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

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20546

 

FORM 6-K

 

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

UNDER THE SECURITIES EXCHANGE ACT OF 1934

 

For the month of May, 2019

 

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 consolidated interim financial statements for the three months ended March 31, 2019 of AA2000 (the “AA2000 Consolidated Financial Statements”) as well as the stand-alone condensed individual interim financial statements for the three months ended March 31, 2019 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, 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”). We have determined that, as of July 1, 2018, the Argentine economy qualifies as a hyperinflationary economy according to the guidelines of the International Accounting Standard 29, Financial Reporting in Hyperinflationary Economies (“IAS 29”), since the total cumulative inflation in Argentina in the 36 months prior to July 1, 2018, as measured by the wholesale price index published by the INDEC, exceeded 100%. Accordingly, IAS 29 guidance is applicable to our financial statements for periods ending after July 1, 2018. These AA2000 Financial Statements are presented in Argentine pesos and were audited in accordance with International Standards on Auditing as approved by the International Auditing and Assurance Standards Board (IAASB).

 

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

 

As a result, the AA2000 Financial Statements contained in this Form 6-K are for informational purposes only and not comparable to the financial information included in the Argentine segment in the consolidated financial statements of CAAP to be included in our annual report on Form 20-F and that will consolidate the results of operations and financial condition of all our subsidiaries. Furthermore, neither the AA2000 Consolidated Financial Statements nor the AA2000 Individual Financial Statements should be construed as any indication of how our Argentina segment information will be presented in the consolidated financial statements of CAAP.

 

 

 

Exhibits

 

Exhibit No.   Description
     
99.1   Free translation into English of AA2000 Condensed Consolidated Interim Financial Statements for the three months ended March 31, 2019.
     
99.2   Free translation into English of AA2000 Condensed Individual Interim Financial Statements for the three months ended March 31, 2019.

 

 

 

 

SIGNATURES

 

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

 

Date: May 14, 2019

 

  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 March 31, 2019 presented in comparative format

 

 

 

 

Aeropuertos Argentina 2000 S.A.

 

Condensed Consolidated Interim Financial Statements

At March 31, 2019 presented in comparative format

 

Index

 

Consolidated Statements of Comprehensive Income 2
Consolidated Statements of Financial Position 3
Consolidated Statements of Changes in Equity 4
Consolidated Statements of Cash Flows 5
Notes to the Condensed Consolidated Interim Financial Statements 6
Summary of Information requested by Resolution N° 368/01 Of the National Securities Commission 27
Review Report  
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: Honduras 5663 - Ciudad Autónoma de Buenos Aires
Principal activity: Exploitation, administration and operation of airports

 

Condensed Consolidated Interim Financial Statements

For the three- month period of the

Fiscal Year N° 22 commenced January 1, 2019

 

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 Public Registry: 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 Statement of Comprehensive Income

For the three month periods ended at March 31, 2019 and 2018

 

   03.31.19   03.31.18 
   $ 
Continuous Operations          
Revenue (Note 4)   7,116,562,530    6,311,425,298 
CINIIF 12 - paragraph 14 Credit (Note 5)   2,298,290,404    1,271,322,868 
Cost of services (Note 10)   (4,090,917,745)   (3,516,577,659)
CINIIF 12 - paragraph 14 Debit   (2,296,509,229)   (1,269,208,987)
Gross Profit   3,027,425,960    2,796,961,520 
Distribution and selling expenses (Note 10)   (454,499,952)   (393,753,414)
Administrative expenses (Note 10)   (282,342,450)   (326,778,004)
Other income and expenses, net (Note 4)   175,887,368    144,494,175 
Operating profit   2,466,470,926    2,220,924,277 
           
Financial Income (Note 4)   457,231,687    (48,173,631)
Financial Costs (Note 4)   (820,287,598)   (76,836,528)
Result from exposure to changes in the purchasing power of the currency   (411,625,085)   (429,740,202)
Income before income tax   1,691,789,930    1,666,173,916 
Income tax (Note 4)   489,079,895    (651,113,518)
Income for the period for continuous operations   2,180,869,825    1,015,060,398 
Net Income for the period   2,180,869,825    1,015,060,398 
Other comprehensive income   -    - 
Comprehensive Income for the period   2,180,869,825    1,015,060,398 
           
Income attributable to:          
Shareholders   2,180,438,558    1,018,179,997 
Non –Controlling Interest   431,267    (3,119,599)
           
Earnings per share basic and diluted attributable to shareholders of the Company during the period (shown in $ per share ) from continuous operations   8.4237    3.9143 

 

The accompanying notes are an integral part of these Condensed Consolidated Interim Financial Statements and should be read together with the Consolidated Financial Statements audited for the year ended at December 31, 2018.

 

 2 

 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Consolidated Statements of Financial Position

At March 31, 2019 and December 31, 2018

 

   03.31.19   12.31.18 
   $ 
Assets          
Non- Current Assets          
Property, plant and equipment   61,750,058    63,909,451 
Intangible Assets (Note 5)   41,194,015,419    39,816,506,828 
Rights of use   170,824,083    - 
Deferred Income tax assets   651,692    714,486 
Other receivables (Note 4)   4,407,270,138    4,527,163,964 
Total Non-Current Assets   45,834,511,390    44,408,294,729 
Current Assets          
Other receivables (Note 4)   986,839,800    1,178,557,052 
Trade receivables, net (Note 4)   2,758,836,998    2,604,392,732 
Other Assets   9,457,014    8,300,386 
Investments   -    208,488,959 
Cash and cash equivalents (Note 4)   4,717,818,419    4,410,046,224 
Total Current Assets   8,472,952,231    8,409,785,353 
Total Assets   54,307,463,621    52,818,080,082 
Shareholders’ Equity and Liabilities          
Equity attributable to Shareholders:          
Common shares   258,517,299    258,517,299 
Preferred shares   629,252,640    629,252,640 
Share Premium   137,280,595    137,280,595 
Capital adjustment   8,076,892,213    8,076,892,213 
Legal and facultative reserve   9,665,556,681    9,665,556,681 
Retained earnings   8,822,944,531    6,642,505,973 
Subtotal   27,590,443,959    25,410,005,401 
Non-Controlling Interest   17,820,116    17,388,849 
Total Shareholders’ Equity   27,608,264,075    25,427,394,250 
Liabilities          
Non-Current Liabilities          
Accounts payable and others (Note 4)   78,628,939    98,358,770 
Borrowings (Note 6)   15,108,717,744    15,205,583,112 
Lease liabilities   62,644,323    - 
Deferred income tax liability   4,405,348,387    5,771,902,244 
Provisions and other charges (Note 9)   148,242,851    149,396,345 
Total Non-Current liabilities   19,803,582,244    21,225,240,471 
Current Liabilities          
Fee payable to the Argentine National Government (Note 7)   356,875,211    363,508,457 
Accounts payable and others (Note 4)   3,013,974,902    3,459,943,012 
Income tax, net of prepayments   424,798,507    8,992,731 
Borrowings (Note 6)   2,464,813,183    1,881,782,365 
Lease liabilities   119,792,546    - 
Provisions and other charges (Note 9)   515,362,953    451,218,796 
Total Current Liabilities   6,895,617,302    6,165,445,361 
Total Liabilities   26,699,199,546    27,390,685,832 
Total Shareholders’ Equity and Liabilities   54,307,463,621    52,818,080,082 

 

The accompanying notes are an integral part of these Condensed Consolidated Interim Financial Statements and should be read together with the Consolidated Financial Statements audited for the year ended at December 31, 2018.

 

 3 

 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Consolidated Statements of Changes in Equity

At March 31, 2019 and 2018

 

   Attributable to equity shareholders of the Company 
  Capital Stock
Common Shares
   Capital Stock
Preferred Shares
   Share Premium  

 

Adjustment of
capital

   Legal
Reserve
   Facultative
Reserve
   Retained
Earnings
   Total   Non- Controlling
Interest
   Total
Shareholders’
Equity
 
    $ 
Balance at 01.01. 19   258,517,299    629,252,640    137,280,595    8,076,892,213    351,808,374    9,313,748,307    6,642,505,973    25,410,005,401    17,388,849    25,427,394,250 
Net Income for the period   -    -    -    -    -    -    2,180,438,558    2,180,438,558    431,267    2,180,869,825 
Balance at 03.31.19   258,517,299    629,252,640    137,280,595    8,076,892,213    351,808,374    9,313,748,307    8,822,944,531    27,590,443,959    17,820,116    27,608,264,075 
                                                   
Balance at 01.01. 18   258,517,299    616,914,353    137,280,595    8,070,139,180    400,922,966    5,411,803,120    9,280,927,214    24,176,504,727    15,584,897    24,192,089,624 
Adjustment IFRS 9   -    -    -    -    -    -    89,208,497    89,208,497    -    89,208,497 
Balance at 01.01.18 restated   258,517,299    616,914,353    137,280,595    8,070,139,180    400,922,966    5,411,803,120    9,370,135,711    24,265,713,224    15,584,897    24,281,298,121 
Net Income for the period   -    -    -    -    -    -    1,018,179,997    1,018,179,997    (3,119,599)   1,015,060,398 
Balance at 03.31.18   258,517,299    616,914,353    137,280,595    8,070,139,180    400,922,966    5,411,803,120    10,388,315,708    25,283,893,221    12,465,298    25,296,358,519 

 

The accompanying notes are an integral part of these Condensed Consolidated Interim Financial Statements and should be read together with the Consolidated Financial Statements audited for the year ended at December 31, 2018.

 

Véase nuestro informe de fecha  
8 de mayo de 2019  
PRICE WATERHOUSE & CO. S.R.L.  

 

(Socio)        

C.P.C.E.C.A.B.A. T° 1 F° 17

Dr. Miguel A. Urus

Contador Público (UBA)

C.P.C.E.C.A.B.A. T° 184 F° 246

Lic. en Administración

C.P.C.E.C.A.B.A. T° 28 F° 223

 

Patricio A. Martin

Por Comisión Fiscalizadora

  Martin Francisco Antranik
Eurnekian
Presidente

 

 4 

 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Consolidated Statements of Cash Flow

For the three month periods ended at March 31, 2019 and 2018

 

       03.31.19   03.31.18 
   NOTES   $ 
Cash Flows from operating activities               
Net income for the period        2,180,869,825    1,015,060,398 
Adjustment for:               
Amortization of intangible assets   5    920,781,813    666,130,055 
Depreciation of property , plant and equipment   10    2,263,762    2,496,762 
Amortization right of use   10    27,752,700    - 
Specific allocation of accrued and unpaid income   7    356,875,211    302,774,846 
Bad debts provision   8    87,448,733    6,839,652 
Income Tax   4    (489,079,895)   651,113,518 
Accrued borrowing interest costs   6    297,691,769    222,023,520 
Accrued deferred revenues and additional consideration   9    (87,319,996)   (60,512,450)
Accrued and unpaid Exchange differences        369,608,663    (243.191.861)
Contingencies provision   9    2,031,950    7,668,167 
Inflation Adjustment        68,843,246    (329,740,906)
Changes in operating assets and liabilities:               
Changes in trade receivables        (516,320,395)   135,163,113 
Changes in other receivables        (289,606,239)   1,370,048,532 
Changes in other assets        (1,156,628)   (148,418)
Changes in accounts payable and others        (90,756,220)   (1,016,477,693)
Changes in liabilities for current income tax        (358,243,637)   (384,760,886)
Changes in provisions and other charges        189,379,880    55,242,264 
Changes in fee payable to the Argentine National Government        (325,205,217)   (260,729,552)
Increase of intangible assets        (2,297,528,617)   (1,252,366,772)
Income tax paid        (103,361,811)   (343,269,607)
Net cash (used in)/ provided by operating activities        (55,031,103)   543,362,682 
Cash Flow for investing activities               
Collection of investments        202,554,910    - 
Addition of property, plant and equipment        (104,369)   (50,720)
Net Cash Flow generated by / (used in) investing activities        202,450,541    (50,720)
Cash Flow from financing activities               
Payment of leases        (27,551,637)   - 
Borrowings paid- principal   6    (14,646,243)   (24,924,125)
Borrowings paid- interests   6    (274,914,643)   (215,779,804)
Dividends paid   9    -    (73,907,633)
Net Cash Flow used in financing activities        (317,112,523)   (314,611,562)
                
Net (Decrease) / Increase in cash and cash equivalents        (169,693,085)   228,700,400 
Changes in cash and cash equivalents               
Cash and cash equivalents at the beginning of the period (*)        4,410,046,224    3,828,419,678 
Net (Decrease) / Increase in cash and cash equivalents        (169,693,085)   228,700,400 
Inflation adjustment        349,413,308    (201,193,696)
Foreign Exchange differences        128,051,972    74,504,518 
Cash and cash equivalents at the end of the period        4,717,818,419    3,930,430,900 
Transactions that do not represent changes in cash and cash equivalents:               
Acquisition of intangible assets through liabilities for finance leases   9    761,787    18,956,096 
Dividends on preferred shares        3,209,188    3,146,263 

 

The accompanying notes are an integral part of these Condensed Consolidated Interim Financial Statements and should be read together with the Consolidated Financial Statements audited for the year ended at December 31, 2018.

