Edgar Filing: YPF SOCIEDAD ANONIMA

YPF Sociedad Anónima

Date: August 12, 2016

/s/ Diego Celaá

Diego Celaá

Market Relations Officer

Form 6-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

Report of Foreign Issuer

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

of the Securities Exchange Act of 1934

For the month of August, 2016

Commission File Number: 001-12102

YPF Sociedad Anónima

(Exact name of registrant as specified in its charter)

Macacha Güemes 515

C1106BKK Buenos Aires, Argentina

(Address of principal executive office)

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

Form 20-F x Form 40-F ¨

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):

Yes ¨ No x

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):

Yes ¨ No x

YPF Sociedád Anonima

TABLE OF CONTENTS

ITEM

1 Translation of Condensed Interim Consolidated Financial Statements as of June 30, 2016 and Comparative Information.

LOGO

SOCIEDAD ANONIMA

Condensed Interim Consolidated

Financial Statements as of June 30, 2016

and Comparative Information

CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30, 2016 AND COMPARATIVE INFORMATION


Index				Page

–	Cover				1

–	Condensed interim consolidated statements of financial position				2

–	Condensed interim consolidated statements of comprehensive income				3

–	Condensed interim consolidated statements of changes in shareholders’ equity				4

–	Condensed interim consolidated statements of cash flow				6

–	Notes to the condensed interim consolidated financial statements:

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

		a.	Basis of preparation		7

		b.	Significant accounting policies		7

		c.	Accounting estimates and judgments		8

		d.	Comparative information		8

	2)	Seasonality of operations			8

	3)	Acquisitions and disposals			8

	4)	Financial risk management and fair value measurements

		a.	Financial risk		9

		b.	Fair value measurements		9

	5)	Segment information			10

	6)	Financial instruments by category			11

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

		a.	Intangible assets		12

		b.	Property, plant and equipment		12

		c.	Investments in associates and joint ventures		14

		d.	Inventories		19

		e.	Other receivables		19

		f.	Trade receivables		19

		g.	Cash and cash equivalents		19

		h.	Provisions		20

		i.	Income tax		21

		j.	Loans		22

		k.	Accounts payable		24

		l.	Revenues		24

		m.	Costs		24

		n.	Expenses by nature		25

		o.	Other operating results, net		26

		p.	Financial results, net		26

	8)	Investments in joint operations			26

	9)	Shareholders’ equity			27


10)	Earnings per share		27

11)	Provisions for pending lawsuits, claims and environmental liabilities		28

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

	a.	Contingent liabilities	30

	b.	Contingent assets	31

	c.	Contractual commitments	31

	d.	Main regulations and other	31

13)	Balances and transactions with related parties		37

14)	Employee benefit plans and similar obligations		39

15)	Information required by regulatory authorities		40

16)	Assets and liabilities in currencies other than the Argentine peso		41

17)	Subsequent events		42

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

YPF SOCIEDAD ANONIMA

Macacha Güemes 515 – Autonomous City of Buenos Aires, Argentina

FISCAL YEAR NUMBER 40

BEGINNING ON JANUARY 1, 2016

CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30, 2016 AND FOR THE

SIX-MONTH PERIOD ENDED JUNE 30, 2016 AND COMPARATIVE INFORMATION

LEGAL INFORMATION

Principal business of the Company: exploration, development and production of oil, natural gas and other minerals and refining, transportation, marketing and distribution of oil and petroleum products and petroleum derivatives, including petrochemicals, chemicals and non-fossil fuels, biofuels and their components; production of electric power from hydrocarbons; rendering telecommunications services, as well as the production, industrialization, processing, marketing, preparation services, transportation and storage of grains and their derivatives.

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

Duration of the Company: through June 15, 2093.

Last amendment to the bylaws: April 29, 2016.⁽¹⁾

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

Capital structure as of June 30, 2016

(expressed in Argentine pesos)


– Subscribed, paid-in and authorized for stock exchange listing		3	,	933,127,930⁽²⁾

(1)	In process of registration with the Argentine Securities Commission

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


				MIGUEL ANGEL GUTIERREZ
				President

YPF SOCIEDAD ANONIMA AND SUBSIDIARIES

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

AS OF JUNE 30, 2016 AND DECEMBER 31, 2015

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


	Notes		June 30, 2016			December 31, 2015
ASSETS
Noncurrent assets
Intangible assets		7.a		8,471			7,279
Property, plant and equipment		7.b		316,356			270,905
Investments in associates and joint ventures		7.c		4,857			4,372
Deferred income tax assets, net		7.i		893			954
Other receivables		7.e		2,206			2,501
Trade receivables		7.f		297			469

Total noncurrent assets				333,080			286,480

Current assets
Inventories		7.d		22,225			19,258
Other receivables		7.e		14,447			19,413
Trade receivables		7.f		37,883			22,111
Investment in financial assets		6		150			804
Cash and cash equivalents		7.g		15,893			15,387

Total current assets				90,598			76,973

TOTAL ASSETS				423,678			363,453

SHAREHOLDERS’ EQUITY
Shareholders’ contributions				10,352			10,349
Reserves, other comprehensive income and retained earnings				129,144			110,064

Shareholders’ equity attributable to the shareholders of the parent company				139,496			120,413

Non-controlling interest				(103	)		48

TOTAL SHAREHOLDERS’ EQUITY				139,393			120,461

LIABILITIES
Noncurrent liabilities
Provisions		7.h		41,821			39,623
Deferred income tax liabilities, net		7.i		50,970			44,812
Taxes payable				162			207
Loans		7.j		105,262			77,934
Accounts payable		7.k		698			625

Total noncurrent liabilities				198,913			163,201

Current liabilities
Provisions		7.h		1,706			2,009
Income tax liability				216			1,487
Taxes payable				5,643			6,047
Salaries and social security				2,393			2,452
Loans		7.j		33,822			27,817
Accounts payable		7.k		40,703			39,979
Dividends payable				889			—

Total current liabilities				85,372			79,791

TOTAL LIABILITIES				284,285			242,992

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY				423,678			363,453

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


				MIGUEL ANGEL GUTIERREZ
				President

YPF SOCIEDAD ANONIMA AND SUBSIDIARIES

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

FOR THE SIX-MONTH AND THREE-MONTH PERIODS ENDED JUNE 30, 2016 AND 2015

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


			For the six-month period ended June 30,						For three-month period ended June 30,
	Notes		2016			2015			2016			2015
Revenues		7.l		99,693			75,134			52,759			40,003
Costs		7.m		(82,950	)		(56,961	)		(42,819	)		(30,456	)

Gross profit				16,743			18,173			9,940			9,547


Selling expenses		7.n		(6,744	)		(5,478	)		(3,699	)		(2,886	)
Administrative expenses		7.n		(3,319	)		(2,556	)		(1,833	)		(1,358	)
Exploration expenses		7.n		(1,192	)		(578	)		(738	)		(387	)
Other operating results, net		7.o		1,448			486			1,648			662

Operating income				6,936			10,047			5,318			5,578


Income on investments in associates and joint ventures		7.c		263			16			166			54

Finance income		7.p		11,109			3,637			1,988			1,863
Finance cost		7.p		(12,170	)		(5,265	)		(6,690	)		(2,991	)
Other financial results		7.p		419			320			42			205

Financial results, net		7.p		(642	)		(1,308	)		(4,660	)		(923	)



Net income before income tax				6,557			8,755			824			4,709


Income tax		7.i		(6,455	)		(4,348	)		(1,577	)		(2,411	)

Net income (loss) for the period				102			4,407			(753	)		2,298


Net income (loss) for the period attributable to:
– Shareholders of the parent company				253			4,424			(743	)		2,297
– Non-controlling interest				(151	)		(17	)		(10	)		1

Earnings (losses) per share attributable to shareholders of the parent company basic and diluted		10		0.65			11.28			(1.89	)		5.86

Other comprehensive income
Translation differences from investments in associates and joint ventures ⁽¹⁾				(616	)		(165	)		(81	)		(82	)
Translation differences from YPF S.A. ⁽²⁾				20,332			5,188			4,390			2,674

Total other comprehensive income for the period ⁽³⁾				19,716			5,023			4,309			2,592

Total comprehensive income for the period				19,818			9,430			3,556			4,890

(1)	Will be reversed to net income at the moment of the sale of the investment or full or partial reimbursement of the capital.

(2)	Will not be reversed to net income.

(3)	Entirely assigned to the parent company’s shareholders.

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


				MIGUEL ANGEL GUTIERREZ
				President

YPF SOCIEDAD ANONIMA AND SUBSIDIARIES

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

FOR THE SIX-MONTH PERIODS ENDED JUNE 30, 2016 AND 2015

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


	For the six-month period ended June 30, 2016
	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
Amount at beginning of year		3,922			6,083			11		18			67			(277	)		(115	)		640		10,349
Accrual of share-based benefit plans		—			—			—		—			57			—			—			—		57
Repurchase of treasury shares		(2	)		(3	)		2		3			—			(55	)		—			—		(55	)
Settlement of share-based benefit plans		—			1			—		(1	)		(11	)		27			(15	)		—		1
As decided by Ordinary and Extraordinary Shareholders’ meeting of April 29, 2016⁽²⁾		—			—			—		—			—			—			—			—		—
As decided by the Board of Directors of June 9, 2016⁽²⁾		—			—			—		—			—			—			—			—		—
Other comprehensive income		—			—			—		—			—			—			—			—		—
Net income		—			—			—		—			—			—			—			—		—

Amount at end of period		3,920			6,081			13		20			113			(305	)		(130	)		640		10,352


	For the six-month period ended June 30, 2016
	Reserves																	Equity attributable to
	Legal		Future dividends			Investments		Purchase of treasury shares		Initial IFRS adjustment		Other comprehensive income			Retained earnings			Shareholders of the parent company			Non- controlling interest			Total shareholders’ equity
Amount at beginning of year		2,007		5			21,264		440		3,648		78,115			4,585			120,413			48			120,461
Accrual of share-based benefit plans		—		—			—		—		—		—			—			57			—			57
Repurchase of treasury shares		—		—			—		—		—		—			—			(55	)		—			(55	)
Settlement of share-based benefit plans		—		—			—		—		—		—			—			1			—			1
As decided by Ordinary and Extraordinary Shareholders’ meeting of April 29, 2016⁽²⁾		—		889			3,640		50		—		—			(4,579	)		—			—			—
As decided by the Board of Directors of June 9, 2016⁽²⁾		—		(889	)		—		—		—		—			—			(889	)		—			(889	)
Other comprehensive income		—		—			—		—		—		19,716			—			19,716			—			19,716
Net income		—		—			—		—		—		—			253			253			(151	)		102

Amount at end of period		2,007		5			24,904		490		3,648		97,831	⁽¹⁾		259			139,496			(103	)		139,393

(1)

Includes 101,314 corresponding to the effect of the translation of the financial statements of YPF S.A. and (3,483) corresponding to the effect of the translation of the financial statements of investments in subsidiaries, associates and joint ventures with functional currency different to dollar, as detailed in Note 1.b.1 to the annual consolidated financial statements.

(2)	See Note 9.


				MIGUEL ANGEL GUTIERREZ
				President

YPF SOCIEDAD ANONIMA AND SUBSIDIARIES

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

FOR THE SIX-MONTH PERIODS ENDED JUNE 30, 2016 AND 2015 (Cont.)

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


	For the six-month period ended June 30, 2015
	Shareholders’ contributions
	Subscribed capital			Adjustment to contributions			Treasury shares		Adjustment to treasury shares		Share- based benefit plans		Acquisition cost of treasury shares			Share trading premium			Issuance premiums		Total
Amount at beginning of year		3,922			6,083			11		18		51		(310	)		(15	)		640		10,400
Accrual of share-based benefit plans		—			—			—		—		53		—			—			—		53
Repurchase of treasury shares		(2	)		(2	)		2		2		—		(45	)		—			—		(45	)
Contributions of non-controlling interest		—			—			—		—		—		—			—			—		—
As decided by Ordinary and Extraordinary Shareholders’ meeting of April 30, 2015		—			—			—		—		—		—			—			—		—
As decided by the Board of Directors of June 8, 2015		—			—			—		—		—		—			—			—		—
Other comprehensive income		—			—			—		—		—		—			—			—		—
Net income		—			—			—		—		—		—			—			—		—

Amount at end of period		3,920			6,081			13		20		104		(355	)		(15	)		640		10,408


	For the six-month period ended June 30, 2015
	Reserves																	Equity attributable to
	Legal		Future dividends			Investments		Purchase of treasury shares		Initial IFRS adjustment		Other comprehensive income			Retained earnings			Shareholders of the parent company			Non- controlling interest			Total shareholders’ equity
Amount at beginning of year		2,007		5			12,854		320		3,648		34,363			9,033			72,630			151			72,781
Accrual of share-based benefit plans		—		—			—		—		—		—			—			53			—			53
Repurchase of treasury shares		—		—			—		—		—		—			—			(45	)		—			(45	)
Contributions of non-controlling interest																						50			50
As decided by Ordinary and Extraordinary Shareholders’ meeting of April 30, 2015		—		503			8,410		120		—		—			(9,033	)		—			—			—
As decided by the Board of Directors of June 8, 2015		—		(503	)		—		—		—		—			—			(503	)		—			(503	)
Other comprehensive income		—		—			—		—		—		5,023			—			5,023			—			5,023
Net income		—		—			—		—		—		—			4,424			4,424			(17	)		4,407

Amount at end of period		2,007		5			21,264		440		3,648		39,386	⁽¹⁾		4,424			81,582			184			81,766

(1)

Includes 40,952 corresponding to the effect of the translation of the financial statements of YPF S.A. and (1,566) corresponding to the effect of the translation of the financial statements of investments in subsidiaries, associates and joint ventures with functional currency different to dollar, as detailed in Note 1.b.1 to the annual consolidated financial statements.

