Form
20-F
|
X
|
Form
40-F
|
Yes
|
No
|
X
|
Yes
|
No
|
X
|
Yes
|
No
|
X
|
Item
|
||
1
|
Financial
Statements as of December 31, 2008 and Comparative Information along with
Statutory Audit Committee's Report
|
Financial
Statements as of December 31, 2008 and Comparative
Information
Statutory
Audit Committee's Report
|
Page
|
|
-
Cover
|
1
|
- Consolidated
balance sheet
|
2
|
- Consolidated
statement of income
|
3
|
- Consolidated
statement of cash flows
|
4
|
- Notes to
consolidated financial statements
|
5
|
- Exhibits to
consolidated financial statements
|
17
|
- Balance
sheet
|
19
|
- Statement of
income
|
20
|
- Statement of
changes in shareholder's equity
|
21
|
- Statement of
cash flows
|
22
|
- Notes to
financial statements
|
23
|
- Exhibits to
financial statements
|
52
|
- Ratification
of lithographed signatures
|
58
|
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 |
ANTONIO GOMIS
SÁEZ
Director
|
2008
|
2007
|
2006
|
||||||||||
Current
Assets
|
||||||||||||
Cash
|
391 | 196 | 118 | |||||||||
Investments
(Note 2.a)
|
825 | 655 | 971 | |||||||||
Trade
receivables (Note 2.b)
|
2,702 | 3,235 | 2,242 | |||||||||
Other
receivables (Note 2.c)
|
1,861 | 4,361 | 5,033 | |||||||||
Inventories
(Note 2.d)
|
3,449 | 2,573 | 1,697 | |||||||||
Other
assets
|
- | - | 1,128 | |||||||||
Total current
assets
|
9,228 | 11,020 | 11,189 | |||||||||
Noncurrent
assets
|
||||||||||||
Trade
receivables (Note 2.b)
|
24 | 32 | 44 | |||||||||
Other
receivables (Note 2.c)
|
945 | 809 | 852 | |||||||||
Investments
(Note 2.a)
|
848 | 799 | 788 | |||||||||
Fixed assets
(Note 2.e)
|
28,028 | 25,434 | 22,513 | |||||||||
Intangible
assets
|
6 | 8 | 8 | |||||||||
Total
noncurrent assets
|
29,851 | 27,082 | 24,205 | |||||||||
Total
assets
|
39,079 | 38,102 | 35,394 | |||||||||
Current
Liabilities
|
||||||||||||
Accounts
payable (Note 2.f)
|
6,763 | 4,339 | 3,495 | |||||||||
Loans (Note
2.g)
|
3,219 | 471 | 915 | |||||||||
Salaries and
social security
|
284 | 213 | 207 | |||||||||
Taxes
payable
|
1,132 | 1,441 | 1,298 | |||||||||
Net advances
from crude oil purchasers
|
- | 9 | 96 | |||||||||
Reserves
|
588 | 466 | 273 | |||||||||
Total current
liabilities
|
11,986 | 6,939 | 6,284 | |||||||||
Noncurrent
Liabilities
|
||||||||||||
Accounts
payable (Note 2.f)
|
3,473 | 2,542 | 2,448 | |||||||||
Loans (Note
2.g)
|
1,260 | 523 | 510 | |||||||||
Salaries and
social security (Note 2.h)
|
116 | 164 | 202 | |||||||||
Taxes
payable
|
31 | 21 | 20 | |||||||||
Net advances
from crude oil purchasers
|
- | - | 7 | |||||||||
Reserves
|
1,857 | 1,853 | 1,578 | |||||||||
Total
noncurrent liabilities
|
6,737 | 5,103 | 4,765 | |||||||||
Total
liabilities
|
18,723 | 12,042 | 11,049 | |||||||||
Shareholders’
Equity
|
20,356 | 26,060 | 24,345 | |||||||||
Total
liabilities and shareholder’s equity
|
39,079 | 38,102 | 35,394 |
ANTONIO GOMIS
SÁEZ
Director
|
2008
|
2007
|
2006
|
||||||||||
Net
