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YPF YPF

Filed: 16 Nov 20, 4:06pm
Table of Contents

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 6-K

 

 

Report of Foreign Issuer

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

of the Securities Exchange Act of 1934

For the month of November, 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  ☒

 

 

 


Table of Contents

LOGO

YPF SOCIEDAD ANONIMA

CONDENSED INTERIM CONSOLIDATED

FINANCIAL STATEMENTS AS OF SEPTEMBER 30, 2020

AND COMPARATIVE INFORMATION (UNAUDITED)

 


Table of Contents

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 SEPTEMBER 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:  8 
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   16 
4  Acquisitions and dispositions   16 
5  Financial risk management   17 
6  Segment information   19 
7  Financial instruments by category   21 
8  Intangible assets   22 
9  Property, plant and equipment   23 
10  Right-of-use assets   26 
11  Investments in associates and joint ventures   27 
12  Inventories   31 
13  

Other receivables

   31 
14  

Trade receivables

   31 
15  

Cash and cash equivalents

   32 
16  

Provisions

   32 
17  

Income Tax

   33 
18  

Taxes payable

   34 
19  

Salaries and social security

   34 
20  

Lease liabilities

   35 
21  

Loans

   35 
22  

Other liabilities

   37 
23  

Accounts payable

   37 
24  

Revenues

   37 
25  

Costs

   39 
26  

Expenses by nature

   40 
27  Other net operating results   41 
28  Net financial results   41 
29  Investments in joint operations   41 
30  Shareholders’ equity   42 
31  Earnings per share   42 
32  Issues related to Maxus Entities   43 
33  

Contingent assets and contingent liabilities

   43 
34  

Contractual commitments

   45 
35  

Main regulations and others

   46 
36  

Balances and transactions with related parties

   52 
37  

Employee benefit plans and similar obligations

   54 
38  

Assets and liabilities in currencies other than the Peso

   55 
39  

Subsequent events

   56 


Table of Contents

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 SEPTEMBER 30, 2020 AND COMPARATIVE INFORMATION (UNAUDITED)

  LOGO

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.

DNU

  

Need and Urgency Decree

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


Table of Contents

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 SEPTEMBER 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


Table of Contents

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

 

YPF SOCIEDAD ANONIMA

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

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

(Amounts expressed in millions of Pesos)

  LOGO

 

       September 30,   December 31, 
   Notes   2020   2019 

ASSETS

      

Noncurrent Assets

      

Intangible assets

   8    44,228    37,179 

Property, plant and equipment

   9    1,198,888    1,069,011 

Right-of-use assets

   10    61,417    61,391 

Investments in associates and joint ventures

   11    92,149    67,590 

Deferred income tax assets, net

   17    2,676    1,583 

Other receivables

   13    12,764    11,789 

Trade receivables

   14    8,473    15,325 
    

 

 

   

 

 

 

Total noncurrent assets

     1,420,595    1,263,868 
    

 

 

   

 

 

 

Current Assets

      

Inventories

   12    104,272    80,479 

Contract assets

   24    426    203 

Other receivables

   13    29,670    36,192 

Trade receivables

   14    111,317    118,077 

Investment in financial assets

   7    16,765    8,370 

Cash and cash equivalents

   15    59,641    66,100 
    

 

 

   

 

 

 

Total current assets

     322,091    309,421 
    

 

 

   

 

 

 

TOTAL ASSETS

     1,742,686    1,573,289 
    

 

 

   

 

 

 

SHAREHOLDERS’ EQUITY

      

Shareholders’ contributions

     10,767    10,572 

Reserves, other comprehensive income and retained earnings

     562,055    531,977 
    

 

 

   

 

 

 

Shareholders’ equity attributable to shareholders of the parent company

     572,822    542,549 
    

 

 

   

 

 

 

Non-controlling interest

     6,640    5,550 
    

 

 

   

 

 

 

TOTAL SHAREHOLDERS’ EQUITY

     579,462    548,099 
    

 

 

   

 

 

 

LIABILITIES

      

Noncurrent Liabilities

      

Provisions

   16    191,600    144,768 

Deferred income tax liabilities, net

   17    105,765    97,231 

Contract liabilities

   24    —      294 

Income tax liability

   17    2,682    3,387 

Taxes payable

   18    20    1,428 

Salaries and social security

   19    2,923    —   

Lease liabilities

   20    40,741    40,391 

Loans

   21    480,407    419,651 

Other liabilities

   22    819    703 

Accounts payable

   23    1,832    2,465 
    

 

 

   

 

 

 

Total noncurrent liabilities

     826,789    710,318 
    

 

 

   

 

 

 

Current Liabilities

      

Provisions

   16    6,587    5,460 

Contract liabilities

   24    8,746    7,404 

Income tax liability

   17    1,048    1,964 

Taxes payable

   18    16,008    11,437 

Salaries and social security

   19    12,421    10,204 

Lease liabilities

   20    26,853    21,389 

Loans

   21    143,986    107,109 

Other liabilities

   22    1,548    1,310 

Accounts payable

   23    119,238    148,595 
    

 

 

   

 

 

 

Total current liabilities

     336,435    314,872 
    

 

 

   

 

 

 

TOTAL LIABILITIES

     1,163,224    1,025,190 
    

 

 

   

 

 

 

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY

     1,742,686    1,573,289 
    

 

 

   

 

 

 

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

GUILLERMO EMILIO NIELSEN

President                  

 

3


Table of Contents

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 NINE-MONTH AND THREE-MONTH PERIOD ENDED SEPTEMBER 30, 2020 AND 2019 (UNAUDITED)

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

  LOGO

 

       For the nine-month
period ended September 30,
  For the three-month
period ended September 30,
 
   Notes   2020  2019  2020  2019 

Net income

       

Revenues

   24    481,713   471,685   173,485   180,449 

Costs

   25    (455,089  (388,564  (162,353  (149,599
    

 

 

  

 

 

  

 

 

  

 

 

 

Gross profit

     26,624   83,121   11,132   30,850 
    

 

 

  

 

 

  

 

 

  

 

 

 

Selling expenses

   26    (53,402  (32,935  (16,358  (11,898

Administrative expenses

   26    (23,276  (16,577  (9,144  (6,053

Exploration expenses

   26    (5,074  (4,493  (4,218  (1,916

Impairment of property, plant and equipment and intangible assets

   8-9    (58,834  (41,429  (1,405  (41,429

Other net operating results

   27    11,827   (513  (3,496  (179
    

 

 

  

 

 

  

 

 

  

 

 

 

Operating (loss) / profit

     (102,135  (12,826  (23,489  (30,625
    

 

 

  

 

 

  

 

 

  

 

 

 

Income from equity interests in associates and joint ventures

   11    8,250   3,218   4,530   (296

Financial income

   28    73,874   85,922   22,251   66,120 

Financial loss

   28    (101,200  (64,630  (33,386  (33,967

Other financial results

   28    14,467   (284  3,685   (4,726
    

 

 

  

 

 

  

 

 

  

 

 

 

Net financial results

   28    (12,859  21,008   (7,450  27,427 
    

 

 

  

 

 

  

 

 

  

 

 

 

Net (loss) / profit before income tax

     (106,744  11,400   (26,409  (3,494
    

 

 

  

 

 

  

 

 

  

 

 

 

Income tax

   17    (7,285  (34,423  (8,923  (9,049
    

 

 

  

 

 

  

 

 

  

 

 

 

Net loss for the period

     (114,029  (23,023  (35,332  (12,543
    

 

 

  

 

 

  

 

 

  

 

 

 

Other comprehensive income

       

Items that may be reclassified subsequently to profit or loss:

       

Translation differences from subsidiaries, associates and joint ventures

     (6,279  (7,311  (2,189  (5,751

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

     6,242   5,630   2,480   1,287 

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

       

Translation differences from YPF

     145,234   192,799   45,888   144,672 
    

 

 

  

 

 

  

 

 

  

 

 

 

Other comprehensive income / (loss) for the period

     145,197   191,118   46,179   140,208 
    

 

 

  

 

 

  

 

 

  

 

 

 

Total comprehensive income / (loss) for the period

     31,168   168,095   10,847   127,665 
    

 

 

  

 

 

  

 

 

  

 

 

 

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

       

Shareholders of the parent company

     (113,884  (23,595  (35,466  (12,726

Non-controlling interest

     (145  572   134   183 

Other comprehensive income for the period attributable to:

       

Shareholders of the parent company

     143,962   189,943   45,685   139,876 

Non-controlling interest

     1,235   1,175   494   332 

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

       

Shareholders of the parent company

     30,078   166,348   10,219   127,150 

Non-controlling interest

     1,090   1,747   628   515 

Earnings per share attributable to shareholders of the parent company:

       

Basic and diluted

   31    (290.13  (60.15  (90.29  (32.44

 

(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


Table of Contents

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 NINE-MONTH PERIOD ENDED SEPTEMBER 30, 2020 AND 2019 (UNAUDITED)

(Amounts expressed in millions of Pesos)

  LOGO

 

  For the nine-month period ended September 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)

  —     —     —     —     368   —     —     —     368 

Settlement of share-based benefit plans(2)

  4   7   (4  (7  (670  714   (217  —     (173

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

  —     —     —     —     —     —     —     —     —   

Other comprehensive income

  —     —     —     —     —     —     —     —     —   

Net loss

  —     —      —     —     —     —     —     —     —   
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Balance at the end of the period

  3,928   6,092   5   9   (185  891   (613  640   10,767 
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 
  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)

  —     —     —     —     —     —     368   —     368 

Settlement of share-based benefit plans (2)

  —     —     —     —     —     —     (173  —     (173

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

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

Other comprehensive income

  —     —     —     —     143,962   —     143,962   1,235   145,197 

Net loss

  —     —     —     —     —     (113,884  (113,884  (145  (114,029
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Balance at the end of the period

  2,007   3,700   8,934   550   660,748(1)   (113,884  572,822   6,640   579,462 
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

 

(1)

Includes 673,379 corresponding to the effect of the translation of the financial statements of YPF and, (35,970) 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 23,339 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


Table of Contents

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 NINE-MONTH PERIOD ENDED SEPTEMBER 30, 2020 AND 2019 (UNAUDITED) (Cont.)

