UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549



FORM 6-K



REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the month of August, 2019

Commission File Number 001-36487



Atlantica Yield plc
(Exact name of Registrant as specified in its charter)



Not applicable
(Translation of Registrant’s name into English)



Great West House, GW1, 17th floor
Great West Road
Brentford, TW8 9DF
United Kingdom
Tel: +44 203 499 0465



Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:

☒  Form 20-F
 
☐  Form 40-F
 
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): 
 
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): 
 
This Report on Form 6-K is incorporated by reference into  the Registration Statement on Form F-3 of the Registrant filed with the Securities and Exchange Commission on August 6, 2018 (File 333-226611).
 


ATLANTICA YIELD PLC
TABLE OF CONTENTS

   
Page
PART I – FINANCIAL INFORMATION
     
Item 1
 6
     
Item 2
36
     
Item 3
57
     
Item 4
59
     
PART II – OTHER INFORMATION
     
Item 1
 60
     
Item 1A
60
     
Item 2
 60
     
Item 3
61
     
Item 4
 61
     
Item 5
 61
     
Item 6
 61
     
62

Definitions

Unless otherwise specified or the context requires otherwise in this quarterly report:


references to “2017 Note Issuance Facility” refer to the senior secured note facility dated February 10, 2017 of €275 million (approximately $308.5 million), with U.S. Bank as facility agent and a group of funds managed by Westbourne Capital as purchasers of the notes issued thereunder;
 

references to “2019 Notes” refer to the 7.000% Senior Notes due 2019 in an aggregate principal amount of $255 million issued on November 17, 2014, as further described in “Item 2—Management’s Discussion and Analysis of Financial Condition and Results of Operations— Liquidity and Capital Resources—Sources of Liquidity—2019 Notes”;
 

references to “2019 Note Issuance Facility” refer to the senior unsecured note facility dated April 30, 2019 of an amount equal to the euro equivalent of $300 million, with Lucid Agency Services Limited as facility agent and a group of funds managed by Westbourne Capital as purchasers of the notes issued thereunder;
 

references to “AAGES” refer to Abengoa-Algonquin Global Energy Solutions B.V.,the joint venture between Algonquin and Abengoa to invest in the development and construction of clean energy and water infrastructure contracted assets;
 

references to “AAGES ROFO Agreement” refer to the agreement we entered into with AAGES on March 5, 2018, which became effective upon completion of the Share Sale, that provides us a right of first offer to purchase any of the AAGES ROFO Assets, as amended and restated from time to time;
 

references to “Abengoa” refer to Abengoa, S.A., together with its subsidiaries, unless the context otherwise requires;
 

references to “Abengoa ROFO Agreement” refer to the agreement we entered into with Abengoa on June 13, 2014, as amended and restated on December 9, 2014, that provides us a right of first offer to purchase any of the present or future contracted assets in renewable energy, efficient natural gas, electric transmission and water of Abengoa that are in operation, and any other renewable energy, efficient natural gas, electric transmission and water asset that is expected to generate contracted revenue and that Abengoa has transferred to an investment vehicle that are located in the United States, Canada, Mexico, Chile, Peru, Uruguay, Brazil, Colombia and the European Union, and four additional assets in other selected regions, including a pipeline of specified assets that we expect to evaluate for future acquisition, for which Abengoa will provide us a right of first offer to purchase if offered for sale by Abengoa or an investment vehicle to which Abengoa has transferred them;
 

references to “ACBH” refer to Abengoa Concessões Brasil Holding, a subsidiary holding company of Abengoa that was engaged in the development, construction, investment and management of concessions in Brazil, comprised mostly of transmission lines and which is currently undergoing a restructuring process in Brazil;
 

references to “ACT” refer to the gas-fired cogeneration facility located inside the Nuevo Pemex Gas Processing Facility near the city of Villahermosa in the state of Tabasco, Mexico;
 

references to “Algonquin” refer to, as the context requires, either Algonquin Power & Utilities Corp., a North American diversified generation, transmission and distribution utility, or Algonquin Power & Utilities Corp. together with its subsidiaries;
 

references to “Algonquin ROFO Agreement” refer to the agreement we entered into with Algonquin on March 5, 2018, which became effective upon completion of the Share Sale, under which Algonquin granted us a right of first offer to purchase any of the assets offered for sale located outside of the United States or Canada as amended from time to time.  See “Item 2—Management’s Discussion and Analysis of Financial Condition and Results of Operations—Overview”;
 

references to “Annual Consolidated Financial Statements” refer to the audited annual consolidated financial statements as of December 31, 2018 and 2017 and for the years ended December 31, 2018, 2017 and 2016, including the related notes thereto, prepared in accordance with IFRS as issued by the IASB (as such terms are defined herein);
 

references to “Annual Report” refer to our 2018 Annual Report on Form 20-F, filed on February 28, 2019;
 

references to “ASI Ops” refer to ASI Operations LLC;
 

references to “Atlantica” refer to Atlantica Yield plc;
 

references to “ATN” refer to ATN S.A., the operational electronic transmission asset in Peru, which is part of the Guaranteed Transmission System;
 

references to “AYES Canada” refer to Atlantica Yield Energy Solutions Canada Inc., a vehicle formed by Atlantica and Algonquin to channel co-investment opportunities;
 

references to “Befesa Agua Tenes” refer to Befesa Agua Tenes, S.L.U;
 

references to “cash available for distribution” refer to the cash distributions received by the Company from its subsidiaries minus cash expenses of the Company, including debt service and general and administrative expenses;
 

references to “CESCE” refer to Compañia Española de Seguros de Credito a la Exportacion , S.A. the Spanish Company of Export Credit Insurance;
 

references to “COD” refer to the commercial operation date of the applicable facility;
 

references to “Consolidated Condensed Interim Financial Statements” refer to the consolidated condensed unaudited interim financial statements as of June 30, 2019 and December 31, 2018 and for the six-month period ended June 30, 2019 and 2018, including the related notes thereto prepared in accordance with IFRS as issued by the IASB, which form a part of this quarterly report;
 

references to “DOE” refer to the U.S. Department of Energy;
 

references to “EMEA” refer to Europe, Middle East and Africa;
 

references to “EPC” refer to engineering, procurement and construction;
 

references to “EURIBOR” refer to Euro Interbank Offered Rate, a daily reference rate published by the European Money Markets Institute, based on the average interest rates at which Eurozone banks offer to lend unsecured funds to other banks in the euro wholesale money market;
 

references to “Federal Financing Bank” refer to a U.S. government corporation by that name;
 

references to “Financial Support Agreement” refer to the Financial Support Agreement we entered into with Abengoa on June 13, 2014, as amended and restated on September 28, 2017, pursuant to which Abengoa agreed to maintain certain guarantees or letters of credit for a period of five years following our initial public offering of ordinary shares in June 2014;
 

references to “Further Adjusted EBITDA” have the meaning set forth in “Item 2—Management’s Discussion and Analysis of Financial Condition and Results of Operations—Key Metrics” within this quarterly report;
 

references to “GWh” refer to gigawatt hour;

 

references to “IAS” refer to the International Accounting Standards;

 

