YPF Sociedad Anónima : Item 22 Management Report

YPF S.A.

Shareholders' Meeting to be held on April 30, 2021

REPORT ON IMPAIRMENT CHARGE OF PROPERTY, PLANT AND EQUIPMENT

20161

This report is made available for its consideration at the shareholders' meeting to be held on April 30, 2021, in relation to item 22 of the agenda "Compliance with the order of the National Court of Appeals in Commercial Matters regarding the treatment of the impairment charge of property, plant and equipment for Fiscal Year No. 40 ended December 31, 2016".

1) APPLICABLE ACCOUNTING STANDARD.

YPF S.A. (YPF or the "Company") is a corporation (sociedad anónima) whose securities are listed on the Buenos Aires Stock Exchange and the New York Stock Exchange ("NYSE"), and is subject to the permanent supervision of the National Securities Commission (Comisión Nacional de Valores - the "CNV"), and to the requirements of the US Securities and Exchange Commission ("SEC").

The Company applies the international financial reporting standards ("IFRS") adopted by the CNV since 2012. The accounting policy establishing the impairment in value of property, plant and equipment, and accounting judgments and estimates related to impairment are described in the notes to the financial statements of the Company since fiscal year ended December 31, 2012. These accounting policies and estimates were applied by the Company consistently over the period under analysis (fiscal years 2012-2016) in accordance with the IFRS. The following is a summary of the main aspects to be evaluated (as they arise from the notes to the financial statements 2012 to 2016 of the Company. The relevant paragraphs of these notes are included in the exhibits hereto):

• Applicable accounting standards: Uniform implementation of the IFRS. Under the CNV Regulations, these standards are of mandatory application since fiscal year ended December 31, 2012. (See EXHIBIT I)
• Valuation of property plant and equipment: are valued at their acquisition cost plus all the costs directly related to the location of the asset and to bringing the asset to the condition required for its intended use. Recoverability of these assets is revised once a year or whenever there is an indication of impairment in value of these assets. (See EXHIBIT II)
• Impairment of property, plant and equipment: In order to evaluate the recoverability of Upstream assets, they have been grouped into four Cash-GeneratingUnits or "CGUs" (one groups the assets of fields with crude oil reserves, and three the assets of fields with natural gas reserves, according to Argentina's basins - Neuquina, Noroeste and Austral Basins-),

1 The complete Annual Reports filed by the Company and referenced in this report can be found at the

SEC's web site

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which is the best reflection of how the Company currently makes its assets decisions for the generation of independent cash flows. (See EXHIBIT III)

• Methodology used in the estimation of the recoverable value: The methodology used to estimate the recoverable amount of property, plant and equipment consists of using the higher of: i) the calculation of the value in use, based on expected future cash flows from the use of such assets, discounted at a rate that reflects the weighted average cost of capital, and, if available, ii) the price that would be received in a regular transaction between market participants to sell the asset as of the date of these consolidated financial statements, less the disposal costs of such assets.
  In the assessment of the value in use, cash flow forecasts based on the best estimate of income and expense available for each CGU using sector inputs, past results and future expectations of business evolution and market development are utilized. The most sensitive aspects included in the cash flows used in all the CGUs are the purchase and sale prices of hydrocarbons, the regulations in force and cost evolution estimates.
  The valuation of cash flows from Upstream assets is based on a complex model that uses cash projections covering the economically productive useful lives of the oil and gas fields and is limited by the termination of exploitation concessions, permits, agreements or contracts. The estimated cash flows contemplate the level of reserves, "commodity" prices, estimates of future investments required in relation to undeveloped oil and gas reserves, production costs, field depletion rates, contractual conditions and discount rates, among other factors. The unproved reserves are weighted by risk factors associated thereto. (See EXHIBIT IV)
• Reserves estimation: Estimating crude oil and gas reserves forms part of the Company's decision-making process. The volume of reserves, among other things, is used to evaluate the recoverability of investments in Exploration and Production assets. YPF prepares its estimates and assumptions related to crude oil and gas reserves based on the rules and regulations established for the crude oil and gas industry and by SEC. Besides, within the framework of the 20F annual document filed by YPF with the SEC, the independent auditors' reports on oil and natural gas reserves are included. (See EXHIBIT V)

It should be noted that from fiscal year 2016 to date, the Company continued to apply the IFRS uniformly and the same accounting policies in relation to the impairment in value of property, plant and equipment.

