Form 6-K
Table of Contents

 

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, 2005

 

       

  
  
           

Total 2004

   34,196    (1 )         565    34,760          18,672     19,141       
  
       
  
        
 

 

(1) Includes 14 of net book value charged to fixed assets allowances for the three-month period ended March 31, 2005.

 

(2) Depreciation has been calculated according to the unit of production method (Note 2.f).

 

(3) Includes 2 and 8 corresponding to the future costs of hydrocarbon wells abandonment obligations for the three-month periods ended March 31, 2005 and 2004, respectively.

 

(4) Includes 1,311, 1,444 and 1,346 of mineral property as of March 31, 2005 and 2004 and December 31, 2004, respectively.

 

 

         

ENRIQUE LOCUTURA RUPEREZ

Executive Vicepresident

           

Table of Contents

YPF Sociedad Anónima

 

TABLE OF CONTENTS

 

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46

 

Exhibit C

 

English translation of the financial statements originally issued in Spanish, except for the inclusion of Note 12 in the English translation

 

YPF SOCIEDAD ANONIMA

 

BALANCE SHEETS AS OF MARCH 31, 2005 AND DECEMBER 31, 2004

INVESTMENTS IN SHARES AND HOLDINGS IN OTHER COMPANIES

 

(amounts expressed in millions of Argentine pesos, except where otherwise indicated - Note 1)

(The financial statements as of March 31, 2005 and March 31, 2004 are unaudited)

 

    2005
     2004
  
                          Information of the Issuer
        
    Description of the Securities
                     Last Financial Statements Issued
              

Name and Issuer

   Class
   Face
Value
   Amount
   Book
Value
     Cost
   Main Business
  

Registered Address

   Date
   Capital
Stock
  

Item

     
1   

Limited Review Report on Interim Period Financial Statements.

2   

Financial Statements as of March 31, 2005 and Comparative Information.

3   

Statutory Audit Committee’s Report.

 

Table of Contents

LOGO

 

SOCIEDAD ANONIMA

 

Financial Statements as of March 31, 2005 and Comparative Information

 

Limited Review Report on Interim Period Financial Statements

 

Statutory Audit Committee’s Report

 

Table of Contents

Item 1

 

English translation of the report originally issued in Spanish, except for the omission of certain disclosures related to formal legal requirements for reporting in Argentina and the addition of the last paragraph – See Note 12 to the primary financial statements

 

Limited Review Report on Interim

Period Financial Statements

 

To the Board of Directors of YPF SOCIEDAD ANONIMA:

 

1. We have reviewed the balance sheet of YPF SOCIEDAD ANONIMA (an Argentine Corporation) as of March 31, 2005, and the related statements of income, changes in shareholders’ equity and cash flows for the three-month period then ended. We have also reviewed the consolidated balance sheet of YPF SOCIEDAD ANONIMA and its controlled and jointly controlled companies as of March 31, 2005, and the related consolidated statemeD>   Income
(loss)
     Equity
     Holding
in
Capital
Stock
     Book
Value
  

Controlled companies:

                                                                  

YPF International S.A.

   Common   Bs. 100   147,695   302  

2. We conducted our review in accordance with generally accepted auditing standards in Argentina for a review of interim period financial statements. A review consists principally of applying analytical procedures to financial data and making inquiries of persons responsible for accounting and financial matters. A review is substantially less in scope than an audit of financial statements, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

 

3. Based on our review, we are not aware of any material modification that should be made to the financial statements referred to in the first paragraph for them to be in conformity with generally accepted accounting principles in Buenos Aires City, Argentina.

 

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2

 

4. In relation to the financial statements as of December 31, 2004 and March 31, 2004, which are presented for comparative purposes, we issued our unqualified auditors’ report dated March 10, 2005, and our unqualified limited review report on interim period financial statements dated May 6, 2004, respecTimes New Roman" SIZE="1">(3)   1,392   Investment   Av. José Estenssoro 100, Santa Cruz de la Sierra, República de Bolivia   12/31/04   —   (2)   (34 )   299     99.99 %   429  

YPF Holdings Inc.

   Common   US$ 0.01   100   —   (7)   421   Investment
and finance		   717 North Harwood Street, Dallas, Texas, U.S.A.   12/31/04   1,565     (403 )   (265

 

The financial statements as of March 31, 2004, presented for comparative purposes, include the restatement related to the disclosure of discontinued operation as mentioned in Note 1.c to the accompanying consolidated financial statements.

 

5. Certain accounting practices of YPF SOCIEDAD ANONIMA used in preparing the accompanying financial statements conform with generally accepted accounting principles in Buenos Aires City, Argentina, but do not conform with generally accepted accounting principles in the United States of America (see Note 12 to the accompanying financial statements).

 

Buenos Aires, Argentina

May 6, 2005

 

Deloitte & Co. S.R.L.

 

Ricardo C. Ruiz

Partner

Table of Contents

Item 2

 

YPF SOCIEDAD ANONIMA

 

FINANCIAL STATEMENTS AS OF MARCH 31, 2005 AND COMPARATIVE INFORMATION

 

INDEX

 

          Page

-  Cover

    1

-  Consolidated balance sheets

    2

-  Consolidated statements of income

    3

-  Consolidated statements of cash flows

    4

-  Notes to consolidated financial statements

    5

-  Exhibits to consolidated financial statements

    17

-  Balance sheets

    19

-  Statements of income

    20

-  Statements of changes in shareholders’ equity

    21

-  Statements of cash flows

    22
)   100.00 %   —   (7)

Operadora de Estaciones de Servicios S.A.

   Common   $ 1   11,880   263     258   Commercial
management
of YPF's gas
stations		   Av. Roque Sáenz Peña 777, Buenos Aires, Argentina   03/31/05   244     6     263     99.99 %   258  

A-Evangelista S.A.

