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

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20546

 

FORM 6-K

 

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

UNDER THE SECURITIES EXCHANGE ACT OF 1934

 

For the month of November, 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): ¨

 

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): ¨

 

 

 

 

 

INFORMATION CONTAINED IN THIS FORM 6-K REPORT

 

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

 

This Form 6-K contains a free translation into English of the stand-alone condensed consolidated interim financial statements for the nine months ended September 30, 2019 of AA2000 (the “AA2000 Consolidated Financial Statements”) as well as the stand-alone condensed individual interim financial statements for the nine months ended September 30, 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 nine months ended September 30, 2019.
99.2 Free translation into English of AA2000 Condensed Individual Interim Financial Statements for the nine months ended September 30, 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: November 11, 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 September 30, 2019 presented in comparative format

 

 

 

 

Aeropuertos Argentina 2000 S.A.

 

Condensed Consolidated Interim Financial Statements

At September 30, 2019 presented in comparative format

 

Index

   
Consolidated Statements of Comprehensive Income  
Consolidated Statements of Financial Position  
Consolidated Statements of Changes in Equity  
Consolidated Statements of Cash Flows  

Notes to the Condensed Consolidated Interim Financial Statements

 
Summary of Information requested by Resolution N° 368/01 of the National Securities Commission  
Report on Review of Condensed Consolidated Interim Financial Statements  
Report of the Supervisory Committee  

 

$ = Argentine Peso

US$ = US Dollar

EUR = Euro

CAD = Canadian dollar

 

 

1

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

 

Legal address:  Honduras 5663 - Autonomous City of Buenos Aires
Principal activity:  Exploitation, administration and operation of airports

 

Condensed Consolidated Interim Financial Statements
For the nine-month period of the Fiscal Year N° 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 
747,529,409 Preferred shares of AR$ 1 par value with no voting rights   747,529,409    747,529,409 
    1,006,046,708    1,006,046,708 

 

 

2

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Consolidated Statements of Comprehensive Income

For the three month and nine month periods ended at September 30, 2019 and 2018

 

      Three months at   Nine months at 
      09.30.19   09.30.18   09.30.19   09.30.18 
   Note  $ 
Continuous Operations                       
Revenue  4   8,541,419,134    9,072,121,938    25,218,611,277    24,523,216,060 
CINIIF 12 - paragraph 14 Credit  5   5,410,812,458    2,185,001,575    12,494,337,292    6,432,412,015 
Cost of service  10   (5,412,455,497)   (5,484,011,350)   (15,565,869,942)   (14,005,603,280)
CINIIF 12 - paragraph 14 Debit      (5,407,806,683)   (2,183,161,492)   (12,486,158,306)   (6,425,961,915)
Gross Profit      3,131,969,412    3,589,950,671    9,660,920,321    10,524,062,880 
Distribution and selling expenses  10   (1,749,680,253)   (563,987,257)   (2,801,170,355)   (1,571,733,784)
Administrative expenses  10   (287,288,198)   (172,544,088)   (903,843,614)   (1,130,223,673)
Other income and expenses, net  4   201,347,262    191,388,153    598,053,583    555,940,901 
Operating profit      1,296,348,223    3,044,807,479    6,553,959,935    8,378,046,324 
                        
Finance income  4   140,587,138    1,356,254,217    387,028,096    2,871,638,034 
Finance expenses  4   (5,098,246,566)   (5,700,678,863)   (4,291,742,886)   (11,463,053,776)
Result from exposure to changes in the purchasing power of the currency      86,445,514    (788,601,427)   (708,307,225)   (1,210,392,159)
Income before income tax      (3,574,865,691)   (2,088,218,594)   1,940,937,920    (1,423,761,577)
Income tax  4   1,457,153,203    257,424,542    1,814,081,559    (344,281,364)
Income for the period for continuous operations      (2,117,712,488)   (1,830,794,052)   3,755,019,479    (1,768,042,941)
Net Income for the period      (2,117,712,488)   (1,830,794,052)   3,755,019,479    (1,768,042,941)
Other comprehensive income      -    -    -    - 
Comprehensive Income for the period      (2,117,712,488)   (1,830,794,052)   3,755,019,479    (1,768,042,941)
                        
Income attributable to:                       
Shareholders      (2,123,833,672)   (1,841,831,886)   3,753,606,744    (1,780,079,168)
Non-Controlling Interest      6,121,184    11,037,834    1,412,735    12,036,227 
                        
Earnings per share basic and diluted attributable to shareholders of the Company during the period (shown in $ per share) from continuous operations      (8.3084)   (7.1006)   14.1315    (6.8952)

 

The accompanying notes are an integral part of these Condensed Consolidated Interim Financial Statements and should be read together with the Consolidated Accounting 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 Financial Position

At September 30, 2019 and December 31, 2018

 

      09.30.19   12.31.18 
   Note  $ 
Assets             
Non-Current Assets             
Property, plant and equipment      70,529,610    78,727,461 
Intangible assets  5   58,106,451,743    49,048,340,216 
Rights of use      142,056,408    - 
Deferred income tax assets      692,135    880,146 
Other receivables  4   5,028,535,005    5,576,829,713 
Total Non-Current Assets      63,348,264,901    54,704,777,536 
Current Assets             
Other receivables  4   3,194,974,603    1,451,816,644 
Trade receivables, net  4   2,943,743,537    3,208,245,800 
Other assets      14,390,236    10,224,909 
Investments      -    256,829,095 
Cash and cash equivalents  4   5,153,256,729    5,432,557,116 
Total Current Assets      11,306,365,105    10,359,673,564 
Total Assets      74,654,630,006    65,064,451,100 
Shareholders’ Equity and Liabilities             
Equity attributable to Shareholders:             
Common shares      258,517,299    258,517,299 
Preferred shares      747,529,409    629,252,640 
Share Premium      137,280,595    137,280,595 
Capital adjustment      10,202,038,326    10,187,263,655 
Legal and facultative reserves      17,544,618,729    11,906,607,341 
Retained earnings      3,753,920,036    8,182,633,757 
Subtotal      32,643,904,394    31,301,555,287 
Non-Controlling Interest      22,833,283    21,420,547 
Total Shareholders’ Equity      32,666,737,677    31,322,975,834 
Liabilities             
Non-Current Liabilities             
Provisions and other charges  9   163,819,620    184,035,299 
Borrowings  6   24,794,073,128    18,731,141,254 
Deferred income tax liabilities      4,549,737,439    7,110,172,396 
Lease liabilities      12,110,111    - 
Accounts payable and others  4   60,046,779    121,164,180 
Total Non-Current Liabilities      29,579,787,077    26,146,513,129 
Current Liabilities             
Provisions and other charges  9   2,285,707,675    555,838,139 
Borrowings  6   4,110,197,061    2,318,091,389 
Income tax, net of prepayments      6,609,234    11,077,780 
Lease liabilities      154,524,945    - 
Accounts payable and others  4   5,424,246,313    4,262,163,501 
Fee payable to the Argentine National Government      426,820,024    447,791,328 
Total Current Liabilities      12,408,105,252    7,594,962,137 
Total Liabilities      41,987,892,329    33,741,475,266 
Total Shareholders’ Equity and Liabilities      74,654,630,006    65,064,451,100 

