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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 August, 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 six months ended June 30, 2018 of AA2000 (the “AA2000 Consolidated Financial Statements”) as well as the stand-alone condensed individual interim financial statements for the six months ended June 30, 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 annual report on Form 20-F and that will consolidate the results of operations and financial condition of all our subsidiaries. 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 six months ended June 30, 2018.
99.2   Free translation into English of AA2000 Condensed Individual Interim Financial Statements for the six months ended June 30, 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: August 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

 

 

 

(Back To Top)

Section 2: EX-99.1 (EXHIBIT 99.1)

 

Exhibit 99.1

 

Aeropuertos Argentina 2000 S.A.

 

Condensed Consolidated Interim Financial Statements

At June 30, 2018 presented in comparative format

 

 

 

 

Aeropuertos Argentina 2000 S.A.

 

Condensed Consolidated Interim Financial Statements

At June 30, 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 33
Report of Independent Auditors  
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 six 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 
629,252,640 Preferred shares of AR$ 1 par value with no voting rights   629,252,640    629,252,640 
    887,769,939    887,769,939 

 

 1 

 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890 

Consolidated Statements of Comprehensive Income

For the six month periods ended at June 30, 2018 and 2017

 

   Three months at   Six months at 
   06.30.18   06.30.17*
Modified
   06.30.18   06.30.17*
Modified
 
   $ 
Continuous Operations                    
Revenue (Note 4)   4,233,607,819    2,853,397,087    8,208,723,693    5,864,653,221 
CINIIF 12 - paragraph 14 Credit (Note 5)   1,464,452,697    928,217,391    2,340,473,743    1,425,397,647 
Cost of services (Note 10)   (2,185,157,978)   (1,585,616,406)   (4,144,927,779)   (3,110,599,490)
CINIIF 12 - paragraph 14 Debit   (1,463,307,763)   (927,393,106)   (2,337,962,656)   (1,423,865,946)
Gross Profit   2,049,594,775    1,268,604,966    4,066,307,001    2,755,585,432 
Distribution and selling expenses (Note 10)   (291,379,237)   (190,172,429)   (538,857,030)   (374,679,076)
Administrative expenses (Note 10)   (185,481,751)   (175,232,511)   (366,706,370)   (343,663,234)
Other income and expenses, net (Note 4)   101,425,345    68,918,660    194,246,612    141,509,024 
Operating profit   1,674,159,132    972,118,686    3,354,990,213    2,178,752,146 
                     
Finance Income (Note 4)   1,011,655,420    326,337,484    1,183,680,866    460,127,073 
Finance Costs  (Note 4)   (3,637,825,457)   (573,793,254)   (4,331,190,216)   (774,839,078)
Loss/ Income before income tax   (952,010,905)   724,662,916    207,480,863    1,864,040,141 
Income tax (Note 4)   312,006,859    (206,469,811)   (26,311,703)   (501,784,118)
Loss/ Income for the period for continuous operations   (640,004,046)   518,193,105    181,169,160    1,362,256,023 
Loss/ Income for the period   (640,004,046)   518,193,105    181,169,160    1,362,256,023 
Other comprehensive income   -    -    -    - 
Comprehensive Loss/ Income for the period   (640,004,046)   518,193,105    181,169,160    1,362,256,023 
Loss/ Income attributable to:                    
Shareholders   (643,539,717)   518,025,259    178,781,726    1,361,145,000 
Non –Controlling Interest   3,535,671    167,846    2,387,434    1,111,023 
                     
Earnings per share basic and diluted attributable to shareholders of the Company during the period (shown in $ per share ) from continuous operations   (2.4878)   1.9925    0.6765    5.2456 

 

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

 

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

 

 2 

 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890 

Consolidated Statements of Financial Position

At June 30, 2018 and December 31, 2017

 

   06.30.18   12.31.17 
   $ 
Assets          
Non- Current Assets          
Property, plant and equipment   23,916,773    25,853,595 
Intangible Assets (Note 5)   12,658,687,909    10,624,055,713 
Deferred Income tax assets   4,662,542    2,822,421 
Other receivables (Note 4)   2,971,603,462    2,549,858,177 
Total Non-Current Assets   15,658,870,686    13,202,589,906 
Current Assets          
Investments (Note 4)   94,476,223    - 
Other receivables (Note 4)   710,780,644    337,310,968 
Trade receivables,net (Note 4)   1,470,669,855    1,056,245,965 
Other Assets   6,333,627    1,985,631 
Cash and cash equivalents (Note 4)   3,110,060,851    2,319,754,598 
Total Current Assets   5,392,321,200    3,715,297,162 
Total Assets   21,051,191,886    16,917,887,068 
           
Shareholders’ Equity and Liabilities          
Equity attributable to Shareholders:          
Common shares   258,517,299    258,517,299 
Preferred shares   629,252,640    616,914,353 
Share Premium   137,280,595    137,280,595 
Legal and facultative reserve   5,404,916,672    2,732,769,964 
Retained earnings   232,835,837    2,684,484,995 
Subtotal   6,662,803,043    6,429,967,206 
Non-Controlling Interest   13,559,322    11,171,888 
Total Shareholders’ Equity   6,676,362,365    6,441,139,094 
           
Liabilities          
Non-Current Liabilities          
Accounts payable and others (Note 4)   106,924,109    128,108,326 
Borrowings (Note 6)   11,121,123,465    7,401,161,525 
Deferred income tax liability   138,236,277    86,307,610 
Provisions and other charges (Note 9)   55,625,620    59,625,687 
Total Non-Current liabilities   11,421,909,471    7,675,203,148 
Current Liabilities          
Fee payable to the Argentine National Government (Note 7)   211,658,012    176,591,493 
Accounts payable and others (Note 4)   1,809,945,254    1,758,559,433 
Income tax, net of prepayments   5,493,829    213,427,506 
Borrowings (Note 6)   576,852,868    149,976,119 
Provisions and other charges (Note 9)   348,970,087    502,990,275 
Total Current Liabilities   2,952,920,050    2,801,544,826 
Total Liabilities   14,374,829,521    10,476,747,974 
Total Shareholders’ Equity and Liabilities   21,051,191,886    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 Accounting 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 June 30, 2018 and 2017

 

   Capital Stock   Capital Stock                       Non-   Total 
   Common   Preferred   Share   Legal   Facultative   Retained       Controlling   Shareholders’ 
   Shares   Shares   Premium   Reserve   Reserve   earnings   Total   Interest   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 
IFRIC 9 Adjustment (Note 3.8)                            54,054,111    54,054,111         54,054,111 
Balance at 01-01-18 modified   258,517,299    616,914,353    137,280,595    172,667,058    2,560,102,906    2,738,539,106    6,484,021,317    11,171,888    6,495,193,205 
Resolutions of the Shareholders’ Meeting dated April 9, 2018 (Note 15):                                             
Capitalization of dividends of preferred shares   -    12,338,287    -    -    -    (12,338,287)   -    -    - 
Legal reserve   -    -    -    2,419,272    -    (2,419,272)   -    -    - 
Facultative reserve   -    -    -    -    2,669,727,436    (2,669,727,436)   -    -    - 
Net Income for the period   -    -    -    -    -    178,781,726    178,781,726    2,387,434    181,169,160 
Balance at 06.30.18   258,517,299    629,252,640    137,280,595    175,086,330    5,229,830,342    232,835,837    6,662,803,043    13,559,322    6,676,362,365 
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 
Resolutions of the Shareholders’ Meeting dated April 26, 2017 (Note 15)                                             
Capitalization of dividends of preferred shares   -    12,096,360    -    -    -    (12,096,360)   -    -    - 
Distribution of dividends of common shares                            (1,180,000,000)   (1,180,000,000)        (1,180,000,000)
Legal reserve   -    -    -    63,338,434    -    (63,338,434)   -    -    - 
Facultative reserve   -    -    -    -    753,656,787    (753,656,787)   -    -    - 
Net income for the period   -    -    -    -    -    1,361,145,000    1,361,145,000    1,111,023    1,362,256,023 
Balance at 06.30.17   258,517,299    616,914,353    137,280,595    172,667,058    2,560,102,906    1,361,145,000    5,106,627,211    9,442,556    5,116,069,767 

 

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

 

 4 

 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890 

Consolidated Statements of Cash Flow

For the six month periods ended at June 30, 2018 and 2017

 

      06.30.18  

06.30.17*

Modified

 
   Notes  $ 
Cash Flow from operating activities             
Net income for the period      181,169,160    1,362,256,023 
Adjustment for:             
Amortization of intangible assets  5   305,841,547    253,763,568 
Specific allocation of accrued and unpaid income  7   211,658,012    139,927,654 
Impairment of intangible assets  5   -    484,426 
Depreciation of fixed assets  10   1,990,822    1,780,084 
Bad debts provision  8   12,436,878    12,258,733 
Income Tax  4   26,311,703    501,784,118 
Accrued and unpaid borrowing interest costs      161,960,513    78,980,472 
Accrued deferred revenues and additional consideration  9   (78,497,764)   (98,479,916)
Accrued and unpaid Exchange differences      3,495,176,928    278,302,800 
Provision for litigation  9   4,842,062    1,461,272 
              