sales
|
34,875 | 29,104 | 25,635 | |||||||||
Cost of
sales
|
(24,013 | ) | (19,000 | ) | (15,821 | ) | ||||||
Gross
profit
|
10,862 | 10,104 | 9,814 | |||||||||
Administrative
expenses (Exhibit H)
|
(1,053 | ) | (805 | ) | (674 | ) | ||||||
Selling
expenses (Exhibit H)
|
(2,460 | ) | (2,120 | ) | (1,797 | ) | ||||||
Exploration
expenses (Exhibit H)
|
(684 | ) | (522 | ) | (460 | ) | ||||||
Operating
income
|
6,665 | 6,657 | 6,883 | |||||||||
Income on
long-term investments
|
83 | 34 | 183 | |||||||||
Other
expense, net (Note 2.i)
|
(376 | ) | (439 | ) | (204 | ) | ||||||
Financial
income (expense), net and holding gains:
|
||||||||||||
Gains on
assets
|
||||||||||||
Interests
|
134 | 278 | 338 | |||||||||
Exchange
differences
|
416 | 142 | 5 | |||||||||
Holding gains
on inventories
|
476 | 451 | 394 | |||||||||
Losses on
liabilities
|
||||||||||||
Interests
|
(492 | ) | (292 | ) | (213 | ) | ||||||
Exchange
differences
|
(708 | ) | (61 | ) | (70 | ) | ||||||
Income from
sale of long-term investments
|
- | 5 | 11 | |||||||||
Reversal
(impairment) of other current assets
|
- | 69 | (69 | ) | ||||||||
Net
income before income tax
|
6,198 | 6,844 | 7,258 | |||||||||
Income
tax
|
(2,558 | ) | (2,758 | ) | (2,801 | ) | ||||||
Net
income
|
3,640 | 4,086 | 4,457 | |||||||||
Earnings
per share
|
9.25 | 10.39 | 11.33 |
ANTONIO GOMIS
SÁEZ
Director
|
2008
|
2007
|
2006
|
||||||||||
Cash
Flows from Operating Activities
|
||||||||||||
Net
income
|
3,640 | 4,086 | 4,457 | |||||||||
Adjustment to
reconcile net income to net cash flows provided by operating
activities:
|
||||||||||||
Income on
long-term investments
|
(83 | ) | (34 | ) | (183 | ) | ||||||
Dividends
from long-term investments
|
51 | 54 | 43 | |||||||||
Income from
sale of long-term investments
|
- | (5 | ) | (11 | ) | |||||||
(Reversal)
impairment of other current assets
|
- | (69 | ) | 69 | ||||||||
Depreciation
of fixed assets
|
4,775 | 4,139 | 3,718 | |||||||||
Consumption
of materials and fixed assets retired, net of allowances
|
647 | 247 | 272 | |||||||||
Increase in
allowances for fixed assets
|
2 | 116 | 192 | |||||||||
Income
tax
|
2,558 | 2,758 | 2,801 | |||||||||
Income tax
payments
|
(2,387 | ) | (2,281 | ) | (2,855 | ) | ||||||
Increase in
reserves
|
862 | 1,005 | 882 | |||||||||
Changes in
assets and liabilities:
|
||||||||||||
Trade
receivables
|
704 | (981 | ) | (21 | ) | |||||||
Other
receivables
|
2,401 | 849 | (255 | ) | ||||||||
Inventories
|
(876 | ) | (876 | ) | (382 | ) | ||||||
Accounts
payable
|
1,486 | 670 | (99 | ) | ||||||||
Salaries and
social security
|
(21 | ) | (25 | ) | 189 | |||||||
Taxes
payable
|
(507 | ) | (340 | ) | (425 | ) | ||||||
Net advances
from crude oil purchases
|
(10 | ) | (93 | ) | (90 | ) | ||||||
Decrease in
reserves
|
(736 | ) | (537 | ) | (268 | ) | ||||||
Interests,
exchange differences and others
|
1,052 | 73 | (15 | ) | ||||||||
Net cash
