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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 November, 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) in accordance with the accounting framework established by the Comision Nacional de Valores (“CNV”) and other periodic reports and notices in Spanish with the 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 accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (“IASB”) 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 nine months ended September 30, 2018 of AA2000 (the “AA2000 Consolidated Financial Statements”) as well as the stand-alone condensed individual interim financial statements for the nine months ended September 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 the accounting framework established by the CNV, which is based on the application of the International Financial Reporting Standards (“IFRS”) and, in particular, of the International Accounting Standard 34 "Interim Financial Information" (“IAS 34”), with the only exception of application of the International Accounting Standard 29 "Financial Reporting in Hyperinflationary Economies" (“IAS 29”), which was excluded by the CNV from its accounting framework, are presented in Argentine pesos and were reviewed 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, its reporting currency and the application of IAS 29, 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 nine months ended September 30, 2018.
99.2   Free translation into English of AA2000 Condensed Individual Interim Financial Statements for the nine months ended September 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: November 7, 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 September 30, 2018 presented in comparative format 

 

   

 

 

Aeropuertos Argentina 2000 S.A.

 

Condensed Consolidated Interim Financial Statements

At September 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 7
Summary of Information requested by Resolution N° 368/01 Of the National Securities Commission 34
Report of Independent Auditors 46
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 nine-month 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 nine month periods ended at June 30, 2018 and 2017

 

   Three months at   Nine months at 
   09.30.18  

09.30.17*

Modified

   09.30.18  

09.30.17*

Modified

 
   $ 
Continuous Operations                    
Revenue (Note 4)   5,606,185,227    3,306,828,905    13,814,908,920    9,171,482,126 
CINIIF 12 - paragraph 14 Credit (Note 5)   1,485,308,287    1,201,103,950    3,825,782,030    2,626,501,597 
Cost of sales (Note 10)   (2,832,598,945)   (1,778,607,816)   (6,977,526,724)   (4,889,207,306)
CINIIF 12 - paragraph 14 Debit   (1,484,109,864)   (1,200,365,161)   (3,822,072,520)   (2,624,231,107)
Gross Profit   2,774,784,705    1,528,959,878    6,841,091,706    4,284,545,310 
Distribution and selling expenses (Note 10)   (385,075,868)   (219,231,796)   (923,932,898)   (593,910,872)
Administrative expenses (Note 10)   (259,423,163)   (179,995,537)   (626,129,533)   (523,658,771)
Other income and expenses, net (Note 4)   117,303,906    83,358,836    311,550,518    224,867,860 
Operating profit   2,247,589,580    1,213,091,381    5,602,579,793    3,391,843,527 
Finance Income (Note 4)   1,315,215,043    106,193,351    2,498,895,909    566,320,424 
Finance Expenses  (Note 4)   (5,279,839,079)   (369,692,129)   (9,611,029,295)   (1,144,531,207)
Income before income tax   (1,717,034,456)   949,592,603    (1,509,553,593)   2,813,632,744 
Income tax (Note 4)   488,436,764    (352,058,454)   462,125,061    (853,842,572)
Income for the period for continuous operations   (1,228,597,692)   597,534,149    (1,047,428,532)   1,959,790,172 
Net Income for the period   (1,228,597,692)   597,534,149    (1,047,428,532)   1,959,790,172 
Other comprehensive income   -    -    -    - 
Comprehensive Income for the period   (1,228,597,692)   597,534,149    (1,047,428,532)   1,959,790,172 
Income attributable to:                    
Shareholders   (1,237,040,055)   598,536,773    (1,058,258,329)   1,959,681,773 
Non –Controlling Interest   8,442,363    (1,002,624)   10,829,797    108,399 
                     
Earnings per share basic and diluted attributable to shareholders of the Company during the period (shown in $ per share ) from continuous operations   (4.7646)   2.2995    (4.0882)   7.5451 

 

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 September 30, 2018 and December 31, 2017

 

   09.30.18   12.31.17 
   $ 
Assets          
Non- Current Assets          
Property, plant and equipment   22,921,361    25,853,595 
Intangible Assets (Note 5)   13,881,370,241    10,624,055,713 
Deferred Income tax assets   368,070,554    2,822,421 
Other receivables (Note 4)   3,523,671,499    2,549,858,177 
Total Non-Current Assets   17,796,033,655    13,202,589,906 
Current Assets          
Other receivables (Note 4)   1,116,371,101    337,310,968 
Trade receivables, net (Note 4)   1,931,293,629    1,056,245,965 
Other Assets   8,180,250    1,985,631 
Investments (Note 4)   337,823,443    - 
Cash and cash equivalents (Note 4)   3,920,356,498    2,319,754,598 
Total Current Assets   7,314,024,921    3,715,297,162 
Total Assets   25,110,058,576    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   (1,004,204,218)   2,684,484,995 
Subtotal   5,425,762,988    6,429,967,206 
Non-Controlling Interest   22,001,685    11,171,888 
Total Shareholders’ Equity   5,447,764,673    6,441,139,094 
           
Liabilities          
Non-Current Liabilities          
Accounts payable and others (Note 4)   96,152,882    128,108,326 
Borrowings (Note 6)   15,403,347,841    7,401,161,525 
Deferred income tax liability   -    86,307,610 
Provisions and other charges (Note 9)   54,372,560    59,625,687 
Total Non-Current liabilities   15,553,873,283    7,675,203,148 
Current Liabilities          
Fee payable to the Argentine National Government (Note 7)   308,142,567    176,591,493 
Accounts payable and others (Note 4)   2,092,118,300    1,758,559,433 
Income tax, net of prepayments   16,875,183    213,427,506 
Borrowings (Note 6)   1,333,631,220    149,976,119 
Provisions and other charges (Note 9)   357,653,350    502,990,275 
Total Current Liabilities   4,108,420,620    2,801,544,826 
Total Liabilities   19,662,293,903    10,476,747,974 
Total Shareholders’ Equity and Liabilities   25,110,058,576    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 September 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   -    -    -    -    -    (1,058,258,329)   (1,058,258,329)   10,829,797    (1,047,428,532)
Balance at 09.30.18   258,517,299    629,252,640    137,280,595    175,086,330    5,229,830,342    (1,004,204,218)   5,425,762,988    22,001,685    5,447,764,673 
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   -    -    -    -    -    1,959,681,773    1,959,681,773    108,399    1,959,790,172 
Balance at 09.30.17   258,517,299    616,914,353    137,280,595    172,667,058    2,560,102,906    1,959,681,773    5,705,163,984    8,439,932    5,713,603,916 

 

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 nine month periods ended at September 30, 2018 and 2017

 

      09.30.18  

09.30.17*

Modified

 
   Notes  $ 
Cash Flow from operating activities             
(Loss) Net income for the period      (1,047,428,532)   1,959,790,172 
Adjustment for:             
Amortization of intangible assets  5   568,467,502    391,327,441 
Specific allocation of accrued and unpaid income  7   308,142,567    159,916,422 
Impairment of intangible assets  5   -    726,639 
Depreciation of property, plant and equipment  10   2,986,232    2,851,326 
Bad debts provision  8   58,185,235    29,756,464 
Income Tax  4   (462,125,061)   853,842,572 
Accrued and unpaid borrowing interest costs      241,914,962    86,967,700 
Accrued deferred revenues and additional consideration  9   (100,546,580)   (144,995,571)
Accrued and unpaid Exchange differences      7,606,487,331    480,365,568 
Contingencies provision  9   17,594,822    1,468,772 
              
Changes in operating assets and liabilities:             
Changes in trade receivables      (861,160,751)   21,290,082 
Changes in other receivables      (1,752,873,455)   (1,074,320,956)
Changes in other assets      (6,194,619)   1,768,263 
Changes in accounts payable and others      301,603,423    144,743,260 
Changes in liabilities for current income tax      336,144,221    (190,439,578)
Changes in provisions and other charges      177,361,706    57,509,761 
Changes in fee payable to the Argentine National Government      (176,591,493)   (147,629,066)
Changes in borrowings      104,948,722    361,426,600 
Changes in current investments      (115,998,080)   - 
Increase of intangible assets      (3,573,607,534)   (2,515,382,382)
Income tax paid      (540,145,263)   (1,331,783,537)
Net cash generated/ (used in) operating activities      1,087,165,355    (850,800,048)
              
Cash flow for investing activities             
Acquisition of other current investments      (221,825,363)   - 
Acquisition of property, plant and equipment      (53,998)   (3,007,701)
Net Cash Flow used in investing activities      (221,879,361)   (3,007,701)
              
Cash Flow from financing activities             
Borrowings  6   -    6,312,000,000 
Borrowings paid- principal  6   (51,172,415)   (3,093,770,894)
Borrowings paid- interests  6   (473,039,938)   (532,913,618)
Restricted cash flow release      -    490,566,044 
Dividends paid  9   (245,000,000)   (775,000,000)
Net Cash Flow (used in) / generated financing activities      (769,212,353)   2,400,881,532 
              
Net Increase in cash and cash equivalents      96,073,641    1,547,073,783 
              
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      96,073,641    1,547,073,783 
Foreign Exchange differences      1,504,528,259    159,846,610 
Cash and cash equivalents at the end of the period      3,920,356,498    2,486,663,260 
Acquisition of intangible assets through liabilities for finance leases      15,081,969    12,593,741 
Dividends on preferred shares      9,438,789    9,253,715 

 

(*) Does not include restricted cash at January 1, 2018 for $ 490,566,044.

