Document and Entity Information	12 Months Ended
Document and Entity Information	Dec. 31, 2019 shares
Cover [Abstract]
Entity Registrant Name	CORPORACION AMERICA AIRPORTS S.A.
Entity Central Index Key	0001717393
Entity Interactive Data Current	Yes
Trading Symbol	caap
Entity Current Reporting Status	Yes
Document Registration Statement	false
Entity Filer Category	Accelerated Filer
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Common Stock, Shares Outstanding	160,022,262
Document Type	20-F
Document Period End Date	Dec. 31, 2019
Amendment Flag	false
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	FY
Entity Emerging Growth Company	false
Entity Shell Company	false
Document Annual Report	true
Document Transition Report	false
Document Shell Company Report	false

CONSOLIDATED STATEMENT OF INCOME - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
CONSOLIDATED STATEMENT OF INCOME
Revenue	$ 1,558,640	$ 1,426,145	$ 1,575,153
Cost of services	(1,138,425)	(971,425)	(1,029,983)
Gross profit	420,215	454,720	545,170
Selling, general and administrative expenses	(168,291)	(171,899)	(194,201)
(Impairment loss) / Reversal of previous impairment	(42,801)		3,065
Other operating income	17,259	20,207	19,953
Other operating expense	(2,747)	(4,054)	(4,838)
Operating income	223,635	298,974	369,149
Share of loss in associates	(5,353)	(4,146)	(15,841)
Income before financial results and income tax	218,282	294,828	353,308
Financial income	51,889	76,281	62,555
Financial loss	(233,521)	(331,147)	(302,047)
Inflation adjustment	(25,391)	(36,460)
Income before income tax expense	11,259	3,502	113,816
Income tax expense	(17,079)	(14,101)	(46,925)
(Loss) / Income for the year	(5,820)	(10,599)	66,891
Attributable to:
Owners of the parent	9,099	7,125	63,491
Non-controlling interest	(14,919)	(17,724)	3,400
(Loss) / Income for the year	$ (5,820)	$ (10,599)	$ 66,891
Earnings per share attributable to the owners of the parent
Weighted average number of ordinary shares (thousands)	160,022	158,848	148,118
Basic and diluted earnings per share (In dollars per share)	$ 0.06	$ 0.04	$ 0.43

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(Loss) / Income for the year	$ (5,820)	$ (10,599)	$ 66,891
Items that will not be reclassified subsequently to profit or loss:
Remeasurement of defined benefit obligation	(208)	277	18
Items that may be subsequently reclassified to profit or loss:
Share of other comprehensive income / (loss) from associates	35	(1,150)	432
Currency translation adjustment	(24,847)	(247,712)	(25,585)
Other comprehensive loss for the year, net of income tax	(25,020)	(248,585)	(25,135)
Total comprehensive (loss) / income for the year	(30,840)	(259,184)	41,756
Attributable to:
Owners of the parent	(4,295)	(154,213)	34,926
Non-controlling interest	(26,545)	(104,971)	6,830
Total comprehensive (loss) / income for the year	$ (30,840)	$ (259,184)	$ 41,756

CONSOLIDATED STATEMENT OF FINANCIAL POSITION - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Non-current assets
Intangible assets, net	$ 3,002,121	$ 2,933,542
Property, plant and equipment, net	79,612	74,299
Right-of-use asset	8,380
Investments in associates	9,929	10,886
Other financial assets at fair value through profit or loss	3,309	3,372
Other financial assets at amortized cost	2,494	2,339
Deferred tax assets	147,475	153,486
Other receivables	119,954	133,193
Trade receivables	1,326	1,419
Total non-current assets	3,374,600	3,312,536
Current assets
Inventories	11,302	9,769
Other financial assets at fair value through profit or loss	17,341	38,007
Other financial assets at amortized cost	66,413	42,972
Other receivables	101,676	66,531
Current tax assets	10,311	13,701
Derivative financial instruments	27
Trade receivables	104,877	116,897
Cash and cash equivalents	195,696	244,865
Total current assets	507,643	532,742
Total assets	3,882,243	3,845,278
EQUITY
Share capital	160,022	160,022
Share premium	180,486	180,486
Free distributable reserve	385,055	385,055
Non-distributable reserve	1,351,883	1,351,883
Currency translation adjustment	(392,101)	(378,803)
Legal reserves	176	176
Other reserves	(1,324,887)	(1,324,731)
Retained earnings	403,255	394,156
Total attributable to owners of the parent	763,889	768,244
Non-controlling interests	434,725	454,453
Total equity	1,198,614	1,222,697
Non-current liabilities
Borrowings	1,033,221	1,027,751
Deferred tax liabilities	233,115	271,175
Other liabilities	848,410	871,596
Lease liabilities	5,783
Trade payables	798	1,508
Total Non-current liabilities	2,121,327	2,172,030
Current liabilities
Borrowings	175,123	98,907
Other liabilities	230,122	225,448
Lease liabilities	3,144
Current tax liabilities	5,156	11,555
Trade payables	148,757	114,641
Total current liabilities	562,302	450,551
Total liabilities	2,683,629	2,622,581
Total equity and liabilities	$ 3,882,243	$ 3,845,278

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY - USD ($) $ in Thousands	Share Capital	Share Premium	Free Distributable Reserves	Non Distributable Reserves	Legal Reserves	Currency Translation Adjustment	Other reserves	Retained Earnings	Total	Non-controlling interests	Total
Balance at Dec. 31, 2016	$ 20	$ 0	$ 1,907,328	$ 0	$ 2	$ (188,721)	$ (1,344,022)	$ 74,543	$ 449,150	$ 354,174	$ 803,324
Shareholders contributions (Note 25f and 25b)			6,600						6,600		6,600
Income / (loss) for the year								63,491	63,491	3,400	66,891
Refund of cash contributions (Note 25b)			(28,893)						(28,893)		(28,893)
Conversion (Note 25a)	1,499,980		(1,499,980)
Other comprehensive (loss) / income for the year						(28,579)	14		(28,565)	3,430	(25,135)
Changes in non-controlling interests (Note 25f and 25d)										(25,645)	(25,645)
Balance at Dec. 31, 2017	1,500,000	0	385,055	0	2	(217,300)	(1,344,008)	138,034	461,783	335,359	797,142
Adjustment on adoption of IFRS 9 (net of tax)								2,356	2,356	542	2,898
Adjustment on initial application of IAS 29 (Note 2.X)								246,815	246,815	196,408	443,223
Adjusted balances at January 1, 2018	1,500,000		385,055		2	(217,300)	(1,344,008)	387,205	710,954	532,309	1,243,263
Shareholders contributions (Note 25f and 25b)										43,703	43,703
Income / (loss) for the year								7,125	7,125	(17,724)	(10,599)
Transfer to legal reserve					174			(174)
Reverse stock split (Note 25a)	(1,351,883)			1,351,883
Initial Public Offering (Note 25a and 25c)	11,905	180,486							192,391		192,391
Other comprehensive (loss) / income for the year						(161,503)	165		(161,338)	(87,247)	(248,585)
Changes in non-controlling interests (Note 25f and 25d)							19,112		19,112	(16,588)	2,524
Balance at Dec. 31, 2018	160,022	180,486	385,055	1,351,883	176	(378,803)	(1,324,731)	394,156	768,244	454,453	1,222,697
Shareholders contributions (Note 25f and 25b)										27,506	27,506
Income / (loss) for the year								9,099	9,099	(14,919)	(5,820)
Other comprehensive (loss) / income for the year						(13,298)	(96)		(13,394)	(11,626)	(25,020)
Changes in non-controlling interests (Note 25f and 25d)							(60)		(60)	(20,689)	(20,749)
Balance at Dec. 31, 2019	$ 160,022	$ 180,486	$ 385,055	$ 1,351,883	$ 176	$ (392,101)	$ (1,324,887)	$ 403,255	$ 763,889	$ 434,725	$ 1,198,614

CONSOLIDATED STATEMENT OF CASH FLOWS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Cash flows from operating activities
(Loss) / Income for the year	$ (5,820)	$ (10,599)	$ 66,891
Adjustments for:
Amortization and depreciation	182,270	175,829	138,130
Deferred income tax	(31,346)	(24,999)	(41,843)
Current income tax	48,425	39,100	88,768
Share of loss in associates	5,353	4,146	15,841
(Impairment loss) / Reversal of previous impairment	42,801		(3,065)
(Gain) / Loss on disposals of property, plant and equipment and intangible assets	(16)	3,170	3,210
Unpaid concession fees	47,658	45,581	44,159
Low value, short term and variable lease payments	(2,831)
Changes in liability for concessions	88,488	86,331	98,122
Interest expense	92,687	96,301	115,223
Other financial results, net	(36,210)	(22,467)	(28,955)
Net foreign exchange	37,390	91,434	59,221
Other accruals	22,763	4,027	7,033
Inflation adjustment	41,032	35,901
Acquisition of Intangible assets	(353,725)	(206,622)	(255,488)
Income tax paid	(45,213)	(45,664)	(105,716)
Changes in working capital	(153,419)	(79,808)	(250,953)
Net cash (used in) / provided by operating activities	(19,713)	191,661	(49,422)
Cash flows from investing activities
Cash contribution in associates	(4,425)	(2,907)
Acquisition of other financial assets	(103,421)	(76,671)	(51,202)
Disposals of other financial assets	110,005	39,406	31,608
Purchase of Property, plant and equipment	(17,117)	(11,139)	(11,503)
Acquisition of Intangible assets	(960)	(1,176)	(1,664)
Loans with related parties	4,157	(3,349)	(12,762)
Proceeds from sale of Property, plant and Equipment	23	49	175
"Piana di Castello" land advance		(3,583)
Others	(408)	185	186
Net cash used in investing activities	(12,146)	(59,185)	(45,162)
Cash flows from financing activities
Proceeds from cash contributions	27,506	43,703	6,600
Refund of cash contributions			(28,893)
Additional acquisitions in subsidiaries		(40,731)
Disposal of partial interest in subsidiaries		56,638
Proceeds from borrowings	196,977	194,546	594,439
Initial Public Offering		195,601
Initial Public Offering expenses paid		(5,495)
Release of guarantee deposits		92,913
Release of restricted cash			30,873
Leases payments	(5,130)
Loans paid	(90,457)	(517,253)	(250,276)
Interest paid	(78,832)	(70,637)	(106,953)
Guarantee deposit	(3,007)		(92,999)
Dividends paid	(22,482)	(14,965)	(23,836)
Net cash provided by/ (used in) financing activities	24,575	(65,680)	128,955
(Decrease) / Increase in cash and cash equivalents	(7,284)	66,796	34,371
Cash and cash equivalents
At the beginning of the year	244,865	221,601	182,116
Effects of exchange rate changes and inflation adjustment on cash and cash equivalents	(41,885)	(43,532)	5,114
(Decrease) / Increase in cash and cash equivalents	(7,284)	66,796	34,371
At the end of the year	$ 195,696	$ 244,865	$ 221,601

General information and initial public offering	12 Months Ended
General information and initial public offering	Dec. 31, 2019
General information and initial public offering
General information and initial public offering	1 General information and initial public offering General Information Corporación América Airports S.A. (the “Company” or “CAAP”) is a holding company primarily engaged through its operating subsidiaries in the acquisition, development and operation of airport concessions. The Company and its operating subsidiaries are collectively referred to hereinafter as the “Group”. The Company was formed as a private limited liability company under the laws of the Grand Duchy of Luxembourg on December 14, 2012. The Company is ultimately controlled by Southern Cone Foundation (“SCF”), a foundation organized under the laws of the Principality of Liechtenstein. The address of its registered office is in Vaduz. The Group currently has operations in Argentina, Brazil, Uruguay, Armenia, Italy, Ecuador and Peru. Initial Public Offering In connection with the initial public offering, the Company was converted on September 14, 2017, from a Luxembourg Limited Liability Company named A.C.I. Airports International S.à r.l. (“ACI”) into a Luxembourg Corporation and changed its name to Corporación América Airports S.A. (the “Conversion”). In conjunction with the Conversion, all of the Company’s outstanding equity interests were converted into one billion five hundred million (1,500,000,000) shares of common stock which were held by ACI Airports S.à r.l. (the “Shareholder”). In connection with the Conversion, Corporación América Airports S.A. continues to hold all assets of ACI and assumes all of its liabilities and obligations. The main adjustment of the Conversion principally gave effect to the recognition of the share capital of Corporación América Airports S.A. for a total nominal value of USD 1,500 million (USD 1 per share) and the elimination of the shares of A.C.I. Airports International S.à r.l. for a total amount of USD 20 thousand and of the Free distributable reserves for a total amount of USD 1,499.9 million. On January 19, 2018, the Shareholder approved a 1-to-10.12709504 reverse stock split of its common shares, consequently decreasing the outstanding common shares from 1,500,000,000 common shares to 148,117,500 common shares (the “Reverse Stock Split”). The nominal value of USD 1.00 of each common share did not change as a result of the Reverse Stock Split. It implied a reduction of share capital of USD 1,351,883 and an increase in Non-Distributable Reserves. In accordance with the provisions of the amended and restated articles of association of the Company, the non-distributable reserve may be distributed to its shareholders, from time to time, on a pro rata basis. On February 2, 2018, CAAP submitted the final prospectus to the U.S. Securities and Exchange Commission as an initial public offering of common shares of Corporación América Airports S.A. which was declared effective by such commission. The offering was of 11,904,762 common shares with a nominal value of USD 1 and the Shareholder offered 16,666,667 common shares which were fully subscribed. As a consequence of the Initial Public Offering, the share capital of CAAP has increased to 160,022,262 shares. The initial public offering price per common share was USD 17.00. As a result, CAAP had proceeds of USD 195,601 net of underwriting discounts and commissions but before other issuing expenses. On February 5, 2018, the Executive Committee; in accordance with (i) the provisions of the articles of associations of the Company, and (ii) the resolutions taken by the Company´s board of directors which determined and confirmed the creation and composition of the Executive Committee and also the powers delegated to it with respect of the Initial Public Offering; resolved to approve the issuance of the new shares, acknowledged having received sufficient evidence showing that the subscription price of the new shares had been paid, and the amendment of the articles of associations in respect of the new share capital of USD 160,022,262. These consolidated financial statements have been approved for issuance by the Company on April 3, 2020.

Basis of presentation and accounting policies

12 Months Ended

Dec. 31, 2019

Basis of presentation and accounting policies

Basis of presentation and accounting policies

2 Basis of presentation and accounting policies

A. Summary of significant accounting policies

The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. These policies have been consistently applied to all the periods presented, unless otherwise stated.

Basis of preparation

The Group’s consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) of the International Accounting Standards Board (IASB) and the Interpretations of the International Financial Reporting Interpretations Committee (IFRIC) applicable to companies reporting under IFRS. The consolidated financial statements comply with IFRS as issued by the International Accounting Standards Board (IASB).

Presentation in the consolidated statement of financial position differentiates between current and non-current assets and liabilities. Assets and liabilities are regarded as current if they mature within one year or within the normal business cycle of the Group, or are held for sale.

The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying the Group’s accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in Note 2.F.

Several balance sheet consolidated statements of final position and consolidated statement of income items have been combined in the interests of clarity. These items are stated and explained separately in the notes to the consolidated financial statements. The statement of income is structured according to the function of expense method (nature of the expenses is classified in notes).

The consolidated financial statements are presented in thousands of U.S. Dollars unless otherwise stated. All amounts are rounded off to thousands of U.S. Dollars unless otherwise stated.

As such, insignificant rounding differences may occur. A dash (“—”) indicates that no data was reported for a specific line item in the relevant financial year or period or when the pertinent figure, after rounding, amounts to nil.

The fiscal year begins on January 1 and ends on December 31.

New and amended standards adopted by the Group

The group has applied the following standard for the first time for their annual reporting period commencing on January 1, 2019:

·

IFRS 16 Leases

·

Prepayment Features with Negative Compensation - Amendments to IFRS 9

·

Long-term Interests in Associates and Joint Ventures - Amendments to IAS 28

·

Annual Improvements to IFRS Standards 2015 - 2017 Cycle

·

Plan Amendment, Curtailment or Settlement - Amendments to IAS 19

·

Interpretation 23 Uncertainty over Income Tax Treatments.

The group had to change its accounting policies as a result of adopting IFRS 16. The group elected to apply the simplified transition approach and has not restated comparative amounts for the year prior to first adoption. This is disclosed in Note 2.Y. The other amendments and interpretations listed above did not have any material impact on the amounts recognized in prior periods and are not expected to significantly affect the current or future periods.

During the period ended December 31, 2018, the group has applied the following standards and amendments for the first time for their annual reporting period commencing on January 1, 2018:

- IFRS 9 Financial Instruments

- IFRS 15 Revenue from Contracts with Customers

- Annual Improvements 2014‑2016 cycle

- Interpretation 22 Foreign Currency Transactions and Advance Consideration

The group had to change its accounting policies and make certain retrospective adjustments following the adoption of IFRS 9 as disclosed in Note 3.A(iii).

New and amended standards not yet adopted for CAAP

Certain new accounting standards and interpretations have been published that are not mandatory for December 31, 2019 reporting periods and have not been early adopted by the group. The group’s management is currently evaluating the potential impact of the new standards and interpretations that are set out below.

Other standards and interpretations non-significant for the Company’s financial statements:

- Amendments to IAS 1 and 8 – Definition of Material. These amendments must be applied prospectively for annual periods beginning on or after January 1, 2020.

- Amendments to IFRS 3 – Definition of a Business. Entities are required to apply the amendments to transactions for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after January 1, 2020.

- Amendments to references to the conceptual framework in IFRS standards (issued in March 2018). These amendments must be applied as from January 1, 2020.

There are no other standards that are not yet effective and that would be expected to have a material impact on the entity in the current or future reporting periods and on foreseeable future transactions.

B Group accounting policies

(1) Subsidiaries and transactions with non-controlling interests

Subsidiaries are all entities over which the Group has control. The Group controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Subsidiaries are fully consolidated from the date on which control is exercised by the Company and are no longer consolidated from the date control ceases.

The acquisition method is used to account for the business combinations. The consideration transferred for the acquisition of a subsidiary is the fair value of the assets transferred, the liabilities incurred or assumed at the date of exchange, and the equity interest issued by the group. Acquisition-related costs are expensed as incurred. Identifiable assets acquired, liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date.

Any non-controlling interest in the acquiree is measured either at fair value or at the non-controlling interest’s proportionate share of the acquiree’s net assets. Accounting treatment is applied on an acquisition by acquisition basis.

The excess of the aggregate of the consideration transferred and the amount of any non-controlling interest in the acquiree over the fair value of the identifiable net assets acquired is recorded as goodwill. If this consideration is lower than the fair value of the net assets of the subsidiary acquired, the difference is recognized directly in the Consolidated Statement of Income.

Transactions with non-controlling interests that do not result in a loss of control are accounted as equity transactions with owners of the Company. For purchases from non-controlling interests, the difference between any consideration paid and the relevant share acquired of the carrying value of net assets of the subsidiary is recorded in equity. Gains or losses on disposals to non-controlling interests are also recorded in equity.

Material inter-company transactions, balances and unrealized gains and losses have been eliminated in consolidation. However, financial gains and losses from intercompany transactions may arise when the subsidiaries have different functional currencies. These financial gains and losses are included in the Consolidated Statement of Income under Financial income and Financial loss.

(2) Associates

Associates are all entities over which the Group has significant influence but not control, generally accompanying a shareholding of between 20% and 50% of the voting rights. Investments in associates are accounted for by the equity method of accounting and are initially recognized at cost, and the carrying amount is increased or decreased to recognize the investor`s share of profit or loss of the investee after the date of acquisition. The Company’s investment in associates includes goodwill identified on acquisition, net of any accumulated impairment loss.

Unrealized gains or losses arising from transactions between the Group and its associates are eliminated to the extent of CAAP’s interest in the associates. Unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of associates have been adjusted where necessary to ensure consistency with the policies adopted by the Group. The Company’s pro-rata share of earnings in associates is recorded in the Consolidated Statement of Income under Share of loss in associates and Share of other comprehensive income/ (loss) from associates. The Company’s pro-rata share of changes in other reserves is recognized in the Consolidated Statement of Changes in Equity under Other Reserves.

(3) List of Subsidiaries

Detailed below are the subsidiaries of the Company which have been consolidated in the Consolidated Financial Statements. The percentage of ownership refers to the direct and indirect ownership of Corporación América Airports S.A in their subsidiaries at each period-end.

Holdings companies


				Percentage of ownership at
	Country of			December 31,
Company	incorporation	Local currency	Main activity	2019		2018		2017
Abafor S.A. (1)	Uruguay	Uruguayan pesos	Holding company	100.00	%	100.00	%	100.00	%
ACI Airport Sudamérica S.A.U.	Spain	Euros	Holding company	100.00	%	100.00	%	100.00	%
ACI Airports Italia S.A.U. (1)	Spain	Euros	Holding company	100.00	%	100.00	%	100.00	%
America International Airports LLC (AIA) (1)	USA	U.S. dollars	Holding company	100.00	%	100.00	%	100.00	%
Cargo & Logistics S.A. (1)	Argentina	Argentine pesos	Holding company	81.49	%	81.49	%	81.49	%
CASA Aeroportuaria S.A. (2)	Argentina	Argentine pesos	Holding company	—		99.98	%	99.98	%
Cedicor S.A.	Uruguay	Uruguayan pesos	Holding company	100.00	%	100.00	%	100.00	%
Cerealsur S.A.	Uruguay	Uruguayan pesos	Holding company	100.00	%	100.00	%	100.00	%
Corporación Aeroportuaria S.A. (2)	Argentina	Argentine pesos	Holding company	99.98	%	99.98	%	99.98	%
Corporación América Italia S.p.A.	Italy	Euros	Holding company	75.00	%	75.00	%	100.00	%
Corporación América S.A.	Argentina	Argentine pesos	Holding company	95.37	%	95.37	%	95.37	%
Corporación América Sudamericana S.A.	Panamá	U.S. dollars	Holding company	94.69	%	94.69	%	94.69	%
DICASA Spain S.A.U. (1)	Spain	Euros	Holding company	100.00	%	100.00	%	100.00	%
GOFI Investments S.L (3)	Spain	Euros	Holding company	—		—		100.00	%
Inframerica Participaçoes S.A. (1)	Brazil	Brazilian real	Holding company	99.97	%	99.96	%	99.96	%
Yokelet S.L. (1)	Spain	Euros	Holding company	100.00	%	100.00	%	100.00	%

(1) These companies do not have relevant net assets other than the share of ownership in the operating companies included in the table below.

(2) These companies were merged on June 30, 2019.

(3) This company was dissolved on March 15, 2018.

Operating companies


				Percentage of ownership at
	Country of			December 31,
Company	incorporation	Local currency	Main activity	2019		2018		2017
ACI do Brasil S.A.	Brazil	Brazilian real	Service company	99.99	%	99.99	%	—
Aerocombustibles Argentinos S.A.	Argentina	Argentine pesos	Fueling company	92.98	%	92.98	%	92.98	%
Aeropuerto de Bahía Blanca S.A.	Argentina	Argentine pesos	Airports Operation	81.06	%	81.06	%	81.06	%
Aeropuertos Argentina 2000 S.A.("AA2000") (4)	Argentina	Argentine pesos	Airports Operation	81.29	%	81.29	%	81.29	%
Aeropuertos del Neuquén S.A.	Argentina	Argentine pesos	Airports Operation	74.10	%	74.10	%	74.10	%
Armenia International Airports C.J.S.C.	Armenia	Dram	Airports Operation	100.00	%	100.00	%	100.00	%
Consorcio Aeropuertos Internacionales S.A.	Uruguay	Uruguayan pesos	Airports Operation	100.00	%	100.00	%	100.00	%
Enarsa Aeropuertos S.A.	Argentina	Argentine pesos	Fuel plants	76.29	%	76.29	%	76.29	%
Inframerica Concessionária do Aeroporto de Brasilia S.A. ("ICAB")	Brazil	Brazilian real	Airports Operation	50.98	%	50.98	%	50.98	%
Inframerica Concessionária do Aeroporto de São Gonçalo do Amarante S.A. ("ICASGA")	Brazil	Brazilian real	Airports Operation	99.98	%	99.98	%	99.97	%
Paoletti América S.A. (5)	Argentina	Argentine pesos	Service company	40.65	%	40.65	%	40.65	%
Puerta del Sur S.A.	Uruguay	Uruguayan pesos	Airports Operation	100.00	%	100.00	%	100.00	%
Servicios y Tecnología Aeroportuaria S.A.	Argentina	Argentine pesos	Service company	81.39	%	81.39	%	81.39	%
TCU S.A.	Uruguay	Uruguayan pesos	Service company	100.00	%	100.00	%	100.00	%
Terminal Aeroportuaria Guayaquil S.A. ("TAGSA") (6)	Ecuador	U.S. dollars	Airports Operation	49.99	%	49.99	%	49.99	%
Texelrío S.A.	Argentina	Argentine pesos	Service company	56.91	%	56.91	%	56.91	%
Toscana Aeroporti S.p.A. (7) (8)	Italy	Euros	Airports Operation	46.71	%	46.71	%	51.13	%
Villalonga Furlong S.A.	Argentina	Argentine pesos	Service company	81.50	%	81.50	%	81.50	%

(4) Includes a 9.35% direct interest of Cedicor S.A. in AA2000, acquired by Cedicor S.A. in 2011. This participation is subject to the authorization by the ORSNA pursuant to section 7.2 of the Argentine Concession Agreement. As of the date of issuance of these Consolidated Financial Statements, the ORSNA has not issued any resolution approving or rejecting the aforementioned transaction. While this approval is pending, all economic and political rights pertaining to the shares, including all distributed dividends, have been assigned to Cedicor S.A.

(5) The group has control over this company based on having majority representation in the board, power to direct the process of setting of financial and operating policies and execute the operational management of such Company.

(6) The group has control over this company based on having power to direct the process of setting of financial and operating policies and execute the operational management of such Company.

(7) The group has control over this company based on having a majority stake in Corporación América Italia S.A. that has 62.28% of ownership of Toscana Aeroporti S.p.A., power to direct the process of setting of financial and operating policies and execute the operational management of such Company.

(8) The group Toscana Aeroporti S.p.A. has control over the following companies: Jet Fuel Co. S.r.l., Parcheggi Peretola S.r.l., Toscana Aeroporti Engineering S.r.l., Toscana Aeroporti Handling S.r.l. and Vola S.r.l.

Summarized financial information in respect of each of the Group´s subsidiaries that has most significant non-controlling interests is set below. The summarized financial information below represents amounts before intragroup elimination.


	Toscana Aeroporti S.p.A.
	December 31,	December 31,
	2019	2018
Non-current assets	245,541	239,489
Current assets	55,248	51,192
Total assets	300,789	290,681
Non-current liabilities	60,650	65,552
Current liabilities	105,298	89,414
Total liabilities	166,523	154,966
Equity	134,266	135,715
Revenue	145,633	155,482
Gross profit	41,061	40,405
Operating income	25,938	26,795
Financial Results	(1,752)	(1,543)
Share of income in associates	35	43
Income tax expense	(8,174)	(7,927)
Net income	16,047	17,368
Other comprehensive loss for the year	(2,722)	(6,115)
Total comprehensive income for the year	13,325	11,253
Dividends paid	(14,774)	(11,757)

Increase/(Decrease) in cash
Provided by operating activities	24,166	24,552
Used in investing activities	(8,452)	(11,765)
Used in financing activities	(9,240)	(11,181)


	Terminal Aeroportuaria de
	Guayaquil S.A.
	December 31,	December 31,
	2019	2018
Non-current assets	63,914	46,009
Current assets	50,629	44,145
Total assets	114,543	90,154
Non-current liabilities	17,839	2,098
Current liabilities	49,616	45,130
Total liabilities	67,455	47,228
Equity	47,088	42,926
Revenue	109,608	89,226
Gross profit	37,650	37,844
Operating income	20,663	18,717
Financial Results	125	(49)
Share of income in associates	—	—
Income tax expense	(2,047)	(4,053)
Net income	18,741	14,615
Other comprehensive income for the year	36	63
Total comprehensive income for the year	18,777	14,678
Dividends paid	(14,616)	(16,954)

Increase/(Decrease) in cash
Provided by operating activities	8,233	24,743
Provided by / (Used in) investing activities	18,035	(427)
Used in financing activities	(619)	(22,298)


	Inframerica Concessionária do
	Aeroporto de Brasília S.A.
	December 31,	December 31,
	2019	2018
Non-current assets	1,022,213	1,114,656
Current assets	42,369	38,807
Total assets	1,064,581	1,153,463
Non-current liabilities	972,476	1,036,857
Current liabilities	121,564	99,566
Total liabilities	1,094,040	1,136,423
Equity	(29,459)	17,040
Revenue	102,438	107,359
Gross profit	23,069	20,905
Operating income	12,592	4,188
Financial Results	(112,933)	(113,639)
Share of income in associates	—	—
Income tax expense	—	41,989
Net loss	(100,341)	(67,462)
Other comprehensive loss for the year	(2,307)	(10,552)
Total comprehensive loss for the year	(102,648)	(78,014)
Dividends paid	—	—

Increase / (Decrease) in cash
(Used in) / Provided by operating activities	(34,947)	42,185
Used in investing activities	(106)	(344)
Provided by / (Used in) financing activities	43,286	(30,561)


	Aeropuertos Argentina 2000 S.A.
	December 31,	December 31,
	2019	2018
Non-current assets	1,223,668	1,053,818
Current assets	145,516	199,532
Total assets	1,369,184	1,253,350
Non-current liabilities	513,118	503,679
Current liabilities	217,989	146,274
Total liabilities	731,107	649,953
Equity	638,077	603,397
Revenue	924,842	813,248
Gross profit	222,733	257,940
Operating income	149,788	197,846
Financial Results	(62,682)	(137,265)
Share of income in associates	—	—
Income tax expense	11,647	(33,388)
Net income	98,753	27,193
Other comprehensive loss for the year	(19,094)	(214,547)
Total comprehensive income / (loss) for the year	79,659	(187,354)
Dividends paid	(52,354)	—

Increase / (Decrease) in cash
(Used in) / Provided by operating activities	(66,850)	57,527
Provided by / (Used in) investing activities	14,639	(3,732)
Provided by / (Used in) financing activities	12,469	(33,687)

C Foreign currency translation

(1) Functional and presentation currency

Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which the entity operates (‘the functional currency’).

