Edgar Filing: YPF SOCIEDAD ANONIMA

YPF Sociedad Anónima

Date: May 17, 2017

/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 May, 2017

Commission File Number: 001-12102

YPF Sociedad Anónima

(Exact name of registrant as specified in its charter)

Macacha Güemes 515

C1106BKK Buenos Aires, Argentina

(Address of principal executive office)

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

Form 20-F ☒ Form 40-F ☐

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

Yes ☐ No ☒

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

Yes ☐ No ☒

YPF Sociedád Anonima

TABLE OF CONTENTS

ITEM

1 Translation of Condensed Interim Consolidated Financial Statements as of March 31, 2017 and Comparative Information.

LOGO

YPF SOCIEDAD ANONIMA

CONDENSED INTERIM CONSOLIDATED

FINANCIAL STATEMENTS AS OF MARCH 31, 2017

AND COMPARATIVE INFORMATION

English translation of the financial statements originally filed in Spanish with the Argentine Securities Commission (“CNV”).

In case of discrepancy, the financial statements filed with the CNV prevail over this translation

YPF SOCIEDAD ANONIMA

CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF MARCH 31, 2017 AND COMPARATIVE INFORMATION

CONTENT


Note	Description	Page
	Glossary of terms		1

	Legal Information		2

	Condensed interim consolidated statements of financial position		3

	Condensed interim consolidated statements of comprehensive income		4

	Condensed interim consolidated statements of changes in shareholders’ equity		5

	Condensed interim consolidated statements of cash flow		7

	Notes to the condensed interim consolidated financial statements:

1	General information, structure and organization of the business of the Group		8

2	Basis of preparation of the condensed interim consolidated financial statements		9

3	Seasonality of operations		10

4	Acquisitions and dispositions		10

5	Financial risk management		11

6	Segment information		11

7	Financial instruments by category		14

8	Intangible assets		15

9	Property, plant and equipment		16

10	Investments in associates and joint ventures		17

11	Inventories		21

12	Other receivables		21

13	Trade receivables		21

14	Cash and cash equivalents		21

15	Provisions		22

16	Income Tax		23

17	Loans		24

18	Other liabilities		26

19	Accounts payable		26

20	Revenues		26

21	Costs		26

22	Expenses by nature		27

23	Other operating results, net		28

24	Financial results, net		28

25	Investments in joint operations		28

26	Shareholders’ equity		29

27	Earnings per share		29

28	Deconsolidation of Maxus Entities		30

29	Contingent assets and liabilities		30

30	Contractual commitments		31

31	Main regulations and others		32

32	Balances and transactions with related parties		35

33	Employee benefit plans and share-based payments		38

34	Assets and liabilities in currencies other than the Argentine peso		39

35	Subsequent events		40

English translation of the financial statements originally filed in Spanish with the Argentine Securities Commission (“CNV”).

In case of discrepancy, the financial statements filed with the CNV prevail over this translation

YPF SOCIEDAD ANONIMA

CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF MARCH 31, 2017 AND COMPARATIVE INFORMATION

GLOSSARY OF TERMS


Term		Definition
AESA		Subsidiary A-Evangelista S.A.
Annual consolidated financial statements		Consolidated financial statements as of December 31, 2016
Associate		Company over which YPF has significant influence as provided for in IAS 28
BONAR		Argentine public bonds
CDS		Associate Central Dock Sud S.A.
CGU		Cash-Generating Units
CIMSA		Subsidiary Compañía de Inversiones Mineras S.A.
CNV		Argentine Securities Commission
Condensed interim consolidated financial statements		Condensed interim consolidated financial statements as of March 31, 2017
Eleran		Subsidiary Eleran Inversiones 2011 S.A.U.
ENARGAS		Argentine National Gas Regulatory Authority
FACPCE		Argentine Federation of Professional Councils in Economic Sciences
Group		YPF and its subsidiaries
IAS		International Accounting Standard
IASB		International Accounting Standards Board
IFRS		International Financial Reporting Standard
IDS		Associate Inversora Dock Sud S.A.
Joint venture		Company jointly owned by YPF as provided for in IAS 28
JO		Joint operation
LGS		Argentine General Corporations Law No. 19,550 (T.O. 1984), as amended
MEGA		Joint venture Compañía Mega S.A.
Metroenergía		Subsidiary Metroenergía S.A.
Metrogas		Subsidiary Metrogas S.A.
MINEM		Ministry of Energy and Mining
MMBtu		Million British thermal units
Oldelval		Associate Oleoductos del Valle S.A.
OPESSA		Subsidiary Operadora de Estaciones de Servicios S.A.
OTA		Associate Oleoducto Trasandino (Argentina) S.A.
OTC		Associate Oleoducto Trasandino (Chile) S.A.
Profertil		Joint Venture Profertil S.A.
Refinor		Joint Venture Refinería del Norte S.A.
SEC		U.S. Securities and Exchange Commission
Subsidiary		Company controlled by YPF in accordance with the provisions of IFRS 10
Termap		Associate Terminales Marítimas Patagónicas S.A.
US$		U.S. dollar
US$/Bbl		U.S. dollar per barrel
Y-GEN I		Joint venture Y-GEN Eléctrica S.R.L.
Y-GEN II		Joint venture Y-GEN Eléctrica II S.R.L.
YPF Brasil		Subsidiary YPF Brasil Comércio Derivado de Petróleo Ltda.
YPF Chile		Subsidiary YPF Chile S.A.
YPF EE		Subsidiary YPF Energía Eléctrica S.A.
YPF Gas		Associate YPF Gas S.A.
YPF Holdings		Subsidiary YPF Holdings, Inc.
YPF International		Subsidiary YPF International S.A.
YPF or the Company		YPF Sociedad Anónima
YPF SP		Subsidiary YPF Servicios Petroleros S.A.
YTEC		Subsidiary YPF Tecnología S.A.

English translation of the financial statements originally filed in Spanish with the Argentine Securities Commission (“CNV”).

In case of discrepancy, the financial statements filed with the CNV prevail over this translation

YPF SOCIEDAD ANONIMA

CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF MARCH 31, 2017 AND COMPARATIVE INFORMATION

LEGAL INFORMATION

Legal address

Macacha Güemes 515 – Ciudad Autónoma de Buenos Aires, Argentina

Fiscal year number 41

Beginning on January 1, 2017

Principal business of the Company:

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

Filing with the Public Registry

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

Duration of the Company

Through June 15, 2093.

Last amendment to the Bylaws

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

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

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

Subscribed, paid-in and authorized for stock exchange listing

3,933,127,930

MIGUEL ANGEL GUTIERREZ

President

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

YPF SOCIEDAD ANONIMA

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

AS OF MARCH 31, 2017 AND DECEMBER 31, 2016

(Amounts expressed in millions of Argentine Pesos)


	Notes		March 31, 2017		December 31, 2016
ASSETS
Noncurrent Assets
Intangible assets		8		8,045		8,114
Property, plant and equipment		9		297,613		308,014
Investments in associates and joint ventures		10		5,591		5,488
Deferred income tax assets, net		16		362		564
Other receivables		12		1,887		3,909
Trade receivables		13		128		87
Investment in financial assets		7		7,315		7,737

Total noncurrent assets				320,941		333,913

Current Assets
Inventories		11		21,032		21,820
Other receivables		12		10,161		13,456
Trade receivables		13		31,919		33,645
Investment in financial assets		7		7,532		7,548
Cash and cash equivalents		14		11,424		10,757

Total current assets				82,068		87,226

TOTAL ASSETS				403,009		421,139

SHAREHOLDERS’ EQUITY
Shareholders’ contributions				10,429		10,403
Reserves, other comprehensive income and retained earnings				104,734		108,352

Shareholders’ equity attributable to shareholders of the parent company				115,163		118,755

Non-controlling interest				73		(94	)

TOTAL SHAREHOLDERS’ EQUITY				115,236		118,661

LIABILITIES
Noncurrent Liabilities
Provisions		15		50,317		47,358
Deferred income tax liabilities, net		16		39,360		42,465
Taxes payable				262		98
Loans		17		123,532		127,568
Other liabilities		18		319		336
Accounts payable		19		1,747		2,187

Total noncurrent liabilities				215,537		220,012

Current Liabilities
Provisions		15		1,772		1,994
Income tax liability				213		176
Taxes payable				6,391		4,440
Salaries and social security				2,440		3,094
Loans		17		22,756		26,777
Other liabilities		18		466		4,390
Accounts payable		19		38,198		41,595

Total current liabilities				72,236		82,466

TOTAL LIABILITIES				287,773		302,478

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY				403,009		421,139

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

MIGUEL ANGEL GUTIERREZ

President

YPF SOCIEDAD ANONIMA

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

FOR THE THREE-MONTH PERIODS ENDED MARCH 31, 2017 AND 2016

(Amounts expressed in millions of Argentine Pesos)


			For the three-month periods ended March 31,
	Notes		2017			2016
Revenues		20		57,003			46,934
Cost		21		(45,798	)		(40,131	)

Gross profit				11,205			6,803

Selling expenses		22		(3,887	)		(3,045	)
Administrative expenses		22		(1,790	)		(1,486	)
Exploration expenses		22		(593	)		(454	)
Other operating results, net		23		(424	)		(200	)

Operating income				4,511			1,618

Income from equity interests in associates and joint ventures		10		22			97
Financial income		24		1,612			9,121
Financial loss		24		(8,848	)		(5,480	)
Other financial results		24		75			377

Financial results, net		24		(7,161	)		4,018

Net (loss) income before income tax				(2,628	)		5,733

Income tax		16		2,820			(4,878	)

Net income for the period				192			855

Net income for the period attributable to:
- Shareholders of the parent company				25			996
- Non-controlling interest				167			(141	)
Earnings per share attributable to shareholders of the parent company basic and diluted		27		0.06			2.54
Other comprehensive income
Translation differences from investments in subsidiaries, associates and joint ventures⁽¹⁾				159			(535	)
Translation differences from YPF ⁽²⁾				(3,802	)		15,942

Total other comprehensive income for the period⁽³⁾				(3,643	)		15,407

Total comprehensive income for the period				(3,451	)		16,262

(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

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

FOR THE THREE-MONTH PERIODS ENDED MARCH 31, 2017 AND 2016

(Amounts expressed in millions of Argentine Pesos)


	For the three-month period ended March 31, 2017
	Shareholders’ contributions
	Subscribed capital		Adjustment to contributions		Treasury shares		Adjustment to treasury shares		Share-based benefit plans			Acquisition cost of treasury shares			Share trading premium			Issuance premiums		Total
Balances at the beginning of the fiscal year		3,923		6,085		10		16		61			(152	)		(180	)		640		10,403
Accrual of share-based benefit plans⁽³⁾		—		—		—		—		26			—			—			—		26
Settlement of share-based benefit plans ⁽²⁾		—		—		—		—		(1	)		1			—			—		—
Other comprehensive income		—		—		—		—		—			—			—			—		—
Net income		—		—		—		—		—			—			—			—		—

Balances at the end of the period		3,923		6,085		10		16		86			(151	)		(180	)		640		10,429


	For the three-month period ended March 31, 2017
	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
Balances at the beginning of the fiscal year		2,007		5		24,904		490		3,648		105,529			(28,231	)		118,755			(94	)		118,661
Accrual of share-based benefit plans ⁽²⁾		—		—		—		—		—		—			—			26			—			26
Settlement of share-based benefit plans		—		—		—		—		—		—			—			—			—			—
Other comprehensive income		—		—		—		—		—		(3,643	)		—			(3,643	)		—			(3,643	)
Net income		—		—		—		—		—		—			25			25			167			192

Balances at the end of the period		2,007		5		24,904		490		3,648		101,886	⁽¹⁾		(28,206	)		115,163			73			115,236

(1)

Includes 105,532 corresponding to the effect of the translation of the financial statements of YPF S.A. and (3,646) corresponding to the effect of the translation of the financial statements of investments in subsidiaries, associates and joint ventures with functional currencies other than the U.S. dollar, as detailed in Note 2.b.1. to the annual consolidated financial statements.