 

references to “IASB” refer to the International Accounting Standards Board, the board responsible for the development and publication of IFRS standards;



references to “IFRIC 12” refer to the International Financial Reporting Interpretations Committee’s interpretation relating to service concessions arrangements;
 

references to “IFRS” refer to the globally accepted International Financial Reporting Standards, as issued by the IASB;


reference to “IFRS 10” refers to the IFRS requirements for the preparation and presentation of consolidated financial statements, requiring entities to consolidate entities it controls;


reference to “International Financial Reporting Interpretations Committee” refers to the interpretative body of the IASB that supports the application of the IFRS standards;
 

reference to “ITC Cash Grant” refers to the investment tax credit cash grant provided by the U.S. Department of the Treasury under Section 1603 of Division B of the American Recovery and Reinvestment Act of 2009;
 

references to “kV” refer to kilovolts;
 

references to “LIBOR” refer to the London Interbank Offered Rate, a benchmark interest rate;
 

references to “Mft 3” refer to million cubic feet;
 
 

references to “Morgan Stanley” refer to Morgan Stanley & Co. LLC;



references to “MW” refer to megawatts;
 

references to “operation” refer to the status of projects that have reached COD (as defined above);
 

references to “O&M” refer to Operations and Maintenance;
 

references to “Pemex” refer to Petróleos Mexicanos;
 

references to “PG&E” refer to PG&E Corporation and its regulated utility subsidiary, Pacific Gas and Electric Company collectively;
 

references to “PPA” refer to the power purchase agreements through which our power generating assets have contracted to sell energy to various off-takers;
 
references to “PTS” refer to Pemex Transportation System;


references to “Revolving Credit Facility” refers to the credit and guaranty agreement with a syndicate of banks (the “Revolving Credit Facility”) providing for a senior secured revolving credit facility in an aggregate principal amount of $425 million, of which $37.5 million matures on December 31, 2021, and the remaining $387.5 matures on December 31, 2022. The Revolving Credit Facility replaced tranche A of the former revolving credit facility, which was repaid in full and cancelled prior to its maturity on June 1, 2018;
 

references to “Rioglass” refer to Rioglass Solar Holding, S.A.;
 

references to “ROFO” refer to a right of first offer;
 

references to “ROFO agreements” refer to the AAGES ROFO Agreement, Algonquin ROFO Agreement and Abengoa ROFO Agreement;
 

references to “Shareholders Agreement” refer to the agreement by and among Algonquin, AAGES and Atlantica, dated March 5, 2018 which became effective upon completion of the 25% Share Sale;
 

references to “Share Sale” refer to the sale by Abengoa to Algonquin of 25% of our ordinary shares pursuant to an agreement for the sale that was entered into in November 2017; Algonquin acquired later an additional 16.5% stake in Atlantica and it currently holds a 44.2% equity interest in the Company;
 

references to “U.S. NOLs” refer to the net operating losses recognized under the U.S. Internal Revenue Code as a result of certain tax-deductible expenses exceeding taxable revenues for a taxable year;
 

reference to “U.S.” or “United States”   refer to the United States of America;
 

references to “UTE” refer to Administracion Nacional de Usinas y Transmisiones Electricas, the Republic of Uruguay’s state-owned electricity company,

 
references to “Windlectric” refer to Windlectric, Inc.;


references to “we,” “us,” “our,” “Atlantica” and the “Company” refer to Atlantica Yield plc and its subsidiaries, unless the context otherwise requires.
 
Cautionary Statements Regarding Forward-Looking Statements

This quarterly report includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any statements that express, or involve discussions as to, expectations, beliefs, plans, objectives, assumptions, strategies, future events or performance (often, but not always, through the use of words or phrases such as may result, are expected to, will continue, is anticipated, believe, will, could, should, would, estimated, may, plan, potential, future, projection, goals, target, outlook, predict and intend or words of similar meaning) are not statements of historical facts and may be forward looking. Such statements occur throughout this report and include statements with respect to our expected trends and outlook, potential market and currency fluctuations, occurrence and effects of certain trigger and conversion events, our capital requirements, changes in market price of our shares, future regulatory requirements, the ability to identify and/or consummate future acquisitions on favorable terms, reputational risks, divergence of interests between our company and those of our largest shareholders and affiliates, tax and insurance implications, and more. Forward-looking statements involve estimates, assumptions and uncertainties. Accordingly, any such statements are qualified in their entirety by reference to, and are accompanied by, important factors included in Part I, Item 3D. Risk Factors in our Annual Report (in addition to any assumptions and other factors referred to specifically in connection with such forward-looking statements) that could have a significant impact on our operations and financial results, and could cause our actual results to differ materially from those contained or implied in forward-looking statements made by us or on our behalf in this quarterly report, in presentations, on our website, in response to questions or otherwise. These forward-looking statements include, but are not limited to, statements relating to:


our growth strategy and reliance on favorable market trends in renewable energy and demand for sustainable power generation and new water sources;
 

our intention to expand our portfolio while maintaining core geographies in North America, South America and Europe;
 

our ability to grow through partnerships with, and acquisitions from AAGES, Algonquin, other partners, or third parties, including our ability to acquire assets under our existing agreements with Algonquin and AAGES;
 

our existing agreements to jointly analyze future value opportunities with partners;
 

asset investments made directly or through investment vehicles with partners, including for projects under development or construction;
 

the performance of our assets and long-term agreements and investments;
 

our intention to collaborate with new and existing partners to expand asset ownership and growth;
 

our objective to expand cash available for distribution and to pay consistent and growing cash dividends to shareholders;
 

potential net operating losses due to changes in shareholder ownership;
 
termination of certain operation and maintenance service agreements;


acquisition closings that are subject to conditions precedent or outstanding government approval;
 

contingent rights under existing agreements;
 

the remaining term life of our assets and the expected costs of asset expansions and acquisitions;
 

the impact of fluctuating interest rates on our performance and expenses and the projected success of mitigation tactics;
 

our expected sources of liquidity and the sufficiency of our existing liquidity position and cash flows in meeting commitments and dividend requirements;
 

the impact of currency fluctuations on business operations and cash-flow hedging tactics;
 

the condition of the debt and equity capital markets and our ability and need to borrow additional funds and access capital markets, as well as our substantial indebtedness and the possibility that we may incur additional indebtedness going forward;
 

the ability of our counterparties to satisfy their financial commitments or business obligations and our ability to seek new counterparties in a competitive market;
 

government regulations, including compliance with regulatory and permit requirements and changes in tax laws, market rules, rates, tariffs and policies affecting renewable energy, as well as those creating the potential for business growth opportunities;

potential environmental liabilities and the cost and conditions of compliance with applicable environmental laws and regulations;


our ability to finance and consummate new acquisitions on favorable terms;
 

third-party contractor and supplier viability;
 

the effects of litigation and other legal proceedings (including bankruptcy) against us and our subsidiaries;
 

price fluctuations, revocation and termination provisions in our offtake agreements and power purchase agreements;
 

our relationship with our shareholders including considerations related to bankruptcy; our substantial short-term and long-term indebtedness, and incurring additional debt in the future; and
 

financial damage caused by our off-taker PG&E and potential default under our project finance agreement due to a breach of our underlying PPA agreement with PG&E.
 
Any forward-looking statement speaks only as of the date on which such statement is made, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances, including, but not limited to, unanticipated events, after the date on which such statement is made, unless otherwise required by law. New factors emerge from time to time and it is not possible for management to predict all of such factors, nor can it assess the impact of each such factor on the business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained or implied in any forward-looking statement.

