SEC Filing | LATAM Airlines Group SA

Date: May 17, 2019

LATAM AIRLINES GROUP S.A.

/s/ Ramiro Alfonsin

Ramiro Alfonsin

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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

May 17, 2019

Commission File Number 1-14728

LATAM Airlines Group S.A.

(Translation of Registrant’s Name Into English)

Presidente Riesco 5711, 20th floor

Las Condes

Santiago, Chile

(Address of principal executive offices)

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): ☐

LATAM AIRLINES GROUP S.A. AND SUBSIDIARIES

INTERIM CONSOLIDATED FINANCIAL STATEMENTS

FREE TRANSLATION

MARCH 31, 2019

CONTENTS

Interim Consolidated Statement of Financial Position
Interim Consolidated Statement of Income by Function
Interim Consolidated Statement of Comprehensive Income
Interim Consolidated Statement of Changes in Equity
Interim Consolidated Statement of Cash Flows - Direct Method
Notes to the Interim Consolidated Financial Statements

CLP	-	CHILEAN PESO
ARS	-	ARGENTINE PESO
US$	-	united states dollar
THUS$	-	THOUSANDS OF UNITED STATES DOLLARS
COP	-	COLOMBIAN PESO
brl/R$	-	braZILIAN REAL
thr$	-	Thousands of Brazilian reaL

Contents of the notes to the interim consolidated financial statements of LATAM Airlines Group S.A. and Subsidiaries.

Notes	Page

1 - General information	1
2 - Summary of significant accounting policies	5
2.1. Basis of Preparation	5
2.2. Basis of Consolidation	13
2.3. Foreign currency transactions	14
2.4. Property, plant and equipment	16
2.5. Intangible assets other than goodwill	16
2.6. Goodwill	17
2.7. Borrowing costs	17
2.8. Losses for impairment of non-financial assets	17
2.9. Financial assets	18
2.10. Derivative financial instruments and hedging activities	18
2.11. Inventories	20
2.12. Trade and other accounts receivable	20
2.13. Cash and cash equivalents	20
2.14. Capital	20
2.15. Trade and other accounts payables	20
2.16. Interest-bearing loans	21
2.17. Current and deferred taxes	21
2.18. Employee benefits	21
2.19. Provisions	22
2.20. Revenue recognition	22
2.21. Leases	23
2.22. Non-current assets (or disposal groups) classified as held for sale	25
2.23. Maintenance	25
2.24. Environmental costs	25
3 - Financial risk management	25
3.1. Financial risk factors	25
3.2. Capital risk management	39
3.3. Estimates of fair value	39
4 - Accounting estimates and judgments	42
5 - Segmental information	45
6 - Cash and cash equivalents	48
7 - Financial instruments	50
7.1. Financial instruments by category	50
7.2. Financial instruments by currency	52
8 - Trade, other accounts receivable and non-current accounts receivable	53
9 - Accounts receivable from/payable to related entities	56
10 - Inventories	57
11 - Other financial assets	58
12 - Other non-financial assets	59
13 - Non-current assets and disposal group classified as held for sale	60
14 - Investments in subsidiaries	61

15 - Intangible assets other than goodwill	64
16 - Goodwill	65
17 - Property, plant and equipment	67
18 - Current and deferred tax	72
19 - Other financial liabilities	77
20 - Trade and other accounts payables	86
21 - Other provisions	88
22 - Other non financial liabilities	90
23 - Employee benefits	92
24 - Accounts payable, non-current	94
25 - Equity	94
26 - Revenue	99
27 - Costs and expenses by nature	100
28 - Other income, by function	101
29 - Foreign currency and exchange rate differences	102
30 - Earnings per share	110
31 - Contingencies	111
32 - Commitments	124
33 - Transactions with related parties	126
34 - Share based payments	127
35 - Statement of cash flows	130
36 - The environment	132
37 - Events subsequent to the date of the financial statements	133

LATAM AIRLINES GROUP S.A. AND SUBSIDIARIES

INTERIM CONSOLIDATED STATEMENT OF FINANCIAL POSITION

ASSETS
			As of		As of		As of
			March 31,		December 31,		January 1,
	Note		2019		2018		2018
			ThUS$		ThUS$		ThUS$
			Unaudited		Restated		Restated
					Unaudited		Unaudited

Cash and cash equivalents
Cash and cash equivalents		6 - 7		1,124,326		1,081,642		1,142,004
Other financial assets		7 - 11		486,401		383,984		559,919
Other non-financial assets		12		259,085		290,476		244,778
Trade and other accounts receivable		7 - 8		1,125,376		1,162,582		1,202,945
Accounts receivable from related entities		7 - 9		6,549		2,931		2,582
Inventories		10		301,659		279,344		236,666
Current tax assets		18		64,013		69,134		77,987

Total current assets other than non-current assets (or disposal groups) classified as held for sale or as held for distribution to owners				3,367,409		3,270,093		3,466,881

Non-current assets (or disposal groups) classified as held for sale or as held for distribution to owners		13		2,006		5,768		291,103

Total current assets				3,369,415		3,275,861		3,757,984

Non-current assets
Other financial assets		7 - 11		57,210		58,700		88,090
Other non-financial assets		12		238,034		227,541		212,203
Accounts receivable		7 - 8		5,348		5,381		6,891
Intangible assets other than goodwill		15		1,434,324		1,441,072		1,617,247
Goodwill		16		2,283,269		2,294,072		2,672,550
Property, plant and equipment		17		12,565,500		12,501,809		12,930,652
Current tax assets		18		757		757		17,532
Deferred tax assets		18		271,650		273,529		370,564
Total non-current assets				16,856,092		16,802,861		17,915,729
Total assets				20,225,507		20,078,722		21,673,713

The accompanying Notes 1 to 37 form an integral part of these interim consolidated financial statements.

LATAM AIRLINES GROUP S.A. AND SUBSIDIARIES

INTERIM CONSOLIDATED STATEMENT OF FINANCIAL POSITION

LIABILITIES AND EQUITY
			As of			As of			As of
			March 31,			December 31,			January 1,
LIABILITIES	Note		2019			2018			2018
			ThUS$			ThUS$			ThUS$
			Unaudited			Restated			Restated
						Unaudited			Unaudited

Current liabilities

Other financial liabilities		7 - 19		1,790,900			1,794,286			1,619,979
Trade and other accounts payables		7 - 20		1,704,729			1,674,303			1,668,612
Accounts payable to related entities		7 - 9		2,569			382			760
Other provisions		21		5,210			4,794			2,783
Current tax liabilities		18		3,699			3,738			3,511
Other non-financial liabilities		22		2,293,634			2,454,746			2,901,603
Total current liabilities other than non-current liabilities (or disposal groups) classified as held for sale				5,800,741			5,932,249			6,197,248
Liabilities included in disposal groups classified as held for sale		13		-			-			15,546
Total current liabilities				5,800,741			5,932,249			6,212,794

Non-current liabilities
Other financial liabilities		7 - 19		8,790,470			8,359,462			9,433,450
Accounts payable		7 - 24		462,785			529,277			559,443
Other provisions		21		312,641			303,495			374,593
Deferred tax liabilities		18		778,951			786,571			877,748
Employee benefits		23		89,416			82,365			101,087
Other non-financial liabilities		22		628,236			644,702			158,305
Total non-current liabilities				11,062,499			10,705,872			11,504,626
Total liabilities				16,863,240			16,638,121			17,717,420

EQUITY
Share capital		25		3,146,265			3,146,265			3,146,265
Retained earnings		25		158,897			218,971			(41,012	)
Treasury Shares		25		(178	)		(178	)		(178	)
Other reserves				(36,890	)		(4,365	)		760,761
Parent's ownership interest				3,268,094			3,360,693			3,865,836
Non-controlling interest		14		94,173			79,908			90,457
Total equity				3,362,267			3,440,601			3,956,293
Total liabilities and equity				20,225,507			20,078,722			21,673,713

The accompanying Notes 1 to 37 form an integral part of these interim consolidated financial statements.

LATAM AIRLINES GROUP S.A. AND SUBSIDIARIES

INTERIM CONSOLIDATED STATEMENT OF INCOME BY FUNCTION

		For the period ended
		March 31,
	Note	2019			2018
		ThUS$			ThUS$
		Unaudited			Restated
					Unaudited

Revenue	26		2,431,478			2,613,835
Cost of sales			(2,021,555	)		(1,975,978	)
Gross margin			409,923			637,857
Other income	28		93,790			116,701
Distribution costs			(142,860	)		(169,683	)
Administrative expenses			(162,415	)		(202,597	)
Other expenses			(116,314	)		(111,834	)
Other gains/(losses)			(3,985	)		(3,456	)
Income from operation activities			78,139			266,988
Financial income			5,891			12,187
Financial costs	27		(138,446	)		(133,355	)
Foreign exchange gains/(losses)	29		8,949			811
Result of indexation units			1,911			2,434
Income (loss) before taxes			(43,556	)		149,065
Income tax expense / benefit	18		(13,041	)		(43,213	)

NET INCOME (LOSS) FOR THE PERIOD			(56,597	)		105,852
Income (loss) attributable to owners of the parent			(60,074	)		92,169
Income (loss) attributable to non-controlling interest	14		3,477			13,683

Net income (loss) for the year			(56,597	)		105,852

EARNINGS PER SHARE
Basic earnings (losses) per share (US$)	30		(0,09907	)		0,15199
Diluted earnings (losses) per share (US$)	30		(0,09907	)		0,15199

The accompanying Notes 1 to 37 form an integral part of these interim consolidated financial statements.

LATAM AIRLINES GROUP S.A. AND SUBSIDIARIES

INTERIM CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

		For the period ended
		March 31,
	Note	2019			2018
		ThUS$			ThUS$
		Unaudited			Restated
					Unaudited

NET INCOME (LOSS)			(56,597	)		105,852
Components of other comprehensive income that will not be reclassified to income before taxes
Other comprehensive income, before taxes, gains (losses) by new measurements on defined benefit plans	25		(2,395	)		(2,098	)
Total other comprehensive income that will not be reclassified to income before taxes			(2,395	)		(2,098	)
Components of other comprehensive income that will be reclassified to income before taxes
Currency translation differences
Gains (losses) on currency translation, before tax	29		(19,667	)		(23,737	)
Other comprehensive income, before taxes, currency translation differences			(19,667	)		(23,737	)
Cash flow hedges
Gains (losses) on cash flow hedges before taxes	19		26,624			17,119
Other comprehensive income (losses), before taxes, cash flow hedges			26,624			17,119
Total other comprehensive income that will be reclassified to income before taxes			6,957			(6,618	)
Other components of other comprehensive income (loss), before taxes			4,562			(8,716	)
Income tax relating to other comprehensive income that will not be reclassified to income
Income tax relating to new measurements on defined benefit plans	18		656			525
Accumulate income tax relating to other comprehensive income that will not be reclassified to income			656			525
Income tax relating to other comprehensive income that will be reclassified to income
Income tax related to cash flow hedges in other comprehensive income			426			(527	)
Income taxes related to components of other comprehensive income that will be reclassified to income			426			(527	)
Total Other comprehensive income			5,644			(8,718	)
Total comprehensive income (loss)			(50,953	)		97,134
Comprehensive income (loss) attributable to owners of the parent			(92,433	)		84,693
Comprehensive income (loss) attributable to non-controlling interests			41,480			12,441
TOTAL COMPREHENSIVE INCOME (LOSS)			(50,953	)		97,134

The accompanying Notes 1 to 37 form an integral part of these interim consolidated financial statements.

LATAM AIRLINES GROUP S.A. AND SUBSIDIARIES

INTERIM CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

		Attributable to owners of the parent
							Change in other reserves
													Actuarial gains
													or losses on
							Currency			Cash flow			defined benefit			Shares based			Other			Total						Parent's			Non-
		Share		Treasury			translation			hedging			plans			payments			sundry			other			Retained			ownership			controlling			Total
	Note	capital		shares			reserve			reserve			reserve			reserve			reserve			reserve			earnings			interest			interest			equity
		ThUS$		ThUS$			ThUS$			ThUS$			ThUS$			ThUS$			ThUS$			ThUS$			ThUS$			ThUS$			ThUS$			ThUS$

Equity as of January 1, 2019 Restated (Unaudited)			3,146,265		(178	)		(2,656,644	)		(9,333	)		(15,178	)		37,874			2,638,916			(4,365	)		218,971			3,360,693			79,908			3,440,601
Total increase (decrease) in equity
Comprehensive income
Gain (losses)	25		-		-			-			-			-			-			-			-			(60,074	)		(60,074	)		3,477			(56,597	)
Other comprehensive income			-		-			(57,689	)		27,069			(1,739	)		-						(32,359	)		-			(32,359	)		38,003			5,644
Total comprehensive income			-		-			(57,689	)		27,069			(1,739	)		-			-			(32,359	)		(60,074	)		(92,433	)		41,480			(50,953	)
Transactions with shareholders
Dividends	25		-		-			-			-			-			-			-			-			-			-			-			-
Increase (decrease) through transfers and other changes, equity	25-34		-		-			-			-			-			(70	)		(96	)		(166	)		-			(166	)		(27,215	)		(27,381	)
Total transactions with shareholders			-		-			-			-			-			(70	)		(96	)		(166	)		-			(166	)		(27,215	)		(27,381	)
Closing balance as of March 31, 2019 (Unaudited)			3,146,265		(178	)		(2,714,333	)		17,736			(16,917	)		37,804			2,638,820			(36,890	)		158,897			3,268,094			94,173			3,362,267

The accompanying Notes 1 to 37 form an integral part of these interim consolidated financial statements.

LATAM AIRLINES GROUP S.A. AND SUBSIDIARIES

INTERIM CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

		Attributable to owners of the parent
							Change in other reserves
												Actuarial gains
												or losses on
							Currency			Cash flow		defined benefit			Shares based			Other		Total						Parent's			Non-
		Share		Treasury			translation			hedging		plans			payments			sundry		other			Retained			ownership			controlling			Total
	Note	capital		shares			reserve			reserve		reserve			reserve			reserve		reserve			earnings			interest			interest			equity
		ThUS$		ThUS$			ThUS$			ThUS$		ThUS$			ThUS$			ThUS$		ThUS$			ThUS$			ThUS$			ThUS$			ThUS$

Equity as of January 1, 2018			3,146,265		(178	)		(2,131,591	)		18,140		(10,926	)		39,481			2,639,780		554,884			475,118			4,176,089			91,147			4,267,236
Increase (decrease) by application of new accounting standards	2 - 25		-		-			205,877			-		-			-			-		205,877			(516,130	)		(310,253	)		(690	)		(310,943	)
Initial balance Restated (Unaudited)			3,146,265		(178	)		(1,925,714	)		18,140		(10,926	)		39,481			2,639,780		760,761			(41,012	)		3,865,836			90,457			3,956,293
Total increase (decrease) in equity
Comprehensive income
Gain (losses)	25		-		-			-			-		-			-			-		-			92,169			92,169			13,683			105,852
Other comprehensive income			-		-			(22,571	)		16,611		(1,516	)		-			-		(7,476	)		-			(7,476	)		(1,242	)		(8,718	)
Total comprehensive income			-		-			(22,571	)		16,611		(1,516	)		-			-		(7,476	)		92,169			84,693			12,441			97,134
Transactions with shareholders
Dividends	25		-		-			-			-		-			-			-		-			(28,167	)		(28,167	)		-			(28,167	)
Increase (decrease) through transfers and other changes, equity	25-34		-		-			-			-		-			(1,938	)		5,783		3,845			-			3,845			(10,514	)		(6,669	)
Total transactions with shareholders			-		-			-			-		-			(1,938	)		5,783		3,845			(28,167	)		(24,322	)		(10,514	)		(34,836	)
Closing balance as of March 31, 2018 Restated (Unaudited)			3,146,265		(178	)		(1,948,285	)		34,751		(12,442	)		37,543			2,645,563		757,130			22,990			3,926,207			92,384			4,018,591

The accompanying Notes 1 to 37 form an integral part of these interim consolidated financial statements.

LATAM AIRLINES GROUP S.A. AND SUBSIDIARIES

INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS DIRECT – METHOD

		For the period ended
		March 31,
	Note	2019			2018
		ThUS$			ThUS$
					Restated
		Unaudited			Unaudited

Cash flows from operating activities
Cash collection from operating activities
Proceeds from sales of goods and services			2,536,205			2,698,081
Other cash receipts from operating activities			27,027			25,539
Payments for operating activities
Payments to suppliers for goods and services			(1,739,695	)		(1,605,394	)
Payments to and on behalf of employees			(504,940	)		(559,714	)
Other payments for operating activities			(51,345	)		(76,643	)
Income taxes refunded (paid)			(12,719	)		(11,796	)
Other cash inflows (outflows)	35		(27,988	)		(6,322	)
Net cash flows from operating activities			226,545			463,751
Other cash receipts from sales of equity or debt instruments of other entities			728,847			903,496
Other payments to acquire equity or debt instruments of other entities			(824,446	)		(1,083,699	)
Amounts raised from sale of property, plant and equipment			274			107,129
Purchases of property, plant and equipment			(181,826	)		(178,566	)
Purchases of intangible assets			(18,504	)		(19,911	)
Interest received			7,730			3,790
Other cash inflows (outflows)	35		(597	)		11,731
Net cash flow from (used in) investing activities			(288,522	)		(256,030	)
Cash flows from (used in) financing activities	35
Amounts raised from long-term loans			594,354			5,004
Amounts raised from short-term loans			-			80,000
Loans repayments			(306,081	)		(384,985	)
Payments of lease liabilities			(94,136	)		(91,416	)
Dividends paid			-			(9,716	)
Interest paid			(100,919	)		(107,005	)
Other cash inflows (outflows)			27,246			(2,449	)
Net cash flows from (used in) financing activities			120,464			(510,567	)
Net increase (decrease) in cash and cash equivalents before effect of exchanges rate change			58,487			(302,846	)
Effects of variation in the exchange rate on cash and cash equivalents			(15,803	)		(24,928	)
Net increase (decrease) in cash and cash equivalents			42,684			(327,774	)
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF PERIOD	6		1,081,642			1,142,004
CASH AND CASH EQUIVALENTS AT THE END OF PERIOD	6		1,124,326			814,230

The accompanying Notes 1 to 37 form an integral part of these interim consolidated financial statements.

LATAM AIRLINES GROUP S.A. AND SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF MARCH 31, 2019 (UNAUDITED)

NOTE 1 - GENERAL INFORMATION

LATAM Airlines Group S.A. (the "Company") is a public limited company registered with the Commission for the Financial Market under No. 306, whose shares are listed in Chile on the Electronic Stock Exchange of Chile - Stock Exchange and the Santiago Stock Exchange - Stock Exchange, besides being listed in the United States of America on the New York Stock Exchange ("NYSE"), in the form of American Depositary Receipts ("ADRs").

Its main business is the air transport of passengers and cargo, both in the domestic markets of Chile, Peru, Argentina, Colombia, Ecuador and Brazil, as well as in a series of regional and international routes in America, Europe and Oceania. These businesses are developed directly or by its subsidiaries in Ecuador, Peru, Brazil, Colombia, Argentina and Paraguay different countries. In addition, the Company has subsidiaries that operate in the cargo business in Chile, Brazil and Colombia.

The Company is located in Chile, in the city of Santiago, on Avenida Americo Vespucio Sur No. 901, Renca commune.

As of March 31, 2019 the statutory capital of the Company is represented by 606,874,525 shares, all ordinary, without par value, which is divided into: (a) 606,407,693 subscribed and paid shares; and (b) 466,832 shares pending subscription and payment, which correspond to the balance of shares pending placement of the last capital increase approved at the extraordinary shareholders meeting of August 18, 2016.

The controller of the Company is the Cueto Group, which through the companies Costa Verde Aeronáutica S.A., Costa Verde Aeronáutica SpA, Costa Verde Aeronáutica Tres SpA, Inversiones Nueva Costa Verde Aeronáutica Ltda., Inversiones Priesca Dos y Cía. Ltda., Inversiones Caravia Dos y Cía. Ltda., Inversiones El Fano Dos y Cía. Ltda., Inversiones La Espasa Dos S.A. and Inversiones La Espasa Dos y Cía. Ltda., Owns 27.91% of the shares issued by the Company, so it is the controller of the Company in accordance with the provisions of letter b) of Article 97 and Article 99 of the Market Law of Values, taken care of that it influences decisively in the administration of this one.

As of March 31, 2019, the Company had a total of 1,429 shareholders in its registry. At that date, approximately 2.55% of the Company's property was in the form of ADRs.

For the period ended March 31, 2019, the company had an average of 40,925 employees, ending this period with a total number of 40,746 people, distributed in 6,470 Administration employees, 4,955 in Maintenance, 12,945 in Operations, 9,216 Cabin Crew , 4,217 Cockpit Crew and 2,943 in Sales.

The main subsidiaries included in these consolidated financial statements are as follows:

Participation rate

				As March 31, 2019						As December 31, 2018
		Country	Functional
Tax No.	Company	of origin	Currency	Direct		Indirect		Total		Direct		Indirect		Total
				%		%		%		%		%		%
				Unaudited
96.518.860-6	Latam Travel Chile S.A. and Subsidiary	Chile	US$		99.9900		0.0100		100.0000		99.9900		0.0100		100.0000
96.969.680-0	Lan Pax Group S.A. and Subsidiaries	Chile	US$		99.8361		0.1639		100.0000		99.8361		0.1639		100.0000
Foreign	Lan Perú S.A.	Peru	US$		49.0000		21.0000		70.0000		49.0000		21.0000		70.0000
93.383.000-4	Lan Cargo S.A.	Chile	US$		99.8939		0.0041		99.8980		99.8939		0.0041		99.8980
Foreign	Connecta Corporation	U.S.A.	US$		0.0000		100.0000		100.0000		0.0000		100.0000		100.0000
Foreign	Prime Airport Services Inc. and Subsidiary	U.S.A.	US$		0.0000		100.0000		100.0000		0.0000		100.0000		100.0000
96.951.280-7	Transporte Aéreo S.A.	Chile	US$		0.0000		100.0000		100.0000		0.0000		100.0000		100.0000
96.631.520-2	Fast Air Almacenes de Carga S.A.	Chile	CLP		0.0000		100.0000		100.0000		0.0000		100.0000		100.0000
Foreign	Laser Cargo S.R.L.	Argentina	ARS		0.0000		100.0000		100.0000		0.0000		100.0000		100.0000
Foreign	Lan Cargo Overseas Limited and Subsidiaries	Bahamas	US$		0.0000		100.0000		100.0000		0.0000		100.0000		100.0000
96.969.690-8	Lan Cargo Inversiones S.A. and Subsidiary	Chile	US$		0.0000		100.0000		100.0000		0.0000		100.0000		100.0000
96.575.810-0	Inversiones Lan S.A. and Subsidiaries	Chile	US$		99.7100		0.2900		100.0000		99.7100		0.2900		100.0000
96.847.880-K	Technical Training LATAM S.A.	Chile	CLP		99.8300		0.1700		100.0000		99.8300		0.1700		100.0000
Foreign	Latam Finance Limited	Cayman Insland	US$		100.0000		0.0000		100.0000		100.0000		0.0000		100.0000
Foreign	Peuco Finance Limited	Cayman Insland	US$		100.0000		0.0000		100.0000		100.0000		0.0000		100.0000
Foreign	Professional Airline Services INC.	U.S.A.	US$		100.0000		0.0000		100.0000		100.0000		0.0000		100.0000
Foreign	Jarletul S.A.	Uruguay	US$		99.0000		1.0000		100.0000		99.0000		1.0000		100.0000
Foreign	TAM S.A. and Subsidiaries (*)	Brazil	BRL		63.0901		36.9099		100.0000		63.0901		36.9099		100.0000

(*) As of March 31, 2019, the indirect participation percentage over TAM S.A. and Subsidiaries comes from Holdco I S.A., a company over which LATAM Airlines Group S.A. it has a 99.9983% share on economic rights and 51.04% of political rights its percentage arise as a result of the provisional measure No. 863 of the Brazilian government implemented in December 2018 that allows foreign capital to have up to 100% of the property.

Financial Information

		Statement of financial position															Net Income
																	For the period ended
		As of March 31, 2019								As of December 31, 2018							March 31,
																	2019			2018
Tax No.	Company	Assets			Liabilities		Equity			Assets		Liabilities		Equity			Gain /(loss)
		ThUS$			ThUS$		ThUS$			ThUS$		ThUS$		ThUS$			ThUS$			ThUS$
										Restated							Restated
		Unaudited								Unaudited							Unaudited
96.518.860-6	Latam Travel Chile S.A. and Subsidary		11,391			4,232		7,159			10,841		3,909		6,932			227			708
96.969.680-0	Lan Pax Group S.A. and Subsidiaries (*)		485,156			1,268,326		(797,728	)		526,017		1,281,800		(751,960	)		1,943			(22,059	)
Foreign	Lan Perú S.A.		348,683			347,032		1,651			419,325		409,221		10,104			(6,664	)		11,806
93.383.000-4	Lan Cargo S.A.		654,634			476,696		177,938			513,367		336,715		176,652			1,341			(118	)
Foreign	Connecta Corporation		73,080			26,170		46,910			66,593		28,183		38,410			8,500			2,131
Foreign	Prime Airport Services Inc. and Subsidary (*)		17,881			20,325		(2,444	)		15,817		17,654		(1,837	)		(608	)		183
96.951.280-7	Transporte Aéreo S.A.		352,229			148,121		204,108			331,496		129,233		202,263			1,903			6,044
96.631.520-2	Fast Air Almacenes de Carga S.A.		17,694			10,293		7,401			17,057		9,614		7,443			(248	)		(81	)
Foreign	Laser Cargo S.R.L.		(13	)		-		(13	)		26		13		13			-			-
Foreign	Lan Cargo Overseas Limited and Subsidiaries (*)		58,737			21,852		36,629			53,326		13,040		40,028			(3,400	)		3,191
96.969.690-8	Lan Cargo Inversiones S.A. and Subsidary (*)		191,987			208,211		(14,459	)		181,522		192,059		(9,614	)		(4,845	)		490
96.575.810-0	Inversiones Lan S.A. and Subsidiaries (*)		1,397			51		1,346			1,383		50		1,333			13			837
96.847.880-K	Technical Trainning LATAM S.A.		3,002			1,462		1,540			2,879		1,031		1,848			(192	)		(384	)
Foreign	Latam Finance Limited		1,225,973			1,320,857		(94,884	)		679,034		756,774		(77,740	)		(17,144	)		(11,893	)
Foreign	Peuco Finance Limited		664,458			664,458		-			608,191		608,191		-			-			-
Foreign	Profesional Airline Services INC.		1,633			6,114		(4,481	)		2,430		1,967		463			(4,944	)		56
Foreign	Jarletul S.A.		214			306		(92	)		18		125		(107	)		(92	)		-
Foreign	TAM S.A. and Subsidiaries (*)		4,370,696			3,283,500		1,012,585			4,420,546		3,256,017		1,095,695			(98,911	)		69,601

(*)

The Equity reported corresponds to Equity attributable to owners of the parent, it does not include Non-controlling interest.

Additionally, we have proceeded to consolidate the following special purpose entities: 1. Chercán Leasing Limited created to finance the pre-delivery payments on aircraft; 2. Guanay Finance Limited created to issue a bond collateralized with future credit card receivables; 3. Private investment funds. These companies have been consolidated as required by IFRS 10.

All controlled entities have been included in the consolidation.

The changes that occurred in the consolidation perimeter between January 1, 2018 and March 31, 2019, are detailed below:

(1)

Incorporation or acquisition of companies

On January 22, 2018, Lan Pax Group S.A., purchased 17,717 shares of Laser Cargo SRL. to Andes Airport Service S.A., consequently Lan Pax Group S.A. ownership is 3.77922% and Lan Cargo S.A. with a 96.22078% share of Laser Cargo SRL.

On March 13, 2018, the company Jarletul S.A., was create. The company ownership is 99% of LATAM Airlines Group S.A. and a 1% is from Inversiones Lan S. A.. The company main activity is a Travel Agency.

As of December 31, 2018, Inversiones LAN S.A., subsidiary of LATAM Airlines Group S.A., acquired 5,319 shares of Aerovías de Integración Regional Aires S.A. a non-controlling shareholder, consequently, the indirect participation of LATAM Airlines Group S.A. correspond to 99.2012%

(2)

Disposition of companies.

On May 7, 2018 LATAM Airlines Group S.A. and its subsidiaries Inversiones LAN S.A. and LAN Pax Group S.A., sold, assigned and transferred to the Spanish companies Acciona Airport Services, S.A. and Acciona Aeropuertos, S.L., 100% of its shares in the subsidiary Andes Airport Services S.A.

The sale value of Andes Airport Services S.A. it was ThUS$ 39,108

On November 30, 2018, Mas Investment Limited, a subsidiary of LATAM Airlines Group S.A., sold to Puente Aéreo Corporación S.A. de C.V. his participation in the companies Air Transportes Mas de Carga S.A. de C.V. and Promotora Aérea Latino Americana S.A. de C.V.

The sale value of this transaction was ThUS$ 29,466.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The following describes the principal accounting policies adopted in the preparation of these consolidated financial statements.

2.1.

Basis of Preparation

The consolidated financial statements of LATAM Airlines Group S.A. for the period ended March 31, 2019 have been prepared in accordance with IAS 34 Interim Financial Reporting.

The consolidated financial statements have been prepared under the historic-cost criterion, although modified by the valuation at fair value of certain financial instruments.

The preparation of the consolidated financial statements in accordance with IFRS requires the use of certain critical accounting estimates. It also requires management to use its judgment in applying the Company’s accounting policies. Note 4 shows the areas that imply a greater degree of judgment or complexity or the areas where the assumptions and estimates are significant to the consolidated financial statements.

The consolidated interim financial statements have been prepared in accordance with the accounting policies used by the Company for the consolidated financial statements 2018, except for the standards and interpretations adopted as of January 1, 2019.

(a) Accounting pronouncements with implementation effective from January 1, 2019:

	Date of issue	Effective Date:
(i) Rules and amendments

IFRS 16: Leases.	january 2016	01/01/2019

Amendment to IFRS 9: Financial instruments	october 2017	01/01/2019

Amendment to IAS 28: Investments in associates and joint ventures	october 2017	01/01/2019

Amendment to IAS 19: Benefits to employees	february 2018	01/01/2019

(ii) Improvements

Improvements to International Financial Reporting Standards (cycle 2015-2017) IFRS 3: Business combination; IAS 12: Income tax; IFRS 11: Joint agreements and IAS 23 Costs for loans.	december 2017	01/01/2019

(iii) Interpretations

IFRIC 23: Uncertain tax positions	june 2017	01/01/2019

During the reporting period, the Company has recognized the changes, in the consolidated financial statements, as a result of the adoption of IFRS 16 retrospectively; restating the comparative figures, in accordance with the provisions of IAS 8 Accounting policies, changes in accounting estimates and errors.

The Company has modified the initial balances corresponding to January 1, 2018. The disclosures corresponding to the initial application of IFRS 9 and IFRS 15, which also originated changes, have been maintained in the consolidated financial statements.

The impacts of the adoption of IFRS 9 Financial Instruments, IFRS 15 Revenue from contracts with customers and IFRS 16 Leases are as follows:

Consolidated statement of financial position (extract)

a) As of January 1, 2018:

		As of		Adoption						As of		Adoption			As of
		December 31,		effect						January 1		effect			January 1,
	Note	2017		IFRS 9			IFRS 15			2018		IFRS 16			2018
		ThUS$		THUS$			ThUS$			ThUS$		ThUS$			ThUS$
				Unaudited			Unaudited			Unaudited		Unaudited			Restated
															Unaudited
Current assets
Other non-financial assets, current	12		221,188		-			54,361	(4)		275,549		(30,772	)(9)		244,777
Trade debtors and other accounts receivable, current	7 - 8		1,214,050		(11,105	)(1)		-			1,202,945		-			1,202,945

Non-current assets
Other non-financial assets, non current	12		220,807		-			-			220,807		(8,603	)(9)		212,204
Properties, plants and equipment	17		10,065,335		-			-			10,065,335		2,865,317	(9)		12,930,652
Deferred tax assets	18		364,021		89	(2)		6,005	(7)		370,115		449	(10)		370,564

Current liabilities
Other current financial liabilities	7 - 19		1,300,949		-			-			1,300,949		319,030	(11)		1,619,979
Trade and other accounts payables	7 - 20		1,695,202		-			(22,192	)(5)		1,673,010		(4,398	)(9)		1,668,612
Other non-financial liabilities, current	22		2,823,963		-			77,640	(6)		2,901,603		-			2,901,603

Non-current liabilities
Other non current financial liabilities	7-19		6,605,508		-			-			6,605,508		2,827,942	(11)		9,433,450
Accounts payable commercial and other	7 - 24		498,832		-			-			498,832		60,611	(9)		559,443
Deferred tax liability	18		949,697		(1,021	)(2)		4,472	(5)		953,148		(75,400	)(10)		877,748

Equity
Equity attributable to the owners of the parent
Accumulated earnings	25		475,118		(9,995	)(3)		446	(8)		465,569		(506,581	)(12)		(41,012	)
Other reserves	25		554,885		-			-			554,885		205,877	(12)		760,762
Non-controlling interest	14		91,147		-			-			91,147		(690	)(12)		90,457

b) As of December 31, 2018:

		As of			Adoption			As of
		December 31,			effect			December 31,
	Note	2018			IFRS 16			2018
		ThUS$			ThUS$			ThUS$
					Unaudited			Restated
								Unaudited
Current assets
Other non-financial assets, current	12		320,977			(30,501	)(9)		290,476

Non-current assets
Other non-financial assets, non current	12		233,741			(6,200	)(9)		227,541
Properties, plants and equipment	17		9,953,365			2,548,444	(9)		12,501,809
Deferred tax assets	18		273,327			201	(10)		273,528

Current liabilities
Other current financial liabilities	7 - 19		1,430,789			363,497	(11)		1,794,286

Non-current liabilities
Other non current financial liabilities	7-19		5,864,910			2,494,552	(11)		8,359,462
Accounts payable commercial and other	7 - 24		483,656			45,621	(10)		529,277
Deferred tax liability	18		872,121			(85,550	)(9)		786,571

Equity
Equity attributable to the owners of the parent
Accumulated earnings	25		597,675			(378,705	)(12)		218,970
Other reserves	25		(76,926	)		72,561	(12)		(4,365	)
Non-controlling interest	14		79,940			(32	)(12)		79,908

- Effects of adopting IFRS 9

(1)

Expected credit losses: The Company modified the calculation of the impairment provision to comply with the expected credit loss model, established in IFRS 9 Financial Instruments, which replaces the current loss impairment model incurred. To the calculate percentage of credit losses, a risk matrix was used, grouping the portfolio, according to similar characteristics of risk and maturity. This change resulted in the recognition of an increase in the provision for impairment losses of US $ (11.1) million.

This standard also includes requirements related to the classification and measurement of financial assets and liabilities and an expected credit loss model that replaces the current loss impairment model incurred.

As of January 1, 2018, the calculation of the impairment losses provision are as follows:

	Portfolio maturity
							Up to			Up to			More than
				Up to			91 to			181 to			360
	Up to date			90 days			180 days			360 days			days			Total
	ThUS$			ThUS$			ThUS$			ThUS$			ThUS$			ThUS$

Expected loss rate		1	%		21	%		46	%		67	%		94	%		8	%
Gross book value		1,046,909			36,241			12,001			14,623			66,022			1,175,796
Impairment provision		(13,570	)		(7,774	)		(5,499	)		(9,803	)		(61,787	)		(98,433	)

(2) Deferred tax adjustments originated by the application of IFRS 9.

(3) Net effect on accumulated results of the adjustments indicated above.

In addition to the impacts on the consolidated statement of financial position, the application of IFRS 9: Financial Instruments requires the classification of financial instruments according to the business model, to determine the form of measurement of financial instruments, after their initial recognition.

The Company analyzed the business models and classified its financial assets and liabilities according to the following:

	Classification IAS 39											Classification IFRS 9
									Initial
Assets	Loans			Hedge		Held			as fair value					At fair value
	and			and		for			through profit			Cost		with changes
	receivables			derivatives		trading			and loss			amortized		in results		Total
	ThUS$			ThUS$		ThUS$			ThUS$			ThUS$		ThUS$		ThUS$

Balance as of December 31, 2017		2,446,864			62,867		1,915			501,890			-		-		3,013,536

Cash and cash equivalents		(1,112,346	)		-		-			(29,658	)		1,112,346		29,658		-
Other financial assets, current		(23,918	)		-		(1,421	)		(472,232	)		23,918		473,653		-
Trade debtors and other accounts receivable, current		(1,214,050	)		-		-			-			1,214,050		-		-
Accounts receivable from entities related, current		(2,582	)		-		-			-			2,582		-		-
Other financial assets, non-current		(87,077	)		-		(494	)		-			87,077		494		-
Accounts receivable, non-current		(6,891	)		-		-			-			6,891		-		-

Balance as of January 1, 2018		-			62,867		-			-			2,446,864		503,805		3,013,536

	Classification IAS 39					Classification IFRS 9
Liabilities	Others			Held
	financial			hedge		Cost
	liabilities			derivatives		amortized		Total
	ThUS$			ThUS$		ThUS$		ThUS$

Balance as of December 31, 2017		10,086,434			14,817		-		10,101,251

Other current financial liabilities		(1,288,749	)		-		1,288,749		-
Trade accounts payable and other accounts payable, current		(1,695,202	)		-		1,695,202		-
Accounts payable to related entities, current		(760	)		-		760		-
Other financial liabilities, not current		(6,602,891	)		-		6,602,891		-
Accounts payable, not current		(498,832	)		-		498,832		-
Balance as of January 1, 2018 (*)		-			14,817		10,086,434		10,101,251

(*) Balances as of January 1, 2018 do not contain the re-expression effects originated by IFRS 16.