   Common   $ 1   8,683,498   41     31   Engineering
and
construction
services		   Tucumán 744, P. 12°, Buenos Aires, Argentina   03/31/05   9     (7 )   41     99.91 %   53  

Argentina Private Development Company Limited (in liquidation)

   Common   US$ 0.01   769,414   44     84   Investment
and finance		   P.O. Box 1109, Gran Caimán, British West Indies   12/31/01   —   (2)  

-  Notes to financial statements

    23

-  Exhibits to financial statements

    45

 

Table of Contents

1

 

English translation of the financial statements originally issued in Spanish, except for the inclusion of Note 12 to the primary financial statements in the English translation

 

YPF SOCIEDAD ANONIMA

 

Avenida Presidente Roque Sáenz Peña 777 – Buenos Aires City, Argentina

 

FISCAL YEARS NUMBER 29 AND 28

 

BEGINNING ON JANUARY 1, 2005 AND 2004

 

FINANCIAL STATEMENTS AS OF MARCH 31, 2005 AND COMPARATIVE INFORMATION

 

(The financial statements as of March 31, 2005 and March 31, 2004 are unaudited)

 

Principal business of the Company: exploration, development and production of oil and natural gas and other minerals and refining, transportation, marketing and distribution of oil and petroleum products and petroleum derivatives, including petrochemicals and chemicals, generation of electric power from hydrocarbons, as well as rendering telecommunications services.

 

Date of registration with the Public Commerce Register: June 2, 1977.

 

Duration of the Company: through June 15, 2093.

 

Last amendment to the bylaws: April 19, 2005 (pending registration).

 

Optional Statutory Regime related to Compulsory Tender Offer provided by Decree No. 677/2001 art. 24 not incorporated.

 

Capital structure as of March 31, 2005

 

(expressed in Argentine pesos)

 

    

Subscribed, paid-in and
authorized for stock
exchange listing

(Note 4 to primary
financial statements)

- Shares of Common Stock, Argentine pesos 10 par value, 1 vote per share

    3,933,127,930
    

 

         

ENRIQUE LOCUTURA RUPEREZ

Executive Vicepresident

           

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2

 

Schedule I

1 of 3 ZE="1">3

     44     100.00 %   44  
                 
 
                                     
                  650     2,186                                       784  
                 
 
                                     

Jointly controlled companies:

                                      

English translation of the financial statements originally issued in Spanish, except for the inclusion of Note 12 to the primary financial statements in the English translation

 

YPF SOCIEDAD ANONIMA AND CONTROLLED AND JOINTLY CONTROLLED COMPANIES

 

CONSOLIDATED BALANCE SHEETS AS OF MARCH 31, 2005 AND DECEMBER 31, 2004

 

(amounts expressed in millions of Argentine pesos - Note 1 to the primary financial statements)

(The financial statements as of March 31, 2005 and March 31, 2004 are unaudited)

 

     2005
     2004
  

Current Assets

             

Cash

    414     492  

Investments (Note 2.a)

    718     408  

Trade receivables (Note 2.b)

    1,892     2,049  

Other receivables (Note 2.c)

    5,023     3,871  

Inventories (Note 2.d)

    1,181     1,134  

Other assets

    167     380  
    
 

Total current assets

    9,395     8,334  
   &nom">                             

Compañía Mega S.A.(6)

   Common   $ 1   77,292,000   447     169   Separation,
fractionation
and
transportation
of natural gas
liquids		   Av. Roque Sáenz Peña 777, P. 7°, Buenos Aires, Argentina   12/31/04   203     351     1,125     38.00 %   427  

Petroken Petroquímica Ensenada S.A.

   Common   $ 1   40,602,826   —   (8)   88   Petrochemicals   Sarmiento 1230, P. 6°, Buenos Aires, Argentina   12/31/04   81     89     381     50.00 %   —   (8)

Profertil S.A.

   Common   $ 1   1,000,000   469     341   Production and
marketing of
fertilizers		   Alicia Moreau de Justo 750, P. 1°, Of. 11, Buenos Aires, Argentina   12/31/04  
 

Noncurrent Assets

             

Trade receivables (Note 2.b)

    69     72  

Other receivables (Note 2.c)

    1,392     1,457  

Investments (Note 2.a)

    480     490  

Fixed assets (Note 2.e)

    20,466     20,554  

Intangible assets

    13     15  
    
 

Total noncurrent assets

    22,420     22,588  
    
 

Total assets

    31,815     30,922  
    
 

Current Liabilities

             

Accounts payable (Note 2.f)

    2     322     1,039     50.00 %   479  

Refinería del Norte S.A.

   Common   $ 1   45,803,655   190     39   Refining   Maipú 1, P. 2º, Buenos Aires, Argentina   09/30/04   92     99     389     50.00 %   169  
                 
 
                                     
                  1,106     637                                       1,075  
  1,884     2,025  

Loans (Note 2.g)

    324     246  

Salaries and social security

    99     121  

Taxes payable

    2,165     1,999  

Net advances from crude oil purchasers

    266     264  

Reserves

    130     130  
    
 

Total current liabilities

    4,868     4,785  
    
 

Noncurrent Liabilities

             

Accounts payable (Note 2.f)

    925     854  

Loans (Note 2.g)

    1,325     1,684  

Salaries and social security

    68     68                
 
                                     

Companies under significant influence:

                                                                  

Oleoductos del Valle S.A.

   Common   $ 10   4,072,749   107 (1)   23   Oil
transportation
by pipeline		   Florida 1, P. 10°, Buenos Aires, Argentina   12/31/04   110     30     349     37.00 %   105  

Terminales Marítimas Patagónicas S.A.

   Common   $ 10   476,034   48     —     Oil storage
and shipment		   Av. Leandro N. Alem 1180, P.11°, Buenos Aires, Argentina  

Taxes payable

    24     23  

Net advances from crude oil purchasers

    555     634  

Reserves

    885     898  
    
 

Total noncurrent liabilities

    3,782     4,161  
    
 

Total liabilities

    8,650     8,946  

Temporary differences

             

Foreign companies’ translation

    (113 )   (107 )

Valuation of derivative instruments

    (3 )   (4 )

Shareholders’ Equity

    23,281     22,087  
    
 

Total liabilities, temporary differences and shareholders’ equity

    31,815       12/31/04   14     18     143     33.15 %   47  

Oiltanking Ebytem S.A.

   Common   $ 10   351,167   36     7   Hydrocarbon
transportation
and storage		   Alicia Moreau de Justo 872, P. 4°, Of. 7 , Buenos Aires, Argentina   12/31/04   12     6     121     30.00 %   36  

Gasoducto del Pacífico (Argentina) S.A.

