5. SEGMENT INFORMATION

The different segments in which the Group is organized take into consideration the different activities from which the Group obtains income and incurs expenses. The aforementioned organizational structure is based on the way in which the highest decision-making authority analyzes the main financial and operating magnitudes for making decisions about resource allocation and performance assessment also considering the Group’s business strategy.

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Upstream

The Upstream segment carries out all activities relating to the exploration, development and production of oil and natural gas.

Revenue is generated from (i) the sale of produced oil to the Downstream segment and, marginally, from its sale to third parties; (ii) the sale of produced gas to the Gas and Power segment.

•

Gas and Power

On March 15, 2016, the Gas and Power Executive Vice-presidency was created, and during the current fiscal year, the complete scope of management of this new business unit was determined.

The Gas and Power segment generates its revenue from the development of activities relating to: (i) the natural gas commercialization to third parties and the Downstream segment, (ii) the commercial and technical operation of LNG regasification terminals in Bahía Blanca and Escobar, by hiring two regasification vessels, (iii) the natural gas distribution, and (iv) the generation of conventional and renewable electricity.

In addition to the proceeds derived from the sale of natural gas to third parties and the intersegment, which is then recognized as a “purchase” to the Upstream segment, and including since 2017, the Stimulus Plan for Surplus Natural Gas Injection, Gas and Power accrues a fee in its favor with the Upstream segment to carry out such commercialization.

•

Downstream

The Downstream segment develops activities relating to: (i) oil refining and petrochemical production, (ii) commercialization of refined and petrochemical products obtained from such processes, (iii) logistics related to the transportation of oil and gas to refineries and the transportation and distribution of refined and petrochemical products to be marketed in the different sales channels.

It obtains its income from the marketing mentioned in item (ii) above, which is developed through the Retail, Industry, Agro, LPG, Chemicals and Lubricants and Specialties businesses.

It incurs in all expenses relating to the aforementioned activities, including the purchase of oil from the Upstream segment and third parties and the natural gas to be consumed in the refinery and petrochemical industrial complexes from the Gas and Power segment.

•

Central Administration and Others

It covers other activities, not falling into the aforementioned categories, mainly including corporate administrative expenses and assets and construction activities.

Sales between business segments were made at internal transfer prices established by the Group, which generally seek to approximate market prices.

Operating profit and assets for each segment have been determined after consolidation adjustments.

As required by IFRS 8, comparative information has been given retroactive effect by the creation of the new segment.


	Upstream			Gas and Power		Downstream		Central Administration and Others			Consolidation Adjustments⁽¹⁾			Total
For the year ended December 31, 2017
Revenues from sales		739			56,805		195,321		2,534			(2,586	)		252,813
Revenues from intersegment sales		115,955			4,075		988		7,133			(128,151	)		—

Revenues		116,694			60,880		196,309		9,667			(130,737	)		252,813

Operating profit / (loss)		3,877			3,259		15,813		(4,400	)		(2,476	)		16,073
Income / (loss) from equity interests in associates and joint ventures		—			634		794		—			—			1,428
Depreciation of property, plant and equipment		45,279	⁽³⁾		290		6,926		1,017			—			53,512
Recovery of property, plant and equipment and intangible assets⁽²⁾		5,032			—		—		—			—			5,032
Acquisition of property, plant and equipment		39,411			3,867		8,179		1,639			—			53,096
Assets		251,525			45,395		158,800		53,934			(3,936	)		505,718
For the year ended December 31, 2016
Revenues from sales		18,745			26,514		162,538		2,303			—			210,100
Revenues from intersegment sales		95,398			3,212		925		7,447			(106,982	)		—

Revenues		114,143			29,726		163,463		9,750			(106,982	)		210,100

Operating profit / (loss)		(26,845	)		2,008		3,093		(1,615	)		(887	)		(24,246	)
Income / (loss) from equity interests in associates and joint ventures		(1	)		302		287		—			—			588
Depreciation of property, plant and equipment		38,125			290		5,507		830			—			44,752
Impairment of property, plant and equipment and intangible assets⁽²⁾		34,943	⁽³⁾		—		—		—			—			34,943
Acquisition of property, plant and equipment		51,396			2,134		9,839		1,679			—			65,048
Assets		236,173			25,866		125,536		34,739			(1,175	)		421,139
For the year ended December 31, 2015
Revenues from sales		16,044			14,003		124,959		1,130			—			156,136
Revenues from intersegment sales		64,243			2,184		807		6,182			(73,416	)		—

Revenues		80,287			16,187		125,766		7,312			(73,416	)		156,136

Operating profit / (loss)		7,535			1,498		6,948		(2,331	)		2,938			16,588
Income / (loss) from equity interests in associates and joint ventures		—			267		51		—			—			318
Depreciation of property, plant and equipment		23,075			255		2,913		442			—			26,685
Impairment of property, plant and equipment and intangible assets⁽²⁾		2,535			—		—		—			—			2,535
Acquisition of property, plant and equipment		48,598			469		8,874		1,939			—			59,880
Assets		223,035			13,659		100,146		26,708			(95	)		363,453

(1)	Corresponds to the elimination of income among segments of the YPF Group.

(2)	See Notes 2.c) and 8.

(3)	Includes depreciation of charges for impairment of property, plant and equipment.

The distribution of revenues by geographic area, according to the markets for which they are intended, for the years ended on December 31, 2017, 2016 and 2015, and property, plant and equipment by geographic area as of December 31, 2017, 2016 and 2015 are as follows:


	Revenues						Property, plant and equipment
	2017		2016		2015		2017		2016		2015
Argentina		230,728		193,707		143,851		353,868		307,350		269,914
Mercosur and associated countries		8,694		7,964		6,302		575		664		553
Rest of the world		8,785		6,142		4,175		—		—		438
Europe		4,606		2,287		1,808		—		—		—

Total		252,813		210,100		156,136		354,443		308,014		270,905

Intangible assets are mainly geographically located in Argentina.

As of December 31, 2017, no foreign client represents 10% or more of the Group’s revenue from its ordinary activities.