Consolidated condensed statements of financial position as of June 30, 2019 and December 31, 2018

Amounts in thousands of U.S. dollars

         
As of
June 30,
   
As of
December 31,
 
   
Note (1)
   
2019
   
2018
 
Assets
                 
Non-current assets
                 
Contracted concessional assets
   
6
     
8,359,776
     
8,549,181
 
Investments carried under the equity method
   
7
     
135,496
     
53,419
 
Financial investments
   
8&9
     
72,548
     
52,670
 
Deferred tax assets
           
156,384
     
136,066
 
                         
Total non-current assets
           
8,724,204
     
8,791,336
 
                         
Current assets
                       
Inventories
           
19,117
     
18,924
 
Trade and other receivables
   
12
     
292,040
     
236,395
 
Financial investments
   
8
     
252,473
     
240,834
 
Cash and cash equivalents
           
576,066
     
631,542
 
                         
Total current assets
           
1,139,696
     
1,127,695
 
                         
Total assets
           
9,863,900
     
9,919,031
 

(1)
Notes 1 to 22 are an integral part of the consolidated condensed interim financial statements.

Consolidated condensed statements of financial position as of June 30, 2019 and December 31, 2018

Amounts in thousands of U.S. dollars

         
As of
June 30,
   
As of
December 31,
 
   
Note (1)
   
2019
   
2018
 
Equity and liabilities
                 
Equity attributable to the Company
                 
Share capital
   
13
     
10,160
     
10,022
 
Parent company reserves
   
13
     
1,983,097
     
2,029,940
 
Other reserves
           
52,245
     
95,011
 
Accumulated currency translation differences
           
(80,504
)
   
(68,315
)
Retained earnings
   
13
     
(430,636
)
   
(449,274
)
Non-controlling interest
   
13
     
206,893
     
138,728
 
                         
Total equity
           
1,741,255
     
1,756,112
 
                         
Non-current liabilities
                       
Long-term corporate debt
   
14
     
677,750
     
415,168
 
Long-term project debt
   
15
     
4,204,804
     
4,826,659
 
Grants and other liabilities
   
16
     
1,649,971
     
1,658,126
 
Related parties
   
11
     
25,970
     
33,675
 
Derivative liabilities
   
9
     
330,571
     
279,152
 
Deferred tax liabilities
           
247,412
     
211,000
 
                         
Total non-current liabilities
           
7,136,478
     
7,423,780
 
                         
Current liabilities
                       
Short-term corporate debt
   
14
     
11,842
     
268,905
 
Short-term project debt
   
15
     
792,616
     
264,455
 
Trade payables and other current liabilities
   
17
     
149,337
     
192,033
 
Income and other tax payables
           
32,372
     
13,746
 
                         
Total current liabilities
           
986,167
     
739,139
 
                         
Total equity and liabilities
           
9,863,900
     
9,919,031
 

(1)
Notes 1 to 22 are an integral part of the consolidated condensed interim financial statements.

Consolidated condensed income statements for the six-month periods ended June 30, 2019 and 2018

Amounts in thousands of U.S. dollars

   
Note (1)
   
For the six-month period ended June 30,
 
         
2019
   
2018
 
Revenue
   
4
     
504,790
     
513,113
 
Other operating income
   
20
     
44,908
     
85,058
 
Raw materials and consumables used
           
(6,293
)
   
(7,274
)
Employee benefit expenses
           
(10,777
)
   
(10,315
)
Depreciation, amortization, and impairment charges
   
4
     
(150,063
)
   
(160,297
)
Other operating expenses
   
20
     
(126,230
)
   
(141,226
)
                         
Operating profit
           
256,335
     
279,059
 
                         
Financial income
   
19
     
517
     
36,871
 
Financial expense
   
19
     
(210,532
)
   
(206,106
)
Net exchange differences
           
326
     
1,148
 
Other financial income/(expense), net
   
19
     
(211
)
   
(9,687
)
                         
Financial expense, net
           
(209,900
)
   
(177,774
)
                         
Share of profit/(loss) of associates carried under the equity method
           
3,352
     
2,909
 
                         
Profit/(loss) before income tax
           
49,787
     
104,194
 
                         
Income tax
   
18
     
(27,040
)
   
(31,019
)
                         
Profit/(loss) for the period
           
22,747
     
73,175
 
                         
Loss/(profit) attributable to non-controlling interests
           
(5,791
)
   
(5,825
)
                         
Profit/(loss) for the period attributable to the Company
           
16,956
     
67,350
 
                         
Weighted average number of ordinary shares outstanding (thousands)
   
21
     
100,516
     
100,217
 
                         
Basic and diluted earnings per share (U.S. dollar per share)
   
21
     
0 . 17
     
0.67
 

(1)
Notes 1 to 22 are an integral part of the consolidated condensed interim financial statements.

Consolidated condensed statements of comprehensive income for the six-month periods ended June 30, 2019 and 2018

Amounts in thousands of U.S. dollars

   
For the six-month period ended June 30,
 
   
2019
   
2018
 
Profit/(loss) for the period
   
22,747
     
73,175
 
Items that may be subject to transfer to income statement
               
Change in fair value of cash flow hedges
   
(89,199
)
   
(9,190
)
Currency translation differences
   
(13,121
)
   
(36,336
)
Tax effect
   
21,939
     
(848
)
                 
Net income/(expenses) recognized directly in equity
   
(80,381
)
   
(46,374
)
                 
Cash flow hedges
   
29,320
     
33,899
 
Tax effect
   
(7,330
)
   
(8,475
)
                 
Transfers to income statement
   
21,990
     
25,424
 
                 
Other comprehensive income/(loss)
   
(58,391
)
   
(20,950
)
                 
Total comprehensive income/(loss) for the period
   
(35,644
)
   
52,225
 
                 
Total comprehensive (income)/loss attributable to non-controlling interest
   
(673
)
   
(3,336
)
                 
Total comprehensive income/(loss) attributable to the Company
   
(36,317
)
   
48,889
 

Consolidated condensed statements of changes in equity for the six-month periods ended June 30, 2019 and 2018
Amounts in thousands of U.S. dollars

   
Share
Capital
   
Parent
company
reserves
   
Other
reserves
   
Retained
earnings
   
Accumulated
currency
translation
differences
   
Total
equity
attributable
to the
Company
   
Non-
controlling
interest
   
Total
equity
 
                                                 
Balance as of January 1, 2018
   
10,022
     
2,163,229
     
82,294
     
(489,026
)
   
(18,147
)
   
1,748,372
     
136,595
     
1,884,967
 
                                                                 
Profit/(loss) for the six-month period after taxes
   
     
     
     
67,350
     
     
67,350
     
5,825
     
73,175
 
Change in fair value of cash flow hedges
   
     
     
17,009
     
6,517
     
     
23,526
     
1,183
     
24,709
 
Currency translation differences
   
     
     
     
     
(33,011
)
   
(33,011
)
   
(3,325
)
   
(36,336
)
Tax effect
   
     
     
(7,368
)
   
(1,608
)
   
     
(8,976
)
   
(347
)
   
(9,323
)
Other comprehensive income
   
     
     
9,641
     
4,909
     
(33,011
)
   
(18,461
)
   
(2,489
)
   
(20,950
)
                                                                 
Total comprehensive income
   
     
     
9,641
     
72,259
     
(33,011
)
   
48,889
     
3,336
     
52,225
 
                                                                 
Dividend distribution
   
     
(63,137
)
   
     
     
     
(63,137
)
   
(9,821
)
   
(72,958
)
                                                                 
Balance as of June 30, 2018
   
10,022
     
2,100,092
     
91,935
     
(416,767
)
   
(51,158
)
   
1,734,124
     
130,110
     
1,864,234
 

   
Share
Capital
   
Parent
company
reserves
   
Other
reserves
   
Retained
earnings
   
Accumulated
currency
translation
differences
   
Total
equity
attributable
to the
Company
   
Non-
controlling
interest
   
Total
equity
 
Balance as of December 31, 2018
   
10,022
     
2,029,940
     
95,011
     
(449,274
)
   
