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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
February 2024
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 x Form 40-F o
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): o
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): o


LATAM AIRLINES GROUP S.A.
The following exhibit is attached:
EXHIBIT NO.DESCRIPTION
99.1
1

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.
Date: February 22, 2024LATAM AIRLINES GROUP S.A.
By:/s/ Ramiro Alfonsín
Name: Ramiro Alfonsín
Title:CFO
2
Document


https://cdn.kscope.io/38578f330f9db91301d15cb0f48f6e20-image_0a.jpg




LATAM AIRLINES GROUP S.A. AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2023



    











CONTENTS

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





CLP    -    CHILEAN PESO
UF    -    CHILEAN UNIDAD DE FOMENTO
ARS    -    ARGENTINE PESO
US$    -    UNITED STATES DOLLAR
THUS$    -    THOUSANDS OF UNITED STATES DOLLARS
MUS$    -    MILLIONS OF UNITED STATES DOLLARS
COP    -    COLOMBIAN PESO
BRL/R$    -    BRAZILIAN REAL
THR$        -     THOUSANDS OF BRAZILIAN REAL











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

Notes      Page

1 - General information..................................................................................................................................    1
2 - Summary of material accounting policies ................................................................................................    6
2.1. Basis of Preparation ...........................................................................................................................    6
2.2. Basis of Consolidation ......................................................................................................................    10
2.3. Foreign currency transactions ...........................................................................................................    10
2.4. Property, plant and equipment ..........................................................................................................    12
2.5. Intangible assets other than goodwill ................................................................................................12
2.6. Borrowing costs ................................................................................................................................    12
2.7. Losses for impairment of non-financial assets .................................................................................    13
2.8. Financial assets .................................................................................................................................    13
2.9. Derivative financial instruments and embedded derivatives ............................................................    13
2.10. Inventories.......................................................................................................................................    15
2.11. Trade and other accounts receivable ..............................................................................................    15
2.12. Cash and cash equivalents ..............................................................................................................    15
2.13. Capital .............................................................................................................................................    15
2.14. Trade and other accounts payables .................................................................................................    15
2.15. Interest-bearing loans ......................................................................................................................    15
2.16. Current and deferred taxes ..............................................................................................................    16
2.17. Employee benefits ..........................................................................................................................    16
2.18. Provisions .......................................................................................................................................    17
2.19. Revenue from contracts with customers .........................................................................................    17
2.20. Leases .............................................................................................................................................    18
2.21. Non-current assets (or disposal groups) classified as held for sale.................................................    19
2.22. Maintenance ....................................................................................................................................    19
2.23. Environmental costs ........................................................................................................................    20
3 - Financial risk management .....................................................................................................................    20
3.1. Financial risk factors ........................................................................................................................    20
3.2. Capital risk management ..................................................................................................................    33
3.3. Estimates of fair value ......................................................................................................................    33
4 - Accounting estimates and judgments......................................................................................................    35
5 - Segment information ..............................................................................................................................    38
6 - Cash and cash equivalents ......................................................................................................................    39
7 - Financial instruments .............................................................................................................................    40
8 - Trade and other accounts receivable current, and non-current accounts receivable ..............................    41
9 - Accounts receivable from/payable to related entities ............................................................................    43
10 - Inventories ............................................................................................................................................    44
11 - Other financial assets ...........................................................................................................................    45
12 - Other non-financial assets ....................................................................................................................    46
13 - Non-current assets and disposal group classified as held for sale.........................................................    47
14 - Investments in subsidiaries ..................................................................................................................    48
15 - Intangible assets other than goodwill ...................................................................................................    51
16 - Property, plant and equipment ..............................................................................................................    53
17 - Current and deferred tax .......................................................................................................................    58
18 - Other financial liabilities ......................................................................................................................    63
19 - Trade and other accounts payables .......................................................................................................    71
20 - Other provisions....................................................................................................................................    72
21 - Other non financial liabilities ...............................................................................................................    73
22 - Employee benefits ................................................................................................................................    74
23 - Accounts payable, non-current ............................................................................................................    77
24 - Equity ...................................................................................................................................................    78
25 - Revenue ................................................................................................................................................    86
26 - Costs and expenses by nature ...............................................................................................................    86
27 - Other income, by function ...................................................................................................................    89
28 - Foreign currency and exchange rate differences .................................................................................    89
29 – Earning (Loss) per share......................................................................................................................    96
30 - Contingencies .....................................................................................................................................    97
31 - Commitments .....................................................................................................................................    122
32 - Transactions with related parties ........................................................................................................    125
33 - Share based payments ........................................................................................................................    127



34 - Statement of cash flows ......................................................................................................................    129
35 - The environment ................................................................................................................................    134
36 - Events subsequent to the date of the financial statements ..................................................................    136





























































LATAM AIRLINES GROUP S.A. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION




ASSETS
NoteAs of
December 31, 2023		As of
December 31, 2022
ThUS$ThUS$
Current Assets
Cash and cash equivalents6 - 71,714,761 1,216,675 
Other financial assets7 - 11174,819 503,515 
Other non-financial assets12185,264 191,364 
Trade and other accounts receivable7 - 81,385,910 1,008,109 
Accounts receivable from related entities7 - 928 19,523 
Inventories10592,880 477,789 
Current tax assets1747,030 33,033 
Total current assets other than non-current assets (or disposal groups) classified as held for sale4,100,692 3,450,008 
Non-current assets (or disposal groups) classified as held for sale13102,670 86,416 
Total current assets4,203,362 3,536,424 
Non-current assets
Other financial assets7 - 1134,485 15,517 
Other non-financial assets12168,621 148,378 
Accounts receivable7 - 812,949 12,743 
Intangible assets other than goodwill151,151,986 1,080,386 
Property, plant and equipment169,091,130 8,411,661 
Deferred tax assets174,782 5,915 
Total non-current assets10,463,953 9,674,600 
Total assets14,667,315 13,211,024 


The accompanying Notes 1 to 36 form an integral part of these consolidated financial statements.




















LATAM AIRLINES GROUP S.A. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION



LIABILITIES AND EQUITY
LIABILITIESNoteAs of
December 31, 2023		As of
December 31, 2022
ThUS$ThUS$
Current liabilities
Other financial liabilities7 - 18596,063 802,841 
Trade and other accounts payables7 - 191,765,279 1,627,992 
Accounts payable to related entities7 - 97,444 12 
Other provisions2015,072 14,573 
Current tax liabilities172,371 1,026 
Other non-financial liabilities213,301,906 2,642,251 
Total current liabilities5,688,135 5,088,695 
Non-current liabilities
Other financial liabilities7 - 186,341,669 5,979,039 
Accounts payable7 - 23418,587 326,284 
Other provisions20926,736 927,964 
Deferred tax liabilities17382,359 344,625 
Employee benefits22122,618 93,488 
Other non-financial liabilities21348,936 420,208 
Total non-current liabilities8,540,905 8,091,608 
Total liabilities14,229,040 13,180,303 
EQUITY
Share capital245,003,534 13,298,486 
Retained earnings/(losses)24464,411 (7,501,896)
Treasury Shares24— (178)
Other equity2439 39 
Other reserves24(5,017,682)(5,754,173)
Parent’s ownership interest450,302 42,278 
Non-controlling interest14(12,027)(11,557)
Total equity438,275 30,721 
Total liabilities and equity14,667,315 13,211,024 



The accompanying Notes 1 to 36 form an integral part of these consolidated financial statements.












LATAM AIRLINES GROUP S.A. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME BY FUNCTION


For the year ended December 31,
Note20232022
ThUS$ThUS$
Revenue5 - 2511,640,541 9,362,521 
Cost of sales26(8,816,590)(8,103,483)
Gross margin2,823,951 1,259,038 
Other income27148,641 154,286 
Distribution costs26(587,272)(426,599)
Administrative expenses26(683,311)(576,429)
Other expenses26(532,801)(531,575)
Gains/(losses) from restructuring activities26— 1,679,934 
Other gains/(losses)26(91,043)(347,077)
Income (loss) from operation activities1,078,165 1,211,578 
Financial income26125,356 1,052,295 
Financial costs26(698,231)(942,403)
Foreign exchange gains/(losses)85,891 25,993 
Result of indexation units5,311 (1,412)
Income (loss) before taxes596,492 1,346,051 
Income tax (expense)/benefits17(14,942)(8,914)
NET INCOME (LOSS) FOR THE YEAR581,550 1,337,137 
Income (loss) attributable to owners of the parent581,831 1,339,210 
Income (loss) attributable to non-controlling interest14(281)(2,073)
Net Income (loss) for the year581,550 1,337,137 
EARNING (LOSS) PER SHARE
Basic earnings (loss) per share (US$)290.000963 0.013861 
Diluted earnings (loss) per share (US$)290.000963 0.013592 



The accompanying Notes 1 to 36 form an integral part of these consolidated financial statements.




LATAM AIRLINES GROUP S.A. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME


For the year ended at December 31,
Note20232022
ThUS$ThUS$
NET INCOME/(LOSS)581,550 1,337,137 
Components of other comprehensive income (loss) that will not be reclassified to income before taxes
Other comprehensive income (loss), before taxes, gains (losses) by new measurements on defined benefit plans24(21,198)(9,935)
Total other comprehensive (loss) that will not be reclassified to income before taxes(21,198)(9,935)
Components of other comprehensive income that will be reclassified to income before taxes
Currency translation differences Gains (losses) on currency translation, before tax(12,423)(32,563)
Other comprehensive loss, before taxes, currency translation differences(12,423)(32,563)
Cash flow hedges
Gains (losses) on cash flow hedges before taxes24(41,144)52,017 
Reclassification adjustment on cash flow hedges before tax24(26,568)31,293 
Amounts removed from equity and included in the carrying amount of non-financial assets (liabilities) that were acquired or incurred through a highly probable hedged forecast transaction, before tax24(11,112)(8,143)
Other comprehensive income (losses), before taxes, cash flow hedges(78,824)75,167 
Change in value of time value of options
Gains/(Losses) on change in value of time value of options before tax2425,751 (24,005)
Reclassification adjustments on change in value of time value of options before tax2428,818 19,946 
Other comprehensive income, before taxes, changes in the time value of the options54,569 (4,059)
Total other comprehensive income that will be reclassified to income before taxes(36,678)38,545 
Other components of other comprehensive income (loss), before taxes(57,876)28,610 
Income tax relating to other comprehensive income that will not be reclassified to income
Income tax relating to new measurements on defined benefit plans17751 567 
Income tax relating to other comprehensive income that will not be reclassified to income751 567 
Income tax relating to other comprehensive income (loss) that will be reclassified to income
Income tax related to cash flow hedges in other comprehensive income (loss)173,604 (235)
Income taxes related to components of other comprehensive loss will be reclassified to income3,604 (235)
Total Other comprehensive income (loss)(53,521)28,942 
Total comprehensive income (loss)528,029 1,366,079 
Comprehensive income (loss) attributable to owners of the parent515,687 1,367,315 
Comprehensive income (loss) attributable to non-controlling interests12,342 (1,236)
TOTAL COMPREHENSIVE INCOME (LOSS)528,029 1,366,079 

The accompanying Notes 1 to 36 form an integral part of these consolidated financial statements.


LATAM AIRLINES GROUP S.A. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

Attributable to owners of the parent
Change in other reserves
NoteShare
capital		Other
equity		Treasury
shares		Currency
translation
reserve		Cash flow
hedging
reserve		Gains
(Losses)
from changes
in the time
value of the
options		Actuarial
gains
or losses on
defined
benefit
plans
reserve		Shares
based
payments
reserve		Other
sundry
reserve		Total
other
reserve		Retained
earnings/(losses)		Parent’s
ownership
interest		Non-
controlling
interest		Total
equity
ThUS$ThUS$ThUS$ThUS$ThUS$ThUS$ThUS$ThUS$ThUS$ThUS$ThUS$ThUS$ThUS$ThUS$
Equity as of January 1, 2023 13,298,486 39 (178)(3,805,560)36,542 (21,622)(28,117)37,235 (1,972,651)(5,754,173)(7,501,896)42,278 (11,557)30,721 
Total increase (decrease) in equity
Net income/(loss) for the period24— — — — — — — — — — 581,831 581,831 (281)581,550 
Other comprehensive income — — — (25,051)(75,220)54,569 (20,442)— — (66,144)— (66,144)12,623 (53,521)
Total comprehensive income — — — (25,051)(75,220)54,569 (20,442)— — (66,144)581,831 515,687 12,342 528,029 
Transactions with shareholders
Dividends25— — — — — — — — — — (174,549)(174,549)— (174,549)
Increase for other contributions from the owners24— 17,401 — — — — — — (14,401)(14,401)— 3,000 — 3,000 
Increase (decrease) through transfers and other changes, equity24-34(8,294,952)(17,401)178 — — — — — 817,036 817,036 7,559,025 63,886 (12,812)51,074 
Total transactions with shareholders (8,294,952)— 178 — — — — — 802,635 802,635 7,384,476 (107,663)(12,812)(120,475)
Closing balance as of December 31, 2023 5,003,534 39 — (3,830,611)(38,678)32,947 (48,559)37,235 (1,170,016)(5,017,682)464,411 450,302 (12,027)438,275 

The accompanying Notes 1 to 36 form an integral part of these consolidated financial statements.






LATAM AIRLINES GROUP S.A. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

Attributable to owners of the parent
Change in other reserves
NoteShare
capital		Other equityTreasury
shares		Currency
translation
reserve		Cash flow
hedging
reserve		Gains (Losses)
from changes
in the time
value of the
 options		Actuarial gains
or losses on
defined benefit
plans
reserve		Shares based
payments
reserve		Other
sundry
reserve		Total
other
reserve		Retained
earnings/(losses)		Parent’s
ownership
interest		Non-
controlling
interest		Total
equity
ThUS$ThUS$ThUS$ThUS$ThUS$ThUS$ThUS$ThUS$ThUS$ThUS$ThUS$ThUS$ThUS$ThUS$
Equity as of January 1, 20223,146,265 — (178)(3,772,159)(38,390)(17,563)(18,750)37,235 2,448,098 (1,361,529)(8,841,106)(7,056,548)(10,356)(7,066,904)
Total increase (decrease) in equity
Net income/(loss) for the period24— — — — — — — — — — 1,339,210 1,339,210 (2,073)1,337,137 
Other comprehensive income— — — (33,401)74,932 (4,059)(9,367)— — 28,105 — 28,105 837 28,942 
Total comprehensive income— — — (33,401)74,932 (4,059)(9,367)— — 28,105 1,339,210 1,367,315 (1,236)1,366,079 
Transactions with shareholders
Equity issue24 -33800,000 — — — — — — — — — — 800,000 — 800,000 
Increase for other contributions from the owners24— 9,250,229 — — — — — — (4,340,749)(4,340,749)— 4,909,480 — 4,909,480 
Increase (decrease) through transfers and other changes, equity24 -339,352,221 (9,250,190)— — — — — — (80,000)(80,000)— 22,031 35 22,066 
Total transactions with shareholders10,152,221 39 — — — — — — (4,420,749)(4,420,749)— 5,731,511 35 5,731,546 
Closing balance as of December 31, 202213,298,486 39 (178)(3,805,560)36,542 (21,622)(28,117)37,235 (1,972,651)(5,754,173)(7,501,896)42,278 (11,557)30,721 


The accompanying Notes 1 to 36 form an integral part of these consolidated financial statements.


LATAM AIRLINES GROUP S.A. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS - DIRECT METHOD
For the year ended
December 31,
Note20232022
ThUS$ThUS$
Cash flows from operating activities
Cash collection from operating activities
Proceeds from sales of goods and services13,397,385 10,549,542 
Other cash receipts from operating activities169,692 117,118 
Payments for operating activities
Payments to suppliers for the supply goods and services34(9,689,508)(9,113,130)
Payments to and on behalf of employees(1,304,696)(1,039,336)
Other payments for operating activities(270,580)(272,823)
Income taxes (paid)(18,379)(14,314)
Other cash inflows (outflows)34(20,346)(130,260)
Net cash (outflow) inflow from operating activities2,263,568 96,797 
Other cash receipts from sales of equity or debt instruments of other entities— 417 
Other payments to acquire equity or debt instruments of other entities— (331)
Amounts raised from sale of property, plant and equipment46,524 56,377 
Purchases of property, plant and equipment(795,787)(780,538)
Purchases of intangible assets(68,052)(50,116)
Interest received98,552 18,934 
Other cash inflows (outflows)3459,258 6,300 
Net cash (outflow) inflow from investing activities(659,505)(748,957)
Cash flows inflow (out flow) from investing activities
Proceeds from the issuance of shares34— 549,038 
Amounts from the issuance of other equity instruments34— 3,202,790 
Payments for changes in ownership interests in subsidiaries that do not result in loss of control24(23)— 
Amounts raised from long-term loans34— 2,361,875 
Amounts raised from short-term loans34— 4,856,025 
Loans from related entities32— 770,522 
Loans repayments34(342,005)(8,759,413)
Payments of lease liabilities34(225,358)(131,917)
Payments of loans to related entities34— (1,008,483)
Interest paid(594,234)(521,716)
Other cash (outflows) inflows3411,405 (463,766)
Net cash inflow (outflow) from financing activities(1,150,215)854,955 
Net (decrease) increase in cash and cash equivalents before effect of exchanges rate change453,848 202,795 
Effects of variation in the exchange rate on cash and cash equivalents44,238 (32,955)
Net (decrease) increase in cash and cash equivalents498,086 169,840 
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR61,216,675 1,046,835 
CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR61,714,761 1,216,675 

The accompanying Notes 1 to 36 form an integral part of these consolidated financial statements.

        1    



LATAM AIRLINES GROUP S.A. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2023

NOTE 1 - GENERAL INFORMATION

LATAM Airlines Group S.A. (“LATAM” or the "Company") is an open stock company which holds the values inscribed in the Registro de Valores of the Commission for the Financial Market, whose shares are listed in Chile on the Electronic Stock Exchange of Chile - Stock Exchange and the Santiago Stock Exchange. LATAM’s ADRs are currently trading in the United States of America on the OTC (Over-The-Counter) markets.
Its main business is the air transport of passengers and cargo, both in the domestic markets of Chile, Peru, 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 Chile, Ecuador, Peru, Brazil, Colombia and Paraguay. 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 Presidente Riesco No. 5711, Las Condes commune.
As of December 31, 2023, the Company's statutory capital is represented by 604,441,789,335 ordinary shares without nominal value. As of that date, 604,437,877,587 shares were subscribed and paid. The foregoing, considering the capital increase approved by the shareholders of the company at an extraordinary meeting held on July 5, 2022, in the context of the implementation of its reorganization plan approved and confirmed in the Chapter 11 Proceedings, as well as the Capital decrease required for the Chilean Capital Markets law that appears in a public deed dated September 6, 2023, granted at the Notaría of Santiago of Mr. Eduardo Javier Diez Morello.

The major shareholders of the Company, considering the total amount of subscribed and paid shares, are Banco de Chile on behalf of State Street which owns 45.81%, Banco de Chile on behalf of Non-Resident Third Parties with 11.94%, Delta Air Lines with 10.05% and Qatar Airways with 10.03% ownership.


As of December 31, 2023, the Company had a total of 2,100 shareholders in its registry. At that date, approximately 0.01% of the Company's capital stock was in the form of ADRs.

During 2023, the Company had an average of 34,174 employees, ending this year with a total of 35,568 collaborator, distributed in 5,149 Administration employees, 17,655 in Operations, 8,688 Cabin Crew and 4,076 Command crew.



        2    

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

a)Percentage ownership

Tax No.CompanyCountry
of origin		Functional
Currency		As December 31, 2023As December 31, 2022
DirectIndirectTotalDirectIndirectTotal
%%%%%%
96.969.680-0Lan Pax Group S.A. and SubsidiariesChileUS$99.9959 0.0041 100.0000 99.9959 0.0041 100.0000 
ForeignLatam Airlines Perú S.A.PeruUS$23.6200 76.1900 99.8100 23.6200 76.1900 99.8100 
93.383.000-4Lan Cargo S.A.ChileUS$99.8940 0.0041 99.8981 99.8940 0.0041 99.8981 
76.717.244-3Prime Cargo SpA.ChileCLP0.0000 100.0000 100.0000 0.0000 0.0000 0.0000 
ForeignConnecta CorporationU.S.A.US$0.0000 100.0000 100.0000 0.0000 100.0000 100.0000 
ForeignPrime Airport Services Inc. and SubsidiaryU.S.A.US$0.0000 100.0000 100.0000 0.0000 100.0000 100.0000 
96.951.280-7Transporte Aéreo S.A.ChileUS$0.0000 100.0000 100.0000 0.0000 100.0000 100.0000 
96.631.520-2Fast Air Almacenes de Carga S.A.ChileCLP0.0000 100.0000 100.0000 0.0000 100.0000 100.0000 
ForeignLaser Cargo S.R.L.ArgentinaARS0.0000 100.0000 100.0000 0.0000 100.0000 100.0000 
ForeignLan Cargo Overseas Limited and SubsidiariesBahamasUS$0.0000 0.0000 0.0000 0.0000 100.0000 100.0000 
96.969.690-8Lan Cargo Inversiones S.A. and SubsidiaryChileUS$0.0000 100.0000 100.0000 0.0000 100.0000 100.0000 
96.575.810-0Inversiones Lan S.A.ChileUS$99.9000 0.1000 100.0000 99.9000 0.1000 100.0000 
96.847.880-KTechnical Training LATAM S.A.ChileCLP99.8300 0.1700 100.0000 99.8300 0.1700 100.0000 
ForeignLatam Finance LimitedCayman IslandUS$100.0000 0.0000 100.0000 100.0000 0.0000 100.0000 
ForeignPeuco Finance LimitedCayman IslandUS$100.0000 0.0000 100.0000 100.0000 0.0000 100.0000 
ForeignProfessional Airline Services INC.U.S.A.US$100.0000 0.0000 100.0000 100.0000 0.0000 100.0000 
ForeignJarletul S.A.UruguayUS$0.0000 100.0000 100.0000 0.0000 100.0000 100.0000 
ForeignLatam Travel S.R.L.BoliviaUS$99.0000 1.0000 100.0000 99.0000 1.0000 100.0000 
76.262.894-5Latam Travel Chile II S.A.ChileUS$99.9900 0.0100 100.0000 99.9900 0.0100 100.0000 
ForeignLatam Travel S.A.ArgentinaARS94.0100 5.9900 100.0000 94.0100 5.9900 100.0000 
ForeignTAM S.A. and Subsidiaries (*)BrazilBRL63.0987 36.9013 100.0000 63.0901 36.9099 100.0000 

(*)     As of December 31, 2023, the indirect participation percentage of TAM S.A. and its Subsidiaries is from Holdco I S.A., a company which LATAM Airlines Group S.A. has a 100% share on economic rights and 51.04% of political rights. Its percentage arose as a result of the provisional measure No. 863 of the Brazilian government implemented in December of 2018 that allows foreign capital to have up to 100% of the share ownership of a Brazilian Airline.

        3    

b)Financial Information

Statement of financial position Net Income
For the year ended
At December 31,
As of December 31, 2023As of December 31, 202220232022
Tax No.Company Assets LiabilitiesEquity Assets LiabilitiesEquity Gain /(loss)
ThUS$ ThUS$ThUS$ ThUS$ ThUS$ThUS$ ThUS$ ThUS$
96.969.680-0Lan Pax Group S.A. and Subsidiaries (*)487,236 1,835,537 (1,000,622)392,232 1,727,968 (1,342,687)7,514 (121,673)
ForeignLatam Airlines Perú S.A.334,481 285,645 48,836 335,773 281,178 54,595 (4,666)(12,726)
93.383.000-4Lan Cargo S.A.391,430 189,019 202,411 394,378 212,094 182,284 22,677 (1,230)
76.717.244-3Prime Cargo SpA.912 — 912 — — — — — 
ForeignConnecta Corporation64,054 6,790 57,264 78,905 22,334 56,571 693 14,814 
ForeignPrime Airport Services Inc. and Subsidiary (*)19,435 17,241 2,194 25,118 24,305 813 1,380 1,838 
96.951.280-7Transporte Aéreo S.A.280,117 151,066 129,051 283,166 177,109 106,057 24,871 (36,190)
96.631.520-2Fast Air Almacenes de Carga S.A.14,255 10,455 3,800 16,150 12,623 3,527 462 1,154 
ForeignLaser Cargo S.R.L.— 1 (1)— 3 (3)— — 
ForeignLan Cargo Overseas Limited and Subsidiaries (*)— — — 35,991 15,334 20,656 — (1,287)
96.969.690-8Lan Cargo Inversiones S.A. and Subsidiary (*)166,503 80,502 (71,744)220,144 148,489 11,661 (5,345)(11,901)
96.575.810-0Inversiones Lan S.A. (*)1,238 50 1,188 1,281 56 1,225 (36)(14)
96.847.880-KTechnical Training LATAM S.A.1,246 893 353 1,417 1,110 307 165 77 
ForeignLatam Finance Limited114 208,621 (208,507)3,011 211,517 (208,506)(1)169,582 
ForeignProfessional Airline Services INC.15,571 10,943 4,628 56,895 53,786 3,109 1,681 258 
ForeignJarletul S.A.16 1,101 (1,085)16 1,109 (1,093)8 (2)
ForeignLatam Travel S.R.L.92 — 92 92 5 87 5 154 
76.262.894-5Latam Travel Chile II S.A.356 1,239 (883)368 1,234 (866)(16)2 
ForeignLatam Travel S.A.4,547 1,554 2,993 7,303 2,715 4,588 940 (6,187)
ForeignTAM S.A. and Subsidiaries (*)4,240,748 3,027,373 1,212,329 3,497,848 4,231,547 (733,699)740,783 (69,932)


(*)    The Equity reported corresponds to Equity attributable to owners of the parent, it does not include Non-controlling participation.

In addition, the following special purpose entities have been consolidated: (1) Chercán Leasing Limited, intended to finance advance payments of aircraft; (2) Guanay Finance Limited, intended for the issue of a securitized bond with future credit card payments (Liquidated in May 2023); and (3) Yamasa Sangyo Aircraft LA1 Kumiai, Yamasa Sangyo Aircraft LA2 Kumiai, earmarked for aircraft financing. These companies have been consolidated as required by IFRS 10.

All entities over which LATAM has control have been included in the consolidation. The Company has analyzed the control criteria in accordance with the requirements of IFRS 10.

Changes occurred in the consolidation perimeter between January 1, 2022 and December 31, 2023, are detailed below:

(1)Incorporation or acquisition of companies

-On December 22, 2022, LATAM Airlines Group S.A. purchased of 1,390,468,967 preferred shares of Latam Travel S.A.;consequently, the shareholding composition of Latam Travel S.A. is as follows: Lan Pax Group S.A. with 5.69%, Inversora Cordillera S.A. with 0.30% and LATAM Airlines Group S.A. with 94.01%. These transactions were between LATAM Airlines Group entities and therefore did not generate any effects within the consolidated financial statements.

-On March 29, 2023, a capital increase was made in TAM S.A. carried out a capital increase, through the contribution of LATAM Airlines Group S.A. of accounts receivable for ThUS$785,865; consequently, there were no significant changes in the shareholder composition and therefore did not generate any effect within the Consolidated Financial Statements.



        4    

-On March 29, 2023, a capital increase was made in TAM Linheas Aéreas S.A carried out a capital increase, through the contribution of TAM S.A. of accounts receivable for ThUS$785,865; consequently, there were no significant changes in the shareholder composition and therefore did not generate any effect within the Consolidated Financial Statements.

-On March 29, 2023, a capital increase was made in Aerovías de Integración Regional S.A. Aires S.A. through the contribution of made a capital increase where Holdco Colombia I SpA made a contribution through accounts receivable for ThUS$120,410, consequently, there were no significant changes in the shareholder composition and therefore did not generate any effect within the Consolidated Financial Statements.

-On April 14, 2023, a capital reduction was carried out in Lan Argentina S.A. through the absorption of losses in the sum of ThUS$160,170. Consequently, there were no significant changes in the shareholding composition and therefore it did not generate any effect within the Consolidated Financial Statements.

-On June 7, 2023, a capital increase was made in TAM S.A. carried out a capital increase, through the contribution of LATAM Airlines Group S.A. of accounts receivable for ThUS$308,031, consequently, there were no significant changes in the shareholder composition and therefore did not generate any effect within the Consolidated Financial Statements.

-On June 7, 2023, a capital increase was made in TAM Linheas Aéreas S.A carried out a capital increase, through the contribution of TAM S.A. of accounts receivable for ThUS$308,031, consequently, there were no significant changes in the shareholder composition and therefore did not generate any effect within the Consolidated Financial Statements.

-On June 13 and 14, 2023, Inversiones Lan S.A. made a purchase of 923 shares from third parties, for an a total amount of ThUS$ 23, of the subsidiary Aerovías de Integración Regional S.A. Aires S.A., consequently, these transactions generated a decrease in the non-controlling interest, without generating significant effects on the Consolidated Financial Statements.

-On July 21, 2023, a capital increase was carried out in Latam Airlines Ecuador S.A through the contribution of accounts receivable held by Holdco Ecuador S.A for ThUS$3,100, consequently, there were no significant changes in the shareholding composition and Therefore, it did not generate any effect within the Consolidated Financial Statements.

-On July 28, 2023, Lan Cargo S.A purchased 1 share of Lan Cargo Overseas Limited from Inversiones Lan S.A. Consequently, there were no significant changes in the shareholding composition and therefore did not generate any effect within the Consolidated Financial Statements.

-On August 1, 2023, Inversiones Lan S.A. purchased 1 share of Americonsult SA de CV from Lan Cargo Overseas Limited. Consequently, there were no significant changes in the shareholding composition and therefore did not generate any effect within the Consolidated Financial Statements.

-On August 4, 2023, the merger of Holdco Colombia II SpA into Lan Pax Group S.A takes place, acquiring the latter all of its assets, liabilities, rights and obligations. As a result of the above, Holdco Colombia II SpA is dissolved. On the same date Lan Pax Group S.A carries out a capital increase of ThUS$347 in Holdco Colombia I SpA through the contribution of 47,010 shares of Aerovías de Integración Regional S.A. These transactions were carried out between entities under common control of LATAM Airlines Group S.A. Group. and, therefore, did not generate any effect within the Consolidated Financial Statements.






        5    

-On September 11, 2023, the company Mas Investment Limited was liquidated and its controller Lan Cargo Overseas Limited acquired all its assets, liabilities, rights and obligations, as a result of the liquidation, including the investments that Mas Investment Limited held in the following companies: (i) Consultoría Administrativa Profesional S.A. de C.V., equivalent to 49,500 shares; (ii) Americonsult, S.A. de C.V., equivalent to 499 shares; (iii) Transporte Aéreo S.A. equivalent to 109,662 shares; and (iv) Inversiones Aereas S.A., equivalent to 15,216 shares. These transactions were carried out between entities under common control of LATAM Airlines Group S.A. and, therefore, did not generate any effect within the Consolidated Financial Statements.

-On September 11, 2023, the company Lan Cargo Overseas Limited was liquidated and its controller Lan Cargo S.A acquired all its all its assets, liabilities, rights and obligations, as a result of the liquidation, including the investments that Lan Cargo Overseas Limited held in the following companies: (i) Prime Airport Services Inc., equivalent to 105 shares; (ii) Americonsult de Costa Rica S.A, equivalent to 66 shares; (iii) Americonsult de Guatemala, Sociedad Anónima, equivalent to 50 shares; (iv) Consultoría Administrativa Profesional S.A. de C.V., equivalent to 49,500 shares; (v) Americonsult, S.A. de C.V., equivalent to 499 shares; (vi) Transporte Aéreo S.A. equivalent to 109,662 shares; and (vii) Inversiones Aereas S.A., equivalent to 15,216 shares. These transactions were carried out between entities under common control of LATAM Airlines Group S.A. and, therefore, did not generate any effect within the Consolidated Financial Statements.

-On September 15, 2023, a capital increase was made in TAM S.A. through the contribution of ThUS$106,104 on accounts receivable from LATAM Airlines Group S.A.; consequently, there were no significant changes in the shareholder composition and therefore did not generate any effect within the Consolidated Financial Statements.

-On September 15, 2023, a capital increase was made in TAM Linheas Aéreas S.A through the contribution of ThUS$106,104 on accounts receivable from TAM S.A., consequently, there were no significant changes in the shareholder composition and therefore did not generate any effect within the Consolidated Financial Statements.

-On October 23 and 30, 2023, Inversiones Lan S.A. purchased a total 183 shares from Non- controlling interest, for an a total amount of ThUS$2, of the subsidiary Aerovías de Integración Regional S.A. Aires S.A., consequently, these transactions generated a decrease in non-controlling interest, with no generating significant effects on the Consolidated Financial Statements.

-On December 6, 2023, the company Prime Cargo SpA was incorporated, which is 100% owned by Lan Cargo S.A., whose exclusive purpose is to carry out storage activities for all types of products and/or merchandise.

-On December 29, 2023, LATAM Airlines Group S.A. purchased of 2,392,166 preferred shares of Inversora Cordillera S.A. a Transportes Aéreos del Mercosur S.A.;consequently, the shareholding composition of Inversora Cordillera S.A. is as follows: Lan Pax Group S.A. with 99.95% and LATAM Airlines Group S.A. with 0.05%. These transactions were between subsidiaries of LATAM Airlines Group not generating any effects within the Consolidated Financial Statements.

-On December 29, 2023, LATAM Airlines Group S.A. purchased of 53,376 preferred shares of LAN Argentina S.A. a Transportes Aéreos del Mercosur S.A.;consequently, the shareholding composition of LAN Argentina S.A. is as follows: Lan Pax Group S.A. with 4.99%, Inversora Cordillera S.A. with 94.96% and LATAM Airlines Group S.A. with 0.05%. These transactions were between subsidiaries of LATAM Airlines Group not generating any effects within the Consolidated Financial Statements.






        6    



NOTE 2 - SUMMARY OF MATERIAL ACCOUNTING POLICIES

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

2.1.    Basis of Preparation

These consolidated financial statements of LATAM Airlines Group S.A. and Subsidiaries as of December 31, 2023 and 2022, have been prepared in accordance with the International Financial Reporting Standards as issued by the International Accounting Standards Board (IFRS Accounting Standards) and with the interpretations issued by the International Financial Reporting Standards Interpretations Committee (IFRIC IC).

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 Accounting Standards 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 describe 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.

These consolidated financial statements have been prepared in accordance with the accounting policies used by the Company in the preparation of the 2022 consolidated financial statements, except for the standards and interpretations adopted as of January 1, 2023.

(a)Application of new standards for the year 2023:
Accounting pronouncements with implementation effective from January 1, 2023:

Issuance DateEffective Date:
(i) Standards and amendments
IFRS 17: Insurance contracts, replaces IFRS 4.May 201701/01/2023
Initial Application of IFRS 17 and IFRS 9 — Comparative Information (Amendment to IFRS 17)December 2021An entity that elects to apply the amendment applies it when it first applies IFRS 17
Amendment to IAS 1: Presentation of financial statements, on materiality accounting policies.February 202101/01/2023
Amendment to IAS 8: Accounting policies, changes in accounting estimates and error, on separating between changes in accounting estimates and changes in accounting policies.February 202101/01/2023
Amendment to IAS 12: Income taxes, on international tax reform – rules of the two pillar model.May 202301/01/2023
Amendment to IAS 12: Income taxes, Deferred taxes related to assets and liabilities that arise from a single transaction.May 202101/01/2023

The application of these accounting standards as of January 1, 2023, had no significant effect on the Company's consolidated financial statements.


