Edgar Filing: YPF SOCIEDAD ANONIMA

c) Other receivables:	2008						2007
	Current			Noncurrent			Current			Noncurrent
Deferred income tax		-			498			-			517
Tax credits and export rebates		779			18			931			15
Trade		60			-			97			-
Prepaid expenses		131			76			111			60
Concessions charges		17			53			17			79
Related parties		970	(1)		99	(1)		2,681	(1)		-
Loans to clients		22			88			14			90
Advances to suppliers		135			-			132			-
From joint ventures and other agreements		134			-			62			-
Miscellaneous		434			98			438			98
		2,682			930			4,483			859
Allowance for other doubtful accounts		(132	)		-			(122	)		-
Allowance for valuation of other receivables to their estimated realizable value		-			(51	)		-			(50	)
		2,550			879			4,361			809

(1)	In addition to the amounts detailed in Note 3.c to the primary financial statements, mainly includes 179 with Central Dock Sud S.A., which accrues interest at 6.63% as of September 30, 2008 and 51 with Repsol Netherlands Finance B.V. as of December 31, 2007.

d) Inventories:	2008		2007

Refined products		2,096		1,612
Crude oil and natural gas		924		646
Products in process		44		46
Raw materials, packaging materials and others		321		269
		3,385		2,573

e) Fixed assets:	2008			2007

Net book value of fixed assets (Exhibit A)		26,552			25,481
Allowance for unproductive exploratory drilling		(3	)		(3	)
Allowance for obsolescence of material and equipment		(44	)		(44	)
		26,505			25,434

f) Accounts payable:	2008				2007
	Current		Noncurrent		Current		Noncurrent
Trade		3,707		17		3,131		21
Hydrocarbon wells abandonment obligations		446		2,778		395		2,316
Related parties		228		-		140		-
From joint ventures and other agreements		356		-		373		-
Environmental liabilities		109		351		137		166
Miscellaneous		159		40		163		39
		5,005		3,186		4,339		2,542

g) Loans:						2008				2007
	Interest rates(1)			Principal maturity		Current		Noncurrent		Current		Noncurrent

Negotiable Obligations – YPF		9.13 - 10.00	%		2009-2028		328		204		14		523
Related parties		4.77 - 13.50	%		2009-2010		84		470		-		-
Other bank loans and other creditors		3.37 - 19.00	%		2008-2009		2,554		-		457		-
							2,966		674		471		523

(1)

Annual fixed interest rate as of September 30, 2008.

Consolidated Statements of Income as of September 30, 2008 and 2007

	Income (Expense)
h) Other expense, net:	2008			2007
Reserve for pending lawsuits and other claims		(76	)		(140	)
Environmental remediation		(282	)		(113	)
Miscellaneous		45			82
		(313	)		(171	)

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 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 law 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.

As of September 30, 2008, reserves for the environmental contingencies and other claims totaled approximately 581. YPF Holdings Inc.’s Management believes it has adequately reserved for all environmental contingencies, which are probable and can be reasonably estimated as 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 Chemical’s 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 47 as of September 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 sediments 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 hold, 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. 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. Tierra has reached an agreement with five of these parties to share and contribute toward Newark Bay study costs, and is continuing to negotiate with other involved parties.

In December 2005, the DEP issued a directive to Tierra, Maxus and Occidental directing said parties to pay the State of New Jersey’s cost 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. The DEP filed its Second Amended Complaint in April 2008. YPF filed a motion to dismiss for lack of personal jurisdiction. The motion mentioned above was denied in September, 2008, and the denial was confirmed by the Court of Appeal. Notwithstanding, the Court denied to plaintiffs' motion to bar third party practice and allowed defendants to file third-party complaints. Therefore, all of those companies which have contributed in polluting the area could receive a citation.

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 legal and technical defects of the draft FFS to EPA, as did other interested parties. In light of these comments, EPA decided to initiate his review and informed that a revised remedy proposal will not be forthcoming any earlier than mid-2009.

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 declined to do so at this time, citing concerns with matters such as the FFS being revised by EPA as described above. Tierra together with several other members, has entered into discussions concerning possible studies to be undertaken. 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”). Such letters have been responded appropriately, rejecting the designation as 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 September 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 September 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.

As of September 30, 2008, there are approximately 270 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 22 (which are included in the amount of 97 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 24 (which are included in the amount of 97 disclosed in the following paragraphs).

As of September 30, 2008, there are approximately 97 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.

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 16 as of September 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 required changes, including additions, to its reserve as may be necessary.

