FORM
6-K
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
Report
of Foreign Issuer
Pursuant
to Rule 13a-16 or 15d-16 of
the
Securities Exchange Act of 1934
For the
month of August, 2008
Commission
File Number: 001-12102
YPF
Sociedad Anónima
(Exact
name of registrant as specified in its charter)
Av.
Pte. R.S. Peña 777 – 8th Floor
1354
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
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X
|
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
|
X
|
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
|
X
|
Indicate
by check mark whether by furnishing the information
contained
in this Form, the Registrant is also thereby furnishing the information to the
Commission
pursuant
to Rule 12g3-2(b) under the Securities Exchange Act of 1934:
|
Yes
|
No
|
X
|
If “Yes”
is marked, indicate below the file number assigned to the
registrant
in
connection with Rule 12g3-2(b): N/A
YPF
Sociedad Anónima
TABLE OF
CONTENTS
|
Item
|
|
|
1
|
Financial
Statements as of June 30, 2008 and Comparative Information, Report of
Independent Public Accountants and Statutory Audit Committee's
Report
|
Item
1
 SOCIEDAD
ANONIMA
Financial
Statements as of June 30, 2008
and
Comparative Information
Limited Review
Report on Interim Period
Financial
Statements
Statutory
Audit Committee's Report
|
English translation
of the report originally issued in Spanish, except for the omission of certain
disclosures related to formal legal requirements for reporting in Argentina and
the addition of the last paragraph – See Note 13 to the primary financial
statements
Limited Review
Report on Interim
Period Financial
Statements
To
the Board of Directors of
YPF
SOCIEDAD ANONIMA
Av.
Pte. Roque Sáenz Peña 777
Buenos Aires
City
|
1.
|
Identification
of financial statements subject to limited
review
|
We
have reviewed the balance sheet of YPF SOCIEDAD ANONIMA (an Argentine
Corporation) as of June 30, 2008 and the related statements of income, changes
in shareholders' equity and cash flows for the six-month period then ended. We
have also reviewed the consolidated balance sheet of YPF SOCIEDAD ANONIMA and
its controlled and jointly controlled companies as June 30, 2008, and the
related consolidated statements of income and cash flows for the six-month
period then ended, which are presented as supplemental information in
Schedule I. These financial statements are the responsibility of the
Company's Management.
|
2.
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Scope
of our work
|
We
conducted our review in accordance with generally accepted auditing standards in
Argentina for a review of interim period financial statements. A review consists
principally of applying analytical procedures to financial data and making
inquiries of persons responsible for accounting and financial matters. A review
is substantially less in scope than an audit of financial statements, the
objective of which is the expression of an opinion regarding the financial
statements taken as a whole. Accordingly, we do not express such an
opinion.
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3.
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Limited
review report
|
Based on our review,
we are not aware of any material modifications that should be made to the
financial statements of YPF SOCIEDAD ANONIMA referred to in the first paragraph
for them to be in conformity with generally accepted accounting principles in
Argentina.
In
relation to the financial statements as of December 31, 2007 and June 30, 2007,
which are presented for comparative purposes, we issued our unqualified
auditors' report dated March 7, 2008, and our unqualified limited review report
on interim period financial statements dated August 3, 2007,
respectively.
Certain accounting
practices of YPF SOCIEDAD ANONIMA used in preparing the accompanying financial
statements conform to generally accepted accounting principles in Argentina, but
do not conform to generally accepted accounting principles in the United States
of America (see Note 13 to the accompanying financial statements).
Buenos Aires City,
Argentina
August 6,
2008
Deloitte & Co.
S.R.L.
Ricardo C.
Ruiz
Partner
YPF
SOCIEDAD ANONIMA
FINANCIAL
STATEMENTS AS OF JUNE 30, 2008 AND COMPARATIVE INFORMATION
INDEX
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Page
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- Cover
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1
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- Consolidated
balance sheets
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2
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- Consolidated
statements of income
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3
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- Consolidated
statements of cash flows
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4
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- Notes to
consolidated financial statements
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5
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|
- Exhibits
to consolidated financial statements
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16
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- Balance
sheets
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18
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- Statements
of income
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19
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- Statements
of changes in shareholders' equity
|
20
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- Statements
of cash flows
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21
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- Notes to
financial statements
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22
|
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- Exhibits
to financial statements
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48
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- Ratification
of lithographed signatures
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54
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English translation
of the financial statements originally filed in Spanish with the Argentine
Securities Commission (“CNV”),
except for the
inclusion of Note 13 to the primary financial statements in the English
translation.
In
case of discrepancy, the financial statements filed with the CNV prevail over
this translation.
YPF
SOCIEDAD ANONIMA
Avenida Presidente
Roque Sáenz Peña 777 – Ciudad Autómona de Buenos Aires, Argentina
FISCAL
YEARS NUMBER 32 AND 31
BEGINNING
ON JANUARY 1, 2008 AND 2007
FINANCIAL
STATEMENTS AS OF JUNE 30, 2008 AND COMPARATIVE INFORMATION
(The financial
statements as of June 30, 2008 and June 30, 2007 are unaudited)
Principal business
of the Company: exploration, development and production of oil and natural gas
and other minerals and refining, transportation, marketing and distribution of
oil and petroleum products and petroleum derivatives, including petrochemicals,
chemicals and non-fossil fuels, biofuels, and their components, generation of
electric power from hydrocarbons, rendering telecommunications services, as well
as the production, industrialization, processing, marketing, preparation
services, transportation and storage of grains and its derivatives.
Date of registration
with the Public Commerce Register: June 2, 1977.
Duration of the
Company: through June 15, 2093.
Last amendment to
the bylaws: April 24, 2008.
Optional Statutory
Regime related to Compulsory Tender Offer provided by Decree No. 677/2001
art. 24: not incorporated.
Capital
structure as of June 30, 2008
(expressed in
Argentine pesos)
|
Subscribed,
paid-in and
authorized
for stock
exchange
listing
(Note 4 to
primary
financial
statements)
|
||||
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-Shares of
Common Stock, Argentine pesos 10 par value,
1 vote per
share
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3,933,127,930 | |||
1
Schedule
I
1
of 3
English translation
of the financial statements originally filed in Spanish with the Argentine
Securities Commission (“CNV”),
except for the
inclusion of Note 13 to the primary financial statements in the English
translation.
In
case of discrepancy, the financial statements filed with the CNV prevail over
this translation.
YPF
SOCIEDAD ANONIMA AND CONTROLLED AND JOINTLY CONTROLLED COMPANIES
CONSOLIDATED
BALANCE SHEETS AS OF JUNE 30, 2008 AND DECEMBER 31, 2007
(amounts expressed
in millions of Argentine pesos – Note 1 to the primary financial
statements)
(The financial
statements as of June 30, 2008 and June 30, 2007 are unaudited)
|
2008
|
2007
|
|||||||
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Current
Assets
|
||||||||
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Cash
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105 | 196 | ||||||
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Investments
(Note 2.a)
|
519 | 655 | ||||||
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Trade
receivables (Note 2.b)
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3,179 | 3,235 | ||||||
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Other
receivables (Note 2.c)
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2,053 | 4,361 | ||||||
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Inventories
(Note 2.d)
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2,854 | 2,573 | ||||||
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Total current
assets
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8,710 | 11,020 | ||||||
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Noncurrent
Assets
|
||||||||
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Trade
receivables (Note 2.b)
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27 | 32 | ||||||
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Other
receivables (Note 2.c)
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854 | 809 | ||||||
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Investments
(Note 2.a)
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824 | 799 | ||||||
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Fixed assets
(Note 2.e)
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26,342 | 25,434 | ||||||
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Intangible
assets
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7 | 8 | ||||||
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Total
noncurrent assets
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28,054 | 27,082 | ||||||
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Total
assets
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36,764 | 38,102 | ||||||
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Current
Liabilities
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||||||||
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Accounts
payable (Note 2.f)
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4,784 | 4,339 | ||||||
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Loans (Note
2.g)
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2,602 | 471 | ||||||
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Salaries and
social security
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199 | 213 | ||||||
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Taxes
payable
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1,561 | 1,441 | ||||||
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Net advances
from crude oil purchasers
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- | 9 | ||||||
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Reserves
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508 | 466 | ||||||
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Total current
liabilities
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9,654 | 6,939 | ||||||
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Noncurrent
Liabilities
|
||||||||
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Accounts
payable (Note 2.f)
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2,845 | 2,542 | ||||||
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Loans (Note
2.g)
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650 | 523 | ||||||
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Salaries and
social security
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134 | 164 | ||||||
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Taxes
payable
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24 | 21 | ||||||
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Reserves
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1,946 | 1,853 | ||||||
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Total
noncurrent liabilities
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5,599 | 5,103 | ||||||
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Total
liabilities
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15,253 | 12,042 | ||||||
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Shareholders’
Equity
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21,511 | 26,060 | ||||||
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Total
liabilities and shareholders’ equity
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36,764 | 38,102 | ||||||
Notes 1 to 4 and the
accompanying exhibits A and H to Schedule I and the primary financial
statements
of YPF, are an
integral part of and should be read in conjunction with these
statements.
2
Schedule
I
2
of 3
English translation
of the financial statements originally filed in Spanish with the Argentine
Securities Commission (“CNV”),
except for the
inclusion of Note 13 to the primary financial statements in the English
translation.