(68,315
)
   
1,617,384
     
138,728
     
1,756,112
 
                                                                 
Profit/(loss) for the six -month period after taxes
   
     
     
     
16,956
     
     
16,956
     
5,791
     
22,747
 
Change in fair value of cash flow hedges
   
     
     
(56,490
)
   
1,682
     
     
(54,808
)
   
(5,071
)
   
(59,879
)
Currency translation differences
   
     
     
     
     
(12,189
)
   
(12,189
)
   
(932
)
   
(13,121
)
Tax effect
   
     
     
13,724
     
     
     
13,724
     
885
     
14,609
 
Other comprehensive income
   
     
     
(42,766
)
   
1,682
     
(12,189
)
   
(53,273
)
   
(5,118
)
   
(58,391
)
                                                                 
Total comprehensive income
   
     
     
(42,766
)
   
18,638
     
(12,189
)
   
(36,317
)
   
673
     
(35,644
)
                                                                 
Capital reduction
   
     
     
     
     
     
     
(1,867
)
   
(1,867
)
                                                                 
Capital increase (Note 13)
   
138
     
29,862
     
     
     
     
30,000
     
     
30,000
 
                                                                 
Changes in scope (Note 5)
   
     
     
     
     
     
     
92,303
     
92,303
 
                                                                 
Dividend distribution
   
     
(76,705
)
   
     
     
     
(76,705
)
   
(22,944
)
   
(99,649
)
                                                                 
Balance as of June 30, 2019    
10,160
     
1,983,097
     
52,245
     
(430,636
)    
(80,504
)
   
1,534,362
     
206,893
     
1,741,255
 

Consolidated condensed cash flow statements for the six-month periods ended June 30, 2019 and 2018

Amounts in thousands of U.S. dollars

   
For the six-month period ended
June 30,
 
   
2019
   
2018
 
I. Profit/(loss) for the period
   
22,747
     
73,175
 
Financial expense and non-monetary adjustments
   
361,616
     
297,862
 
                 
II. Profit for the period adjusted by financial expense and non-monetary adjustments
   
384,363
     
371,037
 
                 
III. Variations in working capital
   
(91,926
)
   
(47,227
)
                 
Net interest and income tax paid
   
(143,329
)
   
(160,604
)
                 
A. Net cash provided by operating activities
   
149,108
     
163,206
 
                 
Investment in contracted concessional assets*
   
14,704
     
62,690
 
Other non-current assets/liabilities
   
(30,439
)
   
(11,362
)
Acquisitions of subsidiaries and other financial instruments
   
(103,614
)
   
(6,806
)
B. Net cash provided by/(used in) investing activities
   
(119,349
)
   
44,522
 
                 
Proceeds from Project & Corporate debt
   
308,981
     
73,767
 
Repayment of Project & Corporate debt
   
(433,906
)
   
(211,441
)
Dividends paid to Company´s shareholders
   
(76,705
)
   
(63,137
)
Dividends paid to non-controlling interest
   
(5,105
)
   
(6,787
)
Proceeds from capital increase
   
30,000
      -  
Proceeds from non-controlling interest
   
92,303
      -  
C. Net cash provided by/(used in) financing activities
   
(84,432
)
   
(207,598
)
                 
Net increase/(decrease) in cash and cash equivalents
   
(54,673
)
   
130
 
                 
Cash and cash equivalents at beginning of the period
   
631,542
     
669,387
 
                 
Translation differences in cash or cash equivalent
   
(803
)
   
(12,305
)
                 
Cash and cash equivalents at end of the period
   
576,066
     
657,212
 

* Includes proceeds for $14.8 million and $60.8 million for the six-month period ended June 30, 2019 and June 30, 2018 respectively, related to the amounts received from Abengoa by Solana further to Abengoa´s obligation as EPC Contractor. For further details, we refer to Note 10 of the Company’s consolidated financial statements for the year ended December 31, 2018 included in the annual report for the fiscal year ended December 31, 2018 on Form 20-F.

Notes to the consolidated condensed interim financial statements

Note 1.- Nature of the business
14
   
Note 2.- Basis of preparation
17
   
Note 3.- Financial risk management
18
   
Note 4.- Financial information by segment
19
   
Note 5.- Changes in the scope of the consolidated condensed interim financial statements
24
   
Note 6.- Contracted concessional assets
26
   
Note 7.- Investments carried under the equity method
26
   
Note 8.- Financial Investments
27
   
Note 9.- Derivative financial instruments
27
   
Note 10.- Fair Value of financial instruments
28
   
Note 11.- Related parties
28
   
Note 12.- Trade and other receivables
29
   
Note 13.- Equity
29
   
Note 14.- Corporate debt
30
   
Note 15.- Project debt
31
   
Note 16.- Grants and other liabilities
32
   
Note 17.-Trade payables and other current liabilities
33
   
Note 18.- Income tax
33
   
Note 19.- Financial income and expenses
33
   
Note 20.- Other operating income and expenses
34
   
Note 21.- Earnings per share
35
   
Note 22.- Subsequent events
35

Note 1. - Nature of the business

Atlantica Yield plc (“Atlantica” or the “Company”) was incorporated in England and Wales as a private limited company on December 17, 2013 under the name Abengoa Yield Limited. On March 19, 2014, the Company was re-registered as a public limited company, under the name Abengoa Yield plc. On May 13, 2016, the change of the Company´s registered name to Atlantica Yield plc was filed with the Registrar of Companies in the United Kingdom.

Atlantica is a sustainable total return infrastructure company that owns, manages and acquires renewable energy, efficient natural gas, electric transmission lines and water assets focused on North America (the United States, Mexico and Canada), South America (Peru, Chile and Uruguay) and EMEA (Spain, Algeria and South Africa).

Atlantica’s shares began trading on the NASDAQ Global Select Market under the symbol “ABY” on June 13, 2014. The symbol changed to “AY” on November 11, 2017.

On March 9, 2018 and on November 27, 2018, Algonquin Power & Utilities (“Algonquin”) announced that it completed the acquisition from Abengoa S.A, (“Abengoa”) of a 25% and 16.47% equity interest in Atlantica, respectively. Algonquin is the largest shareholder of the Company and currently owns a 44.2% stake in Atlantica. Algonquin does not consolidate the Company in its consolidated financial statements.

During the year 2018, the Company completed the following acquisitions:

-
On February 28, 2018, the Company closed the acquisition of a 100% stake in a 4 MW hydroelectric power plant in Peru (“Mini-Hydro”) for approximately $9 million;
-
On October 10, 2018, the Company closed acquisition of a 5% stake in a natural gas transportation in Mexico (Pemex Transportation System or “PTS”). Consideration for this 5% stake, which amounts to approximately $7 million, will be disbursed progressively as construction progresses;
-
On December 11, 2018, the Company closed the acquisition of a 66kV transmission line in operation in Chile (“Chile TL3”) for approximately $6 million;
-
On December 14, 2018, the Company closed the acquisition of a 100% stake in a 50 MW on-shore wind plant in Uruguay (“Melowind”) for approximately $45 million;
-
On December 28, 2018, the Company completed the acquisition of a transmission line, which is an expansion of ATN (“ATN expansion 1”) for approximately $16 million.