 

 5 

 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Condensed Consolidated Interim Financial Statements

At March 31, 2019 presented in comparative format

 

NOTE 1 - COMPANY ACTIVITIES

 

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

 

The Concession was granted pursuant to the concession agreement the Company entered into with the Argentine National Government on February 9, 1998, as subsequently amended and supplemented by the memorandum of agreement we entered into with the Argentine National Government on April 3, 2007 (the “Memorandum of Agreement”). 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 (“ORSNA” for the acronym in Spanish) to extend the term of the Concession for the additional 10-year period ending February 13, 2038. We can provide no assurance that the Argentine National Government will grant our request or on what conditions.

 

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

 

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

 

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, 2018.

 

 6 

 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Condensed Consolidated Interim Financial Statements

At March 31, 2019 presented in comparative format (Contd.)

 

NOTE 2 - BASIS FOR CONSOLIDATION

 

The Condensed Consolidated Interim Financial Statements include the assets, liabilities and results of the following subsidiaries (hereafter the Group):

 

Controlled (1)  Number of
common shares
   Participation in
capital and
possible votes
   Book entry
value at
03.31.19
   Net
Shareholders
‘equity at
closing
   Income for the
year
 
           $ 
Servicios y Tecnología Aeroportuarios S.A. (2)   14,398,848    99.30%   40,597,187    40,882,177    (906,701)
Cargo & Logistics SA.   5,566,259    98.63%   751,130    761,563    (1,053,738)
Paoletti América S.A.   6,000    50.00%   15,526    31,052    (1,829)
Texelrío S.A. (3)   84,000    70.00%   65,897,655    83,396,651    1,047,981 
Villalonga Furlong S.A (4)   123,700    1.46%   50,560    3,463,032    (12,988)

 

(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 accounting policies.

 

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.

 

 7 

 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Condensed Consolidated Interim Financial Statements

At March 31, 2019 presented in comparative format (Contd.)

 

NOTE 2 - BASIS FOR CONSOLIDATION (Contd.)

 

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.

 

NOTE 3 - ACCOUNTING POLICIES

 

The Condensed Consolidated Interim Financial Statements are presented in Argentine Pesos, except when it specifically indicates otherwise. These statements were approved by the Board of Directors of the Company on May 8, 2019.

 

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

 

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

 

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

 

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

 

1) Comparative Information

 

The information included in these financial statements was extracted from the Consolidated Financial Statements of AA2000 as of March 31, 2018 and December 31, 2018, timely approved by the Company’s Board and Shareholders and restated at the closing currency at March 31, 2019, based on the application of IAS 29 (see Note 3.6)

 

 8 

 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Condensed Consolidated Interim Financial Statements

At March 31, 2019 presented in comparative format (Contd.)

 

NOTE 3 - ACCOUNTING POLICIES (Contd.)

 

2) Controlled

 

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).

 

Inter-company transactions, balances and unrealized gains or transactions between Group companies are eliminated. Unrealized losses are also eliminated. When necessary, amounts reported by subsidiaries have been adjusted to conform to the Group’s accounting policies.

 

3) Segment Information

 

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

 

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

 

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

 

4) 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, 2018.

 

 9 

 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Condensed Consolidated Interim Financial Statements

At March 31, 2019 presented in comparative format (Contd.)

 

NOTE 3 - ACCOUNTING POLICIES (Contd.)

 

5) Changes in accounting policies and disclosures

 

New accounting standards and interpretations issued by the IASB that are effective at January 1, 2019 and have been adopted by the Group

 

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 Company has revised its lease agreements in force as of January 1, 2019 and has recorded an initial "Right of Use" asset for the initial application of IFRS 16 for a total of $ 182,815,556 and a liability for "Lease liabilities" For $ 182,815,556.

 

 

At the date of issuance of these financial statements there are no other standards, changes or interpretations issued by the IASB and IFRIC that are not yet effective and are expected to have a significant effect on the Company.

 

There were no other additional changes in the Group's accounting policies based on the effective application standards as of January 1, 2019 described above.

 

6) 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 consistently as those applied in the Financial Statements for the year ended December 31, 2018.

 

 10 

 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Condensed Consolidated Interim Financial Statements

At March 31, 2019 presented in comparative format (Contd.)

 

NOTE 3 - ACCOUNTING POLICIES (Contd.)

 

6) Estimates (Contd.)

 

The figures included in the financial statements were measured using its functional currency, that is, the currency of the primary economic environment in which the Company operates. The functional currency of the Company is the Argentine peso, which is coincident with the presentation currency of the financial statements.

 

7) Foreign currency translation

 

Functional and presentation currency

 

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 reporting date of the reporting period, regardless of whether they are based on the historical cost method or the current cost method. For this, in general terms, 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 correspond to the comparative information of these Consolidated financial statements.

 

In order to conclude on whether an economy is categorized as hyperinflationary under the terms of IAS 29, the standard details a series of factors to be considered, including the existence of a cumulative inflation rate in three years that approximates or exceed 100%. Taking into account a significant increase in inflation during 2018, which in addition to the accumulated inflation rate of the last three years exceeds 100% and the rest of the indicators do not contradict the conclusion that Argentina should be considered as a hyperinflationary economy for accounting purposes, the Company 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. It is for this reason that, in accordance with the NIC 29, these Condensed Consolidated Interim Financial Statements are restated reflecting the effects of inflation in accordance with the provisions of the standard.

 

In turn, Law No. 27,468 (BO 04/12/2018) amended Article 10 of Law No. 23,928 and its amendments, establishing that the repeal of all legal norms or regulations that establish or authorize indexation by prices, monetary update, variation of costs or any other form of repowering of debts, taxes, prices or rates of goods, works or services, does not include financial statements, in respect of which the provisions of the article 62 in fine of the General Law of Companies No. 19,550 (TO 1984) and its amendments will be applied. Also, the aforementioned legal body ordered the repeal of Decree No. 1269/2002 of July 16, 2002 and its amendments and delegated to the National Executive Power (PEN), through its controlling entities, to establish the date from the which the provisions cited in relation to the financial statements presented will have effect.

 

 11 

 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Condensed Consolidated Interim Financial Statements

At March 31, 2019 presented in comparative format (Contd.)

 

NOTE 3 - ACCOUNTING POLICIES (Contd.)

 

7) Foreign currency translation (Contd.)

 

Functional and presentation currency (Contd.)

 

Therefore, through its General Resolution 777/2018 (BO 28/12/2018), the National Securities Commission (CNV) established that issuers subject to its control should apply to the annual financial statements, for interim and special periods, that close as of December 31, 2018 inclusive, the method of restating financial statements in a homogeneous currency as established by IAS 29.

 

In accordance with IAS 29, the financial statements of an entity reporting in the currency of a high inflation economy must be reported in terms of the unit of measurement in effect at the date of the financial statements. All amounts in the statement of financial position that are not indicated in terms of the current unit of measurement as of the date of the financial statements should be updated by applying a general price index. All the components of the income statement should be indicated in terms of the unit of measure updated as of the date of the financial statements, applying the change in the general price index that has occurred since the date on which the income and expenses were originally recognized. in the financial statements.

 

The adjustment for inflation in the initial balances was calculated considering the indexes established by the FACPCE based on the price indexes published by the National Institute of Statistics and Censuses (INDEC for the acronym in Spanish). The quarterly index for the period ended March 31, 2019 was 1.1178; likewise, the inter-annual index for the period from March 31, 2018 to March 31, 2019 was 1.5473.

 

Inflation adjustment

 

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 re-expression 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 re-expressed. The remaining non-monetary assets and liabilities will be re-expressed by a general price index. The loss or gain from the net monetary position will be included in the comprehensive net result of the reporting period, revealing this information in a separate line item.

 

 12 

 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Condensed Consolidated Interim Financial Statements

At March 31, 2019 presented in comparative format (Contd.)

 

NOTE 3 - ACCOUNTING POLICIES (Contd.)

 

7) Foreign currency translation (Contd.)

 

Inflation adjustment (Contd.)

 

The following is a summary of the methodology used for the preparation of these Consolidated Financial Statements:

 

-Non-monetary assets and liabilities: non-monetary assets and liabilities (property, plant and equipment, intangible assets, deferred profits and additional allowances) have been updated by the adjustment coefficients corresponding at the date of acquisition or origin of each of them, as applicable. The income tax derived has been calculated based on the restated value of these assets and liabilities;

 

-Monetary assets and liabilities, and monetary position result: monetary assets and liabilities, including balances in foreign currency, by their nature, are presented in terms of purchasing power as of March 31, 2019. The financial result generated by the net monetary position reflects the loss or gain that is obtained by maintaining an active or passive net monetary position in an inflationary period, respectively and is exposed in the line of "Result from exposure to changes in the purchasing power of the currency" (RECPAM, for the acronym in Spanish) in the Statement of Comprehensive Income;

 

-Equity: the net equity accounts are expressed in constant currency as of March 31, 2019, applying the corresponding adjustment coefficients at their dates of contribution or origin;

 

-Results: the items of the Statements of Comprehensive Income have been restated based on the date on which they accrued or were incurred, with the exception of those associated with non-monetary items (depreciation and amortization expenses), which are presented as a function of the update of the non-monetary items to which they are associated, expressed in constant currency as of March 31, 2019, through the application of the relevant conversion factors.

 

The comparative figures have been adjusted for inflation following the same procedure explained in the preceding points.

 

In the initial application of the adjustment for inflation, the equity accounts were restated as follows:

 

-The capital was restated from the date of subscription or from the date of the last adjustment for accounting inflation, whichever happened later. The resulting amount was incorporated into the "Capital adjustment" account

 

-The other result reserves were not restated in the initial application

 

 13 

 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Condensed Consolidated Interim Financial Statements

At March 31, 2019 presented in comparative format (Contd.)

 

NOTE 3 - ACCOUNTING POLICIES (Contd.)

 

7) Foreign currency translation (Contd.)

 

Inflation adjustment (Contd.)

 

With respect to the evolution notes of non-monetary items for the year, the balance at the beginning includes the adjustment for inflation derived from expressing the initial balance to the currency of current purchasing power.

 

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 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.

 

8) 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.

 

9) Income and deferred tax - Tax Revaluation

 

The charge for income tax in the year 2019 was $ 489 million, including a charge for current tax of $ 877 million that was mostly offset by a deferred tax income. During the year, the Company adhered to the tax revaluation of Law No. 27,430, generating a deferred tax income of $ 1,615 million, as well as a higher current tax of $ 517 million.

 

 14 

 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Condensed Consolidated Interim Financial Statements

At March 31, 2019 presented in comparative format (Contd.)

