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Section 1: 6-K (FORM 6-K)

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20546

 

FORM 6-K

 

REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16

UNDER THE SECURITIES EXCHANGE ACT OF 1934

 

For the month of May, 2018

 

Commission File Number: 333-221916

 

 

 

Corporación América Airports S.A.

(Name of Registrant)

 

4, rue de la Grêve
L-1643, Luxembourg
Tel: +35226258274
Fax: +35226259776

(Address of Principal Executive Office)

  

 

 

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

 

Form 20-F   x   Form 40-F  ¨

 

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

 

Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.

 

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): ¨

 

Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant’s “home country”), or under the rules of the home country exchange on which the registrant’s securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant’s security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.

 

 

 

 

 

 

INFORMATION CONTAINED IN THIS FORM 6-K REPORT

 

Our subsidiary in Argentina, Aeropuertos Argentina 2000 S.A. (“AA2000”), files quarterly financial statements (both on a consolidated and individual basis) and other periodic reports and notices in Spanish with the Comision Nacional de Valores (“CNV”) in Argentina because certain of its debt securities are subject to the public offering regime in Argentina. All such reports and notices are available at the website of the CNV (http://www.cnv.gob.ar). AA2000 also files quarterly consolidated and individual financial statements in English to the Luxembourg Stock Exchange on which these debt securities are listed and to the trustee under the indenture governing these debt securities. We are furnishing the information under cover of this Form 6-K to make this information available to the holders of our common shares.

 

This Form 6-K contains a free translation into English of the stand-alone condensed consolidated interim financial statements for the three months ended March 31, 2018 of AA2000 (the “AA2000 Consolidated Financial Statements”) as well as the stand-alone condensed individual interim financial statements for the three months ended March 31, 2018 of AA2000 (the “AA2000 Individual Financial Statements” and jointly with the AA2000 Consolidated Financial Statements, the “AA2000 Financial Statements”) that have been made publicly available in Argentina in Spanish. The AA2000 Financial Statements, which have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”), are presented in Argentine pesos and were audited in accordance with International Standards on Auditing as approved by the International Auditing and Assurance Standards Board (IAASB).

 

There are certain differences between the AA2000 Consolidated Financial Statements and the consolidating information for the Argentine segment included in the consolidated financial statements of Corporación América Airports S.A. (“CAAP”), such as AA2000’s own transition date to IFRS and its reporting currency, among others.

 

As a result, the AA2000 Financial Statements contained in this Form 6-K are for informational purposes only and not comparable to the financial information included in the Argentine segment in the consolidated financial statements of CAAP to be included in our quarter report for the three months ended March 31, 2018 and that will consolidate the results of operations and financial condition of all our subsidiaries for such period. Furthermore, neither the AA2000 Consolidated Financial Statements nor the AA2000 Individual Financial Statements should be construed as any indication of how our Argentina segment information will be presented in the consolidated financial statements of CAAP.

 

 

 

 

Exhibits

 

Exhibit No.   Description
99.1   Free translation into English of AA2000 Condensed Consolidated Interim Financial Statements for the three months ended March 31, 2018.
99.2   Free translation into English of AA2000 Condensed Individual Interim Financial Statements for the three months ended March 31, 2018.

 

 

 

 

SIGNATURES

 

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.

 

Date: May 9, 2018

 

  Corporación America Airports S.A.
     
  By: /s/ Andres Zenarruza
  Name: Andres Zenarruza
  Title: Legal Manager
     
  By: /s/ Raúl Guillermo Francos
  Name: Raúl Guillermo Francos
  Title: Chief Financial Officer

 

 

 

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Section 2: EX-99.1 (EXHIBIT 99.1)

 

Exhibit 99.1

 

Aeropuertos Argentina 2000 S.A.

 

Condensed Consolidated Interim Financial Statements

At March 31, 2018 presented in comparative format

 

 

 

 

Aeropuertos Argentina 2000 S.A.

 

Condensed Consolidated Interim Financial Statements

At March 31, 2018 presented in comparative format

 

Index  
   
Consolidated Statements of Comprehensive Income 2
Consolidated Statements of Financial Position 3
Consolidated Statements of Changes in Equity 4
Consolidated Statements of Cash Flows 5
Notes to the Condensed Consolidated Interim Financial Statements 6
Summary of Information requested by Resolution N° 368/01 Of the National Securities Commission 32
Report of Independent Auditors 44
Report of the Supervisory Committee  

 

$ = Argentine Peso

US$ = US Dollar

 

 
 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

 

Legal address: Suipacha 268 - Piso 12º - Ciudad Autónoma de Buenos Aires
Principal activity: Exploitation, administration and operation of airports

 

  Condensed Consolidated Interim Financial Statements

For the three months period of the

Fiscal Year N° 21 commenced January 1, 2018

 

DATE OF REGISTRATION WITH THE PUBLIC REGISTRY OF COMMERCE:
Of the By-laws: February 18, 1998
Of the last modification of the By-laws: October 11, 2016
Registration number with the Superintendence of Corporations: 1645890
Expiration date of the company: February 17, 2053
Parent Company: Corporación América S.A.
Legal address: Honduras 5673 -
  Autonomous City of Buenos Aires
Principal activity: Investments and financing
Participation of the Parent Company
in common stock and total votes:
45.90%

 

CAPITAL STOCK (Note 13)

 

   Subscribed   Paid-in 
         $   
Issued          
79,105,489 Class “A” common shares of AR$ 1 par value and 1 vote each   79,105,489    79,105,489 
79,105,489 Class “B” common shares of AR$ 1 par value and 1 vote each   79,105,489    79,105,489 
61,526,492 Class “C” common shares of AR$ 1 par value and 1 vote each   61,526,492    61,526,492 
38,779,829 Class “D” common shares of AR$ 1 par value and 1 vote each   38,779,829    38,779,829 
616,914,353 Preferred shares of AR$ 1 par value with no voting rights   616,914,353    616,914,3536666616, 
    875,431,652    875,431,652875,431,652 

 

 1 
 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Consolidated Statements of Comprehensive Income

For the three month periods ended March 31, 2018 and 2017

 

   03.31.18  

03.31.17 *

Modificated

 
   $ 
Continuous Operations          
Revenue (Note 4)   3,975,115,874    3,011,256,134 
CINIIF 12 - paragraph 14 Credit (Note 5)   876,021,046    497,180,256 
Cost of services (Note 10)   (1,959,769,801)   (1,524,983,084)
CINIIF 12 - paragraph 14 Debit   (874,654,893)   (496,472,840)
Gross Profit   2,016,712,226    1,486,980,466 
Distribution and selling expenses (Note 10)   (247,477,793)   (184,506,647)
Administrative expenses (Note 10)   (181,224,619)   (168,430,723)
Other income and expenses, net (Note 4)   92,821,267    72,590,364 
Operating profit   1,680,831,081    1,206,633,460 
           
Finance Income (Note 4)   172,025,446    133,789,589 
Finance Costs (Note 4)   (693,364,759)   (201,045,824)
Income before income tax   1,159,491,768    1,139,377,225 
Income tax (Note 4)   (338,318,562)   (295,314,307)
Income for the period for continuous operations   821,173,206    844,062,918 
Net Income for the period   821,173,206    844,062,918 
Other comprehensive income   -    - 
Comprehensive Income for the period   821,173,206    844,062,918 
           
Income attributable to:          
Shareholders   822,321,443    843,119,741 
Non –Controlling Interest   (1,148,237)   943,177 
           
Earnings per share basic and diluted attributable to shareholders of the Company during the period (shown in $ per share ) from continuous operations   3.1643    3.2531 

 

The accompanying notes are an integral part of these Condensed Consolidated Interim Financial Statements and should be read together with the Financial Statements audited for the year ended December 31, 2017.

* See Note 3.1 (comparative information) for more detail on modificated.

 

 2 
 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Consolidated Statements of Financial Position

At March 31, 2018 and December 31, 2017

 

   03.31.18   12.31.17 
   $ 
Assets          
Non- Current Assets          
Property, plant and equipment   24,890,382    25,853,595 
Intangible Assets (Note 5)   11,364,387,254    10,624,055,713 
Deferred Income tax assets   4,239,371    2,822,421 
Other receivables (Note 4)   2,663,286,695    2,549,858,177 
Total Non-Current Assets   14,056,803,702    13,202,589,906 
Current Assets          
Other receivables (Note 4)   318,496,613    337,310,968 
Trade receivables,net (Note 4)   1,401,695,323    1,056,245,965 
Other Assets   2,006,461    1,985,631 
Cash and cash equivalents (Note 4)   2,540,148,293    2,319,754,598 
Total Current Assets   4,262,346,690    3,715,297,162 
Total Assets   18,319,150,392    16,917,887,068 
Shareholders’ Equity and Liabilities          
Equity attributable to Shareholders:          
Common shares   258,517,299    258,517,299 
Preferred shares   616,914,353    616,914,353 
Share Premium   137,280,595    137,280,595 
Legal and facultative reserve   2,732,769,964    2,732,769,964 
Retained earnings   3,560,860,549    2,684,484,995 
Subtotal   7,306,342,760    6,429,967,206 
Non-Controlling Interest   10,023,651    11,171,888 
Total Shareholders’ Equity   7,316,366,411    6,441,139,094 
Liabilities          
Non-Current Liabilities          
Accounts payable and others (Note 4)   117,783,568    128,108,326 
Borrowings (Note 6)   8,003,387,589    7,401,161,525 
Deferred income tax liability   112,779,675    86,307,610 
Provisions and other charges (Note 9)   58,442,708    59,625,687 
Total Non-Current liabilities   8,292,393,540    7,675,203,148 
Current Liabilities          
Fee payable to the Argentine National Government (Note 7)   195,676,512    176,591,493 
Accounts payable and others (Note 4)   1,635,627,856    1,758,559,433 
Income tax, net of prepayments   259,018,018    213,427,506 
Borrowings (Note 6)   156,106,781    149,976,119 
Provisions and other charges (Note 9)   463,961,274    502,990,275 
Total Current Liabilities   2,710,390,441    2,801,544,826 
Total Liabilities   11,002,783,981    10,476,747,974 
Total Shareholders’ Equity and Liabilities   18,319,150,392    16,917,887,068 

 

The accompanying notes are an integral part of these Condensed Consolidated Interim Financial Statements and should be read together with the Financial Statements audited for the year ended at December 31, 2017.

 

 3 
 

  

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Consolidated Statements of Changes in Equity

At March 31, 2018 and 2017

 

   Attributable to equity holders of the Company             
  

Capital Stock

Common

Shares

  

Capital Stock

Preferred
Shares

   Share
Premium
  

Legal

Reserve

   Facultative
Reserve
   Retained
Earnings
   Total   Non-
Controlling
Interest
  

Total

Shareholders’

Equity

 
  

 $

 
Balance at 01.01.18   258,517,299    616,914,353    137,280,595    172,667,058    2,560,102,906    2,684,484,995    6,429,967,206    11,171,888    6,441,139,094 
IFRS 9 Adjustment (Note 3.1)   -    -    -    -    -    54,054,111    54,054,111    -    54,054,111 
Balance at 01.01.18 modificated   258,517,299    616,914,353    137,280,595    172,667,058    2,560,102,906    2,738,539,106    6,484,21,317    11,171,888    6,495,193,205 
Income for the period   -    -    -    -    -    822,321,443    822,321,443    (1,148,237)   821,173,206 
Balance at 03.31.18   258,517,299    616,914,353    137,280,595    172,667,058    2,560,102,906    3,560,860,549    7,306,342,760    10,023,651    7,316,366,411 
                                              
Balance at 01.01.17   258,517,299    604,817,993    137,280,595    109,328,624    1,806,446,119    2,009,091,581    4,925,482,211    8,331,533    4,933,813,744 
Income for the period   -    -    -    -    -    843,119,741    843,119,741    943,177    844,062,918 
Balance at 03.31.17   258,517,299    604,817,993    137,280,595    109,328,624    1,806,446,119    2,852,211,322    5,768,601,952    9,274,710    5,777,876,662 

 

The accompanying notes are an integral part of these Condensed Consolidated Interim Financial Statements and should be read together with the Financial Statements audited for the year ended December 31, 2017.

 

 4 
 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Consolidated Statements of Cash Flow

For the periods ended at March 31, 2018 and 2017

 

       03.31.18   03.31.17*
Modificated
 
   NOTES   $ 
Cash Flows from operating activities               
Net income for the period        821,173,206    844,062,918 
Adjustment for:               
Amortization of intangible assets   5    135,689,505    121,052,069 
Specific allocation of accrued and unpaid income   7    195,676,512    152,058,592 
Depreciation of property, plant and equipment        995,412    845,742 
Bad debts provision   8    3,978,860    1,962,054 
Income Tax        338,318,562    295,314,307 
Accrued and unpaid borrowing interest costs        104,580,393    65,864,719 
Accrued deferred revenues and additional consideration   9    (59,206,741)   (54,145,225)
Accrued and unpaid Exchange differences        512,825,434    (153,781,579)
Contingencies provision   9    4,842,062    4,515 
Changes in operating assets and liabilities:               
Changes in trade receivables        (277,356,070)   49,809,246 
Changes in other receivables        (94,614,164)   (475,404,652)
Changes in other assets        (20,830)   (1,847,469)
Changes in accounts payable and others        (133,256,335)   (211,334,313)
Changes in liabilities for current income tax        (68,972,899)   (70,089,528)
Changes in provisions and other charges        64,152,699    39,546,617 
Changes in fee payable to the Argentine National Government        (176,591,493)   (147,629,066)
Changes in borrowings        (41,590,412)   264,255,139 
Increase of intangible assets        (797,059,149)   (495,060,062)
Income tax paid        (216,718,072)   (17,396,567)
Net cash provided by operating activities        316,846,480    208,087,457 
Cash Flow for investing activities               
Acquisition of property, plant and equipment        (32,199)   (1,425,591)
Net Cash Flow used in investing activities        (32,199)   (1,425,591)
Cash Flow from financing activities               
New Borrowings        -    6,312,000,000 
Borrowings paid- principal   6    (15,866,434)   (2,955,651,859)
Borrowings paid- interests   6    (136,254,109)   (305,778,159)
Cash flow release        -    490,566,044 
Dividends paid   9    (50,000,000)   - 
Net Cash Flow (used in) / provided by financing activities        (202,120,543)   3,541,136,026 
Net Increase in cash and cash equivalents        114,693,738    3,747,797,892 
Changes in cash and cash equivalents               
Cash and cash equivalents at the beginning of the period (*)        2,319,754,598    779,742,867 
Net Increase in cash and cash equivalents        114,693,738    3,747,797,892 
Foreign Exchange differences        105,699,957    (123,878,454)
Cash and cash equivalents at the end of the period (*)        2,540,148,293    4,403,662,305 
Transactions that do not represent changes in cash and cash equivalents:               
Acquisition of intangible assets through liabilities for finance leases        11,969,823    2,120,194 
Dividends on preferred shares        3,146,263    3,084,572 

 

(*) Does not include restricted cash at January 1, 2017 for $ 490,566,044.

The accompanying notes are an integral part of these Condensed Consolidated Interim Financial Statements and should be read together with the Financial Statements audited for the year ended December 31, 2017.

* See Note 3.1 (comparative information) for more detail on modificated.

 

 5 
 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Consolidated Financial Statements

At March 31, 2018 presented in comparative format

 

NOTE 1 – COMPANY ACTIVITIES

 

Aeropuertos Argentina 2000 S.A. (“AA2000” or the “Company”) was incorporated in the Autonomous City of Buenos Aires on January 28, 1998, after the consortium of companies won the national and international bid for the concession rights for the use, management and operation of the “A” Group of the Argentine National Airport System. “A” Group includes 33 airports, which operate in Argentina (the “Concession”)

 

The Concession was granted pursuant to the concession agreement the Company entered into with the Argentine National Government on February 9, 1998, as subsequently amended and supplemented by the memorandum of agreement we entered into with the Argentine National Government on April 3, 2007 (the “Memorandum of Agreement”). The Company refer to the concession agreement as amended and supplemented by the Memorandum of Agreement as the “Concession Agreement”.

 

The Concession is for an initial period of 30 years through February 13, 2028. The Company may extend the term of the Concession for an additional period of up to 10 years. The Company has made a formal request to the National Airports Regulatory Organization (Organismo Regulador Del Sistema Nacional de Aeropuertos) (the “ORSNA”) to extend the term of the Concession for the additional 10-year period ending February 13, 2038. The Company can provide no assurance that the Argentine National Government will grant our request or on what conditions.

 

In addition, under the terms of the Concession Agreement, the Argentine National Government has the right to buyout our Concession as of February 13, 2018, and if such right is exercised, it is required to pay the Company a compensation.

 

As from July 24, 2012 The Company has become responsible for the management of the operation of Termas de Rio Hondo airport. On March 21, 2013, the National Executive Branch through Decree N° 303/2013, ratified the incorporation of the airport to the National Airport System, its inclusion into the “A” Group at December 31, 2017 is still pending.

 

Likewise and in order to be able to continue with the policies related to the expansion of the aviation market, the National State issued Decree No. 1092/17 on December 22, 2017 by which it incorporated the Palomar Airport, located in the Province of Buenos Aires. Aires, to the National Airport System.