Changes in operating assets and liabilities:             
Changes in trade receivables      (354,788,620)   59,907,707 
Changes in other receivables      (795,214,962)   (783,223,224)
Changes in other assets      (4,347,996)   265,232 
Changes in accounts payable and others      30,201,607    (138,484,676)
Changes in liabilities for current income tax      159,592,977    (132,341,583)
Changes in provisions and other charges      62,135,447    43,661,943 
Changes in fee payable to the Argentine National Government      (176,591,493)   (147,629,066)
Changes in borrowings      724,136    312,873,134 
Increase of intangible assets      (2,168,183,233)   (1,375,649,657)
Income tax paid      (361,767,850)   (820,641,104)
Net cash provided by / (used in) operating activities      714,649,874    (448,742,060)
              
Cash flow for investing activities             
Acquisition of other current investments  4   (94,476,223)   - 
Acquisition of fixed assets      (54,000)   (2,346,146)
Net Cash Flow used in investing activities      (94,530,223)   (2,346,146)
              
Cash Flow from financing activities             
New Borrowings  6   -    6,312,000,000 
Borrowings paid  6   (32,464,896)   (3,084,349,784)
Borrowings paid- interests  6   (281,577,182)   (408,563,329)
Cash flow release      -    490,566,044 
Dividends paid  9   (146,500,000)   (340,000,000)
Net Cash Flow (used in) / provided by financing activities      (460,542,078)   2,969,652,931 
              
Net Increase in cash and cash equivalents      159,577,573    2,518,564,725 
              
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      159,577,573    2,518,564,725 
Foreign Exchange differences      630,728,680    63,620,294 
Cash and cash equivalents at the end of the period (*)      3,110,060,851    3,361,927,886 
Acquisition of intangible assets through liabilities for finance leases      14,249,231    3,531,919 
Dividends on preferred shares      6,292,526    6,169,144 

 

(*) 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 Accounting Statements audited for the year ended at December 31, 2017.

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

 

 5 

 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Consolidated Financial Statements

At June 30, 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 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 the Company entered into with the Argentine National Government on April 3, 2007 (the “Memorandum of Agreement”). We 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 the 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 “A” Group at June 30, 2018 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 June 30, 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 accounting statements audited for the year ended at 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
06.30.18
   Net
Shareholders
‘equity at
closing
   Income for the
period
 
           $ 
Servicios y Tecnología Aeroportuarios S.A. (2)   14,398,848    99.30%   20,055,610    20,196,399    682,063 
Cargo & Logistics SA.   5,566,259    98.63%   3,060,539    3,102,955    (929,254)
Paoletti América S.A.   6,000    50.00%   15,526    31,051    - 
Texelrío S.A. (3)   84,000    70.00%   35,159,751    48,513,650    7,989,167 
Villalonga Furlong S.A (4)   123,700    1.46%   78,347    5,383,363    (944,169)

 

(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 June 30, 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 June 30, 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 August 7, 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 at December 31, 2017. The results of the six-month periods ended at June 30, 2018 and 2017 do not necessarily reflect the proportion of the results of the Company for the full year.

 

 9 

 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Consolidated Financial Statements

At June 30, 2018 presented in comparative format (Contd.)

 

NOTE 3 – ACCOUNTING POLICIES (Contd.)

 

1) Comparative Information

 

The information at June 30, 2017 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.

 

Certain figures in the financial statements for the period ended at June 30, 2017 have been reclassified for the purpose of comparative presentation, in relation to the revenues from the Strengthening Trust ($145,603,074), included in the revenue item which have been reclassified to the item Other Net Income and Expenses in the Statement of Individual Comprehensive Income. Said reclassification does not affect the exposed equity balances.

 

In turn, certain transactions have been reclassified in the Cash Flow Statement that were exposed 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 those used in the Individual Financial Statements ended at December 31, 2017.

 

3) Subsidiaries

 

Controlled Companies 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 controlled companies 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).

 

 10 

 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Consolidated Financial Statements

At June 30, 2018 presented in comparative format (Contd.)

 

NOTE 3 – 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 the Company the concession of the “A” Group airports 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 are comprised by 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 accounting policies.

 

In the preparation of these Consolidated Financial Statements the significant areas of judgement by management in the application of the Group 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.

 

 11 

 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Consolidated Financial Statements

At June 30, 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.

 

IAS 29 "Financial information in hyperinflationary economies" requires that the financial statements of an entity whose functional currency is that of a hyperinflationary economy be expressed in terms of the current unit of measurement at the closing date of the reporting period, regardless of whether they are based on the historical cost method or the current cost method. To this end, in general terms, the inflation produced from the date of acquisition or from the revaluation date, as applicable, must be computed in the non-monetary items.

 

In order to conclude on whether an economy is categorized as hyperinflationary in the terms of IAS 29, the standard details a series of factors to be considered, including the existence of a cumulative inflation rate in three years that approximates or exceed 100%. Bearing in mind that the downward trend in inflation observed in the previous year has reversed, noting a significant increase in inflation during 2018, which also expects the cumulative inflation rate of the last three years to exceed 100% and that the rest of the indicators do not contradict the conclusion that Argentina should be considered a hyperinflationary economy for accounting purposes, the Management understands that there is sufficient evidence to conclude that Argentina is a hyperinflationary economy in the terms of IAS 29, from 1 July, 2018

 

As of June 30, 2018, the restatement criteria of the financial information established in IAS 29 have not been applied. However, in recent years certain macroeconomic variables that affect the Company's businesses, such as the cost of salaries and the prices of inputs, have undergone significant annual variations. This circumstance must be considered in the evaluation and interpretation of the financial situation and the results presented by the Company in these financial statements.

 

 12 

 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Consolidated Financial Statements

At June 30, 2018 presented in comparative format (Contd.)

 

NOTE 3 – ACCOUNTING POLICIES (Contd.)

 

6) Foreign currency translation (Contd.)

 

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 gains and losses are shown in “Finance Income” and/or “Finance Expense” 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 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.

 

8) Changes in accounting policies

 

a)New rules and modifications adopted by the Company

 

The following standards and modifications have been adopted by the Company for the six-month period ended June 30, 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.

 

 13 

 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Consolidated Financial Statements

At June 30, 2018 presented in comparative format (Contd.)

 

NOTE 3 – ACCOUNTING POLICIES (Contd.)

 

8) Changes in accounting policies (Contd.)

 

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; decreases 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 accumulated results of the Group due to the classification and measurement of financial instruments as of January 1, 2018 is as follows:

 

Accumulated results as of December 31, 2017 - IAS 39   2,684,484,995 
Decrease in the allowance for bad debts, net   54,054,111 
Accumulated results as of January 1, 2018 - IFRS 9   2,738,539,106 

 

-IFRS 15 "Revenue from ordinary activities from contracts with customers"

 

Management evaluated the effects of the application of the new standard and has not identified that the application of IFRS 15 may affect the timing of recognition of future income of the Company.

 

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.

 

 14 

 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Consolidated Financial Statements

At June 30, 2018 presented in comparative format (Contd.)

 

NOTE 3 – ACCOUNTING POLICIES (Contd.)

 

8) Changes in accounting policies (Contd.)

 

b)New standards and amendments issued, but which do not result in effective application as of June 30, 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 of adopting 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 June 30, 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

 

 

   06.30.18   12.31.17 
   $ 
Cash and cash equivalents          
Cash and funds in custody   52,520,067    23,409,956 
Banks   2,306,866,945    2,018,403,943 
Checks not yet deposited   28,155,050    22,862,046 
Time deposits   722,518,789    255,078,653 
    3,110,060,851    2,319,754,598 
Investments          
Time deposits   94,476,223    - 
    94,476,223    - 
Trade receivables, net          
Trade receivables   1,525,945,213    1,173,820,499 
Related parties (Note 7)   1,408,788    4,565,000 
Checks-postdated checks   38,458,552    32,638,434 
Provision for bad debts (Note 8)   (95,142,698)   (154,777,968)
    1,470,669,855    1,056,245,965 
Other current receivables          
Expenses to be recovered   17,832,324    1,570,056 
Guarantees granted   5,652,910    5,637,870 
Tax credits   676,677,632    308,972,682 
Prepaid Insurance   5,915,832    17,340,779 
Other   4,701,946    3,789,581 
    710,780,644    337,310,968 

  

 16 

 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Consolidated Financial Statements

At June 30, 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.)