 

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

 

CONSOLIDATED STATEMENTS OF FINANCIAL
POSITION
  03.31.19   12.31.18 
    $ 
Cash and cash equivalents          
Cash and funds in custody   79,650,278    79,885,783 
Banks   3,704,039,244    3,277,340,163 
Checks not yet deposited   20,160,823    27,456,123 
Time deposits   913,968,074    1,025,364,155 
    4,717,818,419    4,410,046,224 
Trade receivables, net          
Trade receivables   3,075,415,912    2,873,105,388 
Related parties (Note 7)   42,104,504    52,303,872 
Checks-postdated checks   27,687,987    38,111,340 
Provision for bad debts (Note 8)   (386,371,405)   (359,127,868)
    2,758,836,998    2,604,392,732 
Other current receivables          
Expenses to be recovered   21,163,335    24,296,666 
Guarantees granted   5,700,910    6,171,172 
Related parties (Note 7)   6,418,575    7,174,566 
Tax credits   932,240,039    1,104,501,528 
Prepaid Insurance   17,135,669    31,252,612 
Other   4,181,272    5,160,508 
    986,839,800    1,178,557,052 
           
Other non-current receivables          
Tax credits   545,200    843,050 
Trust for Strengthening (Note 7)   4,406,724,938    4,526,320,914 
    4,407,270,138    4,527,163,964 
           
Accounts payable and other current          
Obligations payable   104,346,854    46,414,290 
Suppliers   1,791,677,733    2,093,076,216 
Foreign suppliers   46,499,361    79,833,640 
Related Parties (Note 7)   113,294,176    157,830,272 
Salaries and social security liabilities   762,343,196    918,082,406 
Other fiscal liabilities   195,813,582    164,706,188 
    3,013,974,902    3,459,943,012 

 

 15 

 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Condensed Consolidated Interim Financial Statements

At March 31, 2019 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  03.31.19   03.31.18 
POSITION (Contd.)  $ 
Accounts payable and other non-current          
Tax liabilities   78,628,939    98,358,770 
    78,628,939    98,358,770 

 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION   03.31.19    03.31.18 
   $ 
Revenues     
Aeronautical revenues   4,536,746,746    3,762,703,626 
Non-Aeronautical revenues   2,579,815,784    2,548,721,672 
    7,116,562,530    6,311,425,298 

 

As of March 31, 2019 and 2018, "over the time" income from contracts with customers was $6,099,129,192 and $5,294,473,412, respectively.

 

   03.31.19   03.31.18 
  $ 
Other net incomes and expenses    
Trust for Strengthening   176,430,576    156,652,221 
Other   (543,208)   (12,158,046)
    175,887,368    144,494,175 
Financial Income          
Interest   354,987,846    25,603,797 
Foreign Exchange differences   102,243,841    (73,777,428)
    457,231,687    (48,173,631)
Financial Expenses          
Interest   (323,701,998)   (232,505,407)
Foreign Exchange differences   (496,585,600)   155,668,879 
    (820,287,598)   (76,836,528)
    (363,055,911)   (125,010,159)
           
Income Tax          
Current   (877,406,823)   (522,235,255)
Deferred   1,366,486,718    (128,878,263)
    489,079,895    (651,113,518)

 

 16 

 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Condensed Consolidated Interim Financial Statements

At March 31, 2019 presented in comparative format (Contd.)

 

NOTE 5 – INTANGIBLE ASSETS

 

   03.31.19   03.31.18 
   $ 
Original Values          
Balance at January 1   55,717,398,782    48,460,082,918 
Acquisition   2,298,290,404    1,271,322,868 
Balance at March 31   58,015,689,186    49,731,405,786 
           
Accumulated Amortization          
Balance at January 1   (15,900,891,954)   (12,762,480,996)
Amortization of the period (Note 10)   (920,781,813)   (666,130,055)
Balance at March 31   (16,821,673,767)   (13,428,611,051)
Total net balance at March 31   41,194,015,419    36,302,794,735 

 

NOTE 6 – BORROWINGS

 

   03.31.19   12.31.18 
    $ 
Non-current          
Negotiable Obligations   15,172,500,000    15,275,884,848 
Finance lease liabilities   10,122,115    17,988,155 
Cost of issuance of Negotiable Obligations   (73,904,371)   (88,289,891)
Total Non-Current   15,108,717,744    15,205,583,112 
Current          
Negotiable Obligations   2,430,834,020    1,827,523,468 
Finance lease liabilities   44,536,930    54,258,897 
Cost of issuance of Negotiable Obligations   (10,557,767)   - 
Total Current   2,464,813,183    1,881,782,365 
Total   17,573,530,927    17,087,365,477 

 

Changes in borrowings:

 

   2019   2018 
   $ 
Balance at January 1   17,087,365,477    12,462,061,249 
New borrowings   761,787    18,956,096 
Payments of borrowings   (289,560,886)   (240,703,929)
Accrued interests   297,691,769    222,023,520 
Foreign Exchange differences   477,665,426    (168,687,343)
Inflation adjustment   (392,646)   311,726,972 
Net Balance at March 31   17,573,530,927    12,625,376,565 

 

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.

 

 17 

 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Condensed Consolidated Interim Financial Statements

At March 31, 2019 presented in comparative format (Contd.)

 

NOTE 6 - BORROWINGS (Contd.)

 

These negotiable obligations are guaranteed by a Trust under the Argentine Law, by which the Company has transferred and assigned use fees of international and regional airports and the Concession Indemnification Rights. This guarantee has been approved by the ORSNA on January 17, 2017, through Resolution Nº 1/2017, that resolved to “authorize the Concession (…) a collateral assignment of up to US$ 400,000,000 (…)”.

 

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

 

At March 31, 2019 the reasonable value of negotiable obligations issued in February 2017 is of $17,518,871,882. 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).

 

NOTE 7 - BALANCES AND TRANSACTIONS WITH RELATED PARTIES

 

Balances with other related companies at March 31, 2019 and December 31, 2018 are as follows:

 

   03.31.19   12.31.18 
   $ 
Trade receivables net- Current          
Other related companies   42,104,504    52,303,872 
    42,104,504    52,303,872 

 

Other current receivables          
Other related companies   6,418,575    7,174,566 
    6,418,575    7,174,566 
           
Accounts payable and other- Current          
Other related companies   113,294,176    157,830,272 
    113,294,176    157,830,272 
           
Provisions and other charges          
Other related companies   426,249    476,454 
    426,249    476,454 

 

 18 

 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Condensed Consolidated Interim Financial Statements

At March 31, 2019 presented in comparative format (Contd.)

 

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

 

During the three month periods ended March 31, 2019 and 2018 the Company has charged to the cost $45,408,469 and $24,318,322 respectively with Proden SA for management control services, financial assistance, internal audit, out sourcing of systems and technology and rental and maintenance of offices.

 

During the three-month periods ended March 31, 2019 and 2018 the Company has charged at cost $11,768,083 and $8,854,604, respectively with Servicios Integrales América for out sourcing of systems and technology.

 

During the three-month periods ended March 31, 2019 and 2018, the Company has charged with Helport S.A. to intangible assets $28,914,923 and $198,764,473 respectively and at cost $77,964,612 and $32,555,716 respectively

 

During the period ended at March 31, 2018, $73,907,633 of dividends have been paid to the shareholders according to their shareholding.

 

At March 31, 2019 and December 31, 2018 the Company owed the Argentine National Government $356,875,211 and $363,508,457 respectively, corresponding to the specific allocation of revenues of each year (see Note 10) and has recorded a receivable for $4,406,724,938 and $4,526,320,914 respectively corresponding to the Development Trust to fund the infrastructure works of AA2000.

 

Furthermore, short-term compensation to key management was $12,052,992 and $18,298,372 for the three month periods ended at March 31, 2019 and 2018 respectively.

 

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

 

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

 

 19 

 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Condensed Consolidated Interim Financial Statements

At March 31, 2019 presented in comparative format (Contd.)

 

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

 

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 and at the same time it is controlled a 100% by Corporación America Airport S.A.

 

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

 

NOTE 8 – BAD DEBT PROVISIONS

 

   2019   2018 
   $ 
Initial balance at January 1   359,127,868    255,438,666 
IRFS 9 adjustments at the beginning   -    (118,944,663)
Balance at January 1   359,127,868    136,494,003 
Increases (*)   138,924,486    6,839,652 
Applications   (69,302,602)   - 
Inflation adjustment   (42,378,347)   (9,204,421)
Final Balance at March 31   386,371,405    134,129,234 

 

(*) As of March 31, 2019 and 2018 includes $87,448,733 and $6,839,652 respectively in Distribution and Commercialization Expenses (Note 10) and $51,475,753 in Exchange Difference (Note 4).

 

 20 

 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Condensed Consolidated Interim Financial Statements

At March 31, 2019 presented in comparative format (Contd.)

 

NOTE 9 - PROVISIONS AND OTHER CHARGES

 

   Litigation   Related Parties
(Note 7)
   Deferred Income   Trust for works-
Portfolio of
Projects 2012/2014
(Note 1.2)
   Guarantees
Received
   Upfront fees
from
Concessionaires-
   Dividends to
be paid
(Note 7)
   Total 
                                 
At January 1, 2019   74,418,169    476,453    157,950,323    167,556,933    54,098,278    146,114,985    -    600,615,141 
Increases   2,031,950    -    125,936,488    563,180,970    31,517,902    10,223,988    -    732,891,298 
Decreases   (1,975,806)   -    -    (537,221,114)   (17,244,163)   -    -    (556,441,083)
Inflation adjustment   (7,851,469)   (50,204)   -    (18,545,818)   307,935    -         (26,139,556)
Accruals   -    -    (78,282,941)   -    -    (9,037,055)   -    (87,319,996)
At March 31, 2019   66,622,844    426,249    205,603,870    174,970,971    68,679,952    147,301,918    -    663,605,804 
                                         
Total current at 03.31.2019   64,016,076    426,249    176,086,802    174,970,971    68,679,952    31,182,903    -    515,362,953 
Total Non current at 03.31.2019   2,606,768    -    29,517,068    -    -    116,119,015         148,242,851 
                                         
At January 1, 2018   96,227,205    703,463    180,564,480    123,799,654    51,333,923    182,332,450    404,337,088    1,039,298,263 
Increases   7,668,167    -    26,040,105    230,966,294    16,363,800    5,422,745    -    286,461,111 
Decreases   -    -    -    (222,703,228)   (847,453)   -    (73,907,633)   (297,458,314)
Inflation adjustment   (6,183,422)   (43,917)   -    (2,365,174)   (5,545,893)   -    (28,701,392)   (42,839,798)
Accruals   -    -    (49,435,670)   -    -    (11,076,780)   -    (60,512,450)
At March 31, 2018   97,711,950    659,546    157,168,915    129,697,546    61,304,377    176,678,415    301,728,063    924,948,812 
                                         
Total current at 03.31.2018   95,484,784    659,546    117,494,482    129,697,546    61,304,377    40,411,127    301,728,063    746,779,925 
Total Non current at 03.31.2018   2,227,166    -    39,674,433    -    -    136,267,288    -    178,168,887 

 

 21 

 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Condensed Consolidated Interim Financial Statements

At March 31, 2019 presented in comparative format (Contd.)