flows provided by operating activities
|
13,558 | (1) | 8,756 | (1) | 8,019 | (1) | ||||||
Cash
Flows used in Investing Activities
|
||||||||||||
Acquisitions
of fixed assets
|
(7,035 | ) | (6,163 | ) | (5,002 | ) | ||||||
Capital
distributions in long-term investments
|
- | (16 | ) | - | ||||||||
Proceeds from
sale of long-term investments
|
- | 6 | 32 | |||||||||
Investments
(non cash and equivalents)
|
(8 | ) | (14 | ) | (139 | ) | ||||||
Net cash
flows used in investing activities
|
(7,043 | ) | (6,187 | ) | (5,109 | ) | ||||||
Cash
flows used in Financing Activities
|
||||||||||||
Payments of
loans
|
(5,400 | ) | (1,860 | ) | (666 | ) | ||||||
Proceeds from
loans
|
8,540 | 1,411 | 688 | |||||||||
Dividends
paid
|
(9,287 | ) | (2,360 | ) | (2,360 | ) | ||||||
Net cash
flows used in financing activities
|
(6,147 | ) | (2,809 | ) | (2,338 | ) | ||||||
Increase
(decrease) in Cash and Equivalents
|
368 | (240 | ) | 572 | ||||||||
Cash and
equivalents at the beginning of year
|
847 | 1,087 | 515 | |||||||||
Cash and
equivalents at the end of year
|
1,215 | 847 | 1,087 | |||||||||
Increase
(decrease) in Cash and Equivalents
|
368 | (240 | ) | 572 |
(1)
|
Includes
(155), (114) and (103) corresponding to interest payments for the years
ended December 31, 2008, 2007 and 2006,
respectively.
|
ANTONIO GOMIS
SÁEZ
Director
|
1.
|
CONSOLIDATED
FINANCIAL STATEMENTS
|
a)
|
Consolidation
policies
|
-
|
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 proportionate share in their assets,
liabilities, net revenues, cost and expenses, considering 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
consolidations adjustments.
|
b)
|
Financial
statements used for
consolidation:
|
c)
|
Valuation
criteria:
|
2.
|
ANALYSIS
OF THE MAIN ACCOUNTS OF THE CONSOLIDATED FINANCIAL
STATEMENTS
|
a) Investments: |
2008
|
2007
|
2006
|
|||||||||||||||||||||
Current
|
Noncurrent
|
Current
|
Noncurrent
|
Current
|
Noncurrent
|
|||||||||||||||||||
Short-term
investments and government securities
|
825 | (1) | 179 | (3) | 655 | (1) | 168 | (3) | 971 | (1) | 156 | (3) | ||||||||||||
Long-term
investments
|
- | 890 | (2) | - | 837 | (2) | - | 843 | (2) | |||||||||||||||
Allowance for
reduction in value of holdings in long-term investments
|
- | (221 | )(2) | - | (206 | )(2) | - | (211 | )(2) | |||||||||||||||
825 | 848 | 655 | 799 | 971 | 788 |
|
(1)
|
Includes 824,
651 and 969 as of December 31, 2008, 2007 and 2006, 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 December 31, 2008,
GASA must restart a new debt restructuring process as certain creditors
terminated the refinancing agreement celebrated on December 7, 2005,
executing the option contemplated in the mentioned
agreement.
|
|
(3)
|
Corresponds
to restricted cash as of December 31, 2008, 2007 and 2006, which
represents bank deposits used to pay labor claims and deposits used as
guarantees given to government
agencies.