 

In order to incorporate the said Airport into "Group A", on December 27, 2017 the National Government issued Decree No. 1107/17.

 

 6 
 

  

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Consolidated Financial Statements

At March 31, 2018 presented in comparative format (Contd.)

 

NOTE 1 – COMPANY ACTIVITIES (Contd.)

 

As a result, as of such date, the Company is responsible for the exploitation, administration and operation of Palomar Airport under the terms set forth in the Concession Contract approved by Decree No. 163/97 and the Adjustment Agreement Act.of the Concession Contract approved by Decree No. 1799/07.

 

The current note to the condensed consolidated interim financial statements does not reflect all the information requested in the annual financial statements as there are no significate differences. It should be read together with the financial statements audited for the year ended December 31, 2017.

 

NOTE 2 - BASIS FOR CONSOLIDATION

 

The consolidated financial statements include the assets, liabilities and results of the following controlled companies (hereafter the Group):

 

Subsidiaries (1)  Number of
common shares
   Participation in
capital and
possible votes
   Book entry
value at
03.31.18
   Net
Shareholders
‘equity at
closing
   Income for the
period
 
           $ 
Servicios y Tecnología Aeroportuarios S.A. (2)   14,398,848    99,30%   22,041,355    22,196,732    2,682,396 
Cargo & Logistics SA.   5,566,259    98,63%   3,446,779    3,494,656    (537,553)
Paoletti América S.A.   6,000    50,00%   15,526    31,051    - 
Texelrío S.A. (3)   84,000    70,00%   26,863,019    36,661,456    (3,863,027)
Villalonga Furlong S.A (4)   123,700    1,46%   84,889    5,781,351    (546,180)

 

(1)Companies incorporated in Argentina.
(2)Includes adjustments under IFRS for the preparation and presentation of the corresponding financial statements.
(3)Shareholders Equity includes 4,000,000 of preferred shares.
(4)The Company directly and indirectly owns 98.42% of the capital stock and votes of this entity.

 

The accounting policies of the subsidiaries have been modified, where necessary, to ensure consistent application with the Group´s accounting policies.

 

 7 
 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Consolidated Financial Statements

At March 31, 2018 presented in comparative format (Contd.)

 

NOTE 2 - BASIS FOR CONSOLIDATION (Contd.)

 

AA2000 holds 99.3% of the shares of Servicios y Tecnología Aeroportuarios S.A. (Sertear), which purpose is to manage and develop activities related to duty-free zones, import and export operations, exploit and manage airport-related services, provide transportation services (both passenger and cargo), and warehouse usage services.

 

AA2000 owns 98.63% of the capital stock of Cargo y Logística S.A., holder of 98.42% of the shares of Villalonga Furlong S.A. Villalonga Furlong S.A. is the holder of Class “B” shares of Empresa de Cargas Aéreas del Atlántico Sud S.A., under liquidation, representing 45% of its capital stock. The remaining 55% of the capital stock, (the Class “A” shares) are owned by the Argentine National Government - Ministry of Defense. Empresa de Cargas Aéreas del Atlántico Sud S.A. (which, as of the date of these consolidated financial statements, is under liquid proceedings as a result of the application of the provisions of Section 94 subsection 2 of Commercial Law 19550) was the concessionaire of the exploitation and provision of international air cargo storage, stowage and warehouse services until June 30, 2009. As from that date the services in charge of Empresa de Cargas Aéreas del Atlántico Sud S.A. are performed by AA2000 in accordance with the Bidding Terms and Conditions of the AA2000 concession agreement.

 

The Company holds 50% of the capital stock and votes of Paoletti América S.A. Pursuant to shareholder agreements, AA2000 is in charge of the administration of Paoletti America S.A, and also appoints the Chairman of the Board of Directors, who, in accordance with the corporate by-laws, has a double vote in case of a tie voting. Therefore, the Company has consolidated the assets, liabilities and results of Paoletti América S.A.

 

In addition, the Company holds 70% of the capital and votes of Texelrio S.A. whose corporate purpose is, among others, to develop, operate and manage all types of services related to park and airport maintenance.

 8 
 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Consolidated Financial Statements

At March 31, 2018 presented in comparative format (Contd.)

 

NOTE 3 – ACCOUNTING POLICIES

 

The Condensed Consolidated Interim Financial Statements are presented in Argentine Pesos, except when specifically indicates otherwise. The Board of Directors of the Company approved these statements on May 8, 2018.

 

The National Security Commission (CNV) through Technical Resolutions N° 562/09 and 576/10 has established the application of Technical Resolutions N° 26 and 29 of the Argentine Federation of Professional Council in Economic Sciences which adopts the application of IFRS (International Financial Reporting Standards) issued by the IASB (International Accounting Standards Board), for those entities under the public offering regime Law N° 17.811, whether due to capital stock or corporate bonds or because they have requested authorization to list for trading on stock exchanges.

 

Application of those standards is mandatory for the Company as from the fiscal year beginning on January 1, 2012. Therefore, the transition date, as established in the IFRS 1 “First Time Adoption of the IFRS” was January 1, 2011.

 

The Consolidated Financial Statements of AA2000 have been prepared in accordance with IFRS and IFRIC (International Financial Reporting Interpretations Committee).

 

These accounting policies have been consistently applied to all the periods presented. Unless otherwise stated.

 

The current Condensed Consolidated Interim Financial Statements have not been audited and should be read together with the Consolidated Financial Statements of the Company as of December 31, 2017. The results of the three-month periods ended March 31, 2018 and 2017 do not necessarily reflect the proportion of the results of the Company for the full year.

 

1) Comparative Information

 

The figures at March 31, 2018 and December 31, 2017 included in these condensed consolidated interim financial statements for comparative purposes, was extracted from the Financial Statements of AA2000 as of that date, and timely approved by the Company Board of Directors and Shareholders.

 

 9 
 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Consolidated Financial Statements

At March 31, 2018 presented in comparative format (Contd.)

 

NOTE 3 – ACCOUNTING POLICIES (Contd.)

 

1) Comparative Information (Contd.)

 

Certain figures in the financial statements for the year ended March 31, 2017 have been reclassified for the purpose of comparative presentation, in relation to the revenues from the Strengthening Trust ($74,808,468), included in the revenue item which have been reclassified to the item Other Net Income and Expenses in the Consolidated Statement of Comprehensive Income. This reclassification does not affect the figures of the balance sheet.

 

In turn, certain transactions have been reclassified in the Cash Flow Statement that were classified in 2017 within the operating activities (Release of restricted cash and certain interests) that were reclassified to financing activities.

 

2) Accounting Policies

 

The accounting policies applied to these Condensed Consolidated Interim Financial Statements are consistent with the Consolidated Financial Statements ended at December 31, 2017.

 

3) Subsidiaries

 

Subsidiaries are all the entities where the Company has the power to control operating and financial policies, generally with a controlling share over 50%. At the time of determining if the Company controls an entity, the existence and the impact of potential voting rights that could be exercised or converted are taken into account. The subsidiaries are consolidated as from the date the control is transferred and excluded from the date such control ceases. The Company controls an entity when the group is exposed to, or has the rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. The subsidiaries are consolidated as from the date control is transferred to the Company. They are deconsolidated from the date that control ceases. (See Note 2).

 

3) Segment Information

 

The Company is managed as a single unit, considering all airports as a whole. It does not evaluate the performance of the airports on a standalone basis. Therefore, for the purposes of segment information, there is only one business segment.

 

 10 
 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Consolidated Financial Statements

At March 31, 2018 presented in comparative format (Contd.)

 

NOTE 3 – ACCOUNTING POLICIES (Contd.)

 

4) Segment Information (Contd.)

 

The Argentine National Government granted to the Company the airports’s concession of the Group “A” of the National Airports System under the basis of “cross-subsidies”: i.e., the income and funds generated by some of the airports should subsidize the liabilities and investments of the remaining airports, in order for all airports to be compliant with international standards as explained below.

 

All airports must comply with measures of operative efficiency that are independent from the revenues and funds they generate. All works performed must follow international standards established by the respective agencies (IATA, OACI, etc.).

 

Revenues of AA2000 comprised non-aeronautical revenues and aeronautical revenues; the latter being the tariffs determined by the ORSNA and regulated on the basis of the review of the Financial Projection of Income and Expenses in order to verify and preserve the "equilibrium" of the variables on which it was originally based.

 

The investment decisions are assessed and made with the ORSNA based on the master plans of the airports considering the needs of each airport based on expected passenger flow and air traffic, in the framework of the standards previously mentioned.

 

5) Estimates

 

The preparation of financial statements in accordance with IFRS requires the use of estimates. It also requires management to exercise its judgment in the process of applying the Group’s accounting policies.

 

In the preparation of these Consolidated Financial Statements, the significant areas of judgement by management in the application of the Group’s accounting policies and the main areas of assumptions and estimates are consistent with those applied in the Consolidated Financial Statements for the year ended December 31, 2017.

 

 11 
 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Consolidated Financial Statements

At March 31, 2018 presented in comparative format (Contd.)

 

NOTE 3 – ACCOUNTING POLICIES (Contd.)

 

6) Foreign currency translation

 

Functional and presentation currency

 

Items included in the financial statements of each of the group´s entities are measured using the corresponding functional currency i.e the currency of the primary economic environment in which the entity operates. The functional currency of all group entities is the Argentine peso, which is also the presentation currency of the consolidated financial statements.

 

The Group has evaluated and concluded that at the date of the financial statements the conditions established in the IAS 29 “Financial Reporting for Hyperinflationary Economies” are unmet in order to consider Argentina as a hyperinflationary economy. At the end of the reported period, considering the argentine peso does not gather the characteristics to be considered a as a currency from a hyperinflationary economy according to the guidelines established in the Standard and the government expectations towards the reduction of the inflation level, the current condensed financial statements have not been re expressed in constant currency.

 

The figures included in the financial statements corresponding to the different associated entities of the Group were measured using its functional currency, that is, the currency of the primary economic environment in which the Company operates. The functional currency of all Group companies is the Argentine peso, which is coincident with the presentation currency of the financial statements.

 

These consolidated financial statements have been prepared under the historical cost convention.

 

Transactions and balances

 

Transactions in foreign currency are translated into the functional currency using the exchange rates prevailing at the transaction dates (or valuation where items are re-measured).


Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end of the assets and liabilities denominated in foreign currency are recognized in the statement of comprehensive income.

 

 12 
 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Consolidated Financial Statements

At March 31, 2018 presented in comparative format (Contd.)

 

NOTE 3 – ACCOUNTING POLICIES (Contd.)

 

6) Foreign currency translation (Contd.)

 

Transactions and balances (contd.)

 

Foreign exchange gains and losses are shown in “Finance Income” and/or “Finance Cost” of the statement of income.

 

Exchange rates used are the following: buying rate for monetary assets and selling rate for monetary liabilities, applicable at year-end according to Banco Nación, and at the foreign currency exchange rate applicable at the transaction date.

 

7) Contingencies

 

The Group has contingent liabilities for litigations related to the ordinary course of business.

No significate liability is expected to arise from contingent liabilities different from the reserved ones.

 

8) Changes in accounting policies

 

a) New standards and modifications adopted by the Company

 

The following standards and amendments have been adopted by the Company for the first time for the three-month period ended March 31, 2018:

 

IFRS 9, "Financial Instruments"

 

The Group adopted IFRS 9 issued in July 2014, which resulted in changes in accounting policies and adjustments to the figures recognized in the Consolidated Financial Statements for the year ended December 31, 2017.

 

This standard replaces the previously issued versions and establishes new requirements for hedge accounting and a new impairment model for financial assets, applicable to annual periods beginning on or after January 1, 2018

 

The new impairment model requires the recognition of provisions for impairment based on the expected credit losses, instead of credit losses incurred under IAS 39.

 

The accounting policies were modified to comply with IFRS 9 issued by the IASB in July 2014.

 13 
 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Consolidated Financial Statements

At March 31, 2018 presented in comparative format (Contd.)

 

NOTE 3 – ACCOUNTING POLICIES (Contd.)

 

8) Changes in accounting policies (Contd.)

 

IFRS 9 replaces the provisions of IAS 39 that relate to the recognition, classification and measurement of financial assets and financial liabilities; cancellations in financial instrument accounts; impairment of financial assets and hedge accounting. IFRS 9 also significantly modifies other standards related to financial instruments such as IFRS 7 Financial Instruments: Disclosures.

 

As permitted by the transitional provisions of IFRS 9, the Group has chosen not to change the comparative figures.

 

The total impact on the Group's retained earnings due to the classification and measurement of financial instruments as of January 1, 2018 is as follows:

 

Retained earnings as of December 31, 2018 - IAS 39   2.684.484.995 
Decrease in the provision for bad debts, net   54.054.111 
Retained earnings as of January 1, 2018 - IFRS 9   2.738.539.106 

 

-IFRS 15 “Revenue from contracts with customers”

 

Management evaluated the effects of the application of the new standard and has no identified that the application of IFRS 15 may result in the identification of separate performance obligations in relation to permit holder contracts that could affect the timing of recognition of future income.

 

There were no other additional changes in the accounting policies of the Company based on the effective application standards as of January 1, 2018 described above.

 

b) New standards and amendments issued, but that do not result in effective application as of March 31, 2018 and have not been adopted by the Company

 

 14 
 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Consolidated Financial Statements

At March 31, 2018 presented in comparative format (Contd.)

 

NOTE 3 – ACCOUNTING POLICIES (Contd.)

 

8) Changes in accounting policies (Contd.)

 

IFRS 16 “Leases”

 

In January 2016, the IASB issued IFRS 16 "Leases", which establishes new principles for the recognition, measurement, presentation and presentation of lease contracts, highlighting the elimination of the operational and financial classification established by IAS 17 and the adoption, in its replacement of a treatment similar to that provided to financiers under said rule, for all lease agreements.

 

These contracts must be disclosed as leased assets (assets with a right to use) or within fixed assets at the present value of the lease payments. If the Company makes periodic payments, it must additionally recognize a financial liability that represents the obligation to make future payments for the lease. IFRS 16 does not require the lessee to recognize assets and liabilities in the case of short-term leases or leases of low-value assets. The application of these new requirements will result in an increase in lease assets and financial liabilities recognized in this type of transaction. This standard is applicable to annual periods beginning on or after January 1, 2019, allowing early application if IFRS 15 is applied.

 

The Company has no intention to adopt this standard in advance.

 

 15 
 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Consolidated Financial Statements

At March 31, 2018 presented in comparative format (Contd.)

 

NOTE 4 – BREAKDOWN OF CERTAIN ITEMS OF THE CONSOLIDATED STATEMENTS OF FINANCIAL POSITION AND THE CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

 

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

 

   03.31.18   12.31.17 
   $ 
Cash and cash equivalents          
Cash and funds in custody   42,428,615    23,409,956 
Banks   1,625,464,794    2,018,403,943 
Checks not yet deposited   10,472,489    22,862,046 
Time deposits   861,782,395    255,078,653 
    2,540,148,293    2,319,754,598 
Trade receivables, net          
Trade receivables   1,457,720,175    1,173,820,499 
Related parties (Note 7)   1,939,563    4,565,000 
Checks-postdated checks   28,720,265    32,638,434 
Provision for bad debts (Note 8)   (86,684,680)   (154,777,968)
    1,401,695,323    1,056,245,965 
Other current receivables          
Expenses to be recovered   2,328,055    1,570,056 
Guarantees granted   5,652,910    5,637,870 
Tax credits   295,857,472    308,972,682 
Prepaid Insurance   10,298,888    17,340,779 
Other   4,359,288    3,789,581 
    318,496,613    337,310,968 

 16 
 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Consolidated Financial Statements

At March 31, 2018 presented in comparative format (Contd.)

 

NOTE 4 – BREAKDOWN OF CERTAIN ITEMS OF THE CONSOLIDATED STATEMENTS OF FINANCIAL POSITION AND THE CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Contd.)

 

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (Contd.)

 

   03.31.18   12.31.17 
   $ 
Other non-current receivables          
Tax credits   754,217    754,217 
Trust for Strengthening   2,662,532,478    2,549,103,960 
    2,663,286,695    2,549,858,177 
           
Accounts payable and other current          
Obligations payable   303,046,283    419,020,984 
Suppliers   763,382,789    685,513,316 
Foreign suppliers   38,000,034    44,080,464 
Related Parties (Note 7)   73,537,565    86,767,660 
Salaries and social security liabilities   364,509,747    422,441,830 
Other fiscal liabilities   93,151,438    100,735,179 
    1,635,627,856    1,758,559,433 
           
Accounts payable and other non-current          
Tax liabilities   112,098,768    128,108,326 
Suppliers   5,684,800    - 
    117,783,568    128,108,326 

 

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

 

   03.31.18   03.31.17 
   $ 
Revenues          
Aeronautical revenues   2,372,180,272    1,740,047,087 
Non-Aeronautical revenues   1,602,935,602    1,271,209,047 
    3,975,115,874    3,011,256,134 
 17 
 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Consolidated Financial Statements

At March 31, 2018 presented in comparative format (Contd.)