- Effects of adopting IFRS 15

(4) Contract costs: The Company has capitalized the costs related to the revenues from air transport of passengers, corresponding to: the commissions charged by the credit card administrators for US$ 22.0 million and the air ticket booking services through the system general distribution (GDS) for US$ 15.6 million. Additionally, there is a reclassification of commissions from travel agencies for US$ 16.8 million, which previously were presented, according IAS 18, net of the liability to fly in other non-financial liabilities.

(5) Contract liabilities: The Company has adjusted certain concepts that were recorded as obligations with suppliers and customers, which must now be treated as contract liabilities; therefore they must be deferred until the benefit of the service have been rendered. These concepts are mainly related to the ground transportation service for US $ 15.6 million and traveler's checks for US $ 6.6 million.

(6) Performance Obligations: The Company analyzed the moment in which the performance obligations identified in the contracts with customers must be recognized in the consolidated result. During this analysis, some concepts were identified which must be deferred until the moment of service provision, mainly related to land transportation services, charges for modifications to the initial contract in the sale of tickets and redeem of some products associated with loyalty programs for US$ 60.8 million. Additionally, there is the reclassification detailed in numeral (4) for US$ 16.8 million.

(7) Deferred tax adjustments originated by the application of IFRS 15.

(8) Net effect on accumulated results of the adjustments indicated above.

Additionally, the Company concluded that, in the rendering of certain services, it acted as agent in the provision of these services, therefore some reclassifications were made in the consolidated income statement to reflect the corresponding commission.

(9) Company recognized under Property, plant and equipment right of use assets for US $ 2,865.3 million as of January 1, 2018 and US $ 2,548.4 as of December 31, 2018, associated with contracts that meet the definition of lease (note 2.21 & 17).

The Company decrease other financial assets related to advance payments for leases for US $ 39.4 million as of January 1, 2018 and US $ 36.7 as of December 31, 2018, since with the application of the standard these amounts are considered in the initial measurement of the right of use asset.

The Company increased the cost of restoration associated with the return of aircraft and engines for US $ 56.2 million as of January 1, 2018 and US $ 45.6 million as of December 31, 2018. With the application of the standard, the net present value of this cost was included in the asset for right of use and its counterpart in the line of accounts payable, current or non-current, depending on the return date of the aircraft or engines.

(10) Deferred taxes: adjustments originated by the application of IFRS 16.

(11) Lease liabilities: The Company recognized within the Other financial liabilities for lease for US $ 3,147.0 million as of January 1, 2018 and US $ 2,858.0 million as of December 31, 2018, associated with contracts that meet the definition of lease (note 2.21 & 19).

(12) The effect of the recognition of the leases under IFRS 16 generated a decrease in retained earnings of US $ 506.6 million as of January 1, 2018 (US $ 378.7 million as of December 31, 2018). The increase in Other reserves of US $ 205.9 millions as of January 1, 2018 ( decrease of US $72,5 millions as of December 31, 2018), was caused by the Cumulative translation adjustment of those subsidiaries with functional currencies other than the US dollar. The application of IFRS 16 also affected non-controlling interests.

The effects of the changes recognized in the application of IFRS 15 and IFRS 16 as of March 31, 2018 are presented in the consolidated income statement:

		For the period ended March 31, 2018
Reconciliation Revenue											Adjustments for reconciliation

		Results			Adoption			Results						Deferred						Results
		under			Effect			under			Contract			revenues						under
	Nota	IFRS 15			IFRS16			IFRS 15			costs (4 )			recognition [(5), (6 )]			Reclassifications			IAS 18
		ThUS$			ThUS$			ThUS$			ThUS$			ThUS$			ThUS$			ThUS$
		Published						Restated
		Restated						IFRS 16
											Unaudited

Revenue	26		2,613,835			-			2,613,835			-			30,273			4,830			2,648,938
Cost of sales			(2,019,583	)		43,605			(1,975,978	)		-			(10,732)						(1,986,710	)
Gross margin			594,252			43,605			637,857			-			19,541			4,830			662,228

Other income	28		116,701			-			116,701			-			-			18,774			135,475
Distribution costs			(170,635	)		952			(169,683)			964			-			(4,698	)		(173,417	)
Administrative expenses			(199,015	)		(3,582	)		(202,597	)		3,381			-			(18,906	)		(218,122)
Other expenses			(112,767	)		933			(111,834	)		-			-			-			(111,834	)
Other gains (losses)			(3,456	)		-			(3,456	)		-			-			-			(3,456	)
Income from operation activities			225,080			41,908			266,988			4,345			19,541			-			290,874

Financial income			12,187			-			12,187			-			-			-			12,187
Financial costs	27		(86,217	)		(47,138	)		(133,355	)		-			-			-			(133,355	)
Foreign exchange gains (losses)	29		811			-			811			-			-			-			811
Result of indexation units			2,434			-			2,434			-			-			-			2,434
Income (loss) before taxes			154,295			(5,230)			149,065			4,345			19,541			-			172,951
Income (loss) tax expense / benefit	18		(46,723	)		3,510			(43,213	)		(1,240	)		(6,007	)		-			(50,460	)
NET INCOME (LOSS) FOR THE PERIOD			107,572			(1,720)			105,852			3,105			13,534			-			122,491

Income (loss) attributable to owners of the parent			93,889			(1,720)			92,169			3,105			13,534			-			108,808
Income (loss) attributable to non- controlling interest	14		13,683			-			13,683			-			-			-			13,683
Net income (loss) for the period			107,572			(1,720)			105,852			3,105			13,534			-			122,491

In the income statement, with the implementation of the IFRS16 standard, restated were made in the following lines:

Cost of sale, distribution costs, administrative expenses: net effect of derecognized of rental cost and recognition of the depreciation of the right of use.

Financial Costs: interest expense corresponding to the lease liability.

(b) Accounting pronouncements not yet in force for financial years beginning on January 1, 2019 and which has not been effected early adoption

(i) Rules and amendments	Date of issue	Effective Date

IFRS 17: Insurance contracts	May 2017	January 1, 2021

Amendment to IFRS 10: Consolidated financial statements and IAS 28 Investments in associates and joint ventures.	September 2014	To be determined

Amendment to IFRS 3: Business combination	October 2018	January 1, 2020

Amendment to IAS 1: Presentation of financial statements and IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors	October 2018	January 1, 2020

The Company's management believes that the adoption of the standards, amendments and interpretations described above will not have a significant impact on the consolidated financial statements of the Company in the exercise of its first application.

2.2.

Basis of Consolidation

(a)

Subsidiaries

Subsidiaries are all the entities (including special-purpose entities) over which the Company has the power to control the financial and operating policies, which are generally accompanied by a holding of more than half of the voting rights. In evaluating whether the Company controls another entity, the existence and effect of potential voting rights that are currently exercisable or convertible at the date of the consolidated financial statements are considered. The subsidiaries are consolidated from the date on which control is passed to the Company and they are excluded from the consolidation on the date they cease to be so controlled. The results and flows are incorporated from the date of acquisition.

Balances, transactions and unrealized gains on transactions between the Company’s entities are eliminated. Unrealized losses are also eliminated unless the transaction provides evidence of an impairment loss of the asset transferred. When necessary in order to ensure uniformity with the policies adopted by the Company, the accounting policies of the subsidiaries are modified.

To account for and identify the financial information revealed when carrying out a business combination, such as the acquisition of an entity by the Company, is apply the acquisition method provided for in IFRS 3: Business combination.

(b)

Transactions with non-controlling interests

The Group applies the policy of considering transactions with non-controlling interests, when not related to loss of control, as equity transactions without an effect on income.

(c)

Sales of subsidiaries

When a subsidiary is sold and a percentage of participation is not retained, the Company derecognizes assets and liabilities of the subsidiary, the non-controlling and other components of equity related to the subsidiary. Any gain or loss resulting from the loss of control is recognized in the consolidated income statement in Other gains (losses).

If LATAM Airlines Group S.A. and Subsidiaries retain an ownership of participation in the sold subsidiary, and does not represent control, this is recognized at fair value on the date that control is lost, the amounts previously recognized in Other comprehensive income are accounted as if the Company had disposed directly from the assets and related liabilities, which can cause these amounts are reclassified to profit or loss. The percentage retained valued at fair value is subsequently accounted using the equity method.

(d)

Investees or associates

Investees or associates are all entities over which LATAM Airlines Group S.A. and Subsidiaries have significant influence but have no control. This usually arises from holding between 20% and 50% of the voting rights. Investments in associates are booked using the equity method and are initially recognized at their cost.

2.3.

Foreign currency transactions

(a)

Presentation and functional currencies

The items included in the financial statements of each of the entities of LATAM Airlines Group S.A. and Subsidiaries are valued using the currency of the main economic environment in which the entity operates (the functional currency). The functional currency of LATAM Airlines Group S.A. is the United States dollar which is also the presentation currency of the consolidated financial statements of LATAM Airlines Group S.A. and Subsidiaries.

(b)

Transactions and balances

Foreign currency transactions are translated to the functional currency using the exchange rates on the transaction dates. Foreign currency gains and losses resulting from the liquidation of these transactions and from the translation at the closing exchange rates of the monetary assets and liabilities denominated in foreign currency are shown in the consolidated statement of income by function except when deferred in Other comprehensive income as qualifying cash flow hedges.

(c)

Adjustment due to hyperinflation

After July 1, 2018, the Argentine economy was considered, for purposes of IFRS, hyperinflationary. The financial statements of the subsidiaries whose functional currency is the Argentine Peso have been restated.

The non-monetary items of the statement of financial position as well as the income statement, comprehensive incomes and cash flows of the group's entities, whose functional currency corresponds to a hyperinflationary economy, are adjusted for inflation and re-expressed in accordance with the variation of the consumer price index ("CPI"), at each presentation date of its financial statements. The re-expression of non-monetary items is made from the date of initial recognition in the statements of financial position and considering that the financial statements are prepared under the historical cost criterion.

Net losses or gains arising from the re-expression of non-monetary items and income and costs are recognized in the consolidated income statement under "Result of indexation units".

Net gains and losses on the re-expression of opening balances due to the initial application of IAS 29 are recognized in the consolidated retained earnings.

Re-expression due to hyperinflation will be recorded until the period in which the economy of the entity ceases to be considered as a hyperinflationary economy, at that time, the adjustments made by hyperinflation will be part of the cost of non-monetary assets and liabilities.

The comparative amounts in the Consolidated financial statements of the Company are presented in a stable currency and are not adjusted for subsequent changes in the price level or exchange rates.

(d)

Group entities

The results and the financial situation of the Group's entities, whose functional currency is different from the presentation currency of the consolidated financial statements, of LATAM Airlines Group S.A., which does not correspond to the currency of a hyperinflationary economy, are converted into the currency of presentation as follows:

(i) Assets and liabilities of each consolidated statement of financial position presented are translated at the closing exchange rate on the consolidated statement of financial position date;

(ii) The revenues and expenses of each income statement account are translated at the exchange rates prevailing on the transaction dates, and

(iii) All the resultant exchange differences by conversion are shown as a separate component in other comprehensive income.

For those subsidiaries of the group whose functional currency is different from the presentation currency and, moreover, corresponds to the currency of a hyperinflationary economy; its restated results, cash flow and financial situation are converted to the presentation currency at the closing exchange rate on the date of the consolidated financial statements.

The exchange rates used correspond to those fixed in the country where the subsidiary is located, whose functional currency is different to the U.S. dollar.

Adjustments to the Goodwill and fair value arising from the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and are translated at the closing exchange rate or period informed, restated when the currency came from the functional entity of the foreign entity corresponds to that of a hyperinflationary economy, the adjustments for the restatement of goodwill are recognized in the consolidated equity.

2.4.

Property, plant and equipment

The land of LATAM Airlines Group S.A. and Subsidiaries, are recognized at cost less any accumulated impairment loss. The rest of the Properties, plants and equipment are recorded, both in their initial recognition and in their subsequent measurement, at their historical cost, restated for inflation when appropriate, less the corresponding depreciation and any loss due to deterioration.

The amounts of advances paid to the aircraft manufacturers are activated by the Company under Construction in progress until they are received.

Subsequent costs (replacement of components, improvements, extensions, etc.) are included in the value of the initial asset or are recognized as a separate asset, only when it is probable that the future economic benefits associated with the elements of property, plant and equipment, they will flow to the Company and the cost of the item can be determined reliably. The value of the replaced component is written off. The rest of the repairs and maintenance are charged to the result of the year in which they are incurred.

The depreciation of the properties, plants and equipment is calculated using the linear method over their estimated technical useful lives; except in the case of certain technical components which are depreciated on the basis of cycles and hours flown.

The residual value and the useful life of the assets are reviewed and adjusted, if necessary, once a year.

When the value of an asset exceeds its estimated recoverable amount, its value is immediately reduced to its recoverable amount (Note 2.8).

Losses and gains from the sale of property, plant and equipment are calculated by comparing the consideration with the book value and are included in the consolidated statement of income.

2.5.

Intangible assets other than goodwill

(a)

Airport slots and Loyalty program

Airport slots and the Coalition and Loyalty program are intangible assets of indefinite useful life and are subject to impairment tests annually as an integral part of each CGU, in accordance with the premises that are applicable, included as follows:

Airport slots – Air transport CGU

Loyalty program – Coalition and loyalty program Multiplus CGU

(See Note 16)

The airport slots correspond to an administrative authorization to carry out operations of arrival and departure of aircraft at a specific airport, within a specified period.

The Loyalty program corresponds to the system of accumulation and redemption of points that has developed Multiplus S.A., subsidiary of TAM S.A.

The Brands, airport Slots and Loyalty program were recognized in fair values determined in accordance with IFRS 3, as a consequence of the business combination with TAM and Subsidiaries.

(b)

Computer software

Licenses for computer software acquired are capitalized on the basis of the costs incurred in acquiring them and preparing them for using the specific software. These costs are amortized over their estimated useful lives, for which the Company has been defined useful lives between 3 and 10 years.

Expenses related to the development or maintenance of computer software which do not qualify for capitalization, are shown as an expense when incurred. The personnel costs and others costs directly related to the production of unique and identifiable computer software controlled by the Company, are shown as intangible Assets others than Goodwill when they have met all the criteria for capitalization.

(c)

Brands

The Brands were acquired in the business combination with TAM S.A. And Subsidiaries and recognized at fair value under IFRS. During the year 2016, the estimated useful life of the brands change from an indefinite useful life to a five-year period, the period in which the value of the brands will be amortized (See Note 15).

2.6.

Goodwill

Goodwill represents the excess of acquisition cost over the fair value of the Company’s participation in the net identifiable assets of the subsidiary or associate on the acquisition date. Goodwill related to acquisition of subsidiaries is not amortized but tested for impairment annually or each time that there is evidence of impairment. Gains and losses on the sale of an entity include the book amount of the goodwill related to the entity sold.

2.7.

Borrowing costs

Interest costs incurred for the construction of any qualified asset are capitalized over the time necessary for completing and preparing the asset for its intended use.

2.8.

Losses for impairment of non-financial assets

Intangible assets that have an indefinite useful life, and developing IT projects, are not subject to amortization and are subject to annual testing for impairment. Assets subject to amortization are subjected to impairment tests whenever any event or change in circumstances indicates that the book value of the assets may not be recoverable. An impairment loss is recorded when the book value is greater than the recoverable amount. The recoverable amount of an asset is the higher of its fair value less costs to sell and its value in use. In evaluating the impairment, the assets are grouped at the lowest level for which cash flows are separately identifiable (CGUs). Non-financial assets other than goodwill that have suffered an impairment loss are reviewed if there are indicators of reverse losses at each reporting date.

2.9.

Financial assets

As of January 1, 2018, the Company classifies its financial assets in the following categories: at fair value (either through other comprehensive income, or through gains or losses), and at amortized cost. The classification depends on the business model of the entity to manage the financial assets and the contractual terms of the cash flows.

The group reclassifies debt investments when, and only when, it changes its business model to manage those assets.

In the initial recognition, the Company measures a financial asset at its fair value plus, in the case of a financial asset classified at amortized cost, the transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets accounted for at fair value through profit or loss are recorded as expenses in the income statement.

(a) Debt instruments

The subsequent measurement of debt instruments depends on the group's business model to manage the asset and cash flow characteristics of the asset. The Company has two measurement categories in which the group classifies its debt instruments:

Amortized cost: the assets held for the collection of contractual cash flows where those cash flows represent only payments of principal and interest are measured at amortized cost. A gain or loss on a debt investment that is subsequently measured at amortized cost and is not part of a hedging relationship is recognized in income when the asset is derecognized or impaired. Interest income from these financial assets is included in financial income using the effective interest rate method.

Fair value through profit or loss: assets that do not meet the criteria of amortized cost or FVOCI are measured at fair value through profit or loss. A gain or loss on a debt investment that is subsequently measured at fair value through profit or loss and is not part of a hedging relationship is recognized in profit or loss and is presented net in the income statement within other gains / (losses) in the period in which it arises.

(b) Equity instruments

Changes in the fair value of financial assets at fair value through profit or loss are recognized in other gains / (losses) in the statement of income as appropriate.

The Company evaluates in advance the expected credit losses associated with its debt instruments recorded at amortized cost. The applied impairment methodology depends on whether there has been a significant increase in credit risk.

2.10.

Derivative financial instruments and hedging activities

Derivatives are recognized, in accordance with IAS 39 for hedge accounting and IFRS 9 for derivatives not qualify as hedge accounting, initially at fair value on the date on which the derivative contract was made and are subsequently valued at their fair value. The method to recognize the resulting loss or gain depends on whether the derivative has been designated as a hedging instrument and, if so, the nature of the item being hedged. The Company designates certain derivatives as:

(a)

Hedge of the fair value of recognized assets (fair value hedge);

(b)

Hedge of an identified risk associated with a recognized liability or an expected highly- Probable transaction (cash-flow hedge), or

(c)

Derivatives that do not qualify for hedge accounting.

The Company documents, at the inception of each transaction, the relationship between the hedging instrument and the hedged item, as well as its objectives for managing risk and the strategy for carrying out various hedging transactions. The Company also documents its assessment, both at the beginning and on an ongoing basis, as to whether the derivatives used in the hedging transactions are highly effective in offsetting the changes in the fair value or cash flows of the items being hedged.

The total fair value of the hedging derivatives is booked as Other non-current financial asset or liability if the remaining maturity of the item hedged is over 12 months, and as an other current financial asset or liability if the remaining term of the item hedged is less than 12 months.
Derivatives not booked as hedges are classified as Other financial assets or liabilities.

(a)

Fair value hedges

Changes in the fair value of designated derivatives that qualify as fair value hedges are shown in the consolidated statement of income, together with any change in the fair value of the asset or liability hedged that is attributable to the risk being hedged.

(b)

Cash flow hedges

The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is shown in the statement of other comprehensive income. The loss or gain relating to the ineffective portion is recognized immediately in the consolidated statement of income under other gains (losses). Amounts accumulated in equity are reclassified to profit or loss in the periods when the hedged item affects profit or loss.

In case of variable interest-rate hedges, the amounts recognized in the statement of other comprehensive income are reclassified to results within financial costs at the same time the associated debts accrue interest.

For fuel price hedges, the amounts shown in the statement of other comprehensive income are reclassified to results under the line item Cost of sales to the extent that the fuel subject to the hedge is used.

For foreign currency hedges, the amounts recognized in the statement of other comprehensive income are reclassified to income as deferred revenue resulting from the use of points, are recognized as Income.

When hedging instrument mature, is sold or fails to meet the requirements to be accounted for as hedges, any gain or loss accumulated in the statement of Other comprehensive income until that moment, remains in the statement of other comprehensive income and is reclassified to the consolidated statement of income when the hedged transaction is finally recognized. When it is expected that the hedged transaction is no longer going to occur, the gain or loss accumulated in the statement of other comprehensive income is taken immediately to the consolidated statement of income as “Other gains (losses)”.

(c)

Derivatives not booked as a hedge

The changes in fair value of any derivative instrument that is not booked as a hedge are shown immediately in the consolidated statement of income in “Other gains (losses)”.

2.11.

Inventories

Inventories, detailed in Note 10, are shown at the lower of cost and their net realizable value. The cost is determined on the basis of the weighted average cost method (WAC). The net realizable value is the estimated selling price in the normal course of business, less estimated costs necessary to make the sale.

2.12.

Trade and other accounts receivable

Commercial accounts receivable are initially recognized at their fair value and subsequently at their amortized cost in accordance with the effective rate method, less the provision for impairment according to the model of the expected credit losses. The company applies the simplified approach permitted by IFRS 9, which requires that expected lifetime losses be recognized upon initial recognition of accounts receivable.

The existence of significant financial difficulties on the part of the debtor, the probability that the debtor goes bankrupt or financial reorganization are considered indicators of a significant increase in credit risk.

The carrying amount of the asset is reduced as the provision account is used and the loss is recognized in the consolidated income statement under "Cost of sales". When an account receivable is written off, it is regularized against the provision account for the account receivable.

2.13.

Cash and cash equivalents

Cash and cash equivalents include cash and bank balances, time deposits in financial institutions, and other short-term and highly liquid investments.

2.14.

Capital

The common shares are classified as net equity.

Incremental costs directly attributable to the issuance of new shares or options are shown in net equity as a deduction from the proceeds received from the placement of shares.

2.15.

Trade and other accounts payables

Trade payables and other accounts payable are initially recognized at fair value and subsequently at amortized cost.

2.16.

Interest-bearing loans

Financial liabilities are shown initially at their fair value, net of the costs incurred in the transaction. Later, these financial liabilities are valued at their amortized cost; any difference between the proceeds obtained (net of the necessary arrangement| costs) and the repayment value, is shown in the consolidated statement of income during the term of the debt, according to the effective interest rate method.

Financial liabilities are classified in current and non-current liabilities according to the contractual payment dates of the nominal principal.

2.17.

Current and deferred taxes

The expense by tax is comprised of income and deferred taxes.

The charge for current tax is calculated based on tax laws in force on the date of statement of financial position, in the countries in which the subsidiaries and associates operate and generate taxable income.

Deferred taxes are calculated using the liability method, on the temporary differences arising between the tax bases of assets and liabilities and their book values. However, if the temporary differences arise from the initial recognition of a liability or an asset in a transaction different from a business combination that at the time of the transaction does not affect the accounting result or the tax gain or loss, they are not booked. The deferred tax is determined using the tax rates (and laws) that have been enacted or substantially enacted at the consolidated financial statements close, and are expected to apply when the related deferred tax asset is realized or the deferred tax liability discharged.

Deferred tax assets are recognized when it is probable that there will be sufficient future tax earnings with which to compensate the temporary differences.

The tax (current and deferred) is recognized in income by function, unless it relates to an item recognized in other comprehensive income, directly in equity or from business combination. In that case the tax is also recognized in other comprehensive income, directly in income by function or goodwill, respectively.

2.18.

Employee benefits

(a)

Personnel vacations

The Company recognizes the expense for personnel vacations on an accrual basis.

(b)

Share-based compensation

The compensation plans implemented based on the shares of the Company are recognized in the consolidated financial statements in accordance with IFRS 2: Share-based payments, for plans based on the granting of options, the effect of fair value is recorded in equity with a charge to remuneration in a linear manner between the date of grant of said options and the date on which they become irrevocable, for the plans considered as cash settled award the fair value, updated as of the closing date of each reporting period, is recorded as a liability with charge to remuneration.

(c)

Post-employment and other long-term benefits

Provisions are made for these obligations by applying the method of the projected unit credit method, and taking into account estimates of future permanence, mortality rates and future wage increases determined on the basis of actuarial calculations. The discount rates are determined by reference to market interest-rate curves. Actuarial gains or losses are shown in other comprehensive income.

(d)

Incentives

The Company has an annual incentives plan for its personnel for compliance with objectives and individual contribution to the results. The incentives eventually granted consist of a given number or portion of monthly remuneration and the provision is made on the basis of the amount estimated for distribution.

2.19.

Provisions

Provisions are recognized when:

(i)

The Company has a present legal or implicit obligation as a result of past events;

(ii)

It is probable that payment is going to be necessary to settle an obligation; and

(iii)

The amount has been reliably estimated.

2.20.

Revenue from contracts with customers

(a) Transportation of passengers and cargo

The Company recognizes the sale for the transportation service as a deferred income liability, which is recognized as income when the transportation service has been lent or expired. In the case of air transport services sold by the Company and that will be made by other airlines, the liability is reduced when they are remitted to said airlines. The Company periodically reviews whether it is necessary to make an adjustment to deferred income liabilities, mainly related to returns, changes, among others.

Compensations granted to clients for changes in the levels of services or billing of additional services such as additional baggage, change of seat, among others, are considered modifications of the initial contract, therefore, they are deferred until the corresponding service is provided.

(b) Expiration of air tickets

The Company estimates in a monthly basis the probability of expiration of air tickets, with refund clauses, based on the history of use of the same. Air tickets without refund clause are expired on the date of the flight in case the passenger does not show up.

The costs related to the sale of air tickets are activated and deferred until the corresponding service is provided. These assets are included under Other non-financial assets in the Consolidated Classified Statement of Financial Position.

(d) Frequent passenger program

The Company maintains the following loyalty programs: LATAM Pass, LATAM Fidelidade and Multiplus, whose objective is loyalty through the delivery of miles or points.

Members of these programs accumulate miles when flying with LATAM Airlines Group or any other member airline of the oneworld® program, as well as using the services of the associated entities.

When the miles and points are exchanged for products and services other than the services provided by the Company, the income is immediately recognized. When the exchange is made through air tickets of an airline of LATAM Airlines Group S.A. and subsidiaries, the income is deferred until the transportation service are rendered or expiration for non-use.

In addition, the Company has contracts with certain non-airline companies for the sale of miles or points. These contracts include some performance obligations in addition to the sale of the mile or point, such as marketing, advertising and other benefits. The income associated with these concepts is recognized in the income statement to the extent that the miles are accredited.

The calculation of the deferred income by loyalty programs at the end of the period corresponds to the valuation of the miles and points awarded to the holders of the loyalty programs, pending use, weighted by the probability of their exchange.

The miles and points that the Company estimates will not be exchanged, the proportionally associated value is recognized during the period in which it is expected that the remaining miles and points will be exchanged. The Company uses statistical models to estimate the exchange probability, which is based on historical patterns and projections.

(e) Dividend income

Dividend income is recognized when the right to receive payment is established.

2.21.

Leases

The Company recognizes contracts that meet the definition of a lease, as a right of use asset and a lease liability on the date when the underlying asset is available for use.

Assets for right of use are measured at cost including the following:

The amount of the initial measurement of the lease liability;

Lease payment made at or before commencement date;

Initial direct costs, and

Restoration costs.

The assets by right of use are recognized in the statement of financial position in Properties, Plants and equipment (See Note 17).

Lease liabilities include the net present value of the following payments:

Fixed payments including in sustance fixed payment.

Variable lease payments that depend on an index or a rate;

The exercise price of a purchase options, if is reasonably certain to exercise that option.

The Company determines the present value of the lease payments using the implicit rates for the aircraft leasing contracts and for the rest of the underlying assets, uses the incremental borrowing rate.

Lease liabilities are recognized in the statement of financial position under Other financial liabilities, current or non-current (See Note 19).

Interest accrued on financial liabilities is recognized in the consolidated statement of income in "Financial costs".

Principal and inters is presented in the consolidated cash flow as “Payments of lease liability” and “Interest paid”, respectively in cash flows use in financing activities.

Payments associated with short-term leases without purchase options and leases of low-value assets are recognized on a straight-line basis in profit or loss at the time of accrual. Those payments are presented in cash flows use in operation activities.

The company analyzes the financing agreements of aircrafts, mainly considering characteristics such as:

(a) that the company initially acquired the aircraft or took an important part in the process of direct acquisition with the manufacturers,

(b) Due to the contractual conditions, it is virtually certain that the company will execute the purchase option of the aircraft at the end of the lease term.

Since these financing agreements are "substantially purchases" and not leases, the related liability is considered as a financial debt classified under IFRS 9 and continue to be presented within the "other financial liabilities" described in note 19. On the other hand, aircraft are presented in Property, Plants and Equipment as described in note 17, as "own aircrafts".

The Group qualifies as sale and leaseback transactions, operations which lead to a sale according to IFRS 15. More specifically, a sale is considered as such if there is no repurchase option on the goods at the end of the lease term.

- Sale according to IFRS 15

If the sale by the vendor-lessee is qualified as a sale according to IFRS 15, the vendor-lessee must: (i) derecognize the underlying asset, (ii) recognize a right-of-use asset equal to the retained portion of the net carrying amount of the asset.

- Not a sale according to IFRS 15

If the sale by the vendor-lessee is not qualified as a sale according to IFRS 15, the vendor-lessee keeps maintains the goods transferred on its balance sheet recognizes a financial liability equal to the disposal price (received from the buyer-lessor).

2.22.

Non-current assets or disposal groups classified as held for sale

Non-current assets (or disposal groups) classified as assets held for sale are shown at the lesser of their book value and the fair value less costs to sell.

2.23.

Maintenance

The costs incurred for scheduled heavy maintenance of the aircraft’s fuselage and engines are capitalized and depreciated until the next maintenance. The depreciation rate is determined on technical grounds, according to the use of the aircraft expressed in terms of cycles and flight hours.

In case of aircraft include in property, plant and equipment, these maintenance cost are capitalized as Property, plant and equipment, while in the case of aircraft on right of use, a liability is accrued based on the use of the main components is recognized, since a contractual obligation with the lessor to return the aircraft on agreed terms of maintenance levels exists. These are recognized as Cost of sales.

Additionally, some contracts that comply with the definition of lease establish the obligation of the lessee to make deposits to the lessor as a guarantee of compliance with maintenance and return conditions. These deposits, often called maintenance reserves, accumulate until a major maintenance is performed, once made, the recovery is requested to the lessor. At the end of the contract period, there is comparison between the reserves that have been paid and required return conditions, and compensation between the parties are made if applicable.

The unscheduled maintenance of aircraft and engines, as well as minor maintenance, are charged to results as incurred.

2.24.

Environmental costs

Disbursements related to environmental protection are charged to results when incurred.

NOTE 3 - FINANCIAL RISK MANAGEMENT

3.1.

Financial risk factors

The Company is exposed to different financial risks: (a) market risk, (b) credit risk, and (c) liquidity risk. The program overall risk management of the Company aims to minimize the adverse effects of financial risks affecting the company.

(a)

Market risk

Due to the nature of its operations, the Company is exposed to market factors such as: (i) fuel-price risk, (ii) exchange -rate risk, and (iii) interest -rate risk.

The Company has developed policies and procedures for managing market risk, which aim to identify, quantify, monitor and mitigate the adverse effects of changes in market factors mentioned above.

For this, the Administration monitors the evolution of price levels, exchange rates and interest rates, and quantifies their risk exposures (Value at Risk), and develops and implements hedging strategies.

(i)

Fuel-price risk:

Exposition:

For the execution of its operations the Company purchases a fuel called Jet Fuel grade 54 USGC, which is subject to the fluctuations of international fuel prices.

Mitigation:

To cover the risk exposure fuel, the Company operates with derivative instruments (swaps and options) whose underlying assets may be different from Jet Fuel, being possible use West Texas Intermediate (“WTI”) crude, Brent (“BRENT”) crude and distillate Heating Oil (“HO”), which have a high correlation with Jet Fuel and greater liquidity.

Fuel Hedging Results:

During the period ended March 31, 2019, the Company recognized gains of US$ 8.9 million for fuel coverage net of premium. During the same period of 2018, the Company recognized gains of US$ 6.5 million for the same concept.

As of March 31, 2019, the market value of fuel positions amounted to US$ 6.3 million (negative). At the end of December 2018, this market value was US$ 15.8 million (negative).

The following tables show the level of hedge for different periods:

Positions as of March 31, 2019 (*)	Maturities
	Q219			Q319			Q419			Total
Percentage of coverage over the expected volume of consumption		65	%		42	%		20	%		45	%

(*) The volume shown in the table considers all the hedging instruments (swaps and options).

Positions as of December 31, 2018 (*)	Maturities
	Q119			Q219			Q319			Q419			Total

Percentage of coverage over the expected volume of consumption		66	%		58	%		40	%		15	%		45	%

(*) The volume shown in the table considers all the hedging instruments (swaps and options).

Sensitivity analysis

A drop in fuel price positively affects the Company through a reduction in costs. However, also negatively affects contracted positions as these are acquired to protect the Company against the risk of a rise in price. The policy therefore is to maintain a hedge-free percentage in order to be competitive in the event of a drop in price.

The current hedge positions they are booked as cash flow hedge contracts, so a variation in the fuel price has an impact on the Company’s net equity.

The following table shows the sensitivity analysis of the financial instruments according to reasonable changes in the fuel price and their effect on equity. The term of the projection was defined until the end of the last current fuel hedge contract, being the last business day of the fourth quarter of 2019.

The calculations were made considering a parallel movement of US$ 5 per barrel in the curve of the BRENT and JET crude futures benchmark price at the end of March 2019 and the end of December, 2018.

	Positions as of March 31, 2019	Positions as of December 31, 2018
Benchmark price	effect on equity	effect on equity
(US$ per barrel)	(millions of US$)	(millions of US$)

+5	+10.8	+7.4
-5	- 9.5	- 5.5

Given the structure of fuel coverage during 2019, considers a hedge-free portion, a vertical drop of 5 dollars in the JET reference price (considered as the monthly average), would have meant an approximate impact US $ 33.0 million of lower fuel costs. For the same period, a vertical rise of $ 5 in the JET reference price (considered as the monthly average) would have meant an impact of approximately US $ 30.5 million of higher fuel costs.

(ii)

Foreign exchange rate risk:

Exposition:

The functional and presentation currency of the Financial Statements of the Parent Company is the US dollar, so that the risk of the Transactional and Conversion exchange rate arises mainly from the Company's business, strategic and accounting operating activities that are expressed in a monetary unit other than the functional currency.

The subsidiaries of LATAM are also exposed to foreign exchange risk whose impact affects the Company's Consolidated Income.

The largest operational exposure to LATAM's exchange risk comes from the concentration of businesses in Brazil, which are mostly denominated in Brazilian Real (BRL), and are actively managed by the company.

At a lower concentration, the Company is also exposed to the fluctuation of other currencies, such as: Euro, Pound sterling, Australian dollar, Colombian peso, Chilean peso, Argentine peso, Paraguayan guarani, Mexican peso, Peruvian nuevo sol and New Zealand dollar.

Mitigation:

The Company mitigates currency risk exposures by contracting derivative instruments or through natural hedges or execution of internal operations.

FX Hedging Results:

With the objective of reducing exposure to the exchange rate risk in the operational cash flows of 2019, and securing the operating margin, LATAM makes hedges using FX derivatives.

As of March 31, 2019 and the end of December 2018, the Company does not maintain hedge FX derivatives.

During the period ended March 31, 2019, the Company did not recognize results due to FX coverage. During the same period of 2018, the company recognized gains of US$ 0.8 million.

As of March 31, 2019, and for the year end at December 2018, the company has not subscribed FX derivatives.

As of March 31, 2019 the company has contracted FX derivatives which have not been recorded under hedge accounting. The market value of these positions amounts to US$ 17.4 million (positive). The premium associated with the contracting of this derivative is accrued linearly during the months elapsed until the expiration of the instrument. The Company registered the derivative as fair value through profits and loss. For the period ended March 31, 2019, the loss recognized in results amounts to US $ 8.1 million including premiums.

Sensitivity analysis:

A depreciation of the R$/US$ exchange rate, negatively affects the Company's operating cash flows, however, also positively affects the value of the positions of derivatives contracted.

FX derivatives are recorded as cash flow hedge contracts; therefore, a variation in the exchange rate has an impact on the market value of the derivatives, the changes of which affect the Company's net equity.

As of March 31, 2019, the Company does not have FX derivatives in its portfolio.

During 2017, the Company contracted derivative currency swaps to hedge debt issued the same year for a notional UF 8.7 million. As of March 31, 2019, the market value of derivative positions of currency swaps amounted to US$ 20.3 million (positive).