|
b)
Trade receivables:
|
2008
|
2007
|
2006
|
|||||||||||||||||||||
Current
|
Noncurrent
|
Current
|
Noncurrent
|
Current
|
Noncurrent
|
|||||||||||||||||||
Accounts
receivable
|
2,813 | 24 | 3,142 | 32 | 2,280 | 44 | ||||||||||||||||||
Related
parties
|
306 | - | 533 | - | 391 | - | ||||||||||||||||||
3,119 | 24 | 3,675 | 32 | 2,671 | 44 | |||||||||||||||||||
Allowance for
doubtful trade receivables
|
(417 | ) | - | (440 | ) | - | (429 | ) | - | |||||||||||||||
2,702 | 24 | 3,235 | 32 | 2,242 | 44 |
c) Other
receivables:
|
2008
|
2007
|
2006
|
|||||||||||||||||||||
Current
|
Noncurrent
|
Current
|
Noncurrent
|
Current
|
Noncurrent
|
|||||||||||||||||||
Deferred
income tax
|
- | 554 | - | 517 | - | 510 | ||||||||||||||||||
Tax credits
and export rebates
|
749 | 19 | 931 | 15 | 692 | 18 | ||||||||||||||||||
Trade
|
217 | - | 97 | - | 71 | - | ||||||||||||||||||
Prepaid
expenses
|
154 | 80 | 111 | 60 | 130 | 73 | ||||||||||||||||||
Concessions
charges
|
17 | 50 | 17 | 79 | 17 | 88 | ||||||||||||||||||
Related
parties
|
178 | (1) | 109 | (1) | 2,681 | (1) | - | 3,883 | (1) | - | ||||||||||||||
Loans to
clients
|
29 | 79 | 14 | 90 | 12 | 69 | ||||||||||||||||||
Advances to
suppliers
|
160 | - | 132 | - | 65 | - | ||||||||||||||||||
Collateral
deposits
|
91 | 18 | 80 | 19 | 56 | 19 | ||||||||||||||||||
Advances and
loans to employees
|
69 | - | 46 | - | 15 | - | ||||||||||||||||||
From joint
ventures and other agreements
|
101 | - | 62 | - | 46 | - | ||||||||||||||||||
Miscellaneous
|
230 | 84 | 312 | 79 | 183 | 127 | ||||||||||||||||||
1,995 | 993 | 4,483 | 859 | 5,170 | 904 | |||||||||||||||||||
Allowance for
other doubtful accounts
|
(134 | ) | - | (122 | ) | - | (137 | ) | - | |||||||||||||||
Allowance for
valuation of other receivables to their estimated realizable
value
|
- | (48 | ) | - | (50 | ) | - | (52 | ) | |||||||||||||||
1,861 | 945 | 4,361 | 809 | 5,033 | 852 |
|
(1)
|
As of
December 31, 2008, mainly includes 200 with Central Dock Sud S.A., for
loans that accrue in average an annual fixed interest rate of 6.54%. As of
December 31, 2007 and 2006, in addition to the amounts detailed in Note
3.c to the primary financial statements, includes 51 with Repsol
Netherlands Finance B.V., and 48 and 218 with Repsol Netherlands Finance
B.V. and Repsol International Finance B.V.,
respectively.