 

   06.30.18   12.31.17 
   $ 
Other non-current receivables          
Tax credits   754,217    754,217 
Trust for Strengthening (Note 7)   2,970,849,245    2,549,103,960 
    2,971,603,462    2,549,858,177 
         
Accounts payable and other current        
Obligations payable   246,308,118    419,020,984 
Suppliers   929,025,250    685,513,316 
Foreign suppliers   44,587,421    44,080,464 
Related Parties (Note 7)   89,513,107    86,767,660 
Salaries and social security liabilities   390,075,685    422,441,830 
Other fiscal liabilities   110,435,672    100,735,179 
    1,809,945,254    1,758,559,433 
           
Accounts payable and other non-current          
Tax liabilities   104,190,609    128,108,326 
Suppliers   2,733,500    - 
    106,924,109    128,108,326 

 

 17 

 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Consolidated Financial Statements

At June 30, 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 COMPREHENSIVE INCOME

 

   Three months at   Six months at 
   06.30.18   06.30.17   06.30.18   06.30.17 
   $ 
Revenues                    
Aeronautical revenues   2,372,106,588    1,553,688,983    4,744,286,860    3,293,736,070 
Non-Aeronautical revenues   1,861,501,231    1,299,708,104    3,464,436,833    2,570,917,151 
    4,233,607,819    2,853,397,087    8,208,723,693    5,864,653,221 
Other income and expenses net                    
Trust for Strengthening (Note 1.1)   104,929,941    70,794,606    203,742,498    145,603,074 
Others   (3,504,596)   (1,875,946)   (9,495,886)   (4,094,050)
    101,425,345    68,918,660    194,246,612    141,509,024 

 

   Three months at   Six months at 
   06.30.18   06.30.17   06.30.18   06.30.17 
   $ 
Finance Income                    
Interest   204,588,002    121,386,962    220,715,747    403,563,516 
Foreign Exchange differences   807,067,418    204,950,522    962,965,119    56,563,557 
    1,011,655,420    326,337,484    1,183,680,866    460,127,073 
Finance Expenses                    
Interest   (118,989,195)   (82,767,566)   (199,165,195)   (427,128,836)
Foreign Exchange differences   (3,518,836,262)   (491,025,688)   (4,132,025,021)   (347,710,242)
    (3,637,825,457)   (573,793,254)   (4,331,190,216)   (774,839,078)
    (2,626,170,037)   (247,455,770)   (3,147,509,350)   (314,712,005)
Income Tax                    
Current   337,040,289    (203,388,359)   5,758,806    (471,278,482)
Deferred   (25,033,430)   (3,081,452)   (32,070,509)   (30,505,636)
    312,006,859    (206,469,811)   (26,311,703)   (501,784,118)

 

 18 

 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Consolidated Financial Statements

At June 30, 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   2,340,473,743    1,425,397,647 
Impairment (1)   -    (484,426)
Balance at June 30   14,991,106,766    10,231,297,543 
           
Accumulated Amortization:          
Balance at January 1   (2,026,577,310)   (1,500,497,074)
From the period (Note 10)   (305,841,547)   (253,763,568)
Balance at June 30   (2,332,418,857)   (1,754,260,642)
Total Net Balance   12,658,687,909    8,477,036,901 

 

(1) Corresponds to the impairment of goodwill for the purchase of Texelrío S.A.

During the six month periods ended at June 30, 2018 and 2017, the group has capitalized expenses for finance interest for the amount of $158,041,279 and $46,216,071 respectively.

 

 19 

 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Consolidated Financial Statements

At June 30, 2018 presented in comparative format (Contd.)

 

NOTE 6 – BORROWINGS

 

Breakdown of borrowings:

 

   06.30.18   12.31.17 
   $ 
Non-current          
Negotiable Obligations   11,179,375,000    7,459,600,000 
Finance lease liabilities   34,297,403    39,501,664 
Cost of issuance of Negotiable Obligations   (92,548,938)   (97,940,139)
Total Non-Current   11,121,123,465    7,401,161,525 
Current          
Bank borrowings   7,122,703    17,865,756 
Negotiable Obligations   521,379,190    96,126,536 
Finance lease liabilities   48,350,975    35,983,827 
Total Current   576,852,868    149,976,119 
Total   11,697,976,333    7,551,137,644 

 

Changes in borrowings:

 

   2018   2017 
   $ 
Balance at January 1   7,551,137,644    3,115,254,471 
New borrowings   14,249,231    6,315,531,919 
Payments   (314,042,078)   (3,492,913,113)
Accrued interests   336,251,861    456,689,418 
Foreign Exchange differences   4,110,379,675    323,303,353 
Net Balance at June 30   11,697,976,333    6,717,866,048 

 

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 June 30, 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 June 30, 2018, the reasonable value of negotiable obligations issued in February 2017 is of $11,394,286,885. 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 June 30, 2018 presented in comparative format (Contd.)

 

NOTE 7 – BALANCES AND TRANSACTIONS WITH RELATED PARTIES

 

Balances with other related companies at June 30, 2018 and December 31, 2017 are as follows:

 

   06.30.18   12.31.17 
   $ 
Trade receivables net- Current          
Other related companies   1,408,788    4,565,000 
    1,408,788    4,565,000 
           
Accounts payable and other- Current          
Other related companies   89,513,107    86,767,660 
    89,513,107    86,767,660 
           
Provisions and other charges          
Other related companies   426,249    426,249 
Shareholders   98,500,000    245,000,000 
    98,926,249    245,426,249 

 

 22 

 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Consolidated Financial Statements

At June 30, 2018 presented in comparative format (Contd.)

 

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

 

During the six-month periods ended at June 30, 2018 and 2017 the Company has charged to the cost $32,941,393 and $38,706,170 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 six months ended June 30, 2018 $12,235,965 with Servicios Integrales América for out sourcing of systems and technology. During the six-month periods ended June 30, 2018 and 2017, the Company has accrued with Helport S.A. to intangible assets $252,227,524 (including the Ezeiza runway refurbishment works, Tucumán runway extension, Palomar terminal remodeling, among others) and $238,785,451 respectively, at cost $52,745,834 and $28,703,284 respectively. Likewise, AA2000 has accrued at June 30, 2018 and 2017 intangible assets for $5,169,092 and $15,771,576 respectively corresponding to the work of Mendoza carried out by Jose Cartellone –Helport-UTE.

 

During the period ended at June 30, 2018, $146,500,000 of dividends have been paid to the shareholders according to their shareholding

 

At June 30, 2018 and December 31, 2017 the Company owed the Argentine National Government $211,658,012 and $176,591,493 respectively, corresponding to the specific allocation of revenues of each period (see Note 10) and has recorded a receivable for $2,970,849,245 and $2,549,103,960 respectively corresponding to the Trust for Strengthening to fund the infrastructure works of AA2000.

 

Furthermore, short-term compensation to key management was $22,600,154 and $25,333,220 for the six month periods ended at June 30, 2018 and 2017 respectively.

 

 23 

 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Consolidated Financial Statements

At June 30, 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 Argentine Republic 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) 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.

 

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.

 

 24 

 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Consolidated Financial Statements

At June 30, 2018 presented in comparative format (Contd.)

 

NOTE 8 – BAD DEBT PROVISIONS

 

   2018   2017 
  

Bad Debt Provision

$

 
Initial balance at January 1   154,777,968    70,486,558 
IFRIC 9 adjustments at the beginning   (72,072,148)     
Balance at January 1, 2018   82,705,820    70,486,558 
Increases (Note 10)   12,436,878    12,258,733 
Final Balance at June 30   95,142,698    82,745,291 

 

NOTE 9 - PROVISIONS AND OTHER CHARGES

 

   Litigation   Related
parties
   Deferred
Income
   Trust for
works-
Portfolio of
Projects
2012/2014
   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    -    50,423,330    486,624,977    14,327,480    -    6,498,956    -    -    562,716,805 
Decreases   (12,558,750)   -    -    (475,491,921)   (7,688,625)   -    -    (146,500,000)   -    (642,239,296)
Accruals   -    -    (67,811,419)   -    -    -    (10,686,345)   -    -    (78,497,764)
At June 30, 2018   50,590,267    426,249    74,729,907    86,460,578    37,743,622    -    56,145,084    98,500,000    -    404,595,707 
                                                   
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   1,461,272    -    64,517,082    356,920,938    8,647,024    -    42,400,775    1,180,000,000    -    1,653,947,091 
Decreases   -    -    -    (361,502,014)   (8,659,407)   (58,638,777)   -    (340,000,000)   (23,678)   (768,823,876)
Accrual   -    -    (75,363,216)   -    -    -    (23,116,700)   -    -    (98,479,916)
At June 30, 2017   34,600,267    426,249    58,445,709    52,568,418    24,936,451    27,439,500    70,837,767    840,000,000    -    1,109,254,361 

 

 25 

 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Consolidated Financial Statements

At June 30, 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 at
06.30.2018
 
Six month period ended at 06.30.18                    
Specific allocation of revenues   1,222,454,988    -    -    1,222,454,988 
Airport services and maintenance   1,152,028,806    10,314,892    6,716,191    1,169,059,889 
Amortization of intangible assets   302,417,201    2,914,705    509,641    305,841,547 
Depreciation of property, plant and equipment   1,990,822    -    -    1,990,822 
Salaries and social security contributions   1,089,533,246    145,579,697    31,829,811    1,266,942,754 
Fees for services   26,419,583    29,112,645    3,431,856    58,964,084 
Public utilities and contributions   180,210,393    1,569,108    1,306,426    183,085,927 
Taxes   30,263,724    67,877,349    444,439,053    542,580,126 
Office expenses   115,820,948    98,663,820    4,580,444    219,065,212 
Insurance   19,612,560    1,448,645    -    21,061,205 
Advertising expenses   -    -    33,533,168    33,533,168 
Bad debts charges   -    -    12,436,878    12,436,878 
Board of Directors and Supervisory Committee fees   -    8,431,500    -    8,431,500 
Other   4,175,508    794,009    73,562    5,043,079 
Total at 06.30.18   4,144,927,779    366,706,370    538,857,030    5,050,491,179 
Six month period ended at 06.30.17                    
Specific allocation of revenues   873,618,442    -    -    873,618,442 
Airport services and maintenance   843,966,391    12,747,538    5,346,817    862,060,746 
Amortization of intangible assets   250,472,064    2,786,515    504,989    253,763,568 
Depreciation of property, plant and equipment   1,780,043    -    41    1,780,084 
Salaries and social security contributions   870,919,114    107,467,943    18,941,952    997,329,009 
Fees for services   23,390,915    40,300,715    4,276,557    67,968,187 
Public utilities and contributions   133,110,921    1,080,776    1,161,878    135,353,575 
Taxes   28,517,517    82,072,047    310,932,713    421,522,277 
Office expenses   66,172,183    87,266,505    2,579,662    156,018,350 
Insurance   15,420,801    2,196,235    -    17,617,036 
Advertising expenses   -    -    18,672,937    18,672,937 
Bad debts charges   -    -    12,258,733    12,258,733 
Board of Directors and Supervisory Committee fees   -    6,882,000    -    6,882,000 
Other   3,231,099    862,960    2,797    4,096,856 
Total at 06.30.17   3,110,599,490    343,663,234    374,679,076    3,828,941,800 

 

 26 

 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Consolidated Financial Statements

At June 30, 2018 presented in comparative format (Contd.)