 

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

 

 

4

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Consolidated Statements of Changes in Equity

At September 30, 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       10,187,263,655       433,378,470       11,473,228,871       8,182,633,757       31,301,555,287       21,420,548       31,322,975,835  
Resolutions of the Shareholders' Meeting of July 25, 2019 (Note 15):                                                                                
Capitalization of dividends corresponding to preferred shares     -       118,276,769       -       14,774,671       -       -       (133,051,440 )     -       -       -  
Legal and facultative reserves     -       -       -       -       70,477,658       5,567,533,730       (5,638,011,388 )     -       -       -  
Distribution of dividends     -       -       -       -       -       -       (2,411,257,637 )     (2,411,257,637 )     -       (2,411,257,637 )
Net Income for the period     -       -       -       -       -       -       3,753,606,744       3,753,606,744       1,412,735       3,755,019,479  
Balance at 09.30.19     258,517,299       747,529,409       137,280,595       10,202,038,326       503,856,128       17,040,762,601       3,753,920,036       32,643,904,394       22,833,283       32,666,737,677  
                                                                                 
                                                                                 
Balance at 01.01. 18     258,517,299       616,914,353       137,280,595       10,176,084,118       428,767,132       6,384,501,579       11,779,990,748       29,782,055,824       19,452,494       29,801,508,318  
Adjustment IFRS 9     -       -       -       -       -       -       109,892,330       109,892,330       -       109,892,330  
Balance at 01.01.18 restated     258,517,299       616,914,353       137,280,595       10,176,084,118       428,767,132       6,384,501,579       11,889,883,078       29,891,948,154       19,452,494       29,911,400,648  
Resolutions of the Shareholders' Meeting of April 9, 2018 (Note 15):                                                                                
Capitalization of dividends corresponding to preferred shares     -       12,338,287       -       8,271,375       -       -       (20,609,662 )     -       -       -  
Legal and facultative reserves     -       -       -       -       4,041,110       4,459,466,614       (4,463,507,724 )     -       -       -  
Net Income for the period     -       -       -       -       -       -       (1,780,079,168 )     (1,780,079,168 )     12,036,227       (1,768,042,941 )
Balance at 09.30.18     258,517,299       629,252,640       137,280,595       10,184,355,493       432,808,242       10,843,968,193       5,625,686,524       28,111,868,986       31,488,721       28,143,357,707  

 

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

 

 

5

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Consolidated Statements of Cash Flow

For the nine month periods ended at September 30, 2019 and 2018

 

      09.30.19   09.30.18 
   Note  $ 
Cash Flows from operating activities             
Net income for the period      3,755,019,479    (1,768,042,941)
Adjustment for:             
Amortization of intangible assets  5 / 10   3,436,225,766    2,618,316,614 
Depreciation of property, plant and equipment  10   8,326,889    9,122,717 
Amortization right of use  10   102,562,276    - 
Specific allocation of accrued and unpaid income  7   426,820,024    473,128,278 
Income tax  4   (1,814,081,559)   344,281,364 
Bad debts provision  8 / 10   1,432,112,609    96,212,622 
Accrued and unpaid borrowing interest costs  6   1,271,241,464    1,037,091,984 
Accrued deferred revenues and additional consideration  9   (373,814,076)   (257,562,726)
Accrued and unpaid exchange differences      2,808,882,336    7,761,803,005 
Litigations provision  9   8,262,544    31,580,718 
Inflation Adjustment      (999,535,522)   (300,140,122)
Changes in operating assets and liabilities:             
Changes in trade receivables      (2,045,890,809)   (217,872,099)
Changes in other receivables      (6,732,577,012)   307,054,910 
Changes in other assets      (4,165,327)   (11,218,920)
Changes in accounts payable and others      2,300,933,028    (867,805,894)
Changes in liabilities for current income tax      (113,997,816)   354,028,053 
Changes in provisions and other charges      4,916,169,758    304,910,220 
Changes in fee payable to the Argentine National Government      (325,205,217)   (260,729,552)
Increase of intangible assets      (12,493,366,779)   (6,403,662,625)
Income tax paid      (602,219,588)   (966,563,714)
Net cash (used in) / generated by operating activities      (5,038,297,532)   2,283,931,892 
Cash Flow for investing activities             
Acquisition of investments      (489,301,010)   (373,178,333)
Collection of investments      810,444,171    - 
Acquisition of property, plant and equipment      (129,038)   (102,102)
Net Cash Flow generated by / (used in) investing activities      321,014,123    (373,280,435)
Cash Flow from financing activities             
Borrowings obtened  6   7,652,507,912    - 
Payment of leases      (102,985,936)   - 
Borrowings paid-principal  6   (1,676,582,602)   (89,656,588)
Borrowings paid-interests  6   (1,113,378,127)   (822,426,392)
Dividends paid  9   (1,202,313,411)   (304,688,621)
Net Cash generated by / (using in) in financing activities      3,557,247,836    (1,216,771,601)
              
Net (decrease) / increase in cash and cash equivalents      (1,160,035,573)   693,879,856 
Changes in cash and cash equivalents             
Cash and cash equivalents at the beginning of the period      5,432,557,116    4,716,074,960 
Net (decrease) / increase in cash and cash equivalents      (1,160,035,573)   693,879,856 
Inflation adjustment      1,522,320,506    (1,388,795,989)
Foreign Exchange differences      (641,585,320)   1,998,235,171 
Cash and cash equivalents at the end of the period      5,153,256,729    6,019,393,998 
Transactions that do not represent changes in cash and cash equivalents:             
Acquisition of intangible assets through liabilities for finance leases  6   970,513    28,749,390 
Dividends on preferred shares  14   101,788,172    14,492,506 

 

The accompanying notes are an integral part of these Condensed Consolidated Interim Financial Statements and should be read together with the Consolidated 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 September 30, 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, 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 (Organismo Regulador Del Sistema Nacional de Aeropuertos, 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.