        7    

(b)     Accounting pronouncements not in force for the financial year beginning on January 1, 2023:


Issuance DateEffective Date:
(i) Standards and amendments
Amendment to IAS 1: Presentation of financial statements, on classification of liabilities.January 202001/01/2024
Amendment to IAS 1: Presentation of financial statements, on non-current liabilities with covenants.October 202201/01/2024
Amendment to IFRS 16: Leases, on sales with leaseback.September 202201/01/2024
Amendment to IFRS 10: Consolidated financial statements and IAS 28: Investments in associates and joint ventures.September 2014Not determined
Amendments to IAS 7 "Statement of cash flows" and IFRS 7 "Financial Instruments: Information to be Disclosed"May 202301/01/2024
Amendments to IAS 21: Lack of ExchangeabilityAugust 202301/01/2025

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


(c)     Chapter 11 Filing and Exit

Chapter 11 Filing and Procedure: Due to the effects on the operation of the restrictions established in the countries to control the effects of the COVID-19 pandemic, on May 25, 2020 the Board of LATAM Airlines Group S.A. (“LATAM Parent”) resolved unanimously that LATAM Parent and some its subsidiaries should initiate a reorganization process in the United States of America according to the rules established in the Bankruptcy Code by filing a voluntary petition for relief in accordance with the same, which petition was submitted on May 26, 2020 and was jointly administered under Case Number 20-11254. Subsequently, Piquero Leasing Limited (July 7, 2020) and TAM S.A. and its subsidiaries in Brazil (July 9, 2020) joined the process (the voluntary petitions, collectively, the “Bankruptcy Filing” and each LATAM entity that filed a petition, a “Debtor” and jointly, the “Debtors”).

The Bankruptcy Filing for each of the Debtors (each one, respectively, a “Petition Date”) was jointly administered under the caption “In re LATAM Airlines Group S.A. et al.” Case Number 20-11254. On June 18, 2022, the Bankruptcy Court issued a memorandum decision approving the Debtors’ joint plan of reorganization (the “Plan”) and rejecting all remaining objections and entered an order confirming the Plan (the “Confirmation Order”). On November 3, 2022 (the “Effective Date”), the Plan was substantially consummated and each of the Debtors emerged from the Chapter 11 proceedings as “Reorganized Debtors”. Pursuant to the Plan, the Company received an infusion of approximately US$8.19 billion through a mix of new equity, convertible notes and debt, which enabled the Company to exit Chapter 11 with appropriate capitalization to effectuate its business plan. Upon emergence, the Company had total debt of approximately US$6.8 billion, cash and cash equivalents of approximately US$1.1 billion and revolving undrawn facilities in the amount of US$1.1 billion. Specifically, the Plan provided that:

•The Company conducted a US$800 million common equity rights offering, open to all shareholders in accordance with their preemptive rights under applicable Chilean law, and fully backstopped by the parties participating in the Restructuring Support Agreement (RSA);

•Three distinct classes of convertible notes were issued by the Company, all of which were preemptively offered to shareholders. The preemptive rights offering period closed on October 12, 2022. For those securities not subscribed by the Company’s shareholders during the respective preemptive rights period:

        8    


•New Convertible Notes Class A, hereinafter Class G Convertible notes (by the denomination with which they were registered in the Registro de Valores of the CMF), were delivered to certain general unsecured creditors of the Company in settlement of their allowed claims under the Plan.

The Issuance conditions:
Nominal Value : Approximately ThUS$1,257,003
Conversion Ratio: 15.904615504595600. The Convertible Notes Class G Conversion Ratio shall step down by 50% after the sixty days (60) counted from the Effective Date.
Backup Shares: 19,992,142,087
Maturity: 31 Dec. 2121
Interest rate: 0%
Conversion Conditions: They may be converted into shares of the Company within twelve months from the Effective Date of the Plan. As soon as 50% of the holders of New Class G Convertible Notes have opted to convert, the remaining Class G Convertible Notes will be automatically converted.

•New Convertible Notes Class B, hereinafter Class H Convertible notes (by the denomination with which they were registered in the Registro de Valores of the CMF), were subscribed and purchased by the shareholder that are part of the RSA.

The Issuance conditions:
Nominal Value: Approximately ThUS$1,372,840
Conversion Ratio: 92.2623446840237. The conversion ratio of Class H Convertible Notes will
be reduced by 50% after the sixty days (60) counted from the fifth (5th) anniversary from the Effective Date .
Backup Shares: 126,661,409,136
Maturity: 31 Dec. 2121
Interest rate: 1% interest rate payable in cash annually with no interest in the first 60 days.
Conversion Conditions:

a)First Convertible Notes Class H Conversion Period: Each holder of Convertible Notes Class H will have the ability to convert its Convertible Notes Class H into shares of the Company within sixty (60) days from the Effective Date.

b)Second Convertible Notes Class H Conversion Period: Additionally, each holder of Convertible Notes Class H will have the ability to convert their Convertible Notes Class H into shares of the Company beginning on the fifth (5th) anniversary of the Effective Date and until the sixth (6th) anniversary of the Effective Date.

•New Convertible Notes Class C, hereinafter Class I Convertible notes (by the denomination with which they were registered in the Registro de Valores of the CMF), were provided to certain general unsecured creditors in exchange for a combination of a contribution of new money to the Company and the settlement of their allowed claims under the Plan, subject to certain limitations and holdbacks by the backstopping parties.

The Issuance conditions:
Nominal Value: Approximately ThUS$6,863,427
Conversion Ratio: 56.143649821654. The Convertible Notes Class I Conversion Ratio shall
step down by 50% after the sixty days (60) counted from the Effective Date.
Backup Shares: 385,337,858,290
Maturity: 31 Dec. 2121
Interest rate: 0%
Conversion Conditions: They may be converted into shares within 12 months from the
Effective Date of the Plan. As soon as 50% of the holders of Class I Convertible Notes have opted to convert, then the remaining Class I Convertible Notes will be automatically converted.

        9    


•The election period for the Convertible Notes Class G and Convertible Notes Class I by creditors ended on October 6, 2022.

•General unsecured creditors that elected to receive Convertible Notes Class G or Convertible Notes Class I were entitled to receive a one-time cash distribution in an aggregate amount of approximately US$175 million.

•The Convertible Notes Classes H and I were issued, totally or partially, in consideration of a new money contribution for the aggregate amount of approximately US$4.64 billion fully backstopped by the parties to the RSA.

•In lieu of receiving Convertible Notes Class G or Convertible Notes Class I (and the aforementioned one-time cash distribution), general unsecured creditors were provided with the alternative of opting to receive New Local Notes issued by LATAM. As set forth in the Plan and based on the elections made by general unsecured creditors, such notes were issued in the amount of UF 3,818,042 (equal to approximately US$130 million as of the date of their issuance).

Pursuant to the Plan and Backstop Agreements, LATAM raised up to US$500 million through a new revolving credit facility and approximately US$2.25 billion in total new money debt financing through exit financing (new term loan and new notes).

On September 2, 2022, the Convertible Notes Classes G, H and I together with the shares contemplated in the Plan were registered with the Chilean Registro de Valores of the Financial Market Commission (the “CMF”). The CMF approved the New Local Notes on September 5, 2022. The Debtors established September 12, 2022 as the record date with respect to creditors entitled to participate in the Convertible Notes Class G and Convertible Notes Class I, and commenced the offering of the Convertible Notes to claimholders on the same day.

As of December 31, 2023, 100.000% of the Convertible Notes Class G was placed, 99.997% of the Convertible Notes Class H was placed and 100.000% of the Convertible Notes Class I was placed had been converted into equity, respectively (See Note 24)

As of the Effective Date, the Plan was substantially consummated. Pursuant to the Plan, the Reorganized Debtors were permitted to operate their businesses and manage their properties without supervision of the Bankruptcy Court and free of the restrictions of the Bankruptcy Code.

As customary in this type of restructurings, the docket of the Chapter 11 proceedings remained open after the Effective Date to finalize the reconciliation process of certain claims that were still outstanding as of the Effective Date, as well as to resolve certain administrative matters.

On June 29, 2023, the Bankruptcy Court entered a final decree in the Chapter 11 proceedings ordering that Case Number 20-11254 and its docket be closed (the “Final Decree”). The foregoing, as a result of the resolution of substantially all remaining matters in the Chapter 11 proceedings and all appeals of the Confirmation Order.

As part of their overall reorganization process, while the Chapter 11 proceedings were outstanding the Debtors sought and received relief in certain non-U.S. jurisdictions (i.e., Cayman Islands, Chile and Colombia).

        10    

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 cash 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 to be disclosed when carrying out a business combination, such as the acquisition of an entity by the Company, the acquisition method provided for in IFRS 3: Business combinations is used.

(b)    Transactions with non-controlling interests

The Group applies the policy of considering transactions with non-controlling interests, when not related to the 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 the assets and liabilities of the subsidiary, the non-controlling interest 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 by function within Other gains (losses).

If LATAM Airlines Group S.A. and Subsidiaries retain an ownership of participation in the disposed subsidiary which does not represent control, this is recognized at fair value on the date that control is lost and the amounts previously recognized in Other comprehensive income are accounted as if the Company had disposed directly the assets and related liabilities, which can cause these amounts to be 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 its 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

        11    

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 Accounting Standards, hyperinflationary. The consolidated 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 income 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 ítems 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 consolidated retained earnings.

Re-expression due to hyperinflation will be recorded until the period or exercise 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, within "Gain (losses) from exchange rate difference, before tax".

For those subsidiaries of the group whose functional currency is different from the presentation currency and 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.



        12    

2.4.    Property, plant and equipment

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

The amounts of advances paid to the aircraft manufacturers are capitalized 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, 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 income when they are incurred.

The depreciation of the Property, plant 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. This charge is recognized in the captions "Cost of sale" and "Administrative expenses".

The residual value and the useful life of assets are reviewed and adjusted, if necessary, once a year. Useful lives are detailed in Note 16 (d).

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

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 Loyalty program correspond to intangible assets with indefinite useful lives and are annually tested for impairment as an integral part of the CGU Air Transport.

Airport Slots correspond to an administrative authorization to carry out operations of arrival and departure of aircraft, at a specific airport, within a certain period of time.

The Loyalty program corresponds to the system of accumulation and exchange of points that is part of TAM Linhas Aereas S.A.

The airport slots and Loyalty program were recognized at fair value under IFRS 3, as a consequence of the business combination with TAM S.A. 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 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 other costs directly related to the production of unique and identifiable computer software controlled by the Company, are shown as intangible Assets other than Goodwill when they have met all the criteria for capitalization.

2.6.    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. Other interest costs are recognized in the consolidated statement of income by function when accrued.


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2.7.    Losses for impairment of non-financial assets

Intangible assets that have an indefinite useful life are not subject to amortization and are tested annually for impairment, or more frequently if events or changes in circumstances indicate that they might be impaired. Assets subject to amortization are tested for impairment losses whenever any event or change in circumstances indicates that the carrying amount may not be recoverable. An impairment loss is recognized for the excess of the carrying amount of the asset over its recoverable amount. The recoverable amount is the fair value of an asset less the costs of sale or the value in use, whichever is greater. For the purpose of evaluating impairment losses, assets are grouped at the lowest level for which there are largely independent cash inflows (cash generating unit. Non-financial assets, other than goodwill, that would have suffered an impairment loss are reviewed if there are indicators of reversal of losses. Impairment losses are recognized in the consolidated statement of income by function under "Other gains (losses)".

2.8.    Financial assets    

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 consolidated statement of income by function.

(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 fair value through other comprehensive income 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 consolidated statement of income by function within other gains / (losses) in the period or exercise 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 consolidated statement of income by function 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.

2.9. Derivative financial instruments and embedded derivatives
Derivative financial instruments and hedging activities
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 designated as a hedging instrument and, if so, the nature of the item being hedged.


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The Company designates certain derivatives as:
(a) Hedge of an identified risk associated with a recognized liability or an expected highly- probable transaction (cash-flow hedge), or
(b)      Derivatives that do not qualify for hedge accounting.
At the beginning of the transaction, the Company documents the economic relationship between the hedged items existing between the hedging instruments and the hedged items, as well as its objectives for risk management and the strategy to carry out various hedging operations. 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) 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 by function under other gains (losses). Amounts accumulated in equity are reclassified to profit or loss in the periods or exercise when the hedged item affects profit or loss. When these amounts correspond to hedging derivatives of highly probable items that give rise to non-financial assets or liabilities, in which case, they are recorded as part of the non-financial assets or liabilities.
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.
Gains or losses related to the effective part of the change in the intrinsic value of the options are recognized in the cash flow hedge reserve within equity. Changes in the time value of the options related to the part are recognized within Other Consolidated Comprehensive Income in the costs of the hedge reserve within equity.
When a hedging instrument matures, is sold, or fails to meet the requirements to be accounted for as a hedge, 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 by function as “Other gains (losses)”.
(b) 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)”.
Embedded derivatives
The Company assesses the existence of embedded derivatives in financial instrument contracts. Derivatives embedded in non-derivative host contracts are treated as separate derivatives when they meet the definition of a derivative, their risks and characteristics are not closely related to those of the host contracts and the contracts are not measured at FVTPL as a whole. LATAM Airlines Group S.A. has determined that no embedded derivatives currently exist.



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2.10.    Inventories

Inventories, 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.

2.11.    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.

In the event that the Company transfers its rights to any financial asset (generally accounts receivable) to a third party in exchange for a cash payment, the Company evaluates whether all risks and rewards have been transferred, in which case the account receivable is derecognized.

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.

2.12.    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 and a low risk of loss of value.

2.13.    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.

2.14.    Trade and other accounts payables

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

2.15.    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.

Convertible Notes

The component parts of the convertible notes issued by LATAM Airlines Group S.A. are classified separately as financial liabilities and equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.

At the date of issue, the fair value of the liability component is estimated using the prevailing market interest rate for similar non-convertible instruments. This amount is recorded as a liability on an amortized cost basis using the effective interest method until extinguished upon conversion or at the instrument’s maturity date. The conversion option classified as equity is determined by the deducting the amount of the liability component

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from the fair value of the compound instrument as a whole. This is recognized and included in other equity, net of income tax effects. and is not subsequently remeasured. In addition, the conversion option classified as equity will remain in other equity until the conversion option is exercised, in which case, the balance recognized in other equity will be transferred to share capital. Where the conversion option remains unexercised at maturity date of the convertible bond, the balance recognized in other equity will be transferred to retained earnings. No gain or loss is recognized in profit or loss upon conversion or expiration of the conversion option.

Transaction costs that relate to the issue of the convertible notes are allocated to the liability and equity components in proportion to the allocation of the gross proceeds. Transaction costs relating to the equity component are charged directly to equity.

2.16.    Current and deferred taxes

The tax expense for the period or exercise comprises income and deferred taxes.

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

Deferred taxes are recognized on the temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. However, deferred income tax is accounted for if it arises from the initial recognition of an asset or a liability in a transaction other than a business combination that at the time of the transaction does not affect the accounting or the taxable profit or loss. Deferred tax is determined using the tax rates (and laws) that have been enacted or substantially enacted at the date of the consolidated statements of financial position and are expected to apply when the related deferred tax asset is realized or the deferred tax liability discharged.

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

The tax (current and deferred) is recognized in the statement of income by function, unless it relates to an item recognized in other comprehensive income, directly in equity. In this case the tax is also recognized in other comprehensive income or, directly in the statement of income by function, respectively.

Deferred tax assets and liabilities are offset if, and only if:

(a) there is a legally enforceable right to set off current tax assets and liabilities, and
(b) the deferred tax assets and liabilities relate to income taxes levied by the same taxation authority on either: (i) the same taxable entity, or (ii) different taxable entities which intend to settle current tax liabilities and assets on a net basis, or to realize the assets and settle the liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.

LATAM Airlines Group S.A has evaluated the potential impact from the implementation of the “GloBE or Pillar Two rules”, which seeks to ensure that multinational groups pay a minimum effective tax rate of 15%. As of December 31, 2023, this regulation has not been adopted in Chile (where LATAM has its headquarters) or in other jurisdictions where LATAM Airlines Group S.A has operating companies. Therefore, it has not been necessary to estimate a potential impact of its application from its entry into force (January 1, 2023). At the close of this Financial Statements, the group does not present expenses or income for current taxes related to the Pillar Two income tax.

LATAM Airlines Group S.A. and its Subsidiaries have adopted the exception of paragraph 4A of IAS 12, incorporated in the amendment published on May 23, 2023.


2.17.    Employee benefits
    
(a)    Personnel vacations

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


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(b)    Share-based compensation

The compensation plans implemented based on the value of the shares of the Company are recognized in the consolidated financial statements in accordance with IFRS 2: Share-based payments, for cash settled awards the fair value, updated as of the closing date of each reporting period or exercise, 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 considering 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.    

(e)     Termination benefits

The group recognizes termination benefits at the earlier of the following dates: (a) when the group terminates the employee relationship; and (b) when the entity recognizes costs for a restructuring that is within the scope of IAS 37 and involves the payment of terminations benefits.

2.18.    Provisions

Provisions are recognized when:

(i) The Company has a present legal or constructive obligation as a result of a past event;

(ii) It is probable that payment is going to be required to settle an obligation; and

(iii) A reliable estimate of the obligation amount can be made.    

2.19.    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 provided 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 on a monthly basis the probability of expiration of air tickets, with refund clauses, based on their history of use. Air tickets without a refund clause expire on the date of the flight in case the passenger does not show up.

(c)     Costs associated with the contract

The costs related to the sale of air tickets are capitalized and deferred until the moment of providing the corresponding service. These assets are included under the heading "Other current non-financial assets" in the Consolidated Classified Statement of Financial Position.



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(d)     Frequent passenger program

The Company maintains the following loyalty programs: LATAMPASS’s and LATAMPASS’s Brazil, whose objective is building customer loyalty through the delivery of miles or points.

These programs give their frequent passengers the possibility of earning LATAMPASS’s miles or points, which grant the right to a selection of both air and non-air awards. Additionally, the Company sells the LATAMPASS miles or points to financial and non-financial partners through commercial alliances to award miles or points to their customers.

To reflect the miles and points earned, the loyalty program mainly includes two types of transactions that are considered revenue arrangements with multiple performance obligations: (1) Passenger Ticket Sales Earning miles or points (2) miles or points sold to financial and non-financial partner.

(1)    Passenger Ticket Sales Earning Miles or Points.

In this case, the miles or points are awarded to customers at the time that the company performs the flight.

To value the miles or points earned with travel, we consider the quantitative value a passenger receives by redeeming miles for a ticket rather than paying cash, which is referred to as Equivalent Ticket Value ("ETV"). Our estimate of ETV is adjusted for miles and points that are not likely to be redeemed ("breakage").

The balance of miles and points that are pending to redeem are included within deferred revenue.

(2)    Miles sold to financial and non-financial partners

To value the miles or points earned through financial and non-financial partners, the performance obligations with the client are estimated separately. To calculate these performance obligations, different components that add value in the commercial contract must be considered, such as marketing, advertising and other benefits, and finally the value of the points awarded to customers based on our ETV. The value of each of these components is finally allocated in proportion to their relative prices. The performance obligations associated with the valuation of the points or miles earned become part of the Deferred Revenue, and the remaining performance obligations are recorded as revenue when the miles or points are delivered to the client.

When the miles and points are exchanged for products and services other than the services provided by the Company, the income is recognized immediately; when the exchange is made for air tickets of any airline of LATAM Airlines Group S.A. and Subsidiaries, the income is deferred until the air transport service is provided.

The miles and points that the Company estimates will not be exchanged are recognized in the results based on the consumption pattern of the miles or points effectively exchanged by customers. The Company uses statistical models to estimate the probability of exchange, which is based on historical patterns and projections.

2.20.    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.

Right of use assets 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 right of use assets are recognized in the statement of financial position in Property, plant and equipment.

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

-Fixed payments including in substance fixed payment.
-Variable lease payments that depend on an index or a rate;
-The exercise price of a purchase option, if it is reasonably certain that the option will be exercised.

The discount rate that LATAM Airlines Group S.A. uses is the interest rate implicit in the lease, if that rate can be readily determined. This is the rate of interest that causes the present value of (a) lease payments and (b) the unguaranteed residual value to equal the sum of (i) the fair value of the underlying asset and (ii) any initial direct costs of the lessor.

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LATAM Airlines Group S.A. uses its incremental borrowing rate if the interest rate implicit in the lease cannot be readily determined.

Lease liabilities are recognized in the statement of financial position under “Other financial liabilities, current or non-current”.

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

Principal and interest are present in the consolidated cash flow as "Payments of lease liability" and "Interest paid", respectively, within financing cash flows.

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 within operating cash flows.

The Company analyzes the financing agreements of aircraft, 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 continues to be presented within the “Other financial liabilities” described in Note 18. On the other hand, the aircraft are presented in Property, Plant and Equipment, as described in Note 16, as “own aircraft”.

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

If the sale by the seller-lessee is classified as a sale in accordance with IFRS 15, the underlying asset is derecognized, and a right-of-use asset equal to the portion retained proportionally of the amount of the asset is recognized.

If the sale by the seller-lessee is not classified as a sale in accordance with IFRS 15, the transferred assets are kept in the financial statements and a financial liability equal to the sale price is recognized (received from the buyer-lessor).

2.21.    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.

2.22.    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.

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

2.23.    Environmental costs

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


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 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 has exposure to market factors such as: (i) fuel-price risk, (ii) exchange -rate risk (FX), and (iii) interest -rate risk.

The Company has developed manuals and procedures to manage the market risk, which goal is to identify, quantify, monitor and mitigate the adverse effects of changes in market factors mentioned above.

For the foregoing, Management monitors the evolution of fuel price levels, exchange rates and interest rates, quantifies their exposures and their risk, and develops and executes hedging strategies.

(i)    Fuel-price risk

Exposure:

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

Fuel Hedging Results:

During the period ended December 31, 2023, the Company recognized gains of US$15.7 million for fuel hedging net of premiums in the costs of sales for the year. During the period ended December 31, 2022, the Company recognized gains of US$18.8 million for fuel hedging net of premiums in the costs of sales for the year.

As of December 31, 2023, the market value of the fuel positions amounted to US$22.10 million (positive). At the end of December 2022, this market value was US$12.6 million (positive).

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

Positions as of December 31, 2023 (*) Maturities
Q124Q224Q324Q424Total
Percentage of coverage over the expected volume of consumption 35 %32 %30 %22 %30 %




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Positions as of December 31, 2022 (*)Maturities
Q123Q223Q323Q423Total
Percentage of coverage over the expected volume of consumption24 %24 %15 %5 %17 %

(*) The percentage 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. Therefore, the policy is to maintain a hedge-free percentage in order to be competitive in the event of a drop in price.

The current hedge positions 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 of financial instruments according to reasonable changes in the price of fuel and their effect on equity.

The calculations were made considering a parallel movement of US$ 5 per barrel in the underlying reference price curve at the end of December 2023 and the end of December 2022. The projection period was defined until the end of the last fuel hedging contract in force, being the last business day of the second half of 2024.

Benchmark price
(US$ per barrel)		Positions as of December 31, 2023
effect on Equity
(MUS$)		Positions as of December 31, 2022
effect on Equity
(MUS$)
+5+10.8+2.2
-5-10.7-2.3

Given the fuel hedging structure for the year of 2023, which considers a portion free of hedges, a vertical drop of 5 dollars in the JET reference price (considered as the monthly daily average), would have meant an impact of approximately US$ 131.6 million lower fuel cost. For the same period, a vertical rise of 5 dollars in the JET reference price (considered as the monthly daily average), would have meant an approximate impact of US$ 131.3 million in higher fuel costs.

(ii)    Foreign exchange rate risk:

Exposure:

The functional 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 (R$), 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 Sol and New Zealand dollar.

Mitigation:

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



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Exchange Rate Hedging Results (FX):

As of December 31, 2023, the Company recognized losses of US$10.1 million for FX hedging derivatives net of premiums reflected in the cost of sale. At the end of December of 2022, the Company recognize gains for US$5.2 million for FX hedging derivatives cost of sales.

As of December 31, 2023, the market value of hedging FX derivative positions is US$1.5 million (negative). As of December 31, 2022, the market value of the hedging FX derivative positions was US$ 0.2 million (positive). As of December 31, 2023, the Company has current hedging FX derivatives for US$414 million. . As of December 31, 2022, the Company holds current hedging FX derivatives of US$108 million.

As of December 31, 2023, the Company does not maintain for FX non-hedging derivatives. At the end of December of 2022, the Company recognized losses of US$1.8 million in non-hedging FX derivatives net of premiums reflected in Other gains/(losses).

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.

The following table shows the sensitivity of current hedging FX derivative instruments according to reasonable changes in the exchange rate and its effect on equity.

Appreciation (depreciation)
of R$/US$		Effect on equity as of
December 31, 2023
(MUS$)		Effect on equity as of
December 31, 2022
(MUS$)
-10%-10.0-2.9
+10%+19.0+3.0

Impact of Exchange rate variation in the Consolidated Income Statements (Foreign exchange gains/losses).

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

In order to reduce the impact on the Company's result caused by appreciations or depreciations of R$/US$, the Company carries out internal operations to reduce the net exposure in US$ for TAM S.A.

The following table shows the impact of the Exchange Rate variation on the Consolidated Income Statement when the R$/US$ exchange rate appreciates or depreciates by 10%:

Appreciation (depreciation)
of R$/US$		Effect on Income Statement
for the year ended December 31, 2023
(MUS$)		Effect on Income Statement
for the year ended December 31, 2022
(MUS$)
-10%+6.6+70.7
+10%-6.6-70.7
Impact of the exchange rate variation in the Equity, from translate the subsidiaries financial statements into US Dollars (Cumulative Translate Adjustment).

Since 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 (Cumulative Translation Adjustment) 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.



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The following table shows the impact on the Cumulative Translation Adjustment included in Other comprehensive income recognized in Total equity in the case of an appreciation or depreciation 10% the exchange rate R$/US$:

Appreciation (depreciation)
of R$/US$		Effect at December 31, 2023
MUS$		Effect at December 31, 2022
MUS$
-10%+327.01+98.11
+10%-267.56-80.28


(iii)    Interest -rate risk:

Exposure:

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

The Company is mainly exposed to the Secured Overnight Financing Rate (“SOFR”) and other less relevant interest rates such as Brazilian Interbank Certificates of Deposit (“CDI”) . Due to the fact that the publication of LIBOR ceased by June 30th 2023, the company has effectively migrated to SOFR as an alternative rate, which was fully materialized on September 30th 2023.

Of the company's financial debt subject to variable rates, all of the contracts maintain exposure to the SOFR reference rate.

Mitigation:

Currently, 50% (52% as of December 31, 2022) of the debt is fixed against fluctuations in interest rates. The variable debt is indexed to the reference rate based on SOFR.

Likewise, most of the company's liquidity is denominated in dollars and indexed to a return rate similar and with alike fluctuation to the SOFR rate, which helps reduce exposure.

Rate Hedging Results:

During the period ended December 31, 2023, the Company recognized losses of US$1.8 million (negative) corresponding to the recognition for premiums paid.

As of December 31, 2023, the Company has no interest rate derivatives outstanding , at the end of December 2022 this market value was US$8.8 million (positive).

As of December 31, 2023, the Company recognized a decrease in the right-of-use asset due to the expiration of derivatives for US$ 14.9 million associated with the aircraft lease. On this same date, a lower depreciation expense of the right-of-use asset for US$ 1.1 million (positive) is recognized. At the end of December 2022, the Company recognized US$ 0.1 million for this same concept.

As of December 31, 2023, the Company settled derivatives for US$ 14.8 million associated with hedges of leased aircraft.

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.


24
Increase (decrease)
of future curve
SOFR rate		Positions as of December 31, 2023 effect on Income (Loss) before taxes
(MUS$)		Positions as of December 31, 2022 effect on Income (Loss) before tax
(MUS$)
+100 basis points-20.27-22.64
-100 basis points+20.27+22.64

A large part of the derivatives of current rates are recorded as cash flow hedge contracts, therefore, a variation in interest rates has an impact on the market value of the derivatives, whose changes affect the equity of the entity.

The calculations were made by vertically increasing (decreasing) 100 base points of the interest rate curve, both scenarios being reasonably possible according to historical market conditions.

Increase (decrease)
interest rate curve		Positions as of December 31, 2023
effect on equity
(MUS$)		Positions as of December 31, 2022
effect on equity
(MUS$)
+100 basis points—+6.9
-100 basis points—-8.2

The sensitivity calculation hypothesis must assume that the forward curves of interest rates will not necessarily reflect the real value of the compensation of the flows. In addition, the interest rate structure is dynamic over time.

During the periods presented, the Company has recorded US$ 0.1 million (negative) for ineffectiveness in the consolidated income statement for this type of coverage.

(b)     Credit risk

Credit risk occurs when the counterparty does not comply with its obligations to the Company under a specific contract or financial instrument, resulting in a loss in the market value of a financial instrument (only financial assets, not liabilities). The customer portfolio as of December 31, 2023 has experienced an increased by 24% compared to the balance as of December 31, 2022, mainly due to an increase in passenger transportation operations (travel agencies and corporate) that increased by 22% in its sales, mainly affecting the payment methods credit card 29%, and cash sales 9%. In relation to the cargo business, it presented a decrease in its operations of 5% compared to December 2022. There was especial consideration for the Expected Credit Loss calculation for the clients with balance at the year end that management considered risky. The Expected Credit Loss at the end of December 2023 had a decrease 4% compared to the end of December 2022, as a result of the decrease in the portfolio due to collection, and due to the application of write-offs.

The Company is exposed to credit risk due to its operational activities and its financial activities, including deposits with banks and financial institutions, investments in other types of instruments, exchange rate transactions and derivatives contracts.
To reduce the credit risk related to operational activities, the company has implemented credit limits to limit the exposure of its debtors, which are permanently monitored for the LATAM network, when deemed necessary, agencies have been blocked for cargo and passenger businesses.

(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 and short-term mutual funds. 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) its credit rating, and (ii) investment limits according to the Company’s level of liquidity. According to these two

25
parameters, the Company chooses the most restrictive parameter of the previous two 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 (“IATA”), international 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, it is 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.

Under certain of the Company’s credit card processing agreements, the financial institutions have the right to require that the Company maintain a reserve equal to a portion of advance ticket sales that have been processed by that financial institution, but for which the Company has not yet provided the air transportation. Additionally, the financial institutions have the ability to require additional collateral reserves or withhold payments related to receivables to be collected if increased risk is perceived related to liquidity covenants in these agreements or negative balances occur.

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.

The sales invoicing of TAM Linhas Aéreas S.A. related with cargo agents for domestic transportation in Brazil is done directly by TAM Linhas Aereas 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 does not have sufficient funds to pay its obligations.

Due to the cyclical nature of its business, the operation and investment needs, along with the need for financing, the Company requires liquid funds, defined as Cash and cash equivalents plus other short-term financial assets, to meet its payment obligations.

The balance of liquid funds, future cash generation and the ability to obtain financing, provide the Company with alternatives to meet future investment and financing commitments.

As of December 31, 2023, the balance of liquid funds is US$1,715 million ((US$ 1,217 million as of December 31, 2022), which are invested in short-term instruments through financial entities with a high credit rating classification.


26
As of December 31, 2023, LATAM maintains engaged two Revolving Credit Facility for a total of US$1,100 million, one for an amount of US$600 million and another for an amount of US$500 million, which are fully available. The first of these lines is secured by and subject to the availability of certain collateral (i.e. aircraft, engines and spare parts). The second one, is secured by certain intangibles assets of the Company, which are shared with other Chapter 11 exit financing.



27
Class of liability for the analysis of liquidity risk ordered by date of maturity as of December 31, 2023
Debtor: LATAM Airlines Group S.A. Tax No. 89.862.200-2 Chile.

Tax No.CreditorCreditor
country		CurrencyUp to
90
days		More than
90 days
to one
year		More than
one to
three
years		More than
three to
five
years		More than
five
years		TotalNominal
value		AmortizationAnnual
Effective
rate		Nominal
rate
ThUS$ThUS$ThUS$ThUS$ThUS$ThUS$ThUS$%%
Bank loans
0-EGOLDMAN SACHSU.S.A.US$44,721 127,878 302,953 1,192,355 — 1,667,907 1,089,000 Quarterly20.31 15.04 
Obligations with the public
97.036.000-KSANTANDERChileUF— 3,230 6,409 6,409 182,647 198,695 160,214 To the expiration2.00 2.00 
0-EWILMINGTON TRUST COMPANYU.S.A.US$— 153,813 307,625 697,438 793,625 1,952,501 1,150,000 To the expiration15.00 13.38 
97.036.000-KSANTANDERChileUS$— — — — 6 6 3 To the expiration1.00 1.00 
Guaranteed obligations
0-EBNP PARIBASU.S.A.US$5,940 17,082 41,319 40,578 120,730 225,649 171,704 Quarterly6.98 6.98 
0-EWILMINGTON TRUST COMPANYU.S.A.US$5,948 16,928 42,098 40,736 54,056 159,766 132,585 Quarterly/Monthly8.76 8.76 
Other guaranteed obligation
0-EEXIM BANKU.S.A.US$452 1,348 43,531 43,494 16,665 105,490 99,109 Quarterly2.29 2.05 
0-EMUFGU.S.A.US$12,919 37,926 16,649 — — 67,494 64,102 Quarterly7.11 7.11 
0-ECREDIT AGRICOLEFranceUS$6,451 33,576 75,714 243,842 — 359,583 266,768 To the expiration9.43 9.43 
Financial lease
0-ENATIXISFranceUS$10,653 30,443 73,474 70,443 94,995 280,008 215,357 Quarterly7.58 7.58 
0-EUS BANKU.S.A.US$17,984 50,411 17,681 — — 86,076 84,177 Quarterly4.41 3.16 
0-EEXIM BANKU.S.A.US$3,262 9,389 216,015 148,582 75,118 452,366 413,072 Quarterly4.13 3.31 
0-EBANK OF UTAHU.S.A.US$5,891 17,705 47,590 54,357 117,597 243,140 172,582 Monthly10.71 10.71 
Others loans
0-EOTHERS (*)ChileUS$104 — — — — 104 104 To the expiration— — 
TOTAL114,325 499,729 1,191,058 2,538,234 1,455,439 5,798,785 4,018,777 
(•)Obligation with creditors for executed letters of credit.






28
Class of liability for the analysis of liquidity risk ordered by date of maturity as of December 31, 2023
Debtor: TAM S.A. Tax No. 02.012.862/0001-60, Brazil.


Tax No.CreditorCreditor
country		CurrencyUp to
90
days		More than
90 days
to one
year		More than
one to
three
years		More than
three to
five
years		More than
five
years		TotalNominal
value		AmortizationAnnual
Effective
rate		Nominal
rate
ThUS$ThUS$ThUS$ThUS$ThUS$ThUS$ThUS$%%
Financial leases
0-ENATIXISFranceUS$510 1,530 4,080 9,886 — 16,006 16,006 Quarterly——
TOTAL510 1,530 4,080 9,886 — 16,006 16,006 
































29
Class of liability for the analysis of liquidity risk ordered by date of maturity as of December 31, 2023
Debtor: LATAM Airlines Group S.A. Tax No. 89.862.200-2, Chile.