 

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

 

   Cost of sales   Administrative
expenses
   Distribution and
selling expenses
   Total 
   $ 
Item    
Three month period ended at 03.31.19    
Specific allocation of revenues   1,058,583,456    -    -    1,058,583,456 
Airport services and maintenance   839,520,255    3,454,051    58,308    843,032,614 
Amortization of intangible assets   896,236,412    23,846,069    699,332    920,781,813 
Depreciation of property, plant and equipment   2,263,762    -    -    2,263,762 
Salaries and social security contributions   884,632,803    135,609,739    12,097,409    1,032,339,951 
Fees for services   57,220,013    26,664,541    5,529,395    89,413,949 
Public utilities and contributions   139,467,329    988,850    820,393    141,276,572 
Taxes   36,752,926    56,236,069    343,001,110    435,990,105 
Office expenses   129,325,860    28,630,747    974,972    158,931,579 
Insurance   15,237,469    559,330    -    15,796,799 
Advertising expenses   -    -    3,868,972    3,868,972 
Bad debts charges   -    -    87,448,733    87,448,733 
Board of Directors and Supervisory Committee fees   -    5,061,376    -    5,061,376 
Amortization right of use   27,752,700    -    -    27,752,700 
Other   3,924,760    1,291,678    1,328    5,217,766 
Total at 03.31.19   4,090,917,745    282,342,450    454,499,952    4,827,760,147 
                     
Three month period ended at 03.31.18                    
Specific allocation of revenues   939,913,326    -    -    939,913,326 
Airport Services and maintenance   864,636,387    10,869,172    4,992,863    880,498,422 
Amortization of intangible assets   658,093,883    6,785,204    1,250,968    666,130,055 
Depreciation of property, plant and equipment   2,496,762    -    -    2,496,762 
Salaries and social security contributions   790,625,508    117,224,449    29,053,976    936,903,933 
Fees for services   21,226,210    16,278,708    4,046,815    41,551,733 
Public utilities and contributions   142,402,067    999,949    538,284    143,940,300 
Taxes   25,603,967    67,540,542    332,002,790    425,147,299 
Office expenses   51,659,079    98,490,982    2,703,713    152,853,774 
Insurance   16,806,155    1,070,960    -    17,877,115 
Advertising expenses   -    -    12,240,773    12,240,773 
Bad debts charges   -    -    6,839,652    6,839,652 
Board of Directors and Supervisory Committee fees   -    5,451,375    -    5,451,375 
Other   3,114,315    2,066,663    83,580    5,264,558 
Total at 03.31.18   3,516,577,659    326,778,004    393,753,414    4,237,109,077 

 

 22 

 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Condensed Consolidated Interim Financial Statements

At March 31, 2019 presented in comparative format (Contd.)

 

NOTE 11- FOREIGN CURRENCY ASSETS AND LIABILITIES

 

Item  Foreign currency type and
amount at 03.31.19
  Foreign
exchange
rates
   Amount in local
currency at
03.31.19
   Amount in local
currency at
12.31.18
 
             $ 
ASSSETS                      
CURRENT ASSETS                      
Cash and cash equivalents  US$   91,669,003   43.1500    3,955,517,494    3,298,437,287 
Trade receivables  US$   58,827,928   43.1500    2,538,425,097    2,082,558,196 
Investments  US$   -   -    -    208,488,960 
Total current assets               6,493,942,591    5,589,484,443 
Total assets               6,493,942,591    5,589,484,443 
LIABILITIES                      
CURRENT LIABILITIES                      
Commercial accounts payable and others  US$   9,224,212   43.3500    399,869,610    408,015,799 
   Euros   1,691,933   48.7081    82,414,052    79,799,060 
Borrowings  US$   55,142,337   43.3500    2,390,420,300    1,805,159,985 
Total current liabilities               2,872,703,962    2,292,974,844 
                       
NON-CURRENT LIABILITIES                      
Borrowings  US$   350,000,000   43.3500    15,172,500,000    15,277,916,687 
Total non- current liabilities               15,172,500,000    15,277,916,687 
Total liabilities               18,045,203,962    17,570,891,531 
Net liability position               11,551,261,371    11,981,407,088 

 

 23 

 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Condensed Consolidated Interim Financial Statements

At March 31, 2019 presented in comparative format (Contd.)

 

NOTE 12 - OTHER RESTRICTED ASSETS

 

Other than what is mentioned in Note 1 and 6, other receivables in current assets at March 31, 2019 and 2018 include $5,520,910 and $8,063,518 corresponding to guarantees granted to third parties in connection with lease agreements.

 

NOTE 13 - CAPITAL STOCK

 

At March 31, 2019 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.

 

Furthermore, 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).

 

NOTE 14 - CAPITAL STOCK AND SHARE PREMIUM

 

The preferential dividend accrued for the year ended December 31, 2018 is $12,585,053. The ordinary, special general meeting of shares classes A, B, C and D and special of preferred shares held on April 9, 2019 resolved not to address the agenda item referred to the purpose of the result for the year 2018, for which purpose a new assembly will be called.

 

Likewise, the preferential dividend accrued for the three-month period ended March 31, 2019 is $3,209,188 and will be recorded at the time of its approval by the Shareholders' Meeting.

 

 24 

 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Condensed Consolidated Interim Financial Statements

At March 31, 2019 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 9, 2018 AND APRIL 30, 2019

 

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:

 

(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.

 

The general ordinary and special meeting of class A, B, C and D and special of preferred shares held on April 30, 2019 resolved not to address the agenda item referred to the purpose of the result for the year 2018, for which purpose a new assembly will be called.

 

NOTE 16 - EARNINGS PER SHARE

 

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

 

   03.31.2019   03.31.2018 
Income for the year, net accrued dividends   2,177,229,370    1,015,033,734 
Amount of ordinary shares   258,517,299    258,517,299 
Earnings per shares   8.4220    3.9264 

 

 25 

 

 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Condensed Consolidated Interim Financial Statements

At March 31, 2019 presented in comparative format (Contd.)

 

NOTE 17- FINANCIAL RISK MANAGEMENT

 

The Company 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 Individual Interim Financial Statements do not include all the information on financial risk management requested in the annual financial statements, thus they should be read together with the financial statements audited at December 31, 2018.

 

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

 

 26 

 

 

Aeropuertos Argentina 2000 S.A.

Condensed Consolidated Interim Financial Statements

At March 31, 2019 presented in comparative format

Summary of Information required by Resolution N ° 368/01

of the National Securities Commission

 

Presentation base

 

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

 

In compliance with the provisions of the CNV regulations, the values for 2019 and 2018 of this informative report are expressed in constant currency as of March 31, 2019, in accordance with International Accounting Standard N °. 29 "Financial information in hyperinflationary economies". For more information, see Note 3.7 to the Condensed Consolidated Interim Financial Statements as of March 31, 2019.

 

1. General considerations

 

International Financial Reporting Standards (IFRS)

 

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

 

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

 

· Seasonality

 

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

 

The main works carried out during the quarter ended March 31, 2019 are detailed below:

 

Ezeiza International Airport:

 

Works in execution:

- New Control Tower. (Project and supervision of AA2000);

- Beacon ring and main electrical substation;

- Improved Lighting in Access to Waste Area;

- Building of Departures - Hall B. The metallic structure of the building and the Zeppelin, Roof and Courtain Wall, glass and BHS, as well as the Civil Works and installations are in execution;

- The work of Functional Reorganization of the GF in Terminal A is being executed;

 

 27 

 

 

Aeropuertos Argentina 2000 S.A.

Condensed Consolidated Interim Financial Statements

At March 31, 2019 presented in comparative format

Summary of Information required by Resolution N ° 368/01

of the National Securities Commission

 

1. General considerations (Contd.)

 

Ezeiza International Airport (Contd.):

- Multilevel parking;

- Start of the work of the Road System - Stage 1;

- New Running Parallel to Header 35

 

Jorge Newbery Airport:

 

Works in execution:

- External works - sidewalks - landscaping - coastal filling and underground parking;

- Demolition Terminal C (Necessary to be able to execute the first Stage of the New North Platform);

- New beacon substations and control systems;

- Platform and Perimeter Path Lighting.

 

Works Completed:

- Expansion of Southern and Industrial Platforms

 

Comodoro Rivadavia Airport:

 

The following works are being executed:

- New Passenger Terminal of 7560 m2, entering the final stage;

- New parking.

 

Works started:

- Rehabilitation of track, taxi and platform;

- New Beaconing.

 

Córdoba Airport:

 

The work of the airport entrance station finished.

 

Works in execution:

- Expansion of the parking lot;

- Rehabilitation of runway 18-36 and track marking.

 

Iguazú Airport:

 

The following works are in execution:

- Remodeling and expansion of the passenger terminal;

- New Parking;

- Track resurfacing and rehabilitation filming, in the final stage;

- Track Beacon and New vertical signage posters in movement area;

- Expansion of the commercial platform.

 

 28 

 

 

Aeropuertos Argentina 2000 S.A.

Condensed Consolidated Interim Financial Statements

At March 31, 2019 presented in comparative format

Summary of Information required by Resolution N ° 368/01

of the National Securities Commission

 

1. General considerations (Contd.)

 

Bariloche Airport:

 

The refurbishment work of the terminal planned to end in the next winter season is underway.

 

Tucumán Airport:

 

A project is being developed for the new Tucumán terminal.

 

San Fernando Airport:

 

Works in execution:

- New Control Tower;

- RACA demolition;

- Work on Sewer and Storm Infrastructure Stage 1.

 

San Juan Airport:

 

Works in execution

- Remodeling of the passenger terminal;

- Rehabilitation of the track.

 

Salta Airport:

 

Work is underway to expand the Shipping and Control Areas.

 

La Rioja Airport:

 

The work of the New Passenger Terminal is in execution.

 

Mar del Plata Airport:

 

The work of the Passenger Terminal Refunctioning is in execution.

 

Esquel Airport:

 

The comprehensive remodeling of the passenger terminal is about to begin.

 

El Palomar Airport:

 

Work is underway on the new terminal in Hangars 1 and 2 - Stage 1

 

 29 

 

 

Aeropuertos Argentina 2000 S.A.

Condensed Consolidated Interim Financial Statements

At March 31, 2019 presented in comparative format

Summary of Information required by Resolution N ° 368/01

of the National Securities Commission

 

1. General considerations (Contd.)

 

Jujuy Airport:

 

Works in execution:

- Complete remodeling of the passenger terminal.

- New Parking and Roads.

- New Control Tower.

- Expansion of the Commercial Platform.

 

Master Plans:

 

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

 

2. Equity structure

 

In order to appreciate the evolution of the Company's activities, the comparative consolidated equity structure of the financial statements as of March 31, 2019, 2018, 2017, 2016 and 2015 respectively, is presented.

 

   03.31.19   03.31.18   03.31.17(*)  03.31.16(*)  03.31.15(*)
    Thousands $ 
Current Asset   8,472,952    6,623,333    5,383,071    1,409,890    991,950 
Non-current Assets   45,834,511    40,496,275    9,528,272    6,727,566    5,447,187 
Total Assets   54,307,463    47,119,608    14,911,343    8,137,456    6,439,137 
                          
Current liabilities   6,895,617    4,249,999    2,722,221    2,092,111    1,580,648 
Non- Current Liabilities   19,803,582    17,573,251    6,411,245    2,859,957    2,157,514 
Total Liabilities   26,699,199    21,823,250    9,133,466    4,952,068    3,738,162 
    27,590,444    25,283,893    5,768,602    3,178,309    2,697,474 
Net equity attributable to majority shareholders   17,820    12,465    9,275    7,079    3,501 
Non-controlling interest   27,608,264    25,296,358    5,777,877    3,185,388    2,700,975 
Net Equity   54,307,463    47,119,608    14,911,343    8,137,456    6,439,137 

 

(*) Amounts not restated per inflation as per General Resolution 777/2018.

 

 30 

 

 

Aeropuertos Argentina 2000 S.A.

Condensed Consolidated Interim Financial Statements

At March 31, 2019 presented in comparative format

Summary of Information required by Resolution N ° 368/01

of the National Securities Commission

 

3. Results structure

 

The following is a summary of the evolution of the consolidated statements of comprehensive income for the three month periods ended at March 31, 2019, 2018, 2017, 2016 and 2015.

 

   03.31.19   03.31.18   03.31.17(*)  03.31.16(*)  03.31.15(*)
   Thousands $ 
Gross Profit   3,027,426    2,796,962    1,486,981    1,021,340    623,381 
Administrative and distribution and marketing expenses   (736,842)   (720,531)   (352,938)   (268,033)   (165,367)
Other net income and expenses   175,887    144,494    72,590    54,013    32,757 
Operating profit   2,466,471    2,220,925    1,206,633    807,320    490,771 
Income and financial costs   (363,056)   (125,010)   (67,256)   (403,464)   (130,575)
Result by exposure to changes in the acquisition power of currency   (411,625)   (429,741)               
Result of investments accounted for using the equity method   -    -    -    -    (56)
Income before tax   1,691,790    1,666,174    1,139,377    403,856    360,140 
Income tax   489,080    (651,114)   (295,314)   (140,000)   (122,623)
Result of the year   2,180,870    1,015,060    844,063    263,856    237,517 
Other comprehensive incomes   -    -    -    -    - 
Comprehensive income for the year   2,180,870    1,015,060    844,063    263,856    237,517 
Result attributable to majority shareholders   2,180,439    1,018,180    843,120    261,918    237,299 
Non-controlling interest   431    (3,120)   943    1,938    218 

 

(*) Amounts not restated per inflation as per General Resolution 777/2018.