(Amounts expressed in millions of Pesos)

  LOGO

 

  For the nine-month period ended September 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)

  —     —     —     —     371   —     —     —     371 

Repurchase of treasury shares

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

Settlement of share-based benefit plans(2)

  5   7   (5  (7  (491  446   (114  —     (159

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

  3,924   6,085   9   16   (5  177   (396  640   10,450 
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 
  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)

  —     —     —     —     —     —     371   —     371 

Repurchase of treasury shares

  —     —     —     —     —     —     (280  —     (280

Settlement of share-based benefit plans (2)

  —     —     —     —     —     —     (159  —     (159

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

  —     —     —     —     189,943   —     189,943   1,175   191,118 

Net income / (loss)

  —     —     —     —     —     (23,595  (23,595  572   (23,023
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Balance at the end of the period

  2,007   2,500   44,255   500   487,063(1)   (23,595  523,180   4,904   528,084 
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

 

(1)

Includes 500,519 corresponding to the effect of the translation of the financial statements of YPF and, (28,991) 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 15,535 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


Table of Contents

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 NINE-MONTH PERIOD ENDED SEPTEMBER 30, 2020 AND 2019 (UNAUDITED)

(Amounts expressed in millions of Pesos)

  LOGO

 

   For the nine-month period
ended September 30,
 
   2020  2019 

Operating activities:

   

Net loss

   (114,029  (23,023

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

   

Income from equity interest in associates and joint ventures

   (8,250  (3,218

Depreciation of property, plant and equipment

   133,947   99,220 

Depreciation of right-of-use assets

   13,382   7,202 

Amortization of intangible assets

   2,409   1,665 

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

   17,422   14,450 

Charge on income tax

   7,285   34,423 

Net increase in provisions

   23,694   1,091 

Impairment of property, plant and equipment and intangible assets

   58,834   41,429 

Exchange differences, interest and other

   8,930   (13,560

Share-based benefit plan

   368   371 

Accrued insurance

   (3,189  (249

Result from assignment of interest in areas

   (12,233  (965

Result from debt exchange

   2,097   —   

Result from financial instruments exchange

   (1,330  —   

Changes in assets and liabilities:

   

Trade receivables

   18,510   (15,130

Other receivables

   9,147   (9,789

Inventories

   (929  (10,302

Accounts payable

   (25,353  22,255 

Taxes payables

   2,042   2,288 

Salaries and social security

   5,270   2,167 

Other liabilities

   212   699 

Decrease in provisions included in liabilities due to payment/use

   (1,919  (3,417

Contract assets

   (256  175 

Contract liabilities

   1,922   656 

Dividends received

   2,494   811 

Proceeds from collection of business interruption insurance

   3,034   758 

Income tax payments

   (2,164  (6,314
  

 

 

  

 

 

 

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

   141,347   143,693 
  

 

 

  

 

 

 

Investing activities:(3)

   

Acquisition of property, plant and equipment and intangible assets

   (81,880  (114,864

Contributions and acquisitions of interests in associates and joint ventures

   —     (4,731

Proceeds from sales of financial assets

   30,885   957 

Payment from purchase of financial assets

   (28,841  —   

Interests received from financial assets

   15   452 

Proceeds from assignment of interest in areas

   13,867   319 
  

 

 

  

 

 

 

Net cash flows used in investing activities

   (65,954  (117,867
  

 

 

  

 

 

 

Financing activities:(3)

   

Payments of loans

   (129,668  (70,061

Payments of interest

   (47,941  (29,251

Proceeds from loans

   102,684   70,916 

Repurchase of treasury shares

   —     (280

Payments of leases

   (15,470  (9,961

Payment of interest in relation to income tax

   (608  (250

Dividends paid

   —     (2,300
  

 

 

  

 

 

 

Net cash flows used in financing activities

   (91,003  (41,187
  

 

 

  

 

 

 

Translation differences of cash and cash equivalents

   9,151   21,662 
  

 

 

  

 

 

 

Net (decrease) / increase in cash and cash equivalents

   (6,459  6,301 
  

 

 

  

 

 

 

Cash and cash equivalents at the beginning of the fiscal year

   66,100   46,028 

Cash and cash equivalents at the end of period

   59,641   52,329 
  

 

 

  

 

 

 

Net (decrease) / increase in cash and cash equivalents

   (6,459  6,301 
  

 

 

  

 

 

 

 

(1)

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

(2)

Includes 8,537 and 6,737 for the nine-month period ended September 30, 2020 and 2019, respectively, for payment of short-term leases and 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 nine-month period
ended September 30,
 
   2020   2019 

Unpaid acquisitions of property, plant and equipment

   8,489    13,626 

Hydrocarbon wells abandonment obligation costs’ recalculation

   —      (1,984

Additions of right-of-use assets

   4,245    25,091 

Capitalization of amortization of right-of-use assets

   2,830    1,246 

Capitalization of financial accretion for lease liabilities

   707    125 

Debt capitalization of joint ventures

   —      738 

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

GUILLERMO EMILIO NIELSEN

President                  

 

 

7


Table of Contents

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 SEPTEMBER 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 September 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


Table of Contents

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 SEPTEMBER 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 September 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 nine-month period ended September 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 November 10, 2020.

These condensed interim consolidated financial statements corresponding to the nine-month period ended on September 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 nine-month period ended on September 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


Table of Contents

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 SEPTEMBER 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 September 30, 2020, as specified in Note 2.b.26 to the annual consolidated financial statements.

Standards and interpretations issued as from January 1, 2020 by the IASB whose implementation is not mandatory as of the closing of these condensed interim consolidated financial statements and, therefore, have not been adopted by the Group

 

  

Amendments to IAS 1 – Classification of liabilities

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 in 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


Table of Contents

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 SEPTEMBER 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


Table of Contents

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 SEPTEMBER 30, 2020 AND COMPARATIVE INFORMATION (UNAUDITED)

  LOGO

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

 

  

Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 17 and IFRS 16 – Interest Rate Benchmark Reform Phase 2.

On August 2020, the IASB issued amendments applicable to fiscal years beginning on or after January 1, 2021, allowing for their early application.

The purpose of these amendments is to provide entities with practical solutions to deal with the effects of the transition to alternative benchmark interest rates, when they generate changes in contractual cash flows or in the hedging relationships.

The amendments issued take place in the following key areas:

-Financial assets, financial liabilities and lease liabilities: a practical solution was issued for financial assets and liabilities measured at amortized cost which are modified as a direct consequence of the interbank benchmark interest rate reform. As a practical solution, the IASB establishes that these amendments are not to be treated as specified under IFRS 9 for changes to contractual cash flows, but rather as established under such standard for assets and liabilities at variable rate. This accounting treatment comprises the prospective revaluation of these financial instruments at the revised effective interest rate. This only applies when the change is a direct consequence of the rate reform and the basis used to determine the cash flows is economically equivalent to the basis immediately preceding rate replacement. In the case of lease liabilities revalued based on an interest rate that is being replaced with an alternative interest rate, a similar treatment is proposed.

-Hedges: The IASB issued further practical solutions in addition to those issued in Phase 1, seeking to prevent the benchmark rate reform from discontinuing hedge accounting or the designation of a new relationship of this type. They are the hedging relationships (and related documentation) must be amended to reflect the effects on i) the hedged item, ii) the hedging instrument and iii) the hedged risk. Any valuation adjustments resulting from the amendments are recognized as part of the ineffectiveness.

-Disclosure: The information disclosed must allow the user to understand the nature and extent of the risks to which the entity is exposed and how those risks generated by the interbank benchmark rate reform will be managed. The progress and management of the transition to alternative benchmark rates is also required to be informed.

The Group is evaluating the impact the application of these modifications may have on its financial statements.

 

  

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.

 

12


Table of Contents

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 SEPTEMBER 30, 2020 AND COMPARATIVE INFORMATION (UNAUDITED)

  LOGO

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

 

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

 

Standard

  

Amended Subject

  

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 material 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 carry out 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.

 

13


Table of Contents

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 SEPTEMBER 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.

Since the implementation of these measures, recurring sales of 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. During the month of October, due to the gradual recovery of activity, these declines are within the 30%, 15% and 90%, respectively. Despite the recovery since certain flexibilization of the 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.

 

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Table of Contents

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 SEPTEMBER 30, 2020 AND COMPARATIVE INFORMATION (UNAUDITED)

  LOGO

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

 

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 domestic level. 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.

As of September 30, 2020, based on the fact that the critical assumptions used to estimate the value in use of the mentioned CGUs have not had significant changes, and considering the sensitivities run, the Group has not recognized additional charges for impairment or recovery of such impairments.

 

  

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% (50,722), 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 nine-month period ended on September 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.

 

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Table of Contents

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 SEPTEMBER 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 39), 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 nine-month period ended on September 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 Argentina 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”.

 

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Table of Contents

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 SEPTEMBER 30, 2020 AND COMPARATIVE INFORMATION (UNAUDITED)

  LOGO

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 variation, on account of which the entity decided to operate with derivative financial instruments as a hedge following the accounting policy defined in Note 2.b.17) to the annual consolidated financial statements.

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

 

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Table of Contents

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 SEPTEMBER 30, 2020 AND COMPARATIVE INFORMATION (UNAUDITED)

  LOGO

5. FINANCIAL RISK MANAGMENT (Cont.)

 

  

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.

Based on the restrictions established by the BCRA for access to the foreign exchange market, specifically since the publication of Communication No. 7,106 that refers to maturities of principal amounts of offshore debts and the issuance of debt securities denominated in foreign currency scheduled between October 15, 2020 and March 31, 2021, the Group is evaluating alternatives to meet its obligations.

Besides, several loans of the Group contain Covenants, which include certain financial commitments and a negative impact due to material adverse judgments, among others. The Group monitors compliance with the Covenants on a quarterly basis. As of September 30, 2020, the Group had exceeded the leverage ratio required under the Covenants, and therefore, even though there is no acceleration of maturities of due amounts and restrictions to refinance existing loans, the Group has certain limitations in its capacity to incur further debt. However, there are certain exceptions that might allow the Group certain flexibility to manage its debt.

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 September 30, 2020, financial creditors formally accepted to waive Metrogas the contractual obligation to comply with such financial ratio, which should not be lower than 3.00 and be kept not lower than 1.50 as of September 30, 2020.

 

  

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 accounts receivables related to the Decree No. 1053/2018. See Note 35.a.

 

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Table of Contents

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 SEPTEMBER 30, 2020 AND COMPARATIVE INFORMATION (UNAUDITED)

  LOGO

 

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.