   Preferred   $ 1   12,298,800   18     13   Gas
transportation
by pipeline		   San Martín 323, P. 19°, Buenos Aires, Argentina   12/31/04   7     23     180     10.00 %   26  

Central Dock Sud S.A.

   Common   $ 0.01   3,847,189,961   16 (3)   46   bottom">30,922  
    
 

 

Notes 1 to 4 and the accompanying exhibits A and H to Schedule I and the primary financial statements

of YPF, are an integral part of and should be read in conjunction with these statements.

 

         

ENRIQUE LOCUTURA RUPEREZ

Executive Vicepresident

           

Table of Contents

3

 

Schedule I

2 of 3

 

English translation of the financial statements originally issued in Spanish, except for the inclusion of Note 12 to the primary financial statements in the English translation

 

YPF SOCIEDAD ANONIMA AND CONTROLLED AND JOINTLY CONTROLLED COMPANIES

 

CONSOLIDATED STATEMENTS OF INCOME

 

FOR THE THREE-MONTH PERIODS ENDED MARCH 31, 2005 AND 2004

 

(amounts expressed in millions of Argentine pesos, except for per share amounts in Argentine pesos - Note 1 to the primary financial statements)

(The financial statements as of March 31, 2005 and March 31, 2004 are unaudited)

 

ONT FACE="Times New Roman" SIZE="1">  <
     2005
     2004
  

Net sales (Note 4)

    5,387     4,564  

Cost of sales

    (2,562 )   (2,054 )
    
 

Gross profit

    2,825     2,510  
Electric power
generation and
bulk marketing		   Reconquista 360, P. 6°, Buenos Aires, Argentina   12/31/04   484     (2 )   279     9.98 %(5)   21 (5)

Gas Argentino S.A.

   Common   $ 1   104,438,182   98     338   Investment in
MetroGas S.A.		   Gregorio Araoz de Lamadrid 1360, Buenos Aires, Argentina   12/31/04   309     (100 )   216     45.33 %   129  

Inversora Dock Sud S.A.

   Common   $ 1   40,291,975   143 (3)   193   Investment
and finance		   Reconquista 360, P. 6°, Buenos Aires, Argentina   12/31/04   94     (20 )   244     42.86 %   150  

Pluspetrol Energy S.A.

   Common   $ 1   30,006,540   257

Administrative expenses (Exhibit H)

    (102 )   (99 )

Selling expenses (Exhibit H)

    (395 )   (310 )

Exploration expenses (Exhibit H)

    (62 )   (136 )
    
 

Operating income

    2,266     1,965  

(Loss) Income on long-term investments (Note 4)

    (5 )   25  
  121   Exploration
and
exploitation of
hydrocarbons
and electric
power
generation,
production and
marketing		   Lima 339, Buenos Aires, Argentina   12/31/04   67     38     572     45.00 %   263  

Oleoducto Trasandino (Argentina) S.A.

   Preferred   $ 1   8,099,280   19     —     Oil
transportation
by pipeline		   Esmeralda 255, P. 5°, Buenos Aires, Argentina   12/31/04   45     (22 )   104     18.00 %   19  

Other companies:

                                                                  

Others (4)

   —       —     —     14     13   —     —  

Other expenses, net (Note 2.h)

    (162 )   (26 )

Financial income (expense), net and holding gains:

             

(Losses) Gains on assets

             

Interests

    49     52  

Exchange differences

    (148 )   (171 )

Holding gains on inventories

    39     41  

(Losses) Gains on liabilities

             

Interests

    (112 )   (55 )

Exchange differences

    67     76  

Income from sale of long-term investments

    75     —    
    
 

Net income before income tax

    2,069     1,907  

Income tax

    (875 )   (817 )  —     —       —       —       —       14  
                 
 
                                     
                  756     754                                       810  
                 
 
                                     
                      
 

Net income from continuing operations

    1,194     1,090  

Income on discontinued operations (Note 1.c)

    —       16  
    
 

Net income

    1,194     1,106  
    
 

Earnings per share

    3.04     2.81  
    
 

 

Notes 1 to 4 and the accompanying exhibits A and H to Schedule I and the primary financial statements

of YPF, are an integral part of and should be read in conjunction with these statements.

 

         

ENRIQUE LOCUTURA RUPEREZ

Executive Vicepresident

           

Table of Contents

4

 

Schedule I

 

3 of 3

 

English translation of the financial statements originally issued in Spanish, except for the inclusion of Note 12 to the primary financial statements in the English translation

 

YPF SOCIEDAD ANONIMA AND CONTROLLED AND JOINTLY CONTROLLED COMPANIES

 

CONSOLIDATED STATEMENTS OF CASH FLOWS

2,512

     3,577                                       2,669  
                 
 
                                     

 

(1) Holding in shareholders’ equity, net of intercompany profits.

 

(2) No value is disclosed, due to book value is less than $ 1 million.

 

(3) Holding in shareholders’ equity plus adjustments to conform to YPF S.A. accounting methods.

 

(4) Includes Enerfin S.A. (in liquidation), A-Evangelista Construções e Serviços Ltda., Gasoducto del Pacífico (Cayman) Ltd., A&C Pipeline Holding Company, Poligás Luján S.A.C.I., Petróleos Transandinos YPF S.A. and Mercobank S.A.

 

(5) Additionally, the Company has a 29.93% 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.

 

FOR THE THREE-MONTH PERIODS ENDED MARCH 31, 2005 AND 2004

 

(amounts expressed in millions of Argentine pesos - Note 1 to the primary financial statements)

(The financial statements as of March 31, 2005 and March 31, 2004 are unaudited)

 

(7) As of March 31, 2005 and December 31, 2004, holding in negative shareholders’ equity is disclosed in “Accounts payable” after adjustments in shareholders’ equity to conform YPF S.A. accounting methods.
     2005
     2004
  

Cash Flows from Operating Activities

             

Net income

    1,194     1,106  

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

             

Loss (Income) on long-term investments

    5     (25 )

Income on discontinued operations

    —       (16 )

Income from sale of long-term investments

    (75 )   —    

Dividends from long-term investments

    —       26  

Depreciation of fixed assets

    640     591  

Consumption of materials and fixed assets retired, net of allowances

    59     116  

Increase in allowances for fixed assets

    6     34  E>

 

(8) As of March 31, 2005 and December 31, 2004, holdings in shareholders’ equity of Petroken Petroquímica Ensenada S.A. are disclosed in “Other assets” account (Note 10).