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 required Chemicals’ former Greens Bayou facility where DDT and certain other chemicals were manufactured. As of September 30, 2008, YPF Holdings Inc. has reserved 53 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 September 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 September 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.

Black Lung Benefits Act Liabilities. The Black Lung Benefits Act provides monetary and medical benefits to miners disabled with a 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 September 30, 2008, YPF Holdings Inc. has reserved 30 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 costs in addition to YPF Holdings Inc.’s current reserves for this matter. Maxus believes that its current reserves according to the available information to the date of the financial statements are adequate for these costs. As of September 30, 2008 YPF Holdings Inc. has reserved 46 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 has been filed with the court. That decision was appealed, and the parties are awaiting the court’s decision. As of September 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 these financial statements, remediation activities are completed, and production has started gradually since July 2008. Total commitments related to the development of the Neptune Prospect amounted to US$ 34 million.

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. discontinued 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

Nine–month period ended September 30, 2008
Net sales to unrelated parties		3,131		18,830		2,049		123			-			24,133
Net sales to related parties		737		1,334		-		-			-			2,071
Net intersegment sales		9,024		920		858		392			(11,194	)		-
Net sales		12,892		21,084		2,907		515			(11,194	)		26,204
Operating income (loss)		2,493		2,886		927		(538	)		(125	)		5,643
Income on long–term investments		70		12		-		-			-			82
Depreciation		2,831		327		82		57			-			3,297
Acquisitions of fixed assets		3,972		603		94		313			-			4,982
Assets		21,360		10,617		2,488		5,049			(561	)		38,953
Nine–month period ended September 30, 2007
Net sales to unrelated parties		2,310		14,599		1,855		99			-			18,863
Net sales to related parties		495		1,511		-		-			-			2,006
Net intersegment sales		9,770		1,405		599		262			(12,036	)		-
Net sales		12,575		17,515		2,454		361			(12,036	)		20,869
Operating income (loss)		3,550		1,008		379		(480	)		37			4,494
Income on long–term investments		25		13		-		-			-			38
Depreciation		2,714		281		67		43			-			3,105
Acquisitions of fixed assets		3,299		528		79		170			-			4,076
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 nine–month periods ended September 30, 2008 and 2007 were 5,711 and 6,176 respectively. Export sales were mainly to the United States of America, Brazil and Chile.

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 SEPTEMBER 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 September 30, 2008 and September 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		-			-			73			2,464
Mineral property, wells and related equipments		51,595		(3	)		351			3,029			54,972
Refinery equipment and petrochemical plants		9,227		-			7			305			9,539
Transportation equipment		1,887		-			-			63			1,950
Materials and equipments in warehouse		791		-			543			(482	)		852
Drilling and work in progress		4,617		(1	)		3,707			(3,520	)		4,803
Exploratory drilling in progress		147		-			263			(282	)		128
Furniture, fixtures and installations		622		-			4			118			744
Selling equipment		1,406		-			1			44			1,451
Other property		377		-			106			(16	)		467
Total 2008		73,060		(4	)		4,982	(2)		(668	)(1)		77,370
Total 2007		61,939		11			4,076			5,011	(1)(6)		71,037

	2008															2007
Main account	Accumulated at beginning of year		Net decreases, transfers and reclassifications			Depreciation rate			Increases		Accumulated at the end of period		Net book value as of 09-30-08			Net book value as of 09-30-07			Net book value as of 12-31-07

Land and buildings		1,108		(1	)		2	%		41		1,148		1,316			1,293			1,283
Mineral property, wells and related equipments		37,131		(43	)			(4)		2,791		39,879		15,093	(3)		14,088	(3)		14,464	(3)
Refinery equipment and petrochemical plants		6,139		(3	)		4 - 10	%		317		6,453		3,086			2,983			3,088
Transportation equipment		1,324		(2	)		4 - 5	%		47		1,369		581			553			563
Materials and equipment in warehouse		-		-			-			-		-		852			746			791
Drilling and work in progress		-		-			-			-		-		4,803			4,140			4,617
Exploratory drilling in progress		-		-			-			-		-		128			133			147
Furniture, fixtures and installations		523		(1	)		10	%		47		569		175			106			99
Selling equipment		1,056		-			10	%		44		1,100		351			363			350
Other property		298		(8	)		10	%		10		300		167			79			79
Total 2008		47,579		(58	) (1)					3,297		50,818		26,552
Total 2007		39,377		4,071	(1)(6)					3,105		46,553					24,484			25,481

(1)	Includes 2 and 99 of net book value charged to fixed assets allowances for the nine-month periods ended September 30, 2008 and 2007, respectively.

