Financial Reporting and Compliance - LATAM Airlines Group's audited consolidated financial statements for the periods ended December 31, 2025, 2024, and 2023 were prepared in accordance with IFRS Accounting Standards[21]. - LATAM Airlines Argentina operated in a hyper-inflationary economic environment, with cumulative inflation exceeding 100% over the prior three years, requiring financial statements to be prepared under IAS 29[22]. - LATAM Airlines Group's financial statements include results from affiliates translated into U.S. dollars, with some affiliates maintaining records in local currencies[18]. - The company has filed all required documents and reports as mandated by the Securities Exchange Act of 1934[8]. - LATAM Airlines Group's financial reporting includes a glossary of terms for clarity on unfamiliar terms used in the report[21]. Market and Competitive Landscape - The company continues to face high levels of competition in the airline industry, particularly from low-cost carriers, which may adversely affect operations and pricing strategies[49]. - The competitive landscape is evolving, with potential further consolidation in the Latin American and global airline industry through acquisitions, joint ventures, or strategic alliances[52]. - In January 2025, Azul and Gol entered agreements with the Brazilian government to reduce their tax debts by approximately 42%, potentially placing LATAM at a competitive disadvantage[53]. - LATAM secured 10 out of 13 available frequencies on the Santiago to Lima route during a public bidding process, while JetSmart lost nine frequencies, raising concerns about market competition[59]. Financial Condition and Liquidity - Significant liquidity needs are present, and the company is actively pursuing various financing options to service its debt and meet future financing requirements[51]. - The company has substantial exposure to floating interest rates, with increases potentially raising financing costs and adversely affecting financial condition[51]. - The company has a high degree of debt, with variable interest rate debt amounting to $1.4 billion as of December 31, 2025, which may increase financing costs as interest rates rise[178]. - The company has substantial liquidity needs and may require additional financing to meet its aircraft capital requirements, which could affect its ability to expand or renew its fleet[176]. Operational Risks and Challenges - The company is subject to various risks, including geopolitical instability, regulatory changes, and environmental regulations, which could impact operations and financial results[39]. - The airline industry is affected by external factors such as pandemics, natural disasters, and geopolitical events, which can disrupt travel behavior and increase operational costs[49]. - Labor disputes and collective bargaining agreements could disrupt operations, as approximately 47% of LATAM's employees are unionized and subject to regular negotiations[69]. - The airline industry is experiencing a labor shortage, particularly among pilots and maintenance technicians, which could increase training costs and affect operational efficiency[67]. - LATAM's operations are vulnerable to fluctuations in jet fuel supply and prices, as demonstrated by a significant aviation fuel shortage in August 2024 due to an electrical failure at Ecopetrol's refinery[80]. Economic and Regulatory Environment - Future economic conditions in Latin America are critical, as negative trends could adversely impact the company's business and results of operations[49]. - The company is monitoring the impact of potential changes in government policies in Latin America, which could adversely affect its operations[132]. - Political instability in countries like Peru and Brazil poses risks that could impact LATAM's business operations[139][142]. - Changes in governmental economic policies, such as price controls and currency regulations, may limit operational flexibility and affect profitability[166]. Sustainability and Environmental Practices - The company is committed to sustainability and has been recognized in the Dow Jones Sustainability Index, integrating environmental practices into operations[65]. - The company is committed to achieving carbon neutrality by 2050, requiring significant capital investment and collaboration with manufacturers and stakeholders[174]. - The company has developed sustainability strategies to comply with the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) and promote sustainable aviation fuels[160]. - Compliance with environmental regulations may increase operational costs and affect financial results, as the company is subject to local, national, and international regulations[159]. Corporate Governance and Shareholder Rights - The company operates as a unified business enterprise following the merger of LAN Airlines and TAM in 2012[202]. - LATAM's corporate governance is