 

NOTE 4 – BREAKDOWN OF CERTAIN ITEMS OF THE CONSOLIDATED STATEMENTS OF FINANCIAL POSITION AND THE CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Contd.)

 

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (Contd.)

 

   03.31.18    03.31.17  
   $  
Other income and expenses net         
Trust for Strengthening   98,812,557    74,808,468 
Others   (5,991,290)   (2,218,104)
    92,821,267    72,590,364 
           
Finance Income          
Interest   16,127,745    282,176,554 
Foreign Exchange differences   155,897,701    (148,386,965)
    172,025,446    133,789,589 
           
Finance Cost          
Interest   (80,176,000)   (344,361,270)
Foreign Exchange differences   (613,188,759)   143,315,446 
    (693,364,759)   (201,045,824)
    (521,339,313)   (67,256,235)
           
Income Tax          
Current   (331,281,483)   (267,890,123)
Deferred   (7,037,079)   (27,424,184)
    (338,318,562)   (295,314,307)

 

 18 
 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Consolidated Financial Statements

At March 31, 2018 presented in comparative format (Contd.)

 

NOTE 5 – INTANGIBLE ASSETS

 

   03.31.18   03.31.17 
   $ 
Original Values          
Balance at January 1   12,650,633,023    8,806,384,322 
Acquisition   876,021,046    497,180,256 
Balance at March 31   13,526,654,069    9,303,564,578 
           
Accumulated Amortization          
Balance at January 1   (2,026,577,310)   (1,500,497,074)
Amortization of the period (Note 10)   (135,689,505)   (121,052,069)
Balance at March 31   (2,162,266,815)   (1,621,549,143)
Total Net Balance at March 31   11,364,387,254    7,682,015,435 

 

During the period ended March 31, 2018, the Group has capitalized expenses for finance interest for the amount of $66,992,074.

 

No expenses for finance interest have been capitalized during the period ended March 31, 2017.

 

NOTE 6 – BORROWINGS

 

   03.31.18   12.31.17 
   $ 
Non-current          
Bank borrowings   -    - 
Negotiable Obligations   8,059,600,000    7,459,600,000 
Finance lease liabilities   39,032,127    39,501,664 
Cost of issuance of Negotiable Obligations   (95,244,538)   (97,940,139)
Total Non-Current   8,003,387,589    7,401,161,525 
Current          
Bank borrowings   12,680,843    17,865,756 
Negotiable Obligations   103,338,652    96,126,536 
Finance lease liabilities   40,087,286    35,983,827 
Total Current   156,106,781    149,976,119 
Total   8,159,494,370    7,551,137,644 

 

 19 
 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Consolidated Financial Statements

At March 31, 2018 presented in comparative format (Contd.)

 

NOTE 6 – BORROWINGS (Contd.)

 

Changes in borrowings:

 

   2018   2017 
   $ 
Balance at January 1   7,551,137,644    3,115,254,471 
New borrowings   11,969,823    6,314,120,194 
Payments of borrowings   (152,120,543)   (3,261,430,018)
Accrued interests   140,196,704    330,119,858 
Foreign Exchange differences   608,310,742    (277,660,033)
Net Balance at March 31   8,159,494,370    6,220,404,472 

 

Following the end of the current year, on February 6, 2017, the Company issued negotiable obligations for US$400.000.000 with maturity on February 1, 2027, with an interest rate of 6,875% and an issue price of 99,888% par value. Payment of principal will have a quarterly amortization in 32 quarters, identical and consecutive, payable from May 1, 2019.

 

These negotiable obligations are guaranteed by a Trust under the Argentine Law, by which the Company has transferred and assigned use fees of international and regional airports and the Concession Indemnification Rights. This guarantee has been approved by the ORSNA on January 17, 2017, through Resolution Nº 1/2017, that resolved to “authorize the Concession (…) a collateral assignment of up to US$ 400.000.000 (…)”.

 

 20 
 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Consolidated Financial Statements

At March 31, 2018 presented in comparative format (Contd.)

 

NOTE 6 – BORROWINGS (Contd.)

 

According to the Offering Memorandum of Negotiable Obligations, dated January 19, 2017 and later modified on January 23, 2017 the Company will use the proceeds of the offering notes in compliance with Article 36 of the Negotiable Obligations Law to (i) refinance the liabilities of the Company including (a) the total payment of negotiable obligations issued on December 22, 2010; and (b) negotiable obligations Class “A” and Class “C”, issued by the Company in Argentina on April 21, 2010, plus accrued and unpaid interest to the date of redemption and the applicable prepayment premiums as long as they have not been redeemed before issue date and maturity with the Company’s funds and (ii) the remainder will be applied to finance infrastructure works in the airports of Group “A” of the Company. On January 23, 2017, the negotiable obligations issued in April 2010 were redeemed in full with the Company’s own funds, so the amount equivalent to the mentioned redemption will be aimed at infrastructure works in the airports of the Company belonging to Group “A” of the National System of Airports.

 

On March 13, 2017 it made an early and whole redemption of the remaining value of negotiable obligations issued in December 2010 for the amount of principal of U$D 157,500,000.

 

On December 31, 2016 the item Cash and Cash Equivalents of the statements of Financial Position included $ 490,566,044 to guarantee the payment of negotiable obligations valid at that date and early redeemed during the year.

 

On March 31, 2018, the reasonable value of negotiable obligations issued in February 2017 is of $7,949,515,999. Such method of valuation is classified according to NIIF 13 as hierarchy of reasonable value Level 2 (quotation prices (not adjusted) in active markets for identical assets or liabilities).

 

 21 
 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Consolidated Financial Statements

At March 31, 2018 presented in comparative format (Contd.)

 

NOTE 7 – BALANCES AND TRANSACTIONS WITH RELATED PARTIES

 

Balances with other related companies as of March 31, 2018 and December 31, 2017 are as follows:

 

   03.31.18   12.31.17 
   $ 
Trade receivables net- Current          
Other related companies   1,939,563    4,565,000 
    1,939,563    4,565,000 
           
Accounts payable and other- Current          
Other related companies   73,537,565    86,767,660 
    73,537,565    86,767,660 
           
Provisions and other charges          
Other related companies   426,249    426,249 
Shareholders   195,000,000    245,000,000 
    195,426,249    245,426,249 

 

During the three-month periods ended March 31, 2018 and 2017 the Group has charged to the cost $ 15,355,799 and $ 20,617,324 respectively with Proden SA for management control services, financial assistance, internal audit, out sourcing of systems and technology and rental and maintenance of offices. AA2000 has charged to the cost for the period of three months ended March 31, 2018 $ 5,591,238 with Servicios Integrales América for out sourcing of systems and technology. During the three-month periods ended March 31, 2018 and 2017, the Group has accrued with Helport S.A. to intangible assets $ 125,509,784 (including the Ezeiza runway refurbishment works, Tucumán runway extension, Palomar terminal remodeling, among others) and $ 26,187,073 respectively, at cost $ 20,557,300 and $ 12,649,502 respectively. Likewise, AA2000 has accrued at March 31, 2017 intangible assets for $ 2,422,091 respectively corresponding to the work of Mendoza carried out by Jose Cartellone - Helport – join venture.

 

During the period ended March 31, 2018, $ 50,000,000 of dividends have been paid to the shareholders according to their shareholding.

 

At March 31, 2018 and December 31, 2017 the Group owed the Argentine National Government $195,676,512 and $176,591,493 respectively, corresponding to the specific allocation of revenues of each period (see Note 10) and has recorded a receivable for $2,662,532,478 and $2,549,103,960 respectively corresponding to the Trust for Strengthening to fund the infrastructure works of AA2000.

 22 
 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Consolidated Financial Statements

At March 31, 2018 presented in comparative format (Contd.)

 

NOTE 7 – BALANCES AND TRANSACTIONS WITH RELATED PARTIES (Contd.)

 

Furthermore, short-term compensation to key management was $11,554,503 and $12,140,452 for the three month periods ended March 31, 2018 and 2017 respectively.

 

In connection with foreign exchange transactions related to the technical and administrative assistance agreements with Corporación América Sudamericana and Ogden Corporation, on November 23, 2012 The Company was notified of a foreign exchange summon initiated by the Banco Central de la República Argentina (Central Bank of the República Argentina or BCRA) regarding compliance with the existing legislation. On February 4, 2013, AA2000 presented defense procedures to the BCRA rejecting the allegations of such entity. In July 2016, sentence was passed favorable to the Company, non-appealable at the time of presentation of these financial statements.

 

In June 2016, the Company received a determination from the Federal Administration of Public Revenue (AFIP) was objecting the abovementioned items corresponding to the fiscal years 2009 to 2012 resulting in a claim for unpaid income tax based on considering those foreign exchange transactions as undocumented payments. On August 3, 2016, the Company appealed the mentioned determinations to the Argentine Tax Court.

 

Although the Company considers it has solid arguments to demonstrate the authenticity of the management and administrative services provided by Corporación América Sudamericana S.A., it decided to enter the Extraordinary Tax Law to regularize tax obligations established by Law Nº 27.260. According to the Law, benefits of adhesion consist in the suspension of ongoing tax actions, extinction of the criminal tax action, remission of fines and other penalties non executable at the time of adhesion and reduction of interest. The corresponding debt for this item is registered in commercial accounts payable and others, current and non-current.

 

Corporación America S.A. is the direct owner of 45.90% of the common shares of the Company, and an indirect owner through Corporación America Sudamericana S.A of 29.75% of the common shares of the Company, therefore is the immediate controlling entity of the Company.

 

 23 
 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Consolidated Financial Statements

At March 31, 2018 presented in comparative format (Contd.)

 

NOTE 7 – BALANCES AND TRANSACTIONS WITH RELATED PARTIES (Contd.)

 

Corporación América S.A is controlled by Cedicor S.A, which is the owner of the 95.37% of its capital stock. Cedicor S.A is 100% controlled by American International Airports LLC which is 100% controlled by Corporación América Airports S.A.

 

The ultimate beneficiary of the Company is Southern Cone Foundation. Its purpose is to manage its assets through decisions adopted by its independent Board of Directors. The potential beneficiaries are members of the Eurnekian family and religious, charitable and educational institutions.


NOTE 8 – BAD DEBT PROVISIONS

 

   2018   2017 
   $ 
Initial balance at January 1   154,777,968    70,486,558 
IFRS 9 adjustments at the beginning   (72,072,148)   - 
Balance at January 1   82,705,820    70,486,558 
Increases (Note 10)   3,978,860    1,962,054 
Final Balance at March 31   86,684,680    72,448,612 

 

NOTE 9 - PROVISIONS AND OTHER CHARGES

 

   Litigation   Related
parties
   Deferred
Income
  

Trust for
works-Portfolio
of Projects
2012/2014

(Note 1.2)

   Guarantees
Received
   Customer
Prepayments
   Upfront fees from
concessionaires
   Dividends to be
paid
   Others   Total 
                                         
At January 1, 2018   58,306,955    426,249    92,117,996    75,327,522    31,104,767    -    60,332,473    245,000,000    -    562,615,962 
Increases   4,842,062    -    40,845,825    226,074,669    10,329,169    -    6,298,955    -    -    288,390,680 
Decreases   -    -    -    (217,581,610)   (1,814,309)   -    -    (50,000,000)   -    (269,395,919)
Accruals   -    -    (51,976,020)   -    -    -    (7,230,721)   -    -    (59,206,741)
At March 31, 2018   63,149,017    426,249    80,987,801    83,820,581    39,619,627    -    59,400,707    195,000,000    -    522,403,982 
                                                   
At January 1, 2017   33,138,995    426,249    69,291,843    57,149,494    24,948,834    86,078,277    51,553,692    -    23,678    322,611,062 
Increases   4,515    -    29,193,441    188,111,872    6,692,000    -    35,814,885    -    -    259,816,713 
Decreases   -    -    -    (186,037,640)   (3,529,986)   (30,674,277)   -    -    (23,678)   (220,265,581)
Accruals   -    -    (39,591,454)   -    -    -    (14,553,771)   -    -    (54,145,225 
At March 31, 2017   33,143,510    426,249    58,893,830    59,223,726    28,110,848    55,404,000    72,814,806    -    -    308,016,969 

 

 24 
 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Consolidated Financial Statements

At March 31, 2018 presented in comparative format (Contd.)

 

NOTE 10 - COSTS OF SALES, ADMINISTRATIVE, DISTRIBUTION, AND SELLING EXPENSES

 

Item  Cost of sales   Administrative
expenses
   Distribution and
selling expenses
   Total 
   $ 
Three month period ended at 03.31.18                    
Specific allocation of revenues   592,875,342    -    -    592,875,342 
Airport services and maintenance   544,441,125    6,781,439    3,154,297    554,376,861 
Amortization of intangible assets   134,052,551    1,382,134    254,820    135,689,505 
Depreciation of property, plant and equipment   995,412    -    -    995,412 
Salaries and social security contributions   499,119,997    73,793,639    18,340,167    591,253,803 
Fees for services   12,985,143    10,326,545    2,566,638    25,878,326 
Public utilities and contributions   90,434,041    715,898    340,781    91,490,720 
Taxes   16,153,975    42,613,195    209,494,343    268,261,513 
Office expenses   56,122,247    41,097,773    1,707,586    98,927,606 
Insurance   10,623,114    676,531    -    11,299,645 
Advertising expenses   -    -    7,586,285    7,586,285 
Bad debts charges   -    -    3,978,860    3,978,860 
Board of Directors and Supervisory Committee fees   -    3,441,000    -    3,441,000 
Other   1,966,854    396,465    54,016    2,417,335 
Total at 03.31.18   1,959,769,801    181,224,619    247,477,793    2,388,472,213 
Three month period ended at 03.31.17                    
Specific allocation of revenues   448,850,808    -    -    448,850,808 
Airport services and maintenance   415,252,403    7,801,351    2,368,155    425,421,909 
Amortization of intangible assets   119,404,431    1,395,608    252,030    121,052,069 
Depreciation of property, plant and equipment   845,722    -    20    845,742 
Salaries and social security contributions   409,558,028    53,447,895    9,986,809    472,992,732 
Fees for services   14,816,309    21,229,201    1,235,532    37,281,042 
Public utilities and contributions   69,411,863    557,904    516,695    70,486,462 
Taxes   10,671,708    34,615,069    156,888,087    202,174,864 
Office expenses   27,205,168    45,077,760    1,390,064    73,672,992 
Insurance   7,332,190    1,044,101    -    8,376,291 
Advertising expenses   -    -    9,905,746    9,905,746 
Bad debts charges   -    -    1,962,054    1,962,054 
Board of Directors and Supervisory Committee fees   -    2,800,500    -    2,800,500 
Other   1,634,454    461,334    1,455    2,097,243 
Total at 03.31.17   1,524,983,084    168,430,723    184,506,647    1,877,920,454 

 

 25 
 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Consolidated Financial Statements

At March 31, 2018 presented in comparative format (Contd.)

 

NOTE 11- FOREIGN CURRENCY ASSETS AND LIABILITIES

 

Item  Foreign currency type
and amount at 03.31.18
   Foreign
exchange
rates
   Amount in local
currency at
03.31.18
   Amount in local
currency at
12.31.17
 
           $ 
ASSSETS                                               
CURRENT ASSETS                    
Cash and cash equivalents  US$60,985,896    20.0490    1,222,706,228    1,599,688,612 
Trade receivables  US$47,487,295    20.0490    952,072,784    772,194,685 
Other borrowings  US$1,595,483    20.0490    31,987,839    15,502,290 
Total current assets             2,206,766,851    2,387,385,587 
Total assets             2,206,766,851    2,387,385,587 
LIABILITIES                    
CURRENT LIABILITIES                    
Accounts payable and others  US$2,001,179    20.1490    40,321,759    62,605,327 
   Euros868,587    24.8397    21,575,434    12,907,006 
Borrowings  US$5,502,474    20.1490    110,869,341    101,634,365 
Total current liabilities             172,766,534    177,146,698 
                     
NON-CURRENT LIABILITIES                    
Borrowings  US$400,595,345    20.1490    8,071,595,606    7,474,997,006 
Total non-current liabilities             8,071,595,606    7,474,997,006 
Total liabilities             8,244,362,140    7,652,143,704 
Net liability position             6,037,595,289    5,264,758,117 
 26 
 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Consolidated Financial Statements

At March 31, 2018 presented in comparative format (Contd.)

 

NOTE 12 – OTHER RESTRICTED ASSETS

 

Other than what is mentioned in Notes 1 and 6, Other Receivables in Current assets at March 31, 2018 and 2017 include $5,472,910 and $5,233,718 corresponding to guarantees granted to third parties in connection with lease agreements.

 

NOTE 13 - CAPITAL STOCK

 

At March 31, 2018 capital stock is as follows:

 

   Par Value 
   $ 
Paid-in and subscribed   875,431,652 
Registered with the Public Registry of Commerce   875,431,652 

 

The Company’s capital stock is comprised of 258,517,299 common shares of $1 par value and one vote each and 616,914,353 preferred non-voting shares of $1 par value. Preferred shares will have voting rights on the following matters: i) partial or total capital reimbursement; ii) during the period benefits of preferred shareholders are granted but not received; iii) the appointment of a full and an alternate director and a full and an alternate syndic; and iv) in the remaining cases established by Corporate Law No. 19550.