(2)	Net of employees’ income tax withholding related to the share-based benefit plans.

(3)	See Note 33.

MIGUEL ANGEL GUTIERREZ

President

YPF SOCIEDAD ANONIMA

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

FOR THE THREE-MONTH PERIODS ENDED MARCH 31, 2017 AND 2016 (Cont.)

(Amounts expressed in millions of Argentine Pesos)


	For the three-month period ended March 31, 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
Balances at the beginning of the fiscal year		3,922		6,083		11		18		67		(277	)		(115	)		640		10,349
Accrual of share-based benefit plans⁽²⁾		—		—		—		—		40		—			—			—		40
Other comprehensive income		—		—		—		—		—		—			—			—		—
Net income		—		—		—		—		—		—			—			—		—

Balances at the end of the period		3,922		6,083		11		18		107		(277	)		(115	)		640		10,389


	For the three-month period ended March 31, 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
Balances at the beginning of the fiscal year		2,007		5		21,264		440		3,648		78,115			4,585		120,413		48			120,461
Accrual of share-based benefit plans⁽²⁾		—		—		—		—		—		—			—		40		—			40
Other comprehensive income		—		—		—		—		—		15,407			—		15,407		—			15,407
Net income		—		—		—		—		—		—			996		996		(141	)		855

Balances at the end of the period		2,007		5		21,264		440		3,648		93,522	⁽¹⁾		5,581		136,856		(93	)		136,763

(1)

Includes 96,924 corresponding to the effect of the translation of the financial statements of YPF and (3,402) corresponding to the effect of the translation of the financial statements of investments in subsidiaries, associates and joint ventures with functional currencies other than the U.S. dollar, as detailed in Note 2.b.1. to the annual consolidated financial statements.

(2)	See Note 33.

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

MIGUEL ANGEL GUTIERREZ

President

YPF SOCIEDAD ANONIMA

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOW

FOR THE THREE-MONTH PERIODS ENDED MARCH 31, 2017 AND 2016

(Amounts expressed in millions of Argentine Pesos)


	For the three-month periods ended March 31,
	2017			2016
Cash flows from operating activities
Net income		192			855
Adjustments to reconcile net income to cash flows provided by operating activities:
Income from equity interest in associates and joint ventures		(22	)		(97	)
Depreciation of property, plant and equipment		11,764			10,534
Amortization of intangible assets		181			153
Consumption of materials and retirement of property, plant and equipment and intangible assets		869			1,183
Charge on income tax		(2,820	)		4,878
Net increase in provisions		1,671			1,092
Exchange differences, interest and other ⁽¹⁾		6,369			(4,666	)
Share-based benefit plan		26			40
Changes in assets and liabilities:
Trade receivables		1,894			(7,966	)
Other receivables		3,175			4,518
Inventories		111			1,089
Accounts payable		1,145			778
Taxes payables		2,119			(760	)
Salaries and social security		(651	)		(419	)
Other liabilities		(950	)		100
Decrease in provisions due to payment/use		(273	)		(354	)
Dividends received		95			—
Proceeds from collection of lost profit insurance		—			607
Income tax payments		(245	)		(740	)

Net cash flows provided by operating activities		24,650			10,825

Investing activities:⁽²⁾
Acquisition of property, plant and equipment and intangible assets		(14,574	)		(17,303	)
Contributions and acquisitions of interests in associates and joint ventures		(272	)		—
Investments in financial assets		(3	)		(13	)
Proceeds from collection of damaged property’s insurance		—			355
Interests received from financial assets		8			—

Net cash flows used in investing activities		(14,841	)		(16,961	)

Financing activities:⁽²⁾
Payments of loans		(8,393	)		(17,179	)
Payments of interest		(5,369	)		(3,515	)
Proceeds from loans		4,769			36,603
Contributions of non-controlling interests		—			50

Net cash flows (used in) provided by financing activities		(8,993	)		15,959

Translation differences provided by cash and cash equivalents		(149	)		953

Net increase in cash and cash equivalents		667			10,776

Cash and cash equivalents at the beginning of year		10,757			15,387
Cash and cash equivalents at the end of period		11,424			26,163

Net increase in cash and cash equivalents		667			10,776

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

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


	For the three-month periods ended March 31,
	2017		2016
Acquisition of property, plant and equipment and concession extension easements not paid		4,204		4,482
Capital contributions in joint ventures		10		—

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

MIGUEL ANGEL GUTIERREZ

President

YPF SOCIEDAD ANONIMA

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF MARCH 31, 2017 AND COMPARATIVE INFORMATION

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

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

General information

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

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

Structure and organization of the economic group

The following chart shows the organizational structure, including the main companies of the Group, as of March 31, 2017:

LOGO

(1)	Held directly and indirectly.

YPF SOCIEDAD ANONIMA

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF MARCH 31, 2017 AND COMPARATIVE INFORMATION

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

Organization of the business

As of March 31, 2017, the Group carries out its transactions and operations in accordance with the following structure:

•

Upstream;

•

Gas and Power;

•

Downstream;

•

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

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

Almost all operations, properties and clients are located in Argentina. However, the Group holds equity interests in one exploratory area in Chile. The Group also sells lubricants and derivatives in Brazil and Chile.

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

2.a) Basis of preparation

The condensed interim consolidated financial statements of YPF and its subsidiaries for the three-month period ended March 31, 2017, are presented in accordance with IAS 34 “Interim Financial Reporting”. The adoption of the IFRS, as issued by the IASB, was determined by the Technical Resolution No. 26 (ordered text) issued by FACPCE and CNV regulations.

Also, some additional information required by the LGS and/or regulations of the CNV was included. Such information is contained in the Notes to these 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, 2016 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 May 9, 2017.

These condensed interim consolidated financial statements corresponding to the three-month period ended on March 31, 2017 are unaudited. The Company’s Management believes they have included all necessary adjustments to reasonably present the results of each period on a basis consistent with the annual consolidated financial statements. Income for the three-month period ended on March 31, 2017 does not necessarily reflect the proportion of the Group’s full-year income.

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

Functional and reporting currency

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

YPF SOCIEDAD ANONIMA

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF MARCH 31, 2017 AND COMPARATIVE INFORMATION

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

2.c) Accounting Estimates and Judgments

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

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

2.d) Comparative information

Amounts and other information corresponding to the year ended on December 31, 2016 and to the three-month period ended on March 31, 2016 are an integral part of these condensed interim consolidated financial statements and are intended to be read only in relation to these financial statements.

3. SEASONALITY OF OPERATIONS

Historically, the Group’s results have been subject to seasonal fluctuations 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 for 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” (see Note 30.h) to the annual consolidated financial statements), gas producing companies were invited to file with the MINEM before June 30, 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 the 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.

4. ACQUISITIONS AND DISPOSITIONS

During the three-month period ended March 31, 2017, there have been no significant acquisitions or dispositions.

YPF SOCIEDAD ANONIMA

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF MARCH 31, 2017 AND COMPARATIVE INFORMATION

5. FINANCIAL RISK MANAGEMENT

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 and liquidity 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 significant changes in the risk management or risk management policies applied by the Group since the last year end. See Note 4 to the annual consolidated financial statements.

6. SEGMENT INFORMATION

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

Upstream

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

It obtains its revenues from (i) the sale of produced oil to the Downstream segment and, marginally, from its sale to third parties; and (ii) the sale of produced gas to the Gas and Power segment, which includes the receipt of incentives from the Natural Gas Additional Injection Stimulus Program.

Gas and Power

On March 15, 2016, the Gas and Power Executive Vice-presidency was created, and during the previous fiscal year, the complete scope of management of this new business unit was determined.

The Gas and Power segment obtains its income from the development of activities related to: (i) the natural gas commercialization to third parties and the Downstream segment, (ii) the commercial and technical operation of LNG regasification terminals in Bahía Blanca and Escobar, by hiring two regasification vessels, (iii) the natural gas distribution, and (iv) the generation of conventional and renewable electricity,

In addition to the proceeds derived from the sale of natural gas to third parties and the intersegment, which is then recognized as a “purchase” to the Upstream segment, Gas and Power accrues a fee in its favor with the Upstream segment to carry out such commercialization.

The Gas and Power Executive Vice-presidency assumed, as of 2017, all responsibility for the administration and management of collections related to the Natural Gas Additional Injection Stimulus Program, and therefore began to record revenues derived from sales in the segment, to later be transferred to the Upstream segment as an intersegment operation.

YPF SOCIEDAD ANONIMA

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF MARCH 31, 2017 AND COMPARATIVE INFORMATION

6. SEGMENT INFORMATION (Cont.)

Downstream

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

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

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

Central Administration and Others

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

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

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

As required by IFRS 8, comparative information has been given retroactive effect by the creation of the new segment.

YPF SOCIEDAD ANONIMA

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF MARCH 31, 2017 AND COMPARATIVE INFORMATION

6. SEGMENT INFORMATION (Cont.)


	Upstream		Gas and Power		Downstream			Central Administration and Others			Consolidation Adjustments⁽¹⁾			Total
For the three-month period ended March 31, 2017
Revenues from sales		155		12,755		43,978			714			(599	)		57,003
Revenues from intersegment sales		27,622		990		202			1,566			(30,380	)		—

Revenues		27,777		13,745		44,180			2,280			(30,979	)		57,003

Operating income (loss)		899		558		4,364			(1,006	)		(304	)		4,511
Income (loss) from equity interests in associates and joint ventures		—		56		(34	)		—			—			22
Depreciation of property, plant and equipment		9,935		65		1,569			195			—			11,764
Acquisition of property, plant and equipment		9,448		943		1,279			280			—			11,950
Assets		210,579		36,553		123,151			34,090			(1,364	)		403,009
For the three-month period ended March 31, 2016
Revenues from sales		5,897		4,750		35,750			537			—			46,934
Revenues from intersegment sales		23,433		706		210			1,661			(26,010	)		—

Revenues		29,330		5,456		35,960			2,198			(26,010	)		46,934

Operating income (loss)		4,441		4		(798	)		(526	)		(1,503	)		1,618
Income from equity interests in associates and joint ventures		—		66		31			—			—			97
Depreciation of property, plant and equipment		9,096		88		1,202			148			—			10,534
Acquisition of property, plant and equipment		12,255		457		1,634			395			—			14,741
As of December 31, 2016
Assets		236,173		25,866		125,536			34,739			(1,175	)		421,139

(1)	Corresponds to the elimination of income among segments of the YPF Group.

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

YPF SOCIEDAD ANONIMA

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF MARCH 31, 2016 AND COMPARATIVE INFORMATION

7. FINANCIAL INSTRUMENTS BY CATEGORY

Fair value measurements

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

The tables below show the Group’s financial assets measured at fair value as of March 31, 2017 and December 31, 2016, and their allocation to their fair value hierarchies:


	As of March 31, 2017
Financial assets	Level 1			Level 2		Level 3		Total
Investments in financial assets:
- Mutual funds		113			—		—		113
- Government securities		14,734	⁽¹⁾		—		—		14,734

		14,847			—		—		14,847

Cash and cash equivalents:
- Mutual funds		5,333			—		—		5,333

		5,333			—		—		5,333

		20,180			—		—		20,180


	As of December 31, 2016
Financial assets	Level 1			Level 2		Level 3		Total
Investments in financial assets:
- Mutual funds		53			—		—		53
- Government securities		15,232	⁽¹⁾		—		—		15,232

		15,285			—		—		15,285

Cash and cash equivalents:		2,808			—		—		2,808

- Mutual funds		2,808			—		—		2,808

		18,093			—		—		18,093

(1)	As of March 31, 2017, 7,315 has been classified as noncurrent and 7,419 as current. As of December 31, 2016, 7,737 has been classified as noncurrent and 7,495 as current.