The consolidated financial statements are presented in U.S. dollars, which is the Company’s functional currency and the Group´spresentation currency.

(2) Transactions in currencies other than the functional currency

Transactions in currencies other than the functional currency are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuations where items are re-measured.

At the end of each reporting period: (i) monetary items denominated in currencies other than the functional currency are translated using the closing rates; (ii) non-monetary items that are measured in terms of historical cost in a currency other than the functional currency are translated using the exchange rates prevailing at the date of the transactions; and (iii) non-monetary items that are measured at fair value in a currency other than the functional currency are translated using the exchange rates prevailing at the date when the fair value was determined. If such transactions occurred in a company applying IAS 29, after the above-mentioned translation, transactions are re-expressed in terms of the measuring unit current at the end of the reporting period.

Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in currencies other than the functional currency are recorded as gains and losses from foreign exchange and included, if applicable, in “Financial income / Financial loss” in the Consolidated Statement of Income. Foreign exchange gains and losses derived from the net monetary position in subsidiaries applying IAS 29 are presented in real (inflation-adjusted) terms.

(3) Translation of financial information in currencies other than the Company’s functional currency

Income and expenses of the subsidiaries whose functional currencies are not the U.S. dollar and are not in a hyperinflationary economy, are translated into U.S. dollars at average exchange rates. Assets and liabilities for each balance sheet presented are translated at the balance sheet date exchange rates.

All figures (income, expenses, assets and liabilities) of the subsidiaries whose functional currencies are the one of a hyperinflationary economy, are translated into U.S. dollars at the balance sheet date exchange rates, considering that all items are expressed in terms of the measuring unit current at the end of the reporting period.

Translation differences are recognized in the Consolidated Statement of Comprehensive Income as “Currency Translation Adjustment”. As of December 31, 2019, 2018 and 2017, the Company recognized a translation loss of USD 24.8 million, USD 247.7 million and USD 25.6 million, respectively, arising from the translation of the investments in Argentina, Brazil, Italia and Armenia. In the case of a sale or other disposal of any of such subsidiaries, any cumulative translation difference would be recognized in income as a gain or loss from the sale of such subsidiary.

D Intangible assets

(1) Concession Assets

The Group, through some of its subsidiaries has been awarded the concession for the administration and operation of the following airports:

-

Puerta del Sur S.A. and Consorcio Aeropuertos Internacionales S.A. (“C.A.I.S.A.”), of major airports in Uruguay (Montevideo and Punta del Este).

-

Toscana Aeroporti S.p.A. (“TA”) a merger of Aeroporto di Firenze S.p.A. (“ADF”) and Società Aeroporto Toscano Galileo Galilei S.p.A. (“SAT”) of Florence and Pisa airports, respectively.

-

Inframerica Concessionária do Aeroporto de Brasilia S.A. and Inframerica Concessionária do Aeroporto de São Gonçalo do Amarante S.A. of Brasilia and São Gonçalo do Amarante airports, respectively.

-

Terminal Aeroportuaria de Guayaquil S.A. (TAGSA) of Guayaquil airport, “José Joaquin de Olmedo”.

-

Aeropuertos Argentina 2000 S.A. 35 airports in Argentina.

-

Armenia International Airports C.J.S.C. of the “Zvartnots” International Airport of Yerevan, Republic of Armenia.

The concession agreements are accounted for in accordance with the principles included in IFRIC 12 “Service Concession Arrangements”. The Company recognized an intangible asset for:

a)

Fixed fees payables as the result of the acquisition of the right (license) to charge users for the service of airport concession (see Note 23),

b)

Right to obtain benefits for services provided using the assets built under the construction services performed under the concession contracts.

Acquisitions correspond, according to the terms of the Concession contract, to the improvements over existing infrastructure to increase the useful life or its capacity, or the construction of new infrastructure.

General and specific borrowing costs, attributable to the acquisition, construction or production of assets that necessarily take a substantial period to get ready for their intended use or sale are added to the cost of such assets until the assets are substantially ready to be used or sold.

The intangible asset for infrastructure under each concession agreement is amortized over the contract term in accordance with an appropriate method reflecting the rate of consumption of the concession asset’s economic benefits as from the date the infrastructure is brought into service.

Accounting of the fixed concession fee under the Brazilian concession agreements is described in Note 23 a).

As part of the obligations arising from the concession agreements, the Group provides construction or upgrade services. IFRIC 12 “Service Concession Arrangements” requires to recognize revenues and costs from the construction or upgrade services provided.

The fair value of the construction or upgrade service is equal to the construction or upgrade costs plus a reasonable margin.

The concession fee paid to the grantor derived from the concession agreements are recognized depending on the terms defined in the concession agreement:

a)

Fixed concession fee is recognized at the beginning of the concession as it is reliably measurable, as a counterpart an intangible asset is recognized, this type of fee is independent form the revenue.

b)

Variable fees payables that are defined as a percentage over certain revenue streams, recognized monthly by monthly in the income statement.

Each operating company is responsible for obtaining the necessary guarantees for the commitments assumed in each concession. They are mostly covered by insurance that it is paid in advance and it is recorded in Other receivables, and is accrued over the life of the coverage.

Main commitments under each concession agreement are included in Note 26 b.

(2) Goodwill

Goodwill represents the excess of the acquisition cost over the fair value of the Group’s share of net identifiable assets, liabilities and contingent liabilities acquired as part of business combinations determined by management. Goodwill impairment reviews are performed annually or more frequently if events or changes in circumstances indicate a potential impairment. An impairment loss is recognized for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs of disposal and value in use. Impairment losses on goodwill are not reversed. Goodwill, net of impairment losses, if any, is included on the Consolidated Statement of Financial Position under Intangible assets, net.

For the purpose of impairment testing, goodwill acquired in a business combination is allocated to each cash-generating units (CGUs) of a subsidiary or group of subsidiaries that are expected to benefit from such business combination.

E Property, plant and equipment

Property, plant and equipment is recognized at historical acquisition or construction cost less accumulated depreciation and impairment losses; historical cost includes expenses directly attributable to the acquisition of the items.

Major overhaul and rebuilding expenditures are capitalized as property, plant and equipment only when it is probable that future economic benefits associated with the item will flow to the group and the investment enhances the condition of assets beyond its original condition.

Depreciation is calculated using the straight-line method to allocate the cost of each asset to its residual value over the estimated useful life, as follows:


Buildings and improvements	25‑30	years
Plant and production equipment	3‑10	years
Vehicles, furniture and fixtures, and other equipment	4‑10	years

The residual values and useful lives of significant property, plant and equipment are reviewed and adjusted, if appropriate, at each year-end date.

Gain and losses on disposals are determined by comparing the proceeds with the carrying amount and are included in Other operating (expense) / income in the Consolidated Statement of Income.

F Critical accounting estimates and judgments

Critical accounting estimates are those that require management to make significant judgments and estimates about matters that are inherently uncertain. Management bases its estimates on historical experience and other assumptions that it believes are reasonable. Actual results could differ from estimates used in employing the critical accounting policies and these could have a material impact on the Group’s results of operations.

The Group’s critical accounting estimates are discussed below.

(a)Impairment testing

At the date of each statement of financial position, the Group reviews the carrying amounts of its property, plant and equipment, investment in associates and intangible assets with finite useful lives to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent, if any, of the impairment loss. Assets that have an indefinite useful life or assets not ready to use are not subject to amortization and are tested annually for impairment.

An impairment loss, if applicable, is recognized for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs of disposal and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are largely independent cash inflows (cash-generating units or CGUs). Prior impairments of nonfinancial assets (other than goodwill) are reviewed for possible reversal at each reporting date.

A previously recognized impairment loss is reversed if, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognized, the reversal of the previously recognized impairment loss is recognized in the Consolidated Statement of Income.

(b)Income taxes

The Group is subject to income taxes in numerous jurisdictions. Significant judgment is required in determining the worldwide provision for income taxes. There are many transactions and calculations for which the ultimate tax determination is uncertain. The Group recognizes liabilities for anticipated tax audit issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the current and deferred income tax assets and liabilities in the period in which such determination is made.

Deferred tax is recognized, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. However, deferred tax liabilities are not recognized if they arise from the initial recognition of goodwill. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred income tax asset is realized or the deferred income tax liability is settled.

Deferred tax assets are reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable income will be available to allow all or part of the asset to be settled. Deferred tax assets and liabilities are not discounted. In assessing the recoverability of deferred tax assets, management considers whether it is probable that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment.

(c)Application of IFRIC 12

The Group has carried out a comprehensive implementation of the standards applicable to the accounting treatment of their concession and has determined that, among others, IFRIC 12 is applicable. The Group treats their investments related to improvements and upgrades to be performed in connection with the concession obligation under the intangible asset model established by IFRIC 12, as all investments required by the concession obligation, regardless of their nature, directly increase the maximum tariff per traffic unit. Accordingly, all amounts invested under the concession obligation have a direct correlation to the amount of fees the Group will be able to charge each passenger or cargo service provider, and thus, a direct correlation to the amount of revenues the Group will be able to generate. As a result, the Group defines all expenditures associated with investments required by the concession obligation as revenue generating activities given that they ultimately provide future benefits, whereby subsequent improvements and upgrades made to the concession are recognized as intangible assets based on the principles of IFRIC 12. Additionally, compliance with the committed investments per the Master Development Programs is mandatory, as well as the fulfillment of the maximum tariff and therefore, in case of a failure to meet any one of these obligations, the Group could be subject to sanctions and the concessions could be revoked.

G Inventories

Inventories are stated at the lower of cost and net realizable value.

Net realizable value is the estimated price in the ordinary course of business, less the estimated costs of completion and selling expenses. The cost of inventories is based on the weighted averaged principle and includes expenditure incurred in acquiring the inventories and bringing them to their existing location and condition.

If applicable, the Group establishes an allowance for obsolete or slow-moving inventory related to finished goods. For slow moving or obsolete finished products, an allowance is established based on management’s analysis of product aging.

H Trade and other receivables

Trade receivables are initially recognized at the amount of consideration that is unconditional, unless they contain significant financing components when they are recognized at fair value. They are subsequently measured at amortized cost using the effective interest method, less loss allowance. See Note 3A(iii) for a description of the group’s impairment policies.

I Cash and cash equivalents

Cash and cash equivalents are comprised of cash in banks, mutual funds and short-term investments with an original maturity of three months or less at the date of purchase which are readily convertible to known amounts of cash.

In the Consolidated Statement of Financial Position, bank overdrafts are included in Borrowings in current liabilities. For the purposes of the Consolidated Statement of Cash Flows, cash and cash equivalents includes bank overdrafts.

J Equity

(1) Equity components

The Consolidated Statement of Changes in Equity includes:

-

The share capital, share premium, legal reserve, free distributable reserves and non-distributable reserves calculated in accordance with Luxembourg Law;

-

The currency translation adjustment, other reserves, retained earnings and non-controlling interest.

(2) Share capital

Share capital is stated at nominal value. The Company had an authorized share capital of 20,000 shares having a nominal value of USD 1 per share as of December 31, 2016. As a consequence of the Conversion of the Company mentioned in Note 1 the share capital as of December 31, 2017 has a nominal value of USD 1,500 million (USD 1 per share). According to Note 1, and considering the reverse stock split and the initial public offering, share capital as of December 31, 2019 and 2018 is USD 160 million (USD 1 per share).

All issued shares are fully paid.

Pursuant to Luxembourg regulations, contributions in kind made by shareholders must be at fair value and must be considered as Free Distributable Reserve.

(3) Dividends distribution by the Company to shareholders

Dividends distributions are recorded in the Company’s financial statements when Company’s shareholders have the right to receive the payment, or when interim dividends are approved by the Board of Directors in accordance with the by-laws of the Company. Dividends may be paid by the Company to the extent that it has distributable retained earnings, calculated in accordance with Luxembourg law (see Note 26 c.).

(4) Other reserves

SCF's airport business was historically conducted through a large number of entities as to which there was no single holding entity but which were separately owned by entities directly or indirectly controlled by SCF during all the periods presented. In order to facilitate the Company's initial public offering, SCF completed a reorganization (the "Reorganization") whereby, each of the operating and holding entities under SCF´s common control, were ultimately contributed to the Company.

The reorganization was accounted for as a reorganization of entities under common control, using the predecessor cost method. The net effect was recorded in Net Equity under Other Reserves. Moreover, in 2016, and considering that the shares of America International Airports (“AIA”) were contributed to the Free Distributable Reserves of the Company at the fair value a significant negative amount was included in Other Reserves to reflect the reduction to the predecessor´s cost of the shares.

(5) Non-controlling interest

The group treats transactions with non-controlling interests that do not result in a loss of control as transactions with equity owners of the group. A change in ownership interest results in an adjustment between the carrying amounts of the controlling and non-controlling interests to reflect their relative interests in the subsidiary. Any difference between the amount of the adjustment to non-controlling interests and any consideration paid or received is recognized in Other reserves within equity attributable to owners of Corporación América Airports S.A.

K Borrowings

Borrowings are recognized initially at fair value, net of transaction costs incurred. Subsequently borrowings are measured at amortized cost.

L Current and Deferred income tax

The tax expense for the year comprises current and deferred tax. Tax is recognized in the Consolidated Statement of Income, except for tax items recognized in the Consolidated Statement of Comprehensive Income.

The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the reporting date in the countries where the Group entities operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions when appropriate.

Deferred income taxes recognized applying the liability method on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. The principal temporary differences arise from intangible assets adjusted for the effects of IAS 29 in Argentine subsidiaries, and the effect of valuation on fixed assets, inventories and provisions. Deferred tax assets are also recognized for net operating loss carry-forwards. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the time period when the asset is realized or the liability is settled, based on tax laws that have been enacted or substantively enacted at the reporting date.

Deferred tax assets are recognized to the extent it is probable that future taxable income will be available against which the temporary differences can be utilized.

Deferred tax liabilities and assets are not recognized for temporary differences between the carrying amount and tax bases of investments in foreign operations where the company is able to control the timing of the reversal of the temporary differences and it is probable that the differences will not reverse in the foreseeable future.

At the end of each reporting period, CAAP reassesses unrecognized deferred tax assets. The group recognizes a previously unrecognized deferred tax asset to the extent that it has become probable that future taxable income will allow the deferred tax asset to be recovered.

M Employee benefits

Compensation to employees in the event of dismissal is charged to income in the year in which it becomes payable.

Some entities of the Group have long term employee benefits that are unfunded defined benefit plan in accordance with IAS 19 - “Employee Benefits”.

The company calculates annually the provision for employee retirement cost based on actuarial calculations performed by independent professionals using the Projected Unit Credit Costs method. The present value of the defined benefit obligations at each year-end is calculated discounting estimated future cash outflows at an annual rate equivalent to the average rate of high quality corporate bonds, which are denominated in the same currency in which the benefits will be paid, and whose terms approximate the terms of the pension obligations.

Service cost and interest cost are recognized in the income statement, with actuarial gains and losses arising from changes in actuarial assumptions are recognized in the Consolidated Statement of Comprehensive Income.

Actuarial assumptions include variables such as, in addition to the discount rate, death rate, age, sex, years of service, current and future level of salaries, turnover rates, among others.

N Provisions

Provisions for legal claims and other charges are recognized when: the Group has a present legal or constructive obligation as a result of past events; it is probable that an outflow of resources will be required to settle the obligation; and the amount has been reliably estimated.

Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. A provision is recognized even if the likelihood of an outflow with respect to any one item included in the same class of obligations may be small.

Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the obligation. The increase in the provision due to passage of time is recognized as interest expense.

The concession agreements in the different jurisdictions include certain commitments to be complied by each company. These commitments can be grouped in two categories:

·

Works that can be classified as standard maintenance of the infrastructure, which are expensed as incurred.

·

Major scheduled maintenance and refurbishments of the infrastructure in the future.

Since IFRIC 12 does not recognize infrastructure as property, plant and equipment, rather as a right to charge customers for the use of the infrastructure, major refurbishments and renewals to be performed in future years to maintain or restore the infrastructure asset to its level of functionality, operation and safety should be recognized in accordance with IAS 37 - Provisions, Contingent Liabilities and Assets (unless the grantor agrees to reimburse the operator). Provision is recorded at the best estimate of the amount of the expenditure expected to be incurred to perform the major overhaul or restoration work, discounted using a rate that reflects time value of money and risks involved.

O Trade payables

Trade payables are initially recognized at fair value, generally the nominal invoice amount and are subsequently measured at amortized cost.

P Concession fee payable

Each concession agreement determines different types of concession fees to be paid to the corresponding regulatory authority. Fees could be fixed or variable. Some concession agreements establish both a minimum fixed payment, and an additional variable amount if certain conditions are met (such as a minimum number of passengers, among others).

For those concession agreements that require payment of a fixed amount, the Company recognized the obligation at present value. The increase in the provision due to the passage of time is recognized as interest expense. The variable concession fees paid to the grantor derived from the concession agreements are recognized as cost of the period. The fixed concession fee payable is capitalized at the inception of the agreement as concession assets- intangible asset.

Q Leases / Sub-concession of spaces

Assets owned under finance leases, through which all the risks and benefits associated with ownership are substantially transferred into the Group, are recognized as owned assets at their current value or, if lower, at the actual value of the minimum payments due for the leasing. The corresponding liability for the lessor is booked in the financial statement as financial debt. Assets are depreciated by applying the criterion and the rates used for owned assets.

The leases/sub-concessions where the lessor substantially maintains all the risks and benefits associated with the ownership of the assets are classified as operating leases. Costs referred to operating leases are recognized line-by-line in the Statement of Income along the term of the lease agreement.

Lease income from operating leases where the group is a lessor is recognized in income on a straight-line basis over the lease term. The respective leased assets are included in the balance sheet based on their nature.

As explained in Note 2.A above, the Group has changed its accounting policy for leases where the group is the lessee. The new policy and its impact is described in Note 2.Y.

R Revenue recognition

Group revenue arises mainly from airports operations and includes:

Aeronautical revenues

These revenues are those generally regulated under each airport’s concession agreement. They consist of passengers’ departure fees, landing, parking and other fees paid by the airlines.

Non-aeronautical revenues

- Commercial revenues: those are typically not regulated under the applicable concession agreement. Commercial revenues are leases and/or rent fees from retail (including duty free), food and beverage, services and car rental companies, advertising and car parking, fueling charges and cargo fees, among others.

- Construction service revenues: IFRIC 12 requires to recognize revenues and costs from the construction or upgrade services provided. Construction service revenue equals the construction or upgrade costs plus a reasonable margin.

Under the terms of IFRIC 12 “Service Concession Arrangements”, a concession operator may have a twofold activity:

- a construction activity in respect of its obligations to design, build and finance a new asset that it delivers to the grantor;

- an operating and maintenance activity in respect of concession assets.

Revenue is recognized when a customer obtains control of a good or service and thus has the ability to direct the use and obtain the benefits from the good or service.

Revenue is recognized either over time or at a point in time, when (or as) the Group satisfies performance obligations by transferring the promised services or goods to its customers.

Revenue from aeronautical services, derived from the use of airports facilities by aircrafts and passengers, is recognized over time as the services are provided. The Group considers that it has completed its performance obligations when the services are rendered to its customers. The Group does not defer collection terms in excess of the normal market terms, so there is no need to distinguish between a commercial component and a revenue interest component.

Revenue from non-aeronautical activities such as commercial revenue (excluding sale of goods, leases and sub-concession of spaces) and construction services are recognized over time. The Group considers that it has completed its performance obligations when the services are rendered to its customers or construction costs are incurred.

Revenue from sale of goods, mainly fueling, is recognized at a point in time when control of the goods is transferred to the customer and the customer obtains the benefits from the goods. The Group considers that it has completed its performance obligations when the goods are supplied to its customers.

Contracts relating to the sub-concession of spaces and commercial areas (non-aeronautical revenues) are excluded from the application of IFRS 15 as they fall within the scope of IFRS 16 "Leases", see Note 2.Y.

The Group recognizes contract liabilities for consideration received in respect of unsatisfied performance obligations and reports these amounts as other liabilities in the statement of financial position. Similarly, if the Group satisfies a performance obligation before it receives the consideration, the Group recognizes either a contract asset or a receivable in its statement of financial position, depending on whether something other than the passage of time is required before the consideration is due.

Revenue is shown net of value-added tax and discounts. Intercompany balances with subsidiaries have been eliminated in consolidation.

As of December 31, 2017 revenue was recognized when the amount of revenue may have been reliably measured; it was probable that economic benefits associated with the transaction would have flowed to the Company, and when collection was reasonably assured.

Effective January 1, 2018, the Group adopted IFRS 15 using the modified retrospective adoption approach. No cumulative effect adjustment was recorded upon transition to IFRS 15.

S Cost of services and other expenses

Cost of services and expenses are accrued and recognized in the Consolidated Statement of Income.

Construction service cost: IFRIC 12 requires to recognize revenues and costs from the construction or upgrade services provided. Construction service revenue equals the construction or upgrade costs plus a reasonable margin.

Commissions, freight and other selling expenses, including services and fees, office expenses and maintenance, are recorded in Selling, general and administrative expenses in the Consolidated Statement of Income.

T Government grant

As consideration for having granted the concession of the Group A of the Argentine Airports, AA2000 assigns to the Government 15% of the total revenues of the concession, 2.5% of such revenues are destined to fund the investments commitments of AA2000 corresponding to the investment plan under the concession agreement by means of a trust in which AA2000 is the settlor; Banco de la Nación Argentina, the trustee; and the beneficiaries are AA2000 and constructors of the airports’ works. The funds in the trust are used to settle the accounts payable to suppliers of the infrastructure being built in the Argentine Airport System. As per IAS 20, the benefit received by AA2000 qualifies as a grant related to income on a monthly basis that it is recognized at fair value since there is a reasonable assurance that such benefit will be received.

U Financial instruments

Non derivative financial instruments comprise investments in debt instruments, corporate bonds, time deposits, trade and other receivables, cash and cash equivalents, borrowings, and trade and other payables.

The Company classifies its financial assets in the following measurement categories:

(i)Amortized cost: Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest are measured at amortized cost. Interest income from these financial assets is included in finance income using the effective interest rate method.

(ii)Fair value through other comprehensive income (“FVOCI”): Assets that are held for collection of contractual cash flows and for selling the financial assets, where the assets’ cash flows represent solely payments of principal and interest, are measured at FVOCI. Movements in the carrying amount are taken through OCI, except for the recognition of impairment gains or losses, interest revenue and foreign exchange gains and losses which are recognized in profit or loss. When the financial asset is derecognized, the cumulative gain or loss previously recognized in OCI is reclassified from equity to profit or loss and recognized in other gains/(losses). Interest income from these financial assets is included in finance income using the effective interest rate method. Foreign exchange gains and losses are presented in other gains/(losses) and impairment expenses are presented as separate line item in the statement of profit or loss.

(iii)Fair value through profit or loss (“FVPL”): Assets that do not meet the criteria for amortized cost or FVOCI are measured at FVPL. A gain or loss on a debt investment that is subsequently measured at FVPL is recognized in profit or loss and presented net within other gains/(losses) in the period in which it arises.

The classification depends on the Company’s business model for managing the financial assets and the contractual terms of the cash flows.

V Derivative financial instruments

Derivatives are initially recognized at fair value on the date a derivative contract is entered into, and they are subsequently remeasured to their fair value at the end of each reporting period. The accounting for subsequent changes in fair value depends on whether the derivative is designated as a hedging instrument and, if so, the nature of the item being hedged.

Changes in the fair value of any derivative instrument that does not qualify for hedge accounting are recognized immediately in profit or loss and are included in “Other financial income/loss” line.

Derivatives are classified as ‘held for trading’ for accounting purposes and are accounted for at fair value through profit or loss. They are presented as current assets or liabilities to the extent they are expected to be settled within 12 months after the end of the reporting period.

Derivative financial instruments are classified within Level 2 of the fair value hierarchy.

W Segment information

Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating Decision Maker ("CODM"), which is the Group´s Board of Directors. The CODM is responsible for allocating resources and assessing performance of the operating segments. The operating segments are described in Note 4.

For management purposes, the Company analyzes its business based on strategic business units providing airport and non-airport services to clients in the different countries where business units are located. Assets, liabilities and results from holding companies are included as Unallocated.

X Application of IAS 29 in financial reporting of Argentine subsidiaries and associates

IAS 29 “Financial Reporting in Hyperinflationary Economies” requires that the financial statements of entities whose functional currency is that of a hyperinflationary economy to be adjusted for the effects of changes in a suitable general price index and to be expressed in terms of the current unit of measurement at the closing date of the reporting period, regardless of whether they are based on the historical cost method or the current cost method. Accordingly, the inflation produced from the date of acquisition or from the revaluation date, as applicable, must be computed in the non-monetary items.

In order to conclude on whether an economy is categorized as hyperinflationary in 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 exceeds 100%. Considering that the inflation in Argentina has exceed the 100% three-year cumulative inflation rate in July 2018, and that the rest of the indicators do not contradict the conclusion that Argentina should be considered a hyperinflationary economy for accounting purposes, the Group understands that there is sufficient evidence to conclude that Argentina is a hyperinflationary economy under the terms of IAS 29 as from July 1, 2018, and, accordingly, it has applied IAS 29 as from that date in the financial reporting of its subsidiaries and associates with the Argentine peso as functional currency.

The inflation adjustment was calculated by means of conversion factor derived from the Argentine price indexes published by the National Institute of Statistics (“INDEC”).

The Government Board of the Argentine Federation of Professional Councils of Economic Sciences (FACPCE) issued Resolution JG 539/18, which prescribes the indices to be used by entities with a functional currency of the Argentine peso for the application of the restatement procedures. These indices are largely based on the Wholesale Price Index for periods up to December 31, 2016 and the Retail Price Index thereafter.

The price index as of December 31, 2019 was 283.44 (184.25 as of December 31, 2018) and the conversion factor derived from the indexes for the year ended December 31, 2019, was 1.54 (1.48 as of December 31, 2018).

The main procedures for the above-mentioned adjustment are as follows:

·

Monetary assets and liabilities which are carried at amounts current at the balance sheet date are not restated because they are already expressed in terms of the monetary unit current at the balance sheet date.

·

Non-monetary assets and liabilities which are not carried at amounts current at the balance sheet date, and components of shareholders’ equity are adjusted by applying the relevant conversion factors at the date of the transactions.

·

All items in the statement of income are restated by applying the relevant conversion factors.

·

The effect of inflation on the Company’s net monetary position is included in Inflation adjustment in the statement of income. Exchange rate gains and losses derived from the net monetary position are presented in real (inflation-adjusted) terms.

·

The ongoing application of the re-translation of comparative amounts to closing exchanges rates under IAS 21 and the hyperinflation adjustments required by IAS 29 will lead to a difference in addition to the difference arising on the adoption of hyperinflation accounting. This is because the rate at which the hyper-inflationary currency depreciates against a stable currency is rarely equal to the rate of inflation. The inflation adjustment and the translation of the current period is included in Other comprehensive (loss) / income for the period line.

·

On the initial application of IAS 29, comparative amounts were the figures presented as current year amounts in the relevant prior year financial statements, according to IAS 21, considering that were translated into the currency of a non- hyperinflationary economy. Therefore, the adjustment of the restated amounts of net assets as of prior period to reflect the cumulative inflation was included as an initial balance adjustment within Retained earnings line.

Y Change in accounting policies

The group has applied the following standard for the first time for its annual reporting period commencing January 1, 2019:

IFRS 16, “Leases”

The group has adopted IFRS 16 retrospectively as of January 1, 2019, but has not restated comparatives for the 2018 reporting period as permitted under the specific transitional provisions in the standard. The reclassifications and the adjustments arising from the new leasing rules are therefore recognized in the opening balance sheet on January 1, 2019.

(a) Adjustments recognized on adoption of IFRS 16

On adoption of IFRS 16, the group recognized lease liabilities in relation to leases which had previously been classified as ‘operating leases’ under the principles of IAS 17 Leases. These liabilities were measured at the present value of the remaining lease payments, discounted using the lessee’s incremental borrowing rate as of January 1, 2019. The weighted average lessee’s incremental borrowing rate applied to the lease liabilities on January 1, 2019 was 5.2%.

For leases previously classified as finance leases the entity recognized the carrying amount of the lease asset and lease liability immediately before transition as the carrying amount of the right of use asset and the lease liability at the date of initial application. The measurement principles of IFRS 16 are only applied after that date.