 

 

7

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Condensed Consolidated Interim Financial Statements

At September 30, 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):

 

Subsidiaries (1)  Number of
common shares		   Participation in
capital and
possible votes		   Book entry
value at
09.30.19		   Net
Shareholders
‘equity at
closing		   Income for the
period		 
           $ 
Servicios y Tecnología Aeroportuarios S.A. (2)   14,398,848    99.30%   68,193,160    68,671,872    17,066,203 
Cargo & Logistics SA.   1,614,687    98.63%   826,588    838,070    (1,396,756)
Paoletti América S.A.   6,000    50.00%   15,526    31,051    (5,853)
Texelrío S.A. (3)   84,000    70.00%   82,967,647    105,291,522    3,081,964 
Villalonga Furlong S.A (4)   123,700    1.46%   44,998    3,082,125    (33,284)

 

(1)Companies based 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 of AR$1 par value
(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.

 

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

 

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

 

 

8

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Condensed Consolidated Interim Financial Statements

At September 30, 2019 presented in comparative format (Contd.)

 

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 November 6, 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 which adopts the application of IFRS (International Financial Reporting Standards) issued by the IASB (International Accounting Standards Board), for those entities under the public offering regime Law N° 17.811, whether due to capital stock or corporate bonds or because they have requested authorization to list for trading on stock exchanges.

 

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

 

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

 

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

 

1) Comparative Information

 

The information included in these financial statements was extracted from the Condensed Consolidated Interim Financial Statements of AA2000 as of September 30, 2018 and the Consolidated Financial Statements at December 31, 2018, timely approved by the Company’s Board and Shareholders and restated at the closing currency at September 30, 2019, based on the application of IAS 19 (see Note 3.6)

 

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.

 

 

9

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Condensed Consolidated Interim Financial Statements

At September 30, 2019 presented in comparative format (Contd.)

 

NOTE 3 - ACCOUNTING POLICIES (Contd.)

 

3) Segment Information (Contd.)

 

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 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 based on expected passenger flow and air traffic, in the framework of the standards previously mentioned.

 

4) Accounting policies

 

The collection policies adopted for these interim financial statements are consistent with those used in the Consolidated Financial Statements as of December 31, 2018.

 

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 $244,618,684 and a liability for "Lease liabilities" For $244,618,684.

 

 

10

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Condensed Consolidated Interim Financial Statements

At September 30, 2019 presented in comparative format (Contd.)

 

NOTE 3 - ACCOUNTING POLICIES (Contd.)

 

5) Changes in accounting policies and disclosures (Contd.)

 

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

 

IFRS 16 “Leases” (Contd.)

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.

 

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 Individual Separate financial statements.

 

 

11

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Condensed Consolidated Interim Financial Statements

At September 30, 2019 presented in comparative format (Contd.)

 

NOTE 3 – ACCOUNTING POLICIES (Contd.)

 

7) Foreign currency translation (Contd.)

 

Functional and presentation currency (Contd.)

 

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 that 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 Consolidated 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, for the acronym in Spanish), 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.

 

In accordance with IAS 29, the financial statements of an entity reporting in the currency of a hyperinflationary 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 Argentine Federation of Professional Councils in Economic Sciences (FACPCE, for the acronym in Spanish) based on the price indexes published by the National Institute of Statistics and Censuses (INDEC, for the acronym in Spanish). The coefficient for the nine-month period ended September 30, 2019 was 1.3770; also, the inter annual coefficient for the period ended September 30, 2019 was 1.5354.

 

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.

 

 

12

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Condensed Consolidated Interim Financial Statements

At September 30, 2019 presented in comparative format (Contd.)

 

NOTE 3 - ACCOUNTING POLICIES (Contd.)

 

7) Foreign currency translation (Contd.)

 

Inflation adjustment (Contd.)

 

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 Condensed Consolidated Interim Financial Statements:

 

-Non-monetary assets and liabilities: non-monetary assets and liabilities (property, plant and equipment, intangible assets, rights of use, deferred profits and additional allowances) updated by the adjustment coefficients corresponding to September 30, 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;

 

-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 September 30, 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 September 30, 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 September 30, 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.

 

 

13

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Condensed Consolidated Interim Financial Statements

At September 30, 2019 presented in comparative format (Contd.)

 

NOTE 3 - ACCOUNTING POLICIES (Contd.)

 

7) Foreign currency translation (Contd.)

 

Inflation adjustment (Contd.)

 

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 and balances

 

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

 

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

 

Foreign exchange gains and losses are shown in “Finance income” and/or “Finance expenses” 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 legal claims related to the normal course of business. It is not expected that any significant liabilities other than those provisioned will arise from contingent liabilities.

 

9) Income tax and Deferred tax - Tax revalued - Tax inflation adjustment

 

The income tax gain in 2019 was $1,814 million, including a current tax charge of $742 million that was mostly reversed by a deferred tax gain. On March 29, 2019, the Company adhered to the tax revaluation Law No. 27,430, fiscal period 2017, generating a deferred tax gain of $3,891 million, as well as a special tax charge of $637 million for adhesion to such benefit.

 

 

14

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Condensed Consolidated Interim Financial Statements

At September 30, 2019 presented in comparative format (Contd.)

 

NOTE 3 - ACCOUNTING POLICIES (Contd.)

 

9) Income tax and Deferred tax - Tax revalued - Tax inflation adjustment (Contd.)

 

In order to determine the net taxable income at the end of the current period, the inflation adjustment determined in accordance with articles No. 95 to No. 98 of the income tax law, for $1,125 million was incorporated into the tax result because at September 30, 2019, the variation of the General Level Consumer Price Index (IPC, for the acronym in Spanish) has exceeded 30%. Likewise, the income tax law allows the deferral of the charge generated by the adjustment for tax inflation in three consecutive years, as a result, $422 million was recognized in the current tax liability and $703 million as a deferred tax liability.

