6-K

 

 

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 6-K

 

 

Report of Foreign Issuer

Pursuant to Rule 13a-16 or 15d-16

of the Securities Exchange Act of 1934

For the month of November, 2015

Commission File Number: 001-12102

 

 

YPF Sociedad Anónima

(Exact name of registrant as specified in its charter)

 

 

Macacha Güemes 515

C1106BKK Buenos Aires, Argentina

(Address of principal executive office)

 

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:

Form 20-F  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

 

 

 


YPF Sociedád Anonima

TABLE OF CONTENTS

 

ITEM

1 Translation of Condensed Interim Consolidated Financial Statements as of September 30, 2015 and Comparative Information.


LOGO

SOCIEDAD ANONIMA

Condensed Interim Consolidated

Financial Statements as of September 30, 2015 and Comparative Information


CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS AS OF SEPTEMBER 30, 2015 AND COMPARATIVE INFORMATION

 

Index    Page  

• Cover

     1   

• Condensed interim consolidated statements of financial position

     2   

• Condensed interim consolidated statements of comprehensive income

     3   

• Condensed interim consolidated statements of changes in shareholders’ equity

     4   

• Condensed interim consolidated statements of cash flow

     6   

• Notes to the condensed interim consolidated financial statements:

  

1) Basis of preparation of the condensed interim consolidated financial statements

  

a. Basis of preparation

     7   

b. Significant accounting policies

     7   

c. Accounting estimates and judgments

     8   

d. Comparative information

     9   

2) Seasonality of operations

     9   

3) Acquisitions and disposals

     9   

4) Financial risk management and fair value measurements

  

a. Financial risk

     10   

b. Fair value measurements

     10   

c. Fair value of financial assets and financial liabilities measured at amortized cost

     11   

5) Segment information

     12   

6) Analysis of the main accounts of the condensed interim consolidated financial statements

  

a. Intangible assets

     13   

b. Fixed assets

     13   

c. Investments in companies

     15   

d. Inventories

     15   

e. Other receivables

     15   

f. Trade receivables

     16   

g. Cash and cash equivalents

     16   

h. Provisions

     16   

i. Income tax

     17   

j. Loans

     18   

k. Accounts payable

     20   

l. Revenues

     20   

m. Cost of sales

     20   

n. Expenses

     21   

o. Other operating results, net

     22   

7) Investments in companies and joint operation

     22   

8) Shareholders’ equity

     23   

9) Earnings per share

     23   


10) Provisions for pending lawsuits, claims and environmental liabilities

     24   

11) Contingent liabilities, contingent assets, contractual commitments, main regulations and other

  

a. Contingent liabilities

     27   

b. Contingent assets

     28   

c. Contractual commitments, main regulations and other

     28   

12) Balances and transactions with related parties

     32   

13) Employee benefit plans and similar obligations

     34   

14) Information required by regulatory authorities

     35   

15) Investments in companies

     36   

16) Assets and liabilities in currencies other than the Argentine peso

     38   

17) Subsequent events

     39   

 


English translation of the condensed interim consolidated financial statements originally filed in Spanish with the Argentine Securities Commission (“CNV”). In case of discrepancy, the condensed interim consolidated financial statements filed with the CNV prevail over this translation.

YPF SOCIEDAD ANONIMA

Macacha Güemes 515 – Ciudad Autónoma de Buenos Aires, Argentina

FISCAL YEAR NUMBER 39

BEGINNING ON JANUARY 1, 2015

CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS AS OF SEPTEMBER 30, 2015 AND FOR THE NINE-MONTH PERIOD ENDED SEPTEMBER 30, 2015 AND COMPARATIVE INFORMATION

LEGAL INFORMATION

Principal business of the Company: exploration, development and production of oil, 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; production 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.

Filing with the Public Register: Bylaws filed on February 5, 1991 under No. 404, Book 108, Volume “A”, Corporations, with the Public Registry of Buenos Aires City, in charge of Inspección General de Justicia (Argentine Registrar of Companies); and Bylaws in substitution of previous Bylaws, filed on June 15, 1993, under No. 5109, Book 113, Volume “A”, Corporations, with the above mentioned Registry.

Duration of the Company: through June 15, 2093.

Last amendment to the bylaws: April 14, 2010.

Optional Statutory Regime related to Compulsory Tender Offer provided by Decree No. 677/2001 art. 24: not incorporated (modified by Law No. 26,831).

Capital structure as of September 30, 2015

(expressed in Argentine pesos)

 

- Subscribed, paid-in and authorized for stock exchange listing

     3,933,127,930  (1) 

 

(1) Represented by 393,312,793 shares of common stock, Argentine pesos 10 per value and 1 vote per share

 

  

MIGUEL MATIAS GALUCCIO

Presidente

 

1


English translation of the condensed interim consolidated financial statements originally filed in Spanish with the Argentine Securities Commission (“CNV”). In case of discrepancy, the condensed interim consolidated financial statements filed with the CNV prevail over this translation.

 

YPF SOCIEDAD ANONIMA AND CONTROLLED COMPANIES

Condensed interim consolidated statements of financial position as of September 30, 2015 and December 31, 2014

(Amounts expressed in millions of Argentine Pesos, except shares and per share amounts expressed in Argentine Pesos, and as otherwise indicated – Note 1.b)

 

    

Notes

   September 30,
2015
     December 31,
2014
 

ASSETS

        

Noncurrent Assets

        

Intangible assets

   6.a      5,033         4,393   

Fixed assets

   6.b      194,047         156,930   

Investments in companies

   6.c      3,309         3,177   

Deferred income tax assets, net

   6.i      223         244   

Other receivables

   6.e      1,833         1,691   

Trade receivables

   6.f      342         19   
     

 

 

    

 

 

 

Total noncurrent assets

        204,787         166,454   
     

 

 

    

 

 

 

Current Assets

        

Inventories

   6.d      14,431         13,001   

Other receivables

   6.e      11,002         7,170   

Trade receivables

   6.f      15,594         12,171   

Cash and cash equivalents

   6.g      10,857         9,758   
     

 

 

    

 

 

 

Total current assets

        51,884         42,100   
     

 

 

    

 

 

 

TOTAL ASSETS

        256,671         208,554   
     

 

 

    

 

 

 

SHAREHOLDERS’ EQUITY

        

Shareholders’ contributions

        10,370         10,400   

Reserves, other comprehensive income and retained earnings

        76,230         62,230   
     

 

 

    

 

 

 

Shareholders’ equity attributable to the shareholders of the parent company

        86,600         72,630   
     

 

 

    

 

 

 

Non-controlling interest

        218         151   
     

 

 

    

 

 

 

TOTAL SHAREHOLDERS’ EQUITY

        86,818         72,781   
     

 

 

    

 

 

 

LIABILITIES

        

Noncurrent Liabilities

        

Provisions

   6.h      29,948         26,564   

Deferred income tax liabilities, net

   6.i      23,554         18,948   

Taxes payable

        220         299   

Loans

   6.j      59,526         36,030   

Accounts payable

   6.k      721         566   
     

 

 

    

 

 

 

Total noncurrent liabilities

        113,969         82,407   
     

 

 

    

 

 

 

Current Liabilities

        

Provisions

   6.h      2,525         2,399   

Income tax liability

        1,058         3,972   

Taxes payable

        3,602         1,411   

Salaries and social security

        2,026         1,903   

Loans

   6.j      15,720         13,275   

Accounts payable

   6.k      30,953         30,406   
     

 

 

    

 

 

 

Total current liabilities

        55,884         53,366   
     

 

 

    

 

 

 

TOTAL LIABILITIES

        169,853         135,773   
     

 

 

    

 

 

 

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY

        256,671         208,554   
     

 

 

    

 

 

 

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

 

 

  

MIGUEL MATIAS GALUCCIO

Presidente

2


English translation of the condensed interim consolidated financial statements originally filed in Spanish with the Argentine Securities Commission (“CNV”). In case of discrepancy, the condensed interim consolidated financial statements filed with the CNV prevail over this translation.

 

YPF SOCIEDAD ANONIMA AND CONTROLLED COMPANIES

Condensed interim consolidated statements of comprehensive income for the nine-month and three-month periods ended September 30, 2015 and 2014

(amounts expressed in millions of Argentine Pesos, except shares and per share amounts expressed in Argentine Pesos, and as otherwise indicated – Note 1.b)

 

          For the nine-month period
ended September 30,
    For the three-month period
ended September 30,
 
    

Notes

   2015     2014     2015     2014  

Revenues

   6.l      115,190        104,203        40,931        38,209   

Cost of sales

   6.m      (86,756     (74,808     (30,670     (26,365
     

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

        28,434        29,395        10,261        11,844   
     

 

 

   

 

 

   

 

 

   

 

 

 

Selling expenses

   6.n      (8,065     (7,287     (2,587     (2,766

Administrative expenses

   6.n      (3,857     (3,116     (1,301     (1,119

Exploration expenses

   6.n      (1,760     (1,230     (1,182     (306

Other operating results, net

   6.o      926        616        440        391   
     

 

 

   

 

 

   

 

 

   

 

 

 

Operating income

        15,678        18,378        5,631        8,044   
     

 

 

   

 

 

   

 

 

   

 

 

 

Income on investments in companies

   7      52        61        36        38   

Financial results, net

           

Gains (losses) on assets

           

Interests

        1,051        1,078        327        480   

Exchange differences

        (975     (2,240     (358     (620

(Losses) Gains on liabilities

           

Interests

        (7,049     (5,304     (2,401     (1,793

Exchange differences

        4,964        9,914        1,731        1,880   
     

 

 

   

 

 

   

 

 

   

 

 

 

Net income before income tax

        13,721        21,887        4,966        8,029   
     

 

 

   

 

 

   

 

 

   

 

 

 

Income tax

   6.i      (7,430     (14,338     (3,082     (4,810
     

 

 

   

 

 

   

 

 

   

 

 

 

Net income for the period

        6,291        7,549        1,884        3,219   
     

 

 

   

 

 

   

 

 

   

 

 

 

Net income for the period attributable to:

           

- Shareholders of the parent company

        6,274        7,619        1,850        3,212   

- Non-controlling interest

        17        (70     34        7   

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

   9      16.00        19.43        4.72        8.19   

Other comprehensive income

           

Translation differences from investments in companies (2)

        (292     (533     (127     (98

Translation differences from YPF S.A. (3)

        8,521        15,692        3,333        2,613   
     

 

 

   

 

 

   

 

 

   

 

 

 

Total other comprehensive income for the period (1)

        8,229        15,159        3,206        2,515   
     

 

 

   

 

 

   

 

 

   

 

 

 

Total comprehensive income for the period

        14,520        22,708        5,090        5,734   
     

 

 

   

 

 

   

 

 

   

 

 

 

 

(1) Entirely assigned to the parent company’s shareholders.
(2) Will be reversed to net income at the moment of the sale of the investment or full or partial reimbursement of the capital.
(3) Will not be reversed to net income.

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

 

  

MIGUEL MATIAS GALUCCIO

Presidente

3


English translation of the condensed interim consolidated financial statements originally filed in Spanish with the Argentine Securities Commission (“CNV”). In case of discrepancy, the condensed interim consolidated financial statements filed with the CNV prevail over this translation.

 

YPF SOCIEDAD ANONIMA AND CONTROLLED COMPANIES

Condensed interim consolidated statements of changes in shareholders’ equity for the nine-month periods ended September 30, 2015 and 2014

(amounts expressed in millions of Argentine Pesos, except shares and per share amounts expressed in Argentine Pesos, and as otherwise indicated – Note 1.b)

 

     2015  
     Shareholders’ contributions  
     Subscribed
capital
    Adjustment to
contributions
    Treasury
shares
     Adjustment to
treasury
shares
     Share-based
benefit plans
     Acquisition
cost of
treasury
shares
    Share trading
premium
    Issuance
premiums
     Total  

Balances as of December 31, 2014

     3,922        6,083        11         18         51         (310     (15     640         10,400   

Accrual of share-based benefit plans

     —          —          —           —           89         —          —          —           89   

Repurchase of treasury shares

     (4     (6     4         6         —           (119     —          —           (119

Contributions of non-controlling interest

     —          —          —           —           —           —          —          —           —     

As decided by Ordinary and Extraordinary Shareholders’ meeting of April 30, 2015
(Note 8)

     —          —          —           —           —           —          —          —           —     

As decided by the Board of Directors of June 8, 2015
(Note 8)

               —           —          —          —           —     

Other comprehensive income for the period

     —          —          —           —           —           —          —          —           —     

Net income

     —          —          —           —           —           —          —          —           —     
  

 

 

   

 

 

   

 

 

    

 

 

    

 

 

    

 

 

   

 

 

   

 

 

    

 

 

 

Balances as of September 30, 2015

     3,918        6,077        15         24         140         (429     (15     640         10,370   
  

 

 

   

 

 

   

 

 

    

 

 

    

 

 

    

 

 

   

 

 

   

 

 

    

 

 

 

 

     2015  
     Reserves                  Equity attributable to         
     Legal      Future
dividends
    Investments      Purchase of
treasury
shares
     Initial IFRS
adjustment
     Other
comprehensive
income
    Retained
earnings
    Parent
company’s
shareholders
    Non-
controlling
interest
     Total
shareholders’
equity
 

Balances as of December 31, 2014

     2,007         5        12,854         320         3,648         34,363        9,033        72,630        151         72,781   

Accrual of share-based benefit plans

     —           —          —           —           —           —          —          89        —           89   

Repurchase of treasury shares

     —           —          —           —           —           —          —          (119     —           (119

Contributions of non-controlling interest

     —           —          —           —           —           —          —          —          50         50   

As decided by Ordinary and Extraordinary Shareholders’ meeting of April 30, 2015
(Note 8)

     —           503        8,410         120         —           —          (9,033     —          —           —     

As decided by the Board of Directors of June 8, 2015
(Note 8)

     —           (503     —           —           —           —          —          (503     —           (503

Other comprehensive income for the period

     —           —          —           —           —           8,229        —          8,229        —           8,229   

Net income

     —           —          —           —           —           —          6,274        6,274        17         6,291   
  

 

 

    

 

 

   

 

 

    

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

    

 

 

 

Balances as of September 30, 2015

     2,007         5        21,264         440         3,648         42,592 (1)      6,274        86,600        218         86,818   
  

 

 

    

 

 

   

 

 

    

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

    

 

 

 

 

(1) Includes 44,285 corresponding to the effect of the translation of the financial statements of YPF S.A. and (1,693) corresponding to the effect of the translation of the financial statements of investments in companies with functional currency different to dollar, as detailed in Note 1.b.1 to the annual consolidated financial statements.