 

Subsequent to the closing, in the ordinary general meeting, special shareholders of classes A, B, C and D and special preferred shares held on April 9, 2018, the capital increase was resolved from $875,431,652 to $887,769,939, that is, in the amount of $12,338,287, through the issuance of 12,338,287 preferred shares of $1 par value each, without the right to vote. Said increase is pending registration in the Public Registry of Commerce

 

Furthermore, according to the requirements of General Resolution 629 issued by the National Securities Commission (CNV), the books and accounting records of the Company are located in the fiscal address located in Honduras 5673, Autonomous City of de Buenos Aires. In addition AA2000 has certain supporting accounting and operating documentation in the warehouses of Bank S.A. in the Province of Buenos Aires, Garín (Ruta Panamericana km. 37,5), Pacheco (Ruta Panamericana km. 31,5), Munro (Av Fleming 2190) and Avellaneda (General Rivadavia 401).

 

 27 
 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Consolidated Financial Statements

At March 31, 2018 presented in comparative format (Contd.)

 

NOTE 14 – DIVIDENDS ON PREFERRED SHARES

 

The preferred dividend accrued for the year ended December 31, 2017 is of $12,338,287 approved by the Ordinary General Special Meeting of class A, B, C and D and special of preferred shares held on April 9, 2018.

 

Likewise, the preferred dividend accrued for the period of three months ended March 31, 2018 is of $3,146,263 and will be registered at the time of approval of the Shareholders Meeting.

 

NOTE 15 – RESOLUTIONS OF SHAREHOLDERS’ ORDINARY AND SPECIAL MEETINGS OF CLASS A, B, C AND D SPECIAL OF PREFERRED SHARES OF AEROPUERTOS ARGENTINA 2000 S.A. HELD ON APRIL 26, 2017 AND APRIL 9, 2018

 

The general ordinary and special meeting of class A, B, C and D and special of preferred shares held on April 26, 2017 decides among other issues:

 

-That the income of the year ended December 31, 2016 has the following destination:

 

(i)$63,338,434 for the constitution of the legal reserve;
   
(ii)$12,096,360 to the distribution of dividends corresponding to the preferred shares subscribed by the Argentine National Government according to the resolutions of the general extraordinary meeting of the Company´s Shareholders held on March 6, 2008 and clause 14 and attachment VII of The Memorandum of Understanding for the Restatement of the Concession Agreement, payable in preferred shares;
   
(iii)the remaining of $1,933,656,787: (a) $1,180,000,000 to the distribution of dividends in cash among shareholders of class A, B, C and D of shares, according to their subscription; and (b) $753,656,787, together with the facultative reserve for compliance of works for the year 2016, to the total amount of $963,656,787, to guarantee payment of future dividends.

 

 28 
 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Consolidated Financial Statements

At March 31, 2018 presented in comparative format (Contd.)

 

NOTE 15 – RESOLUTIONS OF SHAREHOLDERS’ ORDINARY AND SPECIAL MEETINGS OF CLASS A, B, C AND D SPECIAL OF PREFERRED SHARES OF AEROPUERTOS ARGENTINA 2000 S.A. HELD ON APRIL 26, 2017 AND APRIL 9, 2018 (Contd.)

 

-issue 12,096,360 preferred shares of $1 par value under the same terms of the preferred shares issued in favor of the Argentine National Government as per class A, B and C Shareholders General Extraordinary and Special Meeting held on March 6, 2008;

 

-increase the capital stock from $863,335,292 to $875,431,652, i.e., in the amount of $12,096,360, through the issuance of 12,096,360 preferred shares of $ 1 par value, with no vote;

 

-that the preferred shares are subscribed fully by the Argentine National Government;

 

-delegate in the Board of Directors the registry in the Shareholders’ Registry of the capital stock increase decided; and

 

-delegate in the Board of Directors the time and opportunity of distribution of dividends to the shareholders of ordinary shares class A, B, C and D, according to cash flow, based on their subscription. To that purpose, it will be considered the request of the National Government to apply an equivalent amount to the dividends distributed to the Works of infrastructure additional to the contract commitments and any other commitment undertaken by the Company in the National System of Airports

 

The general ordinary and special meeting of class A, B, C and D and special of preferred shares held on April 9, 2018 decides among other issues:

 29 
 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Consolidated Financial Statements

At March 31, 2018 presented in comparative format (Contd.)

 

NOTE 15 – RESOLUTIONS OF SHAREHOLDERS’ ORDINARY AND SPECIAL MEETINGS OF CLASS A, B, C AND D SPECIAL OF PREFERRED SHARES OF AEROPUERTOS ARGENTINA 2000 S.A. HELD ON APRIL 26, 2017 AND APRIL 9, 2018 (Contd.)

 

-That the income of the year ended December 31, 2017 has the following destination:

 

(i)$2,419,272 for the constitution of the legal reserve;
   
(ii)$12,338,287 to the distribution of dividends corresponding to the preferred shares subscribed by the Argentine National Government according to the resolutions of the general extraordinary meeting of the Company´s Shareholders held on March 6, 2008 and clause 14 and attachment VII of The Memorandum of Understanding for the Restatement of the Concession Agreement, payable in preferred shares;
   
(iii)the remaining of $2,669,727,436 to the facultative reserve for compliance of works for future plans.

 

-issue 12,338,287 preferred shares of $1 par value under the same terms of the preferred shares issued in favor of the Argentine National Government as per class A, B and C Shareholders General Extraordinary and Special Meeting held on March 6, 2008;

 

-increase the capital stock from $875,431,652 to $887,769,939, i.e., in the amount of $12,338,287, through the issuance of 12,338,287 preferred shares of $ 1 par value, with no vote;

 

-that the preferred shares are subscribed fully by the Argentine National Government;and

 

-delegate in the Board of Directors the registry in the Shareholders’ Registry of the capital stock increase decided.

 

 30 
 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Consolidated Financial Statements

At March 31, 2018 presented in comparative format (Contd.)

 

NOTE 16 – EARNINGS PER SHARE

 

The Shareholders’ General Extraordinary Meeting held on March 6, 2008, approved by the ORSNA on April 25, 2008, earnings per share is calculated as net income for the year less accrued preferred shares dividends for the year, divided by the number of common shares.

 

   03.31.2018   03.31.2017 
Income for the period, net accrued dividends   818,026,943    840,978,346 
Amount of ordinary shares   258,517,299    258,517,299 
Earnings per shares   3.1643    3.2531 

 

NOTE 17- FINANCIAL RISK MANAGEMENT

 

The Group is exposed by its activities to several financial risks: market risk (including risk of exchange rate, risk of fair value due to interest rate and price risk), credit risk and liquidity risk.

 

These Condensed Consolidated Interim Financial Statements do not include all the information on financial risk management requested in the annual financial statements, thus they should be read together with the financial statements audited at December 31, 2017.

 

There have been no changes in the risk management policies since the last yearly closing.

 

 31 
 

 

Aeropuertos Argentina 2000 S.A.

Consolidated Financial Statements

At March 31, 2018 presented in comparative format

Summary of Information required by Resolution N ° 368/01

of the National Securities Commission

 

Presentation base

 

The information contained in this Summary has been prepared in accordance with Resolution No. 368/01 of the National Securities Commission ("CNV") and should be read in conjunction with the Condensed Consolidated Interim Financial Statements as of March 31, 2018 presented in comparative form and the Consolidated Financial Statements as of December 31, 2017 presented in comparative form. Prepared in accordance with IFRS standards.

 

1. General considerations

 

International Financial Reporting Standards (IFRS)

 

The National Securities Commission ("CNV"), through General Resolutions No. 562/09 and 576/10, has established the application of Technical Resolutions No. 26 and 29 of the Argentine Federation of Professional Councils of Economic Sciences, which they adopt IFRS (IFRS), issued by the International Accounting Standards Board (IASB), for entities included in the public offering regime of Law No. 17,811, either for their capital or for their negotiable obligations, or who have requested authorization to be included in the aforementioned regime.

 

The application of such standards is mandatory for the Company as of the fiscal year beginning on January 1, 2012.

 

·Seasonality

 

The Company's revenues are highly influenced by the seasonality of air traffic in Argentina. The traffic of planes and passengers and, consequently, the income of the Company are higher during the summer and winter months (December - February and July - August), basically because they are holiday periods.

 

The main works carried out during the quarter ended on March 31, 2018 are detailed below:

 32 
 

 

Aeropuertos Argentina 2000 S.A.

Consolidated Financial Statements

At March 31, 2018 presented in comparative format

Summary of Information required by Resolution N ° 368/01

of the National Securities Commission

 

1. General considerations (Contd.)

 

Ezeiza International Airport:

 

The following works are in the execution stage:

§Expansion of the luggage removal hall in international arrivals in Terminal A.
§New Control Tower.
§Beacon ring and main electrical substation.
§Improved Lighting in Access to Waste Area.
§Building of Departures - Hall B. The work of excavation, foundations and Reinforced Concrete is in execution. It was awarded the Covered Metal Structure and the Courtain Wall of the Departures Building
§The Remodeling of Pre-boarding Plant Ata Terminal A Stage 2 is being executed.
§The work of Rehabilitation Header 29 and Filming to Header 35 Stage 1 (crossing) (Includes Beaconing) is in execution.

 

Jorge Newbery Airport:

 

The following work is completed:

 

§Hall Extension of Check in Building IV

 

The following works are in the execution stage:

§New Vertical Circulation core - building IV
§Rebuilding Building IV ARSA Offices
§Installation telescopic walkway in fixed bridge

 

Comodoro Rivadavia Airport:

 

The New Passenger Terminal of 7560 m2 is being executed. It has an execution period of 22 months.

The work for the new parking is being executed.

 33 
 

 

Aeropuertos Argentina 2000 S.A.

Consolidated Financial Statements

At March 31, 2018 presented in comparative format

Summary of Information required by Resolution N ° 368/01

of the National Securities Commission

 

1. General considerations (Contd.)

 

Córdoba Airport:

 

The work of the airport entrance station is being executed and the work to extend the parking lot is being tendered.

 

Iguazú Airport:

 

§Work began on the remodeling and expansion of the passenger terminal.
§The work of the new parking is being executed.
§The track resurfacing and rehabilitation works are being executed
§The work of the Track Beacon and New posters of vertical signaling in the movement area is being executed.
§The work of the Expansion of the commercial platform is being executed

 

Bariloche Airport:

 

§Work is underway for the new sewage treatment plant

 

Tucumán Airport:

 

§The Study of Arq Cesar Pelli is developing a project for the new Tucuman terminal.

 

San Fernando Airport:

 

Work continues on the development of the projects for the new passenger terminal, hangars, new control tower and new SEI fire station.

 

Santa Rosa Airport:

 

A project to remodel the terminal is being developed.

The PAPIs installation work is being executed.

The work of the perimeter fence is being executed.

 

 34 
 

 

Aeropuertos Argentina 2000 S.A.

Consolidated Financial Statements

At March 31, 2018 presented in comparative format

Summary of Information required by Resolution N ° 368/01

of the National Securities Commission

 

1. General considerations (Contd.)

 

San Juan Airport:

 

The remodeling of the passenger terminal has begun.

The work of the New Parking and Collection Booths is being executed.

 

Esquel Airport:

 

The work of integral remodeling of the passenger terminal is being tendered.

 

Jujuy Airport:

 

The work of integral remodeling of the passenger terminal has begun.

The work of the new parking and roads is under construction.

The construction of the New Technical Building was completed.

 

Salta Airport:

 

The work of the Nucleus of Vertical Circulation Domestic and International Arrivals is being executed.

The main and secondary track resurfacing work is being carried out, as well as re-arrangements in filming and expansion of the commercial platform.

 

Master Plans:

 

The Master Plans of the Airports are in execution according to the schedule agreed with the ORSNA

 

 35 
 

 

Aeropuertos Argentina 2000 S.A.

Consolidated Financial Statements

At March 31, 2018 presented in comparative format

Summary of Information required by Resolution N ° 368/01

of the National Securities Commission

 

2. Equity structure

 

In order to appreciate the evolution of the Company's activities, the comparative consolidated equity structure of the financial statements as of March 31, 2018, 2017, 2016, 2015, and 2014, respectively, is presented.

 

   03.31.18   03.31.17   03.31.16   03.31.15   03.31.14 
   Thousands $ 
Current Asset   4,262,346    5,383,071    1,409,890    991,950    655,017 
Non-current Assets   14,056,804    9,528,272    6,727,566    5,447,187    4,499,521 
Total Assets   18,319,150    14,911,343    8,137,456    6,439,137    5,154,538 
                          
Current liabilities   2,710,390    2,722,221    2,092,111    1,580,648    976,120 
Non- Current Liabilities   8,292,394    6,411,245    2,859,957    2,157,514    2,295,325 
Total Liabilities   11,002,784    9,133,466    4,952,068    3,738,162    3,271,445 
Net equity attributable to majority shareholders   7,306,343    5,768,602    3,178,309    2,697,474    1,879,944 
Non-controlling interest   10,024    9,275    7,079    3,501    3,149 
Net Equity   7,316,366    5,777,877    3,185,388    2,700,975    1,883,093 
Total   18,319,150    14,911,343    8,137,456    6,439,137    5,154,538 

 

 36 
 

 

Aeropuertos Argentina 2000 S.A.

Consolidated Financial Statements

At March 31, 2018 presented in comparative format

Summary of Information required by Resolution N ° 368/01

of the National Securities Commission

 

3. Results structure

 

The following is a summary of the evolution of the consolidated statements of comprehensive income for the three month periods ended March 31, 2018, 2017, 2016, 2015 and 2014.

 

   03.31.18   03.31.17   03.31.16   03.31.15   03.31.14 
   Thousands $ 
Gross Profit   2,016,712    1,486,981    1,021,340    623,381    489,195 
Administrative and distribution and marketing expenses   (428,702)   (352,938)   (268,033)   (165,367)   (122,459)
Other income and expenses, net   92,821    72,590    54,013    32,757    29,189 
Operating profit   1,680,831    1,206,633    807,320    490,771    395,925 
Income and financial costs   (521,339)   (67,256)   (403,464)   (130,575)   (446,952)
Result of investments accounted for using the equity method   -    -    -    (56)   - 
Income before income tax   1,159,492    1,139,377    403,856    360,140    (51,027)
Income tax   (338,319)   (295,314)   (140,000)   (122,623)   17,205 
Result of the period   821,173    844,063    263,856    237,517    (33,822)
Other comprehensive incomes   -    -    -    -    - 
Comprehensive income for the period   821,173    844,063    263,856    237,517    (33,822)
Result attributable to majority shareholders   822,321    843,120    261,918    237,299    (33,498)
Non-controlling interest   (1,148)   943    1,938    218    (324)
 37 
 

 

Aeropuertos Argentina 2000 S.A.

Consolidated Financial Statements

At March 31, 2018 presented in comparative format

Summary of Information required by Resolution N ° 368/01

of the National Securities Commission

 

4. Cash flow structure

 

   03.31.18   03.31.17   03.31.16   03.31.15   03.31.14 
   Thousands $ 
Cash Flows provided by operating activities   316,846    208,087    392,576    136,284    103,292 
Cash Flow used in investing activities   (31)   (1,425)   (135)   (638)   (43)
Cash Flow provided by / (used in) financing activities   (202,121)   3,541,136    (308,689)   (168,845)   (85,917)
Net Cash Flow provided by / (used in) of the period   114,694    3,747,798    83,752    (33,199)   17,332 

 

5. Analysis of operations for the three month periods ended March 31, 2018 and 2017

 

Results of operations

 

·Income

 

The following table shows the composition of consolidated revenues for the three month periods ended March 31, 2018 and 2017:

 

Revenues  03.31.18  

%

revenues

   03.31.17  

%

revenues

 
   Thousands $       Thousands $     
Aeronautical revenues   2,372,180    59.68%   1,740,047    57.78%
Non-aeronautical revenues   1,602,936    40.32%   1,271,209    42.22%
Total   3,975,116    100.00%   3,011,256    100.00%

 

 38 
 

 

Aeropuertos Argentina 2000 S.A.

Consolidated Financial Statements

At March 31, 2018 presented in comparative format

Summary of Information required by Resolution N ° 368/01

of the National Securities Commission

 

5. Analysis of operations for the three month periods ended March 31, 2018 and 2017 (Contd.)

 

The following table shows the composition of the aeronautical revenues for the three month periods ended March 31, 2018 and 2017:

 

Aeronautical revenues  03.31.18  

%

revenues

   03.31.17  

%

revenues

 
   Thousands $       Thousands $     
Landing fee   192,581    8.12%   149,344    8.58%
Parking fee   78,678    3.32%   63,119    3.63%
Air station use rate   2,100,921    88.57%   1,527,584    87.79%
Total   2,372,180    100.0%   1,740,047    100.0%

 

Costs of sale

 

The cost of sales had the following variation:

 

   Thousands $ 
Costs of sales for the period ended 03.31.18   1,959,770 
Costs of sales for the period ended 03.31.17   1,524,983 
Variation   434,787 

 

Administrative Expenses

 

The administrative expenses had the following variation:

 

   Thousands $ 
Administrative expenses for the period ended 03.31.18   181,225 
Administrative expenses for the period ended 03.31.17   168,431 
Variation   12,794 

 

 39 
 

 

Aeropuertos Argentina 2000 S.A.