Tax No.CreditorCreditor
country		CurrencyUp to
90
days		More than
90 days
to one
year		More than
one to
three
years		More than
three to
five
years		More than
five
years		TotalNominal
value		AmortizationAnnual
Effective
rate		Nominal
rate
ThUS$ThUS$ThUS$ThUS$ThUS$ThUS$ThUS$%%
Lease Liability
AIRCRAFTOTHERSUS$139,599 419,554 1,116,682 928,238 1,685,262 4,289,335 2,894,195 — — — 
OTHER ASSETSOTHERSUS$2,523 7,276 14,863 846 1,404 26,912 25,680 — — — 
CLP19 57 94 — — 170 135 — — — 
UF557 1,255 2,906 2,426 5,099 12,243 11,097 — — — 
COP122 308 266 148 — 844 667 — — — 
EUR63 101 172 23 — 359 296 — — — 
BRL2,314 6,871 15,177 14,438 25,742 64,542 35,841 — — — 
MXN24 71 8 — — 103 84 — — — 
Trade and other accounts payables
-OTHERSOTHERSUS$846,541 7,063 — — — 853,604 709,933 — — — 
CLP44,593 8,072 — — — 52,665 64,317 — — — 
BRL309,999 7,671 — — — 317,670 409,474 — — — 
Other currency178,740 5,522 — — — 184,262 118,189 — — — 
Accounts payable to related parties currents
ForeignQatar AirwaysQatarUS$— 2,312 — — — 2,312 2,312 — — — 
ForeignDelta Air Lines, Inc.U.S.AUS$— 5,132 — — — 5,132 5,132 — — — 
Total1,525,094 471,265 1,150,168 946,119 1,717,507 5,810,153 4,277,352 
Total consolidated1,639,929 972,524 2,345,306 3,494,239 3,172,946 11,624,944 8,312,135 
















30


Class of liability for the analysis of liquidity risk ordered by date of maturity as of December 31, 2022
Debtor: LATAM Airlines Group S.A. Tax No. 89.862.200-2 Chile.

Tax No.CreditorCreditor
country		CurrencyUp to
90
days		More than
90 days
to one
year		More than
one to
three
years		More than
three to
five
years		More than
five
years		TotalNominal
value		AmortizationAnnual
Effective
rate		Nominal
rate
ThUS$ThUS$ThUS$ThUS$ThUS$ThUS$ThUS$%%
Bank loans
97.023.000-9GOLDMAN SACHSU.S.A.US$32,071 122,278 323,125 1,361,595 — 1,839,069 1,100,000 Quarterly18.46 13.38 
0-ESANTANDERSpainUS$19,164 55,288 — — — 74,452 70,951 Quarterly7.26 7.26 
Obligations with the public
97.030.000-7SANTANDERChileUF— 3,136 6,271 6,271 178,736 194,414 156,783 At Expiration2.00 2.00 
0-EWILMINGTON TRUST COMPANYU.S.A.US$— 152,531 307,625 757,625 887,250 2,105,031 1,150,000 At Expiration15.00 13.38 
97.036.000-KSANTANDERChileUS$— — — — 6 6 3 At Expiration1.00 1.00 
Guaranteed obligations
0-EBNP PARIBASU.S.A.US$6,692 14,705 39,215 39,215 138,345 238,172 184,198 Quarterly5.76 5.76 
0-EWILMINGTON TRUST COMPANYU.S.A.US$3,839 13,465 45,564 43,444 75,505 181,817 141,605 Quarterly / Monthly8.20 8.20 
Other guaranteed obligation
0-EEXIM BANKU.S.A.US$394 1,171 12,119 21,111 60,857 95,652 86,612 Quarterly2.01 1.78 
0-EMUFGU.S.A.US$13,091 38,914 69,916 — — 121,921 112,388 Quarterly6.23 6.23 
0-ECREDIT AGRICOLEFranceUS$5,769 31,478 70,890 267,615 — 375,752 275,000 At Expiration8.24 8.24 
Financial lease
0-ECITIBANKU.S.A.US$6,995 5,844 — — — 12,839 12,514 Quarterly6.19 5.47 
0-EBNP PARIBASU.S.A.US$6,978 20,662 1,543 — — 29,183 28,165 Quarterly5.99 5.39 
0-ENATIXISFranceUS$9,864 29,468 75,525 70,787 129,582 315,226 239,138 Quarterly6.44 6.44 
0-EUS BANKU.S.A.US$18,072 54,088 86,076 — — 158,236 152,693 Quarterly4.06 2.85 
0-EPK AIRFINANCEU.S.A.US$1,749 5,165 6,665 — — 13,579 12,590 Quarterly5.97 5.97 
0-EEXIM BANKU.S.A.US$3,176 9,681 137,930 193,551 157,978 502,316 446,509 Quarterly3.58 2.79 
0-EBANK OF UTAHU.S.A.US$5,878 17,651 47,306 50,649 145,184 266,668 182,237 Monthly10.45 10.45 
Others loans
0-EOTHERS (*)ChileUS$2,028 — — — — 2,028 2,028 At Expiration— — 
TOTAL135,760 575,525 1,229,770 2,811,863 1,773,443 6,526,361 4,353,414 
(•)Obligation with creditors for executed letters of credit.




31
Class of liability for the analysis of liquidity risk ordered by date of maturity as of December 31, 2022
Debtor: TAM S.A. Tax No. 02.012.862/0001-60, Brazil.

Tax No.CreditorCreditor
country		CurrencyUp to
90
days		More than
90 days
to one
year		More than
one to
three
years		More than
three to
five
years		More than
five
years		TotalNominal
value		AmortizationAnnual
Effective
rate		Nominal
rate
ThUS$ThUS$ThUS$ThUS$ThUS$ThUS$ThUS$%%
Financial Leases
0-ENATIXISFranceUS$510 1,530 4,080 4,080 7,846 18,046 18,046 Semiannual/Quarterly7.237.23
Bank loans
0-EMERRILL LYNCH CREDIT PRODUCTS, LLCBrazilBRL304,549 — — — — 304,549 304,549 Monthly3.953.95
TOTAL305,059 1,530 4,080 4,080 7,846 322,595 322,595 







´







32
Class of liability for the analysis of liquidity risk ordered by date of maturity as of December 31, 2022
Debtor: LATAM Airlines Group S.A. Tax No. 89.862.200-2, Chile.

Tax No.CreditorCreditor
country		CurrencyUp to
90
days		More than
90 days
to one
year		More than
one to
three
years		More than
three to
five
years		More than
five
years		TotalNominal
value		AmortizationAnnual
Effective
rate		Nominal
rate
ThUS$ThUS$ThUS$ThUS$ThUS$ThUS$ThUS$%%
Lease Liability
AIRCRAFTOTHERSUS$80,602 250,297 845,215 776,431 1,094,935 3,047,480 2,134,968 — — — 
OTHER ASSETSOTHERSUS$1,727 8,080 20,641 6,251 1,763 38,462 35,157 — — — 
CLP20 34 69 — — 123 111 — — — 
UF574 1,568 3,007 2,515 6,273 13,937 11,703 — — — 
COP76 227 301 — — 604 518 — — — 
EUR84 253 246 24 — 607 571 — — — 
BRL2,064 6,192 14,851 12,491 28,625 64,223 33,425 — — — 
Trade and other accounts payables
OTHERSOTHERSUS$80,557 58,342 — — — 138,899 138,899 — — — 
CLP168,393 1,231 — — — 169,624 169,624 — — — 
BRL370,772 5,242 — — — 376,014 376,014 — — — 
Other currency583,118 3,935 — — — 587,053 587,053 — — — 
Accounts payable to related parties currents
ForeignInversora Aeronáutica Argentina S.A.ArgentinaUS$5 — — — — 5 5 — — — 
ForeignPatagonia SeafarmsU.S.AUS$7 — — — — 7 7 — — — 
Total1,287,999 335,401 884,330 797,712 1,131,596 4,437,038 3,488,055 
Total consolidated1,728,818 912,456 2,118,180 3,613,655 2,912,885 11,285,994 8,164,064 


33
The Company has fuel, interest rate and exchange rate hedging strategies involving derivatives contracts with different financial institutions.

As of December 31, 2023, the Company maintains guarantees for US$11.0 million corresponding to derivative transactions. The increase is due to: i) Increase in the number of hedging contracts and ii) changes in fuel prices, exchange rates and interest rates. At the end of 2022, the Company had guarantees for US$7.5 million corresponding to derivative transactions.

3.2.    Capital risk management

The objectives of the Company, in relation to capital management are: (i) to meet the minimum equity requirements and (ii) to maintain an optimal capital structure.

The Company monitors contractual obligations and regulatory requirements in the different countries where the group's companies are domiciled to ensure faithful compliance with the minimum equity requirement, the most restrictive limit of which is to maintain positive liquid equity.

Additionally, the Company periodically monitors the short and long term cash flow projections to ensure that it has sufficient cash generation alternatives to meet future investment and financing commitments.

The international credit rating of the Company is the result of the ability to meet long-term financial commitments. As of December 31, 2023, the Company has a national rating of BBB- by Fitch, and international rating by Standard & Poor's of B with a positive outlook, and B1 with a stable outlook by Moody's.


3.3.     Estimates of fair value.

At December 31, 2023, the Company maintained financial instruments that should be recorded at fair value. These are grouped into two categories:

1.    Derivative financial instruments:

This category includes the following instruments:

-Interest rate derivative contracts,

-Fuel derivative contracts,

-Currency derivative contracts.


2.    Financial Investments:


This category includes the following instruments:

-Investments in short-term Mutual Funds (cash equivalent).


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.







34

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

As of December 31, 2023As of December 31, 2022
Fair value measurements using
 values considered as		Fair value measurements using
 values considered as
Fair valueLevel ILevel IILevel IIIFair valueLevel ILevel IILevel III
ThUS$ThUS$ThUS$ThUS$ThUS$ThUS$ThUS$ThUS$
Assets
Cash and cash equivalents89,706 89,706 — — 95,452 95,452 — — 
Short-term mutual funds89,706 89,706 — — 95,452 95,452 — — 
Other financial assets, current22,136 — 22,136 — 21,601 — 21,601 — 
Fair value interest rate derivatives— — — — 8,816 — 8,816 — 
Fair value of fuel derivatives22,136 — 22,136 — 12,594 — 12,594 — 
Fair value of foreign currency derivative— — — — 191 — 191 — 
Liabilities
Other financial liabilities, current1,544 — 1,544 — — — — — 
Fair value of foreign currency derivatives1,544 — 1,544 — — — — — 
























35
Additionally, at December 31, 2023, 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 December 31, 2023As of December 31, 2022
Book valueFair valueBook valueFair value
ThUS$ThUS$ThUS$ThUS$
Cash and cash equivalents1,625,055 1,625,055 1,121,223 1,121,223 
Cash on hand2,019 2,019 2,248 2,248 
Bank balance552,187 552,187 480,566 480,566 
Overnight75,236 75,236 259,129 259,129 
Time deposits995,613 995,613 379,280 379,280 
Other financial assets, current152,683 152,683 481,914 481,914 
Other financial assets152,683 152,683 481,914 481,914 
Trade debtors, other accounts receivable and Current accounts receivable1,385,910 1,385,910 1,008,109 1,008,109 
Accounts receivable from entities related, current28 28 19,523 19,523 
Other financial assets, non-current34,485 34,485 15,517 15,517 
Accounts receivable, non-current12,949 12,949 12,743 12,743 
Other current financial liabilities594,519 867,791 802,841 824,167 
Accounts payable for trade and other accounts payable, current1,765,279 1,765,279 1,627,992 1,627,992 
Accounts payable to entities related, current7,444 7,444 12 12 
Other financial liabilities, non current6,341,669 6,174,294 5,979,039 5,533,131 
Accounts payable, non current418,587 418,587 326,284 326,284 

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, revenue, expenses and commitments. Basically, these estimates refer to:

(a)     Impairment of Intangible asset with indefinite useful life

Management conducts an impairment test annually or more frequently if events or changes in circumstances indicate potential impairment. An impairment loss is recognized for the amount by which the carrying amount of the cash generating unit (CGU) exceeds its recoverable amount.

Management’s value-in-use calculations included significant judgments and assumptions relating to revenue growth rates, exchange rates, discount rates, inflation rates, fuel price. The estimation of these assumptions requires significant judgment by management as these variables are inherently uncertain; however, the assumptions used are consistent with the Company’s forecasts approved by management. Therefore, management evaluates and updates the estimates as necessary in light of conditions that affect these variables. The main assumptions used as well as the corresponding sensitivity analyses are shown in Note 15.



36
(b)     Depreciation expense and impairment of Properties, Plant and Equipment

The depreciation of assets is calculated based on a straight-line basis, except for certain technical components depreciated on cycles and hours flown. These useful lives are reviewed on an annual basis according to 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 result in a useful life different from what has been 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.

The residual values are estimated according to the market value that the assets will have at the end of their life. The residual value and useful life of the assets are reviewed, and adjusted if necessary, once a year. When the value of an asset is greater than its estimated recoverable amount, its value is immediately reduced to its recoverable amount.

The Company has concluded that the Properties, Plant and Equipment cannot generate cash inflows to a large extent independent of other assets, therefore the impairment assessment is made as an integral part of the only Cash Generating Unit maintained by the Company, Air Transport. The Company checks when there are signs of impairment, whether the assets have suffered any impairment losses at the Cash Generated Unit level.

(c)     Recoverability of deferred tax assets    

Management records deferred taxes on the temporary differences that arise between the tax bases of assets and liabilities and their amounts in the financial statements. Deferred tax assets on tax losses are recognized to the extent that it is probable that future tax benefits will be available to offset temporary differences.

The Company applies significant judgment in evaluating the recoverability of deferred tax assets. In determining the amounts of the deferred tax asset to be accounted for, management considers tax planning strategies, historical profitability, projected future taxable income (considering assumptions such as: growth rate, exchange rate, discount rate and fuel price consistent with those used in the impairment analysis of the group's cash-generating unit) and the expected timing of reversals of existing temporary differences.

(d)     Air tickets sold that will not be finally used.

The Company records the sale of air tickets as deferred revenue. Ordinary revenue from the sale of tickets is recognized in the statement of income when the passenger transportation service is provided or expires due to non-use. The Company evaluates the probability of expiration of air tickets on a monthly basis, based on the history of use. A change in this probability could impact revenue in the year in which the change occurs and in future years.

As of December 31, 2023, deferred revenues associated with air tickets sold amount to ThUS$ 2,009,242 (ThUS$ 1,574,145 as of December 31, 2022). An hypothetical change of one percentage point in passenger behavior with respect to use would result an impact of up to ThUS$ 10,150 per month (ThUS$ 7,453 as of December 31, 2022).

(e)     Valuation of the miles and points awarded to the holders of the loyalty programs, pending use.
As of December 31, 2023, deferred revenue associated with the LATAM Pass loyalty program from Spanish-speaking countries increased to ThUS$ 1,099,580 (ThUS$ 1,120,565 as of December 31, 2022). An hypothetical change of one percentage point in the probability of redemption would translate into a cumulative impact of ThUS$ 31,510 on the results of 2023 (ThUS$ 29,571 as of December 31, 2022). Deferred revenue associated with the LATAM Pass Brazil loyalty program increased to ThUS$179,151 as of December 31, 2023 (ThUS$ 140,486 as of December 31, 2022). An hypothetical change of one percentage point in the exchange probability would result in an accumulated impact of ThUS$ 5,125 on the results of 2023 (ThUS$ 3,772 as of December 31, 2022).
Management used statistical models to estimate the miles and points awarded that will not be redeemed by the
program’s members (breakage) which involved significant judgments and assumptions relating to the historical
redemption and expiration activity and forecasted redemption and expiration patterns.



37
The Management in conjunction with an external specialist developed a predictive model of non -use miles or
points, which allows to generate non-use rates on the basis of historical information, based on behavior of the
accumulation, use and expiration of the miles or points.


(f)     Legal Contingencies

In the case of known contingencies, the Company records a provision when it has a present obligation, whether legal or constructive, as a result of a past event, it is probable that an outflow of resources will be required to settle the obligation and a reliable estimate of the obligation amount can be made. The assessment of contingencies inherently involves the exercise of significant judgment and estimates of the outcome of future events, the likelihood of loss being incurred and when determining whether a reliable estimate of the loss can be made. The Company assesses its liabilities and contingencies based upon the best information available, uses the knowledge, experience and professional judgment to the specific characteristics of the known risks. This process facilitates the early assessment and quantification of potential risks in individual cases or in the development of contingent matters. If we are unable to reliably estimate the obligation or conclude no loss is probable but it is reasonably possible that a loss may be incurred, no provision is recorded but the contingency is disclosed in the notes to the consolidated financial statements.

Company recognized as the present obligation under an onerous contract as a provision when a contract under which the unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received under it.

(g)     Leases

During 2022, as a result of the arrival of new aircraft and the significant change in the flows of many current contracts, the Company evaluated the relevance in the current scenario of continuing to use the implicit rate, a methodology used in recent years, or whether it should in instead use a different approximation for calculating the rate. It was concluded that the implicit rate was not being able to reflect the economic environment in which the company operates, therefore it was not accurately representing the Company's indebtedness conditions. Because of this, all new contracts entered into from 2022 and all contracts that were modified from 2022 used the incremental rate. Existing contracts that remained unchanged continued using the original implicit discount rate.

(i)Discount rate

The discount rates used to calculate the aircraft lease debt correspond to: (i) For aircraft that did not have contractual changes associated with the exit from Chapter 11, the rate used was the implicit rate of the contract, this is the discount rate that results from the aggregate present value of the minimum lease payments and the unguaranteed residual value, and (ii) For aircraft that had contractual changes associated with exit from Chapter 11, the rate used was the incremental rate, this discount rate was calculated considering our recent aircraft debt negotiations, as well as publicly available data for instruments with similar characteristics when calculating our incremental borrowing rates.
    
For assets other than aircraft, the estimated lessee's incremental borrowing rate, which is derived from information available at the lease inception date, was used to determine the present value of the lease payments. We consider our recent debt issuances as well as publicly available data for instruments with similar characteristics when calculating our incremental borrowing ratios.
A decrease of one percentage point in our estimate of the rates used to determine the lease liabilities current registered fleet as of December 31, 2023 would increase the lease liability by approximately US$ 111 million.

(ii)Lease term

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

In any case, it is possible that events that may take place in the future make it necessary to modify them in future periods, which would be done prospectively.


38

NOTE 5 - SEGMENT INFORMATION

As of December 31, 2023, the Company considers that it has a single operating segment, Air Transport. This 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 reassignment (airplanes, crew, personnel, etc.) within the network, which implies a functional interrelation between all of them, making them inseparable. This segment definition is one of the most common in the worldwide airline industry.

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

For the year ended at December 31,
20232022
ThUS$ThUS$
Peru988,908 858,957 
Argentina244,413 206,856 
U.S.A.1,044,822 1,058,107 
Europe800,897 768,980 
Colombia662,263 540,231 
Brazil5,006,377 3,724,466 
Ecuador332,801 248,454 
Chile1,898,150 1,514,645 
Asia Pacific and rest of Latin America661,910 441,825 
Income from ordinary activities11,640,541 9,362,521 
Other operating income148,641 154,286 

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.



39
NOTE 6 - CASH AND CASH EQUIVALENTS

As of
December 31, 2023		As of
December 31, 2022
ThUS$ThUS$
Cash on hand2,019 2,248 
Bank balances (1)552,187 480,566 
Overnight75,236 259,129 
Total Cash629,442 741,943 
Cash equivalents
Time deposits995,613 379,280 
Mutual funds89,706 95,452 
Total cash equivalents1,085,319 474,732 
Total cash and cash equivalents1,714,761 1,216,675 
(1) As of December 31, 2023, within the item bank balances are ThUS$ 391,966 related to banks accounts that pay interest to the Company for the daily or monthly balances (ThUS$ 274,235 as of December 31, 2022)

Cash and cash equivalents are denominated in the following currencies:

CurrencyAs of
December 31, 2023		As of
December 31, 2022
ThUS$ThUS$
Argentine peso3,438 10,711 
Brazilian real520,796 193,289 
Chilean peso47,933 17,643 
Colombian peso36,326 22,607 
Euro25,329 19,361 
US Dollar1,020,467 906,666 
Mexican peso8,159 9,406 
R.P. Chinese Yuan20,801 16,247 
Other currencies31,512 20,745 
Total1,714,761 1,216,675 



40
NOTE 7 - FINANCIAL INSTRUMENTS

Financial instruments by category

As of December 31, 2023

AssetsMeasured at amortized
cost		At fair value
with changes
in results		Hedge
derivatives		Total
ThUS$ThUS$ThUS$ThUS$
Cash and cash equivalents1,625,055 89,706 — 1,714,761 
Other financial assets, current152,683 — 22,136 174,819 
Trade and others accounts receivable, current1,385,910 — — 1,385,910 
Accounts receivable from related entities, current28 — — 28 
Other financial assets, non current34,485 — — 34,485 
Accounts receivable, non current12,949 — — 12,949 
Total3,211,110 89,706 22,136 3,322,952 

LiabilitiesMeasured at
amortized
cost		At fair value
with changes
in results		Hedge
derivatives		Total
ThUS$ThUS$ThUS$ThUS$
Other financial liabilities, current594,519 — 1,544 596,063 
Trade and others accounts payable, current1,765,279 — — 1,765,279 
Accounts payable to related entities, current7,444 — — 7,444 
Other financial liabilities, non-current6,341,669 — — 6,341,669 
Accounts payable, non-current418,587 — — 418,587 
Total9,127,498 — 1,544 9,129,042 


As of December 31, 2022

AssetsMeasured at
amortized
cost		At fair value
with changes
in results		Hedge
derivatives		Total
ThUS$ThUS$ThUS$ThUS$
Cash and cash equivalents1,121,223 95,452 — 1,216,675 
Other financial assets, current (*)481,637 277 21,601 503,515 
Trade and others accounts receivable, current1,008,109 — — 1,008,109 
Accounts receivable from related entities, current19,523 — — 19,523 
Other financial assets, non current15,517 — — 15,517 
Accounts receivable, non current12,743 — — 12,743 
Total2,658,752 95,729 21,601 2,776,082 


41
LiabilitiesMeasured at
amortized
cost		At fair value
with changes
in results		Hedge
derivatives		Total
ThUS$ThUS$ThUS$ThUS$
Other financial liabilities, current802,841 — — 802,841 
Trade and others accounts payable, current1,627,992 — — 1,627,992 
Accounts payable to related entities, current12 — — 12 
Other financial liabilities, non-current5,979,039 — — 5,979,039 
Accounts payable, non-current326,284 — — 326,284 
Total8,736,168 — — 8,736,168 

(*) The value presented as measured at amortized cost, mainly correspond to ThUS$ 340,008 of funds delivered as restricted advances (as described in Note 11) and guarantees delivered.



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

As of December 31, 2023As of December 31, 2022
ThUS$ThUS$
Trade accounts receivable1,185,792 952,625 
Other accounts receivable277,845 135,459 
Total trade and other accounts receivable1,463,637 1,088,084 
Less: Expected credit loss(64,778)(67,232)
Total net trade and accounts receivable1,398,859 1,020,852 
Less: non-current portion – accounts receivable(12,949)(12,743)
Trade and other accounts receivable, current1,385,910 1,008,109 

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

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 December 31, 2023As December 31, 2022
Portfolio maturityExpected
loss rate (1) 		Gross book
value (2)		Impairment loss Provision Expected
loss rate (1) 		Gross book
value (2)		Impairment loss Provision
% ThUS$ThUS$ % ThUS$ThUS$
Up to date1%1,022,845(12,672)1%745,334(8,749)
From 1 to 90 days3%102,977(2,989)3%142,780(3,758)
From 91 to 180 days25%8,350(2,048)15%8,622(1,297)
From 181 to 360 days44%7,868(3,491)79%8,269(6,565)
Over 360 days100%43,752(43,578)98%47,620(46,863)
Total1,185,792(64,778)952,625(67,232)

(1)Corresponds to the consolidated expected rate of accounts receivable.
(2)The gross book value represents the maximum credit risk value of trade accounts receivables.

42

Currency balances composition of Trade and other accounts receivable and non-current accounts receivable are as follow:

CurrencyAs of December 31, 2023As of December 31, 2022
ThUS$ThUS$
Argentine Peso13,827 25,559 
Brazilian Real825,749 523,467 
Chilean Peso75,050 36,626 
Colombian Peso12,720 6,779 
Euro90,699 12,506 
US Dollar344,347 376,900 
Australian Dollar5,097 9,808 
Japanese Yen4,695 2,802 
Pound Sterling3,390 9,149 
Korean Won5,882 6,337 
Other Currencies17,403 10,919 
Total1,398,859 1,020,852 

Movements of the expected credit losses of Trade accounts receivables are as follows:

Opening balance Write-offs(Increase) Decrease Closing balance
PeriodsThUS$ ThUS$ThUS$ ThUS$
From January 1 to December 31, 2022 (81,004)5,966 7,806 (67,232)
From January 1 to December 31, 2023 (67,232)7,122 (4,668)(64,778)
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 significant, and the policy is to analyze case by case to classify them according to the existence of risk, determining they need to be reclassified 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 December 31, 2023 As of December 31, 2022
Gross exposure
according to
balance		Gross
impaired
exposure 		Exposure net
of risk
concentrations		Gross exposure
according to
balance		Gross
Impaired
exposure 		Exposure net
of risk
concentrations
ThUS$ThUS$ ThUS$ThUS$ThUS$ ThUS$
Trade accounts receivable1,185,792 (64,778)1,121,014 952,625 (67,232)885,393 
Other accounts receivable277,845 - 277,845 135,459 - 135,459 

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.


43



NOTE 9 - ACCOUNTS RECEIVABLE FROM/PAYABLE TO RELATED ENTITIES

(a)Accounts Receivable

Tax No.Related partyRelationshipCountry of originCurrencyAs of
December 31, 2023		As of December 31, 2022
ThUS$ThUS$
ForeignQatar AirwaysIndirect shareholderQatarUS$— 257 
ForeignDelta Air Lines, Inc.ShareholderU.S.A.US$— 19,228 
76.335.600-0Parque de Chile S.A.Related directorChileCLP2 2 
96.989.370-3Rio Dulce S.A. (*)Related directorChileCLP— 1 
96.810.370-9Inversiones Costa Verde Ltda. y CPA.Related directorChileCLP25 35 
ForeignInversora Aeronáutica Argentina S.A.Related directorArgentinaARS1 — 
Total current assets 28 19,523 

(b)Current accounts payable

Current liabilities
Tax No.Related partyRelationshipCountry of originCurrencyAs of
December 31, 2023		As of
December 31, 2022
ThUS$ThUS$
ForeignQatar AirwaysIndirect shareholderQatarUS$2,312 — 
ForeignDelta Air Lines, Inc.ShareholderU.S.A.US$5,132 — 
ForeignInversora Aeronáutica Argentina S.A.Related directorArgentinaUS$— 5 
ForeignPatagonia Seafarms INC (*)Related directorU.S.A.US$— 7 
Total current and non current liabilities 7,444 12 

(*) Related until November 2022.

Transactions between related parties have been carried out on arm’s length conditions between interested and duly-informed parties. The transaction terms for the liabilities of the period 2023 correspond from 30 days to 1 year of maturity, and the nature of the settlement of transactions are monetary.




44
NOTE 10 - INVENTORIES

The composition of Inventories is as follows:
As of
December 31, 2023		As of
December 31, 2022
ThUS$ThUS$
Technical stock (*)540,342 438,717 
Non-technical stock (**)52,538 39,072 
Total592,880 477,789 

(*) Correspond to spare parts and materials that will be used in both own and third-party maintenance services.

(**) Consumption of on-board services, uniforms and other indirect materials

These are valued at their average acquisition cost net of their obsolescence provision according to the following detail:
As of
December 31, 2023		As of
December 31, 2022
ThUS$ThUS$
Provision for obsolescence Technical stock45,621 49,981 
Provision for obsolescence Non-technical stock5,228 5,823 
Total50,849 55,804 

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

As of December 31, 2023, the Company registered ThUS$296,423 (ThUS$148,790 for the year ended December 31, 2022), the income statements, mainly related to on-board consumption and maintenance, which is part of the Cost of sales.



45
NOTE 11 - OTHER FINANCIAL ASSETS

(a)    The composition of other financial assets is as follows:

Current AssetsNon-current assetsTotal Assets
As of December 31, 2023As of December 31, 2022As of December 31, 2023As of December 31, 2022As of December 31, 2023As of December 31, 2022
ThUS$ThUS$ThUS$ThUS$ThUS$ThUS$
(1) Other financial assets
Deposits in guarantee (aircraft)31,624 22,340 9,736 1,273 41,360 23,613 
Guarantees for margins of derivatives12,829 7,460 — — 12,829 7,460 
Other investments— — 494 513 494 513 
Guaranteed debt advances Chapter 11 (*)— 340,008 — — — 340,008 
Other guarantees given108,230 112,106 24,255 13,731 132,485 125,837 
Subtotal of other financial assets152,683 481,914 34,485 15,517 187,168 497,431 
(2) Hedging derivative asset
Fair value of interest rate derivatives— 8,816 — — — 8,816 
Fair value of foreign currency derivatives— 191 — — — 191 
Fair value of fuel price derivatives22,136 12,594 — — 22,136 12,594 
Subtotal of derivative assets22,136 21,601 — — 22,136 21,601 
Total Other Financial Assets174,819 503,515 34,485 15,517 209,304 519,032 

(*) As of December 31, 2022, there were ThUS$340,008 of funds delivered to an agent as restricted advances, the purpose of which is to settle the claims pending resolution existing at the exit of the Chapter 11 process.

The different derivative hedging contracts maintained by the Company are described in Note 18.    
(b)    The balances composition by currencies of the Other financial assets are as follows:
Type of currencyAs of
December 31, 2023		As of
December 31, 2022
ThUS$ThUS$
Brazilian real18,767 19,589 
Chilean peso6,440 5,847 
Colombian peso1,461 1,716 
Euro7,974 6,791 
U.S.A dollar171,852 482,544 
Other currencies2,810 2,545 
Total209,304 519,032 



46

NOTE 12 - OTHER NON-FINANCIAL ASSETS
The composition of other non-financial assets is as follows:

Current assetsNon-current assetsTotal Assets
As of
December 31, 2023		As of
December 31, 2022		As of
December 31, 2023		As of
December 31, 2022		As of
December 31, 2023		As of
December 31, 2022
ThUS$ThUS$ThUS$ThUS$ThUS$ThUS$
(a) Advance payments
Aircraft insurance and other25,992 27,122 — — 25,992 27,122 
Others3,740 13,039 5,740 1,773 9,480 14,812 
Subtotal advance payments29,732 40,161 5,740 1,773 35,472 41,934 
(b) Contract assets (1)
GDS costs22,738 9,530 — — 22,738 9,530 
Credit card commissions37,200 26,124 — — 37,200 26,124 
Travel agencies commissions12,421 12,912 — — 12,421 12,912 
Subtotal advance payments72,359 48,566 — — 72,359 48,566 
(c) Other assets
Sales tax81,785 100,665 13,753 27,962 95,538 128,627 
Other taxes1,130 1,688 — — 1,130 1,688 
Contributions to the International Aeronautical Telecommunications Society (“SITA”)258 258 739 739 997 997 
Contributions to Aeronautical Service Companies— — 60 — 60 — 
Judicial deposits— 26 148,329 117,904 148,329 117,930 
Subtotal other assets83,173 102,637 162,881 146,605 246,054 249,242 
Total Other Non - Financial Assets185,264 191,364 168,621 148,378 353,885 339,742 



(1) Movement of Contracts assets:

Initial balanceActivationCumulative translation adjustment Amortization Final balance
ThUS$ThUS$ThUS$ ThUS$ ThUS$
From January 1 to December 31, 2022 25,080 302,290 (37,146)(241,658)48,566 
From January 1 to December 31, 2023 48,566 242,717 2,033 (220,957)72,359 















47

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

Non-current assets and disposal group classified as held for sale at December 31, 2023 and December 31, 2022, are detailed below:
As of
December 31, 2023		As of
December 31, 2022
ThUS$ThUS$
Current assets
Aircraft100,658 64,483 
Engines and rotables2,012 21,552 
Other assets— 381 
Total102,670 86,416 
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 exercise.
Assets reclassified from Property, plant and equipment to Non-current assets or groups of assets for disposal classified as held for sale.
During 2020, 11 Boeing 767 aircraft were transferred from the Property, plant and equipment, to Non-current assets item or groups of assets for disposal classified as held for sale. During 2021, the sale of 5 aircraft was completed. During the year 2022 the sale of 3 aircraft was finalized and during the year 2023 the sale of 1 aircraft was finalized.

During 2021, associated with the fleet restructuring plan, 3 engines of the Airbus A350 fleet were transferred from the Property, plant and equipment to Non-current assets or groups of assets for disposal classified as held for sale, of which during the same year the sale of 1 engine was finalized. Additionally, during the year 2022, the sale of 1 engine was finalized and some materials and spare parts of this same fleet were transferred to Non-current assets or groups of assets for disposal classified as held for sale. During the year 2023, the sale of 1 engine, some spare parts, and materials was finalized.

During 2022, 28 Airbus A319 family aircraft were transferred from Property, plant and equipment to Non-current assets or asset groups for disposal classified as held for sale. Additionally, adjustments for US$ 345 million of expenses were recognized within results as part of Other gains (losses) to record these assets at their net realizable value. During 2023, the engines associated with these aircraft were added, generating additional adjustments of US$39 million, which were recorded in the result as part of Other gains (losses), in order to register these assets at their net realizable value.

During 2022, 6 aircraft and 8 engines of the Airbus A320 family were transferred from Property, plant and equipment to Non-current assets or asset groups for disposal classified as held for sale, and as of December 31, 2022, the sale of 3 aircrafts were finalized and as of December 31, 2023, the sale of 2 aircraft and 8 engines were finalized. Additionally, for the year ended December 31, 2022, adjustments for US$ 25 million of expenses were recognized to record these assets at their net realizable value, and since the fleet restructuring process had already been completed, these adjustments were recorded in results as part of Other expenses by function. During the year 2023, 6 Airbus A320 aircraft were transferred from the Property, Plant, and Equipment category to the Non-current Assets or Asset Groups held for sale category. Additionally, during the year 2023, adjustments of US$9 million in expenses were recognized to record these assets at their net realizable value. These adjustments were recorded in the results as part of Other expenses by function.

During 2023, 1 Boeing 767 family aircraft was transferred from Property, plant and equipment to Non-current assets or asset groups for disposal classified as held for sale. Additionally, adjustments for US$ 3 million of expenses were recognized within results as part of Other expenses by function to record these assets at their net realizable value.



48
The detail of the fleet classified as non-current assets and disposal group classified as held for sale is as follows:
AircraftModelAs of
December 31, 2023		As of
December 31, 2022
Boeing 767300F33
Airbus A32020073
Airbus A3191002828
Total3834


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:

Ownership
Name of significant subsidiaryCountry of
incorporation		Functional
currency 		As of
December 31, 2023		As of
December 31, 2022
%%
Latam Airlines Perú S.A.PeruUS$99.81000 99.81000 
Lan Cargo S.A.ChileUS$99.89810 99.89810 
Línea Aérea Carguera de Colombia S.A.ColombiaUS$90.46000 90.46000 
Transporte Aéreo S.A.ChileUS$100.00000 100.00000 
Latam Airlines Ecuador S.A.EcuadorUS$100.00000 100.00000 
Aerovías de Integración Regional S.A. Aires S.A.ColombiaCOP99.23168 99.21764 
TAM Linhas aéreas S.A.BrazilBRL100.00000 99.99935 
ABSA Aerolimhas Brasileiras S.A.BrazilUS$100.00000 100.00000 
Transportes Aéreos del Mercosur S.A.ParaguayPYG94.98000 94.98000 



The consolidated subsidiaries do not have significant restrictions for transferring funds to the parent company.