 

4. Cash flow structure

 

   03.31.19   03.31.18   03.31.17(*)  03.31.16(*)  03.31.15(*)
Cash Flows (used in) / generated by operating activities   (55,031)   543,363    208,087    392,576    136,284 
Cash Flow generated by / (used in) investing activities   202,451    (51)   (1,425)   (135)   (638)
Cash Flow (used in) / generated by financing activities   (317,113)   (314,612)   3,541,136    (308,689)   (168,845)
Net Cash Flow (used in) / generated by the period   (169,693)   228,700    3,747,798    83,752    (33,199)

 

(*) Amounts not restated per inflation as per General Resolution 777/2018.

 

 31 

 

 

Aeropuertos Argentina 2000 S.A.

Condensed Consolidated Interim Financial Statements

At March 31, 2019 presented in comparative format

Summary of Information required by Resolution N ° 368/01

of the National Securities Commission

 

5. Analysis of operations for the three month periods ended at March 31, 2019 and 2018

 

Results of operations

 

·Income

 

The following table shows the composition of consolidated revenues for the three month periods ended at March 31, 2019 and 2018:

 

Revenues  03.31.19   %
revenues
   03.31.18   %
revenues
 
   Thousands $       Thousands $     
Aeronautical revenues   4,536,747    63.75%   3,762,703    59.62%
Non-aeronautical revenues   2,579,816    36.25%   2,548,722    40.38%
Total   7,116,563    100.00%   6,311,425    100.00%

 

The following table shows the composition of the aeronautical revenues for the three month periods ended at March 31, 2019 and 2018:

 

Aeronautical revenues  03. 31.19   %
revenues
   03. 31.18   %
revenues
 
   Thousands $       Thousands $     
Landing fee   403,522    8.89%   305,124    8.11%
Parking fee   160,460    3.54%   124,688    3.31%
Air station use rate   3,972,765    87.57%   3,332,891    88.58%
Total   4,536,747    100.00%   3,762,703    100.00%

 

Costs of sale

 

The cost of sales had the following variation:

 

   Thousands $ 
Costs of sales for the period ended at 03.31.19   4,090,918 
Costs of sales for the period ended at 03.31.18   3,516,578 
Variation   574,340 

 

 32 

 

 

Aeropuertos Argentina 2000 S.A.

Condensed Consolidated Interim Financial Statements

At March 31, 2019 presented in comparative format

Summary of Information required by Resolution N ° 368/01

of the National Securities Commission

 

5. Analysis of operations in the three month periods ended at March 31, 2019 and 2018 (Contd.)

 

Administrative Expenses

 

The administrative expenses had the following variation:

 

   Thousands $ 
Administrative expenses for the period ended at 03.31.19   282,342 
Administrative expenses for the year ended at 03.31.18   326,778 
Variation   (44,436)

 

Distribution and marketing expenses

 

The distribution and marketing expenses had the following variation:

 

   Thousands $ 
Distribution and commercial expenses for the period ended at 03.31.19   454,500 
Distribution and commercial expenses for the period ended at 03.31.18   393,753 
Variation   60,747 

 

Income and financial costs

 

Net financial income and costs totaled a loss of $363,056 thousand during the period ended at March 31, 2019 with respect to thousands of $125,010 loss during 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 an income of approximately $175,887 thousand during the period ended at March 31, 2019 with respect to an income of $144,494 thousand in the previous year.

 

Liquidity and Capital Resources

 

Capitalization

 

The total capitalization of the Company as of March 31, 2019 amounted to $45,181,795 thousand composed of thousands of $17,573,531 of borrowings and a net equity worth of $27,608,264 thousand, while the total capitalization of the Company at March 31, 2018 amounted to thousands of $37,921,736 comprised of thousands of $12,625,377 of borrowings and a net equity worth of thousands of $25,296,359.

 

The debt as a percentage of total capitalization amounted to approximately 38.90% as of March 31, 2019 and 33.29% as of March 31, 2018.

 

 33 

 

 

Aeropuertos Argentina 2000 S.A.

Condensed Consolidated Interim Financial Statements

At March 31, 2019 presented in comparative format

Summary of Information required by Resolution N ° 368/01

of the National Securities Commission

 

5. Analysis of operations in the three month periods ended at March 31, 2019 and 2018 (Contd.)

 

Financing

 

See in detail Note 6 to these Condensed Consolidated Interim Financial Statements.

 

6. Index

 

The information refers to the periods ended at March 31, 2019, 2018, 2017, 2016 and 2015:

 

   03.31.19   03.31.18   03.31.17(*)  03.31.16(*)  03.31.15(*)
Liquidity (*)   1.26    1.61    2.03    0.69    0.64 
Solvency (**)   1.04    1.17    0.64    0.66    0.74 
Immobilization of capital   0.84    0.86    0.64    0.83    0.85 
Cost effectiveness   0.08    0.04    2.03    0.69    0.64 

 

(*) Amounts not restated per inflation as per General Resolution 777/2018.

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

 

7. Statistical data

 

The information detailed below is based on extra-budgetary statistics compiled by the Company. Number of passengers (in thousands) for the three month periods ended at March 31, 2019, 2018, 2017, 2016 and 2015:

 

Airport  03.31.19   03.31.18   03.31.17   03.31.16   03.31.15 
   In thousands 
Aeroparque   3,482    3,683    3,353    2,928    2,763 
Ezeiza   2,939    2,807    2,666    2,639    2,264 
Córdoba   947    874    687    551    447 
Mendoza   579    442    407    357    308 
Bariloche   430    373    328    313    272 
Iguazú   385    298    268    235    221 
El Palomar   362    26    -    -    - 
Salta   325    286    270    235    208 
Tucumán   239    219    169    159    131 
C. Rivadavia   169    157    141    138    126 
Total   9,857    9,165    8,289    7,555    6,740 
Overall total   10,609    9,921    8,929    8,111    7,225 
Variation   6.9%   11.1%   10.0%   12.3%   5.4%

 

 34 

 

 

Aeropuertos Argentina 2000 S.A.

Condensed Consolidated Interim Financial Statements

At March 31, 2019 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 the three month periods ended at March 31, 2019, 2018, 2017, 2016 and 2015 of the ten airports that represent more than 80% of the total movements of the airport system:

 

Airport  03.31.19   03.31.18   03.31.17   03.31.16   03.31.15 
Aeroparque   31,738    34,123    32,788    29,234    30,109 
Ezeiza   20,800    18,517    17,243    17,872    16,091 
San Fernando   10,422    11,588    8,835    10,373    9,782 
Córdoba   8,845    8,204    6,724    5,652    4,792 
Mendoza   5,761    4,726    4,508    3,984    3,533 
Bariloche   3,675    3,464    3,252    3,045    2,670 
Salta   3,291    3,100    3,703    2,530    2,994 
Iguazú   3,201    2,613    2,450    2,114    2,045 
El Palomar   2,697    369    -    -    - 
C. Rivadavia   2,547    2,432    1,920    2,024    2,051 
Total   92,977    89,136    81,423    76,828    74,067 
Overall total   111,215    108,169    99,478    93,472    90,446 
Variation   2.82%   8.74%   6.40%   3.30%   0.20%

 

 35 

 

 

Aeropuertos Argentina 2000 S.A.

Condensed Consolidated Interim Financial Statements

At March 31, 2019 presented in comparative format

Summary of Information required by Resolution N ° 368/01

of the National Securities Commission

 

Perspectives for 2019

 

In the first quarter of this year the passenger traffic of the company has had a very good evolution reaching 10.6 million, of which 6.9 million were domestic passengers and 3.7 million were international passengers, with growth of 15, 4% in domestic and a fall of 6.0% in international compared to the previous year. In total, passenger traffic grew 6.9% compared to the first quarter of the previous year.

 

This evolution is part of the National Government's plans to favor the increase in passenger traffic with significant improvement in air connectivity throughout the country, consolidating the recovery of foreign tourists, reaching record level in the three-month period.

 

The outstanding evolution of passengers was also accompanied by a significant growth in investments in infrastructure works both on runways and terminals at airports in the interior of the country and also in the metropolitan area of Buenos Aires. During the first quarter of this year, the Company presented investments to ORSNA for $1,997 million. To this amount it must be added the payments to the trusts of specific allocation for works for $667 million.

 

It should be noted that, after the jump in the exchange rate that occurred in June 2018, international traffic began to decline, while domestic traffic accelerated the growth that had been evident in the first months of the year. 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.

 

 36 

 

 

REPORT ON REVIEW OF CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

 

To the Shareholders, Chairman and Directors of

Aeropuertos Argentina 2000 S.A.

Legal address: Honduras 5663

Autonomous City of Buenos Aires

Tax Code: 30-69617058-0

 

Introduction

 

We have reviewed the accompanying condensed consolidated interim financial statements of Aeropuertos Argentina 2000 S.A. and its subsidiaries ("the Company"), including the consolidated statement of financial position as at March 31, 2019, the consolidated statement of comprehensive income for three months period ended March 31, 2019 and the consolidated statements of changes in shareholders' equity and of cash flows for the three-month period then ended and the selected explanatory notes.

 

The balances and other information for the year 2018 and for the interim periods are an integral part of these financial statements and, therefore, they should be considered in relation to those financial statements.

 

Board Responsibility

 

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

 

Scope of review

 

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

 

 

 

 

Conclusion

 

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

 

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. are in process of being transcribed into the “Inventory and Balance Sheet” book;

 

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 summary of information, about which, insofar as concerns our area of competence, we have no significant observations to make;

 

d)as of March 31, 2019, Aeropuertos Argentina 2000’s accrued debt with the Argentine Social Security System, which stems from the accounting records, amounted to $92,852,751, which was not yet due at that date.

 

Autonomous City of Buenos Aires, May 8, 2019.

 

PRICE WATERHOUSE & CO. S.R.L.

 

by (Partner)  
Miguel A. Urus  

 

 

 

 

 

SURVEILLANCE COMMITTEE REPORT

 

To the shareholders of

AEROPUERTOS ARGENTINA 2000 S.A.

 

In accordance with the requirements of the article 294 of Law 19,550 and the article 63 subsection b) of the BYMA Regulations (Argentine Stock and Market), we have reviewed the accompanying condensed consolidated interim financial statements of Aeropuertos Argentina 2000 S.A. and its subsidiaries, which includes the consolidated statement of financial position as of March 31, 2019, the consolidated statements of comprehensive income for the three-month period ended March 31, 2019, and the consolidated statements of changes in shareholders' equity and of cash flows for the three-month period ended March 31, 2019, the explanatory notes and the additional information required by the article 63 subsection a), paragraph 6 of the BYMA Regulations.

 

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

 

Our review was conducted in accordance with the supervisory existing standards. These standards require the verification of the consistency of the revised documents with the information on the corporate decisions established in the minutes and the adequacy of those decisions to the law and the by-laws regarding its formal and documentary aspects. In order to carry out our professional work, we have taken into account the report on review of the external auditor, Miguel A. Urus (partner of Price Waterhouse & Co. SRL), dated May 8, 2019, who states that it has been issued in accordance with The International Standard on Review Engagements NIER 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.

 

We have not carried out any management control and, therefore, we have not evaluated the criteria and business decisions of administration, financing, marketing or production, since these issues are the sole responsibility of the board of directors.

 

Based on our review, with the scope described above, we hereby inform that the condensed consolidated interim financial statements of Aeropuertos Argentina 2000 S.A. as of March 31, 2019 consider all significant events and circumstances that are known to us, they are in process of being established in the Inventory and Balance Book, they arise from the accounting records taken in their formal aspects in accordance with legal regulations and, in that sense, we have no observations to make.