|
d)
Inventories:
|
2008
|
2007
|
2006
|
|||||||||
Refined
products
|
1,941 | 1,612 | 1,047 | |||||||||
Crude oil and
natural gas
|
1,110 | 646 | 441 | |||||||||
Products in
process
|
69 | 46 | 47 | |||||||||
Raw
materials, packaging materials and others
|
329 | 269 | 162 | |||||||||
3,449 | 2,573 | 1,697 |
e)
Fixed assets:
|
2008
|
2007
|
2006
|
|||||||||
Net book
value of fixed assets (Exhibit A)
|
28,073 | 25,481 | 22,562 | |||||||||
Allowance for
unproductive exploratory drilling
|
(3 | ) | (3 | ) | (3 | ) | ||||||
Allowance for
obsolescence of material and equipment
|
(42 | ) | (44 | ) | (46 | ) | ||||||
28,028 | 25,434 | 22,513 |
f)
Accounts payable:
|
2008
|
2007
|
2006
|
|||||||||||||||||||||
Current
|
Noncurrent
|
Current
|
Noncurrent
|
Current
|
Noncurrent
|
|||||||||||||||||||
Trade
|
4,841 | 45 | 3,131 | 21 | 2,617 | 27 | ||||||||||||||||||
Hydrocarbon
wells abandonment obligations
|
547 | 3,130 | 395 | 2,316 | 233 | 2,210 | ||||||||||||||||||
Related
parties
|
166 | - | 140 | - | 238 | - | ||||||||||||||||||
Extension of
the Concessions - Province of Neuquen
|
483 | - | - | - | - | - | ||||||||||||||||||
From joint
ventures and other agreements
|
334 | - | 373 | - | 256 | - | ||||||||||||||||||
Environmental
liabilities
|
172 | 257 | 137 | 166 | 93 | 164 | ||||||||||||||||||
Miscellaneous
|
220 | 41 | 163 | 39 | 58 | 47 | ||||||||||||||||||
6,763 | 3,473 | 4,339 | 2,542 | 3,495 | 2,448 |
g) Loans:
|
2008
|
2007
|
2006
|
|||||||||||||||||||||||||||||
Interest
rate(1)
|
Principal
maturity
|
Current
|
Noncurrent
|
Current
|
Noncurrent
|
Current
|
Noncurrent
|
|||||||||||||||||||||||||
Negotiable
Obligations – YPF
|
9.13 -
10.00%
|
2009-2028
|
364 | 224 | 14 | 523 | 559 | 509 | ||||||||||||||||||||||||
Related
parties
|
5.00 -
25.00%
|
2009-2011
|
94 | 1,036 | - | - | - | - | ||||||||||||||||||||||||
Other
financial debts
|
3.37 -
27.50%
|
2009
|
2,761 | - | 457 | - | 356 | 1 | ||||||||||||||||||||||||
3,219 | 1,260 | 471 | 523 | 915 | 510 |
|
(1)
|
Annual fixed
interest rate as of December 31,
2008.
|
h) Noncurrent
salaries and social security:
|
||||||||||||
Defined
– benefit obligations and other benefits
|
||||||||||||
2008
|
2007
|
2006
|
||||||||||
Net present
value of obligations
|
117 | 472 | 480 | |||||||||
Fair value of
assets
|
- | (247 | ) | (226 | ) | |||||||
Deferred
actuarial losses
|
(1 | ) | (61 | ) | (52 | ) | ||||||
Recognized
net liabilities
|
116 | 164 | 202 |
Changes
in the fair value of the defined-benefit obligations
|
2008
|
2007
|
2006
|
|||||||||
Liabilities
at the beginning of the year
|
472 | 480 | 501 | |||||||||
Settlement of
obligations - Prudential (Note 1.c)
|
(319 | ) | - | - | ||||||||
Translation
differences
|
16 | 15 | 5 | |||||||||
Service
cost
|
1 | 1 | 3 | |||||||||
Interest
cost
|
10 | 28 | 28 | |||||||||
Actuarial
losses
|
16 | 25 | 6 | |||||||||
Benefits paid
and settlements
|
(79 | ) | (77 | ) | (63 | ) | ||||||
Liabilities
at the end of the year
|
117 | 472 | 480 |
Changes
in the fair value of the plan assets
|
2008
|
2007
|
2006
|
|||||||||
Fair value of
assets at the beginning of the year
|
247 | 226 | 199 | |||||||||
Settlement of
obligations - Prudential (Note 1.c)
|
(242 | ) | - | - | ||||||||
Translation
differences
|
- | 7 | 2 | |||||||||
Expected
return on assets
|
- | 17 | 15 | |||||||||
Actuarial
(losses) gains
|
- | (1 | ) | 8 | ||||||||