49
Summary financial information of significant subsidiaries
Statement of financial position as of December 31, 2023Income for the year
ended December 31, 2023
Name of significant subsidiaryTotal
Assets		Current
Assets		Non-current
Assets		Total
Liabilities		Current
Liabilities		Non-current
Liabilities		RevenueNet
Income/(loss)
ThUS$ThUS$ThUS$ThUS$ThUS$ThUS$ThUS$ThUS$
Latam Airlines Perú S.A.334,481 312,628 21,853 285,645 281,208 4,437 1,404,061 (4,666)
Lan Cargo S.A.391,430 122,877 268,553 189,019 157,003 32,016 403,051 22,677 
Línea Aérea Carguera de Colombia S.A.166,520 57,240 109,280 59,640 59,344 296 222,397 (5,331)
Transporte Aéreo S.A.280,117 37,436 242,681 151,066 117,121 33,945 387,515 24,871 
Latam Airlines Ecuador S.A.152,676 149,155 3,521 131,488 120,917 10,571 260,426 1,242 
Aerovías de Integración Regional S.A. Aires S.A.191,878 186,612 5,266 185,799 182,923 2,876 516,410 (12,724)
TAM Linhas Aéreas S.A.4,119,149 2,417,115 1,702,034 3,024,805 2,061,406 963,399 5,587,692 736,209 
ABSA Aerolinhas Brasileiras S.A.500,177 490,548 9,629 538,982 510,978 28,004 162,580 28 
Transportes Aéreos del Mercosur S.A.49,713 46,976 2,737 26,772 24,833 1,939 50,990 6,060 
Statement of financial position as of December 31, 2022Income for the year
ended December 31, 2022
Name of significant subsidiaryTotal
Assets		Current
Assets		Non-current
Assets		Total
Liabilities		Current
Liabilities		Non-current
Liabilities		RevenueNet
Income/(loss)
ThUS$ThUS$ThUS$ThUS$ThUS$ThUS$ThUS$ThUS$
Latam Airlines Perú S.A.335,773 305,288 30,485 281,178 276,875 4,303 1,257,865 (12,726)
Lan Cargo S.A.394,378 144,854 249,524 212,094 165,297 46,797 333,054 (1,230)
Línea Aérea Carguera de Colombia S.A.307,161 126,648 180,513 127,629 127,380 249 226,587 (5,727)
Transporte Aéreo S.A.283,166 47,238 235,928 177,109 145,446 31,663 320,187 (36,190)
Latam Airlines Ecuador S.A.110,821 107,313 3,508 93,975 82,687 11,288 134,622 1,519 
Aerovías de Integración Regional S.A. Aires S.A.112,501 109,076 3,425 213,941 211,679 2,262 394,430 (122,199)
TAM Linhas Aéreas S.A.3,329,695 1,925,948 1,403,747 4,166,754 3,264,814 901,940 3,966,615 (65,190)
ABSA Aerolinhas Brasileiras S.A.223,701 215,700 8,001 262,534 233,739 28,795 244,028 (7,853)
Transportes Aéreos del Mercosur S.A.70,883 65,395 5,488 54,340 52,332 2,008 44,449 2,306 


50
(b)     Non-controlling interests

EquityTax No.Country
of origin		As of
December 31, 2023		As of
December 31, 2022		As of
December 31, 2023		As of
December 31, 2022
%%ThUS$ThUS$
Latam Airlines Perú S.A.ForeignPeru0.19000 0.19000 93 (13,678)
Aerovías de Integración Regional S.A. Aires S.A.ForeignColombia0.77400 0.78236 (5,049)(264)
Linea Aérea Carguera de Colombia S.A.ForeignColombia9.54000 9.54000 (8,421)(973)
Transportes Aéreos del Mercosur S.A.ForeignParaguay5.02000 5.02000 1,152 885 
Lan Cargo S.A. and Subsidiaries93.383.000-4Chile0.10196 0.10196 198 2,475 
Other companies— (2)
Total(12,027)(11,557)

For the year ended
At December 31,		For the year ended
At December 31,
IncomesTax No.Country
of origin		2023202220232022
%%ThUS$ThUS$
Latam Airlines Perú S.AForeignPeru0.19000 0.19000 (9)(643)
Aerovías de Integración Regional S.A. Aires S.A.ForeignColombia0.77400 0.78236 (101)(956)
Linea Aérea Carguera de Colombia S.A.ForeignColombia9.54000 9.54000 (500)(551)
Transportes Aéreos del Mercosur S.A.ForeignParaguay5.02000 5.02000 304 116 
Lan Cargo S.A. and Subsidiaries93.383.000-4Chile0.10196 0.10196 25 (26)
Other companies— (13)
Total(281)(2,073)


51
NOTE 15 - INTANGIBLE ASSETS OTHER THAN GOODWILL

The details of intangible assets are as follows:
Classes of intangible assets
(net)		Classes of intangible assets
(gross)
As of
December 31, 2023		As of
December 31, 2022		As of
December 31, 2023		As of
December 31, 2022
ThUS$ThUS$ThUS$ThUS$
Airport slots658,949 625,368 658,949 625,368 
Loyalty program219,636 203,791 219,636 203,791 
Computer software156,337 143,550 597,164 518,971 
Developing software117,010 107,652 117,010 107,651 
Other assets54 25 1,369 1,315 
Total1,151,986 1,080,386 1,594,128 1,457,096 


a)Movement in Intangible assets other than goodwill:

Computer
software and others
Net		Developing
software		Airport
slots		Loyalty
program (1)		Total
ThUS$ThUS$ThUS$ThUS$ThUS$
Opening balance as of January 1, 2022136,262 104,874 587,214 190,542 1,018,892 
Additions47 66,820 — — 66,867 
Withdrawals(2,947)(245)— — (3,192)
Transfer software and others61,212 (63,658)— — (2,446)
Foreign exchange3,359 (139)38,154 13,249 54,623 
Amortization(54,358)— — — (54,358)
Closing balance as of December 31, 2022 143,575 107,652 625,368 203,791 1,080,386 
Opening balance as of January 1, 2023143,575 107,652 625,368 203,791 1,080,386 
Additions298 78,846 — — 79,144 
Transfer software and others69,210 (69,928)— — (718)
Foreign exchange2,612 440 33,581 15,845 52,478 
Amortization(59,304)— — — (59,304)
Closing balance as of December 31, 2023 156,391 117,010 658,949 219,636 1,151,986 
The amortization of each period is recognized in the consolidated income statement within administrative expenses.
The cumulative amortization of computer software and others as of December 31, 2023 amounts to ThUS$442,142 (ThUS$414,614 as of December 31, 2022).

b)     Impairment Test Intangible Assets with an indefinite useful life

As of December 31, 2023, the Company maintains only the CGU “Air Transport”.

The CGU “Air transport” considers the 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, Africa and Oceania.


52
As of December 31, 2023, in accordance with the accounting policy, the Company performed the annual impairment test.

The recoverable amount of the CGU was determined based on calculations of the value in use. These calculations use projections of 5 years of cash flows after taxes from the financial budgets approved by management. Cash flows beyond the budgeted period are extrapolated using growth rates and estimated average volumes, which do not exceed long-term average growth rates.

Management’s cash flow projections included significant judgements and assumptions related to annual revenue growth rates, discount rate, inflation rates, the exchange rate and the price of fuel. The annual revenue growth rate is based on past performance and management’s expectations of market development in each of the countries in which it operates. The discount rates used for the CGU "Air transport" are determined in US dollars, after taxes, and reflect specific risks related to the relevant countries of each of the operations. Inflation rates and exchange rates are based on the data available from the countries and the information provided by the Central Banks of the various countries where it operates, and the price of fuel is determined based on estimated levels of production, the competitive environment of the market in which they operate and their commercial strategy.

The recoverable values were determined using the following assumptions:

CGU
Air transport
Annual growth rate (Terminal)%0.0 – 4.3
Exchange rateR$/US$5.28 – 5.57
Discount rate based on the Weighted Average Cost of Capital (WACC)%8.7 – 10.7
Fuel PriceUS$/barrel100


The result of the impairment test, which includes a sensitivity analysis of its main variables, showed that the recoverable amount exceeded the book value of the cash-generating unit, and therefore no impairment was identified.

The CGU is sensitive to annual growth rates, discounts and exchange rates and fuel price. The sensitivity analysis included the individual impact of changes in critical estimates in determining recoverable amounts, namely:
Increase
WACC
Maximum		Decrease rate
Terminal growth
Minimal		Increase
fuel price
Maximum
US$/barrel
%%
Air Transportation CGU10.7 0 100 

In none of the above scenarios an impairment of the cash-generating unit was identified.

53


NOTE 16 - PROPERTY, PLANT AND EQUIPMENT

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

Gross Book ValueAccumulated depreciationNet Book Value
As of
December 31, 2023		As of
December 31, 2022		As of
December 31, 2023		As of
December 31, 2022		As of
December 31, 2023		As of
December 31, 2022
ThUS$ThUS$ThUS$ThUS$ThUS$ThUS$
a) Property, plant and equipment
Construction in progress (1)258,246 388,810 — — 258,246 388,810 
Land44,244 44,349 — — 44,244 44,349 
Buildings129,036 124,507 (61,478)(55,511)67,558 68,996 
Plant and equipment10,738,500 11,135,425 (4,508,356)(4,836,926)6,230,144 6,298,499 
Own aircraft (3)9,856,365 10,427,950 (4,259,729)(4,619,279)5,596,636 5,808,671 
Other (2)882,135 707,475 (248,627)(217,647)633,508 489,828 
Machinery29,092 27,090 (27,716)(25,479)1,376 1,611 
Information technology equipment163,382 153,355 (146,040)(136,746)17,342 16,609 
Fixed installations and accessories186,179 155,351 (131,769)(118,279)54,410 37,072 
Motor vehicles49,560 51,504 (44,385)(46,343)5,175 5,161 
Leasehold improvements266,631 202,753 (53,201)(42,726)213,430 160,027 
Subtotal Properties, plant and equipment11,864,870 12,283,144 (4,972,945)(5,262,010)6,891,925 7,021,134 
b) Right of use
Aircraft (3)5,388,147 4,391,690 (3,243,065)(3,064,869)2,145,082 1,326,821 
Other assets248,614 246,078 (194,491)(182,372)54,123 63,706 
Subtotal Right of use5,636,761 4,637,768 (3,437,556)(3,247,241)2,199,205 1,390,527 
Total17,501,631 16,920,912 (8,410,501)(8,509,251)9,091,130 8,411,661 

(1) As of December 31, 2023, includes advances paid to aircraft manufacturers for ThUS$ 242,069 (ThUS$ 357,979 as of December 31, 2022).
(2)     Consider mainly rotables and tools.
(3) There were reclassified to Non-current assets or groups of assets for disposal as held for sale the following aircrafts: As of December 31, 2023, one Boeing B767 and six Airbus A320, as of December 31, 2022, six Airbus A320 and twenty-eight Airbus A319 (see Note 13). As of December 31, 2021, includes advances paid to aircraft manufacturers for ThUS$ 377,590.


54
(a)        Movement in the different categories of Property, plant and equipment:

Construction
in progress 		Land Buildings
net 		Plant and
equipment
net 		Information
technology
equipment
net 		Fixed
installations
& accessories
net 		Motor
vehicles
net 		Leasehold
improvements
net 		Property,
Plant and
equipment
net
ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ ThUS$
Opening balance as of January 1, 2022473,797 43,276 60,451 6,568,717 16,836 38,741 325 132,975 7,335,118 
Additions16,332 — — 843,808 6,426 113 258 27,160 894,097 
Disposals— — — (4,140)— (264)(3)— (4,407)
Retirements(75)— (2)(42,055)(24)(836)— (313)(43,305)
Depreciation expenses— — (3,285)(669,059)(5,662)(7,914)(55)(13,071)(699,046)
Foreign exchange(1,282)1,073 918 11,527 (84)2,365 (28)7,593 22,082 
Other increases (decreases) (*)(99,962)— 10,914 (403,950)(883)4,867 (74)5,683 (483,405)
Changes, total(84,987)1,073 8,545 (263,869)(227)(1,669)98 27,052 (313,984)
Closing balance as of December 31, 2022 388,810 44,349 68,996 6,304,848 16,609 37,072 423 160,027 7,021,134 
Opening balance as of January 1, 2023388,810 44,349 68,996 6,304,848 16,609 37,072 423 160,027 7,021,134 
Additions8,835 — — 870,640 5,794 4,246 — 48,866 938,381 
Disposals— — — (2,701)(1)— (16)— (2,718)
Retirements(83)— — (87,652)(12)(2)— — (87,749)
Depreciation expenses— — (4,104)(716,590)(5,918)(8,789)(68)(10,185)(745,654)
Foreign exchange726 1,445 1,505 23,845 536 1,276 12 11,497 40,842 
Other increases (decreases) (*)(140,042)(1,550)1,161 (156,046)334 20,607 — 3,225 (272,311)
Changes, total(130,564)(105)(1,438)(68,504)733 17,338 (72)53,403 (129,209)
Closing balance as of December 31, 2023 258,246 44,244 67,558 6,236,344 17,342 54,410 351 213,430 6,891,925 

(*) This Amount included the following aircrafts reclassified to Non-current assets or groups of assets for disposal as held for sale: As of December 31, 2023, one Boeing B767 ThUS$ (21,578) and six Airbus A320 ThUS$ (36,326)). As of December 31, 2022, six Airbus A320 ThUS$ (29,328) and twenty-eight Airbus A319 ThUS$ (373,410).

55
(b)    Right of use assets:

Aircraft Others Net right
of use
assets
ThUS$ ThUS$ ThUS$
Opening balance as of January 1, 20222,101,742 53,007 2,154,749 
Additions372,571 13,087 385,658 
Depreciation expense(249,802)(16,368)(266,170)
Cumulative translate adjustment919 1,392 2,311 
Other increases (decreases) (***)(898,609)12,588 (886,021)
Total changes(774,921)10,699 (764,222)
Closing balance as of December 31, 2022 1,326,821 63,706 1,390,527 
Opening balance as of January 1, 20231,326,821 63,706 1,390,527 
Additions1,013,314 2,988 1,016,302 
Depreciation expense(178,570)(14,816)(193,386)
Cumulative translate adjustment56 3,351 3,407 
Other increases (decreases) (16,539)(1,106)(17,645)
Total changes818,261 (9,583)808,678 
Closing balance as of December 31, 2023 2,145,082 54,123 2,199,205 

(*) Considers the renegotiation of 115 aircraft (1 Airbus A319, 39 Airbus A320, 14 Airbus A320neo, 30 Airbus A321, 1 Boeing 767, 6 Boeing 777 and 24 Boeing 787 Dreamliner).

(c)    Fleet composition
Aircraft included
in Property,
plant and equipment		Aircraft included
as Rights
of use assets		Total fleet
AircraftModelAs of
December 31, 2023		As of
December 31, 2022		As of
December 31, 2023		As of
December 31, 2022		As of
December 31, 2023		As of
December 31, 2022
Boeing 767300ER11(3)15——1115
Boeing 767300F16(2) (3)13(2)111714
Boeing 777300ER44661010
Boeing 787844661010
Boeing 78792224192621
Airbus A3191001112(2)111213
Airbus A32020083(2)88(2)4640(1)129128
Airbus A320NEO1123152416
Airbus A321200191930304949
Airbus A321NEO——7—7—
Total151158144118295276


(1) Include one aircraft with a short-term lease, which was excluded from the right of use.
(2) Some aircraft of these fleets were reclassified to non-current assets or groups of assets for disposal as held for sale, (see Note 13).
(3) Considers the conversions from Boeing 767-300ER to Boeing 767-300F Aircraft.











56


(d)    Method used for the depreciation of Property, plant and equipment:

Useful life (years)
Depreciation methodminimummaximum
BuildingsStraight line without residual value2050
Plant and equipmentStraight line with residual value of 20% in the short-haul fleet and 36% in the long-haul fleet. (*)530
Information technology equipmentStraight line without residual value510
Fixed installations and accessoriesStraight line without residual value1010
Motor vehicleStraight line without residual value1010
Leasehold improvementsStraight line without residual value58
Assets for rights of useStraight line without residual value125

(*) Except in the case of Boeing 767-300ER, Airbus A320 Family and Boeing 767-300F fleets which consider a lower residual value, due to the extension of their useful life to 22, 25 and 30 years respectively. Additionally, certain technical components are depreciated based on cycles and hours flown.


(e)     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
December 31, 2023		As of
December 31, 2022
Guarantee
agent (1)		Creditor
company		Committed
Assets		FleetExisting
Debt		Book
Value		Existing
Debt		Book
Value
ThUS$ThUS$ThUS$ThUS$
Wilmington Trust CompanyMUFGAircraft and enginesAirbus A3192,703 12,326 4,554 13,205 
Airbus A32017,441 151,873 33,154 203,788 
Boeing 76720,427 143,281 35,043 164,448 
Boeing 777132,585 144,186 141,605 144,065 
Credit AgricoleCredit AgricoleAircraft and enginesAirbus A3193,413 3,752 3,518 5,311 
Airbus A320190,001 142,075 195,864 161,397 
Airbus A3216,007 4,393 6,192 4,827 
Boeing 7678,849 23,018 9,121 23,323 
Boeing 78758,499 38,971 60,305 34,077 
Bank Of UtahBNP ParibasAircraft and enginesBoeing 787171,704 208,601 184,199 221,311 
Total direct guarantee611,629 872,476 673,555 975,752 

(1) For syndicated loans, given their own characteristics, the guarantee agent is the representative of the creditors.

The amounts of the current debts are presented at their nominal value. The net book values correspond to the assets granted as collateral.

Additionally, there are indirect guarantees associated with assets booked within Property, Plant and Equipment whose total debt as of December 31, 2023, amounts to ThUS$ 898,166 (ThUS$ 1,037,122 as of December 31, 2022). The book value of the assets with indirect guarantees as of December 31, 2023, amounts to ThUS$ 1,925,069 (ThUS$ 2,306,233 as of December 31, 2022).


57
As of December 31, 2023, the Company keeps valid letters of credit related to right of use assets according to the following detail:

Creditor GuaranteeDebtorTypeValue
ThUS$		Release
date
GE Capital Aviation Services Ltd.LATAM Airlines Group S.A.Three letters of credit5,544 Dec 6, 2024
Merlin Aviation Leasing (Ireland) 18 Limited RB Comercial Properties 49Tam Linhas Aéreas S.A.Two letters of credit3,852 Mar 11, 2024
Empreendimentos Imobiliarios LTDATam Linhas Aéreas S.A.One letter of credit25,820 Apr 29, 2024
35,216 

(ii)    Commitments and others

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

As of
December 31, 2023		As of
December 31, 2022
ThUS$ThUS$
Gross book value of fully depreciated property, plant and equipment still in use288,454 266,896 
Commitments for the acquisition of aircraft (*)15,700,000 13,100,000 

(*) According to the manufacturer’s price list.

Aircraft purchase commitments:
Year of delivery
Manufacturer2024202520262027-2030Total
Airbus S.A.S.
A320neo Family31196588
The Boeing Company
Boeing 787-9---55
Total31197093

As of December 31, 2023, as a result of the different aircraft purchase contracts signed with Airbus S.A.S., 88 Airbus aircraft of the A320 family remain to be received with deliveries between 2024 and 2030. The approximate amount, according to manufacturer list prices, is ThUS$13,800,000.

As of December 31, 2023, as a result of the different aircraft purchase contracts signed with The Boeing Company, 5 Boeing aircraft of the 787 Dreamliner remain to be received with deliveries between 2027 and 2028. The approximate amount, according to manufacturer list prices, is ThUS$1,900,000.


Aircraft operational lease commitments:

As of December 31, 2023, as a result of the different aircraft operating lease contracts signed with AerCap Holdings N.V., 4 Airbus aircraft of the Airbus A320neo family with delivery between 2024 and 4 Boeing 787 Dreamliner aircraft with delivery dates within 2025 remain to be received.

As of December 31, 2023, as a result of the different aircraft operating lease contracts signed with Aergo, 1 Boeing 787 Dreamliner aircraft, with delivery dates within 2024, remain to be received.






58
As of December 31, 2023, as a result of the different aircraft operating lease contracts signed with Air Lease Corporative , 1 Airbus aircraft of the A320neo family with delivery dates within 2024 remain to be received.

As of December 31, 2023, as a result of the different aircraft operating lease contracts signed with Avolon Aerospace Leasing Limited, 2 Airbus aircraft of the A320neo family with delivery date within 2024 remain to be received.

As of December 31, 2023, as a result of the different aircraft operating lease contracts signed with Air Lease Corporation, 5 Airbus A321XLR family aircraft with delivery dates between 2025 and 2026 remain to be received.


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

For the year ended
At December 31,
20232022
Average rate of capitalization of capitalized interest costs%10.66 7.12 
Costs of capitalized interestThUS$10,136 10,575 



NOTE 17 - CURRENT AND DEFERRED TAXES

In the year ended December 31, 2023, the income tax provision was calculated and recorded, applying the semi-integrated tax system and a rate of 27%, based on the provisions of the Law. No. 21,210, published in the Official Gazette of the Republic of Chile, dated February 24, 2020, which updates the Tax Legislation.
The net result for deferred tax corresponds to the variation of the period, of the assets and liabilities for deferred taxes generated by temporary differences and tax losses.
For the permanent differences that give rise to a book value of 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 have no effect on income tax expense.

(a)Current taxes
(a.1)    The composition of the current tax assets is the following:
Current assetsNon-current assetsTotal assets
As of
December 31, 2023		As of
December 31, 2022		As of
December 31, 2023		As of
December 31, 2022		As of
December 31, 2023		As of
December 31, 2022
ThUS$ThUS$ThUS$ThUS$ThUS$ThUS$
Provisional monthly payments (advances)18,982 18,559 — — 18,982 18,559 
Other recoverable credits28,048 14,474 — — 28,048 14,474 
Total current tax assets47,030 33,033 — — 47,030 33,033 





59
(a.2)    The composition of the current tax liabilities are as follows:
Current liabilitiesNon-current liabilitiesTotal liabilities
As of
December 31, 2023		As of
December 31, 2022		As of
December 31, 2023		As of
December 31, 2022		As of
December 31, 2023		As of
December 31, 2022
ThUS$ThUS$ThUS$ThUS$ThUS$ThUS$
Income tax provision2,371 1,026 — — 2,371 1,026 
Total current tax liabilities2,371 1,026 — — 2,371 1,026 



(b)    Deferred taxes
The balances of deferred tax are the following:
Assets Liabilities
ConceptAs of
December 31, 2023		As of
December 31, 2022		As of
December 31, 2023		As of
December 31, 2022
ThUS$ ThUS$ ThUS$ ThUS$
Properties, Plants and equipment(941,136)(1,006,814)70,745 81,326 
Assets by right of use(585,957)(367,112)54 70 
Lease Liabilities792,781 586,878 (74)(115)
Amortization(112,002)(88,172)10 10 
Provisions222,409 9,133 81,091 69,519 
Revaluation of financial instruments(889)2,438 — — 
Tax losses613,264 852,654 (86,320)(94,005)
Intangibles— — 300,359 270,512 
Other16,312 16,910 16,494 17,308 
Total4,782 5,915 382,359 344,625 
The balance of deferred tax assets and liabilities are composed primarily of temporary differences to be reversed in the long term.





















60
Movements of Deferred tax assets and liabilities
(b.1)      From January 1 to December 31, 2022
Opening
balance
Assets/(liabilities) 		Recognized in
consolidated
income 		Recognized in
comprehensive
income 		Exchange
rate
variation		Ending
balance
Asset (liability)
ThUS$ ThUS$ ThUS$ ThUS$ThUS$
Property, plant and equipment(1,208,693)120,553 — — (1,088,140)
Assets for right of use(572,727)205,545 — — (367,182)
Lease Liabilities773,129 (186,136)— — 586,993 
Amortization(44,615)(43,567)— — (88,182)
Provisions552,527 (613,480)567 — (60,386)
Revaluation of financial instruments(16,575)19,248 (235)— 2,438 
Tax losses (*)445,662 500,997 — — 946,659 
Intangibles(254,155)2,114 — (18,471)(270,512)
Others(274)(124)— — (398)
Total(325,721)5,150 332 (18,471)(338,710)



(b.2)     From January 1 to December 31, 2023

Opening
balance
Assets/(liabilities) 		Recognized in
consolidated
income 		Recognized in
comprehensive
income 		Exchange
rate
variation 		Ending
balance
Asset (liability)
ThUS$ ThUS$ ThUS$ ThUS$ ThUS$
Property, plant and equipment(1,088,140)76,259 — — (1,011,881)
Assets for right of use(367,182)(218,829)— — (586,011)
Lease Liabilities586,993 205,862 — — 792,855 
Amortization(88,182)(23,830)— — (112,012)
Provisions(60,386)200,953 751 — 141,318 
Revaluation of financial instruments2,438 (6,931)3,604 — (889)
Tax losses (*)946,659 (247,075)— — 699,584 
Intangibles(270,512)(6,207)— (23,640)(300,359)
Others(398)216 — — (182)
Total(338,710)(19,582)4,355 (23,640)(377,577)

(*) Unrecognized deferred tax assets:

Deferred tax assets are recognized to the extent that it is probable that sufficient taxable profits will be generated in the future. In total the Company has not recognized deferred tax assets for ThUS$ 3,572,528 at December 31, 2023 (ThUS$ 3,651,023 as of December 31, 2022) which include deferred tax assets related to negative tax results of ThUS$ 12,206,634 at December 31, 2023 (ThUS$ 14,930,487 at December 31, 2022).

As of December 31, 2022, the Management of the subsidiary Lan Cargo S.A., taking into account financial projections for future years, company derecognized DTA in the amount of ThUS$ 6.173 because it is not probable that future taxable profits would be generated in the future.







61
(Expenses) / Income from deferred taxes and income tax:
For the year ended at December 31,
20232022
ThUS$ ThUS$
Income tax (expense)/benefit
Current tax (expense) benefit(12,659)(14,064)
Adjustments to the current tax of the previous year(193)— 
Total current tax (expense) benefit(12,852)(14,064)
(Expense)/benefit for deferred tax recognition for tax losses (*)17,492 — 
Deferred income for relative taxes to the creation and reversal of temporary differences(19,582)5,150 
Total deferred income tax(2,090)5,150 
Income tax (expense)/benefit(14,942)(8,914)



Income tax (expense) / Income benefit:
For the year ended at December 31,
20232022
ThUS$ ThUS$
Current tax (expense) benefit, foreign(10,410)19,573 
Current tax (expense) benefit, domestic(2,442)(33,637)
Total current tax (expense) benefit(12,852)(14,064)
Foreign Deferred tax (expense) benefit, for tax losses compensation (*)17,492 — 
Deferred tax (expense) benefit, foreign(10,780)(532)
Deferred tax (expense) benefit, domestic(8,802)5,682 
Total deferred tax (expense)benefit(2,090)5,150 
Income tax (expense)/benefit(14,942)(8,914)





(*) As a result of an agreement reached with the Brazilian tax authority TAM Linhas Aereas S.A. was authorized to use part of its available tax losses to pay some tax contingencies. As the company does not have recognized deferred tax asset for those tax losses, it was recognized as income to write off those tax contingencies.













62
Income before tax from the Chilean legal tax rate (27% as of December 31, 2023 and 2022)

For the year ended
At December 31,		For the year ended
At December 31,
2023202220232022
ThUS$ ThUS$ % %
Income tax benefit/(expense) using the legal tax rate(161,053)(363,434)-27.00 -27.00 
Tax effect by change in tax rate— 9,016 — 0.67 
Tax effect of rates in other jurisdictions(50,042)20,398 -8.39 1.52 
Tax effect of non-taxable income25,459 1,201,618 4.27 89.27 
Tax effect of disallowable expenses(23,272)(33,855)-3.90 -2.52 
Other increases (decreases):
Derecognition of deferred tax liabilities for early termination of aircraft financing53,162 90,823 8.91 6.75 
Derecognition of deferred tax assets not recoverable— (6,173)— -0.46 
Deferred tax asset not recognized157,089 (990,095)26.34 -73.56 
Other increases (decreases)(16,285)62,788 -2.73 4.66 
Total adjustments to tax expense using the legal rate146,111 354,520 24.50 26.33 
Income tax benefit/(expense) using the effective rate(14,942)(8,914)-2.50 -0.67 


Deferred taxes related to items charged to equity:
For the year ended
At December 31,
20232022
ThUS$ThUS$
Aggregate deferred taxation of components of other comprehensive income4,355 332 


63

NOTE 18 - OTHER FINANCIAL LIABILITIES

The composition of other financial liabilities is as follows:
As of
December 31, 2023		As of
December 31, 2022
ThUS$ThUS$
Current
(a) Interest bearing loans292,982 629,106 
(b) Lease Liability301,537 173,735 
(c) Hedge derivatives1,544 — 
Total current596,063 802,841 
Non-current
(a) Interest bearing loans3,675,212 3,936,320 
(b) Lease Liability2,666,457 2,042,719 
Total non-current6,341,669 5,979,039 

(a)    Interest bearing loans

Obligations with credit institutions and debt instruments:
As of
December 31, 2023		As of
December 31, 2022
ThUS$ThUS$
Current
Bank loans (2)53,141 353,284 
Guaranteed obligations 28,697 17,887 
Other guaranteed obligations (1)(2)67,005 66,239 
Subtotal bank loans148,843 437,410 
Obligation with the public (2)34,731 33,383 
Financial leases 109,304 156,285 
Other loans104 2,028 
Total current 292,982 629,106 
Non-current
Bank loans (2)976,293 1,032,711 
Guaranteed obligations 275,225 307,174 
Other guaranteed obligations (1)363,345 408,065 
Subtotal bank loans1,614,863 1,747,950 
Obligation with the public (2)1,268,107 1,256,416 
Financial leases 792,242 931,954 
Total non-current 3,675,212 3,936,320 
Total obligations with financial institutions 3,968,194 4,565,426 


64
(1) The committed "Revolving Credit Facility (RCF)" is guaranteed by collateral composed of aircraft, engines and spare parts, which was fully drawn until November 3, 2022. Once emerged from Chapter 11, the line was fully paid and of December 31, 2023 and December 31, 2022, it is available to be used.

(2) On March 14, 2022, a new consolidated and modified text of the Existing DIP Credit Agreement (the “New Consolidated and Modified DIP Credit Agreement”) was submitted to the Court for its approval. The New Consolidated and Amended DIP Credit Agreement (i) fully refinanced and replaced the existing Tranches A, B and C in the Existing DIP Credit Agreement; (ii) contemplated a maturity date in accordance with the calendar that the Debtors anticipated to emerge from the Chapter 11 Procedure; and (iii) included certain reductions in fees and interest compared to the Existing DIP Credit Agreement and the Recast and Amended DIP Initial Financing Proposal. The obligations under the DIP were secured by assets owned by LATAM and certain of its affiliates, including, but not limited to, shares, certain engines and spare parts.

On April 8, 2022, a consolidated and modified text was signed (the “Recast and Modified DIP Credit Agreement”) of the Original DIP Credit Agreement, which modified and consolidated said agreement and repaid the obligations pending payment under it. (that is, under its Tranches A, B and C). The total amount of the Consolidated and Modified DIP Credit Agreement was MUS$3,700. The Consolidated and Amended DIP Credit Agreement (i) included certain reductions in fees and interest compared to the Existing DIP Credit Agreement; and (ii) contemplated an expiration date in accordance with the calendar that LATAM anticipated to emerge from the Chapter 11 Procedure. Regarding the latter, the scheduled expiration date of the Consolidated and Modified DIP Credit Agreement was August 8, 2022, subject to to possible extensions that, in certain cases, had a deadline of November 30, 2022.

Likewise, on April 8, 2022, the initial disbursement took place under the Consolidated and Modified DIP Credit Agreement for the amount of MUS$2,750. On April 28, 2022, an amendment to said contract was signed, extending the expiration date from August 8, 2022 to October 14, 2022.

On October 12, 2022, said Consolidated and Modified DIP Credit Agreement was repaid in its entirety with the DIP-to-Exit financing, which contemplated bridge financing for senior secured bonds maturing in 2027 for MUS$750, MUS$750 in other bridge financing for senior secured notes due 2029, a MUS$750 Term Financing, a financing called Junior DIP, for a total of MUS$1,146 , and, lastly, a US Revolving Credit Facility MUS$500, which is not drawn. The DIP-to-exit financing was collateralized by assets owned by LATAM and certain of its affiliates. Of these, the Junior DIP contemplated a subordinate priority to the rest of the credits.

On October 18, 2022, the Bridge Loans were partially repaid by: i) a bond issue exempt from registration under U.S. Securities Act of 1933, as amended (the “Securities Act”), pursuant to Rule 144A and Regulation S, both under the Securities Act, due 2027 (the “5-Year Bonds”), by a total principal amount of MUS$450 and ii) a bond issue exempt from registration under the Securities Law pursuant to Rule 144A and Regulation S, both under the Securities Law, due 2029 (the “Bonds to 7 Years”), for a total principal amount of MUS$700.

In the context of the exit of the Company from the Chapter 11 Procedure on November 3, 2022, the Bridge Loans were repaid with additional: MUS$350 corresponding to an incremental loan of Term Loan B.

On November 3, 2022, the company and all of its subsidiaries successfully emerged from Chapter 11.



Balances by currency of interest bearing loans are as follows:
As of
December 31, 2023		As of
December 31, 2022
CurrencyThUS$ThUS$
Brazilian real— 314,322 
Chilean peso (U.F.)160,730 157,288 
US Dollar3,807,464 4,093,816 
Total3,968,194 4,565,426 


65
Interest-bearing loans due in installments to December 31, 2023
Debtor: LATAM Airlines Group S.A. and Subsidiaries, Tax No. 89.862.200-2, Chile.
Nominal valuesAccounting values
Tax No.CreditorCreditor
country		CurrencyUp to
90
days		More than
90 days
to one
year		More than
one to
three
years		More than
three to
five
years		More than
five
years		Total
nominal
value		Up to
90
days		More
than
90 days
to one
year		More
than
one to
three
years		More than
three to
five
years		More than
five
years		Total
accounting
value		AmortizationAnnual
Effective
rate		Nominal
rate
ThUS$ThUS$ThUS$ThUS$ThUS$ThUS$ThUS$ThUS$ThUS$ThUS$ThUS$ThUS$%%
Bank loans
0-EGOLDMAN SACHSU.S.A.US$2,750 8,250 22,000 1,056,000 — 1,089,000 44,891 8,250 22,000 954,293 — 1,029,434 Quarterly20.31 15.04 
Obligations with the public
97.036.000-KSANTANDERChileUF— — — — 160,214 160,214 — 516 — — 160,214 160,730 At Expiration2.00 2.00 
97.036.000-KSANTANDERChileUS$— — — — 3 3 — — — — 3 3 At Expiration1.00 1.00 
0-EWILMINGTON TRUST COMPANYU.S.A.US$— — — 450,000 700,000 1,150,000 — 34,215 — 434,204 673,686 1,142,105 At Expiration15.00 13.38 
Guaranteed obligations
0-EBNP PARIBASU.S.A.US$2,912 9,168 26,772 28,945 103,907 171,704 3,936 9,168 26,121 28,553 103,541 171,319 Quarterly6.98 6.98 
0-EWILMINGTON TRUST COMPANYU.S.A.US$3,854 11,693 32,356 34,083 50,599 132,585 3,900 11,693 32,356 34,083 50,571 132,603 Quarterly/Monthly8.76 8.76 
Other guaranteed obligations
0-ECITIBANKU.S.A.US$— — — — — — 33 — — — — 33 Quarterly1.00 1.00 
0-EJP MORGAN CHASEU.S.A.US$— — — — — — 17 — — — — 17 Quarterly0.63 0.63 
0-ECREDIT AGRICOLEFranceUS$— 14,667 29,333 222,768 — 266,768 4,241 14,667 26,154 221,708 — 266,770 At Expiration9.43 9.43 
0-EMUFGU.S.A.US$11,768 35,960 16,374 — — 64,102 11,805 35,960 16,374 — — 64,139 Quarterly7.11 7.11 
0-EEXIM BANKU.S.A.US$— — 40,662 42,122 16,325 99,109 282 — 40,662 42,122 16,325 99,391 Quarterly2.29 2.05 
Financial leases
0-ENATIXISFranceUS$6,516 19,779 54,443 56,972 77,647 215,357 8,559 19,779 54,117 56,754 77,555 216,764 Quarterly7.58 7.58 
0-EUS BANKU.S.A.US$17,374 49,311 17,492 — — 84,177 17,905 49,311 15,731 — — 82,947 Quarterly4.41 3.16 
0-EEXIM BANKU.S.A.US$— — 197,499 141,169 74,404 413,072 1,933 — 195,741 141,169 74,404 413,247 Quarterly4.13 3.31 
0-EBANK OF UTAHU.S.A.US$2,575 7,202 23,637 37,304 101,864 172,582 2,575 7,202 23,637 37,304 101,864 172,582 Monthly10.71 10.71 
Others loans
0-EVarious (*)US$104 — — — — 104 104 — — — — 104 At Expiration— — 
Total47,853 156,030 460,568 2,069,363 1,284,963 4,018,777 100,181 190,761 452,893 1,950,190 1,258,163 3,952,188 
(*)    Obligation to creditors for executed letters of credit.








