Bs.  100       66,897     Investment   La Plata Street 19, Santa Cruz de la Sierra, República de Bolivia     03-31-17       15       —   (8)      24       100.00

YPF Holdings Inc.(7)

    Common     US$     0.01       810,614     Investment and finance   10333 Richmond Avenue I, Suite 1050, TX, U.S.A.     03-31-17       12,668       (313     (3,038     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     03-31-17       164       127       744       99.99

A-Evangelista S.A.

    Common     $ 1       307,095,088     Engineering and construction services   Macacha Güemes 515, Buenos Aires, Argentina     03-31-17       307       7       1,131       100.00

YPF Servicios Petroleros S.A.

    Common     $ 1       50,000     Wells perforation and/or reparation services   Macacha Güemes 515, Buenos Aires, Argentina     03-31-17       —   (8)      (38     (56     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.     03-31-17       569       517       (858     70.00

YPF Energía Eléctrica S.A.

    Common     $ 1       30,006,540     Exploration, development, industrialization and marketing of hydrocarbons, and generation, transportation and marketing of electric power   Macacha Güemes 515, Buenos Aires, Argentina     12-31-16       30       580       1,736       100.00

YPF Chile S.A.(7)

    Common       —         50,968,649     Lubricants and aviation fuels trading and hydrocarbons research and exploration   Villarica 322; Módulo B1, Qilicura, Santiago     03-31-17       700       —   (8)      1,241       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     03-31-17       459       22       675       51.00

YPF Europe B.V.(7)

    Common     US$ 0.01       15,660,437,309     Investment and finance   Prins Bernardplein 200, 1097 JB, Amsterdam, Holanda     12-31-16       —   (8)      132       12       100.00

YSUR Inversora S.A.U.(10)

    —         —         —       Investment   Macacha Güemes 515, Buenos Aires, Argentina     12-31-16       2,657       (1     5,397       100.00

YSUR Inversiones Petroleras S.A.U.(10)

    —         —         —       Investment   Macacha Güemes 515, Buenos Aires, Argentina     12-31-16       230       —   (8)      391       100.00

YSUR Petrolera Argentina
S.A. (10)

    —         —         —       Exploration, extraction, exploitation, storage, transportation, industrialization and marketing of hydrocarbons, as well as other operations related thereto   Macacha Güemes 515, Buenos Aires, Argentina     12-31-16       634       106       570       100.00

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     03-31-17       17       (5     (22     100.00

 

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, 2017 AND COMPARATIVE INFORMATION

   LOGO

 

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

 

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

 

   

03-31-2017

    12-31-2016  
                     

Information of the issuer

       
   

Description of the Securities

                        Last Financial Statements
Available
             

Name and Issuer

 

Class

  Face
Value
    Amount     Book
value(3)
    Cost (2)    

Main Business

 

Registered Address

  Date   Capital
stock
    Net
profit
(loss)
    Equity     Holding
in
Capital
Stock
    Book
Value(3)
 

Joint ventures:

                         

Compañía Mega S.A.(7) (6)

  Common   $ 1       244,246,140       1,262       —       Separation, fractionation and transportation of natural gas liquids   San Martín 344, P. 10º, Buenos Aires, Argentina   12-31-16     643       1,088       1,849       38.00     1,208  

Profertil S.A.(7)

  Common   $ 1       391,291,320       1,837       —       Production and marketing of fertilizers   Alicia Moreau de Justo 740, P. 3, Buenos Aires, Argentina   12-31-16     783       600       1,052       50.00     1,897  

Refinería del Norte S.A.

  Common   $ 1       45,803,655       431       —       Refining   Maipú 1, P. 2º, Buenos Aires, Argentina   12-31-16     92       (12     861       50.00     468  
       

 

 

   

 

 

                 

 

 

 
          3,530       —                       3,573  
       

 

 

   

 

 

                 

 

 

 

Associates:

                         

Oleoductos del Valle S.A.

  Common   $ 10       4,072,749       177       —       Oil transportation by pipeline   Florida 1, P. 10º, Buenos Aires, Argentina   03-31-17     110       8       480       37.00     174 (1) 

Terminales Marítimas Patagónicas S.A.

  Common   $ 10       476,034       96       —       Oil storage and shipment   Av. Leandro N. Alem 1180, P. 11º, Buenos Aires, Argentina   12-31-16     14       37       292       33.15     94  

Oiltanking Ebytem S.A.

  Common   $ 10       351,167       132       —       Hydrocarbon transportation and storage   Terminal Marítima Puerto Rosales – Provincia de Buenos Aires, Argentina.   12-31-16     12       181       212       30.00     184  

Gasoducto del Pacífico (Argentina) S.A.

  Preferred   $ 1       15,579,578       35       —       Gas transportation by pipeline   San Martín 323, P.13°, Buenos Aires, Argentina   12-31-16     156       100       329       10.00     33  

Central Dock Sud S.A.

  Common   $ 0.01       11,869,095,145       159       126     Electric power generation and bulk marketing   Pasaje Ingeniero Butty 220, P.16°, Buenos Aires, Argentina   12-31-16     1,231       305       1,919       10.25 %(5)      175  

Inversora Dock Sud S.A.

  Common   $ 1       355,270,303       521       415     Investment and finance   Pasaje Ingeniero Butty 220, P.16°, Buenos Aires, Argentina   12-31-16     829       215       1,381       42.86     569  

Oleoducto Trasandino (Argentina) S.A.