 

         

ENRIQUE LOCUTURA RUPEREZ

Executive Vicepresident

           

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47

 

Exhibit E

 

English translation of the financial statements originally issued in Spanish, except for the inclusion of Note 12 in the English translation

 

YPF SOCIEDAD ANONIMA

 

BALANCE SHEETS AS OF MARCH 31, 2005 AND 2004

ALLOWANCES AND RESERVES

 

(amounts expressed in millions of Argentine pesos - Note 1)

(The financial statements as of March 31, 2005 and March 31, 2004 are unaudited)

 

Account

    2005
    2004
   Amount at
beginning
of year
    Increases
    Decreases
    Amounts at
end of period
    Amounts at
end of period

Deducted from current assets:

                         

Net decrease in reserves

    (13 )   (30 )

Changes in assets and liabilities:

      For doubtful trade receivables

    347    2    3    346    333

For other doubtful accounts

    122    &"1">       

Trade receivables

    160     (110 )

Other receivables

    (1,134 )   (70 )

Inventories

    (47 )   (43 )

Accounts payable

    (114 )   (127 )

Salaries and social security

    (25 )   (14 )

Taxes payable

    167     799  

Net advances from crude oil purchasers

    (58 )   (63 )

Interests, exchange differences and others

    27     (7 )
    
 

Net cash flows provided by operating activities

    792 (1)   2,167    —      122    128
    
  
  
  
  
     469    2    3    468    461
    
  
  
  
  

Deducted from noncurrent assets:

                         

For valuation of other receivables to their estimated realizable value

    70    —      2    68    77

For reduction in value of holdings in long-term investments

    325    —      43    282    343

For unproductive exploratory drilling

    16    5    13    8    73

For obsolescence and fixed assets to be disposed of

    47    (1)
    
 

Cash Flows from Investing Activities

             

Acquisitions of fixed assets

    (617 )   (545 )

Capital distributions from long-term investments

    —       4  

Proceeds from sale of long-term investments

    285     —    

Investments (non cash and equivalents)

    (1 )   1    1    47    47
    
  
  
  
  
  (1 )
    
 

Net cash flows used in investing activities

    (333 )   (542 )
    
 

Cash Flows from Financing Activities

             

Payment of loans

    (227 )   (620 )
    
 

Cash flows used in financing activities

    (227 )   (620 )
   458    6    59    405    540
    
  
  
  
  

Total deducted from assets, 2005

    927    8    62    873     
    
  
  
  
    

Total deducted from assets, 2004

    939    95    33         1,001
    
  
  
       

Reserves for losses - current:

                         

For miscellaneous contingencies

    67    —      —      67    21
    
  
  
  
  
     67    —      —      67    21
    
    
 

Increase in Cash and Equivalents

    232     1,005  

Cash and equivalents at the beginning of years

    887     1,246  
    
 

Cash and equivalents at the end of periods

    1,119     2,251  
    
 

 

For supplemental information on cash and equivalents, see Note 2.a.

 

(1) Includes (733) and (57) corresponding to income tax payments and (92) and (87) corresponding to interest payments for the three-month periods ended March 31, 2005 and 2004, respectively.

 

Notes 1 to 4 and the accompanying exhibits A and H to Schedule I and the primary financial statements

of YPF, are an integral part of and should be read in conjunction with these statements.

 

ENRIQUE LOCUTURA RUPEREZ
Executive Vicepresident

 

Table of Contents

5

 

Schedule I

 

English translation of the financial statements originally issued in Spanish, except for the inclusion of Note 12 to the primary financial statements in the English translation

 

YPF SOCIEDAD ANONIMA AND CONTROLLED AND JOINTLY CONTROLLED COMPANIES

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE-MONTH PERIOD ENDED MARCH 31, 2005 AND COMPARATIVE INFORMATION

 

(amounts expressed in millions of Argentine pesos - Note 1 to the primary financial statements, except where otherwise indicated)

(The financial statements as of March 31, 2005 and March 31, 2004 are unaudited)

 

1. CONSOLIDATED FINANCIAL STATEMENTS

 

  
   
  
  

Reserves for losses - noncurrent:

                         

For pending lawsuits (Note 9.a)

    541    15    6    550    322

For miscellaneous contingencies

    80    8    16    72    56
    
  
  
  
  
     621    23    22    622    378
    
  
  
  
  

Total included in liabilities, 2005

    688    23    22    689     
    
  
  
  
    

Total included in liabilities, 2004

    402    13    16         399
    
  
a) Consolidation policies:

 

Following the methodology established by Technical Resolution No. 21 of the Argentine Federation of Professional Councils in Economic Sciences (“F.A.C.P.C.E.”), YPF Sociedad Anónima (the “Company” or “YPF”) has consolidated its balance sheets as of March 31, 2005 and December 31, 2004 and the related statements of income and cash flows for the three-month periods ended March 31, 2005 and 2004, as follows:

 

  – Investments and income (loss) related to controlled companies in which YPF has the number of votes necessary to control corporate decisions are substituted for such companies’ assets, liabilities, net revenues, cost, expenses and, if applicable, temporary differences, which are aggregated to the Company’s balances after the elimination of intercompany profits, transactions, balances and other consolidation adjustments. If applicable, minority shareholders’ interest on equity and net income is disclosed separately in the balance sheets and income statements, respectively.

 

  – Investments and income (loss) related to companies in which YPF holds joint control are consolidated line by line on the basis of the Company’s proportionate share in their assets, liabilities, net revenues, cost, expenses and, if applicable, temporary differences, considering intercompany profits, transactions, balances and other consolidation adjustments.

 

Under General Resolution No. 368 from the Argentine Securities Commission (“CNV”), the Company discloses its consolidated financial statements, included in Schedule I, preceding its primary financial statements.

 

b) Financial statements used for consolidation:

 

The consolidated financial statements are based upon the last available financial statements of those companies in which YPF holds control or joint control, taking into consideration, if applicable, significant subsequent events and transactions, available management information and transactions between YPF and the related company, which have produced changes on the latter shareholders’ equity.