 

 

15

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Condensed Consolidated Interim Financial Statements

At September 30, 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

 

   09.30.19   12.31.18 
   Note  $ 
Other non-current receivables             
Tax credits      545,200    1,038,519 
Trust for Strengthening  7   5,027,989,805    5,575,791,194 
       5,028,535,005    5,576,829,713 
Other current receivables             
Expenses to be recovered      53,382,903    29,930,078 
Guarantees granted  6   5,520,910    7,602,017 
Related parties  7   2,090,911    8,838,056 
Tax credits      2,800,291,342    1,360,590,645 
Prepaid Insurance      19,120,928    38,498,826 
Others      314,567,609    6,357,022 
       3,194,974,603    1,451,816,644 
Trade receivables, net             
Trade receivables      5,024,429,389    3,539,262,024 
Related parties  7   52,857,809    64,431,019 
Checks-postdated checks      45,650,519    46,947,815 
Provision for bad debts  8   (2,179,194,180)   (442,395,058)
       2,943,743,537    3,208,245,800 
              
Cash and cash equivalents             
Cash and funds in custody      100,287,174    98,408,057 
Banks      5,034,161,133    4,037,222,451 
Checks not yet deposited      18,808,422    33,822,084 
Time deposits      -    1,263,104,524 
       5,153,256,729    5,432,557,116 
Accounts payable and other non-current             
Tax liabilities      60,046,779    121,164,180 
       60,046,779    121,164,180 
Accounts payable and other current             
Obligations payable      23,259,161    57,175,886 
Suppliers      3,834,458,599    2,578,375,713 
Foreign suppliers      212,056,086    98,343,824 
Related Parties  7   177,029,975    194,424,713 
Salaries and social security liabilities      1,011,688,629    1,130,948,487 
Other fiscal liabilities      165,753,863    202,894,878 
       5,424,246,313    4,262,163,501 

 

 

16

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Condensed Consolidated Interim Financial Statements

At September 30, 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 POSITION

 

   Three months at   Nine months at 
   09.30.19   09.30.18   09.30.19   09.30.18 
   $ 
Revenues                    
Aeronautical revenues   5,231,400,791    5,235,699,471    15,571,968,982    14,158,552,899 
Non-Aeronautical revenues   3,310,018,343    3,836,422,467    9,646,642,295    10,364,663,161 
    8,541,419,134    9,072,121,938    25,218,611,277    24,523,216,060 

 

As of September 30, 2019 and 2018, "over the time" income from contracts with customers for the nine-month periods was $21,482,371,479 and $20,519,973,962, respectively.

 

Other incomes and expenses, net                    
Trust for Strengthening   211,725,531    224,491,459    625,181,610    607,113,154 
Other   (10,378,269)   (33,103,306)   (27,128,027)   (51,172,253)
    201,347,262    191,388,153    598,053,583    555,940,901 
                     
Finance income                    
Interest   244,435,971    404,833,369    1,130,829,222    806,468,780 
Foreign exchange differences   (103,848,833)   951,420,848    (743,801,126)   2,065,169,254 
    140,587,138    1,356,254,217    387,028,096    2,871,638,034 
Finance expenses                    
Interest   (576,226,487)   (459,534,519)   (1,403,023,147)   (1,122,176,691)
Foreign exchange differences   (4,522,020,079)   (5,241,144,344)   (2,888,719,739)   (10,340,877,085)
    (5,098,246,566)   (5,700,678,863)   (4,291,742,886)   (11,463,053,776)
    (4,957,659,428)   (4,344,424,646)   (3,904,714,790)   (8,591,415,742)
                     
Income tax                    
Current   721,641,277    (42,003,796)   (742,076,950)   (94,141,493)
Deferred   735,511,926    299,428,338    2,556,158,509    (250,139,871)
    1,457,153,203    257,424,542    1,814,081,559    (344,281,364)

 

NOTE 5 - INTANGIBLE ASSETS

 

      2019   2018 
   Note  $ 
Original values             
Balance at January 1      68,636,004,239    59,696,011,107 
Acquisitions of the period      12,494,337,292    6,432,412,015 
Balance at September 30      81,130,341,531    66,128,423,122 
              
Accumulated Amortization:             
Balance at January 1      (19,587,664,022)   (15,721,582,825)
Amortization of the period  10   (3,436,225,766)   (2,618,316,614)
Balance at September 30      (23,023,889,788)   (18,339,899,439)
Total net balance at September 30      58,106,451,743    47,788,523,683 

 

 

17

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Condensed Consolidated Interim Financial Statements

At September 30, 2019 presented in comparative format (Contd.)

 

NOTE 6 - BORROWINGS

 

   09.30.19   12.31.18 
   $ 
Non-current          
Bank borrowings   6,142,393,679    - 
Negotiable obligations   18,716,750,000    18,817,743,113 
Finance lease liabilities   3,457,595    22,158,879 
Cost of issuance of financial liability   (68,528,146)   (108,760,738)
Total Non-Current   24,794,073,128    18,731,141,254 
Current          
Bank borrowings   829,262,341    - 
Negotiable Obligations   3,268,417,960    2,251,252,054 
Finance lease liabilities   23,059,552    66,839,335 
Cost of issuance of financial liability   (10,542,792)   - 
Total Current   4,110,197,061    2,318,091,389 
Total   28,904,270,189    21,049,232,643 

 

Breakdown of borrowings:

 

   2019   2018 
  $ 
Balance at January 1   21,049,232,643    15,351,507,921 
Borrowings obtained   7,653,478,425    28,749,390 
Borrowings paid   (2,789,960,729)   (912,082,980)
Accrued interest   1,271,241,464    1,037,091,984 
Foreign Exchange differences   2,163,875,410    9,946,418,683 
Inflation adjustment   (443,597,024)   246,608,346 
Net Balance at September 30   28,904,270,189    25,698,293,344 

 

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.

 

 

18

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Condensed Consolidated Interim Financial Statements

At September 30, 2019 presented in comparative format (Contd.)

 

NOTE 6 - BORROWINGS (Contd.)

 

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 September 30, 2019, the reasonable value of negotiable obligations issued in February 2017 is of $21,422,214,392. 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).

 

On August 9, 2019, the Company has signed two loan agreements: (a) the onshore loan agreement for US$85,000,000 and (b) the offshore loan agreement for US$35,000,000. The lenders were Citibank N.A., Industrial and Commercial Bank of China (Argentina) S.A., Banco Galicia y Buenos Aires S.A.U. and Banco Santander Río S.A.

 

The term of the loan contracts will be thirty-six months, as from the disbursement date.