66
Interest-bearing loans due in installments to December 31, 2023
Debtor: TAM S.A. and Subsidiaries, Tax No. 02.012.862/0001-60, Brazil
Nominal valuesAccounting valuesAnnual
Up to
90
days		More than
90 days
to one
year		More than
one to
three
years		More than
three to
five
years		More
than
five
years		Total
nominal
value		Up to
90
days		More than
90 days
to one
year		More than
one to
three
years		More than
three to
five
years		More
than
five
years		Total
accounting
value		Amortization
Tax No.Creditor
Country		CurrencyEffective
rate		Nominal
rate
ThUS$ThUS$ThUS$ThUS$ThUS$ThUS$ThUS$ThUS$ThUS$ThUS$ThUS$ThUS$%%
Financial lease
0-ENATIXISFranceUS$510 1,530 4,080 9,886 — 16,006 510 1,530 4,080 9,886 — 16,006 Quarterly— — 
Total510 1,530 4,080 9,886 — 16,006 510 1,530 4,080 9,886 — 16,006 
Total consolidated48,363 157,560 464,648 2,079,249 1,284,963 4,034,783 100,691 192,291 456,973 1,960,076 1,258,163 3,968,194 

















67
Interest-bearing loans due in installments to December 31, 2022
Debtor: LATAM Airlines Group S.A. and Subsidiaries, Tax No. 89.862.200-2, Chile.

Nominal valuesAccounting valuesAmortizationAnnual
Tax No.CreditorCreditor
country		CurrencyUp to
90
days		More than
90 days
to one
year		More than
one to
three
years		More than
three to
five
years		More
than
five
years		Total
nominal
value		Up to
90
days		More than
90 days
to one
year		More than
one to
three
years		More than
three to
five
years		More
than
five
years		Total
accounting
value		Effective
rate		Nominal
rate
ThUS$ThUS$ThUS$ThUS$ThUS$ThUS$ThUS$ThUS$ThUS$ThUS$ThUS$ThUS$%%
Bank loans
0-ESANTANDERSpainUS$— — 70,951 — — 70,951 173 — 70,951 — — 71,124 Quarterly7.26 7.26 
0-EGOLDMANSACHSU.S.A.US$2,750 8,250 22,000 1,067,000 — 1,100,000 30,539 8,250 22,000 939,760 — 1,000,549 Quarterly18.46 13.38 
Obligations with the public
97.036.000- KSANTANDERChileUF— — — — 156,783 156,783 505 — — — 156,783 157,288 At Expiration2.00 2.00 
97.036.000- KSANTANDERChileUS$— — — — 3 3 — — — — 3 3 At Expiration1.00 1.00 
0-EWILMINGTON TRUST COMPANYU.S.A.US$— — — 450,000 700,000 1,150,000 — 32,878 — 430,290 669,340 1,132,508 At Expiration15.00 13.38 
Guaranteed obligations
0-EBNP PARIBASU.S.A.US$1,761 6,907 22,890 26,035 126,605 184,198 2,637 6,907 22,212 25,627 126,048 183,431 Quarterly5.76 5.76 
0-EWILMINGTON TRUST COMPANYU.S.A.US$2,208 6,110 32,620 33,210 67,457 141,605 2,233 6,110 32,620 33,210 67,457 141,630 Quarterly/Monthly8.20 8.20 
Other guaranteed obligations
0-ECREDIT AGRICOLEFranceUS$— 14,667 29,333 231,000 — 275,000 3,837 14,667 26,153 228,880 — 273,537 Quarterly8.24 8.24 
0-EMUFGU.S.A.US$11,345 34,624 66,419 — — 112,388 11,404 34,624 66,419 — — 112,447 Quarterly6.23 6.23 
0-ECITIBANKU.S.A.US$— — — — — — 1,470 — — — — 1,470 At Expiration1.00 1.00 
0-EEXIM BANKU.S.A.US$— — 17,737 36,431 32,444 86,612 237 — 17,738 36,431 32,444 86,850 Quarterly2.01 1.78 
Financial leases
0-ECITIBANKU.S.A.US$6,825 5,689 — — — 12,514 6,888 5,689 — — — 12,577 Quarterly6.19 5.47 
0-EBNP PARIBASU.S.A.US$6,596 20,048 1,521 — — 28,165 6,776 20,048 1,516 — — 28,340 Quarterly5.99 5.39 
0-ENATIXISFranceUS$6,419 19,341 53,207 55,696 104,475 239,138 8,545 19,341 52,881 55,478 103,905 240,150 Quarterly6.44 6.44 
0-EUS BANKU.S.A.US$16,984 51,532 84,177 — — 152,693 17,831 51,532 79,805 — — 149,168 Quarterly4.06 2.85 
0-EPK AIRFINANCEU.S.A.US$1,533 4,664 6,393 — — 12,590 1,579 4,664 6,393 — — 12,636 Quarterly5.97 5.97 
0-EEXIM BANKU.S.A.US$— — 113,668 180,260 152,581 446,509 1,923 — 112,666 178,672 151,236 444,497 Quarterly3.58 2.79 
0-EBANK OF UTAHU.S.A.US$2,321 6,568 20,990 30,557 121,801 182,237 2,321 6,568 20,990 30,557 121,801 182,237 Monthly10.45 10.45 
Other loan
0-EVarious (*)US$2,028 — — — — 2,028 2,028 — — — — 2,028 At Expiration— — 
Total60,770 178,400 541,906 2,110,189 1,462,149 4,353,414 100,926 211,278 532,344 1,958,905 1,429,017 4,232,470 
(*)    Obligation to creditors for executed letters of credit.




68
Interest-bearing loans due in installments to December 31, 2022
Debtor: TAM S.A. and Subsidiaries, Tax No. 02.012.862/0001-60, Brazil
Tax No.Creditor
Country		CurrencyNominal valuesAccounting valuesAmortizationAnnual
Up to
90
days		More than
90 days
to one
year		More than
one to
three
years		More than
three to
five
years		More
than
five
years		Total
nominal
value		Up to
90
days		More than
90 days
to one
year		More than
one to
three
years		More than
three to
five
years		More
than
five
years		Total
accounting
value		Effective
rate		Nominal
rate
ThUS$ThUS$ThUS$ThUS$ThUS$ThUS$ThUS$ThUS$ThUS$ThUS$ThUS$ThUS$%%
Bank loans
0-EMerril Lynch Credit Products LLCBrazilBRL304,549 — — — — 304,549 314,322 — — — — 314,322 Monthly3.95 3.95 
Financial lease
0-ENATIXISFranceUS$510 1,530 4,080 4,080 7,846 18,046 1,050 1,530 4,080 4,080 7,894 18,634 Semiannual/Quarterly7.23 7.23 
Total305,059 1,530 4,080 4,080 7,846 322,595 315,372 1,530 4,080 4,080 7,894 332,956 
Total consolidated365,829 179,930 545,986 2,114,269 1,469,995 4,676,009 416,298 212,808 536,424 1,962,985 1,436,911 4,565,426 

(*)    Obligation to creditors for executed letters of credit.

69
(b)    Lease Liability:

The movement of the lease liabilities corresponding to the period reported are as follow:

Aircraft Others Lease
Liability
Total
ThUS$ ThUS$ ThUS$
Opening balance as of January 1, 20222,883,661 76,977 2,960,638 
New contracts354,924 13,019 367,943 
Lease termination (19,606)— (19,606)
Renegotiations(76,233)(4,198)(80,431)
Exit effect of chapter 11 (*)(995,888)— (995,888)
Payments(154,823)(26,172)(180,995)
Accrued interest142,939 9,194 152,133 
Exchange differences— 2,279 2,279 
Cumulative translation adjustment(2)7,463 7,461 
Other increases (decreases)— 2,920 2,920 
Changes(748,689)4,505 (744,184)
Closing balance as of December 31, 2022 2,134,972 81,482 2,216,454 
Opening balance as of January 1, 20232,134,972 81,482 2,216,454 
New contracts943,178 2,976 946,154 
Lease termination(13,258)(1,812)(15,070)
Renegotiations(7,194)2,219 (4,975)
Payments(376,006)(23,277)(399,283)
Accrued interest212,500 9,633 222,133 
Exchange differences— 2,278 2,278 
Subsidiaries conversion difference6 297 303 
Changes759,226 (7,686)751,540 
Closing balance as of December 31, 2023 2,894,198 73,796 2,967,994 

(*) Corresponds to the effect of emergence from Chapter 11 ThUS$679,273,000 associated with claim settlement (Derecognition of assets for right of use for ThUS$639,728,000 (See Note 24 letter g (4)) and conversion of Notes for ThUS$39,545,000) and ThUS$316,615,000 due to IBR rate change.

The Company recognizes interest payments related to lease liabilities in the consolidated result under Finance costs (See Note 26(c)). The Average discount rates for calculation of lease liability are as follows.

 Discount rate
December 2023		Discount rate
December 2022
Aircraft9.10%8.80%
Others13.00%10.70%



















70

(c)     Hedge derivatives
Current liabilitiesNon-current liabilitiesTotal hedge derivatives
As of
December 31, 2023		As of
December 31, 2022		As of
December 31, 2023		As of
December 31, 2022		As of
December 31, 2023		As of
December 31, 2022
ThUS$ThUS$ThUS$ThUS$ThUS$ThUS$
Fair value of foreign currency derivatives1,544 — — — 1,544 — 
Total hedge derivatives1,544 — — — 1,544 — 

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
December 31, 2023		As of
December 31, 2022
ThUS$ThUS$
Interest rate option (1)— 8,816 
Fuel options (2)22,136 12,594 
Foreign currency derivative R$/BRL$ (3)(1,544)191 



(1)They cover significant variations in cash flows associated with the market risk implicit in increases in the SOFR interest rate for long-term loans originating from the acquisition of aircraft and bank loans. These contracts are recorded as cash flow hedge contracts.

(2)Hedge 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.

(3) Hedge significant variations in expected cash flows associated with the market risk implicit in changes in exchange rates, particularly the US$/BRL. These contracts are recorded as cash flow hedge contracts.

The Company only maintains cash flow hedges. In the case of fuel and currency hedges, the cash flows subject to said hedges will occur and will impact results in the next 12 months from the date of the consolidated statement of financial position. In the case of interest rate derivatives, the settlements will occur in the next 6 months and will remain in the balance until the date of arrival of the associated aircraft, date on which it will be part of the right-of-use asset and will begin to impact results on a monthly basis until the expiration of the respective lease
All hedging operations have been performed for highly probable transactions, except for fuel hedge. See Note 3.

See Note 24 (f) for reclassification to profit or loss for each hedging operation and Note 17 (b) for deferred taxes related.



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NOTE 19 - TRADE AND OTHER ACCOUNTS PAYABLES

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

As of
December 31, 2023		As of
December 31, 2022
ThUS$ThUS$
Current
 (a) Trade and other accounts payables
1,408,201 1,271,590 
 (b) Accrued liabilities
357,078 356,402 
Total trade and other accounts payables1,765,279 1,627,992 


(a)     Trade and other accounts payable:
As of
December 31, 2023		As of
December 31, 2022
ThUS$ThUS$
Trade creditors1,176,985 904,964 
Other accounts payable231,216 366,626 
Total1,408,201 1,271,590 


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

As of
December 31, 2023		As of
December 31, 2022
ThUS$ThUS$
Boarding Fees249,291 208,783 
Maintenance167,466 100,823 
Airport charges and overflight138,901 89,966 
Handling and ground handling133,114 130,482 
Suppliers technical purchases126,302 123,743 
Leases, maintenance and IT services100,842 83,751 
Other personnel expenses96,351 116,244 
Aircraft Fuel94,878 44,153 
Professional services and advisory63,756 134,191 
Services on board58,365 42,545 
Marketing51,035 37,928 
Air companies26,371 8,182 
Crew25,936 11,511 
Agencies sales commissions16,899 9,852 
Aircraft Insurance12,256 7,241 
Others46,438 122,195 
Total trade and other accounts payables1,408,201 1,271,590 


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(b)     Liabilities accrued:
As of
December 31, 2023		As of
December 31, 2022
ThUS$ThUS$
Aircraft and engine maintenance129,473 184,753 
Accrued personnel expenses97,733 81,857 
Accounts payable to personnel (1)114,769 81,508 
Others accrued liabilities15,103 8,284 
Total accrued liabilities357,078 356,402 

(1) Participation in profits and bonuses (Note 22 letter b).



NOTE 20 - OTHER PROVISIONS

Current liabilitiesNon-current liabilitiesTotal Liabilities
As of
December 31, 2023		As of
December 31, 2022		As of
December 31, 2023		As of
December 31, 2022		As of
December 31, 2023		As of
December 31, 2022
ThUS$ThUS$ThUS$ThUS$ThUS$ThUS$
Provision for contingencies (1)
Tax contingencies7,003 8,733 614,882 617,692 621,885 626,425 
Civil contingencies7,702 5,490 142,305 119,483 150,007 124,973 
Labor contingencies367 350 155,501 175,212 155,868 175,562 
Other— — 11,571 13,180 11,571 13,180 
Provision for European
Commission investigation (2)— — 2,477 2,397 2,477 2,397 
Total other provisions (3)15,072 14,573 926,736 927,964 941,808 942,537 

(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.
    Provisions are recognized in the consolidated income statement in administrative expenses or tax expenses, as appropriate.
The Company maintains other judicial processes, individually and cumulatively , do not have a significant impact on these financial statements

(2)    Provision made for proceedings brought by the European Commission for possible breaches of free competition in the freight market.
(3)    Total other provision as of December 31, 2023, and December 31, 2022, include the fair value of the contingencies arising at the time of the business combination with TAM S.A and subsidiaries,with a probability of loss under 50%, which are not recognized in the normal course of IFRS Accounting

73
Standards application and which only in the context of a business combination should be recognized under IFRS Accounting Standards.

Movement of provisions:
Legal
claims (1)		European
Commission
Investigation (1) 		Total
ThUS$ ThUS$ ThUS$
Opening balance as of January 1, 2022731,153 9,300 740,453 
Increase in provisions687,558 — 687,558 
Provision used(63,087)— (63,087)
Difference by subsidiaries conversion28,655 — 28,655 
Reversal of provision(427,979)(6,630)(434,609)
Exchange difference(16,160)(273)(16,433)
Closing balance as of December 31, 2022 940,140 2,397 942,537 
Opening balance as of January 1, 2023940,140 2,397 942,537 
Increase in provisions449,406 — 449,406 
Provision used(70,844)— (70,844)
Difference by subsidiaries conversion(69,563)— (69,563)
Reversal of provision(310,118)— (310,118)
Exchange difference310 80 390 
Closing balance as of December 31, 2023 939,331 2,477 941,808 

(1)See details of litigation and government investigations with a material impact in Note 30.    


NOTE 21 - OTHER NON-FINANCIAL LIABILITIES

Current liabilitiesNon-current liabilitiesTotal Liabilities
As of
December 31, 2023		As of
December 31, 2022		As of
December 31, 2023		As of
December 31, 2022		As of
December 31, 2023		As of
December 31, 2022
ThUS$ThUS$ThUS$ThUS$ThUS$ThUS$
Deferred revenue (1)(2)3,044,664 2,533,081 348,936 420,208 3,393,600 2,953,289 
Sales tax17,801 7,194 — — 17,801 7,194 
Retentions48,649 40,810 — — 48,649 40,810 
Other taxes6,892 12,045 — — 6,892 12,045 
Dividends payable 174,549 — — — 174,549 — 
Other sundry liabilities9,351 49,121 — — 9,351 49,121 
Total other non-financial liabilities3,301,906 2,642,251 348,936 420,208 3,650,842 3,062,459 










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Deferred Revenue Movement

Deferred revenue
Initial balance(1)
Recognition		Use Loyalty
program (Award and
 redeem) 		Expiration of
tickets 		Translation
Difference 		Others
provisions		Final
balance
ThUS$ThUS$ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ ThUS$
From January 1 to December 31, 2022 2,785,193 9,772,469 (9,077,188)(241,201)(314,027)4,585 23,458 2,953,289 
From January 1 to December 31, 2023 2,953,289 14,238,959 (13,505,496)17,680 (391,998)84,988 (3,822)3,393,600 

(1)The balance includes mainly, deferred revenue for services not provided as of December 31, 2023 and December 31, 2022 and for the frequent flyer LATAM Pass program.

LATAM Pass is LATAM's frequent flyer program that allows rewarding the preference and loyalty of its customers with multiple benefits and privileges, through the accumulation of miles or points that can be exchanged for tickets or for a varied range of products and services. Clients accumulate miles or points LATAM Pass every time they fly in LATAM and other airlines associated with the program, as well as by buying in stores or use the services of a vast network of companies that have agreements with the program around the world.

(2)As of December 31, 2023, Deferred Income includes Th US$40,500 related to the compensation from Delta Air Lines, Inc., which is recognized in the income statement based on the estimation of income differentials until the implementation of the strategic alliance.


NOTE 22 - EMPLOYEE BENEFITS

As of
December 31, 2023		As of
December 31, 2022
ThUS$ThUS$
Retirements payments57,785 45,076 
Resignation payments11,537 6,365 
Other obligations53,296 42,047 
Total liability for employee benefits122,618 93,488 

(a)    The movement in retirements, resignations and other obligations:

Opening
balance		Increase (decrease)
current service
provision 		Benefits
paid 		Actuarial
(gains)
losses 		Currency
translation 		Closing
balance
ThUS$ThUS$ ThUS$ ThUS$ ThUS$ ThUS$
From January 1 to December 31, 2022 56,233 53,254 (4,375)(9,935)(1,689)93,488 
From January 1 to December 31, 2023 93,488 58,436 (6,701)(21,198)(1,407)122,618 








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The main assumptions used in the calculation of the provision in Chile are presented below:

For the year ended
At December 31,
Assumptions20232022
Discount rate5.40 %5.37 %
Expected rate of salary increase3.00 %5.23 %
Rate of turnover5.02 %5.14 %
Mortality rateRV-2020RV-2014
Inflation rate2.99 %3.61 %
Retirement age of women6060
Retirement age of men6565

The discount rate is based on the bonds issued by the Central Bank of Chile with a maturity of 20 years. The RV-2020 and RV-2014 mortality tables correspond to those established by the Commission for the Financial Market of Chile. The inflation rates are based on the yield curves of the long term nominal and inflation adjusted bonds based on BCU and BCPs issued by the Central Bank of Chile.

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
December 31, 2023		As of
December 31, 2022
ThUS$ ThUS$
Discount rate
Change in the accrued liability an closing for increase in 100 b.p.(3,913)(3,308)
Change in the accrued liability an closing for decrease of 100 b.p.4,369 3,724 
Rate of wage growth
Change in the accrued liability an closing for increase in 100 b.p.4,133 3,520 
Change in the accrued liability an closing for decrease of 100 b.p.(3,811)(3,216)

(b)    The liability for short-term:
As of
December 31, 2023		As of
December 31, 2022
ThUS$ThUS$
Profit-sharing and bonuses (*) 114,769 81,508 

(*)        Accounts payables to employees (Note 19 letter b)

The participation in profits and bonuses related to an annual incentive plan for achievement of certain objectives.





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(c)    CIP (Corporate Incentive Plan)

With the aim of incentivizing the retention of talent among the executives of the Company and in response to the exit of the Chapter 11 Procedure, it was agreed to grant an extraordinary and exceptional incentive called Corporate Incentive Plan (hereinafter also "CIP"), which will be enforceable and paid subject to compliance with the terms, clauses and conditions approved at the Board meeting dated April 25, 2023. In summary, the CIP contemplates three categories oriented to three different groups or categories of employees, whether they are hired by the Company directly, or in other companies of the LATAM group. These categories are as follows: Non-Executive Employees; Executives Not part of the Global Executive Meeting o “GEM”; and GEM Executives. Employees in each of these groups are only eligible for the CIP that corresponds to their respective category. The terms of each of these CIP categories were communicated to the respective employees between the months of January to December 2023.

Below are more background on each of the different categories of the CIP. Additionally, in Note 33 describes in more detail the main terms and conditions of the last two categories of the CIP (i.e., Non-GEM Executives; and GEM Executives):


i)    Non-Executive Employees: The first subprogram was aimed at non-executive employees who, while hired in LATAM as of December 31, 2020, were still in their position as of April 30, 2023, which includes a fixed and guaranteed payment in cash on certain dates, depending on the country where the employee is hired.

This subprogram is available to those employees who were unable to qualify for one of the two     categories below, or who were able to do so, chose not to participate in them.

ii)    Executives Not part of the GEM: The second subprogram applies to senior executives not part of the GEM (Global Executive Meeting – Senior Managers, Managers, Assistant Managers). This program contemplates the creation of remuneration synthetic Units (hereinafter, simply "Units") that, by reference, are considered as equivalent to the price of one share of LATAM Airlines Group S.A., and consequently, in case they become effective, they grant the worker the right to receive the payment in cash that results from multiplying the number of Units that become effective by the value per share of LATAM Airlines Group S.A. that should be considered in accordance with CIP.

In this context, this program contemplates two different bonuses: (1) a withholding bonus, consisting of the amount in cash resulting from Units that are assigned to the respective employee, these Units being paid at 20% at month 15 and 80% at month 24, in each case, counted from the exit date of Chapter 11 Procedure (i.e., November 3, 2022) (the "Exit Date"). This is consequently a guaranteed payment for these employees; and (2) a bonus associated with the certain financial indicators of LATAM Airlines Group S.A. and its subsidiaries, which is reflected in Note 19 (b), becoming effective 20% at month 15 and 80% at month 24, in each case, from the Exit Date. Consequently, this is an eventual payment that is only made if these indicators are reached.

iii)     GEM Executives: The third subprogram applies to the Company´s GEM executives (Global Executive Meeting) (CEO and employees whose job description is "vice presidents" or "directors"). This program, in essence, contemplates the creation of remuneration synthetic Units that, by referential means, are considered as equivalent to the price of one share of LATAM Airlines Group S.A. and consequently, in case they become effective, they grant the worker the right to receive the payment in cash that results from multiplying the number of Units that become effective by the value per share of LATAM Airlines Group S.A. that must be considered according to the CIP.


These Units are divided into:

(1) Units associated with the employee's permanence in the Company ("RSUs" – Retention Shares Units); and (2) Units associated with both the employee's permanence in the Company and the performance of LATAM Airlines Group S.A. ("PSUs" – Performance Shares Units). This performance

77
is ultimately measured according to the share price of LATAM Airlines Group S.A. in the terms and conditions of the CIP.

Both the RSUs and the PSUs are consequently associated with the passage of time, becoming effective by partialities according to the calendar contemplated by the CIP. For the case of RSUs, having a vesting guaranteed by partialities as explained in more detail in Note 33. On the other hand, the PSUs also consider the market value of the share of LATAM Airlines Group S.A. considering a liquid market. However, as long as there is no such liquid market, the share price will be determined on the basis of representative transactions. As explained in more detail in Note 33, PSUs constitute a contingent and non-guaranteed payment.

In addition, some GEM Executives will also be entitled to receive a fixed and guaranteed cash payment ("MPP" – Management Protection Plan) on certain dates according to the CIP. Those employees who are eligible for this MPP will also be eligible for a limited number of additional MSUs ("MPP Based RSUs").


In all cases, the respective employees must have remained as such in the Company at the corresponding accrual date to qualify for these benefits.

During the year of 2023 until the month of December, the amount accrued related to this CIP was MUS$ 66.8, which is recorded in the "Administrative expenses" line of the Consolidated Statement of Income by Function. As of December 31, 2023, the amount of this plan recorded in the consolidated statement of financial position is MUS$ 118.9.

(d)    Employment expenses are detailed below:
For the year ended at December 31,
20232022
ThUS$ ThUS$
Salaries and wages1,268,343 1,024,304 
Short-term employee benefits181,565 121,882 
Other personnel expenses133,429 120,150 
Total1,583,337 1,266,336 







NOTE 23 - ACCOUNTS PAYABLE, NON-CURRENT

As of
December 31, 2023		As of
December 31, 2022
ThUS$ThUS$
Aircraft and engine maintenance348,578 249,710 
Fleet (JOL)40,000 40,000 
Airport and Overflight Taxes11,337 19,866 
Provision for vacations and bonuses18,518 16,539 
Other sundry liabilities154 169 
Total accounts payable, non-current418,587 326,284 

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NOTE 24 - 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 December 31, 2023, amounts to ThUS$ 5,003,534 divided into 604,437,877,587 common stock of a same series (ThUS$ 13,298,486 divided into 604,437,584,048 shares as of December 31, 2022), a single series nominative, ordinary character with no par value. The total number of authorized shares of the Company as of December 31, 2023, corresponds to 604,441,789,335 shares. 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 the Corporate Law and its regulations.

At the Company's Extraordinary Shareholders' Meeting held on July 5, 2022, it was agreed to increase the Company's capital by ThUS$ 10,293,270 through the issuance of 73,809,875,794 paid shares and 531,991,409,513 backup shares, all ordinary, of the same and single series, without par value, of which: (a) ThUS$ 9,493,270 represented by 531,991,409,513 new shares, to be used to respond to the conversion of the Convertible Notes, according to this term is defined below (the “Support Shares”); and (b) ThUS$800,000 represented by 73,809,875,794 new paid shares (the “New Paid Shares”), to be offered preferentially to shareholders. On September 13, 2022, the preferential placement of the convertible notes and, in turn, of the new paid shares began, ending on the following dates, as explained below:

1.On October 12, 2022 expired the 30-day preemptive rights offering period (the “POP”) of (i) the 73,809,875,794 new paid shares, issued and registered in the Securities Registry of the Comisión para el Mercado Financiero (“CMF”) (the “ERO”); and (ii) 1,257,002,540 notes convertible into shares Serie G, 1,372,839,695 notes convertible into shares Serie H, and the 6,863,427,289 notes convertible into shares Serie I, all registered in the Securities Registry of the CMF (jointly, the “Convertible Notes”).

2.On October 13, 2022, the second round (the “Second Round”) of subscription of the ERO has taken place, in which had the right to participate, the shareholders (or their assignees) that subscribed ERO in the POP and expressed to LATAM, at the time of the subscription, their intention to participate in the Second Round.

3.As previously reported, the Remainder will be placed, in compliance with the applicable laws and regulations, according to the rules governing the offering of the ERO and the Convertible Notes, as provided in Article 10 of the Regulations of the Corporations Law. Such placement includes, among other things, the placement of a portion of the Remainder with (i) a group of unsecured creditors of LATAM represented by Evercore and certain holders of Chilean notes issued by LATAM (collectively, the “Backstop Creditors”); and (ii) Delta Air Lines, Inc., Qatar Airways Investments (UK) Ltd. and the Cueto group (collectively, the “Backstop Shareholders”;and them jointly with the Backstop Creditors, the “Backstop Parties”) according to the rules of their respective backstop commitment agreements (the “Backstop Agreements”).

4.For purposes of the above, the Company will exercise its rights under the Backstop Agreements and will therefore require the Backstop Parties to subscribe and pay their respective portion of the Remainder, as provided in such agreements. Given the funding period contemplated in the Backstop Agreements, the Company managed to exit the Chapter 11 on November 3, 2022. Consequently, on this same date the Company, together with its various subsidiaries that were part of the Chapter 11 Procedure, have emerged from bankruptcy.

5.As part of the implementation of its Reorganization Plan within the framework of the exit from Chapter 11, LATAM issued MUS$800 in new paid shares and ThUS$9,493,270 through the issue of three classes of notes convertible into Company shares, backed by 531,991,409,513 shares totaling of 605,801,285,307 shares. As of December 31, 2023, of the aforementioned capital increase, 603,831,469,894 shares were subscribed and paid (603,831,176,355 shares as of December 31, 2022), equivalent to ThUS$10,169,622 as of December 31, 2023 (ThUS$10,152,221 as of December 31,

79
2022) and as of December 31, 2022 costs of issuance and placement of shares and convertible bonds were generated for ThUS$ 810,279, which are presented as part of the Other reserves and was reclassified to "paid-in capital" according to the Extraordinary Shareholders' Meeting held on April 20, 2023, as explained below

6.At the Company's Extraordinary Shareholders' Meeting held on April 20, 2023, it was agreed to:

6.i) A decrease in the Company's capital for an amount of ThUS$ 7,501,896, without altering the number and characteristics of the shares into which it is divided, by absorbing the Company's accumulated losses as of December 31, 2022 for the same amount;

6.ii) Others decrease of the Company's capital for an amount of ThUS$ 178, without altering the number and characteristics of the shares into which it is divided, through the absorption of the equity account of "Treasury Shares" as of December 31, 2022 for the same amount, produced on the occasion of the January 2013 reduction of capital stock by operation of law that took place in accordance with the provisions of Article 27 of the Corporations Law.

6.iii) Deduction of the Company´s capital the account "Costs of issuing shares and new convertible notes, for an amount of ThUS$ 810,279.

On September 6, 2023, by public deed granted at the Notary of Santiago of Mr. Eduardo Diez Morello, under repertoire number 15,327-2023 entitled "Declaración de Colocación y Vencimiento Plazo de Colocación Bonos Convertibles "Series G", "Series H" and "Series I" and Reducción de Capital de Pleno Derecho", it was realized that on September 5, 2023 the maturity of the placement term (the "Placement Term") of Convertible Notes. Consequently, in accordance with the mentioned in number Four of Clause Six of the respective notes issuance contract (the "Issuance Agreement"), as of that date the amount placed against it remained unchanged, and consequently the Convertible Notes not placed on that date were null and void. For the sake of completeness, it was declared that upon maturity of the Placement Term, 123,605,720 Series G Convertible Notes and 37 Series I Convertible Notes (collectively, the "Unplaced Convertible Notes") remained unplaced, for an amount of US$ 123,605,720 and US$37, respectively (hereinafter, together, the "Unplaced Amount"). The conversion option of the Unplaced Convertible Notes was backed by 1,965,903,665 shares as equity.

Likewise, in the aforementioned deed it was realized that since all the Unplaced Convertible Bonds have been terminated, since they have been null and void, they cannot be converted into shares of the issuer, consequently reducing the Company's Capital Share by an amount equal to the Unplaced Amount.

Therefore, as of September 6, 2023, the amount of the Share Capital has been reduced by law in the amount of ThUS$ 123,606, equivalent to 1,965,903,665 shares. As a result of the foregoing, as of December 31, 2023, the total statutory share capital of the Company was reduced by law from the amount of ThUS$ 5,127,182, divided into 606,407,693,000 shares, of the same and unique series, without par value, to the amount of ThUS$ 5,003,576, divided into 604,441,789,335 shares, of which MUS$ 5,003,534, equivalent to 604,437,877,587 shares, are fully paid. To date, the balance of MUS$ 42, equivalent to 3,911,748 shares, are pending of subscription and payment and are intended exclusively to respond to the conversion of 42,398 Series H Convertible Notes.

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(b)     Movement of authorized shares

The following table shows the movement of the authorized, fully paid shares and back-up shares to be delivered in the event that the respective conversion option is exercised under the convertible notes currently issued by the Company:

As of December 31, 2023 As of December 31, 2022
N° of authorized sharesN° of Subscribed of shares and paid or delivered pursuant to the exercise of the conversion optionN° of convertible notes back-up shares pending to placeN° of shares to subscribe or not usedN° of authorized sharesN° of Subscribed of shares and paid or delivered pursuant to the exercise of the conversion optionN° of convertible notes back-up shares pending to placeN° of shares to subscribe or not used
Opening Balance606,407,693,000604,437,584,0484,205,2871,965,903,665606,407,693606,407,693——
New shares issued————73,809,875,79473,809,875,794——
Convertible Notes G————19,992,142,08718,026,240,520—1,965,901,567
Convertible Notes H—293,539(293,539)—126,661,409,136126,657,203,8494,205,287—
Convertible Notes I————385,337,858,290385,337,856,192—2,098
Reduction of full right (*)(1,965,903,665)——(1,965,903,665)————
Subtotal(1,965,903,665)293,539(293,539)(1,965,903,665)605,801,285,307603,831,176,3554,205,2871,965,903,665
Closing Balance604,441,789,335604,437,877,5873,911,748—606,407,693,000604,437,584,0484,205,2871,965,903,665

(*) See letter (a) above, in the same Note.

(c)     Share capital

The following table shows the movement of share capital:

Paid- in
Capital
ThUS$
Initial balance as of January 1, 20223,146,265 
New shares issued (ERO)800,000 
Conversion options of convertible notes exercised during the year - Convertible Notes G (1)1,115,996 
Conversion options of convertible notes exercised during the year - Convertible Notes H1,372,798 
Conversion options of convertible notes exercised during the year - Convertible Notes I (2)6,863,427 
Subtotal10,152,221 
Ending balance as of December 31, 202213,298,486 
Initial balance as of January 1, 202313,298,486 
Placement during the conversion options period - Convertible Notes G17,401 
Absorption of Accumulated Losses as of December 31, 2022 (3)(7,501,896)
Absorption of treasury shares (3)(178)
Deduction of issuance and placement costs of shares and bonds convertible into shares (3)(810,279)
Subtotal(8,294,952)
Ending balance as of December 31, 2023 5,003,534 

(1)It only includes Convertible Notes bonds delivered as payment of debts recognized in Chapter 11.
(2)Part of the Convertible Notes were to extinguish through exchange credits that were recognized in Chapter 11.
(3)As explained in letter a) of this Note, at the Company's Extraordinary Shareholders' Meeting held on April 20, 2023, it was agreed to absorb retained losses and reduce the Company's capital.


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(d)    Treasury stock
At December 31, 2023, 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. As explained in letter a) of this same Note, at the Company's Extraordinary Shareholders' Meeting held on April 20, 2023, an absorption of the Company's capital was agreed for an amount of ThUS$ 178.

