6-K 1 d91498d6k.htm FORM 6-K Form 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 August, 2020

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  ☒            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  ☒

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  ☒

 

 

 


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YPF SOCIEDAD ANONIMA

CONDENSED INTERIM CONSOLIDATED

FINANCIAL STATEMENTS AS OF JUNE 30, 2020

AND COMPARATIVE INFORMATION (UNAUDITED)


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

CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2020 AND COMPARATIVE INFORMATION (UNAUDITED)

   LOGO

CONTENT

 

Note

  

Description

   Page  
     Glossary of terms    1  
     Legal Information    2  
     Condensed interim consolidated statements of financial position    3  
     Condensed interim consolidated statements of comprehensive income    4  
     Condensed interim consolidated statements of changes in shareholders’ equity    5  
     Condensed interim consolidated statements of cash flow    7  
     Notes to the condensed interim consolidated financial statements:       
1    General information, structure and organization of the business of the Group      8  
2    Basis of preparation of the condensed interim consolidated financial statements      9  
3    Seasonality of operations      15  
4    Acquisitions and dispositions      15  
5    Financial risk management      16  
6    Segment information      17  
7    Financial instruments by category      19  
8    Intangible assets      20  
9    Property, plant and equipment      20  
10    Right-of-use assets      23  
11    Investments in associates and joint ventures      24  
12    Inventories      28  
13   

Other receivables

     28  
14   

Trade receivables

     28  
15   

Cash and cash equivalents

     29  
16   

Provisions

     29  
17   

Income Tax

     30  
18   

Taxes payable

     31  
19   

Salaries and social security

     31  
20   

Lease liabilities

     32  
21   

Loans

     32  
22   

Other liabilities

     34  
23   

Accounts payable

     34  
24   

Revenues

     34  
25   

Costs

     36  
26   

Expenses by nature

     37  
27    Other net operating results      38  
28    Net financial results      38  
29    Investments in joint operations      38  
30    Shareholders’ equity      39  
31    Earnings per share      39  
32    Issues related to Maxus Entities      40  
33   

Contingent assets and contingent liabilities

     40  
34   

Contractual commitments

     42  
35   

Main regulations and others

     42  
36   

Balances and transactions with related parties

     47  
37   

Employee benefit plans and similar obligations

     49  
38   

Assets and liabilities in currencies other than the Peso

     50  
39   

Subsequent events

     51  


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

CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2020 AND COMPARATIVE INFORMATION (UNAUDITED)

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GLOSSARY OF TERMS

 

Term

  

Definition

ADR

  

American Depositary Receipt

ADS

  

American Depositary Share

AESA

  

Subsidiary A-Evangelista S.A.

AFIP

  

Argentine Tax Authority

ANSES

  

National Administration of Social Security

ASC

  

Accounting Standards Codification

Associate

  

Company over which YPF has significant influence as provided for in IAS 28

BCRA

  

Central Bank of the Argentine Republic

BNA

  

Banco de la Nación Argentina

BO

  

Official Gazette of the Argentine Republic

BONAR

  

Argentine Treasury Bonds

CAMMESA

  

Compañía Administradora del Mercado Mayorista Eléctrico S.A.

CDS

  

Associate Central Dock Sud S.A.

CGU

  

Cash-Generating Units

CIMSA

  

Subsidiary Compañía de Inversiones Mineras S.A.

CNDC

  

Argentine Antitrust Authority

CNV

  

Argentine Securities Commission

CPI

  

Consumer Price Index

CSJN

  

Argentine Supreme Court

CT Barragán

  

Joint venture CT Barragán S.A.

DOP

  

Deliver or pay

Eleran

  

Subsidiary Eleran Inversiones 2011 S.A.U.

ENARGAS

  

Argentine National Gas Regulatory Authority

FACPCE

  

Argentine Federation of Professional Councils in Economic Sciences

FASB

  

Financial Accounting Standards Board

FOB

  

Free on Board

Group

  

YPF and its subsidiaries

GPA

  

Associate Gasoducto del Pacífico (Argentina) S.A.

IAS

  

International Accounting Standard

IASB

  

International Accounting Standards Board

IDS

  

Associate Inversora Dock Sud S.A.

IEASA (former ENARSA)

  

Integración Energética Argentina S.A. (former Energía Argentina S.A.)

IFRIC

  

International Financial Reporting Interpretations Committee

IFRS

  

International Financial Reporting Standard

IIBB

  

Turnover tax

INDEC

  

National Institute of Statistics and Census

IWPI

  

Internal Wholesale Price Index

Joint venture

  

Company jointly owned by YPF as provided for in IFRS 11

JO

  

Joint operation

LGS

  

Argentine General Corporations Law No. 19,550 (T.O. 1984), as amended

LNG

  

Liquified natural gas

LPG

  

Liquefied Petroleum Gas

MEGA

  

Joint Venture Company Mega S.A.

MEGSA

  

Mercado Electrónico del Gas S.A.

Metroenergía

  

Subsidiary Metroenergía S.A.

Metrogas

  

Subsidiary Metrogas S.A.

MINEM

  

Former Ministry of Energy and Mining (Ministerio de Energía y Minería)

MMBtu

  

Million British thermal units

NO

  

Negotiable Obligations

Oiltanking

  

Associate Oiltanking Ebytem S.A.

Oldelval

  

Associate Oleoductos del Valle S.A.

OLCLP

  

Joint Venture Oleoducto Loma Campana – Lago Pellegrini S.A.

OPESSA

  

Subsidiary Operadora de Estaciones de Servicios S.A.

OTA

  

Associate Oleoducto Trasandino (Argentina) S.A.

OTC

  

Associate Oleoducto Trasandino (Chile) S.A.

PEN

  

National Executive Branch

Peso

  

Argentine Peso

Profertil

  

Joint Venture Profertil S.A.

Refinor

  

Joint Venture Refinería del Norte S.A.

RTI

  

Integral Tariff Review

SE

  

Secretariat of Energy

SEC

  

U.S. Securities and Exchange Commission

SGE

  

Government Secretariat of Energy

Subsidiary

  

Company controlled by YPF in accordance with the provisions of IFRS 10

Termap

  

Associate Terminales Marítimas Patagónicas S.A.

TSEP

  

Transportation system entry point

UHaF

  

Under-Secretariat of Hydrocarbons and Fuels

UNG

  

Unaccounted Natural Gas

US$

  

U.S. dollar

US$/Bbl

  

U.S. dollar per barrel

VAT

  

Value Added Tax

Y-GEN I

  

Joint venture Y-GEN Eléctrica S.A.U.

Y-GEN II

  

Joint venture Y-GEN Eléctrica II S.A.U.

YPF Brasil

  

Subsidiary YPF Brasil Comercio Derivado de Petróleo Ltda.

YPF Chile

  

Subsidiary YPF Chile S.A.

YPF EE

  

Joint venture YPF Energía Eléctrica S.A.

YPF Gas

  

Associate YPF Gas S.A.

YPF Holdings

  

Subsidiary YPF Holdings, Inc.

YPF International

  

Subsidiary YPF International S.A.

YPF or the Company

  

YPF Sociedad Anónima

YPF Ventures

  

Subsidiary YPF Ventures S.A.U.

YTEC

  

Subsidiary YPF Tecnología S.A.

WEM

  

Wholesale Electricity Market

 

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

CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2020 AND COMPARATIVE INFORMATION (UNAUDITED)

   LOGO

 

LEGAL INFORMATION

Legal address

Macacha Güemes 515 – Ciudad Autónoma de Buenos Aires, Argentina

Fiscal year number 44

Beginning on January 1, 2020

Principal business of the Company

The Company’s purpose shall be to perform, on its own, through third parties or in association with third parties, the study, exploration, development and production of oil, natural gas and other minerals and refining, marketing and distribution of oil and petroleum products and direct and indirect petroleum derivatives, including petrochemicals, chemicals, including those derived from hydrocarbons, and non-fossil fuels, biofuels and their components, as well as production of electric power from hydrocarbons, through which it may manufacture, use, purchase, sell, exchange, import or export them. It shall also be the Company’s purpose to render, directly, through a subsidiary or in association with third parties, telecommunications services in all forms and modalities authorized by the legislation in force after applying for the relevant licenses as required by the regulatory framework, as well as the production, industrialization, processing, commercialization, conditioning, transportation and stockpiling of grains and products derived from grains, as well as any other activity complementary to its industrial and commercial business or any activity which may be necessary to attain its objective. In order to fulfill these objectives, the Company may set up, become associated with or have an interest in any public or private entity domiciled in Argentina or abroad, within the limits set forth in the Bylaws.

Filing with the Public Registry

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

Duration of the Company

Through June 15, 2093.

Last amendment to the Bylaws

April 29, 2016 registered with the Argentine Registrar of Companies (Inspección General de Justicia) on December 21, 2016 under No. 25,244, Book 82 of Corporations.

Capital structure

393,312,793 shares of common stock, Pesos 10 par value and 1 vote per share.

Subscribed, paid-in and authorized for stock exchange listing (in Pesos)

3,933,127,930

GUILLERMO EMILIO NIELSEN

President                    

 

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

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

AS OF JUNE 30, 2020 AND DECEMBER 31, 2019 (UNAUDITED)

(Amounts expressed in millions of Pesos)

   LOGO

 

            June 30,      December 31,  
     Notes      2020      2019  

ASSETS

        

Noncurrent Assets

        

Intangible assets

     8        42,868        37,179  

Property, plant and equipment

     9        1,144,901        1,069,011  

Right-of-use assets

     10        62,330        61,391  

Investments in associates and joint ventures

     11        81,190        67,590  

Deferred income tax assets, net

     17        2,332        1,583  

Other receivables

     13        11,305        11,789  

Trade receivables

     14        5,258        15,325  
     

 

 

    

 

 

 

Total noncurrent assets

        1,350,184        1,263,868  
     

 

 

    

 

 

 

Current Assets

        

Inventories

     12        101,284        80,479  

Contract assets

     24        442        203  

Other receivables

     13        32,543        36,192  

Trade receivables

     14        100,978        118,077  

Investment in financial assets

     7        8,119        8,370  

Cash and cash equivalents

     15        83,541        66,100  
     

 

 

    

 

 

 

Total current assets

        326,907        309,421  
     

 

 

    

 

 

 

TOTAL ASSETS

        1,677,091        1,573,289  
     

 

 

    

 

 

 

SHAREHOLDERS’ EQUITY

        

Shareholders’ contributions

        10,861        10,572  

Reserves, other comprehensive income and retained earnings

        551,836        531,977  
     

 

 

    

 

 

 

Shareholders’ equity attributable to shareholders of the parent company

        562,697        542,549  
     

 

 

    

 

 

 

Non-controlling interest

        6,012        5,550  
     

 

 

    

 

 

 

TOTAL SHAREHOLDERS’ EQUITY

        568,709        548,099  
     

 

 

    

 

 

 

LIABILITIES

        

Noncurrent Liabilities

        

Provisions

     16        172,804        144,768  

Deferred income tax liabilities, net

     17        96,294        97,231  

Contract liabilities

     24        —          294  

Income tax liability

     17        2,917        3,387  

Taxes payable

     18        239        1,428  

Lease liabilities

     20        41,511        40,391  

Loans

     21        415,576        419,651  

Other liabilities

     22        757        703  

Accounts payable

     23        2,467        2,465  
     

 

 

    

 

 

 

Total noncurrent liabilities

        732,565        710,318  
     

 

 

    

 

 

 

Current Liabilities

        

Provisions

     16        6,250        5,460  

Contract liabilities

     24        6,085        7,404  

Income tax liability

     17        1,344        1,964  

Taxes payable

     18        13,851        11,437  

Salaries and social security

     19        9,300        10,204  

Lease liabilities

     20        24,925        21,389  

Loans

     21        195,824        107,109  

Other liabilities

     22        1,495        1,310  

Accounts payable

     23        116,743        148,595  
     

 

 

    

 

 

 

Total current liabilities

        375,817        314,872  
     

 

 

    

 

 

 

TOTAL LIABILITIES

        1,108,382        1,025,190  
     

 

 

    

 

 

 

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY

        1,677,091        1,573,289  
     

 

 

    

 

 

 

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

GUILLERMO EMILIO NIELSEN

President                  

 

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

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

FOR THE SIX-MONTH AND THREE-MONTH PERIOD ENDED JUNE 30, 2020 AND 2019 (UNAUDITED)

(Amounts expressed in millions of Pesos, except per share information, expressed in Pesos)

   LOGO

 

            For the six-month
period ended June 30,
    For the three-month
period ended June 30,
 
     Notes      2020     2019     2020     2019  

Net income

           

Revenues

     24        308,228       291,236       133,558       160,329  

Costs

     25        (292,736     (238,965     (146,822     (134,211
     

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit / (loss)

        15,492       52,271       (13,264     26,118  
     

 

 

   

 

 

   

 

 

   

 

 

 

Selling expenses

     26        (37,044     (21,037     (23,168     (11,217

Administrative expenses

     26        (14,132     (10,524     (7,383     (5,756

Exploration expenses

     26        (856     (2,577     (140     (1,056

Impairment of property, plant and equipment

     9        (57,429     —         (57,429     —    

Other net operating results

     27        15,323       (334     7,940       (921
     

 

 

   

 

 

   

 

 

   

 

 

 

Operating (loss) / profit

        (78,646     17,799       (93,444     7,168  
     

 

 

   

 

 

   

 

 

   

 

 

 

Income from equity interests in associates and joint ventures

     11        3,720       3,514       2,300       1,955  

Financial income

     28        51,623       19,802       30,817       (5,541

Financial loss

     28        (67,814     (30,663     (37,680     (10,666

Other financial results

     28        10,782       4,442       12,075       1,765  
     

 

 

   

 

 

   

 

 

   

 

 

 

Net financial results

     28        (5,409     (6,419     5,212       (14,442
     

 

 

   

 

 

   

 

 

   

 

 

 

Net (loss) / profit before income tax

        (80,335     14,894       (85,932     (5,319
     

 

 

   

 

 

   

 

 

   

 

 

 

Income tax

     17        1,638       (25,374     884       2,992  
     

 

 

   

 

 

   

 

 

   

 

 

 

Net loss for the period

        (78,697     (10,480     (85,048     (2,327
     

 

 

   

 

 

   

 

 

   

 

 

 

Other comprehensive income

           

Items that may be reclassified subsequently to profit or loss:

           

Translation differences from subsidiaries, associates and joint ventures

        (4,090     (1,560     (2,277     431  

Result from net monetary position in subsidiaries, associates and joint ventures (1)

        3,762       4,343       1,568       2,002  

Items that may not be reclassified subsequently to profit or loss:

           

Translation differences from YPF

        99,346       48,127       56,453       (7,860
     

 

 

   

 

 

   

 

 

   

 

 

 

Other comprehensive income / (loss) for the period

        99,018       50,910       55,744       (5,427
     

 

 

   

 

 

   

 

 

   

 

 

 

Total comprehensive income / (loss) for the period

        20,321       40,430       (29,304     (7,754
     

 

 

   

 

 

   

 

 

   

 

 

 

Net profit / (loss) for the period attributable to:

           

Shareholders of the parent company

        (78,418     (10,869     (84,630     (2,684

Non-controlling interest

        (279     389       (418     357  

Other comprehensive income for the period attributable to:

           

Shareholders of the parent company

        98,277       50,067       55,429       (5,795

Non-controlling interest

        741       843       315       368  

Total comprehensive income / (loss) for the period attributable to:

           

Shareholders of the parent company

        19,859       39,198       (29,201     (8,479

Non-controlling interest

        462       1,232       (103     725  

Earnings per share attributable to shareholders of the parent company:

           

Basic and diluted

     31        (199.84     (27.71     (215.67     (6.85

 

(1)

Result associated to subsidiaries, associates and joint ventures with the Peso as functional currency. See accounting policy in Note 2.b.1 to the annual consolidated financial statements.

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

GUILLERMO EMILIO NIELSEN

President                  

 

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

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 2020 AND 2019 (UNAUDITED)

(Amounts expressed in millions of Pesos)

   LOGO

 

    For the six-month period ended June 30, 2020  
    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  

Balance at the beginning of the fiscal year

    3,924       6,085       9       16       117       177       (396     640       10,572  

Accrual of share-based benefit plans(4)

    —         —         —         —         300       —         —         —         300  

Settlement of share-based benefit plans(2)

    —         1       —         (1     (59     66       (18     —         (11

As decided by the Shareholders’ Meeting on April 30, 2020(3)

    —         —         —         —         —         —         —         —         —    

Other comprehensive income

    —         —         —         —         —         —         —         —         —    

Net loss

    —         —         —         —         —         —         —         —         —    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance at the end of the period

    3,924       6,086       9       15       358       243       (414     640       10,861  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
    Reserves                 Equity attributable to        
    Legal     Future
dividends
    Investments     Purchase of
treasury
shares
    Other
comprehensive
income
    Retained
earnings
    Shareholders
of the parent
company
    Non-controlling
interest
    Total
shareholders’
equity
 

Balance at the beginning of the fiscal year

    2,007       2,500       44,255       500       516,786       (34,071     542,549       5,550       548,099  

Accrual of share-based benefit plans(4)

    —         —         —         —         —         —         300       —         300  

Settlement of share-based benefit plans (2)

    —         —         —         —         —         —         (11     —         (11

As decided by the Shareholders’ Meeting on April 30, 2020(3)

    —         1,200       (35,321     50       —         34,071       —         —         —    

Other comprehensive income

    —         —         —         —         98,277       —         98,277       741       99,018  

Net loss

    —         —         —         —         —         (78,418     (78,418     (279     (78,697
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance at the end of the period

    2,007       3,700       8,934       550       615,063 (1)      (78,418     562,697       6,012       568,709  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(1)

Includes 627,491 corresponding to the effect of the translation of the financial statements of YPF and, (33,781) corresponding to the effect of the translation of the financial statements of investments in subsidiaries, associates and joint ventures with functional currencies other than the U.S. dollar and 21,353 corresponding to the recognition of the result for the net monetary position of subsidiaries, associates and joint ventures with the Peso as functional currency, as detailed in Note 2.b.1. to the annual consolidated financial statements.

(2)

Net of employees’ income tax withholdings related to the share-based benefit plans.

(3)

See Note 30.

(4)

See Note 37.

GUILLERMO EMILIO NIELSEN

President                  

 

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

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 2020 AND 2019 (UNAUDITED) (Cont.)

(Amounts expressed in millions of Pesos)

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    For the six-month period ended June 30, 2019  
    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  

Balance at the beginning of the fiscal year

    3,923       6,084       10       17       115       11       (282     640       10,518  

Accrual of share-based benefit plans(4)

    —         —         —         —         217       —         —         —         217  

Repurchase of treasury shares

    (4     (6     4       6       —         (280     —         —         (280

Settlement of share-based benefit plans(2)

    1       1       (1     (1     (57     71       (17     —         (3

As decided by the Shareholders’ Meeting on April 26, 2019(3)

    —         —         —         —         —         —         —         —         —    

As decided by the Board of Directors on June 27, 2019(3)

    —         —         —         —         —         —         —         —         —    

Other comprehensive income

    —         —         —         —         —         —         —         —         —    

Net income / (loss)

    —         —         —         —         —         —         —         —         —    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance at the end of the period

    3,920       6,079       13       22       275       (198     (299     640       10,452  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
    Reserves                 Equity attributable to        
    Legal     Future
dividends
    Investments     Purchase of
treasury
shares
    Other
comprehensive
income
    Retained
earnings
    Shareholders
of the parent
company
    Non-controlling
interest
    Total
shareholders’
equity
 

Balance at the beginning of the fiscal year

    2,007       —         11,020       220       297,120       38,315       359,200       3,157       362,357  

Accrual of share-based benefit plans(4)

    —         —         —         —         —         —         217       —         217  

Repurchase of treasury shares

    —         —         —         —         —         —         (280     —         (280

Settlement of share-based benefit plans (2)

    —         —         —         —         —         —         (3     —         (3

As decided by the Shareholders’ Meeting on April 26, 2019(3)

    —         4,800       33,235       280       —         (38,315     —         —         —    

As decided by the Board of Directors on June 27, 2019(3)

    —         (2,300     —         —         —         —         (2,300     —         (2,300

Other comprehensive income

    —         —         —         —         50,067       —         50,067       843       50,910  

Net income / (loss)

    —         —         —         —         —         (10,869     (10,869     389       (10,480
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance at the end of the period

    2,007       2,500       44,255       500       347,187 (1)      (10,869     396,032       4,389       400,421  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(1)

Includes 355,847 corresponding to the effect of the translation of the financial statements of YPF and, (23,240) corresponding to the effect of the translation of the financial statements of investments in subsidiaries, associates and joint ventures with functional currencies other than the U.S. dollar and 14,580 corresponding to the recognition of the result for the net monetary position of subsidiaries, associates and joint ventures with the Peso as functional currency, as detailed in Note 2.b.1. to the annual consolidated financial statements.