 

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Table of Contents

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 SEPTEMBER 30, 2020 AND COMPARATIVE INFORMATION (UNAUDITED)

  LOGO

6. SEGMENT INFORMATION (Cont.)

 

 

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

Revenues from sales

   2,439   93,193   381,454   9,458   (4,831  481,713 

Revenues from intersegment sales

   211,495   6,275   2,469   18,423   (238,662  —   
  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Revenues

   213,934   99,468   383,923   27,881   (243,493  481,713 
  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Operating profit / (loss)

   (86,188  (8,389  (3,915  (15,685  12,042   (102,135

Income from equity interests in associates and joint ventures

   —     5,315   2,935   —     —     8,250 

Depreciation of property, plant and equipment

   102,025(2)   1,327   25,168   5,427   —     133,947 

Impairment of property, plant and equipment and intangible assets

   58,695   62   —     77   —     58,834 

Acquisition of property, plant and equipment

   48,062   3,862   12,935   3,534   —     68,393 

Assets

   784,815   222,694   588,668   138,742   7,767   1,742,686 
For the nine-month period ended September 30, 2019       

Revenues from sales

   1,969   92,324   368,109   13,518   (4,235  471,685 

Revenues from intersegment sales

   204,357   6,814   2,448   17,819   (231,438  —   
  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Revenues

   206,326   99,138   370,557   31,337   (235,673  471,685 
  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Operating profit / (loss)

   (37,660  2,543   20,126   (8,878  11,043   (12,826

Income from equity interests in associates and joint ventures

   —     2,094   1,124   —     —     3,218 

Depreciation of property, plant and equipment

   82,129(2)   979   13,522   2,590   —     99,220 

Impairment of property, plant and equipment

   40,561   868   —     —     —     41,429 

Acquisition of property, plant and equipment

   90,993   3,830   12,742   3,931   —     111,496 
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.

 

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

 

YPF SOCIEDAD ANONIMA

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

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

  LOGO

 

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 September 30, 2020 and December 31, 2019, and their allocation to their fair value levels:

 

   As of September 30, 2020 

Financial Assets

  Level 1   Level 2   Level 3   Total 

Investments in financial assets(1):

        

- Public securities

   9,212    —      —      9,212 
  

 

 

   

 

 

   

 

 

   

 

 

 
   9,212    —      —      9,212 
  

 

 

   

 

 

   

 

 

   

 

 

 

Cash and cash equivalents:

        

- Mutual funds

   29,863    —      —      29,863 
  

 

 

   

 

 

   

 

 

   

 

 

 
   29,863    —      —      29,863 
  

 

 

   

 

 

   

 

 

   

 

 

 
   39,075    —      —      39,075 
  

 

 

   

 

 

   

 

 

   

 

 

 

(1)   Additionally, the Group has Treasury Bills as financial assets measured at amortized cost of 7,553 as of September 30, 2020.

    

   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. 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. On the same date, the Argentine Government failed to pay interest coupons due on certain global bonds, among which were BONAR 2021. 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.

 

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

 

YPF SOCIEDAD ANONIMA

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

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

  LOGO

7. FINANCIAL INSTRUMENTS BY CATEGORY (Cont.)

 

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. On August 18, 2020, the Argentine Government issued Decree No. 676/2020, amending the terms and conditions of the proposal in order to reflect the improvements agreed with the creditors under foreign law.

On August 31, 2020, the Argentine Government informed the results of the restructuring of the Public Securities issued under foreign law, announcing it had obtained the required consents to exchange and/or modify 99.01% of the total outstanding principal amount of all the series of eligible bonds issued under the 2005 and 2016 Indenture.

As a result of this deal, YPF exchanged its BONAR 2020 and BONAR 2021 bonds for the new Bonds 2029 and 2030, which are valued at fair value with changes in results, and recorded a gain of 1,330. (See Note 28).

Fair value estimates

From December 31, 2019 until September 30, 2020, there have been significant changes mainly in macroeconomic circumstances (mainly variations 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 nine-month period ended September 30, 2020, there were no transfers between the different hierarchies used to determine the fair value of the Group’s financial instruments.

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 493,607 and 476,750 as of September 30, 2020 and December 31, 2019, respectively.

The fair value of other receivables, trade receivables, financial instruments at amortized cost, cash and cash equivalents, other liabilities and accounts payable do not differ significantly from their book value.

8. INTANGIBLE ASSETS

 

   September 30, 2020   December 31, 2019 

Net book value of intangible assets

   46,151    37,608 

Provision for impairment of intangible assets

   (1,923   (429
  

 

 

   

 

 

 
   44,228    37,179 
  

 

 

   

 

 

 

 

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

 

YPF SOCIEDAD ANONIMA

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

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

  LOGO

8. INTANGIBLE ASSETS (Cont.)

 

The evolution of the Group’s intangible assets for the nine-month period ended September 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

   560    —     487    1,047 

Translation effect

   14,205    4,476   5,874    24,555 

Adjustment for inflation(1)

   —      —     663    663 

Decreases and reclassifications

   (1   (313  319    5 

Accumulated amortization

       

Increases

   1,877    —     532    2,409 

Translation effect

   9,566    —     5,595    15,161 

Adjustment for inflation(1)

   —      —     157    157 

Decreases and reclassifications

   —      —     —      —   

Cost

   66,700    20,818   31,646    119,164 

Accumulated amortization

   45,733    —     27,280    73,013 
  

 

 

   

 

 

  

 

 

   

 

 

 

Balance as of September 30, 2020

   20,967    20,818   4,366    46,151 
  

 

 

   

 

 

  

 

 

   

 

 

 

 

(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.

Set forth below is the evolution of the provision for impairment of intangible assets for the nine-month period ended on September 30, 2020 and for the year ended December 31, 2019:

 

   Provision for
impairment of
intangible assets
 

Balance as of December 31, 2018

   —   

Increase charged to loss

   429 
  

 

 

 

Balance as of December 31, 2019

   429 
  

 

 

 

Increase charged to loss

   1,399 

Adjustment for inflation(1)

   95 
  

 

 

 

Balance as of September 30, 2020

   1,923 
  

 

 

 

 

(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.

9. PROPERTY, PLANT AND EQUIPMENT

 

   September 30, 2020   December 31, 2019 

Net book value of property, plant and equipment

   1,337,172    1,156,950 

Provision for obsolescence of materials and equipment

   (8,411   (6,610

Provision for impairment of property, plant and equipment

   (129,873   (81,329
  

 

 

   

 

 

 
   1,198,888    1,069,011 
  

 

 

   

 

 

 

 

23


Table of Contents

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 SEPTEMBER 30, 2020 AND COMPARATIVE INFORMATION (UNAUDITED)

  LOGO

9. PROPERTY, PLANT AND EQUIPMENT (Cont.)

 

Changes in Group’s property, plant and equipment for the nine-month period ended September 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

   33    502   603   9   24,609   40,702   113   114   —     1,587   121   68,393(5) 

Translation effect

   18,431    742,816   130,296   6,745   16,551   42,666   2,163   11,392   20,236   —     10,087   1,001,383 

Adjustment for inflation (6)

   2,253    —     —     565   259   1,591   —     337   —     9,951   2,126   17,082 

Decreases and reclassifications

   1,399    67,526   9,666   278   (19,228  (86,528  (9,020  3,800   4,429   1,062   69   (26,547)(7) 

Accumulated depreciation

              

Increases

   1,521    135,242   20,162   1,220   —     —     —     2,903   3,148   915   1,153   166,264 

Translation effect

   8,751    595,962   73,744   4,599   —     —     —     9,510   12,452   —     7,467   712,485 

Adjustment for inflation (6)

   1,129    —     —     328   —     —     —     306   —     5,322   1,550   8,635 

Decreases and reclassifications

   —      (7,010  —     (226  —     —     —     (2  —     (52  (5  (7,295)(7) 

Cost

   99,309    3,499,397   613,195   34,639   84,614   193,016   4,642   56,660   94,800   57,243   59,109   4,796,624 

Accumulated depreciation

   47,954    2,849,782   355,871   23,872   —     —     —     47,834   59,871   30,062   44,206   3,459,452 
  

 

 

   

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Balance as of September 30, 2020

   51,355    649,615(1)   257,324   10,767   84,614   193,016   4,642(2)   8,826   34,929   27,181   14,903   1,337,172 
  

 

 

   

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

 

(1)

Includes 25,447 and 22,343 of mineral property as of September 30, 2020 and December 31, 2019 respectively.

(2)

As of September 30, 2020, there are 9 exploratory wells in progress. During the nine-month period ended on such date, 11 wells were transferred to properties with proven reserves in the mining property, wells and related equipment account and 4 wells were charged to exploratory expense.

(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 684 and 1,041 corresponding to short-term leases and the variable charge of leases related to the underlying asset return/use, respectively. Additionally, it includes 2,830 and 707 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.

 

24


Table of Contents

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 SEPTEMBER 30, 2020 AND COMPARATIVE INFORMATION (UNAUDITED)

  LOGO

9. PROPERTY, PLANT AND EQUIPMENT (Cont.)

 

The Group capitalizes the financial cost of loans as part of the cost of the assets. For the nine-month period ended September 30, 2020 and 2019, the rate of capitalization was 9.93% and 10.24%, respectively, and the amount capitalized amounted to 615 and 678, respectively, for the period mentioned above.

Set forth below is the evolution of the provision for obsolescence of materials and equipment for the nine-month period ended on September 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 loss

   410 

Decreases charged to profit

   (22

Amounts incurred due to utilization

   (48

Translation differences

   2,315 
  

 

 

 

Balance as of December 31, 2019

   6,610 
  

 

 

 

Increase charged to loss

   9 

Decreases charged to profit

   (1

Amounts incurred due to utilization

   (2

Translation differences

   1,795 
  

 

 

 

Balance as of September 30, 2020

   8,411 
  

 

 

 

Set forth below is the evolution of the provision for impairment of property, plant and equipment for the nine-month period ended on September 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 loss

   41,429(1) 

Depreciation

   (17,435

Translation differences

   20,274 
  

 

 

 

Balance as of December 31, 2019

   81,329 
  

 

 

 

Increase charged to loss

   57,435(3) 

Depreciation

   (32,317)(2) 

Translation differences

   23,426 
  

 

 

 

Balance as of September 30, 2020

   129,873 
  

 

 

 

 

(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.

 

25


Table of Contents

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 SEPTEMBER 30, 2020 AND COMPARATIVE INFORMATION (UNAUDITED)

  LOGO

 

10. RIGHT-OF-USE ASSETS

The evolution of the Group’s right-of-use assets for the nine-month period ended September 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

   10   1,930   2,175   97   33   4,245 

Translation differences

   272   6,465   9,039   1,249   3,611   20,636 

Adjustment for inflation(3)

   4   —     —     201   —     205 

Decreases and reclassifications

   (90  (5,610  (1,710  —     —     (7,410

Accumulated depreciation

       

Increases

   233   5,491   4,977   690   4,821   16,212(2) 

Translation differences

   94   2,467   1,624   229   1,453   5,867 

Adjustment for inflation(3)

   3   —     —     43   —     46 

Decreases and reclassifications

   (10  (3,960  (505  —     —     (4,475

Cost

   1,222   26,071   42,470   6,970   16,826   93,559 

Accumulated depreciation

   573   10,680   9,837   1,739   9,313   32,142 
  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Balance as of September 30, 2020

   649   15,391   32,633   5,231   7,513   61,417 
  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

 

(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 13,382 that were charged to “Depreciation of right-of-use assets” in the comprehensive statement of income (see Note 26) and 2,830 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.