Employer and
employees contributions
|
19 | 60 | 50 | |||||||||
Benefits paid
and settlements
|
(24 | ) | (62 | ) | (48 | ) | ||||||
Fair value of
assets at the end of the year
|
- | 247 | 226 |
Income
(Expense)
|
||||||||||||
Amounts
recognized in the Statement of Income
|
2008
|
2007
|
2006
|
|||||||||
Service
cost
|
(1 | ) | (1 | ) | (3 | ) | ||||||
Interest
cost
|
(10 | ) | (28 | ) | (28 | ) | ||||||
Expected
return on assets
|
- | 17 | 15 | |||||||||
Actuarial
losses recognized in the year
|
- | (1 | ) | (2 | ) | |||||||
Gains
(losses) on settlements
|
29 | (8 | ) | (4 | ) | |||||||
Total
recognized as other expense, net (Note 2.i)
|
18 | (21 | ) | (22 | ) |
Actuarial
assumptions
|
2008
|
2007
|
2006
|
|||||||||
Discount
rate
|
6.2% | 6.5% | 6% | |||||||||
Expected
return on assets
|
N/A | 7% | 7% | |||||||||
Expected
increase on salaries
|
N/A | N/A | 5.5% | |||||||||
Income
(Expense)
|
||||||||||||
i)
Other expense, net:
|
2008
|
2007
|
2006
|
|||||||||
Reserve for
pending lawsuits and other claims
|
(104 | ) | (194 | ) | (173 | ) | ||||||
Environmental
remediation - YPF Holdings Inc.
|
(303 | ) | (206 | ) | (136 | ) | ||||||
Defined
benefit pension plans and other postretirement benefits
(Nota
2.h)
|
18 | (21 | ) | (22 | ) | |||||||
Miscellaneous
|
13 | (18 | ) | 127 | ||||||||
(376 | ) | (439 | ) | (204 | ) |
3.
|
COMMITMENTS
AND CONTINGENCIES IN CONTROLLED
COMPANIES
|
|
-
|
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 along a
portion 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 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 previously 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,
in February 2009, all of those companies and governmental entities
(including certain municipalities) which could have contributed in
polluting the area, received 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 be forthcoming during 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 parties
(“PRP”). Such letters have been responded, rejecting the designation as
PRP. In November 2008, Tierra and Occidental entered into an agreement
with the NOAA to fund a portion of the costs it has incurred and to
conduct certain assessment activities during 2009. Approximately 20 other
PRRP members have also entered into similar
agreements.
|
|
-
|
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 is scheduled to begin in 2010,
encompasses the removal of 40,000 cubic yards of sediments and is expected
to be completed in nine months. The first phase estimated cost is
approximately US$ 45 million. The second phase involves the removal of
approximately 160,000 cubic yards of sediment. This second phase will
start once the first phase is completed. Pursuant to the AOC, the EPA has
required the constitution of a trust fund of US$ 80 million for the
performance of the removal work. As of December 31, 2008, an initial
deposit of US$ 2 million has been deposited and an additional US$ 10
million must be contributed every six months, until the completion of the
US$ 80 million. During the removal action, contaminants not produced by
the former Diamond Alkali 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 December 31, 2008, it is not possible to make
any predictions regarding the likelihood of success or the funds
potentially recoverable in a cost-recovery
action.
|
4.