(2)

Net of employees’ income tax withholdings related to the share-based benefit plans.

(3)

See Note 29 to the annual consolidated financial statements.

(4)

See Note 37.

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

GUILLERMO EMILIO NIELSEN

President                  

 

6


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

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOW

FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 2020 AND 2019 (UNAUDITED)

(Amounts expressed in millions of Pesos)

   LOGO

 

     For the six-month period
ended June 30,
 
     2020     2019  

Operating activities:

    

Net loss

     (78,697     (10,480

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

    

Income from equity interest in associates and joint ventures

     (3,720     (3,514

Depreciation of property, plant and equipment

     86,572       61,755  

Depreciation of right-of-use assets

     8,679       4,353  

Amortization of intangible assets

     1,409       1,036  

Retirement of property, plant and equipment and intangible assets and consumption of materials

     7,360       8,764  

Charge on income tax

     (1,638     25,374  

Net increase in provisions

     16,165       7,304  

Impairment of property, plant and equipment

     57,429       —    

Exchange differences, interest and other

     2,240       1,822  

Share-based benefit plan

     300       217  

Accrued insurance

     (3,189     —    

Result from assignment of interest in areas

     (12,233     —    

Changes in assets and liabilities:

    

Trade receivables

     27,219       (15,237

Other receivables

     7,267       (2,875

Inventories

     (5,389     (9,612

Accounts payable

     (15,382     18,261  

Taxes payables

     377       809  

Salaries and social security

     (843     830  

Other liabilities

     151       384  

Decrease in provisions included in liabilities due to payment/use

     (1,639     (1,943

Contract assets

     (263     (96

Contract liabilities

     (1,219     (230

Dividends received

     2,096       761  

Proceeds from collection of business interruption insurance

     1,004       758  

Income tax payments

     (1,456     (5,055
  

 

 

   

 

 

 

Net cash flows from operating activities(1)(2)

     92,600       83,386  
  

 

 

   

 

 

 

Investing activities:(3)

    

Acquisition of property, plant and equipment and intangible assets

     (67,886     (74,315

Contributions and acquisitions of interests in associates and joint ventures

     —         (4,676

Proceeds from sales of financial assets

     28,172       957  

Payment from purchase of financial assets

     (19,649     —    

Interests received from financial assets

     —         452  

Proceeds from assignment of interest in areas

     13,867       —    
  

 

 

   

 

 

 

Net cash flows used in investing activities

     (45,496     (77,582
  

 

 

   

 

 

 

Financing activities:(3)

    

Payments of loans

     (79,057     (33,292

Payments of interest

     (29,587     (16,997

Proceeds from loans

     81,588       55,239  

Repurchase of treasury shares

     —         (280

Payments of leases

     (10,059     (5,571

Payment of interest in relation to income tax

     (440     (124
  

 

 

   

 

 

 

Net cash flows used in financing activities

     (37,555     (1,025
  

 

 

   

 

 

 

Translation differences of cash and cash equivalents

     7,892       5,568  
  

 

 

   

 

 

 
  

 

 

   

 

 

 

Net increase in cash and cash equivalents

     17,441       10,347  

Cash and cash equivalents at the beginning of the fiscal year

     66,100       46,028  

Cash and cash equivalents at the end of period

     83,541       56,375  
  

 

 

   

 

 

 

Net increase in cash and cash equivalents

     17,441       10,347  
  

 

 

   

 

 

 

 

(1)

Does not include exchange differences generated by cash and cash equivalents, which are disclosed separately in this statement.

(2)

Includes 6,284 and 2,786 for the six-month period ended June 30, 2020 and 2019, respectively, for payment of short-term leases and payments of the variable charge of leases related to the underlying asset return/use.

(3)

The main investing and financing transactions that have not affected cash and cash equivalents correspond to:

 

     For the six-month period
ended June 30,
 
     2020      2019  

Unpaid acquisitions of property, plant and equipment

     2,918        11,465  

Additions of right-of-use assets

     4,302        4,786  

Capitalization of amortization of right-of-use assets

     1,796        673  

Capitalization of financial accretion for lease liabilities

     452        95  

Debt capitalization of joint ventures

     —          738  

Dividends payable

     —          2,300  

Dividends receivable

     —          50  

GUILLERMO EMILIO NIELSEN

President                  

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

 

7


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

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2020 AND COMPARATIVE INFORMATION (UNAUDITED)

   LOGO
(Amounts expressed in millions of Pesos, except for shares and per share amounts expressed in Pesos, or as otherwise indicated)

 

1. GENERAL INFORMATION, STRUCTURE AND ORGANIZATION OF THE BUSINESS OF THE GROUP

General information

YPF Sociedad Anónima is a stock corporation (sociedad anónima) incorporated under the laws of the Argentine Republic, with a registered office at Macacha Güemes 515, in the City of Buenos Aires.

YPF and its subsidiaries form the leading energy group in Argentina, which operates a fully integrated oil and gas chain with leading market positions across the domestic Upstream and Downstream segments.

Structure and organization of the economic Group

The following chart shows the organizational structure, including the main companies of the Group, as of June 30, 2020:

 

LOGO

 

(1)

Held directly and indirectly.

(2)

See Note 3 to the annual consolidated financial statements.

(3)

See Note 34.h to the annual consolidated financial statements.

 

8


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

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2020 AND COMPARATIVE INFORMATION (UNAUDITED)

   LOGO

1. GENERAL INFORMATION, STRUCTURE AND ORGANIZATION OF THE BUSINESS OF THE GROUP (Cont.)

 

Organization of the business

As of June 30, 2020, the Group carries out its operations in accordance with the following structure:

 

   

Upstream;

 

   

Gas and Power;

 

   

Downstream;

 

   

Central administration and others, which covers the remaining activities not included in the previous categories.

Activities covered by each business segment are detailed in Note 6.

Almost all operations, properties and clients are located in Argentina. However, the Group also holds participating interests in exploratory areas in Bolivia and production areas in Chile. The Group also sells lubricants and derivatives in Brazil and Chile.

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

2.a) Basis of preparation

The condensed interim consolidated financial statements of YPF for the six-month period ended June 30, 2020 are presented in accordance with IAS 34 “Interim Financial Reporting”. These condensed interim consolidated financial statements should be read in conjunction with the annual consolidated financial statements of the Group as of December 31, 2019 prepared in accordance with IFRS issued by the IASB and the interpretations issued by the IFRIC.

Moreover, some additional information required by the LGS and/or CNV’s regulations have been included.

These condensed interim consolidated financial statements were approved by the Board of Directors’ meeting and authorized to be issued on August 10, 2020.

These condensed interim consolidated financial statements corresponding to the six-month period ended on June 30, 2020 are unaudited. The Company’s Management believes they have included all necessary adjustments to reasonably present the results of each period on a basis consistent with the audited annual consolidated financial statements. Loss for the six-month period ended on June 30, 2020 does not necessarily reflect the proportion of the Group’s full-year loss.

2.b) Significant Accounting Policies

The most significant accounting policies are described in Note 2.b to the annual consolidated financial statements.

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, except for the valuation policy for income tax detailed in Note 17.

Functional and presentation currency

As mentioned in Note 2.b.1. to the annual consolidated financial statements, YPF has defined the U.S. dollar as its functional currency. Additionally, according to CNV Resolution No. 562, YPF must present its financial statements in Pesos.

 

9


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

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2020 AND COMPARATIVE INFORMATION (UNAUDITED)

   LOGO

2. BASIS OF PREPARATION OF THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (Cont.)

 

Effects of the translation of investments in subsidiaries, associates and joint ventures with a functional currency corresponding to a hyperinflationary economy

The results and financial position of subsidiaries with the Peso as functional currency were translated into U.S dollars by the following procedures: all amounts (i.e., assets, liabilities, stockholders’ equity items, expenditures and revenues) were translated at the exchange rate effective at the closing date of the financial statements, except for comparative amounts, which were presented as current amounts in the financial statements of the previous fiscal year (i.e., these amounts were not adjusted to reflect subsequent variations in price levels or exchange rates). Thus, the effect of the restatement of comparative amounts was recognized in other comprehensive income.

These criteria were also implemented by the Group for its investments in associates and joint ventures.

Adoption of new standards and interpretations effective as of January 1, 2020

The Group has adopted all new and revised standards and interpretations, issued by the IASB, relevant to its operations which are of mandatory and effective application as of June 30, 2020, as specified in Note 2.b.26 to the annual consolidated financial statements.

Standards and interpretations issued by the IASB whose implementation is not mandatory as of the closing of these consolidated interim financial statements and, therefore, have not been adopted by the Group

 

   

Amendments issued as from January 1, 2020

In January 2020, the IASB issued amendments to IAS 1 in relation to the classification of liabilities into current and non-current, which are retroactively applicable for fiscal years beginning on January 1, 2022, , included, (date which was extended to January 1, 2023) and allow for their earlier application.

The amendments clarify that liabilities classification as current or non-current:

 

   

Must be based on existing rights at the end of the reporting period to defer settlement by at least twelve months and make explicit that only rights in place “at the end of the reporting period” should affect the classification of a liability.

 

   

Is unaffected by expectations about whether an entity will exercise its right to defer settlement of a liability.

It also clarifies that settlement refers to the transfer to the counterparty of cash, equity instruments, other assets or services.

The Group does not expect that the implementation of these amendments will have a significant impact on its financial statements, though is currently evaluating the impact.

 

   

Amendments to IAS 16 – Proceeds before intended use

In May 2020, the IASB issued amendments that are applicable for fiscal years beginning on or after January 1, 2022, allowing their early application.

After the amendment to IAS 16, an entity may not deduct from the cost of an item of property, plant and equipment any proceeds from selling items produced while bringing that asset to the location and condition necessary for it to be capable of operating. The proceeds from selling any such items, and the production cost of those items, will be recognized in the comprehensive income for the corresponding period. Entities shall disclose separetely the amounts of proceeds and costs, that relate to items that do not proceed from the entity’s ordinary activities.

The amendment also clarifies that an item of property, plant and equipment is in said preparation and testing process when assesing the technical and physical performance of the asset. Therefore, an asset may be able to operate as the manner intended by Management and consequently be subject to depreciation before it has reached the level of operating performance expected by Management.

According to the variables present at the end of the reporting period, the Group does not expect that the implementation of these amendments will have a significant impact on its financial statements.

 

10


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

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2020 AND COMPARATIVE INFORMATION (UNAUDITED)

   LOGO

2. BASIS OF PREPARATION OF THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (Cont.)

 

   

Amendments to IAS 37 – Onerous Contracts

In May 2020, the IASB issued amendments that are applicable for fiscal years beginning on or after January 1, 2022, allowing their early application.

The amendment clarifies the meaning of “cost of fulfilling a contract” for the purpose of assessing whether the contract is onerous. The direct cost of fulfilling a contract consists of both, the incremental cost of fulfilling that contract (for example, direct labour and materials), as well as an allocation of other costs that relate directly to fulfilliment of contracts (for example, an allocation of the depreciation charge for an item of property, plant and equipment used to fulfill that contract).

The amendment also clarifies that an entity must recognize any impairment loss that has occurred in the assets used to fulfill the contract before recording an onerous loss and when determining such onerosity, the present obligation under an existing contract must be considered, and therofore, does not recognize future operating losses.

According to the variables present at the end of the reporting period, the Group does not expect that the implementation of these amendments will have a significant impact on its financial statements.

 

   

Amendments to IFRS 3 – Reference to the Conceptual Framework

In May 2020, the IASB issued amendments that are applicable for fiscal years beginning on or after January 1, 2022, allowing their early application.

After updating the reference that the Standard makes to the 2018 Conceptual Framework on the definition of the concepts of assets and liabilities in a business combination, its application could change which assets and liabilities that meet the requirements for recognition in a business combination. In some of these cases, the post-acquisition accounting required by other IFRS Standards could then lead to immediate derecognition of assets or liabilities recognised in a business combination, resulting in so called “Day 2 gains or losses” that do not depict an economic gain or loss.

To remedy this situation, the new exception in IFRS 3 for liabilities and contingent liabilities, specifies that, for some types of liabilities and contingent liabilities, an entity applying IFRS 3 should refer to IAS 37 “Provisions, contingent liabilities and contingent assets”, or IFRIC 21 “Levies”, instead of the 2018 Conceptual Framework. It has also been clarified that the acquirer must not recognize contingent assets on the acquisition date as defined in IAS 37.

The Group does not expect that the implementation of these amendments will have a significant impact on its financial statements.

 

   

Amendments to IFRS 16 –COVID-19 Related rent concessions

In May 2020, the IASB issued amendments that are applicable for fiscal years beginning on or after June 1, 2020, allowing their early application.

A lessee may elect to account for any change in lease payments as a consequence of the COVID-19 pandemic, arising from the rent concession the same way it would account for the change applying IFRS 16 if the change were not a lease modification.

This option applies only to rent concessions occurring as a direct consequence of the COVID-19 pandemic and only if all of the following conditions are met:

(a) the change in lease payments results in revised consideration for the lease that is substantially the same as, or less than, the consideration for the lease immediately preceding the change;

(b) any reduction in lease payments affects only payments originally due or before June 30, 2021 (for example, a rent concession would meet this condition if it results in reduced lease payments on or before June 30, 2021, and increased lease payments that extend beyond June 30, 2021); and

(c) there is no substantive change to other terms and conditions of the lease.

The Group does not expect that the implementation of these amendments will have a significant impact on its financial statements.

 

11


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

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2020 AND COMPARATIVE INFORMATION (UNAUDITED)

   LOGO

2. BASIS OF PREPARATION OF THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (Cont.)

 

 

   

Anual improvements to IFRS – Standards 2018-2020

In May 2020, the IASB issued the 2018-2020 cycle of annual improvements that are applicable for fiscal years beginning on or after January 1, 2022, allowing their early application.

A summary of the main modified standards and their purpose follows:

 

Standard

  

Amended Subjec

  

Detail

IFRS 1 “First-time adoption of IFRS”    Subsidiary as a First-time IFRS adopter   

When a subsidiary becomes a first-time adopter later than its parent company, it may elect to measure its assets and liabilities, according to how their parent measured them in their consolidated financial statements, based on the parent’s date of transition to IFRSs (without considering consolidation adjustments and for the purposes of the business combination for which the parent company acquired the subsidiary). After the amendment, this exception is extended to accumulated translation differences.

 

A similar election is available to an associate or joint venture.

IFRS 9 “Financial Instruments”    Fees in the “10 per cent” Test for Derecognition of financial liabilities   

An entity must derecognise the original financial liability and recognise a new financial liability when, among other requirements, there is a substantial modification of the terms of an existing financial liability.

 

The terms are substantially different if the discounted present value of the cash flows under the new terms using the original effective interest rate is at least 10 per cent different from the discounted present value remaining cash flows of the original financial liability, including any fees paid net of any fees received in the 10 per cent test. The amendment clarifies that when determining this value, only the items paid or received between the borrower and the lender are included, including those paid or received by one or the other on behalf of the other.

IFRS 16 “Leases”    Ilustrative examples- Lease incentives    It is removed from Illustrative Example 13, reimbursement relating to leasehold improvements.
IAS 41 “Agriculture”    Taxation in fair value measurements    Paragraph 22 was amended to remove the requirement to exclude cash flows for taxation when measuring fair value, as to aline the requirements in IAS 41 on fair value measurements with those in IFRS 13 “Fair Value Measurement”.

The Group does not expect that the implementation of these amendments will have a significant impact on its financial statements.

Additionally, amendments have been issued to IFRS 4 and IFRS 17 “Insurance contracts”, which were not included as they are not applicable to the Group since it does not generate related activities.

2.c) Accounting Estimates and Judgments

The preparation of financial statements at a certain date requires 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 as of the date of preparation of these condensed interim consolidated financial statements.

In preparing these condensed interim consolidated financial statements, significant estimates and judgments were made by Management in applying the Group’s accounting policies and the main sources of uncertainty were consistent with those applied by the Group in the preparation of the annual consolidated financial statements, which are disclosed in Notes 2.b and 2.c to the annual consolidated financial statements, about accounting estimates and judgments.

 

12


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

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2020 AND COMPARATIVE INFORMATION (UNAUDITED)

   LOGO

2. BASIS OF PREPARATION OF THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (Cont.)

 

Besides, the Company’s Management has considered the COVID-19 impact and the current economic context based on the preparation of these condensed interim consolidated financial statements and still considers appropriate to adopt the going-concern accounting principle for their presentation and valuation.

Considerations concerning COVID-19 (coronavirus) and the current economic environment

Since the beginning of 2020, a virus outbreak has taken place, causing potentially deadly respiratory infections (COVID-19) and adversely affecting the demand for refined products in geographical areas where the most relevant measures were implemented to control the virus’ spread. Particularly, since March, the lower global demand for refined products and the uncertainty in the supply of crude oil have caused an abnormally high volatility in this commodity.

On March 12, 2020, Decree No. 260/2020 was published in the BO, which extended the public health emergency established by Law No. 27,541 due to the pandemic, for a period of one year.

Also, since March 20, 2020, the Argentine Government adopted certain measures to protect the general population and fight the disease. These measures imposed a general restriction on economic activity, with some exceptions, which included, among other actions, price controls, the prohibition of dismissals without cause as well as for reasons of lack or reduction of activity and force majeure, general restriction to the free circulation during certain periods in Argentina, general travel restrictions, visas suspension, nation-wide lockdowns, closing of public and private institutions, sporting events suspension, restrictions to the operation of museums and tourist attractions and extension of holidays. These measures include several exceptions applicable to people engaged in activities and services declared as essential in the emergency. Among these exceptions, minimum work shifts are contemplated ensuring the operation and maintenance of oil and gas fields, oil and gas treatment and/or refining plants, transportation and distribution of electric energy, liquid fuels, oil and gas, fuel service stations and electric power generators.

From the implementation of these measures, the demand for gasoline, diesel and jet fuel dropped significantly, reaching declines of 70%, 40% and 90%, respectively, as a daily average compared to the demand in the days prior to these measures. As of the date of these condensed interim consolidated financial statements, these accumulated declines are within approximately of 50%, 20% and 90%, respectively. Despite the slight recovery since certain flexibilization of measures previously mentioned, current activity levels continue affecting the Group’s comprehensive results and cash flows. Consequently, the processing levels at the Group’s refineries are also adversely affected. The Group cannot assure the extent or duration of such conditions.

As mentioned above, the valuation of certain assets and liabilities is subject to a higher level of uncertainty, including those described below:

 

   

Review of impairment indicators of property, plant and equipment

As explained in Notes 2.b.8 and 2.b.9 to the annual consolidated financial statements, as a general criteria, the method used to estimate the recoverable amount of property, plant and equipment mainly consists of estimating the value-in-use based on the future expected cash flows arising from the use of such assets, discounted at a rate that reflects the weighted average cost of the capital employed.

Regarding interim periods, IAS 34 requires entities to apply the impairment testing. When an entity has previously recognized impairment losses, it is necessary to review the detailed calculations made at the end of the period if the indicators that gave rise to such losses continues to remain present. To such end, the entity shall revise the existence of significant indicators of impairment or reversals since the end of the last fiscal year and determine whether it has to proceed or not with such detailed testing.