 

The capital under the loan agreements will be repaid in nine equal and consecutive quarterly installments, the first capital payment made one year after the disbursement date, and will accrue interest: (i) with respect to the Onshore Loan Agreement, at a fixed rate of nominal annual 9.75%; (ii) with respect to the Offshore Loan Agreement, at a variable rate equivalent to (a) the LIBOR rate plus (b) an applicable margin of 5.500% annual nominal plus (c) the applicable withholding tax.

 

In order to guarantee the repayment of the loan agreements, the Company constituted a trust under which it was assigned fiduciary for guarantee purposes in accordance with the provisions of article 1680 and concordant of the Civil and Commercial Code of the Nation and for the benefit of each and every one of the lending banks, as beneficiaries (a) the collection rights, whether charged directly by the Company or a third party for the account and / or order of the Company, with respect to the total flow of funds for import and export services provided by Terminal de Cargas Argentinas (business unit of the Company), including but not limited to storage, handling, refrigeration and scanning of merchandise in any of the Airports of the Company (with the exception of 15% corresponding to the total revenues of the Concession, in accordance with the provisions of clause 5 of the Memorandum Agreement); and (b) the collection rights of the Company as a trustee pursuant to the provisions of article 11.4 of the Negotiable Obligations guarantee contract between the Company and Citibank dated January 17, 2017, in the event of termination, expropriation or rescue of the Concession Contract; including the right to receive and withhold all payments pursuant to them and any other proceeds thereof, fiduciary assigned under guarantee of the Negotiable Obligations by the Company under the Negotiable Obligations Guarantee Trust. Said assignment has been authorized by Resolution No. 61/2019 of the ORSNA dated August 8, 2019.

 

 

19

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Condensed Consolidated Interim Financial Statements

At September 30, 2019 presented in comparative format (Contd.)

 

NOTE 7 - BALANCES AND TRANSACTIONS WITH RELATED PARTIES

 

Balances with other related companies at September 30, 2019 and December 31, 2018 are as follows:

 

   09.30.19   12.31.18 
   $ 
Trade receivables net - Current          
Other related companies   52,857,809    64,431,019 
    52,857,809    64,431,019 
           
Other current receivables          
Other related companies   2,090,911    8,838,056 
    2,090,911    8,838,056 
           
Accounts payable and other - Current          
Other related companies   177,029,975    194,424,713 
    177,029,975    194,424,713 
           
Provisions and other charges          
Other related companies   1,728,126,249    586,924 
    1,728,126,249    586,924 

 

During the nine-month periods ended September 30, 2019 and 2018 the Company has charged to the cost $173,289,572 and $99,521,658 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 nine-month periods ended September 30, 2019 and 2018 the Company has charged at cost $45,684,567 and $36,717,361, respectively with Servicios Integrales América for out sourcing of systems and technology.

 

During the nine-month periods ended September 30, 2019 and 2018, the Company has charged with Helport S.A. to intangible assets $72,794,294 and $486,550,353 respectively and at cost $260,844,326 and $180,583,784 respectively.

 

During the period ended September 30, 2018, the Company has allocated intangible assets for $9,342,023 corresponding to Mendoza's work carried out by Jose Cartellone - Helport - UTE.

 

During the nine-month period ended at September 30, 2019 and 2018 dividends have been paid to the shareholders according to their shareholding for $1,202,313,411 and $304,688,621 respectively.

 

At September 30, 2019 and December 31, 2018 the Company owed the Argentine National Government $426,820,024 and $447,791,328, respectively, corresponding to the specific allocation of revenues of each year (see Note 10) and has recorded a receivable for $5,027,989,805 and $5,575,791,194 respectively corresponding to the Trust for Strengthening to fund the infrastructure works of AA2000.

 

Furthermore, short-term compensation to key management was $104,611,393 and $58,982,712 for the nine month periods ended at September 30, 2019 and 2018 respectively.

 

 

20

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Condensed Consolidated Interim Financial Statements

At September 30, 2019 presented in comparative format (Contd.)

 

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

 

In connection with foreign exchange transactions related to the technical and administrative assistance agreements with Corporación América Sudamericana and Ogden Corporation, on November 23, 2012 The Company was notified of a foreign exchange summon initiated by the Banco Central de la República Argentina (Central Bank of the República Argentina or BCRA, for the acronym in Spanish) 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, for the acronym in Spanish) 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.

 

NOTE 8 - BAD DEBT PROVISIONS

 

   2019   2018 
   $ 
Initial balance at January 1   442,395,058    314,664,533 
IFRIC 9 adjustments   -    (146,523,107)
Balance at January 1 - Restated   442,395,058    168,141,426 
Increases (*)   1,992,016,211    321,791,949 
Usage   (85,371,065)   - 
Inflation adjustment   (169,846,024)   (48,027,096)
Final Balance at September 30   2,179,194,180    441,906,279 

 

(*) As of September 30, 2019 and 2018 includes $1,432,112,609 and $96,212,622 respectively in Distribution and selling expenses (Note 10), $559,903,602, and $225,579,327 in Exchange difference (Note 4).

 

 

21

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Condensed Consolidated Interim Financial Statements

At September 30, 2019 presented in comparative format (Contd.)

 

NOTE 9 - PROVISIONS AND OTHER CHARGES

 

   Note  At January 1,
2019		   Increases   Decreases   Inflation
adjustment		   Accruals   Exchange rate
differences		   At September
30, 2019		   Total Non
Current		   Total
Current		 
Litigations      91,672,724    8,262,544    (13,734,742)   (24,303,909)   -          -    61,896,617    59,178,045    2,718,572 
Related parties  7   586,924    -    -    (160,675)   -    -    426,249    426,249    - 
Deferred income      194,572,598    351,783,097    -    -    (342,130,326)   -    204,225,369    170,126,616    34,098,753 
Trust for works- Portfolio of projects 2012/2014      206,406,589    2,046,801,283    (1,988,347,521)   (63,347,046)   -                   -    201,513,305    201,513,305    - 
Guarantees received      66,641,476    117,490,668    (77,899,387)   (16,784,352)   -    -    89,448,405    89,448,405    - 
Upfront fees from concessionaires      179,993,127    16,007,973    -    -    (31,683,750)   -    164,317,350    37,315,055    127,002,295 
Dividends to be paid  7   -    2,411,257,637    (1,202,313,411)   (283,815,057)   -    802,570,831    1,727,700,000    1,727,700,000    - 
Total of provisions and others liabilities      739,873,438    4,951,603,202    (3,282,295,061)   (388,411,039)   (373,814,076)   802,570,831    2,449,527,295    2,285,707,675    163,819,620 

 