 

  

MIGUEL MATIAS GALUCCIO

Presidente

4


English translation of the condensed interim consolidated financial statements originally filed in Spanish with the Argentine Securities Commission (“CNV”). In case of discrepancy, the condensed interim consolidated financial statements filed with the CNV prevail over this translation.

YPF SOCIEDAD ANONIMA AND CONTROLLED COMPANIES

Condensed interim consolidated statements of changes in shareholders’ equity for the nine-month periods ended September 30, 2015 and 2014 (Cont.)

(amounts expressed in millions of Argentine Pesos, except shares and per share amounts expressed in Argentine Pesos, and as otherwise indicated – Note 1.b)

 

     2014  
     Shareholders’ contributions  
     Subscribed
capital
    Adjustment to
contributions
    Treasury
shares
     Adjustment to
treasury
shares
     Share-based
benefit plans
     Acquisition cost
of treasury
shares
    Share trading
premium
    Issuance
premiums
     Total  

Balances as of December 31, 2013

     3,924        6,087        9         14         40         (110     (4     640         10,600   

Accrual of share-based benefit plans

     —          —          —           —           56         —          —          —           56   

Repurchase of treasury shares

     (6     (10     6         10         —           (198     —          —           (198

As decided by Ordinary and Extraordinary Shareholders’ meeting of April 30, 2014

     —          —          —           —           —           —          —          —           —     

As decided by the Board of Directors of June 11, 2014

     —          —          —           —           —           —          —          —           —     

Other comprehensive income for the period

     —          —          —           —           —           —          —          —           —     

Net income

     —          —          —           —           —           —          —          —           —     
  

 

 

   

 

 

   

 

 

    

 

 

    

 

 

    

 

 

   

 

 

   

 

 

    

 

 

 

Balances as of September 30, 2014

     3,918        6,077        15         24         96         (308     (4     640         10,458   
  

 

 

   

 

 

   

 

 

    

 

 

    

 

 

    

 

 

   

 

 

   

 

 

    

 

 

 

 

     2014  
     Reserves                        Equity attributable to  
     Legal      Future
dividends
    Investments      Purchase of
treasury
shares
     Initial IFRS
adjustment
     Other
comprehensive
income
    Retained
earnings
    Parent
company’s
shareholders
    Non-
controlling
interest
    Total
shareholders’
equity
 

Balances as of December 31, 2013

     2,007         4        8,394         120         3,648         18,112        5,131        48,016        224        48,240   

Accrual of share-based benefit plans

     —           —          —           —           —           —          —          56        —          56   

Repurchase of treasury shares

     —           —          —           —           —           —          —          (198     —          (198

As decided by Ordinary and Extraordinary Shareholders’ meeting of April 30, 2014

     —           465        4,460         200         —           —          (5,125     —          —          —     

As decided by the Board of Directors of June 11, 2014

     —           (464     —           —           —           —          —          (464     —          (464

Other comprehensive income for the period

     —           —          —           —           —           15,159        —          15,159        —          15,159   

Net income

     —           —          —           —           —           —          7,619        7,619        (70     7,549   
  

 

 

    

 

 

   

 

 

    

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balances as of September 30, 2014

     2,007         5        12,854         320         3,648         33,271 (1)      7,625        70,188        154        70,342   
  

 

 

    

 

 

   

 

 

    

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(1) Includes 34,528 corresponding to the effect of the translation of the financial statements of YPF S.A. and (1,257) corresponding to the effect of the translation of the financial statements of investments in companies with functional currency different to dollar, as detailed in Note 1.b.1 to the Annual Consolidated Financial Statements.

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

 

  

MIGUEL MATIAS GALUCCIO

Presidente

5


English translation of the condensed interim consolidated financial statements originally filed in Spanish with the Argentine Securities Commission (“CNV”). In case of discrepancy, the condensed interim consolidated financial statements filed with the CNV prevail over this translation.

 

YPF SOCIEDAD ANONIMA AND CONTROLLED COMPANIES

Condensed interim consolidated statements of cash flow for the nine-month periods ended September 30, 2015 and 2014

(Amounts expressed in millions of Argentine Pesos, except shares and per share amounts expressed in Argentine Pesos, and as otherwise indicated – Note 1.b)

 

     For the nine-month periods
ended September 30,
 
     2015     2014  

Operating activities:

    

Net income

     6,291        7,549   

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

    

Result on investments in companies

     (52     (61

Depreciation of fixed assets

     18,961        13,660   

Amortization of intangible assets

     225        250   

Consumption of materials and retirement of fixed assets and intangible assets, net of provisions

     3,250        2,671   

Charge on income tax

     7,430        14,338   

Net increase in provisions

     2,274        2,465   

Exchange differences, interest and other (1)

     1,350        (1,042

Share-based benefit plan

     89        56   

Accrued insurance

     (1,085     (1,632

Changes in assets and liabilities:

    

Trade receivables

     (2,853     (4,150

Other receivables

     (4,299     (802

Inventories

     (240     232   

Accounts payable

     3,182        1,663   

Taxes payables

     2,112        3,006   

Salaries and social security

     123        431   

Decrease in provisions due to payment/use

     (1,247     (1,580

Dividends received

     181        233   

Proceeds from collection of lost profit insurance

     1,673        1,689   

Income tax payments

     (5,650     (2,582
  

 

 

   

 

 

 

Net cash flows provided by operating activities

     31,715        36,394   
  

 

 

   

 

 

 

Investing activities:(2)

    

Acquisition of fixed assets and intangible assets

     (46,692     (35,365

Contributions and acquisitions of interests in companies

     (163     (94

Advances received from sale of fixed assets

     —          1,711   

Acquisition of participation in joint operations

     —          (869

Acquisition of subsidiaries net of acquired cash and cash equivalents

     —          (6,103

Proceeds from collection of damaged property’s insurance

     —          1,818   
  

 

 

   

 

 

 

Net cash flows used in investing activities

     (46,855     (38,902
  

 

 

   

 

 

 

Financing activities:(2)

    

Payments of loans

     (17,624     (9,012

Payments of interest

     (4,531     (3,215

Proceeds from loans

     38,162        19,342   

Repurchase of treasury shares

     (119     (198

Dividends paid

     (503     (464
  

 

 

   

 

 

 

Net cash flows provided by financing activities

     15,385        6,453   
  

 

 

   

 

 

 

Translation differences generated by cash and cash equivalents

     854        1,215   
  

 

 

   

 

 

 

Net increase in cash and cash equivalents

     1,099        5,160   
  

 

 

   

 

 

 

Cash and cash equivalents at the beginning of year

     9,758        10,713   

Cash and cash equivalents at the end of period

     10,857        15,873   
  

 

 

   

 

 

 

Net increase in cash and cash equivalents

     1,099        5,160   
  

 

 

   

 

 

 

COMPONENTS OF CASH AND CASH EQUIVALENTS AT THE END OF PERIOD

    

- Cash

     9,195        6,567   

- Cash equivalents

     1,662        9,306   
  

 

 

   

 

 

 

TOTAL CASH AND CASH EQUIVALENTS AT THE END OF PERIOD

     10,857        15,873   
  

 

 

   

 

 

 

 

(1) Does not include translation differences generated by cash and cash equivalents, which is exposed separately in the statement.
(2) The main investing and financing transactions that have not affected cash and cash equivalents correspond to unpaid acquisitions of fixed assets and concession extension easements not paid for 4,862 and 4,977 for the nine-month periods ended September 30, 2015 and 2014, respectively; additions for abandonment costs for 492 for the nine-month period ended September 30, 2014 and contributions of non-controlling interests for 50 as of September 30, 2015.

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

 

  

MIGUEL MATIAS GALUCCIO

Presidente

6


YPF SOCIEDAD ANONIMA AND CONTROLLED COMPANIES

Notes to the condensed interim consolidated financial statements as of September 30, 2015 and comparative information

(amounts expressed in millions of Argentine Pesos, except shares and per share amounts expressed in Argentine Pesos, and as otherwise indicated – Note 1.b)

1. BASIS OF PREPARATION OF THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

1.a. Basis of preparation

The condensed interim consolidated financial statements of YPF S.A. (hereinafter “YPF” or the “Company”) and its controlled companies (hereinafter and all together, the “Group”) for the nine-month period ended September 30, 2015, are presented in accordance with International Accounting Standards (“IAS”) No. 34 “Interim Financial Reporting”. The adoption of the International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) was determined by the Technical Resolution No. 26 (ordered text) issued by Argentine Federation of Professional Councils in Economic Sciences (“FACPCE”) and the Regulations of the Argentine Securities Commission (“CNV”). Also, some additional information required by the Law 19,550 of Argentine Corporations and /or regulations of the CNV, was included. Such information was included in the Notes to the mentioned condensed interim consolidated financial statements only to comply with regulatory requirements.

These Condensed Interim Consolidated Financial Statements should be read in conjunction with the Annual Consolidated Financial Statements of the Group as of December 31, 2014 (“the Annual Consolidated Financial Statements”) prepared in accordance with IFRS.

These condensed interim consolidated financial statements were approved by the Board of Directors’ meeting and authorized to be issued on November 5, 2015.

These Condensed Interim Consolidated Financial Statements corresponding to the nine-month period ended on September 30, 2015 are unaudited. Management believes they include all necessary adjustments to fairly present the results of each period on a consistent basis with the annual consolidated financial statements. Results for the nine-month period ended on September 30, 2015 do not necessarily reflect the proportion of the Group’s full-year results.

1.b) Significant Accounting Policies

The accounting policies adopted in the preparation of these condensed interim consolidated financial statements are consistent with those used in the preparation of the Annual Consolidated Financial Statements of the Group as of December 31, 2014, except for the valuation policy for Income Tax detailed in Note 6.i). The most significant accounting policies are described in Note 1 to such annual consolidated financial statements. Furthermore, revenue recognition treatment given by the Group for incentive scheme is described below.

 

7


Revenue recognition for incentive scheme

The incentives for additional natural gas injection (see Note 11.c to the annual consolidated financial statements) and the crude oil production (see Note 11.c), issued by the Comisión de Planificación y Coordinación Estratégica del Plan Nacional de Inversiones Hidrocarburíferas (“Strategic Planning and Coordination Commission of the National Hydrocarbon Investment Plan”) by Resolutions No. 1/2013 and No. 14/2015, respectively, fall within the scope of IAS 20 “Accounting for Government Grants and Disclosure of Government Assistance” because they consist of an economic compensation for companies committed to increasing their productions.

Moreover, the temporary economic assistance received by Metrogas S.A. ordered by the Argentine Energy Secretariat in Resolution No. 263/2015 (see Note 11.c) is also contemplated under this standard, because it is intended to cover costs and investments related to the normal operation of the provision of the natural gas distribution public service by preserving the chain of payments to natural gas producers until completion of the Tariff Review.

Such revenues are recognized at fair value when there is reasonable assurance that the incentives will be received and the conditions related to them are met.

Production incentives have been included in “Revenues” in the condensed interim consolidated statement of comprehensive income, while the temporary economic assistance has been included under the category “Other operating results, net”.

New issued standards

The standards, interpretations and related amendments published by the IASB and endorsed by the FACPCE and the CNV which have been applied by the Group as from the year beginning on January 1, 2015, are the following:

 

    Annual improvements to IFRS (2010-2012 cycle) modify several standards, including amendments to IAS 16 (Property, Plant and Equipment), IAS 24 (Related Party Disclosures), IAS 38 (Intangible Assets), IFRS 2 (Shared-based Payment), IFRS 3 (Business Combinations), IFRS 8 (Operating Segments) and IFRS 13 (Fair Value Measurement).

 

    Annual improvements to IFRS (2011-2013 cycle) modify several standards, including amendments to IAS 40 (Investment Property), IFRS 1 (First-time Adoption of International Financial Reporting Standards), IFRS 3 (Business Combinations) and IFRS 13 (Fair Value Measurement).

The aforementioned adoption of standards, interpretations and related amendments did not have significant impact on these condensed interim consolidated financial statements of the Group.

Functional and reporting currency

As it was mentioned in Note 1.b.1 to the Annual Consolidated Financial Statements YPF has defined the U.S. dollar as its functional currency. In addition, according to General Resolution No. 562 of the CNV, YPF shall submit its financial statements in Argentine Pesos.

1.c) Accounting Estimates and Judgments

The preparation of financial statements at a certain date requires the Management to make estimates and assessments affecting the amount of assets and liabilities recorded, contingent assets and liabilities disclosed at such date, as well as income and expenses recorded during the period. Actual future results might differ from the estimates and assessments made at the date of preparation of these condensed interim consolidated financial statements.

 

8


In the preparation of these Condensed Interim Consolidated Financial Statements, significant judgments made by Management in applying the Group’s accounting policies and the main sources of uncertainty were the same as those applied by the Group in the preparation of the Annual Consolidated Financial Statements for the year ended December 31, 2014, which are disclosed in Note 1.c) related to accounting estimates and judgments to those financial statements.

1.d) Comparative information

Amounts and other information corresponding to the year ended on December 31, 2014 and to the nine-month and three-month period ended on September 30, 2014, are an integral part of the condensed interim consolidated financial statements previously mentioned and are intended to be read only in relation to these statements. Certain reclassifications have been made in order to present amounts comparatively with the current period.

2. SEASONALITY OF OPERATIONS

Historically, the Group results have been subject to seasonal fluctuations during the year, particularly as a result of the increase of natural gas sales during the winter. After the 2002 devaluation and as a consequence of the natural gas price freeze imposed by the Argentine government, the use of this fuel has been diversified, generating an increase of its demand throughout the entire year. However, sales of natural gas are still typically higher in the winter to the residential sector of the Argentine domestic market, which prices are lower than other sectors of the Argentine market. Notwithstanding the foregoing, on February 14, 2013, Resolution 1/2013 of the Planning and Strategic Coordination Commission of the National Plan of Hydrocarbon Investments (the “Commission”) was published in the Official Gazette, creating the “Natural Gas Additional Injection Stimulus Program.” Under this regulation, gas producing companies were invited to file with the Commission before June 30th, 2013 projects to increase natural gas injection, in order to receive an increased price of U.S.$7.50/mmBtu for all additional natural gas injected. These projects shall comply with minimum requirements established in Resolution 1/2013, and will be subject to consideration approval by the Commission, including a maximum term of five years, renewable at the request of the beneficiary, upon decision of the Commission. If the beneficiary company in a given month does not reach the committed production increase it will have to make up for such volumes not produced. During 2014, the natural gas pricing program was incorporated into the Hydrocarbons Law, as modified by Law No. 27,007. In view of the foregoing, seasonality of the Group operations is not significant.