The Group continuously monitors business perspectives in the market it operates. Specifically, in the domestic market of natural gas, as in 2019, an excess supply is observed with respect to the domestic demand at specific times of the year due to greater production in unconventional fields. This situation generated a reduction in natural gas sales price in the domestic market that deepened as of the second quarter of 2020, mainly due to lower sales prices to distributors (see Note 35.a) and lower prices obtained on gas’s biddings on power plants channel.

 

13


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

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2020 AND COMPARATIVE INFORMATION (UNAUDITED)

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2. BASIS OF PREPARATION OF THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (Cont.)

 

Therefore, given the impairment indicators for the natural gas market, the Group estimated the recoverable value of the net assets comprising the CGUs gas of the Upstream segment based on the detailed calculation of the value-in-use as of June 30, 2020.

As of June 30, 2020, based on the background and the method mentioned above, the Group recognized an impairment charge of property, plant and equipment, mainly for the CGU Gas – Neuquina Basin of 49,170 (36,877 net of the effect of income tax) and for the CGU Gas – Austral Basin of 8,126 (6,095 net of the effect of income tax), generated, mainly, by the expected fall in gas prices due to the situation the market is going through at global level, and also, to the specific dynamics mentioned above, at the local level. This trend in prices is maintained in the projections for the upcoming months, which affects investments and activity, generating the impairment of the related assets for the recorded charge.

The discount rate after taxes used as of June 30, 2020 was 12.63% for 2020 and 2021 and 13.06% for 2022 and thereafter, being the recoverable value after taxes as of such date for the CGU Gas – Neuquina Basin and the CGU Gas – Austral Basin 107,911 and 7,835, respectively.

 

   

Impairment of financial assets measured at amortized cost

The Group applies the simplified approach to expected credit losses allowed under IFRS 9 for the trade receivables.

Considering the maximum exposure to financial credit risk based on counterparties’ concentration, receivables with the National Government, its direct agencies and companies with government participation account for approximately 34% (45,440), while the Group’s remaining debtors are diversified.

The current economic situation and future credit risk outlooks have been contemplated to review and update estimates of provisions. Even though they have not had a significant impact, the total economic impact of COVID-19 on expected credit losses is subject to significant uncertainty since the prospective information that is currently available is limited. The Group will continue thoroughly reviewing the assumptions used in such estimates.

 

   

Income tax

Under IAS 34, income tax expense is recognised in each interim period based on the best estimate of the effective income tax rate expected at the end of the fiscal year.

Considering the current economic context and future prospects, the Group has adjusted the projections used to estimate the effective tax rate.The Group has also reviewed the recoverability of tax losses carry-forwards, not having recorded impairment charges for the six-month period ended on June 30, 2020.

 

   

Provisions assumptions for lawsuits and contingencies

The Group does not expect the current economic situation will significantly change the present value of the disbursements deemed to be required to settle the obligations related to existing provisions as of the date of issuance of these condensed interim consolidated financial statements. However, the Group will continue reviewing these assumptions.

 

   

Other accounting estimates and judgments

The rest of the accounting estimates and judgments disclosed in the annual consolidated financial statements are still applicable. No new significant accounting estimates or judgments have been identified.

 

14


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

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2020 AND COMPARATIVE INFORMATION (UNAUDITED)

   LOGO

2. BASIS OF PREPARATION OF THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (Cont.)

 

As of the date of these condensed interim consolidated financial statements, due to the uncertainties inherent to the scale and duration of these events, it is not reasonably possible to estimate the final negative impact this pandemic will have on the world’s economy and its financial markets, on Argentina’s economy, and consequently, on the Group’s comprehensive results, cash flows and financial position of the Group, nor its effect on access to debt markets, the contractual position with certain counterparties (including as a result of events of force majeure or other similar events under the Group’s contracts, see also Note 33.a.2), the Group’s capacity to meet its commitments and future asset impairments, among other issues.

2.d) Comparative information

Amounts and other information corresponding to the year ended on December 31, 2019 and to the six-month period ended on June 30, 2019 are an integral part of these condensed interim consolidated financial statements and are intended to be read only in relation to these financial statements.

3. SEASONALITY OF OPERATIONS

Historically, the Group’s results have been subject to seasonal fluctuations throughout the year, particularly as a result of the increase in natural gas sales during the winter. After the devaluation of the Peso in 2002, and as a consequence of the natural gas price freeze imposed by the Argentine government until the last years, the use of natural gas has been diversified, generating an increase in demand throughout the entire year. However, recently, an excess of supply with respect to the domestic demand took place at specific times of the year. Consequently, the Group may be subject to seasonal fluctuations in its sales volumes and prices, which might adversely affect the level of production and sales of natural gas.

Besides, the current economic environment has been significantly affected by COVID-19, which will have a negative impact on the results of the Group’s operations, and that will be sensitive to the development of the pandemic and the measures adopted by the Argentine Government. See Note 2.c.

4. ACQUISITIONS AND DISPOSITIONS

 

   

Bandurria Sur Area

As mentioned on Note 33.b to the annual consolidated financial statements, on January 2020, YPF was notified of the acquisition by Shell Compañía Argentina de Petróleo S.A. and Equinor Argentina AS (jointly, the “Consortium”) of the entire share package of Schlumberger Oilfield Eastern Ltd. (“SPM”), an affiliate of Schlumberger Argentina S.A. This assignment required payment by SPM of the outstanding price that amounted approximately to US$ 105 million, which has already been received by YPF. In consideration of the above, the Group recorded a profit of 6,356 included in “Other net operating results”.

On March 5, 2020, an agreement was executed, under which YPF assigned to Bandurria Sur Investments S.A. (“BSI”, formerly named SPM Argentina S.A.), an affiliate of Shell Argentina S.A. and Equinor Argentina AS (Argentina Branch), an 11% interest in the Bandurria Sur block. On April 29, 2020, Decree No. 512/2020 was issued, by which the Province of Neuquén approved the assignment in favor of BSI. On May 14, 2020, YPF and BSI entered into the final contracts for the joint exploitation of hydrocarbons in the Area, thereby complying with the precedent conditions for the entry into force of the agreement for the assignment of 11% of the unconventional exploitation concession of the Area to BSI. Consequently, YPF will continue to be the Operator of the Area, keeping a 40% interest in the concession, while BSI’s interest will be 60%. In consideration of the above, the Group recorded a profit of 4,420 included in “Other net operating results”.

 

15


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

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2020 AND COMPARATIVE INFORMATION (UNAUDITED)

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4. ACQUISITIONS AND DISPOSITIONS (Cont.)

 

   

CAN 100 exploration permit (offshore) –Block E-1 Reconversion

On April 16, 2020, having the conditions established under the assignment agreement been met, among them, the approval of the assignment pursuant to section 72 of the Hydrocarbons Law by the SE, which was granted through Resolution No. 55/2020, the closure of the transaction was made, efectivizing YPF’s assigment of its 50% interest in the area and the operation to Equinor Argentina B.V. Sucursal Argentina. On April 22, 2020, YPF received US$ 22 million. In consideration of the above, the Group recorded a profit of 1,457 included in “Other net operating results”.

5. FINANCIAL RISK MANAGEMENT

The Group’s activities expose it to a variety of financial risks: market risk (including foreign currency risk, interest rate risk, and price risks), credit risk and liquidity risk. Within the Group, risk management functions are conducted in relation to financial risks associated to financial instruments to which the Group is exposed during a certain period or as of a specific date. The administration and risk management policies applied by the Group are described in Note 4 to the annual consolidated financial statements. Moreover, given the current economic situation caused by the COVID-19, the Group has evaluated its exposure to the following risks:

 

   

Market risk management

The market risk to which the Group is exposed consists of the possibility that the valuation of the Group’s financial assets and liabilities, as well as certain expected cash flows may be adversely affected by changes in interest rates, exchange rates and other price variables.

The Group has carried out a sensitivity analysis of possible changes in interest rates, which did not have a significant impact on the Group. Likewise, given the restrictions imposed by the BCRA for access to the exchange market, specifically since the publication of Communication No. 7030, the Group has been reducing its portion of cash and cash equivalents denominated in currencies other than the Argentine Peso, and, therefore it may be affected in case of exchange rate variations.

On the other hand, the Group was affected by the investments in financial instruments’ own price risk (decrease in public securities and mutual funds prices), which are valued at fair value with changes in results. See Note 7.

 

   

Liquidity risk management

Liquidity risk is associated with the possibility of a mismatch between the need of funds to meet short, medium or long-term obligations.

The Group assessed its projected liquidity based on several stress scenarios and concluded that it is not facing any difficulties to meet its future commitments.

Besides, several loans of the Group contain Covenants, which include financial commitments associated with the leverage ratio, the debt service coverage ratio, and events of default triggered by materially adverse judgments, among others. The Group monitors compliance with the Covenants on a quarterly basis. As of June 30, 2020, the Group has complied with all assumed clauses of commitments. It should be noted that, under the terms and conditions of the loans that subsidiary Metrogas has taken with Industrial and Commercial Bank of China Limited—Dubai Branch and Itaú Unibanco—Miami Branch, the debt service coverage ratio would not have been complied with, which could have accelerated the maturities of these financial liabilities. However, on June 30, 2020, financial creditors formally accepted to waive Metrogas contractual obligation to comply with such financial ratio, which should not be lower than 3.00 and be kept not lower than 2.50 as of June 30, 2020.

Should the current conditions continue (see Note 2.c), the Group’s capacity to take further debt might be limited if it exceeds the limits established in any of the financial ratios mentioned above. Additionally, given the current global macroeconomic context, and Argentina’s situation in particular the Group’s funding capacity might be affected.

 

16


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

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2020 AND COMPARATIVE INFORMATION (UNAUDITED)

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5. FINANCIAL RISK MANAGMENT (Cont.)

 

   

Credit risk management

Credit risk is defined as the possibility of a third party not complying with its contractual obligations, generating Group losses.The main considerations are described in Note 2.c.

Moreover, the Group has recorded an impairment charge of credits related to the Decree No. 1053/2018. See Note 35.a.

6. SEGMENT INFORMATION

The different segments in which the Group is organized take into consideration the different activities from which the Group obtains income and incurs expenses. The aforementioned organizational structure is based on the way in which the highest decision-making authority analyzes the main financial and operating magnitudes for making decisions about resource allocation and performance assessment also considering the Group’s business strategy.

 

   

Upstream

The Upstream segment carries out all activities relating to the exploration, development and production of oil and natural gas.

Revenue is generated from (i) the sale of produced crude oil to the Downstream segment and, marginally, from its sale to third parties; (ii) the sale of produced gas to the Gas and Power segment.

 

   

Gas and Power

The Gas and Power segment generates its revenue from the development of activities relating to: (i) the natural gas and LNG transport and commercialization to third parties and the Downstream segment, (ii) the commercial and technical operation of the LNG regasification terminal in Escobar, by hiring one regasification vessel, and (iii) the natural gas distribution.

In addition to the proceeds derived from the sale of natural gas to third parties and the intersegment, which is then recognized as a “purchase” to the Upstream segment, and including Stimulus Plan for Natural Gas production in force (see Note 34.g to the annual consolidated financial statements), Gas and Power accrues a fee in its favor with the Upstream segment to carry out such commercialization.

 

   

Downstream

The Downstream segment develops activities relating to: (i) crude oil refining and petrochemical production, (ii) commercialization of refined and petrochemical products obtained from such processes, (iii) logistics related to the transportation of crude oil and gas to refineries and the transportation and distribution of refined and petrochemical products to be marketed in the different sales channels.

It obtains its income from the marketing mentioned in item (ii) above, which is developed through the Retail, Industry, Aviation, Agro, LPG, Chemicals and Lubricants and Specialties businesses.

It incurs in all expenses relating to the aforementioned activities, including the purchase of crude oil from the Upstream segment and third parties and the natural gas to be consumed in the refinery and petrochemical industrial complexes from the Gas and Power segment.

 

   

Central Administration and Others

It covers other activities, not falling into the aforementioned categories, mainly including corporate administrative expenses and assets and construction activities.

Sales between business segments were made at internal transfer prices established by the Group, which generally seek to approximate market prices.

Operating profit and assets for each segment have been determined after consolidation adjustments.

 

17


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

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2020 AND COMPARATIVE INFORMATION (UNAUDITED)

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6. SEGMENT INFORMATION (Cont.)

 

     Upstream     Gas and Power     Downstream      Central
Administration
and Others
    Consolidation
Adjustments(1)
    Total  
For the six-month period ended June 30, 2020              

Revenues from sales

     1,074       55,476       248,015        6,652       (2,989     308,228  

Revenues from intersegment sales

     133,899       4,094       1,643        11,185       (150,821     —    
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

Revenues

     134,973       59,570       249,658        17,837       (153,810     308,228  
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

Operating profit / (loss)

     (73,128     (9,905     4,319        (10,225     10,293       (78,646

Income from equity interests in associates and joint ventures

     —         2,499       1,221        —         —         3,720  

Depreciation of property, plant and equipment

     67,326 (2)      850       14,715        3,681       —         86,572  

Impairment of property, plant and equipment

     57,296       62       —          71       —         57,429  

Acquisition of property, plant and equipment

     36,296       1,493       7,684        2,317       —         47,790  

Assets

     763,538       200,831       556,344        150,716       5,662       1,677,091  
For the six-month period ended June 30, 2019              

Revenues from sales

     1,152       51,966       232,620        8,109       (2,611     291,236  

Revenues from intersegment sales

     128,452       4,069       1,421        10,502       (144,444     —    
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

Revenues

     129,604       56,035       234,041        18,611       (147,055     291,236  
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

Operating profit / (loss)

     2,549       1,623       14,622        (4,758     3,763       17,799  

Income from equity interests in associates and joint ventures

     —         2,696       818        —         —         3,514  

Depreciation of property, plant and equipment

     51,018 (2)      581       8,758        1,398       —         61,755  

Acquisition of property, plant and equipment

     56,660       2,191       9,547        2,060       —         70,458  
As of December 31, 2019              

Assets

     742,850       199,357       508,026        129,331       (6,275     1,573,289  

 

(1)

Corresponds to the elimination among segments of the YPF Group.

(2)

Includes depreciation of charges for impairment of property, plant and equipment.

 

18


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

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2020 AND COMPARATIVE INFORMATION (UNAUDITED)

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7. FINANCIAL INSTRUMENTS BY CATEGORY

Fair value measurements

Fair value measurements are described in Note 6 to the annual consolidated financial statements.

The tables below show the Group’s financial assets measured at fair value as of June 30, 2020 and December 31, 2019, and their allocation to their fair value levels:

 

     As of June 30, 2020  

Financial Assets

   Level 1      Level 2      Level 3      Total  

Investments in financial assets:

           

- Public securities

     8,119        —          —          8,119  
  

 

 

    

 

 

    

 

 

    

 

 

 
     8,119        —          —          8,119  
  

 

 

    

 

 

    

 

 

    

 

 

 

Cash and cash equivalents:

           

- Mutual funds

     29,786        —          —          29,786  
  

 

 

    

 

 

    

 

 

    

 

 

 
     29,786        —          —          29,786  
  

 

 

    

 

 

    

 

 

    

 

 

 
     37,905        —          —          37,905  
  

 

 

    

 

 

    

 

 

    

 

 

 
     As of December 31, 2019  

Financial Assets

   Level 1      Level 2      Level 3      Total  

Investments in financial assets:

           

- Public securities

     8,370        —          —          8,370  
  

 

 

    

 

 

    

 

 

    

 

 

 
     8,370        —          —          8,370  
  

 

 

    

 

 

    

 

 

    

 

 

 

Cash and cash equivalents:

           

- Mutual funds

     7,038        —          —          7,038  
  

 

 

    

 

 

    

 

 

    

 

 

 
     7,038        —          —          7,038  
  

 

 

    

 

 

    

 

 

    

 

 

 
     15,408        —          —          15,408  
  

 

 

    

 

 

    

 

 

    

 

 

 

The Group has no financial liabilities measured at fair value.

Public securities and public debt restructuring

On April 6, 2020, Decree No. 346/2020 was published in the BO, which deferred payments of interest services and principal of the national public debt instrumented by U.S. dollar-denominated securities issued under the Argentine law until December 31, 2020, or until a previous date established by the Ministry of Economy considering the degree of progress and execution of the public debt sustainability restoration process. This includes the BONAR 2020 currently held by the Group and valued at their fair value with changes in results. Among the exceptions established by such Decree are the “Natural Gas Program Bonds” issued through Joint Resolution No. 21/2019 of the Secretariat of Finance and Secretariat of Treasury, of which the Group is a creditor, which are valued at amortized cost (see Note 36). Later, on July 17, 2020, the Ministry of Economy informed through a press release that it had submitted to the Argentine Congress a Bill to restore sustainability of the external public debt instrumented by US-denominated securities issued under the argentine law.

Additionally, on April 22, 2020, the Argentine Government issued a proposal for restructuring Public Securities issued under foreign law under Decree No. 391/2020, which includes BONAR 2021, currently held by the Group and valued at fair value with changes in results. On the same date, the Argentine Government failed to pay interest coupons due on certain global bonds, among which are BONAR 2021, which are unpaid as of the date of issuance of these condensed interim consolidated financial statements. On May 6, 2020, the Group adhered to the restructuring proposal. Later, on July 6, 2020 and under Decree No. 582/2020, the Argentine Government filed an amendment to the terms and conditions established by Decree No. 391/2020. Finally, the Argentine Government informed that it had reached an agreement with representatives of the Ad Hoc Group of Argentine Bondholders, Argentina’s Creditors Committee and the Exchange Bondholder Group and other holders (see Note 39).

Fair value estimates

From December 31, 2019 until June 30, 2020, there have been significant changes mainly in macroeconomic circumstances (mainly an increase in country risk and a drop in the prices of government securities, among others) affecting the financial instruments measured at fair value by the Group.

Furthermore, during the six-month period ended June 30, 2020, there were no transfers between the different hierarchies used to determine the fair value of the Group’s financial instruments.

 

19


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

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2020 AND COMPARATIVE INFORMATION (UNAUDITED)

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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 NO and interest rates offered to the Group (Level 3) for the other financial loans remaining, amounted to 491,444 and 476,750 as of June 30, 2020 and December 31, 2019, respectively. The fair value of other receivables, trade receivables, cash and cash equivalents, other liabilities and accounts payable do not differ significantly from their book value.

8. INTANGIBLE ASSETS

 

     June 30, 2020      December 31, 2019  

Net book value of intangible assets

     43,351        37,608  

Provision for impairment of intangible assets

     (483      (429
  

 

 

    

 

 

 
     42,868        37,179  
  

 

 

    

 

 

 

The evolution of the Group’s intangible assets for the six-month period ended June 30, 2020 and the year ended December 31, 2019 is as follows:

 

     Service
concessions
     Exploration
rights
    Other
intangibles
     Total  

Cost

     31,702        6,907       14,722        53,331  

Accumulated amortization

     20,110        —         12,819        32,929  
  

 

 

    

 

 

   

 

 

    

 

 

 

Balance as of December 31, 2018

     11,592        6,907       1,903        20,402  
  

 

 

    

 

 

   

 

 

    

 

 

 

Cost

          

Increases

     1,271        4,171 (2)      705        6,147  

Translation effect

     18,969        5,680       7,862        32,511  

Adjustment for inflation(1)

     —          —         833        833  

Decreases and reclassifications

     (6      (103     181        72  

Accumulated amortization

          

Increases

     1,848        —         526        2,374  

Translation effect

     12,332        —         7,475        19,807  

Adjustment for inflation(1)

     —          —         199        199  

Decreases and reclassifications

     —          —         (23      (23

Cost

     51,936        16,655       24,303        92,894  

Accumulated amortization

     34,290        —         20,996        55,286  
  

 

 

    

 

 

   

 

 

    

 

 

 

Balance as of December 31, 2019

     17,646        16,655       3,307        37,608  
  

 

 

    

 

 

   

 

 

    

 

 

 

Cost

          

Increases

     301        —         360        661  

Translation effect

     9,206        2,910       3,798        15,914  

Adjustment for inflation(1)

     —          —         396        396  

Decreases and reclassifications

     (1      (264     318        53  

Accumulated amortization

          

Increases

     1,074        —         335        1,409  

Translation effect

     6,159        —         3,622        9,781  

Adjustment for inflation(1)

     —          —         91        91  

Decreases and reclassifications

     —          —         —          —    

Cost

     61,442        19,301       29,175        109,918  

Accumulated amortization

     41,523        —         25,044        66,567  
  

 

 

    

 

 

   

 

 

    

 

 

 

Balance as of June 30, 2020

     19,919        19,301       4,131        43,351  
  

 

 

    

 

 

   

 

 

    

 

 

 

 

(1)

Corresponds to adjustment for inflation of opening balances of intangible assets in subsidiaries with the Peso as functional currency which was charged to other comprehensive income.