 

26


Table of Contents

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 SEPTEMBER 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 September 30, 2020 and December 31, 2019:

 

   September 30,
2020
   December 31,
2019
 

Amount of investments in associates

   8,476    6,419 

Amount of investments in joint ventures

   83,685    61,183 

Provision for impairment of investments in associates and joint ventures

   (12   (12
  

 

 

   

 

 

 
   92,149    67,590 
  

 

 

   

 

 

 

The main movements during the nine-month period ended September 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

   8,250 

Translation differences

   17,095 

Distributed dividends

   (2,494

Adjustment for inflation(1)

   1,708 
  

 

 

 

Balance as of September 30, 2020

   92,149 
  

 

 

 

 

(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.

 

27


Table of Contents

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 SEPTEMBER 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 nine-month period ended September 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 nine-month period
ended September 30,
   For the nine-month period
ended September 30,
 
   2020   2019   2020   2019 

Net income

   1,032    1,350    7,218    1,868 

Other comprehensive income

   1,744    635    17,059    17,684 
  

 

 

   

 

 

   

 

 

   

 

 

 

Comprehensive income for the period

   2,776    1,985    24,277    19,552 
  

 

 

   

 

 

   

 

 

   

 

 

 

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 September 30, 2020 and December 31, 2019, as well as the results for the nine-month period ended September 30, 2020 and 2019, are detailed below:

 

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

Noncurrent assets

   130,917    96,219 

Current assets

   26,368    26,622 
  

 

 

   

 

 

 

Total assets

   157,285    122,841 
  

 

 

   

 

 

 

Noncurrent liabilities

   65,151    57,799 

Current liabilities

   29,911    19,503 
  

 

 

   

 

 

 

Total liabilities

   95,062    77,302 
  

 

 

   

 

 

 

Total shareholders’ equity

   62,223    45,539 
  

 

 

   

 

 

 
   For the nine-month period ended
September 30,
 
   2020(1)   2019(1) 

Revenues

   14,486    10,910 

Costs

   (6,757   (5,198
  

 

 

   

 

 

 

Gross profit

   7,729    5,712 
  

 

 

   

 

 

 

Operating profit

   6,404    4,762 

Income from equity interests in associates and joint ventures

   204    287 

Net financial results

   (160   (831
  

 

 

   

 

 

 

Net profit before income tax

   6,448    4,218 
  

 

 

   

 

 

 

Income tax

   (2,448   (2,055
  

 

 

   

 

 

 

Net profit

   4,000    2,163 
  

 

 

   

 

 

 

 

(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.

 

28


Table of Contents

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 SEPTEMBER 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  09-30-20   15   —     99   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.  09-30-20   61,664   (5  (16,354  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  09-30-20   164   (703  4,592   99.99

A-Evangelista S.A.

  Common   $1   306,818,702  Engineering and construction services Macacha Güemes 515, Buenos Aires, Argentina  09-30-20   307   (2,731  (3,585  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.  09-30-20   569   (1,146  17,530   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  09-30-20   3,474   (297  2,460   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  09-30-20   459   46   3,383   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  09-30-20   236   (78  15   100.00

 

29


Table of Contents

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 SEPTEMBER 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:

 

  09-30-2020  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   47,568   1,085  Exploration, exploitation, industrialization and marketing of hydrocarbons and generation, transport and marketing of electric energy Av. Córdoba 111, P 14° , Buenos Aires, Argentina  09-30-20   3,747   4,000   62,223   75.00  35,382 

Compañía Mega S.A.(6)

  Common  $1   244,246,140   6,705   —    Separation, fractionation and transportation of natural gas liquids San Martín 344, P 10º , Buenos Aires, Argentina  09-30-20   643   1,148   17,694   38.00  5,211 

Profertil S.A.(6)

  Common  $1   391,291,320   14,514   —    Production and marketing of fertilizers Manuela Sáenz 323, P 8° , Buenos Aires, Argentina  06-30-20   783   1,808   29,392   50.00  10,778 

Refinería del Norte S.A.

  Common  $1   45,803,655   1,998   —    Refining Maipú 1, P 2º , Buenos Aires, Argentina  06-30-20   92   (732  3,930   50.00  1,881 

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

  Common  $1   738,139,164   1,099   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  09-30-20   868   (158  954   85.00  762 

CT Barragán S.A.(6)

  Common  $1   4,279,033,952   11,310   4,348  Production and generation of electric energy Maipú 1, Buenos Aires, Argentina  09-30-20   8,558   4,933   22,648   50.00  6,799 
    

 

 

  

 

 

         

 

 

 
     83,194   6,171          60,813 
    

 

 

  

 

 

         

 

 

 

Associates:

             

Oleoductos del Valle S.A.

  Common  $10   4,072,749   2,602   —    Oil transportation by pipeline Maipú 1210, P 8º , Buenos Aires, Argentina  06-30-20   110   1,059   5,970   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  06-30-20   14   280   3,107   33.15  711 

Oiltanking Ebytem S.A.(6)

  Common  $10   351,167   971   —    Hydrocarbon transportation and storage Terminal Marítima Puerto Rosales – Province of Buenos Aires, Argentina.  09-30-20   12   710   3,056   30.00  871 

Central Dock Sud S.A.

  Common  $0.01   11,869,095,145   1,800   —    Electric power generation and bulk marketing San Martin 140, P 2° , Buenos Aires, Argentina  09-30-20   1,231   594   17,918   10.25%(4)   1,542 

YPF Gas S.A.

  Common  $1   59,821,434   1,369   —    Gas fractionation, bottling, distribution and transport for industrial and/or residential use Macacha Güemes 515, P 3º , Buenos Aires, Argentina  06-30-20   176   559   5,727   33.99  965 

Other companies:

             

Other (3)

  —     —  —     —     1,195   648  —   —    —     —     —     —     —     922 
    

 

 

  

 

 

         

 

 

 
     8,967   648          6,789 
    

 

 

  

 

 

         

 

 

 
     92,161   6,819          67,602 
    

 

 

  

 

 

         

 

 

 

 

(1)

Corresponds to cost, 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 Trasandino (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.

 

30


Table of Contents

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 SEPTEMBER 30, 2020 AND COMPARATIVE INFORMATION (UNAUDITED)

  LOGO

 

12. INVENTORIES

 

   September 30,
2020
  December 31,
2019
 

Refined products

   64,018   50,563 

Crude oil and natural gas

   33,956   24,756 

Products in process

   2,658   2,259 

Raw materials, packaging materials and others

   3,640   2,901 
  

 

 

  

 

 

 
   104,272 (1)   80,479 (1) 
  

 

 

  

 

 

 

 

(1)

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

13. OTHER RECEIVABLES

 

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

Receivables from services

   442    2,624    455    2,706 

Tax credit and export rebates

   9,368    7,192    6,896    6,076 

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

   739    820    2,435    3,288 

Collateral deposits

   2    1,298    2    640 

Prepaid expenses

   693    2,009    603    2,370 

Advances and loans to employees

   16    334    29    596 

Advances to suppliers and custom agents (2)

   —      9,715    —      10,896 

Receivables with partners in JO

   2,651    3,048    2,248    7,932 

Insurance receivables

   —      970    —      498 

Miscellaneous

   14    1,731    45    1,255 
  

 

 

   

 

 

   

 

 

   

 

 

 
   13,925    29,741    12,713    36,257 

Provision for other doubtful receivables

   (1,161   (71   (924   (65
  

 

 

   

 

 

   

 

 

   

 

 

 
   12,764    29,670    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

 

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

Accounts receivable and related parties(1)(2)

   10,057    127,032    15,325    124,657 

Provision for doubtful trade receivables

   (1,584   (15,715   —      (6,580
  

 

 

   

 

 

   

 

 

   

 

 

 
   8,473    111,317    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 nine-month period ended on September 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)   8,649(2) 

Decreases charged to income

   —     (566

Translation differences

   —     509 

Result from net monetary position(1)

   —     (101

Reclassifications

   (644  644 
  

 

 

  

 

 

 

Balance as of September 30, 2020

   1,584   15,715 
  

 

 

  

 

 

 

 

(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 8,433 corresponding to credits with natural gas distributors for the accumulated daily differences pursuant to Decree No. 1053/2018. See Note 35.a.

 

31


Table of Contents

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 SEPTEMBER 30, 2020 AND COMPARATIVE INFORMATION (UNAUDITED)

  LOGO

 

15. CASH AND CASH EQUIVALENTS

 

   September 30, 2020   December 31, 2019 

Cash and banks

   11,603    6,983 

Short-term investments(1)

   18,175    52,079 

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

   29,863    7,038 
  

 

 

   

 

 

 
   59,641    66,100 
  

 

 

   

 

 

 

 

(1)

Includes 8,537 and 10,043 of fixed-term deposits and other investments with the BNA as of September 30, 2020 and December 31, 2019, respectively.

(2)

See Note 7.

16. PROVISIONS

Changes in the Group’s provisions for the nine-month period ended September 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

   7,213(3)   144   1,369   —     7,983   —     16,565   144 

Decreases charged to income

   (914  (659  (78  —     —     —     (992  (659

Amounts incurred due to payments/utilization

   (22  (88  —     (844  —     (965  (22  (1,897

Net exchange and translation differences

   6,123   326   364   9   27,275   628   33,762   963 

Result from net monetary position(4)

   (30  —     —     —     —     —     (30  —   

Reclassifications and other movements

   (558  683   (939  939   (954  954   (2,451  2,576 
  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Balance as of September 30, 2020

   55,645   1,691   4,544   2,014   131,411   2,882   191,600   6,587 
  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

 

(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. Updates for the nine-month period ended September 30, 2020 are described below:

 

  

Claims arising from restrictions in the natural gas market

 

  

Transportadora de Gas del Norte S.A. (“TGN”)

On October 16, 2020, YPF was notified of the judgment rendered by the lower court, which resolved:

 

i)

to declare abstract the claim to fulfill the firm gas transportation agreement (the “Agreement”), filed by TGN;

 

ii)

to partially grant the claim filed in the case for fulfillment of the Agreement, and order YPF to pay for unpaid invoices, in an amount to be determined by the designated accounting expert at the stage of enforcement of judgment, plus interest and court fees;

 

iii)

to admit the claim for damages and order YPF to pay the amount of US$ 231 million plus interest and court fees.

On October 22, 2020, YPF filed an appeal against the lower court’s decision, which, as of the date of these financial statements has not been granted.