In the case of TAM S.A, whose functional currency is the Brazilian real, a large part of its liabilities are expressed in US dollars. Therefore, when converting financial assets and liabilities, from dollars to reals, they have an impact on the result of TAM S.A., which is consolidated in the Company's Income Statement.

With the objective of reducing the impact on the Company's results caused by appreciations or depreciations of R$/US $, the Company has executed internal operations to reduce the net exposure in US$ for TAM S.A.

The following table shows the variation of financial performance to appreciate or depreciate 10% exchange rate R$/US$:

Appreciation (depreciation)	Effect at March 31, 2019	Effect at March 31, 2018
of R$/US$(*)	Millions of US$	Millions of US$

-10%	+34.3	+28.5
+10%	-34.3	-28.5

(*) Appreciation (depreciation) of US$ regard to the covered currencies.

Effects of exchange rate derivatives in the Financial Statements

The profit or losses caused by changes in the fair value of hedging instruments are segregated between intrinsic value and temporary value. The intrinsic value is the actual percentage of cash flow covered, initially shown in equity and later transferred to income, while the hedge transaction is recorded in income. The temporary value corresponds to the ineffective portion of cash flow hedge which is recognized in the financial results of the Company (Note 19).

Due to the functional currency of TAM S.A. and Subsidiaries is the Brazilian real, the Company presents the effects of the exchange rate fluctuations in Other comprehensive income by converting the Statement of financial position and Income statement of TAM S.A. and Subsidiaries from their functional currency to the U.S. dollar, which is the presentation currency of the consolidated financial statement of LATAM Airlines Group S.A. and Subsidiaries. The Goodwill generated in the Business combination is recognized as an asset of TAM S.A. and Subsidiaries in Brazilian real whose conversion to U.S. dollar also produces effects in other comprehensive income.

The following table shows the change in Other comprehensive income recognized in Total equity in the case of appreciate or depreciate 10% the exchange rate R$/US$:

Appreciation (depreciation)	Effect at March 31, 2019	Effect at December 31, 2018
of R$/US$	Millions of US$	Millions of US$

-10%	+360.82	+384.73
+10%	-360.82	-314.78

(iii)

Interest -rate risk:

Exposition:

The Company is exposed to fluctuations in interest rates affecting the markets future cash flows of the assets, and current and future financial liabilities.

The Company is exposed in one portion to the variations of London Inter-Bank Offer Rate (“LIBOR”) and other interest rates of less relevance are Brazilian Interbank Deposit Certificate ("ILC").

Mitigation:

In order to reduce the risk of an eventual rise in interest rates, the Company has signed interest-rate swap and call option contracts. Currently a 63% (60% at December 31, 2018) of the debt is fixed to fluctuations in interest rate.

Rate Hedging Results:

As of March 31, 2019, the market value of the derivative positions of interest rates amounted to US $ 1.7 million (negative). At the end of December 2018, this market value was US $ 2.2 million (negative).

Sensitivity analysis:

The following table shows the sensitivity of changes in financial obligations that are not hedged against interest-rate variations. These changes are considered reasonably possible, based on current market conditions each date.

Increase (decrease)	Positions as of March 31, 2019	Positions as of December 31, 2018
futures curve	effect on profit or loss before tax	effect on profit or loss before tax
in libor 3 months	(millions of US$)	(millions of US$)

+100 basis points	-28.24	-28.50
-100 basis points	+28.24	+28.50

Much of the current rate derivatives are registered for as hedges of cash flow, therefore, a variation in the exchange rate has an impact on the market value of derivatives, whose changes impact on the Company’s net equity.

The calculations were made increasing (decreasing) vertically 100 basis points of the three-month Libor futures curve, being both reasonably possible scenarios according to historical market conditions.

Increase (decrease)	Positions as of March 31, 2019	Positions as of December 31, 2018
futures curve	effect on equity	effect on equity
in libor 3 months	(millions of US$)	(millions of US$)

+100 basis points	+0.50	+0.70
-100 basis points	-0.51	-0.71

The assumptions of sensitivity calculation must assume that forward curves of interest rates do not necessarily reflect the real value of the compensation flows. Moreover, the structure of interest rates is dynamic over time.

During the periods presented, the Company has no registered amounts by ineffectiveness in consolidated statement of income for this kind of hedging.

(b)

Credit risk

Credit risk occurs when the counterparty to a financial agreement or instrument fails to discharge an obligation due or financial instrument, leading to a loss in market value of a financial instrument (only financial assets, not liabilities).

The Company is exposed to credit risk due to its operative and financial activities, including deposits with banks and financial institutions, investments in other kinds of instruments, exchange-rate transactions and the contracting of derivative instruments or options.

As a way to mitigate credit risk related to financial activities, the Company requires that the counterparty to the financial activities remain at least investment grade by major Risk Assessment Agencies. Additionally the Company has established maximum limits for investments which are monitored regularly.

(i)

Financial activities

Cash surpluses that remain after the financing of assets necessary for the operation are invested according to credit limits approved by the Company’s Board, mainly in time deposits with different financial institutions, private investment funds, short-term mutual funds, and easily-liquidated corporate and sovereign bonds with short remaining maturities. These investments are booked as Cash and cash equivalents and other current financial assets.

In order to reduce counterparty risk and to ensure that the risk assumed is known and managed by the Company, investments are diversified among different banking institutions (both local and international). The Company evaluates the credit standing of each counterparty and the levels of investment, based on (i) their credit rating, (ii) the equity size of the counterparty, and (iii) investment limits according to the Company’s level of liquidity. According to these three parameters, the Company chooses the most restrictive parameter of the previous three and based on this, establishes limits for operations with each counterparty.

The Company has no guarantees to mitigate this exposure.

(ii)

Operational activities

The Company has four large sales “clusters”: travel agencies, cargo agents, airlines and credit-card administrators. The first three are governed by International Air Transport Association, international (“IATA”) organization comprising most of the airlines that represent over 90% of scheduled commercial traffic and one of its main objectives is to regulate the financial transactions between airlines and travel agents and cargo. When an agency or airline does not pay their debt, they are excluded from operating with IATA’s member airlines. In the case of credit-card administrators, they are fully guaranteed by 100% by the issuing institutions.

The exposure consists of the term granted, which fluctuates between 1 and 45 days.

One of the tools the Company uses for reducing credit risk is to participate in global entities related to the industry, such as IATA, Business Sales Processing (“BSP”), Cargo Account Settlement Systems (“CASS”), IATA Clearing House (“ICH”) and banks (credit cards). These institutions fulfill the role of collectors and distributors between airlines and travel and cargo agencies. In the case of the Clearing House, it acts as an offsetting entity between airlines for the services provided between them. A reduction in term and implementation of guarantees has been achieved through these entities. Currently the sales invoicing of TAM Linhas Aéreas S.A. related with travel agents and cargo agents for domestic transportation in Brazil is done directly by TAM Linhas Aéreas S.A.

Credit quality of financial assets

The external credit evaluation system used by the Company is provided by IATA. Internal systems are also used for particular evaluations or specific markets based on trade reports available on the local market. The internal classification system is complementary to the external one, i.e. for agencies or airlines not members of IATA, the internal demands are greater.

To reduce the credit risk associated with operational activities, the Company has established credit limits to abridge the exposure of their debtors which are monitored permanently (mainly in case of operational activities of TAM Linhas Aéreas S.A. with travel agents).The bad-debt rate in the principal countries where the Company has a presence is insignificant.

(c)

Liquidity risk

Liquidity risk represents the risk that the Company has no sufficient funds to meet its obligations.

Because of the cyclical nature of the business, the operation, and its investment and financing needs related to the acquisition of new aircraft and renewal of its fleet, plus the financing needs, the Company requires liquid funds, defined as cash and cash equivalents plus other short term financial assets, to meet its payment obligations.

The liquid funds, the future cash generation and the capacity to obtain additional funding, through bond issuance and banking loans, will allow the Company to obtain sufficient alternatives to face its investment and financing future commitments.

At March 31, 2019 is US$ 1,544 million (US$ 1,404 million at December 31, 2018), invested in short term instruments through financial high credit rating levels entities.

In addition to the balance of liquid funds, the Company has access to short-term credit lines. As of March 31, 2019, LATAM has credit lines for working capital that are not committed to several banks and additionally has an unused committed line of US$ 575 million (US$ 600 million as of December 31, 2018) subject to availability of collateral.

Class of liability for the analysis of liquidity risk ordered by date of maturity as of March 31, 2019 (Unaudited)

Debtor: LATAM Airlines Group S.A. and Subsidiaries, Tax No. 89.862.200-2 Chile.

						More than		More than		More than
				Up to		90 days		one to		three to		More than
		Creditor		90		to one		three		five		five				Nominal				Effective		Nominal
Tax No.	Creditor	country	Currency	days		year		years		years		years		Total		value			Amortization	rate		rate
				ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$				%		%

Loans to exporters

97.032.000-8	BBVA	Chile	US$		76,275		38,697		-		-		-		114,972		113,000		At Expiration		3.48		3.48
97.032.000-8	BBVA	Chile	UF		865		52,881		-		-		-		53,746		52,001		At Expiration		4.11		3.31
97.036.000-K	BANCO DO BRASIL	Chile	US$		201,803		-		-		-		-		201,803		200,000		At Expiration		3.60		3.60
97.003.000-K	HSBC	Chile	US$		12,095		-		-		-		-		12,095		12,000		At Expiration		3.15		3.15

Bank loans

97.023.000-9	CORPBANCA	Chile	UF		5,879		17,348		11,328		-		-		34,555		33,553		Quarterly		3.35		3.35
0-E	BLADEX	U.S.A.	US$		8,012		7,756		-		-		-		15,768		15,000		Semiannual		6.75		6.75
97.036.000-K	SANTANDER	Chile	US$		540		48		51,283		-		-		51,871		51,283		Quarterly		5.40		5.40
76.362.099-9	BTG PACTUAL CHILE	Chile	UF		523		1,568		70,575		-		-		72,666		67,439		At Expiration		3.10		3.10

Obligations with the public

97.030.000-7	ESTADO	Chile	UF		9,720		9,720		38,879		201,684		218,215		478,218		353,444		At Expiration		5.50		5.50
0-E	BANK OF NEW YORK	U.S.A.	US$		42,188		86,521		698,375		180,250		1,408,063		2,415,397		1,800,000		At Expiration		7.33		7.02

Guaranteed obligations

0-E	CREDIT AGRICOLE	France	US$		739		2,189		5,654		1,384		-		9,966		9,422		Quarterly		4.32		3.23
0-E	BNP PARIBAS	U.S.A.	US$		20,316		56,157		151,315		143,516		237,514		608,818		501,147		Quarterly		4.42		4.41
0-E	WILMINGTON TRUST COMPANY	U.S.A.	US$		36,141		106,003		267,521		291,259		508,443		1,209,367		932,069		Semiannual		4.47		4.47
0-E	CITIBANK	U.S.A.	US$		12,777		38,168		101,305		70,622		59,468		282,340		258,590		Quarterly		3.85		2.96
0-E	NATIXIS	France	US$		13,940		41,316		108,275		87,289		112,733		363,553		314,256		Quarterly		4.56		4.56
0-E	INVESTEC	England	US$		3,985		9,682		27,057		22,646		-		63,370		52,560		Quarterly		7.23		7.23

Otras obligaciones garantizadas

0-E	CREDIT AGRICOLE	France	US$		2,763		8,441		270,298		-		-		281,502		253,962		At Expiration		4.54		4.54
0-E	DVB BANK SE	Germany	US$		27,760		81,686		208,628		101,296		15,157		434,527		398,648		Quarterly		4.23		4.23

Other guaranteed obligations

0-E	ING	U.S.A.	US$		4,025		12,075		8,108		-		-		24,208		23,143		Quarterly		5.70		5.01
0-E	CREDIT AGRICOLE	France	US$		12,747		16,808		14,708		-		-		44,263		43,231		Monthly		3.71		3.33
0-E	CITIBANK	U.S.A.	US$		14,828		42,224		78,212		33,468		-		168,732		158,949		Quarterly		4.32		3.73
0-E	PEFCO	U.S.A.	US$		5,779		9,711		1,950		-		-		17,440		16,921		Quarterly		5.64		5.02
0-E	BNP PARIBAS	U.S.A.	US$		8,441		27,887		16,837		-		-		53,165		51,640		Quarterly		4.08		3.77
0-E	WELLS FARGO	U.S.A.	US$		35,450		106,176		278,336		231,559		74,953		726,474		687,667		Quarterly		2.80		2.11
97.036.000-K	SANTANDER	Chile	US$		6,332		18,794		49,193		20,529		-		94,848		89,447		Quarterly		3.77		3.23
0-E	RRPF ENGINE	England	US$		1,164		3,468		9,069		8,790		3,787		26,278		22,183		Quarterly		4.01		4.01
0-E	APPLE BANK	U.S.A.	US$		1,725		5,105		13,365		12,367		-		32,562		30,099		Monthly		4.14		3.54
0-E	BTMU	U.S.A.	US$		3,480		10,332		27,044		24,238		-		65,094		60,255		Quarterly		4.05		3.46
0-E	NATIXIS	France	US$		3,739		5,290		4,641		-		-		13,670		13,106		Quarterly		4.19		4.00
0-E	KFW IPEX-BANK	Germany	US$		1,825		5,442		3,610		-		-		10,877		10,517		Quarterly		4.23		4.23
0-E	AIRBUS FINANCIAL	U.S.A.	US$		2,065		6,151		5,750		-		-		13,966		13,501		Monthly		4.05		4.05
0-E	US BANK	U.S.A.	US$		18,747		55,955		147,422		145,181		68,133		435,438		396,178		Quarterly		4.00		2.82
0-E	PK AIRFINANCE	U.S.A.	US$		2,593		7,917		26,359		-		-		36,869		35,295		Quarterly		4.18		4.18

Other loans

0-E	BOEING	U.S.A.	US$		917		1,371		83,592		-		-		85,880		83,592		Quarterly		4.29		4.29
0-E	CITIBANK (*)	U.S.A.	US$		25,612		77,832		77,599		-		-		181,043		173,042		Monthly		6.00		6.00

Hedge derivative

-	OTHERS	-	US$		2,749		1,768		7,473		-		-		11,990		(4,790	)	-		0.00		0.00

	Total				628,539		972,487		2,863,761		1,576,078		2,706,466		8,747,331		7,322,350

(*) Bonus securitized with the future flows of credit card sales in the United States and Canada.

Class of liability for the analysis of liquidity risk ordered by date of maturity as of March 31, 2019 (Unaudited)

Debtor: TAM S.A. and Subsidiaries, Tax No. 02.012.862/0001-60, Brazil.

						More than		More than		More than
				Up to		90 days		one to		three to		More than
		Creditor		90		to one		three		five		five				Nominal			Effective		Nominal
Tax No.	Creditor	country	Currency	days		year		years		years		years		Total		value		Amortization	rate		rate
				ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$			%		%

Bank loans

0-E	NCM	Holland	US$		175		499		1,221		-		-		1,895		1,714	Monthly		6.01		6.01

Financial leases

0-E	NATIXIS	France	US$		2,440		9,428		64,458		20,534		-		96,860		92,746	Quarterly / Semiannual		6.87		6.87
0-E	WACAPOU LEASING S.A.	Luxembourg	US$		835		2,440		5,727		-		-		9,002		8,498	Quarterly		4.81		4.81
0-E	SOCIÉTÉ GÉNÉRALE MILAN BRANCH	Italy	US$		11,519		32,247		151,047		-		-		194,813		198,802	Quarterly		5.88		5.82
0-E	GA Telesis LLC	U.S.A.	US$		679		1,753		4,675		4,675		12,234		24,016		14,403	Monthly		15.62		15.62
	Total				15,648		46,367		227,128		25,209		12,234		326,586		316,163

Class of liability for the analysis of liquidity risk ordered by date of maturity as of March 31, 2019 (Unaudited)

Debtor: LATAM Airlines Group S.A. and Subsidiaries, Tax No. 89.862.200-2, Chile.

						More than		More than		More than
				Up to		90 days		one to		three to		More than
		Creditor		90		to one		three		five		five				Nominal			Effective		Nominal
Tax No.	Creditor	country	Currency	days		year		years		years		years		Total		value		Amortization	rate		rate
				ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$			%		%

Lease Liability
-	AIRCRAFT	OTHERS	US$		124,800		369,560		896,995		740,491		1,179,090		3,310,936		2,893,323	-		-		-
-	OTHER ASSETS	OTHERS	US$		3,193		8,696		18,235		16,380		18,959		65,463		65,463	-		-		-
			CLP		3		172		-		-		-		175		175	-		-		-
			UF		1,579		1,447		598		17		-		3,641		3,641	-		-		-
			COP		69		37		39		16		-		161		161	-		-		-
			EUR		257		262		191		-		-		710		710	-		-		-
			GBP		46		113		13		-		-		172		172	-				-
			MXN		33		92		241		100		-		466		466	-		-		-
			PEN		152		354		42		-		-		548		548	-		-		-

Trade and other accounts payables

-	OTHERS	OTHERS	US$		406,424		9,464		-		-		-		415,888		415,888	-		-		-
			CLP		133,179		14,269		-		-		-		147,448		147,448	-		-		-
			BRL		221,510		693		-		-		-		222,203		222,203	-		-		-
			Other currencies		536,167		3,606		-		-		-		539,773		539,773	-		-		-
Accounts payable to related parties currents
Foreign	Inversora Aeronáutica Argentina S.A.	Argentina	ARS		-		-		-		-		-		-		-	-		-		-
78.591.370-1	Bethia S.A. y Filiales	Chile	CLP		2,553		-		-		-		-		2,553		2,553	-		-		-
Extranjera	TAM Aviação Executiva e Taxi Aéreo S.A.	Brazil	BRL		16		-		-		-		-		16		16	-		-		-

	Total				1,429,981		408,765		916,354		757,004		1,198,049		4,710,153		4,292,540

	Total consolidated				2,074,168		1,427,619		4,007,243		2,358,291		3,916,749		13,784,070		11,931,053

Class of liability for the analysis of liquidity risk ordered by date of maturity as of December 31, 2018 Restated (Unaudited)

Debtor: LATAM Airlines Group S.A. and Subsidiaries, Tax No. 89.862.200-2 Chile.

						More than		More than		More than
				Up to		90 days		one to		three to		More than
		Creditor		90		to one		three		five		five				Nominal			Effective		Nominal
Tax No.	Creditor	country	Currency	days		year		years		years		years		Total		value		Amortization	rate		rate
				ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$			%		%

Loans to exporters

97.032.000-8	BBVA	Chile	US$		38,625		76,275		-		-		-		114,900		113,000	At Expiration		3.36		3.36
97.032.000-8	BBVA	Chile	UF		-		52,490		-		-		-		52,490		50,785	At Expiration		3.31		3.31
97.036.000-K	SANTANDER	Chile	US$		23,070		-		-		-		-		23,070		23,000	At Expiration		3.90		3.90
97.003.000-K	BANCO DO BRASIL	Chile	US$		201,884		-		-		-		-		201,884		200,000	At Expiration		3.64		3.64
97.951.000-4	HSBC	Chile	US$		12,094		-		-		-		-		12,094		12,000	At Expiration		3.14		3.14

Bank loans

97.023.000-9	CORPBANCA	Chile	UF		5,778		17,086		16,662		-		-		39,526		38,231	Quarterly		3.35		3.35
0-E	BLADEX	U.S.A.	US$		-		15,766		-		-		-		15,766		15,000	Semiannual		6.74		6.74
97.036.000-K	SANTANDER	Chile	US$		1,347		587		102,521		-		-		104,455		102,521	Quarterly		5.60		5.60
76.362.099-9	BTG	Chile	UF		510		1,531		69,435		-		-		71,476		65,862	At Expiration		3.10		3.10

Obligations with the public

0-E	BANK OF NEW YORK	U.S.A.	US$		-		84,375		614,375		96,250		724,063		1,519,063		1,200,000	At Expiration		7.44		7.03
97.030.000-7	ESTADO	Chile	UF		-		18,985		37,970		196,970		213,114		467,039		345,182	At Expiration		5.50		5.50

Guaranteed obligations

0-E	CREDIT AGRICOLE	France	US$		743		2,201		5,718		2,086		-		10,748		10,080	Quarterly		3.23		3.23
0-E	BNP PARIBAS	U.S.A.	US$		14,741		61,973		152,826		145,252		250,387		625,179		511,698	Quarterly		4.55		4.55
0-E	WILMINGTON TRUST COMPANY	U.S.A.	US$		31,336		96,304		248,720		289,251		509,168		1,174,779		952,758	Quarterly		4.47		4.47
0-E	CITIBANK	U.S.A.	US$		12,757		38,398		102,062		77,710		65,232		296,159		269,365	Quarterly		3.82		2.93
0-E	US BANK	U.S.A.	US$		18,406		55,112		146,045		144,670		86,076		450,309		411,684	Quarterly		4.00		2.82
0-E	NATIXIS	France	US$		14,027		42,132		111,528		92,228		124,910		384,825		324,524	Quarterly		4.69		4.69
0-E	PK AirFinance	U.S.A.	US$		2,490		7,663		25,610		3,153		-		38,916		37,615	Monthly		4.15		4.14
0-E	INVESTEC	England	US$		2,004		11,579		26,874		24,367		-		64,824		54,014	Semiannual		7.17		7.17

Otras obligaciones garantizadas

0-E	CREDIT AGRICOLE	France	US$		2,576		8,380		273,122		-		-		284,078		253,692	At Expiration		4.11		4.11
0-E	DVB BANK SE	Germany	US$		28,087		83,260		213,177		122,674		20,274		467,472		422,065	Quarterly		4.42		4.42

Other guaranteed obligations

0-E	ING	U.S.A.	US$		4,025		12,075		12,134		-		-		28,234		26,831	Quarterly		5.70		5.01
0-E	CREDIT AGRICOLE	France	US$		7,618		21,994		27,811		1,684		-		59,107		56,403	Quarterly		3.66		3.31
0-E	CITIBANK	U.S.A.	US$		14,870		44,570		83,389		42,178		-		185,007		172,158	Quarterly		4.40		3.80
0-E	PEFCO	U.S.A.	US$		5,771		13,541		3,899		-		-		23,211		22,407	Quarterly		5.64		5.02
0-E	BNP PARIBAS	U.S.A.	US$		8,467		25,214		26,933		1,641		-		62,255		59,567	Quarterly		3.90		3.58
0-E	WELLS FARGO	U.S.A.	US$		35,458		106,397		282,923		239,168		99,232		763,178		719,338	Quarterly		2.77		2.09
97.036.000-K	SANTANDER	Chile	US$		6,340		19,025		49,945		26,779		-		102,089		95,022	Quarterly		3.68		3.14
0-E	RRPF ENGINE	England	US$		1,167		3,480		9,103		8,826		4,870		27,446		23,012	Monthly		4.01		4.01
0-E	APPLE BANK	U.S.A.	US$		1,711		5,175		13,640		13,394		760		34,680		31,544	Quarterly		3.93		3.33
0-E	BTMU	U.S.A.	US$		3,489		10,485		27,605		27,062		775		69,416		63,189	Quarterly		4.06		3.46
0-E	NATIXIS	France	US$		4,242		9,870		9,815		563		-		24,490		23,161	Quarterly		4.28		4.12
0-E	KFW IPEX-BANK	Germany	US$		1,764		5,328		5,378		-		-		12,470		12,215	Quarterly		4.20		4.19
0-E	AIRBUS FINANCIAL	U.S.A.	US$		2,074		6,197		7,840		-		-		16,111		15,417	Monthly		4.19		4.19
																				0.00
Other loans

0-E	CITIBANK (*)	U.S.A.	US$		25,705		77,703		103,341		-		-		206,749		196,211	Quarterly		6.00		6.00
0-E	Boeing	U.S.A.	US$		559		1,425		55,728		-		-		57,712		55,727	At Expiration		4.01		4.01

Hedge derivative

-	OTHERS	-	US$		1,224		2,484		681		-		-		4,389		4,021	-		-		-

	Total				534,959		1,039,060		2,866,810		1,555,906		2,098,861		8,095,596		6,989,299

(*) Bonus securitized with the future flows of credit card sales in the United States and Canada.

Class of liability for the analysis of liquidity risk ordered by date of maturity as of December 31, 2018 Restated (Unaudited)

Debtor: TAM S.A. and Subsidiaries, Tax No. 02.012.862/0001-60, Brazil.

						More than		More than		More than
				Up to		90 days		one to		three to		More than
		Creditor		90		to one		three		five		five				Nominal			Effective		Nominal
Tax No.	Creditor	country	Currency	days		year		years		years		years		Total		value		Amortization	rate		rate
				ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$			%		%

Bank loans

0-E	NEDERLANDSCHE
	NCM	Holland	US$		175		499		1,332		55		-		2,061		1,851	Monthly		6.01		6.01

Financial leases

0-E	NATIXIS	France	US$		4,195		7,935		46,780		41,872		-		100,782		95,789	Quarterly / Semiannual		6.87		6.87
0-E	WACAPOU LEASING S.A.	Luxembourg	US$		839		2,433		6,542		-		-		9,814		9,226	Quarterly		4.81		4.81
0-E	SOCIÉTÉ GÉNÉRALE MILAN BRANCH	Italy	US$		11,536		32,312		161,778		-		-		205,626		208,224	Quarterly		5.88		5.82
0-E	GA Telesis LLC	U.S.A.	US$		680		1,753		4,675		4,675		11,318		23,101		13,202	Monthly		15.62		15.62

	Total				17,425		44,932		221,107		46,602		11,318		341,384		328,292

Class of liability for the analysis of liquidity risk ordered by date of maturity as of December 31, 2018 Restated (Unaudited)

Debtor: LATAM Airlines Group S.A. and Subsidiaries, Tax No. 89.862.200-2, Chile.

						More than		More than		More than
				Up to		90 days		one to		three to		More than
		Creditor		90		to one		three		five		five				Nominal			Effective		Nominal
Tax No.	Creditor	country	Currency	days		year		years		years		years		Total		value		Amortization	rate		rate
				ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$			%		%

Leases Liability
-	AIRCRAFT	OTHERS	US$		140,780		420,561		1,015,495		785,417		1,298,585		3,660,838		2,721,352	-		-		-
-	OTHER ASSETS	OTHERS	US$		4,968		14,536		25,689		20,029		21,138		86,360		86,360	-		-		-
			CLP		57		170		1		-		-		228		228	-		-		-
			UF		1,683		2,565		667		34		-		4,949		4,949	-		-		-
			COP		304		731		366		21		-		1,422		1,422	-		-		0.00
			EUR		311		431		215		-		-		957		957	-		-		0.00
			GBP		45		128		36		-		-		209		209	-		-		-
			MXN		33		92		235		115		-		475		475	-		-		-
			PEN		183		409		114		-		-		706		706	-		-		0.00

Trade and other accounts payables

-	OTHERS	OTHERS	US$		356,342		11,773		-		-		-		368,115		368,115	-		0.00		0.00
			CLP		137,296		359		-		-		-		137,655		137,655	-		0.00		0.00
			BRL		250,915		925		-		-		-		251,840		251,840	-		0.00		0.00
			Other currencies		518,448		3,918		-		-		-		522,366		522,366	-		0.00		0.00
Accounts payable to related parties currents
Foreign	Inversora Aeronáutica Argentina S.A.	Argentina	ARS		15		-		-		-		-		15		15	-		0.00		0.00
78.591.370-1	Bethia S.A. y Filiales	Chile	CLP		365		-		-		-		-		365		365	-		0.00		0.00
Extranjera	TAM Aviação Executiva e Taxi Aéreo S.A.	Brazil	BRL		2		-		-		-		-		2		2	-		0.00		0.00

	Total				1,411,747		456,598		1,042,818		805,616		1,319,723		5,036,502		4,097,016

	Total consolidated				1,964,131		1,540,590		4,130,735		2,408,124		3,429,902		13,473,482		11,414,607

The Company has fuel, interest rate and exchange rate hedging strategies involving derivatives contracts with different financial institutions. The Company has margin facilities with each financial institution in order to regulate the mutual exposure produced by changes in the market valuation of the derivatives.

At the end of 2018, the Company had delivered US$ 5.0 million in guarantees for derivative margins, corresponding to cash and standby letters of credit. As of March 31, 2019, US$ 2.5 million were delivered in guarantees corresponding to cash and standby letters of credit. The decrease was due to: i) the expiration of hedge contracts, ii) acquisition of new fuel contracts, and iii) changes in fuel prices, changes in exchange rates and interest rates.

3.2.

Capital risk management

The Company’s objectives, with respect to the management of capital, are (i) to comply with the restrictions of minimum equity and (ii) to maintain an optimal capital structure.

The Company monitors its contractual obligations and the regulatory limitations in the different countries where the entities of the group are domiciled to assure they meet the limit of minimum net equity, where the most restrictive limitation is to maintain a positive net equity.

Additionally, the Company periodically monitors the short and long term cash flow projections to assure the Company has adequate sources of funding to generate the cash requirement to face its investment and funding future commitments.

The Company international credit rating is the consequence of the Company capacity to face its long terms financing commitments. As of March 31, 2019 the Company has an international long term credit rating of BB- with stable outlook by Standard & Poor’s, a B+ rating with positive outlook by Fitch Ratings and a Ba3 rating with stable outlook by Moody’s.

3.3.

Estimates of fair value.

At March 31, 2019, the Company maintained financial instruments that should be recorded at fair value. These are grouped into two categories:

Hedge Instruments:

This category includes the following instruments:

Interest rate derivative contracts,

Fuel derivative contracts,

Currency derivative contracts.

Financial Investments:

This category includes the following instruments:

Investments in short-term Mutual Funds (cash equivalent)

Private investment funds.

The Company has classified the fair value measurement using a hierarchy that reflects the level of information used in the assessment. This hierarchy consists of 3 levels (I) fair value based on quoted prices in active markets for identical assets or liabilities, (II) fair value calculated through valuation methods based on 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) and (III) fair value based on inputs for the asset or liability that are not based on observable market data.

The fair value of financial instruments traded in active markets, such as investments acquired for trading, is based on quoted market prices at the close of the period using the current price of the buyer. The fair value of financial assets not traded in active markets (derivative contracts) is determined using valuation techniques that maximize use of available market information. Valuation techniques generally used by the Company are quoted market prices of similar instruments and / or estimating the present value of future cash flows using forward price curves of the market at period end.

The following table shows the classification of financial instruments at fair value, depending on the level of information used in the assessment:

	As of March 31, 2019										As of December 31, 2018
				Fair value measurements using values considered as									Fair value measurements using values considered as
	Fair value			Level I		Level II			Level III		Fair value		Level I		Level II		Level III
	(Unaudited)
	ThUS$			ThUS$		ThUS$			ThUS$		ThUS$		ThUS$		ThUS$		ThUS$
Assets

Cash and cash equivalents		148,625			148,625		-			-		43,653		43,653		-		-
Short-term mutual funds		148,625			148,625		-			-		43,653		43,653		-		-

Other financial assets, current		469,787			437,394		32,393			-		366,573		343,218		23,355		-
Fair value interest rate derivatives		16,493			-		16,493			-		19,460		-		19,460		-
Fair value of fuel derivatives		7,606			-		7,606			-		-		-		-		-
Fair value of foreign currency derivative		8,294			-		8,294			-		3,895		-		3,895		-
Accrued interest since the last payment date Swap of currencies		-			-		-			-		-		-		-		-
Derivative not recognized as a hedge		17,362			17,362		-			-		19,396		19,396		-		-
Private investment funds		420,016			420,016		-			-		322,428		322,428		-		-
Domestic and foreign bonds		16			16		-			-		1,394		1,394		-		-

Other financial assets, not current		-			-		-			-		-		-		-		-
Fair value derived from foreign currency		-			-		-			-		-		-		-		-

Liabilities

Other financial liabilities, current		18,069			13,801		4,268			-		33,633		7,712		25,921		-
Fair value of interest rate derivatives		2,135			-		2,135			-		335		-		335		-
Fair value of fuel derivatives		(88	)		-		(88	)		-		15,678		-		15,678		-
Fair value of foreign currency derivatives		-			-		-			-		7,587		-		7,587		-
Interest accrued since the last payment date of Currency Swap		2,221			-		2,221			-		2,321		-		2,321		-
Derivative unregistered currency
Derivative not recognized as a hedge		13,801			13,801		-			-		7,712		7,712		-		-

Other financial liabilities, non current		243			-		243			-		340		-		340		-
Fair value of interest rate derivatives		-			-		-			-		-		-		-		-
Interest accrued since the last date of Swap interest rates		243			-		243			-		340		-		340		-

Additionally, at March 31, 2019, the Company has financial instruments which are not recorded at fair value. In order to meet the disclosure requirements of fair values, the Company has valued these instruments as shown in the table below:

	As of March 31, 2019				As of December 31, 2018
	Book		Fair		Book		Fair
	value		value		value		value
	ThUS$		ThUS$		ThUS$		ThUS$
	Unaudited
Cash and cash equivalents		975,701		975,701		1,037,989		1,037,989
Cash on hand		24,973		24,973		8,974		8,974
Bank balance		323,474		323,474		331,218		331,218
Overnight		151,942		151,942		282,164		282,164
Time deposits		475,312		475,312		415,633		415,633
Other financial assets, current		16,614		16,614		17,411		17,411
Other financial assets		16,614		16,614		17,411		17,411
Trade debtors, other accounts receivable and
Current accounts receivable		1,125,376		1,125,376		1,162,582		1,162,582
Accounts receivable from entities related, current		6,549		6,549		2,931		2,931
Other financial assets, not current		57,210		57,210		58,700		58,700
Accounts receivable, non-current		5,348		5,348		5,381		5,381

Other current financial liabilities		1,772,831		1,609,366		1,397,156		1,578,835
Accounts payable for trade and other accounts payable, current		1,704,729		1,704,729		1,674,303		1,674,303
Accounts payable to entities related, current		2,569		2,569		382		382
Other financial liabilities, not current		8,790,227		6,472,087		5,864,570		5,893,387
Accounts payable, not current		462,785		462,785		483,656		483,656

The book values of accounts receivable and payable are assumed to approximate their fair values, due to their short-term nature. In the case of cash on hand, bank balances, overnight, time deposits and accounts payable, non-current, fair value approximates their carrying values.

The fair value of other financial liabilities is estimated by discounting the future contractual cash flows at the current market interest rate for similar financial instruments (Level II). In the case of Other financial assets, the valuation was performed according to market prices at period end. The book value of Other financial liabilities, current or non-current, do not include lease liabilities.

NOTE 4 - ACCOUNTING ESTIMATES AND JUDGMENTS

The Company has used estimates to value and record some of the assets, liabilities, income, expenses and commitments. Basically these estimates refer to:

(a) Evaluation of possible losses due to impairment of goodwill and intangible assets with indefinite useful life

As of March 31, 2019, goodwill amount to ThUS$ 2,283,269 (ThUS$ 2,294,072 as of December 31, 2018), while the intangible assets comprise the Airport Slots for ThUS$ 824,523 (ThUS$ 828,969 as of December 31, 2018) and Loyalty Program for ThUS$ 272,878 (ThUS$ 274,420 as of December 31, 2018).

The Company checks at least once a year whether goodwill and intangible assets with an indefinite useful life have suffered an impairment loss. For this evaluation, the Company has identified two cash generating units (CGU), "Air transport" and "Multiplus coalition and loyalty program". The book value of the surplus value assigned to each CGU as of March 31, 2019 amounts to ThUS$ 1,836,856 and ThUS$ 446,413 (ThUS$ $ 1,845,136 and ThUS$ 448,936 as of December 31, 2018), which include the following intangible assets with an indefinite useful life:

	Air Transport CGU				Coalition and loyalty Program Multiplus CGU
	As of		As of		As of		As of
	March 31		December 31,		March 31		December 31,
	2019		2018		2019		2018
	ThUS$		ThUS$		ThUS$		ThUS$
	Unaudited				Unaudited
Airport Slots		824,523		828,969		-		-
Loyalty program		-		-		272,878		274,420

The recoverable value of these cash-generating units (CGUs) has been determined based on calculations of their value in use. The principal assumptions used by the management include: growth rate, exchange rate, discount rate, fuel prices, and other economic assumptions. The estimation of these assumptions requires significant judgment by the management, as these variables feature inherent uncertainty; however, the assumptions used are consistent with Company’s internal planning. Therefore, management evaluates and updates the estimates on an annual basis, in light of conditions that affect these variables. The mainly assumptions used as well as, the corresponding sensitivity analyses are showed in Note 16.

(b)

Useful life, residual value, and impairment of property, plant, and equipment

The depreciation of assets is calculated based on the linear model, except for certain technical components depreciated on cycles and hours flown. These useful lives are reviewed on an annual basis according with the Company’s future economic benefits associated with them.