(2)

See Note 3 to the annual consolidated financial statements.

9. PROPERTY, PLANT AND EQUIPMENT

 

     June 30, 2020      December 31, 2019  

Net book value of property, plant and equipment

     1,289,053        1,156,950  

Provision for obsolescence of materials and equipment

     (7,777      (6,610

Provision for impairment of property, plant and equipment

     (136,375      (81,329
  

 

 

    

 

 

 
     1,144,901        1,069,011  
  

 

 

    

 

 

 

 

20


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

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2020 AND COMPARATIVE INFORMATION (UNAUDITED)

   LOGO

9. PROPERTY, PLANT AND EQUIPMENT (Cont.)

 

Changes in Group’s property, plant and equipment for the six-month period ended June 30, 2020 and the year ended December 31, 2019 are as follows:

 

     Land and
buildings
     Mining
property, wells
and related
equipment
    Refinery
equipment
and
petrochemical
plants
    Transportation
equipment
    Materials and
equipment in
warehouse
    Drilling and
work in
progress
    Exploratory
drilling in
progress
    Furniture,
fixtures and
installations
    Selling
equipment
    Infrastructure
for natural gas
distribution
    Other property     Total  

Cost

     48,047        1,604,868       280,451       16,162       34,990       124,381       7,972       24,717       40,998       24,168       31,637       2,238,391  

Accumulated depreciation

     22,114        1,231,930       152,295       10,579       —         —         —         20,707       25,697       12,508       22,458       1,498,288  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance as of December 31, 2018

     25,933        372,938       128,156       5,583       34,990       124,381       7,972       4,010       15,301       11,660       9,179       740,103  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Cost

                         

Increases

     46        1,980 (3)      4,676       83       43,089       114,878       6,532       106       —         865       589       172,844 (4) 

Translation effect

     24,838        967,212       171,788       8,723       21,044       70,818       5,014       14,289       25,116       —         13,581       1,322,423  

Adjustment for inflation(6)

     3,382        —         —         716       920       1,326       —         828       —         13,010       4,793       24,975  

Decreases and reclassifications

     880        114,493       15,715       1,358       (37,620     (116,818     (8,132     1,077       4,021       6,600       (3,894     (22,320

Accumulated depreciation

                         

Increases

     1,260        137,017 (3)      16,092       1,345       —         —         —         2,536       2,765       989       1,325       163,329  

Translation effect

     11,444        758,928       93,611       5,917       —         —         —         11,935       15,822       —         9,862       907,519  

Adjustment for inflation (6)

     1,726        —         —         486       —         —         —         773       —         6,733       3,270       12,988  

Decreases and reclassifications

     9        (2,287     (33     (376     —         —         —         (834     (13     3,647       (2,874     (2,761

Cost

     77,193        2,688,553       472,630       27,042       62,423       194,585       11,386       41,017       70,135       44,643       46,706       3,736,313  

Accumulated depreciation

     36,553        2,125,588       261,965       17,951       —         —         —         35,117       44,271       23,877       34,041       2,579,363  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance as of December 31, 2019

     40,640        562,965 (1)      210,665       9,091       62,423       194,585       11,386       5,900       25,864       20,766       12,665       1,156,950  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Cost

                         

Increases

     1        448       202       7       15,899       29,390       68       101       —         1,587       87       47,790 (5) 

Translation effect

     11,907        479,938       84,202       4,372       10,667       29,051       1,633       7,332       13,172       —         6,552       648,826  

Adjustment for inflation (6)

     1,288        —         —         323       158       963       —         192       —         6,067       1,248       10,239  

Decreases and reclassifications

     905        44,692       5,393       459       (12,362     (52,308     (2,688     2,703       2,828       (72     47       (10,403 )(7) 

Accumulated depreciation

                         

Increases

     1,015        83,710       11,598       778       —         —         —         1,601       1,935       586       732       101,955  

Translation effect

     5,639        383,484       47,369       2,969       —         —         —         6,101       7,999       —         4,826       458,387  

Adjustment for inflation (6)

     644        —         —         188       —         —         —         175       —         3,245       920       5,172  

Decreases and reclassifications

     —          (1,074     —         (34     —         —         —         (3     (1     (48     (5     (1,165 )(7) 

Cost

     91,294        3,213,631       562,427       32,203       76,785       201,681       10,399       51,345       86,135       52,225       54,640       4,432,765  

Accumulated depreciation

     43,851        2,591,708       320,932       21,852       —         —         —         42,991       54,204       27,660       40,514       3,143,712  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance as of June 30, 2020

     47,443        621,923 (1)      241,495       10,351       76,785       201,681       10,399 (2)      8,354       31,931       24,565       14,126       1,289,053  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(1)

Includes 24,365 and 22,343 of mineral property as of June 30, 2020 and December 31, 2019 respectively.

(2)

As of June 30, 2020, there are 17 exploratory wells in progress. During the six-month period ended on such date, 7 wells were transferred to properties with proven reserves in the mining property, wells and related equipment account.

(3)

Includes 1,172 corresponding to hydrocarbon wells abandonment costs and 4,664 of depreciation recovery for the year ended December 31, 2019.

(4)

Includes 2,109 and 1,228 corresponding to short-term leases and the variable charge of leases related to the underlying asset return/use, respectively. Additionally, it includes 2,021 and 311 corresponding to the depreciation capitalization of right-of-use assets (see Note 10) and to capitalization of the financial accretion of the lease liability, respectively.

(5)

Includes 577 and 714 corresponding to short-term leases and the variable charge of leases related to the underlying asset return/use, respectively. Additionally, it includes 1,796 and 452 corresponding to the depreciation capitalization of right-of-use assets (see Note 10) and to capitalization of the financial accretion of the lease liability, respectively.

(6)

Corresponds to adjustments for inflation of opening balances of property, plant and equipment of subsidiaries with the Peso as functional currency which was charged to other comprehensive income.

(7)

Includes 2,027 and 204 of cost and accumulated depreciation, respectively, corresponding to the disposal of the 11% interest of Bandurria Sur area. See Note 4.

 

21


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

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2020 AND COMPARATIVE INFORMATION (UNAUDITED)

   LOGO

9. PROPERTY, PLANT AND EQUIPMENT (Cont.)

 

The Group capitalizes the financial cost as part of the cost of the assets. For the six-month period ended June 30, 2020 and 2019, the rate of capitalization was 10.16% and 10.40%, respectively, and the amount capitalized amounted to 423 and 449, respectively, for the period mentioned above.

Set forth below is the evolution of the provision for obsolescence of materials and equipment for the six-month period ended on June 30, 2020 and for the year ended December 31, 2019:

 

     Provision for
obsolescence of
materials and
equipment
 

Balance as of December 31, 2018

     3,955  

Increase charged to profit / (loss)

     410  

Decreases charged to profit / (loss)

     (22

Amounts incurred due to utilization

     (48

Translation differences

     2,315  
  

 

 

 

Balance as of December 31, 2019

     6,610  
  

 

 

 

Increase charged to profit / (loss)

     6  

Decreases charged to profit / (loss)

     (1

Amounts incurred due to utilization

     (2

Translation differences

     1,164  
  

 

 

 

Balance as of June 30, 2020

     7,777  
  

 

 

 

Set forth below is the evolution of the provision for impairment of property, plant and equipment for the six-month period ended on June 30, 2020 and for the year ended December 31, 2019:

 

     Provision for
impairment of
property, plant and
equipment
 

Balance as of December 31, 2018

     37,061  

Increase charged to profit / (loss)

     41,429 (1) 

Depreciation

     (17,435

Translation differences

     20,274  
  

 

 

 

Balance as of December 31, 2019

     81,329  
  

 

 

 

Increase charged to profit / (loss)

     57,429 (3) 

Depreciation

     (15,383 )(2) 

Translation differences

     13,000  
  

 

 

 

Balance as of June 30, 2020

     136,375  
  

 

 

 

 

(1)

See Note 2.c to the annual consolidated financial statements.

(2)

Included in “Depreciation of property, plant and equipment” in Note 26.

(3)

See Note 2.c.

 

22


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

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2020 AND COMPARATIVE INFORMATION (UNAUDITED)

   LOGO

 

10. RIGHT-OF-USE ASSETS

The evolution of the Group’s right-of-use assets for the six-month period ended June 30, 2020 and for the fiscal year ended December 31, 2019 are as follows:

 

     Land and
buildings
     Exploitation
facilities and
equipment
    Machinery
and
equipment
    Gas stations     Transportation
equipment
    Total  

Balance for initial application of IFRS 16

     450        6,732       8,612       3,356       3,909       23,059  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Cost

             

Increases

     266        13,129       19,429       163       6,792       39,779  

Translation differences

     310        4,587       6,189       1,687       2,545       15,318  

Adjustment for inflation(3)

     —          —         —         275       —         275  

Decreases and reclassifications

     —          (1,162     (1,264     (58     (64     (2,548

Accumulated depreciation

             

Increases

     208        6,051       3,174       667       2,430       12,530 (1) 

Translation differences

     45        1,138       850       117       619       2,769  

Decreases and reclassifications

     —          (507     (283     (7     (10     (807

Cost

     1,026        23,286       32,966       5,423       13,182       75,883  

Accumulated depreciation

     253        6,682       3,741       777       3,039       14,492  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance as of December 31, 2019

     773        16,604       29,225       4,646       10,143       61,391  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Cost

             

Increases

     8        1,989       2,175       97       33       4,302  

Translation differences

     178        4,267       5,844       808       2,346       13,443  

Adjustment for inflation(3)

     3        —         —         114       —         117  

Decreases and reclassifications

     —          (3,072     (1,710     —         —         (4,782

Accumulated depreciation

             

Increases

     154        3,673       3,144       434       3,070       10,475 (2) 

Translation differences

     56        1,547       990       135       838       3,566  

Adjustment for inflation(3)

     2        —         —         25       —         27  

Decreases and reclassifications

     —          (1,422     (505     —         —         (1,927

Cost

     1,215        26,470       39,275       6,442       15,561       88,963  

Accumulated depreciation

     465        10,480       7,370       1,371       6,947       26,633  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance as of June 30, 2020

     750        15,990       31,905       5,071       8,614       62,330  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(1)

Includes 10,509 that were charged to “Depreciation of right-of-use assets” in the comprehensive statement of income (see Note 25 to the annual consolidated financial statements) and 2,021 that were capitalized in the item “Property, plant and equipment” in the statement of financial position (see Note 9).

(2)

Includes 8,679 that were charged to “Depreciation of right-of-use assets” in the comprehensive statement of income (see Note 26) and 1,796 that were capitalized in the item “Property, plant and equipment” in the statement of financial position (see Note 9).

(3)

Corresponds to adjustments for inflation of opening balances of right-of-use assets of subsidiaries with the Peso as functional currency which was charged to other comprehensive income.

 

23


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

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2020 AND COMPARATIVE INFORMATION (UNAUDITED)

   LOGO

 

11. INVESTMENTS IN ASSOCIATES AND JOINT VENTURES

The following table shows the value of the investments in associates and joint ventures at an aggregate level, as of June 30, 2020 and December 31, 2019:

 

     June 30,
2020
     December 31,
2019
 

Amount of investments in associates

     7,445        6,419  

Amount of investments in joint ventures

     73,757        61,183  

Provision for impairment of investments in associates and joint ventures

     (12      (12
  

 

 

    

 

 

 
     81,190        67,590  
  

 

 

    

 

 

 

The main movements during the six-month period ended June 30, 2020 and for the year ended December 31, 2019 which affected the value of the aforementioned investments, correspond to:

 

     Investments in
associates and joint
ventures
 

Balance as of December 31, 2018

     32,686  

Acquisitions and contributions

     4,826  

Income on investments in associates and joint ventures

     7,968  

Translation differences

     20,673  

Distributed dividends

     (811

Adjustment for inflation(1)

     1,510  

Capitalization in joint ventures

     738  
  

 

 

 

Balance as of December 31, 2019

     67,590  
  

 

 

 

Income on investments in associates and joint ventures

     3,720  

Translation differences

     10,886  

Distributed dividends

     (2,096

Adjustment for inflation(1)

     1,090  
  

 

 

 

Balance as of June 30, 2020

     81,190  
  

 

 

 

 

(1)

Corresponds to the recognition of the result for the net monetary position of associates and joint ventures with the Peso as functional currency, which was charged to other comprehensive income, as detailed in Note 2.b.1 to the annual consolidated financial statements.

 

24


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

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2020 AND COMPARATIVE INFORMATION (UNAUDITED)

   LOGO

11. INVESTMENTS IN ASSOCIATES AND JOINT VENTURES (Cont.)

 

The following table shows the principal amounts of the results of the investments in associates and joint ventures of the Group, calculated according to the equity method therein, for the six-month period ended June 30, 2020 and 2019. The Group has adjusted, if applicable, the values reported by these companies to adapt them to the accounting criteria used by the Group for the calculation of the equity method value in the aforementioned dates:

 

     Associates      Joint ventures  
\    For the six-month period
ended June 30,
     For the six-month period
ended June 30,
 
     2020      2019      2020      2019  

Net income

     467        698        3,253        2,816  

Other comprehensive income

     1,143        939        10,833        3,839  
  

 

 

    

 

 

    

 

 

    

 

 

 

Comprehensive income for the period

     1,610        1,637        14,086        6,655  
  

 

 

    

 

 

    

 

 

    

 

 

 

The Group does not have investments in subsidiaries with significant non-controlling interests. Likewise, the Group does not have investments in associates and joint ventures that are significant, with the exception of the investment in YPF EE.

The management information corresponding to YPF EE’s assets and liabilities as of June 30, 2020 and December 31, 2019, as well as the results for the six-month period ended June 30, 2020 and 2019, are detailed below:

 

     June 30,
2020(1)
     December 31,
2019(1)
 

Noncurrent assets

     119,274        96,219  

Current assets

     28,294        26,622  
  

 

 

    

 

 

 

Total assets

     147,568        122,841  
  

 

 

    

 

 

 

Noncurrent liabilities

     62,690        57,799  

Current liabilities

     28,919        19,503  
  

 

 

    

 

 

 

Total liabilities

     91,609        77,302  
  

 

 

    

 

 

 

Total shareholders’ equity

     55,959        45,539  
  

 

 

    

 

 

 
     For the six-month period ended
June 30,
 
     2020(1)      2019(1)  

Revenues

     9,164        6,567  

Costs

     (4,217      (2,866
  

 

 

    

 

 

 

Gross profit

     4,947        3,701  
  

 

 

    

 

 

 

Operating profit

     4,088        3,175  

Income from equity interests in associates and joint ventures

     64        248  

Net financial results

     (312      (768
  

 

 

    

 

 

 

Net profit before income tax

     3,840        2,655  
  

 

 

    

 

 

 

Income tax

     (1,440      (445
  

 

 

    

 

 

 

Net profit

     2,400        2,210  
  

 

 

    

 

 

 

 

(1)

On this information, accounting adjustments have been made for the calculation of equity interest and results of YPF EE. The equity and adjusted results do not differ significantly from the YPF EE financial information disclosed here.

 

25


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

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2020 AND COMPARATIVE INFORMATION (UNAUDITED)

   LOGO

11. INVESTMENTS IN ASSOCIATES AND JOINT VENTURES (Cont.)

 

The following table shows information of the subsidiaries:

 

         

Information of the issuer

 
    Description of the Securities             Last available financial statements        

Name and Issuer

  Class     Face Value     Amount    

Main Business

 

Registered Address

  Date     Capital
stock
    Net profit
(loss)
    Equity     Holding in
Capital Stock
 

Subsidiaries:(7)

                     

YPF International S.A.(6)

    Common       Bs.       100       66,897     Investment   La Plata Street 19, Santa Cruz de la Sierra, República de Bolivia     06-30-20       15       —         91       100.00

YPF Holdings Inc.(6)

    Common     US$         0.01       810,614     Investment and finance   10333 Richmond Avenue I, Suite 1050, TX, U.S.A.     06-30-20       57,028       (3     (15,122     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     06-30-20       164       (562     4,312       99.99

A-Evangelista S.A.

    Common       $ 1       306,818,702     Engineering and construction services   Macacha Güemes 515, Buenos Aires, Argentina     06-30-20       307       (1,868     (2,655     100.00

Metrogas S.A.

    Common       $ 1       398,419,700     Providing the public service of natural gas distribution   Gregorio Aráoz de Lamadrid 1360, Buenos Aires, Argentina.     06-30-20       569       (1,702     15,645       70.00

YPF Chile S.A.(6)

    Common       —         —         50,968,649     Lubricants and aviation fuels trading and hydrocarbons research and exploration   Villarica 322; Módulo B1, Qilicura, Santiago     06-30-20       3,213       (248     2,314       100.00

YPF Tecnología S.A.

    Common       $ 1       234,291,000     Investigation, development, production and marketing of technologies, knowledge, goods and services   Macacha Güemes 515, Buenos Aires, Argentina     06-30-20       459       78       3,151       51.00

Compañía de Inversiones Mineras S.A.

    Common       $ 1       236,474,420     Exploration, exploitation, processing, management, storage and transport of all types of minerals; assembly, construction and operation of facilities and structures and processing of products related to mining   Macacha Güemes 515, Buenos Aires, Argentina     06-30-20       236       (77     8       100.00

 

26


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

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2020 AND COMPARATIVE INFORMATION (UNAUDITED)

   LOGO

11. INVESTMENTS IN ASSOCIATES AND JOINT VENTURES (Cont.)

 

The following table shows the investments in associates and joint ventures:

 

    06-30-2020     12-31-2019  
                      Information of the issuer         
    Description of the Securities                         Last available financial
statements
             

Name and Issuer

  Class     Face Value     Amount     Book value (2)     Cost (1)    

Main Business

 

Registered Address

  Date     Capital
stock
    Net profit
(loss)
    Equity     Holding in
Capital Stock
    Book Value (2)  

Joint Ventures(5):

                         

YPF Energía Eléctrica S.A.(6)

    Common     $ 1       1,879,916,921       42,790       1,085     Exploration, exploitation, industrialization and marketing of hydrocarbons and generation, transport and marketing of electric energy   Macacha Güemes 515, Buenos Aires, Argentina     06-30-20       3,747       2,400       55,959       75.00     35,382  

Compañía Mega S.A.(6)

    Common     $ 1       244,246,140       6,048       —       Separation, fractionation and transportation of natural gas liquids   San Martín 344, P. 10º, Buenos Aires, Argentina     06-30-20       643       (22     15,848       38.00     5,211  

Profertil S.A.(6)

    Common     $ 1       391,291,320       12,373       —       Production and marketing of fertilizers   Alicia Moreau de Justo 740, P. 3, Buenos Aires, Argentina     03-31-20       783       726       27,645       50.00     10,778  

Refinería del Norte S.A.