3. ACQUISITIONS AND DISPOSALS

 

  On May 7, 2015 the transfer by Repsol Butano S.A. to YPF of shares representing the 33.997% of the capital of YPF Gas S.A. was effective as well as the transfer from Repsol Trading S.A. to YPF of the 17.79% of the capital of Oleoducto Trasandino Chile. The transaction was for a total amount of 161. The estimation of the fair values of the main identified assets and liabilities of the acquired companies and the initial investment accounting are provisional and subject to the completion of the analysis of the accounting, tax and contractual information of the acquired companies.

 

9


  On August 18, 2015, YPF and Grupo Inversor Petroquímica S.L. (“GIP”) accepted an offer from Basell International Holdings B.V. and from Lyondell Basell Industries Holdings B.V. to acquire 100% of the shares of Petroken Petroquímica Ensenada S.A. (“Petroken”). The aggregate price for the shares, as agreed upon by the parties is around US$ 142.4 million, net of cash and banks and financial debt. The price includes working capital, and shall be adjusted on the agreement execution date. The closing of these acquisitions is subject to fulfillment of certain precedent conditions.

In addition, on the same date, YPF accepted an offer from GIP to acquire 46% of the shares of Petroquímica Cuyo S.A. (a company controlled by GIP) in an aggregate amount of approximately US$ 50 million, net of cash and banks and financial debt. This price includes 46% of working capital, and shall be adjusted on the agreement execution date. The closing of these acquisitions is subject to fulfillment of certain precedent conditions, including the closing of the transaction mentioned in the preceding paragraph.

As a result of the above-mentioned transactions, YPF and GIP shall jointly and equally control 100% of the capital stock of Petroken and 92% of the capital stock of Petroquímica Cuyo S.A.

4. FINANCIAL RISK MANAGEMENT AND FAIR VALUE MEASUREMENTS

4.a. Financial Risk

The Group’s activities are exposed to a variety of financial risk: market risk (including foreign currency risk, interest rate risk and price risk) credit risk, liquidity risk and capital risk.

The Condensed Interim Consolidated Financial Statements do not include all the information and disclosures on financial risk management; therefore they should be read in conjunction with the Group’s Annual Consolidated Financial Statements for the year ended December 31, 2014.

There have been no changes in the risk management or risk management policies applied by the Group since the end of last year.

4.b. Fair value measurements

IFRS 9 defines the fair value of a financial instrument as the amount for which an asset could be exchanged, or a financial liability settled, between knowledgeable, willing parties in an arm’s length transaction. All financial instruments recognized at fair value are allocated to one of the valuation hierarchy levels of IFRS 7. This valuation hierarchy provides for three levels.

In the case of Level 1, valuation is based on unadjusted quoted prices in active markets for identical financial assets or liabilities that the Group can refer to at the end of the period. A market is deemed active if transactions take place with sufficient frequency and in sufficient quantity for price information to be available on an ongoing basis. Since a quoted price in an active market is the most reliable indicator of fair value, this should always be used if available. Financial instruments assigned by the Group to this level comprise investments in listed mutual funds, which results for the nine-month periods ended on September 30, 2015 and 2014, are disclosed under “Interest income” in the condensed interim consolidated statements of comprehensive income.

 

10


In the case of Level 2, fair value is determined by using valuation methods based on inputs directly or indirectly observable in the market. If the financial instrument concerned has a fixed contract period, the inputs used for valuation must be observable for the whole of this period. The Group has not valued financial instruments under this category.

In the case of Level 3, the Group uses valuation techniques not based on inputs observable in the market. This is only permissible insofar as no market data are available. The inputs used reflect the Group’s assumptions regarding the factors which market players would consider in their pricing. The Group uses the best available information for this, including internal company data. The Group has not valued financial instruments under this category.

The Company’s Finance Division has a team in place in charge of estimating valuation of financial instruments required to be reported in the financial statements, including the fair value of Level-3 instruments. The team directly reports to the Chief Financial Officer (“CFO”). The CFO and the valuation team discuss the valuation methods and results upon the acquisition of a financial instrument and, if necessary, on a quarterly basis, in line with the Group’s quarterly reports.

According to the Group’s policy, transfers among the several categories of valuation hierarchies are recognized when occurred, or when there are changes in the prevailing circumstances requiring the transfer.

Between December 31, 2014 and September 30, 2015, there have been no significant changes in business or economic circumstances affecting the fair value of the Group’s financial assets and liabilities (either measured at fair value or amortized cost).

In addition, no transfer has occurred among the different hierarchies used to determine the fair value of the Group’s financial instruments.

4.c. Fair value of financial assets and financial liabilities measured at amortized cost

The estimated fair value of loans, considering unadjusted listed prices (Level 1) for Negotiable Obligations and interest rates offered to the Group (Level 3) in connection with the remainder of loans, amounted to 76,655 and 53,108 as of September 30, 2015 and December 31, 2014, respectively.

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

 

    Other receivables

 

    Trade receivables

 

    Cash and equivalents

 

    Accounts payable

 

    Provisions

 

11


5. SEGMENT INFORMATION

There has been no change in the Group’s structure, its business segments or its financial reporting information criteria with respect to the Annual Consolidated Financial Statements.

 

     Exploration and
Production
    Downstream      Corporate
and Other
    Consolidation
Adjustments
(1)
    Total  

For the nine-month period ended September 30, 2015

           

Revenues from sales

     11,693        102,600         897        —          115,190   

Revenues from intersegment sales

     46,930        1,232         4,336        (52,498     —     
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

Revenues

     58,623        103,832         5,233        (52,498     115,190   
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

Operating income (loss)

     6,965        8,881         (1,478     1,310        15,678   

Gains (loss) on investments in companies

     (2     54         —          —          52   

Depreciation of fixed assets

     16,444        2,249         268        —          18,961   

Acquisitions of fixed assets

     35,368        6,257         1,180        —          42,805   

Assets

     159,104        80,497         18,683        (1,613     256,671   

For the nine-month period ended September 30, 2014

           

Revenues from sales

     6,357        97,316         530        —          104,203   

Revenues from intersegment sales

     44,604        1,080         3,712        (49,396     —     
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

Revenues

     50,961        98,396         4,242        (49,396     104,203   
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

Operating income (loss)

     10,781        9,238         (1,190     (451     18,378   

Gains (loss) on investments in companies

     (7     68         —          —          61   

Depreciation of fixed assets

     11,664        1,770         226        —          13,660   

Acquisitions of fixed assets(2)

     28,395        5,144         825        —          34,364   

For the year ended December 31, 2014

           

Assets

     126,228        68,509         16,356        (2,539     208,554   

 

(1) Correspond to the elimination of income between segments of the YPF group.
(2) Investments in fixed assets net of increases corresponding to YSUR Group in Argentina at acquisition date (see Note 13 of the Annual Consolidated Financial Statements), Puesto Hernández and Las Lajas joint operations and La Ventana agreement contracts at acquisition date of the additional interest (see Note 5 of the Annual Consolidated Financial Statements).

 

12


6. ANALYSIS OF THE MAIN ACCOUNTS OF THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

6.a) Intangible assets:

Changes in Group’s intangible assets for the nine-month period ended September 30, 2015 and comparative information are as follows:

 

     2015  
     Cost  

Main account

   At beginning of
year
     Increases     Translation
effect
     Decreases and
reclassifications
    At the end of
period
 

Service concessions

     5,707         443        601         (36     6,715   

Exploration rights

     1,975         68        185         (142     2,086   

Other intangibles

     2,607         75        279         (2     2,959   
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Total 2015

     10,289         586        1,065         (180     11,760   
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Total 2014

     6,597         3,425 (1)      1,993         (1,564 )(1)      10,451   
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

 

     2015      2014  
     Amortization                       

Main account

   At beginning of
year
     Increases      Translation
effect
     Decreases and
reclassifications
    At the end of
period
     Net book value
09-30
     Net book value
09-30
     Net book value
12-31
 

Service concessions

     3,475         125         363         (6     3,957         2,758         2,018         2,232   

Exploration rights

     150         —           2         —          152         1,934         2,557         1,825   

Other intangibles

     2,271         100         247         —          2,618         341         280         336   
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

    

 

 

 

Total 2015

     5,896         225         612         (6     6,727         5,033         
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

       

Total 2014

     4,151         250         1,232         (37     5,596            4,855         4,393   
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

       

 

 

    

 

 

 

 

(1) Includes 2,784 of acquisitions corresponding to YSUR Group in Argentina at the time of the takeover and 1,538 of disposal of assets for the transfer of areas to Pluspetrol S.A. See Note 13 to the Annual Consolidated Financial Statements.

6.b) Fixed assets:

 

     September 30,
2015
     December 31,
2014
 

Net book value of fixed assets

     194,394         157,243   

Provision for obsolescence of materials and equipment

     (347      (313
  

 

 

    

 

 

 
     194,047         156,930   
  

 

 

    

 

 

 

 

13


Changes in Group’s fixed assets for the nine-month period ended September 30, 2015 and comparative information are as follows:

 

     2015  
     Cost  

Main account

   At beginning of
year
     Increases     Translation
effect
     Decreases and
reclassifications
    At the end of
period
 

Land and buildings

     9,084         11        884         119        10,098   

Mineral property, wells and related equipment

     265,376         215        28,215         22,171        315,977   

Refinery equipment and petrochemical plants

     42,081         7        4,397         1,679        48,164   

Transportation equipment

     2,160         4        209         206        2,579   

Materials and equipment in warehouse

     8,241         6,136        883         (4,871     10,389   

Drilling and work in progress

     45,051         34,003        4,622         (22,333     61,343   

Exploratory drilling in progress(2)

     1,781         2,034        214         (1,532     2,497   

Furniture, fixtures and installations

     3,314         13        342         106        3,775   

Selling equipment

     5,520         —          645         1,298        7,463   

Infrastructure for natural gas distribution

     2,722         173        —           (4     2,891   

Electric power generation facilities

     1,567         1        —           (19     1,549   

Other property

     5,502         208        589         13        6,312   
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Total 2015

     392,399         42,805        41,000         (3,167     473,037   
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Total 2014

     258,603         40,912 (3)(5)      74,078         (2,837 )(4)      370,756   
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

 

     2015     2014  
     Depreciation                     

Main account

   At beginning of
year
     Increases      Translation effect      Decreases and
reclassifications
    At the end of
period
     Net book
value 09-30
    Net book
value 09-30
    Net book
value 12-31
 

Land and buildings

     3,779         154         366         (4     4,295         5,803        5,225        5,305   

Mineral property, wells and related equipment

     192,170         16,311         20,362         6        228,849         87,128 (1)      62,539 (1)      73,206 (1) 

Refinery equipment and petrochemical plants

     24,842         1,615         2,618         (12     29,063         19,101        16,126        17,239   

Transportation equipment

     1,455         156         144         (43     1,712         867        659        705   

Materials and equipment in warehouse

     —           2         —           —          2         10,387        7,760        8,241   

Drilling and work in progress

     —           —           —           —          —           61,343        45,040        45,051   

Exploratory drilling in progress(2)

     —           —           —           —          —           2,497        1,778        1,781   

Furniture, fixtures and installations

     2,817         182         285         —          3,284         491        532        497   

Selling equipment

     4,215         241         442         —          4,898         2,565        1,356        1,305   

Infrastructure for natural gas distribution

     1,116         53         —           (2     1,167         1,724        1,661        1,702   

Electric power generation facilities

     1,171         83         —           —          1,254         295        418        396   

Other property

     3,591         164         366         (2     4,119         2,193        1,757        1,815   
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

Total 2015

     235,156         18,961         24,583         (57     278,643         194,394       
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

     

Total 2014

     164,941         13,660         47,427         (123 )(4)      225,905           144,851        157,243   
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

      

 

 

   

 

 

 

 

(1) Includes 6,268, 4,338 and 6,343 of mineral property as of September 30, 2015 and September 30, and December 31, 2014, respectively.
(2) As of September 30, 2015, there are 55 exploratory wells in progress. During the nine-month periods then ended 36 wells have been started, 23 wells have been charged to exploration expenses and 13 wells have been transferred to properties with proven reserves in the Mineral property, wells and related equipment account.
(3) Includes 858 and 210 of acquisitions corresponding to the joint operations Puesto Hernández and Las Lajas, respectively, and 11 corresponding to the La Ventana agreement, on the date of acquisition of the additional equity interest.
(4) Includes a residual value of 32 charged against provisions for fixed assets for the nine-month period ended September 30, 2014.
(5) Includes 5,469 of acquisitions corresponding to YSUR Group in Argentina at the acquisition date. See Note 13 to the Annual Consolidated Financial Statements.

 

14


As described in Note 1.b.6 to the Annual Consolidated Financial Statements, the Group capitalizes the financial cost as a part of the cost of the assets. For the nine-month periods ended on September 30, 2015 and 2014 the rate of capitalization were 12.00% and 12.30%, respectively, and the capitalized amount were 702 and 412 respectively, for the periods above mentioned.

Set forth below is the evolution of the provision for obsolescence of materials and equipment for the nine-month periods ended on September 30, 2015 and 2014:

 

     For the nine-month period
ended September 30,
 
     2015      2014  

Amount at beginning of year

     313         166   

Increase charged to expenses

     2         1   

Decreases charged to income

     —           (4

Amounts incurred

     —           (32

Translation differences

     32         45   
  

 

 

    

 

 

 

Amount at end of period

     347         176   
  

 

 

    

 

 

 

6.c) Investments in companies:

 

     September 30,      December 31,  
     2015      2014  

Investments in companies (Notes 7 and 15)

     3,321         3,189   

Provision for reduction in value of holdings in companies

     (12      (12
  

 

 

    

 

 

 
     3,309         3,177   
  

 

 

    

 

 

 

6.d) Inventories:

 

     September 30,     December 31,  
     2015     2014  

Refined products

     8,554        7,720   

Crude oil and natural gas

     4,631        4,187   

Products in process

     116        99   

Construction works in progress for third parties

     59        271   

Raw materials and packaging materials

     1,071        724   
  

 

 

   

 

 

 
     14,431 (1)      13,001 (1) 
  

 

 

   

 

 

 

 

(1) As of September 30, 2015 and December 31, 2014, the fair value of the inventories does not differ, significantly, from their cost.