(2)	Includes 351 corresponding to the future cost of hydrocarbon wells abandonment obligations for the nine-month period ended September 30, 2008.

(3)	Includes 724 , 901 and 851 of mineral property as of September 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.

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 NINE-MONTH PERIODS ENDED SEPTEMBER 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 September 30, 2008 and September 30, 2007 are unaudited)

	2008												2007
	Production costs		Administrative expenses		Selling expenses			Exploration expenses		Total			Total

Salaries and social security taxes		757		151		150			41		1,099			917
Fees and compensation for services		155		254		36			1		446			347
Other personnel expenses		245		79		20			14		358			287
Taxes, charges and contribution		208		19		287			-		514			394
Royalties and easements		1,730		-		5			11		1,746			1,474
Insurance		86		3		10			-		99			93
Rental of real estate and equipment		294		3		42			-		339			290
Survey expenses		-		-		-			75		75			136
Depreciation of fixed assets		3,162		50		84			1		3,297			3,105
Industrial inputs, consumable materials and supplies		432		6		45			4		487			448
Operation services and other service contracts		814		14		68			8		904			534
Preservation, repair and maintenance		1,689		15		38			2		1,744			1,258
Contractual commitments		160		-		-			-		160			478
Unproductive exploratory drilling		-		-		-			270		270			100
Transportation, products and charges		693		-		853			-		1,546			1,327
(Recovery) allowance for doubtful trade receivables		-		-		(21	)		-		(21	)		42
Publicity and advertising expenses		-		59		66			-		125			96
Fuel, gas, energy and miscellaneous		986		54		41			8		1,089			631
Total 2008		11,411		707		1,724			435		14,277
Total 2007		9,499		561		1,541			356					11,957

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

BALANCE SHEETS AS OF SEPTEMBER 30, 2008 AND DECEMBER 31, 2007

(amounts expressed in millions of Argentine pesos - Note 1)

(The financial statements as of September 30, 2008 are unaudited)

	2008		2007

Current Assets
Cash		45		120
Investments (Note 3.a)		486		242
Trade receivables (Note 3.b)		3,731		3,148
Other receivables (Note 3.c)		2,325		4,937
Inventories (Note 3.d)		2,955		2,284
Total current assets		9,542		10,731

Noncurrent Assets
Trade receivables (Note 3.b)		25		31
Other receivables (Note 3.c)		1,248		788
Investments (Note 3.a)		2,474		2,718
Fixed assets (Note 3.e)		24,595		23,585
Total noncurrent assets		28,342		27,122
Total assets		37,884		37,853

Current Liabilities
Accounts payable (Note 3.f)		5,242		5,115
Loans (Note 3.g)		2,637		288
Salaries and social security		178		167
Taxes payable		1,460		1,293
Net advance from crude oil purchases		-		9
Reserves (Exhibit E)		356		323
Total current liabilities		9,873		7,195

Noncurrent Liabilities
Accounts payable (Note 3.f)		3,163		2,519
Loans (Note 3.g)		674		523
Taxes payable		6		8
Reserves (Exhibit E)		1,523		1,548
Total noncurrent liabilities		5,366		4,598
Total liabilities		15,239		11,793

Shareholders' Equity (per corresponding statements)		22,645		26,060
Total liabilities and shareholders' equity		37,884		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.

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 NINE-MONTH PERIODS ENDED SEPTEMBER 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 September 30, 2008 and September 30, 2007 are unaudited)

	2008			2007

Net sales (Note 3.h)		24,325			19,448
Cost of sales (Exhibit F)		(16,757	)		(13,215	)
Gross profit		7,568			6,233

Administrative expenses (Exhibit H)		(604	)		(487	)
Selling expenses (Exhibit H)		(1,632	)		(1,458	)
Exploration expenses (Exhibit H)		(419	)		(332	)
Operating income		4,913			3,956

Income on long–term investments
Other expense net (Note 3.i)		272			273
Financial income, net and holding gains:		(27	)		(76	)
Gains on assets
Interests		94			257
Exchange differences		76			90
Holding gains on inventories		355			302
(Losses) gains on liabilities
Interests		(313	)		(205	)
Exchange differences		16			(56	)
Reversal of impairment of other current assets (Note 2.j)		-			69
Net income before income tax		5,386			4,610
Income tax (Note 3.j)		(1,998	)		(1,630	)
Net income		3,388			2,980
Earnings per share (Note 1)		8.61			7.58

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.