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c) Valuation criteria:

 

In addition to the valuation criteria disclosed in the notes to YPF primary financial statements, the following additional valuation criteria have been applied in the preparation of the consolidated financial statements:

 

Income on discontinued operations

 

As mentioned in Note 10 to the primary financial statements, during the second semester of the year ended December 31, 2004, YPF Holdings Inc. and YPF International S.A. sold their interests in Global Companies LLC and affiliates (“Global”) and in YPF Indonesia Ltd., respectively. Financial statements as of March 31, 2004, presented for comparative purposes, were restated to give retroactive effect to the mentioned divestitures. As a consequence, Global and YPF Indonesia Ltd. results were disclosed in “Income on discontinued operations” account of the statement of income. Net sales and operating income of these operations amounted to 1,270 and 18, respectively, for the three-month period ended March 31, 2004.

 

Fixed assets

 

Mineral properties on foreign unproved properties have been valued at cost and translated into pesos as detailed in Note 2.e to the primary financial statements. Capitalized costs related to unproved properties are reviewed periodically by Management to ensure the carrying value does not exceed their estimated recoverable value.

 

Intangible assets

 

Correspond to start up and organization costs, valued at acquisition cost restated as detailed in Note 1 to the primary financial statements, less corresponding accumulated amortization, which is calculated using the straight-line method over its estimated useful life of five years.

 

In Management’s opinion, future activities will generate enough economic benefits to recover incurred costs.

  
       

 

         

ENRIQUE LOCUTURA RUPEREZ

Executive Vicepresident

           

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Exhibit F

 

English translation of the financial statements originally issued in Spanish, except for the inclusion of Note 12 in the English translation

 

YPF SOCIEDAD ANONIMA

 

STATEMENTS OF INCOME FOR THE THREE-MONTH PERIODS ENDED MARCH 31, 2005 AND 2004

COST OF SALES

 

(amounts expressed in millions of Argentine pesos - Note 1)

(The financial statements as of March 31, 2005 and March 31, 2004 are unaudited)

 

     2005
     2004
  

Inventories at beginning of year

    1,005     675  

Purchases for the period

    514     241  

Production costs (Exhibit H)

    1,878     1,648  

Holding gains on inventories

    38     37  

Inventories at end of period

    (1,055 )   (714 )
    
 

Salaries and Social Security – Pensions and other Postretirement and Postemployment Benefits

 

YPF Holdings Inc., a YPF’ subsidiary with operations in United States of America, has a number of trustee noncontributory pension plans and postretirement benefits.

 

The funding policy related to trustee noncontributory pension plans is to contribute amounts to the plans sufficient to meet the minimum funding requirements under governmental regulations, plus such additional amounts as Management may determine to be appropriate. The benefits related to the plans are accrued based on years of service and compensation earned during the period of active service of employees. YPF Holdings Inc. also has a noncontributory supplemental retirement plan for executive officers and other selected key employees.

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YPF Holding Inc. provides certain health care and life insurance benefits for eligible retired employees, and also certain insurance, and other postemployment benefits for eligible individuals in the case employment is terminated by YPF Holdings Inc. before their normal retirement. YPF Holdings Inc. accrues the estimated cost of retiree benefit payments, other than pensions, during employees’ active service periods. Employees become eligible for these benefits if they meet minimum age and years of service requirements. YPF Holdings Inc. accounts for benefits provided when the minimum service period is met, payment of the benefit is probable and the amount of the benefit can be reasonably estimated. Other postretirement and postemployment benefits are funded as claims are incurred.

 

Recognition of revenues and costs of construction activities

 

Revenues and costs related to construction activities are accounted by the percentage of completion method. When adjustments in contract values or estimated costs are determined, any change from prior estimates is reflected in earnings in the current period. Anticipated losses on contracts in progress are expensed when identified.

 

Derivative instruments

 

As of March 31, 2005, Profertil S.A., a YPF jointly controlled company, has entered into cash flow hedges, to establish a protection against variability in cash flows due to changes in interest rates established in financial obligation contracts. Changes in the fair value of cash flow hedges are initially deferred in “Temporary differences - Valuation of derivative instruments” account in the balance sheet and charged to financial expenses of the statement of income as the related transactions are recognized. Fair value of these instruments (interest rate swaps) are included in the “Loans” account of the balance sheet.

 

2. ANALYSIS OF THE MAIN ACCOUNTS OF THE CONSOLIDATED FINANCIAL STATEMENTS

 

Details regarding the significant accounts included in the accompanying consolidated financial statements are as follows:

 

Consolidated Balance Sheet Accounts as of March 31, 2005 and December 31, 2004

 

Assets

 

a) Investments:

 

> 
     2005
     2004
  
     Current
     Noncurrent
     Current
     Noncurrent
  

Short-term investments and government securities

    718 (1)   5     408 (1)   4  

Long-term investments

    —       757     —       811  

Allowance for reduction in value of holdings in long- term investments

    —       (282 )   —      

Cost of sales

    2,380     1,887  
    
 

 

         

ENRIQUE LOCUTURA RUPEREZ

Executive Vicepresident

           

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Exhibit G

 

English translation of the financial statements originally issued in Spanish, except for the inclusion of Note 12 in the English translation

 

YPF SOCIEDAD ANONIMA

 

BALANCE SHEETS AS OF MARCH 31, 2005 AND DECEMBER 31, 2004

FOREIGN CURRENCY ASSETS AND LIABILITIES

 

(amounts expressed in millions)

(The financial statements as of March 31, 2005 and March 31, 2004 are unaudited)

 

     Foreign currency and amount
   

Exchange rate
in pesos as of

03-31-05

    

Book value
as of

03-31-05

Account

    2004
    2005
     

Current Assets

                         

Cash

    US$ 55      (325 )
    
 
 
 
     718     480     408     490  
    
 
 
 

 

(1) Includes 705 and 395 as of March 31, 2005 and December 31, 2004, respectively, with an original maturity of less than three months.