In
case of discrepancy, the financial statements filed with the CNV prevail over
this translation.
YPF
SOCIEDAD ANONIMA AND CONTROLLED AND JOINTLY CONTROLLED COMPANIES
CONSOLIDATED
STATEMENTS OF INCOME
FOR
THE SIX-MONTH PERIODS ENDED JUNE 30, 2008 AND 2007
(amounts expressed
in millions of Argentine pesos, except for per share amounts in Argentine pesos
– Note 1 to the primary financial statements)
(The financial
statements as of June 30, 2008 and June 30, 2007 are unaudited)
|
2008
|
2007
|
|||||||
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Net
sales
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16,443 | 13,099 | ||||||
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Cost of
sales
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(10,901 | ) | (8,299 | ) | ||||
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Gross
profit
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5,542 | 4,800 | ||||||
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Administrative
expenses (Exhibit H)
|
(429 | ) | (361 | ) | ||||
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Selling
expenses (Exhibit H)
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(1,102 | ) | (992 | ) | ||||
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Exploration
expenses (Exhibit H)
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(218 | ) | (247 | ) | ||||
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Operating
income
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3,793 | 3,200 | ||||||
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Income on
long-term investments
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67 | 29 | ||||||
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Other expense,
net (Note 2.h)
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(241 | ) | (18 | ) | ||||
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Financial
income (expense), net and holding (losses) gains:
|
||||||||
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Gains (losses)
on assets
|
||||||||
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Interests
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75 | 160 | ||||||
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Exchange
differences
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(18 | ) | 59 | |||||
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Holding gains
on inventories
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123 | 119 | ||||||
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Losses on
liabilities
|
||||||||
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Interests
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(189 | ) | (145 | ) | ||||
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Exchange
differences
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279 | (19 | ) | |||||
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Reversal of
impairment of other current assets
|
- | 69 | ||||||
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Net
income before income tax
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3,889 | 3,454 | ||||||
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Income
tax
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(1,635 | ) | (1,310 | ) | ||||
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Net
income
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2,254 | 2,144 | ||||||
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Earnings
per share
|
5.73 | 5.45 | ||||||
Notes 1 to 4 and the
accompanying exhibits A and H to Schedule I and the primary financial
statements
of YPF, are an
integral part of and should be read in conjunction with these
statements.
3
Schedule
I
3
of 3
English translation
of the financial statements originally filed in Spanish with the Argentine
Securities Commission (“CNV”),
except for the
inclusion of Note 13 to the primary financial statements in the English
translation.
In
case of discrepancy, the financial statements filed with the CNV prevail over
this translation.
YPF
SOCIEDAD ANONIMA AND CONTROLLED AND JOINTLY CONTROLLED COMPANIES
CONSOLIDATED
STATEMENTS OF CASH FLOWS
FOR
THE SIX-MONTH PERIODS ENDED JUNE 30, 2008 AND 2007
(amounts expressed
in millions of Argentine pesos – Note 1 to the primary financial
statements)
(The financial
statements as of June 30, 2008 and June 30, 2007 are unaudited)
|
2008
|
2007
|
|||||||
|
Cash
Flows from Operating Activities
|
||||||||
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Net
income
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2,254 | 2,144 | ||||||
|
Adjustments to
reconcile net income to net cash flows provided by operating
activities:
|
||||||||
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Income on
long-term investments
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(67 | ) | (29 | ) | ||||
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Dividends from
long-term investments
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37 | 52 | ||||||
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Reversal of
impairment of
other current assets
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- | (69 | ) | |||||
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Depreciation
of fixed assets
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2,046 | 2,012 | ||||||
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Consumption of
materials and fixed assets retired, net of allowances
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186 | 168 | ||||||
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Increase in
allowances for fixed assets
|
2 | 73 | ||||||
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Income
tax
|
1,635 | 1,310 | ||||||
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Income tax
payments
|
(1,196 | ) | (1,020 | ) | ||||
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Increase in
reserves
|
557 | 271 | ||||||
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Changes in
assets and liabilities:
|
||||||||
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Trade
receivables
|
61 | 2 | ||||||
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Other
receivables
|
2,263 | 59 | ||||||
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Inventories
|
(281 | ) | (460 | ) | ||||
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Accounts
payable
|
499 | 211 | ||||||
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Salaries and
social security
|
(32 | ) | (68 | ) | ||||
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Taxes
payable
|
(269 | ) | (160 | ) | ||||
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Net advances
from crude oil purchasers
|
(10 | ) | (46 | ) | ||||
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Decrease in
reserves
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(422 | ) | (380 | ) | ||||
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Interests,
exchange differences and others
|
(204 | ) | (19 | ) | ||||
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Net cash flows
provided by operating activities
|
7,059 | (1) | 4,051 | (1) | ||||
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Cash
Flows used in Investing Activities
|
||||||||
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Acquisitions
of fixed assets
|
(2,816 | ) | (2,529 | ) | ||||
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Investments
(non cash and equivalents)
|
1 | (10 | ) | |||||
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Net cash flows
used in investing activities
|
(2,815 | ) | (2,539 | ) | ||||
|
Cash
Flows used in Financing Activities
|
||||||||
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Payment of
loans
|
(697 | ) | (355 | ) | ||||
|
Proceeds from
loans
|
3,018 | 501 | ||||||
|
Dividends
paid
|
(6,789 | ) | (2,360 | ) | ||||
|
Net cash flows
used in financing activities
|
(4,468 | ) | (2,214 | ) | ||||
|
Decrease
in Cash and Equivalents
|
(224 | ) | (702 | ) | ||||
|
Cash and
equivalents at the beginning of year
|
847 | 1,087 | ||||||
|
Cash and
equivalents at the end of period
|
623 | 385 | ||||||
|
Decrease
in Cash and Equivalents
|
(224 | ) | (702 | ) | ||||
For
supplemental information on cash and equivalents, see Note 2.a.
|
(1)
|
Includes (25)
and (55) corresponding to interest payments for the six-month periods
ended June 30, 2008 and June 30, 2007,
respectively.
|
Notes 1 to 4 and the
accompanying exhibits A and H to Schedule I and the primary financial
statements
of YPF, are an
integral part of and should be read in conjunction with these
statements.
4
Schedule
I
English translation
of the financial statements originally filed in Spanish with the Argentine
Securities Commission (“CNV”),
except for the
inclusion of Note 13 to the primary financial statements in the English
translation.
In
case of discrepancy, the financial statements filed with the CNV prevail over
this translation.
YPF
SOCIEDAD ANONIMA AND CONTROLLED AND JOINTLY CONTROLLED COMPANIES
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
FOR
THE SIX-MONTH PERIOD ENDED JUNE 30, 2008 AND COMPARATIVE
INFORMATION
(amounts expressed
in millions of Argentine pesos – Note 1 to the primary financial
statements, except where otherwise indicated)
(The financial
statements as of June 30, 2008 and June 30, 2007 are unaudited)
|
1.
|
CONSOLIDATED
FINANCIAL STATEMENTS
|
Under General
Resolution No. 368 from the Argentine Securities Commission (“CNV”),
YPF Sociedad Anónima (the “Company” or “YPF”) discloses its consolidated
financial statements, included in Schedule I, preceding its primary financial
statements. Consolidated financial statements are supplemental information and
should be read in conjunction with the primary financial
statements.
|
a)
|
Consolidation
policies:
|
Following the
methodology established by Technical Resolution No. 21 of the Argentine
Federation of Professional Councils in Economic Sciences (“F.A.C.P.C.E.”), the
Company has consolidated its balance sheets and the related statements of income
and cash flows as follows:
|
-
|
Investments
and income (loss) related to controlled companies in which YPF has the
number of votes necessary to control corporate decisions are substituted
for such companies’ assets, liabilities, net revenues, cost and expenses,
which are aggregated to the Company’s balances after the elimination of
intercompany profits, transactions, balances and other consolidation
adjustments.
|
|
-
|
Investments
and income (loss) related to companies in which YPF holds joint control
are consolidated line by line on the basis of the Company’s proportionate
share in their assets, liabilities, net revenues, cost and expenses,
considering intercompany profits, transactions, balances and other
consolidation adjustments.
|
Investments in
companies under control and joint control are detailed in Exhibit C to the
primary financial statements.
|
b)
|
Financial
statements used for consolidation:
|
The consolidated
financial statements are based upon the last available financial statements of
those companies in which YPF holds control or joint control, taking into
consideration, if applicable, significant subsequent events and transactions,
available management information and transactions between YPF and the related
companies which could have produced changes to their shareholders’
equity.
5
|
c)
|
Valuation
criteria:
|
In addition to the
valuation criteria disclosed in the notes to YPF primary financial statements,
the following additional valuation criteria have been applied in the preparation
of the consolidated financial statements:
Fixed
assets
Properties on
foreign unproved reserves have been valued at cost and translated into pesos as
detailed in Note 2.d to the primary financial statements. Capitalized costs
related to unproved properties are reviewed periodically by Management to ensure
the carrying value does not exceed their estimated recoverable
value.
Salaries
and Social Security – Pension Plans and other Postretirement and Postemployment
Benefits
As of December 31,
2007, YPF Holdings Inc., which has operations in the United States of
America, had three trustee defined–benefit pension plans and postretirement and
postemployment benefits.