		Lease liabilities

Operating lease commitments as at December 31, 2018		14,167
Discounted using lessee’s incremental borrowing rate		(2,204)
Operating lease commitments discounted at the date of initial application		11,963
Add: finance lease liabilities recognized as at December 31, 2018		1,715
(Less): short-term leases recognized on a straight-line basis as expense		(59)
(Less): low-value leases recognized on a straight-line basis as expense		(70)
Lease liability recognized as at January 1, 2019		13,549
Of which are:
Current lease liabilities		4,942
Non-current lease liabilities		8,607
		13,549

Right-of use assets were measured at the amount equal to the lease liability, adjusted by the amount of any prepaid or accrued lease payments relating to that lease recognized in the balance sheet as at December 31, 2018. There were no onerous lease contracts that would have required an adjustment to the right-of-use assets at the date of initial application.

The recognized right-of-use assets as at January 1, 2019 relate to the following types of assets:


		At January 1, 2019
Right-of-use asset
Land, building and improvements		10,103
Plant and production equipment		1,224
Vehicles, furniture and fixtures		519
		11,846

The change in accounting policy affected the following items in the balance sheet on January 1, 2019:

·

right-of-use assets – increase by USD 11,846

·

prepayments – decrease by USD 12

·

borrowings – decrease by USD 1,715

·

lease liabilities – increase by USD 13,549

There was no impact on retained earnings on January 1, 2019.

(b) Practical expedients applied

In applying IFRS 16 for the first time, the group has used the following practical expedients permitted by the standard:

·

reliance on previous assessments on whether leases are onerous

·

the accounting for operating leases with a remaining lease term of less than 12 months as at January 1, 2019 as short-term leases

·

the exclusion of initial direct costs for the measurement of the right-of-use asset at the date of initial application, and

·

the use of hindsight in determining the lease term where the contract contains options to extend or terminate the lease.

(c) The group’s leasing activities and how these are accounted for

The group as a lessee

The group acts as a lessee renting various offices, equipment and cars.

Until the 2018 financial year, leases of property, plant and equipment were classified as either finance or operating leases. Payments made under operating leases (net of any incentives received from the lessor) were charged to profit or loss on a straight-line basis over the period of the lease.

From January 1, 2019, leases are recognized as a right-of-use asset and a corresponding liability at the date at which the leased asset is available for use by the group. Each lease payment is allocated between the liability and finance cost. The finance cost is charged to profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The right-of-use asset is depreciated over the shorter of the asset's useful life and the lease term on a straight-line basis.

Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present value of the following lease payments:

·

fixed payments (including in-substance fixed payments), less any lease incentives receivable

·

variable lease payment that are based on an index or a rate

·

amounts expected to be payable by the lessee under residual value guarantees

·

the exercise price of a purchase option if the lessee is reasonably certain to exercise that option, and

·

payments of penalties for terminating the lease, if the lease term reflects the lessee exercising that option.

The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be determined, the lessee’s incremental borrowing rate is used, being the rate that the lessee would have to pay to borrow the funds necessary to obtain an asset of similar value in a similar economic environment with similar terms and conditions.

Right-of-use assets are measured at cost comprising the following:

·

the amount of the initial measurement of lease liability

·

any lease payments made at or before the commencement date less any lease incentives received

·

any initial direct costs, and

·

restoration costs.

Payments associated with short-term leases, leases of low-value assets and variable leases that do not depend on an index or rate are recognized on a straight-line basis as an expense in profit or loss. Short-term leases are leases with a lease term of 12 months or less.

The group as a lessor

The group acts as a lessor regarding leases and sub-concession of spaces with third parties at its airports facilities.

The Group’s accounting policy under IFRS 16 has not changed from the comparative period. As a lessor the Group classifies its leases as either operating or finance leases. A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership of the underlying asset, and classified as an operating lease if it does not.

Financial Risk Management

12 Months Ended

Dec. 31, 2019

Financial Risk Management

Financial Risk Management

3 Financial Risk Management

The Group’s operations expose it to a variety of risks, mainly related to market risks (including the effects of changes in foreign currency exchange rates and interest rates), credit risk and liquidity risk.

The Group manages its financial risk exposure independently at each operating subsidiary, however, decisions are discussed by the Board of Directors (“BOD”) members.

The most significant financial risks to which the Group is exposed are detailed below.

A. Financial Risk Factors

(i)Market risk

Foreign exchange risk

The Group operates in a number of countries throughout the world and consequently is exposed to foreign exchange rate risk. In addition, the Group has certain investments in foreign operations, whose net assets are exposed to foreign currency translation risk. As of December 31, 2018, the Group did not enter into derivative financial instruments to cover foreign exchange risks.

As of May 29, 2019, CAAP's subsidiary in Brazil entered into a currency swap in order to manage the exchange rate exposure generated by loan future payables in U.S. dollars. This financial instrument was not entered into for speculative purposes, but neither was formally designated and therefore did not qualify as hedging instrument for accounting purposes and as a result changes in its fair value is recognized in profit or loss within other financial income or loss.

In order to manage foreign exchange risk, the Group has added to its strategy the use of derivative financial instruments together with its previous policy of minimizing net positions of assets and liabilities denominated in foreign currencies.

The value of the Group’s financial assets and liabilities is subject to changes arising out of the variation of foreign currency exchange rates. A significant majority of the Group’s business activities is conducted in the respective functional currencies of the subsidiaries. However, the Group transacts in currencies other than the respective functional currencies of the subsidiaries. There are significant monetary balances held by the Group companies at each period-end that are denominated in others currencies (non-functional currency). The following table provides a breakdown of the Group’s main monetary net assets and liabilities which impact the Group’s profit and loss:


	As of December 31,	As of December 31,
Currency Exposure / Functional currency	2019	2018

U.S. dollar / Argentine Peso	(404,260)	(279,334)
Euro / Armenian dram	(9,686)	(29,456)
U.S. dollar / Armenian dram	(24,359)	(27,300)
U.S. dollar / Euro	170	27,304
Euro / Argentine Peso	(6,745)	—
Uruguayan Peso / U.S. dollar	(3,148)	(7,745)

The relevant exposures correspond to:

 U.S. dollar / Argentine Peso

As of December 31, 2019 and 2018 consisting primarily of U.S. dollar -denominated net monetary assets and liabilities at certain Argentine subsidiaries which functional currency is the Argentine Peso. A change of 1% in the ARS/ USD exchange rate would have generated a pre-tax gain / loss of USD 4,042.6 as of December 31, 2019 (USD 2,793.3 as of December 31, 2018).

 Euro / Armenian dram

As of December 31, 2019 and 2018 consisting primarily of Euro -denominated net monetary assets and liabilities at the Armenian subsidiaries which functional currency is the Armenian Dram. A change of 1% in the Dram / Euro exchange rate would have generated a pre-tax gain / loss of USD 96.9 as of December 31, 2019 (USD 294.6 as of December 31, 2018).

 U.S. dollar / Armenian dram

As of December 31, 2019 and 2018 consisting primarily of U.S. dollar -denominated net monetary assets and liabilities at the Armenian subsidiaries which functional currency is the Armenian Dram. A change of 1% in the Dram/ USD exchange rate would have generated a pre-tax gain / loss of USD 243.6 as of December 31, 2019 (USD 273.0 as of December 31, 2018).

 U.S. dollar / Euro

As of December 31, 2019 and 2018 consisting primarily of U.S. dollar-denominated net monetary assets and liabilities at certain Spanish entities which functional currency is the Euro. A change of 1% in the USD/Euro exchange rate would have generated a pre-tax gain / loss of USD 1.7 as of December 31, 2019 (USD 273.0 as of December 31, 2018).

 Euro / Argentine Peso

As of December 31, 2019 consisting primarily of Euro-denominated net monetary assets and liabilities at certain Argentinian subsidiaries which functional currency is the Argentine Peso. A change of 1% in the Euro/ ARS exchange rate would have generated a pre-tax gain / loss of USD 67.5 as of December 31, 2019.

 Uruguayan Peso / U.S. dollar

As of December 31, 2019 and 2018 consisting primarily of Uruguayan Peso-denominated net monetary assets and liabilities at certain Uruguayan subsidiaries which functional currency is the U.S. dollar. A change of 1% in the UYU/ USD exchange rate would have generated a pre-tax gain / loss of USD 31.5 as of December 31, 2019 (USD 77.5 as of December 31, 2018).

(ii)Interest rate risk

The Group’s interest rate risk principally arises from long-term borrowings (Note 22). Borrowings issued at variable rates expose the Group to the risk that the actual cash flows differ from those expected. Borrowings issued at fixed rates expose the Group to the risk that the fair values of these differ from those expected. The Group manages this risk by maintaining an appropriate mix between fixed and floating rate interest bearing liabilities.

These activities are evaluated regularly to determine that the Group is not exposed to interest rate movements that could adversely impact its ability to meet its financial obligations and to comply with its borrowing covenants.

The following table shows a breakdown of the Group’s fixed-rate and floating-rate borrowings as of December 31, 2019 and 2018.


	At December 31,
	2019	2018
Fixed rate	747,712	693,771
Variable rate	460,632	432,887
	1,208,344	1,126,658

The Group estimates that, other factors being constant, a 10% increase in floating rates at year-end would decrease profit before income tax for the year ended December 31, 2019 and 2018, USD 4,233 and USD 4,984 respectively. A 10% decrease in the floating interest rate would have an equal and opposite effect on the statement of income.

This sensitivity analysis provides only a limited, point-in-time view of this market risk sensitivity of certain of the Group’s financial instruments. The actual impact of rate changes on the Group’s financial instruments may differ significantly from the impact shown in the sensitivity analysis.

(iii)Credit risk

The financial instruments that could be subject to concentration of credit risk consist of cash, cash equivalents, trade receivables and short term investments.

The Group places its cash and cash equivalents and short term investments in several first rate credit entities, reducing in this way the credit exposure to only one entity. The Group has not experienced significant losses from those assets.

Each subsidiary is responsible for managing and analyzing credit risk of its trade receivable, for each of their new customers before standard payment and delivery terms and conditions are offered. There is no significant concentration of credit risk from customers except from AA2000 key client airline mentioned in Note 26.a.

The Group credit policies with customers are designed to identify customers with acceptable credit history. The Group recognized provision for bad debts to cover impairment for potential credit losses. The credit quality of the financial assets that are not yet due and not impaired can be assessed based on the credit qualification (“rating”) granted by entities external to the Group or through the historical rates of uncollectibility.

Trade receivables

The group applies the IFRS 9 simplified approach to measuring expected credit losses (“ECL”) which uses a lifetime expected loss allowance for all trade receivables. To measure the expected credit losses, trade receivables have been grouped based on shared credit risk characteristics and the days past due. The loss allowance provision as at December 31, 2019 and December 31, 2018 was determined as follows for trade receivables:


			Past due
	Trade			30‑60	60‑90	90‑180	> 180
	Receivables	Not due	0‑30 days	days	days	days	days
At December 31, 2019
Trade receivables – gross carrying amount	158,937	58,924	20,670	6,980	4,507	15,604	52,252
Expected loss rate (*)		1%	3%	10%	33%	60%	76%
Provision for loss allowance	(52,734)	(843)	(626)	(688)	(1,495)	(9,366)	(39,716)
Trade receivables, net	106,203	58,081	20,044	6,292	3,012	6,238	12,536


			Past due
	Trade			30‑60	60‑90	90‑180	> 180
	Receivables	Not due	0‑30 days	days	days	days	days
At December 31, 2018
Trade receivables - gross carrying amount	144,343	60,977	25,477	6,962	5,141	9,775	36,011
Expected loss rate (*)		0%	4%	10%	25%	22%	58%
Provision for loss allowance	(26,027)	—	(999)	(723)	(1,290)	(2,181)	(20,834)
Trade receivables, net	118,316	60,977	24,478	6,239	3,851	7,594	15,177

(*) Average expected loss rate. As of December 31, 2019, includes effect of Argentine customer situation as described in Note 26.a.

The closing loss allowances for trade receivables as at December 31, 2019, 2018 and 2017 reconcile to the opening loss allowances as follows:


	2019	2018	2017 *
Balance at January 1,	(26,027)	(20,549)	(14,551)
Adjustment on adoption of IFRS 9	—	3,865	—
Adjusted balance at January 1,	(26,027)	(16,684)	—
Bad debts of the year	(33,757)	(12,748)	(7,672)
Recoveries	2,622	3,190	268
Write off	8,851	811	403
Translation differences and inflation adjustment	(4,423)	(596)	1,003
Balance at December 31,	(52,734)	(26,027)	(20,549)

During the year, the following gains/(losses) were recognized in profit or loss in relation to impaired financial assets:


	2019	2018	2017 *
Impairment losses
- movement in provision for impairment	(33,876)	(12,748)	(7,672)
Reversal of previous impairment losses	2,908	3,190	268
Net impairment losses on financial assets	(30,968)	(9,558)	(7,404)

Previous accounting policy for impairment of trade receivables

* In 2017, the impairment of trade receivables was assessed based on the incurred loss model. Individual receivables which were known to be uncollectible were written off by reducing the carrying amount directly. The other receivables were assessed collectively, to determine whether there was objective evidence that an impairment had been incurred but not yet been identified. For these receivables, the estimated impairment losses were recognized in a separate provision for impairment.

(iv)Liquidity risk

The Group is exposed to liquidity risks, including risks associated with refinancing borrowings as they mature, the risk that borrowing facilities are not available to meet cash requirements, and the risk that financial assets cannot readily be converted to cash without loss of value. Failure to manage liquidity risks could have a material impact on the Group’s cash flow and statement of financial position. Prudent liquidity risk management implies maintaining sufficient cash, the availability of funding through an adequate amount of committed credit facilities and the ability to close out market positions. Due to the dynamic nature of the underlying businesses, the Group aims to maintain flexibility in funding its existing and prospective debt requirements by maintaining diversified funding sources with adequate committed funding lines from high quality lenders.

The Group monitors its current and projected financial position using several key internally generated reports: cash flow; debt maturity; and interest rate exposure. The Group also undertakes sensitivity analysis to assess the impact of proposed transactions, movements in interest rates on the key profitability, liquidity and balance sheet ratios.

The Group’s debt positions are continually reviewed to meet current and expected debt requirements. The Group maintains a balance between longer-term and shorter-term financings. Short-term financing is principally raised through bank facilities and overdraft positions. Medium- to longer-term financing comprises public and private bond issues, including private placements. Financing risk is spread by using a variety of types of debt. The maturity profile is managed, by spreading the repayment dates and extending facilities.

Liquid financial assets as a whole (comprising cash and cash equivalents) were 5.04% of total assets at the end of 2019 compared to 6.37% at the end of 2018. The Group has a conservative approach to the management of its liquidity, which consists mainly in cash at banks and cash equivalents.

(v)Capital Management

The capital structure of the Group consists of shareholders’ equity and short-term to long-term net borrowings. The type and maturity of the Group’s borrowings are analyzed further in Note 22. The Group’s equity is analyzed into its various components in the statement of changes in equity.

Capital is managed so as to promote the long-term success of the business and to maintain sustainable returns for shareholders.

The objectives of the Group for capital management are to safeguard its capacity to continue doing business and be able to provide yield to owners as well as benefits to holders of instruments of shareholder’s equity and maintain an optimum capital structure to reduce cost of capital.


	At December 31,
	2019		2018
Borrowings	1,208,344		1,126,658
Less: Cash and cash equivalents	(195,696)		(244,865)
Net borrowings	1,012,648		881,793
Equity	1,198,614		1,222,697

Debt ratio	84	%	72	%

(vi)Argentina economical context

CAAP's Argentine subsidiaries are operating in an economic context in which main variables have recently experienced a strong volatility as a consequence of political and economic uncertainties, both in national and international environments.

In the local Argentine market, specifically, since the interruption of external voluntary financing, the premium attached to country risk has increased resulting in a progressive loss of the Argentine financial assets value, including debt securities and stock prices. At the same time, the Argentine peso has experienced a sharp drop while annual inflation of reached 52.9% year to year, capital controls were implemented and the ARS/USD rate was devalued by 37% during 2019 while the Argentine peso in the "blue chip market" went through further erosion.

An unexpected significant outflow of U.S. dollars deposits from the domestic banks (consequently generating a decrease in Argentine Central Bank reserves) occurred after the first round of primary presidential elections triggering an increase in the reference ARS policy interest rate to levels above 80%. More recently, in March 2020, local interest rates experienced a significant reduction to levels of 35-40% accompanying a drop in the latest inflation indices.

The authorities inaugurated on December 10, 2019 started implementing several initiatives in the economic field signaling an Emergency situation. Among them, they further postponed payments scheduled for domestic government debt and announced intentions to restructure foreign public sector liabilities. They also strengthened restrictions to operate in the foreign exchange market and froze public services tariffs in order to review their price adjustment formulas, among others.

Upon request from the Executive, the Federal Congress passed a series of emergency bills aimed at improving fiscal accounts projections, including increasing certain tax rates while reducing outlays and temporarily transferring more discretional power to the Federal Administration.

Under these circumstances, with uncertainties related to the economic program and higher volatility, the impact on Argentine financial assets was felt. Due to the significance of the Argentine subsidiaries in CAAP´s business. its stock price was no exception. In fact, between December 31, 2019 and February 28, 2020, the Buenos Aires Stock Exchange S&P Merval Index experienced a 24% decline measured at the "freely available dollar Arg. peso/US dollar rate" (blue chip rate), while the Company's shares at the New York Stock Exchange ("NYSE") declined 29%. In the previous quarter, Q4-2019, its share price in the NYSE increased 32% while the Buenos Aires Stock Exchange S&P Merval Index experienced a 22% surge, both measured at the "freely available dollar Arg. peso/US dollar rate" (blue chip rate).

Considering this situation, the Company continues to assess the evolution of the above-mentioned variables and any other factors, such as the outbreak of Coronavirus, in order to identify the unforeseen potential effects that could alter its business and performance.

B. Financial instruments by category


	Assets at fair
	value through	Assets at amortized
December 31, 2019	profit and loss	cost	Total
Financial assets as per the statement of financial position
Trade receivables	—	106,203	106,203
Other receivables	—	135,491	135,491
Other financial assets (*)	20,650	68,907	89,557
Derivative financial instruments	27	—	27
Cash and cash equivalents	—	195,696	195,696
Total	20,677	506,297	526,974


	Liabilities at fair
	value through	Liabilities at
	profit and loss	amortized cost	Total
Financial liabilities as per the statement of financial position
Borrowings	—	1,208,344	1,208,344
Leases liabilities	—	8,927	8,927
Trade payables and other liabilities	—	1,076,329	1,076,329
Total	—	2,293,600	2,293,600


	Assets at fair
	value through	Assets at amortized
December 31, 2018	profit and loss	cost	Total
Financial assets as per the statement of financial position
Trade receivables	—	118,316	118,316
Other receivables	—	136,698	136,698
Other financial assets (*)	41,379	45,311	86,690
Cash and cash equivalents	—	244,865	244,865
Total	41,379	545,190	586,569


	Liabilities at fair
	value through	Liabilities at
	profit and loss	amortized cost	Total
Financial liabilities as per the statement of financial position
Borrowings	—	1,126,658	1,126,658
Trade payables and other liabilities	—	1,082,799	1,082,799
Total	—	2,209,457	2,209,457

(*) Other financial assets measured at fair value are Level 1 hierarchy.

C. Fair value hierarchy

IFRS 13 requires for financial instruments that are measured in the statement of financial position at fair value, a disclosure of fair value measurements by level according to the following fair value measurement hierarchy:

Level 1‑ Quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2‑ Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices).

Level 3‑ Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs).

D. Fair value estimation

The estimated fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

Segment information

12 Months Ended

Dec. 31, 2019

Segment information

Segment information

4 Segment information

Operating segments are components of an enterprise where separate financial information is available that is evaluated regularly by the Chief Operating Decision Maker, or decision-making group, in deciding how to allocate resources and in assessing performance. The Group’s chief operating decision maker is its Board of Directors. The Group’s operating segments are managed separately because each operating segment represents a strategic business unit providing airport and non-airport services (“others”) to clients in different countries. The Group’s reportable operating segments are the seven countries in which the Group currently operates, which are Argentina, Brazil, Uruguay, Armenia, Ecuador, Italy and Peru.

Within each reportable segment, the Group develops and operates airport concessions (“Airports”) and provides other services not directly related to airport concessions (“Others”).

Assets, liabilities and results of sub-holding and/or holding companies are not allocated and are reported within the “Unallocated” column. This column also includes head office and group services.

The elimination of any intersegment revenues and other significant intercompany operations are included in the “Intersegment Adjustments” column.

The performance of each reportable segment is measured by its adjusted EBITDA, defined, with respect to each segment, as net income before financial income, financial loss, inflation adjustment, income tax expense, depreciation and amortization for such segment. The Adjusted EBITDA does not exclude the amortization of the intangible asset related to the fixed fee payable to the corresponding governments for the operation of the airports concessions.

In addition, the CODM considers each reportable segment’s Adjusted EBITDA before Construction Services margin as a relevant performance measure.

Adjusted EBITDA excluding Construction Services is defined, with respect to each segment, as net income before construction services revenue, financial income, construction services cost, financial loss, inflation adjustment, income tax expense, depreciation and amortization for such segment. The Adjusted EBITDA excluding construction services revenue and construction services cost does not exclude the amortization of the intangible asset related to the fixed fee payable to the corresponding governments for the operation of airports concessions.

Geographical information




	Argentina		Brazil		Uruguay		Armenia	Ecuador	Italy	Perú	Intrasegment
	Airports	Others	Airports	Others	Airports	Others	Airports	Airports	Airports	Airports	Adjustments	Unallocated	Total*
Year ended December 31, 2019
Revenue	935,035	217	116,581	—	107,744	16,888	133,463	109,608	145,635	—	(12,326)	5,795	1,558,640
Cost of services	(711,144)	(18)	(96,210)	—	(54,218)	(12,968)	(82,472)	(71,958)	(104,573)	—	9,191	(14,055)	(1,138,425)
Gross profit / (loss)	223,891	199	20,371	—	53,526	3,920	50,991	37,650	41,062	—	(3,135)	(8,260)	420,215
Selling, general and administrative expenses	(88,083)	(308)	(12,515)	(115)	(12,625)	(1,346)	(12,259)	(17,035)	(15,012)	—	3,137	(12,130)	(168,291)
Impairment loss	—	—	(42,801)	—	—	—	—	—	—	—	—	—	(42,801)
Other operating income	15,474	38	1,341	—	131	49	103	140	—	—	(17)	—	17,259
Other operating expenses	(1,075)	—	(332)	—	(346)	(75)	(731)	(93)	(111)	—	16	—	(2,747)
Operating income / (loss)	150,207	(71)	(33,936)	(115)	40,686	2,548	38,104	20,662	25,939	—	1	(20,390)	223,635
Share of loss in associates	—	—	—	—	—	—	—	—	35	(5,088)	—	(300)	(5,353)
Amortization and depreciation	91,217	—	11,788	—	12,124	1,024	13,724	4,646	12,530	—	—	15,394	162,447
Adjusted Ebitda	241,424	(71)	(22,148)	(115)	52,810	3,572	51,828	25,308	38,504	(5,088)	1	(5,296)	380,729
Construction services revenue	(308,296)	—	—	—	(6,110)	—	(11,591)	(14,888)	(9,379)	—	—	—	(350,264)
Construction services cost	308,072	—	—	—	6,110	—	11,255	14,888	7,673	—	—	—	347,998
Adjusted Ebitda excluding Construction Services	241,200	(71)	(22,148)	(115)	52,810	3,572	51,492	25,308	36,798	(5,088)	1	(5,296)	378,463
Construction services revenue	308,296	—	—	—	6,110	—	11,591	14,888	9,379	—	—	—	350,264
Construction services cost	(308,072)	—	—	—	(6,110)	—	(11,255)	(14,888)	(7,673)	—	—	—	(347,998)
Adjusted Ebitda	241,424	(71)	(22,148)	(115)	52,810	3,572	51,828	25,308	38,504	(5,088)	1	(5,296)	380,729
Financial income													51,889
Financial loss													(233,521)
Inflation adjustment													(25,391)
Amortization and depreciation													(162,447)
Income before income tax expense													11,259
Income tax expense													(17,079)
Net loss													(5,820)

Current assets	149,064	139	47,726	140	16,691	4,222	57,323	50,629	55,249	—	(59,393)	185,853	507,643
Non-current assets	1,235,497	22	1,106,996	104	151,717	6,425	169,130	63,914	245,541	8,059	(768)	387,963	3,374,600
Capital Expenditure	308,301	—	5,347	—	7,040	2,332	13,270	18,198	17,905	—	(33)	13	372,373
Current liabilities	220,849	29	129,875	2	21,080	2,740	27,853	49,616	105,873	—	(59,393)	63,778	562,302
Non-current liabilities	516,344	—	1,080,283	—	48,018	3,644	54,009	17,839	60,650	—	(768)	341,308	2,121,327

* The Group initially applied IFRS 16 at January 1, 2019. In applying IFRS 16, in relation to the leases that were classified as operating leases, the Group recognizes depreciation and interest costs, instead of operating lease expense. In relation to those leases, the Group recognized USD 3,443 of depreciation charges and USD 477 of additional interest costs from leases in 2019.




	Argentina		Brazil		Uruguay		Armenia	Ecuador	Italy	Perú	Intrasegment
	Airports	Others	Airports	Others	Airports	Others	Airports	Airports	Airports	Airports	Adjustments	Unallocated	Total
Year ended December 31, 2018
Revenue	822,756	256	123,241	—	105,707	17,668	118,376	89,225	155,483	—	(12,313)	5,746	1,426,145
Cost of services	(562,275)	(19)	(103,933)	—	(51,953)	(13,305)	(68,541)	(51,382)	(115,077)	—	9,578	(14,518)	(971,425)
Gross profit / (loss)	260,481	237	19,308	—	53,754	4,363	49,835	37,843	40,406	—	(2,735)	(8,772)	454,720
Selling, general and administrative expenses	(75,189)	(251)	(20,204)	(15)	(12,796)	(1,348)	(12,676)	(20,512)	(13,610)	—	2,735	(18,033)	(171,899)
Other operating income	15,854	41	2,186	—	440	84	137	1,465	—	—	—	—	20,207
Other operating expenses	(1,553)	—	(1,445)	—	(267)	(98)	(611)	(80)	—	—	—	—	(4,054)
Operating income / (loss)	199,593	27	(155)	(15)	41,131	3,001	36,685	18,716	26,796	—	—	(26,805)	298,974
Share of loss in associates	—	—	—	—	—	—	—	—	43	(5,325)	—	1,136	(4,146)
Amortization and depreciation	75,164	—	15,011	—	12,687	946	12,137	5,954	11,935	—	—	17,215	151,049
Adjusted Ebitda	274,757	27	14,856	(15)	53,818	3,947	48,822	24,670	38,774	(5,325)	—	(8,454)	445,877
Construction services revenue	(176,131)	—	—	—	(653)	—	(5,799)	—	(15,834)	—	—	—	(198,417)
Construction services cost	175,964	—	—	—	634	—	5,629	—	14,117	—	—	—	196,344
Adjusted Ebitda excluding Construction Services	274,590	27	14,856	(15)	53,799	3,947	48,652	24,670	37,057	(5,325)	—	(8,454)	443,804
Construction services revenue	176,131	—	—	—	653	—	5,799	—	15,834	—	—	—	198,417
Construction services cost	(175,964)	—	—	—	(634)	—	(5,629)	—	(14,117)	—	—	—	(196,344)
Adjusted Ebitda	274,757	27	14,856	(15)	53,818	3,947	48,822	24,670	38,774	(5,325)	—	(8,454)	445,877
Financial income													76,281
Financial loss													(331,147)
Inflation adjustment													(36,460)
Amortization and depreciation													(151,049)
Income before income tax expense													3,502
Income tax expense													(14,101)
Net loss													(10,599)

Current assets	202,187	251	45,042	116	21,925	3,660	51,264	44,145	51,192	—	(60,077)	173,037	532,742
Non-current assets	1,061,352	23	1,224,475	—	149,418	5,396	168,465	46,009	239,489	8,640	(600)	409,869	3,312,536
Capital Expenditure	176,525	—	8,264	—	1,832	1,552	8,026	2,127	21,142	—	—	64	219,532
Current liabilities	150,971	36	106,907	—	22,874	2,341	25,525	45,130	89,414	—	(59,909)	67,262	450,551
Non-current liabilities	504,934	—	1,121,409	—	52,904	2,450	74,457	2,098	65,552	—	(768)	348,994	2,172,030




	Argentina		Brazil		Uruguay		Armenia	Ecuador	Italy	Perú	Intrasegment
	Airports	Others	Airports	Others	Airports	Others	Airports	Airports	Airports	Airports	Adjustments	Unallocated	Total
Year ended December 31, 2017
Revenue	1,000,303	422	128,842	—	100,553	15,774	94,464	85,310	154,526	—	(10,191)	5,150	1,575,153
Cost of services	(638,216)	(144)	(116,164)	—	(48,371)	(12,184)	(52,863)	(50,247)	(104,257)	—	6,778	(14,315)	(1,029,983)
Gross profit / (loss)	362,087	278	12,678	—	52,182	3,590	41,601	35,063	50,269	—	(3,413)	(9,165)	545,170
Selling, general and administrative expenses	(96,737)	(242)	(14,361)	—	(11,758)	(1,323)	(11,263)	(16,185)	(30,800)	—	3,413	(14,945)	(194,201)
Reversal of previous impairment/(Impairment loss)	—	—	3,065	—	—	—	—	—	—	—	—	—	3,065
Other operating income	18,942	69	—	—	74	341	149	287	—	—	—	91	19,953
Other operating expenses	(1,271)	(1)	(1,622)	—	(623)	(371)	(827)	(77)	—	—	(9)	(37)	(4,838)
Operating income / (loss)	283,021	104	(240)	—	39,875	2,237	29,660	19,088	19,469	—	(9)	(24,056)	369,149
Share of loss in associates	—	—	—	—	—	—	—	—	39	(15,283)	—	(597)	(15,841)
Amortization and depreciation	32,121	—	17,038	—	12,495	590	11,493	7,376	10,302	—	—	16,899	108,314
Adjusted Ebitda	315,142	104	16,798	—	52,370	2,827	41,153	26,464	29,810	(15,283)	(9)	(7,754)	461,622
Construction services revenue	(231,014)	—	—	—	(2,750)	—	(2,553)	—	(13,795)	—	—	—	(250,112)
Construction services cost	230,829	—	—	—	2,670	—	2,479	—	12,624	—	—	—	248,602
Adjusted Ebitda excluding Construction Services	314,957	104	16,798	—	52,290	2,827	41,079	26,464	28,639	(15,283)	(9)	(7,754)	460,112
Construction services revenue	231,014	—	—	—	2,750	—	2,553	—	13,795	—	—	—	250,112
Construction services cost	(230,829)	—	—	—	(2,670)	—	(2,479)	—	(12,624)	—	—	—	(248,602)
Adjusted Ebitda	315,142	104	16,798	—	52,370	2,827	41,153	26,464	29,810	(15,283)	(9)	(7,754)	461,622
Financial income													62,555
Financial loss													(302,047)
Amortization and depreciation													(108,314)
Income before income tax expense													113,816
Income tax expense													(46,925)
Net income													66,891

Revenue

12 Months Ended

Dec. 31, 2019

Revenue

Revenue

5 Revenue


	2019	2018	2017
Aeronautical revenue	723,996	716,172	767,023
Non aeronautical revenue
Commercial revenue	481,900	507,015	555,504
Construction service revenue	350,264	198,417	250,112
Other revenue	2,480	4,541	2,514
Revenue	1,558,640	1,426,145	1,575,153

Timing of revenue recognition
Over time	1,301,019	1,135,108	1,264,131
At a point in time	48,456	43,293	29,147
Revenues outside the scope of IFRS 15 and IAS 18 (*)	209,165	247,744	281,875
Revenue	1,558,640	1,426,145	1,575,153

(*) IFRS 15 for the year ended December 31, 2019 and 2018 and IAS 18 for the year ended December 31, 2017.