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


				MIGUEL ANGEL GUTIERREZ
				President

YPF SOCIEDAD ANONIMA AND SUBSIDIARIES

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOW

FOR THE SIX-MONTH PERIODS ENDED JUNE 30, 2016 AND 2015

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


	For the six-month periods ended June 30,
	2016			2015
Operating activities:
Net income		102			4,407
Adjustments to reconcile net income to cash flows provided by operating activities:
Income on investments in associates and joint ventures		(263	)		(16	)
Depreciation of property, plant and equipment		21,759			12,066
Amortization of intangible assets		323			160
Consumption of materials and retirement of property, plant and equipment and intangible assets, net of provisions		2,605			1,439
Income tax		6,455			4,348
Net increase in provisions		2,503			1,559
Exchange differences, interest and other ⁽¹⁾		(700	)		1,608
Share-based benefit plans		57			53
Accrued insurance		—			(523	)
Income on deconsolidation of subsidiaries		(1,528	)		—
Changes in assets and liabilities:
Trade receivables		(14,888	)		(1,503	)
Other receivables		4,735			(3,095	)
Inventories		(119	)		765
Accounts payable		(1,620	)		2,011
Taxes payables		(449	)		1,649
Salaries and social security		(51	)		(273	)
Decrease in provisions due to payment/use		(948	)		(900	)
Dividends received		420			179
Proceeds from collection of lost profit insurance		607			1,673
Income tax payments		(1,561	)		(3,674	)

Net cash flows provided by operating activities		17,439			21,933


Investing activities:⁽²⁾
Acquisition of property, plant and equipment and intangible assets		(32,602	)		(30,867	)
Contributions and acquisitions of interests in associates and joint ventures		—			(163	)
Investments in financial assets		910			—
Proceeds from collection of damaged property’s insurance		355			—

Net cash flows used in investing activities		(31,337	)		(31,030	)


Financing activities:⁽²⁾
Payments of loans		(33,954	)		(11,972	)
Payments of interest		(6,893	)		(3,145	)
Proceeds from loans		54,466			28,227
Repurchase of treasury shares		(55	)		(45	)
Contributions of non-controlling interest		50			—

Net cash flows provided by financing activities		13,614			13,065


Translation differences provided by cash and cash equivalents		938			512

Deconsolidation of subsidiaries		(148	)		—


Net increase in cash and cash equivalents		506			4,480


Cash and cash equivalents at the beginning of year		15,387			9,758
Cash and cash equivalents at the end of period		15,893			14,238

Net increase in cash and cash equivalents		506			4,480

(1)	Does not include exchange differences generated by cash and cash equivalents, which are exposed separately in the statement.

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


	For the six-month periods ended June 30,
	2016		2015
Acquisition of property, plant and equipment and concession extension easements not paid		3,879		4,607
Dividends payable		889		503
Contributions of non-controlling interests		—		50
Dividends receivable		100		4

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


				MIGUEL ANGEL GUTIERREZ
				President

YPF SOCIEDAD ANONIMA AND SUBSIDIARIES

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2016 AND COMPARATIVE INFORMATION

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

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

1.a) Basis of preparation

The condensed interim consolidated financial statements of YPF S.A. (hereinafter “YPF” or the “Company”) and its subsidiaries (hereinafter and all together, the “Group”) for the six-month period ended June 30, 2016, are presented in accordance with International Accounting Standards (“IAS”) No. 34 “Interim Financial Reporting”. The adoption of the International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) was determined by the Technical Resolution No. 26 (ordered text) issued by Argentine Federation of Professional Councils in Economic Sciences (“FACPCE”) and the Regulations of the Argentine Securities Commission (“CNV”).

Also, some additional information required by the Law 19,550 of Argentine Corporations and its amendments and/or regulations of the CNV was included. Such information was included in the Notes to the mentioned condensed interim consolidated financial statements only to comply with regulatory requirements.

These condensed interim consolidated financial statements should be read in conjunction with the annual consolidated financial statements of the Group as of December 31, 2015 (“the annual consolidated financial statements”) prepared in accordance with IFRS.

These condensed interim consolidated financial statements were approved by the Board of Directors’ meeting and authorized to be issued on August 4, 2016.

These condensed interim consolidated financial statements corresponding to the six-month period ended on June 30, 2016 are unaudited. Management believes they include all necessary adjustments to fairly present the results of each period on a consistent basis with the annual consolidated financial statements. Income for the six-month period ended on June 30, 2016 does not necessarily reflect the proportion of the Group’s full-year income.

1.b) Significant Accounting Policies

The accounting policies adopted in the preparation of these condensed interim consolidated financial statements are consistent with those used in the preparation of the annual consolidated financial statements, except for the valuation policy for Income Tax detailed in Note 7.i). The most significant accounting policies are described in Note 1.b) to such annual consolidated financial statements.

Functional and reporting currency

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

1.c) Accounting Estimates and Judgments

The preparation of financial statements at a certain date requires 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 made by Management in applying the Group’s accounting policies and the main sources of uncertainty were the same as those applied by the Group in the preparation of the annual consolidated financial statements, which are disclosed in Note 1.c) Accounting Estimates and Judgments to those financial statements.

1.d) Comparative information

Amounts and other information corresponding to the year ended on December 31, 2015 and to the six-month period ended on June 30, 2015 are an integral part of these condensed interim consolidated financial statements and are intended to be read only in relation to these financial statements. Certain reclassifications have been made in order to present amounts comparatively with the current period.

2.	SEASONALITY OF OPERATIONS

Historically, the Group’s results have been subject to seasonal fluctuations during the year, particularly as a result of the increase in natural gas sales during the winter. After the 2002 devaluation of the Argentine Peso, and as a consequence of the natural gas price freeze imposed by the Argentine government, the use of natural gas has been diversified, generating an increase in demand throughout the entire year. However, sales of natural gas are still typically higher in the winter to the residential sector of the Argentine domestic market, which has lower prices than other sectors of the Argentine market. Notwithstanding the foregoing, under the “Additional Injection Stimulus Program” regulation (see Note 11.d) to the annual consolidated financial statements), gas producing companies were invited to file with the Ministry of Energy and Mining (“MINEM”) before June 30th, 2013 projects to increase natural gas injection, in order to receive an increased price of US$ 7.50/MMBTU for all additional natural gas injected. These projects shall comply with the minimum requirements established in the aforementioned Program, and will be subject to approval by the MINEM, including a maximum term of five years, renewable at the request of the beneficiary, upon decision of the MINEM. If the beneficiary company does not reach the committed production increase in a given month, it will have to make up for such volumes not produced. The natural gas pricing program was incorporated into the Hydrocarbons Law, as modified by Law No. 27,007.

In view of the foregoing, seasonality of the Group operations is not significant.

3.	ACQUISITIONS AND DISPOSALS

During the six-month period ended June 30, 2016, there have been no significant acquisitions or disposals.

On May 13, 2016, the companies Y-GEN Eléctrica S.R.L. (“Y-GEN”) and Y-GEN Eléctrica II S.R.L. (“Y-GEN II”) were created for the purpose of tendering in the competitive bidding established by Resolution No. 21/2016 of the Ministry of Energy and Mining (“MINEM”), for the new generation of energy and thermal power which, if awarded, would result in the execution with CAMMESA of a sale agreement of the energy offered during a term of 5 to 10 years, according to the offer, with a dollar price. The created companies submitted bids for construction projects of new thermal generation plants in Loma Campana (Añelo, Province of Neuquén) and in Central El Bracho (Province of Tucumán), which were ultimately awarded.

In both companies, 66.67% of the capital stock is held by the subsidiary YPF Energía Eléctrica S.A. (“Managing Shareholder”) and the remaining 33.33% is held by Guayama PR Holdings (“Non Managing Shareholder”) of the General Electric Group. Under the agreement signed, shareholders are required to supply during the current fiscal year and the next two years, the necessary funds as capital contributions. In addition, there is a service agreement between both companies and YPF Energía Eléctrica S.A. whereby YPF Energía Eléctrica S.A., in its capacity as “Managing Shareholder”, has the responsibility, among other things, to perform certain management jobs of the companies.

The Group has followed the guidelines of IFRS 10 “Consolidated financial statements” and has concluded that it has joint control over Y-GEN I and Y-GEN II. Accordingly, it has applied IFRS 11, “Joint Arrangements”, defining such companies as joint ventures, and has measured them by the equity method in accordance with IAS 28 “Investments in associates and joint ventures”.

Some of the main facts considered were: (i) Contractually, both shareholders exercise joint control over each of the companies, whereby decisions on the relevant activities thereof are made jointly and must be unanimous, there being no power of one party (shareholder) over the other in relation to the investment, irrespective of their different holding percentages; and (ii) There is no power, as defined in IFRS 10, of one party to the detriment of the other party, whether in connection with the voting rights for the appointment of Directors or personnel (whether key or not), in the management of the company to obtain self-benefit or to unilaterally change the variable yields of investments, or, ultimately, to unilaterally direct any of the decisions related to relevant activities.

Finally, as of the date of issuance of these condensed interim consolidated financial statements, the said companies had not made any relevant transactions other than the execution of the agreements for the organization thereof.

The expected power to be installed is 108MW for Y-GEN (Central Loma Campana, Neuquén) and 270MW for Y-GEN II (Central El Bracho, Tucumán), with the power plants’ construction commencement dates being August and July 2016, respectively, and the estimated commencement of the electricity operations and generation being November 2017 and January 2018, respectively.

4.	FINANCIAL RISK MANAGEMENT AND FAIR VALUE MEASUREMENTS

4.a) Financial Risks

The Group’s activities are exposed to a variety of financial risks: market risk (including foreign currency risk, interest rate risk and price risk), credit risk, liquidity risk and capital risk. The Group maintains an organizational structure and systems that allow for the identification, measurement and control of the risks to which it is exposed.

The condensed interim consolidated financial statements do not include all the information and disclosures on financial risk management; therefore, they should be read in conjunction with the Group’s annual consolidated financial statements.

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

4.b) Fair value measurements

Fair value measurements are described in Note 5 to the annual consolidated financial statements.

Between December 31, 2015 and June 30, 2016, there have been no significant changes in the business or economic circumstances affecting the fair value of the Group’s financial assets and liabilities, either measured at fair value or amortized cost. In addition, no transfer has occurred among the different hierarchies used to determine the fair value of the Group’s financial instruments.

5.	SEGMENT INFORMATION


	Exploration and Production			Downstream		Corporate and Other			Consolidation Adjustments⁽¹⁾			Total
For the six-month period ended June 30, 2016
Revenues from sales		10,522			87,915		1,256			—			99,693
Revenues from intersegment sales		46,647			733		3,274			(50,654	)		—

Revenues		57,169			88,648		4,530			(50,654	)		99,693

Operating income		6,157			2,638		79			(1,938	)		6,936
Income on investments in associates and joint ventures		—			263		—			—			263
Depreciation of property, plant and equipment		18,830	⁽²⁾		2,623		306			—			21,759
Acquisitions of property, plant and equipment		23,649			4,867		708			—			29,224
Assets		249,892			149,207		27,326			(2,747	)		423,678

For the six-month period ended June 30, 2015
Revenues from sales		7,404			67,130		600			—			75,134
Revenues from intersegment sales		30,728			898		2,697			(34,323	)		—

Revenues		38,132			68,028		3,297			(34,323	)		75,134

Operating income (loss)		4,794			5,359		(1,061	)		955			10,047
Income (loss) on investments in associates and joint ventures		(5	)		21		—			—			16
Depreciation of property, plant and equipment		10,421			1,471		174			—			12,066
Acquisitions of property, plant and equipment		23,053			3,444		555			—			27,052

As of December 31, 2015
Assets		223,035			113,805		26,708			(95	)		363,453

(1)	Corresponds to eliminations between segments of the YPF group.

(2)	Includes depreciation of the provision for impairment of property, plant and equipment.

There have been no changes in the Group’s structure, its business segments or its financial reporting information criteria with respect to the annual consolidated financial statements. In addition, it should be noted that on March 15, 2016, the Gas and Energy Executive Vice-President Office was created, which shall be in charge of, among other things, natural gas sales and distribution, the management of their respective installations, and the generation of electric energy, both conventional and renewable. As of the date of these condensed interim consolidated financial statements, the Group is still in the process of determining the complete management scope of this new business unit; thus, its financial information as of June 30, 2016 is shown under the Downstream and the Exploration and Production segments.

6.	FINANCIAL INSTRUMENTS BY CATEGORY

The tables below show the Group’s financial assets measured at fair value as of June 30, 2016 and December 31, 2015, and their allocation to their fair value levels:


	As of June 30, 2016
Financial assets	Level 1		Level 2		Level 3		Total
Investments in financial assets:
- Mutual funds		150		—		—		150

		150		—		—		150

Cash and cash equivalents:
- Mutual funds		3,700		—		—		3,700

		3,700		—		—		3,700



		3,850		—		—		3,850


	As of December 31, 2015
Financial assets	Level 1		Level 2		Level 3		Total
Investments in financial assets:
- Mutual funds		340		—		—		340
- Other financial assets		464		—		—		464

		804		—		—		804

Cash and cash equivalents:
- Mutual funds		774		—		—		774

		774		—		—		774



		1,578		—		—		1,578

The Group has no financial liabilities at fair value through profit or loss.

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

The estimated fair value of loans, considering unadjusted listed prices (Level 1) for Negotiable Obligations and interest rates offered to the Group (Level 3) in connection with the remainder of the loans, amounted to 145,287 and 106,336 as of June 30, 2016 and December 31, 2015, respectively.

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

•

Other receivables

•

Trade receivables

•

Cash and cash equivalents

•

Accounts payable

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

7.a) Intangible assets:


	June 30, 2016			December 31, 2015
Net book value of intangible assets		8,471			7,359
Provision for impairment of intangible assets		—	⁽¹⁾		(80	)

		8,471			7,279

(1)	During the six-month periods ended June 30, 2016 a conversion of (10) and a recovery of 90 have been recorded.