6.e) Other receivables:

 

     September 30, 2015      December 31, 2014  
     Noncurrent      Current      Noncurrent      Current  

Trade

     —           154         —           664   

Tax credit and export rebates

     136         3,061         130         1,066   

Trust contributions—Obra Sur

     34         18         56         22   

Loans to clients and balances with related parties(1)

     365         1,634         231         53   

Collateral deposits

     231         733         528         435   

Prepaid expenses

     46         488         39         451   

Advances and loans to employees

     7         273         7         299   

Advances to suppliers and custom agents(2)

     —           1,899         —           2,224   

Receivables with partners in Joint Operations and other agreements

     847         1,746         612         764   

Insurance receivables (Note 11.b)

     —           562         —           1,068   

Miscellaneous

     179         539         95         227   
  

 

 

    

 

 

    

 

 

    

 

 

 
     1,845         11,107         1,698         7,273   

Provision for other doubtful accounts

     (12      (105      (7      (103
  

 

 

    

 

 

    

 

 

    

 

 

 
     1,833         11,002         1,691         7,170   
  

 

 

    

 

 

    

 

 

    

 

 

 

 

(1) See Note 12 for additional information about related parties.
(2) Includes among others, advances to customs agents for the payment of taxes and import rights related to the imports of fuels and goods.

 

15


6.f) Trade receivables:

 

     September 30, 2015      December 31, 2014  
     Noncurrent      Current      Noncurrent      Current  

Accounts receivable and related parties(1)

     342         16,328         26         13,037   

Provision for doubtful trade receivables

     —           (734      (7      (866
  

 

 

    

 

 

    

 

 

    

 

 

 
     342         15,594         19         12,171   
  

 

 

    

 

 

    

 

 

    

 

 

 

 

(1) See Note 12 for additional information about related parties.

Changes in the provision for doubtful trade receivables

 

     For the nine-month period ended September 30,  
     2015      2014  
     Noncurrent      Current      Noncurrent      Current  

Amount at beginning of year

     7         866         6         652   

Increases charged to expenses

     —           267         —           140   

Decreases charged to income

     —           (384      —           (24

Amounts incurred

     (7      (17      —           —     

Translation differences

     —           2         2         51   
  

 

 

    

 

 

    

 

 

    

 

 

 

Amount at the end of period

     —           734         8         819   
  

 

 

    

 

 

    

 

 

    

 

 

 

6.g) Cash and cash equivalents:

 

     September 30,      December 31,  
     2015      2014  

Cash

     9,195         6,731   

Short-term investments

     1,091         1,492   

Financial assets at fair value through profit or loss

     571         1,535   
  

 

 

    

 

 

 
     10,857         9,758   
  

 

 

    

 

 

 

6.h) Provisions:

 

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

Amount as of December 31, 2014

     7,014        851        1,269        1,145        18,087        376        194        27   

Increases charged to expenses

     812        79        541        —          1,204        —          14        —     

Decreases charged to income

     (177     (91     —          —          —          —          —          —     

Amounts incurred due to payments/ utilization

     —          (357     —          (641     —          (203     —          (46

Translation differences

     467        63        90        36        1,900        37        20        4   

Reclassifications and other

     (630     422        (579     579        (232     198        (46     46   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Amount as of September 30, 2015

     7,486        967        1,321        1,119        20,959        408        182        31   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

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

Amount as of December 31, 2013

     5,020        159        764        926        13,220        289        168        22   

Increases charged to expenses

     910        9        630        —          992        2        8        —     

Decreases charged to income

     (160     (35     (4     —          —          —          —          —     

Increase from subsidiaries acquisition

     20        —          21        2        724        14        —          —     

Increase from joint operation interest acquisition

     —          —          —          —          339        153        —          —     

Amounts incurred due to payments/utilization

     —          (1,001     —          (425     —          (143     —          (11

Translation differences

     876        18        159        78        2,160        47        55        6   

Reclassifications and other

     (1,000     1,000        (458     458        (43     43        (11     11   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Amount as of September 30, 2014

     5,666        150        1,112        1,039        17,392        405        220        28   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

16


6.i) Income tax:

According to IAS 34, income tax expense is recognized in each interim period based on the best estimate of the effective income tax rate expected as of the year-end. Amounts calculated for income tax expense for the nine-month period ended September 30, 2015 may have to be adjusted in subsequent periods if, based on new judgment elements, the estimate of the effective expected income tax rate changes.

The reconciliation of pre-tax income included in the condensed interim consolidated statement of comprehensive income, at the statutory tax rate, to the income tax as disclosed in the condensed interim consolidated statements of comprehensive income for the nine-month periods ended September 30, 2015 and 2014, respectively, is as follows:

 

     For the nine-month period  
     ended September 30,  
     2015     2014  

Net income before income tax

     13,721        21,887   

Statutory tax rate

     35     35
  

 

 

   

 

 

 

Statutory tax rate applied to net income before income tax

     (4,802     (7,660

Effect of the valuation of fixed assets and intangible assets measured in functional currency

     (5,589     (10,573

Exchange differences

     3,480        5,396   

Effect of the valuation of inventories measured in functional currency

     (582     (1,203

Loss from investments in companies

     18        21   

Miscellaneous

     45        (319
  

 

 

   

 

 

 

Income tax expense

     (7,430     (14,338
  

 

 

   

 

 

 

The Group did not recognize deferred income tax assets amounting to 3,714 and 3,511 as of September 30, 2015 and December 31, 2014, respectively, from which 1,728 and 1,953 corresponds to taxable temporary differences not recoverable and 1,986 and 1,558 corresponds to tax loss carry forwards from a foreign subsidiary, since they do not meet the recognition criteria set forth under IFRS. From the tax loss carry forwards above mentioned, as of September 30, 2015, 444 will be due as from 2020, 1,516 from 2032 and 26 have an indefinite due date.

The composition of the Group’s deferred income tax assets and liabilities as of September 30, 2015 and December 31, 2014, is as follows:

 

     September 30,      December 31,  
     2015      2014  

Deferred tax assets

     

Nondeductible provisions and other liabilities

     2,109         2,479   

Tax loss carryforward and other tax credits

     170         222   

Miscellaneous

     44         17   
  

 

 

    

 

 

 

Total deferred tax assets

     2,323         2,718   
  

 

 

    

 

 

 

Deferred tax liabilities

     

Fixed assets

     (22,525      (19,250

Miscellaneous

     (3,129      (2,172
  

 

 

    

 

 

 

Total deferred tax liabilities

     (25,654      (21,422
  

 

 

    

 

 

 

Net deferred tax liability

     (23,331      (18,704
  

 

 

    

 

 

 

As of September 30, 2015 and December 31, 2014, 223 and 244, respectively, have been classified as deferred income tax assets and 23,554 and 18,948, respectively, as deferred income tax liabilities arising from the deferred income tax net balance of each individual company that take part in these Condensed Interim Consolidated Financial Statements.

As of September 30, 2015 and December 31, 2014, the causes that generated charges in “Other comprehensive income” did not generate temporary differences subject to income tax.

 

17


6.j) Loans:

 

               September 30, 2015      December 31, 2014  
    

Interest rate (1)

  

Maturity

   Noncurrent      Current      Noncurrent      Current  

Argentine Pesos:

                 

Negotiable obligations

   20.69-25.75 %    2015-2024      15,165         2,152         10,858         2,329   

Loans (3)

   15.00-25.63 %    2015-2018      823         923         847         637   

Account overdraft

   —      —        —           —           —           2,398   
        

 

 

    

 

 

    

 

 

    

 

 

 
           15,988         3,075         11,705         5,364   
        

 

 

    

 

 

    

 

 

    

 

 

 

Currencies other than the Argentine peso:

                 

Negotiable obligations (2)(4)

   1.29-10.00 %    2016-2028      40,188         4,647         22,472         1,257   

Exports pre-financing

   3.50-7.25 %    2015-2018      750         2,586         —           2,428   

Imports financing

   4.00-7.05 %    2015-2016      —           3,490         —           2,848   

Loans

   2.00-7.30 %    2015-2020      2,600         1,922         1,853         1,378   
        

 

 

    

 

 

    

 

 

    

 

 

 
           43,538         12,645         24,325         7,911   
        

 

 

    

 

 

    

 

 

    

 

 

 
           59,526         15,720         36,030         13,275   
        

 

 

    

 

 

    

 

 

    

 

 

 

 

(1) Annual interest rate as of September 30, 2015.
(2) Disclosed net of 267 and 252, corresponding to YPF’s outstanding Negotiable Obligations repurchased through open market transactions as of September 30, 2015 and December 31, 2014, respectively.
(3) Includes 763 corresponding to loans granted by Banco Nación Argentina, of which 263 accrue fixed interest rate of 15% until December 2015 and then accrue variable interest of BADLAR plus a spread of 4 percentage points and 500 accrue variable interest of BADLAR plus a spread of 4 percentage points with a maximum lending interest rate of the overall portfolio of Banco Nación. See additionally Note 12.
(4) Includes 7,193 and 7,129 as of September 30, 2015 and December 31, 2014, respectively, of face value negotiable obligations, to be cancelled in argentine pesos at the prevailing exchange rate according to terms of issued series.

The breakdown of the Group’s borrowings for the nine-month period ended September 30, 2015 and 2014 is as follows:

 

     For the nine-month periods ended  
     September 30,  
     2015      2014  

Amount at beginning of year

     49,305         31,890   

Proceeds from loans

     38,162         19,342   

Payments of loans

     (17,624      (9,012

Payments of interest

     (4,531      (3,215

Accrued interest

     5,611         4,601   

Exchange differences and translation, net

     4,323         5,512   
  

 

 

    

 

 

 

Amount at the end of period

     75,246         49,118   
  

 

 

    

 

 

 

On February 5, 2015 the General Shareholder’s Meeting of YPF approved an increase of the amount of the Global Medium—Term Notes (“M.T.N.”) Program of the Company for US$ 3,000 million, for a total maximum nominal outstanding amount at any time of the Program of US$ 8,000 million or its equivalent in other currencies.

 

18


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

 

                                             September 30, 2015      December 31, 2014  

Month

  

Year

   Face
value
    

Ref.

   Class   

Interest rate (3)

    Maturity      Noncurrent      Current      Noncurrent      Current  

YPF

                               

-

   1998    US$ 15       (1)(6)    —      Fixed      10.00     2028         61         6         62         2   

September

   2012    $ 1,200       (2)(4)(6)    Class VIII    —        —          —           —           —           —           809   

October and December

   2012    US$ 552       (2)(4)(5)(6)(9)    Class X    Fixed      6.25     2016         2,585         2,651         4,690         59   

November and December

   2012    $ 2,110       (2)(4)(6)(9)    Class XI    BADLAR plus 4.25%      24.76     2017         1,056         1,126         2,110         70   

December and March

   2012/3    $ 2,828       (2)(4)(6)(9)    Class XIII    BADLAR plus 4.75%      25.52     2018         2,828         22         2,828         23   

April

   2013    $ 2,250       (2)(4)(6)(9)    Class XVII    BADLAR plus 2.25%      22.68     2020         2,250         88         2,250         89   

April

   2013    US$ 59       (2)(5)(6)    Class XVIII    —        —          —           —           —           —           502   

April

   2013    US$ 89       (2)(5)(6)    Class XIX    Fixed      1.29     2017         834         2         757         2   

June

   2013    $ 1,265       (2)(4)(6)    Class XX    BADLAR plus 2.25%      23.01     2020         1,265         10         1,265         11   

July

   2013    US$ 92       (2)(5)(6)    Class XXII    Fixed      3.50     2020         454         117         515         107   

October

   2013    US$ 150       (2)(6)    Class XXIV    LIBOR plus 7.50%      7.77     2018         662         340         825         311   

October

   2013    $ 300       (2)(6)    Class XXV    —        —          —           —           —           —           314   

December and February

   2013/5    US$ 762       (2)    Class XXVI    Fixed      8.88     2018         7,041         177         4,899         16   

April and February

   2014/5    US$ 1,325       (2)    Class XXVIII    Fixed      8.75     2024         12,418         272         8,501         180   

March

   2014    $ 500       (2)(6)(9)    Class XXIX    BADLAR      20.69     2020         500         7         500         7   

March

   2014    $ 379       (2)(6)    Class XXX    BADLAR plus 3.50%      24.22     2015         —           384         —           384   

June

   2014    $ 201       (2)(6)    Class XXXI    —        —          —           —           —           —           205   

June

   2014    $ 465       (2)(6)    Class XXXII    BADLAR plus 3.20%      23.92     2016         —           314         155         316   

June

   2014    US$ 66       (2)(5)(6)    Class XXXIII    Fixed      2.00     2017         207         414         563         1   

September

   2014    $ 1,000       (2)(6)(9)    Class XXXIV    BADLAR plus 0.10%      20.83     2024         1,000         4         1,000         54   

September

   2014    $ 750       (2)(4)(6)    Class XXXV    BADLAR plus 3.50%      24.23     2019         750         3         750         47   

February

   2015    $ 950       (2)(9)    Class XXXVI    BADLAR plus 4.74%      25.37     2020         950         34         —           —     

February

   2015    $ 250       (7)(2)    Class XXXVII    BADLAR plus 3.49%      25.75     2017         250         9         —           —     

April

   2015    $ 935       (2)(4)    Class XXXVIII    BADLAR plus 4.75%      25.31     2020         935         113         —           —     

April

   2015    US$ 1,500       (2)    Class XXXIX    Fixed      8.50     2025         14,011         506         —           —     

July

   2015    $ 500       (2)    Class XL    BADLAR plus 3.49%      23.74     2017         500         25         —           —     

September

   2015    $ 1,900       (2)(9)    Class XLI    BADLAR      21.69     2020         1,900         8         —           —     

September

   2015    $ 981       (2)(4)    Class XLII    BADLAR plus 4.00%      25.69     2020         981         5         —           —     

Metrogas

                               

January

   2013    US$ 177          Series A-L    Fixed      8.88     2018         1,359         37         1,186         1   

January

   2013    US$ 18          Series A-U    Fixed      8.88     2018         131         4         120         —     

Gas Argentino

                               

March

   2013    US$ 57       (8)    Series A-L    Fixed      8.88     2016         417         121         347         76   

March

   2013    US$ 1       (8)    Series A-U    Fixed      8.88     2016         8         —           7         —     
                      

 

 

    

 

 

    

 

 

    

 

 

 
                         55,353         6,799         33,330         3,586   
                      

 

 

    

 

 

    

 

 

    

 

 

 

 

19


(1) Corresponds to the 1997 M.T.N. Program for US$1,000 million.
(2) Corresponds to the 2008 M.T.N. Program for US$ 8,000 million.
(3) Interest rate as of September 30, 2015.
(4) The ANSES and/or the Fondo Argentino de Hidrocarburos have participated in the primary subscription of these negotiable obligations, which may at the discretion of the respective holders, be subsequently traded in the securities market where these negotiable obligations are authorized to be traded
(5) The payment currency of these Negotiable Obligations is the Argentine Peso at the Exchange rate applicable under the terms of the series issued.
(6) As of the date of issuance of these financial statements, the Company has fully complied with the use of proceeds disclosed in the pricing supplements.
(7) Until the course of twelve months since the date of issuance and liquidation to a fixed nominal annual rate of 25.75%; and from the course of twelve months since the date of issuance and liquidation and until the date of maturity of the negotiable obligations to a variable nominal annual rate of BADLAR plus 3.49%.
(8) The expiration date of the original capital is December 2015, with the possibility of being extended to December 2016, if certain conditions are fulfilled (see Note 2.i to the Annual Consolidated Financial Statements).
(9) Negotiable Obligations classifying as productive investment , computable as such for purposes of subsection 35.8.1, paragraph K of General Regulations applicable to Insurance Activities issued by the Argentine Insurance Supervision Bureau.