 

NOTE 11- FOREIGN CURRENCY ASSETS AND LIABILITIES

 

Item  Foreign currency type
and amount at 06.30.18
   Foreign
exchange
rates
   Amount in local
currency at
06.30.18
   Amount in local
currency at 
12.31.17
 
           $ 
ASSETS                    
CURRENT ASSETS                    
Cash and cash equivalents  US$ 64,366,268    28.7500    1,850,530,203    1,599,688,612 
Deposits in guarantee  US$1,595,483    28.7500    45,870,136    15,502,290 
Investments  US$3,286,129    28.7500    94,476,223    - 
Trade receivables  US$38,720,310    28.7500    1,113,208,905    772,194,685 
Total current assets             3,104,085,467    2,387,385,587 
Total assets             3,104,085,467    2,387,385,587 
                     
LIABILITIES                    
CURRENT LIABILITIES                    
Accounts payable and others  US$2,589,847    28.8500    74,717,091    62,605,327 
   Euros 620,685    33.7285    20,934,765    12,907,006 
Borrowings  US$17,921,812    28.8500    517,044,269    101,634,365 
Total current liabilities             612,696,125    177,146,698 
                     
NON-CURRENT LIABILITIES                    
Borrowings  US$387,862,172    28.8500    11,189,823,666    7,474,997,006 
Total non-current liabilities             11,189,823,666    7,474,997,006 
Total liabilities             11,802,519,791    7,652,143,706 
Net liability position             8,698,434,324    5,264,758,117 

 

 27 

 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Consolidated Financial Statements

At June 30, 2018 presented in comparative format (Contd.)

 

NOTE 12 – OTHER RESTRICTED ASSETS

 

Other than what is mentioned in Note 6, Other Receivables in Current assets at June 30, 2018 and 2017 include $5,472,910 and $5,187,060 corresponding to guarantees granted to third parties in connection with lease agreements.

 

NOTE 13 - CAPITAL STOCK

 

At June 30, 2018 capital stock is as follows:

 

   Par Value 
   $ 
Paid-in and subscribed   887,769,939 
Registered with the Public Registry of Commerce   887,769,939 

 

The Company’s capital stock is comprised of 258,517,299 common shares of $1 par value and one vote each and 629,252,640 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.

 

According to the requirements of General Resolution 629 issued by the 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).

 

 28 

 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Consolidated Financial Statements

At June 30, 2018 presented in comparative format (Contd.)

 

NOTE 14 – DIVIDENDS ON PREFERRED SHARES

 

The preferred dividend accrued for the year ended at 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 six months ended at June 30, 2018 is of $6,292,526 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 at 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.

 

 29 

 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Consolidated Financial Statements

At June 30, 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:

 

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

 

 30 

 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Consolidated Financial Statements

At June 30, 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.)

 

(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.

 

 31 

 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Consolidated Financial Statements

At June 30, 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.

 

   06.30.2018   06.30.2017 
Income for the period, net accrued dividends   174,876,634    1,356,086,879 
Amount of common shares   258,517,299    258,517,299 
Earnings per shares   0.6765    5.2456 

 

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.

 

 32 

 

 

Aeropuertos Argentina 2000 S.A.

Consolidated Financial Statements

At June 30, 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 at June 30, 2018 presented in comparative format and the Consolidated Financial Statements as of December 31, 2017 presented in comparative format, 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.

 

 33 

 

 

Aeropuertos Argentina 2000 S.A.

Consolidated Financial Statements

At June 30, 2018 presented in comparative format

Summary of Information required by Resolution N ° 368/01

of the National Securities Commission

 

1. General considerations (Cont.)

 

The main works carried out during the period ended on June 30, 2018 are detailed below:

 

Ezeiza International Airport:

The following works are in the execution stage:

§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.

The metallic structure, glass and BHS corresponding to the facilities inside the building of departures (Zeppelin) were contracted.

§The Remodeling of Pre-boarding last floor Terminal A Stage 2 is being executed.
§The work of Multilevel Parking was started.

 

Works finished:

§Rehabilitation Header 29 and Filming Header 35 Stage 1 (crossing) (Includes Beaconing).
§New Medium Voltage Substation

 

Jorge Newbery Airport:

Works finished:

 

§New nucleus of Vertical Circulation - building IV
§Hall Extension of Check in Building IV

 

The following works are in the execution stage:

§Rebuilding Building IV ARSA Offices
§Fixed bridge telescopic footbridge installation
§New beacon substations and control systems
§Terminal demolition C (Necessary to be able to execute the first Stage of the New North Platform)
§The work of the Landfill and landscaping of Avenida Costanera is pre-assigned

 

 34 

 

 

Aeropuertos Argentina 2000 S.A.

Consolidated Financial Statements

At June 30, 2018 presented in comparative format

Summary of Information required by Resolution N ° 368/01

of the National Securities Commission

 

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.

 

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

 

The stage of works on the runway and platform corresponding to the closure of the airport was carried out and the airport was opened in accordance with the schedule, continuing with the works with the operating airport.

 

Bariloche Airport:

§Work is underway for the new sewage treatment plant

 

Santa Rosa Airport:

The work of remodeling the terminal is being tendered.

 

 35 

 

 

Aeropuertos Argentina 2000 S.A.

Consolidated Financial Statements

At June 30, 2018 presented in comparative format

Summary of Information required by Resolution N ° 368/01

of the National Securities Commission

 

Works finished:

§PAPIs installation work.
§work of the perimeter fence.

 

San Juan Airport:

The work of the New Parking and Collection Booths has finished.

 

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.

 

 36 

 

 

Aeropuertos Argentina 2000 S.A.

Consolidated Financial Statements

At June 30, 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 June 30, 2018, 2017, 2016, 2015, and 2014, respectively, is presented.

 

   06.30.18   06.30.17   06.30.16   06.30.15   06.30.14 
   Thousands $ 
Current Asset   5,392,321    4,360,582    1,633,975    913,750    780,491 
Non-current Assets   15,658,871    10,589,533    7,110,983    5,770,155    4,587,823 
Total Assets   21,051,192    14,950,115    8,744,958    6,683,905    5,368,314 
                          
Current liabilities   2,952,920    2,934,464    2,314,020    1,606,889    1,031,516 
Non- Current Liabilities   11,421,910    6,899,582    2,686,269    2,172,748    2,273,163 
Total Liabilities   14,374,830    9,834,046    5,000,289    3,779,637    3,304,679 
Net equity attributable to majority shareholders   6,662,803    5,106,627    3,737,614    2,899,168    2,060,870 
Non-controlling interest   13,559    9,443    7,055    5,100    2,765 
Net Equity   6,676,362    5,116,070    3,744,669    2,904,268    2,063,635 
Total   21,051,192    14,950,115    8,744,958    6,683,905    5,368,314 

 

 37 

 

 

Aeropuertos Argentina 2000 S.A.

Consolidated Financial Statements

At June 30, 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 six month periods ended June 30, 2018, 2017, 2016, 2015 and 2014.

 

   06.30.18   06.30.17   06.30.16   06.30.15   06.30.14 
   Thousands $ 
Gross Profit   4,066,307    2,755,585    2,247,637    1,175,622    940,113 
Administrative and distribution and selling expenses   (905,563)   (718,342)   (570,669)   (332,437)   (234,971)
Other net income and expenses   194,247    141,509    113,176    63,697    53,943 
Operating profit   3,354,990    2,178,752    1,790,144    906,882    759,085 
Income and financial costs   (3,147,509)   (314,712)   (532,804)   (250,643)   (529,401)
Result for participation of related companies   -    -    -    (98)   (387)
Income before tax   207,481    1,864,040    1,257,340    656,141    229,297 
Income tax   (26,312)   (501,784)   (434,203)   (215,330)   (81,928)
Result of the period   181,169    1,362,256    823,137    440,811    147,369 
Other comprehensive incomes   -    -    -    -    - 
Comprehensive result of the period   181,169    1,362,256    823,137    440,811    147,369 
Result attributable to majority shareholders   178,782    1,361,145    821,223    438,994    147,428 
Non-controlling interest   2,387    1,111    1,914    1,817    (59)

 

4. Cash flow structure

 

   06.30.18   06.30.17   06.30.16   06.30.15   06.30.14 
   Thousands $ 
Cash Flows provided by / (used in) operating activities   714,650    (448,742)   843,070    201,646    226,250 
Cash Flow (used in) investing activities   (94,530)   (2,346)   (1,552)   (712)   (269)
Cash Flow (used in) / provided by financing activities   (460,542)   2,969,653    (598,962)   (272,038)   (188,675)
Net Cash Flow provided by / (used in)  the period   159,578    2,518,565    242,556    (71,104)   37,306 

 

 38 

 

 

Aeropuertos Argentina 2000 S.A.