    Common     $ 1       45,803,655       1,892       —       Refining   Maipú 1, P. 2º, Buenos Aires, Argentina     03-31-20       92       (621     3,861       50.00     1,881  

Oleoducto Loma Campana-Lago Pellegrini S.A. (6)

    Common     $ 1       738,139,164       837       738     Construction and exploitation of a pipeline, oil transport and storage, import, export, purchase and sale of raw materials, industrial equipment and machinery   Macacha Güemes 515, Buenos Aires, Argentina     06-30-20       868       (136     887       85.00     762  

CT Barragán S.A.(6)

    Common     $ 1       4,279,033,952       9,365       4,348     Production and generation of electric energy   Maipú 1, Buenos Aires, Argentina     06-30-20       8,558       2,589       18,755       50.00     6,799  
       

 

 

   

 

 

                 

 

 

 
          73,305       6,171                     60,813  
       

 

 

   

 

 

                 

 

 

 
                         

Associates:

                         

Oleoductos del Valle S.A.

    Common     $ 10       4,072,749       2,223       —       Oil transportation by pipeline   Florida 1, P. 10º, Buenos Aires, Argentina     03-31-20       110       535       5,632       37.00     1,778  

Terminales Marítimas Patagónicas S.A.

    Common     $ 10       476,034       1,030       —       Oil storage and shipment   Av. Leandro N. Alem 1180, P. 11º, Buenos Aires, Argentina     03-31-20       14       62       2,745       33.15     711  

Oiltanking Ebytem S.A.(6)

    Common     $ 10       351,167       796       —       Hydrocarbon transportation and storage   Terminal Marítima Puerto Rosales – Province of Buenos Aires, Argentina.     06-30-20       12       303       2,481       30.00     871  

Central Dock Sud S.A.

    Common     $ 0.01       11,869,095,145       1,586       —       Electric power generation and bulk marketing   Pasaje Ingeniero Butty 220, P.16°, Buenos Aires, Argentina     06-30-20       1,231       173       16,201       10.25 (4)      1,542  

YPF Gas S.A.

    Common     $ 1       59,821,434       1,156       —       Gas fractionation, bottling, distribution and transport for industrial and/or residential use   Macacha Güemes 515, P.3º, Buenos Aires, Argentina     03-31-20       176       162       5,066       33.99     965  

Other companies:

                         

Other (3)

    —         —         —         1,106       648     —     —       —         —         —         —         —         922  
       

 

 

   

 

 

                 

 

 

 
          7,897       648                     6,789  
       

 

 

   

 

 

                 

 

 

 
          81,202       6,819                     67,602  
       

 

 

   

 

 

                 

 

 

 

 

(1)

Corresponds to cost and contributions, net of dividends collected and capital reductions.

(2)

Corresponds to holding in shareholders’ equity plus adjustments to conform to YPF accounting principles.

(3)

Includes Gasoducto del Pacífico (Argentina) S.A., A&C Pipeline Holding Company, Oleoducto Transandino (Chile) S.A., Oleoducto Trasandino (Argentina) S.A., Bizoy S.A., Civeny S.A., Bioceres S.A., Petrofaro S.A. and Sustentator S.A.

(4)

Additionally, the Group has a 22.49% indirect holding in capital stock through YPF EE.

(5)

As stipulated by shareholders’ agreement, joint control is held in this company by shareholders.

(6)

The U.S. dollar has been defined as the functional currency of this company.

(7)

Additionally, consolidates YPF Services USA Corp., YPF Europe B.V., YPF Brasil Comércio Derivado de Petróleo Ltda, Wokler Investment S.A., YPF Colombia S.A.S., Miwen S.A., Eleran Inversiones 2011 S.A.U., Lestery S.A., Energía Andina S.A and YPF Ventures S.A.U.

 

27


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

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2020 AND COMPARATIVE INFORMATION (UNAUDITED)

   LOGO

 

12. INVENTORIES

 

     June 30,
2020
    December 31,
2019
 

Refined products

     63,492       50,563  

Crude oil and natural gas

     31,718       24,756  

Products in process

     2,687       2,259  

Raw materials, packaging materials and others

     3,387       2,901  
  

 

 

   

 

 

 
     101,284  (1)      80,479  (1) 
  

 

 

   

 

 

 

 

(1)

As of June 30, 2020, and December 31, 2019, the cost of inventories does not exceed their net realizable value.

13. OTHER RECEIVABLES

 

     June 30, 2020      December 31, 2019  
     Noncurrent      Current      Noncurrent      Current  

Receivables from services rendered

     457        1,823        455        2,706  

Tax credit and export rebates

     8,435        6,864        6,896        6,076  

Loans to third parties and balances with related parties (1)

     690        823        2,435        3,288  

Collateral deposits

     2        682        2        640  

Prepaid expenses

     769        3,959        603        2,370  

Advances and loans to employees

     26        463        29        596  

Advances to suppliers and custom agents (2)

     —          10,851        —          10,896  

Receivables with partners in JO

     1,989        2,671        2,248        7,932  

Insurance receivables

     —          2,788        —          498  

Miscellaneous

     14        1,688        45        1,255  
  

 

 

    

 

 

    

 

 

    

 

 

 
     12,382        32,612        12,713        36,257  

Provision for other doubtful receivables

     (1,077      (69      (924      (65
  

 

 

    

 

 

    

 

 

    

 

 

 
     11,305        32,543        11,789        36,192  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

(1)

See Note 36 for 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.

14. TRADE RECEIVABLES

 

     June 30, 2020      December 31, 2019  
     Noncurrent      Current      Noncurrent      Current  

Accounts receivable and related parties(1)(2)

     7,486        115,040        15,325        124,657  

Provision for doubtful trade receivables

     (2,228      (14,062      —          (6,580
  

 

 

    

 

 

    

 

 

    

 

 

 
     5,258        100,978        15,325        118,077  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

(1)

See Note 36 for information about related parties.

(2)

See Note 24 for information about credits for contracts included in trade receivables.

Set forth below is the evolution of the provision for doubtful trade receivables for six-month period ended on June 30, 2020 and for the year ended December 31, 2019:

 

     Provision for doubtful
trade receivables
 
     Noncurrent     Current  

Balance as of December 31, 2018

     —         2,776  
  

 

 

   

 

 

 

Increases charged to expenses

     —         3,891  

Decreases charged to income

     —         (707

Amounts incurred due to utilization

     —         (112

Translation differences

     —         847  

Result from net monetary position(1)

     —         (103

Other movements

     —         (12
  

 

 

   

 

 

 

Balance as of December 31, 2019

     —         6,580  
  

 

 

   

 

 

 

Increases charged to expenses

     2,228 (2)      7,766 (2) 

Decreases charged to income

     —         (582

Translation differences

     —         323  

Result from net monetary position(1)

     —         (25
  

 

 

   

 

 

 

Balance as of June 30, 2020

     2,228       14,062  
  

 

 

   

 

 

 

 

(1)

Includes adjustment for inflation of opening balances of the provision for doubtful trade receivables in subsidiaries with the Peso as functional currency which was charged to other comprehensive income and the adjustment for inflation of the fiscal year, which was charged to results.

(2)

Includes 7,961 corresponding to credits with natural gas distributors for the accumulated daily differences pursuant to Decree No. 1053/2018. See Note 35.a.

 

28


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

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2020 AND COMPARATIVE INFORMATION (UNAUDITED)

   LOGO

 

15. CASH AND CASH EQUIVALENTS

 

     June 30, 2020      December 31, 2019  

Cash and banks

     5,865        6,983  

Short-term investments(1)

     47,890        52,079  

Financial assets at fair value with changes in results(2)

     29,786        7,038  
  

 

 

    

 

 

 
     83,541        66,100  
  

 

 

    

 

 

 

 

(1)

Includes 13,115 and 10,043 of term deposits and other investments with the BNA as of June 30, 2020 and December 31, 2019, respectively.

(2)

See Note 7.

16. PROVISIONS

Changes in the Group’s provisions for the six-month period ended June 30, 2020 and for the fiscal year ended December 31, 2019 are as follows:

 

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

Balance as of December 31, 2018

     21,235       1,123       3,720       1,622       58,433       1,784       83,388       4,529  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Increases charged to expenses

     18,460 (2)      9       1,695       —         7,409       —         27,564       9  

Decreases charged to income

     (2,358     (744     (63     —         (2,950     —         (5,371     (744

Amounts incurred due to payments/utilization

     (73     (194     —         (1,821     —         (2,774     (73     (4,789

Net exchange and translation differences

     7,405       443       479       106       35,219       1,079       43,103       1,628  

Result from net monetary position(4)

     (92     —         —         —         —         —         (92     —    

Reclassifications and other movements

     (744     648       (2,003     2,003       (1,004 )(1)      2,176 (1)      (3,751     4,827  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance as of December 31, 2019

     43,833       1,285       3,828       1,910       97,107       2,265       144,768       5,460  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Increases charged to expenses

     2,475 (3)      138       1,311       —         5,083       —         8,869       138  

Decreases charged to income

     (661     (338     (46     —         —         —         (707     (338

Amounts incurred due to payments/utilization

     (18     (14     —         (606     —         (1,001     (18     (1,621

Net exchange and translation differences

     3,935       212       237       6       17,502       400       21,674       618  

Result from net monetary position(4)

     (12     —         —         —         —         —         (12     —    

Reclassifications and other movements

     (121     344       (648     648       (1,001     1,001       (1,770     1,993  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance as of June 30, 2020

     49,431       1,627       4,682       1,958       118,691       2,665       172,804       6,250  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(1)

Includes 1,172 corresponding to the recalculation of abandonment of hydrocarbon wells cost for the year ended December 31, 2019.

(2)

Includes 10,572 corresponding to the recognition of the dispute relating to the tax deduction of well abandonment costs for periods 2011-2017 plus the accrual of financial interest since March 31, 2019, date on which the Company decided to adhere to the payment facility plan.

(3)

Includes the accrual of financial interest of the dispute relating to the tax deduction of well abandonment costs for periods 2011-2017.

(4)

Includes adjustment for inflation of opening balances of provisions in subsidiaries with the Peso as functional currency which was charged to other comprehensive income and the adjustment for inflation of the period, which was charged to results.

Provisions for lawsuits, claims and environmental liabilities are described in Note 15 to the annual consolidated financial statements. No significant new provisions have been identified over the six-month period ended on June 30, 2020, nor have there been any changes in the evaluation of the affairs prevailing as of December 31, 2019.

 

29


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

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2020 AND COMPARATIVE INFORMATION (UNAUDITED)

   LOGO

 

17. 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 at the end of the fiscal year. The amounts calculated for income tax expense for the six-month period ended June 30, 2020 may need to be adjusted in the subsequent period in case the projected effective tax rate estimate is modified based on new elements of judgment.

The calculation of the income tax expense accrued for the six-month period ended June 30, 2020 and 2019 is as follows:

 

     For the six-month period
ended June 30,
 
     2020      2019  

Current income tax

     (623      (812

Deferred income tax

     2,261        (3,761 )(1) 
  

 

 

    

 

 

 

Subtotal

     1,638        (4,573
  

 

 

    

 

 

 

Income tax – Well abandonment

     —          (16,239 )(2) 

Special tax – Tax revaluation, Law No. 27,430

     —          (4,562 )(3) 
  

 

 

    

 

 

 
     1,638        (25,374
  

 

 

    

 

 

 

 

(1)

Includes (5,175) corresponding to the reversal of tax loss carryforwards related to the dispute relating to cost deduction for wells abandonment.

(2)

Includes (10,610) corresponding to interest related to the dispute relating to cost deduction for wells abandonment determined on the date the Company decided to adhere to the payment facility plan. See Note15 to the annual consolidated financial statements.

(3)

See Note 34.j to the annual consolidated financial statements.

The reconciliation between the charge to net income for income tax for the six-month period ended June 30, 2020 and 2019 and the one that would result from applying the prevailing tax rate on net income before income tax arising from the condensed interim consolidated statements of comprehensive income for each period is as follows:

 

     For the six-month period
ended June 30,
 
     2020     2019  

Net income before income tax

     (80,335     14,894  

Statutory tax rate

     30     30
  

 

 

   

 

 

 

Statutory tax rate applied to net income before income tax

     24,101       (4,468

Effect of the valuation of property, plant and equipment and intangible assets, net

     (24,350     3,238  

Effect of exchange differences and other results associated to the valuation of the currency, net(1)

     2,325       600  

Effect of the valuation of inventories

     (2,694     (3,372

Income on investments in associates and joint ventures

     1,116       1,054  

Effect of tax rate change(2)

     (3,800     1,574  

Dispute associated to cost deduction for wells abandonment

     —         (5,175

Miscellaneous

     4,940       1,976  
  

 

 

   

 

 

 

Income tax

     1,638       (4,573
  

 

 

   

 

 

 

 

 

(1)

Includes the effect of tax inflation.

(2)

Corresponds to the remediation of deferred income tax at the current rate. See Notes 2.b.15 and 34.j to the annual consolidated financial statements.

The Group has classified 1,344 as current income tax payable, which mainly include 917 corresponding to the 12 installments related to the payment facility plan (see Note 15 to the annual consolidated financial statements). Also, the Group has classified 2,917 as non-current income tax payable, which mainly include 2,905 corresponding to the 38 installments related to the mentioned plan.

 

30


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

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2020 AND COMPARATIVE INFORMATION (UNAUDITED)

   LOGO

17. INCOME TAX (Cont.)

 

Breakdown of deferred tax as of June 30, 2020 and December 31, 2019 is as follows:

 

     June 30,
2020
    December 31,
2019
 

Deferred tax assets

    

Provisions and other non-deductible liabilities

     9,690       5,344  

Tax losses carryforward

     67,170       52,443  

Miscellaneous

     1,186       937  
  

 

 

   

 

 

 

Total deferred tax assets

     78,046       58,724  
  

 

 

   

 

 

 

Deferred tax liabilities

    

Property, plant and equipment

     (109,625     (110,704

Adjustment for tax inflation

     (52,038     (38,177

Miscellaneous

     (10,345     (5,491
  

 

 

   

 

 

 

Total deferred tax liabilities

     (172,008     (154,372
  

 

 

   

 

 

 

Total Net deferred tax

     (93,962 )(1)      (95,648 )(1) 
  

 

 

   

 

 

 

 

(1)

Includes (739) and (1,523) as of June 30, 2020 and December 31, 2019, respectively, corresponding to adjustment for inflation of the opening deferred liability of subsidiaries with the Peso as functional currency with effect in other comprehensive income and the adjustment for inflation of the period, which was charged to results.

As of June 30, 2020 and December 31, 2019, there are no significant deferred tax assets which are not recognized.

As of June 30, 2020 and December 31, 2019, the Group has classified as deferred tax assets 2,332 and 1,583, respectively, and as deferred tax liability 96,294 and 97,231, respectively, all of which arise from the net deferred tax balances of each of the separate companies included in these condensed interim consolidated financial statements.

As of June 30, 2020 and December 31, 2019, the causes that generate charges to other comprehensive income, did not create temporary differences for income tax.

18. TAXES PAYABLE

 

     June 30, 2020      December 31, 2019  
     Non
current
     Current      Non
current
     Current  

VAT

     —          663        —          3,532  

Withholdings and perceptions

     —          1,305        —          2,070  

Royalties

     —          2,382        —          1,268  

Tax on Fuels

     —          4,965        —          635  

IIBB

     —          506        —          512  

Miscellaneous

     239        4,030        1,428        3,420  
  

 

 

    

 

 

    

 

 

    

 

 

 
     239        13,851        1,428        11,437  
  

 

 

    

 

 

    

 

 

    

 

 

 

19. SALARIES AND SOCIAL SECURITY

 

     June 30, 2020      December 31, 2019  

Salaries and social security

     2,782        2,976  

Bonuses and incentives provision

     2,283        3,468  

Vacation provision

     4,044        3,610  

Miscellaneous

     191        150  
  

 

 

    

 

 

 
     9,300        10,204  
  

 

 

    

 

 

 

 

31


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

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2020 AND COMPARATIVE INFORMATION (UNAUDITED)

   LOGO

 

20. LEASE LIABILITIES

As of June 30, 2020, the Group recorded non-current and current lease liabilities in the amount of 41,511 and 24,925, respectively.

The evolution of the Group’s leases liabilities for the six-month period ended June 30, 2020 and for the fiscal year ended December 31, 2019, are as follows:

 

     Lease liabilities  

Balances for initial application of IFRS 16

     23,059  
  

 

 

 

Leases increase

     39,779  

Financial accretion

     2,885  

Leases decrease

     (1,741

Payments

     (15,208

Exchange and translation differences, net

     12,999  

Result from net monetary position(1)

     7  
  

 

 

 

Balance as of December 31, 2019

     61,780  
  

 

 

 

Increase due to new contracts

     4,302  

Financial accretion

     3,062  

Leases decrease

     (2,911

Payments

     (10,059

Exchange and translation differences, net

     10,262  
  

 

 

 

Balance as of June 30, 2020

     66,436  
  

 

 

 

 

(1)

Includes adjustment for inflation of opening balances of lease liabilities in subsidiaries with the Peso as functional currency which was charged to other comprehensive income and the adjustment for inflation of the period, which was charged to results.

21. LOANS

 

     Interest rate (1)      Maturity      June 30, 2020      December 31, 2019  
                   Noncurrent      Current      Noncurrent      Current  

Pesos:

                 

Negotiable obligations(4)

     16.50% - 35.16%      2020-2024        12,274        31,987        8,619        27,481  

Export pre-financing

     37.00%        2020        —          2,784        —          —    

Loans

     23.74% - 50.89%        2020-2024        4,276        9,885        —          3,687  

Account overdraft

     31.50% - 36.00%        2020        —          1,691        —          2,103  
        

 

 

    

 

 

    

 

 

    

 

 

 
           16,550        46,347        8,619        33,271  
        

 

 

    

 

 

    

 

 

    

 

 

 

Currencies other than the Peso:

                 

Negotiable obligations(2)(3)

     0.00% - 10.00%        2020-2047        384,283        84,049        375,560        13,279  

Export pre-financing(5)

     3.98% - 8.49%        2020-2022        10,554        29,152        10,762        33,100  

Imports financing

     5.71% - 8.38%        2020        —          5,589        —          17,876  

Loans

     3.09% - 7.75%        2020-2026        4,189        30,687        24,710        9,583  
        

 

 

    

 

 

    

 

 

    

 

 

 
           399,026        149,477        411,032        73,838  
        

 

 

    

 

 

    

 

 

    

 

 

 
           415,576        195,824        419,651        107,109  
        

 

 

    

 

 

    

 

 

    

 

 

 

 

(1)

Nominal annual interest rate as of June 30, 2020.

(2)

Disclosed net of 67 and 326 corresponding to YPF’s own NO repurchased through open market transactions, as of June 30, 2020 and December 31, 2019, respectively.

(3)

Includes 15,011 and 4,643 as of June 30, 2020 and December 31, 2019, respectively, of nominal value of NO that will be canceled in pesos at the applicable exchange rate in accordance with the terms of the series issued.

(4)

Includes 15,850 as of June 30, 2020 and December 31, 2019, of nominal value of NO that will be canceled in U.S. dollars at the applicable exchange rate according to the conditions of the issued series.

(5)

Includes pre-financing of exports granted by BNA. As of June 30, 2020, it includes 1,583 which accrue a 7.50% weighted average rate. As of December 31, 2019, it includes 4,933, which accrue a 6.89% weighted average rate.

Set forth below is the evolution of the loans for six-month period ended on June 30, 2020 and for the year ended December 31, 2019:

 

     Loans  

Balance as of December 31, 2018

     335,078  

Proceed from loans

     97,351  

Payments of loans

     (93,456

Payments of interest

     (41,606

Accrued interest(1)

     44,570  

Net exchange differences and translation

     185,420  

Result from net monetary position(2)

     (597
  

 

 

 

Balance as of December 31, 2019

     526,760  
  

 

 

 

Proceed from loans

     81,588  

Payments of loans

     (79,057

Payments of interest

     (29,587

Accrued interest(1)

     28,550  

Net exchange differences and translation

     83,190  

Result from net monetary position(2)

     (44
  

 

 

 

Balance as of June 30, 2020

     611,400  
  

 

 

 

 

(1)

Includes capitalized financial costs.

(2)

Includes adjustment for inflation of opening balances of loans in subsidiaries with the Peso as functional currency which was charged to other comprehensive income and the adjustment for inflation of the fiscal year, which was charged to results.