  Preferred   $ 1       12,135,167       38       —       Oil transportation by pipeline   Macacha Güemes 515, P.3º, Buenos Aires, Argentina   12-31-16     34       9       96       36.00     37  

YPF Gas S.A

  Common   $ 1       175,997,158       162       —       Gas fractionation, bottling, distribution and transport for industrial and/or residential use   Macacha Güemes 515, P.3º, Buenos Aires, Argentina   09-30-16     176       (25     699       34.00     172  

Other companies:

                         

Other (4)

  —       —         —         753       135     —     —     —       —         —         —         —         489  
       

 

 

   

 

 

                 

 

 

 
          2,073       676                     1,927  
       

 

 

   

 

 

                 

 

 

 
          5,603       676                     5,500  
       

 

 

   

 

 

                 

 

 

 

 

(1) Holding shareholder’s equity, net of intercompany profits (losses).
(2) Cost net of cash dividends and stock redemption.
(3) Holding in shareholders’ equity plus adjustments to conform to YPF accounting principles.
(4) 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., Y-GEN Eléctrica S.R.L., Y-GEN Eléctrica II S.R.L., Y-GEN Eléctrica III S.R.L., Y-GEN Eléctrica IV S.R.L. and Petrofaro S.A.
(5) Additionally, the Company has a 29.99% indirect holding in capital stock through Inversora Dock Sud S.A.
(6) As stipulated by shareholders’ agreement, joint control is held in this company by shareholders.
(7) The U.S. dollar has been defined as the functional currency of this company.
(8) No value is disclosed as the carrying value is less than 1.
(9) In addition, Compañía Minera de Argentina S.A., YPF Services USA Corp., 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 EOG Resources Netherlands B.V. are consolidated.
(10) Companies merged with YPF.

 

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, 2017 AND COMPARATIVE INFORMATION

   LOGO

 

11. INVENTORIES

 

     March 31,
2017
    December 31,
2016
 

Refined products

     13,193       13,390  

Crude oil and natural gas

     5,910       6,551  

Products in process

     463       411  

Construction works in progress for third parties

     118       12  

Raw materials, packaging materials and others

     1,348       1,456  
  

 

 

   

 

 

 
     21,032 (1)      21,820 (1) 
  

 

 

   

 

 

 

 

(1) As of March 31, 2017 and December 31, 2016, the cost of inventories does not exceed their realization net value.

12. OTHER RECEIVABLES

 

     March 31, 2017      December 31, 2016  
     Noncurrent      Current      Noncurrent      Current  

Trade

     —          1,330        —          1,733  

Tax credit and export rebates

     295        1,736        291        4,648  

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

     571        497        2,495        1,703  

Collateral deposits

     1        233        17        214  

Prepaid expenses

     131        1,389        159        702  

Advances and loans to employees

     11        334        12        335  

Advances to suppliers and custom agents (2)

     —          2,392        —          1,691  

Receivables with partners in JO and consortia

     845        1,182        816        1,361  

Miscellaneous

     48        1,109        134        1,111  
  

 

 

    

 

 

    

 

 

    

 

 

 
     1,902        10,202        3,924        13,498  

Provision for other doubtful receivables

     (15      (41      (15      (42
  

 

 

    

 

 

    

 

 

    

 

 

 
     1,887        10,161        3,909        13,456  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

(1) See Note 32 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, 2017      December 31, 2016  
     Noncurrent      Current      Noncurrent      Current  

Accounts receivable and related parties (1)

     128        33,002        87        34,729  

Provision for doubtful trade receivables

     —          (1,083      —          (1,084
  

 

 

    

 

 

    

 

 

    

 

 

 
     128        31,919        87        33,645  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

(1) See Note 32 for information about related parties.

Changes in the provision for doubtful trade receivables

 

     For the three-month periods
ended March 31,
 
     2017      2016  
     Current      Current  

Amount at beginning of year

     1,084        848  

Increases charged to expenses

     35        19  

Decreases charged to income

     (15      (9

Amounts incurred due to payment/utilization

     (3      (1

Translation differences

     (18      66  
  

 

 

    

 

 

 

Amount at end of period

     1,083        923  
  

 

 

    

 

 

 

14. CASH AND CASH EQUIVALENTS

 

     March 31,
2017
     December 31,
2016
 

Cash and banks

     5,620        7,922  

Short-term investments

     471        27  

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

     5,333        2,808  
  

 

 

    

 

 

 
     11,424        10,757  
  

 

 

    

 

 

 

 

(1) See Note 7.

 

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, 2017 AND COMPARATIVE INFORMATION

   LOGO

 

15. PROVISIONS

Changes in the Group’s provisions for the three-month period ended March 31, 2017 and for the fiscal year ended December 31, 2016 are as follows:

 

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

Amount as of December 31, 2015

    10,375       149       1,620       1,400       27,380       429       248       31       39,623       2,009  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Increases charged to expenses

    1,579       335       962       32       3,023       —         97       —         5,661       367  

Decreases charged to income

    (158     (258     —         —         (10     (77     (1     —         (169     (335

Amounts incurred due to payments/utilization

    9       (239     —         (869     (48     (584     —         (13     (39     (1,705

Exchange and translation differences, net

    1,221       7       159       52       6,245       94       26       3       7,651       156  

Deconsolidation of subsidiaries

    (2,213     (11     (1,351     (607     (515     —         (357     (34     (4,436     (652

Reclassifications and other movements

    (1,608     586       (860     860       1,548       695       (13     13       (933     2,154  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Amount as of December 31, 2016

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

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Increases charged to expenses

    720       25       274       —         770       —         —         —         1,764       25  

Decreases charged to income

    —         (133     (6     —         —         —         —         —         (6     (133

Amounts incurred due to payments/utilization

    (3     (18     —         (160     —         (92     —         —         (3     (270

Exchange and translation differences, net

    (297     (7     —         —         (1,256     (12     —         —         (1,553     (19

Reclassifications and other movements

    2,900 (1)      32       (175     175       32       (32     —         —         2,757       175  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Amount as of March 31, 2017

    12,525       468       623       883       37,169       421       —         —         50,317       1,772  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(1) Includes 2,932 of reclassifications from Other liabilities.

Provisions for lawsuits, claims and environmental liabilities are described in Note 14 to the annual consolidated financial statements.

No significant new provisions have been identified for the three-month period ended on March 31, 2017, nor have there been amendments to the evaluations of the ongoing matters as of December 31, 2016, except for the provisions in Note 28.