6.k) Accounts payable:

 

     September 30, 2015      December 31, 2014  
     Noncurrent      Current      Noncurrent      Current  

Trade and related parties (1)

     124         30,034         66         28,522   

Investments in companies with negative shareholders’ equity

     —           2         —           2   

Extension of Concessions

     480         131         332         884   

Guarantee deposits

     7         451         —           418   

Miscellaneous

     110         335         168         580   
  

 

 

    

 

 

    

 

 

    

 

 

 
     721         30,953         566         30,406   
  

 

 

    

 

 

    

 

 

    

 

 

 

 

(1) For more information about related parties, see additionally Note 12.

6.l) Revenues:

 

     For the nine-month periods
ended September 30,
 
     2015      2014  

Sales (1)

     117,966         107,746   

Production incentive program (Note 11.c)

     1,153         —     

Revenues from construction contracts

     362         414   

Turnover tax

     (4,291      (3,957
  

 

 

    

 

 

 
     115,190         104,203   
  

 

 

    

 

 

 

 

(1) Includes 9,112 and 5,848 for the nine-month period ended on September 30, 2015 and 2014, respectively, associated with revenues related to the natural gas additional injection stimulus program created by Resolution 1/2013 of the Planning and Strategic Coordination Commission of the National Plan of Hydrocarbons Investment.

6.m) Cost of sales:

 

     For the nine-month
periods ended
 
     September 30,  
     2015      2014  

Inventories at beginning of year

     13,001         9,881   

Purchases for the period

     25,616         25,515   

Production costs

     61,380         49,116   

Translation effect

     1,190         2,657   

Inventories at end of period

     (14,431      (12,361
  

 

 

    

 

 

 

Cost of sales

     86,756         74,808   
  

 

 

    

 

 

 

 

20


6.n) Expenses:

 

     For the nine-months periods ended September 30,  
     2015     2014  
     Production      Administrative     Selling     Exploration               
     costs      expenses     expenses     expenses      Total     Total  

Salaries and social security taxes

     5,332         1,462        881        158         7,833        5,665   

Fees and compensation for services

     533         941 (2)      194        15         1,683        1,535   

Other personnel expenses

     1,678         200        85        31         1,994        1,406   

Taxes, charges and contributions

     1,109         176        2,265        —           3,550 (1)      4,262 (1) 

Royalties, easements and canons

     8,636         —          11        22         8,669        6,755   

Insurance

     652         31        45        —           728        540   

Rental of real estate and equipment

     2,354         21        290        1         2,666        2,139   

Survey expenses

     —           —          —          295         295        194   

Depreciation of fixed assets

     18,322         213        423        3         18,961        13,660   

Amortization of intangible assets

     128         82        15        —           225        250   

Industrial inputs, consumable materials and supplies

     2,726         23        62        1         2,812        2,466   

Operation services and other service contracts

     5,323         175        392        —           5,890        4,753   

Preservation, repair and maintenance

     9,343         176        257        13         9,789        8,087   

Unproductive exploratory drillings

     —           —          —          1,103         1,103        687   

Transportation, products and charges

     3,429         17        2,704        —           6,150        5,081   

Provision for doubtful trade receivables

     —           —          (110     —           (110     116   

Publicity and advertising expenses

     —           243        111        —           354        330   

Contractual commitments

     33         —          —          —           33        69   

Fuel, gas, energy and miscellaneous

     1,782         97        440        118         2,437        2,754   
  

 

 

    

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Total 2015

     61,380         3,857        8,065        1,760         75,062     
  

 

 

    

 

 

   

 

 

   

 

 

    

 

 

   

Total 2014

     49,116         3,116        7,287        1,230           60,749   
  

 

 

    

 

 

   

 

 

   

 

 

      

 

 

 

 

(1) Includes approximately 1,004 and 1,394 corresponding to hydrocarbon export withholdings for the nine-month periods ended September 30, 2015 and 2014, respectively.
(2) Includes 106 of YPF’s Directors and Statutory Auditor’s fees and remunerations for all concepts. On April 30, 2015, the General Ordinary and Extraordinary Shareholder’s meeting of YPF decided to ratify fees for the year 2014 for 123 and decided to approve as fees and remunerations for all concepts in advance for the year 2015 the sum of approximately 146.

The expense recognized in the condensed interim consolidated statements of comprehensive income related to research and development activities during the nine-month periods ended September 30, 2015 and 2014 amounted to 176 and 137, respectively.

 

21


6.o) Other operating results, net:

 

     For the nine-month periods ended
September 30,
 
     2015      2014  

Lawsuits

     (373      (276

Temporary economic assistance (1)

     562         —     

Sale of extension of “La Ventana” concession agreement

     —           359   

Construction incentive(2)

     505         221   

Miscellaneous

     232         312   
  

 

 

    

 

 

 
     926         616   
  

 

 

    

 

 

 

 

(1) Corresponds to the temporary economic assistance received by Metrogas S.A. ordered by the Argentine Energy Secretariat in Resolution No. 263/2015 for the nine-month period ended September 30, 2015 (see Note 11.c).
(2) Corresponds to the incentive to Argentine manufacturers of capital goods received by A-Evangelista S.A. under the provisions of Executive Order No. 379/2001 of the Argentine Ministry of Economy, for the nine-month period ended September 30, 2015.

7. INVESTMENTS IN COMPANIES AND JOINT OPERATIONS

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

The following table shows in aggregate, considering that none of the companies are individually material, the amount of investments in companies and joint ventures as of September 30, 2015 and December 31, 2014:

 

     September 30,      December 31,  
     2015      2014  

Amount of investments in affiliated companies

     977         757   

Amount of investments in joint ventures

     2,344         2,432   

Provision for reduction in value of holdings in companies

     (12      (12
  

 

 

    

 

 

 
     3,309         3,177   
  

 

 

    

 

 

 

Investments in companies with negative shareholders’ equity are disclosed in “Accounts payable”.

The main changes that affected the amount of the investments previously mentioned, during the nine-month periods ended on September 30, 2015 and 2014, are the following:

 

     For the nine-month periods  
     ended on September 30,  
     2015      2014  

Amount at the beginning of year

     3,177         2,124   

Acquisitions and contributions

     163         94   

Loss from investments in companies and joint ventures

     52         61   

Translation difference

     198         434   

Reclassification of investments in companies with negative shareholders’ equity

     —           132   

Distributed dividends

     (281      (293
  

 

 

    

 

 

 

Amount at the end of period

     3,309         2,552   
  

 

 

    

 

 

 

Note 15 provides information of investments in companies.

The following table shows the main magnitudes of net income (loss) from the Group’s investments in companies, calculated according to the equity method, for the nine-month periods ended on September 30, 2015 and 2014. YPF has made adjustments, where applicable, to the amounts reported by such companies in order to conform the accounting principles used by such companies to those used by the Group:

 

22


     Affiliated companies      Joint ventures  
     2015      2014      2015      2014  

Net income (loss)

     88         (148      (36      209   

Other comprehensive income

     9         17         189         417   
  

 

 

    

 

 

    

 

 

    

 

 

 

Comprehensive income for the period

     97         (131      153         626   
  

 

 

    

 

 

    

 

 

    

 

 

 

Additionally, the Group participates in Joint Operations which give to the Group a contractually-established percentage over the rights of the assets and obligations that emerge from the contracts. Interest in such Joint Operations have been consolidated line by line on the basis of the mentioned interest over the assets, liabilities, income and expenses related to each contract.

The assets and liabilities as of September 30, 2015 and December 31, 2014, and main magnitude of results for the nine-month periods ended on September 30, 2015 and 2014 of the Joint Operations and other agreements are detailed below:

 

     September 30,      December 31,  
     2015      2014  

Noncurrent assets

     31,249         22,439   

Current assets

     1,238         1,295   
  

 

 

    

 

 

 

Total assets

     32,487         23,734   
  

 

 

    

 

 

 

Noncurrent liabilities

     3,614         3,129   

Current liabilities

     4,769         4,609   
  

 

 

    

 

 

 

Total liabilities

     8,383         7,738   
  

 

 

    

 

 

 
     For the nine-month periods
ended September 30,
 
     2015      2014  

Production cost

     9,454         5,832   

Exploration expenses

     130         474   

8. SHAREHOLDERS’ EQUITY

On April 30, 2015, the General Ordinary and Extraordinary Shareholders’ meeting was held, which has approved the financial statements of YPF for the year ended December 31, 2014 and additionally decided the following in relation with the distribution of earnings of fiscal year ended as of December 31, 2014: (i) to appropriate the amount of 120 to a reserve for future acquisition of YPF shares under the “performance and bonus program” mentioned in the Director’s report of the Annual Consolidated Financial Statements as of December 31, 2014, giving to the Board of Directors the opportunity to acquire shares when it considers it convenient and to comply with the commitments assumed and to be assumed in relation with the mentioned program; (ii) to appropriate the amount of 8,410 to constitute a reserve for investment in accordance with the article 70, third paragraph of the Law No. 19,550 of Argentine Corporations as amended; and (iii) the appropriation to a reserve for future dividends in an amount of 503, empowering the Board of Directors to determine the opportunity of payment which should not exceed the end of the present fiscal year. On June 8, 2015, the Board of Directors of the Company resolved to pay a dividend of 1.28 pesos per share, for an amount of 503, which was available to shareholders on July 28, 2015.

9. EARNINGS PER SHARE

As of the date of issuance of these condensed interim consolidated financial statements, YPF has not issued equity instruments that give rise to potential ordinary shares (considering the Company’s intention of setting the share based benefit plans through treasury shares purchase), as a result, the calculation of diluted earnings per share coincides with the basic earnings per share.

 

23


The following table shows the net income and the number of shares that have been used for the calculation of the basic earnings per share:

 

     For the nine-month periods  
     ended on September 30,  
     2015      2014  

Net income

     6,274         7,619   

Average number of shares outstanding

     392,214,430         392,193,525   

Basic and diluted earnings per share

     16.00         19.43   

Basic and diluted earnings per share are calculated as shown in Note 1.b.14 to the annual consolidated financial statements as of December 31, 2014.

10. PROVISIONS FOR PENDING LAWSUITS, CLAIMS AND ENVIROMENTAL LIABILITES

Provisions for pending lawsuits, claims and environmental liabilities are described in Note 3 to the annual consolidated financial statements for the year ended December 31, 2014. As of September 30, 2015, the Group has accrued pending lawsuits, claims and contingencies which are probable and can be reasonably estimated, amounting to 8,453.

In relation to environmental obligations, and in addition to the hydrocarbon wells abandonment legal obligations for 21,367, as of September 30, 2015, the Group has accrued 2,440 corresponding to environmental remediation, which evaluations and/or remediation works are probable and can also be reasonably estimated, based on the Group’s existing remediation program.

Developments during the nine-month period ended September 30, 2015, concerning more significant pending lawsuits and contingencies are described below.

 

    With respect to arbritation with AES Uruguaiana Emprendimientos S.A. (“AESU”), on April 24, 2015, the Arbitration Tribunal resolved to resume the arbitration process and invited the parties to discuss the continuation of arbitration and to file with the Arbitration Tribunal a joint or separate proposal on steps to be followed. Such decision was notified by YPF to the Federal Court of Appeals hearing Administrative Litigation matters on April 27, 2015, since the precautionary measure suspending the arbitration process ordered by the latter is still in force. On June 22, 2015 the Arbitration Tribunal proposed to conduct the evidentiary hearings concerning damages stage on November 16 and 17, 2015.

With respect to the legal action filed by AESU in Uruguay, on July 16, 2015 the Administrative Claims Court No. 3 rejected one of the letters rogatory whereby AESU attempted to file a nullity action of the Arbitration Board’s resolution which provided for the stay of the arbitration proceeding. On September 4, 2015, AESU filed an appeal.

 

    Under the arbitration process filed by Nación Fideicomisos S.A. (“NAFISA”) against YPF demanding payment of the transportation charges to Uruguaiana, as evidenced in the transportation invoices claimed by TGN on September 29, 2015, the Supreme Court sustained YPF’s appeal and revoked the resolution of the Administrative Claims Court, Division IV, asserting that ENARGAS is not a competent authority to hear this matter, given that the parties are not subject to the Gas Law.

 

24


    In relation to the Passaic River litigation initiated by New Jersey Department of Environmental Protection (“DEP”) against YPF, YPF Holding Inc. and other subsidiaries on alleged contamination caused by dioxin and other hazardous substances from Newark plant and alleged contamination of lower Passaic River, on March 26, 2015, a new presiding judge was appointed for the case (Hon. Gary Furnari). On April 15, 2015, Occidental Chemical Corporation (“OCC”) served Maxus with an indemnity demand letter asserting that Maxus is obligated to indemnify OCC under the 1986 SPA with respect to the counter-claims asserted by Repsol against OCC, which seek to recover from OCC the US$ 65 million payment made by Repsol to New Jersey State under the settlement agreement. Maxus replied to OCC on April 28, 2015 reserving all arguments and defenses regarding the 1986 SPA’s indemnification provisions.