 

32


Table of Contents

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 SEPTEMBER 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 nine-month period ended September 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 nine-month period ended September 30, 2020 and 2019 is as follows:

 

   For the nine-month period
ended September 30,
 
   2020   2019 

Current income tax

   (798   (1,144

Deferred income tax

   (6,487   (12,440)(1) 
  

 

 

   

 

 

 

Subtotal

   (7,285   (13,584
  

 

 

   

 

 

 

Income tax – Well abandonment

   —      (16,239)(2) 

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

   —      (4,600)(3) 
  

 

 

   

 

 

 
   (7,285   (34,423
  

 

 

   

 

 

 

 

(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 nine-month period ended September 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 nine-month period
ended September 30,
 
   2020  2019 

Net income before income tax

   (106,744  11,400 

Statutory tax rate

   30  30
  

 

 

  

 

 

 

Statutory tax rate applied to net income before income tax

   32,023   (3,420

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

   (43,376  (17,244

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

   7,513   9,284 

Effect of the valuation of inventories

   (5,842  (10,139

Income on investments in associates and joint ventures

   2,475   965 

Effect of tax rate change(2)

   (5,449  8,837 

Dispute associated to cost deduction for wells abandonment

   —     (5,175

Interest related to the payment facility plan for cost deduction for wells abandonment

   —     1,333 

Miscellaneous

   5,371   1,975 
  

 

 

  

 

 

 

Income tax

   (7,285  (13,584
  

 

 

  

 

 

 

 

 

(1)

Includes the effect of tax inflation adjustments.

(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 1,048 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 2,682 as non-current income tax payable, which mainly include 2,676 corresponding to the 35 installments related to the mentioned plan.

 

33


Table of Contents

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 SEPTEMBER 30, 2020 AND COMPARATIVE INFORMATION (UNAUDITED)

  LOGO

17. INCOME TAX (Cont.)

 

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

 

   September 30,
2020
  December 31,
2019
 

Deferred tax assets

   

Provisions and other non-deductible liabilities

   11,940   5,344 

Tax losses carryforward

   76,690   52,443 

Miscellaneous

   1,234   937 
  

 

 

  

 

 

 

Total deferred tax assets

   89,864   58,724 
  

 

 

  

 

 

 

Deferred tax liabilities

   

Property, plant and equipment

   (126,494  (110,704

Adjustment for tax inflation

   (61,576  (38,177

Miscellaneous

   (4,883  (5,491
  

 

 

  

 

 

 

Total deferred tax liabilities

   (192,953  (154,372
  

 

 

  

 

 

 

Total Net deferred tax

   (103,089)(1)   (95,648)(1) 
  

 

 

  

 

 

 

 

(1)

Includes (1,207) and (1,523) as of September 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 September 30, 2020 and December 31, 2019, there are no significant deferred tax assets which are not recognized.

As of September 30, 2020 and December 31, 2019, the Group has classified as deferred tax assets 2,676 and 1,583, respectively, and as deferred tax liability 105,765 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 September 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

 

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

VAT

   —      2,903    —      3,532 

Withholdings and perceptions

   —      1,628    —      2,070 

Royalties

   —      2,943    —      1,268 

Tax on Fuels

   —      4,336    —      635 

IIBB

   —      366    —      512 

Miscellaneous

   20    3,832    1,428    3,420 
  

 

 

   

 

 

   

 

 

   

 

 

 
   20    16,008    1,428    11,437 
  

 

 

   

 

 

   

 

 

   

 

 

 

19. SALARIES AND SOCIAL SECURITY

 

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

Salaries and social security

   —      3,120    —      2,976 

Bonuses and incentives provision

   —      3,114    —      3,468 

Vacation provision

   —      4,422    —      3,610 

Other employee benefits

   2,923    1,765    —      150 
  

 

 

   

 

 

   

 

 

   

 

 

 
   2,923    12,421    —      10,204 
  

 

 

   

 

 

   

 

 

   

 

 

 

 

34


Table of Contents

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 SEPTEMBER 30, 2020 AND COMPARATIVE INFORMATION (UNAUDITED)

  LOGO

 

20. LEASE LIABILITIES

As of September 30, 2020, the Group recorded non-current and current lease liabilities in the amount of 40,741 and 26,853, respectively.

The evolution of the Group’s leases liabilities for the nine-month period ended September 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

   4,245 

Financial accretion

   4,662 

Leases decrease

   (2,993

Payments

   (15,470

Exchange and translation differences, net

   15,360 

Result from net monetary position(1)

   10 
  

 

 

 

Balance as of September 30, 2020

   67,594 
  

 

 

 

 

(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   September 30, 2020   December 31, 2019 
   Noncurrent   Current   Noncurrent   Current 

Pesos:

            

Negotiable obligations(4)

   16.50% - 35.73%    2020-2024    7,102    17,669    8,619    27,481 

Export pre-financing

   37.00%    2020    —      4,726    —      —   

Loans

   37.48% - 57.08%    2020-2024    5,140    10,772    —      3,687 

Account overdraft

   33.00% - 36.00%    2020    —      1,051    —      2,103 
      

 

 

   

 

 

   

 

 

   

 

 

 
       12,242    34,218    8,619    33,271 
      

 

 

   

 

 

   

 

 

   

 

 

 

Currencies other than the Peso:

            

Negotiable obligations(2)(3)

   0.00% - 10.00%    2020-2047    451,542    47,370    375,560    13,279 

Export pre-financing(5)

   3.98% - 8.19%    2020-2022    11,412    26,492    10,762    33,100 

Imports financing

   6.29% - 8.38%    2020    —      3,493    —      17,876 

Loans

   0.88% - 6.70%    2020-2027    5,211    32,413    24,710    9,583 
      

 

 

   

 

 

   

 

 

   

 

 

 
       468,165    109,768    411,032    73,838 
      

 

 

   

 

 

   

 

 

   

 

 

 
       480,407    143,986    419,651    107,109 
      

 

 

   

 

 

   

 

 

   

 

 

 

 

(1)

Nominal annual interest rate as of September 30, 2020.

(2)

Disclosed net of 326 corresponding to YPF’s own NO repurchased through open market transactions as of December 31, 2019.

(3)

Includes 15,309 and 4,643 as of September 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 4,602 and 15,850 as of September 30, 2020 and December 31, 2019, respectively, 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 September 30, 2020, it includes 3,005 which accrue a 6.64% 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 nine-month period ended on September 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

   102,684 

Payments of loans

   (129,668

Payments of interest

   (47,941

Accrued interest(1)

   43,486 

Net exchange differences and translation

   127,179 

Result from debt exchange

   2,097 

Result from net monetary position(2)

   (204
  

 

 

 

Balance as of September 30, 2020

   624,393 
  

 

 

 

 

(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.

 

35


Table of Contents

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 SEPTEMBER 30, 2020 AND COMPARATIVE INFORMATION (UNAUDITED)

  LOGO

21. LOANS (Cont.)

 

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

 

                 September 30, 2020  December 31, 2019 

Month

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

 1998 US$15  (1) (6) —    Fixed   10.00  2028   1,127   47   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  —     —     —     —     —     —     729 

April, february and october

 2014/5/6 US$1,522  (2) (4) (6) Class XXVIII  Fixed   8.75  2024   115,806   3,052   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  29.83  2024   500   170   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   114,120   1,671   89,416   3,230 

September

 2015 $1,900  (2) (6) (7) Class XLI  —     —     —     —     —     —     719 

September and december

 2015/9 $5,196  (2) (4) (6) Class XLII  —     —     —     —     —     —     5,952 

October

 2015 $2,000  (2) (6) (7) Class XLIII  BADLAR   27.13  2023   2,000   241   2,000   183 

March and January

 2016/20 $5,455  (2) (4) (6) Class XLVI  BADLAR plus 6  35.72  2021   —     5,587   1,350   251 

March

 2016 US$1,000  (2) (6) Class XLVII  Fixed   8.50  2021   —     31,446   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  —     —     —     —     —     —     12,902 

May

 2017 $4,602  (2) (6) (8) Class LII  Fixed   16.50  2022   4,602   299   4,602   108 

July and december

 2017 US$1,000  (2) (6) Class LIII  Fixed   6.95  2027   76,864   1,032   60,399   1,890 

December

 2017 US$750  (2) (6) Class LIV  Fixed   7.00  2047   56,397   1,159   44,311   126 

June

 2019 US$500  (6) (9) Class I  Fixed   8.50  2029   37,862   833   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  35.73  2020   —     3,793   —     1,189 

December

 2019 US$19  (5) (6) (9) Class IV  Fixed   7.00  2020   —     1,506   —     1,179 

January

 2020 $2,112  (6) (9) Class V  BADLAR plus 5  34.65  2021   —     2,245   —     —   

January and march

 2020 $5,006  (6) (9) Class VI  BADLAR plus 6  35.65  2021   —     5,334   —     —   

January

 2020 US$10  (5) (6) (9) Class VII  Fixed   5.00  2021   —     759   —     —   

March

 2020 US$9  (6) (9) Class VIII  Fixed   5.00  2021   —     683   —     —   

March

 2020 US$4  (6) (9) Class IX  Fixed   6.00  2021   299   1   —     —   

May

 2020 US$93  (5) (6) (9) Class XI  Fixed   0.00  2021   7,093   —     —     —   

June

 2020 US$78  (5) (6) (9) Class XII  Fixed   1.50  2022   5,963   4   —     —   

July

 2020 US$543  (6) (9) Class XIII  Fixed   8.50  2025   36,011   5,177   —     —   
        

 

 

  

 

 

  

 

 

  

 

 

 
         458,644   65,039   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 September 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.

 

36


Table of Contents

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 SEPTEMBER 30, 2020 AND COMPARATIVE INFORMATION (UNAUDITED)

  LOGO

21. LOANS (Cont.)

 

Exchange 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 an adhesion 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).

YPF assessed whether the instruments subject to exchange were substantially different, considering both qualitative (e.g., currency, term, and rate) and quantitative aspects (if the discounted present value of the cash flows under the new terms, including any fees paid net of any fees received, and discounted using the original effective interest rate, is at least 10% different from the discounted present value of the remaining cash flows of the original financial liability). In this regard, the Company recognizes the exchange of the NO as a modification due to the fact that the instruments subject to exchange are not substantially different. As a result of the transaction, YPF recognized a loss of 2,097 (see Note 28).

22. OTHER LIABILITIES

 

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

Extension of concessions

   642    571    529    593 

Liabilities for contractual claims(1)

   177    70    170    59 

Miscellaneous

   —      907    4    658 
  

 

 

   

 

 

   

 

 

   

 

 

 
   819    1,548    703    1,310 
  

 

 

   

 

 

   

 

 

   

 

 

 

 

(1)

See Note 15 to the annual consolidated financial statements.