During March 2008,
YPF Holdings Inc. entered into certain contracts with Prudential Insurance
Company (“Prudential”) to settle the liability associated with two
defined-benefit pension plans, paying a premium amount of US$ 115 million.
Prudential assumed the liabilities under these pension plans as of March 20,
2008.
The funding policy
related to the remaining pension plan is to contribute amounts to the plan
sufficient to meet the minimum funding requirements under governmental
regulations, plus such additional amounts as Management may determine to be
appropriate.
YPF Holdings Inc.
provides certain health care and life insurance benefits for eligible retired
employees, and also certain insurance, and other postemployment benefits for
eligible individuals in case employment is terminated by YPF Holdings Inc.
before their normal retirement. YPF Holdings Inc. accrues the estimated cost of
retiree benefit payments during employees’ active service periods. Employees
become eligible for these benefits if they meet minimum age and years of service
requirements. YPF Holdings Inc. accounts for benefits provided when the minimum
service period is met, payment of the benefit is probable and the amount of the
benefit can be reasonably estimated.
The benefits related
to the mentioned plans were valued at net present value and accrued based on the
years of active service of employees. The net liability for defined-benefits and
postretirement plans is disclosed as non-current liabilities in the “Salaries
and social security” account and is the amount resulting from the sum of: the
present value of the obligation, net of the fair value of the plan assets (if
funded) and net of the unrecognized actuarial losses generated since December
31, 2003. The unrecognized actuarial losses and gains are recognized as expense
during the expected average remaining work of the employees participating in the
plans and the life expectancy of the retired employees. The Company updates the
actuarial assumptions at the end of each year.
YPF Holdings Inc.
also has a noncontributory supplemental retirement plan for executive officers
and other selected key employees. Other postretirement and postemployment
benefits are recorded as claims are incurred.
As of June 30, 2008,
the unrecognized actuarial losses amount to 20 and are associated with one
pension plan and other post employment benefits effective as of that
date.
6
Recognition
of revenues and costs of construction activities
Revenues and costs
related to construction activities are accounted by the percentage of completion
method. When adjustments in contract values or estimated costs are determined,
any change from prior estimates is reflected in earnings in the current period.
Anticipated losses on contracts in progress are expensed as soon as they become
evident.
|
2.
|
ANALYSIS
OF THE MAIN ACCOUNTS OF THE CONSOLIDATED FINANCIAL
STATEMENTS
|
Details regarding
the significant accounts included in the accompanying consolidated financial
statements are as follows:
Consolidated
Balance Sheets Accounts as of June 30, 2008 and December 31, 2007
|
a)
Investments:
|
2008
|
2007
|
||||||||||||||
|
Current
|
Noncurrent
|
Current
|
Noncurrent
|
|||||||||||||
|
Short-term
investments and government securities
|
519 | (1) | 170 | (3) | 655 | (1) | 168 | (3) | ||||||||
|
Long-term
investments
|
- | 853 | (2) | - | 837 | (2) | ||||||||||
|
Allowance for
reduction in value of holdings in long-term investments
|
- | (199 | )(2) | - | (206 | ) (2) | ||||||||||
| 519 | 824 | 655 | 799 | |||||||||||||
|
(1)
|
Includes 518
and 651 as of June 30, 2008 and December 31, 2007, respectively, with an
original maturity of less than three
months.
|
|
(2)
|
In addition to
the amounts detailed in Exhibit C to the primary financial statements,
includes interest in Gas Argentino S.A. (“GASA”). As of June 30, 2008,
GASA must initiate a new debt restructuring process with its creditors,
due to the intention expressed by the Fund Marathon of concluding the
agreement celebrated on December 7, 2005. This option was contemplated in
the mentioned agreement.
|
|
(3)
|
Corresponds to
restricted cash as of June 30, 2008, and December 31, 2007, which
represents bank deposits used to pay labor claims and deposits used as
guarantees given to government
agencies.
|
|
b)
Trade receivables:
|
2008
|
2007
|
||||||||||||||
|
Current
|
Noncurrent
|
Current
|
Noncurrent
|
|||||||||||||
|
Accounts
receivable
|
3,223 | 27 | 3,142 | 32 | ||||||||||||
|
Related
parties
|
373 | - | 533 | - | ||||||||||||
| 3,596 | 27 | 3,675 | 32 | |||||||||||||
|
Allowance for
doubtful trade receivables
|
(417 | ) | - | (440 | ) | - | ||||||||||
| 3,179 | 27 | 3,235 | 32 | |||||||||||||
7
| c) Other receivables: |
2008
|
2007
|
||||||||||||||
|
Current
|
Noncurrent
|
Current
|
Noncurrent
|
|||||||||||||
|
Deferred
income tax
|
- | 470 | - | 517 | ||||||||||||
|
Tax credits
and export rebates
|
800 | 19 | 931 | 15 | ||||||||||||
|
Trade
|
151 | - | 97 | - | ||||||||||||
|
Prepaid
expenses
|
134 | 48 | 111 | 60 | ||||||||||||
|
Concessions
charges
|
17 | 56 | 17 | 79 | ||||||||||||
|
Related
parties
|
387 | (1) | 112 | (1) | 2,681 | (1) | - | |||||||||
|
Loans to
clients
|
17 | 105 | 14 | 90 | ||||||||||||
|
Advances to
suppliers
|
121 | - | 132 | - | ||||||||||||
|
From joint
ventures and other agreements
|
78 | - | 62 | - | ||||||||||||
|
Miscellaneous
|
478 | 96 | 438 | 98 | ||||||||||||
| 2,183 | 906 | 4,483 | 859 | |||||||||||||
|
Allowance for
other doubtful accounts
|
(130 | ) | - | (122 | ) | - | ||||||||||
|
Allowance for
valuation of other receivables to their estimated realizable
value
|
- | (52 | ) | - | (50 | ) | ||||||||||
| 2,053 | 854 | 4,361 | 809 | |||||||||||||
|
|
(1)
|
In addition to
the amounts detailed in Note 3.c to the primary financial statements,
mainly includes 170 with Central Dock Sud S.A., which accrues interest
between 5.42% and 7.28% and 224 with Repsol Netherlands Finance B.V.,
which accrues interest at 2.70% as of June 30, 2008 and 51 with Repsol
Netherlands Finance B.V. as of December 31,
2007.
|
|
d)
Inventories:
|
2008
|
2007
|
||||||
|
Refined
products
|
1,711 | 1,612 | ||||||
|
Crude oil and
natural gas
|
791 | 646 | ||||||
|
Products in
process
|
36 | 46 | ||||||
|
Raw materials,
packaging materials and others
|
316 | 269 | ||||||
| 2,854 | 2,573 | |||||||
|
e)
Fixed assets:
|
2008
|
2007
|
||||||
|
Net book value
of fixed assets (Exhibit A)
|
26,389 | 25,481 | ||||||
|
Allowance for
unproductive exploratory drilling
|
(3 | ) | (3 | ) | ||||
|
Allowance for
obsolescence of material and equipment
|
(44 | ) | (44 | ) | ||||
| 26,342 | 25,434 | |||||||
|
f)
Accounts payable:
|
2008
|
2007
|
||||||||||||||
|
Current
|
Noncurrent
|
Current
|
Noncurrent
|
|||||||||||||
|
Trade
|
3,490 | 20 | 3,131 | 21 | ||||||||||||
|
Hydrocarbon
wells abandonment obligations
|
429 | 2,635 | 395 | 2,316 | ||||||||||||
|
Related
parties
|
325 | - | 140 | - | ||||||||||||
|
From joint
ventures and other agreements
|
352 | - | 373 | - | ||||||||||||
|
Environmental
liabilities
|
114 | 152 | 137 | 166 | ||||||||||||
|
Miscellaneous
|
74 | 38 | 163 | 39 | ||||||||||||
| 4,784 | 2,845 | 4,339 | 2,542 | |||||||||||||
8
|
g)
Loans:
|
2008
|
2007
|
||||||||||||||||||||||
|
Interest
rates (1)
|
Principal
maturity
|
Current
|
Noncurrent
|
Current
|
Noncurrent
|
|||||||||||||||||||
|
Negotiable
Obligations – YPF
|
9.13 – 10.00 | % | 2009 – 2028 | 319 | 196 | 14 | 523 | |||||||||||||||||
|
Related
parties
|
4.90 – 15.50 | % | 2008 – 2010 | 64 | 454 | - | - | |||||||||||||||||
|
Other bank
loans and other creditors
|
3.37 – 22.00 | % | 2008 – 2009 | 2,219 | - | 457 | - | |||||||||||||||||
| 2,602 | 650 | 471 | 523 | |||||||||||||||||||||
|
|
(1)
|
Annual fixed
interest rate as of June 30, 2008.
|
Consolidated
Statements of Income as of June 30, 2008 and 2007
|
h)
Other expense, net:
|
Income
(Expense)
|
|||||||
|
2008
|
2007
|
|||||||
|
Reserve for
pending lawsuits and other claims
|
- | (10 | ) | |||||
|
Environmental
remediation
|
(256 | ) | (57 | ) | ||||
|
Miscellaneous
|
15 | 49 | ||||||
| (241 | ) | (18 | ) | |||||
|
3.
|
COMMITMENTS
AND CONTINGENCIES IN CONTROLLED
COMPANIES
|
Laws and regulations
relating to health and environmental quality in the United States of America
affect nearly all of the operations of YPF Holdings Inc. These laws and
regulations set various standards regulating certain aspects of health and
environmental quality, provide for penalties and other liabilities for the
violation of such standards and establish in certain circumstances remedial
obligations.