Changes in the Group’s intangible assets for the six-month period ended June 30, 2016 and comparative information are as follows:


	2016
	Cost
Main account	At beginning of year		Increases		Translation effect		Decreases and reclassifications			At the end of period
Service concessions		9,527		275		1,470		6			11,278
Exploration rights		2,990		—		432		(99	)		3,323
Other intangibles		4,260		55		650		90			5,055

Total 2016		16,777		330		2,552		(3	)		19,656

Total 2015		10,289		318		650		(38	)		11,219


	2016													2015
	Amortization
Main account	At beginning of year		Increases		Translation effect		Decreases and reclassifications			At the end of period		Net book value 06-30		Net book value 06-30		Net book value 12-31
Service concessions		5,554		185		862		—			6,601		4,677		2,542		3,973
Exploration rights		155		—		—		(6	)		149		3,174		1,952		2,835
Other intangibles		3,709		138		588		—			4,435		620		301		551

Total 2016		9,418		323		1,450		(6	)		11,185		8,471

Total 2015		5,896		160		374		(6	)		6,424				4,795		7,359

7.b) Property, plant and equipment:


	June 30, 2016			December 31, 2015
Net book value of property, plant and equipment		319,670			274,122
Provision for obsolescence of materials and equipment		(890	)		(762	)
Provision for impairment of property, plant and equipment		(2,424	)		(2,455	)

		316,356			270,905

Changes in the Group’s property, plant and equipment for the six-month period ended June 30, 2016 and comparative information are as follows:


	2016
	Cost
Main account	At beginning of year		Increases		Translation effect		Decreases and reclassifications			At the end of period
Land and buildings		13,949		118		2,061		460			16,588
Mineral property, wells and related equipment		458,066		175		71,683		18,116			548,040
Refinery equipment and petrochemical plants		69,429		—		10,843		5,863			86,135
Transportation equipment		3,650		3		549		434			4,636
Materials and equipment in warehouse		13,478		3,739		1,814		(4,104	)		14,927
Drilling and work in progress		76,803		24,629		11,321		(28,757	)		83,996
Exploratory drilling in progress⁽²⁾		3,647		512		513		(683	)		3,989
Furniture, fixtures and installations		5,603		20		849		278			6,750
Selling equipment		10,778		1		1,677		551			13,007
Infrastructure for natural gas distribution		2,931		—		—		76			3,007
Electric power generation facilities		1,573		—		—		99			1,672
Other property		8,291		27		1,166		(73	)		9,411

Total 2016		668,198		29,224		102,476		(7,740	)⁽³⁾		792,158

Total 2015		392,399		27,052		24,560		(1,452	)		442,559


	2016														2015
	Depreciation
Main account	At beginning of year		Increases		Translation effect		Decreases and reclassifications			At the end of period		Net book value 06-30			Net book value 06-30			Net book value 12-31
Land and buildings		5,920		169		877		—			6,966		9,622			5,610			8,029
Mineral property, wells and related equipment		324,922		18,985		50,751		(4,608	)		390,050		157,990	⁽¹⁾		78,396	⁽¹⁾		133,144	⁽¹⁾
Refinery equipment and petrochemical plants		41,138		1,936		6,411		—			49,485		36,650			18,497			28,291
Transportation equipment		2,392		185		356		(6	)		2,927		1,709			761			1,258
Materials and equipment in warehouse		—		—		—		—			—		14,927			9,842			13,478
Drilling and work in progress		—		—		—		—			—		83,996			57,685			76,803
Exploratory drilling in progress⁽²⁾		—		—		—		—			—		3,989			2,565			3,647
Furniture, fixtures and installations		4,699		232		720		(13	)		5,638		1,112			520			904
Selling equipment		6,921		299		1,077		—			8,297		4,710			2,447			3,857
Infrastructure for natural gas distribution		1,181		36		—		(2	)		1,215		1,792			1,687			1,750
Electric power generation facilities		1,283		58		—		—			1,341		331			322			290
Other property		5,620		153		799		(3	)		6,569		2,842			2,141			2,671

Total 2016		394,076		22,053		60,991		(4,632	)⁽³⁾		472,488		319,670

Total 2015		235,156		12,066		14,909		(45	)		262,086					180,473			274,122

(1)	Includes 8,973, 6,274 and 8,435 of mineral property as of June 30, 2016 and June 30, and December 31, 2015, respectively.

(2)	As of June 30, 2016, there are 52 exploratory wells in progress. During the six-month period then ended, 11 wells have been drilled and 17 wells have been charged to exploration expenses.

(3)	Includes disposals as a result of deconsolidation of subsidiaries of 395, net.

The Group capitalizes the financial cost as part of the cost of the assets. For the six-month periods ended on June 30, 2016 and 2015 the rate of capitalization was 12.46% and 12.15%, respectively, and the capitalized amount was 639 and 453, respectively, for the periods above mentioned.

Set forth below is the evolution of the provision for obsolescence of materials and equipment for the six-month periods ended on June 30, 2016 and 2015:


	For the six-month period ended June 30,
	2016		2015
Amount at beginning of year		762		313
Increase charged to expenses		12		2
Translation differences		116		20

Amount at end of period		890		335

Set forth below is the evolution of the provision for impairment of property, plant and equipment for the six-month periods ended on June 30, 2016 and 2015:


	For the six-month period ended June 30,
	2016			2015
Amount at beginning of year		2,455			—
Decrease charged to income⁽¹⁾		(294	)		—
Translation differences		368			—
Deconsolidation of subsidiaries		(105	)		—

Amount at end of period		2,424			—

(1)	Included in the line “Depreciation of property, plant and equipment” in Note 7.n).

7.c) Investments in associates and joint ventures:

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

The following table shows in aggregate, considering that none of the companies is individually material, the amount of investments in associates and joint ventures as of June 30, 2016 and December 31, 2015:


	June 30, 2016			December 31, 2015
Amount of investments in associates		1,385			1,248
Amount of investments in joint ventures		3,484			3,136
Provision for impairment of investments in associates and joint ventures		(12	)		(12	)

		4,857			4,372

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

The main changes that affected the amount of the investments previously mentioned, during the six-month periods ended on June 30, 2016 and 2015, are the following:


	For the six-month periods ended on June 30,
	2016			2015
Amount at the beginning of year		4,372			3,177
Acquisitions and contributions		—			163
Income on investments in associates and joint ventures		263			16
Translation difference		742			123
Reclassification of investments in companies with negative shareholders’ equity		—			4
Distributed dividends		(520	)		(183	)

Amount at the end of period		4,857			3,300

The following table shows the main magnitudes of net income (loss) from the Group’s investments in associates and joint ventures, calculated according to the equity method, for the six-month periods ended on June 30, 2016 and 2015. YPF has made adjustments, where applicable, to the amounts reported by such companies in order to conform the accounting principles used by such companies to those used by the Group:


	Associates				Joint ventures
	2016		2015		2016		2015
Net income (loss)		142		70		121		(54	)
Other comprehensive income		22		6		720		117

Comprehensive income for the period		164		76		841		63

In connection with the Maxus Entities’ Filing with the Bankruptcy Court on June 17, 2016, as described in detail in Note 11, the Company’s Management believes that this is an event that requires reconsideration of whether consolidation of such entities continues to be appropriate. In making this analysis, the Company has followed the guidelines set forth in IFRS 10 “Consolidated financial statements” in order to reconsider whether it will keep control over the activities of the Maxus Entities. This analysis was supplemented by the criteria established in U.S. ASC 810 published by the Financial Accounting Standards Board, whose principles are consistent with previously mentioned IFRS 10, but which deal in more detail with issues related to the consolidation of entities that enter into a specific reorganization process under Chapter 11 of U.S. Bankruptcy Code.

In general, when a company files a petition under Chapter 11 of U.S. Bankruptcy Code, shareholders lose the power to make decisions that have a significant impact in the economic performance of the entities’ business, as this power is typically transferred to the Bankruptcy Court approval.

The filing of the Chapter 11 petitions by the Maxus Entities under Chapter 11 of the Bankruptcy Code has relevant effects on the rights to which YPF Holdings, Inc., is entitled in its capacity as shareholder of those entities, because Creditors substitute the Shareholders in their legal capacity to file derivative suits against Directors on behalf of the entities on the grounds of non-performance of their fiduciary duties, as Creditors must be the primary beneficiaries of any increase in the value of said entities. However, it should be noted that YPF Holdings, Inc. retains its right to appoint the Debtors’ Directors through Shareholders’ Meetings, unless the Bankruptcy Court orders otherwise.

In addition, the filing made before the Bankruptcy Court also has effects on the duties and liabilities of the Board of Directors and the Management of Maxus Entities. Each of the Maxus Entities has become a “Debtor-in-Possession”, whereby, according to the Bankruptcy Code, they retain possession of their property, and, subject to certain limitations, are authorized to carry on their normal course of business, unless the Bankruptcy Court otherwise orders. However, during the term of the reorganization process, the Debtors’ Board of Directors does not have absolute discretion, for any transaction “outside the ordinary course of business” of the Debtors, such as the sale of a significant asset, the expansion of a line of business involving the use of large amounts (or the commitment to do so) or the execution of loans or other kind of financing, shall be subject to the Bankruptcy Court’s approval.

Accordingly, as a result of the filing made under Chapter 11 of the Bankruptcy Code, YPF Holdings, Inc. cannot unilaterally make decisions that would significantly affect the Maxus Debtors’ business or economic performance. Indeed, the Maxus Debtors should seek Bankruptcy Court approval for seemingly ordinary course business activities if such activities could have a significant effect on the Maxus Debtors’ operations or their stakeholders.

Taking into account the foregoing, the Company’s Management believes that YPF Holdings, Inc., despite keeping 100% of the equity interest in the Maxus Entities, no longer has the capacity to use its power over said entities to significantly influence their relevant activities, a necessary condition set forth by IFRS 10 to establish the existence of a controlling financial interest and, therefore, has proceeded to the deconsolidation of the investments in Maxus Entities as of June 17, 2016.

According to ASC 810, this loss of control may involve a gain or loss for the parent company, as the parent company will have to remeasure its non-controlling interest at its fair value after the deconsolidation of the assets and liabilities of the entities. For this calculation it has also been taken into account the liabilities related to the reorganization process incurred as described in Note 11. Thus, the Group has recorded a gain of 1,528 disclosed in “Other operating income, net”.

As a result of the deconsolidation, the condensed consolidated statement of financial position as of June 30, 2016 is not comparable to that issued as of December 31, 2015. As of December 31, 2015, the following balances of assets and liabilities were consolidated in relation to the Maxus Entities:


Item	Debtors’ balances as of 12/31/2015
Noncurrent Assets		731
Current Assets		422

Total assets		1,153

Noncurrent Liabilities		3,966
Current Liabilities		669

Total Liabilities		4,635

Total Liabilities and Shareholders’ Equity		1,153

The effects on the condensed interim consolidated statements of comprehensive income and the condensed interim consolidated statements of cash flow as of June 30, 2016, by including the income and the cash flow, respectively, for the 169-day period until June 17, 2016 during which YPF kept control, are not significant when compared to the respective financial statements issued as of June 30, 2015.

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


	Information of the issuer
	Description of the Securities							Last Financial Statements Available
Name and Issuer	Class	Face Value		Amount		Main Business	Registered Address	Date		Capital stock			Net income (loss)			Equity			Holding in Capital Stock
Subsidiaries:⁽⁹⁾
YPF International S.A.⁽⁷⁾	Common	Bs.	100		66,897	Investment	Street La Plata 19, Santa Cruz de la Sierra, República de Bolivia		06-30-16		13			2			23			100.00	%
YPF Holdings Inc.⁽⁷⁾	Common	US$	0.01		810,614	Investment and finance	10333 Richmond Avenue I, Suite 1050, TX, U.S.A.		12-31-15		10,529			(571	)		(3,482	)		100.00	%
Operadora de Estaciones de Servicios S.A.	Common	$	1		163,701,747	Commercial management of YPF’s gas stations	Macacha Güemes 515, Buenos Aires, Argentina		06-30-16		164			185			383			99.99	%
A-Evangelista S.A.	Common	$	1		307,095,088	Engineering and construction services	Macacha Güemes 515, Buenos Aires, Argentina		06-30-16		307			96			885			100.00	%
YPF Servicios Petroleros S.A.	Common	$	1		50,000	Wells perforation and/or reparation services	Macacha Güemes 515, Buenos Aires, Argentina		06-30-16		—	⁽⁸⁾		26			103			100.00	%
Metrogas S.A.	Common	$	1		398,419,700	Providing the public service of natural gas distribution	Gregorio Aráoz de Lamadrid 1360, Buenos Aires, Argentina.		06-30-16		569			(677	)		(1,449	)		70.00	%
YPF Energía Eléctrica S.A.	Common	$	1		30,006,540	Exploration, development, industrialization and marketing of hydrocarbons, and generation, transportation and marketing of electric power	Macacha Güemes 515, Buenos Aires, Argentina		06-30-16		30			306			1,462			100.00	%
YPF Chile S.A.⁽⁷⁾	Common	—	—		50,968,649	Lubricants and aviation fuels trading and hydrocarbons research and exploration	Villarica 322; Módulo B1, Qilicura, Santiago		06-30-16		684			—			1,218			100.00	%
YPF Tecnología S.A.	Common	$	1		234,291,000	Investigation, development, production and marketing of technologies, knowledge, goods and services	Macacha Güemes 515, Buenos Aires, Argentina		06-30-16		459			85			689			51.00	%
YPF Europe B.V.⁽⁷⁾	Common	US$	0.01		15,660,437,309	Investment and finance	Prins Bernardplein 200, 1097 JB, Amsterdam, Holanda		06-30-16		2,347			69			2,712			100.00	%
YSUR Argentina Investment S.à r.l.⁽⁷⁾	Common	US$	1		20,001	Investment	13-15, Avenue de la Lierté, L-1931, Luxemburgo		03-31-16		—	⁽⁸⁾		—	⁽⁸⁾		5,008			100.00	%
YSUR Argentina Corporation⁽⁷⁾	Common	US$	1		10,000,001	Investment	Boundary Hall, Cricket Square P.O. Box 1111 George Town, Grand Cayman, Cayman Islands KY1-1102		12-31-15		130			—	⁽⁸⁾		322			100.00	%
YSUR Petrolera Argentina S.A.⁽⁷⁾	Common	$	1		634,284,566	Exploration, extraction, exploitation, storage, transportation, industrialization and marketing of hydrocarbons, as well as other operations related thereto	Macacha Güemes 515, Buenos Aires, Argentina		06-30-16		634			54			518			100.00	%
Compañía de Inversiones Mineras S.A.	Common	$	1		17,043,060	Exploration, exploitation, processing, management, storage and transport of all types of minerals; assembly, construction and operation of facilities and structures and processing of products related to mining	Macacha Güemes 515, Buenos Aires, Argentina		06-30-16		17			(6	)		2			100.00	%