23. ACCOUNTS PAYABLE

 

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

Trade payable and related parties(1)

   654    112,792    1,869    145,942 

Guarantee deposits

   24    763    21    704 

Payables with partners of JO

   1,154    4,069    575    851 

Miscellaneous

   —      1,614    —      1,098 
  

 

 

   

 

 

   

 

 

   

 

 

 
   1,832    119,238    2,465    148,595 
  

 

 

   

 

 

   

 

 

   

 

 

 

 

(1)

For more information about related parties, see Note 36.

24. REVENUES

 

   For the nine-month
period ended September 30,
 
   2020   2019 

Sales of goods and services

   492,111    477,752 

Government incentives(1)

   6,732    9,065 

Turnover tax

   (17,130   (15,132
  

 

 

   

 

 

 
   481,713    471,685 
  

 

 

   

 

 

 

 

(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.

 

37


Table of Contents

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 SEPTEMBER 30, 2020 AND COMPARATIVE INFORMATION (UNAUDITED)

  LOGO

24. REVENUES (Cont.)

 

 

  

Breakdown of revenues

 

  

Type of good or service

 

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

Diesel

   —     ��172,168    —      —      172,168 

Gasolines

   —      86,644    —      —      86,644 

Natural Gas(1)

   —      513    79,340    —      79,853 

Crude Oil

   —      6,837    —      —      6,837 

Jet fuel

   —      13,179    —      —      13,179 

Lubricants and by-products

   —      13,296    —      —      13,296 

Liquefied Petroleum Gas

   —      9,528    —      —      9,528 

Fuel oil

   —      10,205    —      —      10,205 

Petrochemicals

   —      15,086    —      —      15,086 

Fertilizers

   —      13,842    —      —      13,842 

Flours, oils and grains

   —      24,655    —      —      24,655 

Asphalts

   —      2,007    —      —      2,007 

Goods for resale at gas stations

   —      2,548    —      —      2,548 

Income from services

   —      —      —      2,163    2,163 

Income from construction contracts

   —      —      —      6,383    6,383 

Virgin naphtha

   —      4,981    —      —      4,981 

Petroleum coke

   —      3,925    —      —      3,925 

LNG Regasification

   —      —      4,534    —      4,534 

Other goods and services

   2,494    8,852    7,371    1,560    20,277 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
   2,494    388,266    91,245    10,106    492,111 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

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

Diesel

   —      154,363    —      —      154,363 

Gasolines

   —      99,158    —      —      99,158 

Natural Gas(1)

   —      1,025    81,072    —      82,097 

Crude Oil

   —      9,650    —      —      9,650 

Jet fuel

   —      30,867    —      —      30,867 

Lubricants and by-products

   —      9,471    —      —      9,471 

Liquefied Petroleum Gas

   —      9,989    —      —      9,989 

Fuel oil

   —      4,569    —      —      4,569 

Petrochemicals

   —      15,171    —      —      15,171 

Fertilizers

   —      5,156    —      —      5,156 

Flours, oils and grains

   —      14,119    —      —      14,119 

Asphalts

   —      3,689    —      —      3,689 

Goods for resale at gas stations

   —      3,201    —      —      3,201 

Income from services

   —      —      —      2,525    2,525 

Income from construction contracts

   —      —      —      9,372    9,372 

Virgin naphtha

   —      2,585    —      —      2,585 

Petroleum coke

   —      4,602    —      —      4,602 

LNG Regasification

   —      —      1,760    —      1,760 

Other goods and services

   2,008    4,645    6,336    2,419    15,408 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
   2,008    372,260    89,168    14,316    477,752 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(1)

Includes 53,578 and 54,048 corresponding to sales of natural gas produced by the Company for the nine-month period ended September 30, 2020 and 2019, respectively.

 

  

Sales Channels

 

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

Gas Stations

   —      167,437    —      —      167,437 

Power Plants

   —      4,009    8,647    —      12,656 

Distribution Companies

   —      —      24,241    —      24,241 

Retail distribution of natural gas

   —      —      24,948    —      24,948 

Industries, transport and aviation

   —      65,328    22,017    —      87,345 

Agriculture

   —      66,234    —      —      66,234 

Petrochemical industry

   —      16,665    —      —      16,665 

Trading

   —      28,531    —      —      28,531 

Oil Companies

   —      26,085    —      —      26,085 

Commercialization of liquefied petroleum gas

   —      4,826    —      —      4,826 

Other sales channels

   2,494    9,151    11,392    10,106    33,143 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
   2,494    388,266    91,245    10,106    492,111 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

38


Table of Contents

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 SEPTEMBER 30, 2020 AND COMPARATIVE INFORMATION (UNAUDITED)

  LOGO

24. REVENUES (Cont.)

 

 

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

Gas Stations

   —      178,864    —      —      178,864 

Power Plants

   —      709    11,268    —      11,977 

Distribution Companies

   —      —      17,305    —      17,305 

Retail distribution of natural gas

   —      —      33,319    —      33,319 

Industries, transport and aviation

   —      81,990    19,179    —      101,169 

Agriculture

   —      45,490    —      —      45,490 

Petrochemical industry

   —      17,166    —      —      17,166 

Trading

   —      24,352    —      —      24,352 

Oil Companies

   —      13,266    —      —      13,266 

Commercialization of liquefied petroleum gas

   —      4,360    —      —      4,360 

Other sales channels

   2,008    6,063    8,097    14,316    30,484 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
   2,008    372,260    89,168    14,316    477,752 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

  

Target Market

Sales contracts in the domestic market resulted in 427,021 and 420,058 for the nine-month period ended September 30, 2020 and 2019, respectively.

Sales contracts in the international market resulted in 65,090 and 57,694 for the nine-month period ended September 30, 2020 and 2019, respectively.

 

  

Contract balances

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

 

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

Credits for contracts included in Trade Receivables

   10,057    101,464    6,785    100,706 

Contract assets

   —      426    —      203 

Contract liabilities

   —      8,746    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 nine-month period ended on September 30, 2020 and 2019 the Group has recognized 6,983 and 4,184, 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 nine-month period ended
September 30,
 
   2020   2019 

Inventories at beginning of year

   80,479    53,324 

Purchases

   125,225    139,580 

Production costs(1)

   330,793    259,286 

Translation effect

   22,511    31,577 

Adjustment for inflation(2)

   353    342 

Inventories at end of the period

   (104,272   (95,545
  

 

 

   

 

 

 
   455,089    388,564 
  

 

 

   

 

 

 

 

(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.

 

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Table of Contents

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 SEPTEMBER 30, 2020 AND COMPARATIVE INFORMATION (UNAUDITED)

  LOGO

 

26. EXPENSES BY NATURE

The Group presents the condensed interim consolidated financial 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 nine-month period ended September 30, 2020 and 2019:

 

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

Salaries and social security taxes

   29,442    9,108   4,685   621    43,856(5) 

Fees and compensation for services

   1,709    6,325(2)   1,170   77    9,281 

Other personnel expenses

   6,222    555   260   29    7,066 

Taxes, charges and contributions

   5,358    293   11,549(1)   —      17,200 

Royalties, easements and canons

   30,826    —     67   57    30,950 

Insurance

   3,626    200   102   —      3,928 

Rental of real estate and equipment

   5,149    24   1,300   —      6,473(4) 

Survey expenses

   —      —     —     344    344 

Depreciation of property, plant and equipment

   126,879    2,963   4,105   —      133,947 

Amortization of intangible assets

   1,990    391   28   —      2,409 

Depreciation of right-of-use assets

   12,670    11   701   —      13,382 

Industrial inputs, consumable materials and supplies

   15,359    72   259   23    15,713 

Operation services and other service contracts

   28,258    461   2,546   293    31,558(4) 

Preservation, repair and maintenance

   36,038    923   1,099   2    38,062(4) 

Unproductive exploratory drillings

   —      —     —     3,576    3,576 

Transportation, products and charges

   16,052    2   12,160   —      28,214(4) 

Provision for doubtful trade receivables

   —      —     10,311   —      10,311 

Publicity and advertising expenses

   —      1,399   265   —      1,664 

Fuel, gas, energy and miscellaneous

   11,215    549   2,795   52    14,611(4) 
  

 

 

   

 

 

  

 

 

  

 

 

   

 

 

 
   330,793    23,276   53,402   5,074    412,545 
  

 

 

   

 

 

  

 

 

  

 

 

   

 

 

 

 

(1)

Includes 7,737 corresponding to export withholdings.

(2)

Includes 70 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 1,034.

(4)

Includes 3,818 and 3,099 corresponding to short-term leases and to the lease charge related to the underlying asset return and/or use, respectively.

(5)

Includes 1,409 corresponding to the Work and Production Assistance Program received in benefit of AESA and OPESSA. See Note 36.

 

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

Salaries and social security taxes

   22,669    5,534   2,842   489    31,534 

Fees and compensation for services

   1,836    4,272(2)   833   20    6,961 

Other personnel expenses

   6,073    623   323   113    7,132 

Taxes, charges and contributions

   4,889    171   7,572(1)   44    12,676 

Royalties, easements and canons

   30,455    —     80   43    30,578 

Insurance

   1,540    99   104   —      1,743 

Rental of real estate and equipment

   6,895    32   508   —      7,435(4) 

Survey expenses

   —      —     —     933    933 

Depreciation of property, plant and equipment

   94,746    1,986   2,488   —      99,220 

Amortization of intangible assets

   1,422    222   21   —      1,665 

Depreciation of right-of-use assets

   6,773    —     429   —      7,202 

Industrial inputs, consumable materials and supplies

   15,398    110   178   29    15,715 

Operation services and other service contracts

   13,417    509   1,745   198    15,869(4) 

Preservation, repair and maintenance

   33,182    624   662   52    34,520(4) 

Unproductive exploratory drillings

   —      —     —     2,502    2,502 

Transportation, products and charges

   15,592    2   10,887   —      26,481(4) 

Provision for doubtful trade receivables

   —      —     983   —      983 

Publicity and advertising expenses

   —      1,822   504   —      2,326 

Fuel, gas, energy and miscellaneous

   4,399    571   2,776   70    7,816(4) 
  

 

 

   

 

 

  

 

 

  

 

 

   

 

 

 
   259,286    16,577   32,935   4,493    313,291 
  

 

 

   

 

 

  

 

 

  

 

 

   

 

 

 

 

(1)

Includes 4,639 corresponding to export withholdings.

(2)

Includes 63 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 798.

(4)

Includes 4,283 and 1,534 corresponding to short-term leases and to the lease charge related to the underlying asset return and/or use, respectively.