YPF Holdings Inc.
believes that its policies and procedures in the area of pollution control,
product safety and occupational health are adequate to prevent unreasonable risk
of environmental and other damage, and of resulting financial liability, in
connection with its business. Some risk of environmental and other damage is,
however, inherent in particular operations of YPF Holdings Inc. and, as
discussed below, Maxus Energy Corporation (“Maxus”) and Tierra Solutions Inc.
(“Tierra”) (both controlled by YPF Holdings Inc.) could have certain potential
liabilities associated with operations of Maxus’ former chemical subsidiary. YPF
Holdings Inc. cannot predict what environmental legislation or regulations will
be enacted in the future or how existing or future laws or regulations will be
administered or enforced. Compliance with more stringent laws or regulations, as
well as more vigorous enforcement policies of the regulatory agencies, could in
the future require material expenditures by YPF Holdings Inc. for the
installation and operation of systems and equipment for remedial measures,
possible dredging requirements and in certain other respects. Also, certain laws
allow for recovery of natural resource damages from responsible parties and
ordering the implementation of interim remedies to abate an imminent and
substantial endangerment to the environment. Potential expenditures for any such
actions cannot be reasonably estimated.
In the following
discussion, references to YPF Holdings Inc. include, as appropriate and solely
for the purpose of this information, references to Maxus and
Tierra.
In connection with
the sale of Maxus’ former chemical subsidiary, Diamond Shamrock Chemicals
Company (“Chemicals”) to Occidental Petroleum Corporation (“Occidental”) in
1986, Maxus agreed to indemnify Chemicals and Occidental from and against
certain liabilities relating to the business or activities of Chemicals prior to
the selling date, September 4, 1986 (“the selling date”), including
environmental liabilities relating to chemical plants and waste disposal sites
used by Chemicals prior to the selling date.
9
As of June 30, 2008,
reserves for the environmental contingencies and other claims totaled
approximately 589. YPF Holdings Inc.’s Management believes it has adequately
reserved for all environmental contingencies, which are probable and can be
reasonably estimated as of such time; however, changes in circumstances,
including new information or new requirements of governmental entities, could
result in changes, including additions, to such reserves in the future. The most
significant contingencies are described in the following
paragraphs:
Newark, New Jersey. A consent
decree, previously agreed upon by the U.S. Environmental Protection Agency
(“EPA”), the New Jersey Department of Environmental Protection and Energy
(“DEP”) and Occidental, as successor to Chemicals, was entered in 1990 by the
United States District Court of New Jersey and requires implementation of a
remedial action plan at Chemicals’ former Newark, New Jersey agricultural
chemicals plant. The approved remedy has been completed and paid for by Tierra.
This project is in the operation and maintenance phase. YPF Holdings Inc. has
reserved approximately 46 as of June 30, 2008, in connection with such
activities.
Passaic River, New Jersey.
Studies have indicated that sediments of the Newark Bay watershed,
including the Passaic River adjacent to the former Newark plant, are
contaminated with hazardous chemicals from many sources. These studies suggest
that older and more contaminated sediments located adjacent to the former Newark
plant generally are buried under more recent sediment deposits. Maxus, forced to
act on behalf of Occidental, negotiated an agreement with the EPA under which
Tierra has conducted further testing and studies near the plant site. While some
work remains in a pending state, these studies were substantially completed in
2005.
In
addition:
|
-
|
YPF Holdings
Inc. has been conducting similar studies under their own auspices for
several years.
|
|
-
|
The EPA and
other agencies are addressing the lower Passaic River in a joint federal,
state, local and private sector cooperative effort designated as the Lower
Passaic River Restoration Project (“PRRP”). Tierra, along with other
entities, participated in an initial remedial investigation and
feasibility study (“RIFS”) in connection with the PRRP. The parties are
discussing the possibility of further work with the EPA. The entities have
agreed the allocations of costs associated with the RIFS, based on a
number of considerations.
|
|
-
|
In 2003, the
DEP issued Directive No. 1 to Occidental and Maxus and certain of their
respective related entities as well as other third parties. Directive No.
1 seeks to address natural resource damages allegedly resulting from
almost 200 years of historic industrial and commercial development of the
lower 17 miles of the Passaic River and a part of its watershed. Directive
No. 1 asserts that the named entities are jointly and severally liable for
the alleged natural resource damages without regard to fault. The DEP has
asserted jurisdiction in this matter even though all or part of the lower
Passaic River has been designated as a Superfund site and is a subject of
the PRRP. Directive No. 1 calls for the following actions: interim
compensatory restoration, injury identification, injury quantification and
value determination. Maxus and Tierra responded to Directive No. 1 setting
forth good faith defenses. Settlement discussions between the DEP and the
named entities have been held; however, no agreement has been reached or
is assured.
|
|
-
|
In 2004, the
EPA and Occidental entered into an administrative order on consent (the
“AOC”) pursuant to which Tierra (on behalf of Occidental) has agreed to
conduct testing and studies to characterize contaminated sediment and
biota in the Newark Bay. The initial field work on this study, which
includes testing in the Newark Bay, has been substantially completed.
Discussions with the EPA regarding additional work that might be required
are underway. EPA has notified other companies in relation to the
contamination of the Newark Bay. Nowadays, Tierra is holding meetings with
these companies to organize the coalition of a group similar to the
Passaic´s, in order to share the costs associated with works in the Newark
Bay. Additionally, Tierra, acting on behalf of Occidental, is performing a
separate RIFS to characterize sediment contamination and evaluate
remediations, if necessary, in certain portions of the Hackensack River,
the Arthur Kill River, and the Kill van Kull
River.
|
10
|
-
|
In December
2005, the DEP issued a directive to Tierra, Maxus and Occidental directing
said parties to pay the State of New Jersey’s costs of developing a Source
Control Dredge Plan focused on allegedly dioxin-contaminated sediment in
the lower six-mile portion of the Passaic River. The development of this
plan is estimated by the DEP to cost approximately US$ 2 million.
This directive was issued even though this portion of the lower Passaic
River is a subject of the PRRP. The DEP has advised the recipients that
(a) it is engaged in discussions with the EPA regarding the subject matter
of the directive, and (b) they are not required to respond to the
directive until otherwise notified. Additionally, in December 2005, the
DEP sued YPF Holdings Inc., Tierra, Maxus and other several companies,
besides to Occidental, in connection with the dioxin contamination
allegedly emanating from Chemicals’ former Newark plant and contaminating
the lower portion of the Passaic River, Newark Bay, other nearby waterways
and surrounding areas. The DEP seeks remediation of natural resources
damaged and punitive damages and other matters. The defendants have made
responsive pleadings and filings. The Court has recently denied motions to
dismiss by Occidental Chemical Corporation, Tierra and Maxus. However, the
motion to dismiss by the Company on local jurisdiction grants remains
still pending.
|
|
-
|
In June 2007,
EPA released a draft Focused Feasibility Study (the “FFS”) that outlines
several alternatives for remedial action in the lower eight miles of the
Passaic River. These alternatives range from no action, which would result
in comparatively little cost, to extensive dredging and capping, which
according to the draft FFS, EPA estimated could cost from US$ 0.9 billion
to US$ 2.3 billion and are all described by EPA as involving proven
technologies that could be carried out in the near term, without extensive
research. Tierra, in conjunction with the other parties of the PRRP group,
submitted comments on the draft FFS to EPA, as did other interested
parties. In September 2007, EPA announced its intention to spend further
time considering these comments, to issue a proposed plan for public
comment by the middle of 2008 and to select a clean-up plan in the last
quarter of 2008. Tierra will respond to any further EPA proposal as may be
appropriate at the time.
|
|
-
|
In August
2007, the National Oceanic Atmospheric Administration (“NOAA”) sent a
letter to the parties of the PRRP group, including Tierra and Occidental,
requesting that the group enters into an agreement to conduct a
cooperative assessment of natural resources damages in the Passaic River
and Newark Bay. The PRRP group has responded through its common counsel
requesting that discussions relating to such agreement be postponed until
2008, due in part to the pending FFS proposal by EPA. Tierra will continue
to participate in the PRRP group with regard to this matter. In January
2008, the NOAA sent a letter to YPF S.A., YPF Holdings Inc., CLH Holdings
Inc. and other entities, designating them as potentially responsible party
(“PRP”).
|
|
-
|
In June 2008,
the EPA, Occidental, and Tierra entered into an AOC, pursuant to which
Tierra (on behalf of Occidental) will undertake a removal action of
sediment from the Passaic River in the vicinity of the former Diamond
Alkali facility. This action will result in the removal of approximately
200,000 cubic yards of sediment, which will be carried out in two
different phases. The first phase, which will encompass the removal of
40,000 cubic yards, is scheduled for completion within 30 months, from the
effective date of the AOC (June 2008). The second phase involves the
removal of approximately 160,000 cubic yards of sediment. This second
phase will start once the first one is completed. As of June 30, 2008, the
due date of this phase is not estimated. During the removal action,
contaminants not produced by the former Diamond plant, such as PCBs and
mercury, will necessarily be removed along with dioxin. Although having
recognized the estimated costs related to all works mentioned above, YPF
Holdings and its subsidiaries may seek cost recovery from the parties
responsible for such contamination, provided contaminants’ origins were
not from the Diamond Alkali plant. However, as of June 30, 2008, it is not
possible to make any predictions regarding the likelihood of success or
the funds potentially recoverable in a cost-recovery
action.
|
11
As of June 30, 2008,
there are approximately 274 reserved in connection with the foregoing matters
related to the Passaic River and surrounding area, comprising the estimated
costs for studies, the YPF Holdings Inc.’s best estimate of the cash flows it
could incur in connection with remediation activities considering the studies
performed by Tierra, the estimated costs related to the agreement, and in
addition certain other matters related to Passaic River and the Newark Bay.