2) IMPAIRMENT CHARGE IN 2016 AND PREVIOUS YEARS.

The application of the criteria of impairment of property, plant and equipment mentioned in section 1), which are defined under IAS 36, determined the impairment of the CGU Oil in fiscal years 2015 and 2016. There were several for reasons for such impairment, but the main cause was the drop in oil prices projected in each of those years. The variation in oil prices (average prices for each year) is shown below:

Changes in the price of oil 2012/2016 (usd/barrel)

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In 2015, international oil prices experienced a sharp fall. At first, local prices, which did not follow the trend of international oil prices, were not significantly affected. However, as the low price scenario was confirmed (in relative terms) at international level, the local realization price per barrel gradually declined. This situation had an impact on projected oil realization price curves in the cash flows of each year. Both in 2015 and 2016, the projected curves ended converging in international values that reflected declines in the long term. Therefore, the CGU Oil was impaired in 2015, and this worsened in 2016. This situation is clearly described in the notes to the financial statements of each fiscal year transcribed below.

Financial Statements 2015

Provision for impairment of fixed assets and intangible assets

As indicated in Note 1.b.8 and 1.b.9, as a general criterion, the method used to estimate the recoverable amount of fixed assets and intangible assets mainly consists in the calculation of the value in use, based on the future estimate cash flows resulting from the exploitation of the relevant assets, discounted at a rate that reflects the weighted average capital employed.

For fiscal year 2015, the discount rate was 10.33% after taxes (the discount rate applied for fiscal year 2014 was 10.86% after taxes).

Calculations of crude oil price estimates for fiscal year 2015 for the CGU Oil-YPF of the Exploration and Production Segment have taken into account the disengagement of internal market prices from international prices with respect to this product in the latest years, based on the negotiations between country's Producers and Refineries and Argentine Government policies intended to preserve the sector activity levels and ensure the crude oil supply for the country. Therefore, the following local market price presumptions have been considered for the different varieties of crude oil: i) for 2016 and 2017 the Company has considered local market prices according to the negotiations between Producers and Refineries based on prices currently effective since January 2016, resulting in an estimate of US$/Bbl 67.5 for Medanito crude oil, US$/Bbl 54.9 for Escalante crude oil and US$/Bbl 55.9 for Cañadón Seco crude oil; ii) for 2018,

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2019 and 2020, it has been considered the estimates for the local prices based on the the estimation of the international price (adjusted by the quality of each type of crude oil, freight and the relative shortage situation in the local market) set on the basis of estimate Brent crude oil values according to analysts' consensus estimates available as of December 31, 2015 (at US$/Bbl 68.7 for 2018, US$/Bbl 68.3 for 2019 and US$/Bbl 69.3 for 2020); and iii) thereafter, a projected price curve is considered on the basis of an adjustment by United States of America forecasted inflation.

Based on the above mentioned methodology and presumptions, the Group has recorded a charge for impairment of fixed assets with respect to the CGU Oil - YPF of the Exploration and Production Segment of 2,361 as of December 31, 2015, mainly due to a decrease in the short- term price of oil in the local market and a reduction in the expectations of medium and long term international prices. The recoverable amount of the CGU Oil - YPF, after taxes, amounts to 76,829

Financial Statements 2016

Provision for impairment of property, plant and equipment and intangible assets

The method used to estimate the recoverable amount of property, plant and equipment and intangible assets is described in detail in Notes 2.b.8 and 2.b.9.

The impairment analysis is performed on the year-end date or whenever there is evidence of impairment of the recoverable value. As a result of negotiations between Argentine producers and refiners in the second half of 2016, there has been a gradual 6% reduction in the prices of sales of Medanito and Escalante crude oil on the local market (2% monthly as of August 2016). Moreover, in January 2017, the producers and refiners reached a new agreement for the transition to international prices, in which a path of prices was established for the sale of oil in the domestic market, for the purpose of achieving parity with the international market during 2017. This readjustment of prices in the domestic market and other signs that would point to a convergence with international prices in the near future, coupled with a decline in the prices expected in the medium term compared to the estimates as of December 31, 2015, have been considered evidence of impairment of the value of the assets of the CGU Oil-YPF.