	06-30-2016																									12-31-2015
												Information of the issuer
	Description of the Securities													Last Financial Statements Available
Name and Issuer	Class		Face Value		Amount		Book value⁽³⁾			Cost ⁽²⁾		Main Business	Registered Address	Date		Capital stock		Net income (loss)			Equity		Holding in Capital Stock			Book Value⁽³⁾
Joint ventures:
Compañía Mega S.A.^(7) (6)		Common	$	1		244,246,140		1,370			—	Separation, fractionation and transportation of natural gas liquids	San Martín 344, P. 10º, Buenos Aires, Argentina		03-31-16		643		332			2,380		38.00	%		1,277
Profertil S.A.⁽⁷⁾		Common	$	1		391,291,320		1,682			—	Production and marketing of fertilizers	Alicia Moreau de Justo 740, P. 3, Buenos Aires, Argentina		03-31-16		783		(190	)		263		50.00	%		1,452
Refinería del Norte S.A.		Common	$	1		45,803,655		430			—	Refining	Maipú 1, P. 2º, Buenos Aires, Argentina		03-31-16		92		(12	)		861		50.00	%		405

								3,482			—																3,134

Associates:
Oleoductos del Valle S.A.		Common	$	10		4,072,749		152	⁽¹⁾		—	Oil transportation by pipeline	Florida 1, P. 10º, Buenos Aires, Argentina		06-30-16		110		67			414		37.00	%		126	⁽¹⁾
Terminales Marítimas Patagónicas S.A.		Common	$	10		476,034		94			—	Oil storage and shipment	Av. Leandro N. Alem 1180, P. 11º, Buenos Aires, Argentina		03-31-16		14		37			292		33.15	%		70
Oiltanking Ebytem S.A.		Common	$	10		351,167		154			—	Hydrocarbon transportation and storage	Terminal Marítima Puerto Rosales – Provincia de Buenos Aires, Argentina.		06-30-16		12		96			127		30.00	%		150
Gasoducto del Pacífico (Argentina) S.A.		Preferred	$	1		15,579,578		27			—	Gas transportation by pipeline	San Martín 323, P.13°, Buenos Aires, Argentina		12-31-15		156		54			229		10.00	%		23
Central Dock Sud S.A.		Common	$	0.01		11,869,095,145		164			136	Electric power generation and bulk marketing	Pasaje Ingeniero Butty 220, P.16°, Buenos Aires, Argentina		12-31-15		1,231		469			1,614		10.25	% ⁽⁵⁾		152
Inversora Dock Sud S.A.		Common	$	1		355,270,303		519			445	Investment and finance	Pasaje Ingeniero Butty 220, P.16°, Buenos Aires, Argentina		12-31-15		829		329			1,166		42.86	%		484
Oleoducto Trasandino (Argentina) S.A.		Preferred	$	1		12,135,167		35			—	Oil transportation by pipeline	Macacha Güemes 515, P.3º, Buenos Aires, Argentina		03-31-16		34		9			96		36.00	%		25
Other companies:
Other⁽⁴⁾		—	—	—		—		242			135	—	—		—		—		—			—		—			220

								1,387			716																1,250

								4,869			716																4,384

(1)	Holding shareholder´s equity, net of intercompany profits (losses).

(2)	Cost net of cash dividends and stock redemption.

(3)	Holding in shareholders’ equity plus adjustments to conform to YPF accounting principles.

(4)	Includes Gasoducto del Pacífico (Cayman) Ltd., A&C Pipeline Holding Company, Poligás Luján S.A.C.I.,Oleoducto Transandino (Chile) S.A., Bizoy S.A., Civeny S.A., Bioceres S.A., Lestery S.A. and YPF Gas S.A.

(5)	Additionally, the Company has a 29.99% indirect holding in capital stock through Inversora Dock Sud S.A.

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

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

(8)	No value is disclosed as the carrying value is less than 1.

(9)	Additionally consolidates Compañía Minera de Argentina S.A., YPF Services USA Corp, YPF Perú S.A.C., YPF Brasil Comercio Derivado de Petróleo Ltda, Wokler Investment S.A., YPF Colombia S.A.S., Miwen S.A., Eleran Inversiones 2011 S.A.U., YSUR Argentina Holdings S.à r.l., and Energía Andina S.A.

7.d) Inventories:


	June 30, 2016			December 31, 2015
Refined products		12,792			10,709
Crude oil and natural gas		7,368			7,155
Products in process		417			169
Construction works in progress for third parties		147			85
Raw materials, packaging materials and others		1,501			1,140

		22,225	⁽¹⁾		19,258	⁽¹⁾

(1)	As of June 30, 2016 and December 31, 2015, the cost of inventories does not exceed its net realizable value.

7.e) Other receivables:


	June 30, 2016						December 31, 2015
	Noncurrent			Current			Noncurrent			Current
Trade		—			962			—			928
Tax credit and export rebates		272			3,703			304			8,058
Loans to clients and balances with related parties⁽¹⁾		395			2,938			297			2,366
Collateral deposits		16			443			318			895
Prepaid expenses		183			1,244			198			682
Advances and loans to employees		9			293			8			285
Advances to suppliers and custom agents⁽²⁾		—			2,655			—			3,147
Receivables with partners in joint operations and other agreements		1,189			1,513			1,118			1,881
Insurance receivables		—			—			—			808
Miscellaneous		156			736			271			402

		2,220			14,487			2,514			19,452
Provision for other doubtful accounts		(14	)		(40	)		(13	)		(39	)

		2,206			14,447			2,501			19,413

(1)	See Note 13 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.

7.f) Trade receivables:


	June 30, 2016					December 31, 2015
	Noncurrent		Current			Noncurrent		Current
Accounts receivable and related parties⁽¹⁾		297		38,876			469		22,959
Provision for doubtful trade receivables		—		(993	)		—		(848	)

		297		37,883			469		22,111

(1)	See Note 13 for information about related parties.

Changes in the provision for doubtful trade receivables


	For the six-month period ended June 30,
	2016					2015
	Noncurrent		Current			Noncurrent			Current
Amount at beginning of year		—		848			7			866
Increases charged to expenses		—		83			—			264
Decreases charged to income		—		(15	)		—			(30	)
Amounts incurred due to utilization		—		—			(7	)		(16	)
Exchange and translation differences, net		—		77			—			7

Amount at the end of period		—		993			—			1,091

7.g) Cash and cash equivalents:


	June 30, 2016		December 31, 2015
Cash		6,898		13,920
Short-term investments		5,295		693
Financial assets at fair value through profit or loss (Note 6)		3,700		774

		15,893		15,387

7.h) Provisions:


	For the six-month period ended June 30, 2016
	Provision for pending lawsuits and contingencies						Provision for environmental liabilities						Provision for hydrocarbon wells abandonment obligations						Provision for pensions						Total
	Noncurrent			Current			Noncurrent			Current			Noncurrent			Current			Noncurrent			Current			Noncurrent			Current
Amount at beginning of year		10,375			149			1,620			1,400			27,380			429			248			31			39,623			2,009
Increases charged to expenses		620			162			452			—			1,376			—			97			—			2,545			162
Decreases charged to income		(158	)		(35	)		—			—			—			—			(1	)		—			(159	)		(35	)
Amounts incurred due to payments/utilization		—			(183	)		—			(503	)		—			(249	)		—			(13	)		—			(948	)
Exchange and translation differences, net		900			1			156			50			4,275			65			26			3			5,357			119
Deconsolidation of subsidiaries		(2,213	)		(11	)		(1,351	)		(607	)		(515	)		—			(357	)		(34	)		(4,436	)		(652	)
Reclassifications and other		(288	)		215			(555	)		555			(253	)		268			(13	)		13			(1,109	)		1,051

Amount at the end of period		9,236			298			322			895			32,263			513			—			—			41,821			1,706


	For the six-month period ended June 30, 2015
	Provision for pending lawsuits and contingencies						Provision for environmental liabilities						Provision for hydrocarbon wells abandonment obligations						Provision for pensions						Total
	Noncurrent			Current			Noncurrent			Current			Noncurrent			Current			Noncurrent			Current			Noncurrent			Current
Amount at beginning of year		7,014			851			1,269			1,145			18,087			376			194			27			26,564			2,399
Increases charged to expenses		542			76			157			—			767			—			8			—			1,474			76
Decreases charged to income		(172	)		(47	)		—			—			(7	)		(1	)		—			—			(179	)		(48	)
Amounts incurred due to payments/utilization		—			(324	)		—			(422	)		—			(119	)		—			(35	)		—			(900	)
Exchange and translation differences, net		306			33			55			23			1,163			23			12			3			1,536			82
Reclassifications and other		(346	)		346			(280	)		280			(171	)		114			(35	)		35			(832	)		775

Amount at the end of period		7,344			935			1,201			1,026			19,839			393			179			30			28,563			2,384

7.i) Income tax:

According to IAS 34, income tax expense is recognized in each interim period based on the best estimate of the effective income tax rate expected as of the year-end. Amounts calculated for income tax expense for the six-month period ended June 30, 2016 may have to be adjusted in subsequent periods if, based on new judgment elements, the estimate of the effective expected income tax rate changes.

The reconciliation of pre-tax income included in the condensed interim consolidated statement of comprehensive income, at the statutory tax rate, to income tax as disclosed in the condensed interim consolidated statements of comprehensive income for the six-month periods ended June 30, 2016 and 2015, respectively, is as follows:


	For the six-month period ended June 30,
	2016			2015
Net income before income tax		6,557			8,755
Statutory tax rate		35	%		35	%

Statutory tax rate applied to net income before income tax		(2,295	)		(3,064	)
Effect of the valuation of property, plant and equipment and intangible assets measured in functional currency		(11,869	)		(2,750	)
Exchange differences		8,912			2,014
Effect of the valuation of inventories measured in functional currency		(1,254	)		(303	)
Income on investments in associates and joint ventures		92			6
Miscellaneous		(41	)		(251	)

Income tax expense		(6,455	)		(4,348	)

The Group did not recognize the following deferred income tax assets since they do not meet the recognition criteria set forth under IFRS:

•

As of June 30, 2016, the Group did not recognize 1,046, corresponding to tax loss carry forwards from subsidiaries, of which 1,005 will expire from 2017 on and 41 have an undetermined expiration date.

•

As of December 31, 2015, the Group did not recognize 4,373, of which 2,041 corresponds to taxable temporary differences not recoverable and 2,332 corresponds to tax loss carry forwards from subsidiaries.

In addition, as of June 30, 2016, 100 have not been recorded for minimum presumed income tax, which will expire between 2016 and 2024.

The composition of the Group’s deferred income tax assets and liabilities as of June 30, 2016 and December 31, 2015 is as follows:


	June 30, 2016			December 31, 2015
Deferred tax assets
Nondeductible provisions and other liabilities		3,477			3,093
Tax loss carryforward and other tax credits		5,620			3,236
Miscellaneous		67			83

Total deferred tax assets		9,164			6,412


Deferred tax liabilities
Property, plant and equipment		(53,578	)		(45,393	)
Miscellaneous		(5,663	)		(4,877	)

Total deferred tax liabilities		(59,241	)		(50,270	)

Net deferred tax liability		(50,077	)		(43,858	)

As of June 30, 2016 and December 31, 2015, 893 and 954, respectively, have been classified as deferred income tax assets and 50,970 and 44,812, respectively, as deferred income tax liabilities arising from the deferred income tax net balance of each individual company that take part in these condensed interim consolidated financial statements.

As of June 30, 2016 and December 31, 2015, the factors that generated charges under “Other comprehensive income” did not generate temporary differences subject to income tax.

7.j) Loans:


					June 30 , 2016						December 31 , 2015
	Interest rate ⁽¹⁾		Maturity		Noncurrent			Current			Noncurrent		Current
Argentine pesos:
Negotiable obligations		24.90 – 37.44%		2016-2024		20,010			3,543			19,280		2,050
Loans		15.25 – 35.38%		2016-2020		2,413	⁽³⁾		1,475	⁽³⁾		1,224		792
Account overdraft		28.00 – 34.00%		2016		—			5,403	⁽⁵⁾		—		4,737	⁽⁵⁾

						22,423			10,421			20,504		7,579


Currencies other than the Argentine peso:
Negotiable obligations ⁽²⁾⁽⁴⁾		1.29 – 10.00%		2016-2028		74,495			8,107			52,651		9,981
Exports pre-financing		3.50 – 7.60%		2016-2019		2,178			6,443			1,039		3,680
Imports financing		4.10 – 6.81%		2016-2017		246			5,132			—		4,736
Loans		3.50 – 7.98%		2016-2021		5,920			3,719			3,740		1,841

						82,839			23,401			57,430		20,238

						105,262			33,822			77,934		27,817

(1)	Annual interest rate as of June 30, 2016.

(2)	Disclosed net of 652 and 1,349, corresponding to YPF’s outstanding Negotiable Obligations repurchased through open market transactions as of June 30, 2016 and December 31, 2015, respectively.

(3)

Includes 2,158 corresponding to loans granted by Banco Nación Argentina, of which 158 accrue a fixed interest rate of 15% until March 2016 and then accrue variable interest of BADLAR plus a spread of 4 percentage points and 2,000 accrue variable interest of BADLAR plus a spread of 3.5 percentage points. See Note 13.

(4)	Includes 7,301 and 9,970 as of June 30, 2016 and December 31, 2015, respectively, of face value negotiable obligations, to be cancelled in Argentine pesos at the prevailing exchange rate according to the terms of the issued series.

