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 March, 2009

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
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



 
This Form 6-K is incorporated by reference into the registration statement on Form F-3/A of YPF Sociedad Anónima filed with the Securities and Exchange Commission on March 10, 2008 (File No. 333-149313).
 

 
YPF Sociedad Anónima


TABLE OF CONTENTS


Item
   
     
1
 
Financial Statements as of December 31, 2008 and Comparative Information along with Statutory Audit Committee's Report
 

 
Item 1
 
 
Financial Statements as of December 31, 2008 and Comparative Information
Statutory Audit Committee's Report
 
 
 

 
YPF SOCIEDAD ANONIMA
 
 
FINANCIAL STATEMENTS AS OF DECEMBER 31, 2008 AND COMPARATIVE INFORMATION
 
 
INDEX
 
 
 
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

 

 



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 Autónoma de Buenos Aires, Argentina
 
 
FISCAL YEAR NUMBER 32
BEGINNING ON JANUARY 1, 2008
FINANCIAL STATEMENTS AS OF DECEMBER 31, 2008 AND COMPARATIVE INFORMATION
 
 
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 December 31, 2008
(expressed in Argentine pesos)
 
 

 
   
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
 
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 SHEET AS OF DECEMBER 31, 2008 AND COMPARATIVE INFORMATION
(amounts expressed in millions of Argentine pesos – Note 1 to the primary financial statements)
 
 
   
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  


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.
 
 
   
ANTONIO GOMIS SÁEZ
Director
 
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 STATEMENT OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 2008 AND COMPARATIVE INFORMATION
(amounts expressed in millions of Argentine pesos, except for per share amounts in Argentine pesos – Note 1 to the primary financial statements)

   
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  

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.
 
 
   
ANTONIO GOMIS SÁEZ
Director
 
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 STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 2008 AND COMPARATIVE INFORMATION
(amounts expressed in millions of Argentine pesos – Note 1 to the primary financial statements)

   
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  
 
For supplemental information on cash and equivalents, see Note 2.a.

 
(1)
Includes (155), (114) and (103) corresponding to interest payments for the years ended December 31, 2008, 2007 and 2006, 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.
 
 
   
ANTONIO GOMIS SÁEZ
Director
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 YEAR ENDED DECEMBER 31, 2008 AND COMPARATIVE INFORMATION
(amounts expressed in millions of Argentine pesos – Note 1 to the primary financial statements, except where otherwise indicated)


1.
CONSOLIDATED FINANCIAL STATEMENTS
 
Under General Resolution No. 368 from the National 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 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.
 
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 latest 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.
 
c)
Valuation criteria:
 
In addition to the valuation criteria disclosed in the notes to YPF’s primary financial statements, the following additional valuation criteria have been applied in the preparation of the consolidated financial statements:
 
 
5

 
 
Fixed assets
 
Properties on foreign unproved reserves have been valued at cost and translated into pesos as detailed in Note 2.e 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 other 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.
 
As of December 31, 2008, YPF Holdings Inc. has curtailed postretirements health care benefits to certain retirees. The effect of the curtailment has not been material.
 
The benefits related to the mentioned plans are valued at net present value and accrued 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 service period of the employees participating in the plans and the life expectancy of the retired employees. YPF Holdings Inc. 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.
 
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 year. Anticipated losses on contracts in progress are expensed as soon as they become evident.
 

 
6

 
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 Sheet as of December 31, 2008 and Comparative Information
 
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.
 
 

7

 
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  
 
 
 
8


 
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%  
                         
 

 
9

 
 
Consolidated Statement of Income as of December 31, 2008 and Comparative Information

 
   
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
 
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, among other things. 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 December 31, 2008, reserves for the environmental contingencies and other claims totaled approximately 624. YPF Holdings Inc.’s Management believes it has adequately reserved for all environmental contingencies, which are probable and can be reasonably estimated; 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:
 
 
10

 
 
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 51 as of December 31, 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 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
 
 
11

 
 
   
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.
 
 

 
12

 
As of December 31, 2008, there are approximately 296 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 an agreement for which Tierra will pay US$ 5 million and will perform remediation works in three sites, with a total cost of approximately US$ 2 million. As a result YPF Holdings Inc. has reserved 24 (which are included in the amount of 103 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 27 (which are included in the amount of 103 disclosed in the following paragraphs).

As of December 31, 2008, there are approximately 103 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
 
 
13

 
still reviewing the proposed actions. The cost of addressing these chrome-related matters could increase depending upon the final soil actions, 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 will 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 15 as of December 31, 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 December 31, 2008, YPF Holdings Inc. has reserved 43 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 December 31, 2008 for its estimated share of the costs of the RIFS. YPF Holdings Inc. lacks sufficient information to determine additional 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 vinculation. 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 December 31, 2008, YPF Holdings Inc. has reserved 10 in connection with its estimated share of costs related to certain sites and the ultimate cost of other sites cannot be estimated at the present 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
 
 
14

 
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 December 31, 2008, YPF Holdings Inc. has reserved 33 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 (“VCM”), 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. However, 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 December 31, 2008 YPF Holdings Inc. has reserved approximately 57 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 December 31, 2008, YPF Holdings Inc. has reserved 13 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 Project”. Total commitments related to the development of the Neptune Project amounts to US$ 31 million.

 
 
15

 
 
4.
CONSOLIDATED BUSINESS SEGMENT INFORMATION

The Company organizes its business into four segments which comprise: the exploration and production, including 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 and construction activities.

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
 
                                     
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  
                                                 

Export sales, net of withholdings taxes, for the years ended December 31, 2008, 2007 and 2006 were 7,228, 8,400 and 8,649, respectively. Export sales were mainly to the United States of America, Brazil and Chile.
 
 
 
16

 
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 DECEMBER 31, 2008 AND COMPARATIVE INFORMATION
FIXED ASSETS EVOLUTION
(amounts expressed in millions of Argentine pesos – Note 1 to the primary financial statements)

 
   
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.