 

32


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

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2020 AND COMPARATIVE INFORMATION (UNAUDITED)

   LOGO

21. LOANS (Cont.)

 

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

 

                                        June 30, 2020     December 31, 2019  

Month

  Year     Principal
value
    Ref.     Class     Interest rate(3)     Principal
Maturity
    Noncurrent     Current     Noncurrent     Current  

YPF

                     

    1998     US$ 15       (1) (6)       —         Fixed       10.00     2028       1,043       17       886       15  

April

    2013     $ 2,250       (2) (4) (6) (7)       Class XVII       —         —         —         —         —         —         1,217  

June

    2013     $ 1,265       (2) (4) (6)       Class XX       —         —         —         —         —         —         643  

July

    2013     US$ 92       (2) (5) (6)       Class XXII       Fixed       3.50     2020       —         858       —         729  

April, february and october

    2014/5/6     US$ 1,522       (2) (4) (6)       Class XXVIII       Fixed       8.75     2024       107,100       2,265       91,010       1,925  

March

    2014     $ 500       (2) (6) (7)       Class XXIX       —         —         —         —         —         —         206  

September

    2014     $ 1,000       (2) (6) (7)       Class XXXIV       BADLAR plus 0.1     25.30     2024       667       223       667       279  

February

    2015     $ 950       (2) (6) (7)       Class XXXVI       —         —         —         —         —         —         1,161  

April

    2015     $ 935       (2) (4) (6)       Class XXXVIII       —         —         —         —         —         —         349  

April

    2015     US$ 1,500       (2) (6)       Class XXXIX       Fixed       8.50     2025       105,540       3,813       89,416       3,230  

September

    2015     $ 1,900       (2) (6) (7)       Class XLI       BADLAR       25.20     2020       —         676       —         719  

September and december

    2015/9     $ 5,196       (2) (4) (6)       Class XLII       BADLAR plus 4     29.20     2020       —         5,604       —         5,952  

October

    2015     $ 2,000       (2) (6) (7)       Class XLIII       BADLAR       24.31     2023       2,000       93       2,000       183  

March and January

    2016/20     $ 5,455       (2) (4) (6)       Class XLVI       BADLAR plus 6     32.11     2021       —         6,011       1,350       251  

March

    2016     US$ 1,000       (2) (6)       Class XLVII       Fixed       8.50     2021       —         71,988       59,790       1,383  

April

    2016     US$ 46       (2) (5) (6)       Class XLVIII       —         —         —         —         —         —         2,785  

April

    2016     $ 535       (2) (6)       Class XLIX       —         —         —         —         —         —         593  

July

    2016     $ 11,248       (2) (6) (8)       Class L       BADLAR plus 4     32.23     2020       —         12,080       —         12,902  

May

    2017     $ 4,602       (2) (6) (8)       Class LII       Fixed       16.50     2022       4,602       110       4,602       108  

July and december

    2017     US$ 1,000       (2) (6)       Class LIII       Fixed       6.95     2027       71,082       2,213       60,399       1,890  

December

    2017     US$ 750       (2) (6)       Class LIV       Fixed       7.00     2047       52,153       148       44,311       126  

June

    2019     US$ 500       (6) (9)       Class I       Fixed       8.50     2029       35,015       20       29,748       17  

December

    2019     $ 1,683       (6) (9)       Class II       —         —         —         —         —         —         1,729  

December, april, may and june

    2019/20     $ 3,708       (6) (9)       Class III       BADLAR plus 6     35.16     2020       —         3,799       —         1,189  

December

    2019     US$ 19       (5) (6) (9)       Class IV       Fixed       7.00     2020       —         1,390       —         1,179  

January

    2020     $ 2,112       (6) (9)       Class V       BADLAR plus 5     29.44     2021       —         2,221       —         —    

January and march

    2020     $ 5,006       (6) (9)       Class VI       BADLAR plus 6     30.44     2021       5,005       275       —         —    

January

    2020     US$ 10       (5) (6) (9)       Class VII       Fixed       5.00     2021       —         701       —         —    

March

    2020     US$ 9       (6) (9)       Class VIII       Fixed       5.00     2021       —         631       —         —    

March

    2020     US$ 4       (6) (9)       Class IX       Fixed       6.00     2021       276       1       —         —    

April

    2020     $ 994       (6) (9)       Class X       BADLAR plus 3     27.35     2020       —         895       —         —    

May

    2020     US$ 93       (5) (6) (9)       Class XI       Fixed       0.00     2021       6,560       —         —         —    

June

    2020     US$ 78       (5) (6) (9)       Class XII       Fixed       1.50     2022       5,514       4       —         —    
               

 

 

   

 

 

   

 

 

   

 

 

 
                  396,557       116,036       384,179       40,760  
               

 

 

   

 

 

   

 

 

   

 

 

 
(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$ 10,000 million.

(3)

Nominal annual Interest rate as of June 30, 2020.

(4)

The ANSES and/or the “Fondo Argentino de Hidrocarburos” have participated in the primary subscription of these NO, which may at the discretion of the respective holders, be subsequently traded on the securities market where these negotiable obligations are authorized to be traded.

(5)

The payment currency of these NO is the 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 Group has fully complied with the use of proceeds disclosed in the corresponding pricing supplements.

(7)

NO classified as productive investments computable as such for the purposes of section 35.8.1, paragraph K of the General Regulations applicable to Insurance Activities issued by the Argentine Insurance Supervisory Bureau.

(8)

The payment currency of this issue is the U.S. dollar at the exchange rate applicable in accordance with the conditions of the relevant issued series.

(9)

Corresponds to the Frequent Issuer program. See Note 20 to the annual consolidated financial statements.

 

33


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

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2020 AND COMPARATIVE INFORMATION (UNAUDITED)

   LOGO

 

22. OTHER LIABILITIES

 

     June 30, 2020      December 31, 2019  
     Noncurrent      Current      Noncurrent      Current  

Extension of concessions

     594        578        529        593  

Liabilities for contractual claims(1)

     163        65        170        59  

Miscellaneous

     —          852        4        658  
  

 

 

    

 

 

    

 

 

    

 

 

 
     757        1,495        703        1,310  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

(1)

See Note 15 to the annual consolidated financial statements.

23. ACCOUNTS PAYABLE

 

     June 30, 2020      December 31, 2019  
     Noncurrent      Current      Noncurrent      Current  

Trade payable and related parties(1)

     635        111,551        1,869        145,942  

Guarantee deposits

     36        700        21        704  

Payables with partners of JO

     1,796        2,889        575        851  

Miscellaneous

     —          1,603        —          1,098  
  

 

 

    

 

 

    

 

 

    

 

 

 
     2,467        116,743        2,465        148,595  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

(1)

For more information about related parties, see Note 36.

24. REVENUES

 

     For the six-month
period ended June 30,
 
     2020      2019  

Sales of goods and services

     314,439        295,049  

Government incentives(1)

     4,330        5,476  

Turnover tax

     (10,541      (9,289
  

 

 

    

 

 

 
     308,228        291,236  
  

 

 

    

 

 

 

 

(1)

See Note 36.

The Group’s transactions and the main revenues are described in Note 6. The Group’s revenues are derived from contracts with customers, except for Government incentives.

 

   

Breakdown of revenues

 

   

Type of good or service

 

     For the six-month period ended June 30, 2020  
     Upstream      Downstream      Gas and
Power
     Central
Administration
and others
     Total  

Diesel

     —          110,825        —          —          110,825  

Gasolines

     —          59,619        —          —          59,619  

Natural Gas(1)

     —          306        45,720        —          46,026  

Crude Oil

     —          5,868        —          —          5,868  

Jet fuel

     —          12,068        —          —          12,068  

Lubricants and by-products

     —          7,833        —          —          7,833  

Liquefied Petroleum Gas

     —          6,323        —          —          6,323  

Fuel oil

     —          4,306        —          —          4,306  

Petrochemicals

     —          9,533        —          —          9,533  

Fertilizers

     —          7,650        —          —          7,650  

Flours, oils and grains

     —          14,071        —          —          14,071  

Asphalts

     —          1,049        —          —          1,049  

Goods for resale at gas stations

     —          1,674        —          —          1,674  

Income from services

     —          —          —          1,308        1,308  

Income from construction contracts

     —          —          —          4,277        4,277  

Virgin naphtha

     —          3,285        —          —          3,285  

Petroleum coke

     —          2,437        —          —          2,437  

LNG Regasification

     —          —          3,224        —          3,224  

Other goods and services

     1,098        5,252        5,210        1,503        13,063  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
     1,098        252,099        54,154        7,088        314,439  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

34


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

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2020 AND COMPARATIVE INFORMATION (UNAUDITED)

   LOGO

24. REVENUES (Cont.)

 

     For the six-month period ended June 30, 2019  
     Upstream      Downstream      Gas and
Power
     Central
Administration
and others
     Total  

Diesel

     —          96,550        —          —          96,550  

Gasolines

     —          63,677        —          —          63,677  

Natural Gas(1)

     —          597        45,420        —          46,017  

Crude Oil

     —          7,295        —          —          7,295  

Jet fuel

     —          19,523        —          —          19,523  

Lubricants and by-products

     —          5,931        —          —          5,931  

Liquefied Petroleum Gas

     —          6,345        —          —          6,345  

Fuel oil

     —          2,501        —          —          2,501  

Petrochemicals

     —          9,816        —          —          9,816  

Fertilizers

     —          3,005        —          —          3,005  

Flours, oils and grains

     —          8,196        —          —          8,196  

Asphalts

     —          2,257        —          —          2,257  

Goods for resale at gas stations

     —          1,910        —          —          1,910  

Income from services

     —          —          —          1,623        1,623  

Income from construction contracts

     —          —          —          5,564        5,564  

Virgin naphtha

     —          1,074        —          —          1,074  

Petroleum coke

     —          2,987        —          —          2,987  

LNG Regasification

     —          —          885        —          885  

Other goods and services

     1,175        3,437        3,889        1,392        9,893  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
     1,175        235,101        50,194        8,579        295,049  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

(1)

Includes 32,841 and 30,450 corresponding to sales of natural gas produced by the Company for the six-month period ended June 30, 2020 and 2019, respectively.

 

   

Sales Channels

 

     For the six-month period ended June 30, 2020  
     Upstream      Downstream      Gas and
Power
     Central
Administration
and others
     Total  

Gas Stations

     —          114,585        —          —          114,585  

Power Plants

     —          —          6,007        —          6,007  

Distribution Companies

     —          —          13,194        —          13,194  

Retail distribution of natural gas

     —          —          12,266        —          12,266  

Industries, transport and aviation

     —          44,623        14,559        —          59,182  

Agriculture

     —          41,307        —          —          41,307  

Petrochemical industry

     —          10,674        —          —          10,674  

Trading

     —          21,182        —          —          21,182  

Oil Companies

     —          12,160        —          —          12,160  

Commercialization of liquefied petroleum gas

     —          2,933        —          —          2,933  

Other sales channels

     1,098        4,635        8,128        7,088        20,949  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
     1,098        252,099        54,154        7,088        314,439  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

     For the six-month period ended June 30, 2019  
     Upstream      Downstream      Gas and
Power
     Central
Administration
and others
     Total  

Gas Stations

     —          113,921        —          —          113,921  

Power Plants

     —          230        6,694        —          6,924  

Distribution Companies

     —          —          8,425        —          8,425  

Retail distribution of natural gas

     —          —          17,530        —          17,530  

Industries, transport and aviation

     —          50,745        12,770        —          63,515  

Agriculture

     —          27,752        —          —          27,752  

Petrochemical industry

     —          10,739        —          —          10,739  

Trading

     —          16,751        —          —          16,751  

Oil Companies

     —          8,456        —          —          8,456  

Commercialization of liquefied petroleum gas

     —          2,809        —          —          2,809  

Other sales channels

     1,175        3,698        4,775        8,579        18,227  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
     1,175        235,101        50,194        8,579        295,049  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

   

Target Market

Sales contracts in the domestic market resulted in 269,251 and 256,346 for the six-month period ended June 30, 2020 and 2019, respectively.

Sales contracts in the international market resulted in 45,188 and 38,703 for the six-month period ended June 30, 2020 and 2019, respectively.

 

35


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

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2020 AND COMPARATIVE INFORMATION (UNAUDITED)

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24. REVENUES (Cont.)

 

   

Contract balances

The following table reflects information regarding credits, contract assets and contract liabilities:

 

     June 30, 2020      December 31, 2019  
     Noncurrent      Current      Noncurrent      Current  

Credits for contracts included in Trade Receivables

     7,486        85,369        6,785        100,706  

Contract assets

     —          442        —          203  

Contract liabilities

     —          6,085        294        7,404  

Contract assets are mainly related to the work carried out by the Group under the construction contracts.

Contract liabilities are mainly related to advances received from customers under the contracts for the sale of commodities, fuels, crude oil, methanol, lubricants and by-products, diesel and natural gas, among others.

During the six-month period ended on June 30, 2020 and 2019 the Group has recognized 4,448 and 2,651, respectively, in revenues from ordinary activities arising from contracts entered into with customers in the statement of comprehensive income, which have been included in the balance for contract liabilities at the beginning of the period.

25. COSTS

 

     For the six-month period ended
June 30,
 
     2020      2019  

Inventories at beginning of year

     80,479        53,324  

Purchases

     79,014        87,660  

Production costs(1)

     219,111        160,917  

Translation effect

     15,217        6,409  

Adjustment for inflation(2)

     199        210  

Inventories at end of the period

     (101,284      (69,555
  

 

 

    

 

 

 
     292,736        238,965  
  

 

 

    

 

 

 

 

(1)

See Note 26,

(2)

Corresponds to adjustment for inflation of inventories’ opening balances of subsidiaries with the Peso as functional currency, which was charged to other comprehensive income.

 

36


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

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2020 AND COMPARATIVE INFORMATION (UNAUDITED)

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26. EXPENSES BY NATURE

The Group presents the statement of comprehensive income by classifying expenses according to their function as part of the “Costs”, “Administrative expenses”, “Selling expenses” and “Exploration expenses” lines. The following additional information is disclosed as required, on the nature of the expenses and their relation to the function within the Group for the six-month period ended June 30, 2020 and 2019:

 

     For the six-month period ended June 30, 2020  
     Production
costs(3)
     Administrative
expenses
    Selling
expenses
    Exploration
expenses
     Total  

Salaries and social security taxes

     17,211        4,883       2,644       186        24,924  (5) 

Fees and compensation for services

     1,207        4,464  (2)      792       71        6,534  

Other personnel expenses

     4,240        421       208       22        4,891  

Taxes, charges and contributions

     3,536        157       7,346  (1)      —          11,039  

Royalties, easements and canons

     19,644        —         52       37        19,733  

Insurance

     2,207        136       138       —          2,481  

Rental of real estate and equipment

     3,780        17       785       —          4,582  (4) 

Survey expenses

     —          —         —         210        210  

Depreciation of property, plant and equipment

     82,384        1,634       2,554       —          86,572  

Amortization of intangible assets

     1,138        253       18       —          1,409  

Depreciation of right-of-use assets

     8,237        —         442       —          8,679  

Industrial inputs, consumable materials and supplies

     9,479        37       154       21        9,691  

Operation services and other service contracts

     20,450        319       1,680       250        22,699  (4) 

Preservation, repair and maintenance

     26,817        570       771       18        28,176  (4) 

Unproductive exploratory drillings

     —          —         —         16        16  

Transportation, products and charges

     11,393        1       8,126       —          19,520  (4) 

Provision for doubtful trade receivables

     —          —         9,412       —          9,412  

Publicity and advertising expenses

     —          623       172       —          795  

Fuel, gas, energy and miscellaneous

     7,388        617       1,750       25        9,780  (4) 
  

 

 

    

 

 

   

 

 

   

 

 

    

 

 

 
     219,111        14,132       37,044       856        271,143  
  

 

 

    

 

 

   

 

 

   

 

 

    

 

 

 

 

(1)

Includes 4,769 corresponding to export withholdings.

(2)

Includes 44 corresponding to fees and remunerations of the Directors and Statutory Auditors of YPF’s Board of Directors. On April 30, 2020, the General Ordinary and Extraordinary Shareholders’ Meeting of YPF resolved to ratify the fees of 83 corresponding to fiscal year 2019 and to approve the approximate sum of 123 as fees with respect to fees and remunerations for the fiscal year 2020.

(3)

The expense recognized in the condensed interim consolidated statement of comprehensive income corresponding to research and development activities amounted to 551.

(4)

Includes 3,244 and 2,211 corresponding to short-term leases and to the lease charge related to the underlying asset return and/or use, respectively.

(5)

Includes 756 corresponding to the Work and Production Assistance Program received in benefit of AESA an OPESSA. See Note 36.

 

     For the six-month period ended June 30, 2019  
     Production
costs(3)
     Administrative
expenses
    Selling
expenses
    Exploration
expenses
     Total  

Salaries and social security taxes

     13,493        3,406       1,768       302        18,969  

Fees and compensation for services

     1,111        2,627  (2)      461       13        4,212  

Other personnel expenses

     3,665        362       191       34        4,252  

Taxes, charges and contributions

     3,270        231       4,850  (1)      41        8,392  

Royalties, easements and canons

     19,203        —         52       35        19,290  

Insurance

     1,026        61       59       —          1,146  

Rental of real estate and equipment

     4,143        28       378       —          4,549  (4) 

Survey expenses

     —          —         —         426        426  

Depreciation of property, plant and equipment

     59,196        1,041       1,518       —          61,755  

Amortization of intangible assets

     888        135       13       —          1,036  

Depreciation of right-of-use assets

     4,083        —         270       —          4,353  

Industrial inputs, consumable materials and supplies

     9,384        87       109       25        9,605  

Operation services and other service contracts

     9,192        288       1,003       152        10,635  (4) 

Preservation, repair and maintenance

     20,093        353       348       15        20,809  (4) 

Unproductive exploratory drillings

     —          —         —         1,382        1,382  

Transportation, products and charges

     9,195        1       6,650       —          15,846  (4) 

Provision for doubtful trade receivables

     —          —         1,125       —          1,125  

Publicity and advertising expenses

     —          1,174       482       —          1,656  

Fuel, gas, energy and miscellaneous

     2,975        730       1,760       152        5,617  (4) 
  

 

 

    

 

 

   

 

 

   

 

 

    

 

 

 
     160,917        10,524       21,037       2,577        195,055  
  

 

 

    

 

 

   

 

 

   

 

 

    

 

 

 

 

(1)

Includes approximately 3,131 corresponding to export withholdings.

(2)

Includes 44 corresponding to fees and remunerations of the Directors and Statutory Auditors of YPF’s Board of Directors. On April 26, 2019, the General Ordinary and Extraordinary Shareholders’ Meeting of YPF resolved to ratify the fees of 65 corresponding to fiscal year 2018 and to approve the approximate sum of 87 as fees with respect to fees and remunerations for the fiscal year 2019.

(3)

The expense recognized in the condensed interim consolidated statement of comprehensive income corresponding to research and development activities amounted to 448.

(4)

Includes 2,723 and 656 corresponding to short-term leases and to the lease charge related to the underlying asset return and/or use, respectively.

 

37


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

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2020 AND COMPARATIVE INFORMATION (UNAUDITED)

   LOGO

 

27. OTHER NET OPERATING RESULTS

 

     For the six-month period
ended June 30,
 
     2020     2019  

Result for sale of participation in areas

     12,233 (1)      1,523 (2) 

Lawsuits

     (431     (1,721

Insurance

     3,189 (3)      —    

Construction incentive(4)

     —         51  

Miscellaneous

     332       (187
  

 

 

   

 

 

 
     15,323       (334
  

 

 

   

 

 

 

 

(1)

See Note 4.

(2)

See Note 3 to the annual consolidated financial statements.

(3)

Corresponds mainly to the total and definitive compensation for the damages that occurred in the Bandurria Sur and Loma La Lata Oeste areas.

(4)

See Note 36.