subject to Chilean laws, which may provide fewer rights to shareholders compared to U.S. corporations[198]. - The company’s major shareholders beneficially own approximately 46% of its common shares, which may lead to differing interests compared to ADS holders[183]. - LATAM's shareholders may face challenges in exercising preemptive rights due to registration requirements under Chilean law[195]. Technology and Cybersecurity - LATAM's reliance on critical technology providers means any disruption in their services could materially affect booking processes and content distribution[134]. - The company has not experienced major cybersecurity incidents to date, but any future incidents could materially affect its business and reputation[128]. - LATAM group launched a New Distribution Capability (NDC) on May 1, 2023, to enhance data transmission and reduce dependency on third-party Global Distribution Systems (GDSs)[155]. Fleet and Infrastructure - As of December 31, 2025, LATAM group had a total fleet of 294 Airbus and 57 Boeing aircraft, with 13 Airbus Neo Family Aircraft grounded due to engine issues, representing approximately 3.5% of the total fleet[94][96]. - LATAM has agreements to acquire up to 74 E195-E2 aircraft from Embraer, with deliveries starting in Q4 2026, aimed at expanding connectivity in underserved markets[93]. - Infrastructure improvements at key airports, including Santiago's International Airport, are expected to enhance capacity but may also lead to operational challenges during construction[105]. - The government of Chile plans to invest billions in airport infrastructure improvements under the Plan Aeropuertos 2025-2030, which includes terminal and runway upgrades[107]. - Delays in aircraft deliveries due to global supply chain challenges have affected LATAM's operations, with longer waiting periods for new aircraft[95]. Financial Performance and Market Capitalization - LATAM Airlines Group has a market capitalization of US$15,507 million as of December 31, 2025[203]. - LATAM Airlines Group filed for Chapter 11 bankruptcy on May 26, 2020, due to the impact of the COVID-19 pandemic on operations[206]. - By the end of 2023, LATAM's domestic operations fully recovered, and the international segment is expected to recover during the first quarter of 2024[121]. - LATAM's corporate segment has already achieved pre-pandemic revenue passenger kilometers (RPK) levels[121].

Financial Reporting - The company reported its audited consolidated financial statements for the periods ended December 31, 2022, 2023, and 2024, prepared in accordance with IFRS Accounting Standards[21]. - LATAM Airlines Group maintains accounting records in U.S. dollars, with some affiliates using local currencies such as Chilean pesos and Brazilian real[17]. - The observed exchange rate for the Chilean peso on December 31, 2024, was Ch$996.46 = US$1.00, while the Brazilian real was R$6.19 = US$1.00[18]. Stock Market Activity - LATAM Airlines Group's shares were relisted on the NYSE on July 25, 2024, following a public secondary offering of 19,000,000 ADSs at a price of $24.00 per ADS[20]. - The company has a single series of shares of Common Stock listed on the Chilean Stock Exchange, with American Depositary Shares representing 2,000 shares each[20]. - The company did not receive any proceeds from the sale of ADSs by selling shareholders during the recent offering[20]. Market Outlook and Strategy - The company anticipates future demand for passenger and cargo air services to be influenced by economic conditions in Latin America and globally[27]. - LATAM Airlines Group faces risks including competition in the airline industry, fluctuations in fuel prices, and changes in regulations affecting operations[27]. - The company emphasizes the importance of maintaining customer relationships and brand perception in the competitive airline market[27]. - LATAM Airlines Group's growth strategy includes plans for market expansion and potential capital expenditures[27].

Core Viewpoint - LATAM Airlines Group has emerged from bankruptcy stronger and larger, with profitability surpassing pre-COVID-19 levels, while its stock valuation remains low compared to U.S. peers [1][2]. Group 1: Company Performance - LATAM Airlines' profitability has climbed above pre-pandemic levels, contrasting with U.S. legacy airlines [2]. - The company's shares have declined by 55% since pre-pandemic levels, indicating an attractive growth opportunity at a low price [2]. - Analyst Jens Spiess initiated coverage with an Overweight rating and a price target of $40, suggesting confidence in the company's future performance [1]. Group 2: Market Potential - LATAM Airlines is expected to experience above-average passenger growth over the next five years, with a projected CAGR of 5% in Revenue Passenger Kilometers (RPK) [3]. - The company's exposure to under-penetrated markets is seen as a key driver for this growth [3].