Furthermore, scheduled dates were changed by “Case Management Order XXVI” dated March 9, 2015 and the Case Management Order XXVII dated July 1, 2015 under which the new judge extended the deadline to complete all expert discovery until January 29, 2016, established a briefing schedule pursuant to which summary judgment will not be decide until late April or early May 2016, at the earliest, and included a provision that trial shall be scheduled in June 2016. Depositions of witnesses residing in the US and abroad began in December 2014 in accordance with the Case Management Order XXV. Since that time about forty witnesses have been deposed, including the corporate representatives of all the parties. The issues being explored include Track IV (the alter-ego and fraudulent transfers of assets) and Track III (indemnity claims filed by OCC against Maxus). Depositions of witnesses were completed in October 2015.

While Case Management Order XXVII provided that motions for summary judgment could be filed until March 4, 2016, the Special Master authorized the parties to file briefs specifying any issue in respect of which each party believed, that the court should authorize early summary judgment motions.

YPF has requested for and obtained an authorization to file a request regarding three issues: 1) dismissal of the portion of OCC’s claims for alter ego liability, based on the financing of YPF’s acquisition of Maxus shares in 1995; 2) dismissal of the portion of OCC’s liability claims based on the alleged “control” by YPF of Maxus Board of Directors decision, in 1996, to sell its subsidiaries in Bolivia and Venezuela to YPF International; and 3) dismissal of the portion of OCC’s claims for alter ego liability, based on the transfer of Maxus’ assets from 1995 through 1999.

OCC has requested for and obtained an authorization to file a motion against Maxus in relation to OCC’s claim to recover the amount of US$ 190 million paid to the State of New Jersey under the settlement agreement. In addition, OCC has also been authorized to file a request for a partial summary judgment dismissing the above mentioned cross complaints of Repsol.

Repsol has requested for and obtained authorization to file a motion against OCC to dismiss alter ego arguments, to the extent that OCC claim is based on prescribed claims for fraudulent transfers. Moreover, Repsol will seek the dismissal of the cross claims of OCC based on the following grounds: 1) OCC cannot prove that it has suffered damages due a failure to perform an agreement; and 2) OCC cannot prove that Repsol has caused any damage even if a non-performance occurred, because OCC has alleged that Maxus became insolvent before Repsol acquired YPF in 1999.

Finally, Maxus has requested for and obtained authorization to file a request for partial summary judgment against OCC to dismiss the claims for damages filed by OCC regarding costs not yet incurred by OCC.

 

25


Per the time schedule set by the Special Master, all parties filed their respective briefs in support of motions for early summary judgment on November 2, 2015. Opposition briefs must be filed on November 20 and replies to answers on November 27, 2015. Upon the Special Master’s decision, the parties may appeal such decision before Judge Furnari.

In addition, on October 23, YPF received a copy of the six reports produced by OCC under the expert’s evidence. Three of them are meant as evidence of the circumstances stated by OCC under Track III, and the other three are meant as defense of OCC position under Track IV.

OCC has requested for authorization to submit a motion to amend its second amendment to its complaint on September 25, 2015. OCC sought to add claims against YPF and Repsol regarding the alleged fraudulent transfers with its contractual right under the SPA. The Special Master authorized OCC to file the motion on October 13, 2015 and ordered the same time schedule applicable to motions for summary judgment.

 

    With respect to the second draft of the Focused Feasibility Study (“FFS”) the U.S. Environmental Protection Agency (“EPA”) made additional remarks to the “In-Eco” project Works Proposal in March 2015, which were answered by Tierra Solutions, Inc. (“TS”) during the second semester of 2015. In September 2015, a meeting was held between TS, its experts and the EPA, during which the final matters were decided upon and laboratory studies were estimated to commence in early 2016.

In October 2015, the U.S. Government Accountability Office (“GAO”) advised Maxus, Tierra and OCC that it had commenced a study on some “Superfund” sites affected with sediments, including the Lower Section of the Passaic River, at the request of the Committee of Environmental Matters and Public Works of the Senate of the United States. The GAO plans to talk to EPA project managers, representatives of the community and potentially responsible parties (“PRP”). With the information now available it is not possible to determine if GAO’s review will have any effect on the term for the rendering of the Record of Decision (“ROD”) related to the FFS.

 

    With regard to the Removal Action for the Mile 10.9 of the Passaic River, the Focused Feasibility Study (“FFS”) published on April 11, 2014 provided that Phase II of the removal action shall be implemented in a consistent manner with such FFS. On September 18, 2014, EPA requested that Tierra Solutions, Inc.

(“TS”) submit a work plan to conduct additional sampling of the Phase II area. Such sampling was completed in the first quarter of 2015, and it is anticipated that TS will submit the validated results to the US Environmental Protection Agency (“EPA”) during the fourth quarter of 2015.

 

    Regarding the lower 17 miles of the Passaic River, it is predicted that the Remedial Investigation / Feasibility Study (“RI/FS”) is expected to be completed in 2016 or later.

The CPG (“Cooperation Group Parties”) submitted a draft project of the above mentioned RI/FS during the first semester of 2015. Separate sections were submitted over a four month period from February to July 2015. Certain sections of the modeling works have not been submitted as of September 30, 2015. The CGP documents offers potential alternatives to the EPA FFS (which comprises the lower 8 miles of the Passaic River). The EPA may or may not consider this report, as they continue to address comments to the above mentioned FFS. As of the date of these condensed interim consolidated financial statements, the EPA has made no remarks.

 

    With regard to the complaint brought by Ruby Mhire and others against Maxus and other third parties, in June 2015, Maxus made one last installment payment in the amount of US$ 1 million, with which it has no further payment obligations. However, it still has to carry out the site remediation which is expected to be completed in December 2015. The agreed site remediation works commenced in the third quarter and are expected to be completed in early 2016.

 

26


11. CONTINGENT LIABILITIES, CONTINGENT ASSETS, CONTRACTUAL COMMITMENTS, MAIN REGULATIONS AND OTHERS

Contingent liabilities, contingent assets, contractual commitments, main regulations and others are described in Note 11 to the annual consolidated financial statements for the year ended December 31, 2014. Developments during the nine-month period ended September 30, 2015 concerning the above are detailed below.

 

  a) Contingent Liabilities

 

    Concerning court claims brought by the Asociación de Superficiarios de la Patagonia (“ASSUPA”) against concessionaires of the areas of the Northwest Basin, currently all terms to file answers have been stayed by reason of a request from the Company. In addition, Pan American Energy filed a motion to disqualify the judge hearing the case and therefore, court proceedings were referred to Federal Court No. 2 sitting in Salta for a decision thereon to be rendered.

 

    On November 2, the Company was given notice of the complaints filed by ASSUPA against concession holders of the areas of the Austral Basin. The Company requested the stay of the relevant term until the plaintiff produces all items of documentary evidence they intend to submit under the proceedings.

 

    On April 8, 2015 Petersen Energía Inversora, S.A.U and Petersen Energía, S.A.U. (jointly, “Petersen”), a former shareholder of YPF, filed a complaint against the Argentine Republic and YPF with the U.S. District Court for the Southern District of New York. The litigation is being conducted by the bankruptcy trustee of the aforesaid companies by reason of a liquidation process pending in a Commercial Court in Spain. The complaint contains claims related to the expropriation of the controlling interest of Repsol in YPF by the Argentine Republic in 2012, asserting that the obligation by the Argentine Republic to make a purchase offer to the remaining shareholders would have been triggered. Claims seem to be mainly grounded on allegations that the expropriation breached contract obligations contained in the initial public offering and bylaws of YPF and seeks unspecified compensation. The Company filed a motion to dismiss on September 8, 2015, the date which was set as a result of the extension of the term provided for by the Court.

Based on the available information related to the complaint, YPF believes that the claim against the Company lacks of legal merit and will strongly defend its interests. Finally, as of the date of these condensed interim consolidated financial statements, there exists no element in possession of the Company that may permit YPF quantify the possible impact of this claim over the Company.

 

    On September 18, 2015, Metrogas S.A. was made aware of petitions for bankruptcy, filed by Pan American Sur S.A., Pan American Fueguina S.A. and Pan American Energy LLC Sucursal Argentina, which are being heard by Argentine First Instance Court No. 26 in Commercial Matters, Division No. 51 of Buenos Aires City. As of the date of these condensed interim consolidated financial statements, Metrogas has not received any notice regarding said court files, despite of which it shall take all necessary action for an appropriate defense of its rights.

 

27


  b) Contingent Assets

 

    La Plata Refinery:

Regarding Coke A and Topping C units at YPF’s facilities in La Plata refinery, YPF has concluded the procedure to recover the damages regarding its loss against the insurance company.

The period under which compensation for the loss of profits was calculated, was extended until January 16, 2015 and the entire compensation for loss of profits was finally paid in June 2015 upon a final payment of US$ 185 million.

The total amount received for this loss amounted to US$ 615 million, of which US$ 227 million were related to property damage and US$ 388 million to loss of profits.

During the nine-month period ended on September 30, 2015, a gain of 523, was recorded in the statement of Comprehensive income, under the captions Revenues and Cost of sales, depending on the nature of the claimed concept.

 

    Cerro Divisadero:

Concerning the fire that affected the facilities of the Oil Treatment plant of Cerro Divisadero in Mendoza, the Company has selected a reconstruction project after analyzing several technological options and, as of the date of these condensed interim consolidated financial statements, an advance of US$ 60 million has been requested, which will be paid during November 2015, comprising both property damages and loss of production.

During the nine-month period ended on September 30, 2015, the Group has recorded a gain of 562 in the statement of comprehensive income under “Other operating results, net” and “Cost of sales”, based on the nature of the item claimed (property damage and loss of production respectively).

 

c) Contractual commitments, main regulations and others

 

    Agreements of project investments

 

    With respect to the Investment Agreement executed by and between the Company and subsidiaries of Chevron Corporation for joint exploitation of unconventional hydrocarbons in the province of Neuquén, in Loma Campana area, during the nine-month period ended September 30, 2015, the Company and Compañía de Hidrocarburo No Convencional S.R.L. (“CHNC”) have conducted operations, among which purchases of gas and crude oil by YPF for 2,511 can be mentioned. These operations are formalized based on general and regulatory market conditions. The net balance payable to CHNC as of September 30, 2015 amounts to 347.

 

   

As of June 30, 2015, the Company had received within the operation with Dow Europe Holding B.V. and PBB Polisur S.A. by reason of the joint exploitation of the first tranche of unconventional gas pilot project in the province of Neuquén for an amount of US$ 120 million, which was recorded under “Loans” in the condensed interim consolidated statement of financial position. Dow had 90 days from July 22, 2015 to decide whether or not to exercise the conversion option, whereby it would be assigned 50% of the equity interest in the area.

 

28


 

On October 22, 2015, both parties agreed on an Addendum which provides for, among other things, (i) A US$ 60 million increase in the amount to be disbursed by Dow, thus rising it to US$ 180 million, through a financial instrument convertible into a share in the project, for the same purposes and effects as the previous disbursements, i.e., the joint exploitation of a unconventional gas pilot project in the province of Neuquén, and (ii) the extension of the term within which Dow may exercise its conversion option, until December 18, 2015. On October 30, 2015, the Company received the committed additional amounts.

 

    Regarding the investment agreement between the Company and Petrolera Pampa SA (“Petrolera Pampa”) for the development of hydrocarbons of the Rincón del Mangrullo area (the “Area”) in the province of Neuquén, on May 26, 2015 a supplementary agreement (the “Amendment”) to the investment agreement dated November 6, 2013 was signed.

The Amendment establishes an equity interest of 50% of each of the parties in the entire production, costs and investments for the development of the Area with retroactive effect from January 1, 2015, excluding from the agreement only the formations of Vaca Muerta and Quintuco. Such investments include surface facilities in the area of US$ 150 million, which include the first expansion stage of the treatment facilities, bringing the current capacity of 2 to 4 million cubic meters per day to allow the conditioning and evacuation of future production from the block.

The Amendment also includes the expansion of the investment commitment of Petrolera Pampa in a third investment phase of US$ 22.5 million, for the drilling of additional wells targeting the Mulichinco Formation.

In addition, the Amendment includes an exploratory program for the Lajas Formation, under which Petrolera Pampa is committed to an investment of up to US$ 34 million and YPF up to US$ 6 million for the period 2015-2016. Subject to the results obtained in this period, Petrolera Pampa may choose to continue with a second investment phase in 2017 also for the Lajas Formation, with an additional investment commitment of US$ 34 million.

It should be noted that on July 14, 2015, the conditions required for that Amendment to entry in force were complied with.

As of September 30, 2015, for the first stage of Petrolera Pampa’s commitment, 17 wells were drilled and completed. The second phase provides for an investment of US$ 70 million to drill 15 wells.

 

    Concerning the Investment Project Agreement (the “Agreement”) entered into on December 10, 2014, by and between the Company and Petronas E&P Argentina S.A. (“PEPASA”), an affiliate of Petronas, for the joint development of a Shale oil pilot project in “La Amarga Chica” area in the province of Neuquen, the agreement provides for an exclusivity period to negotiate and execute a series of final contracts, which will become effective once a series of conditions are complied with.

It should be noted that on May 10, 2015, the conditions required for the entry into force of that Pilot Plan in 2015 were complied with.

As of September 30, two wells of the Pilot Plan were drilled. Upon completion of each annual phase of the Pilot Plan and payment of the relevant contributions, PEPASA shall have the option to abandon the plan, upon delivery of its interest in the concession and payment of accrued liabilities until its exit day (without access to 50% of the production value net of drilled wells until the exercise of its exit right).

 

29


Upon performance of all the commitments undertaken by the parties in the Pilot Plan stage, each of the parties shall pay for 50% of the work program for area development and shall contribute 50% of the budget under the Joint Operation Agreement.

 

    On July 16, 2015, the Province of Neuquén, pursuant to executive orders 1536/15 and 1541/15, approved the subdivision of the Bandurria block (465.5 km2) and awarded 100% of the area known as “Bandurria Norte” (107 km2) to Wintershall Energía S.A., 100% of the area known as “Bandurria Centro” (130 km2) to Pan American Energy LLC (Sucursal Argentina) and 100% of the area known as “Bandurria Sur” (228.5 km2) to YPF, awarding to YPF an Unconventional Hydrocarbons Exploitation Concession in Bandurria Sur area, for a 35-year term, with a commitment to develop a pilot plan to be completed in 3 years with a related investment of US$ 360 million.