 

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, 2017 AND COMPARATIVE INFORMATION

   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, 2017 may need to be adjusted in subsequent periods 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 periods ended March 31, 2017 and 2016 is as follows:

 

     For the three-month periods
ended March 31,
 
     2017      2016  

Current income tax

     (139      (261

Deferred income tax

     2,959        (4,617
  

 

 

    

 

 

 
     2,820        (4,878
  

 

 

    

 

 

 

The reconciliation between the charge to income for income tax for the three-month periods ended March 31, 2017 and 2016 and the one that would result from applying the prevailing tax rate on net (loss) income before income tax arising from the consolidated statements of comprehensive income for each year is as follows:

 

     For the three-month periods
ended March 31,
 
     2017     2016  

Net (loss)/income before income tax

     (2,628     5,733  

Statutory tax rate

     35     35
  

 

 

   

 

 

 

Statutory tax rate applied to net income (loss) before income tax

     920       (2,007

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

     3,782       (9,108

Exchange differences

     (2,476     7,585  

Effect of the valuation of inventories

     274       (1,027

Income on investments in subsidiaries, associates and joint ventures

     8       34  

Miscellaneous

     312       (355
  

 

 

   

 

 

 

Income tax expense

     2,820       (4,878
  

 

 

   

 

 

 

Breakdown of deferred tax as of March 31, 2017 and December 31, 2016 is as follows:

 

     March 31,
2017
     December 31,
2016
 

Deferred tax assets

     

Provisions and other non-deductible liabilities

     3,709        3,607  

Tax losses carryforward and other tax credits

     1,034        3,837  

Miscellaneous

     79        82  
  

 

 

    

 

 

 

Total deferred tax assets

     4,822        7,526  
  

 

 

    

 

 

 

Deferred tax liabilities

     

Property, plant and equipment

     (40,114      (45,579

Miscellaneous

     (3,706      (3,848
  

 

 

    

 

 

 

Total deferred tax liabilities

     (43,820      (49,427
  

 

 

    

 

 

 

Total deferred tax, net

     (38,998      (41,901
  

 

 

    

 

 

 

As of March 31, 2017 and December 31, 2016, the Group has classified as deferred tax assets for 362 and 564, respectively, and as deferred tax liability 39,360 and 42,465, 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, 2017 and December 31, 2016, the causes that generate allocations to Other comprehensive income, did not create temporary differences for income tax.

 

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, 2017 AND COMPARATIVE INFORMATION

   LOGO

 

17. LOANS

 

                             March 31, 2017      December 31, 2016  
     Interest rate (1)     Maturity      Noncurrent      Current      Noncurrent      Current  

Argentine pesos:

                     

Negotiable obligations

     19.97   -      27.23     2017-2024        29,044        3,462        29,194        4,400  

Loans(3)

     20.00   -      29.64     2017-2020        1,694        3,809        2,416        1,459  

Account overdraft(5)

     —       -      —         —          —          —          —          4,037  
            

 

 

    

 

 

    

 

 

    

 

 

 
               30,738        7,271        31,610        9,896  
            

 

 

    

 

 

    

 

 

    

 

 

 

Currencies other than the Argentine peso:

                     

Negotiable obligations(2)(4) (6)

     1.29   -      10.00     2017-2028        83,455        3,220        86,116        4,360  

Export pre-financing

     2.00   -      8.07     2017-2019        1,853        5,742        1,908        6,491  

Imports financing

     1.60   -      6.23     2017-2018        —          2,295        —          2,439  

Loans(6)

     1.00   -      8.50     2017-2025        7,486        4,228        7,934        3,591  
            

 

 

    

 

 

    

 

 

    

 

 

 
               92,794        15,485        95,958        16,881  
            

 

 

    

 

 

    

 

 

    

 

 

 
               123,532        22,756        127,568        26,777  
            

 

 

    

 

 

    

 

 

    

 

 

 

 

(1) Annual interest rate in force as of March 31, 2017.
(2) Disclosed net of 637 and 672 corresponding to YPF’s own negotiable obligations repurchased through open market transactions, as of March 31, 2017 and December 2016, respectively.
(3) Includes loans granted by Banco Nación Argentina. As of March 31, 2017, it includes 4,105; 105 of which accrues interest at a BADLAR variable rate plus a spread of 4 percentage points, 2,000 of which accrues interest at a BADLAR variable rate plus a spread of 3.5 percentage points and 2,000 of which accrues interest at a fixed rate of 20 percentage points. As of December 31, 2016, it includes 2,105, 105 of which accrues interest at a variable BADLAR rate plus a margin of 4 percentage points and 2,000 of which accrues interest at a variable BADLAR rate plus a spread of 3.5 percentage points. See Note 32.
(4) Includes 2,812 and 3,253 as of March 31, 2017 and December 31, 2016, 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 1,440 corresponding to overdrafts granted by Banco Nación Argentina as of December 31, 2016. See Note 32.
(6) Includes 4,583 and 4,960 corresponding to financial loans and negotiable obligations secured by cash flows as of March 31, 2017 and December 31, 2016.

The breakdown of the Group’s loans as of the three-month periods ended on March 31, 2017 and 2016 is as follows:

 

     For the three-month periods
ended March 31,
 
     2017      2016  

Amount at beginning of the year

     154,345        105,751  

Proceeds from loans

     4,769        36,603  

Payments of loans

     (8,393      (17,179

Payments of interest

     (5,369      (3,515

Accrued interest(1)

     4,080        3,674  

Exchange differences and translation, net

     (3,144      9,664  
  

 

 

    

 

 

 

Amount at the end of the period

     146,288        134,998  
  

 

 

    

 

 

 

 

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

On April 28, 2017, the General and Extraordinary Shareholders’ Meeting approved the extension of the effective term of the Global Medium Term Notes Program of the Company for a term of 5 years.

 

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, 2017 AND COMPARATIVE INFORMATION

   LOGO

 

17. LOANS (Cont.)

 

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

 

                                  Principal     March 31, 2017     December 31, 2016  

Month

  Year     Principal value    

Ref.