 

In exercise of our legal supervision duties, during the period at issue, we performed the procedures set forth in Article 294 of Law 19,550 that we consider necessary in accordance with the circumstances, and in this respect, we have no observations to make.

 

Autonomous City of Buenos Aires, May 8th 2019.

 

     
  Patricio A. Martin  
  By Surveillance Committee  

 

 

(Back To Top)

Section 3: EX-99.2 (EXHIBIT 99.2)

 

Exhibit 99.2

 

Aeropuertos Argentina 2000 S.A.

 

Condensed Individual Interim Financial Statements

At March 31, 2019 presented in comparative format

 

 

 

 

Condensed Individual Interim Financial Statements

At March 31, 2019 presented in comparative format

 

Index  
   
Individual Statements of Comprehensive Income 2
Individual Statements of Financial Position 3
Individual Statements of Changes in Equity 4
Individual Statements of Cash Flows 5
Notes to the Condensed Individual Interim Financial Statements 6
Additional information required by Art. 12, chapter III, title IV of the National Securities Commission 26
Review Report
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: Honduras 5663 - Ciudad Autónoma de Buenos Aires
Principal activity: Exploitation, administration and operation of airports

 

Individual Financial Statements

For the three- month period of the

Fiscal Year N° 22 commenced January 1, 2019

 

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 Public Registry: 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    887,769,9391,652 

 

 1 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

 Statement of Comprehensive Income

For the three month periods ended at March 31, 2019 and 2018

 

   03.31.19   03.31.18 
   $ 
Continuous Operations          
Revenue (Note 3)   7,113,954,010    6,297,710,583 
IFRIC 12 - paragraph 14 Credit (Note 5)   2,298,290,404    1,271,322,868 
Cost of service (Note 10)   (4,105,759,488)   (3,509,737,978)
IFRIC 12 - paragraph 14 Debit   (2,296,509,229)   (1,269,208,987)
Gross Profit   3,009,975,697    2,790,086,486 
Distribution and selling expenses (Note 10)   (441,769,841)   (387,649,220)
Administrative expenses (Note 10)   (278,199,106)   (322,550,528)
Other income and expenses, net (Note 3)   175,763,778    147,431,142 
Operating profit   2,465,770,528    2,227,317,880 
           
Finance Income (Note 3)   443,712,599    (52,682,886)
Finance Costs (Note 3)   (818,850,377)   (75,535,853)
Result from exposure to changes in the purchasing power of the currency   (404,481,637)   (427,630,150)
Result of investments accounted for using the equity method
(Note 4)
   (504,278)   (3,712,197)
Income before Income Tax   1,685,646,835    1,667,756,794 
Income Tax (Note 3)   494,791,723    (649,576,797)
Income for the period for continuous operations   2,180,438,558    1,018,179,997 
Net Income for the period   2,180,438,558    1,018,179,997 
Other comprehensive income   -    - 
Comprehensive Income for the period   2,180,438,558    1,018,179,997 
           
Earnings per share basic and diluted attributable to shareholders of the Company during the period (shown in $ per share) from continuous operations   8.4220    3.9264 

 

The accompanying notes are an integral part of these Condensed Individual Interim Financial Statements and should be read together with the Individual Financial Statements audited for the year ended at December 31, 2018.

 

 2 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

 Statement of Financial Position

At March 31, 2019 and December 31, 2018

 

   03.31.19   12.31.18 
   $ 
Assets          
Non current Assets          
Investments accounted for by the equity method (Note 4)   107,735,055    108,239,333 
Intangible Assets (Note 5)   41,194,015,419    39,816,506,828 
Rights of use   170,824,083    - 
Other receivables (Note 3)   4,406,724,938    4,526,320,914 
Total Non- Current Assets   45,879,299,495    44,451,067,075 
Current Assets          
Investments   -    208,488,959 
Other receivables (Note 3)   962,475,955    1,152,430,100 
Trade receivables, net (Note 3)   2,748,794,656    2,594,537,390 
Cash and cash equivalents (Note 3)   4,614,315,319    4,332,700,918 
Total Current Assets   8,325,585,930    8,288,157,367 
Total Assets   54,204,885,425    52,739,224,442 
           
Shareholders’ Equity and Liabilities          
Equity attributable to Shareholders:          
Common shares   258,517,299    288,965,919 
Preferred shares   629,252,640    703,367,117 
Share Premium   137,280,595    153,449,744 
Adjustment of capital   8,076,892,213    7,956,159,967 
Legal and facultative reserve   9,665,556,681    9,665,556,681 
Retained earnings   8,822,944,531    6,642,505,973 
Total Sharehoders’ Equity   27,590,443,959    25,410,005,401 
           
Liabilities          
Non- Current Liabilities          
Accounts payable and others (Note 3)   78,416,631    98,139,826 
Borrowings (Note 6)   15,108,717,744    15,205,583,112 
Lease liabilities   62,644,323    - 
Deferred income tax liabilities   4,393,939,047    5,761,176,757 
Provisions and other charges (Note 9)   145,636,083    146,538,401 
Total Non- Current Liabilities   19,789,353,828    21,211,438,096 
Current Liabilities          
Fee payable to the Argentine National Government (Note 7)   356,875,211    363,508,457 
Accounts payable and others (Note 3)   2,959,067,188    3,425,462,312 
Income tax, net of prepayments   413,447,243    - 
Borrowings (Note 6)   2,464,813,183    1,881,782,365 
Lease liabilities   119,792,546    - 
Provisions and other charges (Note 9)   511,092,267    447,027,811 
Total Current Liabilities   6,825,087,638    6,117,780,945 
Total Liabilities   26,614,441,466    27,329,219,041 
Total Shareholders’ Equity and Liabilities   54,204,885,425    52,739,224,442 

 

The accompanying notes are an integral part of these Condensed Individual Interim Financial Statements and should be read together with the Individual Financial Statements audited for the year ended at December 31, 2018.

 

 3 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Individual Statements of Changes in Equity

At March 31, 2019 and 2018

 

   Attributable to majority equity shareholders of the Company 
   Capital Stock
Common
Shares
   Capital Stock
Preferred
Shares
   Share
Premium
   Adjustment of
capital
   Legal Reserve   Facultative
Reserve
   Retained
Earnings
   Total 
   $ 
Balance at 01.01. 19   258,517,299    629,252,640    137,280,595    8,076,892,213    351,808,374    9,313,748,307    6,642,505,973    25,410,005,401 
Net Income for the period   -    -    -         -    -    2,180,438,558    2,180,438,558 
Balance at 03.31.19   258,517,299    629,252,640    137,280,595    8,076,892,213    351,808,374    9,313,748,307    8,822,944,531    27,590,443,959 
                                         
Balance at 01.01. 18   258,517,299    616,914,353    137,280,595    8,070,139,180    400,922,966    5,411,803,120    9,280,927,214    24,176,504,727 
Adjustment IFRS 9   -    -    -    -    -    -    89,208,497    89,208,497 
Balance at 01.01.18 restated   258,517,299    616,914,353    137,280,595    8,070,139,180    400,922,966    5,411,803,120    9,370,135,711    24,265,713,224 
Net Income for the period   -    -    -    -    -    -    1,018,179,997    1,018,179,997 
Balance at 03.31.18   258,517,299    616,914,353    137,280,595    8,070,139,180    400,922,966    5,411,803,120    10,388,315,708    25,283,893,221 

 

The accompanying notes are an integral part of these Condensed Individual Interim Financial Statements and should be read together with the Individual Financial Statements audited for the year ended at December 31, 2018.

 

 4 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

 Individual Statements of Cash Flows

At March 31, 2019 and 2018

 

      03.31.19   03.31.18 
   Notes  $ 
Cash Flows from operating activities             
Net Income for the period      2,180,438,558    1,018,179,997 
Adjustments for:             
Amortization of intangible assets  5   920,781,813    666,130,055 
Depreciation right of use  10   27,752,700    - 
Specific allocation of accrued and unpaid income  7   356,875,211    302,774,846 
Income Tax  3   (494,791,723)   649,576,797 
Income of investments accounted for by the equity method  4   504,278    3,712,197 
Bad debts provision  8   85,033,807    6,582,376 
Accrued borrowing interest costs  6   297,691,769    222,023,520 
Accrued deferred revenues and additional considerations  9   (87,319,996)   (60,512,475)
Accrued exchange differences      379,359,339    (199,819,290)
Provision for litigation  9   1,791,310    4,563,405 
Adjustment effect for inflation      67,791,896    (653,054,544)
Changes in operating assets and liabilities:             
Changes in trade receivables      (512,680,002)   356,985,056 
Changes in other receivables      (288,825,398)   1,460,951,128 
Changes in accounts payable and others      (114,832,934)   (1,135,971,873)
Changes in liabilities for current income tax      (355,636,933)   (291,727,890)
Changes in provisions and other charges      189,490,850    3,445,075 
Changes in fee payable to the Argentine National Government      (325,205,217)   (260,729,552)
Changes in intangible assets      (2,297,528,617)   (1,252,366,772)
Income tax paid      (103,361,811)   (343,269,607)
Net Cash(applied to)/ provided by operating activities      (72,671,100)   497,472,450 
              
Cash flow from investment activities             
Collection of other current investments      202,554,910    - 
Net cash flow generated in financing activities      202,554,910    - 
              
Cash Flow from financing activities             
Payment of leases      (27,551,637)   - 
Borrowings paid- principal  6   (14,646,243)   (24,924,125)
Borrowings paid- interests  6   (274,914,643)   (215,779,804)
Dividends paid  9   -    (73,907,633)
Net Cash Flow used in financing activities      (317,112,523)   (314,611,562)
              
              
Net (Decrease) Increase in cash and cash equivalents      (187,228,713)   182,860,888 
              
Changes in cash and cash equivalents             
Cash and cash equivalents at the beginning of the period (*)      4,332,700,918    3,762,929,342 
Net (Decrease) Increase in cash and cash equivalents      (187,228,713)   182,860,888 
Effect of inflation generated by cash and cash equivalents      350,541,819    (110,124,155)
Foreign Exchange differences      118,301,295    31,131,947 
Cash and cash equivalents at the end of the period      4,614,315,319    3,866,798,022 
Transactions that do not represent changes in cash and cash equivalents:             
Acquisition of intangible assets through liabilities for finance leases  6   761,787    18,956,096 
Dividends on preferred shares      3,209,188    3,146,,263 

 

The accompanying notes are an integral part of these Condensed Individual Interim Financial Statements and should be read together with the Individual Financial Statements audited for the year ended at December 31, 2018.

 

 5 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Condensed Individual Interim Financial Statements

At March 31, 2019 presented in comparative format (Contd.)

 

NOTE 1 - COMPANY ACTIVITIES

 

Aeropuertos Argentina 2000 S.A. (“AA2000” or the “Company”) was incorporated in 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 we 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. We can provide no assurance that the Argentine National Government will grant our request or on what conditions.

 

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

 

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

 

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 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, 2018.

 

 6 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Condensed Individual Interim Financial Statements

At March 31, 2019 presented in comparative format (Contd.)

 

NOTE 2 - ACCOUNTING POLICIES

 

The Individual Financial Statements are presented in Argentine Pesos, except when specifically indicates otherwise. These statements were approved by the Board of Directors of the Company on May 8, 2019.

 

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

 

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

 

These Individual AA2000 Financial Statements have been prepared in accordance with the IFRS and IFRIC Interpretations (IFRIC) and International Accounting Standards (IAS) issued by the International Standards Committee. of Accounting (IASC, for its acronym in English, predecessor of the IASB).

 

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

 

1) Comparative Information

 

The information included in these financial statements has been extracted from the Individual Financial Statements of AA2000 as of March 31, 2018 and December 31, 2018, approved in a timely manner by the Board of Directors and by the Company's Shareholders, and restated to the closing currency of March 31, 2019, depending on the application of IFRS 29 (see Note 2.7).