Consolidated Financial Statements

At March 31, 2018 presented in comparative format

Summary of Information required by Resolution N ° 368/01

of the National Securities Commission

 

5. Analysis of operations for the three month periods ended March 31, 2018 and 2017 (Contd.)

 

Distribution and marketing expenses

 

The distribution and marketing expenses had the following variation:

 

   Thousands
$
 
Distribution and commercial expenses for the period ended 03.31.18   247,478 
Distribution and commercial expenses for the period ended 03.31.17   184,507 
Variation   62,971 

 

Income and financial costs

 

Net financial income and costs totaled a loss of $521,339 thousand during the three month period ended March 31, 2018 with respect to thousands of $67,256 loss during the same period of the previous year.

 

The variation is mainly due to losses arising from exposure to foreign currency.

 

Other incomes and expenses

 

The other net incomes and expenses item recorded a gain of approximately $92,821 thousand during the three month period ended March 31, 2018 with respect to a gain of $72,590 thousand in the same period of the previous year.

 

Liquidity and Capital Resources

 

Capitalization

 

The total capitalization of the Group as of March 31, 2018 amounted to $15,475,860 thousand composed of thousands of $8,159,494 of borrowings and a shareholder’s equity of $ 7,316,366 thousand, while the total capitalization of the Group as of March 31, 2018 amounted to thousands of $11,998,281 comprised of thousands of $6,220,404 of borrowings and a shareholder’s equity of thousands of $5,777,877.

 

The debt as a percentage of total capitalization amounted to approximately 52.72% as of March 31, 2018 and 51.84% as of March 31, 2017.

 

Financing

 

See in detail Note 6 to these Consolidated Financial Statements.

 40 
 

 

Aeropuertos Argentina 2000 S.A.

Consolidated Financial Statements

At March 31, 2018 presented in comparative format

Summary of Information required by Resolution N ° 368/01

of the National Securities Commission

 

6. Index

 

The information refers to the periods ended March 31, 2018, 2017, 2016, 2015 and 2014:

 

   03.31.18   03.31.17   03.31.16   03.31.15   03.31.14 
Liquidity (1)   1.62    2.03    0.69    0.64    0.68 
Solvency (1)   0.67    0.64    0.66    0.74    0.59 
Immobilization of capital   0.77    0.64    0.83    0.85    0.87 
Cost effectiveness   0.12    2.03    0.69    0.64    0.68 

 

Note:

(1)   Current liabilities and non-current liabilities do not include deferred profits

 

7. Statistical data

 

The information detailed below is based on extra-budgetary statistics compiled by the Company. Number of passengers (in thousands) for the three month periods ended March 31, 2018, 2017, 2016, 2015 and 2014:

 

Airport  03.31.18   03.31.17   03.31.16   03.31.15   03.31.14 
     
Aeroparque   3,683    3,353    2,928    2,763    2,518 
Ezeiza   2,807    2,666    2,639    2,264    2,336 
Córdoba   874    687    551    447    417 
Mendoza   442    407    357    308    320 
Tucumán   219    169    159    131    115 
Bariloche   373    328    313    272    235 
C. Rivadavia   157    141    138    126    117 
Río Gallegos   60    68    77    65    63 
Iguazú   298    268    235    221    213 
Salta   286    270    235    208    174 
Total   9,199    8,357    7,632    6,805    6,508 
Overall Total   9,921    8,929    8,111    7,225    6,856 
Variation   11.1%   10.0%   12.3%   5.4%   4.4%

 

 41 
 

 

Aeropuertos Argentina 2000 S.A.

Consolidated Financial Statements

At March 31, 2018 presented in comparative format

Summary of Information required by Resolution N ° 368/01

of the National Securities Commission

 

7. Statistical data (Contd.)

 

Amount of movement of aircraft for three month periods ended on March 31, 2018, 2017, 2016, 2015 and 2014 of the 10 airports that represent more than 80% of the total movements of the airport system:

 

Airport  03.31.18   03.31.17   03.31.16   03.31.15   03.31.14 
Aeroparque   34,123    32,788    29,234    30,109    28,185 
Ezeiza   18,517    17,243    17,872    16,091    17,040 
San Fernando   11,588    8,835    10,373    9,782    11,102 
Córdoba   8,204    6,724    5,652    4,792    4,929 
Mendoza   4,726    4,508    3,984    3,533    4,117 
Salta   3,100    3,703    2,530    2,994    2,445 
Tucumán   2,311    1,827    1,703    1,505    1,023 
Bariloche   3,464    3,252    3,045    2,670    2,587 
C. Rivadavia   2,432    1,920    2,024    2,051    2,575 
Iguazú   2,613    2,450    2,114    2,045    2,266 
Total   91,078    83,250    78,531    75,572    76,269 
Overall Total   108,169    99,478    93,472    90,446    90,285 
Variation   8.74%   6.40%   3.3%   0.2%   (4.8)%
 42 
 

 

Aeropuertos Argentina 2000 S.A.

Consolidated Financial Statements

At March 31, 2018 presented in comparative format

Summary of Information required by Resolution N ° 368/01

of the National Securities Commission

 

Perspectives for 2018

 

In the first quarter of this fiscal year, the company's passenger traffic had a very good evolution reaching 9.9 million, of which 5.9 million were domestic passengers and 4 million were international passengers, with growths of 12.7% in domestic and 7.8% in international compared to the previous year. In total, passenger traffic grew 11% compared to the first quarter of the previous year.

 

This evolution is part of the plans of the National Government to encourage increased passenger traffic allowing significant improvements in air connectivity across the country, consolidating the recovery of foreign visitors, which reached record levels in the quarter.

 

During the first quarter of this year, the Company made investments for $ 876 million. To this amount, it must be added the payments to the trusts of specific allocation for works for $ 218 million.

 

The prospects for the evolution of passenger traffic for the year 2018 are positive due to the expected growth of the economy in general, which has a direct effect on commercial air activity, and the opening of new international routes. To this, it must be added the aforementioned commercial air policy actions, in particular the start-up of the operations of several low-cost companies and the focus on the development of international connectivity.

 

As regards to the execution of investments in infrastructure, the continuation of works that began in 2017 and the start of new works of various sizes at various airports in the country is scheduled. We can highlight the continuation of the works of the B terminal of Ezeiza, improvements in Aeroparque, the new terminal of Comodoro Rivadavia, the airport of El Palomar, remodeling of the terminal of Iguazú, new passenger terminal of Jujuy, among other works that as a whole, will expand the operational capacity and also the quality and experience of the passenger.

 

 43 
 

  

“Free translation from the original in Spanish for publication in Argentina”

 

REPORT ON REVIEW OF CONDENSED CONSOLIDATED INTERIM

FINANCIAL STATEMENTS

 

To the Shareholders, Chairman and Directors of

Aeropuertos Argentina 2000 S.A.

Legal address: Suipacha 268 - Floor 12°

Autonomous City of Buenos Aires

Tax Code: 30-69617058-0

 

Introduction

 

We have reviewed the accompanying condensed consolidated interim financial statements of Aeropuertos Argentina 2000 S.A. and its subsidiaries ("the Company"), including the consolidated statement of financial position as at March 31, 2018, the consolidated statement of comprehensive income for the three-month periods ended March 31, 2018 and the consolidated statements of changes in shareholders' equity and of cash flows for the three-month period then ended and the selected explanatory notes.

 

The balances and other information for the year 2017 and for the interim periods are an integral part of these financial statements and, therefore, they should be considered in relation to those financial statements.

 

Board Responsibility

 

The Company's Board of Directors is responsible for the preparation and presentation of these financial statements in accordance with International Financial Reporting Standards (IFRS), adopted by the Argentine Federation of Professional Councils in Economic Sciences (FACPCE) as professional accounting standards and added by the National Securities Commission (CNV) to its regulations, as approved by the International Accounting Standard Board (IASB). Therefore, they are responsible for the preparation and presentation of the condensed consolidated interim financial statements mentioned in the first paragraph in accordance with International Accounting Standard No. 34 "Interim Financial Reporting" (IAS 34).

 

Scope of review

 

Our review was limited to the application of the procedures established in the International Standard on Review Engagements 2410, 'Review of interim financial information performed by the independent auditor of the entity', which was adopted as review standard in Argentina by Technical Pronouncement No. 33 of the FACPCE, as approved by the International Auditing and Assurance Standard Board (IAASB). A review of interim financial information consists of making inquiries to the company personnel responsible for the preparation of the information included in the condensed consolidated interim financial statements and in the performance of analytical and other review procedures. This review is substantially less in scope than an audit conducted in accordance with International Auditing Standards, and consequently, does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion on the consolidated statement of financial position, the consolidated statements of comprehensive income and cash flows of the Company.

 

 44 
 

 

Conclusion

 

Based on our review, nothing has come to our attention that causes us to believe that the condensed consolidated interim financial statements mentioned in the first paragraph, have not been prepared, in all material respects, in accordance with International Accounting Standard (IAS) No. 34.

 

Emphasis of matter

 

Without qualified or conclusion, we draw attention to Note 3.1 to the condensed consolidated interim financial statements, which describes that the Company has restated the figures as of March 31, 2017.

 

Report on the compliance with current regulations

 

In accordance with current regulations, in connection with Aeropuertos Argentina 2000, we report that:

 

a)the condensed consolidated interim financial statements of Aeropuertos Argentina 2000 S.A. have been transcribed into the “Inventory and Balance Sheet” book and, insofar as concerns our field of competence, are in compliance with the provisions of the General Corporations Law and pertinent resolutions of the National Securities Commission;

 

b)the separate condensed individual interim financial statements of Aeropuertos Argentina 2000 S.A. stem from accounting records kept, in all formal aspects in conformity with legal regulations, which maintain the security and integrity conditions based on which they were authorized by the National Securities Commission;

 

c)we have read the business highligths, about which, insofar as concerns our area of competence, we have no significant observations to make;

 

d)as of March 31, 2018, Aeropuertos Argentina 2000’s accrued debt with the Argentine Social Security System, which stems from the accounting records, amounted to $48,534,682, which was not yet due at that date.

 

Autonomous City of Buenos Aires, May 8, 2018.  
   
PRICE WATERHOUSE & CO. S.R.L.  
     
by (Partner)  
  Miguel A. Urus  

 

 45 

 

(Back To Top)

Section 3: EX-99.2 (EXHIBIT 99.2)

 

Exhibit 99.2

 

Aeropuertos Argentina 2000 S.A.

 

Separate Condensed Individual Interim Financial Statements

At March 31, 2018 presented in comparative format

 

 

 

 

Separate Condensed Individual Financial Statements

At March 31, 2018 presented in comparative format

 

Index

 

Individual Statements of Comprehensive Income 2
Individual Statements of Financial Position 3
Individual Statements of Changes in Equity 4
Individual Statements of Cash Flows 5
Notes to the Separate Condensed Individual Interim Financial Statements 6
Additional information required by Art. 68 of the Regulations of the Buenos Aires Stock Exchange and by Art. 12, chapter III, title IV of the National Securities Commission 32
Report of Independent Auditors 39
Report of the Supervisory Committee  

 

    $ = Argentine Peso

US$ = US Dollar

 

 

 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

  

Legal address: Suipacha 268 - Piso 12º - Autonomous City of Buenos Aires
Principal activity: Exploitation, administration and operation of airports

 

Individual Financial Statements

For the Fiscal Year N° 21 commenced January 1, 2018

 

DATE OF REGISTRATION WITH THE PUBLIC REGISTRY OF COMMERCE:

 

Of the By-laws: February 18, 1998
Of the last modification of the By-laws: October 11, 2016
Registration number with the Superintendence of Corporations: 1645890
Expiration date of the company: February 17, 2053
Parent Company: Corporación América S.A.
Legal address: Honduras 5673 -
  Autonomous City of Buenos Aires
Principal activity: Investments and financing
Participation of the Parent Company
in common stock and total votes:
45.90%

 

 

CAPITAL STOCK (Note 13)

 

   Subscribed   Paid-in 
   $ 
Issued          
79,105,489 Class “A” common shares of AR$ 1 par value and 1 vote each   79,105,489    79,105,489 
79,105,489 Class “B” common shares of AR$ 1 par value and 1 vote each   79,105,489    79,105,489 
61,526,492 Class “C” common shares of AR$ 1 par value and 1 vote each   61,526,492    61,526,492 
38,779,829 Class “D” common shares of AR$ 1 par value and 1 vote each   38,779,829    38,779,829 
616,914,353 Preferred shares of AR$ 1 par value with no voting rights   616,914,353    616,914,353 
    875,431,652    875,431,652 

 

 1 
 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

 

Statement of Comprehensive Income

For the three month periods ended March 31, 2018 and 2017

 

   03.31.18  

03.31.17*

Modificated

 
   $ 
Continuous Operations          
Revenue (Note 3)   3,965,890,017    3,007,498,058 
CINIIF 12 - paragraph 14 Credit (Note 5)   876,021,046    497,180,256 
Cost of service (Note 10)   (1,956,117,684)   (1,532,627,527)
CINIIF 12 - paragraph 14 Debit   (874,654,893)   (496,472,840)
Gross Profit   2,011,138,486    1,475,577,947 
Distribution and selling expenses (Note 10)   (243,601,843)   (181,368,917)
Administrative expenses (Note 10)   (178,728,314)   (165,805,600)
Other income and expenses, net (Note 3)   92,912,224    72,547,607 
Operating profit   1,681,720,553    1,200,951,037 
           
Finance Income (Note 3)   170,961,205    133,764,086 
Finance Costs (Note 3)   (692,107,186)   (200,142,357)
Result of investments accounted for using the equity method (Note 4)   (578,575)   2,055,625 
Income before Income Tax   1,159,995,997    1,136,628,391 
Income Tax (Note 3)   (337,674,554)   (293,508,650)
Income for the period for continuous operations   822,321,443    843,119,741 
Net Income for the period   822,321,443    843,119,741 
Other comprehensive income   -    - 
Comprehensive Income for the period   822,321,443    843,119,741 
           
           
Earnings per share basic and diluted attributable to shareholders of the Company during the period (shown in $ per share ) from continuous operations   3.1687    3.2494 

 

The accompanying notes are an integral part of these Separate Condensed Individual Interim Financial Statements and should be read together with the Financial Statements audited for the year ended December 31, 2017.

 

*See Note 2.1 (comparative information) for further detail on modificated.

 

 2 
 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

 

Individual Statements of Financial Position

At March 31, 2018 and December 31, 2017

 

   03.31.18   12.31.17 
   $ 
Assets          
Non current Assets          
Investments accounted for by the equity method (Note 4)   52,451,568    53,030,143 
Intangible Assets (Note 5)   11,364,387,254    10,624,055,713 
Other receivables (Note 3)   2,662,532,478    2,549,103,960 
Total Non- Current Assets   14,079,371,300    13,226,189,816 
           
Current Assets          
Other receivables (Note 3)   303,759,412    324,030,783 
Trade receivables, net (Note 3)   1,393,280,491    1,050,433,139 
Cash and cash equivalents (Note 3)   2,499,023,813    2,280,072,038 
Total Current Assets   4,196,063,716    3,654,535,960 
Total Assets   18,275,435,016    16,880,725,776 
           
Shareholders’ Equity and Liabilities          
Equity attributable to Shareholders:          
Common shares   258,517,299    258,517,299 
Preferred shares   616,914,353    616,914,353 
Share Premium   137,280,595    137,280,595 
Legal and facultative reserve   2,732,769,964    2,732,769,964 
Retained earnings   3,560,860,549    2,684,484,995 
Total Sharehoders’ Equity   7,306,342,760    6,429,967,206 
Liabilities          
Non- Current Liabilities          
Accounts payable and others (Note 3)   112,098,768    119,690,026 
Borrowings (Note 6)   8,003,387,589    7,401,161,525 
Deferred income tax liabilities   112,565,996    86,087,996 
Provisions and other charges (Note 9)   57,003,341    58,196,320 
Total Non- Current Liabilities   8,285,055,694    7,665,135,867 
Current Liabilities          
Fee payable to the Argentine National Government (Note 7)   195,676,512    176,591,493 
Accounts payable and others (Note 3)   1,621,908,623    1,750,819,476 
Income tax, net of prepayments   248,485,765    204,738,892 
Borrowings (Note 6)   156,106,781    149,976,119 
Provisions and other charges (Note 9)   461,858,881    503,496,723 
Total Current Liabilities   2,684,036,562    2,785,622,703 
Total Liabilities   10,969,092,256    10,450,758,570 
Total Shareholders’ Equity and Liabilities   18,275,435,016    16,880,725,776 

 

The accompanying notes are an integral part of these Separate Condensed Individual Interim Financial Statements and should be read together with the Financial Statements audited for the year ended December 31, 2017.