 

Class

 

Interest rate(3)

    Maturity     Noncurrent     Current     Noncurrent     Current  
YPF                                                            

-

    1998     US$ 15     (1)(6)   -   Fixed     10.00     2028       227       9       63       4  

November and December

    2012     $ 2,110     (2)(4)(6)(7)   Class XI   -     —         —         —         —         —         260  

December and March

    2012/3     $ 2,828     (2)(4)(6)(7)   Class XIII   BADLAR plus 4.75%     24.66     2018       1,414       1,437       1,414       1,439  

April

    2013     $ 2,250     (2)(4)(6)(7)   Class XVII   BADLAR plus 2.25%     22.87     2020       2,250       86       2,250       101  

April

    2013     US$ 89     (2)(5)(6)   Class XIX   Fixed     1.29     2017       —         1,368       —         1,413  

June

    2013     $ 1,265     (2)(4)(6)   Class XX   BADLAR plus 2.25%     22.17     2020       1,265       11       1,265       12  

July

    2013     US$ 92     (2)(5)(6)   Class XXII   Fixed     3.50     2020       558       190       576       197  

October

    2013     US$ 150     (2)(6)   Class XXIV   Libor plus 7.50%     8.54     2018       271       550       419       570  

December, February and December

    2013/5     US$ 862     (2)   Class XXVI   Fixed     8.88     2018       12,912       249       13,410       40  

April, February and October

    2014/5/6     US$ 1,522     (2)(4)   Class XXVIII   Fixed     8.75     2024       23,349       315       24,111       509  

March

    2014     $ 500     (2)(6)(7)   Class XXIX   BADLAR     19.97     2020       350       157       500       8  

June

    2014     US$ 66     (2)(5)(6)   Class XXXIII   -     —         —         —         —         —         350  

September

    2014     $ 1,000     (2)(6)(7)   Class XXXIV   BADLAR plus 0.1%     20.86     2024       1,000       5       1,000       76  

September

    2014     $ 750     (2)(4)(6)   Class XXXV   BADLAR plus 3.5%     24.26     2019       750       4       750       64  

February

    2015     $ 950     (2)(6)(7)   Class XXXVI   BADLAR plus 4.74%     26.61     2020       950       35       950       126  

February

    2015     $ 250     (2)(6)(7)   Class XXXVII   -     —         —         —         —         —         260  

April

    2015     $ 935     (2)(4)(6)   Class XXXVIII   BADLAR plus 4.75%     25.23     2020       935       112       935       69  

April

    2015     US$ 1,500     (2)   Class XXXIX   Fixed     8.50     2025       22,872       340       23,617       853  

July

    2015     $ 500     (2)(6)   Class XL   BADLAR plus 3.49%     24.47     2017       —         525       —         529  

September

    2015     $ 1,900     (2)(7)   Class XLI   BADLAR     20.76     2020       1,900       9       1,900       145  

September and December

    2015     $ 1,697     (2)(4)   Class XLII   BADLAR plus 4%     24.76     2020       1,697       9       1,697       148  

October

    2015     $ 2,000     (2)(7)   Class XLIII   BADLAR     26.98     2023       2,000       240       2,000       106  

December

    2015     $ 1,400     (2)   Class XLIV   BADLAR plus 4.75%     24.72     2018       1,400       21       1,400       23  

March

    2016     $ 150     (2)   Class XLV   BADLAR plus 4%     23.99     2017       —         153       —         153  

March

    2016     $ 1,350     (2)(4)   Class XLVI   BADLAR plus 6%     27.23     2021       1,350       28       1,350       152  

March

    2016     US$ 1,000     (2)   Class XLVII   Fixed     8.50     2021       15,340       29       15,840       367  

April

    2016     US$ 46     (2)(5)   Class XLVIII   Fixed     8.25     2020       703       12       726       12  

April

    2016     $ 535     (2)   Class XLlX   BADLAR plus 6%     26.94     2020       535       27       535       33  

July

    2016     $ 11,248     (2)(8)   Class L   BADLAR plus 4%     23.85     2020       11,248       603       11,248       696  

September

    2016     CHF  300     (2)   Class Ll   Fixed     3.75     2019       4.595       88       4,673       45  

Metrogas

                     

January

    2013     US$ 177       Series A-L   Fixed     8.88     2018       2,418       70       2,461       —    

January

    2013     US$ 18       Series A-U   Fixed     8.88     2018       210       —         220       —    
               

 

 

   

 

 

   

 

 

   

 

 

 
                  112,499       6,682       115,310       8,760  
               

 

 

   

 

 

   

 

 

   

 

 

 

 

(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, 2017.
(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 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.

 

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, 2017 AND COMPARATIVE INFORMATION

   LOGO

 

18. OTHER LIABILITIES

 

     March 31, 2017      December 31, 2016  
     Noncurrent      Current      Noncurrent      Current  

Extension of concessions

     319        466        336        508  

Maxus Entities’ agreements

     —          —          —          2,932  

Liabilities for contractual claims

     —          —          —          950  
  

 

 

    

 

 

    

 

 

    

 

 

 
     319        466        336        4,390  
  

 

 

    

 

 

    

 

 

    

 

 

 

19. ACCOUNTS PAYABLE

 

     March 31, 2017      December 31, 2016  
     Noncurrent      Current      Noncurrent      Current  

Trade and related parties (1)

     1,711        37,319        2,145        40,667  

Guarantee deposits

     13        436        13        482  

Payables with partners of JO

     —          —          —          9  

Miscellaneous

     23        443        29        437  
  

 

 

    

 

 

    

 

 

    

 

 

 
     1,747        38,198        2,187        41,595  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

(1) For more information about related parties, see Note 32.

20. REVENUES

 

     For the three-month periods
ended March 31,
 
     2017      2016  

Sales (1)

     58,500        48,418  

Revenues from construction contracts

     483        140  

Turnover tax

     (1,980      (1,624
  

 

 

    

 

 

 
     57,003        46,934  
  

 

 

    

 

 

 

 

(1) Includes 1,857 and 5,230 for the three-month periods ended March 31, 2017 and 2016, respectively, associated with revenues related to the natural gas additional injection stimulus program created by Resolution No.  1/2013 of the Planning and Strategic Coordination Commission of the National Plan of Hydrocarbons Investment. See Note 32.