Changes in circumstances such as: technological advances, business model, planned use of assets or capital strategy may render the useful life different to the lifespan estimated. When it is determined that the useful life of property, plant, and equipment must be reduced, as may occur in line with changes in planned usage of assets, the difference between the net book value and estimated recoverable value is depreciated, in accordance with the revised remaining useful life.

Residual values are estimated in accordance with the market value that these assets will have at the end of their useful life. The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, once a year. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount (note 2.8).

(c)

Recoverability of deferred tax assets

Deferred taxes are calculated according to the liability method, on the temporary differences that arise between the tax bases of assets and liabilities and their carrying amounts. Deferred tax assets on tax losses are recognized to the extent that it is probable that future tax benefits will be available with which to offset the temporary differences. The Company makes financial and fiscal projections to evaluate the realization in time of this deferred tax asset. Additionally, it ensures that these projections are consistent with those used to measure other long-lived assets. As of March 31, 2019, the Company has recognized deferred tax assets of ThUS$ 271,650 (ThUS$ 273,529 as of December 31, 2018) and has ceased to recognize deferred tax assets on tax losses of ThUS$ 199,582 (ThUS$ 137,761 December 31, 2018) (Note 18).

(d)

Air tickets sold that will not be finally used.

The Company records the advance sale of air tickets as deferred revenue. Revenue from the sale of tickets is recognized in the income statement when the passenger transport service is provided or expired due to non-use. The Company evaluates in a monthly basis the probability of expiration of air tickets, with refund clauses, based on the history of use of air tickets. A change in this probability could have an impact on ordinary income in the year in which the change occurs and in future periods. As of March 31, 2019, deferred revenues associated with air tickets sold amounted to ThUS$ 1,137,235 (ThUS$ 1,299,304 as of December 31, 2018). A hypothetical change of one percentage point in passenger behavior with respect to use would result in an impact of up to ThUS $ 6,000 per month.

(e)

Valuation of miles and points awarded to holders of loyalty programs, pending use.

As of March 31, 2019, the deferred revenue associated with the LATAM Pass loyalty program amounts to ThUS$ 1,306,388 (ThUS$ 1,324,635 as of December 31, 2018). A hypothetical change of one percentage point in the exchange probability would result in an impact of ThUS$ 28,630 on the results of 2019 (ThUS $ 27,726 in 2018). The deferred revenues associated with the LATAM Fidelidade and Multiplus loyalty programs amount to ThUS$ 300,277 as of March 31, 2019 (ThUS$ 293,831 as of December 31, 2018). A hypothetical change of two percentage points in the number of points pending to be exchanged would result in an impact of ThUS$ 3,150 on the results of 2019 (ThUS$ 13,140 in 2018).

(f)

Provisions needs, and their valuation when required

Known contingencies are recognized when: the Company 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. The Company applies professional judgment, experience, and knowledge to use available information to determine these values, in light of the specific characteristics of known risks. This process facilitates the early assessment and valuation of potential risks in individual cases or in the development of contingent eventualities.

(g)

Leases

(i)

Discount rate

The discount rate used to calculate the lease debt corresponds, for each aircraft, to the implicit interest rate induced by the contractual elements and residual market values. The implied rate of the contract is the discount rate that gives the aggregated present value of the minimum lease payments and the unguaranteed residual value. This present value should be equal to the sum of the fair value of the leased asset and any initial direct costs of the lessor.

For those lease other than aircraft, we use our estimated incremental borrowing rate, which is derived from information available at the lease commencement date, in determining the present value of lease payments. We give consideration to our recent debt issuances as well as publicly available data for instruments with similar characteristics when calculating our incremental borrowing rates.

A 100 basis point decrease in our estimate of the rate at January 1, 2019 (the date of our adoption of the New Lease Standard) would increase our lease liability by approximately US$ 105 million.

(ii)

Lease term

In determining the lease term, there are considers all facts and circumstances that create an economic incentive to exercise an extension option, or not exercise a termination option. Extension options (or periods after termination options) are only included in the lease term if the lease is reasonably certain to be extended (or not terminated). The assessment is reviewed if a significant event or a significant change in circumstances occurs which affects this assessment and that is within the control of the lessee.

(h)

Investment in subsidiary (TAM)

The management has applied its judgment in determining that LATAM Airlines Group S.A. controls TAM S.A. and Subsidiaries, for accounting purposes, and has therefore consolidated the financial statements.

The grounds for this decision are that LATAM issued ordinary shares in exchange for the majority of circulating ordinary and preferential shares in TAM, except for those TAM shareholders who did not accept the exchange, which were subject to a squeeze out, entitling LATAM to substantially all economic benefits generated by the LATAM Group, and thus exposing it to substantially all risks relating to the operations of TAM. This exchange aligns the economic interests of LATAM and all of its shareholders, including the controlling shareholders of TAM, thus insuring that the shareholders and directors of TAM shall have no incentive to exercise their rights in a manner that would be beneficial to TAM but detrimental to LATAM. Furthermore, all significant actions necessary of the operation of the airlines require votes in favor by the controlling shareholders of both LATAM and TAM.

Since the integration of LAN and TAM operations, the most critical airline operations in Brazil have been managed by the CEO of TAM while global activities have been managed by the CEO of LATAM, who is in charge of the operation of the LATAM Group as a whole and reports to the LATAM Board.

The CEO of LATAM also evaluates the performance of LATAM Group executives and, together with the LATAM Board, determines compensation. Although Brazilian law currently imposes restrictions on the percentages of voting rights that may be held by foreign investors, LATAM believes that the economic basis of these agreements meets the requirements of accounting standards in force, and that the consolidation of the operations of LAN and LATAM is appropriate.

These estimates were made based on the best information available relating to the matters analyzed.

In any case, it is possible that events that may take place in the future could lead to their modification in future reporting periods, which would be made in a prospective manner.

NOTE 5 - SEGMENTAL INFORMATION

The Company considers that it has two operating segments: air transport and the Multiplus loyalty and coalition program.

The air transport segment corresponds to the route network for air transport and is based on the way in which the business is managed according to the centralized nature of its operations, the ability to open and close routes, as well as reallocating resources (aircraft, crew, personnel, etc.) within the network, which implies a functional interrelation between them, making them inseparable. This segment definition is one of the most common at the level of the airline industry worldwide.

The Multiplus Coalition and Loyalty Program segment, unlike the LATAM Pass and LATAM Fidelidade programs, which are frequent flyer programs that operate as a unilateral loyalty system, offers a flexible, interrelated coalition system among its members, which has 22.6 million members, together with being an entity with a separate administration and a business not directly related to air transport.

For the period ended							Coalition and
	Air						loyalty program
	transportation						Multiplus						Eliminations						Consolidated
	At March 31,						At March 31,						At March 31,						At March 31,
	2019			2018			2019			2018			2019			2018			2019			2018
	ThUS$			ThUS$			ThUS$			ThUS$			ThUS$			ThUS$			ThUS$			ThUS$
	Unaudited			Restated			Unaudited			Restated			Unaudited			Restated			Unaudited			Restated
				Unaudited						Unaudited						Unaudited						Unaudited

Income from ordinary activities from external customers (*)		2,423,316			2,613,835			20,558			-			(12,396	)		-			2,431,478			2,613,835
Passenger		2,159,820			2,318,015			20,558			-			(12,396	)		-			2,167,982			2,318,015
Freight		263,496			295,820			-			-			-			-			263,496			295,820
Income from ordinary activities from transactions with other operating segments		-			-			-			13,498			-			(13,498	)		-			-
Other operating income		71,638			72,050			22,152			44,651			-			-			93,790			116,701
Interest income		1,666			5,009			4,225			7,178			-			5,891			12,187
Interest expense		(138,446	)		(133,355	)		-			-			-			(138,446	)		(133,355	)
Total net interest expense		(136,780	)		(128,346	)		4,225			7,178			-			-			(132,555	)		(121,168	)
Depreciation and amortization		(350,005	)		(346,772	)		(1,639	)		(2,115	)		-			-			(351,644	)		(348,887	)
Material non-cash items other than depreciation and amortization		(13,291	)		(6,132	)		(3	)		-			-			-			(13,294	)		(6,132	)
Disposal of fixed assets and inventory losses		(7,805	)		(5,779	)		-			-			-			-			(7,805	)		(5,779	)
Doubtful accounts		(16,292	)		(3,598	)		(57	)		-			-			-			(16,349	)		(3,598	)
Exchange differences		8,895			811			54			-			-			-			8,949			811
Result of indexation units		1,911			2,434			-			-			-			-			1,911			2,434
Income (loss) attributable to owners of the parents (**)		(81,093	)		56,696			21,019			35,473			-			-			(60,074	)		2,169
Expenses for income tax		(1,573	)		(32,341	)		(11,468	)		(14,382	)		-			-			(13,041	)		(46,723	)
Segment profit / (loss)		(77,616	)		70,379			21,019			35,473			-			-			(56,597	)		105,852
Assets of segment		19,059,300			19,900,235			1,171,644			1,521,024			(5,437	)		(6,482	)		20,225,507			21,414,777
Segment liabilities		16,426,132			16,811,125			457,288			717,929			(20,180	)		(46,755	)		16,863,240			17,482,299
Amount of non-current asset additions		189,918			160,425			-			-			-			-			189,918			160,425
Property, plant and equipment		171,629			140,591			-			-			-			-			171,629			140,591
Intangibles other than goodwill		18,289			19,834			-			-			-			-			18,289			19,834
Purchase of non-monetary assets of segment		200,330			198,477			-			-			-			-			200,330			198,477

(*) The Company does not have any interest revenue that should be recognized as income from ordinary activities by interest.

(**) The result of the Company includes a net result of ThUS$ (582) resulting from the application of IAS 21 and IAS 29, for the subsidiaries that are in hyperinflationary economies.

For the period ended							Coalition and
	Air						loyalty program
	transportation						Multiplus						Eliminations						Consolidated
	At March 31,						At March 31,						At March 31,						At March 31,
	2019			2018			2019			2018			2019			2018			2019			2018
	ThUS$			ThUS$			ThUS$			ThUS$			ThUS$			ThUS$			ThUS$			ThUS$
	Unaudited			Restated			Unaudited			Restated			Unaudited			Restated			Unaudited			Restated
				Unaudited						Unaudited						Unaudited						Unaudited
Net cash flows from
Purchases of property, plant and equipment		181,819			178,566			7			-			-			-			181,826			178,566
Additions associated with maintenance		122,098			88,872			-			-			-			-			122,098			88,872
Other additions		59,721			89,694			7			-			-			-			59,728			89,694

Purchases of intangible assets (***)		18,196			18,940			308			971			-			-			18,504			19,911

Net cash flows from (used in) operating activities		242,751			460,763			(702	)		13,038			(15,504	)		(10,050	)		226,545			463,751
Net cash flow from (used in) investing activities		(288,207	)		(255,748	)		(315	)		(282	)		-			-			(288,522	)		(256,030	)
Net cash flows from (used in) financing activities		120,464			(507,879	)		-			(2,688	)		-			-			120,464			(510,567	)

(***)The Company does not have cash flows from purchases of intangible assets associated with maintenance.

The Company’s revenues by geographic area are as follows:

	For the period ended
	At March 31,
	2019		2018
	ThUS$		ThUS$
	Unaudited

Peru		180,933		154,974
Argentina		186,352		333,712
U.S.A.		261,846		255,511
Europe		189,803		200,166
Colombia		84,350		89,109
Brazil		855,285		894,854
Ecuador		48,907		49,018
Chile		414,197		424,800
Asia Pacific and rest of Latin America		209,805		211,691

Income from ordinary activities		2,431,478		2,613,835

Other operating income		93,790		116,701

The Company allocates revenues by geographic area based on the point of sale of the passenger ticket or cargo. Assets are composed primarily of aircraft and aeronautical equipment, which are used throughout the different countries, so it is not possible to assign a geographic area.

The Company has no customers that individually represent more than 10% of sales.

NOTE 6 - CASH AND CASH EQUIVALENTS

	As of		As of
	March 31,		December 31,
	2019		2018
	ThUS$		ThUS$
	Unaudited

Cash on hand		24,973		8,974
Bank balances		323,474		331,218
Overnight		151,942		282,164
Total Cash		500,389		622,356

Cash equivalents
Time deposits (*)		475,312		415,633
Mutual funds		148,625		43,653
Total cash equivalents		623,937		459,286
Total cash and cash equivalents		1,124,326		1,081,642

(*) Included ThUS $ 304,984 that are subject to restriction for guarantee the fulfillment of the operation indicated on note 14 and therefore are not available for the general use of the Company.

Cash and cash equivalents are denominated in the following currencies:

	As of		As of
	March 31,		December 31,
Currency	2019		2018
	ThUS$		ThUS$
	Unaudited

Argentine peso		11,267		17,786
Brazilian real		393,534		131,760
Chilean peso		210,762		415,713
Colombian peso		18,174		10,843
Euro		20,904		20,339
US Dollar		382,509		394,215
Other currencies		87,176		90,986

Total		1,124,326		1,081,642

NOTE 7 - FINANCIAL INSTRUMENTS

7.1. Financial instruments by category

As of March 31, 2019 (Unaudited)

Assets	Measured at		At fair value
	amortized		with changes		Hedge
	cost		in results		derivatives		Total
	ThUS$		ThUS$		ThUS$		ThUS$
Cash and cash equivalents		975,701		148,625		-		1,124,326
Other financial assets, current (*)		14,354		439,654		32,393		486,401
Trade and others accounts receivable, current		1,125,376		-		-		1,125,376
Accounts receivable from related entities, current		6,549		-		-		6,549
Other financial assets, non current (*)		57,210		-		-		57,210
Accounts receivable, non current		5,348		-		-		5,348
Total		2,184,538		588,279		32,393		2,805,210

Liabilities			Measured at
			amortized		Hedge
			cost		derivatives		Total
			ThUS$		ThUS$		ThUS$
Other liabilities, current				1,786,632		4,268		1,790,900
Trade and others accounts payable, current				1,704,729		-		1,704,729
Accounts payable to related entities, current				2,569		-		2,569
Other financial liabilities, non-current				8,790,227		243		8,790,470
Accounts payable, non-current				462,785		-		462,785
Total				12,746,942		4,511		12,751,453

(*) The value presented in designated at the initial moment at fair value with changes in results, corresponds mainly to private investment funds, and in loans and accounts receivable, corresponds to guarantees delivered.

As of December 31, 2018 (Restated)

Assets	Measured at		At fair value
	amortized		with changes		Hedge
	cost		in results		derivatives		Total
	ThUS$		ThUS$		ThUS$		ThUS$
Cash and cash equivalents		1,037,989		43,653		-		1,081,642
Other financial assets, current (*)		16,203		344,426		23,355		383,984
Trade and others accounts receivable, current		1,162,582		-		-		1,162,582
Accounts receivable from related entities, current		2,931		-		-		2,931
Other financial assets, non current (*)		58,700		-		-		58,700
Accounts receivable, non current		5,381		-		-		5,381
Total		2,283,786		388,079		23,355		2,695,220

Liabilities	Measured at
	amortized		Hedge
	cost		derivatives		Total
	ThUS$		ThUS$		ThUS$
	Restated				Restated
	Unaudited				Unaudited
Other liabilities, current		1,768,365		25,921		1,794,286
Trade and others accounts payable, current		1,674,303		-		1,674,303
Accounts payable to related entities, current		382		-		382
Other financial liabilities, non-current		8,359,122		340		8,359,462
Accounts payable, non-current		529,277		-		529,277
Total		12,331,449		26,261		12,357,710

(*) The value presented as initial designation as fair value through profit and loss, corresponds mainly to private investment funds; and loans and receivables corresponds to guarantees given.

7.2.

Financial instruments by currency

	As of		As of
	March 31,		December 31,
a) Assets	2019		2018
	ThUS$		ThUS$
	Unaudited		Restated
			Unaudited
Cash and cash equivalents		1,124,326		1,081,642
Argentine peso		11,267		17,786
Brazilian real		393,534		131,760
Chilean peso		210,762		415,713
Colombian peso		18,174		10,843
Euro		20,904		20,339
US Dollar		382,509		394,215
Other currencies		87,176		90,986
Other financial assets (current and non-current)		543,611		442,684
Argentine peso		133		152
Brazilian real		430,723		327,110
Chilean peso		26,145		25,972
Colombian peso		492		1,748
Euro		7,609		7,438
US Dollar		76,448		78,121
Other currencies		2,061		2,143
Trade and other accounts receivable, current		1,125,376		1,162,582
Argentine peso		76,425		82,893
Brazilian real		511,897		511,171
Chilean peso		79,267		113,168
Colombian peso		500		7,259
Euro		43,390		49,044
US Dollar		130,409		110,312
Other currencies (*)		283,488		288,735
Accounts receivable, non-current		5,348		5,381
Brazilian real		3		3
Chilean peso		5,345		5,378
Accounts receivable from related entities, current		6,549		2,931
Brazilian real		-		293
Chilean peso		65		200
US Dollar		6,484		2,438
Total assets		2,805,210		2,695,220
Argentine peso		87,825		100,831
Brazilian real		1,336,157		970,337
Chilean peso		321,584		560,431
Colombian peso		19,166		19,850
Euro		71,903		76,821
US Dollar		595,850		585,086
Other currencies		372,725		381,864

(*) See the composition of the others currencies in Note 8 Trade, other accounts receivable and non-current accounts receivable.

Liabilities

Liabilities information is detailed in the table within Note 3 Financial risk management.

NOTE 8 - TRADE AND OTHER ACCOUNTS RECEIVABLE CURRENT, AND NON-CURRENT ACCOUNTS RECEIVABLE

	As of			As of
	March 31,			December 31,
	2019			2018
	ThUS$			ThUS$
	Unaudited			Restated
				Unaudited
Trade accounts receivable		1,007,092			1,077,561
Other accounts receivable		236,759			188,393
Total trade and other accounts receivable		1,243,851			1,265,954
Less: Allowance for impairment loss		(113,127	)		(97,991	)
Total net trade and accounts receivable		1,130,724			1,167,963
Less: non-current portion – accounts receivable		(5,348	)		(5,381	)
Trade and other accounts receivable, current		1,125,376			1,162,582

The fair value of trade and other accounts receivable does not differ significantly from the book value.

For to determine the expected credit losses, the company groups accounts receivable for passenger and cargo transportation; depending on the characteristics of shared credit risk and maturity.

	As of March 31, 2019								As December 31, 2018
	Expected			Gross book		Impairment loss			Expected			Gross book		Impairment loss
Portfolio maturity	loss rate (1)			value (2)		Provision			loss rate (1)			value (2)		Provision
	%			ThUS$		ThUS$			%			ThUS$		ThUS$
	(Unaudited)

Up to date		3	%		826,114		(23,506	)		3	%		888,930		(23,933	)
From 1 to 90 days		13	%		58,902		(7,401	)		5	%		91,387		(5,014	)
From 91 to 180 days		39	%		21,403		(8,332	)		45	%		11,085		(4,983	)
From 181 to 360 days		44	%		29,701		(13,052	)		65	%		15,078		(9,864	)
more of 360 days		86	%		70,972		(60,836	)		76	%		71,081		(54,197	)
Total		11	%		1,007,092		(113,127	)		9	%		1,077,561		(97,991	)

(1) Corresponds to the expected average rate.

(2) the gross book value represents the maximum growth risk value of trade accounts receivable.

Currency balances that make up the Trade and other accounts receivable and non-current accounts receivable are the following:

	As of		As of
	March 31,		December 31,
Currency	2019		2018
	ThUS$		ThUS$
	Unaudited
Argentine Peso		76,425		82,893
Brazilian Real		511,900		511,174
Chilean Peso		84,612		118,546
Colombian peso		500		7,259
Euro		43,390		49,044
US Dollar		130,409		110,312
Other currency (*)		283,488		288,735
Total		1,130,724		1,167,963

(*) Other currencies
Australian Dollar		90,874		100,733
Chinese Yuan		43		5,106
Danish Krone		945		475
Pound Sterling		25,844		18,129
Indian Rupee		8,800		7,163
Japanese Yen		59,955		56,589
Norwegian Kroner		1,000		283
Swiss Franc		5,988		5,046
Korean Won		28,061		31,381
New Taiwanese Dollar		7,569		6,180
Other currencies		54,409		57,650
Total		283,488		288,735

The movements of the provision for impairment losses of the Trade Debtors and other accounts receivable are as follows:

				Adoption
	Opening			adjustment					(Increase)			Closing
	balance			IFRS 9 (*)			Write-offs		Decrease			balance
Periods	ThUS$			ThUS$			ThUS$		ThUS$			ThUS$
From January 1 to March 31, 2018 (Unaudited)		(87,909	)		(10,524	)		1,307		(3,858	)		(100,984	)
From April 1 to December 31, 2018		(100,984	)		-			7,470		(4,477	)		(97,991	)
From January 1 to March 31, 2019 (Unaudited)		(97,991	)		-			421		(15,557	)		(113,127	)

(*) Adjustment to the balance as of December 31, 2017 registered in retained earnings as of 01.01.2018 for the adoption of IFRS 9.

Once pre-judicial and judicial collection efforts are exhausted, the assets are written off against the allowance. The Company only uses the allowance method rather than direct write-off, to ensure control.

The historical and current renegotiations are not very relevant and the policy is to analyze case by case to classify them according to the existence of risk, determining if their reclassification corresponds to pre-judicial collection accounts.

The maximum credit-risk exposure at the date of presentation of the information is the fair value of each one of the categories of accounts receivable indicated above.

As of March 31, 2019

As of December 31, 2018

Gross exposure

Gross

Exposure net

Gross exposure

Gross

Exposure net

according to

impaired

of risk

according to

Impaired

of risk

balance

exposure

concentrations

balance

exposure

concentrations

ThUS$

Unaudited

Trade accounts receivable

1,007,092

(113,127

)

893,965

1,077,561

(97,991

)

979,570

Other accounts receivable

236,759

188,393

There are no relevant guarantees covering credit risk and these are valued when they are settled; no materially significant direct guarantees exist. Existing guarantees, if appropriate, are made through IATA.

NOTE 9 - ACCOUNTS RECEIVABLE FROM/PAYABLE TO RELATED ENTITIES

(a) Accounts Receivable

As of

Country

March 31,

December 31,

Tax No.

Related party

Relationship

of origin

Currency

2019

2018

ThUS$

Unaudited

Foreign

Qatar Airways

Indirect shareholder

Qatar

US$

6,489

1,907

78.591.370-1

Bethia S.A. and Subsidiaries

Related director

Chile

CLP

988

Foreign

Inversora Aeronáutica Argentina S.A.

Related director

Argentina

US$

87.752.000-5

Granja Marina Tornagaleones S.A.

Common shareholder

Chile

CLP

96.810.370-9

Inversiones Costa Verde Ltda. y CPA.

Related director

Chile

CLP

Total current assets

6,549

2,931

(b) Accounts payable

As of

Country

March 31,

December 31,

Tax No.

Related party

Relationship

of origin

Currency

2019

2018

ThUS$

Unaudited

78.591.370-1

Bethia S.A. and Subsidiaries

Related director

Chile

CLP

2,553

365

Foreign

Inversora Aeronáutica Argentina S.A.

Related director

Argentina

US$

Foreign

TAM Aviação Executiva e Taxi Aéreo S.A.

Common shareholder

Brazil

BRL

Total current liabilities

2,569

382

Transactions between related parties have been carried out on free-trade conditions between interested and duly-informed parties. The transaction times are between 30 and 45 days, and the nature of settlement of the transactions is monetary.

NOTE 10 -INVENTORIES

The composition of Inventories is as follows:

	As of		As of
	March 31,		December 31,
	2019		2018
	ThUS$		ThUS$
	Unaudited
Technical stock		259,452		233,276
Non-technical stock		42,207		46,068
Total		301,659		279,344

The items included in this heading are spare parts and materials that will be used mainly in consumption in in-flight and maintenance services provided to the Company and third parties, which are valued at average cost, net of provision for obsolescence, as per the following detail:

	As of		As of
	March 31,		December 31,
	2019		2018
	ThUS$		ThUS$
	Unaudited
Provision for obsolescence Technical stock		20,644		20,500
Provision for obsolescence Non-technical stock		7,171		4,621
Total		27,815		25,121

The resulting amounts do not exceed the respective net realization values.

For the period ended March 31, 2019, the Company recorded ThUS$ 32,239 (ThUS$ 32,456 for the period ended March 31, 2018) in results, mainly related to on-board consumption and maintenance, which is part of the Cost of sales.

NOTE 11 - OTHER FINANCIAL ASSETS

The composition of other financial assets is as follows:

	Current Assets				Non-current assets				Total Assets
	As of		As of		As of		As of		As of		As of
	March 31,		December 31,		March 31,		December 31,		March 31,		December 31,
	2019		2018		2019		2018		2019		2018
	ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$
	Unaudited				Unaudited				Unaudited
(a) Other financial assets
Private investment funds		420,016		322,428		-		-		420,016		322,428
Deposits in guarantee (aircraft)		9,330		9,610		36,728		37,636		46,058		47,246
Guarantees for margins of derivatives		291		661		-		-		291		661
Other investments		-		-		494		494		494		494
Domestic and foreign bonds		16		1,394		-		-		16		1,394
Other guarantees given		6,993		7,140		19,988		20,570		26,981		27,710
Subtotal of other financial assets		436,646		341,233		57,210		58,700		493,856		399,933
(b) Hedging assets
Fair value of interest rate derivatives		16,493		19,460		-		-		16,493		19,460
Fair value of foreign currency derivatives		8,294		3,895		-		-		8,294		3,895
Fair value of fuel price derivatives		7,606		-		-		-		7,606		-
Subtotal of hedging assets		32,393		23,355		-		-		32,393		23,355
(c) Derivatives not recognized as a hedge
Foreign currency derivatives not recognized as a hedge		17,362		19,396		-		-		17,362		19,396
Subtotal of derivatives not recognized as a hedge		17,362		19,396		-		-		17,362		19,396
Total Other Financial Assets		486,401		383,984		57,210		58,700		543,611		442,684

The different derivative hedging contracts maintained by the Company at the end of each period are described in Note 19.

NOTE 12 - OTHER NON-FINANCIAL ASSETS

The composition of other non-financial assets is as follows:

	Current assets				Non-current assets				Total Assets
	As of		As of		As of		As of		As of		As of
	March 31,		December 31,		March 31,		December 31,		March 31,		December 31,
	2019		2018		2019		2018		2019		2018
	ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$
	Unaudited		Restated		Unaudited		Restated		Unaudited		Restated
			Unaudited				Unaudited				Unaudited
(a) Advance payments

Aircraft insurance and other		9,480		16,483		-		-		9,480		16,483
Others		17,108		20,105		3,417		4,460		20,525		24,565
Subtotal advance payments		26,588		36,588		3,417		4,460		30,005		41,048

(b) Contract assets (1)

GDS costs		14,410		14,708		-		-		14,410		14,708
Credit card commissions		17,048		21,614		-		-		17,048		21,614
Travel agencies commissions		13,534		12,635		-		-		13,534		12,635
Subtotal advance payments		44,992		48,957		-		-		44,992		48,957

(c) Other assets

Aircraft maintenance reserve (2)		-		831		51,836		51,836		51,836		52,667
Sales tax		175,665		187,410		39,150		38,186		214,815		225,596
Other taxes		11,582		15,255		-		-		11,582		15,255
Contributions to Société Internationale de Télécommunications Aéronautiques ("SITA")		258		258		739		739		997		997
Judicial deposits		-		-		142,838		132,267		142,838		132,267
Others		-		1,177		54		53		54		1,230
Subtotal other assets		187,505		204,931		234,617		223,081		422,122		428,012

Total Other Non - Financial Assets		259,085		290,476		238,034		227,541		497,119		518,017

(1) Movement of Contracts assets:

					Adjustments		Difference
					by the application		by
	Initial balance		Activation		IFRS 15		conversion			Amortization			Final balance
	ThUS$		ThUS$		ThUS$		ThUS$			ThUS$			ThUS$
From January 1 to March 31, 2018 (Unaudited)		-		57,919		54,361		-			(69,400	)		42,880
From April 1 to December 31, 2018		42,880		122,252		-		(5,020	)		(111,155	)		48,957
From January 1 to March 31, 2019 (Unaudited)		48,957		48,771		-		(4,937	)		(47,799	)		44,992

(2) Aircraft maintenance reserves reflect prepayment deposits made by the group to lessors of certain aircraft under operating lease agreements in order to ensure that funds are available to support the scheduled heavy maintenance of the aircraft.

These amounts are calculated based on performance measures, such as flight hours or cycles, are paid periodically (usually monthly) and are contractually required to be repaid to the lessee upon the completion of the required maintenance of the leased aircraft. At the end of the lease term, any unused maintenance reserves are either returned to the Company in cash or used to offset amounts that we may owe the lessor as a maintenance adjustment.

In some cases (five lease agreements), if the maintenance cost incurred by LATAM is less than the corresponding maintenance reserves, the lessor is entitled to retain those excess amounts at the time the heavy maintenance is performed. The Company periodically reviews its maintenance reserves for each of its leased aircraft to ensure that they will be recovered, and recognizes an expense if any such amounts are less than probable of being returned. The cost of aircraft maintenance in the last years has been higher than the related maintenance reserves for all aircraft.

As of March 31, 2019, maintenance reserves amount to ThUS$ 51,836 (ThUS$ 52,667 as of December 31, 2018), corresponding to 8 aircraft that maintain remaining balances, which will be settled in the next maintenance or return.

Aircraft maintenance reserves are classified as current or non-current depending on the dates when the related maintenance is expected to be performed (Note 2.23).

NOTE 13 - NON-CURRENT ASSETS AND DISPOSAL GROUP CLASSIFIED AS HELD FOR SALE

Non-current assets and groups in expropriation held for sale at March 31, 2019 and December 31, 2018, are detailed below:

	As of		As of
	March 31,		December 31,
	2019		2018
	ThUS$		ThUS$
	Unaudited
Current assets
Aircraft		-		265
Engines and rotables		1,852		5,299
Other assets		154		204
Total		2,006		5,768

The balances are presented at the lower of book value and fair value less cost to sell. The fair value of these assets was determined based on quoted prices in active markets for similar assets or liabilities. This is a level II measurement as per the fair value hierarchy set out in note 3.3 (2). There were no transfers between levels for recurring fair value measurements during the year.

(a) Assets reclassified from Property, plant and equipment to Non-current assets or groups of assets for disposal classified as held for sale

As of March 31, 2019, adjustments were recognized for ThUS$ 200.0 to register these assets at their net realizable value.

Additionally, during the period 2019, the sale of one motor spare Boeing 767 was produced.

(b) Assets reclassified from Inventories to Non-current assets or groups of assets for disposal classified as held for sale

During in the first quarter of 2017, technical stocks of the fleet Airbus A330, were reclassified from Inventories to Non-current assets or groups of assets for disposal classified as held for sale.

As of March 31, 2019, has been recognized of US $ 3.1 million to record these assets at their net realizable value.

NOTE 14 - INVESTMENTS IN SUBSIDIARIES

(a)

Investments in subsidiaries

The Company has investments in companies recognized as investments in subsidiaries. All the companies defined as subsidiaries have been consolidated within the financial statements of LATAM Airlines Group S.A. and Subsidiaries. The consolidation also includes special-purpose entities.

Detail of significant subsidiaries and summarized financial information:

Ownership

As of

Country of

Functional

March 31,

December 31,

Name of significant subsidiary

incorporation

currency

2019

2018

Unaudited

Lan Perú S.A.

Peru

US$

70.00000

Lan Cargo S.A.

Chile

US$

99.89803

Lan Argentina S.A.

Argentina

ARS

99.86560

Transporte Aéreo S.A.

Chile

US$

100.00000

Aerolane Líneas Aéreas Nacionales del Ecuador S.A.

Ecuador

US$

100.00000

Aerovías de Integración Regional, AIRES S.A.

Colombia

COP

99.19061

TAM S.A.

Brazil

BRL

99.99938

The consolidated subsidiaries do not have significant restrictions for transferring funds to controller.

Summary financial information of significant subsidiaries

													Results for the period
	Statement of financial position as of March 31, 2019												ended March 31, 2019
	Total		Current		Non-current		Total		Current		Non-current				Net
Name of significant subsidiary	Assets		Assets		Assets		Liabilities		Liabilities		Liabilities		Revenue		Income
	ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$
	Unaudited												Unaudited
Lan Perú S.A.		348,683		309,400		39,283		347,032		345,576		1,456		282,733		(3,266	)
Lan Cargo S.A.		654,634		367,145		287,489		476,696		435,526		41,170		67,892		1,341
Lan Argentina S.A.		317,763		311,032		6,731		80,961		78,586		2,375		61,734		(10,813	)
Transporte Aéreo S.A.		352,229		94,153		258,076		148,121		48,142		99,979		85,610		1,903
Aerolane Líneas Aéreas Nacionales del Ecuador S.A.		108,242		96,325		11,917		98,226		87,848		10,378		59,551		1,097
Aerovías de Integración Regional, AIRES S.A.		112,931		51,001		61,930		77,354		69,035		8,319		68,878		(3,393	)
TAM S.A. (*)		4,370,696		1,962,007		2,408,689		3,283,500		1,919,200		1,364,300		1,141,875		(98,911	)

													Results for the period
	Statement of financial position as of December 31, 2018												ended March 31, 2018
	Total		Current		Non-current		Total		Current		Non-current				Net
Name of significant subsidiary	Assets		Assets		Assets		Liabilities		Liabilities		Liabilities		Revenue		Income
	ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$
	Restated												Restated
	Unaudited												Unaudited
Lan Perú S.A.		419,325		379,490		39,835		409,221		406,159		3,062		292,954		2,732
Lan Cargo S.A.		513,367		243,499		269,868		336,715		292,399		44,316		64,885		(34,248	)
Lan Argentina S.A.		243,230		235,919		7,311		239,234		236,786		2,448		111,013		37,410
Transporte Aéreo S.A.		331,496		72,597		258,899		129,233		28,277		100,956		89,652		(17,490	)
Aerolane Líneas Aéreas Nacionales del Ecuador S.A.		108,735		96,564		12,171		98,238		89,921		8,317		57,204		1,995
Aerovías de Integración Regional, AIRES S.A.		116,352		55,865		60,487		77,984		69,150		8,834		75,501		8,804
TAM S.A. (*)		4,420,546		2,007,830		2,412,716		3,256,017		1,832,796		1,423,221		1,211,235		358,616

(*) Corresponds to consolidated information of TAM S.A. and Subsidiaries

(b) Non-controlling

			As of		As of		As of			As of
Equity		Country	March 31,		December 31,		March 31,			December 31,
	Tax No.	of origin	2019		2018		2019			2018
			%		%		ThUS$			ThUS$
			Unaudited				Unaudited			Restated
										Unaudited
Lan Perú S.A	0-E	Peru		30.00000		30.00000		499			3,032
Lan Cargo S.A. and Subsidiaries	93.383.000-4	Chile		0.10196		0.10196		476			(101	)
Inversora Cordillera S.A. and Subsidiaries	0-E	Argentina		0.13940		0.13940		19,661			8,684
Lan Argentina S.A.	0-E	Argentina		0.02890		0.02890		(405	)		(472	)
Americonsult de Guatemala S.A.	0-E	Guatemala		1.00000		1.00000		1			1
Americonsult S.A. and Subsidiaries	0-E	Mexico		0.20000		0.20000		(2	)		1
Americonsult Costa Rica S.A.	0-E	Costa Rica		1.00000		1.00000		12			11
Linea Aérea Carguera de Colombiana S.A.	0-E	Colombia		10.00000		10.00000		(1,030	)		(462	)
Aerolíneas Regionales de Integración Aires S.A.	0-E	Colombia		0.79880		0.79880		349			378
Transportes Aereos del Mercosur S.A.	0-E	Paraguay		5.02000		5.02000		1,921			1,740
Multiplus S.A.	0-E	Brazil		27.26000		27.26000		72,691			67,096
Total								94,173			79,908

			For the period ended				For the period ended
Incomes		Country	March 31,		March 31,		March 31,
	Tax No.	of origin	2019		2018		2019			2018
			%		%		ThUS$			ThUS$
			Unaudited				Unaudited

Lan Perú S.A	0-E	Peru		30.00000		30.00000		(2,000	)		3,533
Lan Cargo S.A. and Subsidiaries	93.383.000-4	Chile		0.10196		0.10196		9			12
Promotora Aerea Latinoamericana S.A. and Subsidiaries	0-E	Mexico		0.00000		51.00000		-			261
Inversora Cordillera S.A. and Subsidiaries	0-E	Argentina		0.13940		0.13940		82			-
Lan Argentina S.A.	0-E	Argentina		0.02890		0.02842		19			-
Americonsult S.A. and Subsidiaries	0-E	Mexico		0.00000		0.20000		(2	)		-
Linea Aérea Carguera de Colombiana S.A.	0-E	Colombia		10.00000		10.00000		(569	)		58
Aerolíneas Regionales de Integración Aires S.A.	0-E	Colombia		0.79880		0.80944		(27	)		(2	)
Transportes Aereos del Mercosur S.A.	0-E	Paraguay		5.02000		5.02000		239			220
Multiplus S.A.	0-E	Brazil		27.26000		27.26000		5,726			9,601
Total								3,477			13,683

(*) On February 28, 2019, the company TAM, a subsidiary of LATAM Airlines Group SA, received an official letter from the Comissão de Valores Mobiliários, in which it communicates the acceptance to the request for registration of the public offer for the acquisition of the shares of its subsidiary Multiplus SA, corresponding to the minority shareholders of said company, which will give rise to the cancellation of the registration and exit of the special trading segment called "Novo Mercado".