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

 

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.

 

 5 

 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Condensed Consolidated Interim Financial Statements

At September 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 September 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 Condensed Consolidated Interim Financial Statements

At September 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):

 

Controlled (1)  Number of
common shares
   Participation in
capital and
possible votes
   Book entry
value at
09.30.18
   Net
Shareholders
‘equity at
closing
   Income for the
period
 
           $ 
Servicios y Tecnología Aeroportuarios S.A. (2)   14,398,848    99.30%   21,119,638    21,267,897    1,753,561 
Cargo & Logistics SA.   5,566,259    98.63%   2,717,826    2,755,492    (1,276,716)
Paoletti América S.A.   6,000    50.00%   15,526    31,051    0 
Texelrío S.A. (3)   84,000    70.00%   54,852,625    76,646,607    36,122,125 
Villalonga Furlong S.A (4)   123,700    1.46%   73,209    5,030,323    (1,297,208)

 

(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 Condensed Consolidated Interim Financial Statements

At September 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 Condensed Consolidated Interim Financial Statements

At September 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 November 5, 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.

 

In turn, in Art.3 of the aforementioned CNV regulations, it is established that "The entities subject to the control of the Commission may not apply the method of restating financial statements in homogeneous currency".

 

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.

 

These Condensed Consolidated Interim Financial Statements of the Company have been prepared in accordance with the accounting framework established by the CNV. This accounting framework is based on the application of the IFRS and Interpretations of the IFRIC (IFRIC for its acronym in English), and in particular of the International Accounting Standard 34 "Intermediate Financial Information" (IAS 34), with the only exception of application of the International Accounting Standard 29 (IAS 29), which was excluded by the CNV from its accounting framework.

 

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 nine-month periods ended at September 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 Condensed Consolidated Interim Financial Statements

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

 

NOTE 3 – ACCOUNTING POLICIES (Contd.)

 

1) Comparative Information

 

The information at September 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 September 30, 2017 have been reclassified for the purpose of comparative presentation, in relation to the revenues from the Strengthening Trust ($227,697,171), included in the revenue item which have been reclassified to the item Other Net Income and Expenses in the Statement of Consolidated 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) Controlled

 

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 Condensed Consolidated Interim Financial Statements

At September 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 Condensed Consolidated Interim Financial Statements

At September 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 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 the Company 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. These requirements also include the comparative information of the financial statements.

 

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 exceeds 100%. Considering a significant increase in inflation during 2018, that also the accumulated inflation rate of the last three years exceeds 100% and that the rest of the indicators do not contradict the conclusion that Argentina should be considered as a hyperinflationary economy for accounting purposes, the Management understands that there is sufficient evidence to conclude that Argentina is a hyperinflationary economy under the terms of IAS 29, as of July 1, 2018. Due to this, in accordance with IAS 29, after that date, the financial statements should be restated.

 

 12 

 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Condensed Consolidated Interim Financial Statements

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

 

NOTE 3 – ACCOUNTING POLICIES (Contd.)

 

6) Foreign currency translation (Contd.)

 

In turn, on September 29, 2018, the FACPCE issued resolution 539/18, which stipulates that it will be appropriate to apply the adjustment for inflation in the financial statements whose closures occur as of July 1, 2018. However, and considering that the application of the integral adjustment for inflation requires efforts from different actors (training, modification of computer systems, search for information, definition of certain conceptual aspects by the profession, and others), provided that the entity may opt, for only once, for not adjusting for inflation the financial statements corresponding to the annual periods closed between July 1, 2018 and December 30, 2018 or the financial statements corresponding to interim periods closed in the same period ( as is the case of the present financial statements). Also, among other provisions, resolution 539/18 also establishes the replacement of the adjustment index for the determination of the restatement coefficient, substituting the IPIM for a coupling between the IPIM and the National Consumer Price Index (CPI).

 

However, it must be taken into account that at the time of issuance of these financial statements, Decree PEN 664/03 is in force, which does not allow the presentation of restated financial statements before the CNV. Therefore, the Company has applied for the preparation of such financial statements, the accounting presentation bases described in the first point of this Note.

 

In an inflationary period, any entity that maintains an excess of monetary assets over monetary liabilities will lose purchasing power, and any entity that maintains an excess of monetary liabilities over monetary assets will gain purchasing power, provided that such items are not subject to a mechanism of adjustment.

 

Briefly, the restatement mechanism of IAS 29 establishes that monetary assets and liabilities will not be restated since they are already expressed in the current unit of measurement at the end of the reporting period. Assets and liabilities subject to adjustments based on specific agreements will be adjusted in accordance with such agreements.

 

The non-monetary items measured at their current values at the end of the reporting period, such as the net realization value or others, do not need to be restated. The remaining non-monetary assets and liabilities will be restated by a general price index. The loss or gain from the net monetary position will be included in the net integral result of the reporting period, revealing this information in a separate line item.

 

 13 

 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Condensed Consolidated Interim Financial Statements

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

 

NOTE 3 – ACCOUNTING POLICIES (Contd.)

 

6) Foreign currency translation (Contd.)

 

The Company is carrying out the necessary actions to implement the application of the adjustment for integral inflation which requires efforts on various issues, such as training, certain modifications to the systems, search for historical information, among other relevant issues. Management understands that these actions will be concluded with the issuance of the next financial statements.

 

As of September 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 salary costs and prices of inputs, have undergone annual variations of some importance. 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.

 

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.

 

 14 

 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Condensed Consolidated Interim Financial Statements

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

 

NOTE 3 – ACCOUNTING POLICIES (Contd.)

 

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 nine-month period ended September 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.

 

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 

 

 15 

 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Condensed Consolidated Interim Financial Statements

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

 

NOTE 3 – ACCOUNTING POLICIES (Contd.)

 

8) Changes in accounting policies (Contd.)

 

-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.

 

b)New standards and amendments issued, but which do not result in effective application as of September 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.

 

 16 

 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Condensed Consolidated Interim Financial Statements

At September 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 COMPREHENSIVE INCOME

 

   09.30.18   12.31.17 
   $ 
Cash and cash equivalents          
Cash and funds in custody   74,246,369    23,409,956 
Banks   3,271,695,508    2,018,403,943 
Checks not yet deposited   38,547,606    22,862,046 
Time deposits   535,867,015    255,078,653 
    3,920,356,498    2,319,754,598 
Investments          
Time deposits   337,823,443    - 
    337,823,443    - 
Trade receivables, net          
Trade receivables   2,172,211,541    1,173,820,499 
Related parties (Note 7)   10,176,193    4,565,000 
Checks-postdated checks   36,713,962    32,638,434 
Provision for bad debts (Note 8)   (287,808,067)   (154,777,968)
    1,931,293,629    1,056,245,965 
Other current receivables          
Expenses to be recovered   17,955,421    1,570,056 
Guarantees granted   5,520,910    5,637,870 
Tax credits   1,075,297,568    308,972,682 
Prepaid Insurance   13,102,549    17,340,779 
Other   4,494,653    3,789,581 
    1,116,371,101    337,310,968 

 

 17 

 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Condensed Consolidated Interim Financial Statements

At September 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.)