21. COSTS

 

     For the three-month periods
ended March 31,
 
     2017      2016  

Inventories at beginning of year

     21,820        19,258  

Purchases

     12,263        9,828  

Production costs(1)

     33,424        29,214  

Translation effect

     (677      2,386  

Inventories at end of the period

     (21,032      (20,555
  

 

 

    

 

 

 
     45,798        40,131  
  

 

 

    

 

 

 

 

(1) See Note 22.

 

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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, 2017 AND COMPARATIVE INFORMATION

   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” lines. 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 periods ended March 31, 2017 and 2016:

 

     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        —          1,392  

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

 

     For the three-month period ended March 31, 2016  
     Production
costs(3)
     Administrative
expenses
    Selling
expenses
     Exploration
expenses
     Total  

Salaries and social security taxes

     2,013        566       341        63        2,983  

Fees and compensation for services

     204        336 (2)      90        17        647  

Other personnel expenses

     671        55       25        11        762  

Taxes, charges and contributions(1)

     355        76       687        —          1,118  

Royalties, easements and canons

     4,340        —         6        8        4,354  

Insurance

     179        10       83        —          272  

Rental of real estate and equipment

     1,225        8       117        —          1,350  

Survey expenses

     —          —         —          123        123  

Depreciation of property, plant and equipment

     10,169        143       222        —          10,534  

Amortization of intangible assets

     94        50       9        —          153  

Industrial inputs, consumable materials and supplies

     1,348        9       21        3        1,381  

Operation services and other service contracts

     2,297        80       169        27        2,573  

Preservation, repair and maintenance

     3,685        82       59        10        3,836  

Unproductive exploratory drillings

     —          —         —          188        188  

Transportation, products and charges

     1,605        3       1,024        —          2,632  

Provision for doubtful trade receivables

     —          —         10        —          10  

Publicity and advertising expenses

     —          37       25        —          62  

Fuel, gas, energy and miscellaneous

     1,029        31       157        4        1,221  
  

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 
     29,214        1,486       3,045        454        34,199  
  

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

 

(1) Includes approximately 223 corresponding to export withholdings.
(2) Includes 40 corresponding to fees and remunerations of the Directors and Statutory Auditors of YPF’s Board of Directors. On April 29, 2016, the General and Extraordinary Shareholders’ Meetings of YPF resolved to ratify the fees corresponding to fiscal year 2015 for 140 and to approve as fees on account for such fees and remunerations for the fiscal year 2016 the approximate sum of 127.
(3) The expense recognized in the condensed interim consolidated statement of comprehensive income corresponding to research and development activities amounted to 70.

 

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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, 2017 AND COMPARATIVE INFORMATION

   LOGO

 

23. OTHER OPERATING RESULTS, NET

 

     For the three-month periods
ended March 31,
 
     2017      2016  

Lawsuits

     (636      (182

Miscellaneous

     212        (18
  

 

 

    

 

 

 
     (424      (200
  

 

 

    

 

 

 

24. FINANCIAL RESULTS, NET

 

     For the three-month periods
ended March 31,
 
     2017      2016  

Financial income

     

Interest income

     476        328  

Exchange differences

     1,136        8,793  
  

 

 

    

 

 

 

Total financial income

     1,612        9,121  
  

 

 

    

 

 

 

Financial loss

     

Interest loss

     (4,078      (4,027

Financial accretion

     (806      (724

Exchange differences

     (3,964      (729
  

 

 

    

 

 

 

Total financial costs

     (8,848      (5,480
  

 

 

    

 

 

 

Other financial results

     

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

     75        89  

Gains on derivative financial instruments

     —          288  
  

 

 

    

 

 

 

Total other financial results

     75        377  
  

 

 

    

 

 

 

Other financial results, net

     (7,161      4,018  
  

 

 

    

 

 

 

25. INVESTMENTS IN JOINT OPERATIONS

The assets and liabilities as of March 31, 2017 and December 31, 2016, and expenses for the three-month periods ended on March 31, 2017 and 2016 of JO and other agreements are as follows:

 

     March 31,
2017
     December 31,
2016
 

Noncurrent assets(1)

     56,600        63,145  

Current assets

     969        2,602  
  

 

 

    

 

 

 

Total assets

     57,569        65,747  
  

 

 

    

 

 

 

Noncurrent liabilities

     4,982        5,946  

Current liabilities

     5,931        6,293  
  

 

 

    

 

 

 

Total liabilities

     10,913        12,239  
  

 

 

    

 

 

 
     For the three-month periods
ended March 31,
 
     2017      2016  

Production Cost

     5,326        4,599  

Exploration expenses

     219        207  

 

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

 

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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, 2017 AND COMPARATIVE INFORMATION

   LOGO

 

26. SHAREHOLDERS’ EQUITY

The Company’s subscribed capital as of March 31, 2017, is 3,923 and is represented by 393,312,793 shares of common stock 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, 2017, 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) will also require prior approval by the Argentine Congress.

On April 28, 2017, the General and Extraordinary Shareholders’ Meeting was held, which approved YPF’s financial statements corresponding to the fiscal year ended December 31, 2016 and approved the following in relation to the distribution of profits: a) the complete elimination of the special reserve for initial adjustment for the implementation of IFRS pursuant to the provisions of Article 10, Chapter III, Title IV of the CNV Rules (T.O. 2013), the reserve for future dividends, the reserve for purchase of Company shares and the reserve for investments; b) to fully absorb the losses accumulated in Retained earnings of up to 28,231 against amounts corresponding to discontinued reserves for up to that amount; and c) to allocate the remaining amount of the discontinued reserves as follows: (i) the amount of 100 to establish a reserve to purchase Company shares, in order to make it possible for the Board of Directors to acquire Company shares when they consider it opportune, and to fulfill commitments under the bonus and incentive plans, both currently existing and those that may arise in the future, and (ii) the amount of 716 to a reserve for payment of dividends, authorizing the Board of Directors to determine when to distribute such dividends prior to the end of the fiscal year.