(e)     Other equity- Value of conversion right - Convertible Notes
(e.1)     Notes subscription
The Convertible Notes were issued to be place in exchange for a cash contribution, in exchange for settlement of Chapter 11 Proceeding or a combination of both. Convertible Notes issued in exchange for cash were valued at fair value (the cash received). Notes issued in exchange for settlement of Chapter 11 claims were valued considering the discount that each group of liabilities settled on at the emergence date. The table below shows the 3 Convertible Notes at their nominal values, the adjustment, if any, to arrive at their fair values and the amount of transaction costs. The conversion option classified as equity is determined by deducting the amount of the liability component from the fair value of the compound instrument as a whole. The equity portion is recognized under Other equity at the time the Convertible Notes are issued.
As of December 31, 2022
ConceptsConvertible
Notes G 		Convertible
Notes H 		Convertible
Notes I 		Total
Convertible
Notes
ThUS$ ThUS$ ThUS$ ThUS$
Face Value1,115,996 1,372,837 6,863,427 9,352,260 
Adjustment to fair value Convertible Notes at the date of issue(923,616)— (2,686,854)(3,610,470)
Issuance cost— (24,812)(705,467)(730,279)
Subtotal(923,616)(24,812)(3,392,321)(4,340,749)
Fair Value of Notes192,380 1,348,025 3,471,106 5,011,511 
Debt component at the date of issue— (102,031)— (102,031)
Equity component at the date of issue192,380 1,245,994 3,471,106 4,909,480 
As of December 31, 2023
ConceptsConvertible
Notes G		Convertible
Notes H		Convertible
Notes I		Total
Convertible
Notes
ThUS$ThUS$ThUS$ThUS$
Face Value17,401 — — 17,401 
Adjustment to fair value Convertible Notes at the date of issue(14,401)— — (14,401)
Subtotal(14,401)— — (14,401)
Fair Value of Notes3,000 — — 3,000 
Equity component at the date of issue3,000 — — 3,000 









82
(e.2)     Conversion of notes into shares

As of December 31, 2023 and December 31, 2022, the following notes have been converted into shares:


As of December 31, 2023
ConceptsConvertible
Notes G		Convertible
Notes H		Convertible
Notes I		Total
Convertible
Notes
ThUS$ThUS$ThUS$ThUS$
Conversion percentage100.000 %99.997 %100.000 %
Conversion option of convertible notes exercised1,133,397 1,372,798 6,863,427 9,369,622 
Total Converted Notes1,133,397 1,372,798 6,863,427 9,369,622 


As of December 31, 2022
ConceptsConvertible
Notes G 		Convertible
Notes H 		Convertible
Notes I 		Total
Convertible
Notes
ThUS$ ThUS$ ThUS$ ThUS$
Conversion percentage88.782 %99.997 %100.000 %
Conversion option of convertible notes exercised1,115,996 1,270,767 6,863,427 9,250,190 
Converted debt component— 102,031 — 102,031 
Total Converted Notes1,115,996 1,372,798 6,863,427 9,352,221 

The conversion option from the issuance of convertible notes classified as equity is determined by deducting the amount of the liability component from the fair value of the compound instrument (i.e. convertible notes) as a whole. This is recognized and included in equity, net of income tax effects, and is not subsequently remeasured. In addition, the conversion option classified as equity will remain in equity until the conversion option is exercised, in which case, the balance recognized in equity will be transferred to share capital. To the date of issuance of these financial statements, the portion not converted into equity corresponds to ThUS$39.

(e.3)     The Convertible Notes
The contractual conditions of the G, H and I Convertible Notes consider the delivery of a fixed number of shares of LATAM Airlines Group S.A. at the time of settlement of the conversion option of each of them. The foregoing determined the classification of convertible notes as equity instruments, with the exception of Bond H, which considers, in addition to the delivery of a fixed number of shares, the payment of 1% annual interest with certain conditions for its payment and its accrual from 60 days after the exit Date. The payment of this interest gives rise to the recognition of a liability component for the class H convertible notes.
At the date of issue, the fair value of the liability component in the amount of ThUS$ 102,031 was estimated using the prevailing market interest rate for similar non-convertible instruments.
Transaction costs relating to the liability component are included in the carrying amount of the liability portion and amortized over the period of the convertible notes using the effective interest method.


83
(f)     Reserve of share- based payments
Movement of Reserves of share- based payments:
PeriodsOpening
balance		Stock
option
plan		Closing
balance
ThUS$ThUS$ThUS$
From January 1 to December 31, 2022 37,235 — 37,235 
From January 1 to December 31, 2023 37,235 — 37,235 
These reserves are related to share based payment plans that expired during the first quarter of 2023. No equity instruments were issued and no amounts were paid associated with these plans.

(g)     Other sundry reserves
Movement of Other sundry reserves:

PeriodsOpening
balance		Transactions with
non-controlling interest 		Legal
reserves 		Other sundry
reserves 		Others increases (Decreases) (5)Closing
balance
ThUS$ThUS$ ThUS$ ThUS$ ThUS$ThUS$
From January 1 to December 31, 2022 2,448,098 — — (4,420,749)— (1,972,651)
From January 1 to December 31, 2023 (1,972,651)16,648 (14,401)800,388 (1,170,016)

Balance of Other sundry reserves comprise the following:
As of
December 31, 2023		As of
December 31, 2022
ThUS$ ThUS$
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)(211,582)(216,656)
Adjustment to the fair value of the New Convertible Notes (4)(3,624,871)(3,610,470)
Cost of issuing shares and New Convertible Notes (5)— (810,279)
Others(1,875)(3,558)
Total(1,170,016)(1,972,651)



(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 December 31, 2022 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 S.A. 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

84
participation in Aerovías de Integración Regional S.A. Aires 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. (3) The loss due to the acquisition of the minority interest of Multiplus S.A. for ThUS$ (184,135) (see Note 1), (4) and the acquisition of a minority interest in LATAM Airlines Perú S.A. through LATAM Airlines Group S.A for an amount of ThUS$ (3,225) and acquisition of the minority stake in LAN Argentina S.A. and Inversora Cordillera through Transportes Aéreos del Mercosur S.A. for an amount of ThUS$ (3,383). The movements during 2023 was the following: (5) acquisition of the non-controlling interest of Aerovías de Integración Regional S.A. Aires S.A. for an amount of ThUS$(23) and (6) amendment of articles in the legal statutes of association related to premiums for the issuance of shares in the subsidiaries Aerovías de Integración Regional S.A. Aires S.A. for a total amount of ThUS$ 5.097.

(4)     The adjustment to the fair value of the Convertible Notes delivered in exchange for settlement of Chapter 11 claims was valued considering the discount that each group of liabilities settled on at the emergence date. These relate to: gain on the haircut for the accounts payable and other accounts payable for Th US$2,564,707 (ThUS$ 2,550,306 as of December 31, 2022), gain on the haircut for the financial liabilities for ThUS$ 420,436 and gain on the haircut of lease liabilities which is booked against the right of use asset for ThUS$ 639,728 as of December 31, 2023 and December 31, 2022.

(5)     Corresponds to 20% of the sum of the commitment of new funds of the Backstop Parties under the Series I Convertible Bonds and the New Paid Shares, plus additional costs for extension of the Backstop agreement. At the Company's Extraordinary Shareholders' Meeting held on April 20, 2023, it was agreed to deduct from the paid-in capital of the Company the account "Costs of issuance and placement of shares and bonds convertible into shares", for the sum of ThUS$810,279.

(h)     Reserves with effect in other comprehensive income.

Movement of Reserves with effect in other comprehensive income:

Currency
translation
reserve 		Cash flow
hedging
reserve 		Gains (Losses)
on change on value
of time value
of options 		Actuarial gain
or loss on
defined benefit
plans reserve 		Total
ThUS$ ThUS$ ThUS$ ThUS$ ThUS$
Opening balance as of January 1, 2022(3,772,159)(38,390)(17,563)(18,750)(3,846,862)
Change in fair value of hedging instrument recognized in OCI— 51,323 (23,845)— 27,478 
Add: Costs of hedging deferred and recognized in OCI— — — — — 
Reclassified from OCI to profit or loss— 31,293 19,946 — 51,239 
Reclassified from OCI to the value of the hedged asset— (8,143)— — (8,143)
Deferred tax— (235)— — (235)
Actuarial reserves by employee benefit plans— — — (9,933)(9,933)
Deferred tax actuarial IAS by employee benefit plans— — — 566 566 
Translation difference subsidiaries(33,401)694 (160)— (32,867)
Closing balance as of December 31, 2022 (3,805,560)36,542 (21,622)(28,117)(3,818,757)
Opening balance as of January 1, 2023(3,805,560)36,542 (21,622)(28,117)(3,818,757)
Change in fair value of hedging instrument recognized in OCI— (32,858)25,734 — (7,124)
Reclassified from OCI to profit or loss— (26,568)28,818 — 2,250 
Reclassified from OCI to the value of the hedged asset— (11,112)— — (11,112)
Deferred tax— 3,604 — — 3,604 
Actuarial reserves by employee benefit plans— — (21,192)(21,192)
Deferred tax actuarial IAS by employee benefit plans— — 750 750 
Translation difference subsidiaries(25,051)(8,286)17 — (33,320)
Closing balance as of December 31, 2023 (3,830,611)(38,678)32,947 (48,559)(3,884,901)


85

(h.1)    Cumulative translate difference

These are originated from exchange differences arising from the translation of any investment in foreign entities (or Chilean investments 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 a 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.

(h.2)     Cash flow hedging reserve
These are originated 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.

(h.3)    Reserves of actuarial gains or losses on defined benefit plans

Correspond to the increase or decrease in the present value obligation for defined benefit plans due to changes in actuarial assumptions, and experience adjustments, which are the effects of differences between the previous actuarial assumptions and the actual events that have occurred.

(i)     Retained earnings/(losses)    
Movement of Retained earnings/(losses):

PeriodsOpening
balance 		Result
for the
period 		DividendsOthers increase (decreases) (1)Closing
balance
ThUS$ ThUS$ ThUS$ThUS$ThUS$
From January 1 to December 31, 2022 (8,841,106)1,339,210 — — (7,501,896)
From January 1 to December 31, 2023 (7,501,896)581,831 (174,549)7,559,025 464,411 

(1) The detail of Other increases (decreases) is as follows:

ThUS$
Absorption accumulated losses (*)7,501,896 
Out of Period Adjustment (**)57,129 
Total7,559,025 

(*) See letter a) under this same Note.

(**) Out of Period Adjustment

On April 30, 2020, LATAM's Shareholders approved the distribution of a dividend in the amount of ThUS$ 57,129 to be paid on May 28, 2020. On May 26, 2020, LATAM entered Chapter 11 proceedings which granted an automatic stay prohibiting the Company from making dividend payments. At that time it was not clear when this dividend would be paid. On November 3, 2022, upon emergence from Chapter 11 it was clear this dividend would not be paid, however, it was not derecognized from liabilities and transferred to retained earnings at that time. During the three months ended March 31, 2023, the Company corrected this matter and recorded an out of period adjustment to derecognized the dividend payable resulting in an increase of ThUS$ 57,129 to retained earnings and a decrease in Trade and other accounts payable in the same amount.
 
Management has evaluated the impact of this out-of-period adjustment and concluded that it is not material to the financial statements for the year ended December 31, 2023, or to any previously reported quarter, semester or annual financial statements.

86

(j)      Dividends per share

Description of dividendMinimum mandatory dividend 2023Minimum mandatory dividend 2022
Amount of the dividend (ThUS$)(*)174,549 — 
Number of shares among which the dividend is distributed604,437,877,587 604,437,584,048 
Dividend per share (US$)0.0003 0.0000 
(*) It Corresponds to mandatory minimum dividend provision charged to the net income for the year 2023, As of the date of issuance of these financial statements, the Board of Directors has not yet approved a proposal for payment.

NOTE 25 - REVENUE

The detail of revenues is as follows:

For the year ended at December 31,
20232022
ThUS$ThUS$
Passengers10,215,148 7,636,429 
Cargo1,425,393 1,726,092 
Total11,640,541 9,362,521 


NOTE 26 - COSTS AND EXPENSES BY NATURE

(a)Costs and operating expenses
The main operating costs and administrative expenses are detailed below:
For the year ended at December 31,
20232022
ThUS$ThUS$
Aircraft fuel(3,947,220)(3,882,505)
Other rentals and landing fees(1,322,795)(1,036,158)
Aircraft maintenance(601,804)(582,848)
Aircraft rental (*)(91,876)(202,845)
Commissions(244,160)(167,035)
Passenger services(271,838)(184,357)
Other operating expenses(1,351,571)(1,136,490)
Total(7,831,264)(7,192,238)

(*) Aircraft Lease Contracts include lease payments based on Power by the Hour (PBH) at the beginning of the contract and fixed-rent payments later on. For these contracts that contain an initial period based on PBH and then a fixed amount, a right of use asset and a lease liability was recognized at the date of modification of the contract. These amounts continue to be amortized over the contract term on a straight-line basis starting from the modification date of the contract. Therefore, as a result of the application of the lease accounting policy, the expenses for the year include both the lease expense for variable payments (Aircraft Rentals) as well as the expenses resulting from the amortization of the right of use assets (included in the Depreciation line included in b) below) and interest from the lease liability (included in Lease Liabilities letter c) below)

87

For the year ended at December 31,
20232022
ThUS$ ThUS$
Payments for leases of low-value assets(16,632)(17,959)
Total(16,632)(17,959)

(b)Depreciation and amortization
Depreciation and amortization are detailed below:

For the year ended at December 31,
20232022
ThUS$ ThUS$
Depreciation (*)(1,151,015)(1,125,154)
Amortization(54,358)(54,358)
Total(1,205,373)(1,179,512)

(*) Included within this amount is the depreciation of the Property, plant and equipment (See Note 16 (a)) and the maintenance of the aircraft recognized as right of use assets. The maintenance cost amount included in the depreciation line for the period ended December 31, 2023 is ThUS$ 565,384 (ThUS$ 463.306 for the same period in 2022).
(c)Financial costs

The detail of financial costs is as follows:

For the year ended at December 31,
20232022
ThUS$ ThUS$
Bank loan interests(400,052)(714,310)
Financial leases(58,011)(45,384)
Lease liabilities(224,824)(152,132)
Other financial instruments(15,344)(30,577)
Total(698,231)(942,403)

Costs and expenses by nature presented in this note plus the Employee expenses disclosed in Note 22, 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.







88
(d)Gains (losses) from restructuring activities

Gains (losses) restructuring activities are detailed below:
For the year ended at December 31,
2022
ThUS$
Renegotiation of fleet contracts(483,068)
Legal advice(323,204)
Employee restructuring plan(80,407)
Rejection of IT contracts(2,586)
Gains resulting from the settlement of Chapter 11 claims (*)2,550,306 
Others18,893 
Total1,679,934 

The Company did not recorded gains/(losses) restructuring activities during 2023.


(e)Financial income
Financial income is detailed below:
For the year ended
At December 31,
20232022
ThUS$ThUS$
Financial claims (*)— 491,326 
Gains resulting from the settlement of Chapter 11 claims (**)— 420,436 
Finance lease rate change effect— 49,824 
Other miscellaneous income125,356 90,709 
Total125,356 1,052,295 
(*) See Note 34 (a.4.)
(**) See Note 24 (g)




89
(f)Other gains (losses)
Other gains (losses) are detailed below:
For the year ended
At December 31,
20232022
ThUS$ ThUS$
Adjustment net realizable value fleet available for sale(39,163)(345,410)
Other(51,880)(1,667)
Total(91,043)(347,077)



NOTE 27 - OTHER INCOME, BY FUNCTION
Other income, by function is as follows:
For the year ended at December 31,
20232022
ThUS$ThUS$
Tours36,297 24,068 
Aircraft leasing— 18,164 
Customs and warehousing27,553 30,323 
Maintenance7,784 7,995 
Income from non-airlines products LATAM Pass15,148 23,954 
Other miscellaneous income (*)61,859 49,782 
Total148,641 154,286 

(•)Included within this amount ThUS$30,408 as of December 31, 2022 related to the compensation of Delta Air Lines Inc. for the JBA signed during 2019.



NOTE 28 - FOREIGN CURRENCY AND EXCHANGE RATE DIFFERENCES

The functional currency of LATAM Airlines Group S.A. is the US dollar, LATAM 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. For each entity and all other currencies are defined as a 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 are part of the LATAM Airlines Group S.A. and Subsidiaries.









90


Following are the current exchange rates for the US dollar, on the dates indicated:

As of December 31,As of December 31,
20222021
Argentine peso807.98 177.12 102.75 
Brazilian real4.85 5.29 5.57 
Chilean peso877.12 855.86 844.69 
Colombian peso3,872.49 4,845.35 4,002.52 
Euro0.90 0.93 0.88 
Australian dollar1.46 1.47 1.38 
Boliviano6.86 6.86 6.86 
Mexican peso16.91 19.50 20.53 
New Zealand dollar1.58 1.58 1.46 
Peruvian Sol3.70 3.81 3.98 
Paraguayan Guarani7,270.6 7,332.2 6,866.40 
Uruguayan peso38.81 39.71 44.43 

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

Current assetsAs of
December 31, 2023		As of
December 31, 2022
ThUS$ThUS$
Cash and cash equivalents386,216 265,371 
Argentine peso1,808 6,712 
Brazilian real7,108 3,355 
Chilean peso47,907 17,591 
Colombian peso8,968 8,415 
Euro25,329 19,361 
U.S. dollar237,251 168,139 
Other currency57,845 41,798 
Other financial assets, current14,659 331,617 
Chilean peso4,367 5,778 
Euro3,722 2,483 
U.S. dollar5,971 322,796 
Other currency599 560 
Other non - financial assets, current36,654 19,425 
Brazilian real719 2,303 
Chilean peso12,354 3,341 
Euro5,310 622 
U.S. dollar10,735 4,369 
Other currency7,536 8,790 

91
Trade and other accounts receivable, current279,586 143,631 
Argentine peso12,831 25,035 
Brazilian real620 10,669 
Chilean peso69,588 31,258 
Colombian peso1,453 176 
Euro90,699 12,506 
U.S. dollar68,893 25,549 
Other currency35,502 38,438 
Accounts receivable from related entities, current27 138 
Chilean peso27 31 
U.S. dollar— 107 
Tax current assets17,258 15,623 
Chilean peso2,202 1,569 
Colombian peso6,084 1,921 
Peruvian sun7,108 10,300 
Other currency1,864 1,833 
Total current assets734,400 775,805 
Argentine peso14,639 31,747 
Brazilian real8,447 16,327 
Chilean peso136,445 59,568 
Colombian peso16,505 10,512 
Euro125,060 34,972 
U.S. Dollar322,850 520,960 
Other currency110,454 101,719 



92
As of
December 31, 2023		As of
December 31, 2022
ThUS$ThUS$
Non-current assets
Other financial assets, non-current15,375 13,366 
Brazilian real3,807 3,495 
Chilean peso2,073 69 
Colombian peso841 1,344 
Euro4,252 4,308 
U.S. dollar2,071 2,050 
Other currency2,331 2,100 
Other non - financial assets, non-current9,856 11,909 
Argentine peso1 12 
Brazilian real9,789 8,082 
U.S. dollar15 3,815 
Other currency51 — 
Accounts receivable, non-current4,732 4,526 
Chilean peso4,732 4,526 
Deferred tax assets1,048 2,948 
Colombian peso859 2,567 
U.S. dollar144 20 
Other currency45 361 
Total non-current assets31,011 32,749 
Argentine peso1 12 
Brazilian real13,596 11,577 
Chilean peso6,805 4,595 
Colombian peso1,700 3,911 
Euro4,252 4,308 
U.S. dollar2,230 5,885 
Other currency2,427 2,461 










93
The foreign currency detail of balances of monetary items in current liabilities and non-current is as follows:
Up to 90 days91 days to 1 year
As of
December 31, 2023		As of
December 31, 2022		As of
December 31, 2023		As of
December 31, 2022
ThUS$ThUS$ThUS$ThUS$
Current liabilities
Other financial liabilities, current4,331 17,062 1,010 602 
Chilean peso1,364 10,697 702 602 
U.S. dollar2,510 5,558 — — 
Other currency457 807 308 — 
Trade and other accounts payables, current616,032 720,688 9,583 20,995 
Argentine peso2,074 45,345 132 3,446 
Brazilian real13,401 48,511 922 651 
Chilean peso128,838 146,395 1,560 1,231 
Colombian peso197 2,330 — 31 
Euro54,744 29,502 7 11 
U.S. dollar350,635 328,540 1,797 2,883 
Peruvian sol42,347 7,426 4,994 10,886 
Mexican peso2,019 12,969 — 75 
Pound sterling17,379 37,788 11 19 
Uruguayan peso706 1,199 39 1,110 
Other currency3,692 60,683 121 652 
Accounts payable to related entities, current5,154 6 — — 
Chilean peso— 6 — — 
U.S. dollar5,154 — — — 
Other provisions, current16 29 12,429 11,655 
Chilean peso— — 4 29 
Other currency16 29 12,425 11,626 
Current liabilities
Other non-financial liabilities, current15,634 16,315 6,099 9,071 
Argentine peso836 87 445 6,563 
Chilean peso4,338 1,568 4,026 178 
Colombian peso1,456 294 1,066 798 
U.S. dollar7,305 12,975 416 1,063 
Other currency1,699 1,391 146 469 
Total current liabilities641,167 754,100 29,121 42,323 
Argentine peso2,910 45,432 577 10,009 
Brazilian real13,401 48,511 922 651 
Chilean peso134,540 158,666 6,292 2,040 
Colombian peso1,653 2,624 1,066 829 
Euro54,744 29,502 7 11 
U.S. dollar365,604 347,073 2,213 3,946 
Other currency68,315 122,292 18,044 24,837 


94
More than 1 to 3 yearsMore than 3 to 5 yearsMore than 5 years
As of
December 31, 2023		As of
December 31, 2022		As of
December 31, 2023		As of
December 31, 2022		As of
December 31, 2023		As of
December 31, 2022
ThUS$ThUS$ThUS$ThUS$ThUS$ThUS$
Non-current liabilities
Other financial liabilities, non-current32,867 32,036 2,871 774 165,511 170,437 
Chilean peso17,020 11,544 2,500 774 164,942 170,437 
Brazilian real552 16 — — — — 
Euro412 1,409 371 — 569 — 
U.S. dollar14,110 18,354 — — — 
Other currency773 713 — — — — 
Accounts payable, non-current72,783 58,449 — — — — 
Chilean peso16,774 17,259 — — — 
U.S. dollar54,441 39,717 — — — — 
Other currency1,568 1,473 — — — — 
Other provisions, non-current49,427 43,301 — — — — 
Argentine peso3,570 1,917 — — — — 
Brazilian real42,244 37,982 — — — — 
Chilean peso— — — — — — 
Colombian peso395 202 — — — — 
Euro3,053 2,944 — — — — 
U.S. dollar165 256 — — — — 
Provisions for employees benefits, non-current79,749 55,454 — — — — 
Chilean peso76,247 55,454 — — — — 
U.S. dollar3,502 — — — — — 
Total non-current liabilities234,826 189,240 2,871 774 165,511 170,437 
Argentine peso3,570 1,917 — — — — 
Brazilian real42,796 37,998 — — — — 
Chilean peso110,041 84,257 2,500 774 164,942 170,437 
Colombian peso395 202 — — — — 
Euro3,465 4,353 371 — 569 — 
U.S. dollar72,218 58,327 — — — — 
Other currency2,341 2,186 — — — — 


95
As of
December 31, 2023		As of
December 31, 2022
ThUS$ThUS$
General summary of foreign currency:
Total assets765,411 808,554 
Argentine peso14,640 31,759 
Brazilian real22,043 27,904 
Chilean peso143,250 64,163 
Colombian peso18,205 14,423 
Euro129,312 39,280 
U.S. dollar325,080 526,845 
Other currency112,881 104,180 
Total liabilities1,073,496 1,156,874 
Argentine peso7,057 57,358 
Brazilian real57,119 87,160 
Chilean peso418,315 416,174 
Colombian peso3,114 3,655 
Euro59,156 33,866 
U.S. dollar440,035 409,346 
Other currency88,700 149,315 
Net position
Argentine peso7,583 (25,599)
Brazilian real(35,076)(59,256)
Chilean peso(275,065)(352,011)
Colombian peso15,091 10,768 
Euro70,156 5,414 
U.S. dollar(114,955)117,499 
Other currency24,181 (45,135)


96

NOTE 29 – EARNINGS (LOSS) PER SHARE

For the year ended at December 31,
20232022
Basic earnings (loss) per share
Income (Loss) attributable to owners of the parent (ThUS$)581,831 1,339,210 
Weighted average number of shares, basic604,437,869,545(*)96,614,464,231(*)
Basic earnings (loss) per share (US$)0.000963 0.013861 
For the year ended at December 31,
20232022
Diluted earnings (loss) per share
Income (Loss) attributable to owners of the parent (ThUS$)581,831 1,339,210 (***)
Weighted average number of shares, diluted604,441,789,335(**)98,530,451,071(**)
Diluted earnings (loss) per share (US$)0.000963 0.013592 
(*)    As of December 31, 2023, the weighted average number of shares considers 604,437,584,048 shares outstanding from January 1, 2023 to December 31, 2023. From January 10, 2023 to December 31, 2023, the number of shares outstanding increased due to the partial conversion of the Convertible Note H (See movement of shares in Note 24).As of December 31, 2022, the weighted average number of shares considers 606,407,693 shares outstanding from January 1, 2022 until November 2, 2022. From November 3, 2022 until December 31, 2022 the number of shares outstanding increases due to the equity rights offering and then increases daily as the holders of the convertible notes convert them into shares (See movement of shares in Note 24).

(**)    As of December 31, 2023, the number of weighted diluted shares considers 604,437,584,048 shares from January 1, 2023 to December 31, 2023. From January 10, 2023 to December 31, 2023, the number of shares outstanding increased due to the partial conversion of the Convertibles Notes (See movement of shares in Note 24) and 3,911,748 shares outstanding from January 1, 2023 until December 31, 2023, assuming the full conversion of the Convertibles Notes that were issued on the date of exit from Chapter 11 (See movement of shares in Note 24). As of December 31, 2022, the weighted average number of fully diluted shares considers 606,407,693 shares outstanding from January 1, 2022 until November 2, 2022, and 605,801,285,307 shares outstanding from November 3, 2022 until December 31, 2022 which includes the equity rights offering and assumes the conversion of all Convertibles Notes that were issued upon emergence from Chapter 11 (See movement of shares in Note 24).


(***) Income (Loss) attributable to owners of equity instruments of the parent company is unchanged when calculating diluted EPS because only Convertible Note H accrued interest. However, this Note was converted into shares immediately after issuance and therefore did not accrue interest during the year.


97
NOTE 30 – CONTINGENCIES
I.    Lawsuits
1)Lawsuits filed by LATAM Airlines Group S.A. and Subsidiaries

CompanyCourtCase NumberOriginStage of trialAmounts
Committed (*)
ThUS$
LATAM Finance LimitedGrand Court of the Cayman Islands -Request for a provisional bankruptcy process.On May 26, 2020, LATAM Finance Limited submitted a request for a provisional liquidation in the Grand Court of the Cayman Islands, covered in the reorganization proceeding filed before the Bankruptcy Court of the United States of America, which was accepted on May 27, 2020 by the Grand Court of the Cayman Islands. On September 28, 2020, LATAM Finance Limited filed a petition to suspend the liquidation. On October 9, 2020, the Grand Court of Cayman Islands accepted the petition and extended the status of temporary liquidation for a period of 6 months. On May 13, 2021, LATAM Finance Limited filed a petition to suspend the liquidation. On May 18, 2021, the Grand Court of Cayman Islands accepted the petition and extended the status of temporary liquidation until October 9, 2021. On December 1, 2021, LATAM Finance Limited filed a petition to suspend the liquidation, which was accepted by the Grand Court of Cayman Islands. This extended the status of the provisional liquidation through April 9, 2022. On August 22, 2022, LATAM Finance Limited petitioned for a suspension of the liquidation, which was granted by the Grand Court of the Cayman Islands. The provisional liquidation was extended to October 9, 2022 and the process continues in effect. That petition was sustained by the Grand Court of the Cayman Islands on October 4, 2022. On September 30, 2022, LATAM Finance Limited filed an application for validation of security obligations arising in connection with the DIP to Exit and new DIP facilities. On October 04, 2022, the Grand Court made an Order validating such application. Currently the proceeding remains open.-0-

98
CompanyCourtCase NumberOriginStage of trialAmounts
Committed (*)
ThUS$
Peuco Finance LimitedGrand Court of the Cayman Islands -Request for a provisional bankruptcy process.
On May 26, 2020, Peuco Finance Limited submitted a request for a provisional liquidation in Grand Court of the Cayman Islands, covered in the reorganization proceeding filed before the Bankruptcy Court of the United States of America, which was accepted on May 27, 2020 by the Grand Court of the Cayman Islands. On September 28, 2020, Peuco Finance Limited filed a petition to suspend the liquidation. On October 9, 2020, the Grand Court of Cayman Islands accepted the petition and extended the status of temporary liquidation for a period of 6 months. The lawsuit continues to be active. On May 13, 2021, Peuco Finance Limited filed a petition to suspend the liquidation. On May 18, 2021, the Grand Court of Cayman Islands accepted the petition and extended the status of temporary liquidation until October 9, 2021. On December 1, 2021, Peuco Finance Limited filed a petition to suspend the liquidation, which was accepted by the Grand Court of Cayman Islands. This extended the status of the provisional liquidation through April 9, 2022. On August 22, 2022, Peuco Finance Limited petitioned for a suspension of the liquidation, which was granted by the Grand Court of the Cayman Islands. The provisional liquidation was extended to October 9, 2022 and the process continues in effect. That petition was sustained by the Grand Court of the Cayman Islands on October 4, 2022. On September 30, 2022, Peuco Finance Limited filed an application for validation of security obligations arising in connection with the DIP to Exit and new DIP facilities. On October 04, 2022, the Grand Court made an Order validating such application. Currently the proceeding remains open.
-0-

99
CompanyCourtCase NumberOriginStage of trialAmounts
Committed (*)
ThUS$
Piquero Leasing LimitedGrand Court of the Cayman Islands-Request for a provisional bankruptcy process.On July 08, 2020, Piquero Leasing Limited submitted a request for a provisional liquidation in Grand Court of the Cayman Islands, covered in the reorganization proceeding filed before the Bankruptcy Court of the United States of America, which was accepted on July 10, 2020, by the Grand Court of the Cayman Islands. Piquero Leasing Limited entered a motion to suspend the liquidation on September 28, 2020.  On October 9, 2020 the Grand Court of the Cayman Islands granted the motion and extended the provisional liquidation status for 6 months. On May 13, 2021, Piquero Leasing Limited filed a petition to suspend the liquidation. On May 18, 2021, the Grand Court of Cayman Islands accepted the petition and extended the status of temporary liquidation until October 9, 2021. On December 1, 2021, Piquero Leasing Limited filed a petition to suspend the liquidation, which was accepted by the Grand Court of Cayman Islands. This extended the status of the provisional liquidation through April 9, 2022. On August 22, 2022, Piquero Leasing Limited petitioned for a suspension of the liquidation, which was granted by the Grand Court of the Cayman Islands. The provisional liquidation was extended to October 9, 2022 and the process continues in effect. Currently the proceeding remains open.-0-

100
2)    Lawsuits received by LATAM Airlines Group S.A. and Subsidiaries.

CompanyCourtCase NumberOriginStage of trialAmounts
Committed (*)
ThUS$
LATAM Airlines Group S.A. y Lan Cargo S.A.Comisión Europea—Investigation of alleged infringements to free competition of cargo airlines, especially fuel surcharge. On December 26th, 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 14th, 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 9th, 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$9,133 (€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. On July 12, 2019, we attended a hearing before the European Court of Justice to confirm our petition for vacation of judgment or otherwise, a reduction in the amount of the fine.  On March 30, 2022, the European Court issued its ruling and lowered the amount of our fine from KUS$9,133 (€8,220,000 Euros) to KUS$2,477 (€2,240,000 Euros). This ruling was appealed by LAN Cargo S.A. and LATAM on June 9, 2022. The other eleven airlines also appealed the ruling affecting them. The European Commission responded to our appeal of September 7, 2022. Lan Cargo S.A. and LATAM answered the Commission’s arguments on November 11, 2022. Finally, the European Commission replied to our defense in January 2023. On February 13, 2023, LAN Cargo, S.A. and LATAM requested the European Court to hold an oral hearing to ensure the Court's full understanding of some points of the discussion. The European Court set the hearing date as April 10, 2024.
2,477

101
CompanyCourtCase NumberOriginStage of trialAmounts
Committed (*)
ThUS$
Lan Cargo S.A. y LATAM Airlines Group S.A.In the Ovre Romerike Disrtict Court (Noruega) y Directie Juridische Zaken Afdeling Ceveil Recht (Países Bajos)—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, these claims were filed in England, Norway, the Netherlands and Germany, but are only ongoing in Norway and the Netherlands.
The two cases still pending, in Norway and the Netherlands, are in the evidence confirmation stage. The Norway case has been inactive since January 2014, but there has been judicial activity in the Netherlands case. In the Netherlands, most of the airlines involved in this case have been forced to withdraw their claim against LATAM and Lan Cargo after their previous claims in the Chapter 11 proceedings before the New York Court were dismissed. So, Lufthansa, Lufthansa Cargo, British Airways, Air France, KLM, Martinair and Singapore have withdrawn their claims and now only the Thai Airways claim is still ongoing against LATAM and Lan Cargo.
-0-
Aerolinhas Brasileiras S.A.Justicia Federal.0008285-53.2015.403.6105
An action seeking to quash a decision and petitioning for early protection in order to obtain 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, 201911,106

102
CompanyCourtCase NumberOriginStage of trialAmounts
Committed (*)
ThUS$
Aerolinhas Brasileiras S.A.Justicia Federal.0001872-58.2014.4.03.6105An 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
The statement was authenticated on January 29, 2016. A new insurance policy was submitted on March 30, 2016 with the change to the guarantee requested by PGFN. On 05/20/2016 the process was sent to PGFN, which was manifested on 06/03/2016. The Decision denied the company's request in the lawsuit. The court (TRF3) made a decision to eliminate part of the debt and keep the other part (already owed by the Company, but which it has to pay only at the end of the process: ThUS$3,929 – R$ 19,059,073.03- probable). We must await a decision on the Treasury appeal.
12,767
Tam Linhas Aéreas S.A.Tribunal Regional Federal da 2a Região.2001.51.01.012530-0 (vinculado a este proceso los Pas 19515.721154/2014-71, 19515.002963/2009-12)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 R$ 260.223.373,10-original amount in 2012/2013, which currently equals ThUS$84,078 (R$407,778,562.13). 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. A ruling is currently pending on the company’s appeal.
84,078
Tam Linhas Aéreas S.A.Secretaria da Receita Federal do Brasil.10880.725950/2011-05Ordinary judicial action brought for the purpose of declaring the nonexistence of legal relationship obligating the company to collect the Air Fund.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. The company has received the results of the due diligence and presented a claim. We must wait for an administrative decision.37,173

103
CompanyCourtCase NumberOriginStage of trialAmounts
Committed (*)
ThUS$
Tam Linhas Aéreas S.A.Secretaria da Receita Federal do Brasil.10880.722.355/2014-52On 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 objection was filed administratively on September 17, 2014. The lower court rendered a partially favorable ruling on June 1, 2016 that reversed the previous separate fine. A voluntary remedy was filed on June 30, 2015 on which a judgment by the Board of Tax Appeals is pending. The case was sent to the Second Panel of the Fourth Room of the Third Judgment Section of the Board of Tax Appeals (abbreviated as CARF in Portuguese). The CARF judges partially sustained the company’s appeal to pay part of the debt (we did not appeal the other part). The Ministry of Finance of Brazil filed a special remedy. The CARF dismissed the Ministry’s remedy in September 2019, but it filed a complaint that was denied by the CARF. The final calculations by the Federal Internal Revenue Service are pending.11,567

104
CompanyCourtCase NumberOriginStage of trialAmounts
Committed (*)
ThUS$
LATAM Airlines Group S.A.22° Juzgado Civil de SantiagoC-29.945-2016The 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. On May 18, 2019, Inversiones Ranco Tres S.A. filed a remedy of vacation of judgment based on technicalities and on substance against the Appellate Court decision.  The Appellate Court admitted both appeals on May 29, 2019. On August 11, 2021 Inversiones Ranco Tres S.A. requested the suspension of the hearing of the Appeal, after the recognition by the 2nd Civil Court of Santiago of the foreign reorganization procedure in accordance with Law No. 20,720, for the entire period that said procedure lasts, a request that was accepted by the Supreme Court. In December 2022 LATAM requested the end of the suspension, which was granted on February 17, 2023. Arguments were presented to the Supreme Court on April 27, 2023. On August 4, 2023, the Supreme Court dismissed the remedies of vacation of judgment based on substance and form filed by Inversiones Ranco Tres S.A. The resolution rejecting the claim remains firm and enforceable. The assessment of personal and procedural costs in favor of LATAM was carried out by both the Court of Appeals and the Court of First Instance.
-0-
TAM Linhas Aéreas S.A.10 ª Vara das Execuções Fiscais Federais de São Paulo0061196-68.2016.4.03.6182Tax 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. The evidentiary stage has begun.35,300