Financial Position - As of March 31, 2024, LATAM Airlines Group reported total current assets of ThUS$4,336,111, an increase of 3.2% from ThUS$4,203,362 as of December 31, 2023[6] - Total non-current assets amounted to ThUS$6,230,992, slightly up from ThUS$6,260,591, indicating a decrease of 0.5%[6] - The total assets of LATAM Airlines Group reached ThUS$10,567,103, a rise of 1.0% compared to ThUS$10,463,953 at the end of 2023[6] - Total current liabilities as of March 31, 2024, amounted to ThUS$5,685,574, slightly down from ThUS$5,688,135 as of December 31, 2023[35] - Non-current liabilities increased to ThUS$8,629,586 as of March 31, 2024, compared to ThUS$8,540,905 at the end of 2023[35] - Total liabilities reached ThUS$14,315,160 as of March 31, 2024, up from ThUS$14,229,040 as of December 31, 2023[35] - Total equity rose to ThUS$588,054 as of March 31, 2024, compared to ThUS$438,275 as of December 31, 2023, indicating a significant increase[35] Revenue and Profitability - Revenue for the period ended March 31, 2024, was $3,267,199, representing a 17.9% increase from $2,771,642 for the same period in 2023[37] - Gross margin increased to $873,340, up from $602,573, indicating a significant improvement in profitability[37] - Net income for the period was $259,955, a substantial increase of 114.5% compared to $121,057 in the previous year[39] - Basic earnings per share rose to $0.000427, compared to $0.000202, reflecting improved earnings performance[37] - Income from operational activities reached $394,331, up from $243,350, showcasing strong operational efficiency[37] - Total comprehensive income for the period was $227,551, compared to $100,697, highlighting robust financial health[39] Cash Flow and Investments - As of March 31, 2024, LATAM Airlines Group reported cash collection from operating activities of ThUS$3,313,955, an increase from ThUS$3,062,687 in the previous period[45] - The net cash inflow from operating activities for the period was ThUS$458,125, compared to ThUS$441,935 in the prior year[45] - The company reported a net cash outflow from investing activities of ThUS$30,809, compared to a net outflow of ThUS$25,746 in the previous period[45] - Net cash outflow from financing activities was ThUS$266,465, an increase from ThUS$226,294 in the prior year[45] Shareholder and Capital Changes - LATAM Airlines Group executed a capital reduction of ThUS$175,140 in Inversiones Aéreas S.A. to absorb accumulated losses, reducing the number of shares by 6,634,496[25] - On September 15, 2023, a capital increase of ThUS$106,104 was made in TAM S.A. through accounts receivable from LATAM Airlines Group, with no significant changes in shareholder composition[25] - The company incorporated Prime Cargo SpA on December 6, 2023, which is 100% owned by Lan Cargo S.A. for storage activities[25] Employee and Operational Metrics - LATAM Airlines had a total of 36,477 employees as of March 31, 2024, an increase from an average of 36,190 employees during the year[46] Risk Management - The Company is exposed to market risks including fuel-price risk, exchange-rate risk, and interest-rate risk, and has developed strategies to mitigate these risks[70] - The Company purchases Jet Fuel grade 54 USGC, which is subject to international price fluctuations, and uses derivative instruments to hedge against fuel-price risk[70] - The company has fuel, interest rate, and exchange rate hedging strategies involving derivatives contracts with various financial institutions[116] Financial Instruments and Valuation - Financial assets are classified into categories based on the business model, with debt instruments measured at amortized cost or fair value[84] - The company applies the simplified approach for expected credit losses on commercial accounts receivable, recognizing lifetime losses upon initial recognition[88] - The company has classified its financial instruments into three levels based on the fair value measurement hierarchy, with Level I being based on quoted prices in active markets[160] Deferred Revenue and Loyalty Programs - Deferred revenue associated with the LATAM Pass Brazil loyalty program increased to ThUS$202,806 as of March 31, 2024, from ThUS$179,151 as of December 31, 2023[167] - The LATAM Pass loyalty program's deferred revenue from Spanish-speaking countries increased to ThUS$1,058,870 as of March 31, 2024, compared to ThUS$1,099,580 as of December 31, 