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b) Trade receivables:

 

     2005
    2004
     Current
     Noncurrent
    Current
     Noncurrent

Accounts receivable

    1,856     69    1,939     72

Related parties

    394     —      469 —      —       —  

Investments

    US$ 13    US$ 30    2.88 (1)   87

Trade receivables

    US$ 477    US$ 437    2.88 (1)   1,259
     € 7    € 3    3.73 (1)   11

Other receivables

    US$ 741    US$ 1,201    2.88 (1)   3,459
     $CH 110,557    $CH 109,904    0.004984 (1)   548
     € 1    € 1    3.73 (1)   4
         —  
    
 
  
 
     2,250     69    2,408     72

Allowance for doubtful trade receivables

    (358 )   —      (359 )   —  
    
 
  
 
     1,892     69    2,049     72
    
 
  
 

 

c) Other receivables:

 

SIZE="2">10
     2005
     2004
  
     Current
     Noncurrent
     Current
     Noncurrent
  

Deferred income tax

    —                      

Total current assets

                        5,368
                        

Noncurrent Assets

                         

Other receivables

    US$ 208    US$ 200    2.88 (1)   575
                        

Total noncurrent assets

                        575
                        

Total assets

                        5,943
                        

Current Liabilities 

   385     —       422  

Tax credits and export rebates

    249     26     348     24  

Trade

    24     —       21     —    

Prepaid expenses

    53     128     52     139  

Concessions charges

    17     103     19     105  

Related parties

    4,338 (1)   608     3,110 (1)   617  

Loans to clients

    9     88    

                        

Accounts payable

    US$ 302    US$ 294    2.92 (2)   858
     € 7    € 10    3.78 (2)   38

Loans

    US$ 36    US$ 30    2.92 (2)   88

Net advances from crude oil purchasers

    US$ 89    US$ 91    2.92 (2)   266
                        

Total current liabilities

                        1,250
                        

Noncurrent Liabilities

     87  

From the renegotiation of long-term contracts

    —       20     —       21  

From joint ventures and other agreements

    10     —       6     —    

Trust contribution under Decree No. 1,882/04

    164     —       66     —    

Miscellaneous

    290     102     369     112  
    
 
 
 
     5,154     1,460     4,001     1,527  

Allowance for other doubtful accounts

    (131 )   —       (13                        

Accounts payable

    US$ 233    US$ 230    2.92 (2)   672

Loans

    US$ 412    US$ 384    2.92 (2)   1,121

Net advances from crude oil purchasers

    US$ 213    US$ 190    2.92 (2)   555
                        

Total noncurrent liabilities

                        2,348
                        

Total liabilities

                        3,598
                     )   —    

Allowance for valuation of other receivables to their estimated realizable value

    —       (68 )   —       (70 )
    
 
 
 
     5,023     1,392     3,871     1,457  
    
 
 
 

 

(1) Includes 2,979, which accrues an annual interest rate from 2.45% to 3.69% as of March 31, 2005, and 1,739 as of December 31, 2004, with Repsol International Finance B.V. (other related party under common control).

 

d) Inventories:

 

     2005
    2004

Refined products and other manufactured for sale

    626    617

Crude oil

    390    355

Products in process of refining and separation

    10    13

Raw materials, packaging materials and others 

  

 

(1) Buying exchange rate.

 

(2) Selling exchange rate.

 

         

ENRIQUE LOCUTURA RUPEREZ

Executive Vicepresident

           

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Exhibit H

 

English translation of the financial statements originally issued in Spanish, except for the inclusion of Note 12 in the English translation

 

YPF SOCIEDAD ANONIMA

 

STATEMENTS OF INCOME FOR THE THREE-MONTH PERIODS ENDED MARCH 31, 2005 AND 2004 EXPENSES INCURRED

 

(amounts expressed in millions of Argentine pesos - Note 1)

(The financial statements as of March 31, 2005 and March 31, 2004 are unaudited)

 

     2005
    2004
  
    

Production

costs

   

Administrative

expenses

    

Selling

expenses

   

Exploration

expenses

    Total
    Total
  

Salaries and social security taxes

    77    20    

    155    149
    
  
     1,181    1,134
    
  

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e) Fixed assets:

 

     2005
     2004
  

Net book value of fixed assets (Exhibit A)

    20,521     20,617  

Allowance for unproductive exploratory drilling

    (8 )   (16 )

Allowance for obsolescence and assets to be disposed of

    (47 )   (47 )
    
 
     20,466     20,554  
    
 

 

Liabilities

 

f) Accounts payable:

 

     2005
    2004 28    4    129    106  

Fees and compensation for services

    10    31 (1)   4    —      45    29  

Other personnel expenses

    29    7     4    2    42    38  

Taxes, charges and contributions

    35    2     43    —      80    72  

Royalties and easements

    400    —       —      3    403    389  

Insurance

    14    —       2    —      16    16  

Rental of real estate and equipment

    46    —      
     Current
    Noncurrent
    Current
    Noncurrent

Trade

    1,332    61    1,628    32

Hydrocarbon wells abandonment obligations

    —      644    —      648

Related parties

    268    —      172    —  

From joint ventures and other agreements

    128    —      136    —  

Miscellaneous

    156    220    89    174
    
  
  
  
     1,884    925    2,025    854
    
  
  
  

 

g) Loans:

 

     Interest
rates(1)
   Principal
maturity
12		    —      58    54  

Survey expenses

    —      —       —      33    33    20  

Depreciation of fixed assets

    582    7     27    —      616    565  

Industrial inputs, consumable materials and supplies

    129    2     7    —      138    115  

Construction and other service contracts

    119    2     8    3    132    108  

Preservation, repair and maintenance

    174    3     5    —      182    149  

Contracts for the exploitation of productive areas

    65    —       —      —      2005
    2004
          Current
    Noncurrent
    Current
    Noncurrent

YPF Negotiable Obligations

    7.75-10.00%   2007-2028    14    1,012    29    1,078

Related parties(2)

    10.77%   2005    24    —      2    71

Compañía Mega Negotiable Obligations

    10.77%   2005    40    —      3    116

Profertil syndicated loan

    4.37-7.22%   2005-2009    90    197    56    261

Interest rate swaps

    —     —      —      3    —      4

Subordinated liabilities with shareholders

    —     2005    13    —      13       65    63  

Unproductive exploratory drillings

    —      —       —      5    5    34  

Transportation, products and charges

    121    —       220    —      341    264  

Allowance (Recovery) for doubtful trade receivables

    —      —       2    —      2    (23 )

Publicity and advertising expenses

    —      4     3    —      7    13  

Fuel, gas, energy and miscellaneous

    77    8     10    4    99    79  
    
  
 
  
  
  

—  

Other bank loans and other creditors

    2.90-4.66%   2005-2007    143    113    143    154
             
  
  
  
              324    1,325    246    1,684
             
  
  
  

 

(1) Annual interest rates as of March 31, 2005.