NOTE 15 - INTANGIBLE ASSETS OTHER THAN GOODWILL

The details of intangible assets are as follows:

	Classes of intangible assets				Classes of intangible assets
	(net)				(gross)
	As of		As of		As of		As of
	March 31,		December 31,		March 31,		December 31,
	2019		2018		2019		2018
	ThUS$		ThUS$		ThUS$		ThUS$
	Unaudited				Unaudited
Airport slots		824,523		828,969		824,523		828,969
Loyalty program		272,878		274,420		272,878		274,420
Computer software		177,330		156,038		564,749		529,009
Developing software		132,646		151,853		132,646		151,853
Trademarks (1)		26,541		29,361		53,091		53,391
Other assets		406		431		1,315		1,325
Total		1,434,324		1,441,072		1,849,202		1,838,967

Movement in Intangible assets other than goodwill:

	Computer									Trademarks
	software			Developing			Airport			and loyalty
	Net			software			slots (2)			program (1) ( 2)			Total
	ThUS$			ThUS$			ThUS$			ThUS$			ThUS$

Opening balance as of January 1, 2018		160,970			123,415			964,513			368,349			1,617,247
Additions		750			19,084			-			-			19,834
Withdrawals		(27	)		(2	)		-			-			(29	)
Transfer software		35,956			(35,960	)		-			-			(4	)
Foreing exchange		(340	)		(147	)		(4,405	)		(1,751	)		(6,643	)
Amortization		(12,590	)		-			-			(3,112	)		(15,702	)
Closing balance as of March 31, 2018 (Unaudited)		184,719			106,390			960,108			363,486			1,614,703

Opening balance as of April 1, 2018		184,719			106,390			960,108			363,486			1,614,703
Additions		42			75,216			-			-			75,258
Withdrawals		(376	)		(122	)		-			-			(498	)
Transfer software		23,719			(25,127	)		-			-			(1,408	)
Foreign exchange		(9,796	)		(4,504	)		(131,139	)		(51,770	)		(197,209	)
Amortization		(41,959	)		-			-			(7,935	)		(49,894	)
Hyperinflation Argentina		62			-			-			-			62
Adjustment application IAS 29 by hyperinflation Argentina		58			-			-			-			58
Closing balance as of December 31, 2018		156,469			151,853			828,969			303,781			1,441,072

Opening balance as of January 1, 2019		156,469			151,853			828,969			303,781			1,441,072
Additions		139			18,150			-			-			18,289
Withdrawals		-			(10	)		-			-			(10	)
Transfer software		37,007			(37,075	)		-			-			(68	)
Foreign exchange		(431	)		(272	)		(4,446	)		(1,707	)		(6,856	)
Amortization		(15,448	)		-			-			(2,655	)		(18,103	)
Closing balance as of March 31, 2019 (Unaudited)		177,736			132,646			824,523			299,419			1,434,324

In 2016, the Company resolved to adopt a unique name and identity, and announced that the group's brand will be LATAM, which united all the companies under a single image.

The estimate of the new useful life is 5 years, equivalent to the period necessary to complete the change of image.

See Note 2.5

The amortization of each period is recognized in the consolidated income statement in the administrative expenses. The cumulative amortization of computer programs and brands as of March 31, 2019, amounts to ThUS $ 457,162 (ThUS $ 439,059 as of December 31, 2018).

NOTE 16 – GOODWILL

Goodwill as of March 31, 2019, amounts to ThUS $ 2,283,269 (ThUS $ 2,294,072 as of December 31, 2018). The goodwill movement, separated by CGU, includes the following:

				Coalition
Movement of Goodwill, separated by CGU:				and loyalty
	Air			program
	Transport			Multiplus			Total
	ThUS$			ThUS$			ThUS$
Opening balance as of January 1, 2018		2,146,692			525,858			2,672,550
Increase (decrease) due to exchange rate differences		(4,838	)		(2,500	)		(7,338	)
Closing balance as of March 31, 2018 (Unaudited)		2,141,854			523,358			2,665,212
Opening balance as of April 1, 2018		2,141,854			523,358			2,665,212
Increase (decrease) due to exchange rate differences		(295,365	)		(74,422	)		(369,787	)
Adjustment IAS 29, hyperinflation Argentina		335			-			335
Others		(1,688	)		-			(1,688	)
Closing balance as of December 31, 2018		1,845,136			448,936			2,294,072
Opening balance as of January 1, 2019		1,845,136			448,936			2,294,072
Increase (decrease) due to exchange rate differences		(8,280	)		(2,523	)		(10,803	)
Closing balance as of March 31, 2019 (Unaudited)		1,836,856			446,413			2,283,269

The Company has two cash- generating units (CGUs), “Air transportation” and, “Coalition and loyalty program Multiplus”. The CGU "Air transport" considers the transport of passengers and cargo, both in the domestic markets of Chile, Peru, Argentina, Colombia, Ecuador and Brazil, and in a developed series of regional and international routes in America, Europe and Oceania, while the CGU "Coalition and loyalty program Multiplus” works with an integrated network associated companies in Brazil.

The recoverable amounts of cash-generating units have been determined based on value-in-use calculations. These calculations require the use of expected cash flows, 5 years after tax, which are based on the budget approved by the Board. Cash flows beyond the budget period are extrapolated using the estimated growth rates, which do not exceed the average rates of long-term growth.

Management establish rates for annual growth, discount, inflation and exchange for each cash generating, as well as fuel prices, based on their key assumptions. The annual growth rate is based on past performance and management's expectations over market developments in each country where it operates. The discount rates used are in American Dollars for the CGU "Air transportation" and Brazilian Reals for CGU "Program coalition loyalty Multiplus", both after taxes and reflect specific risks related to each country where the Company operates. Inflation and exchange rates are based on available data for each country and the information provided by the Central Bank of each country, and the fuel price is determined based on estimated production levels, competitive environment market in which they operate and its business strategy.

As of December 31, 2018 the recoverable values were determined using the following assumptions presented below:

		Air transportation	Coalition and loyalty
		CGU	program Multiplus CGU (2)
Annual growth rate (Terminal)	%	1.0 - 2.0	4.0 - 5.0
Exchange rate (1)	R$/US$	3.7 - 4.6	3.5 - 4.3
Discount rate based on the weighted average cost of capital (WACC)	%	8.07 - 10.07
Discount rate based on cost of equity (CoE)	%	-	12.0 - 13.0
Fuel Price from futures price curves commodities markets	US$/barrel	75-80

(1) In line with the expectations of the Central Bank of Brazil

(2) The flows, like the growth and discount rates, are denominated in reais.

The result of the impairment test, which includes a sensitivity analysis of the main variables, showed that the estimated recoverable amount is higher than carrying value of the book value of net assets allocated to the cash generating unit, and therefore impairment was not detected.

CGU´s are sensitive to rates for annual growth, discount and exchanges rates. The sensitivity analysis included the individual impact of changes in estimates critical in determining the recoverable amounts, namely:

					Decrease
	Increase		Increase		Minimum
	Maximum		Maximum		terminal
	WACC		CoE		growth rate
	%		%		%
Air transportation CGU		10.07		-		1.0
Coalition and loyalty program Multiplus CGU		-		13.00		4.0

In none of the previous cases impairment in the cash- generating unit was presented.

As of March 31, 2019, no impairment indicator have been identified either for the CGU Multiplus coalition and loyalty program and for the Air Transport CGU that require impairment test.

NOTE 17 - PROPERTY, PLANT AND EQUIPMENT

The composition by category of Property, plant and equipment is as follows:

	Gross Book Value				Accumulated depreciation						Net Book Value
	As of		As of		As of			As of			As of		As of
	March 31,		December 31,		March 31,			December 31,			March 31,		December 31,
	2019		2018		2019			2018			2019		2018
	ThUS$		ThUS$		ThUS$			ThUS$			ThUS$		ThUS$
	Unaudited		Restated		Unaudited			Restated			Unaudited		Restated
			Unaudited					Unaudited					Unaudited
Construction in progress (1)		605,854		630,320		-			-			605,854		630,320
Land		53,166		45,424		-			-			53,166		45,424
Buildings		179,691		179,907		(68,795	)		(67,342	)		110,896		112,565
Plant and equipment		13,460,687		13,333,837		(4,482,807	)		(4,361,337	)		8,977,880		8,972,500
Own aircraft		12,686,766		12,595,223		(4,212,763	)		(4,096,975	)		8,474,003		8,498,248
Other (2)		773,921		738,614		(270,044	)		(264,362	)		503,877		474,252
Machinery		34,045		34,253		(27,939	)		(27,659	)		6,106		6,594
Information technology equipment		161,855		160,936		(140,096	)		(138,372	)		21,759		22,564
Fixed installations and accessories		182,717		182,629		(114,215	)		(111,620	)		68,502		71,009
Motor vehicles		68,001		69,653		(59,602	)		(60,531	)		8,399		9,122
Leasehold improvements		224,280		211,322		(132,903	)		(128,055	)		91,377		83,267
Right of use		5,159,191		4,987,953		(2,537,630	)		(2,439,509	)		2,621,561		2,548,444
Aircraft		4,932,850		4,761,529		(2,397,737	)		(2,305,195	)		2,535,113		2,456,334
Other assets		226,341		226,424		(139,893	)		(134,314	)		86,448		92,110
Total		20,129,487		19,836,234		(7,563,987	)		(7,334,425	)		12,565,500		12,501,809

(1) As of March 31, 2019, includes advances paid to aircraft manufacturers for ThUS$ 560,967 (ThUS$ 612,236 as of December 31, 2018)

(2) Consider mainly rotables and tools.

a) Movement in the different categories of Property, plant and equipment:

													Information			Fixed									Rights			Property,
										Plant and			technology			installations			Motor			Leasehold			of			Plant and
	Construction						Buildings			equipment			equipment			& accessories			vehicles			improvements			use			equipment
	in progress			Land			net			net			net			net			net			net			net			net
	ThUS$			ThUS$			ThUS$			ThUS$			ThUS$			ThUS$			ThUS$			ThUS$			ThUS$			ThUS$

Opening balance as of January 1, 2018 Restated (Unaudited)		556,822			49,780			124,548			9,138,591			30,156			80,777			436			84,225			2,865,317			12,930,652
Additions		1,210			-			-			136,598			2,729			51			3			-			70,963			211,554
Disposals		-			-			(791	)		-			-			(45	)		-			-			-			(836	)
Retirements		(6	)		-			-			(6,844	)		(86	)		(22	)		-			(4	)		-			(6,962	)
Depreciation expenses		-			-			(1,614	)		(180,588	)		(3,376	)		(3,348	)		(45	)		(7,188	)		(97,645	)		(293,804	)
Foreign exchange		(6	)		(105	)		(128	)		(3,026	)		(58	)		(111	)		(1	)		(81	)		(207	)		(3,723	)
Other increases (decreases)		41,342			-			-			3,869			5			2,802			-			8,753			(2,434	)		54,337
Changes, total		42,540			(105	)		(2,533	)		(49,991	)		(786	)		(673	)		(43	)		1,480			(29,323	)		(39,434	)

Closing balance as of March 31, 2018 Restated (Unaudited)		599,362			49,675			122,015			9,088,600			29,370			80,104			393			85,705			2,835,994			12,891,218

Opening balance as of April 1, 2018 Restated (Unaudited)		599,362			49,675			122,015			9,088,600			29,370			80,104			393			85,705			2,835,994			12,891,218
Additions		6,717			-			-			498,768			2,266			13			21			20,410			255,335			783,530
Disposals		-			(8	)		(622	)		(4,747	)		(30	)		(28	)		(14	)		-			-			(5,449	)
Retirements		(74	)		-			(19	)		(56,929	)		(8	)		(5	)		-			-			-			(57,035	)
Depreciation expenses		-			-			(4,605	)		(524,989	)		(8,301	)		(9,190	)		(101	)		(20,578	)		(293,493	)		(861,257	)
Foreign exchange		(707	)		(4,243	)		(4,116	)		(91,461	)		(1,760	)		(8,388	)		(27	)		(2,270	)		(13,544	)		(126,516	)
Other increases (decreases)		24,649			-			(88	)		74,472			728			7,392			273			-			(235,848	)		(128,422	)
Hyperinflation Argentina		373			-			-			3,868			299			1,111			89			-			-			5,740
Changes, total		30,958			(4,251	)		(9,450	)		(101,018	)		(6,806	)		(9,095	)		241			(2,438	)		(287,550	)		(389,409	)

Closing balance as of December 31, 2018 Restated (Unaudited)		630,320			45,424			112,565			8,987,582			22,564			71,009			634			83,267			2,548,444			12,501,809

Opening balance as of January 1, 2019 (Restated Unaudited)		630,320			45,424			112,565			8,987,582			22,564			71,009			634			83,267			2,548,444			12,501,809
Additions		6,879			7,950			-			188,281			1,442			13			14			13,127			171,629			389,335
Disposals		-			-			-			(28	)		-			-			(11	)		-			-			(39	)
Retirements		-			-			-			(9,661	)		-			-			-			-			-			(9,661	)
Depreciation expenses		-			-			(1,521	)		(186,049	)		(2,363	)		(2,908	)		(27	)		(4,950	)		(97,819	)		(295,637	)
Foreign exchange		(92	)		(208	)		(148	)		(3,835	)		95			(339	)		(115	)		(67	)		(693	)		(5,402	)
Other increases (decreases)		(31,253	)		-			-			15,600			21			727			-			-			-			(14,905	)
Changes, total		(24,466	)		7,742			(1,669	)		4,308			(805	)		(2,507	)		(139	)		8,110			73,117			63,691

Closing balance as of March 31, 2019 (Unaudited)		605,854			53,166			110,896			8,991,890			21,759			68,502			495			91,377			2,621,561			12,565,500

(b) Composition of the fleet:

		Aircraft included						Aircraft included
		in Property,						as Rights					Total
		plant and equipment						of use assets					fleet
		As of			As of			As of		As of			As of			As of
Aircraft	Model	March 31,			December 31,			March 31,		December 31,			March 31,			December 31,
		2019			2018			2019		2018			2019			2018
		Unaudited						Unaudited					Unaudited
Boeing 767	300ER		33			33			2		2			35			35
Boeing 767	300F		9	⁽¹⁾		9	⁽¹⁾		1		1			10	⁽¹⁾		10	⁽¹⁾
Boeing 777	300ER		4			4			6		6			10			10
Boeing 777	200ER		-			-			2		2			2			2
Boeing 787	800		6			6			4		4			10			10
Boeing 787	900		4			4			10		10			14			14
Airbus A319	100		37			37			9		9			46			46
Airbus A320	200		97	⁽²⁾		97	⁽²⁾		33		34			130	⁽²⁾		131	⁽²⁾
Airbus A320	NEO		1			1			5		3			6			4
Airbus A321	200		30			30			19		19			49			49
Airbus A350	900		5	⁽³⁾		5	⁽³⁾		5		4	⁽³⁾		10	⁽³⁾		9	⁽³⁾
Total			226			226			96		94			322			320

(1) One aircraft leased to Aerotransportes Mas de Carga S.A. de C.V. to December 2018

(2) Three aircraft leased to Salam Air and two to Sundair

(3) Three aircraft leased to Qatar Air. Two in rights of use assets and one in Property, plant and equipment.

	Method	Useful life (years)
		minimum		maximum
Buildings	Straight line without residual value		20		50
Plant and equipment	Straight line with residual value of 20% in the short-haul fleet and 36% in the long-haul fleet. (*)		5		30
Information technology equipment	Straight line without residual value		5		10
Fixed installations and accessories	Straight line without residual value		10		10
Motor vehicle	Straight line without residual value		10		10
Leasehold improvements	Straight line without residual value		5		5
Assets for rights of use	Straight line without residual value		1		25

(*) Except in the case of the Boeing 767 300ER and Boeing 767 300F fleets that consider a lower residual value due to the extension of their useful life to 22 and 30 years respectively. Additionally, certain technical components are depreciated based on cycles and hours flown.

The aircraft with remarketing clause (**) under modality of financial leasing, which are depreciated according to the duration of their contracts, between 12 and 18 years. Its residual values are estimated according to market value at the end of such contracts.

(**) Aircraft with remarketing clause are those that are required to sell at the end of the contract.

As of March 31, 2019, the charge to income for the depreciation of the period, which is included in the consolidated statement of income, amounts to ThUS $ 295,637 and ThUS $ 293,804 for the same period of the year 2018; those amounts include depreciation of assets for right of use, for ThUS $ 97,819 and ThUS $ 97,645, respectively). This expense is recognized in the cost of sales and administrative expenses of the consolidated statement of income.

(d) Additional information regarding Property, plant and equipment:

(i) Property, plant and equipment pledged as guarantee:

Description of Property, plant and equipment pledged as guarantee:

			As of				As of
			March 31,				December 31,
			2019				2018
Guarantee	Assets		Existing		Book		Existing		Book
agent (1)	committed	Fleet	Debt		Value		Debt		Value
			ThUS$		ThUS$		ThUS$		ThUS$
			Unaudited
Wilmington	Aircraft and engines	Airbus A319		90,721		241,199		96,057		234,329
Trust Company		Airbus A320		91,839		232,080		98,903		220,390
		Airbus A321 / A350		574,642		673,110		587,382		682,639
		Boeing 767		77,527		207,325		82,793		206,868
		Boeing 787		653,688		726,276		672,065		736,858
Banco Santander S.A.	Aircraft and engines	Airbus A320		-		-		172,474		275,511
		Airbus A321		-		-		25,661		41,957
BNP Paribas	Aircraft and engines	Airbus A319		8,990		18,662		26,702		45,520
Credit Agricole	Aircraft and engines	Airbus A319		10,495		38,550		11,154		31,865
		Airbus A320		143,960		152,954		134,328		132,301
		Airbus A350		22,439		24,815		22,439		24,939
		Boeing 767		18,697		38,510		21,830		43,568
		Boeing 787		74,023		40,724		74,023		42,228
Wells Fargo	Aircraft and engines	Airbus A320		-		-		196,540		285,877
Bank of Utah	Aircraft and engines	Airbus A320 / A350		544,716		611,821		556,019		630,065
Natixis	Aircraft and engines	Airbus A320		191,055		247,335		-		-
		Airbus A321		123,222		157,463		324,524		410,771
Citibank N. A.	Aircraft and engines	Airbus A320		73,761		130,359		78,049		132,296
		Airbus A321		27,129		67,553		28,938		70,333
PK AirFinance US, Inc.	Aircraft and engines	Airbus A320		-		-		37,615		52,435
Banco BBVA	Land and buildings (3)			51,805		63,898		50,785		64,500
Total direct guarantee				2,778,709		3,672,634		3,298,281		4,365,250

(1)

For syndicated loans, is the Guarantee Agent that, represent different creditors.

(2)

Corresponds to a debt classified in item loans to exporters (see Note 19).

The amounts of the current debt are presented at their nominal value. The book value corresponds to the goods granted as collateral.

Additionally, there are indirect guarantees associated with assets registered in properties, plants and equipment whose total debt as of March 31, 2019, amounts to ThUS$ 1,960,083 (ThUS$ 1,633,504 as of December 31, 2018). The book value of the assets with indirect guarantees as of March 31, 2019, amounts to ThUS$ 3,860,613 (ThUS$ 3,258,950 as of December 31, 2018).

As of March 31, 2019, the Company keeps valid letters of credit related to assets by right of use according to the following detail:

			Value		Release
Creditor Guarantee	Debtor	Type	ThUS$		date

GE Capital Aviation Services Limited	Lan Cargo S.A.	One letter of credit		1,100	Nov 30, 2019
Avolon Aerospace AOE 62 Limited	LATAM Airlines Group S.A.	Three letter of credit		2,167	Sep 30, 2019
ACS Aero 1 Alpha Limited	LATAM Airlines Group S.A.	One letter of credit		3,255	Aug 31, 2019
Bank of Utah	LATAM Airlines Group S.A.	One letter of credit		2,000	Mar 24, 2020
GE Capital Aviation Services Ltd.	LATAM Airlines Group S.A.	Three letter of credit		14,327	Dec 6, 2019
ORIX Aviation Systems Limited	LATAM Airlines Group S.A.	Three letter of credit		8,004	Sep 30, 2019
Sky High XXIV Leasing Company	LATAM Airlines Group S.A.	Eight letter of credit		6,831	Aug 5, 2019
Wells Fargo Bank	LATAM Airlines Group S.A.	Eight letter of credit		13,505	Sep 30, 2019
Merlin Aviation Leasing (Ireland) 18 Limited	Tam Linhas Aéreas S.A.	One letter of credit		3,000	Mar 1, 2020
Shapphire Leasing (AOE) Limited	Tam Linhas Aéreas S.A.	One letter of credit		7,000	Oct 25, 2019

				61,189

(ii)

Commitments and others

Fully depreciated assets and commitments for future purchases are as follows:

	As of		As of
	March 31,		December 31,
	2019		2018
	ThUS$		ThUS$
	Unaudited

Gross book value of fully depreciated property, plant and equipment still in use		197,906		192,606
Commitments for the acquisition of aircraft (*)		14,000,000		14,400,000
(*) According to the manufacturer’s price list.

Purchase commitment of aircraft

	Year of delivery
Manufacturer	2019		2020		2021		2022		2023-2026		Total

Airbus S.A.S.		10		9		13		11		21		64
A320-NEO		7		5		6		5		7		30
A321-NEO		-		4		5		4		6		19
A350-1000		-		-		-		-		8		8
A350-900		3		-		2		2		-		7
The Boeing Company		2		2		2		-		4		10
Boeing 777-F		-		-		-		-		2		2
Boeing 787-9		2		2		2		-		2		8
Total		12		11		15		11		25		74

As of March 31, 2019, as a result of the different aircraft purchase contracts and agreements signed with Airbus SAS, there are remaining to receive 49 Airbus aircraft of the A320 family, with deliveries between 2018 and 2024, and 15 Airbus aircraft of the A350 family with dates delivery between 2018 and 2026. The approximate amount, according to manufacturer's list prices, is ThUS$ 11,000,000.

As of March 31, 2019, as a result of the different aircraft purchase contracts signed with The Boeing Company, there are remaining 8 Boeing 787 Dreamliner aircraft, with delivery dates between 2019 and 2023, and 2 Boeing 777-300 Freighter aircraft, with delivery scheduled for the year 2024. The approximate amount, according to manufacturer's list prices, is ThUS$ 3,000,000.

Additionally, during 2019 the Company signed a contract to rent 10 aircraft Airbus A320-200 with delivery since second quarter of this year.

(iii)

Capitalized interest costs with respect to Property, plant and equipment.

		For the period ended
		March 31,
		2019		2018
		Unaudited

Average rate of capitalization of capitalized interest costs	%		3.95		4.47
Costs of capitalized interest	ThUS$		7,060		5,456

NOTE 18 - CURRENT AND DEFERRED TAXES

In the period ended March 31, 2019, the income tax provision was calculated for such period, applying the partially integrated taxation system and a rate of 27%, in accordance with the Law No. 20,780 published in the Official Journal of the Republic of Chile on September 29, 2014.

The effect in the income statement for deferred tax corresponds to the variation of the year, of the assets and liabilities for deferred taxes generated by temporary differences and tax losses.

There are the permanent differences that give rise to an accounting value of the assets and liabilities other than their tax value, no deferred tax has been recorded since they are caused by transactions that are recorded in the financial statements and that will not affect the expense tax for income tax.

(a)

Current taxes

(a.1)

The composition of the current tax assets is the following:

	Current assets				Non-current assets				Total assets
	As of		As of		As of		As of		As of		As of
	March 31,		December 31,		March 31,		December 31,		March 31,		December 31,
	2019		2018		2019		2018		2019		2018
	ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$
	Unaudited				Unaudited				Unaudited
Provisional monthly payments (advances)		46,003		48,480		-		-		46,003		48,480
Other recoverable credits		18,010		20,654		757		757		18,767		21,411
Total assets by current tax		64,013		69,134		757		757		64,770		69,891

(a.2)

The composition of the current tax liabilities are as follows:

	Current liabilities				Non-current liabilities				Total liabilities
	As of		As of		As of		As of		As of		As of
	March 31,		December 31,		March 31,		December 31,		March 31,		December 31,
	2019		2018		2019		2018		2019		2018
	ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$
	Unaudited				Unaudited				Unaudited
Income tax provision		3,699		3,738		-		-		3,699		3,738
Total liabilities by current tax		3,699		3,738		-		-		3,699		3,738

(b)

Deferred taxes

The balances of deferred tax are the following:

	Assets						Liabilities
	As of			As of			As of			As of
Concept	March 31,			December 31,			March 31,			December 31,
	2019			2018			2019			2018
	ThUS$			ThUS$			ThUS$			ThUS$
	Unaudited			Restated			Unaudited			Restated
				Unaudited						Unaudited
Properties, Plants and equipment		160,967			150,831			1,750,488			1,733,327
Assets by right of use		272			202			(121,402	)		(85,550	)
Amortization		(938	)		(983	)		54,191			55,880
Provisions		(89,728	)		(38,303	)		(53,847	)		(75,631	)
Revaluation of financial instruments		(177	)		445			(2,402	)		458
Tax losses		210,494			170,980			(1,187,730	)		(1,198,170	)
Intangibles		-			-			334,575			351,238
Others		(9,240	)		(9,643	)		5,078			5,019
Total		271,650			273,529			778,951			786,571

The balance of deferred tax assets and liabilities are composed primarily of temporary differences to be reversed in the long term.

Movements of Deferred tax assets and liabilities

(a)

From January 1 to March 31, 2018 Restated (Unaudited)

	Opening			Recognized in			Recognized in						Ending
	balance			consolidated			comprehensive			Exchange			balance
	Assets/(liabilities)			income			income			rate			Asset (liability)
	ThUS$			ThUS$			ThUS$			ThUS$			ThUS$

Property, plant and equipment		(1,568,764	)		(27,696	)		-			195			(1,596,265	)
Assets for right of use		75,849			3,511			-			-			79,360
Amortization		(54,820	)		(1,124	)		-			55			(55,889	)
Provisions		(10,461	)		(22,385	)		(260	)		(1,514	)		(34,620	)
Revaluation of financial instruments		3,750			6,364			(2,297	)		(38	)		7,779
Tax losses		1,479,560			1,217			-			(398	)		1,480,379
Intangibles		(406,536	)		29,721			-			(2,150	)		(378,965	)
Others		(28,405	)		20,931			-			(101	)		(7,575	)

Total		(509,827	)		10,539			(2,557	)		(3,951	)		(505,796	)

(b)

From April 1 to December 31, 2018 Restated (Unaudited)

	Opening			Recognized in			Recognized in		Exchange			Ending
	balance			consolidated			comprehensive		rate			balance
	Assets/(liabilities)			income			income		variation			Asset (liability)
	ThUS$			ThUS$			ThUS$		ThUS$			ThUS$

Property, plant and equipment		(1,596,265	)		7,961			-		5,808			(1,582,496	)
Assets for right of use		79,360			6,392			-		-			85,752
Amortization		(55,889	)		(2,611	)		-		1,637			(56,863	)
Provisions		(34,620	)		115,189			1,827		(45,068	)		37,328
Revaluation of financial instruments		7,779			(8,690	)		2,028		(1,130	)		(13	)
Tax losses		1,480,379			(99,371	)		-		(11,858	)		1,369,150
Intangibles		(378,965	)		(9,721	)		-		37,448			(351,238	)
Others		(7,575	)		(4,078	)		-		(3,009	)		(14,662	)

Total		(505,796	)		5,071			3,855		(16,172	)		(513,042	)

(c)

From January 1 to March 31, 2019 (Unaudited)

	Opening			Recognized in			Recognized in		Exchange			Ending
	balance			consolidated			comprehensive		rate			balance
	Assets/(liabilities)			income			income		variation			Asset (liability)
	ThUS$			ThUS$			ThUS$		ThUS$			ThUS$

Property, plant and equipment		(1,582,496	)		(7,222	)		-		197			(1,589,521	)
Assets for right of use		85,752			35,922			-		-			121,674
Amortization		(56,863	)		1,679			-		55			(55,129	)
Provisions		37,328			(72,336	)		655		(1,528	)		(35,881	)
Revaluation of financial instruments		(13	)		1,850			426		(38	)		2,225
Tax losses		1,369,150			29,476			-		(402	)		1,398,224
Intangibles		(351,238	)		14,647			-		2,016			(334,575	)
Others		(14,662	)		(1,056	)		-		1,400			(14,318	)

Total		(513,042	)		2,960			1,081		1,700			(507,301	)

Deferred tax assets not recognized:

	As of		As of
	March 31,		December 31,
	2019		2018
	ThUS$		ThUS$
	Unaudited
Tax losses		199,582		137,761
Total Deferred tax assets not recognized		199,582		137,761

Deferred tax assets due to negative tax results are recognized to the extent that the corresponding tax benefit is probable in the future. As a result, as of March 31, 2019, the Company no longer recognizes deferred tax assets for ThUS $ 199,582 (ThUS $ 137,761 as of December 31, 2018) with respect to losses of ThUS $ 622,275 (ThUS $ 447,150 at December 31, 2018).

Deferred tax expense and current income taxes:

	For the period ended
	March 31,
	2019			2018
	ThUS$			ThUS$
	Unaudited			Restated
				Unaudited
Current tax expense
Current tax expense		16,001			39,696
Total current tax expense, net		16,001			39,696

Deferred tax expense
Deferred expense for taxes related to the creation and reversal of temporary differences		(2,960	)		3,517
Total deferred tax expense, net		(2,960	)		3,517
Income tax expense		13,041			43,213

Composition of income tax expense (income):

	For the period ended
	March 31,
	2019			2018
	ThUS$			ThUS$
	Unaudited			Restated
				Unaudited
Current tax expense, net, foreign		15,721			38,966
Current tax expense, net, Chile		280			730
Total current tax expense, net		16,001			39,696

Deferred tax expense, net, foreign		(1,823	)		(208	)
Deferred tax expense, net, Chile		(1,137	)		3,725
Deferred tax expense, net, total		(2,960	)		3,517
Income tax expense		13,041			43,213

Profit before tax by the legal tax rate in Chile (27% at March 31, 2019 and 2018)

	For the period ended						For the period ended
	March 31,						March 31,
	2019			2018			2019			2018
	ThUS$			ThUS$			%			%
	Unaudited			Restated			Unaudited			Restated
				Unaudited						Unaudited

Tax expense using the legal rate		(8,238	)		38,850			27.00			27.00
Tax effect of rates in other jurisdictions		(5,918	)		6,588			19.39			4.58
Tax effect of non-taxable operating revenues		(631	)		97			2.07			0.07
Tax effect of disallowable expenses		18,932			4,023			(62.04	)		2.80
Tax effect of due to the non-use of tax losses		-			1,087			-			0.76
Other increases (decreases) in legal tax charge		8,896			(7,432	)		(29.15	)		(5.17	)
Total adjustments to tax expense using the legal rate		21,279			4,363			(69.73	)		3.04
Tax expense using the effective rate		13,041			43,213			(42.73	)		30.04

Deferred taxes related to items charged to net equity:

	For the period ended
	March 31,
	2019		2018
	ThUS$		ThUS$
	Unaudited

Aggregate deferred taxation of components of other comprehensive income		1,081		2,557

NOTE 19 - OTHER FINANCIAL LIABILITIES

The composition of other financial liabilities is as follows:

	As of		As of
	March 31,		December 31,
	2019		2018
	ThUS$		ThUS$
	Unaudited		Restated
			Unaudited
Current
(a) Interest bearing loans		1,392,358		1,397,156
(b) Lease Liability		380,473		363,497
(c) Hedge derivatives		4,268		25,921
(d) Derivative non classified as hedge accounting		13,801		7,712
Total current		1,790,900		1,794,286

Non-current
(a) Interest bearing loans		6,233,328		5,864,570
(b) Lease Liability		2,556,899		2,494,552
(b) Hedge derivatives		243		340
Total non-current		8,790,470		8,359,462

(a)

Interest bearing loans

Obligations with credit institutions and debt instruments:

	As of		As of
	March 31,		December 31,
	2019		2018
	ThUS$		ThUS$
	Unaudited
Current
Loans to exporters		379,843		400,721
Bank loans		38,453		37,743
Guaranteed obligations		255,009		324,976
Other guaranteed obligations		97,491		97,143
Subtotal bank loans		770,796		860,583

Obligation with the public		47,290		14,643
Financial leases		475,187		425,100
Other loans		99,085		96,830
Total current		1,392,358		1,397,156

Non-current
Bank loans		130,071		184,998
Guaranteed obligations (1)		1,798,743		2,209,045
Other guaranteed obligations		553,013		576,309
Subtotal bank loans		2,481,827		2,970,352

Obligation with the public (1)		2,141,046		1,538,436
Financial leases (2)		1,450,433		1,199,754
Other loans		160,022		156,028
Total non-current		6,233,328		5,864,570
Total obligations with financial institutions		7,625,686		7,261,726

(1) On February 11, 2019, LATAM Finance Limited, a company incorporated in the Cayman Islands with limited liability and exclusively owned by LATAM Airlines Group SA, has issued on the international market, pursuant to Rule 144-A and Regulation S of the securities laws of the United States of America, unsecured long-term bonds for a nominal amount of US $ 600,000,000 at an annual interest rate of 7.00%. The bonds were placed at an issue price of 99.309%. The bonds expire on March 1, 2026, unless they will be redeemed early according to their terms. As reported to the market, the issuance and placement was intended to finance general corporate purposes.

(2) In the period ended March 31, 2019, the Company sold its participation in twenty one special-purpose entities. As a result of this, the classification of the financial liabilities associated with 23 aircraft from bonds guaranteed to finance leases was modified.

All interest-bearing liabilities are recorded according to the effective rate method. Under IFRS, in the case of fixed rate loans, the effective rate determined does not vary over the duration of the loan, whereas in variable rate loans, the effective rate changes to the date of each payment of interest.

Currency balances that make the interest bearing loans:

	As of		As of
	March 31,		December 31,
	2019		2018
Currency	ThUS$		ThUS$
	Unaudited

Chilean peso (U.F.)		512,441		500,398
US Dollar		7,113,245		6,761,328

Total		7,625,686		7,261,726

Interest-bearing loans due in installments to March 31, 2019 (Unaudited)

Debtor: LATAM Airlines Group S.A. and Subsidiaries, Tax No. 89.862.200-2, Chile.