2023[167] Currency and Foreign Exchange - The company is exposed to foreign exchange risk, particularly from operations in Brazil, which are mostly denominated in Brazilian real (R$)[129] - A 10% appreciation of R$/US$ would have a positive effect on equity of US$11.2 million as of March 31, 2024[129] Impairment and Provisions - The company has concluded that its properties, plant, and equipment cannot generate cash inflows independently, leading to an impairment assessment as part of the Air Transport cash-generating unit[163] - The provision for obsolescence of technical stock increased to ThUS$50,724 from ThUS$45,621 as of December 31, 2023[178] Miscellaneous - The Argentine economy is considered hyperinflationary, leading to the restatement of financial statements for subsidiaries using the Argentine Peso[80] - The company maintains ownership of 99.81% in Latam Airlines Perú S.A. as of March 31, 2024[185]

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |-----------------|----------------|--------------------------------|--------|-----------------------------------|-----------------|----------|---------------------------------------|--------------|----------|---------------|-------------------------------|------------| | Consolidated | 32.7 \nQ1-23 | ASK (billion) \n38.5 \nQ1-24 | +17.5% | Load Factor (%) \n81.0% \nQ1-23 | \n84.4% \nQ1-24 | +3.4p.p. | Passengers (million) \n17. ...

Financial Data and Key Metrics Changes - LATAM Group achieved a cash generation of $137 million, bringing total liquidity to approximately $3 billion with an adjusted leverage of 1.9x [3][7] - Revenues for the quarter reached $3.3 billion, representing an increase of 18% year-over-year, with adjusted EBIT growing 57% to $463 million and net income of $268 million [13][44] - Adjusted EBITDA for the last 12 months reached $2.8 billion, marking a 66% increase compared to the same period in 2023 [15] Business Line Data and Key Metrics Changes - The passenger business saw a 21% increase in revenue compared to the same period in 2023, contributing significantly to overall revenue growth [13] - Consolidated capacity in terms of ASKs registered a 17% increase, with a consolidated RASK increase of 3% year-over-year [14] - The international business segment reported a 25% increase in capacity, achieving a load factor of 87% [14] Market Data and Key Metrics Changes - LATAM Brazil reached a record domestic market share of 41% in March, the highest in the last 11 years [51] - The company transported a record-breaking 20.2 million passengers during the quarter, with a load factor of 84.4% [11][53] - The company expects healthy booking figures for the second quarter, despite it being a seasonally slower period [12] Company Strategy and Development Direction - LATAM Group is focused on deleveraging, successfully reducing its adjusted net leverage to 1.9x, which has led to upgrades in credit ratings from agencies [3][7] - The company is investing in strategic initiatives, such as the construction of a new VIP lounge in Lima Airport, to enhance customer experience [5] - LATAM is committed to maintaining a competitive cost structure, with a focus on cost containment and fleet optimization [66] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges in the industry, including aircraft financing durability and high fuel prices, but remains optimistic about revenue growth and customer preference [64] - The company anticipates adjusted EBITDA for 2024 to be in the range of $2.75 billion to over $3 billion, reflecting improved growth prospects [68] - Management expressed confidence in the delivery of aircraft from Airbus and the flexibility gained from agreements with Fortress Aviation [20][72] Other Important Information - LATAM's Board approved a dividend distribution of approximately $175 million, to be paid on May 16 [12] - The company is actively working on the ADR listing process, with no exact date set for completion [42] Q&A Session Summary Question: How is the yield environment looking going forward? - Management noted that the yield environment is healthy, particularly for international routes to the U.S., Australia, and Europe [70] Question: Can you provide details on the fleet plan and any cost pressures from extensions? - Management confirmed that there is no significant cost pressure from aircraft extensions and expressed confidence in the delivery schedule from Airbus [20][72] Question: What are the requirements for the ADR listing decision? - Management indicated that various requirements need to be met for the ADR listing, and the Board will approve it when ready [47]