 

 3 
 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

 

Individual Statements of Changes in Equity

At March 31, 2018 and 2017

 

   Capital Stock
Common
Shares
   Capital Stock
Preferred
Shares
   Share
Premium
   Legal
Reserve
   Facultative
Reserve
   Retained
Earnings
   Total 
   $ 
Balance at 01.01.18   258,517,299    616,914,353    137,280,595    172,667,058    2,560,102,906    2,684,484,995    6,429,967,206 
IFRS 9 Adjustment (Note 2.1)   -    -    -    -    -    54,054,111    54,054,111 
Balance at 01.01.18 modificated   258,517,299    616,914,353    137,280,595    172,667,058    2,560,102,906    2,684,484,995    6,484,021,317 
Income for the period   -    -    -    -    -    822,321,443    822,321,443 
Balance at 03.31.18   258,517,299    616,914,353    137,280,595    172,667,058    2,560,102,906    3,560,860,549    7,306,342,760 
Balance at 01.01.17   258,517,299    604,817,993    137,280,595    109,328,624    1,806,446,119    2,009,091,581    4,925,482,211 
Income for the period   -    -    -    -    -    843,119,741    843,119,741 
Balance at 03.31.18   258,517,299    604,817,993    137,280,595    109,328,624    1,806,446,119    2,852,211,322    5,768,601,952 

 

The accompanying notes are an integral part of these Separate Condensed Individual Interim Financial Statements and should be read together with the Financial Statements audited for the year ended December 31, 2017.

 

 4 
 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

 

Individual Statements of Cash Flows

At March 31, 2018 and 2017

 

      03.31.18  

03.31.17*

Modificated

 
   Notes  $ 
Cash Flows from operating activities             
Net Income for the period      822,321,443    843,119,741 
Adjustments for:             
Amortization of intangible assets  5   135,689,505    121,052,069 
Specific allocation of accrued and unpaid income  7   195,676,512    152,058,592 
Income Tax  3   337,674,554    293,508,650 
Income of investments accounted for by the equity method  4   578,575    (2,055,625)
Bad debts provision  8   3,815,179    1,736,093 
Unpaid borrowing interests costs      104,580,393    65,864,719 
Accrued deferred revenues and additional considerations  9   (59,206,741)   (54,145,225)
Accrued exchange differences      513,190,305    (153,824,417)
Provision for litigation  9   2,881,561    - 
              
Changes in operating assets and liabilities:             
Changes in trade receivables      (274,590,383)   49,386,937 
Changes in other receivables      (93,157,147)   (473,936,805)
Changes in accounts payable and others      (136,502,111)   (198,906,520)
Changes in liabilities for current income tax      (68,749,646)   (69,897,008)
Changes in provisions and other charges      63,494,359    39,141,202 
Changes in fee payable to the Argentine National Government      (176,591,493)   (147,629,066)
Changes in borrowings      (41,590,412)   264,255,139 
Changes in intangible assets      (797,059,149)   (495,060,062)
Income tax paid      (216,718,072)   (17,396,567)
Net Cash provided by operating activities      315,737,232    217,271,847 
              
Cash Flow from financing activities             
New Borrowings  6   -    6,312,000,000 
Borrowings paid- principal  6   (15,866,434)   (2,955,651,859)
Borrowings paid- interests  6   (136,254,109)   (305,778,159)
Cash flow release      -    490,566,044 
Dividends paid  9   (50,000,000)   - 
Net Cash Flow (used in) / provided by financing activities      (202,120,543)   3,541,136,026 
              
Net Increase in cash and cash equivalents      113,616,689    3,758,407,873 
              
Changes in cash and cash equivalents             
Cash and cash equivalents at the beginning of the period (*)      2,280,072,038    766,131,458 
Net Increase in cash and cash equivalents      113,616,689    3,758,407,873 
Foreign Exchange differences      105,335,086    (123,835,616)
Cash and cash equivalents at the end of the period (*)      2,499,023,813    4,400,703,715 
Transactions that do not represent changes in cash and cash equivalents:             
Acquisition of intangible assets through liabilities for finance leases      11,969,823    2,120,194 
Dividends on preferred shares      3,146,263    3,084,572 

 

(*) Does not include restricted cash at January 1, 2017 for $ 490,566,044.

The accompanying notes are an integral part of these Separate Condensed Individual Interim Financial Statements and should be read together with the Financial Statements audited for the year ended December 31, 2017.

* See Note 2.1 (comparative information) for more details on the modification.

 

 5 
 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Individual Financial Statements

At March 31, 2018 presented in comparative format

 

NOTE 1 – COMPANY ACTIVITIES

 

Aeropuertos Argentina 2000 S.A. (“AA2000” or the “Company”) was incorporated in the Autonomous City of Buenos Aires on January 28, 1998, after the consortium of companies won the national and international bid for the concession rights for the use, management and operation of the Group “A” of the Argentine National Airport System. Group “A” includes 33 airports that operate in Argentina (the “Concession”).

 

The Concession was granted pursuant to the concession agreement the Company entered into with the Argentine National Government on February 9, 1998, as subsequently amended and supplemented by the memorandum of agreement we entered into with the Argentine National Government on April 3, 2007 (the “Memorandum of Agreement”). The Company refer to the concession agreement as amended and supplemented by the Memorandum of Agreement as the “Concession Agreement”.

 

The Concession is for an initial period of 30 years through February 13, 2028. The Company may extend the term of the Concession for an additional period of up to 10 years. The Company has made a formal request to the National Airports Regulatory Organization (Organismo Regulador Del Sistema Nacional de Aeropuertos) (the “ORSNA”) to extend the term of the Concession for the additional 10-year period ending February 13, 2038. The Company can provide no assurance that the Argentine National Government will grant our request or on what conditions.

 

In addition, under the terms of the Concession Agreement, the Argentine National Government has the right to buyout the Concession as of February 13, 2018, and if such right is exercised, it is required to pay the Company a compensation.

 

As from July 24, 2012 The Company has become responsible for the management of the operation of Termas de Rio Hondo airport. On March 21, 2013, the National Executive Branch through Decree N° 303/2013, ratified the incorporation of the airport to the National Airport System, its inclusion into the Group “A” at December 31, 2017 is still pending.

 

 6 
 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Individual Financial Statements

At March 31, 2018 presented in comparative format (Contd.)

 

NOTE 1 – COMPANY ACTIVITIES (Contd.)

 

Likewise and in order to be able to continue with the policies related to the expansion of the aviation market, the National State issued Decree No. 1092/17 on December 22, 2017 by which it incorporated the Palomar Airport, located in the Province of Buenos Aires, to the National Airport System.

 

In order to incorporate the said Airport into "Group A", on December 27, 2017 the National Government issued Decree No. 1107/17.

 

As a result, as of such date, the Company is responsible for the exploitation, administration and operation of Palomar Airport under the terms set forth in the Concession Contract approved by Decree No. 163/97 and the Adjustment Agreement Act. of the Concession Contract approved by Decree No. 1799/07.

 

The current note to the Separate Condensed Individual Interim Financial Statements does not reflect all the information requested in the annual financial statements, as there are no significate differences. It should be read together with the Financial Statements audited for the year ended December 31, 2017.

 

NOTE 2 – ACCOUNTING POLICIES

 

The Separate Condensed Individual Interim Financial Statements are presented in Argentine Pesos, except when specifically indicates otherwise. The Board of Directors of the Company approved these statements on May 8, 2018.

 

The National Securities Commission (CNV) through Technical Resolutions N° 562/09 and 576/10 has established the application of Technical Resolutions N° 26 , 29 and 43 of the Argentine Federation of Professional Council in Economic Sciences which adopts the application of IFRS (International Financial Reporting Standards) issued by the IASB (International Accounting Standards Board), for those entities under the public offering regime Law N° 17.811, whether due to capital stock or corporate bonds or because they have requested authorization to list for trading on stock exchanges.

 

 7 
 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Individual Financial Statements

At March 31, 2018 presented in comparative format (Contd.)

 

NOTE 2 – ACCOUNTING POLICIES (Contd.)

 

Application of those standards is mandatory for the Company as from the fiscal year beginning on January 1 2012. Therefore, the transition date, as established in the IFRS 1 “First Time Adoption of the IFRS” was January 1, 2011.

 

Likewise, the Financial Statements of AA2000 have been prepared in accordance with International Standards of Financial Information and Interpretation of the CINIIF (IFRIC in English).

 

These accounting policies have been consistently applied to all the periods / years presented. Unless otherwise stated.

 

The current Separate Condensed Individual Interim Financial Statements have not been audited and should be read together with the Individual Financial Separated Statements for the year ended December 31, 2017. The results of the three month periods ended March 31, 2018 and 2017 do not necessarily reflect the proportion of the results of the Company for the full year.

 

1) Comparative Information

 

The figures at March 31, 2017 and December 31, 2017 included in these Separate Condensed Individual Interim Financial Statements for comparative purposes, was extracted from the Financial Statements of AA2000 as of that date, and timely approved by the Company Board of Directors and shareholders.

 

Certain figures in the financial statements corresponding to the period ended March 31, 2017 have been reclassified for the purpose of comparative presentation, in relation to income from the Strengthening Trust ($ 74,808,468), included in the revenue item which have been reclassified to the item Other Income and Expenses, Net in the Individual Statement of Comprehensive Income. This reclassification does not affect the figures of the balance sheet.

 

In turn, certain transactions have been reclassified in the Cash Flow Statement that were classified in 2017 within the operating activities (Release of restricted cash and certain interests) that were reclassified to financing activities.

 

 8 
 

  

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Individual Financial Statements

At March 31, 2018 presented in comparative format (Contd.)

 

NOTE 2 – ACCOUNTING POLICIES (Contd.)

 

2) Accounting Policies

 

The accounting policies applied to the Separate Condensed Individual Interim Financial Statements are consistent with the Individual Financial Statements ended December 31, 2017.

 

3) Subisidiaries

 

Subsidiaries are all the entities where the Company has the power to control operating and financial policies, generally with a controlling share over 50%. At the time of determining if the Company controls an entity, the existence and the impact of potential voting rights that could be exercised or converted are taken into account. The subsidiaries are consolidated as from the date the control is transferred and excluded from the date such control ceases.

 

The accounting policies of subsidiaries have been modified, where necessary, to ensure the uniformity with the Company’s policies.

 

At March 31, 2018, AA2000 has participation in the following controlled companies (hereafter the Group):

 

Subsidiaries (1)  Number of
common shares
   Participation in
capital and possible
votes
   Book entry value
at 03.31.18
   Net Shareholders
‘equity at closing
   Income for the
period
 
Servicios y Tecnología Aeroportuarios S.A. (2)   14,398,848    99,30%   22,041,355    22,196,732    2,682,396 
Cargo & Logistics S.A.   5,566,259    98,63%   3,446,779    3,494,656    (537,553)
Paoletti America S.A.   6,000    50,00%   15,526    31,051    - 
Texelrío S.A. (3)   84,000    70,00%   26,863,019    36,661,456    (3,863,027)
Villalonga Furlong S.A. (4)   123,700    1,46%   84,889    5,781,351    (546,180)

 

(1)Companies based in the Argentine Republic.
(2)Includes adjustments under IFRS for the elaboration and presentation of these financial statements.
(3)The Net Shareholders Equity includes 4.000.000 of preferred shares.
(4)Owner of 98.42% of the capital stock and votes in a direct way.

 

 9 
 

  

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Individual Financial Statements

At March 31, 2018 presented in comparative format (Contd.)

 

NOTE 2 – ACCOUNTING POLICIES (Contd.)

 

4) Segment Information

 

The Company is managed as a single unit, considering all airports as a whole. It does not evaluate the performance of the airports on a standalone basis. Therefore, for the purposes of segment information, there is only one business segment.

 

The Argentine National Government granted to the Company the airports’s concession of the Group “A” of the National Airports System under the basis of “cross-subsidies”: i.e., the income and funds generated by some of the airports should subsidize the liabilities and investments of the remaining airports, in order for all airports to be compliant with international standards as explained below.

 

All airports must comply with measures of operative efficiency which are independent from the revenues and funds they generate. All works performed must follow international standards established by the respective agencies (IATA, OACI, etc.).

 

Revenues of AA2000 comprised non-aeronautical revenues and aeronautical revenues; the latter being the tariffs determined by the ORSNA and regulated on the basis of the review of the Financial Projection of Income and Expenses in order to verify and preserve the "equilibrium" of the variables on which it was originally based.

 

The investment decisions are assessed and made with the ORSNA based on the master plans of the airports considering the needs of each airport on the basis of expected passenger flow and air traffic, in the framework of the standards previously mentioned.

 

 10 
 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Individual Financial Statements

At March 31, 2018 presented in comparative format (Contd.)

 

NOTE 2 – ACCOUNTING POLICIES (Contd.)

 

5) Estimates

 

The preparation of financial statements in accordance with IFRS requires the use of estimates. It also requires management to exercise its judgment in the process of applying the Group’s accounting policies.

 

In the preparation of these Financial Statements the significant areas of judgement by management in the application of the Company’s accounting policies and the main areas of assumptions and estimates are consistent with those applied in the Financial Statements for the year ended December 31, 2017.

 

6) Foreign currency translation

 

Functional and presentation currency

Items included in the financial statements of each of the group´s entities are measured using the corresponding functional currency i.e the currency of the primary economic environment in which the entity operates. The functional currency of all group entities is the Argentine peso, which is also the presentation currency of the financial statements.

 

The Company has evaluated and concluded that at the date of the financial statements the conditions established in the IAS 29 “Financial Reporting for Hyperinflationary Economies” are unmet in order to consider Argentina as a hyperinflationary economy. At the end of the reported period , considering the argentine peso does not gather the characteristics to be considered a as a currency from a hyperinflationary economy according to the guidelines established in the Standard and the government expectations towards the reduction of the inflation level, the current condensed financial statements have not been re expressed in constant currency.

 

 11 
 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Individual Financial Statements

At March 31, 2018 presented in comparative format (Contd.)

 

NOTE 2 – ACCOUNTING POLICIES (Contd.)

 

6) Foreign currency translation (Contd.)

 

In the last years, certain macroeconomic variables that affect the Company business, as salaries and prices of supplies, have had important annual variations. This circumstance should be considered in the evaluation and interpretation of the financial situation and results presented by the Company in these financial statements.

 

These individual financial statements have been prepared under the historical cost convention.

 

Transactions and balances


Transactions in foreign currency are translated into the functional currency using the exchange rates prevailing at the transaction dates (or valuation where items are re-measured).


Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end of the assets and liabilities denominated in foreign currency are recognized in the statement of comprehensive income.


Foreign exchange gain and losses are shown in “Finance Income” and/or “Finance Cost” of the comprehensive statement of income.


Exchange rates used are the following: buying rate for monetary assets and selling rate for monetary liabilities, applicable at year-end according to Banco Nación, and at the foreign currency exchange rate applicable at the transaction date.

 

7) Contingencies

 

The Company has contingent liabilities for litigations related to the ordinary course of business.

 

No significate liability is expected to arise from contingent liabilities different from the reserved ones.

 

 12 
 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Individual Financial Statements

At March 31, 2018 presented in comparative format (Contd.)

 

NOTE 2 – ACCOUNTING POLICIES (Contd.)

 

8) Changes in accounting policies

 

a) New standards and modifications adopted by the Company

 

The following standards and amendments have been adopted by the Company for the first time for the three-month period ended March 31, 2018:

 

IFRS 9, "Financial Instruments"

 

The Company adopted IFRS 9 issued in July 2014, which resulted in changes in accounting policies and adjustments to the figures recognized in the Individual Financial Statements for the year ended December 31, 2017.

 

This standard replaces the previously issued versions and establishes new requirements for hedge accounting and a new impairment model for financial assets, applicable to annual periods beginning on or after January 1, 2018

 

The new impairment model requires the recognition of provisions for impairment based on the expected credit losses, instead of credit losses incurred under IAS 39.

 

The accounting policies were modified to comply with IFRS 9 issued by the IASB in July 2014.

IFRS 9 replaces the provisions of IAS 39 that relate to the recognition, classification and measurement of financial assets and financial liabilities; cancellations in financial instrument accounts; impairment of financial assets and hedge accounting. IFRS 9 also significantly modifies other standards related to financial instruments such as IFRS 7 Financial Instruments: Disclosures.

 

As permitted by the transitional provisions of IFRS 9, the Company has chosen not to change the comparative figures.

 

The total impact on the Company’s retained earnings due to the classification and measurement of financial instruments as of January 1, 2018 is as follows:

 

Retained earnings as of December 31, 2018 - IAS 39   2.684.484.995 
Decrease in the provision for bad debts, net   54.054.111 
Retained earnings as of January 1, 2018 - IFRS 9   2.738.539.106 

 

 13 
 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Individual Financial Statements

At March 31, 2018 presented in comparative format (Contd.)

 

NOTE 2 – ACCOUNTING POLICIES (Contd.)

 

8) Changes in accounting policies (Contd.)

 

-IFRS 15 “Revenue from contracts with customers”

 

Management evaluated the effects of the application of the new standard and has no identified that the application of IFRS 15 may result in the identification of separate performance obligations in relation to permit holder contracts that could affect the timing of recognition of future income.

 

There were no other additional changes in the accounting policies of the Company based on the effective application standards as of January 1, 2018 described above.