				Nominal values												Accounting values

						More than		More than		More than								More than		More than		More than
				Up to		90 days		one to		three to		More than		Total		Up to		90 days		one to		three to		More than		Total
		Creditor		90		to one		three		five		five		nominal		90		to one		three		five		five		accounting			Effective		Nominal
Tax No.	Creditor	country	Currency	days		year		years		years		years		value		days		year		years		years		years		value		Amortization	rate		rate
				ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$			%		%

Loans to exporters

97.032.000-8	BBVA	Chile	ThUS$		75,000		38,000		-		-		-		113,000		76,261		38,127		-		-		-		114,388	At Expiration		3.48		3.48
97.032.000-8	BBVA	Chile	UF		52,001		-		-		-		-		52,001		52,579		-		-		-		-		52,579	At Expiration		4.11		3.31
97.003.000-K	BANCO DO BRASIL	Chile	ThUS$		200,000		-		-		-		-		200,000		200,863		-		-		-		-		200,863	At Expiration		3.60		3.60
97.951.000-4	HSBC	Chile	ThUS$		12,000		-		-		-		-		12,000		12,013		-		-		-		-		12,013	At Expiration		3.15		3.15

Bank loans

97.023.000-9	CORPBANCA	Chile	UF		5,592		16,777		11,184		-		-		33,553		5,612		16,777		11,050		-		-		33,439	Quarterly		3.35		3.35
0-E	BLADEX	U.S.A.	ThUS$		7,500		7,500		-		-		-		15,000		7,809		7,438		-		-		-		15,247	Semiannual		6.75		6.75
97.036.000-K	SANTANDER	Chile	ThUS$		-		-		51,283		-		-		51,283		115		-		51,283		-		-		51,398	Quarterly		5.40		5.40
76.362.099-9	BTG PACTUAL CHILE	Chile	UF		-		-		67,439		-		-		67,439		121		-		66,596		-		-		66,717	At Expiration		3.10		3.10

Obligations with the public
0-E	ESTADO	Chile	UF		-		-		-		176,722		176,722		353,444		6,497		-		-		176,603		176,603		359,703	At Expiration		5.50		5.50
97.030.000-7	BANK OF NEW YORK	U.S.A.	ThUS$		-		-		500,000		-		1,300,000		1,800,000		35,087		5,706		495,617		-		1,292,223		1,828,633	At Expiration		7.33		7.02

Guaranteed obligations

0-E	CREDIT AGRICOLE	France	ThUS$		660		1,992		5,400		1,370		-		9,422		713		1,992		5,400		1,370		-		9,475	Quarterly		4.32		3.23
0-E	BNP PARIBAS	U.S.A.	ThUS$		16,189		38,204		115,132		117,641		213,981		501,147		20,768		38,554		111,877		115,842		212,289		499,330	Quarterly		4.42		4.41
0-E	WILMINGTON TRUST	U.S.A.	ThUS$		21,879		66,057		179,432		227,738		436,963		932,069		27,427		66,056		174,392		225,617		434,768		928,260	Quarterly		4.47		4.47
0-E	CITIBANK	U.S.A.	ThUS$		10,854		33,024		91,653		65,785		57,274		258,590		11,985		33,024		86,942		63,751		56,047		251,749	Quarterly		3.85		2.96
0-E	NATIXIS	France	ThUS$		10,357		31,668		89,633		75,862		106,736		314,256		11,303		31,668		87,881		74,934		105,591		311,377	Quarterly		4.56		4.56
0-E	INVESTEC	England	ThUS$		3,435		6,575		21,855		20,695		-		52,560		4,342		6,683		21,360		20,604		-		52,989	Semiannual		7.23		7.23
-	SWAP Aviones llegados	-	ThUS$		167		327		78		-		-		572		167		327		78		-		-		572	Quarterly		-		-
																					-
Other guaranteed obligations

0-E	CREDIT AGRICOLE	France	ThUS$		-		-		253,962		-		-		253,962		2,780		-		252,342		-		-		255,122	At Expiration		4.54		4.54
0-E	DVB BANK SE	Germany	ThUS$		23,479		70,816		191,745		97,727		14,881		398,648		23,895		70,816		188,881		97,083		14,707		395,382	Quarterly		4.23		4.23

Financial leases

0-E	ING	U.S.A.	ThUS$		3,734		11,478		7,931		-		-		23,143		3,939		11,478		7,819		-		-		23,236	Quarterly		5.70		5.01
0-E	CREDIT AGRICOLE	France	ThUS$		12,472		16,270		14,489		-		-		43,231		12,460		16,271		14,489		-		-		43,220	Quarterly		3.71		3.33
0-E	CITIBANK	U.S.A.	ThUS$		13,347		38,708		74,071		32,823		-		158,949		14,058		38,708		72,491		32,686		-		157,943	Quarterly		4.32		3.73
0-E	PEFCO	U.S.A.	ThUS$		5,573		9,422		1,926		-		-		16,921		5,693		9,422		1,864		-		-		16,979	Quarterly		5.64		5.02
0-E	BNP PARIBAS	U.S.A.	ThUS$		8,025		27,071		16,544		-		-		51,640		8,381		27,071		16,350		-		-		51,802	Quarterly		4.08		3.77
0-E	WELLS FARGO	U.S.A.	ThUS$		31,831		96,472		260,907		224,270		74,187		687,667		34,842		96,472		244,122		218,788		73,162		667,386	Quarterly		2.80		2.11
97.036.000-K	SANTANDER	Chile	ThUS$		5,604		16,982		46,634		20,227		-		89,447		6,014		16,981		45,687		20,161		-		88,843	Quarterly		3.77		3.23
0-E	RRPF ENGINE	England	ThUS$		558		2,557		7,216		7,831		4,021		22,183		605		2,557		7,216		7,831		4,021		22,230	Monthly		4.01		4.01
0-E	APPLE BANK	U.S.A.	ThUS$		1,455		4,420		12,225		11,999		-		30,099		1,667		4,420		11,833		11,922		-		29,842	Quarterly		4.14		3.54
0-E	BTMU	U.S.A.	ThUS$		2,961		8,965		24,794		23,535		-		60,255		3,215		8,966		24,011		23,389		-		59,581	Quarterly		4.05		3.46
0-E	NATIXIS	France	ThUS$		3,606		5,048		4,452		-		-		13,106		3,648		5,048		4,452		-		-		13,148	Quarterly		4.19		4.00
0-E	KFW IPEX-BANK	Germany	ThUS$		1,714		5,235		3,568		-		-		10,517		1,735		5,235		3,568		-		-		10,538	Quarterly		4.23		4.23
0-E	AIRBUS FINANCIAL	U.S.A.	ThUS$		1,930		5,884		5,687		-		-		13,501		1,964		5,884		5,687		-		-		13,535	Monthly		4.05		4.05
0-E	US BANK	U.S.A.	ThUS$		15,594		47,318		130,200		136,262		66,804		396,178		17,427		47,318		115,915		130,640		65,301		376,601	Quarterly		4.00		2.82
0-E	PK AIRFINANCE	U.S.A.	ThUS$		2,361		7,334		25,600		-		-		35,295		2,426		7,334		25,600		-		-		35,360	Monthly		4.18		4.18

Other loans

0-E	BOEING	U.S.A.	ThUS$		-		-		83,592		-		-		83,592		-		2,069		83,592		-		-		85,661	At Expiration		4.29		4.25
0-E	CITIBANK (*)	U.S.A.	ThUS$		23,316		73,296		76,430		-		-		173,042		23,720		73,296		76,430		-		-		173,446	Quarterly		6.00		6.00

	Total				573,194		687,400		2,375,062		1,240,487		2,451,569		7,327,712		642,131		695,698		2,314,825		1,221,221		2,434,712		7,308,587

(*) Securitized bond with the future flows from the sales with credit card in United States and Canada.

Interest-bearing loans due in installments to March 31, 2019 (Unaudited)

Debtor: TAM S.A. and Subsidiaries, Tax No. 02.012.862/0001-60, Brazil.

				Nominal values												Accounting values

						More than		More than		More than								More than		More than		More than
				Up to		90 days		one to		three to		More than		Total		Up to		90 days		one to		three to		More than		Total
		Creditor		90		to one		three		five		five		nominal		90		to one		three		five		five		accounting			Effective		Nominal
Tax No.	Creditor	country	Currency	days		year		years		years		years		value		days		year		years		years		years		value		Amortization	rate		rate
				ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$			%		%
Bank loans

0-E	NEDERLANDSCHE
	CREDIETVERZEKERING MAATSCHAPPIJ	Holland	ThUS$		140		432		1,142		-		-		1,714		149		432		1,142		-		-		1,723	Monthly		6.01		6.01

Financial leases

0-E	NATIXIS	France	ThUS$		1,652		8,081		62,505		20,508		-		92,746		1,934		8,081		62,505		20,508		-		93,028	Quarterly/Semiannual		6.87		6.87
0-E	WACAPOU LEASING S.A.	Luxemburg	ThUS$		730		2,245		5,523		-		-		8,498		756		2,245		5,523		-		-		8,524	Quarterly		4.81		4.81
0-E	SOCIÉTÉ GÉNÉRALE MILAN BRANCH	Italy	ThUS$		9,532		29,194		160,076		-		-		198,802		10,256		29,194		159,876		-		-		199,326	Quarterly		5.88		5.88
0-E	GA Telessis LLC	U.S.A	ThUS$		301		913		2,511		2,640		8,038		14,403		569		913		3,838		2,640		6,538		14,498	Monthly		15.62		15.62

	Total				12,355		40,865		231,757		23,148		8,038		316,163		13,664		40,865		232,884		23,148		6,538		317,099

	Total consolidated				585,549		728,265		2,606,819		1,263,635		2,459,607		7,643,875		655,795		736,563		2,547,709		1,244,369		2,441,250		7,625,686

Interest-bearing loans due in installments to December 31, 2018

Debtor: LATAM Airlines Group S.A. and Subsidiaries, Tax No. 89.862.200-2, Chile.

				Nominal values												Accounting values

						More than		More than		More than								More than		More than		More than
				Up to		90 days		one to		three to		More than		Total		Up to		90 days		one to		three to		More than		Total
		Creditor		90		to one		three		five		five		nominal		90		to one		three		five		five		accounting			Effective		Nominal
Tax No.	Creditor	country	Currency	days		year		years		years		years		value		days		year		years		years		years		value		Amortization	rate		rate
				ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$			%		%

Loans to exporters

97.032.000-8	BBVA	Chile	ThUS$		38,000		75,000		-		-		-		113,000		38,432		75,623		-		-		-		114,055	At Expiration		3.36		3.36
97.032.000-8	BBVA	Chile	UF		-		50,785		-		-		-		50,785		-		50,930		-		-		-		50,930	At Expiration		3.31		3.31
97.036.000-K	SANTANDER	Chile	ThUS$		23,000		-		-		-		-		23,000		23,025		-		-		-		-		23,025	At Expiration		3.90		3.90
97.030.000-7	ESTADO	Chile	ThUS$		-		-		-		-		-		-		-		-		-		-		-		-	At Expiration		-		-
97.003.000-K	BANCO DO BRASIL	Chile	ThUS$		200,000		-		-		-		-		200,000		200,698		-		-		-		-		200,698	At Expiration		3.64		3.64
97.951.000-4	HSBC	Chile	ThUS$		12,000		-		-		-		-		12,000		12,013		-		-		-		-		12,013	At Expiration		3.14		3.14

Bank loans

97.023.000-9	CORPBANCA	Chile	UF		5,461		16,385		16,385		-		-		38,231		5,480		16,385		16,232		-		-		38,097	Quarterly		3.35		3.35
0-E	BLADEX	U.S.A.	ThUS$		-		15,000		-		-		-		15,000		-		14,964		-		-		-		14,964	Semiannual		6.74		6.74
97.036.000-K	SANTANDER	Chile	ThUS$		-		-		102,521		-		-		102,521		223		-		102,521		-		-		102,744	Quarterly		5.60		5.60
76.362.099-9	BTG PACTUAL CHILE	Chile	UF		-		-		-		65,862		-		65,862		118		-		-		64,957		-		65,075	At Expiration		3.10		3.10

Obligations with the public

0-E	BANK OF NEW YORK	U.S.A.	ThUS$		-		-		500,000		-		700,000		1,200,000		13,057		-		495,617		-		697,869		1,206,543	At Expiration		7.44		7.03
97.030.000-7	ESTADO	Chile	UF		-		-		-		172,591		172,591		345,182		1,586		-		-		172,420		172,530		346,536	At Expiration		5.50		5.50

Guaranteed obligations

0-E	CREDIT AGRICOLE	France	ThUS$		658		1,986		5,384		2,052		-		10,080		715		1,986		5,384		2,052		-		10,137	Quarterly		3.23		3.23
0-E	BNP PARIBAS	U.S.A.	ThUS$		10,553		43,430		114,247		117,556		225,912		511,698		13,334		44,191		110,977		115,747		224,093		508,342	Quarterly		4.55		4.55
0-E	WILMINGTON TRUST	U.S.A.	ThUS$		20,689		65,846		178,818		237,334		450,071		952,758		26,365		65,846		173,617		235,058		447,686		948,572	Quarterly		4.47		4.47
0-E	CITIBANK	U.S.A.	ThUS$		10,776		32,790		90,991		72,189		62,619		269,365		11,923		32,790		86,130		70,048		61,203		262,094	Quarterly		3.82		2.93
0-E	US BANK	U.S.A.	ThUS$		15,506		47,050		129,462		135,489		84,177		411,684		17,433		47,050		114,729		129,547		82,137		390,896	Quarterly		4.00		2.82
0-E	NATIXIS	France	ThUS$		10,247		31,350		88,688		77,693		116,546		324,524		11,250		31,350		86,883		76,760		115,285		321,528	Quarterly		4.69		4.69
0-E	PK AIRFINANCE	U.S.A.	ThUS$		2,319		7,208		24,944		3,144		-		37,615		2,387		7,208		24,944		3,144		-		37,683	Monthly		4.15		4.14
0-E	INVESTEC	England	ThUS$		1,454		8,472		21,667		22,421		-		54,014		1,879		8,661		21,154		22,309		-		54,003	Semiannual		7.17		7.17
-	SWAP Aviones llegados	-	ThUS$		194		414		158		-		-		766		194		414		158		-		-		766	Quarterly		-		-
																					-
Other guaranteed obligations

0-E	CREDIT AGRICOLE	France	ThUS$		-		-		253,692		-		-		253,692		2,646		-		252,207		-		-		254,853	At Expiration		4.11		4.11
0-E	DVB BANK SE	Germany	ThUS$		23,417		70,626		191,207		117,084		19,731		422,065		23,871		70,626		188,231		116,185		19,686		418,599	Quarterly		4.42		4.42

Financial leases

0-E	ING	U.S.A.	ThUS$		3,687		11,338		11,806		-		-		26,831		3,923		11,338		11,657		-		-		26,918	Quarterly		5.70		5.01
0-E	CREDIT AGRICOLE	France	ThUS$		13,171		24,577		18,655		-		-		56,403		13,187		24,331		18,655		-		-		56,173	Quarterly		3.66		3.31
0-E	CITIBANK	U.S.A.	ThUS$		13,209		40,365		77,587		40,997		-		172,158		13,998		40,365		75,830		40,801		-		170,994	Quarterly		4.40		3.80
0-E	PEFCO	U.S.A.	ThUS$		5,486		13,094		3,827		-		-		22,407		5,641		13,094		3,743		-		-		22,478	Quarterly		5.65		5.02
0-E	BNP PARIBAS	U.S.A.	ThUS$		7,926		29,494		22,147		-		-		59,567		8,320		29,493		21,891		-		-		59,704	Quarterly		3.90		3.58
0-E	WELLS FARGO	U.S.A.	ThUS$		31,673		95,981		263,239		230,417		98,028		719,338		34,816		95,981		245,615		224,395		96,589		697,396	Quarterly		2.77		2.09
97.036.000-K	SANTANDER	Chile	ThUS$		5,576		16,895		46,386		26,165		-		95,022		6,000		16,895		45,346		26,063		-		94,304	Quarterly		3.68		3.14
0-E	RRPF ENGINE	England	ThUS$		552		2,531		7,142		7,752		5,035		23,012		552		2,531		7,142		7,752		5,035		23,012	Monthly		4.01		4.01
0-E	APPLE BANK	U.S.A.	ThUS$		1,444		4,393		12,146		12,808		753		31,544		1,658		4,393		11,726		12,713		752		31,242	Quarterly		3.93		3.31
0-E	BTMU	U.S.A.	ThUS$		2,933		8,916		24,635		25,937		768		63,189		3,199		8,916		23,798		25,751		767		62,431	Quarterly		4.06		3.46
0-E	NATIXIS	France	ThUS$		10,056		7,951		5,154		-		-		23,161		10,135		7,952		5,154		-		-		23,241	Quarterly		4.28		4.12
0-E	KFW IPEX-BANK	Germany	ThUS$		1,699		5,188		5,328		-		-		12,215		1,723		5,188		5,328		-		-		12,239	Quarterly		4.20		4.19
0-E	AIRBUS FINANCIAL	U.S.A.	ThUS$		1,915		5,838		7,664		-		-		15,417		1,954		5,838		7,664		-		-		15,456	Monthly		4.19		4.19

Other loans

0-E	BOEING	U.S.A.	ThUS$		-		-		55,727		-		-		55,727		-		1,229		55,727		-		-		56,956	At Expiration		4.01		4.01
0-E	CITIBANK (*)	U.S.A.	ThUS$		23,167		72,018		101,026		-		-		196,211		23,583		72,018		100,301		-		-		195,902	Quarterly		6.00		6.00

	Total				496,768		804,921		2,380,633		1,367,491		1,936,231		6,986,044		535,318		807,586		2,318,361		1,345,702		1,923,632		6,930,599

(*) Securitized bond with the future flows from the sales with credit card in United States and Canada.

Interest-bearing loans due in installments to December 31, 2018

Debtor: TAM S.A. and Subsidiaries, Tax No. 02.012.862/0001-60, Brazil.

				Nominal values												Accounting values

						More than		More than		More than								More than		More than		More than
				Up to		90 days		one to		three to		More than		Total		Up to		90 days		one to		three to		More than		Total
		Creditor		90		to one		three		five		five		nominal		90		to one		three		five		five		accounting			Effective		Nominal
Tax No.	Creditor	country	Currency	days		year		years		years		years		value		days		year		years		years		years		value		Amortization	rate		rate
				ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$			%		%
Bank loans

0-E	NEDERLANDSCHE
	CREDIETVERZEKERING MAATSCHAPPIJ	Holland	ThUS$		138		426		1,233		54		-		1,851		147		426		1,233		54		-		1,860	Monthly		6.01		6.01

Financial leases

0-E	NATIXIS	France	ThUS$		3,043		6,490		44,525		41,731		-		95,789		3,656		6,490		44,525		41,731		-		96,402	Quarterly/Semiannual		6.87		6.87
0-E	WACAPOU LEASING S.A.	Luxemburg	ThUS$		728		2,219		6,280		-		-		9,227		756		2,219		6,280		-		-		9,255	Quarterly		4.81		4.81
0-E	SOCIÉTÉ GÉNÉRALE MILAN BRANCH	Italy	ThUS$		9,422		28,872		169,930		-		-		208,224		10,212		28,871		169,730		-		-		208,813	Quarterly		5.88		5.82
0-E	GA Telessis LLC	U.S.A	ThUS$		299		908		2,496		2,623		6,876		13,202		568		908		3,823		2,623		6,876		14,798	Quarterly		15.62		15.62

	Total				13,630		38,915		224,464		44,408		6,876		328,293		15,339		38,914		225,591		44,408		6,876		331,128

	Total consolidated				510,398		843,836		2,605,097		1,411,899		1,943,107		7,314,337		550,657		846,500		2,543,952		1,390,110		1,930,508		7,261,727

(b)

Lease Liability:

The movement of the lease liabilities corresponding to the period reported is as follows:

							Lease
							Liability
	Aircraft			Others			total
	ThUS$			ThUS$			ThUS$

Opening balance as January 1, 2018
Restated (Unaudited)		3,045,982			109,053			3,155,035
New contracts and renegotiations		68,541			-			68,541
Payments		(130,242	)		(7,602	)		(137,844	)
Accrued interest		44,063			2,365			46,428
Exchange differences		-			(912	)		(912	)
Cumulative translation adjustment		-			(122	)		(122	)
Other increases (decreases)		(3,618	)		3			(3,615	)
Total cambios		(21,256	)		(6,268	)		(27,524	)
Closing balance as of March 31,2018
Restated (Unaudited)		3,024,726			102,785			3,127,511
Opening balance as April 1, 2018
Restated (Unaudited)		3,024,726			102,785			3,127,511
New contracts and renegotiations		(21,068	)		32,404			11,336
Payments		(395,929	)		(22,325	)		(418,254	)
Accrued interest		130,189			6,069			136,258
Exchange differences		-			1,670			1,670
Cumulative translation adjustment		-			(3,882	)		(3,882	)
Other increases (decreases)		(109	)		3,519			3,410
Total cambios		(286,917	)		17,455			(269,462	)
Closing balance as of December 31,2018
Restated (Unaudited)		2,737,809			120,240			2,858,049
Opening balance as January 1, 2019
Restated (Unaudited)		2,737,809			120,240			2,858,049
New contracts and renegotiations		171,970			-			171,970
Payments		(129,343	)		(8,753	)		(138,096	)
Accrued interest		41,199			3,093			44,292
Exchange differences		-			108			108
Cumulative translation adjustment		773			268			1,041
Other increases (decreases)		195			(187	)		8
Total cambios		84,794			(5,471	)		79,323
Closing balance as of March 31,2019
(Unaudited)		2,822,603			114,769			2,937,372

The company recognizes the interest payments related to the lease liabilities in the consolidated result under Financial expenses (See note 27 (d)).

(c)

Hedge derivatives

										Total hedge
	Current liabilities					Non-current liabilities				derivatives
	As of			As of		As of		As of		As of			As of
	March 31,			December 31,		March 31,		December 31,		March 31,			December 31,
	2019			2018		2019		2018		2019			2018
	ThUS$			ThUS$		ThUS$		ThUS$		ThUS$			ThUS$
	Unaudited					Unaudited				Unaudited
Accrued interest from the last date of interest rate swap		2,221			2,321		243		340		2,464			2,661
Fair value of interest rate derivatives		2,135			335		-		-		2,135			335
Fair value of fuel derivatives		(88	)		15,678		-		-		(88	)		15,678
Fair value of foreign currency derivatives		-			7,587		-		-		-			7,587
Total hedge derivatives		4,268			25,921		243		340		4,511			26,261

(d)

Derivatives do not qualify for hedge accounting

									Total derivatives of
	Current liabilities				Non-current liabilities				no coverage
	As of 31		As of 31		As of 31		As of 31		As of 31		As of 31
	March of		December of		March of		December of		March of		December of
	2019		2018		2019		2018		2019		2018
	ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$
	Unaudited				Unaudited				Unaudited
Derivative of foreign currency not registered as hedge		13,801		7,712		-		-		13,801		7,712
Total derived not qualify as hedge accounting		13,801		7,712		-		-		13,801		7,712

The foreign currency derivatives correspond to options, forwards and swaps.

Hedging operation

The fair values of net assets/ (liabilities), by type of derivative, of the contracts held as hedging instruments are presented below:

	As of			As of
	March 31,			December 31,
	2019			2018
	ThUS$			ThUS$
	Unaudited
Cross currency swaps (CCS) (1)		21,887			15,099
Interest rate swaps (2)		(1,699	)		(2,194	)
Fuel options (3)		(1,010	)		(15,811	)

(1)

Covers the significant variations in cash flows associated with market risk implicit in the changes in the 3-month LIBOR interest rate and the exchange rate US$/UF of bank loans. These contracts are recorded as cash flow hedges and fair value.

(2)

Covers the significant variations in cash flows associated with market risk implicit in the increases in the 3 months LIBOR interest rates for long-term loans incurred in the acquisition of aircraft and bank loans. These contracts are recorded as cash flow hedges.

(3)

Covers significant variations in cash flows associated with market risk implicit in the changes in the price of future fuel purchases. These contracts are recorded as cash flow hedges.

During the periods presented, the Company only has cash flow and fair value hedges (in the case of CCS). In the case of fuel hedges, the cash flows subject to such hedges will occur and will impact results in the next 9 months from the date of the consolidated statement of financial position, while in the case of hedges of interest rates, these they will occur and will impact results throughout the life of the associated loans, up to their maturity. In the case of currency hedges through a CCS, there is a group of hedging relationships, in which two types of hedge accounting are generated, one of cash flow for the US $ / UF component; and another of fair value, for the floating rate component US $. The other group of hedging relationships only generates cash flow hedge accounting for the US $ / UF component.

During the periods presented, no hedging operations of future highly probable transaction that have not been realized have occurred.

Since none of the coverage resulted in the recognition of a non-financial asset, no portion of the result of the derivatives recognized in equity was transferred to the initial value of such assets.

The amounts recognized in comprehensive income during the period and transferred from net equity to income are as follows:

	For the period ended
	March 31,
	2019			2018
	ThUS$			ThUS$
	Unaudited
Debit (credit) recognized in comprehensive income during the period		17,268			15,533
Debit (credit) transferred from net equity to income during the period		(7,412	)		4,907

NOTE 20 - TRADE AND OTHER ACCOUNTS PAYABLES

The composition of Trade and other accounts payables is as follows:

	As of		As of
	March 31,		December 31,
	2019		2018
	ThUS$		ThUS$
	Unaudited
Current
(a) Trade and other accounts payables		1,325,312		1,279,976
(b) Accrued liabilities at the reporting date		379,417		394,327
Total trade and other accounts payables		1,704,729		1,674,303

(a)

Trade and other accounts payable:

	As of		As of
	March 31,		December 31,
	2019		2018
	ThUS$		ThUS$
	Unaudited

Trade creditors		1,139,624		1,048,033
Other accounts payable		185,688		228,943
Total		1,325,312		1,276,976

The details of Trade and other accounts payables are as follows:

	As of		As of
	March 31,		December 31,
	2019		2018
	ThUS$		ThUS$
	Unaudited
Aircraft Fuel		347,537		304,426
Boarding Fee		189,941		210,621
Suppliers technical purchases		133,446		75,402
Handling and ground handling		100,639		84,213
Airport charges and overflight		95,943		82,181
Other personnel expenses		94,205		92,047
Professional services and advisory		72,481		83,182
Air companies		54,169		59,524
Leases, maintenance and IT services		51,039		55,427
Services on board		43,078		44,434
Marketing		42,689		60,303
Land services		29,959		26,014
Achievement of goals		21,550		21,265
Crew		21,532		21,943
Aviation insurance		9,342		11,943
Maintenance		2,701		8,244
Communications		144		92
Others		14,917		38,715
Total trade and other accounts payables		1,325,312		1,279,976

(b)

Liabilities accrued:

	As of		As of
	March 31,		December 31,
	2019		2018
	ThUS$		ThUS$
	Unaudited
Accrued personnel expenses		146,410		116,242
Aircraft and engine maintenance		188,795		170,731
Accounts payable to personnel (*)		15,900		81,222
Others accrued liabilities		28,312		26,132
Total accrued liabilities		379,417		394,327

(*)

Profits and bonus participation (Note 23 letter b)

NOTE 21 - OTHER PROVISIONS

Other provisions:

	Current liabilities				Non-current liabilities				Total Liabilities

	As of		As of		As of		As of		As of		As of
	March 31,		December 31,		March 31,		December 31,		March 31,		December 31,
	2019		2018		2019		2018		2019		2018
	ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$
	Unaudited				Unaudited				Unaudited
Provision for contingencies (1)
Tax contingencies		2,990		2,982		199,200		197,038		202,190		200,020
Civil contingencies		1,637		1,207		64,400		59,834		66,037		61,041
Labor contingencies		583		605		26,177		23,244		26,760		23,849
Other		-		-		13,642		13,976		13,642		13,976
Provision for European
Commission investigation (2)		-		-		9,222		9,403		9,222		9,403
Total other provisions (3)		5,210		4,794		312,641		303,495		317,851		308,289

(1)

Provisions for contingencies:

The tax contingencies correspond to litigation and tax criteria related to the tax treatment applicable to direct and indirect taxes, which are found in both administrative and judicial stage.

The civil contingencies correspond to different demands of civil order filed against the Company.

The labor contingencies correspond to different demands of labor order filed against the Company.

The Provisions are recognized in the consolidated income statement in administrative expenses or tax expenses, as appropriate.

(2)

Provision made for proceedings brought by the European Commission for possible breaches of free competition in the freight market.

(3)

Total other provision st March 31, 2019, and December 31, 2018, include the fair value correspond to those contingencies from the business combination with TAM S.A and subsidiaries, with a probability of loss under 50%, which are not provided for the normal application of IFRS enforcement and that only must be recognized in the context of a business combination in accordance with IFRS 3.

Movement of provisions:

				European
	Legal			Commission
	claims (1)			Investigation (2)			Total
	ThUS$			ThUS$			ThUS$

Opening balance as of January 1, 2018		367,493			9,883			377,376
Increase in provisions		27,623			-			27,623
Provision used		(9,956	)		-			(9,956	)
Difference by subsidiaries conversion		(1,642	)		-			(1,642	)
Reversal of provision		(5,670	)		-			(5,670	)
Exchange difference		246			224			470
Closing balance as of March 31, 2018 (Unaudited)		378,094			10,107			388,201

Opening balance as of April 1, 2018		378,094			10,107			388,201
Increase in provisions		79,247			-			79,247
Provision used		(49,076	)		-			(49,076	)
Difference by subsidiaries conversion		(46,688	)		-			(46,688	)
Reversal of provision		(61,295	)		-			(61,295	)
Exchange difference		(1,396	)		(704	)		(2,100	)
Closing balance as of December 31, 2018		298,886			9,403			308,289

Opening balance as of January 1, 2019		298,886			9,403			308,289
Increase in provisions		34,401			-			34,401
Provision used		(17,989	)		-			(17,989	)
Difference by subsidiaries conversion		(1,564	)		-			(1,564	)
Reversal of provision		(5,094	)		-			(5,094	)
Exchange difference		(11	)		(181	)		(192	)
Closing balance as of March 31, 2019 (Unaudited)		308,629			9,222			317,851

(1)

Cumulative balances include judicial deposit delivered as security, with respect to the "Aerovía Fundo" (FA), for US$ 88 million, made in order to suspend the application of the tax credit. The Company is discussing in the Court the constitutionality of the requirement made by FA in a lawsuit. Initially it was covered by the effects of a precautionary measure, this means that the Company would not be obliged to collect the tax, as long as there is no judicial decision in this regard. However, the decision taken by the judge in the first instance was published unfavorably, revoking the injunction. As the lawsuit is still underway (TAM appealed this first decision), the Company needed to make the judicial deposit, for the suspension of the enforceability of the tax credit; deposit that was classified in this item, discounting the existing provision for this purpose. Finally, if the final decision is favorable to the Company, the deposit made will return to TAM. On the other hand, if the court confirms the first decision, said deposit will become a final payment in favor of the Government of Brazil. The procedural stage as of March 31, 2019 is described in Note 31 in the Role of the case 2001.51.01.012530-0.

European Commission Provision:

Provision constituted on the occasion of the process initiated in December 2007 by the General Competition Directorate of the European Commission against more than 25 cargo airlines, among which is Lan Cargo SA, which forms part of the global investigation initiated in 2006 for possible infractions of free competition in the air cargo market, which was carried out jointly by the European and United States authorities.

With respect to Europe, the General Directorate of Competition imposed fines totaling € 799,445,000 (seven hundred and ninety-nine million four hundred and forty-five thousand Euros) for infractions of European Union regulations on free competition against eleven (11 ) airlines, among which are LATAM Airlines Group SA and its subsidiary Lan Cargo S.A .. For its part, LATAM Airlines Group S.A. and Lan Cargo S.A., jointly and severally, have been fined for the amount of € 8,220,000 (eight million two hundred and twenty thousand Euros), for these infractions, an amount that was provisioned in the financial statements of LATAM. On January 24, 2011, LATAM Airlines Group S.A. and Lan Cargo S.A. They appealed the decision before the Court of Justice of the European Union. On December 16, 2015, the European Court resolved the appeal and annulled the Commission's Decision. The European Commission did not appeal the judgment, but on March 17, 2017, the European Commission again adopted its original decision to impose on the eleven lines original areas, the same fine previously imposed, amounting to a total of 776,465,000 Euros In the case of LAN Cargo and its parent, LATAM Airlines Group S.A. imposed the same fine of 8.2 million Euros. The procedural stage as of March 31, 2019 is described in Note 31 in section (ii) judgments received by LATAM Airlines Group S.A. and Subsidiaries.

NOTE 22 - OTHER NON-FINANCIAL LIABILITIES

	Current liabilities				Non-current liabilities				Total Liabilities
	As of		As of		As of		As of		As of		As of
	March 31,		December 31,		March 31,		December 31,		March 31,		December 31,
	2019		2018		2019		2018		2019		2018
	ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$
	Unaudited				Unaudited				Unaudited
Deferred revenues (*)		2,170,774		2,330,058		628,236		644,702		2,799,010		2,974,760
Sales tax		12,070		12,726		-		-		12,070		12,726
Retentions		44,463		34,434		-		-		44,463		34,434
Others taxes		4,882		7,700		-		-		4,882		7,700
Dividends payable		54,580		54,580		-		-		54,580		54,580
Other sundry liabilities		6,865		15,248		-		-		6,865		15,248
Total other non-financial liabilities		2,293,634		2,454,746		628,236		644,702		2,921,870		3,099,448

Movement of Other non-financial liabilities

													Adjustment
			Deferred income										application
								Loyalty					IAS 29,
								(accreditation		Expiration of			Argentina		Others
	Initial balance		Recognition		Use			and exchange)		tickets			hyperinflation		provisions			Final balance
	ThUS$		ThUS$		ThUS$			ThUS$		ThUS$			ThUS$		ThUS$			ThUS$

From January 1 to March 31, 2018 (Unaudited)		2,849,266		2,065,620		(2,083,793	)		124,959		(59,506	)		-		7,220			2,903,766
From April 1 to December 31, 2018		2,903,766		5,625,352		(6,146,957	)		819,287		(225,224	)		927		(2,391	)		2,974,760
From January 1 to March 31, 2019 (Unaudited)		2,974,760		1,758,847		(1,899,223	)		21,196		(64,961	)		-		8,391			2,799,010

(*) Note 2.20.

The balance includes, mainly, deferred income for services not provided as of March 31, 2019 and December 31, 2018; and programs such as: LATAM Pass, LATAM Fidelidade and Multiplus:

LATAM Pass is the frequent passenger program created by LAN to reward the preference and loyalty of its customers with multiple benefits and privileges, through the accumulation of miles that can be exchanged for free flight tickets or for a varied range of products and services. Customers accumulate LATAM Pass miles every time they fly on LAN, TAM, oneworld® member companies and other airlines associated with the program, as well as buying at stores or using the services of a vast network of companies that have an agreement with the program around the world.

For its part, TAM, thinking of people who travel constantly, created the LATAM Fidelidade program, in order to improve the service and give recognition to those who choose the company. Through the program, customers accumulate points in a wide variety of loyalty programs in a single account and can redeem them in all TAM destinations and associated airline companies, and even more, participate in the Multiplus Fidelidade Network.

Multiplus is a coalition of loyalty programs, with the objective of operating accumulation and exchange of points. This program has a network integrated by associated companies, including hotels, financial institutions, retail companies, supermarkets, vehicle leases and magazines, among many other partners from different segments.

The Company signed a renewal of the agreement with Banco Santander-Chile, which extends its alliance in Chile to continue developing travel benefits to its respective clients during the next 7 years.

NOTE 23 - EMPLOYEE BENEFITS

	As of		As of
	March 31,		December 31,
	2019		2018
	ThUS$		ThUS$
	Unaudited
Retirements payments		59,924		56,126
Resignation payments		9,552		8,802
Other obligations		19,940		17,437
Total liability for employee benefits		89,416		82,365

The movement in retirements and resignation payments and other obligations:

			Increase (decrease)						Actuarial
	Opening		current service			Benefits			(gains)		Currency			Closing
	balance		provision			paid			losses		translation			balance
	ThUS$		ThUS$			ThUS$			ThUS$		ThUS$			ThUS$

From January 1 to March 31, 2018 (Unaudited)		101,087		4,921			(1,470	)		2,098		6,539			113,175

From April 1 to December 31, 2018		113,175		(12,305	)		(4,548	)		3,722		(17,679	)		82,365

From January 1 to March 31, 2019 (Unaudited)		82,365		17,729			(1,538	)		2,394		(11,534	)		89,416

The principal assumptions used in the calculation to the provision in Chile are presented below:

	For the period ended
	March 31,
Assumptions	2019			2018
	Unaudited
Discount rate		3.95	%		4.47	%
Expected rate of salary increase		4.50	%		4.50	%
Rate of turnover		6.04	%		6.98	%
Mortality rate		RV-2014			RV-2014
Inflation rate		2.75	%		2.72	%
Retirement age of women		60			60
Retirement age of men		65			65

The discount rate corresponds to the 20-year term rate of the BCP Central Bank of Chile Bonds. The RV-2014 mortality tables correspond to those established by the Commission for the Financial Market of Chile and for the determination of the inflation rates; the market performance curves of Central Bank of Chile papers of the BCUs have been used. BCP long term at the date of scope.

The calculation of the present value of the defined benefit obligation is sensitive to the variation of some actuarial assumptions such as discount rate, salary increase, rotation and inflation.

The sensitivity analysis for these variables is presented below:

	Effect on the liability
	As of			As of
	March 31,			December 31,
	2019			2018
	ThUS$			ThUS$
	Unaudited
Discount rate
Change in the accrued liability an closing for increase in 100 p.b.		(6,545	)		(6,538	)
Change in the accrued liability an closing for decrease of 100 p.b.		5,587			4,918

Rate of wage growth
Change in the accrued liability an closing for increase in 100 p.b.		5,340			4,750
Change in the accrued liability an closing for decrease of 100 p.b.		(6,505	)		(6,547	)

(b)

The liability for short-term:

	As of		As of
	March 31,		December 31,
	2019		2018
	ThUS$		ThUS$
	Unaudited
Profit-sharing and bonuses (*)		15,900		81,222

(*)

Accounts payables to employees (Note 20 letter b)

The participation in profits and bonuses correspond to an annual incentives plan for achievement of objectives.

(c)

Employment expenses are detailed below:

	For the period ended
	March 31,
	2019		2018
	ThUS$		ThUS$
	Unaudited
Salaries and wages		408,443		414,634
Short-term employee benefits		15,957		33,743
Termination benefits		15,748		14,622
Other personnel expenses		35,864		51,544
Total		476,012		514,543

NOTE 24 - ACCOUNTS PAYABLE, NON-CURRENT

	As of		As of
	March 31,		December 31,
	2019		2018
	ThUS$		ThUS$
	Unaudited
Aircraft and engine maintenance		447,209		513,544
Provision for vacations and bonuses		15,242		15,357
Other sundry liabilities		334		376
Total accounts payable, non-current		462,785		529,277

NOTE 25 - EQUITY

(a)

Capital

The Company’s objective is to maintain an appropriate level of capitalization that enables it to ensure access to the financial markets for carrying out its medium and long-term objectives, optimizing the return for its shareholders and maintaining a solid financial position.