Accordingly, the following local market price assumptions have been taken into account for different varieties of crude oil in order to set such expectations: (i) for 2017, it derives from the prices agreed upon between producers and refiners mentioned above which result in prices of US$/bbl 57.5 for Medanito crude oil and US$/bbl 49.1 for Escalante crude oil; (ii) for 2018, 2019 and 2020, the local market prices have been estimated based on the international price estimates based on available analyst consensus; and (iii) subsequently, estimated prices rise based on predicted inflation in the United States.

On the contrary, in previous years (2014, 2013 and 2012), no impairment charges in CGU Oil's assets were recorded (as mentioned in the respective financial statements. See EXHIBIT III). The above was due to the fact that, in those years, the market reflected high oil realization prices (in relative terms), as disclosed in the annual report on the financial statements for fiscal year 2014, which in its relevant part, is transcribed below:

Annual Report on Financial Statements 2014

Characteristics of the Company

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The average prices corresponding to the price of a barrel of Brent crude oil were U.S.$ 99.02, U.S.$ 108.64 and U.S.$ 111.65 in 2014, 2013 and 2012, respectively. Notwithstanding the aforementioned variation in trading values, the price of crude oil in the domestic market is defined through negotiations among local producers and refiners. These negotiations occur mainly as a consequence of the absence of surplus export volumes of crude oil and due to the domestic market's needs, taking also into account Resolution No. 1077/14 of the Ministry of Economy and Public Finance, which establishes a regime of export retentions for certain hydrocarbon products, which in practice determines ceilings on the values that each company could obtain from the export of hydrocarbons. The average purchase/sale price per barrel of crude oil for the Company has been U.S.$ 78.16, U.S.$ 73.72 and U.S.$ 71.93 for 2014, 2013 and 2012, respectively.

Therefore, in fiscal years 2012, 2013 and 2014, projected cash flows (recoverable value) for the CGU Oil for each of those years largely exceed the carrying value due to multiple factors, but mainly, due to the projected price curve which contemplated future business expectations at such time. The methodology for estimating the recoverable value is described in the financial statements (See EXHIBIT III).

Finally, regarding the information detailed in financial statements 2015 and 1016, it was possible to verify that the information is sufficient in accordance with international standards, and in line with the accounting statements prepared by leading companies in the industry (both domestic and foreign), which also faced recoverability issues in 2015 and 2016.

3) OTHER BACKGROUND INFORMATION

It should be noted that in another action for annulment of the Shareholders' Meeting held on April 27, 2018, brought by the same shareholder, Mr. Paz Herrera, in the case entitled "PAZ HERRERA, RICARDO ADRIAN VS YPF S.A. ON ORDINARY PROCEEDINGS" File No. 16320/2019"2, a report was issued by a forensic accounting expert witness in relation to the application of the accounting charge for impairment of property, plant and equipment corresponding to Fiscal Year ended December 31, 2016 and the partial reversal of such charge in Fiscal Year ended December 31, 2017.

In this respect, the report filed by the aforementioned court-appointed accountant concluded that the methodology used by the Company to apply the impairment charge in fiscal year 2017: i) complies with the International Accounting Standards, and ii) does not change from one fiscal year to another. The conclusions arising from the aforementioned report, as well as those from the report issued by the technical consultant appointed by YPF S.A. are transcribed in Exhibit VI hereto.

It should be noted that none of these reports was challenged by the plaintiff in the aforementioned case, and that the technical consultant appointed by plaintiff reviewed the documents and participated, jointly with the accounting expert witness, in the analysis, making no objections or observations thereto.

In brief, three independent chartered accountants participated in the case mentioned above, one designated by the court and one by each party, and all of them concluded that the accounting standards were properly applied by the Company.

2Final judgment has not yet been rendered.

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