|
CONSOLIDATED
BUSINESS SEGMENT INFORMATION
|
Exploration
and Production
|
Refining
and Marketing
|
Chemical
|
Corporate
and
Other
|
Consolidation
Adjustments
|
Total
|
|||||||||||||||||||
Year
ended December 31, 2008
|
||||||||||||||||||||||||
Net sales to
unrelated parties
|
4,016 | 25,364 | 2,829 | 219 | - | 32,428 | ||||||||||||||||||
Net sales to
related parties
|
939 | 1,508 | - | - | - | 2,447 | ||||||||||||||||||
Net
intersegment sales
|
12,663 | 1,145 | 1,094 | 461 | (15,363 | ) | - | |||||||||||||||||
Net
sales
|
17,618 | 28,017 | 3,923 | 680 | (15,363 | ) | 34,875 | |||||||||||||||||
Operating
income (loss)
|
3,315 | 3,089 | 1,178 | (815 | ) | (102 | ) | 6,665 | ||||||||||||||||
Income on
long-term investments
|
67 | 16 | - | - | - | 83 | ||||||||||||||||||
Depreciation
|
4,111 | 467 | 119 | 78 | - | 4,775 | ||||||||||||||||||
Acquisitions
of fixed assets
|
6,290 | 1,013 | 148 | 511 | - | 7,962 | ||||||||||||||||||
Assets
|
21,755 | 10,286 | 2,295 | 5,224 | (481 | ) | 39,079 | |||||||||||||||||
Year
ended December 31, 2007
|
||||||||||||||||||||||||
Net sales to
unrelated parties
|
3,288 | 20,375 | 2,563 | 109 | - | 26,335 | ||||||||||||||||||
Net sales to
related parties
|
724 | 2,045 | - | - | - | 2,769 | ||||||||||||||||||
Net
intersegment sales
|
14,056 | 1,858 | 892 | 440 | (17,246 | ) | - | |||||||||||||||||
Net
sales
|
18,068 | 24,278 | 3,455 | 549 | (17,246 | ) | 29,104 |
Operating
income (loss)
|
5,679 | 1,234 | 500 | (620 | ) | (136 | ) | 6,657 | ||||||||||||||||
Income on
long-term investments
|
18 | 16 | - | - | - | 34 | ||||||||||||||||||
Depreciation
|
3,616 | 377 | 92 | 54 | - | 4,139 | ||||||||||||||||||
Acquisitions
of fixed assets
|
4,861 | 898 | 143 | 314 | - | 6,216 | ||||||||||||||||||
Assets
|
19,893 | 11,199 | 2,220 | 5,421 | (631 | ) | 38,102 | |||||||||||||||||
Year
ended December 31, 2006
|
||||||||||||||||||||||||
Net sales to
unrelated parties
|
3,076 | 17,651 | 2,401 | 109 | - | 23,237 | ||||||||||||||||||
Net sales to
related parties
|
774 | 1,624 | - | - | - | 2,398 | ||||||||||||||||||
Net
intersegment sales
|
14,033 | 1,526 | 647 | 282 | (16,488 | ) | - | |||||||||||||||||
Net
sales
|
17,883 | 20,801 | 3,048 | 391 | (16,488 | ) | 25,635 | |||||||||||||||||
Operating
income (loss)
|
6,564 | 258 | 572 | (540 | ) | 29 | 6,883 | |||||||||||||||||
Income on
long-term investments
|
167 | 16 | - | - | - | 183 | ||||||||||||||||||
Depreciation
|
3,263 | 329 | 85 | 41 | - | 3,718 | ||||||||||||||||||
Acquisitions
of fixed assets
|
4,886 | 733 | 137 | 176 | - | 5,932 | ||||||||||||||||||
Assets
|
18,987 | 9,349 | 1,876 | 6,049 | (867 | ) | 35,394 | |||||||||||||||||
2008
|
||||||||||||||||||||
Cost
|
||||||||||||||||||||
Main
account
|
Amounts
at beginning
of
year
|
Translation
net
effect (5)
|
Increases
|
Net
decreases,
transfers
and reclassifications
|
Amounts
at
end
of year
|
|||||||||||||||
Land and
buildings
|
2,391 | - | 1 | 116 | 2,508 | |||||||||||||||
Mineral