Cost of services

12 Months Ended

Dec. 31, 2019

Disclosure Of Cost Of Sales [Abstract]

Cost of services

6 Cost of services


	2019	2018	2017
Salaries and social security contributions (**)	(191,030)	(191,058)	(210,799)
Concession fees (***)	(163,919)	(171,429)	(191,933)
Construction services cost	(347,998)	(196,344)	(248,602)
Maintenance expenses	(128,858)	(130,979)	(145,787)
Amortization and depreciation (****)	(152,512)	(141,824)	(100,674)
Services and fees	(65,488)	(58,850)	(54,479)
Cost of fuel	(43,540)	(38,911)	(27,818)
Taxes (*)	(17,011)	(17,719)	(19,511)
Office expenses	(14,102)	(11,542)	(17,256)
Provision for maintenance costs	(2,174)	(2,092)	(2,314)
Others	(11,793)	(10,677)	(10,810)
	(1,138,425)	(971,425)	(1,029,983)

(*) Mainly includes tax from turnover and municipal taxes.

(**) At the year-end, the number of employees was 6.3 in 2019, 6.1 thousand in 2018 and 6.1 in 2017.

(***) Includes depreciation for fixed concession assets fee of USD 19,742 for the year ended December 31, 2019 (USD 24,780 and USD 29,816 for the year ended December 31, 2018 and 2017 respectively).

(****) Includes amortization of leases of USD 2,756 for the year ended December 31, 2019.

Selling, general and administrative expenses

12 Months Ended

Dec. 31, 2019

Selling, general and administrative expenses

Selling, general and administrative expenses

7 Selling, general and administrative expenses


	2019	2018	2017
Taxes (*)	(38,977)	(45,536)	(54,883)
Salaries and social security contributions	(28,860)	(32,433)	(35,812)
Services and fees	(37,915)	(44,137)	(58,511)
Office expenses	(5,190)	(10,209)	(11,620)
Amortization and depreciation (**)	(9,935)	(9,225)	(7,640)
Maintenance expenses	(1,717)	(3,101)	(4,215)
Advertising	(3,367)	(4,722)	(3,044)
Insurance	(1,689)	(2,037)	(2,289)
Charter service	(799)	(830)	(830)
Bad debts recovery	2,908	3,190	268
Bad debts	(33,876)	(12,748)	(7,672)
Other	(8,874)	(10,111)	(7,953)
	(168,291)	(171,899)	(194,201)

(*) Mainly included tax from taxes over banks transactions and tax on revenue.

(**) Includes amortization of leases of USD 687 for the year ended December 31, 2019.

Other operating income

12 Months Ended

Dec. 31, 2019

Other operating income

Other operating income

8 Other operating income


	2019	2018	2017
Government grant (*) (Note 25)	15,387	15,854	18,942
Other	1,872	4,353	1,011
	17,259	20,207	19,953

(*) Corresponds to government grant for the development of airport infrastructure in Group A (operated by AA2000) of the National Airport System. There are no unfulfilled conditions or other contingencies attaching to these grants. The group did not benefit directly from any other forms of government assistance.

Financial results, net

12 Months Ended

Dec. 31, 2019

Financial results, net

Financial results, net

9 Financial results, net


	2019	2018	2017

Interest income	31,329	27,205	39,229
Foreign exchange income	5,975	46,167	23,112
Other financial income (*)	14,585	2,909	214
Financial income	51,889	76,281	62,555

Interest expense	(92,687)	(96,301)	(115,223)
Foreign exchange loss	(43,365)	(137,601)	(82,333)
Changes in liability for concessions (Note 23)	(88,488)	(86,331)	(98,122)
Other financial loss () (*)	(8,981)	(10,914)	(6,369)
Financial loss	(233,521)	(331,147)	(302,047)

Inflation adjustment	(25,391)	(36,460)	—
Inflation adjustment	(25,391)	(36,460)	—
Financial results, net	(207,023)	(291,326)	(239,492)

(*) Includes derivative financial instruments fair value net gains for a total amount of USD 101 for the year ended December 31, 2019.

(**) Includes leases financial cost, see Note 14(ii).

Share of loss in associates

12 Months Ended

Dec. 31, 2019

Share of loss in associates

Share of loss in associates

10 Share of loss in associates


	2019	2018	2017
Loss in associates (Note 15)	(5,353)	(4,146)	(15,841)
	(5,353)	(4,146)	(15,841)

Income tax expense

12 Months Ended

Dec. 31, 2019

Disclosure Of Income Tax [Abstract]

Income tax expense

11 Income tax expense


	2019	2018	2017
Current income tax	(48,425)	(39,100)	(88,768)
Deferred income tax	31,346	24,999	41,843
	(17,079)	(14,101)	(46,925)

The income tax expense differs from the theoretical amount that would arise using the tax rate in each country as follows:


	2019	2018	2017

Income before income tax	11,259	3,502	113,816
Tax benefit/ (expense) calculated for each company	4,978	11,008	(41,342)
Adjustments
Non-taxable income	30,387	20,455	12,682
Expenses related to non-taxable income	(20,732)	(16,960)	(24,762)
Non-deductible expenses	(6,811)	(9,803)	(8,799)
Effect of tax inflation adjustment (3)	(31,202)	—	—
Effect of inflation adjustment	3,332	(20,152)	—
Effect of asset revaluation for tax purposes (2)	70,544	—	—
Asset revaluation for tax purpose - Current tax (2)	(11,876)	—	—
Tax incentive	901	424	1,665
Income tax rate change (1)	(188)	171	12,533
Other (4)	(56,412)	756	1,098
Income tax expense	(17,079)	(14,101)	(46,925)

The average effective income tax rate for the Group for the year ended December 31, 2019 is 36% (51% as of December 31, 2018 and 41% as of December 31, 2017).

(1)

On December 29, 2017, the National Executive Office of Argentina issued Law 27.430 - Income Tax. This law has introduced several changes in the treatment of income tax whose key components are the following: Income Tax Rate: The Income Tax rate for Argentine companies will be gradually reduced from 35% to 30% for fiscal years starting from January 1, 2018 until December 31, 2019 and to 25% for fiscal years beginning on or after January 1, 2020, inclusive. On December 23, 2019, through Law No. 27.541, the Income Tax rate reduction established by Law 27.430 was suspended until fiscal years beginning January 1, 2021, maintaining the rate at 30%.

(2)

As of March 29, 2019, AA2000 exercised an option of the asset revaluation for tax purpose included in Law No. 27.430 of Argentina, fiscal period 2017, generating a deferred tax gain of ARS 4,225 million (approximately USD 70,544), as well as a special current tax charge of ARS 771 million (approximately USD 11,876) for the adherence to that option.

(3)

In order to determine the net taxable income of AA2000 at the end of this period, the tax inflation adjustment determined in accordance with articles No. 95 to No. 98 of the income tax law has been incorporated into the tax results for a total amount of ARS 1,863 million (approximately USD 31,202), due to the fact that as of December 31, 2019 the price index variation has already exceeded 30%. Likewise, the income tax law allows the deferral of the charge generated by the tax inflation adjustment in six consecutive years, as a result, ARS 362 million (approximately USD 6,044) was recognized in current tax liabilities and ARS 1,501 million (approximately USD 25,158) as deferred tax liabilities.

(4)

Mainly includes unrecognized tax losses from Brazilian concessions.

Intangible assets, net

12 Months Ended

Dec. 31, 2019

Intangible assets, net

Intangible assets, net

12 Intangible assets, net


			Patent, intellectual
			property rights and
	Concession Assets	Goodwill	others	Total
Cost
Balances at January 1, 2019	3,837,668	56,501	20,648	3,914,817
Concession rights due to concession extension	4,359	—	—	4,359
Acquisitions	354,296	—	960	355,256
Impairment	(42,801)	—	—	(42,801)
Disposals	(30)	—	—	(30)
Transfer to property plant and equipment	(36)	—	9	(27)
Transfer from property plant and equipment	1,766	—	—	1,766
Translation differences and inflation adjustment	(97,791)	(995)	(291)	(99,077)
Balances at December 31, 2019	4,057,431	55,506	21,326	4,134,263
Balances at January 1, 2018	3,312,006	57,049	14,867	3,383,922
Adjustment on initial application of IAS 29	896,205	—	—	896,205
Adjusted balances at January 1, 2018	4,208,211	57,049	14,867	4,280,127
Acquisitions	207,217	—	1,176	208,393
Disposals	(3,167)	—	—	(3,167)
Transfer to property plant and equipment	(48)	—	(73)	(121)
Translation differences and inflation adjustment	(570,360)	(548)	(800)	(571,708)
Balances at December 31, 2018	3,841,853	56,501	15,170	3,913,524
Depreciation
Accumulated at January 1, 2019	964,466	—	16,809	981,275
Amortization of the year	167,470	—	1,446	168,916
Disposals	(24)	—	—	(24)
Transfer from property plant and equipment	624	—	—	624
Translation differences and inflation adjustment	(18,446)	—	(203)	(18,649)
Accumulated at December 31, 2019	1,114,090	—	18,052	1,132,142
Accumulated at January 1, 2018	553,767	313	11,488	565,568
Adjustment on initial application of IAS 29	310,282	—	—	310,282
Adjusted balances at January 1, 2018	864,049	313	11,488	875,850
Amortization of the year	165,048	—	1,277	166,325
Translation differences and inflation adjustment	(61,188)	(313)	(692)	(62,193)
Accumulated at December 31, 2018	967,909	—	12,073	979,982
Net balances at December 31, 2019	2,943,341	55,506	3,274	3,002,121
Net balances at December 31, 2018	2,873,944	56,501	3,097	2,933,542

During 2019, the Company identified impairment indicators of Inframerica Concessionária do Aeroporto de São Gonçalo do Amarante S.A. (“ICASGA”) intangible assets in Brazil operation segment. The passenger curve of the concession notice has a significantly higher projection for the elapsed period, which indicates a reduction in the expectation of future economic benefits. Therefore, the company performed an impairment test based on cash flow projections covering the remaining concession period of 21 years (value in use), based on key assumptions estimated with historical information and management judgment. The key assumptions were: number of passengers, fees, future operating expenses and discount rate.

The carrying value of the assets impaired was as follows:


	Net assets before		Net assets after
	impairment	Impairment	impairment
ICASGA	114,719	(42,801)	71,918

The discount rate used was the weighted average cost of capital (WACC) which is considered to be a good indicator of capital cost. WACC was determined considering risk of investing in equity, in airport sector and country. The nominal discount rate used was 8.72%, calculated from a Rolling WACC method considering the effects of debt over the capital and re-leverage of Beta.

As the calculation of the impairment applied to the intangible assets has as one of its main variables the discount rate, the company carried out a sensitivity analysis showing the impact that it would have on the result if different rates were used. The result of this analysis is shown in the table below:

As of December 31, 2019:


	Estimated rate	Nominal Rate	Estimated rate
	(Minus 1,0%)	(8,72%)	(Plus 1,0%)
Impairment value	34,617	42,801	49,918
Effect	(8,184)		7,117

The number of passengers was the other main assumption for the calculation of the impairment test. In the current impairment test, it was assumed a compound annual growth rate of 4,56%. The result of this sensitivity analysis is shown in the table below:


	Estimated rate	Passenger's CAGR	Estimated Rate
	(Minus 1,0%)	(4,56%)	(Plus 1,0%)
Impairment value	51,393	42,801	32,365
Effect	8,592		(10,436)

The Company additionally tested the value of the goodwill for impairment, resulting in no impairment charges to be recognized.

Furthermore, considering the Argentine economic situation as mentioned in Note 3.A(vi), the Company decided to assess the recoverability of its investments in Argentina, resulting in no impairment charges to be recognized.

No other of the Company's CGUs, including long-lived assets with finite useful lives, were tested for impairment as no impairment indicators were identified.

Property, plant and equipment, net

12 Months Ended

Dec. 31, 2019

Property, plant and equipment, net

Property, plant and equipment, net

13 Property, plant and equipment, net


	Land,	Plant and	Vehicles,
	building and	production	furniture and	Works in
	improvements	Equipment	fixtures	progress	Others	Total
Cost
Balances at January 1, 2019	50,886	57,459	46,715	1,666	21,670	178,396
Acquisitions	571	5,996	5,135	3,537	1,878	17,117
Disposals	—	—	(246)	(80)	—	(326)
Transfer	2,231	20	—	(2,259)	8	—
Transfers from Intangible	—	2	25	—	—	27
Transfer to Intangible	(969)	(394)	(373)	—	—	(1,736)
Translation differences and inflation adjustment	(826)	(788)	22	(41)	(426)	(2,059)
Balances at December 31, 2019	51,893	62,295	51,278	2,823	23,130	191,419
Balances at January 1, 2018	54,655	54,389	40,479	1,467	22,617	173,607
Adjustment on initial application of IAS 29	1,358	—	3,444	48	89	4,939
Adjustment balances at January 1, 2018	56,013	54,389	43,923	1,515	22,706	178,546
Acquisitions	289	4,551	4,263	900	1,136	11,139
Disposals	—	—	(520)	—	(774)	(1,294)
Transfer from Intangible	(298)	278	172	(584)	553	121
Translation differences and inflation adjustment	(2,631)	(1,989)	(1,119)	(106)	(1,190)	(7,035)
Balances at December 31, 2018	53,373	57,229	46,719	1,725	22,431	181,477
Depreciation
Accumulated at January 1, 2019	11,543	44,517	31,300	—	16,737	104,097
Depreciation of the year	810	3,605	4,110	—	1,305	9,830
Disposals	—	—	(245)	—	—	(245)
Transfer to Intangible	—	(335)	(289)	—	—	(624)
Translation differences and inflation adjustment	(227)	(671)	(10)	—	(343)	(1,251)
Accumulated at December 31, 2019	12,126	47,116	34,866	—	17,699	111,807
Accumulated at January 1, 2018	12,434	42,376	26,227	—	18,087	99,124
Adjustment on initial application of IAS 29	568	—	3,030	—	86	3,684
Adjusted balances at January 1, 2018	13,002	42,376	29,257	—	18,173	102,808
Depreciation of the year	925	3,852	3,607	—	1,120	9,504
Disposals	—	—	(464)	—	(773)	(1,237)
Translation differences	(721)	(1,637)	(595)	—	(944)	(3,897)
Accumulated at December 31, 2018	13,206	44,591	31,805	—	17,576	107,178
Net balances at December 31, 2019	39,767	15,179	16,412	2,823	5,431	79,612
Net balances at December 31, 2018	40,167	12,638	14,914	1,725	4,855	74,299

Leases

12 Months Ended

Dec. 31, 2019

Leases

Leases

14 Leases

(i) Amounts recognized in Consolidated Financial Position:

The Consolidated Statement of Financial Position shows the following amounts relating to leases:


	For the year ended	As of January 1,
	December 31, 2019	2019 *
Right-of-use assets
Land, building and improvements	7,037	10,103
Plant and production equipment	1,003	1,224
Vehicles, furniture and fixtures	340	519
	8,380	11,846

Lease liabilities
Current	3,144	4,942
Non-current	5,783	8,607
	8,927	13,549

* In the previous year, the group only recognized lease assets and lease liabilities in relation to leases that were classified as ‘finance leases’ under IAS 17 Leases. The assets were presented in property, plant and equipment and the liabilities as part of the group’s borrowings. For adjustments recognized on adoption of IFRS 16 on January 1, 2019, please refer to note 2.Y.

The evolution of right-of-use assets and lease liabilities during the year 2019 is as follows:


Right-of-use assets		2019
Balances at the beginning of the year		—
Adjustment on adoption of IFRS 16		11,846
Adjusted balances at the beginning of the period		11,846
Additions		427
Depreciation of the year		(3,443)
Translation differences and inflation adjustment		(450)
Balances at the end of the year		8,380


Lease liabilities		2019
Balances at the beginning of the year		—
Adjustment on adoption of IFRS 16		13,549
Adjusted balances at the beginning of the period		13,549
New contracts		436
Lease payments		(5,130)
Leases financial cost		477
Translation differences and inflation adjustment		(405)
Balances at the end of the year		8,927

The maturity of lease liabilities is as follows:


	1 year or less	1 to 2 years	2 to 5 years	Over 5 years	Total
At December 31, 2019 (1)	3,523	898	2,159	4,004	10,584

(1) The amounts disclosed in the table are the contracted undiscounted cash flows.

(ii) Amounts recognized in Consolidated Statement of Income:

The Consolidated Statement of Income shows the following amounts relating to leases:


		For the year ended
		December 31, 2019
Depreciation charge of right-of-use assets
Land, building and improvements		(2,957)
Plant and production equipment		(160)
Vehicles, furniture and fixtures		(326)
		(3,443)

Financial expenses (Leases financial cost)		(477)
Expense relating to short-term leases (included in cost of services and selling, general and administrative expenses)		(439)
Expense relating to leases of low-value assets that are not shown above as short-term leases (included in cost of services and selling, general and administrative expenses)		(204)
Expense relating to variable lease payments not included in lease liabilities (included in cost of services)		(2,011)

(iii) Variable lease payments

Some security equipment leases contain variable payment terms that are linked to passengers traffic. Variable lease payments that depend on passengers are recognized in profit or loss in the period in which the condition that triggers those payments occurs. A 10% increase in passenger traffic across airports in the group with such variable lease contracts would increase total lease payments by approximately USD 201.

(v) The group as a lessor

As indicated in Note 2.Y, leases and sub-concession of spaces are classified as operating leases. These revenues mainly refer to sub-concessions of commercial spaces (duty free shops, food and beverage services, retail stores) and advertising spaces, among others. Lease payments for some contracts include a minimum agreed upon amount and other variable lease payments by applying a percentage on lessors’ revenues, both of which are set forth in the lease agreements. Where considered necessary to reduce credit risk, the group may obtain guarantees for the term of the lease.

Commercial revenues corresponding to variable income from lease or sub-concession of spaces that do not depend on an index or rate, for example determined on the basis of lessee’s sales or passengers traffic, correspond to a 41% of total revenues of leases and sub-concession of spaces.

Minimum lease payments receivable on leases and sub-concession of spaces with third parties at its airports facilities are as follows:


		At December 31,
		2019
Within 1 year		90,914
Between 1 and 5 years		248,986
Later than 5 years		296,899
Total		636,799

Investments in associates

12 Months Ended

Dec. 31, 2019

Investments in associates

Investments in associates

15 Investments in associates


	For the Year ended December 31,
	2019	2018
Balances at the beginning of the year	10,886	13,435
Translation differences	35	(1,150)
Share of loss in associates	(5,353)	(4,146)
Contributions	4,425	2,907
Decrease	(64)	(160)
Balances at the end of the year	9,929	10,886

Breakdown of the share of loss in associates is as follows:


	2019	2018	2017
Aeropuertos Andinos del Perú S.A.	(3,937)	(3,664)	(9,338)
Sociedad Aeroportuaria Kuntur Wasi S.A.	(1,151)	(1,661)	(5,945)
Others	(265)	1,179	(558)
	(5,353)	(4,146)	(15,841)

Main Associates are as follows:


			Percentage of
			ownership at				For the Year ended
		Country of	December 31,				December 31,
Company	Main activity	incorporation	2019		2018		2019	2018
Aeropuertos Ecológicos de Galápagos S.A. (*)	Airport Operation	Ecuador	99.90	%	99.90	%	1,000	1,000
Sociedad Aeroportuaria KunturWasi S.A. (**)	Airport Operation	Perú	47.68	%	47.68	%	—	—
Aeropuertos Andinos del Perú S.A.	Airport Operation	Perú	50.00	%	50.00	%	8,046	8,640
Others		—	—		—		883	1,246
							9,929	10,886

(*) Under the terms of the Galapagos Concession Agreement, the net income generated by the Company must be transferred entirely to the Dirección General de Aviación Civil (“DGAC”), however, the Group maintains the operational management of such company and therefore has significant influence.

(**) On July 13, 2017, the Government of Peru notified the unilateral decision to rescind the concession agreement for the Nuevo Aeropuerto International de Chinchero. Refer to note 26.a Peruvian proceedings.

Summarized selected financial information of Aeropuertos Andinos del Perú S.A., including the aggregated amounts of assets, liabilities, equity and profit or loss, is as follows:


	Aeropuertos Andinos del
	Perú S.A.
	2019	2018
Non-current assets	44,453	31,249
Current assets	8,229	5,449
Total assets	52,682	36,698
Non-current liabilities	21,836	9,304
Current liabilities	15,109	10,140
Total liabilities	36,945	19,444
Equity	15,737	17,254
Revenue	17,526	16,499
Loss for the year	(7,875)	(7,328)
Other comprehensive loss for the year	(483)	(1,471)
Total comprehensive loss for the year	(8,358)	(8,799)

Deferred income tax

12 Months Ended

Dec. 31, 2019

Deferred income tax

Deferred income tax

16 Deferred income tax

Deferred income taxes are calculated in full on temporary differences under the liability method using the tax rate enacted in each country that are expected to apply in the period the temporary difference will reverse. (Uruguay: 25%, Argentina: 30% and 25% (see Note 11), Italy: 27.5%, Armenia: 20%, Brazil: 34%, Ecuador: 25%, Spain: 25%, Luxembourg: 25%).

The evolution of deferred tax assets and liabilities during the years 2019 and 2018 are as follows:

Deferred tax liabilities


	Property, plant and
	equipment and	Tax inflation	Other
	Intangibles Assets	adjustment	liabilities	Total
Balances at January 1, 2019	278,047	—	29,627	307,674
Increase/(Decrease) of deferred tax liabilities for the year	(48,671)	25,626	(224)	(23,269)
Translation differences and inflation adjustment	(6,652)	—	(1,277)	(7,929)
Balances at December 31, 2019	222,724	25,626	27,861	276,476
Balances at January 1, 2018	154,520	—	79,453	233,973
Adjustment on adoption of IFRS 9	-	—	966	966
Adjustment on initial application of IAS 29	149,032	—	—	149,032
Adjusted balance at January 1, 2018	303,552	—	80,419	383,971
Increase/(Decrease) of deferred tax liabilities for the year	20,184	—	(23,801)	(3,617)
Translation differences and inflation adjustment	(45,689)	—	(26,991)	(72,680)
Balances at December 31, 2018	278,047	—	29,627	307,674

Deferred tax assets


			Property, plant and
	Provisions and	Tax loss	equipment and
	allowances	carry forwards	Intangibles Assets	Other	Total
Balances at January 1, 2019	6,183	170,341	2,006	11,455	189,985
Increase/(decrease) of deferred tax assets for the year	9,934	766	(343)	(2,280)	8,077
Translation differences and inflation adjustment	(211)	(6,825)	18	(208)	(7,226)
Balances at December 31, 2019	15,906	164,282	1,681	8,967	190,836
Balances at January 1, 2018	6,603	208,378	—	6,018	220,999
Adjustment on initial application of IAS 29	—	—	—	742	742
Adjusted balance at January 1, 2018	6,603	208,378	—	6,760	221,741
(Decrease)/increase of deferred tax assets for the year	(317)	11,938	2,616	7,145	21,382
Other movements	—	(3,527)	(531)	—	(4,058)
Translation differences and inflation adjustment	(103)	(46,448)	(79)	(2,450)	(49,080)
Balances at December 31, 2018	6,183	170,341	2,006	11,455	189,985

The recoverability analysis of deferred tax assets and liabilities is as follows:


	For the Year ended
	December 31,
	2019	2018
Deferred tax assets to be recovered within 12 months	344	817
Deferred tax assets to be recovered after 12 months	190,492	187,981
Deferred tax liabilities to be recovered within 12 months	(1,109)	190
Deferred tax liabilities to be recovered after 12 months	(275,367)	(306,677)

Unrecognized deferred income tax assets

The Group does not recognize deferred tax assets on tax loss carry forwards for which it is not probable to generate future taxable profits to utilize such tax losses.

At December 31, 2019 an amount of USD 59.9 (USD 31.7 million at December 31, 2018) has not been recognized within deferred tax assets because there is not sufficient evidence that there will be enough future taxable income where the losses are allocated. These tax losses carry forwards do not expire although there are certain deduction limits.

Deferred income tax assets and liabilities are offset when (1) there is a legally enforceable right to set-off current tax assets against current tax liabilities and (2) when the deferred income taxes relate to the same fiscal authority on either the same taxable entity or different taxable entities where there is an intention to settle the balances on a net basis. The following amounts, determined after appropriate set-off, are shown in the Consolidated Statement of Financial Position:


	2019	2018
Deferred tax assets	147,475	153,486
Deferred tax liabilities	(233,115)	(271,175)

Other receivables

12 Months Ended

Dec. 31, 2019

Other receivables

Other receivables

17 Other receivables


	At December 31,
	2019	2018
Non-Current
Tax credits	18,567	20,331
Trust funds (*)	90,093	107,411
Prepaid expenses	228	231
Other	11,066	5,220
	119,954	133,193
Current
Tax credits(**)	60,483	30,270
Guarantee deposit	8,658	5,992
Receivables from related parties (Note 27)	9,269	9,611
Prepaid expenses	4,453	6,073
Other(***)	18,813	14,585
	101,676	66,531

(*) Funds are held by a trust, on which the Company does not have the power to direct the relevant activities of the trustee company and is not exposed, or have rights, to variable returns, as such does not consolidate the trustee company.

(**) During 2019, AA2000 filed requests to the Argentine Federal Public Revenue Administration (“AFIP”) in order to obtain the return of tax credits of Value Added Tax (“VAT”) mainly for VAT generated by the purchase of fixed assets. The total amount requested from the AFIP for VAT tax credit returns was USD 18,316.

(***) Mainly includes receivable for the additional Municipal tax on passenger boarding fees of Toscana Aeroporti S.p.A. for a total amount of USD 8,934 as of December 31,2019 (USD 7,898 as of December 31,2018).

The fair value of financial assets within current other receivables approximates to its carrying amount. The fair value of financial assets within non-current receivables amounts to approximately USD 102.4 million at December 31, 2019 (USD 128.4 million as of December 31, 2018). The fair value of these financial assets was calculated using a discounted cash flow (Level 3).

Inventories

12 Months Ended

Dec. 31, 2019

Inventories

Inventories

18 Inventories


	At December 31,
	2019	2018
Supplies	3,288	2,907
Oil and byproducts	8,011	6,850
Others	3	12
	11,302	9,769

Trade receivables

12 Months Ended

Dec. 31, 2019

Trade receivables

Trade receivables

19 Trade receivables


	At December 31,
	2019	2018
Non-Current
Accounts receivable	3,431	3,524
Loss allowance (see Note 3A(iii))	(2,105)	(2,105)
	1,326	1,419
Current
Accounts receivable	153,264	137,831
Trade receivables from related parties (Note 27)	2,242	2,988
Loss allowance (see Note 3A(iii))	(50,629)	(23,922)
	104,877	116,897

Fair value of trade receivables approximate book value.