However, it is possible that other works, including interim remedial measures,
may be ordered. In addition, the development of new information on the
imposition of natural resource damages, or remedial actions differing from the
scenarios that YPF Holdings Inc. has evaluated could result in additional costs
to the amount currently reserved.
Hudson County, New Jersey.
Until 1972, Chemicals operated a chromite ore processing plant at Kearny, New
Jersey (“Kearny Plant”). According to the
DEP, wastes from these ore processing operations were used as fill material at a
number of sites in and near Hudson County. The DEP and Occidental, as successor
to Chemicals, signed an administrative consent order with the DEP in 1990 for
investigation and remediation work at certain chromite ore residue sites in
Kearny and Secaucus, New Jersey.
Tierra, on behalf of
Occidental, is presently performing the work and funding Occidental’s share of
the cost of investigation and remediation of these sites and is providing
financial assurance in the amount of US$ 20 million for performance of the
work. The ultimate cost of remediation is uncertain. Tierra submitted its
remedial investigation reports to the DEP in 2001, and the DEP continues to
review the report.
Additionally, in May
2005, the DEP took two actions in connection with the chrome sites in Hudson and
Essex Counties. First, the DEP issued a directive to Maxus, Occidental and two
other chromium manufacturers directing them to arrange for the cleanup of
chromite ore residue at three sites in New Jersey City and the conduct of a
study by paying the DEP a total of US$ 20 million. While YPF Holdings Inc.
believes that Maxus is improperly named and there is little or no evidence that
Chemicals’ chromite ore residue was sent to any of these sites, the DEP claims
these companies are jointly and severally liable without regard to fault.
Second, the State of New Jersey filed a lawsuit against Occidental and two other
entities in state court in Hudson County seeking, among other things, cleanup of
various sites where chromite ore residue is allegedly located, recovery of past
costs incurred by the state at such sites (including in excess of
US$ 2 million allegedly spent for investigations and studies) and,
with respect to certain costs at 18 sites, treble damages. The DEP claims that
the defendants are jointly and severally liable, without regard to fault, for
much of the damages alleged. In February 2008, the parties reached a conceptual
agreement on a possible settlement that remains subject to further agreement on
terms and conditions. As a result YPF Holdings Inc. has reserved 21 (which are
included in the amount of 98 disclosed in the following
paragraphs).
In November 2005,
several environmental groups sent a notice of intent to sue the owners of the
properties adjacent to the former Kearny Plant (the “Adjacent Property”),
including among others Tierra, under the Resource Conservation and Recovery Act.
The stated purpose of the lawsuit, if filed, would be to require the noticed
parties to carry out measures to abate alleged endangerments to health and the
environment emanating from the Adjacent Property. The parties have entered into
an agreement that addresses the concerns of the environmental groups, and these
groups have agreed, at least for now, not to file suit.
Pursuant to a
request of the DEP, in the second half of 2006, Tierra and other parties tested
the sediments in a portion of the Hackensack River near the former Kearny Plant.
Whether additional work will be required, is expected to be determined once the
results of this testing have been analyzed.
In March 2008, the
DEP approved an interim response action workplan for work to be performed at the
Kearny Plant by Tierra and the Adjacent Property by Tierra in conjunction with
other parties. As a result YPF Holdings Inc. has reserved 23 (which are included
in the amount of 98 disclosed in the following paragraphs).
As of June 30, 2008,
there are approximately 98 reserved in connection with the foregoing
chrome-related matters. The study of the levels of chromium in New Jersey has
not been finalized, and the DEP is still reviewing the proposed action levels.
The cost of addressing these chrome-related matters could increase depending
upon the final soil action levels, the DEP’s response to Tierra’s reports and
other developments.
12
Painesville, Ohio. In
connection with the operation until 1976 of one chromite ore processing plant
(“Chrome Plant”), from Chemicals, the Ohio Environmental Protection Agency
(“OEPA”) ordered to conduct a RIFS at the former Painesville’s Plant area.
Tierra has agreed to participate in the RIFS as required by the OEPA. Tierra
submitted the remedial investigation report to the OEPA, which report was
finalized in 2003. Tierra is submitting required feasibility reports separately.
In addition, the OEPA has approved certain work, including the remediation of
specific sites within the former Painesville Works area and work associated with
the development plans discussed below (the “Remediation Work”). The Remediation
Work has begun. As the OEPA approves additional projects for the site of the
former Painesville Works, additional amounts may need to be
reserved.
Over ten years ago,
the former Painesville Works site was proposed for listing on the national
Priority List under the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended (“CERCLA”), however, the EPA has stated that
the site will not be listed so long as it is satisfactorily addressed pursuant
to the Director’s Order and OEPA’s programs. As of the date of issuance of these
financial statements, the site has not been listed. YPF Holdings Inc. has
reserved a total of 24 as of June 30, 2008 for its estimated share of the cost
to perform the RIFS, the remediation work and other operation and maintenance
activities at this site. The scope and nature of any further investigation or
remediation that may be required cannot be determined at this time; however, as
the RIFS progresses, YPF Holdings Inc. will continuously assess the condition of
the Painesville’s plants works site and make any changes, including additions,
to its reserve as may be required.
Third Party Sites. Pursuant
to settlement agreements with the Port of Houston Authority and other parties,
Tierra and Maxus are participating (on behalf of Chemicals) in the remediation
of property adjoining Chemicals’ former Greens Bayou facility where DDT and
certain other chemicals were manufactured. As of June 30, 2008, YPF Holdings
Inc. has reserved 51 for its estimated share of future remediation activities
associated with the Greens Bayou facility. Additionally, negotiations have been
initiated in connection with claims for natural resources damages. The amount of
natural resources damages and the party’s obligations in respect thereof are
unknown at the present time.
In June 2005, the
EPA designated Maxus as a PRP at the Milwaukee Solvay Coke & Gas site in
Milwaukee, Wisconsin. The basis for this designation is Maxus alleged status as
the successor to Pickands Mather & Co. and Milwaukee Solvay Coke Co.,
companies that the EPA has asserted are former owners or operators of such site.
Preliminarily works in connection with the RIFS of this site commenced in the
second half of 2006. YPF Holdings Inc. has reserved 1 as of June 30, 2008 for
its estimated share of the costs of the RIFS. YPF Holdings Inc. lacks sufficient
information to determine additional exposure or costs, if any; it might have in
respect of this site.
Maxus has agreed to
defend Occidental, as successor to Chemicals, in respect of the Malone Services
Company Superfund site in Galveston County, Texas. This site is a former waste
disposal site where Chemicals is alleged to have sent waste products prior to
September 1986. It is the subject of enforcement activities by the EPA. Although
Occidental is one of many PRPs that have been identified and have agreed to an
AOC, Tierra (which is handling this matter on behalf of Maxus) presently
believes the degree of Occidental’s alleged involvement as successor to
Chemicals is relatively small.
Chemicals has also
been designated as a PRP with respect to a number of third party sites where
hazardous substances from Chemicals’ plant operations allegedly were disposed or
have come to be located. At several of these, Chemicals has no known exposure.
Although PRPs are typically jointly and severally liable for the cost of
investigations, cleanups and other response costs, each has the right of
contribution from other PRPs and, as a practical matter, cost sharing by PRPs is
usually effected by agreement among them. As of June 30, 2008, YPF Holdings Inc.
has reserved 7 in connection with its estimated share of costs related to
certain sites and the ultimate cost of other sites cannot be estimated at this
time.
13
Black Lung Benefits Act
Liabilities. The Black Lung Benefits Act provides monetary and medical
benefits to miners disabled with black lung disease, and also provides benefits
to the dependents of deceased miners if black lung disease caused or contributed
to the miner’s death. As a result of the operations of its coal-mining
subsidiaries, YPF Holdings Inc. is required to provide insurance of this benefit
to former employees and their dependents. As of June 30, 2008, YPF Holdings Inc.
has reserved 26 in connection with its estimate of these
obligations.
Legal Proceedings. In 2001,
the Texas State Controller assessed Maxus approximately US$ 1 million in
Texas state sales taxes for the period of September 1, 1995 through December 31,
1998, plus penalty and interest. In August 2004, the administrative law judge
issued a decision affirming approximately US$ 1 million of such assessment,
plus penalty and interest. YPF Holdings Inc. believes the decision is erroneous,
but has paid the revised tax assessment, penalty and interest (a total of
approximately US$ 2 million under protest). Maxus filed a suit in Texas
state court in December 2004 challenging the administrative decision. The matter
will be reviewed by a trial de novo in the court action.