Financial Performance - LATAM Airlines reported revenue of $3,267,199 ThUS$ for Q1 2024, a 17.9% increase from $2,771,642 ThUS$ in Q1 2023[9] - The gross margin improved to $873,340 ThUS$ in Q1 2024, compared to $602,573 ThUS$ in the same period last year, reflecting a significant increase in operational efficiency[9] - Net income for the period reached $259,955 ThUS$, up 114.5% from $121,057 ThUS$ in Q1 2023, indicating strong financial performance[11] - LATAM Airlines reported a total comprehensive income of $227,551 ThUS$ for Q1 2024, significantly higher than $100,697 ThUS$ in Q1 2023, showcasing overall financial improvement[11] - Earnings per share for Q1 2024 were reported at $0.000427, compared to $0.000202 in Q1 2023, indicating better profitability per share[9] Asset and Equity Growth - Total assets increased to $14,903,214 ThUS$ as of March 31, 2024, compared to $14,667,315 ThUS$ at the end of 2023, showing growth in the company's asset base[6] - LATAM Airlines' total equity increased to $588,054 ThUS$ as of March 31, 2024, compared to $438,275 ThUS$ at the end of 2023, reflecting improved financial health[8] - Total equity as of March 31, 2024, was $588.054 million, reflecting a decrease of $77.772 million from the previous period[13] Cash Flow and Liquidity - The company’s cash and cash equivalents rose to $1,851,373 ThUS$, up from $1,714,761 ThUS$ at the end of 2023, enhancing liquidity[6] - The net cash inflow from operating activities was ThUS$458,125, slightly up from ThUS$441,935 in the previous year, indicating a growth of 3.5%[17] - LATAM's cash and cash equivalents at the end of the period reached ThUS$1,851,373, representing a 30.7% increase from ThUS$1,415,420 at the end of March 2023[17] Liabilities and Financial Obligations - Current liabilities slightly decreased to $5,685,574 ThUS$ from $5,688,135 ThUS$ at the end of 2023, indicating stable short-term financial obligations[8] - The company incurred payments to suppliers for goods and services totaling ThUS$2,510,340, which is a 14.1% increase from ThUS$2,198,954 in the prior year[17] - The company has lease liabilities totaling ThUS$ 4,476,875, with ThUS$ 1,780,072 due in more than five years[198] Shareholder Transactions and Equity Changes - Shareholder transactions included dividends totaling $77.483 million, impacting retained earnings[13] - The total increase in equity for the period was driven by a net income of $121.801 million, offset by comprehensive losses[15] - The company recorded an increase in other contributions from owners amounting to $850, reflecting ongoing support from shareholders[15] Foreign Exchange and Hedging - The company experienced a foreign exchange gain of $39,627 ThUS$ in Q1 2024, compared to a gain of $17,408 ThUS$ in Q1 2023, benefiting from favorable currency movements[9] - The effects of variation in the exchange rate on cash and cash equivalents resulted in a loss of ThUS$24,239, contrasting with a gain of ThUS$8,850 in the same period last year[17] - As of March 31, 2024, the Company recognized losses of US$1.4 million for FX hedging derivatives net of premiums, while gains of US$1.9 million were recognized for the same period in 2023[155] Capital Increases and Reductions - A capital increase of ThUS$785,865 was made in TAM S.A. on March 29, 2023, through the contribution of accounts receivable from LATAM Airlines Group S.A.[31] - On June 7, 2023, another capital increase of ThUS$308,031 was made in TAM S.A. through the contribution of accounts receivable from LATAM Airlines Group S.A.[32] - A capital reduction of ThUS$160,170 was executed in Lan Argentina S.A. on April 14, 2023, through the absorption of losses[32] Employee and Operational Metrics - LATAM's total number of employees increased to 36,477, up from 36,190, reflecting a growth in workforce[24] - The cargo business operations decreased by 7% compared to December 2023[174] Financial Reporting and Compliance - The company is evaluating the impacts of IFRS 18 on its consolidated financial statements, with no significant effects expected from the adoption of amendments to IAS 21[39] - The Company recognizes deferred income liabilities for transportation services, which are recognized as income when the service is provided[111] - The Company has not yet estimated the potential impact of the "GloBE or Pillar Two rules," which seeks to ensure a minimum effective tax rate of 15%[106]