(5)	Includes 1,513 and 1,926 of account overdrafts granted by Banco Nación Argentina as of June 30, 2016 and December 31, 2015. See Note 13.

The breakdown of the Group’s borrowings for the six-month period ended June 30, 2016 and 2015 is as follows:


	For the six-month periods ended June 30,
	2016			2015
Amount at beginning of year		105,751			49,305
Proceeds from loans		54,466			28,227
Payments of loans		(33,954	)		(11,972	)
Payments of interest		(6,893	)		(3,145	)
Accrued interest ⁽¹⁾		7,744			3,533
Exchange and translation differences, net		11,970			2,993

Amount at the end of period		139,084			68,941

(1)	Includes capitalized financial costs, as mentioned in Note 7.b).

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


															June 30, 2016				December 31, 2015
Month	Year		Face value		Ref.		Class		Interest rate ⁽³⁾				Maturity		Noncurrent		Current		Noncurrent		Current
YPF
-		1998	US$	15		(1) (6)		—		Fixed	10.00	%		2028		58		4		49		3
October and December		2012	US$	552		(2) (4) (5) (6) (8)		Class X		Fixed	6.25	%		2016		—		3,757		—		7,258
November and December		2012	$	2,110		(2) (4) (6) (8)		Class XI		BADLAR plus 4.25%	33.27	%		2017		—		2,204		1,055		1,129
December and March		2012/3	$	2,828		(2) (4) (6) (8)		Class XIII		BADLAR plus 4.75%	35.38	%		2018		2,828		30		2,828		25
April		2013	$	2,250		(2) (4) (6) (8)		Class XVII		BADLAR plus 2.25%	30.68	%		2020		2,250		117		2,250		91
April		2013	US$	89		(2) (5) (6)		Class XIX		Fixed	1.29	%		2017		—		1,337		1,156		3
June		2013	$	1,265		(2) (4) (6)		Class XX		BADLAR plus 2.25%	32.86	%		2020		1,265		15		1,265		12
July		2013	US$	92		(2) (5) (6)		Class XXII		Fixed	3.50	%		2020		727		187		630		162
October		2013	US$	150		(2) (6)		Class XXIV		Libor plus 7.50%	8.12	%		2018		661		541		802		471
December, February and December		2013/5	US$	862		(2)		Class XXVI		Fixed	8.88	%		2018		12,691		31		11,057		33
April and February		2014/5	US$	1,325		(2)		Class XXVIII		Fixed	8.75	%		2024		19,862		420		17,212		364
March		2014	$	500		(2) (6) (8)		Class XXIX		BADLAR	30.18	%		2020		500		10		500		7
June		2014	$	465		(2) (6)		Class XXXII		—	—			2016		—		—		—		157
June		2014	US$	66		(2) (5) (6)		Class XXXIII		Fixed	2.00	%		2017		—		662		287		574
September		2014	$	1,000		(2) (6) (8)		Class XXXIV		BADLAR plus 0.1%	25.00	%		2024		1,000		68		1,000		56
September		2014	$	750		(2) (4) (6)		Class XXXV		BADLAR plus 3.5%	28.40	%		2019		750		58		750		49
February		2015	$	950		(2) (8) (6)		Class XXXVI		BADLAR plus 4.74%	28.06	%		2020		950		104		950		95
February		2015	$	250		(2) (6) (7)		Class XXXVII		BADLAR plus 3.49%	32.32	%		2017		—		262		250		9
April		2015	$	935		(2) (4) (6)		Class XXXVIII		BADLAR plus 4.75%	30.42	%		2020		935		64		935		55
April		2015	US$	1,500		(2)		Class XXXIX		Fixed	8.50	%		2025		22,350		808		19,369		1,111
July		2015	$	500		(2)		Class XL		BADLAR plus 3.49%	31.15	%		2017		500		32		500		26
September		2015	$	1,900		(2)(8)		Class XLI		BADLAR	24.90	%		2020		1,900		128		1,900		112
September and December		2015	$	1,697		(2) (4)		Class XLII		BADLAR plus 4%	28.90	%		2020		1,697		133		1,697		119
October		2015	$	2,000		(2) (8)		Class XLIII		BADLAR	26.22	%		2023		2,000		102		2,000		83
December		2015	$	1,400		(2)		Class XLIV		BADLAR plus 4.75%	35.15	%		2018		1,400		28		1,400		25
March		2016	$	150		(2)		Class XLV		BADLAR plus 4%	34.11	%		2017		150		4		—		—
March		2016	$	1,350		(2) (4)		Class XLVI		BADLAR plus 6%	32.60	%		2021		1,350		143		—		—
March		2016	US$	1,000		(2)		Class XLVII		Fixed	8.50	%		2021		14,990		347		—		—
April		2016	US$	46		(2) (5)		Class XLVIII		Fixed	8.25	%		2020		687		11		—		—
April		2016	$	535		(2)		Class XLlX		BADLAR plus 6%	37.44	%		2020		535		41		—		—
Metrogas
January		2013	US$	177				Series A-L		Fixed	8.88	%		2018		2,262		2		1,906		2
January		2013	US$	18				Series A-U		Fixed	8.88	%		2018		207		—		183		—

																94,505		11,650		71,931		12,031

(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)	Interest rate as of June 30, 2016.

(4)

The ANSES and/or the Fondo Argentino de Hidrocarburos have participated in the primary subscription of these negotiable obligations, which may, at the discretion of the respective holders, be subsequently traded in the securities market where these negotiable obligations are authorized to be traded.

(5)	The payment currency of these Negotiable Obligations is the Argentine peso at the Exchange rate applicable under the terms of the series issued.

(6)	As of the date of issuance of these condensed interim consolidated financial statements, the Group has fully complied with the use of proceeds disclosed in the pricing supplements.

(7)	Until the course of twelve months since the date of issuance and liquidation to a fixed nominal annual rate of 25.75%; and then and until the date of maturity of the negotiable obligations to a variable nominal annual rate of BADLAR plus 3.49%.

(8)	Negotiable Obligations classifying as productive investment, computable as such for purposes of subsection 35.8.1, paragraph K of General Regulations applicable to Insurance Activities issued by the Argentine Insurance Supervision Bureau.

7.k) Accounts payable:


	June 30, 2016				December 31, 2015
	Noncurrent		Current		Noncurrent		Current
Trade and related parties ⁽¹⁾		275		39,374		204		38,782
Investments in companies with negative shareholders’ equity		—		1		—		1
Extension of concessions		355		391		340		412
Guarantee deposits		7		473		8		467
Miscellaneous		61		464		73		317

		698		40,703		625		39,979

(1)	For more information about related parties, see Note 13.

7.l) Revenues:


	For the six-month periods ended June 30,
	2016			2015
Sales ⁽¹⁾		102,975			77,149
Production incentive program (Note 13)		—			612
Revenues from construction contracts		335			182
Turnover tax		(3,617	)		(2,809	)

		99,693			75,134

(1)

Includes 9,568 and 5,641 for the six-month periods ended on June 30, 2016 and 2015, respectively, associated with revenues related to the natural gas additional injection stimulus program created by Resolution 1/2013 of the Ex-Planning and Strategic Coordination Commission of the National Plan of Hydrocarbons Investment.

7.m) Costs:


	For the six-month periods ended June 30,
	2016			2015
Inventories at beginning of year		19,258			13,001
Purchases for the period		22,731			16,158
Production costs		60,338			40,038
Translation effect		2,848			736
Inventories at end of period		(22,225	)		(12,972	)

Cost of sales		82,950			56,961

7.n) Expenses by nature:


	For the six-months periods ended June 30,
	2016												2015
	Production costs⁽³⁾		Administrative expenses			Selling expenses		Exploration expenses		Total			Total
Salaries and social security taxes		4,780		1,274			725		123		6,902			5,252
Fees and compensation for services		414		736	⁽²⁾		194		12		1,356			1,109
Other personnel expenses		1,334		210			57		20		1,621			1,308
Taxes, charges and contributions		907		160			1,651		—		2,718	⁽¹⁾		2,391	⁽¹⁾
Royalties, easements and canons		8,297		—			11		18		8,326			5,735
Insurance		471		22			38		—		531			492
Rental of real estate and equipment		2,440		12			230		1		2,683			1,773
Survey expenses		—		—			—		269		269			75
Depreciation of property, plant and equipment		21,015		289			455		—		21,759			12,066
Amortization of intangible assets		208		97			18		—		323			160
Industrial inputs, consumable materials and supplies		2,686		19			39		5		2,749			1,780
Operation services and other service contracts		4,581		178			431		68		5,258			4,124
Preservation, repair and maintenance		7,747		152			150		13		8,062			6,172
Unproductive exploratory drillings		—		—			—		656		656			331
Transportation, products and charges		3,215		6			2,212		—		5,433			3,892
Provision for doubtful trade receivables		—		—			68		—		68			234
Publicity and advertising expenses		—		74			105		—		179			185
Fuel, gas, energy and miscellaneous		2,243		90			360		7		2,700			1,571

Total 2016		60,338		3,319			6,744		1,192		71,593

Total 2015		40,038		2,556			5,478		578					48,650

(1)	Includes approximately 666 and 656 corresponding to hydrocarbon export withholdings for the six-month periods ended June 30, 2016 and 2015, respectively.

(2)

Includes 102 corresponding to YPF’s Directors and Statutory Auditor’s fees and remunerations for all concepts. On April 29, 2016, the General Ordinary and Extraordinary Shareholder’s meeting of YPF decided to ratify fees of 140 for the 2015 year and decided to approve as fees and remunerations for all concepts in advance for the 2016 year the sum of approximately 127.

(3)	The expense recognized in the condensed interim consolidated statements of comprehensive income related to research and development activities during the six-month periods ended June 30, 2016 and 2015 amounted to 151 and 116, respectively.

7.o) Other operating results, net:


	For the six-month periods ended June 30,
	2016			2015
Lawsuits		(457	)		(162	)
Construction incentive⁽¹⁾		228			264
Temporary economic assistance		—			356	⁽²⁾
Income on deconsolidation of subsidiaries ⁽³⁾		1,528			—
Miscellaneous		149			28

		1,448			486

(1)	Corresponds to the incentive to Argentine manufacturers of capital goods received by A-Evangelista S.A. under the provisions of Executive Order No. 379/2001 of the Argentine Ministry of Economy, for the six-month periods ended June 30, 2016 and 2015.

(2)	Corresponds to the temporary economic assistance received by Metrogas S.A. ordered by the Argentine Energy Secretariat in Resolution No. 263/2015 for the six-month period ended June 30, 2015 (see Note 13).

(3)	See Note 7.c)

7.p) Financial results, net:


	For the six-month periods ended June 30,
	2016			2015
Finance income
Interest income		514			404
Exchange differences		10,595			3,233

Total finance income		11,109			3,637


Finance cost
Interest expense		(8,225	)		(3,712	)
Finance accretion		(1,504	)		(936	)
Exchange differences		(2,441	)		(617	)

Total finance cost		(12,170	)		(5,265	)


Other financial results
Fair value gains on financial assets at fair value through profit or loss		205			320
Gains on derivative financial instruments		214			—

Total other financial results		419			320



Financial results, net		(642	)		(1,308	)

8.	INVESTMENTS IN JOINT OPERATIONS

The Group participates in joint operations and other agreements which give the Group a contractually established percentage of the rights to the assets and obligations governed by the contracts. Interests in such joint operations have been consolidated line by line on the basis of the mentioned interest over the assets, liabilities, income and expenses related to each contract. Interests in joint operations have been calculated based upon the latest available financial statements as of the end of each year, taking into consideration significant subsequent events and transactions as well as available management information.

The exploration and production joint operations and other agreements in which the Group participates allocate hydrocarbon production to each partner based on its ownership interest; consequently, such hydrocarbons are commercialized directly by the partners, each of them recognizing the corresponding economic effects.

The assets and liabilities as of June 30, 2016 and December 31, 2015, and main magnitudes of profit or loss for the six-month periods ended on June 30, 2016 and 2015 of the joint operations and other agreements are detailed below:


	June 30, 2016		December 31, 2015
Noncurrent assets		58,958		47,322
Current assets		881		944

Total assets		59,839		48,266


Noncurrent liabilities		4,897		4,593
Current liabilities		6,493		6,391

Total liabilities		11,390		10,984


	For the six-month periods ended June 30,
	2016		2015
Production cost		9,782		6,068
Exploration expenses		360		111

9.	SHAREHOLDERS’ EQUITY

On April 29, 2016, the General Ordinary and Extraordinary Shareholders’ meeting was held, which approved the financial statements of YPF for the year ended December 31, 2015 and additionally decided the following in relation to the distribution of earnings: (a) to allocate the amount of 50 to a reserve for future acquisition of YPF shares under the “performance and bonus program” mentioned in the Director’s report, giving the Board of Directors the opportunity to acquire shares when it considers it convenient and to comply with the commitments assumed and to be assumed in relation with the mentioned program; (b) to allocate the amount of 3,640 to constitute a reserve for investment in accordance with article 70, paragraph 3 of Law 19,550 of Argentine Corporations and its amendments; and (c) to allocate the amount of 889 to a reserve for future dividends, empowering the Board of Directors to determine when to make a payment so long as it occurs before the end of the present fiscal year. On June 9, 2016, the Board of Directors of the Company decided to pay a dividend of 2.26 per share, for an amount of 889, which was made available to shareholders on July 7, 2016.

10.

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 earnings per share:


	For the six-month periods ended on June 30,
	2016		2015
Net income		253		4,424
Average number of shares outstanding		391,943,076		392,326,489
Basic and diluted earnings per share		0.65		11.28

Basic and diluted earnings per share are calculated as shown in Note 1.b.13 to the annual consolidated financial statements.

11.

PROVISIONS FOR PENDING LAWSUITS, CLAIMS AND ENVIROMENTAL LIABILITES

Provisions for pending lawsuits, claims and environmental liabilities are described in Note 10 to the annual consolidated financial statements.

As of June 30, 2016, the Group has accrued pending lawsuits, claims and contingencies which are probable and can be reasonably estimated, amounting to 9,534.