In 2002, Occidental
sued Maxus and Tierra in state court in Dallas, Texas seeking a declaration that
Maxus and Tierra have the obligation under the agreement pursuant to which Maxus
sold Chemicals to Occidental to defend and indemnify Occidental from and against
certain historical obligations of Chemicals, including claims related to “Agent
Orange” and vinyl chloride monomer, notwithstanding the fact that said agreement
contains a 12-year cut-off for defense and indemnity obligations with respect to
most litigation. Tierra was dismissed as a party, and the matter was tried in
May 2006. The trial court decided that the 12-year cut-off period did not apply
and entered judgment against Maxus. This decision was affirmed by the Court of
Appeals in February 2008. Maxus has petitioned the Supreme Court of Texas for
review. This lawsuit was denied. This decision will require Maxus to accept
responsibility of various matters which it has refused indemnification since
1998 which could result in the incurrence of material costs in addition to YPF
Holdings Inc.’s current reserves for this matter. This decision will also
require Maxus to reimburse Occidental for past costs on these matters. Maxus
believes that its current reserves are adequate for these past costs. Maxus is
currently evaluating the decision of the Court of Appeals. As of June 30, 2008
YPF Holdings Inc. has reserved 45 in respect to this matter.
In March 2005, Maxus
agreed to defend Occidental, as successor to Chemicals, in respect of an action
seeking the contribution of costs incurred in connection with the remediation of
the Turtle Bayou waste disposal site in Liberty County, Texas. The plaintiffs
alleged that certain wastes attributable to Chemicals found their way to the
Turtle Bayou site. Trial for this matter was bifurcated, and in the liability
phase Occidental and other parties were found severally, and not jointly, liable
for waste products disposed of at this site. Trial in the allocation phase of
this matter was completed in the second quarter of 2007, and the court has
entered a decision setting Occidental’s liability at 15.96% of those costs
incurred by one of the plaintiffs. Occidental’s motion for reconsideration of a
portion of this decision has been filed with the court, and the parties are
awaiting the court’s decision on this and other post-judgment motions. As of
June 30, 2008, YPF Holdings Inc. has reserved 11 in respect of this
matter.
YPF Holdings Inc.,
including its subsidiaries, is a party to various other lawsuits, the outcomes
of which are not expected to have a material adverse effect on YPF’s financial
condition. YPF Holdings Inc. reserves legal contingences that are probable and
can be reasonably estimated.
YPF Holdings Inc.
has entered into various operating agreements and capital commitments associated
with the exploration and development of its oil and gas properties which are not
material except those for the Neptune Prospect. On March 16, 2008, the Company
was notified that a structural anomaly was identified in at least one of the
pontoons of the Neptune Platform. As of the date of the issuance of those
financial statements, remediation activities are substantially completed, and
production has started gradually since July 2008. Total commitments related to
the development of the Neptune Prospect located in the vicinity of the Atwater
Valley Area, Blocks 573, 574, 575, 617 and 618 are US$ 22 million for 2008,
US$ 5 million for 2009, US$ 4 million for 2010, US$ 3 million for
2011, US$ 2 million for 2012 and thereafter.
14
|
4.
|
CONSOLIDATED
BUSINESS SEGMENT INFORMATION
|
The Company
organizes its business into four segments which comprise: the exploration and
production, including contractual purchases of natural gas and crude oil
purchases arising from service contracts and concession obligations, as well as
crude oil intersegment sales, natural gas and its derivatives sales and electric
power generation (“Exploration and Production”); the refining, transport,
purchase and marketing of crude oil to unrelated parties and refined products
(“Refining and Marketing”); the petrochemical operations (“Chemical”); and other
activities, not falling into these categories, are classified under “Corporate
and Other”, which principally includes corporate administration costs and
assets, construction activities and environmental remediation activities related
to YPF Holdings Inc. preceding operations (Note 3).
Operating income
(loss) and assets for each segment have been determined after intersegment
adjustments.
|
Exploration
and Production
|
Refining
and
Marketing
|
Chemical
|
Corporate
and
Other
|
Consolidation
Adjustments
|
Total
|
|||||||||||||||||||
|
Six-month
period ended June 30, 2008
|
||||||||||||||||||||||||
|
Net sales to
unrelated parties
|
2,198 | 11,279 | 1,349 | 121 | - | 14,947 | ||||||||||||||||||
|
Net sales to
related parties
|
523 | 973 | - | - | - | 1,496 | ||||||||||||||||||
|
Net
intersegment sales
|
5,715 | 571 | 542 | 203 | (7,031 | ) | - | |||||||||||||||||
|
Net
sales
|
8,436 | 12,823 | 1,891 | 324 | (7,031 | ) | 16,443 | |||||||||||||||||
|
Operating
income (loss)
|
2,010 | 1,525 | 658 | (328 | ) | (72 | ) | 3,793 | ||||||||||||||||
|
Income on
long-term investments
|
57 | 10 | - | - | - | 67 | ||||||||||||||||||
|
Depreciation
|
1,758 | 209 | 54 | 25 | - | 2,046 | ||||||||||||||||||
|
Acquisitions
of fixed assets
|
2,629 | 327 | 64 | 147 | - | 3,167 | ||||||||||||||||||
|
Assets
|
21,463 | 9,904 | 2,179 | 4,065 | (847 | ) | 36,764 | |||||||||||||||||
|
Six-month
period ended June 30, 2007
|
||||||||||||||||||||||||
|
Net sales to
unrelated parties
|
1,607 | 8,885 | 1,213 | 56 | - | 11,761 | ||||||||||||||||||
|
Net sales to
related parties
|
331 | 1,007 | - | - | - | 1,338 | ||||||||||||||||||
|
Net
intersegment sales
|
6,057 | 880 | 418 | 169 | (7,524 | ) | - | |||||||||||||||||
|
Net
sales
|
7,995 | 10,772 | 1,631 | 225 | (7,524 | ) | 13,099 | |||||||||||||||||
|
Operating
income (loss)
|
2,155 | 1,087 | 321 | (301 | ) | (62 | ) | 3,200 | ||||||||||||||||
|
Income on
long-term investments
|
19 | 10 | - | - | - | 29 | ||||||||||||||||||
|
Depreciation
|
1,761 | 184 | 44 | 23 | - | 2,012 | ||||||||||||||||||
|
Acquisitions
of fixed assets
|
2,050 | 321 | 58 | 100 | - | 2,529 | ||||||||||||||||||
|
Year
ended December 31, 2007
|
||||||||||||||||||||||||
|
Assets
|
19,893 | 11,199 | 2,220 | 5,421 | (631 | ) | 38,102 | |||||||||||||||||
Export sales, net of
withholdings taxes, for the six-month periods ended June 30, 2008 and 2007 were
4,155 and 4,172, respectively. Export sales were mainly to the United States of
America, Brazil and Chile.
15
Schedule
I
Exhibit
A
English translation
of the financial statements originally filed in Spanish with the Argentine
Securities Commission (“CNV”),
except for the
inclusion of Note 13 to the primary financial statements in the English
translation.
In
case of discrepancy, the financial statements filed with the CNV prevail over
this translation.
YPF
SOCIEDAD ANONIMA AND CONTROLLED AND JOINTLY CONTROLLED COMPANIES
CONSOLIDATED
BALANCE SHEET AS OF JUNE 30, 2008 AND COMPARATIVE INFORMATION
FIXED
ASSETS EVOLUTION
(amounts expressed
in millions of Argentine pesos – Note 1 to the primary financial
statements)
(The financial
statements as of June 30, 2008 and June 30, 2007 are unaudited)
|
2008
|
||||||||||||||||||||
|
Cost
|
||||||||||||||||||||
|
Main
account
|
Amounts
at beginning of year
|
Translation
net effect (5)
|
Increases
|
Net
decreases, transfers and reclassifications
|
Amounts
at end of period
|
|||||||||||||||
|
Land and
buildings
|
2,391 | - | - | 45 | 2,436 | |||||||||||||||
|
Mineral
property, wells and related equipment
|
51,595 | (25 | ) | 351 | 1,733 | 53,654 | ||||||||||||||
|
Refinery
equipment and petrochemical plants
|
9,227 | - | 3 | 84 | 9,314 | |||||||||||||||
|
Transportation
equipment
|
1,887 | - | - | 13 | 1,900 | |||||||||||||||
|
Materials and
equipment in warehouse
|
791 | - | 362 | (298 | ) | 855 | ||||||||||||||
|
Drilling and
work in progress
|
4,617 | 1 | 2,273 | (1,662 | ) | 5,229 | ||||||||||||||
|
Exploratory
drilling in progress
|
147 | - | 147 | (116 | ) | 178 | ||||||||||||||
|
Furniture,
fixtures and installations
|
622 | - | 4 | (1 | ) | 625 | ||||||||||||||
|
Selling
equipment
|
1,406 | - | 1 | 19 | 1,426 | |||||||||||||||
|
Other
property
|
377 | (1 | ) | 26 | (20 | ) | 382 | |||||||||||||
|
Total
2008
|
73,060 | (25 | ) | 3,167 | (2) | (203 | )(1) | 75,999 | ||||||||||||
|
Total
2007
|
61,939 | 3 | 2,529 | 5,045 | (1)(6) | 69,516 | ||||||||||||||
|
2008
|
2007
|
|||||||||||||||||||||||||||||||
|
Depreciation
|
||||||||||||||||||||||||||||||||
|
Main
account
|
Accumulated
at beginning of year
|
Net
decreases, transfers and reclassifications
|
Depreciation
rate
|
Increases
|
Accumulated
at end of period
|
Net
book value as of
06-30-08
|
Net
book value as of
06-30-07
|
Net
book value as of
12-31-07
|
||||||||||||||||||||||||
|
Land and
buildings
|
1,108 | (1 | ) | 2 | % | 27 | 1,134 | 1,302 | 1,277 | 1,283 | ||||||||||||||||||||||
|
Mineral
property, wells and related equipment
|
37,131 | (2 | ) | (4) | 1,732 | 38,861 | 14,793 | (3) | 13,425 | (3) | 14,464 | (3) | ||||||||||||||||||||
|
Refinery
equipment and petrochemical plants
|
6,139 | (2 | ) | 4 – 10 | % | 202 | 6,339 | 2,975 | 3,000 | 3,088 | ||||||||||||||||||||||
|
Transportation
equipment
|
1,324 | (1 | ) | 4 – 5 | % | 30 | 1,353 | 547 | 561 | 563 | ||||||||||||||||||||||
|
Materials and
equipment in warehouse
|
- | - | - | - | - | 855 | 645 | 791 | ||||||||||||||||||||||||
|
Drilling and
work in progress
|
- | - | - | - | - | 5,229 | 4,467 | 4,617 | ||||||||||||||||||||||||
|
Exploratory
drilling in progress
|
- | - | - | - | - | 178 | 129 | 147 | ||||||||||||||||||||||||
|
Furniture,
fixtures and installations
|
523 | (1 | ) | 10 | % | 18 | 540 | 85 | 120 | 99 | ||||||||||||||||||||||
|
Selling
equipment
|
1,056 | - | 10 | % | 29 | 1,085 | 341 | 334 | 350 | |||||||||||||||||||||||
|
Other
property
|
298 | (8 | ) | 10 | % | 8 | 298 | 84 | 80 | 79 | ||||||||||||||||||||||
|
Total
2008
|
47,579 | (15 | )(1) | 2,046 | 49,610 | 26.389 | ||||||||||||||||||||||||||
|
Total
2007
|
39,377 | 4,089 | (1)(6) | 2,012 | 45,478 | 24,038 | 25,481 | |||||||||||||||||||||||||
|
(1)
|
Includes 2 and
73 of net book value charged to fixed assets allowances for the six-month
periods ended June 30, 2008 and 2007,
respectively.