 

    On July 10, 2015, the Province of Neuquén agreed to award to both partners, Pan American Energy LLC (Sucursal Argentina) and YPF, pro rata their interests (62.5% and 37.5%, respectively) in the “Lindero Atravesado” joint venture, the right to an Unconventional Hydrocarbons Exploitation Concession for a 35-year term, pursuant to the provisions of sections 27 bis, 35(b) and related sections of Act 17.319, as amended by Act 27.007. As a condition to the award of the above mentioned concession rights, concession holders have agreed to carry out an Unconventional Tight Gas Pilot program within 4 years, beginning on January 1, 2015, with an investment of US$ 590 million. On July 6, 2015, an agreement in this respect was approved by Executive Order 1540/15 of the Neuquén Province.

 

    Liquid hydrocarbons regulatory requirements

Dated February 3, 2015, the Argentine Republic Official Gazette published the text of Resolution No. 14/2015 passed by the Commission for Planning and Coordination of the Strategy for the National Plan of Investment in Hydrocarbons that created the Crude Oil Production Promotion Program for 2015 under which beneficiary companies are awarded an economic compensation, payable in pesos, for an amount equivalent to up to three U.S. dollars per barrel for the total production of each beneficiary company, provided that its quarterly production of crude oil is higher or equal to the production taken as basis for such program. Basis production is defined as the total production of crude oil by beneficiary companies corresponding to the fourth quarter of 2014, expressed in barrels per day. The beneficiary companies that have met the demands of all refineries authorized to operate in the country and direct part of their production to the foreign market may receive an additional economic compensation of two or three U.S. dollars for each barrel of exported crude oil, depending on the level of exported volume achieved.

Pursuant to Executive Order No. 1330/15 of July 6, 2015, the Government resolved to render ineffective the “Petróleo Plus” program, which had been created by Executive Order No. 2,014 of November 25, 2008.

 

    Natural gas regulatory requirements

Resolution No. 123/2015 was published in the Official Gazette on July 15, 2015 which approved the Regulations governing procurement, sales and transfers of areas, assignments of rights and equity interests under the approved programs.

On September 29, 2015, Resolution 185/2015 was published in the Official Gazette regulating an incentive program for natural gas injection for the benefit of corporate producers which do not have a previous record of natural gas injection. The beneficiary companies will receive a compensation resulting from the difference between US$ 7.50 US$/MMBtu and the price received for the sale of the natural gas in the market. Such compensation shall be received only for natural gas originating in areas whose production rights shall have been acquired from companies registered with any of the two previous programs and provided that during the period in which the transferor shall have calculated its “base injection”, according to its programme, the injection of the area operated by the current beneficiary – transferee– shall have been null.

In relation with the creation of the Trust Fund to finance natural gas imports to be injected into the domestic gas network, on October 27, 2015 the Supreme Court issued judgment on the action for protection of constitutional rights filed by Mega S.A. (for a period running until the enactment of the budget act for

 

30


fiscal year 2013 No. 26,784) and held that the charge imposed by “Executive Order 2067/08” was unconstitutional and not applicable to Mega S.A.

 

    Main rules applicable to the activities of Metrogas:

Resolution SE No. 263/2015 was published in the Official Gazette on June 8, 2015 whereby the Energy Secretariat approved an expenditure as temporary economic assistance payable in ten consecutive installments to Metrogas and the rest of the natural gas distributors effective from March 2015, in order to cover the costs and investments associated with the normal operation of the provision of the public service of natural gas distribution networks and on account of the Comprehensive Tariff Review to be carried out in due course.

This Resolution provides that beneficiaries must allocate part of the funds received from each of the monthly installments to cancel overdue debts as of December 31, 2014 to natural gas companies and also that, distributors may not accumulate more debts for natural gas purchases as from the entry into force of such Resolution.

In the case of Metrogas, ENARGAS established an exceptional need for funds to be disbursed by 2015 according to a monthly schedule from March to December. Moreover, it established that Metrogas must allocate part of the temporary economic assistance to the payment of debts to producers due as of December 31, 2014 in 36 monthly equal and consecutive installments, plus interest, from the month of January 2015, calculated by using the current “ Average Lending Rate published by Banco Nación for Commercial Discount Transactions” (2.05% per month), the first installment to be paid as from March 2015.

Additionally, ENARGAS considered that distributors will pay all gas purchase invoices falling due in 2015, providing for the cancellation thereof within 30, 60 and 90 days consistent with the collection of invoice payments from their customers.

As of the date of the issuance of this interim condensed consolidated financial statements, Metrogas has received three of the ten installments on account of temporary financial assistance. In addition, it has entered into payment agreements with most producers under the provisions of Energy Secretariat Resolution No. 263/2015, subject to the availability of the amounts committed.

 

    Regulatory framework for the electricity industry in the Argentine Republic:

Resolution SE No. 482/2015: this resolution defines certain adjustments to the remuneration scheme contemplated in Resolution SE No. 529/2014, increasing the tariff schedule of the five remunerative items established therein. It also incorporates a new specific contribution scheme called “Investment Resources of FONINVEMEM 2015-2018” to be allocated to those participants generating investment projects already approved or to be approved by the Energy Secretariat and establishes a new system of incentives to Energy Production and Operational Efficiency for the involved power generation agents. The provisions set forth in this resolution are to be retroactively applied as from the financial transactions corresponding to the month of February 2015 for those power generation agents that have adhered to Resolution No. 95/2013.

 

31


    New Argentine Civil and Commercial Code

On August 1, 2015 the new Argentine Civil and Commercial Code became in full force and effect. This new code, while unifying the Civil Code with the Commercial Code, introduces many new features and modifications to the rules governing issues like Capacity, Obligations, Contracts, and Pre-contractual and Contractual Civil Liability, Ownership, Co-ownership, Commercial Companies and Statute of Limitations, among others.

12. BALANCES AND TRANSACTIONS WITH RELATED PARTIES

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

The information detailed in the tables below shows the balances with joint ventures and affiliated companies as of September 30, 2015 and December 31, 2014 and transactions with the mentioned parties for the nine-month period ended September 30, 2015 and 2014.

 

     September 30, 2015      December 31, 2014  
     Other      Trade      Accounts      Other      Trade      Accounts  
     receivables      receivables      payable      receivables      receivables      payable  
     Current      Current      Current      Current      Current      Current  

Joint ventures:

                 

Profertil S.A.

     102         104         63         3         56         16   

Compañía Mega S.A.

     6         245         277         7         528         40   

Refinería del Norte S.A.

     —           240         23         —           145         11   

Bizoy S.A.

     3         —           —           —           4         —     
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
     111         589         363         10         733         67   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Affiliated companies:

                 

Central Dock Sud S.A.

     —           57         —           —           89         —     

YPF Gas S.A. (1)

     30         101         41         —           —           —     

Oleoductos del Valle S.A.

     —           —           41         —           —           33   

Terminales Marítimas Patagónicas S.A.

     —           —           22         —           —           28   

Oleoducto Trasandino (Argentina) S.A.

     —           —           3         —           —           2   

Gasoducto del Pacífico (Argentina) S.A.

     4         —           24         6         —           7   

Oiltanking Ebytem S.A.

     —           —           27         —           —           25   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
     34         158         158         6         89         95   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
     145         747         521         16         822         162   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
     For the nine-month period ended on September 30,  
     2015      2014  
     Revenues      Purchases
and services
     Interest
gain(loss), net
     Revenues      Purchases
and services
     Interest gain
(loss), net
 

Joint ventures:

                 

Profertil S.A.

     602         219         —           230         275         —     

Compañía Mega S.A.

     1,008         363         —           1,800         130         —     

Refinería del Norte S.A.

     598         129         —           664         51         —     

Bizoy S.A.

     —           —           —           13         —           —     
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
     2,208         711         —           2,707         456         —     
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Affiliated companies:

                 

Central Dock Sud S.A.

     210         —           7         183         —           6   

Oleoductos del Valle S.A.

     —           152         —           —           —           —     

YPF Gas S.A.(1)

     146         27         —           —           135         —     

Terminales Marítimas Patagónicas S.A.

     —           149         —           1         140         —     

Oleoducto Trasandino (Argentina) S.A.

     —           15         —           —           13         —     

Gasoducto del Pacífico (Argentina) S.A.

     —           81         —           —           62         —     

Oiltanking Ebytem S.A.

     —           135         —           —           106         —     
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
     356         559         7         184         456         6   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
     2,564         1,270         7         2,891         912         6   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

(1) Disclosed balances and transactions since the date of the acquisition of associates.

 

32


Additionally, in the normal course of business, and taking into consideration that YPF is the main oil and gas company in Argentina, its client/suppliers’ portfolio encompasses both private sector entities as well as national, provincial and municipal public sector entities. As required by IAS 24 “Related party disclosures”, among the major transactions above mentioned the most important are:

 

    CAMMESA: the provision of fuel oil, which is destined to thermal power plants, and the purchases of energy (the operations of sale and purchase for the nine-month period ended on September 30, 2015 amounted to 7,836 and 1,098, respectively, and on September 30, 2014 amounted to 5,372 and 918, respectively, while the net balance as of September 30, 2015 and December 31, 2014 was a trade receivable of 581 and 1,010, respectively);

 

    ENARSA: rendering of regasification service in the regasification projects of GNL in Escobar and Bahía Blanca and the purchase of natural gas, imported by ENARSA and crude oil (the operations for the nine-month period ended on September 30, 2015, amounted to 1,270 and 708, respectively, and on September 30, 2014 amounted to 1,150 and 414, respectively, while the net balance as of September 30, 2015 and December 31, 2014 was a trade receivable of 50 and 192, respectively);

 

    Aerolíneas Argentinas S.A. and Austral Líneas Aéreas Cielos del Sur S.A.: the provision of jet fuel (the operations for the nine-month periods ended on September 30, 2015 and 2014, amounted to 1,635 and 1,945, respectively, while the net balance as of September 30, 2015 and December 31, 2014 was a trade receivable of 255 and 183, respectively);

 

    Department of Federal Planning Investment and Services: the benefits of the incentive scheme for the Additional Injection of natural gas, among others, (the operations for the nine-month periods ended on September 30, 2015 and 2014, amounted to 9,112 and 5,848, respectively, while the net balance as of September 30, 2015 and December 31, 2014 was a trade receivable of 6,567 and 3,390, respectively) and for the crude oil production incentive program (the operations for the nine-month periods ended on September 30, 2015 amounted to 1,153, all of them outstanding as of the closing date of this period);

 

    Argentine Secretariat of Domestic Commerce: the compensation for providing gas oil to public transport of passengers at a differential price (the operations for the nine-month periods ended on September 30, 2015 and 2014, amounted to 2,686 and 2,641, respectively, while the net balance as of September 30, 2015 and December 31, 2014 was a trade receivable of 313 and 244, respectively);

 

    Energy Secretariat: temporary economic assistance to Metrogas (the operations for the nine-month period ended on September 30, 2015 amounted to 562, while the net balance as of September 30 was a trade receivable of 306);

 

    Industry Secretariat: incentive for domestic manufacturing of capital goods, for the benefit of A-Evangelista S.A. (the operations for the nine-month periods ended on September 30, 2015 and 2014, amounted to 505 and 221 respectively, while the net balance as of September 30, 2015 and December 31, 2014 was a trade receivable of 126 and 15, respectively).

Such transactions are generally based on medium-term agreements and are provided according to general market or regulatory conditions, as applicable.

Additionally, the Group has entered into certain financing and insurance transactions with entities related to the national public sector, as defined in IAS 24. Such transactions consist of certain financial transactions that are described in Note 6.j) of these condensed interim financial statements, and transactions with Nación Seguros S.A. related to certain insurance policies contracts, and in connection therewith, to the reimbursement from the insurance coverage for the incident mentioned in Note 11.b.

 

33


Furthermore, in relation to the investment agreement signed between YPF and Chevron subsidiaries, YPF has an indirect non-controlling interest in CHNC with which YPF carries out transactions in connection with the above mentioned investment agreement (for further detail see Note 11.c to the Annual Consolidated Financial Statements).

The table below discloses the compensation for the Company’s key management personnel, including members of the Board of Directors and vice presidents (managers with executive functions appointed by the Board of Directors), for the nine-month periods ended September 30, 2015 and 2014:

 

     2015(1)      2014(1)  

Short-term employee benefits

     131         99   

Share-based benefits

     38         33   

Post-retirement benefits

     4         3   
  

 

 

    

 

 

 
     173         135   
  

 

 

    

 

 

 

 

(1) Includes the compensation for YPF’s key management personnel which developed their functions during the mentioned periods.

13. EMPLOYEE BENEFIT PLANS AND OTHER OBLIGATIONS

Note 1.b.10 to the Annual Consolidated Financial Statements describes the main characteristics and accounting treatment for benefit plans implemented by the Group. The charges recognized during the nine-month period ended on September 30, 2015 and 2014 are as follows:

i. Retirement plan:

The total charges recognized under the Retirement Plan amounted to approximately 43 and 43 for the nine-month periods ended on September 30, 2015 and 2014, respectively.

ii. Performance Bonus Programs:

The amount charged to expense related to the Performance Bonus Programs was 735 and 589 for the nine-month periods ended on September 30, 2015 and 2014, respectively.

iii. Share-based benefit plan:

The amounts recognized in net income in relation with the Share-based Plans, which are disclosed according to their nature, amounted to 89 and 56 for the nine-month periods ended on September 30, 2015 and 2014, respectively.

The Board of Directors, at the meeting held on June 8, 2015 resolved to approve the creation of a new long-term compensation program based on the granting of shares that will be valid for three years from July 1, 2015 (granting date), with similar characteristics to the one implemented in 2014. The market value of the share at the time of the approved effective assignment is US$ 19.31.

During the nine-month periods ended September 30, 2015 and 2014, the Company has repurchased 382,985 and 617,527 treasury shares for an amount of 119 and 198, respectively, in order to comply with the share-based plans described in Note 1.b.10.iii) to the Annual Consolidated Financial Statements. The cost of such repurchases is reflected in the shareholders’ equity under the name of “Treasury shares acquisition cost”, while the face value and the adjustment resulting from the monetary restatement carried out in accordance with the Previous Accounting Principles have been reclassified from the accounts “Subscribed Capital” and “Capital Adjustment” to the accounts “Treasury shares” and “Treasury shares comprehensive adjustment” respectively.