 

2) Controlled Companies

 

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 moment of determining if the Company controls an entity the existence and the impact of potential voting rights that could be exercised or converted are taken into account. The controlled companies are consolidated as from the date the control is transferred and excluded from the date such control ceases.

 

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

 

 7 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Condensed Individual Interim Financial Statements

At March 31, 2019 presented in comparative format (Contd.)

 

NOTE 2 - ACCOUNTING POLICIES (Contd.)

 

2) Controlled Companies (Contd.)

 

At March 31, 2019 AA2000 has participation in the following controlled companies (hereafter the Group):

 

Controlled (1)  Number of
common shares
   Participation in
capital and possible
votes
   Book entry
value at 12.31.18
   Net
Shareholders
‘equity at
closing
   Income for the
year
 
           $ 
Servicios y Tecnología Aeroportuarios S.A. (2)   14,398,848    99.30%   40,574,973    40,859,806    (928,916)
Cargo & Logistics S.A.   5,566,259    98.63%   1,196,341    1,212,959    (608,526)
Paoletti America S.A.   6,000    50.00%   15,526    31,052    (1,829)
Texelrío S.A. (3)   84,000    70.00%   65,897,655    83,396,651    1,047,981 
Villalonga Furlong S.A. (4)   123,700    1.46%   50,560    3,463,032    (12,988)

 

(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.

 

3) 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, 2018.

 

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.

 

 8 

 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Condensed Individual Interim Financial Statements

At March 31, 2019 presented in comparative format (Contd.)

 

NOTE 2 - ACCOUNTING POLICIES (Contd.)

 

5) Changes in accounting policies and disclosures

 

New accounting standards and interpretations issued by the IASB that are effective at January 1, 2019 and have 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 Company has revised its lease agreements in force as of January 1, 2019 and has recorded an initial "Right of Use" asset for the initial application of IFRS 16 for a total of $ 182,815,556 and a liability for "Lease liabilities" For $ 182,815,556.

  

At the date of issuance of these financial statements there are no other standards, changes or interpretations issued by the IASB and IFRIC that are not yet effective and are expected to have a significant effect on the Company.

 

There were no other additional changes in the Group's accounting policies based on the effective application standards as of January 1, 2019 described above.

 

6) 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 consistently as those applied in the Individual Financial Statements for the year ended December 31, 2018.

 

7) Foreign currency translation

 

The figures included in the financial statements were measured using its functional currency, that is, the currency of the primary economic environment in which the Company operates. The functional currency of the Company is the Argentine peso, which is coincident with the presentation currency of the financial statements.

 

 9 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Condensed Individual Interim Financial Statements

At March 31, 2019 presented in comparative format (Contd.)

 

 

NOTE 2 – ACCOUNTING POLICIES (Contd.)

 

7) Foreign currency translation (Contd.)

 

Functional and presentation currency (Contd.)

 

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 reporting date of the reporting period, regardless of whether they are based on the historical cost method or the current cost method. For this, in general terms, 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 correspond to the comparative information of these individual Separate financial statements.

 

In order to conclude on whether an economy is categorized as hyperinflationary under the terms of IAS 29, the standard details a series of factors to be considered, including the existence of a cumulative inflation rate in three years that approximates or exceed 100%. Taking into account a significant increase in inflation during 2018, which in addition to the accumulated inflation rate of the last three years exceeds 100% and the rest of the indicators do not contradict the conclusion that Argentina should be considered as a hyperinflationary economy for accounting purposes, the Company 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. It is for this reason that, in accordance with the IAS 29, these Individual Financial Statements are restated reflecting the effects of inflation in accordance with the provisions of the standard.

 

In turn, Law No. 27,468 (BO 04/12/2018) amended Article 10 of Law No. 23,928 and its amendments, establishing that the repeal of all legal norms or regulations that establish or authorize indexation by prices, monetary update, variation of costs or any other form of repowering of debts, taxes, prices or rates of goods, works or services, does not include financial statements, in respect of which the provisions of the article 62 in fine of the General Law of Companies No. 19,550 (TO 1984) and its amendments will be applied. Also, the aforementioned legal body ordered the repeal of Decree No. 1269/2002 of July 16, 2002 and its amendments and delegated to the National Executive Power (PEN), through its controlling entities, to establish the date from the which the provisions cited in relation to the financial statements presented will have effect. Therefore, through its General Resolution 777/2018 (BO 28/12/2018), the CNV established that issuers subject to its control should apply to the annual financial statements, for interim and special periods, that close as of December 31, 2018 inclusive, the method of restating financial statements in a homogeneous currency as established by IAS 29.

 

 10 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Condensed Individual Interim Financial Statements

At March 31, 2019 presented in comparative format (Contd.)

 

NOTE 2 - ACCOUNTING POLICIES (Contd.)

 

7) Foreign currency translation (Contd.)

 

Functional and presentation currency (Contd.)

 

In accordance with IAS 29, the financial statements of an entity reporting in the currency of a high inflation economy must be reported in terms of the unit of measurement in effect at the date of the financial statements. All amounts in the statement of financial position that are not indicated in terms of the current unit of measurement as of the date of the financial statements should be updated by applying a general price index. All the components of the income statement should be indicated in terms of the unit of measure updated as of the date of the financial statements, applying the change in the general price index that has occurred since the date on which the income and expenses were originally recognized in the financial statements.

 

The adjustment for inflation in the initial balances was calculated considering the indexes established by the FACPCE based on the price indexes published by the National Institute of Statistics and Censuses (INDEC, for its acronym in Spanish). The quarterly index for the period ended March 31, 2019 was 1.1178; likewise, the inter-annual index for the period from March 31, 2018 to March 31, 2019 was 1.5473.

 

Inflation adjustment

 

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 re-expression 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 re-expressed. The remaining non-monetary assets and liabilities will be re-expressed by a general price index. The loss or gain from the net monetary position will be included in the comprehensive net result of the reporting period, revealing this information in a separate line item.

 

 

The following is a summary of the methodology used for the preparation of these Individual Financial Statements:

 

-Non-monetary assets and liabilities: non-monetary assets and liabilities (property, plant and equipment, intangible assets, right of use, deferred profits and additional allowances) updated by the adjustment coefficients corresponding to March 31, 2019 at the date of acquisition or origin of each of them, as applicable. The income tax derived has been calculated based on the restated value of these assets and liabilities;

 

 

 11 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Condensed Individual Interim Financial Statements

At March 31, 2019 presented in comparative format (Contd.)

 

NOTE 2 - ACCOUNTING POLICIES (Contd.)

 

7) Foreign currency translation (Contd.)

 

Inflation adjustment (Contd.)

 

-Monetary assets and liabilities, and monetary position result: monetary assets and liabilities, including balances in foreign currency, by their nature, are presented in terms of purchasing power as of March 31, 2019. The financial result generated by the net monetary position reflects the loss or gain that is obtained by maintaining an active or passive net monetary position in an inflationary period, respectively and is exposed in the line of "Result from exposure to changes in the purchasing power of the currency" (RECPAM) in the Statement of Comprehensive Income;

 

-Equity: the net equity accounts are expressed in constant currency as of March 31, 2019, applying the corresponding adjustment coefficients at their dates of contribution or origin;

 

-Results: the items of the Individual Financial Statements have been restated based on the date on which they accrued or were incurred, with the exception of those associated with non-monetary items (depreciation and amortization expenses), which are presented as a function of the update of the non-monetary items to which they are associated, expressed in constant currency as of March 31, 2019, through the application of the relevant conversion factors.

 

The comparative figures have been adjusted for inflation following the same procedure explained in the preceding points.

 

In the initial application of the adjustment for inflation, the equity accounts were restated as follows:

 

-The capital was restated from the date of subscription or from the date of the last adjustment for accounting inflation, whichever happened later. The resulting amount was incorporated into the "Capital adjustment" account

 

-The other result reserves were not restated in the initial application

 

With respect to the evolution notes of non-monetary items for the year, the balance at the beginning includes the adjustment for inflation derived from expressing the initial balance to the currency of current purchasing power.

 

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).

 

 12 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Condensed Individual Interim Financial Statements

At March 31, 2019 presented in comparative format (Contd.)

 

NOTE 2 - ACCOUNTING POLICIES (Contd.)

 

7) Foreign currency translation (Contd.)

 

Transactions and balances

 

Foreign exchange gains and losses 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.

 

8) 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.

 

9) Income and deferred tax - Tax Revaluation

 

The charge for income tax in the year 2019 was $ 489 million, including a charge for current tax of $ 877 million that was mostly offset by a deferred tax income. During the year, the Company adhered to the tax revaluation of Law No. 27,430, generating a deferred tax income of $ 1,615 million, as well as a higher current tax of $ 517 million.

 

 13 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Condensed Individual Interim Financial Statements

At March 31, 2019 presented in comparative format (Contd.)

 

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

 

INDIVIDUAL STATEMENTS OF FINANCIAL POSITION

  03.31.19   12.31.18 
   $ 
Cash and cash equivalents          
Cash and funds in custody   9,902,788    11,885,500 
Banks   3,670,557,575    3,268,093,607 
Checks not yet deposited   19,886,882    27,357,657 
Time deposits   913,968,074    1,025,364,154 
    4,614,315,319    4,332,700,918 
           
Trade receivables, net          
Trade receivables   3,046,004,346    2,846,624,200 
Related parties (Note 7)   50,030,716    58,712,855 
Checks - postdated checks   27,687,986    38,111,341 
Provision for bad debts (Note 8)   (374,928,392)   (348,911,006)
    2,748,794,656    2,594,537,390 
           
Other current receivables          
Expenses to be recovered   21,100,881    24,226,856 
Guarantees granted (Nota 12)   5,520,910    6,171,172 
Related parties (Note 7)   7,213,857    8,063,518 
Tax credits   910,719,231    1,081,625,893 
Prepaid Insurance   17,135,669    31,252,612 
Other   785,407    1,090,049 
    962,475,955    1,152,430,100 
           
Other non-current receivables          
Trust for Strengthening (Note 7)   4,406,724,938    4,526,320,914 
    4,406,724,938    4,526,320,914 
           
Accounts payable and other-current          
Obligations payable   104,346,854    46,414,290 
Suppliers   1,742,514,856    2,008,397,650 
Foreign suppliers   46,499,361    79,833,640 
Related parties (Note 7)   135,506,745    233,524,523 
Salaries and social security liabilities   746,449,383    901,152,892 
Other fiscal liabilities   183,749,989    156,139,317 
    2,959,067,188    3,425,462,312 

 

 14 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Condensed Individual Interim Financial Statements

At March 31, 2019 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 STATEMENT OF FINANCIAL POSITION (Contd.)

  03.31.19   12.31.18 
   $ 
Accounts payable and other- non current          
Tax liabilities   78,416,631    98,139,826 
    78,416,631    98,139,826 

 

INDIVIDUAL STATEMENTS OF COMPREHENSIVE INCOME  03.31.19   03.31.18 
   $ 
Revenues          
Aeronautical revenues   4,536,746,746    3,762,703,626 
Non-aeronautical revenues   2,577,207,264    2,535,006,957 
    7,113,954,010    6,297,710,583 

 

As of March 31, 2019 and 2018, "over the time" income from contracts with customers was $6,096,520,673 and $5,280,758,697, respectively.

 

Other net incomes and expenses          
Trust for Strengthening   176,430,576    156,652,221 
Other   (666,798)   (9,221,078)
    175,763,778    147,431,143 
           
Finance Income          
Interest   354,968,875    25,519,100 
Foreign Exchange differences   88,743,724    (78,201,986)
    443,712,599    (52,682,886)
Interest   (322,264,777)   (231,204,732)
Foreign Exchange differences   (496,585,600)   155,668,879 
    (818,850,377)   (75,535,853)
    (375,137,778)   (128,218,739)
           
Income Tax          
Current   (872,445,987)   (521,400,423)
Deferred   1,367,237,710    (128,176,374)
    494,791,723    (649,576,797)

 

 15 

  

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Condensed Individual Interim Financial Statements

At March 31, 2019 presented in comparative format (Contd.)