 

(2) Corresponds to loans granted by Repsol Netherlands Finance B.V.

 

Consolidated Statements of Income Accounts as of March 31, 2005 and 2004

 

h) Other expenses, net:

 

     Income (Expense)
  
     2005
     2004
  

Reserve for pending lawsuits and other claims

    (15 )   (13 )

Environmental remediation of former operations (Note 3)

    (4 )   (8 Total 2005

    1,878    86     375    54    2,393       
    
  
 
  
  
      

Total 2004

    1,648    83     288    72         2,091  
    
  
 
  
       

 

(1) includes 1 for fees to the Directors and Statutory Auditors.

 

         

ENRIQUE LOCUTURA RUPEREZ

Executive Vicepresident

           

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Item 3

 

English translation of the report originally issued in Spanish, except for the omission of certain disclosures related to formal legal requirements for reporting in Argentina and the addition of the last paragraph – See Note 12 to the primary financial statements

 

Statutory Audit Committee’s Report

 

To the Shareholders of

YPF SOCIEDAD ANONIMA

 

Dear Sirs,

 

In accordance with the requirements of the Buenos Aires Stock Exchange and current professional requirements, we have performed the work mentioned in the following paragraph on the balance sheet of YPF SOCIEDAD ANONIMA as of March 31, 2005 and the related statements of income, changes in shareholders’ equity and cash flows for the three-month period then ended an FACE="Times New Roman" SIZE="2">)

Miscellaneous

    (143 )   (5 )
    
 
     (162 )   (26 )
    
 

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3. COMMITMENTS AND CONTINGENCIES IN CONTROLLED COMPANIES

 

Laws and regulations relating to health and environmental quality in the United States affect nearly all of the operations of YPF Holdings Inc. These laws and regulations set various standards regulating certain aspects of health and environmental quality, provide for penalties and other liabilities for the violation of such standards and establish in certain circumstances remedial obligations.

 

YPF Holdings Inc. believes that its policies and procedures in the area of pollution control, product safety and occupational health are adequate to prevent unreasonable risk of environmental and other damage, and of resulting financial liability, in connection with its business. Some risk of environmental and other damage is, however, inherent in particular operations of YPF Holdings Inc. and, as discussed below, Maxus Energy Corporation (“Maxus”) and Tierra Solutions, Inc. (“TS”) have certain potential liabilities associated with operations of Maxus’ former chemical subsidiary, Diamond Shamrock Chemicals Company (“Chemicals”). YPF Holdings Inc. cannot predict what environmental legislation or regulations will be enacted in the future or how existing or future laws or regulations will be administered or enforced. Compliance with more stringent laws or regulations, as well as more vigorous enforcement policies of the regulatory agencies, could in the future require material expenditures by YPF Holdings Inc. for the installation and operation of systems and equipment for remedial measures, possible dredging requirements and in certain other respects. Also, certain laws allow for recovery of natural resource damages from responsible parties and ordering the implementation of interim remedies to abate an imminent and substantial endangerment to the environment. Potential expenditures for any such actions cannot be reasonably estimated.

 

As of March 31, 2005, reserves for the environmental contingencies totaled approximately 279. Management believes it has adequately reserved for all environmental contingencies, which are probable and can be reasonably estimated; however, changes in circumstances could result in changes, including additions, to such reserves in the future.

 

In connection with the sale of Maxus’ former chemical subsidiary, Chemicals, to Occidental Petroleum Corporation (“Occidental”) in 1986, Maxus agreed to indemnify Chemicals and Occidental from and against certain liabilities relating to the business or activities of Chemicals prior to the September 4, 1986 closing date (the “Closing Date”), including certain environmental liabilities relating to certain chemical plants and waste disposal sites used by Chemicals prior to the Closing Date.

 

In addition, under the agreement pursuant to which Maxus sold Chemicals to Occidental, Maxus is obligated to indemnify Chemicals and Occidental for 50% of certain environmental costs incurred on projects involving remedial activities relating to chemical plant sites or other property used in the conduct of the business of Chemicals as of the Closing Date and for any period of time following the Closing Date which relate to, result from or arise out of conditions, events or circumstances discovered by Chemicals and as to which Chemicals provided written notice prior to September 4, 1996, irrespective of when Chemicals incurs and gives notice of such costs, with Maxus’ aggregate exposure for this cost sharing being limited to US$ 75 million. The total expended by YPF Holdings Inc. under this cost sharing arrangement was approximately US$ 71 million as of March 31, 2005. The remaining portion of this cost sharing arrangement (11 as of March 31, 2005) has been reserved. TS has agreed to assume essentially all of Maxus’ aforesaid indemnity obligations to Occidental in respect of Chemicals. In the following discussions concerning plant sites and third party sites, references to YPF Holdings Inc. include, as appropriate and solely for ease of reference, references to Maxus and TS. As indicated above, TS is also a subsidiary of YPF Holdings Inc. and has assumed certain of Maxus’ obligations.

 

Our work on the accompanying financial statements consisted in assessing the consistency of significant information contained in those statements with the corporate decisions set forth in minutes, and the conformity of those decisions with the law and the Company’s bylaws, insofar as formal and documentary aspects are concerned. In conducting our work, we have principally considered the limited review report on interim period financial statements issued by the firm Deloitte & Co. S.R.L. dated May 6, 2005 and in accordance with generally accepted auditing standards in Argentina for a limited review of interim period financial statements. We have not performed any management control and, accordingly, we have not assessed the criteria and business decisions in matters of administration, financing, sales and production, because these issues are the responsibility of the Company’s Board of Directors. We consider that our work and the above mentioned external auditor’s report provide a reasonable basis for our report.

 

Based on our work, we are not aware of any material modifications that should be made to the financial statements referred to above for them to be in conformity with generally accepted accounting principles in Buenos Aires City, Argentina.