In relation to environmental obligations, and in addition to the hydrocarbon wells abandonment legal obligations for 32,776, as of June 30, 2016, the Group has accrued 1,217 corresponding to environmental remediation, which evaluations and/or remediation works are probable and can also be reasonably estimated, based on the Group’s existing remediation program.

Developments during the six-month period ended June 30, 2016, concerning the most significant pending lawsuits and contingencies are described below.

•

With respect to the AES Uruguaiana Emprendimientos S.A. (“AESU”) and Transportadora Gas del Mercosur S.A. (“TGM”) arbitration proceedings and the writ of nullity filed on February 2, 2016 by AESU and Companhía do Gas do Estado do Rio Grande do Sul (“SULGAS”), on February 23, 2016, the Court of Appeals denied the motion “in limine”. AESU and SULGAS filed a motion before the Supreme Court against this denial, which was communicated to YPF on March 31, 2016. On the same date, the Court of Appeals rejected the motion to appeal before the Supreme Court filed by TGM on February 2, 2016.

On April 26, 2016, Division IV of the Court of Appeals denied the motion filed by AESU and SULGAS and passed a new resolution declaring the nullity and ineffectiveness of all proceedings filed by the parties until then and by the Arbitration Tribunal regarding the “second stage” of the Arbitration, on the basis that they lacked legal grounds. In turn, the resolution recalls the legal order arising from Section 34, subsection 5, paragraph b, of the Argentine Civil and Commercial Code of Procedures (“CPCCN”), advising the Arbitration Tribunal that it may not issue any resolution regarding the second stage of the arbitration, including a final award on damages, and also advising AESU, SULGAS and TGM that any of their respective acts to that end or any act of the Arbitration Tribunal that might involve them, in violation of the above referred judgment, shall be evaluated by such Court Division in the exercise of the powers vested on it by the CPCCN as process manager (section 45 and related sections). In addition, this Division ordered to notify the Arbitration Tribunal and the International Arbitration Secretary’s Office for the International Chamber of Commerce (“ICC”), advising them that the Arbitration Tribunal is not in a position to issue an award in accordance with applicable law.

This resolution was communicated by YPF to the Arbitration Tribunal, the parties and the ICC. On the same date but following this notification, YPF was given notice of the damages arbitration award issued by a majority of the Arbitration Tribunal, whereby the Company was ordered to pay damages of US$185 million to AESU, for the early termination of the gas export contract in 2009, and on account of the delivery or pay penalty, and of US$ 319 million to TGM on account of the principal invoices amount, irrevocable contributions and damages for the early termination of the transportation contract.

On May, 2, 2016, YPF filed with the ICC and the Arbitration Tribunal the relevant writ of nullity against the said arbitration award. On the same date, it also filed a writ of nullity before Division IV of the Federal Contentious Administrative Tribunal, and in an auxiliary manner filed a reconsideration motion from denial of appeal.

On May 4, 2016, the Arbitration Tribunal passed a resolution resolving that it would refrain from issuing a decision regarding the writ of nullity filed by YPF. Considering this resolution a dismissal of the writ of nullity, on May 5, 2016, YPF filed before Division IV of the Federal Contentious Administrative Tribunal a motion for reconsideration against the decision rendered by the Arbitration Tribunal to deny the writ of nullity filed by the Company.

On May 5, 2016, AESU filed in the jurisdiction of New York, South District an action for the acknowledgment and enforcement of the Partial Liability Award issued in 2013. As of the date hereof, YPF has neither been given notice nor has it received the Final Award on Damages.

•

In connection with the complaint filed by “Users and consumers’ association” against YPF, the Company filed an appeal against the relevant judgment, which was admitted with staying effect. Plaintiff also filed an appeal against the judgment and both parties filed their respective appellate briefs, which were

answered. On April 4, 2016, the file was raised to the Court of Appeals. The updated judgement amount as of the date of these consolidated condensed interim financial statements amounts to approximately 544 plus legal costs.

•

As to the administrative environmental issues related to the lower 8 miles of the Passaic River, affecting Maxus Energy Corporation (“Maxus”) and Tierra Solutions, Inc. (“TS”) (companies deconsolidated on June 17, 2016 – see Note 7.c)) on March 4, 2016, the U.S. Environmental Protection Agency (“EPA”) issued the Record of Decision (“ROD”) for the lower 8.3 miles of the Passaic River, which is a part of the Diamond Alkali Superfund Site - Essex and Hudson Counties, New Jersey. The ROD selects the so-called Alternative 3 as the remedy for the removal of contaminated sediments with an estimated cost of US$1,382 million (net present value at a 7% rate).

The ROD requires the removal of 3.5 million cubic yards of sediment from the lower 8.3 miles of the Passaic River by bank-to-bank dredging, to a depth of approximately 5 to 30 feet in the federal navigation channel from mile 0 to mile 1.7, and approximately 2.5 feet in the remaining areas of the lower 8.3 miles of the Passaic River. A two-foot thick cap will be installed over the dredged areas. Contaminated segments will be transported to disposal sites outside the state. The EPA estimates the whole project will take approximately 11 years, including one year for negotiations among potentially responsible parties, three to four years for project design and six years for its implementation.

On March 31, 2016, the EPA notified all potentially responsible parties, including Occidental Chemical Corporation (“OCC”), of the liabilities relating to the 8.3 miles area of the Passaic River relating to the ROD. In the same notice the EPA stated that it expected OCC (against whom Maxus is litigating a dispute over indemnity) to prepare the remediation plan design and that it would send a second letter with an administrative proposal to this end, which was received by counsel to OCC, Maxus and TS on April 26, 2016.

As of June 17, 2016, OCC, Maxus and TS were holding discussions with EPA to define their participation in a potential negotiation aimed at taking part in the design of EPA’s proposed remediation plan, taking into account that the ROD has identified over one hundred potentially responsible parties and eight contaminants of concern, many of which have not been generated at the Lister Site. As of such date Maxus was evaluating the situation resulting from the issuance of the ROD by the EPA, as well as its subsequent associated letters.

•

In connection with the Passaic River litigation, in which the New Jersey Department of Environmental Protection (“DEP”) holds with YPF, YPF Holdings Inc. and other subsidiaries (including Maxus, a company that was deconsolidated on June 17, 2016 – See Note 7.c)), with respect to the contamination of the lower Passaic River with dioxin and other hazardous substances discharged by the Newark plant, the parties appealed the recommendations of the Special Judge to Judge Furnari (presiding Judge of the legal proceedings) on February 16, 2016, who, nevertheless, adopted the Special Masters, recommendations in their entirety. In addition, having been completed discovery of all relevant evidence, the acting Judge issued Case Management Order XXVIII, which sets forth, among other procedural deadlines, June 20, 2016 as the date for the commencement of the trial.

On April 25, 2016, all the parties moved to request permission to file interlocutory appeals and a stay of the litigation during the appellate proceedings. Maxus filed a motion requesting permission to appeal the ruling granting summary judgment to OCC against Maxus, which held that Maxus is liable under the stock purchase and sale agreement for all obligations under, or arising from, the Lister Site, even if attributable to OCC’s own acts. YPF filed a motion requesting permission to appeal the ruling denying its motion for summary judgment seeking a decision indicating that OCC may not use allegedly fraudulent transfers which are prescribed as a basis for its alter ego claims against YPF. OCC filed only one motion, appealing the ruling that granted to Repsol the motion for summary judgment, whereby all claims against Repsol were dismissed. OCC did not appeal the rulings that (a) denied OCC’s motion to file additional cross claims; (b) denied OCC’s motion for a declaratory judgment regarding future costs; and (c) denied OCC’s motion for summary judgment seeking a dismissal of Repsol’s Spill Act contribution claim against OCC (all of the foregoing without prejudice to reserving the right to file post-trial motions of appeal on these issues).

However, all litigation against Maxus has been stayed upon Maxus’ filing under Chapter 11 of the Bankruptcy Code, which is explained below.

•

On June 17, 2016, voluntary petitions under Chapter 11 of the Bankruptcy Code were filed with the Bankruptcy Court of the District of Delaware of the United States (hereafter, the “Bankruptcy Court”) by (a) Maxus Energy Corporation and its subsidiaries Maxus International Energy Company, Maxus (US) Exploration Company and Gateway Coal Company; and (b) Tierra Solutions Inc. (all of them hereafter referred to as the “Maxus Entities” or “Debtors”, subsidiaries of YPF Holdings, Inc.).

The Debtor’s businesses are divided into three areas: (a) management of interests related to the exploitation of hydrocarbons carried out by Maxus and its subsidiaries; (b) management of remediation activities carried out by Tierra Solutions Inc.; and (c) management of benefits of former employees who are currently retired.

In this framework, Debtors have entered into an agreement (the “Agreement”) with YPF S.A., jointly with its subsidiaries YPF Holdings Inc., CLH Holdings Inc., YPF International S.A. and YPF Services USA Corp (jointly, “YPF Entities”) to settle all Debtors’ claims against YPF Entities, including any alter ego claims which, in YPF Entities’ opinion, have no merits.

The Agreement provides: i) the granting of a loan by YPF Holdings for an amount of US$ 63.1 million (“DIP Loan”) to finance Debtors’ activities during the estimated term of the reorganization procedure in order that, ultimately, the reorganization procedure under Chapter 11 might allow them to restructure their operations in a sustainable manner; ii) a payment of US$ 130 million to Maxus Entities (“Settlement Payment”) for all potential claims that the Debtors might have against YPF Entities.

The first hearing corresponding to the filing under Chapter 11 of the Bankruptcy Code (the “Filing”) took place on June 20, 2016. At that hearing, the Bankruptcy Court approved, among other things, the Debtors’ motions to continue, as “Debtors-in-Possession”, to maintain their day-to-day operations, including the Debtors’ use of the system for fund management and payment of salaries and benefits to retired employees. The case is pending before United States Bankruptcy Judge Christopher S. Sontchi.

Subject to certain exceptions under the Bankruptcy Code, effective as of the date of the filing of the Chapter 11 petitions with the Bankruptcy Court, most decisions, as well as the issues related to creditors’ claims and actions for the collection of their claims that arose prior to the filing date are automatically stayed (among others, those corresponding to claims against Maxus Entities at the local court of New Jersey related to the Passaic River litigation – see Note 11 to these consolidated condensed interim financial statements and also Note 11 to the annual consolidated financial statements).

12.

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

Contingent liabilities, contingent assets, contractual commitments, main regulations and others are described in Note 11 to the annual consolidated financial statements.

Developments during the six-month period ended June 30, 2016 concerning the above are detailed below.

a) Contingent Liabilities

•

In connection with the complaint filed by Petersen Energía Inversora, S.A.U and Petersen Energía, S.A.U., on July 20, 2016, a hearing was held at the Court, at which the parties made their arguments regarding the motion to dismiss, answering the questions asked by the Judge. The Court is expected to soon issue a resolution with respect to the motions to dismiss.

•

In connection with Resolution No. 17/2012, issued by the Secretariat of the Interior of the ex-Federal Ministry of Economy and Public Finance, which ordered YPF, Shell Compañía Argentina de Petróleo S.A. and Esso Petrolera Argentina S.R.L. to supply jet fuel for the domestic and international air transport at a price net of taxes not to exceed 2.7% of the price net of taxes of Super gasoline (not Premium) offered at their respective service stations closest to the relevant airport, maintaining the current fuel supply logistics

in its ordinary and usual supply quantities, finally, in December 2015, the Argentine Supreme Court (“CSJN”) ruled sustaining the appeal filed by the Federal Government. Thus, the CSJN confirmed the jurisdiction of the Secretariat of Commerce to issue administrative precautionary measures under Section 35 of Law No. 25,156. In addition, it ordered that the records of the case be returned “to the original court so that the person concerned” may issue a new ruling on the basis of the decision. As a result, the Federal Court must issue a new ruling on the lawfulness or unlawfulness of Resolution 17/2012 on the basis of the additional grounds previously alleged by YPF regarding the substance of this issue.

b) Contingent Assets

•

Cerro Divisadero:

Concerning the fire that damaged the facilities of the Crude Oil Treatment Plant of Cerro Divisadero in Mendoza, as of December 31, 2015 the claim settlement proceedings were concluded, with the final settlement amount agreed at US$ 122 million, of which US$ 45 million was related to property damage and US$ 77 million was related to production losses, for which a US$ 60 million advance had already been received as of such date. During the six-month period ended June 30, 2016, the Company received the second and final payment of US$ 62 million.

c) Contractual commitments

•

Agreements for project investments

•

With respect to the Investment Project Agreement executed by and between the Company and subsidiaries of Chevron Corporation with the objective of the joint exploitation of unconventional hydrocarbons in the province of Neuquén, in the Loma Campana area, during the six-month period ended June 30, 2016, the Company and Compañía de Hidrocarburo No Convencional S.R.L. (“CHNC”) have completed transactions, including mainly the purchases of gas and crude oil by YPF for 2,779. These transactions were completed under general and regulatory market conditions. The net balance payable to CHNC as of June 30, 2016 amounts to 1,128.

•

Concerning the acquisition by Pampa Energía S.A. (“PEPASA”) of the whole capital stock of Petrobras Participaciones S.L., which holds 67.2% of the capital and votes of Petrobras Energía S.A. (“PESA”), YPF and PEPASA have entered into an agreement subject to certain conditions precedent whereby, upon formalization of the acquisition of the controlling interest in PESA by PEPASA, the latter shall assign to YPF participations in the exploitation concessions of two areas located in the Neuquén Basin with production and high development potential of gas (of the tight and shale type), to be operated by YPF, according to the following percentages: (i) 33.33% interest in Río Neuquén Area, located in the Province of Neuquén and in the Province of Río Negro; and (ii) 80% interest in the Aguada de la Arena Area in the Province of Neuquén.