 

NOTE 4 - INVESTMENTS ACCOUNTED FOR BY THE EQUITY METHOD

 

   2019   2018 
   $ 
Balance at January 1   108,239,333    112,146,211 
Income from investments accounted for by the equity method   (504,278)   (3,712,197)
Balance at March 31   107,735,055    108,434,014 

 

NOTE 5 - INTANGIBLE ASSETS

 

   2019   2018 
   $ 
Original values          
Balance at January 1   55,717,398,782    48,460,082,918 
Acquisitions   2,298,290,404    1,271,322,868 
Balance at March 31   58,015,689,186    49,731,405,786 
           
Accumulated Amortization:          
Balance at January 1   (15,900,891,954)   (12,762,480,996)
From the period (Nota 10)   (920,781,813)   (666,130,055)
Balance at March 31   (16,821,673,767)   (13,428,611,051)
Total net balance at March 31   41,194,015,419    36,302,794,735 

 

NOTE 6 - BORROWINGS

 

Breakdown of borrowings  03.31.19   12.31.18 
   $ 
Non-current          
Negotiable Obligations   15,172,500,000    15,275,884,848 
Finance lease liabilities   10,122,115    17,988,155 
Cost of issuance of Negotiable Obligations   (73,904,371)   (88,289,891)
Total Non- Current   15,108,717,744    15,205,583,112 
Current          
Negotiable Obligations   2,430,834,020    1,827,523,468 
Finance lease liabilities   44,536,930    54,258,897 
Cost of issuance of Negotiable Obligations   (10,557,767)   - 
Total Current   2,464,813,183    1,881,782,365 
Total   17,573,530,927    17,087,365,477 

 

Breakdown of borrowings  2019   2018 
   $ 
Balance at January 1   17,087,365,477    12,462,061,249 
New borrowings   761,787    18,956,096 
Borrowings paid   (289,560,886)   (240,703,929)
Accrued interest   297,691,769    222,023,520 
Foreign Exchange differences   477,665,426    (168,687,343)
Inflation adjustment   (392,646)   331,726,972 
Net Balance at March 31   17,573,530,927    12,625,376,565 

 

 16 

  

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Condensed Individual Interim Financial Statements

At March 31, 2019 presented in comparative format (Contd.)

 

NOTE 6 - BORROWINGS (Contd.)

 

On February 6, 2017, the Company issued negotiable obligations for US$400,000,000 with maturity on February 1, 2027, with an interest rate of 6.875% and an issue price of 99.888% par value. Payment of principal will have a quarterly amortization in 32 quarters, identical and consecutive, payable from May 1, 2019.

 

These negotiable obligations are guaranteed by a Trust under the Argentine Law, by which the Company has transferred and assigned use fees of international and regional airports and the Concession Indemnification Rights. This guarantee has been approved by the ORSNA on January 17, 2017, through Resolution Nº 1/2017, that resolved to “authorize the Concession (…) a collateral assignment of up to US$ 400,000,000 (…)”.

 

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

 

At March 31, 2019 the reasonable value of negotiable obligations issued in February 2017 is of $17,180,632,858. Such method of valuation is classified according to IFRS 13 as hierarchy of reasonable value Level 2 (quotation prices (not adjusted) in active markets for identical assets or liabilities).

 

 17 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Condensed Individual Interim Financial Statements

At March 31, 2019 presented in comparative format (Contd.)

 

NOTE 7 - BALANCES AND TRANSACTIONS WITH RELATED PARTIES

 

Balances with other related companies at March, 31, 2019 and December 31, 2018 are as follows:

 

   03.31.19   12.31.18 
   $ 
Trade receivables net- Current          
Servicios y Tecnología Aeroportuarios S.A.   7,926,212    6,408,983 
Other related companies   42,104,504    52,303,872 
    50,030,716    58,712,855 
Other current receivables          
Cargo & Logistics S.A.   795,282    888,952 
Other related companies   6,418,575    7,174,566 
    7,213,857    8,063,518 
Accounts payable and other- Current          
Servicios y Tecnología Aeroportuarios S.A.   14,077,669    34,984,189 
Texelrío S.A.   8,134,900    40,710,062 
Other related companies   113,294,176    157,830,272 
    135,506,745    233,524,523 
Provisions and other charges          
Villalonga Furlong S.A.   980,059    1,482,903 
Other related companies   426,249    476,453 
    1,406,308    1,959,356 

 

During the three month periods ended at March 31, 2019 and 2018, the Company has charged the cost $83,944,837 and $87,364,684 respectively for maintenance done with Texelrio S.A.

 

During the three month periods ended March 31, 2019 and 2018 the Company has charged to the cost $45,408,469 and $24,318,322 respectively with Proden SA for management control services, financial assistance, internal audit, out sourcing of systems and technology and rental and maintenance of offices.

 

During the three-month periods ended March 31, 2019 and 2018 the Company has charged at cost $11,768,083 and $8,854,604, respectively with Servicios Integrales América for out sourcing of systems and technology.

 

During the three-month periods ended March 31, 2019 and 2018, the Company has charged with Helport S.A. to intangible assets $28,914,923 and $198,764,473 respectively and at cost $77,964,612 and $32,555,716 respectively

 

During the period ended at March 31, 2019 $73,907,633 of dividends have been paid to the shareholders according to their shareholding.

 

 18 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Condensed Individual Interim Financial Statements

At March 31, 2019 presented in comparative format (Contd.)

 

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

 

At March 31, 2019 and December 31, 2018 the Company owed the Argentine National Government $356,875,211 and $363,508,457 respectively, corresponding to the specific allocation of revenues of each year (see Note 10) and has recorded a receivable for $4,406,724,938 and $4,526,320,914 respectively corresponding to the Trust for Strengthening to fund the infrastructure works of AA2000.

 

Furthermore, short-term compensation to key management was $12,052,992 and $18,298,372 for the three month periods ended at March 31, 2019 and 2018 respectively.

 

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

 

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

 

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

 

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

 

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 and at the same time it is controlled a 100% by Corporación America Airport 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.

 

 19 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Condensed Individual Interim Financial Statements

At March 31, 2019 presented in comparative format (Contd.)

 

NOTE 8 - BAD DEBT PROVISIONS

 

   2019   2018 
   $ 
Initial balance at January 1   348,911,006    249,552,806 
IRFS 9 adjustments at the beginning   -    (118,944,663)
Balance at January 1   348,911,006    130,608,143 
Increases (*)   136,509,560    6,582,376 
Usage   (69,302,602)   - 
Inflation adjustment   (41,189,572)   (8,832,956)
Final Balance at March 31   374,928,392    128,357,563 

 

(*) As of March 31, 2019 and 2018 includes $85,033,807 and $6,582,376 respectively in Distribution and Commercialization Expenses (Note 10) and $51,475,753 in Exchange Difference (Note 3).

 

NOTE 9 - PROVISIONS AND OTHER CHARGES

 

   Litigation  

Related

Parties

(Note 7)

  

Deferred

Income

  

Trust for works-

Portfolio of

Projects 2012/2014

  

Guarantees

Received

  

Upfront fees

from

Concessionai-

res

  

Dividends to
be paid

(Note 7)

   Total 
At January 1, 2019   66,158,022    1,959,356    157,950,323    167,550,227    53,833,299    146,114,985    -    593,566,212 
Increases   1,791,310    -    125,936,488    563,180,970    31,517,902    10,223,988    -    732,650,658 
Decreases   (1,975,806)   (368,309)   -    (537,221,114)   (17,244,163)   -    -    (556,809,392)
Inflation adjustment   (6,971,136)   (184,739)   -    (18,539,111)   335,854         -    (25,359,132)
Accruals   -    -    (78,282,941)   -    -    (9,037,055)   -    (87,319,996)
At March 31, 2019   59,002,390    1,406,308    205,603,870    174,970,972    68,442,892    147,301,918    -    656,728,350 
                                         
Total current   59,002,390    1,406,308    176,086,802    174,970,972    68,442,892    31,182,903    -    511,092,267 
Total Non current   -    -    29,517,068    -    -    116,119,015    -    145,636,083 
                                         
At January 1, 2018   88,811,143    6,907,431    180,564,480    123,799,630    51,022,868    182,332,475    404,337,088    1,037,775,115 
Increases   4,563,405    89,921    26,040,105    230,966,294    16,363,800    5,422,745    -    283,446,270 
Decreases   -    (1,132,545)   -    (222,703,228)   (847,453)   -    (73,907,633)   (298,590,859)
Inflation adjustment   (5,649,198)   (407,274)   -    (2,365,150)   (5,526,474)   -    (28,701,392)   (42,649,488)
Accruals   -    -    (49,435,670)   -    -    (11,076,805)   -    (60,512,475)
At March 31, 2018   87,725,350    5,457,533    157,168,915    129,697,546    61,012,741    176,678,415    301,728,063    919,468,563 
                                         
Total current   87,725,350    5,457,533    117,494,482    129,697,546    61,012,741    40,411,127    301,728,063    743,526,842 
Total Non current   -    -    39,674,433    -    -    136,267,288    -    175,941,721 

 

 20 

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Condensed Individual Interim Financial Statements

At March 31, 2019 presented in comparative format (Contd.)

 

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

 

Item  Cost of sales  

Administrative

expenses

  

Distribution and

selling expenses

   Total 
   $ 
Three month period ended at 03.31.19                    
Specific allocation of revenues   1,058,583,456    -    -    1,058,583,456 
Airport services and maintenance   876,324,947    3,315,447    58,308    879,698,702 
Amortization of intangible assets   896,236,412    23,846,069    699,332    920,781,813 
Salaries and social security contributions   852,688,840    135,056,815    10,592,472    998,338,128 
Fees for services   47,467,324    26,094,263    5,529,395    79,090,982 
Public utilities and contributions   167,729,770    965,661    86,083    168,781,514 
Taxes   36,346,018    55,712,863    338,712,002    430,770,883 
Office expenses   127,543,850    28,125,778    974,973    156,644,600 
Insurance   15,086,171    20,834    -    15,107,005 
Advertising expenses   -    0    83,469    83,469 
Bad debt charges   -    0    85,033,807    85,033,807 
Board of Directors and Supervisory Committee fees   -    5,061,376    -    5,061,376 
Amortization right of use   27,752,700    -    -    27,752,700 
Total at 03.31.19   4,105,759,488    278,199,106    441,769,841    4,825,728,435 
                     
Three month period ended at 03.31.18                    
Specific allocation of revenues   939,913,326    -    -    939,913,326 
Airport Services and maintenance   910,922,881    10,734,182    4,992,863    926,649,926 
Amortization of intangible assets   658,093,883    6,785,204    1,250,968    666,130,055 
Salaries and social security contributions   755,470,870    116,202,129    27,905,933    899,578,932 
Fees for services   9,663,535    15,959,271    4,046,815    29,669,621 
Public utilities and contributions   143,293,224    992,310    296,375    144,581,909 
Taxes   25,533,087    67,389,403    327,635,775    420,558,265 
Office expenses   50,153,337    98,006,810    2,703,713    150,863,860 
Insurance   16,693,835    1,029,844    -    17,723,679 
Advertising expenses   -    -    12,234,402    12,234,402 
Bad debt charges   -    -    6,582,376    6,582,376 
Board of Directors and Supervisory Committee fees   -    5,451,375    -    5,451,375 
Total at 03.31.18   3,509,737,978    322,550,528    387,649,220    4,219,937,726 

 

 21 

  

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Condensed Individual Interim Financial Statements

At March 31, 2019 presented in comparative format (Contd.)

  

NOTE 11 - FOREIGN CURRENCY ASSETS AND LIABILITIES

 

<
Item  Foreign currency type
and amount at
03.31.19
  Foreign
exchange
rates
   Amount in
local currency
at 03.31.19
   Amount in local
currency at
12.31.18
 
              $ 
ASSSETS                       
CURRENT ASSETS                       
                        
Cash and cash equivalents  US$   89,987,850    43.1500    3,882,975,721    3,227,968,673