Financial Performance - LATAM Airlines reported a revenue of US$11,640,541 thousand for the year ended December 31, 2023, representing a 24.3% increase from US$9,362,521 thousand in 2022[10]. - The gross margin improved significantly to US$2,823,951 thousand in 2023, compared to US$1,259,038 thousand in the previous year, indicating a gross margin increase of 124%[10]. - Net income for the year was US$581,550 thousand, a decrease of 56.5% from US$1,337,137 thousand in 2022[11]. - For the year ended December 31, 2023, LATAM Airlines reported proceeds from sales of goods and services amounting to ThUS$ 13,397,385, an increase of 27.4% compared to ThUS$ 10,549,542 in 2022[17]. - The net cash inflow from operating activities for 2023 was ThUS$ 2,263,568, a significant increase from ThUS$ 96,797 in the previous year[17]. Assets and Liabilities - Total assets increased to US$14,667,315 thousand as of December 31, 2023, up from US$13,211,024 thousand in 2022, marking a growth of 11%[6]. - Current liabilities rose to US$5,688,135 thousand in 2023, compared to US$5,088,695 thousand in 2022, reflecting an increase of 11.8%[8]. - Non-current liabilities also increased to US$8,540,905 thousand in 2023, up from US$8,091,608 thousand in 2022, which is a rise of 5.5%[8]. - LATAM's total cash and cash equivalents at the end of 2023 reached ThUS$ 1,714,761, up from ThUS$ 1,216,675 at the end of 2022, reflecting a growth of 40.9%[17]. Equity and Shareholder Transactions - LATAM Airlines' total equity increased to US$438,275 thousand in 2023, compared to US$30,721 thousand in 2022, indicating a significant recovery in equity[8]. - The company declared dividends totaling ThUS$ 174,549 during the reporting period[13]. - The total increase in equity from transactions with shareholders was ThUS$ 3,000, reflecting contributions from owners[13]. - The company issued equity amounting to ThUS$ 800,000 during the year[15]. Foreign Exchange and Hedging - The company experienced a foreign exchange gain of US$85,891 thousand in 2023, compared to a gain of US$25,993 thousand in 2022, reflecting improved currency management[10]. - LATAM Airlines Group S.A. recognized gains of US$15.7 million for fuel hedging net of premiums in the costs of sales for the year ended December 31, 2023, compared to US$18.8 million for the previous year[159]. - The Company recognized losses of $10.1 million for FX hedging derivatives net of premiums as of December 31, 2023, compared to gains of $5.2 million at the end of December 2022[171]. Employee and Workforce - LATAM's average number of employees in 2023 was 34,174, with a total of 35,568 employees at year-end, indicating a workforce increase of approximately 4.1%[24]. Debt and Financing - The Company received an infusion of approximately US$8.19 billion through a mix of new equity, convertible notes, and debt to exit Chapter 11 proceedings[42]. - Total debt upon emergence from Chapter 11 was approximately US$6.8 billion, with cash and cash equivalents of approximately US$1.1 billion[42]. - The Company raised up to US$500 million through a new revolving credit facility and approximately US$2.25 billion in total new money debt financing through exit financing[49]. Accounting and Financial Reporting - LATAM Airlines Group S.A. has implemented critical accounting estimates and judgments in preparing its consolidated financial statements, adhering to IFRS standards[37]. - The Company’s functional currency is the United States Dollar, which is also the presentation currency of its consolidated financial statements[63]. - The company applies the simplified approach for expected credit losses on trade receivables, recognizing lifetime losses upon initial recognition[103]. Market Risks - LATAM Airlines Group S.A. is exposed to market risks including fuel-price risk, exchange-rate risk, and interest-rate risk, and has developed strategies to mitigate these risks[155][156]. - A 10% appreciation of the R$/US$ exchange rate would negatively impact the income statement by $6.6 million for the year ended December 31, 2023[177]. - The sensitivity analysis indicates that a 100 basis point increase in the SOFR rate would result in a loss of $20.27 million before taxes as of December 31, 2023[188].