 

   09.30.18   12.31.17 
   $ 
Other non-current receivables          
Tax credits   754,217    754,217 
Trust for Strengthening (Note 7)   3,522,917,282    2,549,103,960 
    3,523,671,499    2,549,858,177 
           
Accounts payable and other current          
Obligations payable   101,798,173    419,020,984 
Suppliers   1,243,098,938    685,513,316 
Foreign suppliers   23,285,096    44,080,464 
Related Parties (Note 7)   12,411,034    86,767,660 
Salaries and social security liabilities   527,085,058    422,441,830 
Other fiscal liabilities   184,440,001    100,735,179 
    2,092,118,300    1,758,559,433 
           
Accounts payable and other non-current          
Tax liabilities   96,152,882    128,108,326 
    96,152,882    128,108,326 

 

 18 

 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Condensed Consolidated Interim Financial Statements

At September 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   Nine months at 
   09.30.18   09.30.17   09.30.18   09.30.17 
   $ 
Revenues                    
Aeronautical revenues   3,237,943,404    1,840,328,166    7,982,230,264    5,134,064,236 
Non-Aeronautical revenues   2,368,241,823    1,466,500,739    5,832,678,656    4,037,417,890 
    5,606,185,227    3,306,828,905    13,814,908,920    9,171,482,126 
Other income and expenses net                    
Trust for Strengthening   138,721,773    82,094,097    342,464,271    227,697,171 
Others   (21,417,867)   1,264,739    (30,913,753)   (2,829,311)
    117,303,906    83,358,836    311,550,518    224,867,860 

 

   Three months at   Nine months at 
   09.30.18   09.30.17   09.30.18   09.30.17 
   $ 
Finance Income                    
Interest   257,602,477    6,906,248    478,318,224    410,469,764 
Foreign Exchange differences   1,057,612,566    99,287,103    2,020,577,685    155,850,660 
    1,315,215,043    106,193,351    2,498,895,909    566,320,424 
Finance Expenses                    
Interest   (209,651,360)   (102,696,377)   (408,816,555)   (529,825,213)
Foreign Exchange differences   (5,070,187,719)   (266,995,752)   (9,202,212,740)   (614,705,994)
    (5,279,839,079)   (369,692,129)   (9,611,029,295)   (1,144,531,207)
                     
Income Tax                    
Current   (13,005,718)   (330,442,766)   (7,246,912)   (801,721,248)
Deferred   501,442,482    (21,615,688)   469,371,973    (52,121,324)
    488,436,764    (352,058,454)   462,125,061    (853,842,572)

 

 19 

 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Condensed Consolidated Interim Financial Statements

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

 

NOTE 5 – INTANGIBLE ASSETS

 

   2018   2017 
   $ 
Original values          
Balance at January 1   12,650,633,023    8,810,344,182 
Acquisitions   3,825,782,030    2,626,501,597 
Impairment (1)   -    (726,639)
Balance at September 30   16,476,415,053    11,436,119,140 
           
Accumulated Amortization:          
Balance at January 1   (2,026,577,310)   (1,504,456,934)
From the period (Note 10)   (568,467,502)   (391,327,441)
Balance at September 30   (2,595,044,812)   (1,895,784,375)
Total Net Balance   13,881,370,241    9,540,334,765 

 

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

 

During the nine month periods ended at September 30, 2018 and 2017, the group has capitalized expenses for finance interest for the amount of $237,092,527 and $98,525,474 respectively.

 

 20 

 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Condensed Consolidated Interim Financial Statements

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

 

NOTE 6 – BORROWINGS

 

Breakdown of borrowings:

 

   30.09.18   31.12.17 
   $ 
Non-current          
Negotiable Obligations   15,468,750,000    7,459,600,000 
Finance lease liabilities   24,451,179    39,501,664 
Cost of issuance of Negotiable Obligations   (89,853,338)   (97,940,139)
Total Non-Current   15,403,347,841    7,401,161,525 
Current          
Bank borrowings   -    17,865,756 
Negotiable Obligations   1,273,164,962    96,126,536 
Finance lease liabilities   60,466,258    35,983,827 
Total Current   1,333,631,220    149,976,119 
Total   16,736,979,061    7,551,137,644 

 

Changes in borrowings:

 

   2018   2017 
   $ 
Balance at January 1   7,551,137,644    3,115,254,471 
New borrowings   15,081,969    6,324,593,741 
Payments   (524,212,353)   (3,626,684,512)
Accrued interests   602,799,517    584,646,818 
Foreign Exchange differences   9,092,172,284    602,485,134 
Net Balance at September 30   16,736,979,061    7,000,295,652 

 

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 (…)”.

 

 21 

 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Condensed Consolidated Interim Financial Statements

At September 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 September 30, 2018, the reasonable value of negotiable obligations issued in February 2017 is of $16,312,380,160. 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).

 

 22 

 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Condensed Consolidated Interim Financial Statements

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

 

NOTE 7 – BALANCES AND TRANSACTIONS WITH RELATED PARTIES

 

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

 

   09.30.18   12.31.17 
   $ 
Trade receivables net- Current          
Other related companies   10,176,193    4,565,000 
    10,176,193    4,565,000 
           
Accounts payable and other- Current          
Other related companies   12,411,034    86,767,660 
    12,411,034    86,767,660 
           
Provisions and other charges          
Other related companies   426,249    426,249 
Shareholders   -    245,000,000 
    426,249    245,426,249 

 

 23 

 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Condensed Consolidated Interim Financial Statements

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

 

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

 

During the nine-month periods ended September 30, 2018 and 2017 the Company has charged to the cost $56,254,359 and $59,697,706 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 nine months ended September 30, 2018 $20,751,444 with Servicios Integrales América for out sourcing of systems and technology. During the nine-month periods ended September 30, 2018 and 2017, the Company has accrued with Helport S.A. to intangible assets $260,054,732 (including the Ezeiza runway refurbishment works, Tucumán runway extension, Palomar terminal remodeling, among others) and $620,342,567 respectively, at cost $103,530,787 and $37,678,799 respectively. Likewise, AA2000 has accrued at September 30, 2018 and 2017 intangible assets for $5,169,092 and $18,960,121 respectively corresponding to the work of Mendoza carried out by Jose Cartellone –Helport-UTE.

 

During the period ended at September 30, 2018, $245,000,000 of dividends have been paid to the shareholders according to their shareholding.

 

At September 30, 2018 and December 31, 2017 the Company owed the Argentine National Government $308,142,567 and $176,591,493 respectively, corresponding to the specific allocation of revenues of each period (see Note 10) and has recorded a receivable for $3,522,917,282 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 $32,768,175 and $31,482,632 for the nine month periods ended at September 30, 2018 and 2017 respectively.

 

 24 

 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Condensed Consolidated Interim Financial Statements

At September 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.

 

 25 

 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Condensed Consolidated Interim Financial Statements

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

 

NOTE 8 – 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   82,705,820    70,486,558 
Increases (Note 10)   205,102,247    29,756,464 
Final Balance at September 30   287,808,067    100,243,022 

 

(1)As of September 30, 2018 and 2017 includes $58,185,235 and $29,756,464 respectively in Distribution and Commercialization Expenses (Note 10) and $146,917,012 in Exchange Difference (Note 4).

 

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   17,594,822    -    70,616,430    863,663,424    47,566,669    12,678,291    6,498,955    -    -    1,018,618,591 
Decreases   (14,237,583)   -    -    (795,627,893)   (13,796,587)   -    -    (245,000,000)   -    (1,068,662,063)
Accruals   -    -    (86,587,210)   -    -    -    (13,959,370)   -    -    (100,546,580)
At September 30, 2018   61,664,194    426,249    76,147,216    143,363,053    64,874,849    12,678,291    52,872,058    -    -    412,025,910 
                                                   
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   1,468,772    -    88,485,215    554,975,599    16,114,677    -    45,712,956    1,180,000,000    -    1,886,757,219 
Decreases   (259,432)   -    -    (550,087,951)   (11,329,348)   (86,078,277)   -    (775,000,000)   (23,678)   (1,422,778,686)
Accrual   -    -    (113,981,018)   -    -    -    (31,014,553)   -    -    (144,995,571)
At September 30, 2017   34,348,335    426,249    43,796,040    62,037,142    29,734,163    -    66,252,095    405,000,000    -    641,594,024 

 

 26 

 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Condensed Consolidated Interim Financial Statements