Other financial assets

12 Months Ended

Dec. 31, 2019

Other financial assets

Other financial assets

20 Other financial assets


	At December 31,
	2019	2018
Non-current
Other financial assets at fair value through profit or loss
Equity investments (*)	3,309	3,372
	3,309	3,372
Other financial assets at amortized cost
Related parties (Note 27)	2,494	2,339
	2,494	2,339
	5,803	5,711
Current
Other financial assets at fair value through profit or loss
Corporate Bonds	12,698	21,391
Treasury bills	—	11,872
Related parties (Note 27)	4,643	4,744
	17,341	38,007
Other financial assets at amortized cost
Related parties (Note 27)	9,930	13,569
Time Deposits	—	24,400
Treasury bills	56,483	4,946
Other	—	57
	66,413	42,972
	83,754	80,979

(*) As of December 31, 2019 and 2018 includes equity investments where the group holds a minor equity interest and does not exert significant influence, mainly TA’s purchase of an 8.16% stake in Firenze Parcheggi S.p.A., a company that manages public parking lots in Florence.

Fair value of other financial assets approximate book value.

Cash and cash equivalents

12 Months Ended

Dec. 31, 2019

Cash and cash equivalents [abstract]

Cash and cash equivalents

21 Cash and cash equivalents


	At December 31,
	2019	2018
Cash to be deposited	2,320	3,488
Cash at banks	116,413	181,972
Time deposits	35,502	31,879
Other cash equivalents	41,461	27,526
	195,696	244,865

The Group operates with investment grade - financial institutions.

For the purposes of the cash flow statement, cash and cash equivalents include the following:


	At December 31,
	2019	2018	2017
Cash and cash equivalents	195,696	244,865	221,601
	195,696	244,865	221,601

The cash flow statement does not include those transactions that have not represented cash inflows or outflows implied flow of funds.

Borrowings

12 Months Ended

Dec. 31, 2019

Borrowings

Borrowings

22 Borrowings


	At December 31,
	2019	2018
Non-current
Bank and financial borrowings (**)	472,226	405,944
Notes (*)	560,995	621,380
Other	—	427
	1,033,221	1,027,751
Current
Bank and financial borrowings (**)	103,056	40,063
Notes (*)	72,067	57,556
Other	—	1,288
	175,123	98,907
Total Borrowings	1,208,344	1,126,658

Changes in borrowings during the years are as follows:


	2019	2018
Balances at the beginning of the year	1,126,658	1,486,445
Adjustment on adoption of IFRS 16	(1,715)	—
Adjusted balances at the beginning of the period	1,124,943	1,486,445
Loans obtained	196,977	195,141
Loans paid	(90,457)	(517,253)
Interest paid	(78,832)	(70,637)
Accrued interest for the year	89,361	93,786
Translation differences and inflation adjustment	(33,648)	(60,824)
Balances at the end of the year	1,208,344	1,126,658

The maturity of borrowings is as follows:


	1 year or less	1 to 2 years	2 to 5 years	Over 5 years	Total
At December 31, 2019 (1)	247,209	237,298	547,257	617,208	1,648,972
At December 31, 2018 (1)	172,920	170,630	472,042	836,697	1,652,289

(1) The amounts disclosed in the table are undiscounted cash flows of principal and estimated interest. Variable interest rate cash flows have been estimated using variable interest rates applicable at the end of the reporting period.


	At December 31,
	2019	2018
Fair value of borrowings (2)	1,219,540	1,135,628
	1,219,540	1,135,628

(2) Valuation at quotation prices (not adjusted) in active markets for identical assets or liabilities Fair Value level 2 under IFRS 13 hierarchy. There are no financial instruments measured at fair value.

(*) Notes include the following:

-

In 2007 Puerta del Sur S.A. issued 7.75% secured guaranteed notes for USD 87 million, due 2021. The principal balance of the Puerta del Sur Notes, together with accrued interest, will be repaid in 22 total installments, with individual installments occurring on April 29 and October 29 of each year beginning in 2011 and ending in 2021. The main covenants on these bonds are limitations on liens and encumbrances and compliance with certain financial ratios. Puerta del Sur may be limited to declare, make or pay any dividends unless the debt coverage service ratio exceeds 1.7x and the indebtedness ratio is less than 3.0. Puerta del Sur Notes are secured by a trust to which Puerta del Sur has transferred the following sums: (a) the sum of funds which Puerta del Sur has or has rights to for services offered in administration, construction, and maintenance of Carrasco Airport; (b) the sum of funds received from the duty-free store in Carrasco Airport; (c) the sum of funds received as a result of the permitted operation of the cargo terminal in Carrasco Airport; and (d) the sum of funds Puerta del Sur has received or will have right to receive from the government or from a third party successor as a result of a management agreement, or as a consequence of the redemption, termination, mutual dissolution and/or resolution of the management agreement for whatever reason, this trust is of use only in case of non-compliance with the Notes obligations.

-

In 2015, ACI Airport Sudamérica S.A.U. issued 6.875% senior secured guaranteed notes, for USD 200 million due in 2032. The principal balance will be repaid in 34 installments May 29 and November 29 of each year, commencing on May 29, 2016 while accrued interest will be repaid commencing on November 29, 2015. The main covenants on these bonds are limitations on take additional indebtedness, make payments of dividends and other payments that are specifically restricted, selling assets as well as requiring compliance with certain financial ratios. The holders of these notes benefit from a guarantee and a security package including the pledge of the shares in Puerta del Sur S.A. and Cerealsur S.A., and certain accounts of Cerealsur and ACI Airport Sudamérica. As of December 31, 2019 and 2018 they were guaranteed with a stand by letter of credit of Corporación América S.A. with Bank of América. These notes are fully and unconditionally guaranteed by Cerealsur S.A.

-

In 2014 Corporación América Italia S.p.A. issued 6.25% secured notes for €50 million due 2019. These notes are secured by a pledge of the shares of Dicasa Spain SLU (pre-conversion) or Dicasa S.A.U. (post conversion), and the shares representing Corporación America Italia S.p.A. holding in Toscana Aeroporti S.p.A., a pledge of certain intercompany loan receivable and the economic first ranking pledge in respect of all the shares representing 100% of the share capital of Corporación América Italia S.p.A. held by Dicasa S.A.U. Main covenants on these bonds require compliance with certain financial ratios as well as restrictions on payment of dividends and limitations on certain lines of assets or increases in additional financial indebtedness. This secured notes were cancelled on January 2018.

-

On January 8, 2018, Corporación América Italia S.p.A. (“CAI”) issued € 60.0 million (USD 71.8 million) aggregate principal amount of 4.556% secured notes due 2024 (the “Italian Notes”). The proceeds of the Italian Notes were used to refinance and replace the 6.250% secured notes due 2019 issued by CAI in December 2014. Interest on the Italian Notes is payable annually in arrears on June 30 of each year. The Italian Notes will mature on December 31, 2024. The main covenants on these bonds are limitations on take additional indebtedness, make payments of dividends and other payments that are specifically restricted, selling assets as well as requiring compliance with certain financial ratios.

The Italian Notes are secured by an economic first ranking pledge in respect of all the shares representing 100% of the share capital of CAI, 100% of the share capital of Dicasa Spain S.A.U. and the shares representing CAI’s holding in Toscana Aeroporti S.p.A.

-

On February 6, 2017, AA2000 issued 6.875% senior secured notes for a nominal amount of USD 400 million due 2027. The principal will be amortized in 32 equal quarterly installments as from May 1, 2019. The aforementioned notes are secured by an assignment of fiduciary rights of certain revenue of AA2000. The main covenants of these bonds require compliance with certain financial ratios as well as restriction to incur in additional debt and limitations on the payments of dividends if any default or unmatured default has occurred.

(**) As of December 31, 2019 significant bank and financial borrowings include the following:

Outstanding

(In millions

Company

Lender

Currency

Maturity

Interest Rate

of USD)

Capitalization(2)

Inframerica

BNDES

R$

September 2032

Variable

TJLP(1) plus spread

8.6

Concessionaria do

BNDES

R$

June 2032

Variable

T.R. plus spread plus IPCA

2.1

Aeroporto Sao Goncalo

BNDES

R$

September 2032

Variable

T.R. plus spread plus IPCA

5.6

A

do Amarante S.A.

BNDES

R$

September 2022

Fixed

2.50%

1.5

BNDES

R$

July 2032

Variable

T.R. plus spread plus IPCA

2.6

Inframerica

BNDES

R$

December 2033

Variable

TJLP(1) plus spread

270.5

A

Concessionaria do

Bradesco

R$

July 2022

Variable

TJLP(1) plus spread

0.1

D

Aeroporto de Brasilia S.A

Votorantim

USD

June 2020

Variable

CDI plus spread

9.0

C

Terminal Aeroportuaria S.A

Banco Guayaquil SA

USD

December 2024

Variable

T.R.E.(3) plus spread

10.1

D

de Guayaquil S.A.

Banco Bolivariano CA

USD

November 2024

Variable

T.R.E.(3) plus spread

9.1

D

Santander Uruguay

USD

June 2020

Variable

4.25%

0.2

D

Terminal de Cargas de

Santander Uruguay

USD

April 2023

Fixed

4.40%

1.7

D

Uruguay S.A.

Santander Uruguay

USD

October 2024

Fixed

4.30%

2.0

D

MPS Servicio capital

Euro

June 2022

Variable

Euribor 6 month plus spread

5.2

B

Banco de Innovación de Infraestructuras y Desarrollo

Euro

September 2027

Variable

Euribor 6 month plus spread

26.0

D

BPM

Euro

October 2020

Fixed

0.13%

1.7

D

Toscana Aeroporti S.p.a.

Unicredit

Euro

September 2020

Fixed

0.15%

8.4

D

Unicredit

Euro

October 2020

Fixed

0.15%

1.1

D

BNL

Euro

November 2020

Fixed

0.15%

2.8

D

BNL

Euro

December 2020

Fixed

0.15%

2.8

D

CREDEM

Euro

October 2020

Fixed

0.60%

5.8

D

BPM

Euro

June 2022

Variable

Euribor 3 month plus spread

0.3

D

BPM

Euro

June 2023

Variable

Euribor 3 month plus spread

0.4

D

Armenia International

Credit Suisse AG

USD

December 2022

Variable

Libor 6 month plus spread

36.1

B

Airports C.J.S.C.

Euro

December 2022

Variable

Euribor 6 month plus spread

37.6

Aeropuerto de Neuquén S.A.

Banco Macro

USD

August 2021

Variable

Libor plus spread

2.8

A

Aeropuertos Argentina 2000 S.A.

Banco de la Provincia de Buenos Aires

USD

June 2023

Fixed

7%

2.6

D

Industrial and Commercial Bank of China (Argentina) S.A., Banco Galicia and Buenos Aires S.A.U. and Banco Santander Río S.A.

USD

August 2023

Fixed

9.75%

84.1

A

Citibank N.A.

USD

August 2023

Variable

Libor plus spread

34.5

A

Total

575.3

(**) As of December 31, 2018 significant bank and financial borrowings include the following:

Outstanding

(In millions

Company

Lender

Currency

Maturity

Interest Rate

of USD)

Capitalization(2)

Inframerica

BNDES

R$

September 2032

Variable

TJLP(1) plus spread

8.5

Concessionaria do

BNDES

R$

June 2032

Variable

T.R.plus spread plus IPCA

2.1

Aeroporto Sao Goncalo

BNDES

R$

September 2032

Variable

T.R. plus spread plus IPCA

5.4

A

do Amarante S.A.

BNDES

R$

September 2022

Fixed

2.50%

2.1

BNDES

R$

July 2032

Variable

T.R. plus spread plus IPCA

2.5

Inframerica

BNDES

R$

December 2033

Variable

TJLP(1) plus spread

278.5

A

Concessionaria do

Bradesco

R$

July 2022

Variable

TJLP(1) plus spread

0.2

D

Aeroporto de Brasilia S.A

Bradesco

R$

July 2022

Variable

Selic plus spread

0.1

D

Terminal Aeroportuaria

Banco Guayaquil SA

USD

October 2019

Variable

6.58%

1.2

D

de Guayaquil S.A.

Banco Guayaquil SA

USD

November 2019

Variable

7.45%

0.8

D

Banco Bolivariano CA

USD

November 2019

Variable

7.30%

2.8

D

Terminal de Cargas de

Santander Uruguay

USD

June 2020

Fixed

4.25%

0.7

D

Uruguay S.A.

Santander Uruguay

USD

April 2023

Fixed

4.40%

2.2

D

MPS Servicio capital

Euro

June 2022

Variable

Euribor 6 month plus spread

7.1

B

Banco de Innovación de Infraestructuras y Desarrollo

Euro

September 2027

Variable

Euribor 6 month plus spread

29.6

D

BPM

Euro

April 2019

Fixed

0.04%

2.3

D

Toscana Aeroporti S.p.a.

Unicredit

Euro

March 2019

Fixed

0.05%

5.7

D

BNL

Euro

July 2019

Variable

Euribor 3 month plus spread

2.9

D

BPM

Euro

June 2022

Variable

Euribor 3 month plus spread

0.4

D

BPM

Euro

June 2023

Variable

Euribor 3 month plus spread

0.5

D

Armenia International

Credit Suisse AG

USD

December 2022

Variable

Libor 6 month plus spread

44.6

B

Airports C.J.S.C.

Euro

December 2022

Variable

Euribor 6 month plus spread

45.8

Total

446.0

(1) TJLP - Taxa de Juros de Longo Prazo (Brazilian Long term interest rate)

IPCA: corresponds to the Brazilian Consumer Price index)

(2) A - Secured/guaranteed

B – Secured/unguaranteed

C – Unsecured/guaranteed

D - Unsecured/unguaranteed

R$ - Brazilian Reales

(3) T.R.E - Tasa Referencial Ecuador (Ecuadorian reference interest rate)

The Credit Facility Agreement between Inframerica Concessionária do Aeroporto de São Gonçalo do Amarante S.A and the Banco Nacional do Desenvolvimento Economico e Social (“BNDES”) pursuant to which BNDES provided a loan to Inframerica Concessionária do Aeroporto de São Gonçalo do Amarante S.A in November 2012, in an aggregate principal amount of R$ 329.3 million (USD 139.5 million) to finance the construction of the Natal Airport (issued in nine tranches with varying interest rates and maturity dates), is secured by the pledge of the shares of Inframerica Concessionária do Aeroporto de São Gonçalo do Amarante S.A, together with any dividends and distributions in connection therewith, as well as the fiduciary assignment of rights arising from the Natal Airport concession agreement and certain letters of guarantees issued by indirect shareholders and affiliates of Inframerica Concessionária do Aeroporto de São Gonçalo do Amarante S.A. for an amount of USD 6.1 million which was released during 2018. It also establishes a required pre-authorization by BNDES on payments of Inframerica Concessionária do Aeroporto de São Gonçalo do Amarante S.A. dividends if exceeding 25% of net profits.

Further, Inframerica Concessionária do Aeroporto de Brasilia also entered into credit facility arrangements with BNDES and Caixa Economica Federal (”CAIXA”) for an aggregate principal amount of R$ 841 million (USD 356.4 million) in February 2014, which are secured by the pledge of Inframerica Concessionária do Aeroporto de Brasilia and Inframerica Participaçoes S.A. shares, the fiduciary assignment of rights arising from the Brasilia airport concession agreement and letters of guarantee issued by indirect shareholders and affiliates of Inframerica Concessionária do Aeroporto de Brasilia. It also establishes under certain circumstances a required pre-authorization by BNDES and CAIXA on payments of Inframerica Concessionária do Aeroporto de Brasilia dividends if exceeding 25% of net profits and compliance of certain financial ratios.

In December 2017, ICAB and ICASGA entered into amendments and extension agreements with BNDES with respect to their loans.

On March 2018, ICASGA concluded its renegotiation with BNDES. The terms of the renegotiation include the early repayment of a large part of the debt and rescheduling of current maturities.

On March 14, 2018 BNDES has approved an amendment and extension of the loan agreements with ICAB that involves extending the final maturity and the interest-only payment terms of such loans for two years, and providing an interest capitalization period for 50% of the interest due for two years. In addition, such agreements increased the size of the credit facility commitments by R$ 300 million (USD 92.9 million).

In connection with such amendment and extension agreements, ACI Airports S.à r.l. and CAAP have agreed to not to create any encumbrances on their shares of Inframerica Participações S.A., and not to sell, acquire, merge or spin-off assets or undertake any other action that results or that may result in a change in the current corporate structure of Inframerica or any change of control in Inframerica, without the prior consent of BNDES. ACI Airports S.à r.l. has agreed not to undertake any change of control in CAAP without the prior consent of BNDES. In addition, ACI Airports S.à r.l. has agreed to maintain a minimum credit rating of at least B- (the “Minimum Rating”) or a stand-alone rating (without including the sovereign rating) of at least BB+. The amendment and extension agreements also require additional security equivalent to the amount of twenty-four months of debt service for at least a two-year period (in the form of a bank guaranty, letter of credit, guaranty insurance or other acceptable modalities of guarantee), if the Minimum Rating is not maintained for any annual testing period.

On March, 2018, ICAB repaid the outstanding amount of R$ 274.4 (USD 83 million) with CAIXA.

On December 14, 2017, ICAB entered into a banking letter of credit with Banco Citibank S.A. (the “Citibank Credit Agreement”) in the aggregate principal amount of R$ 48.0 million (USD 14.5 million). The loan under the Citibank Credit Agreement matures on March 14, 2018. Such loan was unsecured. The obligations under the Citibank Credit Agreement were absolutely and unconditionally guaranteed by ACI Airports S.à r.l.

On December 20, 2017, under the terms of the Banco Santander Bridge Loan Facility, ICAB issued a promissory note in the aggregate principal amount of R$ 300.0 million (USD 90.7 million), which matured on June 18, 2018. Loans under the Banco Santander Bridge Loan Facility were fully secured by (i) a cash deposit made by CAAP under a time deposit pledge agreement entered on December 19, 2017 between CAAP and Banco Santander, in the amount of R$ 300.0 million (USD 90.7 million). Such loans mature in 180 days as of the closing date thereunder; and (ii) a fiduciary assignment of ICAB’s account at Banco Santander where the funds from BNDES financings should be deposited. The Banco Santander Bridge Loan Facility was also guaranteed by Inframerica. The loans under the Banco Santander Bridge Loan Facility mature in 180 days.

On March 14, 2018, ICAB has repaid the credit facilities provided by Banco Santander Bridge and the Citibank for a total amount of R$ 348 million (approximately USD 106.6) with the proceeds of the loan given by the BNDES.

As a result of this operation, the guarantee deposit held by CAAP was released (approximately USD 92.9 million).

On December 19, 2017, ICAB entered into a short-term banking letter of credit with Banco Pine S.A. (the “Banco Pine Credit Agreement”) in the aggregate principal amount of R$ 32.0 million (USD 9.7 million). Obligations under the Banco Pine Credit Agreement were absolutely and unconditionally guaranteed by CAAP. The loan under the “Banco Pine Credit Agreement” matured on January 2018; at that date, ICAB made an amendment to the loan maturity from January to December 2018. On December 17, 2018, ICAB loan was cancelled.

On June 5, 2019, ICAB entered into a loan with Banco Votorantim S.A. - Bahamas Branch for an amount of USD 8.9 million due in June 2020. This loan is secured with a guarantee signed by Banco Votorantim S.A. Brazil with ICAB (“Contrato de Prestação de Garantia”). This guarantee agreement, dated June 14, 2019, is secured by a guarantee letter issued by CAAP for a total amount of USD 8.9 million or its equivalent in Brazilian Real which shall not be lower than R$ 36 million plus interest. Future payments of the loan are protected from the exposure to U.S. dollars exchange rate fluctuation with a cash flow swap derivative with Banco Votorantim S.A. from Brazil that denominates future payments in Brazilian Real for a total amount of R$ 36 million.

On December 15, 2015 Armenia International Airports C.J.S.C. entered into a senior secured dual-currency facility agreement with Credit Suisse AG (and other banks) for a principal amount up to USD 160 million, which is secured by the collateral assignment of all present and future rights arising from the Armenian Concession Agreement and other related agreement, a pledge over all present and future cash collateral bank accounts, a pledge over certain movable and immoveable assets related to the Zvartnots Airport and the pledge of Armenia International Airports C.J.S.C. shares.

According to the loan agreement Armenia International Airports C.J.S.C. has restrictions to distribution of dividends, has to maintain the following ratios at a certain level: debt to EBITDA, Debt service coverage and adjusted debt service coverage ratio. According to this agreement, the analysis of the accomplished of these ratios must be made as of June 30 and December 31.

As of December 31, 2019 Armenia International Airports C.J.S.C. pledged cash held in bank accounts for USD 40,287 (USD 23,524 at December 31, 2018) and all intangible assets and property and equipment for a total of USD 167,583 (USD 166,605 at December 31, 2018).

Toscana Aeroporti S.p.A, pursuant to the loan agreement with Banco de Innovación de Infraestructuras y Desarrollo/ MPS Servicio capital is required to comply with certain financial ratios. Cash and cash equivalents of the Consolidated Statement of Financial Position includes € 1 million, to secure the abovementioned loan.

On December, 2017 CAAP entered into the Julius Baer Credit Agreement, pursuant to which Julius Baer & Co. Ltd. provided a loan in the aggregate principal amount of USD 15 million. Loan under the Julius Baer Credit Agreement was secured by cash collateral provided by a company controlled by the Group of the Shareholder and mature 24 months from the closing date thereunder. This guaranteed was released on February 2018 when the loan was repaid.

On December 20, 2017, CAAP entered into the GS Credit Agreement, pursuant to which Goldman Sachs Bank USA provided a loan to the Company in the aggregate principal amount of USD 50.0 million.

On February 2018, CAAP fully repaid the Julius Baer Credit Agreement and the GS Credit Agreement, the cash collateral with Julius Baer was released when the loan was repaid.

Aeropuerto de Neuquén S.A. (“ANSA”) loan with Banco Macro is secured with a guarantee letter of Corporación América S.A. In addition, ANSA entered into an assignment of collection rights agreement in favour of Banco Macro.

On August 9, 2019, AA2000 entered into two credit facility agreements: (a) the “onshore” credit facility agreement for a principal amount of USD 85 million and (b) the “offshore” credit facility agreement for a principal amount of USD 35 million. The creditors were Industrial and Commercial Bank of China (Argentina) S.A., Banco Galicia and Buenos Aires S.A.U., Banco Santander Río S.A. and Citibank N.A. (jointly, the “Lenders”).

The term for the credit facility agreements shall be of thirty-six months as from the borrowing date. The principal amount under the credit facility agreements shall be repaid in nine quarterly equal and regular installments, the first one being payed as from 12 months of the borrowing date, and it shall bear interests: (i) regarding the onshore credit facility agreement, at a fixed annual nominal rate of 9.75%; (ii) regarding the offshore credit facility agreement, at a variable rate equivalent to (a) the LIBOR rate plus (b) an applicable interest rate of an annual nominal 5,500% plus (c) the applicable withholding tax.

To secure its obligations under the two credit facility agreements, pursuant to the Argentine Collateral Trust Agreement dated August 9, 2019 (under Argentine law), AA2000 has transferred and assigned to the collateral trustee, acting on behalf of the Trust, for the benefit of the Lenders, acting as the beneficiaries, all: (a) rights, title and interest in, to and under each payment of the cargo airport charges payable by the user of such services in connection with all proceeds derived from export and import services carried out by Terminal de Cargas Argentina (a business unit of AA2000); and (b) any residual amount that AA2000 could be entitled to receive pursuant to article 11.4 of the collateral trust agreement dated January 17, 2017, entered into AA2000 and Citibank, in respect of the rights to receive payment in the event of a termination, expropriation or redemption of the concession agreement entered by and between the National Government and AA2000 on February 9, 1998 and approved by Decree No. 163/1998; including the right to receive and withhold all the payments pursuant to them and any other produced by them, assigned in trust to secure the Existing Notes issued by AA2000.

As of December 31, 2019 and 2018, the Group was in compliance with all of its borrowing covenants.

Other liabilities

12 Months Ended

Dec. 31, 2019

Other liabilities

Other liabilities

23 Other liabilities


	At December 31,
	2019	2018
Non-current
Concession fee payable (*)	777,093	791,474
Advances from customers	21,437	24,763
Provisions for legal claims (****)	5,319	7,966
Provision for maintenance costs (**)	20,034	21,685
Other taxes payable	2,548	4,430
Employee benefit obligation (***)	8,079	8,038
Salary payable	488	496
Other liabilities with related parties (Note 27)	1,726	1,785
Other payables	11,686	10,959
	848,410	871,596
Current
Concession fee payable (*)	120,578	116,480
Other taxes payable	22,956	24,411
Salary payable	37,976	39,565
Other liabilities with related parties (Note 27)	5,812	926
Advances from customers	4,848	6,030
Provision for maintenance cost (**)	8,887	7,412
Expenses provisions	1,934	2,030
Provisions for legal claims (****)	1,159	1,717
Other payables	25,972	26,877
	230,122	225,448

Maturity of the other liabilities is as follows:


	1 year or less	1 - 2 years	2 - 5 years	Over 5 years	Total
At December 31, 2019	230,181	90,917	275,982	1,867,441	2,464,521
At December 31, 2018	224,468	87,901	268,503	2,091,094	2,671,966

The fair value of financial liabilities within current and non-current other liabilities approximates to its carrying amount.

(*) The most significant amount include in concession fee payable are generated by the concession agreement between The Brazilian National Civil Aviation Agency – ANAC and Inframerica Concessionária do Aeroporto de Brasilia S.A. and Inframerica Concessionária do Aeroporto de São Gonçalo do Amarante S.A.

The Brazilian concession agreement establishes the payment of a fixed and variable concession fee.

a)Fixed concession fee

The Brasilia Airport concession agreement established a fixed concession fee of R$ 4,501,132 (approximately USD 1,161,732), payable in 25 equal annual installments since inception of the concession period. The concession fee is adjusted for inflation annually based on the changes in the Brazilian IPCA. The Natal Airport concession agreement established an annual fixed concession fee of R$ 6,800 (approximately USD 1,755), payable as from the 37th month of the inception of the concession, and adjusted periodically by the Selic rate.

The Company initially recognized the present value of fixed concession fee against a concession asset in intangible assets. The liability is presented as current and non-current concession fee payable within other liabilities.

The Company estimates this fixed concession fee to be divided in two parts:

(a)

Right of use if the airport operates at the existing operating capacity at the beginning of the concession, and

(b)

the second portion relates to the Company estimation of the value of the right of use after the infrastructure works that increase capacity of the airport.

Changes in the liability related to the increase capacity of the airport are accounted for against the “Concession asset”. Changes in the liabilities due to passage of time and inflation adjustment are recognized against profit or loss of the period.

b)Variable concession fee

The concession agreement for the Brasilia Airport requires payment of an annual fee of 2% of aeronautical and commercial revenues with a cap annually established by the regulatory authority in Brazil (ANAC). After that limit, concession fee is calculated at 4.5%.

Changes in the year of the Concession fee payable is as follows:


	2019	2018
Balances at the beginning of the year	907,954	971,043
Concession fee payable due to concession extension	4,359	—
Financial result	88,488	86,331
Concession fees	146,884	146,649
Payments	(208,310)	(146,277)
Payments in advance	(3,595)	—
Others	—	(2,652)
Translation differences and inflation adjustment	(38,109)	(147,140)
Balances at the end of the year	897,671	907,954

(**) Changes in the year of the Provision for maintenance costs is as follows:


	2019	2018
Balances at the beginning of the year	29,097	31,703
Accrual of the year	3,134	2,947
Use of the provision	(2,750)	(2,804)
Provision reversal	—	(1,377)
Translation differences and inflation adjustment	(560)	(1,372)
Balances at the end of the year	28,921	29,097

(***) TAGSA and Toscana have post-employment benefits which are defined benefit obligation. The amount of termination benefit has been calculated using the “Projected Unit Credit Method”, making actuarial valuations at the end of the period.

The assumptions used for the purposes of valuation of Toscana Aeroporti long term benefits at December 31, 2019 are:

- Annual discount rate: 0.77% (1.6% in 2018)

- Annual inflation rate: 1.0% (1.5% in 2018)

- Annual employee termination benefit increase rate: 2.25% (2.63% in 2018)

The iBoxx Eurozone Corporate AA 10+ index has been selected as the discount rate to be used, as the term of 10 or more years is comparable to the average remaining period of service of the personnel subject to the long term benefit.

The sensibility in relation with the provision of Toscana is as follows:


Assumption	Annual discount rate				Annual rate of inflation				Annual turnover rate
Variation rates	0.5	%	(0.5)	%	0.25	%	(0.25)	%	2.5	%	(2.5)	%
Provision for salary payable	6,207		6,895		6,637		6,441		6,409		6,596

The assumptions used for the valuation of TAGSA at December 31, 2019 are:

- Annual discount rate: 4.21% (4.25% in 2018)

- Annual turnover rate: 10.22% (10.85% in 2018)

- Annual employee termination benefit (in years): 7.50 (7.25 in 2018)

- Annual employee mortality and disability rate: TM IESS 2002 (TM IESS 2002 in 2018) (1)

- Annual employee future wage increase: 2.00% (1.78% in 2018)

(1)Mortality Table “Instituto Ecuatoriano de Seguridad Social”

The sensibility in relation with the prevision of TAGSA is as follows:


					Annual employee future
Assumption	Annual discount rate				wage increase				Annual turnover rate
Variation rates	0.5	%	(0.5)	%	0.5	%	(0.5)	%	5	%	(5)	%
Provision for salary payable	1,479		1,671		1,673		1,476		1,539		1,606

Changes of the provision in the year is as follows:


	2019	2018
Balances at the beginning of the year	8,038	9,068
Actuarial gain/loss (in other comprehensive income)	227	(504)
Interest for services	136	160
Service Cost	304	256
Amounts paid in the year	(495)	(613)
Translation differences and inflation adjustment	(131)	(329)
At the end of the year	8,079	8,038

The amounts shown in the Statement of Comprehensive Income for USD (208) in 2019 (USD 277 in 2018) correspond to the actuarial (loss)/income of USD (257) (USD 344 in 2018), net of taxes of USD 49 (USD 67 in 2018).