Consolidated Financial Statements

At June 30, 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 six month periods ended at June 30, 2018 and 2017

 

Results of operations

 

·Income

 

The following table shows the composition of consolidated revenues for the six month periods ended June 30, 2018 and 2017:

 

Revenues  06.30.18  

%

revenues

  

06.30.17*

Modified

  

%

revenues

 
   Thousands $       Thousands $     
Aeronautical revenues   4,744,287    57.91    3,293,736    56.16 
Non-aeronautical revenues   3,447,653    42.09    2,570,917    43.84 
Total   8,191,940    100.0%   5,864,653    100.0%

 

*See Note 3.1 (comparative information) for further detail on restatement.

 

The following table shows the composition of the aeronautical revenues for the six month periods ended June 30, 2018 and 2017:

 

Aeronautical revenues  06.30.18  

%

revenues

   06.30.17  

%

revenues

 
   Thousands $       Thousands $     
Landing fee   430,543    9.07    293,079    8.90 
Parking fee   174,498    3.68    124,506    3.78 
Air station use rate   4,139,246    87.25    2,876,151    87.32 
Total   4,744,287    100.00%   3,293,736    100.0 

 

 39 

 

 

Aeropuertos Argentina 2000 S.A.

Consolidated Financial Statements

At June 30, 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 six month periods ended at June 30, 2018 and 2017 (Contd.)

 

Costs of sale

 

The cost of sales had the following variation:

 

   Thousands $ 
Costs of sales for the six month period ended at 06.30.18   4,144,928 
Costs of sales for the six month period ended at 06.30.17   3,110,599 
Variation   1,034,328 

 

Administrative Expenses

 

The administrative expenses had the following variation:

 

   Thousands $ 
Administrative expenses for the six month period ended at 06.30.18   366,706 
Administrative expenses for the six month period ended at 06.30.17   343,663 
Variation   23,043 

 

Distribution and selling expenses

 

The distribution and selling expenses had the following variation:

 

   Thousands $ 
Distribution and selling expenses for the six month period ended at 06.30.18   538,857 
Distribution and selling expenses for the six month period ended at 06.30.17   374,679 
Variation   164,178 

 

 40 

 

 

Aeropuertos Argentina 2000 S.A.

Consolidated Financial Statements

At June 30, 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 six month periods ended at June 30, 2018 and 2017 (Contd.)

 

Income and financial costs

 

Net financial income and costs totaled a loss of $3,147,509 thousand during the six month period ended at June 30, 2018 with respect to thousands of $314,712 loss during the same period of the previous year.

 

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

 

Other net income and expense

 

The other net income and expense item recorded profits of approximately $194,247 thousand during the six month period ended at June 30 31, 2018 with respect to profits of $141,509 thousand in the same period of the previous year.

 

Liquidity and Capital Resources

 

Capitalization

 

The total capitalization of the Company as of June 30, 2018 amounted to $18,374,338 thousand composed of thousands of $11,697,976 of borrowings and a net equity worth of $6,676,362 thousand, while the total capitalization of the Company at June 30, 2018 amounted to thousands of $11,833,936 comprised of thousands of $6,717,866 of borrowings and a net equity worth of thousands of $5,116,070.

 

The debt as a percentage of total capitalization amounted to approximately 63.66% at June 30, 2018 and 56.77% at June 30, 2017.

 

Financing

 

See in detail Note 6 to these Consolidated Financial Statements.

 

 41 

 

 

Aeropuertos Argentina 2000 S.A.

Consolidated Financial Statements

At June 30, 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 six month periods ended June 30, 2018, 2017, 2016, 2015 and 2014:

 

   06.30.18   06.30.17   06.30.16   06.30.15   06.30.14 
Liquidity (1)   1.87    1.52    0.72    0.58    0.77 
Solvency (1)   0.47    0.53    0.76    0.79    0.63 
Immobilization of capital   0.74    0.71    0.81    0.86    0.85 

 

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 six month periods ended June 30, 2018, 2017, 2016, 2015 and 2014:

 

Airport  06.30.18   06.30.17   06.30.16   06.30.15   06.30.14 
   Thousands 
Aeroparque   6,616    6,460    5,351    5,174    4,797 
Ezeiza   5,189    4,884    4,884    4,281    4,336 
Córdoba   1,683    1,356    1,034    894    813 
Mendoza   929    841    697    619    633 
Tucumán   454    285    311    275    239 
Bariloche   615    520    476    413    394 
C. Rivadavia   309    283    262    255    239 
Río Gallegos   112    125    132    128    120 
Iguazú   445    449    387    390    376 
Salta   480    516    424    397    340 
Total   16,832    15,721    13,958    12,826    12,287 
Overall Total   18,378    16,898    14,831    13,675    13,011 
Variation   8.8%   13.9%   8.5%   5.10%   3.86%

 

 42 

 

 

Aeropuertos Argentina 2000 S.A.

Consolidated Financial Statements

At June 30, 2018 presented in comparative format

Summary of Information required by Resolution N ° 368/01

of the National Securities Commission

 

Amount of movement of aircraft for six month periods ended on June 30, 2018, 2017, 2016, 2015 and 2014 of the 10 airports that represent more than 80% of the total movements of the airport system:

 

Airport  06.30.18   06.30.17   06.30.16   06.30.15   06.30.14 
Aeroparque   65,177    64,357    56,438    59,110    55,525 
Ezeiza   36,236    32,406    34,791    31,507    33,431 
San Fernando   20,541    17,956    18,779    19,860    22,120 
Córdoba   16,581    13,573    10,953    10,072    10,129 
Mendoza   9,846    9,247    8,166    7,364    8,374 
Salta   5,249    6,950    4,835    5,997    5,335 
Tucumán   4,920    3,048    3,358    3,030    2,499 
Bariloche   5,893    5,330    4,644    4,324    4,451 
C. Rivadavia   4,916    4,083    4,004    4,154    5,255 
Iguazú   4,182    4,080    3,919    3,846    4,080 
Total   173,541    161,030    149,887    149,264    151,199 
Overall Total   208,590    192,687    178,107    179,504    182,132 
Variation   8.3%   8.2%   (0.8)%   (1.44)%   (3.74)%

 

 43 

 

 

Aeropuertos Argentina 2000 S.A.

Consolidated Financial Statements

At June 30, 2018 presented in comparative format

Summary of Information required by Resolution N ° 368/01

of the National Securities Commission

 

Perspectives for 2018

 

In the six months of this fiscal year, the company's passenger traffic had a very good evolution reaching 18.4 million, of which 11.3 million were domestic passengers and 7.1 million were international passengers, with growths of 11.2% in domestic and 5% in international compared to the previous year. In total, passenger traffic grew 8.8% compared to the same period 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 semester of this year, the Company made investments for $ 2,340 million. To this amount, it must be added the payments to the trusts of specific allocation for works for $ 475 million.

 

The prospects for the evolution of domestic passenger traffic for the year 2018 are positive due to the opening of new routes and the start of operations of several low-cost companies.

 

With regard to the execution of investments in infrastructure, we refer to the expressed in note 1 of this Summary.

 

 44 

 

 

“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 June 30, 2018, the consolidated statement of comprehensive income for the six and three months periods ended June 30, 2018 and the consolidated statements of changes in shareholders' equity and of cash flows for the six-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.

 

 

 

 

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 June 30, 2017.

 

Report on the compliance with current regulations

 

In accordance with current regulations, in connection with Aeropuertos Argentina 2000 S.A., 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;

 

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 June 30, 2018, Aeropuertos Argentina 2000’s accrued debt with the Argentine Social Security System, which stems from the accounting records and liquidations of the Company, amounted to $68,674,203, which was not yet due at that date.

 

Autonomous City of Buenos Aires, August 7, 2018.

 

PRICE WATERHOUSE & CO. S.R.L.