At September 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
09.30.2018
 
Nine month period ended at 09.30.18                    
Specific allocation of revenues   2,054,785,625    -    -    2,054,785,625 
Airport services and maintenance   1,826,972,562    21,896,346    11,238,028    1,860,106,936 
Amortization of intangible assets   562,242,445    5,460,594    764,463    568,467,502 
Depreciation of property, plant and equipment   2,986,232    -    -    2,986,232 
Salaries and social security contributions   1,796,917,411    231,525,037    46,618,831    2,075,061,279 
Fees for services   85,082,618    59,627,781    5,392,317    150,102,716 
Public utilities and contributions   314,675,720    1,745,276    2,079,640    318,500,636 
Taxes   61,484,317    111,692,845    734,344,539    907,521,701 
Office expenses   187,812,370    177,996,551    6,970,502    372,779,423 
Insurance   77,285,962    1,765,510    -    79,051,472 
Advertising expenses   -    -    58,264,307    58,264,307 
Bad debts charges   -    -    58,185,235    58,185,235 
Board of Directors and Supervisory Committee fees   -    13,264,500    -    13,264,500 
Other   7,281,462    1,155,093    75,036    8,511,591 
Total at 09.30.18   6,977,526,724    626,129,533    923,932,898    8,527,589,155 
Nine month period ended at 09.30.17                    
Specific allocation of revenues   1,366,183,025    -    -    1,366,183,025 
Airport services and maintenance   1,340,801,232    18,200,206    8,514,819    1,367,516,257 
Amortization of intangible assets   386,399,849    4,167,783    759,809    391,327,441 
Depreciation of property, plant and equipment   2,851,266    -    60    2,851,326 
Salaries and social security contributions   1,347,938,832    173,181,331    30,480,812    1,551,600,975 
Fees for services   15,352,115    63,138,633    7,435,863    85,926,611 
Public utilities and contributions   218,545,680    1,696,182    731,567    220,973,429 
Taxes   42,732,952    116,643,500    485,283,541    644,659,993 
Office expenses   140,456,378    131,809,075    3,942,107    276,207,560 
Insurance   22,955,924    3,213,863    -    26,169,787 
Advertising expenses   -    -    27,001,673    27,001,673 
Bad debts charges   -    -    29,756,464    29,756,464 
Board of Directors and Supervisory Committee fees   -    10,322,997    -    10,322,997 
Other   4,990,053    1,285,201    4,157    6,279,411 
Total at 09.30.17   4,889,207,306    523,658,771    593,910,872    6,006,776,949 

 

 27 

 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Condensed Consolidated Interim Financial Statements

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

 

NOTE 11- FOREIGN CURRENCY ASSETS AND LIABILITIES

 

Item  Foreign currency type
and amount at 09.30.18
   Foreign
exchange
rates
   Amount in local
currency at
09.30.18
   Amount in local
currency at 
12.31.17
 
           $ 
ASSETS                    
CURRENT ASSETS                    
Cash and cash equivalents  US$70,909,033    41.05    2,910,815,785    1,599,688,612 
Deposits in guarantee  US$-    41.05    -    15,502,290 
Investments  US$8,229,560    41.05    337,823,443    - 
Trade receivables  US$39,978,045    41.05    1,641,098,737    772,194,685 
Total current assets             4,889,737,965    2,387,385,587 
Total assets             4,889,737,965    2,387,385,587 
                     
LIABILITIES                    
CURRENT LIABILITIES                    
Accounts payable and others  US$1,832,800    41.25    75,602,980    62,605,327 
   Euros288,109    47.95    13,814,823    12,907,006 
Borrowings  US$30,416,350    41.25    1,254,674,438    101,634,365 
Total current liabilities             1,344,092,241    177,146,698 
                     
NON-CURRENT LIABILITIES                    
Borrowings  US$375,131,556    41.25    15,474,176,705    7,474,997,006 
Total non-current liabilities             15,474,176,705    7,474,997,006 
Total liabilities             16,818,268,946    7,652,143,704 
Net liability position             11,928,530,981    5,264,758,117 
 
 28 

 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Condensed Consolidated Interim Financial Statements

At September 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 September 30, 2018 and 2017 include $5,520,910 and $5,187,060 corresponding to guarantees granted to third parties in connection with lease agreements.

 

NOTE 13 - CAPITAL STOCK

 

At September 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).

 

 29 

 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Condensed Consolidated Interim Financial Statements

At September 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 nine months ended at September 30, 2018 is of $9,438,789 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.

 

 30 

 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Condensed Consolidated Interim Financial Statements

At September 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:

 

 31 

 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Condensed Consolidated Interim Financial Statements

At September 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.

 

 32 

 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Condensed Consolidated Interim Financial Statements

At September 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.

 

   09.30.2018   09.30.2017 
Income for the period, net accrued dividends   (1,056,867,321)   1,950,536,457 
Amount of common shares   258,517,299    258,517,299 
Earnings per shares   (4,0882)   7,5451 

 

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.

 

 33 

 

 

Aeropuertos Argentina 2000 S.A.

Condensed Consolidated Interim Financial Statements

At September 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 September 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.

 

 34 

 

 

Aeropuertos Argentina 2000 S.A.

Condensed Consolidated Interim Financial Statements

At September 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 September 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 items corresponding to architecture and facilities have also been contracted and started.

§The Remodeling of Pre-boarding of Last Floor Terminal A Stage 2 is being executed.
§The work of Multilevel Parking was started.
§The rehabilitation of the Puesto Zulu Platform (Ex Cab 05) is in execution

 

The lighting work of remote platform in sector 2 is finished.

 

Jorge Newbery Airport:

 

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 C demolition (Necessary to be able to execute the first Stage of the New North Platform)
§The work of the Landfill and landscaping of Costanera Avenue is started.

 

The work of the new multilevel parking (Building I) is completed. The 6-level building will be located next to the existing building 2, maintaining the finished floor levels to allow continuous circulation between the two. This improvement will increase the capacity of such in 780 new parking spaces. The work of Sanitation, Parks and New Parking in the South Sector (Assigned Area) is completed.

 

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.

 

 35 

 

 

Aeropuertos Argentina 2000 S.A.

Condensed Consolidated Interim Financial Statements

At September 30, 2018 presented in comparative format

Summary of Information required by Resolution N ° 368/01

of the National Securities Commission

 

Córdoba Airport:

 

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

The track rehabilitation work 18-36 is pre assigned

 

The work of adaptation for flood damage is finished

 

Iguazú Airport:

 

The following works are in the execution stage:

§Work on the remodeling and expansion of the passenger terminal.
§Work of the New Parking.
§Works of track resurfacing and rehabilitation
§Work of the Track Beacon and New posters of vertical signaling in the movement area.
§Work of the Expansion of the commercial platform

 

Bariloche Airport:

 

§Work for the new sewage treatment plant is finished

 

Tucumán Airport:

 

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

 

The works of the integral adaptation of Lado Aire, with interventions on track, its extension, platform, taxiing and beacons are finished

 

 36 

 

 

Aeropuertos Argentina 2000 S.A.

Condensed Consolidated Interim Financial Statements

At September 30, 2018 presented in comparative format

Summary of Information required by Resolution N ° 368/01

of the National Securities Commission

 

San Fernando Airport:

 

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

The demolition work of RACA is about to start

 

San Juan Airport:

 

At the request of the regulatory body, the remodeling work on the passenger terminal is on standby.

The tender for the rehabilitation of the track will begin.

 

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 work of the new Control Tower is under execution.

 

Salta Airport:

 

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

The main and secondary track resurfacing work, and the re-arrangements in filming and expansion of the commercial platform are finished

 

Master Plans:

 

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

 

 37 

 

 

Aeropuertos Argentina 2000 S.A.

Condensed Consolidated Interim Financial Statements

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

 

   09.30.18   09.30.17   09.30.16   09.30.15   09.30.14 
   Thousands $ 
Current Asset   7,314,025    3,578,403    2,017,884    1,047,027    976,612 
Non-current Assets   17,796,034    11,870,270    7,843,356    6,060,328    4,860,795 
Total Assets   25,110,059    15,448,673    9,861,240    7,107,355    5,837,407 
                          
Current liabilities   4,108,421    2,553,145    2,939,116    1,864,010    1,321,176 
Non- Current Liabilities   15,553,873    7,181,924    2,518,914    2,126,347    2,250,331 
Total Liabilities   19,662,294    9,735,069    5,458,030    3,990,357    3,571,507 
Net equity attributable to majority shareholders   5,425,763    5,705,164    4,396,322    3,112,229    2,263,100 
Non-controlling interest   22,002    8,440    6,888    4,769    2,800 
Net Equity   5,447,765    5,713,604    4,403,210    3,116,998    2,265,900 
Total   25,110,059    15,448,673    9,861,240    7,107,355    5,837,407 

 

 38 

 

 

Aeropuertos Argentina 2000 S.A.