On January 29, 2019, the Company entered into an agreement with Abengoa under the Right of First Offer (“ROFO”) Agreement for the acquisition of Befesa Agua Tenes S.L.U., a holding company which in turn owns a 51% stake in Tenes, a water desalination plant in Algeria. Closing of the acquisition is subject to conditions precedent, including the approval by the Algerian administration. At this stage, the Company cannot guarantee it will obtain this approval nor the expected timing of such approval. The price agreed for the equity value is $24.5 million, of which $19.9 million was paid in January 2019 as an advance payment and the rest is expected to be paid once the conditions precedent are fulfilled. If all the conditions precedent are not fulfilled by September 30, 2019, the advance payment shall be progressively reimbursed by Abengoa through a full cash-sweep of all the dividends to be received and in any case no later than September 30, 2031, together with an annual 12% interest. These dividends would be guaranteed by a right of usufruct over the economic rights and certain political rights and a pledge over the shares of Befesa Agua Tenés, S.L.U., granted by Abengoa to the Company.

On April 15, 2019, the Company entered into an agreement to acquire a 30% stake in Monterrey, a 142 MW gas-fired engine facility including 130MW installed capacity and 12 MW battery capacity. The acquisition was closed on  August 2, 2019, after conditions precedent were fulfilled, and the Company paid $42 million for the total equity investment. The asset, located in Mexico, has been in operation since 2018 and represents the first investment in electric batteries for the Company. It has a U.S. dollar-denominated 20-year PPA with two international large corporations engaged in the car manufacturing industry as well as a 20-year contract for the natural gas transportation with a U.S. energy company. The PPA also includes price escalation factors. The asset is the sole electricity supplier for the off-takers, it has no commodity risk and also has the possibility to sell excess energy to the North-East region of the country.  The Company also entered into a ROFO agreement with the seller of the shares for the remaining 70% stake in the asset.

On May 9, 2019, the Company entered into a partnership agreement with Algonquin, investing $4.9 million in the equity of a wind farm plant, Amherst Island, with a 75 MW installed capacity, owned and operated by Algonquin in Canada.

The following table provides an overview of the concessional assets the Company owned as of June 30, 2019:

Assets
Type
Ownership
Location
Currency (8)
Capacity
(Gross)
Counterparty
Credit Ratings (9)
COD*
Contract
Years Left
  (13)
                 
Solana
Renewable
(Solar)
100%
Class B (1)
Arizona (USA)
USD
280 MW
A-/A2/A-
2013
25
                 
Mojave
Renewable
(Solar)
100%
California
(USA)
USD
280 MW
D/WR/WD
2014
21
                 
Solaben 2 & 3
Renewable
(Solar)
70% (2)
Spain
Euro
2x50 MW
A-/Baa1/A-
2012
19/18
                 
Solacor 1 & 2
Renewable
(Solar)
87% (3)
Spain
Euro
2x50 MW
A-/Baa1/A-
2012
18/18
                 
PS10/PS20
Renewable
(Solar)
100%
Spain
Euro
31 MW
A-/Baa1/A-
2007&
2009
13/15
                 
Helioenergy 1 & 2
Renewable
(Solar)
100%
Spain
Euro
2x50 MW
A-/Baa1/A-
2011
18/18
                 
Helios 1 & 2
Renewable
(Solar)
100%
Spain
Euro
2x50 MW
A-/Baa1/A-
2012
19/19
                 
Solnova 1, 3 & 4
Renewable
(Solar)
100%
Spain
Euro
3x50 MW
A-/Baa1/A-
2010
16/16/17
                 
Solaben 1 & 6
Renewable
(Solar)
100%
Spain
Euro
2x50 MW
A-/Baa1/A-
2013
20/20
                 
Kaxu
Renewable
(Solar)
51% (4)
South Africa
Rand
100 MW
BB/Baa3/
BB+ (10)
2015
16
                 
Palmatir
Renewable
(Wind)
100%
Uruguay
USD
50 MW
BBB/Baa2/BBB- (11)
2014
15
                 
Cadonal
Renewable
(Wind)
100%
Uruguay
USD
50 MW
BBB/Baa2/BBB- (11)
2014
16
                 
ACT
Efficient natural gas
100%
Mexico
USD
300 MW
BBB+/ Baa3/BB+
2013
14
                 
ATN (12)
Transmission
line
100%
Peru
USD
365 miles
BBB+/A3/BBB+
2011
22
                 
ATS
Transmission
line
100%
Peru
USD
569 miles
BBB+/A3/BBB+
2014
25

ATN 2
Transmission
line
100%
Peru
USD
81 miles
Not rated
2015
14
                 
Quadra 1
Transmission
line
100%
Chile
USD
49 miles
Not rated
2014
16
                 
Quadra 2
Transmission
line
100%
Chile
USD
32 miles
Not rated
2014
16
                 
Palmucho
Transmission
line
100%
Chile
USD
6 miles
BBB+/Baa1/
BBB+
2007
19
                 
Chile TL3
Transmission
line
100%
Chile
USD
50 miles
A+/A1/A
1993
Regulated
                 
Skikda
Water
34.2% (5)
Algeria
USD
3.5 M
ft3/day
Not rated
2009
15
                 
Honaine
Water
25.5% (6)
Algeria
USD
7 M ft3/
day
Not rated
2012
19
                 
Seville PV
Renewable
(Solar)
80% (7)
Spain
Euro
1 MW
A-/Baa1/A-
2006
17
                 
Melowind
Renewable
(Wind)
100%
Uruguay
USD
50MW
BBB/Baa2/BBB-
2015
17
                 
Mini-Hydro
Renewable
(Hydraulic)
100%
Peru
USD
4 MW
BBB+/A3/BBB+
2012
14

(1)
On September 30, 2013, Liberty Interactive Corporation agreed to invest $300 million in Class A shares of ASO Holdings Company LLC, the holding company of Solana, in exchange for a share of the dividends and the taxable losses generated by Solana.

(2)
Itochu Corporation, a Japanese trading company, holds 30% of the shares in each of Solaben 2 and Solaben 3.

(3)
JGC, a Japanese engineering company, holds 13% of the shares in each of Solacor 1 and Solacor 2.

(4)
Kaxu is owned by the Company (51%), Industrial Development Corporation of South Africa (29%) and Kaxu Community Trust (20%).

(5)
Algerian Energy Company, SPA owns 49% of Skikda and Sacyr Agua, S.L. owns the remaining 16.83%.

(6)
Algerian Energy Company, SPA owns 49% of Honaine and Sacyr Agua, S.L. owns the remaining 25.5%.

(7)
Instituto para la Diversificación y Ahorro de la Energía (“Idae”), a Spanish state owned company, holds 20% of the shares in Seville PV.

(8)
Certain contracts denominated in U.S. dollars are payable in local currency.

(9)
Reflects the counterparty’s credit ratings issued by Standard & Poor’s Ratings Services, or S&P, Moody’s Investors Service Inc., or Moody’s, and Fitch Ratings Ltd, or Fitch.

(10)
Refers to the credit rating of the Republic of South Africa. The offtaker is Eskom, which is a state-owned utility company in South Africa.

(11)
Refers to the credit rating of Uruguay, as UTE (Administración Nacional de Usinas y Transmisoras Eléctricas) is unrated.

(12)
Including the acquisition of ATN expansion 1.

(13)
As of December 31, 2018.

(*)
Commercial Operation Date.

The project financing arrangement of Kaxu contains cross-default provisions related to Abengoa such that debt defaults by Abengoa, subject to certain threshold amounts and/or a restructuring process, could trigger a default under the Kaxu project financing arrangement. In March 2017, Atlantica obtained a waiver in its Kaxu project financing arrangement which waives any potential cross-defaults with Abengoa up to that date, but it does not cover potential future cross-default events. As of June 30, 2019, there are no cross-default events with Abengoa.

Note 2. - Basis of preparation

The accompanying consolidated condensed interim financial statements represent the consolidated results of the Company and its subsidiaries.