In order to give effect to this agreement, PEPASA and YPF have signed the Financing and Interest Acquisition Framework Agreement and a Loan Agreement whereby YPF, on July 25, 2016, granted PEPASA a secured loan for the indirect acquisition of the aforementioned areas in the amount of US$ 140 million, equal to the acquisition cost of the mentioned interests. Upon the approval of the aforementioned interest assignment by PESA’s Board of Directors, the mentioned loan may be used for the payment of YPF’s acquisition of the interests in concession and joint operations with; (i) PESA and an affiliate of Petróleo Brasileiro S.A. for the Río Neuquén Area, and (ii) Petrouruguay S.A. for the Aguada de la Arena Area.

d) Main regulations and others

•

Natural gas regulatory requirements - Producers and Distribution Companies

Temporary Agreement with Natural Gas Network Distribution Companies

On February 24, 2016, within the framework of the process for renegotiating public services contracts provided by Law No. 25,561 and supplementary regulations, Metrogas entered into a Temporary Agreement with the Ministry of Energy and Mining (“MINEM”) and the Ministry of Economy and Public Finance whereby a provisional tariff regime was established for the collection of higher revenues than those collected under the Temporary Agreement of 2014 and ENARGAS Resolution No. I/2407/2012 issued on November 27, 2012.

The new Temporary Agreement, which is not subject to ratification by the Federal Executive, establishes an interim tariff regime effective from April 1, 2016, consisting of the readjustment of tariffs, taking into account the guidelines necessary to maintain service continuity and common criteria with the other distribution licensees, and considering tariff regulations, including changes in the gas price at the Transportation System Entry Points (“TSEPs”).

Furthermore, the Temporary Agreement provides that, between its execution date and December 31, 2016, the parties shall reach an agreement relating to the method, time frames and timing of the execution of the Memorandum of Agreement for Comprehensive Contractual Renegotiations.

The Temporary Agreement also provides that it will incorporate any transfer that results from changes in tax regulations that remain outstanding, except for the income tax, and imposes a mandatory investment plan on Metrogas for an amount of 715.

On April 1, 2016 the MINEM issued the following Resolutions:

(1)

Resolution No. 28/2016 passed by the MINEM, which, among other things:

•

Sets the new prices for natural gas at the Transportation System Entry Points (“TSEPs”), broken up by basin and user category, and provides discounts to those Residential Users reducing their consumption by fifteen percent (15%) or more as compared to the same period of the previous year, taking effect for consumption starting from April 1, 2016.

•

Sets the new Propane Gas Prices for Undiluted Propane Gas distribution, as well as provides discounts to those Residential Users recording a savings in their consumption equal to or higher than fifteen percent (15%) compared to the same period of the previous year.

•

Instructs the ENARGAS to adapt the Registry of Persons Exempt from the Argentine Government Policy of Subsidy Reallocation through which ENARGAS adopts for Residential Users the Eligibility Criteria to benefit from a “Social Tariff”, with a one hundred percent (100%) discount on the Natural Gas price or the Propane Gas price consumed by such users. On May 6, 2016, the Registry of Persons Exempt from the Argentine Government Policy of Subsidy Reallocation was modified by ENARGAS Resolution No. 3,784/2016.

•

Revokes resolutions passed by the former ex-Ministry of Federal Planning, Public Investment and Services under Section 6 of Executive Order No. 2,067/2008 and Section 7 of Resolution No. 1,451/2008, related to the assessment of tariff charges, to which end it instructs ENARGAS to take the necessary measures to cease applying those charges in the bills issued to users.

(2)

Resolution No. 31 of the MINEM instructs ENARGAS to implement the procedure for the Comprehensive Tariff Review established in the Memorandum of Agreement for Comprehensive Contractual Renegotiations entered into with Licensees within the framework of Law No. 25,561, its amendments and complementary rules, to be executed within a maximum term of one year as from March 29, 2016. It further established the application of a provisional tariff.

(3)

Resolution No. 34/2016 passed by the MINEM, which, among other things:

•

Sets the new prices at TSEPs for natural gas supply to Compressed Natural Gas (CNG) stations, taking into effect consumption from April 1.

•

Provides that from May 1, natural gas for CNG supply stations must be acquired by distributors.

On April 4, 2016, ENARGAS Resolution No. 3726/2016 was published in the Argentine Official Gazette whereby:

•

A new tariff scheme applicable to Metrogas users was approved, effective from April 1, 2016, in line with the provisions of Resolution No. 28/2016 issued by the MINEM.

•

Additionally, new tariffs are established for residential users recording a saving in their consumption equal to or higher than fifteen percent (15%) compared to the same period of the previous year and for users registered with the registry established under ENARGAS Resolution No. I-2,905/2015 as amended by section 5 of Resolution No. 28/2016 issued by the MINEM (social tariff).

•

It orders Metrogas to:

No longer include the amounts derived from the charge imposed by Executive Decree No. 2,067/2008;

ii.

Instrument the collection of bills which are issued bi-monthly as a monthly payment obligation, establishing to such end two monthly payments, each equal to 50% of the total amount of the bi-monthly bill, with a thirty-day period between each other;

iii.

Not to make dividend distributions without previously evidencing before the ENARGAS full compliance with the Mandatory Investment Plan.

Subsequently, on June 1, 2016, the MINEM published Resolution No. 89 whereby:

•

The ENARGAS is required to elaborate a procedure modifying and supplementing the provisions of ENARGAS Resolutions No. 716/1998 and 1,410/2010, and setting forth the daily operating conditions of the Transportation and Distribution Systems.

•

It establishes the volumes the Distribution Companies may request to supply the priority demand and sets forth that if natural gas is contracted with a Producer for such purpose, the request of natural gas from such producer will be reduced under Resolution No. 1,410/2010 to the extent of the volume contracted.

Pursuant to this Resolution, on June 5, 2016 ENARGAS Resolution No. I/3833 was issued, whereby the “Supplementary Procedure for Gas Requests, Confirmations and Control” was established.

On June 7, 2016, MINEM Resolution No. 99 was issued, under which:

•

The ENARGAS, in exercise of its powers, is required to establish the necessary measures so that during 2016, the amounts before taxes of bills issued by providers of the gas distribution public service in all the territory, to be paid by Residential users (category R and its subcategories) and users of the Small General Service category with full service (subcategories P1, P2 and P3, and equivalent categories in the undiluted propane gas distribution service), for consumption made from April 1, 2016, shall not exceed by more than 400% and 500%, respectively, the final amount, before taxes, that should have been invoiced for such consumptions, if the tariffs effective as of March 31, 2016 had been applied to the same user and for the volume consumed in the new billing period.

On June 8, 2016, ENARGAS, through Resolution No. 3,843/2016, regulated these limits until December 31, 2016. According to Resolution No. 99/2016 of the MINEM, any differences arising from the final amount resulting from the application of the relevant limit and the tariff schemes applicable as of that date shall be determined during 2016 as a discount on the prices to be billed by natural gas Producers to Distribution Companies.

On July 12, 2016, the MINEM, through Resolution No. 129/2016:

•

Amended Resolution No. 99/2016 and instructed ENARGAS to take the necessary steps in order that during 2016, the aggregate amount, after taxes, of the bills issued by Gas Distribution Companies to be paid by Residential users (category R and its subcategories), Small General Service category (with full service) and equivalent categories in the undiluted propane network distribution service for consumptions made as of April 1, 2016, do not exceed by more than 400% and 500%, respectively, the final amount, after tax, of the bill issued to the same user, for the same billing period of the previous year, i.e. the amount billed should not exceed an amount equivalent to 5 or 6 times, respectively, the final amount of the bill issued to the same user for the same billing period of the previous year.

•

Instructed ENARGAS to take the necessary steps to complete, before December 31, 2016, the comprehensive Tariff Review process (referred to in Section 1 of Resolution No. 31 dated March 29, 2016). The public hearing for such Tariff Review process shall be held before October 31, 2016.

As a result of the Temporary Agreement with Natural Gas Distribution Companies and the tariff schemes issued accordingly, there has been, throughout the Argentine territory a large number of legal actions (motions for protection of constitutional rights, precautionary measures, etc.) against the tariff scheme in force. Among them is the Center of Studies for the Promotion of Equality and Solidarity (“CEPIS”) case, whereby on April 7, 2016, CEPIS (a Civil Association registered with the Provincial Registrar of Legal Persons) filed a motion for protection of constitutional rights seeking a decree of nullity of Resolutions No. 28/2016 and 31/2016 of the MINEM. The first instance court rejected the motion and ordered the Federal Government – MINEM to call a public hearing in order to validate Resolutions No. 28/2016 and 31/2016.

On July 7, 2016, and as a result of the appeals filed by the parties, Division II of the Federal Court of Appeals of La Plata determined the nullity of Resolutions No. 28/2016 and 31/2016 of the Federal Ministry of Energy and Mining, whereby the tariff regime in the whole country went back to the one in force before the issuance of both resolutions. The decision was appealed by the MINEM on July 12, 2016 to the Supreme Court, which will be in charge of deciding the issue.

Although Metrogas is not a party to the CEPIS Case and resolution dated July 7, 2016 says nothing about the tariff schemes approved by the ENARGAS, on July 27, 2016, the ENARGAS informed, through Note No. 6877 that, as a result of the decision in the CEPIS Case and until the appeal filed by the MINEM to the Supreme Court is not solved, it is not feasible to apply the ENARGAS Resolutions related to tariff increases, including, among others, Resolutions No. 3,726/2016 and 3,843/2016. Accordingly, Metrogas has estimated revenues from sales of gas and from the transportation and distribution service, as well as the costs of gas supply and transportation as of June 30, 2016, by applying the tariffs in force as of March 31, 2016.

However, Metrogas anticipates an agreement with the Argentine Government concerning the guidelines contained in the Annex to the 2016 Temporary Agreement related to the methods, time periods and timelines of the execution of the Memorandum of Agreement for Comprehensive Contractual Renegotiations, so as to facilitate the restructuring of the economic-financial standing.

In turn, in connection with ENARGAS Resolution No. 1,410/2010, approving a “Procedure for Gas Requests, Confirmations and Controls”, which had been appealed by YPF, on December 9, 2015, the ENARGAS rejected YPF’s challenge to such resolution. YPF is evaluating the course of action that it will follow.

Natural Gas New Projects Stimulus Program

On May 18, 2016, MINEM Resolution No. 74/2016 created the “Natural Gas New Projects Stimulus Program” in order to foster natural gas production for those companies submitting new natural gas projects, provided they are not beneficiaries of the “Natural Gas Additional Injection Stimulus Program” or the “Natural Gas Injection Stimulus for Companies with Reduced Injection”, respectively created by Resolutions No. 1/2013 and 60/2013 of the former Strategic Planning and Coordination Commission of the Hydrocarbon Investments Nation Plan.

The submission of new projects, which must be approved by the Hydrocarbon Resources Secretariat, may obtain a stimulus price of 7.50 US$/MMBTU.

The “Natural Gas Injection Stimulus for Companies without Injection”, created by Resolution No. 185/2015 of the former Strategic Planning and Coordination Commission of the Hydrocarbon Investments Nation Plan has been abolished, but any projects submitted under such program which are pending approval must be evaluated under the “Natural Gas New Projects Program”.

The “Natural Gas New Projects Program” shall be effective as from the publication of the relevant resolution in the Official Gazette (May 18, 2016) until December 31, 2018.

Following this Resolution, no new projects may be submitted under the natural gas production incentive Program known as “Gas Plus”, created by Resolution No. 24/2008 of the former ex-Energy Secretariat of the ex-Ministry of Federal Planning, Public Investment and Services, as amended. Notwithstanding the foregoing, any projects approved under said Program shall remain in full force according to the terms of their respective approvals.

The requirements to be fulfilled by gas to be involved in a new natural gas project are the following: a) it must come from an exploitation concession granted as a result of a discovery reported after the effective date of Resolution No. 1/2013 of the former Strategic Planning and Coordination Commission of the Hydrocarbon Investments Nation Plan; or b) come from an exploitation concession of areas classified as “Tight Gas” or “Shale Gas”, or c) belong to companies without natural gas injection registers which acquire an interest in areas belonging to companies registered in the “Natural Gas Additional Injection Stimulus Program” or the “Natural Gas Injection Stimulus for Companies with Reduced Injection”, respectively created by Resolutions No. 1/2013 and 60/2013 of the former Strategic Planning and Coordination Commission of the Hydrocarbon Investments Nation Plan, but which, during the period in which the selling company shall have calculated its Basic Injection, the Total Injection coming from the areas in question shall have been null, including the acquisition of entire areas.

On May 20, 2016, Executive Order No. 704/2016 was issued, which converted into pesos the debt under the Natural Gas Additional Injection Stimulus Program, the Natural Gas Injection Stimulus for Companies with Reduced Injection and those derived from the Agreement for the Supply of Propane Gas for Undiluted Propane Gas Distribution Networks, taking into account the closing rate of exchange for each period, and Argentine Government Bonds denominated in US dollars will be delivered at an 8% interest rate with maturity in 2020 (“BONAR 2020 US$”) for the cancellation thereof.

In order to request the cancellation of outstanding payments, beneficiaries must subscribe and file to the Hydrocarbon Resources Secretariat of the MINEM the letters of accession. YPF has filed the letters of accession and has reserved the right to claim the exchange differences and interest.

On July 13, 2016, the Company has received, under the Natural Gas Additional Injection Stimulus Program, BONAR 2020 US$, for a face value of US$ 630 million.

•

Regulatory framework for the electric power industry:

•

Law No. 27,191, amending Law No. 26,190 on Argentina’s Scheme for Promotion of Use of Energy Renewable Sources intended for Electricity Production, binds Large Users to incorporate at least 8% of energy from renewable sources into their electric power usage by December 31, 2017.

•

Federal Executive Order No. 531/2016 (Regulations of Law No. 27,191), dated March 31, 2016. Among other things, this Executive Order establishes that before December 31, 2017, users shall provide evidence of subscription of self and joint generation contracts or projects. Upon revision of compliance with the purposes of the Law, if energy shortage is found, a penalty shall be imposed, but no further details are provided.

•

Resolution No. 22/2016 issued by the Energy Secretariat, dated March 30, 2016. Pursuant to this Resolution, the Energy Secretariat amended SE Resolution No. 482/2015 and adjusted tariff components collected by generators who have adhered to SE Resolutions Nos. 95/2013, 529/14 and 482/2015. The resolution modifies remunerative components of financial transactions retroactively to February 2016.