|
|
(2)
|
Includes 351
corresponding to the future cost of hydrocarbon wells abandonment
obligations for the six-month period ended June 30,
2008.
|
|
(3)
|
Includes 764,
920 and 851 of mineral property as of June 30, 2008 and 2007 and December
31, 2007, respectively.
|
|
(4)
|
Depreciation
has been calculated according to the unit of production
method.
|
|
(5)
|
Includes the
net effect of the exchange differences arising from the translation of
fixed assets net book values at beginning of the year in foreign
companies.
|
|
(6)
|
Includes 5,291
of cost and 4,094 of accumulated depreciation corresponding to oil and gas
exploration and producing areas, which were disclosed as held for sale as
of December 31, 2006.
|
16
Schedule
I
Exhibit
H
English translation
of the financial statements originally filed in Spanish with the Argentine
Securities Commission (“CNV”),
except for the
inclusion of Note 13 to the primary financial statements in the English
translation.
In
case of discrepancy, the financial statements filed with the CNV prevail over
this translation.
YPF
SOCIEDAD ANONIMA AND CONTROLLED AND JOINTLY CONTROLLED COMPANIES
CONSOLIDATED
STATEMENTS OF INCOME
FOR
THE SIX-MONTH PERIODS ENDED JUNE 30, 2008 AND 2007
EXPENSES
INCURRED
(amounts expressed
in millions of Argentine pesos – Note 1 to the primary financial
statements)
(The financial
statements as of June 30, 2008 and June 30, 2007 are unaudited)
|
2008
|
2007
|
|||||||||||||||||||||||
|
Production
costs
|
Administrative
expenses
|
Selling
expenses
|
Exploration
expenses
|
Total
|
Total
|
|||||||||||||||||||
|
Salaries and
social security taxes
|
485 | 97 | 98 | 25 | 705 | 604 | ||||||||||||||||||
|
Fees and
compensation for services
|
98 | 166 | 21 | 1 | 286 | 213 | ||||||||||||||||||
|
Other
personnel expenses
|
158 | 47 | 12 | 9 | 226 | 179 | ||||||||||||||||||
|
Taxes, charges
and contributions
|
139 | 13 | 188 | - | 340 | 250 | ||||||||||||||||||
|
Royalties and
easements
|
1,138 | - | 3 | 7 | 1,148 | 984 | ||||||||||||||||||
|
Insurance
|
55 | 3 | 5 | - | 63 | 60 | ||||||||||||||||||
|
Rental of real
estate and equipment
|
189 | 3 | 34 | - | 226 | 185 | ||||||||||||||||||
|
Survey
expenses
|
- | - | - | 50 | 50 | 100 | ||||||||||||||||||
|
Depreciation
of fixed assets
|
1,970 | 23 | 52 | 1 | 2,046 | 2,012 | ||||||||||||||||||
|
Industrial
inputs, consumable materials and supplies
|
279 | 3 | 25 | 2 | 309 | 328 | ||||||||||||||||||
|
Operation
services and other service contracts
|
526 | 10 | 40 | 5 | 581 | 345 | ||||||||||||||||||
|
Preservation,
repair and maintenance
|
917 | 10 | 22 | 1 | 950 | 801 | ||||||||||||||||||
|
Contractual
commitments
|
156 | - | - | - | 156 | 232 | ||||||||||||||||||
|
Unproductive
exploratory drillings
|
- | - | - | 109 | 109 | 73 | ||||||||||||||||||
|
Transportation,
products and charges
|
448 | - | 549 | - | 997 | 838 | ||||||||||||||||||
|
Allowance for
doubtful trade receivables
|
- | - | (22 | ) | - | (22 | ) | 34 | ||||||||||||||||
|
Publicity and
advertising expenses
|
- | 30 | 42 | - | 72 | 62 | ||||||||||||||||||
|
Fuel, gas,
energy and miscellaneous
|
577 | 24 | 33 | 8 | 642 | 372 | ||||||||||||||||||
|
Total
2008
|
7,135 | 429 | 1,102 | 218 | 8,844 | |||||||||||||||||||
|
Total
2007
|
6,072 | 361 | 992 | 247 | 7,672 | |||||||||||||||||||
17
except for the
inclusion of Note 13 to the primary financial statements in the English
translation.
In
case of discrepancy, the financial statements filed with the CNV prevail over
this translation.
YPF
SOCIEDAD ANONIMA
BALANCE
SHEETS AS OF JUNE 30, 2008 AND DECEMBER 31, 2007
(amounts expressed
in millions of Argentine pesos – Note 1)
(The financial
statements as of June 30, 2008 and June 30, 2007 are unaudited)
|
2008
|
2007
|
|||||||
|
Current
Assets
|
||||||||
|
Cash
|
58 | 120 | ||||||
|
Investments
(Note 3.a)
|
255 | 242 | ||||||
|
Trade
receivables (Note 3.b)
|
3,014 | 3,148 | ||||||
|
Other
receivables (Note 3.c)
|
1,819 | 4,937 | ||||||
|
Inventories
(Note 3.d)
|
2,468 | 2,284 | ||||||
|
Total current
assets
|
7,614 | 10,731 | ||||||
|
Noncurrent
Assets
|
||||||||
|
Trade
receivables (Note 3.b)
|
27 | 31 | ||||||
|
Other
receivables (Note 3.c)
|
1,195 | 788 | ||||||
|
Investments
(Note 3.a)
|
2,419 | 2,718 | ||||||
|
Fixed assets
(Note 3.e)
|
24,438 | 23,585 | ||||||
|
Total
noncurrent assets
|
28,079 | 27,122 | ||||||
|
Total
assets
|
35,693 | 37,853 | ||||||
|
Current
Liabilities
|
||||||||
|
Accounts
payable (Note 3.f)
|
4,865 | 5,115 | ||||||
|
Loans (Note
3.g)
|
2,423 | 288 | ||||||
|
Salaries and
social security
|
148 | 167 | ||||||
|
Taxes
payable
|
1,432 | 1,293 | ||||||
|
Net advances
from crude oil purchasers
|
- | 9 | ||||||
|
Reserves
(Exhibit E)
|
319 | 323 | ||||||
|
Total current
liabilities
|
9,187 | 7,195 | ||||||
|
Noncurrent
Liabilities
|
||||||||
|
Accounts
payable (Note 3.f)
|
2,822 | 2,519 | ||||||
|
Loans (Note
3.g)
|
650 | 523 | ||||||
|
Taxes
payable
|
6 | 8 | ||||||
|
Reserves
(Exhibit E)
|
1,517 | 1,548 | ||||||
|
Total
noncurrent liabilities
|
4,995 | 4,598 | ||||||
|
Total
liabilities
|
14,182 | 11,793 | ||||||
|
Shareholders’ Equity
(per corresponding statements)
|
21,511 | 26,060 | ||||||
|
Total
liabilities and shareholders’ equity
|
35,693 | 37,853 | ||||||
Notes 1 to 13 and
the accompanying exhibits A, C, E, F, G and H and Schedule I
are an integral part
of these statements.