28. NET FINANCIAL RESULTS

 

     For the six-month period
ended June 30,
 
     2020      2019  

Financial income

     

Interest income

     2,652        2,451  

Exchange differences

     47,543        16,581  

Financial accretion

     1,428        770  
  

 

 

    

 

 

 

Total financial income

     51,623        19,802  
  

 

 

    

 

 

 

Financial loss

     

Interest loss

     (31,150      (19,002

Exchange differences

     (28,699      (6,239

Financial accretion

     (7,965      (5,422
  

 

 

    

 

 

 

Total financial costs

     (67,814      (30,663
  

 

 

    

 

 

 

Other financial results

     

Results on financial assets at fair value with changes in results

     (5      2,070  

Results from derivative financial instruments

     (432      142  

Result from net monetary position

     2,696        2,230  

Results from transactions with financial assets

     8,523        —    
  

 

 

    

 

 

 

Total other financial results

     10,782        4,442  
  

 

 

    

 

 

 

Total net financial results

     (5,409      (6,419
  

 

 

    

 

 

 

29. INVESTMENTS IN JOINT OPERATIONS

The assets and liabilities as of June 30, 2020 and December 31, 2019, and expenses for the six-month period ended on June 30, 2020 and 2019, of JO and other agreements in which the Group participates are as follows:

 

     June 30, 2020      December 31, 2019  

Noncurrent assets(1)

     252,410        221,219  

Current assets

     3,947        8,723  
  

 

 

    

 

 

 

Total assets

     256,357        229,942  
  

 

 

    

 

 

 

Noncurrent liabilities

     20,387        17,754  

Current liabilities

     17,409        27,641  
  

 

 

    

 

 

 

Total liabilities

     37,796        45,395  
  

 

 

    

 

 

 

 

     For the six-month period ended June 30,  
     2020      2019  

Production cost

     39,280        28,891  

Exploration expenses

     28        27  

 

(1)

It does not include charges for impairment of property, plant and equipment because they are recorded by the partners participating in the JO.

 

38


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

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2020 AND COMPARATIVE INFORMATION (UNAUDITED)

   LOGO

 

30. SHAREHOLDERS’ EQUITY

The Company’s subscribed capital as of June 30, 2020, is 3,924 and 9 treasury shares represented by 393,312,793 book-entry shares of common stock and divided into four classes of shares (A, B, C and D), with a par value of Pesos 10 and 1 vote per share. These shares are fully subscribed, paid-in and authorized for stock exchange listing.

As of June 30, 2020, there are 3,764 Class A outstanding shares. As long as any Class A share remains outstanding, the affirmative vote of Argentine Government is required for: 1) mergers, 2) acquisitions of more than 50% of YPF shares in an agreed or hostile bid, 3) transfers of all the YPF’s production and exploration rights, 4) the voluntary dissolution of YPF or 5) change of corporate and/or tax address outside the Argentine Republic. Items 3) and 4) also require prior approval by the Argentine Congress.

The General Ordinary and Extraordinary Shareholders’ Meeting was held on April 30, 2020 and approved the financial statements of YPF for the fiscal year ended December 31, 2019, and additionally, approved the following resolution in relation to the allocation of retained earnings as of December 31, 2019: a) to completely eliminate the reserve for future dividends, the reserve for the purchase of treasury shares and the reserve for investments; b) to fully absorb accumulated losses in retained earnings up to 34,071 against the amounts corresponding to the discontinued reserves for up to such amount; and c) to allocate the remaining discontinued reserves of up to 13,184, as follows: (i) to allocate the sum of 550 to create a Reserve for the purchase of treasury shares in order to give the Board of Directors the possibility of acquiring treasury shares at the time it deems appropriate, and complying, during the execution of the plans, with the commitments assumed and to be assumed by them in the future; ii) to allocate the sum of 3,700 to a reserve for future dividends, empowering the Board of Directors, until the date of the next General Ordinary Shareholders’ Meeting at which the financial statements ended as of December 31, 2020 will be dealt with, to determine the time and amount for their distribution, if deemed convenient and achievable, taking into account the financial conditions and availability of funds as well as the operating results, investments and other matters that are deemed relevant in the development of the Company’s activities; and (iii) to allocate the sum of 8,934 to create a reserve for investments under the terms of section 70, third paragraph of the LGS.

31. EARNINGS PER SHARE

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

 

     For the six-month period
ended June 30,
 
     2020      2019  

Net loss

     (78,418      (10,869

Average number of shares outstanding

     392,396,730        392,251,094  

Basic and diluted earnings per share

     (199.84      (27.71

Basic and diluted earnings per share are calculated as shown in Note 2.b.13 to the annual consolidated financial statements.

 

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

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2020 AND COMPARATIVE INFORMATION (UNAUDITED)

   LOGO

 

32. ISSUES RELATED TO MAXUS ENTITIES

Issues related to Maxus entities are described in Note 31 to the annual consolidated financial statements. Updates for the six-month period ended June 30, 2020 are described below:

 

   

Maxus Energy Corporation Liquidating Trust (“Liquidating Trust”) Claim

On March 23, 2020, the District Court denied the “Motion to Withdraw the reference” filed by Repsol and its related companies, and the one filed by YPF together with the other companies of the Group that are part of the Claim.

On March 30, 2020, the parties to the process submitted letters to the Court hearing the case arguing the existence of issues pending resolution in relation to the Discovery process.

On April 10, 2020, the parties to the process replied to the letters filed on March 30, 2020.

On April 20, 2020, a hearing was held between the parties and the judge hearing the case, by telephone and, in relation to the matters pending resolution.

On June 23, 2020, the Court hearing the case issued a decision which settled the issues pending resolution related to the Discovery process, as well as other issues raised by the parties to the process.

On July 21, 2020, the Liquidating Trust submitted the schedule agreed by the parties to the process to the Court hearing the case.

As of the date of these condensed interim consolidated financial statements, the parties to the process are producing evidence in support of their arguments.

Considering the ongoing status of the lawsuit, the complexity of the complaint and the evidence that both parties should submit, the Company will continuously reassess any changes in the circumstances described and their impact on the results and financial position of the Group as such changes occur.

The Company, YPF Holdings, CLH Holdings, Inc. and YPF International will defend themselves, file the necessary legal remedies and exercise defensive measures in accordance with the applicable legal procedure to defend their rights.

33. CONTINGENT ASSETS AND LIABILITIES

Contingent liabilities and contingent assets are described in Note 32 to the annual consolidated financial statements.

33.a) Contingent liabilities

The recent events of the six-month period ended on June 30, 2020 are described below:

33.a.1) Contentious claims

 

   

Petersen Energía Inversora, S.A.U and Petersen Energía, S.A.U. companies (collectively, “Petersen”)

On May 20, the Provincial Court of Madrid dismissed the appeal filed by the Company and confirmed the jurisdiction of the Commercial Court No. 3 of Madrid in the proceedings. YPF is analyzing the best course of action in the light of the aforementioned decision.

On June 5, 2020, the District Court rejected the motions to dismiss based on the grounds of “forum non conveniens” filed both by the Argentine Republic and YPF and requested the parties to the process to propose how they consider the proceedings should be handled.

On June 26, 2020, both Petersen and Eton filed a motion suggesting how the proceedings should be handled.

On June 29, 2020, both the Argentine Republic and YPF filed a motion suggesting how the proceedings should be handled.

 

40


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

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2020 AND COMPARATIVE INFORMATION (UNAUDITED)

   LOGO

33. CONTINGENT ASSETS AND LIABILITIES (Cont.)

 

On July 1, 2020, the District Court summoned the parties to a telephone conference held on July 9, 2020.

On July 13, 2020, the District Court issued a resolution ordering the parties to the process to proceed to the discovery “of facts” and the discovery “of experts”.

On July 17, 2020, Petersen and Eton together with YPF and the Argentine Republic submitted to the District Court a proposal with a schedule of the next steps for the process.

On July 20, 2020, the District Court accepted the schedule proposed by the parties.

As of the date of issuance of these consolidated financial statements, there are no elements in YPF’s possession that allow quantifying the possible impact that this claim could have on the Company.

The Company categorically rejects the claims asserted in the complaint and will file the necessary legal remedies and exercise defensive measures in accordance with the applicable legal procedure to defend their rights.

 

   

Eton Park Capital Management, L.P., Eton Park Master Fund, LTD. y Eton Park Fund, L.P. (jointly referred to as “Eton Park”)

On June 5, 2020, the District Court rejected the motions to dismiss based on the grounds of “forum non conveniens” filed both by the Argentine Republic and YPF and requested the parties to the process to propose how they consider the proceedings should be handled.

On June 26, 2020, both Petersen and Eton filed a motion suggesting how the proceedings should be handled.

On June 29, 2020, both the Argentine Republic and YPF filed a motion suggesting how the proceedings should be handled.

On July 1, 2020, the District Court summoned the parties to a telephone conference held on July 9, 2020.

On July 10, 2020, both the Argentine Republic and YPF answered the complaint from Eton Park.

On July 13, 2020, the District Court issued a resolution ordering the parties to the process to proceed to the discovery “of facts” and the discovery “of experts”.

On July 17, 2020, Petersen and Eton together with YPF and the Argentine Republic submitted to the District Court a proposal with a schedule of the next steps for the process.

On July 20, 2020, the District Court accepted the schedule proposed by the parties.

As of the date of issuance of these consolidated financial statements, there are no elements in YPF’s possession that allow quantifying the possible impact that this claim could have on the Company.

The Company categorically rejects the claims asserted in the complaint and will file the necessary legal remedies and exercise defensive measures in accordance with the applicable legal procedure to defend their rights.

33.a.2) Claims related to the liquefaction barge charter agreement and the liquefaction services agreement with Exmar Energy Netherlands B.V. and Exmar Argentina S.A.U.

On July 15, 2020, Exmar Energy Netherlands B.V. and Exmar Argentina S.A.U. initiated two arbitrations before the London Court of International Arbitration (“LCIA”) in connection with alleged due payments of YPF, and YPF’s Force Majeure declaration.

 

41


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

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2020 AND COMPARATIVE INFORMATION (UNAUDITED)

   LOGO

 

34. CONTRACTUAL COMMITMENTS

Contractual commitments are described in Note 33 to the annual consolidated financial statements. Updates for the six- month period ended June 30, 2020 are described below:

Investment project agreements

 

   

Agreement for the development of Loma La Lata Norte and Loma Campana areas

In relation to the Investment Agreement entered into between the Company and subsidiaries of Chevron Corporation for the joint exploitation of non-conventional hydrocarbons in the province of Neuquén, in the Loma Campana area, for the six-month period ended June 30, 2020, the Company and Compañía de Hidrocarburo No Convencional S.R.L. (“CHNC”) have carried out transactions which include the purchase of crude oil by YPF for 6,233. These transactions were executed based on the market’s general and regulatory framework. The net balance to be paid to CHNC as of June 30, 2020 is 51. Additionally, YPF has a overlift position with CHNC corresponding to the imbalance of crude oil production from Loma Campana of 3,303.

35. MAIN REGULATIONS AND OTHER

Main regulations and others are described in Note 34 to the annual consolidated financial statements. Updates for the six-month period ended June 30, 2020 are described below:

35.a) Regulatory requirements for natural gas

 

   

Mechanisms for allocating the demand for natural gas

ENARGAS Resolution No. 39/2020

On May 5, 2020, ENARGAS Resolution No. 39/2020 was published in the BO, extending the effective period of ENARGAS Resolution No. 59/2018 (which established the temporary procedure for shipment management in the Emergency Executive Committee) to September 30, 2020, included.

Terms and Conditions for the Distribution of Natural Gas through Networks

On April 10, 2020, the SE instructed companies producing natural gas to renew, until the expiration date of the period established in section 5 of Law No. 27,541, in the same terms and conditions, the validity of all supply agreements (inside and outside the transportation system) and all natural gas purchase agreements, whose expiration has operated or operates in the period between March 31, 2020 and the expiration date of the period established in the aforementioned section 5, having to adopt the pertinent precautions to proceed with their formalization.

On April 14, 2020, YPF sent a note to the SE stating: (i) the debt situation of the Distributors, IEASA and CAMMESA that requires their urgent regularization; (ii) the difficult situation the production sector is going through since 2018 when the variation in the price of natural gas purchased by the Distributors was found not to be transferred to tariffs, aggravated since 2019 by the delay of the Argentine Government in the update of the exchange rate along with the lack of payment of the commitments and subsidies, among others; (iii) its intention to promote the extension of contracts until the end of the period established in section 5 of Law No. 27,541, subject to the modality established in each case and depending on the availability of YPF’s gas, without implying consent to the note and making reservation of rights.

 

42


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

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2020 AND COMPARATIVE INFORMATION (UNAUDITED)

   LOGO

35. MAIN REGULATIONS AND OTHERS (Cont.)

 

On April 20, 2020, YPF sent an extension proposal to the Distributors, which were mostly accepted.

On April 27, 2020 the ENARGAS Resolution No. 27/2020 was published in the BO, repealing ENARGAS Resolution No. 72/2019 which approved the “Methodology for Transferring the Gas Price to Tariffs and the General Procedure for Calculating Accumulated Daily Differences” that set forth the criteria that ENARGAS would apply to determine the transfer the price of gas to tariffs at the TSEP, and established that, in principle, the obligation of the distribution licensees to make reasonable efforts to obtain the best conditions and prices in their gas purchase transactions for their eventual transfer to tariffs, might be deemed complied with if such contracts resulted from a public bidding process within the scope of MEGSA, and provided they complied with section 8 of Decree No. 1053/2018, that is, that in no case could the highest cost caused by changes in the exchange rate occurring during each seasonal period be transferred to users who receive full service.

On June 19, 2020, the Need and Urgency Decree No. 543/2020 was published in the BO, extending the term established in section 5 of Law No. 27,541 (that provided for the non-adjustment of gas and electricity rates) from its expiration and for an additional term of 180 calendar days, and replacing the first paragraph of section 1 of Decree No. 311/2020, establishing that companies providing electricity, gas, running water, fixed or mobile telephone and Internet and cable TV services, either by radioelectric or satellite link, may not interrupt or disconnect the respective services to users listed in section 3 of such Decree, in case of delay or lack of payment of 6 consecutive or alternate bills, due as from March 1, 2020, including users with disconnection notice in course.

Likewise, on June 19, 2020, and based on the Need and Urgency Decree No. 543/2020, the SE instructed producer companies to renew gas supply agreements with distribution companies until the expiration of the new term established by Decree No. 543/2020. YPF agreed to extend the term with the distribution companies until July 31, 2020 and sent new proposals to extend the effective term of such agreements through August 31, 2020.

Decree No. 1053/2018

Decree No. 1053/2018, issued by the PEN under Section 99 subsection 3 of the Argentine Constitution (Need and Urgency Decree) is effective from its publication date, and its approval by the Argentine Congress is regulated by Law No. 26,122, which requires the Standing Bicameral Committee to decide on the validity or invalidity of the Decree and submit a plenary opinion of both Congress Chambers for its express treatment, and establishes that need and urgency decrees will be considered to be repealed if they are rejected by both Chambers.

On July 14, 2020, the Standing Bicameral Committee issued its opinion declaring the invalidity of Decree No. 1053/2018 and submitted such opinion to both Chambers for their final decision on the matter. On July 23, 2020, the Chamber of Senators approved the opinion of the Standing Bicameral Committee which declared the nullity of Decree No. 1053/2018. The Chamber of Deputies has not yet issued its decision, and therefore, as of this date, the aforementioned Decree remains in force.

Even though on June 17, 2020, the SE had approved transfers to Distributors of the amounts corresponding to installments No. 2 to No. 7 under the scheme (corresponding to the Payment of the daily accumulated differences between the value of gas purchased by providers of the distribution service of natural gas through networks and the value of natural gas included in the tariff schemes effective from April 1, 2018 to March 31, 2019, exclusively generated by exchange rate variations and corresponding to natural gas volumes delivered in the same period), such transfers were never made and the SE is not expected to make such transfers until the validity or invalidity of the Decree is finally resolved, which depends on the Chamber of Deputies’ decision expressly accepting or rejecting the Decree, as the case may be. Even though YPF´s rights have not been affected, the aforementioned impacts on the recoverability of the financial asset subject to the measure, as defined under IFRS. Therefore, YPF recorded an impairment charge of these receivables as of June 30, 2020, which amounts to 7,961.

YPF is analyzing possible measures to be adopted to defend its rights in the event of the Decree being repealed.

 

43


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

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2020 AND COMPARATIVE INFORMATION (UNAUDITED)

   LOGO

35. MAIN REGULATIONS AND OTHERS (Cont.)

 

   

Abstention from cutting off gas distribution services – LPG commercialization in the domestic market

In addition to the measures adopted by the Argentine Government due to the COVID-19 outbreak mentioned in Note 2.c, on March 25, 2020, Decree No. 311/2020 was published in the BO, which blocks interruption of services due to non- payment or late payment for a period of 180 days to certain residential users and non-residential users, which includes gas distribution providers through networks.

Decree No. 311/2020 also established the maximum reference prices for the sale of LPG in bottles, cylinders and/or bulk for domestic consumption will remain at the current prices for a period of 180 days. The Enforcing Authority shall define the mechanisms required to guarantee the approriate residential demand supply.

On April 18, 2020, Resolution No.173/2020 issued by the Ministry of Productive Development, established that the SE had to prepare a report on the normal commercialization volumes of LPG in bottles, cylinders and/or in bulk for domestic market consumption, the price of the Household Program (Programa Hogar) and the market price of the product in cylinders and/or bulk for residential consumption as of the date of publication of Decree No. 311/2020 and the mechanisms required to ensure the adequate supply of the residential demand. Besides, Resolution No. 173/2020 clarifies the LPG may fluctuate below the levels established in Decree No. 311/2020, when the pricing mechanisms for such fluid shall so allow.

 

   

Remuneration of generators

On April 8, 2020, by means of a letter, the Secretary of Energy instructed CAMMESA to postpone until further notice, the implementation of Annex VI – Inflation adjustment of the values established in Argentine Pesos, of SE Resolution No. 31/2020 regarding the remuneration of generators.

 

   

Law No. 27,541 on Social Solidarity and Productive Reactivation within the Public Emergency Framework

On March 17, 2020, Decree No. 278/2020 was published in the BO, which ordered the government intervention of the ENARGAS until December 31, 2020, in compliance with section 6 of Law No. 27,541.

35.b) Liquid hydrocarbons regulatory requirements

 

   

Decree 488/2020 – Determination of prices for billing crude oil deliveries in the domestic market

On May 19, 2020, Decree No. 488/2020 issued by the PEN (the “Decree”) was published in the BO, establishing that crude oil deliveries made in the domestic market must be invoiced by producing companies and paid by refining and trading companies, taking the Medanito crude oil type price of US$ 45/Bbl as a reference, until December 31, 2020. This price will be adjusted for each crude type by quality and loading port using the same reference in accordance with ordinary practices. Such price will be applicable to payment of royalties in compliance with section 59 of Law No. 17,319. Should, during the effective term of the Decree, the price of the “ICE BRENT FIRST LINE” rise above US$ 45/Bbl for 10 consecutive days, considering to such end the average of the last 5 market rates published by “PLATTS CRUDE MARKETWIRE” under the heading “Futures”, price-related provisions will be void.

In addition, the Decree provides that during the effective term, the producing companies are bound to maintain the activity and/or production levels registered during 2019, taking into consideration the current demand shrinkage of crude oil and its by-products, both in the domestic and international markets, caused by the COVID-19 pandemic, and always within the adequate and economic operation parameters set forth in section 31 of Law No. 17,319. Producing companies must apply an identical criteria in relation to sustaining effective contracts with regional service companies and maintaining the same workforce they had as of December 31, 2019, which shall be carried out within a consensual framework together with workers’ organizations in order to jointly achieve working arrangements that improve efficiency, technology and production, in compliance with the best national and international practices in the hydrocarbon activity.

The SE will verify that producing companies meet the Annual Investment Plan (Section 12 Annex to Decree No. 1277/12) and will apply, if appropriate, the sanctions provided for in section 29 of such Annex.