Condensed Consolidated Interim Financial Statements

At September 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 nine month periods ended September 30, 2018, 2017, 2016, 2015 and 2014.

 

   09.30.18   09.30.17   09.30.16   09.30.15   09.30.14 
   Thousands $ 
Gross Profit   6,841,092    4,284,545    3,838,366    1,924,681    1,578,875 
Administrative and distribution and selling expenses   (1,550,062)   (1,117,570)   (911,708)   (524,848)   (380,428)
Other net income and expenses   311,551    224,869    (11,834)   (1,725)   5,570 
Operating profit   5,602,581    3,391,844    2,914,824    1,398,108    1,204,017 
Income and financial costs   (7,112,135)   (578,211)   (648,424)   (396,183)   (664,256)
Result for participation of related companies   -    -    -    (156)   (450)
Income before tax   (1,509,554)   2,813,633    2,266,400    1,001,769    539,311 
Income tax   462,125    (853,843)   (784,722)   (348,229)   (189,677)
Result of the period   (1,047,429)   1,959,790    1,481,678    653,540    349,634 
Other comprehensive incomes   -    -    -    -    - 
Comprehensive result of the period   (1,047,429)   1,959,790    1,481,678    653,540    349,634 
Result attributable to majority shareholders   (1,058,259)   1,959,682    1,479,931    652,055    349,658 
Non-controlling interest   10,830    108    1,747    1,485    (24)

 

4. Cash flow structure

 

   09.30.18   09.30.17   09.30.16   09.30.15   09.30.14 
   Thousands $ 
Cash Flows generated by / (used in) operating activities   1,087,165    (850,800)   1,349,068    389,170    461,985 
Cash Flow (used in) investing activities   (221,879)   (3,008)   (5,088)   (5,870)   (336)
Cash Flow (used in) /generated by financing activities   (769,212)   2,400,882    (884,277)   (412,000)   (283,505)
Net Cash Flow generated by / (used in)  the period   96,074    1,547,074    459,703    (28,700)   178,144 

 

 39 

 

 

Aeropuertos Argentina 2000 S.A.

Condensed Consolidated Interim Financial Statements

At September 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 nine month periods ended at September 30, 2018 and 2017

 

Results of operations

 

·Revenue

 

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

 

Revenues  09.30.18  

%

revenues

  

09.30.17*

Modified

  

%

revenues

 
   Thousands $       Thousands $     
Aeronautical revenues   7,982,230    57.78    5,134,064    55.98 
Non-aeronautical revenues   5,832,679    42.22    4,037,418    44.02 
Total   13,814,909    100.0%   9,171,482    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 nine month periods ended September 30, 2018 and 2017:

 

Aeronautical revenues  09.30.18  

%

revenues

   09.30.17  

%

revenues

 
   Thousands $       Thousands $     
Landing fee   742,387    9.30    454,297    8.85 
Parking fee   297,042    3.72    197,631    3.85 
Air station use rate   6,942,801    86.98    4,482,136    87.30 
Total   7,982,230    100.00%   5,134,064    100.00%

 

 40 

 

 

Aeropuertos Argentina 2000 S.A.

Condensed Consolidated Interim Financial Statements

At September 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 nine month periods ended at September 30, 2018 and 2017 (Contd.)

 

Costs of sale

 

The cost of sales had the following variation:

 

   Thousands $ 
Costs of sales for the nine month period ended at 09.30.18   6,977,527 
Costs of sales for the nine month period ended at 09.30.17   4,889,207 
Variation   2,088,320 

 

Administrative Expenses

 

The administrative expenses had the following variation:

 

   Thousands $ 
Administrative expenses for the nine month period ended at 09.30.18   626,130 
Administrative expenses for the nine month period ended at 09.30.17   523,659 
Variation   102,471 

 

Distribution and selling expenses

 

The distribution and selling expenses had the following variation:

 

   Thousands $ 
Distribution and selling expenses for the nine month period ended at 09.30.18   923,933 
Distribution and selling expenses for the nine month period ended at 09.30.17   593,911 
Variation   330,022 

 

 41 

 

 

Aeropuertos Argentina 2000 S.A.

Condensed Consolidated Interim Financial Statements

At September 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 nine month periods ended at September 30, 2018 and 2017 (Contd.)

 

Income and financial costs

 

Net financial income and costs totaled a loss of $7,112,133 thousand during the nine-month period ended at September 30, 2018 with respect to thousands of $578,211 loss during the same period of the previous year.

 

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

 

Other incomes and expenditures

 

The other net income and expense item recorded profits of approximately $311,551 thousand during the nine-month period ended at September 30,2018 with respect to profits of $224,868 thousand in the same period of the previous year.

 

Liquidity and Capital Resources

 

Capitalization

 

The total capitalization of the Company as of September 30, 2018 amounted to $22,184,562 thousand composed of thousands of $16,736,979 of borrowings and a net equity worth of $5,447,765 thousand, while the total capitalization of the Company at September 30, 2018 amounted to thousands of $12,713,900 comprised of thousands of $7,000,296 of borrowings and a net equity worth of thousands of $5,713,604.

 

The debt as a percentage of total capitalization amounted to approximately 75.44% at September 30, 2018 and 55.06% at September 30, 2017.

 

Financing

 

See in detail Note 6 to these Consolidated Financial Statements.

 

 42 

 

 

Aeropuertos Argentina 2000 S.A.

Condensed Consolidated Interim Financial Statements

At September 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 nine month periods ended September 30, 2018, 2017, 2016, 2015 and 2014:

 

   09.30.18   09.30.17   09.30.16   09.30.15   09.30.14 
Liquidity (1)   1.81    1.43    0.69    0.57    0.74 
Solvency (1)   0.28    0.59    0.83    0.80    0.64 
Immobilization of capital   0.71    0.77    0.80    0.85    0.83 

 

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 nine month periods ended September 30, 2018, 2017, 2016, 2015 and 2014:

 

Airport  09.30.18   09.30.17   09.30.16   09.30.15   09.30.14 
   Thousands 
Aeroparque   10,148    10,226    8,461    8,015    7,450 
Ezeiza   7,698    7,373    7,350    6,636    6,457 
Córdoba   2,537    2,091    1,585    1,403    1,228 
Mendoza   1,460    1,311    987    981    948 
Tucumán   725    352    491    439    377 
Bariloche   1,206    995    901    790    707 
C. Rivadavia   497    453    415    416    374 
Río Gallegos   174    194    201    213    190 
Iguazú   763    717    614    610    565 
Salta   810    830    694    631    535 
Total   26,018    24,542    21,699    20,134    18,831 
Total overall   28,530    26,494    23,111    21,490    19,982 
Variation   7.68%   14.60%   7.5%   7.50%   4.69%

 

 43 

 

 

Aeropuertos Argentina 2000 S.A.

Condensed Consolidated Interim Financial Statements

At September 30, 2018 presented in comparative format

Summary of Information required by Resolution N ° 368/01

of the National Securities Commission

 

7. Statistical data (Contd.)

 

Amount of movement of aircraft for nine month periods ended on September 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  09.30.18   09.30.17   09.30.16   09.30.15   09.30.14 
Aeroparque   98,378    99,764    88,345    89,935    84,959 
Ezeiza   55,435    49,517    51,831    48,584    49,861 
San Fernando   29,815    27,403    28,214    29,861    32,699 
Córdoba   25,113    21,003    16,836    15,746    15,212 
Mendoza   15,348    14,341    11,497    11,517    12,180 
Salta   8,264    10,397    7,985    9,100    8,321 
Tucumán   7,576    3,704    5,256    4,968    4,329 
Bariloche   10,767    9,482    8,191    7,554    7,263 
C. Rivadavia   7,556    6,656    6,117    6,540    7,886 
Iguazú   6,891    6,480    6,095    6,081    6,096 
Total   265,143    248,747    230,367    229,886    228,806 
Total overall   319,121    297,930    275,431    278,117    276,985 
Variation   7.11%   8.17%   (1.0)%   0.40%   (3.20)%

 

 44 

 

 

Aeropuertos Argentina 2000 S.A.

Condensed Consolidated Interim Financial Statements

At September 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 nine months of this fiscal year, the company's passenger traffic had a very good evolution reaching 28.5 million, of which 17.3 million were domestic passengers and 11.1 million were international passengers, with growths of 11.5% in domestic and 2.2% in international compared to the previous year. In total, passenger traffic grew 7.7% 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.