(****) Changes in the year of the provision for legal claims is as follows:


	2019	2018
Balances at the beginning of the year	9,683	8,925
Accrual of the year	1,153	4,283
Use of the provision	(3,485)	(1,638)
Translation differences and inflation adjustment	(873)	(1,887)
Balances at the end of the year	6,478	9,683

Trade payables

12 Months Ended

Dec. 31, 2019

Trade payables

Trade payables

24 Trade payables


	At December 31,
	2019	2018
Non-current
Trade payables with related parties (Note 27)	—	15
Trade payable with suppliers	798	1,493
	798	1,508
Current
Trade payables with suppliers	145,740	110,375
Trade payables with related parties (Note 27)	3,017	4,266
	148,757	114,641

Fair value of trade payables does not materially differ from book value.

Equity

12 Months Ended

Dec. 31, 2019

Equity

Equity

25 Equity

a) Share capital

The movements of share capital for the year is as follows:


	At December 31,
	2019	2018	2017
At the beginning of the period	160,022	1,500,000	20
Conversion (Note 1)	—	—	1,499,980
Reverse stock split (Note 1)	—	(1,351,883)	—
Initial Public Offering (Note 1)	—	11,905	—
At the end of the year	160,022	160,022	1,500,000

b) Free distributable reserves

The disclosure of movements at each year are as follows:


	At December 31,
	2019	2018	2017
Conversion (Note 1)	—	—	(1,499,980)
Cash contributions	—	—	6,600
Refund of cash contributions	—	—	(28,893)
	—	—	(1,522,273)

c) Share premium

As of December 31, 2019 and 2018 includes the differences between the nominal value of USD 1 per common share and the initial public offering price of USD 17 deducted from the underwriting discounts and commissions and other expenses directly related to the offering.


		At December 31,
		2018
Share premium		190,476
Underwriting discounts and expenses		(9,990)
Net share premium		180,486

d) Other reserves

The movements of Other Reserves of the owners of the Company is as follows:


	2019	2018	2017
At the beginning of the year	(1,324,731)	(1,344,008)	(1,344,022)
Change in participations (*)	(60)	19,112	—
Remeasurement of defined benefit obligations net for income tax	(96)	165	14
	(1,324,887)	(1,324,731)	(1,344,008)

(*) This consists mainly in change in participations in Italian subsidiaries, see Note 25 f).

e) Other comprehensive income

The movements of the reserve of other comprehensive income for the year of the owners of the Company is as follows:


					Transfer from
		Remeasurement	Share of other		shareholders
	Currency	of defined	comprehensive	Income	equity – currency
	translation	benefit	income from	Tax	translation
	adjustments	obligations (*)	associates	effect (*)	differences	Total

Balances at January 1, 2019	(401,444)	330	(40,761)	(99)	63,402	(378,572)
Other comprehensive (loss)/income for the year	(13,333)	(132)	35	36	—	(13,394)
For the year ended December 31, 2019	(414,777)	198	(40,726)	(63)	63,402	(391,966)

Balances at January 1, 2018	(241,091)	123	(39,611)	(57)	63,402	(217,234)
Other comprehensive (loss)/income for the year	(160,353)	207	(1,150)	(42)	—	(161,338)
For the year ended December 31, 2018	(401,444)	330	(40,761)	(99)	63,402	(378,572)

Balances at January 1, 2017	(212,080)	106	(40,043)	(54)	63,402	(188,669)
Other comprehensive (loss)/income for the year	(29,011)	17	432	(3)	—	(28,565)
For the year ended December 31, 2017	(241,091)	123	(39,611)	(57)	63,402	(217,234)

(*) Income tax relating to OCI amounts to Remeasurement of defined benefit obligations. The movement was recognized as other comprehensive income of other reserves.

f) Non – controlling interest

The movements of the non- controlling interest for the year is as follows:


	2019	2018	2017
At the beginning of the year	454,453	335,359	354,174
Adjustment on initial application of IAS 29	—	196,408	—
Adjustment on adoption of IFRS 9 (net of tax)	—	542	—
Adjusted balance at January 1,	454,453	532,309	354,174
Shareholder contributions (*)	27,506	43,703	—
(Loss)/income for the year	(14,919)	(17,724)	3,400
Other comprehensive (loss) / income
Currency translation	(11,514)	(87,359)	3,426
Remeasurement of defined benefit obligations	(125)	137	9
Reserve for income tax	13	(25)	(5)
	(11,626)	(87,247)	3,430
Changes in non-controlling interest
Changes in the participations –acquisitions () (*)	10	(32,442)	197
Changes in the participations – sales (****)	—	29,611	—
Dividends approved	(20,699)	(13,757)	(25,842)
	(20,689)	(16,588)	(25,645)
Non-controlling interest at the end of the year	434,725	454,453	335,359

(*) Corresponds to contributions made by the non-controlling interest in Inframerica Concessionária do Aeroporto de Brasilia S.A.

(**) On February 19, 2018, CAI purchased an additional 4.568% (850,235 shares) of the share capital of Toscana Aeroporti S.p.A from Fondazione Pisa, for a purchase price of €15.80 per share, paying a total amount of € 13,434 (approximately USD 16,513). As a result of the acquisition, CAI holds approximately 55.698% of Toscana Aeroporti’s share capital.

(***) On June 25, 2018, CAI purchased an additional 6.58% (1,225,275 shares) of the share capital of Toscana Aeroporti S.p.A from Fondazione Cassa di Risparmio di Firenze, for a purchase price of €16.50 per share, paying a total amount of € 20,200 (approximately USD 24,218). The contract also provides an earn out for a maximum amount of € 3.4 million which, as of December 31, 2019, € 53 were recognized by CAI. As a result of the acquisition, CAI holds approximately 62.28% of Toscana Aeroporti’s share capital.

(****) On July 25, 2018, CAAP entered into a share purchase agreement whereby CAAP sold 25% of its wholly owned subsidiary Corporación America Italia S.p.A. (“CAI”) to Investment Corporation of Dubai (“ICD”), the principal investment arm of the Government of Dubai. On September 12, 2018, the aforementioned transaction was completed, DICASA sold 25% of the share capital of CAI to ICD, for a seller price of € 1,504.3 per share, receiving a total amount of € 48,890 (approximately USD 56,638). As a result of the sale, DICASA holds 75% of CAI’s share capital.

Contingencies, commitments and restrictions on the distribution of profits

12 Months Ended

Dec. 31, 2019

Contingencies, commitments and restrictions on the distribution of profits

Contingencies, commitments and restrictions on the distribution of profits

26 Contingencies, commitments and restrictions on the distribution of profits

a. Contingencies

CAAP and its subsidiaries are, from time to time, subject to various claims, lawsuits and other legal proceedings, including customer claims, in which third parties are seeking payment for alleged damages, reimbursement for losses or indemnity. Some of these claims, lawsuits and other legal proceedings are subject to substantial uncertainties. Accordingly, the potential liability with respect to such claims, lawsuits and other legal proceedings cannot be estimated with certainty. Management, with the assistance of legal counsel, periodically reviews the status of each significant matter and assesses potential financial exposure. If a potential loss from a claim, lawsuit or proceeding is considered probable and the amount can be reasonably estimated, a provision is recorded. Accruals for loss contingencies reflect a reasonable estimate of the losses to be incurred based on information available to management as of the date of preparation of the financial statements, and take into consideration the Group’s litigation and settlement strategies.

The Company believes that the aggregate provisions recorded for losses in these financial statements, are adequate based upon currently available information.

Argentina legal proceedings

AA2000 legal proceedings

During 2013 and 2014 the Argentine Federal Administration of Public Income initiated three different tax assessments proceedings against AA2000.

Two of the tax assessments proceedings were initiated against AA2000 with respect to income tax deductions from services rendered by third parties. On November 30, 2015, AA2000 agreed to pay the amounts claimed for these deductions through a facility payment regime set forth by General Resolution No. 3806. Pursuant to this regime, AA2000 had to pay ARS 18.4 million in 36 consecutive, monthly, installments. As of December 31, 2019 AA2000 has paid all of the monthly installments due to date under this facility.

The third and most significant claim was initiated by the Argentine Federal Administration of Public Income against AA2000 and its consolidated subsidiaries for income taxes and income tax on undocumented exemptions. The Argentine Federal Administration of Public Income considered that certain management and administrative services provided by Corporación América Sudamericana S.A. (“CAS”), one of its shareholders,) were not actually rendered to AA2000. On August 3, 2016, AA2000 appealed the ruling of the assessment proceeding to the Argentine National Tax Court.

In addition, in 2013, a separate criminal proceeding was initiated by a third party against two former directors of AA2000 based on the same facts as this third assessment proceeding mentioned above. The Court of first instance dismissed the claim and the prosecutor appealed the ruling. The Court of Appeals reversed the prior ruling based on the lack of evidence obtained in the original proceeding and ordered the Court of first instance to expand the fraud investigation and to determine the possible connection with the assessment proceeding mentioned above. After further investigation, the Court of first instance ratified the dismissal of AA2000, which the prosecutor subsequently appealed. The Court of Appeals once again dismissed the case against AA2000 based on the connection of both proceedings and ordered the consolidation of the fraud and the tax investigations. Consequently, the Court of first instance on economic and criminal matters No. 11 is now the intervening court for both proceedings.

Given that the facts which originated both claims were the same, both proceedings continued as a unified criminal matter on income taxes and income tax on undocumented exemptions.

Although management and legal advisors have strong arguments to prove that the management and administrative services were in fact rendered to AA2000 by CAS, on February 21, 2017 AA2000 complied with the extraordinary regime of regularization of tax obligations provided by Law No. 27,260 published in the Argentine Official Gazette on July 22, 2016. The total amount that AA2000 must pay for such extraordinary regime is ARS 166.3 million in 60 consecutive, monthly payments as from March, 2017. AA2000 has paid all of the monthly installments due to date.

On August 25, 2017, the prosecutor challenged the request made by AA2000 to suspend the criminal proceeding, arguing that although AA2000 complied with the extraordinary regime for the services rendered by CAS, it failed to include under this extraordinary regime the services rendered by third parties. Legal advisors and management believe that once all the installments under the extraordinary regime are fully paid, the action to prosecute tax claims based on these facts will be fully extinguished.

On December 27, 2018, the Court ordered: to (a) override the defendants’ current cause related to the alleged tax payment evasion of the Profits for Undocumented Outputs tax corresponding to AA2000’s 2006 and 2007 annual fiscal years and the 2008 Income Tax, with the scope provided for by articles 54 of Law No. 27,260 and 336 paragraph 1 of the CPPN; (b) suspend the criminal action initiated for payment evasion of the Income Tax for Undocumented Exits corresponding AA2000’s 2009 annual fiscal year, with the scope provided by art. 54 of law No. 27,260.

This decision was appealed by the Prosecutor Office. The Chamber of Appeals will intervene to decide whether or not to confirm the decision of the Court. If confirmed, the criminal case will be suspended until the payment of the quotas as committed by AA2000 is completed.

Pursuant to the Final Memorandum of Agreement entered into with the Argentine Government, dated April 3, 2007, AA2000 is required to assess and remediate environmental damage at their airports in Argentina.

In August 2005, a civil action was brought by Asociación de Superficiarios de la Patagonia, a non-governmental organization, against Shell Oil Company for alleged environmental damages caused by an oil spill at Ezeiza Airport and, in September 2006, AA2000 was called to intervene as a third party at the request of the plaintiff. The lawsuit alleges that AA2000 is jointly liable with Shell due to the fact that AA2000 manages the real property at which the environmental damages occurred. AA2000 has asserted that Shell is solely responsible for any damages.

In August 2011, Asociación de Superficiarios de la Patagonia brought a civil action against AA2000 in an Argentine administrative federal court in the City of Buenos Aires (Justicia Federal en lo Contencioso Administrativo de la Capital Federal), under the General Environmental Law No. 25,675, requesting compensation for environmental damage caused in all of the airports under the AA2000 Concession Agreement.

The administrative federal court appointed the Argentine Center of Engineers (Centro Argentino de Ingenieros) to conduct research studies in connection with the required remediation works. In connection with this proceeding, Asociación de Superficiarios de la Patagonia obtained an injunction for compensation for environmental damages. In order to guarantee the injunction, an insurance policy was filed for an amount equals to ARS 97.4 million.

The aforementioned do not constitute a contingency as soon as their execution is ordered, the disbursements must be considered included in the contractual investment plan.

Aeropuertos del Neuquén S.A. (“NQN”) legal proceedings

On October 26, 2018 a lawsuit was served to NQN by a supplier who claims damages stemming from the alleged breach by NQN of an agreement for the financing of the construction of a hangar at the Neuquén Airport. The total amount of the claim is USD 3.5 million. Management and legal advisors understand that the claim is controversial since the non-compliance attributed to NQN responds to the fact that the supplier did not comply first with its own obligation under the agreement. On December 4, 2018, the Court ordered a seizure on the company’s accounts for the amount of USD 577. The seizure has been replaced by an insurance policy. On April 15, 2019, the first instance Court denied the preliminary defense of lack of jurisdiction raised by NQN and on September 24 ,2019 the Court of Appeals confirmed such ruling that rejected ANSA´ said ruling. On December 3, 2019, the proceeding moved into an evidence stage.

Administrative Proceedings – lawsuit against Organismo Regulador del Sistema Nacional de Aeropuertos (“ORSNA”)

On July 25, 2019, AA2000 held a shareholders meeting where it was unanimously approved to consider the outstanding amount of preferred shares and the payment of dividends on them, based on the value calculated as adjusted by inflation instead of the nominal value, as the Argentine National Government had proposed. The dividend approved payable on additional preferred shares was for an amount of ARS 118 million based on the adjusted by inflation amount of ARS 5,914 million.

The legal representative of the shareholder Corporación América S.A. (“CASA”) accepted that valuation criteria in order to avoid a corporate conflict and requested the Board of Directors to file an administrative claim with ORSNA requesting that said increase in the number of preferred shares to be considered for purposes of determining the economic-financial equation of the AA2000 Concession Agreement and to properly adjust the Financial Projections of Income and Expenses approved for the years 2016 and 2017, through Resolutions No 75/19, 92/19 and 93/19. In the event that the increased number of preferred shared, as adjusted for inflation, was not considered by ORSNA for the purpose of determining the remunerated basis of the economic-financial equation, CASA reserved its right to reconsider the criterion of the adjusted value for both the payment of interests and the future, as well as to take proceedings before Court in order to claim for its rights and for damage compensation. Such reservation of rights was made by CASA in accordance with the review procedure of the Financial Projection of Income and Expenses set forth in the AA2000 Concession Agreement. The claim was filed before the National Court of First Instance No. 9 for Administrative Disputes.

CASA understands that the referred resolutions, as well as the “criterion of adjusted value” for the distribution of dividends in preferred shares, contain errors that prevent the balance of the financial economic equation, and therefore, they were challenged before the National Court of First Instance No. 9 for Administrative Disputes.

Conflict with Aerolíneas Argentinas (“ARSA”)

This air operator is currently AA2000’s main customer. As of today, it records an outstanding debt with AA2000. The singularity of ARSA lies in its status as state-owned company, since it is owned by the Argentinian State, which is in turn the grantor of AA2000 Concession Agreement.

Claims have been made before ORSNA as well as formal presentations before the Ministry of Transportation, requesting mechanisms to resolve the situation though different alternatives such as payment plans, compensation and agreements.

From a commercial perspective, preliminary ruling meetings were conducted without positive results. Considering this situation and in accordance with IFRS 15, as from October 1, 2019, only revenue from passenger fees related to ARSA is being recognized.

Brazil legal proceedings

Administrative Proceedings against the Brazilian ANAC

Inframerica Concessionária do Aeroporto de Brasilia S.A. (“ICAB”) filed claims before the Brazilian ANAC on December 29, 2015, in the total amount of R$ 758.6 million, requesting the economic re-equilibrium of ICAB’s concession agreement based on (among other things) additional construction works required to complete the terminals and the runway that were not provided for in the concession agreement, and the negative impact of the issuance of new rules and regulations by the Brazilian Ministry of Health, which reduced ICAB’s revenues in connection with the use of the cargo terminal.

In addition, on June 29, 2017, ICAB filed new claims with the Brazilian ANAC in the amount of R$ 196.8 million requesting the economic re-equilibrium of ICAB’s concession agreement based on (among other things) the loss of revenues as a result of modifications to the rules and regulation affecting the air traffic system in Congonhas airport.

As of December 31, 2019 claims in the amount of R$ 941.5 million were denied by the Brazilian ANAC, and ICAB is evaluating whether to initiate an arbitration or judicial proceeding regarding the denied claims. Regarding the claim concerning the changes made in cargo tariffs, in August 2018, the ANAC’s Collegiate agreed to the request and ICAB was granted the amount of R$ 9.5 million to be deducted from future fixed grants. The remaining claims are under review by the Brazilian ANAC.

On November 17, 2015, ICAB was notified by ANAC about the end of the administrative proceeding regarding a penalty for the breach of the provision 10.1 c/c – 10.8 D of Annex 2 of Concession Agreement for not submitting the Quality Services Plan (“PQS”) within the provided deadline. According to ANAC’s criteria, the PQS has to be submitted on an annual basis, before each June 24 and 30 days before the annual readjustment of tariffs. For the year 2013, this criterion was not followed by ICAB since the Company understood that the deadline was October 23. ANAC applied a fine to ICAB of R$ 10.6 million. On March 9, 2016, ICAB brought this discussion to the judicial appreciation. On May 8, 2019, the court denied the request for cancellation of the fine, ICAB appealed this decision on May 23. On July 9, 2019, the appeals court granted ICAB the suspension of said fine until the matter is fully analyzed by it.

On December 29, 2015, Inframerica Concessionária do Aeroporto de São Gonçalo do Amarante S.A. (“ICASGA”) filed claims in the total amount of R$ 1.0 billion before the Brazilian ANAC requesting the economic re-equilibrium of ICASGA’s concession agreement based on inconsistencies in the parameters related to the viability study prepared by the government (Estudo de Viabilidade Técnica, Econômica e Ambiental “EVTEA”) under the tender documents, inconsistencies related to the control tower and additional capital expenditures required to complete the airport that were not provided for in the concession agreement.

As of December 31, 2019, all ICASGA claims, filed on December 29, 2015, totaling the amount of R$ 1.0 billion were denied by the Brazilian ANAC. ICASGA is evaluating whether to initiate an arbitration or judicial proceeding regarding the economic re equilibrium.

On June 25, 2019, ICASGA filed a new independent claim in the total amount of R$ 12.1 million before the Brazilian ANAC requesting the economic re-equilibrium of ICASGA’s concession agreement based on extraordinaire expenditures on the renovation and correction of constructive mistakes of the airport landing strip (runway).

Civil Proceedings

Inframerica and its subsidiaries are defendants in various civil lawsuits, which individually and in the aggregate are not material. In addition, an ordinary action against the Brazilian ANAC was filed to suspend the payment of the annual granting fees for 2016 and 2017 related to Inframerica Concessionária do Aeroporto de Brasilia S.A.´s concession (outorga anual), in the amount of R$245.7 million and R$253.0 million respectively. However, as the process of rescheduling the annual fees payable for the remainder of the concession was agreed, on December 6, 2017, ICAB requested a waiver to terminate the proceeding. This waiver request was granted, but the proceeding still stands in order to conclude an existing discussion regarding legal fees.

Inframerica Participações S.A.

Inframerica Participações S.A. identified three payments totaling R$ 858 made during 2014 by ICAB, when Infravix Participações S.A. was still an indirect shareholder of the Inframerica, to individuals or entities for which Inframerica was unable to clearly identify a proper purpose.

On September 14, 2019, Receita Federal imposed Inframerica to pay the amount of R$ 1.3 million in late taxes, claiming that these alleged payments were allegedly without cause or did not identify a beneficiary. ICAB is contesting the fine through an administrative procedure. The outcome of this procedure is still uncertain.

If these payments are ultimately found to have been improper, additional fines and sanctions may be applied, as well as other penalties.

Tax Proceedings

On November 1, 2017, ICASGA started a lawsuit that discusses the collection of Property and Urban Territorial Tax (IPTU) by the City of São Gonçalo do Amarante; On January 18, 2018, the Judge granted a provisional decision, suspending the tax collection. On August 27, 2019, a favorable sentence was handed down to the company, dismissing the collection as unfounded. The Municipality appealed on September 20, 2019, and obtained a provisional decision, which allows it to collect the tax around R$ 17 million until the case is finally judged. On December 11, 2019, ICASGA appealed against that provisional decision, and is still waiting for it to be reconsidered.

TAGSA legal proceedings

In June 2005, under the Free Zones Law, TAGSA was granted the concession for the administration and operation of a free zone for a 20‑year period, in order to develop commercial and service activities, construction of new terminals, improvement of existing facilities and operation of the Guayaquil airport. Duty-free areas are entitled to certain tax benefits, including a 100% exemption from income tax, as well as VAT, among others.

In 2010, a new Production, Commercial and Investment Code was enacted in Ecuador, which repealed the law that created tax free zones but include a grandfather clause, which determined that concessions granted under previous regulations were not affected by these new dispositions.

However, the tax authority reviewed 2010, 2012 and 2013 fiscal years and did not recognize the tax benefits granted by the Free Zones Law, and assessed additional income tax charges for the fiscal years 2010, 2012, 2013 of USD 1.9 million, interests and penalties included, and USD 1.4 million and USD 2.2 million respectively, interests and penalties not included.

TAGSA paid the amount owed regarding 2010 and 2012 fiscal years.

The Ecuadorian Tax authority (“SRI”) has determined an additional tax charge for an amount of USD 2.4 million, USD 2.2 million and USD 3.3 million in relation with fiscal years 2014, 2015 and 2016 respectively, without interest or surcharges.

TAGSA obtained a favorable judgment that repealed the differences established by the Servicios de Rentas del Ecuador (“SRI”), in regards to the income tax determination of 2013 and 2014. The SRI has filed an extraordinary action of protection.

On September 12, 2018, TAGSA obtained a favorable judgment that overrides the differences established by the Tax authorities, in regards to the income tax determination of 2013 and 2014. The Tax authorities has filed an appeal for cassation.

On September 19, 2018, TAGSA filed a claim for income tax in 2015 and 2016. The Board of Directors of TAGSA approved the issuance of a Bank guarantee with local financial institution for an amount of USD 0.8 million, which represents a 10% of the amount involved, due to a requirement in order to submit the proceeding.

TAGSA obtained a favorable judgment that repealed the differences established by the SRI and on February 2019 the Court resolved to release the bank guarantee.

Peruvian Proceedings

Unilateral Termination

On July 13, 2017, the Government of Peru notified the unilateral decision to rescind the concession agreement for the Nuevo Aeropuerto International de Chinchero.

On July 18, 2017, Kuntur Wasi formally notified the Peruvian Government of its disagreement with the unilateral resolution because: (i) Kuntur Wasi had fulfilled all of its contractual commitments, (ii) there was no valid justification to unilaterally terminate the Kuntur Wasi Concession Agreement and (iii) if the unilateral termination were exercised, the Peruvian Government would be obliged to compensate all the damages suffered by Kuntur Wasi. Likewise, Kuntur Wasi notified the Peruvian Government of its decision to begin the direct treatment procedure to resolve the controversy in accordance with the provisions of section 16.5 of the Concession Agreement.

On September 11, 2017, Corporación América S.A. sent written notice to the Peruvian Government notifying the Peruvian Government of its non-compliance with certain Peruvian Government obligations under the 1996 Bilateral Investment Agreement between Peru and Argentina for the promotion and protection of investments (“BIT”) caused by the mentioned unilateral resolution, which (i) constitutes a dispute between CASA (as a shareholder of Kuntur Wasi and an investor in Peru) and the Peruvian Government under the BIT, and (ii) has caused damages to CASA.

On January 18, 2018, the Peruvian Government unilaterally terminated this treatment procedure without reaching an agreement. Pursuant to the Concession Agreement, negotiations should continue through an arbitration procedure.

After the 15‑day term granted by Kuntur Wasi, the State did not comply with its obligations and, therefore, Kuntur Wasi declared the termination of the Concession Agreement, as communicated to the Peruvian State on February 7, 2018.

Pursuant to the Concession Agreement, the next step should be to continue through an arbitration procedure.

On June 21, 2018, the arbitration procedure request was submitted to the competent authority CIADI, who answered the request assuming jurisdiction in Peru. On same date, Corporación América S.A. also submitted to the CIADI a request for the arbitration procedure under the BIT framework. Both procedures before CIADI shall be carried out in a single docket.

The Arbitral Court was already appointed and the CIADI issued: (a) final procedural timeframe, and (b) first resolution on the procedure to be initiated (definitions on language, presentations, translations, experts and witness hearings, among others).

As of the date of this consolidated financial statements: (a) Kuntur Wasi and Corporación América filed their Memorial (complaint). Such documentation was sent to the counterpart and their response was received on March 14, 2020. Both parties have agreed to carry out the process under rules of confidentiality.

State and Money Laundering Complaint

On February 24, 2017, the Peruvian Prosecutor initiated an investigation under Peruvian Law against certain management members of Kuntur Wasi, for alleged conspiracy with governmental authorities to obtain the concession for the operation of the new Cusco International Airport in Chinchero. On October 10, 2017, upon expiration of the statutory term for the completion of the initial investigation the Peruvian prosecutor filed an amendment to the complaint, which is now based on alleged instances of crimes against the state and money laundering by Kuntur Wasi under the Organized Crime Law.

As set forth by the Peruvian prosecutor in this amended complaint, the investigation will now center around Kuntur Wasi not having funding available at the time of the award of the concession to complete the bid project, the provision of certain loans and payments made to Kuntur Wasi from Cedicor S.A., Aeropuertos Andinos del Perú S.A., Converse Bank and Liska Investment Ltd., and payments made to Proyecta y Construye S.A. from Kuntur Wasi in connection with engineering services for the construction of the Cusco Airport.

The Superior Court of Justice of Lima, Peru, confirming the judgments of the First Instance Court, resolved on January 29, 2018 and January 30, 2018, that:

(a)

until the prosecutor properly asserts a claim of money laundering against the Kuntur Wasi’s Peruvian management team, the allegation of criminal activity has not been properly established. The Prosecutor should eventually remake the accusation and properly support his request; and

(b)

the request for the lifting of bank secrecy of Messrs. Carlos Vargas Loret de Mola, Antonio Guzman Barone, and Jose Balta (KW Peruvian management), as well as of Kuntur Wasi, was rejected considering that the Prosecutor request has lack of proof. As a result, the Prosecutor’s Office should have no elements to continue with this money laundering case.

However, the Court decided to lift the bank secrecy of Messrs. Carlos Vargas Loret de Mola, Antonio Guzman Barone, Jose Balta and Kuntur Wasi.

On December, 2018 the Argentinian office of Economic Criminality and Money Laundering (Procelac) initiated a procedure against former directors of Corporación América S.A., based in the fact that this company, as shareholder of Kuntur Wasi, would have intervened as co-author in acts of transnational bribery, offering sums of money or other compensations to Peruvian officials, in order to obtain a substantial modification in the original terms of Chinchero’s concession. The defendants answered the claim with strong arguments challenging Procelac allegations.

On August 2019, the Prosecutor in Perú formalized the complaint against some officers of Kuntur Wasi and some government officials for collusion in the signing of the addendum.

However, on February 12, 2020 the local court (Primera Fiscalía Superior Especializada en delitos de corrupción de funcionarios del Distrito Judicial de Lima) confirmed the process is definitely closed and the involved parties were released from any further action in this regard.

Management and legal advisors, in any event, will continue vigorously defending against any of these allegations, considering that such allegations are without merit.

b. Commitments


				Current
		Number of	Concession	Concession
Country	Concession	Airports	Start Date	End Date	Extension Details
Argentina	AA2000	351	1998	2028	10 years
	NQN	1	2001	2021	5 years
	BBL	1	2008	2033	10 years
Italy	TA (SAT)	1	2006 (2014)	2046
	TA (ADF)	1	2003 (2014)	2043
Brazil	ICASGA	1	2012	2040	5 years
	ICAB	1	2012	2037	5 years
Uruguay	Puerta del Sur	1	2003	2033
	CAISA	1	1993 (2008) (2019)	2033
Ecuador	TAGSA	1	2004	2029
	ECOGAL	1	2011	2026
Armenia	AIA	2	2002	2032	Option to renew every 5 years
Peru	AAP	5	2011	2036	Extendable to 2071
Total		52

1.Includes Termas de Rio Hondo Airport, which is operated by AA2000 but is pending government approval to be included in the AA2000 concession.

Argentine Concession Agreement

In February 1998 AA2000 was awarded the concession agreement for the use, operation and management of 33 airports in Argentina (the “Group A” airports). The concession agreement was subsequently amended and supplemented by the memorandum of agreement it entered into with the Argentine National Government on April 3, 2007 (the “Memorandum of Agreement”). References to the concession agreement amended and supplemented by the Memorandum of Agreement are carried out as the “Argentine Concession Agreement”.