 

by     (Partner)  
Miguel A. Urus  

 

  2

(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 June 30, 2018 presented in comparative format

 

 

 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Separate Condensed Individual Financial Statements

At June 30, 2018 presented in comparative format

 

Index

 

Separate Individual Statements of Comprehensive Income 2
Separate Individual Statements of Financial Position 3
Separate Individual Statements of Changes in Equity 4
Separate Individual Statements of Cash Flows 5
Notes to the Separate Condensed Individual Interim Financial Statements 6
Additional information required by Art. 12, chapter III, title IV of the National Securities Commission 30
Report of Independent Auditors  
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
 

Separate Condensed Individual Financial Statements

For the six month period of 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 
629,252,640 Preferred shares of AR$ 1 par value with no voting rights   629,252,640    629,252,640 
    887,769,939    887,769,939 

 

 1 

 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Separate Individual Statement of Comprehensive Income

For the six month periods ended at June 30, 2018 and 2017

 

   Three months at   Six month at 
   06.30.18  

06.30.17*

Modified

   06.30.18   06.30.17*
Modified
 
   $ 
Continuous Operations                    
Revenue (Note 3)   4,223,538,944    2,846,837,251    8,189,428,961    5,854,335,309 
CINIIF 12 - paragraph 14 Credit   1,464,452,697    928,217,391    2,340,473,743    1,425,397,647 
Cost of service (Note 10)   (2,179,048,591)   (1,591,159,223)   (4,135,166,275)   (3,123,786,750)
CINIIF 12 - paragraph 14 Debit   (1,463,307,763)   (927,393,106)   (2,337,962,656)   (1,423,865,946)
Gross Profit   2,045,635,287    1,256,502,313    4,056,773,773    2,732,080,260 
Distribution and selling expenses (Note 10)   (285,407,400)   (185,424,801)   (529,009,243)   (366,793,718)
Administrative expenses (Note 10)   (182,785,747)   (172,304,006)   (361,514,061)   (338,109,606)
Other income and expenses, net (Note 3)   103,163,446    68,885,368    196,075,670    141,432,975 
Operating profit   1,680,605,586    967,658,874    3,362,326,139    2,168,609,911 
                     
Finance Income (Note 3)   989,982,385    325,602,965    1,160,943,590    459,367,051 
Finance Costs (Note 3)   (3,636,894,220)   (572,794,904)   (4,329,001,406)   (772,937,261)
Result of investments accounted for using the equity method (Note 4)   5,918,204    2,645,131    5,339,629    4,700,756 
Loss / Income before Income Tax   (960,388,045)   723,112,066    199,607,952    1,859,740,457 
Income Tax (Note 3)   316,848,328    (205,086,807)   (20,826,226)   (498,595,457)
Loss / Income for the period for continuous operations   (643,539,717)   518,025,259    178,781,726    1,361,145,000 
Loss / Income for the period   (643,539,717)   518,025,259    178,781,726    1,361,145,000 
Other comprehensive income   -    -    -    - 
Comprehensive Loss / Income for the period   (643,539,717)   518,025,259    178,781,726    1,361,145,000 
                     
Earnings per share basic and diluted attributable to shareholders of the Company during the period (shown in $ per share ) from continuous operations   (2.5015)   1.9919    0.6672    5.2413 

 

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

 

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

 

 2 

 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Separate Individual Statements of Financial Position

At June 30, 2018 and December 31, 2017

 

   06.30.18   12.31.17 
   $ 
Assets          
Non current Assets          
Investments accounted for by the equity method (Note 4)   58,369,772    53,030,143 
Intangible Assets (Note 5)   12,658,687,909    10,624,055,713 
Other receivables (Note 3)   2,970,849,245    2,549,103,960 
Total Non- Current Assets   15,687,906,926    13,226,189,816 
           
Current Assets          
Investments (Note 3)   94,476,223    - 
Other receivables (Note 3)   694,818,823    324,030,783 
Trade receivables, net (Note 3)   1,429,712,106    1,050,433,139 
Cash and cash equivalents (Note 3)   3,049,927,950    2,280,072,038 
Total Current Assets   5,268,935,102    3,654,535,960 
Total Assets   20,956,842,028    16,880,725,776 
           
Shareholders’ Equity and Liabilities          
Equity attributable to Shareholders:          
Common shares   258,517,299    258,517,299 
Preferred shares   629,252,640    616,914,353 
Share Premium   137,280,595    137,280,595 
Legal and facultative reserve   5,404,916,672    2,732,769,964 
Retained earnings   232,835,837    2,684,484,995 
Total Sharehoders’ Equity   6,662,803,043    6,429,967,206 
Liabilities          
Non- Current Liabilities          
Accounts payable and others (Note 3)   104,190,609    119,690,026 
Borrowings (Note 6)   11,121,123,465    7,401,161,525 
Deferred income tax liabilities   138,028,534    86,087,996 
Provisions and other charges (Note 9)   54,169,013    58,196,320 
Total Non- Current Liabilities   11,417,511,621    7,665,135,867 
Current Liabilities          
Fee payable to the Argentine National Government (Note 7)   211,658,012    176,591,493 
Accounts payable and others (Note 3)   1,749,964,118    1,750,819,476 
Income tax, net of prepayments   -    204,738,892 
Borrowings (Note 6)   576,852,868    149,976,119 
Provisions and other charges (Note 9)   338,052,366    503,496,723 
Total Current Liabilities   2,876,527,364    2,785,622,703 
Total Liabilities   14,294,038,985    10,450,758,570 
Total Shareholders’ Equity and Liabilities   20,956,842,028    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 Accounting Statements audited for the year ended at December 31, 2017.

 

 3 

 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Separate Individual Statement of Changes in Equity

At June 30, 2018 and 2017

 

    Capital Stock     Capital Stock                                
    Common     Preferred     Share     Legal     Facultative     Retained        
    Shares     Shares     Premium     Reserve     Reserve     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  
IFRIC 9 Adjustment (Note 2.8)     -       -       -       -       -       54,054,111       54,054,111  
Balance at 01-01-18     258,517,299       616,914,353       137,280,595       172,667,058       2,560,102,906       2,738,539,106       6,484,021,317  
Resolutions of the Shareholders’ Meeting dated April 9, 2018 (Note 15):     -       -       -       -       -       -       -  
Capitalization of dividends of preferred shares     -       12,338,287       -       -       -       (12,338,287 )     -  
Legal reserve     -       -       -       2,419,272       -       (2,419,272 )     -  
Facultative reserve     -       -       -       -       2,669,727,436       (2,669,727,436 )     -  
Net Income for the period     -       -       -       -       -       178,781,726       178,781,726  
Balance at 06.30.18     258,517,299       629,252,640       137,280,595       175,086,330       5,229,830,342       232,835,837       6,662,803,043  
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  
Resolutions of the Shareholders’ Meeting dated April 26, 2017 (Note 15)                                                        
Capitalization of dividends of preferred shares     -       12,096,360       -       -       -       (12,096,360 )     -  
Distribution of dividends of common shares     -       -       -       -       -       (1,180,000,000 )     (1,180,000,000 )
Legal reserve     -       -       -       63,338,434       -       (63,338,434 )     -  
Facultative reserve     -       -       -       -       753,656,787       (753,656,787 )     -  
Net Income for the period     -       -       -       -       -       1,361,145,000       1,361,145,000  
Balance at 06.30.17     258,517,299       616,914,353       137,280,595       172,667,058       2,560,102,906       1,361,145,000       5,106,627,211  

 

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

 

 4 

 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Separate Individual Statements of Cash Flows

At June 30, 2018 and 2017

 

      06.30.18   06.30.17 
   Notes  $ 
Cash Flows from operating activities             
Net Income for the period      178,781,726    1,361,145,000 
Adjustments for:             
Amortization of intangible assets  5   305,841,547    253,763,568 
Impairment of intangible assets  5   -    484,426 
Specific allocation of accrued and unpaid income  7   211,658,012    139,927,654 
Income Tax  3   20,826,226    498,595,457 
Income of investments accounted for by the equity method  4   (5,339,629)   (4,700,756)
Bad debts provision  8   11,813,038    11,503,691 
Unpaid borrowing interests costs      161,960,513    78,980,472 
Accrued deferred revenues and additional considerations  9   (72,725,043)   (98,479,916)
Accrued exchange differences      3,496,287,222    278,365,686 
Provision for litigation  9   2,881,561    1,444,245 
              
Changes in operating assets and liabilities:             
Changes in trade receivables      (319,019,857)   61,695,527 
Changes in other receivables      (792,533,325)   (785,140,829)
Changes in accounts payable and others      (16,354,775)   (128,748,504)
Changes in liabilities for current income tax      170,125,233    (124,610,190)
Changes in provisions and other charges      46,871,818    42,847,794 
Changes in fee payable to the Argentine National Government      (176,591,493)   (147,629,066)
Changes in borrowings      724,136    312,873,134 
Changes in intangible assets      (2,168,183,233)   (1,375,649,657)
Income tax paid      (361,767,850)   (820,641,104)
Net Cash provided by / (used in) operating activities      695,255,827    (443,973,368)
              
Cash flow for investing activities             
Acquisition of other current investments  3   (94,476,223)   - 
Net cash flow used in investing activities      (94,476,223)   - 
              
Cash Flow from financing activities             
New Borrowings  6   -    6,312,000,000 
Borrowings paid- principal  6   (32,464,896)   (3,084,349,784)
Borrowings paid- interests  6   (281,577,182)   (408,563,329)
Cash flow release      -    490,566,044 
Dividends paid  9   (146,500,000)   (340,000,000)
Net Cash Flow (used in) / provided by financing activities      (460,542,078)   2,969,652,931 
              
Net Increase in cash and cash equivalents      140,237,526    2,525,679,563 
              
Changes in cash and cash equivalents             
Cash and cash equivalents at the beginning of the  (*)      2,280,072,038    766,131,458 
Net Increase in cash and cash equivalents      140,237,526    2,525,679,563 
Foreign Exchange differences      629,618,386    63,557,408 
Cash and cash equivalents at the end of the period (*)      3,049,927,950    3,355,368,429 
Transactions that do not represent changes in cash and cash equivalents:             
Acquisition of intangible assets through liabilities for finance leases      14,249,231    3,531,919 
Dividends on preferred shares      6,292,526    6,169,144 

 

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

 

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

 

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

 

 5 

 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Separate Condensed Individual Interim Financial Statements

At June 30, 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 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 the Company entered into with the Argentine National Government on April 3, 2007 (the “Memorandum of Agreement”). We 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 the 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 “A” Group at June 30, 2018 is still pending.

 

 6 

 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Separate Condensed Individual Interim Financial Statements

At June 30, 2018 presented in comparative format

 

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. 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 accounting statements audited for the year ended at 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 August 7, 2018.