•

MINEM Resolution No. 41/2016 issued on April 13, 2016. It sets the new prices at the entry points to the natural gas transportation system for each basin of origin, which prices will be applied to natural gas acquisitions made to be used for the generation of electricity to be sold in the Wholesale Electricity Market (“MEM”) or, generally, to be supplied to the electricity distribution public service.

•

Resolution No. 21/2016 issued by the Energy Secretariat published on March 22, 2016. This resolution calls generators, self-generators and joint generators interested in bidding on a new capacity of thermal power generation and associated electricity production, undertaking to be available in the Wholesale Electricity Market during summer (2016/2017 and 2017/2018) and winter 2017.

•

MINEM Resolution No. 71/2016, dated May 18, 2016. This resolution provides for the commencement of the open competitive bidding process for contracting, in the MEM, electric energy from renewable generation sources in order to achieve the contribution goals from renewable energy sources scheduled by December 31, 2017, in Sections 2 of Law No. 26,190 and 8 of Law No. 27,191 (“Programa Renovar (Ronda 1)”) (Renewal Program (Round 1))

•

SEE Resolution No. 155/2016 dated June 15, 2016. This Resolution informs the first projects awarded under the call for bids set forth by SEE Resolution No. 21/2016, including, among others, Thermal Power Plant El Bracho (Province of Tucumán) awarded to Y-GEN II, in which YPF Energía Eléctrica S.A. has a 66.67% interest. See Note 3.

•

SEE Note 355/2016, dated June 28, 2016, gives bidders who have exceeded the technical offers the opportunity to improve their financial offers in order to be again taken into consideration in the award of the call for bids set forth in SEE Resolution No. 21/2016.

•

SEE Resolution No.216/2016 dated July 15, 2016 informs the new projects awarded under the call for bids set forth by SEE Resolution No. 21/2016, including, among others, Thermal Power Plant Loma Campana (Province of Neuquén) awarded to Y-GEN I, in which YPF Energía Eléctrica S.A. has a 66.67% interest. See Note 3.

13.

BALANCES AND TRANSACTIONS WITH RELATED PARTIES

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

The information detailed in the tables below shows the balances with associates and joint ventures as of June 30, 2016 and December 31, 2015 and transactions with the mentioned parties for the six-month periods ended June 30, 2016 and 2015.


	June 30, 2016						December 31, 2015
	Other receivables		Trade receivables		Accounts payable		Other receivables		Trade receivables		Accounts payable
	Current		Current		Current		Current		Current		Current
Joint ventures:
Profertil S.A.		104		99		69		110		209		35
Compañía Mega S.A.		11		570		55		12		481		381
Refinería del Norte S.A.		—		225		24		—		125		11
Bizoy S.A.		4		—		—		4		—		—

		119		894		148		126		815		427

Associates:
Central Dock Sud S.A.		—		330		—		—		194		—
YPF Gas S.A. ⁽¹⁾		26		377		43		33		98		44
Oleoductos del Valle S.A.		—		—		71		—		—		56
Terminales Marítimas Patagónicas S.A.		—		—		42		—		—		44
Oleoducto Trasandino (Argentina) S.A.		—		—		2		—		—		2
Oleoducto Trasandino (Chile) S.A.		2		—		—		1		—		—
Gasoducto del Pacífico (Argentina) S.A.		4		—		26		4		—		27
Oiltanking Ebytem S.A.		—		—		61		—		—		45

		32		707		245		38		292		218

		151		1,601		393		164		1,107		645


	For the six-month period ended on June 30,
	2016				2015
	Revenues		Purchases and services		Revenues		Purchases and services
Joint ventures:
Profertil S.A.		480		199		471		105
Compañía Mega S.A.		1,096		182		714		97
Refinería del Norte S.A.		566		71		395		75

		2,142		452		1,580		277

Associates:
Central Dock Sud S.A.		413		—		207		—
YPF Gas S.A.⁽¹⁾		332		19		59		5
Oleoductos del Valle S.A.		—		187		—		99
Terminales Marítimas Patagónicas S.A.		—		157		—		94
Oleoducto Trasandino (Argentina) S.A.		—		10		—		10
Gasoducto del Pacífico (Argentina) S.A.		—		79		—		50
Oiltanking Ebytem S.A.		—		181		—		88

		745		633		266		346

		2,887		1,085		1,846		623

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

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

•

CAMMESA: the provision of fuel oil, which is destined to thermal power plants, and the revenues and purchases of energy (the operations of sale and purchase for the six-month period ended on June 30, 2016 amounted to 10,570 and 979, respectively, and on June 30, 2015 amounted to 5,952 and 643, respectively, while the net balance as of June 30, 2016 and December 31, 2015 was a trade receivable of 3,223 and 1,960, respectively);

•

ENARSA: rendering of services in the regasification projects of liquefied natural gas in Bahía Blanca and Escobar and the purchase of natural gas and crude oil (the operations for the six-month period

ended on June 30, 2016, amounted to 1,188 and 871, respectively, and on June 30, 2015 amounted to 807 and 364, respectively, while the net balance as of June 30, 2016 and December 31, 2015 was a trade payable of 343 and 135, respectively);

•

Aerolíneas Argentinas S.A. and Austral Líneas Aéreas Cielos del Sur S.A.: the provision of jet fuel (the operations for the six-month periods ended on June 30, 2016 and 2015, amounted to 1,273 and 1,055, respectively, while the net balance as of June 30, 2016 and December 31, 2015 was a trade receivable of 364 and 255, respectively);

•

Ministry of Energy and Mining: the benefits of the incentive scheme for the Additional Injection of natural gas (the operations for the six-month periods ended on June 30, 2016 and 2015, amounted to 9,568 and 5,641, respectively, while the net balance as of June 30, 2016 and December 31, 2015 was a trade receivable of 19,441 and 9,859, respectively; however see Note 12.d)) and for the crude oil production incentive program (the net balance as of June 30, 2016 and December 31, 2015 was a trade receivable of 2,035 and 1,988, respectively, while no other transaction existed for the six-month periods ended on June 30, 2016, while the operations for the six-month periods ended on June 30, 2015 amounted to 612); and the temporary economic assistance to Metrogas (the net balance as of June 30, 2016 and December 31, 2015 was a trade receivable of 149; while no other transaction existed for the six-month periods ended on June 30, 2016, while the operations for the six-month periods ended on June 30, 2015 amounted to 356);

•

Ministry of Transport: the compensation for providing gas oil to the public transport of passengers at a differential price (the operations for the six-month periods ended on June 30, 2016 and 2015, amounted to 2,568 and 1,691, respectively, while the net balance as of June 30, 2016 and December 31, 2015 was a trade receivable of 935 and 412, respectively);

•

Industry Secretariat: incentive for domestic manufacturing of capital goods, for the benefit of A-Evangelista S.A. (the operations for the six-month period ended on June 30, 2016 amounted to 228 and 264, respectively, while the net balance as of June 30, 2016 and December 31, 2015 was a trade receivable of 194 and 27, respectively).

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

Additionally, the Group has entered into certain financing and insurance transactions with entities related to the national public sector, as defined in IAS 24. Such transactions consist of certain financial transactions that are described in Note 7.j) of these condensed interim consolidated financial statements, and transactions with Nación Seguros S.A. related to certain insurance policies contracts, and in connection therewith, to the reimbursement from the insurance coverage for the incident mentioned in Note 11.b) to the annual consolidated financial statements and in Note 12.b) of these condensed interim consolidated financial statements.

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 11.c) to the annual consolidated financial statements and Note 12.c) of these condensed interim consolidated financial statements.

The table below discloses the compensation for the Company’s key management personnel, including members of the Board of Directors and vice president managers with executive functions appointed by the Board of Directors, for the six-month periods ended June 30, 2016 and 2015:


	2016⁽¹⁾		2015⁽¹⁾
Short-term employee benefits⁽²⁾		83		73
Share-based benefits		9		26
Post-retirement benefits		4		2
Termination benefits		61		—

		157		101

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

(2)	Do not include Social Security contributions for 21 and 16 for the six-month periods ended on June 30, 2016 and 2015, respectively.

14.

EMPLOYEE BENEFIT PLANS AND OTHER OBLIGATIONS

Note 1.b.10 to the annual consolidated financial statements describes the main characteristics and accounting treatment for benefit plans implemented by the Group. The charges recognized during the six-month periods ended on June 30, 2016 and 2015 are as follows:

Retirement plan:

The total charges recognized under the Retirement Plan amounted to approximately 42 and 35 for the six-month periods ended on June 30, 2016 and 2015, respectively.

ii.

Performance Bonus Programs and Performance evaluation:

The amount charged to expenses related to the Performance Bonus Programs was 604 and 463 for the six-month periods ended on June 30, 2016 and 2015, respectively.

iii.

Share-based benefit plan:

The amounts recognized in net income in relation with the Share-based Plans, which are disclosed according to their nature, amounted to 57 and 53 for the six-month periods ended on June 30, 2016 and 2015, respectively.

During the six-month periods ended June 30, 2016 and 2015, the Company has repurchased 171,330 and 154,514 treasury shares for an amount of 55 and 45, respectively, in order to comply with the share-based plans described in Note 1.b.10.iii) to the annual consolidated financial statements. The cost of such repurchases is reflected in the shareholders’ equity under the name of “Treasury shares acquisition cost”, while the face value and the adjustment resulting from the monetary restatement carried out in accordance with the Previous Accounting Principles have been reclassified from the accounts “Subscribed Capital” and “Capital Adjustment” to the accounts “Treasury shares” and “Treasury shares comprehensive adjustment” respectively.

15.

INFORMATION REQUIRED BY REGULATORY AUTHORITIES

a)	CNV General Resolution No. 622

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


Exhibit A – Fixed Assets		Note 7.b) Property, plant and equipment
Exhibit B – Intangible assets		Note 7.a) Intangible assets
Exhibit C – Investments in companies		Note 7.c) Investments in associates and joint ventures
Exhibit D – Other investments		Note 6 Financial instruments by category
Exhibit E – Provisions		Note 7.f) Trade receivables Note 7.e) Other receivables Note 7.c) Investments in associates and joint ventures Note 7.b) Property, plant and equipment Note 7.h) Provisions
Exhibit F – Cost of goods sold and services rendered		Note 7.m) Costs
Exhibit G – Assets and liabilities in foreign currency		Note 16 Assets and liabilities in currencies other than the Argentine peso

ii.

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

Besides, in accordance with the provisions of Section VI, Chapter II, Title VII of the CNV Rules and its Interpretative Criterion No. 55, the Company’s equity exceeds the minimum required equity under such rules, which is 15, while the minimum required counterparty capital, which is 3, is comprised of checking accounts in Pesos No. 52326/6/999/5 at Banco Galicia and No. 001-025890/7 at Banco Credicoop for 3 and 2, respectively, corresponding to the Company as of June 30, 2016.

b)	CNV General Resolution No. 629

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

•

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

•

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

Besides, it is also 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.

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


	June 30, 2016						December 31, 2015
	Amount in currencies other than the Argentine peso		Exchange rate⁽¹⁾		Total		Amount in currencies other than the Argentine peso		Exchange rate⁽¹⁾		Total
Noncurrent Assets
Other receivables
US Dollar		32		14.80		474		46		12.94		595
Real		10		4.65		47		10		3.31		33

Total noncurrent assets						521						628

Current Assets
Trade receivables
US Dollar		315		14.80		4,662		307		12.94		3,973
Chilean peso		11,687		0.02		234		16,971		0.02		339
Real		27		4.65		126		15		3.31		50
Other receivables
US Dollar		261		14.80		3,863		407		12.94		5,267
Euro		2		15.50		31		6		14.07		84
Real		7		4.65		33		7		3.31		23
Chilean peso		20		0.02		—		27		0.02		1
Yens		101		0.14		14		119		0.11		13
Cash and equivalents
US Dollar		785		14.80		11,618		1,009		12.94		13,056
Chilean peso		395		0.02		8		502		0.02		10
Real		1		4.65		5		4		3.31		13

Total current assets						20,594						22,829

Total assets						21,115						23,457

Noncurrent Liabilities
Provisions
US Dollar		2,534		15.20		38,517		2,774		13.04		36,173
Loans
US Dollar		5,450		15.20		82,834		4,403		13.04		57,417
Real		1		4.69		5		4		3.35		13
Accounts payable
US Dollar		33		15.20		502		37		13.04		482

Total noncurrent liabilities						121,858						94,085

Current Liabilities
Provisions
US Dollar		35		15.20		532		80		13.04		1,043
Taxes payable
Real		5		4.65		23		6		3.31		20
Chilean peso		916		0.02		18		1,077		0.02		22
Salaries and social security
US Dollar		6		15.20		91		7		13.04		91
Real		1		4.69		5		2		3.35		7
Chilean peso		433		0.02		9		423		0.02		8
Loans
US Dollar		1,525		15.20		23,175		1,543		13.04		20,121
Real		48		4.69		226		35		3.35		117
Accounts payable
US Dollar		1,627		15.20		24,730		1,877		13.04		24,476
Euro		24		17.50		420		26		14.21		369
Chilean peso		1,765		0.02		35		1,283		0.02		26
Real		14		4.69		66		14		3.35		47
Yens		2		0.15		—		29		0.11		3

Total current liabilities						49,330						46,350

Total liabilities						171,188						140,435

(1)	Exchange rate in pesos as of June 30, 2016 and December 31, 2015 according to Banco Nación Argentina.

17. SUBSEQUENT EVENTS

In July 2016, the Company issued Series L Negotiable Obligations in an amount of 11,248. Series L Negotiable Obligations shall accrue interest at a variable rate (BADLAR plus 4%) with a principal amount maturing in 2020.

As of the date of issuance of these condensed interim consolidated financial statements, there are no other significant subsequent events that require adjustments or disclosure in the condensed interim consolidated financial statements of the Group as of June 30, 2016 which were not already considered in such consolidated financial statements according to IFRS.

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.