   Note  At January 1,
2018		   Increases   Decreases   Inflation
adjustment		   Accruals   Exchange rate
differences		   At September
30, 2018		   Total Non
Current		   Total
Current		 
Litigations      118,538,388    31,580,718    (26,966,439)   (28,472,225)   -    -    94,680,442    92,424,271    2,256,171 
Related parties      866,566    -    -    (212,095)   -           -    654,471    654,471      
Deferred income      222,430,059    161,360,198    (9,521,378)   (2,596,732)   (211,040,525)   -    160,631,622    117,860,353    42,771,269 
Trust for works- Portfolio of projects 2012/2014      152,503,751    1,520,455,479    (1,407,635,934)   (45,200,790)   -    -    220,122,506    220,122,506    - 
Guarantees received      63,236,177    79,088,766    (24,242,300)   (18,472,499)   -    -    99,610,144    99,610,144    - 
Upfront fees from concessionaires      224,607,983    12,371,827    -    -    (46,522,201)   -    190,457,609    41,887,014    148,570,595 
Dividends to be paid  7   498,086,463    -    (304,688,621)   (193,397,842)   -    -    -    -    - 
Total of provisions and others liabilities      1,280,269,387    1,804,856,988    (1,773,054,672)   (288,352,183)   (257,562,726)   -    766,156,794    572,558,759    193,598,035 

 

 

22

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Condensed Consolidated Interim Financial Statements

At September 30, 2019 presented in comparative format (Contd.)

 

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

 

Item  Cost of sales   Distribution and
selling expenses		   Administrative
expenses		   Total 
   $ 
Nine month period ended at 09.30.19                    
Specific allocation of revenues   3,751,089,661    -    -    3,751,089,661 
Airport services and maintenance   3,359,389,646    -    4,199,625    3,363,589,271 
Amortization of intangible assets   3,356,549,884    2,466,280    77,209,602    3,436,225,766 
Depreciation of property, plant and equipment   8,326,889    -    -    8,326,889 
Salaries and social security contributions   3,450,074,899    47,042,259    363,749,993    3,860,867,151 
Fees for services   201,965,447    15,336,124    82,517,511    299,819,082 
Public utilities and contributions   574,739,198    3,144,712    1,268,476    579,152,386 
Taxes   122,806,097    1,220,084,268    230,733,814    1,573,624,179 
Office expenses   574,215,080    8,615,796    116,481,926    699,312,802 
Insurance   49,214,172    12,050    1,709,743    50,935,965 
Advertising expenses   -    72,351,635    -    72,351,635 
Bad debts charges   -    1,432,112,609    -    1,432,112,609 
Board of Directors and Supervisory Committee fees   -    -    21,761,588    21,761,588 
Amortization right of use   102,562,276    -    -    102,562,276 
Other   14,936,693    4,622    4,211,336    19,152,651 
Total at 09.30.19   15,565,869,942    2,801,170,355    903,843,614    19,270,883,911 
                     
Nine month period ended at 09.30.18                    
Specific allocation of revenues   3,641,919,063    -    759,860    3,642,678,923 
Airport Services and maintenance   3,314,095,211    19,947,227    38,722,504    3,372,764,942 
Amortization of intangible assets   2,589,644,502    3,521,045    25,151,067    2,618,316,614 
Depreciation of property, plant and equipment   9,122,717    -    -    9,122,717 
Salaries and social security contributions   3,182,934,287    82,730,662    416,524,140    3,682,189,089 
Fees for services   147,080,458    9,148,396    101,182,205    257,411,059 
Public utilities and contributions   558,548,907    3,655,110    3,089,741    565,293,758 
Taxes   109,204,893    1,301,180,447    193,721,298    1,604,106,638 
Office expenses   330,876,498    12,279,210    312,462,692    655,618,400 
Insurance   54,548,661    -    4,220,282    58,768,943 
Advertising expenses   31,276,972    42,915,084    28,201,584    102,393,640 
Bad debts charges   -    96,212,622    -    96,212,622 
Board of Directors and Supervisory Committee fees   23,565,131    -    -    23,565,131 
Other   12,785,980    143,981    6,188,300    19,118,261 
Total at 09.30.18   14,005,603,280    1,571,733,784    1,130,223,673    16,707,560,737 

 

23

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Condensed Consolidated Interim Financial Statements

At September 30, 2019 presented in comparative format (Contd.)

 

NOTE 11- FOREIGN CURRENCY ASSETS AND LIABILITIES

 

Item  Foreign currency type and
amount at 09.30.19		  Foreign
exchange
rates		   Amount in local
currency at
09.30.19		  Amount in local
currency at
12.31.18		 
          $
Assets                     
Current Assets                     
Cash and cash equivalents  US$   81,099,303    57.3900   4,654,288,991   4,063,211,143 
Trade receivables  US$   73,747,551    57.3900   4,232,371,937   2,565,418,995 
Investments  US$   -    -   -   256,829,095 
Total current assets               8,886,660,928   6,885,459,233 
Total assets               8,886,660,928   6,885,459,233 
                      
Liabilities                     
Current Liabilities                     
Commercial accounts payable and others  US$   15,001,634    57.5900   863,944,112   502,618,119 
   EUR   1,874,848    62.8422   117,819,575   98,301,226 
   CAD   5,443,056    43.1273   234,744,290   - 
Borrowings  US$   70,025,296    57.5900   4,032,756,796   2,223,703,387 
Lease liabilities  US$   2,683,191    57.5900   154,524,945   - 
Provisions and other charges  US$   30,000,000    57.5900   1,727,700,000   - 
Total current liabilities               7,131,489,718   2,824,622,732 
                      
Non-Current Liabilities                     
Borrowings  US$   433,700,527    57.5900   24,976,813,334   18,820,246,053 
Lease liabilities  US$   210,281    57.5900   12,110,111   - 
Total non-current liabilities               24,988,923,445   18,820,246,053 
Total liabilities               32,120,413,163   21,644,868,785 
Net liability position               23,233,752,235   14,759,409,552 

 

24

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Condensed Consolidated Interim Financial Statements

At September 30, 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 September 30, 2019 and December 31, 2018 include $5,520,910 and $7,602,017 corresponding to guarantees granted to third parties in connection with lease agreements.