 

It should be noted that, after the jump in the exchange rate occurred in June, international traffic began to decline at interannual rates of between -5% and -10%, while domestic traffic accelerated the growth that had been evident in the first months of the exercise. The prospects for the evolution of domestic passenger traffic are positive due to the opening of new routes and the start of operations of several low-cost companies.

 

During the first nine months of this year, the Company made investments for $3,285 million. To this amount, it must be added the payments to the trusts of specific allocation for works for $794 million.

 

As regards to the execution of investments in infrastructure, we make reference to what is expressed in note 1 of this Summary.

 

 45 

 

 

“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 September 30, 2018, the consolidated statement of comprehensive income for the nine and three months periods ended September 30, 2018 and the consolidated statements of changes in shareholders' equity and of cash flows for the nine-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 condensed consolidated interim financial statements in accordance with the accounting framework established by the National Securities Commission (CNV). As indicated in note 3 to the accompanying financial statements, this accounting framework is based on the application of the International Financial Reporting Standards (IFRS) and, in particular, of the International Accounting Standard 34 "Interim Financial Information" (IAS 34). These standards are adopted by the Argentine Federation of Professional Councils in Economic Sciences (FACPCE) and were used in the preparation of the financial statements with the only exception of application of the International Accounting Standard 29 (IAS 29), which was excluded by the CNV from its accounting framework.

 

 46 

 

  

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

 

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 the accounting framework established by the CNV.

 

Emphasis of matter

 

Without qualified or conclusion, we draw attention to Note 3.1 to the accompanying condensed consolidated interim financial statements, which describes that the Company has restated the comparative figures corresponding to the period ended on September 30, 2017.

 

Likewise, we draw attention to note 3.6 to the accompanying consolidated condensed interim financial statements, which qualitatively describes the difference between the accounting information framework of the CNV and the IFRS, considering that the application of IAS 29 was excluded by CNV from its accounting framework.

 

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;

 

 47 

 

  

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

 

d)as of September 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 $49,336,413, which was not yet due at that date.

 

Autonomous City of Buenos Aires, November 5, 2018.

 

PRICE WATERHOUSE & CO. S.R.L.

 

by (Partner)  
  Miguel A. Urus  

 

 48 

(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 September 30, 2018 presented in comparative format

 

 

 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Separate Condensed Individual Interim Financial Statements

At September 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 32
Report of Independent Auditors 39
Report of the Supervisory Committee  

 

$ = Argentine Peso

US$ = US Dollar

 

 

 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

 

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

 

Separate Condensed Individual Financial Statements

For the nine 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 Statements of Comprehensive Income

For the nine month periods ended at September 30, 2018 and 2017

 

   Three months at   Nine months at 
   09.30.18   09.30.17*
Modified
   09.30.18   09.30.17*
Modified
 
   $ 
Continuous Operations                    
Revenue (Note 3)   5,586,430,311    3,302,168,767    13,775,859,272    9,156,504,076 
CINIIF 12 - paragraph 14 Credit   1,485,308,287    1,201,103,950    3,825,782,030    2,626,501,597 
Cost of sales (Note 10)   (2,842,965,272)   (1,778,623,260)   (6,978,131,547)   (4,902,410,010)
CINIIF 12 - paragraph 14 Debit   (1,484,109,864)   (1,200,365,161)   (3,822,072,520)   (2,624,231,107)
Gross Profit   2,744,663,462    1,524,284,296    6,801,437,235    4,256,364,556 
Distribution and selling expenses (Note 10)   (377,539,855)   (214,181,764)   (906,549,098)   (580,975,482)
Administrative expenses (Note 10)   (256,007,225)   (176,952,444)   (617,521,286)   (515,062,050)
Other income and expenses, net (Note 3)   117,222,657    83,331,242    313,298,327    224,764,216 
Operating profit   2,228,339,039    1,216,481,330    5,590,665,178    3,385,091,240 
                     
Finance Income (Note 3)   1,291,701,670    105,800,231    2,452,645,260    565,167,282 
Finance Expenses (Note 3)   (5,278,575,227)   (368,852,037)   (9,607,576,633)   (1,141,789,298)
Result of investments accounted for using the equity method (Note 4)   20,409,052    (1,796,685)   25,748,681    2,904,072 
Income before Income Tax   (1,738,125,466)   951,632,839    (1,538,517,514)   2,811,373,296 
Income Tax (Note 3)   501,085,411    (353,096,066)   480,259,185    (851,691,523)
Income for the period for continuous operations   (1,237,040,055)   598,536,773    (1,058,258,329)   1,959,681,773 
Net Income for the period   (1,237,040,055)   598,536,773    (1,058,258,329)   1,959,681,773 
Other comprehensive income   -    -    -    - 
Comprehensive Income for the period   (1,237,040,055)   598,536,773    (1,058,258,329)   1,959,681,773 
                     

Earnings per share basic and diluted attributable to shareholders of the Company during the period (shown in $ per share ) from continuous operations

   (4.7973)   2.3033    (4.1301)   7.5447 

 

The accompanying notes are an integral part of these 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 September 30, 2018 and December 31, 2017

 

   09.30.18   12.31.17 
   $ 
Assets          
Non current Assets          
Investments accounted for by the equity method (Note 4)   78,778,824    53,030,143 
Intangible Assets (Note 5)   13,881,370,241    10,624,055,713 
Deferred income tax assets   363,056,876    - 
Other receivables (Note 3)   3,522,917,282    2,549,103,960 
Total Non- Current Assets   17,846,123,223    13,226,189,816 
Current Assets          
Other receivables (Note 3)   1,095,334,585    324,030,783 
Trade receivables, net (Note 3)   1,898,595,409    1,050,433,139 
Investments (Note 3)   337,823,443    - 
Cash and cash equivalents (Note 3)   3,832,496,957    2,280,072,038 
Total Current Assets   7,164,250,394    3,654,535,960 
Total Assets   25,010,373,617    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   (1,004,204,218)   2,684,484,995 
Total Sharehoders’ Equity   5,425,762,988    6,429,967,206 
           
Liabilities          
Non- Current Liabilities          
Accounts payable and others (Note 3)   95,951,073    119,690,026 
Borrowings (Note 6)   15,403,347,841    7,401,161,525 
Deferred income tax liabilities   -    86,087,996 
Provisions and other charges (Note 9)   52,903,144    58,196,320 
Total Non- Current Liabilities   15,552,202,058    7,665,135,867 
Current Liabilities          
Fee payable to the Argentine National Government (Note 7)   308,142,567    176,591,493 
Accounts payable and others (Note 3)   2,057,101,199    1,750,819,476 
Income tax, net of prepayments   -    204,738,892 
Borrowings (Note 6)   1,333,631,220    149,976,119 
Provisions and other charges (Note 9)   333,533,585    503,496,723 
Total Current Liabilities   4,032,408,571    2,785,622,703 
Total Liabilities   19,584,610,629    10,450,758,570 
Total Shareholders’ Equity and Liabilities   25,010,373,617    16,880,725,776 

 

The accompanying notes are an integral part of these 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 Statements of Changes in Equity

At September 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   -    -    -    -    -    (1,058,258,329)   (1,058,258,329)
Balance at 09.30.18   258,517,299    629,252,640    137,280,595    175,086,330    5,229,830,342    (1,004,204,218)   5,425,762,988 
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   -    -    -    -    -    1,959,681,773    1,959,681,773 
Balance at 09.30.17   258,517,299    616,914,353    137,280,595    172,667,058    2,560,102,906    1,959,681,773    5,705,163,984 

 

The accompanying notes are an integral part of these 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 September 30, 2018 and 2017

 

      09.30.18   09.30.17* Modified 
   Notes  $ 
Cash Flows from operating activities             
(Loss) Net Income for the period      (1,058,258,329)   1,959,681,773 
Adjustments for:             
Amortization of intangible assets  5   568,467,502    391,327,441 
Impairment of intangible assets  5   -    726,639 
Specific allocation of accrued and unpaid income  7   308,142,567    159,916,422 
Income Tax  3   (480,259,185)   851,691,523 
Income of investments accounted for by the equity method  4   (25,748,681)   (2,904,072)
Bad debts provision  8   56,118,116    28,384,209 
Unpaid borrowing interests costs      241,914,962    86,967,700 
Accrued deferred revenues and additional considerations  9   (85,766,412)   (144,995,571)
Accrued exchange differences      7,649,859,901    480,487,540 
Provision for litigation  9   16,501,142    1,444,245 
              