Likewise, and in order to be able to continue with the policies related to the expansion of the aviation market, the National State of Argentina issued Decree No. 1092/17 on December 22, 2017 by which it incorporated the Palomar Airport, located in the Province of Buenos 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 and Resolution 894/2018 of the Ministry of Transportation.

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 Argentine Concession Agreement was granted 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 Argentine National Airports Regulator (Organismo Regulador del Sistema Nacional de Aeropuertos, the “ORSNA”) to extend the term of the Concession for the additional 10‑year period ending February 13, 2038. The Group could not provide any assurance that the Argentine National Government will grant its request or on what conditions.

In addition, under the terms of the Argentine Concession Agreement, the Argentine National Government will have the right to buyout the concession at any time as from February 13, 2018. If such right is exercised, the Argentine National Government is required to indemnify AA2000.

Under the terms of the Argentine Concession Agreement, AA2000 is required to, on a monthly basis, allocate an amount equal to 15% of revenues (in Argentine pesos) to the Specific Allocation of Revenue, as follows:

‑11.25% of total revenue to a trust for the development of the Argentine National Airport System to fund capital expenditures for the Argentine National Airport System. Of such funds, a 30% will be previously deducted for deposit in an account to the order of the ANSES. The ORSNA will determine which construction projects within the Argentine National Airport System shall be implemented with such funds, whether at airports operated by AA2000 or not. AA2000 may file proposals with the ORSNA which, together with the ORSNA’s proposals, shall be communicated to the Secretary of Transportation, which shall decide the application of the trust funds.

- 1.25% of total revenue to a fund to study, control and regulate the Argentine Concession, which shall be administered and managed by the ORSNA.

- 2.5% of total revenue to a trust for investment commitments for the “Group A” airports of the Argentine National Airport System. (Those operated by AA2000).

AA2000 may cancel the obligations to provide amounts of money to the trust through the assignment of credits whose cause and/or title are the result of the provision of aeronautical and/or airport services performed within the framework of the concession, with the previous intervention of The Secretary of Transportation and the authorization of the ORSNA.

The Argentine Concession Agreement requires AA2000 to formulate a master plan for each of its airports. Each master plan establishes the investment commitments to be received by each airport during the term of the Argentine Concession Agreement, taking into account the expected demand of aeronautical and commercial services.

AA2000 is required to make capital expenditures in accordance with the investment plan commitment included in the Argentine Concession Agreement. Total investment commitments between January 2006 and 2028 are ARS 2,158 million (calculated in December 2005 values). As of December 31, 2019, AA2000 has invested ARS 2,912.7 million (calculated in December 2005 values) under the investment plan.

In order to guarantee performance of the works under the investment plan, AA2000 is required to enter into a guarantee with a value equal to 50% of the investment planned for the year before March 31 of each year. AA2000 granted a surety bond in the amount of ARS 1,465 million (approximately USD 24.5 million) to comply with the investment plan guarantee required by the Argentine Concession Agreement.

AA2000 sets up a guarantee for concession contract fulfilment for the total amount is for ARS 1,123.4 million (approximately USD 18.76 million ) which is renewed on an annual basis.

In addition, AA2000 is required to maintain a civil liability insurance policy Covering personal and property damages, loss or injury in an amount of at least ARS 300 million (approximately USD 5 million). AA2000 has taken out insurance policy for an amount of USD 500 million covering liabilities that may arise under civil law in connection with the management and development of work in the airports.

As a result of the renegotiation of the concession contract, in 2006 AA2000 has delivered to the Argentine Government 496,161,413 preferred shares which are convertible into common shares of AA2000. Such preferred shares have a nominal value of ARS 1 each and have no voting rights. Such shares are redeemable by AA2000 at any time at nominal value plus accrued interest. Beginning in 2020, the Argentine Government has the option to convert all of the preferred shares into common shares of AA2000, up to a maximum amount of 12.5% per year of the total amount of the initial preferred shares issued to the Argentine Government, to the extent AA2000 has not previously redeemed such annual percentage for the respective year. The preferred shares accrue an annual dividend of 2% of the nominal value of the preferred shares, which shall be paid in kind with delivery of additional preferred shares and will be accumulated in the event AA2000 does not have sufficient retained earnings during a given fiscal period. In addition, the preferred shares have a priority over common shares in the event of liquidation. There are 747,529,409 preferred shares outstanding at December 31, 2019 (629,252,640 at December 31, 2018).

In addition to the airports operated under the AA2000 Concession Agreement, the Group also operates the Neuquén Airport, the Bahía Blanca Airport and the Termas de Rio Hondo Airport.

In 2001, the Government of the Province of Neuquén together with the ORSNA awarded the Group the concession agreement to operate the Neuquén Airport for an initial term of 20 years, which is set to expire in 2021. Likewise, in 2008 the Municipality of Bahia Blanca together with the ORSNA awarded the Group the concession to operate the Bahía Blanca Airport for an initial term of 26 years, which is set to expire on 2033. Both concession agreements provide the possibility of extension upon approval.

The Group operates the Termas de Rio Hondo Airport in Argentina, pursuant to an agreement between AA2000 and the Province of Santiago del Estero, but there is no written concession agreement with the Argentine Government. As of the date of these consolidated financial statements, there are certain regulatory approvals pending to include the Rio Hondo Airport within the AA2000 Concession Agreement. The Neuquén Airport, the Bahía Blanca Airport and the Termas de Rio Hondo Airport are not material to the Group´s business.

Uruguayan Concession Agreements

Carrasco International Airport

Puerta del Sur S.A. (“PDS”) signed with the Uruguayan Government a concession agreement which grants until the year 2033 the management, exploitation, construction, maintenance and operation of Carrasco International Airport “Gral. Cesáreo L. Berisso”.

Obligations Assumed by PDS as Concessionaire

- Use the assets, facilities, material and human resources for associated with the provision of aeronautical and commercial services under the concession agreement exclusively for that purpose.

- Make investments in construction, new works, repair, upgrade, preservation and maintenance, as described in the technical attachments to the concession agreement, according to the investment schedule. In addition, perform the necessary investments in response to the growth in the national and international traffic of passengers and cargo.

- Take on all necessary measures so that the Carrasco International Airport is at least under the following categories: to be included in the following categories of the International Air Transport Association (“I.A.T.A”): (a) Category 1 Instrumental; (b) Category 4E regarding the state of the landing strip; (c) Category 9 regarding fire protection; and (d) at least in Category C of I.A.T.A).

- Pay the annual concession fee under the terms and conditions of the concession agreement.

- Maintain the guarantees and insurance policies valid and current. Keeping and maintaining the facilities received under concession in perfect operating conditions and in full operations (24 hours a day, seven days a week) and replacing them as deemed necessary in the event of destruction or obsolescence and updating them to reflect the latest technological advances.

The Integrated Management Contract also establishes:

- The contract term shall be 20 years as from November 21, 2003, and may be extended for a further 10-year term, at PDS’s request and subject to the approval of the Uruguayan government.

- An amendment to the contract dated September 2, 2014, were the option to extend was exercised by PDS and the concession was extended until November 20, 2033.

- The maximum prices to be charged by PDS at the Carrasco airport for landing, aircraft, parking, cargo and aircraft services. The fee payable to the National Airport Infrastructure and Civil Aviation Authority in Uruguay ("DINACIA"), as well as the frequency of those payments.

- The amount of the guarantees to be provided in favor of the Uruguayan Ministry of Defense for:

- the obligations of the purchaser (the Company) to hire an airport operator, investments and payment of capital; and

- the obligations of PDS for performance under the concession agreement.

- PDS is required to engage and maintain an airport operator who, in turn, is in charge of providing advice to PDS in the following service areas; airplanes, passengers, mailing and cargo.

Fees

Pursuant to the concession agreement, Puerta del Sur is required to pay to the Uruguayan government an annual fee, which will be the higher of: a) USD 4,555; or b) the amount resulting from multiplying the work units (per passenger or per each 100 kilograms of cargo or mailing) by USD 0.00419, plus applicable cargo fees.

Guarantees

Based on the above, PDS is required to provide the following guarantees: a guarantee securing the completion of the construction work of the new terminal (a USD 1.5 million guarantee is in place for Group 1 and 2 works) and a performance guarantee for USD 6 million, that will be returned to PDS six months after the expiration of the Carrasco Airport Concession Agreement.

Insurance

PDS must contract civil liability insurance against damages, losses or injuries that could be caused to persons or property in relation to the performance under the concession agreement, with itself and the Uruguayan Ministry of Defense as beneficiaries, to cover all risks until termination or expiration of the concession. The minimum coverage amount is USD 250 million.

Punta del Este Airport

Consorcio Aeropuertos Internacionales S.A. signed with the Uruguayan Government a concession agreement which grants until the year 2019 for the reconstruction, maintenance and partial operation of the services of International Airport C/C Carlos A. Curbelo (Laguna del Sauce) – Punta del Este.

On March 28, 2019, Resolution 1351/2019 was issued by the Ministry of Defense, which approved the amendment of the Punta del Este Concession Agreement.

As of June 28, 2019, the concession agreement among Consorcio Aeropuertos Internacionales S.A. (“CAISA”), which operates and maintains the Punta del Este Airport, and the Ministry of Defense has been amended extending its term to March 31, 2033.

Terms of the Punta del Este Concession Agreement extension include a minimum annual concession fee of USD 500 thousand and incremental capital expenditures of approximately USD 35 million, including the construction of a new general aviation terminal building, remodeling of boarding areas and a new VIP lounge, together with implementation of technology and innovation to improve the passenger experience.

Based on the above, CAISA was required to provide the following guarantees: a guarantee securing the completion of the construction works and a guarantee for concession contract fulfilment for USD 1.6 million and USD 4.2 million respectively.

Ecuadorian Concession Agreement

Terminal Aeroportuaria de Guayaquil S.A. (“TAGSA”) has a concession agreement which grants until July 27, 2024 the development, operation and maintenance of Guayaquil airport, José Joaquin de Olmedo (“JJO”).

As of July 6, 2018, Terminal Aeroportuaria de Guayaquil S.A. (TAGSA), has amended the concession agreement (the “Guayaquil Concession Agreement”) among TAGSA, Autoridad Aeroportuaria de Guayaquil and the Municipality of Guayaquil, with an extension of the term of the Guayaquil Concession Agreement for a five-year period from 2024 to 2029.

Obligations Assumed by TAGSA as Concessionaire

The main obligations under the concession are:

- Design and construction of the works and investment specified in the Concession Agreement during the initial, intermediate and final phases, and expansion of the national terminal.

- Operate and manage the JJO from the date of commencement of operations.

- Establish regulations for the normal development of JJO.

- Preventive and corrective maintenance of the JJO, including (i) all necessary repairs of the facilities, equipment and other concession assets built, acquired or incorporated by the TAGSA or pre-existing in the JJO and (ii) maintaining the facilities, equipment and other assets to prevent deterioration.- Taking all the necessary measures to protect the environment of the Guayaquil Airport and avoid or limit pollution disturbances to individuals and properties and other harmful results to the environment due to the rendering of aeronautic services and non-aeronautic services.

- Payment of the annual concession amount

- Provision of other non-aeronautic services, which include common commercial services such as food, beverages, counters, check-in desks at the terminal, etc., and facultative commercial services such as VIP lounges, souvenirs sale, cargo, etc. Rates for such services are fixed directly by TAGSA.

Fees

TAGSA is required to pay the annual concession amount to a trust, which amounts to 50.25% of gross revenues from tariffs and charges, and certain other commercial revenues from the operation of JJO to the Trust Fund for Development of the New Airport of Guayaquil, plus a fixed amount of USD 1.5 million per year for administrative services.

The Guayaquil Concession Agreement amendment includes an increase in the annual concession fee, effective as of July 1, 2018, from 50.25% to 55.25% paid over aggregate gross revenues received from tariffs and charges and certain other commercial revenues (e.g., fuel, parking spaces and use of convention center). Terms of the Guayaquil Concession Agreement amendment also sets forth an increase of USD 524.6 thousand in the administrative service fee, paid semiannually commencing February 2019.

Guarantees

TAGSA is required to maintain a performance bond as security for the timely fulfillment of the obligations under the concession agreement of USD 3 million for the rest of the concession. In addition, TAGSA is required to maintain a performance bond for the payments to the Trust for the development of the new Guayaquil Airport that corresponds to an amount of 20% of the amount that is required to be paid by TAGSA to the Trust minus the amount of the performance bond of Guayaquil Concession Agreement. The current amount of the performance bond is USD 6.4 million.

ECOGAL is required to deliver a performance bond of USD 700,000 to the DGAC, which should be in place during the term of the Galapagos Concession Agreement. The bond was issued by Seguros Oriente S.A., an insurance company in Ecuador, and is in force until April 13, 2020. This bond will be renewed annually.

Brazil Concession Agreement

Inframerica Concessionária do Aeroporto de Brasília S.A. and Inframerica Concessionária do Aeroporto de São Gonçalo do Amarante S.A. signed with the Brazilian regulatory authority (the Brazilian ANAC) a concession agreement which grants the construction, operation and maintenance of the airports of Brasilia, for a period of 25 years from 2012, and the airport of Natal (São Gonçalo do Amarante) for a period of 28 years, since 2012. They can be extended for another five years if necessary to reestablish economic equilibrium.

Obligations Assumed by Inframerica Concessionária do Aeroporto de Brasília S.A. and Inframerica Concessionária do Aeroporto de São Gonçalo do Amarante S.A. as Concessionaires

- providing adequate service to passengers and users of the airport, as defined in Article 6 of Federal Law 8.987/95 (the Brazilian Concessions Law), using all means and resources available, including, but not limited to, making any necessary investments to expand airport operations to sustain the required service levels, based on the existing demand and the provisions set forth in the Airport Operation Plan;

- implementing services and management programs, and offering training programs to its employees for purposes of improving services and the convenience of users in order to meet the requirements set forth in the applicable Airport Operation Plan;

- providing proper service, defined under the Airport Operation Plan as regular, continuous, efficient, safe, up to date, broad and courteous services at a fair price, to the general public and airport customers;

- performing all services, controls and activities related to the concession agreement, with due care and diligence, employing the best available practices in every task performed;

- presenting ANAC with an Infrastructure Management Plan and Service Quality Plan every five years for the entire term of each of the Brazilian Concession Agreements:

- submitting to the approval of the Brazilian ANAC any proposal for the implementation of service improvements and new technologies, as provided for under the concession agreement and applicable regulations; and

- developing and implementing plans for dealing with emergencies at the airports, and maintaining for such purposes the human resources guidelines and other training materials required by industry regulations and the applicable Airport Operation Plan.

Fees

Grant payment obligations arising from these concession agreements are described in Note 23.

Guarantees

Under the Brazilian Concession Agreements, the Brazilian concessionaires are required to provide certain performance bonds in the amounts and for the events listed below:


	Amount of the	Amount of the
	Performance Bond	Performance Bond
Event	(in R$)	(in USD)
Natal Concession Agreement
Phase I of the Natal Concession Agreement	65 million	16.1 million
Phase II of the Natal Concession Agreement (from the formal commencement of Phase II until the end of the contract)	6.5 million	1.6 million
Current amount of Phase II	13.6 million	3.4 million
Investment Trigger of the Natal Concession Agreement	10% of the amount of planned investments

Brasilia Concession Agreement
During Phase I-B of the Brasilia Concession Agreement	266.7 million	66.1 million
After completion of Phase I-B of the Brasilia Concession Agreement or at the termination of the contract	133.3 million	33.1 million
Current amount of Phase II (*)	202.3 million	50.2 million
Investment Trigger of the Brasilia Concession Agreement	10% of the amount of planned investments
Upon termination of the Brasilia Concession Agreement, for a period of 24 months after the termination of the agreement.	19.1 million	4.7 million

(*) Insurance granted by a Guarantee letter of CAAP signed with Zurich Brazil on December 14, 2018 for R$ 224 million.

The AAP Concession Agreement

AAP is required to provide a guarantee with respect to compliance of all of its obligations under the AAP Concession Agreement, including the payment of any penalties and the levels of quality and service of the works. The AAP Concession Agreement performance bond does not cover the obligations guaranteed by the AAP Construction performance bond specified below. The AAP Concession Agreement performance bond required amounts is USD 4.5 million on the date of the execution of the AAP Concession Agreement, and must be renewed annually until two years after the termination of the AAP Concession Agreement.

AAP is required to provide a guarantee of the execution of the works, including the payment of any penalties. The AAP Construction performance bond will guarantee (i) during the initial construction period, a total of 10% of the sum of the amounts established in the work execution program, that must renewed annually during the duration of this stage and the following three months, and (ii) during the remaining period, a total of 20% of the sum of the amounts established in the Annual Investment Plan for the Remaining Period Works, and must be renewed annually until 12 months after the complete execution of the works. As of December 31, 2019, the amount guaranteed is approximately USD 1 million.

On April 12, 2019, CAAP issued guarantees in favour of AAP for concession contract fulfilment and works to be performed with two standby letters of credit of CAAP with Citibank for a total amount of USD 2.25 and USD 0.5 respectively.

Armenian Concession Agreement

Armenia International Airports CJSC has been awarded a concession agreement which grants until year 2032 the exclusive rights of exploitation, administration, maintenance and operation of Yerevan airport, Zvartnots. At the end of the concession period, the Company has the option to indefinitely extend the term of the concession agreement for additional periods of five years. The Armenian Concession Agreement does not require Armenia International Airports C.J.S.C to pay any fee or other consideration of any kind whatsoever for the rights granted to it under the Armenian Concession Agreement.

Within the scope of the Armenian Concession Agreement the Company planned to build a new terminal in three phases. The first two phases are completed, which mainly included the construction of a new terminal for arrivals and departures.

Obligations Assumed by the Concession Manager

Under the terms of the Armenian Concession Agreement, the Concession Manager shall:

- undertake and warrant the normal and permanent rendering of aviation services;

- manage and operate the airports according to internationally accepted airport standards;

- comply with the Master Plan;

- obtain, at its own cost and risk, adequate financing and management resources to modernize the physical infrastructure of the airport, to ensure compliance with applicable regulatory standards and to improve the quality of their management;

- provide the Armenian Government with the ground spaces required for the performance of customs, migration, defense, security, safety, phyto-zoo sanitary and bromatological controls and public health activities, as long as they are and remain activities directly performed by Armenian Government agencies and bodies. If the Armenian Government decides to delegate any of such activities to the private sector, the Concession Manager shall have a right of first refusal for the performance of such activities, which right must be exercised within a period of 30 days as from the announcement of any bid by a third party;

- provide the Armenian Government with an annual report (and such other reports as the Armenian Government may reasonably request) on the development of the management, exploitation and operation of the airport, which will include data regarding traffic, revenues and investments;

- manage, operate and exploit the airport activities, directly or through contracts with third parties, subject to the limitations set forth in the Armenian Concession Agreement;

- collect from all of the users (including the airlines and all other public or private persons performing activities or exercising any authority in the airport) the corresponding airport charges and the fees which the Concession Manager may establish from time to time; and

- construct, maintain and/or operate, on its own account or through any third parties, any hangars, fuel storage plants or aircraft supply plants, customs warehouses and/or any other warehouses or premises related to the handling of air cargoes or the aeronautical operation in general.

Every five years during the term of the concession, the Company is required to submit a Master Plan to the Government of the Republic of Armenia, which describes the works to be executed in that five-year period, including the corresponding preliminary estimates and also sets forth the guidelines for the works and operations related to improvement and maintenance of the Airport during the remaining part of the term, as well as the description of actual works. The Master Plan will be updated every five years and extended to cover the 30‑year term of the Armenian Concession Agreement.

During the next five years, AIA expects to incur USD 83.9 million in capital expenditures in Zvartnots Airport and Shirak Airport in accordance with the master plan to be approved by the Armenian Government as presented by AIA’s management. Some of these investments are conditioned upon reaching certain passenger level thresholds.

Italy Concession Agreement

Toscana Aeroporti S.p.A. (“TA”) has the concession of the airports of Pisa and Florence until 2043 and 2046, respectively.

The concession for Pisa Airport (“Pisa Concession”) was approved on December 7, 2006, with the Inter-Ministerial Decree issued by the Ministry of Transportation, the Ministry of the Economy and the Ministry of Defense. The Concession Agreement will expire on December 7, 2046.

The Florence Concession was approved on March 11, 2003, with the Inter-Ministerial Decree issued by the Ministry of Infrastructure and Transport and the Ministry of the Economy and Finance.

In order to meet the urgent need to implement the relevant legal framework, the abovementioned Inter-Ministerial Decree provided the extension of the duration of the concession to 40 years. The Concession Agreement will expire on February 10, 2043.

Obligations Assumed by TA as Concessionaire

Under the terms of the Pisa and Florence Concession Agreement, TA is responsible for developing, managing, exploiting, operating and maintaining Pisa Airport, which includes, inter alia, the performance of the following obligations and activities:

- paying the annual concession fee;

- adopting all appropriate measures in favor of the neighboring territorial communities and their security;

- organizing and managing the airport business, ensuring the optimal use of available resources for the purpose of providing an adequate level of services and activities, to be carried out in compliance with the principles of security, efficiency, cost effectiveness and environmental protection;

- providing its services under conditions of continuity and regularity, in compliance with the impartiality principle and in accordance with the applicable non-discrimination rules;

- obtaining prior authorization from ENAC to appoint sub concessionaires to carry out airport activities and to give prior written communication to ENAC of the sub concession of other activities (e.g., commercial activities), in any case ensuring that the relative third party sub concessionaires take out an insurance policy to cover the risks related to their respective activities;

- providing all of the necessary support for the relevant public administrations to carry out their emergency and health services within the context of the airport business and management;

- adopting all necessary measures to ensure the provision of the fire-fighting service;

- ensuring the carrying out of airport security control services;

- complying with the relevant obligations provided under the applicable framework and periodically communicating data on the quality of offered services to ENAC;

- preparing and presenting to ENAC a report on the implementation status of the operations program and related investment plan; and

- guaranteeing the suitability of the standards of offered services.

Fees

As consideration for both airport concessions granted by ENAC, TA is required to pay annual fees to be determined pursuant to Law No. 662/1996, which states that the relevant fees shall be the subject of the joint determination of the Ministry of Finance and the Ministry of Infrastructure and Transport.

The fees are established by Inter-managerial Decree (decreto interdirigenziale) dated June 30, 2003, which provides the adoption of a work load unit criteria, where each unit corresponds to one passenger or 100 kg of goods or post.

Guarantees

Suretyships provided to third parties on behalf of TA (€ 10.8 million as of December 31, 2019 and € 10.1 as of December 31, 2018) mainly refer to performance bonds with ENAC (Italian regulatory authority) as beneficiary, in order to guarantee full and exact fulfillment of the obligations established with the two 40‑year Conventions signed; of the Municipalities of Pisa and Florence to ensure compliance with municipal regulations in the execution of works for the expansion of the airports infrastructure by TA and other items.

Insurance

Under the Pisa and Florence Concession Agreement, TA shall procure an insurance policy, for an amount to be determined in agreement with ENAC, in order to cover a series of risks related to the assets used either directly or indirectly in the airport management business (e.g., fires, aircraft crashes, damages due to transported goods, machinery or natural events).

Under the terms of the Italian Concession Agreements, TA is required to present a long-term master plan for each individual airport. The master plan projections (including traffic, operating expenses, investment commitments, etc.) are used by ENAC to determine airport tariffs, and is revised every four years. Once approved by ENAC, the investment commitments in the master plan become binding obligations under the terms of the respective Concession.

On November 3, 2015, we received the technical approval by ENAC of our 2014‑2029 master plan for Florence Airport, and on December 28, 2017, the Ministry of Environment, after conducting an environmental impact assessment (Valutazione di Impatto Ambientale), approved such master plan. The decree was signed on December 28, 2017. The urban planning assessment procedure is currently underway. On October 24, 2017, ENAC approved and signed 2015‑2028 master plan for Pisa Airport.

Toscana Aeroporti S.p.A. (“TA”) expansion plan

Pisa Airport

On January 26, 2019, TA presented the expansion plan for the Pisa Airport terminal and the related flight infrastructures included in the 2018-2028 Master Plan, i.e., the program of works regarding the whole infrastructure system within the Pisa Airport, including the secondary runway and the aprons, as well as the project for creating an aircraft maintenance hub.

Florence Airport

On February 6, 2019, a favorable opinion was obtained regarding the compliance of the works performed in connection with the urban planning. Upon this opinion, the administrative procedure (Conference of Services) related to the Master Plan 2014-2029 of the Florence Airport, which calls for the construction of a new 2,400-meter runway and a new terminal, was closed. Pursuant to the regulations governing this administrative procedure, as well as ENAC’s regulations concerning the environmental and urban compatibility procedures relating to airport development plans, the Italian Ministry of Infrastructure and Transport (“MIT”) will then issue the formal closure of the administrative procedure. Once this administrative procedure is closed, ENAC will have to issue its formal approval of the development plan concerning the Florence Airport.

On April 16, 2019, the decree ratifying the successful completion of the 2014-2029 Master Plan procedure for Florence Airport was signed by the MIT. The decree marks the conclusion of the authorization procedure for the project, which had begun in 2015, following the favourable Environmental Impact Assessment (Valutazione di Impatto Ambientale - “VIA”) awarded on December 28, 2017, and the end of the Conference of Services on February 6, 2019.

On May 27, 2019, TA has been notified by the Regional Administrative Court (“TAR”) of the Region of Tuscany that it has granted the petitions lodged by the committees and the municipalities located in the "Piana di Castello" area, near Florence, overturning Decree-Law relating to the approval of the VIA for the Florence Master Plan, thus interrupting the procedures required to advance on the construction works, despite the favorable conclusion of the Service Conference last February. This judgement seeks to overturn the approval of the VIA, that was based on the assessment given by the national ministerial commission of experts regarding the suitability of the technical documentation to demonstrate the lack of negative impacts on the environment.

In protection of the legitimate interests of the Company, its shareholders and the city of Florence, TA has instructed its legal counsel to immediately lodge an appeal before the Council of State with a motion for a stay of the judgement.

On June 14, 2019, the MIT initiated a procedure for the adoption of a stay of the directorial decree ratifying the conclusion of the Service Conference relating to the Florence Airport followed as a matter of course on the recent judgement by the TAR of Tuscany quashing the VIA decree.

As of December 31, 2019, a judgement is being awaited from the Council of State, with which TA has lodged an appeal together with other institutional entities on July 25, 2019 for the resolution of the dispute.

See judgement update in Note 30.

Preliminary agreement for the purchase of the “Castello” area

On June 1, 2018, Toscana Aeroporti S.p.A. entered in a preliminary agreement to purchase from Nuove Iniziative Toscane Srl (“NIT”, a real estate company controlled by Unipol Group) a plot of land of approximately 123 hectares located in what is known as the “Piana di Castello” area, in the northwestern part of the Municipality of Florence. The price has been set at € 75 million (approximately USD 87.4 million), in addition to tax at the legal rate.

The preliminary contract signed by the parties is subject to the following conditions precedent:

1. Final approval of the Florence Airport Master Plan following the conclusion of the Service Conference for the award of Urban Development Compliance;

2. Adoption of the Castello Executive Urban Development Plan, according to the guidelines set in December 2017 by the Municipal Council of the Municipality of Florence, which indicates the planned use of the various areas and the urban development standards to be observed for each area.

The preliminary agreement will be valid for 18 months, with the possibility to extend for an additional six months.

The preliminary contract signed determined a payment by Toscana Aeroporti S.p.A. of an amount of € 3.7 million (approximately USD 4.5 million) classified as a confirmation deposit with no property passage from NIT to Toscana Aeroporti S.p.A. In case the above-mentioned conditions fail, the preliminary contract will be no valid anymore and the amount of the confirmation deposit will be immediately reimbursed to Toscana Aeroporti S.p.A.

c. Restrictions to the distribution of profits and payment of dividends

As of December 31, 2019, 2018 and 2017, equity as defined under Luxembourg laws and regulations consisted of:


	At December 31,	At December 31,	At December 31,
	2019	2018	2017
Share capital	160,022	160,022	1,500,000
Share Premium	180,486	180,486	—
Legal reserve	176	176	2
Free distributable reserves	385,055	385,055	385,055
Non-distributable reserves	1,351,883	1,351,883	—
Retained earnings	(78,497)	(72,231)	31,206
Total equity in accordance with Luxembourg law	1,999,125	2,005,391	1,916,263

At least 5% of the Company’s net income per year, as calculated in accordance with Luxembourg law and regulations, must be allocated to the creation of a legal reserve equivalent to 10% of the Company’s share capital. Dividends may not be paid out of the legal reserve.

The Company may pay dividends to the extent, among other conditions, that it has distributable retained earnings calculated in accordance with Luxembourg laws and regulations.

Related party balances and transactions

12 Months Ended

Dec. 31, 2019

Related party balances and transactions

27 Related party balances and transactions

Corporación América Airports S.A. is controlled by ACI Airports S.à r.l., which is controlled by ACI Holding S.à r.l., which is controlled by Corporación América International S.à r.l. (previously denominated America Corporation International S.à r.l.), Luxembourg’s companies.

Corporación América International S.à r.l. is controlled by Liska Investments Corporation, a company incorporated under the laws of the British Virgin Islands.