The company´s annual consolidated financial statements as of December 31, 2018, were approved by the Board of Directors on February 26, 2019.

These consolidated condensed interim financial statements are presented in accordance with International Accounting Standards (“IAS”) 34, “Interim Financial Reporting”. In accordance with IAS 34, interim financial information is prepared solely in order to update the most recent annual consolidated financial statements prepared by the Company, placing emphasis on new activities, occurrences and circumstances that have taken place during the six-month period ended June 30, 2019, and not duplicating the information previously published in the annual consolidated financial statements for the year ended December 31, 2018. Therefore, the consolidated condensed interim financial statements do not include all the information that would be required in a complete set of consolidated financial statements prepared in accordance with the IFRS-IASB (“International Financial Reporting Standards-International Accounting Standards Board”). In view of the above, for an adequate understanding of the information, these consolidated condensed interim financial statements must be read together with Atlantica’s consolidated financial statements for the year ended December 31, 2018 included in the 2018 20-F.

In determining the information to be disclosed in the notes to the consolidated condensed interim financial statements, Atlantica, in accordance with IAS 34, has taken into account its materiality in relation to the consolidated condensed interim financial statements.

The consolidated condensed interim financial statements are presented in U.S. dollars, which is the Company’s functional and presentation currency. Amounts included in these consolidated condensed interim financial statements are all expressed in thousands of U.S. dollars, unless otherwise indicated.

These consolidated condensed interim financial statements were approved by the Board of Directors of the Company on August 2, 2019.

Application of new accounting standards

a) Standards, interpretations and amendments effective from January 1, 2019 under IFRS-IASB, applied by the Company in the preparation of these condensed interim financial statements:

·
IFRS 9 (Amendments to IFRS 9): Prepayment Features with Negative Compensation. This Standard is applicable for annual periods beginning on or after January 1, 2019 under IFRS-IASB, earlier application is permitted.

·
IAS 19 (Amendments to IAS 19): Plan Amendment, Curtailment or Settlement. This amendment is mandatory for annual periods beginning on or after January 1, 2019 under IFRS-IASB, earlier application is permitted.

·
IFRIC 23: Uncertainty over Income Tax Treatments. This Standard is applicable for annual periods beginning on or after January 1, 2019 under IFRS-IASB.

·
IAS 28 (Amendment). Long-term Interests in Associates and Joint Ventures. This amendment is mandatory for annual periods beginning on or after January 1, 2019 under IFRS-IASB, earlier application is permitted.

·
Amendments resulting from Annual Improvements 2015–2017 Cycle (remeasurement of previously held interest). This amendment is mandatory for annual periods beginning on or after January 1, 2019 under IFRS-IASB,

The applications of these amendments have not had any material impact on these condensed interim financial statements.

b) Standards, interpretations and amendments published by the IASB that will be effective for periods beginning on or after January 1, 2020:

·
IFRS 17 ‘Insurance Contracts’. This Standard is applicable for annual periods beginning on or after January 1, 2021 under IFRS-IASB, earlier application is permitted.

·
IFRS 3 (Amendment). Definition of Business. This amendment is mandatory for annual periods beginning on or after January 1, 2020 under IFRS-IASB, earlier application is permitted.

·
IAS 1 and IAS 8 (Amendment). Definition of Material. This amendment is mandatory for annual periods beginning on or after January 1, 2020 under IFRS-IASB, earlier application is permitted.

·
Amendments to References to the Conceptual Frameworks in IFRS Standards. This Standard is applicable for annual periods beginning on or after January 1, 2020 under IFRS-IASB.

The Company does not anticipate any significant impact on the consolidated condensed financial statements derived from the application of the new standards and amendments that will be effective for annual periods beginning on or after January 1, 2020, although it is currently still in the process of evaluating such application.

Use of estimates

Some of the accounting policies applied require the application of significant judgment by management to select the appropriate assumptions to determine these estimates. These assumptions and estimates are based on the Company´s historical experience, advice from experienced consultants, forecasts and other circumstances and expectations as of the close of the financial period. The assessment is considered in relation to the global economic situation of the industries and regions where the Company operates, taking into account future development of our businesses. By their nature, these judgments are subject to an inherent degree of uncertainty; therefore, actual results could materially differ from the estimates and assumptions used. In such cases, the carrying values of assets and liabilities are adjusted.

The most critical accounting policies, which reflect significant management estimates and judgment to determine amounts in these consolidated condensed interim financial statements, are as follows:


Contracted concessional agreements.


Impairment of intangible assets and property, plant and equipment.


Assessment of control.


Derivative financial instruments and fair value estimates.


Income taxes and recoverable amount of deferred tax assets.

As of the date of preparation of these consolidated condensed interim financial statements, no relevant changes in the estimates made are anticipated and, therefore, no significant changes in the value of the assets and liabilities recognized at June 30, 2019 are expected.

Although these estimates and assumptions are being made using all available facts and circumstances, it is possible that future events may require management to amend such estimates and assumptions in future periods. Changes in accounting estimates are recognized prospectively, in accordance with IAS 8, in the consolidated income statement of the period in which the change occurs.

Note 3. - Financial risk management

Atlantica’s activities are exposed to various financial risks: market risk (including currency risk and interest rate risk), credit risk and liquidity risk. Risk is managed by the Company’s Risk Finance and Compliance Departments, which are responsible for identifying and evaluating financial risks, quantifying them by project, region and company, in accordance with mandatory internal management rules. Written internal policies exist for global risk management, as well as for specific areas of risk. In addition, there are official written management regulations regarding key controls and control procedures for each company and the implementation of these controls is monitored through internal audit procedures.

These consolidated condensed interim financial statements do not include all financial risk management information and disclosures required for annual financial statements, and should be read together with the information included in Note 3 to Atlantica’s annual consolidated financial statements as of December 31, 2018.

Note 4. - Financial information by segment

Atlantica’s segment structure reflects how management currently makes financial decisions and allocates resources. Its operating segments are based on the following geographies where the contracted concessional assets are located:


North America


South America


EMEA

Based on the type of business, as of June 30, 2019, the Company had the following business sectors:

Renewable energy: Renewable energy assets include two solar plants in the United States, Solana and Mojave, each with a gross capacity of 280 MW and located in Arizona and California, respectively. The Company owns eight solar platforms in Spain: Solacor 1 and 2 with a gross capacity of 100 MW, PS10 and PS20 with a gross capacity of 31 MW, Solaben 2 and 3 with a gross capacity of 100 MW, Helioenergy 1 and 2 with a gross capacity of 100 MW, Helios 1 and 2 with a gross capacity of 100 MW, Solnova 1, 3 and 4 with a gross capacity of 150 MW, Solaben 1 and 6 with a gross capacity of 100 MW and Seville PV with a gross capacity of 1 MW. The Company also owns a solar plant in South Africa, Kaxu with a gross capacity of 100 MW. Additionally, the Company owns three wind farms in Uruguay, Palmatir, Cadonal and Melowind, with a gross capacity of 50 MW each, and a hydroelectric power plant in Peru with a gross capacity of 4 MW.

Efficient natural gas: The Company´s sole efficient natural gas asset is ACT, a 300 MW cogeneration plant in Mexico, which is party to a 20-year take-or-pay contract with Pemex for the sale of electric power and steam.

Electric transmission lines : Electric transmission assets include (i) three lines in Peru, ATN, ATS and ATN2, spanning a total of 1,015 miles; and (ii) four lines in Chile, Quadra 1, Quadra 2, Palmucho and Chile TL3, spanning a total of 137 miles.