105
CompanyCourtCase NumberOriginStage of trialAmounts
Committed (*)
ThUS$
TAM Linhas Aéreas S.A.Secretaría de Receita Federal5002912.29.2019.4.03.6100A lawsuit disputing the debit in the administrative proceeding 16643.000085/2009-47, reported in previous notes, consisting of a notice demanding recovery of the Income and Social Assessment Tax on the net profit (SCL) resulting from the itemization of royalties and use of the TAM trademark
The lawsuit was assigned on February 28, 2019. A decision was rendered on March 1, 2019 stating that no guarantee was required. On 04/06/2020 TAM Linhas Aéreas S.A. had a favorable decision (sentence). The National Treasury can appeal. Today, we await the final decision.
10,292
TAM Linhas Aéreas S.A.Delegacía de Receita Federal10611.720852/2016-58An improper charge of the Contribution for the Financing of Social Security (COFINS) on an importThere is no predictable decision date because it depends on the court of the government agency. On June 29, 2023, the company decided to propose a composition to the National Treasurer on payment of the debt, but with the legal deductions stipulated in Law 246/2022. We are awaiting a response from the authority.15,253
TAM Linhas Aéreas S.A.Delegacía de Receita Federal16692.721.933/2017-80The 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 (Referring to 2012).An administrative defense was presented on May 29, 2018. The process has become a judicial proceeding.30,800
SNEA (Sindicato Nacional das empresas aeroviárias)União Federal0012177-54.2016.4.01.3400A 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. On January 30th, 2024, SNEA obtained a favorable court decision from the 2nd Instance (TRF1), regarding its appeal. The SNEA awaits the publication of the decision to assess the viability of possible appeals.
101,721

106
CompanyCourtCase NumberOriginStage of trialAmounts
Committed (*)
ThUS$
TAM Linhas Aéreas S.A.União Federal2001.51.01.020420-0TAM 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 to pay a fee.-0-
TAM Linhas Aéreas S.A.Receita Federal do Brasil19515-720.823/2018-11An 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. The Court dismissed the Company’s appeal in August 2019.  Then on September 17, 2019, Company filed a voluntary appeal (CRSF (Administrative Tax Appeals Board)) that is pending a decision.124,507
TAM Linhas Aéreas S.A.Receita Federal de Brasil10880.938832/2013-19The 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 systemAn administrative defense was argued on March 19, 2019. The Court dismissed the Company’s defense in December 2020.  The Company filed a voluntary appeal to the Brazilian Administrative Council of Tax Appeals (CARF) that is pending a decision.22,475
TAM Linhas Aéreas S.A.Receita Federal de Brasil10880.938834/2013-16The 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 Court dismissed the Company’s defense in December 2020.  The Company filed a voluntary appeal to the Brazilian Administrative Council of Tax Appeals (CARF) that is pending a decision.16,669

107
CompanyCourtCase NumberOriginStage of trialAmounts
Committed (*)
ThUS$
TAM Linhas Aéreas S.A.Receita Federal de Brasil10880.938837/2013-41The 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 Court dismissed the Company’s defense in December 2020.  The Company filed a voluntary appeal to the Brazilian Administrative Council of Tax Appeals (CARF) that is pending a decision.21,737
TAM Linhas Aéreas S.A.Receita Federal de Brasil10880.938838/2013-96The 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 presented our administrative defense. The Court dismissed the Company’s defense in December 2020.  The Company filed a voluntary appeal to the Brazilian Administrative Council of Tax Appeals (CARF) that is pending a decision.13,987
LATAM Airlines Group Argentina, Brasil, Perú, Ecuador, y TAM Mercosur.Juzgado de 1° Instancia en lo Civil y Comercial Federal N° 11 de la ciudad de Buenos Aires1408/2017Consumidores 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 2 years of arguments on jurisdiction and competence, the claim was assigned to this court and an answer was filed on March 19, 2019. The Court ruled in favor of the defendants on March 26, 2021, denying the precautionary measure petitioned by the plaintiff. The plaintiff requested on several occasions the opening of the trial, which was rejected by the Court due to the lack of notification of previous resolutions. The evidentiary stage has not yet begun in this case.
-0-
TAM Linhas Aéreas S.A.Receita Federal de Brasil10.880.938842/2013-54The decision denied the petition for reassignment and did not equate the COFINS credit statements for the third quarter of 2012 that had been determined to be in the non-accumulative system.We presented our administrative defense. The Court dismissed the Company’s defense in December 2020.  The Company filed a voluntary appeal to the Brazilian Administrative Council of Tax Appeals (CARF) that is pending a decision.16,076

108
CompanyCourtCase NumberOriginStage of trialAmounts
Committed (*)
ThUS$
TAM Linhas Aéreas S.A.Receita Federal de Brasil10.880.938844/2013-43The decision denied the petition for reassignment and did not equate the COFINS credit statements for the third quarter of 2012 that had been determined to be in the non-accumulative system. We presented our administrative defense. The Court dismissed the Company’s defense in December 2020.  The Company filed a voluntary appeal (CARF) that is pending a decision.14,721
TAM Linhas Aéreas S.A.Receita Federal de Brasil10880.938841/2013-18The decision denied the petition for reassignment and did not equate the COFINS credit statements for the second quarter of 2012 that had been determined to be in the non-accumulative system.We presented our administrative defense. The Court dismissed the Company’s defense in December 2020.  The Company filed a voluntary appeal (CARF) that is pending a decision.14,509
TAM Linhas Aéreas S.A.Receita Federal de Brasil10840.727719/2019-71Collection of PIS / COFINS tax for the period of 2014.We presented our administrative defense on January 11, 2020. The Court dismissed the Company’s defense in December 2020.  The Company filed a voluntary appeal (CARF) that is pending a decision.43,256
Latam-Airlines Ecuador S.A.Tribunal Distrital de lo Fiscal17509-2014-0088An audit of the 2006 Income Tax Return that disallowed fuel expenses, fees and other items because the necessary support was not provided, according to Management.
On August 6, 2018, the District Tax Claims Court rendered a decision denying the request for a refund of a mistaken payment.  An appeal seeking vacation of this judgment by the Court was filed on September 5th and we are awaiting a decision by the Appellate judges. As of December 31, 2018, the attorneys believed that the probability of recovering this sum had fallen to 30%-40% because of the pressure being put by the Executive Branch on the National Court of Justice and the Judiciary in general for rulings not to affect government revenues and because the case involves differences that are based on insufficient documentation supporting the expense. Given the percentage loss (above 50%), the accounting write-off of this recovery has been carried out. As of this date, the Sala Especializada de lo Contencioso Tributario de la Corte Nacional de Justicia has decided by ruling not to accept the appeal, so the Company is analyzing whether to take additional actions or close the process.
12,505
TAM Linhas Aéreas S.A.Receita Federal de Brasil10880.910559/2017-91Compensation non equate by CofinsIt is about the non-approved compensation of Cofins. Administrative defense submitted (Manifestação de Inconformidade). The Court dismissed the Company’s defense in December 2020.  The Company filed a voluntary appeal (CARF) that is pending a decision.12,623

109
CompanyCourtCase NumberOriginStage of trialAmounts
Committed (*)
ThUS$
TAM Linhas Aéreas S.A.Receita Federal de Brasil10880.910547/2017-67Compensation non equate by CofinsWe presented our administrative defense (Manifestação de Inconformidade). The Court dismissed the Company’s defense in December 2020.  The Company filed a voluntary appeal (CARF) that is pending a decision.14,579
TAM Linhas Aéreas S.A.Receita Federal de Brasil10880.910553/2017-14Compensation non equate by CofinsWe presented our administrative defense (Manifestação de Inconformidade). The Court dismissed the Company’s defense in December 2020.  The Company filed a voluntary appeal (CARF) that is pending a decision.14,063
TAM Linhas Aéreas S.A.Receita Federal de Brasil10880.910555/2017-11Compensation non equate by CofinsWe presented our administrative defense (Manifestação de Inconformidade). The Court dismissed the Company’s defense in December 2020.  The Company filed a voluntary appeal (CARF) that is pending a decision.14,815
TAM Linhas Aéreas S.A.Receita Federal de Brasil10880.910560/2017-16Compensation non equate by CofinsWe presented our administrative defense (Manifestação de Inconformidade). The Court dismissed the Company’s defense in December 2020.  The Company filed a voluntary appeal (CARF) that is pending a decision.12,953
TAM Linhas Aéreas S.A.Receita Federal de Brasil10880.910550/2017-81Compensation non equate by CofinsWe presented our administrative defense (Manifestação de Inconformidade). The Court dismissed the Company’s defense in December 2020.  The Company filed a voluntary appeal (CARF) that is pending a decision.15,001
TAM Linhas Aéreas S.A.Receita Federal de Brasil10880.910549/2017-56Compensation non equate by CofinsWe presented our administrative defense (Manifestação de Inconformidade). The Court dismissed the Company’s defense in December 2020.  The Company filed a voluntary appeal (CARF) that is pending a decision.12,552
TAM Linhas Aéreas S.A.Receita Federal de Brasil10880.910557/2017-01Compensation non equate by CofinsWe presented our administrative defense (Manifestação de Inconformidade). The Court dismissed the Company’s defense in December 2020.  The Company filed a voluntary appeal (CARF) that is pending a decision.11,892
TAM Linhas Aéreas S.AReceita Federal do Brasil10840.722712/2020-05Administrative trial that deals with the collection of PIS/Cofins proportionality (fiscal year 2015).We presented our administrative defense (Manifestação de Inconformidade). A decision is pending. The Company filed a voluntary appeal (CARF) that is pending a decision.34,537
TAM Linhas Aéreas S.A.Receita Federal do Brasil10880.978948/2019-86It is about the non-approved compensation/reimbursement of Cofins for the 4th Quarter of 2015. TAM filed its administrative defense on July 14, 2020.  A decision is pending. The Company filed a voluntary appeal (CARF) that is pending a decision.19,178

110
CompanyCourtCase NumberOriginStage of trialAmounts
Committed (*)
ThUS$
TAM Linhas Aéreas S.A.Receita Federal do Brasil10880.978946/2019-97It is about the non-approved compensation/reimbursement of Cofins for the 3th Quarter of 2015TAM filed its administrative defense on July 14, 2020.  A decision is pending. The Company filed a voluntary appeal (CARF) that is pending a decision.11,607
TAM Linhas Aereas S.A.Receita Federal do Brasil10880.978944/2019-06It is about the non-approved compensation/reimbursement of Cofins for the 2th Quarter of 2015TAM filed its administrative defense on July 14, 2020.  A decision is pending. The Company filed a voluntary appeal (CARF) that is pending a decision.12,299
Latam Airlines Group S.A23° Juzgado Civil de SantiagoC-8498-2020Class Action Lawsuit filed by the National Corporation of Consumers and Users (CONADECUS) against LATAM Airlines Group S.A. for alleged breaches of the Law on Protection of Consumer Rights due to flight cancellations caused by the COVID-19 Pandemic, requesting the nullity of possible abusive clauses, the imposition of fines and compensation for damages in defense of the collective interest of consumers. LATAM has hired specialist lawyers to undertake its defense.
On 06/25/2020 we were notified of the lawsuit. On 04/07/2020 we filed a motion for reversal against the ruling that declared the action filed by CONADECUS admissible, the decision is pending to date. On 07/11/2020 we requested the Court to comply with the suspension of this case, ruled by the 2nd Civil Court of Santiago, in recognition of the foreign reorganization procedure pursuant to Law No. 20,720, for the entire period that said proceeding lasts, a request that was accepted by the Court. CONADECUS filed a remedy of reconsideration and an appeal against this resolution should the remedy of reconsideration be dismissed.  The Court dismissed the reconsideration on August 3, 2020, but admitted the appeal. On March 1, 2023, the Court of Appeals resolved to omit the hearing of the case and pronouncement regarding the appeal, in view of the fact that in January 2023 LATAM's request the end of the suspension of the process that was decreed by resolution of July 17, 2020 in case file C-8498-2020 of the 23rd Civil Court of Santiago, for which the file was sent to the first instance to continue processing. On November 24, 2023, the Court dismissed LATAM’S motion for reversal against the ruling that declared the action filed by CONADECUS admissible. Accordingly, on December 4, 2023, LATAM filed the statement of defense. The amount at the moment is undetermined.
-0-

111
CompanyCourtCase NumberOriginStage of trialAmounts
Committed (*)
ThUS$
Latam Airlines Group S.A.25° Juzgado Civil de SantiagoC-8903-2020Class Action Lawsuit filed by AGRECU against LATAM Airlines Group S.A. for alleged breaches of the Law on Protection of Consumer Rights due to flight cancellations caused by the COVID-19 Pandemic, requesting the nullity of possible abusive clauses, the imposition of fines and compensation for damages in defense of the collective interest of consumers. LATAM has hired specialist lawyers to undertake its defense.
On July 7, 2020 we were notified of the lawsuit. We filed our answer to the claim on August 21, 2020. A settlement was reached with AGRECU at that hearing that was approved by the Court on October 5, 2020. On October 7, 2020, the 25th Civil Court confirmed that the decision approving the settlement was final and binding. CONADECUS filed a brief on October 4, 2020 to become a party and oppose the agreement, which was dismissed on October 5, 2020.  It petitioned for an official correction on October 8, 2020 and the annulment of all proceedings on October 22, 2020, which were dismissed, costs payable by CONADECUS, on November 16, 2020 and November 20, 2020, respectively.  LATAM presented reports on the implementation of the agreement on May 19, 2021, November 19, 2021 and May 19, 2022, which concluded its obligation to report on that implementation. On December 28, 2022 the Civil Court ordered the filing of the file. The National Consumer and User Association (CONADECUS) filed appeals against these decisions with the Santiago Appellate Court that were joined under Case #14,213-2020. Arguments were made on March 8, 2023. In a decision on August 8, 2023, the Appellate Court dismissed the appeals by CONADECUS, costs included. On August 26, 2023, CONADECUS filed a petition based on technicalities and substance against the Appellate Court ruling in order to have it reversed by the Supreme Court. LATAM petitioned that such appeals be declared inadmissible in a brief filed September 13, 2023. On November 30, 2023, the Supreme Court declared CONADECUS’ petition inadmissible. On December 7, 2023, LATAM requested the Appellate Court to determine the costs of the procedure which must be borne by CONADECUS. CONADECUS currently has no petitions against the settlement reached between LATAM and AGRECU. The amount at the moment is undetermined.
-0-
TAM Linhas Aéreas S.AReceita Federal de Brasil13074.726429/2021-41It is about the non-approved compensation/reimbursement of Cofins for the periods 07/2016 to 06/2017.TAM filed its administrative defense. (Manifestação de Inconformidade). A decision is pending19,762
TAM Linhas Aéreas S.A.Receita Federal de Brasil2007.34.00.009919-3(0009850-54.2007.4.01.3400)A lawsuit seeking to review the incidence of the Social Security Contribution taxed on 1/3 of vacations, maternity payments and medical leave for accident.A decision is pending 73,962

112
CompanyCourtCase NumberOriginStage of trialAmounts
Committed (*)
ThUS$
TAM Linhas Aéreas S.A.Tribunal del Trabajo de Brasília/DF0000038-25.2021.5.10.0017This civil suit was filed by the National Pilots Union seeking that the company be ordered to pay for meals daily when pilots are on alert status.The hearing is scheduled for April 15, 2024.13,923
TAM Linhas Aéreas S.A.UNIÃO FEDERAL0052711-85.1998.4.01.0000An indemnity claim to collect a differentiated price from the Federal Union because of the disruption of the economic equilibrium in the concession agreements between 1988 and 1992. The indemnity, should the action prosper, cannot be estimated (Price Freeze).The lawsuit began in 1993. In 1998, there was a decision favorable to TAM. The process reached the Court, and in 2019, the decision was against TAM. The company has appealed and a decision is pending.-0-
TAM Linhas Aéreas S.ATribunal do Trabajo de São Paulo1000115-90.2022.5.02.0312A class action whereby the Air Transport Union is petitioning for payment of additional hazardous and unhealthy work retroactively and in the future for maintenance/CML employees.
The instruction hearing is pending in this case, scheduled for 12:02 p.m. on April 25, 2024
15,747
TAM Linhas Aéreas S.AReceita Federal15746.728063/2022-00This is an administrative claim regarding alleged irregularities in the payment of Technical Assistance (SAT) in 2018. The administrative defense has been presented and a decision is pending.18,974
TAM Linhas Aéreas S.AUnião Federal1003320-78.2023.4.06.3800Legal action to discuss the debit of the administrative process 10611.720630/2017-16 (fine for violation of incorrect registration in DI- import declaration)Distributed on January 19, 2023. The company obtained a precautionary measure suspending the collection without the need for a guarantee. Process awaiting response from the National Treasury21,553

113
CompanyCourtCase NumberOriginStage of trialAmounts
Committed (*)
ThUS$
TAM Linhas Aéreas S.AUnião Federal12585.720017/2012-84This is a petition to recover a credit (proportional) in the 3rd quarter of 2010 under the Social Security Financing Contribution program (abbreviated as COFINS in Portuguese). An administrative defense was presented but was dismissed. The company filed a voluntary remedy before CARF that was also dismissed. A decision on the special remedy is now pending.10,542
TAM Linhas Aéreas S.AUnião Federal10880-982.487/2020-80This is a petition to recover a credit (proportional) in the 4rd quarter of 2016 under the Social Security Financing Contribution program (abbreviated as COFINS in Portuguese)An administrative defense was presented but was dismissed. The company filed a voluntary remedy before CARF. A decision on the special remedy is now pending.10,322
TAM Linhas Aéreas S.AUnião Federal10880-967.530/2022-49This is a petition to recover a credit (proportional) in the 1rd quarter of 2018 under the Social Security Financing Contribution program (abbreviated as COFINS in Portuguese). An administrative defense was presented. A decision is pending.10,671
TAM Linhas Aéreas S.AUnião Federal10880-967.532/2022-38This is a petition to recover a credit (proportional) in the 2rd quarter of 2018 under the Social Security Financing Contribution program (abbreviated as COFINS in Portuguese). An administrative defense was presented and a decision is pending.11,447
TAM Linhas Aéreas S.AUnião Federal10880-967.533/2022-82This is a petition to recover a credit (proportional) in the 4rd quarter of 2018 under the Social Security Financing Contribution program (abbreviated as COFINS in Portuguese). An administrative defense was presented and a decision is pending.20,154

114
CompanyCourtCase NumberOriginStage of trialAmounts
Committed (*)
ThUS$
TAM Linhas Aéreas S.AUnião Federal19613.725650/2023-86A Notice of Violation prepared in the petition by the Social Integration Program (abbreviated as PIS in Portuguese) and by COFINS on taxable events allegedly occurring between May 2018 and December 2018.An administrative defense was presented and a decision is pending.14,174
LATAM Airlines Group S.A.Tribunal de Defensa de la Libre Competencia445-2022On May 21, 2022, Agunsa filed a petition to TDLC for a preliminary preparatory measure of exhibition of documents in respect of Aerosan, Depocargo, Sociedad Concesionaria Nuevo Pudahuel and Fast Air in which Agunsa claimed that it was impacted by alleged anti-competition practices on the import cargo warehousing market at the Arturo Merino Benitez International Airport.
Fast Air was served on June 9, 2022 and on June 13, 2022, it lodged opposition against this petition, which was partially sustained by the Antitrust Court (TDLC) on July 19, 2022, in which the new exhibition date was set as August 22nd (the original date set by the court was July 1, 2022). On July 25, 2022, Fast Air requested a reconsideration of this latter court decision and petitioned that the temporary scope of the exhibition be reduced. Fast Air’s petition was sustained and the scope of the documents to be revealed was limited even further. On August 12th, Fast Air petitioned that a new date and time be set for the exhibition hearing. The court granted this latter request on August 17th and set the exhibition date as August 31st. Fast Air appeared with 368 files and asked for confidentiality and/or secrecy of all of the information presented. The public versions have already been added to the case file as final versions. Aerosan began a separate, but related, non-contentious inquiry on April 20, 2023 before the Anti-Trust Court (abbreviated as TDLC in Spanish) petitioning that the TDLC decide whether the enforcement of Exempt Resolution #152 of the National Customs Bureau would violate Decree Law 211. Said Resolution #152 granted Agunsa permission to operate as a cargo warehouse at the North Warehouse facility. On January 10, 2024, the Public Hearing of the case was held, which was in state of agreement. For the time being, the amount is indeterminate.
-0-

115
CompanyCourtCase NumberOriginStage of trialAmounts
Committed (*)
ThUS$
LATAM Airlines Group S.A.Tribunal de Defensa de la Libre Competencia489-2023A preliminary precautionary measure was filed by the Tourism Companies Trade Association of Chile seeking that LATAM’s NDC system cease to be implemented or, alternatively, that collection of the Distribution Cost Recovery Fee be suspended and that LATAM be forbidden to limit the inventory of tickets available through the indirect distribution channel.On May 24, 2023 the preliminary measure was initially rejected. However, after accepting an appeal for reinstatement of ACHET, said resolution was annulled on June 8, 2023, providing instead that partially accepts the precautionary measure only in terms of suspending the Distribution Cost Recovery Fee and prohibiting any unjustified limitation of the inventory of tickets available for the indirect distribution channel. Currently awaiting a final ruling from the Court. The preliminary measure cannot be implemented until such a decision is rendered. For the time being, the amount is indeterminate.-0-
LATAM Airlines Group S.A.23° Juzgado Civil de SantiagoC-8156-2022A class action filed by CONADECUS against LATAM Airlines Group S.A. for alleged violations of the Consumer Protection Law because of the cancellation of tickets for international flights purchased through travel agencies. It petitioned for fines and damage indemnities to be imposed in defense of the collective and/or diffuse interest of consumers. LATAM has retained specialized legal counsel to defend it.We were served the claim on September 21, 2023. On September 30, 2023, we filed a remedy of reconsideration against the decision that declared the lawsuit filed by CONADECUS admissible, which was dismissed by the Court on November 11, 2023. A decision on that appeal is pending at this time. On November 18, 2023, LATAM filed the statement of defense. For the time being, the amount is undetermined.-0-

116
CompanyCourtCase NumberOriginStage of trialAmounts
Committed (*)
ThUS$
TAM Linhas Aéreas S.AUnião Federal10880.967587/2022-48This is about the unaccredited compensation/reimbursement and redress regarding the improper payment of the monthly federal social assistance contribution (Cofins, as abbreviated in Portuguese) made in the third quarter of 2018.The administrative defense has been presented and a decision is pending.11,518

117
CompanyCourtCase NumberOriginStage of trialAmounts
Committed (*)
ThUS$
LATAM Airlines Group S.A.Tribunal de Defensa de la Libre CompetenciaNC-388-2011
On August 11, 2012, the Civil Aviation Administration (“JAC,” as abbreviated in Spanish) filed a petition for clarification with the Anti-Trust Court (“TDLC,” as abbreviated in Spanish) regarding Condition VIII.4 of Decision #37/2011 (“Condition VII.4”). The petition seeks to impose a temporary 5 years limitation on 23 frequencies assigned by the JAC to LATAM after Decision #37 was issued.
LATAM filed a brief with the TDLC on August 27, 2023, petitioning that the JAC petition for clarification be dismissed because it was an improper request to change Condition VIII.4. The TDLC dismissed the JAC’s petition for clarification on September 13, 2023. The JAC filed an appeal against the TDLC’s ruling dismissing its petition for clarification on September 23, 2023. LATAM petitioned that said appeal by the JAC be declared inadmissible on September 30, 2023. The TDLC declared it admissible (it admitted the appeal for processing) on October 2, 2023, and LATAM filed a remedy of reconsideration against that decision on October 7, 2023, accompanied by a legal opinion. The TDLC accepted LATAM’s remedy of reconsideration on October 17, 2023 and amended its previous ruling and dismissed the JAC’s petition for clarification. On October 23, 2023, the JAC presented an appeal to the Supreme Court requesting that the TDLC resolution be annulled and petitioned declared admissible the remedy of reconsideration. On November 3, 2023, LATAM became part of the de facto appeal and requested its rejection. On December 20, 2023, the TDLC sent a report to the Supreme Court. On January 6, 2024, the JAC presented a note in relation to the TDLC report. On January 9, 2024, LATAM presented a document in response to the JAC presentation in which it analyzed the TDLC report.

In a separate but related process, JetSmart filed a non-contentious inquiry on September 26, 2023, in relation to the terms of the future public tender of aviation frequencies on the Santiago-Lima route. JetSmart requested an injunction to suspend the tender and maintain the aviation frequency assignments as currently held until the inquiry has finalized. The TDLC declared the inquiry admissible on October 2, 2023, but only to begin a procedure to determine whether the rules in the terms of the public aviation frequency tender violate Decree Law 211, and dismissed the request for provisional measures. On October 4, 2023, JetSmart filed two motions for reconsideration against the TDLC’s decision. The JAC became a party to such motions on October 6, 2023 and LATAM became a party to the process on October 10, 2023, and it requested that the motions filed by JetSmart be dismissed. On October 16, 2023, the TDLC took into account the considerations presented by LATAM and rejected the two motions for reconsideration filed by JetSmart. On October 19, 2023 CONADECUS requested to become part of this process and requested the same injuction previously rejected twice by the TDLC. On October 23, 2023 LATAM submitted a brief to the TDLC requesting the rejection of saidinjuction now requested by CONADECUS. On October 23, 2023, a public auction was held by JAC for thirteen international frequencies for the Santiago - Lima route, LATAM won ten of thirteen of these routes. On October 24, 2023, JetSmart once again requested that an injunction be issued regarding the public tender of aviation frequencies on the Santiago-Lima route. On November 2, 2023, the TDLC rejected the request for injunctions submitted by JetSmart and CONADECUS. On December 5, 2023, JetSmart complied with TDLC procedural order and published in the Chilean official newspaper a notice calling interested parties and stakeholders to submit information and opinions regarding JetSmart’s inquiry . On December 21, 2023 the FNE requested to be an intervening party in the process and requested to extend the deadline to provide background information. The TDLC accepted the postponement, leaving the deadline for providing information as February 5, 2024. On February 1, 2024, LATAM submitted a brief to TDLC advocating for its position and providing background information regarding JetSmart’s inquiry.
-0-

118
CompanyCourtCase NumberOriginStage of trialAmounts
Committed (*)
ThUS$
TAM Linhas Aéreas S.A.União Federal10880.967612/2022-93This is a petition to recover a credit Cofins in the 1rd quarter of 2019 (proportional)The administrative defense has been presented and a decision is pending.11,416
TAM Linhas Aéreas S.A.Superior Tribunal de Justiça (STJ)0042711-61.2007.8.05.0001 (1449899)Trial involving a commercial representation contract signed directly with the company Gm Serviços Auxiliares de Transporte Aéreo Ltda. alleging the irregular closing of the contract, requesting payment of compensation.The procedure before the Court of Appeal is pending11,231

119
CompanyCourtCase NumberOriginStage of trialAmounts
Committed (*)
ThUS$
LATAM Airlines Group S.A Sucursal PerúTribunal Fiscal12511-2022Appeal for $34MM, presented on October 11, 2022, against the Intendencia resolution No. 4070140000100, which declared unfounded the claim filed by the Company on September, 20, 2022, against the Determination Resolutions for alleged omissions of the Income Tax corresponding to the period 2014 and associated fines for the violation typified in numeral 1 of article 178 of the Tax Code. The main objections relate to SUNAT's lack of knowledge of the application of article 8 of the CDI between Peru and Chile regarding: i) Income obtained from the exclusivity contract of the Latam Pass program with the Banco de Crédito del Perú, ii) Income from sale of miles to non-airline partners and associated cost (sale of miles from the Latam Pass program to legal companies).The resolution is pending.34,000
TAM Linhas Aéreas S.AUNIÃO FEDERAL1012674-80.2018.4.01.3400Legal actions for members to have the right to collect contributions in the payroll collectible on the basis of gross sales.This claim was filed in 2018. In January 2020, a decision favorable to the Company was rendered so that contributions would be collected on the basis of gross income. The company recently learned that the Superior Courts are rendering decisions unfavorable to contributors. They have ruled against the contributor in a recent decision. In December/2023 the position was withdrawn.-0-

120
CompanyCourtCase NumberOriginStage of trialAmounts
Committed (*)
ThUS$
LATAM Airlines Perú S.A.Tribunal FiscalExpediente de Apelación N° 2545-2023Appeal against the resolution of the Intendencia No. 4070140000253 that declared the claim against Determination Resolutions No. 0120030126112 to 0120030126123 and RM No. 0120020037412 to 0120020037423 partially founded. The objections contested through the values indicated above correspond to the taxable base of the IGV for the national interline (domestic national sale).On September 16, 2022, an appeal was filed against the determination and fine resolutions issued by SUNAT; being that, through Resolution of the Intendencia No. 4070140000253, the claim filed by the company was partially founded and, in addition, (i) it rectified Annexes No. 01, 04, 05 and 06 of RD No. 0120030126112 to No. 0120030126123. , (ii) the Annex to RM N° 0120020037412 to N° 0120020037423, (iii) the balance in favor of the IGV for the tax periods of January and July 2016 contained in RD N° 0120030126112 and 0120030126118; and, (iv) rectified and continued the collection of the tax debt contained in RD No. 0120030126113 to 0120030126117 and 0120030126119 to 0120030126123 and RM No. 0120020037412 to 0120020037423. On January 11, 2023, an appeal was filed against the aforementioned resolution, which was admitted for processing and elevated to room 9 of the Tax Court. Currently the file is pending resolution.45,162
LATAM Airlines Perú S.A.Superintendencia Nacional de Administración Tributaria (SUNAT)Expediente de Reclamación N° 4070340000412.Claim against Determination Resolution No. 0120030130232, Fine Resolution No. 0120020038314, notified on 12.22.2022 and Determination Resolution No. 0120030130245 for indirect disposal of income not susceptible to subsequent tax control linked to the objections made to determination of third category net income for fiscal year 2015On January 26, 2023, the Company filed an appeal against the determination and fine resolutions issued by SUNAT. Through Resolution of the Intendencia No. 4070340000928 dated December 19, 2023, SUNAT declared the appeal filed by the Company founded and, consequently, Determination Resolutions No. 012-003-0130232, No. 012-003- 0130245 and Fine Resolution No. 012-002-0038314 are void. Currently, the Gerencia de Fiscalización I and the Gerencia de Fiscalización Internacional y de Precios de Transferencia de la Intendencia de Principales Contribuyentes Nacionales of the SUNAT are pending to issue the inspection requirements necessary to correct the invalidity defects declared by the Intendencia Nacional de Impugnaciones.185,987

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In order to deal with any financial obligations arising from legal proceedings in effect at December 31, 2023, 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 20.

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 April 6, 2019, LATAM Airlines Group S.A. received the resolution issued by the National Economic Prosecutor's Office (FNE), which begins an investigation Role No. 2530-19 into the LATAM Pass frequent passenger program. The last activity in this investigation corresponds to request for information received in May 2019.

2) On July 26, 2019, the National Consumer Service of Chile (SERNAC) issued the Ordinary Resolution No. 12,711 which proposed to initiate a collective voluntary mediation procedure on effectively informing passengers of their rights in cases of cancellation of flights or no show to boarding, as well as the obligation to return the respective boarding fees as provided by art. 133 C of the Aeronautical Code. The Company has voluntarily decided to participate in this proceeding, in which an agreement was reached on March 18, 2020, which implies the return of shipping fees from September 1, 2021, with an initial amount of ThUS$ 5,165, plus ThUS$ 565, as well as information to each passenger who has not flown since March 18, 2020, that their boarding fees are available. On January 18, 2021, the 14th Civil Court of Santiago approved the aforesaid agreement. LATAM published an abstract of the decision in nationwide newspapers in compliance with the law. LATAM began performance of the agreement on September 3, 2021. In April and October 2022, and in April and November 2023 the external auditors presented preliminary reports agreed upon with the National Consumer Service (SERNAC). The implementation of a voluntary class procedure concluded on September 3, 2023.

3) On October 15, 2019, LATAM Airlines Group S.A. received the resolution issued by the National Economic Prosecuting Authority (“FNE”) which begins an investigation Role N°2585-19 into the agreement between LATAM Airlines Group S.A. and Delta Air Lines, Inc (“Delta”). On August 13, 2021 FNE, Delta and LATAM reached an out-of-court agreement that put an end to this investigation. On October 28, 2021, the Tribunal de Defensa de la Libre Competencia approved the out-of-court agreement reached by LATAM and Delta with the FNE.

4) LATAM Airlines Group S.A. received a resolution by the National Economic Prosecutor (FNE) on February 1, 2018 beginning Investigation 2484-18 on air cargo carriage. On August 29, 2023, the Office of the National Economic Prosecutor (FNE) decided to separate part of the information from such investigation and created a new Case #2729-23 relative to cargo carriage on charter flights from Santiago to Easter Island during the pandemic. The latest activity in the investigation of Case 2484-18 is an Official Ordinary Letter issued August 28, 2023 in which it requested additional information from LATAM. That letter was answered on September 27, 2023.

5) LATAM Airlines Group S.A. received a resolution by the National Economic Prosecutor (FNE) on August 12, 2021 beginning Investigation N° 2669-21 on compliance with condition VII Res. N° 37/2011 from TDLC related to restrictions as to certain codeshare agreements. On October 2, 2023, the FNE decided to separate part of the information in such investigation. Case #2737-23 will be about the code share agreements between LATAM and Delta that LATAM petitioned be amended; and Case #2669-21 will be about the remaining code share agreements. In relation to the investigation with Role No. 2737-23, dated November 06, 2023, the FNE and LATAM reached an extrajudicial agreement in order to allow certain codeshare agreements between LATAM and Delta to be modified. On December, 7, 2023, TDLC approved the extrajudicial agreement reached by LATAM and the FNE.

6) The competition authority sent an inquiry [or request] to TAM Linhas Aéreas S.A. (LATAM Airlines Brasil) with the objective of obtaining information regarding certain pricing issues, which was received by the

122
company on November 27, 2023. LATAM Airlines Brasil is cooperating with the authority and remains committed to transparency and compliance with all applicable rules and regulations.

.
NOTE 31 - COMMITMENTS



(a)     Commitments arising from loans

In relation to certain contracts committed by the Company for the financing of the Boeing 777 aircraft, which are guaranteed by the Export – Import Bank of the United States of America, limits have been established for some financial indicators of LATAM Airlines Group S.A. on a consolidated basis. Under no circumstance does non-compliance with these limits generate loan acceleration.

The Company and its subsidiaries do not have credit agreements that impose limits on financial indicators of the Company or its subsidiaries, with the exception of those detailed below:

On October 12, 2022, LATAM Airlines Group S.A., acting through its Florida branch, closed a new four year revolving credit facility (“Exit RCF”) of US$ 500 million with a consortium of five banks led by JP Morgan Chase Bank, N.A. As of December 31, 2023, this credit facility is undrawn and fully available. In addition, LATAM Airlines Group S.A., together with Professional Airline Services, Inc., a Florida corporation and a wholly owned subsidiary of LATAM Airlines Group S.A., issued (i) on October 12, 2022, as modified on November 3, 2022, a five-year term loan facility (“Term Loan B Facility”) of US$ 1,100 million (US$ 1,089 million outstanding as of December 31, 2023), (ii) on October 18, 2022, a 13.375% senior secured notes due 2027 (“2027 Notes”) for an aggregate principal amount of US$ 450 million and (iii) on October 18, 2022, a 13.375% senior secured notes due 2029 (“2029 Notes”, together with the 2027 Notes, the “Notes”) for and aggregate principal amount of MUS$ 700. The Exit RCF, the Term Loan B Facility and the Notes (together, the “Exit Financing”) share the same intangible collateral composed mainly of the FFP (LATAM Pass loyalty program) business receivables, Cargo business receivables, certain slots, gates and routes and LATAM’s intellectual property and brands. The Exit Financing contains certain covenants limiting us and our restricted subsidiaries’ ability to, among other things, make certain types of restricted payments, incur debt or liens, merge or consolidate with others, dispose of assets, enter into certain transactions with affiliates, engage in certain business activities or make certain investments. In addition, the agreements include a minimum liquidity restriction, requiring us to maintain a minimum liquidity, measured at the consolidated Company (LATAM Airlines Group S.A.) level, of US$ 750 million.