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 NINE-MONTH PERIODS ENDED SEPTEMBER 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 September 30, 2008 and September 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 (losses)			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	)		(10	)
Net income		-		-			-			3,388			3,388			2,980
Balances at the end of period		2,224		(149	)		4,003			4,713			22,645			24,955

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.

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 NINE-MONTH PERIODS ENDED SEPTEMBER 30, 2008 AND 2007

(amounts expressed in millions of Argentine pesos– Note 1)

(The financial statements as of September 30, 2008 and September 30, 2007 are unaudited)

	2008			2007

Cash Flows from Operating Activities
Net income		3,388			2,980
Adjustment to reconcile net income to net cash flows provided by operating activities:
Income on long-term investments		(272	)		(273	)
Dividends from long-term investments		514			424
Reversal of impairment of other current assets		-			(69	)
Depreciation of fixed assets		3,193			3,024
Consumption of materials and fixed assets retired, net of allowances		481			146
Increase in allowances for fixed assets		2			99
Income tax		1,998			1,630
Income tax payments		(1,579	)		(1,435	)
Increase in reserves		379			567
Changes in assets and liabilities: Trade receivables		(577	)		(592	)
Other receivables		1,148			566
Inventories		(671	)		(750	)
Accounts payable		927			270
Salaries and social security		11			(17	)
Taxes payable		(231	)		(96	)
Net advances from crude oil purchases

	Page

- Cover	1
- Consolidated balance sheets	2
- Consolidated statements of income	3
- Consolidated statements of cash flows	4
- Notes to consolidated financial statements	5
- Exhibits to consolidated financial statements	16
- Balance sheets	18
- Statements of income	19
- Statements of changes in shareholders' equity	20
- Statements of cash flows	21
- Notes to financial statements	22
- Exhibits to financial statements	49
- Ratification of lithographed signatures	55

	2008			2007

Cash Flows from Operating Activities
Net income		3,388			2,980
Adjustment to reconcile net income to net cash flows provided by operating activities:
Income on long-term investments		(82	)		(38	)
Dividends from long-term investments		51			52
Reversal of impairment of other current assets		-			(69	)
Depreciation of fixed assets		3,297			3,105
Consumption of materials and fixed assets retired, net of allowances		608			158
Increased in allowances for fixed assets		2			99
Income tax		2,287			1,849
Income tax payments		(1,795	)		(1,654	)
Increase in reserves		662			570
Changes in assets and liabilities:
Trade receivables		(566	)		(644	)
Other receivables		1,743			904
Inventories		(812	)		(797	)
Accounts payable		816			200
Salaries and social security		12			(42	)
Taxes payable		(315	)		(101	)
Net advances from crude oil purchases		(10	)		(69	)
Decrease in reserves		(493	)		(396	)
Interests, exchange differences and others		86			35
Net cash flows provided by operating activities		8,879	(1)		6,142	(1)

Cash Flows used in Investing Activities
Acquisitions of fixed assets		(4,631	)		(4,076	)
Investments (non cash and equivalents)		9			(13	)
Net cash flows used in investing activities		(4,622	)		(4,089	)

Cash flows used in Financing Activities
Payments of loans		(3,100	)		(1,413	)
Proceeds from loans		5,748			1,026
Dividends paid		(6,789	)		(2,360	)
Net cash flows used in financing activities		(4,141	)		(2,747	)
Increase (decrease) in Cash and Equivalents		116			(694	)

Cash and equivalents at the beginning of year		847			1,087
Cash and equivalents at the end of period		963			393
Increase (decrease) in Cash and Equivalents		116			(694	)

Item

1		Financial statements as of September 30, 2008 and Comparative Information, Limited Review Report on Interim Period Financial Statements and Statutory Audit Committee’s Report

		Subscribed, paid-in and authorized for stock exchange listing (Note 4 to primary financial statements)

-	Shares of Common Stock, Argentine pesos 10 par value, 1 vote per share		3,933,127,930

a) Investments:	2008						2007
	Current			Noncurrent			Current			Noncurrent
Short-term investments and government securities		818	(1)		162	(3)		655	(1)		168	(3)
Long-term investments		-			891	(2)		-			837	(2)
Allowance for reduction in value of holdings in long-term investments		-			(223	)(2)		-			(206	) (2)
		818			830			655			799

b) Trade receivables:	2008					2007
	Current			Noncurrent		Current			Noncurrent

Accounts receivable		3,739			25		3,142			32
Related parties		487			-		533			-
		4,226			25		3,675			32
Allowance for doubtful trade receivables		(418	)		-		(440	)		-
		3,808			25		3,235			32