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

Fair value estimates

From December 31, 2016 until March 31, 2017, there have been no significant changes in the commercial or economic circumstances affecting the fair value of the Group’s assets and financial liabilities, whether measured at fair value or amortized cost.

During the three-month period ended March 31, 2017, there were no transfers between the different hierarchies used to determine the fair value of the Group’s financial instruments.

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

The estimated fair value of loans, considering unadjusted listed prices (Level 1) for Negotiable Obligations and interest rates offered to the Group (Level 3) in connection with the remaining financial loans, amounted to 153,163 and 157,133 as of March 31, 2017 and December 31, 2016, respectively.

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

•

Other receivable

•

Trade receivables

•

Cash and cash equivalents

•

Accounts payable

•

Other liabilities

YPF SOCIEDAD ANONIMA

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF MARCH 31, 2017 AND COMPARATIVE INFORMATION

8. INTANGIBLE ASSETS

Changes in the Group’s intangible assets for the three-month period ended March 31, 2017 and the year ended December 31, 2016 are as follows:


	Service concession			Exploration rights			Other intangibles			Total
Cost		9,527			2,990			4,260			16,777
Accumulated amortization		5,553			155			3,710			9,418

Balances as of December 31, 2015		3,974			2,835			550			7,359

Cost
Increases		642			75			171			888
Translation effect		2,127			612			936			3,675
Decreases and reclassifications		(547	)		(584	)		127			(1,004	)
Accumulated amortization
Increases		437			—			280			717
Translation effect		1,245			—			848			2,093
Decreases and reclassifications		—			(6	)		—			(6	)
Cost		11,749			3,093			5,494			20,336
Accumulated amortization		7,235			149			4,838			12,222

Balances as of December 31, 2016		4,514			2,944			656			8,114

Cost
Increases		156			—			54			210
Translation effect		(373	)		(93	)		(172	)		(638	)
Decreases and reclassifications		—			—			173			173
Accumulated amortization
Increases		130			—			51			181
Translation effect		(227	)		—			(157	)		(384	)
Decreases and reclassifications		—			—			17			17
Cost		11,532			3,000			5,549			20,081
Accumulated amortization		7,138			149			4,749			12,036

Balances as of March 31, 2017		4,394			2,851			800			8,045

YPF SOCIEDAD ANONIMA

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF MARCH 31, 2017 AND COMPARATIVE INFORMATION

9. PROPERTY, PLANT AND EQUIPMENT


	March 31, 2017			December 31, 2016
Net book value of property, plant and equipment		332,016			345,679
Provision for obsolescence of materials and equipment		(1,401	)		(1,380	)
Provision for impairment of property, plant and equipment		(33,002	)		(36,285	)

		297,613			308,014

Changes in Group’s property, plant and equipment for the three-month period ended March 31, 2017 and the year ended December 31, 2016 are as follows:


	Land and buildings			Mineral property, wells and related equipment			Refinery equipment and petrochemical plants			Transportation equipment			Materials and equipment in warehouse			Drilling and work in progress			Exploratory drilling in progress			Furniture, fixtures and installations			Selling equipment			Infrastructure for natural gas distribution		Electric power generation facilities		Other property			Total
Cost		13,949			458,066			69,429			3,650			13,478			76,803			3,647			5,603			10,778			2,931		1,573		8,291			668,198
Accumulated depreciation		5,920			324,922			41,138			2,392			—			—			—			4,699			6,921			1,181		1,283		5,620			394,076

Balances as of December 31, 2015		8,029			133,144			28,291			1,258			13,478			76,803			3,647			904			3,857			1,750		290		2,671			274,122

Cost
Increases		140			3,831			1			3			6,968			52,610			1,392			25			—			—		2		76			65,048
Translation effect		2,975			104,086			16,601			802			2,494			14,602			626			1,260			2,430			—		—		1,658			147,534
Decreases and reclassifications		1,365			59,645			26,529			1,096			(8,701	)		(91,342	)		(3,687	)		1,201			1,138			260		187		(60	)		(12,369	)
Accumulated depreciation
Increases		360			40,729			4,312			414			—			—			—			668			642			75		111		318			47,629
Translation effect		1,257			73,288			9,288			516			—			—			—			1,052			1,558			—		—		1,142			88,101
Decreases and reclassifications		(40	)		(6,937	)		(3	)		(37	)		—			—			—			(18	)		(2	)		45		—		(82	)		(7,074	)
Cost		18,429			625,628			112,560			5,551			14,239			52,673			1,978			8,089			14,346			3,191		1,762		9,965			868,411
Accumulated depreciation		7,497			432,002			54,735			3,285			—			—			—			6,401			9,119			1,301		1,394		6,998			522,732

Balances as of December 31, 2016		10,932			193,626	⁽¹⁾		57,825			2,266			14,239			52,673			1,978			1,688			5,227			1,890		368		2,967			345,679

Cost
Increases		35			353			—			54			1,397			9,259			751			6			—			—		—		95			11,950
Translation effect		(546	)		(19,881	)		(3,519	)		(170	)		(412	)		(1,617	)		(90	)		(250	)		(459	)		—		—		(290	)		(27,234	)
Decreases and reclassifications		16			5,439			(987	)		107			(1,360	)		(5,990	)		(328	)		41			197			54		1		(1	)		(2,811	)
Accumulated depreciation
Increases		121			11,985			1,232			173			—			—			—			124			185			19		18		74			13,931
Translation effect		(230	)		(13,771	)		(1,714	)		(101	)		—			—			—			(201	)		(290	)		—		—		(206	)		(16,513	)
Decreases and reclassifications		—			(942	)		(923	)		—			—			—			—			35			(7	)		—		—		(13	)		(1,850	)
Cost		17,934			611,539			108,054			5,542			13,864			54,325			2,311			7,886			14,084			3,245		1,763		9,769			850,316
Accumulated depreciation		7,388			429,274			53,330			3,357			—			—			—			6,359			9,007			1,320		1,412		6,853			518,300

Balances as of March 31, 2017		10,546			182,265	⁽¹⁾		54,724			2,185			13,864			54,325			2,311	⁽²⁾		1,527			5,077			1,925		351		2,916			332,016

(1)	Includes 9,395 and 9,147 of mineral property as of March 31, 2017 and December 31, 2016, respectively.

(2)	As of March 31, 2017, there are 35 exploratory wells in progress. During period ended on such date, 7 wells were drilled, 5 wells were charged to exploratory expense and 4 were transferred to proved properties which are included in the account Mineral property, wells and related equipment.

YPF SOCIEDAD ANONIMA

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF MARCH 31, 2017 AND COMPARATIVE INFORMATION

9. PROPERTY, PLANT AND EQUIPMENT (Cont.)

The Group capitalizes the financial cost as part of the cost of the assets. For the three-month periods ended March 31, 2017 and 2016, the rate of capitalization was 12.54% and 12.38%, respectively, and the amount capitalized amounted to 204 and 302, respectively, for the periods mentioned above.

Set forth below is the evolution of the provision for obsolescence of materials and equipment for the three-month periods ended March 31, 2017 and 2016:


	For the three-month periods ended March 31,
	2017			2016
Amount at beginning of year		1,380			762
Increase charged to expenses		1			—
Amounts incurred due to utilization		(4	)		—
Transfers and other movements		68			—
Translation differences		(44	)		98

Amount at end of period		1,401			860

Set forth below is the evolution of the provision for impairment of property, plant and equipment for three-month periods ended on March 31, 2017 and 2016:


	For the three-month periods ended March 31,
	2017			2016
Amount at beginning of year		36,285			2,455
Depreciation⁽¹⁾		(2,167	)		(153	)
Translation differences		(1,116	)		313

Amount at end of period		33,002			2,615

(1)	Included in “Depreciation of property, plant and equipment” in Note 22.

10. 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 the value of the investments in associates and joint ventures at an aggregate level, considering that none of the individual companies is material, as of March 31, 2017 and December 31, 2016:


	March 31, 2017			December 31, 2016
Amount of investments in associates		1,360			1,478
Amount of investments in joint ventures		4,243			4,022
Provision for impairment of investments in associates and joint ventures		(12	)		(12	)

		5,591			5,488

Disclosed in investments in associates and joint ventures		5,591			5,488

YPF SOCIEDAD ANONIMA

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF MARCH 31, 2017 AND COMPARATIVE INFORMATION

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

The main movements during the three-month periods ended March 31, 2017 and 2016, which affected the value of the aforementioned investments, correspond to:


	2017			2016
Amount at the beginning of year		5,488			4,372
Acquisitions and contributions		282			—
Income on investments in associates and joint ventures		22			97
Translation differences		(106	)		370
Distributed dividends		(95	)		—

Amount at the end of period		5,591			4,839

The following table shows the principal amounts of the results of the investments in associates and joint ventures of the Group, calculated according to the equity value therein, for the three-month periods ended March 31, 2017 and 2016. The Group has adjusted, if applicable, the values reported by these companies to adapt them to the accounting criteria used by the Group for the valuation equity method in the aforementioned dates:


	Associates					Joint ventures
	For the three-month periods ended March 31,					For the three-month periods ended March 31,
	2017			2016		2017			2016
Net income (loss)		(18	)		91		40			6
Other comprehensive income		(7	)		19		(99	)		351

Comprehensive income for the period		(25	)		110		(59	)		357

YPF SOCIEDAD ANONIMA

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF MARCH 31, 2017 AND COMPARATIVE INFORMATION

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

The following table shows information of the subsidiaries:


	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 profit (loss)			Equity			Holding in Capital Stock
Subsidiaries:⁽⁹⁾
YPF International S.A.⁽⁷⁾		Common	Bs.	100		66,897	Investment	La Plata Street 19, Santa Cruz de la Sierra, República de Bolivia		03-31-17		15			—	⁽⁸⁾		24			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.		03-31-17		12,668			(313	)		(3,038	)		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		03-31-17		164			127			744			99.99	%
A-Evangelista S.A.		Common	$	1		307,095,088	Engineering and construction services	Macacha Güemes 515, Buenos Aires, Argentina		03-31-17		307			7			1,131			100.00	%
YPF Servicios Petroleros S.A.		Common	$	1		50,000	Wells perforation and/or reparation services	Macacha Güemes 515, Buenos Aires, Argentina		03-31-17		—	⁽⁸⁾		(38	)		(56	)		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.		03-31-17		569			517			(858	)		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		12-31-16		30			580			1,736			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		03-31-17		700			—	⁽⁸⁾		1,241			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		03-31-17		459			22			675			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		12-31-16		—	⁽⁸⁾		132			12			100.00	%
YSUR Inversora S.A.U.⁽¹⁰⁾		—		—		—	Investment	Macacha Güemes 515, Buenos Aires, Argentina		12-31-16		2,657			(1	)		5,397			100.00	%
YSUR Inversiones Petroleras S.A.U.⁽¹⁰⁾		—		—		—	Investment	Macacha Güemes 515, Buenos Aires, Argentina		12-31-16		230			—	⁽⁸⁾		391			100.00	%
YSUR Petrolera Argentina S.A. ⁽¹⁰⁾		—		—		—	Exploration, extraction, exploitation, storage, transportation, industrialization and marketing of hydrocarbons, as well as other operations related thereto	Macacha Güemes 515, Buenos Aires, Argentina		12-31-16		634			106			570			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		03-31-17		17			(5	)		(22	)		100.00	%