Changes in operating assets and liabilities:             
Changes in trade receivables      (832,208,238)   23,659,923 
Changes in other receivables      (1,745,117,123)   (1,073,918,375)
Changes in accounts payable and others      282,542,770    143,716,278 
Changes in liabilities for current income tax      348,502,646    (181,992,686)
Changes in provisions and other charges      139,008,956    56,245,525 
Changes in fee payable to the Argentine National Government      (176,591,493)   (147,629,066)
Changes in borrowings      104,948,722    361,426,600 
Changes in current investments      (115,998,080)   - 
Changes in intangible assets      (3,573,607,534)   (2,515,382,382)
Income tax paid      (540,145,263)   (1,331,783,537)
Net Cash generated/(used in) operating activities      1,082,306,946    (852,929,871)
              
Cash flow for investing activities             
Acquisition of other current investments      (221,825,363)   - 
Net cash flow used in investing activities      (221,825,363)   - 
              
Cash Flow from financing activities             
New Borrowings  6   -    6,312,000,000 
Borrowings paid- principal  6   (51,172,415)   (3,093,770,894)
Borrowings paid- interests  6   (473,039,938)   (532,913,618)
Cash flow release      -    490,566,044 
Dividends paid  9   (245,000,000)   (775,000,000)
Net Cash Flow (used in)/generated by financing activities      (769,212,353)   2,400,881,532 
              
Net Increase in cash and cash equivalents      91,269,230    1,547,951,661 
              
Changes in cash and cash equivalents             
Cash and cash equivalents at the beginning of the period (*)      2,280,072,038    766,131,458 
Net Increase in cash and cash equivalents      91,269,230    1,547,951,661 
Foreign Exchange differences      1,461,155,689    159,724,638 
Cash and cash equivalents at the end of the period      3,832,496,957    2,473,807,757 
Transactions that do not represent changes in cash and cash equivalents:             
Acquisition of intangible assets through liabilities for finance leases      15,081,969    12,593,741 
Dividends on preferred shares      9,438,789    9,253,715 

 

(*) 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 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 September 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 September 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.

 

 6 

 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Separate Condensed Individual Interim Financial Statements

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

 

NOTE 1 – COMPANY ACTIVITIES (Contd.)

 

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 November 5, 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.

 

In turn, in Art.3 of the aforementioned CNV regulations, it is established that "The entities subject to the control of the Commission may not apply the method of restating financial statements in homogeneous currency".

 

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.

 

These condensed interim financial statements of the Company have been prepared in accordance with the accounting framework established by the CNV. This accounting framework is based on the application of the IFRS and Interpretations of the IFRIC (IFRIC for its acronym in English), and in particular of the International Accounting Standard 34 "Intermediate Financial Information" (IAS 34), with the only exception of application of the International Accounting Standard 29 (IAS 29), which was excluded by the CNV from its accounting framework.

 

 7 

 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Separate Condensed Individual Interim Financial Statements

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

 

NOTE 2 – ACCOUNTING POLICIES (Contd.)

 

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

 

The current Separate Condensed Individual 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 nine month periods ended at September 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 September 30, 2017 and December 31, 2017 included in these special purpose Separate Condensed Individual Interim Financial Statements for comparative purposes, was extracted from the Financial Statements of AA2000 as of that date, and timely approved by the Company Board of Directors and shareholders.

 

Certain figures in the financial statements for the period ended September 30, 2017 have been reclassified for the purpose of comparative presentation, in relation to the revenues from the Strengthening Trust ($ 227,697,171), 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.

 

2) Accounting Policies

 

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

 

3) Controlled

 

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.

 

 8 

 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Separate Condensed Individual Interim Financial Statements

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

 

NOTE 2 – ACCOUNTING POLICIES (Contd.)

 

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

 

At September 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 09.30..18
   Net Shareholders
‘equity at closing
   Income for the
period
 
Servicios y Tecnología Aeroportuarios S.A. (2)   14,398,848    99.30%   21,119,638    21,267,897    1,753,561 
Cargo & Logistics S.A.   5,566,259    98.63%   2,717,826    2,755,492    (1,276,716)
Paoletti America S.A.   6,000    50.00%   15,526    31,051    - 
Texelrío S.A. (3)   84,000    70.00%   54,852,625    76,646,607    36,122,125 
Villalonga Furlong S.A. (4)   123,700    1.46%   73,209    5,030,323    (1,297,208)

 

(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 September 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 September 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. These requirements also include the comparative information of the financial statements.

 

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 exceeds 100%. Considering a significant increase in inflation during 2018, that also the accumulated inflation rate of the last three years exceeds 100% and that the rest of the indicators do not contradict the conclusion that Argentina should be considered as a hyperinflationary economy for accounting purposes, the Management understands that there is sufficient evidence to conclude that Argentina is a hyperinflationary economy under the terms of IAS 29, as of July 1, 2018. Due to this, in accordance with IAS 29, after that date, the financial statements should be restated.

 

In turn, on September 29, 2018, the FACPCE issued resolution 539/18, which stipulates that it will be appropriate to apply the adjustment for inflation in the financial statements whose closures occur as of July 1, 2018. However, and considering that the application of the integral adjustment for inflation requires efforts from different actors (training, modification of computer systems, search for information, definition of certain conceptual aspects by the profession, and others), provided that the entity may opt, for only once, for not adjusting for inflation the financial statements corresponding to the annual periods closed between July 1, 2018 and December 30, 2018 or the financial statements corresponding to interim periods closed in the same period ( as is the case of the present financial statements). Also, among other provisions, resolution 539/18 also establishes the replacement of the adjustment index for the determination of the restatement coefficient, substituting the IPIM for a coupling between the IPIM and the National Consumer Price Index (CPI).

 

 11 

 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Separate Condensed Individual Interim Financial Statements

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

 

NOTE 2 – ACCOUNTING POLICIES (Contd.)

 

6) Foreign currency translation (Contd.)

 

However, it must be taken into account that at the time of issuance of these financial statements, Decree PEN 664/03 is in force, which does not allow the presentation of restated financial statements before the CNV. Therefore, the Company has applied for the preparation of such financial statements, the accounting presentation bases described in the first point of this Note.

 

In an inflationary period, any entity that maintains an excess of monetary assets over monetary liabilities will lose purchasing power, and any entity that maintains an excess of monetary liabilities over monetary assets will gain purchasing power, provided that such items are not subject to a mechanism of adjustment

 

Briefly, the restatement mechanism of IAS 29 establishes that monetary assets and liabilities will not be restated since they are already expressed in the current unit of measurement at the end of the reporting period. Assets and liabilities subject to adjustments based on specific agreements will be adjusted in accordance with such agreements.

 

The non-monetary items measured at their current values at the end of the reporting period, such as the net realization value or others, do not need to be restated. The remaining non-monetary assets and liabilities will be restated by a general price index. The loss or gain from the net monetary position will be included in the net integral result of the reporting period, revealing this information in a separate line item.

 

The Company is carrying out the necessary actions to implement the application of the adjustment for integral inflation which requires efforts on various issues, such as training, certain modifications to the systems, search for historical information, among other relevant issues. Management understands that these actions will be concluded with the issuance of the next financial statements.

 

As of September 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 Separate Condensed Individual Interim Financial Statements

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

 

NOTE 2 – 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 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 nine-month period ended at September 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.

 

 13 

 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Separate Condensed Individual Interim Financial Statements

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

 

NOTE 2 – ACCOUNTING POLICIES (Contd.)

 

8) Changes in accounting policies (Contd.)

 

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 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.

 

 14 

 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Separate Condensed Individual Interim Financial Statements

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

 

NOTE 2 – ACCOUNTING POLICIES (Contd.)

 

8) Changes in accounting policies (Contd.)

 

a)New standards and amendments issued, but which do not result in effective application as of September 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 Separate Condensed Individual Interim Financial Statements

At September 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  09.30.18   12.31.17 
   $ 
Cash and cash equivalents          
Cash and funds in custody   8,231,002    7,262,801 
Banks   3,249,910,704    2,009,895,109 
Checks not yet deposited   38,488,236    7,835,475 
Time deposits   535,867,015    255,078,653 
    3,832,496,957    2,280,072,038 
           
Investments          
Time deposits   337,823,443    - 
    337,823,443    - 
           
Trade receivables, net          
Trade receivables   2,130,685,766    1,164,337,126 
Related parties (Note 7)   13,370,210    4,669,128 
Checks - postdated checks   36,713,962    32,638,434 
Provision for bad debts (Note 8)   (282,174,529)   (151,211,549)
    1,898,595,409    1,050,433,139 
     
Other current receivables          
Expenses to be recovered   17,917,155    1,501,396 
Guarantees granted   5,520,910    5,457,870 
Related parties (Note 7)   795,282    795,282 
Tax credits   1,056,906,340    298,431,065 
Prepaid Insurance   13,095,487    17,193,815 
Other   1,099,411    651,355 
    1,095,334,585    324,030,783 
           
Other non-current receivables          
Trust for Strengthening (Note 7)   3,522,917,282    2,549,103,960 
    3,522,917,282    2,549,103,960 

 

 16 

 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Separate Condensed Individual Interim Financial Statements

At September 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.)