Water: Water assets include a minority interest in two desalination plants in Algeria, Honaine and Skikda with an aggregate capacity of 10.5 Mft3 per day

Atlantica’s Chief Operating Decision Maker (CODM) assesses the performance and assignment of resources according to the identified operating segments. The CODM considers the revenues as a measure of the business activity and the Further Adjusted EBITDA as a measure of the performance of each segment. Further Adjusted EBITDA is calculated as profit/(loss) for the period attributable to the parent company, after adding back loss/(profit) attributable to non-controlling interests from continued operations, income tax, share of profit/(loss) of associates carried under the equity method, finance expense net, depreciation, amortization and impairment charges of entities included in these consolidated financial statements, and compensations received from Abengoa in lieu of Abengoa Concessões Brasil Holding (“ACBH”) dividends (for the period up to the first quarter of 2017 only).

In order to assess performance of the business, the CODM receives reports of each reportable segment using revenues and Further Adjusted EBITDA. Net interest expense evolution is assessed on a consolidated basis. Financial expense and amortization are not taken into consideration by the CODM for the allocation of resources.

In the six-month periods ended June 30, 2019, Atlantica had three customers with revenues representing more than 10% of the total revenues, two in the renewable energy and one in the efficient natural gas business sectors. In the six-month periods ended June 30, 2018, Atlantica had four customers with revenues representing more than 10% of the total revenues, three in the renewable energy and one in the efficient natural gas business sectors.


a)
The following tables show Revenues and Further Adjusted EBITDA by operating segments and business sectors for the six-month periods ended June 30, 2019 and 2018:

   
Revenue
   
Further Adjusted EBITDA
 
   
For the six-month period ended
June 30,
   
For the six-month period ended
June 30,
 
   
($ in thousands)
 
Geography
 
2019
   
2018
   
2019
   
2018
 
North America
   
164,536
     
172,315
     
147,162
     
154,659
 
South America
   
69,090
     
59,881
     
57,464
     
49,247
 
EMEA
   
271,164
     
280,917
     
201,772
     
235,450
 
Total
   
504,790
     
513,113
     
406,398
     
439,356
 

   
Revenue
   
Further Adjusted EBITDA
 
   
For the six-month period ended
June 30,
   
For the six-month period ended
June 30,
 
   
($ in thousands)
 
Business sector
 
2019
   
2018
   
2019
   
2018
 
Renewable energy
   
380,086
     
392,213
     
301,395
     
345,386
 
Efficient natural gas
   
61,698
     
61,437
     
54,302
     
46,982
 
Electric transmission lines
   
51,098
     
47,903
     
43,585
     
40,300
 
Water
   
11,908
     
11,560
     
7,116
     
6,688
 
Total
   
504,790
     
513,113
     
406,398
     
439,356
 

The reconciliation of segment Further Adjusted EBITDA with the profit/(loss) attributable to the Company is as follows:

   
For the six-month period ended
June 30,
($ in thousands)
 
   
2019
   
2018
 
Profit/(Loss) attributable to the Company
 
$
16,956
     
67,350
 
(Loss)/Profit attributable to non-controlling interests
   
5,791
     
5,825
 
Income tax
   
27,040
     
31,019
 
Share of (profits)/losses of associates
   
(3,352
)
   
(2,909
)
Financial expense, net
   
209,900
     
177,774
 
Depreciation, amortization, and impairment charges
   
150,063
     
160,297
 
Total segment Further Adjusted EBITDA
 
$
406,398
     
439,356
 


b)
The assets and liabilities by operating segments (and business sector) as of June 30, 2019 and December 31, 2018 are as follows:

Assets and liabilities by geography as of June 30, 2019:

   
North
America
   
South America
   
EMEA
   
Balance as of
June 30,
2019
 
   
($ in thousands)
 
Assets allocated
                       
Contracted concessional assets
   
3,377,228
     
1,193,156
     
3,789,392
     
8,359,776
 
Investments carried under the equity method
   
79,119
     
-
     
56,377
     
135,496
 
Current financial investments
   
157,083
     
61,827
     
31,499
     
250,409
 
Cash and cash equivalents (project companies)
   
146,237
     
41,704
     
280,849
     
468,790
 
Subtotal allocated
   
3,759,667
     
1,296,687
     
4,158,117
     
9,214,471
 
Unallocated assets
                               
Other non-current assets
                           
228,932
 
Other current assets (including cash and cash equivalents at holding company level)
                           
420,497
 
Subtotal unallocated
                           
649,429
 
Total assets
                           
9,863,900
 

   
North
America
   
South America
   
EMEA
   
Balance as of
June 30,
2019
 
   
($ in thousands)
 
Liabilities allocated
                       
Long-term and short-term project debt
   
1,708,966
     
891,278
     
2,397,176
     
4,997,420
 
Grants and other liabilities
   
1,509,206
     
7,382
     
133,383
     
1,649,971
 
Subtotal allocated
   
3,218,172
     
898,660
     
2,530,559
     
6,647,391
 
Unallocated liabilities
                               
Long-term and short-term corporate debt
                           
689,592
 
Other non-current liabilities
                           
603,953
 
Other current liabilities
                           
181,709
 
Subtotal unallocated
                           
1,475,254
 
Total liabilities
                           
8,122,645
 
Equity unallocated
                           
1,741,255
 
Total liabilities and equity unallocated
                           
3,216,509
 
Total liabilities and equity
                           
9,863,900
 

Assets and liabilities by geography as of December 31, 2018:

   
North
America
   
South America
   
EMEA
   
Balance as of
December 31,
2018
 
   
($ in thousands)
 
Assets allocated
                       
Contracted concessional assets
   
3,453,652
     
1,210,624
     
3,884,905
     
8,549,181
 
Investments carried under the equity method
   
-
     
-
     
53,419
     
53,419
 
Current financial investments
   
147,213
     
61,959
     
30,080
     
239,252
 
Cash and cash equivalents (project companies)
   
195,678
     
41,316
     
287,456
     
524,450
 
Subtotal allocated
   
3,796,543
     
1,313,899
     
4,255,860
     
9,366,302
 
Unallocated assets
                               
Other non-current assets
                           
188,736
 
Other current assets (including cash and cash equivalents at holding company level)
                           
363,993
 
Subtotal unallocated
                           
552,729
 
Total assets
                           
9,919,031
 

   
North
America
   
South America
   
EMEA
   
Balance as of
December 31,
2018
 
         
($ in thousands)
 
Liabilities allocated
                       
Long-term and short-term project debt
   
1,725,961
     
900,801
     
2,464,352
     
5,091,114
 
Grants and other liabilities
   
1,527,724
     
7,550
     
122,852
     
1,658,126
 
Subtotal allocated
   
3,253,685
     
908,351
     
2,587,204
     
6,749,240
 
Unallocated liabilities
                               
Long-term and short-term corporate debt
                           
684,073
 
Other non-current liabilities
                           
523,827
 
Other current liabilities
                           
205,779
 
Subtotal unallocated
                           
1,413,679
 
Total liabilities
                           
8,162,919
 
Equity unallocated
                           
1,756,112
 
Total liabilities and equity unallocated
                           
3,169,791
 
Total liabilities and equity
                           
9,919,031
 

Assets and liabilities by business sector as of June 30, 2019:

   
Renewable
energy
   
Efficient
natural
gas
   
Electric
transmission
lines
   
Water
   
Balance as of
June 30,
2019
 
         
($ in thousands)
 
Assets allocated
                             
Contracted concessional assets
   
6,825,572
     
578,423
     
869,685
     
86,096
     
8,359,776
 
Investments carried under the equity method
   
89,149
     
-
     
-
     
46,347
     
135,496
 
Current financial investments
   
33,268
     
139,076
     
60,971
     
17,094
     
250,409
 
Cash and cash equivalents (project companies)
   