The paid capital of the Company at March 31, 2019 amounts to ThUS$ 3,146,265 divided into 606,407,693 common stock of a same series (ThUS$ 3,146,265 (*) divided into 606,407,693 shares as of December 31, 2018), a single series nominative, ordinary character with no par value. There are no special series of shares and no privileges. The form of its stock certificates and their issuance, exchange, disablement, loss, replacement and other similar circumstances, as well as the transfer of the shares, is governed by the provisions of Corporations Law and its regulations.

(*) Includes deduction of issuance costs for ThUS $ 3,299 and adjustment for placement of 10,282 shares for ThUS $ 156, approved at the Extraordinary Shareholders Meeting of the Company on April 27, 2017.

(b)

Subscribed and paid shares

On August 18, 2016, the Company held an extraordinary shareholders' meeting at which it was approved to increase the capital by issuing 61,316,424 payment shares, all ordinary, without par value. As of December 31, 2016, 60,849,592 shares had been placed against said increase, according to the following breakdown: (a) 30,499,685 shares subscribed and paid at the end of the pre-emptive option period, which expired on December 23, 2016; December 2016, collecting the equivalent of US $ 304,996,850; and (b) 30,349,907 additional shares subscribed on December 28, 2016, collecting the equivalent of US $ 303,499,070. Due to this last described placement, as of March 31, 2019, the number of subscribed and paid shares of the Company reached 606,407,693.

Consequently, as of March 31, 2019, the statutory capital of the Company is represented by 606,874,525 shares, all of the same and unique series, registered, ordinary, without par value, which is divided into: (a) 606,407,693 subscribed and paid shares mentioned above; and (b) 466,832 shares pending subscription and payment, which correspond to the balance of shares pending placement of the last capital increase, described in the previous paragraph.

The following table shows the movement of the authorized and fully paid shares described above:

Movement of authorized shares

Expired shares

Opening

intended for

Closing

Nro. Of shares

balance

compensation plans

balance

From January 1 to December 31, 2018

608,374,525

(1,500,000

)(*)

606,874,525

From January 1 to March 31, 2019 (Unaudited)

606,874,525

(*) On June 11, 2018, the term of subscription and payment of 1,500,000 shares to create and implement compensation plans for Company employees expired.

Movement fully paid shares

				Movement
				value		Cost of issuance
				of shares		and placement			Paid- in
	N° of			(1)		of shares (2)			Capital
	shares			ThUS$		ThUS$			ThUS$

Paid shares as of January 1, 2018		606,407,693			3,160,718		(14,453	)		3,146,265
There are no movements of shares paid during the 2018 period		-			-		-			-
Paid shares as of December 31, 2018		606,407,693			3,160,718		(14,453	)		3,146,265
Paid shares as of January 1, 2019		606,407,693			3,160,718		(14,453	)		3,146,265
There are no movements of shares paid during the 2019 period		-			-		-			-
Paid shares as of March 31, 2019 (Unaudited)		606,407,693	(3)		3,160,718		(14,453	)		3,146,265

(1) Amounts reported represent only those arising from the payment of the shares subscribed.

(2) Decrease of capital by capitalization of reserves for cost of issuance and placement of shares established according to Extraordinary Shareholder´s Meetings, where such decreases were authorized.

(3) At March 31, 2019, the difference between authorized shares and fully paid shares are 466,832 shares, of which correspond to the shares issued and unsubscribed from the capital increase approved at the Extraordinary Shareholders Meeting held on August 18, 2016.

At March 31, 2019, the Company held no treasury stock, the remaining of ThUS$ (178) corresponds to the difference between the amount paid for the shares and their book value, at the time of the full right decrease of the shares which held in its portfolio.

(d)

Reserve of share- based payments

Movement of Reserves of share- based payments:

			Stock
	Opening		option			Closing
Periods	balance		plan			balance
	ThUS$		ThUS$			ThUS$

From January 1 to March 31, 2018 (Unaudited)		39,481		(1,938	)		37,543
From April 1 to December 31, 2018		37,543		331			37,874
From January 1 to March 31, 2019 (Unaudited)		37,874		(70	)		37,804

These reserves are related to the “Share-based payments” explained in Note 34.

(e)

Other sundry reserves

Movement of Other sundry reserves:

	Opening		Legal			Closing
Periods	balance		reserves			balance
	ThUS$		ThUS$			ThUS$

From January 1 to March 31, 2018 (Unaudited)		2,639,780		5,783			2,645,563
From April 1 to December 31, 2018		2,645,563		(6,647	)		2,638,916
From January 1 to March 31, 2019 (Unaudited)		2,638,916		(96	)		2,638,820

Balance of Other sundry reserves comprises the following:

	As of			As of
	March 31,			December 31,
	2019			2018
	ThUS$			ThUS$
	Unaudited

Higher value for TAM S.A. share exchange (1)		2,665,692			2,665,692
Reserve for the adjustment to the value of fixed assets (2)		2,620			2,620
Transactions with non-controlling interest (3)		(25,913	)		(25,913	)
Others		(3,579	)		(3,483	)
Total		2,638,820			2,638,916

(1) Corresponds to the difference between the value of the shares of TAM S.A., acquired by Sister Holdco S.A. (under the Subscriptions) and by Holdco II S.A. (by virtue of the Exchange Offer), which is recorded in the declaration of completion of the merger by absorption, and the fair value of the shares exchanged by LATAM Airlines Group S.A. as of June 22, 2012.

(2) Corresponds to the technical revaluation of the fixed assets authorized by the Commission for the Financial Market in the year 1979, in Circular No. 1529. The revaluation was optional and could be made only once; the originated reserve is not distributable and can only be capitalized.

(3) The balance as of March 31, 2019 corresponds to the loss generated by: Lan Pax Group S.A. e Inversiones Lan S.A. in the acquisition of shares of Aerovías de Integración Regional Aires S.A. for ThUS $ (3,480) and ThUS $ (20), respectively; the acquisition of TAM S.A. of the minority interest in Aerolinhas Brasileiras S.A. for ThUS $ (885), the acquisition of Inversiones Lan S.A. of the minority participation in Aires Integra Regional Airlines S.A. for an amount of ThUS $ (2) and the acquisition of a minority stake in Aerolane S.A. by Lan Pax Group S.A. for an amount of ThUS $ (21,526) through Holdco Ecuador S.A.

(f)

Reserves with effect in other comprehensive income.

Movement of Reserves with effect in other comprehensive income:

							Actuarial gain
	Currency			Cash flow			or loss on defined
	translation			hedging			benefit plans
	reserve			reserve			reserve			Total
	ThUS$			ThUS$			ThUS$			ThUS$

Opening balance as of January 1, 2018		(2,131,591	)		18,140			(10,926	)		(2,124,377	)
Increase (decrease) by application of new accounting standards		205,877			-			-			205,877
Initial balance Restated (Unaudited)		(1,925,714	)		18,140			(10,926	)		(1,918,500	)

Derivatives valuation gains (losses)		-			17,148			-			17,148
Deferred tax		-			(537	)		-			(537	)
Actuarial reserves by employee benefit plans		-			-			(2,041	)		(2,041	)
Deferred tax actuarial IAS by employee benefit plans		-			-			525			525
Difference by subsidiaries conversion		(22,571	)		-			-			(22,571	)
Closing balance as of March 31, 2018 Restated (Unaudited)		(1,948,285	)		34,751			(12,442	)		(1,925,976	)

Opening balance as of April 1, 2018		(1,948,285	)		34,751			(12,442	)		(1,925,976	)
Derivatives valuation gains (losses)		-			(44,047	)		-			(44,047	)
Deferred tax		-			(37	)		-			(37	)
Actuarial reserves by employee benefit plans		-			-			(3,778	)		(3,778	)
Deferred tax actuarial IAS by employee benefit plans		-			-			1,042			1,042
Difference by subsidiaries conversion		(708,359	)		-			-			(708,359	)
Closing balance as of December 31, 2018 Restated (Unaudited)		(2,656,644	)		(9,333	)		(15,178	)		(2,681,155	)

Opening balance as of January 1, 2019		(2,656,644	)		(9,333	)		(15,178	)		(2,681,155	)
Derivatives valuation gains (losses)		-			26,653			-			26,653
Deferred tax		-			416			-			416
Actuarial reserves by employee benefit plans		-			-			(2,395	)		(2,395	)
Deferred tax actuarial IAS by employee benefit plans		-			-			656			656
Difference by subsidiaries conversion		(57,689	)		-			-			(57,689	)
Closing balance as of March 31, 2019 (Unaudited)		(2,714,333	)		17,736			(16,917	)		(2,713,514	)

(f.1)

Currency translation reserve

These originate from exchange differences arising from the translation of any investment in foreign entities (or Chilean investment with a functional currency different to that of the parent), and from loans and other instruments in foreign currency designated as hedges for such investments. When the investment (all or part) is sold or disposed and loss of control occurs, these reserves are shown in the consolidated statement of income as part of the loss or gain on the sale or disposal. If the sale does not involve loss of control, these reserves are transferred to non-controlling interests.

(f.2)

Cash flow hedging reserve

These originate from the fair value valuation at the end of each period of the outstanding derivative contracts that have been defined as cash flow hedges. When these contracts expire, these reserves should be adjusted and the corresponding results recognized.

(f.3)

Reserves of actuarial gains or losses on defined benefit plans

Correspond to the increase or decrease in the obligation present value for defined benefit plan due to changes in actuarial assumptions, and experience adjustments, which is the effects of differences between the previous actuarial assumptions and what has actually occurred.

(g)

Retained earnings

Movement of Retained earnings:

			Increase
			(decrease) by									Other
			application of			Result						increase
	Opening		new accounting			for the						(decreases)		Closing
Periods	balance		standars			period			Dividends			(1) (2)		balance
	ThUS$		ThUS$			ThUS$			ThUS$			ThUS$		ThUS$
From January 1 to March 31, 2018 restated (Unaudited)		475,118		(516,130	)		92,169			(28,167	)		-		22,990
From April 1 to December 31, 2018 restated (Unaudited)		22,990		-			217,642			(26,413	)		4,752		218,971
From January 1 to March 31, 2019 (Unaudited)		218,971		-			(60,074	)		-			-		158,897

(1)

Adjustments adoption IFRS 9 and IFRS 15 ThUS (9,549) (See Note 2)

(2)

Variation effect in Accumulated results, by application IAS 29, Argentina hyperinflation:

Items	ThUS$

Property, plant and equipment		4,573
Intangible assets other than goodwill		69
Goodwill		335
Deferred incomes		(377	)
Other non-financial assets		152
Total Adjust accumulated results		4,752

(h)

Dividends per share

	Minimum mandatory		Minimum mandatory		Final dividend
	dividend		dividend		dividend
Description of dividend	2019		2018		2017

Date of dividend		03/31/2019		12/31/2018		12/31/2017
Amount of the dividend (ThUS$)		-		54,580		46,591	(*)
Number of shares among which the dividend is distributed		606,407,693		606,407,693		606,407,693
Dividend per share (US$)		0.0000		0.0900		0.0768

(*) By virtue of the Essential Fact issued on April 26, 2018, the shareholders of LATAM approved the distribution of the final dividend proposed by the Board of Directors in Ordinary Session of April 26, 2018, which amounts to ThUS $ 46,591, which corresponds to 30% of the profits for the year corresponding to 2017.

The payment was made on May 17, 2018.

NOTE 26 - REVENUE

The detail of revenues is as follows:

	For the period ended
	March 31,
	2019		2018
	ThUS$		ThUS$
	Unaudited

Passengers		2,167,982		2,318,015
Cargo		263,496		295,820
Total		2,431,478		2,613,835

NOTE 27 - COSTS AND EXPENSES BY NATURE

(a)

Costs and operating expenses

The main operating costs and administrative expenses are detailed below:

	For the period ended
	March 31,
	2019		2018
	ThUS$		ThUS$
	Unaudited		Restated
			Unaudited
Aircraft fuel		746,551		717,854
Other rentals and landing fees		322,821		311,610
Aircraft maintenance		104,056		98,677
Commissions		54,066		60,120
Passenger services		64,246		79,756
Other operating expenses (*)		323,748		328,645

Total		1,615,488		1,596,662

(*) Lease expenses are included within this amount (See note 2.21)

	For the period ended
	March 31,
	2019		2018
	ThUS$		ThUS$
	Unaudited		Restated
			Unaudited

Payments for leases of low-value assets		9,821		7,475

Total		9,821		7,475

(b)

Depreciation and amortization

Depreciation and amortization are detailed below:

	For the period ended
	March 31,
	2019		2018
	ThUS$		ThUS$
	Unaudited		Restated
			Unaudited
Depreciation (*)		333,541		333,185
Amortization		18,103		15,702
Total		351,644		348,887

(*) Included within this amount is the depreciation of the Properties, plants and equipment (See Note 17 (a)) and the maintenance of the aircraft recognized as assets by right of use. The maintenance cost amount included in the depreciation line for the period ended March 31, 2019 is ThUS $ 98.056 and ThUS $ 89,270 for the same period 2018.

100

(c)

Personnel expenses

The costs for personnel expenses are disclosed in Note 23 liability for employee benefits.

(d)

Financial costs

The detail of financial costs is as follows:

	For the period ended
	March 31,
	2019		2018
	ThUS$		ThUS$
	Unaudited		Restated
			Unaudited
Bank loan interest		73,941		68,977
Financial leases		15,022		15,730
Lease liability		45,343		47,138
Other financial instruments		4,140		1,510
Total		138,446		133,355

Costs and expenses by nature presented in this note plus the Employee expenses disclosed in Note 23, are equivalent to the sum of cost of sales, distribution costs, administrative expenses, other expenses and financing costs presented in the consolidated statement of income by function.

NOTE 28 - OTHER INCOME, BY FUNCTION

Other income by function is as follows:

	For the period ended
	March 31,
	2019		2018
	ThUS$		ThUS$
	Unaudited

Coalition and loyalty program Multiplus		22,152		44,651
Tours		28,939		32,463
Aircraft leasing		22,168		16,029
Customs and warehousing		7,146		6,510
Maintenance		2,168		1,379
Duty free		-		517
Other miscellaneous income		11,217		15,152
Total		93,790		116,701

101

NOTE 29 - FOREIGN CURRENCY AND EXCHANGE RATE DIFFERENCES

The functional currency of LATAM Airlines Group S.A. is the US dollar, also it has subsidiaries whose functional currency is different to the US dollar, such as the chilean peso, argentine peso, colombian peso, brazilian real and guaraní.

The functional currency is defined as the currency of the primary economic environment in which an entity operates and in each entity and all other currencies are defined as foreign currency.

Considering the above, the balances by currency mentioned in this note correspond to the sum of foreign currency of each of the entities that make LATAM Airlines Group S.A. and Subsidiaries.

(a)

Foreign currency

The foreign currency detail of balances of monetary items in current and non-current assets is as follows:

	As of		As of
	March 31,		December 31,
Current assets	2019		2018
	ThUS$		ThUS$
	Unaudited
Cash and cash equivalents		391,636		606,673
Argentine peso		5,775		4,236
Brazilian real		10,671		34,360
Chilean peso		209,557		415,399
Colombian peso		2,635		2,732
Euro		20,904		20,339
U.S. dollar		70,339		51,382
Other currency		71,755		78,225

Other financial assets, current		35,443		57,132
Argentine peso		9		11
Brazilian real		4,812		25,829
Chilean peso		26,076		25,904
Colombian peso		141		139
U.S. dollar		4,070		4,923
Other currency		335		326

102

	As of		As of
	March 31,		December 31,
Current assets	2019		2018
	ThUS$		ThUS$
	Unaudited
Other non - financial assets, current		82,537		106,952
Argentine peso		14,745		13,077
Brazilian real		18,862		37,794
Chilean peso		20,831		30,916
Colombian peso		515		434
Euro		5,077		3,935
U.S. dollar		6,034		8,949
Other currency		16,473		11,847

Trade and other accounts receivable, current		461,672		518,006
Argentine peso		51,111		54,053
Brazilian real		4,577		6,037
Chilean peso		77,702		112,133
Colombian peso		278		5,065
Euro		43,390		49,044
U.S. dollar		3,140		2,938
Other currency		281,474		288,736

Accounts receivable from related entities, current		794		593
Chilean peso		65		200
U.S. dollar		729		393

Tax current assets		26,591		20,774
Argentine peso		2,067		812
Brazilian real		1,824		1,106
Chilean peso		6,057		4,860
Colombian peso		639		5
Euro		184		-
U.S. dollar		429		429
Peruvian sun		13,892		13,306
Other currency		1,499		256

Total current assets		998,673		1,310,130
Argentine peso		73,707		72,189
Brazilian real		40,746		105,126
Chilean peso		340,288		589,412
Colombian peso		4,208		8,375
Euro		69,555		73,318
U.S. Dollar		84,741		69,014
Other currency		385,428		392,696

103

	As of		As of
	March 31,		December 31,
Non-current assets	2019		2018
	ThUS$		ThUS$
	Unaudited

Other financial assets, non-current		21,679		21,850
Brazilian real		4,015		4,941
Chilean peso		69		68
Colombian peso		263		145
Euro		7,609		7,438
U.S. dollar		7,997		7,441
Other currency		1,726		1,817

Other non - financial assets, non-current		30,229		31,126
Argentine peso		75		86
Brazilian real		7,637		7,465
U.S. dollar		3		3
Other currency		22,514		23,572

Accounts receivable, non-current		5,345		5,378
Chilean peso		5,345		5,378

Deferred tax assets		3,247		2,102
Colombian peso		80		78
U.S. dollar		1,172		29
Other currency		1,995		1,995

Total non-current assets		60,500		60,456
Argentine peso		75		86
Brazilian real		11,652		12,406
Chilean peso		5,414		5,446
Colombian peso		343		223
Euro		7,609		7,438
U.S. dollar		9,172		7,473
Other currency		26,235		27,384

104

The foreign currency detail of balances of monetary items in current liabilities and non-current is as follows:

	Up to 90 days				91 days to 1 year
	As of		As of		As of		As of
	March 31,		December 31,		March 31,		December 31,
Current liabilities	2019		2018		2019		2018
	ThUS$		ThUS$		ThUS$		ThUS$
	Unaudited				Unaudited
Other financial liabilities, current		77,639		63,920		-		107,815
Argentine peso		1		3		-		-
Brazilian real		247		261		-		-
Chilean peso		50,014		41,694		-		68,901
Euro		247		704		-		-
U.S. dollar		26,914		16,773		-		38,914
Other currency		216		4,485		-		-

Trade and other accounts payables, current		1,037,058		970,872		37,918		37,809
Argentine peso		242,025		229,907		2,920		6,142
Brazilian real		31,846		30,974		693		1,152
Chilean peso		190,937		198,766		25,020		26,113
Colombian peso		4,783		7,915		13		752
Euro		89,768		84,903		47		1,375
U.S. dollar		380,149		325,385		3,176		55
Peruvian sol		38,177		37,285		5,746		1,124
Mexican peso		4,340		5,975		17		167
Pound sterling		16,616		13,395		102		305
Uruguayan peso		523		847		-		-
Other currency		37,894		35,520		184		624

Accounts payable to related entities, current		2,545		365		-		-
Chilean peso		1,950		253		-		-
U.S. dollar		595		112		-		-
Other currency		-		-		-		-

Other provisions, current		1,813		1,434		-		-
Chilean peso		28		28		-		-
Other currency		1,785		1,406		-		-

Tax liabilities, current		-		13		-		-
Argentine peso		-		4		-		-
Chilean peso		-		9		-		-

105

	Up to 90 days				91 days to 1 year
	As of		As of		As of		As of
	March 31,		December 31,		March 31,		December 31,
Current liabilities	2019		2018		2019		2018
	ThUS$		ThUS$		ThUS$		ThUS$
	Unaudited				Unaudited

Other non-financial liabilities, current		34,133		38,120		-		-
Argentine peso		639		1,089		-		-
Brazilian real		2,712		1,455		-		-
Chilean peso		10,880		14,130		-		-
Colombian peso		708		1,009		-		-
Euro		5,926		4,411		-		-
U.S. dollar		3,975		10,468		-		-
Other currency		9,293		5,558		-		-

Total current liabilities		1,153,188		1,074,724		187,662		145,624
Argentine peso		242,665		231,003		2,920		6,142
Brazilian real		34,805		32,690		693		1,152
Chilean peso		253,809		254,880		95,957		95,014
Colombian peso		5,491		8,924		13		752
Euro		95,941		90,018		293		1,375
U.S. dollar		411,633		352,738		81,217		38,969
Other currency		108,844		104,471		6,569		2,220

106

	More than 1 to 3 years				More than 3 to 5 years				More than 5 years
	As of		As of		As of		As of		As of		As of
	March 31,		December 31,		March 31,		December 31,		March 31,		December 31,
Non-current liabilities	2019		2018		2019		2018		2019		2018
	ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$
	Unaudited				Unaudited				Unaudited
Other financial liabilities, non-current		371,356		299,735		231,335		281,785		184,640		179,406
Chilean peso		78,168		16,259		176,545		237,377		176,602		172,530
Brazillian real		897		948		-		-		-		-
Euro		207		296		-		-		-		-
U.S. dollar		291,842		280,197		54,698		44,408		8,038		6,876
Other currency		242		2,035		92		-		-		-

Accounts payable, non-current		252,949		294,704		-		-		-		-
Chilean peso		13,879		14,027		-		-		-		-
U.S. dollar		237,865		279,437		-		-		-		-
Other currency		1,205		1,240		-		-		-		-

Other provisions, non-current		37,065		36,120		-		-		-		-
Argentine peso		462		542		-		-		-		-
Brazillian real		20,986		19,815		-		-		-		-
Colombian peso		299		295		-		-		-		-
Euro		9,222		9,403		-		-		-		-
U.S. dollar		6,096		6,065		-		-		-		-

Provisions for employees benefits, non-current		77,442		72,674		-		-		-		-
Chilean peso		76,900		72,187		-		-		-		-
U.S. dollar		542		487		-		-		-		-

Other non-financial liabilities, non-current		-		-		-		-		-		-
Colombian peso		-		-		-		-		-		-

Total non-current liabilities		738,812		703,233		231,335		281,785		184,640		179,406
Argentine peso		462		542		-		-		-		-
Brazilian real		21,883		20,763		-		-		-		-
Chilean peso		168,947		102,473		176,545		237,377		176,602		172,530
Colombian peso		299		295		-		-		-		-
Euro		9,429		9,699		-		-		-		-
U.S. dollar		536,345		566,186		54,698		44,408		8,038		6,876
Other currency		1,447		3,275		92		-		-		-

107


	As of			As of
	March 31,			December 31,
General summary of foreign currency:	2019			2018
	ThUS$			ThUS$
	Unaudited
Total assets		1,059,173			1,370,586
Argentine peso		73,782			72,275
Brazilian real		52,398			117,532
Chilean peso		345,702			594,858
Colombian peso		4,551			8,598
Euro		77,164			80,756
U.S. dollar		93,913			76,487
Other currency		411,663			420,080

Total liabilities		2,495,637			2,446,785
Argentine peso		246,047			237,687
Brazilian real		57,381			54,605
Chilean peso		871,860			862,274
Colombian peso		5,803			9,971
Euro		105,663			101,092
U.S. dollar		1,091,931			1,071,190
Other currency		116,952			109,966

Net position
Argentine peso		(172,265	)		(165,412	)
Brazilian real		(4,983	)		62,927
Chilean peso		(526,158	)		(267,416	)
Colombian peso		(1,252	)		(1,373	)
Euro		(28,499	)		(20,336	)
U.S. dollar		(998,018	)		(994,703	)
Other currency		294,711			310,114

108

(b)

Exchange differences

The exchange differences recognized in profit or loss, except for financial instruments measured at fair value through profit or loss, for the period ended March 31, 2019 and 2018, amounted a credit of ThUS$ 8,949 and ThUS$ 811, respectively.

The exchange differences recognized in statement of comprehensive income as reserves for translation exchange differences for the period ended March 31, 2019 and 2018 meant a charge of ThUS $ 19,667 and ThUS$ 13,041, respectively.

The following shows the current exchange rates for the U.S. dollar, on the dates indicated:

	As of March 31,		As of December 31,
	2019		2018		2017		2016
	Unaudited
Argentine peso		43.34		37.74		18.57		15.84
Brazilian real		3.9		3.87		3.31		3.25
Chilean peso		678.53		694.77		614.75		669.47
Colombian peso		3,184.62		3,239.45		2,984.77		3,000.25
Euro		0.89		0.87		0.83		0.95
Strong bolivar		-		-		3,345.00		673.76
Sovereign bolivar (*)		3,294.48		638.18		-		-
Australian dollar		1.41		1.42		1.28		1.38
Boliviano		6.86		6.86		6.86		6.86
Mexican peso		19.45		19.68		19.66		20.63
New Zealand dollar		1.47		1.49		1.41		1.44
Peruvian Sol		3.32		3.37		3.24		3.35
Uruguayan peso		33.43		32.38		28.74		29.28

(*) On August 20, 2018, in Venezuela there was a change of currency, five zeros were eliminated to simplify and the surname was changed to sovereign.

109

NOTE 30 - EARNINGS / (LOSS) PER SHARE

	For the period ended
	March 31,
Basic earnings / (loss) per share	2019			2018
	Unaudited			Restated Unaudited
Earnings / (loss) attributable to owners of the parent (ThUS$)		(60,074	)		92,169

Weighted average number of shares, basic		606,407,693			606,407,693

Basic earnings / (loss) per share (US$)		(0.09907	)		0.15199

	For the period ended
	March 31,
Diluted earnings / (loss) per share	2019			2018
	Unaudited			Restated Unaudited

Earnings / (loss) attributable to owners of the parent (ThUS$)		(60,074	)		92,169

Weighted average number of shares, basic		606,407,693			606,407,693

Weighted average number of shares, diluted		606,407,693			606,407,693

Diluted earnings / (loss) per share (US$)		(0.09907	)		0.15199

110

NOTE 31 – CONTINGENCIES

Lawsuits

Lawsuits filed by LATAM Airlines Group S.A. and Subsidiaries

Company	Court	Case Number	Origin	Stage of trial	Amounts Committed (*)
					ThUS$

Tam Viagens S.A.	Fazenda Pública do Município de São Paulo.	1004194-37.2018.8.26.0053	This is a voidance action appealing the charges for violations and fines (67.168.795 / 67.168.833 / 67.168.884 / 67.168.906 / 67.168.914 / 67.168.965). We are arguing that numbers are missing from the ISS calculation base since the company supposedly made improper deductions.	The lawsuit was assigned on January 31, 2018. That same day, a decision was rendered suspending the charges without any bond. We are waiting for the deadline for the municipality to appeal to expire. The municipality filed an appeal against this decision on April 30, 2018, that is pending a decision. The voidance action is now in the evidentiary period.	86,629

111

Lawsuits received by LATAM Airlines Group S.A. and Subsidiaries

Company	Court	Case Number	Origin	Stage of trial	Amounts Committed (*)
					ThUS$

LATAM Airlines Group S.A. y Lan Cargo S.A.	European Commission.	-	Investigation of alleged infringements to free competition of cargo airlines, especially fuel surcharge. On December 26^th , 2007, the General Directorate for Competition of the European Commission notified Lan Cargo S.A. and LATAM Airlines Group S.A. the instruction process against twenty five cargo airlines, including Lan Cargo S.A., for alleged breaches of competition in the air cargo market in Europe, especially the alleged fixed fuel surcharge and freight.	On April 14^th, 2008, the notification of the European Commission was replied. The appeal was filed on January 24, 2011. On May 11, 2015, we attended a hearing at which we petitioned for the vacation of the Decision based on discrepancies in the Decision between the operating section, which mentions four infringements (depending on the routes involved) but refers to Lan in only one of those four routes; and the ruling section (which mentions one single conjoint infraction). On November 9^th, 2010, the General Directorate for Competition of the European Commission notified Lan Cargo S.A. and LATAM Airlines Group S.A. the imposition of a fine in the amount of ThUS$ 9,222 (8.220.000 Euros) This fine is being appealed by Lan Cargo S.A. and LATAM Airlines Group S.A. On December 16, 2015, the European Court of Justice revoked the Commission’s decision because of discrepancies. The European Commission did not appeal the decision, but presented a new one on March 17, 2017 reiterating the imposition of the same fine on the eleven original airlines. The fine totals 776,465,000 Euros. It imposed the same fine as before on Lan Cargo and its parent, LATAM Airlines Group S.A., totaling 8.2 million Euros. On May 31, 2017 Lan Cargo S.A. and LATAM Airlines Group S.A. filed a petition with the General Court of the European Union seeking vacation of this decision. We presented our defense in December 2017. LATAM AIRLINES GROUP S.A. expects that the Court of the European Union will reduce this fine.	9,222

112

Company	Court	Case Number	Origin	Stage of trial	Amounts Committed (*)
					ThUS$

Lan Cargo S.A. y LATAM Airlines Group S.A.	In the High Court of Justice Chancery División (England) Ovre Romerike District Court (Norway) y Directie Juridische Zaken Afdeling Ceveil Recht (Netherlands) , Cologne Regional Court (Landgerich Köln Germany).	-	Lawsuits filed against European airlines by users of freight services in private lawsuits as a result of the investigation into alleged breaches of competition of cargo airlines, especially fuel surcharge. Lan Cargo S.A. and LATAM Airlines Group S.A., have been sued in court proceedings directly and/or in third party, based in England, Norway, the Netherlands and Germany.	Cases are in the uncovering evidence stage. In the case in England, mediation was held with nearly all the airlines involved in the aim of attempting to reach an agreement. It began in September, and LATAM Airlines Group S.A. reached an agreement for approximately GBP 636,000. A settlement was signed in December 2018 and payment was made in January 2019. This concluded the claim for all class-action plaintiffs except one, with whom negotiations continue. The amount is undetermined, but small.	-0-

Aerolinhas Brasileiras S.A.	Federal Justice.	0008285-53.2015.403.6105	An action seeking to quash a decision and petioning for early protection in order to obgain a revocation of the penalty imposed by the Brazilian Competition Authority (CADE) in the investigation of cargo airlines alleged fair trade violations, in particular the fuel surcharge.	This action was filed by presenting a guaranty – policy – in order to suspend the effects of the CADE’s decision regarding the payment of the following fines: (i) ABSA:ThUS$10,438; (ii) Norberto Jochmann: ThUS$201; (iii) Hernan Merino: ThUS$ 102; (iv) Felipe Meyer :ThUS$ 102. The action also deals with the affirmative obligation required by the CADE consisting of the duty to publish the condemnation in a widely circulating newspaper. This obligation had also been stayed by the court of federal justice in this process. Awaiting CADE’s statement. ABSA began a judicial review in search of an additional reduction in the fine amount. The Judge’s decision was published on March 12, 2019, and we filed an appeal against it on March 13, 2019.	10,532

113

Company	Court	Case Number	Origin	Stage of trial	Amounts Committed (*)
					ThUS$

Aerolinhas Brasileiras S.A.	Federal Justice.	0001872-58.2014.4.03.6105	An annulment action with a motion for preliminary injunction, was filed on 28/02/2014, in order to cancel tax debts of PIS, CONFINS, IPI and II, connected with the administrative process 10831.005704/2006.43.	We have been waiting since August 21, 2015 for a statement by Serasa on TAM’s letter of indemnity and a statement by the Union. The statement was authenticated on January 29, 2016. A petition on evidence and replications were filed on June 20, 2016. A new insurance policy was submitted on March 3, 2016 with the change to the guarantee requested by PGFN, which was declared on June 3, 2016. A decision is pending.	14,146

Tam Linhas Aéreas S.A.	Department of Federal Revenue of Brazil	19515.720476/2015-83	Alleged irregularities in the SAT payments for the periods 01/2011 to 12/2012.	The lawsuit was converted into a measure in January 2018. A statement will be made after the prosecutor’s measure has concluded. The Brazilian Administrative Council of Tax Appeals (CARF) issued a decision in favor of the Company on September 22, 2018. We are currently expecting that the Ministry of Finance of Brazil will appeal.	59,650

Tam Linhas Aéreas S.A.	Court of the Second Region.	2001.51.01.012530-0	Ordinary judicial action brought for the purpose of declaring the nonexistence of legal relationship obligating the company to collect the Air Fund.	Unfavorable court decision in first instance. Currently expecting the ruling on the appeal filed by the company. In order to suspend chargeability of Tax Credit a Guaranty Deposit to the Court was delivered for ThUS$106. The court decision requesting that the Expert make all clarifications requested by the parties in a period of 30 days was published on March 29, 2016. The plaintiffs’ submitted a petition on June 21, 2016 requesting acceptance of the opinion of their consultant and an urgent ruling on the dispute. No amount additional to the deposit that has already been made is required if this case is lost.	88,604

114

Company	Court	Case Number	Origin	Stage of trial	Amounts Committed (*)
					ThUS$

Tam Linhas Aéreas S.A.	Internal Revenue Service of Brazil.	10880.725950/2011-05	Compensation credits of the Social Integration Program (PIS) and Contribution for Social Security Financing (COFINS) Declared on DCOMPs.	The objection (manifestação de inconformidade) filed by the company was rejected, which is why the voluntary appeal was filed. The case was assigned to the 1st Ordinary Group of Brazil’s Administrative Council of Tax Appeals (CARF) on June 8, 2015. TAM’s appeal was included in the CARF session held August 25, 2016. An agreement that converted the proceedings into a formal case was published on October 7, 2016.	57,470

Aerovías de Integración Regional, AIRES S.A.	United States Court of Appeals for the Eleventh Circuit, Florida, U.S.A. 45th Civil Court of the Bogota Circuit in Colombia.	2013-20319 CA 01	The July 30th , 2012 Aerovías de Integración Recional, Aires S.A. ( LATAM AIRLINES COLOMBIA) initiated a legal process in Colombia against Regional One INC and Volvo Aero Services LLC, to declare that these companies are civilly liable for moral and material damages caused to LATAM AIRLINES COLOMBIA arising from breach of contractual obligations of the aircraft HK-4107. The June 20th , 2013 AIRES SA And / Or LATAM AIRLINES COLOMBIA was notified of the lawsuit filed in U.S. for Regional One INC and Dash 224 LLC for damages caused by the aircraft HK-4107 arguing failure of LATAM AIRLINES GROUP S.A. customs duty to obtain import declaration when the aircraft in April 2010 entered Colombia for maintenance required by Regional One.	This case is being heard by the 45th Civil Court of the Bogota Circuit in Colombia. Statements were taken from witnesses presented by REGIONAL ONE and VAS on February 12, 2018. The court received the expert opinions requested by REGIONAL ONE and VAS and given their petition, it asked the experts to expand upon their opinions. It also changed the experts requested by LATAM AIRLINES COLOMBIA. The case was brought before the Court on September 10, 2018 and these rulings are pending processing so that a new hearing can be scheduled. On October 31, 2018, the judge postponed the deadline for the parties to answer the objection because of a serious error brought to light by VAS regarding the translation submitted by the expert. The appointment of a new damage settlement expert is pending, requested by LATAM AIRLINES COLOMBIA because the previous designate did not take office. Also pending is a decision on the objection to the Spanish translation of the documents provided in English due to serious errors. VAS made this motion, which was served to the parties in October 2018. The claims by VAS and Regional One have been joined before the same State Court, which has set the date for the trial by jury for August 19, 2019. On March 27, 2019, the State Court denied LATAM Airlines Colombia’s petitions to dismiss the claims by Regional One and VAS for a lack of merits. Discovery is now underway until the trial begins. There may be some change in the amount claimed later on, which will be disclosed in due course.	12,443

115

Company	Court	Case Number	Origin	Stage of trial	Amounts Committed (*)
					ThUS$

Tam Linhas Aéreas S.A.	Internal Revenue Service of Brazil	10880.722.355/2014-52	On August 19th, 2014 the Federal Tax Service issued a notice of violation stating that compensation credits Program (PIS) and the Contribution for the Financing of Social Security COFINS by TAM are not directly related to the activity of air transport.	An administrative objection was filed on September 17th, 2014. A first-instance ruling was rendered on June 1, 2016 that was partially favorable. The separate fine was revoked. A voluntary appeal was filed on June 30, 2016, which is pending a decision by CARF. On September 9, 2016, , the case was referred to the Second Division, Fourth Chamber, of the Third Section of the Administrative Council of Tax Appeals (CARF).	66,230