 

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Table of Contents

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 SEPTEMBER 30, 2020 AND COMPARATIVE INFORMATION (UNAUDITED)

  LOGO

 

27. OTHER NET OPERATING RESULTS

 

   For the nine-month period
ended September 30,
 
   2020  2019 

Result for sale of participation in areas

   12,233(1)   965(2) 

Lawsuits

   (4,345  (2,827

Insurance

   3,189(3)   249 

Construction incentive(4)

   —     613 

Miscellaneous

   750   487 
  

 

 

  

 

 

 
   11,827   (513
  

 

 

  

 

 

 

 

(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 nine-month period
ended September 30,
 
   2020   2019 

Financial income

    

Interest income

   5,360    4,081 

Exchange differences

   66,568    77,091 

Financial accretion

   1,946    4,750 
  

 

 

   

 

 

 

Total financial income

   73,874    85,922 
  

 

 

   

 

 

 

Financial loss

    

Interest loss

   (48,268   (32,641

Exchange differences

   (40,563   (30,337

Financial accretion

   (12,369   (1,652
  

 

 

   

 

 

 

Total financial costs

   (101,200   (64,630
  

 

 

   

 

 

 

Other financial results

    

Results on financial assets at fair value with changes in results

   1,607    (3,905

Results from derivative financial instruments

   (485   (43

Result from net monetary position

   4,515    3,664 

Results from transactions with financial assets

   9,597    —   

Result from financial instruments exchange

   1,330    —   

Result from debt exchange(1)

   (2,097   —   
  

 

 

   

 

 

 

Total other financial results

   14,467    (284
  

 

 

   

 

 

 

Total net financial results

   (12,859   21,008 
  

 

 

   

 

 

 

 

(1)

See Note 21.

29. INVESTMENTS IN JOINT OPERATIONS

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

 

   September 30, 2020   December 31, 2019 

Noncurrent assets(1)

   257,369    221,219 

Current assets

   4,226    8,723 
  

 

 

   

 

 

 

Total assets

   261,595    229,942 
  

 

 

   

 

 

 

Noncurrent liabilities

   22,064    17,754 

Current liabilities

   14,717    27,641 
  

 

 

   

 

 

 

Total liabilities

   36,781    45,395 
  

 

 

   

 

 

 
   For the nine-month period ended September 30, 
   2020   2019 

Production cost

   65,324    48,177 

Exploration expenses

   155    151 

 

(1)

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

 

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Table of Contents

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 SEPTEMBER 30, 2020 AND COMPARATIVE INFORMATION (UNAUDITED)

  LOGO

 

30. SHAREHOLDERS’ EQUITY

The Company’s subscribed capital as of September 30, 2020, is 3,928 and 5 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 September 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 nine-month period
ended September 30,
 
   2020   2019 

Net loss

   (113,884   (23,595

Average number of shares outstanding

   392,532,676    392,293,554 

Basic and diluted earnings per share

   (290.13   (60.15

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

 

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Table of Contents

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 SEPTEMBER 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 nine-month period ended September 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 issuance of these condensed interim consolidated financial statements, the parties to the process are producing evidence supporting their claims (Discovery Stage), including witness testimonies that will begin on October and shall continue until the end of January 2021.

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 nine-month period ended on September 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.

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.

 

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Table of Contents

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 SEPTEMBER 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.

On September 3, 2020, YPF filed an appeal against the order issued on May 20, 2020 by the Provincial Court of Madrid for constitutional protection under sections 41 and 44 of the Organic Law of the Constitutional Court for considering that such order violates YPF’s fundamental right to an effective judicial protection. The Argentine Republic also filed an appeal for constitutional protection against such resolution.

On September 24, 2020, YPF and the Argentine Republic jointly filed a pleading requesting Judge Preska to issue a letters rogattory pursuant to section 28(b) of the Federal Rules of Civil Procedure of the United States and the Hague Convention, requesting assistance from the Argentine authorities to obtain the pertinent testimonies and the production of certain documents.

On October 2, 2020, YPF filed a pleading requesting Judge Preska to issue a letters rogatory pursuant to section 28(b) of the Federal Rules of Civil Procedure of the United States and the Hague Convention, in order to obtain assistance from Spanish authorities in the production of certain documents.

On October 6, 2020, Judge Preska approved the petitions filed by YPF and the Argentine Republic to obtain testimony and the production of the documents required on September 24 and October 2, 2020.

Within the framework of the Discovery process, the parties are exchanging documentation of both pleadings, namely, Requests for Production of Documents and their corresponding responses and objections; interrogatories and Requests for Admissions, among others.

As of the date of issuance of these consolidated financial statements, and considering the ongoing status of the lawsuit, the complexity of the complaint and the evidence that both parties should submit, the Company will continue to 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 categorically rejects the claims asserted in the complaint and will file the necessary legal remedies and exercise all defensive measures in accordance with the applicable legal procedure to defend their rights.

 

  

Eton Park Capital Management, L.P., Eton Park Master Fund, LTD. and 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.

 

44


Table of Contents

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 SEPTEMBER 30, 2020 AND COMPARATIVE INFORMATION (UNAUDITED)

  LOGO

33. CONTINGENT ASSETS AND LIABILITIES (Cont.)

 

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.

On September 24, 2020, YPF and the Argentine Republic jointly filed a pleading requesting Judge Preska to issue a letters rogattory pursuant to section 28(b) of the Federal Rules of Civil Procedure of the United States and the Hague Convention, requesting assistance from the Argentine authorities to obtain the pertinent testimonies and the production of certain documents.

On October 2, 2020, YPF filed a pleading requesting Judge Preska to issue a letters rogatory pursuant to section 28(b) of the Federal Rules of Civil Procedure of the United States and the Hague Convention, in order to obtain assistance from Spanish authorities in the production of certain documents.

On October 6, 2020, Judge Preska approved the petitions filed by YPF and the Argentine Republic to obtain testimony and the production of the documents required on September 24 and October 2, 2020.

Within the framework of the Discovery process, the parties are exchanging documentation of both pleadings, namely, Requests for Production of Documents and their corresponding responses and objections; interrogatories and Requests for Admissions, among others.

As of the date of issuance of these consolidated financial statements, and considering the ongoing status of the lawsuit, the complexity of the complaint and the evidence that both parties should submit, the Company will continue to 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 categorically rejects the claims asserted in the complaint and will file the necessary legal remedies and exercise all defensive measures in accordance with the applicable legal procedure to defend their rights.

34. CONTRACTUAL COMMITMENTS

Contractual commitments are described in Note 33 to the annual consolidated financial statements. Updates for the nine-month period ended September 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 nine-month period ended September 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 8,753. These transactions were executed based on the market’s general and regulatory framework. The net balance to be paid to CHNC as of September 30, 2020 is 2,671. Additionally, YPF has a overlift position with CHNC corresponding to the imbalance of crude oil production from Loma Campana of 3,968.

 

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Table of Contents

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 SEPTEMBER 30, 2020 AND COMPARATIVE INFORMATION (UNAUDITED)

  LOGO

 

35. MAIN REGULATIONS AND OTHER

Main regulations and others are described in Note 34 to the annual consolidated financial statements. Updates for the nine-month period ended September 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 - ENARGAS Resolution No. 305/2020

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.

On October 5, 2020, ENARGAS Resolution No. 305/2020 was published in the BO, extending the effective term of ENARGAS Resolution No. 59/2018 to September 30, 2021.

Terms and Conditions for the Distribution of Natural Gas through Networks

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.

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.

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 DNU 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.

 

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Table of Contents

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 SEPTEMBER 30, 2020 AND COMPARATIVE INFORMATION (UNAUDITED)

  LOGO

35. MAIN REGULATIONS AND OTHERS (Cont.)

 

Likewise, on June 19, 2020, and based on the DNU 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 monthly extend the term with the distribution companies, which are currently extended until November 30, 2020.

On September 20, 2020, the DNU No. 756/2020 was published in the BO, extending the effective term of the prohibition to interrupt services to utility companies until December 31, 2020 in case of delay or lack of payment of up to 7 consecutive or alternate bills, due as from March 1, 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 September 30, 2020, which amounts to 8,433.

In the session of October 29, 2020, the Chamber of Deputies, when discussing the 2021 budget bill, approved to the abrogation of the DNU No. 1053/2018, which will become effective upon the enactment of such bill, which as of the issuance date of these quarterly financial statements, has not been considered by the Chamber of Senators.

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

 

  

LPG commercialization in the domestic market

Decree No. 311/2020 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.

 

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Table of Contents

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 SEPTEMBER 30, 2020 AND COMPARATIVE INFORMATION (UNAUDITED)

  LOGO

35. MAIN REGULATIONS AND OTHERS (Cont.)

 

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 No. 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 hydrocarbon 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.

 

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Table of Contents

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 SEPTEMBER 30, 2020 AND COMPARATIVE INFORMATION (UNAUDITED)

  LOGO

35. MAIN REGULATIONS AND OTHERS (Cont.)

 

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.

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/Bbl 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.

On August 28, 2020, more than ten consecutive days were completed in which the average price of Brent exceeded US$ 45/bbl, leaving the provisions related to the price of Decree No. 488/2020 without effect. Thus, as of that date, producers and refiners negotiate prices taking international oil prices as reference. As of the date of issuance of these condensed, interim, consolidated financial statements, the Argentine Government has not issued any additional regulations on this matter.

 

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Table of Contents

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 SEPTEMBER 30, 2020 AND COMPARATIVE INFORMATION (UNAUDITED)

  LOGO

35. MAIN REGULATIONS AND OTHERS (Cont.)

 

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.

On September 1, 2020, a request for the temporary suspension of the Program related to the “La Ribera I y II” Included Concession, effective from January 1, 2020, was submitted to the Under-Secretariat of Hydrocarbons of the Secretariat of Energy of the Nation, and that such suspension be notified to the Under-Secretariat of Energy, Mining and Hydrocarbons of the Province of Neuquén, in its capacity as Provincial Enforcement Authority of the Program. This temporary suspension was requested both in relation to the performance of the Investment Plan and also to the payment of compensations for the production of 2020, until a new plan in line with the current market may be elaborated for the remaining term until the end of 2021.

As of the date of issuance of these condensed interim consolidated financial statements, neither the Under-Secretariat of Energy, Mining and Hydrocarbons of the Province of Neuquén nor the Under-Secretariat of Hydrocarbons of the Secretariat of Energy of the Nation have answered the requests filed by YPF.