 

b) New standards and amendments issued, but that do not result in effective application as of March 31, 2018 and have not been adopted by the Company

 

IFRS 16 “Leases”

 

In January 2016, the IASB issued IFRS 16 "Leases", which establishes new principles for the recognition, measurement, presentation and presentation of lease contracts, highlighting the elimination of the operational and financial classification established by IAS 17 and the adoption, in its replacement of a treatment similar to that provided to financiers under said rule, for all lease agreements. These contracts must be disclosed as leased assets (assets with a right to use) or within fixed assets at the present value of the lease payments. If the Company makes periodic payments, it must additionally recognize a financial liability that represents the obligation to make future payments for the lease. IFRS 16 does not require the lessee to recognize assets and liabilities in the case of short-term leases or leases of low-value assets. The application of these new requirements will result in an increase in lease assets and financial liabilities recognized in this type of transaction. This standard is applicable to annual periods beginning on or after January 1, 2019, allowing early application if IFRS 15 is applied.

 

The Company has no intention to adopt this standard in advance.

 

 14 
 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Individual Financial Statements

At March 31, 2018 presented in comparative format (Contd.)

 

NOTE 3 – BREAKDOWN OF CERTAIN ITEMS OF THE INDIVIDUAL STATEMENTS OF FINANCIAL POSITION AND THE INDIVIDUAL STATEMENTS OF COMPREHENSIVE INCOME

 

INDIVIDUAL STATEMENTS OF FINANCIAL POSITION  03.31.18   12.31.17 
   $ 
Cash and cash equivalents          
Cash and funds in custody   9,995,130    7,262,801 
Banks   1,616,773,799    2,009,895,109 
Checks not yet deposited   10,472,489    7,835,475 
Time deposits   861,782,395    255,078,653 
    2,499,023,813    2,280,072,038 
           
Trade receivables, net          
Trade receivables   1,445,445,453    1,164,337,126 
Related parties (Note 7)   2,069,353    4,669,128 
Checks - postdated checks   28,720,265    32,638,434 
Provision for bad debts (Note 8)   (82,954,580)   (151,211,549)
    1,393,280,491    1,050,433,139 

 

Other current receivables          
Expenses to be recovered   2,259,395    1,501,396 
Guarantees granted   5,472,910    5,457,870 
Related parties (Note 7)   795,282    795,282 
Tax credits   283,920,972    298,431,065 
Prepaid Insurance   10,219,307    17,193,815 
Other   1,091,546    651,355 
    303,759,412    324,030,783 
           
Other non-current receivables          
Trust for Strengthening (Note 7)   2,662,532,478    2,549,103,960 
    2,662,532,478    2,549,103,960 

 

 15 
 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Individual Financial Statements

At March 31, 2018 presented in comparative format (Contd.)

 

NOTE 3 – BREAKDOWN OF CERTAIN ITEMS OF THE INDIVIDUAL STATEMENTS OF FINANCIAL POSITION AND THE INDIVIDUAL STATEMENTS OF COMPREHENSIVE INCOME (Contd.)

 

INDIVIDUAL STATEMENTS OF FINANCIAL POSITION  03.31.18   12.31.17 
   $ 
Accounts payable and other-current          
Obligations payable   303,046,283    419,020,984 
Suppliers   728,083,197    665,826,580 
Foreign suppliers   38,000,034    44,080,464 
Related parties (Note 7)   113,903,497    119,323,068 
Salaries and social security liabilities   352,898,497    412,182,852 
Other fiscal liabilities   85,977,115    90,385,528 
    1,621,908,623    1,750,819,476 
           
Accounts payable and other- non current          
Tax liabilities   112,098,768    119,690,026 
    112,098,768    119,690,026 

 

INDIVIDUAL STATEMENTS OF COMPREHENSIVE INCOME  03.31.18   03.31.17 
   $ 
Revenues          
Aeronautical revenues   2,372,180,272    1,740,047,087 
Non-aeronautical revenues   1,593,709,745    1,267,450,971 
    3,965,890,017    3,007,498,058 
           
Other income and expenses net          
Trust for Strengthening   98,812,557    74,808,468 
Others   (5,900,333)   (2,260,861)
    92,912,224    72,547,607 
Finance Income          
Interest   16,071,086    281,976,256 
Foreign Exchange differences   154,890,119    (148,212,170)
    170,961,205    133,764,086 

 

 16 
 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Individual Financial Statements

At March 31, 2018 presented in comparative format (Contd.)

 

NOTE 3 – BREAKDOWN OF CERTAIN ITEMS OF THE INDIVIDUAL STATEMENTS OF FINANCIAL POSITION AND THE INDIVIDUAL STATEMENTS OF COMPREHENSIVE INCOME (Contd.)

 

INDIVIDUAL STATEMENTS OF COMPREHENSIVE INCOME (Contd.)

 

   03.31.18   03.31.17 
   $ 
Finance Costs          
Interest   (78,918,427)   (343,457,803)
Foreign Exchange differences   (613,188,759)   143,315,446 
    (692,107,186)   (200,142,357)
    (521,145,981)   (66,378,271)
Income Tax          
Current   (329,214,591)   (265,994,084)
Deferred   (8,459,963)   (27,514,566)
    (337,674,554)   (293,508,650)

 

NOTE 4 – INVESTMENTS ACCOUNTED FOR BY THE EQUITY METHOD

 

   2018   2017 
   $ 
Balance at January 1   53,030,143    43,248,874 
Income from investments accounted for by the equity method   (578,575)   2,055,625 
Balance at March 31   52,451,568    45,304,499 

 

 17 
 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Individual Financial Statements

At March 31, 2018 presented in comparative format (Contd.)

 

NOTE 5 – INTANGIBLE ASSETS

 

   2018   2017 
   $ 
Original values          
Balance at January 1   12,650,633,023    8,806,384,322 
Acquisitions   876,021,046    497,180,256 
Balance at December 31   13,526,654,069    9,303,564,578 
           
Accumulated Amortization:          
Balance at January 1   (2,026,577,310)   (1,500,497,074)
From the period   (135,689,505)   (121,052,069)
Balance at March 31   (2,162,266,815)   (1,621,549,143)
Total net balance   11,364,387,254    7,682,015,435 

 

During the period ended March 31, 2018, the Company has capitalized expenses for finance interest for the amount of $66,992,774.

 

No expenses for finance interest have been capitalized during the period ended March 31, 2017.

 

NOTE 6 – BORROWINGS

 

Breakdown of borrowings

 

   03.31.18   12.31.17 
   $ 
Non-current          
Bank borrowings   -    - 
Negotiable Obligations   8,059,600,000    7,459,600,000 
Finance lease liabilities   39,032,127    39,501,664 
Cost of issuance of Negotiable Obligations   (95,244,538)   (97,940,139)
Total Non- Current   8,003,387,589    7,401,161,525 
Current          
Bank borrowings   12,680,843    17,865,756 
Negotiable Obligations   103,338,652    96,126,536 
Finance lease liabilities   40,087,286    35,983,827 
Total Current   156,106,781    149,976,119 
Total   8,159,494,370    7,551,137,644 

 

 18 
 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Individual Financial Statements

At March 31, 2018 presented in comparative format (Contd.)

 

NOTE 6 – BORROWINGS (Contd.)

 

Breakdown of borrowings:

 

   2018   2017 
   $ 
Balance at January 1   7,551,137,644    3,115,254,471 
New borrowings   11,969,823    6,314,120,194 
Borrowings paid   (152,120,543)   (3,261,430,018)
Accrued interest   140,196,704    330,119,858 
Foreign Exchange differences   608,310,742    (277,660,033)
Net Balance at March 31   8,159,494,370    6,220,404,472 

 

On February 6, 2017, the Company issued negotiable obligations for US$400.000.000 with maturity on February 1, 2027, with an interest rate of 6,875% and an issue price of 99,888% par value. Payment of principal will have a quarterly amortization in 32 quarters, identical and consecutive, payable from May 1, 2019.

 

These negotiable obligations are guaranteed by a Trust under the Argentine Law, by which the Company has transferred and assigned use fees of international and regional airports and the Concession Indemnification Rights. This guarantee has been approved by the ORSNA on January 17, 2017, through Resolution Nº 1/2017, that resolved to “authorize the Concession (…) a collateral assignment of up to US$ 400.000.000 (…)”.

 

 19 
 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Individual Financial Statements

At March 31, 2018 presented in comparative format (Contd.)

 

NOTE 6 – BORROWINGS (Contd.)

 

According to the Offering Memorandum of Negotiable Obligations, dated January 19, 2017 and later modified on January 23, 2017 the Company will use the proceeds of the offering notes in compliance with Article 36 of the Negotiable Obligations Law to (i) refinance the liabilities of the Company including (a) the total payment of negotiable obligations issued on December 22, 2010; and (b) negotiable obligations Class “A” and Class “C”, issued by the Company in Argentina on April 21, 2010, plus accrued and unpaid interest to the date of redemption and the applicable prepayment premiums as long as they have not been redeemed before issue date and maturity with the Company’s funds and (ii) the remainder will be applied to finance infrastructure works in the airports of Group A of the Company. On January 23, 2017, the negotiable obligations issued in April 2010 were redeemed in full with the Company’s own funds, so the amount equivalent to the mentioned redemption will be aimed at infrastructure works in the airports of the Company belonging to Group “A” of the National System of Airports.

 

On March 13, 2017 it made an early and whole redemption of the remaining value of negotiable obligations issued in December 2010 for the amount of principal of U$D 157.500.000.

 

At December 31, 2016 the item Cash and Cash Equivalents of the statements of Financial Position included $ 490.566.044 to guarantee the payment of negotiable obligations valid at that date and early redeemed before the end of March 31, 2017

 

At March 31, 2018 the reasonable value of negotiable obligations issued in February 2017 is of $7,949,515,999. Such method of valuation is classified according to NIIF 13 as hierarchy of reasonable value Level 2 (quotation prices (not adjusted) in active markets for identical assets or liabilities).

 

 20 
 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Individual Financial Statements

At March 31, 2018 presented in comparative format (Contd.)

 

NOTE 7 – BALANCES AND TRANSACTIONS WITH RELATED PARTIES

 

Balances with other related companies March 31, 2018 and December 31, 2017 are as follows:

 

   03.31.18   12.31.17 
   $ 
Trade receivables net- Current          
Servicios y Tecnología Aeroportuarios S.A.   129,790    104,128 
Other related companies   1,939,563    4,565,000 
    2,069,353    4,669,128 
Other current receivables          
Cargo & Logistics S.A.   795,282    795,282 
    795,282    795,282 
Accounts payable and other- Current          
Servicios y Tecnología Aeroportuarios S.A.   9,545,473    8,199,741 
Texelrío S.A.   30,820,459    24,355,667 
Other related companies   73,537,565    86,767,660 
    113,903,497    119,323,068 
Provisions and other charges          
Villalonga Furlong S.A.   3,100,831    3,759,171 
Other related companies   426,249    426,249 
Stakeholders   195,000,000    245,000,000 
    198,527,080    249,185,420 

 

During three month periods ended March 31, 2018 and 2017, the Company has charged the cost $55,456,157 and $57,042,963 respectively for maintenance done with Texelrio S.A.

 

 21 
 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Individual Financial Statements

At March 31, 2018 presented in comparative format (Contd.)

 

NOTE 7 – BALANCES AND TRANSACTIONS WITH RELATED PARTIES (Contd.)

 

During the three-month periods ended March 31, 2018 and 2017 the Company has charged to the cost $15,355,799 and $20,617,324 respectively with Proden SA for management control services, financial assistance, internal audit, out sourcing of systems and technology and rental and maintenance of offices. AA2000 has charged to the cost for the period of three months ended March 31, 2018 $5,591,238 with Servicios Integrales América for out sourcing of systems and technology. During the three-month periods ended March 31, 2018 and 2017, the Company has accrued with Helport S.A. to intangible assets $125,509,784 (including the Ezeiza runway refurbishment works, Tucumán runway extension, Palomar terminal remodeling, among others) and $26,187,073 respectively, at cost $20,557,300 and $12,649,502 respectively. Likewise, AA2000 has accrued March 31, 2017 intangible assets for $2,422,091 respectively corresponding to the work of Mendoza carried out by Jose Cartellone –Helport-UTE – join ventures.

 

During the period ended at March 31, 2018, $50,000,000 of dividends have been paid to the shareholders according to their shareholding

 

At March 31, 2018 and December 31, 2017 the Company owed the Argentine National Government $195,676,512 and $176,591,493 respectively, corresponding to the specific allocation of revenues of each period (see Note 10) and has recorded a receivable for $2,662,532,478 and $2,549,103,960 respectively corresponding to the Trust for Strenghtening to fund the infrastructure works of AA2000.

 

Furthermore, short-term compensation to key management was $11,554,503 and $12,140,452 for the three month periods ended March 31, 2018 and 2017 respectively.

 

 22 
 

  

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Individual Financial Statements

At March 31, 2018 presented in comparative format (Contd.)

 

NOTE 7 – BALANCES AND TRANSACTIONS WITH RELATED PARTIES (Contd.)

 

In connection with foreign exchange transactions related to the technical and administrative assistance agreements with Corporación América Sudamericana and Ogden Corporation, on November 23, 2012 The Company was notified of a foreign exchange summon initiated by the Banco Central de la República Argentina (Central Bank of the República Argentina or BCRA) regarding compliance with the existing legislation. On February 4, 2013, AA2000 presented defense procedures to the BCRA rejecting the allegations of such entity. In July 2016, sentence was passed favorable to the Company, non-appealable at the time of presentation of these financial statements.

 

In June 2016, the Company received a determination from the Federal Administration of Public Revenue (AFIP) was objecting the abovementioned items corresponding to the fiscal years 2009 to 2012 resulting in a claim for unpaid income tax based on considering those foreign exchange transactions as undocumented payments. On August 3, 2016, the Company appealed the mentioned determinations to the Argentine Tax Court.

 

Although the Company considers it has solid arguments to demonstrate the authenticity of the management and administrative services provided by Corporación América Sudamericana S.A., it decided to enter the Extraordinary Tax Law to regularize tax obligations established by Law Nº 27.260. According to the Law, benefits of adhesion consist in the suspension of ongoing tax actions, extinction of the criminal tax action, remission of fines and other penalties non executable at the time of adhesion and reduction of interest. The corresponding debt for this item is registered in commercial accounts payable and others, current and non-current.

 

Corporación America S.A. is the direct owner of 45.90% of the common shares of the Company, and an indirect owner through Corporación America Sudamericana S.A of 29.75% of the common shares of the Company, therefore is the immediate controlling entity of the Company.

 

Corporación America S.A is controlled by Cedicor S.A, which is the owner of the 95.37% of its capital stock. Cedicor S.A is 100% controlled by American International Airports LLC which is 100% controlled by Corporación America Airports S.A..

 

 23 
 

  

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Individual Financial Statements

At March 31, 2018 presented in comparative format (Contd.)

 

NOTE 7 – BALANCES AND TRANSACTIONS WITH RELATED PARTIES (Contd.)

 

The ultimate beneficiary of the Company is Southern Cone Foundation. Its purpose is to manage its assets through decisions adopted by its independent Board of Directors. The potential beneficiaries are members of the Eurnekian family and religious, charitable and educational institutions.

 

NOTE 8 – BAD DEBT PROVISIONS

 

   2018   2017 
   $ 
Initial balance at January 1   151,211,549    68,874,745 
IFRS 9 adjustments at the beginning   (72,072,148)   - 
Balance at January 1   79,139,401    68,874,745 
Increases (Note 10)   3,815,179    1,736,093 
Final Balance at March 31   82,954,580    70,610,838 

 

NOTE 9 – PROVISIONS AND OTHER CHARGES

 

   Litiga-
tion
   Related
Parties
   Deferred
Income
   Guarantees
Received
   Upfront
fees from
Concessionaires
   Trust for
works-
Portfolio of
Projects
2012/2014
(Note 1.2)
   Customer
prepayments
   Dividends to
be
paid
   Total 
   $ 
At January 1, 2018   53,813,342    4,185,420    92,117,996    30,916,290    60,332,473    75,327,522    -    245,000,000    561,693,043 
Increases   2,881,561    56,660    40,845,825    10,329,169    6,298,955    226,074,669    -    -    286,486,839 
Decreases   -    (715,000)   -    (1,814,309)   -    (217,581,610)   -    (50,000,000)   (270,110,919)
Accruals   -    -    (51,976,020)   -    (7,230,721)   -    -    -    (59,206,741)
At March 31, 2018   56,694,903    3,527,080    80,987,801    39,431,150    59,400,707    83,820,581    -    195,000,000    518,862,222 
At January 1, 2017   28,685,234    6,344,782    69,291,843    24,690,157    51,553,692    57,149,494    86,078,277    -    323,793,479 
Increases   -    114,407    29,193,441    6,692,000    35,814,885    188,111,872         -    259,926,605 
Decreases   -    (543,500)        (3,529,986)        (186,037,640)   (30,674,277)   -    (220,785,403)
Accrual   -    -    (39,591,454)   -    (14,553,771)   -    -    -    (54,145,225)
At March 31, 2017   28,685,234    5,915,689    58,893,830    27,852,171    72,814,806    59,223,726    55,404,000    -    308,789,456 

 

 24 
 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Individual Financial Statements

At March 31, 2018 presented in comparative format (Contd.)