TAM Linhas Aéreas S.A.	Sao Paulo Labor Court, Sao Paulo	1001531-73.2016.5.02.0710	The Ministry of Labor filed an action seeking that the company adapt the ergonomics and comfort of seats.	In August 2016, the Ministry of Labor filed a new lawsuit before the competent Labor Court in Sao Paulo, in the same terms as case 0000009-45.2016.5.02.090, as previously reported, the hearing date is set for October 22, 2018. We were served the decision completely dismissing the claim in March 2019, against which the plaintiff has filed an appeal. We are now awaiting the hearing by the Court of Appeals.	16, 981

116

Company	Court	Case Number	Origin	Stage of trial	Amounts Committed (*)
					ThUS$

LATAM Airlines Group S.A.	22° Civil Court of Santiago	C-29.945-2016	The Company received notice of a civil liability claim by Inversiones Ranco Tres S.A. on January 18, 2017. It is represented by Mr. Jorge Enrique Said Yarur. It was filed against LATAM Airlines Group S.A. for an alleged contractual default by the Company and against Ramon Eblen Kadiz, Jorge Awad Mehech, Juan Jose Cueto Plaza, Enrique Cueto Plaza and Ignacio Cueto Plaza, directors and officers, for alleged breaches of their duties. In the case of Juan Jose Cueto Plaza, Enrique Cueto Plaza and Ignacio Cueto Plaza, it alleges a breach, as controllers of the Company, of their duties under the incorporation agreement. LATAM has retained legal counsel specializing in this area to defend it.	The claim was answered on March 22, 2017 and the plaintiff filed its replication on April 4, 2017. LATAM filed its rejoinder on April 13, 2017, which concluded the argument stage of the lawsuit. A reconciliation hearing was held on May 2, 2017, but the parties did not reach an agreement. The Court issued the evidentiary decree on May 12, 2017. We filed a petition for reconsideration because we disagreed with certain points of evidence. That petition was partially sustained by the Court on June 27, 2017. The evidentiary stage commenced and then concluded on July 20, 2017. Observations to the evidence must now be presented. That period expires August 1, 2017. We filed our observations to the evidence on August 1, 2017. We were served the decision on December 13, 2017 that dismissed the claim since LATAM was in no way liable. The plaintiff filed an appeal on December 26, 2017. Arguments were pled before the Santiago Court of Appeals on April 23, 2019, and on April 30, 2019, this Court confirmed the ruling of the trial court absolving LATAM. The losing party was ordered to pay costs in both cases.	19,537

TAM Linhas Aéreas S.A.	10th Jurisdiction of Federal Tax Enforcement of Sao Paulo	0061196-68.2016.4.03.6182	Tax Enforcement Lien No. 0020869-47.2017.4.03.6182 on Profit-Based Social Contributions from 2004 to 2007.	This tax enforcement was referred to the 10th Federal Jurisdiction on February 16, 2017. A petition reporting our request to submit collateral was recorded on April 18, 2017. At this time, the period is pending for the plaintiff to respond to our petition. The bond was replaced.	39,514

TAM Linhas Aéreas S.A.	Federal Revenue Bureau	10880.900360/2017-55	A claim regarding the negative Company Income Tax (IRPJ) balance. Appraisals of compensation that were not accepted .	The case was referred to the National Claims Management Center of the Federal Revenue Bureau for Sao Paulo on May 11, 2017. The administrative case was closed in favor of the company and its right to a credit was recognized on June 15, 2018.	-0-

117

Company	Court	Case Number	Origin	Stage of trial	Amounts Committed (*)
					ThUS$

TAM Linhas Aéreas S.A.	Internal Revenue Service of Brazil	16643.000085/2009-47	Notice of claim to recover income taxes and social contributions paid on the basis of net profits (SCL) according to the royalty expenses and use of the TAM trademark.	The company presented its administrative defenses on canceling all charges in the administrative proceedings, which were judged admissible by the District Court. The tax administration filed an appeal before the Administrative Council of Tax Appeals (CARF), and CARF vacated the lower court’s decision and sustained the charges. The company then filed a new Special Appeal to the Superior Chamber of Tax Appeals (CSRF). In January 2018, CSRF partially admitted the company’s appeal to remove the Social Tax on Net Profits (CSL) and keep the Corporate Income Tax (IRPJ). The company filed a new appeal in July 2018 (clarification of ruling). The company was notified of the decision on the latter appeal in February 2019, which ruled that IRPJ was payable but not the CSL, which closed the case administratively.	15,503

TAM Linhas Aéreas S.A.	Internal Revenue Service of Brazil	10831.012344/2005-55	Notice of an infringement filed by the Company to request the import tax (II), the Social Integration Program (PIS) of the Social Security Funding Contribution (COFINS) as a result of an unidentified international cargo loss.	Before the Internal Revenue Service of Brazil. The administrative decision was against the company. The matter is pending a decision by the CARF	15,662

TAM Linhas Aéreas S.A.	DERAT SPO (Delegacía de Receita Federal	13808.005459/2001-45	Collection of the Social Security Funding Contribution (COFINS) based on gross revenue of the company in the period 1999-2000.	The decision on collection was pending through June 2, 2010.	23,702

TAM Linhas Aéreas S.A.	Federal Revenue Bureau	10880.938.664/2016-12	An administrative lawsuit about compensation not being proportional to the negative corporate income tax balance.	A decision is pending by CARF on the appeal. The Company’s right to its credit was recognized on November 21, 2018, which closed the administrative process in its favor.	-0-

118

Company	Court	Case Number	Origin	Stage of trial	Amounts Committed (*)
					ThUS$

TAM Linhas Aéreas S.A.	Delegacía de Receita Federal	10611.720630/2017-16	This is an administrative claim about a fine for the incorrectness of an import declaration (new lawsuit).	The administrative defensive arguments were presented September 28, 2017. A ruling on the defense is currently pending in this lawsuit.	20,323

TAM Linhas Aéreas S.A.	Delegacía de Receita Federal	10611.720852/2016-58	An improper charge of the Contribution for the Financing of Social Security (COFINS) on an import (new lawsuit).	We are currently awaiting a decision. There is no predictable decision date because it depends on the court of the government agency.	14,607

TAM Linhas Aéreas S.A	Delegacía de Receita Federal	16692.721.933/2017-80	The Internal Revenue Service of Brazil issued a notice of violation because TAM applied for credits offsetting the contributions for the Social Integration Program (PIS) and the Social Security Funding Contribution (COFINS) that do not bear a direct relationship to air transport.	We are awaiting the presentation of an administrative defense. An administrative defense was presented on May 29, 2018.	31,220

SNEA (Sindicato Nacional das empresas aeroviárias)	União Federal	0012177-54.2016.4.01.3400	A claim against the 72% increase in airport control fees (TAT-ADR) and approach control fees (TAT-APP) charged by the Airspace Control Department (“DECEA”).	A decision is now pending on the appeal presented by SNEA.	48,055

TAM Linhas Aéreas S/A	União Federal	2001.51.01.020420-0	TAM and other airlines filed a recourse claim seeking a finding that there is no legal or tax basis to be released from collecting the Additional Airport Fee (“ATAERO”).	A decision by the superior court is pending. The amount is indeterminate because even though TAM is the plaintiff, if the ruling is against it, it could be ordered by the trial judge to pay certain fees.	-0-

TAM Linhas Aéreas S/A	Delegacia da Receita Federal	10880-900.424/2018-07	This is a claim for a negative Legal Entity Income Tax (IRPJ) balance for the 2014 calendar year (2015 fiscal year) because set-offs were not allowed.	The administrative defensive arguments were presented March 19, 2018. An administrative decision is now pending.	17,108

119

Company	Court	Case Number	Origin	Stage of trial	Amounts Committed (*)
					ThUS$

TAM linhas Aérea S/A	International Centre for dispute resolution (“ICDR”)	01-18-0000-6332	Arbitration filed by Airbus S.A.S., Airbus North America Customer Services, Inc. and Allianz Corporate & Specialty SE (France) against AIG Europe Limited (“AIG”), TAM S.A. (“TSA”) and TAM Linhas Aéreas S.A. (“TLA”). In 2008, the parties exchanged draft agreements on sharing the costs of any indemnity for certain claims related to the Flight JJ3054 accident, but they did not reach an agreement, so the draft was never finalized or executed. Despite this, Airbus and its insured filed a formal arbitration claim and served AIG, TSA and TLA as defendants, seeking a decision on the validity of the agreement as well as a damage indemnity to Airbus because it could not share its defense with TAM. TAM has retained legal counsel in Switzerland, Brazil and the United States to handle this claim.	On January 31, 2018, Airbus S.A.S., Airbus North America Customer Services, Inc. and Allianz Corporate & Specialty SE (France) filed an arbitration claim with the International Centre for Dispute Resolution against AIG Europe Limited (“AIG”), TAM S.A. (“TSA”) and TAM Linhas Aéreas S.A. (“TLA”) seeking a decision on the validity of a shared-defense agreement that had been discussed but never finalized or executed by the parties. The plaintiffs allege that the parties exchanged enough correspondence and drafts to reflect the terms of a contract. Based on this alleged contract, they are demanding that TAM reimburse Airbus a sum of approximately KUS$9.2 for settlement costs and kUS$3 for legal fees, in addition to interest and any other amount decided by the Arbitrator On October 8, 2018, the plaintiffs filed a formal complaint that contained declarations by their supporting experts. On November 7, 2018, the Arbitrator issued a procedural ruling dividing the jurisdiction phase from the grounds-for-arbitration phase, thus expressing his agreement with the arguments by TSA and TLA as well as AIG. After a petition agreed by all parties, the Arbitrator postponed the deadline of December 14, 2018 while the parties held reconciliation negotiations. Finally, in December 2018, the parties agreed to hold a meeting to discuss a potential settlement that resulted in an agreement whereby Allianz Corporate & Speciality SE will pay AIG US$95 million toward the loss already settled by AIG for the accident. In exchange, all lawsuits and arbitration claims will be withdrawn at no additional cost to LATAM. The insurance companies received the necessary approvals from the agreement’s signatories, which took place on March 25, 2019. This agreement also ended the arbitration.	12,200

120

Company	Court	Case Number	Origin	Stage of trial	Amounts Committed (*)
					ThUS$

TAM Linhas Aéreas S/A	Department of Federal Revenue of Brazil	19515-720.823/2018-11	An administrative claim to collect alleged differences in SAT payments for the periods 11/2013 to 12/2017.	A defense was presented on November 28, 2018. We are now awaiting the administrative ruling.	119,675

TAM Linhas Aéreas S/A	Department of Federal Revenue of Brazil	5002912.29.2019.4.03.6100	A court action against the charge in administrative proceeding 16643.000085/2009-47.	This claim was heard on February 28 and March 1, 2019. The preliminary decision was to not require a bond. The final decision is pending.	11,052

TAM Linhas Aéreas S/A	Department of Federal Revenue of Brazil	10880.938832/2013-19	The decision denied the reallocation petition and did not equate the Social Security Tax (COFINS) credit declarations for the second quarter of 2011, which were determined to be in the non-cumulative system.	An administrative defense was argued on March 19, 2019. The decision is pending.	15,981

TAM Linhas Aéreas S/A	Department of Federal Revenue of Brazil	10880.938834/2013-16	The decision denied the reallocation petition and did not equate the Social Security Tax (COFINS) credit declarations for the third quarter of 2011, which were determined to be in the non-cumulative system.	An administrative defense was argued on March 19, 2019. The decision is pending.	11,684

TAM Linhas Aéreas S/A	Department of Federal Revenue of Brazil	10880.938837/2013-41	The decision denied the reallocation petition and did not equate the Social Security Tax (COFINS) credit declarations for the fourth quarter of 2011, which were determined to be in the non-cumulative system.	An administrative defense was argued on March 19, 2019. The decision is pending.	15,658

TAM Linhas Aéreas S/A	Department of Federal Revenue of Brazil	10880.938838/2013-96	The decision denied the reallocation petition and did not equate the Social Security Tax (COFINS) credit declarations for the first quarter of 2012, which were determined to be in the non-cumulative system.	We will argue our administrative defense.	10,805

121

Company	Court	Case Number	Origin	Stage of trial	Amounts Committed (*)
					ThUS$

TAM Linhas Aéreas S/A	Department of Federal Revenue of Brazil	0012541-56.2016.5.03.0144	A class action in which the Union is petitioning that TAM be ordered to make payment of the correct calculation of Sundays and holidays.	A hearing was set for December 17, 2019	13,932

LATAM Airlines Group Argentina	Commercial Trial Court No. 15 of Buenos Aires.	11479/2012	Proconsumer and Rafaella Cabrera filed a claim citing discriminating fees charged to foreign users as compared to domestic users for services retained in Argentina.	The trial court judge dismissed Mrs. Cabrera’s claim on March 7, 2019 and sustained the motion of lack of standing entered by Proconsumer. The ruling was appealed by the plaintiff on April 8, 2019 and will be decided by Room D.	-0-

LATAM Airlines Group Argentina, Brasil, Perú, Ecuador y TAM Mercosur	Commercial and Civil Trial Court No. 11 of Buenos Aires.	1408/2017	Consumidores Libres Coop. Ltda. filed this claim on March 14, 2017 regarding a provision of services. It petitioned for the reimbursement of certain fees or the difference in fees charged for passengers who purchased a ticket in the last 10 years but did not use it.	Federal Commercial and Civil Trial Court No. 11 in the city of Buenos Aires. After two years of arguments on jurisdiction and competence, the claim was assigned to this court and an answer was filed on March 19, 2019.	-0-

122

In order to deal with any financial obligations arising from legal proceedings in effect at March 31, 2019, whether civil, tax, or labor, LATAM Airlines Group S.A. and Subsidiaries, has made provisions, which are included in Other non-current provisions that are disclosed in Note 21.

The Company has not disclosed the individual probability of success for each contingency in order to not negatively affect its outcome.

(*)

The Company has reported the amounts involved only for the lawsuits for which a reliable estimation can be made of the financial impacts and of the possibility of any recovery, pursuant to Paragraph 86 of IAS 37 Provisions, Contingent Liabilities and Contingent Assets.

II.

Governmental Investigations.

1) On July 25, 2016, LATAM reached agreements with the U.S. Department of Justice (“DOJ”) and the U.S. Securities and Exchange Commission (“SEC”) regarding the investigation of payments for US$1,150,000 by Lan Airlines S.A. in 2006-2007 to a consultant advising it in the resolution of labor matters in Argentina.

The purpose of the investigation was to determine whether these payments violated the U.S. Foreign Corrupt Practices Act (“FCPA”) that: (i) forbids bribery of foreign government authorities in order to obtain a commercial advantage; and (ii) requires the companies that must abide by the FCPA to keep appropriate accounting records and implant an adequate internal control system. The FCPA is applicable to LATAM because of its ADR program in effect on the U.S. securities market.

After an exhaustive investigation, the DOJ and SEC concluded that there was no violation of the bribery provisions of the FCPA, which is consistent with the results of LATAM’s internal investigation. However, the DOJ and SEC consider that LAN accounted for these payments incorrectly and, consequently, infringed the part of the FCPA requiring companies to keep accurate accounting records. These authorities also consider that LAN’s internal controls in 2006-2007 were weak, so LAN would have also violated the provisions in the FCPA requiring it to maintain an adequate internal control system.

The agreements signed, included the following:

(a) The agreement with the DOJ involves: (i) entering into a Deferred Prosecution Agreement (“DPA”), which is a public contract under which the DOJ files public charges alleging an infringement of the FCPA accounting regulations. LATAM is not obligated to answer these charges, the DOJ will not pursue them for a period of 3 years, and the DOJ will dismiss the charges after expiration of that 3-year period provided LATAM complies with all terms of the DPA. In exchange, LATAM must admit to the negotiated events described in the DPA and agree to pay the negotiated fine explained below and abide by other terms stipulated in the agreement; (ii) clauses in which LATAM admits that the payments to the consultant in Argentina were incorrectly accounted for and that at the time those payments were made (2006-2007), it did not have adequate internal controls in place; (iii) LATAM’s agreement to have an outside consultant monitor, evaluate and report to the DOJ on the effectiveness of LATAM’s compliance program for a period of 27 months; and LATAM’s agreement to continue evaluating and reporting directly to the DOJ on the effectiveness of its compliance program for a period of 9 months after the consultant’s work concludes; and (iv) LATAM paid a fine of ThUS$12,750.

123

(b) The agreement with the SEC involves: (i) accepting a Cease and Desist Order, which is an administrative resolution of the SEC closing the investigation, in which LATAM will accept certain obligations and statements of fact that are described in the document; (ii) accepting the same obligations regarding the consultant mentioned above; and (iii) LATAM paid a fine of ThUS$6,744 and interest of ThUS$2,694.

NOTE 32 – COMMITMENTS

(a)

Loan covenants

With respect to various loans signed by the Company for the financing of Boeing 767, 767F, 777F and 787 aircraft, which carry the guarantee of the United States Export–Import Bank, limits have been set on some of the Company’s financial indicators on a consolidated basis, for which, in any case non-compliance does not generate acceleration of the loans.

Moreover, and related to these same contracts, restrictions are also in place on the Company’s management in terms of its ownership, in relation to the ownership structure and the controlling group, and disposal of the assets which mainly refers to important transfers of assets.

The Company and its subsidiaries do not maintain financial credit contracts with banks in Chile that indicate some limits on financial indicators of the Company or its subsidiaries.

The revolving credit facility ("Revolving Credit Facility") with aircraft, engines, parts and supplies guaranteed for a total available amount of US$ 575 million, contemplates minimum liquidity restrictions, measured at the level of the Consolidated Company and measured at the for companies LATAM Airlines Group SA and TAM Linhas Aéreas S.A., which remain standby while the credit line is not used. As of March 31, 2019 this line of credit established with a consortium of eleven banks led by Citibank, is not used.

As of March 31, 2019, the Company is in compliance with all the indicators detailed above.

124

At March 31, 2019 the Company has existing letters of credit, certificates of deposits and warranty insurance policies as follows:

			Value		Release
Creditor Guarantee	Debtor	Type	ThUS$		date

Servicio Nacional de Aduana del Ecuador	Líneas Aéreas Nacionales del Ecuador S.A.	Three letter of credit		1,705	Aug-05-19
Corporación Peruana de Aeropuertos y Aviación Comercial	Lan Perú S.A.	Twenty nine letter of credit		3,506	May-30-19
Lima Airport Partners S.R.L.	Lan Perú S.A.	Two letter of credit		1,758	May-21-19
Superintendencia Nacional de Aduanas y de Administración Tributaria	Lan Perú S.A.	Nineteen letter of credit		152,000	Apr-21-19
Aena Aeropuertos S.A.	LATAM Airlines Group S.A.	Four letter of credit		3,102	Nov-15-19
American Alternative Insurance Corporation	LATAM Airlines Group S.A.	Six letter of credit		3,690	Abr-05-19
Citibank N.A.	LATAM Airlines Group S.A.	One letter of credit		27,226	Dec-20-19
Comisión Europea	LATAM Airlines Group S.A.	One letter of credit		9,409	Dec-31-19
Deutsche Bank A.G.	LATAM Airlines Group S.A.	One letter of credit		2,500	March-31-20
Dirección General de Aeronáutica Civil	LATAM Airlines Group S.A.	Forty seven letter of credit		19,390	Apr-30-19
Empresa Pública de Hidrocarburos del Ecuador EP Petroecuador	LATAM Airlines Group S.A.	One letter of credit		5,500	Jun-18-19
Metropolitan Dade County	LATAM Airlines Group S.A.	Seven letter of credit		2,191	Apr-09-19
Instituto Nacional de Defensa de la Competencia y de la Protección de la Propiedad Intelectual	LATAM Airlines Group S.A.	Forty letter of credit		1,310	May-16-19
Conselho Administrativo de Conselhos Federais	Tam Linhas Aéreas S.A.	Two letter of credit		1,626	Nov-24-20
Procon	Tam Linhas Aéreas S.A.	One letter of credit		1,309	Apr-01-21
União Federal	Tam Linhas Aéreas S.A.	Two letter of credit		3,217	Sep-28-21
Vara da Fazenda Pública da Comarca do Rio de Janeiro - RJ	Tam Linhas Aéreas S.A.	One letter of credit		1,047	Sep-27-23
Vara das Execuções Fiscais Estaduais	Tam Linhas Aéreas S.A.	Four letter of credit		8,541	May-23-19
Procon	ABSA linhas Aereas Brasileira S/A	One letter of credit		10,495	May-19-20
Vara Federal da Subseção de Campinas SP	ABSA linhas Aereas Brasileira S/A	One letter of credit		5,457	Oct-20-21
Conselho Administrativo de Conselhos Federais	ABSA linhas Aereas Brasileira S/A	One letter of credit		15,919	Feb-22-21
				280,898

125

NOTE 33 - TRANSACTIONS WITH RELATED PARTIES

(a) Details of transactions with related parties as follows:

Transaction amount

Nature of

with related parties

relationship with

Country

related parties

As of March 31,

Tax No.

Related party

related parties

of origin

transactions

Currency

2019

2018

Unaudited

ThUS$

96.810.370-9

Inversiones Costa Verde Ltda. y CPA.

Related director

Chile

Tickets sales

CLP

78.591.370-1

Bethia S.A and subsidiaries

Related director

Chile

Services received of cargo transport

CLP

556

212

Services received from National and International Courier

CLP

)

(17

)

Services provided of cargo transport

CLP

Sales commissions

CLP

(54

)

(353

)

Services received of transfer of passengers

CLP

(230

)

Services received advertising

CLP

87.752.000-5

Granja Marina Tornagaleones S.A.

Common shareholder

Chile

Services provided

CLP

Foreign

Consultoría Administrativa Profesional S.A. de C.V.

Associate

Mexico

Professional counseling services received

MXN

(668

)

Foreign

Inversora Aeronáutica Argentina

Related director

Argentina

Property leases received

ARS$

(66

)

Foreign

TAM Aviação Executiva e Taxi Aéreo S/A

Common shareholder

Brazil

Services provided

BRL

Services received of cargo transport

BRL

Services received at airports

BRL

(10

)

Foreign

Qatar Airways

Indirect shareholder

Qatar

Services provided by aircraft lease

US$

6,260

5,325

Interlineal received service

US$

(340

)

(306

)

Interlineal provided service

US$

2,804

1,330

Services provided of handling

US$

393

441

Services provided / received others

US$

159

The balances of Accounts receivable and accounts payable to related parties are disclosed in Note 9.

Transactions between related parties have been carried out under market conditions between interested and duly informed parties.

126

(b)

Compensation of key management

The Company has defined for these purposes that key management personnel are the executives who define the Company’s policies and major guidelines and who directly affect the results of the business, considering the levels of Vice-Presidents, Chief Executives and Directors (Senior).

	For the period ended
	March 31,
	2019		2018
	ThUS$		ThUS$
	Unaudited
Remuneration		3,594		3,427
Management fees		79		34
Non-monetary benefits		460		186
Short-term benefits		17,807		22,284
Long-term benefits		8,343		-
Share-based payments		2,644		7,735
Termination benefits		-		59
Total		32,927		33,725

NOTE 34 - SHARE-BASED PAYMENTS

(a)

Compensation plan for increase of capital

Compensation plans implemented by providing options for the subscription and payment of shares that have been granted by LATAM Airlines Group S.A. to employees of the Company and its subsidiaries, are recognized in the financial statements in accordance with the provisions of IFRS 2 "Share-based Payment”, showing the effect of the fair value of the options granted under compensation in linear between the date of grant of such options and the date on which these irrevocable.

(a.1)

Compensation plan 2013 not current as of this date

At the Extraordinary Shareholders' Meeting held on June 11, 2013, the shareholders of the Company approved, among other matters, the increase in the share capital, of which 1,500,000 shares were allocated to compensation plans for the employees of the Company. Company and its subsidiaries, in accordance with the provisions of Article 24 of the Law on Public Limited Companies.

On June 11, 2018, expired the term to subscribe said actions, which were neither subscribed nor paid, reducing the capital of full rights.

127

(b)

Compensation plan 2016-2018

The company implemented a retention plan long-term for executives, which lasts until December 2018, with a vesting period between October 2018 and March 2019, which consists of an extraordinary bonus whose calculation formula is based on the variation the value to experience the action of LATAM Airlines Group S.A. for a period of time.

This benefit is recorded in accordance with the provisions of IFRS 2 "Payments based on shares" and has been considered as a cash settled award and, therefore, recorded at fair value as a liability, which is updated at the closing date. of each financial statement with effect on the result of the period.

	Base Units
	Opening										Closing
Periods	balance		Granted		Annulled			Exercised			Balance
From January 1 to December 31, 2018		2,932,896		-		(171,419	)		(1,168,700	)		1,592,777
From January 1 to March 31, 2019 (Unaudited)		1,592,777		93,481		-			(1,635,562	)		50,696

The fair value has been determined on the basis of the best estimate of the future value of the Company share multiplied by the number of units granted bases.

As of March 31, 2019 and as of December 31, 2018, the amount recorded is ThUS $ 2,664 and 7,335, respectively, classified under the line "Administrative expenses" of the Consolidated Income Statement by function.

(c)

Subsidiaries compensation plans

(c.1)

Stock Options

Multiplus S.A., subsidiaries of TAM S.A., have outstanding stock options at December 31, 2018, which amounted to 247,500 shares (at December 31, 2017, the distribution of outstanding stock options amounted to 316,025 for Multiplus S.A.).

Multiplus S.A.

					4nd Extraordinary
	3rd Grant		4th Grant		Grant
Description	03-21-2012		04-03-2013		11-20-2013		Total
Outstanding option number as December 31, 2018		84,249		163,251		-		247,500
Outstanding option number as March 31, 2019 (Unaudited)		84,249		163,251		-		247,500

For Multiplus S.A., the plan's terms provide that the options granted to the usual prizes are divided into three equal parts and employees may exercise one-third of their two, three and four, options respectively, as long as they keep being employees of the company. The agreed term of the options is seven years after the grant of the option. The first extraordinary granting was divided into two equal parts, and only half of the options may be exercised after three years and half after four years. The second extraordinary granting was also divided into two equal parts, which may be exercised after one and two years respectively.

128

The acquisition of the share's rights, in both companies is as follows:

Number of shares

Accrued options

Non accrued options

As of

March 31,

December 31,

March 31,

December 31,

Company

2019

2018

2019

2018

Unaudited

Multiplus S.A.

247,500

In accordance with IFRS 2 - Payments based on shares, the fair value of the option must be recalculated and recorded in the liability of the Company, once cash payment is made (cash-settled). The fair value of these options was calculated using the "Black-Scholes-Merton" method, where the assumptions were updated with information from LATAM Airlines Group S.A. As of December 31, 2018 and 2017 there is no value recorded in liabilities and results.

(c.2)

Payments based on restricted stock

In May of 2014 the Management Council of Multiplus S.A. approved a plan to grant restricted stock, a total of 91,103 ordinary, registered book entry securities with no face value, issued by the Company to beneficiaries.

The quantity of restricted stock units was calculated based on employees’ expected remunerations divided by the average price of shares in Multiplus S.A. traded on the BM&F Bovespa exchange in the month prior to issue, April of 2014. This benefits plan will only grant beneficiaries the right to the restricted stock when the following conditions have been met:

a. Compliance with the performance goal defined by this Council as return on Capital Invested.

b. The Beneficiary must remain as an administrator or employee of the Company for the period running from the date of issue to the following dates described, in order to obtain rights over the following fractions: (i) 1/3 (one third) after the 2nd year from the issue date; (ii) 1/3 (one third) after the 3rd year from the issue date; (iii) 1/3 (one third) after the 4th year from the issue date.

Number shares in circulation

								Not acquired due
	Opening							to breach of employment			Closing
	balance		Granted		Exercised			retention conditions			balance
From January 1 to December 31, 2018		309,710		-		(83,958	)		(8,916	)		216,836
From January 1 to March 31, 2019 (Unaudited)		216,836		-		(91,595	)		(25,294	)		99,947

129

NOTE 35 - STATEMENT OF CASH FLOWS

(a) The Company has done significant non-cash transactions mainly with financial leases, which are detailed in Note 17 letter (d), additional information in numeral (iv) Financial leases.

(b) Other inflows (outflows) of cash:

	For the period ended
	March 31,
	2019			2018
	ThUS$			ThUS$
	Unaudited
Fuel hedge		(1,561	)		14,654
Hedging margin guarantees		(1,607	)		(5,844	)
Guarantees		(8,943	)		1,799
Tax paid on bank transaction		(960	)		(3,308	)
Currency hedge		-			(1,064	)
Bank commissions, taxes paid and other		(2,082	)		(3,319	)
Fuel derivatives premiums		-			1,566
Court deposits		(12,835	)		(10,806	)

Total Other inflows (outflows) Operation flow		(27,988	)		(6,322	)

Tax paid on bank transaction		(597	)		(621	)
Others		-			12,352

Total Other inflows (outflows) Investment flow		(597	)		11,731

Aircraft Financing advances		27,864			-
Settlement of derivative contracts		(618	)		(2,449	)

Total Other inflows (outflows) Financing flow		27,246			(2,449	)

	For the period ended
	March 31,
	2019		2018
	ThUS$		ThUS$
	Unaudited
Multiplus S.A. (*)		-		(9,716	)
Total dividends paid		-		(9,716	)

(*) Dividends paid to minority shareholders

130

(d) Reconciliation of liabilities arising from financing activities:

	As of		Cash flows								Non-Flow Movements					As of
Obligations with	December 31,		Obtainment		Payment						Interest accrued					March 31,
financial institutions	2018		Capital		Capital			Interest			and others			Reclassifications		2019
	ThUS$		ThUS$		ThUS$			ThUS$			ThUS$			ThUS$		ThUS$
	Restated															Unaudited
	Unaudited
Loans to exporters		400,721		-		(23,000	)		(2,413	)		4,535			-		379,843
Bank loans		222,741		-		(56,871	)		(2,270	)		4,924			-		168,524
Guaranteed obligations		2,534,021		-		(53,849	)		(22,886	)		(403,534	)		-		2,053,752
Other guaranteed obligations		673,452		-		(23,044	)		(7,770	)		7,866			-		650,504
Obligation with the public		1,553,079		594,354		-			-			40,903			-		2,188,336
Financial leases		1,624,854		-		(126,150	)		(18,742	)		445,658			-		1,925,620
Other loans		252,858		27,864		(23,167	)		(2,878	)		3,705			725		259,107
Lease liability		2,855,874				(94,136	)		(43,960	)		219,594					2,937,372
Total Obligations with financial institutions		10,117,600		622,218		(400,217	)		(100,919	)		323,651			725		10,563,058

	As of		Cash flows								Non-Flow Movements					As of
Obligations with	December 31,		Obtainment		Payment						Interest accrued					March 31,
financial institutions	2017		Capital		Capital			Interest			and others		Reclassifications			2018
	ThUS$		ThUS$		ThUS$			ThUS$			ThUS$		ThUS$			ThUS$
	Restated															Unaudited
	Unaudited
Loans to exporters		314,619		80,001		(70,000	)		(2,246	)		3,287		-			325,661
Bank loans		321,633		5,003		(22,095	)		(3,294	)		5,804		-			307,051
Guaranteed obligations		4,036,843		-		(87,713	)		(30,300	)		30,550		(854,854	)		3,094,526
Other guaranteed obligations		242,175		-		213			(2,274	)		2,333		-			242,447
Obligation with the public		1,584,066		-		-			-			36,906		-			1,620,972
Financial leases		1,109,504		-		(183,839	)		(17,903	)		25,627		854,854			1,788,243
Other loans		282,800		-		(21,551	)		(4,560	)		4,499		-			261,188
Lease liability		3,155,035				(91,416	)		(46,428	)		110,320		-			3,127,511
Total Obligations with financial institutions		11,046,675		85,004		(476,401	)		(107,005	)		219,326		-			10,767,599

(e)

Advances of aircraft

Below are the cash flows associated with aircraft purchases, which are included in the statement of consolidated cash flow, in the item Purchases of properties, plants and equipment:

	For the period ended
	March 31,
	2019			2018
	ThUS$			ThUS$
	Unaudited
Increases (payments)		(27,864	)		(33,772	)
Recoveries		51,239			(30,050	)
Total cash flows		23,375			(63,822	)

131

f) The net effect by the hyperinflation application in the consolidated statement of cash flow for the exercise ended December 31, 2018 corresponds to:

	ThUS$
Net cash flows from (used in) operating activities		6,088
Net cash flows from (used in) investment activities		(17,611	)
Net cash flows from (used in) financing activities		3,914
Effects of variation in the exchange rate on cash and cash equivalents		7,609
Net increase (decrease) in cash and cash equivalents		-

NOTE 36 - THE ENVIRONMENT

LATAM Airlines Group S.A has a commitment to sustainable development seeking to generate value taking into account the governance, environmental and social aspects. The company manages environmental issues at a corporate level, centralized in the Sustainability Management. For the company to monitor and minimize its impact on the environment is a commitment of the highest level; where the continuous improvement and contribute to the solution of the global climate change problem, generating added value to the company and the region, are the pillars of its management.

One of the functions of the Sustainability Management in environmental issues, together with the various areas of the Company, is to ensure environmental compliance, implement a management system and environmental programs that comply with the requirements every day more demanding worldwide; in addition to continuous improvement programs in their internal processes, which generate environmental, social and economic benefits and which are added to those currently carried out.

Within the sustainability strategy, the Environment dimension of LATAM Airlines Group S.A., is called Climate Change and is based on the goal of achieving world leadership in this area, and for which we work on the following aspects:

i. Carbon footprint

ii. Eco Efficiency

iii. Sustainable Alternative Energy

iv. Standards and Certifications

This is how, during 2019, the following initiatives have been carried out:

Implementation of an Environmental Management System for the main operations of the company. It is highlighted that the company during 2018 has recertified its environmental management system in Miami facilities following the guidelines of the international standard ISO 14.001.

Maintenance of the Stage 2 Certification of IATA Environmental Assessment (IEnvA) whose scope is the international flights operated from Chile, the most advanced level of this certification; being the first in the continent and one of the four airlines in the world that have this certification.

During 2018, the Colombian operation achieved its certification in Stage 1 of IEnvA.

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Preparation of the environmental chapter for the sustainability report of the company 2019, which allows to measure progress in environmental issues.

Answer to the questionnaire of the DJSI.

Measurement and external verification of the Corporate Carbon Footprint.

Neutralization of land operations in the operations of Colombia and Peru with emblematic reforestation projects in the respective countries.

Incorporation of 100% electric power from renewable sources in the maintenance base facilities and the corporate building of operations in Chile.

It is highlighted that in 2018, LATAM Airlines Group maintained its inclusion for the fifty consecutive year in the world category of the Dow Jones Sustainability Index, with only 3 airlines in the world belonging to this select group.

NOTE 37 - EVENTS SUBSEQUENT TO THE DATE OF THE FINANCIAL STATEMENTS

On April 3, 2019, Tam Linhas Aereas S.A. a subsidiary of Latam Airliens Group S.A., announced that it has been approached by Elliott Associates L.P., Elliott International L.P., and Manchester Securities Corporation (jointly "Elliott"), the largest debt holders of Oceanair Linhas Aéreas S.A. and AVB Holding S.A. (jointly "Avianca Brazil"), and has agreed to bid for at least one independent productive unit (“IPU”) of its respective assets (including but not limited to certain contracts, operating certificates, permits, and slots), of Elliot’s restructuring proposal in upcoming auctions for a minimum amount of US$70 million. As part of the proposed restructuring, subject to compliance with certain conditions, Tam Linhas Aereas S.A. has committed to extend to Avianca Brazil, directly and indirectly, up to US$13 million of debtor–in–possession loans to finance, in part, working capital in support of the ongoing operations, amount that will be reimbursed to TAM Linhas Aereas S.A. if the restructuring proposal is successful. At this date, the process is suspended.

On April 16, 2019, LATAM Airlines Group S.A. received the notification of the resolution issued by the National Economic Prosecutor's Office (FNE) that initiates an investigation into the LATAM Pass frequent passenger program. The Company is cooperating with this process.

At the Ordinary Shareholders' Meeting held on April 25, 2019, the shareholders approved the distribution of the final dividend proposed by the Board in the last meeting held on April 9 which proposed consists in distributing as dividend 30% of the Profit for the year 2018, equivalent to an amount of US $ 54,580,443.06, which will be paid on May 16, 2019.

On May 8, 2019, the Brazilian securities regulator, CVM (Comissão de Valores Mobiliários), approved the delisting of Multiplus S.A. converting it into a private equity company that are no longer trading on the B3 Novo Mercado or any other market, as of May 6, 2019, TAM S.A. a subsidiary of LATAM Airlines Group SA, informed that the de-listing continues at the end of the successful public offering to acquire the shares of Multiplus SA (approximately 27.3% of the circulating stock), operation that was successfully completed on April 1, 2019.

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On March 31, 2019 and until the date of issuance of these financial statements, there is no knowledge of other financial or other events that significantly affect the balances or their interpretation.

The interim consolidated financial statements of LATAM Airlines Group S.A. and Subsidiaries as of March 31, 2019, have been approved in an Extraordinary Board Meeting on _____ __, 2019.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.