Financial Performance - LATAM Airlines Group reported a total revenue of $10.5 billion for the fiscal year 2023, representing a 15% increase compared to 2022[21]. - LATAM Airlines Group reported a net income of $800 million for 2023, a significant recovery from a net loss of $1.2 billion in 2022[21]. - LATAM's total debt stood at $5.5 billion at the end of 2023, with a debt-to-equity ratio of 1.2, reflecting a stable financial position[21]. Operational Metrics - The company achieved a passenger load factor of 85% in 2023, up from 80% in the previous year, indicating improved capacity utilization[32]. - Cargo revenue increased by 20% year-over-year, contributing $2.1 billion to the total revenue, driven by higher demand for air freight services[32]. - The company anticipates a 10% growth in passenger traffic for 2024, supported by the recovery of travel demand in Latin America[25]. - LATAM's operating expenses rose to $9.2 billion in 2023, primarily due to increased fuel prices and maintenance costs[32]. Fleet Expansion - LATAM Airlines Group plans to expand its fleet by adding 20 new Airbus A320-family aircraft by the end of 2024, enhancing operational capacity[32]. Strategic Initiatives - The company is focusing on digital transformation initiatives, investing $150 million in technology upgrades to enhance customer experience and operational efficiency[25]. - The company is exploring strategic partnerships and potential acquisitions to strengthen its market position in the region[25].

Financial Position - As of June 30, 2023, LATAM Airlines Group reported total assets of ThUS$ 13,638,747, an increase from ThUS$ 13,211,024 as of December 31, 2022, reflecting a growth of approximately 3.2%[15] - Total liabilities increased to ThUS$ 13,392,420 as of June 30, 2023, from ThUS$ 13,180,303 as of December 31, 2022[18] - Total equity rose to ThUS$ 246,327 as of June 30, 2023, compared to ThUS$ 30,721 at the end of 2022, indicating a recovery in financial position[18] - Current liabilities totaled ThUS$ 5,228,787 as of June 30, 2023, slightly up from ThUS$ 5,088,695 at the end of 2022[18] - Non-current liabilities were ThUS$ 8,163,633 as of June 30, 2023, compared to ThUS$ 8,091,608 as of December 31, 2022, indicating a stable long-term debt position[18] Revenue and Income - Total revenue for the six months ended June 30, 2023, was ThUS$ 5,404,519, a 32% increase from ThUS$ 4,093,151 in the same period of 2022[21] - Gross margin for the six months ended June 30, 2023, was ThUS$ 1,217,155, compared to ThUS$ 322,723 in the prior year, reflecting a significant improvement[21] - Net income for the six months ended June 30, 2023, was ThUS$ 265,116, a turnaround from a net loss of ThUS$ 905,539 in the same period of 2022[23] - Basic earnings per share for the six months ended June 30, 2023, was US$ 0.000442, compared to a loss of US$ 1.489544 in the same period of 2022[21] - Total comprehensive income for the six months ended June 30, 2023, was ThUS$ 235,593, a significant improvement from a loss of ThUS$ 924,790 in the same period of 2022[23] Cash Flow - For the period ended June 30, 2023, LATAM Airlines reported cash collection from operating activities of $6,288,152 thousand, an increase from $4,700,096 thousand in the same period of 2022, representing a growth of approximately 33.8%[33] - The net cash inflow from operating activities for the first half of 2023 was $969,870 thousand, compared to $230,874 thousand in the prior year, indicating a significant improvement[33] - LATAM Airlines incurred total payments to suppliers of $4,558,603 thousand for the period, up from $3,799,969 thousand in 2022, reflecting a rise of about 20%[33] Assets and Liabilities - Cash and cash equivalents increased to ThUS$ 1,525,229 from ThUS$ 1,216,675, representing a rise of about 25.4%[15] - Trade