YPF : Q3 2018 Earning Release

YPF S.A.

Consolidated Results

Q3 2018

CONTENT

1. MAIN MILESTONES AND ECONOMIC MAGNITUDES FOR Q3 2018 ............................................. 3

2. ANALYSIS OF RESULTS FOR Q3 2018 .......................................................................................... 4

3. ANALYSIS OF OPERATING RESULTS BY BUSINESS SEGMENT FOR Q3 2018 ......................... 7

3.1 UPSTREAM ....................................................................................................................................................... 7

3.2 DOWNSTREAM .............................................................................................................................................. 10

3.3 GAS AND ENERGY .......................................................................................................................................... 13

3.4 CORPORATE AND OTHER ............................................................................................................................... 14

3.5 RELATED COMPANIES .................................................................................................................................... 14

4. LIQUIDITY AND SOURCES OF CAPITAL ...................................................................................... 14

5. TABLES AND NOTES ..................................................................................................................... 16

5.1 CONSOLIDATED STATEMENT OF INCOME ..................................................................................................... 17

5.2 CONSOLIDATED BALANCE SHEET .................................................................................................................. 18

5.3 CONSOLIDATED STATEMENT OF CASH FLOW ............................................................................................... 19

5.4 CONSOLIDATED BUSINESS SEGMENT INFORMATION ................................................................................... 20

5.5 MAIN FINANCIAL MAGNITUDES IN U.S. DOLLARS ......................................................................................... 21

5.6 MAIN PHYSICAL MAGNITUDES ...................................................................................................................... 22

Adj. EBITDA for Q3 2018 was Ps 36.8 billion, 116.0% higher than Q3 2017.

Q3 2017	Q2 2018	Q3 2018	Var.% Q3 18 / Q3 17	Jan-Sep 2017	Jan-Sep 2018	Var.% 2018 / 2017
66,034	93,034	121,188	83.5%	Revenues (Million Ps)	183,199	290,045	58.3%
3,050	1,746	12,685	315.9%	Operating income (Million Ps)	11,027	31,785	188.2%
246	1,508	13,207	5268.7%	Net income (Million Ps)	710	20,701	2815.6%
17,043	24,782	36,821	116.0%	Adj. EBITDA (Million Ps)	50,046	98,095	96.0%
17,043	24,782	36,821	116.0%	Recurring Adj. EBITDA	50,046	86,115	72.1%
0.24	5.08	33.50	14047.5%	Earnings per share (Ps per Share)	0.84	54.05	6335.2%
15,903	19,338	27,232	71.2%	Capital Expenditures (Million Ps)	40,882	61,444	50.3%

Adjusted EBITDA = Operating Income + Depreciation and Impairment of Property, Plant and Equipment and Intangible Assets + Amortization of Intangible Assets + Unproductive Exploratory Drillings.

Recurring Adjusted EBITDA: It is Adjusted EBITDA excluding the profit from the revaluation of YPF S.A.'s investment in YPF Energía Eléctrica (YPF EE) for Ps 12.0 billion in Q1 2018.

(Amounts are expressed in billions of Argentine pesos, except where indicated)

1. MAIN MILESTONES AND ECONOMIC MAGNITUDES FOR Q3 2018

• • Revenues for Q3 2018 were Ps 121.2 billion, 83.5% higher than Q3 2017.

• • Operating income for Q3 2018 was Ps 12.7 billion, 315.9% higher than Q3 2017.

• • Net income for Q3 2018 was a gain of Ps 13.2 billion compared to net income of Ps 0.2 billion

  recorded for Q3 2017.

• • Hydrocarbon production for Q3 2018 was 529.1 Kboed, 4.3% lower than Q3 2017.

• • Refinery processing levels in the Downstream business segment for Q3 2018 were 87.7%, 4.6%

  lower than Q3 2017.

• • Capital expenditures in property, plant and equipment for Q3 2018 were Ps 27.2 billion, 71.2% higher

  than Q3 2017.

2. ANALYSIS OF RESULTS FOR Q3 2018

Revenues for Q3 2018 were Ps 121.2 billion, 83.5% higher than Q3 2017, due primarily to the following factors:

• • Diesel revenues increased Ps 18.6 billion, 89.6% higher than Q3 2017, due to a 74.3% increase in diesel mix average prices and an 8.8% increase in sales volumes. Sales volumes of Infinia Diesel, a premium diesel product, increased by 16.4%;

• • Gasoline revenues increased Ps 10.4 billion, 69.7% higher than Q3 2017, due to a 64.9% increase in gasoline mix average prices and a 2.9% increase in sales volumes.