 

NOTE 13 - CAPITAL STOCK

 

At September 30, 2019 capital stock is as follows:

 

   Par Value 
   $ 
Paid-in and subscribed   1,006,046,708 
Registered with the Public Registry of Commerce   1,006,046,708 

 

The Company’s capital stock is comprised of 258,517,299 common shares of $1 par value and one vote each and 747,529,409 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 5673/5663, 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 ordinary and special general meeting of classes A, B, C and D and special of preferred shares held on July 25, 2019 resolved to distribute a dividend to the preferred shares for an amount of $ 118,276,769. Likewise, the preferential dividend accrued for the nine-month period ended September 30, 2019 is $101,788,172 and will be recorded at the time of its approval by the Shareholders' Meeting.

 

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.

 

25

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Condensed Consolidated Interim Financial Statements

At September 30, 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 JULY 25, 2019

 

-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.

 

On the other hand, the ordinary general assembly, special of classes A, B, C and D and special of preferred shares, convened for April 15, 2019, which was adjourned for April 30, 2019 decided not to address the Agenda item referred to the destination of the result of the 2018 year, for which purpose a new assembly was convened for June 13, 2019, which was adjourned for July 11 and then for July 25, 2019.In the assembly held on July 25, 2019, it was resolved:

 

-That the result of the year ended December 31, 2018 has the following destination:

 

(i)$62,651,480 for the constitution of the legal reserve;
(ii)$118,276,769 to the distribution of dividends corresponding to the preferred shares held by the national State, payable in 118,276,769 preferred shares of a peso ($ 1) nominal value each;
(iii)the sum of US$ 50,000,000 (US dollars fifty million), or its equivalent in pesos (which at the date of the meeting amounted to $ 2,143,500) to the distribution of cash dividends among shareholders of classes A, B, C and D shares, in accordance with their respective holdings; and
(iv)the remainder, that is, $ 4,949,288,026 for the constitution of a facultative reserve for the execution of future works plans.

 

-issue 118,276,769 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 $887,769,939 to $1,006,046,708, i.e., in the amount of $118,276,769, through the issuance of 118,276,769 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.

 

26

 

Aeropuertos Argentina 2000 S.A.

Registration number with the Superintendency of Corporations: 1645890

Notes to the Condensed Consolidated Interim Financial Statements

At September 30, 2019 presented in comparative format (Contd.)

 

NOTE 16 - EARNINGS PER SHARE

 

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

 

   09.30.19   09.30.18 
Income for the year, net accrued dividends   3,653,231,307    (1,782,535,447)
Amount of ordinary shares   258,517,299    258,517,299 
Earnings per shares   14,1315    (6,8952)

 

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

 

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

 

27

 

Aeropuertos Argentina 2000 S.A.

Condensed Consolidated Interim Financial Statements

At September 30, 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, for the acronym in Spanish) and should be read in conjunction with the Condensed Consolidated Interim Financial Statements as of September 30, 2018 presented in comparative form, prepared in accordance with IFRS standards.

 

In compliance with the provisions of the CNV regulations, the values corresponding to the interim periods of 2019 and 2018 of this informative review are expressed in constant currency at September 30, 2019, in accordance with International Accounting Standard N ° 29 “Financial information in hyperinflationary economies”. For more information, see Note 3.7 to the Consolidated Condensed Interim Financial Statements at September 30, 2019.

 

1. General considerations

 

International Financial Reporting Standards (IFRS)

 

The 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 period ended at September 30, 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 Curtain 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;

 

 

28

 

Aeropuertos Argentina 2000 S.A.

Condensed Consolidated Interim Financial Statements

At September 30, 2019 presented in comparative format

Summary of Information required by Resolution N ° 368/01

of the National Securities Commission

 

1. General considerations (Contd.)

 

-Multilevel parking;
-Road System - Stage 1;
-New Running Parallel to Header 35; and
-Adaptation Sector 1 for platform

 

Jorge Newbery Airport:

 

Works in execution:

-External works - sidewalks - landscaping - coastal filling and underground parking - Stage 1 is over;
-Demolition Terminal C (is again being tendered);
-New beacon substations and control systems;
-Platform and Perimeter Path Lighting.

 

Comodoro Rivadavia Airport:

 

The work of the New Passenger Terminal of 7560 m2 and New Parking is finished

 

The following works are being executed:

-Rehabilitation of track, taxi and platform;
-New Beaconing.

 

Córdoba Airport:

 

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;

 

The following works are finished:

-Track resurfacing and rehabilitation filming,
-Track Beacon and New vertical signage posters in movement area;
-Expansion of the commercial platform.

 

Bariloche Airport:

 

The Works of Re functionalization of the Terminal are in execution. Retaking with the pending Stages.

 

 

29

 

Aeropuertos Argentina 2000 S.A.

Condensed Consolidated Interim Financial Statements

At September 30, 2019 presented in comparative format

Summary of Information required by Resolution N ° 368/01

of the National Securities Commission

 

1. General considerations (Contd.)

 

Tucumán Airport:

 

A project is being developed for the new Tucumán terminal.

 

San Fernando Airport:

 

The following works are in execution:

-New Control Tower;
-Work of Sewer and Storm Infrastructure Stage 1; and
-Reshaping Beacon.

 

RACA demolition ended.

 

San Juan Airport:

 

The execution of the remodeling work of the passenger terminal progresses.

The work on Track Rehabilitation and Platform Extension was completed.

 

Salta Airport:

 

The following works are in execution:

-Expansion Boarding Rooms and Control Areas; and
-Parking extension.

 

La Rioja Airport:

 

The following works are in execution:

-New Passenger Terminal; and
-New parking.

 

Mar del Plata Airport:

 

The Passenger Terminal Re Functionalization Work is in the final stage.

 

Esquel Airport:

 

The Integral Remodeling Work of the Passenger Terminal and TWR Control is underway.

 

El Palomar Airport:

 

The New Terminal in Hangars 1 and 2 is in progress - Stage 1.

 

 

30

 

Aeropuertos Argentina 2000 S.A.

Condensed Consolidated Interim Financial Statements

At September 30, 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.

 

The commercial platform expansion work is completed.

 

Catamarca Airport:

 

The Taxing Margins Standardization Work is in progress

 

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 at September 30, 2019, 2018, 2017, 2016 and 2015 respectively, is presented.