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 earnings per share:

 

     For the three-month periods
ended on March 31,
 
     2017      2016  

Net income

     25        996  

Average number of shares outstanding

     390,550,426        392,101,191  

Basic and diluted earnings per share

     0.06        2.54  

Basic and diluted earnings per share are calculated as shown in Note 2.b.13 to the annual 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, 2017 AND COMPARATIVE INFORMATION

   LOGO

 

28. DECONSOLIDATION OF MAXUS ENTITIES

•    Reorganization process under Chapter 11 of the US Bankruptcy Law of Maxus Entities

On March 28, 2017, in connection with the reorganization proceedings under Chapter 11 of the United States Bankruptcy Code filed by Maxus Energy Corporation, Tierra Solutions Inc., Maxus International Energy Company, Maxus (US) Exploration Company and Gateway Coal Company (collectively, the “Maxus Entities”), the Creditors’ Committee and the Maxus Entities submitted an alternative restructuring plan (the “Alternative Plan”) that does not incorporate the agreement (the “Agreement”) with YPF, jointly with its subsidiaries YPF Holdings, CLH Holdings Inc., YPF International and YPF Services USA Corp (jointly, the “YPF Entities”), to settle any and all claims held by the Maxus Entities against the YPF Entities, including any alter ego claims, all of which claims the YPF Entities believe are without merit.

Under the Alternative Plan, a liquidating trust (the “Liquidating Trust”) may pursue alter ego claims or any other estate claims against the YPF Entities. The Liquidating Trust will be funded by Occidental Chemical Corporation, a creditor of the Maxus Entities.

As YPF does not approve of such Alternative Plan and the Alternative Plan does not contemplate the implementation of the Agreement originally submitted, this situation creates an event of default (“Event of Default”) under the loan granted within the scope of the Agreement with YPF and the YPF Entities (the “DIP Loan”), and on April 10, 2017, YPF Holdings sent a note to communicate this development. Additionally, on April 17, 2017, YPF Holdings communicated that the amounts due under the DIP Loan terms are an approximate total of US$ 12.2 million.

On April 21, 2017, the Judge issued an order to authorize the repayment of amounts due under the terms of the DIP Loan through the approval of the financing offered by Occidental (“Post-petition DIP Facility”) within the scope of the Alternative Plan. The Alternative Plan remains subject to confirmation by the United States Bankruptcy Court of the District of Delaware. The hearing on the confirmation of the Alternative Plan is currently scheduled to begin in late May 2017.

Considering the preceding events mentioned, the Company’s Management, in consultation with its legal advisors, estimates that the Agreement originally submitted has no reasonable prospect of final approval by the Judge and, accordingly, has reassessed the amounts reported considering the existing uncertainties and classified them as provisions in accordance with the accounting policies explained in Note 2.b.7) to the annual consolidated financial statements.

29. CONTINGENT ASSETS AND LIABILITIES

Contingent liabilities and contingent assets are described in Note 28 to the annual consolidated financial statements.

29.a) Contingent assets

No new significant contingent assets have been identified for the three-month period ended March 31, 2017, nor have there been amendments to the evaluations of contingencies pending as of December 31, 2016.

29.b) Contingent liabilities

Development for the three-month period ended on March 31, 2017 are described below:

29.b.1) Environmental claims

•    Asociación Superficiarios de la Patagonia (“ASSUPA”)

In connection with the judicial claims filed by ASSUPA against the companies operating concessions in the Northwestern Basin, on April 19, 2017, YPF was notified of the Court’s ruling to resume the proceedings. The Company will timely respond to the claim by filing all relevant procedural defenses.

 

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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, 2017 AND COMPARATIVE INFORMATION

   LOGO

 

29. CONTINGENT ASSETS AND LIABILITIES (Cont.)

 

29.b.2) Contentious claims

•    Petersen Energía Inversora, S.A.U. and Petersen Energía, S.A.U.

The Appeals Court scheduled a hearing on June 15, 2017 for the parties to be able to verbally explain their arguments.

29.b.3) Claims under the scope of the National Antitrust Commission (“CNDC”)

•     Claims for the sale of diesel to public transportation companies

On March 14, 2017, YPF was notified of SC Resolution No. 137 which, based on the prior opinion given by the CNDC, ordered the case closed for failure to establish collusive behavior by the companies sued and abuse of dominant market position by YPF.

29.b.4) Tax claims

•    Dispute over customs duties

On March 31, 2017, the Company resolved to pay the differences in export duties which had been objected to by several Customs authorities arising from future commitments to deliver crude oil, in accordance with the moratorium provided for by Law No. 27,260. This action made it possible to reduce interest and release the fines applied which were related to the substantial obligation. In that regard, the summaries and processes in which the application of a fine is in disputed when there are no export duties remain ongoing, in which case the fine provided for in Article 954 subsection c) would be applied, which figure amounts to 450 as of the date of these condensed interim consolidated financial statements.

30. CONTRACTUAL COMMITMENTS

Contractual commitments are described in Note 29 to the annual consolidated financial statements. Updates for the three-month period ended March 31, 2017 are described below:

30.a) Concession extension agreements

•    Salta

On April 3, 2017, YPF entered into with the Province of Salta an Amendment Agreement to the one signed on October 23, 2012. The signatories are the same in both Agreements. The Amendment Agreement sets forth that the obligations described in items (i), (ii) and (iv) mentioned in the annual consolidated financial statements have been complied with, and in respect of the obligations referenced in item (v), it sets forth that the same will be replaced by the drilling of 2 development wells for a minimum amount of US$ 26 million. In case the development wells yield satisfactory productive results for YPF and associated companies, and contingent on such results, the parties agreed to drill an additional development well. Execution of this commitment shall be initiated within 90 days of the effective date of the Amendment Agreement, subject to the availability of equipment and the issuance of permits, and shall be finished within 365 calendar days as from the same date. Likewise, YPF and signatory associated companies shall drill an exploration well for an amount of US$ 4 million within 365 calendar days as from the effective date of the Amendment Agreement.

 

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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, 2017 AND COMPARATIVE INFORMATION

   LOGO

 

30. CONTRACTUAL COMMITMENTS (Cont.)

 

30.b) 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 unconventional hydrocarbons in the province of Neuquen, in the Loma Campana area, for the three-month period ended March 31, 2017, 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 1,044. 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, 2017 amounts to 280.