 

In compliance with current legal requirements, and in exercise of the control of lawfulness which is our duty, we also report that during the period we have applied the procedures described in article No. 294 of Law No. 19,550 as we considered necessary in the circumstances, and we have no comments to make in this regard.

 

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Certain accounting practices of YPF SOCIEDAD ANONIMA used in preparing the accompanying financial statements conform with generally accepted accounting principles in Buenos Aires City, Argentina, but do not conform with generally accepted accounting principles in the United States of America (see Note 12 to the accompanying financial statements).

 

Buenos Aires, Argentina

May 6, 2005

 

For Statutory Audit Committee
  
JUAN A. GELLY Y OBES
Statutory Auditor

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SIGNATURE

 

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

 

        YPF Sociedad Anónima

Date: May 19, 2005

       By:    /s/    CARLOS OLIVIERI        
               

Name:

   Carlos Olivieri
               

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Newark, New Jersey. A consent decree, previously agreed upon by the U.S. Environmental Protection Agency (the “EPA”), the New Jersey Department of Environmental Protection and Energy (the “DEP”) and Occidental, as successor to Chemicals, was entered in 1990 by the United States District Court of New Jersey and requires implementation of a remedial action plan at Chemicals’ former Newark, New Jersey agricultural chemicals plant. In 1998, the EPA approved the remedial design. TS believes the construction of the approved remedy has been completed and has submitted to the EPA its report in connection with the required optimization phase, which included testing and related operations. TS is awaiting the EPA’s response to such report so that it may move beyond the optimization phase. This work was supervised and paid for by TS pursuant to the above described indemnification obligation to Occidental. YPF Holdings Inc. has fully reserved the estimated costs required to conduct ongoing operation and maintenance of such remedy, at an average cost of approximately US$ 1 million annually, for 10 years from and after January 1, 2005.

 

Passaic River, New Jersey. Studies have indicated that sediments of the Newark Bay watershed, including the Passaic River adjacent to the former Newark plant, are contaminated with hazardous chemicals from many sources. These studies suggest that the older and more contaminated sediments located adjacent to the former Newark plant generally are buried under more recent sediment deposits. Maxus, on behalf of Occidental, negotiated an agreement with the EPA under which TS is conducting further testing and studies to characterize contaminated sediment and biota in a six-mile portion of the Passaic River near the plant site. The stability of the sediments in the entire six-mile portion of the Passaic River study area is also being examined as a part of TS’ studies. YPF Holdings Inc. currently expects the testing and studies to be completed in 2005 and the cost to be incurred are approximately 9 after March 31, 2005, which amount has been fully reserved. Maxus and TS have been conducting similar studies under their own auspices for several years. In addition, the EPA and other agencies are addressing for the lower Passaic River in a cooperative effort designated as the Lower Passaic River Restoration Initiative (the “PRRI”). TS has agreed, along with approximately thirty other entities, to participate in a remedial investigation and feasibility study proposed in connection with the PRRI. Additional parties are currently negotiating to join in helping fund the EPA’s activities in this regard, eight additional parties having sent letters of intent to participate. The EPA has agreed to amend the order regarding this study when a total of nine additional parties (making a total of forty entities) agree to participate. TS’ estimated share of the cost of this remedial investigation and feasibility study is approximately 1 over the next three years, which amount has been fully reserved. As of March 31, 2005, there is a total of 34 reserved in connection with continuing such other studies and related matters related to the Passaic River and the Newark Bay (see discussion of the DEP’s Directive No. 1 and the Administrative Order on Consent (the “AOC”) below). Studies are ongoing with respect to the Passaic River and the Newark Bay watershed. Until these studies are completed and evaluated, YPF Holdings Inc. cannot estimate what additional costs, if any, will be required to be incurred. However, it is possible that additional work, including interim remedial measures, may be ordered with respect to the Passaic River and/or the Newark Bay.

 

In 2003, the DEP issued its Directive No. 1 for Natural Resource Injury Assessment and Interim Compensatory Restoration of Natural Resources for the Lower Passaic River (“Directive No. 1”). Directive No. 1 was served on approximately sixty six entities, including Occidental and Maxus and certain of their respective related entities, and seeks to address natural resource damages allegedly resulting from almost 200 years of historic industrial and commercial development of the lower 17 miles of the Passaic River and a part of its watershed. Directive No. 1 asserts that the named entities are jointly and severally liable for the alleged natural resource damages without regard to fault. The DEP has asserted jurisdiction in this matter even though all or part of the lower Passaic River has been designated as a Superfund site and is a subject of the PRRI, a congressional urban rivers restoration initiative designed to address urban rivers such as the Passaic through a joint federal, state, local and private sector cooperative effort. Directive No. 1 calls for the following actions: interim compensatory restoration, injury identification, injury quantification and value determination. Maxus and TS have filed a response to Directive No. 1 on behalf of themselves and Occidental, as successor to Chemicals, which sets forth both how these parties are complying with Directive No. 1 and certain defenses thereto. Settlement discussions between the DEP and the named entities have been held; however, no agreement has been reached or is assured.

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In February 2004, the EPA and Occidental entered into an administrative order on consent (the “AOC”) pursuant to which TS (on behalf of Occidental) has agreed to conduct testing and studies to characterize contaminated sediment and biota in the Newark Bay. TS presented a proposed initial work plan, a study that includes sampling in Newark Bay, to the EPA. The EPA has commented on the proposed work plan, and TS anticipates that the plan, with any modifications required by the EPA, will be approved in mid-2005. If approved, TS currently plans to conduct this study in 2005 at a currently estimated cost of 13. Such amount has been fully reserved; however, the reserved amount may be adjusted depending upon the details of the work plan that is approved by the EPA. After the data has been collected in the initial study, a determination will be made as to what additional work, if any, might be required. In January 2005, several environmental groups sued the U.S. Army Corps of Engineers (the “Army Corps”) challenging the Army Corps’ failure to prepare a supplemental environmental impact statement the plaintiffs allege is required in connection with a dredging project proposed for the New York-New Jersey Harbor. Although neither YPF Holdings Inc. nor any of its subsidiaries is a party to this lawsuit, it could impact the timing, cost and approval of the proposed initial work plan.

 

Hudson County, New Jersey. Until 1972, Chemicals operated a chromew Roman" SIZE="2">Title:

   Chief Financial Officer