YPF SOCIEDAD ANONIMA

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF MARCH 31, 2017 AND COMPARATIVE INFORMATION

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

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


	03-31-2017																						12-31-2016
										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 profit (loss)			Equity		Holding in Capital Stock			Book Value⁽³⁾
Joint ventures:
Compañía Mega S.A.^(7) (6)	Common	$	1		244,246,140		1,262		—	Separation, fractionation and transportation of natural gas liquids	San Martín 344, P. 10º, Buenos Aires, Argentina	12-31-16		643		1,088			1,849		38.00	%		1,208
Profertil S.A.⁽⁷⁾	Common	$	1		391,291,320		1,837		—	Production and marketing of fertilizers	Alicia Moreau de Justo 740, P. 3, Buenos Aires, Argentina	12-31-16		783		600			1,052		50.00	%		1,897
Refinería del Norte S.A.	Common	$	1		45,803,655		431		—	Refining	Maipú 1, P. 2º, Buenos Aires, Argentina	12-31-16		92		(12	)		861		50.00	%		468

							3,530		—															3,573

Associates:
Oleoductos del Valle S.A.	Common	$	10		4,072,749		177		—	Oil transportation by pipeline	Florida 1, P. 10º, Buenos Aires, Argentina	03-31-17		110		8			480		37.00	%		174	⁽¹⁾
Terminales Marítimas Patagónicas S.A.	Common	$	10		476,034		96		—	Oil storage and shipment	Av. Leandro N. Alem 1180, P. 11º, Buenos Aires, Argentina	12-31-16		14		37			292		33.15	%		94
Oiltanking Ebytem S.A.	Common	$	10		351,167		132		—	Hydrocarbon transportation and storage	Terminal Marítima Puerto Rosales – Provincia de Buenos Aires, Argentina.	12-31-16		12		181			212		30.00	%		184
Gasoducto del Pacífico (Argentina) S.A.	Preferred	$	1		15,579,578		35		—	Gas transportation by pipeline	San Martín 323, P.13°, Buenos Aires, Argentina	12-31-16		156		100			329		10.00	%		33
Central Dock Sud S.A.	Common	$	0.01		11,869,095,145		159		126	Electric power generation and bulk marketing	Pasaje Ingeniero Butty 220, P.16°, Buenos Aires, Argentina	12-31-16		1,231		305			1,919		10.25	%⁽⁵⁾		175
Inversora Dock Sud S.A.	Common	$	1		355,270,303		521		415	Investment and finance	Pasaje Ingeniero Butty 220, P.16°, Buenos Aires, Argentina	12-31-16		829		215			1,381		42.86	%		569
Oleoducto Trasandino (Argentina) S.A.	Preferred	$	1		12,135,167		38		—	Oil transportation by pipeline	Macacha Güemes 515, P.3º, Buenos Aires, Argentina	12-31-16		34		9			96		36.00	%		37
YPF Gas S.A	Common	$	1		175,997,158		162		—	Gas fractionation, bottling, distribution and transport for industrial and/or residential use	Macacha Güemes 515, P.3º, Buenos Aires, Argentina	09-30-16		176		(25	)		699		34.00	%		172
Other companies:
Other⁽⁴⁾	—		—		—		753		135	—	—	—		—		—			—		—			489

							2,073		676															1,927

							5,603		676															5,500

(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., Y-GEN Eléctrica S.R.L., Y-GEN Eléctrica II S.R.L., Y-GEN Eléctrica III S.R.L., Y-GEN Eléctrica IV S.R.L. and Petrofaro 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)	In addition, Compañía Minera de Argentina S.A., YPF Services USA Corp., YPF Brasil Comércio Derivado de Petróleo Ltda., Wokler Investment S.A., YPF Colombia S.A.S., Miwen S.A., Eleran Inversiones 2011 S.A.U., Lestery S.A., Energía Andina S.A. and EOG Resources Netherlands B.V. are consolidated.

(10)	Companies merged with YPF.

YPF SOCIEDAD ANONIMA

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF MARCH 31, 2017 AND COMPARATIVE INFORMATION

11. INVENTORIES


	March 31, 2017			December 31, 2016
Refined products		13,193			13,390
Crude oil and natural gas		5,910			6,551
Products in process		463			411
Construction works in progress for third parties		118			12
Raw materials, packaging materials and others		1,348			1,456

		21,032	⁽¹⁾		21,820	⁽¹⁾

(1)	As of March 31, 2017 and December 31, 2016, the cost of inventories does not exceed their realization net value.

12. OTHER RECEIVABLES


	March 31, 2017						December 31, 2016
	Noncurrent			Current			Noncurrent			Current
Trade		—			1,330			—			1,733
Tax credit and export rebates		295			1,736			291			4,648
Loans to third parties and balances with related parties⁽¹⁾		571			497			2,495			1,703
Collateral deposits		1			233			17			214
Prepaid expenses		131			1,389			159			702
Advances and loans to employees		11			334			12			335
Advances to suppliers and custom agents ⁽²⁾		—			2,392			—			1,691
Receivables with partners in JO and consortia		845			1,182			816			1,361
Miscellaneous		48			1,109			134			1,111

		1,902			10,202			3,924			13,498
Provision for other doubtful receivables		(15	)		(41	)		(15	)		(42	)

		1,887			10,161			3,909			13,456

(1)	See Note 32 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.

13. TRADE RECEIVABLES


	March 31, 2017					December 31, 2016
	Noncurrent		Current			Noncurrent		Current
Accounts receivable and related parties ⁽¹⁾		128		33,002			87		34,729
Provision for doubtful trade receivables		—		(1,083	)		—		(1,084	)

		128		31,919			87		33,645

(1)	See Note 32 for information about related parties.

Changes in the provision for doubtful trade receivables


	For the three-month periods ended March 31,
	2017			2016
	Current			Current
Amount at beginning of year		1,084			848
Increases charged to expenses		35			19
Decreases charged to income		(15	)		(9	)
Amounts incurred due to payment/utilization		(3	)		(1	)
Translation differences		(18	)		66

Amount at end of period		1,083			923

14. CASH AND CASH EQUIVALENTS


	March 31, 2017		December 31, 2016
Cash and banks		5,620		7,922
Short-term investments		471		27
Financial assets at fair value through profit or loss ⁽¹⁾		5,333		2,808

		11,424		10,757

(1)	See Note 7.

YPF SOCIEDAD ANONIMA

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF MARCH 31, 2017 AND COMPARATIVE INFORMATION

15. PROVISIONS

Changes in the Group’s provisions for the three-month period ended March 31, 2017 and for the fiscal year ended December 31, 2016 are as follows:


	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 as of December 31, 2015		10,375			149			1,620			1,400			27,380			429			248			31			39,623			2,009

Increases charged to expenses		1,579			335			962			32			3,023			—			97			—			5,661			367
Decreases charged to income		(158	)		(258	)		—			—			(10	)		(77	)		(1	)		—			(169	)		(335	)
Amounts incurred due to payments/utilization		9			(239	)		—			(869	)		(48	)		(584	)		—			(13	)		(39	)		(1,705	)
Exchange and translation differences, net		1,221			7			159			52			6,245			94			26			3			7,651			156
Deconsolidation of subsidiaries		(2,213	)		(11	)		(1,351	)		(607	)		(515	)		—			(357	)		(34	)		(4,436	)		(652	)
Reclassifications and other movements		(1,608	)		586			(860	)		860			1,548			695			(13	)		13			(933	)		2,154

Amount as of December 31, 2016		9,205			569			530			868			37,623			557			—			—			47,358			1,994

Increases charged to expenses		720			25			274			—			770			—			—			—			1,764			25
Decreases charged to income		—			(133	)		(6	)		—			—			—			—			—			(6	)		(133	)
Amounts incurred due to payments/utilization		(3	)		(18	)		—			(160	)		—			(92	)		—			—			(3	)		(270	)
Exchange and translation differences, net		(297	)		(7	)		—			—			(1,256	)		(12	)		—			—			(1,553	)		(19	)
Reclassifications and other movements		2,900	⁽¹⁾		32			(175	)		175			32			(32	)		—			—			2,757			175

Amount as of March 31, 2017		12,525			468			623			883			37,169			421			—			—			50,317			1,772

(1)	Includes 2,932 of reclassifications from Other liabilities.

Provisions for lawsuits, claims and environmental liabilities are described in Note 14 to the annual consolidated financial statements.

No significant new provisions have been identified for the three-month period ended on March 31, 2017, nor have there been amendments to the evaluations of the ongoing matters as of December 31, 2016, except for the provisions in Note 28.

YPF SOCIEDAD ANONIMA

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF MARCH 31, 2017 AND COMPARATIVE INFORMATION

16. 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 year-end. Amounts calculated for income tax expense for the three-month period ended March 31, 2017 may need to be adjusted in subsequent periods if, based on new factors of judgment, the estimate of the effective expected income tax rate changes.

The calculation of the income tax expense accrued for the three-month periods ended March 31, 2017 and 2016 is as follows:


	For the three-month periods ended March 31,
	2017			2016
Current income tax		(139	)		(261	)
Deferred income tax		2,959			(4,617	)

		2,820			(4,878	)

The reconciliation between the charge to income for income tax for the three-month periods ended March 31, 2017 and 2016 and the one that would result from applying the prevailing tax rate on net (loss) income before income tax arising from the consolidated statements of comprehensive income for each year is as follows:


	For the three-month periods ended March 31,
	2017			2016
Net (loss)/income before income tax		(2,628	)		5,733
Statutory tax rate		35	%		35	%

Statutory tax rate applied to net income (loss) before income tax		920			(2,007	)
Effect of the valuation of property, plant and equipment and intangible assets measured in functional currency		3,782			(9,108	)
Exchange differences		(2,476	)		7,585
Effect of the valuation of inventories		274			(1,027	)
Income on investments in subsidiaries, associates and joint ventures		8			34
Miscellaneous		312			(355	)

Income tax expense		2,820			(4,878	)

Breakdown of deferred tax as of March 31, 2017 and December 31, 2016 is as follows:


	March 31, 2017			December 31, 2016
Deferred tax assets
Provisions and other non-deductible liabilities		3,709			3,607
Tax losses carryforward and other tax credits		1,034			3,837
Miscellaneous		79			82

Total deferred tax assets		4,822			7,526

Deferred tax liabilities
Property, plant and equipment		(40,114	)		(45,579	)
Miscellaneous		(3,706	)		(3,848	)

Total deferred tax liabilities		(43,820	)		(49,427	)

Total deferred tax, net		(38,998	)		(41,901	)

As of March 31, 2017 and December 31, 2016, the Group has classified as deferred tax assets for 362 and 564, respectively, and as deferred tax liability 39,360 and 42,465, respectively, all of which arise from the net deferred tax balances of each of the separate companies included in these condensed interim consolidated financial statements.

As of March 31, 2017 and December 31, 2016, the causes that generate allocations to Other comprehensive income, did not create temporary differences for income tax.