18
English translation
of the financial statements originally filed in Spanish with the Argentine
Securities Commission (“CNV”),
except for the
inclusion of Note 13 to the primary financial statements in the English
translation.
In
case of discrepancy, the financial statements filed with the CNV prevail over
this translation.
YPF
SOCIEDAD ANONIMA
STATEMENTS
OF INCOME
FOR
THE SIX-MONTH PERIODS ENDED JUNE 30, 2008 AND 2007
(amounts expressed
in millions of Argentine pesos, except for per share amounts in Argentine pesos
– Note 1)
(The financial
statements as of June 30, 2008 and June 30, 2007 are unaudited)
|
2008
|
2007
|
|||||||
|
Net sales
(Note 3.h)
|
15,161 | 12,191 | ||||||
|
Cost of sales
(Exhibit F)
|
(10,284 | ) | (7,853 | ) | ||||
|
Gross
profit
|
4,877 | 4,338 | ||||||
|
Administrative
expenses (Exhibit H)
|
(363 | ) | (310 | ) | ||||
|
Selling
expenses (Exhibit H)
|
(1,045 | ) | (939 | ) | ||||
|
Exploration
expenses (Exhibit H)
|
(200 | ) | (230 | ) | ||||
|
Operating
income
|
3,269 | 2,859 | ||||||
|
Income on
long-term investments
|
128 | 189 | ||||||
|
Other income,
net (Note 3.i)
|
29 | 34 | ||||||
|
Financial
income, net and holding (losses) gains:
|
||||||||
|
Gains (losses)
on assets
|
||||||||
|
Interests
|
70 | 157 | ||||||
|
Exchange
differences
|
(22 | ) | 53 | |||||
|
Holding gains
on inventories
|
99 | 111 | ||||||
|
Losses on
liabilities
|
||||||||
|
Interests
|
(180 | ) | (139 | ) | ||||
|
Exchange
differences
|
278 | (20 | ) | |||||
|
Reversal of
impairment of other current assets (Note 2.j)
|
- | 69 | ||||||
|
Net
income before income tax
|
3,671 | 3,313 | ||||||
|
Income tax
(Note 3.j)
|
(1,417 | ) | (1,169 | ) | ||||
|
Net
income
|
2,254 | 2,144 | ||||||
|
Earnings per share (Note
1)
|
5.73 | 5.45 | ||||||
Notes 1 to 13 and
the accompanying exhibits A, C, E, F, G and H and Schedule I
are an integral part
of these statements.
19
English translation
of the financial statements originally filed in Spanish with the Argentine
Securities Commission (“CNV”),
except for the
inclusion of Note 13 to the primary financial statements in the English
translation.
In
case of discrepancy, the financial statements filed with the CNV prevail over
this translation.
YPF
SOCIEDAD ANONIMA
STATEMENTS
OF CHANGES IN SHAREHOLDERS’ EQUITY
FOR
THE SIX-MONTH PERIODS ENDED JUNE 30, 2008 AND 2007
(amounts expressed
in millions of Argentine pesos except for per share amounts in Argentine pesos –
Note 1)
(The financial
statements as of June 30, 2008 and June 30, 2007 are unaudited)
|
2008
|
||||||||||||||||
|
Shareholders’
Contributions
|
||||||||||||||||
|
Subscribed
Capital
|
Adjustment
to Contributions
|
Issuance
Premiums
|
Total
|
|||||||||||||
|
Balances
at the beginning of year
|
3,933 | 7,281 | 640 | 11,854 | ||||||||||||
|
As decided by
the Board of Directors’ meeting of March 6, 2007:
|
||||||||||||||||
|
- Cash
dividends (6 per share)
|
- | - | - | - | ||||||||||||
|
As decided by
the Board of Directors’ meeting of February 6, 2008:
|
||||||||||||||||
|
- Cash
dividend (10.76 per share)
|
- | - | - | - | ||||||||||||
|
As decided by
the Ordinary and Extraordinary Shareholders’ meeting of April 24,
2008:
|
||||||||||||||||
|
- Cash
dividends (6.5 per share)
|
- | - | - | - | ||||||||||||
|
-
Appropriation to Legal Reserve
|
- | - | - | - | ||||||||||||
|
- Reversal of
Reserve for Future Dividends
|
- | - | - | - | ||||||||||||
|
-
Appropriation to Reserve for Future Dividends
|
- | - | - | - | ||||||||||||
|
Net decrease
in deferred earnings (Note 2.i)
|
- | - | - | - | ||||||||||||
|
Net
income
|
- | - | - | - | ||||||||||||
|
Balances
at the end of period
|
3,933 | 7,281 | 640 | 11,854 | ||||||||||||
|
2008
|
2007
|
|||||||||||||||||||||||
|
Legal
Reserve
|
Deferred
Earnings
|
Reserve
for Future Dividends
|
Unappropriated
Retained Earnings
|
Total
Shareholders’ Equity
|
Total
Shareholders’ Equity
|
|||||||||||||||||||
|
Balances
at the beginning of year
|
2,020 | (135 | ) | 4,584 | 7,737 | 26,060 | 24,345 | |||||||||||||||||
|
As decided by
the Board of Directors’ meeting of March 6, 2007:
|
||||||||||||||||||||||||
|
- Cash
dividends (6 per share)
|
- | - | - | - | - | (2,360 | ) | |||||||||||||||||
|
As decided by
the Board of Directors’ meeting of February 6, 2008:
|
||||||||||||||||||||||||
|
- Cash
dividends (10.76 per share)
|
- | - | (4,232 | ) | - | (4,232 | ) | - | ||||||||||||||||
|
As decided by
the Ordinary and Extraordinary Shareholders’ meeting of April 24,
2008:
|
||||||||||||||||||||||||
|
- Cash
dividends (6.5 per share)
|
- | - | - | (2,557 | ) | (2,557 | ) | - | ||||||||||||||||
|
-
Appropriation to Legal Reserve
|
204 | - | - | (204 | ) | - | - | |||||||||||||||||
|
- Reversal of
Reserve for Future Dividends
|
- | - | (352 | ) | 352 | - | - | |||||||||||||||||
|
-
Appropriation to Reserve for Future Dividends
|
- | - | 4,003 | (4,003 | ) | - | - | |||||||||||||||||
|
Net decrease
in deferred earnings (Note 2.i)
|
- | (14 | ) | - | - | (14 | ) | (3 | ) | |||||||||||||||
|
Net
income
|
- | - | - | 2,254 | 2,254 | 2,144 | ||||||||||||||||||
|
Balances
at the end of period
|
2,224 | (149 | ) | 4,003 | 3,579 | 21,511 | 24,126 | |||||||||||||||||
Notes 1 to 13 and
the accompanying exhibits A, C, E, F, G and H and Schedule I
are an integral part
of these statements.
20
English translation
of the financial statements originally filed in Spanish with the Argentine
Securities Commission (“CNV”),
except for the
inclusion of Note 13 to the primary financial statements in the English
translation.
In
case of discrepancy, the financial statements filed with the CNV prevail over
this translation.
YPF
SOCIEDAD ANONIMA
STATEMENTS
OF CASH FLOWS
FOR
THE SIX-MONTH PERIODS ENDED JUNE 30, 2008 AND 2007
(amounts expressed
in millions of Argentine pesos – Note 1)
(The financial
statements as of June 30, 2008 and June 30, 2007 are unaudited)
|
2008
|
2007
|
|||||||
|
Cash
Flows from Operating Activities
|
||||||||
|
Net
income
|
2,254 | 2,144 | ||||||
|
Adjustments
to reconcile net income to net cash flows provided by operating
activities:
|
||||||||
|
Income
on long-term investments
|
(128 | ) | (189 | ) | ||||
|
Dividends
from long-term investments
|
504 | 401 | ||||||
|
Reversal
of impairment of other current assets
|
- | (69 | ) | |||||
|
Depreciation
of fixed assets
|
1,994 | 1,961 | ||||||
|
Consumption
of materials and fixed assets retired, net of allowances
|
187 | 164 | ||||||
|
Increase
in allowances for fixed assets
|
2 | 73 | ||||||
|
Income
tax
|
1,417 | 1,169 | ||||||
|
Income
tax payments
|
(1,045 | ) | (878 | ) | ||||
|
Increase
in reserves
|
299 | 254 | ||||||
|
Changes
in assets and liabilities:
|
||||||||
|
Trade
receivables
|
138 | (30 | ) | |||||
|
Other
receivables
|
1,926 | (239 | ) | |||||
|
Inventories
|
(184 | ) | (446 | ) | ||||
|
Accounts
payable
|
499 | 278 | ||||||
|
Salaries
and social security
|
(19 | ) | (35 | ) | ||||
|
Taxes
payable
|
(185 | ) | (158 | ) | ||||
|
Net
advances from crude oil purchasers
|
(10 | ) | (46 | ) | ||||
|
Decrease
in reserves
|
(334 | ) | (323 | ) | ||||
|
Interests,
exchange differences and others
|
(238 | ) | 55 | |||||
|
Net
cash flows provided by operating activities
|
7,077 | (1) | 4,086 | (1) | ||||
|
Cash
Flows used in Investing Activities
|
||||||||
|
Acquisitions
of fixed assets
|
(2.685 | ) | (2,325 | ) | ||||
|
Capital
contributions on long-term investments
|
- | |||||||