 

34


14. INFORMATION REQUIRED BY REGULATORY AUTHORITIES

 

a) CNV General Resolution No. 622

 

  i. Pursuant to section 1, Chapter III, Title IV of such resolution, there follows a detail of the notes to the condensed interim consolidated financial statements containing information required under the Resolution in the form of exhibits.

 

Exhibit A – Fixed Assets    Note 6.b) Fixed Assets
Exhibit B – Intangible assets    Note 6.a) Intangible assets
Exhibit C – Investments in companies    Note 15 Investments in companies
Exhibit D – Other investments    N/A
Exhibit E – Provisions    Note 6.f) Trade receivables
   Note 6.e) Other receivables
   Note 6.c) Investments in companies
   Note 6.b) Fixed Assets
   Note 6.h) Provisions
Exhibit F – Cost of goods sold and services rendered    Note 6.m) Cost of sales
Exhibit G – Assets and liabilities in foreign currency    Note 16 Assets and liabilities in currencies other than the Argentine peso

 

  ii. On March 18, 2015, the Company was registered with the CNV under the category “Settlement and Clearing Agent and Trading Agent—Own account”, record No. 549. Considering the Company’s business, and the CNV Rules and its Interpretative Criterion No. 55, the Company shall not, under any circumstance, offer brokerage services to third parties for transactions in markets under the jurisdiction of the CNV and also it shall not open operating accounts to third parties to issue orders and trade in markets under the jurisdiction of the CNV.

Besides, in accordance with the provisions of Section VI, Chapter II, Title VII of the CNV Rules and its Interpretative Criterion No. 55, the Company’s equity exceeds the minimum required equity under such rules, which is 15, while the minimum required counterparty capital, which is 3, is comprised of 11,618,762 units of the mutual fund known as Fondo Común de Inversión Compass Ahorro—Clase B, with settlement upon redemption in 24 hours; the Company’s units total value as of September 30, 2015 amounted to 18.

 

b) CNV General Resolution No. 629

Due to General Resolution No. 629 of the CNV, the Company informs that supporting documentation of YPF’s operations, which is not in YPF’s headquarters, is stored in the following companies:

 

    Adea S.A. located in Barn 3 – Route 36, Km. 31.5 – Florencio Varela – Province of Buenos Aires.

 

    File S.R.L., located in Panamericana and R.S. Peña – Blanco Escalada – Luján de Cuyo –Province of Mendoza.

 

35


15. INVESTMENTS IN COMPANIES

 

                     

Information of the issuer

 
    Description of the Securities             Last Financial Statements Available        

Name and Issuer

  Class     Face Value     Amount    

Main Business

 

Registered Address

  Date   Capital
Stock
    Income
(Loss)
    Equity     Holding in
Capital Stock
 

Controlled companies: (9)

                   

YPF International S.A.(7)

    Common      Bs. 100        66,897      Investment   La Plata 19 Street, Santa Cruz de la Sierra, República de Bolivia   30-09-15     15        1        15        100.00

YPF Holdings Inc.(7)

    Common      US$ 0.01        810,614      Investment and finance   10333 Richmond Avenue I, Suite 1050, TX, U.S.A.   30-09-15     7,596        (354     (2,587     100.00

Operadora de Estaciones de Servicios S.A.

    Common      $ 1        163,701,747      Commercial management of YPF’s gas stations   Macacha Güemes 515, Buenos Aires, Argentina   30-09-15     164        260        457        99.99

A-Evangelista S.A.

    Common      $ 1        307,095,088      Engineering and construction services   Macacha Güemes 515, Buenos Aires, Argentina   30-09-15     307        204        730        100.00

YPF Servicios Petroleros S.A.

    Common      $ 1        50,000      Wells perforation and/or reparation services   Macacha Güemes 515, Buenos Aires, Argentina   31-12-14     —   (8)      (14     13        100.00

YPF Inversora Energética S.A.

    Common      $ 1        67,608,000      Investment   Macacha Güemes 515, Buenos Aires, Argentina   30-06-15     76        (133     (725     100.00

YPF Energía Eléctrica

    Common      $ 1        30,006,540      Exploration, development, industrialization and marketing of hydrocarbons, and generation, transportation and marketing of electric power   Macacha Güemes 515, Buenos Aires, Argentina   30-09-15     30        273        826        100.00

YPF Chile S.A.(10)

    Common        —          50,968,649      Lubricants and aviation fuels trading and hydrocarbons research and exploration   Villarica 322; Módulo B1, Qilicura, Santiago   30-09-15     428        (23     809        100.00

YPF Tecnología S.A.

    Common      $ 1        234,291,000      Investigation, development, production and commercialization of technologies, knowledge, goods and services.   Macacha Güemes 515, Buenos Aires, Argentina   30-09-15     459        64        603        51.00

YPF Europe B.V.(7)

    Common      US$ 0.01        15,660,437,309      Investment and finance   Prins Bernardplein 200, 1097 JB, Amsterdam, Holanda   30-09-15     1,468        64        1,629        100.00

YSUR Argentina Investment S.A.R.L.(7)

    Common      US$ 1        20,001      Investment   13-15, Avenue de la Lierté, L-1931, Luxemburgo   30-09-15     —   (8)      —   (8)      3,204        100.00

YSUR Argentina Corporation(7)

    Common      US$ 1        10,000,001      Investment   Boundary Hall, Cricket Square P.O. Box 1111 George Town, Grand Cayman, Cayman Islands KY1-1102   30-09-15     94        —   (8)      278        100.00

YSUR Petrolera
Argentina S.A.(7)

    Common      $ 1        634,284,566      Exploration, extraction, exploitation, storage, transportation, industrialization and marketing of hydrocarbons, as well as other operations related thereto.   Tucumán 1, P. 12, Buenos Aires, Argentina   30-09-15     634        —          365        100.00

 

36


    30-09-2015     31-12-2014  
                                 

Information of the issuer

       
    Description of the Securities                         Last Financial Statements Available              

Name and Issuer

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

Main Business

 

Registered Address

  Date   Capital
Stock
    Income
(Loss)
    Equity     Holding in
Capital Stock
    Book Value(3)  

Joint Ventures:

                         

Compañía Mega S.A.(6) (7)

    Common      $ 1        244,246,140        954        —        Separation, fractionation and transportation of natural gas liquids  

San Martín 344, P. 10º, Buenos

Aires, Argentina

  30-06-15     643        305        1,365        38.00     778   

Profertil S.A.(7)

    Common      $ 1        391,291,320        1,007        —        Production and marketing of fertilizers   Alicia Moreau de Justo 740, P. 3, Buenos Aires, Argentina   30-06-15     783        (17     941        50.00     1,231   

Refinería del Norte S.A.

    Common      $ 1        45,803,655        381        —        Refining   Maipú 1, P. 2º, Buenos Aires, Argentina   30-06-15     92        (71     797        50.00     423   
       

 

 

   

 

 

                 

 

 

 
          2,342        —                        2,432   
       

 

 

   

 

 

                 

 

 

 

Affiliated Companies:

                         

Oleoductos del Valle S.A.

    Common      $ 10        4,072,749        120 (1)      —        Oil transportation by pipeline   Florida 1, P. 10º, Buenos Aires, Argentina   30-09-15     110        34        330        37.00     99 (1) 

Terminales Marítimas Patagónicas S.A.

    Common      $ 10        476,034        70        —        Oil storage and shipment   Av. Leandro N. Alem 1180, P. 11º, Buenos Aires, Argentina   30-06-15     14        5        218        33.15     71   

Oiltanking Ebytem S.A.

    Common      $ 10        351,167        100        —        Hydrocarbon transportation and storage   Terminal Marítima Puerto Rosales – Provincia de Buenos Aires, Argentina.   30-09-15     12        83        118        30.00     88   

Gasoducto del Pacífico (Argentina) S.A.

    Preferred      $ 1        15,579,578        21        —        Gas transportation by pipeline   San Martín 323, P.13°, Buenos Aires, Argentina   31-12-14     156        60        232        10.00     14   

Central Dock Sud S.A.

    Common      $ 0.01        11,869,095,145        100        136      Electric power generation and bulk marketing   Pasaje Ingeniero Butty 220, P.16°, Buenos Aires, Argentina   30-06-15     1,231        (27     1,119        10.25 %(5)      110   

Inversora Dock Sud S.A.

    Common      $ 1        355,270,303        329        445      Investment and finance   Pasaje Ingeniero Butty 220, P.16°, Buenos Aires, Argentina   30-06-15     829        (18     819        42.86     336   

Oleoducto Trasandino (Argentina) S.A.

    Preferred      $ 1        12,135,167        24        —        Oil transportation by pipeline   Macacha Güemes 515, P.3º, Buenos Aires, Argentina   30-06-15     34        4        66        36.00     22   

Other companies:

                         

Other(4)

    —          —          —          215        135      —     —     —       —          —          —          —          17   
       

 

 

   

 

 

                 

 

 

 
          979        716                      757   
       

 

 

   

 

 

                 

 

 

 
          3,321        716                      3,189   
       

 

 

   

 

 

                 

 

 

 

 

(1) Holding in shareholders’ equity, net of intercompany profits.
(2) Cost net of cash dividends and stock reduction.
(3) Holding in shareholders’ equity plus adjustments to conform to YPF accounting methods.
(4) Includes Gasoducto del Pacífico (Cayman) Ltd., A&C Pipeline Holding Company, Poligás Luján S.A.C.I.,Oleoducto Transandino (Chile) S.A., Bizoy S.A., Civeny S.A., Bioceres S.A. and YPF Gas S.A.
(5) Additionally, the Company has a 29.99% indirect holding in capital stock through Inversora Dock Sud S.A.
(6) As stipulated by shareholders’ agreement, joint control is held in this company by shareholders.
(7) The U.S. dollar has been defined as the functional currency of this company.
(8) No value is disclosed as the carrying value is less than 1.
(9) Additionally consolidated Compañía Minera de Argentina S.A, YPF Services USA Corp., YPF Perú SAC., YPF Brasil Comercio Derivado de Petróleo Ltd., Wokler Investment S.A., YPF Colombia S.A., Miwen S.A., Eleran Inversiones 2011 S.A.U., Lestery S.A., YSUR Argentina Holdings S.à.r.l., Compañía de Inversiones Mineras S.A. and Energía Andina S.A.
(10) The Chilean peso has been defined as the functional currency of this Company.

 

37


16. ASSETS AND LIABILITIES IN CURRENCIES OTHER THAN THE ARGENTINE PESO

 

     September 30, 2015      December 31, 2014  
     Amount in
currencies other
than the
Argentine peso
     Exchange
rate (1)
     Total      Amount in
currencies other
than the
Argentine peso
     Exchange
rate (1)
     Total  

Noncurrent Assets

                 

Other receivables

                 

US Dollar

     40         9.32         373         73         8.45         617   

Real

     10         2.34         23         6         3.20         19   

Trade receivables

                 

Real

     —           —           —           5         3.20         16   
        

 

 

          

 

 

 

Total noncurrent assets

           396               652   
        

 

 

          

 

 

 

Current Assets

                 

Trade receivables

                 

US Dollar

     331         9.32         3,085         341         8.45         2,881   

Chilean peso

     14,079         0.01         141         11,043         0.01         110   

Real

     26         2.34         61         24         3.20         77   

Other receivables

                 

US Dollar

     383         9.32         3,570         473         8.45         3,997   

Euro

     5         10.40         52         3         10.26         31   

Real

     7         2.34         16         3         3.20         10   

Chilean peso

     128         0.01         1         4,344         0.01         43   

Yens

     142         0.08         11         —           —           —     

Cash and equivalents

                 

US Dollar

     889         9.32         8,285         647         8.45         5,467   

Chilean peso

     1,161         0.01         12         —           —           —     

Real

     1         2.34         2         —           —           —     
        

 

 

          

 

 

 

Total current assets

           15,236               12,616   
        

 

 

          

 

 

 

Total assets

           15,632               13,268   
        

 

 

          

 

 

 

Noncurrent Liabilities

                 

Provisions

                 

US Dollar

     2,873         9.42         27,064         2,785         8.55         23,812   

Loans

                 

US Dollar

     4,622         9.42         43,538         2,845         8.55         24,325   

Accounts payable

                 

US Dollar

     62         9.42         584         55         8.55         470   
        

 

 

          

 

 

 

Total noncurrent liabilities

           71,186               48,607   
        

 

 

          

 

 

 

Current Liabilities

                 

Provisions

                 

US Dollar

     180         9.42         1,696         177         8.55         1,513   

Loans

                 

US Dollar

     1,336         9.42         12,584         919         8.55         7,860   

Real

     26         2.38         61         16         3.20         51   

Salaries and social security

                 

US Dollar

     6         9.42         57         3         8.55         26   

Real

     2         2.38         5         2         3.20         6   

Chilean peso

     401         0.01         4         —           —           —     

Accounts payable

                 

US Dollar

     1,712         9.42         16,127         2,015         8.55         17,228   

Euro

     25         10.54         263         24         10.41         248   

Chilean peso

     2,437         0.01         24         6,387         0.01         64   

Real

     15         2.38         36         11         3.20         35   

Yens

     23         0.08         2         —           —           —     
        

 

 

          

 

 

 

Total current liabilities

           30,859               27,031   
        

 

 

          

 

 

 

Total liabilities

           102,045               75,638   
        

 

 

          

 

 

 

 

(1) Exchange rate in pesos as of September 30, 2015 and December 31, 2014 according to Banco Nación Argentina.

 

38


17. SUBSEQUENT EVENTS

On October 2015, the Company issued Class XLIII Negotiables Obligations for amount of 2,000, which shall bear interest at a variable rate (Badlar) and maturing in 2023.

As mentioned in Note 14.a) ii., YPF is authorized to operate as a settlement and clearing agent in Rosario Futures Exchange (“ROFEX”). In this sense, in October 2015, YPF acquired United States dollar purchase futures contracts in ROFEX, which will mature between February and April 2016.

As of the date of the issuance of these condensed interim consolidated financial statements, there are no other significant subsequent events that require adjustments or disclosure in the condensed interim consolidated financial statements of the Group as of September 30, 2015, which were not already considered in such consolidated financial statements according to IFRS.

 

  

MIGUEL MATIAS GALUCCIO

Presidente

 

39


SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

    YPF Sociedad Anónima
Date: November 13, 2015     By:  

/s/ Diego Celaá

    Name:   Diego Celaá
    Title:   Market Relations Officer