• • Natural gas revenues increased Ps 8.5 billion, 73.8% higher than Q3 2017, due to higher average prices while sales volumes remained stable year over year;

• • Retail natural gas revenues (residential and small business and companies) increased Ps 3.5 billion, 101.3% higher than Q3 2017, mainly driven by YPF's controlled company Metrogas S.A. ("Metrogas"), which recorded a 122.0% increase in prices, partially offset by a 3.9% decrease in volumes sold through its distribution network;

• • Fuel oil revenues in the Argentine domestic market decreased Ps 0.7 billion, 85.1% lower than Q3 2017, due to a 91.6% decrease in sales volumes to power generation plants which was partially offset by a 78.0% increase in prices;

• • Remaining domestic sales increased Ps 9.8 billion, 114.2% higher than Q3 2017. We highlight the higher sales of LPG that increased 153.5%, jet fuel by 127.9%, of petrochemical products by 76.2%, coal by 189.8%, fertilizers by 86.4% and lubricants by 44.1%, in each case mainly due to the higher prices of these products and the larger traded volumes of virgin naphtha;

• • Export revenues increased by Ps 5.1 billion, 84.5% higher than Q3 2017. This was primarily due to a Ps 2.6 billion or 161.0% increase in jet fuel sales, due to higher average sales prices measured in Argentine pesos of 154.2% and a 2.7% increase in the volumes sold. Exports of petrochemical products increased by Ps 0.9 billion or 110.2% due to higher sales volumes and prices. Petroleum coal exports were also recorded for Ps 0.7 billion, which had not been registered in Q3 2017.

Cost of sales for Q3 2018 was Ps 96.0 billion, 71.1% higher than Q3 2017. This includes a 63.2% increase in production costs, substantially affected by the increase in depreciations, and a 115.5% increase in purchases. Cash costs, which include costs of production and purchases but exclude depreciation and amortization, increased by 84.1%. This increase was driven by the following factors:

a) Costs of production:

• • Depreciation of property, plant and equipment increased Ps 8.8 billion, 66.7% higher than Q3 2017, due to an increase in the value of assets based on their valuation in U.S. dollars, which is the functional currency of the Company;

• • Lifting costs increased Ps 5.6 billion, 51.3% higher than Q3 2017, reflecting a 61.2% increase in the unit indicator in Argentine peso terms, weighted by the lower production of the period;

• • Royalties and other production related costs increased Ps 4.9 billion, 108.5% higher than Q3 2017. Of this increase, Ps 3.7 billion was related to an increase in royalties for crude oil production, and Ps 1.1 billion was related to an increase in royalties for natural gas production, due to higher wellhead values of these products, which are set in U.S. dollars;

• • Transportation costs increased Ps 1.1 billion, 47.1% higher than Q3 2017, primarily due to increases in rates and higher transported volumes;

• • Refining costs increased Ps 0.5 billion, 18.5% higher than Q3 2017, due primarily to higher costs for repair and maintenance services, for the consumption of materials, spare parts and other supplies, reflecting a 24.3% increase in the unit indicator in Argentine peso terms, weighted by the lower volumes processed during the period.

b) Purchases:

• • Fuel imports increased Ps 8.1 billion, 722.1% higher than Q3 2017, mainly due to imports of premium diesel and gasoline due to higher volumes and higher international prices of these products, also considering the devaluation occurred during the period;

• • Crude oil purchases from third parties increased Ps 4.0 billion, 67.7% higher than Q3 2017, due to a 131.4% increase in the average purchase price from third parties in Argentine peso terms. This increase in the purchase price was mainly due to the increase in the international reference price, and considering the devaluation of the Argentine peso against the U.S. dollar, partially offset by a decrease in purchased volumes of approximately 27.5%;

• • Purchases of natural gas from other producers for resale in the retail distribution segment (residential and small businesses and industries) increased Ps 2.9 billion, 138.0% higher than Q3 2017 due to an increase in the purchase prices of approximately 145.1%, partially offset by a decrease in volumes purchased of 2.9%;

• • Biofuel purchases increased Ps 1.7 billion, 37.1% higher than Q3 2017, due to higher FAME and ethanol biofuel prices of 53.3% and 21.2%, respectively, and a 1.7% increase in volumes purchased of ethanol biofuel, partially offset by lower volumes purchased of FAME of 2.3%;

• • Fertilizer purchases for resale increased Ps 1.3 billion, 204.6% higher than Q3 2017, driven by a 135.6% increase in purchase prices and a 29.3% increase in volumes purchased.

Selling expenses for Q3 2018 were Ps 7.1 billion, 51.9% higher than Q3 2017. This was driven primarily by increases in transport expenses, primarily due to higher volumes sold and higher rates paid for domestic transport of fuels, as well as higher charges for depreciation of fixed assets, higher personnel expenses, higher charges in allowances for bad debt and environmental contingencies and higher taxes on banks debits and credits.

Administration expenses for Q3 2018 were Ps 3.7 billion, 68.8% higher than Q3 2017. The increase was principally due to higher personnel expenses, higher IT costs, many of which are dollarized, higher charges related to institutional advertising and higher depreciation of fixed assets.