property, wells and related equipments
|
51,595 | 56 | 1,038 | 4,899 | 57,588 | |||||||||||||||
Refinery
equipment and petrochemical plants
|
9,227 | - | 42 | 974 | 10,243 | |||||||||||||||
Transportation
equipment
|
1,887 | - | 3 | 66 | 1,956 | |||||||||||||||
Materials and
equipments in warehouse
|
791 | - | 828 | (792 | ) | 827 | ||||||||||||||
Drilling and
work in progress
|
4,617 | - | 5,492 | (5,770 | ) | 4,339 | ||||||||||||||
Exploratory
drilling in progress
|
147 | - | 322 | (353 | ) | 116 | ||||||||||||||
Furniture,
fixtures and installations
|
622 | - | 4 | 123 | 749 | |||||||||||||||
Selling
equipment
|
1,406 | - | 1 | 49 | 1,456 | |||||||||||||||
Other
property
|
377 | - | 231 | (26 | ) | 582 | ||||||||||||||
Total
2008
|
73,060 | 56 | 7,962 | (2)(7) | (714 | )(1) | 80,364 | |||||||||||||
Total
2007
|
61,939 | 10 | 6,216 | (2) | 4,895 | (1)(6) | 73,060 | |||||||||||||
Total
2006
|
61,812 | 2 | 5,932 | (2) | (5,807 | )(1)(6) | 61,939 |
2008
|
2007
|
2006
|
||||||||||||||||||||||||||||||
Depreciation
|
||||||||||||||||||||||||||||||||
Main
account
|
Accumulated
at
beginning
of
year
|
Net
decreases,
transfers
and
reclassifications
|
Depreciation
rate
|
Increases
|
Accumulated
at
the end of
year
|
Net
book
value
|
Net
book
value
|
Net
book
value
|
||||||||||||||||||||||||
Land
and buildings
|
1,108 | (2 | ) | 2 | % | 57 | 1,163 | 1,345 | 1,283 | 1,273 | ||||||||||||||||||||||
Mineral
property, wells and related equipments
|
37,131 | (43 | ) | (4) | 4,058 | 41,146 | 16,442 | (3) | 14,464 | (3) | 13,038 | (3) | ||||||||||||||||||||
Refinery
equipment and petrochemical plants
|
6,139 | (6 | ) | 4 - 10 | % | 459 | 6,592 | 3,651 | 3,088 | 2,857 | ||||||||||||||||||||||
Transportation
equipment
|
1,324 | (3 | ) | 4 - 5 | % | 62 | 1,383 | 573 | 563 | 577 | ||||||||||||||||||||||
Materials
and equipment in warehouse
|
- | - | - | - | - | 827 | 791 | 611 | ||||||||||||||||||||||||
Drilling
and work in progress
|
- | - | - | - | - | 4,339 | 4,617 | 3,569 | ||||||||||||||||||||||||
Exploratory
drilling in progress
|
- | - | - | - | - | 116 | 147 | 135 | ||||||||||||||||||||||||
Furniture,
fixtures and installations
|
523 | (1 | ) | 10 | % | 66 | 588 | 161 | 99 | 77 | ||||||||||||||||||||||
Selling
equipment
|
1,056 | - | 10 | % | 59 | 1,115 | 341 | 350 | 340 | |||||||||||||||||||||||
Other
property
|
298 | (8 | ) | 10 | % | 14 | 304 | 278 | 79 | 85 | ||||||||||||||||||||||
Total
2008
|
47,579 | (63 | )(1) | 4,775 | 52,291 | 28,073 | ||||||||||||||||||||||||||
Total
2007
|
39,377 | 4,063 | (1)(6) | 4,139 | 47,579 | 25,481 | ||||||||||||||||||||||||||
Total
2006
|
39,803 | (4,144 | )(1)(6) | 3,718 | 39,377 | 22,562 |
(1)
|
Includes 4,
118 and 194 of net book value charged to fixed assets allowances for the
year ended December 31, 2008, 2007 and 2006,
respectively.
|
(2)
|
Includes
444,53 and 930 corresponding to the cost of hydrocarbon wells abandonment
obligations for the year ended December 31, 2008, 2007 and 2006,
respectively.
|