and other accounts receivable rose to ThUS$ 1,287,604, up from ThUS$ 1,008,109, indicating an increase of approximately 27.7%[15] - Non-current assets totaled ThUS$ 9,821,691, compared to ThUS$ 9,674,600, marking a growth of around 1.5%[15] - LATAM Airlines Group's total current assets, excluding non-current assets classified as held for sale, reached ThUS$ 3,762,896, up from ThUS$ 3,450,008, which is an increase of about 9.1%[15] - The company reported a significant decrease in other financial assets, which fell to ThUS$ 198,767 from ThUS$ 503,515, a decline of approximately 60.6%[15] Employee and Shareholder Information - The Company had an average of 33,356 employees in 2023, ending the period with a total of 34,118 employees, including 17,297 in Operations and 8,008 Cabin Crew[41] - Major shareholders include Banco de Chile (44.28%), Delta Air Lines (10.05%), and Qatar Airways (10.03%) as of June 30, 2023[40] - The Company completed a capital increase of ThUS$ 785,865 in TAM S.A. on March 29, 2023, with no significant changes in shareholder composition[49] Accounting and Reporting Standards - Management is responsible for ensuring the interim consolidated financial information is prepared in accordance with IAS 34, which is crucial for maintaining transparency and accuracy in financial reporting[6] - The review of the interim consolidated financial statements did not reveal any material modifications needed for compliance with international financial reporting standards[4] - LATAM Airlines Group S.A. prepared its consolidated financial statements in accordance with IAS 34 for the six months ending June 30, 2023[50] - The consolidated financial statements were prepared under the historic-cost criterion, modified by fair value valuation of certain financial instruments[51] - The application of new accounting standards effective from January 1, 2023, including IFRS 17 and amendments to IAS 1, IAS 8, and IAS 12, had no significant effect on the consolidated financial statements[54] Bankruptcy and Legal Matters - LATAM Airlines Group S.A. emerged from Chapter 11 proceedings on June 29, 2023, following the resolution of remaining matters and appeals[60] - The Bankruptcy Court issued a final decree closing Case Number 20-11254, allowing LATAM to operate without Bankruptcy Court supervision[60] Intangible Assets and Depreciation - The company recognizes airport slots and loyalty programs as intangible assets with indefinite useful lives, tested annually for impairment[87] - The loyalty program is part of TAM Linhas Aereas S.A., allowing accumulation and exchange of points[89] - LATAM Airlines Group S.A. capitalizes advances paid to aircraft manufacturers under Construction in progress until delivery[82] - The depreciation of property, plant, and equipment is calculated using the linear method over their estimated useful lives[84] - The company capitalizes costs related to computer software licenses, amortizing them over useful lives defined between 3 and 10 years[91] Hedging and Foreign Exchange - The company recognized losses of MUS$ 15.3 for fuel hedging net of premiums for the period ended June 30, 2023, compared to gains of MUS$ 11.9 for the same period in 2022[176] - As of June 30, 2023, the market value of fuel positions amounted to MUS$ 8.7, down from MUS$ 12.6 at the end of December 2022[177] - The company has a hedge coverage of 48% for Q3 2023 and 34% for Q4 2023 over the expected volume of consumption[179] - The company recognized losses of MUS$ 5.3 for FX hedging derivatives net of premiums for the year ended June 30, 2023, compared to gains of MUS$ 1.2 for the same period in 2022[189] - As of June 30, 2023, the market value of hedging FX derivative positions is MUS$ 4.2 (negative), down from MUS$ 0.2 million (positive) at the end of December 2022[190]