Liska Investments Corporation is controlled by Southern Cone Foundation (CAAP’s ultimate parent company), a foundation created under the laws of Liechtenstein, having its corporate domicile in Vaduz. The foundation’s purpose is to manage its assets through the decisions adopted by its independent board of directors. The potential beneficiaries of this foundation are members of the Eurnekian family and religious, charitable and educational institutions.

Interests in subsidiaries are set out in Note 2.B.

Transactions and balances with “Associates” are those carried out with entities over which CAAP exerts significant influence in accordance with IFRS, but does not have control. Transactions and balances with related parties, which are not associates and are not consolidated are disclosed as “Other related parties”.

The Group receives services from related parties, such as internal audit, management control, financial assistance, technology outsourcing services and construction services.

Summary of balances with related parties are:


	At December 31,
	2019	2018
Year-end balances

(a) Arising from sales / purchases of goods / other
Trade receivables with associates	1,555	1,189
Trade receivables with other related parties	687	1,799
Other receivables with associates	658	856
Other receivables with other related parties	8,611	8,755
Other financial assets with associates	2,494	5,858
Other financial assets with other related parties	14,573	14,794
Trade payables to other related parties	(3,017)	(4,281)
	25,561	28,970
(b) Other liabilities
Other liabilities to other related parties	(7,538)	(2,711)
	(7,538)	(2,711)
(c) Other balances
Cash and cash equivalents in other related parties	15,312	9,986
	15,312	9,986


	For the year ended
	2019	2018	2017
Transactions
Cash contribution and contributions in kind	—	—	6,600
Refund of shareholder contributions	—	—	(28,893)
Aeronautical/Commercial revenue	7,187	7,507	6,790
Fees	(8,256)	(6,056)	886
Interest accruals	654	(320)	(3,159)
Acquisition of goods and services	(19,002)	(23,909)	(13,950)
Others	(4,449)	(954)	(900)

Remuneration received by the Group’s key staff (company`s directors) amounted to approximately 1.7% of total remunerations accrued at December 31, 2019, 1.8% accrued at December 31, 2018 and 2.6% accrued at December 31, 2017.

Cash flow disclosures

12 Months Ended

Dec. 31, 2019

Cash flow disclosures

Cash flow disclosures

28 Cash flow disclosures


	At December 31,
	2019	2018	2017
Changes in working capital
Other receivables and credits	(103,908)	(41,567)	(78,303)
Inventories	(1,395)	(999)	(909)
Other liabilities	(48,116)	(37,242)	(171,741)
	(153,419)	(79,808)	(250,953)

The most significant non-cash transactions are detailed below:


	For the year ended

	2019	2018	2017

Intangible assets acquisition with an increase in Other liabilities / Borrowings / Lease liabilities	(4,368)	(595)	(1,591)
Dividends not paid	—	—	(2,007)
Right-of-use asset initial recognition with an increase in Lease liabilities	(12,273)	—	—
Income tax paid with tax certificates	—	1,650	—
Property, plant and equipment acquisitions with an increase in Other liabilities / Trade payables	—	—	(9)
Borrowings cost capitalization	(562)	—	(9,301)
Contribution in kind in associates	—	—	(17,950)
Decrease in Intangible with an decrease in Other liabilities	—	—	(84,075)
Assignment of credits	—	—	(4,744)
Payment of Commitments to the grantor with a decrease in Other receivables and credits	—	—	64,284

Reconciliation of debt:

According to the IAS 7, the movements in the debt of the year that impact on the cash flow as part of the financing activities are detailed below:


	Bank and financial		Loans with
	borrowings	Notes	related parties	Other	Total
Values at the beginning of the year	446,007	678,936	—	1,715	1,126,658
Adjustment on adoption of IFRS 16	—	—	—	(1,715)	(1,715)
Cash flows	121,830	(94,142)	—	—	27,688
Foreign exchange and inflation adjustments	(34,347)	699	—	—	(33,648)
Other non-cash movements *	41,792	47,569	—	—	89,361
Balances as of December 31, 2019	575,282	633,062	—	—	1,208,344


	Bank and financial		Loans with
	borrowings	Notes	related parties	Other	Total
Values at the beginning of the year	765,330	682,415	34,651	4,049	1,486,445
Cash flows	(308,547)	(48,153)	(34,980)	(1,664)	(393,344)
Foreign exchange adjustments	(55,935)	(3,624)	—	(1,265)	(60,824)
Other non-cash movements *	45,159	48,298	329	595	94,381
Balances as of December 31, 2018	446,007	678,936	—	1,715	1,126,658

* This line mainly includes interest accrued.

Earnings per share

12 Months Ended

Dec. 31, 2019

Earnings per share

Earnings per share

29 Earnings per share

Basic earnings per share is calculated by dividing the profit attributable to equity holders of the Group by the weighted average number of shares resulting from the Conversion, the Reverse Stock Split and the Initial Public Offering, which were implemented in three stages:

- Stage 1: Conversion that implies an increase to 1,500,000,000 common shares as explained in Note 1.

- Stage 2: Reverse stock split from 1-to-10.12709504 approved by the shareholder on January 19, 2018 that implies a reduction of the outstanding common shares from 1,500,000,000 to 148,117,500 common shares. The nominal value of USD 1 of each common share has not changed because of the Reverse Stock Split, which become effective as of the date of its approval.

- Stage 3: Issuance of 11,904,762 common shares in the Initial Public Offering on February 2, 2018.

The Conversion and the Reverse Stock Split has been given a retrospective effect.

The following tables shows the net income and the number of shares that have been used for the calculation of the basic earnings per share total of continuing operations:


	2019	2018	2017
Income attributable to equity holders of the Group	9,099	7,125	63,491
Weighted average number of shares (thousands)	160,022	158,848	148,118
Basic income per share of the year	0.06	0.04	0.43

As of the date of the issuance of these consolidated financial statements, there are no CAAP instruments outstanding that imply the existence of potential ordinary shares. Thus the basic net income per share matches the diluted net income per share.

Subsequent events

12 Months Ended

Dec. 31, 2019

Subsequent events

Subsequent events

30 Subsequent events

Council of State judgement – Toscana Aeroporti expansion plan

On February 13, 2020, Toscana Aeroporti acknowledges the judgement of the Council of State rejecting the appeal lodged by, inter alia, Italy's Ministry of the Environment and Protection of the Land and Sea, Italy's Ministry of Cultural Heritage and Activities, Italian Civil Aviation Authority (ENAC), Municipality of Florence, Region of Tuscany, Metropolitan City of Florence and Toscana Aeroporti against the judgement of the Regional Administrative Court of Tuscany No. 723 of 2019.

While fully respecting Council of State’s judgement, Toscana Aeroporti is firmly convinced of the need for the Florence airport to construct a new runway and a new terminal to remedy the airport’s evident critical infrastructure concerns and will therefore verify the conditions and actions to be taken, together with the competent entities — and first and foremost the Italian Civil Aviation Authority — to move ahead with the project.

It is important to note that the work done was carried out according to the opinions and instructions provided by the competent ministries and the competent Environmental Compatibility Assessment (VIA) Commission, by virtue of the positive opinions obtained from the Italian Environmental Compatibility Assessment Commission, Italy's Ministry of the Environment and Protection of the Land and Sea, Italy's Ministry of Cultural Heritage and Activities and Italy's Ministry for Infrastructure and Transport.

On February 20, 2020, the Board of Director of Toscana Aeroporti S.p.A., convened under the chairmanship of Marco Carrai, acknowledged and examined the content of the judgements of the Council of State rejecting the appeals lodged.

Fully aware of the Florence airport’s need to construct a new runway and a new terminal to remedy the airport’s evident critical infrastructure concerns – as also highlighted in this date by the Italian Civil Aviation Authority (“ENAC”) in its letter where it requires that the analysis, study and design activities be launched, thereby confirming its interest in the constriction of the new runway –, the Board of Directors resolved to take the necessary steps to move forward with the proceedings concerning the Florence airport’s Master Plan.

The Company continued in 2019 the project activities, which reached a definitive and executive level, connected to the incorporation of the provisions as emerged from the EIA and Urban Planning Compliance procedures. In light of the level of detail of the projects carried out to date, as well as of the territorial development framework as defined by the determinations of the local authorities in charge (Region, Province, Municipalities concerned) on the basis of the technical analyzes carried out TA considers it reasonable that all specialist analyzes and project works so far developed and entered in work in progress will be fully usable despite the negative outcome of the use of the above judgment, which however has not called into question its technical validity, and in light of the imminent start of a new process of approval.

No impairment was revealed taking into account that the judgments referred to above do not call into question the technical validity of the project and do not recognize any regulatory or environmental impediments to its realization, and also TA being able to re-use the specialist analyzes and design works so far developed within the new procedure for approving the works.

Re-bidding of Natal Airport Concession

On March 5, 2020, CAAP announced that its subsidiary Inframérica Concessionária do Aeroporto de São Gonçalo do Amarante S.A. (“ICASGA”) filed a request to the Brazilian Federal Government to commence the re-bidding process of the International Airport of São Gonçalo do Amarante (“Natal Airport”). If the request is approved, the operation of Natal Airport will be transferred to a different operator after a new bidding process, and an indemnification payment will be made to ICASGA, to be determined by authorities, which will be primarily based on non-amortized capital expenditure investments. In the interim, ICASGA will maintain all airport operations, with the same safety and service quality, as well as commercial and employment contracts. The re-bidding request is limited to the Natal Airport concession.

Several factors drove the Company’s decision to seek return of this concession. Passenger traffic has been negatively impacted by the adverse economic conditions in Brazil over the past years, particularly affecting tourism activity in the country, which resulted in lower than expected passenger traffic. At Natal Airport in particular, total passenger traffic reached 2.3 million in 2019, compared to the 4.3 million expected as per the feasibility study. In addition, as the Natal Airport concession occurred in 2011 and was the first airport concession in Brazil, passenger tariffs lag those of all other privatized airports in the country under the same tariff scheme, which as of December 2019 are in average 35% higher than Natal Airport tariffs and air navigation tariffs charged in other airports are 301% higher than in Natal Airport. This situation has required CAAP to make capital contributions to sustain this concession and thus allow ICASGA to remain in compliance with all of its financial obligations to the Brazilian Government and financial institutions.

Indebtedness

During March 2020, CAISA received the first disbursements of the planned financing with Banco Santander S.A. and Banco Itaú Uruguay S.A. for construction works at Punta del Este airport for a total amount of USD 3.3 million divided equally among both financial institutions. Disbursements up to USD 16 million will be made according to the level of progress of works up to 80%. The principal amounts under these credit facilities shall be repaid in five annually, equal and regular installments, the first one being payed as of 30 April, 2021, and are secured by the assignment of certain revenues. The main covenants require compliance with certain financial ratios as well as certain restrictions as changes in ownership interests or change in control, among others.

Effects of Covid-19 on operations

At December 31, 2019, a limited number of cases of an unknown virus had been reported to the World Health Organization. There was no explicit evidence of human-to-human transmission at that date. Travel had not been affected mainly in the regions generally served by the Company, Latin America, Europe and the United States. In January and February 2020, the virus (known as Covid-19 or “Coronavirus”) spread to other parts of the world, mainly certain countries in Europe such as France, Germany and Italy.

Given the scale of the virus spread, in March 2020, several governments around the world, including Latin American governments, rapidly implemented drastic measures to contain the spread, including but not limited the closing of borders and prohibition of travel to and from certain parts of the world for a time period, generally between 30 days and 45 days.

Specifically, the governments and transportation authorities in many of CAAP’s countries of operations have issued flight restrictions as follows:

· Argentina: Presidential Decree issued on March 12, 2020 new measures in relation with the sanitary emergency in the country, and banned inbound flights from China, South Korea, Iran, Japan, the United States, United Kingdom and Europe, starting March 17, 2020 and lasting for 30 days. Starting March 17, 2020, only Aerolíneas Argentinas, the national carrier, will be allowed to operate with the goal of repatriating Argentines and foreign Argentine residents.

· Italy: As per Decree issued by the Ministry of Transportation and Infrastructure on March 12, 2020, the Italian Civil Aviation Authority has ordered Florence Airport, among others, to limit its operations as of March 14, 2020. While Pisa Airport is not affected by the decree, there have been very few flights in the current environment.

· Ecuador: On March 14, 2020, the Emergency Operations Committee, composed of top government authorities, resolved to close all borders to foreigners starting March 15, 2020 and to Ecuadorean nationals from March 16, 2020.

· Uruguay: On March 15, 2020, the government announced restrictions for flights arriving from Argentina, starting March 17 and from the United States starting March 18. It also announced it would halt all flights from Europe starting March 20, 2020.

Depending on how the situation evolves, governments may impose tougher measures including the extension of the travel bans for longer periods. In addition, concerns about the Coronavirus are negatively impacting travel demand (and therefore the Company's business) generally.

In this context, CAAP has formed a crisis committee composed of the Company's CEO and operating CEOs of each subsidiary to assess its operations, including potential reductions in operating costs while maintaining quality and safety standards. The Company is also in conversations with the relevant regulatory agencies and aviation and transportation authorities in each of its countries of operations to review mitigation measures, as it navigates this unprecedented environment. CAAP has also further enhanced safety and hygiene protocols across its airports to protect the well-being of passengers and personnel.

As a result of the above and considering that the COVID-19 pandemic is complex and rapidly evolving, the full extent to which the Coronavirus will impact the Company's business, results of operations, financial position and liquidity is unknown. The Company is closely monitoring the situation and taking all measures necessary to preserve human life and the Company's business together with taking several steps to further strengthen the financial position and maintaining financial liquidity and flexibility.

There are no other subsequent events that could significantly affect the Company's financial position as of December 31, 2019.

Basis of presentation and accounting policies (Policies)

12 Months Ended

Dec. 31, 2019

Basis of presentation and accounting policies

Basis of preparation

The Group’s consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) of the International Accounting Standards Board (IASB) and the Interpretations of the International Financial Reporting Interpretations Committee (IFRIC) applicable to companies reporting under IFRS. The consolidated financial statements comply with IFRS as issued by the International Accounting Standards Board (IASB).

Presentation in the consolidated statement of financial position differentiates between current and non-current assets and liabilities. Assets and liabilities are regarded as current if they mature within one year or within the normal business cycle of the Group, or are held for sale.

The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying the Group’s accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in Note 2.F.

Several balance sheet consolidated statements of final position and consolidated statement of income items have been combined in the interests of clarity. These items are stated and explained separately in the notes to the consolidated financial statements. The statement of income is structured according to the function of expense method (nature of the expenses is classified in notes).

The consolidated financial statements are presented in thousands of U.S. Dollars unless otherwise stated. All amounts are rounded off to thousands of U.S. Dollars unless otherwise stated.

As such, insignificant rounding differences may occur. A dash (“—”) indicates that no data was reported for a specific line item in the relevant financial year or period or when the pertinent figure, after rounding, amounts to nil.

The fiscal year begins on January 1 and ends on December 31.

New and amended standards adopted by the Group

The group has applied the following standard for the first time for their annual reporting period commencing on January 1, 2019:

·

IFRS 16 Leases

·

Prepayment Features with Negative Compensation - Amendments to IFRS 9

·

Long-term Interests in Associates and Joint Ventures - Amendments to IAS 28

·

Annual Improvements to IFRS Standards 2015 - 2017 Cycle

·

Plan Amendment, Curtailment or Settlement - Amendments to IAS 19

·

Interpretation 23 Uncertainty over Income Tax Treatments.

The group had to change its accounting policies as a result of adopting IFRS 16. The group elected to apply the simplified transition approach and has not restated comparative amounts for the year prior to first adoption. This is disclosed in Note 2.Y. The other amendments and interpretations listed above did not have any material impact on the amounts recognized in prior periods and are not expected to significantly affect the current or future periods.

During the period ended December 31, 2018, the group has applied the following standards and amendments for the first time for their annual reporting period commencing on January 1, 2018:

- IFRS 9 Financial Instruments

- IFRS 15 Revenue from Contracts with Customers

- Annual Improvements 2014‑2016 cycle

- Interpretation 22 Foreign Currency Transactions and Advance Consideration

The group had to change its accounting policies and make certain retrospective adjustments following the adoption of IFRS 9 as disclosed in Note 3.A(iii).

New and amended standards not yet adopted for CAAP

Certain new accounting standards and interpretations have been published that are not mandatory for December 31, 2019 reporting periods and have not been early adopted by the group. The group’s management is currently evaluating the potential impact of the new standards and interpretations that are set out below.

Other standards and interpretations non-significant for the Company’s financial statements:

- Amendments to IAS 1 and 8 – Definition of Material. These amendments must be applied prospectively for annual periods beginning on or after January 1, 2020.

- Amendments to IFRS 3 – Definition of a Business. Entities are required to apply the amendments to transactions for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after January 1, 2020.

- Amendments to references to the conceptual framework in IFRS standards (issued in March 2018). These amendments must be applied as from January 1, 2020.

There are no other standards that are not yet effective and that would be expected to have a material impact on the entity in the current or future reporting periods and on foreseeable future transactions.

Group accounting policies

B Group accounting policies

(1) Subsidiaries and transactions with non-controlling interests

Subsidiaries are all entities over which the Group has control. The Group controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Subsidiaries are fully consolidated from the date on which control is exercised by the Company and are no longer consolidated from the date control ceases.

The acquisition method is used to account for the business combinations. The consideration transferred for the acquisition of a subsidiary is the fair value of the assets transferred, the liabilities incurred or assumed at the date of exchange, and the equity interest issued by the group. Acquisition-related costs are expensed as incurred. Identifiable assets acquired, liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date.

Any non-controlling interest in the acquiree is measured either at fair value or at the non-controlling interest’s proportionate share of the acquiree’s net assets. Accounting treatment is applied on an acquisition by acquisition basis.

The excess of the aggregate of the consideration transferred and the amount of any non-controlling interest in the acquiree over the fair value of the identifiable net assets acquired is recorded as goodwill. If this consideration is lower than the fair value of the net assets of the subsidiary acquired, the difference is recognized directly in the Consolidated Statement of Income.

Transactions with non-controlling interests that do not result in a loss of control are accounted as equity transactions with owners of the Company. For purchases from non-controlling interests, the difference between any consideration paid and the relevant share acquired of the carrying value of net assets of the subsidiary is recorded in equity. Gains or losses on disposals to non-controlling interests are also recorded in equity.

Material inter-company transactions, balances and unrealized gains and losses have been eliminated in consolidation. However, financial gains and losses from intercompany transactions may arise when the subsidiaries have different functional currencies. These financial gains and losses are included in the Consolidated Statement of Income under Financial income and Financial loss.

(2) Associates

Associates are all entities over which the Group has significant influence but not control, generally accompanying a shareholding of between 20% and 50% of the voting rights. Investments in associates are accounted for by the equity method of accounting and are initially recognized at cost, and the carrying amount is increased or decreased to recognize the investor`s share of profit or loss of the investee after the date of acquisition. The Company’s investment in associates includes goodwill identified on acquisition, net of any accumulated impairment loss.

Unrealized gains or losses arising from transactions between the Group and its associates are eliminated to the extent of CAAP’s interest in the associates. Unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of associates have been adjusted where necessary to ensure consistency with the policies adopted by the Group. The Company’s pro-rata share of earnings in associates is recorded in the Consolidated Statement of Income under Share of loss in associates and Share of other comprehensive income/ (loss) from associates. The Company’s pro-rata share of changes in other reserves is recognized in the Consolidated Statement of Changes in Equity under Other Reserves.

(3) List of Subsidiaries

Detailed below are the subsidiaries of the Company which have been consolidated in the Consolidated Financial Statements. The percentage of ownership refers to the direct and indirect ownership of Corporación América Airports S.A in their subsidiaries at each period-end.

Holdings companies


				Percentage of ownership at
	Country of			December 31,
Company	incorporation	Local currency	Main activity	2019		2018		2017
Abafor S.A. (1)	Uruguay	Uruguayan pesos	Holding company	100.00	%	100.00	%	100.00	%
ACI Airport Sudamérica S.A.U.	Spain	Euros	Holding company	100.00	%	100.00	%	100.00	%
ACI Airports Italia S.A.U. (1)	Spain	Euros	Holding company	100.00	%	100.00	%	100.00	%
America International Airports LLC (AIA) (1)	USA	U.S. dollars	Holding company	100.00	%	100.00	%	100.00	%
Cargo & Logistics S.A. (1)	Argentina	Argentine pesos	Holding company	81.49	%	81.49	%	81.49	%
CASA Aeroportuaria S.A. (2)	Argentina	Argentine pesos	Holding company	—		99.98	%	99.98	%
Cedicor S.A.	Uruguay	Uruguayan pesos	Holding company	100.00	%	100.00	%	100.00	%
Cerealsur S.A.	Uruguay	Uruguayan pesos	Holding company	100.00	%	100.00	%	100.00	%
Corporación Aeroportuaria S.A. (2)	Argentina	Argentine pesos	Holding company	99.98	%	99.98	%	99.98	%
Corporación América Italia S.p.A.	Italy	Euros	Holding company	75.00	%	75.00	%	100.00	%
Corporación América S.A.	Argentina	Argentine pesos	Holding company	95.37	%	95.37	%	95.37	%
Corporación América Sudamericana S.A.	Panamá	U.S. dollars	Holding company	94.69	%	94.69	%	94.69	%
DICASA Spain S.A.U. (1)	Spain	Euros	Holding company	100.00	%	100.00	%	100.00	%
GOFI Investments S.L (3)	Spain	Euros	Holding company	—		—		100.00	%
Inframerica Participaçoes S.A. (1)	Brazil	Brazilian real	Holding company	99.97	%	99.96	%	99.96	%
Yokelet S.L. (1)	Spain	Euros	Holding company	100.00	%	100.00	%	100.00	%

(1) These companies do not have relevant net assets other than the share of ownership in the operating companies included in the table below.

(2) These companies were merged on June 30, 2019.

(3) This company was dissolved on March 15, 2018.

Operating companies


				Percentage of ownership at
	Country of			December 31,
Company	incorporation	Local currency	Main activity	2019		2018		2017
ACI do Brasil S.A.	Brazil	Brazilian real	Service company	99.99	%	99.99	%	—
Aerocombustibles Argentinos S.A.	Argentina	Argentine pesos	Fueling company	92.98	%	92.98	%	92.98	%
Aeropuerto de Bahía Blanca S.A.	Argentina	Argentine pesos	Airports Operation	81.06	%	81.06	%	81.06	%
Aeropuertos Argentina 2000 S.A.("AA2000") (4)	Argentina	Argentine pesos	Airports Operation	81.29	%	81.29	%	81.29	%
Aeropuertos del Neuquén S.A.	Argentina	Argentine pesos	Airports Operation	74.10	%	74.10	%	74.10	%
Armenia International Airports C.J.S.C.	Armenia	Dram	Airports Operation	100.00	%	100.00	%	100.00	%
Consorcio Aeropuertos Internacionales S.A.	Uruguay	Uruguayan pesos	Airports Operation	100.00	%	100.00	%	100.00	%
Enarsa Aeropuertos S.A.	Argentina	Argentine pesos	Fuel plants	76.29	%	76.29	%	76.29	%
Inframerica Concessionária do Aeroporto de Brasilia S.A. ("ICAB")	Brazil	Brazilian real	Airports Operation	50.98	%	50.98	%	50.98	%
Inframerica Concessionária do Aeroporto de São Gonçalo do Amarante S.A. ("ICASGA")	Brazil	Brazilian real	Airports Operation	99.98	%	99.98	%	99.97	%
Paoletti América S.A. (5)	Argentina	Argentine pesos	Service company	40.65	%	40.65	%	40.65	%
Puerta del Sur S.A.	Uruguay	Uruguayan pesos	Airports Operation	100.00	%	100.00	%	100.00	%
Servicios y Tecnología Aeroportuaria S.A.	Argentina	Argentine pesos	Service company	81.39	%	81.39	%	81.39	%
TCU S.A.	Uruguay	Uruguayan pesos	Service company	100.00	%	100.00	%	100.00	%
Terminal Aeroportuaria Guayaquil S.A. ("TAGSA") (6)	Ecuador	U.S. dollars	Airports Operation	49.99	%	49.99	%	49.99	%
Texelrío S.A.	Argentina	Argentine pesos	Service company	56.91	%	56.91	%	56.91	%
Toscana Aeroporti S.p.A. (7) (8)	Italy	Euros	Airports Operation	46.71	%	46.71	%	51.13	%
Villalonga Furlong S.A.	Argentina	Argentine pesos	Service company	81.50	%	81.50	%	81.50	%

(4) Includes a 9.35% direct interest of Cedicor S.A. in AA2000, acquired by Cedicor S.A. in 2011. This participation is subject to the authorization by the ORSNA pursuant to section 7.2 of the Argentine Concession Agreement. As of the date of issuance of these Consolidated Financial Statements, the ORSNA has not issued any resolution approving or rejecting the aforementioned transaction. While this approval is pending, all economic and political rights pertaining to the shares, including all distributed dividends, have been assigned to Cedicor S.A.

(5) The group has control over this company based on having majority representation in the board, power to direct the process of setting of financial and operating policies and execute the operational management of such Company.

(6) The group has control over this company based on having power to direct the process of setting of financial and operating policies and execute the operational management of such Company.

(7) The group has control over this company based on having a majority stake in Corporación América Italia S.A. that has 62.28% of ownership of Toscana Aeroporti S.p.A., power to direct the process of setting of financial and operating policies and execute the operational management of such Company.

(8) The group Toscana Aeroporti S.p.A. has control over the following companies: Jet Fuel Co. S.r.l., Parcheggi Peretola S.r.l., Toscana Aeroporti Engineering S.r.l., Toscana Aeroporti Handling S.r.l. and Vola S.r.l.

Summarized financial information in respect of each of the Group´s subsidiaries that has most significant non-controlling interests is set below. The summarized financial information below represents amounts before intragroup elimination.


	Toscana Aeroporti S.p.A.
	December 31,	December 31,
	2019	2018
Non-current assets	245,541	239,489
Current assets	55,248	51,192
Total assets	300,789	290,681
Non-current liabilities	60,650	65,552
Current liabilities	105,298	89,414
Total liabilities	166,523	154,966
Equity	134,266	135,715
Revenue	145,633	155,482
Gross profit	41,061	40,405
Operating income	25,938	26,795
Financial Results	(1,752)	(1,543)
Share of income in associates	35	43
Income tax expense	(8,174)	(7,927)
Net income	16,047	17,368
Other comprehensive loss for the year	(2,722)	(6,115)
Total comprehensive income for the year	13,325	11,253
Dividends paid	(14,774)	(11,757)

Increase/(Decrease) in cash
Provided by operating activities	24,166	24,552
Used in investing activities	(8,452)	(11,765)
Used in financing activities	(9,240)	(11,181)


	Terminal Aeroportuaria de
	Guayaquil S.A.
	December 31,	December 31,
	2019	2018
Non-current assets	63,914	46,009
Current assets	50,629	44,145
Total assets	114,543	90,154
Non-current liabilities	17,839	2,098
Current liabilities	49,616	45,130
Total liabilities	67,455	47,228
Equity	47,088	42,926
Revenue	109,608	89,226
Gross profit	37,650	37,844
Operating income	20,663	18,717
Financial Results	125	(49)
Share of income in associates	—	—
Income tax expense	(2,047)	(4,053)
Net income	18,741	14,615
Other comprehensive income for the year	36	63
Total comprehensive income for the year	18,777	14,678
Dividends paid	(14,616)	(16,954)

Increase/(Decrease) in cash
Provided by operating activities	8,233	24,743
Provided by / (Used in) investing activities	18,035	(427)
Used in financing activities	(619)	(22,298)


	Inframerica Concessionária do
	Aeroporto de Brasília S.A.
	December 31,	December 31,
	2019	2018
Non-current assets	1,022,213	1,114,656
Current assets	42,369	38,807
Total assets	1,064,581	1,153,463
Non-current liabilities	972,476	1,036,857
Current liabilities	121,564	99,566
Total liabilities	1,094,040	1,136,423
Equity	(29,459)	17,040
Revenue	102,438	107,359
Gross profit	23,069	20,905
Operating income	12,592	4,188
Financial Results	(112,933)	(113,639)
Share of income in associates	—	—
Income tax expense	—	41,989
Net loss	(100,341)	(67,462)
Other comprehensive loss for the year	(2,307)	(10,552)
Total comprehensive loss for the year	(102,648)	(78,014)
Dividends paid	—	—

Increase / (Decrease) in cash
(Used in) / Provided by operating activities	(34,947)	42,185
Used in investing activities	(106)	(344)
Provided by / (Used in) financing activities	43,286	(30,561)


	Aeropuertos Argentina 2000 S.A.
	December 31,	December 31,
	2019	2018
Non-current assets	1,223,668	1,053,818
Current assets	145,516	199,532
Total assets	1,369,184	1,253,350
Non-current liabilities	513,118	503,679
Current liabilities	217,989	146,274
Total liabilities	731,107	649,953
Equity	638,077	603,397
Revenue	924,842	813,248
Gross profit	222,733	257,940
Operating income	149,788	197,846
Financial Results	(62,682)	(137,265)
Share of income in associates	—	—
Income tax expense	11,647	(33,388)
Net income	98,753	27,193
Other comprehensive loss for the year	(19,094)	(214,547)
Total comprehensive income / (loss) for the year	79,659	(187,354)
Dividends paid	(52,354)	—

Increase / (Decrease) in cash
(Used in) / Provided by operating activities	(66,850)	57,527
Provided by / (Used in) investing activities	14,639	(3,732)
Provided by / (Used in) financing activities	12,469	(33,687)

Foreign currency translation