 

The National Security 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 Separate Condensed Individual Interim Financial Statements

At June 30, 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 Statements of the Company at December 31, 2017. The results of the six month periods ended at June 30, 2018 and 2017 do not necessarily reflect the proportion of the results of the Company for the full year.

 

1) Comparative Information

 

The information at June 30, 2017 and December 31, 2017 included in these special purpose 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 for the period ended June 30, 2017 have been reclassified for the purpose of comparative presentation, in relation to the revenues from the Strengthening Trust ($ 145,603,074), included in the income item they have been reclassified to the item Other Net Income and Expenses in the Separate Condensed Individual Statement of Comprehensive Income. Said reclassification does not affect the exposed equity balances.

 

In turn, certain transactions have been reclassified in the Cash Flow Statement that were exposed 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 Separate Condensed Individual Interim Financial Statements

At June 30, 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 at December 31, 2017.

 

3) Subsidiaries

 

Controlled Companies 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 controlled companies are consolidated as from the date the control is transferred and excluded from the date such control ceases.

 

The accounting policies of controlled companies have been modified, where necessary, to ensure the uniformity with the Company policies.

 

At June 30, 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 06.30..18

  

Net Shareholders

‘equity at closing

  

Income for the

period

 
Servicios y Tecnología Aeroportuarios S.A. (2)   14,398,848    99.30%   20,055,610    20,196,399    682,063 
Cargo & Logistics S.A.   5,566,259    98.63%   3,060,539    3,102,955    (929,254)
Paoletti America S.A.   6,000    50.00%   15,526    31,051    - 
Texelrío S.A. (3)   84,000    70.00%   35,159,751    48,513,650    7,989,167 
Villalonga Furlong S.A. (4)   123,700    1.46%   78,347    5,383,363    (944,169)

 

(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 Separate Condensed Individual Interim Financial Statements

At June 30, 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 the Company the concession of the “A” Group airports 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 comprise 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.

 

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 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.

 

 10 

 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Separate Condensed Individual Interim Financial Statements

At June 30, 2018 presented in comparative format (Contd.)

 

NOTE 2 – 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 financial statements.

 

IAS 29 "Financial information in hyperinflationary economies" requires that the financial statements of an entity whose functional currency is that of a hyperinflationary economy be expressed in terms of the current unit of measurement at the closing date of the reporting period, regardless of whether they are based on the historical cost method or the current cost method. To this end, in general terms, the inflation produced from the date of acquisition or from the revaluation date, as applicable, must be computed in the non-monetary items.

 

In order to conclude on whether an economy is categorized as hyperinflationary in the terms of IAS 29, the standard details a series of factors to be considered, including the existence of a cumulative inflation rate in three years that approximates or exceed 100%. Bearing in mind that the downward trend in inflation observed in the previous year has reversed, noting a significant increase in inflation during 2018, which also expects the cumulative inflation rate of the last three years to exceed 100% and that the rest of the indicators do not contradict the conclusion that Argentina should be considered a hyperinflationary economy for accounting purposes, the Management understands that there is sufficient evidence to conclude that Argentina is a hyperinflationary economy in the terms of IAS 29, from 1 July, 2018

 

As of June 30, 2018, the restatement criteria of the financial information established in IAS 29 have not been applied. However, in recent years certain macroeconomic variables that affect the Company's businesses, such as the cost of salaries and the prices of inputs, have undergone significant annual variations. This circumstance must be considered in the evaluation and interpretation of the financial situation and the results presented by the Company in these financial statements.

 

 11 

 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Separate Condensed Individual Interim Financial Statements

At June 30, 2018 presented in comparative format (Contd.)

 

NOTE 2 – ACCOUNTING POLICIES (Contd.)

 

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 Expense” 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.

 

8) Changes in accounting policies

 

a)New rules and modifications adopted by the Company

 

The following standards and modifications have been adopted by the Company for the six-month period ended June 30, 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 Separate 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.

 

 12 

 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Separate Condensed Individual Interim Financial Statements

At June 30, 2018 presented in comparative format (Contd.)

 

NOTE 2 – ACCOUNTING POLICIES (Contd.)

 

8) Changes in accounting policies (Contd.)

 

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; decreases 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 accumulated results of the Company due to the classification and measurement of financial instruments as of January 1, 2018 is as follows:

 

Accumulated results as of December 31, 2017 - IAS 39   2,684,484,995 
Decrease in the allowance for bad debts, net   54,054,111 
Accumulated results as of January 1, 2018 - IFRS 9   2,738,539,106 

 

-IFRS 15 "Revenue from ordinary activities from contracts with customers"

 

Management evaluated the effects of the application of the new standard and has not identified that the application of IFRS 15 may affect the timing of recognition of future income of the Company.

 

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.

 

 13 

 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Separate Condensed Individual Interim Financial Statements

At June 30, 2018 presented in comparative format (Contd.)

 

NOTE 2 – ACCOUNTING POLICIES (Contd.)

 

8) Changes in accounting policies (Contd.)

 

b)New standards and amendments issued, but which do not result in effective application as of June 30, 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 of adopting this standard in advance.

 

 14 

 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Separate Condensed Individual Interim Financial Statements

At June 30, 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  06.30.18   12.31.17 
   $ 
Cash and cash equivalents          
Cash and funds in custody   6,141,799    7,262,801 
Banks   2,298,156,638    2,009,895,109 
Checks not yet deposited   23,110,724    7,835,475 
Time deposits   722,518,789    255,078,653 
    3,049,927,950    2,280,072,038 
           
Investments          
Time deposits   94,476,223    - 
    94,476,223    - 
Trade receivables, net          
Trade receivables   1,479,296,548    1,164,337,126 
Related parties (Note 7)   2,909,445    4,669,128 
Checks - postdated checks   38,458,552    32,638,434 
Provision for bad debts (Note 8)   (90,952,439)   (151,211,549)
    1,429,712,106    1,050,433,139 
           
Other current receivables          
Expenses to be recovered   17,760,864    1,501,396 
Guarantees granted   5,472,910    5,457,870 
Related parties (Note 7)   795,282    795,282 
Tax credits   663,230,480    298,431,065 
Prepaid Insurance   5,893,583    17,193,815 
Other   1,665,704    651,355 
    694,818,823    324,030,783 
           
Other non-current receivables          
Trust for Strengthening (Note 7)   2,970,849,245    2,549,103,960 
    2,970,849,245    2,549,103,960 

 

 15 

 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Separate Condensed Individual Interim Financial Statements

At June 30, 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 (Contd.)

 

   06.30.18   12.31.17 
   $ 
Accounts payable and other-current          
Obligations payable   246,308,118    419,020,984 
Suppliers   873,557,546    665,826,580 
Foreign suppliers   44,587,421    44,080,464 
Related parties (Note 7)   112,441,132    119,323,068 
Salaries and social security liabilities   375,799,166    412,182,852 
Other fiscal liabilities   97,270,735    90,385,528 
    1,749,964,118    1,750,819,476 
Accounts payable and other- non current          
Tax liabilities   104,190,609    119,690,026 
    104,190,609    119,690,026 

 

INDIVIDUAL STATEMENTS OF COMPREHENSIVE INCOME

 

   Three months at   Six months at 
   06.30.18   06.30.17   06.30.18   06.30.17 
   $ 
Revenue                    
Aeronautical revenues   2,372,106,588    1,553,688,983    4,744,286,860    3,293,736,070 
Non-aeronautical revenues   1,851,432,356    1,293,148,268    3,445,142,101    2,560,599,239 
    4,223,538,944    2,846,837,251    8,189,428,961    5,854,335,309 
                     
Other income and expenses net                    
Trust for Strengthening   104,929,941    70,794,606    203,742,498    145,603,074 
Others   (1,766,495)   (1,909,238)   (7,666,828)   (4,170,099)
    103,163,446    68,885,368    196,075,670    141,432,975 

 

 16 

 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Separate Condensed Individual Interim Financial Statements

At June 30, 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.)

 

   Three months at   Six months at 
   06.30.18   06.30.17   06.30.18   06.30.17 
   $ 
Finance Income                    
Interest   204,382,590    121,236,834    220,453,676    403,213,090 
Foreign Exchange differences   785,599,795    204,366,131    940,489,914    56,153,961 
    989,982,385    325,602,965    1,160,943,590    459,367,051 
                     
Finance Expenses                    
Interest   (118,057,958)   (81,769,216)   (196,976,385)   (425,227,019)
Foreign Exchange differences   (3,518,836,262)   (491,025,688)   (4,132,025,021)   (347,710,242)
    (3,636,894,220)   (572,794,904)   (4,329,001,406)   (772,937,261)
    (2,646,911,835)   (247,191,939)   (3,168,057,816)   (313,570,210)
                     
Income Tax                    
Current   342,310,866    (201,810,738)   13,096,275    (467,804,822)
Deferred   (25,462,538)   (3,276,069)   (33,922,501)   (30,790,635)
    316,848,328    (205,086,807)   (20,826,226)   (498,595,457)

 

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   5,339,629    4,700,756 
Balance at June 30   58,369,772    47,949,630 

 

 17 

 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Separate Condensed Individual Interim Financial Statements

At June 30, 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   2,340,473,743    1,425,397,647 
Impairment (1)   -    (484,426)
Balance at June 30   14,991,106,766    10,231,297,543 
           
Accumulated Amortization:          
Balance at January 1   (2,026,577,310)   (1,500,497,074)
From the period (Note 10)   (305,841,547)   (253,763,568)
Balance at June 30   (2,332,418,857)   (1,754,260,642)
Total Net Balance   12,658,687,909    8,477,036,901 

 

(1)Corresponds to the impairment of goodwill for the purchase of Texelrío S.A.