 

   09.30.18   12.31.17 
   $ 
Accounts payable and other-current          
Obligations payable   101,798,173    419,020,984 
Suppliers   1,196,265,570    665,826,580 
Foreign suppliers   23,285,096    44,080,464 
Related parties (Note 7)   47,692,185    119,323,068 
Salaries and social security liabilities   513,915,954    412,182,852 
Other fiscal liabilities   174,144,221    90,385,528 
    2,057,101,199    1,750,819,476 
Accounts payable and other- non current          
Tax liabilities   95,951,073    119,690,026 
    95,951,073    119,690,026 

 

INDIVIDUAL STATEMENTS OF
COMPREHENSIVE INCOME
  Three months at   Nine months at 
   09.30.18   09.30.17   09.30.18   09.30.17 
   $ 
Revenue                    
Aeronautical revenues   3,237,943,404    1,840,328,166    7,982,230,264    5,134,064,236 
Non-aeronautical revenues   2,348,486,907    1,461,840,601    5,793,629,008    4,022,439,840 
    5,586,430,311    3,302,168,767    13,775,859,272    9,156,504,076 
                     
Other income and expenses net                    
Trust for Strengthening   138,721,773    82,094,097    342,464,271    227,697,171 
Others   (21,499,116)   1,237,145    (29,165,944)   (2,932,953)
    117,222,657    83,331,242    313,298,327    224,764,216 

 

 17 

 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Separate Condensed Individual Interim Financial Statements

At September 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   Nine months at 
   09.30.18   09.30.17   09.30.18   09.30.17 
   $ 
Finance Income                    
Interest   248,342,524    6,790,817    468,796,200    410,003,907 
Foreign Exchange differences   1,043,359,146    99,009,414    1,983,849,060    155,163,375 
    1,291,701,670    105,800,231    2,452,645,260    565,167,282 
                     
Finance Expenses                    
Interest   (208,387,508)   (101,856,285)   (405,363,893)   (527,083,304)
Foreign Exchange differences   (5,070,187,719)   (266,995,752)   (9,202,212,740)   (614,705,994)
    (5,278,575,227)   (368,852,037)   (9,607,576,633)   (1,141,789,298)
    (3,986,873,557)   (263,051,806)   (7,154,931,373)   (576,622,016)
                     
Income Tax                    
Current   -    (331,254,916)   13,096,275    (799,059,738)
Deferred   501,085,411    (21,841,150)   467,162,910    (52,631,785)
    501,085,411    (353,096,066)   480,259,185    (851,691,523)

 

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   25,748,681    2,904,072 
Balance at September 30   78,778,824    46,152,946 

 

 18 

 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Separate Condensed Individual Interim Financial Statements

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

 

NOTE 5 – INTANGIBLE ASSETS

 

   2018   2017 
   $ 
Original values          
Balance at January 1   12,650,633,023    8,810,344,182 
Acquisitions   3,825,782,030    2,626,501,597 
Impairment (1)   -    (726,639)
Balance at September 30   16,476,415,053    11,436,119,140 
           
Accumulated Amortization:          
Balance at January 1   (2,026,577,310)   (1,504,456,934)
From the period (Note 10)   (568,467,502)   (391,327,441)
Balance at September 30   (2,595,044,812)   (1,895,784,375)
Total Net Balance   13.881.370.241    9.540.334.765 

 

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

 

During the nine month periods ended at September 30, 2018 and 2017, the Company has capitalized expenses for finance interest for the amount of $237,092,527 and $98,525,474 respectively.

 

NOTE 6 – BORROWINGS

 

Breakdown of borrowings:

 

   09.30.18   12.31.17 
   $ 
Non-current          
Negotiable Obligations   15,468,750,000    7,459,600,000 
Finance lease liabilities   24,451,179    39,501,664 
Cost of issuance of Negotiable Obligations   (89,853,338)   (97,940,139)
Total Non- Current   15,403,347,841    7,401,161,525 
Current          
Bank borrowings   -    17,865,756 
Negotiable Obligations   1,273,164,962    96,126,536 
Finance lease liabilities   60,466,258    35,983,827 
Total Current   1,333,631,220    149,976,119 
Total   16,736,979,061    7,551,137,644 

 

 19 

 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Separate Condensed Individual Interim Financial Statements

At September 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   15,081,969    6,324,593,741 
Payments   (524,212,353)   (3,626,684,512)
Accrued interest   602,799,517    584,646,818 
Foreign Exchange differences   9,092,172,284    602,485,134 
Net Balance at September 30   16,736,979,061    7,000,295,652 

 

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 Separate Condensed Individual Interim Financial Statements

At September 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.

 

At December 31, 2017 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 September 30, 2017

 

At September 30, 2018 the reasonable value of negotiable obligations issued in February 2017 is of $16,312,380,160. 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 Separate Condensed Individual Interim Financial Statements

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

 

NOTE 7 – BALANCES AND TRANSACTIONS WITH RELATED PARTIES

 

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

 

   09.30.18   12.31.17 
   $ 
Trade receivables net- Current          
Servicios y Tecnología Aeroportuarios S.A.   3,193,669    104,128 
Other related companies   10,176,541    4,565,000 
    13,370,210    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.   3,324,959    8,199,741 
Texelrío S.A.   31,956,192    24,355,667 
Other related companies   12,411,034    86,767,660 
    47,692,185    119,323,068 
Provisions and other charges          
Villalonga Furlong S.A.   1,666,813    3,759,171 
Other related companies   426,249    426,249 
Stakeholders   -    245,000,000 
    2,093,062    249,185,420 

 

During the nine month periods ended at September 30, 2018 and 2017, the Company has charged the cost $203,726,412 and $186,683,621 respectively for maintenance done with Texelrio S.A.

 

 22 

 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Separate Condensed Individual Interim Financial Statements

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

 

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

 

During the nine-month periods ended September 30, 2018 and 2017 the Company has charged to the cost $56,254,359 and $59,697,706 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 nine months ended September 30, 2018 $20,751,444 with Servicios Integrales América for out sourcing of systems and technology. During the nine-month periods ended September 30, 2018 and 2017, the Company has accrued with Helport S.A. to intangible assets $260,054,732 (including the Ezeiza runway refurbishment works, Tucumán runway extension, Palomar terminal remodeling, among others) and $620,342,567 respectively, at cost $103,530,787 and $37,678,799 respectively. Likewise, AA2000 has accrued at September 30, 2018 and 2017 intangible assets for $5,169,092 and $18,960,121 respectively corresponding to the work of Mendoza carried out by Jose Cartellone –Helport-UTE.

 

During the period ended at September 30, 2018, $245,000,000 of dividends have been paid to the shareholders according to their shareholding.

 

At September 30, 2018 and December 31, 2017 the Company owed the Argentine National Government $308,142,567 and $176,591,493 respectively, corresponding to the specific allocation of revenues of each period (see Note 10) and has recorded a receivable for $3,522,917,282 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 $32,768,175 and $31,482,632 for the nine month periods ended at September 30, 2018 and 2017 respectively.

 

 23 

 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Separate Condensed Individual Interim Financial Statements

At September 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 Separate Condensed Individual Interim Financial Statements

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

 

NOTE 8 – 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   79,139,401    68,874,745 
Increases (Note 10)   203,035,128    28,384,209 
Final Balance at September 30   282,174,529    97,258,954 

 

(1)As of September 30, 2018 and 2017 includes $56,118,116 and $28,384,209 respectively in Distribution and Commercialization Expenses (Note 10) and $146,917,012 in Exchange Difference (Note 3).

 

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   16,501,142    111,939    46,828,815    47,518,087    6,498,955    863,663,424    -    -    981,122,362 
Decreases   (13,983,488)   (2,204,297)   -    (13,796,586)   -    (795,627,893)   -    (245,000,000)   (1,070,612,264)
Accruals   -    -    (71,807,042)   -    (13,959,370)   -    -    -    (85,766,412)
At September 30, 2018