•    Agreement for interest assignment in Aguada de la Arena area

On February 23, 2017, YPF and Petrouruguay S.A. signed a definitive agreement for the transfer of a 20% participating interest in the Aguada de la Arena area located in the province of Neuquén, for a total of US$ 18 million. As a result, YPF has increased its participating interest in the Aguada de la Arena area to 100%.

•    Agreement for the development of Bajada de Añelo area

On February 23, 2017, YPF and O&G Developments Ltd. S.A. (hereinafter “O&G”), an affiliate of Shell Compañía Argentina de Petróleo S.A., executed an agreement through which YPF and O&G agreed on the principal terms and conditions for the joint development of a shale oil and shale gas pilot in two phases, for a joint investment amount of US$ 305.8 million plus VAT, in the Bajada de Añelo area in the province of Neuquén, of which O&G will contribute 97.6% and YPF will contribute 2.4%. O&G will be the operator of the area. The agreement provides for a period of exclusivity for the negotiation and execution of definitive agreements. Once definitive agreements have been signed and certain conditions precedent have been fulfilled, including the relevant regulatory approval of the province of Neuquén authorities, the execution of the project will begin, through which O&G will acquire a 50% participating interest in the exploitation concession that covers an area of 204 km2.

31. 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, 2017 are described below:

31.a) Incentive programs for the production of natural gas

•    Incentive program for investment in development of natural gas production from non-conventional reservoirs

On March 6, 2017, MINEM Resolution No. 46-E/2017 was published in the Official Gazette, which created the “Investment in Natural Gas Production from Non-Conventional Reservoirs Stimulus Program” (hereinafter the “Program”), established in order to stimulate investments in natural gas from non-conventional reservoirs in the Neuquina basin, and in effect as of its publication until December 31, 2021.

The Resolution establishes compensation for the volume of non-conventional gas production from concessions located in the Neuquina basin included in the Program, for which such concessions must first have a specific investment plan approved by the province’s application authority and the Secretariat of Hydrocarbon Resources.

 

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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, 2017 AND COMPARATIVE INFORMATION

   LOGO

 

31. MAIN REGULATIONS AND OTHERS (Cont.)

 

The compensation will be determined by deducting from the effective sales price obtained from sales to the internal market, including conventional and non-conventional natural gas, the minimum sales prices established by the Resolution each year, multiplied by the volumes of production of non-conventional natural gas. The minimum prices established by the Resolution are US$ 7.50 /MMBtu for 2018, US$ 7.00 /MMBtu for 2019, US$ 6.50 /MMBtu for 2020 and US$ 6.00/MMBtu for 2021.

The compensation from the Program will be distributed, for each concession included in the Program, as follows: 88% to the companies and 12% to the province corresponding to each concession included in the Program.

31.b) Regulatory requirements applicable to the natural gas industry

 

Tariff renegotiation

 

i. Transitional Agreement 2017

On March 30, 2017, Metrogas signed a Transitional Agreement (“Transitional Agreement 2017”) with MINEM and the Ministry of Economy which provides for the temporary price and tariff adjustment to the Natural Gas Distribution Public Service, the specific allocation of the amounts set forth therein until the execution of the Memorandum of Agreement for the Comprehensive Contractual Renegotiation and the effective application of the final tariff schemes which result from the General Tariff Review. The Temporary Agreement 2017 is supplemental to the agreement approved by Decree No. 234 dated March 26, 2009, which extends the one approved by Decree No. 445 dated April 1, 2014 and the Transitional Agreement 2016.

The Transitional Agreement 2017, which is not subject to ratification by the National Executive Power, sets forth a temporary tariff scheme as of April 1, 2017 consisting of the readjustment of tariffs pursuant to the necessary guidelines to maintain the continuity of service in order to allow the licensee to manage its operation, maintenance, management and commercialization expenses, the disbursements corresponding to the execution of the mandatory investment plan determined by ENARGAS and to comply with the respective payment obligations, keeping its payment procedure for the purpose of ensuring the continued normal provision of the public service it is responsible for until the effective date of the tariff scheme that derives from the Memorandum of Agreement for the Comprehensive Contractual Renegotiation.

Additionally, the Transitional Agreement 2017 incorporates a Mandatory Investment Plan led by Metrogas.

Finally, Metrogas may not distribute dividends without prior accreditation before the ENARGAS of its comprehensive compliance with the Mandatory Investment Plan.

On March 30, 2017, the MINEM instructed the ENARGAS, by means of Resolution No. 74 - E/2017, to make effective the tariff schemes resulting from the General Tariff Review stated in Article 1 of the MINEM Resolution No. 31 dated March 29, 2016 and carried out as per the provisions in the Memorandum of Agreement for the Comprehensive Contractual Renegotiation entered into with the licensees within the provisions of Law No. 25,561, as amended and supplemented.

In this sense, for the purpose of the gradual and progressive implementation of such measure, it established that the ENARGAS should apply the tariff increases resulting from the Comprehensive Tariff Review in stages according to the following progression: thirty percent (30%) of the increase, as from April 1, 2017; forty percent (40%) of the increase, as from December 1, 2017; and the remaining thirty percent (30%), as from April 1, 2018.

Moreover, and for the cases in which the corresponding Memorandum of Agreement for the Comprehensive Contractual Renegotiation had not become effective, it instructed the ENARGAS to apply to the licensees (among them, Metrogas) a transitional tariff adjustment on account of the Comprehensive Tariff Review.