 

44


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

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2020 AND COMPARATIVE INFORMATION (UNAUDITED)

   LOGO

35. MAIN REGULATIONS AND OTHERS (Cont.)

 

On the other hand, the Decree established that refining and trading companies must purchase their total crude oil demand to local producing companies. For integrated companies, the Decree stipulated that, should they need to buy crude oil in excess of their own and their associates’ production, such purchases will be made based on similar parameters to those used in 2019. Integrated and refining companies, as well as trading companies will not be able to import products that are available for sale in the domestic market and/or for which there is effective local processing capacity.

Regarding tax increases on liquid fuels and carbon dioxide stipulated under section 7 of Annex to Decree No. 501/2018, and which correspond to adjustments for the first and second quarter of 2020, they will be applicable to unleaded gasoline, virgin naphtha and diesel from October 1, 2020.

The Decree also established that hydrocarbons (under the tariff items of the Mercosur Common Nomenclature (“NCM”) outlined in its Annex) will pay export duties under a scheme that contemplates the price of the “ICE BRENT FIRST LINE” barrel (International Price). Such export duty rate will be 0% when the International Price equal or lower than US$ 45/Bbl, will range from 0.5% to 8% when the International Price is between US$ 45 and US$ 60/Bbl, and will be 8% when the International Price is equal or higher than US$ 60/Bbl.

The SE may simplify the Operation of the Registry of Export Transactions for low-demand products in the domestic market if export requests should significantly increase. It may also request assistance from the Secretariat of Domestic Commerce and any other competent body, city mayors and all municipalities of the country, to monitor compliance with the maximum prices for the sale of LNG bottles of 10, 12 and 15 kilograms.

The values of fines for default of the obligations arising from exploration permits and exploitation concessions which do not constitute grounds for expiration under the provisions of Law No. 17,319, are based on a minimum value of 22 m3 of national crude oil in the domestic market and a maximum of 2,200 m3 of the same hydrocarbon per each infringement.

35.c) Natural gas production incentive programs

 

   

Stimulus Program for Investments in Natural Gas Production Developments from Non-Conventional Reservoirs

On June 23, 2020, YPF answered the request from the Under-Secretariat of Energy, Mining and Hydrocarbons of Neuquén, requiring YPF to submit a readjustment proposal for the Investment Plan corresponding to La Ribera I and II concession area for the whole period covered by the Investment Plan (2018-2021). Based on the impact the new Coronavirus (COVID-19) and the quarantine decided as a consequence thereof has had on the Company and its activities, YPF stated to such body that is impossible for it to make a comprehensive readjustment proposal of the Investment Plan and required the approval of its readjustment as originally requested. As of the date of these condensed interim consolidated financial statements, the Under-Secretariat of Energy, Mining and Hydrocarbons of Neuquén has not answered YPF’s petition.

 

45


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

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2020 AND COMPARATIVE INFORMATION (UNAUDITED)

   LOGO

35. MAIN REGULATIONS AND OTHERS (Cont.)

 

35.d) Other regulatory requirements

 

   

CNV Regulatory Framework (N.T. 2013)

a) CNV General Resolution No. 622

 

i.

Pursuant to section 1, Chapter III, Title IV of such Resolution, a description of the notes to the consolidated financial statements containing information required under the Resolution in the form of exhibits follows.

 

Exhibit A – Fixed Assets    Note 9 Property, plant and equipment
Exhibit B – Intangible assets    Note 8 Intangible assets
Exhibit C – Investments in companies    Note 11 Investments in associates and joint ventures
Exhibit D – Other investments    Note 7 Financial instruments by category
Exhibit E – Provisions   

Note 14 Trade receivables

Note 13 Other receivables

Note 11 Investments in associates and joint ventures

Note 9 Property, plant and equipment

Note 8 Intangible assets

Note 16 Provisions

Exhibit F – Cost of goods sold and services rendered    Note 25 Costs
Exhibit G – Assets and liabilities in foreign currency    Note 38 Assets and liabilities in currencies other than the 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 will not, under any circumstance, offer brokerage services to third parties for transactions in markets under the jurisdiction of the CNV, and it will also not open operating accounts to third parties to issue orders and trade in markets under the jurisdiction of the CNV.

Moreover, in accordance with the amendment to the CNV Rules provided for by General Resolution No. 731/2018, the Company is subject to the provisions of Section 5 b.1 of Title VII, Chapter II, of the CNV Rules, “Settlement and Clearing Agent - Direct Participant”. In this respect, as set forth in Section 13, Title VII, Chapter II, of the CNV Rules, as of June 30, 2020, the equity of the Company exceeds the minimum equity required by such Rules, which amounts to 18. Additionally, the balancing entry requirement established in Section 15 does not apply to the Company, as established in Section 5 b.1 of the aforementioned regulations.

b) CNV General Resolutions No. 629/2014 and No. 813/2019

Due to General Resolutions No. 629/2014 and No. 813/2019 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 Encalada – Luján de Cuyo – Province of Mendoza.

Additionally, it is placed on record that the detail of the documentation given in custody is available at the registered office, as well as the documents mentioned in section 5, subsection a.3, Section I, Chapter V, Title II of the CNV Rules.

 

46


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

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2020 AND COMPARATIVE INFORMATION (UNAUDITED)

   LOGO

 

36. BALANCES AND TRANSACTIONS WITH RELATED PARTIES

The information detailed in the tables below shows the balances with associates and joint ventures as of June 30, 2020 and December 31, 2019 and transactions with the mentioned parties for the six-month period ended June 30, 2020 and 2019.

 

     June 30, 2020      December 31, 2019  
     Other
receivables
     Trade
receivables
     Accounts
payable
     Contract
liabilities
     Other
receivables
     Trade
receivables
     Accounts
payable
     Contract
liabilities
 
     Current      Current      Current      Current      Current      Current      Current      Current  

Joint Ventures:

                       

YPF EE

     318        843        2,074        498        296        2,278        2,183        679  

Profertil

     6        772        434        —          12        587        114        —    

MEGA

     —          1,047        214        —          —          2,995        350        —    

Refinor

     —          937        3        —          —          956        123        —    

Bizoy S.A.

     —          20        —          —          —          17        —          —    

Petrofaro S.A.

     —          6        —          —          —          6        —          —    

OLCLP

     50        6        149        —          56        59        70        —    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
     374        3,631        2,874        498        364        6,898        2,840        679  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Associates:

                       

CDS

     —          124        —          —          —          1,063        —          —    

YPF Gas

     30        316        94        —          90        317        73        —    

Oldelval

     —          2        557        —          —          77        401        —    

Termap

     —          —          199        —          —          —          182        —    

OTA

     10        —          19        —          9        —          14        —    

OTC

     —          —          —          —          4        —          —          —    

GPA

     —          —          257        —          —          —          99        —    

Oiltanking

     —          1        299        —          —          —          198        —    

Gas Austral S.A.

     —          19        1        —          —          12        1        —    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
     40        462        1,426        —          103        1,469        968        —    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
     414        4,093        4,300        498        467        8,367        3,808        679  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

     For the six-month period ended June 30,  
     2020      2019  
     Revenues      Purchases
and
services
     Net interest
income
(loss)
     Revenues      Purchases
and
services
     Net interest
income
(loss)
 

Joint Ventures:

                 

YPF EE

     1,542        2,190        —          1,929        1,644        —    

Profertil

     2,194        1,827        —          1,866        703        —    

MEGA

     6,013        947        —          5,317        510        —    

Refinor

     932        297        —          1,273        109        (16

Y-GEN I

     —          —          —          5        —          —    

Petrofaro S.A.

     —          —          —          152        23        —    

OLCLP

     28        320        —          3        50        —    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
     10,709        5,581        —          10,545        3,039        (16
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Associates:

                 

CDS

     514        —          7        617        —          —    

YPF Gas

     1,067        109        3        1,045        114        93  

Oldelval

     56        1,359        2        97        907        —    

Termap

     —          561        —          —          545        —    

OTA

     1        26        —          —          30        —    

GPA

     —          654        —          —          222        —    

Oiltanking

     2        690        —          1        581        —    

Gas Austral S.A.

     99        —          —          117        —          —    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
     1,739        3,399        12        1,877        2,399        93  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
     12,448        8,980        12        12,422        5,438        77  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

47


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

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2020 AND COMPARATIVE INFORMATION (UNAUDITED)

   LOGO

36. BALANCES AND TRANSACTIONS WITH RELATED PARTIES (Cont.)

 

Additionally, in the normal course of business, and considering being the main energy group in Argentina, the Group’s client/suppliers portfolio encompasses both private sector entities as well as national public sector entities. As required by IAS 24 “Related party disclosures”, among the major transactions above mentioned the most important are:

 

          Balances     Transactions  
          Receivables / (Liabilities)     Income / (Costs)  
                      For the six-month period
ended June 30,
 

Customers / Suppliers

  

Ref.

   June 30, 2020     December 31, 2019     2020     2019  

SGE

   (1) (16)      20,838       26,223       —         —    

SGE

   (2) (16)      4,686       3,416       1,762       1,780  

SGE

   (3) (16)      219       155       55       542  

SGE

   (4) (16)      198       166       —         7  

SGE

   (5) (16)      613       475       138       —    

SGE

   (6) (16)      401       172       237       268  

SGE

   (7) (16)      5,052       4,417       —         881  

Ministry of Transport

   (8) (16)      3,117       2,056       2,276       2,879  

Secretariat of Industry

   (9) (16)      —         —         —         51  

CAMMESA

   (10)      2,548       627       6,841       3,310  

CAMMESA

   (11)      (1,260     386       (2,899     (1,557

IEASA

   (12)      6,857       5,041       5,138       5,130  

IEASA

   (13)      (685     (505     (55     (64

Aerolíneas Argentinas S.A. and Austral Líneas Aéreas Cielos del Sur S.A.

   (14)      4,316       5,033       4,126       6,873  

ANSES

   (15)      —         —         756       —    

 

(1)

Benefits for the Stimulus Programs for the Additional Injection of Natural Gas.

(2)

Benefits for the Stimulus Program for Investments in Natural Gas Production Developments from Non-Conventional Reservoirs.

(3)

Benefits for the propane gas supply agreement for undiluted propane gas distribution networks.

(4)

Benefits for the Household Program (Programa hogares con garrafa)

(5)

Benefits for recognition of the financial cost generated by payment deferral by providers of the distribution service of natural and undiluted propane gas through networks.

(6)

Procedure to compensate for the lower income that Natural Gas Piping Distribution Service Licensed Companies receive from their users for the benefit of Metrogas.

(7)

Procedure to compensate the payment of the daily differences accumulated on a monthly basis between the price of the gas purchased by Natural Gas Piping Distribution Service Companies and the price of the natural gas included in the respective tariff schemes for the benefit of Metrogas. As of June 30, 2020, 1,647 have been charged to provision and 3,405 are disclosed net of liabilities with other natural gas producing companies. See Note 35.a.

(8)

The compensation for providing diesel to public transport of passengers at a differential price.

(9)

Incentive for domestic manufacturing of capital goods, for the benefit of AESA.

(10)

The provision of fuel oil and natural gas.

(11)

Purchases of energy. As of December 31, 2019, the Group has a credit balance for energy purchases.

(12)

Sale of natural gas, NLG and provision of regasification service of LNG in Escobar.

(13)

The purchase of natural gas and crude oil.

(14)

The provision of jet fuel and natural gas.

(15)

Income recognized by the Work and Production Assistance Program received in benefit of AESA an OPESSA.

(16)

Income recognized under the guidelines of IAS 20.

Additionally, the Group has entered into certain financing and insurance transactions with entities related to the national public sector. Such transactions consist of certain financial transactions that are described in Notes 15 and 21 to these condensed interim consolidated financial statements, and transactions with Nación Seguros S.A. related to certain insurance policies contracts.

On the other hand, the Group holds BONAR 2020 (see Note 34.g to the annual consolidated financial statements) and 2021, classified as “Investments in financial assets”.

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 mentioned investment agreement. See Note 33.b to the annual consolidated financial statements and see Note 34 to these condensed interim consolidated financial statements.

 

48


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

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2020 AND COMPARATIVE INFORMATION (UNAUDITED)

   LOGO

36. BALANCES AND TRANSACTIONS WITH RELATED PARTIES (Cont.)

 

The table below discloses the accrued compensation for the YPF’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 six-month period ended June 30, 2020 and 2019:

 

     For the six-month period
ended June 30,
 
     2020      2019  

Short-term employee benefits(1)

     323        210  

Share-based benefits

     92        44  

Post-retirement benefits

     12        9  

Termination benefits

     231        —    
  

 

 

    

 

 

 
     658        263  
  

 

 

    

 

 

 

 

(1)

Does not include Social Security contributions of 77 and 43 for the six-month period ended June 30, 2020 and 2019, respectively.

37. EMPLOYEE BENEFIT PLANS AND SIMILAR OBLIGATIONS

Note 2.b.10 to the annual consolidated financial statements describes the main characteristics and accounting treatment for benefit plans implemented by the Group.

 

i.

Retirement plan

The total charges recognized under the Retirement Plan amounted to approximately 107 and 78 for the six-month period ended June 30, 2020 and 2019, respectively.

 

ii.

Objective performance bonus programs and performance evaluation programs

The amount charged to expense related to the programs described was 1,581 and 1,586 for the six-month period ended June 30, 2020 and 2019, respectively.

 

iii.

Share-based benefit plan

The amount charged to expense in relation with the share-based plans, which are disclosed according to their nature, was 300 and 217 for the six-month period ended June 30, 2020 and 2019, respectively.

During the six-month period ended on June 30, 2020, the Company has not repurchased its own shares. Likewise, during the six-month period ended on June 30, 2019, the Company has repurchased 411,623 of its own shares for an amount of 280, to comply with the share-based benefits plans mentioned in Note 2.b.10.iii) to the annual consolidated financial statements. The cost of such repurchase appears in the shareholders’ equity under the name “Acquisition cost of treasury shares”, while the nominal value and its adjustment from the monetary re-expression carried out according to the Previous Accounting Principles have been reclassified from the accounts “Subscribed capital” and “Adjustment to contributions” to the accounts “Treasury shares” and “Adjustment to treasury shares”, respectively.

 

49


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

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2020 AND COMPARATIVE INFORMATION (UNAUDITED)

   LOGO

 

38. ASSETS AND LIABILITIES IN CURRENCIES OTHER THAN THE PESO

 

     June 30, 2020      December 31, 2019  
     Amount in
currencies
other than
the Peso
     Exchange
rate in
force(1)
     Total      Amount in
currencies
other than
the Peso
     Exchange
rate in
force(1)
     Total  

Noncurrent assets

                 

Other receivables

                 

U.S. dollar

     1        70.26        81        1        59.69        60  

Bolivian peso

     14        10.09        140        14        8.58        119  

Trade receivables

                 

U.S. dollar

     73        70.26        5,143        220        59.69        13,132  
        

 

 

          

 

 

 

Total noncurrent assets

           5,364              13,311  
        

 

 

          

 

 

 

Current assets

                 

Other receivables

                 

U.S. dollar

     223        70.26        15,634        276        59.69        16,474  

Euro

     4        78.87        280        4        66.85        267  

Chilean peso

     6,570        0.09        591        5,241        0.08        419  

Yen

     106        0.65        69        151        0.55        83  

Trade receivables

                 

U.S. dollar

     811        70.26        56,998        939        59.69        56,030  

Chilean peso

     5,749        0.09        517        17,221        0.08        1,378  

Investments in financial assets

                 

U.S. dollar

     116        70.26        8,119        140        59.69        8,370  

Cash and cash equivalents

                 

U.S. dollar

     522        70.26        36,645        723        59.69        43,172  

Chilean peso

     5,407        0.09        487        1,685        0.08        135  

Bolivian peso

     7        10.09        70        10        8.58        90  
        

 

 

          

 

 

 

Total current assets

           119,410              126,418  
        

 

 

          

 

 

 

Total assets

           124,774              139,729  
        

 

 

          

 

 

 

Noncurrent liabilities

                 

Provisions

                 

U.S. dollar

     2,086        70.46        146,971        2,020        59.89        120,968  

Lease liabilities

                 

U.S. dollar

     589        70.46        41,508        674        59.89        40,388  

Loans

                 

U.S. dollar

     5,663        70.46        399,026        6,863        59.89        411,032  

Other liabilities

                 

U.S. dollar

     11        70.46        757        12        59.89        699  

Accounts payable

                 

U.S. dollar

     4        70.46        254        6        59.89        359  
        

 

 

          

 

 

 

Total noncurrent liabilities

           588,516              573,446  
        

 

 

          

 

 

 

Current liabilities

                 

Provisions

                 

U.S. dollar

     59        70.46        4,163        59        59.89        3,555  

Taxes payable

                 

Chilean peso

     1,202        0.09        108        3,102        0.08        248  

Salaries and social security

                 

U.S. dollar

     3        70.46        192        7        59.89        406  

Lease liabilities

                 

U.S. dollar

     324        70.46        22,796        357        59.89        21,384  

Loans

                 

U.S. dollar

     2,117        70.46        149,181        1,229        59.89        73,599  

Chilean peso

     3,285        0.09        296        2,993        0.08        239  

Other liabilities

                 

U.S. dollar

     21        70.46        1,495        22        59.89        1,310  

Accounts payable

                 

U.S. dollar

     777        70.46        54,722        1,181        59.89        70,711  

Euro

     14        79.27        1,074        16        67.23        1,053  

Chilean peso

     5,112        0.09        460        3,744        0.08        300  

Bolivian peso

     —          10.09        —          7        8.58        60  

Yen

     79        0.65        51        133        0.55        73  
        

 

 

          

 

 

 

Total current liabilities

           234,538              172,938  
        

 

 

          

 

 

 

Total liabilities

           823,054              746,384  
        

 

 

          

 

 

 

 

(1)

Exchange rate in force at June 30, 2020 and December 31, 2019 according to BNA.

 

50


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

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2020 AND COMPARATIVE INFORMATION (UNAUDITED)

   LOGO

 

39. SUBSEQUENT EVENTS

Swap of NO

On July 2, 2020, YPF offered Class XIII NO denominated in US-Dollars, accruing interest at a fixed rate of 8.5% redeemable, maturing in 2025, for a nominal value of up to US$ 950 million and a payment of US$ 100 in cash for each US$ 1,000 in principal amount, to be issued in exchange for Class XLVII NO issued on March 23, 2016 for a nominal value of US$ 1,000 million, maturing in 2021.

Besides, on July 13, 2020, YPF announced certain changes related to the offering, offering Class XIII NO for a nominal value of up to US$ 925 million and a payment of US$ 125 in cash for each US$ 1,000 in principal amount.

On July 31, 2020, the offering finally expired. The nominal value of the Class XLVII NO submitted to the exchange amounted to US$ 587.3 million, representing a swap of 58.73%. As a result of the transaction, YPF issued Class XIII NO for US$ 542.8 million and paid approximately US$ 90 million in cash (including accrued and unpaid interests on Class XLVII NO).

Public securities and public debt restructuring

On August 4, 2020, the Argentine Government reached an agreement with the representatives of the Ad Hoc Group of Argentine Bondholders, Argentina’s Creditors Committee and the Exchange Bondholder Group and other holders. Under the agreement, the Argentine Government will adjust certain payment dates contemplated for eligible bonds in its July 6, 2020 invitation, without increasing the aggregate amount of payments of principal and interest the Argentine Government commits to make. Moreover, the Argentine Government undertakes to adjust certain aspects of collective action clauses of eligible bonds. Finally, in order to execute the agreement, the Argentine Government extends the invitation expiration date to August 24, 2020.

As of the date of issuance of these condensed interim consolidated financial statements, there are no other significant subsequent events that require adjustments or disclosure in the financial statements of the Group as of June 30, 2020, or their description in note to these condensed interim consolidated financial statements, which were not already considered in such consolidated financial statements according to IFRS.

GUILLERMO EMILIO NIELSEN

President                    

 

51


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: August 14, 2020     By:   /s/ Santiago Wesenack
    Name:   Santiago Wesenack
    Title:   Market Relations Officer