 

    09.30.19    09.30.18    09.30.17(*)    09.30.16(*)    09.30.15(*) 
    Thousands $  
Current Asset   11,306,365    11,215,895    3,578,403    2,017,884    1,047,027 
Non-current Assets   63,348,265    53,840,099    11,870,270    7,843,356    6,060,328 
Total Assets   74,654,630    65,055,994    15,448,673    9,861,240    7,107,355 
                          
Current liabilities   12,408,105    6,331,683    2,553,145    2,939,116    1,864,010 
Non-Current Liabilities   29,579,787    30,580,954    7,181,924    2,518,914    2,126,347 
Total Liabilities   41,987,892    36,912,637    9,735,069    5,458,030    3,990,357 
Net equity attributable to majority shareholders   32,643,904    28,111,869    5,705,164    4,396,322    3,112,229 
Non-controlling interest   22,834    31,488    8,440    6,888    4,769 
Net Equity   32,666,738    28,143,357    5,713,604    4,403,210    3,116,998 
Total   74,654,630    65,055,994    15,448,673    9,861,240    7,107,355 

 

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

 

 

31

 

Aeropuertos Argentina 2000 S.A.

Condensed Consolidated Interim Financial Statements

At September 30, 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 nine month periods ended at September 30, 2019, 2018, 2017, 2016 and 2015.

 

    09.30.19    09.30.18    09.30.17(*)   09.30.16(*)   09.30.15(*)
    Thousands $  
Gross Profit   9,660,920    10,524,063    4,284,545    3,838,366    1,924,681 
Administrative and distribution and selling expenses   (3,705,014)   (2,701,957)   (1,117,570)   (911,708)   (524,848)
Other income and expenses, net   598,054    555,941    224,869    (11,834)   (1,725)
Operating profit   6,553,960    8,378,047    3,391,844    2,914,824    1,398,108 
Financial income and expenses   (3,904,716)   (8,591,416)   (578,211)   (648,424)   (396,183)
Result by exposure to changes in the acquisition power of currency   (708,307)   (1,210,393)   -    -    - 
Result of investments accounted for using the equity method   -    -    -    -    (156)
Income before tax   1,940,937    (1,423,762)   2,813,633    2,266,400    1,001,769 
Income tax   1,814,082    (344,281)   (853,843)   (784,722)   (348,229)
Result of the period   3,755,019    (1,768,043)   1,959,790    1,481,678    653,540 
Other comprehensive incomes   -    -    -    -    - 
Comprehensive income for the period   3,755,019    (1,768,043)   1,959,790    1,481,678    653,540 
Result attributable to majority shareholders   3,753,606    (1,780,079)   1,959,682    1,479,931    652,055 
Non-Controlling interest   1,413    12,036    108    1,747    1,485 

 

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

 

4. Cash flow structure

 

    09.30.19    09.30.18    09.30.17(*)    09.30.16(*)    09.30.15(*) 
Cash Flows (used in) / generated by operating activities   (5,038,298)   2,283,932    (850,800)   1,349,068    389,170 
Cash Flow  generated by / (used in) investing activities   321,014    (373,280)   (3,008)   (5,088)   (5,870)
Cash Flow generated by / (used in) financing activities   3,557,248    (1,216,772)   2,400,882    (884,277)   (412,000)
Net Cash Flow (used in) / generated by the period   (1,160,036)   693,880    1,547,074    459,703    (28,700)

 

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

 

 

32

 

Aeropuertos Argentina 2000 S.A.

Condensed Consolidated Interim Financial Statements

At September 30, 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 nine-month periods ended at September 30, 2019 and 2018

 

Results of operations

 

·           Income

 

The following table shows the composition of consolidated revenues for the nine month periods ended at September 30, 2019 and 2018:

 

Revenues  09.30.19  

%

revenues

   09.30.18  

%

revenues

 
   Thousands $       Thousands $     
Aeronautical revenues   15,571,969    61.75%   14,158,553    57.74%
Non-Aeronautical revenues   9,646,642    38.25%   10,364,663    42.26%
Total   25,218,611    100.00%   24,523,216    100.00%

 

The following table shows the composition of the aeronautical revenues for the nine month periods ended at September 30, 2019 and 2018:

 

Aeronautical revenues  30.09.19  

%

revenues

   30.09.18  

%

revenues

 
   Thousands $       Thousands $     
Landing fee   1,447,789    9.30%   1,309,619    9.25%
Parking fee   562,546    3.61%   524,689    3.71%
Air station use rate   13,561,634    87.09%   12,324,245    87.04%
Total   15,571,969    100.00%   14,158,553    100.00%

 

Costs of sale

 

The cost of sales had the following variation:

 

   Thousands $ 
Costs of sales for the period ended at 09.30.19   15,565,870 
Costs of sales for the period ended at 09.30.18   14,005,603 
Variation   1,560,267 

 

Administrative expenses

 

The administrative expenses had the following variation:

 

   Thousands $ 
Administrative expenses for the period ended at 09.30.19   903,844 
Administrative expenses for the period ended at 09.30.18   1,130,224 
Variation   (226,380)

 

 

33

 

Aeropuertos Argentina 2000 S.A.

Condensed Consolidated Interim Financial Statements

At September 30, 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 nine month periods ended at September 30, 2019 and 2018 (Contd.)

 

Distribution and selling expenses

 

The distribution and selling expenses had the following variation:

 

   Thousands $ 
Distribution and selling expenses for the period ended at 09.30.19   2,801,170 
Distribution and selling expenses for the period ended at 09.30.18   1,571,734 
Variation   1,229,436 

 

Financial income and expenses

 

Net financial income and expenses totaled losses of $3,904,715 thousand during the nine-month period ended at September 30, 2019 with respect to thousands of $8,591,416 losses during the same period of the previous year.

 

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

 

Other incomes and expenditures

 

The other net income and expense item recorded an income of approximately $598,054 thousand during the nine month period ended at September 30, 2019 with respect to an income of $555,941 thousand in the same period of the previous year.

 

Liquidity and Capital Resources

 

Capitalization

 

The total capitalization of the Company at September 30, 2019 amounted to $61,571,008 thousand composed of thousands of $28,904,270 of borrowings and a net equity worth of $32,666,738 thousand, while the total capitalization of the Company at September 30, 2018 amounted to thousands of $53,841,651 comprised of thousands of $25,698,293 of borrowings and a net equity worth of thousands of $28,143,358.

 

The debt as a percentage of total capitalization amounted to approximately 46.94% at September 30, 2019 and 47.73% at September 30, 2018.

 

Financing

 

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

 

 

34

 

Aeropuertos Argentina 2000 S.A.

Condensed Consolidated Interim Financial Statements

At September 30, 2019 presented in comparative format

Summary of Information required by Resolution N ° 368/01

of the National Securities Commission

 

6. Index