426,255
     
19,567
     
13,373
     
9,595
     
468,790
 
Subtotal allocated
   
7,374,244
     
737,066
     
944,029
     
159,132
     
9,214,471
 
Unallocated assets
                                       
Other non-current assets
                                   
228,932
 
Other current assets  (including cash and cash equivalents at holding company level)
                                   
420,497
 
Subtotal unallocated
                                   
649,429
 
Total assets
                                   
9,863,900
 

   
Renewable
energy
   
Efficient
natural
gas
   
Electric
transmission
lines
   
Water
   
Balance as of
June 30,
2019
 
   
($ in thousands)
 
Liabilities allocated
                             
Long-term and short-term project debt
   
3,791,447
     
536,690
     
642,496
     
26,787
     
4,997,420
 
Grants and other liabilities
   
1,648,118
     
139
     
957
     
757
     
1,649,971
 
Subtotal allocated
   
5,439,565
     
536,829
     
643,453
     
27,544
     
6,647,391
 
Unallocated liabilities
                                       
Long-term and short-term corporate debt
                                   
689,592
 
Other non-current liabilities
                                   
603,953
 
Other current liabilities
                                   
181,709
 
Subtotal unallocated
                                   
1,475,254
 
Total liabilities
                                   
8,122,645
 
Equity unallocated
                                   
1,741,255
 
Total liabilities and equity unallocated
                                   
3,216,509
 
Total liabilities and equity
                                   
9,863,900
 

Assets and liabilities by business sector as of December 31, 2018:

   
Renewable
energy
   
Efficient
natural
gas
   
Electric
transmission
lines
   
Water
   
Balance as of
December 31,
2018
 
   
($ in thousands)
 
Assets allocated
                             
Contracted concessional assets
   
6,998,020
     
580,997
     
882,980
     
87,184
     
8,549,181
 
Investments carried under the equity method
   
10,257
     
-
     
-
     
43,162
     
53,419
 
Current financial investments
   
15,396
     
147,192
     
61,102
     
15,562
     
239,252
 
Cash and cash equivalents (project companies)
   
453,096
     
45,625
     
14,043
     
11,686
     
524,450
 
Subtotal allocated
   
7,476,769
     
773,814
     
958,125
     
157,594
     
9,366,302
 
Unallocated assets
                                       
Other non-current assets
                                   
188,736
 
Other current assets (including cash and cash equivalents at holding company level)
                                   
363,993
 
Subtotal unallocated
                                   
552,729
 
Total assets
                                   
9,919,031
 

   
Renewable
energy
   
Efficient
natural gas
   
Electric
transmission
lines
   
Water
   
Balance as of
December 31,
2018
 
   
($ in thousands)
 
Liabilities allocated
                             
Long-term and short-term project debt
   
3,868,626
     
545,123
     
647,820
     
29,545
     
5,091,114
 
Grants and other liabilities
   
1,656,146
     
161
     
1,025
     
794
     
1,658,126
 
Subtotal allocated
   
5,524,772
     
545,284
     
648,845
     
30,339
     
6,749,240
 
Unallocated liabilities
                                       
Long-term and short-term corporate debt
                                   
684,073
 
Other non-current liabilities
                                   
523,827
 
Other current liabilities
                                   
205,779
 
Subtotal unallocated
                                   
1,413,679
 
Total liabilities
                                   
8,162,919
 
Equity unallocated
                                   
1,756,112
 
Total liabilities and equity unallocated
                                   
3,169,791
 
Total liabilities and equity
                                   
9,919,031
 


c)
The amount of depreciation, amortization and impairment charges recognized for the six-month periods ended June 30, 2019 and 2018 are as follows:

   
For the six-month period ended
June 30,
 
Depreciation, amortization and impairment by geography
 
2019
   
2018
 
   
($ in thousands)
 
North America
   
(53,013
)
   
(59,638
)
South America
   
(22,859
)
   
(21,056
)
EMEA
   
(74,191
)
   
(79,603
)
Total
   
(150,063
)
   
(160,297
)

   
For the six-month period ended
June 30,
 
Depreciation, amortization and impairment by business sectors
 
2019
   
2018
 
   
($ in thousands)
 
Renewable energy
   
(142,895
)
   
(140,491
)
Electric transmission lines
   
(12,593
)
   
(14,608
)
Efficent natual gas
   
5,425
     
(5,198
)
Total
   
(150,063
)
   
(160,297
)

Note 5. - Changes in the scope of the consolidated condensed interim financial statements

For the six-month period ended June 30, 2019

On May 24, 2019, Atlantica and Algonquin formed Atlantica Yield Energy Solutions Canada Inc. (“AYES Canada”), a vehicle to channel co-investment opportunities in which Atlantica holds the majority of voting rights. The first investment was in Amherst Island, a 75 MW wind plant in Canada owned by the project company Windlectric, Inc. (“Windlectric”). Atlantica invested $4.9 million and Algonquin invested $92.3 million, both through AYES Canada, which in turn invested those funds in Amherst Island Partnership (“AIP”), the holding company of Windlectric. Atlantica accounts for the investment in AIP and ultimately Windlectric under the equity method as per IAS 28, Investments in Associates and Joint Ventures. Since Atlantica has control over AYES Canada under IFRS 10 “Consolidated Financial Statements”, its consolidated financial statements show a total investment in the Amherst Island project of $97.2 million, accounted for as “Investments carried under the equity method” (Note 7) and Algonquin’s portion of that investment of $92.3 million as “Non-controlling interest”.

For the year ended December 31, 2018

On February 28, 2018, the Company completed the acquisition of a 100% stake in Hidrocañete, S.A. (Mini-Hydro). Total purchase price for this asset amounted to $9,327 thousand. The acquisition has been accounted for in the consolidated accounts of Atlantica, in accordance with IFRS 3, Business Combinations.

On October 10, 2018, the Company completed the acquisition of a 5% stake in Gas CA-KU-A1, S.A.P.I de C.V. (Pemex Transportation System or “PTS”). The acquisition has been accounted for in the consolidated accounts of Atlantica, in accordance with IAS 28, Investments in Associates. Consideration for the initial 5%, which amounts to approximately $7 million will be disbursed progressively as construction progresses. Once the project enters into operation, which is expected for the first half of 2020, the Company expects to acquire an additional 65% as per the terms of the purchase agreements. Finally, the Company expects to acquire the remaining 30% one year after COD, subject to final approvals. The total equity investment is estimated to amount to approximately $150 million.

On December 11, 2018, the Company completed the acquisition of a transmission line in Chile (Chile TL3). The total purchase price for this asset amounted to $6 million. The acquisition has been accounted for in the consolidated financial statements of Atlantica, in accordance with IFRS 3, Business Combinations.

On December 13, 2018, the Company completed the acquisition of a 100% stake in Estrellada, S.A. (Melowind). Total purchase price for this asset amounted to approximately $45 million. The acquisition has been accounted for in the consolidated financial statements of Atlantica, in accordance with IFRS 3, Business Combinations.

On December 28, 2018, the Company completed the acquisition of a power substation and two small transmission lines in Peru, being an expansion of the ATN transmission line (“ATN expansion 1”). Total purchase price for this asset amounted to $16 million. The acquisition has been accounted for in the consolidated financial statements of Atlantica, in accordance with IFRS 3, Business Combinations.

The amount of assets and liabilities integrated at the effective acquisition date for the aggregated change in scope is shown in the following table: