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 total return company that owns, manages and acquires renewable energy, efficient natural gas, electric transmission lines and water assets focused on North America (the United States and Mexico), 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 February 28, 2018, the Company completed the acquisition of a 100% stake in a 4 MW hydroelectric power plant in Perú (“Mini-Hydro”) for approximately $9 million.

On March 9, 2018, Algonquin Power & Utilities (“Algonquin”) announced that it completed the acquisition from Abengoa S.A, (“Abengoa”) of a 25% equity interest in Atlantica, becoming the largest shareholder of the Company. Algonquin does not consolidate the Company in its consolidated financial statements.

The following table provides an overview of the concessional assets the Company owned as of September 30, 2018:

Assets

Type

Ownership

Location

Currency⁽⁸⁾

Capacity

(Gross)

Counterparty

Credit Ratings⁽⁹⁾

COD

Contract

Years

Left ⁽¹²⁾

Solana

Renewable

(Solar)

100%

Class B⁽¹⁾

Arizona (USA)

USD

280 MW

A-/A2/A-

4Q 2013

Mojave

Renewable

(Solar)

100

California

(USA)

USD

280 MW

BBB/Baa1/BBB+

4Q 2014

Solaben 2 & 3

Renewable

(Solar)

%⁽²⁾

Spain

Euro

2x50 MW

A-/Baa1/A-

3Q 2012 &

2Q 2012

20&19

Solacor 1 & 2

Renewable

(Solar)

%⁽³⁾

Spain

Euro

2x50 MW

A-/Baa1/A-

1Q 2012 &

1Q 2012

PS10/PS20

Renewable

(Solar)

100

Spain

Euro

31 MW

A-/Baa1/A-

1Q 2007 &

2Q 2009

14&16

Helioenergy 1 & 2

Renewable

(Solar)

100

Spain

Euro

2x50 MW

A-/Baa1/A-

3Q 2011&

4Q 2011

Helios 1 & 2

Renewable

(Solar)

100

Spain

Euro

2x50 MW

A-/Baa1/A-

3Q 2012&

3Q 2012

Solnova 1, 3 & 4

Renewable

(Solar)

100

Spain

Euro

3x50 MW

A-/Baa1/A-

2Q 2010 &

2Q 2010&

3Q 2010

17&17&18

Solaben 1 & 6

Renewable

(Solar)

100

Spain

Euro

2x50 MW

A-/Baa1/A-

3Q 2013

Seville PV

Renewable

(Solar)

%⁽⁷⁾

Spain

Euro

1 MW

A-/Baa1/A-

3Q 2006

Kaxu

Renewable

(Solar)

%⁽⁴⁾

South Africa

Rand

100 MW

BB/Baa3/BB-⁽¹⁰⁾

1Q 2015

Palmatir

Renewable

(Wind)

100

Uruguay

USD

50 MW

BBB/Baa2/BBB-⁽¹¹⁾

2Q 2014

Cadonal

Renewable

(Wind)

100

Uruguay

USD

50 MW

BBB/Baa2/BBB-⁽¹¹⁾

4Q 2014

Mini-Hydro

Renewable

(Hydraulic)

100

Peru

USD

4 MW

BBB+/A3/BBB+

2Q 2012

ACT

Efficient natural gas

100

Mexico

USD

300 MW

BBB+/Baa3/BBB+

2Q 2013

ATN

Transmission

line

100

Peru

USD

362 miles

BBB+/A3/BBB+

1Q 2011

ATS

Transmission

line

100

Peru

USD

569 miles

BBB+/A3/BBB+

1Q 2014

ATN 2

Transmission

line

100

Peru

USD

81 miles

Not rated

2Q 2015

Quadra 1

Transmission

line

100

Chile

USD

49 miles

Not rated

2Q 2014

Quadra 2

Transmission

line

100

Chile

USD

32 miles

Not rated

1Q 2014

Palmucho

Transmission

line

100

Chile

USD

6 miles

BBB+/Baa1/BBB+

4Q 2007

Skikda

Water

34.2

%⁽⁵⁾

Algeria

USD

3.5 M

ft3/day

Not rated

1Q 2009

Honaine

Water

25.5

%⁽⁶⁾

Algeria

USD

7 M ft3/

day

Not rated

3Q 2012

(1)

On September 30, 2013, Liberty Interactive Corporation invested $300,000 thousand in Class A membership interests in exchange for the right to receive between 54.06% and 61.20% of taxable losses and distributions until such time as Liberty reaches a certain rate of return, or the “Flip Date”, and 22.60% of taxable losses and distributions thereafter once certain conditions are met.

(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 Sadyt (Sociedad Anónima Depuración y Tratamientos) owns the remaining 16.83%.

(6)	Algerian Energy Company, SPA owns 49% of Honaine and Sadyt (Sociedad Anónima Depuración y Tratamientos) 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)	As of December 31, 2017.

On November 27, 2015, Abengoa, reported that, it filed a communication pursuant to article 5 bis of the Spanish Insolvency Law 22/2003 with the Mercantile Court of Seville nº 2. On November 8, 2016, the Judge of the Mercantile Court of Seville declared judicial approval of Abengoa´s restructuring agreement. On March 31, 2017 Abengoa announced the completion of the restructuring. As a result, Atlantica Yield received Abengoa debt and equity instruments in exchange of the guarantee previously provided by Abengoa regarding the preferred equity investment in Abengoa Concessoes Brasil Holding (“ACBH”).

The financing arrangement of Kaxu contained cross-default provisions related to Abengoa, such that debt defaults by Abengoa, subject to certain threshold amounts and/or a restructuring process, could trigger defaults under such project financing arrangement. In March 2017, the Company signed a waiver which gives clearance to cross-defaults that might have arisen from Abengoa insolvency and restructuring up to that date, but does not extend to potential future cross-default events.

In addition, the financing arrangements of Kaxu, Solana and Mojave contained a change of ownership clause that would be triggered if Abengoa ceased to own a minimum of Atlantica Yield’s shares. Based on the most recent public information, Abengoa currently owns 16.47% of Atlantica Yield shares, all of which are pledged as guarantee of asset-backed notes. On March 9, 2018 Abengoa announced it made effective the sale of a 25% stake in Atlantica Yield to Algonquin. Additionally, Algonquin announced on April 17, 2018, that it had exercised an option to purchase the 16.47% remaining stake in Atlantica held by Abengoa, subject to approval by the U.S. Department of Energy (the “DOE”) and other conditions precedent. If Abengoa ceases to comply with its obligation to maintain its 16% ownership of Atlantica Yield's shares, such reduced ownership would put the Company in breach of covenants under the applicable project financing arrangements.

In the case of Kaxu in March 2017 the Company signed a waiver, which allows reduction of ownership by Abengoa below the 35% threshold if it is done in the context of a restructuring plan.

In the case of Solana and Mojave, a forbearance agreement signed with the DOE in 2016 with respect to these assets allows reductions of Abengoa’s ownership of the shares of the Company if it results from (i) a sale or other disposition at any time pursuant and in connection with a subsequent insolvency proceeding by Abengoa, or (ii) capital increases by the Company. In other events of reduction of ownership by Abengoa below the minimum ownership threshold such as sales of stake in Atlantica Yield by Abengoa, the available DOE remedies will not include debt acceleration, but DOE remedies available could include limitations on distributions to the Company from Solana and Mojave. In addition, the minimum ownership threshold for Abengoa’s ownership of the shares of the Company has been reduced from 35% to 16%. In November 2017, in the context of the agreement reached between Abengoa and Algonquin for the acquisition by Algonquin of 25% of the shares of the Company and based on the obligations of Abengoa under the EPC contract the Company signed a consent with the DOE which reduces this minimum ownership required by Abengoa in Atlantica Yield to 16%, which became effective upon closing of the transaction on March 9, 2018.

These consolidated condensed interim financial statements were approved by the Board of Directors of the Company on October 31, 2018.