YPF SOCIEDAD ANONIMA

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF MARCH 31, 2017 AND COMPARATIVE INFORMATION

17. LOANS


									March 31, 2017				December 31, 2016
	Interest rate ⁽¹⁾						Maturity		Noncurrent		Current		Noncurrent		Current
Argentine pesos:
Negotiable obligations		19.97	%	-	27.23	%		2017-2024		29,044		3,462		29,194		4,400
Loans⁽³⁾		20.00	%	-	29.64	%		2017-2020		1,694		3,809		2,416		1,459
Account overdraft⁽⁵⁾		—		-	—			—		—		—		—		4,037

										30,738		7,271		31,610		9,896

Currencies other than the Argentine peso:
Negotiable obligations^{(2)(4) (6)}		1.29	%	-	10.00	%		2017-2028		83,455		3,220		86,116		4,360
Export pre-financing		2.00	%	-	8.07	%		2017-2019		1,853		5,742		1,908		6,491
Imports financing		1.60	%	-	6.23	%		2017-2018		—		2,295		—		2,439
Loans⁽⁶⁾		1.00	%	-	8.50	%		2017-2025		7,486		4,228		7,934		3,591

										92,794		15,485		95,958		16,881

										123,532		22,756		127,568		26,777

(1)	Annual interest rate in force as of March 31, 2017.

(2)	Disclosed net of 637 and 672 corresponding to YPF’s own negotiable obligations repurchased through open market transactions, as of March 31, 2017 and December 2016, respectively.

(3)

Includes loans granted by Banco Nación Argentina. As of March 31, 2017, it includes 4,105; 105 of which accrues interest at a BADLAR variable rate plus a spread of 4 percentage points, 2,000 of which accrues interest at a BADLAR variable rate plus a spread of 3.5 percentage points and 2,000 of which accrues interest at a fixed rate of 20 percentage points. As of December 31, 2016, it includes 2,105, 105 of which accrues interest at a variable BADLAR rate plus a margin of 4 percentage points and 2,000 of which accrues interest at a variable BADLAR rate plus a spread of 3.5 percentage points. See Note 32.

(4)	Includes 2,812 and 3,253 as of March 31, 2017 and December 31, 2016, respectively, of nominal value of negotiable obligations that will be canceled in pesos at the applicable exchange rate in accordance with the terms of the series issued.

(5)	Includes 1,440 corresponding to overdrafts granted by Banco Nación Argentina as of December 31, 2016. See Note 32.

(6)	Includes 4,583 and 4,960 corresponding to financial loans and negotiable obligations secured by cash flows as of March 31, 2017 and December 31, 2016.

The breakdown of the Group’s loans as of the three-month periods ended on March 31, 2017 and 2016 is as follows:


	For the three-month periods ended March 31,
	2017			2016
Amount at beginning of the year		154,345			105,751
Proceeds from loans		4,769			36,603
Payments of loans		(8,393	)		(17,179	)
Payments of interest		(5,369	)		(3,515	)
Accrued interest⁽¹⁾		4,080			3,674
Exchange differences and translation, net		(3,144	)		9,664

Amount at the end of the period		146,288			134,998

(1)	Includes capitalized financial costs. See Note 9.

On April 28, 2017, the General and Extraordinary Shareholders’ Meeting approved the extension of the effective term of the Global Medium Term Notes Program of the Company for a term of 5 years.

YPF SOCIEDAD ANONIMA

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF MARCH 31, 2017 AND COMPARATIVE INFORMATION

17. LOANS (Cont.)

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


										Principal		March 31, 2017				December 31, 2016
Month	Year		Principal value		Ref.	Class	Interest rate⁽³⁾			Maturity		Noncurrent		Current		Noncurrent		Current
YPF
-		1998	US$	15	(1)(6)	-	Fixed	10.00	%		2028		227		9		63		4
November and December		2012	$	2,110	(2)(4)(6)(7)	Class XI	-	—			—		—		—		—		260
December and March		2012/3	$	2,828	(2)(4)(6)(7)	Class XIII	BADLAR plus 4.75%	24.66	%		2018		1,414		1,437		1,414		1,439
April		2013	$	2,250	(2)(4)(6)(7)	Class XVII	BADLAR plus 2.25%	22.87	%		2020		2,250		86		2,250		101
April		2013	US$	89	(2)(5)(6)	Class XIX	Fixed	1.29	%		2017		—		1,368		—		1,413
June		2013	$	1,265	(2)(4)(6)	Class XX	BADLAR plus 2.25%	22.17	%		2020		1,265		11		1,265		12
July		2013	US$	92	(2)(5)(6)	Class XXII	Fixed	3.50	%		2020		558		190		576		197
October		2013	US$	150	(2)(6)	Class XXIV	Libor plus 7.50%	8.54	%		2018		271		550		419		570
December, February and December		2013/5	US$	862	(2)	Class XXVI	Fixed	8.88	%		2018		12,912		249		13,410		40
April, February and October		2014/5/6	US$	1,522	(2)(4)	Class XXVIII	Fixed	8.75	%		2024		23,349		315		24,111		509
March		2014	$	500	(2)(6)(7)	Class XXIX	BADLAR	19.97	%		2020		350		157		500		8
June		2014	US$	66	(2)(5)(6)	Class XXXIII	-	—			—		—		—		—		350
September		2014	$	1,000	(2)(6)(7)	Class XXXIV	BADLAR plus 0.1%	20.86	%		2024		1,000		5		1,000		76
September		2014	$	750	(2)(4)(6)	Class XXXV	BADLAR plus 3.5%	24.26	%		2019		750		4		750		64
February		2015	$	950	(2)(6)(7)	Class XXXVI	BADLAR plus 4.74%	26.61	%		2020		950		35		950		126
February		2015	$	250	(2)(6)(7)	Class XXXVII	-	—			—		—		—		—		260
April		2015	$	935	(2)(4)(6)	Class XXXVIII	BADLAR plus 4.75%	25.23	%		2020		935		112		935		69
April		2015	US$	1,500	(2)	Class XXXIX	Fixed	8.50	%		2025		22,872		340		23,617		853
July		2015	$	500	(2)(6)	Class XL	BADLAR plus 3.49%	24.47	%		2017		—		525		—		529
September		2015	$	1,900	(2)(7)	Class XLI	BADLAR	20.76	%		2020		1,900		9		1,900		145
September and December		2015	$	1,697	(2)(4)	Class XLII	BADLAR plus 4%	24.76	%		2020		1,697		9		1,697		148
October		2015	$	2,000	(2)(7)	Class XLIII	BADLAR	26.98	%		2023		2,000		240		2,000		106
December		2015	$	1,400	(2)	Class XLIV	BADLAR plus 4.75%	24.72	%		2018		1,400		21		1,400		23
March		2016	$	150	(2)	Class XLV	BADLAR plus 4%	23.99	%		2017		—		153		—		153
March		2016	$	1,350	(2)(4)	Class XLVI	BADLAR plus 6%	27.23	%		2021		1,350		28		1,350		152
March		2016	US$	1,000	(2)	Class XLVII	Fixed	8.50	%		2021		15,340		29		15,840		367
April		2016	US$	46	(2)(5)	Class XLVIII	Fixed	8.25	%		2020		703		12		726		12
April		2016	$	535	(2)	Class XLlX	BADLAR plus 6%	26.94	%		2020		535		27		535		33
July		2016	$	11,248	(2)(8)	Class L	BADLAR plus 4%	23.85	%		2020		11,248		603		11,248		696
September		2016	CHF	300	(2)	Class Ll	Fixed	3.75	%		2019		4.595		88		4,673		45
Metrogas
January		2013	US$	177		Series A-L	Fixed	8.88	%		2018		2,418		70		2,461		—
January		2013	US$	18		Series A-U	Fixed	8.88	%		2018		210		—		220		—

													112,499		6,682		115,310		8,760

(1)	Corresponds to the 1997 M.T.N. Program for US$ 1,000 million.

(2)	Corresponds to the 2008 M.T.N. Program for US$ 10,000 million.

(3)	Interest rate as of March 31, 2017.

(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 on the securities market where these negotiable obligations are authorized to be traded.

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

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

(7)	Negotiable obligations classified as productive investments computable as such for the purposes of section 35.8.1, paragraph K of the General Regulations applicable to Insurance Activities issued by the Argentine Insurance Supervisory Bureau.

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

YPF SOCIEDAD ANONIMA

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF MARCH 31, 2017 AND COMPARATIVE INFORMATION

18. OTHER LIABILITIES


	March 31, 2017				December 31, 2016
	Noncurrent		Current		Noncurrent		Current
Extension of concessions		319		466		336		508
Maxus Entities’ agreements		—		—		—		2,932
Liabilities for contractual claims		—		—		—		950

		319		466		336		4,390

19. ACCOUNTS PAYABLE


	March 31, 2017				December 31, 2016
	Noncurrent		Current		Noncurrent		Current
Trade and related parties ⁽¹⁾		1,711		37,319		2,145		40,667
Guarantee deposits		13		436		13		482
Payables with partners of JO		—		—		—		9
Miscellaneous		23		443		29		437

		1,747		38,198		2,187		41,595

(1)	For more information about related parties, see Note 32.

20. REVENUES


	For the three-month periods ended March 31,
	2017			2016
Sales ⁽¹⁾		58,500			48,418
Revenues from construction contracts		483			140
Turnover tax		(1,980	)		(1,624	)

		57,003			46,934

(1)

Includes 1,857 and 5,230 for the three-month periods ended March 31, 2017 and 2016, respectively, associated with revenues related to the natural gas additional injection stimulus program created by Resolution No. 1/2013 of the Planning and Strategic Coordination Commission of the National Plan of Hydrocarbons Investment. See Note 32.

21. COSTS


	For the three-month periods ended March 31,
	2017			2016
Inventories at beginning of year		21,820			19,258
Purchases		12,263			9,828
Production costs⁽¹⁾		33,424			29,214
Translation effect		(677	)		2,386
Inventories at end of the period		(21,032	)		(20,555	)

		45,798			40,131

(1)	See Note 22.

YPF SOCIEDAD ANONIMA

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF MARCH 31, 2017 AND COMPARATIVE INFORMATION

22. EXPENSES BY NATURE

The Group presents the statement of comprehensive income by classifying expenses according to their function as part of the “Costs”, “Administrative expenses”, “Selling expenses” and “Exploration expenses” lines. The following additional information is disclosed as required, on the nature of the expenses and their relation to the function within the Group for the three-month periods ended March 31, 2017 and 2016:


	For the three-month period ended March 31, 2017
	Production costs⁽³⁾		Administrative expenses			Selling expenses		Exploration expenses		Total
Salaries and social security taxes		2,505		763			433		83		3,784
Fees and compensation for services		234		461	⁽²⁾		124		—		819
Other personnel expenses		761		74			37		11		883
Taxes, charges and contributions⁽¹⁾		491		79			822		—		1,392
Royalties, easements and canons		4,108		—			7		9		4,124
Insurance		200		10			19		—		229
Rental of real estate and equipment		1,346		4			118		—		1,468
Survey expenses		—		—			—		89		89
Depreciation of property, plant and equipment		11,363		147			254		—		11,764
Amortization of intangible assets		148		27			6		—		181
Industrial inputs, consumable materials and supplies		1,107		4			32		3		1,146
Operation services and other service contracts		3,869		47			215		16		4,147
Preservation, repair and maintenance		4,225		88			170		11		4,494
Unproductive exploratory drillings		—		—			—		370		370
Transportation, products and charges		1,977		3			1,375		—		3,355
Provision for doubtful trade receivables		—		—			20		—		20
Publicity and advertising expenses		1		54			74		—		129
Fuel, gas, energy and miscellaneous		1,089		29			181		1		1,300

		33,424		1,790			3,887		593		39,694

(1)	Includes approximately 259 corresponding to export withholdings.