On November 3, 2022, LATAM Airlines Group S.A., acting through its Florida branch, amended and extended the 2016 revolving credit facility (“RCF”) with a consortium of thirteen financial institutions led by Citibank, N.A., guaranteed by aircraft, engines and spare parts for a total committed amount of US$ 600 million. The RCF includes restrictions of minimum liquidity measured at the consolidated Company level (with a minimum level of US$ 750 million) and measured individually for LATAM Airlines Group S.A. and TAM Linhas Aéreas S.A. (with a minimum level of US$ 400 million). Compliance with these restrictions is a prerequisite for drawing under the line; if the line is used, compliance with said restrictions must be reported periodically, and non-compliance with these restrictions may trigger an acceleration of the loan. As of December 31, 2023, this line of credit is undrawn and fully available.

On November 3, 2022, LATAM Airlines Group S.A., acting through its Florida branch, executed a five year credit facility (“Spare Engine Facility”) with, among others, Crédit Agricole Corporate and Investment Bank, acting through its New York branch, as facility agent and arranger and guaranteed by spare engines for a principal amount of US$ 275 million. As of December 31, 2023, the outstanding amount under the Spare Engine Facility is US$ 266.8 million. The facility includes restrictions of minimum liquidity measured at the consolidated Company level (with a minimum level of US$ 750 million) and measured individually for LATAM Airlines Group S.A. and TAM Linhas Aéreas S.A. (with a minimum level of US$ 400 million jointly).

As of December 31, 2023, the Company complies with the aforementioned minimum liquidity covenants.








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b)     Other commitments

As of December 31, 2023, the Company maintains valid letters of credit, guarantee notes and guarantee insurance policies, according to the following detail:


Creditor GuaranteeDebtorQuantityTypeValue
ThUS$		Release
Date
SUPERINTENDENCIA NACIONAL DE ADUANAS Y DE ADMINISTRACION TRIBUTARIALATAM Airlines Perú S.A.49Letter of Credit202,583 Jan 11, 2024
SÉTIMA TURMA DO TRIBUNAL REGIONAL FEDERAL DA 1ª REGIÃO - PROCEDIMENTO COMUM CÍVEL - DECEA - 0012177-54.2016.4.01.3400TAM Linhas Aereas S.A.1Guarantee Insurance57,554 Apr 20, 2025
ISOCELESLATAM Airlines Group S.A.1Letter of Credit41,000 Aug 1, 2026
UNIÃO FEDERAL ( FAZENDA NACIONAL)TAM Linhas Aereas S.A.1Guarantee Insurance33,045 Jul 30, 2024
UNIÃO FEDERAL - PGFNABSA Aerolinhas Brasileiras S.A.2Guarantee Insurance21,538 Feb 22, 2025
UNIÃO FEDERAL - PGFNTAM Linhas Aereas S.A.4Guarantee Insurance21,131 Sep 28, 2024
UNIÃO FEDERAL - FAZENDA NACIONALABSA Aerolinhas Brasileiras S.A.2Guarantee Insurance17,838 Apr 14, 2025
UNIÃO FEDERALTAM Linhas Aereas S.A.5Guarantee Insurance11,226 Feb 4, 2025
FUNDACAO DE PROTECAO E DEFESA DO CONSUMIDOR PROCONTAM Linhas Aereas S.A.7Guarantee Insurance10,844 Apr 2, 2024
VARA DAS EXECUÇÕES FISCAIS ESTADUAIS DE SÃO PAULO - FORO DAS EXECUÇÕES FISCAIS DE SÃO PAULOTAM Linhas Aereas S.A.1Guarantee Insurance9,752 Mar 4, 2025
AMERICAN ALTERNATIVE INS. CO. C/O ROANOKE INS. GROUP INCLATAM Airlines Group S.A.19Letter of Credit6,305 Feb 1, 2024
TRIBUNAL DE JUSTIÇA DO ESTADO DE SÃO PAULOABSA Aerolinhas Brasileiras S.A.2Guarantee Insurance6,263 Dec 31, 2099
BBVALATAM Airlines Group S.A.1Letter of Credit3,800 Jan 23, 2025
1° VARA DE EXECUÇÕES FISCAIS E DE CRIMES CONTRA A ORDEM TRIB DA COM DE FORTALEZATAM Linhas Aereas S.A.1Guarantee Insurance2,962 Dec 31, 2099
FUNDAÇÃO DE PROTEÇÃO E DEFESA DO CONSUMIDOR DE SÃO PAULO - PROCONTAM Linhas Aereas S.A.1Guarantee Insurance5,016 Mar 7, 2025
BOND SAFEGUARD INSURANCE COMPANYTAM Linhas Aereas S.A.1Guarantee Insurance2,700 Jul 20, 2024
COMISÓN EUROPEALATAM Airlines Group S.A.1Letter of Credit2,598 Mar 29, 2024
UNIAO FEDERAL (FAZENDA NACIONAL)TAM Linhas Aereas S.A.1Guarantee Insurance2,457 Nov 16, 2025
17ª VARA CÍVEL DA COMARCA DA CAPITAL DE JOÃO PESSOA/PBTAM Linhas Aereas S.A.1Guarantee Insurance2,527 Jun 25, 2028
PROCON - FUNDACAO DE PROTECAO E DEFESA DO CONSUMIDORTAM Linhas Aereas S.A.2Guarantee Insurance4,178 Nov 17, 2025
JFK INTERNATIONAL AIR TERMINAL LLCLATAM Airlines Group S.A.1Letter of Credit2,300 Jan 27, 2024
METROPOLITAN DADE CONTY (MIAMI - DADE AVIATION DEPARTMENT)LATAM Airlines Group S.A.6Letter of Credit2,462 Mar 13, 2024

124
Creditor GuaranteeDebtorQuantityTypeValue
ThUS$		Release
Date
SÉTIMA TURMA DO TRIBUNAL REGIONAL FEDERAL DA 1ª REGIÃO - PROCEDIMENTO COMUM CÍVEL - DECEA - 0012177-54.2016.4.01.3400ABSA Aerolinhas Brasileiras S.A.1Guarantee Insurance2,245May 7, 2025
SERVICIO NACIONAL DE ADUANA DEL ECUADORLATAM-Airlines Ecuador S.A.4Letter of Credit2,130May 8, 2024
VARA DE EXECUÇÕES FISCAIS ESTADUAIS DA COMARCA DE SÃO PAULO/SP - EXECUÇÃO FISCAL N.º 1507367-03.2016.8.26.0014TAM Linhas Aereas S.A.1Guarantee Insurance2,025Apr 24, 2025
SOCIEDAD CONCESIONARIA NUEVO PUDAHUEL S.A.LATAM Airlines Group S.A.18Letter of Credit1,551Mar 29, 2024
14ª VARA FEDERAL DA SEÇÃO JUDICIÁRIA DO DISTRITO FEDERAL / TRIBUNAL: 7ª TURMA DO TRIBUNAL REGIONAL FEDERAL DA 1ª REGIÃO - ANULATÓRIA N.º 0007263-25.2008.4.01.3400TAM Linhas Aereas S.A.1Guarantee Insurance1,867May 29, 2025
UNIÃO FEDERAL, REPRESENTADO PELA PROCURADORIA SECCIONAL DA FAZENDA NACIONAL EM CAMPINASABSA Aerolinhas Brasileiras S.A.1Guarantee Insurance1,931Nov 30, 2025
FIANÇA TAM LINHAS AÉREAS X JUIZ FEDERAL DE UMA DAS VARAS DA SEÇÃO JUDICIÁRIA DE BRASÍLIA/TAM Linhas Aereas S.A.1Guarantee Insurance1,810Dec 31, 2099
LIMA AIRPORT PARTNERS S.R.L.LATAM Airlines Group S.A.32Letter of Credit1,628Dec 31, 2023
TRIBUNAL DE JUSTIÇA DO ESTADO DE SÃO PAULOTAM Linhas Aereas S.A.1Guarantee Insurance964Dec 31, 2099
UNIDAD ADMINISTRATIVA BOGOTÁLATAM Airlines Group S.A.4Letter of Credit1,432Apr 17, 2024
JUIZO DE DIREITO DA VARA DA FAZENDA PUBLICA ESTADUAL DA COMARCA DA CAPITAL DO ESTADO DO RIO DE JANEIROTAM Linhas Aereas S.A.1Guarantee Insurance1,435Dec 31, 2099
JFK INTERNATIONAL AIR TERMINAL LLCTAM Linhas Aereas S.A.1Guarantee Insurance1,300Jan 25, 2024
MUNICIPIO DO RIO DE JANEIROTAM Linhas Aereas S.A.1Guarantee Insurance1,239Dec 31, 2099
AENA AEROPUERTOS S.ALATAM Airlines Group S.A.2Letter of Credit2,370Nov 15, 2024
CITY OF LOS ANGELES, DEPARTMENT OF AIRPORTS LATAM Airlines Group S.A.5Letter of Credit1,074Jan 2, 2024
FUNDAÇÃO DE PROTEÇÃO E DEFESA DO CONSUMIDOR DO ESTADO DE SÃO PAULOTAM Linhas Aereas S.A.1Guarantee Insurance1,152Dec 31, 2099
PARQUE DE MAETERIAL AERONAUTICO DO GALEAO - PAMA GLTAM Linhas Aereas S.A.1Guarantee Insurance1,053Jun 18, 2024
497,285

Letters of credit related to right-of-use assets are included in Note 16 Property, plant and equipment letter (d) Additional information Property, plant and equipment, in numeral (i) Property, plant and equipment delivered as collateral.

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NOTE 32 - TRANSACTIONS WITH RELATED PARTIES

(a)     Details of transactions with related parties as follows:
Tax No.Related partyNature of relationship with related partiesCountry
of origin		Nature of related parties transactionsCurrencyFor the year ended At December 31,
20232022
ThUS$ ThUS$
96.810.370-9Inversiones Costa Verde Ltda. y CPA.Related directorChileTickets salesCLP12487
81.062.300-4Costa Verde Aeronautica S.A.Common shareholderChileLoans received (*)US$—(231,714)
Interest received (*)US$—(21,329)
Capital contributionUS$—170,962
87.752.000-5Granja Marina Tornagaleones S.A.Common shareholderChileServices providedCLP—36
96.989.370-3Rio Dulce S.A. (**)Related directorChileTickets salesCLP—2
ForeignInversora Aeronáutica Argentina S.A.Related directorArgentinaReal estate leases receivedARS(59)(63)
Expense recoveryARS3—
ForeignTAM Aviação Executiva e Taxi Aéreo S.A.Common shareholderBrazilServices provided of passenger transportBRL—4
ForeignQatar AirwaysIndirect shareholderQatarInterlineal received serviceUS$(22,107)(23,110)
Interlineal provided serviceUS$31,02037,855
Services received of handlingUS$(252)—
Services provided of handlingUS$—692
Services received milesUS$(4,657)(4,974)
Services provided milesUS$1,683894
Services provided / received othersUS$1,424(1,238)
ForeignDelta Air Lines, Inc.ShareholderU.S.AInterlineal received serviceUS$(144,239)(111,706)
Interlineal provided serviceUS$127,145102,580
Services received milesUS$(11,069)(3,992)
Services provided milesUS$7,3282,410
Loans received (*)US$—(233,026)
Interest received (*)US$—(10,374)
Capital contributionUS$—163,979
Services provided of handlingUS$(3,657)(4,340)
Engine saleUS$—19,405
Joint ventureUS$(10,000)—
Real estates leases providedUS$86—
Services provided / received othersUS$982(311)
ForeignQA Investments LtdCommon shareholderU.K.Loans received (*)US$—(240,440)
Interest received (*)US$—(26,153)
Capital contributionUS$—163,979
ForeignQA Investments 2 LtdCommon shareholderU.K.Loans received (*)US$—(7,414)
Interest received (*)US$—(15,780)
ForeignLozuy S.A.Common shareholderUruguayLoans received (*)US$—(57,928)
Interest received (*)US$—(5,332)

126

(*) Operations corresponding to DIP loans tranche C.
The balances corresponding to Accounts receivable and accounts payable to related entities are disclosed in Note 9.
Transactions between related parties have been carried out under market conditions and duly informed.
(**) Related companies until November 2022




(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 macro guidelines and who directly affect the results of the business, considering the levels of Vice-Presidents, Chief Executives and Senior Directors.
For the year ended at December 31,
20232022
ThUS$ThUS$
Remuneration12,815 10,651 
Board compensation1,429 1,109 
Non-monetary benefits606 565 
Short-term benefits13,604 11,814 
Termination benefits (*)59 1,157 
Total28,513 25,296 

In accordance with current legislation, the Ordinary Shareholders’ Meeting held on April 20, 2023, determined the amount of the annual remuneration for the Board for the period from that date until the next Ordinary Shareholders’ Meeting scheduled to take place within the first quarter of 2024. In this context, in addition to the base remuneration, an additional remuneration was approved for each Board member, with an incremental amount based on the following criteria:

(a)During the first year following their appointment, until November 15, 2023, provided that the Director serves continuously in their position, each Director will be entitled to receive an additional amount to the base remuneration, equivalent to 9,226,234 units of remuneration or “URAs.”

(b)For the second year following their appointment, covering the period from the end of the first anniversary since their designation until November 15, 2024, under the same condition mentioned previously and approved by the Ordinary Shareholders’ Meeting in the first quarter of 2024, each Director will be entitled to receive another additional amount equivalent to 9,226,234 URAs.

(c)Likewise, each Director who becomes part of the Board Committee will also receive, as additional compensation, a variable amount equivalent to an additional one-third (1/3) calculated on the incremental remuneration that the respective Committee member is entitled to as a Director, in accordance with the resolution of the Ordinary Shareholders’ Meeting.

For payment purposes, the value of each URA will be considered as referentially equivalent to the price of a company’s share. Consequently, URAs will be paid at the weighted average price of stock market transactions of the company’s shares during the 10 business days preceding the effective date (“Weighted Average Price”). For the calculation of the Weighted Average Price, transactions on national stock exchanges, as well as those on foreign exchanges recognized at the national level where LATAM’s American Depositary Shares may eventually be listed again, will be taken into account.






127



The amounts paid during the 2023 fiscal year for this concept, in accordance with the above, are:


Paid during the year
2023
ThUS$
URAs Directors481 
URAs Board Committee53 
Total534 


NOTE 33 - SHARE-BASED PAYMENTS

(a)      LP3 compensation plans (2020-2023)

The Company implemented a program for a group of executives, which existed until March 2023, with a demand period between October 2020 and March 2023, where the collection percentage was annual and cumulative. The methodology is an estimate of the number of units, where a goal of the value of the action is set.

The benefit is vested if the target of the share price defined in each year is met. In case the benefit accumulates up to the last year the total benefit is doubled (in case the share price is achieved).

This Compensation Plan was finally not executed because the share price required for its collection is below the initial target.

(b) CIP (Corporate Incentive Plan)

As indicated in Note 22, in the context of the exit from Chapter 11 Proceedings, the Company implemented a talent retention program for the Company's employees, which is divided into three categories. The first one (i.e., Non-Executive Employees) simply contemplates guaranteed payments in cash to the respective employees on certain dates depending on the country where the employee is hired. On the other hand, the remaining two categories (i.e., Non-GEM Executives and GEM Executives) contemplated the granting of synthetic units of remuneration (the "Units") that, by reference, are considered as equivalent to the price of one share of LATAM Airlines Group S.A. and consequently, in case they become effective, grant the worker the right to receive the payment in cash that results from multiplying the number of Units that are pay for the value per share of LATAM Airlines Group S.A. that must be considered in accordance with the CIP.

Below are more details of these two categories.

Non-GEM Executives

The first subprogram applies to senior executives not part of the GEM (Global Executive Meeting - Senior Managers, Managers, Deputy Managers). In this context, this program contemplates two different bonuses: (1) a retention bonus, consisting of the amount in money resulting from Units that are assigned to the respective employee and these Units being paid 20% on month 15 and 80% at month 24, in each case, counted from Exit date from the Chapter 11 Procedure (i.e., November 3, 2022) (the "Exit Date"). This is consequently, a guaranteed payment for these employees; and (2) a bonus associated to the performance defined on based on the compliance of certain financial indicators of LATAM Airlines Group S.A. and its subsidiaries, which is reflected in Note 19(b), becoming effective 20% at month 15 and 80% at month 24, in each case, from the Exit Date. Consequently, this is a temporary payment that is only made if these indicators are met.



128


GEM Executives

Applies to senior executives of the Company who are part of the GEM (CEO and employees whose job description is "vice presidents" or "directors"). Employees that participating in this program are eligible to receive cash payments for Units. These Units are as follows:

1. "RSUs" (Retention Shares Units): That is, Units associated with the employee's permanence in the Company, and consequently, are associated with the passage of time. In its totality, the CIP contemplates up to 3,107,603,293 RSUs which are made effective by partialities in the terms indicated below.

As a general rule, RSUs will be eligible to become effective at the rate of one third on each of the following dates: month 24, month 36 and month 42, in each case, counted from the Exit Date. The mentioned above, subject to the occurrence of a trigger event related to the volume of transactions of securities issued by LATAM Airlines Group S.A. in the terms contemplated in the CIP (hereinafter, a "VTE" – Volume Triggering Event). The number of RSUs actually paid will be determined based on the net resources accumulated as a result of a VTE on the respective determination date (hereinafter, this adjustment will be referred to as the "Pro Rata Factor").

Notwithstanding the mentioned above, the CIP also contemplates a "Minimum Guaranteed Vesting" according to which, the percentage of RSUs indicated below will be effective on each date indicated, even if a VTE has not occurred. The foregoing, net of the RSUs that may eventually have become effective previously.

Minimum Guaranteed Vesting of RSUs
Percentage of Units that become effective
Month 30 from Exit Date20%
Month 42 from Exit Date30%
Month 60 from Exit Date50%

2. "PSUs" (Performance Shares Units): That is, Units associated with both the employee's permanence in the Company and the performance of LATAM Airlines Group S.A. measured according to the share price. Consequently, like RSUs, these Units are associated with the passage of time. However, PSUs also consider the market value of the share of LATAM Airlines Group S.A. considering a liquid market. However, as long as there is no such liquid market, the share price will be determined on the basis of representative transactions. In its totality, the CIP contemplates up to 4,251,780,158 PSUs which are made effective by partialities in the terms indicated below.

As a general rule, PSUs will be eligible to become effective at the rate of one third on each of the following dates: month 24, month 36 and month 42, in each case, counted from the Exit Date. The foregoing, subject to (i) a VTE having occurred; and (ii) that the quotient (hereinafter, the "Net Price/ERO (Equity Rights offering) Quotient") between the net price of sales originating in a VTE, divided by the price of share at which the shares issued were placed under the capital increase agreed at the extraordinary shareholders' meeting of LATAM Airlines Group S.A. dated July 5, 2022 (that is, US$ 0.01083865799), is greater than 150%. The number of PSUs that actually becomes effective will be determined according to the Factor Pro Rata and the Quotient Net Price/ERO Price).

From the above it flows that the PSUs constitute an eventual and not guaranteed payment.

In addition, some of the GEM Executives will also be entitled to receive a fixed and guaranteed payment in cash ("MPP" – Management Protection Plan) on certain dates under the Plan, at the rate of 33% in the month 18, 34% in the month 24 and 33% in the 30th month, all from the Exit Date. On the other hand, those employees who are eligible for this MPP will also be eligible for a limited number of additional RSUs ("MPP Based RSUs"). In its totality, the CIP includes 1,438,926,658 MPP based RSUs. As a general rule, MPP Based RSUs

129
will be eligible to become effective on the same terms and conditions as RSUs; however, that they will be eligible to become effective at a rate of one third on each of the following dates: month 18, month 24 and month 30, in each case, from the Exit Date. The valuation of these Units will be equivalent to the value of the Company's share less the ERO Price at the time they become effective.

In all cases, the respective employees must have remained as such in the Company at the corresponding accrual date to qualify for these benefits.

Given the characteristics of this program, it has been recorded in accordance with the provisions of IFRS 2 "Share-based payments" and has been considered as a "cash settlement award" and, therefore, recorded at fair value as a liability that is part of the items Trade and other accounts payables and Provisions for employee benefits, non-current, which is updated at the closing date of each financial statement with effect on profit or loss for the period and classified in the line "Administrative expenses" of the interim Consolidated Statement of Income by function.

The fair value has been determined on the basis of the current share price and the best estimate of the future value of the Company's share, multiplied by the number of underlying units granted. This estimate was made based on the Company's Business Plan and its main indicators such as EBITDAR, adjusted net debt.

The movement of units as of December 31, 2023, is as follows:



Opening balance as of 01.01.2023Granted during the periodVestedExercised during the periodForfeited during the periodClosing balance as of 12.31.2023
RSU - Retention— 3,107,603,293 — — (121,146,360)2,986,456,933 
PSU - Performance— 4,251,780,158 — — (242,192,091)4,009,588,067 
MPPBASEDRSU - Protection— 1,438,926,658 — — (192,047,245)1,246,879,413 
Total— 8,798,310,109 — — (555,385,696)8,242,924,413 



NOTE 34 - STATEMENT OF CASH FLOWS


(a)The Company has carried out the following transactions with non-monetary impact:

a.1) Proceeds from the issuance of shares as of December 31, 2022:


DetailThUS$
Issuance of shares800,000 
Issuance costs(80,000)
DIP Junior offset(170,962)
Total cash flow549,038 

From the total capital increase for ThUS$ 800,000, ThUS$ 549,038 were cash Inflows presented in Financing Activities. ThUS$ 170,962 were offset against a portion of the Junior DIP maintained with the shareholder Inversiones Costa Verde Ltda. y CPA Additionally, there were ThUS$ 80,000 deducted related to equity issuance cost, that are presented within Other sundry reserves of equity.





130


a.2.)    Amount from the issuance of other equity instruments as of December 31, 2022 :

DetailConvertible
Notes H 		Convertible
Notes I 		Total
ThUS$ ThUS$ ThUS$
Fair Value (see note 24)1,372,837 4,097,788 5,470,625 
Use for settlement of claim— (828,581)(828,581)
Issuance costs(24,812)(705,467)(730,279)
DIP Junior offset(327,957)(381,018)(708,975)
Cash inflow1,020,068 2,182,722 3,202,790 

The payment of DIP Junior offset is related to payment of the Junior Dip through the issues of the Convertible Notes subscribed for the shareholders Delta Air Lines, Inc and QA Investment Ltd. for ThUS$ 327,957 and of the other creditor for ThU$ 381.018.

a.3.)      As a result of the exit from Chapter 11, in relation to trade accounts payable and other accounts payable, the conversion into shares for Notes G and I was carried out, for a total of ThUS$3,610,470 and a decrease in said item with effect in result which is included in Earning (Loss) from restructuring activities for ThUS$2,550,306 (see note 26d) and with effect in results in financial income for ThUS$420,436 (see note 26e).

a.4.)      As a result of the exit from Chapter 11, the Other financial liabilities item decreased its balance by ThUS$2,673,256, which is detailed in letter, d). The break down of this decrease corresponds mainly to ThUS$491,326 (see note 26e), ThUS$354,249 (decrease with effect in Property, plant and equipment, mainly related to the effect of rate change), ThUS$381,018 related to the compensation of the debt with the effect of increasing Capital, ThUS$1,443,066 associated with the conversion of debt into shares and other minor effects of ThUS$3,596.

a.5.)      The Company has also carried out non-monetary transactions related to Right of use assets, Lease liabilities and Financial leases.




























131



(b)Other inflows (outflows) of cash:

For the year ended
At December 31,
20232022
ThUS$ ThUS$
Restricted Advances20,572 (26,918)
Bank commissions, taxes paid and other(2,173)(5,441)
Taxes on financial transactions(6,803)(2,134)
Guarantees4,406 (47,384)
Payment for hedging instruments30,413 35,857 
Court deposits(16,349)(20,661)
Derivative margin guarantees(2,559)(40,207)
Payment for derivatives premiums(47,853)(23,372)
Total Other inflows (outflows) Operation activities(20,346)(130,260)
Guarantee deposit received from the sale of aircraft48,258 6,300 
Insurance recovery11,000 — 
Total Other inflows (outflows) Investment activities59,258 6,300 
Interest rate derivatives15,934 — 
Funds delivered as restricted advances— (313,090)
Payments of claims associated with the debt— (21,924)
Debt Issuance Cost - Stamp Tax — (33,259)
Taxes on financial transactions(4,529)— 
Debt-related legal advice— (87,993)
RCF guarantee placement— (7,500)
Total Other inflows (outflows) Financing activities11,405 (463,766)


(c) Dividends:

As of December 31, 2023 and 2022, there were no disbursements associated with this concept.



















132



(d)Reconciliation of liabilities arising from financing activities:

Cash flows Non cash-Flow Movements
Obligations with financial institutionsAs of
December 31, 2022		ObtainmentPayment Interest
accrued and
others		Reclassifications (***)As of
December 31, 2023
Capital (*)Capital (**)Interests
ThUS$ThUS$ThUS$ ThUS$ ThUS$ThUS$ ThUS$
Bank loans1,385,995 — (81,952)(153,791)189,272 (310,090)1,029,434 
Guaranteed obligations325,061 — (19,726)(20,309)20,686 (1,790)303,922 
Other guaranteed obligations474,304 — (56,519)(42,283)43,037 11,811 430,350 
Obligation with the public1,289,799 — — (155,655)168,694 — 1,302,838 
Financial leases1,088,239 — (183,374)(48,272)58,076 (13,123)901,546 
Other loans2,028 — (434)— (70)(1,420)104 
Lease liability2,216,454 — (225,358)(173,924)1,150,822 — 2,967,994 
Total Obligations with financial institutions6,781,880 — (567,363)(594,234)1,630,517 (314,612)6,936,188 


Cash flowsNon cash-Flow Movements
Obligations with financial institutionsAs of
December 31, 2021		ObtainmentPaymentExtinguishment
of debt under
Chapter 11		Interest
accrued and
 others 		Reclassifications As of
December 31, 2022
Capital (*)Capital (**)Interests Legal advices related to debt
ThUS$ThUS$ThUS$ ThUS$ ThUS$ThUS$ThUS$ ThUS$ ThUS$
Loans to exporters159,161 — — — — (161,975)2,814 — — 
Bank loans521,838 982,425 (36,466)(10,420)— (196,619)128,077 (2,840)1,385,995 
Guaranteed obligations510,535 — (18,136)(13,253)(25)— 13,882 (167,942)325,061 
Other guaranteed obligations2,725,422 3,658,690 (5,408,540)(391,639)(91,247)(381,018)339,475 23,161 474,304 
Obligation with the public2,253,198 1,109,750 (1,501,739)(17,499)— (843,950)148,703 141,336 1,289,799 
Financial leases1,189,182 — (270,734)(34,201)— (37,630)37,211 204,411 1,088,239 
Other loans76,508 1,467,035 (1,523,798)(5,628)3,281 (56,176)40,806 — 2,028 
Lease liability2,960,638 — (131,917)(49,076)(2)(995,888)492,592 (59,893)2,216,454 
Total Obligations with financial institutions10,396,482 7,217,900 (8,891,330)(521,716)(87,993)(2,673,256)1,203,560 138,233 6,781,880 

(*) During the year 2023 , the Company did not obtain financing. During the year 2022, the Company obtained ThUS$ 2,361,875 amounts from long-term loans and ThUS$ 4,856,025 amounts from short-term loans, totaling ThUS$ 7,217,900.

(**) As of December 31, 2023, loan repayments ThUS$ 342,005 and payments of lease liabilities ThUS$ 225,358, disclosed in flows from financing activities and as of December 31, 2022, loan repayments ThUS$ 8,759,413 and liability payments for leases ThUS$ 131,917 disclosed in flows from financing activities.

(***) As a result of the exit from Chapter 11, Bank Loans decreased mainly by ThUS$ 297,161, related to the cancellation of the claim of TAM Linhas Aéreas S.A., which was pending resolution upon exit from the Chapter 11 process and which was compensated during 2023 with a fund delivered to an agent as restricted advances made in November 2022.





133



Below are the details obtained (payments) of flows related to financing:

For the years ended
December 31
20232022
Capital
raising		Payments Capital
raising		Payments
Flow ofCapital Interest Capital Interest
ThUS$ThUS$ ThUS$ ThUS$ThUS$ ThUS$
Aircraft financing— (251,388)(76,497)— (331,292)(52,088)
Lease liability— (225,358)(173,924)— (131,917)(49,076)
Non-aircraft financing— (90,617)(343,813)7,217,900 (8,428,121)(420,553)
Total obligations with Financial institutions— (567,363)(594,234)7,217,900 (8,891,330)(521,717)


(e)Advances of aircraft

Corresponds to the cash flows associated with aircraft purchases, which are included in the statement of consolidated cash flows, within Purchases of property, plant and equipment.

For the year ended
At December 31,
20232022
ThUS$ ThUS$
Increases (payments)(142,782)(23,118)
Recoveries215,362 3,037 
Total cash flows72,580 (20,081)


(f)Additions of property, plant and equipment and Intangibles

For the year ended
At December 31,
20232022
ThUS$ThUS$
Net cash flows from
Purchases of property, plant and equipment795,787 780,538 
Additions associated with maintenance337,126 486,231 
Other additions458,661 294,307 
Purchases of intangible assets68,052 50,116 
Other additions68,052 50,116 









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(g) The net effect of the application of hyperinflation in the consolidated cash flow statement corresponds to:
For the year ended
At December 31,
20232022
ThUS$ThUS$
Net cash flows from (used in) operating activities(47,569)(36,701)
Net cash flows from (used in) investment activities3,661 (146)
Net cash flows from (used in) financing activities— 7,703 
Effects of variation in the exchange rate on cash and cash equivalents43,908 29,144 
Net increase (decrease) in cash and cash equivalents— — 

(h) Payments of leased maintenance
Payments to suppliers for the supply of goods and services include the value paid associated with leased maintenance capitalizations for ThUS$294,549 (ThUS$149,142 as of December 31, 2022).


(i)     Payments of loans to related entities as December 31, 2022:

ThUS$
Delta Air Lines, Inc.(78,947)
Qatar Airways(78,947)
Costa Verde Aeronautica S.A.(257,533)
Lozuy S.A.(107,122)
QA Investments Ltd(242,967)
QA Investments 2 Ltd(242,967)
Payments of loans to related entities(1,008,483)



NOTE 35 - THE ENVIRONMENT


LATAM Airlines Group S.A is compromised with sustainable development, seeking to generate social, economic, and environmental value for the countries where it operates and for all its stakeholders. The company manages socio-environmental matters at a corporate level, centralized in the Corporate Affairs and Sustainability Department. The company is committed to monitoring and mitigating its impacts on the environment in all its ground and air operations, being a key element in the solution, and searching for alternatives to the challenges of the company and its environment.

The main functions of Corporate Affairs and Sustainability Department in environmental matters in conjunction with the various areas of the company include ensuring that environmental legal compliance would be maintained in all the countries, implementing and maintaining corporate environmental management, the efficient use of non-renewable resources such as aircraft fuel, the responsible disposal of its wastes, and the development of programs and actions that allow it to reduce its greenhouse gas emissions, seeking to generate environmental social and economic benefits for the company and the countries where it operates.

LATAM's sustainability strategy that was launched in 2021 is based on 4 pillars: Environmental Management System, Climate Change Management, Circular Economy and Shared Value. With these pillars, the company seeks to generate social, environmental and economic value for society and the company, anticipating the risks inherent in the sustainability challenges which is viewed by the current and future scenarios.


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The aspects addressed in each pillar within the strategy are presented below:

Environmental Management System

The company is working to standardize its environmental management system at a cross-cutting level and under this structure, certified its operation in accordance with stage II of the IATA Environmental Assessment Program (IEnvA), which is designed to evaluate and improve the environmental management of airlines, due to not only being based on the ISO 14001 standard, also involves the best practices of the industry.

Climate Change Management

To manage its carbon footprint and contribute to the protection of strategic ecosystems in the region, LATAM aspires to offset and reduce the equivalent of 50% of domestic emissions by 2030 and seeks to be carbon-neutral by 2050, in accordance with this it has focused its strategy in:

1.Efficient operation: with the implementation of LATAM Fuel Efficiency, a corporate program for the efficient use of fuel that considers initiatives within the company that has an impact on fuel consumption.

2.Sustainable Alternative Fuels (SAF): Due to the importance of Sustainable Aviation Fuel (SAF) to reduce the emissions in the long term, LATAM is developing a work plan focused on Brazil and Colombia; which has recognized and long-standing experience in biofuels; and Chile, a country with a high developmental potential in green hydrogen.


3.Offsetting: LATAM has assumed a total commitment to the environment and has established different alliances that will allow it not only to acquire carbon credits for its offsetting needs but also to contribute to the conservation of strategic ecosystems in the region. During the first half of 2023, LATAM launched its offsetting program for passengers “1+1 Offset to Conserve”, where passengers are invited to contribute to the conservation of iconic ecosystems through offsetting their flight’s footprint and for every ton compensated by its clients, LATAM duplicates the impact by compensating the same amount.


Circular Economy

LATAM seeks to remove single-use plastics as part of its ambition of striving to be a zero-waste group to landfill by 2027. To achieve these goals, it has reviewed the materials used in its process and its waste management to promote the circular economy within its processes, acting from materials. During 2023 LATAM was recognized by IATA, as the winner of the 'Air Cargo Innovation Award' for its projects to reduce plastic in domestic and international cargo operations in Chile & Brazil.


Shared Value

In shared value, the Solidarity Plane program stands out, it was established in 2011 and through which LATAM provides its network, connections, and capacity for passenger and freight transit to South American society at no cost in three areas of action: supports health needs, conservation of natural resources, and assistance in the event of natural disasters.

Within the framework of the implementation of the strategy, during 2023, the company worked on the following initiatives:


•Implementation of the environmental management system in accordance with the IATA Environmental Assessment Program IenvA, stage 2.

•Supporting conservation projects and offsetting

•Measurement and management of the corporate carbon footprint.

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•Offsetting of 50% of domestic air emissions in Colombia.

•Verification of the company's emissions in accordance with EU-ETS, UK-ETS and CORSIA schemes.

•Structuring of a waste management system to advance in the fulfillment of its circular economy goals.

•Implementing processes for the elimination of single-use plastic in the operation and waste reduction to landfill

•Strengthening of the Solidarity Plane program.


The group was part of the Dow Jones Sustainability Index for six consecutive years, being classified as one of the most sustainable in the world. Today, LATAM continues to use the analysis as benchmarking and as a guide to implementing improvements in its processes. In 2023, according to the S&P Corporate Sustainability Assessment (CSA), LATAM was recognized as the most sustainable airline in the region, according to this assessment.



NOTE 36 - EVENTS SUBSEQUENT TO THE DATE OF THE FINANCIAL STATEMENTS

On February 7, 2024, the Brazilian Federal Revenue Service Brazilian issued a tax assessment against TAM Linhas Aéreas on the amount of ThUS$ 52,281 (ThR$ 253,565) related to certain tax credits on about “PIS COFINS” (Federal Social Contributions Levied on Gross Revenue) during the period of 2019/2020. The Company will be filing an administrative response disputing the total amount of the tax assessment.

After December 31, 2023 and up to the date of issuance of these financial statements, there is no knowledge of other events of a financial or other nature that significantly affect the balances or their interpretation.

The consolidated financial statements of LATAM Airlines Group S.A. and Subsidiaries as of December 31, 2023, have been approved in the Extraordinary Session of the Board of Directors on February 22, 2024.