35.d) Tax Regulations

 

  

Extended Moratorium

On August 26, 2020, Law No. 27,562 on Social Solidarity and Production Reactivation within the Public Emerency Framework was published in the BO, which declared the extension of the regularization regime of tax, social security and customs obligations originally established for Micro, Small and Medium-Sized Enterprises (MiPyMEs) under Law No. 27,541. The following are the main aspects contemplated under this law:

 

  

The moratorium applies to individuals and legal entities responsible for payment of taxes and social security contributions, excluding subjects (except for MiPyMEs, non-profit entities and small taxpayers) owning financial assets abroad and deciding not to repatriate at least 30% of such assets within 60 days from the date of accessing the regime (including shareholders who own at least thirty percent (30%) of the capital stock).

 

  

Obligations past due as on July 31, 2020 may be included.

 

  

A 15% deduction will apply to settlements in cash.

 

  

The number of installments may be 48, 60, 96 or 120, depending on the type of debt and taxpayer.

 

  

The first 6 installments will be subject to a 2% fixed monthly rate (BADLAR rate in Pesos at private banks from the seventh installment).

Besides, it establishes benefits for compliant taxpayers, taxpayers under the Small Taxpayer’s Regime (“monotributistas”) as well as for Micro and Small-Sized Entreprises.

Adherence to the plan,which expired on October 31, 2020, was extended to November 30, 2020 by Decree No. 833/2020.

 

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Table of Contents

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 SEPTEMBER 30, 2020 AND COMPARATIVE INFORMATION (UNAUDITED)

  LOGO

35. MAIN REGULATIONS AND OTHERS (Cont.)

 

35.e) 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 September 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.

 

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Table of Contents

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 SEPTEMBER 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 September 30, 2020 and December 31, 2019 and transactions with the mentioned parties for the nine-month period ended September 30, 2020 and 2019.

 

   September 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

   339    965    2,350    327    296    2,278    2,183    679 

Profertil

   9    693    369    —      12    587    114    —   

MEGA

   —      2,688    511    —      —      2,995    350    —   

Refinor

   —      428    21    —      —      956    123    —   

Bizoy S.A.

   —      22    —      —      —      17    —      —   

Petrofaro S.A.

   —      —      —      —      —      6    —      —   

OLCLP

   55    6    68    —      56    59    70    —   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
   403    4,802    3,319    327    364    6,898    2,840    679 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Associates:

                

CDS

   —      147    10    —      —      1,063    —      —   

YPF Gas

   47    375    240    —      90    317    73    —   

Oldelval

   —      —      261    —      —      77    401    —   

Termap

   —      —      69    —      —      —      182    —   

OTA

   11    —      9    —      9    —      14    —   

OTC

   2    —      —      —      4    —      —      —   

GPA

   —      —      280    —      —      —      99    —   

Oiltanking

   —      1    95    —      —      —      198    —   

Gas Austral S.A.

   —      28    1    —      —      12    1    —   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
   60    551    965    —      103    1,469    968    —   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
   463    5,353    4,284    327    467    8,367    3,808    679 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

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

Joint Ventures:

            

YPF EE

   2,649    3,605    —      1,510    2,679    —   

Profertil

   3,943    3,389    —      3,282    2,082    —   

MEGA

   9,198    1,583    —      7,159    698    —   

Refinor

   1,845    587    —      2,242    368    (16

Y-GEN I

   —      —      —      5    —      —   

Petrofaro S.A.

   —      —      —      9    23    —   

OLCLP

   88    425    —      19    155    —   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
   17,723    9,589    —      14,226    6,005    (16
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Associates:

            

CDS

   637    8    8    727    1    —   

YPF Gas

   1,817    244    3    1,628    183    162 

Oldelval

   56    2,060    2    190    1,563    —   

Termap

   —      937    —      —      881    —   

OTA

   1    51    —      1    53    —   

GPA

   —      963    —      —      542    —   

Oiltanking

   3    1,094    —      2    972    —   

Gas Austral S.A.

   158    —      —      169    —      —   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
   2,672    5,357    13    2,717    4,195    162 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
   20,395    14,946    13    16,943    10,200    146 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

52


Table of Contents

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 SEPTEMBER 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 nine-month period
ended September 30,
 

Customers / Suppliers

  Ref. September 30, 2020  December 31, 2019  2020  2019 

SGE

  (1) (16)  17,012   26,223   —     —   

SGE

  (2) (16)  4,354   3,416   2,672   3,335 

SGE

  (3) (16)  177   155   183   639 

SGE

  (4) (16)  216   166   —     7 

SGE

  (5) (16)  625   475   150   —   

SGE

  (6) (16)  377   172   598   708 

SGE

  (7) (16)  5,535   4,417   —     323 

Ministry of Transport

  (8) (16)  3,184   2,056   3,279   4,376 

Secretariat of Industry

  (9) (16)  —     —     —     613 

CAMMESA

  (10)  10,466   627   19,927   5,878 

CAMMESA

  (11)  (1,814  386   (4,386  (2,709

IEASA

  (12)  7,348   5,041   9,789   10,098 

IEASA

  (13)  (2,186  (505  (1,341  (161

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

  (14)  5,159   5,033   4,212   11,224 

ANSES

  (15)  —     —     1,409   —   

 

(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 September 30, 2020, 1,804 have been charged to provision and 3,731 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, LNG 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 and 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 Bonds of the Argentine Republic 2029 and 2030, and Treasury Bills, classified as “Investments in financial assets”. See Note 7.

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.

 

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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 SEPTEMBER 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 nine-month period ended September 30, 2020 and 2019:

 

   For the nine-month period
ended September 30,
 
   2020   2019 

Short-term employee benefits(1)

   537    354 

Share-based benefits

   113    70 

Post-retirement benefits

   22    14 

Termination benefits

   242    —   
  

 

 

   

 

 

 
   914    438 
  

 

 

   

 

 

 

 

(1)

Does not include Social Security contributions of 143 and 98 for the nine-month period ended September 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 166 and 100 for the nine-month period ended September 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 2,689 and 2,574 for the nine-month period ended September 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 368 and 371 for the nine-month period ended September 30, 2020 and 2019, respectively.

During the nine-month period ended on September 30, 2020, the Company has not repurchased its own shares. Likewise, during the nine-month period ended on September 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.

 

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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 SEPTEMBER 30, 2020 AND COMPARATIVE INFORMATION (UNAUDITED)

  LOGO

 

 

38. ASSETS AND LIABILITIES IN CURRENCIES OTHER THAN THE PESO

 

   September 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    75.98    87    1    59.69    60 

Bolivian peso

   14    10.92    152    14    8.58    119 

Trade receivables

            

U.S. dollar

   110    75.98    8,351    220    59.69    13,132 
      

 

 

       

 

 

 

Total noncurrent assets

       8,590        13,311 
      

 

 

       

 

 

 

Current assets

            

Other receivables

            

U.S. dollar

   184    75.98    14,013    276    59.69    16,474 

Euro

   4    88.97    371    4    66.85    267 

Chilean peso

   6,305    0.10    631    5,241    0.08    419 

Yen

   106    0.72    76    151    0.55    83 

Trade receivables

            

U.S. dollar

   768    75.98    58,348    939    59.69    56,030 

Chilean peso

   6,305    0.10    631    17,221    0.08    1,378 

Investments in financial assets

            

U.S. dollar

   121    75.98    9,212    140    59.69    8,370 

Cash and cash equivalents

            

U.S. dollar

   161    75.98    12,230    723    59.69    43,172 

Chilean peso

   3,540    0.10    354    1,685    0.08    135 

Bolivian peso

   7    10.92    76    10    8.58    90 
      

 

 

       

 

 

 

Total current assets

       95,942        126,418 
      

 

 

       

 

 

 

Total assets

       104,532        139,729 
      

 

 

       

 

 

 

Noncurrent liabilities

            

Provisions

            

U.S. dollar

   2,128    76.18    162,081    2,020    59.89    120,968 

Lease liabilities

            

U.S. dollar

   535    76.18    40,738    674    59.89    40,388 

Loans

            

U.S. dollar

   6,146    76.18    468,165    6,863    59.89    411,032 

Other liabilities

            

U.S. dollar

   11    76.18    819    12    59.89    699 

Accounts payable

            

U.S. dollar

   3    76.18    249    6    59.89    359 
      

 

 

       

 

 

 

Total noncurrent liabilities

       672,052        573,446 
      

 

 

       

 

 

 

Current liabilities

            

Provisions

            

U.S. dollar

   59    76.18    4,501    59    59.89    3,555 

Taxes payable

            

Chilean peso

   1,142    0.10    114    3,102    0.08    248 

Salaries and social security

            

U.S. dollar

   9    76.18    650    7    59.89    406 

Lease liabilities

            

U.S. dollar

   352    76.18    26,848    357    59.89    21,384 

Loans

            

U.S. dollar

   1,437    76.18    109,475    1,229    59.89    73,599 

Chilean peso

   2,926    0.10    293    2,993    0.08    239 

Other liabilities

            

U.S. dollar

   20    76.18    1,548    22    59.89    1,310 

Accounts payable

            

U.S. dollar

   717    76.18    54,648    1,181    59.89    70,711 

Euro

   12    89.39    1,085    16    67.23    1,053 

Chilean peso

   4,729    0.10    473    3,744    0.08    300 

Bolivian peso

   —      10.92    —      7    8.58    60 

Yen

   58    0.72    42    133    0.55    73 
      

 

 

       

 

 

 

Total current liabilities

       199,677        172,938 
      

 

 

       

 

 

 

Total liabilities

       871,729        746,384 
      

 

 

       

 

 

 

 

(1)

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

 

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Table of Contents

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 SEPTEMBER 30, 2020 AND COMPARATIVE INFORMATION (UNAUDITED)

  LOGO

 

 

39. SUBSEQUENT EVENTS

Termination of the liquefaction barge charter agreement and the liquefaction services agreement with Exmar Energy Netherlands B.V., Exmar Argentina S.A.U. and Exmar N.V.

On October 19, 2020, the settlement agreement entered into between YPF and the companies Exmar Energy Netherlands B.V., Exmar Argentina S.A.U. and Exmar N.V. became effective, under which, without recognizing any facts or rights, it was decided to terminate the liquefaction barge charter agreement and the liquefaction services agreement of the Tango FLNG liquefaction barge executed on November 20, 2018, and the termination of the arbitration claims initiated by Exmar Energy Netherlands B.V. and Exmar Argentina S.A.U. against YPF on July 15, 2020 before the London Court of International Arbitration (“LCIA”), and therefore, these companies have no further claims against YPF. As a result of this agreement, the Company will pay a total settlement amount of US$ 150 million, which includes a down payment already made of US$ 22 million and the remaining amount to be paid in 18 monthly installments.

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 September 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                  

 

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SIGNATURE

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

 

  YPF Sociedad Anónima
Date: November 16, 2020  By: /s/ Santiago Wesenack
  Name: Santiago Wesenack
  Title: Market Relations Officer