(2)

Includes 11 corresponding to fees and remunerations of the Directors and Statutory Auditors of YPF’s Board of Directors. On April 28, 2017, the General and Extraordinary Shareholders’ Meeting of YPF resolved to ratify the fees corresponding to fiscal year 2016 of 127 and to approve as fees on account for such fees and remunerations for the fiscal year 2017, the approximate sum of 48.

(3)	The expense recognized in the condensed interim consolidated statement of comprehensive income corresponding to research and development activities amounted to 81.


	For the three-month period ended March 31, 2016
	Production costs⁽³⁾		Administrative expenses			Selling expenses		Exploration expenses		Total
Salaries and social security taxes		2,013		566			341		63		2,983
Fees and compensation for services		204		336	⁽²⁾		90		17		647
Other personnel expenses		671		55			25		11		762
Taxes, charges and contributions⁽¹⁾		355		76			687		—		1,118
Royalties, easements and canons		4,340		—			6		8		4,354
Insurance		179		10			83		—		272
Rental of real estate and equipment		1,225		8			117		—		1,350
Survey expenses		—		—			—		123		123
Depreciation of property, plant and equipment		10,169		143			222		—		10,534
Amortization of intangible assets		94		50			9		—		153
Industrial inputs, consumable materials and supplies		1,348		9			21		3		1,381
Operation services and other service contracts		2,297		80			169		27		2,573
Preservation, repair and maintenance		3,685		82			59		10		3,836
Unproductive exploratory drillings		—		—			—		188		188
Transportation, products and charges		1,605		3			1,024		—		2,632
Provision for doubtful trade receivables		—		—			10		—		10
Publicity and advertising expenses		—		37			25		—		62
Fuel, gas, energy and miscellaneous		1,029		31			157		4		1,221

		29,214		1,486			3,045		454		34,199

(1)	Includes approximately 223 corresponding to export withholdings.

(2)

Includes 40 corresponding to fees and remunerations of the Directors and Statutory Auditors of YPF’s Board of Directors. On April 29, 2016, the General and Extraordinary Shareholders’ Meetings of YPF resolved to ratify the fees corresponding to fiscal year 2015 for 140 and to approve as fees on account for such fees and remunerations for the fiscal year 2016 the approximate sum of 127.

(3)	The expense recognized in the condensed interim consolidated statement of comprehensive income corresponding to research and development activities amounted to 70.

YPF SOCIEDAD ANONIMA

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF MARCH 31, 2017 AND COMPARATIVE INFORMATION

23. OTHER OPERATING RESULTS, NET


	For the three-month periods ended March 31,
	2017			2016
Lawsuits		(636	)		(182	)
Miscellaneous		212			(18	)

		(424	)		(200	)

24. FINANCIAL RESULTS, NET


	For the three-month periods ended March 31,
	2017			2016
Financial income
Interest income		476			328
Exchange differences		1,136			8,793

Total financial income		1,612			9,121

Financial loss
Interest loss		(4,078	)		(4,027	)
Financial accretion		(806	)		(724	)
Exchange differences		(3,964	)		(729	)

Total financial costs		(8,848	)		(5,480	)

Other financial results
Fair value gains on financial assets at fair value through profit or loss		75			89
Gains on derivative financial instruments		—			288

Total other financial results		75			377

Other financial results, net		(7,161	)		4,018

25. INVESTMENTS IN JOINT OPERATIONS

The assets and liabilities as of March 31, 2017 and December 31, 2016, and expenses for the three-month periods ended on March 31, 2017 and 2016 of JO and other agreements are as follows:


	March 31, 2017		December 31, 2016
Noncurrent assets⁽¹⁾		56,600		63,145
Current assets		969		2,602

Total assets		57,569		65,747

Noncurrent liabilities		4,982		5,946
Current liabilities		5,931		6,293

Total liabilities		10,913		12,239


	For the three-month periods ended March 31,
	2017		2016
Production Cost		5,326		4,599
Exploration expenses		219		207

(1)	Does not include impairment of property, plant and equipment since such impairment is recorded by the participating partners of the JO.

YPF SOCIEDAD ANONIMA

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF MARCH 31, 2017 AND COMPARATIVE INFORMATION

26. SHAREHOLDERS’ EQUITY

The Company’s subscribed capital as of March 31, 2017, is 3,923 and is represented by 393,312,793 shares of common stock and divided into four classes of shares (A, B, C and D), with a par value of Argentine pesos 10 and one vote per share. These shares are fully subscribed, paid-in and authorized for stock exchange listing.

As of March 31, 2017, there are 3,764 Class A outstanding shares. As long as any Class A share remains outstanding, the affirmative vote of Argentine Government is required for: 1) mergers, 2) acquisitions of more than 50% of YPF shares in an agreed or hostile bid, 3) transfers of all the YPF’s exploitation and exploration rights, 4) the voluntary dissolution of YPF or 5) change of corporate and/or tax address outside the Argentine Republic. Items 3) and 4) will also require prior approval by the Argentine Congress.

On April 28, 2017, the General and Extraordinary Shareholders’ Meeting was held, which approved YPF’s financial statements corresponding to the fiscal year ended December 31, 2016 and approved the following in relation to the distribution of profits: a) the complete elimination of the special reserve for initial adjustment for the implementation of IFRS pursuant to the provisions of Article 10, Chapter III, Title IV of the CNV Rules (T.O. 2013), the reserve for future dividends, the reserve for purchase of Company shares and the reserve for investments; b) to fully absorb the losses accumulated in Retained earnings of up to 28,231 against amounts corresponding to discontinued reserves for up to that amount; and c) to allocate the remaining amount of the discontinued reserves as follows: (i) the amount of 100 to establish a reserve to purchase Company shares, in order to make it possible for the Board of Directors to acquire Company shares when they consider it opportune, and to fulfill commitments under the bonus and incentive plans, both currently existing and those that may arise in the future, and (ii) the amount of 716 to a reserve for payment of dividends, authorizing the Board of Directors to determine when to distribute such dividends prior to the end of the fiscal year.

27. 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 three-month periods ended on March 31,
	2017		2016
Net income		25		996
Average number of shares outstanding		390,550,426		392,101,191
Basic and diluted earnings per share		0.06		2.54

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

YPF SOCIEDAD ANONIMA

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF MARCH 31, 2017 AND COMPARATIVE INFORMATION

28. DECONSOLIDATION OF MAXUS ENTITIES

• Reorganization process under Chapter 11 of the US Bankruptcy Law of Maxus Entities

On March 28, 2017, in connection with the reorganization proceedings under Chapter 11 of the United States Bankruptcy Code filed by Maxus Energy Corporation, Tierra Solutions Inc., Maxus International Energy Company, Maxus (US) Exploration Company and Gateway Coal Company (collectively, the “Maxus Entities”), the Creditors’ Committee and the Maxus Entities submitted an alternative restructuring plan (the “Alternative Plan”) that does not incorporate the agreement (the “Agreement”) with YPF, jointly with its subsidiaries YPF Holdings, CLH Holdings Inc., YPF International and YPF Services USA Corp (jointly, the “YPF Entities”), to settle any and all claims held by the Maxus Entities against the YPF Entities, including any alter ego claims, all of which claims the YPF Entities believe are without merit.

Under the Alternative Plan, a liquidating trust (the “Liquidating Trust”) may pursue alter ego claims or any other estate claims against the YPF Entities. The Liquidating Trust will be funded by Occidental Chemical Corporation, a creditor of the Maxus Entities.

As YPF does not approve of such Alternative Plan and the Alternative Plan does not contemplate the implementation of the Agreement originally submitted, this situation creates an event of default (“Event of Default”) under the loan granted within the scope of the Agreement with YPF and the YPF Entities (the “DIP Loan”), and on April 10, 2017, YPF Holdings sent a note to communicate this development. Additionally, on April 17, 2017, YPF Holdings communicated that the amounts due under the DIP Loan terms are an approximate total of US$ 12.2 million.

On April 21, 2017, the Judge issued an order to authorize the repayment of amounts due under the terms of the DIP Loan through the approval of the financing offered by Occidental (“Post-petition DIP Facility”) within the scope of the Alternative Plan. The Alternative Plan remains subject to confirmation by the United States Bankruptcy Court of the District of Delaware. The hearing on the confirmation of the Alternative Plan is currently scheduled to begin in late May 2017.

Considering the preceding events mentioned, the Company’s Management, in consultation with its legal advisors, estimates that the Agreement originally submitted has no reasonable prospect of final approval by the Judge and, accordingly, has reassessed the amounts reported considering the existing uncertainties and classified them as provisions in accordance with the accounting policies explained in Note 2.b.7) to the annual consolidated financial statements.

29. CONTINGENT ASSETS AND LIABILITIES

Contingent liabilities and contingent assets are described in Note 28 to the annual consolidated financial statements.

29.a) Contingent assets

No new significant contingent assets have been identified for the three-month period ended March 31, 2017, nor have there been amendments to the evaluations of contingencies pending as of December 31, 2016.

29.b) Contingent liabilities

Development for the three-month period ended on March 31, 2017 are described below:

29.b.1) Environmental claims

• Asociación Superficiarios de la Patagonia (“ASSUPA”)

In connection with the judicial claims filed by ASSUPA against the companies operating concessions in the Northwestern Basin, on April 19, 2017, YPF was notified of the Court’s ruling to resume the proceedings. The Company will timely respond to the claim by filing all relevant procedural defenses.

YPF SOCIEDAD ANONIMA

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF MARCH 31, 2017 AND COMPARATIVE INFORMATION

29. CONTINGENT ASSETS AND LIABILITIES (Cont.)

29.b.2) Contentious claims

• Petersen Energía Inversora, S.A.U. and Petersen Energía, S.A.U.

The Appeals Court scheduled a hearing on June 15, 2017 for the parties to be able to verbally explain their arguments.

29.b.3) Claims under the scope of the National Antitrust Commission (“CNDC”)

• Claims for the sale of diesel to public transportation companies

On March 14, 2017, YPF was notified of SC Resolution No. 137 which, based on the prior opinion given by the CNDC, ordered the case closed for failure to establish collusive behavior by the companies sued and abuse of dominant market position by YPF.

29.b.4) Tax claims

• Dispute over customs duties

On March 31, 2017, the Company resolved to pay the differences in export duties which had been objected to by several Customs authorities arising from future commitments to deliver crude oil, in accordance with the moratorium provided for by Law No. 27,260. This action made it possible to reduce interest and release the fines applied which were related to the substantial obligation. In that regard, the summaries and processes in which the application of a fine is in disputed when there are no export duties remain ongoing, in which case the fine provided for in Article 954 subsection c) would be applied, which figure amounts to 450 as of the date of these condensed interim consolidated financial statements.

30. CONTRACTUAL COMMITMENTS

Contractual commitments are described in Note 29 to the annual consolidated financial statements. Updates for the three-month period ended March 31, 2017 are described below:

30.a) Concession extension agreements

• Salta

On April 3, 2017, YPF entered into with the Province of Salta an Amendment Agreement to the one signed on October 23, 2012. The signatories are the same in both Agreements. The Amendment Agreement sets forth that the obligations described in items (i), (ii) and (iv) mentioned in the annual consolidated financial statements have been complied with, and in respect of the obligations referenced in item (v), it sets forth that the same will be replaced by the drilling of 2 development wells for a minimum amount of US$ 26 million. In case the development wells yield satisfactory productive results for YPF and associated companies, and contingent on such results, the parties agreed to drill an additional development well. Execution of this commitment shall be initiated within 90 days of the effective date of the Amendment Agreement, subject to the availability of equipment and the issuance of permits, and shall be finished within 365 calendar days as from the same date. Likewise, YPF and signatory associated companies shall drill an exploration well for an amount of US$ 4 million within 365 calendar days as from the effective date of the Amendment Agreement.