 

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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, 2017 AND COMPARATIVE INFORMATION

   LOGO

 

31. MAIN REGULATIONS AND OTHER (Cont.)

 

Under the terms of the Transitional Agreement 2017, on March 31, 2017, ENARGAS Resolution No. 4,356/2017 was published in the Official Gazette, whereby the tariff schemes resulting from the Metrogas General Tariff Review and temporary tariff schemes applicable to Metrogas users became effective as of April 1, 2017. By means of differential tariffs, ENARGAS Resolution No. 4,356/2017 determined tariff schemes for those residential users who showed a saving in their consumption equal to or higher than 15% as compared with the same period of year 2015, as well as those which would be applicable to beneficiaries of the “Social Tariff” (MINEM Resolution No. 28/2016 and ENARGAS Resolutions No. I-2,905/2014 and No. 3,784/2016) and the Public Welfare Entities (Law No. 27,218). The tariff schemes corresponding to the “Social Tariff” beneficiaries were rectified by ENARGAS Resolution No. 4,369/2017. Invoicing resulting from the application of the new temporary tariff schemes must comply with the limits set forth in Article 10 of MINEM Resolution No. 212/2016, which are in accordance with the criteria of ENARGAS Resolution No. I-4,044/2016.

Additionally, ENARGAS Resolution No. 4,356/2017 superseded ENARGAS Resolutions No. I-2,407/12 and No. I-3,249/15, which allowed the collection of a fixed amount per invoice under the “FOCEGAS” operation.

Finally, ENARGAS Resolution No. 4,356/2017 approved the Semiannual Adjustment Methodology attached as Annex V and which will become effective jointly with the Memorandum of Agreement for the License Adjustment.

ii. Memorandum of Agreement for the Natural Gas Distribution License Contract

On March 30, 2017, Metrogas signed a Memorandum of Agreement for the Natural Gas Distribution License Contract Adjustment with MINEM and the Ministry of Economy. In the terms provided therein, a number of guidelines were established which shall contemplate the General Tariff Review process (non-automatic mechanisms for the adjustment of the distribution tariff among five-year tariff reviews, criteria for determining the capital base and the rate of return to apply, fees and charges, investment plan, etc.) and, subject to the effective application of the Memorandum of Agreement, it sets forth the suspension and withdrawal of all claims, appeals and lawsuits filed, pending or in the process of execution, whether in administrative, arbitration or judicial venues, in the Argentine Republic or abroad, which are based on or related to the facts or measures taken, regarding the License Contract, as from the Emergency Law and/or the annulment of the PPI (Producer Price Index of the United States of America).

For the effective implementation of the Memorandum of Agreement, this must be ratified by Metrogas Shareholders’ Meeting, in order for the National Executive Power to issue the ratifying Decree of the terms of the Memorandum of Agreement.

The Memorandum of Agreement also states that Metrogas shall commit to make, during the extension term of the license, plus its eventual ten-year extension and within the license area, additional sustainable investments equivalent to the amount of the award granted in the “BG Group Plc. vs. The Argentine Republic (UNC 54 KGA)” arbitration with the proportional percentage that had been established in the payment agreement and excluding the amounts corresponding to interest for a delay in the payment of the award. The plan of additional investments will be determined by ENARGAS at the Company’s proposal, and they shall not be incorporated into the tariff base.

iii. Supplementary Agreement with Natural Gas Producers

By means of Resolution No. 74 – E/2017, MINEM determined the new prices at the Entry Point to the Transportation System for natural gas which shall be applicable as of April 1, 2017 to the user categories therein indicated. Likewise, it determined the new discounted prices at the Entry Point to the Transportation System for residential users of natural gas that show savings in consumption equal to or higher than fifteen percent (15%) as compared to the same period of year 2015. These new prices at the Entry Point to the Transportation System have been contemplated in ENARGAS Resolution No. 4,356/2017.

•    Note from ENARGAS referred to the participation of YPF in Metrogas

On March 30, 2017, YPF filed for reconsideration and requested to render the note null and void and to issue a new decision that sets a reasonable and consistent term with the current reality of the gas market to comply with the provisions of Article 34 of Law No. 24,076.

 

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, 2017 AND COMPARATIVE INFORMATION

   LOGO

 

31. MAIN REGULATIONS AND OTHER (Cont.)

 

•    CNV Regulatory Framework

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 condensed interim 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 34 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 shall not, under any circumstance, offer brokerage services to third parties for transactions in markets under the jurisdiction of the CNV, and it shall also not open operating accounts to third parties to issue orders and trade in markets under the jurisdiction of the CNV.

Besides, in accordance with the provisions of 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 8,522,815 Class B Units of Compass Ahorro Mutual Fund with 24-hour settlement upon redemption, the total value of the Company’s Units as of March 31, 2017, amounts to 19.

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 placed 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.

32. BALANCES AND TRANSACTIONS WITH RELATED PARTIES

The Group enters into operations and transactions with related parties according to general market conditions, which are part of the normal operation of the Group with respect to their purpose and conditions.

The information detailed in the tables below shows the balances with associates and joint ventures as of March 31, 2017 and December 31, 2016 and transactions with the mentioned parties for the three-month periods ended March 31, 2017 and 2016.

 

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 FINANCIAL STATEMENTS

AS OF MARCH 31, 2017 AND COMPARATIVE INFORMATION

   LOGO

 

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

 

     March 31, 2017      December 31, 2016  
     Other
receivables
     Trade
receivables
     Accounts
payable
     Other
receivables
     Trade
receivables
     Accounts
payable
 
     Current      Current      Current      Current      Current      Current  

Joint ventures:

                 

Profertil

     97        204        63        97        162        99  

MEGA

     —          839        87        —          797        80  

Refinor

     —          158        35        —          296        39  

Bizoy S.A.

     5        —          —          9        —          —    

Y-GEN I

     16        1        —          —          2        —    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
     118        1,202        185        106        1,257        218  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Associates:

                 

CDS

     —          111        —          —          108        —    

YPF Gas

     44        495        17        35        375        35  

Oldelval

     —          —          67        —          —          81  

Termap

     —          —          41        —          —          44  

OTA

     —          —          4        —          —          5  

OTC

     2        —          —          2        —          —    

Gasoducto del Pacífico (Argentina) S.A.

     4        —          30        4        —          31  

Oiltanking Ebytem S.A.

     —          —          51        —          —          50  

Emp. Perforaciones de Argentina S.A.

     2        —          —          —          —          —    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
     52        606        210        41        483        246  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
     170        1,808        395        147        1,740        464