 

During the six month periods ended at June 30, 2018 and 2017, the Company has capitalized expenses for finance interest for the amount of $158,041,279 and $46,216,071 respectively.

 

NOTE 6 – BORROWINGS

 

Breakdown of borrowings:

 

   06.30.18   12.31.17 
   $ 
Non-current          
Negotiable Obligations   11,179,375,000    7,459,600,000 
Finance lease liabilities   34,297,403    39,501,664 
Cost of issuance of Negotiable Obligations   (92,548,938)   (97,940,139)
Total Non- Current   11,121,123,465    7,401,161,525 
Current          
Bank borrowings   7,122,703    17,865,756 
Negotiable Obligations   521,379,190    96,126,536 
Finance lease liabilities   48,350,975    35,983,827 
Total Current   576,852,868    149,976,119 
Total   11,697,976,333    7,551,137,644 

 

 18 

 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Separate Condensed Individual Interim Financial Statements

At June 30, 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   14,249,231    6,315,531,919 
Payments   (314,042,078)   (3,492,913,113)
Accrued interest   336,251,861    456,689,418 
Foreign Exchange differences   4,110,379,675    323,303,353 
Net Balance at June 30   11,697,976,333    6,717,866,048 

 

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 (…)”.

 

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.

 

 19 

 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Separate Condensed Individual Interim Financial Statements

At June 30, 2018 presented in comparative format (Contd.)

 

NOTE 6 – BORROWINGS (Contd.)

 

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 June 30, 2017

 

At June 30, 2018 the reasonable value of negotiable obligations issued in February 2017 is of $11,394,286,885. 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 Separate Condensed Individual Interim Financial Statements

At June 30, 2018 presented in comparative format (Contd.)

 

NOTE 7 – BALANCES AND TRANSACTIONS WITH RELATED PARTIES

 

Balances with other related companies at June 30, 2018 and December 31, 2017 are as follows:

 

   06.30.18   12.31.17 
   $ 
Trade receivables net- Current          
Servicios y Tecnología Aeroportuarios S.A.   1,500,657    104,128 
Other related companies   1,408,788    4,565,000 
    2,909,445    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.   906,692    8,199,741 
Texelrío S.A.   22,021,333    24,355,667 
Other related companies   89,513,107    86,767,660 
    112,441,132    119,323,068 
Provisions and other charges          
Villalonga Furlong S.A.   2,105,856    3,759,171 
Other related companies   426,249    426,249 
Stakeholders   98,500,000    245,000,000 
    101,032,105    249,185,420 

 

During the six month periods ended at June 30, 2018 and 2017, the Company has charged the cost $115,716,127 and $ 120,512,052 respectively for maintenance done with Texelrio S.A.

 

During the six-month periods ended June 30, 2018 and 2017 the Company has charged to the cost $32,941,393 and $38,706,170 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 six months ended June 30, 2018 $12,235,965 with Servicios Integrales América S.A. for out sourcing of systems and technology. During the six-month periods ended June 30, 2018 and 2017, the Company has accrued with Helport S.A. to intangible assets $252,227,524 (including the Ezeiza runway refurbishment works, Tucumán runway extension, Palomar terminal remodeling, among others) and $238,785,451 respectively, at cost $52,745,834 and $28,703,284 respectively. Likewise, AA2000 has accrued at June 30, 2018 and 2017 intangible assets for $5,169,092 and $15,771,576 respectively corresponding to the work of Mendoza carried out by Jose Cartellone –Helport-UTE.

 

During the period ended at June 30, 2018, $146,500,000 of dividends have been paid to the shareholders according to their shareholding

 

 21 

 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Separate Condensed Individual Interim Financial Statements

At June 30, 2018 presented in comparative format (Contd.)

 

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

 

At June 30, 2018 and December 31, 2017 the Company owed the Argentine National Government $211,658,012 and $176,591,493 respectively, corresponding to the specific allocation of revenues of each period (see Note 10) and has recorded a receivable for $2,970,849,245 and $2,549,103,960 respectively corresponding to the Trust for Strengthening to fund the infrastructure works of AA2000.

 

Furthermore, short-term compensation to key management was $22,600,154 and $25,333,220 for the six month periods ended at June 30, 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 Argentine Republic 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) 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.

 

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.

 

 22 

 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Separate Condensed Individual Interim Financial Statements

At June 30, 2018 presented in comparative format (Contd.)

 

NOTE 8 – BAD DEBT PROVISIONS

 

   2018   2017 
  

Bad Debt Provision

$

 
Initial balance at January 1    151,211,549    68,874,745 
IFRIC 9 adjustments at the beginning   (72,072,148)   - 
Balance at January 1, 2018   79,139,401    68,874,745 
Increases (Note 10)   11,813,038    11,503,691 
Final Balance at June 30   90,952,439    80,378,436 

 

NOTE 9 – PROVISIONS AND OTHER CHARGES

 

   Litigation   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    90,894    36,365,716    14,327,480    6,498,956    486,624,977    -    -    546,789,584 
Decreases   (12,111,450)   (1,744,209)   -    (7,688,625)   -    (475,491,921)   -    (146,500,000)   (643,536,205)
Accruals   -    -    (62,038,698)   -    (10,686,345)   -    -    -    (72,725,043)
At June 30, 2018   44,583,453    2,532,105    66,445,014    37,555,145    56,145,084    86,460,578    -    98,500,000    392,221,379 
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   1,444,245    217,223    64,517,082    8,647,024    42,400,775    356,920,938    -    1,180,000,000    1,654,147,287 
Decreases   -    (1,125,250)   -    (8,589,207)   -    (361,502,014)   (58,638,777)   (340,000,000)   (769,855,248)
Accrual   -    -    (75,363,216)   -    (23,116,700)   -    -    -    (98,479,916)
At June 30, 2017   30,129,479    5,436,755    58,445,709    24,747,974    70,837,767    52,568,418    27,439,500    840,000,000    1,109,605,602 

 

 23 

 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Separate Condensed Individual Interim Financial Statements

At June 30, 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 
   $ 
Six month period ended at 06.30.18                    
Specific allocation of revenues   1,222,454,988    -    -    1,222,454,988 
Airport services and maintenance   1,214,057,952    10,314,892    6,716,191    1,231,089,035 
Amortization of intangible assets   302,417,201    2,914,705    509,641    305,841,547 
Salaries and social security contributions   1,041,635,638    144,464,753    30,480,918    1,216,581,309 
Fees for services   12,288,311    28,848,595    3,431,856    44,568,762 
Public utilities and contributions   182,093,601    1,340,226    299,692    183,733,519 
Taxes   30,176,700    67,541,467    437,657,428    535,375,595 
Office expenses   110,572,138    96,278,909    4,580,444    211,431,491 
Insurance   19,469,746    1,379,014    -    20,848,760 
Advertising expenses   -    -    33,520,035    33,520,035 
Bad debt charges   -    -    11,813,038    11,813,038 
Board of Directors and Supervisory Committee fees   -    8,431,500    -    8,431,500 
Total at 06.30.18   4,135,166,275    361,514,061    529,009,243    5,025,689,579 
                     
Six month period ended at 06.30.17                    
Specific allocation of revenues   873,618,442    -    -    873,618,442 
Airport Services and maintenance   921,936,311    12,747,538    5,346,817    940,030,666 
Amortization of intangible assets   250,472,064    2,786,515    504,989    253,763,568 
Salaries and social security contributions   830,530,652    106,237,417    18,188,045    954,956,114 
Fees for services   10,863,326    40,126,215    4,276,557    55,266,098 
Public utilities and contributions   133,097,166    807,024    508,461    134,412,651 
Taxes   28,458,939    81,971,192    305,218,053    415,648,184 
Office expenses   59,515,881    84,619,703    2,579,662    146,715,246 
Insurance   15,293,969    1,932,002    -    17,225,971 
Advertising expenses   -    -    18,667,443    18,667,443 
Bad debt charges   -    -    11,503,691    11,503,691 
Board of Directors and Supervisory Committee fees   -    6,882,000    -    6,882,000 
Total at 06.30.17   3,123,786,750    338,109,606    366,793,718    3,828,690,074 

 

 24 

 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Separate Condensed Individual Interim Financial Statements

At June 30, 2018 presented in comparative format (Contd.)

 

NOTE 11 – FOREIGN CURRENCY ASSETS AND LIABILITIES

 

Item  Foreign currency type
and amount at
06.30.18
  Foreign
exchange
rates
   Amount in
local currency
at 06.30.18
   Amount in local
currency at
12.31.17
 
              $ 
ASSSETS               
CURRENT ASSETS                       
Cash and cash equivalents  US$   64,280,597    28.7500    1,848,067,152    1,598,099,496 
Trade receivables  US$   37,157,277    28.7500    1,068,271,726    758,954,661 
Investments  US$   3,286,129    28.7500    94,476,223    - 
Total current assets                3,010,815,101    2,357,054,157 
Total assets                3,010,815,101    2,357,054,157 
                        
LIABILITIES