YPF SOCIEDAD ANONIMA

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF MARCH 31, 2017 AND COMPARATIVE INFORMATION

30. CONTRACTUAL COMMITMENTS (Cont.)

30.b) Investment project agreements

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

In relation to the Investment Agreement entered into between the Company and subsidiaries of Chevron Corporation for the joint exploitation of unconventional hydrocarbons in the province of Neuquen, in the Loma Campana area, for the three-month period ended March 31, 2017, the Company and Compañía de Hidrocarburo No Convencional S.R.L. (“CHNC”) have carried out transactions which include the purchase of gas and crude oil by YPF for 1,044. These transactions were executed based on the market’s general and regulatory framework. The net balance to be paid to CHNC as of March 31, 2017 amounts to 280.

• Agreement for interest assignment in Aguada de la Arena area

On February 23, 2017, YPF and Petrouruguay S.A. signed a definitive agreement for the transfer of a 20% participating interest in the Aguada de la Arena area located in the province of Neuquén, for a total of US$ 18 million. As a result, YPF has increased its participating interest in the Aguada de la Arena area to 100%.

• Agreement for the development of Bajada de Añelo area

On February 23, 2017, YPF and O&G Developments Ltd. S.A. (hereinafter “O&G”), an affiliate of Shell Compañía Argentina de Petróleo S.A., executed an agreement through which YPF and O&G agreed on the principal terms and conditions for the joint development of a shale oil and shale gas pilot in two phases, for a joint investment amount of US$ 305.8 million plus VAT, in the Bajada de Añelo area in the province of Neuquén, of which O&G will contribute 97.6% and YPF will contribute 2.4%. O&G will be the operator of the area. The agreement provides for a period of exclusivity for the negotiation and execution of definitive agreements. Once definitive agreements have been signed and certain conditions precedent have been fulfilled, including the relevant regulatory approval of the province of Neuquén authorities, the execution of the project will begin, through which O&G will acquire a 50% participating interest in the exploitation concession that covers an area of 204 km2.

31. MAIN REGULATIONS AND OTHERS

Main regulations and others are described in Note 30 to the annual consolidated financial statements. Updates for the three-month period ended March 31, 2017 are described below:

31.a) Incentive programs for the production of natural gas

• Incentive program for investment in development of natural gas production from non-conventional reservoirs

On March 6, 2017, MINEM Resolution No. 46-E/2017 was published in the Official Gazette, which created the “Investment in Natural Gas Production from Non-Conventional Reservoirs Stimulus Program” (hereinafter the “Program”), established in order to stimulate investments in natural gas from non-conventional reservoirs in the Neuquina basin, and in effect as of its publication until December 31, 2021.

The Resolution establishes compensation for the volume of non-conventional gas production from concessions located in the Neuquina basin included in the Program, for which such concessions must first have a specific investment plan approved by the province’s application authority and the Secretariat of Hydrocarbon Resources.

YPF SOCIEDAD ANONIMA

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF MARCH 31, 2017 AND COMPARATIVE INFORMATION

31. MAIN REGULATIONS AND OTHERS (Cont.)

The compensation will be determined by deducting from the effective sales price obtained from sales to the internal market, including conventional and non-conventional natural gas, the minimum sales prices established by the Resolution each year, multiplied by the volumes of production of non-conventional natural gas. The minimum prices established by the Resolution are US$ 7.50 /MMBtu for 2018, US$ 7.00 /MMBtu for 2019, US$ 6.50 /MMBtu for 2020 and US$ 6.00/MMBtu for 2021.

The compensation from the Program will be distributed, for each concession included in the Program, as follows: 88% to the companies and 12% to the province corresponding to each concession included in the Program.

31.b) Regulatory requirements applicable to the natural gas industry

•	Tariff renegotiation

i.	Transitional Agreement 2017

On March 30, 2017, Metrogas signed a Transitional Agreement (“Transitional Agreement 2017”) with MINEM and the Ministry of Economy which provides for the temporary price and tariff adjustment to the Natural Gas Distribution Public Service, the specific allocation of the amounts set forth therein until the execution of the Memorandum of Agreement for the Comprehensive Contractual Renegotiation and the effective application of the final tariff schemes which result from the General Tariff Review. The Temporary Agreement 2017 is supplemental to the agreement approved by Decree No. 234 dated March 26, 2009, which extends the one approved by Decree No. 445 dated April 1, 2014 and the Transitional Agreement 2016.

The Transitional Agreement 2017, which is not subject to ratification by the National Executive Power, sets forth a temporary tariff scheme as of April 1, 2017 consisting of the readjustment of tariffs pursuant to the necessary guidelines to maintain the continuity of service in order to allow the licensee to manage its operation, maintenance, management and commercialization expenses, the disbursements corresponding to the execution of the mandatory investment plan determined by ENARGAS and to comply with the respective payment obligations, keeping its payment procedure for the purpose of ensuring the continued normal provision of the public service it is responsible for until the effective date of the tariff scheme that derives from the Memorandum of Agreement for the Comprehensive Contractual Renegotiation.

Additionally, the Transitional Agreement 2017 incorporates a Mandatory Investment Plan led by Metrogas.

Finally, Metrogas may not distribute dividends without prior accreditation before the ENARGAS of its comprehensive compliance with the Mandatory Investment Plan.

On March 30, 2017, the MINEM instructed the ENARGAS, by means of Resolution No. 74 - E/2017, to make effective the tariff schemes resulting from the General Tariff Review stated in Article 1 of the MINEM Resolution No. 31 dated March 29, 2016 and carried out as per the provisions in the Memorandum of Agreement for the Comprehensive Contractual Renegotiation entered into with the licensees within the provisions of Law No. 25,561, as amended and supplemented.

In this sense, for the purpose of the gradual and progressive implementation of such measure, it established that the ENARGAS should apply the tariff increases resulting from the Comprehensive Tariff Review in stages according to the following progression: thirty percent (30%) of the increase, as from April 1, 2017; forty percent (40%) of the increase, as from December 1, 2017; and the remaining thirty percent (30%), as from April 1, 2018.

Moreover, and for the cases in which the corresponding Memorandum of Agreement for the Comprehensive Contractual Renegotiation had not become effective, it instructed the ENARGAS to apply to the licensees (among them, Metrogas) a transitional tariff adjustment on account of the Comprehensive Tariff Review.

YPF SOCIEDAD ANONIMA

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF MARCH 31, 2017 AND COMPARATIVE INFORMATION

31. MAIN REGULATIONS AND OTHER (Cont.)

Under the terms of the Transitional Agreement 2017, on March 31, 2017, ENARGAS Resolution No. 4,356/2017 was published in the Official Gazette, whereby the tariff schemes resulting from the Metrogas General Tariff Review and temporary tariff schemes applicable to Metrogas users became effective as of April 1, 2017. By means of differential tariffs, ENARGAS Resolution No. 4,356/2017 determined tariff schemes for those residential users who showed a saving in their consumption equal to or higher than 15% as compared with the same period of year 2015, as well as those which would be applicable to beneficiaries of the “Social Tariff” (MINEM Resolution No. 28/2016 and ENARGAS Resolutions No. I-2,905/2014 and No. 3,784/2016) and the Public Welfare Entities (Law No. 27,218). The tariff schemes corresponding to the “Social Tariff” beneficiaries were rectified by ENARGAS Resolution No. 4,369/2017. Invoicing resulting from the application of the new temporary tariff schemes must comply with the limits set forth in Article 10 of MINEM Resolution No. 212/2016, which are in accordance with the criteria of ENARGAS Resolution No. I-4,044/2016.

Additionally, ENARGAS Resolution No. 4,356/2017 superseded ENARGAS Resolutions No. I-2,407/12 and No. I-3,249/15, which allowed the collection of a fixed amount per invoice under the “FOCEGAS” operation.

Finally, ENARGAS Resolution No. 4,356/2017 approved the Semiannual Adjustment Methodology attached as Annex V and which will become effective jointly with the Memorandum of Agreement for the License Adjustment.

ii. Memorandum of Agreement for the Natural Gas Distribution License Contract

On March 30, 2017, Metrogas signed a Memorandum of Agreement for the Natural Gas Distribution License Contract Adjustment with MINEM and the Ministry of Economy. In the terms provided therein, a number of guidelines were established which shall contemplate the General Tariff Review process (non-automatic mechanisms for the adjustment of the distribution tariff among five-year tariff reviews, criteria for determining the capital base and the rate of return to apply, fees and charges, investment plan, etc.) and, subject to the effective application of the Memorandum of Agreement, it sets forth the suspension and withdrawal of all claims, appeals and lawsuits filed, pending or in the process of execution, whether in administrative, arbitration or judicial venues, in the Argentine Republic or abroad, which are based on or related to the facts or measures taken, regarding the License Contract, as from the Emergency Law and/or the annulment of the PPI (Producer Price Index of the United States of America).

For the effective implementation of the Memorandum of Agreement, this must be ratified by Metrogas Shareholders’ Meeting, in order for the National Executive Power to issue the ratifying Decree of the terms of the Memorandum of Agreement.

The Memorandum of Agreement also states that Metrogas shall commit to make, during the extension term of the license, plus its eventual ten-year extension and within the license area, additional sustainable investments equivalent to the amount of the award granted in the “BG Group Plc. vs. The Argentine Republic (UNC 54 KGA)” arbitration with the proportional percentage that had been established in the payment agreement and excluding the amounts corresponding to interest for a delay in the payment of the award. The plan of additional investments will be determined by ENARGAS at the Company’s proposal, and they shall not be incorporated into the tariff base.

iii. Supplementary Agreement with Natural Gas Producers

By means of Resolution No. 74 – E/2017, MINEM determined the new prices at the Entry Point to the Transportation System for natural gas which shall be applicable as of April 1, 2017 to the user categories therein indicated. Likewise, it determined the new discounted prices at the Entry Point to the Transportation System for residential users of natural gas that show savings in consumption equal to or higher than fifteen percent (15%) as compared to the same period of year 2015. These new prices at the Entry Point to the Transportation System have been contemplated in ENARGAS Resolution No. 4,356/2017.

• Note from ENARGAS referred to the participation of YPF in Metrogas

On March 30, 2017, YPF filed for reconsideration and requested to render the note null and void and to issue a new decision that sets a reasonable and consistent term with the current reality of the gas market to comply with the provisions of Article 34 of Law No. 24,076.

YPF SOCIEDAD ANONIMA

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF MARCH 31, 2017 AND COMPARATIVE INFORMATION

31. MAIN REGULATIONS AND OTHER (Cont.)

• CNV Regulatory Framework

a) CNV General Resolution No. 622

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


Exhibit A – Fixed Assets		Note 9 Property, plant and equipment

Exhibit B – Intangible assets		Note 8 Intangible assets

Exhibit C – Investments in companies		Note 10 Investments in associates and joint ventures

Exhibit D – Other investments		Note 7 Financial instruments by category

Exhibit E – Provisions		Note 13 Trade receivables Note 12 Other receivables Note 10 Investments in associates and joint ventures Note 9 Property, plant and equipment Note 15 Provisions

Exhibit F – Cost of goods sold and services rendered		Note 21 Costs

Exhibit G – Assets and liabilities in foreign currency		Note 34 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 8,522,815 Class B Units of Compass Ahorro Mutual Fund with 24-hour settlement upon redemption, the total value of the Company’s Units as of March 31, 2017, amounts to 19.