 

NOTE 10 – COSTS OF SALES, ADMINISTRATIVE, DISTRIBUTION, AND SELLING EXPENSES

 

Item  Cost of sales   Administrative
expenses
   Distribution and
selling expenses
   Total 
   $ 
Three month period ended at 03.31.18                    
Specific allocation of revenues   592,875,342    -    -    592,875,342 
Airport services and maintenance   575,485,671    6,781,439    3,154,297    585,421,407 
Amortization of intangible assets   134,052,551    1,382,134    254,820    135,689,505 
Salaries and social security contributions   476,778,273    73,335,257    17,611,457    567,724,987 
Fees for services   6,128,968    10,121,954    2,566,638    18,817,560 
Public utilities and contributions   90,430,804    626,236    187,039    91,244,079 
Taxes   16,110,163    42,519,505    206,722,574    265,352,242 
Office expenses   53,703,780    39,869,827    1,707,586    95,281,193 
Insurance   10,552,132    650,962    -    11,203,094 
Advertising expenses   -    -    7,582,253    7,582,253 
Bad debt charges   -    -    3,815,179    3,815,179 
Board of Directors and Supervisory Committee fees   -    3,441,000    -    3,441,000 
Total at 03.31.18   1,956,117,684    178,728,314    243,601,843    2,378,447,841 
                     
Three month period ended at 03.31.17                    
Specific allocation of revenues   448,850,808    -    -    448,850,808 
Airport Services and maintenance   453,625,949    7,801,351    2,368,155    463,795,455 
Amortization of intangible assets   119,404,431    1,395,608    252,030    121,052,069 
Salaries and social security contributions   390,669,459    52,898,248    9,591,651    453,159,358 
Fees for services   8,438,283    21,131,152    1,235,532    30,804,967 
Public utilities and contributions   69,405,346    394,260    207,142    70,006,748 
Taxes   10,637,677    34,569,712    154,683,539    199,890,928 
Office expenses   24,332,942    44,049,753    1,390,064    69,772,759 
Insurance   7,262,632    765,016    -    8,027,648 
Advertising expenses   -    -    9,904,711    9,904,711 
Bad debt charges   -    -    1,736,093    1,736,093 
Board of Directors and Supervisory Committee fees   -    2,800,500    -    2,800,500 
Total at 03.31.17   1,532,627,527    165,805,600    181,368,917    1,879,802,044 

 

 25 
 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Individual Financial Statements

At March 31, 2018 presented in comparative format (Contd.)

 

NOTE 11 – FOREIGN CURRENCY ASSETS AND LIABILITIES

 

Item  Foreign currency type
and amount at
03.31.18
   Foreign
exchange
rates
   Amount in
local currency
at 03.31.18
   Amount in local
currency at
12.31.17
 
             $ 
ASSSETS                    
CURRENT ASSETS                    
Cash and cash equivalents  US$60,900,225    20.0490    1,220,988,603    1,598,099,496 
Trade receivables  US$46,682,257    20.0490    935,932,571    758,954,661 
              2,156,921,174    2,357,054,157 
Total current assets             2,156,921,174    2,357,054,157 
Total assets                    
                     
LIABILITIES                    
CURRENT LIABILITIES                    
Commercial accounts payable and others  US$1,999,192    20.1490    40,281,720    62,605,316 
   Euros868,587    24.8397    21,575,441    12,907,008 
Borrowings  US$5,502,473    20.1490    110,869,334    101,634,360 
Total current liabilities             172,726,495    177,146,684 
NON-CURRENT LIABILITIES                    
Borrowings  US$400,595,345    20.1490    8,071,595,609    7,474,997,009 
Total non- current liabilities                                8,071,595,609    7,474,997,009 
Total liabilities             8,244,322,104    7,652,143,693 
Net liability position             6,087,400,930    5,295,089,536 

 

 26 
 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Individual Financial Statements

At March 31, 2018 presented in comparative format (Contd.)

 

NOTE 12 – OTHER RESTRICTED ASSETS

 

Other than what is mentioned in Notes 1 and 6, Other Receivables in Current assets at March 31, 2018 and 2017 include $5,472,910 and $5,233,718 corresponding to guarantees granted to third parties in connection with lease agreements.

 

NOTE 13 - CAPITAL STOCK

 

At March 31, 2018 capital stock is as follows:

 

   Par Value 
   $ 
Paid-in and subscribed   875,431,652 
Registered with the Public Registry of Commerce   875,431,652 

 

The Company’s capital stock is comprised of 258,517,299 common shares of $1 par value and one vote each and 616,914,353 preferred non-voting shares of $1 par value. Preferred shares will have voting rights on the following matters: i) partial or total capital reimbursement; ii) during the period benefits of preferred shareholders are granted but not received; iii) the appointment of a full and an alternate director and a full and an alternate syndic; and iv) in the remaining cases established by Corporate Law No. 19550.

 

Subsequent to the closing, in the ordinary general meeting, special shareholders of classes A. B, C and D and special preferred shares held on April 9, 2018, the capital increase was resolved from $875,431,652 to $887,769,939, that is, in the amount of $12,338,287, through the issuance of 12,338,287 preferred shares of $1 par value each, without the right to vote. Said increase is pending registration in the Public Registry of Commerce

 

Furthermore, according to the requirements of General Resolution 629 issued by the National Securities Commission (CNV), the books and accounting records of the Company are located in the fiscal address located in Honduras 5673, Autonomous City of de Buenos Aires. In addition AA2000 has certain supporting accounting and operating documentation in the warehouses of Bank S.A. in the Province of Buenos Aires, Garín (Ruta Panamericana km. 37,5), Pacheco (Ruta Panamericana km. 31,5), Munro (Av Fleming 2190) and Avellaneda (General Rivadavia 401).

 

 27 
 

  

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Individual Financial Statements

At March 31, 2018 presented in comparative format (Contd.)

 

NOTE 14 – DIVIDENDS ON PREFERRED SHARES

 

The preferred dividend accrued for the year ended December 31, 2017 is of $12,338,287 approved by the Ordinary General Special Meeting of class A, B, C and D and special of preferred shares held on April 9, 2018.

 

Likewise, the preferred dividend accrued for the period of three months ended March 31, 2018 is of $3,146,263 and will be registered at the time of approval of the Shareholders Meeting.

 

NOTE 15 – RESOLUTIONS OF SHAREHOLDERS’ ORDINARY AND SPECIAL MEETINGS OF CLASS A, B, C AND D SPECIAL OF PREFERRED SHARES OF AEROPUERTOS ARGENTINA 2000 S.A. HELD ON APRIL 26, 2017 AND APRIL 9, 2018

 

The general ordinary and special meeting of class A, B, C and D and special of preferred shares held on April 26, 2017 decides among other issues:

 

-That the income of the year ended December 31, 2016 has the following destination:

 

(i)$63,338,434 for the constitution of the legal reserve;
   
(ii)$12,096,360 to the distribution of dividends corresponding to the preferred shares subscribed by the Argentine National Government according to the resolutions of the general extraordinary meeting of the Company´s Shareholders held on March 6, 2008 and clause 14 and attachment VII of The Memorandum of Understanding for the Restatement of the Concession Agreement, payable in preferred shares;
   
(iii)the remaining of $1,933,656,787: (a) $1,180,000,000 to the distribution of dividends in cash among shareholders of class A, B, C and D of shares, according to their subscription; and (b) $753,656,787, together with the facultative reserve for compliance of works for the year 2016, to the total amount of $963,656,787, to guarantee payment of future dividends.

 

 28 
 

  

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Individual Financial Statements

At March 31, 2018 presented in comparative format (Contd.)

 

NOTE 15 – RESOLUTIONS OF SHAREHOLDERS’ ORDINARY AND SPECIAL MEETINGS OF CLASS A, B, C AND D SPECIAL OF PREFERRED SHARES OF AEROPUERTOS ARGENTINA 2000 S.A. HELD ON APRIL 26, 2017 AND APRIL 9, 2018 (Contd.)

 

-issue 12,096,360 preferred shares of $1 par value under the same terms of the preferred shares issued in favor of the Argentine National Government as per class A, B and C Shareholders General Extraordinary and Special Meeting held on March 6, 2008;

 

-increase the capital stock from $863,335,292 to $875,431,652, i.e., in the amount of $12,096,360, through the issuance of 12,096,360 preferred shares of $ 1 par value, with no vote;

 

-that the preferred shares are subscribed fully by the Argentine National Government;

 

-delegate in the Board of Directors the registry in the Shareholders’ Registry of the capital stock increase decided; and

 

-delegate in the Board of Directors the time and opportunity of distribution of dividends to the shareholders of ordinary shares class A, B, C and D, according to cash flow, based on their subscription. To that purpose, it will be considered the request of the National Government to apply an equivalent amount to the dividends distributed to the Works of infrastructure additional to the contract commitments and any other commitment undertaken by the Company in the National System of Airports

 

The general ordinary and special meeting of class A, B, C and D and special of preferred shares held on April 9, 2018 decides among other issues:

 

 29 
 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Individual Financial Statements

At March 31, 2018 presented in comparative format (Contd.)

 

NOTE 15 – RESOLUTIONS OF SHAREHOLDERS’ ORDINARY AND SPECIAL MEETINGS OF CLASS A, B, C AND D SPECIAL OF PREFERRED SHARES OF AEROPUERTOS ARGENTINA 2000 S.A. HELD ON APRIL 26, 2017 AND APRIL 9, 2018 (Contd.)

 

-That the income of the year ended December 31, 2017 has the following destination:

 

(i)$2,419,272 for the constitution of the legal reserve;
   

(ii) $12,338,287 to the distribution of dividends corresponding to the preferred shares subscribed by the Argentine National Government according to the resolutions of the general extraordinary meeting of the Company´s Shareholders held on March 6, 2008 and clause 14 and attachment VII of The Memorandum of Understanding for the Restatement of the Concession Agreement, payable in preferred shares;

 

(iii)the remaining of $2,669,727,436 to the facultative reserve for compliance of works for future plans.

 

-issue 12,338,287 preferred shares of $1 par value under the same terms of the preferred shares issued in favor of the Argentine National Government as per class A, B and C Shareholders General Extraordinary and Special Meeting held on March 6, 2008;

 

-increase the capital stock from $875,431,652 to $887,769,939, i.e., in the amount of $12,338,287, through the issuance of 12,338,287 preferred shares of $ 1 par value, with no vote;

 

-that the preferred shares are subscribed fully by the Argentine National Government;

 

-delegate in the Board of Directors the registry in the Shareholders’ Registry of the capital stock increase decided.

 

 30 
 

  

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Individual Financial Statements

At March 31, 2018 presented in comparative format (Contd.)

 

NOTE 16 – EARNINGS PER SHARE

 

The Shareholders’ General Extraordinary Meeting held on March 6, 2008, approved by the ORSNA on April 25, 2008, earnings per share is calculated as net income for the year less accrued preferred shares dividends for the year, divided by the number of common shares.

 

   03.31.2018   03.31.2017 
Income for the period, net accrued dividends   819,175,180    840,035,169 
Amount of ordinary shares   258,517,299    258,517,299 
Earnings per shares   3.1687    3.2494 

 

NOTE 17- FINANCIAL RISK MANAGEMENT

 

The Group is exposed by its activities to several financial risks: market risk (including risk of exchange rate, risk of fair value due to interest rate and price risk), credit risk and liquidity risk.

 

These Separate Condensed Individual Interim Financial Statements do not include all the information on financial risk management requested in the annual financial statements, thus they should be read together with the financial statements audited at December 31, 2017.

 

There have been no changes in the risk management policies since the last yearly closing.

 

 31 
 

 

Aeropuertos Argentina 2000 S.A.

At March 31, 2018 presented in comparative format

Supplementary Information Regulation required by Art. 68 of the Regulations of the Buenos Aires Stock Exchange and by Art 12. Chapter III, Title IV of the National Securities Commission

(Contd.)

 

General issues about the activity of the Society

 

1. Specific and significant legal regimes that imply declines or contingent re-births of benefits foreseen by said provisions.

They do not exist.

 

2. Significant changes in the company's activities or other similar circumstances that occurred during the years included in the financial statements that affect their comparability with those presented in previous years, or that could affect it with those that will be presented in future periods / years.

 

See Notes 1 and 2 to these financial statements.

 

3. Classification of the balances of credits and debts in the following categories:

 

a) Due date, with subtotals for each of the four (4) last quarters and for each previous year;

b) Without established deadline;

c) To expire, with subtotals for each of the first four (4) quarters and for each subsequent year.

 

       Due dates   Without
 established
     
Item  Past due   1st Q   2nd Q   3rd Q   4th Q   Beyond 4th Q   term   Total 
    $                                    
RECEIVABLES                                        
Trade receivables   91,128,814    1,291,159,760    10,532,764    459,153    -    -    -    1,393,280,491 
Other receivables   -    286,656,881    2,554,827    2,554,827    2,554,825    2,662,532,478    9,438,052    2,966,291,890 
    91,128,814    1,577,816,641    13,087,591    3,013,980    2,554,825    2,662,532,478    9,438,052    4,359,572,381 
                                         
DEBTS                                        
Specific allocation of income to be paid E.N.A.   -    195,676,512    -    -    -    -    -    195,676,512 
Accounts payable and other   54,183,802    1,286,098,408    14,438,881    8,053,563    7,713,904    112,098,768    251,420,065    1,734,007,391 
Borrowings   -    121,656,054    18,066,264    11,116,507    5,267,956    8,003,387,589    -    8,159,494,370 
Liability for income tax   -    248,485,765    -    -    -    -    -    248,485,765 
Deferred tax   -    -    -    -    -    -    112,565,996    112,565,996 
Provisions and other charges   -    299,666,874    22,031,046    20,617,234    19,890,594    57,003,341    99,653,133    518,862,222 
    54,183,802    2,151,583,613    54,536,191    39,787,304    32,872,454    8,172,489,698    463,639,194    10,969,092,256 

 

 32 
 

  

Aeropuertos Argentina 2000 S.A.

At March 31, 2018 presented in comparative format

Supplementary Information Regulation required by Art. 68 of the Regulations of the Buenos Aires Stock Exchange and by Art 12. Chapter III, Title IV of the National Securities Commission

(Contd.)

 

General issues about the activity of the Society (Contd.)

 

4. Classification of receivables and debts, in a way that allows to know the financial effects produced by its maintenance. It should enable the identification of:

 

a) Accounts in national currency, in foreign currency and in kind:

 

   Credits   Debts (1) 
   Thousands of $ 
In national currency   3,423,640    2,615,297 
In foreign currency          
American dollars   935,933    8,222,747 
Euros   -    21,575 
Total   4,359,573    10,859,619 

 

(1) Does not include deferred profits or additional consideration of permit holders.

 

b) Balances subject to adjustment clauses and those that are not;

 

See note 11 to the present Financial Statements.

 

c) Balances that accrue interest and those that do not.

 

See note 6 to the present Financial Statements.

 

 33 
 

 

Aeropuertos Argentina 2000 S.A.

At March 31, 2018 presented in comparative format

Supplementary Information Regulation required by Art. 68 of the Regulations of the Buenos Aires
Stock Exchange and by Art 12. Chapter III, Title IV of the National Securities Commission

(Contd.)

 

General issues about the activity of the Society (Contd.)

 

5. Detail of the percentage of participation in Companies of Article 33 of Law No. 19,550 in the capital and in the total number of votes. In addition, debit balances and / or creditors by company and segregated as provided in points 3 and 4 above.

 

Shareholders  Shareholders Number, Type
and Nominal Value of
Shares
  Class of
shares
  % share in
ordinary
capital
   %
participation
in total votes
   % share in
preferred
capital
 
Societá per Azioni Esercizi Aeroportuali S.E.A.  21,973,747 ordinary shares with a par value of $ 1 each and entitled to 1 vote per share.   Class A   8,50%   8,50%     
Corporación América Sudamericana S.A.  76,908,114 ordinary shares with a par value of $ 1 each and entitled to 1 vote per share.  Class B   29,75%   29,75%     
RIVA SAICFyA  2,197,375 ordinary shares with a par value of $ 1 each and entitled to 1 vote per share.  Class B   0,85%   0,85%     
Corporación América S.A.  61,526,492 class C shares and 57,131,742 ordinary class A shares with a par value of $ 1 each and entitled to one vote per share.  Class C & Class A   45,90%   45,90%     
Estado Nacional Argentino  38,779,829 ordinary shares with a par value of $ 1 each and entitled to 1 vote per share.  Class D   15%   15%     
Estado Nacional Argentino  616,914,353 preferred shares with a par value of $ 1 each without the right to vote. Preferred shares will have the right to vote in the cases listed in Note 16.                100%

 

 34 
 

  

Aeropuertos Argentina 2000 S.A.

At March 31, 2018 presented in comparative format

Supplementary Information Regulation required by Art. 68 of the Regulations of the Buenos Aires
Stock Exchange and by Art 12. Chapter III, Title IV of the National Securities Commission

(Contd.)