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.

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

32. 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 March 31, 2017 and December 31, 2016 and transactions with the mentioned parties for the three-month periods ended March 31, 2017 and 2016.

YPF SOCIEDAD ANONIMA

NOTES TO THE CONDENSED FINANCIAL STATEMENTS

AS OF MARCH 31, 2017 AND COMPARATIVE INFORMATION

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


	March 31, 2017						December 31, 2016
	Other receivables		Trade receivables		Accounts payable		Other receivables		Trade receivables		Accounts payable
	Current		Current		Current		Current		Current		Current
Joint ventures:
Profertil		97		204		63		97		162		99
MEGA		—		839		87		—		797		80
Refinor		—		158		35		—		296		39
Bizoy S.A.		5		—		—		9		—		—
Y-GEN I		16		1		—		—		2		—

		118		1,202		185		106		1,257		218

Associates:
CDS		—		111		—		—		108		—
YPF Gas		44		495		17		35		375		35
Oldelval		—		—		67		—		—		81
Termap		—		—		41		—		—		44
OTA		—		—		4		—		—		5
OTC		2		—		—		2		—		—
Gasoducto del Pacífico (Argentina) S.A.		4		—		30		4		—		31
Oiltanking Ebytem S.A.		—		—		51		—		—		50
Emp. Perforaciones de Argentina S.A.		2		—		—		—		—		—

		52		606		210		41		483		246

		170		1,808		395		147		1,740		464


	For the three-month periods ended on March 31,
	2017				2016
	Revenues		Purchases and services		Revenues		Purchases and services
Joint ventures:
Profertil		234		79		283		77
MEGA		1,051		99		556		120
Refinor		190		83		340		37
Y-GEN I		17		—		—		—

		1,492		261		1,179		234

Associates:
CDS		25		—		230		—
YPF Gas		160		11		98		8
Oldelval		—		97		—		93
Termap		—		90		—		83
OTA		—		6		—		6
Gasoducto del Pacífico (Argentina) S.A.		—		46		—		42
Oiltanking Ebytem S.A.		—		93		—		93

		185		343		328		325

		1,677		604		1,507		559

YPF SOCIEDAD ANONIMA

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF MARCH 31, 2017 AND COMPARATIVE INFORMATION

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

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


		Balances						Transactions
		Credits / (Liabilities)						Income / (Costs)
								For the three-month periods ended March 31,
Customers / Suppliers	Ref.	March 31, 2017			December 31, 2016			2017			2016
CAMMESA	(1)		3,506			3,782			4,977			5,052
CAMMESA	(2)		(82	)		(170	)		(486	)		(446	)
ENARSA	(3)		716			727			604			477
ENARSA	(4)		(1,312	)		(1,357	)		(28	)		(35	)
Aerolíneas Argentinas S.A. and Austral Líneas Aéreas Cielos del Sur S.A.	(5)		414			364			988			642
Aerolíneas Argentinas S.A. and Austral Líneas Aéreas Cielos del Sur S.A.	(6)		(4	)		(2	)		(4	)		—
MINEM	(7)		9,199			10,881			1,857			5,230
MINEM	(8)		113			129			19			11
MINEM	(9)		110			142			26			25
Ministry of Transport	(10)		1,417			1,152			1,240			1,053
Secretariat of Industry	(11)		—			378			—			28

(1)	The provision of fuel oil and natural gas, and electric power generation.

(2)	Purchases of energy.

(3)	Rendering of regasification service in the regasification projects of liquefied natural gas in Escobar and Bahía Blanca.

(4)	The purchase of natural gas and crude oil.

(5)	The provision of jet fuel.

(6)	The purchase of miles for the YPF Serviclub program.

(7)	The benefits of the incentive scheme for the Additional Injection of natural gas.

(8)	Benefits for the propane gas supply agreement for undiluted propane gas distribution networks.

(9)	Benefits for the bottle-to-bottle program.

(10)	The compensation for providing gas oil to public transport of passengers at a differential price.

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

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 17 of these 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 28.a) to the annual consolidated financial statements.

In addition, the Group holds BONAR 2020 (see Note 30.h) to the annual consolidated financial statements and 2021 (see Note 4 to the annual consolidated financial statements), classified as “Investments in financial assets”.

Furthermore, in relation to the investment agreement signed between YPF and Chevron subsidiaries, YPF has an indirect non-controlling interest in CHNC with which YPF carries out transactions in connection with the above mentioned investment agreement. See Note 30.b).

YPF SOCIEDAD ANONIMA

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF MARCH 31, 2017 AND COMPARATIVE INFORMATION

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

The table below discloses the compensation for the Company’s key management personnel, including members of the Board of Directors and vice presidents (managers with executive functions appointed by the Board of Directors), for the three-month periods ended March 31, 2017 and 2016:


	For the three-month periods ended March 31,
	2017⁽¹⁾		2016⁽¹⁾
Short-term employee benefits ⁽²⁾		56		42
Share-based benefits		10		9
Post-retirement benefits		2		2

		68		53

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

(2)	Does not include Social Security contributions of 11 and 9 for the three-month periods ended March 31, 2017 and 2016.

33. EMPLOYEE BENEFIT PLANS AND SHARE-BASED PAYMENTS

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

i.	Retirement plan

The total charges recognized under the Retirement Plan amounted to approximately 18 and 22 for the three-month periods ended March 31, 2017 and 2016, respectively.

ii.	Performance Bonus Programs and Performance evaluation

The amount charged to expense related to the Performance Bonus Programs was 446 and 320 for the three-month periods ended March 31, 2017 and 2016, respectively.

iii.	Share-based benefit plan

The amount charged to expense in relation with the share-based plans, which are disclosed according to their nature, amounted to 26 and 40 for the three-month periods ended March 31, 2017 and 2016, respectively.

YPF SOCIEDAD ANONIMA

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF MARCH 31, 2017 AND COMPARATIVE INFORMATION

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


	March 31, 2017						December 31, 2016
	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
U.S. Dollar		60		15.29		917		169			15.79		2,669
Real		10		4.82		48		10			4.84		48
Trade receivables
U.S. Dollar		2		15.29		31		—			—		—
Investments in financial assets U.S. Dollar		478		15.29		7,315		490			15.79		7,737

Total noncurrent assets						8,311							10,454

Current assets
Trade receivables
U.S. Dollar		371		15.29		5,673		397			15.79		6,269
Chilean peso		7,365		0.02		147		10,542			0.02		211
Real		23		4.82		111		23			4.84		111
Other receivables
U.S. Dollar		189		15.29		2,890		349			15.79		5,511
Euro		8		16.31		130		15			16.63		249
Real		5		4.82		24		4			4.84		19
Chilean peso		2,277		0.02		46		—			—		—
Swiss franc		1		15.26		15		—			—		—
Investments in financial assets U.S. Dollar		493		15.29		7,532		478			15.79		7,548
Cash and cash equivalents
U.S. Dollar		288		15.29		4,404		414			15.79		6,537
Chilean peso		563		0.02		11		240			0.02		5
Real		4		4.82		19		2			4.84		10
Swiss franc		—		—		—		—	⁽²⁾		15.52		6

Total current assets						21,002							26,476

Total assets						29,313							36,930

Noncurrent liabilities
Provisions
U.S. Dollar		3,008		15.39		46,293		2,675			15.89		42,506
Real		1		4.84		5		—			—		—
Loans
U.S. Dollar		5,727		15.39		88,141		5,741			15.89		91,222
Real		12		4.84		58		13			4.88		63
Swiss franc		299		15.38		4,595		300			15.57		4,673
Other liabilities
U.S. Dollar		21		15.39		319		21			15.89		334
Accounts payable
U.S. Dollar		12		15.39		185		133			15.89		2,113
Real		13		4.84		63		—			—		—

Total noncurrent liabilities						139,659							140,911

Current liabilities
Provisions
U.S. Dollar		50		15.39		770		45			15.89		715
Taxes payable
Real		6		4.84		29		5			4.88		24
Chilean peso		1,123		0.02		22		1,055			0.02		21
Loans
U.S. Dollar		989		15.39		15,218		1,054			15.89		16,754
Real		37		4.84		179		17			4.88		82
Swiss franc		6		15.38		88		3			15.57		45
Salaries and social security
U.S. Dollar		7		15.39		108		6			15.89		96
Real		1		4.84		5		2			4.88		10
Chilean peso		403		0.02		8		501			0.02		10
Other liabilities
U.S. Dollar		30		15.39		462		275			15.89		4,371
Accounts payable
U.S. Dollar		898		15.39		13,820		1,197			15.89		19,020
Euro		40		16.46		658		15			16.77		252
Chilean peso		2,568		0.02		51		4,915			0.02		98
Real		—		—		—		9			4.88		44
Swiss franc		—		—		—		—	⁽²⁾		15.57		3
Yen		31		0.14		4		—			—		—

Total current liabilities						31,422							41,545

Total liabilities						171,081							182,456

(1)	Exchange rate in force at March 31, 2017 and December 31, 2016 according to Banco Nación Argentina.

(2)	Registered value less than 1.

YPF SOCIEDAD ANONIMA

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF MARCH 31, 2017 AND COMPARATIVE INFORMATION

35. SUBSEQUENT EVENTS

• Bandurria Sur Area Development Agreement

On April 12, 2017, YPF executed an agreement (hereinafter the “Agreement”) with Schlumberger Oilfield Eastern Ltd. (hereinafter “SPM”), an affiliate of Schlumberger Argentina S.A., through which YPF and SPM agreed on the main terms and conditions for the joint development of a shale oil pilot project in two phases, with a total investment of US$ 390 million plus VAT in the Bandurria Sur area (hereinafter the “Area”), located in the Province of Neuquén, 100% of which will be contributed by SPM. YPF will continue as the Area operator. The Agreement provides for an exclusivity period to negotiate and execute definitive agreements. Once definitive agreements have been signed and conditions precedent have been fulfilled, SPM will acquire a 49% stake in the unconventional exploitation concession of the Area, and YPF will keep the remaining 51%.

• Bloque Llancanelo Interest Assignment Agreement

On April 18, 2017, YPF executed an agreement with Patagonia Oil Corp. (“Patagonia”), an affiliate of PentaNova Energy Corp., through which Patagonia will acquire YPF’s 11% interest in the block known as Bloque Llancanelo, located in the Province of Mendoza, for a total price of US$ 40 million (hereinafter the “Price”), and YPF will keep a 50% stake in such block. Additionally, both companies agreed on the main terms and conditions for the development of a pilot project of heavy crude oil in the same block with a total investment of US$ 54 million over the next 36 months (hereinafter the “Project”), where YPF will be the operator and Patagonia will contribute its expertise in heavy crude oil. The project investment corresponding to YPF’s stake shall be paid by Patagonia by way of partial payment of the Price. The agreement provides for an exclusivity term to negotiate and execute definitive agreements. Once definitive agreements have been signed and certain conditions precedent have been fulfilled, including the relevant approval by the Province of Mendoza, the execution of the Project will begin.

• Issuance of negotiable obligations

In May 2017, the Company is in the process of issuing Series LII negotiable obligations for an amount of 4,602 to be paid in U.S. Dollars. Series LII negotiable obligations will accrue interest at a fixed nominal annual rate of 16.50% due every six months, and maturity of the principal will take place in 2022.

As of the date of issuance of these condensed interim consolidated financial statements, there have been no further significant subsequent events that require adjustments or disclosure in the financial statements of the Company as of March 31, 2017, which were not already considered in such condensed interim consolidated financial statements in accordance with IFRS.

MIGUEL ANGEL GUTIERREZ

President

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.